Karman Holdings Inc.

Hello, everyone. Thank you for joining us, and welcome to the Carmen Space and Defense First Quarter Fiscal Year 2026 Earnings Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Stephen Gitlin, Senior Vice President of Investor Relations and Corporate Communications. Stephen, please go ahead.

Good afternoon, and thank you for joining Common Space and Defense's first quarter fiscal 2026 earnings conference call. I'm Stephen Gitlin, Senior Vice President of Investor Relations and Corporate Communications, and I'm pleased to welcome you today. Joining me on today's call are John Rambo, our Chief Executive Officer, Mike Willis, our Chief Financial Officer, and Jonathan Beaudoin, our Chief Operating Officer. Before we begin, please note that on this call, certain information presented contains forward-looking statements that are based on current expectations, forecasts, and assumptions. and that involve risks and uncertainties. These are described on page two of the earnings presentation we posted to our website this afternoon, and in detail in Carmen's reports filed with the SEC and the Form 8K filed today with the SEC. I'd also like to note that we will discuss a number of non-GAAP financial measures today that we believe can be useful in evaluating our performance. Such non-GAAP financial measures should not be considered in isolation or a substitute for results prepared in accordance with GAAP. Our earnings release, which we filed today, can also be found under the heading news and events on the investor section of our company website and contains a reconciliation of any non-GAAP financial measure to the most comparable GAAP measure. The content of this conference call contains time-sensitive information that is accurate only as of today, May 12, 2026. 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. Now, I would like to turn the call over to John Ranto. Thank you, Steve, and good afternoon. Today, I'll begin by summarizing our record first quarter performance. Then, Mike Willis will review our financials, followed by Jonathan Beaudoin, who will discuss the demand environment and our capacity expansion initiatives. I'll wrap up with our outlook before we take your questions. Before we review our results, I want to acknowledge the service and sacrifice of the men and women who protect our nation, both at home and abroad, especially during these challenging times. Allow me to also recognize the achievements of our astronaut corps and the dedicated teams at NASA and throughout the space supply chain. At Karman, we're proud to serve these individuals every day with the critical systems that help protect and propel them to new heights. It's been an exciting and rewarding six weeks since I joined Karman, In that time, I visited six of our sites across the country, from California to Pennsylvania, from Mocatillo to Mississippi. I've gotten to know the people and the technology that have made Carmen successful. I've also spoken with customers who consistently praise the value Carmen delivers. I've had the pleasure of meeting many investors, some already shareholders, and others who may join us in the future. Your feedback has been constructive and is always appreciated. Two questions I'm often asked are, number one, what prompted me, after 30 years working at a defense prime, to join Carmen? And two, what do I plan to do differently here? To the first, I spent 30 years in defense. Yet when I began studying Carmen, I saw something I hadn't seen before. The company's growth trajectory, product line pedigree, and unique merchant supply position as a provider to the primes across defense, space, and launch made this an opportunity I couldn't pass up. To the second, I believe Carmen's strategy is working well, so I don't see a need for substantial changes in strategy or the trajectory of the company. My focus is on the continued strength of relationships with our customers and our investors and on meeting our commitments to our customers with on-time product and system delivery and to our shareholders via continued organic and inorganic growth and bottom-line returns. Finally, I'm focused on the continued optimization and integration of capabilities across the company to unlock the full value of the Carmen Enterprise. As we come through the balance of 2026, I look forward to ongoing engagement with employees, customers, investors, and analysts, and to your questions and feedback. Now let's turn to our results. Our team delivered another set of record results in the first quarter. As shown on page four of our earnings presentation, highlights include record quarterly revenue of $151 million with year-over-year growth across all three end markets and the addition of our new maritime defense systems end market. Record quarterly gross profit of $64 million. Record quarterly adjusted EBITDA of $45 million. all-time high backlog of more than a billion dollars. And given our strong performance and high visibility, we are now raising our full-year revenue and adjusted EBITDA guidance, as I will detail shortly. Our seaming composites and MSC acquisition, which closed in January, contributed two months of revenue this quarter. This represented about half of our year-over-year quarterly revenue growth. Just two weeks ago, I visited our sites in Horsham, PA, in Gulfport, Mississippi, and I was impressed by the depth of capabilities, breadth of solutions, and the energy of our team, an impression that's been consistent across every site I've visited. Some of the sites I visited produced critical components for the space industry. One of the most exciting recent developments was a successful Artemis II moon mission in April. Carmen supplied key subsystems for the SOS launch vehicle, and the Orion capsule. Our space and launch market produced 29.5% year-over-year revenue growth, underscoring our key position in the space ecosystem and is highlighted with our inclusion in Morgan Stanley's recent space trade list. The Artemis II success and the restructuring of the Artemis program with annual missions now planned through and beyond 2029 have increased both customer engagement and contracting momentum. Carmen has a long proven track record in space, and we look forward to continuing to support all major U.S. launch providers, both established and emerging, as well as our integration of a lunar lander for NASA's CLPS program. We're off to a strong start in 2026, and we believe market dynamics point to continued opportunity through the end of the decade and beyond. With that, I'll turn it over to Mike for a detailed financial review.

Thank you, John. A record first quarter demonstrates Carmen's continued strength and momentum, as shown on page 5. Revenue of $151 million was up 51% from Q1 fiscal 2025. Gross profit of $64 million grew 62%, with a gross margin of 42%. Net income was $8 million, compared to a $5 million loss last year. Adjusted EBITDA reached $45 million, up nearly 50% year-over-year, as compared to Q1 fiscal year 2025. Adjusted EPS increased more than 100% to 11 cents per diluted share from 5 cents. And backlog grew 61% year-over-year to more than $1 billion. Each of our three legacy markets produced strong year-over-year growth in Q1, as shown on page 6. Hypersonics and strategic missile defense revenue grew 19% to $36 million, driven by increases in strategic programs. Space and launch revenue grew 29% to $44.9 million, driven by the timing and orders for critical content supporting both legacy and emerging launch providers and spacecraft. Tactical missiles and integrated defense systems revenue rose 25% to $45 million, primarily due to demand associated with the continued adoption of advanced drone and loader ammunition systems and an increase in production output for GMLRS. Maritime defense systems contributed $26 million, primarily from ongoing submarine and LCAP programs, among others. First quarter revenue mix was space and launch, 29%, hypersonics and SMD, 24%, tactical missiles and IDS, 30%, and maritime defense systems, 17%. Turning to the balance sheet, we continue to prioritize growth as we consider capital allocation decisions. We ended the quarter of $74 million in cash and cash equivalents, up $40 million from year-end 25. CapEx totaled $7 million supporting growth in nozzle capacity, UAS launchers, launch vehicles, and spacecraft manufacturing capabilities. Total debt stands at $758 million with an interest rate of SOPR plus 2.75%. We expect leverage to decline to approximately three times adjusted EBITDA by the end of 2026. our untaxed revolving credit facility increased from $50 million to $159 million, providing further flexibility. We expect a statutory tax rate of 26.5% for fiscal year 26 and capex at roughly 5% of revenue, or approximately $36 million. We expect that DNA and interest expense will moderately increase due to the acquisition of Siemens and MSC. Regarding margins, we continue to focus on operational efficiency and scale, which we expect will support strong margins as we grow. Now, I'll turn it over to Jonathan for an update on market demand and capacity expansion.