Frequency Electronics (FEIM) 12 Dec 232024 Q2 Earnings call transcript

Greetings, and welcome to the Frequency Electronics Q2 Fiscal '24 Earnings Release Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

Any statements made by the company during this conference call regarding the future constitute forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements importantly involve uncertainties that could cause actual results to differ materially from the forward-looking statements. with or press such detailed releases company's report cause in are in would Exchange periodic company's and the and filings that contribute differences to included the Commission. Factors Securities the are further By obligation update making changes the these no conference this or to date revisions these of the for call. undertakes statements, after forward-looking company statements

It Chief Executive and Thomas McClelland, is President now my pleasure to introduce your host, Officer.

quarter, was we everyone. From encouraging a point the Thank case and and as last on a report, be good afternoon, to growth sustainable you, to path confident have we're of numbers financial continue of view, I profitability. and that

We our have execute profitably new business lot exciting forward. ability and are to of confident going in a

relatively As month everyone under in anticipated large during the contract November. right of the we sooner. should a the other, after making. be X aware, long X getting contracts much announced contracts, were These originally, time And we publicly

Because close end, the able ahead in However, are speak. time, of the we've excellent to ground time to for thus to hit QX. this have so running, been prepare position and after the been anticipated an some in of these occurred contracts

to these reason in every have to execute confident We ability programs our be successfully.

to all, additional in In that we're and the this next experiencing we be growth addition, few believe we smaller All going coming forward. significant anticipate have weeks/months, as trend announcements will to contracts online reason good appropriate. over will make continue and public

new end is holding The are year, steady at orders compared QX me to year. you that operating around Revenue, in Steve margin QX in up fills highlight got on to results the significantly backlog anticipated and this income of details. financial at fiscal November. based million gross steady compared and before last Let on grow the and of holding briefly of the we QX all is $XX to the

on cash profitability have remains of in a sustainable sustained I forward. growth The put going positive our summary, us our and believe core generation in So achieving efforts company to business. trajectory committed

turn Bernstein, will At to more in like numbers go this detail. a point, over CFO, I'd our lot to through who things the Steve

afternoon. Tom, you, and good Thank

XX, fiscal $XX.X to or For for of the or revenue XX% prior the the satellite revenue XXXX, from year. U.S. XX% same million year. to consolidated as of $X.X government approximately compared October in period programs $XX.X the revenue period was follows: ended months fiscal $X.X million The and components commercial prior same million X was are of compared the million

same of XX, revenue of October X revenue year the prior in under Revenues to XX% industrial fiscal $X.X compared on the contracts satellite completion non-space York for recognized and 'XX. period FEI-Zyfer the are payload fiscal recorded the FEI-New prior in consolidated and are months the and other million recorded from York commercial and accounted year; for 'XX primarily to ending $X million $XX.X were segments Revenues method compared the DoD and segment. customers, and which government the are in both U.S. approximately percentage FEI-New of million was XX% for only

technical made The by year fiscal increase fiscal contract was previous related period revenue in period previous compared resolution the awards, and improvements significant to year the for same in of to from the management. problems the

technical increased sustained issues as have forward a in period now resolved related and The more that of XX, margin Previous a same in and near increase prior faced dollar to October fact 'XX, year or margins as margin margin of been the increased The the For that result gross efficiently. the X moving rate increased direct are running compared due revenue. programs year completion the programs many gross 'XX. of fiscal margin to the and rate significantly have the gross completed. gross as technical to months due result, challenges fiscal are ended lower

were an 'XX and XX% of in to revenue. in period X X% as months October prior respectively, expense associated in percentage consolidated for For XX, 'XX, payroll The the XX%, X XX, decreased and due ending costs. months consolidated was 'XX increase ending X ending compared XX, revenue the professional the largely of the October SG&A 'XX due approximately increase months October the months 'XX. and an year to expenses X October to for compared SG&A to sales The as increase fees, ending XX,

