Q3 2023 Ducommun Inc Earnings Call
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Speaker 1: Good day and thank you for standing by. Welcome to the third quarter of 2023 to Common Learning's conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. So withdraw your question, please press star 11 again.
Good day, and thank you for standing by welcome to the third quarter 2023 Ducommun earnings conference call.
At this time all participants are in a listen only mode.
After the speaker presentation, there will be a question and answer session to ask a question. During this session you will need to press star one on your telephone you will there.
To ensure an automated message advising your hand, just raised to withdraw your question. Please press star one again.
Speaker 1: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Mr. Sumon Mukherjee, to common senior vice president and chief financial officer. Please go ahead.
Be advised that today's conference is being recorded.
I'd now like to hand, the conference over to your Speaker today, Mr. Schumann, Leukergy Ducommun Senior Vice President and Chief Financial Officer. Please go ahead.
Speaker 2: Thank you and welcome to Duke Amman's 2023 third quarter conference call. With me today is Steve Oswald, Chairman, President and Chief Executive Officer.
Thank you and welcome to Ducommun was trying to drive <unk> third quarter Conference call with me today are Steve Oswald Chairman, President and Chief Executive Officer.
Speaker 2: I'm going to discuss certain limitations to any forward-looking statements regarding future events, projections or performance that we may make during the prepared remarks or the Q&A session that follows.
I'm going to discuss certain limitations to any forward looking statements regarding future events projections or performance that we may make during the prepared remarks, all the Q&A session that follows.
Speaker 2: Certain statements today that are not historical facts, including any statements as to future market conditions, results of operations and financial projections, are forward-looking statements on the direct private securities litigation reform act of 1995 and are therefore respected.
Statements today that are not.
Historical facts, including any statements as to future market conditions results of operations and financial projections are forward looking statements under private Securities Litigation Reform Act of 1995.
Speaker 2: These forward-looking statements are subject to risks and presentties and other factors that could cause actual remarks to discern materially from the future results expressed or in blind by such forward-looking states.
Therefore perspective.
Forward looking statements are subject to risks uncertainties and other factors that would cause that could cause actual remarks to differ materially from the future results expressed or implied by such forward looking statements.
Speaker 2: Although we believe that the expectations reflected in our forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct.
Although we believe that the expectations reflected in our forward looking statements are reasonable we can give no assurance that such expectations will prove to have been correct.
Speaker 2: In addition, estimates of future operating results are based on the company's current business, which is subject to...
In addition estimates of future operating results are based on the company's current business, which is subject to change.
Speaker 2: particular risks facing the common include amongst others, the fickle cavity of our end-use markets, the level of U.S. government defense spending, the timing of orders from our customers, legal and regulatory risks, the cost of expansion and acquisition, competition, economic and geopolitical development, including supply chain issues and rising interest rates. And then make...
Particular risks facing ducommun include amongst others.
Our end use markets the level of U S government defense spending timing of orders from our customized legal regulatory and risk cost.
Cost of expansion and acquisitions and competition economic and geopolitical developments, including supply chain issues and rising interest rates and that may add to that.
Speaker 2: These risks and others are described in our annual report on form 10K files with the SEC and our forward looking statements are sub.
Or otherwise.
These risks and others are described in our annual report on Form 10-K filed with the SEC and our forward looking statements are subject to those risks.
Speaker 2: Statements majoring in the score are only as at the time made and we do not intend to update any statements made in this presentation except if and as required by regulatory authority.
Statements made during this call are only as of the time made and we do not intend to update any statements made in this presentation, except if and as required by regulatory authorities.
Speaker 2: This call also includes non- GAAP financial measures. Please refer to our filings with the SEC for a reconciliation of the gap to non- GAAP measures referenced on this call.
This call also includes non-GAAP financial measures. Please refer to our filings with the SEC for a reconciliation of the GAAP to non-GAAP measures referenced on this call.
Speaker 2: We filed our Q3 2020 3 quarterly report on 410Q with the SSE today.
We filed our Q3 charges <unk> quarterly report on Form 10-Q with the SEC today.
Speaker 2: I would now like to turn the call over to Steve Oswald for a review of the operating results.
I would now like to turn the call over to Steve Oswald for a review.
All of the operating results.
Speaker 2: Thank you, Siman, and thanks everyone for joining us today for our third quarter conference call.
Thank you Stefan and thanks, everyone for joining us today for our third quarter conference call.
Speaker 2: Today in this usual I'll give an update of the current situation of the company after which some of our reviewer are financials in detail.
Today and as usual I'll have to give you an update of the current situation of the company.
Afterwards, I will review our financials in detail.
Q3 was an outstanding quarter.
Speaker 2: as they grow our top line both year by year and sequentially. Delivering revenue growth of 5% versus 2020.
As we grow our top line, both year over year and sequentially.
Delivering revenue growth of 5% versus 2022.
Speaker 2: and reaching a new all-time quarterly record of full revenue of 196.3 million. I express my ties to their
And reaching a new all time quarterly record for revenue of $196 3 million.
The previous high Big in 2012.
Speaker 2: As mentioned in the press release, the ramp up of our wide body aircraft business, which was welcome news.
As mentioned in the press release, the wrap up of our wide body aircraft business, which was welcome news.
Speaker 2: Along with a return to growth of our military business helped to drive revenue and achieve this new mouse.
Along with a return to growth the military but of our military business helped to drive revenue and achieved this new milestone.
Speaker 2: We have big goals for 2027. Discussed that our investor meeting last December .
We have big goals for 2027 discussed at our Investor meeting last December and.
Speaker 2: and we need to be realizing this level of revenue and of course higher as we move forward over the next few years.
And we need to be realizing this level of revenue and of course higher as we move forward over the next few years.
Speaker 2: The contingent recovery and commercial aerospace once again delivered in Q3 with Boeing's twin-IO platform business in aggregate being of almost 170% year over year.
The continued recovery in commercial aerospace once again delivered in Q3 with.
With Boeing's twin aisle platform business in aggregate being up almost 170% year over year.
Speaker 2: Great to see. Along with Airbus A220, also having good growth of 33% year-
Great to see along with Airbus <unk> hundred <unk> also having good growth up 33% year over year.
Speaker 2: Overall commercial aerospace with Boeing and Airbus and others was up 14% from Q3
Overall, commercial aerospace with Boeing and Airbus and others was up 14%.
From Q3 2022.
Speaker 2: Despite the continued challenges with the quality of repairs reducing the max fuselage
Despite the continued challenges with the father repairs, reducing the Max fuselage build rates.
Speaker 2: We are now in our ninth quarter as well of year-over-year revenue growth for commercial aerospace.
We are now at our nice quarter as well of year over year revenue growth for commercial aerospace.
Speaker 2: continued excellent sign overall for the end.
<unk> excellent sign overall for the industry.
