Thank you. Good morning.

I'm Brad Bourne, President and CEO of Firan Technology Group Corporation, or FTG. Also on the call today is Drew Knight, our Chief Financial Officer.

Before we go any further, I must caution you that this call may contain forward-looking statements. Such statements are based on the current expectations of management of the company, and inherently involve numerous risks and uncertainties, known and unknown, including economic factors and the company's industry generally.

The preceding list is not exhaustive of all possible factors. Such forward-looking statements are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward-looking statements made by the company.

The listener is cautioned to consider these and other factors carefully when making decisions with respect to the company, and not place undue reliance on forward-looking statements. The company does not undertake and has no specific intention to update any forward-looking statements, written or oral, that may be made from time to time by or on its behalf, whether as a result of new information, future events or otherwise.

Our second quarter was a record quarter for FTG on virtually every metric. We had record revenues, record earnings, record bookings, and record backlog, with continued strong end market demand.

More specifically, in our second quarter of 2026, we achieved the following. Bookings were $86.7 million in the quarter, our best ever bookings in a single quarter, and an 89% increase over Q2 2025, resulting in a book-to-bill ratio of 1.64:1.

This included additional bookings on the two classified defense programs we have previously mentioned, but to be clear, bookings were strong across our business, not just on these two programs. The quarter-end backlog stood at $193.5 million, a 30% rise from the previous year-end.

Revenue was $52.7 million, again our best ever quarter, and an 8.2% increase over Q2 2025. Adjusted EBITDA was $10.5 million in Q2 2026, a record high, up 20% from $8.7 million in Q2 last year.

Adjusted net earnings were $5.1 million in Q2 this year, an increase of 44% from Q2 last year, and another record for FTG. This once again demonstrates that top line growth drives profitability at FTG.

Free cash flow was positive $2.7 million in our second quarter. We maintained a strong balance sheet with net debt down to $2.9 million, or 0.1 times trailing 12-month EBITDA.

Most of our debt is government loans. Other accomplishments in our second quarter included, in 2025, our Circuits business qualified for two large-scale classified defense programs, and significant orders have been placed for these two programs during Q2 this year.

Only one of these programs had any revenue in our second quarter, and it was not significant. FTG Aerospace Calgary continued to benefit from efforts to certify and sell its product portfolio globally, and had profitable results again in the quarter.

I will talk more on this later. Our efforts to reduce our exposure to US tariff risks continued, and in Q2 2026, our efforts continued to sell outside the US.

Deliveries to China's C919 program continue. In addition, deliveries to the new De Havilland Canadair 515 aerial firefighting aircraft started to ramp up.

More deliveries on both these programs are expected to continue in the second half of 2026. We also made more progress on moving non-US customer orders to our non-US sites to further reduce our exposure to any tariff risks.

Finally, we had some larger orders for circuit boards from a Canadian customer. Offsetting this was continued strong demand coming from the US market.

Drew will provide more details on our second quarter results shortly. Let me turn to some external items.

Our end market demand remains strong. Airbus is targeting 870 aircraft deliveries this year, up about 10% from last year.

More importantly, they are looking to ramp to over 1,000 aircraft annually in the next few years. Airbus has a backlog of over 8,000 orders, which is over a decade's worth of production at current production rates.

At Boeing, they shipped 600 planes last year, up from 350 in 2024. Looking forward, Boeing has plans to ramp their production to over 800 planes annually in the next few years.

Boeing's backlog is about 6,000 planes, also over a decade's worth of orders at current production rates. In the business jet market, Bombardier reported a high single-digit shipment increase last year.

They're also pushing hard to add a defense component to their business, and they've had some success to date in selling their business jets for defense applications, including a NATO award this week for surveillance mission aircraft. In Q1 this year, Bombardier sales were up 5%.

In the helicopter market, Bell Helicopter reported a 20% increase in revenues last year, driven by increased defense programs. In the first quarter of 2026, revenues were up 9% again on increased defense activity.

