Kaman (KAMN) 12 May 202020 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. And welcome to the Kaman Corporation’s First Quarter 2020 Earnings Conference Call. At this time all participants lines are in a listen-only mode. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions]

to conference like today, your now Mr. would hand to the speaker I Coogan. Jamie sir. Please go ahead,

Good to today I’d and Financial earnings Chairman, morning. Officer. like and Rob call. quarter Kaman’s President, President Conducting XXXX Starr, first Executive the and Executive call Chief are Vice Keating, welcome Neal Officer; everyone Chief to

the described items, economy statements Before projections information and statements call to today’s the other the The X-K of of the performance XXXX Form included company statements latest forward-looking filings of discussed XX-Q revenue, future differ setting with I’d to management, our future from on underlying will to expectations events. that those future of note the regarding like the release. These quarter earnings company’s statements together begin, business, important include during we our in on Form its report most many of earnings Securities the some including the current the forth materially of and plans and due our actual assumptions with with consist could forward-looking other statements its current and of are company’s and yesterday any in on objectives and indicated factors, respect economic company first evening filed results company’s or Commission, these financial business. which Exchange and

filed included X-K. the information the measures measures are with release rules GAAP defined financial We measures to regulations. applicable and that and company’s certain also yesterday’s in to discuss expect are earnings SEC in non-GAAP Reconciliations as

makeup that additional for our result this and an sales a the our performance, context earnings we've is additional the call designed steps and of events website we reference outbreak. will in provide as posted call period, on key the Finally, taken on of financial information to COVID-XX the supplement to we our

www.kaman.com/investors/presentations. You this at presentation find can

the Keating. turn over to call Neal that, With I'll

morning, last and lot joining our Good our quarter call. everyone Jamie. XXXX thank for call. first Thank you, since A earnings changed you has

will quarter, before providing operations with as on start short steps has So the summary mitigate had my effect. a our company its I a remarks taking are to an we on COVID-XX impact and update of the the

very had across sales $XXX.X major from million XX.X% strong our results to quarter, first We all due continuing increased of growth net organic for increasing the with XX.X% product to operations offerings. sales

Bal contributed our Seal acquired line year in we with $XX.X Additionally, sales, the expectations. which beginning at in the of million

of quarter Even Black for was from growth Hawk from products the with the significant backlog nice a million end in and the Helicopters. we Bearing as our of relatively and flat $XXX in with Bal activity the end year Rescue order backlog at sales, saw Combat Seal Sikorsky's added

earnings from restructuring of result operations per adjusted of number significant corporate million the in period million per purchase accounting of $X.XX. diluted $X.XX activities prior The diluted compared share was Seal the discrete loss loss from including to of $X.XX. items, $X.XX Diluted costs, $X.X Bal $X.X by acquisition million per a of approximately in non-recurring share was continuing to share severance earnings of and Bal associated $X.X from per costs with prior when million more costs and continuing than our for $X.X year expense, Seal, operations development doubled share adjusted, driven

despite as faced ability to to the strong execute generate the Our Kaman they challenges the of first quarter progressed. of new team to results quarter performance our speaks the the operating ability and

near-term defence, and positioning engineered addition of our commercial, navigate challenges With solutions to of portfolio allowing us term markets, serving end strengthened proprietary us the for-long industrial we've medical growth Seal, the Bal ahead. highly and

we experienced substantially the affected remarks, way of conduct in our employees, and has COVID-XX backdrop opening since global spoke communities. loss and changed customers my our suppliers have effects tragic this and the the our across in of we customers, the difficult safety on society in support employee’s, February. business. focus grief and time mentioned our global I We As The and during is primary share

office are strategies production. essential These deemed to and and personal of a protective have contact employees. production limiting all transitioning and to work at work temperature and for Substantially equipment, more screenings from enhanced implementing continuous and comprehensive segregating sanitizing at within safe adopted instituting all our we ensure home our effective facility to enable actions interactions while distancing, groups social practices the appropriate strategy facilities, locations, of use tracing, facilities cleaning our include manufacturing

