DUCOMMUN INC /DE/ — Call Transcript 2025

Hey, everybody. I'm Noah Papanek. I'm the Aerospace and Defense Analyst here at Goldman. Very happy to have with us for our next presentation, Ducommun. And with me on stage here is the CFO, Suman Mookerji. Suman, thanks so much for being with us. Thank you, Noah. Great to have you. Great being here, and appreciate the invite and the opportunity to present Ducommun. You bet. At this conference. Suman's going to go through some slides to kick us off, and then I have some questions. And if anybody in the audience has a question, just raise your hand. Okay, great. All right. So I'll take you through our investor presentation just for the benefit of those who aren't as familiar with the story and are new to it. It will help you get some background on the company and where we are headed. Our usual disclosures, the presentation, of course, has some forward-looking statements in it, subject to risk factors. Please refer to our Qs and Ks for more details around those. So, interesting factoid. Again, for those who aren't familiar with Ducommun, we were founded back in 1849, and we're the oldest company in California. We were originally set up, of course, not as an aerospace company back in 1849, but as a general store in Los Angeles. Our founder, Charles Ducommun, was an immigrant from Switzerland. He was a watchmaker, but he, during the Gold Rush, decided to start a general store, which was a smart idea, selling picks and shovels versus looking for gold at that time. It worked out very much in his favor, and that's how the business got started. We moved into aerospace in the 1930s, selling metals to then kind of the fledgling aerospace industry in Southern California. That business stayed within the portfolio till the 1980s when it was sold. Ducommun, as it stands today, started taking shape in kind of the late 1980s, 1990s, and then in the 2000s as we built up our aero structures business, bought the defense electronics portion of our business, and then also started building up what we call engineered products within our portfolio. I'll talk more about that in the coming slides. The current management team that is in place today came together in 2017, and that's when we kind of started the transformation of the business versus what had been done in the last 165, 170 years. We streamlined the management team, delayered the organization, brought in a performance-driven culture, and so a lot of these good things happened under our new CEO at that time, Steve Oswald, also our current Chairman, President, and CEO, and that really did work well for the company from 2017 through 2020 when the pandemic hit and the business was reset. Again, I'll talk a little more about that, but we had to kind of pivot the business more towards defense as we hit the pandemic, and that started kind of a new chapter in Ducommun as we did that, and also our shift towards more engineered products, which was key to the strategy under the new management team. If you look at the company's performance over the last eight years under this team, you will see that our market cap has grown 4X, and it has grown 4X despite the setback we had during the pandemic and despite the fact that commercial aerospace, at least with regard to OEM production rates, hasn't fully come back to where it was pre-pandemic. Our EBITDA, key driver of value, is up 125% over that period of time. And so financial performance has been really strong, and that's reflected in the performance of the stock, and shareholders have done really well over this period of time. But there is a lot more yet to come, and we still believe we're kind of in the early innings, and we're kind of now at an inflection point in the company's story here where we have significant upside from a number of things that I will talk about here. If you look at our portfolio today, we are currently on an LTM basis, just over $800 million in revenue. Our EBITDA margins are on an LTM basis, 15.5%, but in the last three quarters, we've been tracking at 16%, which we are really proud of and is in line with kind of our five-year plan of growing EBITDA margins. Our remaining performance obligations, a proxy for backlog, is at an all-time record high of $1.03 billion, and we had in Q3 of this year record bookings with a book-to-bill ratio of 1.6, and we continue to see strength in the bookings here in Q4 with what we can see in terms of opportunities in our pipeline, so really a reflection of the strength in the business as we continue to grow it. If you look at the mix of revenues, it is more skewed towards military. We've seen growth in our defense business. In fact, in the last three quarters, we've had double-digit growth in our defense business that has helped offset the weakness in commercial aerospace driven by lower production rates at the OEMs. We do expect that to change as Boeing and Airbus continue to ramp up their production rates, and especially with Boeing and some of the positive commentary that we have been seeing, including commentary from their CFO yesterday, as well as the change that we've seen at Boeing under their new leadership is very encouraging and is promising for us at Ducommun. Within our commercial aerospace business, we have more significant exposure to narrow-body aircraft. You can see some of the platforms on the right side of the page. We have exposure to the 737 MAX, the A220 that are kind of good, strong platforms, as well as the A320. So we're on the right platforms. On the twin aisle side, we have exposure to 787. That's the primary wide-body exposure that we have. So again, a good platform to be on, and so we feel really good about that. And then we have some business jet content as well, mainly with Gulfstream, which has been growing nicely. You can see our primary customers are the aerospace aircraft OEMs, as well as tier ones in commercial aerospace and the defense primes in the military and space segment. Moving to our products, right? So we have two financial reporting segments, the electronics business as well as the structures business. And you can see the different products that make up each of these reporting segments. On the electronics side, we make ruggedized interconnects. We make complex circuit card assemblies, as well as kind of compiling these different electronics into enclosures and building kind of the next level up in the value chain, building these boxes of electronics. Most of these products are going into the defense industry. And we've had strong growth on that side. We continue to see strong bookings on the defense side, especially with missiles and radar systems, which is a growing franchise within our portfolio, and these products primarily go into that end-use market. We also have some proprietary product businesses within the electronics business, and these include our human-machine interface products. These are push buttons, switches, bezels that are within the cockpit of a military or commercial aircraft. We typically get sole-sourced and specced in and have very strong margins with these products. We also have a lightning protection product line, a business we acquired in 2017 called LDS, and they have a significant share of the lightning protection market for radomes, and that's been a great business for us, and finally, our motion control business, where we make motors and resolvers for, again, cannot fail applications within the defense industry. And then on the structure side, we have the more traditional aero structures type of businesses, which include titanium hot forming, titanium superplastic forming, which we believe there are only a handful of suppliers globally that are capable of manufacturing. These are formed out of titanium sheet, very complex contoured metal parts, titanium parts that we sell into Boeing, into Airbus, and Spirit. And we're really proud of the technology we have in order to build these parts. So while that still kind of falls within what we would consider contract manufacturing, it is kind of a very niche capability that few have. We also have an aluminum stretch forming business where we make most of the fuselage panels on the A220. And we have also, in the past couple of years, won work with fuselage panels on the 737 MAX. So that's kind of the aluminum stretch forming business. And then we have more engineered product businesses within the portfolio as well, which include our ammunition handling business, a business called Nobles that we bought back in 2019, Magnetic Seal, which is a business called Magnetic Seal we bought in 2021, and then extruded thermoplastics for the interiors of aircraft. And finally, aerodynamic enhancement products for rotorcraft, a business called BLR Aerospace we bought in 2023. So where is Ducommun headed, right? I talked initially about the things that the current management team did under Steve Oswald's leadership coming in between 2017 and 2019, and then the pandemic hit. But as we were coming out of the pandemic in 2022, we felt like the time was right for us to go out and communicate a five-year plan to the street. We reviewed this with our board in late 2022 and then went and presented to the street in December of 2022, what we call our Vision 2027. That included growing revenues from about $700 million back in 2022 to close to $1 billion by 2027, and also expanding EBITDA margins from 13% back in 2022-18% by 2027. We have made great progress in getting to those targets while revenue may have been slightly softer than we had anticipated back in 2022, given where commercial aerospace and build rates have panned out so far. On the EBITDA margin front, we have been tracking at 16% here in year three of our five-year plan. We're on our way to get to 18% from 13%. We're really proud of that. We're well positioned to get to that 18% in 2027. What are the key drivers or investment highlights for Ducommun and also kind of the enablers of this Vision 2027? I talked about us wanting to grow our engineered products. That's a key part of our strategy. We like this portion of our business where we own the design IP. We're specced in. We're sole-sourced. We have access to the aftermarket. And the aftermarket portion in itself is a sizable portion of the business. And any good aerospace business needs to have strong aftermarket. And we had less than we probably had 5% or 6% aftermarket in our business back in 2017, and that has grown significantly. Engineered products was less than 10%. It was 9% of our portfolio back in 2017. We took it to 15% of our portfolio by 2022 with a target of getting it under our Vision 2027 strategy to more than 25% of our business by 2027. And today, where we stand, we are already at 23% of our revenues coming from such engineered products. Again, as I said, these are products where we own the design IP. We're sole-sourced. We're specced in. And that's a great position to be in. And we want more of our revenues to come from these kinds of product lines. We've also, for the non-engineered product portion of our business, looking to add value by taking cost out. And this has been driven by, in the past year to two years, by shutting down some of our existing footprint and consolidating that manufacturing footprint to be able to take cost out. We have shut down in the past year a facility in Monrovia, California, as well as one in Berryville, Arkansas. And we have moved this work to existing facilities in the U.S., as well as to our facility in Guaymas, Mexico. And we've had great success doing that. We're kind of at the tail end of those product line moves. We expect those product lines to ramp up production here over the course of Q4 and into 2026 and generate significant cost savings for the business. We've said we expect $11 million-$13 million in synergies from these moves. We've seen close to $4 million of that already in our P&L, but the remaining $7 million-$9 million is expected over the course of 2026, which will provide us with that margin accretion that we expect to see to get us to 18% and beyond. M&A is also an important part of our strategy, especially around the engineered products, as we try to grow that as a percentage of our overall revenue mix. As I said, we were now at 23% of our revenue coming from engineered product. We want to take that to 25% and more. And we have successfully done five acquisitions under the current management team over the last eight years. We've successfully integrated them, grown the EBITDA, and that has helped not only the revenue mix, but has also been a key contributor to expanding our margins over this period. We are a tier one player. You saw we sell directly into the aircraft OEMs, as well as to the tier ones and the defense primes. We are well positioned with the platform content that we have to benefit from the commercial aerospace recovery, which we think is on a firm footing today. But we definitely will be a beneficiary of that over the next couple of years. And then the defense business has been really strong for us, not just through the pandemic, but here, even in 2025, we have seen double-digit growth in our defense business in the last three quarters. And we continue to see strong order flow, and the future is very promising for us, especially with our missiles and radar franchise, which has been growing high double-digit. Final couple of points there, our manufacturing services, the structures portion of that business, as I said, we do a lot of titanium forming, which a handful of players globally are capable of doing. When it comes to the electronic side of our business, again, we have a very efficient, low-cost domestic footprint that is able to build these electronic products that need to be made here in the United States for defense purposes. And we've had great success taking work out of our customer's factory and bringing them and being able to cost-effectively produce them in our factories and make that a win-win both for ourselves and for our customers. So that's been a big plus for us, and we'll continue to drive value from our manufacturing services businesses, even as we look to grow our engineered products. And the last point is tariffs. I mean, that's been a hot topic here over the past year. And for us, we are in almost kind of a perfect position when it comes to tariffs, given our manufacturing footprint today is primarily here in the United States. 95% of our manufacturing or our revenues come from our U.S. facilities. And if you look at our supply chain, that is as well largely domestic. And so our exposure to foreign suppliers, as well as selling to foreign countries, is limited. And we have seen negligible impact to our P&L so far through Q3 and even here in Q4 so far as a result of tariffs. So we feel really good about that. I want to leave some time for Q&A. So this presentation is available on our website, and you can see some additional detail behind each of these bullets in kind of the following pages if you were to kind of go through that. But I'll finish here, and then we can go into Q&A. Excellent. Thank you, sir. It'd be great to hear you just talk more about the process of moving into engineered products. How do you actually do it? Because it's kind of the whole point of being in engineered products is it's a higher barrier to entry, less competition, less commoditized, and that has better growth and pricing and margins over time. But that would make it sound kind of hard to break into. So how are you doing it? How much of it is organic versus inorganic? Maybe you could tell us more about that. Yeah, that's an excellent question. So it is a mix of both organic as well as inorganic growth. A lot of the growth over the last eight years has been inorganic. We've done five acquisitions that have contributed to the growth in our engineered product portfolio. But over this period of time, we have invested in engineering resources and sales resources to develop the pipeline of new products as well that will, over a period of time, drive organic growth. And we've had good success with that. We've had good success of that with the engineered product businesses that were part of the portfolio prior to 2017. We have grown our HMI business, a human-machine interface business, with additional products that cater to the aftermarket. We have grown our RF products. But then we've also, with our acquisitions, and I'll give you an example, the business called Nobles that we bought in 2019, they made ammunition chutes when we bought them. And we have gradually, over the last seven years, moved them into entire ammunition handling systems. So not just the chute, but also the magazine and some of the other ancillaries that make up the full system is something that we now are able to design and build. And we have been able to win content on platforms now with that entire integrated system. So we have been able to take the ship-set content from what would have been a few thousand dollars to tens of thousands of dollars and been able to grow the business. So that's an example of how we have kind of organically grown over a period of time. Yes, it takes time. But once you win that business, then you enjoy it for several years. Interesting. Okay. You're a little bit ahead of the 25% in 2027 plan for engineered products. Do the margins track right up to the same pacing of the engineered products plan? As we look longer term beyond Vision 2027, have you guys thought about where the engineered products mix can go and what that means for margins? Absolutely. Yes. The margins are certainly being driven by the growth in engineered product. That has been a key driver of our margins here over the last few years. And we are now expecting over the next couple of years to see strong growth in the non-engineered product portion of the portfolio as well. With the strong growth in defense and the strong recovery that is expected in the build rates over the next couple of years, we do expect the non-engineered product business to also grow nicely, which is good. We like growth in that portion of the business as well. But what that will mean is that we've got to drive acquisitions to be able to continue to take that mix to 25% and beyond, which we feel good about. We haven't done a transaction here in the last 24 months, but we are actively in the market. We're looking at a number of opportunities in dialogue with several target companies, both as part of kind of bank run processes as well as our own proprietary pipeline of acquisition opportunities that we are pursuing. So we feel good about being able to do a few transactions here that will help us get to 25% and beyond. In the longer run, the strategy, and we have told the street that we are going to come with our kind of next phase or next phase of Vision 2027 in the fall of next year and communicate that to the street. But that will be an update of 2027? That will be an update. That will be further out. That will be something further out, right? So that'll take us kind of beyond 2027. Okay. And sorry, when is it? In the fall of 2026 is when we plan to communicate that. But it certainly isn't going to be a deviation from our engineered product strategy. That is core to growing the business. That is core to expanding margins. And I think we can get to 30% plus, eventually 50% plus, and possibly one day be an entirely engineered product company. Okay. We will follow along. All right. You referenced Boeing and maybe their production cadence improving. Can you talk a little bit more about what you're seeing there? And your aerospace growth rates have been negative, which seems partially or entirely due to inventory destock. Is that correct? Are you able to tell when that ends? Right. We think that there will be some element of destocking through the second half of next year. Part of the reason for that is there is destocking at Spirit and Boeing. There is also some destocking at our end, as we had maintained production rates in order to have our factories operating at a level load versus kind of gyrating between varying production rates month to month. That's not a very efficient way of producing. We have been here in 2025, if you look at our revenue, we've probably been kind of in the low 30s on average across the different products on the MAX. We've been shipping in the mid to high 20s. That does mean that there has been some accumulation, which also will need to get destocked. I think we feel really encouraged by what we are seeing out of Boeing and with the Spirit acquisition expected still to close here by the end of this year. I think there are more good things to come out of Spirit, and we're looking forward to those two companies coming together and creating more stability in the demand for us. Hopefully, the destocking will happen sooner than we expect. That's kind of what we're seeing right now. Okay. Your defense business has been growing double digits. Aerospace original equipment supply is way below demand, maybe half of demand. The growth rate that should occur there is pretty high. It has to happen. Then you have to get through the inventory destock, but it should be pretty high. It'll have very easy comparisons. So it would look like your aerospace business could at some point have a double-digit growth rate. Is there a reason I should not expect, therefore, at some point over the next few years for Ducommun and Topline to have a double-digit growth rate? That is not an unreasonable expectation. I think once we get past the destocking, there is certainly going to be an inflection point on the commercial aerospace growth rate. And that, accompanied by the strong demand we're seeing on the defense side, should really be a catalyst to very strong growth for the company. Okay. Great. We have about five minutes left. I can check to see if there are any questions from anyone in the audience here. Yes, here in the middle. Would you mind grabbing the microphone behind you just so we can? Oh, sorry. I didn't realize. You're okay. Should I start from the beginning? Yeah, go ahead. Okay. Cool. So my responsibility is investments in aerospace and support U.S. companies to expand into the Asia-Pacific market. So I have two questions. One is about the regional exposure. I know that you mentioned 95% of the revenue currently comes from North America, but I'm curious to understand what the remaining 5% is and how you see Asia-Pacific market as a or how you see Asia-Pacific market strategically. My second question is, you mentioned some of the destocking in the commercial aerospace area is expected to happen next year. But given your close work with the major OEMs, I'm curious to learn a little more about how you manage inventory levels and production planning within your company, especially in the commercial aerospace area. Thank you. All right. Okay. Thank you for your question. While we don't sell a lot directly into Asia-Pacific, we do have some content on Airbus platforms that goes into an intermediate supplier before it goes to Airbus, an intermediate supplier in China. Most of our products are being shipped to customers, mainly in North America and to Airbus and in other parts of Europe. But we're supplying components into products that are eventually going to Asia-Pacific. The growth in passenger traffic and the demand for aircraft is definitely something we're benefiting for. There is an indirect connection between our growth and growth in Asia-Pacific, even though we may not directly sell into that part of the world. With regard to your question around production planning and the growth rate, so we and inventory, right? So as we were coming out of the pandemic, we felt like there was a need for us to make a strategic investment in inventory. There was a lot of disruption in the supply chain. So it was difficult for us to, and it was hard for us to make sure that we had all the materials we needed in order to satisfy our customers' demand. On the other hand, we also had some erraticness in the demand from some of our customers, especially on the commercial aerospace side, with production rates kind of varying, coming to a stop and then restarting and just a lot of oscillation. So having the right amount of inventory, maintaining our factory at a level load in order to be efficient in what we were building was really important. That's part of the reason why we have higher than the typical amount of inventory we would like to carry on our balance sheet. That was a good decision on the part of the management team. It allowed us to maintain delivery in a fairly flawless manner through the last four or five years. And it positions us well for the ramp-up going forward over the next two years. And it also presents an opportunity from a free cash flow perspective as we unwind this investment in inventory over the next couple of years. And as production rates go up and we destock, we're going to see better cash flow conversion. And that's going to be a plus side for us. Suman, maybe just with the minute or so we have left, M&A is an important part of the strategy. You talked a little bit about it, but I'm curious. It's surprising to me that there hasn't been more M&A and that it's been somewhat quiet recently. And maybe you could talk about why that's the case, what the pipeline looks like right now. And is it more competitive right now than you maybe would have expected? Because TransDigm and HEICO, and there are these other acquisition platforms that have been in the market for a while, but now Loar went public and is larger. And I think there's some other private companies getting larger that have the same model. Is it harder to do deals than you thought it would be? It is definitely competitive. I mean, most of these players have been around for the last eight to 10 years. And so we've seen them as we've done transactions. But you're right that there are a lot of folks that are chasing these assets. We have really ramped up our M&A capability in terms of being actively pursuing things just on our own as well, not just relying on the bank flow, but we have just been developing, spending a lot of time over the last few years developing that proprietary pipeline. So what we can see based on that is a sufficient opportunity for us to be able to close on transactions here over the next couple of years. In the lower mid-market, we just haven't seen that level of activity for engineered product businesses, but the outlook is really good. So we feel good about being able to do deals going forward. Okay. All right. We just hit the double zero on the shot clock up here. So why don't we wrap up there? Suman, thank you so much for being with us. We really appreciate it. Thank you, Noah. I appreciate the opportunity.

