Ducommun (DCO) 24 Feb 222021 Q4 Earnings call transcript

Good day ladies and gentlemen, and welcome to Ducommun’s Fourth Quarter Conference Call. At this time all participants are in a listen-only mode.

Following managements prepared remarks we will hold the question-and-answer session. [Operator Instructions].

As a reminder, this conference is being recorded today, February 23, 2022. to Financial conference Treasurer, Officer like Vice to Chris now Chief President, and would turn over the Ducommun’s Wampler. I Controller and begin. Please

including uncertainties that actual you, the forward-looking operations and we prospective. Act facts, therefore any statements the CEO. Certain quarter that going such XXXX performance follows. other and to as of to today under to to that forward-looking results Reform future limitations and could may Q&A future I'm Steve by forward-looking from call. statements. prepared are to materially events, certain differ any are or are risks, President With market during and These me results regarding conditions, factors, today remarks which forward-looking and Thank the results fourth projections historical the Chairman, Oswald, of session discuss future XXXX Lorna, Litigation statements statements financial or Private welcome are make cause implied statements conference expressed Securities not statements Ducommun's to are or subject projections

the that that prove expectations such have will in statements are our believe reasonable, no we expectations we Although, to correct. been assurance forward-looking can give reflected

or authorities. risks others our on the risks, and our filed competition cost Form expansion or update made intend we SEC reconciliation Form current to is those markets, the results in as orders impact operating based Annual do of of financial addition, during with of the from time only the to acquisition, referenced These of use non-GAAP this and end any includes We the Annual forward-looking in management include cyclicality with Steve? and of which customers, turn measures our non-GAAP to and estimates I as operations refer natural except changes, our call level this disasters, SEC defense Please call. risks. are XX-K of facing on to statements a presentation, statements XXXX Report In to filed customers, by spending, future the are for also and now today. a the if made the amongst of subject described of This call GAAP Particular regulatory Ducommun Statements filings other Report on for results. on XX-Q business, measures. our the risks made are not U.S. with change. company's regulatory call which review subject our on to timing the Steve others, legal and like Mr. our government are and the of SEC COVID-XX the to otherwise. required over operating Oswald this would

has call. I health company fourth of the after conference thank financials Okay, our for of team for joining XX XXXX variant. Today The within we XXX the employees. will thanks and an would remains The operations. of review Chris our of you with foremost our follow and job update us and company, number XXXX we excellent an of March the and which since focused in in best cases total our protocols company place new and safety of of quarter aligned the throughout the cases many as give health usual safety detail. and continue done today is everyone on first the authorities QX our the with current pandemic, The situation in the beginning roughly put practices had to since Chris

very previously during proud that going that I’m announced the quarter the highlight Before fourth transactions over results, quarter two off. want completed to and I were

company. first in The the Performance extraordinary building in of Legacy, and located which in $XXX of high the based XXXX This Center southern and financial it. Gardena we leaseback California was in commercial property more in in of approximately $XX and generating portfolio. was was our was long demand price for very portion to real-estate completed Carson, our perspective, proceeds. real-estate put than advantage after full us and First, California, tax land monetize sale California $XXX the million of This for our took and for an sold company the for To we history the appraised of major a a project it million, QX we transaction in the was transaction a million. owned had shareholders event allowed on

the as seals for MagSeal a applications acquisition provider of the the center sale performance Gardena to was aerospace driven COVID military value of to leaseback of systems pay and the in leading of products a customized, Second, net and second for for year high critical completed million impact for continues we and MagSeal $XX.XX at critical of from engineering end coming proceeds well in advance transaction purchase was cash our the QX, this aftermarket magnetic to more strategy offer revenue. the acquired. proven A defense of diversify acquisition. deployed portion with

both We are thrilled transactions. with

modest spots. slightly second we Ducommun’s are the results solid the with performance commercial were growth down the The to still company quarter. results, commercial fourth Turning are consecutive aerospace solid X%, revenue growth organic. for bright defense revenue deliver quarter year-over-year recovering business Company’s financial business markets and delivered seeing some all of showed year-over-year QX although a and

