Ladies and gentlemen, thank you for standing by. Welcome to the First Quarter Earnings Call of Albany International. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer section. Instructions will be given at that time. At the request of Albany International, this conference call on Friday, May 5 2017 will be webcast and recorded. I would now like to turn the conference over to Chief Financial Officer and Treasurer, John Cozzolino, for introductory comments. Please go ahead.

Thank you, operator, and good morning everyone. As a reminder for those listening on the call, please refer to our detailed press release issued last night regarding our quarterly financial results, with particular reference to the Safe Harbor notice contained in the text of the release about our forward-looking statements and the use of certain non-GAAP financial measures and associated reconciliation of GAAP. And for purposes of this conference call, those same statements also apply to our verbal remarks this morning. And for a full discussion, please refer to that earnings release, as well as our SEC filings, including our 10-K. Now I will turn the call over to Joe Morone, our Chief Executive Officer, who will provide some opening remarks. Joe?

Thanks, John. Good morning, everyone and welcome to Albany’s Q1 2017 earnings call. As usual, I'll summarize the quarter, John will then go into more detail, I'll follow with our outlook and we'll close with Q&A. In Q1, 2017, both businesses continued to perform well and in line with our short and long-term expectations and objectives. Machine Clothing once again generated strong income and strong new product performance and Albany Engineered Composites once again generated strong growth, executed well on each of its key programs and continued to position itself for both improved profitability and additional new business. In Machine Clothing, sales were essentially flat both sequentially and in comparison to Q1 2016. There were no significant deviations from recent market trends during the quarter, once again, we offset a significant decline in publication grade sales with incremental gains in the other grades, most notably during Q1 in tissues. By the end of Q1, the publication grades accounted for 23% of total sales, compared to 25%, a year ago, 27%, two years ago, and 30% three years ago. Our new product performance continued to be strong across all product lines, especially in tissues. And while competitive pricing pressure remained intense, particularly in Europe and Asia, the top-line impact was offset by volume growth in Asia. Machine Clothing profitability was once again strong in Q1 2017 due to incremental productivity gains and good plant utilization. Gross margin, segment net income and adjusted EBITDA were all in line with very strong comps from Q1 2016. Meanwhile AEC continued on its growth trajectory. Q1 sales grew to $56 million from $27 million in Q1 2016 which was the last quarter before we acquired our Salt Lake City division. Excluding Salt Lake, Q1 sales grew by 34%, compared to Q1 2016. The year began…

Thank you, Joe. I’d like to refer you to our Q4 financial performance slides. Starting with Slide 3, net sales by segment total company net sales in Q1 increased 15.6%, compared to Q1, 2016, excluding currency effects, net sales increased 17% compared to last year. MC net sales in Q1 excluding currency effects were essentially flat compared to Q1 2016. Q1 is the second consecutive quarter of flat year-over-year sales because, as Joe noted, declines in publication sales were offset by incremental increases in other grades. AEC net sales in Q1 increased by just over $29 million, that’s about $20 million of that increase due to the Salt Lake City acquisition. The remainder of the increase in AEC sales was due to growth in the LEAP program. Turning to Slide 4, total company gross margin as a percentage of net sales was 38.1% in Q1, compared to 42.1% in Q1, 2016. The lower gross margin percent reflects the change in the business mix due to higher AEC sales. This trend as you can see on the chart, started in Q2 2016 and we continue to expect this trend to continue as AEC growth accelerates over the next few years. MC gross profit margin in Q1 was very good at 48.5% of net sales and somewhat better within the last four quarters. AEC gross profit margin increased to 12.1% of net sales in Q1 2017, compared to 11.5% of net sales in the comparable period last year. Slide 5 shows net income and adjusted EBITDA by segment for the quarter. Adjusted EBITDA for the total company in Q1 2017 was $43.5 million, compared to $41.3 million in Q1 last year. MC adjusted EBITDA was $48.3 million in the quarter, compared to $49 million in Q1 last year. AEC adjusted EBITDA improved…