All of this bodes well for us as we look to future demand in the coming years. Defense spending is expected to increase going forward.

The US budget request for next year is for a 50% increase in spending to about $1.5 trillion. There are new commitments from all NATO members, including Canada, to ramp defense spending to 3.5% of GDP, with another 1.5% for defense infrastructure.

Canada increased their defense spending in 2025-2026 to 2% of GDP. All of this indicates significant increases in defense budgets for all European countries and Canada.

The recent creation of a Defence Investment Agency in Canada to accelerate and streamline future defense procurement activity is positive for the industry here. Looking at the longer term, Boeing's most recent 20-year forecast for commercial aircraft shows significant long-term industry growth, and it continued to show 20% of all new aircraft deliveries going to China and close to 40% to Asia, as has been the case in all of their recent forecasts.

A recent business jet market forecast from Honeywell similarly predicts growth in this market of 5% this year and 3% annually over the next decade. As we have said for many years, FTG's goal is to participate in all segments of the aerospace and defense markets, as each moves through their independent business cycles.

It is not often all segments are growing, as is the case right now. Beyond all this, let me give you a quick update on some key metrics for FTG for our second quarter of 2026.

First, as already noted, the leading indicator of our business is our bookings or new orders. Our bookings were almost $87 million in the quarter.

This resulted in a backlog of over $193 million at quarter-end, even after record shipments in the quarter. Q2 sales were $52.7 million, which is up 8% over Q2 last year.

In our Aerospace business, sales were up 21% in Q2 to $17.1 million, compared to Q2 last year. Sales in Toronto, Tianjin, and Calgary were up, while activity in Chatsworth was down in the year due to timing of some orders.

The growth in Aerospace was in spite of some challenges on our C919 program in China, where we had to deal with some sizable customer concerns and returns, including some shipments that arrived at the customer with water damage to the shipping containers. In this case, the good news was when we took the product back and inspected and tested them, none of the product itself was damaged.

This took a lot of time and energy for our plants in Tianjin and Toronto to support our customer and get the product returned successfully to them, and still they had a strong quarter. Calgary saw strong revenues from hardware sales, which were mostly Satcom Direct radios delivered in Canada and US, but also from our second delivery of Edge+ WQARs in Asia.

Data sales were also strong due to Satcom Direct radio data, but also an increase in weather data for NOAA. Licensing revenues were again from our Satcom Direct radio, which were very strong in the quarter.

On the Circuits side of our business, sales in the quarter were $34.3 million, up 1.9% over Q2 last year. Our two largest sites were down slightly in the quarter, but the other sites more than offset this.

Circuits Toronto was down due to an operational disruption mid-quarter, and Circuits Minnetonka was down due to a product mix shift towards higher technology product and by labor constraints. By quarter-end, Minnetonka had made strong progress on staffing, which will benefit them in the second half of the year.

On the positive side, our Circuits Fredericksburg site almost doubled the revenues in our second quarter, with work transferred from Minnetonka and with no change in their staffing levels. They truly had an amazing quarter.

While our two largest sites did not grow, Fredericksburg was up over 90%, Chatsworth was up 18%, and our Haverhill site was up 15%. Overall at FTG, our top five customers accounted for 51.2% of total revenue in Q2 2026.

This compares to 52.8% last year. Airlines were three of our top customers in the year due to the FLYHT acquisition.

Also interesting to note that the top 10 customers, five are customers shared between Circuits and Aerospace, and two are former FLYHT customers. Given the actions of the new administration in the US of implementing tariffs, it's also good to see that two of our top 10 customers are outside the US, with one in Canada and one in China, and another six have operations outside the US.

While on this topic, 70.3% of FTG's sales are to US-based customers in 2026. This includes sales by our US sites, as well as sales from sites in Canada or China.

This compares to 69.7% last year. While sales grew by 10% in the US, they also grew by 4% in Asia and by 44% in Canada, as we benefit from previous efforts to expand globally, including things like our content on C919 aircraft in China and acquiring FLYHT with sales globally.

