Executive Summary

Q2 2025 delivered a clean beat: revenue $135.3M vs $132.7M consensus*, adjusted diluted EPS $0.57 vs $0.55 consensus*, with adjusted gross margin expanding 296 bps YoY to 38.7% and adjusted EBITDA margin up 130 bps YoY to 23.0% .
Diversification was the engine: diversified end markets rose 13% YoY and reached 55% of revenue; transportation fell 6% YoY on China and commercial vehicle softness .
Cash generation accelerated: operating cash flow $28.4M and free cash flow $25.1M; capex disciplined at $3.3M; cash $99M and long‑term debt $88M support M&A capacity .
Guidance maintained: FY25 sales $520–$550M and adjusted diluted EPS $2.20–$2.35; tax rate assumption 19–21% excluding discrete items; management highlighted minimal tariff impact in Q2 but is monitoring USMCA/geopolitics .
Potential stock catalysts: sustained margin expansion and cash returns ($26M YTD) vs watch‑items (transportation softness, tariff trajectory, SyQwest seasonality into H2) .

What Went Well and What Went Wrong

What Went Well
- “We delivered another quarter of double-digit sales growth in the diversified end markets and achieved solid profitability with adjusted EBITDA margin expanding 130 basis points” — CEO Kieran O’Sullivan .
- Diversified end markets up 13% YoY with industrial +6%, medical +8% (therapeutics +~60% YoY), and aerospace & defense +34% (SyQwest +$4.5M) .
- Strong cash generation and capital allocation: $28M operating cash flow; $25.1M FCF; 412k shares repurchased (~$17M); $26M total cash returned YTD; cash $99M / debt $88M .
What Went Wrong
- Transportation down 6% YoY on China softness and weaker commercial vehicle demand; management expects continued near‑term headwinds in transportation revenue .
- Medical diagnostics bookings soft (Asia capital spend, tariffs) with management cautioning 1–2 quarters of softness despite strong therapeutics .
- SyQwest introduces seasonality tied to US government funding; H2 expected stronger but timing risk remains .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$127.4	$125.8	$135.3
Diluted EPS ($USD)	$0.45	$0.44	$0.62
Adjusted Diluted EPS ($USD)	$0.53	$0.44	$0.57
Adjusted Gross Margin %	38.1%	37.0%	38.7%
Adjusted EBITDA Margin %	23.9%	20.5%	23.0%
Operating Cash Flow ($USD Millions)	$26.0	$15.5	$28.4

Metric	Q2 2024	Q2 2025 Actual	Q2 2025 Consensus*
Revenue ($USD Millions)	$130.2	$135.3	$132.7*
Diluted/Primary EPS ($USD)	$0.48	$0.57 (Adjusted)	$0.55*
Adjusted EBITDA ($USD Millions)	$28.2	$31.1	$29.0*

Values with an asterisk were retrieved from S&P Global.

Segment Breakdown (Q2 2025)

Segment	Q2 2025 Sales ($USD Millions)	YoY Growth
Industrial	$34	+6%
Medical	$19	+8%
Aerospace & Defense	$21	+34% (ex‑SyQwest +6%)
Transportation	$61	−6%

KPIs

KPI	Q2 2024	Q2 2025
Operating Cash Flow ($USD Millions)	$19.6	$28.4
Free Cash Flow ($USD Millions)	$15.0	$25.1
Capex ($USD Millions)	$4.6	$3.3
Controllable Working Capital (% of annualized sales)	18.5%	17.6%
Book‑to‑Bill (2Q)	1.0	1.0
Total Booked Business (Transportation)	~$1B	~$1B
Cash / Long‑Term Debt ($USD Millions)	—	$99 / $88
FX impact on gross margin ($USD Millions)	—	+$1.0
Shares repurchased (units / $USD)	—	412k / ~$17M

