Greetings. Welcome to Moving iMage Technologies, First Quarter 2026 Earnings Call. [Operator Instructions] Please note the conference is being recorded. At this time, I'll turn the conference over to Chris Eddie with Investor Relations. Thank you. You may now begin, Chris.

Thank you, operator, and good morning to all of you joining today's call. Moving iMage Technologies CEO, Phil Rafnson, will make some opening remarks, followed by a business update from President and COO, Francois Godfrey; and then CFO, Will Greene, will conclude with some financial highlights, after which we will open the call to investor questions. Today's conference is being recorded, and an audio replay and written transcript will be posted to the Investors section of the Moving iMage website in the next few days. As a reminder, except for historical information, the matters discussed in this presentation are forward-looking statements that involve several risks and uncertainties. Words like believe, expect and anticipate mean that these are our best estimates as of this writing, but there can be no assurances that expected or anticipated results or events will take place. Actual future results could differ materially from those statements. Further information on the company's risk factors is contained in the company's quarterly and annual reports filed with the SEC. I will now turn the call over to Moving iMage CEO, Phil Rafnson.

Thanks, Chris, and thank you all for your interest in Moving iMage Technologies. Our quarter 1 performance was bolstered by the acceleration of some projects we had expected later in the year and by solid operational execution, both in terms of margin and operating costs. The combination of higher revenue, increased gross margin and lower operating expenses enabled us to achieve our goal for profitability for the quarter while also bolstering our working capital position. I'm very proud of the operational progress our team has made that enabled us to achieve profitability results. This progress will benefit MIT as we move forward. However, our ability to achieve profitability in any given quarter remains a function of the timing of customer projects as well as normal seasonality of our business. Visibility into longer-term customer spending plans remains limited despite the substantial scope of industry-wide cinema technology upgrades still to be completed. We believe a major factor in supporting laser projection and audio upgrade investments is the health of the exhibition industry. To that end, domestic box office receipts for the third quarter of the calendar year were approximately $2.4 billion, nearly matching the year ago period. And we are now entering the all-important holiday box office season that offers the potential for improvement given a strong film lineup and steady improving attendance trends. Our strategy within our target markets has been to continue building on our value proposition with new products and capabilities. We believe our recent acquisition of DCS Cinema Loudspeaker line represents an exciting step in executing this strategy. Overall, I believe MIT is making good progress in enhancing our operational and financial performance while also taking steps to expand our capabilities. Through these initiatives, we are improving our ability to support our customers in navigating their cinema technology requirements from design and engineering to equipment supply, installation and system commissioning. Now I'll turn the call over to Francois Godfrey, our President and COO.

Thanks, Phil, and good morning, everyone. I'll start by echoing Phil's comments on our team's solid start to fiscal year 2026. Our Q1 revenue exceeded our expectations on the top line as certain projects were accelerated by customers into the period. In addition, our bottom line benefited from the meticulous project execution for which MIT is known, enabling us to achieve an operating income of $350,000. We are particularly gratified by achieving profitability in the first quarter as this resulted from many quarters of work in reducing our overhead, cost structure and building our project pipeline focused on higher-margin opportunities. Given our size, the seasonality of our industry and the variability of project sizes, their timing and revenue mix, we continue to expect operating losses in the future until we are able to scale our business to consistent profitability. To reach that important goal, we continue to advance a range of internal and external initiatives designed to build our revenue base. On the project side, our team continues to engage in a variety of new build and technology refresh discussions with exhibitors and other specialty entertainment venues. These projects range from individual auditorium upgrades to full site refresh or new build initiatives incorporating state-of-the-art laser projection technology, coupled with immersive audio technologies. As we have often said, the timing of these opportunities remains fluid as they are largely dependent on our customers' capital cycles and strategic decision-making. Accordingly, this makes it difficult for us to predict project timing, particularly on a quarterly basis. Fortunately, the scope of legacy equipment in the market is quite considerable. Our ongoing engagement with new and existing customers confirms that there remains a very substantial base of potential work over the next few years. So we continue to believe that it's not a question of…

