Earnings call transcript: CPS Technologies Q3 2025 sees record revenue growth

CPS Technologies Corporation (CPSH) reported a significant turnaround in its Q3 2025 earnings, showcasing record revenue growth and a return to profitability. Despite the absence of specific earnings forecasts, the company's strong financial results were overshadowed by a notable decline in its stock price, which fell 8.88% to $4.39, with further losses in premarket trading. The market reaction followed the announcement of mixed forward guidance, including a projected EPS loss for FY2026. According to InvestingPro data, CPSH has demonstrated remarkable price performance, with a 202.76% total return over the past year, despite not being profitable over the last twelve months.

Key Takeaways

• CPS Technologies achieved record quarterly revenue of $8.8 million, more than doubling year-over-year.
• The company returned to profitability with a net income of $200,000, compared to a $1 million loss in Q3 2024.
• Stock price dropped 8.88% immediately after earnings release, with further declines in premarket trading.
• New manufacturing facility and expanded capacity are planned to meet growing demand.
• Guidance for FY2026 includes a projected EPS loss, impacting investor sentiment.

Company Performance

CPS Technologies reported strong overall performance in Q3 2025, driven by substantial revenue growth and a return to profitability. The company's revenue more than doubled year-over-year to $8.8 million, marking a 9% increase from the previous quarter. This growth was supported by robust demand in the power module and metal matrix composite markets. The company also improved its gross profit to $1.5 million, reversing a gross loss from the same period last year.

Financial Highlights

• Revenue: $8.8 million, up from $4.2 million year-over-year
• Net income: $200,000, compared to a net loss of $1 million in Q3 2024
• Gross profit: $1.5 million (17.1% of sales), reversing a gross loss of $0.5 million last year
• Operating profit: $276,000, compared to an operating loss of $1.5 million in Q3 2024

Market Reaction

Despite the impressive financial performance, CPS Technologies' stock experienced a significant decline, dropping 8.88% during regular trading hours, with further losses of 14.35% in premarket trading. This movement suggests investor concerns over the company's future profitability, particularly in light of the projected EPS loss for FY2026. The stock's recent performance contrasts with its 52-week high of $4.889, indicating a challenging market environment.

Outlook & Guidance

Looking ahead, CPS Technologies anticipates continued strength in fiscal 2026, fueled by a new $15.5 million power module contract. The company is also focused on expanding its manufacturing capacity with a new facility planned for 2026. However, guidance for FY2026 includes a projected EPS loss of $0.17, which has raised concerns among investors. The company remains optimistic about improving margins and capitalizing on opportunities in radiation shielding and Almax materials markets.

Executive Commentary

CEO Brian Mackey expressed confidence in the company's trajectory, stating, "The future has never looked better since my arrival here two years ago." He emphasized the company's readiness to "take CPS Technologies Corporation to the next level in terms of revenue." Mackey also highlighted the company's rapid progress, noting, "We've come a very long way in a short period of time."

Risks and Challenges

• Projected EPS loss for FY2026 may impact investor confidence and stock performance.
• Potential supply chain disruptions could affect manufacturing expansion plans.
• Increased competition in the specialized materials market may pressure margins.
• Dependence on federal contracts poses a risk if government funding priorities shift.

Q&A

Analysts inquired about the revenue recognition process for the new power module contract, which the company confirmed would proceed smoothly. Management also addressed concerns about potential impacts from a federal government shutdown, stating that existing contracts would face minimal disruption. Additionally, the company is exploring commercial opportunities for its Almax materials through targeted business development initiatives.

Full transcript - Cps Technologies (CPSH) Q3 2025:

Ali, Conference Operator: It is now my pleasure to turn the floor over to your host, Mr. Chuck Griffith. Sir, the floor is yours.

Unidentified Speaker, CPS Technologies Corporation: Thank you, Ali.

Chuck Griffith, CFO, CPS Technologies Corporation: Good morning, everyone. Today I'm joined by Brian Mackey, our President and CEO. We look forward to discussing our third quarter results with you. First, Chris Witty, our Investor Relations Advisor, will provide a brief safe harbor statement.

Unidentified Speaker, CPS Technologies Corporation: Chris?

Ali, Conference Operator: Thanks, Chuck.

Chuck Griffith, CFO, CPS Technologies Corporation: Good morning, everyone. Before we begin the business portion of today's call, I would like to point out that statements in this conference call that are not strictly historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Unidentified Speaker, CPS Technologies Corporation: This should be considered as subject to.

