Ducommun (DCO) 16 Feb 232022 Q4 Earnings call transcript

Good day. And thank you for standing by. Welcome to the Fourth Quarter 2022 Ducommun Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions]

to Chief conference and Financial Wampler. like Vice to Treasurer, now and President Officer, will turn over the Ducommun’s Chris I and Controller go Please ahead.

With XXXX Thank and President quarter to and is Ducommun's you, conference Oswald, welcome CEO. call. me Chairman, today Steve fourth

discuss to follows. or remarks going projections Session statements that events, any the regarding prepared to I'm performance during that the forward-looking future or we certain limitations may make Q&A

expressed market Litigation any Certain prospective. results and implied statements. forward-looking statements statements not cause therefore, uncertainties are results and as projections by of conditions, today of and are factors, future financial These historical are results facts, subject actual operations to statements from risks, under to including or forward-looking statements the materially to such Reform that could are which XXXX differ forward-looking other Private Act Securities future the

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

In based business, on addition, change. to the results are operating is subject current which company's of future estimates

intend if are in any are of update SEC, made by otherwise. Statements risks of Particular subject operations geopolitical regulatory time this others risks. only described on annual among pandemics authorities. Ducommun to on required timing the spending, customers, of and developments, are call the from government the customers, regulatory These do statements of or risks, presentation, and and or of during and we U.S. the and level defense risks statements COVID-XX the with of our as our this acquisitions, except cost economic not made, the competition, markets, made orders facing XX-K forward-looking our end-use and disasters, and cyclicality our and include, impact to others, report legal Form natural in our expansion filed those

for SEC with XXXX Report today. the to refer Annual measures. this a non-GAAP to on GAAP our on the This measures our the includes Please with financial non-GAAP filed also referenced SEC reconciliation Form-XXK call filings of We call.

I would to over now results. review like to the Steve Steve? to Oswald the call operating turn

for Okay. everyone conference which financials I'll Thank situation of after and in the quarter us our Today call. give today you, And of usual, fourth the as an for review our joining Chris thanks update Chris. detail. current will company,

report $XXX.X XX% delivered I'm the company of Ducommun’s line quarter was growth year-over-year happy that fourth million. top to performance very strong. revenue to The

end are As shape, press chain markets mentioned in the only good operational managing strength, in but also very release, highlights and that our Ducommun’s supply shows not workforce. the

growth, the spot significant Turning once was recovery XX% business having continued QX. the is The up Airbus aerospace XXX and AXXX bright of real also to a Boeing commercial MAX year-over-year in again markets, XX% year-over-year. the up

XXXX Airbus, was budgets Gulfstream and recover. down quarter, performance prepare The rates but industry aerospace up with revenue aerospace as well and as business for solid again defense consecutive was once excellent only the million business we the from sixth delivered Boeing, growth and others commercial and revenue year-over-year company's DoD for years commercial the $XXX XXXX over FMS XX% unprecedented over growth now as The in build of Overall, two in slightly years QX sign in in ahead. increasing after QX, of an XXXX. show

of operating income XX.X%, of cover one-time margins posted The several profit down will The due team also which to posted gross partially year-over-year adjusted Chris his solid X.X%. remarks. company in factors

activities solid with anticipate XXXX in as to numbers closures well and the us. and of EBITDA once margins Adjusted and in much be $XX.X year this plant strong in behind was had EBITDA increased slightly of XX% year-over-year. restructuring EBITDA million Ducommun adjusted we XXXX QX are stronger

company the diluted EPS share share, with good But of comparable of EPS $X.XX $X.XX the was XXXX. share $X.XX was reaching earnings year. the diluted with versus for to adjustments, of a GAAP QX in of $X.XX prior a a diluted Quality EPS

for and the significant lower restructuring our the GAAP drivers industrial include lease benefit property. performance back diluted from year charges Some EPS prior the sale Gardena center’s the gain key of on

years like One our of past related significant as Airbus business within in commercial XXXX. business of I headwind would improvement Structural we segment to move during the our out highlight the aerospace pandemic the few System is

XX% was than structures XXXX. roughly in Commercial million $XXX aerospace higher revenue within or

