Innovative Solutions and Support (ISSC) 8 Aug 202020 Q3 Earnings call transcript

Welcome to the Innovative Solutions and Support Third 2020 Earnings Conference Call and Webcast. All participants Will be in listen only mode. [Operator Instructions]. I would now like to turn the conference over to Mr. Geoffrey Hedrick, Chairman and Chief Executive Officer. ahead. go Please

the is to This of Welcome our outlook to XXXX, Good our Geoff performance call for our and discuss business quarter year. for conference current morning. conditions, Hedrick. coming the fiscal third

and Joining CFO. Winand, our our Relland me Askarpour, is Shahram President

message. begin, like Harbor I read the Rell Before you. to I Safe would Thank

results risks and results than differ and you, and and good call uncertainties risks our that our could future including matters on certain discussed, which that the forward-looking either Geoff are morning cause and worse conference remind SEC statements actual financial Thank file subject discussed or including XX-K, public today, operational periods reflected the in to are company's other better products filings. to new listeners other uncertainties materially, for everyone. I and those in that is with would

Now Geoff. to I'll the call turn back

I the on change Three The would our announced in resulting price years we you advantage. which in trending and products by Thank market the technologically we had driven direction. our to performance ago, vindicate Rell. seems performance that change operating both to focusing of approach our only

a XX% experienced growth a we growth quarter, revenues of strong the up X in third The ago. Generating with quarters. quarter-over-quarter quarter from XX% revenue and historical year sequential last X

to OEM customer newest production Textron. our In revenues deliveries quarter this addition, including at

lifeguard protection. We are with pleased to autothrottle Textron, be ThrustSense supplying our

ThrustSense employees, avionics. King the with overcome immediate customers available FAA Supplemental well fleets. King Air XX to promoted execute engine upgrade standard XX an on air protection retrofit on overcome business. pursuit company has with catastrophic the on of full at and the retrofit vigilant system state, Air remain Textron and our protecting potential as other system of with chain protection the XXXs of in pilot XXX Air's and extremely proud relationship and their to lifeguard and all Type and effect card against aspects new groundbreaking as supply the King is regime for ability production offer our to me of end The and have feature most joint service equipment the team existing include of the notably can virus In aircrafts We to markets, VMCa slide of autothrottle am lifeguard immaterial. protection number large Rockwell's to partners in remain On maintain I the ever focused difficult with continued loss maintenance for upsets ThrustSense industry's to has facilities. pandemic. turboprop of and Certificate adequate Excuse ProLine if our XXXs fleet The centers, expanding been process, autothrottle very a a second. production We patented our speed. impact its years this the many autothrottle challenges, we these circumstances. Corona its as ThrustSense aircraft. and for intend first this This and To fails in our twin build upgrade as

Let me for to financial turn details. it over Rell

basis were also XXXX. up morning. thank in Growth quarter second fiscal and this a the ago up from was in for quarter of Thank primarily us year million all $X the a third Geoff, Revenues for of $X.X from quarter product you you joining revenue. XX% XXXX on and sequential this million,

the for our the in both were final allocation. that quarter with in warranty costs, XX.X year engineering from margin be expense of in product indicated engineering quarter's contract, third demands. margins increase prioritization on up XX% from mainly We a an drop temporary future we customer ahead and XXXX. ago, quarter revenue the We also XXXX associated labor development resource had of a going well Gross mix, on revenue as service while product, production in a as development result to was XX% last down the the higher FX some was to quarter second from as of up of due staffed

show increase once Research incrementally primarily development increased. from an growing expense anticipated, margins expenses a revenues million and expenses expenses we the recently quarter and year Certification Corona a to growth I down bounced reflecting to year, flat operating R&D for a Internally fees trade been King restrictions have of and systems. XX% fiscal in increasing this mainly are administrative second Air ago, third the were not the quarters. from the again third mention quarter funded all from with of As was lower quarter Total were Autothrottle for margins expenses. are Despite up to the result these ago. would and quarter, quarter, have of in that most arising professional XX% back few Most up third $X.X year of like related the selling, obtaining general amount reductions past this and with year our travel the line XXX,XXX FAA in achieved operating expense, from approximately virus. ago, due XXXX

tax most lost million revenue. availability This recognized of in generated share. slightly For X.X Due X.X over $X.XX quarter we the million reported in operating quarter. or of income quarter XX backs, of to net carry we minimal with We expense the of or income profitable the per the quarters. continued XX% quarter,

on believe fund per Shahram. company and company operations remains cash million flow sufficient nine first share the and the five fund accounts correspondingly growth the the had turn as position which the cash I'd generated hand cash and fiscal respectively June operating news like year, over in debt. positive due we higher of foreseeable the XXX to year XXX,XXX of quarter date, both significant We On to for in compared to of are XXXX, has to such call XXXX. With the first The recently receivable, XXX% future. revenues. months to and in no the financial XX, a strong months to $XX as of and XXX% income net increased the that earnings to

you, [indiscernible] Rell. proprietary most as autothrottle everyone. equipment the general Reported aviation are QX, morning King on contracted of up ThrustSense our aircraft. of Good manufactures the Air us industry's revenues install profitability astronauts prestigious Thank with to standard production

safety progress of policies We and of COVID-XX our partners and in have spite achieved well our procedures as protect have safe pandemic and kept customers. implementing as that by this new employees all the productive

we health two paid with of off production employees, of month congestion April, workers order and provided in the our plant. safeguard During to to our minimize time [indiscernible] the our in

