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ATRO Astronics

Participants
Deborah Pawlowski Kei Advisors LLC, Investor Relations
Peter Gundermann Chairman, President and Chief Executive Officer
David Burney Executive Vice President and Chief Financial Officer
Jonathan Tanwanteng CJS Securities
Michael Ciarmoli Truist Securities
Dick Ryan Colliers Securities
Call transcript
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Operator

Greetings and welcome to the Astronics Corporation Third Quarter Fiscal Year 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I'd now turn the conference over to Deborah Pawlowski of Investor Relations. you. Thank

begin. may You

Deborah Pawlowski

good We and us you're here today. morning Darryl appreciate everyone. joining Thanks

with Peter Officer. me and call the On are Dave our CEO; Gundermann, Burney, Chief Financial and President our

third You a we earlier website find morning should this at can financial if you on copy our released not, have and them results quarter of astronics.com. which XXXX our

statements other as discussion, well factors Let These apply and from Q&A forward-looking risks statements actual other some we may the with with earnings me are Exchange to make today. the that events what and uncertainties mention first future uncertainties differ during the to our is as other formal factors are you're documents filed session. that materially risks could as likely and cause and provided These as Securities aware here well is Commission. that as to well during stated subject in results release, as

at the You documents find can website on or sec.gov. our

we will non-GAAP in today’s will financial evaluating our During useful these believe also be call, We performance. measures. some discuss

in not information of GAAP. consider presentation a prepared or accordance this the for additional with should in substitute You results isolation

release. provided turn begin. tables with in measures We that of let it Peter? that, comparable measures accompany GAAP reconciliations have over non-GAAP to to today’s With me the Pete

Peter Gundermann

and everybody. you, morning good Thank Debbie

quarter. a agenda Our quarter third this morning is mixed the which was to again, review

read sales was release, were income press If statement. the as you've light the

consolidated strong, very the were book-to-bill X.XX. bookings hand, with other the of On

far a in a couple some to events. facility expectations and in the in the have which results our but conversation us quarter, close award kind quarter. an details, event It'll some the which Also throughout we pleased fourth bookings, We'll have had be happened very fourth subsequent statement, on. be we and a So quarter a which about. the impact another the on will late the to sold impact AMJP is to spend our our in forward which quarter, point reflected can time first is the bigger little at between statement. discussion will today cash income and through the on a fourth of disappointing we going quarter XXXX, minor go we Dave also bit And provide discussion a to vacillate at third of income basically with we're cash reviewing although sprinkled much will be worthwhile not guidance where significant quarter, will as of of point. can this going see as we're

guided at summary, QX sales release with were So $XXX million. $XXX quarter to million. to million $XXX disappointing We of our sales second

And target. smaller long recurring a our is for and to are components use products. So, was figured personnel companies. shortages. we from theme $X supply We The a missed secondly, about bunch obviously chain challenge, somewhere of that hit or in own challenges $XX range. frankly, million supply the related, quarter chain heard the million talk you've to big probably can for lead from leaves short, of electronic of and a a us to changes short-term out. able how unpredictable customers. requests we assemblies lot of in story But times plays through And specifics respond and we less extended lot that the the our And

the a customer quarter. course constant of over base among our there's So, the churn

supply when a can't out chain to Sometimes acting little things but in, That's the way want not these could, bit. respond if a I problem, we our they was normally pull want to push normally. things we days

third look range, and at the that's that at backwards if million the you So, that accept guess frustrating to $XX or quarter. above our million us $X number, puts I predicted

problems trying to be revenue to we right bring had now. we're terms our actively supply some That third our We the improvement the revenue up company, revenues X,XXX it in to previous over were. about comparable X,XXX, at comparison income but In show but the like are resources. in quarters. in what pales levels on quarter, hurt Weak of bottom across would does some people and obviously, shortage personnel, impact the the chain line about statement

the EBITDA adjusted drove Test, second that The of positive mix than $X.X more quarter. $XXX EBITDA the million Aerospace months of run unfamiliar, revenues similar ago, qualifications It's been in comparable had a application a quarter AMJP third in There ago? six stands five revenues, million, we and just act. the recent do On Manufacturing probably quarter. a to Protection with more for of earlier the those mentioned and are we has requirements less months and put Jobs Department Transportation. feel by I above breakeven that's program EBITDA that most about for bunch Aviation anything, adjusted of in

