Q1 2023 L3Harris Technologies Inc Earnings Call
Speaker 3: Thank you Rob. Good morning and welcome to today's call. Joining me are Chris Kubecik, our CEO and Michelle Turner, our CFO .
Speaker 3: During our discussion, we may reference our investor letter that we published on our website yesterday. We're listening to investor feedback and have made some enhancements.
Speaker 3: Given the detail in this letter, this call will primarily be focused on answering questions.
Speaker 3: We may also discuss certain matters that constitute forward-looking statements.
Speaker 3: These statements involve risk, assumptions, and uncertainties that could cause actual results to differ materially. For more information, please reference the Safe Harbor provision found in the Investor Letter and our SEC filings.
Speaker 3: Lastly, we will frequently discuss non- GAAP financial measures, which are reconciled the comparable GAAP measures in the investor letter.
Speaker 3: Before moving to questions, I'd like to turn it over to Chris for some opening remarks.
Speaker 4: Okay, good morning and thanks Mark and welcome aboard.
Speaker 4: We've been focusing on execution under our performance first imperative, and I'm pleased with our results.
Speaker 4: The first quarter was strong in many respects as we continue to build momentum with our trusted disruptor strategy, resulting in record orders and record backlog.
Speaker 4: Improving macro trends serve as a positive backdrop, including the president's 2024 budget request released to Congress in March.
Speaker 4: We are well aligned with the priorities in the National Defense Strategy, which is reflected in robust funding in major areas for us, including space, and joint force capabilities, as well as missiles and munitions given our pending acquisition of Aerojet Rocket Island.
Speaker 4: was to grow the top line, meet the EPS number, and have positive cash flow.
Speaker 4: the team rallied and delivered on all counts. For a third consecutive quarter, we had top line growth, a 9% increase with each segment growing.
Speaker 4: Operating income was up in two or three segments, despite the usual headwinds.
Speaker 4: However, we came in line with where we thought we would be to begin the year.
Speaker 4: This resulted in EPS of $2.86 and we anticipated building from there. Free cash flow came in at over 300 million, a significant improvement from a year ago, and we also front loaded our share repurchase commitment for the year.
Speaker 4: followed by the Aerojet Rocketine Shareholder Approval Vote the following day.
Speaker 4: Both of these outcomes were expected and we are responding to the FTC. We still anticipate the deal will close later this year.
Speaker 4: winning strategy and the overall business environment let us to reaffirm our 2023 guidance with the recognition that record orders and strong revenue growth to date could support a bias towards the higher end of our revenue guidance range should these trends continue.
Speaker 4: operational improvement initiatives, and accelerating sequential growth in product-centric businesses, we remain committed to our full year EPS guidance.
Speaker 4: So we're off to a strong start and I'd like to recognize our employees for continuing to prioritize performance first in everything they do.
Speaker 4: With that, let's open the lines for questions, Rob.
Speaker 5: Thank you.
Speaker 2: We'll now be conducting a question and answer session.
Speaker 2: In the interest of time, we ask that you please limit yourselves to one single part question. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue.
Speaker 2: You may press star two if you like to move your question from the queue.
Speaker 2: before pressing the star keys. One moment please while we poll for questions.
Speaker 5: Thank you.
Speaker 2: Thank you, and our first question comes from the line of Matt Acres as well as Fargo. Please receive with your questions.
Speaker 4: Yeah, he's good morning. Thanks for the question. I want to put maybe a finer point on the rocket dying timing. Have you, I guess, substantially complied with the FTC's secondary question? That's not sort of how much is left there. I think that's what starts the clock for that review.
Speaker 6: Yeah, Matt, thanks for the question. We're gathering the data as you would anticipate. It's usually about a three to four month process. So we got the second request mid-Mid March, so that would kind of suggest a June submission, both for us and I know Erojet Rocket EIN is doing the same thing.
Speaker 6: haven't seen them they'll probably submit a little earlier than us given they've already done this one.
Speaker 6: So, you know, the reason I'm confident in the 2023 close really comes down to the FTC's evaluation of this transaction.
Speaker 6: you know, when we look at it, we do not compete with air jet rockadiene. I mean, plain and simple, they make rocket motors and rocket engines and we do not. And that term is known as horizontal competitiveness and there is none. We are not a customer there. They are not a customer of hours.
Speaker 6: which determine the FTC and lawyers use is vertical.
