Good day and welcome to the Optex Systems Holdings Inc. 3Q Earnings Call. At this time, all participants have been placed on a listen-only mode. The floor will be open for your questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, Danny Schoening, Chairman and CEO at Optex Systems. Danny, the floor is yours. Thank you, Paul. Hello, my name is Danny Schoening, and I'm the Chairman and CEO of Optex Systems. I'd like to begin by introducing Karen Hawkins, our CFO, who will walk you through the financials, and then I'll come back to talk a little bit more about the business. Karen? Thank you, Danny. Hi, this is Karen Hawkins, and before we begin, I would first like to briefly discuss the use of forward-looking statements during this call. Statements made during today's call and our responses during Q&A may include forward-looking statements, and these forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from the statements made. Factors that could cause actual results to differ are described in our annual filings with the SEC, including the risk factors section of our annual report on Form 10-K filed with the SEC. Now that the legalese is out of the way, we'll move on to discuss the financial information. On our balance sheet, we ended June 29, 2025, with a strong cash balance of $4.9 million, up from $1.0 million as of the year ended September 29, 2024. Our accounts receivable increased $0.4 million to $4.1 million from $3.8 million as of September year-end on higher revenue. Accounts payable increased $0.6 million to $1.8 million from $1.2 million as of September year-end on material purchases in support of increased revenue. Our accrued loss reserves for contracts increased $0.4 million in June from $0.3 million as of September year-end, primarily due to additional orders against our legacy IDIQ multi-year contracts combined with the higher direct labor hours than anticipated in our original estimate. We expect these programs to wind down within the next fiscal year. During the nine months, we paid $1 million against the line of credit, bringing the balance to zero from the September year-end $1.0 million balance. The $3 million line of credit was renewed on May 21, 2025, for an additional 24 months through May 2026. Our total working capital was $19.4 million as compared to September year-end balance of $15.1 million with the increased cash. For the cash flow, our operating cash flow for the nine months was $5.4 million compared to $1.0 million in the prior year nine months, driven primarily by higher net income and other changes in working capital. During the nine months, our capital spending was $0.5 million compared to $1.5 million in the prior year period, which included the $1 million for the acquisition of the SpeedTracker product line. For the nine months, we paid $1 million in taxes comparable with the prior year period. On stockholders' equity, our ending outstanding share balance was 6,912,919 shares as of June 29, 2025, as compared to 6,896,738 as of March 30, 2025, and 6,873,938 as of September 29, 2024. During the three months, we issued 16,181 shares to employees, net of the taxes withheld, for 23,000 shares of vested restricted stock units against our stock compensation plan. During the nine months, we issued 38,981 shares, which included an additional 22,800 restricted shares issued to three independent board members vesting on January 1, 2026. Moving to the statement of operations, for the three months ended June 29, 2025, our total revenue increased by $2.1 million or 22.6% compared to the prior year period. For the nine months ended June 29, 2025, our total revenue increased by $5.5 million or 22.3% compared to the prior year period. The increase in revenue was primarily driven by higher periscope production levels at the Optex Richardson segment, combined with increased customer demand across both the Optex Richardson and the Applied Optics operating segment. Revenue for the Optex Richardson segment increased 46.3% and 34.3% for the three and nine months as compared to the prior year periods. Revenue for the Applied Optics Center decreased 2.6% for the three months and increased 10.3% for the nine-month period as compared to the prior year. During the nine months, our periscope revenue levels at the Optex Richardson segment had increased 76% or $6 million, and the Applied Optics Center segment had seen a 32% increase or $2.3 million in military laser filter demand over the corresponding period in the fiscal year 2024. These increases are somewhat offset by lower demand for other military products at Optex Richardson and commercial optical assemblies at the Applied Optics Center segments. For gross profits, consolidated gross profit for the three months ended June 29, 2025, increased by $0.3 million or 10% to $3.2 million compared to the prior year period of $2.9 million. Consolidated gross profit for the nine months ended June 29, 2025, increased $1.5 million or 21.6% to $8.7 million compared to the prior year period of $7.1 million. The increase in the most recent three and nine-month period gross profit was primarily attributable to increased revenue and changes in product mix. Our nine-month gross margin was 28% as compared to 29% in the prior year period with shifts between segments and product lines. We've held our general administrative spending consistent with the prior year at $1.3 million for the three months and $3.6 million for the nine-month periods. Our operating income for the three months ended June 29, 2025, increased by $0.3 million or 18.3% to $1.9 million compared to the prior year period of $1.6 million. Our operating income for the nine months ended June 29, 2025, increased by $1.5 million or 43.8% to $5.1 million compared to the prior year period of $3.5 million. The increase in operating income was primarily driven by higher revenue and gross profit with no increase in general administrative costs. Net income and EBITDA. Our net income increased by $0.2 million to $1.5 million for the three months ended June 29, 2025, as compared to the net income of $1.3 