L3Harris (LHX) 26 Jul 242024 Q2 Earnings call transcript

Greetings, and welcome to the L3Harris Technologies Second Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. It is now my pleasure to introduce your host, Daniel Gittsovich, Vice President of Investor Relations. Thank you, Dan.

You may now begin.

Rob. you, Thank welcome and second XXXX quarter Good to Call. Earnings morning, our

earnings Kubasik, morning we and quarter financial this me our and published detailing guidance. results are second Yesterday, Joining CFO. Chris CEO; our our Ken our release, Bedingfield,

supplemental also constitute to our that website. presentation have that results These statements. materially. statements will We assumptions earnings certain could and actual discussion uncertainties include on differ a provided matters forward-looking Today's involve risks, cause

filings. our earnings release more For please SEC information, reference and

non-GAAP which measures, discuss to reconciled release. in measures also GAAP will We financial are earnings the

new you this engaging For haven't near turn some those of I in to you and met future. I'd to yet, forward over I'm like to for it in look now the role Chris with remarks.

the alternative call first to the both determination creation entrants, the and Dan, a that disruptor, and industry's between transformative marked month their and the and demand with Last deliver relentless anniversary and our IR earnings passion innovation most of X-year new the of trusted on customers LX focused merger welcome your team in to with speed, and missions. to us. executing Harris, proven Thanks, capability the challenging traditional primes

government with entrants, commercial utilize traditional and radios. short-cycle software-defined primes deliver Unlike new products significant each. commercial both business commercial We we in and models presence such as

sustainment exports, ultimately, that entire cycle life and to support. the including long-term span also execute on international programs critical We from development production, and

best companies successful small makes for partner of with where sense. the Aerojet was shareholders. announced a for our a Our the to ago solutions to or and that supplier are work opportunities the actively the a It deliver portfolio. diverse across ecosystem addition as and platform-agnostic looking LXHarris and trusted year disruptor, sub, one returns a it Further, Rocketdyne the we prime, we enables portfolio to our us business to best as for customers merchant large

Defense and platforms systems leverages in industry-leading against content recent long-range program. defend on missile our markets. This A is increases positions next-generation control missile example propulsion innovative new Missile growth This us acquisition threats. attitude to our Agency's the interceptor for and on technology ballistic our role

of Since LXHarris also investments of drive discussed last are made integrating substantial capacity electronics legacy performance make earnings Alabama and in efficiencies capabilities. the growing and meet in Virginia. operational we've Arkansas, customers' to to calls, to our the X expansion on business, as and continue key we and acquisition, to closing demand, including progress our increase improving facilities the We the we've

progress to right of margins had the business earning national have the by result and the chance we to know a left these excellence upside date. we in and Several the combined portfolio As spanning while the focused efforts, reduced a in of with integrating future in align months. potential. the understanding better a with in with the XX further merger, of and inert security our you industry center you of warfare. visit We're on deliveries nearly Huntsville, Since of Alabama, to domains, the overdue we past the highest and all businesses, shaping priorities XX%

the our reported strong on XX our committed driving remain We growth. creating results execution commitments. second reflects of of value we meeting these the and second achieving year, the of customers shareholders, share for points expectations basis towards quarter, per and and to additional forward, progress and These non-GAAP results underscore prior segment our versus operating financial XX.X%, focus profitable Looking for highlighted up earnings X%. up quarter by $X.XX, margin

quarter communication opportunities our with billion. In our we $XX remains over domestic Communications segment, pipeline our total On backlog the threats. resilient multiple the and of our sophisticated Systems side, for customers' near-peer demand at by increasing of as international increasingly communications needs domains, resilient is products. across face stands ended and from driven for and they This robust, record backlog demand billion international seamless DoD $X

customers that communications help and to comes them the with continue upon We critical providers commercial vulnerability relying inherent avoid from work satellite their for to these missions. network

resilient Communications Tactical to robust than a for growing our to near-term see capabilities. international and allies highlight to plenty NATO are Our demand of $XX communications, continues see of totaling continuing the opportunities we $X billion ISR, and opportunity greater Overall, European more than of billion. few business a continued and in for propulsion pipeline

we're benefits our We Programmatically, LHX and in our our results. as make operational our that bid reflected initial NeXt the showing beginning disciplined continue risk to strides in realize of the maturing rigor and processes in program performance, program up well of which is expanding is benefits to as margins. our management

we're In Our initiative. first on provides which with the guidance, workforce strategic the operate ahead including for quarter, making our IT schedule. we as business. We've detail. and LHX our increase our discuss a and remainder of to reducing services efforts great Ken more of designed automation transforming modernization us optimization, of infrastructure, accelerate progress, performance to collaboration made year, how progress and the half focused our I'm pleased while we're infrastructure a managed confidence NeXt for on the leading in second the will cost and

chain discriminator. a stability and will enterprise. management of to And our suppliers with the grow demand of means and supply centered us. opportunity the it our improve along offering our will for and simultaneously next delivery chain while phase This us, competitive customers, scale cost, leveraging LHX for be The an management around NeXt is quality supply

