Q2 2020 Earnings Call
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Ladies and gentlemen, thank you for standing by welcome to the Comtech Telecommunications Corp. second quarter fiscal 2020 earnings conference call.
At this time all participants are in listen only mode. Later, we'll conduct a question and answer session.
That time, if you have western you'll need to press the star and [noise].
Your push button phone.
A reminder, this conference is being recorded on Wednesday March for Fortune 2020.
I would now like turn the conference over to Mr., Jason de Lorenzo of Comtech Telecommunications. Please go ahead Sir.
Thank you welcome to the Comtech Telecommunications Corp. conference call for the second quarter of fiscal year 2020.
With us on the call today, our Fred Kornberg, Chief Executive Officer, and Chairman of the board of Comtech, Michael D. porcelain, President and Chief operating Officer, and 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 the company's plans objectives and business outlook and the plans objectives and business outlook of the company management.
The company's assumptions regarding such performance business outlook and plans or 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 by cautionary statements contained in the company's Securities and Exchange Commission filings.
Please now to introduce the Chief Executive Officer, and Chairman of the board of Comtech, Fred Kornberg Fred.
Thank you, Jason and good afternoon, everyone and thank you for joining us on this call.
Today, we will be discussing results for a second quarter fiscal 2020.
As you can see for my earnings announcement, our operating <unk> operating results were solid with strong performance on the bottom line.
[noise] I have to say that despite the sudden an unexpected deterioration.
In business conditions caused by the Corona virus that occurred during our second quarter fiscal 2020.
Companies businesses have performed very very well.
Our second quarter was another busy quarter for Comtech, we announced several large an important contract awards as well as our strategic acquisition of July [noise].
Looking forward.
Although the second half for fiscal 2020 will be more challenging than we originally expected we will remain focused on our business execution.
Acquisition integration efforts and positioning our company for a strong fiscal 2021.
To that end, we have updated though.
2020 financial targets to reflect our current assessment of business conditions and the rebounds, we expect.
Targets do not include the impact of our and pending acquisitions of Gilad and usage fee.
At this time, we currently estimate consolidated net sales to approximate $712 million.
And adjusted EBITDA to approximate 99.
Million dollars.
Or approximately 14% of consolidated net sales.
We also now anticipate GAAP diluted DBS of approximately.
Oliver in eight cents.
So overall, despite the negative impact of the Corona virus, we still anticipate fiscal 2020 being a year of both revenue and adjusted EBITDA growth.
Now, let me turn the call over to Mike Bond, the our CFO, who will provide a brief discussion of our second quarter financial results. After that Mike porcelain will provide a discussion about business and then I'll come back before opening it up to questions and answers now let me the handed over to Mike.
Please.
Thank you Fred and good afternoon, everyone or net sales for the second quarter fiscal 2020 were $161.7 million from a geographic perspective net sales in the second quarter fiscal 2022, U.S. based customers were 78.1% of total net sales with 21 point.
9% to international customer [noise].
Bookings for the second quarter were 101 hundred $51.6 million of and our consolidated book to Bill ratio was 0.94.
We finished Q2 with backlog of $638.3 million and when you factor in the total unfunded value of certain multiyear contracts that we have received after which we expect future orders, we have visibility into approximately $1 billion of total potential future revenue.
Gross profit percentage in Q2 was 37.5%, which reflects a slight increase from the 37.3% achieved in the second quarter fiscal 2019.
Due primarily to product mix changes as a result of the period over period increase in net sales in our commercial solutions segment, which historically achieved higher gross margins in our government solutions segment.
Based on expected bookings the timing of outperformance on orders and the mix of net sales between our commercial solutions and government solutions segments. We currently expect our consolidated gross profit as a percentage of consolidated net sales for fiscal 2020 to be the same or slightly higher than the percentage.
We achieved in fiscal 2019.
The ultimate percentage will be driven by final fiscal 2020 product mix and revenues we achieved [noise].
Gap selling general and administrative expenses in Q2 fiscal 2020 or $29.4 million or 18.2% of consolidated net sales.
We continue to invest in selling and marketing activities and based on our current spending plans expect total fiscal 2020, selling general and administrative expenses in dollars to be higher and as a percentage of consolidated net sales to be similar to the 19.1% recorded in fiscal 2019 Tom.
Turning to research and development expenses, we spent $13.7 million in the second quarter fiscal 2020 or 8.5% of consolidated net sales.