Sales decreased in Europe by 8% in the quarter. Sales outside the US are helpful in the event of any tariffs that the US might impose on our non-US-based sites.

Our goal is to continue to grow our non-US revenue for our non-US sites. In Q2 2026, 35.8% of total revenues came from our Aerospace business, compared to 32% last year.

I'd now like to turn the call over to Drew, who will summarize our financial results for second quarter 2026, and afterwards, I will talk about some key priorities we're working on. Drew?

Thanks, Brad.

Good morning, everyone. I would like to provide some additional detail on our financial performance for Q2, starting with revenue and gross margin.

On sales of $52.7 million, FTG achieved a gross margin of $19.2 million or 36.5% in Q2 2026, compared to $15.9 million or 32.6% on sales of $48.7 million in Q2 2025. The increase in gross margin dollars is based on top line growth, while the gross margin rate increased due to operational improvements in multiple facilities, despite unfavorable FX variances.

The improved profitability at Aero Calgary and several US sites has a substantial impact on consolidated margin rates. Aero Calgary continues to benefit from its ongoing licensing revenue that resumed in 2026, as well as repeat hardware sales of its AFIRS Edge product.

The US sales improved margins via increased throughput with limited added resources. Moving on to SG&A, SG&A expense was $8.4 million or 15.9% of sales in Q2 2026, as compared to $6.8 million or 14.1% of sales in the prior year.

The increase of $1.55 million during Q2 was primarily due to performance compensation tied to profitability, amortization of deferred financing costs, and some corporate admin costs of the new leadership team. Now speaking to R&D, R&D costs for Q2 2026 were $2.8 million or 5.3% of sales, compared to $2.4 million or 5.0% of revenue in 2025.

R&D efforts include product and process improvements at the Circuits segment, as well as Aerospace segment product development and product process improvements. Regarding foreign exchange, FTG is exposed to currency risks through transactions, also assets and liabilities recorded in foreign currencies, and finally from foreign subsidiaries' translation of financial statements for consolidation.

The average exchange rate experienced in Q2 2026 was 1.373 on the US dollar, as compared to 1.407 in 2025, which equates to a weakening of the US dollar by 2.4% and this hurts results for FTG. Moving on to profitability and EBITDA, adjusted EBITDA, as detailed in the MD&A, was $10.5 million for Q2 2026 or 19.9% of sales, compared to $8.7 million or 17.9% of sales for Q2 2025.

As noted with gross margins, the year-over-year comparison of adjusted EBITDA is improved $1.78 million over Q2 2025 as a result of growing the top line organically, operational improvements in the US plants, and Aero Calgary revenue streams added in 2026 for Edge+ and licensing. Regarding earnings, for Q2 2026, FTG recorded net earnings of $5.0 million or $0.20 per diluted share, as compared to $3.5 million or $0.14 per diluted share in Q2 2025.

The earnings comparison to prior year was improved by favorable income taxes, based on the distribution of profits in 2026 being more widespread. Speaking to income taxes, Q2 2025 2026, sorry, was tax inefficient, with a few non-deductible losses unable to reduce taxable income in profitable business units.

However, this inefficiency improved year-over-year. Also, FTG incurred a $200,000 withholding tax hit on the repatriation of some cash from a foreign subsidiary.

I would like to remind everyone that FTG continues to have substantial tax losses available to offset future income, and the accounting benefit of these losses has not been recognized in our financial statements. These tax loss carryforwards are located in both the USA and Canada, with the Canadian losses recently acquired in the acquisition of FLYHT in December 2024.

Regarding our financial position, FTG maintains a strong balance sheet, with our net debt position as of Q2 2026 at $2.9 million, as compared sequentially to net debt of $4.0 million as of Q1. This leverage ratio represents 0.09% of trailing 12 months EBITDA.

