Spencer Breitzke of TD Cowen requested an update on the JDAM program, asking about the timing for realizing higher pricing from new contracts.
CFO William Lacey stated that due to strong demand and a healthy supply chain, the company expects to transition to the higher-priced JDAM contract lots during the fourth quarter of the fiscal year.
Spencer Breitzke asked for color on fastener and jet engine sales performance during the quarter and inquired about the potential upper limit for SAO segment margins.
CEO Tony Thene reported strong sequential sales growth, with jet engines up 16% and fasteners up 25%. Regarding SAO margins, which reached a record 29.1%, Thene reiterated his previous target of 30% and stated it is 'not the limit.' While acknowledging that margin progression may not be linear each quarter due to mix, he sees opportunities to push past the 30% level, highlighting it as a key achievement that moves the company into a higher valuation category.