CPI Aerostructures (CVU) 10 Nov 192019 Q3 Earnings call transcript

Good day, and welcome to the Q3 2019 CPI Aerostructures' Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Jody Burfening. Please go ahead.

good XXXX and Earnings and Aerostructures' to Sarah, Quarter Third Conference you, morning, welcome everyone, CPI Thank Call. in are A press copy for call company's release earnings Relations download available and PowerPoint of of presentation accompanying website. the the the Investor company's section this

and conclusion a call Officer; of remarks, will morning hold their session. Chief this Financial Chief the Doug McCrosson, prepared Palazzolo, On and Officer. Q&A President are Executive Vincent At the management

involve be which and call may Included will from modify the contain uncertainties government's its to requirements are budgetary a other in unknown projected for government's doing as risks company As and at this and any the to terminate time, right statements, business risks, well contracts reminder, subcontracting conference cause process contracts. forward-looking the the actual or materially contracts, results. constraints, known with for factors the its government's that company with the competition or ability bidding reduce ability bar these results in suspend to as from government it its both to different

Subcontracting its if fails customer constraints. meet customers their requirements to ability if the or those contracts modifies it due of contracts to reduces to the with or also the the contracts have company terminate budgetary

during these listeners call. to made Given this statements be are place not conference undue cautioned forward-looking uncertainties, may reliance on that any

filings the Additional the risks information in be and company's with concerning Exchange these other and Securities found Commission. can

like Good Doug. McCrosson, and Officer. President With to morning, the Douglas to Chief that, turn I would call now over Executive

remarks modified guidance after provide opening detailed our the performance to results financial call today's Vince review concluding Good of of line which before offer for recap will I'll our morning. quarter. Thank start Jody. will some XXXX, financial a you, the questions. for I a third then with and

of advancement for on exceptional operational our to very growth, an XXXX. quarter are We priorities strategic pleased strong report execution and

pretax income each and growth Slide based count. X. robust the year-on-year EPS highlight first Revenue, with exhibited share earnings share to Turning on per higher on

of backlog. another and reporting also sales bookings new strong product are We quarter

The XX of and a rose months. X.XX, was and consolidated a quarter million. to this its greater the on past over $XX.X stand-alone backlog book-to-bill ratio than basis, book-to-bill this X.X:X, X.X had quarter WMI, it's

Including increased WMI, consolidated product June $XXX.X sales at at end from up of $XXX.X and million XXXX. $XXX.X to million, up backlog the from XX million

We advance third newer namely term, during continue with the strategic long quarter, priorities the for including Lockheed, Next for Pod key for our an our these Rudder are steady progress that customer to XXXX over Jammer structural the F-XXV, to growth on advanced making Island unidentified programs and missile rotary for Generation for a unidentified assembly aircraft for Raytheon. Mid-Band program Assembly the Sikorsky, the an an wing customers

upfront We've on XX good when start most the Taiwan and the to we strong. aircraft, progress placed been approved On forward world's to close it continue which aircraft. expressed to fourth-generation to has make with engineering is successful assembly And purchase recently, fighter F-XXV, bring interest in orders the just that tooling. suppliers to International was combat-proven the orders demand early F-XXV has total and would we fixtures. very XXX load for XXXX look and manufacturing, to reported

the is more One advanced program. of our exciting programs wing missile

and that support test in We our every delivery program. are of say milestone met pleased have to we development customers'

make been changes, customer sets with working and We this of to technical of common our several have type. and have delivered wing producibility programs

our wings more a that expect enhancements to the of We for new order incorporate end design before receive this year. suggested soon

Turning to the Sikorsky platform.

technical have our WMI already customers' date. secured both platform capabilities Aero We a satisfaction and level has platform a leverage our footprint. work CPI Equally new work for important, XX% which the for have more the with expected of WMI's that total on work to about of this delivered on on we quantity ability reflects to

and suppliers manufacturing have of And article, develop orders the place we Jammer test from to SDTA, Mid-Band. in Next support system begun Generation or finally, phase plans development of and the

