Greetings. Welcome to the Allient Inc.'s second quarter fiscal year 2026 financial results conference call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Craig Mihalik, investor relations. Thank you. Please go ahead. Yeah. Thank you. Good morning, everyone. We certainly appreciate your time today as well as your interest in Allient. On the call today are Dick Warzala, our Chairman, President, and CEO, and James Michaud, our Chief Financial Officer. Dick and Jim will review our second quarter 2026 results, provide a strategic and operational update, and share our outlook. We'll open the line for questions. As a reminder, our earnings release and the accompanying slide presentation are available on our website at allient.com. If following along, please turn to slide two for our safe harbor statement. During today's call, we may make forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those indicated. These risks and factors are outlined in our SEC filings and in the earnings release. We will also discuss certain non-GAAP measures, which we believe will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We have provided reconciliations of non-GAAP to comparable GAAP measures in the tables accompanying the earnings release as well as the slides. With that, please turn to slide three. I'll turn it over to Dick to begin. Thank you, Craig. Welcome everyone. We delivered an excellent second quarter. More importantly, one that further demonstrates the earning power of the model when stronger demand, improved mix, and disciplined execution come together. The quality of the quarter was evident across the P&L, with strong top-line growth, record gross margin, a significant increase in earnings. We also saw excellent order activity with record bookings in the quarter. In the period, that resulted in a 1.31 times book-to-bill ratio. That gives us improved visibility into the second half of the year and supports a constructive view as we move through 2026. What stands out is not just the magnitude of the quarterly improvement, but the quality of it. We saw broad-based demand across key targeted markets, especially industrial automation, data center and other infrastructure, aerospace and defense, and medical applications. At the same time, the operating work we have been doing throughout the organization is increasingly showing up in better margins, better leverage, and better earnings conversion. This quarter also enforces the value of the portfolio we have been shaping. We have intentionally positioned Allient toward higher value motion, controls, and power applications where our engineering content is deeper, our customer relationships are stronger, and the margin profile is more attractive over time. That strategy is helping us improve not only growth, but also the quality and durability of that growth. If you look at the end market mix, the portfolio continues to align well with long-term secular drivers. Industrial remains an area of particular encouragement for us, especially where our technologies support automation, electrification, energy efficiency, and digital infrastructure. Those are markets where we believe our capabilities are differentiated and where the opportunities continue to expand. Data center and other infrastructure have become an increasingly meaningful contributor within our industrial business. As we indicated previously, we plan to provide investors with more visibility into this market, given its growth profile and strategic importance to the portfolio. In the second quarter, sales tied to data center and infrastructure applications were $16.3 million, or 10.6% of total revenue, up 60% from the prior year period. On a trailing 12-month basis, sales were $57.1 million, or 9.9% of total sales, up 69% year-over-year. This opportunity is centered on the power quality layer of the data center, where our Allient Power portfolio brings deep domain expertise. Through active and passive harmonic filters, line reactors, and related solutions, we help customers reduce harmonics, stabilize and clean the electrical waveform, and meet stringent power quality standards, including IEEE 519 compliance. The result is more reliable and efficient power for increasingly compute-dense data center environments, stronger protection for critical equipment, and a strong fit with the challenges operators face as AI and other high-power applications increase load and complexity. Stepping back, the second quarter was about more than just strong reported results. It was another proof point that the actions we have taken to reposition the company, simplify the organization, and drive better execution are translating into stronger financial performance and a more resilient operating model. Turning to slide four, I want to spend a moment on Simplify to Accelerate NOW or STAN, because it is an important part of why the organization is performing better. STAN is driving better decision-making, execution, margin, and responsiveness. The key point is that it is not a single initiative or short-term program. It is a company-wide mindset that shapes how we think, make decisions, solve problems, collaborate across teams, and serve customers every day. In simple terms, STAN is how we work. At its core, STAN is designed to unleash more of the organization's potential by empowering our teams to act with urgency, ownership, and accountability. The now in STAN matters. It reinforces a get it done mentality, removing obstacles, we work forward and delivering results faster rather than waiting for things to happen. It is also supported by a practical tool set. That includes our Allient Systematic Tools, or AST, which helps standardize, simplify, and continuously improve how we work. It also includes digital