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    Ken Herbert • RBC Capital Markets

    Ken Herbert's questions to StandardAero, Inc. (SARO) leadership

    Ken Herbert's questions to StandardAero, Inc. (SARO) leadership • Q2 2025

    Question

    Ken Herbert inquired about the LEAP program's Q2 bookings, the revenue conversion timeline for its $1.5 billion backlog, and whether any one-time items contributed to the strong Component Repair Services (CRS) margins.

    Answer

    CEO Russell Ford announced the LEAP backlog grew to $1.5 billion, up from $1 billion last quarter. He stated revenue conversion will begin with light work scopes over the next two years, followed by heavier work. Ford confirmed there were no unusual items in CRS margins, attributing the record performance to the AeroTurbine acquisition, Land and Marine growth, and strong organic performance.

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    Ken Herbert's questions to Loar Holdings Inc (LOAR) leadership

    Ken Herbert's questions to Loar Holdings Inc (LOAR) leadership • Q2 2025

    Question

    Ken Herbert of RBC Capital Markets asked about the revenue conversion timeline for the $500 million new business pipeline and questioned the potential for aftermarket headwinds as airlines optimize inventory and maintenance spending.

    Answer

    Founder, CEO & Executive Co-Chairman Dirksen Charles projected that new product introductions would contribute to the lower end of the 1-3% growth target in 2025, accelerating to the higher end in 2026-2027 as FAA certifications progress. He asserted that LOR's sole-source, proprietary portfolio is insulated from aftermarket inventory optimization, noting that any demand choppiness is confined to the commercial OE side.

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    Ken Herbert's questions to Mercury Systems Inc (MRCY) leadership

    Ken Herbert's questions to Mercury Systems Inc (MRCY) leadership • Q4 2025

    Question

    Ken Herbert asked for details on the $30 million revenue pull-forward from FY26, questioning if it was driven by execution or customer demand, and sought more granularity on Q4 bookings, particularly regarding the common processing architecture (CPA).

    Answer

    CEO William Ballhaus attributed the revenue pull-forward to improved execution in accelerating customer deliveries and noted they are applying the same focus in FY26. On bookings, he highlighted a healthy mix across end markets and improving backlog margin. EVP & CFO David Farnsworth specified that two awards totaling $36.9 million were related to the CPA.

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    Ken Herbert's questions to Kratos Defense and Security Solutions Inc (KTOS) leadership

    Ken Herbert's questions to Kratos Defense and Security Solutions Inc (KTOS) leadership • Q2 2025

    Question

    Ken Herbert of RBC Capital Markets inquired about the free cash flow outlook for 2026 given increased investments, and asked for an assessment of supply chain confidence and key risks.

    Answer

    CFO Deanna Lund indicated that CapEx will remain elevated in 2026 to support new programs, and working capital will likely remain a use due to high growth. CEO Eric DeMarco expressed confidence in 99% of the supply chain, but highlighted risk from a few sole-source suppliers who are significantly increasing prices, impacting margins on certain fixed-price contracts until they can be renewed.

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    Ken Herbert's questions to Karman Holdings Inc (KRMN) leadership

    Ken Herbert's questions to Karman Holdings Inc (KRMN) leadership • Q2 2025

    Question

    Ken Herbert from RBC Capital Markets inquired about the specific drivers behind the raised revenue guidance, questioning the role of production volume, market share, or pricing. He also asked about the margin outlook for the rest of the year.

    Answer

    CEO Tony Koblinski identified production rate increases on existing and developing programs as the predominant growth driver. CFO Mike Willis added that EBITDA margins are expected to strengthen in the second half of the year, driven by a continued focus on operational efficiencies and strategic capital deployment.

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    Ken Herbert's questions to Karman Holdings Inc (KRMN) leadership • Q2 2025

    Question

    Ken Herbert asked for details on the drivers behind the raised full-year revenue guidance, questioning whether it was due to volume, share gains, or pricing. He also inquired about the expected progression of gross margins through the second half of the year and into 2026.

    Answer

    CEO Tony Koblinski attributed the upside primarily to production rate increases on existing and development programs. CFO Mike Willis added that EBITDA margins are expected to be stronger in the second half of 2025, driven by operational efficiencies, and projected modest margin improvements moving forward.

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    Ken Herbert's questions to Ducommun Inc (DCO) leadership

    Ken Herbert's questions to Ducommun Inc (DCO) leadership • Q2 2025

    Question

    Ken Herbert asked about the revenue mix from engineered products, seeking clarity on the expected exit rate for 2025 and the outlook for 2026. He also inquired about the M&A pipeline, potential competition for assets, and requested an update on the sale of the Monrovia, CA property.

    Answer

    SVP & CFO Suman Mookerji stated the engineered products mix should remain around 23% for 2025 before ramping up in 2026. On M&A, both Mookerji and Chairman, President & CEO Stephen Oswald acknowledged increased competition but confirmed a promising pipeline for the second half, emphasizing a disciplined approach. Oswald also reported the successful sale of the Berryville facility and noted that the Monrovia property will be marketed again after a previous bid was deemed not 'shareholder friendly'.

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    Ken Herbert's questions to Amentum Holdings Inc (AMTM) leadership

    Ken Herbert's questions to Amentum Holdings Inc (AMTM) leadership • Q3 2025

    Question

    Ken Herbert of RBC Capital Markets inquired about any significant contract recompetes expected in Q4 or FY26. He also asked if the 8% adjusted EBITDA margin for the Digital Solutions segment is a sustainable run rate moving forward.

    Answer

    CFO Travis Johnson confirmed there are no major recompetes pending in FY25 and only one top-10 program is up for recompete in FY26, which is likely to be extended. Regarding margins, he stated that while there are timing factors, the company sees Digital Solutions margins heading above 8% long-term, driven by accretive work in commercial digital infrastructure and the integration of digital capabilities across the business.