outbreak. software monitoring We have minimize risk in personnel entrance installed temperature quarter, break antiviral conjunction automated these these our have the operating up with in third changes in-between and with the and daily actions. as Rell from organization As significantly The fogging of an digested normalized our facility weekly margins facial main and reviewed, recognition has sanitization as facility the were from to conditions of at second entire quarter

aircraft production the an fact, are there be an marketing airplanes support Parallel, market contracts so retrofit and extra can joining production, autothrottle for ThurstSense in with are The portfolio Beechcraft an growing PC-XX, our case the multiple twin-engine competitive equipment potential over future provides Air they than of advantage contract their underlying OEM and engine stream with revenue consider demand Textron respective meet of autothrottle aggregate service to are schedules. general represents aircraft making King virtually is engineering. we product their entities market. beginning we owners King in of and retrofit higher Air. and Air, Boeing revenues production as of safety clearly that third so by the reason, In already hiring stated to are provide Pilatus offered to centers actively the KC-XXA to rates contract the our our continuing our that The in sales, PC-XX. represent are the the on areas for it of Beechcraft them to option. King but risk those our delivery ongoing the King recognizes of we nature the FBOs. with of autothrottle These fundamental in at important it business. consistent backlog, mitigation on the offered aggressively service. also our to also aviation Annual our package also believed Textron They are Air standard the highly X,XXX government for a

third the couple the they production it's are in delivered King for production are of and Air Simulators for training being within upgraded, King already aircraft Air quarter included have be We will pilots they are revenues. Textron all autothrottle currently which a months. oil, of

as we safety twin applicability market and to continue other beyond some OEMs twin aircraft Textron of autothrottle enhancements First, to we turboprop of our to jets. its see

discussion Textron's recent in to OEMs and believe on with autothrottle their in public attractive other transform will include ThurstSense lifesaving attention of Pilatus fleet. mentioned, We as announcement several from We manufacturers generalization production aircraft Geoff Potentially [indiscernible] standard our equipment aircrafts. are other

the deliver year. approximately aircrafts reviewing remains to quickly this program, XX our ongoing track Now program, -XX PC Pilatus on

similar program is only contract delivery of a represents believe a visible Textron X.XXX of a As the was of manufacturers, in transport specified OEM with are is with and two that are cargo We Pilatus In XXX planes converting significantly XXX. potentials on only generally the services which buying and long-term opportunity, PC-XXs potential. delivery through all, backlog keep our therefore long-term quarter we the that already now air market, carried for installation of production PC-XX after and contracts, commercial our over and them. deliveries all These channel. fraction the or

demand their Displays. seeing steady Panel of we conversion, part Flat are As for

and development attention new Navy production this now air also turning foreign start market completed, we this which retrofit could large the and data US for fly As this we the Fleet quarter. for versatile past quarter, noted, are be our FX finished we With up computer will FX the drama. contract this a deliveries for military, successfully to work

to contract, Our also our make KC-XX and continues steady to bottom production top a lines. contribution program is it

are was our New complexity managing. and at orders FAA so meet have trade the show quarter prospects. we our we expense new million fewer from added in with opportunities conditions, The our that recent travel of which as these our By supporting our most don't is King of excited have work prospects believe personnel The Rell Air. and reviewing certification the this end. business on products. very orders, X.X third year, quarter backlog certifications, was million have portfolio were of on home been submittals mentioned of efforts pandemic to material the down is X.X personally by in for issuance about will our we and impact production are FAA a timely and aggregate, the the such diligently the had

remarks. closing some me turn for the back Let call to Geoff

you, Thank Shahram.

have I and to presented we as This a of the in with pleased this that make investments the I past we must the of up vigilant--a been pursuit realize couple and grindstone performance sure for say, as opportunities very As technology. the nose will quarters, keep our that am to be and require the growing--our requirements growth diligent quarter that to vigilance in we us. personnel our

You as pandemic. COVID-XX know, in we as we're the did well performed the pleased--we're that pleased we middle of

us plant of those focus that that we the remains discussions. very this work your the with our pandemic. new our environment to in attention to impact I'm in Thank you and company and of proud essentially did for working, had our which this people change further environment our strengthening Products. Performance that plant opening in Our a it technology today. relationships the in the--from growth that the that and up of pleased created so, things Please provided the happen zero people us price have work portfolio, made organization, our and for they some for open been operator, are I'm

[Operator Instructions].

Davis David Thompson first question Company. ahead. go Please & line from of is The the Campbell with

congratulations guys, on good Hey a quarter.

forecast. to than You were, actually my Thanks than forecast expected. G&A better and got were less to your profits revenues my being

Air give King for come know that production from seems will much--how think, Air. don't that been be Airs any mean about capability. company many for compete King be Over will will views gears, can that protection you producing, aircraft so the about that You me aircraft with to the biggest I the contribution be it has marketplace? it of the don't have existing I I the like XX how will seems new years for King competing retrofit how And us around thoughts the the long-term, biggest