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	FY 2025	$520–$550M (Apr 30, 2025)	$520–$550M (Jul 24, 2025)	Maintained
Adjusted Diluted EPS ($USD)	FY 2025	$2.20–$2.35 (Apr 30, 2025)	$2.20–$2.35 (Jul 24, 2025)	Maintained
Tax Rate (ex‑discrete)	FY 2025	19–21%	19–21%	Maintained
Dividend	Next payment	Prior quarterly cadence ($0.04 declared in Q1/Q2 statements)	$0.04 per share declared Aug 14; pay Oct 24, record Sep 26	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024)	Previous Mentions (Q1 2025)	Current Period (Q2 2025)	Trend
Diversification mix	Diversified >50% revenue; strong A&D; transportation weak	Diversified growth +14% YoY; book‑to‑bill 1.17	Diversified 55% of revenue; +13% YoY	Improving mix
Medical (diagnostics vs therapeutics)	Growth; new customers/apps	Wins incl. AI‑driven ultrasound; bookings strong	Therapeutics +~60% YoY; diagnostics bookings soft for 1–2 quarters	Mixed near term
Aerospace & Defense / SyQwest	SyQwest added $14M FY; capability expansion	SyQwest +$3M Q1; seasonality noted	SyQwest +$4.5M Q2; H2 stronger on budget approvals	Positive, seasonal
Industrial	Gradual recovery; OEM/distribution improving	+4% YoY; new wins	+6% YoY; bookings +22% YoY	Improving
Transportation	−18% YoY in Q4; eBrake awards	−12% YoY; China softness	−6% YoY; China/commercial vehicle headwinds; pre‑buy; monitoring tariffs	Weak
Tariffs / Macro	Monitoring; guidance assumes challenges	Minimal Q1 impact; FX +$1.1M	Tariff impact “very minimal” Q2; monitoring USMCA; FX +$1.0M	Stable/minimal impact
Technology/R&D	eBrake, sensors roadmap	AI ultrasound win	COBROS position sensing; next‑gen Smart Actuator launched	Advancing

Management Commentary

“We delivered another quarter of double-digit sales growth in the diversified end markets… adjusted EBITDA margin expanding 130 basis points… strong operating cash flow” — CEO Kieran O’Sullivan .
“Our adjusted gross margin was 38.7%… favorable mix… minimal tariff impact… exchange rate changes had a favorable impact of $1 million on gross margin” — CFO Ashish Agrawal .
“Assuming the continuation of current market conditions, we are maintaining our guidance of sales in the range of $520–$550 million and adjusted diluted EPS… $2.20–$2.35” — CEO Kieran O’Sullivan .

Q&A Highlights

Medical mix: therapeutics strength vs diagnostics softness; diagnostics softness likely 1–2 quarters; overall medical growth expected for the year .
Tariffs: “very, very minimal” Q2 impact; monitoring changes, especially USMCA .
Transportation: China softness and commercial vehicle pressure; some pre‑buy in April/May; cautious next few quarters; sequential light vehicle improvement .
SyQwest: integration progressing; seasonality tied to government funding; H2 stronger with budget approval .
Capital allocation/M&A: $38M remaining under repurchase program; would like to execute an acquisition within 12 months; focus on diversified end markets .

Estimates Context

Metric	Q4 2024 Actual	Q4 2024 Consensus*	Q1 2025 Actual	Q1 2025 Consensus*	Q2 2025 Actual	Q2 2025 Consensus*
Revenue ($USD Millions)	$127.4	$132.8*	$125.8	$128.7*	$135.3	$132.7*
Primary/Adjusted EPS ($USD)	$0.53 (Adj)	$0.54*	$0.44 (Adj)	$0.49*	$0.57 (Adj)	$0.55*
EBITDA ($USD Millions)	$28.2 (Adj)	$28.8*	$25.8 (Adj)	$27.1*	$31.1 (Adj)	$29.0*

FY 2025 revenue consensus ~$539.9M vs guidance range $520–$550M; consensus mid‑point aligns with guidance mid‑point . Values retrieved from S&P Global.

Implication: modest positive revisions likely to Q3/Q4 profitability given margin trajectory and H2 SyQwest, while transportation estimates may remain conservative due to ongoing macro/tariff watch .

Key Takeaways for Investors

Quality beat and margin expansion: revenue and EPS exceeded consensus*, with 296 bps YoY adjusted gross margin expansion and 130 bps YoY adjusted EBITDA margin expansion, reinforcing the margin‑accretive mix shift into diversified markets .
Diversification momentum: diversified end markets now 55% of revenue; continued wins across medical/industrial/A&D; SyQwest pipeline supports H2 revenue cadence .
Cash returns and balance sheet optionality: strong FCF, $99M cash/$88M debt, $38M buyback remaining, and a $0.04 dividend declared post‑quarter—fuel for opportunistic M&A and shareholder returns .
Watch transportation headwinds: China/commercial vehicle softness and tariff uncertainty keep a lid on near‑term growth; management flagged pre‑buy and a cautious outlook .
H2 setup: FX tailwinds, operational execution, and government budget approvals underpin stronger SyQwest contribution; expect seasonality and backlog conversion to support narrative into Q3/Q4 .
Trading lens: maintained guidance despite macro uncertainty suggests confidence; margin beats and cash generation are supportive; sensitivity remains to headline risk on tariffs/China and A&D funding timing .
Estimate drift: consensus* sits near guidance mid‑point; continued margin execution could bias EPS estimates higher if diversified mix persists and transportation stabilizes .