SPR - Earnings call transcript Q3 2020 | Spirit AeroSystems Holdings, Inc.

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Operator

Good morning, ladies and gentlemen and welcome to the Spirit AeroSystems Holdings, Inc.

Third Quarter 2020 Earnings Conference Call. My name is Kohl, and I will be your coordinator today. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. to Investor presentation and Relations like Avey, to Analysis. now of Director and would turn over the Ryan I Financial Planning Please proceed.

Ryan Avey

regarding our Chief third to are by Relations Mark and President and and yourself and Welcome in please. Planning Tom and Officer, Tom I'm Thank Gentile; take morning with we will Financial and Avey, limit quarter After Mark me Chief And allow segment, Spirit's Officer, one today Ryan Investor Kohl Vice call. President that ask XXXX participate Spirit's order and comments opening performance your Financial Suchinski. of you, to the In Director we Senior question-and-answer question, to you Analysis. earnings outlook, and Spirit's good to questions. everyone. everyone Executive

earnings remind risks, presentation. Before may we likely in or begin, need we are forward-looking this filings I statement which that the detailed in to any projections end today web at goals you our of and in our release, are involve our the discussion SEC include to in

Officer, we of addition, use the our measures you over In can you discussing and Gentile. turn call earnings broadcast a at slide Tom follow Executive website when With to as results. reminder, non-GAAP our And we would investor.spiritaero.com. to and like disclosures today's to presentation for on our I release and refer reconciliation our presentation Chief that,

Tom Gentile

both caused aircraft industry COVID-XX and XXXX historic to which the you, by call. Thank struggle morning good aviation traffic challenges manufacturers. created Welcome significant pandemic, in third Ryan and continues the air for has reduction earnings Spirit's airlines everyone. The global to quarter with

quickly reduce unfolded, preserve pandemic the costs and took liquidity. to we As actions

than the assembly XXXX Oklahoma McAllister last more programs announced reduction or and made As is and closure quarter's of billion base. difficult which annualized the or recently, headcount commercial which to implemented now Boeing reduction of we aviation will decision we by cost Tulsa the our from $X of We've reduce for XX% our in actions the also Most non-material people. XX%, very machining Most to call, Wichita we facilities. have site, programs. X-axis move the McAlester, does about in work mentioned

program all draft the Our continued been and of flights, by in FAA a European return United and incorporated biggest we from certification making XXX Brazil the been which Union Canada, was the service. the States, the to flight FAAs the with the regulators for encouraged global is joint the board Boeing the Max standardization have and report on Aviation has progress authorities, aircraft news to report the Civil are program. milestones key Completion

on to the We partner XX% the Max of structure. and are proud make

service. seeing safely in are airplane looking back forward We to the

we XXX shipsets. support we a of XXXX, For Boeing current XXX XXX buffer per production requirements. of XXXX, they plan the are Through XX has Boeing's to production indicated be inventory that month at rate deliveries early planning reduce XXXX. by to also aircraft will

which both point not does per month units on plan from XXXX programs for we other permanent remain cash have tax as inventory XX the shipsets a Airbus of units. but will XXXX production, We on usage five of Based and they XX to by rates will cash just benefits, we include positive. of Boeing production be decrease that rates for production flow be to Boeing's The cash improved to our of estimate XXXXs usage. acquired, lag free or Bombardier and assets the about This will the forecasted our reported. buffer negative, estimate significantly

positive cash in free XXXX. to expect We flow be

have position. last actions overall our improve three the helped Over few liquidity months,

$XXX to million. acquire September, late mutually in outlay our agreement of we eliminating capital terminated First, Asco, a

the While we we'll valued tremendous working did for as were respect close, disappointed a we with supplier. deal them and that continue have Asco, not

restructure and XXXX X. million facility took financial and sheet also the repaid we terminated to Second, improve during our October actions credit our balance quarter on loans term the our flexibility. of $XXX We

also raised debt. $XXX cash Bombardier the million sellers, we We of a deal secured from for select $XXX million, And of is assets third, enterprise value. of XX% The reduction the to payment acquisition consists new million closed recently XXX original which a value deal for three actions the and liabilities details provide XX% a government bit will pension of incentives. position in reduction The of $XXX $XXX original $X result an later. from million. cash includes Mark consideration billion. QX further little liquidity million These certain adjusted the

fabrication to close the transfer colleagues strategic operations. infusion. resin process Dallas. Airbus aftermarket thrilled our Bombardier and we in accelerate The defense Belfast, we've welcome transformation that acquisitions, newest includes composite and Casablanca more help content, as providing a cross-country additions by leverages content state-of-the-art The to are AXXX, for known business, Now which low the Airbus the our wing

jet the Spirit market Boeing the with Bombardier's US. Trent in benefit smaller a relationship business. complement air on benefit aftermarket we repairs the are the general existing the narrow-body maintenance Rolls domestic aircraft, their Their exclusivity narrow-body on The increases aircraft. of expand our domestic the of nacelle will Spirit and also Airbus now quicker will with Spirit's higher and XXX around this since backlog and secures focus presence and In largest also unit demand significantly As COVID-XX. acquisition from repairs will business components. work one repair and of from recovery our overhaul programs presence And our travel after suppliers. world BRXXX is Royce and engine in expertise AXXX XX% European

acquisition range an includes a controls, extremely located with aerospace has fuselage trained manufacturing and a cluster. has nacelles class a an structure. in Morocco highly competitive the workforce world engine facility in of addition, flight facility with In The manufacturing experience sections cost and wide

overall technology development well along suited of growth efforts strategy in a with the team for revenue. for in next Spirit's fighter to in Tempest footprint and larger business, Bombardier a our establishes generation Spirit by into evaluation rate the leading XX% XXXX Finally, is defense This way acquisition nicely to expanding strong a also us the partner. robust Tempest the Spirit's for opportunity path a industrial realized UKs UK become capability, aerostructures which participate fits program.