a production levels. for Despite to to we benefits from the we this, as the taken challenges. the our We the from cross-training to they seeing inefficiency COVID-XX address work and respond our have impact have these employees our expect we families to of some result minimize as their of level of needs steps as are navigate experienced continue and to employees staffing efforts lower through and

our senior have their number potential on to production and our our including a cash retainer salaries temporarily taking reducing team our impact changing management of mitigate requirements, the to steps We levels quarterly of Board spend, payments. reducing financial across business, demand our meet are reduced discretionary also Directors

recognizing and impact Additionally, management increased the the including our our customers, to operations, to the on safety COVID-XX on suppliers our our meets updates and situation providing our frequent and health of status of the the employees, of we at response. the senior at we Directors changes, are team cadence Board which of communities, which speed have review our

of guidance. volatility aerospace, we primarily full the to commercial Due have across to decision market conditions, the year made our current withdraw

performance quarter products markets. end our of However, and we believe diversify benefits first our to highlights the efforts our

with our expected of for remainder and Our opportunities emerging over programs growth sales the are of additional to XX% year. approximately remain the contribute Defense strong

sales risk end market, aftermarket. Commercial aerospace is presents OEM XX% XX% our our and approximately at of approximately In performance. this sales to biggest split the XX%

adjusting are production expected decline to aircraft in commercial manufacturing our We plans the meet new rates.

customer on more our is aftermarket range the we anticipate to and applications. predict. strength particularly which difficult of to have medical weakness, of and markets XX% industrial remaining end focused to business is impact pockets given of However, primarily The our the the sales

downturn and in While to quickly these expect less depth them aerospace. a we to duration markets is than be more recover predict, commercial the to difficult impacted and end of

For of medical near-term headwind offerings. for elective a is example, procedures our the deferral device

as at hospitals a However, in the demand pressures ease, we products. expect these quicker for recovery

these at note single beginning products, the very contribution volume Looking and the was digit first with and a Bearings products quarter impact that of by product our Engineered of downturn high, with for growth. we strong organic Specialty our

seeing and a Strike including new of the we orders During and won number the we applications, a new platforms, number increased Virginia and Fighter, F-XX Class also are on submarine, content the including defense of aircraft. Apache quarter, helicopter Typhoon Joint

our the and from aerospace supply lower accept the look forward, ability expected partially the customers the the of strength should to we disruption our commercial assuming volume. of pressure As business to offset our product, chain minimal defense

Turning over fuses XX,XXX to of backlog shipped and full for we remained year. our Demand expect for JPF we the has total million. during program, deliver JPF quarter XX,XXX the first the quarter to the XX,XXX $XXX to and with fuses to continue closed robust

related experience Looking forward, disruptions. production may some our challenges COVID from modest fuse

our facilities However, currently meaningful impact to or delivery not schedules. we do a to fuse our anticipate

fleet. to XXXX K-MAX customers K-MAX we deliver add four to continue of their inroads expected a the number make to and capabilities with in new we to looking Previously, of

XXXX to economic remain aircraft the to expectations While conditions. are our optimistic, we we deliveries two due for reducing current

the marks The quarter work expectations first results on we Seal quarter the in Bal and the line first first quarter our our in diligently business with and first integration report were our efforts. for with

exceed cost restructuring workforce On these results, we've which announced at taken the will to a the synergies To the approximately reduction, the is in allow XXX,XXX expected we we associated approximately with transaction. expected to cost savings. costs yield in $X.X side, annualized actions million time us incurred we that achieve

a continue sales efforts drive More and continued team work time. growth. of importantly, members their through globe I'm teams for the identified our of and opportunities execution number this collaboratively thankful to Kaman and to challenging future the meaningful proud around have

we will balance fortunate we sheet and detail face a have ahead. we As lie our Rob strong supported in that ample be to may to are challenges financials, liquidity believe by

continue the time. work our we to unprecedented which innovation, core will ways new is this find continued and through customers support Through to to to safely Kaman team,

a will call to at I the turn over for look the closer numbers. Rod Now, Rob?

