Michael Hartnett: Well, I think just to go through my list of the obvious. Certainly, we talked about the volumes in the aircraft businesses that is going to help us more and more and more of this year. Secondly, we have several processes that we were working on in 2019 and right before the pandemic. And we were early on the learning curve for those processes. And so we have had from 2019 to now 2023, to mature those processes and achieve and introduce volume. And that is happened in a few plants where the designs were very complex and required a disproportionate learning curve to get it to the pro forma gross margin that we were targeting. And so that two or three-years, where the where the volume demands were off, it was very helpful to maturing those processes.
When the volume demands are on and you have immature processes, you don’t have the resources to mature them, because you are busy trying to ship product to a customer, who needs to incorporate that product and what he is producing. So that timeframe was very helpful. And also, I think we have in-sourced components that over the period, just accrued to the benefit of the margin.
Michael Ciarmoli: Okay. I wanted to actually ask on that. The status of the in sourcing kind of what inning are you in there? I know, I think you talked about at one point 200 million of savings, so it sounds like you are starting to see some of that benefit?
Michael Hartnett:
O:
Michael Ciarmoli: No, I thought there was 200 million of product that door dodge source that you could potentially start sourcing internally. I thought that is what it would, no, I got the synergy side of it, but I thought you had flagged $200 million at one point.
Michael Hartnett: Well, there is a pool of 200 plus to choose from. And not all fits, but some does.
Michael Ciarmoli: Last one on the year, I think you were still calling or last quarter double-digit aerospace revenue growth and high-single for industrial as part of that 1.6 billion. Are those still directionally correct?
Michael Hartnett: That math works. I think industrial is maybe our goal has always been two times GDP, and, I think that is kind of where that fits.
Operator: Our next questions come from the line of Joe Ritchie with Goldman Sachs.
Vivek Srivastava: This is Vivek Srivastava on for Joe. Maybe just wanted to zoom in on the industrial side and particularly on the classic RBC industrial. Looks like sales decline, sort of mid-single-digit in the classic RBC industrial part. Just any color on what drove the decline? How does that growth in the classic business look going forward in the coming quarters?
Daniel Bergeron: I would say on the industrial cyber classic RBC on the OEM site. It was mainly driven by Semicon wind machine tool holders and cots warehousing. And I live on the heavy truck. So I think those – we just had a really hard comp to last year, and I think some of these markets are coming back and we should see some of them improve them in the second half of the year.
Vivek Srivastava: And then maybe just looking at the next quarter’s guidance just the low end of the sales would suggest industrial probably decelerates from here. So just want to understand what underpins the low-end, top-line guide assumption, especially on the industrial side.
Michael Hartnett: I think on the range, when we look how many production days are on the quarter compared to the first quarter, there is less amount of production days. So it kind of hits both the industrial side and the aerospace and defense side of the business. And then it all depends what big projects that we are shipping on the defense side, on the marine, and on aerospace, like the F-35 projects like that. And they could be lumpy quarter to quarter. So, that range is pretty wide to forecast some of that. And we kind of have the same impact in Q3 because of the holiday season. And in Q4 we have an extra five to seven production days. So, you are shipping an extra five to seven days of product for your businesses. So it is kind of a, when things normalize year-over-year, it is always that u-shaped effect when we are in a steep growth period, you don’t see it.
