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spk_0: their life and gentlemen thank you for standing by a walk onto the rbc bearing second quarter twenty twenty two a news conference call at this time all the distance analysts a lowly mode after the sweetest presentation they'll be a question and answer session so as a question during the session you want you to press of start in the one key on your touchdowns all phone please be advised that that is called for this being recorded if you've got offered systems response thought and sell our know like to in the conference of what's your speaker hosts michael comments with api oh please go ahead
spk_1: the morning thank you for joining us for be bc bearings fiscal two thousand and twenty two second quarter earnings conference call with me on a call today or doctor michael j hartnett german president and chief executive officer daniel a barrage on director vice president and chief operating officer and robertson than vice president and chief financial officer before brigades a call them remind you that some of the statements made today will be forward looking and are made under the private securities litigation reform act of back to ninety five as a result may differ materially from those projected or implied due to a variety of factors we're for a huge rbc she recent violence with the fcc for more detailed discussion of the risk that could impact the company's be dropping and results in financial condition these factors are asked to describe in greater detail the press release and on the company's website in addition reconciliation between gap and i gap financial information is included as part of the release and it's available on the company's website now i'll turn to call over the doctor hartnett
spk_2: mike michael
spk_3: morning to all welcome to the second quarter
spk_4: school twenty two
spk_3: after school for our parents
spk_1: net sales for second quarter of fiscal twenty two were hundred six point nine million versus hundred and forty six point three million
spk_5: the same period last year an increase of about ten percent
spk_3: for the second color sales of industrial products represented forty eight percent of or sale net sales aerospace products represented fifty two percent adjusted gross margin for the quarter with sixty three point four million or thirty nine point four percent of net sales
spk_4: this compares to fifty eight point six million or forty percent
spk_1: the same period last year
spk_4: i tested operating income was thirteen point five million
spk_1: ninety percent of sales compared to last year twenty nine point nine million twenty point four percent net sales adjusted even dial is forty five point four million twenty eight point two percent net sales compared to forty three point five million and twenty nine point eight percent net sales for the same period last year
spk_6: and we ended the quarter with
spk_1: a billion three hundred and forty six million dollars of cash
spk_4: and seven point six million dollars of debt demand from the industrial markets maintains an extremely strong performance
spk_7: during the period
spk_1: and showed increasing strength is the quarter ended with important markets gaining new strength towards the end of the period our industrial ocean business showed a year year expansion of thirty one percent over last year industrial aftermarket continue to expand showing again of twenty six point four percent over last year while oh yeah i'm experiencing hovered around thirty three point four percent for the period
spk_4: we saw them and ranging from excellent to extraordinary in most markets served and we look forward to additional strengthening from some of these markets
spk_6: as we see for the balance of the year
spk_3: relative to dodge their unity performance was up twenty two point five percent over last last year
spk_4: and and orders continue to outpace sales we're expecting a good showing here and in our fourth quarter
spk_1: very happy on how their markets are in are performing and
spk_5: their manufacturing plants are keeping up with demand
spk_4: turning to the aerospace and defense markets
spk_5: they contracted four point four percent for the quarter
spk_1: defense showed again of a leper percent for the period offset by oh yeah i'm which was off seven point seven percent
spk_3: we're now seeing increases in orders typical later in the year across crossed all of our locations that service
spk_1: and supply both boeing and airbus as well as their sub contractors
spk_6: he appears that we're about to
spk_3: complete we are about complete with the inventory hangover created by the an abrupt halt production on the max and are saying a substantial pick up in our order book for commercial aircraft components for both major played producers to deliverable beginning and our fourth quarter
spk_5: in fact backlog for the sector his up fifty million dollars over last year
spk_4: which is really a great sign
spk_1: a gross margins under more or less that he stay conditions what have we would have expected margins to be a point or more higher
spk_3: we are not operating however understudy state conditions today
spk_1: and the second quarter we added additional costs to the plants supporting commercial aircraft production in order to step up
spk_6: our capacity
spk_4: to support the demand which will which will see him early next calendar color calendar year it's created than and overhead absorption variants degrading or marches slightly
