Financial Data and Key Metrics Changes - Total adjusted sales grew 13% to $740 million year over year, with organic sales growth at 17% when excluding landing gear sales from the previous year [8] - Adjusted EBITDA increased 18% to $86.7 million, with adjusted EBITDA margins rising to 11.7% from 11.3% [8] - Adjusted diluted EPS increased by 27% to $1.08 from $0.85 in the same quarter last year [9] Business Line Data and Key Metrics Changes - Parts supply sales grew 27% to $318 million, with adjusted EBITDA for this segment increasing by 34% [9] - Repair and engineering sales decreased 1% to $215 million, but organic sales growth was 8% when excluding the impact of landing gear divestiture [10] - Integrated solutions sales increased by 10% year over year to $185 million, with adjusted operating income rising by 5% [11] Market Data and Key Metrics Changes - Adjusted sales growth to government customers increased 21%, while adjusted organic sales to commercial customers increased 15% [8] - Total commercial sales accounted for 71% of total sales, with government sales making up the remaining 29% [8] 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 [5] - The acquisition of Aerostrat is expected to enhance software capabilities and expand the reach of the Trax software solution [7] - The company aims to continue strengthening its offerings with targeted acquisitions to accelerate its strategy [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving organic sales growth approaching 10% for the full fiscal year, up from the previously cited 9% [14] - The company noted a strong start to the year and highlighted the strength of its business in the growing aviation aftermarket [14] - Management indicated that the supply of used serviceable materials (USM) is improving, which is expected to positively impact margins in the future [25][26] Other Important Information - The company invested over $50 million in inventory to support future growth, particularly in the parts supply segment [12] - The net debt leverage increased slightly from 2.72 times to 2.82 times due to organic and inorganic investments made during the quarter [11] Q&A Session Questions and Answers 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 [17] Question: Can you comment on the pipeline for new distribution agreements? - The majority of recent wins have been from taking market share, with a different exclusive distribution model resonating well with OEMs [18] Question: Do you still expect to outgrow the market within distribution? - Management maintained the outlook for distribution, expecting to continue growing above market rates [20] Question: What are the 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 [22] 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 [25] Question: What is the margin opportunity for parts supply if more USM comes available? - Management expects margins to expand as more supply comes onto the market, although current margins in USM are tighter than historically [26] Question: Is there an agreement with Aerostrat employees to ensure retention? - There is a three-year earnout associated with the transaction to incentivize key team members to stay [28] Question: What is the company's exposure to engine-related aftermarket services? - Management confirmed significant exposure, with 80% of USM parts business related to engines [34] Question: How far along is Trax in becoming a digital marketplace? - Management indicated that investments are being made to leverage Trax's position for offering parts and repair solutions [36]