Well, thank you, Noah. Good morning, everyone. Thanks for joining us this morning. I'm gonna go over a little bit on the company first. It's my first time presenting at Goldman Sachs, and so I wanna thank Noah and the team for having Ducommun and myself in, and I look forward to our discussion. You can see at the top there, this is our 175th year in business. So we're the oldest continuous company in California. We're pretty proud of that. Started as a general store in 1849 by Charles Louis Ducommun. So we had a wonderful year of celebration, and we had our best year in our history. So we're very proud of that. Just a little bit about the company. Top left, you can see our LTM through Q3. On the revenue side, our EBITDA margins, and our backlog. We're still shaded towards defense.
Coming out of COVID, we leaned heavy into our defense business, obviously, with commercial being down, but that's starting to moderate a bit. We have proprietary content that includes not only our engineered products, which I'll talk about, but also includes our manufacturing services businesses where we have trade secrets. So, such as our titanium operations and other things that we do at the Ducommun. Commercial aerospace, I know that's everybody's has big hope ahead for Boeing, and we certainly do as well. We have a very good mix on narrow body. We're volume people. Volume is good for DCO, good for our shareholders. We also have a nice franchise on business jets and wide bodies. Top right there, you can see the many things we're on. Pretty self-explanatory. We go across really everything in aerospace defense.
We're probably a little lighter on space, but we continue to work that area. You can see our customer base, and we primarily are a tier one, so we deal directly. Even though we're a small cap, we generally are dealing directly with the leadership of those customers, listed. How we go to market or how we sort of explain our story. We have Electronic Systems and Structural Systems. You can see the revenue there, the EBITDA margins, both for both businesses. On the left, we do a lot of things that are, I call it, kinda hard to do. So we do ruggedized wire harnesses for NASA and other types of customers. We do very complex circuit cards for missiles. We have a big missile and radar franchise. Radar just coming up. Do a lot of things on box builds.
The other things you'll see there is our engineered product businesses such as lightning protection. So we're the world leader in lightning protection for all aircraft, both defense and commercial aerospace, motion control businesses and to the right, you can see our Structural Systems business. This is a lot of legacy Ducommun, but things that I have purchased along with my team, such as magnetic seals, ammunition handling systems, and you can see aerodynamic enhancement products. So we built a and I'll get into that next. We built a very good franchise for engineered products, and I think that's a big part of the story as we go forward. Just to look back here, I started with the company in January of 2017. So I came from private equity. Before that, had a large, a big, or many years in large cap companies such as UTC and GE.
Pretty proud of our market cap. We've had a really nice run. People say, you know, okay, what's left? And we can talk about that with Noah, but we think there's a lot left for investors and for our company. Revenues, you can see, adjusted EBITDA. Our margins are, I think, continue to go higher. We'll talk about that in the Q&A. So overall, I think, despite COVID, despite the MAX crashes, despite lots of some drama there, I think we've had a really good run. The other message here for today, and we'll talk about that, is our Vision 2027 strategy. This is something I put together sort of coming out of COVID, sort of mid-2022. I finally felt like we could make some assumptions about the world. Most of the assumptions are correct other than Boeing. So Boeing was an assumption that didn't come through.
We thought we'd be much further along, and that's unfortunately not the case yet. Vision 2027, you can see on the left here, net revenues up to 90%, 50 plus. I think our margin story is excellent. We'll talk about that with Noah. We've had a nice, nice run on margins, and I think the 18% by 2027's in the cards as well as the adjusted OI of 13%. You asked me how we're gonna do that. Well, yeah, we're building scale in our commercial aerospace and defense businesses, strategic acquisitions. A lot of the things we do at Ducommun are, are price-based, so we're very strategic about our pricing, and, very thoughtful about that. We are doing facility consolidations, and we continue to drive cost reductions and better investments.
