Release Date: February 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you elaborate on the manufacturing yield issues mentioned for the December quarter? A: (CFO Al Maranda) The yield issues were not particularly severe but were exacerbated by supply chain delays from China. Normally, we have extra materials to manage yield issues, but the delays made normal yield issues more problematic.
Q: What are the cross-selling opportunities between LightPath and G5, and are they included in the growth expectations? A: (CEO Sam Rubin) There are significant cross-selling opportunities, especially in combining uncooled and cooled camera systems. These opportunities are not included in the current growth projections for G5, which are based on their own revenue expectations.
Q: Can you provide more details on the large programs G5 is expected to be awarded? A: (CEO Sam Rubin) One program is in final negotiations and could be awarded in days. The naval program prototypes could be worth $2-3 million, with full production potentially reaching $10-20 million annually.
Q: How does the acquisition of G5 impact LightPath's exposure to Chinese supply chain issues? A: (CFO Al Maranda) We have $2 million in germanium sales in the U.S. at risk due to restrictions, but we are sourcing locally. In Europe, we have $2 million in sales with less risk. We aim to move away from germanium entirely in the U.S.
Q: What is the expected gross margin profile for the G5 business? A: (CFO Al Maranda) The camera business from G5 has higher margins than LightPath's current component business, which will blend upwards with the new portfolio.
Q: How did the acquisition of G5 come about? A: (CEO Sam Rubin) We had a long-standing relationship with G5, and we preemptively approached them before they engaged a bank to sell. The cultural and strategic fit was crucial, and the founders preferred our approach over previous experiences with other buyers.
Q: Is there any seasonality in G5's business that should be considered? A: (CFO Al Maranda) Yes, typically Q3 and Q4 are lighter on revenue, while Q1 and Q2 are heavier. We will confirm the exact mix with G5's management.
Q: What percentage of LightPath's business relies on imports from China? A: (CFO Al Maranda) Approximately $8 million in revenue comes from China, with $2 million in germanium sales in the U.S. at high risk and $2 million in Europe at moderate risk. We are actively working to mitigate these risks.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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