Q3 2024 Moog Inc Earnings Call

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Operator: Please stand by; we're about to begin. Good morning, and welcome to the Moog third quarter fiscal year 2024 earnings conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Aaron Astrachan. Please go ahead.

Operator: Good morning and welcome to the Moog third quarter fiscal year 2024 earnings conference call. Today's conference is being recorded.

Speaker Change: Good morning, and welcome to the Moog third quarter fiscal year 'twenty 'twenty four earnings Conference call. Today's conference is being recorded at this time I'd like to turn the conference over to Mr. Aaron Astrachan. Please go ahead.

Aaron Astrachan: At this time, my life took on the conference efforts. Mr. Aaron Astrachan, please go ahead. Good morning. And thank you for joining Moog's third quarter 2024 earnings release conference call. I'm Aaron Astrachan, Director of Investor Relations.

Aaron Astrachan: Good morning, and thank you for joining Moog's third quarter 2024 earnings release conference call. I'm Aaron Astrachan, Director of Investor Relations. With me today are Pat Roche, our Chief Executive Officer, and Jennifer Walter, our Chief Financial Officer.

Barrett Astrakhan: Good morning, and thank you for joining <unk> third quarter 2024 earnings release Conference call, Hey, Barrett Astrakhan director of Investor Relations with me today is Pat Roche, our Chief Executive Officer, and Jennifer Walter Our Chief Financial Officer.

Aaron Astrachan: Good evening. Today's Pat Roche, our Chief Executive Officer, Jennifer Walter, our Chief Financial Officer. Earlier this morning, we released our results and our supplemental slides, both of which are available on our website. Our earnings press release, our supplemental slides, and remarks made during our call today, contain adjusted non-GAAP results. Reconciliation for these adjusted results to get results are contained within the provided materials.

Aaron Astrachan: Earlier this morning, we released our results and our supplemental slides, both of which are available on our website. Our earnings press release, our supplemental slides, and remarks made during our call today contain adjusted non-GAAP results. Reconciliations for these adjusted results to gap results are contained within the provided material. Lastly, our comment today may include statements related to expected future results and other forward-looking statements, which are not guaranteed. Our actual results may differ materially from those described in our forward-looking statements and are subject to a variety of risks and uncertainties that are described in our earnings press release and in our other SEC filings. Now, I'm happy to turn the call over to Pat.

Speaker Change: Earlier. This morning, we released our results and our supplemental slides both of which are available on our website.

Our earnings press release or supplemental slides Andy marks made during our call today contains adjusted non-GAAP results reckon.

Speaker Change: Reconciliations for these adjusted results to GAAP results are contained within the provided materials.

Aaron Astrachan: Lastly, our comments today may include the materialized to expected future results and other forward-looking statements, which are not guarantees. Our actual results may differ materially from those described in our forward-looking statements. And are subject to a variety of risks and uncertainties that are described in our earnings press release and in our other SEC filings.

Speaker Change: Lastly, our comments today may include statements related to expected future results and other forward looking statements, which are not guarantees our actual results may differ materially from those described in our forward looking statements.

Speaker Change: And are subject to a variety of risks and uncertainties that are described in our earnings press release and in our other SEC filings now I am happy to turn the call over to Pat.

Patrick Roche: Now, I'm happy to turn the call over to the past. Good morning and welcome to the call. Today we report another strong quarter, demonstrating very positive progress towards improved financial performance. Sales are strong, with double-digit growth in defense and mid-single-digit growth in commercial and markets. Industrial, which has been a watch item, held ground despite softening in automation. Adjusted operating margin was up substantially. This reflects moving beyond our space vehicle charges, a ramp in better priced commercial business and greater productivity as future long range assault aircraft expands. Adjusted diluted earnings per share increased by almost 40% relative to prior year, driven by margin enhancement initiatives and profitable sales growth. Cash flow improved on the prior year.

Patrick Roche: Good morning, and welcome to the call. Today we report another strong quarter, demonstrating very positive progress towards improved financial performance. Sales are strong, with double-digit growth in defense and mid-single-digit growth in commercial and market. Industrial, which has been a watch item, held ground despite softening in automation. Adjusted operating margin was up substantially, which reflects moving beyond our space vehicle charges.

Pat: Good morning, and welcome to the call.

Pat: They we report another strong quarter, demonstrating very positive progress towards improved financial performance.

Pat: Sales were strong with double digit growth in defense and mid single digit growth and commercial end markets.

Pat: Austria, which has been a watch item held ground despite softening in automation.

Speaker Change: Adjusted operating margin was up substantially.

Speaker Change: This reflects moving beyond our space vehicle charges.

Patrick Roche: A ramp in better-priced commercial business and greater productivity as future long-range assault aircraft expand. Adjusted diluted earnings per share increased by almost 40% relative to the prior year. Driven by margin enhancement initiatives and profitable sales growth, cash flow improved on the prior year. With three strong quarters behind us, we look forward with confidence to closing out Fiscal 24 as another record year in which we deliver improved financial performance. We're increasing our revenue guidance. Holding our Adjusted Operating Margin Guidance and increasing our Adjusted Diluted Earnings per Share guidance for Fiscal 24. Now, I'll provide some highlights on our operational performance. Starting with the customer folks.

Speaker Change: Our ramp and better priced commercial business.

Speaker Change: And greater productivity as future long range assault aircraft expands.

Speaker Change: Adjusted diluted earnings per share increased by almost 40% relative to prior year.

Speaker Change: Driven by margin enhancement initiatives and profitable sales growth.

Speaker Change: Cash flow improved on the prior year.

Patrick Roche: With three strong quarters behind us, we look forward with confidence closing out fiscal 24 as another record year in which we deliver improved financial performance. We're increasing our revenue guidance, holding our adjusted operating margin guidance, and increasing our adjusted diluted earnings per share guidance for fiscal 24.

Speaker Change: With three strong quarters behind us, we look forward with confidence to closing out fiscal 'twenty four as another record year in which we deliver improved financial performance.

Speaker Change: We're increasing our revenue guidance holding our adjusted operating margin guidance and increasing our adjusted diluted earnings per share guidance for fiscal 'twenty four.

Patrick Roche: Now, I'll provide some highlights on our operational performance. Starting with customer focus, we recently had the opportunity to meet with commercial and military customers, suppliers, and partners at the Farmer International AirShell and the Royal International Air Tattoo. Even engagements were incredibly important to enhance communications and strengthen working relationships, as we continue to manage the growth in both markets. At Farmera, we announced new airline support contracts with Look-Tanzer, Austrian Airlines, Hawaiian Air, Finair PLC, and Finair Technical Services, expanding our commercial after market business. In June, we met with defense customers, suppliers, and partners at Eurofactory in Paris.

Speaker Change: Now I'll provide some highlights on our operational performance.

Speaker Change: Starting with customer focus.

Patrick Roche: We recently had the opportunity to meet with commercial and military customers, suppliers, and partners at the Farnborough International Air Show and the Royal International Air Tattoo. These engagements were incredibly important to enhance communications and strengthen working relationships, as we continue to manage growth in both markets. At Farnborough, we announced new airline support contracts with Lufthansa, Austrian Airlines, Hawaiian Air, Finnair PLC, and Finnair Technical Services, expanding our commercial aftermarket business. In June, we met with defense customers, suppliers, and partners at Eurosatury in Paris. This is the largest international exposition for land and air defense held every two years.

Speaker Change: We recently had the opportunity to meet with commercial and military customers suppliers and partners at the Farnborough International Air show and the Royal International Air Tattoo.

Speaker Change: These engagements were incredibly important to enhance communications and strengthened working relationships as we continue to manage the growth in both markets.

Speaker Change: At Farnborough, we announced new airline support contracts with Lufthansa and Austrian Airlines Hawaiian Air <unk> plc, and <unk> technical services, expanding our commercial aftermarket business.

Pat: In June we met with defense customers suppliers and partners at Euro Saturday in Paris.

Patrick Roche: This is the largest international exposition for land and air defense held every two years. Our customers signaled near-term growth, not seen in decades, that is driven by the need to build out defensive strength in Europe. This is creating increased interest in our field, proven products, and opening opportunities for platform modernization. Our dedicated subsidiary received its full and final facility security clearance at the end of June, enabling it to receive new classified program contract awards.

Pat: This is the largest international exposition for land and Air Defense held every two years.

Patrick Roche: Our customers have signaled near-term growth not seen in decades, driven by the need to build out defensive strength in Europe. This is creating increased interest in our field-proven products and opening opportunities for platform modernization. Our dedicated subsidiary received its full and final facility security clearance at the end of June, enabling it to receive new classified program contract awards.

Speaker Change: Our customers seek node near term growth not seen in decades that is driven by the need to build out defensive strength in Europe.

Speaker Change: This is creating increased interest in our field proven products and opening opportunities for platform modernization.

Speaker Change: Our dedicated subsidiary received its full and final facility security clearance at the end of June enabling it to receive new classified program contract Awards.

Patrick Roche: We're excited to work with our customers on new opportunities that apply our unique systems capabilities to solve our nation's most challenging technical problems. Moving to people, community, and planet. In June, I visited San Jose, Costa Rica, born to the largest of our three medical device facilities. Clarity of purpose to enhance healthcare and enrich patients' lives continues to be a powerful motivator for our medical employees. This focus has driven a decade of continuous improvement, leading to a reputation as a reliable partner that has secured market share growth, enhanced productivity that has doubled throughput in the facility, and secured a Bronze Shingle Award.