Speaker 1: Hey, everybody. I'm Noah Papanek. I'm the Aerospace and Defense Analyst here at Goldman. Very happy to have with us for our next presentation, Ducommun. And with me on stage here is the CFO, Suman Mookerji. Suman, thanks so much for being with us. Hey, everybody. hey everybody I'm Noah Papanek. i'm noah papanek I'm the Aerospace and Defense Analyst here at Goldman. i'm the aerospace and defense analyst here at goldman Very happy to have with us for our next presentation, Ducommun. very happy to have with us for our next presentation ducommun And with me on stage here is the CFO, Suman Mookerji. and with me on stage here is the cfo suman mookerji Suman, thanks so much for being with us. suman thanks so much for being with us

Speaker 3: Thank you, Noah. Thank you, Noah. thank you noah

Speaker 1: Great to have you. Great to have you. great to have you

Speaker 3: Great being here, and appreciate the invite and the opportunity to present Ducommun. Great being here, and appreciate the invite and the opportunity to present Ducommun. great being here and appreciate the invite and the opportunity to present ducommun

Speaker 1: You bet. You bet. you bet

Speaker 3: At this conference. At this conference. at this conference

Speaker 1: Suman's going to go through some slides to kick us off, and then I have some questions. And if anybody in the audience has a question, just raise your hand. Okay, great. Suman's going to go through some slides to kick us off, and then I have some questions. suman's going to go through some slides to kick us off and then i have some questions And if anybody in the audience has a question, just raise your hand. and if anybody in the audience has a question just raise your hand Okay, great. okay great