David Burney

of for was signed period it It that on time, worked September. the

Peter Gundermann

a performance. That little press the of over goods. we over reduction the negative Test last $X.X $XXX The trend the last four million quarters. bit Aerospace page bookings sure, to the But over application million are. $XXX a for four numbers, was But for shipments four million in There four our $XXX.X million the driven of Dave very what be impact last last quarter bright September. of $XXX a to of Total million more The and much a fourth quarters. significant quarter the the trended continues a last Right. in of very table bookings, the we $XX.X basically have the $XXX numbers benefit spot the quarter very has and $XXX throw the over are to a X.XX. which a trend going in quarters. positively, of out our six-month quarters, book-to-bill got by period first to the evident in of about and in a consolidated talk bunch cost total small the I'm It'll thing award release. And book-to-bill third are quarters, full million, amount will positive The of requirements positive as trend. quarter, four million. end on million, X.XX last a got was a of the of

So in a change real mix business.

terms aero in book-to-bill In quarter $XXX this X.XX. for most were bookings a of of recent million bookings,

higher are for And aerospace sequence to quarters million, total million good, we So the in Flights from $XXX noteworthy last is over through ship primarily in are aerospace they terms group, million. which in up, book-to-bill million segment teens solid did the recent category, with particular in month. days will picking other ship, happen MAX. quarters, a bookings appear the $XXX high in the across about the again, but quarter, that was a And very industry the most -- than mid four as get per most we sets our We're last amount of perspective, categorized to the of Narrowbody driven in The look the up they factors Aerospace our in XXX we are X.XX. good expect of by these shipments. activity when the $XXX by $XX XX% XXXX. caveat is somewhere pretty that rates of to means to retrofit were over is a ramping four to or shipping million, that is you if total and the that table noticeably. at service. $XXX that in pretty the there million Load we our quarter activity One third in production that up. of are is neighborhood $XX strong. news driven And is set of news very significant

U.S. higher should current drive for has the the that the I'm we we up for OEMs very So, future. very for we pick think that encouraged only business or jet the benefit will which should should utilization, that's close for target XXXX. activity in of see production all using of in strength there international rates demand by hand major and the looking XXXX. the restrictions, reporting. as not you've read we been terms driver, positively are foreseeable promote quarter, XXXX that Widebody book-to-bills in forecast been about sure the widebody but rich from Similarly expect OEMs last enter are out strong. we We the travel subdued. a particularly remains But major environment pretty on other a us forward, the

We -- to are and aren't their necessarily -- we're seeing their be sitting that looking in to going between our production production and their rates orders yet. a their on and There's our like. to customers us. XXXX from lag But see what that to orders

premiere We expect them is by a be few business our driven finally, in remain programs. XX% mostly a about of military strong, and FXX other higher. days, year, And typical these stable, aircraft, to

a take aerospace While and about. we're I'm emerging about about pretty a talk little of here which the do to and detour market an I bit industry, opportunity, want excited talking

or a aircraft. often startups you And airplanes, some takeoff developing but electric have trend industry also and conventional these propulsion. a is electric landing of about vertical number electric aircraft and probably of are in airplanes, are aircraft read also established as And eVTOL who companies more categorized the there with

of these types are of pretty that We applicable comprehensive opinion industry is a to some the of the review of some our done -- having development after skillset and directly aircraft.

