Q2 2022 Kaman Corp Earnings Call
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Ladies and gentlemen, thank you for standing by and welcome to the Command Corporation Q2 2022 earnings call. At this time, all participants are in a listen only mode after the speakers present are available in the last Senate Ange session. So ask a question during the session. I need to first start one on your telephone.
I would now like to turn the call over to your host, Carrie Bear. You may begin.
Good morning. Welcome to Command 2nd quarter 2022 earnings call. Leading the call today are Ian Walsh, Chairman, President and Chief Executive Officer and Jamie Cougan, Senior Vice President and Chief Financial Officer. Before we begin, please note that the information discussed during today's call will consist of forward-looking statements setting forth our current expectations with respect to the future of our business, the economy and other future events.
These include projections of revenue, earnings, and other financial items, statements on plans and objectives of the company or its management.
Statements, the future economic performance, and assumptions underlying these statements regarding the company and its business. And based on here, the American Fund, you
The company's actual results could differ materially from those indicated in any forward looking statement due to many factors. The most important of which are described in the company's latest filings with the Securities and Exchange Commission, including the company's second quarter 2022 results included on form 10Q and the current report on form 8K filed yesterday evenings together with our earnings release.
We also expect to discuss certain financial measures and information that are non-GAAP measures as defined in applicable SEC rules and regulations.
Reconciliation to the company's GAT measures are included in the earnings release filed with yesterday's 8K.
Finally, we posted an earnings call supplement on our website which provides additional context on our financial performance.
You can find this presentation at www.command.com slash investors slash quarterly earnings call. Now I'll turn the call over to Ian Walsh.
Thank you, Carrie. Good morning, everyone, and thank you for joining us for our second quarter 2022 earnings call. Thank you.
I'll start by providing highlights on the quarter and then share some operational and business updates along with some respective innovations each segment before passing the call over to Jamie for a more detailed discussion of our financial results and output for our remainder of the year. Thank you.
Results for the second quarter were in line with our expectations with sales, earnings, and adjusted EBITDA higher than the last quarter but lower than the second quarter of 2021.
We continue to expect stronger sales and margins in the second half of the year. Gross margin for the company decreased slightly to 32.4%, 150 basis points lower than the second quarter of 2021.
Compared to both periods, JPF sales and associated gross profit will lower while sales margins improve for engineer product segment. The
So joining command, I've worked with the board and our new leadership team on positioning our company for organic and inorganic growth and our highly engineered and precision parts businesses and improved profitability across all our businesses with the goal of achieving top court-off performance in the markets we serve over time. We are here looking for some skills. Be modern on your career so you can achieve a better position?? in your society. Increasing your reach, ouronas requires your become a stronger position director. That??rithsy retention helping your memory opportunity to be prepared to see what is needed really. time.
In May, we were extremely excited to announce that command signed a definitive agreement to acquire the Parker-Hennepin Aircraft Wheel and Brake Division.
This transaction, which is expected to close before the end of the year, offers a unique opportunity to expand our highly-engineered product portfolio by investing in a high-margin quality asset with potential for growth.
For more than 80 years, aircraft wheel and brake has been a trusted provider of mission critical of the real and great technology products and solutions. For more than 80 years, aircraft wheel and brake technology products and solutions.
They have a strong OEM and aftermarket portfolio of more than 100 platforms specializing in wheels, brakes, and related hydraulic components for helicopters, fixed wing, and UAV aircraft.
They have installed base of approximately 450,000 aircraft, globally service by distribution and longstanding global relationships with leading defense and general aviation F F F F F F customers.
They provide customized proprietary designs protected by intellectual property.
Aircraft Wheel and Brake operates out of one centralized facility in Avon, Ohio, providing a full suite of capabilities including design, development and qualification, as well as manufacturing, assembly, product support and repairs.
The complimentary strength of aircraft wheel and brake will advance our strategy by extending the breadth of our product offerings, increasing our exposure to attractive high-margin Afro-market products, and driving meaningful near-term margin and cash flow accretion. The The The The
Now let me return to our business discussion. Demand across the commercial, business, and general aviation markets continues to show signs of improvement through additional orders for our bearings, springs, seals, and contacts products. The
Philcebone Airbus were hired for the fourth quarter in a row, a solid indicator that airline demand is indeed rebounding.
