Q4 2021 RBC Bearings Inc Earnings Call
[music].
Good day, and thank you for standing by welcome to the RBC bearings fiscal 2021 fourth quarter earnings call.
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I'd now like to hand, the conference over to your host today, Mr will stack with Alpha IR. Please go ahead.
Yeah.
Good morning, and thank you for joining us for RBC bearings fiscal 'twenty 'twenty, 1 fourth quarter earnings conference call with me on the call today are Dr. Michael J, Hartnett, Chairman, President and Chief Executive Officer, Daniel a Burger on director, Vice President and Chief operating Officer, and Robert for the Vice President and Chief.
Financial Officer before.
Before beginning todays call, let me remind you that some of the statements made today will be forward looking and are made under the private Securities Litigation Reform Act of 1995 actual results may differ materially from those projected or implied due to a variety of factors. We refer you to RBC bearings recent filings with the SEC for a more detailed discussion.
Of the risks that could impact the company's future operating results and financial condition. These.
These factors are also described in greater detail on the press release and on the company's website. In addition reconciliation between GAAP and non-GAAP financial information is included as part of the release and is available on the company's website now I'll turn the call over to Dr. Hartnett.
Thank you will.
Good morning, and welcome.
Net sales for the fourth quarter of fiscal 2021 for $163 million.
Versus the $185.8 million for the same period last year, a decrease of 13, 7%.
The fourth quarter of <unk>.
2021 sales of industrial products represented 47% of our net sales.
With the aerospace products at 53%.
The gross margin for the quarter was $62.5 million or 39% of net sales.
This compares to $76.6 million or 41, 2% for the same period last year.
Operating income was $29.7 million 18, 6% of net sales compared to last year's $43.5 million.
Or 23, 4% respectively.
Adjusted EBITDA was $45.9 million 28, 6% of net sales compared to $56.3 million.
And 33% of net sales for the same period last year.
We ended the quarter with $241.3 million of cash and securities and $16.1 million of debt.
Year to date free cash flow was a record $147 million.
We entered the fourth quarter and saw a substantial strengthening of our industrial sector.
All markets participated industrial distribution mining machine tool rail.
Semiconductor machinery marine and wind.
We also saw a substantial increase quoting and contract activity from the aerospace sector.
Sales of industrial products were up 12, 9% from last year.
Led by OEM, which was up 15, 1%.
Okay.
<unk> quarter comparisons show Industrials were up by 16, 8% led by of distribution at 21, 3%.
Industrial distribution gave the very strong showing the or in the period across all product lines and geographies.
In fact, we could have sold more if we had stuck in many of the mix items. We are busy today on inventory replenishment and increasing many key stocking positions.
Marine the Buildout of the Virginia, and Columbia submarine fleets continue.
We have completed blocks for build out of the Virginia class.
And our starting in the next 10 boat contract.
This month.
We are also preparing for the Columbia to begin production cycle in calendar year 'twenty 2.
On semiconductor.
The race to expand semiconductor manufacturing.
Is that driving requirements for machinery and components at levels, we haven't experienced before.
As you know this is driven by the demand for computers and automobiles phones.
Games self driving cars <unk> technology et cetera.
Over the past 20 years, we have diligently built out very strong positions with the machine builders and achieved considerable design excellence manufacturing scale and reputation in these markets.
We are now realizing the benefits of all of these efforts.
Yeah.
Turning to aerospace and defense the.
The fourth quarter of fiscal 2021, net sales were down 28, 6% on a quarter over quarter basis, but up sequentially for 5%.
Boeing is slowly increasing demand for products.
For the 737, Max suppliers as they consume their excess inventory positions.
We are pleased to see the turnaround in consumption here and expect each quarter to be better than the last going forward.
We are planning to support a 140 to 150 plane build out this year.
Moving to 350 to 400.
737, Max is next year.
Given the new rules for vaccinated travelers to Europe, we expect to see an improved outlook for the triple 7 and the 787 ships.
And their build rates by the end of the summer or sooner.
We are currently supporting audits of our production capacities by both Boeing and Airbus personnel as the.
Late plans to build to increase their production rates.
Airbus currently at 40 to 42, <unk> hundred 20 series per month.
Is targeted.
Targeted Tuesday of well known goal of 60 ships per month.
As reported earlier of the plan is to build the 800 total ships of all designs in 2022.
Space.
Moving to the space as the claim.
Space is the new aerospace we're active with many.