Speaker 2: Happening port to commons defense business was also up year over year in Q3. Mainly due to the Apache program strong demand.
I'm happy to report the comments defense business was also up year over year in Q3, mainly due to the Apache program strong demand.
Speaker 2: all the military and space products, the mere missile and all the military rotary wing flat.
The military and space products, the mere missile and other military rotary wing platforms.
Speaker 2: This is the liver good performance of 109 million in revenue for the quarter.
The business delivered good performance of $109 million in revenue for the quarter.
And that was encouraging.
Speaker 2: See the return to growth is very important business for the company.
<unk> returned to growth for this very important business for to come.
Speaker 2: Company posted excellent gross margins of 22.7%. Up 200 basis points year-to-year from 20.7%.
The company posted excellent gross margins of 22, 7% up 200 basis points year over year from 27% a breakout number for.
Speaker 2: a breakout number for the business, even as we could continue to work through our many restructuring activities.
For the business.
As we send you to work through our restructuring activities.
Speaker 2: We did benefit from favorable product mix and higher volume in Q3.
We did benefit from favorable product mix and higher volume in Q3.
Speaker 2: Team also delivered adjusted operating income margins of 8.9%.
The team also delivered adjusted operating income margins of eight 9%.
Speaker 2: Along with an all-time high-adjusted EBITDA of $29.3 million, an increase of $3.3 million year over year.
Along with an all time high adjusted EBITDA of $29 3 million, an increase of $3 $3 million year over year.
Speaker 2: The Commons adjusted even a margins of 14.9 percent. In two, three was very strong.
Two comments adjusted EBITDA margins of 14, 9% in Q3 was very strong.
Speaker 2: And we anticipate adjusted EBITDA to be solid this year with stronger numbers in 2024, once the plant closures and restructuring activities are completed.
We anticipate adjusted EBITDA to be solid this year with stronger numbers in 2020 for once the plant closures and restructuring activities are completed.
Speaker 2: A good amount of value creation is ahead for the company and shareholder.
A good amount of value creation as they head for.
For the company and shareholders.
Speaker 2: The quality of earnings was solid with Gap Deluted EPS of 22 cents a share versus 69 cents a share for Q3 2022. And with the adjustments, the Luted EPS was 70 cents a share compared to the Luted EPS of 96 cents in the prior year.
The quality of earnings was solid with GAAP diluted EPS of <unk> 22 cents, a share versus 69 cents a share for Q3 2022.
And with the adjustments diluted EPS was <unk> 70, a share compared to diluted EPS of <unk> 96 cents in the prior year.
Speaker 2: Some key drivers for the lower gap, the LUDPS, include higher inches expense to higher interest rates, higher restructuring charges, and higher inventory purchased accounting adjustments. Switch.
Some key drivers for the lower GAAP diluted EPS include higher interest expense.
The higher interest rates higher restructuring charges and higher inventory purchase accounting adjustments.
Switching to the total company backlog performance.
Speaker 2: While it decreased sequentially, it was up slightly year over year and remained solid at $959 million at the end of Q3 2020.
While a decrease sequentially it was up slightly year over year and remained solid at $959 million at the end of Q3 2023.
Speaker 2: The backlog held flat sequentially, defense backlog held flat sequentially at $494 million after a significant jump in Q2 2020.
The backlog held flat sequentially. The first backlog held flat sequentially at $494 million after a significant jump in Q2 2023.
Speaker 2: and represents a 6% increase on a year-over-year basis.
Ah represents a 6% increase on a year over year basis.
We were pleased with this.
Speaker 2: and a positive sign that the overall DCO defense business remains in good shape.
A positive sign of the overall Desio defense business remains in good shape.
With more positive news to come.
Speaker 2: commercial aerospace backlog however decreased slightly your view primarily due to the industry issues with single-out production
The commercial aerospace backlog, however decreased slightly year over year, primarily due to the industry issues with single aisle production rates.
Speaker 2: The max mentioned earlier, but still ended to 3 2023 at 423 million dollars
Specifically, the Max mentioned earlier, but still ended Q3 2023 at $423 million.
For off loading for defense primes that work continues.
Speaker 2: We're expecting roughly 90 million for the full year as committed to mainly in our circuit car business for our T.S.
We're expecting roughly $90 million for the full year estimated to mainly in our circuit card business for our TFS.
Speaker 2: As communicated, the long-term run rate of these defense programs, already commercialized or in development, for offloading will be over $125 million by 2025, once the transition work is completed.
As communicated long term run rate of these defense programs already commercialized or in development for Offloading will be over $125 million by 2025 once the transition work is completed.
Speaker 2: In Q3 as well, our team delivered another excellent quarter managing the supply chain as evidenced by the record-quality revenue along with significant gross margin expansion compared to a year ago.
In Q3, as well as our team delivered another excellent quarter, managing the supply chain as evidenced by the record quarterly revenue along with significant gross margin expansion compared to a year ago.
Speaker 2: This is another great example of our operating process, company culture, dedicated employees, and leadership.
This is another great example of our operating process.
Company culture dedicated employees and leadership.
Speaker 2: As we move towards the conclusion of the year, I am now narrowing down the previous revenue guidance of mid to high single digit for the year to now a range of six to six and a half percent.
As you move towards the inclusion of the year I am now narrowing down to previous revenue guidance of mid to high single digit for the year to now a range of six to six 5%.
We are happy with this number, especially overcoming the Max delays, we all know about which have created a more modest pace and commercial aerospace single aisle production rates in 2023.
Speaker 2: especially overcoming the max delays we all know about, which have created a more modest pace in commercial aerospace single aisle production rates in 2023. Before I move to providing our market and program details,
Before I move to providing our market and program details.
I thought it was a good time to spotlight our <unk> acquisition.
Which we closed in December of 2021.
Speaker 2: I think we have found a good balance disclosing information on our acquisitions per shareholder request. Of course, without.
I think we have found a good balance.
The information on our acquisitions per shareholder request.
Of course without harming our competitiveness.
Speaker 2: I did want to highlight the success at the Rhode Island-based designer and manufacturer of magnetic seals for aerospace and defense applications.
I did want to highlight the success at the Rhode Island based designer and manufacturer of magnetic seals.
For aerospace and defense applications.
And just over seven quarters of the common ownership.
The progress has been excellent.
Speaker 2: We have grown revenue around more than 75% with adjusted operating income growing by more than 200%.
We have grown revenue by more than 75% with adjusted.
Operating income growing by more than 200%.
Speaker 2: Max Hills backlog also grew more than 75% during this ownership period.
Mac sales backlog also grew more than 75% during this ownership period.
Speaker 2: For background, the company was a family owned business prior to acquisition.
For background. The company was a family owned business prior to acquisition with.
Speaker 2: with low involvement from the owners and limited capital.
With low involvement from the owners and limited capital.