for Thank XX.X% contribution the to quarter you, operations Neal. to acquisition million Seal. continuing million, everyone. $XXX.X $XX.X of organic the and compared And a the increase an Bal sales sales Net our first from resulting from of resulting good of morning, from increase in when increased XX.X% prior of sales year,

item, gross basis resulting have period. Seal for from prior for Gross This quarter period margin points. Bal the the with XX.X% the approximately up inventory for XX included relatively flat increased Adjusting this acquisition. step by was costs year $X.X million of would margin the

at performance the This part portfolio by addition by the JPF driven Bal sales product offset in structures was of from Seal the higher margin the our quarter, in and mix sales margin lower volumes programs. of of higher

for expense. The cost as reduce million from $X.X includes asset in from XX.X% and prior sales acquisition, the non-recurring and our of the Seal with $X.X the associated SG&A million Seal XX.X% general associated of non-recurring in in increased Bal $X.X SG&A costs million intangible efforts to increase the due with to acquisition primarily expenses, the quarter additional administrative of Bal percentage amortization in $X.X third-party was million a year. which in SG&A to of inclusion

This Absent to XX.X% sales improved which year million in took over of quarter reduction period. quarter efficiency G&A the driving of during point in annualized XXX and adjusted is in largely our $X savings of efforts the step improved and a The due will across another basis these was continued actions as costs, performance performance the our additional SG&A from is the organic percentage prior first we XXXX. organization. generate decrease

savings we is actions, and initiatives million $X continue of year. annualized remainder the these these through With total prioritize the to will

and XXXX research are increase to in over development expenditures Internal XXXX. expected

During $X.X the the quarter, incurred to million we period. in these year support compared to programs, prior million $X.X

includes accounting to and we prior million cost of associated Bal million in recorded costs program. Seal This in acquisition, related of million increase associated was year. the million development the of by an an Bal retention which of operating in TSA, loss operating restructuring costs, the basis, acquired the acquisition the Seal, consolidated employee the $X.X a quarter to driven expense corporate $X.X with purchase result the higher the On quarter $X.X costs with to cost income first compared related in the for $XX.X in

quarter Adjusting $XX.X for sales million the margin in these the the XXXX. from million or operations XX% $XX.X in year period. items, of continuing $XX.X operating to income in first first compared million million prior sales to of XX.X% from or $XX.X quarter increased was Adjusted approximately EBITDA XX.X% of

loss diluted of is we $X.XX, year due recorded the from share period a had the in income This prior period. per lower $X.XX. operating share GAAP During continuing earnings we decrease the to over period, diluted the a per $X.XX operations of

share per earnings earned of first quarter diluted in $X.XX from increased Adjusted we the $X.XX the XXXX. $X.XX

our XXXX to to transaction. retention You Seal the months will part also temporary a close This note paid income the for XX the scheduled add that retention Seal item for purchase statement related we of program. paid to is for the that be price is after out plan of $XXX is an line employee will million Bal employee and Bal

$XX item As a portion as this our Seal. as component purchase total The required price will an reduction in plan, Bal expense. be purchase price retention the of in is is related recorded to this expense for be a approximately the XXXX to and treated result the million of of

in Bal second the the million Additionally, inventory end $X.X by be we will to for up the expect now quarter are non-recurring the Seal Seal and step costs $XX.X purchase to be million total XXXX. to related costs Bal total, In fully accounting of expensed expected these XXXX.

