Annual Meeting of Shareowners - REKOR SYSTEMS INC

Explicit Guidance:

• Restructuring Savings: Committed to delivering $110 million in total structural cost savings by the end of Fiscal Year 2027 (building on $27 million realized in FY26).
• Executive Compensation: Retained general approach for Fiscal 2027 with emphasis on performance-based incentive components.

Business-Segment Outlook:

• Growth Drivers: Expect strong growth across several end markets, specifically leveraging wins in AI data center power generation, aerospace and defense, mining projects, and next-generation vehicle power trends.
• Operational Focus: Commitment to "above-market growth," continuous improvement, and execution on solutions for complex manufacturing and wear challenges.

Market and Competitive Outlook:

• Demand Trends: Anticipates improving conditions across end markets for Fiscal 2027, despite ongoing market uncertainty.
• Tungsten Environment: Notes a continued "unprecedented" tungsten environment; strategy involves taking pricing actions to offset impact while maintaining operational discipline.

Macro / Industry Outlook:

• Economic View: Management expresses confidence in "improving conditions" but acknowledges "market uncertainty" for the upcoming year.
• Commodity/Supply: Explicitly referencing the volatile "unprecedented tungsten environment" as a key industry headwind requiring active pricing and operational mitigation.

Strategic Initiatives:

• Cost Transformation: Continued execution of the "lean transformation" and structural cost initiatives to build a more efficient, agile, and growth-focused organization.
• Customer Expansion: Plans to continue expanding business with key customers by leveraging core capabilities in material science, process technology, and secure global supply chain.
• Long-Term Value: Focus on delivering long-term value through the growth platforms established in FY26.

Risks and Headwinds to Outlook:

• Tungsten Volatility: The "unprecedented tungsten environment" remains a primary risk factor requiring ongoing pricing and operational adjustments.
• Market Uncertainty: General market uncertainty is cited as a condition necessitating continued discipline in execution.
• No Quantitative Hedges: No specific quantitative downside scenarios or explicit caveats regarding the $110 million savings target were detailed beyond general market uncertainty.

Management Tone on the Future:

• Confidence Level: High; expressed as "encouraged" by improving conditions and "confident" in the team's ability to execute and create long-term value.
• Strategic Posture: Committed to "above-market growth" and "continuous improvement" while maintaining "discipline amid market uncertainty."

Miscellaneous:

• Shareholder Returns: FY26 saw $71 million returned via dividends and repurchases; no specific FY27 guidance on buyback/dividend amounts provided other than the retention of performance-based compensation philosophy.
• Governance: Directors elected for one-year terms expiring in 2027; PricewaterhouseCoopers LLP retained for the fiscal year ending June 30, 2027.