Free cash flow in Q2 2026 was $2.7 million, as compared to negative $5.5 million in Q2 2025. Capital expenditures were $0.9 million, as compared to $1.3 million in 2025.

Going forward, we expect capex to be closer to FTG's long-term target of 3% of revenue, notwithstanding any significant capacity increases. As of the end of Q2 2026, the corporation's primary sources of liquidity totaled $85 million, consisting of working capital of $61.8 million and $23.3 million of unused credit facilities.

FTG has plans to improve cash efficiency and minimize stranded cash in various business units. Accounts receivable days were 60 at the end of Q2, up from 55 at the recent year-end, due to timing of a couple of customer payments and top line revenue growth.

Inventory days were 112 at the end of Q2 2026, up from 105 at 2025 year-end, to address order fulfillment in upcoming months. Accounts payable days outstanding were 57 at the end of Q2 2026, as compared to 58 at year-end.

Transitioning to our future outlook, FTG's book-to-bill ratio for Q2 2026 was 1.64:1. We enter Q2 2026 with a record backlog, or sorry, we enter Q3 2026 with a record backlog of $193.5 million, of which approximately 66% is expected to be converted to revenue in the next 12 months.

The new business activities in both the aerospace and defense industries are strong and continue to accelerate. Both the Circuits business and Aerospace business are increasing throughput and winning their share of customer RFPs.

Last quarter, we noted program awards for two substantial classified defense programs. We have since received the opening POs for delivery in 2026, though these orders are only a fraction of the annualized volumes.

I should note that FTG's reported backlog only includes POs received and does not include program awards with estimated volumes. As we approach the midpoint of Q3, we are focused on managing cash flow and improving operational efficiency, and continuing with the Aero Calgary revenue plan, which is already bearing fruit.

I should note that our complete set of quarterly filings are available on sedarplus.com or on the FTG website. With that, I would like to turn things back over to Brad.

Brad?

Thanks, Drew. Let me delve into some important items for the future of FTG that will continue to build on our past accomplishments.

We will continue to pursue growth in the defense market. As noted previously, we expect defense spending to continue to grow in Canada, in the US, and in NATO.

We have seen some good success on some new classified programs in the US last year, and we're pushing pursuing more new programs in 2026. We are seeing volumes ramp up in many areas, including electronics for various weapon and electronic warfare systems.

Beyond this, we will look for opportunities outside the US as well. The NATO budget was about a third of the US budget a decade ago, and is two-thirds today, it's definitely a market of interest to us.

As Canada ramps its defense spending and its commitment to NATO, we are hopeful that it will create new opportunities for FTG sites outside the US. After the US and NATO, the next biggest defense market is India.

As we get our site established there, we will look to capture some market share in this market, too. We will look to capture more work in the commercial aerospace market and as and grow as volumes ramp up.

As part of this, we will look for ways to increase our activity with Airbus, as they are the stronger performer right now. To do this, we will leverage our Canadian and China sites.

Given the uncertainty regarding tariffs from the US, we look to continue to diversify revenue streams for our non-US sites. Some of the items I already mentioned will assist in this, but it will remain a priority action for us.

We will increase our sales staff outside the US in 2026 to help drive this growth. Tariffs are now impacting input costs in our Circuits business.

This is because a lot of materials used in our manufacturing processes originate outside of North America. The impact is highest for our US sites, but Toronto is also impacted where material shipped via the US to Canada.

We estimate the overall cost impact to be in the millions of dollars in 2026. We have started to work with our customers to pass on these increased costs to them and to the end users.

Also for our Circuits business, we are seeing significant cost increases on input costs, mostly driven by circuit board demand related to AI data centers. Costs are moving up fast, and again we are working to towards passing these costs onto our customers, but it is tough to keep up with the rate of cost increases we are seeing.

Also, our collective agreement for our unionized staff in our Circuits Toronto facility expires in July. Negotiations are ongoing, and we are hopeful of a successful conclusion, but nothing is firm until a contract is ratified by the members.

