Q1 2020 Earnings Call
So starting your talk today, Please press star zero.
Ladies and gentlemen, thank you for standing by welcome to Comtech Telecommunications Corp, first quarter fiscal 2020 earnings conference call.
At this time, all participants are in listen only mode.
Later, we will conduct a question answer session.
At that time, if you have a question you will need to press the star one on your push Oh.
As a reminder, this conference is being recorded Wednesday December 4th 2019 I.
I would now like to turn the conference over to Mr., Jason de Lorenzo Comtech Telecommunications. Please go ahead Sir.
Welcome to the Comtech Telecommunications Corp. conference call for the first quarter fiscal year 2020.
On the call today, our Fred Kornberg, Chief Executive Officer, President of context, Michael D. porcelain, senior Vice President and Chief operating Officer.
Michael body Chief Financial Officer.
Before we proceed I need to remind you of the company's safe Harbor language.
Certain information presented in this call will include but not be limited to information relating to the future performance and financial condition of the company.
Companies plans objectives and business outlook, and the plans objectives and business outlook on the company's management.
The company's assumptions regarding such performance business outlook and plans are forward looking in nature and involve significant risks and uncertainties.
Actual results could differ materially from such forward looking information.
Any forward looking statements are qualified in their entirety like cautionary statements contained in the company Securities and Exchange Commission filings.
He is now to introduce the Chief Executive Officer, <unk> President of context, Fred Kornberg Fred.
Thank you Jason.
Good afternoon, everyone and thank you for joining us in the school.
Today, we will be discussing the results square off first quarter fiscal 2020.
As you can see from our earnings announcement, we're off to a great start.
We believe outperformance to date.
It's a solid foundation for what we anticipate.
Year of both revenue.
And adjusted EBITDA growth [noise].
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We're increasing our targeted fiscal 2020 net sales to be in the range of approximately $712 million to $732 billion.
We're also increasing our targeted adjusted EBITDA to be in the range of 99 million.
I Didnt $3 million.
Also targeted is a GAAP diluted EPS range of approximately $1.28 to $1.42.
As you can see a strategic initiatives are paying off and fiscal 2020 is looking very very strong.
Now, let me turn the call over to my body, our CFO , who will provide a discussion about first quarter financial results.
After that Mike porcelain, Oh, COO will provide a discussion of our business segments and an overview of our recently announced planned acquisition.
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And then I'll come back before opening it up to questions and answers.
Now, let me hand, the call over to Mike Mike Mike.
Thank you Fred and good afternoon everybody.
Our net sales for the first quarter fiscal 2020 $170.3 million. This is an increase from the $160.8 million net sales reported in Q1 fiscal 2019.
From a geographic perspective net sales in the first quarter of fiscal 2022, U.S. based customers were 76.9% of total net sales with 23.1% to international customers.
Bookings for the first quarter, where solid at $135.6 million and all consolidated book to Bill ratio was pointing.
As Mike porcelain will discuss.
This does not include the full amount of certain contracts either one or that we have been informed we will receive shortly.
We finished the quarter with strong backlog of 648 point Threemillion.
And when you factor in the total unfunded value of certain multiyear contracts that have been awarded to us.
But which are not yet in our backlog, we have visibility into approximately $1 billion.
Total potential future revenue.
Our gross profit percentage in Q1 fiscal 2020 was 37.3%, which reflects an increase from the 35.9% achieved in the first quarter fiscal 2019.
The increase in gross margin percentage was almost entirely driven by product mix changes as a result in the significant period over period increase in net sales in our commercial solutions segment, which historically at cheese higher gross margin percentages that our government solutions segment.
Looking forward and no different than what we said during our yearend conference call. We expect our gross profit percentage in fiscal 2020 to be about the same what perhaps slightly lower than fiscal 2019.
The ultimate percentage will be driven by final fiscal 2020 product mix.
GAAP SGN expenses in Q1 fiscal 2020, or 31.9 million or 18.7% of consolidated net sales as compared to 31.8 million or 19.8% in Q1 fiscal 2019.
We continue to invest in marketing and sales activities and based on our current spending plans continue to expect total GAAP SGN a in dollars to be higher and as a percentage of consolidated net sales to be slightly lower than a 19.1% recorded in fiscal 2019.
During Q1, we also refine some of our estimates associated with the repositioning of our location technology solutions in this regard.
Accorded a point 2 million of related charges in Q1, a fiscal 2020.
