Good day and thank you for standing by. Welcome to the Fourth Quarter 2024 Ducommun Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Suman Mookerji, Senior Vice President and Chief Financial Officer. Please go ahead.

Thank you, and welcome to Ducommun's 2024 fourth quarter conference call. With me today is Steve Oswald, Chairman, President and Chief Executive Officer. I'm going to discuss certain limitations to any forward-looking statements regarding future events, projections, or performance that we may make during the prepared remarks or the Q&A session that follows. Certain statements today that are not historical facts, including any statements as to future market conditions, results of operations, and financial projections, are forward-looking statements under the Private Securities Litigation Reform Act of 1995 and are, therefore, perspective. These forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from the future results expressed or implied by such forward-looking statements. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. In addition, estimates of future operating results are based on the company's current business, which is subject to change. Particular risks facing Ducommun include, among others, the cyclicality of our end-use markets, the level of U.S. government defense spending, our customers may experience delays in the launch and certification of new products, timing of orders from our customers, our ability to obtain additional financing, and service existing debt to fund capital expenditures and meet our working capital needs, legal and regulatory risks, the cost of expansion, consolidation, and acquisitions, competition, economic and geopolitical development, including supply chain issues, international trade restrictions, and rising or high-interest rates, the ability to attract and retain key personnel and avoid labor disruptions, the ability to adequately protect and enforce intellectual property rights, pandemics, disasters, natural or otherwise, and risk of cybersecurity attacks. Please refer to our annual report on Form 10-K, quarterly reports on Form 10-Q, and other reports filed from time to time with the SEC, as well as the press release issued today for a detailed discussion of the risks. Our forward-looking statements are subject to those risks. Statements made during this call are only as of the time made, and we do not intend to update any statements made in this presentation, except if and as required by regulatory authorities. This call also includes non-GAAP financial measures. Please refer to our filings with the SEC for a reconciliation of the GAAP to non-GAAP measures referenced on this call. We filed our 2024 annual report on Form 10-K with the SEC today. I would now like to turn the call over to Steve Oswald for a review of the operating results. Steve?