Speaker 6: competition. So I look at this and say if there's no vertical competition and no horizontal competition.
Speaker 6: We'll submit the data, we'll certify the information and we'll let the process run.
Speaker 6: You know, I think I'll just just take a minute since I'm not sure I'll get any more Aerojet questions today and I just think there's an incredible amount of confusion mainly in DC whether it's the DoD, the FTC, or members of Congress.
Speaker 6: And there are three terms that are used interchangeably that mean completely different things.
Speaker 6: and that is consolidation, merger, and acquisition.
Speaker 6: And a consolidation, in my opinion, is when two companies with similar capabilities
Speaker 6: combined, and I think back 25 years, to McDonald, Douglas, and Boeing, and they consolidated. And nobody can dispute that after that transaction closed, there was one less commercial and military aircraft provider. And that's not what we're talking about today.
Speaker 6: A merger, I think a good example is obviously Delta R and Harris.
Speaker 6: two companies that are complimentary came together, which is now why we have capabilities in space air, land sea and cyber domains.
Speaker 6: significant revenue synergies, significant cost synergies, over $650 million of cost savings that we shared with our shareholders and the DoD and resulted in a stronger company, in this case providing more competition within the defense industrial base.
Speaker 6: and then Farojet, Rotadine.
Speaker 6: is an acquisition. It's about 10% of our enterprise value. It's all cash.
Speaker 6: It's putting us into new markets that I mentioned already, that we believe are growth markets as highlighted in some of the recent budget decisions.
Speaker 6: and fills in a gap in our portfolio.
Speaker 6: So I just felt I wanted to clarify.
Speaker 6: felt I wanted to clarify that that point and that
Speaker 6: is what gives me confidence that this deal will close in the second half of the 23.
Speaker 2: Thank you. Our next question is from the line of Sheila Kaiglo with Jeffries. Please receive your question.
Speaker 7: Thank you. Good morning, Chris and Michelle and Mark, welcome to the call. Chris, you seeing you on CNBC last night. I know they let anyone on these days so nice that they got enough grade with you. But in all series, may have a good quarter and you called out space in addition to arrowjet on that segment.
Speaker 7: their space business, 1.5 billion of new prime space awards. What types of opportunities are you seeing in the market and has there been a shift in the competitive backdrop given some of the moves to smaller space systems? And then where do you think LHX is seeing share? And tied to that, there were a number of international awards within space. Is there a shift?
Speaker 7: and the dynamics that you're seeing just given spaces become more open to the US working with allies.
Speaker 6: Okay, well thank you Sheila. I was actually in Clifton, New Jersey all day with our electronic warfare team, so just a short drive to get on TV. So thank you for that. You know, let me kind of kick this off and then I'll ask Michelle to give a little more detail. And I really want to step back and think of space and the space domain and how it aligns with the strategy that we've been talking about since the merger. So a few fun facts, at the date of the merger there were actually zero L3Harris or Legacy Company satellites in orbit.
Speaker 6: Today there are seven that we have built, obviously is a prime, and we have 33 in backlog.
as a prime that will be launched over the next couple years. So when we look back, we saw this as a growth market.
And the discussion aligned with what we've been saying for several years was to move up the food chain and become a prime by providing disruptive technologies and alternatives to our customers. And I think as we sit here today, we can see that that strategy, that investment is starting to pay off. We're probably best known recently for the work we're doing with the Missile Defense Agency and the Space Development Agency, launches that will be coming up in the next year or so. But we're also a market leader in weather and ISR and also space exploration. And I appreciate you highlighting the fact that we're growing international.
Kelly and her team are doing an amazing job in terms of recognizing the current environment within the US, but also to your point Sheila around expanding the aperture in terms of international exposure as well. Half of the billion and a half in bookings are international in nature. And so when we think about
margins within this space. This is where killing the team are thinking differently. In terms of leveraging our domestic footprint to be able to drive the shareholder value in a different way across the globe. So we're excited about this. Double digit growth from a revenue perspective. We expect this to continue to be a tailwind for us within 23 and beyond. In terms of our domestic footprint to be able to drive the shareholder value in a different way across the globe. We expect this to continue to be a tailwind for us within 23 and beyond.
