Thank you for standing by, and welcome to the Karman Space and Defense expands into high priority maritime defense market with agreement to acquire Seemann Composites and Materials Sciences conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, again, press star one. Thank you. I'd now like to turn the call over to Steven Gitlin, Vice President of Investor Relations. You may begin.
Good afternoon, and welcome to Karman's Investor Conference Call to discuss our acquisition of Seemann Composites and MSC, and provide financial updates for 2025 and 2026. This is Steven Gitlin, Vice President of Investor Relations for Karman. Joining me today from Karman, our Chief Executive Officer, Mr. Tony Koblinski, Chief Financial Officer, Mr. Mike Willis, Chief Operating Officer, Mr. Jonathan Beaudoin, and President, Seemann Composites and MSC, Mr. Sid Charbonnet. Before we begin, please note that on this call, certain information presented contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Summarized on slide number two, forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and may contain words such as believe, anticipate, expect, estimate, intend, project, plan, or words or phrases with similar meaning.
Forward-looking statements are based on current expectations, forecasts, and assumptions that involve risks and uncertainties, including, but not limited to, economic, competitive, governmental, and technological factors outside of our control that may cause our business, strategy, or actual results to differ materially from the forward-looking statements. For further information on these risks, we encourage you to review the risk factors discussed in Karman's periodic reports on Form 10-K and Form 10-Q, and the Form 8-K filed today with the SEC. We also file the copy of the investor presentation for today's call, which you can find on the investor section of our website. The content of this conference call contains time-sensitive information that is accurate only as of today, January 21st, 2026.
The company undertakes no obligation to make any revision to any forward-looking statements contained in our remarks today or to update them to reflect the events or circumstances occurring after this conference call. Slide number three provides our agenda for today's call, in which Tony will review Karman's differentiated market position and successful acquisition strategy. Sid Charbonnet will provide an overview of Seemann Composites and Materials Sciences, and Mike Willis will share a financial update on our continued strong growth and leading margins. Slide number four summarizes the Seemann and MSC transaction. We expect the transaction to close during our first quarter, and we expect full integration by the end of 2026. Total consideration consists of $210 million in cash and approximately $10 million in Karman stock. We expect an LTM net leverage ratio at year-end 2026 of approximately three times adjusted EBITDA.
The acquisition deepens our advanced materials IP portfolio for application across our business, and it expands our exposure to the Department of War's highest priority naval programs. The transaction is immediately accretive to major Karman financial metrics such as revenue growth, funded backlog, EBITDA, earnings per share, and cash flow. With that introduction, I will now turn the call over to Tony Koblinski. Tony?
Thanks, Steve. Good afternoon, and thank you all for joining us today. It's been a very busy time since our February 2025 IPO. In less than a year, we've acquired three businesses, completed a $1.2 billion secondary equity offering, executed beyond our initial guidance for the year, and positioned Karman for continued profitable growth in the context of multiple expanding secular drivers. We wanted to take a moment today to remind you of Karman's investment thesis and use it as a frame to demonstrate how Seemann and MSC acquisition strengthens and furthers our growth strategy. Our relationship with Seemann MSC dates back to well before our current discussions, and we have been impressed with their leadership, capabilities, performance, and their dedicated team. In addition to offering compelling financial benefits, this transaction is about continuing market growth and expanding capabilities.
We are excited about what we can do together to support the defense sector, and as such, we intend to retain the entire Seemann MSC team to maintain their strong momentum and ensure continuity as they become a wholly-owned subsidiary of Karman after closing. To understand the context for this transaction, I'd like to take a step back and share our strategy summarized on slide number six. Karman's strategy is to deliver advanced system solutions for next-generation propulsion, deployment, and shielding applications, serving the country's highest priority national security interests, now from deep sea to deep space. Karman was conceived and built to support the critical weapons systems required to deliver strategic and tactical superiority to U.S. and allied forces against near-peer nation-states and to accelerate access to space as both a strategic and economic resource.
With Seemann MSC, we now address all four physical domains of sea, ground, air, and space. We will continue to provide IP-rich, mission-critical solutions for hypersonics and strategic missiles, loitering munitions and counter-UAS, space and launch, and now submarine and naval applications. The common characteristics connecting our four-end markets include complex operating environments that require extensive design engineering and IP-enabled solutions, fragmented supply chains that benefit from a scaled tier-one partner, and the highest DW priorities and funding with expectations for decades of sustained future growth. Karman addresses market needs effectively because we offer system-level design and engineering capabilities, beginning with material selection, proprietary products, and more than 40 years of proven IP and performance, vertically integrated operations with a full suite of manufacturing capabilities, and we are well-funded with a track record of operational success.