Speaker 2: As for our playbook, first, we're able to retain the key leaders post acquisition.
As for our playbook first we were able to retain the key leaders.
Post acquisition.
Speaker 2: Second, enable them to draw at high level performance through capital investments.
Second enable them to drive a high level of performance through capital investments.
Speaker 2: in operations, including state-of-the-art new manufacturing equipment to improve productivity.
In operations, including steady state of the art, new manufacturing equipment to improve productivity.
Speaker 2: Third, add sales and engineering resources to drive customer engagement and new product development. And fourth, adjusting their channel strategy to bring them closer to the customer. The ?? verlvery will begin with supervisor engagement.
Third add sales and engineering resources to drive customer engagement and new product development.
And fourth adjusting their channel strategy to bring them closer to the customer.
Where it makes sense.
This is our most recent deal with a track record now.
Speaker 2: And I believe this is a compelling example of how we create value for the common shareholders. When we spend...
And I believe this is a compelling example of how we create value through common shareholders.
When we spend money on acquisitions.
Speaker 2: I also want to take this time to congratulate Bob Gard and the MagSeal team on their outstanding performance and look forward to their continued success for many years to come.
I also want to take this time to congratulate Bob Guard and the <unk> team.
On their outstanding performance and look forward to their continued success for many years.
Speaker 2: That will provide some additional color on our markets, products and programs.
Now, let me provide some additional color on our markets products and programs.
Speaker 2: Beginning with our military and space sector, we saw a return to growth and exceeded 100 million in quarterly revenue with the post-3rd quarter revenues, 100, 108.7 million. It could add to 106.3 million in Q3 2020.
Beginning with our military and space sector, we saw a return to growth and exceeded $100 million in quarterly revenue to post third quarter revenues of 100, $108 7 million compared to $106 3 million in Q3 2022.
Speaker 2: Nifkin increased in demand for the Apache tell rotor blades of almost 250% year over year was the main driver But we also saw increased demand for other military and space products the mirror missile and other military rotary wing platforms as Well as the Bell V-22 rotary wing platton
The significant increase in demand for the Apache tail rotor blades of almost 250% year over year was the main driver, but we also saw increased demand for other military and space products, the mere missile and other military rotary wing platforms as well as the Bell V 22 Rotary wing platform.
Speaker 2: The third quarter's military and space revenue represented 55% of the economy's revenue in the period, down from 57% last year, and this trend will continue to reflect more balance with commercial aerospace, which we like.
The third quarter's military and space revenue represented 55 percentage of comments revenue in the period.
Down from 57% last year and this trend will continue to reflect more balanced with commercial aerospace, which we like.
Speaker 2: We also ended the third quarter with a solid backlog of $494 million, an increase of 6% year-over-year, and represents 52% of the Commons total backlog.
We also ended the third quarter with a solid backlog of $494 million, an increase of 6% year over year and represent 52% of the comments total backlog.
Speaker 2: General commercial aerospace operations, third quarter revenue increased 14% year over year. To 77.9 million driven mainly by bill rate increases on large aircraft platforms.
Within our commercial aerospace operations third quarter revenue increased 14% year over year to $77 $9 million driven mainly by bill rate increases on our large aircraft platforms.
Speaker 2: including the Twin Isle commercial aircraft platforms as well as the A220.
Clearly the twin aisle commercial aircraft platforms as well as the <unk> hundred 20 platform commercial rotary wing aircraft platforms and other commercial aerospace platforms.
Speaker 2: commercial rotary wing aircraft platforms, and other commercial aerospace platforms.
Speaker 2: The common expects continued growth, although in a more modest pace and commercial aerospace, as the industry navigates very supply chain to pwn addition.
The comment expects continued growth, although at a more modest pace and commercial aerospace as the industry navigates various supply chain component issues.
Speaker 2: I'm also happy to report our delivery and quality to common customers continues to be a bright spot.
I'm also happy to report our delivery and quality to common customers continues to be a bright spot.
As we move forward.
Speaker 2: The backlog within our commercial aerospace sector stands at 423 million at the end of the third quarter. And while it was 8 million lower or 2% decrease year-over-year from Q3 2022, it was still a very solid number given the temporary weakness in commercial aerospace. With that,
The backlog within our commercial aerospace sector stands at $423 million at the end of the third quarter and while it was $8 million lower or 2% decrease year over year from Q3 2022.
We're still at a very solid number given the temporary weakness in commercial aerospace.
With that I'll have some I'll review, our financial results in detail.
Speaker 3: As a reminder, please see the company's Q310Q and Q3 earnings release for a further description of information mentioned on today's call.
Thank you Steve.
As a reminder, please see the company's Q3 that you at Q3 earnings release for a further description of information mentioned on today's call.
Speaker 3: As Steve discussed, our third quarter results reflect another period of strong performance.
As Steve discussed our third quarter results reflect another period of strong performance.
Speaker 3: Once again, we saw a significant increase in after martial aerospace rummage.
Once again, we saw a significant increase in our commercial aerospace revenues.
Speaker 3: We remain encouraged by the continued strength in domestic and global travel. We should support higher long-term demand for aircraft as we work through some temporary near-term weakness in single-iole production.
Encouraged by the continued strength in domestic and global travel, which should support higher long term demand for aircraft as we worked through some temporary near term weakness in single aisle production rate.
Speaker 3: In addition, we saw a return to grow in our military and space revenues, mainly due to timing of certain programs such as the impact.
In addition, we saw a return to growth in our military and space revenues, mainly due to timing of certain programs such as the Apache <unk>.
Speaker 3: During the quarter, we also continue to make progress on our restructuring program and I will provide some more color shots.
During the quarter. We also continued to make progress on our restructuring program and I will provide some more color shortly.
Speaker 3: With all this we feel like we are positioned to finish up 2023 on the solid note. Now...
With all of this we feel like we are positioned to finish up 2023 on a solid note.
Now turning to our third quarter results.
Speaker 3: Revenue for the third quarter of 2023 was 196.3 million versus 186.6 million for the third quarter of
Revenue for the third quarter of 2023 was $196 3 million versus $186 6 million for the third quarter of 2022.
Speaker 3: The year-over-year increase reflects 9.6 million of growth across the Archimershield aerospace platforms and 2.4 million of higher revenue within the military and space sector.
The year over year increase reflects $9 6 million of growth across our commercial aerospace platforms, and $2 4 million of higher revenue within the military and space sector.
Speaker 3: The return to growth in military and space revenue in the third quarter was very important.
The return to growth in military and space revenue in the third quarter was very encouraging.
Speaker 3: The common total backlog at the end of the third quarter was 959 mil.
Your comments total backlog at the end of the third quarter was $959 million in Q.
Speaker 3: In Q2 2023, we saw a significant jump in our defense backlog by 50 million to 494.
To try to 'twenty three we saw a significant jump in our defence backlog by $50 million to $494 million.