Raytheon, the first of third track complete do order on deliver SDTA delivery counting are $XX-plus we within months quarter us just customer, Pod Our to the XX and is thereafter, million the and in to XXXX that. on

our see These listed as order on programs to in slide. continue were flow, programs in we reported Finally, a quarter. this about factor these I'll this a highlight minutes. say momentum achieving X new record under backlog big more in few

backlog record quarter-end highs. defense as backlog. was on ago. Consolidated approximately years backlog The Slide are Turning X just respectively. X. and at figures WMI's Both increase to of this million These million, an is inclusive XX% defense is revenue of $XXX and $XXX from our backlog are measures noteworthy,

we a backlog revenue of performed. potential the slide is be As expected over reminder, on recognize this work contracts. as remaining life is revenue Consolidated depicted recognized existing to

we've programs will our these just the Collectively, for defense that defense key past platforms, fuel account XX months. the $XXX which of military in beyond. our XXXX and are most contains over programs X the announced growth million Slide backlog,

I'll awards. highlight Starting the third a from T-XX. few is left of bottom row, counter on our the the most recent

indefinite kickoff Trainer the after components program and U.S. held of of support the Aircraft. in with second announced meeting T-XX a We quantity a the quarter, $XX.X contract the to Just million we kits delivery, close indefinite provide

that September, orders around in where we place to the Force Force were Air provided during a million $XX expects tentative Air indicates U.S. XXXX. in demand profile

are $X T-XX more estimating next or year's than is we revenue, XX% that was it revenue higher than approximately For XXXX from million. in

STDA. Jammer the is that the next right have new on production We phase. system enter announced work called the to the the Mid-Band precedes this development C. passing required Pod phase electronic for to warfare STDA of to milestone is system panel Next milestone begun we program. recently the C Generation all-important one Moving Successfully

Aero of of at valued Raytheon million. warfare approximately a Aero development CPI STDA closer CPI the With is system. us STDA, electronic award potentially vital relationship completing $XX our with The continues moves the excellent phase for and to

received the XXXX. in more that XXXX starting first We are begin could in advanced further phase Deliveries of estimate have million $X start August another XXXX. in or funding and the add in $XXX half to ended work. to expected production of We

the Air the Thunderbolt up support million Air of Next, that awarded few Force to selected of Earlier major by of to was X A-XX this wing. to maximum the us U.S. a We manufacture XXX manufacture a wings announced A-XX. worth Boeing the new $XX a year, subassemblies sets up to weeks back Boeing new for contract aircraft.

late delivery the initially will new we the four assemblies, expected chipsets XXXX. of in Under produce of contract, with terms first

were to of we to Boeing of new will contract. the remainder portion new you on a the rewinged major that A-XX during not is recall, intended the preceding large government the supplier time the last fleet contract wings install This many of upgraded fleet. the As a were

manufactured manufacturing we under orders were by new our us subassemblies prior will the The be contract. during

for extremely cash meaningful starting are profit confident We flow program in will and financial fiscal this CPI, that good XXXX. with deliver very revenue, return a

Generation that prototype to were a of Jammer A subsequent program. lastly, in addition the And Next for for produce the to start and we new new close different Mid-Band effort. Pods from is us the selected for Raytheon quarter, to

million tooling manufacturing develop have services, totaling to $X.X approximately engineering received prototypes assembly produce We orders and in for provide firm XXXX. delivery

no admission program, this details of nature be disclosed. the program can to Due

that quality say the the within to role is can what for we Raytheon this work chain. of we their new valuable do However, award play supply the speaks and I

revenue-producing We largest years are very programs. excited to our this believe about program within potential that be and among several this new has the

our now and guidance financial me to and Let Vince? Palazzolo, turn who remarks. back concluding call modified modified for you results the quarter puts then CFO, come the of for financial our I offering our guidance walk takes the over before review through XXXX. Vince to will some will

XX% quarter subsidiary Hawkeye Thank begin Slide quarter increased you, WMI principally our million on million contribution year-over-year and Northrop by of XXXX, Revenue $XX.X Advanced third third Next programs. from from Jammer the Doug. Mid-Band our for Grumman Raytheon X. to Generation the the review $XX.X and E-XD Starting of driven of results. my approximately I'll

the $X.X in SG&A an to third included in XXXX from operating of $XXX,XXX the of the same million additional have period the in prior increased not year profit period. million. for last the prior from for at quarter to expenses XX%. approximately $X.X flat quarter did third year Gross improvement SG&A $X.X was WMI million we period, compared that

income approximately tax the quarter for XXX% same $XXX,XXX recorded quarter Pretax $XXX,XXX. We the in of increased third to year. million period in the from $X.X income last

received last the loss to related our from in our call, the recall disallowance second the As quarterly earnings additional carryback. information operating net IRS of we you from possible quarter may