So I think overall, the Vision 2027, as I and 2024 with all of you in December, is pretty much where we're on track, and we're very happy about it. Here's one of the most important slides as well as our portfolio of engineered products. So this is something that I, when I came in 2027, I told my board. I said, you know, we're not gonna go anywhere unless we build this part of the business. The other businesses are nice, but these are the businesses that are gonna be great for us and great for our investors. So if you look across those different product lines, a lot have been acquisitions. I inherited a few. So if you think about Loar Holdings, you think about HEICO, you think about TransDigm, you know, this is what we're trying to build within DCO.
And I think we've had a good run, and we have more to come. When I started, we had revenues of right around 9% of engineered products, and we're over 20% already. Our commitment to investors is 25% by 2027. We think that's gonna be surpassed. So we got some good work already accomplished there, and our aftermarket mix as well continues to grow. And this is a great story for investors and for the company. We are taking costs out of our manufacturing services businesses. You can see up there we are, when the time is right and necessary, we are closing factories. We don't like to close factories unless it's something we feel is necessary, and we've made those decisions, and we're moving work to lower cost parts of the U.S., especially our California facility was very, very high cost.
That was a win for the company. We are moving to Mexico. I know Mexico is big in the news now, right? I know we'll talk about that a little bit with our new administration. I will tell you that there is some concern there, but the other good thing about DCO is we're a U.S. manufacturer. Okay. You know, 96% of our revenue is in the U.S. So we are a U.S. manufacturer. We have a little bit in Mexico, and that's it. We'll have to find our way with that. We're doing great work with Boeing and Airbus. My team was just over at Airbus this week for their major supplier meeting for what we do for them, the titanium work. Had a great meeting. We think Airbus will eventually get to 1,000 planes a year.
I know that's a big number, but I think they continue to put in assembly lines, and being an old manufacturing person, that's the first thing you gotta do. You gotta have the assembly lines, and everything else has to follow suit on that. So I think a good job on Airbus. Boeing as well. I mentioned this on the call on Q3 that we did a big share shift, and I'll talk more about that in the first quarter call, but or the fourth quarter call. But we're doing some very nice work on 787 with a big share shift from a competitor. So more to come there. Our defense businesses, we have offloading, which is a big deal for us on the left, building up our radar franchise.
RTX is putting a lot of their, I say their, critical radar circuit cards into our facility in Tulsa. And, that's a big win for us. SPY-6, Next Generation Jammer you might know about. And then on the right there, you can see the other work we're doing. So I think all good things ahead for us for defense. I talked a little bit about manufacturing services. This is the other part of the engineered product story. Then we have this. So we do, we're the world leader in titanium outside Toulouse. Circuit cards, interconnects, have a great stretch form and chem mill business. VersaCore is a product that we developed, a composite. So we have a very nice, services business that we continue to build. And then finally, just, and we'll speak to Noah in a minute here at some of our key investment highlights.
You know, we continue to build our proprietary product businesses. Driving cost, we've got more to do on M&A, which we're excited about. We are a tier one majority of our business. I think we're eventually gonna be in great shape with Boeing, both on 787 and the MAX. But, you know, we keep hoping, and it keeps not materializing. So hopefully, 2025, Kelly and his team will pull together. We've got a good defense business, only getting better. We try to build a moat the best we can around our manufacturing services business, and, you know, we try to do the right thing with ESG. And that's it. So I'll leave it there.
And, no.
Great.
Great. Okay. Thank you.
Thanks so much.
You got it.
Appreciate it. Appreciate that.
Yeah. Thank you.
So, you know, seeing you today and hearing you talk about what you're doing at the company, I mean, I kind of wanted to just get an update from you on where you feel you are in your transformation process. It's a hard question to ask without it being super high level and encompassing multiple things. But, you know, you've been at the company, I guess. Yeah. Seven, eight years now. Yeah. And you have the Vision 2027. And it seems to me that you're high grading the assets, more engineered products, more aftermarket.
Right.
There was some latent pricing, and there's cost, and those are maybe, I guess, the three main levers. So I guess, are those the focus areas? Which ones still have the most room to go?
I guess, how do you kinda manage the literal just day to day? Like, what are you doing day to day on each of those items to move them forward?
