Okay. We're rounding into the home stretch here, with Albany International and CFO Stephen Nolan. Stephen, thank you very much for joining us. Thank you. You guys don't have anything prepared, but what I always like to start out with, kind of the state of the union in the near term. Seems like there's a lot going on here, globally. Maybe just the Russia scenario in context for you guys. How may this influence your business? What are you guys seeing on the ground? Any kind of impact for you guys that you've been seeing? Sure. No, I appreciate the question. Look, from a direct business perspective, it's rather limited. We do have some Machine Clothing business in both Russia and Ukraine. Company revenue, though, per year in the $10 billion range, let's say. That's the direct impact. We also have a very small joint venture in Russia, actually, Neva Clothing, where, you know, the net income we take from that joint venture per year is, you know, $100,000. It really immaterial. We're looking at the right way to extricate ourselves from that right now. We're just looking to see what our options are for that business. From a direct impact perspective, quite limited. We're more concerned about the secondary effects. In you know, obviously inflation you know, could impact us along with everyone else that's driven by increased energy prices. We're also concerned about raw materials that our customers use less so than us. You know, the raw materials we typically use are fairly, you know, widely available, you know, carbon fibers or monofilament fibers in Machine Clothing side. But what we're concerned about is supply of materials such as titanium that are used broadly in the aerospace industry. Could there be shortages of those which might affect our customers' ability to hit their production targets? So far, we have not you know, seen anything concrete. Certainly, Boeing and Safran both have said they have significant you know, inventories of titanium on hand and don't expect disruptions. But it's something to watch out for. It's the secondary effects we're more concerned about than any primary effects. Right. Safran has been kind of called out that they have a decent amount of buy from there. I know GE has said, you know, less than 1% of their titanium supply is from Russia and they have some on hand. So maybe on the supply chain, you know, everybody buys different components. How are things going for you guys as far as availability of purchase components, raw materials, things of that nature? So- In both businesses. Not a week goes by without some supply chain challenge somewhere in the company. Certainly our supply chain team has earned their pay the last 12 months as we've dealt with one issue after another. With that team's efforts, though, none of them has had any significant impact on us. Frequently, we might have a delivery of resin to a facility that might be two weeks late or something like this. We see that repeatedly, but we've been able to rejigger our manufacturing plans to accommodate that. We haven't seen any actual disruption. Probably the biggest disruption has been more on the logistics side with our ability to ship product to our customers. We are fortunate in that we ship very little of our products, you know, from, you know, certainly across any oceans. Very little from Asia to North America or vice versa. We do some back and forth between China and Europe, and that has been challenging at times on availability of shipping. Train lines which run across Russia, largely now unavailable where they would have been a route. That's a deeper challenge. But again, nothing we haven't been able to overcome. Certainly both raw materials and the logistics, we've seen inflation, as we have, you know, found what we need. But it's been a challenging year but again, we've overcome all the challenges we've seen so far. You know, we certainly were starting to see things like logistics improve. If you'd asked me, you know, four weeks ago, I would have said, "Things are great." You know, getting back to normal. Shipping is available. Trains are available. Obviously that's changed in the last four weeks with, you know, the invasion of Ukraine, the tragedy that's unfolding there and, you know, the knock-on effects. So far, we haven't seen anything that is not manageable. It's interesting. You were thinking things, you know, were actually getting better. It's not, you know, just stable. It was actually headed in the right direction. From a logistics perspective. Logistics. Okay. We're certainly getting better. Got it. Inflation, you know. I'm no economist. I'll trust someone else to tell us when inflation is going to end. We've certainly seen an easing of the logistics challenges we've seen. Got it. With respect to raw material inflation, you know, I just heard one of our suppliers the other day looking for a 14% increase in the price of raw material. Obviously small, so not material. But we are still seeing those inflation pressures even prior to the invasion crisis. How does that play through to your customers, especially on the aerospace side? First of all, are you on track for what you had planned when it comes to the margin dynamics around price costs, first of all, given what we've seen in the last couple of months? Secondly, just talk about how those contracts, you know, work and how