Turning to capital deployment.

excess continuing on shareholders promised, and and expect holding we as and $XXX over target year approximately prioritizing dividend of aviation to the focus, returned $XXX a we to competitive maintain capital through shareholders. business later year-over-year. antennas million our with In we paydown, stated to finalize Aligned divestiture close. flat commercial of share business remaining recently national the of in are returning repurchases, satisfy share sale and meet pending to debt million the this outstanding our quarter, conditions track repurchases, the to our XXXX completed to As shares dividends we our security remain

our I And thank NeXt who recommendations was LHX are last The our to bidding program presented we actions reviewing its portfolio, recommendations it manner committee. as now served I to to per turn a processes and over now customers. I'll quarter accordance Business in rapid hoc and, Review as with guidance. The being our on appreciated, to the on for week, members to drive insight were review are Ken and and in business on want as recommendations. Committee dissolved. and our are executed focus implementing continue Board the Board executed such, charter to X management, plans. disciplined and finally, strategy is Its provide results The noted, second and shareholders value those XXXX ad

results with of remains nation's book-to-bill second also start the high, unique we play the We an awarded and for awarded which supply U.S. awarded year. that I'll lot fuses, we our replenishing consolidated $XX of of to were the new were of critical contract total million a the in Chris. product backlog $X X.X $XXX We in information a with quarter. inventory. IDIQ over the electronic acquired time were in the delivery quarter, for of to billion a systems, billion in Navy, resulting million and a of leveraging capabilities munitions billion. TDL $X JTRS multi-functional next Demand the Thanks, $XXX awards, distribution contract initial line role task last order terminals crucial nearly

improved Operating operational organically. across continue up or X% margins LHX expanding cost XX% Consolidated segments, savings program revenue and contributing. grew performance XX.X%, to be points, strong, basis all reflecting with to NeXt XX

by $XXX flow net like improved that X.Xx increased million EPS performance. quarter, a driven to up the to basis, quarter, down $XXX leverage quarter. on X.Xx, EPS Chris income previous strong a of the add second was and reduce million our result growth of as for helped to as XX% which highlighted the performance. growth bottom was a quarter Free X% In our in line. profitable operating we capital pension-adjusted drops operational note, repaid cash from I'd working the second

segment, contributed Space programs, on resilient rates deliveries we appropriate maritime almost By programs aviation Aerojet flat terms. of as Combat Systems over segment commercial Systems quarter. revenue Space also was Systems business growth X% flat, lower and negotiating organic our business. from focus volumes lower our products. Mission Systems was volumes Rocketdyne in offset was business of higher million revenue the second by $XXX Systems and volume classified by our Airborne Communications in growth segment within revenue and Airborne communication were with Integrated on as for higher offset production in

DoD the the as net impact discussed. which revenue partially LHX settlements. XX.X%, of half down Turning offset software margins. to first reported cost sales was favorable higher slightly timing legal we've reflecting of CS and savings of and is NeXt weighted, year-over-year, This previously by onetime margins mix,

We see LHX Rocketdyne on to consolidation purchase segment basis make the footprint benefits and higher performance initiatives. IMS and with of Consistent Investor production margins in the of progress development of mix continue adjustments. amortization realize in margins facilities In of of points in continue XXX increase LHX Day, Aerojet versus our opportunity outlined second to SAS, plan our million point margin XXX on and to maturing to second we resulting at expanded expect the half. included NeXt, XX.X%, programs reported margin the which program XX.X%, of the year. accounting to rationalize to continues progress completed a as a $XX quarter. the international prior we XX.X%, NeXt basis X the in

With purchase us, the behind accounting acquisition are now up period. one wrapping year the we

these of purchase baseline as in to date improvements, the impacted for expect reflect more profile. the point our of of performance and legacy as close. from margin adjustments operational are not informed value provisions acquisition of of respect our I'll out, to assessment adjustments continuing improvement contracts, a subsequent loss future acquisition to the and the we reflect state date contracts adjustments With the which Simply, by accounting of off-market contract fair see

turning Finally, to guidance.