In summary, we provide agility and speed, rapidly delivering better technology for the most challenging environments. By delivering superior results to our customers and end users, we produce strong benefits to shareholders: sector-leading organic revenue and Adjusted EBITDA growth, multidimensional diversification, and a deep competitive moat. A key component of our growth strategy, summarized on slide number seven, is to identify and acquire IP-rich, scarce assets that expand our capabilities and enable us to offer even more value to our customers. When searching for these assets, we focus on a number of important criteria, including a high degree of proprietary products, advanced design engineering, and qualified positions on high-growth programs. These opportunities are typically proprietary in nature, founder or family-owned, and have existing relationships with Karman personnel. We formed Karman with seven initial acquisitions starting in 2020.
Each of the three unique companies we added in 2025 brings valuable new proprietary products and capability, such as forged refractory alloy-based shaped charges at MTI, proprietary propellant formulations from ISP to leverage across Karman's solid rocket motor portfolio, and liquid propulsion engine nozzles from 5-Axis. Seemann and MSC will provide significant design and process IP, as well as impressive expertise in proprietary resins and composite technologies to the Karman platform. These acquisitions all strengthen Karman, and Karman strengthens the capabilities and impact of our acquired companies. Immediately post-close, we begin integration and cross-selling of new products and new technologies to our expanded customer base. For example, we deployed ISP's propellant formulations for other Karman programs shortly after its May 2025 closing. Our acquisition strategy expands our competitive moat and accelerates our growth.
Shown on slide number eight, our growth strategy makes Karman a pure-play supplier addressing the DOW's highest priority initiatives: multiple demand drivers, such as Golden Dome, recapitalization of missiles and munitions capabilities, the DOW's drone dominance program, accelerating commercial launch cadence, and the recapitalization of the U.S. Navy submarine fleet, all position Karman well to deliver high growth and profitability well into the future. To give you a better understanding of our exciting new acquisition, I'll now turn the call over to Sid Charbonnet, President of Seemann Composites and MSC.
Thanks, Tony. I'm happy to be with you all today and share what makes me so proud about Seemann Composites and MSC and what makes us all so excited about joining Karman. As shown on slide number 10, the Seemann MSC team has decades of experience in the maritime domain. We design, produce, and support large-scale composite products such as submarine bow domes that span more than 30 feet in diameter. We are primarily focused on applying our unique IP-rich materials and composites expertise to recapitalize the United States Navy submarine fleet. We also support surface vessels, hypersonics, and missile systems. Our specialized materials science team is focused on next-generation materials and resin system design and formulation. Like Karman, we have full lifecycle capabilities from design through manufacturing. We have more than 60 engineers across 250,000 sq ft of facilities in four states.
Like Karman, we secure sole or single-source positions with qualified content on most of our programs. Keep in mind that qualifying for a U.S. Navy submarine program is a very long, resource and capital-intensive endeavor, in some cases requiring up to eight years. Securing these programmatic positions, as we have, represents a significant competitive moat. Unlike Karman's primarily fixed-price contract mix, many of our developmental contracts are cost-plus fixed fee because these programs are early in their lifecycle. As these programs mature, we expect them to transition to firm fixed price with opportunities for operational efficiency and margin expansion as they move into production. Complementing Karman's financial model, programs in our end market require significant sustainment support, offering a long revenue tail. Key programs driving our multi-decade visibility include Columbia, Virginia, and Seawolf-class submarines, as well as LCAC 100 ship-to-shore connector.
Among the main reasons we found joining Karman so compelling is the high degree of alignment in how we both approach solving complex problems for our customers and the highly complementary nature of our offering described on slide number 11. Karman and Seemann both offer IP-rich, highly engineered solutions for critical weapon systems. In both cases, these solutions address propulsion, interstage assemblies, and shroud sections of missiles, rockets, and submarines. Essentially, we are both tip-to-tail, or as we would say, bow-to-stern solution providers. Both companies' approach to delivering value is full lifecycle, including advanced system-level design engineering, vertically integrated manufacturing, and deep materials expertise. We could not have found a more compatible and aligned partner than Karman. Our entire 350-person Seemann MSC team is incredibly excited to help make Karman a truly all-domain solution provider from deep sea to deep space, as shown on slide number 12.
