Financial Data and Key Metrics Changes - For Q3 FY2026, the company reported sales of $17.333 million, gross profit of $5.903 million, and a gross margin of 34.1% [4] - Adjusted EBITDA was $4.228 million with an adjusted EBITDA margin of 24.4%, exceeding the estimated range of $3.7 million to $4.1 million [5] - The company had zero sales of C2B fabric in Q3, but over $1 million in sales of materials manufactured with C2B product [9] Business Line Data and Key Metrics Changes - The company experienced a total of approximately 740,000 missed shipments in Q3, primarily due to international freight supply chain issues and customer specifications [10] - The company noted that the sales of fabric and materials can significantly impact margins, with higher fabric sales potentially leading to lower overall margins [10] Market Data and Key Metrics Changes - The company highlighted the recovery of the aerospace industry, with programs ramping up quickly, although supply chain challenges are reemerging [11] - The A320neo aircraft family has a significant backlog of 7,900 aircraft, with Airbus targeting a delivery rate of 75 per month by 2027 [21][22] Company Strategy and Development Direction - The company is planning to build a new composite materials manufacturing plant, which will double its current manufacturing capacity and is expected to be operational by the second half of 2028 [52][53] - The company is actively increasing its output of specialty ablative materials for missile systems, particularly the Patriot missile system, in response to increased demand from the U.S. Department of War [45][49] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the aerospace industry and the potential for significant revenue opportunities from military programs [39][50] - The company is not dependent on the recent public offering for funding its new plant, indicating strong cash flow and financial health [53] Other Important Information - The company has zero long-term debt and $63.6 million in cash, with a history of 41 consecutive years of cash dividends [35] - The company has entered into a new agreement with ArianeGroup to advance EUR 4.587 million to increase C2B fabric manufacturing capacity [47][48] Q&A Session Summary Question: What is the outlook for the A320neo program? - The A320neo program is expected to ramp up significantly, with Airbus targeting a delivery rate of 75 aircraft per month by 2027, which translates to a substantial increase in engine orders for the LEAP-1A engine [21][22] Question: How is the company addressing supply chain challenges? - The company is actively managing its supply chain and has noted that while challenges are reemerging, the overall recovery of the industry is a positive sign [11] Question: What are the implications of the new plant for future growth? - The new plant is designed to support the company's long-term business outlook and is expected to significantly increase manufacturing capacity, aligning with the growing demand for composite materials [52][53]

Financial Data and Key Metrics Changes - Sales for Q3 were reported at $17.333 million, with a gross profit of $5.903 million and a gross margin of 34.1% [4] - Adjusted EBITDA for Q3 was $4.228 million, resulting in an adjusted EBITDA margin of 24.4% [4] - Q3 sales estimates were between $16.5 million and $17.5 million, with actual results falling within this range [5] - Adjusted EBITDA estimates were between $3.7 million and $4.1 million, with actual results slightly above this range [5] Business Line Data and Key Metrics Changes - The company had zero sales of C2B fabric in Q3, but over $1 million in sales of materials manufactured with C2B product [9] - Total missed shipments in Q3 were approximately 740,000, primarily due to international freight supply chain issues and customer specifications [10][11] - The company noted that the timing of fabric sales can distort quarterly results, impacting margins [10] Market Data and Key Metrics Changes - The A320neo aircraft family has a significant backlog of 7,900 aircraft as of September, with a total of over 12,000 airplanes when considering deliveries [22] - The CFM LEAP-1A engine has a market share of 64.5% for the A320 program, which is beneficial for the company as it is involved in this program [24] - The company is observing a ramp-up in production deliveries of LEAP engines, which is crucial for the A320neo program [25] Company Strategy and Development Direction - The company is planning to build a new composite materials manufacturing plant to double its current manufacturing capacity, with an estimated capital budget of approximately $50 million [54][56] - The new plant is expected to be operational in the second half of calendar 2028, supporting long-term business and sales outlooks [54][56] - The company is actively participating in missile systems production, particularly for the Patriot missile system, in response to increased demand due to geopolitical tensions [41][47] Management's Comments on Operating Environment and Future Outlook - Management indicated that the industry is recovering, but supply chain challenges are reemerging as programs accelerate [11] - The company expects significant revenue opportunities from various missile programs, although some details remain confidential [52] - Management expressed confidence in the long-term growth potential, emphasizing the need for increased manufacturing capacity to meet future demands [56] Other Important Information - The company has zero long-term debt and $63.6 million in cash at the end of Q3, with a history of uninterrupted cash dividends for 41 consecutive years [37] - A recent S-3 registration statement was filed with the SEC, indicating potential future capital-raising activities [3] Q&A Session Summary Question: What is the outlook for the A320neo program? - The A320neo program is expected to ramp up deliveries significantly, targeting a delivery rate of 75 airplanes per month by 2027, which would translate into substantial engine orders for the company [22][24] Question: How is the company addressing supply chain challenges? - Management noted that while supply chain issues are reemerging, they are actively managing these challenges and expect to continue supporting increased production demands [11][12]

Financial Data and Key Metrics Changes - For Q3 FY2026, sales were reported at $17.333 million, with a gross profit of $5.903 million and a gross margin of 34.1%. Adjusted EBITDA was $4.228 million, resulting in an adjusted EBITDA margin of 24.4% [4][5] - The sales estimate for Q3 was between $16.5 million and $17.5 million, with adjusted EBITDA estimates ranging from $3.7 million to $4.1 million, indicating that actual results were within the expected range and slightly above the EBITDA estimate [5][6] Business Line Data and Key Metrics Changes - The company had zero sales of the C2B fabric in Q3, which is used for advanced missile programs, but reported over $1 million in sales of materials manufactured with the C2B product [8][9] - Total missed shipments in Q3 were approximately 740,000, attributed to international freight supply chain issues and customer specifications [10] Market Data and Key Metrics Changes - The company noted that the aerospace industry is recovering, but supply chain challenges are reemerging as programs accelerate, which is seen as a positive sign for industry growth [10] - The company highlighted its top five customers and noted significant developments in military programs, particularly the selection of the Valkyrie for the Marine Corps' collaborative combat aircraft program [12][13] Company Strategy and Development Direction - The company is focusing on expanding its manufacturing capacity to support increased demand for missile systems, particularly in light of recent geopolitical events that have depleted stockpiles [41][52] - A major new composite materials manufacturing plant is planned, which will approximately double the current manufacturing capacity and is expected to be operational by the second half of 2028 [54][56] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of the aerospace industry and the potential for increased sales, particularly in the context of the A320neo aircraft family and its market share [20][24] - The company is preparing for significant increases in production capacity to meet the urgent needs of the Department of War for missile systems, indicating a strong future outlook [41][52] Other Important Information - The company has zero long-term debt and reported $63.6 million in cash at the end of Q3, along with a strong history of cash dividends [37] - A recent S-3 registration statement was filed with the SEC, indicating potential future capital-raising activities [3] Q&A Session Summary Question: What is the outlook for the A320neo aircraft family? - The A320neo aircraft family has a significant backlog of 7,900 aircraft, with Airbus targeting a delivery rate of 75 per month by 2027, which is expected to drive demand for the company's products [21][22] Question: How is the company addressing supply chain challenges? - Management noted that while supply chain issues are reemerging, they are actively managing pricing to mitigate tariff impacts and are prepared to ramp up production as needed [11][10]