in increasing in with in expect incorporates of revenue, margin are which billion. per earnings our and year for the of few a release additional half half expected rate pleased Given performance through our $X.X per to remain flow EPS, increased performance, confident share, we we business now performance customers revenue, commercial We share growth we've second cash and X% on $XX.XX our revenue guidance the and X.XX, of more first book-to-bill strong year, the EPS and first from free outlined now pending divestiture $XX.XX our the the of in We're and of revenue half. with a and aviation are first we months the close commitments range reiterating highlighted for organic operating sequentially The and half in EPS by and presentation. to growth margin, operational to segment guidance margin of year-to-date the delivering and of solid guide shareholders. increasing our

line let's for Rob, questions. the open

[Operator Instructions] question Our the comes first of Baird. Peter Arment today with line from

Yes, implies just margin Is continues or that Chris, you on first compared the Maybe you the just Ken, are Dan, that things in of step-down. kind performance if just could conservative? there? the we margin where but really that to and through be walk mentioned it maybe high should to there Or strong, understand? Aerojet, other just then thinking maybe results. ask just XX%, guide Ken, nice the is, half to

year. performing With performance. able Sure, through positive well in program are see would of the performance is question. certainly well the volumes, mix which in to year, to as aspects happy respect I about seeing the go performed We're we at again half the Aerojet, the Peter. half, to as the first the margin year. in some that There's second business the of some terms got of I we've programs look, which were we say, halfway through as, appreciate point the do

a learn feel been good performing. about year we business, to more. and we've it's continuing So Aerojet Rocketdyne this since And is how we're about integrated

purchase the as ended well. I think accounting that saw you period

can we're that that So we'll better kind improvements half first we the work the business. driving And did with us, to we've what in we're the information behind continue and the in of we informed operational how on second making that in improvements if deliver got of the and half year. replicate to see

of with from comes the JPMorgan. Seth question line Seifman next Our

I think, well, Wanted the I at Day, and basis as outlook in points the each maybe when Chris Ken, and Investor business. you was, XXX to margin improvement ask, targets gave it guess, about of

see how refinements Now starting you if you might in through that we've you any pretty of here of seen, half the terms and given make off 'XX, to well look performed NeXt are LHX you've first businesses been getting contributions there the from out, as get out program? XX% to that margin what and far they've of able the the various so how

say, at $XX cash Yes. out, in XX% we look margins, and as Appreciate the Thanks, $X.X that that 'XX, Seth. framework and back free I we financial would billion it. Investor growing midterm revenue set Day period. to billion in flow of in

gives delivering that the you have well. think where to today about framework. more I performing think we confidence are businesses, And if been in us they

I think performing. paying off. programs doing program we're we've got around work is the The excellence

last segments, XX%. We're I feel business, at and XX.X% SAS we we've of the look that then better about XX.X%, And margin at same I picked CS year, think a we as that guide progress was that half up, well. would bit, you look it. with if growing first where the at I if it solid across the our making towards from, say are IMS you year. think

And updates of we up to Again, pick across to the range XX.X%. we're X kicking we to it about off from XX.X% pickups at were reflect margin are that XXXX a picking that in trying where up and guidance XX% then making. to segments,

making So that good progress towards framework. really

progress I progress then that again, it's to through and 'XX, building quarter-by-quarter. some provide clarity our think see acceleration building on confidence And into on. we confidence around that. we're year try as And we'll we'll the maybe better get something and

Robert Research next the Our Stallard is Vertical question line from with of Partners.

to a just the contracts in quarter? that some behind defense your this Or terms I highlighted and regard bit this numbers, was are but at that comparison bidding revenue in of best bookings are peers. a margins your not wondering fair reflects if you is of you've second based your quarter discipline that? least industry, the it and the just on with your is had for this Chris, growth some

bookings Yes, ratio. Rob, look tough it's or to book-to-bill quarter at for X

good pretty For we've great year-to-date, book, we're to been a had feeling as what able first quarter. to

year. So X a make doesn't quarter

continuing in especially I think I margin to be we're front. what our seeing portfolio is in the and you're that think results, And on well positioned, we the bid. disciplined

SDA appropriate. invest mentioned, we to program and to Some strategic with tools, prime satellites, starting are for changing off. what prior execution UAS pay of winning our decisions maybe after Vampire, as hires we've the made strategy, our where with we're with doing go waveform counter positions really and experienced programs those upped All And new Ken hiring Overwatch. Armed management training, externally with

making And we we talk the sure type. about have contract bidding discipline. It's right