Thanks, John. Turning briefly to our outlook, in Machine Clothing, the market appears stable and we entered Q2 with a good order backlog. So even though we have been anticipating and are seeing some inflationary pressures, Machine Clothing remains on track toward its full year objective of annual Adjusted EBITDA in the middle of that $180 million to $195 million range that we have discussed on numerous occasions. For AEC, again, we expect – we continue to expect full year 2017 revenue to be in the 25% to 35% range higher than full year 2016. And for adjusted EBITDA as a percentage of sales to slowly improve. And for the longer term, the intensity of new business development activity in Q1 suggests that there is more upside than downside risk to our current estimate of $450 million to $500 million of revenue by 2020, and that there is considerable potential for substantial growth beyond 2020 as well. In sum, this is a good quarter for both businesses as MC generated strong adjusted EBITDA, and AEC’s strong growth and again both businesses remain firmly on track toward both their short and long-term goals. And with that’s let’s go to any questions. Kevin?

[Operator Instructions] And the first question is from the line of John Franzreb of Sidoti & Company. Please go ahead.

Good morning, Joe and John.

Good morning, John.

I’d like to start with the paper mix, as you kind of referenced this in your prepared remarks, you gave us with the publication grades were, you kind of talked to what’s the mix is to the other grades A, and B, can you talk, I think, we are going to kind of bottom out in the degradation of the publication market, or it’s something I think you may want to exit and close it?

If you take all of the – let’s take the first question which is the mix, if I understood it correctly, the size packaging. And it’s about 35% of our sales, if you take tissue, pulp, all of the non-wovens and – related grades like corrugated belts it’s about 35% stable to growing, all of the pieces of that have some elements of growth in the marketplace. See, if you assume that demand for those grades in aggregate and really the demand for packaging as well, they are G&P type of demand growth out in the marketplace. That tends to translate to slightly lower demand for Machine Clothing growth, but if you figure and you aggregate all of those non-publication grades are growing on the order of 1% from a Machine Clothing consumption. That’s a pretty good estimate. We – there are some, as for decline in publication there are some analysts out there who expect some sort of flattening, we have seen no sign of that at all that if you look at Q1, for example, there is – some people argue that where most of the shrinkage in magazine consumption has already taken place and that there is going to be some plateau of consumption of business magazines or fashion magazines. But, if you take Q1, look at the trends in advertising and magazines we are down another 16% which is a pretty good predictor of where that industry is going. So, our model does not assume a flattening, it assumes at some point there is going to be a slowdown in the growth, in the shrinkage, but just because it’s becoming such a small piece of the remainder. For us, we are just assuming 5% to 10% declines in publications offset by flat to 1% growth in the other grades. That’s what gets us to more or less volume stability over time, gradual diminution of the top-line decline being replaced by more or less flat top-line.

Okay, got it. And switching over to EC, you have some restructuring charges as of the quarter you just reported, but you also said there is some in the coming quarter. Could you just provide some color as to what these charges before? When do you expect to realize the benefits of these actions? And numerically, how much we are talking about and last date going forward?

Hi, John, I think the right way to think about this is to go back to our objectives for this business which is to get EBITDA margin from 8% at the end of the last year to 18% to 20% by 2020. And that improvement will be driven by a combination of learning curve efficiencies as we ramp the program which be reflected in greater labor and material productivity. Fixed cost leverage both at the gross margin level and in SG&A plus some synergies associated with combining these two organizations. And if you model out a steady ramp in EBITDA margin between now and 2020 and just spread it out evenly and assume all of those forms of productivity improvements are gradually being implemented, you get, I think you get pretty close to what we are expecting. And these steps in Salt Lake are one of the planned measures along the steady improvement journey that we are anticipating and confident about over the next four years.

Okay, all right. But then, how about, in regards to the ramp as of to revenue, I believe you said that’s flat year-over-year, but you are expecting their legacy program to grow significantly in this year. If you talk about which programs are going to hit first and what kinds of growth rates you are agreeing to just that echoes it?