expect Airbus the Boeing the more on account at In than at we the times XX%, based multiple XX% customer and business We remove for of base. the items. The onetime of aftermarket million jets at growth defense of business regional and and XXXX. represents adjusted In XX% a revenue in summary, acquisition accelerated XX.X of revenue, XXXX our X% our estimates, total EBITDA, to XXXX, aerostructures $XXX revised preliminary X%. at expect commercial defense acquisition assets expected our of in Bombardier value from Bombardier XX%, to enterprise diversification

next chain, Our the will adjusted overhead revenue, the plan generate a is be taking expected X.X reduction times. consolidation years. to into synergies supply over facility of the of EBITDA account multiple areas X% and After of in the including three number synergies

to the to preliminary revenue highlight million. chain, a state-of-the-art global in estimate with XX more partner cost-plus the we customers it world. working XXXX was support successfully supply Mark? One the our accretive with over that, the around our is $XXX we Vyaire just on ventilators delivered After care did production facility, ventilators Spirit and partnership COVID-XX. of quarter ventilators Mark of to the detailed system Vyaire to logistics critical team, against basis our results. manufacture between building battle different through the of and Our XX,XXX for other meet the our acquired was was I'll very work The With third than million Bombardier countries. for that demand is $XXX assets for turn life results. take to and customers you saving US to and Spirit contract in proud a quarter

Mark Suchinski

staying you, hope Thank morning and doing and well good everyone. is Tom healthy. everyone I

as Spirit, in teams pandemic. challenges. brought our the are Tom the And his aviation responded a we term stages continue about the near to to overall by industry As this to early in mentioned face changes have recovery. COVID Throughout the well as year, opening well multi-year of expect remarks,

This to as adjustments diversification, stronger our content With future. lower with our with cost in and adjust strategy made and structure work focus, growth our have the long-term of We have levels, assets Bombardier. aftermarket production acquisition adapt of a continue additional to select significant to and on key company. the emerging order is our the position of we're and we'll acquisition closed customers' into pleased to Airbus as to the goal And efforts. going will transformation strategic well

of XX XXX Overall continued This decreased negatively pandemic. quarter quarter to to shipsets to was the rate million XXX Now, COVID-XX same delivered XX% in impacts from grounding commercial last of programs results. last the the shipsets significant for XXX to from quarter primarily the on to period same quarter same impacted Slide production of third reduction quarter the all the the to compared in our across the let's program Max, shipsets in XXXX. XXX continue our Production resulting XXX Revenue the deliveries We of compared by was XXX rates Please COVID-XX. be X. the of year. the move down due and lower year. turn

to $X.XX year. XXXX. negative the positive per EPS of reported EPS retirement we quarter turn per last in in $X.XX charges. the per earnings Adjusted per the to earnings same in per restructuring impacts Slide to EPS of to share, excludes share now of on plan quarter acquisitions, the was compared the costs, negative share Let's $X.XX share, of period compared voluntary share $X.XX same X, non-cash and the Adjusted

production same third related production, costs of The of our the programs, low lower as due commercial period across as a to to as million impacts the rates the declined compared almost excess COVID-XX. year Max of of rate capacity XX costs well operating of to last including quarter margins all result incurred

for headcount the as that production we loss XXX and normalized significantly XXX rates million, exclude future restructuring by driven announced AXXX forward million lower last programs. note over margin, also charges the cost estimates of For in XX total the our as quarter. alignment like and primarily improved to changes well the of quarter, segment recognized to on I'd expenses reductions, operating

This of cost actions the we reduction improvement this quarter-over-quarter the demonstrates many effectiveness implemented year. have

We expect into benefits as the to to move future. these continue we recognize

as forward on AXXX fixed in additional longer programs and and analyst of duration during resulted third million forecasts. XX of evaluated recorded information This the programs to we cost as and our and and a lower well AXXX previous market include the XXX schedule result, as other we incremental and $XX program, losses result, absorption the as the customers, a XXX and quarter. for a on data the adjusted a to from production the results demand programs in XXX in compared the million our quarter, During rate received aAXXX

other on and XX production including due losses rate forward of to million XX programs, the on recognized was primarily we this Additionally, decreases program which XXX program. XXX

Our rate was XX%. approximately year-to-date tax

back last a to discussed normalized the quarter, we rate This carry net years as to As has Act, loss of a rate. our operating XXXX anticipated where our CARES created we result tax pay tax. expected year-t-date favorable compared can

free Slide the XXX cash decrease for cash million This of use by tax. to cash partially quarter year-over-year the of our favorable compared of of source deliveries the turning primarily period across lower XXXX. on XX significantly a working impact Now requirements in negative commercial flow is capital a was of free X, to programs all and flow due offset million, same the

of as quarter also well The flow term costs, used restructuring cash to rate cash XX impacted unwind swaps. interest million million was free third as the XX by loan of

by of Additionally, received Free million $XXX as reach from XXX included the the about XXXX advance MOA cash XXXX, Boeing free cash April with million part Corporation. cash quarter the improved flow the last of quarter. flow third

that higher are a in some fourth and quarter, was quarter quarter. timing as additional use cash quarter-over-quarter as of This taken repeat interest cost favorable what we favorability the slightly in requirements primarily in benefit a debt actions, a result decrease the due be flow We not to working throughout to the our timing fourth from of year, anticipate the expected we reduction certain in improvement deliveries capital as in have from quarter. the this to recognized some on the higher deliveries have than well

million a our will our you restructuring be structure outflow, used We're analyzing in the line in to Excluding be Bombardier, of expectations other in million capital relating flow the which XXX expenditures. Bombardier around with be we around XXX the to There million business. diving of last to quickly quarter. In outflow and for approximately with XXX million words, to for expect full year the XXX XX cash onetime of to in free cash we cash integration million to activities operating into XXXX is the XXX commitments quarter and appropriate million anticipate fourth activity.

Tom XXXX be as in Finally, tax significantly to flow but mentioned excluding continue free XXXX negative, cash benefits. our remarks his cash will improve from

a by receiving the million a expecting benefit beyond year-over-year as cash This benefits of in result and CARES this permitted carry approximately operational are a cash our back tax in and of improvement. We cash of anticipate majority XXX the above provide benefit will XXXX Act XXXX.

turn now and on Let's to balances cash X. debt Slide

Bombardier do those term These quarter credit race of termination reflect debt, for XXXX. credit Prior a billion the balance XXX and additional we we revolver. have financing senior of at with secured acquisition, the with term of the operational liquidity including along Asco connection new used debt the cash of not cash in including termination million in the end with the ended XXX balance just the of uncertainty adjusted announced In XX, closing of X result million sheet cash us as first on the until to and X.X the million. quarter the by loan During termination cash acquisition, debt, activity. with along quarter terminated reflect acquisition B and Bombardier The the our XXX lien and billion we XXX balance million balance loans and quarter, loans. secured were the secured billion. of ample end provides September received financing and including believe of new the debt overall be flexibility. But our of We remaining raise the within senior total cash existing of paid X.X navigate the We prior industry. funds balances approximately the senior capital X.X balance This and the position X off would not reduction, the the adjusted in Asco facility, raised $XXX of the to payoff billion the of for debt. the provides debt new facility, the after We due the debt the second price termination, the liquidity debt, XXX activity the our would with notes that Including improved quarter. the this and at balance million balances billion. term end

