Magellan Aerospace (MAL) investor relations material

Executive summary

• Revenue for Q1 2026 increased 9.3% year-over-year to $285.1 million, with net income rising 52.2% to $16.5 million and adjusted EBITDA up 35.4% to $36.9 million.

• Commercial markets contributed 62.2% of revenues, while defence markets accounted for 37.8%.

• A significant teaming agreement was signed with Thyssenkrupp Marine Systems to support Canadian submarine projects.

Financial highlights

• Gross profit rose 20.4% to $40.6 million, with gross margin improving to 14.2% from 12.9% year-over-year.

• Administrative and general expenses increased 14.1% to $17.4 million, mainly due to higher salaries, bonuses, and IT spending.

• Other expense was $1.2 million, including a $2.2 million foreign exchange gain and $3.2 million in legal defence costs.

• Effective tax rate decreased to 23.0% from 27.8% year-over-year.

• Cash used in operating activities was $1.8 million, compared to $21.3 million provided in Q1 2025, mainly due to increased working capital needs.

• Investing activities used $15.5 million, primarily for property, plant, and equipment.

• Financing activities provided $4.4 million, driven by increased bank indebtedness and a new $8 million government loan.

Outlook and guidance

• Commercial aerospace outlook remains cautiously optimistic, supported by strong Airbus and Boeing order backlogs, though engine supply constraints persist.

• Defence market expected to see sustained growth due to increased global spending and geopolitical tensions.

• Industry faces ongoing supply chain, labor, and geopolitical risks, with caution advised for the remainder of 2026.