Management Commentary
“Our first quarter results were impacted by temporary timing delays of shipments to biomedical end markets, due to purchase order revisions. However, operational execution remained solid, and shipments normalized beginning in April,” stated
Q1 2026 Financial Results
Revenue
- Q1 2026 revenue was
$6.5 million , compared to$7.1 million in Q1 2025. - The decrease was primarily attributable to temporary shipment timing delays related to a biomedical end-market purchase order, resulting from Syntec's requested changes to improve production efficiency.
- The Company received updated purchase orders subsequent to quarter-end, and shipments returned to normalized levels beginning in
April 2026 .
Gross Profit
- Gross profit for Q1 2026 was
$1.0 million , compared to$2.3 million in Q1 2025. - Gross margin was impacted primarily by a
$1 million reduction in production volume in January, which led to a higher fixed manufacturing overhead absorption rate. Some of this lower production was also affected by the extended two-week holiday shutdown at the end of the previous quarter, which the Company intends to better manage going forward. - Direct labor and material costs remained generally stable as a percentage of revenue, reflecting continued operational discipline across core manufacturing processes.
- During the quarter, the Company also continued selective investments in operational infrastructure and staffing intended to support anticipated future growth programs.
Operating Expenses
- Selling, general, and administrative expenses were
$1.7 million for Q1 2026, compared to$1.8 million in Q1 2025. - The Company continued to implement cost-control initiatives and operational efficiency improvements intended to support long-term margin improvement.
EPS
- Net loss for Q1 2026 was approximately
$0.9 million , or$(0.02) per diluted share, compared to net income of approximately$0.3 million , or$0.01 per diluted share, for Q1 2025. - Results primarily reflected the timing of the temporary shipment delay and the holiday shutdown impacts discussed above, partially offset by continued operational cost management initiatives.
Improved Cash and Liquidity
- The Company generated approximately
$0.5 million of cash from operating activities during Q1 2026, despite temporary shipment timing delays. - Cash at quarter-end was approximately
$0.6 million , and total liquidity, including availability under the Company’s revolving line of credit, was approximately$1.3 million as ofMarch 31, 2026 . - Subsequent to quarter-end, the Company successfully completed a public offering, raising approximately
$21.5 million in net proceeds, thereby significantly strengthening its balance sheet. - Following the offering, the Company paid down its revolving line of credit to zero while maintaining access to its
$7.5 million revolving credit facility with its commercial bank. - Management believes that, after completing the Company’s capital structure optimization, the raise provides additional flexibility to acquire or invest in complementary businesses, technologies, products, or assets, as well as for working capital and capital expenditures.
Operational Execution
- Syntec continued executing operational efficiency and cost-reduction initiatives to improve throughput, manufacturing scalability, gross profit, and EBITDA performance.
- The Company achieved continued yield and throughput improvements across several strategic growth programs, including:
- LEO Satellite Optics
- Night Vision Optics
- Micro cameras and Display windows for Artificial Intelligence AR/VR glasses
- AI/Data Center Optics
- Manufacturing investments made during the quarter included selective expansion of production staffing and operational infrastructure intended to support anticipated demand growth beginning in Q2 2026 and beyond.
- Multiple customer programs continued progressing from design and pilot phases toward production-stage manufacturing, strengthening the Company’s future revenue pipeline.
- The Company also continued implementing operational and supply chain initiatives designed to partially offset inflationary cost pressures and support long-term margin expansion.
Outlook
The Company expects improved operating momentum in Q2 2026, supported by normalized customer shipment activity following temporary purchase order timing delays in Q1 2026.
Syntec expects growth drivers during 2026 to include:
- Continued ramp of Space Tech optics product lines
- Expansion of defense-related optics production for over
$4M in previously announced orders - Increased space optics production activity in
March 2026 , as previously reported - Conversion of defense tech product from initial launch quantities to larger scale 10-year production orders expected for display optics and micro-cameras used in Artificial Intelligence Soldier AR/VR systems
- Ongoing operational efficiency and cost reduction initiatives
The Company currently expects:
- Q2 2026 net sales to improve sequentially from Q1 2026 levels to higher than
$7.5M
Management believes the Company’s achievement of the capital raise milestone enabled the optimization of the capital structure and provided additional flexibility to acquire or invest in complementary businesses, technologies, products, or assets, as well as for working capital and capital expenditures.