Of the daily headline names supplying components as diverse as bearings for rocket engines fins for directional control structures for landing gear actuation devices low friction.
Agenda components the <unk>.
As always fast and the development path normally uncertain, but we like where this is going.
And doing whatever we can we can so that we're not the bottleneck on the process of.
Landing of man on Mars.
This can develop into a significant business scale for RBC of the plans of the significant entrepreneurs of realized over the next few years.
More of this on future calls.
And finally defense.
We certainly have a dream portfolio in terms of platform composition and outlook and expect continuous strength strength.
The strength from this sector for many years.
Regarding our fourth quarter, we are expecting sales to be between 154 on a $158 million.
It's a little bit hard to predict these numbers today and.
I'm sure that we'll be talking about that more later on the call. So I'll defer to that discussion and I will now turn the call over to Dan and Rob for more detail on the financial performance. Thank.
Thank you for you Mike since Mike has already covered net sales and gross margin I'll jump down to SG&A.
SG&A for the fourth quarter of fiscal 2021 was $27.4 million compared to 31.0 million for the same period last year. The decrease was mainly due to lower personnel costs of $3.4 million <unk> 5 million of other items offset by <unk> 3 million of higher share based compensation costs.
As a percentage of net sales SG&A was 17, 1% for the fourth quarter of fiscal 2021 compared to $16.7 for the same period last year.
Other operating expense for the fourth quarter of fiscal 2021 was expense of $5.3 million compared to the expense of $2.1 million for the same period last year for the fourth quarter of fiscal 2021. Other operating expenses were comprised mainly of $2.5 million of interest and amortization.
Of intangible assets $1.5 million of costs associated with the cyber event.
The 1.0 million of restructuring costs and related items, and <unk> 3 million of other items on.
Other operating expense for the same period last year consisted mainly of $2.6 million in amortization of intangible assets zero point $8 million of restructuring costs and zero point of $1 million of other items offset by 1 point of $1.4 million gain on the sale of of surplus building.
Operating income was $29.7 million for the fourth quarter of fiscal 2021.
The operating income of $43.5 million for the same period in fiscal 2020 on an adjusted basis operating income would have been $32.5 million for the fourth quarter of fiscal 2021 compared to adjusted operating income of 43.0 million for the fourth quarter of fiscal 2020.
For the fourth quarter of fiscal 2021, the company reported net income of 25.0 million compared to net income of $33.8 million for the same period last year on an adjusted basis net income would have been $27.4 million for the fourth quarter of fiscal 2021 compared to adjusted net income of $33.1 million for the same period last year.
Diluted earnings per share were <unk> 99 per share for the fourth quarter of fiscal 2021 compared to $1.35 per share for the same period last year on an adjusted basis diluted earnings per share for the fourth quarter of fiscal 2021 was $1.8 per share compared to adjusted diluted earnings per share of $1.33 per share for the same.
Period last year.
Turning to cash flow the company generated $41.9 million in cash from operating activities in the fourth quarter of fiscal 2021 compared to $44.4 million for the same period last year and $152.5 million in cash from operating activities for the full year fiscal 2021 compared to $155.6 million for the full year last year.
Capital expenditures for $3.0 million in the fourth quarter of fiscal 2021 compared to $9.7 million for the same period last year on.
The 12 month basis capital expenditures were $11.8 million compared to $37.3 million last year free cash flow for the full year, which includes cash from operating activities less capital expenditures was $140.7 million for fiscal 2021 compared to $118.3 million in fiscal 2020.
Total debt as of April 3.2021 was $16.1 million in cash and marketable securities on hand was $241.3 million.
I would now like to turn the call back to the operator for the question and answer session.
If you'd like to ask a question at this time. Please press. The Star then the number 1 key on your Touchtone telephone.
For all of your question press the pound key.
Again that is star then 1 to ask a question.
Our first question comes from Peter Dubinsky with Alembic Global Advisors.
Hey, good morning, Mike and Dan and Rob Nice corner of morning, Good morning.
Hey, guys can we talk about.
The press release.
Talked about of charge related to our cyber incident, you quantified it in the release can we talk about that kind of what happened and if it's fully resolved now.
Yes, so in the <unk>.
Last week of February of the company experienced the cyber event. The event had no material impact of our business no employee customer vendor of company files for extracted from our systems and our main ERP systems are not impacted.
Hired 2 independent forensic specialists to review the cyber event and the assistant of the remediation Inc.