able you are to pass on whatever price increases you're seeing from your suppliers. For the bulk of our aerospace programs, the core raw materials that go into finished products, which is typically a carbon fiber and a resin, sometimes a prepreg which combines the two together, those are selected by our customer. The customer negotiates a contract with the supplier of that raw material. It's an enablement contract where we're buying under the pricing that our customer has negotiated. We're typically insulated from increases in those materials to the extent it does increase, we usually pass those along. Okay. We are not insulated from increasing prices on a lot of what we call non-end-item raw materials. These are everything from vacuum bags to gloves to release agents that go into making a product that aren't in the finished product. Right. Those, you know, we have to find some way to cover if those increases, you know, through continuous improvement or through some pricing, you know, change if there's an opportunity to reopen it at some point. And also on most of our contracts, labor escalation is something that we have to cover. Now, our contract with Safran for the LEAP engine is a little different since it's a cost-plus contract, where Safran covers all of our costs- plus a fee. And so there on, you know, perversely, you know, labor inflation actually increases our revenue from Safran, since they're going to cover all of that. That's a, you know, a minority of our aerospace revenue at this stage. Right. How do they manage that then? Because I mean, I'm not quite sure that's necessarily the way it works with the airlines. How do they manage that if that's the case? Yeah, look, we sit down with Safran every year. They are a 10% owner of the joint venture. Yeah. We do have, you know, they've obviously got access to all our books. Right. We sit down at the start of every year and work out an operating plan that we can both agree on as to. Right. You know, what types of costs we're going to incur. It's not as if we just start, you know, sending willy-nilly to drive up our cost base and therefore our revenue base. Not only would Safran object in the short term. In the long term, that's no way to build an aerospace business. Right. Because your customers have to believe you're going to do what's in their best interest, not take advantage of them every chance you get. Of course. I mean, at some stage in the game you're dealing with, you know, in a tough competitive environment, somebody's end of the chain, probably not the airline, maybe the airline, I don't know. It's kinda or certainly not Boeing and Airbus. Certainly. Over the last two years, I'm sure it has been challenging for Safran in that, you know, the price they were paying for our fan case blades we make for the LEAP engine. They paid a certain price per, you know, ship set of components. Yep. In 2019. In 2020 and 2021, they paid a far higher price. Right. Because they were buying fewer units, and each unit had to absorb more of the fixed cost of operating those plants since they cover all of the costs of operating that enterprise irrespective of how many they procure. So I'm sure it was challenging for them. You know, fortunately for us, it was Safran's challenge. You know, we did what we could. Right. From a cost reduction perspective. We've been very aggressive working with Safran to get their approval on initiatives we could undertake to reduce the variable cost of making parts, even if we can't adjust the fixed costs in the short term. Right. Sticking with AEC, can we think about the revenue for you guys there in line with, you know, the unit growth? I mean, obviously, the LEAP continued up, you know, 60% this year, a lot. How do we think about that in terms of, you know, your related revenue there? You know, in a per ship set value. Yeah. The challenge with just looking at units, you know, if you look at two of our largest programs, LEAP and CH-53K. On LEAP, because of what I just said, where we absorb, we recover the fixed cost irrespective of volume, revenue does not grow linearly with units because the only additional revenue we get from those incremental units is the variable cost of making those units plus a fee on top of that variable cost. Yeah. Just like you saw when we went down, you know, the amount of engines LEAP was producing or the GE Safran joint venture was producing in 2020 was down considerably, probably by 2/3 or more in 2020 compared to 2019. Yep. Yet our revenue only went down by 0.5. The same, you know, so while we're insulated in the downside, we also get a muted recovery in the upside, as you know, for a, you know, 60% increase in units if that's what holds. You know, we've clearly seen revenue growth could be appreciably lower than 60%. Right. The other program mentioned, CH-53K, is in low-rate initial production, where we're making only a handful of units a year, and those are quite expensive units because we're all getting down the learning curve together on that program. Okay. You know, right? As we're you know negotiating each follow-on contract for the next buy, the next LRIP buy of those products, it's at a lower price than the prior LRIP as we're moving down the learning curve. It doesn't quite scale linearly. On a mature program like the [35-77], it absolutely just scales with