Okay. Thank you, Suman. Thanks everyone for joining us today for our fourth quarter conference call. Today, and as usual, I will give an update on the current situation at the company, after which, Suman will review our financials in detail. Let me start off again on this quarterly call with Ducommun's Vision 2027 game plan for investors. The strategy and vision were developed coming out of the COVID pandemic over the summer and fall of 2022. We unanimously approved by the Board, the common board in November 2022 and then presented to investors the following month in New York, where we got excellent feedback. Since that time, Ducommun management has been executing the Vision 2027 strategy by increasing the revenue percentage of engineered product and aftermarket content, which finished at 23% for 2024, up from 19% in 2023, consolidating our rooftop footprint in contract manufacturing, continuing the targeted acquisition program, executing our offloading strategy with defense primes and high-growth segments of the defense budget, driving value-added pricing and expanding content on key commercial aerospace platforms. All of us here as well as my fellow board members continue to have a high conviction in the Vision 2027 strategy and financial goals and believe that many catalysts ahead present a unique value creation opportunity for shareholders. The Q4 2024 results are another example of our strategy initiatives working with much more to come in the next few years. Q4 was our 15th consecutive quarter with year-over-year growth in revenue, growing 2.6% over prior year to $197.3 million despite significant headwinds in commercial aerospace build rates, destocking at BA and SPR and the strategic pruning of our non-core industrial business, which I've mentioned in the past. It was also our sixth consecutive quarter above $190 million in revenue. Strong growth in our missile and electronic warfare programs, F-16 and military ground vehicle programs, drove our military space revenue to 5% growth over prior year. Defense business has now been over $100 million in revenues for the fifth time in the last six quarters, and we remain optimistic about the growth ahead. I also want to point out that three of our top five customers in Q4 were defense primes, and that is consistent with all the quarters in 2024. There is great momentum as we move to build scale at other defense primes such as Northrop Grumman outside of RTX, our largest customer. Also on the defense side, obviously, a lot of discussion going on for European defense budgets. On January 6, we put out a press release and did announce a major order in Q4 from Bayern-Chemie, a new customer for DCO based in Germany, and is 100% owned by MDBA. This order is in support of NATO and the Patriot PAC-2 missile. Bayern-Chemie makes the rocket motor and came to DCO in Joplin, Missouri for best-in-world cabling solutions. All POs were received in Q4, which totaled over $40 million in cable assemblies and shipments will begin in 2025 through 2030. We're obviously thrilled with this new customer and expect more activity with FMS in 2025. We are very well-positioned. In our commercial aerospace business, we continue to see excellent growth on the A220 program where we make the skins for the entire fuselage. The A220 program grew more than 40% during Q4, and we continue to see growth on other Airbus platforms as well. The commercial rotorcraft business grew over 50% in Q4 over prior year with strong growth on the S-92 platform as well as our BLR fast fin business for helicopters, DCO's most recent acquisition. This growth was partially offset by weakness on Boeing platforms that we all know, as they slowly resumed production after the strike in Q4. Overall, commercial aerospace grew 4% year-over-year in the quarter. We have now grown year-over-year revenue in our commercial aerospace business for 14 consecutive quarters. This is a great story showing the resilience of our business even in a challenging environment with Spirit and Boeing. Gross margins also grew $4.7 million to 23.5% in Q4, up 180 basis points year-over-year from 21.7%, so we continue to realize year-over-year benefits from our strategic value pricing initiatives, productivity improvements, growing the engineered products portfolio of aftermarket and initial restructuring savings, partially offset by some unfavorable product mix and one-time expenses during the quarter. Our Monrovia, California facility is now closed, and our Berryville, Arkansas facility is down to less than 10 people to make capability until the receiving plant in Guaymas, Mexico is certified for the Tomahawk missile program that is expected very soon. We're already seeing cost savings for these facility closures. We'll see those savings be higher as the receiving plants ramp-up production in 2025. Stay tuned. For adjusted operating income margins in Q4, the team delivered 8.2%, which was about flat to the prior year of 8.3%. We continue to be pleased with the growth in our engineered product businesses and are encouraged by the performance in our electronic business this quarter, resulting from the impact of our strategic pricing initiatives. Our restructuring savings during the quarter