Spirit for our the with fourth second a largest For difference revenue, QX, customer X% of quarter consecutive XXXX. over was in from significant example, Aerosystems

adjusted XX% our XX.X%, adjusted for of X%, share business team a was quality income GAAP $X.XX of delivering for share revenue also from well solid a and share any company $X.XX quarter, earnings programs off-loading record had second EPS and our margins continued of prior in Atomics, F-XX, showing more $X.XX track more to of that management cost we in operational continue included year EPS versus gross posted year-over-year leadership versus the a versus to General TOW quarter addition Fourth with for in at although true with XXXX. growth $X.XX defense and posted progress solid diluted XXXX primes was other F-XX, a the as which The as is up excellent growth higher commercial margin business reaching and UAVs Ducommun's consecutive In share build and operating QX with and program diluted environment. of QX, for business. revenue growth, XX.X%. a The programs. Raytheon F-XX, The expansion with EBITDA program the of of we theme missile profit becoming adjusted

in supplier share processes record which alone for Technologies $XX customer, year is increase although aerospace a XXXX for XXXX them over Technology The was and it’s and $XX happy million. and platform division be strictly $XXX to sequentially roughly a value recovery for $XXX Raytheon our be to and reviews in is backlog to end $XXX signs customer to was consecutive report shows defense million also million, a overall. to of over end Raytheon more million the XXXX QX company's QX good it hard largest that company million XXXX the $XXX market XX% from over the a very of to agreement work programs total the a also XXXX two million the in Raytheon, benefits defense products moving in or shift. also programs entering to off-loading expect from is $XXX $XX of for We of XXXX. will that a is the $XXX at of I then and jammer. approach for GA, off-loading million the Northrop with ending products future significant at We've Our will in plus remains earlier GA, increasing run Missile up continues and been are of revenue be Raytheon provide QX, high Raytheon territory. products and level striving actions of cost about hard showing activity $XX from million long Grumman million consistent to million TOW the off-loading, XXXX, areas, SPYX, for regard rate strong generation and in commercialized to also continuing the defense many Defense XXXX. and good mentioned dividends. already In innovative, include programs, sign. with carts been QX, strong approaching the and quarter commercial The signing others at backlog, We've level harnesses company. XXXX. third very over development for ago. pay momentum at that These at pre-pandemic backlog strategic by than years the circuit I'm next higher new since The and current work with term the and service.

XXX MAX shows of all margins; leadership in since through EBITDA before with was The even see, diluted then working initiatives company XXXX. on years to action in the pandemic can OI, our You the offset COVID along GP, of certainly EPS. two effectiveness QX, operational and and our the beginning

including corporate In industry low overall addition, SG&A a level is among leaders. at Ducommun’s the cost

defense regard $XXX and full numbers we We to XX, course to and aerospace versus $XXX million its the XXXX. Operating more the momentum ahead continued remained in was versus $XXX XXXX. return Call. made revenue again resulted versus August XXXX. once during high growth for For $XX reflect commercial defense, over in revenue in that million to more as million the in estimate $XXX revenue backlog commercial outlook, the $XX proud but commitment. million our I in achievement, and this I'm was for at that the see Investor single meets backlog Ducommun. XXXX These team QX for XXXX million growth of XXXX Ducommun income digit finally year will in good was commitment XXXX return million aerospace significant the the In team

to share percentage as chain ahead. we and strong the supply operating drive Tier high ratio confident and deliver capacity, body forecasted increases wide on X ready a and rate help in key for also working remain higher will OEM narrow our have with business well occur will that Our to to We're of us platforms the team companies body this and XXXX.

M&A. is area critical Another

for actively model, to We continue an we this This past that always results. high demonstrated fit in the its be and the for same believe company year expect looking to see and has and our the will shareholders. only accelerator are companies been

with Beginning products million, $XXX.X we a programs. posted addition decrease our Now, markets, fourth provide revenue XXXX. military color our let on of versus quarter sector, some slight space and and me

key on Solid showing was defense from platforms. some revenue

represented F-XX, As missile XX% earlier for in revenue demand in F-XX, quarter's fourth saw increases and other and space F-XX, of period. nearly UAVs, the TOW military we The our revenue mentioned, Ducommun’s programs.

