May 5th, 2026

The call presented a strong financial quarter with clear operational momentum: revenue and profitability grew meaningfully (revenue +6%, adjusted EBITDA +28%, margin +210 bps), backlog hit record levels, and management raised full-year guidance across revenue, adjusted EBITDA and adjusted EPS. Positives from program execution, favorable material timing, contract wins (including a $533M DAIRCM IDIQ) and product innovation outweigh the main negatives—seasonal free cash outflow, short-term variability tied to timing of receipts and program execution, and budgetary uncertainty from Congress. Management is investing to capture demand, which pressures near-term cash conversion but supports growth and margin expansion.

Company Guidance

The company raised full‑year 2026 guidance to revenue of $3.900–$3.975 billion (implying ~7%–9% organic growth) and adjusted EBITDA of $515–$530 million, with adjusted diluted EPS now guided to $1.26–$1.30 (tax rate assumption 18.5% and diluted share count 269 million); management also targets free cash flow of roughly 75% of adjusted net earnings and expects capex to ramp to about 5% of sales for the year. This follows a strong Q1: revenue $846 million (+6% YoY), adjusted EBITDA $105 million (+28% YoY) with a 12.4% margin (+210 bps), net earnings $62 million (diluted EPS $0.23) and adjusted net earnings $69 million (adjusted diluted EPS $0.26). Segment performance included ASC adjusted EBITDA up 48% (+290 bps margin expansion) and IMS adjusted EBITDA up 8% (IMS margin ~14.6%, +90 bps); funded backlog hit company records and book‑to‑bill remained ≥1x for the 17th consecutive quarter. For Q2 management expects revenue around $900 million, adjusted EBITDA margin in the mid‑12% range and to be modestly free‑cash‑flow positive; the full‑year guide assumes improved margins, lower net interest expense and slightly higher working capital investment to fund growth.