<unk> of about $1.5 million in costs associated with the remediation.
And when our 10-K comes out today, you can read more about the certain risks and uncertainties is the result of any security incident as described in the 10-K under the section entitled Risk factors.
Okay I appreciate the color there the problem its going around.
Can we talk more about semiconductors.
You guys seem to be like you alluded to kind of.
Into the into a real trend here of globally.
Can you maybe outline for us kind of how big was it for you is of some niche in fiscal 'twenty, 1 and maybe the level of growth that you think is reasonable in fiscal 'twenty 2.
Yes, let us just.
I don't have the numbers on the top of top of my head here, Pete, but let us let us research that a little bit.
Okay I'll move on to something else, Mike maybe you can talk about M&A.
I think the consensus that I hear in commercial aerospace as debt.
So even though we've gone through this or maybe because we've gone through this horrible downturn no..1 is really you know wanting to sell for the most part because of the.
The expectation of you have to sell such a steep discount is that kind of what you guys are seeing in the M&A market marketplace and maybe on any other color you could add just given the strength of your balance sheet and I know your proclivity towards M&A.
Yes.
Hey on the aerospace side, we're not seeing.
Too many.
Attractive candidates on the.
For M&A I mean, the guys that couldnt make it didn't make it there is some bankruptcies there.
We don't find interesting so.
So we don't we don't really do much with them.
And I think that whole sectors is on pause a little bit of until.
The things correct on the other hand, there is there is some small.
The assets out there that are attractive and.
And we May you may have some news on that in the not too distant future.
Okay Fair.
Fair enough I appreciate the color I'll get to the end of the queue and let someone else talk thanks.
Okay.
Our next question comes from Michael <unk> with true Securities.
Hey, good morning, gentlemen, nice results.
I guess.
I don't know who wants to the field. This 1 but I guess looking at the the guidance for the next quarter I know, you've historically got some seasonality with maybe of <unk> being a bit weaker, but what drives that sequential step down I mean, it sounds like there there is optimism and quoting strength bookings strength across all markets.
Or was there is there anything driving that.
The sequential weakness.
Between quarters here is the move into the first quarter.
Yes.
First of all others.
In our lineup of Mike there's kind of a.
Obviously, there is a shift in the leadership in terms of what's growing what's not growing and what's growing as the industrial sector right.
But it's.
There's a lot to consider here of the industrial demand.
Is a lot of it is short term in nature.
And it will it will be up and our challenge is to try to determine how much it will be up right.
So we tried to reflect we've tried to reflect some of that in the outlook.
But.
<unk>.
Quite frankly, we're not.
Did we reflect enough.
Sure I mean, it's.
No we haven't we haven't.
Normally when the purchasing managers index is north of 55.
We can't make it fast enough and we can't keep it in stock.
When it's when it's over 60.
Now.
It's in a it's in a world that we've never lived in before so.
So it's it's.
It's sort of.
And sort of off the edge of the of the map and so it's hard for us to predict exactly.
What are what the upside of our sales of kind of being on the industrial side.
The problem that it with that is we had so much demand in the fourth quarter debt.
A lot of our key inventories for key mix items were depleted.
No.
We're we're rushing to replenish those stocks.
But then there's a lead time theres of lead time, there and.
And so we have to add.
Materials on labor.
Right now.
Materials are a bit constrained we have are having trouble getting steel.
We are having trouble of getting some of our some of the product that we import.
Through the through the.
Through the ports.
And we're competing with with our own government on labor.
So Ali.
Holy Cow.
Yes anyway.
We're working we're working through the end.
We're keeping EPS and Fedex business.
Because.
Air shipping parts at our customer's expense from Asia.
Debt that we used for some of our components.
No.
It's it's an interesting time I think on the aerospace side.
The primary factor here is the Boeing ramp and.
With the.
Abrupt 6 and 737 Max production in March of 'twenty.
There was just a lot of componentry that was left in the system. So.
They are working through that overhang I expect quarter to quarter it will be better.
And I expect by the end of the year.
For the calendar year.
We will probably be through it.
And I think next year at this time.
Our capacity is going to be taxed with demand.
And so right now we're trying to think through.
How do we how do we position ourselves.
The mix wise, so that the.
Our capacity and the demand curve.
Intersect.
In the right place at the right time, and so that's really the calculus.
And so.
Theres lots of the lumps on the putting right now on the logistics side.
