Earnings call transcript: Loar Holdings Q1 2025 sees record sales, stock dips

Loar Holdings LLC reported record sales in the first quarter of 2025, with revenue reaching $150 million, marking a 12% increase year-over-year. Despite strong financial performance, the company’s stock fell 4.63% in pre-market trading. This decline comes amid a broader market reaction to the earnings call, where the company announced a raised 2025 net sales guidance of $482-$490 million. The stock’s current trading price is $94.88, down from its last close of $99.49. According to InvestingPro analysis, the stock appears overvalued at current levels, with an RSI suggesting overbought territory. The company has delivered impressive returns, with a 112% gain over the past year.

Key Takeaways

• Loar Holdings achieved record sales of $150 million in Q1 2025, a 12% increase YoY.
• The stock price fell 4.63% in pre-market trading despite strong financial results.
• The company raised its 2025 net sales guidance to $482-$490 million.
• Adjusted EBITDA margins improved significantly to 37.6%.
• Defense sales surged by 30%, indicating strong demand across market sectors.

Company Performance

Loar Holdings demonstrated robust performance in the first quarter of 2025, with sales reaching an all-time high of $150 million. This represents a 12% increase compared to the same period last year. The company’s strategic focus on product innovation and manufacturing optimization has yielded positive results, contributing to a significant rise in net income to $13 million. The commercial aftermarket and OEM sectors saw sales increases of 13% and 8%, respectively, while defense sales grew by an impressive 30%.

Financial Highlights

• Revenue: $150 million, up 12% YoY
• Net income: $13 million, an increase from previous periods
• Gross profit margin: Increased by 370 basis points
• Adjusted EBITDA: Up $10 million from Q1 2024
• Adjusted EBITDA margin: 37.6%

Outlook & Guidance

Loar Holdings has raised its net sales guidance for 2025 to a range of $482-$490 million. The company expects adjusted EBITDA to be between $182-$185 million, with an anticipated EBITDA margin of 37.5%. EPS guidance for the year is set at $0.71-$0.76 per share. Analyst consensus is notably bullish, with price targets ranging from $91 to $121.17. For deeper insights into Loar Holdings’ valuation and growth prospects, access the comprehensive Pro Research Report available exclusively on InvestingPro, covering over 1,400 US stocks with expert analysis and actionable intelligence. The company forecasts high single-digit growth in the commercial OEM sector, double-digit growth in the commercial aftermarket, and high double-digit growth in defense sales.

Executive Commentary

CEO Dirksen Charles commented, "We are boring. We beat, we increase our guidance, we announce our largest acquisition, we improve our margins." His statement reflects the company’s consistent performance and strategic growth initiatives. Executive Co-Chairman Brett Milgram added, "The activity level, the dialogue we’re having and the opportunity set is about as good as we’ve seen it in quite a long time," highlighting the positive market environment and the company’s strong positioning.

Risks and Challenges

• Supply chain disruptions could impact product delivery and cost management.
• Market saturation in certain sectors may limit growth opportunities.
• Macroeconomic pressures, such as inflation, could affect profitability.
• Geopolitical tensions may pose risks to international sales.
• Competition from other industry players could impact market share.

Q&A

During the earnings call, analysts inquired about potential pricing pushbacks from airlines, to which the company reported none, citing strong demand. Questions also focused on the impact of tariffs, with executives noting minimal effects. The company emphasized its active M&A pipeline and commitment to talent acquisition and development as part of its strategic growth plan.

Full transcript - Loar Holdings LLC (LOAR) Q1 2025:

Paul, Conference Operator: Greetings, and welcome to the Lohr Holdings First Quarter twenty twenty five Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce Ian McKillop, Director of Investor Relations.

Please go ahead.

Ian McKillop, Director of Investor Relations, Lohr Holdings: Thank you, Paul. Good morning, and welcome to the LOR Holdings Q1 twenty twenty five earnings conference call. Presenting on the call this morning are LOR’s Chief Executive Officer and Executive Co Chairman, Dierksen Charles Executive Co Chairman, Brett Milgram Treasurer and Chief Financial Officer, Glenn D’Alessandro as well as myself, Ian McKillip, the Director of Investor Relations. Please visit our website at loregroup.com to obtain a slide deck and call replay information. Before we begin, we’d like to remind you that statements made during this call, which are not historical in fact, are forward looking statements.