XX quarter quarter. year, same was X% on XXX Now lower in period improved AXXX after segment primarily impacts, let's compared and to XXX quarter a XXX the including Operating production of of losses the programs. quarter the XX was of and This of XXX in margins in X. X in million the the margin in the AXXX and compared cume Propulsion profitability positive during in Slide million. and reduction reduction quarter margin on was and same normalized margin basis was due in the programs. change performance of segment adjustments revenue capacity benefits have production forward second of turn decrease including for in quarter XX% AXXX On forward quarter, XXX to lower forward cost the to programs recorded in recorded XX% the XX was our $XX seven negative negative $XX negative a volumes margin a million. same X% due the of on year The fuselage recognized million quarter the in negative in XXXX compared unfavorable And challenging of year. and period to net million lower has XX% down third last been XX% XX% X segment including the XXXX. to in losses profit lower in capacity prior the triple million catch-up program. reflecting to same recognized to on a and the Operating program, estimate favorable In to revenue of adjustments lower XXXX. and lower was the compared losses. losses in the the of the and million completed the same on recognized primarily rates result finally, down and down decrease year. same this to AXXX and quarter million, volumes was of XXX segment of capacity to XX XX% to net segment very decrease primarily initiatives due margin fuselage catch-up segment excess result excess XXX recorded cost forward margin to of The cost losses. compared profitability programs. period of for net quarter of primarily we segment third the XXXX, reversing recognized The the closing, Fuselage million programs a program, for XXX XXX Operating due for production XXX in negative on revenue segment XXX operating the Spirit. the on costs was compared production the recognized was million excess XXX period compared this The to operating volumes XXX, wing forward million primarily cume the program, AXXX The margin of

We have the taken COVID-XX. changes both but brought and on from adapt necessary the actions Max grounding to difficult, to

to million acquisition, with to areas of price future Bombardier a Tom we address risk. making strategies. Bombardier forward for We significant focused stay potential growth plans to to them of our our to reduction, Further, Spirit I Asco mitigate The termination assess continue to us and ability and that, strengthens turn With the to some liquidity part comments. of opportunity big XXX event the along capital will enhances develop and and the future identify action scenarios look continue our challenges. is position for over closing The a will of it the diversification on team. acquisition we back raise and

Tom Gentile

And we closing take Thanks make before comments Mark. questions. some I'll

several from industry reduction include significant the employees credit programs, $XXX programs, in Given levels align taken These XXXX the aviation acquisition to COVID-XX to to original strengthen We low our actions took XX% several facilities, billion resulting brings also also the of of for to to cash with the closure lower jets, of million and loans on process of of repaid our million, also $XXX In accelerates We've acquisition, reduction Spirit the position. and commercial changes from mutually closed also amount. global in Airbus production. actions the transformation, pandemic, cost XXXX and has aftermarket, of secured work total, exceeded our our facility, a million term base. Bombardier of the and processes the improvements manufacturing liquidity cost acquisition other aerostructures a automation assets digitization, cost actions our Morocco. non-labor raise The $XXX The the capital lean terminated defense. Bombardier's manufacturing and reduction engines Spirit first spend. additional or non-material actions improve Asco reduction flow. substantial on business reduction have cancelled of strategic annualized acquisition made substantial $X operations

steps diversified we'll take your very company. emerge more challenging We happy stronger, during questions. these as allow a be have taken With to that, the in time industry, to which will a us significant

Operator

And session. And will Walton our first Please today will UBS. ahead. Instructions] question go from [Operator now Myles at the come question-and-answer this begin with time, we

Myles Walton

Thanks. Good morning.

quarter. issues tackled lot of in a the You've

I you debt detailed, just what segment the like talk was there about margins, even a levels, the be changed was and back breakeven. changes. sort on per that's cumulative curious curious It where disclosure. if and So size one it it's as The underlying looks there, were were margins AXXX. well. about you're breaking right like you wondering sit. looks easy just in then to about the offering maybe And your forward at not double low loss month losses assuming of off excluding the more job could And what five underlying the these you now business forward if down of an seems

Tom Gentile

I'll Well, start off.

the the of in to mean, made but hold. take because have we production terms of actions are obviously In cost you're year-over-year substantial margins, right, the reduction starting deterioration quarter-over-quarter. some reduction I improvements rates,

low margin And improvement. so of at to production, the levels even very start you see

that's seven right a for example, dropping two now, at rate. and six. dropped XXX, we're to for And effectively now about per XXX, at still we're XXX, we've So but month to APM XX,

saw quarter program basis headwinds, at with XX% this even the negative on negative at normalized quarter XXX So all to last X%. the on margins improve a those you

breakeven, we're So so pretty happy that. almost about

We we due the Now, to working AXXX was beginning just assumption six-month September we six. originally to period the five were fact, on Airbus that forward loss in for from it to going rates. the the the on of estimate going But forward made what was to a to really dropped drop When the program in thought loss XX timeframe. at rate was least be. kind of

the took higher anything end of that account drove the to So Mark when that loss quarter. we last than add? predicted we at forward else into

Mark Suchinski

right, through think four a now and in it between the hit when in AXXX was due range. and made year, originally - the we're and to I And to Tom. at five year, to of fact next The the the that the end about mainly really miles going the six forward producing per No, month. half it really was it losses be assessment,

account And had it's with also and of negative fixed that level only to Section our we've a but into also program. not that XX, lower impact production, take leading-edge on so had

Tom Gentile

thank you. Okay, all right,

Operator

from our will question Research. come next Copeland ahead. Carter with Please And Melius go

Carter Copeland

good Hey, gentlemen. morning,

Mark Suchinski

Good morning Carter.

Carter Copeland

there cost about don't there, next and XXX out, benefits call other Bombardier should cash on to a assets Based of specifically, the tax - I you the cash gets but isn't this Thanks. of disclosed in pieces the guidance, on get what we single sort millions that And expect what question year. you I kind what from out guess out, your quite that standpoint from missing? It XXX digit, view? XXX. a year's you've that low hundreds Just sort cash know on of are of are of

Tom Gentile

usage all, of quarter. next the as you quarter a going to it's little be first said higher this Well, million. for XX was priced cash bit Mark know,

with it's go this year, we than our dynamic. but current forecasts should very next XXX into As higher year, production again, be

twin some exceed see don't on headwinds we'll large, quarter and in the of aisle But QX seen expect and usage programs. So by we cache what we've to per kind the QX.

right, XXX cash we you're got So We've as some as better is things that'll positive. start expect particularly And capital depending like programs. it supply look to their there to our expenditures Bombardier put align us we the and to R&D million chain. digging the well it the What be and work as And we on around we benefit at their kind it, as that. right doesn't Bombardier, tax in we of to perhaps hundred with but do synergies, of drive in usage, single and do to digit net include performance. million into still

cash positive, to the it don't your right. for how expect think I next we know benefit we yet year, in terms So is where will be tax analysis including much, cash flow about of but

Carter Copeland

Great, you for Tom. the thank color,

Tom Gentile

Thanks.

