Q4 2024 TAT Technologies Ltd Earnings Call
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Yeah.
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Speaker Change: Good day, ladies and gentlemen, thank you for standing by our welcome to the <unk> technologies fourth quarter 2024 earnings Conference call. Please.
Please note that today's conference call maybe recorded.
Speaker Change: I will be your host Matt Shuffler from the U S based investor team.
Speaker Change:
Speaker Change: Joining me today are E mirror, our president and CEO and a who've been here our CFO.
Speaker Change: Before getting started we would like to draw your attention to the fact that certain matters discussed on this call may contain forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, and other provisions of the federal Securities laws.
Speaker Change: These forward looking statements are based on management's current expectations and are not guarantees of future performance.
Speaker Change: Actual results could differ materially from those expressed in or implied by these forward looking statements.
Speaker Change: The forward looking statements are made as of the date of this call and except as required by law.
Speaker Change: Technologies assumes no obligation to update or revise them.
Speaker Change: Investors are cautioned not to place undue reliance on these forward looking statements.
Speaker Change: For a more detailed discussion of how these and other risks and uncertainties could cause P. T technologies actual results to differ materially from those indicated in these forward looking statements. Please see our annual report on form 20-F for the fiscal year ended December 31, 2024, and other filings we make with the SEC.
Speaker Change: The financial measures discussed today include non-GAAP measures, we believe these.
Speaker Change: We believe investors focus on non-GAAP financial measures and comparing results between periods and among our peer companies that publish similar non-GAAP measures. Please see today's press release and our earnings release in the investors section of our website at <unk> gas technologies Dot com for a reconciliation of non-GAAP financial measures.
Speaker Change: For GAAP measures.
Speaker Change: non-GAAP financial information should not be considered in isolation from or as a substitute for or superior to GAAP financial information, but is included because management believes it is meaningful information about the financial performance.
Speaker Change: All of our business and is useful to investors for informational and comparative purposes. The non-GAAP financial measures that the company uses have limitations and may differ from those used by other companies.
Speaker Change: With all that we would now like to turn the call over to legal.
Speaker Change: Thank you and good morning, everybody and thanks for join.
Speaker Change: Joining us for <unk>.
Speaker Change: Fourth quarter and annual results call.
2024, with another solid year.
Speaker Change: Our fast growth, increasing profitability and strong execution of our strategic business. Then we are very proud and the result, we delivered the 34% increase in revenue.
Speaker Change: More than $115 million.
Speaker Change: And revenue in Gordon at these come by.
Speaker Change: 159% comparing to.
Speaker Change: 1020, Threep default bortel ones that are just as strong with revenue increasing by 29 central $41 million compared to.
Speaker Change: Q4.
2023.
Speaker Change: In terms of profitability and margin. We also increased this year earlier, we'd go off margin increasing for may of $19. Seven in 2023 to 21.78 D. C area and as you saw a more than 23% in Q4 and adjusted EBITDA margin in casing format of nine 7% in 'twenty two.
Speaker Change: 23 to <unk> 12 point tool in 2024.
A major faults have been made and are still ongoing.
Speaker Change: To continue and improve profitability in 2025.
Speaker Change: And we expect the brand to a way to continue a lot of emphasis on unemployment.
Speaker Change: Profitability and not just going to topline.
Speaker Change: This year, we launched our new capabilities, especially our APR was 131 to 500, those new capabilities open up two new substantial markets. A lot has been done during 2020 fall to build ourselves towards the blue Ocean market and it was reflected in our results revenue in Korea.
Speaker Change: And the other things.
Speaker Change: Our weighted came with a lot of investment in inventory and we are well positioned going into 'twenty five to continue and enjoying this very large market.
Speaker Change: Another thing is there during the year 2020 fault, we focused on expanding our trading and leasing capability, which allow us to enjoy a built in advantage by using our in house them, a whole capability to purchase systems and components in the market overall them and training or lease them to our customers, especially in periods, where the industry is.
Speaker Change: And you're right.
