Revenue cleared the bar by a meaningful margin. Second-quarter sales reached $260.0 million, above the company’s prior $245–$250 million forecast and roughly 4% above a published consensus near $250 million. The beat was broad: Aerospace grew 22.6% year over year, while Test Systems more than doubled, though the latter benefited from an unusually weak prior-year comparison. (Second Quarter Results; Segment Sales and Profit)
| Metric | Q2 2026 | Q2 2025 | Market/company reference |
|---|---|---|---|
| Sales | $260.0M | $204.7M | Prior company outlook: $245M–$250M; published consensus: ~$250M |
| Diluted EPS | $0.75 | $0.03 | Published consensus: ~$0.71 |
| Adjusted diluted EPS | $0.70 | $0.31 | Approximately in line with consensus |
| Adjusted EBITDA | $51.5M | $25.4M | — |
| Adjusted EBITDA margin | 19.8% | 12.4% | — |
| Bookings | $306.2M | $210.4M | Book-to-bill: 1.18x |
| Backlog | $780.6M | $646.7M at Q3 2025 | 82% expected within 12 months |
| 2026 revenue outlook | $1.02B–$1.04B | Prior: $970M–$1.00B | Midpoint raised about 5% |
Profitability was stronger than the headline EPS comparison suggests. Adjusted EBITDA margin expanded to 19.8%, a multi-year high, and Aerospace’s adjusted operating margin reached 21.4%. Some of the year-over-year improvement reflects easier comparisons—last year included restructuring charges, legal costs and Test Systems contract-cost revisions—but the filing also points to real operating leverage from higher volume and improved productivity. The $2.0 million tariff refund helped, but does not explain the entire margin expansion. (Financial Highlights; Adjusted EBITDA reconciliation; Adjusted Segment Operating Profit reconciliation)
The most important upside is the raised outlook, not the quarter alone. Management increased 2026 revenue guidance to $1.02–$1.04 billion from the previous $970 million–$1.00 billion range and introduced a $265–$275 million Q3 sales outlook. That move signals that the quarter’s strength is being carried forward rather than treated as a one-off. Record bookings of $306.2 million, a 1.18x book-to-bill ratio and backlog of $780.6 million reinforce the visibility, with the Test Systems backlog now including a $44.7 million U.S. Army radio-test order. (2026 Outlook; Order and Backlog Trend; Test Systems discussion)
Test Systems improved operationally but is not yet a major earnings contributor. The segment moved from a $6.7 million operating loss to only $0.6 million of profit, and its 2.78x book-to-bill ratio is encouraging. However, about $4.1 million of current-quarter revenue carried no margin because materials were procured ahead of production, while fixed-cost under-absorption and unfavorable mix remain issues. The future order book is stronger than current profitability, so the upside depends on successful production ramp-up. (Segment Sales and Profit; Test Systems discussion)
Cash conversion is the main offset to the positive read. Second-quarter operating cash flow was $30.1 million, but year-to-date cash generation was being absorbed by higher receivables and inventories, while 2026 capital spending is planned at $40–$45 million. Debt fell by $24.1 million from year-end, but cash declined to $9.0 million, leaving liquidity dependent on revolver availability. The filing therefore delivers a strong demand and earnings signal, with a still-unfinished cash-flow conversion story. (Cash Flow statement; Balance Sheets; Liquidity discussion)
Read the original 8-K on SEC EDGAR ↗