Ken Herbert: Great. Thanks, Steve, thanks, Suman.
Steve Oswald: Thanks, Ken.
Suman Mookerji: Thank you.
Operator: Thank you. One moment for our next question. [Operator Instructions]. Our next question comes from the line of Jason Gursky of Citi. Your line is now open. Jason Gursky, your line is now open.
Jason Gursky: So, apologies, I had myself on mute. Good morning, everybody. Thanks for taking the question.
Steve Oswald: Hello, Jason.
Jason Gursky: I wanted, Steve, I wanted to ask about, a little bit more about Vision 2027, and in particular, the M&A component of the Vision there, because you’ve got some inorganic growth I think you’d like to get done. So, yes, the question, I guess it’s maybe a bit of a two-part question. We’ve got a company that recently went public, that’s now got access to some more money that claims that it’s going to go out and be heavily involved in buying up proprietary product type companies. So, I’m just kind of curious, what the competitive environment looks like these days for assets? So, I guess, A, the pipeline, what’s the pipeline looking like? What’s the competitive environment look like? And then, I also wanted to just kind of get your take on the size and scale of things that you guys would be willing to chew off, and maybe talk a little bit about the dynamic that’s going on there with one of your big customers in Spirit and the Airbus work, because that seems like it’s a Boeing by Spirit, that Airbus work has got to go somewhere, and just kind of curious what kind of appetite you guys might all have for taking on some of that work, all in the context of your M&A strategy?
Thanks.
Steve Oswald: Yes. Thanks, Jason. Good to be with you. Let me first just on our Vision 2027, and the acquisition piece. We have a placeholder for 75 million, right? So, we’re a bit modest on that, you know, because obviously it’s only 2024. We got several years ahead of us. So, we feel good about that. Again, it’s a bit modest, but right now, as we move forward in time, we’ve really been happy with what we’re doing acquisitions. I think it’s been a real, great thing for shareholders and for the company. And so, but we’re looking more where we can do some, maybe look at acquisitions where they can, again, help our current engineer products portfolio. We’re committed to that to build a business on that side. I think that’s smart and it’s a winning formula for shareholders.
I think 75 again is low. I think we’re going to do more bolt-on, but again, if we can find something where there can be some consolidation, we’re going to do that as well. So, I think for the next couple of years, that’s sort of where we sit. As far as Spirit, just let you know, for Airbus, we ship directly into Toulouse for A320. So, we’re really just working with them directly. We don’t really do anything for Airbus, for Spirit. Spirit’s much more, I think, in the A350 world, which we’re not right now. So, we’d be open to it. I mean, I think it’s — I read the notes this morning on some of the situations in the meeting in New York last night. It’s going to be difficult, but we’re there. I mean, we have the capacity. That could be an upside for us.
I have nothing to report on it, but we certainly think we could help out and Airbus, again, for all the business we do right now, is a first tier. We do everything with Toulouse direct.
Jason Gursky: Okay, great. So, the $75 million placeholder, looks like that through the 27 timeframe, you think is going to be pretty achievable. I’m just kind of curious, though, what does the pipeline look like today? What do you think the cadence of or potential timing of those acquisitions might be? Is this going to be near term, more back end weighted towards 2027? And just kind of what the competitive environment looks like and pricing on the kinds of assets that you might be chasing?
Steve Oswald: Let me jump in and Suman can say a few things, okay? So, we’re always in the market. So, I’ll just say that, all right? So, we’re always, we’re looking at things. We have an excellent team here, led by Suman on M&A. If something comes up this year, we’re going to do it. Our cadence is, it’s obviously slowed down through COVID for everybody, but we’d like to do at least one, if not two a year. Again, this year, we just did DLR back in last May, so, or last April and May. So, we have a little bit of time now. So, we’re always in the market. It’s competitive. I mean, I know you follow the companies, and many of them. And it’s a crowded lobby. But I will tell you that for what we want and what we’ve done, I mean, we’ve got a really good hit rate.
We’ve had a lot of success for the things we’ve gone after. Not every single one, but it’s up there. So, we’re excited about building that as part of the business. It’s a big part, big thing for me when I came in 2017. And so, I’ll let Suman, you want to say anything else on it?
Suman Mookerji: Yes, we’ve been actively looking at businesses. I would say there’s been a pickup in deal flow in late Q1 and coming into Q2. We’re seeing more assets come to market. Competitive environment, I wouldn’t say necessarily has dramatically changed. The company you referenced that went public recently has been around and looking for similar assets for over 10 years. So, we’ve certainly come across them in the past. So, I don’t see that dynamic changing now. So, we will continue to be aggressive for businesses that we really like and where we really think we can drive a lot of incremental value for our shareholders. So, we will continue to be aggressive with those opportunities. And as we have demonstrated in the past five years, we can, despite the competitive environment, win assets at a price at which we can still drive additional benefit and ROI for our shareholders.
So, we feel good about being able to continue doing that. And timing, as Steve said, is difficult to predict. It’s an active work ongoing on several opportunities, but timing always difficult to predict on M&A.
Steve Oswald: And Jason, just to chime in here, we’re also very excited about organic growth. Okay. We really want to get — hopefully the MAX will find its way by the end of the year. I mean, if they’re at 50 at some point in the future a drop through and everything else. We feel very good about our current operation too, delivering.
Jason Gursky: Okay, great. That’s wonderful. Appreciate the time.
Steve Oswald: Thank you, Jason. Always appreciate you calling in.
Operator: Thank you. I’m showing no further questions at this time. I would now like to turn it back to Stephen Oswald for closing remarks.
Steve Oswald: Okay, thank you very much. And thanks for joining us today. Obviously, we couldn’t be happier with our Q1. I want to thank my team, all the people working hard every day at Ducommun and with our relentless approach to things. So that’s what we do here. And we are very encouraged as we grow up, come out of March to have a, I think a super year for everybody, for our shareholders and for our company and for all the other stakeholders involved with us. So again, thanks for joining us. Have a great and safe day. Thank you.
Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.
