Good morning. My name is Joelle, and I will be your conference operator today. At this time, I would like to welcome everyone to Héroux-Devtek's Fiscal 2024 fourth quarter and fiscal year results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, then the number 1 on your telephone keypad. If you would like to withdraw your question, please press star two. Before turning the meeting over to management, please be advised that this conference call will contain statements that are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. We refer you to slide 2 of the accompanying presentation available on the company's website for the complete forward-looking statement. I would like to remind everyone that this conference call is being recorded today, Wednesday, May 22, 2024, at 8:30 A.M. Eastern Time. I will now turn the conference over to Mr. Martin Brassard, President and Chief Executive Officer, and to Mr. Stéphane Arsenault, Vice President and Chief Financial Officer of Héroux-Devtek. Mr. Brassard, please go ahead, sir. Thank you very much, Joelle, and good morning, everyone. Bonjour à tous. On behalf of all of us here in Longueuil, welcome to our fourth quarter and fiscal 2024 earnings conference call. As usual, I invite you to follow along by referring to the financial statements, MD&A, press release, and presentation, which can be found in the Investors section of our website. We're pleased this morning to announce a very strong quarter of sales and profitability for Héroux-Devtek. Our fourth quarter of fiscal 2024 marks the fourth consecutive quarter of growth in both revenue and profitability, a sign that our focus on stabilizing our production system is paying off. The increase in volume, along with the effect of our pricing initiatives in response to inflationary pressure, drove our Q4 EBITDA margin to 18%, marking a significant 540 basis point improvement over Q4 last year. These improvements clearly demonstrate the success of the strategy we've implemented over the past 2 years, restoring the health of our supply chain, stabilizing our production system, examining our production processes to identify efficiency gains, and reviewing our pricing and supply agreements to offset the effect of inflation. Beyond this, the broader aerospace and macroeconomic environment suggests more good news to come. But first, I would like to turn it to Stéphane for a review of our fourth quarter financial performance in more details. Thank you, Martin, and good morning, everyone. As usual, please be aware that we will be referring to certain non-IFRS measures during the call, including Adjusted EBITDA, adjusted net income, and Adjusted EPS. All non-IFRS measures are defined and reconciled in the MD&A issued earlier today. Before I begin, I would like to take a moment to congratulate our teams for their hard work on resetting the business over the past year. The results we are presenting are a clear measure of their success. In Q4, sales for the quarter rose 18% year-over-year to a record CAD 184.1 million, compared to CAD 156 million last year. Civil sales rose 55% to CAD 75.8 million from CAD 48.9 million for the corresponding period last year, mainly driven by increased deliveries for the Boeing 777, Embraer Praetor, and E2 program, while defense sales rose 1.1% to CAD 108.2 million from CAD 107.1 million. For the full year, sales stood at CAD 629.8 million, a 15.8% increase over fiscal 2023, exceeding pre-pandemic levels. Civil sales were up 42.6% to CAD 243.4 million for the same reason as the fourth quarter, while defense sales were up 3.6% to CAD 386.4 million, mainly due to higher aftermarket business for legacy program, as well as higher delivery for the Sikorsky CH-53K and Lockheed Martin F-35 programs. These positive elements were partly offset by lower demand for Boeing F-18 production. For the quarter, gross profit reached CAD 39.4 million, or 21.4% of sales, compared to CAD 22.7 million, or 14.6% of sales last year, reflecting the impact of higher volume and pricing initiatives, partly offset by the effect of inflation on costs. As for fiscal 2024, gross profit was up CAD 111.1 million, compared to CAD 73.5 million last year, or 17.6% and 13.5% of sales, respectively, for the same reasons. Operating income for the quarter rose to CAD 27.6 million, compared to CAD 9.9 million at this time last year, and to CAD 59.8 million, up from CAD 26.2 million for the fiscal year. In both cases, the stronger performance was due to higher throughput and profitability, while also reflecting a CAD 4 million provision reversal related to a previous business acquisition, which the indemnification period has expired. Adjusted EBITDA in Q4 totaled CAD 33.1 million, up 68.8% from CAD 19.6 million in Q4 of 2023. For the year, Adjusted EBITDA was CAD 92.2 million versus CAD 61.4 million in fiscal 2023, a 50% year-over-year improvement. Adjusted net income in the quarter stood at CAD 16.7 million, or CAD 0.49 per share, compared to CAD 6.3 million, or CAD 0.18 per share in the same quarter last year. For the full year, adjusted net income was CAD 34.3 million or CAD 1.01 per share, compared to CAD 12.6 million or CAD 0.37 per share in fiscal 2023. Cash flow related to operating activity