Ladies and gentlemen, thank you for standing by. My name is Brent, and I will be your conference operator today. At this time, I would like to welcome everyone to the Hexcel 1st Quarter 2022 Earnings 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 at that time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again, press star 1. Thank you. It is now my pleasure to turn today's call over to Mr. Patrick Winterlich, Chief Financial Officer. Sir, please go ahead. Thank you, Brent. Good morning, everyone. Welcome to Hexcel Corporation's 1st quarter 2022 Earnings Conference Call. Before beginning, let me cover the formalities. I want to remind everyone about the safe harbor provisions related to any forward-looking statements we may make during the course of this call. Certain statements contained in this call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. They involve estimates, assumptions, judgments, and uncertainties caused by a variety of factors that could cause future actual results or outcomes to differ materially from our forward-looking statements today. Such factors are detailed in the company's SEC filings and last night's news release. A replay of this call will be available on the investor relations page of our website. Lastly, this call is being recorded by Hexcel Corporation and is copyrighted material. It cannot be recorded or rebroadcast without our express permission. Your participation on this call constitutes your consent to that request. With me today are Nick L. Stanage, our Chairman, CEO, and President, and Kurt Goddard, our Vice President of Investor Relations. The purpose of the call is to review our 1st quarter 2022 results detailed in our news release issued yesterday. Now let me turn the call over to Nick. Thanks, Patrick. Good morning, everyone, and thank you for joining us today as we share our 1st quarter 2022 results. Hexcel has started 2022 on a solid foundation, and we have come a long way from the low point of the pandemic in 2020. Now, with 6 quarters of sales growth behind us and increasing demand ahead of us, business is undeniably moving in the right direction for our customers and Hexcel. We are reporting adjusted 1st quarter diluted EPS of $0.22 and sales of $391 million, representing a year-over-year revenue increase of 26%. This compares to last year when we reported negative earnings per share and sales of $310 million. Based on recent travel trends and industry commentary, it is apparent the effects of the pandemic are lessening on air travel and in our markets. Hexcel is now benefiting from the swift restructuring and cost reduction actions that we took at the start of the pandemic, as well as our disciplined management of cash and working capital. We have remained closely aligned with our customers throughout this challenging period and focused strongly on our operational efficiency to be ready for this positive revenue ramp. Similar to many global industrial companies, the major headwinds we are now facing stem largely from the economic impacts of the pandemic or the geopolitical pressures and supply chain disruptions resulting from the tragic conflict in Ukraine. One of the hallmarks of Hexcel team is our agility. We respond quickly to deal with challenges, and this is a tremendous advantage as we work through the current uncertainties. With every situation we face, Hexcel remains focused on our fundamental objectives and delivering on our commitments. Hexcel is not immune to the inflationary pressures currently affecting most economies around the world. We have some protection as a result of our long-term supply contracts to mitigate a significant portion of those pressures. Still, it has now become the norm for our teams to be regularly working to minimize the impact of rising energy, freight, and certain raw material costs, as well as working through supply chain logistical constraints as efficiently as possible. While higher energy costs are impacting Hexcel, over time, it also boosts demand for our lightweight fuel-saving composites as, for example, airlines choose to replace aging fleets with lighter, more fuel-efficient aircraft made possible by advanced composites. Like many others, we are also faced with a tightening labor market. However, I'm encouraged that our workplace is desirable as many who left Hexcel during the pandemic are choosing to return. That reaffirms what we already know. For talented people who want to work in a collaborative and respectful culture where everyone is encouraged to share and build on innovations for a better, more sustainable future, then Hexcel is a great place to be. There may be a lot of competition out there for the best people, but our value proposition is strong, and we are confident that as we continue to expand, we will attract the top talent we need to join our winning team. All in all, our results demonstrate strengthening customer demand and our upward business trend. Sales continue to grow, margins are recovering, and quarterly EBITDA is rising. Our teams have effectively dealt with nearly 2 years of uncertainty by working smarter to innovate, collaborate, and deliver best-in-class materials for the next generation of aerospace and industrial applications. Our fundamentals remain strong, and our team is focused on forging ahead through all the challenges to ensure that we take full advantage of the significant growth opportunity that lies ahead in 2022 and beyond. Now let's turn to some specifics reported in our release last night. 1st quarter sales of $391 million were 27% higher than Q1 2021 in constant currency. 