to reminder tax, and have to distribution terms certain IT period. we services, sale, the the human provide As treasury, as during such of pursuant transition resources a agreed the

costs the a the transitioned, and already complete IT continue transition income While report quarterly will most activities have been expect during to we of XXXX and to services we basis. on both these

income income with We incurred XXXX. income the the in earned is services, TSA the in operating our from costs below These costs these fiscal $X.X partially associated ended which on in April offset of are month period million provision by million Xrd statement. three $X

prepare in as usage increase flow quarter lower working driven over pension receivables in the in increased and cash related we such million Free XXXX contribution of to collections quarter, as employee an due a the in the by $XX deliveries was made cash capital February. for payments course

moment a a as result in to touch had sheet to and the existing wanted million markets cash until end we the capacity position. revolving Given our million quarter, we on of of the balance and on the credit our COVIDXX, first XXXX. liquidity on uncertainty take balance no our we our of debt under unrestricted significant maturities facility held sheet have $XXX and At $XXX

the of these progress us financial through give related ongoing metrics All challenges as we to considerable COVID-XX. possibility

we reduced discretionary expenditures and the In have addition, organization. capital across spending

we as on our mentioned, built execute Neal growth vein, in and to this will including investments, However, on Kaman growth innovation was R&D and continue capital expenditures. projects

midpoint to to our Moving remainder serve, guidance, for of guidance. the and metrics to uncertainties, for year. provide the Please our demand our for of previous full help withdraw business sales we XXXX, outlook the we primarily conditions aerospace wanted relation referenced some to year commercial we In to data the the have note given XXXX. percentages in outlook elected points of full are frame in lieu markets year

business, Defense these our devices unchanged opportunities remains accounts our largely sales outlook. increased our arm and for for for relative with including expectation to prior XX% of Our approximately safe programs and performance

to our prior shipments of majority a these XX,XXX to deliveries also we year from in the expect DCS current our forecast. JPF, XX,XXX customers, with unchanged of fuses to continue

approximately declines of provide our Commercial approximately business XXXX. lower this not our our drive In aftermarket recently reflecting in Aerospace OEM have volume rate Aerospace enough will the Commercial sales OEM Our a for we of business, in other and space by to Airbus In is production forecast. to currently XX-XX. revenue visibility and aftermarket Boeing, anticipated reliable OEMs mix do XX% business, announced accounted total, Commercial

With inefficiencies unfavorable related we XXXX volume, and levels. adjusted impacted in we social date, negatively reduced lower mix the to expect to information have be EBITDA staffing margins overall distancing to and by

we've the adjusted product our mitigate to to the customer impact, margin date up headwinds, meeting diversity implemented EBITDA portfolio, well team hold of to the efforts should of the our requirements. due financial these actions Despite operations and reasonably cost while our

through begin Finally, we focused capital as the on balance improvement and to ahead, cash cash sheet in maintaining over year. as balance flow remain year, strong the expected remainder year. to And we the the through half working move convert is build of show to we will the ample our liquidity we the look first free as of our

to wanted assumes provided our well turn call the to as back and that willingness ability we our supply to framework facilities production the I as the chain, I note customers product. Before and just Neal, minimal disruption of to accept

that, the to will call turn With over I Neal. back

closing, their In their I thank to and employees to Rob. this well-being. our Thanks, safety and our reemphasize commitment during want dedication for time difficult

we services. customers of our We that critical the committed on thus far rely to are we've are that and and parts achieved delivering for results our proud

the positioned deliver Jamie? new long-term. the Kaman's business as in and past in significantly focused through portfolio more and XX growth evolved period better result has the a months to and consistent time is Kaman this navigate

Operator, may we have the first question please?

first Capital comes of KeyBanc Markets. from the Our Instructions] [Operator Steve Barger you. line with Thank question

is open. now line Your

guys. morning, Good Hey.

Morning, Steve.