Speaker Change: Supply chain challenges and deliberately challenges they are having their materials and components available on the shelves.
Speaker Change: And opportunities.
Speaker Change: It also helps us a centralized our supply chain and we aim to continue growing this activity, adding a strengthening need.
Speaker Change: During 2025, and we are enjoying very high profitability on it.
Speaker Change: Our backlog an LTA value at the end of 2020 full increased to $429 million comparing to the $406 million at the end of 2023.
Speaker Change: And we are very pleased with it.
Speaker Change: Despite the on top of the growth that we were able to show in our revenue in 'twenty fall, we booked more.
Speaker Change: And while new audiences and we want Youll business. So.
Speaker Change: So.
Speaker Change: We already and it's a good reflection of the potential growth in 2025 and 26.
Speaker Change: Supply chain continues to be a challenge in the industry, especially with parts and materials availability and longer than normal lead times.
Speaker Change: In order to overcome the challenges and be ready for the expected growth in 2025.
Speaker Change: But also in order to provide great service to our customers than native outfits ready for trading we implemented a strategic sourcing plan.
Speaker Change: Reflecting our inventory you can see in the inventory and the balance of the inventory at the end of the of the growth most of it if not all of it is the strategic decisions that we made to get Randy with Bob materials, and four components like engines or lending details available on the shelf.
Speaker Change: So we can support at the 2025.
Speaker Change: Business Center, a continuous growth.
Speaker Change: As an outcome of the strategic.
Speaker Change: And the implementing of dentists supply chain strategy, we basically use the profits that we generated throughout the year.
Speaker Change: And reinvested it.
Speaker Change: To do two things first of all to support the working capital, but also to support the inventory buildup.
Speaker Change: And it reflects a negative operational cash flow for deal, but something that we did.
Speaker Change: As a strategic decision in order to be ready for this year.
Speaker Change: So at the end of the day Bottomline real dominating a meaningful unions with growth rate is much higher than the industry.
Speaker Change: Profitable and expanding our margin.
Speaker Change: While there are certainly challenges ahead of us mainly gaining new contracts.
Speaker Change: As the new player in the 131, and 500 Ipos and overcoming the supply chain. We are looking forward to another strong year in 2025 with focus on improving performance to our customers increasing profitability margin and growing the topline.
Speaker Change: With that I will.
Speaker Change: But speaking to the oil had been our CFO to review the financial report.
Speaker Change: Thank you good morning, everybody and thank you for joining us today.
Speaker Change: We got started.
Speaker Change: We completed a very successful year.
Speaker Change: Elaborate a little bit about the numbers and the profitability elements. Both for Q4 24 compared to Q4 with the three and also for the full year 'twenty granted for the rest of it.
Speaker Change: Page 24.
Speaker Change: So revenue in Q4 went up to 41 million compared to 38 eight liter engine.
Speaker Change: Theresa.
Theresa: The 9% quarter to quarter.
Theresa: Gross margin in Q4, 2012 linked up to 23, 2% compared to 21 nine in Q4, <unk> III and the adjusted EBITDA went up by almost 60% from $3 four in Q4 of $23 million to $5 4 million in Q4.
Theresa: 424.
Theresa: Ernie.
Theresa: Sure.
Theresa: Diluted basis went up to 32 cents per share.
Theresa: 658% increase compared to Q4 'twenty three.
Looking at the <unk>.
Theresa: Results. So the year the full year of 2020 full ended we did 152 $1 million of revenue.
Theresa: Compared to $113 eight in 2023, which is an increase of 34%.
Theresa: The gross margin went up from 19 seven in 2023 to 21.7.
Theresa: 7% of revenue, which is presented at $40 million of gross margin. The operating profit went up as well.
Theresa: W. Several even WCS.
Theresa: From $6 $1 million to $12 $5 million and the adjusted EBITDA went up from 11, one in 2023 to $18 6 million in 2020 fully presenting a 67% increase going to be adjusted EBITDA.
Theresa: Net profit also more than doubled 100% increases.
Theresa: When the IMO 2023, there were $4 7 million compared to 11 two.