Our next question is from the line of Christine Loag with Morgan Stanley . Please resume with
Good morning, Chris, Michelle and Mark. Chris and the supply chain, it's encouraging to see that the market conditions for electronic components are improving. Your critical part shortage of the client aid and the alternative parts are increasing. So is this tracking better or worse or as you expected? And if we continue to see the supply chain improvement accelerate, could we see upside to your full your guide beyond the upfront?
Yeah, thanks Christine. I believe the worst is behind us relative to all the macro headwinds we've talked about.
supply chain attrition and inflation, but to your question specifically on supply chain, you know I'm proud of the team because these alternative parts just don't happen. We took a fair amount of talent and expense to redesign our products.
if you will, designed for availability. And the team has done an amazing job. And as we highlighted in our letter, we now have 1,300 alternative parts that weren't originally designed into our products. So that's been able to allow us to grow.
as you saw in the quarter and maybe position us for continued growth for the rest of the year. I think that's the last few years I hate to predict anything because it's hard to predict what's going to happen day to day or month to month, but I feel real good about the opportunities and the positioning. And we reference, you know, we've signed a strategic agreement with a major.
microelectronic chip providing company. The benefit for us is it gives us assured availability and kind of moves us up and out of the allocation process which is always an uncertainty kind of day by day and in exchange for that.
you know, we're sitting down and sharing with them our technology roadmap and working collaboratively as we design new products, taking advantage of some of their more advanced technologies. So, long way of saying we're happy with the first quarter, we have good visibility for Q2 and beyond and you know, if we...
Can you lay out what drove the softer margins in IMS?
IMS and CS this quarter and then walk through the factors that unlock the implied bars improvement in the second half. And if you can touch on the dynamics with backlogger pricing, that would also be very helpful. Thank you. So we're getting a little bit of a jarbled feedback, Scott, but I think what you're asking about is IMS.
expectations for our team within Q1. We really had three objectives. One was to grow top line. The second was the meter EPS and the third was to improve on our cash position from last year. We met all three of those. And so to your point, Q1 margins did come in light. They were aligned with expectations, however.
And so I think it's important to go back to what we talked about in our last earnings call, where we talked about having a more balanced plan this year. And in terms of revenue and EBIT, the expectations was revenue would be balanced with our first half margins being lower and accelerating in the second half really driven by two things. One is around our higher margin product deliveries.
So as we see the supply chain constraints continue to ease, we expect that our product deliveries are going to continue to improve, which is going to drive margins in the second half of the year. The second is related to our fixed price backlog. We talked about this a little bit in Q4, but along with our macro headwinds that have an experience across the industry and the higher inflationary environment.
We experienced this particularly acutely within three of our sectors, which we talked about within the letter EW, IBS, and ISR. We expect that this is going to continue to dissipate as we start to see some of the actions that we took at the end of last year start to pay dividends in the second half of this year.
So we have a path to getting to the margins in the second half. And one other thing I would note in terms of Q1 is our Q1 margins were a bit deflated by lumpy aircraft revenue recognition within our ISR business.
When you look at this, it's about a 40 to 50 basis point impact within the quarter. So we expect is this normalizes, that's also going to help our EBIT in the second half EBIT margins in the second half of the year. And then to your question specifically, Scott on IMS, there's two pieces there. One is the mix and for those that have been on this journey with us, you're familiar with our lump.
of lower margins within the quarter. So I expect that that's gonna continue to improve throughout the year as we work on the missionization of those aircraft.
The second piece is related to the fixed-by-spec log that I talked about. This was an acute impact within our ISR business. And so you may remember we talked about attrition concerns that we had in Q4, along with the macro headwinds, where we set today within Q1, we are seeing improvement.
We have seen our attrition stabilize and this is good news in terms of seeing the light at the end of the tunnel. We expect that the attrition and the performance is going to stabilize and we'll see less of those negative EAC impacts as we make our way through the year.
I think I'll just chime on Scott a little bit more and look, none of us are happy where we are and Q1 with the margins, but it's exactly what we had planned and we clearly have a ramp to get to 15 and a half by the end of the year, which we will. We kind of teased out in the letter a little bit about our enterprise.
