Good day, ladies and gentlemen, and welcome to Ducommun First Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will be given at As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Chris Witty with Investor Relations. Sir, please begin.
Thank you, and welcome to Ducommun's 2019 Q1 conference call. With me today are Steve Oswald, Chairman, President and CEO and Doug Groves, Vice President, Chief Financial Officer and Treasurer. I'm going to discuss certain limitations to any forward looking statements regarding future events, projections or performance that we may make during the prepared remarks or the question and answer session that follows. Certain statements today that are not historical facts, including any statements as to future market conditions, results of operations, our restructuring plans and financial projections are forward looking statements under the Federal Private Securities Litigation Reform Act of 1995 and therefore perspective. These forward looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from the future results expressed or implied by such forward looking statements.
Although we believe that the expectations reflected in our forward looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. In addition, estimates of future operating results are based on the company's current business, which is subject to change. Particular risks facing Ducommun include, among others, the cyclicality of our end use markets, the level of U. S. Government defense spending, legal and regulatory risks, management changes, the cost of expansion and acquisitions and competition.
These risks and others are described in our Annual Report and on Form 10 ks filed with the SEC, and our forward looking statements are subject to those risks. Statements made during this call are only as of the time made, and we do not intend to update any statements made in this presentation except if and as required by regulatory authorities. This call also includes non GAAP financial measures. Please refer to our filings with the SEC for a reconciliation of the non GAAP measures referenced on this call to the most similar GAAP measures. We filed our Form 10 Q with the SEC today and we will find and you will find a link to all our filings on the company's website under the Investor Relations tab.
I would now like to turn the call over to Mr. Steve Oswald for a review of the operating results. Steve?
Okay. Thanks, Chris, and thank you everyone for joining us today for our 2019 Q1 conference call. As usual, I'll begin by providing an update on recent developments of the company. After which Doug will review our financial results in detail. I'm very pleased to announce that we posted a strong start to fiscal 2019 with our overall performance surpassing expectations across the board.
1st quarter revenue grew roughly 15% year over year to $172,600,000 driven by continued strong demand across a number of key commercial platforms, particularly the Boeing 737 where revenue grew sharply versus 2018. 7 37 is a very important program for us as well as our industry. And we are committed to serving Boeing as it deals with the current serious situation. As reported, Boeing is actively engaged in fixing the issues and working with all involved, including many regulators to get this plane back in the air as soon as possible. For the comments, let me remind everyone that roughly 40% of our content on the 737 platform goes through Spirit AeroSystems based in Wichita, Kansas, which is not cutting current production rates as previously announced.
For Boeing Direct, we are working closely with them and balancing support of their current rate requirements, while also ensuring readiness, risk mitigation and alignment to the planned forward rates. In addition, our team is actively engaged with Boeing and adjusting current purchase orders as required. Due to our diverse customer base across Ducommun with a broad array of platforms served, we continue to anticipate 5% to 7% revenue growth across our commercial aerospace programs for the next 3 to 4 quarters. The longer term outlook after that is dependent on the timing of the 737 MAX returning to service and Boeing's new production schedule. We ended the quarter with another record backlog of 884,000,000 dollars and a book to bill of 111%, again underscoring the strength of our customer relationships, the value we provide and the technology offerings.
In addition, our work to improve profitability continued. Overall gross margins rose an impressive 2.90 basis points year over year to 20.7%. Our op margin reached 7.4 percent, while we posted $21,700,000 of adjusted EBITDA. Results were particularly strong within our Structures segment, where operating margins reached 11.9% due to the many actions taken in 2018 to streamline the business. The segment also benefited from higher overall production rates, additional content, lower scrap rates and the associated economies of scale.
In Q1, the company continued to build our innovation processes and a company culture based on lean principles. We've identified additional future operational improvements and ways to reduce working capital, particularly with regards to scrap and inventory. We're underway to significantly improve those areas. Assessing the business and optimizing all our resources is something done continuously at Ducommun. Even as we invest in our technology, operations and most importantly our people, become world class in everything we do at the company.
Our 2 recent acquisitions are also adding value to the organization and helping our growth trajectory. We continue to look at additional opportunities that can leverage our applications and strengthen our proprietary technologies offerings to the industry. I think we have also demonstrated to investors in the marketplace a strong track record of integration and driving value once acquired and look forward to more activity in the future. Now let me provide some additional color on our end markets, products and programs. Beginning with our military and space sector, we posted 1st quarter revenue of $76,700,000 up 21% from last year, primarily reflecting stronger sales across a variety of missile applications.
