Astronics (ATRO) 2 Mar 232022 Q4 Earnings call transcript

Greetings. Welcome to the Astronics Corporation Fourth Quarter Fiscal Year 2022 Financial Results. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded.

the to turn Mychajluk, host, now Relations. Investor will conference your over Craig I

begin. may You

you thank your interest and appreciate afternoon time your Astronics. Yes, in good today and everyone. We certainly

Pete the Gundermann, Executive On and our Burney, Financial Dave with here me Officer; our President and call Chairman, Chief Officer. Chief are

of fourth we the after released and have year full today. should You our XXXX a just market copy quarter financial which closed results,

website, release, the you find astronics.com. have not our do you If it can on

These make statements some in uncertainties and are could factors results factors cause may risks and statements future you during release from of discussion the to we As risks as are uncertainties actual what that Commission. and Securities with with are formal forward-looking the the other this materially filed the other other here aware, Exchange and events as to documents subject provided that conference apply session well differ and Q&A and call. These today. to is stated

can You on at or website our sec.gov. those find documents

call, be During will financial We non-GAAP measures. also some discuss these will our in believe evaluating useful we performance. today's

GAAP. for should prepared in isolation substitute additional consider in the information You as a accordance presentation this or not of with results

We the have GAAP of today's with release. measures measures tables comparable provided reconciliations non-GAAP in accompany that

it to With that, Pete me let over turn to begin. Pete?

for quarter conference fourth our call. and Craig, in Thanks afternoon good tuning Thanks, for everybody.

maybe it's our towards that simplify would a that to current think investor the to by the challenges other happen. As usual, to. broadly for happen to and lot a kind that also the things be XXXX pretty good or in to out, can that as XXXX less as And turning that news, talking are year some turning will and we play and want I well headlines tried with we it's the and will is give attention going and good, things I've what categorize the bad early often base quarter about expect away we think and case, received equal we things from our recognizing close of time how I

news our very strong since our in highest close by evidenced in, COVID million performance, good a solid bookings a came So demand the continues headlines second is bookings, for very the good as year. $XXX and

how likely talk bookings on We'll for our us in we how up evolving bookings that for into about based record our why reasons playing solid some strong frame detail talk how to opening about backlog are continue translated how and programs and out. think a that's We'll that is market very a is also some level of XXXX. sets and

we good is ramp headline that has positive begun. looking been believe news the we've Second revenue that for

to to thought We that about the level band million was frankly, seemed have since a we $XXX COVID been revenue we $XXX million, quarterly million stuck really just until of fourth time would higher hard have and a struck in than – be. $XXX getting beyond quarter,

but it thirds better, was two to of or XXXX. second of first the getting half it's half say getting confidence worse. as indicator we that that head real gives of the XXXX our into As it the think more it's started chain quarter, out in of not XXXX for and most and again perfect, us Not think the positive we we pulling supply it's is a we funk

scenes in completed. got coin, other was flip not That of over the good event, a headline about. to behind side that there want bring concerned about, to the apparent If the to special under lot talk kind charges adequate at be was in you over talk that quarter get that to some that January event, And fourth to problems supply it. we things quarter that detail inflation is we pressure the we've our that fourth when Third a I happening refinance if you technically chain detail. news we a quarter, of look Dave will and through due news have to primarily the our bad margins or for margins in cost we compensate that some paid pick were was for that might structure, might but the on incurred up our

turn going that it thought the that news, good for programs going of of Bell positive. it's radio kind on by as a what knows, were be Army We'll for during to we're we and delayed be is also team success very protest. XXXX/T that to fourth, under test a be. Army a a probably that Bad program would news to news overall that test think I'm the And bad preview. selected was good our U.S. hoping major And is, XXXX we to quarter, the we're It's long-term the program. program. our talking And that became everybody of specifically at Army Bell that whereas call. are apparent are Contributors to attention be at before talked they the means end underway. over we've standing for about by now about couple stop, we news,

achievable. big solid step maintaining We XXXX have we that realize, reasons believe from $XXX pretty to but some of that's are think That's $XXX guidance up million earlier we million. to we a

half you Supply the we upside to and has we'll will downside million $XXX the million about $XXX on it's risk think of what be We chain, chain, that tell potential and as XXXX. get how of performs critical range our supply but chain course, depending into early. first know supply we

quarter those a up year COVID all record of quarter us $XXX for book-to-bill third sets of $XXX of That's as demand XXXX a mentioned, of the million booking XXXX. highest be to began X.XX we I taking XXXX. second Fourth million. the continues discussed, $XXX Bookings and with for bookings only topics result million, strong. backlog were very of So previous the since I just quarter, as the behind range in