spk_8: but damn
spk_4: it it it it is what it is and it's something that we had to do in order to step up to support them
spk_1: support this additional demand that we see
spk_5: coming very quickly
spk_4: secondly we've been having step to absorb the dutch acquisition and order to support services supplied by the previous owner a bp
spk_5: and lastly was a variance and tax
spk_1: considerably impacting the effect of rates that rub will explain later and cop
spk_3: regarding the third quarter
spk_6: we expect sales to be
spk_1: somewhere between two hundred forty five and two hundred fifty million dollars
spk_3: and we're expecting a very strong fourth quarter with contributions from both the industrial and the space markets
spk_5: i'm not trying to crawl over to
spk_3: rob are more detail on the financial performance
spk_6: if you like since mike is already covered net sales and gross margin i'll jump down to as
spk_1: i've seen a for the second quarter of fiscal twenty twenty two was twenty nine point seven million compared to twenty six million for the same period last year increases mainly due to higher personnel costs of two point four million one million of additional surveys compensation and two hundred thousand of other items as percentage of net sales as today with eating and point four percent for the second quarter of fiscal twenty two twenty twenty two compared to seventeen point eight percent but his injury last year other operating expense for the second quarter of fiscal twenty twenty two was expense of five point seven million compared to expensive four point two million to the sanctuary last year to the second quarter of fiscal twenty two other operating expenses were comprised mainly of two point eight million and amortization of intangible assets one point four million of acquisition related costs one point one million restructuring costs and related items and four hundred thousand of other items other operating expense for the same theory last year consisted mainly a two point six million and amortization of intangible assets one point five million a restructuring costs and related items and one hundred thousand of other items operating income was twenty seven point one million for the second quarter compared operating income of twenty six point four million for the same your your last year and an adjusted cases operating income would have been thirty point five million for the second quarter of fiscal twenty two compared to adjusted operating income of twenty nine point nine million for the second quarter last year income tax expensive the second quarter of fiscal twenty twenty deal was four point seven million compared to five point four million for the century last year
spk_6: he affected income tax rate for the second quarter was forty point five percent compared to twenty point nine percent for the same period last year
spk_4: right in the second quarter was impacted significantly by approximately one point nine million of history tax expensed primarily associated with evaluation allowance for capital loss carryforwards further and part as a result of the blackout associated with the acquisition of dodge benefit associated with start compensation activity was approximately one hundred thousand three in the past quarter compared to four hundred thousand last year and two point one million last quarter of she's called twenty twenty two
spk_1: for the second quarter of fiscal twenty twenty two the company reported net income of six point nine million compared to net income of twenty point four million for the same period last year
spk_6: on an adjusted basis net income would have been twenty three point five million for the second quarter of fiscal twenty twenty two compared to adjust the net income of twenty three point two million for the same period last year net income available to common stock holders for the second quarter of fiscal twenty twenty six point four million compared to twenty point four million for the same period last year and an adjusted basis net income available to common stock holders for the second quarter of fiscal twenty twenty two was twenty three million compared to twenty three point two million for the same period last year diluted earnings per share were twenty five cents per share for the second quarter of fiscal twenty twenty tail compared to eighty two cents per share for the same period last year and i adjusted basis diluted p s for the first quarter of fiscal twenty twenty two and a nine cents per share compared to just a diluted he yes of ninety three cents per share the same period last year
spk_4: excluding the impact of the additional shares issued for the offering of a common in preferred stock adjusted alluded dps would have been ninety two cents per share compared to ninety three cents per share but the same period last year during the cashflow the company generated forty point two million in cash from operating activities in the second quarter of fiscal twenty twenty two compared to twenty six point one million for the same period last year
spk_6: capital expenditures are three point five million in the second quarter of fiscal twenty two compared to two point one million for the same period last year
spk_9: looking ahead and we integrate dodge into our business there a few things to keep in mind