The Boeing fuselage frame program is going through the steepest ramp right now. And the following behind that in terms of ramp is the JSF program that’s starting to ramp a little later than the Boeing program and then among the legacy programs, the missile program at Lockheed JASSM is also showing some growth. The CH53-K program which went all of a sudden done will be the largest program with a big ramp doesn’t really ramp until the end of the decade. So, it’s the sequence is, Boeing, JSF, and then CH53-K. But we are seeing also in the important legacy program the missiles, we are seeing some growth potential there as well. We are not ready at this point to give you a more precise growth estimate other than the aggregate 25% to 35%, but, first approximation of both LEAP and Salt Lake, look like they are growing at that pace.

One last question and I’ll get back into queue. You talked about your optimism for informal request for proposals.

Yes.

You didn’t mention where is it coming from. Was it coming from the Albany let’s call it the legacy business, versus the Albany business tied to LEAP or is the SLC side of the business. Could you kind of tell us where – what’s this underlying demand so far that comes?

Yes, this is – I think you could tell us on the tone of my comments, this is a pretty big deal and it’s – I would say, it’s one of the biggest surprises of the acquisition. We knew the acquisition would elevate our profile in the industry, because it took us from primarily in a Saffran shop with some good programs in Rolls-Royce. So mainly in engine shop to really now one of the prominent suppliers in the composites industry. And, we knew that we were well positioned on the important growth platforms. But we didn’t fully anticipate was that the timing of that acquisition lined up really well with the timing at which a number of our major OEMs were getting ready for their own ramps and trying to put their own supply chains in order. And the net result is coupled with - their need to ramp coupled with our increasing visibility coupled with outstanding execution at our Boerne, in Texas, plus really strong execution on each of the key programs in Salt Lake plus high visibility and good execution in LEAP. All of those together, have just increased our profile with all of our key OEMS. So whether it’s Boeing, whether it’s Lockheed, whether it’s Sikorsky, whether it’s GE, whether it’s Saffran, it’s that kind of conversions of they are focused on supply chain and we are executing. That’s what’s really triggered these conversations.

Okay. Thanks, Joe, I’ll get back in queue.

We keep saying that risk of this business is execution and it did all for growth that this is – this work as we execute and that’s why we just put so much emphasis on operational execution.

Thank you.

And next question is from the line of Steve Levenson, Big Rock Research. Please go ahead.

Thanks, good morning, Joe and John.

Hey, Steve.

In your remarks and in the press release you mentioned there is more upside than downside related to LEAP and I am wondering if that’s a richer mix of 737 MAX and A-320 NEO? Would you expect the contribution from the Chinese Comac C919, which went for the first time this morning?

Yes, that was significant. You know, we – LEAP is the sole source on Comac, sole source on the MAX which is also, according to the COO of Boeing entering into service, the first engine deliveries are this month and then of course, LEAP is being generated, is being delivered as probably flying on about 45 aircrafts now, perhaps more on the NEO side. I didn’t mean to suggest that there is more upside on LEAP per se, as this is just really strong execution on the LEAP. We are ramping too, no deviation from CFM and on their expectation to ramp to 2000 engines per year from this year a target of 450 to 500. The one really interesting or a couple of interesting pieces out there that suggests there is still upward market pressure is, Boeing’s CEO on their earnings call made it clear that they are overbooked at their current production, planned production rates ramping to 57 planes per month and that there is enough market demand out there to go above 57 planes a month. There is also clearly pressure on the Airbus side given the problems with the gear turbo fan is having clear pressure on the Airbus side for CFM to deliver more engines. CFM to its credit has been resisting all pressures from Boeing and Airbus today to ramp up production because, they feel they supply rightly, their supply chain is pushed to the limit. Now and what is distinguishing CFM in the marketplace and LEAP in the marketplace is to actually delivering what they have promised. So you don’t want to push their supply chain too soon to go to higher rates because the last time they want to do is compromise their validation of their well earned reputation that when they promise something, they deliver it.

Okay, thanks. Just got here a couple more quick questions. If it’s not from volume, then can you comment a little bit, and I know, you can’t go into index, but on you are seeing out of your factory on the production of the blades?