Yeah. Well, great. Thank you for the question. First, I just tell you that, after six years, I finally have the right team. So I think that's important 'cause, I'm on my third CFO, and I think we have our right guy now. So I think it's important for investors to know is that you have a very strong team. We're a very tight team. So I think that's, you know, so square one for me as a leader, as and as running the business. As far as, you know, my tenure at DCO, yes, it's almost heading into another year.
I mean, my view is that we still have a lot to go. I really think it's much more around building our engineered products and aftermarket businesses. I mean, we really, you know, if you look at ours, that's the slide I showed you. I mean, we've been very successful with our acquisitions. We have the right formula. We tend to be, you know, folks like to sell to us because we tend to be. We're not gonna change the brand. We're not gonna, you know, consolidate facilities, you know, to any extent. You know, families are worried about that. We buy a lot from families. We buy a lot from sons and daughters of founders that have passed away. I mean, those are the kinda companies we find, and we have a really good track record of winning those 'cause it's hard.
It's hard. So I think that on the, you know, trajectory of the business, I feel, I feel very, very good about, you know, we're just, we're probably 30%-40% because, you know, this engineered product story is gonna be the next story for the next 5 to 10 years. I mean, we have manufacturing services businesses. They're nice businesses. They, you know, they, they generate, you know, good income. You know, they generate other things. But, and we'll continue to, you know, ride that up with Boeing and Airbus, and we'll consolidate facilities, and we'll do all the things, you know, very positively. But, I think that, it's, it's early for me at least.
Okay.
You know, if we didn't have the, that engineered product story, I, I don't know if I have a right. We, we have a tough conversation.
Right. There's only so much you can do on price and cost.
Exactly. You know what I mean?
There's a lot of room on changing the assets. I guess, how much of that are you doing organically versus through acquisition, and how hard is it to do? I mean, on the one.
Yeah.
I guess, on the one hand, for me, when I see you talk about TransDigm and HEICO, and, you know, those companies have engineered products or proprietary sole and dual source percentages that are, you know, not far from 100%. Your guys' target is 20%, 25%, maybe 30% eventually, so part of me feels like, why isn't that higher?
Yeah.
But I guess, on the other hand, it's hard to break into those, so how do you, how do you break into that?
Yeah. It's hard. I mean, you know, lobbies are crowded now.
You know, when I was in 2017, when I was talking about it, there wasn't as many people talking about it. Now when I read from my colleagues and other, you know, my peer groups and everything, everybody kinda has the same idea about engineered products and aftermarket. So it, it is, it is tougher, that's for sure. But, you know, for, to me, we, it's over 50% of our organic growth for these engineered product companies we're doing right now. So that's a really positive thing. I mean, we're magnetic seals, and all these other things that we bought are really flourishing. You know, we are driving pricing. So, so that's an exciting part. And then the other part is, you know, we're out there hustling, trying to find new things to buy, you know. And, you know, we, we have our formula. There'll be no surprises.
I mean, we're gonna basically buy the stuff that you saw on that slide. Okay. So there's gonna be no, nothing like, oh, why did they buy a circuit card company or why did they do this? No. We were very committed to that. And that's, you know, if we could ever get the 40% or 50% with our multiple, you know what I mean, and, you know, show that type of margin. And I think that's where I'm heading.
Are you doing any of it organically, just internal R&D, or is it almost entirely acquisition?
No, that's a very good question. No, we are doing internal R&D. So for instance, you know, we're developing new magnetic seals. We're developing new ammunition chutes at Nobles. So we have real companies with real engineers. We bought them. They were smaller.
We come in, we put capital in. You know, they work for us. They get the Ducommun model. They, you know, sometimes you have to coach up some of these leaders 'cause they've worked for the son and daughter. And you know what I mean? They're not used to working in a corporate environment. So we've had a lot of success. A lot of success.
Okay.
Yeah.
You mentioned the tariff point.
Yeah.
