The information set forth below should be read in conjunction with the accompanying condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q. The following discussion may contain forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those factors discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in Item 1A. “Risk Factors” and “Forward-Looking Statements.” Business Overview We are a premier provider of advanced design, engineering, and vertically integrated manufacturing solutions for leading and next-generation space and defense technology companies. We build complex, mission-critical subsystems for extreme operating environments serving three core markets: Space and Launch Systems, Defense Aviation and Airborne Systems, and C5ISR and Precision Strike Systems. With decades of space and defense manufacturing heritage, we combine deep material science and intellectual property (“IP”)-enabled process expertise with the ability to enable rapid prototyping, enhance new product development, and responsively scale production. Across our nationwide network of advanced manufacturing facilities, we continuously support a balanced mix of next-generation technology and platform development, large scale production programs, and aftermarket sustainment for enduring platforms. Our core service offerings include (i) design and analysis, including concurrent engineering, structural design and analysis, and tooling; (ii) fabrication and assembly, including composite and metallic fabrication, forming and precision machining, and finishing; and (iii) inspection, qualification, and testing, including in-process inspection, three-dimensional metrology, non-destructive testing, and thermal and structural testing. These offerings are enabled by our complementary metal, composite, and polymer manufacturing capabilities and support the delivery of mission-critical subsystems and assemblies designed to perform in demanding environments. Stock Split and Initial Public Offering On June 2, 2026, our registration statement on Form S-1 for our initial public offering (“IPO”) was declared effective. Following the effectiveness of the registration statement, we effected a 872,901.03-for-1 stock split of our common stock and increased the number of our authorized shares of common stock to 1.0 billion and our shares of undesignated preferred stock to 50.0 million. On June 4, 2026, we completed our IPO and issued and sold 32.5 million shares of our common stock at a public offering price of $20.00 per share. Following the IPO, the underwriters exercised an option to purchase 1.65 million additional shares of our common stock. We received net proceeds of approximately $635.6 million after deducting underwriting discounts, commissions, and other offering costs of approximately $47.4 million. Acquisitions On March 4, 2025, we acquired 100% of the equity ownership of NeXolve Holdings, LLC (“NeXolve”), bringing deployable space technology and advanced polymer expertise to the Company. On January 16, 2026, we acquired 100% of the issued and outstanding equity of Vestigo Aerospace, Inc. ("Vestigo"), a business that designs and develops passive de-orbit systems, including the Spinnaker product line 24 of dragsail technology, and related assemblies for reliable end-of-mission space vehicle and other low-earth orbit satellite disposal. On March 2, 2026, we acquired 100% of the issued and outstanding equity of Consolidated Boring Inc. (“CBI”) and Ultracor, Inc. (“Ultracor”). CBI is a vertically integrated two-site advanced manufacturing platform that specializes in complex assemblies and highly-engineered components for a broad range of precision strike systems. Ultracor is a supplier of highly specialized and IP-enabled honeycomb core materials that are used in defense aviation and space platforms, including next generation tiltrotor aircraft and navigational satellites. See Note 4, Business Combinations, in the notes to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, for additional information about our acquisitions of Vestigo, CBI, and Ultracor. Recent Developments We used approximately $626.2 million of IPO proceeds to repay outstanding borrowings under our 2022 Credit Agreement, consisting of $56.1 million repayment of our revolving line of credit and $565.0 million repayment of term loan principal balance, plus accrued and unpaid interest of $5.1 million. Refer to Note 10, Long-Term Debt, for additional disclosure regarding our long-term debt. Key Trends Affecting Our Performance We operate in an industry and in markets that are experiencing strong, sustained growth. Demand is increasing for spacecraft and related systems capable of meeting the complex mission requirements