But I believe all that’s going to be handle post haste and that we’re still in a very strong position. And it’s just really going to depend on how fast they ramp back up on the sales as to whether or not we’ll see any further impact on the outlook. But for now again it’s the reason we’ve always emphasize our diversity in this field focusing on defense and bizjet and the other outlets for our products including space which is growing. I think that helps minimize anything that’s been going on lately a lot more than perhaps it did with us four or five years ago.
Curt Woodworth: Great. Thank you for that.
Keith Harvey: Thank you.
Operator: Our next question comes from Josh Sullivan with The Benchmark Company. Please proceed with your question.
Josh Sullivan: Hey, good morning.
Keith Harvey: Morning.
Neal West: Morning.
Josh Sullivan: If we think of those buckets within aerospace you just mentioned your large commercial bizjet, defense, and space. How have those different buckets folded in the guide for the year?
Keith Harvey: Yes. So, how we’ve looked at those various components and you can imagine they move a little bit. But we said that the commercial — large commercial jets had been between 50% and 60% of the total our demand outlook for aerospace for us and then the other buckets move around and that remaining 40% to 50% up. For instance defense is been growing a little bit. Biz jet has been strong, ut now we’re starting to see a space drive a stronger modifier to those numbers. So when we’re talking commercial aerospace the large commercial aerospace that’s a sizable portion of our business. And so obviously we monitor all these components very well including the stocking and destocking that take place. And so I would say that right now on the non-commercial aerospace we’re in very good position from a stocking and inventory perspective and demand is still holding up very strong.
So –so we’ve got good confidence in that the balance of the year. And I think what you saw Josh on the on our comments there I think short-term we like for Boeing on this 90 day quality analysis assessment with the FDA. They’re about halfway through that. And I don’t foresee them really going back to launching to the build rates of where they’re focused on right now 38 until after that period is over. So I think that could probably have a continued impact on perhaps more of the second quarter. But then I believe that Boeing is absolutely committed to making the changes required and adjustments. And I think they’re going to be more focused and back toward those expected build rates toward the second half of the year.
Josh Sullivan: And then just as far as kind of heading into this week’s announcement with Boeing I mean were the service centers and distributors? I mean were they already hearing and their body language and their ordering cadence. When did that kind of turn? Or did it turn ahead of the announcement?
Keith Harvey: No, I would say it really it hasn’t turned so much in that and I give great credit to this. Boeing is reached out to their top suppliers and really had a good conversation as to what they intend to do. They can’t tell exactly because they’re working with other principals to trying to put things in place, but they’ve been very focused on ensuring that the supply base and everything has been transparent. Good communication, good open discussion about where inventory levels are due to build rates and then and then expectations going forward. And what I really appreciate is of the openness of having a dialogue instead of just actions and resulting and us just reacting to their actions. So I believe there’s strong management of this process and I believe any impact that will fill at all should be minimum.
Josh Sullivan: Great. Thank you for that.
Keith Harvey: Thank you.
Operator: Our next question comes from Bill Peterson with JPMorgan. Please proceed with your question.
Bill Peterson: Yes. Hi. Good morning everyone. Thanks for taking the questions.
Keith Harvey: Good morning
Bill Peterson: Yes. Thanks. Nice job in the first quarter margins and the reiteration for the full year. But I guess if we were just a flat line you’d actually come in even above that expectation. So I’d like to understand that trajectory from here. Maybe what was sort of one-time in nature in the first quarter that maybe doesn’t repeat in the second quarter of any sort of color on how to think about the margin progression for the balance of the year would be helpful.
Keith Harvey: Certainly. Well a few things happened in the first quarter build that were a pleasant surprise to us. One, we had talked about the concern about compression in pricing as we as we had gone into the year. We really did not experience that in the first quarter. Now I’m not taking that away. I still believe with some of the North America being one of the strongest markets out there. We tend to attract a lot of other players and other countries that aren’t doing so well. So there’s always that the outlook there a little concern about some price compression. And so we work that into the — to the outlook going forward. The teams did a great job from a cost control perspective so big, big outlook for us on that normalizing of operations.
So we’re really starting to get back into the tone of how we like to operate our businesses, which is managing cost, strong efficiencies, good efficiencies improving across the board. And I think that that’s something that will continue on itself. And the other thing was the final thing that we took into account. We had very strong aerospace for the quarter, especially as you compare to the first quarter of last year. And as we’ve stated, we’ve now got four or five quarters of good, strong improvement on the aerospace and high strength. And I think for the balance of the year, just what we just got finished talking about with the large commercial production and perhaps some pauses or I would call it, a general pause or something, which just gives us a little bit of caution as we go through the balance of the year.
But what I’m really focused on is that, we’re acting toward the plan where we expected to be. It perhaps got out ahead of a little bit on the first quarter, which is good news and we’ll see how the balance of the year goes. But it’s always better to be off to a great start and having some deploying some tactics and strategies in place that you know are moving you to your ultimate goal.
