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spk_0: good morning ladies and gentlemen and welcome to the key one twenty twenty two rbc bearings earnings conference call at this time operative spencer analysts and only mood later we will conduct a question and answer session and instructions will follow at that time if was you require assistance during the conference please press star then zero on your touchstone telephone as reminder this conference call is being recorded a now that term a conference over to your host mr will stack with investor relations
spk_1: good morning and thank you for joining of for rb be banned that because twenty point two earth quarter earnings conference call with me on the call today or doctor michael j hartnett german president and chief executive officer daniel a barrage ron director vice president and chief operating officer and robert golden by president and chief financial officer before beginning today paul let me remind you that from the statements made today will be forward looking and are made under the private securities litigation reform act of making ninety five actual result may differ materially from those projected or implied dude over a variety of factors we refer you pardon he reef recent filing but that the fee for a more detailed the doesn't have the risk that could impact the company future operating results and financial condition if that they're they're all the described in greater detail on the press release and on the company's website and addition reconciliation between gap and non gap financial information and it is included as part the relief and is available on the company's website now i'll turn the call of or to doctor hartinah
spk_2: thank you will and good morning and welcome to watch it seems like i'm were having these calls weekly now
spk_3: a sister a pleasure to speak to everyone every week net sales for the first quarter of fiscal twenty two one hundred and fifty six point two million versus one hundred and fifty six point five million for the same period last year a decrease of point two percent we had some delays in shipments serve in one of our visions as a result of source inspection which sure is beyond our control so on
spk_4: that's where we are
spk_3: for fiscal quarter for the first fiscal quarter of twenty two sales of industrial products represented forty eight percent of net sales with aerospace products at fifty two percent
spk_2: gross margin for the quarter was sixty three point eight million or forty point eight percent of net sales this compared to fifty nine point five million or thirty eight percent for the same period last year it's just it operating income was thirty one point three million twenty percent of the net sales can be compared to last year's nineteen point one percent
spk_3: adjusted ebitda i was forty five point three million twenty nine percent of net sales compared to forty three point eight million and twenty eight percent net sales for the same period last year
spk_2: we ended a quarter with two hundred ninety six million in cash and securities and ten point eight million of them
spk_3: quarter was one where the industrial markets continue to show increasing strength or industrial oh and businesses nine marine demonstrated a quarter to quarter bouts of forty two percent over last year
spk_2: the man was strong and virtually all components of the market except oil and gas but the letters appears to be making a comeback now in the july quarter
spk_3: four months in the industrial aftermarket was almost as as impressive with a thirty two point six percent expansion of or last year we should demand ranging from excellent to extraordinary in most markets serve we're looking forward to a strong second quarter from the industrial businesses and expected continuing but some moderation and demand for the balance of the year are strong industrial markets where construction mining industrial distribution semiconductor machinery the seem to wins and train
spk_2: turning to aerospace and defense the sector was off eighteen point three percent for the quarter it's quite chilly were normalized for production days was about flat with the preceding period
spk_3: aircraft go he was down almost twenty two point five percent this can be almost entirely attributed to the slow ramp of the seven thirty seven next programs through twenty one and into calendar year twenty two a problem that should resolve itself in the quarters ahead as bowling stepped through their monthly production rates from today's seventeen per month to january of twenty twenty three of forty two per month we're now seeing increases in orders typical later in the air across all of our plants that service and supply both boeing and airbus
spk_2: today we are combing through over two hundred thousand to a twenty thousand two thousand line items scuse me
spk_3: bearings and assemblies we supply to the industry to ensure we have materials logistics and staff and place just seamlessly support the next two years of build rate increases regarding our second quarter we're expecting sale to be between hundred and fifty eight hundred and sixty two million dollars and and are now turn the call over to dan and rob for more detail on a financial performance
spk_5: the think you'd like to like is already covered that sales and gross margin i'll jump down as she and i eschew in a for the first quarter of fiscal twenty twenty two was twenty nine point eight million compared to twenty six point eight million for the same period last year
