Revenue Momentum in Second Half and Q4 Stability
Fourth quarter revenue of $37.5M, up $0.2M year-over-year; second half revenue grew nearly 4% versus the first half, supporting management's expectation for mid-single-digit growth in fiscal 2027.
Product Identification Orders and Sales Improvement
Product ID orders of $27.5M, up $2.9M year-over-year (≈+11.8%); second-half Product ID sales rose 4.2% versus the first half; Product ID book-to-bill was 104% and backlog increased sequentially by $1.1M as the new go-to-market strategy gained traction.
Aerospace Strength and ToughWriter Adoption
Aerospace orders of $13.6M with a book-to-bill of 122%; Aerospace year-end backlog of $12.0M and Aerospace backlog up 17.6% year-over-year; ToughWriter now represents over 80% of flight deck printer shipments, positioning the business to benefit from increasing aircraft utilization and build rates.
Order Growth and Backlog Visibility
Total orders in the quarter were $41.1M, up 6.5% year-over-year, reflecting demand improvement across Product ID (>12% order growth cited) and Aerospace project timing; year-end backlog of $25.5M provides visibility into FY2027 demand.
Improved Profitability Trends (Non-GAAP and Trailing Periods)
Adjusted EBITDA in Q4 grew 18% to $3.3M with adjusted EBITDA margin expanding 130 basis points to 8.8%; full-year adjusted EBITDA of $12.7M, up $0.4M, and second-half adjusted EBITDA grew 44% versus the first half with margin expansion of 270 basis points.
Gross Profit and Margin Recovery in Second Half
Q4 gross profit was $11.3M (GAAP) and non-GAAP gross profit $11.9M; second-half gross profit increased 8% and gross margin expanded 130 basis points versus the first half, indicating operational improvement after the mid-year reset.
Stronger Cash Generation and Capital Discipline
Cash provided by operations in Q4 was $3.7M (vs $2.5M prior year); full-year cash from operations of $11.7M (meaningful improvement over FY2025); capital expenditures tightly controlled at $0.3M for the year (vs $1.2M prior year).
Debt Reduction and Healthy Liquidity/Covenants
Debt reduced by $2.7M in Q4, bringing total debt to $37.6M (down from $46.7M at end of FY2025); ended year with $4.1M cash and total liquidity of $15.9M (including $11.8M revolver capacity); net debt leverage ratio 2.97 (well inside 4.5 covenant) and fixed-charge coverage 1.43 (above 1.05 requirement).
Near-Term Gross Profit Tailwind
A major royalty obligation is set to expire in Q3 FY2027, representing an approximate $2.0M annualized benefit to gross profit that will be fully realized beginning in Q4 FY2027.
Operational and Commercial Repositioning
Company executed a foundational reset: focused sales on three verticals (life science, industrial, chemical), applied data-driven go-to-market changes, added leadership talent, improved productivity in operations and service/repair, and achieved early benefits in stability and accountability.