We will continue to take steps to create value from our acquisition of FLYHT last year. As of December 1 last year, we have renamed the business FTG Aerospace Calgary, as we amalgamated it legally into FTG.

The amalgamation was done to possibly enable us to use the FLYHT tax losses beyond just our operation in Calgary. To be clear, we do not have certainty that this will be possible.

In the Calgary business itself, we believe we are now well positioned to have a strong year as a result of our product certification and STC efforts last year. We are seeing strong demand for all three products, and our pipeline looks robust.

The licensing revenue on our Satcom Direct radio product has returned, and should be reasonably consistent going forward. The licensed product ends up on Airbus aircraft, we know the demand is strong.

We are working to become the manufacturer of this product for the licensee to capture additional margin from this product. If things proceed as anticipated, this will benefit us in 2027 and beyond.

We are looking to manufacture the Satcom Direct radio product in our Chatsworth, California facility. The production area is set up and parts are on order.

This should help get our Chatsworth facility ramped up going forward. The Edge+ WQAR has the key STCs in place, and with our first few orders or few deliveries behind us, we are quoting many new opportunities in a number of geographic jurisdictions.

We are starting to manufacture this product in our Tianjin plant to able us to enable us to capture this margin as well. We expect sales of their weather product to ramp up in the second half of 2026 as well, with our contract with NOAA in the US.

Our contract with UK Met in England was unfortunately canceled in Q2, but not for reasons related to the product. While disappointing, we continue to see strong potential for this product elsewhere, including some military applications.

In Q2, we installed our first kit for this product on a WestJet aircraft, and we expect to have our STC for the 737 MAX in Q3 this year. Once approved and installed, there will be a recurring revenue stream as we provide real-time weather and water vapor readings to NOAA.

We also expect to install further units with WestJet through the balance of this year, each incrementally increasing our recurring data revenue potential. These actions should enable FTG Aerospace Calgary to be a positive addition to FTG and further mitigate the risks from US tariffs.

We opened our aerospace facility in Hyderabad, India last week. Our decision to expand geographically was partly us looking for an insurance policy against anything negative happening in our China operations, but it was also partly to expand into a new region with growth potential.

As we analyzed our options, we concluded India was a very cost-effective place for manufacturing, and with Prime Minister Modi's Make in India policy coupled with significant defense spending, it would be an ideal place to operate and a place where we can serve our existing Western customers, but also penetrate the Indian aerospace and defense market. We selected Hyderabad as it as it has an aerospace hub primarily focused on manufacturing.

After our grand opening last week, we attended an aerospace conference in Hyderabad and came away with some exciting new customer opportunities. While we held our grand opening, we are still sourcing some necessary equipment to be ready to go.

Our estimated total investment is forecast to be approximately $2 million to $3 million. While not the original intent, we believe this initiative could also help mitigate any negative impact from US tariffs.

Through the balance of this year, we will be staffing up and and training and building some initial products, but it is expected to be intercompany activity, no no real incremental benefit to FTG before 2027. We continue to assess possible corporate development opportunities that could fit with either of our businesses.

We have a few areas of interest, including establishing a footprint in Europe, growing our presence in India, or expanding our technology in a few areas. In our second quarter In our second quarter, three circuit board manufacturing companies were sold in Europe, but none of them to us.

TTM bought two companies, but neither had a strong focus in aerospace and defense. Somacis bought ACB circuits, which is a multi-site business focused on aerospace and defense, but their operations are primarily in France, and this is not a jurisdiction we are keen on.

Finally, as a remember a reminder, our third quarter is seasonally a bit softer due to increased vacations and lost production days. We estimate about 1 week or 8% of lost production in the quarter.

With a focus on operational excellence in all parts of FTG, our strong financial performance in 20 2025 and the first half of 2026, our recent acquisitions and our key sales wins, we are confident we are on a strong long-term growth trajectory. This concludes our presentation.

I thank you for your attention. I would now like to open the phones for any questions.

