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DATE
Tuesday, November 4, 2025 at 5 p.m. ET
CALL PARTICIPANTS
Chief Executive Officer — J. Bryan Kitchen
Chief Financial Officer — Ryan Kavalauskas
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TAKEAWAYS
Revenue -- $19.7 million in revenue from continuing operations for Q3 2025, a 6% sequential increase for the third quarter, and a 6% decline from the prior-year period, primarily due to a low single-digit volume decrease, partially offset by price and mix gains.
Gross Profit and Margin -- Gross profit rose to $5.8 million for Q3 2025, with margin expanding to 29.7% from 26.1% in Q2 2025 and 14.4% in the prior year period.
Adjusted EBITDA -- $1.4 million for the third quarter, up $2.1 million year-over-year, and swinging from a loss to a 7% margin; excluding legacy divestiture costs, adjusted EBITDA would have been $1.6 million for Q3 2025.
SG&A Expense -- SG&A expenses were $6.3 million for Q3 2025, compared to $5 million in the prior year period, with $0.5 million attributed to residual divestiture and legacy segment activity.
Cash Position -- Ended Q3 2025 with $58 million in cash, zero debt, and $13.7 million available under the revolver.
Project Pipeline -- Added $18.2 million of selling projects to the pipeline in Q3 2025, building on a base that management expects to fuel growth into 2026.
Conversion Rate -- Of the $25 million in new projects in Q2 2025, 49% converted into customer commitments in Q3 2025, with approximately half from new customers and half from existing customers.
Key End Markets -- Recent customer wins were concentrated in CASE, water treatment, and infrastructure segments.
System Utilization -- Current capacity utilization stands at approximately 50%, allowing for considerable organic growth without major additional capital investment.
ERP Implementation -- New ERP system was implemented on time and on budget, creating a unified data platform for growth management.
Long-Term Margin Outlook -- CFO Kavalauskas said, "We now believe meaningful upside above 30% is achievable on a sustained basis with the right execution."
Share Repurchase Activity -- The company has been actively buying back shares daily, and removed a significant amount from the float earlier in the year.
SUMMARY
Management confirmed the full transition to a specialty chemical focus, emphasizing structural margin improvements and commercial momentum as key drivers of the earnings recovery. New project wins reached an above-industry-average conversion rate of 49%. Board composition changes aligned with the pure play chemical strategy are under consideration, reflecting a shift in organizational priorities.
J. Bryan Kitchen stated, "successful implementation of our new ERP system. On time, on budget, and without disruption. It delivers a single source of truth and the visibility to manage growth at speed."
Operational investments included hiring a seasoned R&D leader, producing immediate returns in product development efficiency and manufacturability improvements.
Capital strategy remains disciplined, with management reiterating that M&A will only proceed when returns clearly exceed internal growth opportunities and affirming a preference for organic growth given existing idle capacity.
Management acknowledged that future gross margin improvements may moderate, with incremental gains expected as the optimized production base is leveraged.
Retention of key talent and the challenge of scaling without margin dilution were described by management as top operational priorities in the coming quarters.
INDUSTRY GLOSSARY
CASE: Coatings, adhesives, sealants, and elastomers—a set of application end markets for specialty chemical products.
ERP: Enterprise Resource Planning—a comprehensive software platform used for integrated management of main business processes.
Full Conference Call Transcript
J. Bryan Kitchen: Thanks, Ralf. Q3 was a breakout quarter for Ascent. The strongest earnings performance we've delivered since 2022 and our first full quarter operating as a pure play specialty chemical company. Revenue grew 6% sequentially to $19.7 million. Gross profit rose 20% to $5.8 million, lifting margins 400 basis points to 30%. Adjusted EBITDA improved by more than $1.7 million quarter over quarter, swinging from a modest loss to a 7% positive margin. As a subsequent event to this quarter, these gains aren't episodic. They're structural. They reflect disciplined execution, strategic focus, and a business model that's working. Over the past six quarters, we've tightened cost structures, optimized mix, and built price and margin discipline across every part of our organization.