Chuck Griffith, CFO, CPS Technologies Corporation: The many uncertainties that exist in CPS Technologies Corporation's operations and environment. These uncertainties include, but are not limited to, the ongoing conflict in Ukraine, other geopolitical events, economic conditions, including the current government shutdown, market demands, and competitive factors. Such factors could cause actual results to differ materially from those in any forward-looking statements. Additional information can be found in our filings with the SEC. Now I'll turn the call over to Brian to offer his perspective on the quarter, after which Chuck will review the financial results in greater detail. Brian?

Brian Mackey, President and CEO, CPS Technologies Corporation: Thank you, Chris, and good morning, everyone. Our last few months at CPS Technologies Corporation have been very productive.

Unidentified Speaker, CPS Technologies Corporation: For the third consecutive quarter, we've delivered.

Brian Mackey, President and CEO, CPS Technologies Corporation: Record revenue for our company at $8.8 million.

Unidentified Speaker, CPS Technologies Corporation: million with greater shipping volumes in response to increased customer demand.

Brian Mackey, President and CEO, CPS Technologies Corporation: That growing demand continues, as indicated by the order we announced earlier this.

Unidentified Speaker, CPS Technologies Corporation: are at $15.5 million for our power module components. During the quarter, we announced our fifth.

Brian Mackey, President and CEO, CPS Technologies Corporation: Sixth federally funded research contracts of 2025. We are now executing three Phase II SBIR programs simultaneously. Additionally, as Chuck will review in a moment, we completed a successful secondary public offering that brought in over $9.5 million.

Unidentified Speaker, CPS Technologies Corporation: Net proceeds, including share purchases by members.

Brian Mackey, President and CEO, CPS Technologies Corporation: Of the management team, including both Chuck Griffith.

Unidentified Speaker, CPS Technologies Corporation: Myself, as well as several members of our Board of Directors.

Brian Mackey, President and CEO, CPS Technologies Corporation: Now I'd like to turn the call over to Chuck Griffith to provide further details about our financial results. After which I'll provide some additional perspective.

Unidentified Speaker, CPS Technologies Corporation: Thanks, Brian.

Chuck Griffith, CFO, CPS Technologies Corporation: The third quarter was one of many accomplishments which we're excited to share with you today. CPS Technologies Corporation reported total revenue of $8.8 million for the period, a new record compared with $4.2 million in the third quarter of fiscal 2024.

Unidentified Speaker, CPS Technologies Corporation: More than doubling year over year, this.

Chuck Griffith, CFO, CPS Technologies Corporation: Represents roughly 9% revenue growth compared to the second quarter of 2025, which was also a record. Most of the improvement was driven by continued strong demand and associated increased shipments as a result of increased capacity utilization and manufacturing throughput. Our overall acceleration in growth played a direct role in our decision to raise money in preparation for a move to a larger and more efficient manufacturing location. This will provide additional room to increase our production levels as demand dictates, which we see happening in the quarters and years to come. I'll speak to this more in a moment. We reported gross profit in the third quarter of $1.5 million, or approximately 17.1% of sales, compared with a gross loss of $0.5 million last year. As in other recent quarters, the increase year over year was due to higher revenue and improved manufacturing efficiencies.

Our margins continue to make modest improvements sequentially, and we remain focused on raising them further as we increase productivity and improve asset utilization. Selling, General and Administrative expenses totaled $1.2 million for the third quarter versus $1.0 million in the prior year. We continue to manage our costs even while ramping up production and investing for growth. SG&A has remained relatively consistent throughout this fiscal year. The company posted an operating profit of about $276,000 in the third quarter, compared with an operating loss of approximately $1.5 million last year, and we reported net income of just over $200,000, or $0.01 per share, versus a net loss of about $1 million, or $0.07 per share, in Q3 of fiscal 2024.

Turning to the balance sheet, we ended the quarter with $3.2 million of cash and $1.1 million in marketable securities versus $3.3 million in cash and $1.0 million in marketable securities at the beginning of 2025. Just after the end of the third quarter, we completed a public offering which, as stated earlier, raised over $9.5 million in net proceeds. While this capital will be broadly used for general corporate purposes, the key impetus for this raise was a planned move to a manufacturing facility nearby that will provide for long term growth and product expansion. An active search is underway to identify the best site to suit our needs. We anticipate the location having nearly double the usable floor space. We expect to complete the move during calendar year 2026.

