Good day. Thank you for standing by. Welcome to the VSE Corporation Fourth Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Michael Perlman. Please go ahead. Thank you. Welcome to VSE Corporation's fourth quarter and full year 2025 results conference call. We will begin with remarks from John Cuomo, President and CEO, followed by a financial update from Adam Cohn, our Chief Financial Officer. The presentation we are sharing today is on our website, and we encourage you to follow along accordingly. Today's discussion contains forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including those described in our periodic reports filed with the SEC. Except as required by law, we undertake no obligation to update our forward-looking statements. We are using non-GAAP financial measures in our presentation. Where available, the appropriate GAAP financial reconciliations are incorporated into our presentation and posted on our website. All percentages in today's discussion refer to year-over-year progress, except where noted. At the conclusion of our prepared remarks, we will open up the line for questions. With that, I'd like to turn the call over to John. Good morning. Thank you for joining us today for VSE's fourth quarter and full year 2025 conference call. 2025 was an exceptional and transformational year for VSE. We completed our multiyear transformation and transition to a pure-play aviation aftermarket company, delivered record aviation revenue and profitability, surpassed $1 billion in annual revenue for the first time in our history, and strengthened our balance sheet. These results reflect disciplined execution and validate the strategy we have been advancing over the past several years. During the year, we expanded our engine and component capabilities through highly complementary acquisitions, advanced key OEM programs, increased MRO capacity, and accelerated integration and synergy capture activities across the platform. Each of these actions enhances our operating leverage, deepens our proprietary capabilities, and strengthens our competitive positioning in the global aviation aftermarket. We enter 2026 with strong momentum. Our aviation-only platform is scaled and positioned to drive sustained organic growth and continued margin expansion and improved free cash flow generation. Let's move to slide three, where I would like to highlight our recent developments. Let me start with our announced transformational acquisition of Precision Aviation Group, or PAG. On January 29th, we entered into a definitive agreement to acquire PAG, a leading provider of MRO and supply chain solutions across commercial, business, and general aviation, rotorcraft, and defense markets. This is a highly strategic transaction that meaningfully expands our scale and strengthens our engine and component service capabilities across the aviation aftermarket. Importantly, PAG aligns directly with our strategy of adding high value, high margin, mission-critical, proprietary, and differentiated services to our portfolio. From a financial perspective, PAG expects to generate approximately $615 million in adjusted revenue for the full year 2025, with Adjusted EBITDA margins above 20%. Following the anticipated close in the late second quarter, our combined leadership teams will immediately focus on integration and executing identified synergy initiatives. Phase one cost and insourcing synergies are expected to exceed $15 million on an annualized basis. This provides a clear path for the combined company to achieve Adjusted EBITDA margins above 20% over the next several years as integration progresses. The total upfront consideration for the acquisition is approximately $2.025 billion, subject to customary working capital adjustments. This consists of $1.75 billion in cash and approximately $275 million of equity issued to GenNx360, subject to a customary lockup. The agreement also includes up to $125 million in contingent earn out consideration, payable in cash or equity at VSE's discretion, based on PAG's 2026 Adjusted EBITDA performance. We expect to fund the transaction with approximately $1.28 billion in net proceeds from our recently completed common stock and Tangible Equity Unit offerings, together with permanent debt financing that we are finalizing in the coming weeks. Let's turn to slide four. I'm very pleased to announce two new organic growth awards that expand our exclusive product portfolio, increase annuity-like revenue, and further our strategy of adding proprietary content to the business. First, we entered into an asset purchase agreement with an OEM to exclusively manufacture, distribute, and repair certain fuel pumps for the Pratt & Whitney Canada PT6 engine series. This expands our proprietary OEM solutions portfolio and strengthens our position in high-value, high-margin, mission-critical engine accessory programs. We also announced a new globally exclusive life-of-program APU components distribution agreement. This meaningfully expands our role in supporting APU platforms across a broad range of commercial and mission-critical aircraft. Under this agreement, VSE will serve as the exclusive life-of-program licensed distributor for more than 2,500 unique aftermarket parts, supporting four OEM APU platforms. This program will require approximately $45 million of initial inventory and working capital, which is expected to impact free cash flow in the first quarter for the full year 2026. With that, let me briefly update you on the current aviation aftermarket environment and how we're thinking about 2026. The aviation aftermarket is positioned for another year of growth in 2026, supported by many of the same fundamentals that drove performance in 2025 across both commercial and business aviation. In commercial aviation, we continue to see healthy