These increase to support the higher sales and improve margins we anticipate over the balance of a year.
I'd like to highlight the performance for each segment and also share some of their respective innovations that will continue to help us grow organically.
Our engineer product segment delivered outstanding results with both sequential and year-over-year sales, adjusted EBITDA and margin growth.
Quarterly sales increase by more than 10%, and adjusted EBITDA increased more than 25% compared to both periods. compared to both periods.
Not only was medical and industrial demand strong, but sales of commercial bearings also improved.
Border rates for these products remain very robust. The backlog has increased 33% since year end to $225 million.
In addition, we are well positioned to meet our sales target in the second half of 2022 as a significant portion of our expected sales volume is already in backlog.
These trends provide confidence for expected performance in the back half of the year.
Our employees continue to provide innovative solutions that push the boundaries of application engineering and material science.
to meet the needs of our customers.
Once such technology and our engineer product segment is an opportunity to expand into medical devices for vascular circulation.
We are developing a solution for high RPM pumps used in blood circulation.
This solution provides superior quality for a minimally invasive option that can be used directly in the heart while allowing doctors to reduce surgical time and have more flexibility during procedures. This solution provides superior quality for a minimally invasive option that can be used directly in the heart. This solution provides superior quality for a minimally invasive option
We are working with our customer as they move through the certification process and we anticipate commercial readiness in 2024 to 2025.
In addition, our Engine and Products team has built a great relationship with Gulfstream.
Over the years, providing bearings for this G650 and G700.
Their family of business jets is expanding into the G800 and G400. We'll be using the same landing gear, wing and fuselage.
which will provide a step up in bearing sales beginning in 2023.
Additionally, we've been working with Gulfstream on a new bumper design to replace the current bronze bumper in their wing, which could be used to retrofit their entire fleet.
Our precision product segment continues to transform as we pivot to new technologies and markets.
Sales and margin in the first half of 2022 for the segment were low compared to the prior year. We do expect to meet plans for the full year.
In the near term, we continue to pursue JPF opportunities for DCS orders that are expected to increase our backlog and extend the life of the program.
Long return, we anticipate offsetting the reduced volume with organic growth and other areas of our business.
We are excited about the opportunity we have to expand autonomous technology in this segment with our purpose-built cargo UAV unmanned aerial system and KMAX Titan optionally piloted the no Knife N
In June , we announced an equity investment of $10 million in near-earth autonomy, which will accelerate the development of our autonomous technology and help to establish an industry standard and autonomous cargo solutions for the next generation of aviation. In June , we announced an investment of $10 million in near-earth
We've been working with NearEarth for several years and are excited to be part of a growing autonomy market.
This partnership also leverages commands core competency in precision parts manufacturing and we are now the preferred manufacturer of autonomous parts and components for NERR.
We are on track for a demonstration of a full-skill cargo UAV manual system later this year.
Our initial adjustable market, this fully autonomous medium lift vehicle, is the US military and special operations commands along with a wide range of commercial applications such as servicing oil platforms, search and rescue, humanitarian relief and middle mile delivery for logistics companies.
Our structure segment continues to focus on strengthening operating margins and seeking new, more profitable programs that fit our core capabilities. The new, more profitable programs that fit our core capabilities.
Sales in the first half of 2022 were low compared to the prior year. However, we do expect both higher sales and margins the remainder of the year.
We continue to see positive signs of operational improvement at each of our structure sites while taking the necessary cost outmeasures to right size those businesses. For example, we are continuing to make progress in our facilities consolidation plan at Jacksonville and just recently signed a definitive agreement to sell our Mexico facility, lowering the operating cost while moving the vine back to Jacksonville sites.
In addition, we continue to see improved performance from a Vermont facility.
During the quarter, the team successfully applied lean tools and process improvements to several product lines, including medical imaging panels used in equipment at cancer treatment facilities, resulting in a 1500 basis point improvement in gross margin.
We are also focusing on winning new profitable business. Recently Gulfstream recognized command for a quality manufacturing performance of parts to the G700 engine which is driving more opportunities with Rolls Royce.