Bringing key markets such as submarines, unmanned underwater vehicles, unmanned surface vehicles, surface vessels, torpedoes, and launchers, we will expand Karman's total addressable market and strengthen its materials capability with our dedicated team of specialists in composites, resin systems, and advanced manufacturing. We look forward to completing this transaction in the first quarter and working closely with the Karman team to create and deliver even more value to our customers. Now, I'll turn the call over to Karman's Chief Financial Officer, Mike Willis.
Thank you, Sid. We also look forward to working with you and the Seemann MSC team. While our financial close and audit are still underway, limiting our ability to provide final results for the recently completed fiscal year, it's clear that Karman continues to deliver outstanding financial results. Our sector-high revenue growth and profitability is summarized on slide 14. We are again raising our 2025 guidance to between $470 million and $471 million in revenue, and between $144.5 million and $144.9 million in Adjusted EBITDA.
This represents top-line revenue and Adjusted EBITDA growth of 36% to the midpoint of the new guidance range. We expect 2025 Adjusted EBITDA margin of 30.8% at the midpoint of the range and an increase of 10 basis points year-over-year. For 2026, we now anticipate total revenue of between $700 million and $715 million and Adjusted EBITDA of between $205 million and $215 million.
This represents year-over-year growth of 50% and 45%, respectively, from midpoint to midpoint. We expect 2026 Adjusted EBITDA margin of 30% at the midpoint of this range. Note that our 2026 guidance assumes nine months of results from Seemann MSC. Now, turning to slide 15, we expect to report continued strong organic growth in 2025 of approximately 25%, with inorganic growth of 11%. For 2026, the midpoint of our revenue guidance reflects approximately 50% growth, of which roughly half is organic and half inorganic from the completed acquisitions and Seemann MSC. In terms of funded backlog, we posted record bookings in 2025, resulting in an organic book-to-bill ratio of approximately 1.3. We remain well-positioned across all four of our high-priority markets and are entering 2026 with record levels of backlog and pipeline, giving us high confidence in our 2026 plan.
With respect to our leverage ratio, we expect to achieve approximately three times Adjusted EBITDA by the end of 2026. A shift in the timing of our Seemann MSC acquisition approval will influence the amount of revenue and Adjusted EBITDA we'll recognize this fiscal year from those businesses. To summarize, our core business continues to thrive as we build greater scale and capabilities through strategic acquisitions. Seemann MSC will make us a truly all-domain solutions provider with a larger TAM and higher funding visibility and revenue across more of the nation's highest-priority programs. Now, I'll hand the call back to Tony for his closing comments.
Thanks, Mike. As we have stated today, we and our board of directors believe this transaction will deliver value and benefits to our shareholders, our customers, and our employees. Our shareholders will benefit from the accretive nature of this transaction, the expanded growing markets we will serve, increased diversity in our revenue, product, and program mix, and the strategic deployment of capital for long-term value creation. Our customers will benefit from the added capabilities Seemann MSC introduces to Karman and the exposure to more of our solutions across our all-domain reach, and we will continue to invest in our employees to grow our capabilities and our team. I want to thank them all for their considerable talents and efforts. Thank you all for joining us today. We'll now take your questions.
Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. If you'd like to withdraw your question, again, press star one. We ask that you please limit yourself to one question and one follow-up, at which point you may return to the queue for an additional two questions. Your first question today comes from the line of Ken Herbert from RBC Capital Markets. Your line is open.
Yes, hi. Good afternoon, Tony, Mike, and Steve. Hey, maybe just the first question. As we think about the Seemann Composites and MSC acquisitions, how do we think about underlying organic growth in those businesses, either in 2025 or expectations for 2026?
Hi, Ken. I hope you're doing well. Yeah. As we've guided for 50% year-over-year, roughly split between organic and inorganic, again, moving our organic guidance to 25% year-over-year, both the core Karman business plus the newly acquired assets are primed to continue that now new organic growth profile. Many of the programs, as Sid mentioned in his prepared comments, are early on in the development stages and will move into higher growth, higher production cadence moving forward. And so you'll see growth from the combined business and really all of the now four market areas as we think of them.
Okay. Thanks, Tony. And as we think about the legacy Karman, if I could call it that, as you look at now the organic growth into 2026, are there any particular programs you can call out that are seeing perhaps a more material inflection relative to the guidance you initially provided with the third-quarter results for organic growth in 2026? Thank you.