spk_2: the increase is mainly due to higher personnel costs of two point four million in point six miles and zero point six million of other items as percentage of net sales as today was nineteen point one percent for the first quarter of fiscal twenty twenty two compared to seventeen point one percent for the same period last year other operating expense for the first quarter of fiscal twenty twenty two was three point two million compared to expensive three point eight million for the same period last year
spk_5: for the first quarter of fiscal twenty twenty two other operating expenses were comprised mainly of two point six million of the amortization of intangible assets and zero point six million of restructuring costs and other items other operating expense for the same period last year consisted mainly of two point five million in amortization intangible assets
spk_2: one point one million of restructuring costs in zero point two million of other items operating income was thirty point seven million for the first quarter of fiscal twenty twenty two compared operating income of twenty eight point eight million for the same period and fiscal twenty twenty one and an adjusted basis operating income would have been thirty one point three million for the first quarter of fiscal twenty twenty two compared to adjusted operating in california nine point nine million for the first quarter of twenty twenty two
spk_5: doyle sorry twenty twenty one
spk_2: for the first quarter twenty twenty two the company reported net income of twenty six point zero million compared the net income of twenty two point seven million for the same period last year on an adjusted basis net income would have been twenty six point three million for the first quarter of fiscal twenty twenty two the that just a net income of twenty three point six million from same period last year
spk_5: deluded earnings per share with a dollar three cents per share for the first quarter fiscal ponytail compared to ninety one cents per share for the same period last year and adjusted basis diluted earnings per share for the first quarter of fiscal twenty two with a dollar for compared to ninety five cents per share for the same period last year
spk_3: turn the cash flow in one of our strongest quarters to date the company generated fifty three point three million in cash from operating activities in the first quarter of fiscal twenty twenty two compared to forty eight point four million for the same period last year
spk_5: capital expenditures were three point four million in the first quarter of fiscal twenty twenty two compared to three point nine million for the same period last year total that as of july third twenty twenty one was ten point eight million in cash a marketable securities on hand was two hundred ninety six point one million i would now like the turn the call back to the operator for the question profession
spk_0: apple's time to have a question please pass star that and about one and or telethon key part of passage just a man a particular day roster and your first question comes from pete skidelsky with a limit global
spk_6: a more guys long time no talk and a half i'm in a corner want to start out on mike i think he talked about delays in shipments from i i think one unit because of source inspections he could you guys maybe quantify how much revenue was impacted by that event in that me wait with it you know aerospace sales or industrial fails
spk_3: yeah it was a industrial sales and is about two million dollars
spk_7: i've got a cat
spk_8: got it on and then
spk_6: on the aerospace i thought aerospace's a thing because it wasn't you know you had had four corners of down aerospace sales so that should have an easier com corner at i thought maybe mikey mentioned something about a are fewer days in the corners of the that did i hear that right or my completely wrong on that
spk_3: yeah well there's there's there's more there's more days and in our fourth quarter than there are some isn't our first quarter so when you normalize bit the to it's it's about even
spk_6: of guy would have in the first quarter with the same number of days in the first quarter of fiscal twenty one or now
spk_9: at night it's about the same yeah
spk_6: okay got i've got two adults are you seeing kind of some recovery in some of the in in demand for so many other platforms is just as just mainly the max that was the the had when this corner
spk_3: yeah it's it's it's mainly the max i mean they at the other the other platforms are you know our i'm almost incidental and it to what's going on here that the maps in the max is really i kind of a big deal because
spk_10: you know when we look at
spk_11: we look at i have the quote
spk_3: industry analysts numbers because some i'm kind of an insider on them aircraft stuff and i can quote the exact nights but on the am when i look when i look at what the industry expects going to build this year it's somewhere between one hundred and fifteen hundred and sixty max's right through the calendar year
spk_12: and
spk_11: and i think that numbers to that number
spk_2: and and next year it's three hundred to three hundred and forty sort of that that's the range
spk_3: yup
spk_13: and the year after it's five hundred
spk_14: and so on
spk_3: the
spk_2: you know there's been a sort of up
spk_3: a liquidation of boeings inventory because if you look at our last our our first quarter last year i'm you know we still had full order books and we still had full plants and we were shipping shipping orders to you to to subcontractors into boeing that damn we had on the books and so on that that inventory now is clearing the system as well as everybody else is inventory including bombings