Theresa: And in the Eagle Ford the folio of 'twenty 'twenty for.
Theresa: Shale on a fully diluted basis was at Golar.
Theresa: Shares representing 95% increase comparable deal fee.
Theresa: 1023.
Theresa: One of the things that we're very proud of them and we're elaborating down quarter. After quarter is is that the fact that the company is growing its revenue quarter after quarter, but well.
Theresa: More broadly the fact that we are improving our gross margin operating margin and obviously net profit and adjusted EBITDA. So all profitability element went up quarter after quarter. So gross margin went up from 21, 9% in Q4 2023 and gradually went.
Theresa: Up up to 23 point due in Q4.
Theresa: 20 fall and the same with all other.
Theresa: Operating margin net proceeds.
Theresa: Adjusted EBITDA.
Theresa: Again I must emphasize.
Theresa: Emphasize even though we're presenting quarter after quarter I believe that in order to better analyze the company you need to look at more.
Theresa: More full quarter results.
Theresa: Rather than trying to analyze and understand exactly what happens every quarter.
Theresa: Any small deal of two 3 million dollar can make a change in the in the quarter, both revenue and profitability.
Theresa:
Theresa: And other analysis that we are showing average quarterly revenue per product line.
Theresa: So you can see that we're really emphasizing the bulk sale of four major product lines to Charles' leadership change of Apu, the trading and listing in <unk>.
Theresa: Lending yield.
Theresa: So heat exchanges, both OEM and MRO oil went up from $33 million in Q4, 2023 up to $16 6 million.
Theresa: In Q4 2000 before Apu segment went up from $9 2 million in Q4 of $23 million to $30 million is an increase of 42%.
Theresa: And the revenue of this segment trading.
Theresa: Trading and lithium listing also went up to $2 million in Q4 of 'twenty three up two to $3 3 million in Q4 of 24 with an uptick of $5 seven that we reported in Q3 of 2024 and the landing gear as a result.
Theresa: Already at the level of $2.8 million with expecting revenue to grow.
Theresa: Radically in 2025.
Theresa: Looking at the yield by <unk>.
Theresa: Number of their of their major linear product line you can see the heat exchange activity went up from $33 1 million.
Theresa: 2022 to.
Theresa: <unk> is.
Theresa: Great point 2 million dollar deal of 2020 full AP deal with the dramatic increase $18 $7 million in 2022 up to $43 3 million.
Theresa: In 'twenty four and obviously as Emil said, we just started scratching the surface of the new Apu engine capabilities.
Theresa: Capabilities that we have and we are expecting to see another ramp up in the mid 2025.
Theresa: And the trading and leasing with $46 2 million build up to $13 nine lending it is pretty stable.
Theresa: And as we explained the cycle in this in the lending activities as well.
Theresa:
Theresa: Presenting.
Theresa: The cycle the another cycle of four to five years started in Q4 of 2020 full and expected to ramp up in Europe 25 from 26 to a much higher numbers.
Theresa:
Theresa: So again, we're very proud we've been facing all the not only the revenue, but also the profitability elements, though revenue is going to up the gross profit margin a growing growing up and you can see the table extending steady growth quarter after quarter that trend with the operating model.
Theresa: The net.
Theresa: And the net income.
Theresa: Things that and I'm, asking our investors to be available.
Theresa: The net income of the company is one is the.
Theresa: Is the interest expenses that were paying we are currently sitting on almost $20 million level loans. Some of them long term than short term with interest rate of anywhere between seven 8% weight.
Theresa: Of interest this is resulting in the almost $2 million interest expenses in the <unk> of 2024.
Theresa: I expect it to continue this way for the 2025 and the second element is the tax expenses.
Theresa:
Theresa: Which are going to go up.
Theresa: In 2025, the company is not going to pay taxes in 2025, but what I'm going to let go of the tax expense Ed.
Theresa: Which are mainly due to changes in there.
Theresa: And the tax asset and liability on our balance sheet and we're expecting to start paying taxes by the end of 'twenty five.
Theresa: 2026.