air travel demand, with industry forecasts calling for mid-single-digit Revenue Passenger Kilometer growth in 2026. Early commentary from the airlines we serve as we enter the year has also been constructive. Aircraft retirements remain an important watch item, but they are anticipated to stay below historical averages for the next several years. That dynamic continues to reflect the undersupply of new aircraft, sustained utilization of legacy fleets, strong durability of existing engine platforms, MRO capacity constraints, extended material lead times, and oil prices that support the economics of keeping older aircraft in service. In business and general aviation, demand remains strong, with aircraft utilization at or near record levels. Ongoing wealth creation and the increasing preference for point-to-point travel, supported by fractional and charter models, continue to underpin activity. While North America remains the largest market, we expect relatively stronger markets in the Asia Pacific, Middle East, and Africa regions, contributing to an expanded global installed base. Taking all that into account and considering our portfolio mix across commercial and business aviation, as well as engine and non-engine programs, we expect our core markets that we support to grow in the mid to high single-digit range. Based on our planned organic growth initiatives, we expect to outperform those market assumptions, Adam will shortly outline organic growth guidance in the high single-digit to low double-digit range. Let's now turn to slide five, where I'll walk through our full year 2025 highlights. We delivered record aviation revenue and profitability, surpassing $1 billion in aviation revenue for the first time in company history, while expanding margins and generating positive free cash flow. We secured multiple distribution and MRO program awards and strengthened key OEM partnerships, reinforcing future organic growth and expanding proprietary content. In April, we completed the sale of our fleet segment, repositioning VSE as a pure-play aviation aftermarket company and sharpening our strategic focus. In May, we acquired Turbine Weld, a specialized MRO provider focused on complex engine components in business and general aviation. This enhances our proprietary repair capabilities across key engine platforms and strengthens our engine MRO value proposition. In December, we completed the acquisition of Aero3, a global MRO provider and distributor in the wheel and brake aftermarket. Aero3 builds upon our 2023 acquisition of Desser Aerospace and further expands our global wheel and brake, MRO, and distribution capabilities while enhancing our diversified component services portfolio. We also made substantial progress advancing Kellstrom integration activities, exceeding our synergy capture targets, and driving alignment across branding, organizational structure, IT systems, and operational processes. We invested strategically to increase MRO capacity and broaden technical capabilities across both engine and component programs to support future organic growth. We launched new program and product introductions in Europe, and continued to expand our presence across both Europe and Asia Pacific. We advanced our OEM solutions organization and fuel control transition program, positioning 2026 as a key execution year. Finally, we launched initial AI-enabled tools and process improvement initiatives to drive greater efficiency across the platform. Let's now turn to slide six for a closer look at our full 2025 financial performance. For the full year, we delivered record revenue and record profitability. Revenue growth was driven by strong performance across both our aviation distribution and MRO business units, along with contributions from recent acquisitions. The aviation segment also generated record profitability, supported by disciplined execution in distribution programs, increased MRO activity, strong performance in our OEM licensed manufacturing programs, and acquisition contributions. I'm also pleased to report that we generated positive free cash flow for the full year and reduced adjusted net leverage to 1.1x. I'll now turn the call over to Adam to walk through the financial details. Thank you, John. Let's turn to slide seven of the conference call materials, where I will provide an overview of our fourth quarter consolidated financial performance. For the fourth quarter of 2025, we generated $301 million of revenue, or an increase of 32%. Consolidated Adjusted EBITDA increased 55% to $52 million compared to the fourth quarter of 2024. Adjusted EBITDA margin was 17.2% in the quarter, an approximate 260 basis point improvement over the prior year period. Adjusted net income was $26 million, and adjusted diluted earnings per share was $1.16. Moving now to the full year of 2025. Revenue was approximately $1.1 billion in 2025, up 41% versus 2024. Adjusted EBITDA for the full year was $183 million, representing an increase of 56% as compared to 2024. Adjusted net income increased 121% to $83 million. Adjusted net income per diluted share increased 87% to $3.92 per diluted share. Turning to slide eight, I'll review the aviation segment's fourth quarter performance. Aviation revenue increased 32% year-over-year to a record $301 million in the fourth quarter. Both distribution and MRO delivered strong results, increasing 37% and 24% respectively. The 37% increase in distribution revenue was driven by strong performance across new and existing programs, product line expansion, market share gains, and a partial quarter contribution from Kellstrom in the prior year period. The 24% increase in MRO revenue was driven by expanded repair capacity, new repair capabilities, sustained end market demand, and contributions from the Turbine Weld acquisition. Excluding