Aside from significant growth across such programs as the Patriot, we also noted positive trends with certain military helicopter platforms and the very important F-thirty five Joint Strike Fighter. Other areas of our defense business were impacted by order timing and transfer of production to Huntsville from our Phoenix facility, but we anticipate higher shipments in the coming quarter. The overall market for our military applications looks bright, given our proposed budget and includes increased spending for various missile programs along with solid demand for the F-fifteen, F-eighteen and F-thirty five as well as certain helicopter platforms. We ended the quarter with a military and space backlog of around $347,000,000 near record levels. Within our commercial aerospace operation, operations 1st quarter sales rose approximately 16% year over year to 85,500,000 dollars As I mentioned a moment ago, growth was primarily fueled by large, fixed wing, narrow body aircraft such as the Boeing 737 and Airbus 320 family.
We also saw some nice double digit growth on the Boeing 787 platform driven by an increase in build rate from 12 to 14 airplanes per month. In total, our large fixed wing business grew 25% year over year. In addition, we're experiencing uptick in our regional business jet business driven by Gulfstream and other OEMs, where we expect further room for content expansion. I do want to provide an update on our VersaCore composite technology as well. The team remains on track with our 10 year $200,000,000 contract supplying the cell components and are preparing our Guaymas, Mexico facility to begin full production in 2020.
Wins such as this and contributions from our recent acquisitions strengthen the outlook for Ducommun, while diversifying our base of business. The backlog within our commercial aerospace grew to just under $500,000,000 at the end of the quarter, representing another new record for the company. We remain upbeat about the outlook for Ducommun's commercial business this year. Given the platforms we serve, our customer relationships and the value provided through our technology and breadth of product offerings. With that, I'll have Doug review our financial results in detail.
Doug?
Thank you, Steve, and good day, everyone. As a reminder, please see the company's filings and today's press release for further description of matters under discussion during the call. I'll begin with details of our overall results. Revenue for the Q1 of 2019 was 172,600,000 versus 150,500,000 in the Q1 of 2018. This performance includes 13,100,000 primarily reflecting strong demand for various missile programs and $11,900,000 of higher revenue with commercial aerospace customers due to increased shipments for key narrow body platforms such as the Boeing 737 and Airbus 320.
Ducommun's overall backlog was approximately $884,000,000 as of March 30, up slightly from the start of the year end and as Steve mentioned, a new record for the company. As a reminder, the company defines backlog as potential revenue and is based on customer placed purchase orders and long term agreements with firm fixed prices and expected delivery dates of 24 months or less. Moving to gross profit. Our gross margin was 20.7% in the first quarter versus 17.8% in the prior year's comparable period. The increase of 2 90 basis points year over year was primarily due to higher production volumes and favorable product mix along with the many streamlining measures taken last year as Steve discussed.
SG and A was $22,800,000 in the Q1 versus $19,300,000 in 2018 with the increase primarily reflecting higher compensation and benefit costs. The company reported operating income for the Q1 of $12,800,000 or 7.4 percent of revenue compared to $5,300,000 or 3.5 percent of revenue in the prior year period. The year over year improvement was due to higher revenue and gross profit as well as the impact of $2,200,000 in lower restructuring charges, partially offset by higher SG and A. On an adjusted basis, operating income was $7,400,000 or 4.9 percent of sales in the Q1 of 2018. Interest expense was $4,400,000 in the Q1 of 2018 versus $2,900,000 last year.
And this was due to the greater utilization of our credit facility for the Certified Thermoplastics acquisition in April 2018 along with higher interest rates. The company reported net income for the Q1 of $7,500,000 or 0 point 6 $6,000,000 or $0.22 per diluted share for the Q1 of 2018. The year over year increase was primarily driven by $8,900,000 of higher gross profit. Restructuring charges were also lower year over year by $2,200,000 offset by a $3,500,000 increase in SG and A, $1,500,000 of increased interest expense and greater income taxes of $1,300,000 Adjusted net income was 4 point $4,000,000 or $0.38 per diluted share in the Q1 of 2018. Adjusted EBITDA for the Q1 of 2019 was 21 $700,000 or 12.6 percent of revenue compared to $14,500,000 or 9.6 percent of revenue for the comparable period in 2018, an increase of 50%.