volume. But those two, the CH-53K and LEAP, given their sort of significant chunk of our revenue, they distort that model where you can just easily take the growth in units and you know interpret what the revenue growth is. When you look at the 2023 revenue that you guys can attribute back to the 2019 peak, I mean, how much is that kind of aviation, like for like unit recovery in LEAP, for example, and then these kind of other, maybe the other new business, that you may be getting. I mean, it's pretty much baked, I would assume from your visibility. Nothing's ever baked when it's 18 months out. You clearly have good line of sight, or I wouldn't have said it on the earnings call. There's always risk to anything when you go out and start projecting 2023 revenue, when you haven't even barely started 2022. If you look at programs, 787 was more than $50 million of revenue in 2019 when we're, you know, at our prior peak. We said that last year and this year it's gonna sub $10 billion dollar range. There might be some growth next year, but it's certainly not making anywhere close to $50 billion next year. Severaly, LEAP will have improved from this low level next year. They're not gonna be producing whatever it was, 2,200 engines they produced in 2019. It'll be appreciably lower. We're tens of millions of revenue short on those programs relative to 2019. The reason we're gonna get back to the same level we're at in 2019 is because of new wins, such as CH-53K, where we announced winning the aft transition program in conjunction with our most recent earnings call, where we were doing a lot of work on CH-53K already. But one of our competitors was doing the aft transition portion of the fuselage, and that's the portion that narrows from the main body of the fuselage to the tail. We were successful in taking that away from our competitor. That's a program, you know, over $300 billion in size over the next 10 years. Programs like that are what are allowing us to get back to that 450-ish level next year, even though the commercial programs will be appreciably smaller. What are some of the new ones? First of all, how do you win, you know, on that front? What were some of the key attributes that they preferred over your competitor? Are there other opportunities in the pipeline in the near term that are visible to you that can add to a win like that? Yeah. A program like that, you know, we've seen this now on three sets, on three areas. It's on Boeing 787, going back a couple years ago on F-35 and now CH-53K. On all of those programs we were awarded a certain amount of content, and we performed very well on that content. With on-time deliveries, with high-quality finished product. Making composite parts, it's not like just machining a piece of metal. Where you machine a piece of metal, you know what's left behind. It's very predictable. There's a real, you know, art and science to making composite parts. You know, there's been, you know, at certain points in time, spotty performance by certain players in terms of meeting delivery requirements and meeting certain quality requirements for parts. We have demonstrated to our customers on F-35 to Lockheed, on 787 to Boeing, on CH-53K to Sikorsky, a very high level of performance. In all three cases, they have given us opportunities then to win additional content in the same platform. They said, "You're doing a great job," for example, on 787, we're doing the frames for certain sections of the aircraft. They said, "Your your competitor who's doing this section, you know, we'd rather you do it than them." And we had the opportunity to take that. Similarly, in F-35, where we've stepped up our content and now most recently on CH-53K. It's really, it's really performance on the existing work that has allowed us to do it with our customers. We have... It's kind of like land and expand, if you will. Absolutely. Yes. Got it. We have a pipeline of new business that we're working on. It's nothing we can obviously discuss. In the near term, it's a mix of some defense programs and some smaller takeaways of additional content on certain other aircraft from certain of our competitors. That's the bulk of our near term pipeline. Obviously, long term, there are some huge opportunities, you know, when we get to the next generation of, you know, single aisle airline. Yeah. That's, you know, probably at the end of this decade. Starting somewhere in the back half of this decade is when you'd start maybe being selected for those sort of programs, and would be, you know, some time early in the next decade when you'll start getting any revenue. How do you play into that? For example, you know, the RISE concept. Is that a net positive content thing for you, do you think? Or, you know, too early to tell? How do you look at these new architectures and what you can do for them? Yeah. The RISE concept is Safran and GE, our joint venture, CFM, makes most of the engines that power the current generation of single aisle aircraft. Every 737 MAX has a LEAP-1B engine on it from that joint venture. Roughly 60% of all A320neos have a LEAP-1A on it from that joint venture. RISE is our concept for the engine which will power the next generation of airliners. It's a very different architecture. If you've ever seen, you know, just an engine, what you see is the fan case around the blades, and that fan case, one of its jobs is to contain the blades if there's any catastrophic failure of blades, so that the blades doesn't damage other parts of the aircraft. The RISE engine is actually what's called an open rotor design. There is no fan case. There's a set of blades and behind it, another set of blades and enormously long blades. You know, first thing you notice is right now in the current LEAP engines, we make the fan case and the blades, but there is no fan case, so- Right. The usual question is that net positive? For us, assuming, you know, all goes as planned, and we extended our agreement with Safran to 2046, and, you know, are certainly in talks and discussions around RISE and how it will work. Those two sets of blades, given their size, given the two sets, are certainly more valuable than the fan case and blades of the current engine. Right. They are technically a net positive. More broadly, as we look at the next generation of single aisle airliners, we're not restricted to talking about engines. Right now we're on the engine. The reason we're on the engine is because there hasn't been an aircraft designed in the last 10-15 years. Right. You know, the last aircraft design was A350, which was kind of 15 years ago. At that stage, we really didn't have 3D weaving mature to the level it is today. And the 737 and the A320 platforms that are flying, it's effectively the same fuselage that was flying 30 years ago, just with new engine hanging off the wings. We've gone where the opportunity was. As we look at the next generation of aircraft, we would expect to compete more broadly on the platform. Right. Right. Now we're working with Airbus on a program called Wing of Tomorrow. We're demonstrating the applicability of 3D weaving to wing components in that, in their new aircraft architecture. We could also compete in other parts of the aircraft using traditional laminated composites, not 3D weaving, where that is appropriate. For us, given, you know, how small and recently developed our aerospace business is, new platforms are just an enormous opportunity. Right. We, you know, look forward to, you know, those new airliners. There's always the talk about whether Boeing will introduce something else in the meantime. There, you know, 797 concept, this new mid-size aircraft which will kind of replace the old 757. Anything like that is only an opportunity for us because we're not on the current platforms other than on the LEAP engine. Have you proven that content out on maybe smaller platforms or, I mean, is it really like you can't really go into business yet with this stuff because the smaller guys typically follow the leading edge of the commercial guys when it comes to technology like that. You know, if you're gonna do something as aggressive as putting it, you know, on a wing, Boeing and Airbus probably have to piece that out for those guys. Like is there a way to spin out the technology first on something that's, you know, less exotic? If you're talking three- Yeah, 'cause that sounds like a tremendous, obviously opportunity for you guys. If you're talking 3D weaving, this is not unlike the situation we were in 20 years ago with Safran. We had developed this 3D weaving technology, which has actually grown out of our knowledge of weaving from our Machine Clothing business, which is why we have this weird combination of, you know, pulp and paper products business associated with an aerospace business. We'd come up with this concept that neither we nor Safran knew how it would actually perform in an aerospace application. What we went through a process of for several years is Safran would ask us to build a part looking like this. We would make the part. They would take it to the lab, and they would stress it, and ultimately break it. They would see, you know, test its limits, and we'd come back and build this other part, and we'd go through this iterative cycle where they could understand the operating limits of the technology. Yeah. We're going through that right now with Airbus. They're building a demonstration wing which they're gonna load up and test, and it's got a combination of components in it, some of them being ours, some of our competitors using other technologies, but not 3D weaving since we're the only company that does 3D weaving. They look at all of those components and find out, you know, which performs better. It comes down to a performance-price trade-off when they come around to actually designing the wing. Getting the validation from those guys, obviously. Why wouldn't you kind of proliferate this into, you know, smaller parts of the, you know, the. Or do these guys look at it as such a proprietary part of how differentiated they are, so they don't really wanna, like, they don't allow you to go and play with- We'll have to proliferate it anywhere we can. Yeah. Certainly right now, you know, we announced last year, now on the defense side of the house, an agreement with Spirit AeroSystems, who has a significant and growing defense business in addition to their legacy commercial business with Boeing and now Airbus. We announced an agreement with them where we're collaboratively working on hypersonic applications, where we use our 3D weaving and some of Spirit's technologies to offer special materials which meet high temperature, high pressure, and you know, obviously high heat environments that hypersonic vehicles encounter. I, you know, the key thing with machining with 3D weaving is there are certain parts where you get more bang for the buck with 3D weaving than others. For example, if you look at just an aircraft, the wing skin of an aircraft is laminated composites and will probably remain laminated composites forever because it doesn't encounter stresses and strains which makes it challenging to make it out of laminated composites. What 3D weaving offers is the fact that in traditional composites, you get stacked layers of carbon fiber, and the only thing holding those layers together is an epoxy. In 3D weaving, you have those layers of carbon fiber, but you also have strands going up and down throughout the layers, knitting them all together much more closely, mimicking the mechanical properties of metallic structure. That's important in certain environments where it's subject to certain, you know, bending moments or shear forces which can cause traditional composites to delaminate. Right. To actually separate. Certain parts of the aircraft don't encounter those stresses, and they'll stay traditional laminated composites probably forever. There's no reason to use 3D weaving there. Right. 3D weaving plays in areas like the wing, the wing box or the nose or the empennage of the aircraft or the engine, where it encounters these stresses and strains and really offers a significant advantage. Our goal is to proliferate it everywhere, which is, you know, as we look forward. You know, 10 years at 3D weaving. One of our primary competitors is less so other composite manufacturers. It's really some of the metallics manufacturers are more likely our competitors for much of what we drive. Right. Things like ribs and bars and wings right now are not produced by our composite players. They're produced by, you know, the Howmet or Allegheny Technologies of the world, those sort of players. You know, we'll face a variety of different competition at every opportunity. That's, you know, where 3D weaving is targeting. We obviously also have a traditional laminated composites business, and we will happily do that. You know, we're doing the wing skins on the F-35. There's no reason we can't do skins on other aircraft in the future as well. Right. Can you talk about margins on these wins? I mean, how do we think about the, you know, the $450 in 2023, you know, margins on that, given the mix of revenue? It's odd enough I provided company revenue guidance for 2023. I thought about starting to give AEC guidance for 2023 as well. It's not guidance. It's just your thoughts. It's your personal thoughts. Look, there are a couple of effects going on right now. One, you know, very oddly, you would expect there to be a relationship between the proprietary nature of the process and the profit margin, and that the ones that are more proprietary would have a higher profit margin. One would reasonably expect the same for 3D weaving. I think it would generally be true, but for the fact that now you're effectively a cost- plus contract with Safran. Right. Right. when Safran is bearing a lot of not only the market risk, but our cost risk, we accept a lower margin in return. LEAP is lower than average margin for our aerospace business. one of the challenges we face in the very near term, as LEAP grows faster than the rest of the aerospace business- Yep. That creates a mix shift towards a lower margin. Now, we'll obviously work to offset that. What has been hurting our margin of late was less the decline in, you know, commercial aircraft such as LEAP and more because it's cost- plus. The operating margin on LEAP is effective, or certainly the gross margin is the same whether we're making 100 engines or 1,000 engines. Right. It's the same, you know, percentage margin on top of those, largely with minor discrepancies. What the challenge we face is when you see a decline in fixed price business, like 787 that I mentioned went from over $50 million to under $10 million. Like F-35 for this year because of a variety of factors, largely COVID driven, where other parts of the supply chain could not keep up with Lockheed's demand, and Lockheed now has excess of our product on hand. We're gonna see a bit of a destocking. We see a bit of a dip in revenue. That's what's really creating pressure right now on our margin. As LEAP grows, that's also gonna cause a bit of a mix shift. We will work to offset that with some of the other fixed price business we're winning. Programs like CH-53K aft transition is a fixed price business. It's a government business, which is, you know, it would be slightly lower margin commercial, but it's still good business from a growth margin perspective, and certainly good relative to a program like LEAP. Can you hold the margin flat, or is it, you know, is that kind of too far of a bridge to cross? Look, we provided our guidance for this year, which is, you know, at the midpoint down a little from last year. Yep. Yep. Uh. Kind of a similar dynamic. Probably a similar dynamic. You know, Sergio, our goal is to grow the margin. We're lower than we were in, you know, 2019 and 2020. Yep. Our goal is to grow the margin here. Okay. Not to continue declining it. Got it. I don't want to get specific. That was specific enough. All good. On the machine side, you gave a little bit of a cautious guidance based on inventory. What are you seeing so far? Any update to, you know, to that guide? And maybe a little bit of color around that business. Look, I. You know, I think our guidance was, you know, appropriate. I'm not sure I would describe as conservative, but there is risk there of some destocking in the channel. Our customers there are concerned about future availability of products, given logistics challenges, given supply chain challenges across the globe, and have more of our product on hand than they would ordinarily have. Where ordinarily they may have, you know, one roll, you know, of product sitting to the side of the machine, they might have two rolls right now. At some point we expect them to, you know, destock, but to feel like the risk is gone. I've got to say right now, you know, this won't be news to anyone, I don't think anyone's feeling like the risk is gone right now. Right. I certainly don't think that destocking cycle is underway as we're sitting here today. That does not mean that it won't happen during 2022 overall. I don't think the fact that it is not starting right now certainly doesn't affect my view of our guidance at all. Our conservative guidance, as you described it, is really driven by three factors. That plus secondarily the inflation we're seeing around the globe and its impact on our profit margins, because we cannot increase price on a lot of our products in real time. As many of our products were run through long-term contracts, could be three years or four years with customers, with limited room for us to change pricing within the term of that contract. The third factor is, you have FX. We've had two very beneficial years from FX perspective. In 2020, the Brazilian real and Mexican peso, both of which are currencies short, weakened significantly, which provided a nice bump in 2020. In 2021, the euro, a currency in which we're long, you know, appreciated significantly, which is very beneficial for us. Right now, we're not seeing either of those benefits this year. In fact, the euro has slipped even from what it was on our earnings call, given, you know, what's been going on in Ukraine. You know, and the peso and real are staying relatively stable. We're not seeing the same benefit we saw from FX over the last two years. Those three factors were what led us to raise the range we provided on the issue of weather. Right. First of all, you know, you've been very upfront about, you know, how customers have inventory. I mean, how far in advance were they ordering? It doesn't sound like it's necessarily a double order that gets canceled, if you will. It's more like they ordered it and took it. They have it. How far in advance do you think? You know, same customer ordered two of these things over, you know, today. When would he have ordered? Would it have been a couple quarters out? Would it have been? Yeah. No, look, that's another way of thinking about this is, you know, kind of what percentage of our revenue is at risk if all of that got consumed tomorrow? Yes. Yes. Certainly what I'd say is that's been factored into our revenue guide. Okay. It's not as if we think there's another $100 million of revenue at risk there if all of this is consumed. Right. Because, you know, we factored it a little bit. That's largely reflected in our revenue guide today. It's certainly not as though there's double inventory out there. Right. Right. You saw our revenue last year, Kyle. It was up a little over the prior year, partially helped by this. Yeah. The amount by which it was up on a currency neutral basis was, you know, kind of, you know, mid- to high single digits%. Yeah. It was not, you know, up 50% or something like that. Right. For an order that needs to get destocked. There's some excess out there. It's a meaningful amount, but it's not enough to, you know, take us down significantly in revenue were it all to be consumed. Any questions for you guys? I've, you know, kind of dominated here. Don't be shy. No? You dominated that. All right. I get the gist out of that. It's my turn around here, the dominator. The EBITDA margins very strong last year. You mentioned kind of a reason, a bunch of reasons why, you know, that was a good result. How can you get the margins higher long term? Yeah. Look, we've tried to deliver EBITDA margins that are kind of north of 35%. We've been more towards the 40% range of late, which we've been very pleased with. I think if pressure were seen on the margins this year from inflation, it is probably a short term effect. I mean, short term in the maybe couple of years. As we lap these contracts with our large customers, the pricing pressures we see in input costs are the same that our customers are seeing the same pressures. One would expect that over time, that will kind of be absorbed by the market, and that we will lap these increases. Long term, we still see very healthy margins in this business. I think one thing that's a little underappreciated by many investors is the stability of that business. That, for a start, it's a consumable product. When you do see cycles, and every business sees some sort of cycle, it's a much more muted cycle than just certainly, let's say the paper machine manufacturers- Yeah. who are providing capital goods. It's a muted cycle. You know, it's been very