Q1 2020 Earnings Call
Just like the Apache.
Yes.
For the period.
This quarter, we saw significant growth across many other military and space applications.
Yes.
It all sectors.
And ended the first quarter when the backlog were up nearly 474 million for defense up an impressive 36% year over year.
I'm also happy to announce at the common was recognized as the Blackhawk supplier of the year in 2019 by Sikorsky.
Lockheed Martin.
Okay.
Within our commercial aerospace operations first quarter sales declined year over year to 62.5 million.
But we did see continued share again, Airbus and despite the rates posted year over year gains with this customer.
The common also continues to work on adjusting costs and managing the downturn and is well positioned once rates start to stabilize and then the long term.
The commas expansion with Airbus since 2017 is clearly, helping and puts important balance at our portfolio.
The Airbus Athree 320, and Airbus a 220 families represented a larger larger share both directly or indirectly into comps commercial revenue in Q1.
The backlog within our commercial aerospace sector stood at roughly 376 million at the end of the first quarter, but the majority of decline for the 737 Max program.
At this point I will turn it over Chris.
Thank you, Steve and good afternoon, everyone.
As a reminder, please see the company's filings in Q1 earnings release for further description of information mentioned on todays call.
As Steve discussed we were pleased with the first quarters overall results, even as we faced the dual challenges of lower 737 Max production.
And the growing.
Economics.
19 pandemic.
We feel confident that our ability to flex production parameters and rapidly evolve our lean operating structure to external conditions will service well in the months in quarters ahead.
Now I'll move to the details of our overall results.
Revenue for the first quarter of 2020 was 173.5 million versus 172.6 million in the first quarter of 2019.
This performance was driven by $24.2 million of higher sales within the military and space sector, partially offset by 23 million of lower revenue from our commercial aerospace customers industrial sales were essentially flat year over year.
As mentioned in our yearend earnings call, we expected, our military and space business to Directionally offset the headwind in Boeing Max 737, Max commercial demand.
Ducommuns overall backlog at the end of the first quarter was approximately 876 million near record levels.
Growth in the military and space backlog continues to drive a sustained strong backlog as a reminder, we defined backlog as potential revenue based on customer purchase orders and long term agreements with from fixed prices and expected delivery dates of 24 months or less.
Once again posted solid gross profit for the quarter as gross margins rose to 21.2% from 20.7% in the prior years comparable period.
The increase year over year was due to favorable mix and lower compensation and benefit costs.
Gross profit rose to 36.8 million from 35.7 million last year.
We do expect downward pressure on gross profit as we move through 2020, and we managed through the environment Overdues commercial aerospace demand.
SGN a was 23.2 million in the first quarter versus 22.8 million in the first quarter of 2019.
The company reported operating income for the first quarter of $13.6 million or 7.8% of revenue compared to $12.8 million for 7.5% of revenue in the prior year period.
The year over year improvement was due to the increased revenue and the higher gross margins.
Interest expense was 4.2 million in the first quarter versus 4.4 million in the prior year period, reflecting the favorable impact of lower interest rates on our new credit facilities more than offsetting the higher amount of debt outstanding during the quarter.
The increased debt outstanding during the quarter was primarily due to funding of the company's acquisition of novels in October 2019.
The company reported net income for the first quarter of $7.9 million or 67 cents per diluted share compared to net income of $7.5 million or 64 cents per diluted share for the first quarter of 2018.
The year over year increase was primarily due to higher revenues stronger gross margins as I previously mentioned.
Adjusted EBITDA for the first quarter of 2020 was 23.2 million or 13.4% of revenue compared to 21.1 million or 12.2% of revenue for the comparable period in 2019, an increase of 120 basis points.
Now, let me turn to the segment results.
Our electronic systems segment posted revenue of 98.1 million in the first quarter of 2020 versus $84.2 million in the prior year period.
These results reflect a 12.9 million increase in sales with the company's military and space customers and a modest uptick in revenue across our commercial aerospace platforms.
Electronic systems posted operating income for the first quarter of 15.1 million or 15.4% of revenues versus 9.2 million or 10.9% of revenues in the prior year period.
The improved performance reflects favorable manufacturing volumes and product mix.
Our structural systems segment posted revenues of 75.4 million in the first quarter of 2020 versus $88.4 million last year.
The year over year decrease was due to 24.3 million of lower sales across our commercial aerospace applications, reflecting current demand dynamics, partially offset by $11.3 million of higher revenue within the company's military and space markets structural systems posted operating income for the quarter of $5.4 million for 7.2% of revenue.
