Astronics Corporation (ATRO) Q4 2013 Earnings Report, Transcript and Summary

Greetings, and welcome to the Astronics Corporation Fourth Quarter and Year-end 2013 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Deborah Pawlowski, Investor Relations for Astronics Corporation. Thank you, you may begin.

Thank you, Danielle, and good morning, everyone. We certainly appreciate your time today and your interest in Astronics. On the call is Peter Gundermann, Astronics' President and CEO; Dave Burney, Chief Financial Officer; and Mark Peabody, Executive Vice President. Pete will first go through his planned remarks and then we'll open the call for questions and answers. If you don't have the news release that was sent out this morning, then we do have it available on our website at www.astronics.com. As you are aware, we may make some forward-looking statements during the formal presentation and the question-and-answer portion of this teleconference. These statements apply to future events that are subject to risks and uncertainties, as well as other factors that could cause the actual results to differ materially from where we are today. These factors are outlined in earnings release, as well as in documents filed by the company with the Securities and Exchange Commission. They can be found at our website or at www.sec.gov. With that, let me turn the call over to Pete. Peter?

Thanks, Debbie. Good morning, everybody. We will talk through our fourth quarter and 2013 final results. We'll give a preview to 2014 and obviously these are pretty exciting times for our company. We're making some big steps, and we think beginning to experience some really good progress. We hope you share our enthusiasm as we go through these topics. The fourth quarter of 2013 saw us complete a couple of planned acquisitions, which we've had in the works for a while, that of AeroSat Corporation on October 1 and PGA in early December. The contribution of these 2 companies, in addition to PECO, which we acquired in July of 2013, made our fourth quarter look really good on the top end, at least. Revenue was great. There are some things that are easy to see. Revenue is one of them. We set a new record of $105.5 million, that's a 56% increase over the comparative period of Q4 2012. If you strip out the acquisitions and their contribution to revenue in the fourth quarter, organically, our growth was about 21% -- 21.2% over the comparative period of the final quarter of 2012. So pretty strong growth, both organically and through acquisition. Bookings also were very strong. We set a new record there, too, of $109 million, just shy of $109 million, and our ending backlog as we entered 2014 was also at an all-time record of $214 million. The margin profile is a little more bit complicated to understand. Our reported numbers per GAAP accounting treatment, our fourth quarter gross profit was $25.2 million, that's a gross margin of 23.9%, which is somewhat lower than what our 2-year running average is. If you were to go back over the last 2 years and take a mathematical average of our gross margin percent, you'd find that it was 26.1%. So 23.9% in Q4 would appear on its surface to be lower than what our average has been of 26.1%. Similarly, at the bottom line, net income, we reported $6.4 million of profit with -- which is a net margin of 6.1%. And again, if you were to go back over the last 8 quarters and do a mathematical average, you'd find that we averaged 8.2%. So 6.1% reported in Q4 would appear to be lower than our 8.2% moving average. But the big thing that you got to keep in mind in light of our acquisition efforts is the treatment that purchase accounting imposes on the fair market valuation and write up, usually, of inventory acquired. So you buy a company, the inventory gets bumped up to a fair market value, which means that as you shift that inventory, you, as the acquirer, make much less money than you would on a normal ongoing state. And we try to break this out for you so you can gauge our performance in light of this purchase accounting impact. In Q4, the expense that we faced for this purchase accounting treatment was about $3.5 million or about 3.3% of sales, which comes right out of gross margin as the acquired inventory is sold. These costs are temporary and we expect them to flush through by the end of the first quarter of 2014 for our 2013 acquisitions. In any event, taking this $3.5 million increased expense into account in the fourth quarter, if you were to back it out, you'd find gross margins would've been 27.2%, which compares favorably to our 2-year average of 26.1%. And you'd find that our net income at our effective tax rate would have been about $8.9 million or 8.4% of sales above our 2-year average of 8.2% of sales. So our GAAP margins or profitability has definitely has been affected by this purchase accounting treatment. Our earnings per share without the $3.5 million inventory markup would have been about $0.48 per share in the fourth quarter instead of the reported $0.34 a share. So the expensing of the inventory cost us about $0.14 per diluted share. Again, we expect going forward, we'll talk about 2014 in a few minutes, but we expect another $2.6 million of this type of expense to come in the first quarter, and we expect after that basically to be done with this kind of flushing of inventory from our 2013 acquisitions. There are a couple of other things worth mentioning going on in the fourth quarter. The first is that we had a series of little adjustments in terms of customer reschedules in or out and some mix changes that were not ideal. So even compared to the third quarter, some of you are going to compare us to the third quarter, which was a particularly strong quarter in terms of profitability and ask us why the drop off. We're going to answer, just so you know in advance, that it's basically just a mix change and little schedule changes, and it's nothing for us to get too concerned about. We also, in the fourth quarter, for those who are interested, had some pretty substantial transaction related costs associated with the acquisitions. We estimate those to be about $0.5 million for the quarter. A couple of other items to point out on our fourth quarter income statement. We do not publish EBITDA analysis, but we know that many people do. And obviously, central to those kinds of analyses, are -- our interest expense in the fourth quarter was about $2 million, which is up substantially from where we were in the comparative quarter at the end of 2012 when we're about $270,000. Obviously, as long as we're carrying that, we're going to have that interest expense. But when we -- when or if we retire that debt, that interest expense will come down. And in the fourth quarter, our depreciation and amortization expense was up substantially also about $4.5 million, up from about $1.95 million in the fourth quarter of 2012. So there