About
Forward-Looking Statements
This press release contains certain “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact contained in this press release, including statements as to the intended use of net proceeds from the public offering, are forward-looking statements. Some of these forward-looking statements can be identified by the use of forward-looking words, including “may,” “should,” “expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “plan,” “targets,” “projects,” “could,” “would,” “continue,” “forecast” or the negatives of these terms or variations of them or similar expressions. All forward-looking statements are subject to risks, uncertainties, and other factors (some of which are beyond the control of
For further information, please contact:
Investor Relations
InvestorRelations@syntecoptics.com
SOURCE:
CONDENSED CONSOLIDATED BALANCE SHEETS
| 2026 (unaudited) | 2025 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | 617,007 | $ | 358,867 | ||||
| Accounts Receivable, Net | 5,439,501 | 6,241,768 | ||||||
| Inventory | 7,798,397 | 7,884,943 | ||||||
| Prepaid Expenses and Other Assets | 509,110 | 655,827 | ||||||
| Total Current Assets | 14,364,015 | 15,141,405 | ||||||
| Property and Equipment, Net | 9,137,149 | 9,172,703 | ||||||
| Total Assets | $ | 23,501,164 | $ | 24,314,108 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable | $ | 2,433,745 | $ | 2,691,748 | ||||
| Accrued Expenses | 855,915 | 683,397 | ||||||
| Federal Income Tax Payable | 169,582 | 169,582 | ||||||
| Deferred Revenue | 74,794 | 66,420 | ||||||
| Line of Credit | 6,763,863 | 6,763,863 | ||||||
| Current Maturities of Debt Obligations | 94,586 | 93,358 | ||||||
| Current Maturities of Debt Obligations - | 463,530 | 406,495 | ||||||
| Current Maturities of Finance Lease Obligations | 361,717 | 354,499 | ||||||
| Total Current Liabilities | 11,217,732 | 11,229,362 | ||||||
| Long-Term Liabilities | ||||||||
| Long-Term Debt Obligations | 1,246,936 | 1,267,043 | ||||||
| Long-Term Debt Obligations - | 1,005,203 | 862,237 | ||||||
| Long-Term Finance Lease Obligations | 1,313,295 | 1,414,611 | ||||||
| Total Long-Term Liabilities | 3,565,434 | 3,543,891 | ||||||
| Total Liabilities | 14,783,166 | 14,773,253 | ||||||
| Stockholders’ Equity | ||||||||
| CL A Common Stock, Par value | 3,699 | 3,692 | ||||||
| 2,752,174 | 2,677,181 | |||||||
| Retained Earnings | 5,962,125 | 6,859,982 | ||||||
| Total Stockholders’ Equity | 8,717,998 | 9,540,855 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 23,501,164 | $ | 24,314,108 | ||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
| 2026 | 2025 | |||||||
| $ | 6,513,366 | $ | 7,069,042 | |||||
| Cost of Goods Sold | 5,552,574 | 4,760,424 | ||||||
| Gross Profit | 960,792 | 2,308,618 | ||||||
| General and Administrative Expenses | 1,736,839 | 1,780,166 | ||||||
| (Loss) Income from Operations | (776,047 | ) | 528,452 | |||||
| Other (Expense) Income | ||||||||
| Other Income | 69,300 | 5,697 | ||||||
| Interest Expense, Including Amortization of Debt Issuance Costs | (191,110 | ) | (200,896 | ) | ||||
| Total Other Expense | (121,810 | ) | (195,199 | ) | ||||
| (Loss) Income Before Provision for (Benefit) Income Taxes | (897,857 | ) | 333,253 | |||||