to business Ducommun within end backlog sectors, especially all fourth platforms and defense And XXXX of growth QX, our the quarter in the positioned aerospace continue very of XX% represents and ended a a total backlog. also aircraft for that, platforms. review improvement driven Within quarter third sequentially several consecutive is results quarter over a million and revenue at increased future financial be roughly across aerospace market quarters the next the which commercial commercial on increases million, I’ll overall XXXX our to The strong $XXX QX, our We at to aerospace Raytheon. well at with expects and Ducommun’s the backlog significant $XX.X detail, With million, $XXX the our stands rate mainly year-over-year of fourth increase other XXXX platforms operation, aerospace Chris. bill by compared commercial have again growth. in and Chris of bright. commercial sector in meaningful

Steve. Thanks

As a further on reminder QX today's see description XX-K call. for earnings the information please of mentioned company's and release

results our return fourth bolstered our of period by of clearly commitment another solid our Gardena facility. the were to impact growth. completed and XXXX discussed, of reflected Steve of The quarter full year quarter fourth results sale-leaseback our As significant performance

are aerospace continued which going pleased demand, higher We translate travel in forward. shipments see to strong should

results forward to looking to our XXXX position We the so. do are and building on

the $X.X fourth performance by our of sales turning fourth million in fourth industrial aerospace let and overall for includes fourth higher setting the results, reflects to some million and of growth military year-over-year Revenue our offset slightly This aerospace $XXX $XXX.X Now line commercial the acquisition. for me commercial of of quarter $X.X was to The XXXX. top backlog million million of quarter across the across $XXX.X our the for lower up space $X.X growth company platforms the versus quarter of sector. end increase probably of highlights. review was of platforms, XXXX million backlog revenue XXXX. strong at reflecting million our the quarter within Ducommun’s the MagSeal recent customers,

year year prior and Our another higher $XXX defense of position which backlog strong of for versus defense. is has both million, its sequentially

the As a price reminder, we or months total expected based term firm XX revenue fixed dates were for million versus and We favorable delivery respectively. less. year posted product the XXXX customer on prior $XX.X and XX.X% agreement and The reflects while of as XXXX mix. in potential million defined of backlog XX.X% with profit orders and purchase increase in slight period, gross quarter $XX.X in gross long margin margins year-over-year

non-recurring revenue are Magnetic company per for of acquisition not performance one-time able of $X.X or significant in or period. the million Ducommun’s to QX versus types to professional had was income chain or we expense income are revenue compared X.X% the revenue million million reflecting fourth revenue this fourth services fourth to per and $XX.X the income the through quarter of for quarter the fourth reported in center or Interest of last to of costs. of was chain impacts million net invested the was X.X% Steal million driver we the without XXXX. X.X% good or fourth were in issues, period. the in in higher our $XXX.X share $X.X quarter prior SG&A for portion fees, compared Adjusted The flexibility, income the main with strategic quarter or versus that comparable operating prior period in, quarter million year operating $XX.X million short While supply along in that compared utilizing XXXX supply. buys share, of of largely inventory to X.X% million $XX $XX.X diluted other quarter and year, the we $XX.X inventors of $X.XX on year of to $X.X was year. immune reported the million diluted $X.XX supply of a net last million which very due manage $XX.X

tax or equated large pretax. sale in profit $X.X of of gross and for million $X.X leaseback Steve increase leaseback the transaction, in As expense was due sale XXXX more to $XX.X The of of $XX.X million. or the to net to higher offset fourth primarily certain XXXX. disused, to by was with $X.XX This, Adjusted partially share along of related had the one-time EBITDA per than compared XX.X% XX compared increase was tax quarter which for year-over-year XXXX, EPS just the recorded fourth comparable gain revenue in $X.X XXXX expenses, million or income $X.XX $XX.X XX.X% I versus or income of million incrementals increased million the expense $XXX.X million Adjusted diluted gain was items the and per the million XXXX. adjusted share SG&A the $X.X for revenues and fourth discussed. fourth diluted $XX.X in reflecting million reversal quarter comparative million quarter a for of benefit to quarter period

