Morning, ladies and gentlemen. Thank you for standing by, and welcome to Kaman Corporation Investor Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there'll be a question-and-answer session. To ask a question during the session, you will need to press the star, then the one key on your touchtone telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker host, Kary Bare, Head of Investor Relations. Please go ahead. Good morning. Thank you for joining us today to discuss the acquisition of the Parker Hannifin Aircraft Wheel and Brake Division. With me today are Ian Walsh, Chairman, President, and Chief Executive Officer, and James Coogan, Senior Vice President and Chief Financial Officer. A slide deck summarizing the transaction has been posted on our website at www.kaman.com/investors/investor presentation. Before we begin, I'd like to note that some of the information discussed during today's call will consist of forward-looking statements setting forth our current expectations with respect to the anticipated transaction, the future of our business, the economy, and other future events. These could include strategies, transactions, use of cash, cost savings, projections, and other financial items based on assumptions we currently believe to be valid. We encourage you to learn more about the factors that could cause our actual results to differ by reviewing the forward-looking statements in the presentation slides and our regulatory filings, which are available at www.kaman.com. With that, I'll turn the call over to Ian Walsh. Thank you, Kary. I am thrilled to be speaking with you today. This morning, we announced that Kaman has signed a definitive agreement to acquire the Parker Hannifin Aircraft Wheel & Brake Division. This transaction delivers upon the measured strategic approach we've been taking to position our company for the future. It offers a unique opportunity to expand our highly engineered product portfolio by investing in a high margin quality asset with potential for growth. Let me discuss the transaction in more detail. Kaman will purchase the Aircraft Wheel & Brake Division for $440 million. As an asset purchase, the opportunity includes a tax benefit of approximately $50 million. The purchase price, including the tax benefit, represents an EBITDA multiple of 14x. We expect to close on the transaction before the end of 2022, subject to regulatory approvals. The closing of this transaction is not subject to a financing condition. However, we've obtained a financing commitment subject to customary conditions that will provide us with sufficient funding in addition to cash on hand. Aircraft Wheel & Brake provides significant cash flow, which, combined with our strong cash generation, will support the continuation of our dividend, share repurchases to offset dilution, and the opportunity to quickly delever the balance sheet. We anticipate being able to reduce our net debt to EBITDA multiple within two years of the transaction. Now, I'm excited to tell you a little bit more about the Aircraft Wheel & Brake. For more than 80 years, they have been a trusted provider of mission-critical wheel and brake technology products and solutions. They have a strong portfolio of more than 100 platforms specializing in wheels, brakes, and related hydraulic components for fixed-wing aircraft and rotorcraft. They have an installed base of approximately 450,000 aircraft globally, serviced by distribution and longstanding global relationships with leading defense and general aviation customers, providing customized proprietary designs protected by intellectual property. Aircraft Wheel & Brake operates out of one centralized facility in Avon, Ohio, providing a full suite of capabilities, including design, development, and qualification, as well as manufacturing and assembly, product support and repairs. The complementary strengths of Aircraft Wheel & Brake will advance our strategy by expanding the breadth of our product offerings, increasing our exposure to attractive high-margin aftermarket products, and driving meaningful near-term margin and cash flow accretion. Based upon full year 2021 data, the estimated EBITDA margin uplift for Kaman is more than 200 basis points. We are excited to add the experienced Aircraft Wheel & Brake management team to our organization while leveraging their leading proprietary technology and strong customer relationships. This will allow Kaman to expand a suite of solutions to serve customers across a range of critical applications. With decades of combined industry experience and a culture of innovation, there is great potential for growth. To close, today's announcement delivers upon Kaman's promise to grow through accretive M&A by adding capabilities and markets that we know well and increasing EBITDA margin and free cash flow conversion. We believe that this acquisition advances Kaman's position as a premier technology differentiated aerospace and engineered products company. I wanna thank all the team members for their time and effort to get to this point. We look forward to closing this transaction later this year and working with the employees at Aircraft Wheel & Brake to achieve top quartile performance. With that, I'd like to open the line for questions. Operator, can we have our first question, please? Ladies and gentlemen, if you'd like to