And it's not just for US I think it's just for the whole U S.
As we try to work through these issues so.
I expect this is just the normal exit of any of the pandemic.
I hope to never experience that again.
I think I think we could draw an agreement on that so it sounds like I mean aerospace, though you think I mean and based on on what you are building towards I mean, we'll probably see the continued gradual sequential improvement in the Mike you said industrial is going to be the big swing factor.
What about on the pricing side I mean are you.
You talked about some from expedited shipping.
The pass off and pass through of lot of these price increases and how is that impacting sort of your current contracts are there any any markets that might be more exposed or less exposed to pass through I know arrows usually of a full pass through but anything on the pricing side thats kind of raising the yellow flag that you're saying.
Well, it's the Devil's in the details here.
These expenses on expedited freight and expedite of materials and all of that sort of thing.
And just.
Per.
Pass through the night and <unk>.
Surprise for you so.
We have we have filters up to make sure that we have early warning indications of any excursions that we need to deal with right away and the.
And so we deal with them right away the either we have in our contracts of pass through on material costs.
We explained of our customers and our.
There is these extraordinary.
Expenses too.
Service your account and the.
And.
We sometimes have we sometimes share of those expenses, we sometimes passed them, along 100% and sometimes we don't and it.
It depends it's very.
The situationally dependent.
<unk>.
But we're confident we can manage through it.
Got it got it thanks for that color guys I'll jump back in the queue here.
Okay.
As a reminder that is star then 1 if you'd like to ask the question at this time.
Our next question comes from Steve Barger with Keybanc capital markets.
Hey, good morning, guys.
Good morning, Mike.
You talked about how strong industrial is just thinking about Aero, It's got a negative 15% comp from last year's <unk> do you expect positive year over year growth this quarter in Aero.
Good question, I think it's probably going to be flat it might be up slightly.
But it's not it's definitely not going to be a barn burner.
Right.
Yeah and last quarter, you had said there was some limited visibility around Aero order trends is that cleared up or just what is what are you seeing from your from from <unk>.
In terms of order rates.
It's definitely improved.
Yes.
It's substantially improved.
And I guess shifting back to industrial I know its hard to call the year, but would you guess the industrial business has double digit growth in FY 'twenty 2 just given how strongly the the year starting in the trends that youre seeing.
Yes, absolutely no question about it.
Yes.
And I understand you don't have semiconductor mix handy, but what is the message youre getting from the equipment manufacturers in terms of demand trends or just how are you looking at it in terms of visibility.
Right now of the message that we're getting is.
You can you can.
For our key customers, we can ship everything we can make.
As quickly as we can make it.
These are pretty sophisticated products.
Lot of.
There's a lot of process steps and special features so.
There is a.
There's the speed limit on how quickly you can get this.
These but.
The situation is.
Very good.
Alright. Thanks.
Yeah.
Our next question comes from Pizza Kubicki with Alembic Global advisors.
Yeah, Let me just follow on to the kind of Capex type of issues.
Capex came down quite a bit this year.
Wanted to ask how much do you expect to spend in fiscal 'twenty, 2 and is there a case to make that you need to build out your semi conductor of facilities.
Or is that too early to know too risky.
From your thoughts on that.
I think I think it looks to me like the Capex. This year is going to be a little bit on the light side simply because.
The year before the pandemic on was little on the heavy side as we were building out capacity to support.
Various programs of that capacities built out now and.
So it needs to be it needs to be put to work and.
And it's mostly in the aerospace side so as is.
<unk>.
The conditions improve.
That capacity will get utilized so I think overall I don't expect this year and last year it to be materially different.
Okay. Okay, all total stand at $10 million to $15 million type of a range okay.
And then.
Mike thinking about margins.
Can you sustain them at a pretty nice level. The only came in 2 points in this in this crazy year of fiscal 'twenty 1.
How fast are you guys thinking they come back as you know I think you've talked about maybe a half of point adjusted operating margin improvement each year or would the sharp increase in volume that you're taking maybe a full point or more in fiscal 'twenty..2 what is the right way to think about that.
Well you know it's.
It's going to be hard to.
Again, it's it's.
There's a lot of moving parts here.
Should do very well.
We're going to have increased volume over a reduced cost structure.
Debt alone is going to be very helpful right.
<unk>.
And we got to keep an eye on on the inflationary pressures because.
Those are going to be real and we have to make adjustments in pricing or surcharges or however, we want to manage those accordingly, so that's all in our.