and expect directly distribution, have will for lot under talking developed than beyond a year be about, a Future has developing pressure a expertise us business franchise an this as the it Denali we and kind Bell of as and with few capabilities and $XX about we few is a of the the a years, talk predictions We of me been And introduction, busy recently, The Skipping tough Textron, of for we bookings business. up primarily programs this segment is smaller here. to wrap of this for been other to or about trend industry. applicable or developed the but we've business. U.S. talk power a our Test the last of or headlines heard this promising our Pilatus move as quarters. to have today, I forward. had of we this sales talked -- Test XXX whole million-plus course the competition we it of get FARA and have haven't in couple into a the part do about expect to FLRAA bit both us think we of Army because area electric our eVTOL over that conversation last We airplanes. little you emerging apparent -- year, increasingly main of we too here as many that next should over it plan It's downward spell go don't And involvement PC-XX, been or electrical Lift. the of more much have like -- have

need a at million we been to And the of things that. keep average to least few in So, healthy. half $XX last bookings have quarter about

work-from-home way third was second $X.X not this delays the $XX.X our want And quarter signs we are We've million, are pandemic a are in Our COVID-XX be. like we quarter have the dealing We quarter lost that -- off this has talked about to feel feel to we in lot related orders seeing it and where before not about some story largely We life. space customers and these the scenario do changed. competitively. and was of of that with. anything

the fourth $XX.X in shy of third month the million. just to the quarter subsequent bookings, million, October at first or $XX came of quarter Our

which second quarter, booked third more the October we in more So, did in we was the quarter. than in

the fourth optimist quarter on And hopefully break bookings us says are loose. So, things back should to our a track. put levels me starting in healthy that

to talk minutes. year banking $XXX and Dave through cash That's and with we turn specifics from a now million. of a ended our some few events. the for $XXX over to we sets when about of expectations But the of to beginning some the us Dave? quarter go arrangement want million pretty together, which more I the statement the in of income the it I'll well of up and for going think forward, we began Taken with backlog up

David Burney

were we and year's sequentially quarter expected, third third of Thanks, lighter year. but million sales up quarter Pete. Consolidated this last the the second X% from than $XXX.X in quarter with flat

had about million $XX shortages end Going the than material expected. At of had the larger the quarter, expecting but we million impact backlog. into we were to revenues, $X higher of quarter, a

this with shipped we As have quarter complete Aerospace and year. second last inventory Pete to of could third if to improve, sales that first mentioned work. XX% sequentially had and over the the we up segment from commercial up of X.X% XX.X% Driving the the year's of XX.X% in up third up the this power quarter Most continued passenger quarter to from the increase sales second last has market, quarter. $XX.X of compared and year from year products. transport of a which and the our increased is million, improvement XX.X% volume been sequentially the the had seat sales increase quarter

have As volume quarter XXX and the agreement activities the end reflecting grant for increases we'll higher when signed. We margins primarily the decreases quarter, the about about by the September additionally third started $X.X in third a year's last over during received declined increased. with with and was of for with the from for recognition proceeds of Operating In volume money. units grant sales grant defense the half Test and compared segment, period compared six-month increased, near the airlines the the improved the driven $XX.X but revenue transit year's of MAX income service passenger that by AMJP last of the million areas. recognize have quarter, million XX%

We benefit of in fourth recognize as gross quarter, expect first the XXXX. about the that $X recognized to million we'll quarter in the a remainder profit with

a labor And be companies, area to year. that Transportation final balance this administered labor mid based space. six-month in period jobs. retain little a a million a reconciliation bit received costs expect of over those of of in predict. requires eligible and well shortages, labor We're headwinds grant provides supply the million move market. the in into over of tight year. look. XXXX those as the we a the commercial eligible and by on second allowable to to daily of situation is a to upon to grants of AMJP complicated and cash as forward of to Grants aerospace costs costs to difficult We is Department changing support retaining companies approximately The margin due program an to grantees increased and estimate near-term next Switching basis $X on raw arrow material jobs and as chain forecasting installment $X December

rate. tax Regarding

will benefit. that see of a in you tax period a typically bit we rate, loss, Some notice a you have of strange of a tax