Oh this amount 11.9 million was spent in our commercial solutions segment and $1.7 million was spent in our government solutions segment with the balance representing amortization of stock based compensation in our unallocated segment.
We continue to invest in enhancements to existing products as well as a new products across almost all of our product line.
Based on our current spending plans, we expect fiscal 2020 research and development expenses in dollars and as a percentage of consolidated net sales to be slightly lower than the 8.4% in fiscal 2019.
Total stock based compensation expense was $1.2 million and amortization of intangibles was $5.2 million in the second quarter fiscal 2020.
Looking forward, we now expect amortization of intangibles in fiscal 2020 to approximate $22 million.
Note that this $22 million of amortization does not include the impact of the pending you HP work a lot acquisitions.
Our consolidated GAAP operating income for the second quarter fiscal 2020 was $6.2 million, 3.8% of net sales excluding $6 million of acquisition plan expenses and a 300000 dollar benefit related to the reversal of certain estimated contract settlement costs during the period can solve.
Adjusted operating income would have been $12 million or 7.4% of consolidated net sales.
Looking forward and including an additional $3.6 million of anticipated acquisition plan expenses in the third quarter, our fiscal 2020, GAAP consolidated operating income as a percentage of consolidated net sales is now expected to be similar to the 6.2% achieved in fiscal 2019.
Our adjusted EBITDA was $21.2 million or 13.1% consolidated net sales for the second quarter of 2020.
On a segment level adjusted EBITDA in the second quarter fiscal 2020 in our commercial solutions segment was $18.9 million or 19.7% of related net sales.
And then our government solutions segment was $6.2 million or 9.4% of related net sales.
When adding it all up we anticipate consolidated adjusted EBITDA in fiscal 2022, approximate $99 million or 14% of expected fiscal 2020 consolidated net sales.
Now, let me talk about interest taxes as cash flows and our balance sheet.
Interest expense was $1.6 million in the second quarter for the year, we now expect interest expense to approximate $7 million.
Our current and expected fiscal 2020 cash borrowing rate, which excludes the amortization of deferred financing costs approximates 3.5% to 3.75%.
Excluding a $100000 net discrete tax expense.
Our effective tax rate was 23%, which is what we expect for fiscal 2020.
On the bottom line GAAP net income in Q2 of fiscal 2020 was $3.5 million or 14 cents per diluted share.
Excluding acquisition plan expenses estimated contract settlement costs and net discrete tax items in the second quarter non-GAAP net income for Q2 fiscal 2020 was $8 million.32 per diluted share.
On a GAAP basis as Fred mentioned, we are updating our GAAP EPS target for fiscal 2020 to one dollar eight.
Excluding all fiscal 2020 acquisition plan expenses.
Estimated contract settlement costs and net discrete tax items non-GAAP EPS is expected to approximate $1.42.
Ultimately fiscal 2020, GAAP bps will be impacted by the final amount of acquisition plan expenses and other adjustment items that may occur during the year [noise].
This quarter, we once again demonstrated our ability to generate strong operating cash flows this quarter. Our cash flows were a positive $25.9 million and we expect additional cash flow generation in the second half.
Assuming we experienced the rebound in business that we are expecting in the second half of fiscal 2020, we do expect the build up of working capital and are now expecting to generate approximately $50 million of cash inflows from operations in fiscal 2020.
On our balance sheet.
As of January 30, Onest 2020.
We have 46, and a half million dollars of cash and cash equivalents.
Our total balance outstanding under our credit facility was $158 million.
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've stated before our fiscal quarters, often have some unevenness for lumpiness to them.
Given our current expectations of the economic fallout, resulting from the krona virus, we expect our third quarter consolidated net sales to range from $150 million to $155 million with adjusted EBITDA, ranging from $16 million to $18 million before significantly rebounding in the fourth quarter affair.
Fiscal 2020.
As such 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.
Our updated fiscal 2020 financial targets reflect several large items expected to be shipped during the second half of fiscal 2020, the timing of which could shift into fiscal 21.
In addition, except as noted our updated fiscal 2020 financial targets do not include the impact of the pending acquisitions of you Hbr gilad or any other expense, we may incur in order to achieve our strategic objectives.
Overall Q2 was a solid quarter and fiscal 2020 continues to look better than fiscal 2019, now I'll hand, it over to Mike porcelain Mike.
Thanks [noise].
Given all the news headlines about.