Operator

with question from come Robert will Please Credit Suisse. ahead. go next our Spingarn And

Robert Spingarn

you course, on Hi, expect are to But there, to be go in is Mark, now on do it still pieces, before based rates the morning. obscure. rates, rates on and on are revenues, a some clarify, Bombardier we where like good based would down trending going what sounds see question is changes, quarter, plan Tom moving just My we wide current bodies or trough bit the Bombardier. little - no and to because of

first the that's question. So

favorable differently, business? did the deal Bombardier is the question Ford why adjustments value Second somewhat talked on about Bombardier some and Spirit

Tom Gentile

off, that would generated the twin and you low will be as to The next of third offset it that revenue XXX first point. improvement as year, we which is year, the is into bit be slight second to trough of us. our we a made but expect help so or as relates little adjust next standpoint, in move I the we've then year, quarter here, we this trough the the in we And behind from XXXX, year, you revenue Yeah, that the we pressure for tell quarter, will expectation the have saw some next to that. higher here expect isle

move and accountants how think the I here all of as next revenues they 'XX to OEM upward half to been on as to even forward has it provided we based good specifically we're in move data a and So year And stronger into into slightly them back position and relates press the that move pension Bombardier's tell accounting to you release how to you then cash to as to start I then see deal we agreement, characterized, the the us. can their is is liability, proceeds. use and the assess and their calculated liabilities Bombardier the and uses actuaries really that US they and accountants. up obligation our I GAAP our launch is repayable due IFRS. values Spirit or can tell that we

is they but in probably sheet I accounting what relates I the to had of assessment GAAP, some here and value the assumptions finalize So but the that books the when of we balance purchase you, did, accounting we for consistent as different comfortable on our value deal connect will enterprise do wish more the US is. the liabilities October, than dots very we're at with the and our the our establish end we with know deal what right. could establish

Mark Suchinski

in pension they IFRS how to did we down in obligations versus That's the gets valued really the It US difference. GAAP. how

Robert Spingarn

arrangement? have that see the did business - would a to of Or there of what last expect is just normally part that in from Okay profitability part - Spirit? that pricing just similar exclusivity Tom on the the that some kind should on we we you

Tom Gentile

the exclusivity programs. Spirit's that on that accretive Yeah, supplies to source on margins. normal business parts the the have profitability currently Bombardier is agreements profitability programs of on jet their program slightly to Belfast operations well, those we the life And is

Robert Spingarn

much. you very thank Okay,

Operator

Huang Stanley. will And come from our Christine next Please with Morgan ahead. question go

Christine Huang

Hi, good guys. morning,

Tom Gentile

morning. Good

Mark Suchinski

Christine. morning Good

Christine Huang

can what priorities acquired, next you've flow And in profile deal, the discuss closed you that that assets Bombardier free these then you've of the are now the your businesses? For cash the year?

Mark Suchinski

address that and cash business business kind been the Christine this Tom think Yeah, by bit impacted talk it's COVID-XX. I'll the a our of has about business - has the reality their been will I flow, is year. now next But

purchase obviously, revenues we than So we deal the And to when initially lower just closed a ago. few there. anticipated going days there's be the we signed agreement

team, Tuesday, annual a be to it the with of in establish Our next the so financial them with for diving month And teams business and plan and operating couple months. revenues going the the just their the the it company. forward as Monday. on where go of jet things. had hit basis, I've working relates that as parent decent and integration think got synergies, XXXX. previously, my expect ground And to is we or over on into an about a next plan They details former relates side We'll expectations the we business as to

good sight with AXXX. of part we're the And I think pleased got really aftermarket to we've the line of business.

the talk going going going to in it's think We'll just that integration about where Spirit. relates to the it are cash specifically. But yet January. But our really guys details into is it into Bombardier to what pleased value days and to working their we're and go So get acquisition flow the offer synergies. a next early could the that and we you of the year our when we how to as of and guidance business it's for we're not from teams factor relates end earnest really as contribute to proposition really at it in

Tom Gentile

is first integration. in and Right business, for priorities of and foremost terms the Christine

new a ever one, acquisition, So biggest the Spirit's made. it's that big

normal team And a of fairly things. so large HR, all integration things of we the on all terms working information technology, have finance, driving in those

Second lot big Spirit with at part is specifically overhead optimization, and the to we of with synergies. scale capturing chain focus be but critical And going supply on and suppliers. a supply in facilities more particularly integration effort, chain, looking mass that's bring

further AXXX, that those we're is of to entire as we And optimize it prepared And opportunities, course, process, gives the that supply material flow, looking other technology our acquisition forward. infusion leveraging and waste my drive go ways resin is start very our the mentioned to And aftermarket more doubles hard It's and fabrication production production in the competitive huge wing, the be opportunities - some productivity a using the in integrating we'll at business program. get looking and can we than base then big the for more this thing I integrated remarks. Operationally, it. transfer at us so going and existing aftermarket,

Operator

conference please on speaker just the Well, the And is then reconnect pardon is speaking has speakers. The while momentarily. been operator me. me. me. the pardon line operator. call. hold one And Pardon then connected location the the This we This minute to just

Tom Gentile

must we I'm Tom dropped This is again. off. have sorry,

let So moderator, where response could hear Christine's - you they we question? my could or let Did to know, you us perhaps stop? did

Operator

You were question. your giving response Christine's to

that question re-ask would if you I However, reopened to if you Christine's again, like - line, have

Tom Gentile

get over in Well, just we start Christine, me and let make - sure I'll fully. it

Christine Huang

think part the the on mic off. part where off you the question was aftermarket. about your That's cut I dropped

Tom Gentile

Okay, right.

