L3Harris (LHX) 28 Apr 232023 Q1 Earnings call transcript

Greetings and welcome to the L3Harris Technologies First Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this call is being recorded.

It's now my pleasure to introduce your host, Mark Kratz, Vice president, Investor Relations. you. Thank

begin. now may You

you, Rob. to call. and Good morning welcome today's Thank

our are Michelle me Chris CEO, Joining Kubasik, and CFO. Turner, our

During our reference on we that discussion, published yesterday. our Investor we website our Letter may

to listening enhancements. investor made have We're some and feedback

letter, on also focused may call will certain matters that Given on this primarily questions. answering the this detail statements. We discuss be constitute forward-looking

differ involve materially. that results could statements cause uncertainties risks, and to assumptions These actual

and found For SEC more the reference the filings. our information, letter Safe Harbor in Investor provision please

Lastly, Investor financial to we measures which comparable GAAP frequently discuss will non-GAAP are measures Letter. reconciled in the

Before moving to to to questions, remarks. some turn it Chris I'd opening over like for

with and focusing Mark, our imperative under our Okay. welcome aboard. pleased First thanks, results. on Good execution We've been Performance morning I'm and and

was serve as and The backdrop, a momentum resulting strong to build disruptor respects March. trends our orders including in to President's record budget in macro continue as many with improving request we trusted released strategy, XXXX Congress positive in the backlog, first record quarter

as our with well Aerojet and robust in and Defense National which Strategy, areas are in as the given of the reflected We and capabilities well force us, munitions including is major joint pending for space acquisition funding priorities missiles Rocketdyne. aligned

for number goal line, and was top QX EPS Our to have the flow. meet the grow positive cash

counts. rallied team The delivered on all and

Operating up quarter, top was the growth, with line growing. headwinds. despite consecutive segment a three had third we increase a two income usual of segments, For each in the X%

share flow there. in improvement resulted commitment in million, for we $X.XX be a where at thought a our year also would This repurchase front over begin in came ago anticipate Free to XXX the and came with loaded year. and of However, cash we year. line the building from from significant we we EPS we

outcomes were day. which in later will these FTC. expected close by still the deal shareholder Rocketdyne are responding this second the received vote following FTC a the we from Both year. was to approval We March, followed We request the of Aerojet the anticipate and

results are to XXXX of recognition bias guidance overall and could should the and revenue higher towards these growth environment support continue. range to quarter the First strategy the that a our revenue led differentiated record reaffirm strong us date winning orders our with business guidance trends end

headwinds, still We initiatives macro and do guidance. to product but sequential our EPS year businesses, abating operational to growth accelerating have profitability, we remain with work on centric committed in full improvement

First for do. to start I'd prioritize to So Performance everything a continuing our we're strong in and they employees off to like recognize

for With open that, lines let's the questions, Rob.

Thank Please Fargo. Instructions] you. question. conducting Matt And question-and-answer the you. proceed [Operator Akers with with a comes We'll our be first now your from question session. line of Thank Wells

finer timing. that Hey, put request had, a good starts the to point for Have maybe with I wanted If I guess on of I the Thanks review. sort the Rocketdyne that's what there? much FTC's think is substantially second you how left not, complied clock you for question. morning. the

It's usually anticipate. Yeah. a month would We're process. about as for Matt. question. to the the data three gathering Thanks you four

mid-March. the got we So request second

would thing. kind same that the and So is Rocketdyne both for doing June I know a us Aerojet of suggest submission

they've already a us, have probably little feeling this than a once. they'll I earlier this, submit given done done

FTC's the compete know, not do So, at it, close when down evaluation you I'm this look XXXX really in Aerojet Rocketdyne. we confident you And, comes the the transaction. know, of reason with to we

do engines is that make not. and I rocket motors term competitiveness. And And we is mean, known and none. rocket horizontal plain and as simple, there they

the term vertical of competition. ours, are and They is which not a art, of are not uses We theirs. FTC customer the customer lawyers of a

we'll data, no and say, look process So submit this and certify let the we'll if horizontal information, there's no competition at vertical competition, and run. the I the we'll

