Triumph Group Inc (TGI) 2003 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Triumph Group conference call to discuss our fourth quarter and full fiscal 2003 earnings performance. You are currently in a listen-only mode. There will be a question-and-answer session following the introductory comments made by management.

On behalf of the company, I would now like to read the following statement. Certain statements on this call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Triumph's actual results, performance or achievements to those of the industry in which the company operates to be materially different from any expected future results, performance, or achievements expressed or implied in these forward-looking statements. At this time, I would like to introduce John R. Bartholdson, Senior Vice President and Chief Financial Officer of Triumph Group, Inc.

Go ahead, Mr. Bartholdson. Thank you. Good morning, everyone. Briefly, I would like to go over and add some additional comments to the earnings release hopefully you have in front of you before turning it over to Rick Ill for his additional comments.

The year ended 3/31/03. Sales for the quarter ended 3/31 were $151.7 million which was an increase over the prior year's quarter of 10.5% and for the full year, we reported sales of $565.4 million just above the sales level for the prior year. Income from continuing operations in the quarter was $9.5 million, down 33.8% from the prior year-end quarter.

For the full year, we reported $37.6 million income from continuing operations, a decline of 23.5% from the prior year.

Operating income in the quarter was $17.6 million. That was down 17.4% from the prior year's quarter. For the full year, we reported operating income of $70.6 million, off 16% over fiscal year '02.

EBITDA in the quarter was $23.9 million with a margin of 15.8%. For the full year, EBITDA was $95 million with a margin of 16.8%.

We had announced previously that we were designating the Metals Group as discontinued operations. The loss from discontinued operations in the quarter was a $1 million. For the full year, that loss was $900,000.

Net income per share on a diluted basis, EPS from continuing ops in the quarter was 60-cents for the full year, $2.37. Discontinued ops was a loss of 5-cents in the quarter. And for the year resulting in net EPS of 55-cents in the quarter after discontinued ops and $2.32 for the year.

Turning to some other statistics, our backlog at the end of March was $486 million, up from $360 million at the end of December and compared to $378 million at March 31st '02. The increase, significant increase between December and March is reflective of the acquisition of the assets we acquired from the Boeing Company and their Spokane facility.

That acquisition also has changed the ranking of programs in our backlog and we had reported to you in the past the top five programs in our backlog representing backlog numbers with orders from the customer with both purchase orders and ship dates.

And when we roll in the revenue in the outlook for that two-year period from the Boeing Company, with the sole source position that we obtained under the contract with the acquisition of Spokane, we had a significant shift, where the top five programs are now the 737, 777, 747, F-18 and the A-320. And beyond that, the next five are the 767, the Bombardier CRJ program, the C-17, the CH53 helicopter program and the F-16.

So we are continuing a significant balance between commercial and military. Again, Boeing continues to be our only customer over 10% of the sales. For the year, Boeing represented 16.3% of our revenue.

Our sales mix for the year remained fairly stable with OEM, original equipment manufacturers representing 54% of revenue. The maintenance repair and overhaul aftermarket 33% and our IGP and other business was 13%.

One of the things I think is instructive to get down into finer detail on stales is the shift that occurred between '02 and '03 in our markets. For fiscal year '02, commercial sales were approximately $261 million of the $565 million for the year.

In '03, that declined to $230 million with sales, as I mentioned before, remaining essentially flat at the 565 level. Military and space grew from $144 million to $179 million of revenue.

Regional jets declined from 34 to 30. Business jets declined from 61 to $51 million while the IGT and other business grew from 65 million to $75 million. Again, adding up to the same $565 million total in both years. Our IGT business is definitely slowing but still for the year, increased to $50 million compared to $45 million in the prior year.

Turning now quickly to the balance sheet, net debt to capital at the end of the year was 27.8% with total debt just under $200 million at $199.5 million. During the year, you might recall we placed some senior notes with a principal of $150 million.

We wound up the year with $32.5 million outstanding on our $250 million dollar senior bank credit facility. So we have ready access to capital to continue our growth.

And it's interesting to look, I think, when you look back over the year, outside of direct cost of operations, we spent $109 million on acquisition cost and capital expenditures for the full year. In the year, our debt increased by only $41 million which, in a very simplistic way, when you think about it, means that we have a net generation of cash during the year of $68 million dollars after spending the $109 million on acquisition costs and CAPEX.