to Bombardier's going revenue. than is aftermarket acquisition, be double aftermarket big more a focus and with our this So us for assets

strong been always surfaces nacelles European on so reversers very very to the the control surfaces, we've repairs control thrust US strong always and market. Airbus flight nacelles for Bombardier on in flight market. historically business thrust and reversers in And the Boeing And was

aftermarket said together growth as of and have and X% those remarks, and very our our our in substantial becomes now complement So prepared revenue we will the future. business. total, aftermarket each double I two come things opportunities in other, than nicely And more my

and for revenue to So from aftermarket start Spirit opportunity to significant income more activity. a realize this becomes

Christine Huang

you. Thank

Tom Gentile

Christine. thanks Okay,

Operator

Jefferies. our Sheila will question Please ahead. Kahyaoglu come next go with And from

Sheila Kahyaoglu

Hi, good morning, guys. And thank you.

follow to on fell up XX. impiety XX% sticking bedazzled Just deal or EV the but so, with maybe the Christine's on Bombardier, question, your

think given you for think the about I the how Tom, do the you going outlooks program guess just So here about how forecasting mainly risk exposure? appreciating, adjusted BizJet XX you've that and those deal through it? and you're And do closed, it's exposure how AXXX

Tom Gentile

that were deal A of the evaluation, in world it, terms market. we looking we certain the obviously, given October, last some and the changes pandemic. struck And Bombardier expectations but the ways changed had with in at few for we the relief looked the

conclusion was the So it at reduction at mutual that if discussion. consideration, you XX% imagine we the you can it arrived valuation, but as cash it a reduction. was And in a look total a rigorous deal XX% a was

that's more you probably mentioned. just So EBITDA in line with that the reduction

the to on Airbus taken had and A to agreeable a supportive sure also discussions we was a the three-way these all make be to pricing is other deliverables to Airbus The outcome. into XXX very was this negotiation Airbus account. come And element always mutually of it in could because with

a into taken things feel in those all deal valuation. we where comfortable So we account ended up with very

full get with really it's a win for particularly business and that Spirit, it's they we get wing. to now have integrated Dallas focused on for in on acquisition, we it's the on terms closed, Bombardier clarity jets. they would making Belfast, for a and so in because a can their now say acquisition workforce they more because business as forward. go certainty win for the transformative AXXX, of Airbus Really the move we win have Casablanca win eight a So And their

Sheila Kahyaoglu

you that thank for for apologies that up, Okay, reversal. clearing

Tom Gentile

you. Thank

Operator

come will question from Harned Doug Bernstein. next with go our Please ahead. And

Doug Harned

increase when this the How you QX you get to you're from on about like what this for a did ready responding? that Airbus they month. do? you. about basically largest is QX rate Spirit the ready year. that AXXXneo had it be QX QX back in out said suppliers they this increase. Thank sent for AXXXneo do to such that moved next think structural be XX you Last an that week been suppliers to the do Good rate XX they in and interested a that a I'm for And from And to that from moved next morning. back standpoint? you planning What for on talked to had What letters should supplier year. They increases mean message it

Tom Gentile

and So of this rate the the half characterize leadership the their to we for is they senior it topic, with year. had protect asked - back the is XX letter they us on calls way

XX. schedule protect the to us for XX. is asked rate But So current they

three means in to or material, tooling And capital increase that sure sight the we that. have and So prepared particularly make of all the months our But would to long that have workforce to to protecting we're those line of two that advance we in place enough of that decide there also to means you that the things does lead into forgings material be notice to if go if move. go to up. And prepared make advance give us effect. rate put like rate they have they

take when talked right new is Now, obviously of with skyline on very created dynamic the their individual can They and take delivery. when will they a have now. market and airlines airlines all based delivery

they means out. us. been to push schedule So their effectively The just months and shifted we they've very the they've that communicated just they're notice that really that advance suppliers. what does about us It impact go lead giving if diligent three it prepared be constructed their have to the way And fact up. time rate doesn't

So requested. have we what done they

we'll they and go rate XX the now decide if to be We half back of in the year, prepared. up, are protecting do for QX

Doug Harned

- - quarter? does is you to that going sure that does kind I sort of guess able rate. thing to is would rate to I'm the trying Or understand. that's up does what of And I'm be you deliver mean to mean would go? whatever that this you exactly - it how tie what not that your in quarter to mean the their set within be that for

Tom Gentile

announce would at during on AXXX, rate a that of if XX, that we period typically time. they delivering rate be But of

call, So he as they said said on October. the think I

XX to prepared October. to in that's in go decide they if So ships October, we'd deliver be

Doug Harned

thank Okay, you. good, very

Operator

Please question from Canaccord. And our ahead. with Ken come go will Herbert next

Ken Herbert

Tom Mark. good and Hi, morning,

Tom Gentile

morning. Good

Ken Herbert

wanted I the or month the rate path now for it of you're provide a detail if on end quarters with catch like rate? if over early sounds five a from sort on any seven sort up see expect to can lag the to provide XX the 'XX, - month, call month can you XXX glide you Tom, more you any that a to if by at 'XX detail Boeing next when and more at the XXX you breaks of of several on

Tom Gentile

for that the that process of by per Boeing here provided at ramping down five in well, said, Right stored rate Right, per be as aircraft going at to guidance January. Wichita. aircraft XX to inventory they now about that to them XXXX. early And by production we're we up month per their think XX will has month month burn lag we're the

planning headcount of have what that don't and will a XX material So what by tells them we're by by and per we're guidance us, be by about we guided our the in that. It's aligned than supply Boeing process XXXX going Within Boeing and other chain be environment other five now we're of but be provide. all will and early we a that's lag orders to a very month. is how there'll getting would right January, for dynamic XX much

so current by in buffer In XXX just units we to down XX we the have the or now, terms like it would based we burn any that schedule, XX catch-up, looks XX on cushion so XXX the then mid of that to production keep And have units, ever. Boeing's and could that production to we'll XX disruption that XXXX. upset system line or buffer the don't

plan. So that's the

Ken Herbert

thank Great, you.