and IT tools that reduce manual processes and redundancy, as well as AI and other enabling technologies where they can improve decision-making, productivity, and execution. What matters most, though, is the result. In the second quarter, operational improvements under STAN contributed to record gross margin through better mix, execution, and cost discipline. We are seeing faster decision-making, stronger accountability, and better responsiveness across the company, and those improvements are helping create a more scalable and more profitable operating model. The annualized savings figures on the slide, $10 million in 2024 and $6 million in 2025, are a reflection of this broader effort. I would emphasize that STAN is bigger than cost takeout. It is about building a culture that continuously improves the business and positions Allient to move faster and serve customers better over time. When we talked about improved margin, better leverage, and stronger earnings power, STAN is one of the foundational reasons that it is happening. With that, let me turn it over to Jim for a more in-depth review of the financials. Thank you, Dick, and good morning, everyone. Please turn to slide five. Revenue increased 10% year-over-year to $153.8 million. On a constant currency basis, revenue grew 9% organically, with foreign currency translation providing a favorable tailwind of approximately $1.3 million in the quarter. 54% of second quarter sales were to U.S. customers, with the balance primarily in Europe, Canada, and Asia-Pacific, continuing to reflect the benefit of our diversified geographic footprint. Looking at the verticals, industrial revenue increased 17%, driven by continued strength in industrial automation and power quality solutions supporting data center infrastructure. Aerospace and defense increased 16%, reflecting strong defense-related demand and program activity, and notably, that growth came despite the previously announced MTEM Booker program cancellation. Medical increased 9% on broad-based demand, including surgical robotics and other precision motion applications. The vehicle market declined 7%, due primarily to lower power sports demand. Overall, this slide reinforces both the breadth of demand in the quarter and the continued alignment of the portfolio with higher-value applications. Turning to slide six. The trailing 12-month market mix continues to support a more resilient and more margin-accretive business profile. Industrial represented 49% of trailing 12-month revenue at the end of the second quarter, up from 47% a year ago, while medical remained steady at 15%, vehicle was 17%, aerospace and defense was 15%, and distribution was 4%. The bigger takeaway here is that the portfolio is increasingly aligned around attractive growth verticals and higher-value applications, including motion and controls tied to automation, power quality for data center infrastructure, precision medical applications, and defense-related programs. That mix matters because it supports both growth and profitability. It also helps explains why we continue to see structural improvement in the business as we move forward. Please turn to slide seven. Gross margin expanded 170 basis points year-over-year to a record 34.9% in the quarter, with gross profit increasing to $53.6 million. The primary drivers were higher volume, favorable mix, and operational gains tied to STAN, lean tools, and broader productivity initiatives. We have said the margin opportunity at Allient is structural, and this quarter is a good example of that. The simplification of work, lean disciplines, footprint actions and productivity improvements across the business are creating a more scalable margin profile, and that gives us confidence the progress is durable over time. Mix also played an important role in the quarter, and mix can be lumpy. While we are encouraged by the gross margin performance, we would expect some quarter-to-quarter variability as those structural gains continue to build. On the tariff front, the team also continued to do a very good job mitigating exposure. Across the last year, we have taken a disciplined approach that includes pricing actions where appropriate, supplier negotiations, strategic buys, sourcing adjustments, and broader supply chain diversification. Those actions help keep tariff-related pressure from becoming a more significant drag on performance. With respect to the Section 301-related tariff refunds, the company has submitted or expects to submit claims for refunds of approximately $1.3 million. Due to uncertainties regarding the timing and ultimate amount of any recovery, no receivable has been recorded as of the end of the quarter. Turning to slide eight, operating income increased to $15.6 million from $11.7 million in the prior period, and operating margin improved to 10.2% from 8.4%. While that is not an all-time record for the company, it is the highest operating margin level in roughly a decade. Operating costs were 24.7% of revenue, improving 10 basis points year-over-year, despite higher commissions, incentive compensation, and growth-related spending. Restructuring and business realignment costs were $600,000 in the quarter, down from the prior year, but remain elevated due to costs associated with the Dolton transition. We continue to expect restructuring and realignment costs of approximately $2 million-$3 million for the full year 2026. The message on this slide is that we are seeing the leverage benefits of a stronger operating model while still funding the business appropriately and continuing to work through remaining transition-related costs. Please turn to slide nine. Earnings growth accelerated meaningfully in the quarter as the margin improvements flowed through the P&L