Same-store sales for the year were off $17 million, a negative 3% year-over-year. Acquisitions added $17 million, again, getting us back to that flat revenue from year-over-year.

With those statistics, I'll turn it over to Rick for his comments. Rick?

Thank you, John. Good morning, everybody.

Just for a second, I would like to focus on the quote in the press release which reiterates some of the things that John has said in commenting on the earnings for the quarter and the year. And the quote in part read, "the earnings are reflective of a downturn in the commercial, business, and regional aircraft production and the decrease in airline passenger miles flown".

The industrial gas turbine business declined during the year. However, our military business increased significantly year-over-year and as John indicated, that's up now, as a percentage, is up to, is about 32, 33% of our business.

I will comment on it in a minute and what we are doing about the current environment, but we are encouraged by success and increasing market share in this difficult environment and remain focused on reducing costs and eliminating redundant capabilities.

For a second, let me comment on-- John mentioned the Metals discontinued. Historically, over the last four or five years, we have been asked many times what's the future of the Metals Group and we have somewhat consistently said, as long as that group was a positive cash flow that weren't hurting us and, however, if they did turn negative cash flow, we would address the issue and this is a direct result of that relatively consistent philosophy that we've had over the last five years or so, and we are currently exploring, you know, alternatives for the group.

In our April 10th press release, which was the press release that, in fact, announced our realignment, we made the announcement and the press release in part read, "the majority of the cost associated with the realignment steps that have been incurred and expensed in the March quarter". "The effect of implementation has included reduction in force, relocation and consolidation of operating locations as well as rationalization of working capital".

I think it's interesting to note from our perspective, anyway, that all those costs that were taken are in the operating earnings that are being presented to you today and there are no special charges which have been taken, you know, on the operating income line. We have had, as that press release indicated, account receivables writeoffs, primarily a number of them associated with airlines. Some inventory writeoff and head count reduction of about 10% during that period of time.

It's also interesting to note in the earnings that the decrease in our operating earnings, approximately 90% of that decrease was due to the structural components area of our business which reflects the lack of aircraft being built and the resulting margin pressure, you know, on those structural components area of our business.

The realignment I spoke about a little bit. The benefits of that realignment are many and I'm going to go over a number of issues here that we have addressed, but the general benefits of the realignment, we feel, are market share growth which we, as you know from previous conference calls, we do track and John referred to our top number of programs, top five and ten programs but we know we have, in fact, increased market share and we know that we have, as I referred to, reduced costs and have eliminated some redundancy in our system.

Specifically, there are approximately eight issues that we have addressed and will be continuing to address over the course of the year. Some of which we have announced in the realignment and some of which you have not heard before.

First, we had formed the Triumph Aerospace Systems Group headed up by Jeff Frisbie which essentially merged the Structures and the Control Systems Group. Secondly, we have formed the Triumph Components Group headed by Bill Heinz. I will get back to that in a moment in regards to some elimination of redundancy.

We have expanded the Triumph aftermarket Services Group headed up by John Brash to include advanced materials technologies and aerospace technologies and have eliminated significant redundancies and will eliminate more redundancies during the early part of this year.

We have consolidated a number of companies in Southern California once again to eliminate redundancies. We are focusing on supply chain management and integration with the hiring of procurement expertise. That might come under the heading of doing to our suppliers what our customers do to us.

We have established new lean manufacturing facilities which have taken significant costs out of our system. We have a brand new plant in Indiana that is very lean manufacturing facility.

Specifically, I mentioned that I would come back to this. We've eliminated redundancy by reorganizing in Phoenix and moving from about four companies into one location and achieving an ongoing benefit of approximately $3.5 million dollars in operating costs.

One thing that John had mentioned that I think needs underlining was the generation of the example that John gave, of the generation of $68 million dollars worth of cash. I think that's important because we've always said, we've consistently said over the last few years that, if there is, in fact, a downturn in the industry, that we would have the ability to generate cash to that magnitude and we are very proud of the fact that that cash has been generated this year.

As far as the outlook is concerned, the revenue outlook for next year, prior to any acquisitions -- and I will comment in a second on acquisitions -- is to maintain this year's level or go up in single digit growth. We think that margins are, in fact, very difficult to predict going forward.