1st quarter adjusted diluted EPS was $0.22 compared to -$0.10 last year. Turning to our 3 markets. Commercial aerospace is benefiting from strengthening narrow-body sales, higher A350 sales, and growth in business jets. Sales of $219 million were up almost 49% this quarter in constant currency. Other commercial aerospace, which includes business and regional jets, was up 70% when compared to Q1 2021. This is the 3rd consecutive quarter of double-digit sales growth in commercial aerospace. As the market recovers, Hexcel benefits from the continued penetration of lightweight composite materials, as well as our passionate commitment to partner with and serve our customers. As part of our continuing alignment with increasing customer demand, we broke ground last quarter on an expansion at our engineered core facility in Casablanca, Morocco, that will double our manufacturing capability at the site when completed early next year. Illustrating another future growth opportunity, Archer Aviation recently announced that it has selected Hexcel to supply high-performance carbon fiber materials that will be used in manufacturing Archer's EVTOL production aircraft called the Midnight. Whether called electric vertical takeoff and landing, urban air mobility, UAMs, or advanced air mobility, AAMs, this is an emerging market that holds real promise to improve lives via clean and convenient mobility and a market that could develop into a significant source of composite demand over time. Hexcel, with its broad portfolio of materials, is ideally positioned to provide solutions to this exciting and evolving market space. Space and defense sales of $118 million represented a 7% increase in constant currency. Hexcel composites are the benchmark in this market, which provides us with a diversified foundation for a strong future. While there have been pandemic-related disruptions within the space and defense supply chain, we believe stability has generally returned, and we anticipate steady demand through 2022 from the platforms we serve. The growth outlook for space and defense beyond 2022 has been further supported by recent announcements for increased defense spending in a number of Western countries. International interest in the F-35 and CH-53K has also been strong in the past few months. A key to our continued success is a strong relationship with our space and defense customers. Our commitment to quality, on-time delivery, and operational excellence led to our recognition during the quarter by Sikorsky as an elite supplier. In addition, we announced in March that our advanced composites had been selected by Northrop Grumman for the Artemis II rocket booster. This is an inspiring program to return humans to the moon and illustrate the critical role composites play in spacecraft design and lightweighting to maximize payload capacity and overall performance. Turning to industrials, sales increased more than 9% in constant currency during the quarter to $54 million. Strength in the recreation, automotive, and consumer electronics market drove the increase more than offsetting lower wind energy demand. As an example of Hexcel's innovation for the industrial market, we recently introduced a new technology called G-Vent for out-of-autoclave processing that delivers a game-changing reduction in processing time and cost for marine manufacturers without compromising mechanical performance. Finally, our 2022 guidance we shared with you in January remains unchanged. We continue to expect sales in the range of $1.5 billion-$1.63 billion with adjusted diluted earnings per share of $1-$1.24. Our guidance for free cash flow is to generate more than $145 million while continuing to manage our capital expenditures in the range of $75 million. Now, let me turn it over to Patrick Winterlich to provide more details on the numbers. Thank you, Nick. As a reminder, the year-over-year comparisons I will provide are in constant currency. The majority of our sales are denominated in dollars. However, our cost base is a mix of dollars, euros, and British pounds, as we have a significant manufacturing presence in Europe. As a result, when the dollar strengthens against the euro and the pound, our sales translate lower, while our costs also translate lower, leading to a net benefit to our margins. Conversely, a weak dollar is a headwind to our financial results. We hedge this currency exposure over a 10-quarter horizon to protect our operating income. Turning to our 3 markets, commercial aerospace represented approximately 56% of total 1st quarter sales. 1st quarter commercial aerospace sales of $218.9 million increased 48.8% compared to the 1st quarter of 2021, with growth in narrow bodies, wide bodies, and business jets. Also noteworthy is that commercial aerospace sales increased 9.6% sequentially from the 4th quarter of 2021 based on growth in Airbus platforms and business jets. Space and defense represented 30% of 1st quarter sales and totaled $118.2 million, increasing 7% from the same period in 2021. Our space markets posted strong growth, as did CH-53K heavy lift helicopter and military jet platforms, including the F-35 and Rafale. Industrial comprised 14% of 1st quarter 2022 sales. Industrial sales totaled $53.5 million, increasing 9.4% compared to the 1st quarter of 2021. We experienced strength across a variety of markets, including recreation, automotive, and consumer electronics, which more than offset the lower wind energy sales. Wind energy was approximately 35% of 1st quarter industrial sales. On a consolidated basis, gross margin for the 1st quarter of 2022 was 22.2% compared to 17.1% in the 1st quarter of 2021. In line with sales, gross profit dollars increased for the 6th consecutive quarter, and we achieved the best gross margin percentage performance since the 1st quarter of 2020. While we continue to improve our margins, we are not immune to the inflationary cost pressures impacting the world. As we explained last quarter, many of our largest raw material