Appreciate it. Going to be difficult to describe the legacy Karman as we continue to move forward and take on new capability and growth patterns. I wouldn't highlight any one. You guys are well aware of the demand signals that are becoming clearer with each passing month as we think about the headline news on PAC-3 and THAAD and PrSM and others. But as we've talked about, we've got a number of our programs, whether that be Sentinel or Trident or Arrow or NGI or New Glenn, Vulcan, that are all really early on in their life cycle. And so we see growth drivers in all four of our sectors at this point for years ahead.
Great. Thanks, Tony.
Your next question comes from the line of John Godin from Citigroup. Your line is open.
Hey, guys. Thanks for taking my question. I was hoping maybe you could just give us, A, a little bit of additional color on how the deal came about, maybe the prior history of the two companies, and a little bit of context. It sounds like there was some history there, and I just think that would be helpful color, and then a second question for Karman specifically. With the leverage at 3x at the end of this year, it feels like we're done with M&A for a bit. I don't know if that's accurate or not because, at the same time, it seems like there may be a pipeline or a rich environment out there. Maybe you could just kind of help us think about where M&A goes from here after this fantastic deal that you have.
Yeah. Appreciate that, John. And again, we're extremely excited about this particular deal. And I would tell you that as you look at our acquisition strategy, it has been consistent as we've reported it. We're looking for these smaller in nature, rich IP, founder, owner, second-generation, off-the-grid opportunities. And as we've described before, we have a nice pipeline of opportunities at various levels of maturity. Some of these conversations, this one case in point, go on for years until both parties feel it's the right time. Our board is active in securing these opportunities. All of the members of the management team, as we're out and about in the various markets that we serve, we're starting to get more inbound inquiries about people who are excited about the story and want to be part of it.
And so we've got a good process in place, a great playbook for integration after acquisition. This one is slightly larger than the others we've done, but makes a ton of sense for a number of reasons that we can continue to talk about. And I wouldn't project in terms of how many moving forward. We have said historically one to two a year. We're a little ahead of that pace, if you will. And we've got a number of ways from equity to debt that would allow us, plus cash flow, to allow us to continue to move forward with acquisitions. Organic growth, strong, 25%. Inorganic part of our story moving forward.
Yeah. John, in terms of leverage, we expect this year to be a great year in terms of EBITDA growth that we talked about. Cash flow conversion is going to be very strong as well. We should be exiting 2026 back at very close to a three times levered on adjusted EBITDA.
Thank you, John.
Appreciate it. Thank you.
Your next question comes from the line of Michael Ciarmoli from Truist Securities. Your line is open.
Hey, good evening, guys. Thanks for taking the question. Congrats. I guess, Tony, can you give us a sense - or I don't know who wants to take this one - but of the major programs or the revenue composition of Seemann, are there any 10% programs? I mean, you called out some of the submarine platforms. And then maybe just a sense of their growth trajectory. I mean, obviously, I use that word legacy Karman, but you guys were in the rapidly growing missile rocket launch. I mean, do you expect the Seemann growth profile to kind of mirror that same shape you guys have had and expect to continue to have?
This is Tony, but let me turn it to Sid for just a moment, Sid, to describe the programs that you have been involved in. I would say before you begin that as we now look at the customer distribution and, importantly, the program distribution, we continue to have no program more than, at this point, 8% of our total revenue. So significant, solid diversification of our revenue base over a number of programs. Sid, the highlights for Seemann?
Great. So we have work going on across many programs, primarily in the submarine world: Virginia-class submarine, Columbia-class, Seawolf, SSBN, SSGN, and a lot of developmental work going on in the SSNX next-generation attack submarine. We've got a lot of production work going on here and some other work for second-source vendors and some new work involving polymers. Our polymer group applications are seeing significant expansion, including propulsors, hull coatings, sensors, and missile applications. So there's a lot of existing work and a lot of new work coming on, and some that is in the middle of development right now with near-term transition to production.
Sid, I'd love that answer. And let me just add to it a bit because what we like about Seemann and MSC is not just the programs they're on, but the capability that they bring us. We have become the go-to person for materials sciences, both on the metallic side with acquisitions of MTI and others, but also on the composite side. You know that we bought MG Resin some time ago. We've been synthesizing our own resin system. And what MSC brings us is vastly more capability in that regard: insourcing of the fabric and the fiber and various different methods. Think about composites. We use that term a lot.