And so let's talk about that, I guess. Yeah. How far along are you in the Guaymas move? And I guess, yeah, as a CEO, how are you thinking about it?
Yeah. You know, look, I was at AIA, which is the Aerospace Industries Association. I'm on the Board of Governors. I was there two weeks ago in Washington, you know, for our meetings. You know, we have it twice a year.
I'll just tell you, everybody that comes in there, nobody knows what's gonna happen. You know what I mean? It's like, you know, no one knows. I will tell you just, you know, our Mexican operation is 4% of our revenue this year. So 4% is not 40%. You know, so no one really knows. We did expand our Mexican facility because we have great productivity down there. We do a lot of handwork on MAX spoilers, and we do a lot of handwork on the Tomahawk cabling, those types of things. And that's where we wanna put those things. So we're, there's a little bit of uncertainty right now. But I will tell you, as I read about St. Bernard's and other places, is that, you know, we are 96% a U.S. manufacturer.
Okay.
So I think that's a very big positive for us.
Do you save more on the cost side in that move than a 25% increase from a tariff?
It might be a total wash on that.
Yeah.
You know, 25's a big number.
But I guess the cost savings is already in your margins, or is it?
No, it's not yet. No. We haven't started yet. Okay. You know, 'cause you remember just on this Tomahawk move, which is a, you know, massive $50 million order, you know, these Tomahawks, and we're selling them now to the Japanese and the Australians. And, you know, we've kinda let that weapon out to other allies. That's all gonna be done now starting next year in Guaymas. Okay. 17 cables. It's a big number.
The spoilers we did in Monrovia. Half of that, you know, is all going down into Guaymas now. So I mean, at the end of the day, the productivity in Mexico is about 30% higher than here.
Okay. So if we take the snapshot of where your margins are right now, and this is 4% or 5% of what you do, and the cost savings could be about equal to the numbers that are being tossed around for tariffs, it's unlikely that it's some huge incremental headwind to your margins.
Yeah. Yeah. Absolutely not. Whatever, yeah, whatever I heard in Washington two weeks ago, and, you know, I'm not losing sleep over it. Am I concerned about it? Yes.
Right.
But, you know, with the materiality and what we're doing down there, it's not anything I'm uptight about.
And then maybe, talking about pricing, I mean, a lot of times we see these, well, there's been other transformational stories within the aerospace supply chain, especially if you can, if you have aftermarket, where there's pricing power and where, you know, a good operator like yourself comes in and discovers that there's a latent pricing that had not been fully taken advantage of for a long time.
Right.
And then if you can renew contracts and flow that through, and it's 100% incremental margin to the bottom line, that's really powerful. Are you finding that? Did you already find that? Is that still ahead of you?
It's probably 50/50.
Okay.
Okay. So one thing we do do, and I'm sure you'll hear this from my peer CEOs, whatever, generally when you buy a small company that's family-owned and, or that's, you know, it's undermanaged.
One of the things undermanaged is pricing. Okay. They really, there's not the, there's not the sophistication level on pricing. So generally when you buy a company, and like we did this with the companies that we bought, there's latent pricing in there that you immediately take in the first year or two. And, and, and we've done that. The one thing, and getting back to HEICO and TransDigm, you take a look at our lightning diversion strip company. I mean, we're a 90% market share in the world. Okay. So that's a good example of when you think about us and think about the others, is that, you know, we're, we're sole sourced, and, we take advantage of that each and every year.
Okay. And you, the 50/50 is in terms of how much was available and how much you've bought.
Exactly. Yeah. Yeah. Exactly. Yeah. Yeah.
In your aerospace business, you've talked about increasing content on 787.
Yeah.
Maybe detail what was behind that and how much market share gain opportunity.
Sure. So, you know, we have a fairly large titanium operation that we basically buy titanium sheets, and we hot form them or we put nitrogen in them. It's very complex. It's for nacelles. It's for, you know, for different parts of the plane. Obviously, a plane wants titanium because it's strong and it's lightweight. Right? So there's a big titanium, you know, play there. And it's very hard to do. So you have smaller companies who take on big contracts in France, for instance, and, you know, Spirit and these other folks get involved with them, and then, you know, they place the orders and they can't get the parts. Okay.