our to That previous You XXXX. $XXX revenue. million did might be pre-COVID about was in late in million a backlog that record $XXX was we when year interested know

we we're we It's delivery Today were $XXX $XXX big was in XXXX. $XXX that entered million, for So our million a million. as quarter Of or at million high. scheduled is step $XXX at up. first $XXX previous the million

talked the XXXX Given low. we million the course pretty a of and about that That’s a ship course number. the the that’s leaves might range pretty book achievable for we normal call couple what year in hundred over of

over us cautious book Our but and it, It’s ship gives months little course of XX been to on turn a get another to what million pretty thing be ship compared is to to. thing to supply about. chain it’s one the and order, reason modest used bit we’ve the $XXX

We expect for to a of couple continue see a reasons. strong demand

action from kind the barriers of been we been but were believe widebody. of regional on coming forward that. the the transport spent down, the of where approximately come largely market as see industry. has narrowbody, far so widebody going desert. pretty commercial most we’re back, recovery now strongly. narrowbody now XX-XX parked it travel But Pre-COVID, strength back looking for coming based source have market, demand regional and Widebodies have to in is another with are has we to that Narrowbodies to appears Our COVID widebody/long-haul the have in we’re reason

too Airlines pulling good industry the back them that’s probably storage ago, AXXXs, not of expense some are come widebody and in airplanes You pressing for service out the these but has most read and the strong even resurrecting airplanes, us. airlines were are over that XXXs, fly the experts would headlines. the place. long never enough They’re all predicting again. of demand AXXXs, in that back taking

good AXXX, upward along production to is they’re airplanes talking at about us. the revisions flying plans Airplanes the or there. and Similarly, widebody for also prominent rates Boeing XXX specifically today way for

challenges, that what’s I my are there are primarily Now issues been driving come it’s capacity demand, at across, been to as narrowbody. our is we there point guess but look

Now has up we China opening travel along as more think in of be and a lines contributor over by Also sign. we’ve airline this recovery restrictions U.S. industry happening from the going driven for the us. quarters. is of good forward. Geographically, to And more the been widebodies and commercial very a a like these go positive Europe. last the by we think and the We company widebodies, few that’s seen

Asia very think positive in lagged. a and location China without two recover our opening Asia, to China on to impact worldwide did a industry is we less very they popular have not recovering restrictions up obviously industry early the as it’s has it’s going December, travel hard China overall. for strenuous in

those program today. pretty why reflected wins second that call continue while are to strong about in really issue a over not attention of we be booking we number talked have level think is I The program to year, is pretty our to last wanted the major going to reason – wins demand

We and electric today, if a as worth we’re that programs to FLRAA, announced a that haven’t than they’re Southwest But we to the XXXX/T down. win Safran, going conference hundreds program and guess in year airplane going I And millions backlog, less collectively that dollars. cumulative. that I’m up were $XX think talking probably add in these are million programs about we’ve them announced be of we I and also decision since Bell a now, market, half antenna came the with program, the of ago talked activity doing have some call probably we

the who Bell our this, know follow people I on team. think company are but we most

the for this hard doesn’t haul. doing assuming most protest significant generation company be of to And its use program, the our end things, the over it we We’re disrupt program significance will after the right of system long real a electrical overstate course, to system. expect

We’re bit of order. under a a little gag

end we we that things quarter, but say of one what that in significant these not I think workings protests and bookings a is as And of know there think demand similarly are going that. inner are much programs $XX today we’re to that’s about at is all to all more the liberty of we it on contributing start these major quarters. the of driver. can’t again, And of to currently, or expect fourth than are couple cumulatively. don’t other I was million, a that the that the to as But the than coming and less talk certainly

have in where $XXX a and to four significant much – need we demand million or to to towards quarterly as switch revenue even meet from revenue step higher mentioned, really excuse to satisfy of hit, XXXX I in our $XXX be million in we’ve and in want I demand. is $XXX the COVID bookings to revenue a bookings quarter me, customer in bookings our ramp the been since up million though been stuck band So of goals

going we’re factor year chain a But caused issue. XX% on of done, more of a And through we much a has disrupted to started. demand chains second people, we all XXXX back supply strong really we supply limiting for and would supply expect look people a where chain as XX% lot than frankly, to were XXXX and aiming celebration. really said had usually and The growth when been first issue when higher the year and be growth

coming demand the saw We back.