ask a question at this time, please press the star, then the one key on your touchtone telephone. Please stand by while we compile the candidate roster. I'm showing we have a question coming from the line of Steve Barger with KeyBanc. Your line is open. Hey, good morning. Congratulations. Looks like a good transaction. Hey, thanks, Steve. Thank you, Steve. What was 2019 revenue and EBITDA margin? Can you just talk about what the longer-term growth rate of the business has been? I mean, it's comparable in size to what we see for 2021. There was a slight uptick, little bit of growth, but from a margin perspective, the margins have been very steady for this business for a long time, Steve. Okay. Is there a path to growth that you see? Kind of what's the longer-term strategic view? Is this a nice standalone asset? Does it fit with other assets you're looking at? Just, can you talk about how you're thinking about where this goes? Yeah. Steve, like I said, it fits beautifully into our engineered products segment as a business unit there. You know, if you look at their product portfolio, there's not a huge overlap on the front end, which makes a lot of sense for us. Honestly, I think it's just gonna be a beautiful, solid, stable, reliable asset that fits into the markets and end customers that we know, like I said, exceptionally well Yeah, they've got a really strong foundation, Steve, in materials science, application engineering that allows them to really be at the forefront of developing new technologies. They're in the process of developing some technologies now. We look to continue to support that business right through the development of those technologies with the additional incremental, you know, growth opportunities and dollars there, to continue to drive that business to better growth. There's some nice aftermarket opportunities they have in front of them as well, which when those come to fruition will be nice additive benefits to the business. Can you talk about how the aftermarket works? Are these parts replaced as needed, or is there a set schedule? Just trying to get a sense for the annuity part of the business, if that's a fair characterization. Yeah. I think it depends on the nature of the platform. Typically, when you look at the service and repair overhaul schedules, there's obviously routine and scheduled maintenance. Again, that's part of the reliability of the aftermarket. There's repairs and things like that that come in during normal inspections and stuff like that. There is a schedule around it. These are high-use parts. Typically, you'd see a lot of that aftermarket activity year over year. Yep. Yeah. Okay. I've got more, but I'll see if anybody else is in line and circle back. Thanks. Thanks. Again, to ask a question, please press star one. Now, next question coming from the line of Robert B. Kirkpatrick with Cardinal Capital Management. Your line is open. Good morning. Congratulations. Thanks, Rob. Can you help us understand why you guys are the best buyers of this particular business? Yeah, I'll start. I think as I'm sure you know, there's a huge regulatory piece to this. We felt that we're a very clean asset going in, looking at the nature of this dynamic. I think that was the first piece. The second is as a strategic buyer, one thing that we felt very strongly is that we have extremely similar cultures and values and processes to include everything from operational excellence to best in class management practices. I think that was a huge important criteria for them to understand the regulatory kind of outline and dynamic and making sure we were clean there, and having a strategic buyer that really understood the nature of this business and their end markets and how to grow this company over time. The nice aftermarket opportunities ahead of them is that related to something particular that they have ongoing in terms of you know just business development opportunities? Or is that more that this business has had a lot of OEM business in the last say five years and therefore they have they're just entering a cycle where the replacement and the aftermarket work is gonna kick in? Yeah. I think it's both of those items, you know, to a large extent. There's some new OEM opportunities that are coming on board that will convert into aftermarket in future periods. They also have just such a strong, you know, sort of installed base, you know, with almost 450,000 aircraft globally that they have the opportunity to service, you know, a lot of those being single sourced in nature. You know, and then they do have some other aftermarket opportunities where, you know, because of some of the R&D, research and development, and application work that they've done, they've positioned themselves to be able to take advantage of, you know, aftermarket retrofits in other areas of the business. Yeah. I mean, 80% is kind of a single supplier contracts with OEMs. Again, wheels and brakes and hydraulics and these types of systems are. There's a lot of scheduled and unscheduled maintenance. That drives just a lot of aftermarket content. Could you help us understand how they fit within the competitive landscape? Yeah. They are, you know, our understanding of the competitive landscape is they're a leader really in the general and business aviation space. Right. Right, in terms of what