We are really happy with the yields and if you look at any historical standard of composite parts being introduced on to the engine, and we are talking rotating parts, these aren’t secondary parts, these are primary parts. This is a real success story. Now, we still have more improvements to go and on a daily basis, we are working with our customer on those improvements, but this is a good story and we are delighted with the progress so far. Let’s say we are right on track for what we need to do to hit the ramp.

Okay, thanks. And you talked about CFM, with existing pressure, do you see any weak links? Do you hear anything about weak links in the supply chain that could constrain the production ramp at all?

Well, no. But the way that translates to us would be – are we seeing any diminution of pressure to ramps at a breathtaking speed and the answer is no, we are not. So our two datapoints are number one, we are watching CFM’s customers as it takes for more output and on the other hand we are feeling – we are not feeling any diminution of pressure for us to meet the targets that we’ve been handed.

Got it. Thank you. One other question related to LEAP is, there has been some chatter in a few trade journal articles about Boeing and the thinking on a mid-size aircraft in the CFM is beginning to think about the engine that it could supply which they said is not a LEAP, but I would imagine is some derivation from the LEAP. Would you expect continuous composite fan blades in case it’s really the more material in a new engine would compatible with playing that size?

Well, it does feel soon, you’ve seen this a number of times already, but there – we are clearly in the multi-dimensional chess, the stage of the multi-dimensional chess game now where everybody is positioning against everybody else. So clearly Boeing is trying to position against itself against Airbus for that gap in the market. I think it would be on the stake and I’ll underestimate the impact that Comac’s emergence it is having in Boeing’s thinking as well, it’s not just about Airbus. And like, so that’s number one, number two, it’s clear that Boeing is trying to when emphasizing the development cost associated with its business plans, it’s clear it’s trying to signal to its suppliers both engine and airframes that they expect if you are going to play on the new middle market aircrafts, so you are going to have to pay part of the development cost and it was interesting that Saffran’s CEO clearly up the entity on his earnings call by saying yes, we are interested, yes, we are in, yes, we are talking to Boeing about this. Yes, it fits within the CFM agreement. All I can tell you about whether there will be composites on that new engine and what that new engine will look like is, Saffran has in CFM is responsible for the fan module and the low pressured turbine. It has made a big bet on 3D woven composites for its future architectures and the fan module. So if Boeing pulls the trigger and CFM wins or the one if it’s going to be two engines prior, those one of the engine suppliers, any advanced composites on that engine has to go through any 3D woven composites on that engine has to go through Albany Saffran Composite have to be manufactured in our division.

Got it. Sounds great, thanks. And one last question related to Machine Clothing. Since you still see declines in the publishing grade, do you think you’ll get to the point, where the demand for packaging and tissue exceeds the decline in publishing grades such that there will be little growth in that business?

We think it’s – we really like this business. It’s a great business. The long lived installed base generates a lot of cash because of the value created for the customers, but we just think it’s a track run just to think if this is a growth business. The other grades will have some growth, but publication will continue to decline, but more importantly even where the grades have growth, there is enough innovation going on in our industry that the lives of our products extend just enough with innovation to wipe out whatever incremental growth there might be from the growth in those grades. So, we are very careful to always tell investors think of this as a flat adjusted EBITDA business in that range of $180 million to $195 million and a piece of that flat going forward is stable volume, stable top-line or stabilizing top-line. We just think it’s a trap to thing that’s going to grow. And if it does, that’s upside.

Okay, appreciate the – all the details. Thanks very much.

Thanks, Steve.

[Operator Instructions] And we do have a question from the line of John Franzreb with Sidoti & Company. Please go ahead.

Just looking with the P&C side of the business, Joe. Can you talk a little bit about the competitive landscape? Are there any sizable material contracts up for bid this year and what your take is on industry path to be right now and the pricing environment?

