[Music] Hello. This is the story of how I crossed the Atlantic Ocean on a 600 BC Phoenician ship replica. Imagine this.It's 2:00 a. m. We're in the middle of the Atlantic on that wooden boat.I'm clinging onto a rope, vomiting overboard, thinking, "What the hell am I doing here? Let me take you back." In most history curricula, we study the Greeks, the Romans, the Pharaohs, but not the people who connected them. We're taught about Caesar and Columbus, but the Phoenetians, despite their significant contributi ...

US-Australia Trade Relations - A meeting regarding trade between the US and Australia is unlikely to result in significant tariff changes [1] - The US has concerns regarding Australia's biosecurity measures, particularly related to beef imports [4] - Australia has maintained a trade surplus with the US since 1952 [4] - While Australia only exports about 4% of its total goods to the US, the US is the biggest investor in Australia and the biggest destination for Australian capital, with approximately 14 trillion in each direction [9][10] Beef Trade Dispute - The US seeks assurance that beef exported to Australia is born and bred in the US, not from cattle crossing the borders from Mexico and Canada [6] - Australia is standing firm on its biosecurity measures regarding beef imports [7] - The US President is concerned that Australia hasn't allowed one American Big Mac into the country [6] Geopolitical and Economic Concerns - Actions in the Middle East are currently considered more important than trade matters with Australia [3] - The slowdown of the Chinese economy is a significant concern for Australian companies [8] - China's potential limitations on exports of critical minerals needed in batteries could impact Australian companies [9] Shipbuilding and AUKUS - The US is prioritizing increasing its shipbuilding capacity [12] - An Australian company, Austal, operating in Alabama, has built approximately a third of the ships in the US Navy [13] - Australia has made an 800 million AUD down payment on the 3 billion AUD investment in the subs uplift [15] - There is no expectation that AUKUS will be cancelled, as it is in America's strategic and economic interests [15]

Financial Data and Key Metrics Changes - The company reported a revenue growth of 16% in Q1, significantly above expectations, primarily due to favorable timing of material receipts [22][24] - Adjusted EBITDA for the quarter was $82 million, representing a 17% growth year-over-year, with an adjusted EBITDA margin of 10.3%, reflecting a slight year-over-year margin expansion of 10 basis points [24][26] - First quarter net earnings were $50 million, with diluted EPS of $0.19, marking a 7273% increase, while adjusted net earnings were $54 million, with adjusted diluted EPS of $0.20, up 42% [26][30] Business Line Data and Key Metrics Changes - The Advanced Sensing and Computing (ASC) segment saw a revenue growth of 18%, while the Integrated Mission Systems (IMS) segment's revenue increased by 11% [23][24] - ASC adjusted EBITDA increased by 2%, but the margin declined by 130 basis points due to negative contract adjustments and increased costs from a sole source supplier [25][26] - IMS adjusted EBITDA rose by 38%, with margin expansion of 260 basis points, driven by favorable contract adjustments and increased volume from the Columbia Class program [25][26] Market Data and Key Metrics Changes - The company secured nearly $1 billion in bookings during the quarter, resulting in a book-to-bill ratio of 1.2, marking the thirteenth consecutive quarter with a book-to-bill above one [6][20] - The backlog increased to $8.6 billion, reflecting growth on both a year-over-year and sequential basis [7][20] - Domestic growth was highlighted, while international growth faced some headwinds due to timing of deliveries [35][36] Company Strategy and Development Direction - The company is focused on enhancing its role in national defense initiatives, particularly in layered air defense, counter UAS, and shipbuilding [11][12] - The company is investing in its Charleston facility to support shipbuilding and is exploring opportunities in electric propulsion and unmanned naval platforms [17][18] - The company is also advancing its AI capabilities to enhance threat detection and situational awareness in combat vehicles [18][19] Management's Comments on Operating Environment and Future Outlook - Management noted a dynamic operating environment but expressed confidence in maintaining a book-to-bill ratio above one for 2025 [10][11] - The global threat environment remains elevated, which is expected to sustain demand for defense spending [11][12] - The company anticipates the FY '26 President's Budget Request will provide clarity on funding allocations for key priorities [11][12] Other Important Information - The company initiated a dividend payment and stock repurchases as part of its capital return initiatives [8][20] - The company is actively engaged in M&A opportunities, viewing them as a top priority for capital allocation [78][79] - The company has implemented economic price adjustment clauses in contracts to mitigate risks associated with price volatility of raw materials [81][82] Q&A Session Summary Question: Can you talk about material receipts and international growth? - The material acceleration impacted revenue holistically across the board, with domestic growth being the primary contributor while international growth faced some headwinds [35][36] Question: What are the margin expectations for ASC? - The ASC segment is expected to have a lower gross margin prospectively, but adjustments made in Q1 should mitigate some impacts moving forward [41] Question: How do you see your share of the defense budget evolving? - The company expects to grow ahead of the defense budget, aligning with the administration's priorities in shipbuilding and force protection [56][58] Question: What is the opportunity in the European defense market? - There is a substantial near-term opportunity in areas like counter-drone systems and advanced sensing programs, although competition may evolve over time [66] Question: How is the company positioned for Navy opportunities? - The company is engaged in discussions to increase its role in shipbuilding and is positioned to support the Navy's increased throughput needs [70][71] Question: What is the outlook for interest expense? - The company anticipates a lower interest burden for the full year due to improved cash position and linearity [111]