Q2 2021 BWX Technologies Inc Earnings Call
Ladies and gentlemen, welcome to B W. Ex technologies, Inc. Funky quarter, 2021 earnings conference call.
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Following the company's prepared remarks, we will conduct a question and answer session and instructions will be given at that time.
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I would now like to turn the call over to our host Mark Kratz Bwxt's Vice President of Investor Relations. Please go ahead.
Thank you Andrea good evening and welcome to Bwxt's second quarter 2021 earnings call.
Joining me on Rex <unk>, President and CEO, and David Black Senior Vice President and CFO.
On today's call, we will discuss certain matters that constitute forward looking statements.
These statements involve risks and uncertainties, including those described in the Safe Harbor provision found in today's earnings release, and the Companys SEC filings.
We will also discuss on.
Net financial measures, which are reconciled to GAAP measures from the quarterly materials that are available on the BWXT website.
That Rex I will turn the call over to you.
Thank you Mark and good evening, everyone earlier today, we reported solid second quarter results with earnings of 62 cents a share on over a half of $1 billion of revenue as.
As we prepare for a strong second half although down on a comparative basis year to year on year to date earnings are where we anticipated as we crossed the midpoint of 2021, and we have clear line of sight to the balance of the year.
Beyond the operational performance, we remain focused on achieving key milestones that will position. The company for continued growth. So before I turn the call over to David to discuss financial details and guidance. Let me give you an update on the state of the business and initiatives across the BWXT portfolio.
The nuclear operations group continues to reliably produce strong results amidst COVID-19 and capital build out disruptions, while maintaining a high operational tempo 2021 also represents a transition year compared to 22020, where we are moving to higher labor production volume and lower long lead material procurement.
The business is executing well against those milestones, while maintaining impressive cash generation as it prepares for a strong second half this year.
As we've noted in the past the timing of certain milestones and accounting for improvements in the Navy business can be somewhat uneven with a number of factors in play. In addition to normal business Lumpiness, we saw Covid absences impact. This early this year, which put some pressure on production another unique but temporary factor includes the complications of significant capex.
<unk> build out running concurrently with operations for instance, 1 of our <unk> sites, we integrated 5 large machine tools and to the factory recently, which disrupted production somewhat and required agile work around the good news is these bottlenecks are improving as we near the end of this capital campaign.
In Canada, the medical business is returning to pre pandemic levels.
As we saw a 60% topline growth in the second quarter. We expect this positive trend to continue through 2021 as we press forward on commercialization efforts for technetium 99 generators overall.
Overall, the new Technetium 99 generator production line has transitioned from construction to initial testing as the systems come to life at the Kanata facility.
3 of the 4 major milestones are substantially complete including and sell radiochemistry equipment installation major facility modifications in the target delivery system that has been assembled and is being factory tested for installation on Darlington reactor in the future.
The complex and automated radio pharmacy line is the last major system and it is nearing completion as the program fully transitioned to testing we will be exercising the integrated system with cold chemistry before moving to hot chemistry runs.
The program remains on track to submit FDA reference batches and required documentation around the end of the year as we seek a priority review.
On the nuclear services side, we await new awards that should occur later this year, including the pantex and Y 12 management and operations contract and the Savannah River integrated mission cleanup contract should we prove successful on some of these the nuclear services segment would see significant income growth in the near and medium term.
With the objective to grow that segment back to its historical prominent with our nuclear operations pedigree, we have a competitive advantage to succeed as a leader in this market as evidenced by the recent track record of wins and a strong pipeline of new opportunities, particularly for larger contracts.
Turning to other growth initiatives, we remain excited about the trajectory trajectory of nuclear micro reactor development for government applications, a few weeks ago BWXT with partner Lockheed Martin with selected to advance the design for a nuclear thermal propulsion system for a joint effort with NASA and the department of energy.
Under this new award the team will focus on maturing the design for the reactor, including the fuel reactor core shielding instrumentation and control systems as we leverage corporate investments to integrate into a conceptual design.
This program builds upon the gears of work that BWXT has already accomplished with NASA on nuclear thermal propulsion technology recently that work included the testing of multiple coated low enriched uranium fuel types for a reactor leading to a final fuel design next year. This project gets us 1 step closer.
2 a demonstration mission that would illustrate the fundamental advantages of using nuclear technology for power and propulsion for space applications, which BWXT is uniquely suited to provide.
In addition to working with NASA, we are finalizing our contract with the Doe.