Speaker 3: All right. So I'll take you through our investor presentation just for the benefit of those who aren't as familiar with the story and are new to it. It will help you get some background on the company and where we are headed. Our usual disclosures, the presentation, of course, has some forward-looking statements in it, subject to risk factors. Please refer to our Qs and Ks for more details around those. So, interesting factoid. Again, for those who aren't familiar with Ducommun, we were founded back in 1849, and we're the oldest company in California. We were originally set up, of course, not as an aerospace company back in 1849, but as a general store in Los Angeles. Our founder, Charles Ducommun, was an immigrant from Switzerland. All right. all right So I'll take you through our investor presentation just for the benefit of those who aren't as familiar with the story and are new to it. so i'll take you through our investor presentation just for the benefit of those who aren't as familiar with the story and are new to it It will help you get some background on the company and where we are headed. it will help you get some background on the company and where we are headed Our usual disclosures, the presentation, of course, has some forward-looking statements in it, subject to risk factors. our usual disclosures the presentation of course has some forward-looking statements in it subject to risk factors Please refer to our Qs and Ks for more details around those. please refer to our qs and ks for more details around those So, interesting factoid. so interesting factoid Again, for those who aren't familiar with Ducommun, we were founded back in 1849, and we're the oldest company in California. again for those who aren't familiar with ducommun we were founded back in 1849 and we're the oldest company in california We were originally set up, of course, not as an aerospace company back in 1849, but as a general store in Los Angeles. we were originally set up of course not as an aerospace company back in 1849 but as a general store in los angeles Our founder, Charles Ducommun, was an immigrant from Switzerland. our founder charles ducommun was an immigrant from switzerland He was a watchmaker, but he, during the Gold Rush, decided to start a general store, which was a smart idea, selling picks and shovels versus looking for gold at that time. It worked out very much in his favor, and that's how the business got started. We moved into aerospace in the 1930s, selling metals to then kind of the fledgling aerospace industry in Southern California. That business stayed within the portfolio till the 1980s when it was sold. Ducommun, as it stands today, started taking shape in kind of the late 1980s, 1990s, and then in the 2000s as we built up our aero structures business, bought the defense electronics portion of our business, and then also started building up what we call engineered products within our portfolio. I'll talk more about that in the coming slides. He was a watchmaker, but he, during the Gold Rush, decided to start a general store, which was a smart idea, selling picks and shovels versus looking for gold at that time. he was a watchmaker but he during the gold rush decided to start a general store which was a smart idea selling picks and shovels versus looking for gold at that time It worked out very much in his favor, and that's how the business got started. it worked out very much in his favor and that's how the business got started We moved into aerospace in the 1930s, selling metals to then kind of the fledgling aerospace industry in Southern California. we moved into aerospace in the 1930s selling metals to then kind of the fledgling aerospace industry in southern california That business stayed within the portfolio till the 1980s when it was sold. that business stayed within the portfolio till the 1980s when it was sold Ducommun, as it stands today, started taking shape in kind of the late 1980s, 1990s, and then in the 2000s as we built up our aero structures business, bought the defense electronics portion of our business, and then also started building up what we call engineered products within our portfolio. ducommun as it stands today started taking shape in kind of the late 1980s 1990s and then in the 2000s as we built up our aero structures business bought the defense electronics portion of our business and then also started building up what we call engineered products within our portfolio I'll talk more about that in the coming slides. i'll talk more about that in the coming slides The current management team that is in place today came together in 2017, and that's when we kind of started the transformation of the business versus what had been done in the last 165, 170 years. We streamlined the management team, delayered the organization, brought in a performance-driven culture, and so a lot of these good things happened under our new CEO at that time, Steve Oswald, also our current Chairman, President, and CEO, and that really did work well for the company from 2017 through 2020 when the pandemic hit and the business was reset. The current management team that is in place today came together in 2017, and that's when we kind of started the transformation of the business versus what had been done in the last 165, 170 years. the current management team that is in place today came together in 2017 and that's when we kind of started the transformation of the business versus what had been done in the last 165 170 years We streamlined the management team, delayered the organization, brought in a performance-driven culture, and so a lot of these good things happened under our new CEO at that time, Steve Oswald, also our current Chairman, President, and CEO, and that really did work well for the company from 2017 through 2020 when the pandemic hit and the business was reset. we streamlined the management team delayered the organization brought in a performance-driven culture and so a lot of these good things happened under our new ceo at that time steve oswald also our current chairman president and ceo and that really did work well for the company from 2017 through 2020 when the pandemic hit and the business was reset Again, I'll talk a little more about that, but we had to kind of pivot the business more towards defense as we hit the pandemic, and that started kind of a new chapter in Ducommun as we did that, and also our shift towards more engineered products, which was key to the strategy under the new management team. If you look at the company's performance over the last eight years under this team, you will see that our market cap has grown 4X, and it has grown 4X despite the setback we had during the pandemic and despite the fact that commercial aerospace, at least with regard to OEM production rates, hasn't fully come back to where it was pre-pandemic. Our EBITDA, key driver of value, is up 125% over that period of time. Again, I'll talk a little more about that, but we had to kind of pivot the business more towards defense as we hit the pandemic, and that started kind of a new chapter in Ducommun as we did that, and also our shift towards more engineered products, which was key to the strategy under the new management team. again i'll talk a little more about that but we had to kind of pivot the business more towards defense as we hit the pandemic and that started kind of a new chapter in ducommun as we did that and also our shift towards more engineered products which was key to the strategy under the new management team If you look at the company's performance over the last eight years under this team, you will see that our market cap has grown 4X, and it has grown 4X despite the setback we had during the pandemic and despite the fact that commercial aerospace, at least with regard to OEM production rates, hasn't fully come back to where it was pre-pandemic. if you look at the company's performance over the last eight years under this team you will see that our market cap has grown 4x and it has grown 4x despite the setback we had during the pandemic and despite the fact that commercial aerospace at least with regard to oem production rates hasn't fully come back to where it was pre-pandemic Our EBITDA, key driver of value, is up 125% over that period of time. our ebitda key driver of value is up 125% over that period of time And so financial performance has been really strong, and that's reflected in the performance of the stock, and shareholders have done really well over this period of time. But there is a lot more yet to come, and we still believe we're kind of in the early innings, and we're kind of now at an inflection point in the company's story here where we have significant upside from a number of things that I will talk about here. If you look at our portfolio today, we are currently on an LTM basis, just over $800 million in revenue. Our EBITDA margins are on an LTM basis, 15.5%, but in the last three quarters, we've been tracking at 16%, which we are really proud of and is in line with kind of our five-year plan of growing EBITDA margins. And so financial performance has been really strong, and that's reflected in the performance of the stock, and shareholders have done really well over this period of time. and so financial performance has been really strong and that's reflected in the performance of the stock and shareholders have done really well over this period of time But there is a lot more yet to come, and we still believe we're kind of in the early innings, and we're kind of now at an inflection point in the company's story here where we have significant upside from a number of things that I will talk about here. but there is a lot more yet to come and we still believe we're kind of in the early innings and we're kind of now at an inflection point in the company's story here where we have significant upside from a number of things that i will talk about here If you look at our portfolio today, we are currently on an LTM basis, just over $800 million in revenue. if you look at our portfolio today we are currently on an ltm basis just over $800 million in revenue Our EBITDA margins are on an LTM basis, 15.5%, but in the last three quarters, we've been tracking at 16%, which we are really proud of and is in line with kind of our five-year plan of growing EBITDA margins. our ebitda margins are on an ltm basis 15.5% but in the last three quarters we've been tracking at 16% which we are really proud of and is in line with kind of our five-year plan of growing ebitda margins Our remaining performance obligations, a proxy for backlog, is at an all-time record high of $1.03 billion, and we had in Q3 of this year record bookings with a book-to-bill ratio of 1.6, and we continue to see strength in the bookings here in Q4 with what we can see in terms of opportunities in our pipeline, so really a reflection of the strength in the business as we continue to grow it. If you look at the mix of revenues, it is more skewed towards military. We've seen growth in our defense business. In fact, in the last three quarters, we've had double-digit growth in our defense business that has helped offset the weakness in commercial aerospace driven by lower production rates at the OEMs. Our remaining performance obligations, a proxy for backlog, is at an all-time record high of $1.03 billion, and we had in Q3 of this year record bookings with a book-to-bill ratio of 1.6, and we continue to see strength in the bookings here in Q4 with what we can see in terms of opportunities in our pipeline, so really a reflection of the strength in the business as we continue to grow it. our remaining performance obligations a proxy for backlog is at an all-time record high of $1.03 billion and we had in q3 of this year record bookings with a book-to-bill ratio of 1.6 and we continue to see strength in the bookings here in q4 with what we can see in terms of opportunities in our pipeline so really a reflection of the strength in the business as we continue to grow it If you look at the mix of revenues, it is more skewed towards military. if you look at the mix of revenues it is more skewed towards military We've seen growth in our defense business. we've seen growth in our defense business In fact, in the last three quarters, we've had double-digit growth in our defense business that has helped offset the weakness in commercial aerospace driven by lower production rates at the OEMs. in fact in the last three quarters we've had double-digit growth in our defense business that has helped offset the weakness in commercial aerospace driven by lower production rates at the oems We do expect that to change as Boeing and Airbus continue to ramp up their production rates, and especially with Boeing and some of the positive commentary that we have been seeing, including commentary from their CFO yesterday, as well as the change that we've seen at Boeing under their new leadership is very encouraging and is promising for us at Ducommun. Within our commercial aerospace business, we have more significant exposure to narrow-body aircraft. You can see some of the platforms on the right side of the page. We have exposure to the 737 MAX, the A220 that are kind of good, strong platforms, as well as the A320. So we're on the right platforms. On the twin aisle side, we have exposure to 787. That's the primary wide-body exposure that we have. So again, a good platform to be on, and so we feel really good about that. We do expect that to change as Boeing and Airbus continue to ramp up their production rates, and especially with Boeing and some of the positive commentary that we have been seeing, including commentary from their CFO yesterday, as well as the change that we've seen at Boeing under their new leadership is very encouraging and is promising for us at Ducommun. we do expect that to change as boeing and airbus continue to ramp up their production rates and especially with boeing and some of the positive commentary that we have been seeing including commentary from their cfo yesterday as well as the change that we've seen at boeing under their new leadership is very encouraging and is promising for us at ducommun Within our commercial aerospace business, we have more significant exposure to narrow-body aircraft. within our commercial aerospace business we have more significant exposure to narrow-body