million for the prior year period. Our adjusted EBITDA increased by $0.3 million to $2.1 million for the three months ended June 29, 2025, as compared to adjusted EBITDA of $1.8 million for the prior year period. Our net income increased by $1.3 million to $4.1 million for the nine months ended June 29, 2025, compared to a net income of $2.8 million for the prior year period. Our Adjusted EBITDA increased by $1.5 million to $5.7 million for the nine months ended June 29, 2025, as compared to Adjusted EBITDA of $4.2 million for the prior year period. The increase in net income and Adjusted EBITDA for the most recent three and nine-month periods compared to the prior year periods is primarily driven by the increased revenue and gross profit. We currently do not anticipate any material adverse effects on our business from the recent tariff uncertainties or China's export restrictions on rare earth metals. Our defense products are primarily sourced domestically, but those which are imported are generally not subject to tariffs or duties. We produce some commercial optical assemblies with selective components sourced from Taiwan. However, our current customer backlog is covered with existing material and inventory. We anticipate any future orders for these commercial products will be subject to revised pricing inclusive of any potential tariff impact. On the backlog, the backlog as of June 29, 2025, was $38.3 million compared to a backlog of $45.6 million as of June 30, 2024, representing a decrease of $7.3 million or 16% from the prior year June period. We believe this decrease in backlog is primarily due to the timing of awards rather than any new trend. Subsequent to the period ended June 29, 2025, the company announced several new awards, including a $2.8 million order for the XM30 program, a $10.2 million five-year requirement type contract award for optical sighting systems, and a $1.6 million order for laser filters, bringing our total backlog to $45 million as of August 5, 2025. I would also like to highlight the subsequent events occurring after the June 29, 2025 period, which include changes to the company's bylaws to create a new Chief Executive Officer and President, allowing for the positions to be held by different individuals. In addition, effective on August 11th, Chad George has assumed the position of President, reporting to Danny Schoening, where he will continue to serve as Chief Executive Officer. In connection with his appointment to President, the company entered into an employment agreement with Mr. George through July 1, 2028. Mr. George was granted 10,000 shares of restricted stock as a part of his employment package, which will vest on January 1, 2026. Last, the Board of Directors approved amendments to the charters of Nominating and Corporate Governance Committees, Audit C ommittees, and Compensation Committees. These events and corresponding documents have been filed on 8-Ks, and the updated committee charters have been published to our company website located at www.optexsys.com. That concludes the financial portion of this call. I will now turn the call over to Danny Schoening for his comments on the period's performance. Thank you for all those numbers, Karen. This is our second earnings call. I'd like to do a quick review of the products and services we provide for both divisions, which Karen just highlighted. So the Applied Optics Center, or AOC's core technologies, thin-film coatings. We apply these coatings to either absorb or reflect certain wavelengths of light. Common use of this technology would be to protect soldiers' eyes, image-intensifier tubes used in night vision goggles, and also used to protect sensitive sensors from these same laser sources. AOC supplies these both externally to customers like Elbit and L3Harris, or they supply them internally to our Richardson Division. Recapping the products from our Optex Division, Optex uses these same filters and builds them into laser-protected periscopes and other sighting systems. And if you'd like to learn more about their products or their customers, I suggest you go back and listen to our Q2 Earnings Call where I go into more depth on both divisions. I'd like to spend a little bit more time adding color to several of our recent press releases. In July, we announced a contract win in support of the XM30 vehicle. The significance of this win is that it supports the fundamentals of our growth strategy. Our revenues and earnings grow as we continue to get designed in on new vehicles while continuing to support the ongoing maintenance and upgrades of previous platforms. For a more comprehensive list of these vehicles that we support, I again would refer you to our website, and specifically, we lay out the number of vehicles fielded in the investor presentation. This is a great win for Optex and highlights our core competencies around complex optical and mechanical systems used in these mission-critical applications. Also, in July, we announced a $10.2 million contract. This was for the muzzle reference sensor that sits out on the end of the barrel on the Abrams tank, which allows the gunner to stay on target after multiple shots. When announced, it was similar to an IDIQ but identified as a requirement type contract, but it was unfunded at the time of the award. We sometimes struggle as to when to announce these types of contracts, debating on whether to announce them at award or announce them after the first period orders have been funded and awarded. But given the unfunded award is visible through the government's website, we choose to announce awards as this information is technically already available out in the public domain. We apologize if there's any confusion from this, but mainly because of the award, the backlog doesn't immediately increase by this amount, but that's the nature of the business. This leads me into another announcement that we posted in early August of a $1.6 million award from General Dynamics Land Systems-Canada in support of their armored vehicles. You'll notice that after backlog increased