In $XX addition, XX% were higher a commercial million or QX aerospace than ago. revenues year

will see in as business, through I also we the catalyst part an add this continuing includes of very As little XXXX. this in additional nice that business. very XXX see growth we which XXXX

QX Finally, the higher at or at QX XXXX. stood end XXXX than of XX% million the $XXX backlog

So, excellent we growth now in future. are and set the for up

industry form keep hot should based, intensive products is capital forming. niche well as such other large we Investors products as also wings in or structures only and our to produce business titanium mind technology component not strive super-plastic of and

all the company's of XXXX backlog And Viasat after part we the for a for QX entertainment, backlog $XXX QX of of consecutive business. That's increase and an XXXX. end at $XXX from and Ducommun’s out the XX%. the led the tough the MAX, increased the to XXXX Switching which XXXX sequentially end very commercial this of million inflight by of you performance, this would the was AXXX, to quarter came for XXX aerospace seventh Gulfstream, million AXXX expect at

exceeded We're of a Appleton, million. from roughly as well business such prime $XXX continues our in a meet card our year deal defense ended remained expecting did is and million in with Raytheon at solid great circuit well. Oklahoma. million backlog Defense – million of target that XXXX at up in Tulsa, it XXXX. as the $XX XXXX, Wisconsin; it sites and quarter work Offloading in $XX for and for big QX $XX roughly as and significantly

be offloading Long-term over run $XXX for million already rate of commercialized XXXX. will by development these for or defense Ducommun programs in

reasoning and actions Primes cost cost of As to production challenge the certain pay types keeping Company's too. structure in-house. lead organizational dividends continue to continue drive and of reduction

only the chain, be but our and with place well a supply this team regarding could and Our our in better not QX also excellent in our another not shows we customers delivered delivery odd quality. quarter in managing financials, time as

were percentage as also favorable X.X%, at a costs of X.X% QX. Corporate revenue, very in compared year, to last

I very mention successful X. our also Day want to on December Investor

is much thanks my meeting especially and and of the feedback. who disclosed very around First, than for the to through the results in ahead our that our now great now place. acquisitions The path game post-pandemic in certainly virtually. company is the we both for more strong all and investors person four participated And We appreciate XXXX. in the clear past, plan

start will In restructuring estate sales. in off with provide consolidations but and a other very XXXX to we're addition, along Chris good the planned activities, with preparing plant further for real details, the

guidance quarters the be but good by over the volume and with more being in the ahead programs, some the solid a The backlog. coming at company's industry continue to aerospace XXXX, though and to having commercial in a revenue see see as more few very revenue lead impacted digit on revenue we mid-single we still low- range. will way For solid recovery return will timing defense the

non-strategic revenue some we see closings volume also plant as in reduction will prune slide two low business. and The

higher We opportunities another possibly is past the and acquisition and believe catalyst as in continue this the as year well with drive to be ahead. opportunistic us in to active

balance XXXX, Now a being a color saw million let our XX% and on for and with and despite period of and quarter slight $XXX.X along our quarter me our down versus Ducommun’s we business earlier, and we showing QX. markets, Beginning like. revenue represented military solid XX% year. down commercial with which greater the continue fourth provide aerospace, reflect some increases to this decrease programs, posted with missile in in million, The trend programs. revenue Patriot $XXX products in F-XX. sector, We fourth additional from space last of demand space mentioned will for And was military [indiscernible] as the revenue than more

company's which large platforms, platforms. commercial mainly backlog. quarter quarter operations, XX% in-flight solid year-over-year of other and also total ended for fourth commercial increases products on our million, Within build We the revenue $XXX Viasat nearly driven aerospace million, $XX a of rates aerospace with represents to aircraft the by backlog increased fourth

to offerings. product continue Ducommun aerospace in the to improving our is commercial overall momentum XXXX gain and market expect across the bright future

higher quality at and also The ahead. out continues delivery to million $XXX increase of XXXX. million XX% from as the Our year-over-year stands end or we move and aerospace $XXX stand within with the commercial fourth quarter QX at backlog

in have that, issue With our Chris? detail. Chris financial I'll results

Thank you, Steve.