aircraft You can see some of the platforms on the right side of the page. you can see some of the platforms on the right side of the page We have exposure to the 737 MAX, the A220 that are kind of good, strong platforms, as well as the A320. we have exposure to the 737 max the a220 that are kind of good strong platforms as well as the a320 So we're on the right platforms. so we're on the right platforms On the twin aisle side, we have exposure to 787. on the twin aisle side we have exposure to 787 That's the primary wide-body exposure that we have. that's the primary wide-body exposure that we have So again, a good platform to be on, and so we feel really good about that. so again a good platform to be on and so we feel really good about that And then we have some business jet content as well, mainly with Gulfstream, which has been growing nicely. You can see our primary customers are the aerospace aircraft OEMs, as well as tier ones in commercial aerospace and the defense primes in the military and space segment. Moving to our products, right? So we have two financial reporting segments, the electronics business as well as the structures business. And you can see the different products that make up each of these reporting segments. On the electronics side, we make ruggedized interconnects. We make complex circuit card assemblies, as well as kind of compiling these different electronics into enclosures and building kind of the next level up in the value chain, building these boxes of electronics. Most of these products are going into the defense industry. And we've had strong growth on that side. And then we have some business jet content as well, mainly with Gulfstream, which has been growing nicely. and then we have some business jet content as well mainly with gulfstream which has been growing nicely You can see our primary customers are the aerospace aircraft OEMs, as well as tier ones in commercial aerospace and the defense primes in the military and space segment. you can see our primary customers are the aerospace aircraft oems as well as tier ones in commercial aerospace and the defense primes in the military and space segment Moving to our products, right? moving to our products right So we have two financial reporting segments, the electronics business as well as the structures business. so we have two financial reporting segments the electronics business as well as the structures business And you can see the different products that make up each of these reporting segments. and you can see the different products that make up each of these reporting segments On the electronics side, we make ruggedized interconnects. on the electronics side we make ruggedized interconnects We make complex circuit card assemblies, as well as kind of compiling these different electronics into enclosures and building kind of the next level up in the value chain, building these boxes of electronics. we make complex circuit card assemblies as well as kind of compiling these different electronics into enclosures and building kind of the next level up in the value chain building these boxes of electronics Most of these products are going into the defense industry. most of these products are going into the defense industry And we've had strong growth on that side. and we've had strong growth on that side We continue to see strong bookings on the defense side, especially with missiles and radar systems, which is a growing franchise within our portfolio, and these products primarily go into that end-use market. We also have some proprietary product businesses within the electronics business, and these include our human-machine interface products. These are push buttons, switches, bezels that are within the cockpit of a military or commercial aircraft. We typically get sole-sourced and specced in and have very strong margins with these products. We also have a lightning protection product line, a business we acquired in 2017 called LDS, and they have a significant share of the lightning protection market for radomes, and that's been a great business for us, and finally, our motion control business, where we make motors and resolvers for, again, cannot fail applications within the defense industry. We continue to see strong bookings on the defense side, especially with missiles and radar systems, which is a growing franchise within our portfolio, and these products primarily go into that end-use market. we continue to see strong bookings on the defense side especially with missiles and radar systems which is a growing franchise within our portfolio and these products primarily go into that end-use market We also have some proprietary product businesses within the electronics business, and these include our human-machine interface products. we also have some proprietary product businesses within the electronics business and these include our human-machine interface products These are push buttons, switches, bezels that are within the cockpit of a military or commercial aircraft. these are push buttons switches bezels that are within the cockpit of a military or commercial aircraft We typically get sole-sourced and specced in and have very strong margins with these products. we typically get sole-sourced and specced in and have very strong margins with these products We also have a lightning protection product line, a business we acquired in 2017 called LDS, and they have a significant share of the lightning protection market for radomes, and that's been a great business for us, and finally, our motion control business, where we make motors and resolvers for, again, cannot fail applications within the defense industry. we also have a lightning protection product line a business we acquired in 2017 called lds and they have a significant share of the lightning protection market for radomes and that's been a great business for us and finally our motion control business where we make motors and resolvers for again cannot fail applications within the defense industry And then on the structure side, we have the more traditional aero structures type of businesses, which include titanium hot forming, titanium superplastic forming, which we believe there are only a handful of suppliers globally that are capable of manufacturing. These are formed out of titanium sheet, very complex contoured metal parts, titanium parts that we sell into Boeing, into Airbus, and Spirit. And we're really proud of the technology we have in order to build these parts. So while that still kind of falls within what we would consider contract manufacturing, it is kind of a very niche capability that few have. We also have an aluminum stretch forming business where we make most of the fuselage panels on the A220. And we have also, in the past couple of years, won work with fuselage panels on the 737 MAX. So that's kind of the aluminum stretch forming business. And then on the structure side, we have the more traditional aero structures type of businesses, which include titanium hot forming, titanium superplastic forming, which we believe there are only a handful of suppliers globally that are capable of manufacturing. and then on the structure side we have the more traditional aero structures type of businesses which include titanium hot forming titanium superplastic forming which we believe there are only a handful of suppliers globally that are capable of manufacturing These are formed out of titanium sheet, very complex contoured metal parts, titanium parts that we sell into Boeing, into Airbus, and Spirit. these are formed out of titanium sheet very complex contoured metal parts titanium parts that we sell into boeing into airbus and spirit And we're really proud of the technology we have in order to build these parts. and we're really proud of the technology we have in order to build these parts So while that still kind of falls within what we would consider contract manufacturing, it is kind of a very niche capability that few have. so while that still kind of falls within what we would consider contract manufacturing it is kind of a very niche capability that few have We also have an aluminum stretch forming business where we make most of the fuselage panels on the A220. we also have an aluminum stretch forming business where we make most of the fuselage panels on the a220 And we have also, in the past couple of years, won work with fuselage panels on the 737 MAX. and we have also in the past couple of years won work with fuselage panels on the 737 max So that's kind of the aluminum stretch forming business. so that's kind of the aluminum stretch forming business And then we have more engineered product businesses within the portfolio as well, which include our ammunition handling business, a business called Nobles that we bought back in 2019, Magnetic Seal, which is a business called Magnetic Seal we bought in 2021, and then extruded thermoplastics for the interiors of aircraft. And finally, aerodynamic enhancement products for rotorcraft, a business called BLR Aerospace we bought in 2023. So where is Ducommun headed, right? I talked initially about the things that the current management team did under Steve Oswald's leadership coming in between 2017 and 2019, and then the pandemic hit. But as we were coming out of the pandemic in 2022, we felt like the time was right for us to go out and communicate a five-year plan to the street. And then we have more engineered product businesses within the portfolio as well, which include our ammunition handling business, a business called Nobles that we bought back in 2019, Magnetic Seal, which is a business called Magnetic Seal we bought in 2021, and then extruded thermoplastics for the interiors of aircraft. and then we have more engineered product businesses within the portfolio as well which include our ammunition handling business a business called nobles that we bought back in 2019 magnetic seal which is a business called magnetic seal we bought in 2021 and then extruded thermoplastics for the interiors of aircraft And finally, aerodynamic enhancement products for rotorcraft, a business called BLR Aerospace we bought in 2023. and finally aerodynamic enhancement products for rotorcraft a business called blr aerospace we bought in 2023 So where is Ducommun headed, right? so where is ducommun headed right I talked initially about the things that the current management team did under Steve Oswald's leadership coming in between 2017 and 2019, and then the pandemic hit. i talked initially about the things that the current management team did under steve oswald's leadership coming in between 2017 and 2019 and then the pandemic hit But as we were coming out of the pandemic in 2022, we felt like the time was right for us to go out and communicate a five-year plan to the street. but as we were coming out of the pandemic in 2022 we felt like the time was right for us to go out and communicate a five-year plan to the street We reviewed this with our board in late 2022 and then went and presented to the street in December of 2022, what we call our Vision 2027. That included growing revenues from about $700 million back in 2022 to close to $1 billion by 2027, and also expanding EBITDA margins from 13% back in 2022-18% by 2027. We have made great progress in getting to those targets while revenue may have been slightly softer than we had anticipated back in 2022, given where commercial aerospace and build rates have panned out so far. On the EBITDA margin front, we have been tracking at 16% here in year three of our five-year plan. We're on our way to get to 18% from 13%. We're really proud of that. We're well positioned to get to that 18% in 2027. We reviewed this with our board in late 2022 and then went and presented to the street in December of 2022, what we call our Vision 2027. we reviewed this with our board in late 2022 and then went and presented to the street in december of 2022 what we call our vision 2027 That included growing revenues from about $700 million back in 2022 to close to $1 billion by 2027, and also expanding EBITDA margins from 13% back in 2022- 18% by 2027. that included growing revenues from about $700 million back in 2022 to close to $1 billion by 2027 and also expanding ebitda margins from 13% back in 2022- 18% by 2027 We have made great progress in getting to those targets while revenue may have been slightly softer than we had anticipated back in 2022, given where commercial aerospace and build rates have panned out so far. we have made great progress in getting to those targets while revenue may have been slightly softer than we had anticipated back in 2022 given where commercial aerospace and build rates have panned out so far On the EBITDA margin front, we have been tracking at 16% here in year three of our five-year plan. on the ebitda margin front we have been tracking at 16% here in year three of our five-year plan We're on our way to get to 18% from 13%. we're on our way to get to 18% from 13% We're really proud of that. we're really proud of that We're well positioned to get to that 18% in 2027. we're well positioned to get to that 18% in 2027 What are the key drivers or investment highlights for Ducommun and also kind of the enablers of this Vision 2027? I talked about us wanting to grow our engineered products. That's a key part of our strategy. We like this portion of our business where we own the design IP. We're specced in. We're sole-sourced. We have access to the aftermarket. And the aftermarket portion in itself is a sizable portion of the business. And any good aerospace business needs to have strong aftermarket. And we had less than we probably had 5% or 6% aftermarket in our business back in 2017, and that has grown significantly. Engineered products was less than 10%. It was 9% of our portfolio back in 2017. What are the key drivers or investment highlights for Ducommun and also kind of the enablers of this Vision 2027? what are the key drivers or investment highlights for ducommun and also kind of the enablers of this vision 2027 I talked about us wanting to grow our engineered products. i talked about us wanting to grow our engineered products That's a key part of our strategy. that's a key part of our strategy We like this portion of our business where we own the design IP. we like this portion of our business where we own the design ip We're specced in. we're