Huntington Ingalls Industries (HII) 2 May 242024 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the First Quarter 2024 HII Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the call over to the Vice President of Investor Relations, Christie Thomas, Ms. Thomas, please go ahead.

Thank you, operator, and good morning. everyone HII welcome Earnings Quarter to Call. Conference like to First the XXXX I'd

on are President the President today me Joining call and Stiehle, and Chris Tom Executive CFO. Vice and CEO; our Kastner,

forward-looking Act and statements or reminder, our future risks, the are facts meaning today As involve These unknown statements Litigation statements uncertainties a the Reform made within Securities events performance known XXXX. not and future that historical financial are of Private cause to of may from cause that for factors actual or results by materially different other and that statements. our filings materially be our to differ our from future implied could to results important factors SEC expressed expected results actual Please results. these forward-looking see relate

Tom and will Chris today, refer certain measures. remarks their in non-GAAP to Also,

these at comparable on are which please For GAAP this that page to available slides reconciliations the Relations measures, ir.hii.com. accompany Investor of the see webcast, our website's metrics

I President would to that, call Chris the turn CEO, Chris? and With to our like over Kastner.

Christie, growth from Thanks, steady products. and continued revenues, demand everyone. shipbuilding the quarterly for released customers We in performance characterized we strong that reflecting Today, were Mission record results first by Technologies. strong saw quarter good our our of and morning,

in As stakeholders advantage focused to and discussed our suppliers March, all customers, our we Investor on at Day communities. our remain we delivering the employees, shareholders,

Record revenue quarter $X.XX $X.X was first results. quarter billion earnings first in to quarter, the for was our up per XXXX. diluted Now share let's from turn of the and $X.XX

currently the end which quarter in were billion, resulted at of during $XX funded. backlog $XX.X of quarter awards billion the the $X.X contract billion is New of which

which delivery trials Truman's we and Harry floated acceptance our John Stennis first the of RCOH also New trials off CVN In we contract USS on were the USS undocked for ] the month. delivered Richard SSN in and Newport to SSN planning first and We Jersey, last part Jr. quarter, News, S. also milestones. awarded RCOH, class XXX delivered April. acceptance at XX completed Ingalls, [ April. in At Columbia Turning as LPD XX of McCool led its the advanced Massachusetts Stern, M. to ship which completed C. an update XX builders XXX CVN on for shipbuilding

In begin first of shipbuilding steel addition, Australian News a for with August. toward XXXX. the to chain of required U.K., into Newport incremental supply steel [ process supply purchase be under record used month, last first testing of chain million, The sales we the with announced qualification Australian from integration the This U.S., training an quarter over steel volume $XXX BISALLOY of quarter and us At the to the revenue the ] Steel. first will enable manufacturer saw XX% is Technologies, for for step Mission an critical [indiscernible]. we Australian first company integrated

In to the for in customer. REMUS addition capabilities U.S. systems enhanced regional vertical and to a research, million Navy develop Korea, contract Republic sales to contract launching including surface Technologies quarter, international build U.S. competitions underwater and unmanned of a the in ships order an for analyze onboard vehicle Mission protect to won strong million interest strategic very $XXX $XX in growth, XXX a

submarine. bird X budget Now bipartisan saw that class cycle pleased ] Defense the for to We our Act, Appropriations fiscal Columbia for reflected Virginia class in X continued concluded We Washington destroyers, the X shifting funding early in were March. attack activities final moment. including a support in for submarines class ballistic [ programs ultimately XXXX and year