spk_6: addition to the costs we continue to have encouraged to enter your a space plants as we look twitter recovery an ad space will experience a certain amount of unusual and you put your costs with the integration of dodge for a period of time as detailed in the previously released dutch dodge financials their margins historically run a bit lower than rv sees they've also had a bit of in fact associated with inflation immaterial availability as most folks have in this environment we're on track to achieve the margins we anticipated legacy rbc however the impact of integration these other matters i mentioned one pack and you margins of it elites it and gross margins of roughly thirty five to thirty six and a half percent in the coming period
spk_4: which we expect to improve gradually incrementally from there as we spend more time with the business will have more information sharing future period as be taught
spk_1: as teenage a percentage of sales sales should improve with expanded scale can move closer to the seventeen eighteen percent point in the next quarter with a further improvement as he received benefit of a full quarter of god's keep in mind it's only been about four days since we close to me look for the sharing more information with us when we talk next would now like the turn the call back to the operate
spk_9: or for the question and answer session
spk_0: and kill things and johnny that's a question you want you to place to start on the one too young a touchdown telethon to becoming a question press the pound key please send my mother compile the can a roster question now first question coming from the line lineup it's can do with olympic level you on a something
spk_10: and you want to guys are like is his skin voice i'm so i guess what touched on supply chain and maybe inflation had dodge i ah the rest of our b c just didn't really see much in the last apply to problems because we've seen a really across the defense industry but i'm sorry you did you guys are him the same problems with residents trees having a cat
spk_4: well i will i would say that that for our be seen on the supply chains situation isn't perfect i'm we have to me i was were scrambling to arm to to take care of business here and and hammer with your by a large we've been successful it's it's really not having a any material impact on us to date we have to do we didn't have to do unusual things but we do them and in milan
spk_10: i'm catherine a fair enough at an unlikely given i mean for seventy or here industrial has been pretty brief torrid on any changes to the individual market and industrial that you seen a demand from
spk_3: yeah well of course there's is new new to me and coming from the oil and gas market which was pretty much dormant for in was the last twenty four months outta it it's not dormant now
spk_9: and i'm so so yeah
spk_4: he had oil over eighty eight hours a barrel him and he knows things start happening and believe me they're happening so we see a lot of a lot of the new to me and coming in from oil and gas and scanner products that we've supplied over the years to that to those markets
spk_11: and else also seen
spk_4: unusual on the man coming from
spk_12: semiconductor
spk_8: i'm
spk_4: you know it so
spk_1: i would i would say the semiconductor space is definitely supply constrained
spk_5: and that's really really benefiting us right now so i'm near where it were scrambling
spk_4: service new customers
spk_10: in their in their whole reason so i think those are the to the come writer by to the top of her okay is a hard to find any of weakness in industrial guess it is now i'm cat and then maybe a rod can you give us a sense of the the other line did didn't include amortization
spk_4: you know he started to include i like as you did not include really on the internals amortization from dash and into view the what would you expect that line to be kind of each corner you know once the die started to be included yeah yeah i mean that that's a great question p and i think once you start to factor in guys were looking at totally amortization per quarter of somewhere in there are seventeen eighteen million including rbc legacy
spk_10: congress the going through some of the purchase price allegations so that i could change bit but that's that's what we're looking today okay i gotta have that and will will add that back roughly in the cash flow i guess arm
spk_0: okay
spk_10: okay our law a lot more blog i get back and you thanks guys
spk_13: my next question coming from the line up the fighting with keybank you wanted something
spk_14: eg my guys are eagerly
spk_13: get our can we go back to the thirty five or thirty six percent gross margin for three q i think he said there some duplicate costs with the integration some inflation some availability can you kind of put that into buckets for arson and tell us how much of that is unusual vs operation on and then ah i think he said i'll take a few quarters to catch up
spk_6: any any
spk_9: prospects are you know expectations for when that happens
spk_1: yeah you know it as i mentioned it seems we will you were diving into the weeds with these guys ray and they have had a bit more constraints a material availability which will impact or their ability to i had some of their higher margin parts in and in the next quarter and so that's you know probably taking a pointer to away
spk_6: way from them on air and and then a duplicate cause is just like any integration when you put you businesses together you throw additional had adding additional resources