were offset by lower margins in our Structures business due to unfavorable mix and one-time expenses. Adjusted EBITDA continues to grow compared to last year at 13.8%, up $4.3 million and exceeding $27 million. Great to see. This represents an expansion of 180 basis points above prior year. This continues our year-over-year momentum we've seen each quarter in 2024, as we work towards the 18% goal in our Vision 2027 plan. GAAP diluted EPS was $0.45 a share in Q4 2024 versus $0.34 a share for Q4 2023. And with the adjustments, diluted EPS was a solid $0.75 a share compared to diluted EPS of $0.70 in the prior year quarter. The higher GAAP and adjusted diluted EPS during the quarter was driven by improved operating income as well as lower interest costs due to our proactive hedging strategy, which took effect in January 2024. The company's consolidated backlog continues to be strong at $1.06 billion, increasing $17 million sequentially and over $67 million year-over-year despite headwinds from VA. The defense backlog increased $98 million compared to the prior year quarter, and is now at $625 million, with new orders from previously discussed Bayern-Chemie, the toll missile case, MESA airborne surveillance as well as other platforms. As discussed, we experienced a pause in the order cycle for the toll missile case, but now will be coming back strong with better pricing. We manufacture in our Guaymas, Mexico facility, where previously it was produced in Monrovia, California. The commercial aerospace backlog decreased sequentially by $14 million. Full year 2024 revenue grew 3.9% to a record $786 million. Our commercial aerospace business grew 8% in 2024, with strength in Airbus, commercial rotorcraft and business jet platforms, partially offset by weakness on Boeing platforms. Our military and space business grew 4% in 2024, driven by strong performance across missiles, missile defense, radar, naval and F-15 programs, partially offset by weakness on the F-18 and F-35 programs. Our non-core industrial businesses were down 24% as well in 2024, as we continue to selectively prune non-core business to refocus our portfolio for the long-term. Full year 2024 adjusted EBITDA margins expanded 140 basis points to 14.8%. An excellent performance as we make steady progress towards our Vision 2027 target of 18% EBITDA margins. I'm also delighted to share significant progress on what I believe is the number one strategic goal under our Vision 2027 strategy. In December 2022, we set a target of generating 25% plus of our revenues from Engineered Products from 9% in 2017 and 15% in 2022. In 2024, our engineered product revenue was 23% of our total revenue, up from 19% in 2023, positioning us well ahead of the curve achieving our Vision 2027 goal, and we're pushing for a lot more. We achieved this both through focused investment driving organic growth on our current businesses as well as the BLR acquisition. This tremendous progress, and I cannot be happier. As for 2025 revenue, we are positioned to benefit from the expected volume recovery as the year progresses as well as the upcoming certification of three major revenue programs being transferred from our closed plants. We are guiding to mid-single-digit growth for the year, with a flattish first quarter due to destocking and lower build rates, slightly better revenue in Q2, and then renewed strength in the second half of 2025. Now let me provide some additional color on our markets, products, and programs. Beginning with our military and space sector, we saw revenues of $109 million, compared to $104 million in Q4 2023. Growth was driven by missile programs such as the MI, the TOW circuit cards along with Next Generation Jammer and the F-16. These are partially offset by weakness on the F-35, Apache, and the well-documented F-18. Fourth quarter military space revenue represented 55% of Ducommun's revenue in the period, down from 59% for the full year back in 2022 and 70% in 2021. We expected this trend and reflect commercial aerospace getting stronger for DCO, providing good balance. We also ended the fourth quarter with a backlog of $625 million, an increase of $98 million year-over-year, representing 59% of Ducommun's total backlog. Within our commercial aerospace operations, fourth quarter revenue continued to grow, increasing 4% year-over-year to $82 million, driven mainly by growth on the A220 and S-92 platforms, offset by lower rates on the MAX. As mentioned earlier, we believe a much better story ahead for BA and the MAX. Now the production is ramping up again. We also have high confidence in Kelly Ortberg, and his team. The backlog within our commercial aerospace business was $416 million at the end of the fourth quarter, decreasing $15 million compared to the prior year driven by the Boeing strike. We expect this to recover as production rates ramp up in 2025. Revenues in our industrial business declined by a third to $6 million during Q4 as we continue to strategically prune non-core business from the portfolio. This will benefit the company in the longer term as we transition our capacity to our core aerospace and defense platforms. Okay. With that, I'll have Suman review our financial results in detail.

