Thank you, operator, and good morning. Please note that the presentation accompanying management's remarks can be found on the Investor Relations portion of the company's website at www.standex.com.

Please refer to Standex's safe harbor statement on slide two. Matters that Standex management will discuss on today's conference call include predictions, estimates, expectations, and other forward-looking statements.

These statements are subject to risks and uncertainties that could cause actual results to differ materially. You should refer to Standex's most recent annual report on Form 10-K, as well as other SEC filings and public announcements for a detailed list of risk factors.

In addition, I'd like to remind you that today's discussion will include references to the non-GAAP measures of EBIT, which is earnings before interest and taxes, adjusted EBIT, EBITDA, which is earnings before interest, taxes, depreciation, and amortization, adjusted EBITDA, EBITDA margin, and adjusted EBITDA margin. We will also refer to other non-GAAP measures, including adjusted net income, adjusted operating income, adjusted net income from continuing operations, adjusted earnings per share, adjusted operating margin, free operating cash flow, and pro forma net debt to EBITDA.

Adjusted measures exclude the impact of restructuring, purchase accounting, amortization from acquired intangible assets, acquisition-related expenses, and one-time items. These non-GAAP financial measures are intended to serve as a complement to results provided in accordance with accounting principles generally accepted in the United States.

Standex believes that such information provides an additional measurement and consistent historical comparison of the company's financial performance. On the call today is Standex's Chairman, President, and Chief Executive Officer David Dunbar, and Chief Financial Officer and Treasurer Ademir Sarcevic.

Thank you, Chris. Good morning and welcome to our fourth-quarter and fiscal year 2026 conference call.

A year ago, we made the claim that we are at an inflection point as a company, and that our results in fiscal year 2026 would show that. I'm happy to look back on the year and see that it has indeed played out.

We have demonstrated we are a growing engineered components company. Total sales grew 5.5% organically in the year, propelled by our growth initiatives.

In our fourth quarter, 73% of our sales were delivered by our engineered components businesses. These businesses serve large end markets providing a long runway of organic and inorganic growth opportunities.

Our new product development efforts are now contributing meaningfully to sales, growing from $40 million to $67 million in the year. The $27 million increase contributed 300 basis points to sales growth.

Our sales to fast-growth markets increased $80 million to $264 million, contributing 30% of sales. On July 2nd, we acquired the remaining 9.9% interest in Narayan, completing the acquisition of the Amran-Narayan Group, now known as Standex Grid.

Together with our new colleagues in Standex Grid, we are completely focused on meeting the rapidly growing needs of customers, building out the world's power infrastructure to support increasing living standards, electrification, replacement of an aging Western grid, and the current rapid build-out of data centers. I would like to thank our employees, our executives, and the board of directors for their efforts and continued dedication and support that drove our record in fiscal 2026.

I also want to take a moment to thank Alan Glass for his many contributions these past 10 years. Alan has recently decided to retire, and I will soon be announcing his replacement as we bring in a new chief legal officer to help power Standex through the next leg of our journey.

Now, let's look at the results beginning on slide three. In the fourth quarter, sales of $228.3 million increased 7.7% organically.

Electronics grew 12.9% organically. New product sales grew approximately 43% to approximately $23 million.

Sales into fast-growth markets were approximately $72 million, or more than 30% of sales. We had a record quarterly order intake of approximately $270 million.

We are pleased with the momentum in the business reflected in an overall book-to-bill ratio of 1.18, and within Electronics of 1.27. In fiscal year 2026, sales increased by more than $100 million and 5.5% organically.

Electronics grew 7.5% organically. Q4 adjusted earnings per share were a record $2.45 per share, and we generated record free cash flow of $35 million.

Following record profitability in fiscal 2025, we again achieved record milestones with adjusted gross margin of 42%, adjusted operating income margin of 19.4%, and adjusted earnings per share of $8.74. On a sequential basis, we expect slightly higher revenue driven by higher contributions from fast-growth end markets and new product sales, and similar adjusted operating margin.

On a year-on-year basis in fiscal first-quarter 2027, we expect moderately higher revenue driven by high single-digit to low double-digit organic growth from growing backlog in fast-growth markets and increased new product sales, partially offset by the revenue impact from the Federal Industries divestiture. We expect slightly to moderately higher adjusted operating margin as organic growth and realization of productivity actions are partially offset by growth investments.

