Innovative Aerosystems, Inc.

Good day and welcome to the Innovative Aerosystems first quarter fiscal 2026 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. please note this event is being recorded. I would now like to turn the conference over to Paul Bartolai, partner at Vallum Advisors. Please go ahead.

Thank you. Good morning, everyone, and welcome to Innovative AeroSystems' first quarter fiscal 2026 results conference call. Leading the call today are our CEO, Sheram Ashkapur, and CFO, Jeff DiGiovanni. This morning, we issued a press release detailing our fiscal 2026 first quarter operational and financial results. This release is publicly available in the Investors Relations section of our corporate website at www.iascorp.com. I would like to remind you that management's commentary and responses to questions on today's conference call may include forward-looking statements, which by their nature are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results could differ materially. For a discussion of some of the factors that could cause actual results to differ, please refer to the risk factor section of our latest reports filed with the SEC. Additionally, please note that you can find reconciliations of all historical non-GAAP financial measures mentioned on this call in the press release issued this morning. Today's call will begin with prepared remarks from SHRM who will provide a review of our recent business performance and an update on our strategic framework. followed by a financial update from Jeff. At the conclusion of these prepared remarks, we will open the line for your questions. With that, I'll turn the call over to Sharon.

Thank you, Paul, and good morning to everybody joining us on the call today. I'm pleased to report that we delivered a strong start to our fiscal year 2026, one driven by organic growth across revenue, net income, adjusted EBITDA, as well as exceptional free cash flow generation. First quarter revenue grew 37% versus the prior year period on increased commercial aftermarket demand and service activity, while adjusted EBITDA grew 141%, reflecting a more favorable revenue mix and improved operating leverage consistent with our strategic focus. We continued to make important progress under our IANext long-term valuation creation strategy during the first quarter, keeping us on track to deliver both on our near-term and long-term financial targets. As a reminder, our IANext strategy prioritizes profitable growth, sustained operational excellence, and disciplined capital allocation as key drivers of long-term value creation. This strategy forms the foundation that will enable us to deliver on our long-term target of 250 million in revenue and adjusted EBITDA margins between 25 to 30% through a combination of both organic and inorganic growth. During the first quarter, we completed all required recertification and resumed full-scale production of the digital flight control computer in support of the F-16 program at our external facility as planned. The recertification and resumption of production of the improved programmable display generator is planned for the current quarter, and we will continue to be optimistic regarding the long-term growth potential of this platform. The F-16 remains a critical asset for our military as well as many of our allies across the world, and we remain encouraged by the long runway of growth we see ahead. In addition, we still expect to begin insourcing the F-16 product line subassemblies in late 2026. This initiative should contribute to improved and more consistent margins related to these products moving forward. While we are excited by the opportunity for our F-16 platform, we also remain encouraged by the growth potential for a broader defense business. We have made significant investments to position our business as a mission-critical partner with the defense supply chain and believe that our investments, certifications, and relationships together with a strong backdrop for defense spending stand to benefit IA given our deep inside the cockpit expertise. At the product level, we continue to advance our progress towards autonomous flight through our next generation flight deck Liberty with our UMS. Recall that the UMS is an advanced aircraft systems management platform designed to monitor and control multiple aircraft subsystems from flight controls to environmental and power systems in a unified intelligent architecture. We have completed test flights with our new UMS platform on the Pilatus PC24 and more recently have begun unit production. We expect to begin delivering the new version to Pilatus in mid-2026. As it relates to inorganic growth, we remain focused on pursuing complementary, accretive acquisitions that expand our capabilities, increase our content per aircraft, position us to realize significant recurring revenue streams, and that increase our access to proprietary IP and technologies that enhance our unique value proposition. Historically, For those less familiar, our approach has centered on an acquiring aerospace and defense avionics product lines or businesses with significant aftermarket potential. As we enter 2026, our acquisition pipeline has become increasingly active and we continue to evaluate a number of potential opportunities. We remain disciplined in our approach focusing on transactions that advance our strategic objectives and we look forward to updating you on our progress. In summary, fiscal 2026 is off to a strong start with solid operating results and continued progress across our strategic initiatives. We remain committed to our long-term strategy with an ongoing focus on delivering value for our shareholders, much as we have in the recent years. With that, I'll turn the call over, Jeff, for his prepared remarks.