Patrick Roche: We're excited to work with our customers on new opportunities that apply our unique systems capabilities to solve our nation's most challenging technical problems. Moving to people, community, and planet, in June, I visited San Jose, Costa Rica, home to the largest of our three medical device facilities.

Speaker Change: We're excited to work with our customers on new opportunities that apply our unique systems capabilities to solve our nation's most challenging technical problems.

Speaker Change: Moving to people community and planet.

Speaker Change: In June I visited San Jose Costa Rica home to the largest of our three medical device facilities.

Patrick Roche: Clarity of Purpose to enhance healthcare and enrich patients' lives continues to be a powerful motivator for our medical employees. This focus has driven a decade of continuous improvement, leading to a reputation as a reliable partner that has secured market share growth. Enhanced productivity that has doubled throughput in the facility and secured a bronze Shingo award. Costa Rica is a notable example of a purpose-driven organization delivering sustainable business performance through lean. While in San Jose, we visited a childcare facility run by a local charity within one of the most challenged communities.

Speaker Change: Clarity of purpose to enhance healthcare and enriched patient lives continues to be a powerful motivator for our medical employees.

Speaker Change: This focus has driven a decade of continuous improvement lean.

Leading to a reputation as a reliable partner that has secured market share growth.

Speaker Change: Enhanced productivity that has doubled throughput in the facility.

Speaker Change: And secured a bronze Shingo award.

Patrick Roche: Costa Rica is a notable example of a purpose-driven organization delivering sustainable business performance through lean. While in San Jose, we visited a childcare facility run by a local charity within one of the most challenged communities. We are delighted that our contributions help provide a hot meal and peace of mind for parents who struggle to make ends meet. Another community project helping the next generation is addressing the availability of clean drinking water in Baguio City, which is a water-stressed region. Our donation and volunteer effort provided a local school 1,000 liters, or just over 260 gallons per hour, of clean, safe drinking water that will, on an ongoing basis, sustain around 1,800 people.

Speaker Change: Costa Rica is a notable example of a purpose driven organization delivering sustainable business performance through lean.

Speaker Change: While in San Jose, we visited a child care facility run by a local charity within one of the most challenged communities.

Patrick Roche: We are delighted that our contributions helped provide a hot meal and peace of mind for parents who struggle to make ends meet. Another community project helping the next generation is addressing the availability of clean drinking water in Baguio City, which is a water-stressed region. Our donation and volunteer effort provided a local school with 1,000 liters or just over 260 gallons per hour of clean, safe drinking water that will, on an ongoing basis, sustain around 1,800 people. Baguio City in the Philippines is an important manufacturing location for molds.

Speaker Change: We are delighted that our contributions helped provide a hot meal and peace of mind for parents, who struggle to make ends meet.

Speaker Change: Another community project, helping the next generation is addressing the availability of clean drinking water in <unk> city, which is a water stressed region.

Speaker Change: Our nation and volunteer effort provided local school 1000 liters or just over 260 gallons per hour of clean safe drinking water that will on an ongoing basis sustain around 800 people.

Patrick Roche: Baguio City in the Philippines is an important manufacturing location for Moe. Continuing this theme, water stress is a growing humanitarian concern. We recognize that water is already a limited and precious resource in many parts of the world, and that access to clean water will be even more challenging in future years. Consequently, we have baselineed our consumption of water at all manufacturing locations globally. We're committed to reductions, and we will publish our goal later in this year. In the meantime, we've already started multiple projects to reduce water consumption. These include improved water stewardship through metering, awareness campaigns on water usage, and rainwater harvesting at several facilities.

Speaker Change: <unk> city in the Philippines is an important manufacturing location for mode.

Patrick Roche: Continuing this theme, water stress is a growing humanitarian concern. We recognize that water is already a limited and precious resource in many parts of the world and that access to clean water will be even more challenging in future years. Consequently, we have baselined our consumption of water at all manufacturing locations globally. We're committed to reductions, and we'll publish our goal later this year. In the meantime, we've already started multiple projects to reduce water consumption. These include improved water stewardship through metering, awareness campaigns on water usage, and rainwater harvesting at several facilities. Our Bengaluru manufacturing facility has already seen a 40% reduction in water consumption.

Speaker Change: Continuing this theme water stress is a growing humanitarian concern.

Speaker Change: We recognize the water is already a limited in precious resource in many parts of the world and that access to clean water will be even more challenging in future years.

Speaker Change: Consequently, Consequently, we have baseline our consumption of water at all manufacturing locations globally.

Speaker Change: We're committed to reductions and we'll publish our goal at later in this year.

Speaker Change: In the meantime, we've already started multiple projects to reduce water consumption. These include improved water stewardship through metering awareness campaigns on water usage and rainwater harvesting at several facilities.

Patrick Roche: Our Bengaluru manufacturing facility has already seen a 40% reduction in water consumption.

Speaker Change: Our Bangalore through manufacturing facility has already seen a 40% reduction in water consumption.

Patrick Roche: Action.

Patrick Roche: And finally, let me move to financial strength. We continue to drive margin enhancements through pricing and simplification. We see impact and growing momentum. We continue to ensure that our pricing reflects the value we create for our customers. We've already made great progress in delivering on our Investor Day plans. The work continues with bottom-up, site-level data analysis and action, complementing top-down large account management. We persist in simplifying our business further, building our 80-20 capability. We've now deployed to almost half of our manufacturing locations, with the addition of further six sites this quarter. We have trained over 750 leaders, with 200 trained within the quarter.

Patrick Roche: And finally, let me move to financial strength. We continue to drive margin enhancement through pricing and simplification. We see impact and growing momentum. We continue to ensure that our pricing reflects the value we create for our customers.

Speaker Change: And finally.

Speaker Change: We move to financial strength.

Speaker Change: We continue to drive margin enhancement through pricing and simplification.

Speaker Change: C impact and growing momentum.

Speaker Change: We continue to ensure that our pricing reflects the value we create for our customers. We've already made great progress in delivering on our Investor day plans.

Patrick Roche: We've already made great progress in delivering on our Investor Day plan, and the work continues with bottom-up, site-level data analysis and action complementing top-down large account management.

Speaker Change: Work continues with bottom up slight level of data analysis and action.

Speaker Change: Complementing top down large account management.

Patrick Roche: We persist in simplifying our business and further building our 80-20 capability. We've now deployed to almost half of our manufacturing locations, with the addition of a further six sites this quarter. We have trained over 750 leaders, with 200 trained within the quarter. Training has extended to functional leadership, such as finance, who can better support data analytics, which enables better informed decision making across the organization. With the launch of our 80-20 playbook and standardized training programs, we anticipate accelerated deployment to the remaining sites.

Speaker Change: We persist in simplifying our business.

Speaker Change: Further building, our 80 20 capability.

Speaker Change: We've now deployed to almost half of our manufacturing locations with the addition of a further six sites this quarter.

Speaker Change: We have trained over 750 meters with 200 trained within the quarter.

Patrick Roche: Training has extended to functional leadership, such as finance, who can better support data analytics, which enable better informed decision-making across the organization. With the launch of our 80-20 playbook and standardized training programs, we anticipate accelerated deployment to the remaining sites. We now have a talented team of well-trained, dedicated 80-20 champions within the business, who are acting as catalysts for this transformation. We're actively developing 80-20 tools and templates to embed the 80-20 mindset into our organizational DNA. This commitment ensures that our approach to 80-20 becomes a fundamental part of how we work and drive sustained success.

Speaker Change: Training has extended the functional leadership such as finance.

Speaker Change: Who can better support data analytics, which enabled better informed decision making across the organization.

Speaker Change: With the launch of our 80, 20 playbook and standardized training programs, we anticipate accelerated deployment to the remaining sites.

Patrick Roche: We now have a talented team of well-trained, dedicated 80-20 champions within the business who are acting as catalysts for this transformation. We're actively developing 80-20 tools and templates to embed the 80-20 mindset into our organizational DNA. This commitment ensures that our approach to 80-20 becomes a fundamental part of how we work and drive sustained success in our footprint and portfolio shaping activities. We took changes in the charges in the quarter arising from the ongoing consolidation of our Radford, Virginia facility into our Murphy, North Carolina facility.

Speaker Change: We now have a talented team of well trained dedicated 80 20 champions within the business.

Speaker Change: Acting as catalysts for this transformation.

Speaker Change: We're actively developing 820 tools and templates to embed the 80 20 mindset into our organizational DNA.

Speaker Change: This commitment ensures that our approach to 80 20 becomes a fundamental part of how we work and drive sustained success.

Patrick Roche: On footprint and portfolio shaping activities, we took changes in the charges in the quarter arising from ongoing consolidation of our Radford, Virginia facility into our Murphy, North Carolina facility. Murphy is a focused factory for industrial motors, having transferred avionics products out of that site over the last year. We failed with two small European businesses near completion, and we expect both to close in the coming quarter.

Speaker Change: On footprint and portfolio shaping activities.

Speaker Change: We took changes in the charges in the quarter arising from ongoing consolidation of our Radford, Virginia facility into our Murphy North Carolina facility.

Patrick Roche: Murphy is a focused factory for industrial motors, having transferred avionics products out of that site over the last year. The sales of two small European businesses are near completion, and we expect both to close in the coming quarter. Now turning to macroeconomic and market conditions. We're still in the midst of ongoing conflicts in Europe and the Middle East. The war in Ukraine has become a war of attrition.

Speaker Change: Murphy is a focused factory for industrial motors, having transferred avionics products out of that site over the last year.

Speaker Change: The sales of two small European businesses near completion, and we expect both to close in the coming quarter.