are different ways to do EBITDA analysis, we understand that. But we believe that pretty much no matter how you do it, the margin strength of the business as it unfolds becomes pretty evident. Looking at 2013 in summary. Our year final revenue numbers were $340 million, just shy. That's up 27%, 28% from where we were in 2012. Organically, excluding the acquisitions, we grew at just under 19% for the year. Net income for the year was $27.3 million or 8% of sales. $1.49 per diluted share, that compares favorably to 2012 net income of $21.9 million, 8.2% of sales, and about $0.20 per diluted share. Again, the fair market value writeup of inventory cost us in the year, net income would have been about $31.1 million or $1.69 per share as opposed to $1.49 per share in the normal ongoing state. Our engineering and development expenses for the year came in at $52.8 million, up from $45 million in 2012. Kind of interesting to note that our 2013 E&D expenses were about 15.5% of sales, that's down from 16.9% in 2012 and we'll see in a minute, I think it's a reasonable assumption that, that percentage will continue to drop even as the absolute number rises in 2014. Year-to-date bookings in 2013 were $357 million, that's about 5.2% above sales. And our backlog, as I said earlier, at the end of the year, was $214 million, a big step up from our Q3 backlog where we ended at about $168 million. Our Aerospace segment continues to dominate our business. Year-to-date, $330 million in revenue, up 30% from 2012 and 97% of our total. Some numbers that people are usually interested in, Panasonic, our largest customer, was $30.1 million in revenue in Q4. Our other listed customer was Boeing where revenues were about $22.4 million in Q4. Our in-seat power or Cabin Electronics sales, which we no longer break out, were about $45.3 million in the fourth quarter and that makes it about $164 million for the year, up about 15% over where we were in 2012. Our Test Systems segment year-to-date at the end of the year ended about $9.4 million, 2.8% of our total sales, and down from $11.5 million in 2012. It was again not profitable at that level with an operating loss of about $3.8 million year-to-date. Bookings were $12.9 million and backlog at $7.1 million. Our Test Systems segment, we expect, will get a very lively injection with our planned acquisition of the EADS test and services business that we talked about in our last call. We, as a preview, are thinking that, that acquisition will close towards the very end of this month, maybe the beginning of March. Our balance sheet, we feel, ended the year at a pretty healthy state. Cash was about $55 million. Total debt was about $200 million for a net debt of about $145 million, $146 million. We feel very adequately capitalized for the task that's ahead of us. So looking forward, as I mentioned, we had strong bookings in the second half of 2013 and we ended the year with a pretty strong backlog of $214 million. We are initially establishing guidance revenue-wise for 2014 in the range of $585 million to $640 million. Our base business, as it exists today, we expect to produce somewhere in the neighborhood of $485 million to $520 million, and we are expecting our EADS acquisition, when that happens, to contribute somewhere in the neighborhood of $100 million to $120 million. So the midpoint of the combined range would be somewhere about $612 million, that would be an increase of 80% over 2013. That's obviously a big bite to chew, but we are excited at the prospect and we feel pretty well prepared for it. There are some moving parts which could heavily influence that total. One is the closing date of the EADS acquisition. We are currently working through some, I guess, closing checklist items, for a lack of a better term. The one that is perhaps the least predictable is our Department of Justice Antitrust investigation, which is mandatory based on the size of this deal. We don't expect any problems there. But it's not a highly interactive process, to say the least. So we kind of sit on our hands and wait. We're expecting to hear something by the end of this month, could be any day. That's kind of a gating item. There are some other things that we're more in control of and a little bit more predictable, and we are working to a timeframe to have those wrapped up over the next week or 2. The other issue that could have a material impact on our 2014 performance will be a series of STC projects in place with our AeroSat operation. We expect that by the time we hold another conference call, we will have a number of those kind of through the process. There are 6 or 7 or those or 8 of those in work at the moment in various stages of complying with the FAA requirements and we believe that we're in a favorable position to start wrapping some of those up. If we don't, obviously, that would have a negative impact to our expectations for the year. Some other numbers, we expect capital expenditures to be somewhere in the $33 million to $37 million range for 2014. That's higher than we usually have in part, are largely due to a new building that we bought actually already this year in Portland, Oregon for our PECO operation. That's a facility that we'll be fitting out and moving into over the rest of this year, should have that move largely done by the end of this year. We're expecting our engineering and development expense, at least up front, to be somewhere in the $65 million to $69 million range, that excludes EADS. $65 million to $69 million would be somewhere around 10% or 11% of sales, which is substantially lower than our 2013 total where we ended up at 15.5% of sales. So we have been living for a number of years with pretty high engineering and development expenditures. I don't want to suggest today that we're fundamentally entering a new lower level of that type of activity. It may be turned out to be that way, but it may not. We will obviously keep you informed. But for the time being, for the best of our information, we expect that percentage to drop in 2014. For the first quarter, which we're halfway through at this point, we're expecting revenues of $130 million to $140 million. Again, that's assuming a closing date towards the end of this month for EADS and certain STC progress at AeroSat. And again, in the first quarter, we will have another $2.5 million expense of the inventory step up accounting process from our 2013 acquisitions. So once we get done through the first quarter, we won't face those charges anymore. Some of you may ask what we expect the inventory step up to charge to be with EADS going forward, and I think we will tell you that we don't know yet because we don't have the deal done, and we haven't gone through these allocation or purchase price exercise that is necessary before you get to those kind of numbers. So I think that ends my prepared remarks. We can open it up for questions at this point.