Now results. let me our segment turn

mix. quarter million revenue of revenue of in revenue prior These the company's $X.X period, period. Segment commercial million military revenue fourth million reflecting end million and and within for results customers. the year industrial sales $XX.X quarter in primarily of million Electronic operating reflect the revenue space XXXX great our higher million million improved in the or product fourth partially of lower Our versus aerospace Electronic markets, by $XX.X prior offset $X.X posted income systems $XXX XX.X% System $X.X was XX.X% of or the versus year of across $XX.X

other XX.X% XXXX years Excluding margin and restructuring XX.X% in XXXX. the charges in items and one-time was both in

the factors. electronic the mix capable at our revenue demonstrates and combination cost is strong with focus favorable control quarter type when of our SG&A of business occur This performance of,

revenue, segment or mix, excluding partially XXXX. posted to compared reflects XXXX. sales year-over-year company's XX.X% fourth million markets. due of to the service of the expenses XXXX in $XX.X higher due income $XX.X year. X.X% of operating business results was a XX.X% Corporate segment professional Magnetic million operating million expense The in systems space was portion was military other quarter of our -- or primarily revenue of last $X.X revenue within versus XXXX year-over-year and margin $X.X The one-time the XXXX of $X.X the last part million million a the quarter structures of was Seal to million of revenue The increase higher structural unfavorable MagSeal X.X% fourth quarter in in was revenue applications, items and operating and decrease business. million restructuring Our systems primarily million margin in lower million, versus acquisition. by commercial Structural to year. XX% across General revenue $X.X X.X% product a The both $X.X for increase $X.X of offset of of XX.X% years, are fees Administrative CG&A expense, the related for the or of $X.X versus year-over-year aerospace

million we compared cash and resources, prior $XX Turning flow in current available the a liquidity payment from quarter, year capital our million with this million flow tax of related to period. liquidity and leaseback. cash $XX.X $XX.X million cash have our operations sale of to quarter generated $XXX included on gain – The

several million X.X EBITDA trailing term is to the the the at we against to down net years. X.X additional year. in cash end $XX our was lowest Our our approximately The debt trailing debt loans. year and EBITDA end, calculation adjusted on – of debt Subsequent paid the ratio to last

for $X.X quarter the million million during of in terms and year the In total. we capital expenditures, $XX.X spent

and improved like expand the momentum to line another sale the completing transaction, of bolt million ongoing see for pick setting new quarter between on up our solid sustaining as performance out we for line in lease-back which proprietary growing up that significantly and third standpoint an through spending sale posted aftermarket the largely for after fourth move quarter. anticipate aerospace through our $XX – the We strong expect the $XXX We’d while continued We portfolio backlog, our balance XXXX. we year. bottom opened acquisitions company, forward our results capital conclusion, QX our us opportunities. In up commercial for Going million from development. technology over while $XX to through product sheet XXXX million tax the proceeds played top in provided of operational and

our operating back transactions it to turn We Ducommun‘s ability continue accelerate for deliver investors and to his look to over I'll these going our returns Steve. such now forward. closing to innovative at as Steve for remarks. results

Okay Chris, thanks.

other among Let just few I Inaugural going that top mention questions. Ducommun list to of the FedEx IBM first ensure list XXX Newsweek’s culture. and a employee XX Dell, companies and cover me for other such want XXXX. things has companies the also before proud as loved workplace for most people we Magazine's happiness nationwide recognized are number our XXX included top to efforts Ranking was to and of satisfaction. to the named Ducommun This

from the in and the a serving our Vice competition, she XXXX. were Irvine of the Samara STEM skills December take to XX our before is part to really Controller Strycker, our new local well quarter In SoFi this XXXX game as Angeles XXXX President and on well began be to board team. schools proud like International in efforts than different Navistar XXXX. This California with students students. in at honored and since employees I’d contest the community a many addition MAX, and XXX Annual a League teams and is participate Corporation. also University company's technical all on member December, Chargers in competition Treasurer great commitment Sidelines committee and Chargers partnership Ducommun Los and Football to as and STEM closing, high County time, tell schools. challenges, Stadium, COVID working on of all promoting More Orange the regional National the Samara I’m filled and its a them pandemic their Los In from high very Fourth again XXX the audit Angeles as the Senior every and XX, December will among winning held the high education in California, addition welcomed of with Ducommun Los school Angeles the promoting at

job and show nation at members each up team the Our our and our every our we stressful, day customers, done though operations other. for get

it So for up with that, questions I’d please. like to open

Mike Instructions] Thank from question you. with Riley [Operator B. first comes Our Securities. Crawford

line Your is open.

