Q – Pete Skibitski: Yes. Okay. Makes sense. I appreciate that. Let me just move in to revenue. I want to make sure I understand. Mike, did you say, you expect industrial revenue up about 3% in the fourth quarter? I just want to clarify, I felt like that would presume aerospace is sort of flattish sequentially, if industrial is up about 3%.
Michael Hartnett: Yes. I think I said, aerospace or industrial would be up a few percent. And yes — where is the aerospace? What is the aerospace in the fourth quarter?
Robert Sullivan: Aerospace is anticipated to continue to escalate, as we move forward sequentially. So I think industrials, we’ll be a couple of points maybe, but aerospace will continue to grow as we continue to deliver.
Q – Pete Skibitski: Okay. Okay. Are we talking about industrial up year-over-year or sequentially?
Robert Sullivan: Sequentially.
Q – Pete Skibitski: Okay. Okay. Okay. Let me — one more question for me. I’ll get back in queue. I think Mike last quarter, you talked about going through your planning process for aerospace and defense and you were talking about 20% type growth, as I recall. Just wondering, if anything changed there? We are under kind of an extended continuing resolution on the defense side. So, I’m not sure how the visibility is going there. And we’ve obviously, had some max issues although it sounds like for you guys that hasn’t impacted anything. So just was wondering if you’re still feeling good about 20% type growth in 2025 for A&D.
Michael Hartnett: I’m trying to think. Well, I wouldn’t feel good. I think it’s going to be in that neighborhood. It will be between 15% and 20%. I don’t have the 2025 plan in front of me, and I don’t remember all the details of it. But I think it certainly is — nothing is backing off. I mean, it’s a matter of getting the materials and training the labor. For the most part, we have the capital equipment although some of it’s being augmented and then executing. And so I think, we’ll be in that 15% to 20% neighborhood for several quarters.
Pete Skibitski: Okay. Okay. And have you guys seen any big labor challenges in terms of getting the people you anticipate needing?
Michael Hartnett: Yes, we’re always being challenged there. It depends upon what part of the country you’re talking about. But certainly in the Northeast here that’s not an easy solution. We’ve brought some innovative solutions. We’ve planned with the growth in our population by plant has to be in order to meet our plans, and we are out recruiting people and doing interesting things in order to attract people to our plant. It’s pretty dry here. We’re being successful, but it’s — it comes at a great labor investment. The Southern California, it depends upon exactly where in Southern California your plants are. And I think for the most part, we’re okay there. We’re fine in Mexico in all the plants in Mexico. And we’re pretty good in the South Carolina also. So I think the major pressure is pretty much in the Northeast. And we have people working on that.
Pete Skibitski : Got it. Okay. Appreciate it guys. Thank you.
Michael Hartnett: Yes.
Operator: Thank you. Our next questions come from the line of Andre Madrid with Bank of America. Please proceed with your question.
Andre Madrid: Hi. How are you guys?
Michael Hartnett: Yes. Good.
Andre Madrid: You said material on 737’s at 42 with new orders inbound at 47, but with the recent announcement of the production freeze the FAA and post production freeze, how are you guys thinking to a more prolonged freeze impacts what moves out on your end? How can we think about that? And is that something you guys are kind of factoring in the moment? Or is it really not of concern?
Michael Hartnett: Well, right now, we’re listening to Calhoun’s conference call and trying to understand exactly what his direction was, and we’ve concluded that this direction was to maintain their rates — their planning rates on the MAX. And that’s kind of what we came away with. So we’re doing the same. And I think Boeing is in a tough place. I mean — they have customers who need the planes are screaming for the planes. They have a long backlog. They have just now getting their supply chain to perform for them. And I don’t think they want to tie in on it at this point and slow everybody down. So I think they’re going to be using some working capital in order to bank some of these components. And if it’s a year, it’s what 150 planes.
Well, then they have 500 planes on the tarmac at one point in time and have all that working capital tied up there it seems like 150, which when you’re only buying — you’re only stocking the components would be would be a small change for them. They certainly can afford it. So I think they don’t — I think their options are limited and I think they have to maintain rate.
Andre Madrid: Understood. Got you. And then pivoting again to industrial, I know it was touched on a little bit already, but maybe to get back in and just really clarify. How much of the softness do you think could just be attributed to diminished end market demand versus actual issues, because it really doesn’t seem like there’s anything on your front, but I might have that wrong. I mean how much — can you maybe just talk broadly about the demand drivers long term on that side of the business?
Michael Hartnett: Yeah. Well on the industrial side, we see markets of mining and metals performing pretty well for us even during this period. Food and beverage areas these are important areas for us. That’s doing pretty well. Oil and natural gas is doing real well for us. And that’s been offset by what we consider aggregate and general industrial and semicon. So I think aggregate is a big one. It’s an important one to us. It’s very dependent upon this. It’s — this infrastructure bill could be a big aid to the aggregate business. And so we’d expect a little pickup in the overall industrial demand through our FY 2025 and that’s kind of what our budgets are based on. And so that’s how we’re making the call.