Patrick Roche: Now turning to macroeconomic and market conditions. We're still in the midst of ongoing conflicts in Europe and the Middle East. The war in Ukraine has become a war of attrition. This reality drives the pressing need to replenish depleted arsenals. The shifting geopolitical reality is leading to growing security concerns in Europe, where nations are increasing their defense spending, and in Asia-Pacific, where a conflict would require a different balance of capabilities. As a result, we're seeing strong, broad-based demand in defense and notable strengthening in Europe. In the United States, a limited increase in the Department of Defense budget is anticipated in 2020 and calendar year 2025.

Speaker Change: Now turning to macroeconomic and market and end market conditions.

Speaker Change: We're still in the midst of ongoing conflicts in Europe, and the middle East.

Speaker Change: The war in Ukraine has become a war of attrition.

Patrick Roche: This reality drives the pressing need to replenish depleted arsenals. The shifting geopolitical reality is leading to growing security concerns in Europe, where nations are increasing their defense spending, and in Asia-Pacific, where a conflict would require a different balance of capability.

Speaker Change: This reality drives the pressing need to replenish depleted arsenals.

Speaker Change: The shifting geopolitical reality is leading to growing security concerns in Europe, where nations are increasing their defense spending.

Speaker Change: And in Asia Pacific, where our conflict would require a different balance of capabilities.

Patrick Roche: As a result, we're seeing strong, broad-based demand for defense and notable strengthening in Europe. In the United States, a limited increase in the Department of Defense budget is anticipated in calendar year 2025. Given inflationary pressure, this means difficult prioritization decisions in the near term.

Speaker Change: As a result, we're seeing strong broad based demand in defense and notable strengthening in Europe.

Speaker Change: In the United States, a limited increase in department of Defense budget is anticipated in 'twenty.

Speaker Change: The year 2025.

Patrick Roche: Given inflationary pressure, this means difficult prioritization decisions in the near term. This could result in replenishment and sustainment being favored over some long-term strategic programs for a limited time. Despite this budgetary context, we have strong platform positions. We continue to ramp up our engineering efforts on Flora and as Bell has indicated that the next program milestone is imminent, making Flora a program of records. Rocket has resumed deliveries of F-35 to the United States government and is bullish about foreign military sales, and we've continued to deliver on our remote integrated weapons platform. As to the longer term, we're seeing once-in-a-generation type opportunities that could become important future platforms for Moog.

Speaker Change: Given inflationary pressure this means difficult prioritization decisions in the near term.

Patrick Roche: This could result in replenishment and sustainment being favored over some long-term strategic programs for a limited time. However, despite this budgetary context, we have strong platform positions. We continue to ramp up our engineering efforts on FLARA, and as Bill has indicated, the next program milestone is imminent, making FLARA a program of record. Lockheed has resumed deliveries of F-35s to the United States government and is bullish about foreign military sales, and we've continued to deliver on our remote integrated weapons platform. As for the longer term, we're seeing once-in-a-generation opportunities that could become important future platforms for Moog. Within these applications, we can leverage our component and system of systems engineering capabilities.

Speaker Change: This could result in replenishment and sustainment being favored over some long term strategic programs far.

Speaker Change: For a limited time.

Speaker Change: Despite the split story context, we have strong platform positions, we continue to ramp up our engineering efforts on Florida and as Bill has indicated that the next program milestone as imminent, making Florida program of record.

Speaker Change: Lockheed has resumed deliveries of F 30, fives to the United States government and as bullish about foreign military sales.

Speaker Change: And we've continued to deliver on our remote integrated weapons platform.

Speaker Change: As over the longer term, we're seeing once in a generation type opportunities that could become important future platforms for Moog.

Patrick Roche: Within these applications, we can leverage our component and system of systems engineering capabilities. There are multiple examples starting with 60 generation fighters and unmanned collaborative aircraft programs in play. In the United States, opportunities include the Navy's F-A-X-X and the Air Force's next generation air dominance aircraft. At Farnborough, the Tri Nations Global Combat Air Program concept model aircraft was revealed. Whilst there may be uncertainty on budget and timeline, there is a clear need for these next generation aircraft. In addition to aerial platforms, there are also next generation armored vehicle platforms, including the mechanized infantry combat vehicle known as XM-30 and vehicle modernization programs such as the United Kingdom's ground-based air defense.

Speaker Change: Within these applications, we can leverage our component and system of systems engineering capabilities there.

Patrick Roche: There are multiple examples, starting with sixth-generation fighters and unmanned collaborative aircraft programs in place. In the United States, opportunities include the Navy's FAXX and the Air Force's Next Generation Air Dominance Aircraft. At Farnborough, the Tri-Nations Global Combat Air Program concept model aircraft was revealed. Whilst there may be uncertainty on the budget and timeline, there is a clear need for these next generation aircraft. In addition to aerial platforms, there are also next-generation armored Vehicle platforms, including the Mechanized Inventory Combat Vehicle, known as XM-30, and vehicle modernization programs such as the United Kingdom's ground-based air defense.

Speaker Change: There are multiple examples starting with sixth generation fighters unmanned collaborative aircraft programs in play.

Speaker Change: In the United States opportunities include the Navy FAA execs and the Air Force's next generation Air dominance aircraft.

Speaker Change: At Farnborough, the Tri Nations Global Combat Air program concept model aircraft was revealed.

Speaker Change: Whilst there may be uncertainty on budget and timeline there is clear need for these next generation aircraft.

Speaker Change: In addition to aerial platforms. There are also next generation armored vehicle platforms, including the mechanized infantry combat vehicle known as <unk>.

Speaker Change: And vehicle modernization programs, such as the United Kingdom's ground based air Defense.

Patrick Roche: Finally, we see ample opportunities for missile, hypersonic, and strategic weapons programs. We look forward to playing our part on these platforms of the future.

Patrick Roche: Finally, we see ample opportunities for missile, hypersonic, and strategic weapons programs. We look forward to playing our part on these platforms of the future. Turning to commercial aircraft, the number of people flying continues to increase. Data shows that more people have traveled over the last couple of months than before the pandemic. This is driving aircraft flight hours, and consequently, aftermarket demand is increasing. While Farnborough was light on aircraft orders in general, we did note that 5787s and 25 A350s were added to the backlog.

Speaker Change: Finally, we see ample opportunities for missile hypersonic and strategic weapons programs, we look forward to playing our part on these platforms of the future.

Patrick Roche: Turning to commercial aircraft, the number of people flying continues to increase. Data shows that more people traveled over the last couple of months than pre-pandemic. This is driving aircraft flight hours and consequently after market demand is increasing. Whilst Farnborough was light on aircraft orders in general, we did note that 5,787s and 25 A350s were added to backlog. The focus of industry debate was the ability of Boeing and Airbus to hit targeted build rate, especially for narrow-body aircraft. For our part, we are well prepared to meet our customers' planned build rates.

Speaker Change: Turning to commercial aircraft the number of people flying continues to increase.

Speaker Change: Data shows that more people traveled over the last couple of months than pre pandemic.

Speaker Change: This is driving aircraft flight hours and consequently aftermarket demand is increasing.

Speaker Change: Whilst Farnborough was light on aircraft orders in general we did note that 50, 787% and 25% to $3 $50 were added to backlog.

Patrick Roche: The focus of industry debate was the ability of Boeing and Airbus to hit targeted build rates, especially for narrow body aircraft. For our part, we are well prepared to meet our customers' planned build rates. Finally, turning to industrial markets, manufacturing activity in the heart of Europe continues to be weak, affecting our industrial automation business. However, this impact has been partially compensated for by other subsegments such as simulation and energy.

Speaker Change: The focus of industry debate was the ability of Boeing and Airbus to hit targeted build rate, especially for narrow body aircraft.

Speaker Change: For our part we are well prepared to meet our customers' planned build rates.

Patrick Roche: Finally, turning to industrial markets, manufacturing activity in the heart of Europe continues to be weak, affecting our industrial automation business. However, this in fact has been partially compensated for by other sub-segments, such as simulation and energy. On a positive note, orders in the quarter were hired in the average training for quarters.

Speaker Change: Finally, turning to industrial markets manufacturing activity in the heart of Europe continues to be weak affecting our industrial automation business. However, this impact has been partially compensated for by other sub segments, such assimilation and energy.

Jennifer Walter: On a positive note, orders in the quarter were higher than the average trail for four quarters. Now, let me turn the call over to Jennifer for a detailed review of the financials. Thanks, Pat.

Speaker Change: On a positive note orders in the quarter were higher than the average trailing four quarters.

Jennifer Walter: Now, let me turn the call over to Jennifer for a detailed review of the financials. Thanks, Pat. I'll begin with our third quarter financial performance.

Speaker Change: Now, let me turn the call over to Jennifer for a detailed review of the financials. Thanks, Pat I'll begin with our third quarter financial performance. I'll, then provide an update on our guidance for FY 'twenty four.

Jennifer Walter: Thanks, Pat. I'll begin with our third quarter financial performance. I'll then provide an update on our guidance for FY 24. We had another great quarter from a sales and earnings perspective. Sales of $905 million were very strong, adjusted operating margin of 12.3% was robust, and adjusted earnings per share of $1.91 exceeded the high end of our guidance range. Sales in the third quarter were 6% higher than last year's third quarter. Aerospace and defense sales were up nicely, while industrial sales were fairly flat.

Jennifer Walter: I'll then provide an update on our guidance graph by 24. We had another great quarter from a sales and earnings perspective. Sales of $905 million were very strong; adjusted operating margin of 12.3% was robust, and adjusted earnings per share of $1.91 exceeded the high end of our guidance range. Sales in the third quarter were 6% higher than last year's third quarter. Aerospace and defense sales were up nicely, while industrial sales were fairly flat. The largest increase in segment sales was in military aircraft. Sales of $2007 million were up 18% over the third quarter last year.