purchases are protected by long-term contracts or financial hedges that are designed to layer in pricing changes over time and minimize quarterly volatility to our earnings. We are witnessing some inflationary cost impacts around certain raw materials, logistic costs, consumables such as packaging material, and on our energy costs. Freight and shipping delays are impacting us just as they are impacting many other businesses globally. However, we are managing to mitigate any significant impacts to our customers. As a percentage of sales, selling, general, and administrative expenses and R&T expenses were 14.2% in the current quarter compared to 16.5% in the 1st quarter of 2021. As we return to growth, we are focused on cost control so that our sales grow at a higher rate than costs return to the business. Adjusted operating income in the 1st quarter was $31.1 million or 8% of sales. The year-over-year impact of exchange rates in the 1st quarter was favorable by approximately 30 basis points. Despite all the challenges and cost pressures, we are maintaining our 2022 guidance. As we progress through the year, we will benefit from operating leverage as capacity utilization increases. We continue to target double-digit adjusted operating margin for the full year of 2022. Now turning to our 2 segments. The Composite Materials segment represented 80% of total sales and generated a 13.2% adjusted operating margin, strengthening on higher capacity utilization as the adjusted operating margin in the comparable prior year period was 8%. The Engineered Products segment, which is comprised of our structures and Engineered Core businesses, represented 20% of total sales and generated a 13.9% adjusted operating margin, driven by a strong mix of engine and defense sales. The adjusted operating margin in the comparable prior year period was 5.4%. The effective tax rate for the 1st quarter of 2022 was 22.5% compared to a 36.8% benefit in the 1st quarter of 2021. The prior year period included a discrete tax benefit of $3.2 million from the revaluation of deferred tax liabilities related to a favorable U.S. state tax law change. Net cash from operating activities in the 1st quarter of 2022 was a use of $19 million compared to a use of $1.2 million for the 1st quarter of 2021. Working capital was a cash use of $74.3 million, increasing to support higher sales. This compares to working capital being a cash use of $26.2 million in the 1st quarter of 2021. Capital expenditures on an accrual basis were $11.1 million in the 1st quarter of 2022, compared to $4 million in the prior year period. Capital expenditures are increasing this year on higher capacity utilization, plus growth CapEx as we expand our production in Morocco to support commercial aerospace and defense markets, as well as building a new Research and Technology innovation center in Salt Lake City, Utah, to support next-generation aircraft and future industrial applications. Free cash flow for the 1st quarter of 2022 was negative $39.9 million, compared to negative $6.1 million in the prior year period. As we referenced last quarter, our free cash flow generation is typically weighted to the second half of the year. The revolver terms and conditions have now reverted to the terms of the original 2019 agreement following the expiration of the second amendment on March 31, 2022, with the exception that the size of the borrowing facility remains at $750 million. Our next leverage covenant measurement will be on June 30, 2022, and we remain confident of being in compliance. Our share repurchase program is no longer restricted by the revolver amendment, and the remaining authorization under the share repurchase program on March 31, 2022, was $217 million. The board of directors declared a $0.10 quarterly dividend yesterday with a payment date, sorry, of May 13 to stockholders of record on May 6. With that, let me turn the call back to Nick. Thanks, Patrick. As we progress through 2022, we are executing to support continued growth. We recognize the current supply chain constraints, the tight labor market, and the inflationary pressures on energy and certain raw material costs. However, we remain confident in our ability to deliver our reaffirmed financial target guidance. Hexcel has emerged stronger from the pandemic, and as our performance reflects, we are growing and focusing on a future that provides value to our shareholders. Throughout 2022, Hexcel will stay focused on efficiency and productivity, cash management, and overall performance, especially in quality and on-time delivery. Already, we are realizing a significant upturn in demand that will only grow stronger with continued robust global demand for advanced composites technology for lighter weight, stronger, and more durable composite solutions that only Hexcel can deliver. Brent, that's the end of the prepared remarks. We're now ready to take questions. At this time, I would like to remind everyone, in order to ask a question, press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, again, press star 1. In the interest of time, we request that you limit yourself to 1 question and one follow-up question. Your first question comes from the line of Michael Ciarmoli with Truist Securities. Your line is open. Oh, hey, good morning, guys. Thanks for taking the question. Patrick, just on the sequential growth in commercial aerospace, you called it out pretty impressive, 9.6%. How should we think about that moving forward? You know, I think you called out some wide bodies, too. Obviously, you know, not much happening with the 787. Looks like the rate increase on the A350 might have gotten pushed out 6 months. I mean, should we expect that to subside a little bit or just any color on how to think about that sequentially? I think as we