Question-and-Answer Session
Operator
Certainly. (Operator instructions) Your first question today come from Troy Lahr of Stifel Nicolaus. Please go ahead.
Troy Lahr – Stifel Nicolaus
Thanks. You talked about the airline destocking, how long will that continue in your opinion, and can you may be just kind of reference how much of our commercial business is discretionary versus nondiscretionary?
Robert Cremin
All of the Esterline parts in the high 20% of what we do, and very often we mix other things in and tell people that some of our stuff is used in training, but we can’t closely tie that to the parts sale. My feeling is that we are looking at two primary things that have happened. First, during the Boeing strike some businesses continued to ship, some went in a month and were still shipping. Others were shut down on day one. My guess Troy would be big expensive things like engines we shut off, but parts continued to flow. I think during the initial shutdown, just as people get sloppy during the rising times during a downturn, people tend to really ratchet down the inventory. So, I think you get an overreaction then you get to bounce of the bottom. So start with that. As for our parts business, I have used the expression in the past that Esterline is a newbie to the market. And that when you go back to the old DC – 8s, we didn’t have much content on those. We have one company, which would our sensors company, which is really our oldest company, it is a holdover from old Esterline framework. And those people would have felt more of an impact from the strike, and from cutting capacity in the single aisle CFM-56 engine markets.
My suspicion now is that we are probably in some stable environment. That we have taken the hit, we are coming off the bottom. And anyway, I will stop there in case you have more questions.
Troy Lahr – Stifel Nicolaus
Okay, but just unclear, I mean, how much of this work, I guess, can people delay versus how much of it is required to be done by the FAA.
Robert Cremin
Two quarters would be a lot. A quarter might be normal. It is not like these guys are sitting around with huge boxes of inventory. These are big companies that will manage.
Troy Lahr – Stifel Nicolaus
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