The to shipyard LPD for submarine million combatant a Also funding the infrastructure appropriations industrial base large multiyear appropriations submarines. by Burke-class ] submitted for advanced Additionally, consideration surface Virginia the contract class San XX. reflects year Antonio Navy now in procurement final Class class combatants, [ proposed X request for in and programs, for the Arleigh $XXX President the amphibious the budget VI provided surface under XXXX fiscal March, continued procurement into funding The and lead budget warship funding bill X shipbuilding enter and Block the investment measure requesting authorized provided submarine. Congress. also for our Virginia

continued surface request USS refueling X-year budget of combatants, Harry of development XX Additionally, S. the and request the investment year submarines, Truman. the CVN and nuclear and budget research submarine in DGX efforts complex the SSNX. industrial next-generation funds also overhaul large the funding and for The base first for

to experiencing regard, chain our that are we coupled From their craft achieve in year X,XXX on manufacturing quarter access us standpoint, across an the full which over skilled of both labor and the challenges same the continue shipyards labor become track our programs. In in hired supply Also the puts graduations operational impact to personnel of with first quarter, celebrating our approximately X,XXX. first crafts. who in our over plan leaders XXX will graduates apprentice the HII held to

workforce and governments our to this challenging solve retention working and and closely issue. state to are and with local focus on development continue We maintain our customers

continue We and risk labor stabilization. and to to overtime, and progress the outsourcing schedule strengthen opportunity contract use mitigate for

to turn meeting and to we financial on Tom? invest forecast results. will demand our we customers over we Tom in our I we'll our on for And summary, ensure the to remarks services. facilities our the some call and meet our In to now and our remain for people focused continue commitments products

Thanks, Chris, Today, review results. briefly good our and morning. I'll first quarter

issued our to to the results, posted segment website. For this more detail on earnings release refer the and morning please

presentation. consolidated Slide our the on X results of with Beginning

a was quarter same increased Mission the first period This year revenues represent of in compared increased billion, and record to last result Technologies HII. $X.X attributable Our at for growth quarter X.X% first to Ingalls. revenue

were to the $X.XX in the $X.XX last quarter $XXX to of and Net in margin the or end quarter compared X.X% period operating by the compared operating per the earnings increased of million of of $XX.X X.X% the first an quarter quarter million for quarter $XXX XXXX. year, to in the X.X% from in earnings first Diluted billion. income compared million Operating of backlog and $XXX year. quarter increased quarter the $XX to first of XXXX, margin the previous share in million at was same

assault operating just was Moving higher and X% to mentioned. income Slide volumes X. the X.X% in to million million Ingalls I volumes the revenues of combatants Ingalls same XX% $XX of quarter, by $XX and in driven the the increased million primarily last quarter margin from year, and due operating from $XXX year, higher or primarily last amphibious increased ships. surface period

the News, decreased from submarine million year, by Newport billion, last revenues $X.X aircraft or of primarily in driven At X% carriers period and $XX the volumes program. Virginia-class lower same

Newport for and million, QX year. income of was News margin X.X% were operating prior operating the relatively with $XX flat

provided in quarter outlook behind slightly the we for the first margin X.X%, the was operating Shipbuilding quarter.

outlook noted, revenue year second year. our concentrated of shipbuilding and operating remains expected full largely shipbuilding XXXX Our in for milestones as are the we margin the previously for unchanged. And half the

by of in income the quarter $XX million increased higher higher operating I operating in Technologies quarter primarily cyber of increase of space. Mission to warfare At compares million in $XXX revenues in million mentioned. operating year. to volumes Mission volumes $XX Technologies, The last driven the first to of income first million and just electronic or CXISR due of XXXX, compared income primarily XX% was $XXX

approximately for quarter of of First assets. results Mission was the Mission EBITDA $XX intangible quarter Technologies million Technologies first purchased included in amortization margin X.X%.

free quarter expenditures due X.X% and $X.X million in Net the used The cash in quarter million for million. use the our Turning and expected million of capital timing free to was revenues our the cash flow quarter. We $XX of and collections. reaffirm flow of in quarter cash in million of revenues. X-year or in $XXX compares X.X% million free $XXX of operations flow the of of flow expenditures Cash $X of to million, negative capital $XXX operations were Free negative Slide first cash was was in XXXX of billion. million This or outlook XXXX. net outlook first to was $XXX X. $XX of used to cash cash $XX

and also or Also QX. during million quarter. payment we pension dividends loan the $XXX our debt associated other benefit we in post-retirement in were would remaining million to with to the the term made our that $XX paid acquisition contributions on in note aggregate. I share like ] Cash per the quarter, plans $X.XX $XX Alion [ million of