the impact of all recent acquisitions, and including Kellstrom beginning in December, organic aviation segment revenue increased approximately 12% year-over-year in the fourth quarter. Aviation adjusted EBITDA increased 43% to a record $55 million, representing 18.3% of revenue. The year-over-year improvement reflects a greater mix of higher margin product and repair activity, increased insourcing, favorable program mix, higher margin OEM licensed manufacturing sales, and continued synergy realization. For the full year 2025, aviation segment revenue increased 41% to a record $1.1 billion. Adjusted EBITDA increased 48% to $195 million, and Adjusted EBITDA margin expanded 80 basis points to 17.6%. Turning to slide nine and our balance sheet. At the end of the fourth quarter, total debt outstanding was $296 million, with approximately $69 million of cash on hand. We had no borrowings under our $400 million revolving credit facility. During the fourth quarter, we generated approximately $31 million of free cash flow, driven by strong profitability and disciplined working capital management. For the full year 2025, free cash flow totaled $6 million, an improvement of approximately $57 million versus the prior year period. At year-end, our adjusted net leverage ratio improved to 1.1 x, compared to 2 x at the end of the third quarter. Following the anticipated close of the PAG acquisition, we expect adjusted net leverage to be below 3 x. Let's now turn to slide 10 to review our consolidated company guidance for the full year 2026. Beginning this year, we will no longer provide segment-level guidance, since we are now one segment, aviation-focused business. In addition, the recently announced PAG acquisition is not included in our 2026 outlook. We plan to update our consolidated guidance following the close of that transaction. Starting with revenue, we expect full year 2026 revenue to increase between 19% and 23% year-over-year. Full-year contributions from the Aero 3 and Turbine Weld acquisitions are expected to account for approximately 11%-13% of that growth. We expect organic growth in the high single to low double-digit range, above the broader market growth outlook John referenced earlier, driven by new program awards, distribution expansion, increased MRO capacity and capabilities, and continued market share gains. From a quarterly cadence standpoint, revenue is expected to increase sequentially throughout the year. This reflects Aero 3 seasonality and the ramp of new program awards, with heavier revenue contribution in the second half of the year. For the full year 2026, we expect Adjusted EBITDA margins between 16.8% and 17.3%. The Aero 3 and Turbine Weld acquisitions are expected to be accreted by approximately 40 basis points. Within the core aviation business, operating leverage, program optimization, and improved MRO utilization are expected to contribute between up to 50 basis points of incremental margin expansion. On a quarterly basis, first quarter margins are expected to decline sequentially from the fourth quarter of 2025. This reflects Aero 3 seasonality, the revenue ramp of new program awards, and product mix. Importantly, first quarter margins are expected to improve on a year-over-year basis. As John mentioned earlier, the new OEM APU program will require approximately $45 million of initial inventory and related working capital management. This will impact free cash flow in the first quarter and for the full year 2026, and is incremental to our typical first quarter working capital usage. Excluding this initial inventory investment, we expect stronger free cash flow in 2026 compared to 2025. Let me briefly review some additional modeling assumptions, which are also detailed in the appendix. For the full year 2026, interest expense is projected at approximately $20 million. Depreciation and amortization is expected to be between $52 million and $54 million in aggregate. The effective tax rate is projected at approximately 25%. Stock-based compensation is expected to be between $15 million and $16 million, and capital expenditures are expected to be approximately 2% of revenue. With that, I'll turn the call back over to John. Thanks, Adam. I'd like to conclude our prepared remarks by looking ahead and reviewing our 2026 priorities on slide 11. First, we are focused on executing our recent acquisitions and accelerating integrations and synergy realization. Second, we are implementing newly awarded distribution and OEM solutions programs, including those I mentioned earlier, across our core platforms. Third, we are expanding MRO capacity and technical capabilities to capture incremental growth opportunities. Fourth, we are advancing and converting our organic growth pipeline. Fifth, we are continuing to enhance our processes and systems to enable scale and support future integrations. Finally, we expect to close the PAG acquisition in the second quarter and initiate a disciplined, structured integration and synergy capture process immediately thereafter. In closing, 2025 was a defining year for VSE. We delivered record financial performance, completed our transformation to a pure-play aviation aftermarket company, expanded our proprietary and exclusive content portfolio, and strengthened our balance sheet. At the same time, we positioned the company for its next phase of growth, both organically and through the announced acquisitions of Aero 3 and PAG. As we look ahead to 2026, we see a supportive market environment, accelerating organic momentum, expanding margins, and a clear path to greater scale and capability. Our strategy remains consistent and disciplined: focus on high value, high margin, mission-critical aftermarket services, expand proprietary content, drive operational execution, and allocate capital thoughtfully. We believe the actions we've taken over the past several years have built a stronger, more resilient, and more scalable aviation platform, and we are confident in our ability to continue delivering long-term value for our shareholders. I want to thank our shareholders for their continued support and confidence in our strategy, and most importantly, to thank our global VSE team for their dedication and execution. Your commitment is what drives our performance and positions us for an even stronger future. Operator, we are now ready to take questions. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question will come from Kenneth Herbert from RBC. Your line is open. Yeah. Hi, good morning, John and Adam. Morning, Ken. Hey, John, maybe I appreciate the detail you provided on the, sort of the margin walk through 2026, can you just maybe dig a little bit deeper into how we should think about the run rate synergy captures on Kellstrom, Aero 3, TCI, the recent acquisitions, and where are you relative to initial expectations there, and as we think about sort of opportunity in 2026 and beyond on those? Yeah, it's a great question. I'd say that we'll give an update with the first quarter with regard to Aero 3. I like to let the business run for a solid quarter, see exactly how it performs, where I can kind of micromanage the financials before we kind of lay out what we think we can do with the business. With regard to Kellstrom, you know, the business on an individual basis is at or above our company-wide margins today. We're extremely ahead of the totality of where we thought the business would be. You know, we've owned it for 14 months, and we've taken it from 11% margins to about 17%. This year, what I would tell you that we still have some margin opportunity as we continue to, you know, on the cost side, as we continue to finish the integration. This goes for Turbine Weld and for TCI. Our opportunity to have solid kind of double-digit growth in 2026, 2027, on those three sites is there's a strong line of sight, and I just wanna make sure we're investing in the headcount and the capability sets. We've been, I'd say, slightly conservative on our modeling on synergies. ... but, you know, you know, essentially, it's, you know, 100 basis points-200 basis points is kind of what we've got baked into our plan. You know, I've been more conservative, because if I can bring on the labor, and get our business to grow, you know, 12%, 13%, 14%, you know, over the next 24 months, I'd rather be in that position. That's great. Thanks, John. I just wanted to follow up. You made a comment in terms of your priorities on advancing the organic growth pipeline, and you've announced some deals with Pratt Canada recently. Can you give any more examples of where we might see that organic pipeline growing, and how we think about maybe the opportunity there to push sort of better than, call it, the 10% growth we're seeing this year? Yeah. I mean, I think it's a great question. I'd say there's a couple of things. Number one is we've got a really strong pipeline. The question just is when, you know, when do you close the deal and when do you receive the revenue? We've got a number of, you know, really kind of strategic MRO contracts that we're working on the commercial side with major airline customers. The question just is not an if, but a when do you start really seeing the value of those awards? I would say the greater opportunity, though, is probably, you know, about 60%, you know, of our business is engine focused, and that's both on business and general aviation and commercial. That market is there. It's just building out the capacity for it and potentially working with our OEM partners, where they're focusing on, you know, for example, LEAP or GTF, where they wanna outsource a more legacy engine to us, and that work we can move pretty quickly. I'd say expect to see us really talk more about the commercial MRO side of the business, whether it's avionics, you know, hydraulics, pneumatics, or anything as touching the engine. Those are the biggest areas of organic growth opportunities, where we can realize revenue and earnings, I'd say, quickly in the next 12 months- 18 months. Great. Thanks, John. Thank you. Our next question will come from Sheila Kahyaoglu from Jefferies. Your line is open. Good morning, guys, and thank you. Good morning. John, I always appreciate that you provide color out there, so maybe how do we think about, you know, on slide 10, when you talk about, your revenue growth profile versus the market of high single digit, low double digit growth, you know, how much of that is coming from your outperformance, is coming from share gains versus pricing? How do you think about the growth within your different markets, whether it's engines, wheels and brakes, or, you know, general aviation versus commercial? I mean, I appreciate the question because I do think that we get comped many times with just the generic commercial aftermarket. You know, we do have a strong business in general aviation and rotorcraft content, which is, on an organic basis, growing a slightly slower, you know, maybe 200 basis points, 300 basis points slower in terms of growth. You're thinking more kind of mid-plus single digits rather than high single digits. Where we love those markets is we have the ability to kind of build a bigger competitive moat because we look at it on a platform by platform or engine by engine basis, so we can drive higher content. We love those markets, but organically, they tend to grow slightly, you know, a little, you know, a little slower. We look at the business in four buckets. We think our commercial engine business will grow, you know, low double-digits. We think our business and general aviation engine business will grow kind of, high