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Operator
Good afternoon, and thank you for joining us. With me today is our Chief Executive Officer, Dave Robbins.
Dave Robbins
Our call is being recorded and will be available for playback, the details of which are in our press release issued yesterday. The purpose of this call is to provide an update on OmniLight's financial performance and operations as we filed our first quarter 2024 results yesterday, May 16th. After our prepared remarks, we will open up the line for Q&A. If you have not received a copy of our press release, which was issued yesterday, You may find it on our website, www.omni-light.com, or email at d.robbins at omni-light.com to request a copy. Before we get started, I would like to remind you that today's discussion will or may include forward-looking statements, including information regarding OmniLight's performance based on our views of the company's business, The environments in which we operate are future plans, objectives, business prospects, and anticipated financial performance. These forward-looking statements are subject to future risk and uncertainties that could cause an actual results or performance to differ materially. We're also mindful of the risks and impacts and changes in the health of the general economy, including the effects of the current U.S. financial market, U.S. and global commercial aerospace markets, the U.S. defense, and budgets. All forward-looking statements should be considered in conjunction with the cautionary statements contained in our press release and the risk factors included in OmniLite CDAR filings. The company disclaims any obligation to update any forward-looking statements that may be discussed during this call. I'd also like to mention that in addition to reporting financial results in accordance with International Financial Reporting Standards, or IFRS, during our call we may also discuss or reference some non-IFRS financial measures, including adjusted EBITDA, performer adjusted EBITDA, and free cash flow. A reconciliation of these non-IFSR metrics, if applicable, is included in our applicable CDAR filings and press releases. Lastly, unless noted, all reference or discussion of our financial results or metrics are in U.S. dollars. I would like to now turn the call over to Dave. Dave?
Dave
Thanks, Amy. Good afternoon, everyone, and thanks for joining us. I'd like to make a few comments about our first quarter 2024 performance, followed by comments on our current business. First quarter 2024 revenue was a record-breaking $4.3 million. which marks an increase of 57% from first quarter fiscal year 2023, and a 29% sequential increase over fourth quarter of 2023. Adjusted EBITDA for the first quarter 2024 was $884,000, the result of operating leveraged on increased revenue, a favorable mix in revenue profile, and a continued improvement in operating margin in our casting business. Revenue increase was a combination of increased production rate demand on mature component content products and new products engineered in 2023 that started into initial production in 2024. Bookings for the first quarter were 3.7 million, which keeps backlog at a healthy 6.5 million as we go into the second quarter. Generally, our business conversion profile is 80 to 90% of our backlog converts to revenue in two to two and a half quarters. And 20% to 30% of bookings in a quarter convert to revenue in that quarter. This dynamic reflects a supply chain with a mixed climate of rush demand or spot buy and planned buying. The backdrop for this is a landscape of large footprint manufacturers struggling to produce product because of raw material supply disruptions diminished skilled labor resources, and increased regulatory environment, coupled with onshoring efforts for reliable suppliers, has created an opportunity for small, agile, qualified manufacturers to gain market share. This is especially prevalent for aerospace and defense-related specialty components of which OmniLite has capability to engineer and produce. In general, this is and what has been the thesis behind what is driving our revenue growth and profit profile. Following on from remarks from Q4 2023, newly designed high temperature FASFA components and missile sensor electronics are playing a large role in the revenue growth in 2024. With that, I'd like to turn the call over to Amy. Amy?
Dave Robbins
Thanks, Dave. Dave addressed our revenue and outlook, so I will make a few comments regarding our cash. adjusted free cash flow, which is defined as cash flow from operations minus capital expenditure, was a source of approximately $112,000. We did use approximately $148,000 for CapEx purchases for improvements in our manufacturing process throughout the quarter. We do expect to see a better source of cash as we go through the year as receivables turn into cash. We did finish the quarter at $1.1 million in cash with no debt, which is consistent with how we ended 2023, and we continue to maintain a strong cash balance. This does complete our prepared remarks. We would like to now open up the call for questions.
Operator
At this time, we will conduct the question and answer session. If you would like to ask a question, please press star, then the number one on your telephone keypad now, and you will be placed in the queue in the order received. Once again, to ask a question, press star, then the number one on your telephone keypad now. Your first question comes from Emmanuel Kramer, an investor. Your line is open.
Emmanuel Kramer
Thanks. Dave, Navy for the quarter. I just want to know, reading the news today, Every day, some problems with Boeing and penalties and fines and everything else. How does that affect you in the past and the future? And also, the cost of raw materials. You see copper prices going up through the roof. How would that affect you on your margins?
Dave
So with respect to issues at Boeing, we're on many platforms. We're on a lot of the new advanced aircraft with some engineered fasteners. We're seeing that even though there's problems, the build rates are still in growth mode, irrespective of those issues you mentioned. And we're seeing it real time with continued expansion across, and we're not on any one, we don't have high concentration on any one platform. So we're still seeing double-digit growth across that. And with respect to product pricing with raw material, we have, we've talked about it in the past few quarters and continue to We're passing along price increases to our customer as we see raw materials. They've been very volatile. So we've been able to pass on the majority of those costs, in most cases, to our customers. The parts are needed. In many cases, that's my comment about spot buy. is that there's shortages of components in many cases. And, you know, we have the ability to pass along those cost increases of raw materials to the customer.