I am pleased with the progress we have made in all our businesses with safety, quality, delivery, and cost out. This is a multi-year journey and there is still significant progress to be made as we continue to focus on customers' needs, our operations, our supply chain, and the communities in which we serve. None of this would be possible without relentless focus of our leadership teams and employees around the world on implementing our Operations Excellence Model designed to deliver improved operational performance and gross margin expansion. For more information, visit www.fema.gov
Looking ahead, we feel confident that the return of the commercial aerospace market and the durable demand in aviation, medical, and industrial markets will benefit our high-margin engineer product segment.
Precision products will continue to transform our structures segment, we'll continue to see the benefits of our operations excellence model in addition to new, more profitable programs. In addition to new, more profitable programs.
We're also enthusiastic for several of our new innovations as we position the company for testing class performance. We're also interested in the company. We're also interested in the company. We're also interested in the company.
Lastly, we remain disciplined in our approach to M&A and capital allocation. We are very excited about the strategic investment in aircraft wheel and brake and look forward to closing with Parker and integration of their high performance team with command.
We will continue to identify and assess strategic opportunities that provide the highest return for our shareholders.
Now I'll turn the call over to Jamie for more detailed discussion of our financial results.
Thank you Ian, and good morning everyone.
Today, I will discuss our second quarter results and provide an update on our outlook for the year. and provide an update on our outlook for the year.
On a consolidated basis, our net sales in the second quarter were $161 million compared to $158 million in the first quarter of 2022 and $182 million in the second quarter of 2021. Today logged with the
The decline of 12% year over year was largely due to lower sales for our JPLF program.
This was partially offset by increased sales in the commercial and medical markets for our bearings, spring, seals and contacts.
Adjusted EBITDA in the second quarter was $16.4 million, or a margin of 10.2%, compared to $12.2 million, or a margin of 7.7% in the first quarter of 2022.
Improved results were driven by higher volumes of our bearings, strong sales, and margins of our springs, seals, and contacts into medical and industrial markets, and increased sales of engine aftermarket components in our engineered product segments.
Additionally, we saw a benefit from our KMAX Spares and Support Program in our precision product segment. This was partially offset by lower sales and associated gross profit on our Fuse programs during the period. C
For the year-over-year comparison, adjusted EBITDA decreased 39 percent and margin declined 460 basis points.
The decrease resulted primarily from lower JPS sales, as the second quarter of 2021 had a much higher volume.
Robust Sales in the second quarter of 2022 for our bearings, spring, seals, and contacts to commercial aviation and medical markets, helped to partially offset these declines.
Now I'd like to walk through each of our segments, beginning with engineered products.
Compared to the first quarter, volumes increased in the second quarter for bearings products serving commercial and military aviation as well as medical and industrial end markets.
Both sales and margin increased for seal-sprinking contacts used in medical products.
and sales and margin increase as well for our engine aftermarket product.
Adjusted EBIDA for the second quarter, increased 25% to $21.6 million with a margin of 24.1%, a 290 basis point increase to quench the link.
Year-over-year results improve significantly as well, with higher demand in medical and industrial end market.
Adjusted EBITDA increased more than 30% and margin increased 340 basis points.
Sales improved primarily on bearing products serving commercial aviation as we continue to see a nice recovery in the thin market. It will be a policy 6 engine of best battery
Additionally, sales and gross profit improved on seals, springs, and contacts for medical and industrial applications, and sales were higher for our engine aftermarket parts.
The demand for our steel springs in contact as well as for our bearings products has continued to improve.
Looking ahead, we expect continued strength in these markets for the remainder of 2022. Order intake during the quarter was robust with a backlog increase of 33% since the beginning of the year. Based upon the developments we are seeing in order rates in our engineered product segment, we remain confident in our outlook for the full year for the underlying business as a significant portion of our second half sales are already in backlog.
Now moving to our precision product segment, compared to the first quarter results decreased in the second quarter due to lower sales and associated gross profit for our abuse programs. This was partially offset by an increase in sales in margin for KMAX spares and support, as well as for our SH2 programs.
Adjusted EBIDA for the second quarter was $3.6 million, with a margin of 8.7%.
Year-over-year results for this segment declined significantly from an adjusted EBITDA of $20.5 million and margin of 28.6 percent in the second quarter of 2021, primarily due to lower JPS sales and associated gross profit as the second quarter of 2021 had a much larger volume.