Theresa: In terms of the business breakdown.
Theresa: So again the company is really focusing activity on the commercial aviation side of the business and less in the military.
Theresa: The military and revenues in 2020 full away and were 18% of the total revenue and <unk>.
Theresa: 82%.
Theresa: In terms of.
Theresa: The two major.
Theresa: Side of business, which I'll OEM and MRO, So OEM, where 27% in Q4, and <unk>, 73%, but looking at the full year, OEM, where 32% and <unk> 68, which is very very steady.
Theresa: Once the deal looks like in 'twenty, three and 2020 two.
Theresa: In terms of the build ethical distribution of the revenue North America America, obviously continue to be very strong 70% of our revenues are coming from U S customers.
Theresa: 11% out of fuel.
Theresa: The rest of the whole nonetheless.
Theresa: And the last slide is about the.
Theresa: It is about the backlog. So you can see on the left side.
Theresa: <unk> steadily.
Theresa: Steadily growing up from $400 million in 2000 $20 million to $429 million at the end of 2024, 51% of fleet.
Theresa: The heat the change of the long term agreement.
Theresa: <unk> agreements, which are usually for anywhere between two to five 3% to 528% of the.
Of the backlog and 14% of the backlog.
Theresa: Again lending via the contract.
Theresa: As we as we said before and in the past.
Theresa: Well I want to pause.
Theresa: In a minute.
Theresa: Being on large b, the new Aps segment.
Theresa: <unk> 2025.
Theresa: <unk> and.
Theresa: Once it was about winning the contract you will see another jump in.
Theresa: The step jump in the backlog number.
Theresa: And by this.
Speaker Change: Turning the call to <unk>.
Speaker Change: Well, thank you I owe them. So just to summarize and 24 was another strong year.
Speaker Change: And let me.
Speaker Change: We look at that well.
Speaker Change: <unk>.
Speaker Change: 'twenty going into 'twenty five 'twenty six.
Speaker Change: <unk> enjoyed.
Speaker Change: The same strong demand that we've been seeing in the last two years.
Speaker Change: Industry is still recovering.
Speaker Change: I'm not sure that in some cases, we don't.
Speaker Change: See the light at the end of the tunnel in terms of when when the industry is going to catch up with the demand.
Speaker Change: They are increasing demands we have a large new increasing our <unk> orders, we already have a good visibility to DCF and starting to see increasing.
Speaker Change: Book of orders also already for 2006.
Speaker Change: The two new engines in there.
Speaker Change: Mentioned bidding on new contracts.
Julien: Hey, Julien.
Speaker Change: Engine for the company.
Speaker Change: The trading and leasing activities in which we plan to continue and expand.
Speaker Change: And our strategic data that we have signed and the opportunities that we have for growth in the lending deal. So basically it's the length. The same landscape of growth engines that we added.
Scott: Scott in your previous quarters then.
Scott: We are very optimistic about it and the opportunities for growth moving forward.
Scott: Oh.
Scott: Yes.
Scott: Okay.
Scott: Okay. Thank you.
Speaker Change: Yes, we're not going to open up to the Q&A session.
Speaker Change: First with some instructions as a reminder, there are two ways to ask a question from the zoom webcast. The first is to use the raise your hand icon, which is at the bottom of your screen.
Speaker Change: Clicking on this will alert me that youll want to be called on to ask a live question and you'll be placed in a key one call on just now, but youre going to be on mute until you're called on.
Speaker Change: The second way to participate in Q&A is to use the Q&A widget, which will allow you to type in and tax the question.
Speaker Change: Well take questions from there as well, but just note if we run into a time constraint.
Speaker Change: Someone from the IR team will get back to you for your question did not ask on today's call with that we'd now like to begin and pause for a moment to build the queue.
Speaker Change: Okay.
Speaker Change: I will now take the first question first question is going to be from Josh Sullivan at Benchmark Company. Josh go ahead.
Speaker Change: Josh.
Speaker Change: Here to take your lineup in mute.
Speaker Change: If you've not already done so.