October $X.X $XXX,XXX continue for between million of October employees and of was 'XX, R&D expense company at ending to and 'XX X X% due upon its XX, and ending a months X respectively, to availability, the keep approximately future the R&D decreased in to art. primarily $X.X period of X The revenue. XX, invest production decreased months ending decrease were a the XX%, XX, shift in plans scheduling 'XX consolidated to R&D a products of the months the state for depending and necessity. for to million from October development,

revenue, fiscal $X.X months by million management 'XX, year. Operating due margin the For million increased of 'XX. to a in combination the October income ending cost-cutting the effects in XX, company in year $X compared in increase and to X measures operating gross loss income of the of that began an operating reported -- of prior instituted

retired payments approximately deferred from of of derived yields reclaiming made a $X.X This the prior million compared related $X.X be pretax trust is assets. can fixed or income on metals, fiscal year. to assets to income million deferred Interest expense for sale loss the of interest employees. refunds, Other pretax to compensation

per the months the the ending for per prior $X.XX or $XX,XXX year. fiscal X XX, period tax the was compared Consolidated previous $X.X share October months a X of million company to or in recorded share net compared For fiscal 'XX, same a XX, year. October $X.X $X.XX for of loss the to $X,XXX 'XX million ending provision the income

fully ending The year approximately ratio current continues Our $XX April the to was strong million approximately balance a X:X. the 'XX. sheet of a October end $XX compared October capital at million of backlog previous to and 'XX working approximately of XX, $XX position XX, funded fiscal at 'XX for reflect million company's

Additionally, back for soon. is we I the the the company future. and months meet is look debt in needs company next free. The for Tom, to that its investing your XX turn foreseeable and adequate will call to its believes questions liquidity operating the

Thanks, Steve. things for questions. any We'll now turn over

is from Reiss the And today from Janney. Brett first coming Instructions] question [Operator

the the generators, conflicts that using so satellite the our on. Tom, in the are clocks militaries are Starlink opportunities? satellite potential going size program the of that these of sales and satellites that SpaceX are frequency where has atomic our size many Is those

nor Well, this you Starlink tell time, point the in forward. in any satellites on on we I that going anticipated particular, Starlink we can are satellites presence the at none have products -- our do of Starlink

similar these However, anticipate the satellite are launch. will in been are development several do definitely there that these in programs. in that of several And some and various of systems we we involved And other programs. of at stages kind point have talking future to be we

systems system precision we those much Starlink systems. that segment a a big So that that more better developing very there, communication the we much timing one think on opportunity the important, navigation of is provides for are where And important in a opportunity have becomes things, a similar and us. is

to a ability concerned vulnerability about so -- is of the is actually at this time. thing the And People pretty big GPS point take to and GPS this in satellites. thing are out very one

from signals a the more much come signals them. earth satellites jam higher And to jam those to satellites low because orbit spoof signals that level. is are other difficult it's to The much the or the from

a a so programs adding people, a looking very a capability we're And navigation potential looking big those those, we in and are those lot and And opportunity at lot at have carefully. of very, to systems. payload of

people who first already in are These know? and to door? organizations do are your to that that systems, sales your these it have have develop to know they is you get you Or foot someone the looking similar

No. We these. we a number have are, the door do foot in and know already in who they significant our of

is is Chris Chris coming investor. next private from [ The Vachovsky ]. question a

want great now question down did it bit first, quarterly slightly you margins it a was had larger seems you and your basis, little barring income on Congratulations you margin over a operating slightly X items, discussed results. onetime to ask you revenues. go said sequentially? months a the your like on net it's million. a Last million, $X -- did -- bit Because $X under little quarter, was I on But basis. --

Yes. Yes.