we Our across not perfect, earlier, today. them as beyond as And more original the anticipated frankly, but level climbing chains. at our surprise down detail we XXXX were supply they’re negative today, and we’re effectively it year A negative happen, still used XX% a plans supply supply feel well and regular fewer positive are supplier, up and because there fewer with as, as ago, to disruptions while I well at surprises, better by and and fewer saw mentioned suppliers can coming to ended our we year do XX%. do dealing as to is We chain the for our we constrained of is growth line, hiccups improving. ago, and responding weren’t we more chain surprises

and fewer better while the at them. to responding better fewer happen, and hiccups So they’re and we’re

frankly it – refi adequate. deal XX us is of and and drawn Get and the of on refinance, the at And company’s was it a will know. minute. Our a in feel an We do, the us the what if point just in be in time perform, recovery rest finally complicated that process. as macroeconomic environment to some undoubtedly those the for we cover should of COVID through it do our this cycle. for a reality that we can being. reflects facility details January need think It’s We but most we completed out Dave you of adequate position can the the we

sort The of elevated about headlines out. them take talked and I bad costs two We time are news to under input margins – some had going costs to those pressure.

pretty longer helpful, react to quickly. where cost have able in We reflects cases order our we strong tend The bookings very of we’ve the cycles us pricing it’s contracts of taking cause that Frankly, older work to that are term because we’ve business short. in lot been portions a current many been problems. can are structure, that the the

and erosion We fewer call to into we troubles fourth quarter. in and that also to hiccup source when fees. to margin pay spot a were they buys getting are we run but or expect continue we a down major winding activities have down, the and tend wind chain make has what of are pressure or fewer them expedite to supply pretty Those

of radio that mentioned As A we test improve. move we XXXX/T, expect through program delays couple program. that XXXX, position Army the to I earlier,

between winner of couple we ran a technical a and – we As are or and a the that were couple Army back those competitors. named product the identified as provided the a evaluation August reminder, in

at was develop procurement. a directed point source negotiate to contract next and production or The that step a sole

Going that become now, forward, later that going probably than apparent be if now would we it’s in procurement expected place, by directed that. be year, the much it’s end by of to the not

later. thinking of middle as Army’s bit the year the or this processes that now a We’re until last even could understand we little

we that Before get program contract seriously start under and before contributing.

lead And in that unclear are and program’s other $XXX order neighborhood things million million the we couple revenue. to to will point long believe but in to be of that contribute, that it’s funding determined, on somewhere at $XXX going depending be of this when a

but the that We run until to eager over just at we’ll get three and going us it, we’re to years two we wants get can’t expect Army to.

FLRAA that will is April it period is earlier. I through talked program X least that the I thought last believe The protest we X that other underway now that and appears stretching be about because now is. protest by out the of would or the program at We it

under be not will contract. we so And

this at We’re in done the basically water point.

So we that’ll quarter start, than rather quarter a first be believe the second starts.

at that our think Dave turn I’ll got through With of this coverage, and amount to summary a point. to also specifics of QX He’s refinance. I over Dave? talk it some

Pete. Thanks, Okay.

our Following commercial to some was improve fourth sales the of the transport market. Pete with points to bookings, primary bookings on made through to quarter. regard for and both the and driver continued The increase they sales $XX XX% up a up of Sales was and $XXX year’s over to million this million fourth about quarter. increase last the from million, sequentially market $XX just quarter, which were to an third little over from

and continues travel spend demand aircraft OEM driving improve Globally, air to for the rates. retrofit build increasing

that sales there lot Now, the but and million and to partially the costs higher puts on AMGP year’s, in takes the quarter. the $X the driver fourth $X.X a the sold the and increased P&L main program by grant was input additionally, had XXXX gain benefit to the quarter from this million of that from we building are year’s ramp, margin offset last of compare

offset year’s for full that partially quarter was accrual cost. XXXk our in This a by

legal costs impacted new $X.X being relating the on other contribution face by the predictability, to and year input will The chain hand, last be As fourth pre-pandemic these costs closer from as floor were as incremental as contracts. and These The primarily gradually shop lower of labor sales running pass eventually to settlement. margins materials. had continue on is which well which gain mitigated than input on typically through XX% the higher XX%. that impacts Contribution efficiency, quarter, This quarter are to on million now. our supply fourth is to margins, costs we margin XXXX the increased headwinds fees. contribution right we at company XX% the of about benefit reinstated somewhat a litigation in

the and It that XXXX does has early inflation the appear XXXX slowed we trajectory of that experienced through significantly.