Operator
Thank you. Once again, to ask a question, please press star, then the number one on your telephone keypad now. Your next question comes from Frank Wineski, an investor. Your line is open.
Frank Wineski
Hey, Dave, Amy. A couple quick ones. I was kind of astounded at your SG&A expense. It went from 17.5% of sales to 7.5%, quarter to quarter. A decline of almost $150,000. Any detail behind that? Is that a... Is that a projected run rate for the rest of the year, or was there something extraordinary there, either in last year or this year, that made that decline so much?
Dave Robbins
Yeah, so in terms of, you know, the year-over-year comparison, there were some costs in last year that we do not have currently in this year that probably accounted for about, you know, $50,000 to $75,000 of that change. And then the remaining of that is what, you know, we will continue to see going forward. So, you know, we do project to be, you know, around the 10, between 10 and 15% SG&A rate. It was a little bit less for this quarter just due to some adjustments that we had to make. But we do, you know, anticipate that to be significantly lower than it was, you know, early last year.
Frank Wineski
Yeah, that's great performance. Thanks. The next question is on the tax rate. It looks like current and deferred, like 38% tax rate. Is that what you're expecting for the remainder of the year?
Dave Robbins
Yeah, as we get close to filing our taxes for 2023, we will look at kind of what we've got out there for 2024 to adjust potentially as needed. You know, the other piece that pulls in is that typically we're only putting out the accrual that's there on the US book. So it really comes down to what's there for the US income versus the Canadian income. So it does appear sometimes like it's high, but it is potentially because of that difference. But it is something that we visit on a quarterly basis and are in constant communication with our tax experts as well.
Frank Wineski
Okay, so for the remainder of the year, for modeling, a 35% to 40% tax rate should be what I put in?
Dave Robbins
Yeah, I would do, you know, between 30% and 35%, I think would be the going rate going forward.
Frank Wineski
Okay. Now, your comprehensive income, you had obviously a $1.3 million gain from CalNano. Any thoughts? That position is pretty sizable now on your balance sheet. Any thoughts on what you might, how you might be addressing that going forward?
Dave Robbins
Dave?
Dave
So, you know, in, you know, I guess I want to understand the question, you know, are you, it is what it is, but you're talking about just the CalNano investment as a whole? We're still evaluating the many opportunities that this presents for a positive return to OmniLite shareholders over time. The good news is that they're doing well and it's being reflected, and we'll look to have a positive impact on OmniLite shareholders.
Frank Wineski
So, you know, obviously their debt to you is money good now, correct?
Dave
Yeah, they're current and they're paying. Yeah, that's, you know, of course, with the reversal last quarter, that sort of reflected the currency that it was not a loan that was impaired in any way.
Frank Wineski
Yep. Yep. And one thing, you mentioned part of the strength has come from newly developed products that are now going out in production. But in your press release, you also say going ahead, you expect the conversion of new product orders into initial phase of production. Could you explain what that means? New product orders are one thing, and then an initial phase of production. What does that mean? Are they ramping up quickly? Is that what that implies?
Dave
So going back to my Q4 or Q1 of early 2023, I mentioned that 10% of our revenue increase at that time was on new product development. And that the implication can be that it has a 2X to 3X when it gets from an engineering order to initial production or production order. It can have a 2X to 3X multiplier on it. And it converts in 12 to, you know, typically anywhere from 9 to more like 12 to 18 months, it'll start to convert at that increased rate. So in a sense, that's exactly what happened. Those bookings in early 2023 that roughly were 10% of the makeup contributed to our Q1 revenue. And it showed up a little bit in strong bookings in Q4 and then backlog. So that's sort of the math there. So, you know, when they start to initial production, it doesn't necessarily – I mean, it can have varied rates. You know, that's why I mentioned a 2X to 3X because it might start at 2X and then progress to 3X. A lot of these programs are very long-run programs. You get on the program. The benefit of being an aerospace and defense is it's a bit of an annuity. You get on these programs and – You know, they have their ups and downs. It's not constant production, and their rates can vary, but, you know, you can enjoy that year over year. So that's really all that comment is meant to say is that we continue to have new product starts, which can drive future growth.
Frank Wineski
And those new products, would they be on new platforms or additional products on existing platforms typically?
Dave
Most of the more predominantly same platform, but there are some new platforms happening, you know, especially on the electronic side, there's some new platforms that are happening. So it's a combination.
Frank Wineski
Good. Okay. Thank you. Next quarter.
Operator
At this time, there appear to be no further questions. I'd like to turn the call back to management for any further remarks.
Dave Robbins
We would like to just thank you again for joining us today, and we look forward to talking with everyone as we release the Q2 results here shortly. Thank you.
Operator
Thank you. This concludes today's first quarter 2024 financial results OmniLight Industries conference call. Thank you for attending. Have a wonderful rest of your day.
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