Elmet Group NASDAQ: ELMT reported higher first-quarter revenue and profit metrics in its first earnings call as a public company, with management pointing to growth in aerospace, defense and government demand, rising tungsten prices and a record backlog as key themes shaping the business.
Chairman and CEO Peter V. Anania said the company is positioned around “several mega trends,” including defense spending, reshoring and U.S. critical materials independence. Elmet operates through two divisions: Critical Materials Components, or CMC, and Engineered Microwave Products, or EMP. The CMC division manufactures tungsten and molybdenum products, while EMP produces high-power microwave components and systems for military and industrial applications.
Anania said Elmet is the sole U.S.-owned supplier of certain highly engineered critical material components and noted that the company has sourced more than 95% of its tungsten and molybdenum from outside China for more than a decade. He said that positioning has helped shield the company from some supply chain disruptions as export controls and tariffs affect critical materials markets.
Revenue Rises 20.7% in the First Quarter
CFO Mike Lee said first-quarter revenue rose 20.7% to $56 million, compared with $46.4 million in the prior-year quarter. The increase was primarily driven by a $9.1 million gain in the CMC division, including growth from the aerospace, defense and government, or ADG, end market.
Gross profit increased 37.5% to $11.8 million, representing a gross margin of 21.2%, compared with $8.6 million and an 18.6% margin in the first quarter of 2025. Lee attributed the improvement to CMC growth in ADG markets.
Operating expenses rose 73.6% to $10 million from $5.8 million a year earlier. Lee said the quarter included about $1 million of one-time IPO and restructuring-related expenses, with the remaining increase tied primarily to public company compliance costs, equity compensation and sales and marketing expenses associated with growth.
Adjusted net income was $4.7 million, or $0.24 per share, compared with $1.9 million, or $0.10 per share, in the first quarter of 2025. Adjusted EBITDA rose 105.7% to $9.2 million from $4.5 million. Lee said the adjusted EBITDA increase reflected about $1 million of operational performance improvements and a $3.7 million adjustment tied to the change in fair value of Elmet’s strategic investment in EQ Resources Limited, a tungsten mining company.
Backlog Reaches $113.3 Million
Elmet’s firm order backlog increased to approximately $113.3 million at the end of the first quarter, up from $96.3 million at the end of the fourth quarter of 2025 and $74.7 million at the end of the first quarter of 2025. Lee said ADG backlog rose 133.9% year over year, driven by programs including CERN, PrSM, Next Generation Interceptor, Hellfire, Javelin and a mix of commercial and defense-related aerospace and radar programs.
During the question-and-answer session, Lee said $83.5 million of the first-quarter backlog was tied to ADG, while $29.7 million came from other markets. He also said roughly $44 million of the backlog was tungsten-related business, compared with $32 million of tungsten revenue in 2025. Of the $38.6 million increase in total backlog from the prior-year period, Lee attributed about $13.4 million to tungsten pricing impacts.
Management said customer behavior has shifted as some buyers seek to lock in pricing amid volatility. Anania said Elmet is taking quotes, sourcing tungsten and then confirming sales orders once material is secured, often with customer prepayments to help cover tungsten costs.
CMC Leads Growth; EMP Backlog Improves
The CMC division generated $48.2 million in first-quarter revenue and a 20.3% gross margin, compared with $39.1 million and a 15.1% gross margin in the prior-year period. Lee said all CMC end markets grew, with ADG contributing the most significant expansion, rising to $19.3 million from $13.2 million.
The EMP division reported $7.8 million in revenue and a 26.4% gross margin, compared with $7.3 million and a 37% gross margin a year earlier. Lee said revenue increased while margin percentage declined because of a shift toward the industrial end market.
Across the total business, ADG revenue increased 26.6% to $22.8 million from $18 million, representing 40.7% of total revenue in the quarter. Lee cited higher sales volumes tied to defense programs including Hellfire, Javelin, Sidewinder, Patriot missile system, KC-135 Stratotanker and defense radar programs.
Industrial revenue rose 11.1% to $17.6 million, helped by higher sales of industrial microwave systems for tempering and drying and favorable tungsten pricing impacts. Medical revenue increased 4.9% to $10.7 million, driven by a demand recovery from a long-term medical wire customer. Semiconductor and electronics, along with energy, more than doubled on a combined basis to $4.9 million.
IPO Proceeds Targeted for Growth and Supply Security
After the end of the quarter, Elmet completed an initial public offering of approximately 9.9 million shares at $14 per share, generating $125.5 million in net proceeds. Lee said the company retired $17.8 million in term debt and paid $8.3 million in transaction-related appreciation rights costs, leaving $99.4 million in cash from the proceeds.
Lee said Elmet plans to use the proceeds for high-return investments intended to support organic growth and margin expansion. Priorities include higher-margin products, operational improvements, expanded customized capacity and securing additional long-term raw material supply. The company also plans to pursue strategic mergers and acquisitions when opportunities arise.
Lee said Elmet is focused on maintaining total leverage below 3.0 while maximizing liquidity and minimizing debt-servicing costs. He said the company expects to refinance remaining term debt later in the year and consolidate fragmented banking relationships, with a goal of completing the process in the fourth quarter.
Management Discusses Margin Expansion and Emerging Opportunities
Lee said one of Elmet’s key financial priorities is gross margin expansion. He identified three pathways: manufacturing cost improvements, a richer product mix as ADG revenue grows and economies of scale. The company recently hired a supply chain and operations consulting firm to help improve throughput and margins in the CMC division.
In response to an analyst question, Lee said Elmet has internal plans to approach 30% gross margin within five years, requiring about a 10-percentage-point increase from the 2025 baseline across both divisions. He said CMC margin gains are expected to come from operational performance and mix, while EMP improvement is expected from new products and more work involving engineering services.
Anania also discussed growth areas in satellites and additive manufacturing. He said Elmet materials are used in satellites for shielding electronics from electromagnetic pulse and solar radiation, and that the company is working on 3D-printed prototypes and recently received orders to print engines for satellite applications.
On mergers and acquisitions, Anania said the microwave market is fragmented and that Elmet is looking at companies with niche technology, higher-frequency capabilities or solid-state technology. In CMC, he said the company is interested in adding processing capabilities between concentrate and blue tungsten oxide, as well as machining and fabrication capacity. He also said Elmet is considering opportunities to expand its geographic footprint, potentially in Europe.
Anania closed the call by reiterating that Elmet sees increased activity across its end markets, supported by defense spending, reshoring and tighter sourcing conditions for tungsten and molybdenum.
About Elmet Group NASDAQ: ELMT
Elmet provides precision-engineered components and advanced high-energy systems for growth markets. Our customers in these markets require advanced technology involving critical and strategic materials, such as tungsten, molybdenum and niobium (such materials, the “Critical Materials”) and high-level radio frequency (“RF”) engineering, including plasma generation, radar, and other high-energy systems (together, “High-Power Microwave”). Our products and solutions are integral to the Aerospace, Defense and Government, Industrial, Medical, Semiconductor and Electronics, and Energy industries.
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