Compared to $10.5 million or 11.9% of revenue last year.
The year over year operating margin decline reflected unfavorable manufacturing volumes and product mix, partially offset by lower compensation and benefit costs.
Corporate general and administrative expense CG in a expenses for the first quarter of 2020 were $6.9 million or 4% of revenue versus 6.9 million and 4% of revenue as well in 2019.
Turning to liquid liquidity and capital resources.
We have available liquidity of $115 million, we drew down $50 million on our 100 million dollar revolver toward the end of the first quarter in an abundance of caution as the uncertainty grew related to the potential impacts of cobot 19, we held this drawdown in cash on our on our balance sheet at quarter end.
We used $12 million of cash from operations during the first quarter of 2020 compared with $1.7 million during the prior year period. The first quarter is historically, our weakest cash flow quarter, we operate with significant performance variable compensation performance based significant performance based variable compensation and the annual incentive for the.
Prior year, it's paid out in the first quarter of the subsequent year. Additionally, accounts receivable and inventory investments, partially offset by higher net income added to the outflow from operations.
$9 million during the first quarter and anticipate spending between 12 million and 14 million in 2020.
And alignment with our cash Conservation initiative. This anticipated spending will result in a capital expenditure decrease of more than 20% from our 2019 capital spending level.
We're again pleased with our quarterly performance and remained remain cautiously optimistic about the future even as we managed through the uncertainty of the code with 19 impacts which create it very challenging operating environment.
Not turn it back over to Steve for his closing remarks.
Chris.
Well hope we provide some important information shareholders today as you work through 2020.
Again, I thought the first quarter was excellent. Despite the challenges and believe we have a lot of runway and long term, especially in defense and others that other areas such as Airbus.
What else to add that we do have the right foot prints cost structure discipline and operational leadership to continue developments in the face of this current crisis.
Oh someone to thank our customers shareholders and over other business partners as you work through these difficult times together.
In closing and most important.
Like take this time tells a common employees.
I'm proud of them.
And all of our efforts.
With the many challenges from the pandemic.
Roughly 90% of our team members show up at our operations everyday.
And those stressful you have to jobs on for our customers.
In our nation.
Oh, so won't affect their families for the support.
Never easy with loved ones leave the home with shelter in place orders from the authorities.
We've also given out $700000 to local area charities, where we operate.
Well, we'll add another 300000 to reach 1 million and donations.
I'm the company.
To help our neighbors.
Thank you for listening, let's I go to questions.
As a reminder to ask a question you will need to plus dollar than one on your touch tone telephone to withdraw your question press the pound key please stand by what we can bother q. and a roster.
Our first question <unk> martial with the Dodian company airline is now open.
[noise] once again your first question comes from Edward Marshall, What's the Dodian Company. Your line is now open.
<unk> I, Steve Chris How're, you I hope.
<unk> hope your family's you're doing well yeah.
Thanks. Thanks, So so the last quarter, we talked about the Max program and I, just one of the kind of space on the 260 Shipsets that were expected for 2020 are you anticipating that you ship. Those this year was up and push them to write as a result of the.
<unk>.
That right now we're we're we're a 216 you know as far as we're working right now with a with.
Our customers, but I don't really have any Chris U.M. and else on that or I don't think we do know me I I think beyond when you. If we all listened to boeing's call yesterday, we been in contact with them I mean, certainly you know from our year and call till now there's there's been you know a little more caution that's been put out there, but they were fairly confident on their call yesterday that they work through you know the <unk> the slow ramp up.
That they've got in front of them this year to hit back toward a 31 rate yeah as they get to 2021.
We have no news.
Yeah. Okay. So as you as you plan production costs did you restart production and they and you talked about maybe more even build throughout the year to look at your operating costs. The data her into one and do you anticipate that you'll start darned cute so.
We absolutely did that into one I mean, we got out of the gate early because you know obviously, we got the news in December of shutdowns right. So you know by the Middle January we already had furloughs in place and lots of other things. So so we managed to you know where we're working closely with them imagine you want and then you know Q2 again we.
We just continue to be as practice weekend on the <unk>.
You you talked about the electronics margin potentially getting higher than the 10% <unk>, one one or and Q. for that you posted this quarter you executed toward that and I'm just trying to get a sense of maybe what's in bad isn't that number how repeatable is that it sounds like it might be taking a step back.
And then I have a follow up for them.
Yeah.
Think it is a step forward for us for sure and and did we expected to to take the lead quite that much.