Those moves are now showing up directly in profitability, with gross margin improvement tracking ahead of plan. As I've said before, the market didn't do it to us, and it's not going to fix our performance for us. We own our outcomes. Every gain we deliver comes from relentless self-help and execution. And that's what's driving the structural earnings power of this platform. We've strengthened the foundation this quarter with the successful implementation of our new ERP system. On time, on budget, and without disruption. It delivers a single source of truth and the visibility to manage growth at speed. Our team turned what's often an enterprise-crippling endeavor into an enabler of scale, control, and customer responsiveness.
Simply put, Ascent has moved well past stabilization to acceleration. Our commercial engine is gaining speed, customer relationships are deepening, and our pipeline is converting at exceptional levels. This is the inflection point. Stabilization meets commercial momentum and where we begin to unleash our fullest earnings growth potential. In Q3, we welcomed 10 customers across our sites for audit trials and joint development workshops. That kind of engagement doesn't happen by chance. It's a direct reflection of trust and the capability that we've been building. When customers visit, they meet our operators, our engineers, our chemists, our quality professionals, and service teams that drive our success, and they see firsthand what makes Ascent different.
This is our chemicals as a service model in action. Agile, customer-centric, and outcome-driven. We meet customers where they are, helping them solve real-world problems faster, with less friction and more flexibility. And that approach is translating to results. Last quarter, I shared that we added roughly $25 million of new projects in Q2. By the end of Q3, nearly half or 49% had converted into customer commitments. That's an incredible success rate and a clear validation of our model and our execution. About 65% of those commitments were related to custom manufacturing opportunities and 35% were product sales. Long-term, high-value relationships in key segments like CASE, infrastructure, and water treatment.
They represent repeat, trust-based partnerships that deepen our customer relevance and extend the durability of our growth. Of course, the CEO in me wants all of those commitments to turn into purchase orders and shipments tomorrow morning. And, yes, our sales and operations team get more than a few calls from me checking in on exactly that. But we know that implementation timelines vary. We know that customers are qualifying new technologies, they're rewiring their supply chains, and they're working down inventory. What matters is the direction is unmistakable. The commercial flywheel is turning, and the earnings leverage is building. And that momentum continues to grow.
In Q3, we added another $18.2 million of selling projects into our pipeline, extending a robust base that will fuel growth well into 2026. Over the past six quarters, Ryan and I have emphasized this strategic recapitalization of SG&A. Rebuilding the commercial and technical engine that drives our growth. Those delivered investments in sales, marketing, and revenue operations have reshaped our go-to-market capability and are directly reflected in the record pipeline activity and customer engagement that we're seeing today. Now we're extending that focus to R&D. Making targeted investments in people and capabilities that accelerate product and process development, shorten scale-up cycles, and strengthen our technical differentiation. These investments are already delivering results.
Through new chemistries, improved manufacturability, and deeper integration with our customers' innovation pipelines. What gives us confidence in this next phase is the strength of our operating platform. Our quality and service have never been stronger. Across every site, teams are debottlenecking processes, boosting reliability, and grinding out waste with incredible urgency. That discipline is the backbone of our margin expansion story. And it allows us to grow efficiently, protect profitability, and deliver for customers in any environment. Every investment we make, whether in people, processes, or technology, is deliberate and return-driven. Self-help at Ascent means disciplined capital use, sharper execution, and improvements that compound into lasting earnings power. Our priorities are clear.
Drive organic growth by filling our available capacity with high-margin opportunities. Deepen customer partnerships through innovation, reliability, and speed, and maintain balance sheet strength and disciplined capital allocation to accelerate earnings growth. We're not waiting for the market to recover. We're creating our own. Ascent is stronger, faster, and laser-focused, and we're building a company to perform in any environment. Our culture is turning execution into endurance, and endurance into compounding value. The numbers tell the story, but our people write it. To the entire team at Ascent, your grit, hustle, and ownership are what make this possible. You are our unfair advantage. Our foundation is solid. The distractions are nearly gone, and the flywheel momentum is accelerating.