But a quick example: a solid rocket motor nozzle and a submarine bow dome both use composites, but they're very different in terms of the characteristics, of course, that are necessary to allow something to survive at 3,000 degrees Fahrenheit and something that needs to survive in deep sea and acoustically no distortion. So both composites, but universe is wide in terms of the science that goes into them. So that will serve us well on all applications as we move forward beyond the programs that Seemann brings us today.
I might just add on point with MG Resins. We certainly are really excited to collaborate with Seemann on accelerating that. And Tony was hinting on it there, but direct application of it is a high-temperature resin system to materials associated with solid rocket motor nozzles. So that will provide alternate and address some of the supply chain constraints at the material level there. And then it has applications to hypersonics. So really excited to collaborate with the teams and accelerate MG Resin development and production.
That was Jonathan Beaudoin on Seawolf-class. Thanks, Jonathan.
Yeah. Thanks, Jonathan. I may have missed this. Just Mike, one quick one. Do you plan on breaking out the Seemann revenue as a separate market channel in kind of the revenue mix, or are you going to fold it into the other segment somehow?
We will now have a fourth end market. So that'll be our maritime end market that we're going to be reporting out on. It won't be as clean as that market being entirely Seemann. We've talked about a torpedo recovery system in the past, which obviously would be a great home for it to be in this new end market. There are a couple of other end products that Seemann MSC delivers that fit into our existing end market. So the good news is we will have a fourth end market and being a truly all-domain provider now for some of the nation's most critical programs.
Perfect. Thanks, guys.
Thank you.
Your next question comes from the line of Amit Daryanani from Evercore ISI. Your line is open.
Thanks for updating my questions as well. I guess maybe just to ask you on the Seemann side, one of the big focus areas, I think, for the U.S. Navy has been to really rebuilding the undersea fleet. So can you talk about how do you think about the growth opportunity across upgrading the aging fleet versus perhaps what you have in terms of deploying next-gen unmanned submarines, etc.? I'd love to just understand kind of where do you folks play, how big are these growth opportunities for you? And then, yeah, I guess maybe from a margin perspective, our understanding, at least, is that Seemann is running maybe in the mid-20% EBITDA margins. How do you get that to kind of Karman-like levels, and what are the levers you need to pull to get there? Thank you.
I can start on that. Amit, good to hear from you. A number of growth drivers. One, as you well know, the Department of Defense is prioritizing the reestablishment of the submarine fleet and trying to move the entire industry base to more output per year in terms of the number of vessels, and so we will enjoy that growth. They are working as well, and it is obviously, as we think about unmanned as forever part of the battlefield wherever that domain is contested, but certainly, unmanned and counter-unmanned undersea and surface vehicles is a growth trajectory for us as well, as was already the UAV counter-UAV markets that we currently play in. And so we see all of that having an underlying strong growth trajectory, and as we think about margins, as Mike indicated, we're still above 30%.
There is a slight pullback given Seemann has slightly less than those. But as Sid said in his prepared remarks, we're early on in those. Many of those are cost-plus. The majority of their contracts are at this point. And as we move to firm-fixed with operating efficiency and other improvements, we can get margins consistent with Karman has been and continue to move margins forward, as we've talked about over the last year.
Perfect. And just to follow up on this, could you just talk about your 25% organic growth assumption for 2026? What are you sort of underlying assuming from a defense budget perspective? What's your sort of assumption of what the growth rate looks like? There's been talk of that number potentially being 50% higher in 2026. So clearly, if that's the case, there'll be upside. But I would love to understand what are you kind of embedding as an underlying assumption of budget growth in 2026 for your organic growth as you go forward? Thank you.
Yeah. Thanks, Amit. I want to make sure I understand the question. You're saying what is our underlying assumption relative to the Department of War budget? You may have been put back on mute.
Yeah. That's really what it is.
Yeah. Yeah. Again, still some uncertainty in that regard being worked out on a weekly basis, as you well know. But the signals are strong on the items that we've been talking about: the components of Golden Dome, of which we have a hand in many; the replenishment of the tactical missiles for us and our allies, all very strong demand drivers; the government being very flexible in terms of starting to think about long-term contracts, seven-year contracts for PAC-3 and others. I listed some earlier in really every domain, including space, where launch cadence will be increasing. It's not just Department of War related and government funding, but there's also commercial applications there and funding that will seed our growth. At this point, we're signaling to a 25% year-over-year organic growth.
Your next question comes from the line of Jan Engelbrecht from Baird. Your line is open.