Right virus I'm quite proud of our Q2 performance, but given the large attention in the press we wanted to provide some color on the impact to Comtech and how we are looking at the situation.
First we do believe such business conditions are temporary and they will significantly improve from the current state during the second half of our fiscal 2020.
Second to date, the largest business impact we have felt isn't our satellite grown station technology product line here, we've been impacted by travel restrictions imposed by certain countries as well as by our customers from what we see a large majority of companies are restricting foreign travel site visits to facilities and some of.
Our customers a lot even attending trade shows thus, although we do not believe we permanently lost any orders no one is around to sign them or even take deliveries.
To date parts availability in our supply chain has not been materially impacted we source our products for many global suppliers and we generally keep stock inventory on hand, thus our belief is that when order flow resumes, we will be able to quickly turned back on factory production and deliver products that are in our backlog.
Well there remains significant uncertainty our own business conditions will return to normal we are expecting such to occur in the second half of fiscal 2020.
Now let me give you some color by segment of our Q2 performance in our commercial solutions segment. It was a solid quarter net sales were 96.1 million compared to 86.7 million last year, an increase of 10.8%.
Bookings in this segment were 98.9 million for the quarter, resulting in a book to bill ratio of 1.03.
Alright solutions continue to gain traction for example, our rights networking platform was recently selected by a major maritime service provider in Asia is the best fit for demanding maritime applications.
During the most recent fiscal quarter. We were also awarded a contract valued at more than 8.8 million for K ban solid state amplifiers to be used in inflight connectivity satcom application.
This end application is in the military side, where we believe there will be future opportunities.
So broadly as we've said before based on the anticipated increasing the number of satellites, both high throughput or HTS Leo satellites expected to be launched.
We believe that we're in the early stages of a multiyear period of growing demand for our products.
During the second half overall fiscal 2020, we expect deliveries to increase on previously received 20 million dollar order for K envy, Ben Tw Ta is to support the new Jupiter high speed satellite network.
As discussed on prior conference calls given the increasing need tobacco cellular traffic across remote areas around the world. We made a strategic decision to span or satellite ground station technology product line with the pending acquisitions of you HP and go on.
As a reminder, you HP networks is a leading provider of innovative and disruptive satellite ground station technologies based in Canada, and then Moscow.
We are currently waiting for final approval from the Russian government to close this transaction, which we hope will occur this year.
As announced in January 29, 2020, we're also excited about our pending acquisition and a lot a worldwide leader in satellite networking technology solutions and services with a strong presence in the satellite ground station in flight connectivity markets.
Deep expertise in operating large network infrastructure.
The acquisition of the lot offers many strategic benefits first the acquisition will drive complex global market access by creating a world leader with combined annual pro forma sales approaching nearly $1 billion second it will strengthen our position as a leading supplier of advanced communication solutions, we believe will be.
Uniquely capable servicing the expanding need for ground infrastructure to support both existing and emerging satellite networks.
Third the acquisition will greatly expand our product product portfolio with highly complimentary technologies, including slots high performance TDMA based satellite modems and the lots next generation solid state amplifiers would also considering our current products and usage fees product line. We believe we will have a broad.
A range of products to meet our customers more.
Complicated needs in the future.
For the acquisition will broaden our leadership position in the rapidly growing in flight connectivity in cellular backhaul markets, which are expected to expand given the availability of lower cost bandwidth and the adoption of satellite technology into the Fiveg cellular backhaul ecosystem.
The acquisition will bolster our world class research and development capabilities, enabling contact to offer customers more complete end to end technology solutions.
We believe the acquisition will allow us to accelerate shareholder value creation contributing to our ongoing strategy to move towards higher margin solutions and by increasing customer diversification geographically and by market.
We are very excited about the growth that we expect from these pending acquisitions and overall, we believe that this product line will grow from current levels over the next several years.
Now, let me turn to our public safety and location technology product lines, who sell through second quarter fiscal 2020 sales in aggregate were significantly higher as compared to the second quarter of fiscal 2019 here fiscal 2020 is shaping up to look like a terrific year.
Our fiscal 2020 is definitively benefiting from our fiscal 2019 acquisitions in particular customer reaction to our solar come acquisition remains very positive. For example, we just recently announced that so look I'm going to contract Port 6.6 million to upgrade a next generation 911 system for.
In New England state.
Also in November nine in November 2019, we announced that sold Tom will be will provide call handling systems and solutions as the initial answering point for the entire country of Australia.