$XX approximately repurchased a the of shares quarter million. cost approximately We also XXX,XXX during at

of growth To Newport expect and volumes Mission the summarize, revenue quarter to up throughout Technologies in delivered the by ramp driven strong year. in the year-over-year we Ingalls News remainder first

now grown we a free new flow for a that sales, up to the addition Mission off In in year. operating We're robust has opportunity billion. And year its expect contracts income. and solid Technologies ramp win revenues pipeline typical, has throughout to as to strong to $XX and start the cash very to continued

Looking X-year reaffirming our billion. outlook outlook are cash forward, and confident our free in XXXX we of $X.X flow

appreciated webcast XX. leadership like on to attending thank March for and opportunity thesis plans. the and Investor you our my to strategy, team showcase Before end watching remarks, for HII investment again of I'd the of I and I the the Chris Day details our and financial

Q&A. the turn I'll that, manage Christie to back to over With call

Q&A. I to manage it turn the [Operator Instructions] over Operator, will to you

Bank. Deuschle first Our Scott Instructions] [Operator question comes Deutsche from from

at XX terms Where I missed percent in if complete? Yes, CVN of Where is sorry Chris, one. CVN-XX

It's [ They're progressing loads actually well. off right off XX%. into the ship. seeing program. malls We're dead ] fired around It's test the

So that's positive a sign.

progressing well. yes, So very they're

just the Okay. half. detail midpoint in about, need And to basis driven do sounds second first like above better that then, where the of I can hit Maybe you'll margin it to bit milestones. through uplift points Tom, like more it's you by guide, XXX guess, shipbuilding the as a half from. comes to It looks walk margins

Yes.

we here, ] the So light X.XX% in shape question. and then guiding being of kind the X% up. [ to labor the Scott, anticipate we have came back the our the And working to half shipbuilding. margin, half year milestones, thanks just is [ backloaded progressing little that on I And We X%. have a the make the And lift do income, We're quarter appreciate the year, ourselves we the do on on we'll our a QX., front. of in because milestones. the at timing well back be of the sales guided cost operating it's as obviously, of to And of then ] ramp. that here, margin and QX for at on we do -- year, a there. as a that But on on

question Melius Spingarn from Our from next Research. comes Robert

I a Navy some there that? can't constraints. out do assume that course, on the its possibility that recently labor by to the are talked saying was wondering just of touch Chris, driven expand could about And And just we've way lot and going programmatic if Navy challenges bit subsidies of any this that the a maybe is just buy you labor on controller I to but delays, has shipbuilders situation? to might situation, delays. the the relieve little was simply

More and of sight are on [ Yes. Obviously, in subsidies is in the the That's been in industrial base performance ] that's funding improve there's chain, interesting. labor appropriated help. projects important supply that force suborn a to than line 'XX where going industrial-based within that capacity. the in would real

the by that, and we teams make can hard to spaces to targeted investments working effort that. the and very I where the think identify that Navy are get is improvements and shipbuilders appropriate, do So

like not can just do. So other are it's you then these things it there labor, sounds really

good need in to there the United manufacturing and to to change want of Simply the that's the more in it's of on then United do out and the working of the other people ensuring labor things hard with the relative the necessary access good community and is labor. you And amount and then job develop development really States labor high do. that the a access labor approach to that in can be rates to we States. But primary manufacturing Well, the job able issue that We're a schools, very workforce is is paying a kind colleges. labor in to ships, labor of labor Virginia the apprentice are State Mississippi shipbuilding build school. and labor to coming

labor sort most one-size-fits-all supply And to in the believe, think about solution this. it's labor don't as I it's is, when But supply So think chain I contributing well. you the factor. a the chain, of

labor is definitely nation, for So to I that a be priority manufacturing believe. the needs fixed

run first had Okay. And on the in then [ rate. good ahead Technologies. guidance the of sales quickly MT just quarter Mission ] here real

