Capstone Energy+ Inc

Good day, ladies and gentlemen, and welcome to the Capstone Energy Plus fourth quarter and full fiscal year 2026 earnings conference call and webcast. Today's call will cover the company's financial results for the fiscal fourth quarter and full year ended March 31st, 2026. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will open the call for questions from covering analysts. We will also address questions submitted by investors through the webcast. If you are joining via webcast and would like to submit a question, please click the Q&A button located on your screen and enter your question. Questions may be submitted at any time during today's presentation. As a reminder, today's conference call is being recorded. It is now my pleasure to turn the call over to Alfredo Gomez, General Counsel of Capstone Energy+. Alfredo, please go ahead.

Thank you very much. Good afternoon and thank you for joining Capstone Energy Plus Inc's fourth quarter and full fiscal year 2026 earnings conference call. On the call with me today are Vince Canino, the company's president and chief executive officer, and Candice Graves, the company's chief accounting officer. Today, June 25th, Capstone Energy Plus Inc issued its financial results for its fourth quarter and full fiscal 2026 year, which ended March 31st, 2026. During today's call, we will be referring to slides that can be found on the company's website under the investor relations section. This conference call contains forward-looking statements representing the company's views as of today, June 25th, 2026. Other than as required by federal securities laws, the company disclaims any obligation to update or revise these statements to reflect future events or circumstances. You should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties, and other factors that are in some cases beyond our control. Please refer to the Safe Harbor provisions set forth on slide two of the accompanying presentation in today's earnings release and in Capstone's filings with the Securities and Exchange Commission for information concerning factors that could cause actual results to differ materially from those expressed or implied by such statements. Please note that as Mr. Canino and Ms. Graves go through the discussion today, when they mention EBITDA, they're referring to adjusted EBITDA, which is a non-GAAP financial measure, and the reconciliation to net income can be found in the earnings release and the appendix to the presentation slides. I would like to now turn the call over to Vince Canino, the company's president and chief executive officer.

Thank you, Alfredo, and good afternoon, everyone. Before we begin, I would like to sincerely thank our shareholders for your patience. I recognize that this earnings call and the filing of our Form 10-K took longer than anticipated. While we never take delays lightly, it was important to us that we took the necessary time to ensure the accuracy and completeness of our reporting, particularly given the significant achievements and important developments that will be discussed today. Ahead of discussing the numbers, I want to speak directly to the people who have stood with this company for many years and some through every chapter of its story. As a microcap company, we often find ourselves listening closely to the interaction of our investment community and numerous inbound messages. And every so often, a signal breaks through that reminds us exactly why Capstone exists. What we found was powerful. The signal told the same story. Shareholders who believed in this company for years stayed through Chapter 11 and came back when we emerged. Because their belief in this company and its technology never faded. This reminded me of something very important. Our mission isn't to just deliver strong quarters. It's to build the company you always knew this could be. Capstone has the bones, the talent, and the capacity to achieve everything you originally imagined and more. And for that, we are committed to delivering on that very belief every single day. This is now a company with strong fundamentals, bold expectations, and a tremendous runway. You see, leaders of public companies often talk about shareholder value. But for many, that phrase can sometimes float by as if it's filled with helium, almost without substance. I want to be clear. For us, those words carry real weight. They are grounded in something real, which is your belief in what we can accomplish. It is powerful to feel the history. Shareholders who believed in Capstone stayed through the hardest years and are still with us today. Their stories give that phrase shareholder value, a depth that demands our respect and our action. At the same time, I want to extend a warm welcome to our new shareholders. Over the past year, a new group of investors has chosen to join the Capstone story. While many of you are newer to our journey, your confidence in our strategy, our technology, and our future is equally important. I also want to specifically acknowledge Monarch and our pipe investors. Their support helps strengthen our capital structure, accelerate our transformation, and position the company for its next chapter of growth. Together, our longstanding shareholders and our newest investors form a community united by a common belief. Capstone's best days lie ahead. Which