As part of the advanced reactor demonstration program. This program accelerates the development of technology required for the next generation of nuclear power production and a variety of high temperature industrial applications. We also continue to make progress for the Dod micro reactor program and the areas of fuel and reactor design.
Together on.
On this comprehensive set of programs for high temperature gas nuclear reactor design manufacturing and test continues to differentiate BWXT and positions the company to successfully participate in these in these exciting emerging markets in the future.
From a government budget perspective.
We continue to monitor and are encouraged by the bipartisan support for recapitalization of the naval nuclear fleet and BWXT programs across the board.
Allison Senate appropriations committees prepare their fiscal year 2022 markups.
We were also reassured that during the Senate Armed Services Committee confirmation hearing for the administration's nomination for the Secretary of the Navy Carlos.
Close to El Toro pledged to continue the evaluation of strategies to increase the production rate on Virginia class submarines and reaffirm his support for Colombia has the Navy's top procurement priority.
Beyond the defense budget. We are also encouraged by the administration's posture on nuclear energy given its investments in nuclear energy research and consideration of accommodative policies.
White houses National climate adviser, Gina Mccarthy publicly outlines nuclear energy's role in renewables at a White House Press conference. In April. This was quickly followed up by the President's government fiscal year 'twenty, 2 budget request, which saw several important proposals, including a plan to increase the office of energy efficiency and renewable energy.
About 65% Inc.
The office of nuclear energy by 22% and increased funding for advanced reactor demonstration program or <unk> by nearly 50%.
As we have.
Because in the past we plan to participate in the commercial nuclear market differently than we have approached other markets, where the government customers intentions and funding are more visible generally we intend to support commercial advanced reactor development by participating in the supply chain as a designer and manufacturer of components and fuel while.
Finding opportunities to devote capital and resources in our proprietary technologies through customer rfps that have more visible outcomes and require more modest investments. For example last December we were 1 of 5 companies that was chosen for the department of Energy's RDP risk reduction awards through 2080 cost share per.
Graham BWXT and the Doe will smartly invest over a $107 million into research and development of risk mitigating technologies and fuel and manufacturing to mature American made small modular reactors.
Similarly, we are also quite enthusiastic about what we see in Canada.
Canadian government is facilitating the creation of a Canadian small modular reactor industry to meet its clean energy standard Canadian nuclear laboratories has set aside considerable funds for advanced nuclear reactor research and development funding and formed a closer relationship with the U S nuclear regulatory commission to facilitate faster.
1 of the major Canadian utilities, Ontario power generation hopes to field advanced reactors about the latter part of the decade setting the stage for a strong market in which we could grow as a Canadian domestic supplier of choice.
In recent years, many commercial players have delayed investments given headwinds from low power prices in subsidies from alternative renewables.
But owing to our patients persistence and very long term view, we have maintained our capabilities in this market, including the only north American facility and infrastructure capable of supplying large nuclear components. So as responsible nations race to confront climate change, we expect a renewed focus on nuclear solutions where BWXT.
<unk> is well positioned to be a major player and an expanded supply chain to help solve these global problems David.
Thanks, Rex and good evening.
I will start on slide 4 on the earnings presentation with total company results.
Second quarter revenue was $505 million about even compared with the second quarter last year as strong increases in the nuclear power group were offset by declines in nuclear operations and nuclear services revenue.
Second quarter earnings per share were down 13% to 62.
As a result of lower operating segment earnings higher commercialization costs related to the Tech 99 generator line higher interest and a higher tax rate those headwinds were partially offset by higher pension income and foreign exchange gains opt.
Operating income and margins were also down in the quarter, primarily from the timing and lumpiness of favorable contract adjustments on the nuclear operations group, which we described in the segment results.
Year to date consolidated revenue was down 1% and earnings were down 10% per share in the first half of 2021 compared with a robust first half in 2020.
Second quarter and year to date EPS bridges can be found on slides 5 and 6 moving to second quarter and year to date segment results on slide 7 and 8.
The nuclear operations group generated $381 million of revenue.
Down about 7% compared with the prior year period, primarily from lower long lead material production, which was partially offset by higher production volume and.
<unk> operating income was $69.2 million down 20% from the prior year period as Rex mentioned operating income was disproportionately lower than revenue due to a combination of lower volume and fewer favorable contract adjustments that are private.
Primarily attributed to timing.
And on <unk> operating margin was 18, 1% in the second quarter, which we expect to strengthen in the second half of the year through a combination of realized cost savings and more regular workflow as capital project bottlenecks abate.