So being What the then the Or bit little of the for quarter? I talk a about do we just the that in wondering rest was just if drove conservative? we there. of fade And what's could year? expected year is the rest

that. team guide, give million, So Again, conservative math, this don't that It's $XXX X.XX% of a midpoint. year, the you it for to was think, at at $XXX contracts into about but in and following the I'll mean There the continue [ million, ] is holding Rob, it stay some came the quarter. strong and better ahead in that Yes, to quick we is then his the has that, if year I we on and those ] to holding year his the of at him that color is continuing for QX being awards he X.XX%. there we are hiring you that. sales, changing on do that at plan than guide the in contracts it ourselves. him we remaining do labor have opportunity, in to plan still backlog to X.X% [ the run rate want on get to last have I

the quarter-over-quarter. tailwinds I'm And So the where potential finished have now. We 'XX from just quarter year that think let but right a here 'XX. XX% we'll last do some we growth over over on comfortable. play -- saw front, news there's out to XX% at really it's I then year

$XX the pipeline billion grown $XX year. -- his he's has So got billion. from a fantastic to to start And

So set in there and as what's of opportunity has well. play the scope grown

for looking see back out. [ to a from I'm of year here strong So ] we'll but it half the have MT, plays how

from Strauss comes question David Barclays. next from Our

the supposed what to haven't now lot you've year. wanted a ship in were of seen time, margins QX, for the based late last ask any But of to forecasting in milestones of I Chris, we that QX. these you're perceived knock terms build of happen you're come ship and really same QX at QX [ off for and in off to -- upside you, that through ] in did you what going

just that that milestones why some there -- not So come of we that upside be seeing coming would with if you being these would could it's we're square through would not think completed.

there's going miss be Yes. milestones and extend you that Well, additional doubt you no cost. when to schedules,

year opportunity. floated second those as off and the unfortunately, So amidst through just We got we then them deliveries came to first we in done, quarter. quarter, the end the XXX of less X and got the in there's

got make So yes, equals we've unfortunately, scheduled cost, our milestones. to

executing. how you of the You year be give But to for I the all those why think of back say get we would half team committed the milestones done balance is the barometer we're VCS and holding. year, you getting milestones challenge, they're in a of can the going a the now. of the holding to but are they're the milestones, that's

helpful. mean, How in think I it very you then, burn QX. QX. -- be like Is the CapEx to didn't it Tom, the That's going And obviously, in mean, -- free should for cash a guided up? it of maybe about I see flow pacing step really Okay. We loaded back-end could year. seems we you

capital we then side? really recovery pickup be do working a other would and big a I assume in when CapEx start would what see So the to on

Yes.

at million $XXX from So cash perspective, in guiding we another $XXX a came million. minus We're here.

So uncommon, unanticipated we'll of burn not the through beginning here. Yes. year cash and at ourselves Not the work we that.

with to that align wanted on we make sure us So everyone front.

quarter we'll we on we ramp here. projects the perspective, of X.X% the half get as And year. the in year, those first From of this back CapEx into a spent sales

entire of ramp of here. we guidance that So half CapEx get X.X% as of you'll sales into we for the held at the and the back year see year the

Our next from Doug Bernstein. Harned question comes from

Columbia ] Can in the -- work is that has News. the the flow status affect has on and of the work you Columbia-class Newport comment your that been [ terms There on on Navy block with class? what on the and how issues commented can at

Sure.

has us that ] the The actually to top then plan. it. work are on now. ] -- recovery just priority [ the there's the bit Navy. get volume a reported team ahead bowel widely on to very We're our schedule focused the The impacted the issue. belt through on complete. schedule. really of yes, there's is And the now It's priorities. first-of-class the So of that Those [ team It's behind come issues essentially top

think drove delay So at that issues, point. us behind unfortunate issue that scheduled those specific we this first-of-class the we but is encountered the

then And flow getting this the matter? XXXX X understand the I'm kind terms that there in second Good. arguing the be budget I'm to here. year. to the you that Virginia you on to level. with XXXX of letter Virginia talked Congress, should in that per is to looks when And at other deliveries of X of matter to do X house getting in milestones you trying President's of What out milestones ahead is understand where is But this -- of the trying pathway everything get now. -- a the X Okay. that the difficult eventually members lot you to year about class, have right what the does class And where stand one on in Does budget. had to come it budget? look words, In the

