Financial Data and Key Metrics Changes - Total adjusted sales grew 13% year-over-year to $740 million, with organic sales growth at 17% when excluding landing gear sales from the previous year [10] - Adjusted EBITDA increased 18% to $86.7 million, with adjusted EBITDA margins rising to 11.7% from 11.3% [10] - Adjusted diluted EPS rose 27% to $1.08 from $0.85 in the same quarter last year [11] Business Line Data and Key Metrics Changes - Parts supply sales increased 27% to $318 million, with adjusted EBITDA for this segment rising 34% to $43.8 million and adjusted EBITDA margins increasing to 13.8% from 13.1% [11] - Repair and engineering sales decreased 1% to $215 million, but organic sales growth was 8% when excluding the impact of landing gear divestiture [12] - Integrated solutions sales grew 10% year-over-year to $185 million, with adjusted EBITDA of $14.2 million, a 5% increase [14] Market Data and Key Metrics Changes - Adjusted sales growth to government customers increased 21%, while adjusted organic sales to commercial customers rose 15% [10] - Total commercial sales accounted for 71% of total sales, with government sales making up the remaining 29% [10] Company Strategy and Development Direction - The company is focused on driving growth through market share capture and new business, improving margins through cost efficiency, and increasing intellectual property through software investments [6] - The acquisition of Aerostrat is expected to enhance software capabilities and expand the reach of the Trax software solution [9] - The company aims to continue strengthening its offerings with targeted acquisitions to accelerate its strategy [17] Management's Comments on Operating Environment and Future Outlook - Management expects sales growth of 7%-10% for Q2, with organic sales growth for the full fiscal year approaching 10% [16] - The company is encouraged by the additional assets coming to market, which is expected to drive growth in the USM business [31] - Management remains confident in securing volume over time through strong relationships with large airline customers [28] Other Important Information - The company invested over $50 million in inventory to support future growth, particularly in the parts supply segment [15] - Net debt leverage increased slightly from 2.72x to 2.82x due to organic and inorganic investments [14] Q&A Session Summary Question: What is behind the slight uptick in full-year expectations? - Management indicated that parts supply is leading the way with a strong quarter showing 27% organic growth [19] Question: Can you comment on the pipeline for new distribution agreements? - Management noted that the majority of recent wins have been from taking market share, with a different exclusive distribution model resonating well [20][21] Question: Do you still expect to outgrow the market within distribution? - Management confirmed the outlook for distribution remains strong, expecting to continue growing above market rates [25] Question: Can you discuss cross-selling opportunities within repair and engineering? - Management stated they are in the early stages of executing their cross-selling strategy, with a long pipeline of opportunities [26][28] Question: Has the trend in USM sales continued into the current quarter? - Management confirmed a meaningful growth in USM business, driven by a loosening supply of assets [31] Question: What is the margin opportunity for parts supply if more USM comes available? - Management indicated that while USM margins have been depressed, they expect margins to expand as more supply comes to market [32] Question: Is there an agreement with Aerostrat employees to ensure retention? - Management confirmed an earnout agreement for key team members to incentivize their retention [33] Question: What is the company's exposure to engine-related aftermarket services? - Management highlighted significant exposure to the engine market, with 80% of USM parts business being engine-related [42] Question: How far along is Trax in becoming a digital marketplace? - Management stated that investments are being made to leverage Trax's position for offering parts and repair solutions, with announcements expected in the first half of 2026 [44]