in results approximately year-to-date $X.X information, we an uncertain reduced for tax this credit of the this tax the liability XXXX, on related period. second in which quarter million by Based income the to position

shares $X.X third XXXX Net quarter or of following share a million $X.XX number compares per was income per for year of This diluted $X.XX our on $XXX,XXX public share outstanding income offering. to net the the in or ago October period. XXXX of higher

pursuant was WMI. cash Slide of the quarter-end restricted highlights escrow this $X our to on of million. balance is X. sheet and acquisition in September at to Cash $X.X Turning cash held XX at on million hand

in since to June pod Raytheon contract assets increase some year-end X had were on $X.X $X.X Next as was Contract commercial an that shipping. delays program XX, increase inventory million, Jammer December The as the result of increase the increased an XXXX, XXXX. XX, assets million well increases production on compared to Generation million with $XXX.X of programs compared and in of in

debt at stood to compared long-term XX, at million $X.X Total XXXX. $X.X million December

quarter-end to million line of outstanding XX, revolving credit at December was balance at compared XXXX. our Our $XX.X on million $XX

$XX.X XXX, XX, out $XXX.X quarter-end leases. we sets Shareholders' million treatment X, at December equity stood XXXX. of adopted accounting million at Effective XXXX, ASC January to the compared which at

we totaling million on liabilities As lease lease recognized $X.X assets a XXXX, million. and of January result, X, operating operating $X.X

a periods. elected accounting recast prior does the balance have material The XXX statement. of with accordance adoption income In ASC comparative on not standard, sheet not our we impact to

Doug XXXX Slide forecast. modifying full noted. some revise On as converged factors, positive, this caused we our year negative Several quarter us has to some XX, are our guidance, that

earlier the surge year awards business On recent top-line cash record this the planned. as backlog improved outlook, start new our consume originally than in we'll more side, on executing but our we positive

has other business legal WMI operational, previously financial to forecast. than resources the hand, on greater execute its On plan and required

at in from the response steps have in to March. operating we taken We a single observed shortcomings since facility decisive we WMI have began

than management. the and instance, CPI software of enterprise in helpful delivery the on-time more in WMI operational financial should effort system by the extremely improving system is and planned area For to of the inventory we be accelerated X and months. This transition performance, particularly complete

reorganized will strengthen which structure, support the also centric personnel proven program with believe have our closely and we resemble customer WMI's our We relationships to more improve customers.

these steps made it believe that that signs manufacturing at track should and seeing WMI organizational are making changes already we've XXXX. on progress. heading are into We We the get back

working adversely WMI's operating cash I'll the is has a of flow between us moment. been subject affected performance as and that a the CELP, capital deficiency current the in also litigation discuss by

lower the was to for required get large Specifically, acquisition received the line to production than the value represented, inventory inventory moving. which outlays of in cash us WMI's make

be now compared revenue $X.X $X.X fiscal XXXX, to million million of XXXX. Pretax use to as we in million a of $XX.X $X.X compares this million An fiscal fiscal to a For flow aggregate cash income $X.X of XXXX. to for approximately revenue as - approximately of million cash compared anticipate of in $XXX use fiscal of million of cash compared XXXX. operating

half the to income expenses to lower-than-expected working to WMI. and guidance sales recover all targeted the lower capital at adjustment legal on due pretax from adjustment higher than cash is of margins WMI profit accounting at of from resulting About flow litigation guidance and results the adjustment. lower Nearly to

The CPI. an related the working at new other to capital program in increase half related starts is to

the in Finally, escrow Subsequent affect seller XXXX. of million of against at to to we totaling entered Of XX, to sat this $X.X the million. settlement related into a WMI September in new capital dispute adjustments net working of litigation $X.X of positive amount, the the released us balance totaling is million end If settled for from was be the our approximately the of dispute adjustments favor, quarter, escrow. the position. balance the would our $XXX,XXX to cash $X.X the a

turn now commentary will to I remarks. for Doug closing the Doug? and quarter additional remarks. prepared my back concludes call the on This

Vince. you, Thank

back to factors just and realize we acquisition of of start benefits detailed, of WMI control, we at did not Vince outside that financial due the for the hoped the both As our inside XXXX.

the thesis the to acquisition intact and over remains years growth However, the remain coming strategic opportunities behind value for strong. the

and not contain by the the electrical for example, details we welled but For wiring produce also internally A-XX assemblies Boeing be produced just that will structure, now on WMI. can

proposal that the how Pod within an make even wiring electrical to integrated this our of bended electronic a that but manufacture to assembly can bundles two and are assemblies Likewise, valuable These now for manufacturing and contract examples acquired expected internally customers. contains we us tube keep more dollars of submitted leveraging capabilities just newly week, more be we is to CPI.