Now let me turn to the segment results. Turning to Electronic Systems segment. Our Electronic Systems segment posted revenue of $84,200,000 in the Q1 of 2019 versus $82,400,000 in the prior year period. These results reflect an $8,500,000 increase in sales to our military and space customers, dollars 3,800,000 of lower shipments within the commercial aerospace market reflecting order timing and $2,900,000 of lower sales in the industrial end use market as expected. Electronic Systems posted operating income for the Q1 of $9,200,000 or 10.9 percent of revenue versus $5,700,000 or 7% of revenue in the prior year period.
Excluding the restructuring charges last year, electronics adjusted operating margin was 7.6% for the 2018 Q1. The year over year margin improvement was due to manufacturing efficiencies and product mix. Our Structural Systems segment posted revenue of $88,400,000 in the Q1 of 2019 versus $68,000,000 last year. This year over year increase was due to $15,700,000 of higher sales across our commercial aerospace applications, particularly large airframe single aisle platforms and $4,600,000 of increased revenue within the company's military and space markets. Structural Systems posted operating income for the quarter of 10,500,000 dollars or 11.9 percent of revenue compared to $4,400,000 or 6.5 percent of revenue last year.
Excluding the restructuring charges, Structures adjusted operating margin was 8.7% for the 2018 Q1. The year over year margin improvement reflects higher operating leverage, manufacturing efficiencies and product mix. CG and A, corporate, general and administrative expense for the Q1 was $6,900,000 or 4 percent of revenue versus $4,900,000 or 3 0.2 percent of revenue last year. The year over year increase was primarily due to higher compensation and benefit costs of 1,600,000 dollars Now turning to liquidity and capital resources. We used $1,700,000 of cash from operations in the Q1 of 2019 compared with generating $10,300,000 of operating cash during the Q1 of 2018.
The change year over year was due to a decrease in accrued and other liabilities for incentive compensation payments that were substantially larger in the current quarter compared to 2018 Q1, and this was partially offset by higher net income. We expect more typical cash flow patterns for the remainder of 2019 and excluding any unforeseen acquisitions anticipate using operating cash flow to further reduce the company's leverage this year. In terms of capital expenditures, we spent $3,200,000 during the Q1 and expect to spend approximately $15,000,000 to $17,000,000 in 2019 to support our new program wins. We're very proud of the Q1 performance, which puts us on track for a very solid year ahead. With that, I'll now turn it back over to Steve for
his closing remarks. Steve? Okay. Thanks, Doug. Before we turn over the call for questions, just say a few words here.
1st quarter's performance really reflects a lot of the initiatives we implemented over the last 2 years. So I'm absolutely thrilled. I set out to streamline the organization, bring in new talent, focus the team on providing excellent customer service, while vastly improving the bottom line results. Given the current outlook for the diverse array of platforms we serve, both the defense and commercial aerospace sectors, expect the company will continue expanding its market share, post solid margins and drive solid top line growth. In addition, Ducommun will also work as in the past to enhance and optimize our product portfolio to provide innovative, value added applications and ensure repeat business, attractive results and a solid return for our shareholders.
So in closing, I think we're off to a great start in 2019. And as always, I want to thank our shareholders for their continued support. With that, operator, let's now open up for questions.
Thank Our first question comes from Edward Marshall of Sidoti and Co. Your line is open.
Hey guys, good evening, good afternoon. How are you?
Hi, Ed. Good,
Good. So the start of the focus I'd like to start with is the commercial revenue within structures. Pretty good bounce back there on the revenue. I'm curious, if we look at that 5% to 7% growth that you talk about for the next 3 to 4 quarters, it suggests a significant or material slowdown from the $72,000,000 that you did in this quarter. I'm just trying to get a sense as to what you're trying to tell us kind of how the run rate works for the remainder of the year etcetera and this is specifically commercial aero within aero structures?
Sure. So we had a really strong quarter, really three things driving that. Of course, we had the acquisition of CTP that wasn't in the Q1 of 20 18, which added to that growth. And then you had the rates going from 47 to 52 on the 737, 12 to 14 on the 787 and then of course the A320 for us while the newer program rates increasing significantly there. So the comparison in the second half get a little tougher just because we won't have that necessarily rate impact at least on that major platform, the 737 at least for now pending resolution with Boeing and the regulators.