No that there was a nice leave this year this sort of this quarter in Q1 can we sustain it yes, if the volumes do I mean, the the key here was was getting a little more volume at several of the performance centres, which you know which drop certainly much stronger that that I know we've mentioned you know is with gone through that also getting all of the performance centres up to a more efficient less.
And we sort of had that breakthrough as well so you know.
Q1, the the the the shine that electronics had on it and Q1, you know certainly helped us balance out the corridor and we're going to look for that you know as we move forward, yes, there'll be a little more headwind and Q2 is a little bit you know as as Steve alluded to is going to be a tough one overall, we do look for electronics to.
Continued to keep a very strong profile.
So so maybe I can ask one step further the guidance pitch a provided whether it's on the court or on the year could you talk about watching batted from that <unk>. The operating profit margin for the for those two business segments that took these kind of roll up to the consolidated number that you're looking for.
I think you know I'll take a live with it like at first AD. You know, we're we're benefitting from from scale on the electronics I'd I would see being driven by the fence right. So.
We have a lot of you know our operations are <unk> are really tight.
And so we're obviously benefiting from from that volume. So that's certainly going to help us and then on the other side is is I mentioned earlier, you on the commercial side and and those factories I mean, we're we're very proactive might cost. We we we know how to do this and we're doing it. So that's why we're we're seeing you know fairly nice numbers really revenues down.
[noise], so the five and a half 6% once embedded from from the at the segment level I mean, that's kind of what I was getting it.
Yeah, I mean <unk> you know, we're we're if the volume Q.T. was going to be a tough one to repeat for electronics. So I don't know that it would stay quite there you saw this step back in in structures you know in Q. ones operating margin, it's going to be challenged to take that one you know to take that one much higher. So I think you know you if you.
Filled it out more of what you see in in Q1 with with electronics until we get our volume back to this level. We were at that's that's probably a fair look.
Uh-huh got it and thanks by the way for providing the out the guidance I think this is probably the first time I can remember to come doing that so thank yes, what's that we know it's difficult yeah, that's why I won't be yeah.
I kind of that <unk> I got to imagine visibility is pretty hard for you guys right now <unk>, maybe maybe a little bit easier question. Then so if I were thinking about your interest expense and tax would there be any meaningful changes from what we song Q1, I got I've got to assume though.
Well the only place is going to be well from from what you don't want Q1, yes, I mean I'll take them. Both I mean interest expense. We we you know certainly the whole market changed a little bit is we got toward the end of Q1. So you know with our with our variable that facilities. I mean, we are we shouldn't come through a little cleaner.
You can Q2 through queue for then the 4.2 million that you saw and get there in Q1. So you know it definitely for we were at the year and call. It some more favorable interest rates environment, and so that that number should probably be you know more in the 4 million a quarter versus what we you know versus what we were talking about at the you're in call. So that'll that'll help out you know that.
Line and then on the tax side, you know I think we're still you know we've gotten to a pretty decent repeat process on on where we're at under the new tax laws over the last couple of years in in this pointing you to a 19% to 20% full year, it's probably still the right answer we we definitely cuts Unfavorability you know with some of the S.P.C. <unk>.
Hit in Q1 that were discrete item horse, but but generally it shouldn't be back to that 19% to 20% as we as we go to the year.
Stay safe and be well to it I think that shit.
Thank you are next question comes on can hurt with Cannacord airline it's not open.
Hi, Stephen Chris a really nice quarter.
Yeah.
Steve I just wanted to first ask on the the cost take out in the first quarter can you can you maybe comment on how much of this is permanent maybe versus temporary and how much sort of buffer or excess capacity are you going to have to carry this year on the cost side in order to support.
Max rates back up to 30 next year or depending upon Boeing gets to those numbers.
Yeah. Okay. Thanks, So look first obviously, a you know you got to make some tough decisions on furloughs and.
Had to do the best we can't with that but you know the artists aren't there and the outlook isn't where it needs to be we for a loan then if there's no.
Real life as far as being able to bring people back we we do something for them and then you know we move forward. So I think the on the the people side you know we've we've got a good handle on it. It's you know variable the <unk>. The other thing I'll say is that you know, where we really try to drive little capital intensity, where we can so you know we do.
You have you know obviously operations that you know carries maybe some more machines and others, but I think overall and you can see from our margins that we do a pretty good job managing you know the overheads and we managed variable cost. So I think that throughout the year. You know again, we've been through this before you know management myself. So.