The extra capacity should address CPS Technologies Corporation's manufacturing needs for the foreseeable future as we continue to scale the business. I'd also like to take a moment to publicly thank the folks at Rock Capital for providing the investment banking services. Their help, along with the efforts of the entire team, including our accountants, our attorneys, et cetera, were invaluable in helping us with this capital raise. Trade accounts receivable totaled $5.4 million as of September 27, 2025, versus $4.9 million as of December 28, 2024. Inventories rose to $5.4 million at the end of the third quarter, reflecting increased production and customer demand compared with $4.3 million at the start of the fiscal year. Turning to the liability side, payables and accruals totaled $4.8 million versus $4.0 million as of December 28, 2024. Now Brian will provide a more in-depth discussion of the period.

Unidentified Speaker, CPS Technologies Corporation: Thanks, Chuck. After three consecutive quarters of.

Brian Mackey, President and CEO, CPS Technologies Corporation: Record revenue and improving underlying in the.

Unidentified Speaker, CPS Technologies Corporation: Future and the work CPS to the.

Brian Mackey, President and CEO, CPS Technologies Corporation: Next level in its growth. Key among these is extending our manufacturing.

Unidentified Speaker, CPS Technologies Corporation: Capabilities to meet rising demand as well.

Brian Mackey, President and CEO, CPS Technologies Corporation: As the critical element of improving our operational efficiencies, as Chuck just mentioned, the clear need for additional space drove the decision to raise capital. In the months to come, we intend to move into a new, larger production center where we will be better prepared to meet the higher demand we expect in the months and years to come. This includes meeting the growing needs of.

Unidentified Speaker, CPS Technologies Corporation: Our current customer base, allowing floor space.

Brian Mackey, President and CEO, CPS Technologies Corporation: For new products that are being brought.

Unidentified Speaker, CPS Technologies Corporation: To market and expanding our product development.

Brian Mackey, President and CEO, CPS Technologies Corporation: Capabilities in response to increased federal funding.

Unidentified Speaker, CPS Technologies Corporation: As we continue to build out our product pipeline.

Brian Mackey, President and CEO, CPS Technologies Corporation: This is a very exciting time for CPS Technologies Corporation and we're in great shape to take advantage of the various opportunities that lie ahead.

Unidentified Speaker, CPS Technologies Corporation: That said, while Q4 will be strong.

Brian Mackey, President and CEO, CPS Technologies Corporation: It is unlikely due to holidays, planned plant shutdowns at some of our vendors.

Unidentified Speaker, CPS Technologies Corporation: Customers, et cetera, for our fourth quarter results to achieve another quarter of record revenue.

Brian Mackey, President and CEO, CPS Technologies Corporation: This is generally consistent with past years, just as 2025 is a standout.

Unidentified Speaker, CPS Technologies Corporation: Year in terms of performance, we anticipate fiscal 2026 to remain strong as well. We're also very pleased with the recently.

Brian Mackey, President and CEO, CPS Technologies Corporation: Announced new contract valued at approximately $15.5 million from a long-standing multinational semiconductor manufacturer. Under the terms of the agreement, CPS will deliver advanced power module components over.

Unidentified Speaker, CPS Technologies Corporation: A 12 month period which began October 1, 2025.

Brian Mackey, President and CEO, CPS Technologies Corporation: The order represents a 16.5% year over year.

Unidentified Speaker, CPS Technologies Corporation: Year increase in value reflecting expanding demand.

Brian Mackey, President and CEO, CPS Technologies Corporation: For CPS Technologies Corporation high performance application specific solutions, these components will be integrated into systems.

Unidentified Speaker, CPS Technologies Corporation: Supporting high speed rail as well as energy and grid infrastructure, supporting the dramatic growth in demand for electric from data.

Brian Mackey, President and CEO, CPS Technologies Corporation: Centers and other applications. This reflects continued strong momentum in our.

Unidentified Speaker, CPS Technologies Corporation: Aluminum silicon carbide product line.

Brian Mackey, President and CEO, CPS Technologies Corporation: At the same time, we continue to have great success in winning new research contracts from the federal government. This enables us to leverage our existing.

Unidentified Speaker, CPS Technologies Corporation: Intellectual property to address well-defined customer requirements with significant commercialization potential. For example, in the second half of.

Brian Mackey, President and CEO, CPS Technologies Corporation: September we announced our latest Phase II STTR contract.

Unidentified Speaker, CPS Technologies Corporation: With the U.S. Army.