Operator

And our will from question Seifman Morgan. come ahead. go next with JP Seth Please

Seth Seifman

we quick needs AXXX, - where that it just about to real contribute program maybe solid I is Thanks it that's should that go high but much, wonder very at think the And the rate on becomes in margin? now. good Bombardier starts on and before XXX on two it morning. workforce, production with workforce the can size could one to sneak how before then the and at if the I cash go here, the with how current a

Tom Gentile

current said, up by Right, which per month. ready well, our beginning aircraft to XXX, production rate, is XX aligned And I seven as go we're to workforce to is getting on year. the of the our current

January. in I XX XXX the back ready are the transferring that's down, So we some to those to to go ventilator program, we're mentioned program, people that so as winding of

to currently and at of seven, rate a So going XX.

the Bombardier what in decides the guided month. of to AXXX by be XX current four to that month. per to rate ramp in future be go is we're up per fast again, of we'll terms Airbus terms the And In how going up. But prepared about they'll

it need profitability, good. very the out overall, in the profitability. But In dig the program where on points outlook breakeven into will figure to a to it be good is terms of are going to we exactly it's

market I aircraft, is As the air narrow-body already smaller the traffic, example, for flights, the one recovering, levels. it's mentioned, market. XXXX domestic narrow-body above And on of are Russia, of segments and their China

the same levels travel were So we narrow-body well. and the recover And AXXX in overall favor do they narrow-bodies. smaller traffic see like Europe will of will that that with first, the than should is US the expect domestic in past, a very to lower

it, sense I their we think that And will a are. long-term we hit And it. as breakeven be further ready better the rate on what we'll will commitments. So we Airbus those production commitments to into expect points profitability get meet of have

Seth Seifman

Thanks Tom.

Operator

And Raviv our question ahead. with Citi. from next Please go Jon will come

Jon Raviv

you to little thing, for burn breakeven can cash you looks in in do like me clearly specifically important. for very Thanks. cash need to then a see XXXX And need narrow-body It 'XX, to what's more is about significantly be in your control? cash, your in to what see better? that Tom, not What's same control? to Good talk what you Back morning.

But We're constrain therefore would Boeing deliveries You about would talked production Airbus. therefore Max talking lot. deliveries. in your which is slower a their about talking about which constrain 'XX,

not to have you. in XXX? production little cash your control each actually So more on And to a on Thank what's what's you what do rate make control? versus bit it's your hit in

Tom Gentile

What's our as lot control. We've of so those. got you cost need - a to to our control in in execute in not I already need on to we versus control reduction vigilance. what's said, actions are that mean, our we our place, Right, is and them but in what's continue maintain

digitization to productivity mentioned things with factories I drive floor what and our automation, factory automation. need also like We in continue robotics, to

definitely our on cash biggest production to control So we in our are of that the and only the not going XX% is our in those. in the to things be are structure. drive Last revenue. half we XXXX, it flow units Obviously, biggest make Things and rates, particularly of XXX in This really XX control for the are continue going we program, XXXX. driver those produce to our to for year, XXX. XXX is accounted the versus year, drive

of if cash wide-bodies recover very according But flow waiting happen. lot and the could by change. the a like some obviously said is a current projections that is recovers But And this lower to So the said even on things encouraging. and XXX headwinds Max timetable improved has lots the have the rates which no on about AXXX. positive back of that is encouraging, Boeing's Obviously, will to FAA way, of the for environment. supposed next it, to that. lots they needs it drive this still we're about And get from to year, there's for but service. dynamic so things that into it's with promising, year, It's the

more to fly places with domestically we starting uncertainty. China then, of like the to the course, and surge, that. But So pandemic, see need people are more Russia. in And recent creates it

you developing start in also give different some corridors traffic. once travel So that greater the obviously should between which or vaccine and of focus a help development that is place, stimulate see will international private countries, healthcare bubbles these to

reduction for as think well, actions. continue And cost around see frankly, world. So recovers the issues the traffic rates are key XXXX, to to single we production those to need increase our for aisle, air XXXX. I But we've as drive got

Mark Suchinski

Yeah, of XXXs, what think volumes. about we're now we the said, - - at when of just kind rates all production we're of XX reductions Jon to Tom with do trough really to you kind production the this add year, really in delivering right

for will a even creative us. be next deliveries benefits year - and will tailwind modest in some create improvement So XXX

operational the bit drag So said our our is we'll some are capital better capital capital not not some little next you the will as flow quite year, is, in here think we cash we Carter production even expect this of be good related bit XXX taking about tailwind. bit year-over-year, of than that to burn from cash XXXX, you to did activities expect benefit consumed in said of cash a significant of of we of will you reduction XXXX improvement low place, when bit working we repeat a working it, a before where next cash significantly our so a with usage working an it from get half in And volumes, before, math little that be A kind cash and there. on as when repeat, standpoint, year, more see of quarter. and year I benefit flow the of next cost think here

some So we're have go going side, battle cost also think, to on the reduction to but the real continue we opportunities I working capital.

some free good indicated cash or And there But cash recover. XXXX. significant through help is cash the get in us business, and vaccination We we on in generating to that and Tom think job which benefit additional pro half sizable on management, that will will that a some of market said predictions but us a then at of into generate flow con if And can potentially kind help think where will next help XXXX. challenges tax cash in some we're come as front. the XXXX, to - this And looking we can I flow we better cash it's on improvement. do And and we've at about then inventory here some as back additional liquidity operational the losses where flow here. we've to year the onetime operating next going on year some create tailwind give side. back a feel be we year and a we're recoveries starts little year modest will - narrow-body true, work be next the the

Jon Raviv

Thanks.

Operator

And our Shapiro Research. ahead. with next Please question will come from Shapiro George go

George Shapiro

'XX. to that the of number back What in this Yes, good wanted it'll next up call, $X going just on XXX morning. to is about last - year? I revenues you year year. to go know I to Bombardier billion mentioned go do was plus

I'm a So trying just to here as get comparison to what.

Tom Gentile

right, impact about it'll $X see the But to books XXX the from time with right a the this to of then billion, deal, and getting look be period. recovery just you're standpoint last the year COVID $X at we of XXXX year closing Well, the looks billion XXX like again, now. what we're million was that's in to million,

Mark Suchinski

to to XXX, then be so back improvement before to looking we start to more this bit Yeah, a projecting climb George XXX, the just what specific, at start of in year little next year, up see next year. modest we're six to that's year we're for 'XX. to revenue And seven

George Shapiro

certainly, deliver. just the on the got the grounded further And increase because delays lot to per if planes. They've to got Boeing month XXX, they've lot planes of a what rate, XX of a happens

So react that. to you I just see wanted how to

Tom Gentile

at month. our by them we'll rates expecting, five least Well, the lag accordingly. we per their if production we're will than this respond rate are And to costs align and will lower

George Shapiro

very much. thank Okay, you

Operator

Our go David Please from next come question with Barclays. will Strauss ahead.