improved substantially in Q4, reaching CAD 19.7 million versus CAD 4.5 million last year, mainly reflecting the improved financial performance. As a result, at the end of Q4, our net debt to EBITDA ratio improved to 2.3 times from 2.7 times at the same time last year and 2.8 times last quarter. Back to you, Martin. Well, thank you, Stéphane. I am very proud of our teams who have worked relentlessly this year. Their ability to deliver our throughput commitments in a still challenging production environment is remarkable. Thanks to their support and dedication, we were able to deliver excellence to our clients. Thanks to our customer for their continued support and confidence. And finally, to our supplier, many thanks for helping us maneuvering in this challenging production environment. These results represent a sustainable trend of performance, surpassing our historical levels, supported by lasting improvements and a record backlog of CAD 951 million. The aerospace industry outlook remains very strong. Global passenger traffic is back to pre-pandemic levels, and IATA is forecasting continued growth. On the defense side, geopolitical tension have added urgency to the defense industry's effort to maintain, develop, and launch new aircraft programs, and we are very active on a number of defense platforms. The high demand we are seeing from prime contractors worldwide attest to the trust and recognition our customers have in the quality, safety, and excellence of our products. This recognition is further echoed in Boeing's $35 million commitment to partnering with us on the development of advanced landing gear technologies via the new Aerospace Innovation Zone in Longueuil. Joelle, we are now ready to answer questions. Thank you. If you would like to ask a question, simply press star, then the one on your telephone keypad. If you would like to withdraw your question, please press star two. Again, if you have a question, please press star, then the one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. Your first question comes from Kunal Gupta with Scotiabank. Your line is now open. Thanks, operator. Good morning, everyone. Good morning. Good morning. Morning, great results there, absolutely. If I can, you know, like, dig into the margin performance, which was pretty strong, and I don't think we have seen something like that in a long time on, on a normalized basis. You know, the volumes were great. Pricing, you said, obviously, it's offsetting inflation. It's now finally catching up. Probably that supports, the margin expansion, and there's some operating leverage as well, maybe, right? And then you probably obviously restructured the business, over the pandemic, to, to support higher margins, in the future. Do you think the 18% margin is a more sort of normalized reflection of your business today? You know, like, in fourth quarter, obviously, it's, it's a, it's a stronger quarter normally. But is 18% reflection on what your business is capable of today, or was there something one-off in the quarter that drove that or helped that or was there something that, that pushed the margin down? You know, like, could you have done more than 18%? You wanna go? Well, you said, you know, you said a lot of things, Kunal. So, essentially, we were asked the same question in Q3, right? Is this a one-off? I think the team is delivering right on the order we have. ... so, what you said, operating leverage, right? All the initiative we took in the past 18 months or 2 years, right, is paying off. I think you highlighted what was done during pre-pandemic as well. So, addressing, right, the cost structure during that period of time, I think everything, when you sum it up, we are in very good position, right? And we are delivering on those results. Just to add there, you know, Stéphane, every business unit contribute to the bottom line, so when everybody, you know, deliver on their plan, that's, that's what's happening. Great. No, that's great. Thanks. Now in terms of the growth profile, civil is still doing pretty well. Obviously, it is coming off a low base, as a 777, it's rebounding, and you have the Embraer platforms are also performing well. You know, when you look at the backlog in—I know you pointed out in your prepared remarks about, you know, the geopolitical tensions and all that, plus even maybe, you know, some of the aftermarket pricing is getting a lot of traction these days. Volumes are going up as well because of all the supply chain issues. I'm wondering if the backlog, which went up by 10%, was it all driven by defense, or would there be any contribution from civil? And I'm asking this because, you know, we are seeing obviously a lot of issues in the commercial aviation supply chain, including Boeing, of course. So can you help us split out what the backlog drivers were this quarter? Thank you. Well, the backlog increased in both segments, you know, Kunal. So we're very fortunate to be present in all of the segments of the aerospace, mainly civil and defense, and in all the sub-segments, as you know, we're present in everything. So we see demand in the backlog. It's always important to remind that this is only firm POs. It's not the committed order, so there's a time also, a