Jennifer: We had another great quarter from a sales and earnings perspective sales of $905 million were very strong adjusted operating margin of 12, 3% with Airbus and adjusted earnings per share of $1 91 exceeded the high end of our guidance range.

Speaker Change: Sales in the third quarter were 6% higher than third quarter.

Speaker Change: Aerospace and defense sales were up nicely, while industrial sales were fairly flat.

Jennifer Walter: The largest increase in segment sales was in military aircraft. Sales of $207 million were up 18% over the third quarter last year. Activity on the FLARA tiltrotor aircraft program began to ramp up in the third quarter last year and has steadily increased since that time, accounting for half of the increase in military aircraft sales this quarter. In addition, over the past couple of years, certain other development work has shifted into production, and we're now beginning to see the ramp-up in production that will continue for the next few years. States and defense sales of $258 million increased 7% over the third quarter last year. There continues to be strong defense demand across our portfolio associated with U.S. defense priorities and European defense needs.

Speaker Change: The largest increase in segment sales within military aircraft sales of $207 million were up 18% over the third quarter last year.

Jennifer Walter: Activity on the Florida Tilt Router Aircraft Program began to ramp in the third quarter last year and has steadily increased since that time. Accounting for half of the increase in military aircraft sales is quarter. In addition, over the past couple of years, certain other development work has shifted into production, and we're now beginning to see the ramp up in production that will continue for the next few years. Space and defense sales of $258 million increased 7% over the third quarter last year. There continues to be strong defense demand across our portfolio associated with US defense priorities and European defense needs.

Speaker Change: Pivoting on the acquirer tilt rotor aircraft program began to ramp in the third quarter last year and has steadily increased since that time accounting for half of the increase in military aircraft sales this quarter.

Speaker Change: In addition over the past couple of years certain other development work has shifted into production and we're now beginning to see the ramp up in production that will continue for the next few years.

Speaker Change: Space and defense sales of $258 million increased 7% over the third quarter last year. There continues to be strong defense demand across our portfolio associated with U S defense priorities in Europe, KPN defense need.

Jennifer Walter: In addition, launch via collectivity increased in our space business. Commercial aircraft sales of $189 million increased 6% over the same quarter a year ago. This reflects increased production in our wide-body business. Industrial sales were $250 million in the third quarter. That's down 1% from the same quarter a year ago, or flat when considering the changes in foreign currency rates. Industrial automation sales were down from the very strong quarter a year ago. Dislecting the flow down orders we've seen in recent quarters. The other sub-segment, energy, simulation and test, and medical were all up from the third quarter last year.

Jennifer Walter: In addition, launch vehicle activity increased in our space business. Commercial aircraft sales of $189 million increased 6% over the same quarter a year ago. This reflects increased production in our wide body business. Industrial sales were $250 million in the third quarter. That's down 1% from the same quarter a year ago or flat when considering the changes in foreign currency rates. Industrial automation sales were down from a very strong quarter a year ago, reflecting the slowdown in orders we've seen in recent quarters. The other subsegments, Energy, Simulation, and Test, and Medical, were all up from the third quarter last year. Demand for flight simulation systems continues to be strong.

Speaker Change: In addition launch vehicle activity increased in our space business.

Speaker Change: Commercial aircraft sales of $189 million increased 6% over the same quarter a year ago.

Speaker Change: This reflects increased production in our wide body business.

Speaker Change: Industrial sales were $250 million in the third quarter, that's down 1% from the same quarter a year ago, our flat when considering the changes in foreign currency rate.

Speaker Change: Industrial automation sales were down from the very strong quarter a year ago.

Speaker Change: Slow down.

Speaker Change: We've seen in recent quarters.

Speaker Change: The other subsegment energy simulation test and medical were all up from the third quarter last year.

Jennifer Walter: The demand for flight simulation systems continues to be strong in this quarter. Auto-test demand throw the increase in this sub-segment. We also benefited within medical devices from a competitor's challenges this quarter.

Speaker Change: Demand for flight simulation systems continues to be strong in this quarter auto test demand drove the increase in this sub segment.

Jennifer Walter: In this quarter, auto test demand drove the increase in this subsegment. We also benefited within medical devices from a competitor's challenges this quarter. I will now shift to operating margin. Adjusted operating margin of 12.3% in the third quarter increased 210 basis points from the third quarter last year. Adjustments to operating profit this quarter and the same quarter a year ago were $6 million and $2 million, respectively. These adjustments reflect restructuring and asset impairment charges, largely in our industrial segment, as we continue to drive simplification.

Speaker Change: Also benefited within medical devices from our competitors' challenges this quarter.

Jennifer Walter: We'll now shift to operating margin. Adjusted operating margin of 12.3% in the third quarter increased 210 basis points from the third quarter last year. Adjustments to operating profit this quarter in the same quarter a year ago were $6 million and $2 million, respectively. These adjustments reflect restructuring and asset impairment charges largely in our industrial segment as we continue to drive simplification. Adjusted operating margins increased over the third quarter last year in each of our segments. In space and defense, operating margin increased 490 basis points to 12.7%. This increase is associated with improved performance on space vehicle programs. Also partially by investments to fund once in a generation pursue.

Speaker Change: I will now shift to operating margin.

Speaker Change: Adjusted operating margin of 12, 3% in the third quarter increased 210 basis points from the third quarter last year.

Speaker Change: Adjustments to operating profit this quarter in the same quarter, a year ago or $6 million and $2 million, respectively. These adjustments reflect restructuring and asset impairment charges largely in our industrial segment as we continue to drive simplification.

Jennifer Walter: Adjusted operating margins increased over the third quarter last year in each of our segments. In Space and Defense, Operating Margin increased 490 basis points to 12.7%. This increase is associated with improved performance on space vehicle programs.

Speaker Change: Adjusted operating margins increased over the third quarter last year in each of our segments.

Speaker Change: In space and defense operating margin increased 490 basis points to 12, 7%.

Speaker Change: This increase is associated with improved performance on base vehicle program.

Jennifer Walter: Offset partially by investments defined once in a generation pursued, the operating margin for military aircraft was 11.9%, up 140 basis points, reflecting cost absorption on the FLARA program this quarter. Commercial aircraft operating margin was 13.1%, up 190 basis points over the third quarter last year, as we saw benefits from both pricing and volume, as well as MIPS. Industrial operating margin was 11.7% in the third quarter, up 20 basis points. This increase was attributable to benefits from pricing initiatives, offset by pressures associated with lower industrial automation sales and planned product management. Our adjusted effective tax rate in the third quarter was 19.3% compared to 16.0% in the third quarter last year.

Speaker Change: Offset partially by investments to fund once in a generation Christine.

Jennifer Walter: The operating margin for military aircraft was 11.9%. Up 140 basis points, reflecting cost absorption on the floor of programless quarter. Commercial aircraft operating margins was 13.1%, up 190 basis points over the third quarter last year. As we saw benefits from both pricing and volume, as well as mix. Industrial operating margin was 11.7% in the third quarter, up 20 basis points. This increase was attributable to benefits from pricing initiatives, offset by pressures associated with lower industrial automation sales and plan product factors. Our adjusted effective tax rate in the third quarter was 19.3%. Compared to 16.0% in the third quarter last year.

Speaker Change: The operation operating messaging for military aircraft was 11, 9% up 140 basis points, reflecting cost absorption on the Flyer program this quarter.

Speaker Change: Commercial aircraft operating margin was 13, 1% up 190 basis points over the third quarter last year as we saw benefits from both pricing and volume as well as Mac.

Speaker Change: Industrial operating margin was 11, 7% in the third quarter up 20 basis points.

Speaker Change: This increase was attributable to benefits from pricing initiatives offset by pressures associated with lower industrial automation sales and planned product offerings.

Speaker Change: Our adjusted effective tax rate in the third quarter was 19, 3% compared to 16 <unk> percent in the third quarter last year.

Jennifer Walter: We're benefiting from high level VivR&D tax credits, and we've captured these benefits in a return to provisions third quarter adjustments in both years. Putting it all together, adjusted earnings per share of $1.91, or up 39% over the same quarter a year ago. Operating margin expansion, along with increased operating profit associated with higher sales, drove the increase in earnings per share. Compared to our previous guidance, adjusted earnings per share for the third quarter came in well above the high end of our range. Higher operating profit associated with strong sales and margin expansion, along with a lower than 4% of the active tax rate, drove the increase in earnings per share.

Jennifer Walter: We're benefiting from high levels of R&D tax credits and have captured these benefits in our return to provision third quarter adjustments in both years. Putting it all together, adjusted earnings per share of $1.91, we're up 39% over the same quarter a year ago. Operating margin expansion, along with increased operating profit associated with higher sales, drove the increase in earnings per share. Compared to our previous guidance, adjusted earnings per share for the third quarter came in well above the high end of our range.

Speaker Change: We're benefiting from high levels of R&D tax credit and have captured these benefits and a return to provision third quarter adjustments in both years.

Speaker Change: Putting it altogether adjusted earnings per share of $1 91 were up 39% over the same quarter a year ago.

Speaker Change: Operating margin expansion, along with increased operating profit associated with higher sales drove the increase in earnings per share.

Jennifer Walter: Higher operating profit associated with strong sales and margin expansion, along with a lower than forecasted effective tax rate, drove the increase in earnings per share. This was partially offset by higher non-operating expenses. Let's now shift over to cash flow. Free cash flow for the third quarter was a $2 million use of cash.