and lower interest expense provided an additional tailwind. Net income increased 85% to $10.4 million, or $0.61 per diluted share. Adjusted net income increased 42% to $13.5 million or $0.80 per diluted share, and adjusted EBITDA increased 18% to $23.7 million or 15.4% of revenue. Interest expense declined by approximately $1 million year-over-year to $2.5 million due to the lower average debt balance. The effective tax rate was 20.2% for the quarter. We continue to expect a full year tax rate in the range of 21%-23%. The bottom line takeaway is straightforward. Stronger mix, higher gross margin, improved operating leverage, and lower interest expense combined to produce substantially stronger earnings. Moving to slide 10, net cash provided by operating activities was $14 million in the quarter and $20 million for the first six months of the year. The year-over-year change in operating cash flow primarily reflects accounts receivable timing and investments in inventory to support our rapid growth and strategic buys of critical materials. Inventory turnover was 3.1 times, compared to 3.2 for the full year 2025. We continue to focus on inventory discipline, strengthening working capital management, and taking out cost while also making disciplined investments to support growth and protect the supply chain where appropriate. The broader point is that the working capital profile reflects both growth and intentional actions. We have been willing to make selective inventory investments where that supports customer service and helps mitigate supply and tariff-related uncertainty while still keeping a sharp focus on cash conversion over time. Capital expenditures were $7.1 million for the first six months of 2026. We are investing in capacity and productivity, notably in areas tied to data center-related power quality, automation, and other growth initiatives. For full year 2026, we expect our capital expenses of approximately $12 million-$15 million. Please turn to slide 11. Continued deleveraging remains an important part of the financial story. Total debt ended the quarter at $173.3 million, down $7.1 million since year-end 2025. Net debt was $131.2 million. Leverage improved to 1.63 times, and the bank leverage ratio improved to 2.07 times, which is defined under our credit agreement and excludes foreign cash and certain other adjustments. We also ended the quarter with approximately $142 million of cash and $162 million of unused revolver capacity. This continues to strengthen our financial flexibility. A stronger balance sheet lowers interest expense, supports disciplined investment in the business, and provides capacity to pursue value-creating opportunities while remaining well within our covenant requirements. With that, if you advance to slide 12, I will now turn the call back over to Dick. Thank you, Jim. Orders increased 49% year-over-year and 27% sequentially to a record $201.3 million, resulting in a book-to-bill ratio of 1.31 times. Backlog ended the quarter at $298 million, and most of that backlog is expected to convert to revenue within three to nine months, which is consistent with our historical conversion patterns. That order strength was led by industrial, aerospace, and defense, and it gives us improved visibility into the second half of 2026. When we put together the strong second quarter results, the continued margin progress, and the strength in orders and backlog, we believe the company is entering the back half of the year with solid momentum. As we look ahead, the message is that Allient is executing with discipline while continuing to position the business for growth. First, our portfolio remains aligned with attractive growth verticals, including industrial automation, data center and other infrastructure, aerospace and defense programs, and medical applications. These are areas where customer demand remains healthy and where our technologies and engineering capabilities can create differentiated value. We also continue to make encouraging progress in the drone and unmanned systems market. While this is not a major revenue driver for us today, we do see a meaningful opportunity to expand our presence over time, and we are making strong strides in building a viable off-the-shelf offering for commercial and defense-oriented applications. We expect that portfolio to continue taking shape during the second half of this year. This builds on capabilities we have already discussed publicly, including COTS propulsion motors and the broader expansion of our motion, control, and power solutions for unmanned applications. Second, the company is operating with more discipline and better responsiveness. STAN and our broader optimization actions continue to support margin expansion, and we remain focused on cash generation, disciplined capital spending, and continued deleveraging. Those are not temporary initiatives. They are central to how we are running the business and improving the quality of our financial performance. Third, we believe the company is positioned for continued growth. Stronger demand, record orders, and increased backlog support improved visibility, and we are building momentum with improving earnings power. While the macro and trade environment remains dynamic, our diversified end markets, global operations, and proactive mitigation actions help support resilience. What gives us confidence is what we control. We have built a stronger operating model. We have a healthier balance sheet, and we have continued to align the portfolio around long-term secular drivers, which we believe Allient is well-positioned to benefit from over time. With that, operator, please open the line for questions. Thank you. The floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad at this time. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. Again, that's star one to register a question at this time. Our first question today is coming from Max Michaelis of Lake Street Capital. Please go ahead. Hey, guys. Thanks for taking my questions and congrats on really the solid quarter. I kind of want to jump into the orders here. Really strong order growth, especially in industrial as well. You shared the data center revenue number, I think it was up 60% in the quarter. Is that sort of in line with the order growth you're seeing as well, or is that ahead or below or anything you could share there would help? I'd say it's in line. Okay. You'd say that has continued kind of into Q3? Did we say that? Or are you asking a question, Max? No, it is a question. I'm just teasing. No. Yes, to answer your question, we're one month into Q3. We do see it continuing. Order intake is strong. Shipments remained strong as well. Okay, great. You touched a little bit on drones. Is there any sort of extra information you can kind of give us around orders? I know it's not a huge part of revenue in the A&D sector yet. Are they starting to see a little bit of pickup and growth on the order side of things related to drones and autonomous systems? Sure. As we've relayed in the past, we do see this as a significant opportunity for us. We're well-positioned and well-suited to handle applications that are in the drone and unmanned vehicle markets. What I would tell you is that we've invested heavily internally here in the last six to nine months, and you'll start seeing product announcements rolling out. The team has done an amazing job, the internal team. They're launching a complete product line of COTS, off-the-shelf propulsion motors, as well as where our strength has always been in the drone and unmanned vehicle markets is really what we call custom critical solutions. While there's a number of companies out there supplying these off-the-shelf products, few of them can do what we can do when it comes to very specific applications that require design expertise that we can bring to the party. A little preview, we will be announcing and we'll be releasing some products to the marketplace. There is a ground-based vehicle show in Detroit, more of an engineering show next week, outside of Detroit, Novi, Michigan. We'll be displaying some products there that we have never displayed before, and we'll be giving a preview of what's to come, leading up to AUSA in October, where you'll see a full launch of not only the motor products, but also electronic products and bringing our composites into the mix as well. While the results are good and they're improving, I just have to emphasize, we've continued to invest. We're making significant investments in leveraging our engineering talent for both the electromagnetics and electronics, as well as lightweighting that goes into the defense markets and certainly drones and unmanned vehicles is one of those. Awesome. Thanks, guys. That's it for me, and congrats again. Thank you, Max. Thank you. The next question is coming from Greg Palm of Craig-Hallum. Please go ahead. Yeah, thanks. Congrats on the results. I frankly don't know where to start, because there's just a lot of things that stood out. Maybe we can go back to the orders commentary, because I think I heard you say there wasn't anything unusual in terms of timing. It's still going to translate into revenue over the next three to six months or three to nine months. Were there certain large projects, orders that were within that? And just to be clear, based on your backlog activity right now and that likelihood that these flow to revenue at a similar timeline as the past, I think it implies a pretty significant step up over the revenue level you just reported. I'm just asking in light of kind of what normal seasonality trends would be. Sure. Great question, Greg. Thank you, too. Yes. We announced in this last quarter that we had made a change into way that we actually record orders or bookings, and that for larger, more significant blanket-type orders, we were not booking it into our backlog unless it was within one year and within a scheduled lead time, and literally moved into production. One thing I would say to you is this. There are orders that are sitting out there that haven't been converted into bookings yet that we do have visibility toward, and that as they continue to progress and they get released into production, they'll show up on our backlog. It's a little more smoothing, rather than the big lumpiness that we had for some of these large orders in the past. That's a positive because those aren't reflected in there. The second thing I would say to you, what's driving orders a little bit right now is lead time. Lead times have expanded, and we've certainly been encouraging our customers to make sure they get their orders into us. Don't wait till the last minute because lead times for our supply chain and our supply chain have gone out. We are seeing some orders coming in quicker than we might have seen in the past. Not to a great extent, but I would tell you that there's some acceleration, and let's just say if we look at it, three months in advance versus where we would see it before based upon lead time expansion. Last question, is there anything in there that's really significant? Yeah. There's $200 million in bookings, which we think is significant, there's no one area that really jumps out and says it's outside that lead time we talked about. It's continued increase in demand in the areas that we focused on, and the demand is now flowing through. Okay? You are correct in your assessment. We do see, as Max asked the question earlier about, we're a month into the third quarter, what's