Brian Mackey, President and CEO, CPS Technologies Corporation: This funded program provides CPS Technologies Corporation with $1.15 million over a 24-month period to continue the development of a 40 millimeter controlled fragmentation warhead for this application. A high-density material can produce smaller.

Unidentified Speaker, CPS Technologies Corporation: Fragments with higher kinetic energy, so typically.

Brian Mackey, President and CEO, CPS Technologies Corporation: Tungsten heavy alloy materials are ideal. However, traditional manufacturing and machining methods would be impractical due to high strength brittleness.

Unidentified Speaker, CPS Technologies Corporation: The hardness of these materials.

Brian Mackey, President and CEO, CPS Technologies Corporation: During Phase I, CPS Technologies Corporation successfully demonstrated results fabricating a tungsten heavy alloy warhead using our proprietary Quickset injection molding process. Initial tests delivered results consistent with the.

Unidentified Speaker, CPS Technologies Corporation: Technical requirements of the U.S. Army. These preliminary results will be expanded upon during Phase II to improve fragmentation, develop.

Brian Mackey, President and CEO, CPS Technologies Corporation: We standardize design guidelines and move fabrication.

Unidentified Speaker, CPS Technologies Corporation: From the bench to low-level production.

Brian Mackey, President and CEO, CPS Technologies Corporation: The near term goal is to fabricate a design that satisfies the Army's performance criteria for the Mark 1940 millimeter warhead. The New Mexico Institute of Mining and.

Unidentified Speaker, CPS Technologies Corporation: Technology Energetic Materials Research and Training Center, or EMRTC, will perform testing to evaluate performance and improve design parameters.

Brian Mackey, President and CEO, CPS Technologies Corporation: EMRTC is a premier research and testing facility specializing in the study of energetic materials and explosives. The intent of the Phase II program is to establish the foundation for a robust, low-cost, high-volume manufacturing process.

Unidentified Speaker, CPS Technologies Corporation: Using tungsten heavy alloys and subsequently explore volume manufacturing opportunities. Additionally, we also have the potential to explore other munition sizes, fabricating with other high density materials, and pursuing other applications that require a complex shape made from small area high density materials.

Brian Mackey, President and CEO, CPS Technologies Corporation: It's important to note this project leverages technology CPS Technologies Corporation has developed over several decades, namely our Quickset injection molding process, which we have used to produce literally millions.

Unidentified Speaker, CPS Technologies Corporation: Of commercial units including our Almax baseplates.

Brian Mackey, President and CEO, CPS Technologies Corporation: Dr. Mark Oceanero, whose expertise has been fundamental to the development and application of.

Unidentified Speaker, CPS Technologies Corporation: These techniques at CPS for over 40 years will continue to lead this STTR effort.

Brian Mackey, President and CEO, CPS Technologies Corporation: The novel application of these production methods provides significant new growth opportunities for CPS Technologies Corporation.

Unidentified Speaker, CPS Technologies Corporation: This path is very well aligned with our vision to solve our customers' toughest materials challenges through the targeted application of our unique intellectual property. Also in September, we announced a new.

Brian Mackey, President and CEO, CPS Technologies Corporation: Phase I SBIR contract from the Department of Energy. This new contract provides approximately $125,000 in.

Unidentified Speaker, CPS Technologies Corporation: Funding to from the Office of Nuclear Energy for a research effort that extends until April of next year.

Brian Mackey, President and CEO, CPS Technologies Corporation: Technologies Corporation is developing a high performance sustainable impact limiter using novel construction methods.

Unidentified Speaker, CPS Technologies Corporation: Materials to enhance the safety of transporting spent nuclear fuel and high level radioactive waste.

Brian Mackey, President and CEO, CPS Technologies Corporation: This work runs in parallel to the.

Unidentified Speaker, CPS Technologies Corporation: Ongoing Phase II research funding we have from the Department of Energy for modular radiation shielding. In total, we have now received one Phase II award and five Phase I awards in 2025 alone. It's great to see increasing interest in.

Brian Mackey, President and CEO, CPS Technologies Corporation: Our technology from an expanding array of.

Unidentified Speaker, CPS Technologies Corporation: Agencies and the various departments within them.

Brian Mackey, President and CEO, CPS Technologies Corporation: We continue to work on other SBIRs.

Unidentified Speaker, CPS Technologies Corporation: Already underway, including Phase I with the U.S. Navy to reduce weight of the.

Brian Mackey, President and CEO, CPS Technologies Corporation: Marine Corps Amphibious Combat Vehicle, a Phase II for the development of novel metal.