Thank you, Steve. As a reminder, please see the company's 10-K and Q4 earnings release for a further description of information mentioned at all. As Steve discussed, our fourth-quarter results reflected another period of solid performance with our commercial aerospace and military end markets. We also continue to make good progress on our facility consolidation projects which are now nearing completion and will drive further synergies in late 2025 and into 2026. As we close out the recertification of the various product receiving facilities over the next few months. As Steve highlighted earlier, we also made great strides to build up our engineered product portfolio with those revenues now contributing 23% to our mix. These actions, along with our strategic pricing initiatives, drove strong margin expansion in 2024 and have put us on a strong footing to achieve our Vision 2027 goals. Now turning to our fourth-quarter results. Revenue for the fourth quarter of 2024 was $197.3 million versus $192.2 million for the fourth quarter of 2023. The year-over-year increase of 2.6% reflects growth in both commercial aerospace and military and space, highlighted by $5.1 million of growth across military and space platforms and $3 million of growth in our commercial aerospace platforms. We posted total gross profit of $46.4 million, or 23.5% of revenue for the quarter versus $41.7 million, or 21.7% of revenue in the prior year period. We continue to provide adjusted gross margin as we have certain non-GAAP cost of sales items in the current and prior period relating to inventory step-up amortization on our recent acquisitions and restructuring charges. On an adjusted basis, our gross margins were 24% in Q4 2024 versus 23.2% in Q4 2023. The improvement in gross margins was driven by our growing engineered products portfolio, strategic pricing initiatives, productivity improvements, and restructuring savings, partially offset by unfavorable product mix in our Structures segment and one-time expenses. We continue to make progress working through the operating environment with supply chain and labor. Through our proactive efforts, including strategic buys and our inventory investments, we have been able to avoid any significant impact thus far on our business. Going forward, we will continue to work to improve the working capital returns in the business and improve our cash flow. Ducommun reported operating income for the fourth quarter of $10.4 million, or 5.3% of revenue compared to $8.9 million, or 4.6% of revenue in the prior year period. Adjusted operating income was $16.1 million, or 8.2% of revenue this quarter, compared to $15.9 million, or 8.3% of revenue in the final period last year. The company reported net income for the fourth quarter of 2024 of $6.8 million, or $0.45 per diluted share compared to $5.1 million, or $0.34 per diluted share a year ago. On an adjusted basis, the company reported net income of $11.4 million, or $0.75 per diluted share, compared to adjusted net income of $10.4 million, or $0.70 in Q4 2023. The higher net income and adjusted net income during the quarter was driven by the higher operating income and adjusted operating income. Additionally, our interest rate hedge helped to reduce our year-over-year interest expense. Now, let me turn to our segment results. Our Structural Systems segment posted revenue of $90.3 million in the fourth quarter of 2024 versus $85.6 million last year. The year-over-year increase reflected $6.4 million of higher sales across our commercial aerospace applications, including the A220 and S-92 rotorcraft platform. Military and space applications were down 5%, driven primarily by a decline in Apache revenue, as we shut down production in our Monrovia facility, partially offset by growth in Black Hawk and other military vehicles. Structural Systems operating income for the quarter was $3.2 million or 3.6% of revenue compared to $6.6 million or 7.7% of revenue for the prior year quarter. Excluding restructuring charges and other adjustments in both years, the segment operating margin was 9.2% in Q4 2024 versus 14.6% in Q4 2023. The decline in margin during the quarter was driven by unfavorable program mix and higher one-time costs. Our Electronic Systems segment posted revenue of $107 million in the fourth quarter of 2024 versus $106.7 million in the prior year period. Higher revenues from the Mere next-generation Jammer and F-16 platforms were offset by lower revenues from in-flight entertainment electronics along with a reduction in our industrial business as we chose to selectively prune non-core work. Electronic Systems operating income for the fourth quarter was $19 million or 17.7% of revenue versus $9.8 million or 9.2% of revenue in the prior year period. Excluding restructuring charges and other adjustments in both years, the segment operating margin was 17.7% in Q4 2024 versus 10.2% in Q4 2023. The year-over-year increase was primarily due to a higher mix of engineered products, strategic value pricing initiatives, as well as savings from the restructuring program. The restructuring savings were driven by the consolidation of product lines from our variable performance center into our Joplin facility. Next, I would like to provide an update on our ongoing restructuring program. As a reminder and as discussed previously, we commenced a restructuring initiative back in 2022. These actions are being taken to better position the company for stronger performance in the short and long term. This includes the shutdown of our facilities in Monrovia, California and Berryville, Arkansas and the transfer of that work to our low-cost operation in Guaymas, Mexico and to other existing performance centers in the United States. We continue to make progress on these transitions and are working diligently with our customers, Boeing and RTX to obtain their requisite approvals, which are expected to be completed over the next few months. During Q4 2024, we recorded $2.3 million in restructuring charges. We expect to incur an additional $1 million to $1.5 million in restructuring expenses as we complete the program. Upon the completion of our restructuring program, we expect to generate $11 million to $13 million in annual savings from our actions and have already seen some realization of savings from these actions in 2024. We expect the synergies to ramp up in late 2025 and into 2026 as the product recertification is complete and receiving facilities move off the learning curve and ramp up production. We also anticipate selling the land and buildings at both Monrovia, California, and Arkansas. Turning next to liquidity and capital resources. In 2024, we generated $34.2 million in cash flow from operating activities, which was an improvement compared to $31.1 million in 2023. The improvement was due to net income growth of $15.6 million, offset by investments in working capital. We paid down $15 million on our revolver and $7.8 million on our term loan for a total of $22.8 million during the year. As of the end of the fourth quarter, we had available liquidity of $228 million, comprising the unutilized portion of our revolver and cash on hand. Our existing credit facility was put in place in July 22 at an opportune time in the credit market, allowing us to reduce our spread, increase the size of our revolver and allowing us the flexibility to execute on our acquisition strategy. Interest expense in Q4 2024 was $3.6 million compared to $5.4 million in Q4 2023. The year-over-year improvement in interest cost was mainly due to our interest rate hedge. In November 2021, we put in place an interest rate hedge that went into effect for a seven-year period starting January 2024 and pegs the one-month term SOFR at 170 basis points or $150 million of our debt. The hedge resulted in interest savings of approximately $1.8 million in Q4 2024 and will continue to drive significant interest cost savings in 2025 and beyond. To conclude the financial overview for Q4 2024, I would like to say that the fourth-quarter results continued our momentum this year and position us well for 2025 and beyond. I'll now turn it back over to Steve for his closing remarks.