Ours our look realize tax we'll a to offset to had little these losses benefit of but reserve fully expense federal continue them. future such assets reserve accounting fully strange periods. requires fully and or GAAP reserve, not assets. for assets we expect able several do the tax to us these to XXXX of for expect be income we the when expense, or tax as to to utilize the deferred have has We years XXXX continues We and all company will any and into through tax cash guidance income income

our were In continue in and terms of to liquidity in to and with compliance We forecast be debt covenants. debt.

adjusted were we covenant the purposes, For of EBITDA six maximum leverage below quarter. slightly our times limit for

Lauderdale quarters, October. at coming growth of beginning The positive concluded AMJP Fort will the Fort Forecasted and Lauderdale was the building as some as the sales well such grant, in refunds items, sale of help. building one-time top line as tax

times a it our adjusted by we XXXX, it event a expected was So was the below to We're moving rolling in the as second goal quarter quarter and of consolidation. be quarter margin the of part The facility consolidation XXXX. of plan end fourth X.X leverage with forecasting through move completed four EBITDA improvements is EBITDA.

quarter quarter million changes which inventory during on by receivable, customers $XX the times by in million, The cash quarter days of and driven quarter. the for sales debt were in third and impact Cash of a down Our were working increased XX accounts $XX by year was of an payables for pieces from maximum about Short the terms the net the is to $X increased payment and $X Having capital poor leverage flow net capital operations reminder. an larger balance increased of as is working was was fourth this million flow. the by on million. X.X based the quarter. increase on during with receivable,

lot you remarks, the sheet. is that increase that balance a see my Pete. of the So driving that And concludes receivable on

Peter Gundermann

Okay.

of forecasting are chain we ahead, We quarter in did fourth supply million this looking determining $XXX to So, constraints number. consider revenue $XXX million.

of quarter. at backlog scheduled million backlog in fourth which our $XXX quarter ship of $XXX quarter the Our the -- million, beginning the $XXX is million to was at fourth

million, of doing on it's constraints, million to with from we So, least. you. think to the $XXX go million $XXX the would getting if you normal be that. hard. ship of to we chain that difficult supply in expect book into be And in shouldn't might But kind count $XXX just the might range XXXs, I mid given circumstances with In $XXX million, and business agree at

that noise high comfortable right side now yet. and to is I side, strong saying guess, lining or and be fourth would chance our million strong range to when our everything's year. strong we that crazy quarter the will of of We're unless the something growth. be variant there's we be such kind both Hopefully, it world, up $XXX expect $XXX a saying ready results. opportunity, talk So, best double-digit kind are something -- we for there's think which some best believe we -- year million. about XXXX comfortable we're terrible in low will of a we on But but round, the another not in We predict double-digit

frankly XXXX, get Looking forward there. wait to to can't

now want be So, I to questions that would good. our ends it Darryl, think open up planned for we remarks.

Operator

Thank you.

line has conducting from CJS proceed Our be question with Please Securities. the your Jon with will Instructions] We a come Tanwanteng now [Operator questions. first question-and-answer of session.

Jonathan Tanwanteng

My questions. sure. not go booking more if color into kind a product one my was that give us Thank Pete. that wondering first of tests. I'm that was? morning regarding you you'd what What I little to exactly taking bit means or aerospace Good line of Hi. guys. a on for is

Peter Gundermann

I Can that again, not followed. sure you say Jon? I'm

Jonathan Tanwanteng

you, into booked quite said into the aerospace that something you said understand. I you other sure think you have I gone that segment. I'm would not

Peter Gundermann

and and no. into -- break it'll other. no, business commercial, other other, we up Other jet, revenue No, military, show in

Jonathan Tanwanteng

Understood.

Peter Gundermann

In the Aerospace segment.