[Operator Instructions] Our first question comes from Tyler Hojo with Sidoti. Tyler Hojo - Sidoti & Company, LLC: Just I guess firstly, I want to talk about how your acquisitions are tracking, at least the ones that you've now closed on. And if I'm looking at it right, it looks like PECO probably came in towards the lower end of your previous guidance range. So just kind of curious if you could walk us through how they're tracking both from a top end earnings contribution standpoint.

Okay. Well, I think, Dave, I'll give you a shot at this in a minute. But I would answer that question a couple of different ways. From a strategic or cultural or kind of operational perspective, we're very pleased with all 3. I think that actually, probably, these fit in the integration opportunities that we're seeing and realizing are better than we even imagined. So on that level, after 6 months here, we're pretty excited. From a financial perspective, I think it's safe to say, they will say that if you net out the interest expense and the amortization expense and you mark up the inventory like we talked about, you allocate all those to the operations, they can contribute anything significant from a profit standpoint in the second half of 2013. We obviously expect that to change going forward. But I'd say, Tyler, at this point, we're pretty pleased. Dave, you want to cover that at all?

No. I think you hit the points that I would say, that from a top line perspective, I think that we're right in the ballpark of what we expected and from a bottom line as well. And that being -- basically no contribution from the acquired businesses as a result of the $5.5 million fair value inventory writeup to flush through and any additional amortization efforts. I'd say they're tracking pretty well. Tyler Hojo - Sidoti & Company, LLC: Okay, that sounds great. And then I guess just moving to something else. In regards to AeroSat, Pete, in your, I guess, prepared comments, you talked about just kind of the pipeline of supplemental-type certificates that are out there. Could you maybe elaborate on what aircraft models you have in the Q? And I guess, when you need to get those back in order to achieve your revenue target for AeroSat for 2014?

