Earnings call transcript Q2 2023

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Operator

Ladies and gentlemen, good morning, my name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Barnes Second Quarter 2023 Earnings Conference Call and Webcast. Today’s conference is being recorded and all lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions].

you. Thank now Investor over Relations. will Vice Bill the of President turn I to conference Pitts, And

You begin. may

Bill Pitts

Thank you, call. Abby. Thomas Chief joining Barnes us Financial Good and Hook; morning, and our President Streich. President, quarter thank and second Officer, Senior XXXX Finance Executive Julie earnings Chief With Vice are for me Officer, you and for

O-N-E-B-A-R-N-E-S.com. Relations If at find it can press release, you have you website not corporate received the a section Investor copy onebarnes.com, our that’s of our earnings of on

we referring on be earnings supplement call, the our posted During also slides, will the release to which are website.

certain Our related discussion the measures today provide financial includes investors. been is have non-GAAP GAAP believe measures information helpful These to additional regulations. we in to which accordance reconciled measures, SEC with

on in release our Exchange our press Form the table Commission. part the reconciliation of as a Securities and website submitted find X-K to and will You

are that Be risks the are those of in and forward-looking we results that uncertainties both remarks today’s on at the through differ of opening and are corporate consider today’s section XXXX. statements filings our that the advised our defined in actual website the the cause forward-looking may question-and-answer onebarnes.com. uncertainties certain during to filings to Reform subject Act statements maybe statements Securities call Litigation as risks Please the projected. call, are available periodic from during and materially These and with described These mentioned SEC. make Investor session, Private Relations in

our outlook. questions. the we’ll and of for over Tom? up for review Julie, to provide his performance Tom opening call me details of Then, Let will XXXX open turn After the remarks. a our updated that, call now financial

Thomas Hook

the I a accomplished in margin. performance growth and Barnes. at first advancing Bill improvement like substancial and topline while my delivered the wife adjusted Thank good start this everybody. and The operating Happy in good team second transformation you generating Barnes underway Birthday. quarter to morning simultaneously by wishing just income

drive progress consolidate And across rationalize strategy. although to optimization the integrate, to is opportunities further encouraging and company. Our asymmetric there remain

Our and the in improved execution continues multiphase early be initiative results to improve the progress core quarter. seen can business in industrial some

While industrial at right there the direction. movement level, is is in not desired the performance

being, each am SBU and the taking a the role assumed more For have Solution’s active temporarily I Presidents time industrial with I Molding role.

the when settled would be ultimate is to development, efficient plans. the While an strategic structure structure for organization of execution under industrial support our built it

as was to For industrial, though organic ago, were year orders a times. X.X compared flat book-to-bill approximately

trends and visible we markets previously sequential with on-going increase three performing still for in cavity business has challenges. delivered to end systems molds From discussed be multi a have strong. are a continues row an standpoint, and revenues our in several well macro others quarters seen Automation

product hot our had soft. will Across sheet hand, these seen runners the automotive touch On metal been particularly markets weakness. industrial other lines highlights Julie forming a in moment. in China upon has

a efforts At new Aerospace, from opportunity is strong, is to very key at funnel expect focussing the and Building and remains commercial pipeline improved vibrant commercial the favorable. rich are sales on sales drive customer we performance a growth organic our re-directing a There business. a the we practises generating to acquisition. net market industrial step

productionary improved of activity. on-going both to deliver passenger sales resurgence from the wide-body traffic Airbus. we the benefit will In given continue and aftermarket, business OEM Our increases strong by and Boeing growth

services. aftermarket solutions. agreement grow supply business, our our military vibrancy strategy This enhance, Blue Raven aftermarket to grow our chain Aerospace to aerospace provide for support military help U.S. U.S. scalable Clearly we of grow supports an focus, business. the Raven’s market agreement distribution Barnes with aftermarket through and reached and have support business In Blue military to this our strategy tech-enabled, will products

has this aerospace in we are with the at factors did take quarter. second respect driving margin operating performance There been performance two step dynamic. top-line a to particularly good, adjusted back While

addressed. experienced and have productivity being control we are some challenges First, in within facilities. These actively are challenges our