things. in anticipate always that's certainly would we're correct. going to I I we -- some point think see fluctuations You the that quarter-to-quarter, But emphasize,

there a those reported there impact those and we events onetime events positive As on that onetime last some quarter. this quarter, had aren't numbers were

speaking, So it pretty the went little realistically, would -- down I I much but bit, characterize would think think I steady. think margin holding I strictly as I the way -- a

would when continuing kind Okay. And into of like that government as contracts? generally increase kind the of business your allow raising and for price the margins that your leverage take with revenues speaking, look does account or economies at

is pretty for that I all we is to continue going we're and government. our -- to But an things the trend. government numbers programs gross subject customer customer, they our that on ultimate strongly Yes. that of margin course, carefully, any pretty of We feel audit our upward the scrutinize think

to that's XX% can X not within months think margin course, But around go we're the that indefinitely. targeting going and get Of there gross we of to we next year. a on

of you -- more that up you you again, That as backlogs anticipate -- you again were shooting backlogs still to anticipate a And sequentially clear, be kind to is Is great deals. correct? hair hear. win down still but

is we that last they're in Same of pretty way. we November, given gone of additionally, literally definitely bit little month It's steady. upwards holding but to -- numbers true, much trend the the what because the that the That's correct. new going of booked over that. would same quarter, speaking, anticipate backlog months, down And business the over our the have characterize next couple definitely a I really and

that hear. of Okay. customer. And the wasn't one or That's a deal? good is them still U.S. government you civilian deals a announced, of military that a deal to Is

a deal. not military It's

it put way. me Let that

enter expect you Do any you way? civilian the markets can in

can sorry, that say again? I'm you

significantly? markets expect to civilian Do into go you

U.S. that from coming It example other satellite the lot there's course, -- that, and -- more in is we release business, will a that always arenas. of that been an the press forward. we be million more of But And and our of biggest contract in there November the more activity $X going talked anticipate has historically of player. and there's we Definitely. -- about been government the

from next question coming Sinnet Capital. Tim is from The Hasara

just want XX% gross to confirm, X I a -- Tom, months you just to you Is I the next wondered, that did year. margins in said correct?

Yes. That's our goal.

to And much would would new that November a announced margin X -- mix the correct? that assume higher there. gross that the contracts Would than Right. help be I you in be

that's correct. Yes. general, In

you'll of completion And percent them with X would I those through respect X approximately guess the to X a you... all are assume book of those years. contracts, I as Can that term.

one actually Yes, the of XX one and is percentage completion. they them but of -- them to closer all months, But -- be is a will X years.

help kind And you guidance? a the the any of more for it on contract Would will of or kind would front-loaded, or estimate linear with respect any of those us -- somewhat quarterly color give booking to model be that. amount back-loaded? basis, of kind Or can

Yes.

say -- more this upfront program. but the a the the pretty think be best of a approximation, would I approximately course would probably to that hard linear I model little but approximation -- it's the bit over linear

question is from ] Frank The is private a Frank coming next [ and investor. Wysenski

out which in people backlog, light, enough must is I'm in and $XXX you November, that at the high, million. about about given you curious current be positive, though. inventories, And contracts new Your these personnel are put efficiently? have have orders on the your to in I Do closing assume. backlog engineers your enough

Okay.

couple of there. a to So highlight things

$XXX at million. all, of the current backlog not First is

when You contract. to the authorized get don't on we we keep mind in get these programs, to under have that amount of contract full spend the

over is happen the the significantly to but up go months, up all So backlog and it doesn't going going it's once. coming at to go

important understand. So kind to an of just -- that's thing

to like I'd a bit. -- that inventory think address I little

money that I the think on with actually you're one. right

coming chain And out I of problems. of the of problems. chain period we inventory in of approaching especially historically part we very as kind benefit. think of pretty where and to important at carefully. to good the supply all these quite the this pandemic much the and out very provided really to we're we're really we're we're as a we point coming -- a be it kind was you're all experienced really down do where But that, that where aggressive we start inventory of to inventory And buffer supply that, significant And That's schedules have really managing right, a it and quite keeping deliver tight inventory. more on want things. and programs,

programs Now get I we think to these quite And in regarding didn't been is these workforce the question that we over benefit engineers. get working last did. tried it's cautiously is my really But hiring point time. that, that this And sooner X we've fact, we engineers, positive what the preparing your frustrating of X that thing to been out some the been the that increasing other statements on, have part in for under and jobs for been on our actually -- opening about X we've programs months. on turned of I contract than these fairly

our in, to we're think, So from execute regard. right really these a optimistic very, the about position ability in very And start. that good very, I'm very effectively I

you a how the little I'm on figured backlog. curious Good.