spk_5: now and pills will last you know pride to the rest of the fiscal year as week we stand atop i'm in and from their know the margins well will start to incrementally die gro it'll take some time like you know blue
spk_1: big believers in and our ability to do so there is one month common announced the interceptor dodge dart was a carvel for maybe be so wasn't standalone with a b be so there's a lot of shared services
spk_4: so over the next six to nine months we have some transition service agreements to get to him
spk_15: and that's going to cause little bit to kitchen and cost i will be pain a be before using their system is as we're setting up new systems and that to run and about it and millions six a month
spk_1: ah castille at as can be a million six and one duplicate but i'm as work poland and send up new systems brain and new people were still going to have these transition service agreements that we're trying to get out of in the next six to nine months
spk_13: to ah get dodge stand and fully on my own two feet
spk_4: ah understood that like clarification
spk_1: for the two hundred and forty five to two hundred fifty five million and expected revenue for next quarter how much of that is coming from dodge the rangers did that isn't are we have a range and for dodge ram arrange him for for rbc but for died for use in the center point of around one hundred million
spk_9: and just okay so they're young quarter their third quarter act just like rb sees their quarter right they had add just a mallet for that same manner production days they of christmas you have a holiday sale process always or worse quarter for my a gross margin and topline cells cause you just don't have enough production
spk_10: days and then in the fourth quarter you pick up those production days back so makes or fourth quarter so much stronger and they're right the wrong idea obviously talk fiscal end it your and into a four or five so that and be right on our our production days
spk_16: calendar going forward
spk_13: active november first right by but if i did use that hundred million dollar number that suggests that rbc legacy oh be about one hundred and fifty million which about ten million down sequentially from what you just put up and to kill if i look back at the last few years within a few million bucks roll up our role three here is is pretty my
spk_1: much with enough in line with with to queue i'm so it feels like that's a little bit of a bigger of sequential decline is there at how can i square that with the commentary just around in a robust and markets
spk_10: yeah so for cute three armed i'd say this that the center point for our b c is around one hundred and fifty three million compared to last year of a hundred and forty five million one hundred and forty six million
spk_4: ah so it's been the can be heavy again on industrial and a little soft on aerospace even though what can a lot of activity especially in backlog on aerospace it's all can store come to tune que forty wanting you to have no okay so even though aerospace has a really easy combining it's negative thirty percent for last year what should we expect that aerospace is up double digits in three que here we're want to get back to because i don't have them front of a steven will have them both canal okay i think i think girls is probably gonna see the same quarter to three that they so cute to is not you know is that can be materially different in terms of sales for the simple reason that you know it's the lead time associated with nope
spk_10: producing facing these parts which is can't get a maiden shipped in that quarter so the grey make it going to be making them with the going to be shipping him in the fourth flutter so it some
spk_0: you know what's what's planned for the third quarter is is pretty much know ordered
spk_1: six to nine months ago and next to switch come through now him the his those that's just the way that that whole clockwork proceeds under said i'll get back in line thanks and also might only thing gentleman tough question baseball star one
spk_3: i next question coming from blown up like michael tell my with to and you want to something
spk_5: hey to mind as thanks for taking the questions your bomb maybe maybe just to stay with aerospace were worse he was gone it is there something different about you know your aerospace sales and me just looking at you know all of the the pure companies selling into the oh he market we've we've seen pretty significant sick
spk_4: quinn show growth you know this reporting season from all of them minimum mean you guys in i get the the revenues at the a week side flattish and then maybe even more surprising the aftermarket distribution down ah which really runs contrary to the trends that were seen from the broader supply
spk_3: years out there so is very anything else you guys can point to i mean we obviously know the wide bodies have been down they'd been week you know i i don't know if you can give any color on where you are on max production yeah we saw boeing you know step up that way but the it it seems like you guys just on on seen yet
spk_6: our see it were saying in the backlog and we're seeing it the order book and were saying were saying the schedule sculpt the and pretty much filling in in they don't in the fourth quarter or whatever
spk_1: forever plant managers ah recently made the statement