The contribution from JPS will be lower in 2022. However, we do expect to deliver 25,000 to 30,000 fuses this year. Based upon the timing of deliveries, we expect the remainder of the year to be concentrated in the third quarter of 2022, which includes an $11 million DCS sale previously anticipated in the second quarter of 2022. The
We are managing our current JPF backlog and looking to secure additional DCS orders in the near term. We also continue to make progress in R&D efforts with our patented height of burst sensors, and we are developing new sensor infusing technologies for our existing family of safe and armed devices.
Now moving to our third segment, structures.
Compared to the first quarter, our results were relatively unchanged. Our ability to maintain production rates at one of our sites was impacted by a fire at one of our suppliers in the second quarter of 2022. Additionally, volumes were lower with the wind down of the AH1Z program. These losses were mostly offset by higher medical imaging sales in margins. Adjusted EBIDA for the second quarter was $57,000 with a margin of 0.2%.
Year over year results improved from an adjusted EBITDA loss of $0.7 million and a margin loss of 2.1%. Mostly due to higher sales on our Rolls Royce and Imaging program. This was partially offset by the disruption of the incoming material from the fire at one of our suppliers in the second quarter of this year.
We believe that we will be able to recover some of the lost opportunity from the quarter and expect higher sales in margin in the second half of the year. We're continuing to see improvements for our structure segment as our team applies our operations excellence model. Specifically, our Vermont facility is currently performing above our long-term targets for our structure segment.
Over time, the financial performance for the segment is expected to improve as we continue to apply the best practices from our Vermont facility.
SGNA increased $530,000 compared to the second quarter of 2021 to $39.3 million, or 24% of net sales, as a result of corporate development cost associated with the acquisition of aircraft wheel and brake. When adjusted for these costs, SGNA decreased as we continue to manage costs and seek opportunities to increase efficiencies across the organization.
diluted earnings per share were 14 cents for the quarter, which was equivalent to the first quarter of 2022, and lower than the 42 cents in the second quarter of 2021.
On an adjusted basis, diluted earnings per share were 31 cents compared to 15 cents in the first quarter of the year.
For the first six months, adjusted deluded earnings per share decreased from 85 cents per share in 2021 to 46 cents per share.
The decline from the first six months of 2021 was primarily within our precision product segments, with an impact from JPM of 53 cents per share, and increased our endespend for this segment of nine cents per share. These reductions were partially offset by strong performance from the engineered product segments, which resulted in an increase of 36 cents per share. the restoration of the new product is intended to reduce the cost of installing new product segments in theules toward experimental teams in different areas, with groups constructed into details and enhance additional bes?ability on a degree of debate. This processing cycle caused no Thinking and no extensive discussion of the survey period that we want to figure out again, looking into how the ici built into the machine in large quantities keeps our here.
During the quarter, we had cash usage from operations of $26 million. However, over the last 12 months, we've generated free cash flow of $17 million. We expect the second half of the year to be a period of strong cash generation, allowing us to achieve our plan a free cash flow of $40 to $50 million for 2022. The plan of free cash flow of $40 to $50 million for 2022.
Now I'd like to discuss our outlook for 2022.
We continue to expect the cadence of earnings to be weighted towards the second half of the year. Our results for the second quarter were in line with our expectations, with lower sales and margin for our JPS programs partially offset with strong sales into medical and industrial end markets, and improved performance in commercial, business and general aviation.
Based upon the impact of the material shortage caused by the fire at one of our suppliers, lower than expected order rates in our structure segment, and current pressure from foreign exchange rates, we are revising our sales outlook downward to a range of $700 to $715 million for the full year, which also assumes the sale of three additional K-MAX aircraft in the year.
Given the favorable sales mix and the strength we have seen in our engineered product segment.
We remain on target.
to meet our guidance for earnings, EBITDA, and free cash flow for 2022, excluding the expected benefit from the acquisition of Parker Hannifin's aircraft wheel and brake business.
With that, I'll now turn the call back over to Ian for closing remarks.
Thank you, Jamie. Command has a solid strategy for profitable growth and is role-positioned to achieve top core top performance in each of our segment over time. Thank you, Jamie. Thank you, Jamie. Thank you, Jamie. Thank you, Jamie. Thank you, Jamie. Thank you, Jamie. Thank you, Jamie. Thank you, Jamie. Thank you, Jamie.
In addition to the aircraft wheel and brake acquisition, we continue to invest in our products and talent and focus on winning more profitable programs.