Speaker Change: Compared to our previous guidance adjusted earnings per share for the third quarter came in well above the high end of our range higher operating profit associated with strong sales and margin expansion along with the lower than forecasted effective tax rate drove the increase in earnings per share. This was partially offset by <unk>.

Jennifer Walter: This was partially offset by higher non-operating expenses.

Speaker Change: Higher nonoperating expenses.

Jennifer Walter: Let's now shift over to cash flow. Three cash flow for the third quarter was a $2 million use of cash. Our cash performance was driven by growth in networking capital. Customer advances were a use of cash this quarter, reflecting the achievement of significant progress across several major defense programs. We also had strong buildings, resulting in higher receivables that were a use of cash, which should be collected over the next quarter or two. Physical inventories, which has been a consumer of cash over recent quarters, were relatively flat in the third quarter. Capital expenditures were $32 million in the third quarter, down from the levels of the past few quarters.

Speaker Change: Let's now shift over to cash flow.

Speaker Change: Free cash flow for the third quarter was $2 million use of cash our cash performance was driven by growth in networking capital.

Jennifer Walter: Our cash performance was driven by growth in networking capital. Customer advances were a use of cash this quarter, reflecting the achievement of significant progress across several major defense programs. We also had strong billings resulting in higher receivables that were a use of cash, which should be collected over the next quarter or two. Physical inventories, which have been a consumer of cash in recent quarters, were relatively flat in the third quarter.

Speaker Change: Customer advances were a use of cash this quarter, reflecting the achievement of significant progress across several major defense programs.

Speaker Change: We also had strong billings, resulting in higher receivables that were a use of cash which should be collected over the next quarter or two.

Speaker Change: Physical inventories, which has been a consumer of cash over recent quarters were relatively flat in the third quarter.

Jennifer Walter: Capital expenditures were $32 million in the third quarter, down from the levels of the past few quarters. We expect our capital expenditures to return to a more typical level next quarter. Our leverage ratio, calculated on a net debt basis at the end of the third quarter, was 2.2 times, near the low end of our target range.

Speaker Change: Capital expenditures were $32 million in the third quarter down from the levels of the past few quarters, we expect our capital expenditures to return to a more typical level next quarter.

Jennifer Walter: We expect our capital expenditures to return to a more typical level next quarter. Our leverage ratio calculated on a net debt basis at the end of the third quarter was 2.2 times, near the low end of our range. Our capital deployment priorities, both long-term and near-term, are unchanged. Our current priority continues to be investing for organic growth.

Speaker Change: Our leverage ratio calculated on a net debt basis at the end of the third quarter was $2 two time near the low end.

Jennifer Walter: Our capital deployment priorities, both long-term and near-term, are unchanged. Our current priority continues to be investing for organic growth. We'll now shift over to our updated guidance for this year. We're raising our sales guidance, affirming our adjusted operating margin, and increasing our adjusted earnings per share guidance for FY24. Fiscal year 2024 is measuring up to be a great step towards achieving our long-term financial targets. This year, our sales will grow by 8%, adjusted operating margin will expand by 150 basis points, and adjusted earnings per share will increase by 20%.

Speaker Change: <unk>.

Speaker Change: Our capital deployment priorities, both long term and near term are unchanged. Our current priority continues to be investing for organic growth.

Jennifer Walter: We'll now shift over to our updated guidance for this year. We're raising our sales guidance, affirming our adjusted operating margin, and increasing our adjusted earnings per share guidance for FY24. Fiscal year 2024 is measuring up to be a great step towards achieving our long-term financial targets. This year, our sales will grow by 8 percent. Adjusted operating margin will land by 150 basis points, and adjusted earnings per share will increase by 20 percent. We're projecting sales of $3.5 billion in FY24, with sales growth in each of our segments. Commercial aircraft sales will grow related to the production ramps on wide body and other programs. Military aircraft sales will increase due to having a full-year's worth of farer sales.

Speaker Change: I will now shift over to our updated guidance for this year.

Speaker Change: We're raising our sales guidance affirming our adjusted operating margin and increasing our adjusted earnings per share guidance for FY 'twenty four.

Speaker Change: Fiscal year 2024 is measuring up to be a great step towards achieving our long term financial targets.

Speaker Change: This year, our sales will grow by 8% adjusted operating margin will expand by 150 basis points and adjusted earnings per share will increase by 20%.

Jennifer Walter: We're projecting sales of $3.58 billion in FY24 with sales growth in each of our segments. Commercial aircraft sales will grow as a result of the production ramps on widebody and other programs. Military aircraft sales will increase due to having a full year's worth of FAR sales. Base and defense sales will also increase due to strong defense demand. Sales in the industrial sector will increase slightly, with a softening in industrial automation being compensated for by growth in other submarkets.

Speaker Change: We're projecting sales of $3 five 8 billion in FY 'twenty four with sales growth in each of our segments.

Speaker Change: Commercial aircraft sales will grow related to the production ramps on wide body and other program.

Speaker Change: Military aircraft sales will increase due to having a full years worth of Clara sale.

Jennifer Walter: Saving defense sales will increase due to strong defense demands. Sales in industrial will increase slightly, with softening an industrial automation being compensated for by growth in other submarkets. We're increasing our guidance for FY24 sales by $25 million from 90 days ago. For industrial, we're increasing our sales guidance by $40 million to reflect a strong level of sales in the third quarter and an improved outlook for the fourth quarter. We're increasing our sales guidance for military aircraft by $15 million based on our performance of the past quarter. First Basin Defense, we're increasing our sales guidance by $10 million to reflect strong defense demands.

Speaker Change: Space and defense sales will increase due to strong defense demand sale.

Speaker Change: Sales in industrial will increase slightly with softening in industrial automation being compensated for by growth in other submarkets.

Jennifer Walter: We're increasing our guidance for FY24 sales by $25 million from 90 days ago. For industrial, we're increasing our sales guidance by $40 million to reflect the strong level of sales in the third quarter and an improved outlook for the fourth quarter. We're increasing our sales guidance for military aircraft by $15 million based on our performance this past quarter. For First Base and Defense, we're increasing our sales guidance by $10 million to reflect strong defense demand. We're reducing our sales guidance for commercial aircraft by $40 million, primarily due to a change in the timing of orders, which is causing a short-term delay in sales and a temporary increase in inventory.

Speaker Change: We're increasing our guidance for FY 'twenty for sales by $25 million from 90 days ago.

Speaker Change: For industrial we are increasing our sales guidance by $40 million to reflect the strong level of sales in the third quarter and an improved outlook for the fourth quarter.

Speaker Change: We're increasing our sales guidance for military aircraft by $15 million based on our performance this past quarter.

Speaker Change: For space and defense, we're increasing our sales guidance by $10 million to reflect strong defense demand we.

Jennifer Walter: We're reducing our sales guidance for commercial aircraft by $40 million, primarily due to a change in the timing of orders, which is causing a short-term delay in sales and a temporary increase in inventory.

Speaker Change: We're reducing our sales guidance for commercial aircraft by $40 million, primarily due to a change in the timing of orders, which is causing a short term delay in sales and a temporary increase in inventory.

Jennifer Walter: Less shift over to operating margin. We're projecting our adjusted operating margin in FY 24 to be 12.4%, the same as we guided to a quarter ago, shows a different mix between segments. We're increasing guidance and commercial aircraft to reflect the strong third quarter of performance, and we're bringing down Basin Defense for planned costs to fund business pursuits. Our other two segments will be down just marginally. This results in operating margins of 13.0% in space and defense, 11.9% in military aircraft, 12.0% in commercial aircraft, and 12.5% in industrial. For FY 24, we're projecting adjusted earnings per share of $7.40, plus or minus 10 cents.

Jennifer Walter: Let's shift over to operating margin. We're projecting our adjusted operating margin in FY 24 to be 12.4%, the same as we guided to a quarter ago, with a different mix between segments. We're increasing guidance in commercial aircraft to reflect the strong third quarter performance, and we're bringing down space and defense for planned costs to fund business pursuit. Our other two segments will be down just marginally.

Speaker Change: Let's shift over to operating margin.

Speaker Change: We're projecting our adjusted operating margin in FY 'twenty four to 12, 4% the same as we guided to a quarter ago.

Speaker Change: Current mix between segments.

Speaker Change: We are increasing guidance in commercial aircraft to reflect our strong third quarter performance.

Speaker Change: We're bringing down based on defense for planned cost to fund business person.

Speaker Change: Our other two segments will be down just marginally.

Jennifer Walter: This results in operating margins of 13.0% in space and defense, 11.9% in military aircraft, 12.0% in commercial aircraft, and 12.5% in industrial. For FY24, we're projecting adjusted earnings per share of $7.40, plus or minus 10 cents. We've increased our guidance from 90 days ago by 15 cents, which reflects the benefit associated with a lower effective tax rate in the third quarter and higher operating profits largely realized in the third quarter, offset partially by higher non-operating costs.

Speaker Change: This results in operating margin of 13, 8% in space and defense.

Speaker Change: 11, 9% and military aircraft 12, <unk> percent in commercial aircraft and 12, 5% and industrial.

Speaker Change: For FY 'twenty four we're projecting adjusted earnings per share of $7 40, plus or minus 10.

Jennifer Walter: We've increased our guidance from 90 days ago by 15 cents, which reflects the benefit associated with a lower effective tax rate in the third quarter and higher operating profit, largely realized in the third quarter, offset partially by higher non-operating costs. From here to FY 23, earnings per share will be up 20%. This reflects strong operational performance and grows in the business, partially offset by higher non-operating expenses and a higher effective tax rate.