X not basis lot were options out fixed-price and development we with programs a cost think I process." the say, are for getting And first doing the to fee. better proposal "We the and bid at a we're reasonable to come asking of going

I bump our third negotiating. taking And expect book-to-bill. quarter see and we're So a will time we're to would the the relative

line the is of question Ron from Bank next with Our of America. Epstein

the of Royal on spending NATO We ago for Farnborough. It defense European a Europe Summit really new We've in bit? like the about and and Europe. in question. that International What does seen industrial the the reflected things in base opportunity about does LXHarris a just week maybe seem that is just Air big create can't themselves. had equities Chris, rise. picture Tattoo the maybe a in do markets Can or you that talk some that

hitting as think a NATO than international of summit part the ministers excellent tone leadership. in I defense the with on Summit an the you're customer was D.C. various at attendance in point. in past. was it and actually different I Absolutely. of And And the defense

much But the sees in to products the or acquisitions theme indigenous the because includes with XX capabilities need amongst either in the interoperability given the of benefit Europe Summit most bundle growth work. And countries, only NATO for and Ukraine, at conflict threat countries think or everybody about of market have was the all but a exist. I their don't view U.S. U.S., that think a profile of which the even these member interoperability, I the the Europe. as market companies not the

So a software-defined in at as radios example. our our perfect case, we look

there positioned this lot interest a uniquely and was could we're think there opportunity And the envelope, radio years of of in think be that. ahead. we the XXX,XXX back in I

of a one the for reasons think upside you all we're for XXXX, is mentioned, I going our markets Europe after give in nice Ron. And So ahead. larger that should it tailwind now that's some and the years us

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

completed you that the on committee, So review hoc it maybe review. ad mentioned wrapping up its business

you can and the provide you've Day? Investor findings. this given now is from is the multiyear how the color the recommendations it So some the any different at What to plan? extended implementation of outlook And made

management the for the good say all our review. that benefited and question, Thanks on both we're we'll it year. framework. just from from We I learned change the no the so to Kristine. the beneficial, say, some and business the thought parties, ad and committee continue discussion, ideas, I'd implementing Yes. already of and I'll members recommendations, discussions hoc and was all and it process, a were suggestions do XXXX has financial throughout And review

Our line is next Research. Wolfe question from Walton Myles of with the

think DoD and Communication maybe driving also, was as it from backlog in first if first in it And half sitting international the you and I order an drill more trends here X Chris, into it. flattish months. could, growth today the was hoping, see you was the perspective, Systems about I

to front? the in I'm order the if second I are expecting, just trends half. You're starting that accelerate to think, that curious shift on

Yes. Thanks, Myles.

there X see major DoD have up billion we've years backlog, the I XXX,XXX in way X formed was call to in issue, radios $XX To XXX,XXX. And delivered we've we and areas. our I quite if said, been ago. about a was competitors. from really what modernization, about company from I you BOI, basis time. some when CS, buy of As us go back, guess, talking for The date, we

So IDIQs opportunity. successful XXX,XXX to there's have And than share. as annual clearly, radio that been these And or continue. fair our rather in winning our still more a orders, share fair we've expect I task

the some come pandemic, with During in we up We've up invested capacity new techniques. actually in Rochester.

We the smaller our different cell, integrating changing really We're is We've our a way our improve. yields which of using we seen what a integrate call we it's footprint that and have way radios. Smart radios.

in invest to continue software. We

it's are think I And these waveforms. new some have important radios. remember, to We software-defined

So XX- life. XX-year the to probably hardware a has

But continuous demand replenishment importantly, software the So of upgrade. for that. there's there'll a be the more a and

So continues in the far budgets but modernization, we and they'll as adjust see, there's clear on based here DoD can the U.S. as come The demand will look to that, good. the out quantities

comms. I that for earlier the interoperability, focus the with opportunity and an in and Again, NATO our radios see success to we mentioned whole on the NATO we resilient question. have around software-defined focus continue huge with globe a on

one resilient, are learned. to think I able lessons as was being communicate in difference of communicate that's a world-class protected regard. just coming out in the And There fashion. our networks and that between big a

to see a to upsell a And continuing opportunity demand And new waveforms. or for installed for for radio, this licensing of We're resilient our It's I've our markets. X alluded the it's an waveforms. and software base. X either software-defined is

pipeline we have So X a just $XX out CS, looking on about years. billion

As the I billion rest $XX mentioned, domestic. international,

So potential. real we and about growth business the feel good the

further don't in constraints the prior had off, as issues outlook. us gives any or supply confidence close we which we chain the in even And to just see years,