Good morning, Steve.

you to commercial when can just just up help thinking aftermarket, OE down little broad you aftermarket XX%, a reliable Are can't expect, broadly magnitude could the you you bit. a that of you any but be for the hear us model XX%, say numbers? to what I just offer Rob, talk frame or you forecast

you're is our if But that XX% is conditions. if XX% of were an that's clearly just declines, around you And visibility you given put unreasonable. at market constrained, handle that. it, broad appreciate I think to looking kind Steve, No. Yeah. area a to where not know, I

market as going conditions You airframes. to softer, progresses, just get based the aftermarket on year know, commercial the is aware the certainly are we upon that

the I but of Yeah. XQ about to of million was the much cadence write you to Bal think the related there said costs numbers non-recurring will trying be down, I that year? And $XX what rest is and of was for the How Seal.

to quarter, was it'll would be year about the quarter that first of second amount $X.X it I balance the a to mean, for about as Steve. agreement. similar the accounting million. retention Then in expect quarter $X a $X.X Yeah, the the for relating sure. relates million, I purchase million the

off inventory - the quarter. is second So the up rolls which after first the step X.X that

it. Got

so dollar cost in we And recurring that thinking how you've taken? s on all XQ, guess, I should actions SG&A about a be given the basis

Yeah.

So you know, if you take at first a our look quarter.

in were base If you of base business, XXs, running the kind low of adjust our terms of look of the of you dollars you for know, at the in if we - some kind in business. terms items, the for around

Bal first where, plug know, kind can the where Seal out rest you and the you came of So roughly for in quarter… figure

Right.

You of a Steve, as initiatives to balance manage very the our you number that's run think go bad necessarily year. do of the with. But a can we have don't to to know, rate imagine, I cost

Okay. positive One negative Free million that, quarter $XX too more flow this and the full I for of know free a you cash parts headwind generate to around cash I'll do but lot analyze? expect of is line. quarter. jump the for moving a big back you first or there's to in when flow overcome year was

cash full we Good And question, year, back No. generate basis flow a for year. on of expectation net positive as our for you current remains balance the - the know, that Steve. for Sure. the no, the will

Okay, Thanks. perfect.

Thank you.

Thank you.

Our Alembic with of comes Global. from next the question line Skibitski Pete

Your line open. is now

like sounds to quarter? some the contract. already best it that text the a of large Rob, first in safe. in the second Was is working great on maybe the that called trust it DCS practice. and the I capital Rob, JPF, meaningful Hey in and part working quarter, guys. healthy out That’s room. morning, in Good on a everyone the think of use reverse driver you I pretty that started

to things. as relates as definitely contributor inventory, Yes, the significant our both of to the it DCS increase couple program is AR, our that. as well a Yeah,

You through that of we're an that issue, our AR we customers know, couple we one expect with side. items that's have of a resolve on driving part without the working to of

contractual not know, very administrative they're at So we an customers there's really how you a or on look schedule. much would matter, when where paying say, you to - the want a

the with to have recent a issue this on we And we great relationship we kept year. the balance have through certainly our current So customers. shipments expect and of work as been resolve these

building is year? Okay. And just of the inventory deliveries the balance for the

Yeah.

JPF but also So important are at of lot which once that, the a look overtime defense, there contributor when largely the ahead you are because to in of demand. again curve inventory, is increased our programs, getting we

Black have So know, know, at and increased such others Rescue a program look when and Combat know, UH-XX, to you year-over-year. Hawk, we you as expect you shipments Helicopters you

And a on getting so that. head good we're start

Okay.

Okay. last one That me. for sounds Maybe one great.

are know, different light a quarter? revenue feel you typically You - was in in year this I guess half the Anything of little little a I guys quarter the with a strong and things build a second surprising. first the like more first year. little the

would Yeah, say I this.

