Financial Data and Key Metrics Changes - Consolidated net sales were $311 million, down 6.2% from $332 million in the same quarter last year [18] - Consolidated gross profit was $98 million, or 31.3% of sales, down from $112 million, or 33.9% of sales, in the prior year [19] - GAAP net income attributable to the company for the quarter was $9.2 million compared to $24.6 million last year, with GAAP diluted EPS at $0.31 versus $0.39 in the same period last year [21] - Adjusted diluted EPS was $0.57 versus $0.89 in the same period last year [22] - Consolidated adjusted EBITDA was $52 million for the quarter versus $63 million in the prior year period [22] Business Line Data and Key Metrics Changes - Machine Clothing reported revenues of $181 million, a decrease of 6.5% versus the second quarter of last year [18] - Engineered Composites segment revenues for the quarter were $130 million, reflecting a sequential growth of 14% from the first quarter [12] - Machine Clothing gross profit decreased to $84 million from $89 million in the prior year, while gross margin improved by 40 basis points to 46.3% [19] - AEC gross profit was $14 million, down from $24 million, largely due to cumulative EAC adjustments [20] Market Data and Key Metrics Changes - North America experienced a slight decline in deliveries in the second quarter, mainly due to packaging machine production curtailments [10] - Europe showed solid signs of recovery with good deliveries and orders, offsetting weakening conditions in Asia, particularly in China where softer demand was noted [10] Company Strategy and Development Direction - The company is focused on optimizing its global production footprint and has commenced two additional facility closures [7] - Investments in operational excellence are aimed at transforming execution of current programs and driving process improvements [7] - The emerging advanced air mobility market is seen as a significant source of growth, with continued investment in capabilities [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in recovery despite second quarter results lagging expectations due to timing and operational issues [5] - The company expects global growth to continue as tariff environments become more predictable, with increased activity in the defense sector anticipated [6] - Full year guidance was reaffirmed, projecting stronger performance in the second half driven by ramping programs and operational efficiencies [23][24] Other Important Information - The company successfully completed its S4HANA upgrade across the entire organization, improving systems and operational efficiencies [15] - Will Station has been appointed as the new CFO, bringing extensive experience from McKesson and Boeing [16][17] Q&A Session Summary Question: Can you talk about overall build rates in aerospace? - Management noted that ramp-up is occurring as Boeing destocks and builds inventory, with momentum towards prior production levels [27] Question: What factors could affect revenue range in the second half? - Key factors include Machine Clothing synergies and increased commercial programs at AEC, with expectations for improved performance in the second half [28] Question: Can you provide updates on the CH-53K program? - The ramp-up is being managed carefully, with significant investments in training and resources, aiming for a two-per-month rate by year-end [32] Question: What are the drivers for reaffirming full year guidance? - Confidence in achieving performance levels with parts available and trained teams, alongside expected growth in both commercial and military programs [40][46] Question: Can you elaborate on the 3D woven composite parts replacing titanium? - The company is focused on developing 3D woven technology, with certification expected in the next 18 months, and positive reception noted at the Paris Air Show [54]