We are not seeing anything right now that would alter the dynamics of the industry. I mean, it’s never say never, but right now, it’s all of the patterns that we’ve seen over the years from publication being displaced by digital media, packaging tissue and pulp and non-wovens growing to offset that. Long-term growth in paper production in Asia, all those trends continue. The pricing pressures we think are heavily driven by industry structure both in our customer and in our Machine Clothing industry. So, downstream in those geographies, where there is overcapacity in our customer base that translates to pricing pressure on our industry and then in our industry, where there is overcapacity that in turn translates into pricing pressure to us and our competitors. When those two line up together, overcapacity in our customer base plus overcapacity in our industry, the pricing pressure was most intense. So, that’s Europe. Asia, there is strong pricing pressure, but it’s at least as I tried to allude to in my commentary, it’s a least somewhat mitigated by volume growth in Asia, particularly in packaging. There is less – the paper industry is more consolidated in the Americas. The Machine Clothing industry is more consolidated in the Americas. So, while it’s really a struggle to get any kind of price relief in the Americas, there isn’t the same – price pressure that there is in Europe and Asia. None of that has changed. That’s where we’ve been really since we came out of the recession and that’s just the way of life. We don’t see anything right now that would alter that dynamic either for the good or the bad.

Okay and your take on with capacity in the industry, if you could?

I think there is – the industry has – our industry, Machine Clothing with overcapacity in Europe, with a lot of competition in Asia, it’s hard to say overcapacity, because there is so much growth, but there is – there are lot of competitors there including emerging competitors. So, and that’s the predictor of pricing pressure.

Okay, got it. And can you just update us on the composites initiatives as the automotive market obviously spoke about it sometime maybe an overview of some people – want to be helpful and where we stand?

Yes, so we keep talking about these three categories of growth opportunity and so, new business potential on existing aerospace platforms, on new aerospace platforms, and then, via diversification. The surprise, as I mentioned before, as I’ve expressed in the last couple of quarters that how much potential there is on the first of those, because we would have expected that to be pretty much washed out and it’s not. There is a lot of growth potential there. Steve, in his questions pointed to what we see as the single biggest and potentially very large opportunity in the second category which is the potential for Boeing new middle of market aircraft and that is when you get a big new commercial platform that you get the opportunities, waves of opportunities as well as there is a scramble among suppliers to position themselves when that occurs. And there will be opportunities both on the airframe and on the engine. On the diversification, we keep seeing opportunities to diversify across a diversity of fields from downward drilling, body armor to applications in the space, but we keep coming back to the same reality, nothing is as big a market for light weight impact resistant composites to think of a side impact being in a car, if you can make that lighter weight, but still impact resistant just the way of fan blades. Our fan blades can resist a bird’s dry kit. You can see the potential application for the same kind of composites that we make on the automotive – in the automotive industry. The challenge in automotive – we’ve discussed before is it has to get to a significantly different price point in order to break through a serious way. So, it’s the R&D we’ve been doing over the last two…

Got it. Thank you, Joe.

All right. The next question is from the line of Greg Vasse, Times Square Capital. Please go ahead.

Hey, Greg.

Good morning, Joe, and John. How are you guys doing?

Good, how are you?

Good, good. Hey, are you guys willing to, I guess, provide any color on the progression of AEC sales through the quarter? It seems like, comps might get a little bit more difficult by the fourth quarter and additionally should we see revenue growth remain fairly linear from 2017 to 2018? Or should we start to decelerate into the end of 2018 as we start to comp some larger numbers? Thanks.

Well, what we’ve said so far is, 25% to 35% full year growth between 2016 and 2017 and then another 25% to 35% full year growth from 2017 to 2018. And there should be – we haven’t guided, but that doesn’t get you the $450 million to $500 million with upside by 2020. So there is clearly – so if you take those two numbers, and then project out to 2020, you will see there is still more growth there. So, there will still be positive comps. We are – it’s a little difficult to math this business on year-over-year quarterly comps. We think it’s a much more reliable to look at full year comparisons 2016 versus 2017 versus 2018, because the actual flow through the year can be a little bit lumpy. As we’ve seen in the past, Q4 has been a big quarter and I think that will become less of a factor and really just the demands on the particular timing demands on the ramps will become more of a factor that drives the sequential projection. For this year, clearly, if we are reiterating our 25% to 35% growth guidance, and we had $56 million of sales in Q1, we are going to have to be – to hit our guidance, we are going to have to be in the $65 million to $70 plus million per quarter range for the rest of the year and yes we will hit that guidance. I reiterated that guidance several times today, so yes, that’s we do expect to see a step-up from Q1.