| Provision for Income Taxes | - | 9,588 | ||||||
| Net (Loss) Income | $ | (897,857 | ) | $ | 323,665 | |||
| Net (Loss) Income per Common Share | ||||||||
| Basic and diluted | $ | (0.02 | ) | $ | 0.01 | |||
| Weighted Average Number of Common Shares Outstanding | ||||||||
| Basic and diluted | 36,953,087 | 36,920,226 | ||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
| 2026 | 2025 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net (Loss) Income | $ | (897,857 | ) | $ | 323,665 | |||
| Adjustments to Reconcile (Loss) Income to | ||||||||
| Provided By Operating Activities: | ||||||||
| Depreciation | 539,682 | 710,804 | ||||||
| Amortization of Debt Issuance Costs | 4,170 | 2,416 | ||||||
| Stock-Based Compensation | 75,000 | - | ||||||
| Change in Allowance for Expected Credit Losses | 105,195 | (15,244 | ) | |||||
| Change in Reserve for Obsolescence | 2,298 | 50,345 | ||||||
| (Increase) Decrease in: | ||||||||
| Accounts Receivable | 697,072 | (568,310 | ) | |||||
| Inventory | 84,248 | (692,092 | ) | |||||
| Prepaid Expenses and Other Assets | 146,717 | 33,487 | ||||||
| Increase (Decrease) in: | ||||||||
| Accounts Payables and Accrued Expenses | (295,288 | ) | 279,142 | |||||
| Federal Income Tax Payable | - | 179,376 | ||||||
| Deferred Revenue | 8,374 | (4,299 | ) | |||||
| Net Cash Provided By Operating Activities | 469,611 | 299,290 | ||||||
| Cash Flows From Investing Activities | ||||||||
| Purchases of Property and Equipment | (294,325 | ) | (214,731 | ) | ||||
| (294,325 | ) | (214,731 | ) | |||||
| Cash Flows From Financing Activities | ||||||||
| Borrowing on Debt Obligations - Related Parties | 200,001 | - | ||||||
| Repayments on Debt Obligations | (23,049 | ) | (114,277 | ) | ||||
| Repayments on Finance Lease Obligations | (94,098 | ) | (28,165 | ) | ||||
| Net Cash Provided By (Used in) Financing Activities | 82,854 | (142,442 | ) | |||||
| Net Increase (Decrease) in Cash | 258,140 | (57,883 | ) | |||||
| Cash - Beginning | 358,867 | 598,787 | ||||||
| Cash - Ending | $ | 617,007 | $ | 540,904 | ||||
| Supplemental Cash Flow Disclosures: | ||||||||
| Cash Paid for Interest | $ | 159,714 | $ | 201,956 | ||||
| Cash Paid for Taxes | $ | - | $ | - | ||||
| Supplemental Disclosures of Non-Cash Investing Activities: | ||||||||
| Assets Acquired and Included in Accounts Payable | $ | 209,803 | $ | 168,628 | ||||
| Issuance of common stock for stock-based compensation | $ | 7 | $ | 23 | ||||
NON-GAAP RECONCILIATION OF EBITDA
FOR THE THREE MONTHS ENDED
| 2026 | 2025 | |||||||
| Net (Loss) Income | $ | (897,857 | ) | $ | 323,665 | |||
| Stock-Based Compensation Expense BOD (1) | 75,000 | - | ||||||
| Depreciation | 539,682 | 710,804 | ||||||
| Amortization of Debt Issuance Costs | 4,170 | 2,416 | ||||||
| Interest Expenses | 159,714 | 201,956 | ||||||
| Taxes | - | 9,588 | ||||||
| Non-Recurring Items | ||||||||
| Executive Transition (2) | - | 113,944 | ||||||
| One-time Contract exit costs | - | 4,675 | ||||||
| Non-recurring property damage | 23,211 | 21,261 | ||||||
| Adjusted EBITDA | $ | (96,080 | ) | $ | 1,388,309 | |||
In the quarters ended
(1) Stock-based compensation was issued to independent Board members.
(2) A succession plan was required for the transition of the CEO at the 2024 year-end.