is that And team as Vince the we the said ago, envisioned deliver with are entering in processes a right WMI and very moment place them. confident we acquired when XXXX returns we to

structure As to believe defense competitiveness. and on inflection year with business an better we and an we the our point that approaching fiscal growing aligned spending the our backlog are we in supported priorities, improved look business cost development ahead balance of by and are XXXX, into based efforts

XXXX without on fiscal continuing as approved is defense started levels allocates or know, and fiscal programs the without programs by no As resolution year a at an being on what the most cap a obtaining funded known budget waiver. first funding new CR. you CR XXXX DoD X to of October spending continuing probably is and

future down operating shareholders unfortunately standard to our want the our still this has plans. see While affects CPI procedure know how in and headlines become this Washington, in

business In current we not do that substantive CR our all. XXXX we And impacted a at unless short, we calendar our are extends year expect under to the fact into a XXXX, CR not well results that a change XXXX have plan. has

new announced, et Re-Winging, we Gunner as HAWK phase Next Generation A-XX several Turkey, such was used Doors start and TRIM BLACK from the cetera. to XXXX Band, SDTA to Pacer years Classic, T-XX the programs the prior or Funding for Jammer and Mid the

any in there March that on slowdown We quarter, the CR should do in impact main what extended call be our gets believe as goes Bill. the on be April new to a Aero, into in beyond these XXXX see in essentially delay Defense potential programs the fiscal impact defense when of the from of and to the anticipate said law. year not the wins. The convert CPI XXXX how proposals is or an signed XXXX, bid noted we about pipeline That being our fast excited request into I will last we're signing

defense funding business new hypersonics the and remain development been missiles, bit It pipeline. electronic for our reconnaissance, funding key current budget including portfolio warfare, intelligence, a programs making positioned strategic well uncertain. priorities, be XXXX our for advanced key well calls timing light programs surveillance, technologies for very capabilities including We if even of have as and growth autonomous may in in for in for bid priorities, as we also now systems. includes

Tier The pipeline Slide defense bid XX. at level. X is to weighted the heavily Turning by bids

Aerosystems segment, the of Kitting comprises our of and the Within this XX% pipeline. value

margins are this. than these in development services with achieve and segment, business better our and potentially efforts products segments Our our X aligned business can Aerostructure

segments, capturing for success future in continued the should mix in catalyst with margin the work periods. in expansion time, Over be shift a in these

before, XX-XX reflective it strategy have through roughly of months is our bid XXXX. to revenue, a between the commercial of X defense to our more mix As the first our is and mentioned which have I roughly mix goal pipeline

pipeline, bid time, Within to opportunities to development expect chart contains next quarter. be business the those converted we that XX will decided this opportunities I program firm proposals. that change in highlight days. several XX become there our will Over our to this XX funnel over expect new want commercial we opportunities as Slide would are

in approvals, are E-XD they required and of welded included time be want CPI note currently to awarded program proposals the from at outer for E-XD which these for that government this wing removed awards of the for reported for chart. panel both the bold our wet Aero Japanese September effort meaning on pending the programs, were backlog customer XX. be I during represent type submitted the and Details the have follow which as structure quarter incumbent. of X listed in a is Projects will we the third will work, and configuration released

very we Aerospace Research few X-year to GE publicly Given we present Defense good XXXX, I minutes to outlook in visibility top-line through growth, backlog, September for the introduced at in our our and record want a which Conference time XXth first spend revenue and for have York. the New Annual

with growth Using XXXX Kitting baseline, growth consistent a rates which our is a each development our as we noted rate X-year business a offer moment comparably have Aerostructures, ago. projected higher of initiatives, areas. across as I Aerosystems and business than

column our second as the area. XXXX contribution point, each fiscal Using from shows revenue XXXX starting

backlog areas column shows each the platforms rate The across XX. business column And of driving estimated compound business each what shows an fiscal our business third percentage platforms growth represented those revenue. last key is which XXXX column its our September shows area corresponding of The as for of by area. annual are expectations

In we million walk briefly in To $XX.X through. started in revenue XXXX. you at Aerostructures,

HAWK for of A-XX, On to XXXX. year-over-year believe the our the XX% through in of and HondaJet, growth range segment grow projected platforms, such as F-XXV, will of XX% we BLACK this strength business

