Moving iMage Technologies Q3 2026 Earnings Call Transcript

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May 14, 2026

Key Takeaways

  • Neutral Sentiment: MiT said third-quarter revenue fell 4.9% to $3.4 million, as customer project activity remained slow in the seasonally weaker period, though the company said this was partially offset by DCS revenue.
  • Positive Sentiment: Gross profit improved 11% to $1.2 million, and gross margin expanded to 34.8% from 29.8%, helped by higher-margin sales from the newly acquired DCS cinema loudspeaker business.
  • Positive Sentiment: Management highlighted encouraging early traction for DCS, with Q3 sales later corrected to $460,000 and backlog of about $375,000, most of which is expected to ship before the end of June 2026.
  • Positive Sentiment: The company emphasized strategic growth opportunities from international expansion, saying it now has more than 25 international distributors and plans to use DCS to open new markets and cross-sell other MiT solutions.
  • Positive Sentiment: MiT guided to Q4 2026 revenue of approximately $5.3 million, citing normal spring-season strength and increasing momentum from DCS, while also noting it has no long-term debt and ended the quarter with $2.3 million in net cash.
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Earnings Conference Call
Moving iMage Technologies Q3 2026
00:00 / 00:00

There are 5 speakers on the call.

Speaker 3

As a reminder, this conference is being recorded. I will now turn the call over to Chris Eddy, Investor Relations to begin.

Speaker 1

Thank you operator and thank you all for joining today's call. MiT CEO, Phil Rafnson will make some opening remarks, followed by a business update from President and COO, Francois Godfrey, and then our recently appointed CFO, Bart Bedard 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 investor 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, that there can be no assurances that expected or anticipated results or events will take place. Actual future results could differ materially from those statements.

Speaker 1

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 MiT CEO, Phil Rafnson.

Speaker 4

Thanks, Chris, and thank you all for your interest in Moving iMage. Overall, our third quarter performance reflected a relatively stable revenue profile compared to the prior year. We experienced slower than usual customer project activity during what is typically a seasonally slower period for MiT. We made good headway in advancing our new DCS Cinema loudspeaker business, as Francois will touch on in more detail. DCS generated approximately $290,000 of revenue in its first full quarter under MiT. We view this a strong early indicator of both the market opportunity and the durability of the business going forward, particularly considering the $1.5 million we spent to purchase the DCS assets. Customer reception has been highly positive, reinforcing our confidence in the strategic value of this acquisition that closed at the end of October 2025.

Speaker 4

Last month, we had the opportunity to showcase our expanded solutions portfolio at CinemaCon 2026 with a particular focus on our cutting-edge cinema audio product and engineering capabilities. Customer and partner feedback was very constructive with enthusiasm around our enhanced product and solutions offering and a favorable outlook for the feature film pipeline and expectations for it to support renewed exhibition industry upgrade activity. Given the actions we have taken to both expand our capabilities and to fine-tune our cost structure, we feel MiT is well-positioned to deliver improving results as we navigate the exhibition industry's audio needs for premium large format PLF enhancements as well as their projection technology refresh needs. I'll turn the call over to Francois Godfrey, our President and COO.

Speaker 2

Thanks, Phil, good morning, everyone. As Phil noted, our second and third quarters are typically slower periods for customer project activity, that dynamic was reflected in our Q3 performance, offset somewhat by ramping revenue from our purchase of the DCS Cinema loudspeaker business, which we believe has the potential to meaningfully benefit our long-term growth prospects in a few ways. DCS is far more than a product line addition for MiT. It is a new strategic revenue opportunity built on a highly respected premium line of cinema loudspeakers deployed in thousands of auditoriums around the world. We believe DCS is an ideal complement to our existing product and services offerings, one that can open new customer relationships for MiT, both in North America and in international markets. The latter of which, until now, were not an area of focus for our company.

Speaker 2

We believe DCS's reputation for cinema audio excellence is an ideal complement to our engineering, design and system integration expertise that should help us expand our commercial reach. The early results are encouraging. As Phil mentioned, we generated $290,000 in revenue from DCS during the quarter, which reflects solid initial engagement from exhibitors as well as over 25 international distributors with whom we have partnered. The opportunity to expand our reach into international markets through DCS is a key element of the opportunity ahead. Our international distributors have deep established local market relationships and view DCS as a differentiated high-performance offering, delivering a cutting-edge audience experience. Our intention is to leverage our growing global reach to expand DCS adoption and to introduce other MiT products and capabilities to create a broader, more integrated solutions presence in these new markets.

Speaker 2

Across the industry, exhibitors continue to build out their offerings of premium large format or PLF auditoriums with immersive audio, reflecting the ways exhibitors compete for audiences. Consumers are looking for a theatrical experience that meaningfully exceeds the one they have at home. That means better picture, better sound, and more fully integrated immersive environment. We believe MiT is particularly well-positioned to support exhibitors in creating such experiences. With DCS, we are not simply selling speakers. We help cinemas rethink sound as a core component of the overall experience. That includes how audio integrates with projection systems, screen technologies, and full auditorium design. Our approach is consultative and system-oriented. We're not just replacing equipment. We are working with customers to improve what the audience sees, hears, and ultimately feels. At the same time, the industry-wide xenon-to-laser projection upgrade cycle continues to represent a promising long-term opportunity.