million. got awards, the You've $XX first say, contract for one

don't been you you that So million, it's take don't take backlog? even in it all the though $XX awarded,

fully take We funded No. only backlog.

in So example, $X $X accordingly. they in let's $XX million fund would they and We a upfront then million progressively say, give that you only million it put just backlog. contract,

$XX contingent is I anything million, that on not like suppose, rest delivered you $X understand. of But the in it's the than other million first mean I I right?

contingent funding only it's just but funded not It's report anything, on and we backlog.

and particular to which $XX million -- a in that the in completion on that's example, months. program, that just So follow up XX that, has

months. think that within the obviously, that it to most is important the And look surface that, that. one So XX a has lot of ways to at backlog than of I next sooner

months, a initial but us lot order few relatively for in was So XX to get for for going have product that to they're just on that quickly. on turn turn money -- our more million that to customer has a in dollars,

In has $XX performance which going do a that upon that is Great. has satellite, of And clock guess demonstration atomic contract that the same the I you when just of expect order, navigation depending on system I confirmation potential to been satellite when the up? vein, million, you demonstration the understand. when effectiveness options receive product a do -- effective?

that think I scheduled currently So is for XXXX.

in even So determined. we that that before well we But time, get would that. point anticipate at anticipate would that potentially would that, certainly

everything Let's just think for I of to customer to working those to with that new realized. and us. the This we're position put a And it is that in important that FEI confidence for customer so so is can way. things doing we one -- get options gain ourselves

I hope. don't engineering program this that and you've on expect past you like fully -- It's any programs had -- in difficulties

do No, not. we

In -- hardware, production on It's reason very that -- is new its every fact, little this. that's successful And very, believe basically one of be very should building there's one. there's this it the development on job. we things. to This

is there it Okay. look orders? quite But with to satellite orders? One Are more nonsatellite Zyfer final quite it for FEI as one Or orders are be at much numbers Or company. impressive how But associated program business? and me. seems is that's well. pretty a that the big smaller business going. Investors going continuing the the

existing work, And in also been are getting completely products. on actually continuing their course, successful of orders new They over quarters couple Yes. very past of stuff. the have new there

moved things turn a actually point ability country surprised really Zyfer around they've So good the at went really looking year ago. their And through in about around. this a Things all to but things us rough time. in were patch they just at are

operations? of And the those the margins structure Or -- is Zyfer the X difference are at any to margin similar in there the satellite? is

Yes.

-- that same. when they're think how you get at I not I there but the different are details the you of think definitely them, numbers look quite the aren't

from Ventures. The from next Pareto is Marema coming George question

your about question a R&D SG&A, had I expenses.

if a me and increase revenues get As way. different let well, near gross -- it ask your margin you

gross like? net look margins get your you approximately If margin towards what would goals,

Steve, one. take let I'll you that

So be consistent. as run the going if is number SG&A there'll down. on income mean, substantially, some you to even to more we a for is fairly of dollar But see, again, formula dollars in down a it went value yes, there. I percentage grow costs getting percent-wise, as

expect that grow. we to unless it stay So current now it substantially where at level things is

Okay.

margin a sales? the And of net so expect you to expand don't percentage as

SG&A? or margin Gross

gross you your margin -- would net be margin. operating a on Well, let's say net does what margin No, XX%, anticipate margin.

have go will up. be And relatively at think, it, to the I same, structure all again, would but the in look I said, cost actual all. I it like will

[ SG&A So X.X% the right now about is quarter. ] a

increase that You to expect much? don't too

No, I do not.