For fiscal year 2027, we expect mid to high single-digit sales growth with high single-digit to low double-digit organic growth and continued adjusted operating margin expansion. I'm pleased with the momentum that we are building and launching new products.

We expect to launch more than 20 new products in fiscal 2027 on top of more than 15 new products this past fiscal year. We expect new product sales, pro forma for the Federal divestiture, to grow by $23 million to $90 million, adding nearly 300 basis points of organic growth in the year.

Our sales into the fast-growing markets, such as space, defense, and grid, are expected to increase approximately 20% to greater than $310 million, constituting more than 30% of our total sales. We are looking forward to Ademir transitioning into the Electronics business as President of Electronics.

This is a natural step. To be a CFO at a company like Standex is, in fact, to be a chief operating officer.

Our consistent performance these past 7 years owes a lot to Ademir having stayed close to the businesses. When there were early signs of issues to address or opportunities to expand, he would get into the details of the business, address the pricing, sourcing, or operating issues to help get things back on track.

I will now turn the call over to Ademir to provide more insight as to how we will approach the single biggest opportunity in our business, the expansion of capacity in our Grid business.

Thank you, David, and good morning, everyone. I am very excited to take on the role of Electronics President as we enter this new chapter in Standex's transformation to high-growth and high-performance company.

Our Electronics business exposed to several very robust and fast-growing end markets, such as grid, defense, and automation, and we are well-positioned to capture market opportunities through continued targeted investments in R&D and new products, capacity expansion in grid, while serving customers utilizing our customer intimacy approach. Our team is dedicated and accountable.

Our products and solutions are robust. Our partnership with customers is strong, and I believe we have significant organic growth and margin expansion opportunities in years to come.

Let's turn to slide four, which highlights our focus on capacity expansion within our Electronics Grid business. One of my top priorities as Electronics President is expanding capacity within our Standex Grid business.

Since I joined Standex as CFO, we never have had such an incredible opportunity for organic growth. When we acquired Amran-Narayan, their sales were approximately $100 million on an annual basis.

We just closed FY '26 with approximately $148 million in sales, and by fiscal 2030, we expect grid sales to grow to between $340 and $440 million. To get there, we have identified six capacity expansion objectives and have dedicated teams driving these important workstreams.

Key piece of our capacity expansion efforts include productivity and automation, greenfield facility in Croatia, new lines in Mexico, expanding our footprint in Texas, and additional shifts and footprint in India. Starting with productivity and automation, we are expanding capacity within existing facilities, adding up to $40 million in full-year capacity by fiscal 2030.

This May, we opened our new facility in Croatia, built as a direct response to customer demand for local capacity, giving us visibility into 2030 and a shot at a meaningful share of the €1.2 billion Europe market. By fiscal 2030, we believe Croatia will add approximately $75 million in annual capacity, well above our original 3-to-5-year estimate of $60 million.

Croatia isn't just a new facility, it's a platform for our next phase of growth in Europe. In Mexico, we have freed up space in our existing facility to produce low-voltage instrument transformers, adding approximately $25 million in annual capacity by fiscal 2030.

In Texas, we signed a lease to triple our footprint to over 200,000 square feet, with machinery on order and production on track to start in fiscal 2028. This expansion is expected to add over $60 million in annual capacity by fiscal 2030.

Finally, in India, additional shifts and footprint expansion would add $45 million and $50 million of annual capacity, respectively. These expansions will strengthen our positions in North America, India, and Middle East markets for low to medium-voltage transformers.

Now, I would like to discuss our financial performance in greater detail. Let's turn to slide five, fourth-quarter 2026 summary.

On a consolidated basis, total revenue increased approximately 2.8% year on year to $228.3 million. This reflected organic growth of 7.7%, partially offset by 4.5% impact from Federal Industries divestiture and 0.4% impact from foreign currency.

Fourth-quarter 2026 adjusted operating margin decreased 70 basis points year on year to 19.9%. Adjusted earnings per share increased 7.4% year on year to a record $2.45.

Net cash provided by operating activities was $40.5 million in the fourth quarter of fiscal 2026 compared to $33.4 million a year ago. Capital expenditures were $5.5 million compared to $8.6 million a year ago.

As a result, we generated fiscal fourth-quarter free cash flow of $35 million compared to $24.9 million a year ago. Now, please turn to slide six, and I will begin to discuss our segment performance and outlook, beginning with our Engineered Components segments.