For further information about important factors that could cause actual results to differ materially from those expressed or implied in the forward looking statements, please refer to the company’s latest filings with the SEC available through the Investor Relations section of our website or at sec.gov. We’d also like to advise you that during the course of the call, we will be referring to adjusted EBITDA, adjusted EBITDA margin and adjusted earnings per share, each of which is a non GAAP financial measure. Please see the tables and related footnotes in the earnings release for a presentation of the most directly comparable GAAP measures and applicable reconciliations. To begin today, I will now turn the call over to Dirksen.

Dirksen Charles, CEO and Executive Co-Chairman, Lohr Holdings: Thanks Ian. Good morning. Six weeks ago I mentioned that every day as a public company has been a school day, at least for us. So I would be remiss by not starting today’s conversation with telling you one thing I learned after our last call. What I learned is that we are boring.

Yes, we at law are boring. Now I have personally been called all kinds of names but this one is new. Imagine one of our favorite investors called us boring. Can you believe that? Here’s what he said.

You beat, you increase your guidance, you announce your largest acquisition, you improve your margins and you just continue to do what you say each time. So look, listen, to that individual and he knows who he is, I guarantee that on this call we’re going to continue to be boring. With that said, let’s be boring. Here it goes. I’m Dirksen, Founder, CEO and Co Chairman of Law.

As always, we’ll keep our remarks brief, so let’s start by reminding you who we are. Law is a family of companies with a very simple approach to creating shareholder value. First, we believe that by providing our business units with an entrepreneurial and collaborative environment to advance their brands, we will generate above market growth rates. Since our inception in 2012 through the end of calendar year 2024, we have grown sales and adjusted EBITDA at a compound annual growth rate of 3745%, respectively. Over the long term, we expect to increase sales organically at double digit percentages with the last three years, twenty twenty two, twenty twenty three and 2024 achieving organic sales growth of 18%, fourteen % and fifteen % respectively with of course adjusted EBITDA growing at an even faster rate.

We expect that to continue. We execute along four value streams. We identified pain points within the aerospace industry and look to solve those problems through organically launching new products, which we believe over the long term will create one to three percentage points of top line growth annually. We focus on optimizing the way we manufacture, go to market and manage our companies to enhance productivity. Each year we’ll identify initiatives that will allow us to continually improve margins with a focus on one or two major initiatives each year that will improve our margins.

In addition, across our portfolio of companies, we’ll achieve more price than our cost of inflation each year. The result is a continuous improvement in margins year over year with on occasion a temporary dilution as a result of acquiring a business with diluted margins or incurring costs as a result of being a public company, all of which we have experienced over the last five years. But regardless of these temporary headwinds, we continue to improve our margins. As seen on Slide five, during Q1 of twenty twenty five, we improved margins by 160 basis points, in line with our guide for the year. More importantly, we are committed to developing and improving the talent of all of our employees because our success is solely a result of their dedication and commitment.

So to all my mates, as always, a big thank you for your commitment and hard work. I’ll now turn the call over to Brett to walk you through the key characteristics of our portfolio. Brett, be boring. Thanks, Dirksen. I am going

Brett Milgram, Treasurer and Executive Co-Chairman, Lohr Holdings: to be boring. This slide is one that I think most of you have seen before. And as Dirksen alluded to and Glenn is going to get into later, we continue to generate really outstanding financial performance because of our very disciplined approach to our business model. Our business model starts with the proprietary nature of our product and all the barriers to entry, aftermarket exposure, cross selling opportunities and niche markets that we engage in. We do that though across a very balanced portfolio in end markets, products, customers, applications on the aircraft such that we can withstand any type of market environment and continue to generate those financial types of financial returns that I think people have come to expect.

With that, I’ll let Ian talk to you a little bit about our products.

Ian McKillop, Director of Investor Relations, Lohr Holdings: Yes. Thank you, Brett. As we’ve shared with you in previous calls, this slide highlights the diversity of our proprietary product offering. At LoRa, we go to market with an average of more than 20,000 unique products, of which no one product makes up more than 3% of our annual net revenue. Our customers have come to depend on our highly proprietary products, quality, on time performance and engineering capabilities to ensure they are able to maximize their production and aircraft operations.