it looking like? How's it shaping up? It's continuing at a pretty strong pace here. Yep. Okay. Makes sense. Then gross margin was the other, I'm not sure how much of that strength is just a byproduct of more positive mix, or maybe some of it is just a reflection of you're getting to a revenue level here where you're a lot better able to absorb some of those fixed costs. I don't know, just curious if there was anything that maybe drove that a little bit higher than what normal, or is this kind of a better normalized rate if we assume that the revenue profile continues to scale? Yeah. Both are true, both of what you said. Clearly, the absorption as we continue to add volume and with our fixed cost base that we have here and not have to add cost to support it, that's clearly driving through margin improvement, the mix is improving over time. This has been a long-term effort of ours to transition the company into certain market opportunities that we felt gave us better opportunity to grow the margin profile based upon the solutions we offered and the integration of the products and the higher margin opportunities. That is what's happening as well. It is a combination of both of what you said. It's mix and it's better absorption. I would also tell you that we're not stopping. We talked about our cost improvements in terms of the cost takeouts and STAN and so forth. They're continuing. Last quarter, we incurred some costs that we said the transition of a product line, our production wasn't going up to snuff and plan as we had expected, we incurred some extra costs. We put a full-court press on it. We're still not there, it is absolutely improving. We see additional opportunities to streamline the organization, leverage what we have, and to continue to do as we gain more, we learn more, and we see more opportunities for those cost reductions as well. I think it's a combination of things coming together nicely as we've been working on for the last several years. Okay. Lastly, appreciate some of the updated metrics information on data center. I'm just curious, as we sit here today, what is your kind of total capacity level at? As you kind of think about some of the changes that are being proposed, whether it's new architecture, whether it's smaller footprints, how does your solution play into some of these proposed changes that might impact that market over the coming years? Well, I would say to you first, we've been expanding our capacity, and we're ready to go online here, late this quarter or early next quarter. Our goal is to have the expansion in place, and it's well underway. I viewed it a couple of weeks ago. We're well positioned, very well positioned to handle the increased demand. We talked about the acquisition we made a few years back, that the synergies that we realized at our Wisconsin operations and leveraging the Mexican operations as well, that has paid off big dividends and has helped us quite a bit in terms of expanding our capacity and relocating some of the high labor content products, and then concentrating on the more sophisticated assembly, and technician type work that we do for the final assembly. With regard to the equipment that we offer, I've mentioned this in the past, from our active filter standpoint, we have the highest power active filter in the marketplace today. That does help in terms of footprint, and it helps in terms of not having to daisy-chain multiple units together to achieve the same power that we can put out in one particular unit. We need to stay ahead of the curve. We recognize the market's going to continue moving. There's a higher demand coming. That's our responsibility, to make sure that we do stay ahead of the curve. As far as the opportunity in the future, based upon everything you hear in the news and so forth, yes, there's some regulatory, I do think that if everyone just takes a deep breath, some wise decisions have been made to ensure that while these data centers, the large data centers, are coming online, that they can supply their own power, and they can have clean water and do all of this. I think that those actions, they are happening and it's a positive. You did not ask the question, I will answer this because it's going to come. People have asked us, what's the opportunity for us, and wanted it simplified in terms of our value of shipments per megawatt hour. If we could come up with a measure to give people a feel for what that is. It's not just a cut and dry black and white answer, because it depends on the design and the amount of equipment that we're supplying into it, whether it's just line reactors or it's active filters or passive filters or a combination of all. I would say to you that on the low end, if it's just simply a line reactor, we might be talking about a couple thousand dollars per megawatt. When it gets into a more complete solution, which we offer, including communications gateways, filters, and reactors and so forth, and even getting into some equipment that we supply that does fiber alignment to, we supply products to that market that does fiber alignment, that that's even in the equation now, we're over $40,000 per megawatt. I'm not going to give you what I believe the forecast is. If anyone could go to one of their AI tools and look at what the forecast is for data center per megawatt or gigawatt that they're looking at and do the math. I hope that gives you some color. We've been asked that a lot. We've been asked about our growth in data centers. We do believe we're going to continue to grow faster than our average growth within our company in those markets as well. Yep. Makes sense. I'm sure I can speak on behalf of everybody on this call. I appreciate all the increased disclosures. Really helpful. Thanks. You're