Electronics revenue increased 12.1% year on year to a record $129.1 million, driven by organic growth of 12.9%, partially offset by 0.8% impact from foreign currency. Organic growth was driven by sales into fast-growth markets and increased new product sales.

Adjusted operating margin of 27.2% in fiscal fourth-quarter 2026 decreased 140 basis points year on year due to growth investments and transitory operational issues in the Edge business, partially offset by higher volume and pricing initiatives. Excluding Edge operational issues and other one-time items, adjusted operating margin would have increased year on year.

Our book-to-bill in fiscal fourth quarter was 1.27 with orders of approximately $165 million. Sequentially, in fiscal first-quarter 2027, we expect slightly higher revenue reflecting higher sales into fast-growth end markets and increased new product sales.

We expect moderately higher adjusted operating margin. On a year-on-year basis, we expect double-digit organic growth.

Aerospace and Defense revenue increased 18.3% to $37.9 million, driven by organic growth of 18.4%. Organic growth was driven by increased project activity in the defense end market.

Adjusted operating margin of 22.5% increased 410 basis points year on year, primarily due to higher volume and project mix. Sequentially, we expect moderately lower revenue due to less favorable project timing and moderately lower adjusted operating margin.

On a year-on-year basis, we expect double-digit organic growth. Now turn to slide seven for discussion of the Scientific and Engraving and Hydraulics segments.

Scientific revenue increased 5% to $18.8 million due to organic growth. Organic growth was driven by pricing initiatives and a slight market recovery.

Adjusted operating margin of 28.6% increased 440 basis points year on year, reflecting higher sales and tariff refunds. Sequentially, we expect moderately higher revenue and similar adjusted operating margin.

Engraving and Hydraulics revenue decreased 9.7% to $42.4 million, driven by organic decline of 9.6% and 0.1% impact from foreign currency. Adjusted operating margin of 15.9% in fiscal fourth-quarter 2026 increased 20 basis points year on year.

In the next fiscal quarter, on a sequential basis, we expect slightly to moderately higher revenue and slightly higher adjusted operating margin. Now, please turn to slide eight for a summary of Standex's liquidity statistics and capitalization structure.

Our current available liquidity is approximately $148 million. At the end of fourth quarter, Standex had net debt of $339.2 million compared to net debt of $448 million at the end of fiscal fourth-quarter 2025.

Our net leverage ratio currently stands at 1.8. In fiscal first-quarter 2027, we expect interest expense of approximately $7 million.

Standex's long-term debt at the end of fiscal quarter 2026 was $518 million. Cash and cash equivalents totaled $178.7 million.

We declared our 204th consecutive quarterly cash dividend of 34 cents a share, an approximately 6.3% increase year on year. In fiscal 2027, we expect capital expenditures between $45 million and $55 million, primarily due to grid growth investments.

I will now turn the call over to David for concluding remarks.

Thank you, Ademir. Before I move into concluding remarks, I would like to comment about the recent events in Japan.

This past week, an earthquake struck southern Kumamoto, the location of our Sanyu relay facility. No employees were injured, and there was very minimal impact on our site, though some of our colleagues had damage to their homes.

Our hearts are with our employees and their families as they recover from this natural disaster. Please turn to slide nine.

To summarize, I'm very pleased to see the continued organic growth in the fourth quarter with a book-to-bill of 1.18. Organic growth was driven by our Electronics and Aerospace and Defense segments, which grew 12.9% and 18.4%, respectively.

We will continue to align our organic and inorganic growth investments around secular end markets and new products that expand our presence in engineered components and deepen our customer relationships. Our acquisition strategy will continue to focus on businesses with accretive margins, exposure to fast-growth markets, and delivery of custom solutions.

We expect fiscal 2027 sales to increase mid to high single digits over fiscal 2026, driven by high single to low double-digit organic growth with continued margin expansion. We anticipate margin progression as we move through the year.

Considering the Federal Industries divestiture, we expect to be on track to achieve greater than $1.1 billion in sales and greater than 23% adjusted operating margin by the end of fiscal year 2028. We will now open the line for questions.

Good morning, and thanks for taking my questions.

Good morning.

Good morning. Ademir, I'm going to give you a little bit of a grilling here.

Electronics-related questions, grid-related questions. First, I really liked the waterfall chart you put out there about your plan to expand capacity.