You know, it's all your proactive and stay ahead of it like we used to say and companies to work at a used in good shape I think overall this year, we're going to we're gonna be okay in both hands.
Okay, and then I I guess, it's fair to say that you you won't need to be looking to add much costs.
Just support rates higher rates on the Max if and when Boeing you know is able to execute a push that up yeah. That's good that's good yeah I wonder if confirmed that yes. We're we're we're in good shape. Okay. You know so just a that's a check mark on that.
Okay, perfect and I just wanted to you know you've talked to obviously a lot about about the defense side and and you're clearly <unk> you know benefiting from a lot of the actions you've made and and initiatives. There. What are you seeing Steve in terms of your customers and payments you actually starting to see a benefit in terms of any accelerated either.
Contract awards or payments from.
The the government or through the prime contractors mean, <unk> you spin obviously, a lot of talk about ensuring that you know the industrial do something different side as well supported in light of Ah Cupid 19, but but what are you seeing on that front.
I'll take that one can I mean, we there is a lot I mean, there's chatter that some of that may be happening, but reality is you know we're seeing a lot of business as usual on the defense side I mean, there can be a a contract or a situation where you know we might get quicker agreement on an advance payment to cover some long lead time item or something like that but but overall.
I mean, it's it's it's essentially you know it's every business as usual you know on that on the defense side of what we're saying on the cash flow Yeah. No change your 10, yeah pretty much from the same thing I know there's been some some news about Lockheed and some other folks but.
It's a common it's just a sign of cool.
That's cool okay.
Okay, well, that's great and if I could just one final comment I <unk> I I know, obviously commercial markets are a bit pressure today, but but can you maybe hope to just sort of level set us or quantify where you are with the the first core product line because I know, obviously, you put a lot of resources into that and it was a <unk>, obviously, some great share gaining growth but.
What's the outlook for that product line, now and and what are you seeing there yeah sure. Thanks. Thanks for that question and so the survey on the phone versus a car we've been working on for a few years, we've commercialized that and now we have it fully operational actually you know why with Mexico facility, we started with a a small ferrying call to be <unk>.
Well on the leave engine and now we're working in other areas such as a blocker doors and well right now in the middle of that obviously, it's been pushed off a bit but we are still planning on fulfilling that commercialization target probably second half a block of doors can which is you know.
A majority of that <unk> that that contract and you know.
Without.
A big disruption, we feel like coming out of the end of this year you know we're going to at least 715 million dollar runrate on versa core and now we're looking at other things with with other company. So we we we think it's got a big future. We think it's of check the box with a wireless check that box. This fall with a block of doors, which is a big.
Parliament to sell as you know and then we are having conversations with other Oh. He ends up for new thing. So we can maybe talk about later in the year.
Great Great to hear thanks thoughts Stephen Chris <unk>.
You just can't make sure information through shit.
Thank you and our next question comes from my Crocker with B. Riley F.B.R. airline it's open.
Thank you see if I'm glad to hear that you think you still have the light footprint. After all the accident taking previously.
No need it sounds like to do any further.
Kind of shuffling, but could you.
Couch be expected gross margin decline with sticks costs absorption and capacity utilization.
Is that.
Within your existing footprint.
Yeah, I mean, I'll take out one Mike I mean, it's.
We we do have that sort of the tale of two cities here with the different you know with a different set up of the of the two businesses, but electronics and structures, but I mean, where where I think you're pointing to his click on the structure side you know as we've got the head. When you know that's there what is that going to translate to us I would say it. This way you know the we we.
A lot of reasons that the performance that are structure. We have you know still works well for us it does allow us to to flex pretty quickly. The the fixed costs structure. You know that we do have at any one facility isn't so is it so heavy that that we can handle you know significant source headwind.
And still be able to instill be able to make money at it at a various performance centre and that's that's really what this first four months five months of the four months of the year. You know has been about it as the new information comes forward as the new you know in most of its been headwind clearly on the structure side, but as it comes forward what does that mean.
Back to a sort of as question earlier, how's that going to what they're going to do to our approach on how we want to build how we want to fulfill the different products and and being able to flex it that way. So you know with it being said that that's one of the benefits. We have you know with where we're at on how we've got the structure set up to your point, that's why we've not talked about consolidating.
Consolidating footprint physical footprint at this point, it's just been more around flexing and and trying to scaled scale to it as best we can't.
Okay.
Thank you and then.
Given the.
Decline in in revenue for the rest of the I imagine you'll be taking in somebody who's working capital accounts and it really.