Speaker Change: We've increased our guidance from 90 days ago by 15, which reflects the benefit associated with a lower effective tax rate in the third quarter and higher operating profit largely realized in the third quarter offset partially by higher nonoperating costs.

Jennifer Walter: Compared to FY23, earnings per share will be up 20%. This reflects strong operational performance and growth in the business, partially offset by higher non-operating expenses and a higher effective tax rate. Finally, turning to free cash flow, our cash situation is somewhat more pressured than previously guided. We've consumed $77 million of cash year-to-date, and we expect that we will generate roughly that amount in the fourth quarter. Working capital improvements will drive our cash generation, with physical inventories coming down due to strong shipments.

Speaker Change: Compared to FY2023 earnings per share will be up 20%. This reflects strong operational performance and growth in the business, partially offset by higher non operating expenses and a higher effective tax rate.

Jennifer Walter: Finally, turning to free cash flow. Our cash situation is somewhat more pressured than previously guided. We've consumed $77 million a cash year to date, and we expect that we will generate roughly that amount in the fourth quarter. We'll see capital improvements will drive our cash generation, with physical inventory coming down due to strong shipment. In addition, we expect receivables to generate cash on strong collections. Customer advances will remain a use of cash as we continue to work them down. For the year, we're projecting capital expenditures of $150 million, down from our previous guidance, reflecting the later funds in the third quarter.

Speaker Change: Finally, turning to free cash flow.

Speaker Change: Our cash situation is somewhat more pressure than previously guided.

Speaker Change: We've consumed $77 million of cash year to date, and we expect that we will generate roughly that amount in the fourth quarter.

Speaker Change: Working capital improvements will drive our cash generation with physical inventories coming down due to strong shipments.

Jennifer Walter: In addition, we expect receivables to generate cash on strong collections. Customer advances will remain a use of cash as we continue to work them down. For the year, we're projecting capital expenditures of $150 million, down from our previous guidance, reflecting the lighter spend in the third quarter. Overall, our third quarter financial performance was solid, and we're confident in a strong finish to the year. Now, I'll turn it over to Pat.

Speaker Change: In addition, we expect receivables to generate cash on strong collections.

Speaker Change: Customer advances will remain in use of cash as we continue to work them down.

Speaker Change: For the year, we're projecting capital expenditures of $150 million down from our previous guidance, reflecting the latest plans in the third quarter.

Jennifer Walter: Overall, our third quarter financial performance will be solid, and we're confident in a strong finish to the year.

Speaker Change: Overall, our third quarter financial performance was solid and we are confident in a strong finish to the year.

Patrick Roche: And now I'll turn it over to Pat. Thanks, Jennifer. I'm pleased with another impressive performance this quarter, and I look forward to continued strength as we close out the year. We continue to deliver improved financial performance.

Speaker Change: Now I will turn it over to Pat.

Patrick Roche: I'm pleased with another impressive performance this quarter, and I look forward to continued strength as we close out the year. We continue to deliver improved financial performance.

Pat: Thanks, Jennifer I'm.

Pat: I am pleased that another impressive performance this quarter.

Pat: And I look forward to continued strength as we close out the year, we continued to deliver improved financial performance now lets turn it over to questions.

Patrick Roche: Now, let's turn it over to questions. Thank you. If you'd like to ask

Patrick Roche: Now, let's turn it over to questions. Thank you.

Operator: Thank you. If you'd like to ask a question, please signal by pressing star one on your telephone keypad. If you are, you may speak on your phone; please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions, and we'll go first to Michael Ciarmoli with Truist Security.

Operator: If you'd like to ask a question, please signal by pressing star one on your telephone keypad. If you are, you may speak your phone. Please make sure your mute function is turned to wire signal tree char equipment. Again, press star one to ask a question. We'll pause for just a moment. Tell out everyone an opportunity to signal for questions.

Speaker Change: Thank you if you'd like to ask a question. Please signal by pressing star one on your telephone keypad. If you are you may speaker phone. Please make sure your mute function is churn.

Pat: Why your signal to reach our equipment again press star one to ask a question, we'll pause for just a moment hello, everyone an opportunity to signal for questions.

Michael Ciarmoli: And we'll go first to Michael here, Molly, with true security. Hey, good morning, guys. Thanks for taking a question. Pat or Jennifer, I guess the change in the commercial aircraft revenue may be pretty significant this late in the year; I guess that's wide body driven. Jennifer, I think you said timing of orders there. Can you maybe give a little bit more color, you know, I guess, against the backdrop of what we've seen from Airbus with their downward revision. And Boeing sort of ongoing challenges. Yeah, Michael, I wouldn't read too much into it as a reflection of a trend.

Michael <unk>: And we will go first to Michael <unk> with <unk> Securities.

Michael Ciarmoli: Hey, good morning, guys. Thanks for taking the time to answer the question.

Michael <unk>: Hey, good morning, guys. Thanks for taking the questions.

Michael Ciarmoli: Pat or Jennifer, I guess the change in commercial aircraft revenue may be pretty significant this late in the year. I guess that's wide body driven. Jennifer, I think you said timing of orders there. Can you maybe give a little bit more color, I guess, against the backdrop of what we've seen from Airbus with their downward revision and Boeing's sort of ongoing challenges?

Pat: Pat.

Pat: Jennifer I guess the change in the commercial aircraft revenue.

Speaker Change: Maybe pretty significant this late in the year I guess, that's wide body driven Jennifer I think you said.

Speaker Change: Timing of orders there can you maybe give a little bit more color I guess against the backdrop of what we've seen from from Airbus.

Speaker Change: The revision in boeing's sort of ongoing challenges.

Patrick Roche: Yeah, Michael, I wouldn't read too much into it as a reflection of a trend. It's a timing issue within the course of Q3 and Q4, the placement of orders from one of our major customers.

Speaker Change: Yes, Michael I wouldn't read too much into it is it a reflection of a trend.

Jennifer Walter: It's a timing issue within the course of Q3 and Q4, the placement of orders from one of our significant customers, and that's affecting the sales level we're recording within the quarter.

Speaker Change: It's a timing issue within the course of Q3 and Q4, the placement of orders from one of our significant customers and thats affecting the sales level were recording within the quarter. It doesn't reflect the change in production rates, we are running on any of the wide body programs.

Patrick Roche: It doesn't reflect the change in production rates; we're running on any of the wide body programs. Okay, where are you right now on the wide body rate? I guess more specifically 787. I think you have been delivering ahead. Is that still kind of the plan? And, you know, do we have to worry about an inventory destock situation at any point? So we're delivering to Boeing at a rate of about five ship sets per month, and we have an in-house production rate that's in line with their plans. So we're in a lot of communication with Boeing about the master production schedule.

Unknown Speaker: Okay, are you where you are?

Speaker Change: Okay are you where are you right now on the wide body rates I guess more specifically 787 I think you had been delivering ahead is that is that still kind of a plan and do we do we have to worry about an inventory destock situations at any point.

Patrick Roche: So, we're delivering to Boeing at a rate of about five shipsets per month, and we have an in-house production rate that's in line with their plans. So, we're in a lot of communication with Boeing about the master production schedule. We don't see an impact here at the moment. We're continuing to monitor the situation closely with them. Jennifer, do you have anything additional?

Speaker Change: So we are delivering to Boeing at a rate of about five ship sets per month, and we have in house production rate. That's in line with their plans. So we're in a lot of communication with Boeing about the master production schedule.

Jennifer Walter: We don't see impact here at the moment. We're continuing to monitor the situation closely with them.

Speaker Change: We don't see impact here at the moment.

Speaker Change: We're continuing to monitor the situation closely with them.

Jennifer Walter: So, Jennifer, do you have anything additional? Yeah, I think what you described has fair, you know, the constant communications that we're having with our customer right now, so that we can find a solution that needs our needs and their needs. We're all looking for a healthy supply chain as we ramp off, and so that's something that's certainly important to us. And we're also mindful that we come to resolutions on these things that make sense from a financial perspective for us as well. Yeah, I mean, the stability of the supply chain is crucially important to both us as we manage a whole tier of sub-suppliers, but also to Boeing as they acknowledged in their earnings call yesterday as well.

Speaker Change: So Jennifer do you have anything additional.

Jennifer Walter: Yeah, I think what you described, Pat, is fair. You know, it's the constant communication that we're having with our customer right now so that we can find a solution that meets our needs and their needs. We're all looking for a healthy supply chain as we ramp up, and so that's something that's certainly important to us. And we're also mindful that we come to resolutions on these things that make sense from a financial perspective for us as well.

Jennifer: I think what <unk> had its fair.

Jennifer: Constant communications that we're having with our customer right now so that we can find a solution that needs.

Jennifer: Our needs and their needs. We're all looking for a healthy supply chain as we ramp up and so thats something that.

Speaker Change: Certainly important to us and we're also mindful that we come to resolution on these things that make sense from a financial perspective for us as well.

Unknown Speaker: Yeah, I mean, the stability of the supply chain is crucially important to both us as we manage a whole tier of sub-suppliers, but also to Boeing, as they acknowledged in their earnings call yesterday as well.

Speaker Change: The stability of the supply chain is crucially important to both us as we manage at a whole tier of sub suppliers, but also to Boeing as they acknowledged in their earnings call yesterday as well.

Unknown Speaker: We have a shared interest. Got it. What I'm within commercial, I guess, can you give any color as to what was happening in the quarter and expectations for the aftermarket side?

Speaker Change: Yes sure.

unknown: Got it.

Speaker Change: Right.