That was harmonizing the benefits, closing down headquarters, consolidating segments, taking advantage of the enterprise relative to supply chain, rebitting contracts. It's water under the bridge, but still proud of what the team was able to accomplish, especially during COVID. So the natural evolution under our continuous improvement.
mindset is to move into phase two and we really looked at the success of our trusted disruptor strategy and how it's being embraced by our customers and suppliers and we're applying it to ourselves. How do we disrupt ourselves and how do we get better and more efficient? So we just completed about a 10-week sprint.
to highlight and confirm that there are opportunities for us. And we're trying to figure out how we're going to function differently and really rethink every function and everything that we do. Easy example would be on real estate, especially as we've supported and embraced the remote and hybrid world.
remove some of the manual labor and actually provide some savings. And also our indirect procurement strategy, just to name a few of the things.
So now that the sprint is complete, we're in the design phase of the program and on our next call we plan to give you some actual tangible numbers and tangible timeframe to show how this is going to make L3Harris an even better company and contribute it to our already...
industry leading margins. So the entire leadership team is excited about this project and I think we're off to a good start and more to come in you know 90 days.
Thank you. Our next question is from the line of Peter Arment with Baird. Please deal with your question.
Yes, thanks. Good morning, Chris Michelle and Mark.
I want to ask some working capital and I'm sure Michelle went away in. I know you've kind of focused on driving the metrics lower over the last few years and last year you obviously built some inventory. Maybe you could just update this. I know working capital was less of a use this quarter.
But maybe, you know, whether you think the 53 days that you kind of ended in 2021, is that still something you can target this year? And ultimately, do you think you can get into the 40s?
Thank you so much.
Yeah, Peter, the short answer is we expect to get back to the 53-54 levels by the end of this year. And so what you saw in Q1, we're really proud of the teams. We saw working capital improved by about 300 million year on year. That's about an eight-day improvement from where we were at this point at the end of...
Q122, really driven by receivables. And I just want to highlight, this is a great example of our performance first initiative in action. So many thanks to our finance, program management, and contracts teams for implementing what we affectionately call money Monday, which is really focused on truncating our billing and invoicing processes to drive a more efficient use of our working capital.
almost equally split between our product inventory, which is going to be driven by the easing of supply chain constraints, being able to ramp our deliveries in the second half of the year, but also around our performance-based milestones on some of the new program ones that we have. Space business is a great example of that where...
We're negotiating and getting cash up front as a result of some of these new orders, but then also executing on those programs are going to deliver cash for us in the second half as well. Yeah, and Peter, clearly working capital is a top priority. It's something we brief our board at each and every meeting, and as we have our monthly reviews it's something that Michelle and I and the team look at.
I don't think it was surprising to see it the working capital days grow in the last couple years. We were taking the approach to get all the parts we could, pretty much at any cost and that resulted in a build-up of inventory. We're much more confident in our ability now to plan and have alternatives to part. So you'll see that contribute as we bring down the working capital days.
And if you recall, we were very aggressive and continue to be in negotiating performance-based payments versus progress payments and time that we see to cash.
specific performance milestones and I view that as an opportunity. I think it's fair to say there's certain programs that are behind schedule either due to our performance or our suppliers performance and you know that's fine we've identified it and we're working it and that
gives me even further confidence that we'll be able to hit our numbers as we continue to perform and tie the cash to those milestones. So thanks for the question, Peter.
Our next question is from a line of comments from Bernstein. Please proceed with your question. Good morning. Thank you....
As you work through the process on Airjet Rocket Dine, how are you thinking about divestitures at this point? Things stand out that like commercial aircraft simulation and training, public safety. So how are you thinking about?
kind of the timing of when you might do a divestiture, what the size might be, and how do you decide what fits? Yeah, well, good morning, Doug, and yeah, we've talked about the need to to divest, to generate cash to help fund the Aerojet Rocketdyne.
acquisition. So, yeah, we're not going to actually disclose what we've decided is non-core, but we have a regular process to review our portfolio and see as the company evolves, we'll be coming more and more of a government or defense contractor. So, you know, we want things that align with the rest of the portfolio where we have synergies and the ability to...
and it's a usual analysis is, you know, we have good businesses and are there better owners for those businesses. We're not at all in a fire sale situation. We're going to take our time and we're going to get the maximum value for those properties.
And, you know, I'd hope we could probably sign and announce something this year, maybe close one in Q4 or early 2024. But we'll run a process. We get a lot of inbound calls, especially after something like this, where I say what I just said. But there's interest in our portfolio. I'll just leave it at that.
I'm confident we'll be able to get some proceeds. And I think I've previously said about a billion dollars of proceeds from this process, meaning two or three digustitures. So I'll stay committed to that number.