So I think we're trying to moderate that the compares get a little tougher in the second half in that part of the business.
Okay. So this is kind of the run rate you somewhat expect maybe not the growth rate but the run rate you kind of expect that $70,000,000 plus for the remainder of the
year? Correct.
Okay, good. You mentioned and you gave some good color on the MAX and talking about being your biggest platform. I'm curious, I know there's been several comments from suppliers from Boeing. I guess the way I'll ask it is, were you originally at the 50 2 rate? Were you able to produce and where the Tier 1, Tier 2 suppliers above you, were they producing at the 50 2 run rate per month on the 737 MAX?
Yes, this is Steve. I mean as far as we could tell, we were pretty much you're running at 50 2, okay. I really can't speak for the 1st years or what else is going on up ahead of us, but we were pretty much meeting rate That's we saw the revenue.
And when you think about your contingency plans maybe for the remainder of the year, depending upon how Boeing kind of sends out, what contingency plans, what kind of thoughts have gone through your head, furloughs etcetera to kind of work with the cost structure here as we think about the MAX?
Ed, we're actively working of course with our supply chain as we get new information from Boeing and working through this. Just again a reminder 40% of the platform revenue is going through Spirit with no rate impact. So on the remaining 60%, we're running through several different scenarios with our supply chain, our workforce and it's being managed accordingly based upon our biggest customers'
needs. Got it. And then finally on the electronics piece, I just wanted to comment. Did I hear that you said that there was a timing a shipment timing that caused the impact on the commercial side for Electronics?
That's right. That revenue was down a little bit. But if you look at the backlog, it still remains strong. The industrial revenue was down, but that was as expected. So it was purely timing on the electronics commercial work.
And if we look at the run rate for that business from the second half of last year and we think about maybe that $6,000,000 $7,000,000 delta, does that come in 2Q or does that spread evenly throughout the remainder of the year?
It comes back throughout the remainder of the year.
Thank you. And our next question comes from Ken Herbert of Canaccord. Your line is open.
Hi, good afternoon, Steve and Doug. Really nice quarter.
Hi, Ken. Thank you. Well,
I just wanted to ask again on the 737. I mean, it sounds you're pretty clear that you're shipping at rate 52 to Spirit, but it sounds like you're fairly ambiguous on what you want to comment on what your shipments are to directly to Boeing, probably somewhere shipping between 42% 52% or are you also at 52% on that other 60%?
Ken, I would say it's a dynamic situation. I mean, we've got literally hundreds of different SKUs and part numbers that are being worked through with Boeing. So it's evolving as we work through this. It's not at the either end of that spectrum. We don't view this material.
Yes. As we look at the whole year, we don't think it's going to have a material impact at 42 per month on the company as a whole.
Okay. That's helpful. And as you look at your supply chain on the MAX in particular, have you seen any changes in your suppliers in any maybe incremental risk that when rates do go up that there should be something else we should be thinking about in terms of either your suppliers or what you've seen at sort of the lower level of the supply chain?
No, nothing at this point. I mean, as a reminder, everybody was getting ready to go to 57 before this happened in midyear. So I think this is just a matter of taking a deep breath and stepping back a little bit, but we don't see anything that we can't manage with the supply chain.
Okay. That's helpful. And then if I could, you obviously had really nice growth, missile systems you called out and specifically your largest customer there, one of your largest customers Raytheon has had some execution issues and I know you're shifting work it sounds like from Phoenix out to Huntsville. But has that been at all an issue this quarter in terms of just your customers' execution? Or is that a risk here in the next few quarters that we should think about?
Or how is that impacting you if at all?
No, I don't think that really has a big impact on us. I mean, obviously, we're very focused on being sure we execute for Raytheon as one of our biggest customers. But we're low enough down in the supply chain that as long as we're getting our components in there, it's probably if there's an execution risk, it's probably higher up the assembly line within Raytheon itself.
And Ken, this is Steve. Part of that business in Huntsville is actually doesn't go to the missile systems
division, it
goes to another division. So it's not RMS.
Okay. So some protection there. Okay, great. And just finally Steve, you specifically called out some opportunities in scrap and inventory as you look to continue to sort of drive cost out of working capital. Can you provide any more detail on timing of some of that or maybe the magnitude of where you see
Ken, and 2020. We're just kind of getting started here. I really can't provide too much color right now as we're just putting the spade in the ground, as they say. So but I would say later 2019, but certainly 2020.