These investments in conjunction with the opportunity to develop autonomous technology with near Earth will advance command's position as a technology differentiator in our aerospace, defense, industrial, and medical markets. The is a technology
I'd like to close by reminding our audience of our overarching company strategy, which focuses on three strategic pillars. First, we will grow our business through innovation, accelerating investments in our products, facilities, and people. Second, we will continue to be disciplined in our approach to accretive M&A and capital allocation.
Third, we will continue driving operations excellence across all our businesses until we are best in class. Executing on the strategy will lead us to top court-owned financial performance and our segments.
All are aimed at improving EBITDA margin, recast flow conversion, and return on invested capital that lead to exceptional shareholder returns. All are aimed at improving EBITDA margin, and return on invested capital that lead to exceptional shareholder returns.
I'd like to thank all of our dedicated and talented employees around the world who are working hard to meet our goals, enabling our customers to achieve greater and all that they do every day.
With that, I'd like to open a line for questions. Can we have our first question, please?
Ladies and gentlemen, if you have a question at this time, please press star 11 on your telephone. We'll pause for a moment while we compile our Q&A roster.
First question comes from Larry Follow's TJS Securities. The line is open.
Great. Thanks. Good morning guys and gals and thanks for taking the questions. I guess just to confirm or sort of some that the guidance or the quarter itself sounds like it was basically in line. You don't got the quarter, but it was basically in line with your expectations, a little bit of a shift on a smaller order on the on the JPS and then obviously the fire and stuff hurt your a little bit of structures too. But outside of those couple of things, it seems like.
relatively in line with your expectations just a little bit below uh... my numbers and a couple of cars on the street that glitchcraft
Yeah, hey Larry, this is Ian. Yes, you're absolutely correct. We are effectively working to our plan and on plan. The only shift that occurred was the timing of the JPS. Right. We've got those builds done. We've got the boat schedule set. We know exactly when they're going out. They just shipped it from Q2 to Q3. Little FX headwind. And then we did have a fire back in March that has caused delays in some of our structures delivery. So that's why we got the shift in sales.
Okay, great. And then pretty encouraging to see engineer products get margin continue to rise nicely, sequentially, year over year on the higher sales. Can you just take a step back and maybe just your thoughts on, I know like pre-COVID, these margins in this segment were EBITDA on the EBITDA basis were in the high 20s. Your thoughts on sort of getting back to that number without an exact timeline, but hopefully the next couple of years and then obviously as you.
layer in parker hathen some wheel break business perhaps you can even you know push 30% that segment is that you know again not a timeline but is that something that it's achievable you know you're horizon
It is, and we are highly confident that if you look at the components, the businesses that are in the engineer products business, historically accepting strong performers, and I would even add that.
COVID, you know, like a lot of businesses forced us to really take a hard look at our cost structure, fixed and variable costs. So we've really gotten those costs down as a function of COVID and maintaining that lower cost structure, watching the markets recover, looking at that drop through, which is exceptionally strong. So to your point, yes, we feel very confident that we will be back up at those high 20s, low 30s levels of performance. And I'll just, you know, a shout out to our future partners here at Aircraft Wheel and Brakes. This is a business that also reflects
sales? Is that like a late 23, 24 timeline? And then, again, longer term potential as product. Just looking at it, it seems like it certainly has potential to deliver as many, if not maybe even a lot more, it seems like a much broader audience than the K-Maxx. So, I think that's delivered 750 million or something in sales over its lifetime. So, it seems like this cargo UAV has potential to be.
maybe exponentially higher than that. Is that a fair statement?
That's a fair statement. We are super excited about the demand signals that we're getting both on the military and on the commercial side for cargo UAV.
This market is exceptionally large on both sides, but on the commercial side in terms of timing, it's hard to predict, but I can tell you from recent meetings with certain customers and some of the markets that we've talked about, there is a huge requirement slash demand for that type of application, oil and gas being one in particular. So in terms of timing, yes, we would like to move as quickly as we can. We're anticipating, you know, probably in the 20.
Hey, good morning guys. I'm Jake Abon for Steve.
Hey, Jacob.
Hey, my first question, just real quick on the JPF push out of that 11 million, does that push the rest of the schedule further to the right or does that just add the 11 million on top of three Q's plan deliveries?