It is across three different continents, it is across at least four or five countries, and I assume that's just the capacity, not necessarily the sales organization, supply chain, etc. It just sounds like a lot's going on over a couple of years.

Give us a little more detail as to is there a sequential process here? Do you have a kind of one team doing all the work and they're going from place to place?

Just a little bit kind of more about how spread thin is the segment's leadership here.

Hey, good morning, Mike. I expected grilling, so that's that's okay.

Look, the grid expansion, as we said on the call, and I think as is a top priority for the company in in the years to come because the market opportunities are are phenomenal, and our and our opportunity to penetrate those those those that market is is significant. We do have, we we, we call it kind of a maybe a tiger team.

We do have a team that's solely focused on on grid expansion kind of across these different sites. This, Mike, is kind of a multi-year multi-year project, multi-year projection.

If I kind of walk you through this waterfall, in terms of productivity and automation, that's primarily around lean transformation, kaizen events, primarily focused on our key lines in India. We have a team that's in India right now dedicated to work with our local management in order to get that accomplished.

David and I have weekly updates on progress on that on that transformation. Frankly, out of this $40 million that we have identified there, we feel that we can achieve significant portion of that, or maybe half, within FY '27.

Then if you think about kind of Croatia and Mexico, there's a there's a separate team that's working on on those those two specific sites. The Croatia site is up and running.

Mexico, we freed up the space, we are starting to do some shipments out of there. We think within FY '27, we can probably get $10 to $15 million out of those out of those two sites.

The other thing that we have done, we actually set up what we call a fourth shift in our Houston facility, in our current Amran Houston facility. What that really means is that that the plant is going to be running probably about 24/7 going forward, and that should probably give us another $5 million worth of additional capacity.

Then as you kind of move forward to this India additional shifts, that's really putting a second shift in our plant in India, in plant in India. We think that's probably going to give us another $5 to $10 million in FY in FY '27.

The Texas expansion is FY '28 event, followed with the with the India footprint footprint expansion. We do have teams dedicated on all of this, we have workstreams that manage each one of these, and you kind of go from our starting point of FY '26 sales of $148, and you kind of add what I just said, and now we feel pretty good we can get to that $180 to $200 million range in sales in FY '27, and then we we will be set up really nicely as we get to FY '28 and '29 to execute on these additional things.

We've got to get it done.

Got it. Got it.

That's That's great detail. Thanks for that.

I also want to confirm that what was in those comments you just made and on that slide, that is the current grid product lineup and customer base. I'm curious if you can share It's hard to imagine the entire Electronics segment not having more to add to the, data center story.

We've discussed this on previous calls. Are you working on any additional products, additional crossovers, this, beyond test and measurement, that can take your non-grid business into grid-related products?

Yes, we actually

Is that not part of the slide and all your projections? Sorry, go ahead.

It is not part of the slide. We do a few million dollars from our legacy Edge business into grid.

It supports basically diagnostic equipment and instrumentation that go into grid distribution monitoring systems. We are exploring ways to combine our sales force so we can ramp that up.

That's not on this page that Ademir showed you. Longer term, though, we're quite interested in this evolution and development of an 800-volt DC architecture, which will be not only in data centers, but just it will be an architecture across all electrification and intelligent systems.

We're working on development of products to support that architecture. That's a few years away from making a penetration in the industries, but we're working on that, and long term, that's a big opportunity for us.

Yep.

Got it. Thanks for that.

I also wanted to touch on the growth you've been seeing in the Aerospace and Defense segment. I think both aerospace and defense have quite a few tailwinds behind them coming up here.

Maybe we just touch on the defense part. With global conflicts that are kind of burning out there, always sad to see it, but it is certainly happening.

I know that some of your products serve the missile industry and certain military aircraft. I'd be curious as to if you can tell us a little bit about the portfolio of opportunities you've got going forward in fiscal '27, '28, and also whether any of that is included in some of your organic projections.

Sometimes these things are ordered kind of quick-turn or last-minute and can be tough to put in there. I'm just kind of curious whether there's some upside if we start seeing even more defense spending going forward.

In the investor presentation that we started using a month or so ago, we showed a projection of our missile business, which I think last year was $9 million, this year in the teens. We see that growing to between $40 and $80 million over the next 4 years.

We're confident in that $40 million number. We are getting increased level of orders for the programs we're on, which is SAM-3, PRISM.