Okay, that's great. And just one final question. Just consistent commentary on sort of the M and A outlook for you. Have you noticed or anything you could comment on and maybe the sort of the opportunities you're looking at in terms of the number of opportunities or how we should how you're thinking about that pipeline maybe relative to coming out of 2018, and maybe where you're seeing opportunities or not seeing opportunities or any other color around that, Steve, would be great.
I think it's to answer that, what we see right now coming out of 2018 now, it's fairly steady. So we're as we've talked about, we have our model, we have our discipline around that and we continue to pursue things obviously, but I don't really have much more to comment on that other than we still see a decent number of acquisitions in the market.
Great. Thank you very much and really nice quarter again.
Yes. Thanks, Ken. Thank you.
Thank you. And our next question comes from Michael Ciarmoli of SunTrust. Your line is open.
Hey, good evening, gentlemen. Thanks for taking the questions here. Real nice quarter. Maybe Steve, not to harp on it, but on the 737, the MAX, I think you actually said, so that 60% of business that goes to Boeing, it sounded like you were adjusting some of your POs. And I was just wondering what else any other contract provisions you guys might have for these rate changes if they are going to step you down to 42?
Are you protected there? Is there pricing? Do you have any other provisions that might protect you from raw materials purchases that you may have made already?
No, I mean the framework on which we're working is really a set of agreements we've had in place for a few with Boeing. So there is flexibility for them to adjust rate up or down. And obviously with adequate notice, then we can react to that with our supply chain. So we're not seeing a huge impact on the company this year as these individual POs get adjusted as needed to meet Boeing's needs.
Okay. And then nothing either on so it sounds like this framework encompasses a range of 42 per month up to 57, so there's no flexing or shifting in pricing on product you're shipping directly to Boeing? No. Okay. Then just on I mean the margins were fantastic in this quarter.
I think it was a record. Was there any drag on the margins from that timing of revenue that didn't hit in the Electronic Systems segment? I'm just trying to get a sense of could they have been better? And should we expect this type of performance certainly with the operational improvement initiatives you have, should we expect this to continue going forward?
Well, I think on the electronics, we've been pretty steady in posting 10% to 11% operating margins in that business, it moves around quarter to quarter depending upon product mix. I think we were structures has been the real story that you've heard us talk about the last several quarters and trying to move that business from a high single digit as we exited last year to a double digit. And again, think with the volume we saw and the addition of CTP, there was a little bit of a tailwind for us. So we're moving in the right direction with that segment as well.
Got it. So there wasn't any drag from that timing at all that slipped out? No. Okay. Last one for me on the looking for content expansion.
I think Ken mentioned Raytheon, but the other big missile player out there, I know you've been trying to penetrate Lockheed a little bit more. Their missile and fire control is just kind of hitting on all cylinders. Can you just maybe talk about what else is being done to penetrate that potential customer there?
Yes, sure. So look, we have a relationship with Lockheed on the F-thirty 5. We certainly do work for them and we have I think, some real good progress. We actually are we have marketing initiatives now around Lockheed where quite frankly in the past we did not. So we are in Lockheed.
We absolutely 100% agree with your point about the opportunities for the missile programs and we are hard at work.
Got it. All right. I'll jump back in the queue. Great quarter, guys. Thanks.
Okay. Thanks. Thank you, Mike.
Thank you. And our next question comes from Mike Crawford of B. Riley FBR. Your line is open.
Thank you. Just to continue along with the MAX discussion, is it fair to say that the difference to Ducommun of a shipment rate moving from 52 to 57 versus moving from 52 if it moved to 42 and stayed there for a while, will be about $20,000,000 impact a year maybe?
For a full year, it could be that large if it stayed down there for that long because remember it's only 60% going direct to Boeing. And as you know, Spirit has signed an agreement with Boeing to be at 52 end of April of next year. So it would probably be a little less than that, Mike. Yes.
Okay. And then 2 kind of related questions. Well, I mean, if for some reason Boeing did stay down, then Spirit would stay at 52 until then, but then there would be some adjustment. Well, I guess that's more of an observation. But also don't you supply some Boeing 737 or at least Boeing content to Triumph?
Or is that is the 737 just Spirit and direct?
No, it's primarily what we supply to Triumph is very small. It's minuscule. It's on the 747 platforms, which as you know, they're really have mothballs for the most part.