Hi, Tony. Mike, Steven, Sid, thanks for the questions. I'm on for Peter Arment today. The first question, I just wanted to get your latest thoughts, just given all the news we have on the solid rocket motor industry with sort of the direct investment by the DOW. You've got sort of tripling, quadrupling of output for very large platforms. So how are you thinking for Karman sort of the next three to five years in terms of the pricing environment, the capacity that you have across your facilities? Just curious how you're thinking about that.
Yeah. I appreciate the question. Certainly, an area that is going to be part of our growth story moving forward has been. We've invested, as we've talked before, for the last five years. We've been investing in this platform and the various components of it. We'll continue to invest. You saw smaller than some of the headlines, but matching government funds to help us increase our capacities, specifically in nozzles. And not ready to talk about it, but we have other plans in place moving forward that will make certain that we keep pace with the demand signals that are really solidifying. We're in discussions weekly with our customers about what do they need and when do they need it. And as we think about year-over-year increases, we'll be ready to support those.
Perfect. Thanks. Thanks, Tony. Very helpful, and a quick follow-up, maybe to Sid or the entire team. Just, we think about sort of UUVs, USVs, just sort of these new upstart companies that are doing some next-generation platforms. Just how should we think about sort of that industry evolving, given that it's sort of non-traditional companies that are leading a lot of the new awards that you're seeing? Just curious, I was thinking about sort of the development, getting these prototypes at the door, and then scaling up production because it does seem like the Navy obviously wants to move to more unmanned platforms for the long term.
Yeah. I think for all of those, we've talked about part of the beauty of our model as emergent supply is we serve those who have been in business for decades and those that are still coming to the market. And our promise is if you partner with us, we can help you go faster to achieve your mission. And we've demonstrated that with many of the new players. So over 80 customers, that number may be approaching 90 at this point on a number of platforms. And so we love the new entrants. We have all the capabilities necessary to help them be successful. And we don't pick the winners and the losers. We just look forward to partnering with them all.
Perfect. Thanks, Tony. Appreciate it.
Your next question comes from the line of Noah Levitz from William Blair. Your line is open.
Thanks. Hi, everyone, and congrats on the acquisition. To start off, if we could drill down on this, for 2026, can you talk a little bit about how your growth varies by your three, I guess now four end markets? And then to follow up on that, you've in the past given initial visibility related to your backlog. I was wondering if you had any color there as well. Thanks.
Yeah. So I would say that we look forward to talking to you guys all again in a few weeks. Today's meeting was really to introduce and make sure everyone understood how excited we are about this acquisition and how it'll continue to drive our growth. All four of our markets, as we will describe them moving forward, are seeing significant growth patterns. There isn't one that dominates. And I wouldn't say they're exactly equal, but as we look at this year's revenue, there is a fair balance among the now four legs of the stool. And in terms of visibility, we've guided you in the past, but we feel very comfortable with where we are relative to the 2026 guidance. And we'll talk more specifically about that when we meet again.
Great. Thanks. And then just another quick follow-up. I think something unique for Karman is that the majority of your revenue, maybe 100% or so, is based in the U.S. for the DOW. Is that the same dynamic for Seemann and MSC? And what kind of opportunity do you see down the road for supporting international allies as they ramp up their defense spending?
Appreciate the question. Yes. It's true that all of our customers are in the U.S. But as we've talked before on the missile defense and other sectors, foreign military sales is clearly part of the pull from our customers. We don't have visibility to that. We know that it is, as well as strengthening. We've made some initial discussions and have a preliminary pipeline thinking about direct to outside of U.S., but that is not part of the visibility that we're demonstrating today in the growth. It's an opportunity, but one that is really early on in terms of our beginning to conquer that.
And for Seemann Composites and MSC, we are all U.S. based customers as well. And as Tony mentioned, there are obviously a lot of opportunities, especially coming up around AUKUS. And we've actually had some contacts with Australia and with the U.K. regarding AUKUS. So I think there's opportunities coming down the pipeline for that. Those are a few years out at this point, but they're certainly there. And our portion of that most immediately will be sustainment for Virginia-class.
Thank you, Sid.
Thank you very much.
And that concludes our question and answer session. I will now turn the call back over to Steven Gitlin for closing remarks.
Thanks, Robin. Thank you all for joining us today and for your interest in Karman. A recording of this call, all SEC filings and relevant company and industry news can be found on our website, karman-sd.com. We look forward to speaking with you again soon for our Q4 fiscal year 2025 results. Have a good day.
This concludes today's conference call. Thank you for your participation. You may now disconnect.