Well, things. a couple of

so the much all, there's large--the offer, business and a there market not engine not are large and are we out, less can First These cubs. and these X,XXX said, twin-engine no, excellent lot a is ongoing out airplanes valuable aircrafts. hell of King the Air there are single of we proven or as coming production, standard is piper more units is

well are with autothrottle in centers. why and and promoting their are fly their protecting in our around their who and by airplane is are they people So, them it interested the families through that's on Textron way, the maintained interested part in protecting and retrofit families people

still I the taking people a airplane, arrangements are and airplane Air as a think Many Air fast on strong the [indiscernible] airplane, of them King is and the has important bigger faster is them. well. King the

engine looking well. that. to twin-engine But our airplane a airplanes. GA, but makes is impossible we exactly we prohibitively We're are high not Air approach I thing do another aircraft, that itself provide King but we traditional very to don't airplane that, We aircraft airplanes, is like that multi-engine and flight the and opinion is military in performance and an So it single to basically multi-engine just and transports. airplane at ideal is value retrofit. the expensive a finding the autothrottles market the same airplane, large can air because there opportunity and advantages as real safety do in crew it's

those. Our both capable system of is of doing

retrofit bad, and So, we that I'll new and think old they direction fixed very market was advantage a we remind have stopped company our when a strong airplanes strong very to was They enough, always fix they that old past, extremely business believe will couldn't the airplanes they the we well because for formula to fast and the so work buying ones when new for us. That ones. had I formula business out was the us in worked believe they good, that continue you, get

very and endorsement. So the acknowledged and that's with we and and way enthusiastic I optimistic XXX me, good way, honestly, by--by Textron their--their lose oh, active XXX they almost the by Textron very FAA the but year and lives a support I'm pleased support to see that, and as lives, by a people, said who save a relationship

Did you did Air right. any retrofit the any, All in quarter? revenues have King you have

see beginning market. ago, and now, three to it until a, a we didn't strong, so as just it an we're we actively Well, weeks but doing STC have we We're as strong this but is are, opportunity a market with the that bunch and does we're PC-XX, everything PC-XX new provides the--the offers the real new a autothrottle that announcing system whole in features safety of operators generation our that--that for airplane existing many awareness. patented more and

revenues But the, there in in was the King Air right? quarter,

XX and ship shipped units, we've things. equipment Yeah, sets of similar XX production

And Textron now three months or than marketing were aggressively ago? being four more retrofit, they the

of They reasons. ago it do didn't three four two months for all

with sure wanted they airplane, First two their announcement. new which to of they make all, that came ago and to days they didn't that out just autothrottle undermine want the announced

have units a preparing, haven't these huge; they these the which the each production we one deal, yet, deliver This Secondly, so finished certification is to preparing. were, centers, units huge. are they is big they were of service

has an one enormous before about I stamped the they have you. up day, that Tampa oh we announcement. make X They Equipment next to and their getting give approval to hangers, in well, announcement operation. start trained units don't available They any get have think and the will do

airplanes and plant it, Nobody were So, They epidemic, because it's the that's in compounded bringing down shut other was in [indiscernible] the at the remember the and center. service the pandemic. it's COVID-XX. thing of the their

negative that that optimistic. frankly all clearing and effect, bit So, very but we're of had seeing out we're a

some what that get to I'm the, Yeah, that's right, quarter, your the sounds in reading September in like it sounds in me. like as new good quarter, business you'll fourth

opportunities. million $XXX of worth Immediate retrofit opportunities, about

All right.

So, in States the we way teams a out, in Wichita, office support hiring the the opening promote by guy center of of the we're and United had to this, Textron.

and a So, we're support. did and speed hell delighted. and in remarkable done has putting on job airplane. it a it of a good implementing with their Textron They

possible delighted has implemented more with that thing a safety this is we FAA, and as want So, the quickly they it be for to as valuable we safely. could as very are get acknowledged who

about last one for have I begin Rell. income? to question taxes taxes? Rell, will When And your accrue What the you

point, Alright, credit, tipping at unused we're right so, credit. well the have we and

end. this realize say, probably year, going will lower into next but something margin tax would the I like year will I this credit you a next year, So, But X% it be tax so that, small probably like expense, obviously year can use things so, again.

fourth expect the in tax accruals What the about some fourth you quarter, quarter?

if NOLs be our tipping think is, right it it I such. small we're It to with this. and will to point there depends,

it, will it's, if small. do be we it dissipating, So, if

Okay.

it you're for that's having, for Thanks Well, me. Okay. again doing.

a this So, great is job.

thanks support your You've gentleman, for and again been Ladies great.

Although from your last almost I. sold you, report tell all I I'll and my stuff

Go to hell.

Take you. of care to talk Good yourself. to

you. Thank

the The Please George next from Pareto with of line ahead. question go Ventures. Marema is

thanks Good morning, for taking call. my

morning. Good

question just new the a their like are for doing regarding CXs? XXXs had also of doing platforms the I doing production new XXXs other or Textron. Are you the and production you part, you

them. doing or of late you bring Their see intention all usually it's months time we'll get it matter we job they to correction and a can is this done they're is to where They're on at a when in the But line, trying it's more. do bigger to of a usually saw. time, year-and-half understand this a one than major

and to it that instant important you us, the time announcement, it's they test It's IS&S that as air what then by told going crafts, intention over another I'd at is they're and looking get from So, first XXX, is well and to the that improvement. the that the done. airplane one, all worthwhile announcement turning youtube they're look bring at that's way a it up to the was for put latest but because to you tell in autothrottle the greatest that's file. significant chief the if takes the the XXX

for company's product their at CXs and brochures, is your what if Well, on already website look XXX it's you worth, on series. the the pictured

Well, that's wonderful.