One of our strategic value drivers at LOR is launching new products. Each year the execution of this value driver delivers 1% to 3% of our organic top line growth. One product we are particularly excited about is the secondary cockpit barrier. The secondary barrier is the combination of partnership with our customer Airbus and the extensive design and engineering capabilities across LORE to meet requirements for improved safety set forth by the Federal Aviation Administration. Our mates have worked tirelessly to bring a design from a clean sheet of paper to work in concept and ultimately to production in approximately twelve months.

Production units have already shipped to date and entry into service is scheduled for later this year. The secondary barrier we found on all new production Airbus aircraft and will be available to our airline partners across the globe for retrofit. We could not have done this without the hard work of our teammates and their dedication to collaboration and meeting our customers’ unique needs. Thank you to all at Loar who have made this a success. I’ll now pass the call over to Glenn to walk through the end market and financial results.

Glenn D’Alessandro, CFO, Lohr Holdings: Thank you, Ian. Good morning everyone. Let me start by discussing sales by our end markets. This comparison will be on a pro form

Dirksen Charles, CEO and Executive Co-Chairman, Lohr Holdings: a basis as if each of our

Glenn D’Alessandro, CFO, Lohr Holdings: businesses were owned as of the first day of the earliest period presented. This market discussion includes the acquisition of Applied Avionics in Q3 twenty twenty four. We achieved record sales during Q1 twenty twenty five. In total, our sales increased to $150,000,000 which is a 12% increase as compared to the prior year period. This increase was driven by strong performances in defense, commercial aftermarket and commercial OEM.

Our commercial aftermarket sales saw an increase of 13% in Q1 twenty twenty five versus Q1 twenty twenty four and was up 15% sequentially from Q4 twenty twenty four. This is primarily driven by the continued strength in demand for commercial air travel. We continue to see record bookings and backlog across all our market sectors. Our total commercial OEM sales increased by 8% in Q1 twenty twenty five as compared to the prior year period. This increase was driven primarily by higher sales across a significant portion of the platforms we supply.

The increase of 30% in our defense sales was primarily due to strong demand across multiple platforms and an increase in market share as a result of new product launches. Defense sales will continue to be lumpy given the nature of the ordering patterns of our end customers for our products. Let me recap our financial highlights for the first quarter of twenty twenty five. Our net organic sales increased 11.1% over the prior period. Our gross profit margin for Q1 twenty twenty five increased by three seventy basis points as compared to the prior year period.

This increase was primarily due to the execution of our strategic value drivers as well as operating leverage. Our increase in net income of $13,000,000 in Q1 twenty twenty five is primarily due to higher operating income and lower interest, partially offset by higher income taxes. Adjusted EBITDA was up $10,000,000 in Q1 twenty twenty five versus Q1 twenty twenty four. Adjusted EBIT margins were strong at 37.6% due to the execution of our strategic value drivers and operating leverage. This was partially offset by a higher mix of defense sales and the continued build out of our infrastructure to support our reporting, governance and control needs as a newly public company.

Let me turn the call back over to Dirksen to share our outlook for 2025.

Dirksen Charles, CEO and Executive Co-Chairman, Lohr Holdings: Look, we are excited to share our most recent view for calendar year ’25. This view, as you all can see, is in excess of what we told you six weeks ago and that one was in excess of what we told you six weeks prior. Our confidence rests in the great strides that we have made executing on our value drivers in the first quarter of twenty twenty five and the strength of our proprietary portfolio. Primarily, we are ahead of our plan on our value pricing and productivity initiatives. In addition, we’ve seen no degradation at all in demand across any of our end markets.

And as Glenn said earlier, we’ve actually had record bookings across all of the end markets, to date. So when you combine that with the fact that we expect no meaningful impact to our results as a result of the current tariff environment, we feel really good as always about the guidance we’re giving you. So therefore, for calendar year 2025, we expect on a pro form a basis, assuming we owned all of our business units since the beginning of ’20 ’20 ’4, that our end markets will be up as follows: Commercial OEM will be up high single digits versus 2024 Commercial aftermarket will be up double digits, up from our previous guide of high single digit growth, given the strength that we have seen early in the year in bookings and in what we’ve delivered. While our defense end markets will be up high double digits, and again, think between 1720%, we’re off to a great start in the first quarter being up 30%. These market assumptions along with our continued execution of our value drivers will allow us to meet or exceed the following for calendar year 2025.