You know, today. or in terms think mean any DOD, completely questions I and not I'm more I there's DC, and that of I'll just get since think there the take Aerojet interchangeably mainly minute of whether And confusion, and sure consolidation, a are an just I'll incredible that acquisition. three used Members FTC are different is Congress, that it's the amount merger things,

after And they is similar closed, was back there and that years and two one less consolidated companies dispute Douglas and commercial consolidation, and opinion, we're military today. combine in aircraft my talking about Boeing nobody with and what not And think XX when capabilities McDonnell to can I that provider. that's transaction

A merger.

companies XXX significant DOD and resulted over in within providing synergies obviously is example domains, with good now is of savings shareholders capabilities cyber land, cost Two cost and have more significant revenue shared sea our and we complementary, a that came LX Harris. air, are and and think industrial that base. million synergies, stronger we defense I why case, together, which space, competition a this in the the company,

Rocketdyne our acquisition. Aerojet about XX% enterprise an And are mentioned that markets into value. then already believe putting we markets that growth of It's cash. all high? I is It's new It's us as

are I fills as some decisions highlighted believe budget that the of already growth a in mentioned and gap in markets our in recent That we portfolio.

what clarify of that point the in 'XX. to wanted confidence deal I felt just close me and this is that gives I will half second So that

you. Thank

Please is with line Jefferies. question Kahyaoglu proceed Sheila with of from next Our questXion. your the

Thank on Michelle know you Chris, last seeing you. Mark. I CNBC to Good night. call. days. anyone good and let on and morning, they these Chris the Welcome

So upgrade addition out they an on Aerojet seriousness, that got you. segment. that you called in But with And in to all nice good space quarter.

seeing you of to the in the has been more the dynamics working a are given gaining you awards. business, that, What there international in to opportunities tied you're just Is space with new billion share? where were competitive shift has shift is And space number allies? there the that of prime become then Space. awards seeing think to a do some of US a given systems? LHX in And And smaller space of within there market? the types space X.X open backdrop Your moves

with Clifton, actually Jersey thank our in you, day team. all Okay. Sheila. New warfare was I electronic Well,

short drive to a just get TV. on So

you thank Thank that. So you. for

let this to I'll know, and You detail. Michelle more kind off ask a give then me of kick little

and merger. space strategy step really And space it been and to I talking the think domain we've the back with the that of want and about how since aligns

launched orbit. actually LXHarris that as as are So there a of a few we years. there satellites a we zero of prime seven XX be date the backlog next couple that prime have Today, merger built, fun facts have legacy and the that the in or in company were over obviously, will

to alternatives ourselves look as years growth for invested this R&D we saw and we and market discussion providing position We a it when So is. been back, saying and what disruptive facilities the capital technologies several years prime aligned food our And for customers. was a and ago, tooling several become growth. up by with which to we've and move chain to the

can in as Missile Space best I that that payoff. here starting investment today, the will is that work up the the Agency strategy, for doing Agency we we And that launches with coming so. see think we're the Defense probably known and year sit to or Development next recently be We're

And growing internationally and and in leader that you market well. weather exploration. a also as we're space also we're ISR appreciate I highlighting But fact the

a reputation quality international an delivering and time and around think space You growth global as the team of that but opportunity, always of the we're on being products, globe. don't seeing recognized has having

So, Michelle, you give to do maybe want more detail?

Yeah.

the some color of strategy of some numbers, Sheila. and and action our add I'll terms in So

So thanks for highlighting this.

booking So billion last submitted within a months proposals, over QX. and have space a half over the billion six in we X

So this book-to-bill we're super X.X about within this excited over sector.