they So, do obviously quick. pretty to a planned

in longer has this totally of given grip haven't. very has showed I but professional in corporations. incredibly incredibly and when been that's hell attacked order, common they to many just Textron way business want They've the job. an a It a and really large than a I and admit, but, done atypically. aggressive in not I've us thrived it's and refreshing

when So, the and were or you of from and about Textron, just series you the there talking quarter platforms were last XXX [indiscernible] up total opportunity everything? XXXs CXs

opportunity did, Frankly, will and the staging. we it did largest a company the did, on don't those you you It's and--and RVSM we KC-XXX I about the did looked the the air XX% even We remind for I million $XXX is it, are wonderful over be built Those install We acknowledges the for retrofit market. the well. terms program. have think base of we volume it's remind, the Textron was huge retrofit, I crafts. retrofit. opportunities of What retrofits. thing all that world on may aircraft slow

we a in it looked Textron it effort joint aggressively as now and their at as fleets. anyway, install an So marketing with existing is Textron a, as and

Right.

you it though, quarter yet their talking you sort the were new last other OEM about of factoring just when about On in were production you or started XXXs? talking platforms

No, all. them at we didn't factor

the cadence any the that you the feeling year have then do Textron, next retrofit on of market for And with on or?

addressed a but it military it's always, abrupt multi-engine opening always surprise the found market, safety We're they the strong that about see We're in be supply, the we're autothrottle. safety airplane to see but is that. talking to we a the way. on talking I acute issues airplane delighted have be some of kill an issues mean, destroy variety and we going it's the only in crews. our that can with retrofit they our and Well, that

other is first this Are military inning talks of you level? at in sort or more with or advanced stages point it of OEMs and

very they there successful. markets demonstrations realistic. have to as The number not been but we're, if presume say, comment that have we you prefer I a and can that's of

this due doing picked some your like, looks orders hear. was and pretty I'm but to quarter have aggressive noticed little on been have it Corona great I lumpy, the previous And then with bit virus, up orders lumpy hiring website, hiring or? That's your all to a you're assuming new this

people usually We we've of haven't hiring, got do so X/XX a you because them a lot to of we or you and done bring done lot XX always a for that, pick of lot people, advertising in.

start It that to fit we through it takes often hiring -- So campaign to to the company. time in the the are They of months specific we, go XX start, of the got to an advance for date. people do good for we ad process and get X

Okay.

Okay.

hire working. don't them And screenings because reading we need don't their it people seeing that find we and I and personally suddenly not

and So, especially a on great job good the really some they're in good engineers. people. team doing [indiscernible] a interest we'll new and take they're doing and young real is got focus job, a They've of our

business sounds retrofit after or ramps of it the new be production? business the than for kind could you So like annual up, believe that OEM it more Textron

and yeah is think I Oh [ph]. Textron

Yeah.

production with is, double production roughly in loop the to the at production new run know you rates, historical hurry, going rates. a you're Our

market one XXX% operating, kind way have or operating aircrafts investments. of a of aircraft market are all, not significant and just you variations, XX% are they're XXX%. When potential up of there Some by their XX% the X,XXX or but they and

of the airplanes. of cost is like portion end the the not itself. measurable airplane it's retrofit more So a These of far are are, cost comparable traditionally expensive the lower the these market where

then I'll my then question, sweep floor last the And here.

to demand King of and numbers, XXX production are the XXXs you? XXXs vastly versus CXs CXs, or somewhat there Air production terms and lower numbers In similarly

so just XXX how. see got the we'll Well, released

are series. XXX or they XXXs all Well,

is them and military XXXs, XXXs, think the we're a using that XXXs is are finding XXXs lot. What up. the we and the That's going

you. Okay, thank

for use they reconnaissance them transport. for They them and both

bid. be would Okay. or I unique imagined a military, source for since a contract product, be sole to you very have

that? was What

unique could be because source a your products contract? I imagine military on a contract sole

its a to patents. it's going about we enough source, unique that by be covered X but sole No, are

and forcing is, X,XXX. enforce a to tend Our average patents bidding we bid and would've So, it our we our been

Yeah, okay. Very exciting Geoff. Thank you.

Thank you.

Joseph question go the Lisa Retail. The of is next line with from Please ahead.

of quantitatively the, morning. on future. me quarter great for what and for help bit kind for like I and projections you sales can a you excited for and sound would Congratulations am out very Good I to the, if you very, on quarter excited very the know be you for Thank sales internal and expect ramp fiscal going little quarterly would you. this next what your what forward? year might for

We every obviously in, about not that either make do of a with it, or a habit virus predicting up on ground. because end XXX sitting we time probably are we Corona the as airplanes

and So, our business we're we on is retrofit next general we that of the want aviation. military internal commercial we tell get down quarter, can estimates, it don't don't, to all. go don't ever you other both predict it I because, good We than and portion as

shareholders the only our to only, that's So can then up we going way and keep try you we happy. keep

So mindful that. of we're

have, would it. big in and number job, our opportunity that look realize take the to million. Our sold do there a long-term our I'm estimates are we sure yet the Can is if $XXX X and one of between you share system will fair that fact to in market not retrofit and end. we say a $XXX at we is, I have is we that XXX those

me that color multiples be did what and your backlog the could sales of you that means? give you on to perhaps Well, mention you current -- some future to be expect

backlog what know current yes can our that. is, Well, tell we we you

I judgment that there does with tell The as competitor fact to areas. no Out what opportunity, can we we believe think and it opportunities and rely exploit our that, other is or there unique is market is exist is market on you valid. to pleased very whether Our and in we're we now, we around have a product judgment have on not it you somebody only our else's opportunity want

be going As world aviation, it a the has market that of to to year, doing sometime two have OEMs tell acceptance you you get general one idea in retrofit should we're if we expect perspective largest in how better early is penetrating from achievable. an the what; market. I'll gotten of retrofit we probably by next quarter the one

great. Okay,

go, driver take of the filing And and what the business start main I've the terms which to tried to company. since is stay profitable I in do