with You hard unit fourth know, quite load. as level try I we call usually everyone our is very know, quarter more to bit. our on been aware to a you working we've outperform the as mean,

have of made business a our So progress. units lot

businesses sales of increased virtually saw we first quarter. our really, in know, the across You all really

good very results. So

a XX% up know, Bearings - XX%, speaking, XX% Structures our had were the franchise and tremendous You across Bearings year-over-year. generally our quarter board Programs up

in of know, good as light team began of they COVID-XX issues unfold. the to working execution the just through the you were part So on the overall really

about really reinforce - Rob Pete, I just I job. team doing add excellent that said an would would the what

strong as thing about rates. in is you remember through that, other talked we incoming the order The XXXX,

and on orders strong strong in we've backlog orders know, very we the and we're Bal quarter, And up up XX%. our very basis you actually XX%. had – an were you So first when Seal organic had we in add very,

really quarter So the quarter of also in order achieve, the – orders really fourth very were and team first with year. continued we rates in was of pleased and we incoming able this last the were the we’re third pleased what we but were year to strong with

some we expect in second granted, the Now from starting strong a off quarter, but to that tail position.

the great. for right, Thank guys. All you color

Thanks, Yeah. Pete.

Thank you.

the Our JPMorgan. next from line question comes Seth of Seifman with

now Your line open. is

guys. very And good Thanks much. morning,

are How Seth. you? Hi,

Good, thanks.

[ph] performance that's just good the is the guys is the on have drive gain UH-XX kind volumes to helping on area, the it defense So over that past in you overall program? over or the experienced so - of it share year past some the or

intelligence Seth. program. is as Yeah, in you we that - to we Rob. it increase we've the - market This Yes, the we market relates know, as have share on an UH-XX seen based

to on we Combat - Rescue of helicopter, bit Rescue mix have than the positive And as little it’s Combat have well. more Seth, volume shifts the a so more we It's helicopter, content that.

so it. on in Got slides talk Okay. the you And about… then - the

Seth, I'm sorry.

thing that very about have that, continues the sales. on The and well asked for Boeing you for you we both question to glad talked content the good FMS is have probably I'm other very know, that and should do we and P-X U.S.

that aircraft. a we So actually content nice on really have

So from still. are on that are as maybe? our Seth, have operator Seth, mute perspective. you We a helps us military you well there?

Yeah, operator?

Thank you.

next question Dankert line from with Our Longbow of Research. the Chris comes

not open. Your is line

Chris?

Markets. you. Instructions] Thank of the question KeyBanc Steve Capital from with comes Our line Barger [Operator next

now Your line open. is

Can hear me? guys Hey. you

Yeah.

Yeah.

of… bit little a that's Boy,

right. All

never so you. from a were get question glad We to

Neal, sales at drive new Seal. Bal you've that? opportunities yes. Can talk change, future your you nice in more A mentioned identified remarks you prepared about growth to

Sure.

the our You economic synergies us knew some aerospace that. it for some at would Kaman work old because there, and those too Bal the because gain from to know, sales the models, we customers, about been across we we're perspective, enable outset we from thought medical that and we for it's said both industries a although into don't that we opportunity interesting synergies excited the very as in of were Seal working

and taking of our that some and he, group. business so really the expected number and Brent a for we lead And But actually it's in have at in of have Rick of area. the advantage early and - they the around we for just that team conjunction technologies where that our Bal head on steps with and not full the that the we aerospace marketing took gelled and are these Specialty I development, opportunities. of think that the have sales integration Bearings Seal team was And medical defense program Gary it, but

of About to we - was were XX% and we're was GRW, context aerospace just pretty seeing area because we we as and side well. knowledge of up XX% before. their business their to When aerospace and ramp that able application have defense quickly acquired the that on the