Today Sola, Tom has been deployed around Australia and is expected to handle more than 8.9 million emergency telephone calls that have made their each year.
During fiscal 2020 do you expect to enable I will version of advanced mobile location or AOL technology in 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 rapid SLS in simple terms. This is.
Our version of it and we have big plans for it.
In the future, we will roll on multimedia contract options from messaging and video calling.
Overtime, we will be able to leverage these technologies to our existing customers and to new customers both in the us and elsewhere around the world.
With all of the exciting news relating to the acquisitions of you HP and a lot that we've been talking about I simply do not want anyone forget to forget about the success that we are having in our public safety business as we marked the one year anniversary of the acquisition Sola Tom is certainly a success success.
We are on track to meeting our objectives and we have started to cross market. The solar Tom technology to several legacy customers, who are using older technologies.
With the acquisition of solar calm and the Gd 911 business Comtech has emerged as one of the largest next generation 911 contract holders in the United States. Additionally, we have a number of large opportunities pending leading to upgrades to next generation 911 systems.
Automotive safety product lines have yet to be impacted by any negative impact from the corona various and we are in active negotiations with two large public safety agencies for large multi year and multi million dollar next generation nineone contracts and we hope that these contracts will be awarded so.
Turning to us.
These potential contract awards for years, and the making but we're very optimistic that we will receive them soon.
Looking forward, we have a strong base of backlog and other opportunities and end market conditions, while competitive remain healthy.
All in all given the product substrates, we havent, our commercial solutions segment and the benefit of our recent acquisitions. We are optimistic that the segment will grow for many years ahead.
Now, let me turn to our government solutions.
Net sales here were 65.5 million in Q2 fiscal 20 as compared to 77.4 million in Q2 of last year.
Net sales of our mission critical technologies were lower due to lower net sales of satellite based space components antennas and high reliability electric electronic and electro mechanical Tripoli parts as well as the absence of sales during the most recent period related to empty 2025 mobile satellite transceivers for the future.
Program.
Let sales of our high performance transmission technologies. During this quarter were higher than the three months last year driven by increased sales of our solid state high power amplifiers and related switching technologies.
Bookings in this segment for Q2 came in at 52.7 million in this segment. We did receive our first order for the US Marine Troposcatter program and we expect to receive additional orders in 2021 for this multiyear program.
Although this segment was not impacted by the current Novartis, we did experience some order delays on ships for equipment to be used by the US Army. Some of these orders shifted into fiscal 21 on some from Q3 well into Q4.
As everyone knows period to period fluctuations in bookings are normal for this segment.
Although we do have a bit of below in U.S. government orders at the moment I do want to remind everyone that we do not report orders or bookings until we receive actual funded orders from our customers. For example 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 the full.
Full amount of orders for the Troposcatter equipment for end used by the us Marine.
As previously announced in October 2019, we were awarded a contract with 9.6 million ceiling from the US Army, which calls for our mission critical technology product line to provide global fuel support for military satellite communication or satcom terminals around the world.
This still support contract covers diverse engineering technical skills to support these satcom terminals, including logistics Helpdesk Network Engineering Security Engineering, RF and other types of support.
On January 2020, the contract has been funded it only 24.4 million with additional funding expected to occur later this year.
As our us Marine Troposcatter contract gets off the ground, we would expect our prime contractor customer to place more orders to support the us Marines target a fielding a total of 172 units.
As discussed our last conference call. We believe this multiyear opportunity validates content to market, leading troposcatter technologies and expertise and bodes well for the future as we continue to see strong demand for these products now let me turn it back to Fred who will provide some closing remarks.
Thank you Mike.
As I mentioned previously despite the difficulties due to the Corona virus.
With that.
I'm very pleased with how our business is performing.
And I expect fiscal 2020 to be another solid year growth for context.
I'm also confident that real looking gets sustained growth for years to come.
I believe that environment of increasing market demand for global voice video and data usage customers will increasingly turn to come to fulfill their needs for secure wireless communications.
Given our business outlook, our board of directors declared a dividend for the second quarter fiscal 2020.
Of 10% 10 cents per share common share payable on may 15th 2022 shareholders of record at the close of business on April 15th 2020.
We continued to believed our dividend program is a great way to return capital to our shareholders as we continue to grow our business.
Now I'd like to proceed through the question and answer part of our conference call operator.
At this time, if you'd like to ask a question. Please press the star and one key Sunnier Touchtone telephone keypad keep in mind, you may or move yourself from the question in queue at anytime by pressing the pound cake.