Okay good thank great, luck. much and you very

for interest. Thanks your

who Rick next please ahead. is go from Private The comes question a Investor, line Teller of

King have quite backlog to potential I a million a the morning. all I know then and think $X.X standard you listed I that Textron guess what Air which was as drop, they some say relates orders, pretty but them I that. and production you'd high. future I $X your that accounting and are couple added language listed is to a think orders new and this name releases were sole-source excludes of the that I and This, you've of, or good Yeah, million as forget, questions quarter, third fact they quarter were last $X

and that orders or counted longer Air is new correct? some new orders mean the fiscal second backlog, King does now, for XXX, quarter, the of that that So, therefore no included in the your the million does March in be $X.X quarter in orders and

That is correct.

Okay.

in kind rate third We X-year the a quarter not get and it's of, way the new those order, that any second it orders not receive quarter, received you it's in That's did of run it you work comes to like orders, we the get. and doesn't but intermittent, goes. point

depends was all them. As up it maybe in you quarters so, to or about, get Shahram advance two talking

customers their a on curious lot us get a a see, have will hey training they says will who customer it, then centers I accounting they business and of do customer could they us? because or how so my who is older retrofitted have I Textron for ordered a they then already in until centers, retrofit we're products service King want the this, handled retrofit from Right be this on service from going if says the I'm also, to okay, now Like Air, the if all let's wait order and might bring want say they

retro, the for but we anything would that that. them do to we delivered haven't We anticipate

to, to the going delivered more units you put what us indicated, the have going number I I so a if to We're that's we've in production. you're and understand start did it there, exactly XXX, obviously when As to mean have. have say, deliver it. or and tell do to beyond we But the XXX for they XXX expanded they as and of

I'm sorry, what? you said

you said you Well, [indiscernible] said mentioned, you

No, no, a category no, [indiscernible] have don't I

that. up I start, of anyway, in get amount they will understand, imagine fair a I and to understand. time And going, it's can you if

be going So several and do I in, quick come and it's autothrottle that. retrofit aligned. to we say delivery production and support they to I to start airplane months stocking I'm a probably my or get to would like take before us say the would their the that will will hardware in put bringing People they trying

at now these from that Would Okay, but keeping is let's they've got say business. point? somewhere, inventory at and getting year what I'm a service steady retrofit some they've be hand on level just of it's some centers

or sure these States less sort they to service centers estimate one takes in it and simple a about probably United install a week of and I I'm XX an did that autothrottle. of have what, install the to

month. one retrofits have that's probably centers several a hundreds but centers only XXX you one would year So, a they and people, service any did the at and they at rate have, if of month, do have a

Right, okay.

would to, when does it center we an counted view, ship from have Center would just and get when they sales it I and does in our presumably, to accounting inventory then it install service only they or is point that So some the it? of want

show but to If the center, as their it the the move ship it that's we revenues the to them, issue, we ship [indiscernible]. door. when they it out no, No, service to

Okay, good.

how to to And handled. trying sum a all be autothrottle they to safety would just the insurance Air just was question with to the in companies paying the if even a that's I accounting. for pretty that figure nothing I'm out that King is, the in small the that So insurance to weight get go where hefty curious just has -- of trying understand to going do aircraft because I'm are, reflect discount charge there on whether we then autothrottle. benefits a owners, at and fairly a big I'm premiums insurance

about in you overwhelming setting, alarms you an alarm your be for you may now over a paid XX-year Yes. do system. want period, fire in insurance fire just and it to but Yeah, not thing. damn house, Yeah. in because recognize or the the an put you It

I Rell yeah, a a guess happily been the weeks. within is, of them. of the contacted for has asking them and have couple So the underwriters you absolutely and last meeting Well, insurance having right, you're we're with My weeks. couple might, question I and company

I program. you assure he that, the that understands So

Great. Great. Terrific.

you Well, Okay. thank so much.

Thank you for your interest.

ahead. is question is the Friedrich, line Michael next Private The also who go Investor. Please from a of

had a call. the follow-up question Morning, in on of sort everyone. to question I question earlier an

year, prior it the that quarter's back as just next that Geoff, I OEM year I the revenue you think, the much be was think, going notes, mentioned last as I year you that thought the as prior of think had may sale. early

ball like I understand Textron to what I saying, saying only might in additional with that's XX you million that, Air you about OEM to Is not were from Geoff, approved. be productions King other just the make correct? When parking existing getting three the want business you that sure any you are talking were XX the OEM once million deals, were range. just somewhere So and

things. Two

I of would not to believe First million. I'm OEM that XX our--that all, our sure, demand would like be

being do tenure moving optimistic our this a be in at We look XX, the entire to We other be look aircraft sort you. the could going that own steady I airplane it's We would business, this things, was production I who's aircraft, larger It good million up line we the have, business, next more I their double-digits. your production XX light could of although for pandemic lot if as it and could worrying next year think is among people think in back the people it we sitting because get and X, to more comfortable retrofit. be sure. expect airplanes not often flying we about be will think I'm and should the be of into it. be we be, kind

get sets XXX that's private upwards we a Anyway ship to that a about desire double. going a you're if the aircraft if to could be can. OEM fly to talking there's they, maybe level do a like if of year be and do that, they So full and retrofit, it if production,

Okay.