Unidentified Speaker, CPS Technologies Corporation: matrix composites for thermal energy storage too.

Brian Mackey, President and CEO, CPS Technologies Corporation: Address the requirements of NAVAIR's advanced Anti.

Unidentified Speaker, CPS Technologies Corporation: Radiation Guided Missile Extended Range Program, and a Department of Energy Phase II award for the development effort of modular radiation shielding for transportation and use of microreactors, as well.

Brian Mackey, President and CEO, CPS Technologies Corporation: As non-SBIR funding from the U.S.

Unidentified Speaker, CPS Technologies Corporation: Naval Air Command at China Lake.

Brian Mackey, President and CEO, CPS Technologies Corporation: Our technical team continues to advance these programs to meet the specifications of these various customers. As always, we continue to pursue additional.

Unidentified Speaker, CPS Technologies Corporation: SBIR contracts where we believe we can provide a unique technical solution that also.

Brian Mackey, President and CEO, CPS Technologies Corporation: Offers commercialization potential for the company. Regarding the ongoing federal government shutdown, we continue to monitor the impact of CPS Technologies Corporation.

Unidentified Speaker, CPS Technologies Corporation: Which to date has been rather muted.

Brian Mackey, President and CEO, CPS Technologies Corporation: For federally funded research projects that are.

Unidentified Speaker, CPS Technologies Corporation: Already under contract, our development work continues.

Brian Mackey, President and CEO, CPS Technologies Corporation: In some cases, the federal personnel we interact with or the contractors that support.

Unidentified Speaker, CPS Technologies Corporation: They are currently unavailable. However, thus far this has not had a significant impact on our work.

Brian Mackey, President and CEO, CPS Technologies Corporation: It has not interfered with our ability.

Unidentified Speaker, CPS Technologies Corporation: To be paid when we submit invoices under active contracts.

Brian Mackey, President and CEO, CPS Technologies Corporation: If there is ultimately a more meaningful negative impact to CPS Technologies Corporation from the shutdown.

Unidentified Speaker, CPS Technologies Corporation: It could be related to slow activity on new proposals where CPS Technologies Corporation has already submitted and which are now under review, or new research topics that the government was planning to publish in the near future.

Brian Mackey, President and CEO, CPS Technologies Corporation: There may or may not be some.

Unidentified Speaker, CPS Technologies Corporation: Delays in these areas depend on the length of the shutdown.

Brian Mackey, President and CEO, CPS Technologies Corporation: The impact is difficult to quantify.

Unidentified Speaker, CPS Technologies Corporation: Overall, it has thus far not had.

Brian Mackey, President and CEO, CPS Technologies Corporation: A significant impact on us. Our manufacturing capacity has increased significantly over.

Unidentified Speaker, CPS Technologies Corporation: The last several quarters in response to growing demand, we continue to land new development contracts as we innovate solutions to real world problems. At the same time, as Chuck mentioned, we are committed to improving gross margins.

Brian Mackey, President and CEO, CPS Technologies Corporation: We're endeavoring to increase both operating efficiencies and overall bottom line results.

Unidentified Speaker, CPS Technologies Corporation: Output, and we believe that with our new $15.5 million power module contract, margins will continue to improve in the quarters to come.

Brian Mackey, President and CEO, CPS Technologies Corporation: The outlook for the coming year has.

Unidentified Speaker, CPS Technologies Corporation: Never been stronger, and we look forward to leveraging our new manufacturing operations after.

Brian Mackey, President and CEO, CPS Technologies Corporation: A new site for our company is identified. As always, we remain optimistic regarding future.

Unidentified Speaker, CPS Technologies Corporation: Armor orders, the near term outlook.

Brian Mackey, President and CEO, CPS Technologies Corporation: Remains uncertain due to the government shutdown. Generally, we believe current military spending trends.

Unidentified Speaker, CPS Technologies Corporation: Are working in our favor. We will continue to work with Kinetic Protection, our partner in this area, regarding naval vessel procurement decisions or other applications across the defense spectrum, particularly once the federal government is back to work. Additionally, the company is accelerating its efforts.

Brian Mackey, President and CEO, CPS Technologies Corporation: To bring new and proprietary products to.

Unidentified Speaker, CPS Technologies Corporation: Market, such as our radiation shielding solution and our Almax materials. In fact, during the quarter, we fulfilled our first commercial order for Almax. We have also recently expanded our technical team.