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    Ken Herbert's questions to TransDigm Group Inc (TDG) leadership

    Ken Herbert's questions to TransDigm Group Inc (TDG) leadership • Q3 2025

    Question

    Ken Herbert of RBC Capital Markets requested more color on defense bookings, particularly for the OEM business and the short-cycle aftermarket business.

    Answer

    Co-COO Mike Lisman described year-to-date defense bookings as 'very strong' and 'well in excess of shipments,' which suggests good growth for the next fiscal year. He noted this strength was broadly distributed across operating units. He added that the defense aftermarket can be noisy and had no specific standouts in the quarter.

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    Ken Herbert's questions to Leidos Holdings Inc (LDOS) leadership

    Ken Herbert's questions to Leidos Holdings Inc (LDOS) leadership • Q2 2025

    Question

    Ken Herbert from RBC Capital Markets asked for quantification of the cost dynamics between the first and second half of the year, given the disciplined spending in H1 and planned increase in H2, and its implication for margins.

    Answer

    CFO Chris Cage confirmed a shift from a fiscally conservative stance in H1 to increased spending in H2, planning for 'tens of millions of dollars' of incremental investment in areas like AI and maritime demos. While not providing specific margin impact, he indicated this reflects a return to more normal spending levels. CEO Thomas Bell added that while austerity measures are easing, they will not be removed entirely.

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    Ken Herbert's questions to Howmet Aerospace Inc (HWM) leadership

    Ken Herbert's questions to Howmet Aerospace Inc (HWM) leadership • Q2 2025

    Question

    Ken Herbert of RBC Capital Markets asked about inventory levels and the risk of destocking across the portfolio, particularly if OEM production ramps from Boeing or Airbus were to slow down.

    Answer

    Executive Chairman and CEO John Plant noted that while other aerospace companies reported drawdowns, Howmet's underlying growth was strong enough to deliver positive commercial aerospace growth despite facing the same destocking pressures. He confirmed that the company's forward guidance still assumes some destocking in Q3 but expects aggregate growth to accelerate to the 10-11% range, signaling confidence in powering through the inventory adjustments.

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    Ken Herbert's questions to FTAI Aviation Ltd (FTAI) leadership

    Ken Herbert's questions to FTAI Aviation Ltd (FTAI) leadership • Q2 2025

    Question

    Ken Herbert of RBC Capital Markets questioned what the company is seeing in terms of material availability and lead times for spare parts, and how the company is thinking about the valuation of legacy engines over the next one to two years.

    Answer

    David Moreno, COO, explained that FTAI's unique inventory strategy of procuring parts in advance and 'kitting' modules avoids production delays, contributing to a significant improvement in turnaround times at the Montreal facility. Joseph Adams, Chairman, CEO & Director, added that while they expect the rate of engine value growth to slow, their business model is based on a relative value spread and does not depend on rising asset prices for its forecasted growth.

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    Ken Herbert's questions to Boeing Co (BA) leadership

    Ken Herbert's questions to Boeing Co (BA) leadership • Q2 2025

    Question

    Ken Herbert of RBC Capital Markets inquired about the Boeing Defense, Space & Security (BDS) segment, asking about the expected pace of margin improvement and the timeline to return to mid-to-high single-digit margins.

    Answer

    President & CEO Kelly Ortberg downplayed the impact of a potential strike, noting the small number of employees involved. He reaffirmed the goal of reaching high single-digit margins in the BDS segment, emphasizing that new development contracts are being structured as cost-plus to avoid past mistakes. The current focus is on executing and de-risking the existing portfolio of fixed-price development programs.

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    Ken Herbert's questions to Hexcel Corp (HXL) leadership

    Ken Herbert's questions to Hexcel Corp (HXL) leadership • Q2 2025

    Question

    Ken Herbert of RBC Capital Markets inquired about Hexcel's specific build rate assumptions for the Airbus A350 program in the second half of 2025 and the growth outlook for the defense business.

    Answer

    Chairman, CEO & President Tom Gentile stated that Hexcel anticipates full-year A350 production in the 'low sixties,' with destocking expected to conclude in Q3, leading to a strong Q4. He also expressed continued optimism for growth in the defense portfolio throughout the remainder of the year.

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    Ken Herbert's questions to AAR Corp (AIR) leadership

    Ken Herbert's questions to AAR Corp (AIR) leadership • Q4 2025

    Question

    Ken Herbert of RBC Capital Markets inquired about the wide range of the Q1 revenue growth guidance, the reasons for the adjusted EBITDA margin decline in the Repair & Engineering segment, and which business segment is expected to show the most margin improvement in fiscal 2026.

    Answer

    CEO John Holmes attributed the wide Q1 guidance to the timing of large, variable USM (Used Serviceable Material) transactions. CFO Sean Gillen explained the Repair & Engineering margin dip was temporary, caused by fixed costs at the New York facility during its closure, and expects this to resolve in Q1. Gillen identified Repair & Engineering as having the most opportunity for margin improvement in fiscal 2026, driven by realizing cost synergies and operational efficiencies.

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    Ken Herbert's questions to HEICO Corp (HEI) leadership

    Ken Herbert's questions to HEICO Corp (HEI) leadership • Q2 2025

    Question

    Ken Herbert inquired about growth trends and opportunities in the Electronic Technologies Group's (ETG) European business and asked for an outlook on working capital and inventory levels for the rest of the year.

    Answer

    Co-CEO Victor Mendelson described European defense opportunities as 'accelerating well,' with growing orders and a strong design-in pipeline. EVP & CFO Carlos Macau stated that inventory turns have improved and he expects working capital investment to be flat to slightly down in the second half of the fiscal year.

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