Outside stuff, we cash flow relative to keep it so that should you know further even further improve your balance you would never just now down in just three times, so you're getting into the level, where the company could you know do more emanate to further celebrate you know this move.
Up market men to strong nish applications with high margins and she competitors and so so that in.
What does that pipeline look like and you know our people answering phones are just not able to you in this environment.
<unk> is the question more on the working capital lead in or on the the acquisition tail part of that Mike.
Well I mean question, what am I thinking the right way it sounds pretty cash flow and then yeah two would be you know.
His his his his m. and that kind of a standstill Ah. Okay. Let me take the first part yeah, I mean, it Mike absolutely. So as you laid it out you know there there's there's uncertainty with sort of each piece of that puzzle, but if they happen. The way you said. It then absolutely you know the end game would be a some additional free cash flow I think a big part of it is you know as.
As we mentioned you know the messaging you heard from Steve related to top line and profitability. You know here on April 30 is is very different than where it was in February. So you know that part of the equation in you know how profitable you know we will be is is a key part of that as well as as some of that you know given take between what we drop through from you know from the facility.
Then and then to the working capital question you know again, we've got tale to city. So there'll be some places as we as we look to grow the business on the defense side this year, where they're going to be you know some investment there while hopefully you know pulling down some of the working capital you know taking on the structure side as we is weekend right size over the next over the next several months.
And Mike on the acquisition certainly right now run a pause phase, but we still have our people engaged in in place and so we'll see how the second half looks and early 2021, but right now you know for the most part we're we're on pause probably for the next few months at least.
Okay, great. Thank you very much thanks.
Thank you and as a reminder to ask a question you will need to press the other than one on your touched on telephone.
Question comes am I going to tell them only with Sun Trust.
Your line is no good evening.
Thanks for How're, you guys, giving thanks, Dave.
Here, but it's a safe and healthy maybe just some some housekeeping Ah one's first <unk> would you guys disclose organic revenue growth in the quarter or or tell us what the nobles contribution once.
It's just say I was less than 5%, Okay I'll leave it there.
Got it.
And then just spend the Max did you guys actually restart and are you shipping product on the on the program now.
We are.
Basically we we worked through the first quarter. The method could obviously you know we do have relationships with Boeing for certain products that are you know you really just can't make one up one a week. Okay. So we we had on what you know working with them on ship in place and some other things. So you know I'd say, it's a bit of a mix, but we're certainly getting started out with a spirit.
I haven't see we need to give these guys time to get going on you know what brought over on a bin program with spirit wants to bend start once things start more important than fall in love again, yeah, nor moving forward and we did have a a decent stretching to one there Mike and into into the started Q2 here where everybody is temporary shut downs you know did did they did impact.
Did impact you know our ability, yes, yep yep, absolutely absolutely yeah, yeah, but maybe that's a good lead into especially with the the comment on spirit with the bin programs I mean, <unk> How're you got obviously it appreciate the guidance and you know obvious you know nobody really knows what's going on here, but you know do you expect further pressure.
From either supply chain realignment to these lower rates do you get a sense that there's a lot of buffer stock in the system that has to be drawn down and and I guess I'm looking at this you know you guys already had the Max headwind built into this year. You know do you expect any of these you know pressures even something.
Eight seven it does it last into into 21, you know if somebody's rates are coming down pretty significantly might cause they say that right now my answer would be no.
Okay.
Are as you know I think you know we are going to see some production I think things are gonna you know who knows for sure right, but I think that they'll be activity I'd say, we're going to continue to roll forward. I think you know the age seven reduction or it's a little further out you know is is okay. So you know I think you know overall I would say you know a top left.
<unk>.
Okay. Okay, and then last one just on the the electronics segment, obviously defense business as usual across the board, but as you guys are looking at your product lines to demand there you see any risk in that supply chain either.
From you know <unk> related disruptions or any of your suppliers in different geography, you know dealing with facility shut down to anything that would that would pose a threat to your planned growth. There are expected shipments you know deeper into supply chain. Yeah, I mean, I think what I would point to Mike.
You know it Steve mentioned I mean.
The whole team lived through something like this before so so we're not trying to be naive and definitely there are datapoint's, where we can have an issue that can be a supplier here. It can be you know a push out of of a supply their or shut down, but having said that when you look at a high level you know the answers no again benefited from the the various.
Ways that we've got the performance that are set up where the product lines are set up and how much you know and the supply chain side. You know how invested we are with any one particular, but we've got a diverse supply chain. So if we hit a bump in the road you know with one.