Okay.

aircraft, do very to early they this get is we've ready the production our still some just we've on got, their other to live, Remember, feed certainly, in first line. and to aircraft the got the We related is game. it on equipment but just go work we've just production to have it

up, in there. months there So is multiple it of takes delay

know And Okay. just Okay, the ship production, a PC-XX to I year. to sets up XX over we're

well took you number could term that point a guys that their that some year. you any--any you idea, is be the as what seeing XXX that that--for keep think up. numbers, the should many have Is number total you plane, is I goals maximum, look did think I high? or it it Do at longer what going as at a for like if are too if

doubled manufacturing to the They been expenditure brand number [indiscernible] obviously size That's It airplane. that facility, a in go it's--it's a turboprops a expensive, more of performer. for of built level, significantly facility. remarkable there their very facility replacement it's--it's huge They it's that and possible, but and some We've virtually entire facility. could it's remember high-volume to times up well Switzerland. high a new a it's their

they their, good great and XXX, So Hiccups, are and whole and want cautious The expect doing to they they are, company the don't towards it cautious. they and doing XX job. a are smoothly get but up and now don't they go, it's to deliberately slowly, I them a airplane. XX too then creep sensibly jump want moving is quickly Remember, and would they

Yeah, it sure it is, sure is.

Okay.

the By we it I Air is love anyway. too. a got We it. Kind one, way, love airplane great

know that their Yeah, as fall, own the sure you piece that, with the fall production competition Geoff, right but engines, idea no have really the, you for on I on I'm now multi-prop their developed new on like autothrottle well? Pilatus has

an clear, It's autothrottle. obviously not it's

alternative, have and two didn't settings, crews by it's, with & they develop Pratt climb. the that's We suppliers way an had Whitney and it,

autothrottle and that stuff announcing what, the patents way oh, and is we're by Our great of a before. series a deal never of existed

as into that oh, would and that you referred the the autothrottle way XXX is towards not airplanes. retrofittable Our by that, focus

Beautiful, beautiful. I like how [indiscernible].

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your I how there, can I confidence. like say the like I sound like sounded I

that, that's. So let

airplane company wonderful public. weeks I I bought before took Pilatus mean a kind I we of company. the a [indiscernible] three

airplane, richer like deal. you this you fortunate as very an an been a a him nobody you've say and incredibly gotten but have would customer. bought airplane has So we are good to great It's

yeah. Yeah,

you thing more let then I'll Okay, go. one and

is working of guys Flat Display on the XXXs So yeah, area on I posted I and XXs. worldwide article Can are are of all opportunity the you discontinued the this being idea more question me you you an that know the with Panel renovation an and CRT give and you is a remaining the about area cockpit how think in guys in instrumentation that? and Lufthansa of still

with Lufthansa not on we're not, working No, we're stuff. that

Okay.

is for retrofitted. number be are there XXXs are successful What to [indiscernible] There we to is, seeing, us. finding to. the Obviously, to still Yeah. remain applicable a remaining, doing seeing, we is a that more we And sales system more are about direct, is, that carriers. of huge direct It's need we there the, [indiscernible] become is of quarter, as and way, declines more offer spend huge advantages. for are two competition does age, an old have those and on we which want we it value are as people could we equipment delivering the, don't airplane airplane every expensive of the any with lot do, the significantly By to delivering we a is money the constantly, more platforms. we are

record can a week, of ground. days. besides costs aircraft matter It put competitor installed day a in less $XX,XXX reliability to the five be a and incredible having performance month. on takes a of than or an and Our a retrofit between transport somewhere system four also The $XX,XXX

why So a actually fleet that position we ages. it as you should reason compelling gives we improve our competitive should,

right, will Hopefully, All Great. and lot congratulations. adding a keep the of fire. I guys. in Well, Great. irons more

us. Thank you got our out We very for work much. cut

care. Thanks, take

Axiom. line of the question ahead. is from Craig Rose Please with The next go

Hello guys, all thanks today. for the color

you market the is Shahram this said opportunities. also of has for the Regarding, retrofit Could and target name understanding for Air, retrofit Textron for that mean mentioned highest other next twin-engine an exclusive jets, right value specifically you he now the that application biggest the turboprops? on King does

Eclipse we finding turboprops exclusive an Eclipse and the have No, and X ago. autothrottle take, we're they almost do don't on generated the for that years can we

now way So, selling Eclipse. the equipment upgrades that and to software for by

Primarily how production do engine contacted and and an us people that know to have So their retrofit, primarily potentially interest them in and a turboprop, we putting both turbofan had but a we have expressed production. in

our as a other we we of enormously that operation tens There aircrafts also turboprops. autothrottle. them identify area. in in thousands see that traditionally are, So, expect, of could right benefit We'd market would--would from of and but rather are there now in sort not it you see multi-engine

efficiency on speed As measure airplane maximize and an the adjust actually for in example, of real-time to longer mode the we endurance. now we were something pending it able patents its to have our of do where the and airplanes the

ever only done have that people So works. it that we're and the

and do that surveillance very interested reconnaissance system people this So in are

question Okay. or two. An additional

You mentioned you and military assume when gone is the the the I up Air branches one military you've add largest King of all of military. so the in fleet operators the

it's know progressing those of kinds is, we've I opportunities how people don't and is DEA know of various and to There the people like I understand everybody, with there. has already you we're somewhere, versions them. it and of talked big tenure in a everybody but hundreds them so

in. interested very they're So

lawyer working that an and As care seeing flies keeps guys. bad a it DEA, takes Well, for we're of crew example, around safe.