spk_2: so i'm were saying
spk_3: this pick up in in demand to support the
spk_2: the bills next year of i'm sorry in our fourth quarter and summit some of our third quarter i'm frankly i think we should be if if like worked perfectly and it never does
spk_15: you know we we should be starting our products
spk_13: a year ahead
spk_3: of the that their bill right i'm simply because you know takes six months to make it simple to make the bearing and the of the six months are probably right now it's twenty and twenty weeks to get to steal
spk_2: tell you don't have a lot to can't bearing him sometimes the bearing has did get frequent flyer to get all the on are all the outside process things that has to be done and that's the exception to the rule but still it's the law so i'm yeah i mean we we should i think the industry is a little bit the
spk_16: laid right now and turning and the volumes that they need to produce the planes that are expected to be produced
spk_2: so on
spk_3: so that that you know and that calculus falls on us to make sure that we understand what we're obligated to supply and when were likely to supply it and so we're going to those planning eu teams now to on make sure that down
spk_2: that we have the product
spk_3: that the aircraft builders need when they needed
spk_2: and if if you look at the step up
spk_3: i mean else those thirty planes to us hum or three hundred planes next year three hundred to three forty next year and it lets probably was forty five million dollars to wasn't over over the course of twelve months and in revenue so it's it's it's it's a big number for our plans to have absorbed
spk_2: and so a little yeah we want to get way ahead of the game in terms of getting everybody into position to the able to
spk_3: support that and then you look further at the skyline chart and there's another two hundred plane step up two to twenty three and so on
spk_2: you know there's
spk_3: there's there's gonna be a lot of thumb a lot of the me and headed our way and the last thing we want is is not to be able to execute it efficiently
spk_6: and our service the customer time i appreciate all the color on august last one for me just going to your defense revenue the last three quarters the fence at ex marine and you have a lot of yeah you're on the after the five and stop of we've seen defense down for a few quarters and i know a lot of other suppliers of had some at thirty five and torrent of that of adult kind of flesh out his lockheed is gonna slow things a bit there on a on an interim basis so is that and that was going on for you guys maybe do some interim f thirty five had wins
spk_11: ah i'm or i do think you to in and and may be expected to step back up later this year next year or he get a to censor defenses kind of you know getting some headwinds there's because the overall budget planning
spk_17: well i see it as a dance looking at the tables sell out of that i think on the an aerospace oh yeah that fence i mean
spk_5: it's pound
spk_17: he wanted he won last year i doubt we point six percent and that is just that big numbers on total sales it's twenty twenty point six million compared to twenty one thousand form
spk_18: on the space oh that's such a little lumpy what the f thirty five and a new lot sizes are like come from
spk_0: and as someone to work that with their own on military helicopters but some that's been offset by the strain on our missile programs and ah that that will work now with lockheed and and others
spk_1: okay they are much gas
spk_19: you're not crossing constant michael a family with true securities
spk_1: in march gosh thanks for taking questions your nice results on maybe just stick on on arrow what what pete was asking what was there any time me now
spk_19: you know the step down ah you know i i guess on a i bought a sequential basis ah
spk_1: for the our the arrow we and was was pretty significant was it it seems like a fourteen percent step down maybe a you mention the working days it any other changes on some of the widebody platforms and mean are you got a lot of content on the seventy seven or any way to parse that out ah was it was it more nj
spk_20: was it more airframe content ah
spk_21: you know night yeah put it it seemed like that that my snuck up on yet if you know there supposed to be connor sequential improvements and growth i mean it just seemed like a big moved out
spk_2: at all it it's it
spk_22: it's all about them you know order order rates by boeing and and and it's subs and the and i think right now they're trying to know
spk_23: no sell the planes they built and and liquidate of the little
spk_24: young but if if
spk_4: i would say that that them
spk_2: on there
spk_1: the priority to do that
spk_19: baby is more extreme than it should the in in in it could affect their ability to build planes and huge your if they don't turn on the like on
spk_25: after
spk_21: lot of helpful on what about anything on the aftermarket side ah you know i know it's it's kind of a tale of domestic narrow bodies in you guys were again i think sequentially flat there i mean are you see in you know any noticeable changes on the after market
spk_26: distributed outside of a barrel
spk_11: well tom
spk_27: the just that the aftermarket is to get inside of the of business
spk_28: a ben
spk_29: it usually at this at this stage in the arm
spk_21: in the cycle
spk_11: the distributors
spk_22: the
spk_30: that