Great, great. And given the AEC, what really had it stride until the end of the decade, when show up its full production valuing the segment is a little bit more of a DCF exercise at this point. So, as such, what kind of EBITDA to free cash flow conversion should we be computing for full production?

Well, there are two – if you think about the free cash flow, I think you can take our guidance we’ve given on EBITDA to map out where EBITDA comes out in 2020. We’ve given you a range for Machine Clothing and we’ve said 18% to 20% EBITDA margins on $450 million to $500 million in sales by 2020. So the variables to work with are essentially CapEx and changes in working capital, but the big one is CapEx. And unless we are seeing big waves of new investments as new programs come on, we are sticking with our estimate of average CapEx between 2016 and 2020 total company of $80 million. And 2017 and 2018, it will be above $80 million, 2019 and 2020, it should be below $80 million. But just be conservative, take our projections of CapEx – of EBITDA for 2020, subtract out $80 million of CapEx, make some interest will be coming down, the taxes will be going up, dividends will probably be up a little bit, if the Board wants to go there. So, you put all that together, there should be substantial free cash after dividends, after CapEx, after taxes in 2020, if we hit our targets, if we perform.

Excellent, great color guys. Last one for me. We are starting to reach a nice level of contract diversity within AEC and given the – still a fair amount of applications that can switch to composites in the future and you have a nice runway to higher content per plane or whatever it is that you’ll be putting the composites on. Would you be strategically disadvantaging yourself if you ever were to split these two businesses in the medium-term and lose that PMC cash generation that could be rolled in the AEC development? So I am just wondering, should we think about if the opportunity is or even richer for you would that maybe prolong the amount of time that would make sense for both of your segments to stay together as a unified business, maybe just provide some color on that. Thanks.

Greg, first of all thanks for the – thanks for getting on the call and asking the questions. But, as John and I have tried to describe to – pretty much every investor we talk to over time is, that question about is a future structure of the company is premature for now at some point if you can model – if you do your models, it’s pretty clear by the end of the decade, AEC will be cash flow positive and ready to standalone and our Board will view those questions as it constantly does through the lens of how do you maximize the net present value of future shareholder returns. We are all shareholders, that’s how we think about the question. And you can’t judge today where everything will play out in 2020 or 2019 or 2021 or whenever it is, but the two key points that are very clear in our minds, Machine Clothing is a great business. It is a long lived business with – where you have an opportunity to generate serious value for your customers which translates into recurring cash flow. And a second concept that is firmly embedded in our heads is, we believe outside growth compared to market is the best pathway to long-term shareholder value. And so the more pressure, the more opportunity we see for growth on the AEC side because a better the marriage between the two companies – the two businesses feels. And I am not trying to prejudge where we go, or how the Board would decide out there, but, this we like the cash flow and grow combination and if you can sustain one and accelerate growth in the other, that’s so far has led to really good returns for our shareholders over the last five years.

Excellent. Take care guys. Thanks.

Thanks, Greg.

Thank you. The next question is from the line of Jim Foung at Gabelli. Please go ahead.

Hi, good morning.

Hey, Jim.

Came into the call late here. So apologize if the question has been asked. But, Joe, I was just wondering, if you could just talk a little bit about the LEAP engines forecast has CFM kind of many changes to the engine forecast expect to go by in 2017 and 2018?

We talked a little bit about it, Jim. But, in essence, they have not changed.

Okay.

It’s still 500 this year, I think 1100 next year.

Right.

Then 1800 and 2000 plus. What’s interesting is, that there is market pressure to do more.

Right.