single-digits. Right below that is more the component side of the commercial business, that mid-single-digit growth rate would be business and general aviation components. I would tell you, on the pricing side, we're seeing a little bit of moderation in pricing. I mean, we've had very aggressive pricing over the last five years, plus, you know, tariff impact, which does get pushed down to the end user. In those market growth rates, I would tell you, think of it more as 50/50 price and volume. Got it. Thank you. Maybe if I could ask another one. I don't think it's necessarily on your slides, for your 26 priorities in terms of free cash flow improvement, and maybe that's 'cause you're investing in new awards and to ensure you have, you know, the labor there and potential. Can you talk to us about free cash flow potential in 2026? Yeah, sure. I mean, by the way, it should be, so that was a miss on my part. Thanks for highlighting it. You know, because it should be. It is definitely a conversation we're having. Oh, I look at it as a positive- Yeah. that you're investing in organic growth. It's a combination. We've hit the scale now. First quarter is always gonna relatively be free cash flow negative. We just, you know, we have so many end-of-year opportunities, and we're putting cash to work. As you look at the back end of the year, you should see a stronger free cash flow conversion. Adam, do you wanna speak in a little bit more detail to it? Yeah. Thanks for the question, Sheila. yeah, I mean, we made, you know, significant improvement in 2025, as you mentioned, you know, improving, call it around $57 million, year-on-year. We are expecting to continue to improve, you know, specifically excluding this- Mm-hmm. APU program investment that we talked about. I think you're seeing the benefit of the portfolio shift to more MRO, less working capital-intensive revenue, and we are continuing to optimize our distribution program, resulting in improved terms as well. You know, I think you'll continue to see that shift, especially through the PAG acquisition as well. We'll provide more specific guidance after the close of the PAG acquisition and you know, the permanent debt financing and some of the deal-related items. As John said, we are expecting improvement into 2026. You know, we will see more cash use in the first half of the year, driven by the APU investment, you should expect very strong free cash flow generation in the second half of the year. Got it. Thank you so much. Thank you. Our next question will come from Louie DiPalma from William Blair. Your line is open. John, Adam, and Michael, good morning. Good morning. congrats on. Louis, we can't hear you if you're talking. Congrats on the flurry of activity on the business development front, over the past 12 months. Chris, you want to go to the next one? Please stand by. Adam, are you able to hear Louie? Yes. Okay. I apologize, everyone. Can you hear me? John, can you confirm that you can hear him, or you still can't hear him? I cannot. I hear you, and I hear Adam. I do not hear Louie. Okay. Louie, if you don't mind, I'm gonna reconnect you to the queue. Can you press star one one again, and I'm gonna bring you back up? Everyone, please stand by. All right, Louie, I've brought you back up to the stage. Can you say a couple words to make sure John can hear you, please? Sure. good morning. Oh, there you are, Louie. Sorry about that. Fantastic. I was wondering, what was the origin of the OEM licensing fuel pump deal and the APU distribution agreement? John, were these competitive situations or deals that arose from your existing partnerships without a formal process? It's a great question. I'd say that, you know, both of the agreements were definitely a result of the focus, you know, as we build these relationships, that we're getting ahead of potential future opportunities, and we're highlighting to our OEM partners where we think we can add value. I would say that one of them was more competitive of a process, and the other one was more of us working out a partnership agreement. The next question, perhaps for Adam. Adam, if you abstained from M&A for a couple of years, would you still expect to expand the EBITDA margin by roughly that 50 basis points level that you set out for this year, just based on your operating leverage, cross-selling, increased utilization, and just expansion into higher margin solutions? Do you need M&A to expand margins, or do you have, like, a long runway for organic margin expansion? Yeah, we definitely don't need M&A to expand margins. I think you, if you, if you go back historically, you can look at the year-over-year margin improvement and exclude, you know, M&A. We, we've been pretty clear on, you know, buying some of these businesses at lower than segment or consolidated margin, and you've seen the organic margin expansion. I think there's a number of opportunities. One is obviously, you know, integrating the businesses and synergies. You could say some of that is or is inorganic, but we continue to insource some of our repairs internally. That continues to drive margins. You know, you hit on the operating leverage, and as we grow organically at very strong growth rates, you continue to see that operating leverage improve over time. There's, you know, just further optimization efforts in our existing business around supply chain and other indirect spend. I think 50 basis points is a, you know, decent barometer, but there's significant organic expansion opportunities in the business without M&A. Tying the two questions together, would that OEM licensing fuel pump deal, would that typically be higher margin, like in the 20% range or even above that? Would that be similar to what you did with the Honeywell deal? Yeah, I mean, those type of opportunities would typically be