Net sales between $482,000,000 and $490,000,000 up from $480,000,000 to $4.88 adjusted EBITDA between 182,000,000 and $185,000,000 up from 180,000,000 to $184,000,000 with adjusted EBITDA margin of approximately 37.5%, which is 120 basis point improvement over 2024. Net income between 59,000,000 and $64,000,000 while EPS will be somewhere between $0.71 and $0.76 a share. In addition, we expect capital expenditures of approximately $14,000,000 interest expense for the year of approximately $28,000,000 with an effective tax rate of approximately 30%. Depreciation and amortization of approximately $51,000,000 non cash based stock comp of approximately $50,000,000 with a fully diluted share count of approximately 97,000,000 shares. With that said, our updated guidance does not include any benefit from our most recently announced pending addition to our family of companies, L and B, Fans and Motors.

As stated, we expect to close the acquisition of L and B in the third quarter of calendar year twenty twenty five. And to be clear, say one more time, our guide includes any impact we see today related to the current tariff environment, which is insignificant. With that, Paul, let’s open the line for questions. Operator? Hey, Paul.

Paul, Conference Operator: We will now be conducting a question and answer session. Thank you. Our first question is from Ken Herbert with RBC Capital Markets.

Ken Herbert, Analyst, RBC Capital Markets: Yes. Hi, good morning.

Dirksen Charles, CEO and Executive Co-Chairman, Lohr Holdings: Hey, Ken. Good morning, Ken. Good morning.

Ken Herbert, Analyst, RBC Capital Markets: Hey, Dirksten, you raised the guide for the commercial aftermarket and can appreciate your comments that you’re not seeing anything today in terms of airline behavior that could change relative to the strength we’ve seen. But I just wanted to follow-up on two areas. Are you seeing any incremental pushback on pricing from airlines in your commercial aftermarket channel? Or any incremental concern about inventory levels that could be with the airlines that could potentially be a risk down the road?

Dirksen Charles, CEO and Executive Co-Chairman, Lohr Holdings: So the first part of your question, not seeing any pushback on price, and I’ll add a little. We’re actually probably getting more price this year than we did last year, but no pushback there. With regards to inventory, there’s a lot of stories we can tell there, right? In some areas, there are parts where there is inventory in the system where we see lighter demand. And then there’s parts where there’s not enough inventory where we’re trying to actually keep up with the pace of demand.

But when I net all of those together, the demand we’re seeing right now is actually stronger than it was, I would say, even this time last year. So really good demand. I meant to what I said when we’re seeing no degradation. In fact, it’s really, really strong in terms of the demand.

Ken Herbert, Analyst, RBC Capital Markets: That’s helpful. And if I could, just a follow-up then. I’m guessing it’d be fair to say that you didn’t see any pre buying activity ahead of a potential tariff impact into maybe into China or other parts of the world?

Dirksen Charles, CEO and Executive Co-Chairman, Lohr Holdings: No, actually, did not. I’ll tell you where so I’ll say it this way. Tariffs have just been noisy for us, right? As you know, we have a proprietary portfolio. So we can pass along any costs that we incur.

And our thought process around that, especially in the early stages here because this is still a moving target, is that as we incur costs related to tariffs, we pass along just that cost. So no margin on top of that. We’re not trying to be that guy, right? Now if we wake up a year from now and I’ll make up a number I keep hearing a lot, 10% being the minimum, we’ll view that as cost as we do everything else, consider the inflation and price to get margin on top of that. So no one pushing and pulling within the orders for our parts.

Where I’ve seen it is in some of our vendors actually taking advantage of the, what I would call, the media stories. So I’ll give you an example. Early February, we were already getting vendors telling us, oh, we got to increase our price 25% because tariffs are up 25%. Of course, as we all know, that was not true at that time. It was just conversation.

Nothing went into effect as of that day. So what we have been doing, and this goes back to why it’s been noisy for us, is anyone who has said to us that they have a cost increase, because of tariffs, they have to prove it to us. They actually have to show us that they actually made those payments, before we will even expect except having a conversation around that. So Ken, it’s been more noisy than anything else and hasn’t been, a real impact to us.

Ken Herbert, Analyst, RBC Capital Markets: Thanks, Dirkgen. I’ll pass it back there.

Paul, Conference Operator: Thank you. Our next question is from Sheila Kahyaoglu with Jefferies.

