Karman Holdings Inc.

to Stephen Gitlin, Vice President of Investor Relations. You may begin.

Good afternoon. This is Stephen Gitlin, Vice President of Investor Relations for Carmen. Before we begin, please note that on this call, certain information presented contains forward-looking statements. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and may contain words such as believe, anticipate, expect, estimate, intend, project, plan, or words or phrases with similar meaning. Forward-looking statements are based on current expectations, forecasts, and assumptions that involve risks and uncertainties, including but not limited to economic, competitive, governmental, and technological factors outside of our control that may cause our business strategy or actual results to differ materially from the forward-looking statement. All forward-looking statements should be considered in conjunction with the forward-looking statements in our earnings release. Future company updates will be available via press releases. For further information on these risks, we encourage you to review the risk factors discussed in Carmen's periodic reports on Form 10-K and Form 10-Q filed with the SEC and the Form 8-K filed today with the SEC, along with the associated earnings release and the safe harbor statement contained therein. This afternoon, we also filed our earnings release and posted an earnings presentation to our website at carmen-sd.com in the news and events section. The content of this conference call contains time-sensitive information that is accurate only as of today, May 13, 2025. The company undertakes no obligation to make any revision to any forward-looking statements contained in our remarks today or to update them to reflect the events or circumstances occurring after this conference call. I'd also like to note that, unless otherwise stated, all numbers we will be discussing today are GAAP. Our press release contains a reconciliation of any non-GAAP financial measure to the most comparable GAAP measure. Joining me today from Carmen are Chief Executive Officer, Mr. Tony Koblinski, Chief Financial Officer, Mr. Mike Willis, and Chief Operating Officer, Mr. Jonathan Boatwine. Now I would like to turn the call over to Tony. Thank you, Steve. On today's call, I will begin by summarizing our progress and strong performance in the first quarter before Mike provides an overview of our financial results. Jonathan will then provide an update on our end markets and our strong position with respect to the emerging US Department of Defense budget and the administration's trade policies. I will then update you on our outlook before we take your questions. Let's begin with a quick reminder. of the progress we have accomplished in a very short time, summarized on slide four of our earnings presentation. Only three months ago, we successfully completed our IPO. Since then, we reported record 2024 financial results, we refinanced our debt, and we acquired MTI, adding additional proprietary capabilities. Our strong momentum is also illustrated by our record first quarter financial results, summarized on slide five. We generated record quarterly revenue of 100 million and gross profit of 39.5 million. We produced record quarterly adjusted EBITDA of 30 million and fully diluted adjusted earnings per share of 5 cents. We achieved a record funded backlog of 636 million at the end of first quarter. And since the end of first quarter, We've increased our full year 2025 revenue visibility to approximately 95% as of the end of April. These strong results demonstrate continued momentum and effective execution. Our business model continues to create the basis for profitable growth and shareholder value. Now I'll turn the call over to Mike for a review of our first quarter financial results. Mike?

Thank you, Tony. Our strong execution in the quarter is reflected in record revenue of $100.1 million, a year-over-year increase of 20.6%. This is driven by double-digit revenue growth in all three of our end markets, shown on slide number six. Revenue in hypersonics and strategic missile defense grew from $24.8 million to $30.1 million, an increase of 21.1%. Tactical missiles and integrated defense systems revenue grew from 27.9 million to 36.2 million, an increase of 29.6%. And finally, space and launch revenue grew from 30.3 million to 33.8 million, an increase of 12%. The highly diverse nature of our customer and program portfolio means that from quarter to quarter, our end markets may not grow at the same rate. However, on an annual basis, we expect our commercially-focused space and launch market to represent approximately one-third of our total revenue, and our two defense-oriented markets to represent the remaining two-thirds. Year-over-year, first-quarter revenue growth resulted from growth in a certain number of our programs, such as GMLRS and NGI, partially offset by declines in others, such as SLS. Moving down to P&L, shown on slide number seven, Gross margin expanded by 450 basis points year-over-year to 39.4%, driven by operating leverage and efficiency gains. Importantly, adjusted EBITDA rose 25% from $24.3 million to $30.3 million in the first quarter of 2025. This represents a 30% adjusted EBITDA margin and roughly 100 basis points of margin expansion over Q1 2024. Fully diluted adjusted EPS increased 67% year-over-year from $0.03 to $0.05 in the quarter. But for approximately $8.9 in share-based compensation expense triggered by our successful February IPO, we would have produced record quarterly net income. These were for pre-IPO shares and therefore have no dilutive effect. These expenses were identified in our 10-K filing and were the primary driver of increased general and administrative expenses. decreased net operating income, and a net loss in the quarter. Healthy bookings in the first quarter boosted our funded backlog to $636 million as of March 31st, 2025. First quarter revenue and growth in our funded backlog increased our 2025 revenue visibility to 95% to the midpoint of our guidance range as of the end of April. That leaves roughly 5% or about $29 million left to book and convert to revenue this year. We expect to secure the remaining bookings from orders associated with existing programs by the end of the current quarter. Turning now to the balance sheet as of March 31st of 2025, we had $113.7 million in cash and cash equivalents, up from $11.5 million from year-end 2024. Cash and cash equivalents increased as a result of the proceeds from our February 2025 IPO, a portion of which were used to pay off our previous $25 million revolving credit facility and our IPO expenses. We strengthened our balance sheet in early April by successfully refinancing our existing credit facilities with a new term loan B and revolving credit facility. These new facilities reduced our net interest rate and extended maturities to April 2032 and April 2030, respectively. Finally, for modeling purposes, In 2025, we continue to expect a statutory tax rate of 24%, and we expect CapEx investments to total approximately 4% of revenue. These CapEx investments support equipment and facility improvements, such as our new clean room in Mukilteo, Washington, and our new facility in Decatur, Alabama. Investments like these expand our capacity and capabilities to drive growth and shareholder value. Now, I'd like to turn the call over to Jonathan to discuss our end markets and our positioning relative to federal budgets and policies.