specced in We're sole-sourced. we're sole-sourced We have access to the aftermarket. we have access to the aftermarket And the aftermarket portion in itself is a sizable portion of the business. and the aftermarket portion in itself is a sizable portion of the business And any good aerospace business needs to have strong aftermarket. and any good aerospace business needs to have strong aftermarket And we had less than we probably had 5% or 6% aftermarket in our business back in 2017, and that has grown significantly. and we had less than we probably had 5% or 6% aftermarket in our business back in 2017 and that has grown significantly Engineered products was less than 10%. engineered products was less than 10% It was 9% of our portfolio back in 2017. it was 9% of our portfolio back in 2017 We took it to 15% of our portfolio by 2022 with a target of getting it under our Vision 2027 strategy to more than 25% of our business by 2027. And today, where we stand, we are already at 23% of our revenues coming from such engineered products. Again, as I said, these are products where we own the design IP. We're sole-sourced. We're specced in. And that's a great position to be in. And we want more of our revenues to come from these kinds of product lines. We've also, for the non-engineered product portion of our business, looking to add value by taking cost out. And this has been driven by, in the past year to two years, by shutting down some of our existing footprint and consolidating that manufacturing footprint to be able to take cost out. We took it to 15% of our portfolio by 2022 with a target of getting it under our Vision 2027 strategy to more than 25% of our business by 2027. we took it to 15% of our portfolio by 2022 with a target of getting it under our vision 2027 strategy to more than 25% of our business by 2027 And today, where we stand, we are already at 23% of our revenues coming from such engineered products. and today where we stand we are already at 23% of our revenues coming from such engineered products Again, as I said, these are products where we own the design IP. again as i said these are products where we own the design ip We're sole-sourced. we're sole-sourced We're specced in. we're specced in And that's a great position to be in. and that's a great position to be in And we want more of our revenues to come from these kinds of product lines. and we want more of our revenues to come from these kinds of product lines We've also, for the non-engineered product portion of our business, looking to add value by taking cost out. we've also for the non-engineered product portion of our business looking to add value by taking cost out And this has been driven by, in the past year to two years, by shutting down some of our existing footprint and consolidating that manufacturing footprint to be able to take cost out. and this has been driven by in the past year to two years by shutting down some of our existing footprint and consolidating that manufacturing footprint to be able to take cost out We have shut down in the past year a facility in Monrovia, California, as well as one in Berryville, Arkansas. And we have moved this work to existing facilities in the U.S., as well as to our facility in Guaymas, Mexico. And we've had great success doing that. We're kind of at the tail end of those product line moves. We expect those product lines to ramp up production here over the course of Q4 and into 2026 and generate significant cost savings for the business. We've said we expect $11 million-$13 million in synergies from these moves. We've seen close to $4 million of that already in our P&L, but the remaining $7 million-$9 million is expected over the course of 2026, which will provide us with that margin accretion that we expect to see to get us to 18% and beyond. We have shut down in the past year a facility in Monrovia, California, as well as one in Berryville, Arkansas. we have shut down in the past year a facility in monrovia california as well as one in berryville arkansas And we have moved this work to existing facilities in the U.S., as well as to our facility in Guaymas, Mexico. and we have moved this work to existing facilities in the u.s as well as to our facility in guaymas mexico And we've had great success doing that. and we've had great success doing that We're kind of at the tail end of those product line moves. we're kind of at the tail end of those product line moves We expect those product lines to ramp up production here over the course of Q4 and into 2026 and generate significant cost savings for the business. we expect those product lines to ramp up production here over the course of q4 and into 2026 and generate significant cost savings for the business We've said we expect $11 million-$13 million in synergies from these moves. we've said we expect $11 million-$13 million in synergies from these moves We've seen close to $4 million of that already in our P&L, but the remaining $7 million-$9 million is expected over the course of 2026, which will provide us with that margin accretion that we expect to see to get us to 18% and beyond. we've seen close to $4 million of that already in our p&l but the remaining $7 million-$9 million is expected over the course of 2026 which will provide us with that margin accretion that we expect to see to get us to 18% and beyond M&A is also an important part of our strategy, especially around the engineered products, as we try to grow that as a percentage of our overall revenue mix. As I said, we were now at 23% of our revenue coming from engineered product. We want to take that to 25% and more. And we have successfully done five acquisitions under the current management team over the last eight years. We've successfully integrated them, grown the EBITDA, and that has helped not only the revenue mix, but has also been a key contributor to expanding our margins over this period. We are a tier one player. You saw we sell directly into the aircraft OEMs, as well as to the tier ones and the defense primes. M&A is also an important part of our strategy, especially around the engineered products, as we try to grow that as a percentage of our overall revenue mix. m&a is also an important part of our strategy especially around the engineered products as we try to grow that as a percentage of our overall revenue mix As I said, we were now at 23% of our revenue coming from engineered product. as i said we were now at 23% of our revenue coming from engineered product We want to take that to 25% and more. we want to take that to 25% and more And we have successfully done five acquisitions under the current management team over the last eight years. and we have successfully done five acquisitions under the current management team over the last eight years We've successfully integrated them, grown the EBITDA, and that has helped not only the revenue mix, but has also been a key contributor to expanding our margins over this period. we've successfully integrated them grown the ebitda and that has helped not only the revenue mix but has also been a key contributor to expanding our margins over this period We are a tier one player. we are a tier one player You saw we sell directly into the aircraft OEMs, as well as to the tier ones and the defense primes. you saw we sell directly into the aircraft oems as well as to the tier ones and the defense primes We are well positioned with the platform content that we have to benefit from the commercial aerospace recovery, which we think is on a firm footing today. But we definitely will be a beneficiary of that over the next couple of years. And then the defense business has been really strong for us, not just through the pandemic, but here, even in 2025, we have seen double-digit growth in our defense business in the last three quarters. And we continue to see strong order flow, and the future is very promising for us, especially with our missiles and radar franchise, which has been growing high double-digit. Final couple of points there, our manufacturing services, the structures portion of that business, as I said, we do a lot of titanium forming, which a handful of players globally are capable of doing. We are well positioned with the platform content that we have to benefit from the commercial aerospace recovery, which we think is on a firm footing today. we are well positioned with the platform content that we have to benefit from the commercial aerospace recovery which we think is on a firm footing today But we definitely will be a beneficiary of that over the next couple of years. but we definitely will be a beneficiary of that over the next couple of years And then the defense business has been really strong for us, not just through the pandemic, but here, even in 2025, we have seen double-digit growth in our defense business in the last three quarters. and then the defense business has been really strong for us not just through the pandemic but here even in 2025 we have seen double-digit growth in our defense business in the last three quarters And we continue to see strong order flow, and the future is very promising for us, especially with our missiles and radar franchise, which has been growing high double-digit. and we continue to see strong order flow and the future is very promising for us especially with our missiles and radar franchise which has been growing high double-digit Final couple of points there, our manufacturing services, the structures portion of that business, as I said, we do a lot of titanium forming, which a handful of players globally are capable of doing. final couple of points there our manufacturing services the structures portion of that business as i said we do a lot of titanium forming which a handful of players globally are capable of doing When it comes to the electronic side of our business, again, we have a very efficient, low-cost domestic footprint that is able to build these electronic products that need to be made here in the United States for defense purposes. And we've had great success taking work out of our customer's factory and bringing them and being able to cost-effectively produce them in our factories and make that a win-win both for ourselves and for our customers. So that's been a big plus for us, and we'll continue to drive value from our manufacturing services businesses, even as we look to grow our engineered products. And the last point is tariffs. I mean, that's been a hot topic here over the past year. When it comes to the electronic side of our business, again, we have a very efficient, low-cost domestic footprint that is able to build these electronic products that need to be made here in the United States for defense purposes. when it comes to the electronic side of our business again we have a very efficient low-cost domestic footprint that is able to build these electronic products that need to be made here in the united states for defense purposes And we've had great success taking work out of our customer's factory and bringing them and being able to cost-effectively produce them in our factories and make that a win-win both for ourselves and for our customers. and we've had great success taking work out of our customer's factory and bringing them and being able to cost-effectively produce them in our factories and make that a win-win both for ourselves and for our customers So that's been a big plus for us, and we'll continue to drive value from our manufacturing services businesses, even as we look to grow our engineered products. so that's been a big plus for us and we'll continue to drive value from our manufacturing services businesses even as we look to grow our engineered products And the last point is tariffs. and the last point is tariffs I mean, that's been a hot topic here over the past year. i mean that's been a hot topic here over the past year And for us, we are in almost kind of a perfect position when it comes to tariffs, given our manufacturing footprint today is primarily here in the United States. 95% of our manufacturing or our revenues come from our U.S. facilities. And if you look at our supply chain, that is as well largely domestic. And so our exposure to foreign suppliers, as well as selling to foreign countries, is limited. And we have seen negligible impact to our P&L so far through Q3 and even here in Q4 so far as a result of tariffs. So we feel really good about that. I want to leave some time for Q&A. So this presentation is available on our website, and you can see some additional detail behind each of these bullets in kind of the following pages if you were to kind of go through that. And for us, we are in almost kind of a perfect position when it comes to tariffs, given our manufacturing footprint today is primarily here in the United States. 95% of our manufacturing or our revenues come from our U.S. facilities. and for us we are in almost kind of a perfect position when it comes to tariffs given our manufacturing footprint today is primarily here in the united states 95% of our manufacturing or our revenues come from our u.s facilities And if you look at our supply chain, that is as well largely domestic. and if you look at our supply chain that is as well largely domestic And so our exposure to foreign suppliers, as well as selling to foreign countries, is limited. and so our exposure to foreign suppliers as well as selling to foreign countries is limited And we have seen negligible impact to our P&L so far through Q3 and even here in Q4 so far as a result of tariffs. and we have seen negligible impact to our p&l so far through q3 and even here in q4 so far as a result of tariffs So we feel really good about that. so we feel really good about that I want to leave some time for Q&A. i want to leave some time for q&a So this presentation is available on our website, and you can see some additional detail behind each of these bullets in kind of the following pages if you were to kind of go through that. so this presentation is available on our website and you can see some additional detail behind each of these bullets in kind of the following pages if you were to kind of go through that But I'll finish here, and then we can go into Q&A. Excellent. Thank you, sir. But I'll finish here, and then we can go into Q&A. but i'll finish here and then we can go into q&a Excellent. excellent Thank you, sir. thank you sir

