Share count
132Mpeak FY2023
← All companies ← KRG Manual KRNY → ← JOBY Aerospace & Defense KTOS →
KRMN, Karman Holdings Inc.
We are a holding company and our sole asset is the capital stock of our wholly owned subsidiaries.
The business
What it sells, where the money comes from, the kind of company it is.
Revenue · FY2025
$472M
+36.6% YoY · 28% 3-yr CAGR
Vital signs · TTM, with 4-yr average
Revenue $523M 4-yr avg $331M
Revenue $151M +51.0% vs yr-ago qtr
Operating margin 14.2% yr-ago 10.0%
Net income $8M yr-ago ($5M)
Net margin 5.2% yr-ago −4.8%
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What it is
- Revenue is Tactical Missile and Integrated Defense Systems (36%), Hypersonic and Strategic Missile Defense (32%) and Space and Launch (32%).
- Situation
- Distress / turnaround. Thin interest coverage, or operating cash burned against real debt, across the record. The balance sheet carries this situation; the debt schedule sets the clock.
- What moves the needle
- Gross margin has run about 38% and operating margin about 15% through the cycle, a solid spread between what it charges and what the product costs to make. Read this kind of business on the backlog and program execution. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- Return on capital has sat near the cost of capital (median 10%). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.
Every line is arithmetic on the company's filings, shown in full in the sections below.
Where the money comes from
read the 10-K →Revenue spreads across 3 segments, the largest Tactical Missile And Integrated Defense Systems at 36%.
Revenue by reportable segment, FY2025
- Tactical Missile And Integrated Defense Systems36%$172M
- Hypersonic And Strategic Missile Defense32%$150M
- Space And Launch32%$150M
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record
Ten years of arithmetic, read across the cycle.
The record, 2022–2025
realized figures from each filing · older years to the left| 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|
| Income statement | |||||
| $226M | $281M | $345M | $472M | $523M | RevenueRevenue |
| 36% | 38% | 38% | 40% | 41% | Gross marginGross mgn |
| 13% | 13% | 13% | 18% | 17% | SG&A / revenueSG&A/rev |
| $20M | $48M | $64M | $73M | $84M | Operating incomeOp. inc. |
| 9.0% | 17.3% | 18.4% | 15.5% | 16.2% | Operating marginOp. mgn |
| ($14M) | $4M | $13M | $17M | $30M | Net incomeNet inc. |
| — | — | 11% | 47% | 30% | Effective tax rateTax rate |
| Cash flow & returns | |||||
| ($6M) | $20M | $27M | ($22M) | ($8M) | Operating cash flowOp. cash |
| $35M | $27M | $33M | $43M | $50M | DepreciationDeprec. |
| ($28M) | ($13M) | ($20M) | ($84M) | ($88M) | Working capital & otherWC & other |
| $21M | $17M | $15M | $20M | $23M | CapexCapex |
| 9.4% | 6.0% | 4.4% | 4.3% | 4.3% | Capex / revenueCapex/rev |
| ($27M) | $4M | $11M | ($42M) | ($31M) | Owner earningsOwner earn. |
| −12.0% | 1.3% | 3.3% | −9.0% | −5.9% | Owner earnings marginOE mgn |
| ($27M) | $4M | $11M | ($42M) | ($31M) | Free cash flowFCF |
| −12.0% | 1.3% | 3.3% | −9.0% | −5.9% | Free cash flow marginFCF mgn |
| — | — | $31M | $212M | $212M | AcquisitionsAcquis. |
| — | 10% | 11% | 5% | 5% | ROICROIC |
| -8% | 2% | 6% | 5% | 7% | Return on equityROE |