Year to date, NRG generated $783 million of revenue down about 6% compared with a robust first half performance in 2020.
First half operating income was down 19% on lower revenue, which included less long lead material production and fewer favorable contract adjustments due to a combination of timing and COVID-19 disruptions.
Year to date operating margins or 18, 3%, we continue to anticipate the typical high teens margins with upside from pension reimbursements for the full year similar to 2020 results.
In the nuclear power group second quarter revenue was $102 million up 50% compared with the second quarter last year, driven from a combination of higher field service activity fuel production and fuel handling and the commercial nuclear power business as well as a strong rebound in BWXT medical which.
Was up nearly 60% of Covid lows from the second quarter last year NPG operating income was up significantly driven primarily by higher volume and some additional government funds to offset expenses related to Covid. This resulted in a 10, 6% operating margin for the segment.
In the quarter.
Year to date, the NPG segment is up 34% on revenue and operating income was nearly double the amount compared with the first half of 2020 and although year to date margins are trending lower than guidance, we anticipate pickups in the back half of the year from a more favorable mix higher higher fuel sales and a continued rebound are met.
Isotopes.
Lastly, the nuclear services group generated $5.8 million of operating income in the second quarter up from the same period last year, primarily from better contract performance year to date MSG income is even with the first half of 2020 and it is typical to see strong second half results in this segment due to award.
<unk> true ups, and we anticipate potential new wins could start to positively influence the financials, depending on the timing of those awards.
Overall, we are reiterating 2021 guidance on slide 9 while making some minor updates to other information based on year to date actuals as.
As we discussed on the last call, we continue to anticipate higher development and commercialization expenses associated with the preparation on the Tech 99 generator product line and are specifically offering guidance of approximately $30 million of expense reported in other under segment income.
The offsetting adjustment is recorded in other net outside of operations, which we expect to be $5 million higher than previously forecasted due to year to date FX gains. This line item is now anticipated to be $55 million to $60 million of income for the year. The majority of other <unk>.
Net is comprised of pension income and there has been no change to the pension income assumptions for 2021.
And as Rex mentioned, we have line of sight into the work in the second half of the year with the expectation that earnings have more significant acceleration towards the end of the year driven by timing and milestones that influence profitability across all 3 segments.
Lastly, I will close my remarks by turning to the balance sheet.
As we outlined on the last call, we issued $400 million in senior notes due in 2029 with the intend to redeem the senior notes due in 2026 following the end of the quarter. We did just that we.
Which will result in less interest expense on fixed debt. The company continues to be well positioned on the balance sheet with no long term fixed debt due until the latter part of the decade, and we still maintain good balance sheet flexibility.
In the current attractive interest rate environment, we will carefully consider utilizing the balance sheet more aggressively do either opportunistically invest back into BWXT through share repurchases or deploy additional capital to amplify our strategic intention.
And with that I will turn it back over to Rex for closing remarks.
Thank you David as David mentioned, we have some real flexibility with the balance sheet and thats driving us to take a close look at some opportunities to utilize it more effectively.
On 1 excludes the significance of the 2 large capital initiatives in naval reactors in nuclear Medicine. The company is generating very strong underlying free cash flow. These 2 intense capital campaigns are set to wind down late next year and we are beginning to consider how to take advantage of that flexibility given our confidence in the future growth of the <unk>.
As we evaluate future uses of capital David and I will continue to use the risk adjusted returns we can readily achieve investing back in ourselves by buying back shares as a good benchmark and considering alternative opportunities.
And lastly, lastly, we look forward to hosting our Investor day on November the 16th in New York City, where we plan to offer greater insights into the company's growth initiatives and our strategy to move BWXT through the rest of its first decade as a publicly traded company and our aspirations beyond that and with that I will ask the operator to <unk>.
On the line for questions.
We will now begin the question and answer session to ask a question you May Press Star then 1 on your telephone keypad.
If you are using a speakerphone please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then 2.
At this time, we will pause momentarily to assemble our roster.
And our first question will come from Bob <unk> of J P. J M Securities. Please go ahead.
Good afternoon, Thanks for taking my questions.
I wanted to start with with the Mali Museum discussion from earlier could you elaborate on what's necessary to get the radio.
Pharma line complete and then what other steps after that are necessary to get the generator.
Submitted to the FDA.
Sure. Thank you Bob good afternoon.
There are.