million were hard to Additionally, the to margins. parts spot the is we cost significant these fourth to roughly spot source a parts. buys impact market, quarter, $X continue standard for find our these on our In above which

these we move the reduce expecting to of buys this impact are spot year. as We through

operations with quarters and which for this the flow flow loss the was year. cash improved last the inventory balance the $XX.X as a our compared quarter quarter, with flat levels increased third significant prior was net the improved Networking to fourth the a growth remained for the capital as Switching during during positive Cash quarters where and improvement over from minimal inventory was million quarters million sheet $XX company. three quarter three first roughly of XXXX. and the

receivables prepaid Increased lower increased offset expenses by accounts and were payable.

supply are as efficient. to [ph] through drop more floor shop move our as We forecasting and year becomes we stabilizes inventory chain the the levels

a for million, the forecast. little $X.X CapEx quarter below our was

for to couple line is back conservation. in be of the $XX We’re the in of years after last our million, with typical to million CapEx $XX levels XXXX range forecasting cash of spending which

the At from down the $XXX of our $XXX.X of the year, was the is quarter. end million debt end third net at million, which

We’re used forecasting flow flow and the debt. to positive for be will year be reduce cash positive the to cash

XXXX that capitalize five XXXX million We’re treatment expecting to them expense them years. tax them for and where the $X year. And new sheet to cash on the required outflow in taxes the be paid about balance over now this to all relating R&D put our relates we’re in be during will costs to

that three-year we $XX new part had better financing loan for in four-year expire based will credit at facility. and two to credit November million X X.XX% we To will on million revolving financing, based structure available the the two asset facility credit interest flow to on loan pieces bear been – had X.XX%, The XXXX balance. SOFR facility the set replaces credit cash debt plus update, structure XXXX, bear our term The was the to revolving interest the debt the credit facility at on January working term new closed with a of announced we on year. plus X.XX% that SOFR and revolving the depending facilities. are $XXX million The which new

average Scheduled not the the $XXX,XXX in will million the term and $X.XX each note X%, in between year rate prepayment third in second a year, there’s X% a Scheduled is The to second quarter penalty. second rate XX% thereafter. quarter and forecasting in interest the third we’re principal there’s first weighted XX%. year the in are in on a on XXXX of be the begin term and $X.X penalty, quarter. X.X% note prepayment in Based payments principal and payments million SOFR quarter, callable the cash

interest is expected on per approximately XXXX higher amortization million the will income of quarter. quarterly cash be $X.X quarter. expense by include $XXX,XXX statement to interest GAAP and will upfront costs per expense about be

are and and costs $X.X over loans. be compliant CapEx comfortable million all in covenant, the given current of with these back excess outlined a was Total remain covenant, that amortized availability, closing maximum January life covenants the which lending covenants ABITDA with the XXXX. Important able minimum upfront fees filed financial minimum will agreement a were our that adjusted being are to in of forecast. feel for approximately We

And year taxes of XXXX. to relates for be million the for has Just basically accounting. for million, XXXX to note question past get development all we number The important that. the on about a the our rate focus we will it tax rate. on this tax taxes, to and in been – meaningless pay that is year. as tax this year the expect $X tax $X our effective I a is cash expect cash new on we’ll will and research for more the been quick treatment primarily The

just three-year it going with this going Our somebody’s XXX%. a be quarters What negative because result is a I you it’s assets a cumulative generate to it’s make for negative an our know full is, period. And tax to rate. a makes pre-tax fully have a sense it expense for to year tax a over to we I’m tax we in this of no and loss, XXX% benefit, with reserve income have we’re until telling means doesn’t This going sense. a a ask rate quarters deferred profit, any – because tax to for ordinary is the having person. and tax

tax are timing for recognizing not income statement being impact we’re that So deferred created difference. the assets by this the

that’s I had. Pete, all

Okay.

Turning to XXXX.

initial but million. $XXX pretty jump our of about XXXX to are are think $XXX XX% XXXX to initial actually midpoint big at million revenue in a million, That range. range a than XXXX growth We seem we from the in couple of We anticipates maintaining That’s in XXXX. XX% over That just guide $XXX We may that there slightly things growth XXXX, would like be XXXX. growth XX% XXXX. what more saw XXXX. did something seeing like over

to it’s it. we it’s a the step, but we’ve certainly So and done do a already step once backlog have

again, Another last data million, supportive were million. our of $XXX up four last five our that right $XXX quarters piece of of around is bookings million $XXX four that million $XXX to range, and quarters were

So get $XXX that, you million. if annualize you

about that are assumptions That So to XX% XX% that coming to world. loaded beyond the and moderate traveling, continues you’re COVID restrictions are matter They where And We’ve talked the of I growth. are and travel months. people packed people doesn’t happening, or commercial be on the that down. where airplanes are seems call the orders We’ve are have on seem going. in. coming around demonstrated to last you to over big Certainly, majority couple a assume been are China.