So the we have of to that to I couldn't in lot And think pleased. be goes a it doing more day we work people the down day. that trenches

something make the Does Yeah. the for original Seal little defensive back that them? or the go slides, food-grade and food cited big defensive in detachable a industrial industrial I If industrial how of tools. was there more seals Bal side Seal for grade specifically business that's to Bal is

aerospace. think than look know, at they profile I But of of that can our have think very We gain downturn. in their business, more know, in commercial you don't we maybe business you was and medical. some with if we the there share XX% much - this it's them help

impact expect the will we being elective have implantables procedures. from of near-term we their because business that deferral the down some of Now in

are in predominantly beverage quickly. point at rebound industrial. food market And defensible and that the to think because that certainly they date in is will about industrial being I think the least your good a But also, industry, one, we

we like market well. eat, exposure that so to got and everybody's So as

you across I capacity. manufacturing All having talked know In in invest right, get past great. the about platform? some the to automation this Does all you've lights-out and robotics more

a Steve. it's know, You question, good

and track the a want track have everybody have our we've to it great just the we got relatively flat it's to workforce of probably of that to lot great I they and investing record sure calls. a extraordinarily It about things well that do recognizes but a we record some that we headcount cause differently? things that bring of years. of with talked make on that for a will, automation increased manage we've are I in think one automation had had us in able output Will that

will tools. lot but that a pretty do advancements will because of good more? I do other machine But Probably, or So flexible whether automation robotics, the today. advancements of we it's in think in we be

point, line. if second A guys other back those we'll see are and then in

All right.

have for system? about build you a commercial lag inventory work just do supply visibility through how inventory start guess you chain of in OE? with coming before I product or the progress rates again in you lower thinking do much or the customers How kind expect the pulling the are

questions, and it that that's struggle to were fourth we in in know, this You of there assess quarter fourth indeed, inventory perfectly year. how be commented, the I the one we XXX is the on we something first as quarter the is, of in too, MAX, quarter shipped call, ship to that think we customers shipping different honest, and with, on is pipeline much trying because still the where we have between XX and to XX and the

at final customers have from setbacks different we all board, and the across all different production. But levels

for that hard see will tail to on more seeing think orders we to for triangulate would So question, we inventory. wish without had and had time be calls the we'll next here better off couple term, in little we're answer and and the is the when report do we'll expect from what is But orders bit we be near say, some back we requested I because a a mean the on today and answer it rates I order a what you for from somewhat ourselves. better able delivery those able incoming that it's to

the Yeah, time. Thanks understood. for

you. Thank Yeah.

Steve. you, Thank

Thank you.

line the comes of question next JPMorgan. from Seifman Our Seth with

is line open. now Your

in. somehow, Hey, on. of guys. but walk off Thanks I getting must thanks letting for for me back drop me there

they in know, is OEM Airbus quick implication a gave what for and if you the the split split. not OEM sales Airbus Just that platform, the are guess correct. couple aftermarket I the slides, for? The follow And and of Boeing of - you Boeing ups. that half are the that is so,

think I correct, you - we the regional if do you And Sikorsky. platforms things talk one have know, Seth. balance is diversity and do industry, know, would we both with of jet of Airbus the that And we in We of rotorcraft the Bell, first that about products goes order we across of incoming We that lot and with lot business be strong the aircraft. with - the a all certainly business very, we lot regional well. for rates business helicopter. a have there in and the had a platforms quarter actually business do and of very as business

in - as in well, calls, we helicopters earnings been investing we well, there that back we had gained our we've driveshaft you well driveshaft and flexible new a prior to for with and quite work with bit also we business - for that And fair amount platforms do helicopters see and our of would done – So go also, share. have again which you were have business. as the a quite now Rolls Royce. And we

the engine in know, some you of engine, other So folks.

that balance really that's business. the of So

XX-XX, more little split, the bit something would would Bearings more maybe Okay, a in as not or up, follow like predominantly would even? that? but be that maybe aftermarket the it a terms if OEM, we still business, more put of maybe And then that great. OE that to - be be like Or XX-XX on

Yeah.

would than quarter-to-quarter I know, would a - order take I shift business, that any wouldn't towards lower but I depending at you're I the tilt not can a their you think you So little it I XX-XX mean, were mean, - book. think say Bearings a shift I wouldn't relative, to and the if then that I can on Seth, right. aftermarket look split more like lot. it

Very Okay. That’s all I Thank you questions very had. good. much.