Sheila Kahyaoglu, Analyst, Jefferies: Good morning, guys,

Ken Herbert, Analyst, RBC Capital Markets: and thank you for the time.

Sheila Kahyaoglu, Analyst, Jefferies: Maybe just on the end market, while continuing on with Ken’s line of questioning. If we could talk about defense, it’s not a business you talk about as often as commercial aftermarket, but the growth was very robust at 33% organically and you’re implying a slowdown to high teens in the year. How do we think about what drove that growth? How we think about it? Is it just lumpy?

And what’s driving the decel as we head into the next three quarters?

Dirksen Charles, CEO and Executive Co-Chairman, Lohr Holdings: Sheila, apologize. Can you ask the question again? You broke up. We’re having a little trouble with our I’m

Sheila Kahyaoglu, Analyst, Jefferies: so sorry. It’s probably my fault. Can you hear me better now?

Dirksen Charles, CEO and Executive Co-Chairman, Lohr Holdings: Yes.

Sheila Kahyaoglu, Analyst, Jefferies: Okay. On defense, organic growth was up 33% in the quarter, just very robust. What’s driving the decel throughout the year? Is it just lumpiness? Any programs you’d call out?

If you could talk about your defense on market.

Ian McKillop, Director of Investor Relations, Lohr Holdings: Sheila, this is Ian. I would say it is defense as we always look at is very lumpy. We had a great Q1 at up 30%. And we are guiding in a conservative way throughout the balance of the year. We do see a lot of programs come and go within the quarter.

So what I would say is for now, it’s more about just trying to make sure we have a level playing field for the year and we’ll continue to watch it and see if we need to adjust guidance appropriately.

Sheila Kahyaoglu, Analyst, Jefferies: Got it. Thank you. And then maybe just on the commercial OE business. I think the large Boeing and Airbus was down slightly. Can you talk to us what you’re seeing on rates and how you’re aligning your facilities for production for the remainder of the year?

Dirksen Charles, CEO and Executive Co-Chairman, Lohr Holdings: Yes. So we’re still holding the way we think about ending the year, if I can start there. And I can tell you what we’ve been seeing. With the MAX in the 20s, I think we have about 24 a month is how we’re thinking about the year in our guide. Now Boeing is doing significantly better than that.

So we should do better, again, going just telling you how we built our guide. So I’ll stay with Boeing for a second. First quarter, orders higher than we were thinking, probably around 28 on the average across the group is what I’d say. It varies depending on the part, per month in terms of the max. And in terms of Airbus, we have leaving the year in our guide in the 30s, ’30 ’5, ’30 ’6 ish, something along those lines.

Ian is double checking me. And for the quarter, it’s been pretty consistent around those levels. We haven’t seen the same choppiness we see on Boeing OEM parts that we do on Airbus. So, it’s actually off the stronger start for the year than we were originally thinking. If you remember, we had close to zero, if not zero in terms of our thinking about in the first quarter for the MAX.

So much better than we were thinking.

Sheila Kahyaoglu, Analyst, Jefferies: Got it. Thank you so much, Dirksen. Appreciate it.

Paul, Conference Operator: Our next question is from Christine Lewog with Morgan Stanley.

Christine Lewog, Analyst, Morgan Stanley: Hey, good morning, everyone. And Dirksen, having a boring business in this volatile market, must feel like a king. So good problem to have. With that said, with the supply chain going well, the demand environment being strong, what are you spending the majority of your time doing today? What’s your key priority?

And how do you measure success?

Dirksen Charles, CEO and Executive Co-Chairman, Lohr Holdings: Wow. So I’m going to start answering because I have a lot. But I’m going to start answering the questions so I can get Brett to chime in here. But one of the things that we’re spending a lot of our time on is the pipeline of opportunities that we see. It’s been actually taking us in many different directions here.

It’s probably stronger than we’ve seen it in A long time. We’ve been

Brett Milgram, Treasurer and Executive Co-Chairman, Lohr Holdings: probably as busy as we’ve ever been quite candidly on the M and A stuff across all different sectors. And honestly, with all the macroeconomic noise and volatility out there, one may have thought that M and A activity would have slowed down. In fact, think it’s gone the opposite way. I think it’s accelerated. We are in any number of discussions with a handful of potential sellers.