Speaker Change: Okay.
Speaker Change: Gosh, I believe you're still on mute.
Speaker Change: Yes.
Speaker Change: How about now.
Speaker Change: Good.
Speaker Change: Good morning, Thank you.
Speaker Change: Yes.
Speaker Change: Congratulations on the result.
Speaker Change: As far as the investment in inventory just given the ongoing unstable nature of the supply chain can you just highlight what youre seeing from suppliers at this point maybe versus the previous quarter.
Speaker Change: So I think that we didn't see any.
Speaker Change: Big change in the supply chain behavior over the last two quarters.
Speaker Change: And without going into too many details in some product lines and I mentioned it.
Speaker Change: In previous calls there.
Speaker Change: We are fully recover them to supply Chinese recover then over there that you know internally and we don't go into the details we take a very strategic approach. So in any way with the supply chain already stabilized and especially more on the material side of all materials side, it's way more stable than what it was during the coffee deal.
Speaker Change: Over there we didn't increase we are keeping it.
Speaker Change: On the opposite despite the fact that we are increasing revenue, while not increasing our purchasing and inventory in some cases, even went down we are just increasing the inventory turns.
Speaker Change:
Speaker Change: I think that the key call into key challenges, Israel and the pilots delivery when we need to buy pilots format. The Oems in order to perform the work whether it's a <unk> Gail.
Speaker Change: Over there we go.
Speaker Change: Major challenges.
Speaker Change: With very long lead times and unpredictable deliveries.
Speaker Change: And over there we made a strategic decision to.
Speaker Change: To invest a lot in order to be ready for the growth.
Speaker Change: So we know material if I have to split between materials and parts and components materiality is pretty stable still the lead times are still not back to where they used to be before COVID-19, but getting there.
Speaker Change: And although that we are not increasing on the opposite decreasing.
Speaker Change: On the power of the OEM parts.
Speaker Change: To support.
Speaker Change: To support engines or lending Gail.
Speaker Change: Still pretty much a challenge with very long lead time in that.
Speaker Change: Let.
Speaker Change: The lack of consistency if you will in the portfolio in the in the deliveries.
Speaker Change: Got it.
Speaker Change: And then just looking at the launch in a new if you cant build the capabilities here in 'twenty five.
Speaker Change: The demand side of that equation look like or how should we think about how you guys are going after some of those programs. I mean are you looking at the larger ones do you think we'll see smaller ones and more incrementally just trying to understand how we might visually see the apu opportunity evolve over 25.
Speaker Change: So I will say I said the following.
Speaker Change: Split the answer into two sections first of all.
Speaker Change: There is.
Plenty of challenges and that airlines are experiencing around the world with the availability of.
Speaker Change: Of these engines.
Speaker Change: With the supply chain challenges and with the ramp up.
Speaker Change: That is required by the industry and many competitors still many of our competitors are struggling to ramp up at the rates that are required. So there is a lot of demand I would say, we see a lot of interesting.
Speaker Change: It is already being an active rfps or planning to open rfps and all planning to figure out solutions to overcome the challenges that the airlines there.
Speaker Change:
Speaker Change: Despite of the fact that dialogue into existing contracts.
Speaker Change: So there is a lot of demand and.
Speaker Change: Plenty of activity around.
Speaker Change: There, we see a very large funnel of opportunities.
Speaker Change: We have a new commenting today into these engines and we are going to win on our space, but I think that.
Speaker Change: Going after very large rfps at this point we lead.
Speaker Change: We are trying but I don't know that I can say, yes, we're going to win major major.
Speaker Change: Very large rfps.
Speaker Change: Being in Yokohama and into into this game.
Speaker Change: We are all going to more focus on small to medium size rfps.
Speaker Change: From airlines that actually it's not adjusted in the future. We are already doing it in a way I don't know an active process on several of them.
Speaker Change: So if you think about it.
Speaker Change: Small airlines to medium size airlines are more in the sweet spot for us.
Speaker Change: For this year I would say.
Speaker Change: Got it.
