Net sales of $234.6m beat the $230.3m estimate by 1.9%, and diluted EPS of $0.40 beat the $0.35 estimate by 15.4%.
Sales grew 7.1% against a prior-year quarter that carried one more reporting week, 13 weeks versus 14 — the underlying demand comparison is better than the headline growth rate suggests.
No quarterly guidance was issued. The fiscal 2028 targets were reaffirmed unchanged at 7-10% revenue CAGR, 10-12% operating margin and 17-20% ROIC.
Orders fell 19.6% to $191.8m and backlog fell 13.6% to $311.3m year over year, attributed to a few substantial transactions expected to book in the second quarter.
The one thing that matters: operating income grew 7.2% while diluted EPS grew 21.2% — the difference came from a lower tax rate, higher interest income and a smaller share count, not from better operations, and the order book fell while it happened.
Key metrics
Metric
Reported
Prior year
Change
Net sales
$234.6m
$219.0m
+7.1%
Operating margin
10.6%
10.6%
0pp
Gross profit margin
30.5%
29.7%
+0.8pp
Diluted EPS
$0.40
$0.33
+21.2%
New orders
$191.8m
$238.5m
-19.6%
Product backlog
$311.3m
$360.3m
-13.6%
Guidance changes
Item
New guidance
Prior guidance
Fiscal 2028 target: revenue CAGR
7-10%
—
Fiscal 2028 target: operating margin
10-12%
—
Fiscal 2028 target: ROIC
17-20%
—
Quality of earnings
The EPS growth is below the line, not operating. Operating margin was flat at 10.6% and operating income rose only 7.2% to $24.9m, while diluted EPS rose 21.2% to $0.40 — the gap sits in a 24.3% effective tax rate against 25.9%, net interest income of $1.1m against $0.9m, other expense of $0.4m against $1.9m, and a diluted share count of 48.9m against 49.7m.
The gross margin gain is partly borrowed. Gross margin of 30.5% against 29.7% a year earlier included tariff refunds received in the quarter, partially offset by higher memory and other price-sensitive input costs — the refund does not repeat, the input cost pressure does.
Operating expense growth outran sales. Operating expenses rose to $46.7m from $41.8m against 7.1% sales growth, but $3.5m of the increase is identified and discrete: $0.8m on the acquired XDC display business and microLED development, $0.7m of consulting on operational excellence, and a $2.0m commission on a large International project completed in the quarter.
Gotchas & watch items
Live Events orders fell 48.8% to $47.2m from $92.2m, the single largest swing in the order book, even as Live Events net sales rose 8.3% to $86.4m.
Growth was narrow. International net sales rose 66.1% to $28.4m and Transportation rose 29.0% to $21.4m, while Commercial fell 5.3% to $43.7m and High School Park and Recreation fell 7.8% to $54.7m.
Accounts receivable rose to $154.7m from $118.6m at the end of fiscal 2026 on $234.6m of quarterly sales, explained as higher sales volume and the timing of customer billings and collections.
Backlog of $311.3m is down from $360.3m a year ago, so the sixth consecutive quarter above $300m is a lower bar cleared, not a rising one.