of commercial launch firms and space companies, the U.S. government, and its allies. Likewise, the emerging and ongoing geopolitical conflicts affecting the U.S. and its allies and the dynamic global threat environment are driving demand across existing platforms as well as investment in the development of next-generation technology. The replenishment and rearmament needs of the U.S. and its allies as a result of these geopolitical conflicts has prompted us to collaborate closely with the U.S. government and our suppliers and customers to expand production and deliver critical offerings that support U.S. and allied security needs. These factors have increased demand for our products and capabilities, which in turn has contributed to revenue growth that we believe has partially offset the effects of supply chain challenges, inflationary pressures, and other causes of market volatility in our operating environment. Our operating results are significantly influenced by U.S. government spending priorities and budget and appropriations decisions. Increases in U.S. defense spending, particularly for advanced space, defense aviation, C5ISR, and precision strike equipment, drive growth in our business. Budget restrictions, cost-reduction initiatives, or changes in the budgeted volume and relative mix of specific U.S. government programs may result in reduced or deferred U.S. government spending, which could in turn impact our business and the results of our operations. In particular, shifts in U.S. government spending and investment priorities relating to defense, space, intelligence, homeland security, innovation, and technology are most likely to impact our results. As a newly public company, we will implement additional procedures and processes to address the standards and requirements applicable to public companies. Specifically, accounting, legal, and personnel-related expenses and directors’ and officers’ insurance costs will increase as we establish more comprehensive compliance and governance functions, enhance and mature our internal controls over financial reporting as we comply with the 25 requirements of the Sarbanes-Oxley Act, and prepare and distribute periodic reports in accordance with SEC rules. Results of Operations The following table presents the results of our operations and percentages of revenue for the three months and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands, except percentages) Dollars % of Revenue Dollars % of Revenue Dollars % of Revenue Dollars % of Revenue Revenue $ 167,318 100.0 % $ 113,499 100.0 % $ 301,669 100.0 % $ 224,523 100.0 % Cost of goods sold 130,132 77.8 % 81,472 71.8 % 230,904 76.5 % 161,612 72.0 % Gross profit 37,186 22.2 % 32,027 28.2 % 70,765 23.5 % 62,911 28.0 % Selling, general, and administrative expenses 123,315 73.7 % 11,579 10.2 % 151,617 50.3 % 23,946 10.7 % Intangible asset amortization expense 10,103 6.0 % 6,538 5.8 % 18,213 6.0 % 13,076 5.8 % Operating (loss) income (96,232) (57.5) % 13,910 12.3 % (99,065) (32.8) % 25,889 11.5 % Interest expense, net 26,249 15.7 % 16,934 14.9 % 44,020 14.6 % 33,654 15.0 % Loss before income taxes (122,481) (73.2) % (3,024) (2.7) % (143,085) (47.4) % (7,765) (3.5) % Income tax expense 31,490 18.8 % 1,651 1.5 % 26,018 8.6 % 4,223 1.9 % Net loss $ (153,971) (92.0) % $ (4,675) (4.1) % $ (169,103) (56.1) % $ (11,988) (5.3) % Three months ended June 30, 2026, compared with three months ended June 30, 2025 Revenue Three Months Ended June 30, (in thousands, except percentages) 2026 2025 Change % Change Space and Launch Systems $ 38,802 $ 24,476 $ 14,326 58.5 % Defense Aviation and Airborne Systems 78,929 75,309 3,620 4.8 % C5ISR and Precision Strike Systems 49,587 13,714 35,873 261.6 % Revenue $ 167,318 $ 113,499 $ 53,819 47.4 % Revenue for the three months ended June 30, 2026 increased by approximately $53.8 million, or 47.4%, to $167.3 million as compared with $113.5 million for the three months ended June 30, 2025, with revenue increases 26 attributable to growth across all end-markets, as described in further detail below. The increase in revenue included approximately $31.3 million generated from the acquisitions completed in 2026. Space and Launch Systems Revenue growth in Space and Launch Systems of $14.3 million was primarily attributable to increased volumes on launch vehicle and satellite production programs amid higher launch cadence and proliferated constellations. Defense Aviation and Airborne Systems Revenue growth in Defense Aviation and Airborne Systems of $3.6 million was primarily attributable to sustained aftermarket demand across a large installed base of aircraft, as well as continued new production activity. Demand is supported