We do feel that the market and our businesses will be challenged greatly for the next 12 to 15 months based on the build rate and based on the problems that are very public in regards to the airlines. However, we are gaining market share, but our goal and our intent is to manage our way and run our business to maximize profits on our revenue.

We do see some acquisition activity. I would not be surprised to see some acquisitions in the very near future. We will continue to acquire companies and maintain the discipline and paying the proper value for the companies that we have in the past and maintaining the immediate accretiveness of those acquisitions.

So I think that some of our acquisition activity will yield some revenue growth.

As far as looking towards the future and what next year will look like, I talked about the revenue outlook. I think we're going to maximize our profit on those revenues and manage to do so.

I think it is on -- we don't have the ability, and I think it's unfair to a number of people to give specific guidance as to our earnings next year based on the uncertainty, but we are very optimistic in regards to our revenue and we are very optimistic in the fact that we are taking cost out of our system and eliminating redundancy.

At that, I will open it up to any questions.

Thank you. At this time, the officers of the company would like to open the forum to any questions that you may have. If you are using a speaker phone, please pick up the handset before pressing any numbers. Should you have a question, please press the 1 key on your push button telephone. Should you wish to withdraw, please press the pound key. Your question will be taken in order it is received. Please stand by for our first question. Our first question is from Suzanne Kecmer. Please state your affiliation followed by your question.

Good morning, guys, Suzanne Kecmer from Merrill Lynch. I have a number of questions. Maybe we should just start with the quarter. Your sells came in a little bit better than I thought they would. I was just wondering how much of that was due to any military spares? And I guess I will correlate that with the operations that were going on in Iraq.

Good morning.

Good morning.

I don't think that anything in the military area, we can say the quarter sales was directly related to Iraq. I think, as I indicated, the military sales started to rise significantly over the last two or three quarters which, you know, certainly related to a build-up, if you will, for the war. But I think it's very hard for us to indicate.

We certainly have received significant spares and I think we will going forward in some major contracts that we will be talking about in the future, some of the sales increase as John indicated was due to we got one quarter of the Triumph composite or the Boeing Spokane acquisition. It was not even quite a full quarter. It was about 2 1/2 months. So some of that was due to that.

Sue, I would characterize it as the majority of the increase was from the acquisition in the quarter at Spokane but there was nothing unusual reflected in the quarter of a material nature in a major change in the identifiable military aftermarket repairs business. There was not a big bump that occurred in the quarter that we would see changing in any way in the next three months.

Okay. And when you guys released earnings last quarter, you just gave an indication that for '04, your EPS would be in the range of $2.50 to $2.70. I was just wondering what exactly has happened in the market over the past three months or so where you are now pulling away from that?

I don't think, Suzanne, I'm not pulling away from that necessarily. I think that as I mentioned, we feel very strong about the revenues that we can, in fact, produce. I feel very confident that we will, in fact, make some creative acquisitions.

I don't want to indicate that I'm pulling away from anything that we've said in the past in regards to what next year will be and I don't want anybody to construe that that is the case. It's just very difficult at this point in time with the uncertainty in the marketplace to come up with a specific number of guidance as we have done in past, because our customers can't come up with some of the certainty of what is going on.

And I think that you will be able to, you know, when we announce some of the market share increases that we think we are getting, you will be able to, you know, extrapolate that into some numbers. But we just don't feel that it's proper to give guidance because we would be taking, I don't want to say it would be a guess but there are numbers with so much uncertainty out there that we don't want to do that. I don't want to indicate that we are backing off that number either.

I think if you look at that as the change in 90 days, the volatility in the marketplace has definitely increased significantly. That's really the message, I think, you should take away.

And is there uncertainty from your customers on the original equipment side or the aftermarket side?

Could you repeat that?

You said there is some uncertainty in terms of what your customers' needs are. Is that coming from Boeing where they could be changing their build rate forecast or is it on the aftermarket side where the airlines are really moving more towards...

I think the -- we have had no indication at this point in time that Boeing is going to change, again, their build rate, but it is -- the build rate has gone down significantly which has, in fact, caused us to do all the things and eliminate some of that redundancy that I spoke about. I don't think that the uncertainty, if you will, means that they'll reduce it again although it's certainly is a possibility.

The airline issue. The airline issue, we think, could affect our Aftermarket Services Group but that is a great deal of the uncertainty because, if you look at all the situations going on with, you know, the bankruptcy issue and/or potential bankruptcy issues, the lack of passenger miles flown, whether it be due to SARS or anything else around the world creates that uncertainty.