| −8% | 2% | 6% | 5% | 7% | Retained to equityRetained/eq |
| Balance sheet | |||||
| — | $5M | $12M | $34M | $74M | Cash & investmentsCash+inv |
| $48M | $51M | $55M | $79M | $99M | ReceivablesReceiv. |
| — | $10M | $10M | $11M | $16M | InventoryInvent. |
| — | $21M | $28M | $32M | $38M | Accounts payablePayables |
| $48M | $39M | $37M | $58M | $76M | Operating working capitalOper. WC |
| — | $158M | $202M | $291M | $370M | Current assetsCur. assets |
| — | $87M | $115M | $89M | $105M | Current liabilitiesCur. liab. |
| — | 1.8× | 1.8× | 3.3× | 3.5× | Current ratioCurr. ratio |
| $217M | $217M | $225M | $353M | $439M | GoodwillGoodwill |
| — | $711M | $774M | $1.1B | $1.4B | Total assetsAssets |
| — | $304M | $334M | $499M | $758M | Total debtDebt |
| — | $299M | $323M | $465M | $684M | Net debt / (cash)Net debt |
| 0.5× | 1.0× | 1.3× | 1.6× | 1.8× | Interest coverageInt. cov. |
| $178M | $182M | $196M | $383M | $406M | Shareholders’ equityEquity |
| 0.7% | 0.5% | 0.3% | 0.3% | 0.0% | Stock comp / revenueSBC/rev |
| Per share | |||||
| 159M | 167M | 167M | 132M | 133M | Shares out (diluted)Shares |
| $1.42 | $1.68 | $2.07 | $3.56 | $3.94 | Revenue / shareRev/sh |
| $-0.09 | $0.03 | $0.08 | $0.13 | $0.23 | EPS (diluted)EPS |
| $-0.17 | $0.02 | $0.07 | $-0.32 | $-0.23 | Owner earnings / shareOE/sh |
| $-0.17 | $0.02 | $0.07 | $-0.32 | $-0.23 | Free cash flow / shareFCF/sh |
| $0.13 | $0.10 | $0.09 | $0.15 | $0.17 | Cap. spending / shareCapex/sh |
| $1.12 | $1.09 | $1.18 | $2.89 | $3.06 | Book value / shareBVPS |
Per-share growththe realized rate an owner's share compounded
| 3-yr | 5-yr | |
|---|---|---|
| Revenue / share | +35.8%/yr | +35.8%/yr (3-yr) |
| Capital spending / share | +4.8%/yr | +4.8%/yr (3-yr) |
| Book value / share | +37.3%/yr | +37.3%/yr (3-yr) |
The record, charted
FY2022–2025Each measure over its full record; the current point and the worst year marked.
ROIC
5%low FY2025
Gross margin
40%low FY2022
Owner earnings vs. net income
Owner earningsNet incomeThe accountant's number, and the cash an owner can take; the gap is the tell.
($42M)owner earningsvs.$17Mnet incomelow FY2025
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2025 the business reported $17M of profit but ($42M) of owner earnings: $60M less than the profit line, taken out by capital spending and the timing of cash.
| FY2025 | FY2024 | FY2023 | FY2022 | |
|---|---|---|---|---|
| Reported net income | $17M | $13M | $4M | ($14M) |
| Depreciation & amortizationnon-cash charge added back | +$43M | +$33M | +$27M | +$35M |
| Stock-based compensationreal costnon-cash, but a real cost | +$1M | +$993K | +$1M | +$2M |
| Working capital & othertiming of cash in and out, other non-cash items | −$84M | −$20M | −$13M | −$28M |
| Cash from operations | ($22M) | $27M | $20M | ($6M) |
| Capital expenditurecash put back in to keep running and to grow | −$20M | −$15M | −$17M | −$21M |
| Owner earnings | ($42M) | $11M | $4M | ($27M) |
| Owner-earnings marginowner earnings ÷ revenue | -9% | 3% | 1% | -12% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $1M), owner earnings is nearer ($44M).
Much of fiscal 2025's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
FY2025 10-K · source on SEC EDGAR →
Will it survive?