Again to ask a question. Please press the star and one keys now.
We'll take our first question from Joe comes with Noble Capital. Please go ahead. Your line is open.
Good afternoon, and thanks for taking the questions.
Hi.
Hi, Joe question.
On the the Corona virus.
It would seem.
Given the headlines.
That the impact would even be greater in the third quarter than the sackett.
Is that accurate.
From what you guys are seeing out is there any way you can quantify financially what that impact was in the quarter.
Yes, I would say this we from a from a shift perspective, we probably saw a good for $5 million just that we were expecting in the quarter.
We were expecting close to about 168 or so million dollars in.
That difference is largely attributable to just revenue that just did not come in those things slow down and at the end of Q2.
So from our perspective right now.
So from where we set the couple of months ago.
We're looking at Q3 revenue in the 150 to 155 range for Q3 and that does reflect our best shot at where things are we're seeing bookings still be relatively low.
But at the same time, we don't think we've lost anything so we're expecting those orders to come in at some point you to during Q3, well early Q4, and we'll have a big rebound in Q4.
Okay. Thanks, Thanks to the additional information on that.
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And I noticed on the positive side awards since the beginning of the year the ones that leaves that you guys put out a value on in your press release says.
Increased.
Over 50 million from about 35 million to the same period last year and I was wondering what's behind that tempo are you winning more.
That then you're normally havertys, the winning percentage going up there just more contracts out there just wondering if you give a little more color on that.
I would say its alluded due to both you know we certainly see as Fred mentioned long term demand for our satellite products in our amplifier products. We think is certainly on a multi year uptick and we think it's just not limited outside of what I call. This temporary low right now in the big.
Because of the business conditions, we think we're in a multiyear period, a growth and yes, I'd like to think died.
We're winning more than our fair share given our product leadership positions that we have and.
I think thats the best way I would describe that I'd like to think that we're growing a little bit faster than the overall market based on what we see but obviously, it's a multiyear trend and we hope to participate.
Our fair share.
Okay, and the acquisition expenses it on the.
First quarter, you guys had we're expecting about 2.4 million for the quarter and it came in at 6 million in.
Just wondering what what happened there today were significantly higher than what you had originally forecast.
Yes, it was caused a lot.
At the end today, we do.
At the time, we kind of gave an estimate for where we thought we were and obviously with a certain level of expenses, we expected and as we got closer to getting to a deal we turned up our due diligence and given the size of the acquisition.
That number is not any anything out of the ordinary.
Right right, Okay, and do you expect any contribution from the CGC acquisition in the second half of 2020 or can you size that.
Yes, the business is certainly lower than $10 million a year on on a run rate perspective.
Obviously, we just closed on the acquisition, there's some timing involved so I mean, it's a few million dollars in our 2020 numbers, but most of that number.
Short of a 2021 number as things go under way, we're we're spending the first quarter integrating that business into our.
Our operations in our infrastructure. So we're not really expecting Oh heck of a lot of revenue.
Both in our Q3, and then maybe a little bit in Q4.
Okay, great. Thanks appreciate it.
We'll take our next question from Mike Latimore with Northland Capital. Please go ahead. Your line is open.
Hi, guys.
Bone caught on for Mike Latimore.
Two questions Hi, how are you.
Yes fine thank you.
Like I have two questions.
The European Union half, a mandate liquidity population alerting by Twentytwenty to.
Do you benefit from that.
Well, we do show some.
Emergency awareness location services over in the European community I would say, it's not a material part of our business today, but we are seeing much more bid opportunity in proposal activity in that area and obviously, we have some good news to report down the road will reported but we do.
We do see that activity and we are bidding on some on some projects, but they're not a big portion of our business today.
Got it.
The sequences.
Hello, Barbie Pelephone, you got to high school.
Is this the largest customer for height.
Can you repeat the question I didn't I didn't understand.
How important is telephony got.
Two hikes growing.
Yes. This allowed this customer height.
No just show so it just you know I would describe telefonica is a good customer of ours and certainly purchase products it from us.
Hi. This is one of several different mobile operators that will purchase hides products from us. So it's not I would not describe it as a material driver to us but it is certainly a good customer of ours, and we would expect to sell our product set to them overtime.
Thank you.
We'll take our next question from OSI merchant with Citigroup. Please go ahead. Your line is open.
Oh. Thank you. Thank you.
Chris I had with.