Our next question is from the line of Richard Saffron with C-Pork Global Research. Please just hear with your question.
Chris, Michelle, Mark, good morning. How are you?
If it's okay, I'd like to return to the subject of bookings and the 1.3 book to Bill you did in a quarter. I thought you might talk about full year bookings expectations. And then if we start to think longer term, period of growth and the opportunity set, I was kind of wondering if you...
what you're thinking about if booked a bill, you know, should be better than one, you know, in this growth period. Thanks.
Thanks Rich, we always set our internal goals and aspirations to be more than 101 on book to bill. It's kind of hard to grow if you're not booking more orders than the revenue you're recognizing. I think the 1.3 is absolutely a great way to start the year.
You know, when we talked last time, you know, this is the impact of a continuing resolution, right? And, you know, until the CR gets broken loose, which it did, we start to see the money flow. And as I've said before, the only one who dislikes the CR more than industry is the department.
accounts.
You couple that with what we've been able to do internationally the last several years. The interest in T-Com, the space international, you know, you would clearly expect that we'll be over 1-0 for Booktable for the year.
aspirationally, I'd like to be at least at 105 and maybe even 1-1. But it's somewhat lumpy, right, as you know, and it depends on we only talk and record the funded backlog so that always has a little bit of a difference, maybe, relative to other companies. But we're feeling really, really good. And I think the key message here is...
you know, this just confirms that our strategy is working and the customers appreciate and recognize what we're trying to do. Sometimes, you know, we have more innovative solutions. The focus is on speed and schedule and cost. So we kind of mix those in.
and they've been pretty aggressive in pursuing different markets and different technologies. I will also say that Michelle and I and the team spent a lot of time focused on risk management and we had two opportunities in the quarter that were pretty exciting to us, but when the final RFP came out, you know, there were fixed price development with fixed priced options.
and we chose not to bid those.
for obvious reasons. It's very hard to commit to a fixed price development program when you don't know the spec. I think we all look back at all the right-off-stained losses and more times than not they're tied to that. So we will not.
be playing that game, I've elevated it to what I think is the highest levels within the Pentagon. And the RFP's come out, we're not going to bid. And I would think over time, others aren't going to bid. And ultimately, we'll go back to the appropriate contracting vehicle for the appropriate opportunity.
Kind of a roundabout answer there, Rich, but I wanted to cover a few of those points. I guess I'll just maybe throw in the pending acquisition of Aerojet Rocketdyne. I mean, by all accounts, and it's not always easy to look and compare apples to apples, but the munitions line in 24 appears to be at least 20% higher than 23. So...
I think we all know the need and the desire for these munitions for not only current threats, but future threats in addition to refilling the stockpile. So, you know, I think the acquisition in December made a heck of a lot of sense, and I think when you look at the budget, it makes even more sense. So, I'll just leave it at that.
In the international part of this, 30% of our 5.8 billion of record orders within the quarter were international and the book to bill was over 1.5 for international. So it really speaks to what Chris was alluding to in terms of the strategies working.
Our next question is from the line of Michael Sumeroli with Truist Securities. Please proceed with your question. Hey, good morning guys. Thanks for taking the questions. Maybe a number of things, Chris, but maybe just to go back to Aerojet. Pretty well publicized about some of the capacity challenges.
business. So clearly this potentially alleviates your capex. But I guess I'm trying to figure out when can you guys start working together? Do you have to wait for this to close? Because I would imagine you guys would want to have some strategic input in terms of how they're building out or investing into the...
the facilities to ramp up production. And I guess, just also staying on Aerojet, you mentioned divestitures, and I just wonder, does the big lower stage space engines fit in your portfolio or when you talk about these divestitures, can something fall out of Aerojet?
Let me try to address them. Yeah, relative to working together, you know, there's some pretty clear rules that are called gun jumping and we're very conscious, as is Erich Rockendyne, not to trip over those thresholds. So we can not actually work together and help them relative to the threshold.
DPA money. We're aware of it. We have the ability to review the documents, but Eileen is running her company, I'm running my company, and until we close, we can't really change that. That's been around forever with all acquisitions, mergers, and consolidations.
you know, all the more reason to get this transaction approved in a timely manner so that we can start working on that. You know, the Defense Production Act, DPA, it's actually been around since the 50s. So this is a pile of money, a bucket of money that the DoD has and it's really there to help strengthen
the resiliency of the defense industrial base. And with the focus on manufacturing and capability of these technologies, I was pleased to see that they received this money. I know the team has been working on this for probably a year at Aerojet Rocketdyne. It's unrelated to the acquisition.
but it is in support of their growth. It highlights to me the critical nature of these technologies and the DoD need for this company to be successful in this money. You know, I view it as maybe a little more tactical relative to increasing both the physical and the digital infrastructure of Aerojet Rocketdyne.