Speaker 3: During Q3, 2023, we were able to maintain the defense backlog at that same level of 409.
During Q3 2023, we were able to maintain the defense backlog at that same level of $494 million.
Speaker 3: The backlog for our commercial aerospace business dropped during the quarter from 465 million at the end of Q2 to 423 million at the end of Q3 as a result of the ongoing industry issues in commercial aerospace.
The backlog for our commercial aerospace business dropped during the quarter from $465 million at the end of Q2 to $423 million at the end of Q3 as a result of the ongoing industry issues and commercial aerospace build rates as a reminder, we define backlog as potential revenue based on customer purchase orders.
Speaker 3: As a reminder, we define backlog as potential revenue based on customer purchase orders and long-term agreements with firm fixed prices and expected delivery days of 24 months or less.
Long term agreements with firm fixed prices and expected delivery dates of 24 months or less.
Speaker 3: We posted a total gross profit of $44.6 million, or 22.7% of revenue for the quarter, versus $38.6 million, or 20.7% of revenue in the prior year.
We posted a total gross profit of $44 6 million or 22, 7% of revenue for the quarter.
$38 6 million or 27% of revenue in the prior year period.
Speaker 3: We continue to share adjusted gross margins as we have certain non-gap cost of sales items relating primarily to inventory step-up amortization on our recent acquisition and partially to the impact on the
We continue to shed adjusted gross margins as we had non-GAAP cost of sales items relating primarily to inventory step up amortization on our recent acquisitions and partially to the impact from the wireless fire on our operations.
Speaker 3: On an adjusted basis, our gross margins were 24.1% in Q3, 2023, versus 21.5%.
On an adjusted basis, our gross margins were 24, 1% in Q3 2023 versus 21, 5% in Q3 2022.
Speaker 3: The improvement in gross margin was driven by favorable product makes better pricing and improved scale in optimal shoulders.
The improvement in gross margin was driven by favorable product mix better pricing and improved scale in our commercial aerospace businesses.
Speaker 3: We continue to work through a difficult operating environment with supply chain and labor. However, through our proactive efforts, including strategic buys and our inventory investment, we have been able to avoid any significant impacts thus far in our.
We continue to work through a difficult operating environment with supply chain and labor, however, through our proactive efforts, including strategic buys our inventory investment we have been able to avoid any significant impact thus far in our business.
Speaker 3: We come and reported operating inkin for the third quarter of 8.6 million or 4.4% of revenue compared to 13.2 million or 7.1% of revenue in the prior year period.
You commented reported operating income for the third quarter of $8 6 million or four 4% of revenue compared to $13 2 million or seven one.
1% of revenue in the prior year period.
Speaker 3: The adjusted operating income was 17.5 million or 8.9% of revenue this quarter compared to 17.2 million or 9.2% of revenue in the comparable period.
Adjusted operating income was $17 5 million or eight 9% of revenue this quarter compared to $17 2 million or nine 2% of revenue in the comparable period last year.
Speaker 3: company reported 19 come for the third quarter of 2023 of 3.2 million or 22 cents per daily to share compared to 19 come of 8.5 million or 69 cents per daily to share a year.
The company reported net income for the third quarter I'm talking 'twenty three of $3 2 million or 22 cents per diluted share compared to net income of $8 5 million or <unk> 69 per diluted share a year ago.
Speaker 3: On an adjusted basis, the company reported net income of 10.3 million or 70 cents per dollar per share, compared to net income of 11.9 million or 96 cents in U3.
Adjusted basis, the company reported net income of $10 3 million or 70 cents per diluted share compared to net income of $11 9 million or <unk> 96 in Q3 2019.
Speaker 3: The lower adjusted net income during the quarter, despite a higher level of adjusted operating income, was driven mainly by hiring.
The lower adjusted net income during the quarter. Despite the higher level of adjusted operating income was driven mainly by higher interest costs.
Speaker 3: This was primarily due to the impact of the Fed's rate hike on short-term investment.
This was primarily due to the impact of the fed's rate hike on short term interest rates I will discuss this along with our interest rate hedge which takes into effect on January 1st 2020 for Charlie.
Speaker 3: I will discuss this along with our industry head which takes into effect on January 1, 2024.
Now, let me turn to our segment results.
Speaker 3: A structural system segment posted revenue of 85.5 million in the third quarter of 2023 with the 73.2 million last year.
Our structural systems segment posted revenue of $85 5 million in the third quarter of 2023 was $73 2 million last year.
Speaker 3: The year-over-year increase reflects 6.7 million of higher sales across our commercial air space applications mainly for twin-hile aircraft and only A220 and 5.6 million of higher revenue within the military and space markets mainly from the ramp-up in sales and the Apache.
Youre increase reflects $6 7 million of higher sales across our commercial aerospace applications, mainly for twin aisle aircraft and on the April $25 6 million of higher revenue within the military and space market, mainly from the ramp up in sales in the Apache program.
Speaker 3: Structural systems operating income for the quarter was 6.7 million, or 7.9% of revenue, compared to 6.7 million, or 9.1% of revenue last year.
Structural systems operating income for the quarter was $6 7 million or seven 9% of revenue compared to $6 7 million or nine one.
1% of revenue last year.
Speaker 3: including restructuring charges and other adjustments in both years. The segment operating margin was 15.7% in Q3, 2023, versus 13.3%.
Excluding restructuring charges and other adjustments in both yet the segment operating margin was 15, 7% in Q3 2023 versus.
13, 3% in Q3 2022.
Speaker 3: This significant year-over-year improvement was driven by favorable product mix, better pricing, and higher manufacturing volume or scale in the business.
This significant year over year improvement was driven by favorable product mix better pricing and higher manufacturing volumes our scale in the business.
Commercial aerospace revenues have continued to grow.
Speaker 3: This has been a great quarter for our structural systems segment.
This has been a great quarter for our structural systems segment.
Our electronics.
Speaker 3: system segment posted revenue of $110.7 million in the third quarter of 2023 versus $113.4 million in the prior year.
<unk> segment posted revenue of $110 7 million in the third quarter of 2023 versus $113 4 million in the prior year period.
Speaker 3: The decline was mainly due to lower revenues with the company's military and space customers, including the impact and timing of reduction.
The decline was mainly due to lower revenues with the company's military and space customers, including the impact and timing of the reduction in sales on legacy platforms, such as the F. 18 are synchronized with growth in sales from the company's position on next Gen platforms.
Speaker 3: sales on legacy platforms such as the F18 are synchronized with growth in sales from the company's position on next gen.
Speaker 3: electronic systems operating in case for the third quarter was 12.7 million or 11.5% of revenue versus 13.9 million or 12.2% of revenue in the prior year period.
Electronic systems operating income for the third quarter was $12 7 million or 11, 5% of revenue.
The $13 9 million or 12, 2% of revenue in the prior year period.
