Mr. David Robbins reports

OMNI-LITE INDUSTRIES REPORTS FOURTH QUARTER AND FISCAL 2023 RESULTS AND CONFERENCE CALL FOR INVESTORS: APRIL 19, 2024, AT 11:00 AM EDT

Omni-Lite Industries Canada Inc. has released its results for the fourth quarter and fiscal year ending Dec. 31, 2023. Full financial results are available at SEDAR+.

Fourth quarter fiscal 2023 results

Revenue for the fourth quarter of fiscal 2023 was approximately $3.3-million (U.S.), an increase of 6 per cent as compared with the fourth quarter of fiscal 2022. The increase in revenue was largely due to organic growth in its electronic components business.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was approximately $78,000 (U.S.) as compared with approximately negative $270,000 (U.S.) in the fourth quarter of fiscal 2022. The company's balance sheet remains strong with $1.1-million (U.S.) in cash and no debt outstanding.

Net income for the quarter was $477,000 (U.S.), or three U.S. cents per diluted share, which was impacted by two non-recurring items. In the quarter, the company recorded a $467,000 (U.S.) reduction in the goodwill associated with its acquisition of designed precision casting (DP cast) in 2021. The company also recorded a net income inclusion of $852,000 (U.S.) related to its loan to California Nanotechnologies (Cal Nano). The Cal Nano loan was fully reserved for in 2019 due to Cal Nano's uncertain outlook at that time. Since then, Cal Nano has demonstrated much improved performance and financial results, and reduced the loan outstanding. Accordingly, the valuation of the reserve was reversed which reflects the current outstanding loan balance.

Bookings in the fourth quarter of 2023 were approximately $4.3-million (U.S.), up 48 per cent as compared with the fourth quarter of fiscal 2022. As a result, the backlog at Dec. 31, 2023, was approximately $7-million (U.S.), a historic high for the company and a 91-per-cent increase from $3.7-million (U.S.) as at Dec. 31, 2022.

Fiscal-year 2023 results

Revenue for the fiscal year ending Dec. 31, 2023, was approximately $12.4-million (U.S.), as compared with $11.1-million (U.S.) in the prior year, an increase of 11 per cent. Adjusted EBITDA was approximately $445,000 (U.S.) as compared with approximately negative $1,128,000 (U.S.) in the prior year. The increase of approximately $1.6-million (U.S.) in adjusted EBITDA was primarily due to higher utilization of direct labour, reduction in SG&A (selling, general and administrative) and indirect labour, as well as better utilization of other fixed costs. Adjusted free cash flow was $534,000 (U.S.), which was after capital expenditures of approximately $153,000 (U.S.), as compared with negative $639,000 in 2022.

Omni-Lite reported a 2023 net income of $90,000 (U.S.), or one U.S. cent per diluted share, as compared with a net loss of $2.6-million (U.S.) or a loss of 17 U.S. cents per diluted share, in fiscal year ended Dec. 31, 2022.

Bookings for the year were $15.7-million (U.S.), resulting in a book-to-bill ratio of 1.27:1.

Management comments

David Robbins, Omni-Lite's chief executive officer, stated: "Two thousand twenty-three was a turn-around year for Omni-Lite. We achieved solid organic revenue growth and materially grew our backlog to historically high levels. Importantly, we returned to both positive adjusted EBITDA and positive adjusted free cash flow.

"While we made good progress in 2023 on profitability, we expect further improvement during 2024. Notably, DP cast had a negative financial impact on 2023, but is currently on an improvement trajectory. We expect DP cast to make a positive EBITDA contribution in second or third quarter of 2024. The decision to reduce the DP cast goodwill was made based on casting business not having yet passed a contribution threshold in 2023, but we see light at the end of the tunnel as DP cast is on pace to be an important and durable contributor to Omni-Lite's platform.

"We also anticipate continuing organic revenue growth driven by conversion of backlog and strength in our bookings pipeline. We finished 2023 with a well-balanced and record level backlog of $7-million (U.S.). In 2024, we look forward to revenue from new product production from orders booked in 2023 driving sales growth, and look to capitalize on continued new engineering orders and anticipated further increases in aerospace and defence bookings in 2024.

"We are pleased with Cal Nano's progress and our investment, a combination of senior secured loan and common shares in Cal Nano -- it is a very meaningful asset of Omni-Lite. While we remain supportive of Cal Nano, we'll continue to monitor and evaluate our investment in the context of our capital allocation needs, and, to date, our investment has been a positive for Omni-Lite.

"We recently completed our first quarter of the 2024 fiscal year. While we will not be in a position to release our financial results until mid-May, the company expects to generate sequential quarterly revenue growth of over 30 per cent from fiscal Q4 2023."

Investor conference call (different date for call needed)

Omni-Lite will host a conference call for investors on April 19, 2024, beginning at 11 a.m. (Eastern Time) to discuss the fiscal 2023 results, and review of its business and operations. To join the conference, call 888-437-3179 in the United States and Canada, or 862-298-0702 for all other countries. Please call five to 10 minutes prior to the scheduled start time. A replay of the conference call will be available 48 hours after the call and archived on the company's investors page of the company's website for 12 months.

About Omni-Lite Industries Canada Inc.

Omni-Lite Industries Canada is an innovative company that develops and manufactures mission critical, precision components utilized by Fortune 100 companies in the aerospace and defence industries.

We seek Safe Harbor.