progress through the year, I mean, we've got, you just mentioned the program. We're probably more or less at steady state on the A350 now at rate 5. We're all looking ahead for the move to rate 6 as Airbus signals going into 2023. That will be the next movement point, will be a few months ahead of that build rate change for Airbus and the A350. I think the A320 is gonna continue to ramp. I mean, essentially we're moving from the 45 from last year, going up to 65 by the middle of 2023, and we're on that curve. We're gonna see nice steady growth on the A320. Now, getting to the harder part is the Boeing programs. We're seeing growth from the MAX program, which is great. We're moving up towards the rate 31, and we're obviously all watching China to see what happens there. The 787 will support Boeing. We're ready to move when they are. They're obviously working closely with the FAA, but I don't want to get ahead of Boeing, and we'll just have to be, and we are ready to support. We do see ongoing growth really driven by the A320, most obviously, Mike. Got it. Just to follow up then, any near-term implications on the 777X? You know, I'm assuming there was, you know, de minimis revenues anyway flowing through there, but is that part of the near-term planning horizon? Will we see that this year, or has that kind of been pushed out a little bit? On the 777, we're at a low level today. It's a marginal impact to us. Obviously, we'd love to see it come through sooner rather than later and the ramp begin. Given that on our current sort of production and output, it's a minimal impact. Okay, great. Thanks a lot, guys. I'll jump back in the queue. Your next question comes from the line of Ken Herbert with RBC. Your line is open. Hey, good morning, Nick and Patrick. Morning. Morning, Ken. Just wanted to follow up on the aerospace growth in the quarter. I know last year you were obviously facing some destocking headwinds. Is it fair to assume that the up, you know, almost 50% growth represents sort of all volume, or is there anything else from a channel build or anything else unique going on in the quarter? Yeah, Ken, I think, as you mentioned, we do view the destocking pretty much behind us. Even the 787, we believe the majority of the supply chain adjustments there down to Boeing's very low rate, that's mostly taken place now. We do believe we're very well aligned with the production build rates. You know, there could be a little bit restocking here and there given the complexity of the supply chain, but for the most part, we're pretty much aligned with the OEM build rates today. Okay. That's helpful. Just as a follow-up on that, considering, you know, some of the risks in the supply chain that you called out, are you yourselves? I know you've invested quite a bit in the quarter in working capital, but how do we think about your own inventory levels? Is there any risk from your own supply chain, you know, near term or long term that you're hedging against or that could be a potential factor later on in the year as you look at the rate increases? A couple of points. Obviously, with our revenue going up, we certainly expected receivables to follow. That's a working capital use. Inventory is a combination. We clearly have some strategic inventory we've identified, and that we're protecting our supply chain and our ability to deliver on our customer demand. We're also facing supply chain disruptions and bumps and delays in delivery, which by definition, we wanted to have a little extra inventory. On the one hand, we're holding more inventory than we would under a normal, steady-state, stable supply chain. In today's environment, Patrick and I are both a little more lenient on bringing in some raw materials to protect us going forward. I would say during Q1, the number of supplier shortages on small-type components, as you know, we're under contract on the large volume, chemicals and commodities in that space. Smaller type components were popping up through the quarter. Our team managed them. At this point in time, I don't expect that to go away in the 2nd quarter. Hopefully the second half of the year it'll slow down and stabilize for us. As of this point, we're under control, and we are holding a little excess inventory. Great. Well, thank you very much. Thanks, Ken. Your next question is from the line of Myles Walton with UBS. Your line is open. Thanks. Good morning. Quite a bounce in sales and margins, and you didn't really mention anything that sounded one-off in nature, particularly on the Engineered Products margins. Maybe if there's anything in there that would suggest it's you know, unsustainably high. I think the only thing I heard was engines and defense were strong as it relates to mix, but no tooling or anything else like that, or was there? No, I mean, fundamentally, it was a favorable mix, but it wasn't overly exceptional. There's nothing I'd call out as a significant one-time item to your point. I think what I might sort of just remind people is we talked about the transition of material into ACM last year. That was lower margin product that is now gone. The remaining average mix, if you like, is probably slightly better in our Engineered Products. Even so, this was a sort of a strong mixed quarter as well. Nothing odd to point out, but perhaps going forward, we might see a slightly higher average in that space. Okay, that's good. In terms of the inflation, you mentioned it a couple times, but obviously it didn't really show up here in the margins in the 1st quarter. Is the anticipation that it starts to eat into your contracts or your sort of your forward long-term agreements would start to show some of that sharing of the inflation in the next few quarters? I mean, we have long-term pricing contracts which don't sort of jump around