spk_4: you know i hope we can make while the scope so yeah and wait we are definitely seeing if they are where we are not saying it so much from the industry or from the earth aircraft aftermarket because you know for the most part we don't do on
spk_6: we don't do repairs
spk_5: you know and really make parts for or yams with we have a little bit of a repair shop it it's very small
spk_4: but we make we make parts for the aliens and end and art or after market distributors are pretty much bearing specialists
spk_5: and they are they
spk_17: are are in a i'm that they're just that just
spk_5: the just starting to come alive now
spk_1: they you know it's that maybe there are lagging indicator that they're just they're just starting to come back in the into the incident it you have significant them
spk_4: no
spk_3: your business with us
spk_1: right right now and them so that's just the way or markets work
spk_4: i'm from family can parse out the backlog media mean are you see orders i mean presumably nothing widebody related you know do you have a good directional signal as to what were the rate on the max or are are gonna go i mean or easter the water flow you know more skewed towards the three twenty and the to one he where it it seems like airbus has better align the sidebar no it's it's it's definitely a three twenty we're seeing if there and i love bringing and production programs to support the free twenty that we haven't had before so i'm were happy to see that i'm very much engaged with the with the leap engine and i'm so let's i think sixty percent of the three twenty irresistibly leak though some we were happy happy to see that kinda and then on the backside
spk_5: yeah it's all about the max at boeing and and we see the the pick up and rape
spk_4: and the way here for the most part the way our business works weekly think of it the think of it this way if boeing is going to produce you know forty planes a month and have like twenty three three and i'm just picking a number of the air and i don't have anything anything other than using that as an example but it's you know it's in that boat
spk_3: we we really have to say we really have to start the bearing a year ahead of time
spk_6: i'm in that sounds that sounds crazy
spk_3: that's when you when you look at it go steal lead time arc arc you know twenty six to thirty weeks
spk_6: so you know sadly after we have to really make sure that term it's still an order probably takes three months to so let's say six months to get the materials
spk_1: three months to produce the bearing and then we get the bearing to the sub contractor we assume that he needs he needs it's three months ahead of time to interrupt integrated into his distance make it less school leaders three months or the rule of thumb
spk_5: selling the are use the air and then janice of got is a sub contract tractor get it the boeing and we assume boeing needs three months to make it in into an airplane so you know you know maybe i'm wrong by three months similar but i'm that wrong by more than that
spk_4: got it now that but helpful i'm maybe just one more and i'll go light years you know i i compete ask about supply chain and you of just mention ordering steel and mean the the your inputs i mean can it can you give any more specifics on where lead times are a man you know and we've seen a number of the ah the medals supply
spk_9: liars pudding through surcharges price increases what would you seen on your pricing environment are you able to pass through the pricing should we expect that to be a potential tailwind to margins are as you reprice or or how weekend for that well yeah that the that's it interesting
spk_4: question it probably takes an hour to answer
spk_5: just because it up
spk_6: you know we have to drastically different businesses here one on the rbc say i'm one of the punch side and so on
spk_18: on on the and the dark side you know there are the industry industry has has announced in a price increase to those industrial distributors of this or than it's single digit kind of and a level which sucks it take care of a lot of this is in that regard
spk_4: and only rbc side leave we normally have contracts were there's a pass through raw material
spk_8: the a candle aura of keep the i index
spk_4: arms can still
spk_19: that's that's typically how we try to manage this thing and and so i'm you know it takes it takes more vigilance than it used to take when there was no
spk_0: none of this inflation going on to to make sure that term
spk_10: that you're your invoicing at the right rate so i'm you know it's just them
spk_5: it's just where the world is in a november of two thousand and twenty one
spk_6: got it got an artifact make you think that
spk_20: i am far question from people you begin with on the copley on to something
spk_9: can a guys he does it cost to you have in mind you do conduct that the dodge integration a lot of times when we've seen these companies have kind of an upfront cost before the savings gonna roll through linger on down the line some just one if you guys ever passed in mine and i guess you just that our he adjusted resolve it's and ah yeah yeah kind of a complete plant this point has to work and process
spk_1: biking ghana looted today transition services agreement of the one point six million air which is going to cover a lot of
spk_21: oh just blocking and tackling as you build those businesses together outside of that you know there's some assistance from from some outside vendors and certain process