OEM, margin in I Second, business resulting impact overall we mix fabrication of work That our machining. and half. with and get a pleased more less second on to back on am experienced margin our performance direction from product said, expect and the Aerospace within track performance the

process an transaction through and our conclude global Before expected Barnes we with services fit the for capabilities, update technical the an acquisition regulatory on anticipate programs, MB like Aerospace I remarks, of is MB approval and pending closing as to year. complementary end Aerospace provide progressing highly the is before operation, my product and transaction offerings. The Aerospace. the exceptional with I’d strategic

we business. closing, that will organizational financial driving be immediately synergies. Upon share and more combined integration aspects to also time, detailed operational able begin we will of and At the

acquisition the and about the to like excited We’re brings our balance it portfolio.

core my across There we the actions, related deliver. part whether These do. acquisition progress business considerable close the performance remarks, equation. actions expect are in improvement work value still or integrated and to the same related, To more is prepared to company target transformation all our of much

the investments, execute global and have team systems, these to we simultaneous However, objectives.

We’re to is and appropriate commitment process path on unwavering. the the our

quarter color. Julie discussion Let for call pass me some market as end now as well of second the performance a to over our

Julie Streich

everyone Tom. morning and Good thank you,

supplement. second our on with four quarter slide of of our Let highlights me begin results

were year quarter X%. Second $XXX sales X% period, from up organic with increasing million, prior sales the

basis income up $XX.X $XX.X favorable a on sales. margin had XX.X% Foreign a Adjusted points. and from X% up year million exchange this operating was modest year, ago, adjusted operating was million XX impact of

million $XX.X $X.XX a share, net per second quarter ago. charges basis, income negative share diluted $X.XX of $X.XX charges. $X.XX Net X% and related of and On year restructuring of per of transformation was from $X.XX an in up adjusted share the XXXX net income or $X.XX net Adjusted acquisition excludes per million ago. a $XX.X a income loss to of year compared share per diluted was or related

an up of $X.X million, expense $X.X was $X.XX. impairment of $X.X per Other an Last million, net share $X.X rate. year’s a increase last full higher million in to effective in and of average year, increase a for due compared income to the XXXX. XX.X% adjusted ago XX.X%, income Interest million the driven rate excludes second from goodwill XX.X% pension income. in quarter period charge tax was The negative the XXXX non-operating was year by interest year

a quarter primarily is charge, decrease the XXXX is book tax full not impairment absence the which year tax goodwill rate purposes. deductible second The to in rate from effective due of the for XXXX

Now I’ll turn to our beginning with industrial. segment performance,

ago. X%. sales sales million sales. X% modest quarter, million up foreign $XXX loss For the period. increased prior was a to Favorable operating exchange profit a versus million, approximately the was a from year Industrial’s positive second $XX.X Similarly, were organic of year $X.X

restructuring was points. margin $XX.X adjusted profit Excluding from up in the profit basis of related and current benefited was adjusted of charges pricing XXX operating operating year, of XX.X% productivity. $XX.X million Adjusted transformation XX%, and up positive million operating favorable and

sales With across respect organic sales to Solutions while for and Molding industrial orders organic X%, the businesses, quarter decreased increased our orders X%.

serving markets. and medical, industrial in end with sales. line by markets were Our and the multi-cavity product solid, mold orders, general weakness propelling once personal end care, offset These line runner industrial automotive lifting general care and our hot product systems personal was again

from For orders in while Control expectation. grew were Solutions, down Solutions increase our quarter, now At prior X%. expect organic the organic Molding we organic to down X% sales low XXXX, Motion slightly sales single digits

case end As driven sales orders we was market. metal saw in saw markets, last end the related quarter, we by good forming softness and while sheet transportation the

for sales MCS organic We growth forecast in mid-single continue digit to XXXX.