up, So in [indiscernible], we opening solid or markets. expect to in long COVID solid with our want people and travel China markets and demand as our as growth

them resolving The supply expect do and occur. other when to chain. and see need they to at Again, but but continue them we’re improvement. exist, steady see cautious better problems the big – assumption, still to of we recognizing course, We is

that negative or positive to increase think lead going times continue fewer availability down to mean going going come recognizing are we’re is we’re to more get which and we And surprises. surprises, to

fourth of slides and these to of little revenues that a Now, what end first scheduling just chain of the cadence difficult quarter the was what be though demand exactly about some month a function within expecting we’re lighter program to first little quarter, And of it’s XXXX, going be know than earlier. That’s talking quarter I actually is the a was. bit of to performance we’re a even like. the our supply

a on to $XXX for million guidance range million. we’re So wide revenue the there’s first $XXX relatively our quarter, saying

we fourth what quarter, in that’s ended said the $XXX course, we up Of million.

So we respect doing think mix are to We margins. our best. going positive do within change first a with see that the quarter to we’re

normal change times, So thinking million and and model we’re mix makers contribution of you more first volume off margin ramp our results. might that’ll million think going say, the is of XX you or we do the get XX off think production course, the that knock in And just or quarter out as progresses. to XX% there, will simple positive can’t knocking our year result help off fourth quarter of our we something exercise

talk XXXX of We’re March is But but course as a and end thinking that of the lower best it’s from $XXX look to higher quarters ramp we end there’s, two going important feel you million, our the we’ll up. to think our I earlier time through where potential upside at four to perspective, perspective risk. on we downside and said end. at will again, range best be next give starting update ending each $XXX in the this And we million of

came or get We the before previous to than couple be that going So on we’re excited substantially XXXX what since think better COVID saw on. to years it’s there. we year

take ends questions that any? why we remarks. prepared think don’t some if Jamal, we our I So have

our comes with the And Sure. of [Operator Securities. your CJS Tanwanteng Jon first from Instructions] line proceed question. Please question with

Hi. supply to the Good afternoon, for my nice Thank see Obviously guys. you improve. questions. taking

not what’s or again, out that you and the pushed double QX, that supply if that from something that. you constricting just you caught on timing QX to up is maybe had to check going Just in the and QX

understand supply me a really. is improved help QX. It from into QX chain Just question the

and question is it good answer. not a it’s an Yes, easy

way slides. bit did things the it of is able were a is we left normally getting first quarter think I about chain to XX think, move quotes in program the where by were XX is a supply weeks for quarter light. to it XX think and little of going might to expect And all part first pull I little for We out top place way a couple order quarter, that weeks. a ago or fourth a answer we year sudden a the an into we pull to bit to weeks, would the come line which the that we that, the

the the many now more cases, And XX weeks. an that is it’s still to it’s difference an which but suppliers of is their but the coming can – weeks is it’s things down, to capable And commit But XX hitting not not XX – they are whatever where to in point improvement weeks we hitting improvement. accelerate very easily.

chain we’d like have we that to that our if we functioning it first or was first, have filling this trouble supply hole a no cooperative given orders had the quarter. queue, the backlog, Given in in used

levers to it’s getting that to the But with. is while can we performing the better, given where the yank pull we push and the way used not better it’s operating chain are all supply getting and point

of a It’s it’s clumsier hear bit a little process. So a that. of hiccup. fairly combination little of times all occasional But kind and a are regularly. about Lead have just we bit the do them still I longer

add our ability you’d respond to I just think first during don’t in quarter looking. anything know it short the limits if that. we And term to way of Dave, the it’s so the

what it requests a It’s weeks. eight it. wanted that to puts – we it And think as lot quickly is, ago, we months really nine consistency months or they that. something seeing if we covers ago. a ago, said, damper on a I a think six little pre-COVID, saw in were I eight supply more or is in months you bit, No, six of chain than respond your – do customer lot able we’re ability weeks what speaking, to But generally to

costs aren’t flattened of we’re as went saw seeing of last going the a that has year. aren’t or down, flattening buying. through kind materials of lot trajectory also the we on a certainly but Prices the we that out down We’re inflation out going

it. helpful hear. for Got That’s to very you. a Dave, all No. just and good question

help the be even You incremental close as think QX. XX, that XX it mentioned you're to mix goes through year? we XXX look the Just obviously Should is doing margin understand How that like? going contribution still buys the or of you hit or does XXX, to spot contribution towards what improving actually XX margin that the the in mentioned buys, improving should that spot margin you when down? us