Seth. you, Thank

you. Thank

Research. line Our Longbow with next Chris of the from comes question Dankert

is Your line now open.

Hey. Morning, guys.

there second. off dropped I Sorry for a

Good to back. you have

about any on I And if unmanned are could just there still slowing year? you down? great. I Sorry missed if I'm two circle I it. for wanted cancellation thinking we delivering K-MAX, Just guess kits those were there. those looking the were for guess, we're comment production then airframes guess, back now driven, I were just this five commentary be to year, would those also

couple looked reduce from the just to for Yeah, sales what's of expectation the four our that's things. conditions year. us a economic to two at driving really for We and

get able we very strong pipeline that the air to on now is know, about vehicles feel The four. be and to like that. good right we'd working restore You a and that surprise is to team

in year even use to morning this fact, issued just up and eight Forestry went Department contracts year from of the And the number their K-MAX XX. of to emergency from

XXXX, of we year fleet So Department would this scheduled Forestry we contract to the XX% flight for actually in the the probably deliver use. of XXXX. that emergency not until And that under for customers kit but that have has

is Got news. on it. program, re-wing it. structures production could touched we the to Black keep point That's see through just Got there. the are good Hawk moment. A-XX the Obviously, we to And back is rates wins at then or year? ramped that for a fully still I if circle the guess going this growing

year. next ramp to really it's more to so actually much know, going You start

that and of were we contract know, - early and get a pleased very you very in So to stages very, just that. we're get that excited

could, the half inventory that there, you'll be to an acquire if from to second make some year is sure things early that items the for one Yeah. in of see we're long-lead And towards ready starting perspective, of there will the production we Chris, I are XXXX.

news. good Okay,

we've year-to-year. nice the of one really improvement where from seen areas That's

with volume order they combined completed the we running really XXXX. We new across their really were to know through it. see footprint our improvement you performance from consolidation composites nice have in pleased and wins, a manufacturing we driving businesses in As have that year-to-year. when those And the is aerostructures our additional facilities

it. Got

there's hear still glad runway – to lot there that. that's and a So of

call I really But had. it that's for much so I'll turn all thanks think morning over. the back this I guys.

Yeah, you. sure. Thank

Thank Chris. you,

Thank you.

Our of next question comes with the from Alembic Global. Pete line Skibitski

open. Your line is now

just to is I Hi, broad one imagine Yeah, book had right wondering kind guys. but question. just international Egypt. I pretty wanted us think business SH-X challenging an contract update now, you was could on, brush of support I development in you more if

JPF, Just DCS also the is of maybe there kind that, an on opportunities, update market how JPF, and going?

business as to environment video no phone. There's development down. question. not effective by doing International us all It's and and right. are face. like a But to the being to face they adapting You're lot face is face as new there of

JPF, and like. We continue making SH-X would our DCS slowly the progress Egypt are that moving than and we're bit more make opportunities the to progress is pleased we a on with little

characterizations, those So brush broad are I know all can provide. but that's I really

Okay. Fair enough. Thanks, guys.

Okay. Thanks, Pete.

Thank Seth you. JPMorgan. up question We from the Seifman do with have of a follow line

now line Your is open.

for was through the did in of is would the that Bal I The final first that, Seal, payment you be quarter Just really model quick a as say here. XXXX? going one

Yeah.

in the our payment restricted mean, it's quarter in first sheet. there it's will the for XXXX. non-cash item. a I But agreement So is - mean, on we balance cash - of I have flow really happen the retention

when sheet restricted right you you our see and at cash. - look that So the balance

purchase or that's the and flow in So or the cash four between the price. the difference - three on XXX the so statement

That's correct.

Okay.

Cool. Okay. you. Thank Got it.

You're welcome.

you. Thank

call Thank for to session. you. like question-and-answer turn remarks. to would concludes back the closing today's Coogan This I now Jamie

forward today's for our look conference on speaking quarter report you to Thank again you call. results. We with joining we when second us

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

now may disconnect. You