higher than our consolidated margin, similar to the Honeywell program on the higher end of the margin range. That's it for me. Thanks, everyone. Thanks, Louie. Thank you. Our next question comes from Michael Ciarmoli, from Truist. Your line is open. Hey, morning, guys. Thanks for taking the questions. Morning. John, just back onto this APU opportunity. Can we assume... I don't think you said the OEM. Is this Honeywell? If it's not Honeywell, are you then basically selling all the components into the licensed repair network? I mean, do you have an expectation of what this revenue ramp looks like once you or even once you get to full kind of run rate, how this would be additive to organic growth? Yeah. I don't, you know, I'd rather not say the OEM at this point, but. Okay. we are selling to the operators and into the networks, but it's, we are just in the finalization of it. The reason we really shared it with the quarter is because we're gonna, you know, we want to accelerate the transition, so there will be an inventory purchase, so I wanted to make sure you were able to model the inventory purchase in the first quarter. You know, our first quarter earnings will be, you know, in early May. We'll have a better feel then of how the, how fast we can transition, which is how fast we can, you know, be additive in terms of revenue and earnings. I'd say we're a little premature there. I just wanted to make sure that you all weren't surprised by the inventory build that we were gonna do in the first quarter to support this. I just need to see how fast we can actually transition the program before I can commit to the revenue. Got it. Got it. Did this have anything? I know when you made the PAG acquisition, they had some APU exposure. Was this related to PAG and broadening that? I think there was more report repair, but yeah. Yeah, this is something we were working on prior to that acquisition. Okay. Yeah. Okay, got it. Then maybe just back to Sheila's kind of revenue question. I feel like all of our models here are pro formas built on top of pro formas and so on and so forth. I know, it's complicated. Can you give us a sense, I don't know if you answered kind of distribution versus MRO growth in terms of parsing that out? You know, obviously, you've got, you know, the, some of these new programs ramping distribution, you know, can you even talk to it, I guess, the breakdown or growth rates among the two lines, and then, you know, is this, you know, market share wins that you're seeing driving kind of same stores? Just to give us a little bit more confidence in our modeling. Yeah, I think, you know, where you're seeing us outpace the way we look at our markets, you know, in those four buckets that I shared during Sheila's question, we are. With the outpacing of that is from share gains. They're share gain across the board. This year, the organic growth rate in our distribution business will be lower than the MRO business. We do have that one actuation program headwind, that program that ended last year, so we do have a little bit of a headwind in that business today. It's still gonna be strong, high single-digit organic growth rate, but expect that to couple with the MRO growth rate, which will be probably more on the low double-digit side, if I was looking at it by capability set. Got it. That's helpful. Traditionally, in our business, they've been pretty similar. This year, we just have that little bit of a headwind, which is bringing the organic growth and distribution a little lower. Got it. Perfect. I'll jump back in the queue. Thanks, guys. Thanks, Mike. Thank you. Our next question comes from John Godyn from Citi. Your line is open. Hey, guys. Thanks for taking my question. I just wanted to follow up on margins. You guys had a tremendous performance in the fourth quarter. I appreciate some of the commentary for 2026, but maybe we can talk about what would drive the low end versus the high end of margin guide for 2026, and if there's room to, you know, perhaps exceed expectations in 2026. Yeah, John, thanks for the question. I'd say it's on the low end, the two things that would drive it is just natural mix. The mix, you know, you know, on the lower end of the margin profile, and then labor. If we're able to bring on labor to support back end of the year, kind of engine growth and new program growth, that our SG&A, you know, is kind of a little tighter than what our plan is. That would probably drive the low-end opportunity. I think at the high end, there's a couple of levers that we'll focus on pulling this year to drive margin. Number one, you know, Ken mentioned it, is additional synergy opportunity that we've got with the acquired businesses and how we integrate them. number two is, as we look at accelerating organic growth, more on the proprietary side of the business, which tends to be higher margin, so we're moving mix on the higher margin side. As far as, kind of some of our process and efficiency opportunities, if we can accelerate those kind of faster than planned, those will drive, kind of from an SG&A, as a% of sales, you know, a slight improvement, which will impact margins on the positive side. We've got some levers to pull. I just, you know, it's just about matter of timing, right? I just wanna be conscious of the timing and make sure that we can. You know, we've got a lot on our plate in terms of execution, that we can execute it the right way. That's fantastic. Sort of similar question, but bigger picture, as we look at that 20% margin target, maybe you can just elaborate on what the shape of that looks like, and if there are any big milestones that kind of unlock a step change in margins, or if you expect it to just be kind of ratable and linear over the next few years. You know, I mean, it's we had a path to 20% pre, you know, PAG