Just a couple of steps left on the radio Pharm line, we have to install the terminal sterilization technique its E beam technology electron beam.
And that equipment is near ready for installation then we had a great all debt and tested in the radio farmland. We have all the hot sales we need we've integrated most of that equipment into those hot sales so it truly down to sterilization.
And then in terms of getting ready for an FDA submission.
We basically have 2 we intend to run cold chemistry runs through the radiochemistry and radio pharmacy line that means it's on a radiated material.
Which is fine because the chemistry doesn't change when it's irradiated. So we'll do cold runs and then we'll follow that with hot runs.
Which will be the runs of record and assemble the data required to go with it with reference batches and submit the package to the FDA.
Yeah.
Okay have you decided.
Yet if youre going with the radiated modeling from the merger reactor or is this still.
Oh, PG or when does that decision get made.
So that decision has been made above and our intention from the beginning when we when we brought on Meru is kind of a backup provider was to begin.
The initial ramp with Merck, it's a bit easier to irradiate there.
For various reasons.
But the full production volume that we require would put us on to the Darlington reactors with LPG and so the long term solution is to irradiate.
On the can do reactor at Darlington.
Okay, great great. Thank you and then just last 1 from me.
Mentioned, obviously, some nice margin progression in the back half and in the NPG group.
It seems like a jump to the 15% 16% level.
Just so we don't over extrapolate on that how how is that kind of play out over the next.
I don't know 4 to 6 quarters, because I believe is Molly does ramp up you'll have more depreciation coming on so it might be.
Moving to be lumpy or how should we be thinking about modeling that over the next.
Period of time.
Yes so.
We're spending in the range of our quarter $1 billion of capital on that multi line and so most of that is long lived equipment that you would depreciate over lets say 12 or 15 years and so you've got a depreciation depreciation hurdle in the range of $15 million to $20 million that you need to overcome you've also got some startup expenses in that line and so in the beginning.
There's certainly a bit of drag on drag on profitability as we ramp up debt as we ramp up the production.
But over the course of time, obviously, we overcome that and as we gain market share in and complete the ramp we expect it to be.
On a profitable program with.
As we characterized it before we expected gross margins.
In the 50% range and we expect to get very significant share in the North American market. So.
So some hurdles in the beginning but ultimately we believe a very very profitable program.
Super Thanks very much.
The next question comes from Robert Spingarn of Credit Suisse. Please go ahead.
Hello, Good afternoon.
Good morning Corrado.
Just a follow up on that FDA discussion once you're in review, what's the timeline look like either a priority review or a normal review.
Yes, we are requesting a priority review Rob on the timeline on that is 9 months is the timeline that the FDA self imposes and then required to give you a thumbs up or a thumbs down unless.
There is a request for additional data from the applicant.
And then an extended resets the clock on that but we're hopeful of.
Getting approval within that window.
So up to 9 months.
Okay. And then then just on the benefit of the small reactors the flexibility and security of the power supply that they provide.
Is this benefit.
Now how do you think about the cost of kilowatt hour potential.
From a competitive standpoint versus other power sources.
And how.
How should we think about that as this evolves.
Yes, so Robert maybe change altitudes here a little bit on that question. So we don't the economics for small reactors small modular reactors and even micro reactors or not.
Well understood yet, particularly the latter 1 but on small modular reactors I.
I think you can think of.
Overnight cost being in the range of 6% to $7000 a kilowatt and that's debt that's.
That's that's expensive in my view relative to our relative to other alternatives and so theres a cost GAAP, but I think the industry needs to close for both small module reactor and micro reactors to be competitive with solar and natural gas and other things I believe youre going to have to get down into 2 or $3000 per kilowatt range.
I'm talking about installed competitive cost of installed capacity.
In order to be considered for 4.
For for use on the grid.
Okay, and your confidence that debt, we can get there.
Well I believe so and I'm, particularly optimistic about these advanced reactors the high temperature gas reactors and other things, where you've got higher efficiency in smaller packages, you've got some natural advantages from that and not only debt, but you can use the output of those reactors the high temperature gas for industrial processes. For example people talk about cracking.
Hydrogen with those because the temperatures at which they run they are uniquely suited to support certain industrial gas processes and so.
Industrial heat processes. So you can deduce that improves the business case, when you can do that obviously.
So I'm optimistic about it but but it's early days.
Okay, and then just 1 more from me and I don't know if you discuss I just hopped on from another call, but the hiring situation I think youre starting to work on another Colombia core next year. So are you in the process of Onboarding more people ahead of that and.