after won the opportunity these do of the right. All here like, you've of of set? couple Okay. a kind big Pipeline? over jobs what next recently, And outlook the opportunity years look couple also

opportunities And really point you them opportunities reality anytime finally we at is overwhelmed we jobs that's imagine we -- got I and working Space that it. on might -- actually with these been in don't turning and just But this soon. for were We time. that The the look some see got time, great. that booming. around is X

Okay.

a So more. lot

wins may in weeks/months. you coming You the some mentioned have here small

won in You them they're you -- pipeline the all already? big are ones there or -- any

big but don't big There happen definitely some pipeline, other things overnight. No. are in things the the

some for in -- of coming to to things of big perhaps. the months, The in. smaller look things we constant I X barrage there's of X think a Some ones, kind materialize

know for as the one. back of the to today? were What you history around materialize. just maybe I the setup huge have really you opportunities, what's a may last prevent difference if there falling now? kind say, qualitatively, similar, some you're didn't was I'd a kind I CEO, years company. Can but XXXX, there between kind there, terms it and apart Since new to of one contrast describe And but you And then? lot many of or compare happened in maybe everything of wins, And Okay. ask with of

in very things good And no are course, Yes, there are guarantees I a think differently. doing but question. we of some life,

of historically, or look development. lot we if of to been those NRE difficulty activity. what as that those very nonrecurring development think challenged the lot we've do with new Historically, into a into, we able on, to we've been programs, engineering had later turn a I we refer when have with profitably, but production,

think pitfalls the I've these years, real is the effort bidding my can programs. I we're feel thing these I really things confident know that some be lot in experience that a have one development and way I and making we we're And And And a I we to hard, made do extent, that these an been in over differently. differently to that awful here involved difficulties. of think we're many And profitable. pushing sure I bid back we think

so that's I think And elements. the of one

just in think is rest the details. kind devil's the I then the of

we I effective nonrecurring production just the if engineering They more on. have that we very are look programs component think these a and have I to them. in think come those smaller historically, been specific have November, at online much

confident we're So regard. that in

of problems the XXXX that didn't in the rest the the think I management think programs I starting really well. it is is top -- of one understand And very just

ball these going And in behind kind making -- ended so to forward. and I'm really in cases. the involved committed didn't think they we I'm effectively X programs, sure some execute that we up just I from And the start of actively

so go take things It's really just And I -- to good going see have a forward. my question. on will think that's But we things. how

as If or like company, here. you give I much quick quarter-to-quarter one guys visibility? visibility and a -- slip don't good on Do one may you look one have have in guidance. costs really what you revenues know guys, last don't I

No, we have pretty good visibility.

a giving guidance ahead? considered you quarter Have quarterly

Steve?

but don't not guide for continue we now. Maybe forward. in As going we will of the now, future,

The Eisner. Michael next Michael is is from question private coming investor. a

do How you this employees at many time? have

We including employees, have point. just this XXX X about all at sites

That's time? full

Yes.

part-time some And you some -- right? also, have

We part-time. some with consultants, have some have contractors. engineering some with work some We contracts outside we and

right. All

first million. people. more hired already The contracts, you the the $XX on technology So $XX The million X? first X, X the and proven the is

Yes.

That's great.

companies, Now more you're you can contracts? with, these can dealing who give business these X they on

Yes.

that like, All in right, could part the done just roughly for million, that years go X million first $XX will through say? of $XX be another example, so, or the

it particular and is case, I to mislead. the sure going over are have contracts satellite forward. company -- going more options I forward. we not don't will want that particular It's had -- that is major many, supplier Well, But in like make a there years, that and contract many many with we