Speaker 1: It'd be great to hear you just talk more about the process of moving into engineered products. How do you actually do it? Because it's kind of the whole point of being in engineered products is it's a higher barrier to entry, less competition, less commoditized, and that has better growth and pricing and margins over time. But that would make it sound kind of hard to break into. So how are you doing it? How much of it is organic versus inorganic? Maybe you could tell us more about that. It'd be great to hear you just talk more about the process of moving into engineered products. it'd be great to hear you just talk more about the process of moving into engineered products How do you actually do it? how do you actually do it Because it's kind of the whole point of being in engineered products is it's a higher barrier to entry, less competition, less commoditized, and that has better growth and pricing and margins over time. because it's kind of the whole point of being in engineered products is it's a higher barrier to entry less competition less commoditized and that has better growth and pricing and margins over time But that would make it sound kind of hard to break into. but that would make it sound kind of hard to break into So how are you doing it? so how are you doing it How much of it is organic versus inorganic? how much of it is organic versus inorganic Maybe you could tell us more about that. maybe you could tell us more about that

Speaker 3: Yeah, that's an excellent question. So it is a mix of both organic as well as inorganic growth. A lot of the growth over the last eight years has been inorganic. Yeah, that's an excellent question. yeah that's an excellent question So it is a mix of both organic as well as inorganic growth. so it is a mix of both organic as well as inorganic growth A lot of the growth over the last eight years has been inorganic. a lot of the growth over the last eight years has been inorganic We've done five acquisitions that have contributed to the growth in our engineered product portfolio. But over this period of time, we have invested in engineering resources and sales resources to develop the pipeline of new products as well that will, over a period of time, drive organic growth. And we've had good success with that. We've had good success of that with the engineered product businesses that were part of the portfolio prior to 2017. We have grown our HMI business, a human-machine interface business, with additional products that cater to the aftermarket. We have grown our RF products. But then we've also, with our acquisitions, and I'll give you an example, the business called Nobles that we bought in 2019, they made ammunition chutes when we bought them. And we have gradually, over the last seven years, moved them into entire ammunition handling systems. We've done five acquisitions that have contributed to the growth in our engineered product portfolio. we've done five acquisitions that have contributed to the growth in our engineered product portfolio But over this period of time, we have invested in engineering resources and sales resources to develop the pipeline of new products as well that will, over a period of time, drive organic growth. but over this period of time we have invested in engineering resources and sales resources to develop the pipeline of new products as well that will over a period of time drive organic growth And we've had good success with that. and we've had good success with that We've had good success of that with the engineered product businesses that were part of the portfolio prior to 2017. we've had good success of that with the engineered product businesses that were part of the portfolio prior to 2017 We have grown our HMI business, a human-machine interface business, with additional products that cater to the aftermarket. we have grown our hmi business a human-machine interface business with additional products that cater to the aftermarket We have grown our RF products. we have grown our rf products But then we've also, with our acquisitions, and I'll give you an example, the business called Nobles that we bought in 2019, they made ammunition chutes when we bought them. but then we've also with our acquisitions and i'll give you an example the business called nobles that we bought in 2019 they made ammunition chutes when we bought them And we have gradually, over the last seven years, moved them into entire ammunition handling systems. and we have gradually over the last seven years moved them into entire ammunition handling systems So not just the chute, but also the magazine and some of the other ancillaries that make up the full system is something that we now are able to design and build. And we have been able to win content on platforms now with that entire integrated system. So we have been able to take the ship-set content from what would have been a few thousand dollars to tens of thousands of dollars and been able to grow the business. So that's an example of how we have kind of organically grown over a period of time. Yes, it takes time. But once you win that business, then you enjoy it for several years. So not just the chute, but also the magazine and some of the other ancillaries that make up the full system is something that we now are able to design and build. so not just the chute but also the magazine and some of the other ancillaries that make up the full system is something that we now are able to design and build And we have been able to win content on platforms now with that entire integrated system. and we have been able to win content on platforms now with that entire integrated system So we have been able to take the ship-set content from what would have been a few thousand dollars to tens of thousands of dollars and been able to grow the business. so we have been able to take the ship-set content from what would have been a few thousand dollars to tens of thousands of dollars and been able to grow the business So that's an example of how we have kind of organically grown over a period of time. so that's an example of how we have kind of organically grown over a period of time Yes, it takes time. yes it takes time But once you win that business, then you enjoy it for several years. but once you win that business then you enjoy it for several years

Speaker 1: Interesting. Okay. You're a little bit ahead of the 25% in 2027 plan for engineered products. Do the margins track right up to the same pacing of the engineered products plan? Interesting. interesting Okay. okay You're a little bit ahead of the 25% in 2027 plan for engineered products. you're a little bit ahead of the 25% in 2027 plan for engineered products Do the margins track right up to the same pacing of the engineered products plan? do the margins track right up to the same pacing of the engineered products plan As we look longer term beyond Vision 2027, have you guys thought about where the engineered products mix can go and what that means for margins? As we look long er term beyond Vision 2027, have you guys thought about where the engineered products mix can go and what that means for margins? as we look long er term beyond vision 2027 have you guys thought about where the engineered products mix can go and what that means for margins