time zone, because if we had to include all the contract that we signed, you know, over and above the PO, we would be well above the CAD 1 billion mark. So we saw, you know, so like I said in my remarks, you know, we see strong demand in both segments, you know, and the platform, the driving platform in the civils are 777, Praetor, the Falcon 6X will go up in revenue, right? E2 is also, you know, the E2 jets. And in the, in the main defense platform, we see growth in the CH-53K, we see growth in the, in the CH-47, we see growth in the, in many defense platforms. And also, you know, the F-18 program, you know, will phase out, as you know, production, but we're entering in the phase, you know, that we had strategically thought, you know, back when we won that contract, in the aftermarket revenue and in the MRO revenue. So, so we're well positioned to continue our, our trend. That's great. If I can follow up on that aftermarket comment before I turn it over. Have you seen any substantial or significant, you know, interest from customers in aftermarket? And I know you are more aftermarket in defense as compared to civil, but given the supply chain mess up right now, we are seeing globally, are you seeing a lot of demand for aftermarket products, and did you see that in the quarter as well? Not in our actual results yet, but we see that there's gonna be some opportunity there, right? Especially in the defense, right? You know, that we too got to produce or to manufacture landing gear for all the USAF platforms, so that could be a good opportunity for us. But also, you know, it's active. But the growth is go at the same rhythm as the OE business for us. That's great. Thanks. Congrats again. Thank you. Thank you, Kunal. Your next question comes from Benoit Poirier with Desjardins. Your line is now open. Hey, good morning, Martin, good morning, Stéphane, and congrats for the very strong finish. Thank you, Benoit. Good morning. Yeah. Just in terms of organic growth, obviously very strong organic growth, especially on the civil side, with 55% of fees in the quarter. Could you maybe provide more granularity about the contribution from pricing actions taken? Well, we have- Yes. I'm sorry to interrupt. Yeah. We have very, very difficulty to, to hear you. Oh, oh, sorry. The line is bad. I'm sorry. Okay. Sorry, guys, let me see here. Okay, it should be better now. Just in terms of- Oh, yeah. Better. Yeah, yeah, okay. Just in terms of the organic growth, you achieved 55% for civil in the quarter, so very strong performance. Could you maybe talk about the impact from pricing action taken, and should we expect further pricing benefits going through fiscal year 2025? Well, essentially, we have growth in the platform we listed, right, in our DNA. So this is a continuous initiative, right? You cannot, in our business, you know, have a repricing or adjusting, adjusted pricing in the same fiscal year. So this will be over a couple of fiscal year that we will see, you know, the pricing effect from contract expiring and also the full benefit from the one implemented this fiscal year. So this is where we stand, but the demand is strong, right? As Martin said earlier, the order book or the backlog, we see growth in both the civil and defense. And it's a combination. Margin improvement, it's a combination of several factors, Benoit. Okay, that's great. Earlier this week, we saw a nice announcement with Boeing. They are going to invest here in Quebec, but also in Longueuil, and Héroux-Devtek will benefit as well. Could you talk about the positive implication, and what is your expectation in terms of the benefits with Boeing going forward? Well, it's always a good news and good opportunity for us, you know, to have leaders such as the largest OEM in the world to come here and express their desire to work with us in developing new landing gear technologies. So it could be technology breakthrough, it could be new platforms, it could be everything. So it's always, you know, refreshing, and it's always good opportunities when we have leaders in the aerospace industry that clearly express their desire to work with us. So we'll see where the future is gonna lead us, Benoit, but we're enjoying strong relationship with many customers, and Boeing is one of them. Okay. And in terms of free cash flow, very good performance. Looking at your leverage, it went down. You haven't been active in terms of buyback in the quarter. Was there any reason why? And given your leverage ratio significantly improve, is M&A now back on the table? So you see, Benoit, you said it, you know, free cash flow was a, a good free cash flow quarter. We need some stabilization and generation of free cash flow before going as aggressive that we have been in the past for, the, the NCIB. So, so we just want to be prudent, you know, because it's still a challenging environment. And you know that our strategy is paying off, but, but let us, you know, deleverage a little bit, and then we're gonna-- we'll, we'll be back. Okay, thank you very much, and congrats again. Thank you. Your next question comes from Cameron Doerksen with National Bank Financial. Your line is now open. Yeah, thanks. Good, good morning. Good morning. Good morning. So