And it’s coming from both sides. That’s coming from Boeing which is saying they are overbooked at their current ramp rate and could support more than 57 planes a month by 2019, 2020. And Airbus, which has customers who are – needs - who are not being satisfied with the competitor to LEAP and so there is pressure there for more engines. But CFM, in our view to their credit have resisted those pressures because they know that this ramp is an unprecedented ramp and so their supply chain is already stretched. CFM’s reputation is heavily built around reliability, delivery of performance that they promise. Their engines are in fact being delivered on-time and are hitting, the LEAP engines are hitting performance targets. So, it’s more important to CFM to meet their commitments, meet their obligations, preserve their reputation then to stretch the supply chain to a point where they start running into trouble. But, that said, all of the market pressures are in the right direction right now. But no, there hasn’t been any change to the ramp.

So that’s a good problem for…

Yes, it’s a good problem.

For you.

Yes.

And could you just break out that $56 million in AEC sales? How much of that was just LEAP versus everything else?

$20 million was Salt Lake. 10-ish was our legacy business. The rest was 25-ish with LEAP.

Okay, right. Okay, and then, today there is an article on China…

Comac.

Yes, potentially flying the Comac C919.

Yes.

I assume that’s what engine they are using, if they are using the LEAP or CFM. I think they are using…

They are using LEAP.

The LEAP, okay.

They are using LEAP. LEAP is the exclusive supplier for the C919.

Oh, okay.

Which had its flight test today.

Right, right.

So, LEAP is exclusive on Comac, exclusive on the Boeing MAX and shares the NEO with Pratt.

So that’s another pause. I mean, did CFM factor in kind of engines for the Comac? Okay.

Yes, it is.

Okay, I mean, it remains to be seen how if they were to keep their schedule, I think entering to service is like, they talk about mix share or is it something or?

Yes, and Jim, I think the more important impact of the C 919, since CFM has built its engine ramp projections with the C 919 in mind, the more important variable to watch here is, if the C 919 starts succeeding and start pulling share from Boeing and Airbus, you will see reaction from Boeing and Airbus. And the reaction is going to be in the form – I think history teaches is in the form of innovation more pressure to introduce performance improvements on their engines or on their planes, more pressure to move forward with next generation single line – for example sooner than they had anticipated. That kind of competitive pressure for a supplier like us who got a differentiated product usually leads to good things. That creates more demand for innovation, for higher performance, so.

It’s another best way…

That will play out over next decade.

Are you guys using opportunity to bid on new airplanes, I mean, should take a look.

That’s to the extent that C 919 becomes a disruptor enforces Airbus and Boeing to do more than they wanted, yes.

If they became just a disruptor in China, would you most likely – what will happen versus the rest of the world? Is that enough of a change for Boeing and Airbus to be more in…

The Chinese market is the most important…

Right.

Growth market in the aerospace industry.

Right.

Than any other market, but if you look at Boeing’s and Airbus’s projections for the next 20 years of demand for aircrafts, there is replacements of existing aircraft and then there is passenger flight mile growth. And a lot of that growth and therefore a lot of the growth and demand is in Asia in general and China in particular. So, yes, and they had modeled in, in their forecast the expectation that Comac would penetrate the markets with a certain amount if Comac overperforms and starts disrupting that market, yes, that’s something to watch in - with the dynamics of the industry next decade very carefully.

Right, okay. And then just last one for me, just on the CH53-K helicopter. So, that’s been proved – so they’ve got funding on that and just wondering, you talk about the long-term opportunity, but is there any near-term opportunity, like any impact to revenues in this year or next year?

No, that was – we’ve built into our estimate of $450 million to $500 million with upside in 2020, that assume the ramp rate that for the CH53-K that the Marines and Sikorsky have been talking about which is, but, one a year going to, three or four a year by 2020 getting to its full ramp up in 2023, 2024, and 2025. So, our investor package estimates $35 million to $45 million of revenue per year by 2020 growing to a lot more than that. And once it’s fully ramped and this year, that program will probably be closer to 10-ish million, $7 million that will ramp from this year to 2020 and then from 2020 to 2024, 2025.

Great, okay. Thanks so much. That’s all I had.

Thank you, Jim. Thank you for the questions.

Thank you. At this time, we have no further questions in queue.

Well, thank you everyone for participating in the call and we really appreciate the questions during the call as well and look forward to seeing all of you between now and the next call and thanks again.