Looking to your second half Michael you Mitch mentioned, a bunch is positive.
All the various initiatives that you're talking about ended.
Significant recovery, you're expecting in the back half and more to fourth quarter can you, maybe prioritize which of these you have a lot of confidence then we'll definitely come back.
To help you meet your kind of guidance for the year. Thank you.
Sure.
I would say certainly we have a lot of stuff in our backlog backlog.
Ending Q2 is $638 million and so there is a good chunk of our Q3 and then obviously less of that in Q4, but certainly our backlog is there and if customers start opening up their facilities and allowing us to ship and they're willing to accept.
That will certainly be ano and important fact, and we are expecting that to a car.
The second thing, which I would say, we're not sure alone and we want to use door and confidence. It don't there is uncertainty is we do need bookings to come back.
Yes, we are experiencing.
No and impacting our bookings in our satellite Earth station product line, we haven't seen and come back even as of today you know things are not there in our satellite Earth station business.
Next week, there is a big satellite showdown in Washington, DC, we've seen some customers pull out of that show and so we're obviously rejiggering appointments and stuff like that to a car and do things remotely with our customers. So ultimately what we are accounting for an open to work through it is what is a challenging environment right now to close.
Sales and so that would change the biggest thing that we're counting on unable to do that I think again I think as Fred said and we view it as a temporary situation. We you to close it and ship in Q4 will ship. It in 2021 in the that then we'll just see what happens over the next two quarters.
On the government side, you know, we feel pretty good about order flow.
No one we're expecting you know stuff to come in and we need that we feel pretty confident about that no. That's how we come to our guidance is at the end of the day, we still think we need that rebound.
In bookings.
Great and then any any guidance on cash flow for the for the year.
Yes, we were thinking at the moment about $50 million that it reflects acquisition plan expenses as well that we're forecasting for the rest of the year. So just when you're looking at that number it's inclusive of that.
<unk> reflects our latest guidance.
Okay, So that 50 million on cash from operation Okay. Thank you.
Yep.
As a reminder, if you'd like to ask a question. Please press the star and one keys on your telephone keypad.
We'll take our next question from Chris <unk> with singular research. Please go ahead. Your line is open.
Yes.
Hi, Good one just had a question I guess on on the acquisition on July one and to to sort of get your idea.
When we start the.
You know some.
Our revenue additions from from July.
Sure we are thinking at the moment.
If all goes well was that will likely close the transaction sometime in late June maybe early July of fiscal 2020, it's possible. It gets into August of of our 2020, which should be the start of our fiscal year 21, So thats kind of the timeframe is very late in Q4. This.
Last year or certainly in our Q1 of next year, assuming or you know everything works according to plan.
No at that point, then you just really taken to stop if we close at the beginning of August it will be a full year impact next year.
Okay, Great and then a follow up on that.
Are you seeing any sort of delays because the corona virus with the integration Maher.
With the integration no.
I think it's I think it's fair to assume that the lots no different than any other company in the world and is being impacted by the Corona virus as well, but you know from an integration perspective, the low all in travel has actually been very helpful towards facilitating our planning.
So if people to actually be around to actually planned integration efforts and theres lots of conversation. We've done some internal site visits of their facilities they've done some internal visits of ours and so I would actually say, it's allowed us to accelerate our planning process over.
The acquisition and as we continue to learn each company they learn us we learn them.
Culture match between the companies is extremely similar and exciting and.
He is literally around the world are truly excited about it more all becoming friends and it's a it's a good thing and we think that once you acquisition closes.
We've got plenty irrs of growth ahead as a combined company.
Okay, Great I mean, when you say plenty of years and growth I mean, what.
What do you sort of.
Referring to how long.
It's Matt its many years I mean, we think that the.
Cellular backhaul growth as Mike as things get rolled out on Fiveg and satellite becomes part of that ecosystem that that's that's certainly four or 510 years worth of growth.
Certainly I effect, you can't as I say, you can't run a piece of fiber to the plane. So I think is going to be on every single large jive and business jet in the future. So wondering what we would say is in the early stages of multiyear growth putting timing aside our view.
Who is going to happen and is one of the reasons why.
We did the acquisition.
Okay. Thanks.
And there are no further questions on the line at this time I'll turn the program back to the company for any closing remarks.
Okay, well, thanks again for joining us today, and we look forward to speaking with you again in June Thank you very much.
This does conclude today's program. Thank you for your participation you may now disconnect.
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