by increases in global defense budgets across a broad range of fixed-wing and rotorcraft platforms, including increasing funding for next-generation fixed-wing, vertical lift, and autonomous airborne systems. C5ISR and Precision Strike Systems Revenue growth in C5ISR and Precision Strike Systems of $35.9 million was primarily attributable to higher revenue across a range of integrated air and missile defense systems and radar programs. Near term demand is expected to remain supported by missile and munition rearmament, layered missile defense priorities, and continued national defense and budget investments in next-generation precision strike systems. Gross Profit and Costs of Goods Sold Three Months Ended June 30, (in thousands, except percentages) 2026 2025 Change % Change Cost of goods sold $ 130,132 $ 81,472 $ 48,660 59.7 % Gross profit $ 37,186 $ 32,027 $ 5,159 16.1 % Gross profit margin 22.2 % 28.2 % Cost of goods sold increased $48.7 million, or 59.7%. The increase was primarily the result of the revenue growth described above, including increased cost of goods sold of $23.6 million from the acquisitions completed in 2026 as well as an increase of approximately $10.0 million in share-based compensation expense classified in cost of goods resulting from the vesting of employee equity incentive units upon the completion of our IPO. Excluding the effects of the share-based compensation expense, gross profit increased by $15.2 million, or 47.0%, with acquisitions contributing $7.7 million of incremental gross profit. Excluding the effects of the share-based compensation, gross profit margin was consistent with prior year at 28.3%, as sales volume and improved throughput were offset by a change in product mix towards ramping programs with lower initial margins. 27 Operating Expenses Three Months Ended June 30, (in thousands, except percentages) 2026 2025 Change % Change Selling, general and administrative expenses $ 123,315 $ 11,579 $ 111,736 965.0 % Intangible asset amortization expense $ 10,103 $ 6,538 $ 3,565 54.5 % Selling, general and administrative expenses increased primarily due to approximately $99.3 million in increased share-based compensation expense due to the vesting of employee equity incentive units upon the completion of our IPO. Professional services and other transaction costs related to acquisitions and the IPO were $5.2 million for the three months ended June 30, 2026, compared with less than $0.1 million of such costs incurred in the three months ended June 30, 2025. Integration and restructuring costs increased by $0.7 million for the three months ended June 30, 2026, compared with the same period in the prior year. Additionally, the operations of the acquisitions completed in 2026 contributed incremental selling, general and administrative expense of $3.1 million. The remaining increase reflects ongoing expansion of operational support capabilities as well as increased public company administrative and compliance costs. Intangible asset amortization expense increased due to an increase in our acquired intangible assets in connection with acquisitions disclosed in Note 4, Business Combinations, in the notes to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. Interest Expense, Net Three Months Ended June 30, (in thousands, except percentages) 2026 2025 Change % Change Interest expense, net $ 26,249 $ 16,934 $ 9,315 55.0 % Interest expense, net increased by $9.3 million for the three months ended June 30, 2026, compared to the same period in the prior year. The increase was primarily attributable to $6.7 million in deferred debt discounts and issuance cost write-offs upon the repayment of our debt in June 2026, as well as higher average outstanding debt balances resulting from borrowings incurred in connection with the acquisitions completed in 2026. See Note 10, Long-Term Debt, in the notes to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, for additional information. Income Tax Expense Three Months Ended June 30, (in thousands, except percentages) 2026 2025 Change % Change Income tax expense $ 31,490 $ 1,651 $ 29,839 1807.3 % The Company recognized an income tax expense of $31.5 million for the three months ended June 30, 2026, as compared with income tax expense of $1.7 million in the three months ended June 30, 2025. The increase in income tax expense is materially related to the change in the valuation allowance resulting from the application of 28 the Company’s estimated annual effective tax rate to year-to-date pre-tax losses as well as higher projected pre-tax earnings in 2026 as compared with 2025 (excluding IPO related charges). Six months ended June 30, 2026, compared with six months ended June 30, 