At Automation, our X%, orders sales were organic while X%. organic down increased

growth sales from for unchanged single our We automation organic expect in view. high prior digit XXXX,

segment, latter margin X.X% consistent For the XXXX, with we XX.X%, the to anticipate sales mid-single for digit our industrial previous growth adjusted with to low operating between organic outlook.

were grew grew XX% while ago. million, sales a from $XXX Aerospace, total. OEM year by At sales XX% X%, aftermarket up sales in

were MRO profit aftermarket, was X%. Operating spare XX%. and XX%, the up parts million, down $XX.X was Within up

restructuring transformation was flat $X.X adjusted Aerospace MB $X.X million, operating charges million, and Excluding $XX.X related related profit of and year-over-year. of essentially charges acquisition million

basis year operating XX%, Adjusted from a points XXX margin ago. down was

benefits impacted profit though product operating As order of to not patterns orders lumpiness relates Tom by is were and offset the and unfavorable quarter, OEM down the were within that in higher volume. OEM concerning. margin productivity by and the of XX% mentioned, business, in the part adjusted mix sales

so X.X times was Book-to-bill healthy order times half, in a the level. in first the quarter and X.X

OEM Our X% of up $XXX million, to an compared as ago. X% increase backlog year XXXX, March grew sequentially and a to from

XX next to revenue this the XX% backlog months. over convert We expect approximately of to

up Our than OEM is more our April outlook view favorable for low XX%, XXXX sales outlook. a

forecast our we mid-teens aftermarket, growth double both prior representing XXXX low for parts, the and digits for MRO of an increase from spare view. For

prior view. adjusted XX%, aerospace for a down small tick our approximately margin Our is forecast from operating

$X With half prior paid provided was relative million in and in respect compared $XX a million incentive to the to lower continue XXXX cash, operating from drivers year period. The first change prior primary capital to the XXXX period. by in compensation to year cash working lower activities be versus

ratio $XX the the versus million year negative from at last we’d our as X.XX times. quarter end the on approximately $X up was a debt-to-EBITDA Free flow expenditures $XX capital sheet, million million million cash and With were balance prior $X was be agreement at considering net-debt-to X.X EBITDA end. the defined approximately times cash credit of basis, quarter position our a When second by our year.

were were XX.X XX.X and period shares. million average shares quarter outstanding Our million second m outstanding diluted shares shares

the we repurchase shares. quarter, During did any not

year slide Turning XX.X%. to for XXXX. X% the expect between of to our updated XX.X% of X to organic outlook our for and We be share operating up let now me details margin sales X% adjusted with supplement,

to XXXX’s of $X.XX X% continue $X.XX XX% expect per We share. $X.XX to range the from up earnings to in adjusted EPS adjusted of

are and closing MB few by be exclude the the in EPS than quarter a are deal pending QX. per associated lower in and Acquisition the the remaining announced adjustments Like costs Acquisition. Please $X.XX note with $X.XX adjusted and adjusted $X.XX the the expect QX activities Aerospace second do Aerospace not and we XXXX to restructuring other last MB anticipated in to related related to $X.XX earnings included pending share cents. the of from date to our We to transformation be in year, third that outlooks. that quarter estimate

between attributable to to and other income of million. We pension effective rate to cash other shares expense restructuring XX Interest $XX million anticipate tax and of CapEx average million anticipated million approximately our $X.X income approximately a excludes approximately of XXX%. of is and XX% conversion be XX approximately million few this note Please A activities. be items. diluted $X approximately XX% full-year outlook

In and gained traction. sufficient efforts quarter pace our remain see generated track. That of and second pockets improvement productivity said, of result transformation hasn’t we the closing, suboptimal good capital we on working

execution. items actively managing revenues, are of with working addressing driving both capital on business We focus delivering and these our core

questions. for call the open now will we Operator,

Operator

Thank We Instructions] you. question with A. D. Matt our first will Summerville Davidson. [Operator take from

line open. is Your

Matt Summerville

morning. exactly comment expand little think in Thanks, much you quarter you you triangulate bit issues and little then feel you on bit and aerospace? Can the Julie, fall? and weight can you maybe maybe they what their a the a in on maybe transitory the why on encountered in nature how that were Maybe if productivity margins net on