We would -- the current plan is based on getting some of those STCs granted as early as the end of March and pretty steadily on a regular basis through the second quarter and there are other projects that are scheduled even later than that. If we get to our next call and we haven't been talking or we can't talk about STCs being granted, then that would spell a little bit of trouble for our plan, at least in terms of the waiting of the quarters throughout the year. An obvious reminder is that we work pretty closely with Gogo in this exercise and the STCs in questions are actually not our STCs, they're their STCs. So we have to coordinate our communications with our customers as we usually do or always do. So I don't know exactly how these things are going to be communicated. But the working plan at this point is, we expect to have the PMA, the manufacturing authority, from those STCs beginning towards the end of the first quarter here. You asked about models. I guess the answer to that is pretty much everything. Whatever airplane Gogo's customers need to fly are the ones that we're working on. So it's a pretty wide range and I'm not sure is individually all that significant. Tyler Hojo - Sidoti & Company, LLC: Okay. That sounds good. And then, I guess just lastly. I mean, we've obviously heard some positive developments in regards to kind of narrow-body aircraft operators installing in-seat power. I guess I'm just curious, what kind of -- what you're hearing from your customers is kind of the pace of conversations picking up or just overall, how do you view kind of the momentum in that specific product line?

I think it hasn't changed and it continues to build and it continues to get strong. I think the same dynamics that have brought us to where we are, are continuing to carry us. And people are bringing more and more personal electronic devices on board and they want to be able to use them onboard with Wi-Fi and the other amenities that are increasingly available. And then very importantly, wanting to be able to get off the plane with a charged device. I mean, I don't think I'm unique, I carry 3 devices on board and when I get off, I need to have a full charged phone because it's going to tell me where I need to go. So I think the demand is continuing to build, and I fly a fair amount. I know you do too and I'm sure many other people on the phone do. And this is one of those products that you can see. As you look around, you see it more and more. So I think that, that momentum is continuing to develop and continuing to build. And I think upcoming in April, we have our biggest trade show of the year which is an interior specific trade show in Europe and that is one of those big measuring points where we get a chance to really talk to customers on a broad basis over a pretty condensed period of time. So we'll probably talk about that in our next call, too. I'm expecting we'll continue to see very positive things in the market.

Our next question comes from Dick Ryan with Dougherty. Richard A. Ryan - Dougherty & Company LLC, Research Division: Pete, can you -- just to stay on the AeroSat. The 747 didn't need the bird strike certification. Are you flying any 747s at this point?

Yes. That one's been granted. Richard A. Ryan - Dougherty & Company LLC, Research Division: Yes. How many are you on and what's kind of been the experience? Can you give us a sense?

I don't -- it's not many, Dick. I would say it's a handful. There are initial installations and trial tests. It could be as few as 2 or 3 or somewhere in that neighborhood, but we do have orders and we are building parts for those aircraft. Richard A. Ryan - Dougherty & Company LLC, Research Division: Okay. Any operational issues with the antenna?

No, works perfectly. Nothing major. I mean, you always -- it's a pretty complex assembly and you go through an initial installation like that and we can have things come up. But we're pretty, I think, encouraged with how it's been working. Richard A. Ryan - Dougherty & Company LLC, Research Division: Okay. Outside of Gogo, can you talk maybe about potential opportunities, whether that's Business Jet or -- and then maybe if you refresh my memory here, can you work with anybody else on KU Band or is that strictly with Gogo and as an extension, are you doing anything on the KU Band side?

It is not an exclusive arrangement with Gogo. One of the pursuits, which we're pretty excited about is moving more into the VVIP market, which is -- I think we put a press release out there about a service that we're offering with a partner, Harris CapRock, which is a company that operates KU Band satellites around the world. With the intent of being able to offer a subscription service to VVIP aircraft. VVIP is kind of the ultra, ultra high end Business Jet type of market for heads of state or people with -- when a Gulf Stream is too small, they want something bigger, so they buy a 737 or a 757 or even an A380, and they make it into their own corporate private aircraft. And they want to be able to fly not on a prescribed route necessarily, like the commercial airline, but they want to be able to fly anywhere in the world. Harris CapRock is a very good partner for us because they have a network that is in part designed to service the maritime industry, ships go everywhere, so they need satellite coverage everywhere. We are their entree into aerospace and they're allowing us to plug airplanes into their network and with that combination of our hardware and the Harris CapRock system, people can fly their airplanes from 1 out-of-the-way place to another out-of-the-way place and keep coverage for the most part all around world. So we are actively pursuing that and interestingly, [indiscernible] I'll use it to plug our newest acquisition here, PGA, is very active in cabins in-flight entertainment and cabin management for VVIP aircraft. So if someone is going to outfit, say, a [indiscernible] for corporate private aircraft travel, they will go through a design office or a modification company and they may end up with an Astronics PGA cabin management system and then an Astronics AeroSat connectivity system as part of that installation. We're in the early stages of coordinating our market efforts between PGA and AeroSat, but we're pretty excited about the potential there. Richard A. Ryan - Dougherty & Company LLC, Research Division: Okay. I noticed the PGA, I think their backlog was higher than I was thinking. Is any of the business in there yet or is it still -- are you still pursuing that there on the [indiscernible] yet?