Michael Ciarmoli: What, within commercial, I guess, can you give any color as to what was happening in the quarter and expectation for the aftermarket side? So, as I said in the end market comments, in general, Michael aftermarket is strong for us as a business. We expected that will continue within our numbers. We signed up additional contracts with more airlines, bringing them under our support contracts. So, feel positive about the aftermarket business. Correct. Yeah. Yeah, got it, Jennifer. There's just some shifts also that we're seeing in an aftermarket right now between OE and aftermarket that's making our OE a little bit stronger this quarter versus our aftermarket.

Speaker Change: Got it.

Speaker Change: Within commercial I guess can you give any color as to what was happening in the quarter and expectation for for the aftermarket side.

Speaker Change: Okay.

Patrick Roche: I said in the end market comments, in general, Michael, the aftermarket is strong for us as a business. We expect that that will continue within our numbers. We signed additional contracts with more airlines, bringing them under our support contracts. So we feel positive about the aftermarket business.

Speaker Change: So.

Speaker Change: I said in the end market comments in general Michael aftermarket is strong for us as a business.

Speaker Change:

Speaker Change: We expect that that will continue within the within our numbers.

Speaker Change: We signed additional contracts with more airlines, bringing them under our support contracts.

Speaker Change: So we feel positive about the aftermarket business.

Unknown Speaker: Unknown Speaker. Yes.

Michael <unk>: Okay. Thanks, Scott.

Unknown Speaker: Thank you very much. Thank you. Thank you.

Michael <unk>: Okay.

Unknown Speaker: There's just some shifts also that we're seeing in the aftermarket right now between OE and aftermarket that's making our OE a little bit stronger this quarter versus our aftermarket. That tends to normalize, it depends on just the prioritization of work that we're putting through the factory. So you'll see a little bit of a shift to that, but that's again, similarly, not a trend that we expect to continue. And maybe I'll try and sneak one more in.

Jennifer: Yes go ahead Jennifer.

Jennifer: There are some shifts also that we're seeing in aftermarket right now between.

Speaker Change: OE and aftermarket that is making our OEM a little bit stronger this quarter versus our aftermarket that tends to normalize it depends on just the prioritization of work that we're putting through the factory. So you'll see a little bit of shift of that but thats again, similarly, not a trend that we expect to continue.

Jennifer Walter: That tends to normalize. It depends on just the prioritization of work that we're putting through the factory, so you'll feel a little bit of shift to that, but that's again similarly not a trend that we expect to continue.

Michael Ciarmoli: Got it. And maybe I'll try and sneak one more in, Pat, you guys are going to be maybe in the unenviable position of reporting the fourth quarter with an election, everything that's going on in this market, any any sort of early read you'd be willing to give us on fiscal 25? No, we'll give the guidance for 20...

Michael Ciarmoli: And maybe I'll try and sneak one more in, Pat. You guys are going to be maybe in the unenviable position of reporting fourth quarter with an election, everything that's going on in this in this market. Any any sort of early read you'd be willing to give us on fiscal 25. No, we'll give the guidance for 25 in the November call. Michael book in general. We, as an organization, as I said, are making good progress with the initiatives we're driving on margin enhancement. We expect that to continue; our sales have been strong and are growing. We expect that to continue as well.

Michael <unk>: Got it and maybe I'll try and sneak one more in Pat you guys are going to be maybe in an enviable position of reporting fourth quarter with an election everything thats going on in this market any any sort of early read you'd be willing to give us on our fiscal 'twenty five.

Pat: No we'll give guidance for 'twenty five in the November call Michael book in General, we as an organization as I said, we're making good progress with the initiatives. We are driving on margin enhancement. We expect that to continue our sales have been strong and are growing we expect that to continue.

Patrick Roche: In general, we as an organization, as I said, are making good progress with the initiatives we're driving for margin enhancement. We expect that to continue. Our sales have been strong and are growing. We expect that to continue as well. So I think we're looking into 25 with a degree of optimism that we will deliver on all of the plans that we've laid out previously.

Patrick Roche: So I think we're looking we're looking into 25 with a degree of optimism that we will deliver on all of the plans that we've laid out previously. So whatever happens in the election, I don't think it knocks us off path at all. Got it perfect.

Michael <unk>: As well so I think we're looking.

Michael <unk>: We're looking into 25 with a degree of optimism that we will deliver on all of the plans that we've laid out previously so.

Michael <unk>: Whatever happens in the election, I don't think it knocks us off path at all.

Michael Ciarmoli: Got it. Perfect. I'll jump back in the queue, guys. Thanks.

Michael Ciarmoli: I'll jump back in the queue, guys.

Speaker Change: Got it perfect I'll jump back in the queue guys. Thanks.

Kristine Liwag: Thanks. We'll go next to Kristine Lewag with Morgan Stanley. Hey guys, great to see you at Farmboro. Pat, Pat, Jennifer, you know, you're now guiding to minimal free cash flow this year. So what's the path of some of the working capital unwind in 4Q to get to the positive territory. And then, you know, I think Jennifer, you highlighted that there's some pressure on receivables. Is there a change in what you guys are charging your customers to get these days on the receivables, you know, at a shorter and have cash conversion at a faster cycle? Yeah.

Kristine Liwag: We'll go next to Kristine Liwag with Morgan Stanley.

Kristine <unk>: We will go next to Kristine <unk> with Morgan Stanley.

Kristine Liwag: Hey, guys, great to see you at Farnborough. Pat, Jennifer, you know, you're now guiding to minimal free cash flow this year. So what's the path of some of the working capital unwinding in 4Q to get to positive territory? And then, you know, I think Jennifer, you highlighted that there's some pressure on receivables. Is there a change in what you guys are charging your customers to get bases on the receivables, you know, at a shorter and have cash conversion at a faster rate?

Kristine: Hey, guys great to see you at Farnborough.

Kristine: Jennifer you are now guiding to minimal free cash flow. This year. So what's the path of some of the working capital unwind in <unk> to get to the positive territory and then I think Jennifer you highlighted that there is some pressure on receivables.

Speaker Change: Theyre a change in what you guys are charging your customers to get these days on the receivables.

Speaker Change: At a shorter.

Speaker Change: And have cash conversion at a faster cycle.

Jennifer Walter: Yeah, thanks, Kristine. It was nice seeing you there as well.

Jennifer Walter: Thanks, Kristine. It was nice seeing you there as well. For the fourth quarter in our cash flow, we've got, we're expecting positive cash flow essentially to make up for the use of cash that we have in the third quarter. We're going to see it in a few places. First of all, receivables. So our receivables grew, putting pressure on cash in the third quarter. Where, because we've got the strong receivables, we'll be able to collect much of that. Different parts of the business have different collection terms, and so I made a reference to in the next quarter or two.

Jennifer: Okay. Yeah. Thanks, 15, it was nice seeing you there as well for the fourth quarter and our cash flow we've got.

Speaker Change: Expecting positive cash flow essentially to make up for the use of cash that we had in the third quarter.

Michael <unk>: We're going to see it in a few places first of all receivables receivable grew putting pressure on cash in the third quarter.

Michael <unk>: Because we've got the strong receivables will be able to collect much of that different parts of the business have different collection terms until I made a reference to in the next quarter or two that a large portion we will be able to collect off of the strong receivables that we had in the third quarter. Some pressure in the third quarter becomes a benefit in the fourth quarter on the receiver.

Jennifer Walter: For the fourth quarter, in our cash flow, we're expecting positive cash flow essentially to make up for the use of cash that we had in the third quarter. We're going to see it in a few places. First of all, receivables. So our receivables grew, putting pressure on cash in the third quarter. Because we've got the strong receivables, we'll be able to collect much of that. However, different parts of the business have different collection terms.

Jennifer Walter: But a large portion we will be able to collect off of the strong receivables that we had in third quarter. So the pressure in the third quarter becomes a benefit in the fourth quarter on the receivables.

Jennifer Walter: From a physical inventory, this is actually kind of a nice story for us. It's a slow story. But in this quarter, we've had flat levels of physical inventories from a cash perspective. And we're going to actually see that be a slight benefit as we look into the next quarter. We're going to work down some of those physical inventories. So it's really starting to turn after we've had some growth over the past couple of years in the physical inventory. So this quarter is nice that we got to that level space, and we'll have a small benefit next quarter as we're doing it.

Jennifer Walter: And so I made a reference to the next quarter or two, but a large portion of it we will be able to collect off of the strong receivables that we had in the third quarter. So the pressure in the third quarter becomes a benefit in the fourth quarter on the receivables. From a physical inventory standpoint, this is actually kind of a nice story for us. It's a slow story.

Michael <unk>: <unk>.

Michael <unk>: From a physical inventories. This is actually kind of a nice story for US is the flow story, but in the end. This quarter, we had flat levels of physical inventory from a cash perspective, and we're going to actually see that.

Jennifer Walter: But in this quarter, we had flat levels of physical inventories from a cash perspective, and we're going to actually see that be a slight benefit as we look into next quarter. We're going to work down some of those physical inventories. So it's really starting to turn after we've had some growth over the past couple of years in the physical inventory. So this quarter is nice that we got to that level of space, and we'll have a small benefit next quarter as we do it. As we look to what happens, if I look longer term, there are structural opportunities that we have that'll be beyond, you know, 24 and 25, because it takes time to make those structural changes.

Michael <unk>: Be a slight benefit as we look into next quarter, we're going to work down some of those physical.

Michael <unk>: Inventory.

Michael <unk>: It is really starting to turn after we've had some growth over the past couple of years and the physical inventory fell this quarter is nice that we got to that level space and we will have a small benefit next next quarter as we were doing it.