So it's -- you know, once again, I don't want you to take away from this that we're not optimistic about our future. I just think it's unfair to come up with a number that, you know, we are just uncertain about ourselves. Or don't have the utter confidence in telling you.

Just one final question. In terms of margins, I mean how much -- when I look at your backlog and the new mix of backlog, your margins in the fourth quarter are about 12%. If I look back historically at the margins that you've achieved, it's been in the high teens range of 17% or so. Does this have to do with the Boeing Spokane acquisition and now your more exposure to the original equipment, do you think that you will get back to that range again assuming that air traffic miles do increase or are we at a permanently lowered margin rate?

I think Rick made the comment that the majority of the decline on flat sales in that margin was related to the OEM structured side. Essentially the build to print business which volume wise is down significantly on a same-store basis. With the issues of, you know, manufacturing facilities, with fixed overhead which we're addressing but spreading that overhead over lower volumes, has impacted significantly the consolidated margin.

The Spokane acquisition in no way has been a contributor to that decline. As we said at the time of the acquisition, the acquisition was accretive from day one at today's build rate which is encouraging to us when we look forward to long term the potential recovery and build rate and what that implies for the margin there.

So we've somewhat consistently said that we could maintain a 16 to 17 to 18% operating margin level and when we were at the 17.5%, et cetera, a number of people kept asking, is there room for movement to get your margin levels higher? And we consistently said that we -- no, there wasn't. I think we are at a period of time right now that we can say that, over time, that we have room for margin expansions. To specifically answer your last part of the question, we don't feel we're permanently at the 12% et cetera level. We think there is a lot of room to move up. We do know there's changing periods of time but that's exactly why we are managing to maximize our profit and taking costs out of the system.

And that 12% level you mentioned is also reflective of the change with the discontinued ops where the corporate expenses now consolidated and the reported results that the operating margin level.

Okay. I will turn it over to someone else for now. Thanks.

Thank you.

Thank you. Our next question comes from Chris Mecray. Please state your affiliation followed by your question.

Hi. Deutsche Bank. Nice job this quarter, guys. Just a clarification, first of all. You are going through the breakout of sales the last two. One was going from 61 to -- I'm sorry, 61 to 75. Was that IGT and others in terms of sales? And the last thing you said I think---

65 to 75, Chris was IGT and other.

Okay. And of that?

75 IGT was 50.

Got you. Just maybe to maybe save me a bit calculating, the fourth quarter operating cash and free cash, do you have those numbers?

Not in front of me, no. I think we went over that at the end of the third quarter. You can give me a call because both of those numbers are out there and I will go over that for you.

Fair enough. On the realignment, can you describe sort of where you stand in terms of getting some of these things stood up? Are the accounting and finance elements and systems element on the way, halfway or fully -- how do you characterize the three sectors as stood up at this point?

You mean how have we developed the change in the costs associated with that change?

I'm wondering to what degree or how far along the way are you in terms of putting those three divisions together and having the reporting such that they are integrated?

It varies, Chris. The Triumph Components Group is the area to which I referred that we have moved four companies into one location and have identified $3.5 million dollars worth of change. That change has essentially taken place. That's -- that's in place. I can't sit here and say that we are at a $3.5 million, you know, run rate as we speak in the costs reduction, but we are fairly close to that. So that particular end of it, our head count is down significantly in that location. So I think -- in that group. So I think that we have essentially done that.

The aftermarket services group is a little further behind that in regards to the movement of aerospace technologies into that group and the movement of advanced material technology in the airline aftermarket business. We did that just recently in about the same time as we made the announcement of the realignment. So the cost benefits of that particular thing in the aftermarket services has not -- will not -- has not kicked in and will not kick in probably for another quarter or thereabouts.

In regards to the realignment. In the, essentially merging the structural products and the control systems, part of that has, in fact, taken place. I mentioned the consolidation and elimination of redundancies in the Southern California companies. That has already taken place.

However, you might remember one of the issues involved here was the ex-president of Structures Products Group, Robert Perry passed away which was one of the things and only one that precipitated the realignment there. So we are a little bit -- we have a lot of work to do in regards to that, the Triumph Aerospace Systems Group. But, you know, essentially there have been a number of changes made there, one of which will be the consolidation of the marketing efforts and the ability in those two groups specifically to move up the food chain, and we feel real good about what we've done in that regard in presentations to Boeing and to others. So I think that the major issue is the consolidation of the Structures and the Control Systems Group.