Turning to research and development expenses, we spent 14.9 million in the first quarter fiscal 2020.
8.7% of consolidated net sales.
Oh. This amount 12.9 billion was spent in our commercial solutions segment and 1.9 million was spent in our government solutions segment with the balance representing representing amortization stock based compensation in unallocated.
We expect to continue investing in R&D in fiscal 2020.
As such we continue to expect R&D expense in dollars to be higher and as a percentage of consolidated net sales to be slightly lower than the 8.4% for fiscal 2019.
Total stock based compensation expense, let's point 9 million.
And amortization of intangibles was 5.2 million in the first quarter fiscal 2020.
Looking forward and excluding the impact of the pending you H.P. acquisition, we continue to expect amortization of intangibles to approximate $21 million.
Our consolidated GAAP operating income for the first quarter fiscal 2020 was 9.3 million or 5.5% of net sales.
Excluding 2.4 million of acquisition plan expenses and 200000 of estimated contract settlement costs operating income would have been 11.9 million or 7% of consolidated net sales.
Looking forward and including an additional $2.4 million of acquisition plan expenses expected in Q2, we believe that GAAP operating income will still approximate 7% of expected fiscal 2020 net sales as compared to the 6.2% we achieved in fiscal 19.
Our adjusted EBITDA was $20.6 million were 12.1% of consolidated net sales for the first quarter of 2020.
On a segment level adjusted EBITDA for Q1 fiscal 2020 in our commercial solutions segment was $16.6 million or 17.6% of related net sales and in our government solutions segment was 8.2 million or 10.8% of related that sets.
When adding it all up we anticipate adjusted EBITDA in fiscal 2020 to be in a range of approximately 99 million to $103 million or as a percentage of expected fiscal 2020 net sales to be approximately 14%.
As it as the year progresses, if order flow remains strong and we can achieve all of our fiscal 2020 goals, we might be able to achieve higher financial results than the targeted amount.
Now, let me talk about interest.
Taxes as cash flows in our balance sheet interest expense was $1.8 million into first quarter for the year. We continue to expect interest expense to approximate $7.5 million.
Our current and expected fiscal 2020 cash borrowing rate, which excludes the amortization of deferred financing costs approximates 4%.
Excluding a 600000 dollar net discrete tax benefit.
Our effective tax rate was 23%, which is what we expect for fiscal 2020.
On the bottom line GAAP net income in Q1 fiscal 2020, 6.4 million or 26 cents per diluted share.
Excluding acquisition plan expenses estimate a contract settlement costs and net discrete tax items in the first quarter.
Our non-GAAP net income for Q1, a fiscal 2020 was 7.8 million or 32 cents per diluted share.
On a GAAP basis as Fred mentioned, we're updating our fiscal 2020 diluted EPS target to be in a range of $1.28 to $1.42.
Excluding all fiscal 2020 acquisition plan expenses estimated contract settlement costs and net discrete tax items non-GAAP EPS is expected to approximate a range of $1.42 to $1.56 ultimately fiscal 2020, GAAP EPS will be impacted by the final amount.
Of acquisition plan expenses and other adjustment items that may occur during the year.
We achieved strong operating cash flows a 5.4 million during the first quarter fiscal 2020, while we continue to expect some buildup of working capital in fiscal 2020, given our growth. We continue to expect to generate somewhere between 50 million and $60 million of cash flows from operations in fiscal 2020.
As the year progresses, we will fine tune this amount.
Our balance sheet as of October 31st 2019 includes $46.9 million of cash and cash equivalents.
Our total balance outstanding under our credit facility was $169 million.
Our balance sheet has plenty of flexibility and our current secured leverage ratio as defined in our credit facility was 1.75.
Before turning it over to Mike Let me give you some additional color on the financial guidance, we provided in our press release.
As we have stated before comtechs fiscal quarters, often have some some unevenness for lumpiness to them.
Based on anticipated product mix and timing assumptions, we expect our second quarter consolidated net sales to range from 168 million to $170 million with adjusted EBITDA, ranging from approximately $19 million to $21 million.
Our fourth quarter fiscal 2020 is still expected to be the peak quarter by far for consolidated net sales GAAP operating income GAAP net income and adjusted EBITDA.
Such targets reflect several items, the timing of which can still shift an impact our expected quarterly and annual financial performance. In addition, the aforementioned fiscal 2020 financial targets do not include the impact of the pending acquisition of you HP or the impact of any other expense we may incur.