they're able to provide there. They've got a wonderful brand name that they fall underneath called Cleveland Wheels & Brakes, which services a lot of those general aviation products and parts. You know, they do not have a significant amount of componentry on large commercial aircraft. You know, but we're okay with that. A lot of times you have to buy your way into those programs, give up some maintenance channels in the back end. So they are serving a very broad range of customers, a very broad range of platforms. You know, it's similar to what we see with some of our engineered products who serve commercial business and general aviation, right? That sort of broad range of exposure and diversity of customer really, you know, favors them when they, as they go to market, to provide these products. From a regulatory or more of a certification perspective too, what we really love about this business is these are most of these are their designs. They are designed very similar to what we do for the rest of our engineered products business. Really nice similarity there. That IP is exceptional. As Jamie said, you know, they really focus and do exceptionally well in the general aviation, business aviation, fixed wing rotorcraft side of the house. Great. Thank you very much. Thanks, Bob. We have a follow-up question from Steve Barger with KeyBanc. Your line is open. Thanks. Inflation's obviously top of mind right now. How does material pass-through work in this business? Yeah. You know, again, they have the opportunity to do some pricing on that. They've got some LTAs in place, but a lot of their larger LTAs, there's some annual repricing that happens on those, which is good. You know, we've gone through some of the supplier contracts. You know, we're gonna work closely with those suppliers to understand, you know, how the pricing will impact us on a go-forward basis. You know, we're still getting our, you know, arms around the totality, right, of inflation, you know, just in general for, you know, Kaman overall. For a large part, they've been able to, you know, sort of to pass those on through some of their larger contracts. Yeah. If you look at their, like you said, their margin performance over time, it's been very consistent as a function of that. We don't anticipate that being a major Got it. It looks like, well, I guess first, what is the cost of debt that you'll run for the part that you finance? Yeah. As you know, as we think through how that's gonna work, it'll likely be somewhere in that sort of 5.5-6% interest rate range just, you know, given where the Fed is moving with rates, you know, is what we're sort of projecting for that, Steve. Okay. That probably means kind of a mid- to high-single-digit net margin. Is that fair? If I just look at this as a standalone. No. Yeah. Well, let me get back, circle back with you on that one, Steve. I just wanna make sure. Okay. I answer that question appropriately. Yeah, what I'm really trying to go toward is how should I think about normalized Free Cash Flow here? Yeah. Like, what's the conversion rate been relative to EBITDA or whatever? Right. Yeah. Historical conversion rate relative to EBITDA is in sort of that 80%-90% range. Yeah. You know, some periods have been a little bit higher. It's not an overly capital intensive business, but, you know, we do plan to increase some of our capital investment in that business, and we can continue to fund some incremental R&D as well, there, Steve. You know, again, we've seen historically 80%-90% free cash flow conversion for that business. 80 and 90 from EBITDA? From EBITDA, correct. EBITDA. Yeah. Okay, great. I see the slide deck says 75 customers. What percentage of revenue comes from the top 10 customers? Just how's the concentration? Yeah, the concentration, you know, it's from a commercial OEM. The largest commercial OEM customer, you know, is producing somewhere in that sort of 3%-5% range. On the aftermarket side, you know, it's the largest platform they have is somewhere in the sort of, you know, 7%-8% range, depending on the year and the volumes that go through that. It isn't an overwhelmingly, you know, deep set for those top ten on a relative basis. They've just got such a broad diversity of offerings across a number of platforms, you know, that one of the aspects we really like about the business. Yeah, $12-15 million or so is in their top ten. Okay. Okay. The local management team will be staying, or how's that gonna work? Yes, absolutely. That's our commitment. Very, very strong team. Very excited about their capabilities. Absolutely. Got it. Got it. Sorry if I missed this, was this competitive bid or how long was the process? Yeah. It was a competitive auction process that we went through, you know, to secure the transaction. You know, at the beginning to end, call it two months. Yeah. Okay. Great. Thanks. Thanks, Steve. Thank you. Again, if you have a question, please press star one. I see no further questions at this time. I will now like to turn the call back over to Kary Bare. Thank you all for joining us today to discuss this opportunity for Kaman, and we look forward to talking with you more about this in the future on our next call. Have a great day. Thank you. Ladies and gentlemen, that does end our conference call today. Thank you for your participation. You may now disconnect.