Financial Data and Key Metrics Changes - The company reported Q1 net sales of $130.1 million and adjusted EBITDA of $20.5 million, both exceeding expectations [25] - First quarter gross margin improved by 130 basis points year over year, driven by favorable pricing and prior year inventory step-up amortization [26][70] - The company expects full-year revenue and adjusted EBITDA growth of 11% to 11.5% at the midpoints, reflecting the recent acquisition [27] Business Line Data and Key Metrics Changes - Orders backlog increased by $22.4 million during the quarter, primarily driven by EOD and Silume demand [13] - The armor business generated more revenue than expected in Q1, contributing positively to overall performance [72] - The EOD space was noted to be light in Q1, which is atypical, but the company managed to execute orders more quickly than anticipated [70] Market Data and Key Metrics Changes - The law enforcement market is expected to continue positive spending trends, supported by bipartisan support for public safety [16] - The nuclear market is anticipated to grow at a rate of 4% to 6% over time, with consistent demand observed [62] - The company is seeing multidirectional support for nuclear initiatives, including federal appointments and regulatory reforms [17] Company Strategy and Development Direction - The company aims to evolve into a multi-vertical provider of engineered mission-critical safety products, with a focus on nuclear and law enforcement sectors [4][5] - The recent acquisition of the engineering division from KARS is seen as a critical step in expanding the nuclear vertical and enhancing international presence [5][24] - The company maintains a robust M&A pipeline across all current verticals, indicating a strategic focus on both organic and inorganic growth opportunities [6][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's long-term outlook despite current economic uncertainties, highlighting resilience as a key differentiator [7] - The company is proactively strategizing to mitigate tariff impacts and is optimistic about offsetting any potential pressures [29] - Management noted that the second half of the year is expected to be stronger than the first half, driven by armor and EOD project timing [30] Other Important Information - The company has increased its dividend by 9% this year, marking the fourteenth consecutive increase, reflecting confidence in business strength [14][15] - The company is actively monitoring broader market trends, particularly in the consumer channel, which represents approximately 7% of contract sales [19] Q&A Session Summary Question: Pricing commentary and contribution to the quarter - Management indicated that normal pricing adjustments were made at the start of the year, with expectations to fully offset tariffs moving forward [34][35] Question: Revenue synergy opportunities from the engineering acquisition - The acquisition is expected to enhance geographic expansion and customer relationships, particularly with existing clients in the nuclear sector [36] Question: Timing and flow of business for the rest of the year - Management noted limited backlog visibility but expects Q2 to be up from Q1, with Q4 anticipated to be the strongest quarter of the year [40][42] Question: Tariff mitigation strategies - The company is exploring various options to mitigate costs, including productivity acceleration and potential shifts in product lines between facilities [44][46] Question: Nuclear market demand and M&A focus - Management confirmed a robust funnel for both nuclear and law enforcement M&A opportunities, with no specific emphasis on one over the other [56][58] Question: Q1 results and year-over-year drop explanation - The year-over-year decline was attributed to tough comparisons from a strong Q1 last year, particularly in the armor business [68][70] Question: Margin improvements and future opportunities - Management highlighted strong execution on pricing and productivity as key drivers for margin improvements, with expectations for continued growth [73][74] Question: Adjusted EBITDA margin expectations post-acquisition - The engineering division is expected to be slightly dilutive initially, but management anticipates improvements in gross margins as synergies are realized [86][88] Question: Production footprint reconsideration due to tariff changes - Management expressed satisfaction with the current production footprint and noted ongoing efforts to mitigate costs in specific locations [94][96]

Financial Data and Key Metrics Changes - The company reported Q1 net sales of $130.1 million and adjusted EBITDA of $20.5 million, both exceeding expectations [25] - First quarter gross margin improved by 130 basis points year-over-year, driven by prior year inventory step-up amortization and favorable pricing [26][70] - The company expects full-year revenue and adjusted EBITDA growth of 11% to 11.5% at the midpoints, reflecting the completed acquisition of the engineering division [27] Business Line Data and Key Metrics Changes - Orders backlog increased by $22.4 million during the quarter, primarily driven by EOD and Silume demand [13] - The armor business generated more revenue than expected in Q1, contributing to the overall positive results [72] - The EOD space was noted to be light in Q1, which is not typical for the business, indicating variability in project availability [70] Market Data and Key Metrics Changes - The law enforcement sector is expected to continue seeing positive spending related to personal protection equipment, supported by bipartisan support for public safety [16] - The nuclear market is anticipated to grow at a rate of 4% to 6% over time, with consistent demand observed [62] - The company is monitoring broader weakening trends in the consumer channel, which represents approximately 7% of contract sales [19] Company Strategy and Development Direction - The company aims to evolve into a multi-vertical provider of engineered mission-critical safety products, with a focus on nuclear and law enforcement markets [4][5] - The recent acquisition of the engineering division is seen as a critical step to deepen exposure to the nuclear market and expand into new sub-verticals [5][24] - The company maintains a robust pipeline of M&A opportunities across all current verticals, including nuclear, law enforcement, first responders, and military markets [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's long-term outlook, emphasizing resilience in navigating economic turbulence [7] - The current operating environment is characterized by unpredictability, but the company has delivered consistent and stable growth [6] - Management is optimistic about the potential for organic and inorganic growth opportunities moving forward [7] Other Important Information - The company has increased its dividend by 9% this year, marking the fourteenth consecutive increase, reflecting confidence in business strength [14][15] - The company is actively evaluating attractive M&A opportunities to add complementary businesses with strong margins and recurring revenue profiles [31] Q&A Session Summary Question: Pricing commentary and contribution in Q1 - Management indicated that normal pricing adjustments were made at the start of the year, with expectations to fully offset tariffs moving forward [34][35] Question: Revenue synergy opportunities from the engineering acquisition - The acquisition is expected to enhance geographic expansion and customer relationships, particularly in the nuclear sector [36] Question: Timing and flow of business for the rest of the year - Management expects Q2 to be up from Q1, with Q4 anticipated to be the strongest quarter of the year [40][42] Question: Tariff mitigation strategies - The company is implementing various strategies, including productivity acceleration and product line shifts, to mitigate tariff impacts [44][47] Question: Nuclear market demand and M&A focus - The company has a robust funnel for both nuclear and law enforcement M&A opportunities, with consistent demand observed in the nuclear sector [56][62] Question: Q1 results and year-over-year drop - The year-over-year drop was primarily due to tough comparisons from a strong Q1 last year, particularly in the armor business [68][70] Question: Margin improvements and future opportunities - Management noted that margin improvements were driven by strong execution on pricing and productivity, with expectations for continued improvement [73] Question: Cars acquisition and outlook - The company is taking a practical approach to guidance post-acquisition, maintaining core organic guidance flat while assessing future opportunities [75][77] Question: Production footprint reconsideration - The company is satisfied with its current production footprint and has made adjustments to mitigate costs in specific locations [93][96]