In order to achieve our strategic objectives.
Overall Q1 was a great quarter in fiscal 2020 continues to look better than fiscal 2019.
Now I will hand, it over to Mike for something like.
Thank you.
Given the various global news headlines relating to political volatility in trade wars I'm quite proud of or Q1 performance I believe outperformance is evidence of the market leadership that our products have substantially it's my belief that customers will increasingly turn to us to fulfill their needs for secure wireless communication.
Let me give you some color by segment of our Q1 performance.
Commercial solutions segment. It was a great quarter net sales were 94.3 million compared to 78 million last year, a significant increase of 20.9%.
Bookings in this segment was 75 million for the quarter, resulting in a book to Bill ratio 0.8.
Our satellite ground stations technology solutions, which consists primarily of our modems and amplifiers, both solid state and Tw T.A. that are used in satellite communication higher net sales this quarter as compared to last year.
It was a good quarter for sales to both U.S. government and international customers and our highest products continued to gain traction.
During the quarter, we announced that our heights networking platform was selected by Telefonica, one of the largest telecommunication companies in the world for a number of their customers for multiyear program to upgrade vivo, Brazil, and the telephone like Argentina mobile networks and supportive there are two G threeg and LTE cellular backhaul.
We believe this contract bodes well into Latin American market, and we hope to replicate this contract elsewhere around the world as mobile operators increasingly needs systems that can handle more capacity.
As we have said before based on the anticipated increase and the number of satellites, both high throughput or HTS Leo satellites expected to be launched we believe that we are in the early stages of a multiyear period the growing demand.
In fact during fiscal 2020, we expect deliveries to increase on a previously received 20 million dollar order for K and V band TWC age to support the new Jupiter High speed satellite network.
Given the increasing need tobacco cellular traffic across remote areas around the world. We made a strategic decision this quarter to expand our satellite Earth station product line.
Specifically, we entered into an agreement to acquire U.S.P. networks, a leading provider of innovative and disruptive satellite ground stations technologies for purchase price of approximately 40 million of which 35 million is payable in cash and 5 million is expected to be paid in restricted stock.
You HP is based in Canada has developed revolutionary technology that is literally transforming the very small aperture terminal, where vissat market for instance, U.S.P. offer satellite modems, which kept can process up to 450 megabits per second.
Good traffic processing over 190000 IP packages per second.
You, which p. modems have remarkably low TDMA overhead as compared to other TDMA providers.
You HP is disruptive technologies were developed with a blank sheet of paper and our own.
Covered by legacy TDMA methods in simple terms their implementation of TDMA technology can result in a 20% efficiency over other TDMA implementations at a much lower cost.
Seeing design from the ground up.
Your wage P. satellite rattle routers are you truly universal and can switch on the fly between modes using multiple configuration profiles that are built into the device.
As universal flexibility allows mobile network operators to expand cell phone service to rural areas with full and highly efficient coverage.
The acquisition of you HP provides a low price point within our product roadmap and is unlike anything we have ever offered before importantly, we expect to integrate you each piece TDMA technology into our industry, leading heights platform.
This exciting combination provides a clear roadmap for our customers who have a variety of cellular backhaul and six enterprise needs.
Make no mistake, we are excited about the growth that we expect from this acquisition and overall believes that this product line will grow from current levels over the next several years.
Now, let me turn to our public safety on location technology product lines, whose first quarter fiscal 2020 sales in aggregate were significantly higher as compared to the first quarter fiscal 2019.
Here fiscal 2020 is also shaping up to looked like a terrific year.
Our fiscal 2020 use definitively benefiting from our fiscal 2019 acquisitions in particular customer reaction to our solar come acquisition remains very positive in fact in November 2019, we announced that sold account will provide coal handling systems and solutions as the initial answering points to the and.
Tire country of Australia today solar calm has been deployed around Australia and is expected to handle more than 8.9 million emergency telephone calls so to me there each year.
During fiscal 2020, we expect to enable our version of advanced mobile location or AOL technology, and Australia. This will enable emergency services personnel to more accurately pinpoint the location of people calling for mobile devices.
For those of you familiar with companies like a rapid SLS in simple terms. This is our version of it and we have been plans for it.
In the future, we will rollout multimedia contact options for messaging and video calls.
Overtime, we will be able to leverage these technologies to our existing customers and to new customers both in the U.S. and elsewhere around the world.