Speaker Change: And then the comments on the landing gear cycle.
Speaker Change: How should we think about that and when do you think we really see that starting to engage so you saw the beginning in Q4 and we expect it to continue this year.
Speaker Change: In the fall.
Speaker Change: At the peak the peak is expected in 2006 to 28.
Speaker Change: But we are expecting a substantial leg Olaf.
Speaker Change: This year in and it will get to a maximum demand next year, then again 26 to 28.
Speaker Change: And then just kind of more of a general question. Obviously, you guys have great penetrating story here, but what's your sense of the overall MRO market.
Speaker Change: Just given some of the macro comments out there.
Speaker Change: So I think that since the industry is still in recovery and.
Speaker Change: And with all the supply chain challenges, we see a very strong demand I think that it would take time.
Speaker Change: Before.
Speaker Change: I'm always catch up and if you look at what the larger the larger companies in the industry as a publishing theyre talking about the about catching up at the end of this year or sometime in <unk>. So while may be.
Speaker Change: There is a little bit of concern on the.
Speaker Change: Airline side that we are hearing and maybe a little bit of softening on the flight side, but there is so much catch up to do.
Speaker Change: And that.
Speaker Change: For the foreseeing future, we don't see any decrease in any decrease in the amount of the opposite.
Speaker Change: Alright, Thank you for the time.
Speaker Change: Thank you.
Speaker Change: We're going to move to the next question. The next question is from Sergey <unk>.
Speaker Change: The line is the line is open.
Sergey: Hello, everyone and then thus far on say <unk>.
Speaker Change: Gross relation pose another successful quarter.
Speaker Change: So I can couple of questions and first full.
Speaker Change: Hmm.
Speaker Change: What's the book to Bill ratio is now and what the time period.
Speaker Change: Does it take to convert so backlog to revenue.
Speaker Change: So the book to Bill ratios over one obviously, because you'll see that not only that we increased revenue we increased our backlog more than you have to remember that when we operate as time goes by as we are eating from their backlog and their value over the long term agreement, but we are replacing it with more.
Speaker Change: New orders of new contracts are in a larger amount then.
Speaker Change: Then what we were able to Ah.
Speaker Change: To translate into revenues, which is a great indicator for the future growth that we're expecting to see.
Speaker Change: On the on the OEM side.
Speaker Change: Yes.
Speaker Change: Regarding the second question on the OEM side. These are very long term and we are under long term contracts.
Speaker Change: And what you see or what we recognized in the <unk> at either the value of the contract for the coming few years old when they OEM introduction of giving US. The appeal was the actual <unk> for the coming 12 to 18 months, we replace the <unk>.
Speaker Change: The contract value into the actual deal so on the OEM side. The next 12 to 18 months is already covered with actual B O, which is part of the numbers and then for the for the coming few years, it's based on the on the aircraft manufacturers.
Speaker Change: Production plan.
Speaker Change: On them and that's give or take 30% of the business, 32% of the business last year on.
Speaker Change: On the MRO side typically contracts are between three.
Speaker Change: Three to five years.
Speaker Change: And.
Speaker Change: So we take the airline a historical data of how much my replacement and how much overall spend they have period of.
Speaker Change: Times, the contractor remaining contract time, and Thats, what we book and and we need to remember that.
Speaker Change: Give or take 40% it depends it changing but about 40% of the of the revenue come from non contractual customers.
Speaker Change: And so that's the last portion because when we actually get the appeal from a non contractual customer all we'd get an actual asset footwear repair on the aftermarket side ammo side, then obviously, we add the value of the expected value into.
Speaker Change: <unk>.
Speaker Change: In today.
Speaker Change: Alkylation, so let's call. It 40% is very short term, we got something we have to produce it in the coming few months. The other 60% based on contract. It's typically three to five years.
Speaker Change: Contracts on the MMO and way longer contracts on the on the OEM with actual <unk> for the coming 12 to 18 months.
Speaker Change: Okay got it thanks, and the next slide.
Speaker Change: Apu projections pretty clear, but it is about the thermal solutions.
