CEO and CFO, and Linda Biles, she's the Executive Vice President of Finance. We will start with a presentation by management, followed by Q&A. So the presentation is also accessible on the company's website. And if you would like to participate in the Q&A section, you can do so by submitting your question in the Q&A function at the bottom of your screen. And with that, I'll hand it over to you, Cameron. Welcome.
Yeah, great. Appreciate it. Thank you, everybody, for joining. Nice to meet you. I'm Cameron Pforr. I'm joined by Linda Biles, who's our EVP of Finance and runs our finance function. Linda is going to take you through a safe harbor statement, and then we'll get started just kind of giving you a brief overview of the company. Appreciate, Anja, you inviting us this year again. For those who have interest in doing more research on the company, we have a pretty good IR website where a lot of these presentations are held, and so I encourage you to go look at those, especially this one from our Investor Day in June, which has a lot of detail about how our products are deployed, if you have questions about that. But without, anyway, Linda, why don't you take it away?
Information included or incorporated by reference in this presentation may contain forward-looking statements. This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different than the future results, performance, or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and description of our future plans, strategies, and expectations, are generally identifiable by the use of words such as may, should, except, anticipate, estimate, believe, intend, or project, or the negative of these words or other variations on these words or comparable terminology. Examples of forward-looking statements include, but are not limited to, statements regarding efforts to grow revenue, expectations regarding fulfillment of backlog, future benefits to operating margins, and the adequacy of cash resources.
Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including without limitation, the risks outlined under risk factors in the information statement contained within our Form 10-K with the SEC on March 27, 2025. In light of these risks and uncertainties, there can be no assurance that forward-looking statements contained in this presentation will, in fact, be accurate. Further, we do not undertake any obligation to publicly update any forward-looking statements as a result. You should not place undue reliance on these forward-looking statements.
Okay. Thank you, Linda. So I wanted just to kind of touch on the company for those who aren't familiar with, you know, this is more of an introduction for you. And then I'll definitely open it up at the end for questions and encourage you to ask questions. We're doing one-on-one all day. So if you have a lot of interest in following up, maybe we can squeeze you into a group session. Or certainly email us at ir@mtron.com, and we can follow up later. Mtron is a really interesting story. It's a very unique company. It's an aerospace and defense-focused firm. We were founded in the 1960s, but it came together in its current configuration in the mid-2000s. Up until that time, it had been very telecom-focused.
For those of you old enough to know, I mean, the telecom sector went through some interesting gyrations, really tremendous growth in the late 1990s as they were building out networks and putting in fiber optics, and then a crash in the early 2000s that really dried up a lot of the network builds, and that impacted firms like ours, as well as others, so we shifted our approach really to defense, really locking in on not only the defense market, but some other markets too that really valued engineering in the products, needed custom products that were of really high reliability and made to very exacting specs, and we've had a lot of success in those areas, and we'll talk about that on the slide or in the slide deck today. We're listed on the New York Stock Exchange. MPTI is our ticker.
We were a spinout of a group called LGL, which is a holding company. That was done in kind of the fall of 2022. And we've had a lot of share appreciation since then. So it's been a rewarding stock for many investors. We have just a little shy of three million shares outstanding, no debt, and we're generating a lot of free cash flow for our size. And also, we have good alignment between our employees and management and shareholders. I mean, almost all of our employees are shareholders in the company. Excited about what we do. We are focused on, we're basically an American defense contractor, so we manufacture in the U.S. We are very focused on some, I guess you call them niche markets, but they're pretty big markets. So the U.S. defense market's very large.
We're also very involved in avionics, so the commercial aircraft industry, space, and also then a lot of industrial markets. What partly makes us unique is that we're fairly vertically integrated, and we are really also a platform at this point in time for growth, for inorganic growth, which is something we haven't done in the past. So we'll talk about that a little bit as well. Just in terms of us at a glance, I mentioned we're vertically integrated. We make the vast majority of our revenues from filters and oscillators, so things used to control timing and also the frequencies you're looking at for communications. And we also make some other parts as well, like resonators, and we build modules that are integrating our parts and other people's components into subsystems, basically, kind of solving a larger portion of our customer's problem. We have a great customer base.