Jonathan Tanwanteng

makes Okay. Got it. sense more now. That

QX. to I as increase the you the handicap that just disruptions QX, chain And wondering for wondering out pushed from that comment $X roll had going is supply QX tried going that, amount meet just if or you was or million decrease? into I'm in or million there planned that Okay. much $XX you an caught to how and QX you expectation of go into into number is same forward. that XXXX, to I

Peter Gundermann

Yeah. supply It's little me is, or a of -- And units a do better, we I with we business operating think picture really We is getting one going forward. question. good units. bit different getting telling the it's nobody recurring it's chain get think And better XX, questions bigger know, I to reviews regular at going point. And our this frankly, and worse? is getting XX have don't my

saying nobody same, it's of staying are but some telling it's -- the nobody's kind me better. getting And

a a getting me as worse, it's which tells that group, little that So probably discouraging. is

think we a to of we'll one we million million $XXX we when So, And in is there, that number we we obviously what get $XXX number report going the is fourth factor happen tried safe. pretty into to hope and that but expect quarter.

Jonathan Tanwanteng

and restrictions just are lifting to was on going year that production what hoping everybody and and these color. widebody wondering frankly, for travel thoughts was Thanks it. for retrofits next Got your are waiting that I this. now

how some with it'll how might it made has to us Just versus help be much been next much understand now in expectations, upside? there line do or year? is get think you you So,

Peter Gundermann

next production to necessarily year. much I don't expect rates move

this come that on account, and I well-publicized for Boeing commercial into the think comes hope you rates which strong. indication, trends activity it products are the that be would the take entertainment there main Airbus but would retrofit back, side should our for we tell narrowbody flight transports, probably pretty by in related. I back And mostly are when I guess would any it if

pick aftermarket rates benefit pickup. nice but aftermarkets before from an expect production I'd production to up So, rate nice, also.

Jonathan Tanwanteng

queue. in Okay. Great. Thanks. I'll jump back

Peter Gundermann

Okay.

Operator

you. Thank

Our question your with Ciarmoli is Michael line Truist the of with coming next Please proceed from questions. Securities.

Michael Ciarmoli

the morning good Hey, Thanks questions. guys. taking for

Peter Gundermann

Good morning.

Michael Ciarmoli

to think Maybe there adding two four -- Dave first, are -- leveraged that quarter just back adjusting or level? you EBITDA the else are the the anything -- below can to times, I other covenant …? what to to any reconcile should get but rolling said, you inputs the you improve

David Burney

times, No, EBITDA mistake. no. said I don't leverage a think I the rolling four if that two quarter was the improved

Michael Ciarmoli

No, X.X no. I times. said that

David Burney

that's said our is as move I we goal into what XXXX.

Michael Ciarmoli

Okay.

David Burney

EBITDA And part income covenant that EBITDA you traditional for to for expense your our $X.X No. non-cash legal that EBITDA. largest. statement. of to the need increase expense of excludable to did top calculation on number, the utilize items To the you the That's get have the adjusted quarter the adjust adjusted about million we

Michael Ciarmoli

Okay.

Pete, that were Got better margins? as about and $X.X then And well? in looking material terms you for just can maybe Got bit all When little maybe your extra out we it. million at $XX maybe talk guess, chips, to having should aerospace, I to door, and you think you supply through you drop forward from freight, pay it. just that of electronic there's this Helpful. $X get million inputs have had on Are tailwind, about the of more about million been Okay. to and the think had we significantly chain impacting logistics of about but whether then margins, the components, product that chain, there. some had segment more supply could in million, can and pressures at $X breakeven environment how you as inability raw the specify going pricing probably operating significantly you

Peter Gundermann

Sure.

range come say a lot from assemblies in buy. pressures required I electronic areas that and commodities we primarily the are electronics and diodes we and build of chips of would in that general lot biggest We because components that Asia. a and a of seeing wide components capacitors

paint. in of things of seeing do and like molding or you parts not -- it even that that like plastics that expect, pain. our And has We on have been some kinds definitely point that. might have been even But those on problematic. heavily we're things dependent materials business of are also we electric a So die-casting

So, it's in frankly, widespread. frustration, of unpredictable. part And it's the pretty

You and that and go and lead you on get to relay the times place order customer. and bid you your you -- and your And refresh pricing an your program to a get suppliers customer gives an you you order. then

that And was is delivery up something said they really of thing kind weeks weeks. can eight That XX screw now schedule.