And the best part is we're just getting started. With that, I'll turn it over to Ryan to walk through our financial results in more detail.
Ryan Kavalauskas: Thanks, Brian, and good afternoon, everyone. I'll start by echoing Brian's earlier comments. From an operational perspective, the transition to a pure play specialty chemical platform is complete. We're now zeroed in on structural margin improvement, capacity and throughput lift, and durable growth in target segments. Let me walk through the quarter and how that translated to our results. Revenue from continuing operations was $19.7 million, down 6% versus the third quarter of last year but importantly, up nearly 6% sequentially from Q2. The modest contraction in revenue was driven primarily by a low single-digit percentage decline in volume, which created the bulk of the shortfall.
Pricing was a partial tailwind, reflecting selective increases, and product mix contributed incrementally positive gains as higher value programs continue to scale though not yet at the level needed to fully offset the volume impact. In other words, while demand softness weighed on shipped pounds, pricing discipline, and ongoing portfolio upgrading helped cushion the impact. Reinforcing that the earnings profile of the business continues to strengthen even in a softer volume environment. The evidence of that stronger earnings profile can be seen in gross profit increasing to $5.8 million with gross margins expanding to 29.7%, up from 26.1% in Q2 and just 14.4% in the prior year period.
For those tracking our progression, Q1 gross margin was 17.2%, Q2 was 26.1%, and Q3 is now 29.7%. We have said publicly that 30% was our gross margin target, as utilization improves across our network and we layer operating leverage, we rebuild earnings base. We now believe meaningful upside above 30% is achievable on a sustained basis with the right execution. Moving to SG&A. Expenses were $6.3 million compared to $5 million in the prior year period. About $0.5 million of the current quarter's SG&A was tied to residual divestiture and legacy segment activity, partially offset by other income.
As Brian alluded to, we view the modest increase as part of foundational investments we've been talking about each quarter that ultimately scales and drives growth. With that foundation beginning to produce results, you're beginning to see the earnings power of the business more clearly. Adjusted EBITDA for the quarter was $1.4 million, an increase of $2.1 million year over year. Excluding the legacy divestiture noise, adjusted EBITDA would have been $1.6 million. Turning to the balance sheet. Ended the quarter with $58 million of cash, no debt, and $13.7 million of incremental availability under our revolver. That is a position of strength and one we intend to preserve.
M&A still remains part of our long-term capital allocation strategy, but as we've evaluated what's in market today compared to returns on internal growth, we've been very comfortable being patient. We said before, and I'll say it again, we won't deploy capital simply for the sake of activity. Our capital priorities remain clear and consistent. Protect the balance sheet, prioritize free cash flow, and deploy only when the returns are undeniable. When the right opportunity comes, other internal or external, it will come down value over years. Not just quarters. The work in the past eighteen months stabilizing operations, rebuilding talent, exiting distractions, sharpening commercial focus, doesn't always show up in a single quarter. But it shows up in trajectory.
Three straight quarters of margin expansion, stronger commercial wins, all with meaningful capital and capacity still ahead of us. That's why we're confident where the business is heading. With that, I'll turn it back over to the operator for questions.
Operator: Thank you.
Ryan Kavalauskas: Thank you.
Operator: At this time, we will conduct our question and answer session. As a reminder, to ask a question, you will need to press 11 on and wait for your name to be announced. To withdraw your question, please press 11 again. Our first question comes from the line of Gregg Kitt with Pinnacle Fund. Your line is now open.
Gregg Kitt: Hi, Brian and Ryan. Congratulations on a great quarter. Can you help me make sure I understood correctly? You said that you added $25 million of new projects in Q2 and that 49% converted into customer commitments. So does that mean that you won approximately $12.5 million of new business in Q3?