announcement. The announcement of PAG will accelerate that path in a faster way. I'd say that once we close the deal and we kind of recast our guidance for the back end of the year, I'll have a better feel. I'd say the gating factor on timing is how fast we can get through some of the synergies that we publicly shared. That first phase of $15 million of synergies really gets us there. The question just is, how fast can I execute on it? I traditionally like to let a business kind of run itself on its own for, you know, six, three to six months before we start integration. Here, if there's some kind of low-hanging fruit, for lack of a better phrase, like, that we would focus on that near term to help us accelerate that. I would say, don't expect the 20% number in 2026. Our goal would be, you know, back end of the year of 2027. That's great. Thank you very much. Thanks, John. Thank you. Our next question will come from Jonathan Siegmann from Stifel. Your line is open. Good morning, John, Adam, Michael, thanks for taking the question. Of course, Jonathan. Maybe, just back to that inventory build in Q1. Appreciate the quantification of that. Is it, you know, granted, it's got to ramp up, but is it too aggressive to think you'll eventually be turning that inventory 1x-2x a year? Is that the right way to think about it, or is there a reason it would be substantially less? Thank you. I think you're looking at it the right way. I would say year one of a program will never turn it twice. You know, that's more of as we optimize the program. We tend to be conservative in the first year because we want, you know, a delivery performance to the end users to be at the highest level, and having that inventory always drives, you know, the, our ability to do that. You know, it's a, I would tell you as we get into 2027 and definitely into 2028, you'll see that inventory optimize a little better. That's great. You also highlighted additional opportunities like this. The sales process, how long does it take to close? Oh, good question. It could be three months to three years. I mean, it depends, you know, 'cause we're working on these kind of programs. There's a lot of our business that we're working on where, you know, as the OEM is working on next generation products, and they wanna reallocate resources or something in their definition of end of life, you know, becomes something that they wanna have a discussion on. It really sometimes the conversation starts, and it's until they realize that they need to allocate resources to a different part of the business that it starts to accelerate that kind of opportunity set. It really, unfortunately, it's a complicated part of our, of the nature of our business, which is why you have to have a deep pipeline, because timing of the, you know, acquisition, or the organic programs is difficult. Likewise, it's also difficult to time the transition. The reason we shared the inventory, it's the fastest way to transition. It's painful from a working capital perspective, but buying all the inventory and transitioning quickly will allow us, you know, to move faster on the transition versus kind of a trickle-in transition. This one, hopefully, we can transition in the first to second quarter. But, you know, it's the timing of these deals is all over the place. The returns are great, so congratulations again. Yeah. Thank you. Thank you. Appreciate it. Thank you. Our next question will come from Jeff Van Sinderen from B. Riley Securities. Your line is open. Morning, Jeff. Hi, good morning, everyone. Just wondering if we could delve a bit deeper into the Pratt PT6 agreement? Is there more you can tell us about that? Maybe order of magnitude, how significant is it, maybe what it can contribute to the business? Yeah, I mean, I'd say it's premature to give you a little bit more detail there because, you know, what we like to do, similar to like an M&A deal, is that we like to test the markets to make sure that, and validate kind of the assumptions that we put into our model, which, you know, we believe is conservative. I mean, Adam, Or Michael, have we, you know, are we comfortable sharing any details around that, or at this point, we, you know, feel more comfortable? Yeah, I would say that the purchase was around $10 million or so. You're not gonna really see a significant earnings contribution from that program. Similar to Honeywell, we are the current distributor on the program, we need to burn through all of our higher cost of inventory before we could start selling through the lower cost inventory. We'll see some, you know, margin, you know, pick up in the back half of the year, which is reflected in our guidance, you're not gonna see a material impact in the first half of the year. Okay, that's helpful. I think we're all aware you guys have a large acquisition pending. Where do you stand on organically increasing MRO capacity as you think about this year? Maybe what are you experiencing on the employee hiring front for MRO? Yeah, I mean, we've been having a bunch of strategy sessions this week. you know, we are seeing, you know, both turnover improvements as well as retention improvements. you know, I think the brand is becoming more well-recognized in the market, where we're attracting more talent. I'd say the bigger opportunities we still have to focus on are our engine-related MRO shops, where, A, the market is very receptive, you know, and if we can bring the labor in, we can, you know, utilize that labor pretty much immediately. It's still a tight labor market. That's really, I'd say, the biggest concern area from a labor perspective. We are investing organically in, probably about four specific facilities this year that we're working on building capacity to support kind of future for those sites, hopefully double-digit