Vincent?

Thanks. Morning, guys.

Brad, you mentioned a lot about the outlook that you have now in this increased booking backlog activity. What's the confidence that you have to deliver given the existing footprint and labor availability?

Are there any bottlenecks or things that might prevent that from flowing through over the coming 12 to 24 months?

For sure. There's always challenges and, bottlenecks and such.

It, it it's different across the sites. I I guess all sites but one, it's about staffing and training and getting people, operating equipment more hours a day.

For every site except Circuits Toronto, it's about that. I tried to allude to it, but, the key for us, one of the keys is is Minnetonka, and we've been struggling to make that happen, but we didn't see the result in Q2, but we saw significant improvement in staffing in Q2, which I believe is going to help us going forward in Q3 and beyond.

That that was really good to see. The other sites, to their credit, so, Chatsworth grew 18% with a handful, a couple of staff additions.

Fredericksburg grew almost 100% with no staff additions. Haverhill grew 15% with no staff additions.

The sites are really performing well, and we will add staff as necessary to support future demand. Then finally on the last one on the Circuits side, our Circuits Toronto, for sure we have some production bottlenecks that are equipment-related, we're already running 24/7, so that's not an opportunity just run it longer.

We're working to, address the equipment bottlenecks. We have orders in place for so some expansion in our plating line, we've orders in place for some drills to expand our capacity there.

Our only challenge which, might delay it a little bit, but it's just lead time on equipment is pushing out a bit just given the overall demand in the circuits industry, but everything's on order. We are hoping that, we can add $20 million plus in capacity by the end of this year.

Then, on the cockpit product side, it's all about staffing and we're, doing a good job supporting our demand right now. We're as I talked about, we just opened our aerospace Hyderabad facility.

That's adding another $20 million of capacity there. I'm giving you the world's longest answer, but at the end of it all, I think, we are doing the things to be able to support the demand we see for the coming couple of years.

Okay. Perfect.

No, that's great color. Thank you.

As those start to play through, how are you thinking about margins evolving? I know you're obviously adding this extra equipment to remove some of these bottlenecks.

Where could the gross or EBITDA margins as that operating leverage starts to play through really go here?

Yeah. I don't know.

There's my challenge. I had a long-term target at FTG.

I'm going to say this is mostly internal targets, that I could get to a 30% margin, but I've blown way past that. I have a target of getting to a 20% EBITDA, and we're basically there now.

I've run out of targets. I got to come up with some new targets.

At the end of it, we are a manufacturer. We've got a bunch of fixed costs.

If we grow the top line, margins expand. That I know for sure, and we keep demonstrating that.

We can perform efficiently and productively, and obviously we work on doing that wherever we can. Top line drives bottom line at FTG, if we can grow the top line, margins will expand.

I honestly don't have a target for you today.

That's fair. Then the last one for me.

On these classified programs, is there any color you can share? I appreciate that the end application and the use case of some of this hardware may not be even known to you guys.

In terms of either the scale of the contracts, the velocity with which these orders are going to come through, or even the tenure, is there anything that you're aware of that you can share so we can kind of wrap our heads around how impactful these two contracts in particular are?

Yeah. Yes, I guess on the first part, just to be clear, I truly do not know the end application.

Can't share anything on that. You didn't ask for that.

In terms of the financial impact of these, they are both gigantic. Annual circuit board spend is $50 million to $100 million.

Obviously, I cannot support that full spend, nor would the customer spend it all with one supplier, we're going to get a portion of that, basically whatever we can support. We're early days.

One of them, we have orders, we've shipped nothing yet, and we're actually still waiting for the customer to finalize designs. We built some prototypes last year, but they're back in redesign.

We're just waiting. Can't really begin to guess where that one's going to end up.

The other one started production but low numbers, nothing meaningful in Q2, and that one's in our Toronto facility. I don't know.

It's going to depend on how fast they ramp and to be fair, how we perform. We're working to try and make sure we perform well for both of them and get our fair share of the pie.