J. Bryan Kitchen: That's correct. So that $25 million was in reference to the pipeline that was built up in Q2. In Q3, we won roughly half of that business opportunity. So as I mentioned earlier, you know, from a phasing standpoint, that will be feathered in over time. We're looking forward to that hitting kind of full run rate clip as we get into 2026.
Gregg Kitt: Okay. Thank you, Brian. And when I think about that win rate or that conversion rate, I think in the past on the Q call, you talked about 14% being more like industry average. You had 18% in Q2. So you were batting, you know, batting above average in Q2 and, obviously, 49% is excellent. Is there some reason why your conversion rate or your win rate was so high in Q3? Can you give me some color?
J. Bryan Kitchen: I mean, I really think it gets back to the health of the projects that are making their way into the stealthy project pipeline. So it kind of rules on engagement. Right? Nothing goes into our pipeline that we can't make. Right? So either we've made the product before, or we know that we have the capabilities to manufacture it. Underpinning both of those things, though, is a specific customer need. So in other words, there's an express requirement from a customer that is driving us to pursue that particular activity. So I think, you know, those things along with just improved execution is really the reason why we were pretty successful in the third quarter.
So proud of what the team has done in Q3 and look forward to continuing to inch that up over time.
Gregg Kitt: Thank you. Is there a way to think about how much of that business is from existing customers versus new? I think the prior couple quarters, you tried to help give some color around that.
J. Bryan Kitchen: Yeah. It was in the last quarter, so it was about 50% existing customers, 50% new for Q3.
Gregg Kitt: Yeah. For the Q3 ones. That's right. Okay. Great. Okay. Thank you. I'll hop back in the queue.
J. Bryan Kitchen: Alright. Thanks, Gregg.
Operator: Our next question comes from Eric McCarthy with Enlight Capital. Your line is now open.
Eric McCarthy: Hey, Ryan. Great quarter. It's really good to see the progress that you two have made in such a short while. As I'm looking through the new business that you've added to the funnel and then converted to revenue, what are some of the end-user markets that are really driving some of the new business?
Ryan Kavalauskas: Yeah. I think in this last quarter, if you think about it in context of that $12.5 million of new business that we were awarded, certainly CASE, so coatings, adhesives, sealants, elastomers, water treatment, and other infrastructure-related applications. That was kind of the core. Certainly, we gained in other areas like oil and gas, but those three are really the driving force behind our wins in the last quarter.
Eric McCarthy: And then more on the big picture business side. When I look at the structure of the board, many of the directors are more tied to the legacy business lines. And some have even been actively selling the stock. What are the organization's plans to maybe align the board more with the future strategy and what we have in place now? And maybe even, you know, getting someone like yourself on the board.
J. Bryan Kitchen: Yeah. I look. I appreciate the question. I think a similar question was thrown over the fence in our last earnings call. I mean, look. Our board has been incredibly supportive of Ryan and I. When we came in the door last year, they have done exactly what they committed to do. So for that, we're eternally grateful. But you're right. I mean, as we kind of look forward to the evolution of the business and where we're going as a company, no longer do we have the tubular. We're a pure play specialty chemical company. And the board is actually in the process of reimagining what that future board complement needs to look like moving forward.
They've been kind enough to solicit my input and the input of others. So we're making progress. I think we'll have some information to share in the coming quarters. And, yeah, that's the short story.
Eric McCarthy: Okay. That's great news. I guess in that same vein, is there anything about what you're seeing in the landscape both operationally and a corporate perspective that is front of mind for you is, you know, giving you any concern keeps you up at night. What keeps me up at night?
J. Bryan Kitchen: Ryan, I'll let you jump in on this one as well. I mean, I think for me, it's all about retention. Right? So, you know, transformations aren't easy. Done the right way. They're just world-class hard. A lot of tough decisions, a lot of tough, a lot of late nights. Crazy pace. So, you know, for me, it's just making sure that we do everything in our power to retain the talent that has gotten us to this point, and that's going to take us to that next phase in our transformational journey. So that's what keeps me up at night. Ryan?