Thanks, Francois. We published our financial statements in the press release this morning and expect to file our Form 10-Q by the close of business today. I will touch on select financial results and gladly answer any questions during the Q&A session. MIT's Q1 '26 revenue rose 6.2% to $5.6 million, reflecting the benefit of delivery of a custom cinema project and other client work. Our Q1 '26 gross profit rose 22% to $1.7 million, supported by higher revenue and an improved gross margin of 30% compared to 26.1% in Q1 '25 primarily due to a favorable mix of products and execution efficiency. MIT reduced operating expense by 8% to $1.32 million in Q1 '26 compared to $1.44 million during Q1 '25 due to reductions in compensation, headcount, rent and travel costs. As noted in our Form 10-K for the fiscal year ended June 2025, we streamlined our organization from 32 to 25 full-time employees. We expect continued benefits from this leaner operating model as we move forward, offset to some degree by selected new hires for the DCS operations. Q1 '26 operating income improved to $350,000 versus an operating loss of $68,000 in the same period last year. The improvement reflects revenue growth, a focus on higher-margin opportunities and ongoing expense management initiatives. Similarly, Q1 '26 net income improved to $509,000 or $0.05 per share compared to a net loss of $25,000 or breakeven per share in Q1 last year. Q1 '26 net income included a $128,000 noncash gain from payables extinguishment that more than offset a decrease in net interest income, largely due to lower interest rates. Our Q1 '25 results underscore MIT's potential to achieve profitability and positive cash flow on higher revenues with the benefit of our cost and margin disciplines. Turning to our balance sheet.…

[Operator Instructions] First question is from the line of Neal Fagan, a private investor.

First of all, great quarter. It's really, I guess, the word from me is exciting to see that even a modest revenue level of $5.5 million gives you strong GAAP profitability. I was curious just to learn a little bit more about the DCS speaker line. Did I understand that you think you can recoup the purchase cost with revenue over the next 2 to 3 years? Is that the metric you were using?

I can take this one. Yes, that is the intent that we modeled out as we're trying to bring the -- that line toward where it used to be.

Okay. Well, that wording is interesting because here's kind of where I'm wanting to understand this. It was a very small purchase price, $1.5 million. And from your prepared remarks, it sounds like this is a line of speakers that is embedded in a lot of the large displayers, a lot of the medium-sized displayers. Is this a case of where the DCS line in you guys' opinion has enormous potential that wasn't being realized by the previous owners for whatever reasons. Are you guys feeling like you can take this to a much higher level than what was being done when you acquired it?

Correct. It's -- this line is well respected around the world, and it has extreme potential and market acceptance.

Okay. And you talked about how it's a good go-to-market compatibility product with the LEA power amplifiers. So I'm thinking of it, we have DCS, which is an established name and has customers around the world. We have LEA, which is just trying to get into the cinema industry through you guys. I mean, are you feeling like going to market with both is going to potentially accelerate the acceptance and adoption of the LEA power amplifiers?

There are synergies there, and so that would be the intent.

Okay. And when you acquired -- when you got the rights for the -- for LEA, you gave us metrics about the average selling price per power amplifier and the number of power amplifiers that would be used in a typical single-screen cinema. Can you give us a few numbers around the DCS speakers like a typical theater, a single-screen room, what's the revenue opportunity if it was outfitted with new DCS speakers?

I don't have those figures in front of me at this time.

Okay. And final question for me is, you guys have highlighted several times in the announcement pursuing international markets and opportunities. You called out Middle East and Europe. When do you think that you might, in one of these calls, kind of go into more of the detail about the status, how we're approaching that and kind of a game plan, is that something we might hear about soon?

Once we finish the process of onboarding the business, we'll have a clear picture.

[Operator Instructions] At this time, this now concludes our question-and-answer session, and this will also conclude today's conference. Ladies and gentlemen, thank you for your participation. You may now disconnect your lines at this time, and have a wonderful day.