-- environment US. around of also the exposure your But her an doing are are the point, expanding job Kelly international current the nature. in in within in bookings aperture and as of well. billion and team Sheila, half of in terms Half a terms to international amazing the recognizing

And a to so is different domestic the are and where differently team think in able this globe. terms to across we this the margins be leveraging drive about Kelly shareholder of way footprint thinking our value in when within space,

we're So from perspective. double-digit a growth excited revenue this about

We expect us a this within to 'XX for to be tailwind continue and beyond.

is line Liwag Please question with Stanley. from of your Kristine the question. next proceed Morgan with Our

Chris, market chain. It's electronic Chris, encouraging Mark. the for Michelle and supply to conditions see morning, that on good the components Hey, are improving.

increasing. Your are critical shortage parts parts and alternate declining is

upper this chain or So we if worse you tracking is accelerate, improvement upside the as to And supply see end? expected? or year the beyond better to guide we see your full could continue

to on is Thanks, chain supply expense about and macro question I don't just worst a design team you to talent for these took know, inflation. I'm to your you redesign if and headwinds of we've the parts supply proud the fair the because But our all availability. believe of chain, behind us Yeah. Kristine. talked happen. attrition specifically will, amount We products, alternative relative

done And team we has And an job. letter, originally highlighted in our now XXXX designed weren't parts alternative the into that have our as amazing products. we

us been grow. that's to So able allow to

of maybe continued quarter saw and year. in position the for the for you us the As growth rest

hate agreement chip happen month after And day think years, it's the real major referenced, and good company. I strategic to positioning. going I we day providing few signed hard the predict know, last to predict to microelectronic a you about But or to month. a what's we've opportunities to feel I anything the because with

assured technology products, us in some and taking exchange know, more kind by of The advanced moves design kind that, and we their which down benefit an working the advantage day it with and sitting of us we're And for gives up technologies. as uncertainty of them collaboratively our out of new availability process, and sharing of you always is for is us allocation day. roadmap

the with way of we're long saying So quarter. happy first

good if we with for outperformance. we have it's continue you And momentum, visibility We and know, this could possible beyond. see QX

you. Thank

next proceed Scott Our with question. the Deuschle Suisse. Credit is your of with line from question Please

out Hey, Michelle, can margins morning. drove IMS. lay you in softer the what good

are How absolutely, Good morning. Yeah, you? Scott.

in and IMS you. on and also half. be margin repricing, the you would if that with this second touch factors CS implied the can walk helpful. improvement the Thank dynamics that backlog And quarter through very unlocked the then

a we're you're enterprise? back bit for of but improvement a So I overall getting think is what Scott, feedback, little half about margins IMS garbled and asking

Thank Backlog repricing. right. you. that's Yeah,

absolutely. Yeah,

set within the of objectives. three So One the we before just I to want in to We stage expectations set top our the terms how had for QX. grow really into kind was team line. jump I of margins,

our to our on the year. second EPS all met third three last meet to was those. and was improve cash position of from The we And

point. your did come aligned margins They however. so And in expectations, QX were to with light.

we talked about we year. I where more earnings back to so plan it's call, go talked think having to And about this what important our a last in balanced

balanced with half, being be terms first by in product deliveries. and in accelerating would half higher and the EBIT, two the our around margins our really expectations is One second And of revenue driven revenue was margin lower things.

chain our year. So continue is second as we constraints ease, the going are half deliveries we in which product going to to expect margins the of improve, that to supply drive continue the to see

related price industry and is within headwinds to about that within IVS experienced in We we we a our EW, with macro about QX, the this inflationary this three particularly second across fixed the talked but letter higher -- of The which have acutely our the sectors, bit little and and ISR. backlog the our environment. talked aligned experienced been

the take that -- start pay second half in this to some of going continue to of we the dissipate to as we start at we actions We the is see last of took year year. to dividends expect that end this

So margins QX thing one ISR of other revenue would is half. in to by second note recognition I terms our QX path within lumpy were business. getting the margins the a we a deflated bit have And our to in aircraft

the at look XX to within basis you XX it's point this, When a impact about quarter.