So that's where we step in because we're pretty much 100% on time to Airbus. We're pretty much 100% on time to Boeing. The way we structure our company is that, you know, we have a site that might be 150 or 200 people, and that's all they do is titanium, you know, every day. All right. So we don't have a circuit card business in the corner. You know, we have these centers of excellence. So as you know, we're not really any new planes coming other than the 777X, which we really don't have much interest in. So we're all about building the share on these programs. And that's a big story for us because we can, you know, demonstrate our value and then gain share from competitors. I think that's the main story there.
Okay.
Yeah.
Maybe it'd be helpful to talk about what, how you've been shipping to Boeing as they have had their challenges and the strike. What did they have you do on the MAX? What are you shipping to on the MAX at the moment? And I guess what's your view on how quickly Boeing can ramp back up as we move into 2025?
Yeah. Boeing, Boeing's been a real challenge for DCO. I mean, we'd be $20 million-$25 million ahead right now if I looked at, you know, when we talk about latent revenue, you know what I mean? There's, and that's all coming. Okay. But unfortunately, you know, we've been told many, many times about this and that, and it's never come through. And okay, that's in the past. Right? But, you know, there's a couple of issues that we're gonna see now.
So we're gonna, we're definitely gonna see a better job by them, I hope, 2025. But, you know, if you go and you look at, you go out to Wichita, and you look at Spirit, and you look at all the fuselages that are stacked up, okay, they used to be like 90 of them maybe. Now there's like 150 a year, you know what I mean? So, you know, Spirit didn't slow down building fuselages. So there's gonna be some destocking, and Spirit is part of our, customer base for, for titanium and structures. So, so I see that I'm hoping that Boeing can, you know, break 32, 33, 35 next year and then hopefully get through the destocking. so, you know, that's, that's our hope for, for MAX. But it's gonna be a, it's gonna be a tough year next year for MAX.
I don't think. I think 2026. I mean, Kelly Ortberg's got a lot to do. Thank God the strike is over. But you know, for me, you know, it's all about culture. It's all about, you know, driving, you know, the right behaviors. And you know, what, 40% of the people or 38% of people voted against the, you know, so there's a lot of yeah, unhappy people in the weeds, you know what I mean? So, but the bright spot though for Boeing is 787. And as you know, you're probably flying 787. It's a real bright spot. The book is solid through 2027. And they're gonna finally, I think, get through all these repairs on a bunch of planes they made, and they'll have two assembly lines going for all new builds, you know, hopefully by the middle of next year.
And that, that'll be a way 'cause if Boeing gets to 10 on 787 a month, that's real money for Ducommun.
On the MAX, what were you shipping to before the strike?
Oh, we were in the 20s, 22, 24.
Okay.
You know, and I have to tell you that, you know, we're on a pull system at Spirit.
Yeah.
And that's over 50% of our MAX. All right. So we're like, 'cause we make everything in Kansas. They're close. We were big suppliers there. We ship direct too. But a lot of the things, you know, scrub plates and parts in the nacelles and everything and skins. Now we just picked up the skins, which we're gonna start now, the aft fuselage skins. So we're about 22, 24.
But, you know, you would get a pull for a month of Spirit at like 32 or 33, and then you get a pull of like 20. Right. You know, it's a very, you know, it's a little over the place. Yeah.
Boeing and Spirit were pulling 20 to 30, kind of all of last year when they weren't producing that all of last year. And then there was a strike.
Yeah.
As you alluded to, there's been a decent amount of inventory built in the system. Are you guys as Ducommun able to track, even within a range, how much of your product is in the channel that has to be destocked before you would then be just shipping to rate again?
Or is it just like.
We don't have a great sense. We have a decent sense. You know what I mean?
What's your sense in terms of like how many months it would take to destock it?
I think, you know, the MAX destocking's gonna be at least six months.
Okay.