I reason we lead fact, believe to will every program are In contracts for that going have particular with other successful have that, forward. And that to currently do other company. us programs that on satellite if we that

work because should technology using before. that Well, it worked you're

things of This the shortened pointed the and Absolutely. that period. can is of million in U.S. from is the in a test this -- press and deliver time if we this is this period one is out end, to customer but this $XX And a a to beginning of a XX-month way, Yes. program, release ultimate of -- sort in this time. is our see customer government, is course, we

to like same it thing. the do would that to take trying years program half a Typically, We're time. roughly do X this in

a more -- that And lot big behind we we it's can challenge, it. we to if And think so business there's think I I confident do. going we're as but a we're successful, pretty see are be one that this

that's working on this you But at X assume hear. I Well, point, started to contracts, these them. right. good All already

yes. correct, That's

is the it of the When arrived, start you contract just ticking already was didn't today. clock So because came in, date was... everything

all on of these. forward are very We aggressively moving

-- million new before? Or And that technology? had work the $X you that one, did is

is frequency FEI that technology product and That's through new existing qualification not and but testing so that for that's gone has atomic already on. us. standard, forth so an based No,

we And so any it's really that just straight not one a the manufacturing. major anticipate do -- is that difficulties in

right. owns you for the customer? All And who the technology or that,

own technology. the We

Is that contracts? on all X

Yes.

-- they work else? can't make they once to take for them, So someone you the it

No. not. No. Definitely

All right.

one So be million mentioned you X they whole get that more which once? could want... R&D, thing it And $XX you Is over don't you the give at years. is the to key. that They because want

so Well, that But able part be I say careful this because to is a I contract, not -- there's have this a as of we satellite divulge. what information system. lot of we're navigation specific to

the idea be And is will products satellite the this that we're exercised. demonstration a high And a go to contract to are going so that there's if that demonstration successful, is, satellite. probability options deliver very on those on then going

other launch all it's the expensive there's of these about a Now of -- lot programs, considerations. the satellite read in there's keep participation you in satellite are to FEI's very systems, thing of there kind to -- if a these mind, all of kind system, independent

And cause so of there the the control. satellite Those success things our are deliver the that can we that product many ultimate are things than system. problems just for completely of out satellite that for other

nothing of things this down a FEI. go customer And road number system, with do other so have that the reasons could there with not our that are to decide to forward

nonetheless, but of to not have that side possibilities. I -- think, it the can't is course, I think other of those We reasons unlikely which we to recognize go in is have that that But successful on delivering I believe it's are products we're that, if we into that that's to customer. imagine our products obviously, would from work way for be would anticipated, the customer our and you We procure then highly those our somebody or time to else. have don't to try think effective the unlikely, hard cost that, opportunity

this we way we're the can things the So control, position forward of those and or feel good things do financial doesn't is setting we're other that with the a aside it -- system to that we likely and nothing get out look will that is part another, we that part that think in I have set our go aside really products, our of completely one options control because exercised. I that or think very that at of

Just hypothetically. part to it, for can't make may of that something if your attaches And the example that part. would someone example, they that wrong be could make an go

U.S. could I'm not That's but other We've space plans to kind Yes. And was suddenly -- then whole of arrangements -- we've thing that in this over speak gone going satellites of about programs with realm, put launch geopolitical specifically have program, seen the that to wrong. together all go where years, in couple very had the Russian and last of were things the Russia. the are not the good. program

And opportunities disappear. so those launch

are delayed, that and are is kind now And when that delays things system then people scrambling so the world, And to sources out time a become challenging. money investing lot customer things the find making the in other it of and launch someplace goes programs. in more else

that's programs. monkey of into can wrench throw a that by just way example, of things of So other kind these

potentially I the kind I I So that of those kind that are being be probably thing. a this of would imagine negative things here could be But shouldn't think about sitting problem.

commercial programs that systems. pay satellite these to about, earlier, many and you Starlink If people attention there talk somebody the other mentioned are of

there's end up of So number launched. getting that them never good a really

you're X happen. But that with all contracts. these comfortable Yes, always that's can --

Yes.

one And is that X-year that before? the third the you said years X one,

That's correct, yes.

All right.