Well, anything is in backlog. The way we count it is the firm order, but we haven't seen real -- we haven't won any programs based on the combination of marketing efforts there. That's something that we're still -- it's only been 2 months so we're just going to go in there. Richard A. Ryan - Dougherty & Company LLC, Research Division: Okay, okay. Maybe a question for Dave. The top line guidance with the Test business from EADS, can you give us a sense what E&D or SG&A might look like with EADS included in there, that Test business?

I think it's a little bit preliminary for that. While we have some historical information for EADS, I don't have it at my fingertips here. So I don't want to wing it on that one, Dick. Richard A. Ryan - Dougherty & Company LLC, Research Division: Okay. No problem. One last 1 for me then. In in-seat power typically or maybe historically, Panasonic's had a bigger quarter in their fiscal year end, so March. Do you anticipate that seasonality continuing this year?

I don't have a specific plan to answer for you, Dick, but I suppose it's reasonable to assume that you're right, their quarter does -- their year does end in March. It seems that often, we get a real strong first quarter from them. I think from our perspective, this year though, there's going to be so much happening as we go throughout the year that the impact of that seasonality, so to speak, will not be as pronounced as it has been in certain years in the past.

[Operator Instructions] Our next question comes from Kevin Ciabattoni with KeyBanc Capital Markets.

Just a couple of quick ones. Just start on the guidance for '14. For the first quarter, that $130 million to $140 million, does that include any of the Test Systems revenues at the low end? So that $130 million, does that assume that the deal doesn't close before quarter end or is there a revenue baked into that for Test Systems?

Well, there are some revenue baked into that. We would hope for March if we closed at the end of February. So that would obviously be included.

Okay. And then just a second one on the guidance. In terms of AeroSat, are you guys still expecting kind of the $20 million to $40 million range there? Have you been able to narrow that at all?

No, we haven't. And that is one of the big wildcards as we look out over 2014, what's the timing going to be with these STCs. And I guess I'll tell you my position on it at this point is that our year end -- our year expectations probably won't change a whole lot even if those certification dates slide a little bit, cause I think we'll build in advance and what we'll do is just end up with a disproportionate waiting towards the end of the year. Obviously, if the STC slides from March to November, that would be a little bit of a different deal. But if they slide from March to even June or July, I'm not sure that will affect us a whole lot for the year. But we'll report on that as we can.

Okay. And then looking at the Aerospace margin in the quarter, you did factor in your prepared remarks and you mentioned some mixed schedule impacts there. Are those going to have kind of a pull through impact on the first quarter and should we expect to see kind of a positive bump as you play catch up there?

Yes. I think the first quarter is going to be a strong quarter. We're going to have some purchasing wrinkles going through cleaning up our inventory flush through from 2013 acquisitions and the somewhat unknown impact of the EADS situation. But without those things, just looking at the acceleration and strength of the business, I'd expect our first quarter to be pretty solid.

Okay. You mentioned, I think, $500,000 of acquisition-related expenses in the fourth quarter. I assume those were expenses from the $3.5 million inventory step up. Were those related to 2013 acquisitions or were those tied -- that expense tied to the EADS acquisition and maybe give us some idea of what we can expect going forward from that line?

Dave, do you want to answer that one?

Sure. Yes, those are -- they are separate from the $3.5 million inventory value expense. They relate to things like consultants that we hired to do some due diligence, legal costs and other items of that nature.

For this acquisition?

Both for the PGA -- largely for the PGA acquisition and also a little bit for the Test acquisition, yes.

So can we expect more of that tied to the Test acquisition over the next quarter or 2?

Yes, there certainly will be as we did a fair amount of the legal work in January.

Okay, thanks. And then, Pete, are you guys seeing a change in kind of your level of direct bookings from the airlines as they start to retrofit those narrow-bodies or is still kind of early going for the IFE providers?