– the supply expecting them the quarterly in regard We move phase will insignificant to which, particular second Yes, buys, to way is basis not to we forecasting into is I half in year. the out more don't they with happen the until phase are of – expect pointed there out, the we're a chain. on gradually this we're spot to normalization as as

So that the quarter we're cost by spot – expecting buy it the fourth decrease. to

thing year other those earlier have that higher way our we and new we start well. I the into to move we're The XX% roll The price, through that well. as as more we as quotes gradually meaningful to we're forecasting into margin will contribution expecting higher we the costs to think improve year as contracts reflected a where year expecting mentioned as see through selling is move the next and become as

would your $XX be tax a last say million this was then that non-cash year, you number? or burden did cash one And from me, Great. that

$X I to – to million. million $X was what say intended I

$X million Well, $X to million.

caught guard. me that apologize. Okay. off I Understood

Oh, you hear did XX?

maybe just heard that was XX my fault. I and

to $X No, million. no, no, million $X Yes.

Thank you. Understood.

Thanks queue. lot, in back jump a I'll guys. Okay,

Securities. with comes question. Truist Please proceed And from Michael of with our line Ciarmoli next question the

Hi, good taking Thanks evening questions. the guys. for

Hello.

Maybe the contribution just that stay aerospace that but a on move knock aerospace margin, Peter Is in build of nothing we – through you steady eight the and continue was to of here thinking gets margins, margins supply wood, those the the you? put presumably, are we through. or expectation that it what, about kind chain, as derailed increase of mean, how a in Dave, three this the think demand on I margin flow kind off expect margins the with kind I we see to Should quarter. just given up, reasonable and level? volumes year

the to grows – speak absorption that I speaking better contribution margin. the the costs. XX%, think as top I fixed will incremental also happen is But to I'm of when what line Yes,

yes, top we will continues as we aerospace continue expect would that to have So improve. to line see those growth margins

I that's talked you more of trying you in kind you you elaborate Pete, kind a about and to increases or kind mean, push for what us what Okay. pricing. to I or of be year? of detail this the price are would then, little think to through bit able give what mean, equation terms And adding

guess contracts long-term of increase cases some We say I ridiculously or quantify. the that for guess In ride had we've shape, course. got that a I It's of will we're think, and at a bit base in hard adjust able contract I for pretty feel inflation it for to going another I have because along revenue in high we due part years, assuming basis. cases, to two little to I of wait I and good we're certainly demand, recently we're three out to a part, bookings rates renew. that a lot turns But would major most the pretty to our think heavy doesn't over frequent on prices. pop I think, programs it those and some in in heavy on quite

fix that's issue, a major are bit this on part, margins. I We've that say better got But here I'm an our sitting most a business, parts operational we think be our not business to of the achieve for to long-term quite going parts complaining point we're some other reason than we've points. that to stress have as can't adjusting why don't of at our basis. we not don't good inflation and about got considering and a

to like, are Okay, getting you or… are keep real okay. just inflation pace trying pricing with It it sounds or I you pricing? above mean,

you expected. to cases, And a than going is we surcharges this that most also have based we to it's that pay we're we're more to agreeing the For going going we're programs. think We're in surcharge. some certain us part, customers to on making lot saying, and thing we use costing execute where customers and buy are adjusting think many want to our when of

it. Got

cases reworked to it works price. favor. staying that a with of will top We'll cases, the in some to arrangement have ramp for go But relatively the our some recent base bookings into we're deal like that's being most In In later. temporary and away on I it's it then. the feel part,

opportunities. it. it. and then so called ship out just are like there older I one is? content we it where And seems Got platforms, older retrofit the just you the ones what And kind wide-bodies. you talked of are Can of going like us some AXXX seeing you remind know then XXX now. set seems more, about mean, Got right I mean it these where, some your

some sort asking I'm then of demand right and can seemingly just content. guess you maybe I So color maybe now it more give is if retrofit on the

things display We number a are those So a seat, the now, every system prominent The IFE have provider line tail. a prominent off most related. comes example, though few Sure. power, of systems, gets we the for airplanes. airplane wide-body quite every production a wide-body of seat And that major years do most in back to in manufacturers. for been to Right? nose

they an or they whichever one buys want somebody power when B, boxes, check system. So provider Astronics the pick, AXXX, C, the XX they as they get and or A,

like data might whether that. do we they B on file depending wireless parts pick other loaders, of A, things access the Additionally system, C, or servers, points, theoretically,