Yeah. I think six months is right. I think, you know, look, when Seattle was on strike, Spirit was still building. Right. Because they were like, you know, what if we let people go again? You know what I mean?
So maybe Boeing, you know, works its way back to 30 by middle to, you know, later parts of next year, but they'd probably still keep pulling from the supply chain in that window of time 'cause they're not gonna send you to zero.
No, absolutely not. No.
So then it seems like if you're a supplier to the MAX, your revenue is probably down in 2025 on that.
It's gonna be flattish.
Flattish.
Unfortunately, yeah. It's gonna be flat. I, that's how we see it in the world right now. You know what I mean?
But then the rest of aerospace original equipment grows at that?
At some level. Yeah. Hopefully the 787 will get more life and everything else. So, you know, we're hoping for that. But yeah, it's a, I think next year's a transition year.
Okay.
Because of the destocking.
On the MAX?
On the MAX.
Okay.
Not just on the MAX. Yeah. I think that's. I'm a little more hopeful than that probably. But and looking at it today, it's probably transition year, sort of flattish.
Okay.
Unfortunately.
Yeah. No. I mean, it is what it is.
Yeah.
Okay. And then on your defense business, maybe talk about that in general and what kind of growth you see in the medium term. I know there's a lot of crosscurrents. We have, you know, outlays were catching up to authorization.
Yeah.
Now authorizations sort of flat. Maybe there's DOGE, maybe there's not. You have a lot of your own company-specific programs.
Right.
Some new ones that are ramping. I don't know if you have what's rolling off. How does that all boil up to a medium-term defense outlook?
I think overall it's good. I mean, we're, you know, one of the things that I mentioned this in the presentation is that we're much bigger now in radar than we used to be. Okay. We used to have really a real franchise in missiles. We still do. But now we're really picking up on, you know, this SPY-6. So the SPY-6 is sort of the new radar for the Navy. All right. So it does everything. Okay. It has incoming. It has. It could send, you know, things out, you know, for counterattacks. It's gonna be going on most of all the Navy ships in the Pacific, you know, for the Chinese threat. So, and that is sort of the crown jewel of RTX radar.
So that's gonna be a big thing for us going forward. So radars, see the jammer here. You know, we still like our fixed wing, even though the only one that we talked about this on the call is the F-18. As that winds down, that hurt us a bit. Okay. Not anything substantial, but you know, maybe $5 million a quarter headwind. And we're rolling through that now. Most of that's already in the P&L. So, but you know, I don't know, the DOGE or whatever the initiatives are. We'll have to just. That's something I can't really get my head around yet. I know there'll be things happening, I'm sure. But I think overall defense products have a little bit of a moat around them. Okay. We make things that are hard.
We make things that it's kind of tough to move, and, and that's what we want. You know, we really, and we built the company that way so that we can have pricing power at some level, you know, every time we go see the customer.
Okay. You've had a lot of work with Raytheon. I think on the last call you talked about more work with Northrop. I mean, you know, you're still relatively small in terms of your revenue as a percentage of, you know, as a percentage of these companies. Are there significant market share gain opportunities where you can grow your defense business regardless of?
Yeah. That's a great, great question. I was just at Northrop Grumman two weeks ago in Baltimore. They have, that's their major electronic radar system.
So that's their radar system for the F-35, for the G/ATOR, for MESA, you know, for all these different products. And it couldn't have went better. I mean, we really, you know, we really have a strong relationship with Northrop, a lot of trust. We do a lot of things for them now, and that's continuing to grow. So we're very excited. Like I, when I came in here a long time ago, I was looking at our Raytheon business, and it was like this, and everybody else was very low. And I said, "What are we doing here?" You know what I mean? We need to build scale at some of these other major primes. And I think we finally kind of broke the code. And people say, "Well, how long does it take, Steve?" It takes a couple of years.