Department of Defense, and I'm pretty sure they have pretty thorough plans and a competent leadership team on how best to spend this money to optimize both capacity, digital engineering, and moving a couple production lines for the growth that we talked about. So relative to the divestitures, yeah, we're not.
Hey guys, Michelle on capital allocation as Chris alluded to in his remarks you guys went pretty heavy on repurchases to start the year pretty close to your half a billion dollar target for the full year. How are you thinking about allocation now the balance of the year? I know you do have some debt maturing this summer I think so do you look to address that or are you looking at other options?
Thanks. Good morning, Pete. We don't anticipate any changes to our previous commentary in terms of capital allocation. Longer term, we expect to have a fairly balanced approach and we have added some color to this within our investor letter in terms of buybacks, dividends and acquisitions. See you on Wednesday and Sunday.
To your point about the Aerojet acquisition, we do anticipate that's still closing this year and as a result, our leverage ratio will get close to four with about $14 billion of debt. And so we are targeting over the next couple of years to bring that back down to below three. So for this year, we're anticipating still the $500 million of share buybacks.
So another $100 million to go based on the $400 that we did within Q1, along with the dividends being consistent with what we previously communicated. In terms of the debt, we do expect to pay that down within June . And so you should see that play out consistent with what we shared before. Again, thanks for watching.
Our next question is from the line of Robert Stallard with Vertical Research Partners. Please proceed with your question.
Thanks for watching. Good morning.
Hello?
Hello. Oh, you can hear it. Oh, you can hear it. Okay, sorry. Morning, guys. So just to maybe wrap things up on the whole air-agent topic, let's assume things do get done. The deal is completed in the second half of this year. Do you anticipate any further significant M&A in the medium term timeframe? Yes.
I think that's an easy one, Rob. So just..................
Picking up where Michelle left off, the answer would be no. You know, we'll have close to 13, 14 billion dollars of debt, and as we've said previously, we'll be using our free cash flow to reduce that debt to maintain our investment credit rating. So, no. That was the answer.
You know, a couple years down the road, we can re-look at that. But we want to keep a strong balance sheet, focus on execution. You know, we really, going back to December , you know, there were three things that were a challenge, whether a reality or perceived, and that was how could you...
How could you integrate via SAT, you know fix your operational issues and buy Aerojet Rock and Dine at the same time? I'm pleased to report on via SAT that the integration is going well looks like both the Both the revenue and the cost synergies will meet to exceed our business case so that that is exciting
We're about six months ahead of schedule relative to consolidating facilities. We have a four-phase process, so the risk of moving is reasonably low. We're in the middle of the first phase, so we'll basically take the four major product lines one by one, and that could be done by the end of this calendar year.
which again is ahead of schedule. You know the customer feedback and the interactions has been real exciting relative to these new capabilities. We talked briefly about Lync 16 in space, and I'm pleased to say for the first time ever, Lync 16 is in space based on some...
recent payloads that were launched. So, you know, it's probably a little early to say that the biasat is done, but it's on a really good track and I would think we kind of had that behind us. I think on the the operational challenges, you know again, really proud of this team in this quarter. It feels like
We've turned the corner. A lot of this, and I know it was, nobody wanted to keep hearing about the products and 25% and revenue recognition and such, but it was unique compared to the rest of the industry. And now that we're getting the supplies in, we're redesigning products. You know, you're seeing that in the top line and you'll see that in the bottom line as well. And then by the time the deal closes.
you know, the focus for my team and others will be on Aerojet Rocketdyne. So January 1, a lot of questions, a lot of uncertainty, and I think we're knocking these issues out one by one over a 12-month period. And by the time we get to 24, we're going to have a lot of momentum.
behind us. So hope that helps. Maybe we have time for, looks like one last question.
That was it. All right, no other questions in the queue. So, look, I appreciate everybody participating and calling in and asking the questions and we'll look forward to engaging with you in the months ahead. Have a great weekend. Thanks.
Thank you everyone. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.