Elmet Group (ELMT) grows Q2 2026 revenue 35%+ but swings to loss
Rhea-AI Filing Summary
The Elmet Group Co. reported strong top-line growth but a GAAP loss for the quarter ended July 3, 2026. Revenue rose to $66.4 million from $49.1 million, an increase of over 35%, while gross profit margin expanded by more than 430 basis points. Adjusted EBITDA from continuing operations grew 57.9% to $8.9 million, and backlog increased nearly 55% to a record $132 million, reflecting accelerating demand in Aerospace, Defense & Government markets.
Despite this, Elmet recorded a net loss from continuing operations of $4.5 million versus income of $2.1 million a year earlier, driven largely by much higher operating expenses, including $14.2 million of stock-based compensation and IPO-related corporate costs. Operating cash flow from continuing operations was a use of $7.6 million, influenced by a significant inventory build. The company strengthened its balance sheet with $125.4 million of net IPO proceeds, ending the period with $66.1 million in cash and reducing total debt, while converting to a C‑corporation structure following a January 2026 reorganization under common control.
Positive
- Revenue grew over 35% year-over-year in Q2 2026 to $66.4 million, indicating strong demand momentum.
- Adjusted EBITDA increased 57.9% in Q2 2026 to $8.9 million, with margin improving to 13.3%.
- Backlog rose nearly 55% to a record $132 million, supporting visibility into future revenue.
- Net IPO proceeds of $125.4 million boosted cash to $66.1 million and enabled meaningful debt reduction.
- TTM adjusted net income reached $18.6 million, with diluted adjusted EPS of $0.83.
Negative
- Net loss from continuing operations of $4.5 million in Q2 2026 contrasts with $2.1 million income a year earlier.
- Operating expenses more than tripled year-over-year in Q2 2026 to $24.2 million, pressuring profitability.
- Operating cash flow from continuing operations was a $7.6 million use in the first half of 2026, versus $9.0 million provided in 2025.
- Inventories increased by $32.8 million in the first half of 2026, tying up additional working capital.
- General and administrative expenses jumped to $17.8 million in Q2 2026, including $14.2 million of stock-based compensation, diluting GAAP earnings.
Filing Explained
The August 13 Form 8-K furnishes the company’s quarterly results under Item 2.02; the release is not deemed filed for Section 18 purposes or incorporated by reference, so this disclosure reports results without creating a separate issuance or ownership change.
8-K Event Classification
Key Figures
Key Terms
Adjusted EBITDA financial
backlog financial
reorganization of entities under common control regulatory
stock-based compensation financial
discontinued operations financial
Deferred government grants financial
Earnings Snapshot
FAQ
How did The Elmet Group Co. (ELMT) perform financially in Q2 2026?
What happened to The Elmet Group Co. (ELMT) backlog as of Q2 2026?
Why did The Elmet Group Co. (ELMT) report a net loss in Q2 2026 despite higher revenue?
How did The Elmet Group Co. (ELMT) use proceeds from its IPO?
What were The Elmet Group Co. (ELMT) cash flow trends in the first half of 2026?
What non-GAAP metrics did The Elmet Group Co. (ELMT) highlight for Q2 2026?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
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indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02. Results of Operations and Financial Condition.
On August 13, 2026, The Elmet Group Co., a Delaware corporation (the “Company”), issued a press release announcing the Company’s financial results for the quarterly period ended on July 3, 2026. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Item 2.02 and Exhibit 99.1 are furnished herewith and shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, as amended (the “Exchange Act”) The information in this Item 2.02 and Exhibit 99.1 shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are being filed herewith:
| Exhibit No. | Description | |
| 99.1 | Press Release, dated August 13, 2026. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: August 13, 2026 | The Elmet Group Co. | |
| By: | /s/ Peter V. Anania | |
| Name: | Peter V. Anania | |
| Title: | Chief Executive Officer and Chairman | |
2
Exhibit 99.1
The Elmet Group Co. Reports Second Quarter 2026 Results
Continued demand acceleration in Aerospace, Defense & Government markets
Revenue increased over 35%, with over 430 basis points of gross profit margin expansion driving adjusted EBITDA increase of 57.9%
Backlog increased by nearly 55% to record level of $132 million
PORTLAND, Maine – August 13, 2026 – The Elmet Group Co. (“Elmet,” the “Company,” “we,” or “our”) (NASDAQ:ELMT), a U.S.-based provider of precision-engineered components and advanced high-power systems, today reported financial results for its fiscal second quarter ended July 3, 2026.