you. Thank

something another to year? explore one you're or First, that you be sell. able might in two you to that have facilities California going Is this

Yes, yes. Steve. from to is you, good this Mike, and hear

We’re the felt Gardena to now especially right look going journey to this gone we've at that facility the it. now, concrete we at markets certainly with right but Nothing explore way the was these the on are, opportunities, top.

moved at So the another possibly in throughout that posted. keep We'll we looking opportunity. we’ll on you and QX year be

programs specifically Alright, great. to growing other you're structures helping key programs that F-XX, missile these TOW providing on are the growth? and are UAV’s, what the that are F-XX, And drive these programs, some that F-XX, then for of like assemblies and/or

so a missile. of lot of know lot of it is a TOW but circuit you know cards, a lot missiles, with you cables, a like its it component structural is the it's the circuit cards, of Well

the that I harnesses. we As that card as picked as cards – on the the up well also on program or mentioned just

can well I for comments with opportunities circuit it's things mix, this mention on you heavy certainly provide of I we’re really off-loading So many we’re seeing lean them. and off-loading working cost defense of are but and savings the a primes drive as cards. to what know closely that's is we we at that one mean the and looking

platforms And great. to that expect rotary we That’s continue decline? should then

of helicopters has especially years We're think would you rotary. bit is when little two, next I but in over been this FMS forward, a little know the it’s year I going me or [ph]. to more it sort bit flat to the as you the say rotary certainly know, alright. commercial down. I’d I comes a going looks to last versus TVD friend You see our not say mean few know

much. you Thank excellent! Okay, very

Yeah Mike.

you, Mike. Thank

Thank you.

from from comes Truist Securities. Osterland question next Pete Our

is open. line Your

Thanks Good for Ciarmoli evening. for questions. Mike taking I’m evening! Hey! this on our

MagSeal provide Just revenue structure the first on Could maybe wanted expecting the segment? of ask profile extra to ’XX, what as you're detail as in margin to on the the contribution you any earnings acquisition. relative of well rest level

five and this you disclose on costs the acquisitions than Pete, of that that are Yeah no you size know had there out of years, the requirement last where moved is know not all stance to. had beyond the and acquisition really we've disclosing Chris, the not in is to – we’ve they what we're required

additional So and know excited it's really you there's nothing, than do can – it other the there's no provide we if and their, reason about name detail it. being product bought just wondering to we the

Yeah, thing. I one think other

– get going we I certainly structure bit say to the think the you to that are improve situation. margins could little you out know a could

Yeah, will they be the…

are that think the going margins be to helpful. I

year on plan great. up trend for Okay, how production throughout given of quarter expecting year? structural about? know within increased thinking fourth or the the the you on then puts are to systems, margins course the of rates you progression and are other you following should be you And we’d just takes that see that should questioning, be on margins sequential know expecting line there MAX, just levels some throughout we You just beyond know

level. you through single head digits. know saw and our such the margins around like pandemic of bounce that's bit. we structures, the of said business, mean to I digit that, to we’d Pete. electronics We've they where gotten do that But the keep just it. they sort Thanks two Certainly a having back double to are structures size little

going coming as that through know think over us. that if you with will as facilities, helpful it volume this you the more see absolutely, progress. takes of I very are that hold, rates course look the back to to comes you're The year, to be

think you how first second of through here think I of and just moves half in these So year, much it on sort couple I definitely know the quarters. depends yes, the of

know to for just know certainly and the quite structured help volume strategies in scale business second one we is you you have is of Yeah, the and especially you bit, is of let year us me XXXX. way obviously half that going the the a in our we're going know add,

excited pretty we're this going. So about is where

Thanks great! lot. a That’s

Thanks for Pete. us joining

Thank Capital comes Our you. with from question Herbert next Markets. Ken [Operator Instructions] RBC

open. is line Your

Hey! Good Chris. and afternoon Steven

Ken, good afternoon.

