Dan Crowley: Yes. We’ve gotten the latest schedule from Boeing that gives us bill rates. I mentioned our current delivery rates 30 to 31 a month. Now they put a marker out there to be at around 50 in 2024. And so it will ramp up incrementally between now and then and some logical step points. What I’ve observed about Boeing’s rate changes is that with each new schedule we get, there’s a smaller adjustment. So the ball is bouncing less high with each bounce. They’re really dialing it in. They put a lot of people on the road as have we chasing those supplier shortages. And as they fix them, there’s fewer and fewer ones to remedy that are constraints on the ramp. You read about Boeing opening the fourth line for 737, what they call the North line.
That’s going to help a lot. All the recent orders reinforced the need for that. So we are staying in lockstep with them. We’re not building at rates above them. I will say, part of our higher working capital in Q2 and Q3 was flat spot that we saw on engine production and Boeing’s build rate as well. And now that we’ve got clarity to the rate going up this year, and next year, we’re going to burn that inventory off quickly. So we’re excited. Even on the LEAP, we do a lot of gearboxes for the LEAP, there had been some deferral of orders midyear this year that got restored in our fourth quarter. So now we’re scrambling to deliver them. And as they update their profile, we’ll adjust, but we expect those adjustments to be smaller and generally in the direction of going from 30 to 50 on the narrow-body.
Noah Poponak: Okay. That’s helpful. And just a little — digging in a little further on the MAX in the shorter term. Their stated production rate there has been about the same for a while and the delivery — the monthly delivery number bounces around, but it’s sort of been in the same zone for a while. It sounds like you’re saying that’s firming up or at least you’re seeing a higher contribution from the MAX? And like you said, they’re pointing to the fourth line. And is it the correct read that, that is stabilizing and now evaluating going higher sooner than later? Or is that too ambitious and there’s still a lot to clean up?
Dan Crowley: I think their delivery rate over the last four quarters supports it. In their first quarter, they delivered 95 aircraft total, and their MAX deliveries were in the 27 to 35, then they went up to 43 by June, and then they ended the year with 53 MAXs in December. So there’s real quantifiable increases in output out of Boeing and their total delivery in December was 69, 53 were MAXs. So it’s definitely happening. We’ve got people there in their plant, observing production, we supply a lot of hardware on the MAX. It is an important program for us. And as the rate comes back, it’s benefiting not only interiors but a number of our actuation plants. So we are aligned with them. And as we continue to diversify our customer base, I mentioned all the Airbus content, we had some press releases in the quarter about new wins with Airbus. But the MAXs is going to be a tailwind for us as well. Jim, anything to add?
Jim McCabe: Some of the plants had some inventory there that Boeing was burning through. So that’s why we may be ramping, kind of, trailing their ramp and we’re still going up. Some of our places are near just in time and some are not. So I think that’s the difference there is that we’re ramping at inventory.
Noah Poponak: Okay. Last one, you just referred to some new wins you announced. Your — the investor presentation with the earnings now every quarter in a row for a while has a slide or two on strategic initiatives and new wins and — this quarter, you described some clean sheet new products, and we see a lot of announcements. Is there any way to quantify that? The organic revenue growth has started to pick up. Obviously, the end market is picking up. But I mean, how many new products are you adding as a percentage of the existing portfolio? Or how much outgrowth do you see? Or any other way you could frame that, because it seems pretty encouraging. I mean, you’re pointing to multiple new things there.
Dan Crowley: Yes. First of all, I’ll take that challenge to quantify the contribution of our new wins on a — maybe a product-by-product basis for our Investor Day that’s coming up. But in my script, I talked about how we set a goal of 25% of revenue coming from new customers and suppliers, and we’re exceeding that. The new wins are on the order of 40%-plus of the volume. And our goal is to be throughout the product life cycle. So on early development programs, I think sixth-gen fighter on new current development programs, B-21, we can’t talk about specific content, but we are on that platform. And then we want to be on low-rate programs that are transitioning in production like CH-53. And then we want to be on mature programs like the F-35 and the C5, C-130.
C-130 was plused up in the President’s budget, the V-22, they got plused up five aircraft as well. The Apache got plused up. There’s a budget for 35 aircraft. So if you have — and then we want to be at the very end, which is the tail end, the sustainment phase of mature aircraft, today, V-22 as an example, these are good problems for us in the aftermarket. If you get gaps in any part of that arc from early development through sustainment, you get these swings in your mix and then your financials. And Triumph had that problem five years ago. They had a lot of late life production programs like 747, G-650, C-17, and that was good while it lasted, but a big gap opened up in the pipeline. And now we’ve achieved, I think, a stability across those.
So let us take the action to give you specifics on how they’re contributing. But the real leading indicators, whether it’s backlog growth or book-to-bill are very favorable, and they have been month-over-month. We look at our — each of our operating companies vision controls, gears, actuators, aftermarket. And they all have book-to-bill greater than 1.0. So it’s a consistent level of growth across all of our operating units.
Noah Poponak: Okay. Thanks very much.
Dan Crowley: Thanks, Noah.
Operator: This concludes our question-and-answer session and Triumph Group’s Third Quarter Fiscal Year 2023 Earnings Conference Call. This call will have a replay that will be available today at 11:30 a.m. Eastern Standard Time through February 8 at 11:59 p.m. Eastern Standard Time. You can access the replay by dialing 1 (877) 344-7529. Again, that’s 1 (877) 344-7529 and entering access code 2140903, again it’s 2140903. Thank you for attending today’s presentation. You may now disconnect.