We have over 70 customers who have been with us for 10 years or more. We sell to all the top 10 U.S. defense primes. We also sell to most of the large European primes as well. And we've had strong market performance. So over the past several years, the stock has appreciated well over 200%. And this year looks to be good as well. And that's really been generated by the kind of financial performance we've seen. So we've dramatically improved our margins over the past several years, and we've had also very good revenue growth. In terms of the management team, this is kind of what makes it possible. I joined about a year and a half ago. Linda and Bill, kind of really the two people I rely on the most.
Linda runs our finance function, has been here for 20 years, has a lot of manufacturing experience. Bill also has tons of manufacturing experience. He's really our GM, and he comes out of the industry, was at a number of other firms in the area, like FLIR and TriQuint, ICx, sorry, and others. And then our board is also very interesting. So Bel Lazar is a long-term executive in the industry, is at a place called EPC Power, which does power amplifiers, but at one point was involved in running the company that is now Spectrum Control. John Mega comes from L3. He was one of the founders of L3. Rob LaPenta Jr. runs a family office that focuses just on defense investments. He also has worked a lot in the defense sector, and his father was the CEO and chairman of L3 and the founder there.
And then we have a number of other people like Hendi Susanto, who is an equity analyst covering the space. So in terms of the products we produce, we are essentially a filter and oscillator company. We're moving up market, making other types of components and making larger subsystems. The vast majority of our revenues still come from filters and oscillators, but the resonator and the kind of the subsystem business is pretty dramatically expanding. That's about 7% of our revenues- to- date. And we make a number of different types of filters and oscillators, and we really kind of customize them for each client just to meet the individual requirements they each have. And so there's a lot of engineering work that goes into it to service their needs and build a product that fits their needs.
If you look at the split in the end markets of our products, we're pretty heavily aerospace and defense-focused. It's just shy of 70% of our revenues for 2024. The next largest segment is avionics, which is our name or nomenclature for commercial aircraft. And there we're selling to either Boeing or Airbus or some of their main suppliers. And we have a large number of parts involved in every single aircraft or airframe they sell. And then the smaller markets, but still growing markets, are space and industrials. And they're each around 5% usually per year. We have a broad number of applications. So aerospace, we talked about on airframes. Space and SatCom, they're in high Earth orbit spacecraft. We are usually in the ground control station, and then we'll also maybe be on the spacecraft. Usually, it's for a communication system.
And then, some of the areas that we're very active in the defense market is one is the largest area is communications. I'd say the second largest area is now precision-guided munitions, which has had a tremendous growth rate over the past three or four years. We're also very involved in UAVs, in radar, in electronic warfare. And one thing I highlighted recently is one of the big areas for growth for this coming year for us is in radar and EW. Those are areas where we invested in over the past several years, and our design wins are now going to a higher rate of production. And there's a lot of change taking place in those markets, some of it just driven by now autonomous vehicles. And so radar have to identify different types of targets and swarms of targets potentially with different profiles.
So there's a redesign process there. And electronic warfare is also moving forward really rapidly. So a little bit of history of the company. You guys can look this up later if you're interested, but we've been involved in the space market for, I don't know, 40 years at this point in time. So we have a lot of great capabilities in-house. We moved into the module market several years ago. And anyway, so this is available for you if you're interested. In terms of investment highlights, really, it's strong revenue. It's good financial fundamentals, really. So it's strong revenue growth and cash generation, very attractive end markets with long-term customers and people who appreciate what we do and have provided us a very decent margin.