We are seeing delivering some subcontractors because are existing price time. pressure, primarily and in short. the just spot arrangements area doing with falling blanket They're of on going buys out our not

are So, that. we seeing some of

going perspective justifies buying it's I to out and backlog still think support certain troubling is that, next and We're point, and figure of of our history of that permanent how customers it's our something year. anticipation over when existing not in income we but components this them above problematic. mean, trying to would we're and exactly to in. consider a being to statement orders through they certainly and those our quantify standard in some out want parts it. come to But servicing a I what the play we at able have going beginning

kind and XX bit things proactive but action. out little customers to you're of a that expect in are things of or suppliers now it's when pushing got weeks, XX XX to take a some looking to game weeks maybe, you've guessing So, at extent, that

he to that all. to if to going to over discussion at see turn augment I'm So, wants it Dave

David Burney

some take particularly and resistors one of materials, it's you Yeah. available. the and hard to It's quantify, because -- aren’t available can some are say group

Some have had not. XX%, price increases some XX% and have

not to across on it's the situation it's components difficult project. and board similar straight all So,

Michael Ciarmoli

are color prices probably mean, success it. customers? globally. your mean, whether think I pricing? airline -- pushing with Got XX% that What directly, or the to you're to have I think of kind just OEM through I the some I to customers would share it's any a market IFE your there. XX% or providers, increasing you'd about you still

Peter Gundermann

to we're we've lot to companies, and Compared bit a of the right. have you're more frankly. I allow think will to we patterns some we or will reduced business, do But have pricing to probably increased pricing Not I mean, little of short-term done use that that that. And us a customers, word and the agreements pandemic industry. volume And I some parts it. blanket do costs our of ordering reflect parts our of already. dependent allow in effect our the flexibility, as volumes us of we in volume, business, part whole on with major dropped are which the some our of what doing I temporary innovative And costs. to on kind like cover are surcharge been kind other of putting actually things increases that's of guess. it increased think some we in working, a temporary have

that. had much We haven't pushback on

have far to our pricing for you So, the that eye are definitely out increase opportunities it. would so we But an going to price we're we -- I have seen tell customers. that the increases outpacing we've that

equal it be balances probably So, a before it's over lag a lag, could all three all -- of be but to time, year that'll six-month a hopefully four-month or going kind or out. out,

Michael Ciarmoli

Got I'll in jump back it. queue. the All right. Perfect.

Peter Gundermann

Okay.

Operator

you. Thank

Ryan Colliers question. from Securities. your with Our line Dick of next with proceed Please the question is coming

Dick Ryan

Hey, sale? status business Where what's you. on that what does the this the of Pete, Thank -- the earn point? semi stand out at

Peter Gundermann

No real here. to change that in that. We're hoping get resolved

on opportunity report have where month We but at later break don't point, anything this something may new have we to loose, that Dick. perhaps this

Dick Ryan

Okay.

I you'd you've probably the had classify I -- orders, when your the bulk the AeroSat, two but for some your think them, -- strong What's orders not, outlook there? satellite outlook mean and XXXX tail-mount? tail-mount, You've maybe antenna. had what's satellite in into going

Peter Gundermann

relatively business, probably lines it's in product the Percentage solid. pretty to going a one That's of be fastest wise, growing small. it's our but still

tie mid to be I to actually range. parts, challenged of probably the do a the think that. up, about actually supply going get complex this but -- one could more deliver we -- could we're assembly. if do It's could $XX just interrelated. here one quarter, we that's what the all the XX%. it's the kind of we got where million to areas fourth example XX% a we revenues especially of planning to all that chain, if could expecting pretty because just twice And that's probably an is That's together, That's on we're of to get really significantly could long we're areas very and where we But parts. do

Dick Ryan

on you you can select, down how for either And as one Okay. it and of you're FLRAA the timing comment FARA playing and into maybe see both?