TBD the exact timing on how this ramps up. After that, for sure they're both multi-year programs, 5-plus years.

Okay. That's really great color, guys.

Thanks so much for the time.

Okay. Thank you.

Thanks for the time, guys. I just want to follow up on the defense programs, Brad.

We've obviously saw a step change in the backlog and the bookings. I presume some of that references the new POs coming on from these programs.

Is there any sort of color you can give us in terms of how you expect these programs to ramp or at what pace through the back half of even just this year? That'd be the first step.

As I say, there's a little bit of uncertainty right now, as one of them, we're waiting for redesign. It just never know how fast that will happen.

Just starting with the backlog, our backlog ramped, I don't know, $40 million. Probably half of that was related to these two programs, approximately.

It's significant in terms of the orders. They're indicating this would be due basically through this year into early next year, give you a bit of timing on it.

That timing can move. I have learned this many times when there's a new program and it trying to get into production.

Typically doesn't move faster than you expect. Typically, you end up with a handful of delays because something goes wrong or something doesn't work quite the way that they expected.

They're moving aggressively. The customers are moving aggressively on this.

Clearly, they're being driven to get it to market as fast as they can. Again, there's just a little bit of uncertainty.

No, that's fair. Then just switching gears a little bit, I know you talked about the broader corp dev backdrop and some of the transactions that took place in Europe.

I know you've been on the hunt there. Could you perhaps maybe just describe how your pipeline looks at this point or maybe even characterize your efforts to search out potential partners thus far?

Yeah. Sure.

Depends how you determine a target. There's probably, at the end of it all, I'm going to say roughly 10 companies that are of interest to me in that they're in Europe, they're in possibly a reasonable jurisdiction of Europe, they're focused on aerospace and defense.

That doesn't mean they're available. That's kind of the targets I've identified.

Then, I don't know, it's the never-ending game of acquisitions, right? Either they're willing to talk or they're not.

Then are they going to run a process or not? We're seeing some of that happen, and I just don't know how it's going to turn out yet.

I don't know how valuations are going to be. That's certainly been a topic in the past of, will these valuations be reasonable?

Don't know for sure. Time will tell.

The three that sold, I have seen nothing on valuations on those. They were private deals, the details were not announced, it's not helping me on valuations either.

No, understood. That's helpful.

Then just lastly, and I'll turn it over, I just wanted to go back to the question on capacity and bottlenecks and labor. Are you done, maybe as a first-part question, are you done with the shuffling or the shifting of work you described?

Fredericksburg nearly doubling production, Chatsworth, Haverhill also taking up production. It sounds like you've been quite successful in shifting and moving work.

Is that process largely optimized thus far, or is there more to go? Then on the second piece is just that you also described you're still searching out some new defense programs over and above those that are there and so just maybe give us a sense for where you think those can fit into the network as it stands in terms of your current sort of future capacity pipeline.

Thanks.

Okay. I guess first one, in terms of shifting work, we actually did have some success, which was good.

For sure we're not done. It's a never-ending process, I think we're forever optimizing it.

It's remarkably painful working this through with customers. It's just the nature of the business that when you're moving aerospace and defense product around, customers are cautious, they want lots of approvals, and they want to check everything and be very cautious in making these moves, it takes longer than we'd like.

Nevertheless, we continue to do it. Some of it is to manage capacity, some of it is to manage tariff-related stuff, trying to move non-US work out of the US or US work into the US, that type of stuff.

That's ongoing. We'll continue to work it.

Then your second question I don't know. You should ask that second question again.

Oh, just in effect if you've got a large backlog and pipeline already today, secured, but you're also on the search for some new programs, do you ultimately have places to stick it or fit it into the network today?

Actually, Q2, I talked about lots of interesting things going on, but Q2 was a good quarter for us and the sites really performed and they ramped. I'm really encouraged by that.

I believe we have room to continue to ramp. Again, it's just keeping the equipment moving more hours a day.