Speaker 3: Absolutely. Yes. The margins are certainly being driven by the growth in engineered product. That has been a key driver of our margins here over the last few years. And we are now expecting over the next couple of years to see strong growth in the non-engineered product portion of the portfolio as well. With the strong growth in defense and the strong recovery that is expected in the build rates over the next couple of years, we do expect the non-engineered product business to also grow nicely, which is good. We like growth in that portion of the business as well. Absolutely. absolutely Yes. yes The margins are certainly being driven by the growth in engineered product. the margins are certainly being driven by the growth in engineered product That has been a key driver of our margins here over the last few years. that has been a key driver of our margins here over the last few years And we are now expecting over the next couple of years to see strong growth in the non-engineered product portion of the portfolio as well. and we are now expecting over the next couple of years to see strong growth in the non-engineered product portion of the portfolio as well With the strong growth in defense and the strong recovery that is expected in the build rates over the next couple of years, we do expect the non-engineered product business to also grow nicely, which is good. with the strong growth in defense and the strong recovery that is expected in the build rates over the next couple of years we do expect the non-engineered product business to also grow nicely which is good We like growth in that portion of the business as well. we like growth in that portion of the business as well But what that will mean is that we've got to drive acquisitions to be able to continue to take that mix to 25% and beyond, which we feel good about. We haven't done a transaction here in the last 24 months, but we are actively in the market. We're looking at a number of opportunities in dialogue with several target companies, both as part of kind of bank run processes as well as our own proprietary pipeline of acquisition opportunities that we are pursuing. So we feel good about being able to do a few transactions here that will help us get to 25% and beyond. In the longer run, the strategy, and we have told the street that we are going to come with our kind of next phase or next phase of Vision 2027 in the fall of next year and communicate that to the street. But what that will mean is that we've got to drive acquisitions to be able to continue to take that mix to 25% and beyond, which we feel good about. but what that will mean is that we've got to drive acquisitions to be able to continue to take that mix to 25% and beyond which we feel good about We haven't done a transaction here in the last 24 months, but we are actively in the market. we haven't done a transaction here in the last 24 months but we are actively in the market We're looking at a number of opportunities in dialogue with several target companies, both as part of kind of bank run processes as well as our own proprietary pipeline of acquisition opportunities that we are pursuing. we're looking at a number of opportunities in dialogue with several target companies both as part of kind of bank run processes as well as our own proprietary pipeline of acquisition opportunities that we are pursuing So we feel good about being able to do a few transactions here that will help us get to 25% and beyond. so we feel good about being able to do a few transactions here that will help us get to 25% and beyond In the longer run, the strategy, and we have told the street that we are going to come with our kind of next phase or next phase of Vision 2027 in the fall of next year and communicate that to the street. in the longer run the strategy and we have told the street that we are going to come with our kind of next phase or next phase of vision 2027 in the fall of next year and communicate that to the street But that will be an update of 2027? That will be an update. That will be further out. That will be something further out, right? So that'll take us kind of beyond 2027. But that will be an update of 2027? but that will be an update of 2027 That will be an update. that will be an update That will be further out. that will be further out That will be something further out, right? that will be something further out right So that'll take us kind of beyond 2027. so that'll take us kind of beyond 2027

Speaker 1: Okay. And sorry, when is it? Okay. okay And sorry, when is it? and sorry when is it

Speaker 3: In the fall of 2026 is when we plan to communicate that. But it certainly isn't going to be a deviation from our engineered product strategy. That is core to growing the business. That is core to expanding margins. And I think we can get to 30% plus, eventually 50% plus, and possibly one day be an entirely engineered product company. In the fall of 2026 is when we plan to communicate that. in the fall of 2026 is when we plan to communicate that But it certainly isn't going to be a deviation from our engineered product strategy. but it certainly isn't going to be a deviation from our engineered product strategy That is core to growing the business. that is core to growing the business That is core to expanding margins. that is core to expanding margins And I think we can get to 30% plus, eventually 50% plus, and possibly one day be an entirely engineered product company. and i think we can get to 30% plus eventually 50% plus and possibly one day be an entirely engineered product company

Speaker 1: Okay. We will follow along. All right. You referenced Boeing and maybe their production cadence improving. Can you talk a little bit more about what you're seeing there? And your aerospace growth rates have been negative, which seems partially or entirely due to inventory destock. Is that correct? Okay. okay We will follow along. we will follow along All right. all right You referenced Boeing and maybe their production cadence improving. you referenced boeing and maybe their production cadence improving Can you talk a little bit more about what you're seeing there? can you talk a little bit more about what you're seeing there And your aerospace growth rates have been negative, which seems partially or entirely due to inventory destock. and your aerospace growth rates have been negative which seems partially or entirely due to inventory destock Is that correct? is that correct Are you able to tell when that ends? Are you able to tell when that ends? are you able to tell when that ends

Speaker 3: Right. We think that there will be some element of destocking through the second half of next year. Part of the reason for that is there is destocking at Spirit and Boeing. There is also some destocking at our end, as we had maintained production rates in order to have our factories operating at a level load versus kind of gyrating between varying production rates month to month. That's not a very efficient way of producing. We have been here in 2025, if you look at our revenue, we've probably been kind of in the low 30s on average across the different products on the MAX. We've been shipping in the mid to high 20s. That does mean that there has been some accumulation, which also will need to get destocked. Right. right We think that there will be some element of destocking through the second half of next year. we think that there will be some element of destocking through the second half of next year Part of the reason for that is there is destocking at Spirit and Boeing. part of the reason for that is there is destocking at spirit and boeing There is also some destocking at our end, as we had maintained production rates in order to have our factories operating at a level load versus kind of gyrating between varying production rates month to month. there is also some destocking at our end as we had maintained production rates in order to have our factories operating at a level load versus kind of gyrating between varying production rates month to month That's not a very efficient way of producing. that's not a very efficient way of producing We have been here in 2025, if you look at our revenue, we've probably been kind of in the low 30s on average across the different products on the MAX. we have been here in 2025 if you look at our revenue we've probably been kind of in the low 30s on average across the different products on the max We've been shipping in the mid to high 20s. we've been shipping in the mid to high 20s That does mean that there has been some accumulation, which also will need to get destocked. that does mean that there has been some accumulation which also will need to get destocked I think we feel really encouraged by what we are seeing out of Boeing and with the Spirit acquisition expected still to close here by the end of this year. I think there are more good things to come out of Spirit, and we're looking forward to those two companies coming together and creating more stability in the demand for us. Hopefully, the destocking will happen sooner than we expect. That's kind of what we're seeing right now. I think we feel really encouraged by what we are seeing out of Boeing and with the Spirit acquisition expected still to close here by the end of this year. i think we feel really encouraged by what we are seeing out of boeing and with the spirit acquisition expected still to close here by the end of this year I think there are more good things to come out of Spirit, and we're looking forward to those two companies coming together and creating more stability in the demand for us. i think there are more good things to come out of spirit and we're looking forward to those two companies coming together and creating more stability in the demand for us Hopefully, the destocking will happen sooner than we expect. hopefully the destocking will happen sooner than we expect That's kind of what we're seeing right now. that's kind of what we're seeing right now

Speaker 1: Okay. Your defense business has been growing double digits. Aerospace original equipment supply is way below demand, maybe half of demand. The growth rate that should occur there is pretty high. It has to happen. Then you have to get through the inventory destock, but it should be pretty high. It'll have very easy comparisons. Okay. okay Your defense business has been growing double digits. your defense business has been growing double digits Aerospace original equipment supply is way below demand, maybe half of demand. aerospace original equipment supply is way below demand maybe half of demand The growth rate that should occur there is pretty high. the growth rate that should occur there is pretty high It has to happen. it has to happen Then you have to get through the inventory destock, but it should be pretty high. then you have to get through the inventory destock but it should be pretty high It'll have very easy comparisons. it'll have very easy comparisons So it would look like your aerospace business could at some point have a double-digit growth rate. Is there a reason I should not expect, therefore, at some point over the next few years for Ducommun and Topline to have a double-digit growth rate? So it would look like your aerospace business could at some point have a double-digit growth rate. so it would look like your aerospace business could at some point have a double-digit growth rate Is there a reason I should not expect, therefore, at some point over the next few years for Ducommun and Topline to have a double-digit growth rate? is there a reason i should not expect therefore at some point over the next few years for ducommun and topline to have a double-digit growth rate

Speaker 3: That is not an unreasonable expectation. I think once we get past the destocking, there is certainly going to be an inflection point on the commercial aerospace growth rate. And that, accompanied by the strong demand we're seeing on the defense side, should really be a catalyst to very strong growth for the company. That is not an unreasonable expectation. that is not an unreasonable expectation I think once we get past the destocking, there is certainly going to be an inflection point on the commercial aerospace growth rate. i think once we get past the destocking there is certainly going to be an inflection point on the commercial aerospace growth rate And that, accompanied by the strong demand we're seeing on the defense side, should really be a catalyst to very strong growth for the company. and that accompanied by the strong demand we're seeing on the defense side should really be a catalyst to very strong growth for the company

Speaker 1: Okay. Great. We have about five minutes left. I can check to see if there are any questions from anyone in the audience here. Yes, here in the middle. Would you mind grabbing the microphone behind you just so we can? Okay. okay Great. great We have about five minutes left. we have about five minutes left I can check to see if there are any questions from anyone in the audience here. i can check to see if there are any questions from anyone in the audience here Yes, here in the middle. yes here in the middle Would you mind grabbing the microphone behind you just so we can? would you mind grabbing the microphone behind you just so we can Oh, sorry. I didn't realize. Oh, sorry. oh sorry i I didn't realize. i didn't realize You're okay. You're okay. you're okay