welcome. Thank you. Thank you. The next question is coming from Ted Jackson of Northland Securities. Please go ahead. Thanks very much. I have a clarification question and then a couple of follow-ups. One is, when you gave the data center numbers, you threw out a trailing 12-month of $57.1, and then you put a year-over-year growth rate number for that. I missed the year-over-year growth rate number. Could you say that again, please? Ted, I think I've lost you. I don't know if it's me or you. Hello? Yeah. We- Hello? I lost. You hear me now? I can. Can you? It's like an old cell. My question was, you gave some commentary on the data center, and on the trailing 12 months, you've said that you put out $57.1 million in revenue, and you gave a year-over-year growth number for that, and I did not catch that. I was curious what that growth number was. I have a couple of actual fundamental questions. Oh, okay. Sorry. Let me pull it back out to give you that, make sure it's accurate, and I've got it off the top of my head here. Jim, you have that handy? I'll find it here real quick here. Yep. 69% year-over-year. Okay. Trailing 12 months was Go ahead. Yep. No, I got it. I appreciate it. Let's move over to more interesting questions. We spend a lot of time talking about data centers and industrial. Let's go to a couple of the other verticals, and let's start with the vehicle mix. In the past, a big component of that had been power sports, and clearly you've been de-emphasizing it, and rightly so, and the market's been doing terrible with it. The business itself has actually performed pretty well. I thought it might be interesting to have you lay out sort of the different end markets that are there within the vehicle market. You've seen a turnaround with regards to the commercial vehicle market. I know you have exposure to there, but just kind of the mix of business that you have in there and kind of what you're seeing with regards to that mix. That is my first point. Sure. The mix, when we talk about vehicle, as we have mentioned in the past, our goal is to keep, and it has been for a while as we reposition the company for automotive too. While it is important to us from the standpoint of the volume and the automation capabilities and the zero defect mentality that it brings to the rest of the organization, we wanted to keep it managed in less than 10% of our overall revenues, and we continue to do that. The other areas, when we say vehicle, includes automotive, buses, construction vehicles, marine vehicles, the ATV market, rail, and truck. Those are all combined, and year-over-year, they have remained pretty steady, and the one growth area that we have seen there has been the automotive. When you say automotive, that is just basic passenger cars, Ford, GM kind of stuff. When you say truck, I assume you are meaning more like Class 8, Class 5-8 kind of stuff. Correct. Is that. Okay. Correct. Passenger vehicles, when we say automotive, it's more passenger vehicles. Remember, our expertise is around steering applications. That's our primary expertise. There's others as well, but steering is the primary application. It's agnostic to whether it's petrol or it's EVs. Historically in the past, powersports was a pretty big component of vehicles. It's been de-emphasized. It's been shrinking. Where does that stand in terms of its contribution to the vehicle market relative to where it was three years ago or so? Yeah. We're getting into granularity that we have not provided in the past. I would just say this to you. It's steady. We have to remember, when we talk about powersports, there's a couple. You're talking about the ATV versus the UTV market. We've made that clear in the past. Yep. One's a utility vehicle used in commercial and in industrial applications, one's passengers or individuals. We've continued to focus more on the industrial, commercial type applications. By no means is this a market that we want out of. We think that it does leverage, again, our expertise, a strong expertise in steering applications, and we are able to apply that technology into some of the other vehicle markets, as well as automated material handling and things of that nature as well. I'd prefer not to break it out because we're starting to get too granular in terms of just leave it vehicle as a whole, as we've been reporting. Suffice it to say that there has been a transition, and we would expect to, I'll say, maintain a certain level of business, but it no longer drives our business as it did 10, 12 years ago. Fair enough. Shifting over to aerospace and defense. My model only goes back to 2019, but in the history of what I've got in my model, you had a record quarter. I'm kind of curious, what's driving that? Are there any particular programs in place that are making that happen? Maybe talk a bit about what pushed the quarter to be so strong, what the outlook is, and kind of the drivers behind that business, and then we'll move on. First off, I'm going to say it's going to accelerate. We've talked for many months, many quarters about the increase in the number of inquiries and quoting that we were doing based on higher volumes and so forth, and they've come to reality. We see that that's not a defense-related application. That's not stopping, that's continuing. In addition to that, as I put some commentary earlier about what we're doing in the drone area and what we're releasing and coming to market, you'll start to see that unfold. I would emphasize as well the counter-drone market. We see that as important as the drones themselves. The product line, I'll just restate it, that we are launching is state of the art, and we've put a significant amount of our resources on it and utilized the principles of STAN for the