We do parts that go into Patriot systems, as part of our legacy Electronics business. We also are doing development on future-generation missile programs.

We do see upside to that, and it is quite active, as you say.

All right. Thanks for all the information.

I'll pass it along.

Thank you, Mike.

Thanks, Mike.

Hey, good morning, guys. Thanks for taking a couple.

Morning. Yep.

Maybe just start with Electronics overall. So, 12.9% organic growth Q4 looks like double-digit in fiscal '27.

Can you provide a little more detail here? Is this all grid, or are you seeing some kind of increasing contribution from kind of the core Electronics business?

Hi. Good morning, Chris.

It's Ademir. It's not just grid.

Grid is extremely strong for us, been strong for us, but we are seeing a pretty nice uptick and increase in demand in kind of our core businesses, the Tech and Edge. If you kind of look at our book-to-bill in the last quarter, every single one of our business units was over 1.2 book-to-bill.

We are seeing a very nice tailwind kind of into this fiscal year. Then if you kind of look at our sales progression over the FY '26, we did, I think $110 million in Q1 of '26, $115 in Q2, $120 in Q3, about $129 in Q4, and we expect that to continue to increase gradually through FY '27.

When we say, for example, in double-digit organic growth in Electronics in Q1 of FY '27, that's more like high teens or low 20%, if you compare it to the base of $110. Between these new products that launches, between kind of a general economic strength we are seeing in APAC region right now, and all this strength and demand in grid, we feel pretty confident that we'll be able to achieve the double-digit organic growth in Electronics in FY '27, and if few things work our way, could be higher than that.

Got it. Very helpful.

Grid, at one point you talked about EBITDA margins in the 40% range, suggesting that was likely not sustainable, but north of 30 was. Are we getting closer to that 30% range, or just any color there?

Our margins in grid are continuing to be very strong, kind of in line to historical levels. They have not declined.

Got it. Maybe just the last one for me.

Can you talk a little bit about the early payment for for the Narayan shares, which I am all for? Given the the growth in in grid, all things being equal, I assumed the holders would would likely wait until year four, allow the sh- shares to value the shares keep increasing before your right to repurchase kicked in.

I'm I'm guessing there was some incentive payment to to get the holders to make that early conversion. You paid $64 million for the remaining 9.9%.

Can you just maybe walk through the math a little bit in in a little more detail?

Sure, Chris. Great question.

As you kind of know us for a while, whenever we look to do an acquisition, we always want to make sure there's a management continuity. We look at kind of few things for every acquisition.

We look at strategy, we look at, obviously financially has to make sense, and then culturally. As part of that assessment, we always want management to stick around for few years and kind of help us learn the business and help us grow the business to the next level.

We have been working together now with the Amran-Narayan leadership for almost 2 years, and the partnership and collaboration has been exceptional, probably, we always thought it's going to be strong and good, but it's been even better than we thought. It's really a great relationship.

You're right, we didn't have the right to start repurchasing shares until year four, we reached out to the owners to see if we can renegotiate an early buy-in, and we did have to pay a little bit of a higher multiple based on the trailing 12 months EBITDA. We paid about 15 times multiple to settle those shares.

The reason, frankly, if you think about future growth and investments we have to make, and in order to expedite some of these decisions, and frankly to remove some of the accounting complexities around tracking how these investments are made, who makes it, what adjustments to be made, we approached them and we settled that at the $64 million, or about 15 times trailing 12-month EBITDA. The other thing I will tell you, and if you kind of add what we paid in October 2024 for the business, and you add this additional $64 million, and compare it to the trailing 12-month EBITDA of FY '26, the multiple would be about 7 to 8 times.

It's a great deal for Standex, we feel also it's a great deal for Amran-Narayan ownership and people, because it's really one of those things where 1 + 1 makes 3, and we are very excited to continue working with them. That's the story behind it.

Got it.

That's really helpful. Perfect.

I will leave it there. Thank you very much.

Thanks, Chris. Thank you.

Hey, good morning, gentlemen.

Ross.

Morning.

Hey, guys. Starting with Electronics on the margin front here, can you maybe help us size the growth investments in the quarter and what the impact of this transitory operational issues are?

Let me start with that, and Ademir can pick up. The transitory issues, let's just start with that.

In our Edge, the business we used to call Magnetics, we implemented ERP system in a couple of large plants, complex plants in America, right about, I think through December, we went live. That created a lack of visibility for that team.