Ryan Kavalauskas: Yeah. I think, you know, as we move into this next phase of growth and we're moving through and past the stabilization phase. It's how do we scale, and then how do we make those investments appropriately, how do we do that without diluting margins? I think that is really the next phase and challenge for us is how do we continue to make these gains, win new business, and scale the organization after we've kind of right-sized the cost structures in a lot of different places, you know, challenge the teams, stretch the team as much as we can. So that is really the focus.
I think that is really our big challenge coming up is can we operationally execute in pace with the commercial team as they bring these wins? And I think we're doing a good job today. And we've got to keep going. And I think that's really our focus and really what I think if you had to say what keeps me up, it's how do we do that, and how do we do that appropriately in the next few quarters.
Eric McCarthy: Alright. Well, thank you. Again, great job, and I look forward to seeing how it continues to evolve.
J. Bryan Kitchen: Thanks, Eric.
Ryan Kavalauskas: Thanks, Eric.
Operator: Our next question comes from the line of Adam Waldo of Lismore Partners LLC. Your line is now open.
Adam Waldo: Good day, Brian and Ryan. Thank you very much for taking my questions. I hope you can hear me okay.
J. Bryan Kitchen: We can.
Adam Waldo: Great. Well, solid quarter. And I wanted to probe and expand on Ryan's prepared remark comment a little bit about gross margin. Think Ryan, you articulated that you felt comfortable with the ability to sustain a 30% gross profit margin going forward on the pure play business. Now that you've reached that stage of corporate development. Is it fair to say that there may be some additional headroom beyond that on an intermediate-term basis? The extent that you're comfortable commenting on that?
Ryan Kavalauskas: I do. I don't think we're going to see kind of the rapid expansion of gross margins we saw this year. We did a lot of work purposely repositioning the product portfolio and really attacking costs. So I think for us, we got a lot of those gains early on. Here, I'd expect basis point improvements going forward. As I just alluded to Eric, we have to grow appropriately. And I think as we scale and find where the pain points are, we are going to have to invest in people both at the operational level and in the back office level.
So I expect there to be some margin expansion, especially with layering on volumes onto this optimized base that we have. So we should see some operational leverage pull through. But, again, I don't think it's going to be this, you know, 300, 400 basis point increase every quarter, but I do expect some nominal increases as we keep going. So how far up that can go remains to be seen, but we do have a tremendous amount of capacity. We have a lot of room to pull on that operating leverage.
And I think if we are mindful of where we make those investments and how we scale, I think, you know, I expect to see nominal increases in gross margin throughout the next few quarters.
Adam Waldo: Okay. So 30% plus gross margin in the coming one to two years, modest sequential growth? For helpful modest syndrome. I mean, it's dumb margin. I just need the dumb margin for you. That's At what level of adjusted EBITDA margin do you need to be to achieve sustainable positive operating cash flow in the business?
Ryan Kavalauskas: Yes. I mean, we're almost there. So if you kind of pull out some of the legacy, you know, Munhall activity and to formally former steel assets, you look at just our chemical segment with corporate layer down, we're right there today. So I feel comfortable that, you know, if we can get up to 10%, that should be where we need to be to sustain kind of positive cash flow going forward. Like I said, we're effectively there today, so we just need to keep this kind of improvement going, be mindful of how we're investing in SG&A. But that high single digits, low teens is where we effectively are.
And I think if we can kind of just keep continuing to not only build off this base, we should see cash flow generate.
Adam Waldo: Okay. Permit me. On the minehole divestiture, and I apologize, I got on the call late. Did you make any prepared remarks comments as to the update on your hope for timing on closing that wind down?
J. Bryan Kitchen: No. I didn't offer any prepared remarks on that. But what I will say is, you know, we are efforting getting this completely off of our books by the close of this year. We're making good progress. We're not over the finish line yet. But I would look for 2026 to be a clean sheet of paper.
Adam Waldo: Fabulous. Okay. Last question, if you will permit me. Share buyback services. Man, it's Captain. I have speak to the business at your current time.
