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Performance was driven by a record quarterly revenue of $224 million, marking the 21st consecutive quarter of year-over-year growth, supported by a 16% increase in commercial aerospace.
The company is successfully shifting its portfolio toward engineered products, which now represent 23% of revenue compared to 15% in 2022, enhancing margin profiles and intellectual property ownership.
Missile franchise revenue grew 68% in the quarter, benefiting from high demand for programs like PAC-3 and Tomahawk as defense primes move toward replenishment cycles.
Gross margin expansion to 28% was attributed to the full realization of $13 million in annual synergies from facility consolidations and strategic value-added pricing initiatives.
Management noted that while commercial aerospace is strong, they are navigating a 'glide path' as internal and external destocking headwinds gradually ease through the end of 2026.
Operational efficiency was maintained by pulling forward some production into the first half to level-load facilities ahead of significant delivery commitments scheduled for the second half.
Management reiterated full-year 2026 revenue growth guidance of mid-to-high single digits, though second-half growth is expected to be more 'muted' at low-to-mid single digits due to the Q2 production pull-forward.
The company remains on track to reach its 18% adjusted EBITDA margin goal by 2027, supported by continued mix shift and operational leverage.
Significant growth is anticipated from 7-year missile framework agreements with defense primes, with production for programs like SM-3 and SM-6 expected to grow 'several fold' over the next few years.
Commercial aerospace growth is expected to accelerate into 2027 as Boeing targets production rate increases and the MAX-7 and MAX-10 certifications provide additional tailwinds.
The company plans to unveil 'Vision 2032' in September 2026, which will outline the strategic roadmap for the next six years beyond the current 2027 plan.
GAAP EPS benefited from a one-time clawback of executive compensation related to a previously published financial restatement.
Remaining Performance Obligations (RPO) reached a record $1.16 billion, providing high visibility with a trailing 12-month book-to-bill ratio of 1.3x.
Management identified temporary weakness in radar, space, and naval revenues due to the timing of orders, though they view these as short-term fluctuations.