Speaker Change: <unk> gross rate do you expect next two to three yes.
Speaker Change: On the on the Tomo solutions first of all we expect to continue growing we have a huge advantage of the tomo solution I believe that we.
Speaker Change: We've been a very long term power now of the large OEM, we have tier one two buoying, we all tier one to textron most of their fleet, we have tier one two and we also put geothermal component to the system on your Fitzgerald.
Speaker Change: They're very long contract and as long as the if the OEM continued to recover.
Speaker Change: Daily production.
Speaker Change: We expect to see more and more people as we already see an increase for this year.
Speaker Change: From the Oems that's all that's on that side on the aftermarket side the MRO side is.
Speaker Change: One of the leading companies in the industry globally.
Speaker Change: If not the largest.
Speaker Change: We had great performance, we made huge.
Speaker Change: Huge improvements over the last two or three has made huge investments in the in the capacity and production line dramatically increasing our well.
Speaker Change: Our capabilities in our in our facility in Tulsa, Oklahoma.
Speaker Change: And as time goes by we win more business.
Speaker Change: Very competitive.
Speaker Change: And we are very happy with our growth expecting to continue.
Speaker Change: Yes, it sounds great.
Speaker Change: And.
Speaker Change: I think the statement on the last call was about.
Speaker Change: And the margin above 15% are you still on the track of exceeding 15% EBITDA margin in 2025.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: We are not providing forecast, but there you can see that are very consistent.
Speaker Change: And thank you for reminding me I definitely internally as I said last time.
Speaker Change: I believe that the company and our type of business semi if I'm looking at our competitors and best in class needs to be.
What I consider to be best in class means there'll be above 25%.
Speaker Change: On gross margin and above 15% EBITDA and you can see the solid trends in this direction.
Speaker Change: Continuing we are investing actually when you look at Intel if you were here with us internally or looking at our focus for this year.
Speaker Change: We place.
Speaker Change: Our profitability improvement and continuing the improvement in efficiency.
Speaker Change: Reducing cost at the higher priority than just.
Speaker Change: Existing the topline, we really want to make a lot of effort to get to the point that we have a strong engine that generates good results, though at very high margins. So so we know that when we increase the revenue while we were going to enjoy it.
Speaker Change: So definitely in the right direction, and then hoping to get there as fast as possible.
Speaker Change: Yeah, It sounds great.
Speaker Change: The next one.
Speaker Change:
Speaker Change: What does your long term revenue structure outlook, breaking it down into its detrimental Apu landing gear et cetera.
Speaker Change: It's really interesting because you did say bu share is increasing and now.
Speaker Change: You mentioned that lending gear or anything new.
Speaker Change: They will slow down after <unk> 85, as far as I understood. Yeah. So just put a little bit color about about that thank you.
Speaker Change: Well I think thats for the <unk>.
Speaker Change: For the coming <unk> would say, we're expecting to see a growth in all of.
Speaker Change: The segment.
Speaker Change: Heat exchangers Apu lending so they're trading in the leasing.
Speaker Change: We believe that the <unk> will be a strong growth engine than than the other given the new contract and the size of the market, but as I said before we're expecting growth in all of the segments in the coming years.
Speaker Change: Okay. Thank you and the last one is a little.
Speaker Change: A little bit about Lindsay and in June yes.
Speaker Change: E Jets 175 is quite popular and that's great.
Speaker Change: Or is it to provide lending Jim and Merrell. Moreover, we saw a big deal from Jason by American Airlines of nuance that may bring a lot of work ahead for <unk>.
Speaker Change: But anyway do you plan to get new authorization or another business or regional jets.
Speaker Change: Got it.
Speaker Change: I'm not sure that getting are we expecting to get any other authorization on top of the agents.
Speaker Change: It's not.
Speaker Change: It's not something that currently is on the on our roadmap for this year.
Speaker Change: So right now and the other for this year, it's we really focused on increasing that.
Speaker Change: And the capacity to meet the demand on the existing platforms.
Speaker Change: Okay got it and that's all for me Thanks, a lot and Vishal the best you can.