spk_10: but then you know the and we will continue to track knows to be you know when or anything significant italian on today
spk_6: but he had by the end the next quarter eleven and two months of dodge and are now so have been a lot better position to tell you what you those cost are bickering and were char just gonna be a transition our one time costs that are impact and a business that will go way over up
spk_9: six to nine months
spk_10: a fair a fair enough cash looking for do it on a that i've just done the accounting arm
spk_9: robbie not even i've thought about this briefly previously but you're making it about five million in preferred dividends each quarter arm or or the stock where it is are we we over the max price renowned afford to convert and he just clarify that jerk yeah so it's a twenty two would have percent step up from the one hundred ip at the track the dividend should be about five point eight million a quarter to eight the night of liquidation value of the original securities of one hundred and a number shares issued
spk_10: five percent so that each quarter your duty of converted to a calculation to assess which is more dilute it and report on that is quarter that affected the dividends more dilutive if you you know i would expect next quarter has to be the same thing the dividends should be the domestic for calculating it just i've got a guy and in what way did you guys are getting and a term loan it's library plus a specified margin
spk_6: in a margin currently one point seven five percent
spk_1: after of climbers one and fifteen at that yeah exactly
spk_10: yeah i've got a pig right ah last one for me i'm a another high court free cash flow in a in a you know the working capital management looks like it's been really strong he did he can working capital kind of reverse the back half and a year or are we think about that kind of our had when the back half
spk_0: just given you know i mean free gas conversion was
spk_9: exceedingly hi the first half of the air
spk_22: i think he'll be a week or two three and a stronger que for as were would definitely investing and working cat and with and and while material and in a little bit a labor and and that will get the used up in this quarter answer manufacture food good that we hope our ship in in queue for and or
spk_10: lean to for so that we start seeing some of the impact of those collections by the end of a few for okay okay great thanks guys
spk_3: now next question coming from the line of the fighting with keybank human or something a thanks is that seventeen eighteen percent as she and a rate good for for que as well or will there be some leverage on a given the bigger topline yeah no it's a great question even guys jack that that keep him i'm only have two months to dodge so we haven't realized the full benefit of the you know the scope of dodge coming and diluting yes percentage so i expected low
spk_4: improve in the fourth quarter okay like a hundred basis points or awarded any many wait i just think about that for modeling i think that probably right i think closer to the sixteen to seventeen should fallen their gotcha evidently and i know it's really early days but you know costs selling i think was was a nice part of this is as you and integrated the bigger dodge salesforce any timeline on the cross selling opportunity realistically how long's it take to the get them a line to the broader products at well say right now we're trying to hold them back
spk_23: you know everybody everybody wants to sell everybody else is product right now and
spk_3: it's
spk_5: it's and is the wild west so we are we've we've we've been saying listen let us let us decide how how to organize this so that dumb because compensation program sort of everything's different between the two companies in the right and so a while that's gotta be sorted sorted through before weekend but it's a
spk_4: it you know a look at where we're going to pick up you know and thirty five men selling force in canada and we have two guys and girls and we just tired one so when you know now making it too so now we have no thirty seven three at a thirty seven
spk_13: sales people in canada in customer service people managed from people in canada supporting a pretty sizable amount of revenue and in their in in places that them
spk_4: i don't even know how to pronounce the name at some of these girls
spk_6: and so
spk_5: you know if in in canada is just one country of you know for five it's the biggest that it's worth one company country of horrified that the that them
spk_4: that are represented like that in in selling our product to those to those other areas is going to be very productive where you know i is a factor the canadians are coming here as far as i know thanksgiving week so that we gave a little powwow on how organizers good and well and i guess to that point you know the backlog that for fifty seven a nice increase your area will and enacted the quarter and what is that now including dodge
spk_5: oh god dodge doesn't have much of a backlog and they never they never will
spk_13: your window when you're running right when they would they consider right
spk_1: the the their backlog is you know like ten million dollars
spk_5: i think right now is more book and ship yeah they did that there are a book and ship company in it's it's really astounding the way they can manage manage their their mics to be able to support the abroad industrial customer base with a very broad mix and
