Alexander Preston

Alexander Preston inquired whether recent certainty on 737 rate increases at the end of 2025 had changed Teledyne's outlook on destocking into 2026.

Answer

George C. Bobb (President and CEO) stated there was no major change in their thinking on destocking. He clarified that Teledyne's overall commercial aviation business constitutes only about 5% of total business, with only a third of that being OEM and a portion related to Boeing.

Alexander Preston inquired about the M&A environment, BWX Technologies' appetite for further investments, and their leverage position, given the strong performance of recent acquisitions like AOT and Kinectrics.

Answer

Rex Geveden, President and CEO, stated that BWXT is selective with acquisitions, focusing on those that amplify strategic intentions in the nuclear space. He expressed continued interest in acquiring due to current market multiples and value creation opportunities, provided targets align strategically. Mike Fitzgerald, Senior Vice President and CFO, added that the company is comfortable with its current leverage and prioritizes creating capacity for opportunistic acquisitions.

Alexander Preston asked about any observed slowness in the contracting environment due to the government shutdown, specifically regarding Golden Dome Awards. He also sought characterization of the demand sources for Counter-UAS bookings and revenue, including the split between the U.S. Army and foreign military sales.

Answer

CFO Michael Dippold reiterated that the government shutdown's impact on contracting and awards would take a while to materialize, requiring a much longer duration to affect schedules like Golden Dome. COO and incoming CEO John Baylouny stated that Counter-UAS demand is coming from all avenues, including the U.S. Army, Navy, Marines, U.S. Air Force, and direct commercial and international FMS sales, driven by the changing nature of warfare.

Alexander Preston asked about any observed slowness in the contracting environment due to the government shutdown, specifically regarding Golden Dome Awards. He also sought characterization of the demand sources for Counter-UAS bookings and revenue, including the split between the U.S. Army and foreign military sales.

Answer

CFO Michael Dippold reiterated that the government shutdown's impact on contracting and awards would take a while to materialize, requiring a much longer duration to affect schedules like Golden Dome. COO and incoming CEO John Baylouny stated that Counter-UAS demand is coming from all avenues, including the U.S. Army, Navy, Marines, U.S. Air Force, and direct commercial and international FMS sales, driven by the changing nature of warfare.

Alexander Preston of Bank of America, on for Ron Epstein, asked for the rationale behind vertically integrating satellite production for the NSNS contract and inquired about the reason for the delay in receiving the IM-2 mission success payments.

Answer

CEO Steve Altemus explained the decision was driven by supply chain struggles with existing satellite buses, which were not optimized for the lunar environment. He emphasized that investing the ~$100M for NSNS satellites internally builds a valuable, long-term capability. He also clarified the IM-2 payment delay was due to standard negotiation and data-sharing processes with NASA, with the ~$6M in payments now expected in Q3.

Alexander Preston requested more details on the company's 3D woven composite parts initiative, specifically regarding its potential to replace titanium, the program's current status, expected certification timelines, and the go-to-market strategy.

Answer

President & CEO Gunnar Kleveland highlighted a successful showcase at the Paris Air Show of a 3D woven brake brace for the A350, which replaces titanium at a lower weight. He noted that certification for such replacement parts is about 18 months out. The immediate strategy focuses on new programs like Beta's advanced air mobility aircraft and new military platforms to leverage the technology's design and manufacturing advantages, including in hypersonics.

Speaking for Ron Epstein, Alexander Preston of Bank of America Merrill Lynch asked about the potential indirect impacts of tariffs, particularly concerning demand for Airbus aircraft in the U.S.

Answer

CEO Tom Gentile acknowledged that indirect impacts are a greater concern than direct ones. He stated that while it currently does not appear that build rates will be affected, the situation remains uncertain pending a final trade agreement with the European Union. He emphasized that the aerospace industry has historically thrived with zero tariffs.