I think we're very, very uniquely situated as being a U.S. manufacturer for some of these critical. We're a critical part of the supply chain for a lot of the defense types of products, and we have pretty compelling financials, and that's resulted in really good cash flow generation, and we've been doing it all organically to date. This year, we're really trying to up the ante there. We've announced a partnership recently. We have another one that we just signed that we'll announce at some point in time. We're also very actively engaged in the M&A market, and we're looking at several companies there, and we have, I guess, most importantly, we have their production capability and the management team with the capacity to really grow this firm, so we have plenty of room in our plant.
We have a management team that's very experienced, and we're ready to kind of take on more work and really try to double or triple the company over the next several years. Here are some of the growth drivers, so armament and weapon system replenishment. No matter what happens in Ukraine and some other areas, there's, I think, a recognition that we need to replenish a lot of our stockpiles, so we're starting to see movement there. There's also a lot of modernization of systems driven by some of the changes in the defense posture. We also are seeing now good tailwinds in the commercial airframe market, so there's a large backlog for Airbus and Boeing, and we're starting to see orders come in there and that revenue stream start to grow. We have been involved in the space market for a long time.
We actually saw some good expansion there last quarter and hope that continues, and then we have a pretty strong R&D and manufacturing process investment we've been making, and we think that'll lead to a lot more program capture in the future. The markets we serve are numerous. They're well over $1 billion of value there. We're a relatively small portion of it. So I don't think we have more than 5% of any market that we're in, but these are some of the end markets, the space and satcom, commercial aviation, defense electronics markets that we service, and those really are our main markets. I talked about the product portfolio a little bit. I think it's quite unique in terms of its breadth. I think we're the only, if I look at all our competitors, none of them do both filters and oscillators.
Most of them focus on just one type of oscillator or one type of filter or one or two families. We make a number of them, and we're very relevant because of that fact for our customers. And also, it plays very well with our sales reps. So we, like many companies in this space, use manufacturer reps. And so we're a very large portion of their line card that they take to their clients. And that helps us just have a really meaningful dialogue with our end clients. And that relationship that we build with them, engineer to engineer or sales rep to program manager, really helps us because we get a lot of referrals internally within these organizations from one program manager to another. The global footprint. So we produce product in Orlando and Yankton. We also have a manufacturing facility in New Delhi, India, and Noida.
It's relatively small compared to our U.S. plants, but very important to our operations, and it's also licensed for ITAR compliance, which is really key for us, and then we have a small sales office in Hong Kong. These are some of the customers we talked about earlier, so really some leading companies in the various sectors. In aerospace and defense, we cover all the top 10 U.S. primes. We also have a lot of European primes, as you can see here, so BAE, Thales, Leonardo is somewhere on this page, as well as, like, Cobham, I believe, so we are interacting with them both in the U.S. as well as overseas, and a lot of our current sales to them are U.S.-based, and we're really trying to grow our European and Asian sales as well, so I think that's something that'll help drive our growth in the future.
The next slide I'm going to skip for now, but it's just kind of an example of how we get deployed. There are a bunch of these slides in our investor deck. But the one point I wanted to make here was that a lot of these systems have become more complex over the past five to 10 years. So where in the past for a drone, we might have been just doing the communication package for it. Now we're involved in a missile guidance system and sensors. They'll have an EW system and radar. So we'll be deployed in a lot of different ways. In an aircraft, for example, we're deployed in like 17 or 18 different systems on the plane. So what that's really helped us do is build stronger relationships with our clients and grow our revenue stream.
These are some of the growth strategies to really leverage those customers and market-driven R&D. We're adding engineers, and you'll see that in our financials over the years. That's key to our revenue growth: innovating, building new products, but also having the engineering talent to be able to sit down and work through a problem with our clients and build a solution that meets their requirements. Then M&A is one of the main areas that we want to use our cash for. I think we're going to end the year with probably close to $19 million of cash. That's one of the main places where we can put good work. Here are some of our metrics. I'd encourage you to look at our Q3 results too.