Brian Mackey, President and CEO, CPS Technologies Corporation: Specifically, we added a manufacturing engineer too.

Unidentified Speaker, CPS Technologies Corporation: Our production staff and another PhD to our R&D team.

Brian Mackey, President and CEO, CPS Technologies Corporation: Although these new hires have a negative effect on our margins in the short term.

Unidentified Speaker, CPS Technologies Corporation: Term, we see the additions of these key personnel as investments in the continued growth of CPS Technologies Corporation. In summary, I believe the future has.

Brian Mackey, President and CEO, CPS Technologies Corporation: Never looked better since my arrival here two years ago, given ongoing strong demand, including our new.

Unidentified Speaker, CPS Technologies Corporation: $15.5 million contract, an expanding array of research contracts, a growing portfolio of technical solutions that address customer requirements, and an upgraded production facility on the horizon, as well as a vastly improved balance sheet, which will provide the critical resources necessary to improve our performance and expand our capabilities.

Brian Mackey, President and CEO, CPS Technologies Corporation: We are ready to take CPS Technologies Corporation to the next level in terms of revenue.

Unidentified Speaker, CPS Technologies Corporation: Overall performance and return for our investors. We've come a very long way in a short period of time, and compared to 2024, the company has transformed into a larger, faster-growing, more relevant organization with unique capabilities for both industry and government.

Brian Mackey, President and CEO, CPS Technologies Corporation: The future is very bright and I'm.

Unidentified Speaker, CPS Technologies Corporation: Incredibly proud of everything her team has accomplished this year. We can now open the call up for investors.

Brian Mackey, President and CEO, CPS Technologies Corporation: Ali, I'll pass it back to you.

Ali, Conference Operator: Thank you, sir. Ladies and gentlemen, the floor is open for your questions. If you have any questions or comments, please press Star One on your phone at this time. We do ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Once again, that's Star One. If you have any questions or comments, please hold while we poll for questions. Thank you. Our first question is coming from Chip Moore with Ross. Your line is live.

Hi, good morning. Hey, Brian and Chuck.

Hi.

Unidentified Speaker, CPS Technologies Corporation: Hey.

I wanted to ask, congratulations on that nice new order with your long-standing customer. Maybe you can expand a bit on what you're seeing from potential other players in the power module space, large and small.

Brian Mackey, President and CEO, CPS Technologies Corporation: Yeah, I think as we've looked at.

Unidentified Speaker, CPS Technologies Corporation: Our revenue growth throughout the current year.

Brian Mackey, President and CEO, CPS Technologies Corporation: We look at various different customers in both metal matrix composites that you referred to and hermetic packaging, and what we've generally seen is growth across the board.

Unidentified Speaker, CPS Technologies Corporation: The large customers are ordering more.

Brian Mackey, President and CEO, CPS Technologies Corporation: Indicated in that recent contract, medium customers, smaller customers, the demand has picked up. For existing customers, they're ordering more. Additionally, we've added some new customers to the portfolio, but there's not any singular element that has driven that growth either in the past bringing us to today, or what we're hearing in discussions with these customers going forward.

Unidentified Speaker, CPS Technologies Corporation: It's quite broad.

Maybe to follow up, Brian, as you think about adding capacity and space, can you give us a little more insight on how you plan that move? Do you build inventories for key customers? How will you manage that and deal with the transition when it comes to?

Brian Mackey, President and CEO, CPS Technologies Corporation: Right, yeah, it's all the above. Obviously, a move is fundamentally disruptive. What we're developing now are detailed plans to execute a staged move while having things in place that mitigate that, such as inventory is built up here. Inventory is built up downstream of CPS Technologies Corporation to soften the blow, so to speak.

Unidentified Speaker, CPS Technologies Corporation: What we intend to do is.

Brian Mackey, President and CEO, CPS Technologies Corporation: Outfit the new facility for our needs. We have hydrogen lines, oxygen lines, et cetera. Once we're ready to affect the move, it would essentially be a work cell at a time. It would be sort of a.

Unidentified Speaker, CPS Technologies Corporation: Leapfrog situation where temporarily we'd be occupying.

Brian Mackey, President and CEO, CPS Technologies Corporation: Two buildings, but we will be sequentially moving more and more of the company to the new facility until we complete that process. All that would occur during calendar year 2026.

Chuck Griffith, CFO, CPS Technologies Corporation: Got it.

Very helpful. Maybe just for me, you know, maybe call it the shots on goal, a lot of interesting opportunities, any that you're more excited about. Then on radiation shielding in particular, you know, the Army just came out with the Janus program. I'm sure you saw. Any thoughts on potential there?