Okay. Thanks, Suman. Just in closing, Q4 was another very good quarter for DCO to finish, I believe, an excellent year. In 2024, we achieved record revenues with record margin expansion and the Vision 2027 strategy in its second year really kicked in. We also delivered full-year EBITDA margins of 14.8%, which was an expansion of 140 basis points during the year. Solid progress towards our target we've been mentioning this morning of 18% by 2027. We also discussed our Vision 2027 target of the very important 25% plus of engineered product revenues and 2024 coming in at 23% was terrific news. Finally, with the BA strike now behind us, commercial build rates heading higher, along with, I believe, a very good defense backdrop for DCO, including FMS, I feel great about what lies ahead in the next few years for us, our shareholders, and our other stakeholders. So, with that, let's go to questions. Thank you.

Operator Instructions And our first question comes from the line of Ken Herbert of RBC Capital Markets.

Hey, good morning, guys. Stephen, Suman. Maybe just to kick off. I appreciate the 2025 mid-single-digit top line outlook as we think about the year. Specifically, can you provide any color on expectations for defense and commercial markets, commercial aerospace? And then I guess within commercial aerospace, where are you shipping today on maybe the MAX? Or I guess what do you see as continued destocking risk on that particular program into the first part of year 2025?

Thank you for the question, Ken. Let me address the commercial aspect first. A significant portion of our MAX business comes from Spirit, which accounts for a large part of our shipments, including those sent to Boeing. Currently, we are facing destocking challenges with Spirit, particularly in the first quarter and likely through the first half of the year. While I can't provide specific numbers, we anticipate that the first half of the year, especially the first quarter, will be somewhat difficult due to these destocking issues. However, we expect conditions to improve afterward, with indications pointing towards achieving at least mid-30s production rates. We're optimistic that the second half will perform better than the first. On the military side, we recognize that many service companies are experiencing significant challenges, but our backlog remains strong, and we are engaged in programs that we are excited about. A recent example is a new customer acquisition related to a Natel buy we secured in Q4, which we attained due to our expertise in cabling and our previous collaboration with Raytheon. Thus, we remain confident about the defense sector. We believe we will see increased commercial aerospace activities in the second half of the year, while the first half will be primarily characterized by destocking and efforts to ramp up build rates.