How is the positioning for bringing in new people just given the labor constraints on the environment today.
Yes, Rob we absolutely are hiring we continue to have hundreds of open requisitions and we tend to fill them.
We are.
Somewhat concerned about what we hear about the labor market, but I would reiterate what I normally say about this which is debt.
That in.
And the geographic locations, where we have VW.
BWXT plants, Lynchburg, Virginia, Erwin, Tennessee, Mount Vernon, Indiana, 2 plants in Ohio, we tend to be an employer of choice we tend to pay well we have good benefits kind of more importantly, we have such visibility into our backlog debt debt potential employees can see their futures.
These programs have decades long viability to them and so we tend to get high quality applicants, we tend to get plenty of applicants and so.
We're keeping our eye on that we're watchful about it but im not especially concerned at this point about being able to hire up for it.
Okay. Thanks Rex.
Thanks, Ron.
The next question comes from Peter Arment of Baird. Please go ahead.
Yes, good afternoon Rex David current.
Good afternoon, just you mentioned the.
Your opening commentary and David I think you also mentioned about just the stronger second half anything to call out.
Q3 versus Q4, and then also related to your kind of 70% through your kind of Capex plans through the first half.
Is that level loaded in the second half how should we think about that.
So I'll take the Q3 Q4 in the second half picture, maybe ask David to comment on capital and good afternoon to you to Peter.
So 2021 shaping up a lot like.
It will look familiar to you it's shaping up a lot like 2019 in that year 2019, we had $43.57 kind of split it for operating income in this year. It looks like $44.56, and so we've kind of been to this movie. The factors that are influencing the strong second half are sort of by segment in <unk>.
We have a continuing ramp in volume we've been ramping generally around the Columbia program and of course, the fact that we went to a permanent 2 Virginia tempo a few years ago.
And we've been doing this capital campaign to accommodate that level of volume. So we're still ramping and so you can expect generally higher volume in the second half of the year as compared to the first half.
And then another factor here is that as we start on the second Colombia.
Which is which begins.
Early next year late this year, you'll see much heavier.
Long lead materials and that strongly influences Q4, and so as David said, we've got this sequential build from Q3 to Q4 and Q4 is quite a bit stronger than Q3.
And that's due to the fact that we've got long lead materials layer it in on top of whats.
The already increasing production ramp.
So thats that drives MLG in NPG.
The second half has much heavier component manufacturing in it.
So increased sales in fuel and fuel handling systems out of our Peterborough operation net that operation is doing quite well and we'll see that manifest in the second half.
We will see continued growth in isotopes.
Just so you know there is it generally speaking there is a bit of cyclicality in that business debt always favors the second half because.
The large cyclotron that we're using.
In Vancouver is shut down for maintenance for a period of time in the first half of the year. So that favors the second half along with the recovery from from the pandemic and general increases in demand for the products that we make there. So we're expecting isotopes to be quite a bit stronger in the second half and then generally just better mix at NPG.
The first half margins were.
Below average, we expect recovery to to sort of that 12% level 12.13.
Overall as we as we execute the second half of the year.
And then finally in MSG.
As always biased to the second half as well because we true up the.
We true up the site performance.
Profitability in the <unk> business in the fourth quarter. So you almost always see a big pop in and <unk> in that business and then.
As David has mentioned should those TST awards.
Happen in a timely fashion and should we succeed with them.
Then that would move the needle force too we get some absorption benefit perhaps better profit from that and then obviously a full year of that in the next year or so so a lot going on in second half and we're <unk>.
<unk> hard in and executing well at the moment.
And staying on staying on on our guidance and Peter to take the capital question.
Asked about capital for the remainder of the year, we said about $2.50 for the year. We said next year, which is 22 would.
Would be less than that.
Then in 'twenty, 3 we would be at our maintenance capital, which is 3.5% to 4% of revenue.
So.
The rest of this year is still going to be strong we had 137% on the.
The first 6 months, so youre going to pretty much duplicate that.
And then you've got the.
The timing between the 2 is going to be roughly just as strong.
And then you could always have some timing issues between this year and next year.
But I think over the next.
4.
Quarters, Youre still going to have a strong amount of capital to get to done what we need to get done.
I appreciate all the details I'll jump back in queue.
Thanks Peter.
Again, if you have any question. Please press Star then 1.
And our next question will come from Michael C. M. Raleigh of Truest. Please go ahead.
Hey, good evening guys. Thanks for taking my questions here.
