Core Insights - The company reported a significant improvement in its fourth-quarter gross margin, which increased by 190 basis points to 28.4%, with gross profit nearing $51.5 million [1] - Consolidated revenue for the fourth quarter grew by 5.1% year-over-year, driven by strong performance in aerospace and defense, which is considered the company's long-term growth engine [3][4] - The company achieved record profitability in the fourth quarter, with Adjusted EBITDA reaching $24.8 million, an 18.2% increase year-over-year, and a margin of 13.7% [1][6] Financial Performance - For the full year 2025, consolidated revenue was reported at $724 million, slightly up year-over-year, excluding laboratory closures, with notable growth in aerospace and defense, industrials, power generation, and infrastructure [7] - Full-year gross profit was approximately $205 million, reflecting a 6.4% increase from the previous year, with gross margin improving to 28.4% from 26.3% [8] - The company recorded GAAP net income of $16.8 million for the full year, down from $19.0 million in the prior year, primarily due to higher reorganization costs [13] Cash Flow and Balance Sheet - Full-year free cash flow decreased to $3.8 million, attributed to elevated days sales outstanding, restructuring activities, and increased capital expenditures [5][15] - Accounts receivable rose to $154.7 million at the end of 2025, with a focus on reducing this figure in 2026 [16] - The company plans to prioritize debt reduction, targeting approximately $20 million of debt paydown in 2026 to achieve a leverage ratio of around 2.0 times [18] Strategic Initiatives - The company is implementing a "Vision 2030" strategy, focusing on expanding data solutions and diversifying beyond core markets, with a 20.7% growth in Plant Condition Management Software in the fourth quarter [19] - Infrastructure revenue increased by 13.2% for the full year, supported by new contract wins and ongoing projects [20] - Management expects revenue for 2026 to be between $730 million and $750 million, with Adjusted EBITDA projected at $91 million to $93 million, while maintaining a long-term target of 5% CAGR through 2030 [21][24] Market Outlook - The company has good visibility into aerospace and defense demand but acknowledges capacity constraints that will be addressed through investments [22] - There is cautious sentiment in the oil and gas sector, with expectations that 2026 may not see as robust activity as 2025 [23] - The strategic plan envisions achieving a 15% EBITDA margin in the long term [24]