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    Ken Herbert

    Managing Director and Senior Aerospace & Defense Analyst at RBC Capital Markets

    Ken Herbert is a Managing Director and Senior Aerospace & Defense Analyst at RBC Capital Markets, specializing in comprehensive equity research for global aerospace, defense, and related industrial sectors. Since joining RBC in August 2021, he has provided coverage on major companies including Boeing and Airbus, maintaining a robust analyst track record with approximately a 63% success rate and an 18.9% average return per transaction. With prior roles at Canaccord Genuity, Wedbush Securities, Imperial Capital, Citigroup, and as a consulting leader at Frost & Sullivan, Ken brings over two decades of industry and equity research experience. He holds an MBA from the University of Michigan, a BA from UC Santa Cruz, and maintains FINRA registration with securities licenses such as Series 7 and Series 63.

    Ken Herbert's questions to StandardAero (SARO) leadership

    Ken Herbert's questions to StandardAero (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 (LOAR) leadership

    Ken Herbert's questions to Loar Holdings (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 (MRCY) leadership

    Ken Herbert's questions to MERCURY SYSTEMS (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 & SECURITY SOLUTIONS (KTOS) leadership

    Ken Herbert's questions to KRATOS DEFENSE & SECURITY SOLUTIONS (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 (KRMN) leadership

    Ken Herbert's questions to Karman Holdings (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 requested clarity on the expected progression of gross margins for the remainder of the year and into 2026.

    Answer

    CEO Tony Koblinski attributed the revenue upside primarily to production rate increases on key programs. CFO Mike Willis added that he expects stronger EBITDA margins in the second half of the year, driven by modest improvements from operational efficiencies and strategic capital deployment, rather than a significant step-change.

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    Ken Herbert's questions to Karman Holdings (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 /DE/ (DCO) leadership

    Ken Herbert's questions to DUCOMMUN INC /DE/ (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 AerSale (ASLE) leadership

    Ken Herbert's questions to AerSale (ASLE) leadership • Q2 2025

    Question

    Ken Herbert of RBC Capital Markets inquired about the types of assets AerSale is successfully acquiring and whether the Q2 acquisition pace is sustainable. He also asked if the Q2 flight equipment sales run rate is a reliable forecast for the second half of the year, questioned potential impairment risks on the balance sheet, and sought an update on the MRO business restructuring and its outlook.

    Answer

    Chairman & CEO Nicolas Finazzo explained that AerSale has a strong niche in acquiring airframes and wide-body engines, while the narrow-body engine market remains highly competitive. He stated that forecasting flight equipment sales is difficult due to the strategic decision between short-term sales and long-term leases. He also provided a positive update on the MRO segment, noting the component MRO expansions are complete and the Goodyear facility is at nearly full capacity. CFO & Treasurer Martin Garmendia confirmed a strong inventory of 22 engines available for sale or lease and stated there are no anticipated impairment risks on the balance sheet, given strong market demand.

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

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

    Question

    Ken Herbert of RBC Capital Markets inquired about any significant recompetes expected in Q4 or fiscal 2026. He also asked if the Digital Solutions segment's 8% adjusted EBITDA margin is a sustainable run rate for the future.

    Answer

    CFO Travis Johnson confirmed there are no major recompetes pending in FY2025 and only one top-10 program is up for recompete in FY2026, which is likely to be extended. Regarding margins, Johnson stated that while they were pleased with the 8% performance in Digital Solutions, they see it heading higher long-term, driven by accretive growth in commercial digital infrastructure. COO Steve Arnette added that digital capabilities are becoming a 'horizontal thread' across the business, driving further margin opportunity.

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

    Ken Herbert's questions to TransDigm Group (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 (LDOS) leadership

    Ken Herbert's questions to Leidos Holdings (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 (HWM) leadership

    Ken Herbert's questions to Howmet Aerospace (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 VSE (VSEC) leadership

    Ken Herbert's questions to VSE (VSEC) leadership • Q2 2025

    Question

    Ken Herbert of RBC Capital Markets inquired about the drivers of organic growth for the second half of the year, the performance split between commercial and business jet markets, the potential margin impact from the "one VSE" integration, and specific opportunities within the engine MRO and distribution space.