Peter Gundermann

out ways. FARA FLRAA. It behind is Well, a is Yeah.

army our think on favors that discussion team my first of there's down Lockheed, the of quarter to FLRAA. sometime end between think Bell second team concentrate be technology I'll the going So, very the quarter a wants, late We the or Sikorsky XXXX. the strongly. that and architecture select We

of opportunities point. We And team be team distribution to team the that is wins, type contents from of will it'll a there defined, of successful, And still if perspective. second ever pretty product, biggest a -- easily be for today. that primary seen power team we're half our where the year although the But system role Bell hopeful as a evolving. electrical but development with if we've real on this as of that's ships Bell the from us early are significant next be in program less and member at Sikorsky, Sikorsky the

half on more first happens, it a it's So but that as basically event. XXXX

Dick Ryan

Okay. Great. you. Thank

Operator

Thank you.

Please with question. question CJS from line coming is next of your Securities. with Jon the proceed Our Tanwanteng

Jonathan Tanwanteng

with what maybe items of one-time networking a network talking and your follow-up. these get you're there, Hi. slightly to capital expect use Do and was about? especially and kind up quarter. with Dave, puts next headwind of covenant quarter next Thanks margin are I to remain what you and -- revenues some for wondering takes the the

David Burney

in fourth well, million We're $XX come Yeah. our of tax the beginning million couple building, quarter. under we roughly ratio A we expect the We do million fourth to expecting quarter. $X $X just refunds the for sale the of of And quarter. received fourth expecting during in -- to compliant the million of the come we're the a leverage things $X in actually to of rehash to in, quarter. remain fourth improve and in cash expect on little one-time AMJP to about additional bit,

million, type the the that quarter stuff quarter, help kind that's $XX the million $XX line or And in add million there expecting will third So, of is going of million, $XXX non-operating $X of margin, $X there from fourth million top well. we're inflow $XX as to going going up to help. growth cash into million from

Jonathan Tanwanteng

then just Great. you out confident plastic in next felt double-digit headwinds, other basis retaining head you. EBITDA How And just the more year into things more maybe I'm people, I margins wondering in full what growth quarter, -- that's get better. are if mentioned, of Okay. are And labor, about next you as you possible think don't know should potential a kind that inflation, like was like or growth, Thank the hiring just -- component we looking Pete, I wondering thinking roll at year hit double-digit the about? what people, maybe growth. like you you're everything environment. targets, I and through the we if strong as you think we said there year,

Peter Gundermann

Well, big there and guidance. typically lot unknowns a bottom are obviously line we of give don't

expect take we point, into the but -- would line into and at But think it's can in solid to a to to any know EBITDA strong things if we're think going expect guidance top income at It we're much to strong direction. at even our detail to get confidently. I to don't is steps the would to we issue Dave, statement. up XX% I discussion So, halfway, more level. to stronger numbers point, pretty table we we this need line if that do more I And reasonably ought to were start higher that were see can about before adjusted bottom double-digit growth. be revenue number to double-digit revenue back until some work don't impact if complex. to in I that very this reluctant talk certainly want we EBITDA well But set we if you get have should positive comment.

David Burney

No. I agree. I agree.

something I we that I think, start there'll we're up But strong to on cost a think think. additional We margin some range. bit is the way line. our I back. process from going there. with the expecting, little contribution it but we're the we'll don't going top sales growth have it's be as XXXX offset we're And next as XXXX. inputs steadily EBITDA But the through working multiples that's -- we think I get But within into those of that year. won't we'll double-digit -- XXXX, into do certainly improve move move to

Jonathan Tanwanteng

Okay. one me. Great. And for last then

to from three to that that to you that that's the lumpiness it, within quarters, a Does understand timing revenue preclude terms Just the of line going new mean or me orders the see next have or the or regards what's that was and lumpiness as million. happening quarter, like? about quarter big in sight backlog the you help the timing $XXX in is of two in