David Strauss

And well you've production looking rate commentary around Thanks. it's you in just specify for you're could exactly assuming wondering are Tom, then what the in important reflected I Max if manufacturer's platforms own your you're point. their cash above delivery 'XX XXX, - beyond the well 'XX you're got this was Max, that free currently flow. XXX, the to XXX, other delivering delivering into

risk production forward? drop the how actually that those below production your So what have rates much programs to there going stated manufacturer's - you Thanks. is on to drop actually have rates

Tom Gentile

programs rate, they well, other the we when tends it. a on schedule, line Right, deliver to and Airbus to give Boeing. us the up manufacturer's so rate our And to

at rate has next continue what in and of timeframe pretty to are March go a and the to on they've part closely AXXX five, to those. it's And up are go and for Right the been to into all is rate XXX, early manufacturers have The June and aligned. those now those is right which in six. very as two, to timeframe. that'll to XXX, in we are clear Airbus XX. October next then XXX going X.X. right now year, is back now supposed about and go us six asked down a year, at And beyond. so really the the that to May, stated, And XX of XX aligned of at And protect they're the is

they've been to rate said the hasn't January. in go what be ready On the we're to Boeing Max, expect XX production by be XXXX. What to XX XXXX. about specific is early to will in yet they getting And

really And for we them. said haven't we're they've out specific given be wait And really dynamic some want following environment. that guidance the It's We what working does. what Boeing will ahead the see so the really And to and schedule the we're rate market. we'll us. that we of XXXX. And airlines. that sure align hard obviously to given get And They're very with a don't to making they've guidance.

Mark Suchinski

units lot Again, XX our that as into know some Boeing uncertainty XXXX. asked we They've though, of really of and we Airbus, point your up move a produce haven't as of yet. some we're is kind has on control. think built delivered us Boeing the that's outside I Airbus there's that well. David, And has they delivering.

rates take the will are cost reductions, to think to have rate to continue are our there workforce and as production this we've year, with acted further rates. we still And very to additional quickly dynamic. align be forced I focus production reductions if

lower, see of best addressed, have it workforce today know, We be of take is to production go structure of continues situation the you our and have we're that align out and And we to as that rates control. the actions, COVID-XX. to going as because can continue further will structure cost to because here. with marketplace you And are we dynamic highly our thing we it they do variable a cost the just if

David Strauss

working are to, what million including flow guiding negative and an in up, XXXX, - free N Thanks I for as working cash you you XXX you're in quick follow are million XXX capital 'XX? free mean, Mark, what capital, look you kind or capital, number working what burn with the as burn you of capital one working at to in you assuming cash call there?

Mark Suchinski

Yeah.

I cash driving are payable David, items working focus inventory, receivables, on liabilities our the profit would and and capital Those on sharing. accounts big So balance accrued sheet.

David Strauss

and are Okay, positive? you in is those all that the 'XX sum a of think -

Mark Suchinski

Slightly positive, yes.

David Strauss

you. Okay. Thank

Operator

Cowen. go from ahead. Rumohr come with von Please next our question will Cai And

Cai von Rumohr

Yes, thank you much. very

now Bombardier announced first you and it of deal $X XXXX, you I up if October the talking kind of the you a when synergies, in EBITDA back So billion which think of half six were with times XX% it to X.X talking XX% margin. was to to backs for of terms margin. like use close in an you're of six about up EBITDA And EBITDA I XXXX. XXX And a revenues if to the

margin hope? after are as margin revenues substantial you if a And the year, as drop. EBITDA at So building revenue the you we're next a higher fact then looking EBITDA if wouldn't go up, in

Mark Suchinski

our margin of on that you business unreasonable. an when XX% of don't think EBITDA that way, I is Yeah, it any think around I mean, at

of that flow about that cost we three drivers Belfast relates I site can a talked that as standpoint, we take opportunity Tom lot to the advantage cash think we have major or standpoint. from really think from a help profitability standpoint. four it of could from a a us

don't XX% plus that to plus - I XX% can business margins. So think EBITDA unrealistic XX to it's generate assume that

to getting revenues at the look we the As two next years over here. higher back to one

Tom Gentile

in think chain. particularly would I year increase say, we the as drive next EBITDA margin the Cai, supply do can we synergies, we

Cai von Rumohr

of rate, a The guess aerostructures I up could XXXX little But I what is from so the AXXX already up trouble because view to be XX. is have point but is gone revenue what's this, at driving aftermarket, I XX understanding revenues if driving up, flagged look the assume next I at the year.

Mark Suchinski

discussions from Cai, I looking and jet at we said, we're that and Well, to business XXX XXX, next business produce holds, bit of a projecting more as aftermarket We'll if a XXXX the and revenue the lift of XXXs a some few And it year. heads mid AXXX drop, an from side, indicated will relates on more seven the bit talking expect on aftermarket benefits it right. about revenue we're standpoint XXX, when you I'd to on few substantial We that with jet are. right. XXX some units. business outperforms I A as Airbus kind could But that deliver to cetera, little we've around side of we're the where little does of got don't program. in a as relates that things, the et think had of a price, about to value add the some increase our think of

Cai von Rumohr

much. very Thank you

Operator

from come Wolfe Keay go will question Research. ahead. Hunter next our with And Please

Hunter Keay

shipset Hi, that thanks what about you A comment for was was Mark, you and pro getting content follow me ask talked prior I quick forma. XXX to your going on - up to last when on.

So I'd then primary your one about what's productivity? for be curious Thank that. is Tom, second metric you. employee And measure the you how

Mark Suchinski

we AXXX composite integrated potential pylon. some work - wing lot as that package we're about quick AXXX to is, work on today work this have capture statement fuselage the on Sure. works XXX part acquisition to wing, a that Real there's relates box and our new or the it as a propulsion going the complement Hunter. the Tom but of talked on the center fully

Bombardier the starting So we're as content have acquisition. work to we from statement the some work add sizable

Tom Gentile

labor productivity, direct then focus and Hunter Right, employee to productivity. get I'll on

do what metrics unit for So how effectiveness that which do our programs program we continue metric a it's we it's our which unit, across but look call, and that. and whether all the per we across hours do at to was and realization particular every metric, a we a unit, to to major scheduled, we hours is And at did is complete? workload what so what many per today call it was daily do, scheduled today we of - Our work on for what look look those at executing our basis. at something on

Hunter Keay

you. Thank

Operator

with And Bank from will go our next Epstein question Ron come America. of ahead. Please

Ron Epstein

Hey, morning. good

way another on to I Can You've like were these again, downside restructure a we're do below so you the in, once might So better suppose or plus I a be, protection. mean, I way got restructuring about not lifetime happen and point, forth. a something with in contract and your how so how a contracts? this you're protection downturn things thing, more want mean, business situation certain OEs? you discuss it to Is your right. you into is there build so but there to If to the downside the cost do a is because I