<unk> to manage and.
And so we.
We just we just need to be on top of that game.
So.
Overall, I expect that the gross margin level to be the margins to do very well.
Now.
At the.
Operating income level, I think we're going to have to frontload.
SG&A expense too.
2.
Satisfy the requirements of a larger business each quarter as the year progresses. So thats.
That's just the way that works and so we expect to we expect to probably lose a couple of margin points.
On the on the EBIT line as we get ahead of the requirements for.
The engineers salespeople business management people customer service people as we whereas we.
Bring all of that back again.
Okay. So youre, saying the first half of the year, maybe maybe of loose some margin points.
You expect to do better on the second half of the year or are we talking about the full year.
Yes, I think.
I think Rob Rob probably most of those numbers, but other than me, but I think for the full year on we may be down whatever.
Okay.
Maybe up 1 percentage point on SG&A that kind of a yes, I think we're going to see some pick up in SG&A on the back half of the year as the the comparisons from sales take off will just see that front loaded cost structure as we bring the folks on so the the second half of the year you should see some overall operating margin improvement.
Okay. Okay.
Okay, we'll watch that.
And then just.
Last 2 for me on the defense side.
On submarines.
It sounds like maybe right now on Colombia, Theres not a ton of activity on the Columbia right now because you mentioned.
I think the year after maybe calendar 'twenty 2 as 1 of the production starts for you guys.
Are you thinking maybe fiscal 'twenty, 2 youll have maybe a little bit of of kind of a bathtub on.
Submarine revenue on.
As overall activity within the subs just so strong that it's kind of continued up into the right.
Yes, Peter.
<unk> Dan.
This year, we finished at the.
In the quarter up 40% on.
The.
Marine.
And I think going into next year, we will be starting to ship some of.
Or at least working on hardware for the Columbia and the.
This fiscal year and so we're expecting another 10% growth range for us on the marine side.
Okay on the Andrew.
We ended the share around $40 million.
Okay. Okay.
And is there any I know you guys have a lot of content on the F 35.
And as we go out 2 years or 3 years, I think that production profile starts to flatten a bit.
So I just wanted to get a sense because I know youre confident overall on the defense side.
Are you seeing any aftermarket stream from the F 35 at all.
I'm just wondering maybe how you could potentially offset that in the mid term when production volume starting to flatten.
Yeah, no we're not we're not seeing it yet okay.
Okay.
Okay, Okay fair enough.
Okay.
So just overall, Mike your confidence on the defense side is just kind of new business wins that sort of of thing.
Yes, there is.
Yes, there's a lot there's a lot going on in the defense side there is theirs.
Platforms beyond the F 35.
The we can we can talk about.
<unk>.
And then there is.
Frankly, there is some that we shouldnt talk about.
Yes.
But we're.
We're happy with with the.
On the suite of of our positions and the.
On where this whole thing is going.
And.
And we're sort of integrated well integrated with with the right with.
With the right.
Need contractors.
On all of these programs.
And we have we have an important cause.
<unk>.
And expanding positions on all of these programs.
Yes, Okay. That's great. Thanks, very much guidance.
Our next question comes from Michael the terminally with true Securities.
Hey, guys. Thanks for taking the follow up.
Maybe just on aerospace specifically in the the aftermarket and distribution what are you guys seeing there we continue to hear.
<unk> optimism from suppliers that as we see more and more cycles, we're going to start to see that airline spending kick in but are you seeing any sort of restocking yet maybe any color that you can provide from from.
Product that the distributor channel on or are you seeing more pull through there because I would think that.
That's going to recover and snapped back much quicker than the the OE production side, but any any color on that.
Yes.
We.
The aerospace distribution channel has been.
Let's say interesting we spent a lot of changes in.
Management and Thats.
Changes in ownership.
And so.
We've.
And I think that's sort of.
Interrupted there the.
The momentum in previous years.
But.
Net.
It's all coalescing again.
And we're seeing sort of.
We're seeing a year ahead, the it looks it looks like it will be up substantially double digits in aerospace distribution.
Okay. Okay is it is it anything.
Is it more tied to engine shop visit is it some of the component of accessory repair that we should be looking out for I mean, we're of the bulk of your your kind of products going into is it more on the airframe side I guess engine side.
Well, it's it's all of the above I think I think now that.
Now that the the <unk>.
Panic is over and the crisis is over.
Relative to air travel and all of that sort of thing.