2025 Revenue Six Months Ended June 30, (in thousands, except percentages) 2026 2025 Change % Change Space and Launch Systems $ 73,853 $ 50,807 $ 23,046 45.4 % Defense Aviation and Airborne Systems 158,352 147,351 11,001 7.5 % C5ISR and Precision Strike Systems 69,464 26,365 43,099 163.5 % Revenue $ 301,669 $ 224,523 $ 77,146 34.4 % Revenue for the six months ended June 30, 2026, increased by approximately $77.1 million, or 34.4%, to $301.7 million as compared with $224.5 million for the six months ended June 30, 2025, with revenue increases attributable to growth across all end-markets, as described in further detail below. The increase in revenue included approximately $44.8 million generated from the acquisitions completed in 2025 and 2026. Space and Launch Systems Revenue growth in Space and Launch Systems of $23.0 million was primarily attributable to increased volumes on launch vehicle and satellite production programs amid higher launch cadence and proliferated constellations. Defense Aviation and Airborne Systems Revenue growth in Defense Aviation and Airborne Systems of $11.0 million was primarily attributable to sustained aftermarket demand across a large installed base of aircraft, as well as continued new production activity. Demand is supported by increases in global defense budgets across a broad range of fixed-wing and rotorcraft platforms, including increasing funding for next-generation fixed-wing, vertical lift, and autonomous airborne systems. C5ISR and Precision Strike Systems Revenue growth in C5ISR and Precision Strike Systems of $43.1 million was primarily attributable to higher revenue across a range of integrated air and missile defense systems and radar programs. Near term demand is expected to remain supported by missile and munition rearmament, layered missile defense priorities, and continued national defense and budget investments in next-generation precision strike systems. 29 Gross Profit and Costs of Goods Sold Six Months Ended June 30, (in thousands, except percentages) 2026 2025 Change % Change Cost of goods sold $ 230,904 $ 161,612 $ 69,292 42.9 % Gross profit $ 70,765 $ 62,911 $ 7,854 12.5 % Gross profit margin 23.5 % 28.0 % Cost of goods sold increased $69.3 million or 42.9%. The increase was primarily the result of the revenue growth described above, including increased cost of goods sold of $30.9 million from the acquisitions completed in 2025 and 2026 as well as an increase of approximately $9.8 million in share-based compensation expense classified in cost of goods sold resulting from the vesting of employee equity incentive units upon the completion of our IPO. Excluding the effects of the share-based compensation expense, gross profit increased by $17.7 million, or 28.0%, with acquisitions contributing $13.9 million of incremental gross profit. Excluding the effects of the share-based compensation, gross profit margin decreased as increased sales volume and improved throughput were offset by a change in product mix towards ramping programs with lower initial margins. Operating Expenses Six Months Ended June 30, (in thousands, except percentages) 2026 2025 Change % Change Selling, general and administrative expenses $ 151,617 $ 23,946 $ 127,671 533.2 % Intangible asset amortization expense $ 18,213 $ 13,076 $ 5,137 39.3 % Selling, general and administrative expenses increased primarily due to approximately $99.4 million in increased share-based compensation expense due to the vesting of employee equity incentive units upon the completion of our IPO. Professional services and other transaction costs related to acquisitions and the IPO were $19.2 million for the six months ended June 30, 2026, as compared with $0.5 million in the six months ended June 30, 2025. Integration and restructuring costs increased $0.9 million for the six months ended June 30, 2026, compared with the same period in the prior year. Additionally, the operations of the acquisitions completed in 2025 and 2026 contributed incremental selling, general and administrative expense of $4.3 million. The remaining increase reflects ongoing expansion of operational support capabilities as well as increased public company administrative and compliance costs. Intangible asset amortization expense increased due to an increase in our acquired intangible assets in connection with acquisitions disclosed in Note 4, Business Combinations, in the notes to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. Interest Expense, Net Six Months Ended June 30, (in thousands, except percentages) 2026 2025 Change % Change Interest expense, net $ 44,020 $ 33,654 $ 10,366 30.8 % 30 Interest expense, net increased by $10.4 million for the six months ended June 