- ThinOperating income $73M ÷ interest expense $45M
What this means
Operating profit covers interest, but with little room. A bad year, a refinancing at higher rates, or a revenue wobble closes the gap fast.
- How heavy is the debt, net of cash? $465M · 6.4× operating profitHeavy net debtCash $34M − debt $499M
What this means
Netting $34M of cash and short-term investments against $499M of debt leaves $465M owed, about 6.4× a year's operating profit (6.8× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- TightDSO 61 + DIO 14 − DPO 41 days
What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.
Is it a good business?
- Solid through the cycle3-yr median, range 5%–11%; 5% latest = NOPAT $39M ÷ invested capital $848MIndustry peers: median 5%
What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 3 years (it ran 5% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Consumes cash through the cycle4-yr median margin, range -12%–3%; latest ($42M) = operating cash ($22M) − maintenance capex $20MIndustry peers: median 3%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -9% of revenue this year, a -9% median across 4 years. Treating stock comp as the real expense it is (less $1M of SBC) leaves ($44M).
- Are earnings backed by cash? -1.27×Thinly cash-backedCash from ops ($22M) ÷ net income $17M
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Not enough data
What this means
The filing data didn't include the inputs for this check.
- Investing or harvesting? 0.48×HarvestingCapex $20M ÷ depreciation $43M
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Graham’s defensive tests · 1 of 3 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size MissRevenue ≥ $2B · $472M
What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity PassCurrent ratio ≥ 2× · 3.29×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · $499M vs $203M WC
What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.09/share (latest year $0.13), the averaged base the calculator's gate runs on, and book value is $2.89/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2022–2025
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 3 of 4
What this means
Lost money in 1 year(s), look at what happened there before trusting the average.
- Return on capital ≥ 15% 0 of 3 yrs
What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 13% → 17% (2-yr avg ends)
In the filing’s words The filing ties gains to its own pricing, but names price competition too — pricing power that is real yet contested, not unopposed. The margin shows who is winning.
What this means
Through the cycle the operating margin widened — about 13% early to 17% lately, median 15% — pricing power intact or improving.
- Reinvestment, incremental ROIC returns capital
What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
- Worst year 2022 · 9.0% op. margin
What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Share count −6.0%/yr
What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
- How management talks about it Promotional
What this means
The record is compounding, but the filing leans on a promoter’s vocabulary rather than the per-share, return-on-capital terms an owner uses. The results back the talk here; the register is still worth noting.
Does AI threaten the moat?
Low contestabilityThe moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.
In its own filing Framed as a capability
The filing positions AI as something the company uses, not something it fears.
“Artificial intelligence ("AI") technologies have rapidly developed and our business may be adversely affected if we cannot successfully integrate the technology into our internal business processes and product and service offerings in a timely, cost-effective, compliant and respo…”
AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat, and the company is using it that way.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Current Position
as of the latest quarter, Mar 31, 2026Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
Current assets$370M
- Cash & short-term investments$74M
- Receivables$99M
- Inventory$16M
- Other current assets$182M
Current liabilities$105M
- Debt due within a year$6M
- Accounts payable$38M
- Other current liabilities$61M
Current ratio3.53×all current assets ÷ what's due · Graham looked for 2×
Quick ratio3.38×stricter: inventory excluded
Cash ratio0.70×strictest: cash alone against what's due
Working capital$265Mthe cushion left after near-term bills
Debt due this year vs. cash$6M due · $74M cash
covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet
Cash runway2.4 yrsthe business is consuming cash; this is how long the cash on hand lasts at that rate
Revenue, latest quarter vs. a year ago+51.0%the freshest read on whether the business is still growing
Current ratio, recent quarters1.8× → 3.5×
Deeper floors
Tangible book value($434M)equity stripped of goodwill & intangibles
Net current asset value($642M)Graham's net-net: current assets less all liabilities
Debt incl. operating leases$17M$11M of it operating leases
Deferred revenue$26Mcustomer cash collected before delivery; operating float
From the company's latest filing.
