Core Insights - Five stocks have been added to the Zacks Rank 1 (Strong Buy) List, indicating strong potential for investment returns Group 1: Company Performance - HudBay Minerals (HBM) has seen a 9.1% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - GigaCloud Technology Inc. (GCT) has experienced a 6.5% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - Weatherford International (WFRD) has reported a 6% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2] - Maximus (MMS) has seen a 6% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [3] - Jackson Financial (JXN) has experienced a 4.8% increase in the Zacks Consensus Estimate for its current year earnings over the last 60 days [3]

Core Viewpoint - The defense sector is expected to experience short-term fluctuations due to potential government shutdowns, but long-term funding for critical defense programs will remain stable [1][3]. Group 1: Impact of Government Shutdown - A short government shutdown is unlikely to have a significant impact on the defense sector, as legacy programs will continue to receive funding [1]. - Prolonged shutdowns, similar to the one experienced from 2018 to 2019, could have more substantial effects, particularly on new program procurements and research and development funding [2]. - Historically, the aerospace and defense industry has outperformed the S&P during past shutdowns, indicating resilience in the sector [3]. Group 2: Investment Opportunities - Companies like Hexel, which produces composite materials for defense systems, and Boeing, known for its weapons systems and commercial aircraft, are seen as strong investment opportunities [5][6]. - The ongoing geopolitical tensions, particularly between the US and China, are expected to create a favorable environment for defense spending [6][8]. - Companies involved in undersea and shipbuilding, such as Graham Corporation, are likely to benefit from increased defense spending in the Asia-Pacific region [8]. Group 3: Long-term Trends - The defense sector, particularly in areas related to kinetic weapon systems and intelligence, surveillance, and reconnaissance (ISR), is expected to perform well in the long term despite potential short-term disruptions [10]. - The IT space and government services may face more significant impacts from shutdowns, but the overall defense industry remains robust [10].

不过，这些计划中只有一处提到了永久性裁员。美国疾病控制与预防中心(CDC)表示，该中心有1563个 职位处于"RIF状态"——即职位处于可能被永久裁撤的状态，但目前尚不清楚这是此前已经批准还是政 府关门计划的一部分。 上周，白宫预算办公室曾要求各联邦机构，就如果出现政府停摆起草大规模裁员的计划。这本质上是对 国会民主党人发出的"隐晦威胁"——即政府可能永久性缩减无资金保障项目，而非仅暂停运作。 在美国政府即将迎来十一停摆前的最后一天，特朗普政府的各部门才陆续"姗姗来迟"地公布了应对政府 停摆的详细计划——包括要求数十万雇员临时停职休假。而值得一提的是，虽然此前白宫曾威胁各部门 在应急计划中将考虑"永久"裁员，但最终真正落地的却寥寥无几。 据悉，截至当地时间周一下午，至少已有八个美国内阁部门制定了详细的停摆计划，包括国防部、教育 部、卫生与公众服务部、国土安全部、劳工部、国务院、司法部和退伍军人事务部。 这些部门占到联邦政府员工总数的三分之二以上，这些方案将合计要求超过40万名非必要员工停职休 假。 美国总统特朗普周一与国会领导人的会面最终"无果而终"。美国副总统万斯在会后已表示，"我认为我 们正走向政府关门， ...