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

once increase another reflected The our revenue. saw As performance. quarter again aerospace significant results of Steve results fourth strong in discussed, quarter fourth commercial quarter

There which We taken should our and performance. the closed building strength XXXX themes multitudes on long-term in actions in continued going as restructured with combined domestic travel, help our higher forward we XXXX support remain we're and forward. program, being of were to to demand positive looking out by encouraged global shipments

which million of the and Now, Revenue increase commercial military offset fourth we is $XX.X fourth XXXX XXXX. turning The directly to our revenue the quarter year-over-year sector. aerospace of our December, of in platforms, $XXX.X increase million A $X.X versus lower year-over-year MagSeal, portion the to XXXX. by million partially million of growth of fourth the quarter space results. reflects within acquired quarter attributable for was across $XXX.X for

overall So was our a growth. growth and of organic inorganic combination

approximately backlog at across our reflects fourth of recent platforms. the commercial was the $XXX aerospace end quarter growth Ducommun’s This overall million.

performance begin the $XXX was solid with Our we business. defense for backlog we defense remained continued new as positioned million year and our

on the XX As gross and year posted backlog with or less. and of as orders delivery firm $XX.X profit for prior a agreements period. million the reminder, expected revenue dates prices fixed total based define We quarter of $XX.X in million purchase potential versus long-term we months customer

margins XX.X% in an adjusted XXXX in basis, were and XXXX While XXXX XX.X% XX% On margins gross and and respectively. gross respectively. XXXX XX% were and

MagSeal and restructure fire cost up had Throughout for inventory, items amortization, related we've costs, of sales as such step XXXX, Guaymas adjustments related expenses.

adjustments and we we types As XXXX by XXXX, these of head down finish wind mid-year. into to expect

of to margins ran they XXXX. plus gross in historical are perspective While a lag DCO, for XX% from XX% at to levels the good we continue

chain around have globally some availability challenges all and nearly companies. manufacturing on of labor The impact recognized had supply level

significant flow centers inventory profitability. without proactive continue the seen as have various have supply more through investments. through, chain challenge buys, leveraging manage chain Steve flexibility mix and and to we But certain a products to program strategic performance performance center supply on to mentioned, due efforts, our continue impacts executing we However, utilizing of

Two California Arkansas of Berryville, Monrovia, and which operations. are

have which Investor XXXX. the first the XXXX, allow unable will during perform Guaymas, from Mexico. facilities profitability December, us from our facility cost mentioned these performance of utilize dialogue in centers, we redeploy As half these consolidations to low and during been Day production levels manufacturing repositioning anticipate The to expected our in better at production

fixed discretionary In we addition aggressively costs, to with all to expansion. spending the driving continue manage out margin our purpose these of taking

income prior share $XXX.X or $XX.X a revenue million X.X% operating of revenue operating the per diluted million $XX.X or for ago. or income per compared revenue comparable or the net of XXXX diluted of X.X% $X.XX of reported company was period. prior quarter revenue quarter period last compared year reported X.X% fourth the or million X.X% Ducommun net this year. income share year quarter of Adjusted $X.X income of $XX.X of The million million the of for to fourth to to million or $X.X in $X.XX in compared

quarter On or income $XX.X EBITDA comparable for or compared or of million in company million diluted XXXX. period to million to for income XX.X% $XX.X reported XXXX. revenue or of $XX.X $X.XX share XX% the adjusted $X.XX was basis, Adjusted per $XX.X in of fourth compared revenue of an net the the net million

let me segment to results. turn Now the

in posted offset lower of company's segment of Systems within fourth aerospace $XX.X million by and The quarter markets. million Structural space $XX.X the applications, million across sales of higher versus year. XXXX Our million the $X partially reflects revenue military last $XX.X year-over-year increase revenue commercial of our

higher quarter the last X.X% The of partially for $X.X restructuring of was Structural due by charges, revenue compared or to unfavorable product revenue X.X% Systems income to volume. primarily or offset $X.X margin operating favorable million million and was operating mix manufacturing decrease year-over-year year.

