Question-and-Answer Session
Operator
Today’s question and answer session will be conducted electronically. (Operator Instructions) Tyler Hojo of Sidoti & Company.
Tyler Hojo – Sidoti & Company
I first wanted to just talk about the backlog for a second, $161 million call it, could you maybe talk about that? I mean, is that a one year backlog? Or, how far out does that stretch?
Ronald S. Saks
I think we have a note in the 10K, about $126 million of it is current and that compares to $99 million at the end of 2006. So, it’s not always comparable, we mention to you those backlog numbers move around a good bit and we are expecting some significant awards on additional helicopter programs as well as new programs that have currently been awarded but where tooling is just in the engineering phase and we don’t have the authorization to proceed with tools until engineering is available to us. What’s differentiating 2008 from previous years is the number of awards that we’re receiving on some of these assembly projects that are awaiting engineering. One of our concerns is that they’re all going to converge at the same time as engineering catches up. But, we are expecting a large log for us of tooling orders, some of which are not in place now but we’re already working them with our project teams because they’re only waiting for engineering. For example, in the next six months we have to produce $6 million worth of tooling where as we produced $3 million all of last year. Those tooling dollars are going to go up as we receive additional awards on assemblies. So, our challenge is for supply chain because we’re going to rely more heavily on supply chain is different. As a result, also we expect backlog to grow in the next few months fairly dramatically.
Tyler Hojo – Sidoti & Company
Okay. Then, just those significant new awards, to use those words, that you mentioned, that’s excluded from the current guidance, is that correct?
Ronald S. Saks
Tooling is in the guidance. There isn’t much, if any, production on those new programs with the exception, we’ve mentioned the 767 winglet program that we’ve produced and we do have some volume in the latter half of the year. Each of the programs have been delayed from what our customers originally had expected. The 767 program is going to have some meaningful second half volume which together with increasing production rates on helicopters is going to result in our second half aerostructures volume being higher than the first half. But, we haven’t yet estimated any volume on these new awards, I think with one exception on some mid cabin business jet, we have maybe less than $1 million in our projection for this year. We’re waiting though for engineering, engineering seems to be a pacing item which is fortunate for D3 because it’s giving them a lot more business. But, it seems to be a pacing item for the actual startup of production on these programs. On some of the new programs, even after certification production is expected to start at a slower pace. So, what we’re really looking at is some of these new programs hitting 2009 and 2010 harder than 2008.
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