And it sure seems like the rest of the year is going to be very, very busy. So at least on the inorganic front, that’s been taking up a lot of our time. But the good news is a lot of

Dirksen Charles, CEO and Executive Co-Chairman, Lohr Holdings: great opportunity. And organically, focus has been on really on talent. We’re seeing a lot of growth and with the inorganic opportunities that we’re seeing, we want to make sure that, we have the right team in place to support that growth. So there’s been a huge focus around that. So I’ve spent a lot of time there.

Those are probably the top two things other than the day to day blocking and tackling. Talent is

Brett Milgram, Treasurer and Executive Co-Chairman, Lohr Holdings: always for us, particularly in an environment where we see a lot of growth ahead of us. And as you’ve seen in our numbers and our guide, we’re raising for the year because we think the year’s got the right trajectory upward.

Christine Lewog, Analyst, Morgan Stanley: Yes, that makes sense. Thank you. And I’m following up on the pipeline. I guess I’m surprised by the commentary that you’re seeing more activity now. Can you provide more color on what’s driving that?

I mean, especially with the end market so strong, I would have thought that people would want to hold on to their assets. So what’s driving that incremental pipeline? And then also with this opportunity set sounding fairly rich, are you willing to lever up above your leverage target?

Brett Milgram, Treasurer and Executive Co-Chairman, Lohr Holdings: Well, I’ll answer your last question first. The good news is given where our balance sheet is, I don’t think we’re going to need to. So that’s number one. Number two, look, every seller is a little different and their motivation is a little different. But typically what we see is an environment where earnings are good and visibility is good.

Oftentimes that leads to more willing sellers. And so we are seeing not just in defense, not just in commercial, not just aftermarket, not just OE, but kind of across the board, dialogues with sellers that are very constructive. Now never predict exactly when and if you’ll get to the finish line on all of them. But like I said before, I can say that the activity level, the dialogue we’re having and the opportunity set is about as good as we’ve seen it in quite a long time. Part of that may be part and parcel with us now being a public company, where we have had comments oftentimes of people saying, we didn’t even know who you were before last year.

And so maybe that’s an explanation for some folks who are reaching out to us proactively as opposed to the other way around. But either way, it’s an active environment for us.

Christine Lewog, Analyst, Morgan Stanley: Great. Thank you.

Paul, Conference Operator: Our next question is from Bradley Aster with Citi.

Bradley Aster, Analyst, Citi: Great. Thank you. Good morning. Just a quick question on the defense side of the business. So the new administration looks like they’re going to engage in some procurement reform, including a potential rewrite of the federal acquisition regulation and the consolidation of much more Pershing Power at the GSA.

Can you just talk a little bit of what you like about the existing procurement system and what you like to see change? And then can you also discuss how this change might impact your business? Thanks.

Ian McKillop, Director of Investor Relations, Lohr Holdings: Yes. I mean, I think, you know, when it comes to any potential changes in regulation or how the government’s business, we’ll wait until those rules are finalized, and we’ll assess them appropriately. Today, we have a great system in place where our teams work well with either the tier one supplying the US government or directly with the US government. So I withhold my judgment on any changes until we know what those are. But I think we have figured out the best way to be efficient and that’s really what our teams are always challenged to do depending on the environment.

Brett Milgram, Treasurer and Executive Co-Chairman, Lohr Holdings: Yes. And look, the good news for us, procurement methods aside, we’re sticking with the model that we’ve had success with, which is that proprietary products that, I’ll say it this way, are important to our customers and are critical to aircraft flying and equipment moving from A to B. And I think as long as we stick with that model, we’re going to continue to find success, not only in The U. S. Defense market, but as per our most recent acquisition, even in Europe and elsewhere in the world.

Bradley Aster, Analyst, Citi: I appreciate all the color. That’s very helpful. Thank you. I’ll pass it along.

Paul, Conference Operator: Thanks. Thank you. There are no further questions at this time. I would like to hand the call back over to management for any closing remarks.

Dirksen Charles, CEO and Executive Co-Chairman, Lohr Holdings: Yes. So look, a big thank you to everyone that is taking the time to hear our story again today. Believe me when I say we continue to be extremely excited about building our aerospace and defense cash compounder that we call law. And again, looking forward to speaking to you all in thirteen weeks. It will feel like a long time since we’ve been speaking to you guys every six weeks here recently.

So look, thank you, you, thank you for taking the time to hearing our story.

Paul, Conference Operator: This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.

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