It slowed down some problem solving. It impacted their ability to execute and drive the things they had to drive.

At the same time, their backlog was growing, and their book-to-bill is terrific in that business. The impact on margins in that business was just, a couple million dollars, just over, in the quarter.

We've got some new folks involved in driving the corrective actions there, and we see that turning the corner. Truly is transitory.

We'll get our arms around it, get that back on track.

Then, Ross, as we kind of think about margin progression in Electronics in FY '27, we clearly see an opportunity to expand the margin, even with some of these growth investments that we are making. It is our objective to get to that 30% number pretty soon.

Okay. I guess I'm just trying to gather when these growth investments start to step down.

Do they continue into this time next year as the new Texas facility is stood up, and is it going to be what, a million, $3 million a quarter?

I think most of the investments, I if you think about kind of investments, just to start up Croatia, there's a little bit of a cost that you have to have before you start production. I know we are starting to get that ramped up, we think that's going to kind of normalize in the upcoming quarters.

Mexico, we already have a facility, we have kind of a fixed-cost base already, so, we don't think that's going to give us a lot of margin I don't think that's going to give give us a margin compression. There are some investments we have to make in people, but again, all in all, we feel, as we kind of closed FY '26, that we have margin expansion opportunities in FY '27, and we'll continue driving productivity and price to offset some of those growth investments, and, get the get the margins up to, to what we think they should be.

Like we said, we see margin expansion in the year. At the same time, we're adding a handful of people to the grid expansion.

We continue to grow selectively the engineering teams for new product development. We're paying for that with leverage and gross margin improvements.

Okay. No, that's helpful.

For the legacy Electronics, you guys know where those orders shook out? Because the consolidated was pretty strong.

No. The overall book-to-bill was about 1.27, but the book-to-bill, Ross, for even for the legacy businesses in the quarter was over 1.2.

Strong book-to-bill kind of across the board.

Then It seems like you guys are clipping above what you noted the prior capacity was. You put up $156 million of orders in the quarter.

Our last discussion, you were doing around $50 million-ish in the first quarter and saying that you're constrained on both businesses. I guess the question really here is, what's kind of changed?

Is it a unlock on the grid side and just progress with Mexico and Croatia? Or are you guys assessing the footprint in Japan, as well?

No, as far as Japan, which is kind of our bread-and-butter reed switch business, we do have additional capacity in Japan to be able to service some of the higher demand. We probably think we can do about, call it 20, 25% more in terms of units produced in Kofu in FY '27 versus what we did in FY '26.

Capacity is there.

Some new machines came online recently, we've got a couple more coming online in the year, so. Yeah.

That's right. The orders are strong.

As it takes us a little while to convert from backlog to sales. We have queued couple of quarters behind, but we feel good about book-to-bill, we feel good about where the orders are, and we just going to continue execute and get our sales up.

The capacity

The capacity, right.

Maybe just one more really quick. It looks like your grid orders shook out around, call it $55 million.

If that's the case, it seems a little light. Do you think you're moving fast enough on your capacity ramp here?

You kind of called out $180 to $200 million for FY '27. If this demand persists, which we expect it will, we're already above the high end of that range.

Look, we feel pretty good that we can hit that number that I went through earlier on the call, between $180 to $200. We are moving as quickly as we can, Ross.

Some of this takes time as far as getting the machinery in, but we're optimistic that we can capture the market opportunity.

All right. Good problems to have.

Thank you, guys.

Yes. Exactly.

All right.

Hey, guys. Good morning.

Just wanted to go back to slide four that you guys were presenting on the capacity increase. I guess the range of growth profiles that you highlighted are kind of in the low 20s to 30+% in terms of the compounded annual rate of growth if I look at it through fiscal '30.

One, how kind of stair-steppy is that growth supposed to be? It sounds like it's relatively smooth based on what Ademir kind of highlighted for this year, which I'm gleaning is probably in the low to mid-20s in terms of the growth rate for grid for '27.

Maybe it's relatively smooth, but maybe just talk about how chunky is that growth that you expect over the next 2 years given the capacity increases that you're highlighting. Then there's this range that you give, I guess, the $100 million of upside.

Maybe can you talk about where that's derived from and how we should think about, I guess, the range of the $340 to $440?

Let me say a word, then I'll let Ademir jump in. Recall when we acquired the business, managing expectations, we said, plan on 15% growth.