spk_4: and do it so efficiently every day
spk_13: i think right now they're backlog as if i had to if i had a projected to be be somewhere between thirty five fifty million dollars
spk_24: okay
spk_6: and yes last question like you've always been really good at working a parade or less than trying to find the biggest areas of waste and an organization any initial thoughts on what you go after first where the big pockets of opportunity are again i know it's twelve days and but
spk_1: your your eyes of good insights on that
spk_4: oh you know it so i'm still i'm still it's a it's a big company and i'm i'm still walking the plants and talking to the folks and looking at the reports and in making my assessment of you know where the where the low hanging fruit is and them and and
spk_9: i'm just not there yet but i am
spk_13: i'm going to you know move my office so that it's fifty percent in greenville so that i can get a lot closer to to the dutch business and understand the what we can do it to improve it
spk_0: got it naturally one last one
spk_1: ah tax rate for three cure for q where it where should i run yeah so you know we're still assessing the impact of guys there ever footprint lot more humor states than rv she's a little can have an impact but i i think you know arc arc for your rate excluding the i'd
spk_25: nah just read items of at twenty fours percentage is probably have a good letters twenty four twenty five
spk_26: okay and i remember that exclude any impact from stock camp in we're where we will still be in a blackout for the coming quarter
spk_4: but eventually outcome often sales such things come through
spk_3: got it thanks
spk_4: now next question coming from the line of my family went to a security seal on a something
spk_5: hey guys thanks for arctic polyps almighty on medium on supply chain you know i i think my i'm you know yeah you made the dodge announcement you've talked about two hundred million of supply chain that has the potential to be sourced internally ah from rb see that does the current environment you know
spk_4: assuming you know digesting stretch lead time seeing you know their suppliers increase prices that business environment help you accelerate the realization of that two hundred million and supply chain savings
spk_19: i hope it does
spk_1: you know i think added in i think it's
spk_6: it's right now i think it's gonna be a little difficult to get get their attention on that even though they worked for me
spk_4: because they're so busy
spk_5: a case in their case in their suppliers
spk_4: there's nobody like nobody left to work on my synergy projects so i'm in all i'd break but yes it it it looks like it's gonna be it's gonna be manageable and and will find a way to will find a way to shoehorn that it okay and a mom something i haven't come up just defense
spk_17: can you you know we we've top lot about commercial aerospace and the trends there you know a humane give you got exposure to the a thirty five those rates are coming down it looks like the defense sector see and you know the range of either legacy program cause you know supply chain tightness has has your outlook changed for defense at all
spk_5: or you know any any programs that you're seeing that of you know turned into head or conversely anything seen a pick up there well in all our i would say the our major oh m programs in the defense sector en route were definitely on the right
spk_3: by platforms so you know if you look at her marine the business
spk_5: where you know it's it's still the number one defense priority is so this is far as i know this is making right yeah submarines right so and the worst worst
spk_18: the wrong there and or can sort of getting stronger
spk_1: and we're up considerably on a submarine business and we should we should even be up more and we are today
spk_17: and are you a little bit constrained by production activities guimaraes clicks know kind of and i nipped or
spk_5: second quarter top line in our margins a bit in the glory but it is what it is and that you know i mean these guys are up substantially for last year
spk_4: so i'm that program is solid we have from the f thirty five yeah it it
spk_3: it's as navy back and off a little bit but i don't know i don't think we're going on this that we have a lot of the platforms
spk_11: at the at sikorski return
spk_5: important long term and and we have palm
spk_4: oh you know important you know weapon systems platforms that job
spk_1: that really form of a good backbone for
spk_5: what we're doing and and what we supply and those
spk_1: those on according to the and people that we speak to him that that is it by these things around
spk_5: yeah they're they're always discussing multiyear contract with us going out several years so you know on that side of it
spk_19: that side of the house it looks it looks fine and on the yum
spk_0: on the spares side of the house where they're just replacing parts for you know equipment they're using in the field but that's that's down of the end
spk_4: and i think it's down to did my my theory on that is that we're not working hard enough to on i'm in that sector
spk_3: inside of rb state to attract or business because they still spend a lot of money replacing carbs and the and we're we're lurked retooling up our our government
spk_0: ah parts organization to
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