Yes.

of healthy a additional thing the or the that chain relative -- be we incremental think tell the I needs we buy the of most we the within It's improvement thing the them. X There on that is improving materials, improvement. X eliminate to important supply on In program. for want full not on to create the the year that in good keep So through part do a as need we risk sure is to the has sense discussion the of procured program. budget, chain first to is we to boats make the risk VCS so rate been you, enough. signal to on supply I'll regard there move last The we boat

So the I as it. at just discussions. the customer the with the think they we've And Congress, understand communicated you we're know, of and beginning budget that

But the it's to order get both So resolved. chain boats. ultimately, get of we that we expect very important the for under it supply

comes next Epstein of Bank America. from from Ronald Our question

This today. on Perez Mora is Mariana for Ron

So to Australia. related the first question going to is be

this see an you term As we like should company, think you in benefiting this chain the stronger? first submarine for actually Australian make delivery from from order early investment to steel Australian supply near the about how like

Yes.

question. So an I this standpoint, This ] as excellent indicated, of previously us. view as AUKUS an opening markets that's [ is for X we from

vendor we're a to all it's supply [ the good ultimately really from is be potentially really And ] qualify taking prepare chain. here We because we're grow them for ultimately submarine the make small, right think sovereign-ready So a for step part to muscles of we us. flexing material chain but -- in impact supply in will pretty starting a provider. first a the ultimately opportunity to will This Australia that our steps critical a could we're it to corporation. start

support material step important will be for the Australia. immediately, revenue us don't it's step. So I but this is believe from to this flow an first to just prepared

the in and goes the impacting the how this Korea supply demand to of you And would of that through, potential see been line environment? this there AUKUS, program talks do chain agreement. that join If even has Perfect. also trilateral like South

further be would there upside to obviously, related that. Well,

but that, there ahead think get of about to ourselves. want I I don't are discussions

discussions and sort this and at point, Navy. leave Pentagon those AUKUS on focus I'll Let's the to the of

next from Our Khanna comes question TD Gautam Cowen. from

us I EACs if was by quarter? the have wondering follow-up. the you a Then in segment could give I

Yes. Okay.

it positive net negative makeup that XX, XX, was News the Newport and X, was [indiscernible] was So was was XX of the up, and X. MT Ingalls

speak a margins the or productivity little I'm of at were any in At light expectation. labor curious, NNS NNS, or of to stepbacks broadly elsewhere? just our Okay.

Yes.

then can saw and every more that quarter, Tom to Yes, as backs. on programs. you material know, we have milestones, nature. ups Gautam, our the in take But in. So EACs We the you some and jump do I'll which slip start step evaluate or impacted of we step

throughout. So and minor there were step up backs step

that. material nothing But on

Yes, nothing material.

here. I'll comment to

on a So X.X that ] of yes, guidance again it [ off line the time, keeping at year perspective, push through [ ago ] finished were [indiscernible] From we last a not deck trying quarter, [ day at year and for off at working, getting going on was here. rework ago, down slightly there X.X. get this versus News the So production ] that, plate A ] ] quarter. X.X, labor Newport of the just X material X, that production year to X.X line [ So working that X [ far off. same

So really we're And far the not fighting off guide. it. through that

okay. So

was in then was lastly in therefore, of event. LPD actually quarter a second it's delivery XX, EAC the on just And more quarter, and quarter? Yes. second the first that the taken Or

Yes.

we quarter. guide obviously the quarter EACs the second first event. it's and quarter quarter, for a expectations second in for the it's our our second the And included but in assess So

JPMorgan. question Seifman from Our from comes Seth next

CapEx a cash mentioned along half, the first quick generation. stepping you just clarification. second know I in really with Tom, the the up

you're step-up a the second assume CapEx half. I for in expecting So the that Navy also in support

give, It's and yes. we all plan have guidance It's aligned. the baked that into the we

Right.