margin both in XXXX. segment was Excluding restructured the operating in adjustments XX.X% other XX.X% versus and charges in XXXX years,

solid a Systems segment. Structural operating from is the This performance

QX As our XXXX, a results acquired part the structures which reminder, in of business, of MagSeal the was business. are

posted Systems Electronic versus of year segment revenue the $XXX million fourth $XXX of Our in million period. the XXXX in prior quarter

across the offset income partially quarter $XX was million of lower These Electronic revenue, military and aerospace million operating the higher customers. company's commercial results Systems by reflect of revenue $X.X fourth for space million versus the XX.X% restructuring volume. or favorable of period, by or XX.X% partially reflecting prior primarily charges million product manufacturing of year revenue mix higher unfavorable revenue and offset in $XX.X $XX

charges and XXXX both segment was versus other years, in XXXX. Excluding operating restructured XX.X% the margin in XX.X% adjustments in

Now has the for segment. quarter segment range, operated, this a at of solid this the top end the was electronic

As the reminder restructure initiative our at short in are the discussed the commenced our actions accelerate identified Day, back being company a and to The Investor long-term. stronger for XXXX. restructure and recent better taken strategic goals and we performance in position QX achievement of to

and During in restructuring we were incurred XXXX, QX of charges related. charges. million majority these severance $X.X The benefit

remaining long-lived expected mentioned assets $XX charges expense We to million restructure XXXX. in facility portion million the of severance, restructure of of of and repositioning related Most consolidations, that expect our to earlier. $XX the initiative I impairment during a incur for an to additional

of moved remainder down majority our building existing complete with million. centers generate low-cost being expected land when $XX million production our progressing at in Monrovia the and restructure, in production our Berryville, Once with both we going These are and to performance to as anticipate and States. going Mexico $XX to is Guaymas, anticipate other The we the locations. at will wind of selling the operation United we we efforts savings associated the annualized initiatives

available liquidity the fourth the million We end $XXX have of quarter. of as of

from exception. flow is we generation in million. of in of Cash typically are quarter with strongest a And fourth perspective no flow XXXX pleased of $XX.X The cash this operations of each generation operations million with quarter. flow from XXXX the was cash year $XX.X our QX from

on rate rate and XXXX lower which ratio lowest We the the in last the in debt-to-adjusted tax at a of at sale, as months back XX.X% versus transactions. XX in XXXX. this rate of finished of year gain is year effective least excluding rate full majority XXXX effective transaction, related taxed with excess XX.X% EBITDA X.X tax a our to was our Our The several was the was amongst in years. such

full for versus XXXX. XXXX million year was million in $XX.X Interest the $XX.X

environment timely XXXX drove year-over-year. debt refinancing increase our rising and was While the the during beneficial, rate interest

Assuming on anticipate when significant it becomes no pivot to XXXX, in our in interest during be rate interest hedge XXXX. And offset XXXX, January we approximately expense effective rates provide expect beneficial interest longer-term. X, we $XX million the will

foundation change to from me, consecutive is comment we’ve third during an XXXX focus significant as have move we additional building forward assess beyond. other we stakeholders. our the the market year and on strong to customers attempted for deliver all with one of Just the we and to environment and XXXX And daily and look we as continually priorities adjust macro time economical through on our and established execution

over back it Steve? turn remarks. now for I’ll to Steve closing

our XXXX. best Well, was was XXXX the And quarter. in it you’re line you. top strong Chris, thank Okay. certainly pleased. I year hope a since

good feel it. we about So

investor in earlier, now December. the is clear our path of meeting mentioned out coming As

off provide a do think good all forward. the and in I we’re shareholders got going lot to of it’s I lot start a a company to value very and to We’ve to think going XXXX. to

Ducommun addition, In read capture to positive to the over the the our opportunities all several ahead. for industry thanks, available. employees year we lots I we years. when been include again, and know And meetings I’ve always things attending support, good upside and very team news My next ready having investors be great shows, all as think and a the as as of ahead and there’s I’ve will

for now questions. it you So for up listening. open again, thank I’ll

Herbert line Markets. first Capital Ken of Our RBC from Instructions] from the question [Operator comes

open. Your line is

and Hey, Steve good morning Chris.

us. Thanks morning. for good Ken, joining

break rates. to the and Yes. Hey backlog assumptions commercial mid-single to first the what low then And see that based like a And wondered, can What on continue assumption defense? are aero Steve, talk in market? out your growth obviously nice for if maybe for is line growth build just to It your growth should in a by bit I some about little for XXXX. market. part wanted top looks expectations you

it’s going commercial Well, to grow aero, Ken. really in

as in bit we’re we’re to of we’re we’re we’re a capped, growth certainly aero this wouldn’t little the we I Boeing, We’re we’ve we’re about production. Airbus say but of sort see them commercial going So level to to year. absolutely – – But get cheering for to are next a and – go, ready little Spirit with talked – bit and right?