I wanted to ask you about the bidding activity. I mean, you cited you know very active, especially on the defense side. You know, obviously, you're not gonna go into specific things that you're bidding on here, but just wondering if there's if there's business out there that you're bidding on now that would contribute to revenue growth over the next couple of years, or is it more things that you're looking at that are kind of longer term programs? Just any color there would be helpful. It's both. It's both, you know, depending on the system we're working on, it's both. But we're also working on that actively on long-term platform. So you know what's happening in the US, you know what's happening in Europe, you know what's happening in South Korea. So, of course, you know, there's not many landing gear people, you know, electromechanical actuation and actuation and defense, specialized defense product. We have all that in our portfolio. So yes, all the business units are very active in defense programs right now. Okay. And just wonder if you can provide some, I guess, some sort of estimate around what you think the CapEx will be in fiscal 2025. And just thinking kind of longer term, I mean, you've had a, you know, significant rebound here in the, the revenue, you know, above the pre-pandemic levels. How much more can you grow without having to, I guess, invest more in, in plant and equipment? I mean, I guess, the question is, where, where are you as far as capacity utilization? It's always a difficult question to answer, but we do our forecast, you know, over five years. But the things, like I explained it in, in the past calls, you know, we're trying hard, you know, the automation, reducing the machining hours is reducing the need of the CapEx. So we've started that initiatives two years ago, and again, you know, that we always told you that, you know, it's between 4%-5% of sales, you know, that you should, you should really consider, and we continue like that, so. Okay. All right, I'll pass the line. Thanks very much. Stéphane can finish maybe- Cameron, right, we had mentioned in the previous quarter that pre-pandemic, right, we were growing at that time, and we had guidance in place at that time, anywhere between 650 and 680. This is where we were growing at that time. But these were with 2020 pricing, right? So, inflation has come, and obviously contracts are reflecting more and more the new pricing. So, we have capacity ahead of us to continue to grow. And CapEx-wise, it's the same answer we're giving typically, right? It's around the 5% mark. So, in terms of CapEx that we're spending annually, typically. ... So, that's that will continue to be our plan. Okay. No, that's helpful. Thanks very much. Thank you, Cameron. Your next question comes from Tim James with TD Cowen. Your line is now open. Thank you. Good morning, and great, great quarter. Just wondering, Stéphane, could you comment on, or provide any thoughts around sort of remaining working capital investments that are required for the balance of the year? How should we think about the need for cash to go into working capital for the balance for fiscal 2025 at this point? Yeah, sure. So, as you have seen, we are on a growth mode, right? Everything is pointing out in that direction. The order book, which is 40% higher than two years ago. We have inventory to support a growth, especially our work in process position. We're very well positioned to start the year of fiscal 2025. So as this year is completing, I think we'll see more stabilization of our inventory over the year. So, I think we pointed out at the time, 18 months. I think it's gonna be around that period in the next fiscal year. I think things will be stabilized in fiscal 2025. Essentially, the investment, as you see that we've done in inventory, is in support of the growth we are entertaining in our business. Okay. Thank you. When you look at the opportunities, the bidding that you're doing, the opportunities that you see ahead, whether it's over the next couple of years or the very, very long-term opportunities, are those—can those be achieved? If you have success on those, can those be achieved and delivered while keeping CapEx in that kind of 5% ± range? Or could there be opportunities where you have a CapEx commitment that more closely resembles going back to the, say, the 777 investment that you made many years ago? I realize that was a bit unique and one-off. Could you just talk about what CapEx might be required if you are successful in winning some significant work packages? Yes. So to give you the perspective, Tim, is we, we, you know, we've been introducing many platforms over the years, you know. If you, if you look at where we were in 2008, you know, and where we are today, you know, if you exclude the 777, you know, these CapEx, you know, it's easy to get in a program where you're at the beginning of a program. So your CapEx profile, you know, will go with... will better match with the revenue. When you have -- obviously, when you have a 777, right, and you're at zero, and you need to produce capacity to get to 100 ships a year, I haven't seen many landing gear companies doing that in the industry. So those are, you know, big