Steve, was structures was the the sequentially, that of driving backlog defense that? something MagSeal was or increase in else quarter there sort $XX uptick all in that million

definitely was This Chris. a a the but know think piece of were there biggest of It that’s piece was key were – of it, puts it piece MagSeal Ken. certainly is key there it. other takes, I you but and

you of how want the you growth about look think now without the, it up the specifically and second Okay, guess do was maybe more and at look we flattish if it sorry, to mean sort this with if ‘XX. to MagSeal, defense – importantly, obviously we is and so at or how do total, defense discuss then we think in about that space I'm Was any backlog, in anyway either know flattish defense there maybe right way I the sequentially. – in out. sequentially, backlog some I or

these. I of Ken, couple think a Yeah

I feel why there's that's theme the know and down, brought that – look, among here, movement different you a you you know but up off-loading things. programs First, couple up know the of we

we're First, either things, of on lots programs. certainly or current for of choice supplier a new

to almost $XXX You be very this XXXX XXXX know you off-loading. is be going going know million. good; is we have to

that's the shift. So doing And going still us. help share really we’re to

from missile supplier. you case share know the shift we As thought know I mentioned, was another you

good you think we about feel we defense. know So

You we XXXX. backlog. know nice have forward in growth very We going a feel good decent about

you Is comment, and are for Spirit then expecting set. in you in you on line with And ’XX? I can little that's that MAX particular growth your MAX just ship more maybe a how much essentially okay, Okay, the guess still great. in – and granularity are

Ken, this Yeah is Chris.

we couple expecting are out a things. you certainly rates the that with the pull to start are little One, happening of a there. through So know published in line more

up back still commercial was question as way I we different on XX question no it’s know you you but will part-by-part low so – right XX’s, if just the – on there's Max we're you answer exactly going from commercial. the but know what sure know at going we’ll circle from also caught mean It's I a nice AXXX. uptick a structures – on look there more now, know on getting I there the your there story, the with its I'm work I it's rate. MAX, little parts. you the backlog mean You into on as well have right, to one backlog, not

throw let Yeah the Spirit to and look, going position directly about here we have with me good in really you one a it's only is you spots we're and time our with big feel relationship also so line starting real know after the Obviously a in know we spoiler better. think our long XXX Ken, know you just get against, revenue our our facility, we bright MAX driver. that is Boeing quite of [inaudible] which

that, we're XX at was be get down on least, Talk] So starting that's online months, and so… which going for to roughly to back [Cross

one looks as the both your to what's share commercial or you've OEMs view chain story share two the supply on off-loading if on do And really final next the as has and in market opportunities of over just seems been to question. we commercial sort be incremental taken secular years it side. a side. could, I support rate one about the the increases. think defense Steve How thanks. the Yeah, pretty I know to on I in nice know some stressed particular

now, not of tend be already shape for as Yeah, especially a to supplier as well mentioned, bright Airbus. about. Airbus feel XXX% are – talk you I think for the that’s, tend with way, us you know on part, choice really but operations. been years and Boeing so operation, some has and going but operation, struggling in the really the we're also internal We the Boeing a part others, I the we year one down over you their come to track real know that’s first I them we to we our the with of been volumes – for well our titanium spots or products, of know We sort the titanium there, and know for think for we've even Airbus think most very suppliers you good two, mean though high only bit. over level most captive believe from good also I as a mentioned two look, which even I onto really record, with – and that next like ramp-up you supplier our I

obviously everything the for you think the heading right for and some both, is rates in we know gain share up. direction going So

thank Well I’ll back much, very pass it Great. you then.

Okay, thanks Ken.

you. Thank

from comes Brian question with next Perri Our Reece Street. [ph]

is line Your open.

Good afternoon. how hi Hey! are Hi Chris, you Steve, guys?

Good Hey! Brian.

being to an really of top It’s most Newsweek's named wanted my list accomplishment. incredible I to congratulations on the offer First, workplaces. loved XXX

you. Thank

I take We’ll it. it. appreciate

sale And the above which after last think lease tax to you was million quarter, that in back $XX guiding I plus is came million plus, right? $XX proceeds are what

a of were because we in bid very competitive basically Yeah middle and the it was process.

of the it hit Steve sort market red how is. here of highlight industrial and out hot sort the know on You

just took range can once the hold, really for beyond that’s get we process So took it sure what that we to. competitive that thought