Thomas Hook

to Asia Sure, series run inefficient operations. facility of a within of obviously led. across in Aerospace, things of We training ramp significant that some and in facilities all In and into control our in our attempted we management train Matt. are we new employee and seen a amount of through hiring facilities North the have smooth run and American out leadership development production. There

the the improvements were profitability productivity course but Aerospace people, these was headwinds recovery through standpoint. the hiring had Not and we challenges that one good on And the second putting ramp ramps corrected second of recover the we in the the are we’ve won’t getting onboard in year. we’ll a we that but facilities get have ourselves and Those the of in more And and the had two the fully several challenges. reasons We we’re the we’ve all the struggling efficient board struggled the able since Aerospace of productive the people pandemic that and that difficulties to have over two experienced. experienced the saw expect from productivity quarter, take the part teams productivity and with of with another still train over a from the to quarters It’ll of the with productivity. get effectively, We’ve hire have a in next regards teams have balance to on are facilities from there. progressively to while industry. quarter. We quarters, performance the track recovery productive year that of drag the We’re half facilities and still place.

Matt Summerville

in you pricing timing whether can may in there your cost a you the multi-phase you’re what as just about that or to savings of of cadence still QX? has relative restructure the be magnitude saw any is of changed. also then realizing more with to you. not be talk had follow-up, And in And remind you there and Thank the industrial, associated

Thomas Hook

since pricing a last to other reflect progressive energy and year, push-throughs been and continuous labor on with journey to address freight, first I’ll on Yes. pricing the and we’ve inflationary both materials, factors. regards

industrial that we’ve that, pricing terms a some inflationary effects, million had So in of offset of given for hit even business. $XX the us lot past year that to the plus in

the on to for an industrial, in you material price. against more Aerospace, we are Expectations hedges In have not side. particularly pressures, know, item. we have negotiate As do contractual inflationary

continue with our price regards prospectively will practices, We adopt mitigations on to customers. to with

current still basis, reflect the delivered to pricing financial are plans appropriately And for deployment very costs company, a into our manage will them. industrial we on precipitating prospectively continue So customer to carefully, results. our go-forward

course, efforts forward continued markets industrial you productivity that globally across is industrial part what customers we there’ll be as do passed response Of still gains within in lot that, going the on be that an to accountable will we’re for see environment we in efficiency inflationary business effects and of price pricing. to a of sure in ourselves also make But that holding with parallel well. expect can in to

will what the at on Some prices, added of search selling will in targets, the be inflationary some and effect depending is. be that

to of to the three at to Julie the expect be I’ll regard operational go the with financial it. the cadence, for the able We offset summary somewhat that number time. productivity let phases through same With

coming been we’ve fruition. two are remain track, through programs these on those satisfied phases first to For very that

phase out on milestones been is do in to But three for phase products targets You’ve hit all in implementation and left objectives. years timeline track in the as go cost that XXXX to but seen rolling time. earlier phase, there’s milestones cost initiatives. several the previously their reach year, cadence expect the in be second on got we’ve and we on the the committed quarter several on for Julie? three We’ve the the their savings key in Phase savings programs. continue to meeting announced in

Julie Streich

picking up, picking and Matt. Yes, up,

for million. had So year we’ve that that is what now three. Q million peaking expect about the out a coming and we previously we rate in slight same rate for XX stated run me, initiatives. savings remains of the announced run Then we looking XXXX. XX out [Ph] phase XX this That’s million at at stated and be around the the Excuse we of uptick would previously $XX

Matt Summerville

guys. Got Thanks it.

Julie Streich

Yes, no worries.

Operator

from And Oppenheimer. Christopher we our will take question next Glynn with

Your line open. is

Christopher Glynn

guys. Thanks. Good morning,

how that you over curious Just, an that seat development? mentioned Solutions. about. curious came leadership Tom was So taking Was and unexpected Molding the

Thomas Hook

may been several Molding. Yes, of background in lot has my last certainly, decades a Chris, remember, over as the you

unique So insights previous I work from the of have market into kind experience.