that much. the protection we have, as you've heard us say before, are some long-term sort of input costs. Our major resins, we hedge propylene, we have futures on some energy. There are some large chunks where we have some protection. But as we're trying to say, we're not bulletproof, that there are aspects of our business, freight, some energy cost Some, if you like, some of the smaller raw materials where we are seeing inflationary pressures. We're working hard through efficiency and productivity to overcome that. We're not complacent. Perhaps we have a bit more protection than most, but we're pretty confident. As we said, we're still aiming for double digit operating margin this year, and that's our goal. Okay. The last one, F-35, I would have thought that would have been more of a headwind to you along with supply chain issues that sort of others are seeing. You had growth, and I think you called out CH-53K and space. Was the F-35 a sort of a lighter head this quarter and it builds through the course of the year, or is there any? It was a really good performance or growth against the sort of the offsetting features that most of the rest of the people are seeing in the F-35 supply chains. Yeah, Myles, I don't think the F-35 stood out from our perspective relative to our plan and our expectations. We see that continuing to be strong throughout the year, based on our, you know, our products that we provide for structures and through our technology. CH-53K was a nice bump as well as our called-out space. We really didn't see anything unusual and continue to view the F-35 as a growth opportunity this year and next. Okay. I'll stop there. Thanks. Thanks, Myles. Your next question is from the line of Sheila Kahyaoglu with Jefferies. Your line is open. Thank you so much. I wanted to ask about commercial aero and other commercial. You know, what are you guys seeing in biz jets? I think, a large supplier just earlier called out, you know, some potential headwinds in helicopters and in biz jets. What are you guys seeing there? Well, I'll stick to business jets to start off. You know, as you know, we recently added ship set guidance on large cabin business jets, where composite penetration is just continuing to grow, with some of the new applications actually being at the high end of our 200,000-500,000 ship set range. We're particularly strong with both Gulfstream platforms like the G600, also on the Dassault platforms as well. We're seeing, you know, the OE backlogs, the lead times, the interest in the charter rate and flight opportunities with respect to how tight those markets are. We think that's a growth opportunity certainly for the balance of the year. Great. Thank you for that, Nick. Maybe if we could talk about capital deployment opportunities now that I think the restriction is lifted on share repurchases. Like, how do you prioritize capital deployment from here? Do you go back to M&A and more defense acquisitions like ARC? Because that could be an end market that has more potential to grow than you previously thought. Yeah. Again, our basic lending agreements did revert back, and I think our next measurement period is in June, and we're on track of where we expect it to be. Share buyback is back on the table. As you know, we reinstated dividends last quarter and the board approved the 2nd quarter in a row of dividend awards. Our fundamental priorities haven't changed. We're investing organically, and I would take the opportunity now to highlight that the pandemic did provide Hexcel some pretty significant opportunities with down capacity. For the first time in probably a decade, we had the opportunity to experiment and work in our assets for new material variants as well as processing enhancements to help our productivity and to leverage in incremental sales going forward. That's going to create new organic opportunities, which we're pursuing in fibers, faster resin systems, faster lay down rate, material solutions for both aerospace and industrial. Organic investment is gonna continue to be priority number one. Bolt-ons, as you mentioned, through M&A. Our M&A pipeline and our team are working that as hard as ever to identify the right opportunities. Based on availability, that certainly is on the table, as our return to shareholders through dividend increases and share buyback. That's kind of the sequence of how we view it and how we look at it on a daily basis, Sheila. Okay. Great. Thank you so much. Thank you. Your next question is from the line of Mike Sison with Wells Fargo. Your line is open. Hey, guys. Nice start to the year. Nick, I think you mentioned that the inflation is giving more opportunities for lightweighting, and I think commercial aerospace is pretty straightforward. What are you seeing in industrial where you think you might be able to get some momentum in some maybe newer applications or legacy applications for lightweighting? Well, you know our big markets, I'm not going to turn away from them. The fact that some of the legacy prepreg materials in wind. They've lived their life, certainly in North America and in China, and we're pursuing and investing in new technologies that enhance the value for wind turbines. Our new G-Vent technology to help out-of-autoclave to make our solutions more economical, both in the cost of the materials, but the processing time, and the overall life cycle cost for the end user. We're continuing to invest there. We've seen strong pull in marine. We've seen strong pull in automotive. Again, remember, when we talk automotive, it's typically the premium end. Many of the European high-end sports cars where performance, aesthetics, light weighting is required for the application. Those applications have seen less of the chip impact that mass market has experienced. That's