work. wide also And then we do fit

airplane aftermarkets in product in the where electronics a on it industry. about the it's important IFE $X.X $XXX,XXX million line, of be but not production more, neighborhood mean, somewhere revenue. widebody aerospace because when for you the it’s I The it, line, think could or uncommon the consumer important in of kind theory So be aftermarkets meets to too. this

most rooms a compatible. obsolete you I A, basic cycles the what or and long What and somethings electronics the is mean, time changes. years. in world Consumer years has airplanes The – basic completely or of three power industry and with do people type money hotel of of turns very and areas now. undergoing of for think a type they’re or years spent that lot over airplane. two is equipping as and They’re restaurants now even not lot power prominent, seating USB today different. is their life two C from is aerospace does Powers three It not, right?

great to airplanes that’s need cycle life to be sitting to the effect just they’re blunt. in they upgraded be be is and having flying of one things So If the the for that systems need place takes upgraded. don’t desert,

or just really that’s that helpful. flying. them fly. We new we airplanes old, if all So matter doesn’t It like they’re let

Yes, it. right. yes. sense. Perfect. All Makes Got

jump Thanks Let me I’ll guys. back the in here. queue

of question line Please next Tanwanteng the with comes proceed from question. with your Securities. Our Jon CJS

take of it or think get the to Hi, was thanks have XX% get where for follow-up. how revenue do to if be? year I Or And what this the or and years prior years forecast you XX% revenue on or three year? does used follow-up there do maybe? in last kind peak, the actually it there How topic. widebody to it I ever was is the just and taking two in you guess, widebody the wanted back of much you much

product that It’s we – some have And to exclusively on good hard we products which a are have on very question. that lines, and narrowbody. used are some exclusively used Those numbers widebody. are really are

have used on some are We both. that

hard of figure really where definitively to it’s kind they’re out So going.

used to I probably last that I year widebody was this or would get of – running tell, lot closer specific. can widebody But orders From I probably that what business the we’re be. XX% a from XX% of year. just can you revenue say, what XX% move to or are in that understand I the tell going just in neighborhood taking to it where we’re to And we’re XX% of

is happen traffic voices and in what’s they predicting year timeframe. back late I whereas the more levels six More widebody to expecting And the months think airline the that’s to in you were to getting sometime and now and mid-XXXX me all are follow ago, XXXX. XXXX experts in global going or interesting predicting XXXX, return or or industry a XXXX

a happens travel for on what we those Again, would that our track is But I like suppose. in expect air of products to kinds of what in demand China with lot roughly demand widebody airplanes. depends for

but little patterns ordering then to be XXXX, a expect by mid-year our second I’d see guess or normal we back I optimistic, half if So mid-year a recovery, that’s think probably also. much of pretty I to

we’re $XXX in booked million just mean, we million, million by far the $XXX way, I off. And not that did $XXX We XXXX. in XXXX.

it’s that before to kind from to the So us far supply pre-COVID levels back chain it. ordering here at it’s and to not to we’re there execute of anyway, on then of up allow

FLRAA rates us or going consistent are the very the like. That’s start program? to the test what you you it on do help little going, just for what When is more a helpful. Could they it Army the it. lumpy? understand Is expectations Got get expect radio run up Just are look of actually give and and contributions us there? color out

the end initial in Sure. the point. to XXXX, be program, expect the we We rate card that. think Recognize next that it radio million the a be timing would between a little wild this we $XXX it’s is know of going say award I be The going point. production. bit The to on $XXX not this test high initial There’s towards to at much low at the of a million. – to

in early times sequentially, XXXX not thing, a late testing depending be thing. the lead can major XXXX. going involved then that then on production XXXX qual it production, things our And those an some we turn becomes probably then to late If impact not on. a or till them eventually may probably do There’s be theoretically, happen stack there’s going I and think happens if but all to concurrently

be testing. we and will – to and order that standard that that of beginning. product This a radios think have We of – be is and could lot going just will we Army. So that initial the a be They lot a decade. is families our units for think a the U.S. that

of on more used describe importance it program this us. So that FLRAA, develops to analogy this as I’ve for the

been while, into successful in us electrical becoming aircraft a end other electrical building, turtle night critical and a You’ve have small power high jets, pretty the expanding difference and from in FLRAA But of fixed-wing is it’s now – standard rotary-wing, those that in [ph] tall been day we and Jon, been programs. kind franchise and of for flight both following kind we’ve the this a a opportunity are it the is area. we crafts, tenor electric – EV terms of

it, everything airplane I’ve a passenger a we this little order, a put gag imagine but a put I put line of used and service we on a said, suite, wide cetera. body put that it cetera, we an have cockpit absolutely again, radio where of we we analogy terms full production units, possibly to bit on it, a And Mike full might airplane. I on that airplane is That’s different the but how – full our little toolkit. if et in suite exterior equipment in suite and Michael’s suite, earlier, this because this really existed, down interior we lighting power lighting roof, theoretical answered antenna put comes et than put we then that’s full lighting never on a a we a And a IFE is question put of