Second Quarter Fiscal Year 2026 Highlights
| ● | Successfully completed upsized initial public offering, raising net proceeds of $125.4 million. |
| ● | Revenue increased 35.2% to approximately $66.4 million compared to approximately $49.1 million in Q2 2025. |
| ● | Approximately 55% of the revenue growth is attributed to net demand increase with the balance associated with tungsten and molybdenum raw material pricing impacts. |
| ● | Gross profit margin improved 430 basis points to 25.0% of revenue compared to 20.7% of revenue in Q2 2025. |
| ● | Net income (loss) for Q2 2026 was approximately $(4.5) million, or $(0.16) per share, compared to approximately $1.2 million, or $0.06 per share, in Q2 2025. Adjusted net income for Q2 2026 was approximately $5.2 million, or $0.18 per share, compared to approximately $2.8 million, or $0.14 per share, in Q2 2025. |
| ● | Adjusted EBITDA increased to approximately $8.9 million, or 13.3% of revenue, compared to approximately $5.6 million, or 11.4% of revenue, in Q2 2025. |
| ● | Open order backlog increased to approximately $131.5 million, up from approximately $113.3 million at the end of Q1 2026 and approximately $84.6 million at the end of Q2 2025. |
Trailing Twelve Months (“TTM”) Highlights
| ● | Revenue increased 8.2% to approximately $228.5 million compared to 2026 first quarter TTM results of approximately $211.2 million. |
| ● | Gross profit margin improved 130 basis points to 22.2% of revenue compared to 2026 first quarter TTM of 20.9%. |
| ● | Net income decreased to approximately $(1.7) million, or $(0.08) per share, compared to approximately $4.0 million, or $0.20 per share, for 2026 first quarter TTM. Adjusted net income (loss) increased to approximately $18.6 million, or $0.84 per share, compared to approximately $16.2 million, or $0.81 per share, for the 2026 first quarter TTM. |
| ● | Adjusted EBITDA increased approximately $3.2 million to $31.8 million, or 13.9% of revenue, compared to approximately $28.6 million, or 13.5% of revenue, for 2026 first quarter TTM. |
Management Commentary
“In the second quarter we built on our existing momentum and delivered strong results, highlighted by an acceleration in revenue growth and profitability along with a record backlog,” said Company CEO Peter V. Anania. “Our performance was driven by a combination of strong operational execution, skillful navigation of a dynamic metals pricing market, and ongoing returns from our strategic focus on servicing the broader aerospace, defense & government landscape, all of which we expect to drive continued demand through the balance of the year.”
“Looking ahead, we remain well-positioned to effectively meet this demand as we expand our role as a trusted supplier across mission-critical systems. Longer term, we believe the operating environment remains highly favorable to Elmet, supported by our strategic position at the nexus of several megatrends that are in the early stages of an investment supercycle.”
Conference Call
The Elmet Group Co. management will host a conference call today, Thursday, August 13, 2026, at 9:00 a.m. Eastern time (6:00 a.m. Pacific time) to discuss these results, followed by a question-and-answer period.
Toll-Free Number: 877-869-3847
International Number: +1 201-689-8261
Webcast: Register and Join
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Group at 949-574-3860.
The conference call will be broadcast simultaneously and available for webcast replay here.
About The Elmet Group
The Elmet Group is a U.S.-based provider of precision-engineered components and advanced high-energy systems for the Aerospace, Defense and Government, Industrial, Medical, Semiconductor and Electronics, and Energy industries. The Company operates through two segments, Critical Materials Components (CMC) and Engineered Microwave Products (EMP), leveraging materials science and precision engineering expertise to deliver high-performance solutions. The Elmet Group is dedicated to strengthening domestic manufacturing capabilities to support the U.S. and its allies’ needs in both critical materials and advanced high-power microwave systems.