Okay. Great. Just the Indiana plant, what business is that connected to?

It's connected to the electromechanical control systems and throttle assemblies, et cetera. Triumph, specifically Triumph controls.

Okay. Is that--can you just describe what you are doing there? Is it expansion of capacity? Are you moving from the---

It is expansion of capacity and moving of capacity from one area to the other, geographically and giving us the ability to set something up in a purely lean environment with all the things that go with a purely lean environment, pull-through, lack of inventory, just in time delivery, et cetera, et cetera.

So you are shutting the facility in Pennsylvania then or just moving?

No, the Pennsylvania facility will remain open.

Great. And in terms of acquisitions, can you characterize your current target list in terms of the type of business that you are looking at, OE, aftermarket or other?

OE and aftermarket?

I think, Chris, we've said in the past that, you know, the areas that we want to concentrate in are proprietary products and hopefully products with aftermarket exposure. The capabilities we have in being able to manufacture structural components are pretty much across the board. We don't need to add capabilities. But integrating detailed parts into sub-assemblies and proprietary products with aftermarket exposure and additional aftermarket capabilities are the areas we're focusing in.

Just a word or two on IGT, do you anticipate any growth in this year through some more market share gain? Or, what's your level of---

I think fairly consistent answer on that thing, there is no doubt about the fact that the market in the OE area turned down sooner than we had hoped. If you may remember, in the past, what we, strategically, our plan was to have, be totally ramped up so we could participate in the aftermarket which we originally projected to be mid-2004. I guess we are in 2004 now.

I would suggest to you that the sales there, to the best of our ability, would be relatively flat to somewhat up. We are hopeful. We have a lot of products that are out on tests right now in the aftermarket area. We are totally ramped up in our repair and overhaul facility in Phoenix. So we are hopeful that there will be some sales increase there. But essentially, I think we will be flat to up in the same single digit growth that we are talking about for the rest of the group.

Is it fair to say that there are some opportunities there? I mean I recall talking about the build on in Phoenix, that there were some individual components that, were you to win them, could bring literally tens of millions in sales. But it's obviously dependent on that win. Are there those types of opportunities still so that, you know, it could be flat or it could be up a bunch if you got them?

I think what you have to consider, Chris is, as Rick mentioned, the OE sales are declining. So on that $50 million dollars number, we are significantly building the aftermarket sales just to remain at a flat level. So we are winning orders. We have qualified our first stage blade set that has run through its first campaign with a customer. So we are making real progress in that area along those lines.

Okay. Thanks a lot. I will turn it over to someone else.

Thanks, Chris.

Thank you. Once again, ladies and gentlemen, should you have a question at this time, please press the 1 key on your push button phone. Our next question is a follow-up from -- pardon me, from Suzanne.

Yeah, if we can just go back to -- you said you were consolidating corporate expense into the total revenues. What was the margin for the aviation segment excluding corporate in the fourth quarter?

The run rate of corporate expense was generally even with the prior quarters.[INAUDIBLE] From now on, it will be a consolidated reported number.

It will? Okay.

But, you know, no great change there from what it had historically been reported as.

Okay. And the IGT market, are you guys getting any sense that there has been over-cancellations throughout this downturn and there could be some renewed demand next year? What leading indicators are you looking for in the market?

We don't, at this point in time, are you talking on the OE area?

Correct.

We don't see any indication right now for next year of any significant increase although we are still receiving orders. But we don't see any evidence of increased or potential increased OE orders. We do, as John mentioned, see more and more in the aftermarket area. But we have not seen any potential uptick at this point in time in the OE area in over-cancellations.

Lastly, can you guys give us what fourth quarter sales were by end market? Like you have done in prior quarters?

Let me try and put that together for you here, Sue. Of the $152 million, $70 million was commercial. Regional came in at approximately $9 million. Business at approximately $11 million. And $45 million of government and military and other at $18 million. Hopefully that totals up to about 152.

Okay. Great. Thanks a lot.

Okay.

Thank you. Our next question is a follow-up from Chris Mecray.