Speaker 3: including restructuring charges and other adjustments in both years. The segment operating margin was 13.4% in Q3, 2020-23, versus 12.9% in Q3.
Excluding restructuring charges and other adjustments in both years. The segment operating margin was 13, 4% in Q3 2023 versus 12, 9% in Q3 2022.
Speaker 3: The higher operating income as a percentage of revenue was primarily due to favorable product and makes and price.
The higher operating income as a percentage of revenue was primarily due to favorable product mix and pricing actions.
Speaker 3: Next, I would like to provide an update on our ongoing restructuring program.
Next I would like to provide an update on our ongoing restructuring program.
Speaker 3: As a reminder and as discussed previously, we commence the restructuring initiative back in Q220.
As a reminder, and as discussed previously we commenced a restructuring initiative back in Q2 2020 to.
Speaker 3: These actions are being taken to accelerate the achievement of our strategic goal and to better position the company for stronger performance in the short and long time.
These actions are being taken to accelerate the achievement of our strategic goals and to better position the company for stronger performance in the short and long term.
Speaker 3: This includes the shutdown of our facilities in Manrovya, California, and variable Arkansas, and transfer a majority of that work to our local separation in Guimous, Mexico, with the remainder going to other existing performance centers in the United States.
This includes the shutdown of our facilities in Monrovia, California, and variable, Arkansas and transfer of majority of that work through our low cost operation in Guadalajara, Mexico with the remainder going to other existing fulfillment centers in the United States.
Speaker 3: We continue to make progress on these transitions with excellent employed retention and engagement.
We continue to make progress on these transitions with excellent employee retention and engagement and are also working diligently with our customers.
Speaker 3: and are also working diligently with our customers, Boeing and RTX, to obtain the requisites.
<unk> and RPX to obtain the requisite approvals.
Speaker 3: During Q3 2023, we recorded 4 million in restructuring charges, the majority of these charges were sevens and benefits related as we continue to wind down the two operations. The regional is toothpool.
During Q3, 2023, we recorded $4 million in restructuring charges.
Majority of these charges for severance and benefits related as we continue to wind down the two operations.
The recertification process is ongoing and we plan to close both factories fully in the first half of 294.
Speaker 3: and we plan to close both factories fully in the first half of 2020.
Speaker 3: We expect to incur $7 to $9 million in restructuring expenses through 2024, and that will include the spending.
We expect to incur 7% to $9 million and restructuring expenses.
24, and that will conclude the spending.
Speaker 3: On the completion of our restructuring program, we expect to generate 11 to 13 million in annual savings from our action and expect a portion of those savings to be realized, starting in age two.
On the completion of our restructuring program, we expect to generate 11% to $13 million in annual savings from our actions and I expect a portion of those savings to be realized starting in <unk> 2024.
Speaker 3: We anticipate selling the land and building at both Madrovia, California, and Burial Art Council, and as communicated in the past, have begun a failed process for the Madrovia facility.
We anticipate selling the land and building at both Monrovia, California, and variable, Arkansas and as communicated in the past have begun a sale process for the Monrovia facility.
Turning next to liquidity and capital resources.
Speaker 3: During Q3 2023, we generated 14.3 million in cash flow from operating in
During Q3, starting 'twenty three we generated $14 3 million in cash flow from operating activities.
Speaker 3: It was up from 9.2 million in Q2 open.
It was up from $9 2 million in Q2 of 2023.
Speaker 3: As at the end of the third quarter, we have available liquidity of $198 million, comprising of the unutilized portion of our revolver and cash.
As at the end of the third quarter, we have available liquidity of $198 million comprising of the unutilized portion of our revolver and cash on hand.
Speaker 3: Our existing credit facility was put in place in July 2022 and now at an opportune time in the credit markets, allowing us to reduce our spread.
Our existing credit facility was put in place in July 2022, and at an opportune time in the credit market, allowing us to reduce our spread increase the size of our revolver and allowing us the flexibility to execute on our acquisition strategy.
Speaker 3: increase the size of our revolver and allowing us the flexibility to execute on our acquisition strength.
Speaker 3: Our dead is currently 100% floating and linked to the soft
Our debt is currently 100% floating and later to the sulfur.
Speaker 3: as a result and as I highlighted below before, the increase in our interest cost from 3 million in Q3 2022 to 5.4 million in Q3 2023 was driven by the run-up in short-term rates due to the fed rates.
As a result, and as I highlighted before the increase in our interest cost from $3 million in Q3, 2022 to $5 4 million in Q3, 2023 was driven by the run up in short term rates due to the fed rate hikes.
Speaker 3: In November 2021, we had put in place an interest rate hedge that goes into effect for a seven-year period starting January 2024.
In November 2021, he had put in place an interest rate hedge that goes into effect for a seven year period, starting in January 2024.
Speaker 3: and which will peg the one-month term so far at 170 basis points for 150 million of our debt.
And which will affect the one master so far at 170 basis points or $150 million of our debt.
Speaker 3: This will help drive significant interest cost savings in 2024 and beyond.
This will help drive significant interest cost savings in 2024 and beyond.
Steve highlighted the success, we've had with our <unk> acquisition.
Speaker 3: We have a program strategy and playbook that we intend to continue to deploy on feature acquisitions with deal fives is ranging from fit.
We have a proven strategy and playbook that we intend to continue to deploy on future acquisitions with deal sizes ranging from fixed.
Speaker 3: and 50 million. So achieve the target we have laid out in our vision 2027.
$250 million to achieve the targets, we have laid out in our vision 2027 plan.
Speaker 3: This strategy can be funded with debt while still maintaining our net leverage below 4A.
This strategy can be funded with debt, while still maintaining our net leverage below forex.
Speaker 3: We have laid out a hypothetical scenario on page 11 of our earnings release presentation to illustrate this point based on occasions of one to two transactions each year with a total enterprise value of 100 million.
We have laid out a hypothetical scenario on page 11 of our earnings release presentation to illustrate this point based on the cadence of one to two transactions each year with a total enterprise value of $100 million annually.
Speaker 3: In summary, we feel confident that we can execute on our M&A game plan through a combination of additional debt and operating cash flows while continuing to be proven about love.
In summary, we feel confident that we can execute on our M&A game plan through a combination of additional debt and operating cash flows while continuing to be prudent about leverage.
Speaker 3: You conclude the financial overview for Q3 2023. I would like to say that we are in a good place with most of the year now behind us and look forward to finishing up a strong 2020.
To conclude the financial overview for Q3, 2023, I would like to say that we are in a good place with most of the year now behind us.
We look forward to finishing up a strong 2023.
Speaker 2: Now, turning it back over to Steve for his clothing remarks. Okay, thanks, Simon. I'm closing just a few thoughts here. So Q3, obviously, was a great quarter. Many highlights for the company, and I'll share a hold.