Summary of KBR's Special Investor Webcast Company Overview - **Company**: KBR, Inc. - **Segments**: KBR is planning to spin off its Mission Technology Solutions (MTS) segment, creating two independent public companies: New KBR (Sustainable Technology Solutions segment) and SpinCo (Mission Technology Solutions segment) [2][4][10]. Key Points and Arguments 1. **Strategic Spin-off Announcement**: KBR announced its intent to spin off the MTS segment to unlock shareholder value, resulting in two independent companies with focused management and financial flexibility [4][5]. 2. **Tax-Free Transaction**: The spin-off is expected to be tax-free for KBR and its shareholders, with completion anticipated in mid to late 2026 [5][18]. 3. **Historical Transformation**: KBR has undergone a decade-long transformation, increasing revenue from approximately $5 billion to $8 billion, and margins nearly doubling from over 6% to under 12% [6][7]. 4. **Financial Performance**: Adjusted EBITDA has grown by over 180% during the transformation, with significant increases in adjusted EPS and operating cash flow [7]. 5. **Independent Business Models**: Post-spin, New KBR will focus on sustainable technology solutions, while SpinCo will concentrate on government solutions, both benefiting from dedicated management and strategic focus [8][10]. 6. **Market Positioning**: New KBR is expected to lead in IP-protected technologies, while SpinCo will focus on national security and space priorities, with a backlog of $17.8 billion [11][15]. 7. **Financial Metrics**: For the trailing 12 months ending July 4, 2025, New KBR reported revenue of $2.2 billion with adjusted EBITDA margins around 22%, while SpinCo reported revenue of $5.8 billion with adjusted EBITDA margins around 10% [11][12]. 8. **Leadership Changes**: Mark Sopp will oversee the spin-off of MTS, while Shad Evans will become the CFO of New KBR post-spin [16][17]. Additional Important Content 1. **Organizational Agility**: The spin-off is expected to enhance organizational agility, streamline decision-making, and improve accountability [9]. 2. **Customer Focus**: Each company will have the flexibility to optimize its capital structure and align its capabilities with customer needs, enhancing customer intimacy [9][10]. 3. **Cost Structure Management**: KBR aims to minimize stranded costs post-spin, with a focus on maintaining cost-competitiveness and attractive financial profiles for both companies [36][37]. 4. **Market Diversification**: Both businesses have been designed to mitigate cycle risk through diversification across multiple market streams and geographical areas [43][44]. 5. **Future Investor Days**: Dedicated investor days will be held for both New KBR and SpinCo to provide deeper insights into their operations and growth strategies [12][55]. This summary encapsulates the key aspects of KBR's strategic direction, financial performance, and future outlook as discussed in the investor webcast.

Spin-off Announcement - KBR plans to spin off its Mission Technology Solutions (MTS) segment to create two independent, pure-play public companies: "New KBR" comprising Sustainable Technology Solutions (STS) and "SpinCo" comprising MTS [1, 7] - The transaction is intended to be tax-free to KBR and its shareholders and is expected to close in mid-to-late 2026 [7, 33] Portfolio Transformation - The spin-off is the culmination of a decade-long portfolio transformation to focus on differentiated and innovative science, technology, and engineering solutions [7, 9, 10] - KBR has acquired 13 businesses and divested 4 non-core businesses, exiting commoditized services and shifting away from lump sum turnkey-type contracts [13] New KBR (STS) - New KBR, comprising STS, has TTM Q2'25 revenues of $2.2 billion and an adjusted EBITDA margin of approximately 22% [15, 20] - STS backlog for Q2'25 is $3.7 billion [15] SpinCo (MTS) - SpinCo, comprising MTS, has TTM Q2'25 revenues of $5.8 billion and an adjusted EBITDA margin of approximately 10% [16, 27] - MTS backlog and options for Q2'25 is $17.8 billion [16] Financial Performance - KBR's adjusted EBITDA has grown by 180% from $334 million in 2015 to $935 million in TTM Q2'25 [11]

Core Viewpoint - Gulf Island Fabrication, Inc. has been awarded a task order by the U.S. Defense Logistics Agency for an automated fuel handling system upgrade in Yokosuka, Japan, valued at over $7 million, indicating strong growth potential following the acquisition of Englobal [1][2][3] Group 1: Contract Details - The task order is fixed-price with an estimated value exceeding $7 million and will be included in the Company's new awards and backlog for Q3 2025 [2] - Work is scheduled to commence in September 2025, with completion expected in Q1 2028 [2] - This task order is part of a broader indefinite-delivery, indefinite-quantity contract for automated fuel system installations, allowing the DLA to issue similar task orders globally through September 2029 [2] Group 2: Company Insights - Gulf Island is recognized as a leading fabricator of complex steel structures and provides various specialty services to the industrial, energy, and government sectors [4] - The company has a diverse customer base, including U.S. and international energy producers, EPC companies, and government entities [4] - The acquisition of Englobal has led to positive feedback from customers and potential partners, reinforcing the company's confidence in future contract awards [3]