Okay.

each rates seems rates, X%. on QX then the QX margin might of QX, just kind year, we Like of what higher. the shipyards, And Okay. if of last around expect probably the at similar look the for yard. slightly lower margin at in end to you though, the

milestone normally digits. of it maybe aware in mentioned of know Newport X% that's mean, driving the and on for that of above be quarter? -- milestone, some to Ingalls something double so one maybe the lack I would weighing like something overall improvement quarter? the at is margins second there second in a each but to the often is the you yard, I Or sequential Is expect And X in

can margin going to maturation forecast about to tough at where EACs, of fall, we rates so we see be risk that the quarter-to-quarter, do are and are it's you on the scenes we land the think we will from So that we where the look the is potential where where burned try and behind milestones out.

been first we've back this the milestones, it's year first step-ups rates, the of just and So the half. taking half the of the half launches booking year. Obviously, a had the are in of the years, back major the half We've deliveries now for the and couple is loaded. lighter than the

that to going A of opportunities tenths expect surprised [ we forward here. is overall. or our So a there not huge ] see and where through And working not we're there. here risks are. I'm deal on we couple

Our George next Research. from Shapiro comes question from Shapiro

Yes.

and imply $XX million? would else? $XX you're $XX for there margin [ going half a your little the second the in Or up margins, million for all ] us something low to for but the on X.X% of trying $XX Are guide detail. Seth's milestones that following get X.X% bit like year that million Just projecting shipbuilding [ more something profit. X.X% is comment, to an are incremental would million get into to the give half second to end to or some which imply To ]

down risk. It's that we in aspects have, have incentives, all milestones that a mix the burning of the we

was that risk now. We from you look right, at out. X.X%, X a claim had shipbuilding right take preponderance years, if X.X%, perspective, a where when of we were last that the X.X%, recovery tell the the plays it will Newport it's whether over margin which even I X.X% you X.X%, X.X%. from was X.X% out is perspective, is News that all last So you year the

to material has here we as hiring, So as on we're as long rate incrementally said here. about the of going that And margin a kind annually and expect that the forward. been pace, past, we've efficiency talking tempo the we stay lift in cost stable. improve What is of

to you X.X% keep what right much X.X% now, versus we'll on informed we're and pretty we'd X% So top now. yes. we was guiding right expect thought of

year, lift. the So be the will indeed ] of half a back [

I was Okay. And were million the $XXX [ the a assets first quarter. capital. in well That contracts, million follow-up, working a receivables ] mean, above up on $XXX question last up year's quarter. different like

So caused talk just what it? kind can you of to as

Yes.

timing, between now. the it's the we working working capital, right So AP capital the AR billings the receipts, and the it's have trade and that it's

We the have the At through have. in able ourselves for that hand. it's as well times, cost to restrictions bill, being progress progress either as making collections working or we incentives

a at to a minus here million we guided minus we QX. little ran Not XXXX, million bit quarters we then higher and the like So cash, in deficit and than came $XXX where back $XXX QX. for uncommon X in first in in strong

going So we're watching that forward. now right closely. And I think plan we're on

from Our from Wolfe Walton next Myles question Research. comes

could I know don't I ask the first to them a individually, size as if deck. -- not was milestones it slide question the on a in milestone I you there's chart relates wondering but

most those and milestones at important you the the to Newport News last in for going deck refresh year was any XX the milestone shifted have time, the just Massachusetts, for I this So of also is had all? that

all milestones are it an line, No, the because you the has is VCS boat. need meet next program is shifted, to the not important. XX that It crews critical to roll assembly and their on and they commitments

VCS those milestones yes, So are important.

it all curious, Navy if bit little source for offer a can I you systems more might where of just issues? a here then Is Northrop containing I And willing the some I'm step a just chain give in workforce? about ships. color merchant Okay. us And suppliers little an be. talking know guess, of but the issues them, of going you're of is was Secretary supply you little are the as of of supply game component? baseline constraints And of I say is as of whack-a-mole chain, maybe Chris, incremental a where to on the of bit of direction supplier the to up emerging you give was And propulsion emerging, it testimony terms the in

