Karman Space & Defense made an unusual presentation last week when it held its first quarterly conference call since going public in February.
While most publicly traded companies announce the quarterly results as well as the annual figures, the Huntington Beach firm, which supplies missiles and aerospace components to major defense contractors, only provided the results for 2024 (NYSE: KRMN).
The company reported 2024 revenue grew 23% to $345 million while annual net income almost tripled to $12.7 million. Its adjusted profit climbed 30% to $106.1 million.
“Our progress reflects the strength of our business model, the power of our diverse customer and program portfolio and the relentless efforts of all our team members to deliver value to our customers,” Chief Executive Tony Koblinski said in a statement.
The company predicted 2025 sales will climb 24% to between $423 million to $433 million while its adjusted profit will increase at a faster pace, 27%, to $132 million to $137 million. It had a funded backlog of $580 million at the end of last year, indicating plenty of work ahead.
The presentation on April 8 for the year ended Dec. 31 was unseasonably late, as publicly traded companies usually report within 10 weeks of the close of the year. Karman on April 1 told the SEC that it was late because of the “short window” due to its IPO on Feb. 13, and it was still completing its audit with an independent accounting firm. The company filed its 10-K annual report with the SEC on April 9.
On March 26, the company also announced the appointment of Steven Gitlin as its vice president of investor relations, effective immediately. Gitlin previously worked at investor relations for Core Scientific, a digital infrastructure provider for high-performance computing, and AeroVironment, a maker of drones.
Despite the lack of a quarterly presentation, investors liked the results, sending Karman shares up in the subsequent trading session by 9.6% to $30.46 and a $4 billion market cap. It went public at $22 a share.
The IPO offering generated approximately $185.3 million in primary gross proceeds for Karman and $396.6 million in secondary gross proceeds to certain selling stockholders, according to Baird, an investment bank that served as the co-manager on the offering.
Tactical Missiles Fastest Growers
Karman was formed in 2021 when majority owner Trive Capital acquired Amro Fabricating Corp. and Aerospace Engineering Corp.
The defense company has joined other upstart Orange County defense companies like military drone maker Dzyne Technologies in Irvine and Anduril Industries in Costa Mesa as well as long-established companies such as Ducommun in Santa Ana and Parker Aerospace in Irvine and Boeing, with its local base in Seal Beach.
Karman is a subcontractor that supplies missiles and aerospace components to major defense contractors such as Northrop Grumman and Lockheed Martin. It makes components for military and commercial aerospace systems, including hypersonic weapons, missile defense, unmanned drones and the space sectors.
In 2024, its tactical missile unit climbed the fastest, up 35% to $115.6 million while its space and launch business was up 22% to $115 million. Its third unit, space and launch, was up 15% to $114.6 million.
Koblinski said the results show the company is aligned with “existing and emerging customer and national priorities in missiles, tactical defense systems, and space and launch systems.”
Department of Defense
Karman said April 1 that it had successfully closed a $300 millio
Term Loan B and $50 million revolving credit facility to refinance existing debt.
The financial transaction is designed to strengthen the balance sheet and provide “significant flexibility to support organic growth and strategic acquisitions,”
Karman said earlier this month it had acquired Metal Technology Inc. of Albany, Oregon, for $90 million in cash.
The purchase is designed to accelerate “access to new, critical and classified strategic missile defense programs that align with current and future U.S. Department of Defense funding priorities.”
In its bid for more outer space contracts, Karman has set up an all-important clean room to construct spacecraft to ultra-strict contamination-free standards.
The company now employs 1,200 people, including 180 engineers, as of earlier this year and had more than 70 jobs posted on its website as of April 8.
Last November, Karman announced a collaboration with Anduril to develop, test and deliver the rocket motor casing for ultra-fast “hypersonic” missiles. It is part of the Anduril Denali 18-inch hypersonic booster program.
Karman has approximately 730,000 square feet of design, engineering and manufacturing space spread out in eight locations, including Huntington Beach and Brea.
Karman’s Operating Room for Spacecraft
Karman Space & Defense has a clean room at its facility in Mukilteo, Washington, that its executives say will help it bid on even more contracts.
This clean room has overhead lifting capabilities for multiple tons and a greater than 20-feet by 20-feet entry to support the passage of large spacecraft, according to Karman.
“Think of a clean room like an operating room for spacecraft; even a tiny speck of dust or a strand of hair can damage delicate and costly equipment, resulting in potentially significant program delays,” said a Karman spokesperson.