challenges, and we demonstrate that we could do it. So, so if we don't have, you know, things like that, the 777, CapEx profile, you know, normally follows the revenue generation in a more steadier flow than what we had when we, we did the 777. So we have many, many platforms in that, we have embedded growth because of these reasons that Martin explained, right? It's, it's, investment we've done in the past, in the past years, that production rates, right, are increasing. The 53K is an example, right? The investment we've done in, in our program, either Praetor, 6X, 10X, right? These are all program that will have, increased rate or entry in service in the next couple of years. The KFX is also another example. In 2025. Yeah, in 2025. And then we can go on and on and on. Yeah. To your question, I mean, those platform, right, will enter into service or grow in rate in the next couple of years, which will accelerate our growth. Yeah. I'm thinking, you know, primarily, as, as you've addressed, Martin, sort of future opportunities that you might win as opposed to those new ones that you've got that are ramping up. And just if there's any way any of them could sort of require, you know, CapEx measured in the, you know, tens of millions CAD? Another 777. For a particular win, another 777. Another 777. Yeah. It's, again, it's the when you're entering in a new program, so your customer going from one to five to 10 ship sets up to and it takes, you know, four or five years to get the rate, right? So you're developing this platform over, and then you build up your capacity slowly, gradually, and you don't even see it, right, in the numbers. But if you have a big one where you're at zero, and you need to meet rate within a specific period of time, let's say 2, 3, 4, 5 years, this is really where, you know, depending of the rate, that will generate the CapEx above the 5% threshold. Yeah. When you reflect back on 777 and the CapEx that was required for that, would you do anything differently? I mean, you know, my view is you just got caught - the market took an unexpected turn shortly after that investment. But you know, and it's tough to fault you for that. But with the 777 experience and the timing of the CapEx or the amount or the sort of terms of it, would you do anything different or if, again, in the future, if something similar were to come along? But also, always, you know, with experience, we can always improve. But to get that contract put us on the map, right? Yeah. It propelled us to, you know, a leader in our field. So, you know, financially, like you said, you know, 777, you know, we built up capacity for 100 ship sets, and now we went as low as 2 ship sets a year, right? But of course, we would have done something differently, you know. We're less naive than we were in 2013, right? Obviously. So I will not share that on you, with you on the line. But of course, we have experience now, and that makes us better, and we grew through this experience. So... And again, like I said, I want my shareholder to understand that is not many team would have done what we've done. Yeah. Okay, that's- I'm very proud of the team. Just... Yeah. If I could just squeeze one more in, just turning back to this quarter, specifically the fourth quarter. Was there anything that surprised you internally, you know, positively in the quarter, that or was this really all kind of running according to plan? Of course, it all, you know, because we always maneuvering. We're a decentralized environment, right? There's always hiccups that we need to watch out, but this one, you know, all the stars align properly. So yes, we were surprised, you know, about these things, but our plan supported that. So it seems that the strategy and all the strategy working with the suppliers, you know, inventory, specifically stabilizing the production system, et cetera, et cetera, drove those results. But I'm not saying that we ain't gonna have bumps in the road yet, you know? Yeah. We always need to be cautious because it's still a, it's still a difficult environment, you know? It's still production, you know. The orders are there, but it's a challenging and the... And that's why I thank the customers, the suppliers, and the employees, you know, because it's really a team effort to overcome all of these challenges. Our business unit performed to the plan, Tim. So, Okay. It's best at the end, the level of contingency, right? By managing the environment, right, it looks like things are stabilizing a bit, but inventory investment that we did is paying off as well. Super. Okay, thank you very much. Have a good day, Tim. Ladies and gentlemen, as a reminder, should you have a question, please press star one. There are no further questions at this time. I will now turn the call back to management for closing remarks. Yes, thank you, Joelle, and I could not excuse myself, you know, by before closing the call, to not thank our shareholder for their continued trust and confidence in our company, in our team, and in our business. So thanks again for your interest, level of interest and continued support in us. Thank you and have a good day. Thank you, ladies and gentlemen. This concludes today's conference call. You may now disconnect.