spk_31: holding up their inventories
spk_3: knowing that killed rate in week three we're going to be substantial
spk_2: and when the market with the
spk_21: buyers would be the best
spk_17: with that with them service levels
spk_32: and that's that would be normal at this at this stage in the cycle let's not normal now is so many the after market distributors
spk_17: or am i owned by
spk_2: avenue new owners
spk_3: and new management teams
spk_33: an arm
spk_3: dave
spk_5: don't have experience that now have the experience with cycle
spk_19: so what they did the go on with their capital right now they don't appear to be though it
spk_3: so that the aftermarket in terms of distribution
spk_19: his arm
spk_1: now what what does it look like they've got the carts yeah for act actually won a lightweight to was around twelve point two million but compared the you for a longer quarter was twelve points winner
spk_2: yeah so it's it's hundred it just by ended up to a little better than cure for as as more production these include for
spk_21: mci you got that yeah that last one oh god started
spk_34: yeah i ever did that yeah the read the repair side of the aftermarket is an has been a pleasant surprise whereas that's that's been unit it's been strong and and then okay said reducing well
spk_3: got it last one you hadn't brought up inventories their but just shift it may be to industry i think last quarter ah you noted that there is so much demand tina you had kind of depleted inventory russian or replenish did did yeah yeah you called out the to god a two million dollar headwind but did you kind of see that
spk_19: that same piece that demand persist i mean obviously you'd get at added that if i advocate you know into yet sequential optic their an industrial that were you able to catch up on on inventory to meet demand or did you lose out on some revenue this quarter
spk_0: now we're we're we're making it is as fast as we can we can britain we can deliver and then we i was with we do have some
spk_35: like change
spk_19: challenges getting getting raw material to towards
spk_36: because
spk_3: ah perfect thanks i called him back and give again for any questions please pass star the than about wine and know telethon key pad
spk_37: internet question comes from can a man with keybank
spk_38: hagar more yet
spk_11: and morning
spk_36: i'm not i'm going to take that back to the arrows died a little bit of a good color in terms of to be ford outlook for arielle obviously with the bill right kind of coming up into the second half i am curious how do you weigh that against in a similar slower ramps in the larger widebody platforms if think about the step up in the second half for era revenue versus the first cat that he i get that to simplify a good kid that revenue for arrow be off double digits that like ten percent or that in and is that the ramp the of the that the build rate going to slow down a little bit ah now it it can be a double digits in the second half
spk_19: and i'm
spk_3: it it it needs to the up double double digits in the second half to support the built near the boeing bilbray so
spk_1: i'm
spk_39: that the
spk_40: that's how we see it
spk_3: let's hope let's hope the cards get played that way right
spk_17: so i yeah i guess with that in mind you i obviously you put up really strong gross margins in the quarter
spk_3: i'm i'm curious how sustainable a forty percent plus gross margin could be for the remainder the year
spk_11: as the can't think about your potential inventory belgian and the expected and step up and an arrow growth for the second half
spk_3: i think it we have lumpy during the quarter's but i think by the end of year we should be close our little know if the that forty one percent
spk_36: that is a lot of that just absorption on on higher volumes any way to kind of part that how much of that it is better pricing or any color on friday cost either for the quarter adjust your your for outlook
spk_19: l each each division then the way that we have has a keep said a ledger on what price increases we've seen from on materials and suppliers
spk_17: and what the price increases we'd instituted into the market to offset the price increases from materials and suppliers and the we always like to be a little bit ahead and also we put ya sniff again investment and and to bring in to all these out
spk_5: side services inside for the airspace business and twenty twenty one and we still haven't seen the full benefit of that investment as of coated fake as if bill gates dropped off so we should see one
spk_3: ios based business topics at picks up in of i am picks up we should see some nice guy improvement driven by disinvestment that we made over that twenty four month period
spk_36: right
spk_0: though the be my last one here it just trying to put a finer point of pride cocky or i guess obviously the industrial aftermarket ah sales were up by the remission to mike earlier
spk_41: any i'm guessing the pricing increases for those for those products within that channel are pretty instantaneous
spk_2: can you help with kind of put a fighter point i just how much price was a contributor to the sales growth and after market for industrial birth is just generally volumes yeah and the industrial side out on and especially industrial distribution and our first quarter it wasn't price
spk_3: and on that industrial oh yeah i'm on and some cases it is the other cases it's the ability to pass to ah material inflation that comes through in a way out of us surcharges savage every segments load different every customers little different