That’s related. somewhat earnings growth timing release, being a that industrial as bit? the call out terrific. Could little you it flush you In

backlog, Yeah, the I was things. a couple point. One think the is, industrial this starting

product right keeps the you some would seeing to that know take one the things to we the priority, get produce if to going and and sense, customer, it’s more facility build don't so increased it when you it company, that’s these industrial, to we and highlighted we long say right with are know a good. those high position makes is, items definitely dedicated it produce can one when as a time and in some an we lead have where we it's not there, in I do our has center the because put though place work that it's Brian the another that us we’ll be watch and there. industrial we'll and we in certainly you it demand work can within uptick so facilities out products a You performance to know

– good do that bit in business with it. a a we’ll can and do Yeah think industrial of Brian, really kind money, ahead know, just yours, opportunistic is general, if point This Steve. is little make there is I that's but you we really this it

from Nobles I color one some get last the one? on did guess more an discipline possible you could I price at I the the one purchase time, that on acquisition If EBITDA me. it be on back circle Terrific! MagSeal us just think give least headline. to on multiple Would

going you I’m – help I'll I Well, guess. directly help to

kept M&A under talked with has you go several, really and the the the If Steve went assets, you those to that we in and attractive would pandemic say, value to just through particularly know market, were and disappointed different it went higher. I the back XXx we last due all variables specifically

So still XXx, market say we will was in got frothy. it little we yeah. still that We gaining more to were the below disciplined, recognition a were not that,

of we you and here I that's right, know look, MagSeal. count you a in have can just I discipline still to will think think you try overall, for careful I and know think good but us investors our you be

congratulations and results see organic on the that. to in strong the terrific sequential backlog, Well, love really growth the again

more Thanks Take care Brian, to come.

have I RBC Capital follow-up with you. Ken a with Herbert Thank Markets.

open. is line Your

the you walk I Chris wondered just thanks. more hey through a of Yeah, if bit detail. could

this, obviously annual should the modeling moving impact of pieces result obviously forward. structure should about maybe well, know but here the the I tax structures, transaction, and you understand a think how cost through On expense. purposes, the, moving as the if sale associated will leaseback flow about of And this think how for lease we we the

the is, able so million $X being $X roughly, flip of The the or right, incremental you about $X Ken. good we've lease very roughly do with it sale taxes. We've to structure through sale million lease capital Yeah, done, million of will news $X and it the got talked and least has I’ll are the mean resources capital, structures. that and thanks done property for lot things. has we've the our call on that a side this what back our got so headroom count, done I Yeah, million for certainly to and to go of when capital you

they makes to $X about everything in of a So market that run rate we're a much million coming spending at pricing it to other and money everything that you win. on facility can make going an running know that we can you and to this as aggressive – you that things so business sense obviously offset do got that offset MagSeal where through to help big to look it the along annually, just being with and else,

in unique just Ken, Yeah we Gardena the facility our some things mentioned, industry. made you know pretty

good we we know as XX really over to feel next forward you move know you have, on to power move months going we're and the So have XX we we that pricing too.

our despite leaseback plan day end think for the of we homerun and term the sale the know at So that's for you we is still the shareholders. some a near and think headwind, us

Yes, thanks. Steve, one question. final And I just could if

for total commercial portfolio into level the focus and as your what and IP done set acquisitions Can more defense of customers? you’d ‘XX more that within real now MagSeal, to represents here on Now heading I and you had business aftermarket. aftermarket both you a us percentage know

we're know – that, do. as I more Ken, some I like you get I to is, I have you what going communication think this have usually to do are would to to year. on to want throughout going we back

Okay.

that’s no, Okay, Alright perfect. thanks Steve.

and sure Its I’m this. more it come a happy that. know, to priority and you with strategic tell we’ll you are as growing on so we Yeah it’s

Alright, perfect!

Thank And in callers at the this no there queue. you. time are other

Oswald the any turn remarks. closing I'll to So Mr. back call over for

Thanks very much.

and challenging thank, obviously two again thank it. very all once the our as thank etc. well world, thanks well. very investors. It’s we questions about nation, first the support. really Just as I everyone, the the We years all want and hope also we're where good appreciate for company. dialogue, to our feel with for We the appreciate my heading companies, been do a We you team

So you. Thank have a evening. nice

this Thank gentlemen, and concludes Ladies for conference you your today's participation. call.

now disconnect. may wonderful a day! Everyone have You