Oct 30, 2026 earnings call — Electronics-led growth and raised outlook
Raised fiscal 27 sales outlook and reported record quarterly order intake of approximately $273 million.
Revenue $0.2B (est $0.2B) · EPS $2.41 (est $2.34)
Key quotes
"Electronics segment led the way with organic growth of nearly 30%,"
"New product sales grew approximately 56% to approximately $17.4 million."
"we are now anticipating, that we are going to start making, actually manufacturing and shipping products out of Croatia."
Analyst Q&A 7
AI data centers and Grid importance
Q (Chris Moore · CJS): How much of the company's growth comes from AI data centers, how important is data-center AI to the Grid business, and would long-term supply agreements be discussed? Also, what must happen for aerospace & defense missile revenue to approach the high end of the prior range?
A: Management said data centers are a meaningful growth driver but not the only one. Of the organic growth expected this year, about 30% comes from data centers, and in Grid about three quarters of the Grid growth is from data centers while the rest is from rising electricity demand. They also said customers are interested in multiyear supply arrangements and that achieving the higher missile revenue range depends on government and prime contractors making long-term procurement commitments.
"Of the 100 million plus we expect in organic growth this year, it is about 30% of that will come from data centers." — David A. Dunbar (CEO·CHAIR)
power orders and Croatia ramp
Q (Ross Sparenblek · William Blair): Can you separate power orders from legacy electronics orders, and when will the Croatia facility begin shipping? Also, is power leading electronics growth and where will fiscal year revenue land?
A: They said total electronics book-to-bill was 1.23 and legacy and Grid orders were each above 1.2. Organic growth was almost 30% with every business unit up more than 20%. For Croatia, they are completing customer audits and expect to begin manufacturing and shipping products out of Croatia within this quarter. They reiterated confidence in the fiscal range and said this year they expect at least $190 million to $200 million in Grid sales.
"We are now anticipating, that we are going to start making, actually manufacturing and shipping products out of Croatia. You know, within this quarter." — Ademir Sarcevic (CFO)
new products, commercial focus, buybacks
Q (Matt Koranda · Roth Capitals): Does the new-products sales line include data center products? And what are the new electronics leadership priorities and capital allocation (buybacks vs M&A)?
A: David clarified new-product sales into data centers are counted inside the data center box, not the standalone new-product number. Ademir said he is reorganizing commercial teams, adding global key-account managers, expanding into new grid opportunities, and focusing on capacity expansion and commercial execution. David added the board increased buyback authorization to be opportunistic, they remain committed to $40 million to $50 million of CapEx this year, and the M&A funnel is becoming more active.
"We are still full speed ahead on the capacity expansion and that $40 million to $50 million CapEx this year." — David A. Dunbar (CEO·CHAIR)
margins and FY28 targets
Q (Tom · JPMorgan): How much of margin improvement is mix versus productivity and operating leverage, and how confident are you in the $1.1 billion revenue and 23% operating margin by fiscal 2028?
A: They said margin improvement comes from both higher-margin business mix and productivity improvements, including fixing prior ERP-related issues that hurt margins. Management said they are confident in the $1.1 billion revenue and 23% operating margin target, and highlighted that new products are a growing, controllable source of higher-margin sales — this year they expect $94 million of new-product sales with strong year-over-year growth.
"Mean, this year we will have $94 million of new products, which think of where we came from 4 or 5 years ago, it was almost close to 0." — David A. Dunbar (CEO·CHAIR)
facility rollouts and A&D pipeline
Q (Michael Shlisky · D.A. Davidson): Which electronics expansion sites are open now and which will come online this fiscal year? Also, what is in the aerospace & defense backlog and is mix improving margins?
A: Ademir listed four expansion pieces: India capacity up ~30% year-over-year, Croatia completing audits and starting shipments this quarter with ramp in Q3/Q4, Mexico up and shipping, and a new Houston facility about 3–3.5x the current size with keys expected in June/July next year and production following after a few months. David said the new aerospace and defense programs use spin forming and are marginally higher margin than the core business.
"And we expect to get the keys from that site in June, July time frame of next year and then probably gonna take us, you know, couple of months to get the production fully up and running." — Ademir Sarcevic (CFO)
corporate costs and data center concerns
Q (Gary Prestopino · Barrington): Why did corporate expense rise year-over-year and is that the run rate? Also, if adjusted EPS grows mid/high teens, will adjusted EBITDA grow similarly? And what about pushback against data centers internationally?
A: Ademir said corporate expense rose about $3 million year-over-year, with roughly two-thirds due to higher variable compensation, stock comp and rising medical costs, and about one-third from one-time executive recruiting and transfers; he expects corporate costs to come down in Q2 and normalize in Q3/Q4. On EBITDA vs EPS, he said mid-teens EBITDA growth is probably similar. David said they are seeing more data center planning outside the U.S., some local debates, and that individual programs may shift timing or location but customers are exploring options to bring capacity online.
"And about 2-thirds of that increase Gary, relate to, you know, higher variable compensation expenses and stock comp. as well as higher medical costs." — Ademir Sarcevic (CFO)
capacity unlock and customer ordering
Q (Ross Sparenblek · William Blair): As capacity comes online, will shipments jump or ramp linearly? What are customer purchasing patterns and forecasts? How will the company gain more market share and is M&A needed?
A: Ademir said capacity unlocks will probably be more linear, orders remain very strong, and they have no worry about filling new capacity. He said some customers now give forecasts of 6 to 12 months, which improves visibility, and added capacity tends to fill quickly once available. David said customers are transparent and run interactive, multi-quarter planning with the company, and management said they can pursue more of the larger market and will use organic expansion plus selective M&A when opportunities arise.
"So some of the customers are now looking and giving us a forecast of 6 to 12 months out." — Ademir Sarcevic (CFO)