Reorganization and Presentation of Financial Results
On January 2, 2026, the Company effected a reorganization (the “Reorganization”) whereby Anania & Associates and its noncontrolling interest holders contributed their ownership interests in Anania & Associates and its consolidated subsidiaries in exchange for shares of common stock in the Company. The Reorganization was a reorganization of entities under common control as Anania & Associates and the Company were controlled by the Company’s Chief Executive Officer (“CEO”) before and after the Reorganization. As a result, the Reorganization was accounted for in a manner similar to a pooling of interests with the assets and liabilities of Anania & Associates and its consolidated subsidiaries being carried over at their historical amounts. The historical consolidated financial statements of Anania & Associates were retrospectively recast to reflect the results as if the Company owned Anania & Associates and its consolidated subsidiaries as of January 1, 2025. In connection with the Reorganization, Anania & Associates Investment Company LLC, an immaterial subsidiary of Anania & Associates, was no longer controlled by the Company and was deconsolidated on January 2, 2026. The deconsolidation was recognized as a spinoff and the impact of $0.5 million was recognized within equity. In connection with the Reorganization, the Company’s tax status changed from an S-corporation to a C-corporation.
2
Non-GAAP Financial Measures
In evaluating its business, the Company uses or may use certain non-GAAP measures as supplemental measures to review and assess its operating and financial performance. These measures are commonly used in the manufacturing industry to provide stockholders and potential investors with additional information that excludes unusual or non-recurring items as well as non-cash items that are unrelated to or may not be indicative of the Company’s ongoing operating results. These measures may not be comparable to similar measures presented by other companies and should not be viewed as a substitute for measures reported under U.S. GAAP. These non-GAAP financial measures have limitations as analytical tools when assessing the Company’s operating and financial performances, and investors should not consider them in isolation, or as a substitute for any consolidated statement of operations data prepared in accordance with U.S. GAAP. The reconciliations to EBITDA, Adjusted EBITDA, Adjusted Net Income, and Adjusted Earnings Per Share from relevant GAAP metrics are included at the end of this press release. Backlog as reported is confirmed orders from customers for which revenue has not been recognized.
Forward Looking Statements
The information in this press release includes forward-looking statements within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. These statements generally relate to future events or our future financial or operating performance and include statements regarding Elmet’s intended use of proceeds from the IPO, Elmet’s ability to: (i) effectively meet demand for its products, (ii) benefit from defense spending levels in the United States and other countries in which it does business, (iii) successfully pursue its ongoing supply chain realignment, (iv) expand its role as a supplier across its end markets, (v) successfully make opportunistic investments, if any, that will support its competitive positioning, (vi) effectively use the net proceeds received from its IPO to its benefit in the manner currently contemplated, in a different manner, or at all, and (vii) successfully navigate turbulent raw materials markets. When used in this press release, words such as “expect,” “project,” “estimate,” “believe,” “anticipate,” “intend,” “plan,” “seek,” “forecast,” “target,” “predict,” “may,” “should,” “would,” “could,” and “will,” the negative of these terms and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Forward-looking statements are based on management’s current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results could differ materially from those indicated in these forward-looking statements. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in Elmet’s Registration Statement on Form S-1, as amended (File No. 333-294725) and subsequent filings Elmet makes with the Securities and Exchange Commission. Elmet undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.
Company Contact
Chris Chandler
contact@theelmetgroup.com
Investor Contact
Tom Colton and Greg Bradbury
Gateway Group, Inc.