spk_42: and i read every channels little different and is just a lot of good efficiency happening and the industrial site of a business when your business is up thirty percent to forty percent year really absorbing your assets nicely
spk_30: understand they got
spk_0: yep i get a little star one for any questions at this time there are no further questions are now have the cop i take that to heart need for closing remarks
spk_1: okay well thanks thanks her own purposes bedding and the call today and there will be certainly talking to you again by early november and are discussing our third quarter our second quarter with sam which were anticipating another strong water i think again
spk_2: as i said we're expecting sales to be between one hundred and fifty eight and a hundred and sixty two million and and that sam
spk_3: that's looking very positive technically cities conference spanky their participation you may now this can act
spk_4: good morning ladies and gentlemen and welcome to the key one twenty twenty two rbc bearings earnings conference call at this time all participants are now listen only mode later we will conduct a question and answer session and instructions will follow at that time if you the way she require assistance to the car
spk_3: france please press star than zero under touchstone telephone as reminder this conference call is being recorded a now that term a conference over to your host mr will stack with investor relations
spk_2: good morning and thank you for joining of for rb be banned because one point to earth quarter earnings conference call with me on the call today or doctor michael j hartnett german president and chief executive officer daniel a barrage ron director vice president and chief operating officer and robert them both president and chief financial officer before beginning today paul let me remind you that from the statements made today will be forward looking and are made under the private securities litigation reform act of making ninety five actual result may differ materially from those projected or implied due to for a variety of factors we refer you to
spk_3: rbc banged recent filing that that the feet or more detailed that doesn't have the risk that could impact the company future operating results and financial condition
spk_2: if that they're they're all the described in greater detail on the press release and on the company's website in addition reconciliation between gap and non gap financial information in it is included as part of the relief and is available on the company's website now altering the call of or to doctor hartman
spk_3: thank you well and good morning and welcome to watch it seems like and were having these calls weekly now
spk_2: a sister a pleasure to speak to everyone every week net sales for the first quarter of fiscal twenty two for one hundred and fifty six point two million versus a hundred and fifty six point five million for the same period last year a decrease of point two percent we had some delays and shipments in one of our versions as a result of
spk_3: source inspection which sure is beyond our control so on that's where we are for fiscal quarter for the first fiscal quarter of twenty two sales of industrial products represented forty eight percent of net sales with aerospace products at fifty two percent
spk_2: gross margin for the quarter was sixty three point eight million or forty point eight percent of net sales this compared to fifty nine point five million or thirty eight percent for the same period last year it's just it operating income was thirty one point three million twenty percent of of net sales can be compared to last year's nineteen point one percent
spk_3: adjusted ebitda i was forty five point three million twenty nine percent of net sales compared to forty three point eight million and twenty eight percent net sales for the same period last year we ended a quarter with two hundred ninety six million in cash and securities and ten point eight million of them quarter was one where the industrial markets continue to show increasing strength our industrial oh and businesses not marine demonstrated a quarter to quarter bouts of forty two percent over last year the man was strong and virtually all components of the market except oil and gas
spk_5: but the letters appears to be making a comeback now in the july quarter formants in the industrial aftermarket was almost as as impressive with a thirty two point six percent expansion of or last year
spk_2: we should demand ranging from excellent to extraordinary in most markets serve we're looking forward to a strong second quarter from the industrial businesses unexpected expected continuing but some moderation in demand to the balance of the year are strong industrial markets where construction mining industrial distribution semiconductor machinery the seem to wind and train turning to aerospace and defense the sector was off eighteen point three percent for the quarter quite silly when normalize for production days was about flat with the preceding period