Okay. All right. Thanks for that color. And then just can you remind us the difference in the $3,200,000 in CapEx you're showing in the statement of cash flows versus the $4,500,000 of CapEx you show on the segment breakdown on that schedule later in your 10 Q?
Sure. And the cash flow, it's cash actually out the door. You'll see later in the 10 Q the amount of PP and E that was not paid for in the quarter. So that's basically the difference. It's sitting in accounts payable as opposed to cash out the door for CapEx.
Okay. Thank you. Great. Thank you very much.
Okay. Thank you, Mike.
Thank you. Our next question comes from Christian Herbosa of Noble Capital Markets. Your line is open.
Hi, thanks for taking my call. Just one question for me. So on the last call, you mentioned that you had some success in growing your market share with Airbus and that you hope to build on that in 2019. Can you give us an update on how your business development efforts with Airbus have progressed so far?
Yes, sure. So just for background, I mean, until probably 2017 when I showed up, maybe a little bit before that, we really didn't do much with Airbus on the structure side or really any side of our business. So we continue to work with them. We're heavy in the A320 family, and we continue to build that relationship and build that book of business. I would just say good report going into the middle of the year.
We think we still have upside there as we go forward for further penetration of structures products for Airbus. So more to come.
Okay, great. Good to hear. Yes, it's all for me. Thanks for your time.
Okay. Thank you.
Thank you. And our next question comes from Becky Vincent of Vincent Enterprises. Your line is open. Hi, Steve. This is Becky Vincent.
My question is really about the unmanned aircraft market. Everything that you talked about seemed to be more for manned aircraft. I wondered if Ducommun pursued the autonomous aircraft market like General Atomics, Motorbrommen?
Yes. Thanks for the question, Jeff.
Yes. Thank you, Becky. We continue to look at opportunities there, although I will tell you that the vast majority of our business is on the large airframes just because of the type of materials that we're used to working with. We think there's some probably application with our new VersedCore composites technology as well as some the things we do in our electronics segment, but it's not a big part of our business today. Yes.
I mean we're not opposed to it. We're just we've got a lot going on right now and certainly, we always have our eyes open for new things down the road. So if something develops, we'll let everybody know.
Thank you. And our next question is from Michael Ciarmoli of SunTrust. Your line is open.
Hey, guys. Thanks for taking this one. I just wondered if you could comment, Steve, one thing you talked about looking for potential content expansion in the biz jet market. So what kind of you're seeing in that marketplace? And then I know you guys aren't going to look for any deals in the larger scale structure marketplace, but it certainly looks like there's a lot of, call it, turmoil there.
Triumph's got the announced strategic alternatives. I think Bombardier is looking at their structures business. So does that create more opportunities for you guys on the types of structures, smaller scale that you'd be looking for?
Well, let me handle the business jet first. So a lot of activity with G500, G600. We're also we also play on the 650. So we've got, I think, more momentum there with Gulfstream. And so I think that hopefully with these new programs coming on, we could get a little bit more content, a little bit more shares.
So that's the comment on that. Doug, you want to handle the other side?
Sure. Yes. So Mike, over time, we've seen our structures business evolve to where over half of it is now titanium based. And of course, we've got our new VersaCore composites coming on. So those larger big, aerostructure franchises that are in the market are not something necessarily that we would be focused on.
We like things that are a little bit niche here than that. So we're not really looking too hard in that build to print space of aerostructures. We think better prospects with some of the more niche things that we're doing right now.
Got it. Yes. And that's probably I was even thinking some of that niche year stuff, whether it was ducting or installation or flooring, but it sounds like you wouldn't even be looking at any of that stuff either.
No. We're happy with Steve. We're happy with where we are and we got our game plan. So we keep watching to that.
Got it. All right.
Sounds good. Thanks guys.
Thanks, Nick.
Thank you, Mike.
Thank you. And this concludes the Q and A portion. I'd like to turn the call back over to Mr. Steve Oswald for closing comments.
Thank you very much. Okay. Just first, thank you to everyone attending. We also thank you for your questions. As I mentioned in my remarks, I'm thrilled that we're really starting to see some benefit for all the hard work the last couple of years and showing you the numbers obviously.
I've got a lot of confidence with this year and we look forward to connecting again soon. So again, my thanks to everyone for their support. Have a great rest of the day and evening.
Ladies and gentlemen, thank you for your participation in today's conference. You may now disconnect. Everyone have a wonderful day.