Speaker 3: Should I start from the beginning? Should I start from the beginning? should i start from the beginning Yeah, go ahead. Yeah, go ahead. yeah go ahead Okay. Cool. Okay. okay Cool. cool So my responsibility is investments in aerospace and support U.S. companies to expand into the Asia-Pacific market. So I have two questions. One is about the regional exposure. I know that you mentioned 95% of the revenue currently comes from North America, but I'm curious to understand what the remaining 5% is and how you see Asia-Pacific market as a or how you see Asia-Pacific market strategically. My second question is, you mentioned some of the destocking in the commercial aerospace area is expected to happen next year. But given your close work with the major OEMs, I'm curious to learn a little more about how you manage inventory levels and production planning within your company, especially in the commercial aerospace area. Thank you. All right. Okay. Thank you for your question. So my responsibility is investments in aerospace and support U.S. companies to expand into the Asia-Pacific market. so my responsibility is investments in aerospace and support u.s companies to expand into the asia-pacific market So I have two questions. so i have two questions One is about the regional exposure. one is about the regional exposure I know that you mentioned 95% of the revenue currently comes from North America, but I'm curious to understand what the remaining 5% is and how you see Asia-Pacific market as a or how you see Asia-Pacific market strategically. i know that you mentioned 95% of the revenue currently comes from north america but i'm curious to understand what the remaining 5% is and how you see asia-pacific market as a or how you see asia-pacific market strategically My second question is, you mentioned some of the destocking in the commercial aerospace area is expected to happen next year. my second question is you mentioned some of the destocking in the commercial aerospace area is expected to happen next year But given your close work with the major OEMs, I'm curious to learn a little more about how you manage inventory levels and production planning within your company, especially in the commercial aerospace area. but given your close work with the major oems i'm curious to learn a little more about how you manage inventory levels and production planning within your company especially in the commercial aerospace area Thank you. thank you All right. all right Okay. okay Thank you for your question. thank you for your question While we don't sell a lot directly into Asia-Pacific, we do have some content on Airbus platforms that goes into an intermediate supplier before it goes to Airbus, an intermediate supplier in China. Most of our products are being shipped to customers, mainly in North America and to Airbus and in other parts of Europe. But we're supplying components into products that are eventually going to Asia-Pacific. The growth in passenger traffic and the demand for aircraft is definitely something we're benefiting for. There is an indirect connection between our growth and growth in Asia-Pacific, even though we may not directly sell into that part of the world. With regard to your question around production planning and the growth rate, so we and inventory, right? While we don't sell a lot directly into Asia-Pacific, we do have some content on Airbus platforms that goes into an intermediate supplier before it goes to Airbus, an intermediate supplier in China. while we don't sell a lot directly into asia-pacific we do have some content on airbus platforms that goes into an intermediate supplier before it goes to airbus an intermediate supplier in china Most of our products are being shipped to customers, mainly in North America and to Airbus and in other parts of Europe. most of our products are being shipped to customers mainly in north america and to airbus and in other parts of europe But we're supplying components into products that are eventually going to Asia-Pacific. but we're supplying components into products that are eventually going to asia-pacific The growth in passenger traffic and the demand for aircraft is definitely something we're benefiting for. the growth in passenger traffic and the demand for aircraft is definitely something we're benefiting for There is an indirect connection between our growth and growth in Asia-Pacific, even though we may not directly sell into that part of the world. there is an indirect connection between our growth and growth in asia-pacific even though we may not directly sell into that part of the world With regard to your question around production planning and the growth rate, so we and inventory, right? with regard to your question around production planning and the growth rate so we and inventory right So as we were coming out of the pandemic, we felt like there was a need for us to make a strategic investment in inventory. There was a lot of disruption in the supply chain. So it was difficult for us to, and it was hard for us to make sure that we had all the materials we needed in order to satisfy our customers' demand. On the other hand, we also had some erraticness in the demand from some of our customers, especially on the commercial aerospace side, with production rates kind of varying, coming to a stop and then restarting and just a lot of oscillation. So having the right amount of inventory, maintaining our factory at a level load in order to be efficient in what we were building was really important. So as we were coming out of the pandemic, we felt like there was a need for us to make a strategic investment in inventory. so as we were coming out of the pandemic we felt like there was a need for us to make a strategic investment in inventory There was a lot of disruption in the supply chain. there was a lot of disruption in the supply chain So it was difficult for us to, and it was hard for us to make sure that we had all the materials we needed in order to satisfy our customers' demand. so it was difficult for us to and it was hard for us to make sure that we had all the materials we needed in order to satisfy our customers' demand On the other hand, we also had some erraticness in the demand from some of our customers, especially on the commercial aerospace side, with production rates kind of varying, coming to a stop and then restarting and just a lot of oscillation. on the other hand we also had some erraticness in the demand from some of our customers especially on the commercial aerospace side with production rates kind of varying coming to a stop and then restarting and just a lot of oscillation So having the right amount of inventory, maintaining our factory at a level load in order to be efficient in what we were building was really important. so having the right amount of inventory maintaining our factory at a level load in order to be efficient in what we were building was really important That's part of the reason why we have higher than the typical amount of inventory we would like to carry on our balance sheet. That was a good decision on the part of the management team. It allowed us to maintain delivery in a fairly flawless manner through the last four or five years. And it positions us well for the ramp-up going forward over the next two years. And it also presents an opportunity from a free cash flow perspective as we unwind this investment in inventory over the next couple of years. And as production rates go up and we destock, we're going to see better cash flow conversion. And that's going to be a plus side for us. Suman, maybe just with the minute or so we have left, M&A is an important part of the strategy. That's part of the reason why we have higher than the typical amount of inventory we would like to carry on our balance sheet. that's part of the reason why we have higher than the typical amount of inventory we would like to carry on our balance sheet That was a good decision on the part of the management team. that was a good decision on the part of the management team It allowed us to maintain delivery in a fairly flawless manner through the last four or five years. it allowed us to maintain delivery in a fairly flawless manner through the last four or five years And it positions us well for the ramp-up going forward over the next two years. and it positions us well for the ramp-up going forward over the next two years And it also presents an opportunity from a free cash flow perspective as we unwind this investment in inventory over the next couple of years. and it also presents an opportunity from a free cash flow perspective as we unwind this investment in inventory over the next couple of years And as production rates go up and we destock, we're going to see better cash flow conversion. and as production rates go up and we destock we're going to see better cash flow conversion And that's going to be a plus side for us. and that's going to be a plus side for us Suman, maybe just with the minute or so we have left, M&A is an important part of the strategy. suman maybe just with the minute or so we have left m&a is an important part of the strategy You talked a little bit about it, but I'm curious. It's surprising to me that there hasn't been more M&A and that it's been somewhat quiet recently. And maybe you could talk about why that's the case, what the pipeline looks like right now. And is it more competitive right now than you maybe would have expected? Because TransDigm and HEICO, and there are these other acquisition platforms that have been in the market for a while, but now Loar went public and is larger. And I think there's some other private companies getting larger that have the same model. Is it harder to do deals than you thought it would be? It is definitely competitive. I mean, most of these players have been around for the last eight to 10 years. And so we've seen them as we've done transactions. You talked a little bit about it, but I'm curious. you talked a little bit about it but i'm curious It's surprising to me that there hasn't been more M&A and that it's been somewhat quiet recently. it's surprising to me that there hasn't been more m&a and that it's been somewhat quiet recently And maybe you could talk about why that's the case, what the pipeline looks like right now. and maybe you could talk about why that's the case what the pipeline looks like right now And is it more competitive right now than you maybe would have expected? and is it more competitive right now than you maybe would have expected Because TransDigm and HEICO, and there are these other acquisition platforms that have been in the market for a while, but now Loar went public and is larger. because transdigm and heico and there are these other acquisition platforms that have been in the market for a while but now loar went public and is larger And I think there's some other private companies getting larger that have the same model. and i think there's some other private companies getting larger that have the same model Is it harder to do deals than you thought it would be? is it harder to do deals than you thought it would be It is definitely competitive. it is definitely competitive I mean, most of these players have been around for the last eight to 10 years. i mean most of these players have been around for the last eight to 10 years And so we've seen them as we've done transactions. and so we've seen them as we've done transactions But you're right that there are a lot of folks that are chasing these assets. We have really ramped up our M&A capability in terms of being actively pursuing things just on our own as well, not just relying on the bank flow, but we have just been developing, spending a lot of time over the last few years developing that proprietary pipeline. So what we can see based on that is a sufficient opportunity for us to be able to close on transactions here over the next couple of years. In the lower mid-market, we just haven't seen that level of activity for engineered product businesses, but the outlook is really good. So we feel good about being able to do deals going forward. Okay. All right. We just hit the double zero on the shot clock up here. So why don't we wrap up there? But you're right that there are a lot of folks that are chasing these assets. but you're right that there are a lot of folks that are chasing these assets We have really ramped up our M&A capability in terms of being actively pursuing things just on our own as well, not just relying on the bank flow, but we have just been developing, spending a lot of time over the last few years developing that proprietary pipeline. we have really ramped up our m&a capability in terms of being actively pursuing things just on our own as well not just relying on the bank flow but we have just been developing spending a lot of time over the last few years developing that proprietary pipeline So what we can see based on that is a sufficient opportunity for us to be able to close on transactions here over the next couple of years. so what we can see based on that is a sufficient opportunity for us to be able to close on transactions here over the next couple of years In the lower mid-market, we just haven't seen that level of activity for engineered product businesses, but the outlook is really good. in the lower mid-market we just haven't seen that level of activity for engineered product businesses but the outlook is really good So we feel good about being able to do deals going forward. so we feel good about being able to do deals going forward Okay. okay All right. all right We just hit the double zero on the shot clock up here. we just hit the double zero on the shot clock up here So why don't we wrap up there? so why don't we wrap up there

Speaker 1: Suman, thank you so much for being with us. We really appreciate it. Suman, thank you so much for being with us. suman thank you so much for being with us We really appreciate it. we really appreciate it

Speaker 3: Thank you, Noah. I appreciate the opportunity. Thank you, Noah. thank you noah I appreciate the opportunity. i appreciate the opportunity