spk_5: aircraft go yemen's was down almost twenty two point five percent this can be almost entirely attributed to the slow ramp of the seven thirty seven next programs through twenty one and into calendar year twenty two a problem that should resolve itself and the quarters ahead as boeing steps through their monthly production rates from today's seventeen per month to january of twenty twenty three of forty two per month but we're now seeing increases in orders capable later in the air across all of our plants that service and supply both boeing and airbus saturday we are combing through over two hundred thousand to twenty thousand two thousand and line items scuse me bearings and assemblies we supply to the industry to ensure we have materials logistics and staff and place just seamlessly support the next two years of build rate increases regarding our second quarter we're expecting sale to be between hundred and fifty eight hundred and sixty two million dollars and and are now turned the call over to dan and rob for more detail on the financial performance i think you might didn't like it already covered net sales and gross margin i'll jump down as she and i as ne a for the first quarter of fiscal twenty twenty two was twenty nine point eight million compared to twenty six point eight million for the same period last year the increase is mainly due to higher personnel costs of two point four million in point six miles and your point six million of other items as percentage of net sales as today was nineteen point one percent for the first quarter of fiscal twenty twenty two compared to seventeen point one percent for the same period last year
spk_0: other operating expense for the first quarter of fiscal twenty twenty two was three point two million compared to expensive three point eight million for the same period last year for the first quarter of fiscal twenty twenty two other operating expenses were comprised mainly of two point six million of amortization of intangible assets and zero point six million of restructuring costs and other items other operating expense for the same period last year consisted mainly of two point five million in amortization intangible assets one point one
spk_6: alien of restructuring costs in zero point two million of other items operating income was thirty point seven million for the first quarter of fiscal twenty twenty two compared operating income of twenty eight point eight million for the same period and fiscal twenty twenty one and adjusted basis operating income would have been thirty one point three million for the first quarter of fiscal twenty twenty two compared to adjusted operating income of twenty nine point nine million for the first quarter of twenty twenty tie
spk_3: oh sorry twenty twenty one
spk_7: for the first quarter twenty twenty two the company reported net income of twenty six point zero million compared to net income of twenty two point seven million for the same period last year
spk_8: on an adjusted basis net income would have been twenty six point three million for the first quarter of fiscal twenty twenty two that third you adjusted net income of twenty three point six million from same period last year
spk_6: that earnings per share with a dollar three cents per share for the first quarter physical twenty two compared to ninety one cents per share for the same period last year and adjusted basis diluted earnings per share for the first quarter of fiscal twenty two with a dollar for compared to ninety five cents per share for the same period last year turning the cash flow in one of our strongest quarters today the company generated fifty three point three million in cash from operating activities in the first quarter of fiscal twenty twenty two compared to forty eight point four million for the same period last year capital expenditures with three point four million in the first quarter of fiscal twenty twenty two compared to three point nine million for the same period last year
spk_9: total that as of july third twenty twenty one was ten point eight million in cash a marketable securities on hand was two hundred ninety six point one million i would now like the turn the call back to the operator for the question profession
spk_7: apple's tommy to have a question please pass star that a number one and or telethon keep our a or just a manhattan a particular day roster
spk_6: and your first question can stand pete skidelsky with and then that volvo
spk_3: a more guys long time no talk and a half
spk_2: i'm in a corner want to start out on mike i think he talked about delays in shipments from i i think one unit because of source inspections he could you guys maybe quantify how much revenue was impacted by that event in the me went with it you know aerospace sales or industrial fails
spk_10: yeah it was or industrial sales and it's about two million dollars
spk_11: i've got a cat
spk_3: got it arm and van on the aerospace i thought aerospace's thing because it wasn't you know you had had four corners of down aerospace sales so that should have an easier comp corner
spk_43: at i thought maybe mikey mentioned something about a yacht fewer days in the corner some the that i hear that right or my completely wrong on that yeah well there's there's there's more there's more days and in our fourth quarter than there are some isn't our first quarter so when you normalize bit the to it's it's about even
spk_3: of guy would have in the first quarter with the same number of days in the fourth quarter of fiscal twenty one or are now guy at night it's about the same yeah
spk_12: oh crap oh crap
spk_11: two thought are you seeing kind of some recovery in some of the in in demand for so many other platforms is just as is mainly the max that was the yeah the had when this corner
spk_2: yeah it's it's it's mainly the max i in the at the other the other platforms are you know our i'm almost incidental
spk_3: to what's going on here that the max the max is really a kind of a big deal because
spk_13: you know when we look at