I'll now turn it back over to Steve for his closing remarks.
Okay. Thanks, so much.
In closing just a few.
Few thoughts here. So Q3, obviously was a great quarter, many highlights for the company and our shareholders achieve.
Speaker 2: Achieving record quarterly revenue along with an all-time high adjusted EBIDA in Q3 are wonderful milestones to be proud of. And I'm thrilled for the Decomment team.
Achieving record quarterly revenue along with an all time high adjusted EBITDA in Q3, our wonderful milestones to be proud of and I'm thrilled for the ducommun team.
Speaker 2: It also means that we were at a schedule on the vision 2027. We shared it the investor day last December and are committed to reaching those goals.
It also means that we are ahead of schedule on the vision 2027, we shared at the Investor Day last December and are committed to reaching those goals.
Speaker 2: Lastly, my contingent thanks as well to our employees, investors, and all other stakeholders for your contingent support, as you look forward to finishing up a successful 2023. Another?.
Lastly, my continued thanks, as well through our employees investors and all other stakeholders for your continued support.
As we look forward to finishing up a successful <unk>.
23.
Okay, Let's go to questions. Thank you for listening.
Speaker 1: Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. And please stand by while we compile the Q&A roster. One moment.
Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again and please standby, while we compile the Q&A roster.
One moment for our first question.
Speaker 1: And our first question comes from Mike Crawford of Bereilly.
And our first question comes from Mike Crawford of B Riley.
Mike Your line is open.
Speaker 1: Mike, if your line is muted, please unmute and please rejoin using the call me feature if that doesn't work.
Mike Your line is muted please on mute and please rejoin using the call me feature if that doesn't work.
One moment for our next question.
Okay.
Speaker 1: And our next question comes from Michael Ciaramoli of Truist.
And our next question comes from Michael <unk> of Truest.
Speaker 4: Hey, good afternoon guys. Thanks for taking the questions to your nice results. Maybe a
Hey, good afternoon, guys. Thanks for taking the questions here and nice results.
Speaker 4: or a few months, the structuring and the annualized savings, it sounds like maybe that's sliding to the right a little bit. I mean, I know you kind of said only a portion and it's more second half.
Maybe.
Steve <unk>.
Demand the deep restructuring and the annualized savings it sounds like maybe that sliding to the right a little bit I mean, I know you kind of said only a portion and it's more second half.
Speaker 4: Do I have that correct? And what's sort of happening there to kind of prevent that best full run rate from being realized, you know, really kicking off starting in earlier?
Do I have that correct and what's sort of happening there.
Kind of prevent that full run rate for being realized.
Really kicking off.
Starting in the earlier 24.
Speaker 2: Yeah, Mike, fair question. And it has moved a bit, you know, we're a little bit, you know, at the mercy of Boeing and RTS, right?
Yes, Mike.
Fair question, Ed It has moved a bit.
We're a little bit.
That diversity.
In Rts right.
Speaker 2: Because, you know, they got a lot of suppliers that won't move a lot of different things around and so we're doing our best. Like Samant said in his notes, we're diligent with both those large OEMs.
They've got a lot of suppliers that want to move a lot of different things around and.
So we're doing our best likes like <unk> said in his notes, we're diligent with both of those large Oems.
Speaker 2: But, you know, we did see a bit of a delay, not that anything on our end, but, you know, we're trying to get people down to these new factories to approve these processes and it's going to be a little bit longer. But I will tell you that we're going to, we'll be done.
But we.
We did we did see a bit of a delay not that anything on our end but.
We're trying to get people down to these new factories to improve these processes and it's going to be a little bit longer, but I will tell you that.
We're going to we'll be done for sure by the end of June.
Speaker 4: That's okay. You called out certification, that presumably what it's for getting the proper sign off.
That's okay is that you called out certification is that presumably what it's for getting the proper sign off and I mean, clearly yes. Both of those guys got to have a lot going on okay. Yeah, absolutely. So much by was it about the Boeing conference in March you said they have.
Speaker 2: Clearly, yes, both of those guys have a lot going on. Okay. Yeah, absolutely. So much, you know, if I was at a Boeing conference in March, they said they have a thousand parts that the players want to move. And so, you know, we're one of many, but, you know, I think overall the good news is moving forward. And we do have a target and that's going to happen at the end of June . So that's that I got.
In parts.
Suppliers want to book and so.
A lot of money, but.
Overall the good news is we're moving forward and we do have a target and thats going to happen at the end of June.
Speaker 4: Yep, I got it. It should be, I mean, I know you're not going to give 24 guidance here, but I'm assuming then we should probably maybe Kemper our margins a bit. I mean, you just put up great margin.
Got it.
I mean, I know youre not going to give 2000 for guidance here, but I am assuming then we should probably maybe temper.
Our margins a bit I mean, you just put up great margins in the quarter.
Speaker 4: in the quarter, you know, it sounds like you're certainly dealing with some of the arrow challenges and there were some sequential downticks there, but you know, just can you maybe, you know, kind of level-fed us, you know, maybe using, you know, this quarter's margin, the starting point or launching point and how to think about the trajectory.
It sounds like Youre, certainly dealing with some of the Aero challenges and there were some sequential downtick there but.
Can you maybe kind of level set us maybe using.
This quarter's margins as a starting point or a launching point and how to think about the trajectory.
Speaker 5: Yes, great question, Mike, and you're right. We have really strong margins, and margins have progressed sequentially over the course of this year in a very nice manner. I would expect the margin to improve, especially given the timing of the restructuring, to be more, for next year, to be more second half versus first half.
Yes, great question Mike.
Alright, we have really strong margins and margins of progress sequentially over the course of this year and a very nice manner.
Good.
Expect the margin improvement, especially given the timing of the restructuring to.
To be more for next year to be more in the second half versus first half.
Speaker 2: Yeah, the margin that we posted this quarter looks to be going right. As rolling forward, absolutely.
Okay.
Is the margin that we posted this quarter it looks great.
Going forward absolutely, yes, okay. Okay got it that's helpful last one for me commercial Aero.
Speaker 4: Got it. That's helpful. Last one for me. Commercial Arrow. I mean, you know, you're, I, I, I, I understand what's been going on out there. We're still seeing pretty good growth among the peers. I mean, maybe you guys got a little bit.
Sure.
I understand what's been going on out there, we're still seeing pretty good growth among the peers. I mean, maybe you guys got a little bit disproportionately hit here because.
Speaker 4: disproportionately hit here because of outsized exposure and concentration on max, but is this, can you maybe give us a sense where you are on max rate?
Outsized exposure and concentration on backs, but.
Can you maybe give us a sense, where you are on on Max rates and kind of where you expect to be or just kind of what the general state of the Union is there on that program sure, Yes, we're sort of mid <unk>.