This is kind of comparing us to the spinoff days, but the Q3 results and we'll talk through kind of some of the recent changes. Just in terms of new product development, it is a really large portion of our revenue. So in 2024, about 30% of our revenues, which was close to $50 million, came from new products. These are products developed over the past three or four years, and that's going to continue. We're making a lot of investments there and types of products we sell, and then just from a financial perspective, having a strong year. When I came into this year, we were really coaching people to kind of look towards 8%-10% growth. We've been a little ahead of that all year. I think we'll end up around 10% for the year.
The EBITDA margins have been impacted this year a little bit from tariffs. And that's something we're trying to improve, but it's a difficult process. We're doing a lot of new products in the plant, and that always has a little bit lower margin than older products or products have been under production. Our gross margin has been increasing throughout the year. Last year was a very, very high gross margin year, and that was just really due to some of the product mix, which we didn't get to enjoy this year. But I think we're getting back up to the 44, 45 range. And we have a very strong backlog. It's really increased quite a bit this year. And we made an announcement this morning that we had another $20 million order, or I think probably our first $20 million order. So I shouldn't say another large order.
And so our backlog is really improving quite a bit. I talked about M&A a little bit. We're just very disciplined there. I mean, a year ago, things were very expensive in the market. We're trying to find companies in kind of the eight to 12 times range for EBITDA. In every company we look at, it's very different. So there's not one kind of market clearing price. It's really based on, I guess, the potential of the company we're looking at and their performance. But we're trying to basically be very focused on buying companies that can be accretive. So they're producing a good stream of EBITDA that we think will make a very complementary addition to our portfolio or our business. And look to synergies as really a sweetener, not as a necessity to get the deal to make it work.
And then I think it's probably like one of the last slides, but just our long-term model. And this is kind of three to five years out. 10% revenue growth, we want to be able to do that really consistently, if not higher. Gross margins in the 43%-46% range. This is taking into consideration the current tariff environment, which we think will be with us for at least the next three years, if not longer. And then getting to a very consistent adjusted EBITDA margin of 20%-22% is our goal. I think we can go higher over time there, but that'll require just reaping a lot of the benefits we're making in the automation of the plant, things like that. Real quick note, we did have some warrants we issued in April. They were supposed to expire, I guess it was this week.
We just extended it essentially another week just to make sure that people can execute. There's some just administrative issues there. It's not an easy process, I understand. And then also, we just want to make sure that that announcement that came out today was factored into the market. People have time to understand that. So we want to make sure there's symmetry of information. And so anyway, that's it for the formal presentation. I'd be happy to open it up to questions.
Thank you very much. Yes. If you would like to participate in the Q&A, you can submit your question in the Q&A function at the bottom of your screen. You mentioned that $20 million contract you just announced today.
Can you just talk a little bit about who that's with and also how it compares to your other contracts that you've been winning over the past couple of years?
Sure. Thanks, Anja. Yeah, that's a big contract. And it's a long-term customer. It's our largest customer. We did a deal with them last year. I think we announced it in January, the beginning of the year. It was around $10 million. So what they've done this year is they've guaranteed manufacturing capability to production for two years instead of one. Most of the defense contractors will buy parts for the next year or solutions for the next year. And that's because they want to make sure they lock in our production capability. Because what we don't want to happen is have a gap in production where we have to reassign personnel. So they've guaranteed two years.
There is some increase in pricing and some increase in the unit volumes. And I think we'll see a little bit more on this particular contract coming in. But really, the main difference is we're getting a lot of stability out of having two years of guaranteed revenue from this firm for this product, this program.
Okay. Thank you. And also, when you mentioned you think you're going to end the year with $19 million in cash, did you say that?
Around $19 million, yeah.
Is that taking the warrants into consideration if they?
Yeah. No, it's not. Yeah. It's not. Yeah.
Okay. And we have some questions here from the audience. Are you benefiting from the commercial sat networks like starlink?
Yeah. That is not an area we play in, really, because we've actually talked to a number of those vendors.