Speaker 2

We expect a measured pace that should continue to provide a meaningful base of technology refresh activity. As exhibitors invest in brighter, more efficient projection, it creates a natural opportunity to revisit the entire auditorium experience, and we are actively positioning ourselves to participate in those conversations. Our confidence in a return to modest growth in our core cinema technology solutions and systems integration business is bolstered by recent domestic box office, which grew more than 20% year-over-year during the quarter ending in March 31, 2026. We believe that such improving demand from audiences should give exhibitors and specialty screen operators the confidence to continue modernizing aging infrastructure while also prioritizing greater operational efficiency. In that environment, MiT remains well-positioned to deliver flexible, practical solutions tailored to the real-world constraints exhibitors face.

Speaker 2

In summary, while recent activity reflects typical seasonal patterns, we are building momentum in areas that will define the next phase of growth for our company. The DCS platform, our expanding international reach, and our alignment with key industry trends like PLF and immersive audio all reinforce our confidence in the path ahead. I'll turn the call over to Bart Bedard, our CFO appointed in April 2026, to address some financial highlights.

Operator

Thanks, Francois. We included our financial statements in the press release this morning and expect to file Form 10-Q by the close of business today. I will now comment on some of the financial results. MiT's Q3 2026 revenue dropped 4.9% to $3.4 million, while our Q3 2026 gross profit rose 11% to $1.2 million, reflecting slower customer project activity during the seasonally slower third quarter, offset by revenue from MiT's new DCS cinema loudspeaker line. Gross margin percentage grew to 34.8% compared with 29.8% in Q3 2025, primarily due to higher-margin product revenues from the sale of DCS inventory recently acquired at the beginning of Q2 2026.

Operator

The sale of the remaining DCS inventory acquired during the period is expected to continue to benefit gross margin % above a customary range associated with our current base business. As Phil noted earlier, Q3 2026 results included $290,000 of DCS sales, up from $17,000 in Q2 2026. Current DCS backlog stands at approximately $375,000, the majority of which is expected to ship to customers before June thirtieth, 2026. Total operating expense remained relatively flat, decreasing by 1.2% to $1.32 million in Q3 2026 compared to $1,333,000 during Q3 of 2025. Q3 2026 operating loss improved to $134,000 versus an operating loss of $270,000 in the same period last year. The improvement reflects the benefit from higher-margin sales opportunities.

Operator

Similarly, Q3 2026 net loss improved to $122,000 or $0.01 per share compared with a net loss of $240,000 or $0.02 per share in Q3 2025. Turning to our balance sheet, we achieved working capital of $4.3 million at the close of Q3 2026, which includes DCS inventory of $1.39 million, keeping us in solid position to fund our business compared to Q3 2025 working capital of $4.6 million. MiT has no long-term debt. We closed Q3 of 2026 with net cash of $2.3 million or approximately $0.24 per common share compared to net cash of $5.4 million at Q3 2025, which predated the $1.5 million acquisition of DCS loudspeakers from QSC.

Operator

Net cash at Q3 2026 was also pressured by a custom installation for a customer completed in Q3 2026 but paid for in early Q4 2026. Inventory at the end of Q3 2026 stood at $3.18 million compared to $3.08 million at 12/31/2025. Which includes assets acquired under the DCS loudspeaker acquisition and new DCS inventory purchased by MiT in the last few months to satisfy our current backlog. I will note that the recent decline in net cash by $3 million compared to Q2 2026 is offset in part by the inventory increase during this Q3 2026 period. Turning to our revenue outlook, MiT anticipates Q4 2026 revenue of approximately $5.3 million, reflecting the positive seasonality of customer activity in the spring months, as is typical for our business and the growing strength of the DCS loudspeaker business.

Operator

We believe the foundational work undertaken in the past year, including revitalized business development tactics and culminating in the strategic acquisition of DCS, positions us to unlock operating leverage, support sustainable growth, and deliver long-term value for our shareholders as global demand for immersive experiences underpinned by our advanced cinema equipment solutions continue to improve. With that overview, operator, we are ready to begin the Q&A session.

Speaker 3

Before we begin the Q&A session, I'm going to turn the call over to the management for a brief comment.

Operator

Yes. Hello, this is Bart. I wanted to correct a comment made a few minutes ago on the level of the DCS sales in Q3 2026. The correct figure is $460,000, not $290,000. We misspoke. Thank you for participating in today's call. Operator, let's begin the Q&A session now.

Speaker 3

Ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press star and one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star and two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We will now wait for a moment while we poll for questions. A reminder to all participants, you may press star and one to ask a question. Participants, you may press star and one on your telephone keypad to ask a question. Ladies and gentlemen, as there are no questions, that concludes the conference call of Moving iMage Technologies, Inc.. Thank you for your participation. You may now disconnect your line.

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