Speaker 2: kind of where you expect to be or just kind of what the general state of the union is there on that program? Sure, yeah, we're sort of mid-20s. You know, we're certainly excited about what we heard as far as maybe going up to 500, you know, from the recall. So we're enthusiastic about that, but to be honest with you, the strike.
We're certainly excited about what we heard as far as maybe going up to 500.
From recall, so we're enthusiastic about that but to be honest with you the strike.
Speaker 2: And then the, you know, the quality repairs, you know, kind of just flatten us out a bit on the max. And as you know, it's a pretty big program, but I think the good news is, because we were pretty much dead in the water last year, is that the wide body business is coming roaring back, even though at a smaller level, it's a really good sign for DCO.
And then the.
The quality repairs it kind of does flatten us out a bit on the Max and as you know, it's a pretty big program, but I think the good news is because we were pretty much dead in the water last year is that the wide body business is kind of going back even though at a smaller level. It's a really good sign for Dci.
Speaker 4: Oh, well, thanks guys. I'll jump back in the queue here.
Got it.
Helpful. Thanks, guys I'll jump back in the queue here.
Thank you one moment for our next question.
Speaker 1: And our next question comes from Mike Crawford of B Reilly Securities.
And our next question comes from Mike Crawford of B Riley Securities.
Speaker 6: Can you guys hear me this time? You can hear you, Mike Lowne clear. Excellent, excellent. Glad to hear that. So thanks for sharing your playbook on MagSheal. Is there a similar?
Can you guys hear me. This time, we can hear you, Mike loud and clear.
Excellent excellent I'm glad glad to hear that.
Yes.
Thanks for sharing.
Your your playbook on Maxiell is there similar.
Speaker 6: walk through, you can share with your plans for BLR Aerospace.
Walk through you can share with your plans for BLA or aerospace.
Speaker 2: Uh, we're, you know, look, you know, you guys kind of got the playbook, right? So, you know, but I think, uh, we're gonna use pretty much what we did with max deal. Uh, you know, we'll be in touch, right? You know, as we go forward here, it's, it's still, it's still real early on PLR. So that's, that's about all I want to say, but we're, we have high hopes, like we've had the other four and we're going to use the same playbook.
We're look you guys got I got the playbook right, so, but I think we're going to use pretty much what we did with Max deal.
It will be in touch right as we go forward here, it's still it's still real early on so that's about all I want to say, but we have high hopes like we have another four and we're going to use the same playbook.
Speaker 6: Okay, thanks. And then since you started your initial sales process and monovia, are you prepared at this time to provide any expectations on potential value you might receive for selling that property?
Okay. Thanks, and then since you started your initial sales process in Monrovia are you prepared at this time to provide any.
Any expectations on potential value you might receive for selling that property.
Speaker 2: Mike, we have an ongoing sale process, but we're not yet at a stage where we can share details around the expectations there, but as we move along the sale process, we'll keep shareholders updated. Yeah, thanks. I think, Mike, by December , we'll have a communication out, okay, so you can count on it. Sooner than later, Mike.
Alright, Mike we have an ongoing sales process.
But we're not yet at a stage, where we can share.
The details around the.
And our expectations that as we move along in the sales process. We will keep charters updated yes, I think I think Mike by December we will have we'll have a communication out. Okay. So you can count on it sooner than later Mike.
Speaker 6: Okay, thanks. And then, can you...
Okay. Thanks, and then.
Can you.
Speaker 6: share your expectations on...
Share your expectations.
Speaker 6: Inventory purchase accounting adjustments that we might see in the fourth quarter and or next year from where you're standing today.
On.
Inventory purchase accounting adjustments that we might see in the fourth quarter <unk> next year.
From where you are standing today.
Speaker 5: So the inventory purchase accounting adjustments during the current quarter were mainly an account of inventory that had to be marked up for BLR, the BLR acquisition. And we do expect that to continue through Q1 and Q2 of next year.
So the inventory purchase accounting adjustments during the current quarter were mainly on account of.
Inventory that had to be marked up for DLR the DLR acquisition.
And we do expect that to continue through Q1 and Q2 of next year.
Speaker 3: It cannot depend on the rate of revenue, but certainly in Q1, we'll see in Q4 of 2023, and then certainly in Q1, and depending on revenue may be a little bit in Q2, but not beyond that. That.
Did you want to kind of depend on the rate of revenue, but suddenly in Q1, we will see it in Q4 of 2023, and then suddenly in Q1 and depending on revenue, maybe a little bit in Q2, but not beyond that.
Okay. Thanks, and then final question for me is just.
Speaker 6: relative to the renewed growth in military and space. I'd really like to hear your thoughts on space in particular, given all of the investment that's going into that sector at this moment.
Relative to.
Renewed growth in military and space, So I really like.
Like to hear your thoughts on space in particular, given all of the investment.
That's growing in that sector at this moment.
Speaker 2: You know, Mike, I'm going to give you a high-level view. I mean, we certainly support the space programs, but we lean more towards the military side, I mean, candidly. So we do see a lot of investments ongoing. I mean, we're looking at interesting things. Most of that's coming out of Carson. And we might have a few other support, as we do ruggedized harnesses for NASA and for other things. But, you know, we're probably not the best people to ask.
Mike.
I'll just give.
To give you a high level view I made we certainly support the space programs, but.
We lean more towards the military side I mean candidly so we do see a lot of investments.
Ongoing I mean, we're looking at interesting. Thanks, most of that has come out of Carson.
Might have a few other support as we do Ruggedized harnesses for NASA as for other things but.
We're probably not the best people to ask.
Okay, all right well thank you.
Speaker 1: Thank you. As a reminder to ask a question please press star 11 on your telephone and wait for your name to be announced to withdraw your question. Please press star 11 again and one moment for our next question.
Yes.
Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again and one moment for our next question.
Okay.
Speaker 1: Our next question comes from Jason Gerstke of City.
Our next question comes from Jason Gursky of Citi.
Speaker 7: Good morning, everybody. I wanted to just dive in a little bit more about the relationship that you all have with spirit. You mentioned some of the dynamics going on there with the 3.7 makes good sense, I think, to see a little bit of pause here in 23 and then recovery in 24, but part of the narrative with you all has been...
Good morning, everybody.
I wanted to just dive in a little bit more.
About the relationship that you all have with spirit.
You mentioned some of the dynamics going on there with the $3 seven makes good sense.
A little bit of a pause here in 'twenty, three and then recovery.
24, but.
Part of the narrative with you all has been.
Speaker 7: you know, bringing in some more work from them. And I'm just kind of curious maybe to get an update from you. They've got new leadership there. Sounds like they've got, you know, somebody at the helm there that is...
Bringing in some more work.
From them.
And I'm just kind of curious maybe to get an update from you they've got new leadership there it sounds like they've got.
Somebody at the helm there that.
As.