ELMT@gateway-grp.com
949-574-3860
-Financial tables to follow-
3
THE ELMET GROUP CO.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share data)
| July 3, 2026 | December 31, 2025 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 66,122 | $ | 1,759 | ||||
| Marketable securities | 4,923 | 202 | ||||||
| Accounts receivable, net | 34,483 | 28,904 | ||||||
| Government grant receivables | 232 | 1,690 | ||||||
| Related party receivables | 58 | 426 | ||||||
| Unbilled revenue | 564 | 2,621 | ||||||
| Inventories, net | 102,401 | 69,697 | ||||||
| Income tax receivable | 3,766 | — | ||||||
| Prepaid expenses and other current assets | 5,548 | 4,774 | ||||||
| Total current assets | 218,097 | 110,073 | ||||||
| Property, plant and equipment, net | 42,457 | 42,342 | ||||||
| Operating lease right-of-use assets | 11,777 | 10,586 | ||||||
| Intangible assets, net | 6,558 | 7,184 | ||||||
| Goodwill | 4,527 | 4,583 | ||||||
| Deferred tax assets, net | 88 | — | ||||||
| Other assets | 724 | 878 | ||||||
| Total assets | $ | 284,228 | $ | 175,646 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 27,390 | $ | 16,165 | ||||
| Accrued expenses and other current liabilities | 17,417 | 13,659 | ||||||
| Related party payables | 190 | — | ||||||
| Operating lease liabilities, current portion | 956 | 875 | ||||||
| Current portion of long-term debt – related party | — | 2,319 | ||||||
| Current portion of long-term debt | 2,370 | 7,755 | ||||||
| Deferred government grants | 2,358 | 4,672 | ||||||
| Deferred revenue | 21,416 | 14,853 | ||||||
| Total current liabilities | 72,097 | 60,298 | ||||||
| Operating lease liabilities, net of current portion | 11,407 | 10,247 | ||||||
| Long-term debt, net of current portion | 8,108 | 28,455 | ||||||
| Long-term debt, net of current portion – related party | — | 15,000 | ||||||
| Deferred tax liabilities, net | 4,075 | — | ||||||
| Other liabilities | 998 | 1,189 | ||||||
| Total liabilities | 96,685 | 115,189 | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ Equity: | ||||||||
| Preferred Stock - $0.001 par value; 20,000,000 authorized as of July 3,2026 and December 31, 2025. No shares issued and outstanding as of July 3, 2026 and December 31, 2025 | — | — | ||||||
| Class A Common Stock – $0.001 par value; 0 and 500,000,000 shares authorized, as of July 3, 2026 and December 31, 2025, respectively, 0 and 20,122,721 shares issued and outstanding as of July 3, 2026 and December 31, 2025, respectively | — | 20 | ||||||
| Class B Common Stock – $0.001 par value; 0 and 40,000,000 shares authorized as of July 3, 2026 and December 31, 2025, respectively, 0 and 466 shares issued and outstanding as of July 3, 2026 and December 31, 2025, respectively | — | — | ||||||
| Common Stock - $0.001 par value; 540,000,000 and 0 shares authorized as of July 3, 2026 and December 31, 2025, respectively, 30,459,498 and 0 shares issued and outstanding as of July 3, 2026 and December 31, 2025, respectively | 30 | — | ||||||
| Additional paid-in capital | 147,058 | 15,366 | ||||||
| Retained earnings | 40,507 | 44,791 | ||||||
| Accumulated other comprehensive (loss) income | (52 | ) | 280 | |||||
| Total stockholders’ equity | 187,543 | 60,457 | ||||||
| Total liabilities and stockholders’ equity | $ | 284,228 | $ | 175,646 | ||||
The accompanying notes are integral to the unaudited consolidated financial statements.