Aerosystems and acquired of systems electronic WMI is our driven CH-XXK produced for assemblies and our we F-XX, our fastest-growing the some area electronic pods, a we by of HAWK. acquisition nonstructural programs and of variety BLACK warfare through predominantly is

Regional EX-XXX of XX% Airliner in a revenue We million compound program, fiscal the the to segment. we program rate XXXX. XX%. supply E-XD growth will annual the drive our in We Roughly at XX% in programs believe chain XX%. to range a our area, $XX.X started Within management and of will new our base the the annual backlog rate in is our XX% of bottom, believe Embraer all compound growth X-year of growth kitting X-year growth in this across indicated range at that and of a T-XX the drive

Turning to Slide XX.

and potential remainder programs defense over have million approximately Our to performance. commercial of cumulatively their generate the the of periods $XXX

as and figure not as XX, such, does contract. Raytheon September a pod of As newest the reminder, this is include

Before our proud to so more work than I to moment open call tireless XXX made team I recognize the to the this the year. far we've members. take a of would like of achievements and effort very CPI questions, I'm

with for attention earned This a national Aero future which performance, our best-in-class reputation This award have foundation in Award. an Excellence customers in presented a and provide attain success. Program for the We have and past reputation CPI brought us peers Aviation to as firm recently seek the Week the testifies to successes those in we achieved the the execution best and of program recognizes best future. and quality we

With call to your that, now I will Sarah? open questions. the

session. We Instructions]. will question-and-answer [Operator now begin the

Our Herbert Please from question with first ahead. Canaccord. comes Ken go

Doug Hi. Good morning and Vince.

Hi Ken.

Good morning, Tim.

wanted quarter? just third legacy get the you the be that from quarter called there besides from trying first else thinking about. just was anything to an or have sense unusual else to through out margins, standpoint on was in ask a execution in if should we associated anything headwind flowing the I'm gross CPI the a with $XXX,XXX expenses else there anything I WMI been could on

it margin is in below gross considerably probably where but still margin basis their the WMI's $XXX,XXX, expenses points gross below not SG&A the should where be. of XXX we operating forecasted, just is

company the overall statements. So and it margin that's for where dragging that flows all below the the be, financial really through way gross would the

into the improvements what's gross at get on of guidance the there, does what CPI WMI on of but maybe the XXXX? the to reflects legacy visibility outlook margins? here closer And business point obviously, it And Okay. sort the

I address Ken. that, Well, can

system as have executed merged particular, we've is recently, system contracts we particularly They The - finally we ours as clear Doug. system. a lot operating steps - a lot forecasting, new one. we was under MRP roof this in So they're one of their on that a their us, not had processes, good spreadsheets, and manual the it once do finally to taken a excel of with easier lot that they pretty not of and very

two CPI step that so integration efficiencies systems. first step the the of realizing towards taken the the the business, first expect core to those feel we've And come we've with we at

more already and capital in getting management are seeing to - that a to much are there. floor automation, the be little working there's out need they progress getting better area. when much We parts There's there's the

attaining to going probably of and that's next the start to quarter this So expect. first take quarter the margins year we into that maybe

mind, under made WMI, could margins, we've higher the expectation CPI in that we we and and right keep to processes is margins think control, actually to we And step we simply our at that. WMI than do feel the get our of need the achieve - not but manufacturing

of in helpful, growth, the you quarter other what the top-line was thanks organic remind And can wins Okay. us Doug. versus the growth the percent growth? in That's contract WMI

was WMI about revenue. quarter, the $X in million In

more So increased than CPI's about revenue XX%.

up million from Our $XX.X to - from XX revenue $XX million. sorry, went almost to - from

All I potential working Okay. on million quick more the you you comment, That's relief expect just on right. if clarifications. when under capital word Doug, adjustments? could, $X.X Did two still to great. outstanding And get the of the

would it's year - week it's months to the But days, I are just so. Yes. a XX or don't the think either that we expect We for a think rule could with court away. We ask on do court the will or I the XX paperwork. say, papers potentially something away. in hearing next, think the all within last

coming a job to question on providing you're I is, some news better on And do outlook. the there. good Okay. my the That's hopefully obviously then final appreciate really visibility just top-line. three-year great continuing

seems a But fundamental Doug, healthy. very lot how just awards new guess, help pipeline margins the contract programs? is, on You've from the you of opportunity I can the and the the frame announced question

extent what in the outlined? you've years And higher of in you're the extent, better upon, as couple the layering the see margins? to maybe we next Or move up business incremental additional margins on incremental based can facility, what volume to to do obviously,

keep it started. So all won, we mind, this work, in of hasn't

manufacturing hours being intend floor, hours the the shop of started producing benefit on them. they on There's haven't will the significant have lot that hours the cost Some labor direct these things we fixed out of - a them and we're in some actually out to XXXX. our starts when like to win, the floor, a started absorption but others that A-XX, of applying the F-XXV, they which floor, to