Adam Waldo: On used spare capacity. How do you think about the IRRs from share repurchase as you get over that 10% adjusted EBIT M&A base on what you're seeing in the market right now before, any potential ex synergies or under synergies? Hey. Adam, I hate to break it to you, but we could not hear hardly anything that you just said. The connection Sorry.
Operator: Adam? Yeah. What? Having a hard time hearing you. Okay. Yeah. I apologize. Do you wanna try calling back in? Or are you able?
Adam Waldo: If you can't hear me now, I'll call back in. I apologize.
Operator: Okay. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Our next question comes from Gregg Kitt of Pinnacle Funds. Your line is now open.
Gregg Kitt: Thank you for the One of the other more encouraging statements that I heard you say, Ryan, was that you're very comfortable being patient. On acquisitions right now. And it sounds like in part that's because you're winning business organically. And maybe that's at a rate more than what you previously thought. I think when I talked to both of you earlier this year, My thought was that maybe you'd go look at acquiring some proprietary products like a portfolio that could help accelerate your ramp to that $120 to $130 million of revenue? Seems like you're winning business organically at a rate where maybe that you don't need to do that.
Could you give just a little bit of color around how you're thinking about product proprietary product portfolio acquisitions? Relative to your organic growth?
J. Bryan Kitchen: Yeah. Sure. Gregg, can you hear me okay? I can hear you just fine. Can you hear me? Yeah. I can. Yeah. Just from an M&A perspective, you know, we're certainly active. We're just not we're not in a rush to do a bad deal. We were actually, you know, under an LOI. In Q3. Obviously, that didn't move through, but that just goes back to our patience and how we're going to be good stewards of the capital that we do have. From a product perspective, certainly, we're very interested in acquiring product lines that could then be integrated within our existing underutilized asset base. Obviously, that's a little bit more difficult to find, but we are efforting that.
Gregg Kitt: Thank you. And so because you have this opportunity to be patient on acquisitions, you have a bunch of cash, which is generating interest income in the meantime. I think maybe to piggyback on some of Adam's how do you think about your current balance sheet repurchase activity and how do you evaluate it? I think you said within with an IRR on your on a repurchase versus some other use?
Ryan Kavalauskas: Yeah. I mean, what we like is we have the optionality. Right now, and I think that's a unique position for a lot of people in our industry who are just trying to kind of get by every quarter. So, you know, we look at it all holistically. We have been more successful at a faster rate. In organic growth. We have a tremendous amount of upside within our own assets. So, ideally, that is the safest, lowest risk return if we can find ways to allocate capital internally to growth CapEx, for example, operationally to support growth. That'll be our first and foremost point of allocating capital.
Like Brian said, we've been looking at M&A, we've been looking at inorganic growth. Frankly, there's just not been a lot of assets out there that we feel are worth the distraction that would generate the returns on a risk-adjusted basis to equal what we can do organically. And then we've always had the option to buy back stock. If the stock continues to stay, you know, at this level, we'll continue to be active in the market. We are buying back shares daily. It's a small amount. We took quite a bit of shares out of the float earlier this year.
So, you know, we kind of just look at it holistically, and we're always keeping our ear to the ground on what's out there from an M&A perspective, but, you know, with the amount of idle capacity we have today, you know, it doesn't make a lot of sense for us to go buy capacity. Right? We have to, you know, fill our own plants. If we can find a product line that we can slot in, if we can find a new vertical to go into that outside of the core ones that we participate in today. We'll look at that. So we do have to mire our benchmarks internally, depending on where that investment goes.
But, you know, we like the optionality at this point as we continue to kind of evolve and see where this business is taking us and see where we're successful, I think that's where we're going to be able to allocate capital and drive again, like organic first, and then we'll look at the other options.
Gregg Kitt: Thank you. One last question for me. Can you talk about some of the targeted R&D investments that you're making? How quickly can those turn into other new products? You have the capability to manufacture it in your existing equipment, and you're looking at how can you develop a new product? Or if you could flesh that out, that would be great.