Our is the with of David line from Barclays. next Strauss question

half the move From remember some off around margin Investor you're would development the dig half, here of Wonder, seen first IMS the maybe you commentary bit. from little maybe down little And through if a I QX year. anything, the to of start in improvement what that Day, second kind the was could these of it Chris, margins of bit the the the half. fixed-price half We've to in year? like would but see programs in forecasting looks nice sequentially we the in a Ken, improvement the second flat you second if into

IMS address if could just maybe you margins. So

a David. to really IMS the happy Thanks, Appreciate the performance perspective, it. say has half couple that From we're of in year. the an had One, I of things. Sure. IMS would see first

performing for are significant delivering and think us, half the over that's 'XX. margins I growth first solid programs the of well, and

of the we have half, second did between kind electro-optical, half terms mix more margin see IMS. some X NeXt type and of half the mix in in it's And things. favorable should from the within In as commercial terms I of a profile One, of LHX But commercial. half a One, cost first commercial half, first business couple savings. of the then to we first perspective, just of endure Those second think well. starting are things. benefits

IMS are to growth see in second going We in half. the

having and the half of a talked We about the within aircraft in of ISR bit little to with a bit little procurements 'XX. half first growth some respect IMS first headwinds

fact see as mix there. little As the in is, businesses second moves that to the profitable half. got aren't a some that we've of abates, in that some of may matter the commercial as highly we ISR, bit But businesses perform some the the towards more of

our We're we guide at year-to-date. At it low-to-mid XX.X% picked sitting XX%. solid. think is to I up IMS,

we would half. I look think team ability in the second their as at biggest to impact building And So mix the our and be perform. IMS confidence

is Jefferies. question the line Kahyaoglu next Our from with Sheila of

line think we ongoing fall return do of you line. if disciplined the profit terms talk with you airborne What trends us seeing how the could and through? deploying top Intel of in hurdles any the about about on offset And growth in systems? give you're maybe bottom are And you have stabilizing? in So could SAS to timing and airborne the combat context on this Space

the maybe our Ken off holding of I We with what example. strategy. in benefit is was the in. Starting Space, and merger that start, disruptor I'll chime think me again, then All the right, Sheila, trusted let have keep

out. just and for X before, Tranche we're said for I've As the and X awarded the came layer, only company X Tranche the RFI been to tracking have

liked, timing confident our than in the with we're the little slower be SDA. have we continue ability appears to would to So but a

we've transport the On layer, strategy merchant of the being taken a supplier.

on we'll that have classified well continues be as content strength. layer to And a when So the transport the is awarded.

So Intel customer the Cyber markets. us, are core are that's the demand and for is. where Space and Those and growth competencies

single-digit our We Mission network FAA have work, also is growth. low in which there stable, pretty

you as to again, are airborne lot we these have mentioned, as the and great headwinds, moving a continues to then And Space, systems. of on to missions capabilities Air continue have mission from

So there. to to the is opportunities we there; F-XX, in opportunities support CCA, And have we have extent NGAD F-XX, awarded, the the continue such. interim, we and F-XX

airborne So of think story Ken? flat a and it's to and Space down to and on I our growing acquisition Intel customers' approaches. continuing be based strategies

margin I at from say, NeXt look perspective, of would to implementation I been Sheila, Yes, the the biggest really half margin as LHX has in contributor we the first program. performance think the a SAS,

kind I to think think . really cost capability be, deliver as about structure and program, we the forward. embraced there the how we team it has to needs get worked of where really look hard their

into Tranche X, so increasing sensors. moving quantities we to some volume 'XX, we X. then starting of did programs say, of development work. would similar now missile Chris defense take those development weather was is out move where Tranche took it, Tranche on, high-resolution a off into SDA, adjacency challenging some and I and production through on Secondly, It imagery near as as the great X, we into phase, example we And into of work we with which and moving mentioned in a are see

off it's for really to I a business think model that's starting pay SAS.

of the to make pay feel and but I the to that profile, with terms we our limited the not our made, good some of about ability dividends bets So in margin bets importantly, perform starting I we identifying to resources. think think right just really

feel in Space which business, and we and solid see, about solid of much think, of classified, the growing but particular, Intel I Cyber is real in SAS, and So opportunity there, and think, strategic particular, performing a good and business. areas I very growth,

Securities. Ciarmoli of the is Our Truist next Michael question line from with

maybe are? of Can just on back of past in catching or looks I if you really drivers more Ken, the the second the question quarter? first dues. talk to Is first maybe on And like I what XX% you Chris then up implies, It us was know what about short-cycle the a just were to give half. you second Maybe that Peter's the Aerojet. the Aerojet the over growth XX% think, said volumes. guidance could half book-to-bill year, half you

Yes.