4
THE ELMET GROUP CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except share and per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| July 3, 2026 | June 30, 2025 | July 3, 2026 | June 30, 2025 | |||||||||||||
| Revenue | $ | 66,401 | $ | 49,130 | $ | 122,408 | $ | 95,517 | ||||||||
| Cost of goods sold | 49,791 | 38,983 | 93,950 | 76,759 | ||||||||||||
| Gross profit | 16,610 | 10,147 | 28,458 | 18,758 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative | 17,780 | 4,016 | 24,848 | 7,275 | ||||||||||||
| Research and development | 4,321 | 1,009 | 5,171 | 1,820 | ||||||||||||
| Sales and marketing | 2,137 | 1,876 | 4,204 | 3,559 | ||||||||||||
| Total operating expenses | 24,238 | 6,901 | 34,223 | 12,654 | ||||||||||||
| Operating (loss) income | (7,628 | ) | 3,246 | (5,765 | ) | 6,104 | ||||||||||
| Other expense (income), net: | ||||||||||||||||
| Interest expense | 127 | 793 | 740 | 1,303 | ||||||||||||
| Interest expense - related party | 233 | 377 | 860 | 793 | ||||||||||||
| Change in fair value of derivative asset | 881 | — | (2,214 | ) | — | |||||||||||
| (Gain) loss on remeasurement of fair value of marketable securities | (445 | ) | 23 | (1,081 | ) | 23 | ||||||||||
| Other (income) expense, net | (186 | ) | (77 | ) | (204 | ) | 2 | |||||||||
| Total other expense (income), net | 610 | 1,116 | (1,899 | ) | 2,121 | |||||||||||
| (Loss) income from continuing operations before taxes | (8,238 | ) | 2,130 | (3,866 | ) | 3,983 | ||||||||||
| Income tax (benefit) provision | (3,750 | ) | — | 960 | — | |||||||||||
| (Loss) income from continuing operations | (4,488 | ) | 2,130 | (4,826 | ) | 3,983 | ||||||||||
| Loss from discontinued operations | $ | — | $ | (890 | ) | $ | — | $ | (1,546 | ) | ||||||
| Net (loss) income | $ | (4,488 | ) | $ | 1,240 | $ | (4,826 | ) | $ | 2,437 | ||||||
| Net (loss) income per share: | ||||||||||||||||
| Basic | $ | (0.16 | ) | $ | 0.06 | $ | (0.20 | ) | $ | 0.12 | ||||||
| Diluted | $ | (0.16 | ) | $ | 0.06 | $ | (0.20 | ) | $ | 0.12 | ||||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic | 28,414,861 | 20,123,187 | 24,223,725 | 20,123,187 | ||||||||||||
| Diluted | 28,414,861 | 20,268,282 | 24,223,725 | 20,196,135 | ||||||||||||
The accompanying notes are integral to the unaudited consolidated financial statements.
5
THE ELMET GROUP CO.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
| Six Months Ended | ||||||||
| July 3, 2026 | June 30, 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net (loss) income | $ | (4,826 | ) | $ | 2,437 | |||
| Loss from discontinued operations | — | (1,546 | ) | |||||
| (Loss) income from continuing operations | (4,826 | ) | 3,983 | |||||
| Adjustments to reconcile (loss) income from continuing operations to net cash provided by operating activities: | ||||||||
| Deferred income taxes | 3,987 | — | ||||||
| Change in fair value of derivative asset | (2,214 | ) | — | |||||
| Depreciation and amortization | 3,779 | 3,215 | ||||||
| Stock-based compensation | 10,735 | 383 | ||||||
| Noncash operating lease expense | 469 | 440 | ||||||
| Noncash interest expense | 17 | 14 | ||||||
| Provision for excess and obsolete inventories | 33 | (1 | ) | |||||
| Change in fair value of interest rate collars | (56 | ) | 51 | |||||
| Unrealized (gain) loss on marketable securities | (1,081 | ) | 23 | |||||
| Change in operating assets and liabilities: | ||||||||
| Accounts receivable | (5,588 | ) | 7,607 | |||||
| Unbilled revenue | 2,057 | (4,059 | ) | |||||
| Inventories | (32,763 | ) | (10,780 | ) | ||||
| Related party receivables | 291 | — | ||||||
| Income tax receivable | (3,766 | ) | — | |||||
| Prepaid expenses and other current assets | (2,378 | ) | (527 | ) | ||||
| Other assets | 134 | 5 | ||||||
| Accounts payable | 12,250 | 885 | ||||||
| Accrued expenses and other current liabilities | 5,004 | 4,181 | ||||||
| Operating lease liabilities | (418 | ) | (381 | ) | ||||
| Related party payables | 190 | — | ||||||
| Deferred revenue | 6,570 | 3,975 | ||||||
| Other liabilities | 2 | 10 | ||||||
| Net cash (used in) provided by operating activities from continuing operations | (7,572 | ) | 9,024 | |||||
| Net cash used in operating activities from discontinued operations | — | (2,742 | ) | |||||
| Net cash (used in) provided by operating activities | (7,572 | ) | 6,282 | |||||
| Cash flows from investing activities: | ||||||||
| Purchase of shares upon exercise of call option | (1,426 | ) | — | |||||