normalizes, as that's specifically, of half, two there. going EBIT our help there's the to So question on we the also in Scott, second in the the this year. second EBIT margins then pieces IMS, half your to expect And

you're aircraft us, And with revenue that familiar is have mix. recognition. been journey One the our this for on with lumpy those

within and enterprise So quarter. about We of result perspective. I as impact had In this QX, terms margins a recognize in did from revenue dynamic as CXD an out an lower Force for order aircraft the this played Air that from talked us. the had the

throughout So we we of aircraft. on improve work the continue the to that to those year expect going missionization as that's

fixed acute price talked the an The second impact piece related is to our that about. I backlog within business. ISR was This

seeing we at And tunnel. sit stabilize the good about seen improvement so remember terms you we and we news where our seeing talked attrition QX of of that the today this may end in had QX, the we we light concerns are attrition headwinds within along macro in and is with have the

and And so less of the through our see we make VAC performance going and the way year. expect stabilize as is attrition negative we'll to that impacts we those the

look I planned. we think more. ramp chime had And Scott by And just margins, us with are which year, the in what exactly none I'll of QX to XX.X where Yeah, have will. clearly it's of end a little the bit are on happy we we get the to a we but

bit out we that. to I know, about teased in little You our enterprise And kind about just letter transformation. of wanted talk the a briefly

over is I four what million Phase actually years merger. I less was very XXX three call successful integration, been highlighted with our which it's that And know, savings. than One You the ago had very, of we year

just right? to harmonizing COVID. you advantage, of the the especially was That was water know, know, was headquarters, what Phase the benefits, proud during it's consolidating And, that chain rebidding but team taking the able enterprise relative still really accomplish, of One, to segments, under down you But contracts. closing supply bridge,

into our disrupt natural customers strategy continuous better ourselves. applying to being ourselves embraced our of we really is at the we're suppliers, looked And evolution under we've efficient? and and our by the Two. more success mindset disruptor to it's do we Phase So trusted improvement how it how How do get and and and move

to we're a supported we've to opportunities there we to every on confirm hybrid real embraced do. figure rethink highlight function remote differently how about completed trying that world. are out and just as would we function and us going sprint for really and example the we're and So ten-week and everything and estate, be especially Easy

provide looking opportunity at office of as what clear as We to, and looking everybody manual just the we as We functional things. we actually at procurement a some savings. We're a and as of and also I'm sure We're our labor few bots to strategy, started remove space using nearly indirect name some to don't the need there's used savings much do. for cost.

next you that design how company our So tangible an LXHarris program. to And contributed complete. sprint of even on in call, is the give already make industry tangible phase to plan actual this show now We're better to numbers and the some timeframe going we the margins. and to is our leading

we're about leadership you entire off project a the more is So this I start to and think team come good excited and to in, days. know, XX

you. Thank

question Please question. next is Baird. the from line Arment Our Peter your with with proceed of

morning Yeah. Thanks. Good Michelle and Mark. Chris,

morning. Good

driving I Chris, in metrics use get last update the much. you kind know a last some I want wanted less to of you can whether focused sure do on that ended something on year obviously I'm think XXs? target Thanks inventory. working you capital is to Maybe Michelle into in. this working up years. you've ultimately days weigh I XXXX, the over this maybe XX of few was just kind and quarter, could built And lower the you you capital ask still think And can you the year? so you of know us but that

Peter. The this the by we is answer of the year. levels back to Yeah, XX short expect to get XX, end

improved capital year-on-year. improvement receivables. of saw this day saw at in we what you QX really so where were proud an working eight by of point teams. 'XX, end by We the about That's at million XXX were QX really driven the And about from

example in highlight initiative to Performance great is our And I just action. of want this a First

and is focused finance really processes our invoicing affectionately working truncating call and for So Money contracts what a program billing of which teams implementing thanks on to use our Mondays, efficient we many more drive management to capital. our

the we improve year. a our from period able by were As to DSO result, days last two same

so your this to end X, about year, And the XX getting to drive the to about point by have we of

end QX from of between going improvement is inventory. year. of this the come And to million XXX and predominantly the

we getting of easing up half a have. that, in which of example in business these new half deliveries on between our based that where negotiating be a front to split The chain going year, space the driven of being is performance also to second some product ramp also around some the wins program second programs milestones well. equally we're of constraints our but and able cash inventory, great to as But new of by then our Almost those the result cash on orders. is us are going executing of supply for the as deliver the

our It's that capital have the board monthly priority. and at And as something at. look reviews, And briefed every top and our we Peter, Michelle, clearly something we working a is that's team each meeting. I