Acquisitions solar calm, although occurring just less than one year ago. In my mind is certainly a success a success.
We're on track to meeting our objectives and we have started to cross market the solar cars.
Several legacy customers, who are using older technologies.
With the recent acquisition of solar calm in the Gd 911 business contact has emerged as one of the largest next generation 911 contract holders in the United States.
As an example during the first quarter fiscal 2020, we were awarded an 18.4 million multiyear contract extension to provide FCC mandated enhanced 911 services, the Comcast and major U.S. voice over IP telecommunication carrier such contract extension highlights our expertise for these types of solutions.
Looking forward, we have a strong decent backlog and growing opportunities and end markets for the for conditions remain.
Competitive, but very healthy.
All in all given the product leadership shrinks, we haven't our commercial solutions segment. We are optimistic that this segment will grow for many years ahead now let me turn to our government solutions segment.
Net sales in this segment were 76 million in Q1 of fiscal 2020 as compared to 82.9 million in Q1 of fiscal 2019.
Net sales of our mission critical technologies were lower as compared to last year due to the absence of approximately 8 million a sales made last year for B of T. Two satellites terminals as previously announced we do not expect any such sales in our fiscal 2020.
Net sales over high performance transmission technologies. During this quarter were higher than the three months ended last year driven by increased sales of our solid state high power amplifiers and related switching technologies as well as increased sales of our Troposcatter technologies, including our modular transportable transmission system.
Or MTTS Troposcatter terminals.
Bookings in our government solutions segment for Q1, a fiscal 2020 came in at 60 points 60.6 million.
Everyone knows period to period fluctuations in bookings is normal for this segment in this regard bookings this quarter do not reflect the full amount of orders expected from a large us army global field support contract that we won or any amount from a forthcoming multimillion dollar contract to provide troposcatter equipment for use by the U.S. Marine Corp.
As announced in October 2019, we were awarded a contract with a $98.6 million shooting from the US Army, which calls for our mission critical technologies product line to provide global field support services for military satellite communication terminals around the world.
The field support contract covers diverse engineering and technical skills to support the satellite terminals, including logistics helped US network Engineering Security Engineering, RF and satellite system engineering and support.
Through October 31st 2019, the contract has been funded at only 24.4 million with additional funding expected to occur across the 12 month performance period, plus it possible six month extension period as such additional bookings in future quarters are expected.
In addition, we were pleased to learn that during the early part of our Q2. The U.S. government announced that are teaming partner on the U.S. Marine Corps Troposcatter opportunity was awarded a 10 year $325 million I'd like to contract.
Our team in partner announced that it intends to subcontract subcontract, the manufacture and delivery all 172 Troposcatter systems. The content and we are currently negotiating contract terms with them.
Which we expect to be finalized soon.
None of the expected contract award is currently in our Q1 bookings number.
Our backlog.
We believe this multiyear opportunity validates contacts market, leading troposcatter technologies and expertise and bodes well for the future as we continue to see strong demand for these products.
In summary, although still early in the year fiscal 2020 is looking like on loan growth for our government solutions segment.
Before turning it back to Fred I do want to reiterate a few remarks about our recent success on our go forward strategy.
Our fiscal 2020 results are cooley anticipated to benefit from the greater scale more diverse earnings and expanded participation into growing markets that we set in place over the last few years.
We believe our strategy of investing in marketing research and development and focusing on both organic and acquisition growth as unquestionably proves successful in fact, as we sit here today over 400 million or 60% over 2019 revenues did not exist in fiscal 2015.
Software sales are increasingly becoming more important and today. It is fair to assume that approximately 50% of our commercial solutions segment revenues were 25% of the total companies revenues are now software base to me this is impressive.
We believe our strategy, we're deploying cash in capital for acquisitions is also paying off.
Finally, we have successfully completed three acquisitions Tcs solar calm and G. D. Next generation 911, and as announced in November 2019, we are working to complete our fourth with you HP and we have also other deals on the pipeline.
From our perspective acquisitions bring more programs more capabilities that will allow us to achieve more profitable revenue growth that we could achieve by ourselves.
We have demonstrated with our recent acquisitions, we only intend to do acquisitions that we believe fit into our culture and values and ones that we believe can deliver long term positive results for our shareholders.
Finally, one last comment which is a repeat from what I said back in September of 2019, when we released our fiscal 2019 results.