in Molding the was in business was a once So was interim leader Solutions not the transition, operational. that there somebody that stepping in

into to of given temporarily I’ve as short time have in leader period given we by to to my the Molding, Solutions, year. decades a significant that I consolidate And up some directly, and strategically to for elected the the actively here progression going Barnes pivotal its that for that in help manage But integrate, importance need the and of rationalize my end SBU, business the direction. recruiting given that mind, business role was I forward, a we’re it our multi an get step and So from into get completed us Molding for to will there running experience integrated felt expect traction to that that end standpoint of immediately. right

Christopher Glynn

of now in composition? all lot wouldn’t is industrial It aware makes in claim and components, a I to retooling the I of strategy are portfolio Solutions a core. extent some to terms then past been a segment often be the describe a you know always And how composition industrial and of part company’s slices of sense. divestitures Obviously, very when of Molding episodes would the but or strategy rationalization you are. of the there’s your part a

could you on if that? curious comment So

Thomas Hook

me board as the as Executive know, Chris, an Officer. strategy set that and understanding top you underlying on under industrialists the of has drive of into carefully SPUs the line allowed year industrial execution a pipeline within and That continued the as and on assessing basis strategies drive the Steve Chief line, SPUs. for particular insights company as in Certainly, pipeline growth as to assessing the their process performance always partnership. our last at and level, commercial very we the focusing SPUs a well the Muller’s primarily are line of with and those actively top in leader departure unique tenure of over the go-to-market kind my of active management bottom business commercial directors to

of we end also consumer market terms choices packaged emphasizing higher part to markets, out looking where we’re are growth of investing and pointed at technologies, in investing. we strengths goods. should make medical biotechnologies, that, call, the There As like be in

is good. our shifting for been those areas the commercial we’ve So focus team’s where growth

been can those particularly some seen market runner me, not in in market. automotive competitive and see more markets. You a we’ve in of strong we’ve the and Asia market, that of as struggles hot excuse automotive Hence,

strategic the balance be portfolio and communicate So health and lines, of strategic based operational looking has our of the we’re in we other within tenure it’s our where past product the are there health our across of positioning company. and but to business at today year it Nothing should of operations choices investment been and and on also future. in assessment are making fairness, over than where under we the active my the

Christopher Glynn

one. to issues exposure in the the related current or portfolio quality Last you. Any product Thank prospectively? Any direct issues?

Thomas Hook

In And content, anticipate would not have that production communicated OEM impact and given this content also would direct side. the so is that on direct Barnes any rates not the the we GTF changing. portfolio, current any does MBRO no not and exposure are current [Ph] plans the Brad have

we obviously it’s yet. that So deal haven’t closed

perfect So we don’t have sight. line complete a of

Aerospace both space the and that overall, think the portfolio will production no prospective think the the But We same that rates be acquisition. for impact MBRO will the current for post MBRO Barnes Pratt GTF portfolio we in for have the

Christopher Glynn

very much. you Thank

Operator

we And question next our from will take Wolfe Walton Myles Research. with

Your line is open.

Myles Walton

Thanks, morning. good

Julie Streich

Myles. morning, Good

Myles Walton

in I and growth to OEM was maybe touch Aerospace the for rate XXs year. for first particular, hoping on the full upload

and year-to-date I you’re talking productivity at plus some challenges. think you’re XX about

So acceleration you acceleration pointed causing curious, second still in The quarter lumpy, what to to there? in just are necessarily weren’t orders is half. but they the the pointing the

So side. maybe just the OEM on to talk the confidence

Thomas Hook

performance with job strategic We’ve space customers. market Well, is Yes, the we’re Myles, the space. and dialogues OEMs. an current new partnering and customers done Barnes and direction year, that in sure. with the with highly acquisition given the been later excellent all fundamentally, of customers of OEM really the Aerospace our MBRO the feedback going perspective a our a of lot customers job combination both close customers, with those lot obviously of extremely through opportunities, MBRO delivery of of prospective from We’ve acquisition of has good a And done have the with in our have up healthy. solid supportive opened the operational terms

operating of been have first positions. to globally. fill struggled we’ve through significant That COVID the a We reemployment has, period, the large teams

as productive. you training, in Second, year know of getting the positions educating with we’ve half struggling, those the first and been

several with we scrap We want much continue And quality getting don’t We want be there’s that can to in poor with output. high to be balance struggle our don’t cost productive output. high. and of a facilities to we how between our

are those we have done being based in rate areas which on internally there’s allow of and output. better that launch training a workforce at a these lot So There’s the to and to ramp us can onboarding. business work

those to We’ll the consistent implemented performance So to get the with industry. continue are out. output proven expectation ramp to is the and improve business our continue and continue we’ll

start from I to an think know, the a be to into year expect tend to an for quarter orders second quarter. and that orders standpoint, that as order to But the overall already, we’ve perspective, lumpy you we from continue had good half.