You days last working capital don't years. know, couple see I it to surprising was grow it. in The of the think

You ability know, parts to could inventory. we we plan were much alternatives any pretty cost, now more to build-up our in of get taking much We're resulted confident in know, at the have and a that approach, part. and you all to the

that So capital working the as days. you'll contribute we down bring see

recall, cash that opportunity. And very and were as milestones. based view the to we specific I if And, you aggressive payments an payments performance and know, be you progress negotiating versus continue in of to receipt tying performance

our that's fine. there's are I programs you fair behind schedule due our certain And it's to performance suppliers say performance. to think that or either know,

it. me tie continue milestones. And to We've identified to gives hit even and and numbers those perform it able to our that as be confidence we further working that we're we'll cash the

question, Peter. the for thanks So

line is Doug with with question question. proceed Please next your the from Harned Bernstein. The of

Thank morning. Good you.

thinking you training, light public about Aerojet As commercial that aircraft, process point? you stand at safety. Rocketdyne, Things work divestitures and out are the this simulation how through on

of might size the the do fits? what you when you a might what thinking do about divestiture, be, decide how So kind you are and how timing of

to Yeah. fund Rocketdyne And Well, about good acquisition. divest the to to the need morning, Doug. cash talked generate Aerojet we've yeah, help

not becoming but we're more to and process review going we as actually our we're to contractor. more yeah, So, evolves, the and see government is portfolio we've non-core, disclose have of defense a decided what regular a or company

the update want We real are for first So the share get businesses. synergies but and have portfolio a for We the align where we we the a of and to process great with XX million, and show not processes. small if one good wanted technologies there's these results rest closed that things the larger to on. that going ones, current through right quarter financial to with ability

And going we it's you at maximum year, the better something hope sale they're take properties. businesses all close probably announce we're you early could one situation. have sign maybe time and usual good and know, not QX those and fire for in analysis, And, XXXX. for those value a to businesses. We're to going owners our we the this get know, I'd in or We're

we'll like it just interest confident this meaning I'll divestitures. able three But lot we'll in but I at We of I calls, our there's two process, And think get said, billion leave a of just say said some proceeds. where a be about especially get I'm to what process. run from and that portfolio. proceeds inbound this, I after $X previously I've something or

committed So that to number. I'll stay

is question Safran Please the next your Global of proceed Our question. with with Seaport line from Richard Research.

did opportunity growth thinking was are subject if to expectations. And quarter. term you about growth should what period then bookings better the one think period? morning. return I'd Thanks. start you I if bookings book-to-bill you're be of I X.X If like kind in we wondering talk it's longer in good year How of and the to to than this about book-to-bill okay, of full set, the the you thought Chris, might Mark, Michelle, you? and if

you're Thanks, than than more I not set we orders if internal book-to-bill. kind aspirations XXX goals more Rich. grow our on and booking recognizing. It's hard Yeah. the mean, to always to be revenue of you're

is way great think a year. X.X the was -- absolutely the to I start

money this it know, the gets to When resolution, time, continuing loose, broken you start until which did, CR is flow. we of we And, talked right. the impact last the see a

one CR is as the I've dislikes the the of said than who And Defense. industry Department before, only more

the X% we're billion you to that that the International, you to TCOM, budget The So last couple of years, off request XX in we'll I the it book-to-bill we've know, clearly interest what you X% think really with been as is President's the expect able you $XXX back several peel Rich. the accounts, for on would the internationally for Space be when do a And growth, investment good start. over year.