from $39.2 million up to $45 million after this award. And this was due to the fact that in between those two awards, the U.S. government funded the first year order of the MRS units from the $10.2 million press release for $4.2 million. So to summarize, we announce these awards one time, and we report the up-to amount called out on the award and the expected delivery period for the award. We do not announce the individual period awards for these contracts because we think this would cause further confusion around multiple announcements on the same contract. Finally, as you saw from yesterday's announcement, I'd like to welcome Chad George as our new President to the organization. This is only Chad's second day with us, but he's here listening in with Karen and me, and he will play a stronger role in our 10-K earnings call in December. So welcome, Chad. Thank you, Danny. So with that, I would like to answer one question that was sent in early, and then hopefully we'll have additional questions that are called in. So the first question comes from Chris Chang. Congratulations, Chad, on your recent appointment. Can you share your response, your perspective on the growth opportunities under the proposed defense budget and specifically how Optex Systems will address specific needs on the ambitious Golden Dome Initiative? Optex's specialized precision optical systems seem uniquely suited to this development of advanced missile defense capabilities. Does your outlook factor in significant investments for R&D in these areas? And if so, can you provide a dollar range or timings of the investment? We look forward to hearing more from you. I am very familiar with the Golden Dome and the advanced missile defense capabilities. However, at this point in time, I'm not sure if our capabilities align well with this initiative. However, we recognize it as a growth vector for our business, and we will continue to investigate our capabilities and how we support this initiative going forward. Very good. Thank you. Paul, I guess I would turn it back to you. Is there any questions that came in? Certainly. Thank you. At this time, we'll be conducting a question-and-answer session. If you have any questions or comments, please press Star 1 on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Again, that's Star 1 on your phone at this time if you wish to ask a question. And please hold while we poll for questions. And once again, that will be Star 1 on your phone at this time if you wish to ask a question. And we did have a question coming from Richard Westcott, who is a private investor. Richard, your line is live. Hi. I'm just curious if anything was going on with the tracker, the tracker system you guys had started about a year ago. Yes. Yeah. The SpeedTracker? Yes. The SpeedTracker. Yeah. Very good. Yeah. So this was a little bit of an investment from the standpoint of not only a product line but technology. So we sometimes think about having both support from the military perspective and also commercial applications. And we saw that this aligned fairly well with our support for Nightforce Optics in the rifle scope space. So that's why we made the investment. We have been in the process of transferring that product line from the Czech Republic to Texas, where we're now building the products. There was some confusion along the lines of in between when we started transferring along the tariffs and import and export side of that. But we're just getting to the point where we're launching that release now. So sometime in the next 30 days, you'll see them advertised on Amazon. So we set up the same distribution channel that was created before. So we wanted things to move a little bit quicker along that path than what they were, but we still think it's a nice investment. We still think from the standpoint of commercial applications that could easily be used in military units. So if you think about what the unit provides to a shooter and how that could be used to increase the accuracy of military weapons, they all play well together. So that's really the secondary play. So there you go. Oh, thank you. Sounds good. You're welcome. Thank you. And once again, it will be Star 1 if you do wish to ask a question today. We have another question coming from Lawrence Bogart, who's a private investor. Lawrence, your line is live. Hi. I'm calling to get the current cash on hand that you have and any insight as to whether you're going to be doing dividends, potential stock buybacks, or are you looking for acquisitions out there? You guys are loading up on cash, so some insight would be great. Cash number? $6 million as of yesterday. There you go. $6 million as of yesterday. So yeah, we've discussed this at the board level. So I think all companies have several things they can do with cash. One, we can pay down debt. We don't have any debt. We can continue to invest in the organization through salaries and new hires and new equipment, new capabilities, which we've done. We also can do dividends. We've done that in the past. Stock buyback is an option. We've also done that in the past. And we've also made some acquisitions, not a lot, but we have made some acquisitions. So in general, I think the answer is that we've shown that we're capable of doing all of those things that companies can do with cash. So lots of times when I have one-on-one conversations with investors, I get a little bit of a mix of their opinions and what they recommend. But I would say most of the investors recommend that we continue to hold the cash and use it for opportunistic acquisitions as they arise. So again, acquisitions are extremely tough. If you've ever been through them before, they are a lot of work. And so we look at acquisitions from a standpoint of if it's synergistic with what we're doing. Does it match with our core competencies? Is it a backwards integration play like the Applied Optics Center was? Or is it a parallel product line, which may help us? We have approached our customers like GDE and BAE and these guys and said, "Hey, if you run into any other