| Purchases of property, plant and equipment, net of grant proceeds (see Note 7 – Government Grants) | (3,141 | ) | (4,602 | ) | ||||
| Net cash used in investing activities from continuing operations | (4,567 | ) | (4,602 | ) | ||||
| Net cash used in investing activities from discontinued operations | — | (110 | ) | |||||
| Net cash used in investing activities | (4,567 | ) | (4,712 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from initial public offering, net of underwriting discount and offering costs | 125,363 | — | ||||||
| Payments of principal on revolving credit facility | (99,882 | ) | (326 | ) | ||||
| Proceeds from revolving credit facility | 76,441 | 6,522 | ||||||
| Payments of principal on long-term debt | (1,783 | ) | (4,231 | ) | ||||
| Payments of principal on long-term debt – related party | (17,294 | ) | — | |||||
| Cash distributions paid to stockholders | — | (6,833 | ) | |||||
| Payments of deferred consideration | (73 | ) | — | |||||
| Payments of contingent consideration | (49 | ) | — | |||||
| Employee taxes paid on shares withheld for tax-withholding purposes | (4,371 | ) | — | |||||
| Net payments of principal on revolving credit facility – related party | (1,771 | ) | (1,559 | ) | ||||
| Repurchase of Class B Common Stock | (25 | ) | — | |||||
| Payments of principal on finance leases | (16 | ) | (25 | ) | ||||
| Net cash provided by (used in) financing activities from continuing operations | 76,540 | (6,452 | ) | |||||
| Net cash provided by financing activities from discontinued operations | — | 103 | ||||||
| Net cash provided by (used in) financing activities | 76,540 | (6,349 | ) | |||||
| Effects of exchange rate changes on cash | (38 | ) | 42 | |||||
| Net increase (decrease) in cash | $ | 64,363 | $ | (4,737 | ) | |||
| Cash at beginning of period | 1,759 | 6,532 | ||||||
| Cash at end of period | $ | 66,122 | $ | 1,795 | ||||
| Reconciliation of cash at beginning of period: | ||||||||
| Cash at beginning of period – continuing operations | $ | 1,759 | $ | 3,608 | ||||
| Cash at beginning of period – discontinued operations | — | 2,924 | ||||||
| Cash at beginning of period | $ | 1,759 | $ | 6,532 | ||||
| Reconciliation of cash at end of period: | ||||||||
| Cash at end of period – continuing operations | $ | 66,122 | $ | 1,620 | ||||
| Cash at end of period – discontinued operations | — | 175 | ||||||
| Cash at end of period | $ | 66,122 | $ | 1,795 | ||||
| Supplemental non-cash investing and financing activities: | ||||||||
| Purchases of property, plant and equipment included in accounts payable and accrued expenses | $ | 684 | $ | 280 | ||||
| Noncash activity related to government grants | $ | 1,273 | $ | — | ||||
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | 1,660 | $ | — | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | 1,674 | $ | 1,834 | ||||
| Cash paid for income taxes | $ | 700 | $ | — | ||||
The accompanying notes are integral to the unaudited consolidated financial statements.
6
Non-GAAP Financial Measures:
The following tables display certain non-GAAP financial measures we believe are helpful in assessing our performance and interpreting our financial results. We believe these non-GAAP financial measures are important supplemental measures because they exclude unusual or non-recurring items as well as non-cash items that are unrelated to or may not be indicative of our ongoing operating results. Further, when read in conjunction with our GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in our underlying businesses and can be used by management as a tool to help make financial, operational and planning decisions. We may use non-GAAP financial metrics in certain management compensation plans, debt covenants, internal budgetary decision making and other resource allocation decisions. Finally, these measures are often used by analysts and other interested parties to evaluate companies in our industry by providing more comparable measures that are less affected by factors such as capital structure.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP measurement. We define Adjusted EBITDA as our net income plus interest expense, income taxes, depreciation and amortization, and, as applicable for each period, stock-based compensation expense and non-cash gains and losses on the sale of assets. Adjusted EBITDA also excludes certain non-recurring costs such as the costs associated with the IPO, certain acquisition and transaction costs, severance and restructuring costs, and other non-recurring costs.