Speaker Change: Thank you very much.
Speaker Change: Thank you Sergey and then now were going to move to I'll take a question that was typed in this one is from Jonathan segment.
Speaker Change: First congratulating us on the continued positive results during these challenging supply conditions.
Speaker Change: He's asking for us to comment on pricing trends that our customers are paying for our services.
Speaker Change: Is it increasing changing year over year.
Speaker Change: So is it.
Speaker Change: As a general thing too.
Speaker Change: Two types of customers, we have the contractual customer them over their pricing.
Speaker Change: Escalations, a predetermined with formal typically tied to indexes.
Speaker Change: <unk> enable indexes so.
Speaker Change: So per the index as the prices are changing on an annual basis and obviously there are adjusted also we're going into 25. According to the relevant index says and then we have the noncompliant.
Speaker Change: Custom elsewhere, it's a little bit more tricky I know there are market considerations and the competitive considerations.
Speaker Change: And.
Speaker Change: Obviously, we want to make sure that the prices are going to enable us to.
Speaker Change: To maintain the profitability on the other hand, we.
Speaker Change: I also want to make sure that we are not going to be.
Speaker Change: Disadvantage being more expensive than competition so.
Speaker Change: Obviously, it's a more bear case.
Speaker Change: Perl case discussion, but I think that we are.
Speaker Change: We are positioned well for the pricing.
Speaker Change: From 2025 pricing to continue to enjoy the margin there.
Speaker Change: That we are.
Speaker Change: As we saw last year.
Speaker Change: Yeah.
Speaker Change: There are no more questions in the queue with that I'd like to turn the call back over to the golf for closing remarks.
Speaker Change: Okay.
Speaker Change: <unk>.
Speaker Change: So.
Speaker Change: Second so.
Speaker Change: And just as a summary of everything we are very positive results and we are well positioned to continue on and to go with the company in 2025, the demand is strong.
Speaker Change: And we see a lot of interest.
Speaker Change: In.
Speaker Change: Coming our way from new customer agreements that we have signed the area with the large Oems will continue to drive.
Speaker Change: Growth in.
Speaker Change: <unk> and.
Speaker Change: All in all I Didnt mentioned, the listing and trading that is growing especially in times, where the industry is struggling so all in all we are very optimistic about the potential to continuing to grow their business.
Speaker Change: Now I'd like to say that while as I've said before we.
Speaker Change: In the type of business that we are and in the last up until now in the last two years, we've been every quarter focusing on the quarter and it was really quarter to quarter discussion, but I think that we need to start looking at the business more on an annual ear to ear growth.
Speaker Change: Youll see it format 23 to 24.
Speaker Change: There may be changes and fluctuations from quarter to quarter and we all know unpredictability on the MRO side of the business. We don't have a good control on what will come in when will come even the airlines don't know.
Speaker Change: Most of the maintenance that we do is.
Speaker Change: Is not pre determined with exception of the lending deal, which is known and advancing the planned to have months and months in advance and all the other product lines.
Speaker Change: The maintenance is better conditions, so as long as the unit is working well on when they're not dismantle enhancing and extending it to overall so the fluctuation there also.
Speaker Change: Budgetary decisions that the airlines are making some sometimes they want to.
Speaker Change: To be more profitable and cost cut cost on a certain quota so they don't sand.
Speaker Change: There are components for maintenance the following quarter or they are they can bombard you with the with all the units that are accumulating for many months. So you know.
Speaker Change: We can see variation between the quarters, but.
Speaker Change: When we look at our full year expectation for 25, comparing to 24, we are well positioned for another very strong year.
Speaker Change: I'd like to use this opportunity and thank the participation in this call for taking the time to join US today and for their trust and partnership with our company and looking forward to talk to you in the future and see you in conferences and answer any questions that you had.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Everybody.
Speaker Change: Back to you.
Speaker Change: Yes.
Speaker Change: That is the conclusion of the call. Thank you all for joining US you may now disconnect your lines.
Speaker Change: Goodbye.