I did I did jump on a bit late but on the just trying to get.
The 30 million now for the commercialization expense on the TC 99, I think you called it out that's greater than 1%. So I guess it increased by a couple million dollars.
How do we think about that I guess that other expense.
Net debt begins to subside and how do we think about the potential cash.
<unk> once the spending stops there I mean just.
Does that go back to I guess your normal other expense probably ran about 'twenty 2 'twenty 3 billion farther back maybe it was a little bit below 20, but how do we think about that trending and is there do you think you've contemplated all the expenses at this point.
Yes, so I mean, obviously, we're trying to ramp up for the.
Moly 99 product line, so our normal corporate expenses.
Hanging around there.
$22 million or so.
That has increased some because of the additional cost.
Once we get into <unk>.
Late into the production.
Timeframe for Moly 99, then this will all be part of the moly 99 product.
That will go back to what we would assume a corporate level cost would be.
Got it Okay and then just in terms of that FDA approval I think Rex you said youre going to be used in burst I mean are there any risks or do you need to submit additional documentation or is all of that kind of contemplated in the full submission using Merv first then go on back the Darlington are or do you see that.
The potential risk factor that the FDA might flag.
Yes, you have to do that in 2 pieces, Michael So we will when we submit the reference batches.
And.
And the other documentation that will be particular to that configuration, which is murder of radiation.
Radio Kimberlin on radio farm line are shipping containers, and so on and so when we move over to the Darlington 1 just a little bit later in the game.
Does require a bit of a supplemental to the to the original application, but thats.
But that's relatively minor and it has a much shorter approval timeframe on it. So we don't regard it as particularly risky.
Got it got it alright, guys perfect. Thanks, a lot I'll jump back in the queue. Thanks.
Thanks, Michael Michael.
The next question comes from Ron Epstein of Bank of America. Please go ahead.
Okay.
Brian Your line is open on our end did you mean, alright, yes, sorry, I was on mute sorry about that.
Just a couple of quick ones on the Virginia class what are you seeing there in terms of long lead items and as the drumbeat increasing at all for the additional boat that they've been talking about.
Hey, Ron.
No.
Our strategic forecast has been for 2 Virginia for a number of years now and we've never layered in that third Virginia in our thinking.
That come about that kind of might help you get to the upper end of our medium term intermediate guidance range.
But we're not planning for it and we're not hearing debt much support for it right now.
I don't believe that anything we're hearing out of authorization of our appropriation would lead to.
To 1 going into this appropriation cycle, we stand ready for it and should that come about we could accommodate it with pretty modest capital investment, but we just aren't planning for it right now.
Got it got it and then could you just share a little light on the thermal the thermo nuclear propulsion stuff youre doing with.
NASA, where.
That stands and where that could go and would you have a spacecraft actually at some point, you're flying with that on it.
It's my most fervent hope that we will.
Interest in new nuclear applications per space were on the what we've been doing with NASA for since 2016 is developing mainly developing fuels that would be suitable for a nuclear thermal propulsion system and those those systems run at very high temperatures and they have very high.
On a very challenging requirements from our materials and for and for fuel. So we've been developing and testing various fuel types for the last several years and it's been very interesting and very challenging and productive program for US. This last award that we talked about here in the script is 1 where NASA has turned to the idea of going.
In designing the reactor in the space craft in systems in anticipation of a future demonstration mission and so I think the idea is that NASA and there has been discussion about collateral NASA collaborating with DARPA to do this mission.
But the idea of putting a full nuclear thermal propulsion system onto a spacecraft and executing some kind of a mission to demonstrate the efficacy of the of the NTP technology.
So that's I think it's.
I think it will happen.
Im not sure about the timeframe, but we are.
But we are certainly postured to support it and on top of that.
<unk> is looking at vision surface power.
Being a nuclear technology in debt.
We expect something from NASA on that in the fairly near term because they do have.
Robust demands for power on the lunar surface in efficient surface power is the preferred solution for that.
So there's a lot there's a lot to come there and it's all relatively exciting.
Great. Thank you very much thanks.
Thanks, Ron Thanks, Ron.
Okay.
This concludes our question and answer session I would like to turn the conference back over to Mark Kratz for any closing remarks.
Thanks, Andrea This concludes today's conference call, we will be sending a save the date reminders for the Investor day on November 16th with formal invitations to follow if you have further questions. Please call me at 980.365 4300. Thank you again for joining us this afternoon.
The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.
Okay.
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