It doesn't, it's not just six months. So we've been working on this for a couple of years. They were our second largest customer in Q3 in revenue, Northrop. So that's real. It's not just something I wish for. So that's actually starting to grind higher. And I think, you know, L3Harris, Lockheed's always tough, you know, but we do what we can there. So I think there's other primes that we can continue to work on. But Northrop is really the one where I feel like we have the best cultural fit with DCO as well. I mean, you know, Northrop will pay you for value. And not everybody will.
Okay. All right. We have just a few minutes left here. Why don't I see if there's, yes, a question up front here? Yeah. Why don't you wait for that microphone?
Lloyd Khaner, Khaner Capital. You mentioned earlier that Mexico's about 30% productivity gain when you manufacture down there. Can you give us an idea? Is that labor and other things? And then the second part of the question is, in your 2027 target, margin target, how much of the, how much of that is based on manufacturing in Mexico at higher productivity rate?
Yeah. Good question. The 30% is pretty much all labor. Hate to say it. Just so you know, we had a fire in Mexico. Okay. We had a fire during COVID. That was another thing I had to deal with. Okay. And so I moved all the work from Mexico up to California. And I said, "Okay. Let's," 'cause we had to do it. Right? It was a short term. So, you know, and the guys came back.
They said, "What's going on?" I said, "We can't make any money." They said, "What do you mean you can't make any money?" I said, "It's too expensive. You know, the productivity's 30% lower." So then we built a new plant, and we got everything back there now. So we're good, and we have the right systems now for fire prevention, whatever. So not to worry there, but it's all about labor, unfortunately. That's where we are. As far as Mexico and this client, it's very little for the 18%. I mean, it's, you know, maybe 50 basis points, 25 basis points. I mean, not anything where, you know, the big thing for the 18% was the closing of the factories in California. It's a big deal. And Berryville, moving the work down there, which you get some arbitrage. Right?
You know, not only on, but material is usually 60% of the game. The materials, you know, the connectors and the circuit cards and the cabling and whether you're doing it in Mexico or, you know, we try to do something locally, you really don't have that much opportunity. Unfortunately, I wish we did. I wish we could buy things that were cheaper and not have to go to Amphenol and some other places. But, you know, that's what's spec'd in. So we have to do that. But, there's some, but nothing, no, not, not a big rock. So thank you for the question. Yeah.
Maybe just to wrap up on, you alluded to. We've talked about your M&A platform. You alluded to the lobby, the busier lobbies. Yeah. What, how's the, is the pipeline right now more, more robust, less than 6-12 months ago?
Are valuations any different? Does a more deal-friendly administration matter? How do you expect that's all on hold?
Thank you. Thank you. Well, look, you know, multiples remain high. You would think they would be. Right? Because these are businesses that are highly valued and, so, and it's competitive. So, you know, not crazy high, but high enough. So, we're sort of in the $120 million , $100 million dollar, you know, maybe $150 million to stretch, sort of like, you know, deal levels. So at least from the administration standpoint, I mean, if we do a deal at $80 million or $90 million, that won't be reviewed. So that's not an issue for DCO. So that's positive. Either way how this thing turns, I'm sure it'll be more friendly. But it's the deal flow has been good. Hasn't been great, I would say, this year.
It's been good, and we continue to stay aggressive. My CFO, who I mentioned earlier, he's also running CorpDev for us, and he's been with me for 10 plus years, and he's the one that did all those deals. So we still have all the continuity of the team. We still have the recipe. We still have the process. I'm very involved when I have to be because, you know, again, when you're buying these small companies and this is their dad's, you know, legacy or something, okay, they wanna, they wanna sell to someone that they're not gonna lay off, you know, Jim, who's been with dad for 40 years. They just don't want that. And I wouldn't want that either.
So we have a little bit of an edge there versus a big private equity firm and, you know, maybe other things 'cause we do compete with Arcline and other places. You know, we, we're in there with that type of level. So, but anyway, it's a, I think it's all a good story, and, we're excited for the future.
Awesome. We're just out of time now. So why don't we wrap up there? Thank you so much for being with us today.
Great. Great to be here. Thank you for listening. Appreciate it. Thank you.