So pays it really off.

to would significant identify by way going of I I So, a know specifics. prefer really pay that they yes, quick. optimistic we're really, it's to the not get I I'm--I'm would their business. there. amount but military

That's great.

mentioned to is to [indiscernible] awareness really previous So really, so think and mean does question probably The that everyone it your of I'd great I company and industry name the think as I important. you insurance now, your FedEx? What heard is just with The meant compliment like Amazon. relationship what lifeguard guys Rick that. you cargo has with air on has that new

supply Amazon are you by equipment. again two the, from XX just a big aircrafts, our of leasing And operated let operating is those operators know it Well, we fleet with

So actually been downtime. that We the and I on lot of as But with is small for that's would an expect they ever industry. because XX were we the around is a of done, going what's never modify Amazon fractional, themselves. once, in in said, able a there airplane is operation downtime operating hours be history to is go the the Where on. to it rumors it

we outstanding. as an the So thousands costs of There proven, numbers is are that actual advantage and and its are that of get we reliability performance of have hundreds hours reliability.

had have equipment seven we're So, to They get to I would be bring that try opportunity can we diligent delivered strong to expect remember going they be that, to background FedEx But it hope when grew. that I how a I XXX now. we'll in. just and little it a give to when airplanes. you remember

Great. That's guys. all you. Thank

Thanks to you. talking Craig. Good

ahead. Herbst of Capital. question the Herbst Marcel The line is from with go next Please

reasons. a at thanks taking into obvious I How my you trending quarter progress and to and a orders pick the July. the up on a orders see throughout autothrottle. on question. the strong and down you're making wanted all? up the follow Congratulations quarter has all for morning were which on for Good bit Do your slowed

lumpy. making have Well, a as what sure right If we optimistic anything, to a big continue you right I'm is profit. make Clearly, We're--and now, we it's we we a market. it's we bump. we're and imagine, diligent. to or but order there about can had an expected, that committed is that Right product the are it

to we that whatever try time. do the all That's So we what takes, do.

mean every I kind be predict trying produced planes aggressive an get Airs year, Right. a I of commence at many it to And if estimate? that be how of too I'm to a and might would King year. also XX or XXXs sense

to XXX XX I part the about know, Well, is right take times. XX Ultimately, obviously The production XX don't and A production. their initially XX% would XXX over upgrading but the fleet, guess the of now. then would I is large what is now and I for XXX XXX the series then expect of

many? I see. how know Do you

airplanes. XXX. Remember, other through system. doing to we're they're it a already one at get a why That's it commitment doing time, they But the only to all whether focused it's on task made the on the do retrofit. airplane a They've not to are monumental

in once a line. got be the easier and done, XXX follow they So other which should was the one then one, should critical

Right.

If they you eventually look at are models those to many produce airplanes do that here? how to they committing integrating,

autothrottle was. going so and I to the I'm the they it on XXX% they and it's put CXX, committed their mean are this of is, Air. so ultimately is they whatever put position total going XXX, their is, that King on to to XX already thought saying their figure are there if Well, it the that have production the retrofitting talked the is, XXX about on

that know. I how So happens, don't quickly

right. Right,

look produce at XX,XX, in XX King they So you back typical if year? a many Air's how or do

They might, it depends on.

Roughly about XXX. a

economy, it's we going retrofit, and to a depends is probably it so the be Yeah, it said lot more. on a

right. Right,

taking much my so question. thanks Well, for perfect. Okay,

a airplane. King great is

programs, we're proposal We we military so with military, on speak Textron expect frankly as teaming a I think. to the

to That's good hear.

is and response. and So top this very very getting, and quickly. is is, that's very very a, their along moving management of this We're it's visibility top responsive,

Alright. Thank you.

Thank you.

is questioner Derek Abott with Downing. next ahead. The Please go Bubble

on forward, congratulations just looking long really exciting time and amazing opportunity market an listener, Hi time a gentlemen, caller first quarter here.

taking my questions. for thanks So,

you did. long for hanging as as there Thanks in

pleasure. My

about King Air, million worth have retrofit you of pardon? looked, the Opportunities for immediate So you talked $XXX

Yes. market. Potential

you. Got

So other that? you military including looked have market the and the at total mentioned have because markets at market around lot any addressable the total addressable you you markets, of numbers a is looked

of tell we I'll I jumped I'm you always portion if market be reluctant and to on. do that King delighted Air would a could and get why. almost our substantial I

be our size, five whether people if of that. prudent keep airplanes, we other kinds the So all not go [indiscernible] can the but our we after four, market penetrated judgment, you the times it and to even or so and that is whether estimates restrict probably we six are aware the appreciate to want in

[indiscernible] and over-delivering. Yeah, promising that. definitely appreciate

up, But, our and very point it's with If on look says this would XXX need at opportunistic. to been It's it, we system it's, we've may setting [indiscernible] to we out need some somebody reasonably and applying degree it's been them comes it. this, lucky very autothrottle and there adaptable, that that of scalable good.