I also add that we are seeing improvements between January and February this year in our shipments, both to Spirit and Boeing. So we have seen a ramp-up and from kind of the teens into the 20s, both with Boeing and Spirit going from January to February. So that bodes well for Q1 and rest of 2025.

Okay. So…

I believe we will observe strong growth in the commercial sector as well, but this growth will be more prominent in the latter half of the year. Meanwhile, I anticipate that defense growth will be more consistent throughout the year.

Okay. Perfect. And just a clarification, what percent of your maybe defense sales ultimately end up in Europe? And how much will you benefit just from what's expected to be a surge in defense spending there?

Yes, that's a good question. This entire order, which exceeds $40 million, is actually one of our first significant contracts. We are experiencing an increase in demand from the Polish order for Apache helicopters and similar projects. This order impacts our U.S. defense pricing. It’s a new venture for DCO, and we are optimistic about receiving more orders in the future. Although it's early, this is a direct shipment to Germany, which suggests a positive outlook for additional contracts this year and next year.

Perfect. Thanks. I’ll pass it back there.

All right, Ken. Thanks.

Thank you. One moment for our next question. Our next question comes from the line of Mike Crawford of B. Riley Securities. Your line is now open.

Thank you. I know it's a little early, but with potential offsets to defense budget spending where things are reprioritized under the new administration, as much as 8% targeted. Where does Ducommun sit in the mix? Like let's just take, for example, growing platforms like the Exon 30 that is like a new next-generation combat vehicle that's probably okay, but maybe some other older platforms might get hit on reprioritization of spending. So as you look at it now, how would you characterize your position amid all this?

Yeah, Mike, I hate to give you that answer. I'll give you two parts to the answer. First, it's tough for us to know right now. So that's the first answer I'll give you. The second answer is that we feel like when we look across what we have, we feel very good about where we are with our circuit cards, with our cabling. We've got truck full orders for Apache even though that program, as I mentioned, is offline right now, and it will be certified in the next couple of months and will be made in New York, at our Krosaki facility. The Tomahawk missile is going to be there, as you know. So SPY-6, maybe here, maybe there. We feel like at least what we know today, we feel good about the breadth. That's what I would say about our defense business.

We don't have a strong reliance on any one program. No individual program is more than 10% of our defense revenues, including programs such as the F-35, the F-16, or F-18, so I think we are diversified in that way. And also the focus, as Steve mentioned, is on our missile, missile defense, electronic warfare, and our focus in those strategic areas, I think, is going to bode well if there is that pivot that you're talking about. And we should hopefully see further growth in those areas offsetting weakness on the more legacy platforms.

The only thing, Mike, we've been writing down is the F-18, which we've signaled the last, I guess, year or two on the call, right? So we'll be writing that down. But the good news is that a lot of that lower revenue now is in the base. So we're not going to see as much headwind on that. That's our view.

Okay. Thank you. And just to switch gears a little bit. So in the IMC business, you have this great relationship with ViaSat that has just about 4,000 commercial planes in service and another 1,570 planes in backlog. So that's still going to continue for a few more years, but this has been a great growth business for you in the last few years. But at what point do you start planning for capacity where that business will slow down at some point, if it's not next year or 2027 is going to happen at some point. So when do you start planning for that transition?

We're fortunate to have a strong foundation in Appleton, Wisconsin, where we handle all the card work for ViaSat, who are excellent partners. The Next Generation Jammer is being integrated there, and we have many projects lined up. Even though the volume of work from ViaSat may decrease, we anticipate needing more space over the next year or two due to high demand for our products from Appleton. From my perspective, we're in a solid position.

Okay. Thank you. And just the last one is what, if anything, are you seeing that's different or interesting in your M&A pipeline?

So we are continuing to work on multiple opportunities. The deal flow in the lower mid-market for the engineered product businesses that we have seen has been slower in the past 12 months. But there are active things in the hopper that we continue to work on, and we remain optimistic and confident about being able to execute our acquisition strategy and meet the Vision 2027 goals.