remained strong for us. We continue to look at other areas of growth opportunity, hydrogen pressure vessels and power transmission, just to mention a few, Mike. Got it. Then, you know, I was impressed that you're able to keep, you know, sort of labor intact and new hirings for as things ramp up. You know, as you think about 2023, 2024 when demand could really pick up for you guys, do you still feel pretty good that you can get the labor you need to meet that demand? Well, you know, if I go back to the start of Q1, I'd have to tell you, we were working very hard, and we were challenged on finding direct labor as well as indirect. I would tell you, over the course of the quarter, our hiring has become easier. Not that it has gone back to pre-pandemic levels, but I can tell you, our business performance, the attraction of what we offer with respect to benefits, keep in mind our jobs are technical in nature and higher paying than minimum wage. We offer very competitive wages as compared to the geographies and the markets we participate in. To answer your question, in the balance of 2022, given what we know today, I feel confident that we're going to be able to recruit, retain, hire, the top talent that we need to support the demand that our customers are placing on us. Great. Thank you. Thanks, Mike. Your next question is from John McNulty with BMO Capital Markets. Your line is open. Yeah, good morning. Thanks for taking my question. Just really one. When I think about the guide that you've put out and in particular the sales guidance, the midpoint of the range kind of, it basically says you're gonna see similar volume, similar sales levels that you saw in 1Q. I guess, is there anything in terms of your outlook, what you're seeing kind of in your end markets that gives you pause or makes you think that realistically you're not gonna see growth from the 1st quarter type levels? How should we think about that? John, I'll give my perspective and perhaps Patrick will add some additional color. You know, if you look at the growth that Airbus has communicated publicly, where they intend to go with the A350 next year to 6. The A320 continuing to generate strong orders, build backlog, and increasing the ramp rate. Boeing, little less certainty on when the 777X will again be delivered. We believe we've been conservative in our forecast and that's included. That doesn't change our outlook, nor does the 737 MAX and the fact that the recertification in China, you know, it hasn't happened until it starts. We're certainly not in a position to predict that, when that's going to happen. I can just say we'll be ready for it. In general, we don't see anything. I don't see anything that gives us pause that we're not gonna continue to grow through the balance of the year. Got it. No, that's perfectly clear. Thank you. Thanks for the color. Thanks, John. Your next question is from David Strauss with Barclays. Your line is open. Thanks. Good morning. Good morning. Good morning, David. Hey, Nick. Hey, Patrick. On currency, Patrick, I think, you know, not gonna be much of an impact this year because of your hedging, but, you know, we've obviously seen a big strengthening here on the dollar. Can you talk about where things stand for next year and at kinda current rates, how much of a tailwind it might be to margins? Yeah, absolutely. We certainly welcome the stronger dollar, and as you recognize for 2022, we're kind of largely locked in and the open piece, if you like, is giving us the small tailwind that we alluded to. I think we called out 30 basis points sort of in the 1st quarter. The dollar continues to strengthen against the euro. I think I actually saw it under 1.07 this morning, and undoubtedly that's gonna help. We're starting to lock in hedges for 2023. It's a little bit premature for me to kind of call out any sort of margin impact other than that the direction is favorable. Currency right now and combined with our hedging policy is definitely a positive. What is your average hedge rate against the euro this year in 2022? I'm not gonna call out a specific rate like that. I mean, we're obviously somewhere in the teens as an average rate, and it's gonna be stronger next year. We were locked in 75% more or less coming into 2022, and we're building out now our profile or hedge coverage, if you like, for 2023. Okay. The corporate line, I know you had the stock comp impact in Q1, but what does that look like the rest of the year? Is it a similar level kind of as what you saw overall Q2 through Q4 last year, or does that bump up at all? Yeah. I mean, our profile annually for stock comp is always similar. We get the largest charge in the 1st quarter. It, I mean, it normally hits actually the month of February. The remainder of the year is not 0, but it's at a lower level. You should expect to see a similar profile to previous years. Nothing exceptional or different this year. Okay. Like in the, like $30 million range total the rest of the year, something like that? Low 30s? What are we talking about? Stock comp? No, I'm talking about the total corporate line, which I think Q2 through Q4 of last year was, like, $31 million. Yeah. That's a sensible number. I mean, give or take. I mean, you can always get puts and takes, but that's the right magnitude, yes. All right. Thanks very much. Thanks, David. Your next question is from the line of Pete Skibitski with Alembic Global. Your line is open. Hey, good morning, everyone. Nice quarter. Thanks, Pete. Nick, I guess as people get more concerned about the macro backdrop, are you seeing any pockets of weakness in industrial markets, for instance? I know you do have kinda tougher comps in industrial the back half of the year, but I'm wondering if maybe wind might actually be less of a headwind for you over the next