do in process and the with large those many refreshing partnerships continuously those. of We’re and negotiating OEMs updating we as

to have more that We of year. to over the expect communicate of the that balance

both be I travel. industry revenue on as we number based Aerospace the higher and effect, side, body based the to recovery side, the think of recovery. airplanes performance wide flying well think expect with the just orders and trajectories going an strong and in the the on that’s And So as of single on our international also OEM I not

expect going we’re to wide the is also favorable also. to recovery which that side, us on We body see the continued

because half there’s And that will think We even the combination portfolios you I second and as confident into space broadly were we’re we actually second across balanced that drive recovery. So acquisition, customers, following broadly more linked really know, and be geographies. industry a well MBRO effects feel the of will of linked half.

Myles Walton

way, different first half I just the have was numbers just sure I it a XX% ask to make want that Maybe the growth. to right,

be terms that And a I you obviously those have XX% in that comps, half, second function right are understand half are it’s right? there’s in big slightly to the growth. step but absolute numbers the easier Second still

Thomas Hook

from But standpoint numbers year Let Julie comp answer is question. correct. you’re a the yes, that’s

Julie Streich

we building first when second you over see the half half Yes, the look year-over-year. continue to

to capacity. get lot and be the out Singapore our facilities, OEM door. year, last will and XX% comfortable that the backlog of sales flat and the lender course seen are based and on bump So a order our from we’ve the and half first our the we A that in at it perspective, deliveries, we’re year, book the were clearly relatively throughout have -- sales with we of

Myles Walton

more of year is the you put on improvement year? side, if the the doesn’t but sort half second nice the implies half margins of margins of second on margin the why do that, your that question And in obviously pretty in converse a the the in pressure Okay. guidance

Thomas Hook

customer numbers. efforts of top within in be and well in to renegotiate as seen a have productivity single -- Julie all offsets answer mix And I will that and commercial terms certainly underlying mean with of things. operational as of commercial portfolio initiatives a the answer effects. running It’s in the effect on line have quarter. that ramp output. negotiations combination I’ll there’s sites. Aerospace Myles across across second parallel a let that you those that, of you And facility product to combination on every in point productivity give productivity happens There’s within individual a the But the we we’ve these there’s as go that your the driving

against to see have confidence tailwind expect based effect that executing in net projections the expectation we as the with for mix effect mitigation and a ramp those the productivity -- do the renegotiations as we’ve we So us we given factors we and them. commercial as market the the we’re combination and the occurs is And is execute schedule. on know our those

Julie Streich

enhanced speed, of commercial Yes. from benefit in getting Tom productivity on via up the force facilities enhanced certain natural productivity finer have labor our And proactive just on productivity via expected to will overhead a production that front. addition the output, throughout build point, comes to absorption helps to which also improvements we’re of what the said, as dialogues, in in

Myles Walton

so well Alright, much. Okay. thanks

Operator

with will We our take question Michael from Securities. Truist Ciarmoli next

Your is line open.