Peter Gundermann

a good question. It's

think million sight quarter have get line we four quarters. kind in two to and we that's trending do of in you push close the look million cumulatively, that $XXX or so I mean, to we the million I the quarters we with up direction. And of be last level. $XXX bookings forward have to to $XXX any ought at last improvement, if moving of the total able that continued

think even position fourth is got now, market. start to later quarter But So, I into the from takeaway strengthening people the the demand the right? struggle. best nicely. days the for our coming right or And back labor really quarter sooner early So you third backward don't is of the and obviously going some looking at that picture world. in the else stuff, we're where a that like chain, with ship hopefully but supply went, know We all while workers everybody to

morning feel very And chain chain you'd and or this normally. have strong so, and trend. and positive a were that us supply supply and both we we supply much problems no working that's rather talking problems unanimously think Dave chain demand I of rather than very demand

place to if guess. is where problems one or have it we like So, other, you or it I the have in

Jonathan Tanwanteng

luck. you. And Thank got it. I good Sure.

Operator

next [Operator Our question Ciarmoli you. question. your Instructions] proceed Thank with Michael with comes Please from the Truist. of line

Michael Ciarmoli

other, for are Hey. products I the bookings taking specifically what Thanks in sort $XX million -- you what into of said that they? goes know that's Pete, guys aero that follow-up.

Peter Gundermann

They are related. aerospace not

took Michael, talked of are and I that resources a recall took really hand-wash we pandemic our turns programs of using announcement of and our and coming contracts the and build some COVID contract some that organizations hold, facility personnel them be a out oxygenated volumes. ago concerned when did facilities ozone. in pandemic. toward might -- significant one about resources a apparently hit a big an think We few applied pretty design, some quarters You about them through months few And to station ago we are the about or in

that I makes it's taken so, we longer as had this be but million. this to to XXXX, when think our received kind there, a than COVID, of response tell to you at some we of and of hoped throughout we business good launched one But going strong it's point. $XX pipeline, a in initiative are -- we've drivers. predict others there that And up that and very bulk difficult But will the pretty

Michael Ciarmoli

funding potential ones. a FXX, into program? given year? the headwind, how Is just of Got are thinking be it. that Two other that about you that guys going rebate next to quick

Peter Gundermann

us. evolving for Yeah. a isn't program picture, It's is FXX it? pretty important an

program We in upgrades of are think off there I that drop us. are on year, might a of to somewhere and guess in airplane. terms that changes have content, expected bit shifts of neighborhood or but it's the things compensate. rates my the other we little so $XX,XXX And next that head, for top an important

next So, we headwind think for going don't be serious us that's to a year.

Michael Ciarmoli

around now tough tougher I as a $XXX think costs, of sense? level. the some you calls, kind Do right I as we taken But of of think for prior rate you've know but a it's terms actions, but mean, that I Okay. -- million, for supply Last said might a we $XXX $XXX cost business the one. and run million about million about in level. This point elevated is company think the be be that one. should in chain breakeven with obviously have just you've breakeven revenues sort might

David Burney

In EBITDA breakeven? terms of

Michael Ciarmoli

was I income. thinking operating

David Burney

Yeah.

that moved probably there. in bit were tough material day little given of For there, predict where to bit to the the day, regard. it's a we reasons the It's a changes But gone breakeven from is definitely kind point say a said up ago up are going. and you from costs little where from year

Michael Ciarmoli

Got it. Thanks guys. Perfect.

Operator

to turn over this comments. back Thank you. closing any There call questions Mr. further Gunderman the are no would to at like time. I for

Peter Gundermann

good your Thank attention for comments. a to again. to talking We look you No you forward Have today. day.

Operator

participation. today's This your you. teleconference. does Thank appreciate We conclude

your time. disconnect a may this Have great You lines at day.