few quarters, and so maybe can offset some general industrial weakness. I'm just interested in your visibility there. Well, you know, certainly the macroeconomic impacts and what's going on in Ukraine with Russia and how that could influence China, that's clearly a watch item. In industrial, you know, I would have to say wind in particular, there's some softness. I think the Western OEs have called out some softer forecasted sales for a couple of years, driven primarily by first incentives that caused a pre-buy in supporting those incentives. Secondly, steel inflation, which is a big factor in the towers that the turbines utilize. You know, steel inflation has been very significant, which is also going to create some headwind. That's the one area. You know, when we look at the marine, the automotive, consumer electronics that we've targeted with some of our open capacity, I think we're being very selective in niche specialty type markets that I don't see a huge impact today. Again, what transpires over the course of the year? How deep do we go into a recession? What happens with inflation? Does it slow down, or does it accelerate? Again, those are watch items, Pete. Okay. Fair enough. Thanks for the color. Hey, thank you. Your next question is from the line of Philip Gibbs with KeyBanc Capital Markets. Your line is open. Hey, good morning. Good morning, Philip. Just interested in terms of how far you get ahead of the rate, particularly for the Boeing 737 MAX. If they're near 31 right now, and you're shipping ahead perhaps by a little bit, does that mean that you may be seeing them receiving it at or above that rate, or is there still some uncertainty as it relates to taking that up prospectively? Yeah. I mean, Philip, I would say we're still on the way to rate 31, and Boeing has called out, hasn't gone beyond 31 publicly, and we're certainly not gonna get ahead of them and. At the moment, we're still on the ramp up to 31 is what I would say. Okay. Fair to say, based on the comments that you made to David, that the euro weakening is an actual benefit to this year, somewhat. Seems like to be somewhat offsetting the inflation you're seeing elsewhere. Yeah. I mean, a little bit. I wouldn't overplay it. I mean, we've been in a period of relatively strong dollar now for a couple of years or more, and so we're seeing. But it continues to strengthen. Marginally, and I stress the marginally, we do expect that to be a little bit of a headwind 2022 over 2021. You expect currency to be a headwind to results. Sorry. A tailwind. Oh, okay. Okay. Sorry. No worries. My mistake. No worries. That's what I thought. Take care, guys. Your next question is from the line of Richard Safran with Seaport Research Partners. Your line is open. Nick, Patrick, Kurt, good morning. Morning. Good morning, Richard. Your margins indicate you've been able to offset the typical step-down pricing with increasing volume and long-term agreements. Now look, I know this is a bit sensitive, but can you offer a comment or 2 on the pricing environment overall and your efforts to increase pricing? You know, certainly in aerospace, but also within industrial, since I'm thinking that's probably where you have the most opportunity. Yeah, Richard. Let me start with aerospace. Obviously, those are long-term contracts, and price down because of volume recovery, that's insignificant to nothing. I mean, we're under contract, and that's having minimal impact as we ramp back up to where we were pre-pandemic levels. I'd say on the aerospace, keep in mind those long-term contracts have various indices built in that reflect inflationary pressures and oil, and those have somewhat of a lag to them. No contracts are identical, but you need to think of a lag of 6-12 months for the typical aerospace type contract. Industrial responds much quicker, and many of those are shorter contracts, some of which we can even push pricing as our costs and our input costs go up. We've been increasing pricing where it's justified throughout the industrial segment. I'd also say we do have longer term contracts in that space, but they have faster refreshes, so they could be updated quarterly or semi-annually. It's rare that they go out to 12 months. Okay. Thanks for that. You're welcome. Nick, I wanted to ask you about capital deployment again. I thought I'd ask you to get specific about one item, buybacks. Is that something you think could start in 2022, or is it more likely, I'm thinking, given the uncertainties in the business, that it's 2023 they could start again? Well, you know, as Patrick mentioned, we look at that and have discussions on that every quarter, and we have over the past year. You know, our debt leverage is going to help us decide on the right timing and mix between, you know, potential M&A, how close we are, what opportunities present themselves. R&T spend and internal organic growth pursuits that we're continuing to invest in. And then perhaps, a dividend growth strategy down the road. I wouldn't rule out the possibility that share buybacks could start in 2022, but at the same time, I'm not going to commit to it either. Fair enough. Thanks, Nick. Thanks, Richard. Your next question is from Robert Spingarn with Melius Research. Your line is open. Hi, good morning. Good morning, Robert. Hi. A couple high-level questions. One for you, Patrick, one for Nick. Patrick, when you factor in future mix, inflationary costs on raw materials, labor, packaging, energy, all the things you've talked about today, maybe except currency, how do your longer term operating margins look when volumes return compared to the 18% or so you did pre-pandemic? This is, you know, a long-term look at margins based on everything that's happened, including all the restructuring you did for the past 2 years. That's a