We can shift and we can keep moving so you know overall, we can it's it's not it's not a prevalent problem that we see right now, but you know we've still got ready to go well see anything material right now that's right yeah, Okay, and and then even on inventory I mean, it sounds like that could potentially be a source. The cash for you guys. You know you you're kind of just.
Bright size to new levels, but you don't you don't invasion, having a stockpile anything or do any prebuying there.
Oh.
Okay.
<unk> alright, thanks, guys they say.
Okay I appreciate it.
Thank you in an X. question comes in Canterbury, what kind of cord airline is now open.
Yeah, Hi, Stephen Chris just a couple of real quick follow ups I'm not the free cash flow discussion. It's it it sounds like from your comments second quarter is likely to use of cash again, just with everything going on but you you inflict positively and the second half of the year to get to positive free cash for for the full years that.
Framework I I think it's a little more optimistic then that can I mean, we're we're still even though there's the head when you know on on the top line Unprofitability you every year for Q. too, we're still anticipating being able to generate some cash flow here in in Q2, and then and then build from there you know the momentum as we go through the rest of the year.
Okay, Oh, that's great and then second considering we're rates are going to go on on 77, and you know sort of a 35% to 40% volume reduction between Boeing and Airbus do you see any potential risk to goodwill or intangibles. When I think about you know L.D.S. in particular and some of risk exposure to the 77, yeah I mean.
So to answer that question I mean, there's been as as this is the <unk> pandemic has taken hold you know like all companies you know gone through a lot of scenario planning and and looking at what you know what risks are out there and that includes you know physical assets as well as you know intangibles and goodwill and and no I mean as those reporting units or evaluate.
<unk> and we we look at what's in front of US right now with various scenarios. You know, we're we're comfortable with haven't quite a bit a cushion before we would have to get into into that as from where we sit right now clearly you know.
Recorders going to be you know a new quarter, but right now we don't anticipate any issues feel good about account degraded about yeah, great. Thank you.
Thank you only have follow from everywhere Marshall said Dodi Carolina's now open.
Too quick follow ups. One we're we're we're focused on kind of the near term with with commercial but as we kind of step fall Oh, you step to the next generation like say Triple seven Triple seven X., what what is the pretend we always pick up two commas narrow <unk> with the larger aircraft coming through I know you do quite a bit I'll work on the Dreamliner, what's what's your phone seven seven so.
X. and maybe ducommuns participation on that program.
It's like.
It's light it or triple seven X. is like we do have a few things on there.
You know if you look at you know just in general you look at a single out bookings are saying a lot of revenue versus wide body were generally we generally run to x.
Okay. Okay. So exactly two accent I think you know what we do have what we do have things on the triple seven acts, but you know we're definitely in the two x. range much more players and single out and that's going to continue.
The second part of that is a any further developments on on the topic, we brought up last quarter on on wind a wind energy.
And and and now.
Outlook, Yeah, L.D., well first you know.
L.D.S., it's been a great thing for for the company you know the first acquisition that myself on the team that together. So it's been a great thing for US. We are we've got you know product you know in the field you know, we're working with well at least one company on doing some trials and we should have more information.
And I'd probably be here.
Yeah, Thanks, very much okay. Thank you.
Thinking when we have a follow up from Michael Shomali with Sun Trust. Your line is now open.
Hey, guys. Thanks for taking this one Steve I think you mentioned some of progress on you may be offense can you may be just elaborate there what you're saying yeah I just I want to put in there because I think we're going to be talking more about in the future I I can't disclose right now just let you know I didn't tell you that you know we did book in order and <unk> I've got to be careful here it's not.
Commercial aircraft and I don't have a a plethora ready to say anything but it's I just I thought it was important to put it in here because it's a new area for us as I was important for for the shareholders an analyst to know that we're moving forward in that area to be good can you give us a hint structure side or electronic system electronics electronics.
Okay, Okay perfect.
Okay.
You might.
[laughter]. Thank you and at this time there appears to be no further callers on the <unk> printing closing remarks are much lower thank everybody. Obviously, thank everyone to drive us today think or analysts yeah. Just a wrap up here you know so we had a great conversation I appreciate again to support we're all working arm in arm here trying to do the best we can.
Most important keep our people safe.
I hope that our communities and obviously take care of our customers. So on a wish everybody good health and safety and we'll look forward to seeing you a a target teasing if you're.
[noise], ladies and gentlemen, thank you for your participation on today's conference. This doesn't include your program and you may now disconnect.
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