30, 2026, compared to the same period in the prior year. The increase was primarily attributable to $6.7 million in deferred debt discounts and issuance cost write-offs upon the repayment of our debt in June 2026, as well as higher average outstanding debt balances resulting from borrowings incurred in connection with the 2026 acquisitions. See Note 10, Long-Term Debt, in the notes to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, for additional information. Income Tax Expense Six Months Ended June 30, (in thousands, except percentages) 2026 2025 Change % Change Income tax expense $ 26,018 $ 4,223 $ 21,795 516.1 % The Company recognized an income tax expense of $26.0 million for the six months ended June 30, 2026, as compared with income tax expense of $4.2 million in the six months ended June 30, 2025. The increase in income tax expense is materially related to the change in valuation allowance resulting from the application of the Company’s estimated annual effective tax rate to year-to-date pre-tax losses as well as higher projected pre-tax earnings in 2026 compared to 2025 (excluding IPO related charges). This was partially offset by a $13.8 million benefit attributable to the partial release of the Company's valuation allowance associated with the increased capacity to realize deferred tax assets after the acquisition of CBI. Key Performance Indicators and Non-GAAP Financial Measures We manage and evaluate our business using key performance indicators (“KPIs”) and non-GAAP measures, including contract backlog, adjusted EBITDA, and adjusted EBITDA margin, to monitor operating performance, assess contract execution, and support capital allocation decisions. Contract Backlog We believe contract backlog, which represents the total value of existing contracts, less amounts previously invoiced, as of the backlog date, is a key measure of our business growth. As of June 30, 2026, contract backlog was $1.13 billion as compared with contract backlog of $0.87 billion as of December 31, 2025. The increase of $258.7 million during the six months ended June 30, 2026 was primarily driven by approximately $178.5 million of incremental backlog from the acquisition of CBI, as well as the net effect of new orders received in excess of billings during the six months ended June 30, 2026. Non-GAAP Financial Measures Our chief operating decision maker, who is the Chief Executive Officer, makes resource and operating decisions by evaluating performance and business results on a consolidated basis using the non-GAAP financial measures including adjusted EBITDA. The non-GAAP financial measures are supplemental measures of our performance that we believe help investors understand our financial condition and operating results and assess our future prospects. We believe that presenting these non-GAAP financial measures, in addition to the corresponding 31 GAAP financial measures, is important because they exclude non-cash or other items that may not be indicative of or are unrelated to our core operating results and the overall health of our company. We believe that providing this information assists our investors in understanding our operating performance and the methodology used by management to evaluate and measure such performance. When read in conjunction with our GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in our underlying businesses and can be used by management as one basis for financial, operational and planning decisions. Finally, these measures are often used by analysts and other interested parties to evaluate companies in our industry. We define adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, as adjusted to eliminate certain non-cash charges and other items not reflective of ongoing operations, which include: acquisition-related expenses, integration expenses and restructuring costs, share-based compensation expense, and other costs. We define adjusted EBITDA margin as adjusted EBITDA expressed as a percentage of revenue. Although we use adjusted EBITDA and adjusted EBITDA margin for the purposes described above, these non-GAAP financial measures have inherent limitations and should neither be considered in isolation nor as substitutes for analyzing our financial results as reported under GAAP. For example: •Adjusted EBITDA and adjusted EBITDA margin do not reflect significant interest expense or the related cash requirements to service our debt; •These measures exclude depreciation and amortization, which are non-cash charges, but do not account for the future cash needs to replace depreciated or amortized assets; •These measures exclude substantial amortization expense associated with our intangible assets, limiting the measures’ usefulness; •These measures do not include our provision for income taxes which generally represents taxes paid in the period or that are payable in the future, which are necessary aspects of our operations; •These measures exclude share-based compensation expense, which is an important component of employee compensation; and •These measures exclude certain acquisition-related and post-merger integration and restructuring costs, which are necessary elements of certain acquisitions. Because of these limitations, adjusted EBITDA and adjusted EBITDA margin should not be considered as measures of cash available for investment in our business. Management addresses these limitations by evaluating these metrics alongside other GAAP measures, such as revenue, to assess our operating performance. These metrics are non-GAAP financial measures, are not defined by GAAP, and should not be considered alternatives to net loss or cash flows from operations as determined under GAAP. Moreover, our methods of calculating adjusted EBITDA and adjusted EBITDA margin may differ from those used by other companies with similarly titled measures and therefore may not be directly comparable. 32 The following table sets forth the reconciliation of net loss to adjusted EBITDA and presentation of net loss margin and adjusted EBITDA margin for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, (in thousands, except percentages) 2026 2025 2026 2025 Net loss $ (153,971) $ (4,675) $ (169,103) $ (11,988) Income tax expense 31,490 1,651 26,018 4,223 Interest expense, net 26,249 16,934 44,020 33,654 Depreciation and amortization 15,127 9,664 27,236 19,387 Share-based compensation expense 110,086 802 110,842 1,604 Transaction costs(1) 5,176 48 19,161 562 Integration and restructuring costs(2) 2,047 1,336 4,320 3,377 Legal contingencies loss(3) — 109 — 116 Management fees(4) 233 421 482 677 Other(5) — 16 — 37 Adjusted EBITDA $ 36,437 $ 26,306 $ 62,976 $ 51,649 Net loss margin (92.0)% (4.1)% (56.1)% (5.3)% Adjusted EBITDA margin 21.8% 23.2% 20.9% 23.0% (1)Includes transaction-related costs associated with mergers, acquisitions, and costs related to the IPO. (2)Includes acquisition integration and restructuring costs, including plant consolidation and reconfiguration, reductions in force, and executive severance expense. (3)Includes losses from legal disputes and settlements from third parties. (4)Includes management fees paid to our parent company in accordance with our management services agreement which terminated upon the closing of the IPO. (5)Includes other costs that we believe are not indicative of day-to-day operations of the business. Liquidity and Capital Resources The following table summarizes our capitalization as of June 30, 2026, and December 31, 2025: June 30, 2026 December 31, 2025 (in thousands, except ratios) Cash and cash equivalents $ 18,108 $ 15,475 Total debt (including current portion) 405,796 643,443 Shareholder's equity 827,881 159,464 Total capitalization (debt plus equity) $ 1,233,677 $ 802,907 Total debt to total capitalization 0.33 0.80 Our principal historical liquidity requirements have been for acquisitions, capital expenditures, servicing indebtedness and working capital needs. Other than as a result of the growth of our business both organically and through acquisitions we may make, we do not expect there to be substantial changes in our future capital requirements. We fund our investing activities primarily from cash provided by our operating and financing activities. 33 On March 2, 2026, we entered into Amendment No. 3 to the 2022 Credit Agreement in connection with our acquisition of CBI. Pursuant to Amendment No. 3, we obtained incremental term loans of $180.0 million, drew the full $150.0 million available under our existing delayed draw term loan commitment, increased our revolving line of credit commitments by $25.0 million to a total of $125.0 million, and drew $31.1 million under our revolving line of credit. The proceeds from these borrowings were primarily used to fund the acquisition of CBI and pay related transaction costs. As a result of Amendment No. 3, our aggregate principal amount of term loans outstanding (including amounts drawn under delayed draw term loans) increased to $973.4 million. In June 2026, we used approximately $570.1 million of the IPO proceeds to repay $565.0 million of principal balance under the 2022 Credit Agreement plus accrued and unpaid interest and $56.1 million of IPO proceeds to repay all then outstanding borrowings under our revolving line of credit. As of June 30, 2026 and December 31, 2025, the Company had $125.0 million and $100.0 million, respectively, available under our revolving line of