Jennifer Walter: As we look to what happens, if I look longer term, there's structural opportunities that we have that'll be beyond 24 and 25 because it takes time to make those structural changes. Those are involved things like convincing the flow as we build inventory in our processes. However, some of those things that we are working on and seeing the beginning of benefits associated with that are going to be our inventory management that we can impact and have a greater, more near term impact, like vendor inventory management systems, planning and procurement. And we're doing this while we're supporting a growing business.

Michael <unk>: As we look to what happens if I look longer term there structural opportunities that we have that will be beyond.

Michael <unk>: 24, and 25, because it takes time to make those structural changes.

Jennifer Walter: And those are involved things like condensing the flow as we build inventory in our processes. However, some of the things that we are working on and seeing the beginning of benefits associated with that are going to be our inventory management, which we can impact and have a greater, more near-term impact like vendor inventory management systems, planning, and procurement. And we're doing this while we're supporting a growing business. So we've got that natural pressure of a growing business.

Michael <unk>: Those are involve things like condensing the flow as we build inventory in our in our processes. However, some of the things that we are working on and seeing the beginning of benefits associated with that are going to be our inventory management that we can impact and have a greater more near term impact like venue.

Michael <unk>: Inventory management systems planning and procurement and we're doing this while we're supporting our growing business. So we've got that natural pressure of a growing business, but we are making a dent in some of these other things. So that we are working back down.

Jennifer Walter: So we've got that natural pressure of a growing business, but we are making a dent in some of these other things so that we are working that down. In the fourth quarter, the other thing that we're having is pressure on customer advances. So that's a timing thing. We're going to continue to work it down. We did have really nice customer advances in the back half of FY23, and even into the first quarter of this year, but we don't have any new advances that are coming in of significance in the fourth quarter. So we are having that pressure as we continue to work that down.

Jennifer Walter: But we are making a dent in some of these other things so that we are working back down. In the fourth quarter, the other thing that we're having is pressure on customer advances, so that's a timing thing.

Michael <unk>: In the fourth quarter. The other thing network, having is pressure on customer advances. So net the timing thing we're going to continue to work. It down we did have really nice customer advances in the back half of FY 'twenty, three and even into the first quarter of this year, but we don't have any new advances that are coming in.

Jennifer Walter: We're going to continue to work it down. We did have really nice customer advances in the back half of FY23 and even into the first quarter of this year, but we don't have any new advances that are coming in of significance in the fourth quarter. So we are having that pressure as we continue to work that down. So that's largely where we're going to get the free cash flow benefit in Q4.

Michael <unk>: <unk> of significance in the fourth quarter.

Michael <unk>: So we are having that pressure as we continue to work that down so that's largely where we're going to get the free cash flow benefit in Q4, and as you know it the timing thing last year's fourth quarter, we had a strong cash quarter after a softer quarter. So.

Jennifer Walter: So that's largely where we're going to get the free cash flow benefit in Q4. And as you know, the timing thing, last year's fourth quarter, we had a strong cash quarter after a softer quarter. So it's a lot of this is with timing. And as you can see, you know, customer advances is a big portion of that for the third quarter type of results. And that pressure does continue on, but we are making some nice progress in the physical inventory. And then we're positioned nicely on the receivables as well.

Jennifer Walter: And as you know, the timing thing, last year's fourth quarter, we had a strong cash quarter after a softer quarter. So a lot of this is timing. And as you can see, customer advances are a big portion of that for the third quarter results. And that pressure does continue on.

Michael <unk>: A lot of this was timing and as you can see customer advances is a big portion of that for the third quarter type of results and that pressure does continue on but we are making some nice progress in the physical inventory and then we're positioned nicely on the receivables as well.

Jennifer Walter: With respect to you, you're also asking about the, you know, what are we charging customers and how are we working? We work when we're looking at our customers. We're looking at, you know, comprehensive negotiations with our customers, you know, that involves pricing in terms, whether we're opening something up that isn't normally open, or we're renegotiating something like that. So we look at that as a balanced perspective; sometimes, depending on, in some, the customer side, but it's also on, you know, the vendor side as well. We need to make sure that we're coming up with what makes best sense for us as well as the person, the parties that we're negotiating with, so that we can come out with the best outcome.

Jennifer Walter: But we are making some nice progress in the physical inventories, and then we're positioned nicely on the receivables as well. With respect to, you're also asking about the, you know, what are we charging customers and how we work? When we look at our customers, we're looking at, you know, comprehensive negotiations with our customers that involve pricing and terms, whether we're opening something up that isn't normally open, or renewing, or renegotiating something like that.

Michael <unk>: With respect to.

Michael <unk>: You are also asking about the.

Michael <unk>: What are we charging customers and how are we working we work one way of looking at our customers were looking at comprehensive.

Michael <unk>: Negotiations with our customers that in both pricing and terms, whether we're opening something up that isn't normally open or renewed.

Michael <unk>: <unk> something like that so we look at that as a balanced perspective, sometimes depending on.

Jennifer Walter: So we look at that as a balanced perspective, sometimes depending on, and it's on the customer side, but it's also on, you know, the vendor side as well. We need to make sure that we're coming up with what makes best sense for us, as well as the person, the parties that we're negotiating with, so that we can come out with the best outcome. Sometimes there is a benefit of pricing at the cost of term, and sometimes it could be different.

Michael <unk>: And so on the customer side, but it's also on the vendor side as well we need to make sure that we're coming up with what makes best sense for us as well as the person the parties that we're negotiating with so that we can come out with the best outcome. Sometimes there is a benefit of pricing at the cost of a term and sometimes it can be different so it is looking at.

Kristine Liwag: Sometimes there is a benefit of pricing at the cost of a term. And sometimes it could be different. So it's looking at everything in a holistic type of way to get the best economic answer for us that works in that circumstance. So we are mindful of both our terms and pricing because it's obviously not just the sales, the margin; it's the cash aspect of it as well. Great. Thank you for the detailed answer, Jennifer. I really, really appreciate it.

Michael <unk>: Everything in a holistic type of way to get the best economic answer for us.

Jennifer Walter: So it's looking at everything in a holistic type of way to get the best economic answer for us that works in that circumstance. So we are mindful of both our terms and pricing, because it's obviously not just the sales and margin, it's the cash aspect of it as well.

Michael <unk>: <unk>.

Michael <unk>: That works in that circumstance. So we are mindful of both our terms and pricing because it's obviously not just the sales the margin if the cash aspect of it as well.

Kristine Liwag: Great, thank you for the detailed answer, Jennifer. I really, really appreciate it. And if I could follow up, I mean, your previous guidance for 2025 free cash flow was, you know, 75% to 100% conversion. With all the timing issues that are happening and these changes, I just wanted to check to see if this is still intact, or if any of these concerns in fiscal year 24 are kind of still over to 25.

Speaker Change: Great. Thank you for the detailed answer Jennifer I really really appreciate it and if I could follow up on your previous guidance for 2025 free cash flow was 75% to 100% conversion with all the timing issues that are happening in these changes I just wanted to check to see if this is still intact or if any of these concerns.

Jennifer Walter: And if I could follow up, I mean, your previous guidance for 2025 free cash flow was, you know, 75% to 100% conversion. With all the climbing issues that are happening and these changes, I just wanted to check to see if it's still in tax, or if any of these concerns in fiscal year 24 kind of still over to 25. Yeah, look, we'll comment more specifically in our November call, but we are still working towards our investor day commitments that we put out there, and that we're looking forward to being able to report and demonstrate our continued success in our financial metrics.

Jennifer: Fiscal year, 'twenty, four kind of spill over 225.

Jennifer Walter: Yeah, we'll comment more specifically on our November call, but we are still working towards our Investor Day commitments that we put out there, and we're looking forward to being able to report and demonstrate our continued success in our financial metrics. Well, great. Thank you.

Speaker Change: Yeah, we'll comment more specifically in our November call, but we are still working towards our investor day commitments that we put out there.

Speaker Change: And we're looking forward to being able to report and demonstrate our continued success.

Speaker Change: In our financial metrics.

Kristine Liwag: Well, great. Thank you very much. Thanks for seeing.

Operator: Well, great. Thank you very much. Another reminder to ask a question on

Speaker Change: Well great. Thank you very much.

Christine: Thanks Christine.

Operator: Another reminder to ask a question on today's call: that is star one on your telephone keypad.

Operator: Another reminder to ask a question on today's call; that is, star 1 on your telephone keypad. And at this time, there are no further questions.

Christine: Okay.

Speaker Change: And as a reminder to ask a question on today's call that is star one on your telephone keypad.

Operator: And at this time, there are no further questions. Okay, so I would like to thank everyone for joining the call. I appreciate your attendance and your questions. It's been another strong quarter for us on the path to a really good physical 24. I look forward to talking to you again in November as we report out on that. Thank you very much.

Speaker Change: And at this time there are no further questions.

Patrick Roche: Okay, so I would like to thank everyone for joining the call. I appreciate your attendance and your questions. It's been another strong quarter for us on the path to a really good fiscal 24. I look forward to talking to you again in November as we report on that. Thank you very much.

Michael <unk>: Okay. So I would like to thank everyone for joining the call I appreciate your attendance and your questions.

Speaker Change: It's been another strong quarter for us on the path to a really good fiscal 'twenty four I look forward to talking to you again in November as we report out on that thank you very much.

Operator: Just as concludes today's conference, we thank you for your participation.

Operator: This does conclude today's conference. We thank you for your participation.

Speaker Change: This does conclude today's conference we thank you for your participation.