But to record backlog. and somewhat know. at even XXX right, lumpy, And and aspirationally on only least I'd we like funded maybe And it's as XX. it talk the you be depends

difference here the appreciate So And that we're the feeling trying strategy I bit always confirms companies. just maybe think really other working know, a a of that little customers is, to that, good. has key you and our we're and do. relative is really, this But to what message recognize

we solutions. on focus The and Sometimes, speed more cost. schedule is innovative have and

different exciting So we were in I quarter aggressive been risk mix and pretty in Michelle we spent pursuing of the lot pretty us. the and on opportunities those to kind in say they've also will focused team and had time different technologies. that I management that two and a markets and of

came there with to development the priced obvious spec. when to RFP options fixed bid development out, program the It's very reasons. final not hard price those fixed to don't were a fixed price we when know But commit for chose and you

all more losses at and not think to write-offs the that. all back I than they're look we times tied and

playing not will be we So that game.

aren't going to And the for we'll to RFP go back is think appropriate what appropriate contracting the the I come has highest We're the out. levels others opportunity. to vehicle I think within to over ultimately not going bid. would and bid. I've time Pentagon And the it elevated

maybe appears to wanted throw there, all of a in of the 'XX. -- few a look a acquisition answer I'll be by munitions roundabout just of than cover compare few those at but easy and pending Rich, So line in to the always Rocketdyne. I accounts, to but XX% those it's 'XX points. higher and kind guess apples-to-apples, not Aerojet I least of mean, I

these So need the I the refilling munitions think threats, addition in threats not current for and only for we stockpile. all but desire future know the to

made budget, even acquisition of So the of sense. the look makes at December in you lot it heck I a more And think think sense. I a when

So I'll at it just leave that.

And Rich the to this, order just X.X X.X part was add, international our record of the within were of and billion for XX% quarter international international. book-to-bill of over

what really in So to of Chris alluding terms was to speaks the strategies working.

The next question Michael with is Securities. your of from the Truist question. line with Ciarmoli proceed Please

got in $XXX enhance one business. production. guys. was some to good Hey, award how invest for Thanks back Chris, that to have and the challenges a publicized they're the of maybe capabilities from much going of overhangs of their or guess the concerns pretty about million to questions. production this things, out you DoD the kind well Aerojet, having. there just They capacity I in to guys morning, but number of taking for challenges were cash just Maybe to go

So clearly divestitures, start want imagine guess to Do how terms I guys for building to do big have close? you about the this to figure But Aerojet? have fit production. staying your CapEx. up talk space mentioned And potentially And engines out, facilities can lower Or the the in trying into ramp you -- these Because when strategic I'm some you this you I to out can on working something you guys divestitures. guess, just input Aerojet, portfolio? also together? I to wondered, would when would just investing I wait they're of out fall alleviates of your in does or

called them. pretty to to try to very trip and me not there's is rules as Rocketdyne, jumping, working some that conscious, clear are thresholds. together, address we're those relative Aerojet Let Yes, gun over

aware help we together relative DPA So the and cannot We're work money. of it. to them actually

have I'm working acquisitions, review timely Eileen we running that. we all mergers transaction in with around We so documents. company. and approved all that can't change get But the that. forever And can more been that's her is my on but to ability close, start company, the the we a And really reason to consolidations, this until manner running

The Defense since Production 'XXs. Act, DPA, the been around it's actually

a received pile the of there a defense and really of is working at I that been acquisition. this a on strengthen key team resiliency money, help of money. that it DoD the there in to It's technologies, this for the growth. capability the on has focus So But And this know Aerojet it's the with was industrial of pleased bucket manufacturing of is they these I year has, unrelated Rocketdyne. money to probably support base. and see the to their

critical a more the these I for me money, to infrastructure of be this highlights the It the both nature increasing and And to technologies tactical view, successful. physical maybe Rocketdyne. company and DoD to need this relative as little digital the Aerojet of

a Aerojet think Rocketdyne base, less news competitor. will a industrial I it's more for viable great for news assure the strategic tactical and Defense. And strong more of and acquisition being more Our Department great

production this a we and how both team sure for money engineering I'm the competent capacity, talked a on they thorough And have lines of that and growth digital couple best leadership spend about. pretty plans pretty moving to to optimize

the would yes, be about I LXHarris. to not legacy So we're was relative everything talking divestitures, --

So the clearly, the space deal once propulsion space closes.