So say. that’s I’d the thing first

The think I’ve second now, to in we encouraged in year. to year order we based. think basically program little mean, right this right – more year. others and going around with of the F-XX, our But there things, defense we’re thing that flat a of couple this better be a we’re programs backlog Apache a timing XXXX that is a probably we couple timing are and a just remarks few have bring situation through with with mentioned we a either order is to of I going defense. But have and bit

be we’re to going $XXX million, pretty going be but pretty – to I’d above flash. We’re say

an XXXX? looks And the That’s $XX in flattish that Okay. from $XX million reflect offloading defense, million well helpful. so, does to $XX you’ve or – call XXXX for million it incremental, like relative it to got benefits as

came because these also from pretty some the on are again, with of But good the get the It’s tailwind going – – – be offload, say $XX It’s these in to of shape. helping offloads million, number come million be timing but programs. in $XX probably going maybe we there, Yes. to came to want don’t down won’t that we it I we’re to high. going write

going help to it’s definitely So us.

to we’re as into as moving hold, for have the Patriot understand have getting serve as or other over when far And to things, cards going these because long XXXX they say. certainly I mean, for We’re you a tail going to Tulsa. everything

some are mentioned questioning But programs Primes we and their in Raytheon. are eager these progress mentioned challenging certainly continue I’ve earlier, for and As in-house of and cost reduction they’re I my remarks to make that operations.

that’s helping So us.

could just appreciate And if I that. yes, I just one –

in of but couple positively inflection Just one on a Do There’s up consistent defense Or Because of your reflected of we funding Steve, out when sort part the on a just about are do obviously then spend. you XXXX? to international about. in programs, called year. start latter the fiscal mean, this up sort other help longer-term? material maybe you’ve catch I’m flattish defense around sales, into on some higher in how with I the XXXX. lot XXXX, what the – results. do XX% of seeing But budgets outlook. final the can get because see you think of talked we’re uncertainty question view appreciate timing a companies fiscal have your see in I a or we curious, But it’s better those

Ken. Yes. We XXXX, feel better much about

Okay. disclose we’re defense systems had I you which probably we had number, business over quarter XX% – our seeing, great that we I’ll mean, versus least electronic QX. that order sequentially, was what give a a at maybe Certainly with XX%, don’t just in QX,

to XXXX, on in. forward XXXX? deliveries. there’s I being We are mean, to able again. orders as move So timing as about far coming XXXX be it feel good Is obviously, going

– delivery last to is comment everything too, years. shipment just we’ve as come as think to as Ken, order pushing you’ve I And out these is slightly through turning from other couple you one Yes. seen

sort to months at – next So pick we’ve and start hold, got it we’re saying then that’s whole looking see of why and serve this up.

or deliver, for other that out there’s suppliers it little Other other issues, little some bit late. challenge struggling And right? hiring are us these to see either or we’re suppliers happening pretty bit mean, of at Primes a issues certainly of other other as a might have because rolls programs Yes. but are these challenges you it’s I with for that where things ready Primes of of much there’s the some there’s Ken,

year. a So that we’re this bit of too feeling little

much a next for activity better year. hoping We’re

Thanks, Great. All Steve. right. Thanks, Chris.

Always question. appreciate it. Thanks Yes. for the

moment for question. our One next

will Riley. the Crawford from Our of line next B. from come question Mike

Your line is open.

you. Thank

opportunity chain cash? in would think so, how there I agree to constraints into some take you much supply of that easing? are that And back to working bring capital is an if