So say, X next, that the naturally months. X seeing start occur you'll to within

programs, a of we Don't lot lower is these some production say, forget do margins. our and newer at, lower programs with these carry growth though, rate of volume than

So the expectation top-line continues be to is - Will to in achieve that's will sporty. I the run gross grow. that think XXXX? kind there of we full margins able rate

I better Certainly, by manufacturing the than in XXXX, on of efficiencies. WMI is not track XXXX. executing mid-XXXX full year's a And only once $XX absorption more at is the top-line higher of margins, get approaching of on. kind for on a story you'll good million and still combination again and of see worth we backlog then benefit not higher that and their peaking, than think but And all

That's of I footprint you I just, you're things looking higher the in capital, some And add. volume, largely helpful. again, to there's major other volume. imagine to headcount you're terms capital, mean, terms set But any correct? investments at the - need support the can footprint not in to not support and the and you're of

We are not.

very All Excellent. right. you much. Well, Okay. thank

Thank Ken. you,

Feinberg question comes ahead. Investments. go Feinberg next with Jeff The from Please

Good you. Thank morning.

Hi Jeff.

of the an where at please, and awards Can I previous it state, the contracts potential please think you thought is here. Can help strong morning. give in the was us terms steady in you of some guys terms a where question lot margins? calls, Good pretax in understand pretax you clarity you margin excellent have of

like say, again. really think kind we that income way, is this it to contribution was The really We the pretax I two were year to that be when what - would assumption for up margins. us - attain that would year I'd plan. and XX%, XX% track, this or Jeff. on the, that, probably achieve to to answer would ago, pretax reasonable in WMI's a you that of track on were a with

in - attain that short I think it's reasonably So we is - order. that could if something

we that gross the margin expenses, there to necessarily mentioned improvements combination the before, expanding a that, I there's as our not Beyond leverage of SG&A grow.

or percentage in So two maybe a that XXXX. than higher

Morris Our from go Walter Please Baraboo Growth. next question ahead. comes with

you. Thank

Walter. morning, Good

year the Hi WMI gentlemen. of Ken My of on asked. you - minimal does WMI that you've said follow-up far question be as issues be into carryover the that with negative you WMI? the impact call one the questions second XXXX dealt on here issues? lines mean with impact track these there you so, in if XXXX. Can in What of as is And quantify Will with of the from you these heading that? should half could along

largely Well, the for I I issues. the litigation. some the not first for year, any have is line margin gross related as negative as in headwinds and particularly mean, would profitable on to SG&A you guess, the business, that be profitable tell won't clarity, there can - planned, I the WMI a then was still it we there was kind of

- the of improvements number already say operations the the no, in we we've call be a and make XXXX to sure with shooting XXXX Optimistically, because that envision than range next that. year run of back WMI we and of the, good made are year. But margin make will for. probably continue with very the should say, that a But because to efficiency hard it's gross to being I on end higher that we're being - XX% that known we've think -

them. I being And best manufacturing on as known mean, the keep all of operators in our practices of in and we're mind, good employing good manufacturers. we industry are

the thought - we needed I and overshot get - we quickly and in how we come that to improvements would think We be would what have to made. the to we make be able

term long an operation in I but optimism, turnaround. So that I we're next term, error that X long months, that - I see to guess going was and - by think, mean,

be emphasize, you'll impact would I and to WMI issues heard profitable next minimal on again, I these and what there at you say by year, early is efficiency anticipated? XXXX from So levels thought operating you be the

Walter. Absolutely,

gentlemen. you, Thank

over appears to would to Doug for question-and-answer conference any concludes remarks. This [Operator It closing session. there back further no I like turn questions. the Instructions] CEO, are McCrosson, the

thank and March again, XXXX to XXXX the on when forward results XXXX. Sarah, us our look of Bye we full you, We year with today. and in for speaking joining Thank fourth quarter you call you, for now. report

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

You now may disconnect.