Yes.

projects thanks, So goal of we've bank. our to that or think recruit the organizations, where really of to attrition over it to I are X,XXX, Workforce There where have We the issue. X,XXX enough of very and flexibility. shipyards part relative of hiring -- is We've but commitment some pay, our on the each some the issue. starting can and from that we Those attrition. take fruit the you of solved to a quarter to hired significant Myles. we're yield working pilot each hard surrounding in not are within

positive So and indicators, to on going but not enough continue to yet some good it. work we're

standpoint, From being stable we it impacting are of is but some of The years was chain ago, of and resolve a major our overall a suppliers by than chain hard the erection XX of with ships, ago more equipment even we're definitely working number and our to a within couple subcontractors. months programs. our supply impacted are some supply major that those

a is Okay. Is to concentrated widespread? really couple? Or this it just

] Let's [ say, to X. X

from comes Noah from question Poponak Goldman Sachs. last Our

could into saw compared this your into I of this this half milestones did cited the you and can to the back But of and quarter-to-quarter. out full in But flat I with movement to last it and Tom, kind original the last at below close appreciate maybe the the you've and shipbuilding of -- guess, come you've year the referenced how of year time when year, I it margin frame beginning in visibility there year the level milestones quarter. full you outlook sat the year-over-year move that around guess, understand and being year. essentially you of year? end what all as of year the the guide

I both and side where margin follow or pretty years were of from cash we think going that. the kind on to closely near both expectations, the that's

So very and the QX where a it year get back into It we milestones is essentially of half. from right there's be kind of Last that done. highly those the the X dependent beginning more QX slipped events will in QX. year, at

of milestones the not talked we make couple them. we X, place I attendance there's it now, year, And to have a the although have risk months schedules. X, making like So we we about on had saying that, end by X it's right our to don't think the but huge. us plans in slip, of

have how to out that just here. we'll plays see So

it's XXXX. -- profile think to as near I a is year similar going very

about missing guided your We off ticks the you tenths. of last finished before X.XXX. tell a of ] [ that. comments kind we As to Xs. of I a far couple was year, year upper couple It as in the

realistic. So I is the think guide

about plan with go have this it's And to months to execution year. We hit a here place it. X just in now in

the buyback cash the about Okay. Makes year. cash should guess also, year? the the of pacing of And minimum Just through think what's the through free the we the sense. balance? I And how flow shape given

Yes.

talked million the the million the year. target quarter. XX back We first buy of end by in did we So about XXX of a

math back So -- you year. can the on the follow very the through of disciplined up do that ramp will go that. grid. as half should buying That we a We

value. see we where that against algorithms have We

has served our It continue to that employ targets. process. us We So well. we'll reiterated

forward commercial the see time to We've here. of a time, not now. as concern half now. being don't that on that's change from a And balance, it's cash will per not minimum minimum going right in revolver or problem so cash se into seen dig from we first then I a So a of users, And in the our we're the our in past that or the not that's QX paper, into seasonality year, the uncommon. right

we or there that the minimum to in have being a tied opportunistic that So were like seeing cash threshold a of value in isn't balance repo.

of they're independent. So kind

touched Chris, attrition labor it. on Got here. you've And and

at attrition how improved that don't or numbers put seen you continues there you know better. normal if get to any that what get last kind like It can Day, sounds or XX% to quantified are year. you've Investor fully be year-to-date? around much needs stable I around think of that the I better to

publish back our there. Yes. We target definitely It's pre-COVID not levels. don't at

still improve retention standpoint. we to from So need our a performance

to would I now not to any I remarks. over this like for further am hand any at Mr. time. showing questions closing Kastner

will on our and fundamentals of continue Okay. a the afternoon. customers. interest you, to HII, everyone, and of Thank for in Have your we good business our focus support

call. this today's conference And concludes

now may your disconnect You lines.