decision making first and how can we accelerate it, how are we going to compete. I think it's pretty exciting because we're able now to go to the market, and we're able to talk to customers who've come to us about volume applications where we weren't positioned to do it, where we are positioned. Not that we're opening up the floodgates. We're selective in what we're picking. There are some things that we are not going to chase. The applications that we're working on, some of the higher-end applications that we've been in all along, now looking at the COTS applications that we're able to support, which then leads us to more and more custom critical, and our team has done a great job. Electronics, we've got customers now, some beta customers or alpha customers I'll call them, for some of our electronics releasing. State of the art. Leading edge, state of the art. It's positioning us well. It's helping us because it's not just where that technology that we've been designing, we've been investing in, and we've been feeling the impact on our P&L as an investment. We're leveraging the technologies not just for the drone applications, but in defense markets as well as industrial and commercial markets too. I think we've got a pretty impressive platform of products that are going to be starting to be released, and those will come out as well. It's all just coming together. I think, some reality of the quoting we did in the past, converting into orders today, seeing some acceleration, opening up some new opportunities in markets. I think we're getting better recognition in the market. I think we've done a great job marketing it, and we're going to do even a better job. The team has stepped up big time. You're going to see more information out there about Allient and how Allient plays and so forth. I think, yeah, it's positive. It's definitely positive. Okay. My last question is kind of a more curious. With bookings and backlog and the strength you have, I'm just kind of curious, when you roll into any quarter, how much of a typical quarter is driven by any kind of near-term business that's booking ship in the quarter? Kind of in a rule of thumb, how much of it comes out of backlog? Yeah. It really depends on what we're shipping in the mix. I've said this before and just so for sake of making sure it's consistent here, is that as we, for some of the larger contracts that we have out there, we get blanket orders from our customers, and then we get releases against those. Again, I won't get into the individual companies, but we have companies that are basically able to react to-- there's a forecasted demand, there's a mix that we don't necessarily know, but an order gets placed that we have to deliver within 72 hours. Obviously, this is part of where you have some inventory, and you have a design of a product line that allows you that flexibility. As far as a rule of thumb here, what would we consider book-to-bill business versus in any quarter versus a backlog-based business? I would tell you that we're 20%, 25% book-to-bill. Okay. That was super helpful. Dick, thanks for all the clarity. It's always a pleasure to listen to you talk about the business. You know it and you're passionate about it. Congrats on the quarter. Thank you, Ted. Appreciate it. Once again, ladies and gentlemen, that's star one to register a question at this time. Our next question is coming from Tomo Sano of JPMorgan. Please go ahead. Hi. Good morning, everyone. Good morning, Tomo. Thank you for taking my questions. Could you talk about STAN's annualized savings? You had $10 million in 2024 and $6 million in 2025. What is your expectation for this year, and what are the next levers for incremental savings? Thank you. Sure. I would tell you that for 2026, we targeted an amount similar to what we saw in 2025, $5 million-$7 million. I mean, we're still working on that, and I do believe it's achievable. Going forward, as I said, every time we finish something, we seem to uncover that there's more opportunity that I would tell you that we've got a list of opportunities internally here, given our size and given the resources that we have available to it, that I would say we've got a runway of two to three more years of where we can continue to see this $5 million-$7 million cost takeouts in optimization of the units. Thank you, Dick. If you could talk about Dolton transitions. Could you update us on ramp quality, delivery, and incremental costs, and when you expect normalization here? Thank you. Yeah. The significant improvement was made in the second quarter, and some of that was realized by, as we mentioned in the first quarter call, we could have shipped more if the transition had gone smoother and so forth. The team is doing a really nice job of attacking the root causes of the problems and getting the efficiency and productivity up as well as starting to cut into some of the past dues, and they're cutting into that. Every move, Dolton's been around a long time, and unfortunately, it's a high-mix business and sometimes low volume. That adds a little complexity to it. So getting everything up to snuff, fixed and identifying the supply chain and ensuring that all of that's being addressed in an appropriate manner, I will tell you that it will continue to improve throughout the year. We're going to continue to invest and improve throughout the year. We're making some investments to accelerate it. We have, and this is my opinion, that we have significant opportunity to improve not only in Dolton but also in our Reynosa facility as well. That'll continue through the year. You'll see some continued restructuring costs there as we make the investments necessary to ensure that we achieve the results that we're looking for. Thank you, Dick. If