Michael, Let little a XX months since been an closed we we give deal. and Aerojet, a of me, on bit overview the year announced it's because since

I to XX financially. So look and strategically, I ago, acquisition, operationally this months as said like at

first book-to-bill segment give some to question. going I'll So we're I you, then will and the highlights not Ken time. at for on X, ask comment your disclose tell specific this to by

the you're appreciate question, So I get going that not but to an answer to one.

I the XX clear of market. better I enter millions And But is spend in or acquisition that strategically, demand I again, and billions hundreds of or months excess months that new feel to well it's by see of companies wanting lots supply, think, to dollars the you say of about than XX this as this I've did said I'd today before and much ago.

So our And I the of positioned. think when well, this opportunities faster-growing I for portfolio, well LXHarris. look at we one are is

Operationally, talked by some XX% thousands there had on-time were upgraded challenges in of doubled much cut we've in XX board. about. serious literally months. talent our we've that across we the deliveries overdue and months, We've XX the that deliveries We've pretty

Our be reduced of the project end the year. by XX% will

but programs more to programs. know, each green have The pulse red, I relation customer someone more is green quarter. longer is a motors. and we We're yellow, getting So have X discriminator. if rocket wants solid can great. Technology we go that in

and divert and long And huge a term. the attitude liquid opportunity have is we're solid invest. continuing over to systems. We control Hypersonics

week We're a building. in on We've a Virginia breaking ground couple in new Camden. next opened

this month. arriving in later Our hub

the new the mixers coming We year. end have in of by

deliveries. is primes using off. in everything for own our DoD, a great And working we missile money. and our their We're supporting So We're We're love and money. them paying money. investing ultimate market, DPA prime it's co-investment using

thought the wanted how do made to I just months. financial much that as to progress in question? want Ken, So XX to we've you context answer give

savings. integration improvements And of on Sure. calls, the on the been any is about long-term terms We've Yes, I Aerojet operational LXHarris. to really in this talked the drive that previous team the not health on now the focused, Chris trying focused of particular would about. and very overdelivered, we I say, I really into business, quarter we've And the profile, business we're really talked Michael, think, focused clearly for on integrating believe, results. the

drive Aerojet percentage I primarily working with our half, as we've continue growth half. to second of And some in the we that just we the see grow, that think continue deliveries see chain, we're completion half second of on start which will should into that we look seen, in the business not profile I second the as from to supply for to will the of And 'XX. is some basis. 'XX, accelerate, but suppliers will the build us mention, cost-to-cost at as

using base, And on the point, us I great being that supply we to the business been see equipment, delivering has baseline focus Chris' the as product, in and drive working start it the improvements growth think facilitization, really and doing working the done Aerojet. of by job start on, making, that that Aerojet the to think we're with opportunities enables I in to kind a the to positioned a very the as work that is that, well. to So and team

we with really would critical the about But door, our just the capabilities is the can to product the that. so I customers. thing say suppliers biggest good feel the I in and getting really out working get that So

Deutsche Scott question from with of Deuschle the Bank. is line next Our

I helpful when disclosure always Chris, future growth segment, on earlier pretty that like. analysis found the look trying disclosing not by do to but appreciate book-to-bill comment be I around I'm to would what

not So is back some it do guess at I disclosure as just something bringing relevant Or point? you that being contemplate anymore? view you

a for Yes, Scott, by from growth it's year would perspective, guidance say, I here. the Ken segment. providing we're

information, guide, we terms and in set the what with like of with we're we transparency good Day, we've kind across given given we when process $XX growth working financial comfortable the through framework solid sales. I think feel billion of the and we've, of guidance provide Investor we're And our each in a with guide, midterm that in how of segments. a of the

lumpy little bit can book-to-bill be itself And a quarter-to-quarter.

still about it's in in the basis, why on on we we're focused weeds more on scenario. get that But really a to relevant that's in providing quarter particular so think lost and long-term think disclosure, kind of I terms any don't annual to I first think see year from half an the for for Aerojet, seen but second X we're book-to-bill a order solid half, around full book-to-bill real 'XX. of for the we've the Aerojet into planning question sliding or

Our next is Jason question from Gursky of with line Citigroup. the

Chris, and X Ken. I've quick question got Great. then for One for you, clarification

On not X RFP, the mentioned you maybe clarification, said just I'm sure, Chris, you or an on RFI, Tranche that hit.