Unidentified Speaker, CPS Technologies Corporation: Thanks.

Brian Mackey, President and CEO, CPS Technologies Corporation: Yeah, starting with the radiation shielding, we definitely see opportunities there.

Unidentified Speaker, CPS Technologies Corporation: We know that we have a solution.

Brian Mackey, President and CEO, CPS Technologies Corporation: That's of interest to users and customers.

Unidentified Speaker, CPS Technologies Corporation: That are in the nuclear, those discussions are continuing.

Brian Mackey, President and CEO, CPS Technologies Corporation: There are adoption discussions and testing conversations that are naturally part of that process, as you can imagine. That's an area of great interest for us, as well as some of these other things. I mean, the Almax material has broad applications because of its material properties. We have interesting discussions going on there, and the one I highlighted a few minutes ago regarding the controlled fragmentation warhead.

Unidentified Speaker, CPS Technologies Corporation: That's early in Phase II.

Brian Mackey, President and CEO, CPS Technologies Corporation: We're just a baby a month or so into the Phase II two-year program, but we know that was funded because the U.S. Army is excited about what they saw.

Unidentified Speaker, CPS Technologies Corporation: They have a real need for that product, but it's simply impractical to machine it, which would be really the only alternative way to get that outcome.

Brian Mackey, President and CEO, CPS Technologies Corporation: We're excited to see where that goes.

Unidentified Speaker, CPS Technologies Corporation: Goes as we continue to push that forward and more specifically meet the exact.

Brian Mackey, President and CEO, CPS Technologies Corporation: Requirements that they've outlined that could have significant potential over time for us as well.

Chuck Griffith, CFO, CPS Technologies Corporation: Great.

I'll hop back in queue. Thanks very much.

Unidentified Speaker, CPS Technologies Corporation: Sure.

Ali, Conference Operator: Thank you. Just as a reminder, ladies and gentlemen, if you do have any questions, please press star 1 on your telephone keypad. Our next question is coming from JP Gigan with Global Value Investment Corp. Your line is live.

Good morning, gentlemen, and congratulations on a solid quarter and the recent contracts announcement. Can you help me understand how revenue under this recently announced contract will be recognized? Whether that will be fairly level over the contract term or if some of the volumes will be backloaded to be fulfilled once you move to your larger facility?

Chuck Griffith, CFO, CPS Technologies Corporation: It should be relatively stable throughout the period of the contract. I think that as Brian mentioned earlier, during the actual move, we'll have tried to build up inventories beforehand so that the customer will not see impact from the move. Typically with this particular customer, the product gets sent to an outside plater where it's plated and then shipped to the customer as they need the product. We'll be building up inventory both here in the U.S. as well as with the plater, so that the customer won't see any interruptions. Shouldn't see any interruptions for that period. As I said, it should be relatively stable, equal throughout the year.

Brian Mackey, President and CEO, CPS Technologies Corporation: Yeah, I think there's sort of the two elements of it.

Unidentified Speaker, CPS Technologies Corporation: It's a level loaded requirement by the customer, generally speaking, but also the necessity for the move is for us to.

Brian Mackey, President and CEO, CPS Technologies Corporation: Be able to add floor space, add production capacity.

Unidentified Speaker, CPS Technologies Corporation: When that comes online, our weekly quantities will accelerate.

Brian Mackey, President and CEO, CPS Technologies Corporation: It is sort of a bit of both.

Got it. All right, thanks. That's helpful in understanding that contract and the ALSIC business in general. Secondly, how has the federal government shutdown affected you either with advancing through the SBIR process, procurement, collection receivables? Any color you can provide around that would be helpful.

On the billing side, just earlier this week we submitted an invoice.

Unidentified Speaker, CPS Technologies Corporation: Through the Government process, two invoices, and we promptly received payment.

Brian Mackey, President and CEO, CPS Technologies Corporation: We're set up as an active contract. We received payment, so you know, that.

Unidentified Speaker, CPS Technologies Corporation: Was nice to see.

Brian Mackey, President and CEO, CPS Technologies Corporation: On the funded contracts that are underway.

Unidentified Speaker, CPS Technologies Corporation: There's really minimal disruption because essentially our technical team has been handed the program.

Brian Mackey, President and CEO, CPS Technologies Corporation: They are now executing on the research work. On occasion, they might typically have a.

Unidentified Speaker, CPS Technologies Corporation: Conversation with the funding agency, you know.