I may squeeze just one more thing. High level, Dick, could you talk about the current environment about the factory automations broadly? We were on the Automate show and then visited your booth and then felt like sense of urgency about the factory automations, given from some physical AI concepts as well. Could you talk about how you see the environment from your perspective broadly? Thank you. Sure. For our business, I would look at it from North America and let's say Europe. Europe is seeing some improvement, which is great. It's not going gangbusters, but it's improving, and it's a slow, steady improvement from We're heavily invested into our customers who are in the automation market. That's an encouraging sign. It's not this, like I said, big jump in demand all of a sudden. In North America, we have definitely seen some improvements as well. There's an acceleration of getting our products in place so that we can handle demand and these pent-up demand for certain projects out there. There's encouraging signs. As well as our portfolio is evolving and developing there. I wouldn't want to indicate in any way that we're a supplier to the big integrators, to the big players in the automation industry. As we continue to enhance our product portfolios and design products that are directed and dedicated to that in niche areas, we are definitely seeing some traction there. Then we're going to continue to do that. That changes the margin profile as well. If you're competing with what I'll call a, they could be off-the-shelf products, but they're kind of standardized and as many suppliers, it will impact your ability to drive margin improvement. Again, our focus has not been on the masses. It's been on ensuring that we can integrate our technologies together, use our electronics to enhance our ability to sell, as well as integrated solutions, and that continues to improve. So it's encouraging. It's definitely encouraging for what we're seeing, the signs there. Thank you. It's very helpful. Congrats on the quarter. Thank you. Thank you. The next question is coming from Gerry Sweeney of ROTH Capital Partners. Please go ahead. Good morning. Thanks for taking my call. Congratulations on a nice quarter. Thank you, Gerry. One more question. Actually, two more questions on data center work. Wondering if there's an opportunity to expand into some adjacencies around the work that you have now. Secondarily, how much of revenue do you feel comfortable with as sort of a percentage of revenue related to data centers? Great questions. Comfortable with as much as we can get. I say that, and it's an interesting question because we have been, by some of the majors, been asked about, and they've come to our facilities and done their assessments and so forth and looked at our capacity, and they see that our team has done a nice job. This team's primarily in Wisconsin, between our two facilities there and leveraging the Mexican facility. They have been proactive, and they've been ahead of the game in making sure that we are addressing capacity needs and labor needs and so forth. When it comes to this, I kind of give you that answer because I remember when I'm sitting in a meeting and the team brought to me, "Well, we can either do this or we can do this." I say, "You go for the big one. We'll support it. We'll support it as required." How big can that be? In relative, as I said, I would prefer not to give you what I think it's going to be. I gave you the numbers of what our value is per megawatt. You can go out and do the calculations yourself and see what the opportunity is. I'd say if our goal is to be one of the leaders, if we can move our percentage of capture in the marketplace, then I'm not uncomfortable with seeing our capture rate in there going 20%, 25%, 30%. I'll leave it at that and let you work the numbers, and everyone else work them on their own because I don't want it coming back to me, that's what I told you it's going to be. What else was it that you were interested in besides that? Adjacence. The adjacence? Yes, it absolutely is. The same type of solutions we have. You notice we talk about data center and other infrastructure. Definitely. The same types of requirements that you're seeing in data centers, as you get these larger applications, wastewater treatment plants and so forth, there's definitely going to be expansion there and continued demand there, and our products serve those as well. Got it. Finally, I lied. Three questions, not two. Obviously, we're in a new build market for data centers. Is there an opportunity for repair, replacement, refurbishment, upgrading of facilities over time, or is it too early to tell? No, I think there definitely is. I think there's companies out there focusing on that they're saying that, especially if you're going to get pushback in certain states and localities that are going to push back against data centers, they already have data centers there. The infrastructure's in place. It just needs to be upgraded and expanded. I think there's clearly going to be some opportunities there. We can play in either one. Got it. Great. Thanks, guys. I appreciate it. Thank you, Gerry. Thank you. At this time, I'd like to turn the floor back over to management for any additional or closing comments. Well, thank you, everyone, for joining us on today's call and for your interest in Allient. We will be participating in the Lake Street BIG10 Conference in New York City on September 10th. As always, please feel free to reach out to us at any time, and we look forward to talking to you all again after our third quarter 2026 results. Have a great day. Thank you, operator. That'll conclude it. Thank you. Ladies and gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.