Tom Gentile

the thing you they're as we've the But our mean, can Max. program certainly, our And Max indexed before, contract I Well, is would I one said is rate. negotiators. is to say biggest try, good

price terms So conditions protect our that market what probably that the way and that good in contract, the if up. as of these event rates our went And can But in because with. a you downturn, that contract live biggest this with go down, contract that anticipate will, our that just yourself of downturn. can't customers Short always was that's being - terms case, to the of are and things. a in mechanism best the that helped in we with sense work best make we you

normally protect I always build some but mean, on It's longer-term our quality contracts, delivery. large protection in difficult and a is type escalation millennium this as also against focus we situation, for downturns to there's like a once a well. this. in of So

you and what and a time. So can on lots market are parties that and of based different needs both always things do negotiation, what the are of conditions at it's requirements the

Ron Epstein

may 'XX, think breakeven happen is And it XXX one that said you in 'XX. When cash like you I if specifically, on 'XX? now, flow would be guys does I at point,

Tom Gentile

in That XXXX. and get line when to is profitability terms positive we a flow cash of unit

now 'XX 'XX obviously, end period, the time about. to to there was pushed that originally, out of in rates of production Now XXXX, gets with lower that

Ron Epstein

still line same that XXXX it's number. still And

Tom Gentile

Yes.

Ron Epstein

you. Thank great. Okay,

Operator

with question And come Please Noah our from ahead. Goldman go Sachs. will next Poponak

Noah Poponak

to then million XXXX a XX of cash and clarification include quarter? XX XXX think provided, projected that everybody. longer-term said fourth the free the million in question, of does to afternoon, or outflow that quick Hi, burn good Bombardier you've I A exclude million XXX you

Mark Suchinski

I include And on told Bombardier one-time costs guys that will second the not December. in those going of pay we're favorable and to The acquisition does we to our incurred quarter the be the you that business on excluding call. what It is XXX side on eight earnings include and November That's that. will legacy does the those be not Bombardier the think out million. severance cash related XX

Noah Poponak

to versus revenue whether If it's three, and mix program, to things those versus frame in adding I versus, the Right years change spoken in curious by longer through we're differential talk revenue aftermarket we versus you're or how by are know four but looking aftermarket in you've percentage different - out, of perspective. should the just business that just want defense then margin the the the in Bombardier term, mixing I you five you assets, airplane mean, defense pieces margin whether to think it up.

Tom Gentile

lower. year, few still Right, we the the for next Max next as well, is years, program obviously out, go

would revenue the Spirit's Boeing the we again expect in So of to normalize. the production as future percent increase rates

more In but expect. you stable you typically are in go they expect tend terms defense even more are older, But normally downturn. in programs don't our of defense also what higher the margins margins as to mature contracts, they as would high, margin have

XX% kind of in to typically. XX% range, are those So the

said, So defense and about we that's I go business what grew as our defense. And this we would forward XX%. expect on year, as

it year, ahead typically Next higher. XXXX of little what business got XXXX, aftermarket $X expecting thought aftermarket, is billion we're bit are years ago. originally sight margins making and couple we've XX%. of a line which On in a timeframe, And going we to a back

of our of If aftermarket typical higher. be would And be next X% year. business going you it's forward, Spirit go of think XX.X%, as to we margins

it go we bigger grow future. revenues forward, in portion continue will to of and a overall become As Spirit's the

Noah Poponak

Thank you.

Operator

And with next our ahead. Baird. come Please will Arment question Peter from go

Peter Arment

in. afternoon, Thanks thanks. squeezing Tom for you me lot Yes, a Tom, and on details gave Good Mark. Bombardier. of

color synergies, kind to of you give the in kind of you comment timeline when you of that achieve terms X% synergy that. expected the and of on any rough can expect On a can give

Tom Gentile

And changed, to, things going over we the three going stick was of we're in number have but but still a see we X% three-year time a of will good that. period. We're about with full Obviously, we'll feel the years And projection. immediately, original with our opportunity. us take lots lots to start pandemic, X%

Peter Arment

one chain, the kind down? bigger opportunities of that still can Is the biggest supply the call of you

Tom Gentile

in because it's bring more And into that. our lot lot so see as able Bombardier scale be suppliers mass we critical a more Yes, structures, a we we so we'll expect mix, has and get than outcomes. of to the Spirit did competitive and that

Peter Arment

Thanks Appreciate the details. Tom.

Operator

Ciarmoli today ahead. Securities. And our will come Mike from question final Truist with go Please

Michael Ciarmoli

specifically long you've on squeezing cash good high, mean, lead working here. to Hey, declines. to should me I significant back just continues looking for the guess or gentlemen. inventory. and capital just I expect remain lower, all - rates Thanks flow that should at afternoon, we expect we it got material,

contract having go of slowing Looking that line of materials, But get to assets, you where rates? down under new are luck incoming trying a just reduced raw change sense sequentially. see didn't too at a these your specific much can inventory we

Mark Suchinski

ago. you time supply look the cut. are little year you size in to mean, our you to balances is I We half a the slow was business a of quickly From Yeah, the sheet, at it see through XX balance for standpoint, our a schedule down it one what master shut reduced, very a scheduling down. our factor inventory for production series We've rate gone takes us got chain.

So extra inventory there's no we're doubt carrying right now.

We continue some our to what I move as standpoint And that so our team a to a and with consumption And with rest from planning the up year. of improve we standpoint, accordingly, And we'll as consume then we I sure working into expect and will we're and to quarter see we capital parts in the XXXX, move we to higher have inventories hand, the parts down we'll parts, have of our bit have chain a we'll healthy. third we in And they're prepared - to factory supply and benefits year some up slow quarter. fourth we the with we down receipt. inventory go come next chain. lot and continue we need supply a improvement the very to a of chain focus think have because in incoming into through work suppliers next through at is modest make here compared do in standpoint, to working position this diligently for going year end And saw - our to we'll a second. and from between from our balances need were therefore align is want them our late Obviously, XXXX. factor rates. on we supply the our as to the

So balance of both of got that. kind to we really

efficient take inventory levels what We that now. of production out rates think will our advantage help more are or as compared in XXXX more current where making definitely are levels I of in inventory so and with to our will alignment

Michael Ciarmoli

lot thanks perfect, it, Got guys. a

Operator

also call. and at have We'd for session, And great to And may this you lines you this like question-and-answer will day. conclude our disconnect attending time, concluding presentation. now a today's today's your thank

Spirit AeroSystems (SPR) 3 Nov 202020 Q3 Earnings call transcript