Yeah. Thank you.

Thanks, Mike.

Thank you. One moment for the next question. Our next question comes from the line of Jason Gursky of Citi.

Hi. This is Jeremy Jason on for Jason Gursky. I just kind of wanted to understand sort of how much of the margin hit this quarter in Structural Systems was like mix as opposed to like costs that would fade away once Mexico is up and running. And so like if it's mixed, how long does that mix sort of persist for?

Right. Great question. And I would say it's kind of about evenly split between mix as well as one-time expenses that were specific to the quarter. The mix as well was unusual to the quarter, and we do expect the margins in the structures business to fully recover in Q1.

Got you. Got you. I really appreciate that. And so my follow-on question is just if that's the case. So it sounds like Boeing programs are a bit more profitable than Airbus so first of all, is that the case? And also, what can you guys do to like improve Airbus program profitability?

We generally avoid discussing the profitability of specific customers or product lines. However, we make sure that we receive appropriate compensation for the value we provide to our customers. We continue to explore opportunities with the customers you've mentioned to initiate projects where it is suitable and ensure that we achieve adequate margins. These measures have been implemented over the past year, leading to an increase in our margins. We have ongoing initiatives aimed at maintaining this momentum into 2025 as well.

Perfect. And then one last one. Thank you so much for this. So how much of like additional costs did you guys sort of incur in this past quarter that were not backed out like? And sort of when do those potentially go away?

So are you referring to the Structures segment?

Yeah.

So it's about half of the drop in margin was on account of one-time expenses.

Just for this quarter.

Just for this quarter.

For Q4.

Got you. I appreciate the color. I'll pass it back.

Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Alexandra Mandiri of Truist Securities.

This is Andre Mandiri from Truist Securities. Thank you for taking my question. I wanted to ask about the cash flow statement. There is an item listed as legal fees for an unsolicited non-binding acquisition offer in the fourth quarter and $3.145 million year-to-date. Could you provide more details about this item and what it involves?

Yes. While we are not pleased about this expense and did not intend to use shareholder funds in this manner, it was necessary to protect shareholder interests and maintain the company's value for our current shareholders. To ensure that management and the Board were adequately advised in relation to the offer from Albion River, we engaged both financial and legal advisers throughout the year, which accounted for the fees paid to them. Recently, starting in Q4 and continuing in February of this year, we noted a 13G filing indicating that Albion no longer holds a position in Ducommun and has divested their entire stake. Therefore, we do not anticipate these expenses to persist in 2025.

Okay, great. That's a lot of sense. And I just had a quick follow-up related to defense exposure and programs. So, do you have any thoughts on those and potential changes for the better or worse as a result of those? Thanks.

Yes. Thank you for the question. I know it's top of mind for everyone. We don't really have a viewpoint right now. Again, we've mentioned earlier on the call, we feel we have a wide breadth of products that we make for defense. A lot of it is electronic warfare. A lot of it is things, cards, cabling, things that are important for missiles and missile defense, and we do feel good about all our programs. I mean, I did signal a year or two ago for the F-18, and that's the one program which we are winding down and most of that's already in the base. So, we feel good. But again, we're not we don't have any view as yet as far as on the Dodge side. We just have the DCO view.

Okay, great. Awesome. Thanks.

Thank you. One moment for our next question. Our next question comes from the line of Noah Poponak of Goldman Sachs.

I think there may be a connection issue, let's move forward.

Okay. I'm showing no further questions. I would now like to turn it back to Chairman, President, and CEO, Stephen Oswald, for closing remarks.

Okay. I want to thank everyone for joining us. I very much appreciate it. Again, I felt we had a very good quarter. I think we're well-positioned. I know there's lots of discussion about defense right now. Again, let me reiterate finally that our view is, at least from our product line, we feel very good about this year. So, we'll have to see what we that's our view. We feel strongly about our Vision 2027 and look forward to speaking with you after the first quarter. So, thank you again for your support, and have a great and safe day.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.