brings me to our name. As we announced several weeks ago, we are no longer Capstone Green Energy. We are Capstone Energy+. The shift from green to plus more accurately reflects the focus and ethos of our company today and where we are headed. We are something more than just green. We are ultra clean, quiet, innovative, and capable of far more than producing just electrons. Beyond electricity, we believe in a circular economy where waste heat becomes valuable thermal energy and waste streams become fuel streams converted into clean energy with a lower carbon footprint. Our innovative technology produces some of the highest uptime plug-and-play hybrid power solutions available. Shaped by our inverter-based technology, we deliver quiet, clean, and modular energy sustainably around the clock. Our destiny isn't tied to a single technology. It's tied to our ability to use the mastery behind microturbines to influence a broader energy landscape. And we plan to do this through technology and integration, which can also be funded under our Energy as a Service platform. Like an oak tree that has stood through storms and seasons, we believe our foundation and deep roots in microturbines are strong and time-tested. And while they anchor us, the future demands that we widen that root system, branching into new technologies and new markets to meet a new energy renaissance. This is the new capstone. Capstone Energy+. On site, on demand, always on. Now let's move to slide five to discuss our fourth quarter and full fiscal year financial highlights. Our fiscal year, 2026, delivered significant improvements over the prior year, further proving that our three pillar strategy, financial health, sustainable excellence, and revitalization of culture and talent remains both straightforward and executable. 23.9% revenue growth and a doubling of adjusted EBITDA are certainly compelling results. But let me put that performance into perspective. Compared with the prior year, we delivered an additional 8 million of adjusted EBITDA on 20.4 million of incremental revenue, representing an incremental adjusted EBITDA margin of approximately 40%. We believe this demonstrates the higher operating leverage in our business and the extent to which our investments are translating into meaningful earnings growth. To me, That's what real leverage looks like. Now, the year was not without its challenges. We entered fiscal 26 with a strong backlog and positive momentum, but external factors quickly emerged. The introduction of broad-based tariffs in April 2025, along with the resulting supply chain uncertainty and cost pressures across many industries, caused several customers to pause capital spending decisions. Later in the year, declining oil prices created headwinds for portions of our oil and gas business. As crude oil prices moved lower, customers actively moderated, which in turn reduced utilization within our rental services fleet. Despite those challenges, our team remained focused and disciplined in its execution. We continue to convert opportunities, manage costs, and drive operational efficiency across the business. We also implemented targeted pricing actions to help offset anticipated cost increases from tariffs, while our ongoing DFMA initiatives helped mitigate much of the immediate impact. Although these efforts temporarily slowed our progress toward higher product gross margins, we believe they ultimately strengthened the business and positioned us well for the future. At the same time, we continued investing in our long-term growth strategy, We added talent across the organization, particularly within engineering and territory direct sales, as we expanded our commercial reach through the acquisition of the Western Territory previously held by Cal Microturbine. Collectively, these actions helped us achieve another historic milestone for Capstone. In our nearly 38-year history, we delivered our first full fiscal year of positive net income. What makes this accomplishment even more meaningful is the context. We achieved it just two years after one of the most difficult chapters in our company's history, our Chapter 11 restructuring. The transformation from that moment to where we stand today is a testament to the resilience of our employees, the support of our stakeholders, and the disciplined execution of our strategy. To move from restructuring to profitability in such a short period reflects the determination of our team and the strength of the foundation we have built. Let's move to slide six. Fiscal 26 was a strong year of achievements that set the table for our exceptional financial performance, even as we navigated several market headwinds. Some accomplishments supported our immediate objectives while others advanced our mid- and long-term strategies. What stood out most was watching our people operate as a unified team, working with a forged mindset of discipline, urgency, consistency, and focus, delivering results, adapting to challenges, and finding ways to win, even when the market threw us curveballs. We learned how to hit the junk, put the ball in play, and keep putting runs on the board. While I won't cover all 11 items on this slide, a few are worth highlighting as they underscore the strength we are building as a company. Global National Accounts Program What compelled us to launch this program was the sheer number