Photonics optics is really an enabling technology, if you would. So the power of optics is in what it enables other industries to do.
Right, so you know optics enables your iPhone camera to be a great camera and to be more than just a phone. Optics enable your wireless mouse to work as a pointing device, and so on. So when you think about it, at the end of the day, you always have to understand what value you create, right? Because everything is around that. The value that optics creates is enabling other industries, enabling other applications to do something, either do it completely, which couldn't be done before, or just do it better and faster. And so once you understand where your value is, where you create value for your customers, because that's where you're going to capture value, that's how you're going to generate profit, then you focus on that. And in my world, that tends to be typically around the technology and around sort of enabling to do more things with the same technology.
Hey, I'm Nate Wheeler. I am the host of Manufacturing Insiders podcast. Really want to thank you for joining today. I hope that you learned some really great insights from this manufacturing leader that you're about to hear from. I also hope that you'll go ahead and hit that like button on the video and subscribe to our channel so you can see more of the stuff that comes out as we're continuing to publish content. Every like, every subscribe really helps us get this message out. And the message that we're sharing is really just a message of hope for manufacturers. I understand, I work with you guys every day. I understand how many different obstacles are in your faces from technology to government regulations to competition from foreign and domestic markets and I really want to share strategies with you on how to deal with these issues and I think there's no better way to learn than hearing directly from somebody that solves some of these challenges. Thanks for watching today and look forward to seeing you soon.
So when you came into the company, did you feel like their understanding of that value to the market was misaligned?
Yeah. So LightPath perhaps was very much so. So the reason is not completely just the company. The reason is also a change in the industry. And so optics 20, 30 years ago was a very niche technology. Okay, you didn't see it anywhere where you're seeing it today. I mean a webcam 30 years ago was this probably massive video camera, you know, camcorder or something like that.
And now all of that changed. So along the lines when optics got adopted into more and more industries, the whole supply chain, value chain of the technology changed. And 20 years ago, 30 years ago, LightPath's customers were optics companies, were companies like, if you would, L3 Martin or FLIR or Kodak, you know, companies that optics was a core part of what they do. And so they design the entire systems and all they needed a company like LightPath to do is just make the individual lenses. And that's why, you know, it's not only LightPath, 20 years ago there might have been a thousand companies in the US that were making lenses, you know, might be an exaggeration but hundreds of companies, and now they're handful. So the reason is the more optics got adopted into more places, the more customers wanted a complete solution and not just individual components.
LightPath failed to realize that beforehand, and that's really the change we've been doing. We've been saying okay, we have all this great technology, instead of taking it and just making lenses for someone else to build a camera from, we will build a camera. And if you would, instead of selling glass, we're now selling pixels. We're selling images because we're selling imaging capabilities. So you know, this change where now companies that build drones don't want to build the whole camera systems themselves. They just want to plug it in. You know, companies that integrate optics into a flow cytometer, for example, don't want to design the entire things. They want to buy an optical engine, and so on. So that created the opportunity for LightPath to step up and do that. But again, it goes back to understanding where is the real value. The value of LightPath, the real value of LightPath, wasn't in the technology of making a lens. It was in enabling the end application. And once we started focusing on that, we realized well, we can become much more than just a lens company.
And now, you know, probably more than 50% of our business, we've nearly doubled since then, and more than 50% of our business is systems, is solutions, not the lenses.
When and when did it get to that 50% number?
So we started, so you know, we started the transition five years ago in 2020. Of course, it was during COVID, so that was a whole set by itself of challenges. It took about two years just to clean up operational stuff in the companies. There were a lot of problems globally. There was a lot of waste. We had to really, you know, button things up and sort those out before we can even start going down a path of change.
And about two or three years later we started taking baby steps. We started doing optical assemblies, saying to a customer, okay, you're buying from us five lenses. What are you doing? You're putting them together to make an assembly, a zoom lens. Let us do the assembly for you, or let us design it for you and do it for you. And that got us to probably about 20%. Then we started making cameras, but then to really make big leaps there and for it not to take 10 years to develop an entire portfolio, we started acquisitions. So we acquired Visimid Technologies that does one type of infrared cameras, uncooled. We acquired G5 Infrared that does another type of cameras. Those are cooled cameras for long-range detection. So two very complementary products.
All of them are based on the technology of LightPath, in glass, in optics, in optical assembly. So it's really very synergistic. But instead of developing an entire product line which would take five years plus, you buy it. And that's very natural for a company to do that once you're already set in a strategic direction.
I see. So were those acquisitions, or at least some of those, within the last year or?
Yeah, so Visimid was about two years ago almost to date.
And G5 Infrared was half a year ago.
Okay. Yeah, because I noticed that your capital expenditures were up about what, 34% year-over-year. And I was wondering if that was equipment, part of it was investing in changing the footprint.
So historically the company, when it was a component company, was very focused on low-cost manufacturing and low-cost manufacturing for industrial applications, commercial and industrial. And that naturally led to China. So when I joined five years ago, the vast majority of manufacturing was in China, and China was even 35% of our revenue because we were selling to OEMs, to original equipment manufacturers, that would buy individual lenses from us.