But go of a these right the smaller couple on. expect over of you work could now, all you couple could contracts next just contracts So do more months? --

correct. That's

this And right? point, All think right. rockets I about SpaceX, the I half launching think, is at

but the number, know exact yes. I pretty they're busy, don't

Yes, it's your not really concern.

all I And to sounds like is product. going revenue up think that's went the this I the It make and just backlog You quarter. to had your grow ask.

been So to it's like years. -- that's always up X.X going

you backlog, they your up for Thank time. while. and there for the go good So job a

next is private Frank from The ]. investor. question Gasser Frank [ coming is a

clock, Yes, since. was ago, but I'm an future you quarters, way? going about something that which several, could, a technology. the to about could elaborate atomic if changer. see particular, much present fact, that not game say mention heard haven't there not In Could years I be in any if on you technology, of in

Yes.

on So we working advanced are currently atomic an clock.

we're In a should That tomorrow of an post our demonstration rubidium improvement the anticipate on for capability these of do customer to clocks. technology, magnitude order government make going of optically in standard. kind fact, one. pumped we that That's

is also. the very applications. believe not But demonstration that work actually terrestrial this it's technology clock, environment effectively definitely something for atomic we space-based we're that that in a Now is doing can tomorrow space do the for

one that's thing. So just

-- -- technologies there us to money the in FEI rather that seeking terms is we clocks technologies for think of even not are that those develop advanced are I internal funding probably we on more other some feasible.

seeking point of funding whether time we this sources So and successful be we'll are see or we year in can X, the that. next at at over external

the are also one emphasis and and performance. we space important think I high addition, In clocks of for pursuing funding with very we very with [ things atomic lower-cost but an internal ] applications, on space is think smaller, is clocks court

lot of to between And we the power, compromise high sweet sweet I've performance. know the the satellite the a on small is previously finding feel that strongly size, low satellite lower So orbit but think find this these the and low right cost these spot talked calls, I the about I spot programs, trick low-cost, for is programs.

is but limited. and terms the satellites and very very, actually think time are Starlink performance seen capabilities low we've is the cost, where many example an frequency of I on of the precision emphasis in

contribution can on satellites, add we much performance And navigation once big make you that's we're think the starts of better necessary. to so become those where and working And that. we component a

I one more aspect The you in in to going test you fact, is in Thank said significant for getting then tomorrow, increase have that, detail. of a very that. much just clocks Yes. short capability? show

appropriately. optimized is. things with what improvement Yes, It measure, improvement going Yes. magnitude an of that, is -- it of to we think of even -- we capable order demonstrate believe over if current going another technology technology capable is that but order that we do magnitude more. roughly our even by X of to of We're are products we're typically

to this whatever to development, keep possible, certain on and and the performance best You do a but get it's certain keep need possible. get to you there's on in you the are It's below just amount, have there weight so do have the the a best the size performance over below particular forth work not to -- to mind a wide dissipation temperature amount, certain has power amount below so a range. --

And constraints up achieved the given be so It's can we we are. have in. we performance the operate where to where that's that that end

remove particular the yes, we do example, see better. that so improvement. if this we performance application, of much the But and significant do this particular And can one very in some on particular is depending we a application, we application, have constraints the

from The is is question coming Johns a private next [ Richard investor. and Richard ]

price earlier processes. talking about winning you the you you the I your as changes that Tom, large you're characterize contracts? were bidding on further. in contracts contracts, Would could expand and a wonder fixed if little small

on to are time, general, contracts. bidding cost we're time of in have the fixed-price But it's contracts. contracts fixed-price from contracts. plus We Most do,

me say, of beyond I think just XX I've yes, let think that, in that, been here I almost on years. expanding terms for things

have a business and think customers our of do have good I what of experience I of that and our and good forth on pretty on. a achieve I and So what we And can think and I are so needs the sense I pretty so these programs. a lot understanding have

things. some virtually part think knowing we that's else think if away. regard not else So nobody cases, the about of be cases, can because to the are, we And in sole trick just And giving I are the shouldn't we've working source go the in a tow been in source, And I capability is or has sole needed. this to the product to I how very anything nobody think technology that those demonstrated line. deliver provide, we hard