credit. There is no remaining availability under our delayed draw term loan commitment. See Note 10, Long-Term Debt, for additional details regarding our debt arrangements. Based on our current outlook, we believe that net cash provided by operating activities and available borrowings under the 2022 Credit Agreement will be sufficient to fund our cash requirements for at least the next 12 months. Cash Flows The following table summarizes our cash flows for the six months ended June 30, 2026 and 2025: Six Months Ended June 30, (in thousands, except percentages) 2026 2025 Change % Change Net cash used in operating activities $ (82,091) $ (16,666) $ (65,425) 392.6 % Net cash used in investing activities $ (327,449) $ (14,364) $ (313,085) 2179.7 % Net cash provided by financing activities $ 412,173 $ 11,166 $ 401,007 3591.3 % Cash Flows from Operating Activities Cash used in operating activities increased by $65.4 million. This increase was primarily the result of an approximately $36.4 million net increase in contract assets and inventory reflecting a mix of seasonality as well as production investment to meet ramping demand under orders expected to be delivered over the balance of the fiscal year. The cash outflows associated with these investments were partially offset by favorable changes in accounts receivable resulting from the collection of receivables generated by strong sales in the fourth quarter of fiscal 2025. Additionally, the increase in acquisitions and IPO related transaction expenses as compared with the prior year period also contributed to the increase in cash used in operating activities. Cash paid for interest increased by $2.6 million to $40.8 million in the six months ended June 30, 2026, as compared with $38.2 million in the six months ended June 30, 2025, due to higher average debt levels. Cash Flows from Investing Activities The increase in cash used in investing activities was primarily attributable to higher net cash payments related to acquisitions, as well as from increased capital expenditures. We expect capital expenditures in fiscal 2026 to be in 34 the range of $50.0 million. The majority of our planned fiscal 2026 capital expenditures are capital investments designed to improve our manufacturing efficiency, expand our capabilities, and respond to ramping demand signals from our customers. Cash Flows from Financing Activities The increase in cash provided by financing activities was driven primarily by the completion of our IPO, which resulted in net proceeds of approximately $635.6 million that were partially offset by debt repayments net of debt proceeds of $240.7 million. We also received $18.7 million in capital contributions from AA&D Holdings. These increases were partially offset by higher payments of long-term debt, payments on finance lease liabilities, and payments on equipment and leaseback financing obligations. Contractual Obligations Our material contractual obligations at June 30, 2026 and December 31, 2025 consist primarily of borrowings under the 2022 Credit Agreement (and related interest payments), operating and finance lease obligations, and the leaseback financing obligation related to our Enfield facility sale-leaseback arrangement. Refer to Note 10, Long-Term Debt. Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements, as defined in Regulation S-K, that have or are reasonably likely to have current or future effect on our financial condition, results of operations, or cash flows, as of June 30, 2026, or December 31, 2025. Critical Accounting Estimates Our critical accounting policies are discussed in Management's Discussion and Analysis of Financial Condition and Results of Operations and notes accompanying the audited consolidated financial statements that appear in the Prospectus. Except as otherwise disclosed in the unaudited condensed consolidated financial statements and accompanying notes included in this Quarterly Report on Form 10-Q, there were no material changes subsequent to the filing of the Prospectus, in our critical accounting policies or in the assumptions or estimates used to prepare the financial information appearing in this Quarterly Report on Form 10-Q. Recently Issued and Adopted Accounting Pronouncements Recently issued and adopted accounting pronouncements are described in Note 2, Summary of Significant Accounting Policies, in the notes to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. Emerging Growth Company We currently qualify as an “emerging growth company” under the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. Accordingly, we have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until 35 the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.