great question and where's the crystal ball shop? I mean, we obviously look out. We have strong margins fundamentally in our business, and we continue to drive to that through efficiency and productivity. We took a lot of cost out, as you alluded to, $150 million, sort of the low point of cost out, and we're gonna hold on and retain as much of that as we can. You're right. Well, I need to say, as I said earlier, we've got a lot of protection. We've got long-term contracts for resin supply. We hedge propylene, which is a smoothing, and we have futures on energy. We do have a chunk of protection. There is this underlying pressure, this ongoing pressure that you're alluding to. Our job is to work hard, to be efficient, and to return the company back to that 18% level when volumes return. I mean, we need that volume leverage, there is no doubt. As we sit here today, we're not kind of thinking we can't return ever to those levels. That's definitely on our agenda. We're gonna find out a way to do it. At the same time, we acknowledge those pressures. One of the reasons our guidance range is perhaps still wider than you might expect is because we can see those pressures, and we're working our way through, managing to offset and mitigate them. I'm not gonna get into sort of calling out forecasts for 2023 and beyond. We've indicated we continue to target double digits for 2022, and that's our focus. I acknowledge all the things you raised. We're definitely looking and thinking. I mean, some of the items are also gonna be more sticky than others. I actually see the world working through some of these raw material supply issues, and there'll be some softening. I don't think all of these things are here forever. Anyway, our goal is still to return the business to double digits this year and then drive to 18% where we were previously, as you call out, in future years. Okay, that's very good color. Nick, is your next step change opportunity in commercial aero from a new clean sheet, let's say an NMA or an update to an existing program, like maybe a composite wing, for example, on the A320? Well, that too is a very good question. I mean, both of which we love the opportunity because a derivative, whether it's a new engine which requires a new nacelle or a new wing, those will all be very composite-intensive and great opportunities for us. Obviously, a clean sheet is the ultimate goal or the ultimate opportunity with respect to the fuselage, the empennage, the entire structure, and even further penetration with the advancements in composites and the near net shape and the processing enhancements. The next new airplane, our belief, is going to be very composite intensive and most likely even more intensive than the latest designs in that 787 and the A350. You need to tell me what's going to come first. Is it going to be a clean sheet design or might one of the OEs, introduce a composite wing or other composite structure to bridge up to a new platform? I can tell you, we're working on the technologies to support both. We have new advanced materials that produce faster, cure faster, and provide value to the OEs beyond what, historic materials had done. We're in a great position with a very diversified portfolio, regardless of what direction the OEs go. Okay. Thank you. Just a quick one on Archer, maybe a clarification, but are you a risk-sharing partner there? We're not. Okay. Thanks so much. You're welcome. Your final question comes from the line of Gautam Khanna with Cowen. Your line is open. Yeah. Hey, thanks for all the candor on the call. I was curious about 2 things. One, are you seeing any disconnects, any meaningful disconnects among your many customers on any of the programs, be it A350, 787, what have you, where, you know, they're purchasing at very different rates, i.e., you're still seeing some folks that are well behind and overstocked? You know, just I'm curious, like, is there still a catch-up to be had on a net basis? Yeah. I basically strongly say absolutely not. I think the benefit that our customer intimacy and our strong relationships provide us is we talk with them every day. We see what's going on in the supply chain. You know, even though the OEM supply chain may be slightly different on where they are with respect to build rates and their inventory levels, all in all, we see very good alignment, and I don't see anything in particular that's driving extra demand or potentially will limit demand going forward other than the OE build rates. Okay. That's very helpful. Patrick, I know you've answered this a number of different ways, but maybe just more directly on things that aren't contractually protected as input costs, on the aerospace side. I presume resins are. I'm just curious, what is and what isn't surchargeable, if you will, over time? Well, I'm not gonna go through a definitive list, but as we've called out, I mean, major resins, propylene, which is obviously a big feeder, or AN, acrylonitrile, which is a big feeder for the carbon fiber and some energy elements we have some coverage on. Some of the consumable items, packaging items, minor chemicals, those are the sort of things that we're more exposed to. On some large significant chunks of our business, we have really good protection. Some of the smaller parts, freight, for example, which is not a huge component of our cost, we're more exposed to. Is there any way to quantify just the aggregation of those smaller items? Is it, you know, they account for X dollars or X percent of cost of goods sold? Anything you could say to that. I'm just gonna repeat what I've said. Okay. Large portion is protected. Some of our smaller elements are not. Thanks, guys. Ladies and gentlemen, thank you for your participation. This concludes today's conference call. You may now disconnect.