invest there's potential want we opportunity something -- in and -- maybe there'll participate want a in to we idea the have business In it's other we sure we a look that make to that. there's forward at be that with to significant can to cases, And forward. that going new going have we development the

of things a the are. is enough think so I And good trick where having understanding

really taken lost particular we whatever, you, can there's where was but end have and new tell invest And gotten could program the just last the we of there not hand, I cases did program. where on the that. would that invest the sense those, it we that. do a risk have we And I On program. just in we sense doesn't knowingly. any in those potential, what can a make doesn't wasn't to money. lot We beyond competition, lost it it's could've or taking But to year, much and And we programs, other taken, up to make there program kind specific much a know of of potential one-shot over know think we

I helpful don't if know that's answer. So a

-- to taxes. compared And sounds question is like another process expect there. They that do kind recent of I when that as the your the around back to rate back more tiny what it going with get carryforwards? I in the fashion. because the about rate? you do Do reasonable in that's historic you you're -- you tax were or quarters Yes, a if go as very to of was think believe about income in you'll a rate. mid-XXs have When loss tax

last tell But bunch while. couple performance see of a I in using have going run NOLs of things do a for predict will We now will because can't NOLs forward the as nature. exactly The that be years, NOLs. mandatory of of that and is is the can when tax the we're -- paying state taxes it out. you, you I we we

We Jeffrey have question Mulholland a Capital from coming Cohen from Management.

callers have as appreciate other all reflected. color I the

contemplate? talked margin run target that Just quarterly sort about above XX%. real quick, you rate would gross the What revenue of

Steve, you do want to...

We the margin. don't will it And get revenue We we -- will the believe and we're the how efficiency fully long there, from see we'll growth grow. to from not guide term. ready grow

margin mean, I I must you in there. you your of if But XX% revenues is underlying appreciate No, to assumption what sort of gross target, terms get Yes. that. have of need some sort

So question. that's my

Well, on goal. things a think revenue I don't based target it's that because I'll not put really particular differently is --

how margin it that that talked new I new question of lost. I a business. of XX%, particular really in just when for bid we it. business the we're made target didn't case. that bidding that particular target sense it's about get And is XX%. that's is at And gross think based the we a contract -- we And because And that's

lower some bid there gross good going because Now and really we're cases things. where be reason kind we're a to do margin targeting going to there that's are in is of at approach But to to that. general, baseline XX%,

on that -- not based revenue not really it's assumptions. a is And particular

goal getting Okay. so you're clear, talking gross margin your necessarily XX-month being X- not contracts. your about on But just you're I'm to XX%

quarterly about to talking You're able being that correct? report, show in a

the sure I'm understand there. not I quite distinction

Well, a between I margin distinction at results. down financial think a and there's that XX% actually bringing bidding a project your to gross

Okay. That's certainly true.

put that talking And I so correct? latter, about when you out you're mean... the target,

Yes.

Yes.

in or sales or some of outstanding you that? Can amount way bidding funnel your The bids the all? quantify Okay. quantify activity at

pretty prepared at qualitatively, to point I in Qualitatively, is do that think the I full very don't fashion. this think meaningful in a time. I'm very pipeline

not bidding to of this things position -- amount a put tremendous a on. time. activity a going dollar on But I I'm have yes, at in amount really We total

basis just Okay. on you lot a you would roughly? what curious, I -- a And Can they be Steve, said you have cumulative was of NOLs.

I'll don't I or exact take. million, have give it's but $XX the say approximately number,

now that And would McClelland the to we to for closing remarks. that's hand questions all call the had. back I Tom like of

you. Thank Okay.

much. I think I participation. at Thank we've I'd healthy like it. while everybody been point a happy And time. for to call that's quite wish everybody's holidays and in appreciate on and the this you very

today's This you. does conclude conference. Thank

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