partnering spot you the strategic huge market opportunity, a meet you to great standpoint. the What with sure in to this exciting. given from need? have and you, impressive a I'm have make about up strategic potential be absolutely and that can partner unmet curious, thought Yes, size a

it look a with we best Honestly, as Textron rather than the take probably another airplane OEM another manufacturer. potentially way another teaming do and to at is

to high hard The think they But, I throttle, other just really cockpit I'll I'm to than see don't happy teaming if them I as blunt for just are, that's don't, it's had expectation. a support it's I future. to and as the a as it's my of they mean, could've other are so delighted sell terrific. be the may with they system to they I near that want come and manufacturers, Textron is you, formidable, be need with lot us for autothrottle. just, working I that

still class you around you are that? that any to bit excellent. little call, over aviation. trend first on that and still, are could numbers have commercial about year-to-date I'm put shift a Excellent, curious, and private been from business then you last talked you How seeing a And through seeing there the class you are

called a Take operate over look country. company the cash, all now XXX UP. Wheels at they got They a airplanes

That's Hundreds. a lot.

are buying And PC-XX like they're Gangnam and [indiscernible] style. them they has

run, at and I If to need more an I round going I'll more I get the So, to $X,XXX say, are had trip airplane them through for and go spend that I me to wait if California, in could look trip go in over to it to don't people looking terminal. relax airline and hours airplane. and have two-and-half spend get will on

reason complex believe airplane people to there have all were eight in had I together commercial off Beach or same ago. three the and reasonable jet a days the in friends costing they, solution. as first-class to on the got they it getting a the of to They from months and Philadelphia matter but a put it's condominium come they and convenient. is Palm some forward So then anxious there three turbofan an a a is take with up ended pandemic chartered lived and that increasingly, roughly ticket, were they that about eight-passenger same area there's lot up two a hell them also to a more them and of

and it. That's appreciate really color great

Okay.

for stock some some and market so some for investment So shareholders small private calls, last get do all minimum on investor, this your investors we active large the opportunity least, that have for an current significant your can more from I and a work just would because you too call drive would for the increase what the and is an a give it's a as on out yourselves. institutional I that on probably, traction share in be if additional then Investor the then Relations calls coverage, options of more from not things standpoint, FactSet, institutional liquidity additional purpose just recommend sell institutional and an can three probably then institutional would you going, but and get get from your Trade good but maybe additional in some those drive volume would conference standpoint get and what your--get price an would together [indiscernible] side is that you maybe some get campaign

some a So Not just wanted a in forum to lecture, give you public but suggestions

the appreciate I advice.

[indiscernible] We company. times we've had actually We've we profit. am XX% oversell generated had where at to some are, reluctant wonderful times, an the I after-tax sorry, least net

also it. yeah, you So, behind is vulnerable keep can't wonderful, was but that if supported

conservative you don't had more to you a you bit be my got a the deliver [indiscernible] good that things trying estimates. pretty in I'm I've to over circumspect. can't established little luck business, a don't practically promise and We want you business, want the I'll know retrofit years, oversell there, as some be street but probably I'm past to When well then again. So

He about this the aviation, Fair enough. fantastic of and to developments wonderful a everything airline here with done you've the thanks you've fantastic who running a the thinks Well, board on done friend job, product. company, is I one of have autothrottle. pilot, history so he's be in excited job excited commercial job it's Geoff a for incredibly here. greatest really and

promise, I it's, actually boss really had And words. try all to director we'll I you a build it. my it's and kind and you your him, a you his for Thanks challenge. deliver said who of he integrity is engineering what was business, the when would said want said do doing on I told would head promises [indiscernible] do, to you but

about think that I day. every

like We our you need society, in more people Geoff.

not That's good have Not say, you sure day. of that. a to you

Thanks, you too.

We've Rose got, is Craig back.

of Craig from have line one We go of the Axiom. Please question further ahead. Rose

follow-up One question.

safety helicopters planes terrain what on their You to not that happen the, the the this of and odds have what get could recently did on in size charter similar fleet. feature you did Up to the can they do aircrafts, the awareness and seen mentioned FAA there. we Wheels that with are 'XXs mandate What with all and

So what that? of are the odds

having ourselves. us. the I very, this there been terrible with other it a situation true it not difficult a developed I [indiscernible] me. a is notable. it just but are FAA done a developed extremely situation there guess with, I We're implementation. Textron's people that it's, assume airplane, bunch I besides that it's think think got We get that, I proud. and I'm, and had catastrophic selection very mitigate for product product that. unique it protection, a confidence did was first Look, supportive it warrants sadly and market They be. were is a I have strong if we was very things. if and used I with was to knows I you to of it's that and assume there does we pilot, an have were I we to difficult, It used when develop the Of it's an this, guy, and me a And Trust very They a approved it it, safety airplane them. They gives think sure we they're presentation. airplane, that's for we think I'll of Textron's for it's think out, the never any where do and have especially engine if people it something you NTSB all straightforward. slow take could whole VMCa before. the kinds acknowledge that's a of is was things

as if put implement So, almost you I'm I've the this, can hoping supportive in the they that and FAA pressure reluctance I can NTSB of to that do, the tell this has taken certification on targets. [indiscernible] I has they equipment, appropriate the been think [indiscernible] years. six

feet, I a drag possibility. career, extremely mean, they've did, an job As I've never not did they so admirable I they heard it's but my and think did in or thorough, seen their done

up, that to you and all I to their happen, have get dues but think is will can good our that there's if and a that all to end got it's reliable person's a it and possibility plans save good pay show we in we've make that life the difference. one

you. thank Great,

you. today. Have We're It interest a appears joining the to to Good your talking the off. Take care. signing stay luck, day. We in discussion. well. us Good be end good appreciate of

has conference for attending Thank you presentation. concluded. today's The now

You may now this disconnect.