Brian Mackey, President and CEO, CPS Technologies Corporation: Touch base every month or two, something like that. What we've seen is maybe instead of.

Unidentified Speaker, CPS Technologies Corporation: Four or five people on that call, there might be two.

Brian Mackey, President and CEO, CPS Technologies Corporation: We can still generally get a.

Unidentified Speaker, CPS Technologies Corporation: If there's some sort of clarification of path forward, you know, there's someone there. That's really not that critical to us because we proposed a research plan.

Brian Mackey, President and CEO, CPS Technologies Corporation: Which got approved and funded, and we're executing on it.

Unidentified Speaker, CPS Technologies Corporation: Largely the ball is in our court, and it's probably more of a risk related to whether the government's going.

Brian Mackey, President and CEO, CPS Technologies Corporation: To publish new topics on time a month from now or two months from now.

Unidentified Speaker, CPS Technologies Corporation: That's less clear to us.

Got it.

Chuck Griffith, CFO, CPS Technologies Corporation: Okay, thanks.

You touched on it a little bit in responding to Chip's question, but I wanted to talk about Almax a little bit more. It seems to me that that's an exceptionally large commercial opportunity that's recently validated.

Unidentified Speaker, CPS Technologies Corporation: By.

Either execution or delivery of your first order of that product in this quarter. Can you provide any sort of color or additional commentary around the additional commercial opportunity there and how we might expect this to develop over the next few years?

Yeah, I think, first of all, interacting.

Brian Mackey, President and CEO, CPS Technologies Corporation: With people who are interested in that material. In some of those industries, they don't.

Unidentified Speaker, CPS Technologies Corporation: Know the name CPS Technologies Corporation.

Brian Mackey, President and CEO, CPS Technologies Corporation: Some of them do. It's a matter of getting in front of the right decision makers.

Unidentified Speaker, CPS Technologies Corporation: Design engineers, etc.

Brian Mackey, President and CEO, CPS Technologies Corporation: They'll have their own adoption process.

Unidentified Speaker, CPS Technologies Corporation: They'll want samples, which is what we're.

Brian Mackey, President and CEO, CPS Technologies Corporation: Sending out now to people. They want to validate the material performance.

Unidentified Speaker, CPS Technologies Corporation: Requirements, consider how they can adopt this into whether it's something they have ongoing or something new they're developing.

Brian Mackey, President and CEO, CPS Technologies Corporation: We anticipate a sort of stepwise, you know, volume opportunity.

Unidentified Speaker, CPS Technologies Corporation: No one's going to come in on.

Brian Mackey, President and CEO, CPS Technologies Corporation: Day one, you know, in order.

Unidentified Speaker, CPS Technologies Corporation: A great many pieces, they're going to.

Brian Mackey, President and CEO, CPS Technologies Corporation: Do small, medium, and then large. Those are the conversations that we're taking on.

Unidentified Speaker, CPS Technologies Corporation: That's why we're, you know, got a focused business development effort underway to add to our team. We have a position posted that we're actively recruiting for to help pursue these new opportunities because it takes a lot of legwork. That will play out.

Brian Mackey, President and CEO, CPS Technologies Corporation: We do believe that material has.

Unidentified Speaker, CPS Technologies Corporation: A lot of applications and many of them are places we haven't historically been. We're identifying trade shows, industries, applications, updating our website, et cetera, to address those more directly. Great.

Congratulations again on a great quarter, and thanks for taking my questions. We'll look forward to talking to you again soon.

Thanks, Jeffrey.

Ali, Conference Operator: Thank you once again. If there will be any final questions or comments, please press star 1 on your telephone keypad at this time. Okay, ladies and gentlemen, as we have no further questions in the queue at this time, I'd like to hand the call back over to Mr. Mackey for any closing remarks.

Unidentified Speaker, CPS Technologies Corporation: Great. Thanks, Ali. Thanks, everyone, for joining us today.

Brian Mackey, President and CEO, CPS Technologies Corporation: Your ongoing interest in CPS Technologies Corporation.

Unidentified Speaker, CPS Technologies Corporation: We look forward to speaking with you again after the end of our fourth quarter.

Brian Mackey, President and CEO, CPS Technologies Corporation: If you have any questions.

Unidentified Speaker, CPS Technologies Corporation: interim, please reach out to our investor relations advisor. Thank you.

Ali, Conference Operator: Thank you. Ladies and gentlemen, this does conclude today's call. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation.

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