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THE ELMET GROUP CO.
ADJUSTED EBITDA FROM CONTINUING OPERATIONS
(NON- GAAP, UNAUDITED)
(in thousands)
| Quarters Ended | TTM | TTM | ||||||||||||||
| June 30, 2025 | July 3, 2026 | April 3, 2026 | July 3, 2026 | |||||||||||||
| Revenue | $ | 49,130 | $ | 66,401 | $ | 211,256 | $ | 228,527 | ||||||||
| Gross profit | 10,147 | 16,610 | 44,257 | 50,719 | ||||||||||||
| Gross profit margin % | 20.7 | % | 25.0 | % | 20.9 | % | 22.2 | % | ||||||||
| Operating expenses | 6,901 | 24,238 | 33,178 | 50,508 | ||||||||||||
| Net income (loss) from continuing operations | 2,130 | (4,488 | ) | 5,749 | (870 | ) | ||||||||||
| Net income (loss) from continuing operations % | 4.3 | % | (6.8 | )% | 2.7 | % | (0.4 | )% | ||||||||
| Adjustments to income (loss) from continuing operations: | ||||||||||||||||
| Income tax (benefit) provision | (3,750 | ) | 4,665 | 915 | ||||||||||||
| Interest expense(1) | 1,170 | 360 | 4,724 | 3,910 | ||||||||||||
| Depreciation and amortization | 1,611 | 1,856 | 6,367 | 6,608 | ||||||||||||
| Acquisition and transaction costs(2) | 89 | — | 403 | 314 | ||||||||||||
| Stock-based compensation(3) | 383 | 14,153 | 2,096 | 15,866 | ||||||||||||
| Corporate costs associated with the offering(4) | 228 | 608 | 3,368 | 3,748 | ||||||||||||
| Other(5) | — | 119 | 1,179 | 1,298 | ||||||||||||
| Adjusted EBITDA (6) | $ | 5,611 | $ | 8,858 | $ | 28,551 | $ | 31,789 | ||||||||
| Adjusted EBITDA Margin | 11.4 | % | 13.3 | % | 13.5 | % | 13.9 | % | ||||||||
| (1) | Interest expense includes both third-party interest expense and related party interest expense. |
| (2) | The adjustment for acquisition and transaction costs is to remove charges incurred in connection with any transaction, including mergers, acquisitions, refinancing, amendment or modification to indebtedness, and dispositions, in each case, regardless of whether consummated. |
| (3) | Stock-based compensation includes expenses associated with restricted stock grants made in support of our initial public offering and the Reorganization. In the three months ended July 3, 2026 the company expensed $14.2 million of which $4.1 million was settled in cash in association with stock appreciation rights. |
| (4) | Corporate costs associated with the initial public offering include third-party expenses related to enhancing our accounting controls and procedures, incremental audit costs, recruitment of executive team and legal expenses. |
| (5) | Others includes non-recurring costs associated with a utility failure at our CMC facility in Euclid, Ohio, and other restructuring costs. |
| (6) | Adjusted EBITDA excludes the financial impact of discontinued operations. On October 1, 2025 A&A distributed its shares in Polymer Laboratories, LLC to the individual shareholders, which is unrelated to A&A continuing operations and The Elmet Group Co. |
Adjusted Net Income and Adjusted Net Income Per Share
Adjusted Net Income and Adjusted Net Income Per Share are non-GAAP measurements. We define adjusted net income as net income less stock-based compensation and one-time non-recurring costs such as tax impacts of the Reorganization, discontinued operations, the costs associated with the IPO, certain acquisition and transaction costs, severance and restructuring costs, and other non-recurring costs and the income tax effect of such adjustments, as applicable.
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THE ELMET GROUP CO.