In Chatsworth Circuits, for instance, I was running one and a half, not even, one and a quarter shifts. If I add some people, the equipment runs more.

I think I could do a double in Chatsworth, not overnight, but I could do a double. I think I could do a double in Haverhill, not overnight, but a double.

I did a double in Fredericksburg. I think there's potential to do another double.

Again, it's not overnight. In terms of plant and equipment, I have capacity.

It's supporting it and staffing it to keep the equipment running. I'm happy to chase more work and put it into those types of sites.

Even Minnetonka, they could probably add 30% more capacity with staffing properly. Takes work, takes effort, takes a bit of time, but yeah, I can find places to put new work, for sure.

Appreciate the color, Brad. Thanks.

Okay. Thanks, Steve.

Good morning and congrats on the quarter. Maybe a follow-up on the last question, understanding staffing is and as has traditionally been the gating factor, the bottlenecking in Toronto being a priority.

Customer qualifications and any sort of regulatory certifications, those are facility-specific. I'm wondering, can you talk to your current set up?

Are there any meaningful qualifications or certifications that you're lacking for any facilities that otherwise preclude you from reallocating work to them? Is that at all a gating factor or is it really just the staffing in other facilities and, of course, the debottlenecking effort in Toronto?

Right. I guess the obvious one, for sure, there's a bunch of work we need to do on certifications for our Aerospace Hyderabad facility.

It has no certifications. That one is what we're hoping to work on through the balance of this year.

It's great we opened it, but we can add some people, but we got to get the certifications in place and the customer approvals in place for it to really contribute to our overall capacity. Other than that, not really.

Certifications is not an issue. Then it comes back to staffing.

I don't know, truly I was really really happy in Q2 in Minnetonka. It didn't show in their results, but their staffing activity and their staffing success was dramatically positively changed in the quarter, and we were at plus 20 people by the end of the quarter at that site.

The target we had for that site this year was plus 28, to do 20 in the quarter was huge. We got to keep them, we got to train them, it's not an instant overnight event, but again, they just really hit it out of the park in terms of their success on staffing as compared to what we've seen in prior quarters.

That's great. Just following up on India, and your comments around H2, amongst the other efforts you've got to get the facility qualified.

When in '27 should we envision that facility producing net new orders, to speak, no longer ramping up with reallocated work from other facilities?

I don't know. We'll see.

We want to do it as soon as we can. I'd love to be having it positively contribute at the beginning of '27.

That might be a little aggressive. Again, we've got to staff, train, and get certifications.

We're going to get the standard certification, kind of industry certifications, AS9100, 9100, that type of thing. That for sure our goal is to get that done this year.

The wild card is customer approvals. I don't control those.

We're going to start working on that. I've said this many times on these calls, a customer approval can be done in a few months, or my worst case is it was 5 years to get a customer approval.

We're going to work it, but that timeline is more uncertain than not within my control.

Got it. Maybe one last question for me.

We just saw a sort of press release this morning to expanded production of missiles and munitions in Europe in the US pending, I'm working for $21 billion in supplemental funds for munitions. I'm wondering in Circuits, can you talk about what you're seeing with respect to demand, specifically whether you're seeing any sort of replenishment demand come through given the use of these things in the conflict in Middle East and Ukraine as well?

Just wondering if you've seen that additional tailwind start to filter through at this point as far as your demand picture goes.

We're definitely starting to see it. I can say it's a bit of a combination of quoting it, but multi-year quotes on this type of thing.

Some orders. Definitely some of our, I don't know, 80 whatever it was, $80-some million of backlog was initial orders on replenishment of electronics for various weapons and warfare systems.

That's all for me. Thanks again.

Congrats.

Okay. Thanks, Russ.

Okay. Thank you all.

A replay of the call will be available until Monday, August 17th at the numbers noted on our press release. Replay will also be available on our website in a few days.

I thank you all for your interest and participation. Thank you.