organic growth as we look at the next kind of, chapter for those businesses. Okay, great to hear. I'll take the rest offline. Thanks for taking my questions, and congratulations. Thanks, Jeff. Appreciate it. Thank you. Our next question will come from Scott Deuschle from Deutsche Bank. Your line is open. Hey, good morning. John, I'm not sure how familiar you are with Woodward, but they have now spoken publicly about working with licensed third parties to help support their aftermarket growth on programs like the LEAP engine. Can you say whether that's an opportunity which you are actively pursuing and which would fit in your wheelhouse? I mean, I'd say that as they start to look at those opportunities, that's right in our wheelhouse. When we look at kind of engine accessories. We do some authorized work with Woodward in some of our fuel access, engine accessory shops. You know, taking the MRO work we already do for somebody like them, just as an example, and then converting that into a licensed opportunity, that's like exactly when you talk about kind of what does the sweet spot look like, where we're going to, you know, support that OEM, help them extend the life of, you know, aging aircraft, and, you know, but really do so in a value-added way to the end user as well. Those are the sweet spots of the deals that make the most sense to us. Do you think you could help them with some of their more complex parts, like fuel metering units? Yeah, I would tell you that, I mean, you know, you know, our fuel control program, now that I've looked back on it, was a very complicated first product for our team to go through. You know, the quality of our engineering and supply chain organization that we've stood up, that is basically an OEM, you know, driven organization, is, I believe, second to none and will, you know, really put us in a competitive position for future opportunities. We don't want to, nor do we have the capacity or capabilities to actually be the manufacturer of those complex products. As long as one of our gating factors is to make sure that we can manage a complex supply chain, but that we don't need to be the actual manufacturer. That's kind of one of those gating things that product line by product line, that I have to look at to make sure that that's really where we can add value. The second thing is, we don't mind supporting in production aircraft, but we don't want the majority of the revenue to be supporting kind of new build. We are, you know, our organization and our design is obviously built around aftermarket, so I wanna make sure that the majority of the use, whether it's parts or MRO capabilities, you know, in addition to the manufacturing, is all aftermarket focused. Those are kind of the gating things we look at to see if we can really add value and if we're gonna, you know, it's gonna be the right fit for us. Okay. Then do you see any opportunities for VSE to do any distribution or repair work for aeroderivative engines? You know, we looked at an M&A opportunity earlier this year. Do I think it's an interesting market and one that, you know, a few, you know, of kind of our industry peers have focused on? Absolutely. I think for us, you know, we just hit $1 billion of revenue for the first time. Hopefully, we'll be driving closer to, you know, to $2 billion this year. You know, we have so much just core organic, you know, opportunities within our core space, and the resources are so limited on the engine side to begin with, that for right now, we're gonna keep our focus there. It doesn't mean we can't add it as a capability set at a later date, but right now, I'd say it's, we're gonna keep it out of scope. Okay. Thank you. Thank you. As a reminder, to ask a question, please press star one. Our next question will come from Louis Raffetto from Wolfe Research. Your line is open. Hey, good morning, John, Adam, Michael. Good morning. You've covered pretty much everything, maybe just a couple cleanup questions. Adam, do you have the organic growth for MRO and distribution in the fourth quarter, or are they both pretty much around that 12%? Yeah, it was a little bit more skewed towards distribution than MRO. Fairly balanced, but more a little higher in distribution. All right, thank you for that. I just wanna make sure I understand the $20 million of interest expense. Is that including the sort of modest additional expense related to the TEUs? No. It's gonna be roughly in that range. It doesn't include any interest income, though, it's only interest expense. As you know, we did the equity raise, there's some cash on the balance sheet. We'll earn some interest income ahead of the PAG closing. It does include. Okay. Yeah. All right, thank you for that. Just on the stock comp, will that continue to be split sort of between the, quote, unquote, "aviation segment and the corporate," or will that fall under one? Yeah, that's a fair way to think about it. All right, thank you very much. Of course. Thank you. Thank you. I am showing no further questions from our phone lines. I'd now like to turn the conference back over to John Cuomo for any concluding remarks. Yeah, I just wanted to thank everybody for making the time for us today. I know it's a long and detailed call. A lot of moving pieces in the business right now. We couldn't be more excited about how we finished 2025, and equally excited about all the opportunities, both organically with our new program wins and execution on those, as well as bringing our recently acquired and soon-to-be-acquired businesses into the VSE family, and the opportunities that lie ahead for those businesses as well. Thank you again, and have a great Thursday. Thank you. This does conclude today's conference call. Tha nk you for your participation. You may now disconnect. Everyone, have a wonderful day.