curious Tranche Just the going to to flat, it's compared growing shrinking? like is kind of that what Whether X? volume or look on

higher? little cost that was the that success side And wondering to can just that then, having a kind of back? takeouts with to of kind through things, meaning some end that because you up over whether savings think structurally for guidance, margin you're time, bit you, is the sticking giving is. curious we're this if on going the cost I if know help temporal the of just expansion Ken, here back, of of you're us that some longer-term just you've seen margin you to up give end being these Or whether the

quantify your if growth, on particularly margins way as revenue does of any and anything? impact NeXt If what it kind has can revenue impacts And on an to on then your of cost temporarily, I contracts. suspect well, there's the this plus you

Sure.

X-part So question.

and was that's what our SDA think on I X. address there, customer X Tranche company the looks that And are excited terms me of we ahead only first. to and we think, RFI what an Tranches don't is successful question like. get But want hit I of X, X to the Let been street, that's in be certainly

what one. be RFI 'XX might and analyzing a it government late as that for like was from and the comes not out. potentially be that 'XX a particular providing that looks RFP We responses certainly will acquisition bidding maybe And

the they is, the quantity but in X to thing. overall do of to question I Tranche I it's believe And have a ultimate similar front that type providers I or either is I number precise continue to from -- guess with X or me, think perspective, Tranche of similar don't X move quantity X.

feeling to continue that, we'll through program. but work So progress it, think I that we're really good and about making on good

that's are of of to is to at drive one for and and NeXt the margin of schedule, from quickly LHX just margin but respond well. our a for which LHX cost of trusted but question the absolutely, the ability driving couple perspective, as value on also our to program to capability opportunity, listen deliver In pace. provide part includes profile, reasons, a customers to enable disruptor, us also as And terms not the the we second yes, customers

in But additional about respect accrue in the XX% roughly the will to estimated the the savings, we terms margin of of with savings terms specifics that of company cost have to opportunities.

towards $XXX So talked essentially a gaining opportunity to moving on up savings, confidence amount the hard the well our we're drive billion work target. and both of margin of we'll $X LHX from continue savings, perspective. against I billion towards $X we certainly million and of executing to the And think NeXt as about

at we'll So to amount. least get make that work sure we

that improvement And well. we then much as the if at obviously, see benefit margin to can maintain working as of opportunity for as company

a more But thing. realize find win a ways will improvements. business integration. a projecting we'll that, little the versus is more of to because the did merger, forward. the quicker which between may bit good competitive, and be little of to X-year we're more LHX as if XX% us that integration of the It realize, can more see time we margin think, remember of And back bit at be of look we enables an XX% the of enduring accrue I it we to program is savings. to new You something kind NeXt working government, certainly

can not cost think of well. performance, savings can program and that into may we'll out think direct it the to about return for about profitability that improvements perform programs, future and certainly be road down bank And turn able how the better program, the we are to that future but they they as as we

story think well. is, LHX the NeXt, So at I performing of day, we are very end the the

we're think of I ahead schedule.

confidence of work I building today confidence, much will more think can. we into did we're than and got that drive just margin we to opportunity a certainly ago, as quarter we as

So Jason. thanks,

Partners. of question Research line Safran, the Richard is Our next from Seaport

off I reason. some Chris, dropped Dan, Ken, for

this, to something you free XQ, in had thought you. I'll solid else ask So if answered expectations. you've have I cash flow pretty some beating

took you for flow up guide free operational maintained billion but your the You guide, cash year. your $X.X

with some to expecting you're in risk working baking the second if wondering headwinds or half, due in some half. second the in capital some maybe conservatism Just collections

on So you'd maybe thought I elaborate a that little more.

appreciate been I the And question it hasn't Rich. and asked previously. Sure,

So we're good front. on that

$X.X the sticking in of 'XX, we we're as cash our is increasing about uncomfortable We've In financial building and billion normally I don't the NeXt, tilt of with door, way comfortable the repurchase, the kind start terms of we're some the we business. hopefully, we're of maybe 'XX into coming second cash targets a not little we to And but to think cash build a frankly, $X.X those where into paying this the grow the would with. that's to of And through in certainly we've guidance to to similar half, guide, about It's the driving our guidance. a the out and of $X.X that roughly year. term profile 'XX any cash LHX It's framework as making we we in 'XX. it, guidance And the how of on amount more that at in flow deploy 'XX. end get kind net towards half, working capital free as I in and we're second flow as capital picture fronts. And flow work the with the suppliers, that got generate for but free $X.X on $X.X to to build question we look bigger Jason's expecting we're reiterating free billion far is by year share per billion 'XX, confidence our and our year. billion. with to we're we're we confidence growth I 'XX with guide, the as our And absolutely need to halfway get we in see think work are importantly, leverage thinking the full characterize customers, really in about at quite continue ability share payments are be, we're billion got fair year, necessarily through our sure XX% where a the

feeling good So really it. about

it's I good think think it's midterm of solid confidence feel a and story think that really I we're again, it. really great profile, about that, I part and building I towards And financial a framework. with our just

the Rich. So thanks question, for

Our line Alembic the Skibitski next with from Peter is of question Global.

