Pete Skibitzky

Pete Skibitzki asked for a breakdown of ATI's defense revenue, particularly the growth drivers in naval and missile segments, given the strong historical performance and future spending.

Answer

CEO Kim Fields expressed excitement about defense growth, projecting mid-teens acceleration in 2026. She clarified that naval and nuclear represent 35%-40% of defense revenue, while missiles are around 20%. She highlighted new content wins in missiles, specifically mentioning PAC-3 and THAAD programs utilizing specialized C-103 material and Titanium 6-4, noting significant spending increases for stockpile replenishment.

Pete Skibitzky with Alembic Global asked for clarification on the Army's Long-Range Reconnaissance (LRR) program, specifically whether AeroVironment's P550 is now a sole-source solution or if an ongoing competition is expected. He also inquired about the P550's export clearance status, the number of countries it can be exported to, and the expected growth of its international market.

Answer

Chairman, President, and CEO Wahid Nawabi explained that the LRR program is likely to involve at least two players, with the best-performing vendor receiving the lion's share of volume, and AeroVironment expects a large share due to strong customer satisfaction. He confirmed that the P550 was developed as a non-ITAR product in its base configuration, making it exportable to almost every customer that buys Puma and Raven, with the international market expected to be equally large, if not larger, than the domestic market.

Pete Skibitzky asked about the visibility and growth outlook for the Switzerland-based turret drive stabilization business within Defense Electronics, given new orders from key customers like Rheinmetall, and sought clarification on its pricing model.

Answer

Chair and CEO Lynn Bamford stated that the turret drive stabilization business, after a slow period, is now seeing orders pick up, highlighting a strong relationship with Rheinmetall and the XM-30 win. She declined to discuss specific pricing but noted the product's applicability to some commercial markets (e.g., tilting trains), indicating it's not solely subject to FAR regulations.