When I sit back and look at contact with one key data point that I find is a great Testament to our strength is our operating cash flow here, we've generated over 185 million of gas operating cash flows over the last three fiscal years timing. Aside we expect cash flows to grow from current levels I am optimistic that our future is.
Right for many years to come.
Now, let me turn back to Fred Who'll provide some closing remarks, Fred Thank you Mike.
And as you as you heard those truly with some positive developments that Mike mentioned.
And bode well for a future.
And illustrate the earnings power of our business and our product leadership positions.
As I mentioned previously I'm very pleased with though have business is performing in fiscal 2020 is expected to be another terrific year for context.
I'm confident that we're looking at sustained growth for years to come.
With one quarter of fiscal 2020 now under our belt, we continue to have.
Visibility lots of optimism and strong business momentum.
We believe that in an environment of increasing market demand for global voice video and data usage customers will increasingly turn to contact to fill flow deal needs for secure wireless communications.
Given our strong business outlook.
Board of directors declared a dividend for the first quarter fiscal 2020 of 10, plus 10 cents per share payable on February 14, 2022 shareholders of record at the close of business on January 15th 2020.
We continue to believe our dividend program is a great way to return capital to our shareholders as we grow our business.
Now I'd like to proceed to the question and and superior of our conference call operator.
At this time, if you would like to ask a question. Please press the star and one on your Touchtone phone.
You may withdraw your question any time by pressing turnkey.
Once again, sorry to ask a question.
Well take our first question.
Asian merchant from Citi. Please go ahead.
Hi.
Good evening, everyone and.
John results so congratulations on that.
Thank you please help us understand what the impact of.
Danny growth in a year on year that you guys delivered.
For the current quarter and how we should think about the impact of acquisition I know some of them are still to be close you asked you HP attention, but how should we think about.
Acquisitions are impacting your guidance for the year.
And then.
Certainly for the for the quarter year over year, I mean solar com is a very small acquisition. So you can think about it being a few million dollars of of revenue in the quarter or with the rest being entirely organic well and I think that trend will will continue throughout the year.
Our guidance doesn't include do you HP acquisition.
It's not expected to close until late Q4 ish and a you know when when we know better on the timing, we'll we'll let you know about the impact.
Okay, great. Thank you.
And then input.
We'll take our next question from Mike Latimore from North Northland Capital. Please go ahead.
Hey, congratulations great quarter.
In terms of the.
The deal with the Marines, how should we think about that you know.
Well you kind of get the deals signed this quarter than it shows up in booking this quarter, how should we think about booking following from that that potential that delta.
I think we expect to sign the contract.
Without part that this this quarter.
And.
Any kind of way to framed the opportunity for you within the broader contractor.
Yeah, I think as everyone knows the contract for both our partner and ourselves.
It is $325 million over 10 years.
And we believe that's just the start for 172 terminals.
I think.
If I could give approximately you know the amount that the partner will have and we will have I think it's somewhere probably it will turn out to be somewhere but half and half. So I think our expectations would be to eventually get into.
About half the half the contract now having said that the first portion of the funding. That's that's available to US right. Now is slightly different we are the so hardware supplier for this program other than the antenna.
As we supply everything else in terms of product product base wears out part and then provides the the miscellaneous stuff like trading.
Any of the IP designs, and so forth and so on and also provides the antenna as well.
So having the first $30 million funding.
Government has decided to kind of by I believe it's 30 terminals. So we will have at least a portion of 30 terminals to supply.
And there will be a lot of the trading and portions of the contract upfront, which probably will.
Result in our getting maybe 12 to 14 million of the $30 million.
Okay, great. Thanks, and then.
In terms of the I just kind of the.
Nics commercial versus government.
This here, maybe just longer term view you know what how should we think about kind of that mix you know overtime.
Well right now.
Does it go back to last year, where we did about 53% on the commercial side I I just was pure expectations of gross we think that that will start to tick up.
You know from 53% may be against a 55% or so for the year and that and that is again without without the impact of the the U.S.P. acquisition, maybe 55, 56%, but I think on a trajectory path.
We're seeing tremendous gross underlying demand I guess is the better word in terms of our commercial products. So at some point yeah. It does.
Depending on the timing this of large U.S. government contracts.
That could always changed a percentage, but right now we seem to commercial business, which is.
Has a higher percentage of profitability.
Sort of increasing I guess at us slightly faster rate than the the government business.
Okay, great. Thanks congratulations.
Thank you.
Our next question George Notter with Jefferies. Please go ahead.