Core Viewpoint - Maximus (MMS) has shown strong performance year-to-date and is positioned to maintain this momentum, making it a compelling addition to investment portfolios [1] Group 1: Stock Performance - MMS shares have increased by 17.5% year-to-date, significantly outperforming the Government Services industry, which has seen a decline of 5% [2][8] - The company has a Zacks Rank of 1 (Strong Buy), indicating strong market confidence [3] Group 2: Earnings and Growth Prospects - Maximus has a positive earnings surprise history, exceeding the Zacks Consensus Estimate in three of the last four quarters, with an average earnings surprise of 29.3% [3] - The Zacks Consensus Estimate for Maximus's 2025 revenues is $5.45 billion, reflecting a year-over-year growth of 2.74%, while the earnings estimate is $7.41, indicating a 21.28% increase [4][8] Group 3: Competitive Edge and Financial Health - The company achieved CMMC Level 2 certification in August 2025, enhancing its credibility in defense and national security sectors by meeting stringent cybersecurity standards [5] - MMS's current ratio at the end of Q3 fiscal 2025 was 2.27, well above the industry average of 1.35, suggesting strong liquidity and ability to meet short-term obligations [6] Group 4: Dividend History - Maximus has consistently paid dividends over the past four fiscal years, with payouts of $68.8 million, $68.7 million, $68 million, and $72.9 million, reflecting the company's commitment to shareholder value [9]

Core Viewpoint - Maximus has authorized an expansion of its stock purchase program to a total of $400 million, indicating confidence in its financial position and commitment to returning value to shareholders [1] Company Summary - The new stock purchase program includes approximately $32.7 million of remaining availability from the existing program, suggesting a strategic approach to capital allocation [1] - Maximus plans to purchase shares opportunistically at prevailing market prices, utilizing methods such as open market transactions and 10b5-1 plans, which allows for systematic buying [1]

General Observation - Civil service exams in China and India are known for their difficulty and societal impact [1] External Resource - A sample exam is available for review [1]

Financial Data and Key Metrics Changes - For fiscal year 2025, the company achieved revenue growth of 16% on an underlying basis, with an EBITDA margin of 11.2% and free cash flow of $442 million, reflecting a 16% increase in free cash flow per share [9][24][26] - In Q4, revenue reached $2.3 billion, representing a 13% year-over-year growth, with an EBITDA margin of 11.5% [22][24] - Adjusted diluted earnings per share for Q4 were $8.4, a 27% increase from the previous year [22] Business Line Data and Key Metrics Changes - The company won $10 billion in contract awards for the year, resulting in a book-to-bill ratio of 1.1x [10][32] - The company reported 10% organic growth for the full year, driven by strong customer demand for its differentiated technology [24][26] Market Data and Key Metrics Changes - The company generates 90% of its revenue from national security customers, benefiting from government funding initiatives such as the One Big Beautiful Bill Act, which allocates over $150 billion for defense [18][32] - The company has a healthy pipeline with $16 billion in bids under evaluation, 80% of which are for new business [34] Company Strategy and Development Direction - The company has positioned itself in well-funded areas aligned with national security priorities, focusing on software-based capabilities and modernization [11][19] - The company anticipates revenue growth of nearly 8% for fiscal year 2026, with an EBITDA margin in the mid-11% range and free cash flow per share growth of over 60% [19][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the current operating environment, highlighting strong customer demand and a robust pipeline of opportunities [17][19] - The company is closely monitoring the fiscal year 2026 budget process, indicating comfort in operating under a continuing resolution if necessary [18][19] Other Important Information - The company completed three strategic acquisitions and repurchased $150 million of shares during the year [28] - The company has a modest leverage ratio of 2.9x net debt to trailing twelve-month EBITDA, providing significant optionality for future capital deployment [28] Q&A Session Summary Question: Concerns about the competitive landscape and pipeline - Management clarified that the majority of their $16 billion pipeline consists of new work to CACI, with over half being new customer work, indicating a focus on value bids rather than traditional government services [41][44] Question: Impact of ceiling reduction on iTask program - Management confirmed that the ceiling reduction from $5.7 billion to $5 billion does not impact revenue or margins, and the program continues to execute well [47][49] Question: Budget outlook and potential for organic growth - Management indicated that a quicker budget process could lead to achieving the higher end of organic growth guidance, emphasizing a robust process for setting guidance [54][56] Question: Award environment and contracting officer availability - Management noted some modest impacts on award decisions but emphasized their ability to operate effectively in the current environment, with expectations of extended current work due to tighter procurement bandwidth [68][70] Question: Updates on space optical terminals and Golden Dome initiative - Management reported strong demand for their technology and ongoing success in the space optical terminal market, with investments on track despite some production delays [78][80] Question: Federal civilian exposure and budget outlook - Management stated that only 6% of revenue comes from federal civilian work, with a strategic focus on defense and intelligence sectors, minimizing exposure to federal civilian budget fluctuations [92][94]