Distributors had been.
Really on frozen in terms of order rates and.
Trying to maintain their cash flows and so on and so forth well, there's renewed confidence in air travel.
On the distributor can only be the distributor if they have items to distribute.
And so they are building back their inventories as we speak and.
So that's that's we're seeing that as a as a.
The pickup in our business and that will that will.
That'll have that'll be probably stronger each quarter this year.
Got it got it last 1 for me I think you mentioned.
Some positive comments about wide bodies and maybe.
I guess better demand pull on build rates by the end of the summer it seems.
It seems like there is still of lot of uncertainty there, but I think you called out the triple 7 but broadly are you seeing any leading indicators on the wide bodies of the 870 <unk> hundred 50, Youre other significant platform.
No we're not seeing any any news or any direct indication that things are better there.
The fact that Europe is opening up and desperately needs.
Americans to travel there and spend their dollars.
Is.
An important aspect of that and the fact that Americans want to go to Europe and spend their dollars. There is an important aspect of that so I think I think that.
Air travel for those ships is going to be.
It's going to rebound.
More quickly than any of anybody expected.
Okay.
Got it alright, thanks, guys.
Yep.
Our next question comes from Joseph P kind of like you with DFS.
Good morning, guys. How are you good morning, good morning.
You had mentioned inflationary pressures across the business, obviously, specifically higher steel costs, but also some labor cost pressures just curious about half of our RBC is along in terms of automating its factories.
In terms of robotics et cetera, the offset some of those labor pressures.
Well I mean, we're.
We are pretty advanced in terms of.
Of of factory automation.
A lot of our a lot of our products because of the nature of who we service.
Are the lot sizes are small.
So it requires a little bit different automation concept.
And then the knot and.
And so.
It's taken us years to to determine the right.
Strategies and the.
The improvement in manufacturing technology for robots and machine tools and the integration between robots in machine tools.
How that all works has gotten so much better.
And in the courses in mechanical engineering at the universities that have focused on.
Improving the credentials for engineers in control engineering has been.
It has been valley.
Evaluable to us and so on.
Over the past half dozen years, we've been able to take all of that and make the.
The large improvements in gains in our plants.
Great. Thank you and then just my second question was just on.
The restructuring and consolidation.
Costs in the quarter I think you had a gain on sale of a surplus of building just any commentary maybe around.
Further opportunities to consolidate the manufacturing base or maybe factory count at quarter end.
How thats trended versus the pre pandemic.
Yeah the game.
<unk> from last year that sort of the adult who we sold down in Texas last year on a comparison purpose. Some of the negative restructuring we had fourth quarter. We're just finalizing the the moves that we're making on the west coast with some of our small plants.
Talked about in Q2 on Q3.
Where we combined 2 plans together and we combined 1 plan from a 2 building scenario 2 of 1 billion scenario.
So right now there's no major consolidation planned.
But we're always looking of ways to become a little more efficient with our real estate in our manufacturing facilities.
Thanks I appreciate it.
We have a follow up question from the line of Michael <unk> with true Securities.
Hey, Thanks, guys, sorry, just 1 more looking at the balance sheet cap structure. I know you guys have been talking about M&A for a while we've been asking about M&A for a while but.
Clearly the strong balance sheet, maybe a little bit of.
<unk> balance sheet in terms of generating returns.
Outside of M&A and I know you said, maybe maybe it's something to be seen soon here, but what else are you guys thinking in terms of the cap structure leverage.
It is the dividend.
Is it a special dividend anything else you guys are kicking around to maybe think about overall returns.
Okay.
You know, Mike we still consider ourselves of growth company, we want to be able to grow the top line to 10% compound it and so we're out looking hard for acquisitions, we want to redeploy that money back into the into growth into organic growth and acquisition growth.
For our focus on targeted.
Got it got it alright, perfect. Thanks, guys.
Yeah.
I'm showing no further questions in queue at this time I'd like to turn the call back to Dr. Hartnett for closing remarks.
Well that concludes our <unk>.
The conference call on fiscal year, 'twenty, 1 and as we move into fiscal year 'twenty 2.
We're very optimistic and.
And I think the.
The situation has changed where now it's.
How much can you make on how quickly can you make it and deliver it to us which is exactly the kind of problem that we want to be dealing with so we'll be looking forward to report on that more in July. Thanks, Thanks for participating.
This concludes today's conference call. Thank you for participating you may now disconnect.
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