spk_14: we look at i have to quote
spk_3: industry analysts
spk_2: numbers because some
spk_3: and kind of an insider on them aircraft stuff and i can quote the exact nine spend on the am when i look when i look at what the industry expects going to build this year it's somewhere between a hundred and fifteen hundred and sixty max's right to the calendar year
spk_2: and
spk_3: and i think that numbers to that number
spk_2: and and next year is three hundred to three hundred and forty sir that that's the range
spk_3: yup
spk_2: and the year after it's five hundred and so on the
spk_15: you know there's been a sort of a
spk_13: a liquidation of boeings inventory because if you look at our last
spk_3: our our first quarter last year i'm you yeah we still had full order books and we still had full plants and we were shipping shipping on orders to to to subcontractors into boeing that them we had on the books and so on
spk_2: that that inventory now is clearing the system as well as
spk_3: everybody elses inventory including bombings so i'm were saying
spk_2: this pick up in in demand to support the
spk_16: the bills next year of i'm sorry
spk_3: in our fourth quarter hour summit some of our third quarter
spk_44: frankly i think we should be if if like worked perfectly and it never does
spk_2: i'm
spk_3: you know we we should be starting our products a year ahead of the their build rate i'm simply because
spk_2: in our takes six months
spk_3: like example to make the bearing and the of the six months are probably right now it's twenty and twenty weeks to get to steal
spk_2: tell you i have a lot of can't make bearing him sometimes the bearing has did get frequent flyer to get all the young
spk_3: are all the outside crossings that has to be done and that's the exception to the rule but still it's the law so i'm
spk_6: yeah me we retreated i think the industry is a little bit delayed right now and turning and volumes that they need to produce the planes that are expected to be produced so on so that that you know and that calculus falls on us to make sure that we understand what we're obligated to supply and when we're likely to supply it and so far more going to those planning teams now to on makes you are that damn that we have the product
spk_3: that the aircraft builders need when they needed and if if you look at the step up i mean else those thirty planes to us
spk_17: hum or three hundred planes next year three hundred to three forty next year and it lets probably was forty five million dollars to us and over over the course of twelve months and in revenue
spk_11: so it's it's it's it's a big number for our plans to absorb
spk_45: and so were little yeah we want to get way ahead of the game in terms of getting everybody into position to be able to support that
spk_18: and then you look further at the skyline chart and there's another two hundred planes step up
spk_0: two to twenty three and so on
spk_4: you know others
spk_1: there's there's gonna be a lot of fun
spk_19: a lot of the me and headed that way and the last thing we want is is not to be able to execute it distantly and service the customer and time
spk_1: i appreciate all the collar on august last one for me just going to your defense revenue the last three quarters the fence act ex marine and a have a lot of yeah you're on the after five and stop of we've seen defense down for a few quarters and i know a lot of other suppliers of had some at thirty five and torrent of
spk_19: that of a kind of flush out as lockheed is kind of slow things a bit there on a on an interim basis so is that and that was going on for you guys maybe do some interim f thirty five had wins ah i'm or i do think you're to in and and may be expected to step back up later this year next year or you just to censor defenses kind of you know
spk_1: getting some had when there's because the overall budget planning
spk_20: well i see as a dance looking at the tables sell out of that i think on the an aerospace oh yeah that fence i mean
spk_21: he wanted he won last year only down to be point six percent and that this is that big numbers on total sales it's twenty twenty point six million and heard the twenty one for
spk_22: the big aerospace and defense
spk_23: such a little lumpy with the f thirty five and a new lot sizes are like come through and of seminal work that we dylan i'm in military helicopters but some that's been offset by the strain on our missile programs and ah that that will work now with lockheed
spk_24: and and others
spk_4: okay a very much as
spk_2: units question comes from michael a family with two is securities
spk_1: good morning guys thanks for taking questions your nice result maybe just stick and on on arrow what what pete was asking what was there any i mean the you know the step down
spk_19: you know i i guess on a i on a sequential basis
spk_3: for the ah the arrow we and was was pretty significant was a it seems like a fourteen percent step down maybe a you mention the working days it any other changes on some of the widebody platforms in you got a lot of content on the seventy seven or any way to parse that out was it was more energy
spk_26: when was it more airframe content
spk_46: you know and i yeah day it seemed like that
spk_3: that my snuck up on yes if you know they're supposed to be connor sequential improvements and groves i mean it just seemed like a big move down
spk_28: at all if it's it
spk_29: it's all about them you know order order rates by boeing and and and it's subs and the and i think right now they're trying to know sell the planes they built in and liquidate as in the middle
