0001193125-25-260708
SEC filingNet sales rose 22.1% YoY to $752.7M, driven by A&D and data center computing; gross margin slightly declined to 20.8% due to ramp-up costs in Penang.
For the quarter ended September 29, 2025, net sales increased 22.1% to $752.7 million from $616.5 million a year ago, driven by strong demand in aerospace and defense, data center computing, and networking end markets, with generative AI as a key catalyst. Gross profit rose 20.6% to $156.7 million, but gross margin contracted 30 basis points to 20.8% due to ramp-up costs at the Penang fabrication plant. Operating income surged 41.1% to $71.9 million, with operating margin expanding 130 basis points to 9.6% on higher volume and disciplined expense management. Net income jumped to $53.1 million from $14.3 million, reflecting improved operations and a $5.2 million tax benefit from the OBBBA legislation. Total other expense declined significantly as unrealized foreign exchange losses narrowed to $0.5 million from $16.2 million.
A&D: Segment sales grew 20.5% to $336.8 million, driven by missiles and munitions programs and strong demand in mission systems. Operating margin improved to 15.7% from 14.4% on favorable mix and operational execution. Commercial: Sales rose 24.1% to $408.9 million, led by data center computing and networking (AI-related). Operating margin slipped to 14.7% from 15.5% due to Penang ramp-up costs and product mix. RF&S Components: Sales increased 6.8% to $10.4 million, with operating margin expanding to 29.9% from 24.8% on higher volume and better execution.
Management outlined strategic investments: a new facility in Eau Claire, Wisconsin, and land acquisition in Penang, Malaysia, to support AI-driven demand and supply chain diversification. The Syracuse, New York facility is on track for volume production in the second half of 2026. Capital expenditures for full-year 2025 are expected between $265 million and $285 million, including $54 million for Syracuse. The company expects seasonal softness in Q1 and Q3, but remains optimistic about long-term growth in aerospace/defense and data center markets. No specific revenue or margin guidance was provided beyond these operational initiatives.