Mike, question. good

that I reasons in it commercial middle a on of help. and we is the we’ve think that of of have able aero come sheets it’s have bit that been of don’t, the suppliers kind the because to think titanium and winning some things easing, maybe I little is one we’re where we sort more down other

the better a half say So getting we certainly our see in easing of I year that place up. would turns second and that we’re in interested

or just are then specific aiming that via of there you detail to And really into that to want any programs you’re level from call? this gain Okay. be get other on don’t business to offloading Primes,

to good square plant, all people cards and/or is I I probably customers. a now XX,XXX expecting the area, customer in which you things. over onto just don’t. I note want saying, here – to about foot Tulsa the and $XXX especially want as because being and tell just the and Appleton next and now, sensitive all really phase it hey, is well card we mean, do we’re I mean, we be to out million coming that that, you put that’s I as, will the But that’s is which

operation, mentioned to again, something equipment, one I time and major should. mentioned things I just And it’s take these of because I things. those talked little types bit test I out about taking a that, program of a – – need is they mean earlier

in So more XXXX we’re bullish period. the why that’s

seeing you of And more any where the you. last protected… or for what opportunities you’re question Okay. Suman, might Thank looking these niche more be if front but suppliers M&A on changes for are then

put well. my why Yes. kind as that’s in remarks I No, appreciate the question. of And

accelerate operations nice with I done hopefully rightly with I look, them. job all say of us. so of we – same these past. December. does because will we’ve just of lots model and kind least all next our kind things we're think, And year you've Mike, now, in forthcoming margins, were the us two heading acquisitions mentioned, does in we’re at more works that as of And for of profile active, was It were the and everybody at where – that's a the at – our for or I those we really seen four our Day So right pleased Investor for

Thank you. great. Okay,

Thanks for your time.

Thanks Mike.

Instructions] Our comes question [Operator Truist. Pete next of from line from Osterland

Your line is open.

Chris, Hi, Steve our questions today. taking for and thanks

things first this we've the few heard particularly So year, a across different supply chain for about rates expected build XXX MAX. the

wanted reflected rate planning would just are something actively were that's guidance you to you what upside it MAX in if year? rate or know and the increases materialize? your on producing represent production to that sales Is currently So that build at are for this

Yes.

do down we've whole taking to that. fully So we not baked for and in, that's this this we're a [indiscernible] – year, industry, you we're road at lot, certainly I'll have going month up that look So We the least go hope been right? tell okay. that

for some would the chain. is tell us. Tier spirit they're be I X of ahead that will obviously So, bright because spot upside the you a

hire mechanics enough get our because work over people other wrap So far deliveries, to not again, to and as able we're we're Boeing make to we're sure trying we're of about more our year supplier spirit that time. want that to we've been they just we to modest concerned done. because going bill – say is about feel or concerned rates this And out too up ahead we're with the from them skews

if – going things say things the would to to going way year. right I if So break better we're have – go a we're

well, just help just wondering a on up could year. so us the for was calibrate guidance give didn't know That's very upcoming specific you as then follow helpful, thanks. you And margins I if on this,

the thinking So Do headwind this restructuring be just just a cost or on expect see you that your as general, could be just inflation. thinking year? any this to of how seeing start to about you in and year color that? up give should you grow And margins sales you versus are benefits about pricing we

Yes. No, thanks Pete.

there's and signal look at point of you I dialogue we of investor some a this yes, say in I year then we're don't at are think last going year day. going So would as pressures the sort off to We headwind. same type it's year still year, where to we're we way of we be through again, of it. of find sort do especially just restructuring through first hopefully to And were with then and think improvements as half we we is, We mean, continue work as our think will the some where transition jump year so we the you benefits – yes, the the this half the up. we the incremental there, to on our view margins. those go and in back finish see of

growth significant lift we But too When to in forecast business. we'll always the just heard be element another the base growth of it's cost to you've we what that. we the start repositioning driven have, hits year, the do not structure is part about on what a can more as get do business, the sort that's more – the with to a where be the not it's that's big it. can and of going with it's And to going

Yes.

jump just me in Let here.

perspective. But I margin factories in going we really Call, this lightly don't will here. us we're to didn't take I plan in the tell XXXX, So as okay, help the close you from look, consolidation that Investor mentioned two

I'll there. Okay, it leave

delivered into point Pete. story, we once in I but is all the those second interpret to, centers going margin nicely consolidate the very we that can midterm that low take the for cost You expense think that's our out,

you. Thank Very right. helpful. All

for Thanks it. calling in. Appreciate

question. Herbert moment our Capital the One next And come of moment Ken Markets. One question. from question for for line our RBC will next from next

is Your open. line

you've on Hey, How – much Berryville of is a that restructuring. at much and Steve, have safety built how I'm how headwind capital to is inventory of to much your anticipation – left the do sure working I on there? And this the move? already of the on comments up the transitioned much then in and work just you of and follow wanted provisions how last and stock the Monrovia year,