spk_22: young but if if
spk_11: i would say that them
spk_22: on there
spk_3: the priority to do that navy is more extreme than it should the in in in it could affect their ability to build planes and huge your if they don't turn on the spikes on
spk_2: occur
spk_21: alex of helpful on what about anything on the aftermarket side you know i know it's it's kind of a tale of domestic narrow bodies you guys were again i think sequentially flat there i mean are you see in you know any noticeable changes on the aftermarket
spk_3: distribute lymphocyte of a barrel
spk_32: well damn
spk_5: the just that the aftermarket it's side of that a business
spk_2: a ben
spk_3: you'd usually
spk_11: at this at this stage in the i'm in the cycle the distributors
spk_5: the
spk_4: owning up there in glories
spk_3: knowing that filled rate if we we were going to be substantial
spk_19: and when the market would be
spk_1: home buyers would be
spk_19: best
spk_2: with that with them service levels
spk_21: and that's that would be normal at this at this stage in the cycle let's not normal now is so many the aftermarket distributors
spk_34: i've owned by
spk_19: of new owners
spk_0: and new management teams
spk_35: an arm
spk_19: they don't have experience that they don't have the experience of the cycle
spk_1: so what they did the doing with their capital right now they don't care to be though it
spk_36: so that the after market in terms of distribution
spk_3: it is what what is it look like they've got the cards
spk_37: yeah for actually one f lightweight to was around twelve point two million but compared the out you for a longer quarter with twelve point wiener
spk_38: yeah so it's it's cut it just by and of do a little better than euphoric as as more production these include for
spk_11: the cat got that yeah that last one of at started
spk_36: gags about the but yeah read the repair side of the aftermarket is some as then a pleasant surprise whereas that's that's been unit it's been strong and and then okay said reducing well got it
spk_3: last one you of brought up inventories there but just the shift it may be to industry i think last quarter
spk_1: if you noted that there is so much demand tina you had kind of depleted inventory russian or replenish did did yeah you you called out the to god a two million dollar headwind but did you kind of see that that same piece that demand persist i mean obviously you're good at at that if i add back to two million to get sick
spk_3: central optic their an industrial that were you able to catch up on on inventory to meet demand or did you lose out on some revenue this quarter
spk_40: now we're we're we're making it is as fast as we can we can britain we can deliver
spk_3: and then we i was with we do have some apply chain challenges getting getting raw material to the because
spk_17: ah perfect thanks i called him back and give
spk_3: again for any questions please pass star the than about wine and a telethon key pad internet question comes from can a man with keybank
spk_11: hagar more yet
spk_3: and morning
spk_17: i'm not i'm going to take that back to the arrows died a little bit of a good color in terms of to be ford outlook for arielle obviously with the bill right kind of coming up into the second half
spk_19: i am curious how do you weigh that against in a similar slower ramps in the larger widebody platforms as we think about the step up in the second half for era revenue versus the first cat that he i get to simplify a good kid that revenue for arrow be off double digits that like ten percent or that in and that the ramp the of the that the build rate going to slow down a little bit
spk_36: ah now it it can be a double digits in the second half
spk_19: and i'm
spk_17: it it it needs to the up double double digits in the second half to support the built near the boeing bilbray so that the
spk_5: that's how we see it
spk_3: let's hope that helped the cards get played that way
spk_11: right
spk_17: so i yeah i guess with that in mind yeah obviously you put up really strong gross margins in the quarter
spk_36: i'm i'm curious how sustainable a forty percent plus gross margin could be for the remainder the year and they can't think about your potential inventory belgian and the expected and step up and an arrow growth for the second half
spk_0: i think we have lumpy during the quarter but i think by the end of the year we should be close our little know if that forty one percent that is a lot of that just absorption on on higher volumes any way to kind of part that how much of that it is better pricing or any color and price cost either for the quarter adjust your your for outlook
spk_41: l each each division then
spk_2: we that we have has a keep said a ledger on what price increases we've seen from on materials and suppliers and what the price increases with instituted
spk_3: into the market to offset the price increases from materials and suppliers and the we always like to be a little bit ahead and also we put the us sniff again investment and and to bring in all these out side services inside for the airspace business and twenty twenty one and we still haven't seen the full benefit of that investment
spk_42: because of code fake as if bill gates dropped off so we should see one the else based business
spk_30: at picks at picks up in of i am picks up we should see some nice guy improvement
spk_0: driven by disinvestment that we made over that twenty four month period
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