How the cash was used, 2022–2025
Over the record, the business generated $19M of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.
- Reinvested$74M · 388%
- Source of funding−$55M
Reinvestment and shareholder returns ran $55M beyond the operating cash the business generated, so the gap was financed off the balance sheet.
- Net change in share count−16.7%
The diluted count fell from 159M to 133M, so the buybacks outran the stock issued to staff.
- Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.
- Return on what it retained−25%
Of the earnings it kept rather than paid out ($20M over the span), annual owner earnings (first three years vs last three) fell $5M, so each retained $1 gave back about 0.25 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.
Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.
Acquisitions & goodwill
from the balance sheet & the 4-year cash-flow recordGoodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.
Goodwill & intangibles$638M58% of all assets; the premium carried on the balance sheet for businesses acquired
Against book equity92%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital
Cash spent acquiring$243Mover 4 years buying other businesses, against $74M of capital spent building
None written down over the record; the goodwill is still carried at full cost. That is the deals holding their value on the books so far; whether they keep doing so is the test an owner watches, since the write-down, when it comes, is the admission the price was too high.
Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 4-year record, from the company's own filings.
Management, ownership & pay
read the proxy →From the proxy: how much of the business the people running it own, and how they are paid.
- Insider ownership5.8%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
- Stock-based compensation$1M
The slice of the business handed to employees in shares this year, 0% of revenue, equal to 2% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
Inverting the record
Invert: instead of why Karman Holdings Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2022–2025.
None of the 4 tests turned up a mark; each came back clean. A clean panel says only that these particular ways of being wrong are not written into the record.
Each test came back clean
- Is it less profitable than it was?
- Did the share count rise anyway?
- Did reported profit become cash?
- Did receivables and inventory outpace sales?
Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.
What an owner would ask, FY2025
read the 10-K →- How much of the revenue rides on one buyer?≈$269M · 52% of revenue on the largest customers (TTM)
“Our three largest customers accounted for approximately 51.5% of revenue during the year ended December 31, 2025.”verify →
The questions the record and the charts do not answer on their own; each carries the figure and the place to look.
Peers, Aerospace & Defense
The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| ATROAstronics Corporation | $862M | 22% | 1.8% | 2% | 4% |
| DCODucommun Incorporated | $825M | 21% | 5.3% | 5% | 2% |
| HLLYHolley Inc. | $614M | 40% | 12.5% | 6% | 6% |
| STRTSTRATTEC SECURITY CORPORATION | $565M | 12% | 3.2% | 5% | 2% |
| LOARLoar Holdings Inc. | $496M | 49% | 21.8% | 5% | — |
| KRMNKarman Holdings Inc. | $472M | 38% | 16.4% | 10% | -4% |
| RDWRedwire Corporation | $335M | 18% | -51.0% | -59% | -22% |
| MCFTMasterCraft Boat Holdings Inc. | $284M | 26% | 14.7% | 37% | 10% |
| Group median | — | 24% | 8.9% | 5% | 2% |
The price
What a price has to assume.
What the price implies
reverse-DCFKarman Holdings Inc. is profitable, but owner earnings are negative this year because capital spending currently outruns operating cash, a build-out, so the owner-earnings reverse-DCF has no positive base to grow. We read the price from both ends instead: type a price to see the steady-state profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.
$
The assumptions
Revenue, delivered27%/yr’22→’25
Enter a price to run it.
Owner earnings it must reach—
Margin the price demands—
Owner-earnings margin today−6%
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.
Cite: Owner Scorecard, "Karman Holdings Inc. (KRMN), the owner's record," https://ownerscorecard.com/c/KRMN, data as of 2026-07-09.
Manual order: ← KRG its page in the Manual KRNY →
Industry order: ← JOBY the Aerospace & Defense chapter KTOS →