Your indication on regional jets, some management tinge over Bombardier, are your folks telling you there might be any new opportunities to gain share with folks like that as they look at really reducing costs dramatically and presumably that might incorporate some outsourcing?

I don't think there is any doubt about the fact that we have opportunity and, yes, we are exploring those opportunities. But at this point in time, it's too early to really say anything specifically because Bombardier has not geared up 100% to take advantage of that and they're being a little slow on it. Primarily because they don't have to worry about it right now because their build rate is down so much.

Sure. And military and government. How do you think your opportunities stand for the coming year? What kind of growth or general trajectory are you on for the current year? I know you had a real good good step-up in the last year. I don't know if how should we think of that as a sustainable growth rate or flat or on that stepped up volume?

We are looking at a number of opportunities to continue that expansion.

I think that we are very optimistic in that area. We can't -- Chris, I can't talk about a number of things but we are very optimistic in that area.

I guess there is still the tanker opportunity if they close that contract?

Right, absolutely.

Although, is it fair to say if they get that in the next week, it may not be an immediate volume impact because they are talking about building those out late '04 or whatever? Is that not the case when it comes to components?

I think some of the tanker business that, you know, we will participate in short and long term because, if it's the 767 tanker, we already have the throughput on the basic plane itself. But I'm not only talking about the tanker opportunities, there are a number of other opportunities out there that we're very optimistic about..

I think if the tanker comes through, that provides, you know, additional support, too. When you look the commercial OEM structural parts business, to putting a floor on where we are and we are optimistically going up on the additional commercial builds coming forward. That will be a very nice steady long-term piece of business for us.

Right. Last thing, when you look at your working capital for the coming year, if you would just for the moment assume for argument sake that the volume environment is kind of stable, given your realignment, would you anticipate or hope to get as much or even more cash flow rate?

We would, one other number we would provide in providing guidance would be the CAPEX number, at or below this year's. And in a stable environment, we would meet or exceed the goals that we established this year on the working capital side. Which will be helped by that realignment process.

Indeed.

Chris, for your benefit, and just as much for the benefit of the operating people that have a tendency to dialing in on this conference call, the answer to your question is yes. [ laughter ]

I'm sure they appreciate that.

I'm sure they do.

Thanks, guys.

Thanks, Chris.

Thank you. Our next question comes from John Rogers. Please state your affiliation followed by your question.

D.A. Davidson. I'm sorry if I missed this but the backlog number at the end of the quarter, what was that?

Backlog number at the end of March '03 was $486 million.

And how much of that is related to the Boeing Spokane business?

We said the majority of the increase from December '02, which was 360, is related to the Boeing Spokane operation.

Okay. And can you give me a sense of how much of those orders are related to OEM business versus aftermarket?

The orders, the backlog, we report backlog. We've consistently said we report as backlog any firm orders that we have that we have purchase orders for that we will manufacture within the next two years.

Right.

We do not generally report very much of our backlog in the aftermarket services area because that generally speaking is something that comes in for repair or overhaul and we cannot predict that. So that's really not in our backlog. And our business is broken down. And we are approximately 60% in the OEM area and 40% aftermarket. So our aftermarket, there is very little backlog in that area.

Okay, great. Thank you.

Thank you. Our next question comes from Claude Stally. Please state your affiliation followed by your question.

Yes, Wellington Management. Good morning, guys.

Hi, Claude.

Can you talk a little bit about cash flow? And especially working capital. It looks like working capital was a good generator of cash flow in the fourth quarter.

I think the fourth quarter EBITDA number of $24 million is substantial. We did focus on working capital and I don't have the quarter-to-quarter change in front of me, Claude. For the year, working capital did use cash, so the net cash flow for the year number that we talked about included funding some growth and working capital. It wasn't a liquidation of working capital that generated the cash flow.

Okay. And you said acquisitions were $109 million for the year?

The combination of CAPEX and acquisition was $109 million.

And CAPEX was 32?

Yes.

Great. Thank you.

You're welcome.

Thank you. Since there are no further questions, this concludes the Triumph Group's fourth quarter and full fiscal year 2003 earnings conference call.

Thank you, everybody.

Thanks, everybody.

If you wish to access the remote replay of today's conference the you may do so by dialing 1-888-266-2081 with the pass code 6479681. This playback will be available until May 2, 2003. Once again, to access the replay, please dial 1-888-266-2081 with the pass code of 6479681. Thank you and have a good day.