Thank you.

next Our question. with the line question of with Skibitski Please proceed is from Global. Alembic Pete your

the How I as debt do alluded on the the of have now full about on heavy thinking Because maturing his allocation are for year? billion $X.X pretty I some guys year. the you close morning, you on know everyone. your Chris think. balance year, capital pretty to start target this remarks, good Michele summer, Hey, to in repurchases maybe to Hey, allocation, went you guys,

Thanks. you are to Or that? look other address you do So looking at options?

morning, Good Pete.

color don't some Longer previous fairly terms in and in commentary term, capital this buybacks, we our added terms balanced and to investor letter anticipate approach, to we've we So dividends expect to any our have a of within of changes allocation. acquisitions.

debt. about about X, To will ratio still close as leverage anticipate a this point that your the Aerojet our year. we with of $XX get result, acquisition, to closing billion And do

targeting the bring are years back below next X. over to down we so couple And to of that

buybacks. So of still anticipating for year, $XXX the we're million share this

So we go along communicated. being $XXX with within did what on million previously another we QX, the $XXX to consistent with based the million dividends that

In terms to of within the debt, do we down pay expect June. that

should And that shared before. we consistent you with out see so play what

The with of your Partners. Vertical line Robert question. next the Please with question is Stallard proceed from Research

much. Good morning. so Hello? Thanks

Rob. Hi, hear us? Can you

you. hear can I

sorry. Okay, Good guys. morning,

just to things topic. Aerojet maybe the up So whole on wrap

time Let's any assume the year, deal anticipate this is get further things the of half do completed you in do frame? the significant in medium-term done, second M&A

Yes.

easy an one, that's Rob. think I

picking up be debt the as we've using flow answer debt. our no. We'll cash billion rating. our where to to And be we'll just Michelle close credit to $XX So previously, maintain reduce said off, free billion, $XX that investment of would have left

So we a No couple at road, balance the can answer. execution. that. the of But sheet, focus down strong no. on relook keep want we years is And to a

consolidating going We're a Aerojet really integrate or case, We synergies fix both pleased buy how that and were that looks It so to schedule report challenge, the -- on I'm the the ViaSat of Rocketdyne ViaSat, six whether you cost operational perceived, were that could well. at exceed exciting. to the about issues to like integration months meet that there three was or your same revenue things is back ahead our relative will business December, is reality and and going time. facilities.

We have four process. phase a

reasonably risk of the is So low. moving

first the phase. the middle in of We're

could ahead basically end take relative year, done been the one four has to which one customer calendar new and this the capabilities. major interactions of feedback lines be of exciting by we'll So is that and by the the these schedule. And again real product

to And say XX payloads space, briefly I'm on for Space. XX about some recent that in were Link pleased time based the talked ever, we Link is first in And launched.

early that little I of a that good probably but So think a And is ViaSat to it's on us. have behind done, track. say really we would kind

the industry. the unique we're this and challenges, And turned about I and wanted it team compared A hearing It now the that it XX% but on like in, again, nobody supplies of rest getting of know proud we've products. the we're to keep feels was quarter. the this in revenue corner. this to of -- and products -- recognition really redesigning think such, was the operational lot I and

line and that the focus You're seeing that time deal well. my Aerojet you'll be the others bottom as by see top will on and for in line And in Rocketdyne. then team the closes, the the

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in So and look months Thanks. engaging And you to forward I appreciate look weekend. ahead. with questions. we everybody in the calling the a asking participating and Have great

teleconference. concludes This everyone. you, Thank today's

lines this your You day. for may have you disconnect time. and at Thank your wonderful a participation