    Answer

    President & CEO John Cuomo detailed that while the Used Serviceable Material (USM) business is being strategically reduced, strong performance in the engine markets, particularly commercial, is driving growth. He noted that a significant portion of Kaelstrom synergies has already been realized, contributing to strong margins, but advised against getting too far ahead on future margin expansion. Cuomo also clarified that VSE has ample opportunity to grow its commercial engine distribution and that its MRO relationships with one OEM do not preclude working with others.

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

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

    Ken Herbert's questions to BOEING (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 /DE/ (HXL) leadership

    Ken Herbert's questions to HEXCEL CORP /DE/ (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 GENERAL ELECTRIC (GE) leadership

    Ken Herbert's questions to GENERAL ELECTRIC (GE) leadership • Q2 2025

    Question

    Ken Herbert of RBC Capital Markets asked for details on the 15% higher narrowbody services revenue outlook, questioning the drivers between CFM56 longevity and supply chain improvements.

    Answer

    SVP & CFO Rahul Ghai explained that the improved outlook is broad-based. For narrowbody, it is driven by two main factors: an incremental 600 CFM56 shop visits through 2028 due to fewer retirements and extended fleet use, and the continued growth of the LEAP installed base. This indicates the increase is a result of sustained demand rather than just a temporary supply unlock.

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    Ken Herbert's questions to AAR (AIR) leadership

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

    Question

    Ken Herbert of RBC Capital Markets asked about the wide range for Q1 revenue growth guidance, the reasons for the margin decline in the Repair and Engineering segment, and which 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 USM transactions. CFO Sean Gillen explained the Repair & Engineering margin dip was due to stranded costs from the New York facility closure, which will be resolved in Q1. Gillen also identified Repair & Engineering as having the most potential for margin improvement in FY26 due to synergy realization and operational efficiencies.

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    Ken Herbert's questions to AAR (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 (HEI) leadership

    Ken Herbert's questions to HEICO (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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    Ken Herbert's questions to CPI AEROSTRUCTURES (CVU) leadership

    Ken Herbert's questions to CPI AEROSTRUCTURES (CVU) leadership • Q3 2020

    Question

    Ken Herbert from Canaccord Genuity Group Inc. inquired about the drivers of the strong Q3 revenue growth, the potential for revenue pull-forward from Q4, and the expected revenue cadence for 2021. He also sought clarification on the components of the operating cash flow calculation and the outlook for cash generation in 2021.

    Answer

    President and CEO Doug McCrosson clarified that no revenue was pulled from Q4, attributing the Q3 strength to the ramp-up of the Northrop Grumman E-2D program and renewed activity on the Raytheon Mid Band pod program. He confirmed that without a $3.2 million customer payback and extraordinary legal fees, operating cash flow would have been positive for the first nine months. McCrosson expressed confidence in a much-improved cash flow profile for 2021, with a goal of reaching breakeven.

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    Ken Herbert's questions to CPI AEROSTRUCTURES (CVU) leadership • Q2 2020

    Question

    Ken Herbert of Canaccord Genuity inquired about the expected pace of gross margin improvement for the second half of 2020, the possibility of a positive earnings quarter during the year, the revenue outlook for the Next Gen Jammer pod program, and the dynamics of pricing pressure from defense customers.

    Answer

    President and CEO Doug McCrosson stated that he expects gross margins to be sequentially higher in Q3 compared to Q2 and confirmed the company anticipates positive earnings quarters in 2020. He explained the Next Gen Jammer program is in a new development phase with a strong run rate expected through 2021. Regarding pricing, McCrosson noted that the defense backlog consists of fixed-price contracts, limiting pressure on existing orders, and described the overall pricing environment as less pressured than the commercial aviation sector.

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    Ken Herbert's questions to CPI AEROSTRUCTURES (CVU) leadership • Q1 2020

    Question

    Ken Herbert of Canaccord Genuity inquired about the drivers for gross margin improvement in 2020, the company's confidence in its 2021 revenue outlook, the financial control changes made post-restatement, and the expected timing for Q2 results.

    Answer

    President and CEO Doug McCrosson stated that a one-time $1 million EAC adjustment suppressed Q1 gross margins, but he expects full-year 2020 margins to surpass 2019 levels. He affirmed high confidence in the 2021 revenue growth, noting it is substantially covered by funded backlog. McCrosson also outlined new financial control processes developed with a major advisory firm and projected Q2 results would be released around late October or early November.

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