J. Bryan Kitchen: Yeah. I mean, I think first and foremost, it was hiring Prashant, our new R&D leader. Prashant's an industry expert, came to us by way of Olin and prior to that DuPont. So, you know, within literally weeks, Prashant was helping us crack the code on some product development challenges that we had. He's leading these, helped us resolve some process R&D related challenges, so improving the manufacturability of products that we've developed in the lab and helping them scale up more efficiently and effectively in the plants. So he's already making a huge difference, obviously, from a capabilities standpoint. We have lab capabilities today.
There's probably some targeted investments that we'll be looking at making in 2026 to close a couple of capability gaps that we have from a lab equipment perspective. But really just really pleased with how Prashant has leaned in. And the impact he has made in such a short period of time.
Gregg Kitt: Thank you very much.
Operator: Our next question comes from the line of Adam Waldo of Lismore Partners LLC. Your line is now open.
Adam Waldo: I apologize for the earlier connectivity issues. I hope you can hear me okay now.
Ryan Kavalauskas: Yep.
Adam Waldo: Oh, great. Okay. Phew. Alright. So at the kind of 30% gross margin and with some headroom above that going forward over the next couple of years, what kind of variable contribution margins do you think you'll be able to achieve at the adjusted EBITDA margin line? As you bring on continue to bring on strong levels of new volume? Then related to that, do you think your current system-wide capacity utilization is presently? Thank you.
Ryan Kavalauskas: I'll speak to the incremental. So, you know, not to be, you know, kind of difficult here, but it's really, you know, the way our assets are set up, you know, it's not a straightforward calculation where one pound equals, you know, x margin or incremental margin. So it's really dependent on the customer, the engagement, the product mix, and where we make that product. Right? So we have three plants today depending on what it is and where it is. That's how we were able to kind of define that incremental margin pickup.
So where we're at today, the business we're bringing in today, again, I think it's going to you're going to see incremental margin on top of this going forward. So, you know, it's really difficult to say, you know, £5 million week, max million margin. It just really depends on how this mix plays out, where we determine that it's the best place to fit those products into our current assets. So I would say, incremental margin improvements as we keep going. I don't expect tremendous pickups every quarter here just despite the volume growth. So that's kind of how I view the incremental margin gains. Brian can speak to capacity.
J. Bryan Kitchen: Yeah. Just to add a little bit more color on that, Adam. I mean, so from a manufacturing process, some of the products that we make, you know, have a six-hour cycle time. Some of the products that we manufacture have, like, a forty-eight-hour cycle time. So, obviously, the cost is very, very different from product to product. From manufacturing to manufacturing locations. So we're not trying to be difficult but it that, you know, descriptor of it depends, it really does depend. From a utilization standpoint today, you know, we're right around 50% utilized. So tons of runway for organic growth inside of the existing asset base with, you know, minimal capital requirements.
I mean, if you do look back over the past three to five years, our average CapEx spend has been in that, you know, call it, $3 million a year range. Moving forward, there's nothing standing in our way from being able to deliver a $120 to $130 million of top line through our existing asset base without additional material capital required. So tons of runway for organic growth, super excited about the momentum that's being built up from a commercial standpoint. Wanna see those wins. Start hitting the income statement sooner than later. But the momentum's real, and it's building.
Adam Waldo: Terrific. Very helpful color. Thanks very much, and good luck going forward.
J. Bryan Kitchen: Alright. Thanks, Adam.
Ryan Kavalauskas: Thank you.
Operator: This concludes our question and answer session. I would now like to turn the call back over to Mr. Kitchen for closing remarks.
J. Bryan Kitchen: Okay. Great. Thank you, Dana. We'd like to thank everyone for listening to today's call, and we look forward to speaking with you again when we report our fourth quarter 2025 results. We'll get that right next. Thanks a lot, everyone, and have a great evening.
Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation.