Good day, and welcome to the Carpenter Technology Fiscal First Quarter 2025 Earnings Conference Call. All participants will be in the listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Mr. John Hewitt. Please go ahead. Thank you, operator. Good morning, everyone, and welcome to the Carpenter Technology Earnings Conference Call for the fiscal 2025 first quarter ended September thirtieth, twenty twenty-four. This call is also being broadcast over the internet, along with presentation slides. For those of you listening by phone, you may experience a time delay in slide movement. Speakers on the call today are Tony Thene, President and Chief Executive Officer, and Tim Lain, Senior Vice President and Chief Financial Officer. Statements made by management during this earnings presentation that are forward-looking statements are based on current expectations. Risk factors that could cause actual results to differ materially from these forward-looking statements can be found in Carpenter Technology's most recent SEC filings, including the company's report on Form 10-K for the year ended June thirtieth, twenty twenty-four, and the exhibits attached to those filings. Please also note that in the following discussion, unless otherwise noted, when management discuss the sales or revenue, that reference excludes surcharge. When referring to operating margins, that is based on adjusted operating income, excluding special items and sales, excluding surcharge. I will now turn the call over to Tony. Thank you, John, and good morning to everyone on the call today. I will begin on Slide 4 with a review of our safety performance. For the first quarter of fiscal year 2025, our total case incident rate was 1.2. This improvement represents a step in the right direction. Our rate has been elevated over the last couple of years as we integrated a large number of new employees into our operations, many of them with little or no experience with an engaged safety culture. During this time, we have invested in training programs for our employees with a focus on identifying potential risks and minimizing the severity of injuries. As our employees gain experience and develop in our safety-focused culture, we are seeing an improvement in our safety performance, but we still have more to do. Our goal is to be a zero-injury workplace, and we will continue to invest and work to achieve that goal. Let's turn to Slide 5 for an overview of our first quarter performance. Obviously, a great start to fiscal year 2025, with record first quarter earnings and a positive step up to our full fiscal year 2025 earn ings guidance. Specifically, in the first quarter of fiscal year 2025, we generated $117 million in adjusted operating income, the most profitable first quarter on record. This 70% increase over our then record first quarter of fiscal year two thousand and twenty-four is the result of continued improvement in productivity, product mix, optimization, and pricing actions. It is a testament to our solid execution, strong market position, and unique capacity and capabilities that we are able to achieve these record earnings during a time of near-term uncertainty in the aerospace supply chain. This is a strong indicator of our ability to produce continued earnings growth acceleration as the aerospace supply chain not only stabilizes but embarks on an aggressive build rate ramp in the near term. Notably, the SAO segment continues to exceed expectations, delivering $134.5 million in operating income with an adjusted operating margin of 26.3%. This is a meaningful step up from the 19.4% in the first quarter of the previous year. The focused productivity efforts are evident within the SAO results, as we were able to increase adjusted operating margin even with lower sequential shipments. Further, we generated $13.3 million of adjusted free cash flow during the quarter, with $40.2 million of cash from operations. In addition, we repurchased $32 million in shares during the first quarter as a part of our $400 million share repurchase program, which was announced on the last earnings call. Altogether, our first quarter performance sets a strong foundation for our fiscal year 2025 financial goals, which I will discuss in more detail later in the presentation. Now, let's turn to Slide 6 and take a closer look at our first quarter sales and market dynamics. In the first quarter of fiscal year 2025, sales decreased 9% sequentially and increased 17% year over year. Sales were roughly as expected, with the majority of the sequential sales decline driven by our planned maintenance outages, as we discussed on the last earnings call. In the aerospace and defense end-use market, sales were down 7% sequentially and up 34% year-over-year. Aerospace and defense first quarter sales represented our best first quarter on record, beating our next best first quarter by over 20%. Within aerospace and defense, engine sales were roughly flat sequentially. Engine sales continue to see strong MRO demand, and customers continue to work to get caught up on past due demand. Defense sales were up sequentially as defense demand remains robust due to ongoing world events and strong pull for advanced critical solutions. The other aerospace sub-markets were down sequentially, largely reflecting available manufacturing capacity in the quarter, as I mentioned earlier. Altogether, our aerospace and defense shipments ended in line with our expectations and represent another very strong quarter. Moving to our medical end-use market, sales were down 20% sequentially and up 10% year-over-year. Together with aerospace and defense, the two end-use markets continue to grow in share of overall revenue at approximately 74% of our total sales. Patient demand and patient backlogs continue to grow, and the overall outlook for market demand remains positive, and we have realized very strong growth in medical, well above market rates, as indicated by our year-over-year growth. The sequential decrease in sales is partly driven by lower shipments due to fewer operating days in the quarter. We also had some delayed shipments in our Dynamet facility due to the hurricane in Florida, and we are coming off a record sequential quarter for comparison. We are reminded daily of how critical our solutions are in the medical end-use market, as our customers continue to emphasize the desire to grow further with us in a variety of new applications that require our unique material solutions. Looking at the energy end-use market, sales were up 8% sequentially and up 35% year-over-year, driven by ongoing high demand and positive long-term fundamentals. Notably, in power generation, we have seen increasing urgent demand for our materials, giving us the ability to opportunistically shift production to support the demand. The alloys that go into these applications are similar to our aerospace materials and carry similar margins. We are working with our power generation customers to continue to identify opportunities to slot the demand into our production schedules. Altogether, underlying demand in our key end-use markets remains robust, and our long-term outlook continues to be strong. Now, I will turn it over to Tim for the financial summary. Thanks, Tony. Good morning, everyone. I'll start on Slide 8, the income statement summary. Starting at the top, sales excluding surcharge increased 17% year-over-year on 3% higher volume. Sequentially, sales were down 9% with a similar reduction in volume. The year-over-year growth in net sales was driven by our improving productivity, combined with the ongoing shift in product mix, as we continue to focus our capacity on our most profitable products, as well as the realization of higher prices. The improving productivity and product mix is evident in our gross profit, which increased to $176.3 million in the current quarter, up 42% from the same quarter last year. SG&A expenses were $59.1 million in the first quarter, up $4 million from the same quarter last year and down roughly $6 million sequentially. Note, the SG&A line includes corporate costs, which totaled $24.4 million in the recent first quarter when excluding the special item. As we said last quarter, we expect corporate costs to be approximately $23-$24 million per quarter for the balance of fiscal year 2025. Operating income was $113.6 million in the current quarter, or $117.2 million of adjusted operating income, which is 70% higher than the $69 million in our first quarter of fiscal year 2024. As Tony mentioned earlier, this represents a record first quarter operating income result. We continue to build operating momentum and expand margins, delivering total company-adjusted operating margin of 20.3% in the current quarter. Moving on to our effective tax rate, excluding special items, which was 16.4% in the current quarter. The effective tax rate was comparable to the same quarter last year due to benefits associated with vesting of certain equity awards in both quarters. For fiscal year twenty twenty-five, we continue to expect the effective tax rate to be in the range of 21%-23%. Adjusted Earnings Per Diluted Share was $1.73 per share for the quarter. The Adjusted Earnings Per Diluted Share results exclude the impact of restructuring and asset impairment charges associated with actions to streamline our additive operations. In summary, the Adjusted Earnings Per Diluted Share results for the quarter of $1.73 demonstrates solid execution in a challenging near-term operating environment, given the supply chain uncertainty in the aerospace industry. Now turning to Slide 9 and our SAO segment results. Net sales, excluding surcharge, for the first quarter were $510.9 million. On a year-over-year basis, sales were up 22% on flat volume. The year-over-year comparison reflects the impacts of higher realized prices and an improving product mix as we actively managed our portfolio to focus on using our capacity for the highest margin solutions. As we had anticipated, sales were down 9% sequentially on 12% lower volume, reflecting the impact of equipment availability across the operations due to planned maintenance activities and fewer working days, offset by realization of higher prices. Moving operating results, SAO reported operating income of $134.5 million in the first quarter of fiscal year 2025. As Tony mentioned, the operating results exceeded our expectations and represent a record first quarter for SAO. The improvements we have made in areas of productivity, product mix, and pricing are evident in the adjusted operating margin, which has increased to 26.3% in the current period. Some additional context for the current quarter's results. On a sequential basis, operating income was down $6.4 million, despite a $48.6 million reduction in sales. This is meaningful and demonstrates the team's efforts to realize further price increases and closely manage costs while enhancing productivity. The SAO team remains focused on executing actions to further increase and maintain consistent production levels, and to actively manage the product mix to maximize capacity for our most profitable products. The SAO's team focus remains unchanged from the last several quarters. In the current environment, the focus is even more relevant as we actively manage our production schedules to adjust to changing customer priorities. Looking ahead to our upcoming second quarter of fiscal year 2025, we anticipate SAO will generate operating income in a range of $134 million-$139 million. Now turning to Slide 10 in our PEP segment results. Net sales, excluding surcharge in the first quarter of fiscal year 2025, were $92.4 million. Roughly flat from the same quarter a year ago and down 10% sequentially. In the current quarter, PEP reported operating income of $7.3 million, compared to $9.1 million in the same quarter a year ago, and $10.6 million in the fourth quarter of fiscal year 2024. As we said in the past, Dynamet is the driver of the PEP segment, as Dynamet represents a significant portion of PEP's sales and an even greater percentage of PEP's profitability. Dynamet's fundamentals are very comparable to SAO, including a strong market demand backdrop in the medical and aerospace end-use markets, which accounts for approximately 95% of their sales. The focus at Dynamet has been, and will continue to be, working to improve productivity and expand capacity to increase our output. Those efforts have driven improved results in Dynamet, which has increased profitability by 50% in our recent first quarter compared to the same period last year. With that said, Dynamet is not the only business in PEP. Our additive business, although not material to overall Carpenter Technology, has recently seen a push out of demand from certain key strategic customers. With that in mind, we currently anticipate that in the upcoming second quarter of fiscal year 2025, the PEP segment will deliver operating income in the range of $6 million-$7.5 million. Now turning to Slide 11 and a review of cash flow. In the current quarter, we generated $40.2 million of cash from operating activities, compared to $7.4 million in the same quarter last year. The results were driven by improving profitability and disciplined working capital management. The cash generation in the current quarter is an important step towards delivering our full fiscal year adjusted free cash flow target. For the current quarter, we spent just under $27 million on capital expenditures. Our target for capital spending in fiscal year 2025 remains at $125 million. With those details in mind, we reported adjusted free cash flow of $13.3 million in the first quarter of fiscal year 2025. Beyond the cash flow we generated, we began executing against the recently authorized share repurchase program. In the first quarter of fiscal year 2025, we purchased $32 million of shares against the $400 million authorization. The share repurchase program reflects our balanced approach to capital allocation and complements the long-standing quarterly dividend. Finally, our liquidity remains healthy. We ended the first quarter of fiscal year 2025 with $499.1 million of total liquidity. That includes $150.2 million of cash and $348.9 million of available borrowings on our credit facility. With that, I'll turn the call back to Tony. Thanks, Tim. Now let's turn to the fiscal year 2025 outlook. We have been on a remarkable journey over the last two years. At our Investor Day in May 2023, we laid out a path to double our fiscal year 2019 operating income by fiscal year 2027. That four-year goal represented a 40% compound annual growth rate for operating income from our expected fiscal year 2023 performance. Even with such impressive growth, there were opportunities to exceed expectations by improving productivity, optimizing product mix, and realizing pricing actions. As many of you follow along, we did just that, accelerating our earnings growth through fiscal year 2024. This led us to pull in our goal twice. First, during our April 2024 earnings call, we pulled our goal ahead at least one year into fiscal year two thousand and twenty-six. This increased the operating income compounded annual growth rate to approximately 55% over a three-year period. Then, in our July two thousand and twenty-four earnings call, we pulled our goal in another full year, following a record year of profitability. The goal, pulled in two full years, now represents an operating income compounded annual growth rate of over 90% from FY 2023 to FY 2025. After a strong start to fiscal year 2025, we are now increasing our guidance again to the high end of the $460 million-$500 million range. We believe we can achieve this despite the current uncertainties in the aerospace supply chain because of our continued execution, strong market position, and unique capacity and capabilities. And the team is not satisfied with just meeting targets. Our team is focused on exceeding expectations. To that end, we have line of sight to activities that could push operating income for fiscal year 2025 even higher, above the $500 million mark. They include improving productivity to unlock incremental capacity and working with customers to pull in high-value orders. And as we look ahead, what is now our fiscal year 2025 target will not be the peak of our earnings growth based on our current projections. The same dynamics that are driving our current performance are expected to only get stronger into the future. The fundamentals of the aerospace industry remain strong, with more people wanting to fly than ever before, and macro trends are pushing our customers across our end-use markets to our highly specialized material solutions, as we've seen in the medical end-use market. As a result, our customers remain focused on the surety of supply to meet their long-term growth needs. We believe that through solid execution, our strong market position, and our unique capabilities, we are well-positioned to continue our earnings growth momentum. Now, let's turn to the next slide for my closing comments. To close, let me summarize our first quarter performance and outlook. Carpenter Technology just delivered a record first quarter, a 70% increase over the first quarter a year ago, which was then a record for the company. We increased margins in our SAO segment again, reaching 26.3%, a new all-time high. We generated positive adjusted free cash flow in the quarter. We began executing against our $400 million share repurchase program, returning cash to our shareholders. And after pulling a four-year target in by two years, today, we've increased our guidance again to the top end of the $460 million-$500 million range for fiscal year 2025, with a drive to go beyond the $500 million mark. All of this despite the current near-term uncertainties in the aerospace supply chain. Further, we see our long-term growth outlook strengthening. Demand across end-use markets continues to grow as we expand relationship with our customers to address their challenges and capture growth opportunities. And we remain focused on improving our execution, as demonstrated by our accelerating performance over the last several quarters. We believe we are in the early stages of our growth journey, and we will continue to live our values as we drive to exceptional near-term and long-term performance. Thank you for your attention, and now I will turn the call back to the operator. Thank you. We will now begin the question-and-answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. At this time, we will pause momentarily to assemble our roster. We have the first question from the line of Gautam Khanna with TD Cowen. Please go ahead. Hi, good morning, guys. Hey, good morning, Gautam. Tony, I wanted to get your some color from you on what's going on with respect to the aerospace customers. Are you seeing any destocking or deferral requests? And if so, kind of in which product areas? And then you've mentioned backlogs remain at near record highs. I'm just curious, like, did incoming orders slow down? Just given the strike and everything else, wanted to get your perspectives on that. Thanks. Yeah. Thanks, Gautam. Good questions. There's a couple in there, so let me kinda take them one by one. First, orders for the quarter. I don't wanna get into specific figures, but I can say the incoming orders were down sequentially, although they accelerated towards the end of the quarter. Obviously, we're coming off a record booking quarter last quarter, so it's a you know, we're comparing to a very high a very high point. I can also add that, you know, we, you know, obviously, with what's going on in the market today, you have some of the aerospace customers taking a bit of a wait-and-see approach, especially those that are very heavily weighted towards Boeing. But that's been offset with strengthening orders in other end-use markets, specifically power generation, when you see the big demand from AI data centers. So that's been a positive offset. I mean, overall, the backlog still is above $2 billion. Lead times and key products still remain extended. So certainly, you know, there's some uncertainty in the aerospace market today, but we have a very healthy order backlog and the orders intakes coming in seems strong as well. So that covers your backlog and your order intake question. I think the other question you had was really about how customers are reacting right now, and do we see any type of deferrals or I think you said inventory build in the system? And I can address that one by saying, you know, obviously, we don't have perfect visibility into the inventory throughout such an extensive supply chain. And certainly, you know, the supply chain doesn't always operate smoothly, as you well know, so there's always been this tendency of building and then de-building. What I can say, though, with a high level of confidence, is first, as it relates to MRO demand, we continue to see emergency requests from customers for more material. So that remains very strong as an offset to what you see, maybe more so on the OEM side. And I can give you an example. It just happened a couple of days ago. We're on the phone with a particular OEM discussing, you know, a likely line down for them, a production line being down for them, and how could we adjust our manufacturing plans to support that urgent need? So our strong sense of demand in this area is that more is needed, and, you know, the majority of people are still behind. So certainly, we've got to work through this period of uncertainty right now, but overall, I mean, for Carpenter Technology. And again, I will say it's gonna be different for everybody in the supply chain, Gautam, as you well know, right? I mean, people that are much more concentrated with a specific customer are going to have a different outcome. For us, because of our breadth of services and capabilities, we believe we're able to navigate that very strongly over the near term. And as a follow-up, do you feel like you guys are. You mentioned the backlogs are still extended, but do you feel like you're kind of caught up with underlying demand? Or, 'cause in prior quarters, you've mentioned, "Hey, if we could ship more, if we had more throughput, we would have customers willing to take more product." And has that cushion kind of evaporated, or is that still the case? And so, like, where- No, I mean, that's a good question. Yeah. That's a good question. Thanks for asking. Again, it's customer specific. I mean, if we have customers that have a very high percent of their portfolio dedicated to one specific customer, are they taking a more wait-and-see approach? Absolutely. But we have other customers, kind of referencing the example I gave you earlier, that are still trying to catch up, that have, you know, exposure to other areas in the aerospace supply chain, to other customers, and they're moving forward. That's really an advantage that Carpenter Technology has with this large backlog. Obviously, we know exactly what's in that backlog, and we're able to pull those forward to inside our production schedule now. Because not everybody is in the same situation, and certainly, we have people that are still trying to move forward in the supply chain, I mean, the production schedule, and some of this uncertainty, you know, with Boeing, is giving them the opportunity to do so. Great. Thanks, Tony. I appreciate it. Yeah. Thank you, sir. Thank you. The next question comes from Josh Sullivan with The Benchmark Company. Please go ahead. Hey, good morning. Hey, good morning, Josh. I just wanna touch on, you know, how do we think of seasonality at this point? You know, historically, there's a reason you report Q1 this quarter. You know, you're up, what? 70% year over year. But how do we think of that historical seasonality and some of the changes versus the current underlying market conditions? You know, particularly when we're looking at some of the metrics, you know, incremental margins or others. It makes it tough, doesn't it, Josh? It makes it tough to model when you can't rely on some of those historical norms anymore. I mean, we are effectively in a sold-out situation, even with this uncertainty that we have in the market today that we hope is behind us in the near term. So really, when you think about quarter over quarter or sequential quarter, the only real difference between the quarters is the number of days that you operate, right? And that's why you've heard us talk about, you know, solid, proactive planned maintenance to keep this, you know, earnings engine moving. So, you know, the bottom line is the timing and the duration of those planned preventive maintenance events is really the determining factor between quarters. Obviously, another determining factor is we continue to increase our productivity, new contracts continue to roll in, that pushes that higher. But we're in a period now where, when you talk to the folks inside of our plants, we're trying to maximize the output and optimize the product mix. So, I mean, every quarter is gonna be, you know, a significant quarter. And just because you have maybe a slight decrease in a sequential quarter, certainly is no reason for a red flag. It's just because we had less operating days in that quarter, or we took more planned maintenance in that quarter, and that's really the only distinction between them right now. It's a good place to be. Yep. And, and then just given, you know, some of the, the cross currents in the industry, and, you know, there's, there's still a need for, for long-term capacity growth. I mean, what are your thoughts, or what are the conversations around increasing capacity at this point? We're always looking at that. I mean, if you see, again, one of the reasons why we have been able to continue to drive earnings growth, right? There's three big areas, and one of those areas is productivity. So we believe. I mean, our belief is, there's always hidden capacity in our factory. There's always ability for us to get better. A prime example, and I think, Josh, we've talked about it in the past, and obviously, you've visited our facilities, so you're very aware. If you look at primary milling, and if you can find ways to safely and at a high quality increase that daily production, that's a massive impact on profitability. I mean, it's a massive impact. So that is an area that our folks out on the shop floor are keenly focused on and making great strides, and that's what you've seen over the last three or four quarters. And, you know, they're very motivated to keep moving forward. So that ability to continue to increase capacity through productivity is a big deal, right? Now, secondly is, what can we do internally, organically, to increase capacity? And I think I've said this more than once, externally, is we're looking at those. It's our job to look at those. As shareholders, you want us to look at ways that we can add capacity organically, spend some capital, get a higher rate of return project to push that to the next level. We've said this many, many times. Any capacity like that we add is not gonna upset the supply-demand situation we're in. I mean, we have demand far outstripping supply, and that's not gonna change by what we may do. But it certainly can increase our profitability, even as an accelerator to the next level, so we're looking at those as we speak to try to see what we can do in that area as well. Hopefully, that answered the question. Yeah, no, absolutely. And I just sneak one last one just to that point on productivity. I mean, is there anything you can provide us on, you know, scrap rates, you know, or, or throughput, or how are we measuring that productivity externally? All of those areas, certainly, I mean, as you know, in productivity and you know, running a product through the plant, there's multiple areas that drive into that overall productivity number. Certainly, scrap rate, or if you would say, you know, first-pass recovery. Do we have to bring that product back for any rework? That's massive. You know, so that is where we're really focused. I mean, I could probably tell you our primary focus, outside of getting those rates up in some of those primary work centers, is reducing the amount of that rework. Every pound, every ton that you can reduce that doesn't go back and get you know, a little extra grinding or whatever it might be, it's massive impact, again, on the productivity. So those are two areas that are really a forefront for us on a daily basis. Great. Thank you for the time. Thank you. Thank you. The next question is from Scott Deuschle with Deutsche Bank. Please go ahead. Hey, good morning. Good morning, Scott. Tony, was the average price of what moved into the backlog for new orders this quarter higher than the average price of what was already in the backlog at the start of the quarter? Yes, you're gonna probably see that from now on going forward. There could be. I should say yes. I mean, there could be some times where maybe that's a bit off, but I think certainly going forward, you're gonna see that, at least the trend line of that, Scott, going up. Yep. Okay. And if it didn't go up, it would just be because of the mix, probably, of- Correct from what went into it. Yeah, and that's why I hesitated a little bit there to say the trend line. I mean, I guess there could be a, you know, a situation where that mix of orders were very high in one area that could do that. But in totality, going forward, you're gonna see that rise with based on the- as the contracts, you know, continue to renew. Thank you. And then, was the 35% growth in energy revenue this quarter, was that entirely driven by IGT? And were the non-IGT pieces of revenue actually down? It's 100% driven by IGT. That's a great question. I mean, inside that market, as you know, we've got the IGT piece and then the oil and gas. Oil and gas was down, in fact, a little bit, sequentially and year over year. I'll give you a number that's really interesting. The IGT piece, up 200% year over year. So that's another area- That's impressive. Yeah. When somebody says, "Wait a minute, how can Carpenter Technology produce these numbers, you know, with all of this noise in the aerospace industry?" And we say: Well, listen, we have the ability, we have optionality. You know, we have a market here that we've been in for a long time, that now is exploding, and we're able to take advantage of that. And we have these customers coming to us, wanting to jump into the production line, willing to pay aerospace margins. And now, with some of the uncertainty in the aerospace chain, the supply chain, they have the ability to do that, and looking to further extend that relationship. So that's a big advantage for Carpenter Technology, that I think sometimes, Scott, maybe goes unnoticed, and certainly not everybody enjoys it. Then, can you remind us where your alloys are found on typical industrial gas turbines and who you would be shipping to? Well, think about anybody, without naming names, think about anybody that's making the large IGT turbines. You know what I mean? You know, it's just a jet engine on land, right? So you have some of the same type of products. I mean, now, what we ship into that market is a little bit. It's a different alloy than that goes into aerospace engines in this case, but it has similar production process, at least on the front end of the melting cycle. The finishing part is a little bit different. So it's a very attractive product for us. Okay, and I'll sneak one last question in. Sure. Tim, are the pushouts at Dynamet, are those just aerospace, or is that medical, or is that another end market? Thanks. Yeah, Scott, the pushouts are actually an additive, not in Dynamet. And yeah, I think you can characterize those as more aerospace-type materials in our additive business. Okay, got it. Thanks. Thank you. Again, ladies and gentlemen, if you have a question, please press star, then one. We have the next question from Andre Madrid with BTIG. Please go ahead. Hey, everyone. Thanks for taking my question. Yeah, good morning. I guess looking forward, I see power generation, obviously, you know, we just talked about that, doing a lot to fill in the gap in the interim or the immediate term. But looking long term, I mean, maybe beyond 2025, you know, are these markets enough to offset any potential weakness at Aero? Andre, I think most of us don't believe that any weakness in Aero is gonna be long term, right? I mean, the macro demand is just too strong. We all believe that in this case here, Boeing will find a way to reach an agreement that's good for both sides, and I believe that's gonna happen, right? So I don't have any fear that in the long term, that you're gonna have aerospace weakness. This is a near-term, you know, phenomenon right now that we'll get through. And when that happens, I mean, you just, you go into a whole different, you know, level of, you know, demand outstripping supply. So you could see, going forward, you know, you're gonna have power gen competing to get on to the assets, not being a replacement. I think that's the mindset you need to have as we get through this kind of choppy period for aerospace right now. Got it. Got it. And then I guess just I know you mentioned in the slides and on the call, you know, growth beyond 2025, definitely expected, and obviously, your comments just now kind of, you know, further confirm that that's the expectation. But, I mean, how should we think about the cadence, you know? Like, obviously, 2026 is gonna be a really tough comp coming off this year. Could it be exacerbated if issues continue any further? I mean, I know you say they're, they won't, but what if, you know? Well, I mean, we can play a lot of what ifs, right? And I can just tell you from my experience in the industry, talking to other major players in the industry, this is gonna get resolved, right? It's too big not to get resolved. So this gets resolved. I mean, and I'll push back on you saying that two thousand and twenty-six, our fiscal two thousand and twenty-six, will be a tough comp to 2025. I mean, we see it as being bigger than 2025, even when we're running a wide range of different build rate scenarios. I mean, with what we're doing on the productivity side, product optimization, you know, the repricing of contracts, from our viewpoint, we see twenty twenty-six as another meaningful step up versus 2025. I think that's what everybody's kinda gotta get you know aligned with. I mean, this is not a doom and gloom situation. This is a particular point in time where we have some significant uncertainty, certainly with a large player in the industry. There's no doubt. But companies like Carpenter Technology and others, I think the strength and the attractiveness of people that want to own our stock is the fact that we can pivot. It's the fact that we have optionality. It's the fact that we have the ability to move and support MRO, to support other customers that are using this as an opportunity to grow and move up in line, in the production line. So to me, this is a very, very exciting time. It's actually a very positive time that you can see somebody like Carpenter Technology can perform like they do in this type of environment, and when we get back to you know more normalcy, if you will, and then an aggressive ramp, I mean, sky's the limit. Got it. Got it. And if I could just sneak one more in, you know, more additive charges this quarter, is this just overflow from last quarter's facility closure? Yes. So it's just to be really transparent, that was just a little bit of inventory that was left over that, you know, arguably, we probably should have taken in the prior quarter and just got to the point, said, "That's not gonna work," and just go ahead and move on and get that behind us. So we're probably- I mean- through the full of it. Yeah, but you know, Andre, let's just say that there's not... I mean, this, it's not even material. What you're talking about $1 million on $135 in SAO. So, it's not, it's not- Yeah. No, definitely. Just you know- Yeah. J ust housekeeping. But no Yeah. I really appreciate the color and all the answers. I'll jump back in. Thanks. Yeah, thank you. Thank you. The next question is from Phil Gibbs with KeyBanc Capital Markets. Please go ahead. Hey, good morning. Good call so far. Thank you. Yes, good morning. Tony, on the SAO bridge for Q2 looks to be flat to a little bit up in terms of profitability. Is that more driven by volume or more driven by price mix? Because I, I can't remember if this quarter typically is seasonally a little bit stronger or weaker relative to the one you just you took the preventative maintenance on in Q1. Yeah. Thanks, Phil. You know, this is really, it's the same answer that I that Josh asked earlier about quarter over quarter, right? I mean, listen, you're gonna take preventive maintenance, some type of planned maintenance activity in every quarter. If you're not, you're not running your facility the right way. You're going to be doing planned maintenance every quarter. Our people that have visited our plant realize how our plants, how big they are. So you're doing planned maintenance every quarter. So if you look at Q1 to Q2, relatively, I think about the same amount of production days, comparing the two quarters together. Certainly, you've got two big holidays in there. It's the end of the calendar year for some other people, some most other customers, so that's a little bit of noise. So I think the fact that we can guide to, you know, higher in the second quarter, even with those types of issues, it's a very strong quarter. We're operating with some really big numbers. Phil, you've been around for a while, and knowing what they were, even in two thousand and eighteen, two thousand and nineteen, when we thought that was a great aerospace time, I mean, we're two and three times higher than that right now. Thank you so much. And then on your full year guidance toward the higher end, and you made some comments on there's opportunities perhaps to exceed that guidance. Is that, in your mind, more volume or more pricing dependent? Well, all three of them, right? I mean, anytime we talk about how we're going to move forward, it's gonna be all three of those major legs to the stool, right? It's gonna be what happens from, contract pricing, product mix optimization, and certainly productivity. So we're looking at that, that all the time. I mean, certainly, you know, we're very methodical with our guidance updates, and then we achieve them. So we've earned that reputation, and, you know, we took a step here by moving to the high end of the guidance. And, you know, as we speak, the folks out in the plant are, you know, working on how they can move past that. And, you know, stay tuned as we go forward with our next couple of calls and seeing updates with that. The last one for me, this acceleration comment that you made towards the tail end of the quarter, was that more so on the MRO side, essentially? Because you said that some expedites, you know, again, and some emergency work there. But where was the... Where would you have seen the acceleration, I guess, relative to early in the quarter? Thank you. Yeah, I would just say in general, in the aerospace side, whether it's for MRO or OEM, you know, depending on the customer, but the acceleration towards the end of the quarter was primarily on the aerospace side. Although, I mean, other areas as well, certainly power generation and others, but primarily aerospace was where we saw that pick back up towards the end of the quarter. Thank you. That's good news. Absolutely. Thanks. Yep. Thank you, sir. Thank you. We have a follow-up question from Scott Deuschle with Deutsche Bank. Please go ahead. Thanks. Yeah, Tony, do you see much demand in the space market for alloys from companies like SpaceX? And if you do, has that demand reached a point where it's at all material yet? Yes. I mean, specifically with the customer that you talked about, you know, I don't want to go too far. I mean, that's an additive customer, right? So, they're a major player, so that's some of the choppiness that you see in order. So yes, strong, yes, still small, but it's not consistent. So for a very small business like additive, that's what you see the swings in their profitability from quarter to quarter, depending on how those orders come in, right? I mean, if you look at the additive market, not to spend too much time on additive, since it really doesn't drive the bus, but you have a couple of big players in that market, and then you have a very long tail of smaller players. So if you have some movement in those big ones, it can really, you know, move the profitability in a quarter-to-quarter basis. Okay, thanks. That's all I had. Appreciate it. Yep. Yep. Thank you. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Mr. John Hewitt for any closing remarks. Over to you. Thank you, operator, and thank you, everyone, for joining us today for our fiscal year twenty twenty-five first quarter conference call. Have a great rest of your day. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.