experimenting, LXHarris, we focus niche about of units back a just Maritime. acquisitions unmanned years had that is I to you those just still the for contract-wise especially number came kind know still whole out. to I trying days. believe over still the chunky to I you're And get wondering, there I'm an Or thoughts guys haven't that but out LX, area at really DoD interesting But area. on of want done that going all updated looking Unmanned anything early heard your things there that is Chris, to in figure on you? towards? is space, unmanned LX.

We refer a would the sea the we're what be This we're [ growth The work, on great the Peter, which say are us. won seeing lot $X And of already. undersea ]. X the I opportunity. billion, would coming autonomy where not to those beds, there's competing. ones. markets whole for as big undersea, are third classified autonomous is sensors, a We markets grado up, almost the more Yes, opportunity question. and on

we So that engine Maritime. doing still could real on the . Relative be to autonomous a vehicles. the autonomy, are growth surface for well

I products. these the undersea, think its autonomous developing relatively inexpensive Navy unmanned the still is And are to strategy. relative

mission literally recovery and which Torpedo a but great sell invest. just to years these of a export It in but and using unmanned money, had kind launch with we continue XX, highlight up you ahead. it's an undersea here it able some game should lot We've the to start our of XX, can more, add doesn't be critical to these. of -- XX the is are So changer. We success to opportunities vehicle, seeing we

So portfolio, well. still doing of part the still

the in up to of relatively the Just we'll and don't to future. roll them, materiality the more probably about products the do try to price but are talk inexpensive

The next question is Markets. of from line Capital Ken the RBC with Herbert

Maybe in opportunity seeing talk substantial shift going maybe to you maybe a nice price But communications second the competitive I segment. you're markets. And opportunities CS there's of called might be to aspects that in international just radios you sounds there other the the extent think take ask the particular, for Chris about be some half. you as can mix how share, like tactical to out about market. thinking pretty on to side, especially about on incremental wanted It what the pressure and we and landscape in international tactical and

had tend talked the we've winner-take-all about again, as relatively winner we've to and and great usually products such, are these majority share. there. split to buys, Ken. compared the before, to Yes, or of generally, out is from But we're hear systems inexpensive it other environment. weapon they you. XX-XX internationally, success. the XX-XX, Good And And Domestically, a

a the And we get we and the target, know, business. is in a much have really costs as what reasonably we not of price are, this So that know differentiator. you pricing margins good strategy, price

plan technology our don't of interoperability. benefit customers the the the the prices we So see again, lowering and and on

fair real doing. good But what feel about business deal. to we a we're So try I cut

getting cost We're dual take through to source initiatives. NeXt out LHX able been we've suppliers. And our

market portfolio points failures this we and the across the of So have don't opportunities. about single in especially feel good CS, and but real company,

I'm countries, half going we're that mention think in and through going opportunities a year. there's have Europe be to of in FMS good process any specific I we good going are second of should So lot the shape. big here but to the not a

be Parsons will Gavin question the last with So from UBS.

a I just the if you give wanted to supplemental, could go color. back additional little to

additional to derisking potential revenue that I the in the or for be guide? think that into next factor the end maybe said Is going year? of a some Is there you'd was there. of year through more radio upside

vision for for And into a and It's it's supporting and of night the radios, again, bit either the of rocket quantity process. a the the guide. flows money variety on then our Yes. hard little goggles, to the predict the timing countries actual built congressional But approval in that motors munitions. always indirectly primes the lot directly way, a through and solid

suggest, the So deliveries I think you next some stability XXXX, as months. roll that as in And in gives us guide. and we our this into make of confidence XX should XX the to

dedication. months proud our the forward industry, years. optimistic their believe what sign changing and I'm talking very We're like to and for we're in we've and and the everybody ahead. accomplished I hard So always truly we the about future, look to in with last off, thank before of X accomplished the that, work we to employees they've We

the Have So thanks for joining call a good weekend. today.

concludes This conference. today's

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