Michael Ciarmoli

a Matt’s on Hey Julie, guys. good Maybe Thanks just morning run put on rate the savings. point the for question to taking finer question.

run modeling Aerospace. be next year, margins for and guess this some I maybe of some how you’re move even into million big in kind expansion seems significant assuming of be year? step-up of should guess, -- accounting capturing for that pretty top going to the rate this year, next on I kind volumes looking of not of I like of with year, of that we there’s just in $XX it but margin savings trajectory that savings, kind mean into But kind Just this is at purposes maybe as looking incremental a we margins, and

Thomas Hook

we’ve we project-based, and facilities the communicated Barnes pretty step that had globally in reaching your of X products. and X It’s in phases Closure way think is Industrial we’ve and Michael, in are large-scale that if Phase back a in announced in X XXXX. we’ve completion of

as be a So [indiscernible] we Sterling, effect to year as in Bristol, year get we as getting completion savings exit up into facilities, full Switzerland basis Virginia, we’ll those Connecticut, full had of on and of those we end one Germany we operations. drive coming XXXX. in well as XXXX, or had facilities more Each of a savings will

the savings that driving timing those. But a And I’ll of XXXX. effects are a let kind on the XXXX products executed XXXX, of Julie kind of go lot to are down little and bit being detail more of

years effects. of drive getting the We’re margin just full effects savings to the

little XXXX they’ve in bit feel for Of how as that starting but more are a the looks XXXX, course, in that know, Julie give XXXX, is -- as progress. you quantitative been in execution on projects and you there’s executing can savings quarters

Julie Streich

modeling so from and year, we mentioned perspective, So in exit fair to I out model million XXXX would the it’s the to million then up then ramp in a to $XX think, throughout And enter coming XXXX. with $XX million ramp that I earlier. of Mike, number the XXXX $XX-ish that XXXX,

transparency being things as but And progressing. they’re to total estimates effectively about quarterly we reasons. heard not But projects for yet have for in obvious we’ve keep XXXX managed giving tracking been We we and all these to before, intend about mentioned. are date, how or they’re involved been

this you mentioned, in. progressing are things should plan. at Tom modeling point as be So okay in those effects to time, And

Michael Ciarmoli

take here. guess been with back been And mode to now recovery of to aftermarket recently I we’ve and And labor you up then rates. we’ve of keep presumably this the happen recently presumably to do engines production Okay. There volumes then the sort heard your and in been have productivity? What a to with around sort have bottlenecks just -- Airbus, strong from well? I labor the manifest Aerospace. OEM want Boeing in anything for they have Did and where place elevated. mean as

Thomas Hook

and excellent indirect what all fit it for because Michael, direct and positive is is the of but output. growth the maintain industry aftermarket And obviously labor is both question train -- important way to within I through that of takes of for now is, do output your is factor and requires aftermarket. demand which increasing continued us the and think OEM it from and a pace OEM Well, add kind question very it that production the us and capacity to get capable the to is

and tends with to we demand, training much and come we’ve That that incremental get -- a to itself, which the of had occur not has have to point on numbers in an lag we’ve training onboarding as ourselves growth to there’s our a labor, That’s to higher that affected year productive inflection second in had operations that It more we’ve headwind the catching has all which been been face. quarter. doing in up, by labor. that

management. more We’re leadership aggressive jumping ahead of and it with

and at which get course training industry drag productivity will are but we facilities the the have so and can output ramping that, over facilities second have fix has our mastered we dilemma the the our in the some towards. not, what expectations is maintain Some fairness the that of of already half of ahead created

ramp. the of aware well very We’re

a We looks clear what signal our on from have like. it customers

for all plant So terms in workforce to we us. the of and equipment operational things property doing be prepared are

to mean As in growth a would in the you side. challenges the I terms want we lagger. Aerospace of expect, be don’t is

we’ve headwind we in terms customer face. sure – making it care But a that, we’ve that of it should done the the coming. job didn’t profitability was so that proactively very is knew as to taken a well good had it we not just all on is of but purposely the manage we and facilities at We’re are today, as have. We holding customers

Michael Ciarmoli

the Thanks Got helpful. it. That’s guys. in I’ll back jump queue.

Operator

to And there Bill back call this I at Pitts are the for no further will closing time. turn Mr. remarks. questions

Bill Pitts

we XXXX And of speaking third forward you look us earnings call. all next Thank joining quarter October our you, morning. for you We’d for conference to like Abby. to thank with this in

today’s conclude now will we call. Abby,

Operator

once again, ladies your for Thank and you. participation. call, conference we And you and this concludes today’s gentlemen, thank

You disconnect. now may

Barnes (B) 28 Jul 232023 Q2 Earnings call transcript