stable. The profit and cash flows from that business has been quite stable now for, you know, well over a decade. Very solid results. As we, you know, model out even impacts of downturns, clearly they have an impact on our profit. We still stay very profitable in almost every scenario we can come up with. I think that kind of brings us to the next topic, which is the portfolio. You know, these seem like two very different businesses, but you just mentioned, you know, one that is stable and generates a lot of cash. The other can be a bit volatile and, you know, depending on what kind of programs you have coming up. What other synergies. Is that kind of a key synergy to these businesses being together? What are the other synergies? I know you mentioned some R&D. Yeah. -related. Oh, look, there's certainly been a financial benefit for us as a company over the last five or ten years. As we have grown the aerospace business, and that's required a lot of investment. As you know, aerospace business require capital expenditures, but also working capital investments as you go through the early phases of the program. We've been able to fund those internally, without having to go to the capital markets to raise money, which has certainly been a benefit. That's not the primary reason why we keep them together, because it's just financials, there are other ways of overcoming that. Right. As I mentioned, they came out of a similar technology background. One really grew out of the other, our knowledge of weaving. We still rely on the technological expertise of our, you know, legacy Machine Clothing people in our aerospace business. Now, these technologies are growing further apart every year. Right. These days, you know, if I didn't tell you they were both looms, you'd probably look at, you know, one of the looms in one of our lead factories and our Machine Clothing factories and not see a lot in common between them other than a bunch of tools going into it. Right. The actual loom itself looks very different. They are growing further apart. We still rely on that understanding, and we also rely on the personnel from Machine Clothing. There aren't too many people who know how to weave at an industrial scale, weave heavier fibers. This isn't a cotton fiber weaving. It's like either, you know, a monofilament fiber, fairly heavy-duty run of machine clothing or, you know, these real stranded carbon fibers. So hefty fibers. For example, our Rochester LEAP facility, the plant manager there was previously plant manager at our Cowansville, Quebec Machine Clothing operation. We draw on Machine Clothing for expertise that isn't available anywhere else, quite frankly, in the broader economy. We still see benefits of keeping them together. To say that they are growing further apart, we still see those synergies where we think our current structure makes sense. Just on cash flow, you gave me a bit of a snapshot in CapEx in 2022. What's the key driver there? Yeah. Look, the key single driver is that aft transition win on CH-53K I mentioned, where we have to familiarize with Salt Lake City, an automated line that we're taking a very automated approach to making those since we're gonna be making a lot of ship sets. It's a significant up-front investment, but we think it'll more than pay for itself over the 10 years+ of production. 10 years that we can see with other, you know, international customers interested in CH-53K. I guess as that contract will last or program length is going far longer than the current contract. How are you thinking about prioritizing M&A, repurchases, the dividend? Look, we have a standard dividend. You know, we've been a regular dividend payer for, you know, over a decade. I can't see the board of directors changing that policy. We'd love to do some M&A. There's limited opportunities available to us, particularly on the commercial aerospace side. A lot of owners are loathe to sell right now, because they think they're selling at the bottom, and so it's fairly thin, the market there. We're also unwilling to chase very high multiples unless it's a small technology play where you're really buying the future, not the current business. Such as the business we bought a couple of years ago in Germany, CirComp, where we're buying it for future application of technology they had. We have a lot of dry powder. Our net leverage at the end of the quarter was only 0.25. We still would like to do M&A, but in the interim, we're doing some share repurchases. We mentioned a $200 million authorization from the board near the end of last year. We've been buying under that through Q4 and now into Q1. That is by no means consuming much of our liquidity. It's in a bit of a cooling pattern until we find the right acquisition. Right. Question here? Yeah. Just briefly, is that one patent protected? And two, have you looked at applications outside of aerospace? It's mainly protected with know-how rather than patents. We don't want to give people a guide to how to do it. It took us a long time to perfect it. We've decided to, you know, keep it as a trade secret rather than put it out there. We have absolutely looked at applications outside aerospace. Few applications require the high performance that it offers and the low weight. We're looking still. Yep. Stephen, thanks very much. Nice to see you. Appreciate it.