companies that you think might be either interested in selling or divesting product lines which match up to the same product platforms that we support for them, let us know." So we're open to that. But I'll say we're somewhat conservative on the acquisition side. We're not going to run right out and pay 12 to 15 times EBITDA to acquire something shiny. We're more conservative, and if it makes sense and it aligns with what we're already doing, we're certainly open to use cash in that direction. And I should say we also have a very good working relationship with Texas Capital Bank. We've already discussed a couple of potential acquisitions with them, and we kind of set up our own boundaries of how much and what percentage they would loan in case it exceeds the amount of cash we'd have on hand at the time. So in general, I think we've done everything that you can do with cash in the past. But right now, I'll say from a cash policy, we haven't made any decisions that if we hit some level that we'd do something like a special dividend or something like that. We haven't made that call yet, but we do recognize that we are building up the cash. The cash is earning some interest for us now. But right now, I'd say I added a lot of words there, but I didn't tell you what we're going to do because there is no specific plan for it yet. And do you see any particular catalysts that could help us get into maybe the $50 million backlog range? Because we've been kind of stuck in a little channel here between the $35-$45 million mark for the last year or so. And a lot of investors kind of use that number as a gauge. And that was great that you guys further explained how it worked earlier because I, too, was a little bit confused when I wouldn't see the backlog go up by the amount of the contracts. So I appreciate that insight also earlier. Yeah. We've struggled with that when we announce and how much do you announce. So we try to put everything in the, obviously, the Ks and Qs and as much information as possible in the press releases. But we've also kicked around, and I think we probably should do this. We should probably maybe put an extra link in our website that says, "Hey, a further explanation of when we count an order." But to us, backlog is an order with a part number for a very specific ship date at a very specific sales price. So it's on the books. When we announce an IDIQ contract, the government will say that's an up to amount. So we really try to emphasize that specific number. So anyway, then getting back to your original question, we continue to look at the core competencies that we have. And so when we look at the AOC division, we've proven that we are now applying coatings that are protecting sensors. So if you think about how that's used and where it could be used, there's a lot of potential. There's a lot of sensors on a lot of products right now. And if they can be damaged by a laser strike, and if the camera is expensive enough to warrant the protection, then that's certainly an opportunity for us there. We're also using the same type of technology for reduction of an IR imprint. So in other words, vehicles typically have an exhaust if they're a larger vehicle or aircraft. And if we want to reduce that IR signature, then we can apply certain coatings to certain piece parts on the vehicle to reduce that signature, which enables higher safety for the soldiers inside the vehicle. So we see other opportunities. And as a matter of fact, that's part of the reason why we've brought Chad on is because we want to look at alternative markets. We want to look at other sources. And so we're going to be placing that load onto his very capable shoulders. So thank you. Perfect. And one last question. Do you think maybe on future releases, you could further elaborate on the backlog? Maybe say, for example, $45 million realized or funded with $10 million potential, etc., just so we can kind of gauge the bigger picture because we're losing a lot of perspective with just one number of backlog. And I think some investors, when they see a negative tick in backlog, they're assuming momentum is lost, which in this case is not correct. Let me say we'll take it under consideration. One thing I would comment on is there is no multiple numbers of backlog. It's a single number. So it's how many—what is the current backlog that we have at the time of the press release? So it's a little bit difficult if we start to say that we're projecting backlog, then we're kind of mixing apples and oranges here. So let me start with taking the action of actually putting something more detailed onto our website that describes the actual purchase orders versus backlog. So Karen, do you have anything to add to that? Yeah. Just one thing. We do, on our 10-K, there is a chart that we include with our 10-K that does give a little bit more of an in-depth picture of the long-running IDIQ type contracts that we have. So now it's a pretty cumbersome chart. We only do it once a year, but it does list out all of the long-running IDIQ contracts, what the maximum quantities are, how much of that's been funded, or how much has been awarded to date. So some of these five-year contracts, well, they only come around every five years. But that's a good tool or a guide if you refer back to that 10-K and this upcoming 10-K to say, "Here's what contracts they have on the books that we can expect to see future awards against. Okay. I'll take a look at that, definitely. Thank you for that. Okay. Thank you. Paul? Thank you. Thank you. There were no other questions in queue at this time, and I would now like to hand the call back to Danny Schoening for closing remarks. Very good. Thank you, everyone, for calling in. We appreciate your support. We have a lot of momentum right now, and we're pretty excited about the opportunities ahead of us. So thank you for joining us on this journey. So thank you. Take care. Goodbye. Thank you. This does conclude today's conference call. You may disconnect your lines at this time and have a wonderful day. Thank you for your participation.