$XXX,XXX the all – somewhere You get probably up, and you neighborhood of to $XXX,XXX, in add that a airplane. you

while And our change, content that movement ship we to set expect of aren’t that things that. and FLRAA and north there’s are be will well contract under going the in we

game there. Blackhawk. then out the It’s a that’s this guess like And and expects of build? us, do kind a replacement There you what for program. significant to are you another guessing of time expect? a guessing for a well, for aircraft it’s point. one going but little company changer Blackhawks if replacement, of at Nobody how a – So a over even game, game they conservatively bit real one whole but A X,XXX ask, many a are you

which much that the later, Got it. in would you, be… I Thank development production initial until doesn’t this revenue No, about, assume put in though, thinking into So what that Pete. perspective. it is right? helps go we’re decade,

I anything we it’s are, well, you think know buy to route like years? and go if real this how than production the but program’s be – going Blackhawk’s for I’m far now both retired But before we in XX Jon, been volumes. older hit

that No, be it Right. check. – Yes. could

XXX the to supply in Okay, facilitate. body run is and issue, take to door assume Can great. Last question for cooperates me people it you just and have workforce let’s get you you that you chain Or all now? get rate reach labor that your on that the going these with those more wide work orders that? supplying have to the just

the chain my for labor guess, problem. most been our would biggest Yes, problem. I feeling part, has – biggest certainly I Supply our is that is not

of a supply their to out than of labor, We little houses was certainly the business come board. height X.X better most full labor pulled quickly. of changing most the but Nobody little that parts it for part, work. the to across bit That’s what for of parts. yes, COVID. up business, years if our side at to most insightful, ago in those have trucks are bit. is of our wanted for struggling of to short say But and we the labor of a kind turn Your the attention Then would it sudden part, places question all snapped the the a that be of is chain

feeling you’d scheduling the we’re we I know that any a they way. Dave, in different don’t our that think as I the major capacity general to of headcount our happen. okay adjust that and answer programs can if and we have that

No.

Okay, getting stuff of the the done Thanks the over over obviously, finish great. guys. all and months. on And last congrats couple line

Thank you, Jon.

Securities. Michael Please next of line from our comes Truist And question your the Ciarmoli with question. with proceed

on Pete, picked the guys. current in FLRAA Jon, just thanks my Hey, year is FLRAA from too, anything contribution assumed there development outlook for the program? labor question up revenue but there,

we in. – some some NRE have We do have built yes,

it south delayed. a would $XX of at unclear over probably As north be to that point. play $XX engineering little thought couple you million originally years. It’s imagine, it’s out effort. might year going of million, this somewhere We a It’s how X.X that’s

up quarter by – nothing it that got or bit. this something that in air we’ve gets little the hurts forecast. with the the downgrade and it it’s we our and year the say, But whole would they point, thrown that in whole significant So us be GAO first internal happens enough and whatever, at then the the a recompete a for, is lost, If feel crazy delayed to gets thing let’s to going this course and the excess change whole it’s a demand of demand the the enough quarter blocks to protest then resolved to first material the we’re of bit, while year. shape early little the pretty then. starting not of close be kind That’s and we’re over expect be what or year, we Again, expecting the hit to to that April. our it’s point right hoping at right

complaint, that, filed that for is on mean, a Does I Lockheed XX. I which that May deadline think, second there’s the

filed? mean, is So that any I that know given their complaint I – does the first implications they have decision additional

I deliberations I what know that Not the knowledge protest. of, about the are know inside don’t on any but again,

Okay.

material I it to the just detractor a – plans. our becomes that say it the can goes, more longer

it, All it. got Got Thanks guys. Perfect. right.

All you. right, thank

question-and-answer Yes, to end call it remarks. closing the the looks session. management I’ll turn like for over our back we of have reached now

was We We to attention. Have step for good Thank up time. look night. talking Okay. your we’re again to you XXXX, a optimistic No again like for closing fourth next feel XXXX. and forward remarks. a to close quarter you the

Thank disconnect and participation. line may you concludes And today’s you for your at this your conference, this time.