The LEO companies tend not to value the reliability that our products offer, so they're not usually willing to pay for it, so I think they tend to rely on probably less expensive Asian parts that are more kind of commodity parts, so we're not benefiting in that market. We are very actively engaged in high Earth orbit satellites and space vehicles, so we do think it's a market that'll continue to grow for us, but we're not seeing a lot of work with those types of firms.
Okay, and another question here. Could you benefit from higher military spending by NATO?
Yes. Yeah, that's a great question, so there's two things happening in the defense market. One is I think we're seeing some very targeted increases in the defense budget. Last year, there was an addition, a little CR.
This year, I think they're going to increase the budget in certain areas. A lot of it has to do with missiles and shipbuilding, and the Defense Department or Department of War, they call themselves now, has been really specific about that, so we're going to see some benefit from that. There has been in the U.S., for example, some talk of doubling or tripling certain missile production capabilities. We'll see benefit from some of that. In Europe, we have a good manufacturer rep base, and I think in the past, they haven't seen a lot of defense spending from some countries where they are. That's definitely changing. It's understandable that a lot of European governments are going to want to buy from a European supplier, and we're actively engaged with them as suppliers. Many of them had their own internal RF component production capabilities in-house.
But what they're seeing is with this increase in volume, they're not going to be able to handle it all on their own. And so I do think that there's going to be an uptick there. We also sell a lot to those European vendors already, but we sell primarily in the U.S. to them. So a lot of the big ones have U.S. firms, but I don't know if the parts that they buy are going to systems in the U.S. or in Europe.
Okay. Thank you. And you also mentioned that your goal is to double or triple revenue over the next several years. What percentage of that would be organic versus acquisitions?
Yeah. So we have an internal goal to really double our revenue in the next three years. And that would be kind of continuing to grow at 10% to, I would say, 10% internally.
And then the additional part would be probably inorganic. We also have some partnerships that we think will provide some pretty good revenue streams as well. So we announced one in August for a tunable filter company. And we've already seen our first orders there. So that's starting to pick up.
Okay. Thank you. Another question about the warrants. How much would they raise if they were fully exercised? And how quickly can you put that to use with M&A?
Sure. If it's fully subscribed, it'll be about $27 million. It's a little bit less to us after just the fees and legal fees and things like that. So maybe $26.5 million. We can put it to use pretty well. I mean, so we're looking at the M&A market.
And if you're thinking about roughly 10 times EBITDA, buying $2 million or $3 million of EBITDA is really a $20 million chunk of change. So it's really potentially one good decent deal.
And how should investors think about the dilution that those warrants will create?
Yeah. So first of all, I mean, they were issued to current shareholders. So hopefully, if they exercised their percentage of the firm, ownership will stay roughly the same. We do, though, want to put the cash to work. We think we can get a much better return on it by buying a company or making some other significant change to the business than just leaving it in cash and getting the interest.
And you also mentioned M&A is going to seem to be a big part of your growth story then. What does the market look like?
Is it improving, or what are you seeing in the market?
Yeah. I think it's improving a little bit. A year ago, most people were very focused on some of these multiples they were seeing from some of the new primes, the Anduril and Palantir of the world. Of course, you know what? They don't realize that Palantir has been around for 25 years. So it took a while to get there. And they've had great growth rate, right? So not all companies are equal. But anyway, I do think that there's been a very rational approach, I think, I'm seeing right now in the market. So.
Okay. Great. We're actually out of time, and I don't see any more questions from the Q&A. So I want to thank you, Cameron and Linda, for joining us today, and everyone in the audience who tuned in.
I know you have a pretty full one-on-one schedule, but if any investors would like to follow up after this presentation, you can reach out to the company directly or to us at Sidoti, and we'll put you in touch with management. With that, I'll hand it over to you, Cameron, for some closing remarks.
Okay. Thank you very much, Anja. Appreciate everybody's interest. Please, yeah, follow up with Anja after the call or your Sidoti rep. Happy to engage. Thanks again. Bye-bye.
Thank you. Have a good rest of your day, everyone.