Hi, guys. This is our Kyle on for George Thanks, a lot for the question.
I guess I wanted to circle back to the comment you made about our organic growth ex acquisitions is there. So the Judy Judy I T acquisition is their revenue from that in this quarter and if so how much would that be and what should we be thinking about that and the overall.
Thats exercise around organic growth.
Well, yeah, I mean, I mean, that's just organic growth I mean, if you're right remember contact announced that it 100 million dollar contract.
From the Commonwealth of Massachusetts for five years and in connection with that when we we bought the employee base of the general dynamics I mean so.
Well, we won the contract. So again I think I think from that perspective, that's not acquisition related so the only true impact to our our results. This year from our perspective is the impact of the solar come acquisition, which I can say is.
Couple of million dollars or revenue this quarter, but it's certainly growing at a rapid rate.
Okay. So there was DDIY ti revenue in the year ago October quarter, if we look at the top line results.
Yeah, whose revenue in this quarter you absolutely.
In the in a year ago October garner.
No. We didn't know we didn't when the contract until Q3, Mike. So we wanted in April . So Q4 had the you know revenue associated with that contract, but if you might remember.
The million dollar contract that we announce actually started August 1st of 2019. So there's the revenue from 900 million dollar contract didn't start until this quarter.
Okay I got it so sequential growth it should be well in the numbers year over year man and do a little map on that okay fair enough.
So commercial was a lot stronger this quarter than you'd expect expected do you expect the next to flip back the other direction considering there wasn't a big change in that sort of top line guidance for 2020.
No I think our Q2 and Mike gave out the numbers I think our Q2 for the moment is going to be almost exactly what we did a Q1 at the numbers any data gave us.
Okay cities. So should we expect the government solutions mix to remain a bit lower than.
I guess, we had been expecting.
Hello, again, it kind of around the level, it's been in Q1 and into Q2.
Oh, Yeah, I mean, again I would say look at it from a year perspective, I mean, our business still changes quarter to quarter.
Ken have.
Changes just between quarter based on fielding schedules in deliveries, but I I think for the year, we're expecting the government business to be somewhere around 40, 445% or so of of revenue for the year and yes, I mean Q2 in aggregates gonna look a lot like to wounded.
Okay. Thanks, and then thinking about gross margin can you give us a sense for the rest of 2020 on a segment level and whether there's any change there I know you had been talking about flat slightly down I'm, mostly in the commercial segment due to kind of the heights ramp and it's an 18 Ti revenue coming out and then I guess government being stable through the balance of the year is.
That you know generally consistent with the way you think about an hour that is there anything to call out there.
It's a fairly consistent of how we're thinking about it last quarter as well.
Okay great.
Then one last one.
Book to Bill trends seem like they.
I mean, you made the comment about lumpiness, but it seems like there are a bit slower year over year.
Have you seen them pick pick back up since the close this past quarter.
What's driving the bit of the slowness do we need to kind of see some of these.
Big backlog items enter the the order flow on before we see that pick back up.
Well I wouldn't describe our bookings are slow.
At all you know in fact, I like I said that our bookings this quarter of two large contracts has the we're aware of that just from a timing perspective, earning aren't in the quarter. So there are a number of large opportunities that are out there to whom we've actually you've announced since then so I would not get caught up on any particular quarter quarter number.
You know, we definitely feel we're on track for an excess of one over the year.
Okay, Great one last thing.
The Troposcatter <unk> program being a 10 year program do you have any expectation for whether that's front end loaded or flat throughout the tenure program period anything you can you can give us about when it starts or what the trajectory might be I.
I would expect that didn't have the chance to be front end loaded.
Well, we think from the initial hardware that Fred was talking about you know we're expecting some of that to kind of thing in our Q4. This year from a timing perspective, and then yeah. It's just something that we have to work through what our partner in the government on the rest of the deliveries, but we've ever be me too premature to talk about how thats going to how thats going to work yet.
Okay, all right great. Thanks, a lot.
The reminder, status star and wanted to ask a question.
Well pause another moment to allow for questions to Q.
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Yeah.
No further questions at this time.
Okay. At this point I Wonder if you wish happy holiday in a happy new year.
Loyal customers and business partners are dedicated employees and business unit leadership teams, our board of directors and our shareholders.
And then well and thank you again for joining US today, we look forward to speaking with you again in March Thank you very much.
This concludes today's program. Thank you for your participation you may disconnect.
Hi.