I think we are seeing a change. And I think if you look at the total size of the business and the percentage going through the IFE guys and the IFE -- the wide-body IFE oriented type of distribution system is still important to us, obviously, and the customers that we have in that market, including specifically Panasonic, very important to us. But the narrow-body world, we would expect and we're seeing it's more of a direct sale to the airlines. So yes, we are definitely seeing that.

Okay. And then last one for me. Just wondering if you could give us maybe an update on how you're progressing with the Lear side program and kind of what your expectations are in terms of what you baked in for 2014 on that program?

Sure. Actually, I have Mark Peabody on the line who's kind enough to call in from a ski vacation in Western Canada. So, Mark, you to want answer that one?

Yes, sure. Lear has been saying they're planning on doing their first flight here any day now. So we expect to see that pretty soon and then they will go into continued flight test over the next year or so and then getting production next year and we're, of course, [indiscernible] ourself to meet that.

Our next question comes from Dick Ryan of Dougherty. Richard A. Ryan - Dougherty & Company LLC, Research Division: So, Pete, on the in-seat power, do you have a sense or can you give us a little bit of color of that's split now between wide- and narrow-body?

The wide- and narrow-body debate. We have taken some estimates to try to divide our sales there, Dick, and I think I promised to do this a couple of calls ago. We still don't have it done, in part because we've been a little busy but in part because, frankly, it's a hard thing to do. Our product is pretty modular and if we're selling through a narrow-body operator, it's pretty easy to know that these products are going on narrow-body airplanes. But most airlines operate some kind of mix. So it's really hard to know. And it's a -- we can do an educated guess, but it's really a hard thing to automate. And so we're a little reluctant to put out numbers there that we can't verify and look back with some kind of traceability because it comes down to a judgment call on the part of the people putting analysis together. But it's definitely increasing and -- but beyond that, I guess I'm not quite comfortable yet that we have a number we can publish. Richard A. Ryan - Dougherty & Company LLC, Research Division: Okay, that's fine. And, Dave, on the gross margin line, kind of stripping out the E&D side, the direct overhead, I think, was a little over 59%. How should we look at that going forward? I think the last time it was up in that range was kind of back in 2010. How should we look at that going forward over the next few quarters or maybe 2014 in general?

Well, I think the fourth quarter was a -- it was a solid quarter for us and we discussed the -- kind of the abnormal things that we don't expect to continue once we get through kind of these purchase accounting things and some legal -- not legal cost, but cost -- transaction related costs to the acquisitions. I think wherever we're running it at now is kind of representative of where the business is right now. Richard A. Ryan - Dougherty & Company LLC, Research Division: Okay. And one last one for me. Pete, you talked about CapEx. I think that was low 30s or $33 million, $35 million without Test. If you include that in there, what could that CapEx number become?

We're not aware of any substantial CapEx related requirement in the EADS business. They have a reasonably good facility and they're completing a revamp of it, which we think they've done a pretty good job on. So it's not as though we have to move it or put it in a new building. There could be some program specific CapEx requirements but I'm not aware of anything major in the immediate future.

Our next question comes from Kevin Ciabattoni with KeyBanc Capital Markets.

Guys, just one quick follow-up from me. Military assets looked pretty strong in the quarter, I was just wondering how much of that was kind of acquired versus organic. And then maybe what the expectations are for kind of the run rate as we look into '14?

I missed -- I didn't hear what the beginning of the question was.

I'll repeat it for you. The military side of the Aerospace business looks pretty strong here in fourth quarter and I was just wondering how much of that was organic versus acquired business? And then what kind of run rate we should look for that into 2014?

Yes. On the military side, the majority of that was organic, particularly related to a couple of programs we -- started shipping cat-tom [ph] power control units again in the fourth quarter as compared to a year ago and our revenue from the Joint Strike Fighter program was up.

Is that the kind of level we should look at into '14 or is that more onetime items in the fourth quarter?

No. I think cat-tom [ph] will continue into 2014 and I know that we expect continued revenue for Joint Strike Fighter for the lightning suite there. I'm not sure how it -- if it's ratably throughout the year or not.

Ladies and gentlemen, there are no further questions at this time. I'd like to turn the floor back over to Peter Gundermann for closing comments.

Very good. Thanks for attending our call today. We're pleased with how 2013 ramped up and we're excited about 2014. We look forward to talking to you again. Have a good day.

Thank you. Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you, all, for your participation.