Revenue and Profitability Turnaround
Net sales increased 9.9% in the fiscal fourth quarter and 4.3% for the full year. The company swung to positive net income: $9.7M in the quarter (vs. a $0.7M loss a year ago) and $12.4M for the year (vs. a $19.5M loss a year ago). Operating income increased 29.4% for the quarter and 64.9% for the year.
Substantial Gross Margin Expansion (Reported and Adjusted)
Reported gross margin rose to 23.7% for the quarter (20.2% for the year). Excluding noncash (1.8%) and onetime items (0.3%), adjusted gross margin for the quarter was 25.8%, highlighting meaningful margin accretion from cost reductions and higher utilization.
Strong EBITDA, Low Leverage and Improved Balance Sheet
Trailing 12-month EBITDA was $76.4M (or $86.1M before noncash/one-time items). Net bank debt was $80M at 3/31/2026, producing a net bank debt/EBITDA ratio of 0.93, indicating low leverage.
Cash Generation and Liquidity
The company generated $19.2M of cash from operating activities for the fiscal year and approximately $103.8M of operating cash over the last 3 years. Total cash and availability was approximately $133.7M as of 3/31/2026.
Active Capital Allocation: Share Repurchases and Debt Reduction
Repurchased 956,000 shares for $11.4M at an average price of $11.88 during the year, while reducing net bank debt to $80M. $22.1M of share repurchase authorization remains.
Encouraging New Business and Clear FY27 Outlook
Management secured numerous new business commitments phasing in during FY27. Guidance calls for net sales growth of 7.5%–10.2% (implied $780M–$800M excluding certain items) and expects to add >$100M of additional annualized net sales by end of FY27 (not included in formal guidance). Management expects annualized net sales to exceed $900M by the end of FY27.
Product and Strategic Strengths
Momentum in brake-related business (large addressable market) and growth in diagnostic JBT-1 tester install base. Strategic initiatives include relocating heavy-duty operations to Mexico for cost efficiency, tariff mitigation, and exploring AI to neutralize working capital and strategic alternatives for the EV-emulated business.