RECONCILIATION OF ADJUSTED NET INCOME AND ADJUSTED EARNINGS PER SHARE
(NON-GAAP, UNAUDITED)
(in thousands)
| Quarters Ended | TTM | TTM | ||||||||||||||
| June 30, 2025 | July 3, 2026 | April 3, 2026 | July 3, 2026 | |||||||||||||
| Numerator: | ||||||||||||||||
| Net income (loss) | $ | 1,240 | $ | (4,488 | ) | $ | 4,007 | $ | (1,720 | ) | ||||||
| Loss from discontinued operations | 890 | — | 1,742 | 850 | ||||||||||||
| One time tax expense associated with the Reorganization(1) | — | — | 3,791 | 3,791 | ||||||||||||
| Corporate costs associated with the IPO(2) | 228 | 608 | 3,368 | 3,748 | ||||||||||||
| Stock-based compensation(3) | 383 | 14,153 | 2,096 | 15,866 | ||||||||||||
| Acquisition and transaction costs(4) | 89 | — | 373 | 284 | ||||||||||||
| Other(5) | — | 119 | 1,209 | 1,328 | ||||||||||||
| Tax effect of adjustments(6) | — | (5,212 | ) | (344 | ) | (5,556 | ) | |||||||||
| Adjusted net income | $ | 2,830 | $ | 5,180 | $ | 16,242 | $ | 18,591 | ||||||||
| Denominator: | ||||||||||||||||
| Weighted average shares outstanding – basic | 20,123 | 28,415 | 20,123 | 22,174 | ||||||||||||
| Weighted average shares outstanding – diluted(7) | 20,268 | 28,983 | 20,343 | 22,495 | ||||||||||||
| Adjusted net income per share: | ||||||||||||||||
| Basic | $ | 0.14 | $ | 0.18 | $ | 0.81 | $ | 0.84 | ||||||||
| Diluted(7) | $ | 0.14 | $ | 0.18 | $ | 0.80 | $ | 0.83 | ||||||||
| Unadjusted net income (loss) per share: | ||||||||||||||||
| Basic | $ | 0.06 | $ | (0.16 | ) | $ | 0.20 | $ | (0.08 | ) | ||||||
| Diluted (7) | $ | 0.06 | $ | (0.16 | ) | $ | 0.20 | $ | (0.08 | ) | ||||||
| (1) | Reflects the impact of the deferred tax adjustment of $3.5 million, which was recognized in the period of Reorganization and does not reflect ongoing income tax expense, and other discrete tax impacts of $0.3 million related to the Reorganization. |
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| (2) | Corporate costs associated with the initial public offering include third-party expenses related to enhancing our accounting controls and procedures, incremental audit costs, recruitment of executive team and legal expenses. |
| (3) | Stock-based compensation includes expenses associated with restricted stock grants made in support of our initial public offering and the Reorganization. In the three months ended July 3, 2026, the Company expensed $14.2 million of which $4.1 million was settled in cash in association with stock appreciation rights. |
| (4) | The adjustment for acquisition and transaction costs is to remove charges incurred in connection with any transaction, including mergers, acquisitions, refinancing, amendment or modification to indebtedness, and dispositions, in each case, regardless of whether consummated. |
| (5) | Other includes restructuring and severance costs associated with a reorganization at our CMC division and non-recurring costs associated with a utility failure at our CMC facility in Euclid, Ohio and other restructuring costs. |
| (6) | Income tax effects associated with non-GAAP adjustments were calculated based on the specific tax treatment applicable to each adjustment and reflect the estimated current and deferred income tax consequences of the excluded items. The Company’s effective GAAP tax rate for the quarter was (45.6)%, while the effective tax rate applied to non-GAAP results was 35.0%. The difference between the GAAP and non-GAAP tax rates primarily reflects the impact of tax effects associated with the Reorganization impacts, share-based compensation arrangements, executive compensation limitations, discrete tax items recognized during the period, and other tax-related adjustments that are not directly proportional to the underlying pretax non-GAAP adjustments. Accordingly, the tax effect of non-GAAP adjustments differs from the amount that would be determined by applying the Company’s GAAP effective tax rate or statutory tax rate to the related pretax adjustments. There is no tax impact prior to the quarter ended April 3, 2026, as we were treated as an S-corporation for tax purposes prior to the Reorganization. |
| (7) | The potential impact on weighted average common stock outstanding (diluted) related to our restricted stock was evaluated under the treasury stock method based on the weighted average unrecognized compensation costs for each period and the estimated fair value of our common stock for each period. |
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