They've been growing faster than that, but we need to get to know them, they need to get to know us. We need to have confidence in our ability to add capacity and understand the certainty of demand.

Now we're pretty confident in this 20+% and there may be upside to that as we execute. We have high confidence in that dark-shaded, that lower number, which is $100 $170 million increase, $150 to $340.

Then the additional $100 on there is there's a little upside to all of these if the demand continues and we execute well. It's just to recognize that we live in a somewhat uncertain world, we plan for a scenario of capacity expansion and we're confident that within that range of $340 to $440 is where we'll end up.

That's right. I couldn't have said it better,

so. Then just in terms of the smoothness of that growth rate, it sounds like it's relatively, I guess, smooth across the years is how we're thinking about that.

If

there are any long-pole-like items in that stair step that you provide?

Ademir did a great job explaining it. Some of these things are expanding right now.

We'll see a little more capacity every month from the lean efforts across the businesses. Mexico and Croatia are producing, they're ramping up.

Texas doesn't come online until next year, so that's maybe a long pole, but that comes in the later years of this, as is the India footprint. Everything else will deliver capacity this year.

That's right.

Okay. All right, great to hear.

Then, I guess, shifting gears to the A&D segment. I guess there was a pretty big step-up in operating margins in the quarter.

Just wanted to hear a little bit about sort of I guess it sounded like project mix that was the driver. How repeatable is that, I guess, over the next year or so?

Are we reaching a new level in operating margins in A&D, or is there potential to reach a new level that's kind of similar to the fourth-quarter rate that you did?

Matt, we always said that A&D should be really around 20%+ of adjusted operating margin, and we did close a little higher than that last quarter. The business is a little bit lumpy, as depending on project mix, you could have one quarter, 22%, next quarter 18%, but we do believe, as you look at it over a 12-month period, that business should be over 20% operating margin.

They do a really good job supporting the key customers. They are running some productivity initiatives in the plants to make them more efficient.

The market demand is there. We are pretty excited about not only the margin opportunity in A&D, but also the organic growth opportunity, as well.

We do feel that kind of a 20% operating margin for A&D is not an unreasonable expectation.

Yeah. Great.

Then maybe just last one, the fiscal '28 target that you put out of $1.1 billion in sales. If I kind of plot that against the '27 outlook roughly, that would imply sort of mid-teens growth rate in '28.

I guess, is that all organic that we're assuming, or are we assuming any kind of tuck-ins or M&A activity that's embedded in the '28?

No M&A there. I think if we do 2 years at 12%, we get there.

When we put that number out, it's about 18 months ago, we explained the contributions to that, new product sales, fast-growth vectors. Those two parts of the business, they're doing their job.

They're growing as we expect or even faster. We also said you got 3% general industry growth.

That kind of lagged for the last year and a half. That is starting to pick up.

We're confident about the things we control. In the range that we gave looking forward to next year, upper single digit to low teens.

Yep.

We get in that range, that keeps us on track. I'd say if you want to handicap it, we said by fiscal year '28 we'll be at that range, maybe it slides by a quarter or two, but we're very confident about the progression of our growth initiatives and how they'll get us there.

Matt, if we just look at kind of the opportunities within Electronics and A&D, we're pretty optimistic about our opportunity to capture some of this growth in the end markets, as well as some of the new products we have coming up. That's going to be our growth engine.

All right, excellent. I'll leave it there.

Thanks, guys.

All right, thank you. I want to thank everyone for joining us for this call.

As I mentioned at the beginning of the of the remarks, we enter 2027 a new company. We are truly an engineered components company.

We sell picks and shovels to a variety of industries. We work tightly with our customers.

Our new product development engine is is contributing meaningfully to growth. Our fast-growth markets are are over 30% of our sales now.

We serve large markets that provide a long runway of growth, both organically and inorganically, in these large, attractive markets. It's it's so gratifying to see this this this play out for us.

I want to thank all the employees, our board of directors, the shareholders, who create an ecosystem of of advice and input and reflection to keep us keep us moving in the right direction. I also want to thank Alan Glass, who's here with us now.

It's been Is this about like the 40th call or something you've been with us? Been through many of the the major events over the years, and we appreciate Alan's Alan's contributions over the years.

With that, we thank you all, and we look forward to reporting to you at the end of this next quarter on our first-quarter '27. Thank you.