Yeah, that's exactly what it does. So with that, it's expected third quarter performance, doesn't shift our expectations for the full year. And again, with those fuses, Ian mentioned, those are built ready to go. As you know, JPS can be lumpy from quarter to quarter. But in this regard, this was just a shift out of the second and into the third, about $11 million of sales. And these are DCS fuses. So they come in a little bit higher margin.
Okay, great, thanks. And then second, on the non-JPF backlog, seeing as a pretty nice step up there, particularly in engineered products, just curious how far out that backlog stretches, timeline-wise, and would you say that's an elevated backlog? Or maybe better asked, what's an ideal backlog size look like for you?
So the 1st part of that is.
That segment has historically had very strong backlogs. We are now at a position where a lot of those businesses in that segment have record backlogs and extends all the way through the end of this year and already into next year. So for example, 98% of our backlog is already set for this year. So we know exactly what we're going to be building for the remainder of the year. So.
In terms of entitlement levels, again, we're seeing extremely strong demand in all those markets on the Asian report side, which is exciting for us. Yeah, and just to get to remember in that business, it's relatively short cycle. So although we will have some longer term contracts, those orders are typically for delivery in those six to 12 month time frame. So it's not unusual for us to continue to build that backlog up and continue to see growth as that happens.
Okay, got it. That makes sense. Just my last question here, seeing some production rate increases a little further out with Boeing and Airbus, that's obviously good for you guys from a pure volume standpoint, but do you think you're in a position to capture additional content there and do you have the capacity for something like that?
We do indeed. We've demonstrated that we've already taking more content just during the pandemic. We've just, during the pandemic,
The design cycle and certification process, if you know, is fairly long and intensive, but we've demonstrated that we can provide better quality delivery, better technology. So we've taken some share during the COVID, we participate doing the same thing, those bill rates are climbing, the market is recovering, there's no question about it. So we're anticipating really strong growth. Yeah, just to add, with the strength of our balance sheet, we Rainstick decreases permanent level in leading to longer course. If we lose the risk of luxury control over the new potential in the future, specifically.
During the pandemic and downturn, we took the opportunity to make investments in those businesses and new cells, new manufacturing processes, and new equipment to help us be able to manage that capacity load.
Okay, great. Thanks for taking the questions, guys.
must be able to manage that capacity load.
Thanks for taking the questions, guys.
Yeah, you got it. Thanks, Jacob.
Again, ladies and gentlemen, if you have a question or a comment at this time, please press star 111.
I'm not showing any further questions at this time. I'd like to turn the call back over to Carrie Bear.
Thank you. I do believe we have a few closing remarks here from Ian before we close the call. Yeah, just appreciate everybody's time, but just in terms of adding some clarity to our performance, certainly for Q2, which is in line with our expectations, but really focusing on the back half of the year. We are supremely confident in our ability to deliver in the back half of the year. As we just mentioned, our backlogs extend through the year. We know exactly what we're going to be building.
and when we need to deliver it. We've got material on hand or inside the proper lead times, which we know have always been moving, but Spy Chain teams and the Ops teams are very confident that they've got all the right material to build the things that we need to build.
We have the manpower. Outside of a few normal open rack and things like that, we're very well staffed to deliver on the production for this year. And we also demonstrate that we know how to deliver in the second half of the year historically. And we're going to deliver on the second half of the year in the figures in this chart today.
So all of our segments are in strong place to get to that point for the second half of the year. Outside of a recession and headwinds a little bit with...
with the FX. Again, we're counting for that. And we are super, super excited to be closing with our new friends at aircraft wheel and brakes here in the second half of the year. Really exciting business, perfectly situated for our type of environment and where we're trying to grow the business of things we're trying to do. The things we're trying to do. The things we're trying to do. The things we're trying to do. The things we're trying to do.
So overall, again, for the second half of the year, we know what we need to do. We're highly confident we'll get there to deliver on those numbers.
All right, thank you everyone for joining the Command Corporation's second quarter earnings call today. We're looking forward to talking with you in the fall on our third quarter call. And with that, we're at all today. We're looking forward to talking to you. The gentlemen, so some clues today's presentation. You may now just come back in a little bit in a full day.
The conference will begin shortly. To raise your hand during Q&A, you can dial star 11. The conference will begin shortly. To raise your hand during Q&A, you can dial star 11.
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To raise your hand during Q&A, you can dial star 11.