of repeat customers we were seeing. A customer is a first-time buyer, someone who purchases a solution to meet a specific need. But when you consistently deliver value, reliability, and trust through product and the people who support it, you convert that customer into a client. And clients buy repeatedly. After issuing yet another press release announcing an expansion from an existing user, whether a facility added one more turbine or a hotel added our solution to another one of their properties, It became clear that we were converting customers into clients at a meaningful rate. That's real value creation. But with clients comes responsibility. You must go where they go, when they go. Under our legacy territory distribution model, clients crossing distributor boundaries sometimes create friction. Collaboration wasn't always seamless. By implementing this program with clear governance and scope split algorithms, we've streamlined how we follow clients anywhere in the world to help them solve their energy trilemma. And for national and global clients who prefer to work directly with the OEM, we now have a structured roadmap that allows us to engage directly while still leveraging the local expertise of our distributors. The second area of accomplishment is the launch of our major growth market use case initiatives. Yes, data centers are front and center, but any resilient business must future-proof itself. Data centers will experience cycles of rapid expansion and periods of slower growth. That's why we're also focused on opportunities such as port electrification. Ports are facing significant power infrastructure constraints, and many are realizing that solar and battery storage alone cannot meet their growing needs. Our technology, clean, quiet, portable, and capable of running on multiple gaseous fuels, including hydrogen, helps ports address both their infrastructure challenges and their decarbonization goals. Another major growth market is infrastructure strain. As discussed in our last earnings call, utilities are facing unprecedented strain, not just at substations, but across their entire fleet of field-deployed transformers. The rapid rise of EV charging is a major contributor. A single Level 2 charger can draw anywhere from 7kW to 19kW, whether at home, a strip mall, or a business. It doesn't take long for a standard 50kW pole-mounted transformer to become overloaded. This creates a significant problem for utilities and municipalities. We are excited by the approach we have developed to this problem, which will provide quiet, clean, modular solutions that take the stress off these field-deployed transformers. This is exactly the space where our technology excels. As we discussed earlier, tariffs created meaningful headwinds during the year and had a negative financial impact. However, they forced us to bend, not break. In many ways, they accelerated improvements we may not have otherwise pursued as quickly. We challenged assumptions and reexamined portions of our supply chain and sourcing strategy. This ultimately led us to identify and secure additional suppliers that offered equal or better quality at lower landed costs. Today, we have greater supply diversity. By establishing secondary and tertiary sources of supply, we not only reduce component costs, we also harden business continuity, improve supply chain resilience, and enhanced our ability to scale production as demand grows. What began as a challenge ultimately became an opportunity to make Capstone a stronger company. Moving to slide seven. I want to update you on our partnership with Monarch. In addition to strengthening our balance sheet and simplifying our capital structure, the Monarch investment brings an experienced capital partner with relevant relationships across power, infrastructure, and data center markets. We are working closely with Monarch as we evaluate opportunities where Capstone's technology and energy as a service capabilities can address the power constraints facing mission critical customers. This partnership gives us tremendous speed to market and more importantly, strengthens our ability to address the larger systemic challenges facing the data center industry. Turning to our DFMA case study, let's move on to slide eight. I want to walk through a specific example of how our Design for Manufacturing and Assembly initiative is translating into real margin improvement. The microturbine engine module frame, or MEM frame, on our C200, the structural component that cradles the engine and enables fast, efficient removal from the enclosure, is a component our team identified as over-engineered relative to what was actually needed to meet our performance and serviceability standards. The DFMA team redesigned the component, preserving full performance, reliability, and serviceability, while reducing the cost by almost two-thirds. Multiplied across the five-bay configuration of our C1000 platform, that's a meaningful reduction per unit. We plan to cut this new MEM frame into production in the next two months. This is a tangible example of how DFMA supports gross margin improvement, reinforces product reliability, and positions us to scale more efficiently as volumes grow. Now, I will turn the call over to Candice Graves, our Chief Accounting Officer, for a detailed review of our Q4 and full fiscal year financial performance.