Gautam Khanna: Yes, thanks guys. Good morning. Patrick, you’ve probably answered this five different ways, but I just want to make sure I understood it. Sequentially, cost of sales flat with sales up $28 million or whatever it was. And that is just mix and productivity. Like you said, you built inventories so there was an absorption benefit. There was nothing else that was sort of one time that explains that?
Patrick Winterlich: No, it really was mix, which was good. All the Hexcel fiber that came through, the absorption into the finished goods always helps. And as I said, I think that trend — literally to the last question, that trend is going to now turn. So I wouldn’t expect to see favourable absorption. I mean, FX is strong if I look year-over-year, but you were talking sequentially. But that FX margin benefit of 80 basis points is one of the strongest sort of quarter-over-quarter benefits we’ve ever seen. But it was really about the Hexcel fiber-rich mix and about the level of absorption that came through along with good cost control and the rest of it. But those should be ongoing and improving the efficiency and productivity that Nick talked about.
Gautam Khanna: Terrific. And have you guys — could you tell us where you are on 87, rate, where you think you are?
Patrick Winterlich: Well, we’re moving up towards rate 5. We’re somewhere on that journey. We were kind of in the two, three last year. We’re now moving up towards rate 5. It’s hard to be specific. Again, to Nick’s point, we delivered to multiple endpoints, but we’re on that ramp rate up towards 5. I mean, we will obviously get there ahead of Boeing shipping at that level. So that’s the thing you should always bear in mind.
Gautam Khanna: Thank you, guys.
Operator: And your final question comes from the line of Ron Epstein from Bank of America. Your line is open.
Ron Epstein: It seems like most everything has been asked, but maybe just some big picture stuff. When we think about what potential new opportunities that are out there for you, I mean, like Boeing and Airbus are going to go on an airplane development vacation for a little while. What else is there out there? Is there some defense things you’re looking at? Or is there other things we should be looking for as potential additional growth drivers for the company?
Nick Stanage: Yes, Ron. So again, there’s always derivatives. More frequently the new aircraft, you see reengineering, and you should expect that, that will continue. And that requires a new cell. And just as a reminder, we have very strong position on engines and the cells and continue to drive the material for hotter temperatures, for better sound attenuation, for other applications that composites can’t fulfil today but can tomorrow. So we’re working on those. We’re working on secondary structures and certain elements that are easier to qualify and replace on derivatives. The A220 is a big opportunity for us. We’ve got various materials on the fiber, on the prepreg, on the technology side that could offer a great advantage and an opportunity going forward.
We continue to work with our customers on that. So in the Commercial Aerospace, and Patrick touched on all the penetration and the secular growth on business jets with Gulfstream, with Dassault and others big platforms, and again, just more and more of the aircraft transitioning over to composites. If I flip to Space & Defense, always a lot of technology opportunities there, which we set to new platforms on the Flora and space. It’s just a very diversified market, and we’re working on multiple programs along with sizable programs like the CH-53K, which is a very large program for us, and we’re ramping up as we speak in our Washington facility. So there’s a lot of opportunities out there. And again, we don’t neglect the wind and the industrial and the automotive all the other sub-segments in industrial that are keys are finding niches and areas where we can provide a sustainable competitive advantage.
So the growth opportunity, the areas where customers want stronger, tougher, more durable, lightweight materials it’s just continuing to expand. The question is on the economics and whether or not it fits within our target of what we want to invest in and where we want to drive the business going forward.
Ron Epstein: Got it. Super. Thank you.
Operator: And this concludes today’s conference call. We thank you for your participation. You may now disconnect.