Speaker 7: You know, pretty focused on operations. So just kind of curious if you've got some sort of read out for us on kind of your initial interactions there and try to figure out whether there is an opportunity for the work that you do with them to potentially grow even more as they wrap their heads around and hands around all the film there.
Yes pretty focused on operations. So just kind of curious if you've got some sort of readout.
For us on kind of your initial.
Interactions there and try to figure out whether there is an opportunity for the work that you do with them two to potentially grow even more as they wrap their heads around in hands around all all thats on their plate.
Speaker 2: Sure. And Jason, thanks for calling in. Good to be with you. So, look, you know, we're close to spirit. You know, we were close to Tom, the CEO , and I know things have changed. And I know Patrick's in there now. You know, we obviously are expecting a new sort of level of energy there. And I think, you know, I think we're going to see that. I think they're doing some some smart things early on. So we're encouraged.
Sure Jason Thanks for calling in.
To be with you. So look we're close to spirit.
Close to Thomas CEO, and I know things have changed and I know Patrick's in there now.
Obviously, you're expecting a new sort of level of energy there and I think.
We're going to see that I think they are doing some smart things early on so we're encouraged.
Speaker 2: You know, as far as program gain, I mean, I talk about these skins for the fuselage, right, which is going to be a big deal for us, but you know, we're still working on the tooling.
As far as the program gain I mean, I've talked about these skins for the fuselage right, which is going to be a big deal for us, but we're still working on the tooling and we're going to hopefully get that move in towards the end of the year, where we got to get things approved and we're going to start building more program share for the Max which you already have.
Speaker 2: And we're going to hopefully get that move in, you know, towards the end of the year, where we've got to get things approved and we're going to start building more programs here.
Speaker 2: for the max which you already have, you know, pretty good share. But, you know, I think that they're through the labor issues, we all know.
Pretty good share.
I think that the thrill of labor issue as we all know.
Speaker 2: and they just did some things on the capital side uh... you know uh... and i think hopefully we're through these quality issues because you know we're we're a v.o.i.
Just did some things on the capital side.
And I think hopefully we're through these quality issues because we're a VOI.
Speaker 2: person there at spirit so we're right in the middle of the operation they're pulling our products we work with
Person there at spirit. So we're right in the middle of the operation they are pulling our products.
Speaker 2: certainly making sure we have the inventory there in the factory. We have again a strong relationship. I'm absolutely positive about it. I mean, unless we see something that...
We're certainly making sure we have the inventory there in the factory we have again, a strong relationship I am absolutely I'm, absolutely positive about it I mean.
Unless we see something that.
Speaker 2: you know, and God forbid, another, you know, quality problem, which
And God forbid another quality problem, which.
Speaker 2: you know really sets everybody back and uh... uses a lot of uh... a lot of time for people to do this so i think thumbs up for spirit i think it's still gonna be sort of a flatish
Really sets everybody back and uses a lot of a lot of power.
A lot of time for people to do this so I think thumbs up for spirit I think it's still going to be sort of a flattish.
Speaker 2: you know, first three months as you know, it's a big operation, right? But I think they're gonna, I think you're gonna see see better things in 2024. And we're certainly counting on
Three months is a big operation right, but I think they've got a I think youre going to see better things in 2024, and we're certainly counting on it.
Speaker 7: Right. No, okay. Great. And then on the white body side, did this these ramping volumes?
Right, Okay, great and then on the wide body side.
Did this.
These ramping volumes.
Speaker 7: Come as a surprise, can you all, I'm just trying to get a sense of whether there was something's coming in better than expectation.
Come as a surprise to you all I'm just trying to get a sense of whether there was something is coming in better than expectations on that side of things.
Speaker 2: on that side of things and you know if you could just offer a little bit more fidelity on on where you're seeing that strength that'd be helpful Thanks, so certainly we're seven eight seven players, so you know, so we did see you know some some some take up in that We think it's gonna be much much better in 2024 Well once we've been all talk about it, so we're on the 8 330 believe it or not We have a pretty good position on a 330 and you're over here that really pop
If you could just offer a little bit more fidelity.
And then where you're seeing that strength that'd be helpful. Thanks, Yeah. So certainly were 787 players so so.
So we did see some tick up in that and we think it's going to be much much better in 2024, well once we all talk about is that we're on the <unk> hundred <unk> believe it or not we have a pretty good position on the <unk> hundred 30 <unk>.
Speaker 2: Okay, as far as, you know, we know that's not the biggest priority in the airputs lineup for the products, but, you know, we're a player on that all through our titanium operations. So that was a positive. And sometimes you're just going to get spares and other things and believe it or not, we got some good news here over here on 747.
Year over year that really pop okay as far as we know thats not the biggest priority and the Airbus a lineup for their products, but.
We are a player on that all through our titanium operations. So that was a positive and sometimes you just got to get spares and other things and believe it or not we got some some good news year over year and 747.
Speaker 2: So, you know, those are the kind of things, but we're counting on the 8.7 because we not only provide titanium of the things in the 8.7, we provide engineered products.
Those are the kind of things, but we're counting on the the 87, because we not only provide titanium and other things in the 87, we provide engineered products.
Speaker 2: We provide the fusion lightning, the fusion systems for the 787, a very high margin. So we're all in on the 877 going forward. Okay, great, thank you very much.
We provide the fusion lightning.
Fusion systems for the 77 at a very high margin. So we're all in on the 87 going forward.
Okay, great. Thank you very much.
Thanks, Jason appreciate it.
Speaker 1: Thank you. I'm showing no further questions at this time. I would now like to turn it back to Mr. Steve Oswald for closing remarks.
Thank you I'm showing no further questions at this time I would now like to turn it back to Mr. Steve Oswald for closing remarks.
Speaker 2: Okay, thank you and thank everybody for joining us today. Appreciate you listening and hanging in there. I thought again, we had an excellent quarter. I want to thank everyone for their support. Certainly coming out of a couple of tough years with COVID and starting to move forward with a lot of good things for shareholders and.
Okay. Thank you and thank you everybody for joining us today appreciate your listening and hanging in there I thought again, we had an excellent quarter I want to thank everyone for their support certainly coming out of a couple of tough years, where COVID-19 and starting to move forward with a lot of good things.
For shareholders and for and for our team here. So again. Thank you I just wanted to say one last thing I want to just thank our veterans as we move up to veterans day.
Speaker 2: for our team here. So again, thank you. Just wanna say one last thing. I wanna just thank our veterans as we move up to veterans day on Saturday. And thank you for your service and to the families that support them. We are proud to be a part of helping the war fighter. Thank you.
On Saturday and thank you for your service into the families that support them.
We are proud to be a part of helping the warfighter.
Thank you and have a great day.
Speaker 1: This concludes today's conference call. Thank you all for participating and have a good day and you may now disconnect.
This concludes today's conference call. Thank you all for participating and have a good day and you may now disconnect.
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