Yes.

that. of handle the part I'll of second couple things, A let Okay. as Chris

Let still And expect the first you that the best best in part. I'm facilities. can those had the teams you think working me just – teams, announcements handle for the hard excellent okay. most we Look, part happy to I we've say can the to have or

for the We going in really either pruning I as that long earlier, customers, are just term. with mentioned actively – far things as some shareholders us aren't for and engaging said good

we're actively So to thing be and this for the building putting to customer commons. doing forward, go to have – we with that. innocuous also effective of and buffer we're place in And sort experience as plans

much going are we and things on going quarter we first much accelerating. group, with pretty we're active, be and through moving tight the then the to moving probably we're to So going pretty start out

So another think have mentioned in to place. things we earlier, and and team but the effective very the in feel call, the move and for to all down these work investor practice on was are do and the happy be we I well start keeping we're always I And it have the the plans in right Guaymas as there as things – the we good as people mentioned we Again, you we we to need how to now. a started have off. I'm for tricky off building

floor in and Mexico. space take very good majority workforce it. to majority with of the we're but everything, So Not shape of work the this in a a

it the and of but the to little the Steve Yes. year. down bit bit I of we working modest an be there's but of of happening, investment, I like, view And Transitions of the little first investment of half could stock. sort here full just the half you the the it's year of investment mentioned mean, first would sort are element of year. the the or half get look year, Ken, that first by there being of here what do in would the so view end that a safety on a time nominal year the inventory say

today on us family and some announced with right supply take how aircraft, portfolio bit. XXX opportunities Airbus wide on business planned accelerated with where moves to as you maybe the and chain other will body aggressive could out the if much with you and Airbus, one level AXXX issues quick aerospace increases aggressive or And are you of rate Can the disruption the either set your the their Helpful. Okay. wide on maybe follow XXX? and body the rate to share their pushed on a production in percent a up. their I participate

briefly, it, read only Yes. Ken, that of the briefly just didn't I saw I things. I note. I some did see

years at the optimistic couple in first highlight the a we're so So shape just of were it about we ago. not that all, fairly good on AXXX,

on I time exactly in see that get to the we that's be that to to moving the direction, on. going actively. actually the these what were in So the a us in right we're percentage players which AXXX we're won't something things you position that to take AXXX. something We're get benefit is, trying as engaged of know, but is that's middle and into the – going

We to more come there. see like those increases. So to

I AXXX think said the about dramatic. I the year-over-year pretty Airbus that was number and

continue. We that's to think going that,

but maybe Investor feed though much, to three time in As careful. and little, Day produce. or we there. Airbus Airbus lot parts two pretty be misses slightly be we're or I you been always a they back in the one, have need XXX% pretty the years And a have now, off we're of for on they even over to might my mouths one much bit with here little With a December, mentioned to

what amount business, hopeful in the we're grow. to to – to really of And is gain, the, but hard, fully feel if it disclosure what we going on with we're we're share good and ready that's the continues not these running on feel shape want. So Airbus, go great they're if we

Thanks Okay. Steve.

Ken. Thanks

in not Thank queue showing you. And this time. I'm further any questions the as at

back for Steve closure So remarks. pass to it Oswald any

felt thank everyone okay, us. a well hopefully for what joining And Q&A good you. you was thank helpful. as very was the I it again Okay, you script, thought as

and investors a analyst we we're hopefully than to revenue want at company. be better but always on and calls a things thoughtful these have guidance, to do our we We our going help little help if partners. going to, going can go and way think transparent on bit we as I our try lot the be to We're as

very which future. good. next So – these reason. acquisitions factories we're part things. our a for level, in from especially Atlantis good excited to with closing going active of good we the feel to about our We're other benefit – a and big is And XXXX. to operation we're but feeling and We're area about It's all the the margin mid- long-term going

So support for thank and listening. again your again we appreciate you

call. today's Thank participating. concludes conference This for you

You have may great day. now disconnect. a Everyone