Q2 2024 V2X Inc Earnings Call

Can find a reconciliation of these measures to the most comparable measure calculated and presented in accordance with GAAP on our slide presentation and the earnings release filed with the SEC both of which are available on the Investor Relations section of our website.

At this time I would like to turn the call over to Jeremy.

Jeremy: Thank you Mike and good morning, everyone. Thank you for joining us today before I get started I would like to thank 16000 <unk> employees for their warm welcome.

Operator: Thank you, Mike, and good morning, everyone. Thank you for joining us today.

Jeremy Wenzinger: Before I get started, I'd like to thank 16,000 B2X employees for their warm welcome. I am honored to be part of an organization that is supporting some of the most important missions around the globe and plays such a critical role in our national security. Please turn to slide three.

Jeremy: I'm honored to be part of the organization that is supporting some of the most important missions around the globe and plays such a critical role in our National security.

Jeremy: Please turn to slide three.

Speaker Change: <unk> reported record quarter, two revenue of $1 1 billion, increasing 10% year over year growth was driven by the Companys continued momentum in the Pacific and Middle East.

Unnamed Speaker: P2X reported record Q2 revenue of $1.1 billion, increasing 10% year-over-year. Growth was driven by the company's continued momentum in the Pacific and Middle East. Adjusted EBITDA margin in the quarter was 6.7%, and adjusted diluted EPS was 83 cents.

Speaker Change: Adjusted EBITDA margin in the quarter was six 7% and adjusted diluted EPS was <unk> 83.

Speaker Change: The demand for our mission oriented full lifecycle solutions remained strong and was demonstrated through several recent awards valued at over $4 billion.

Unnamed Speaker: The demand for our mission-oriented, full-life cycle solutions remains strong and was demonstrated through several recent awards valued at over $4 billion. This includes a production award for our gateway mission routers, an award from NASA valued at $265 million, the award of the adversarial aircraft program named F5 at $747 million, and finally, a $3 billion plus award to deliver next generation readiness. Given our year-to-date performance, backlog, and awards, we are raising our 2024 revenue guidance and reaffirming our adjusted EBITDA, EPS, and net cash from operations.

Speaker Change: This includes a production award for our Gateway Mission Routers and award from NASA valued at $265 million.

Speaker Change: Award of the Administerial aircraft program named up five at $747 million and finally, a $3 billion plus award to deliver next generation readiness.

Speaker Change: Given our year to date performance backlog and awards, we are raising our 2020 for revenue guidance and reaffirming our adjusted EBITDA EPS and net cash from operations.

Speaker Change: Please turn to slide four where I will further discuss recent notable awards.

Unnamed Speaker: Please turn to slide four, where I will further discuss recent notable awards. Our focus on providing mission-based technology solutions that enable assured communications is yielding results. This was exemplified in approximately $280 million in recent awards, which are listed on the left-hand side of the slide.

Speaker Change: Our focus on providing mission based technology solutions that enable assured communications is yielding results.

Speaker Change: This was exemplified in approximately $280 million of recent awards, which are listed on the left hand side of the slide.

Speaker Change: First be two X secured a $49 million award to provide enhanced communications across multiple domains with the gateway mission router or junior Maher.

Unnamed Speaker: First, V2X secured a $49 million award to provide enhanced communications across multiple domains with the Gateway Mission Router, or GMR. GMR is a cyber-hardened technology designed to facilitate real-time situational awareness. It seamlessly integrates information and assured communications, creating a truly converged operational environment. GMR has broad applicability across numerous aviation and ground platforms, and we believe it offers opportunity for growth beyond this initial award. As such, we are continuing to enhance and invest in the solution to provide even greater advanced processing capabilities at lower size, weight, and power.

Speaker Change: <unk> is a cyber harden technology designed to facilitate real time situational awareness.

Speaker Change: It seamlessly integrates information and assured communications, creating a truly converged operational environment.

Speaker Change: DMR has broad applicability across numerous aviation and ground platforms and we believe offers opportunity for growth beyond. This initial award as such we are continuing to enhance and invest in the solution to provide even greater advanced processing capabilities at lower size weight and power.

Unnamed Speaker: Additionally, we believe GMR is positioned to be a key enabler for the Department of Defense's Combined Joint All-Domain Command and Control, or JADC2, initiative. JADC2 is a DoD concept that connects disparate systems into the Internet of Military Things, creating a common operational picture, making information accessible anywhere, anytime, for rapid decision making.

Speaker Change: Additionally, we believe <unk> is positioned to be a key enabler for the department of defense combined joint all domain command and control or Chad C. Two initiative <unk> two is a D. O D concept then it connects disparate systems into the Internet of military things, creating a common operational pick.

Speaker Change: Sure, making information accessible anywhere anytime.

Speaker Change: Rapid decisions.

Speaker Change: <unk> is delivering assured communications to the U S Navy, while further expanding its footprint in the Pacific our new five year $88 million Naval computer and Telecommunications specific award also known as Nick Tam will provide vital before I support to over 700.

Unnamed Speaker: Next, V2X is delivering assured communications to the U.S. Navy while further expanding its footprint in the Pacific. Our new five-year, $88 million Naval Computer and Telecommunications Pacific Award, also known as NICTAMS, will provide vital C4I support to over 700 U.S. and allied forces across the Pacific and Indian Ocean. Our five-year, $141 million Fleet Systems Engineering Team Program will continue to deliver end-to-end C4I systems engineering solutions that are integral to the communications and readiness of the U.S. Navy ship. FSAT ensures that no U.S. Navy strike group deploys without V2X.

Speaker Change: And Allied forces across the Pacific and Indian Oceans.

Speaker Change: Our five year $141 million fleet systems Engineering team program will continue to deliver end to end <unk> system engineering solutions that are integral to the communications and readiness of the U S. Navy ships upset ensures that no U S. Navy strike group deploys without figure two works.

Speaker Change: Moving to the center of the Slide V to X continues to be a leader in providing global solutions to our customers' most critical and high impact missions.

Unnamed Speaker: Moving to the center of the slide, V2X continues to be a leader in providing global solutions to our customers' most critical and high-impact missions. This market strength was recently demonstrated through approximately $1 billion in awards, which includes our nine-year award to support the NASA operations and preparedness for human spaceflight mission at the Johnson Space Center. Specifically, V2X will assist NASA in preparing for the upcoming Artemis II mission by ensuring the reliability of the integrated hardware and software systems at the Neutral Buoyancy Laboratory. Additionally, we are currently phasing in the new eight-year F-5 program, which is enabling the advanced training of U.S. naval pilots or providing readiness for the F-5 aircraft that mimics current threat aircraft.

Speaker Change: This market strength, which was recently demonstrated through approximately $1 billion.

Speaker Change: Of awards, which includes our nine year award to support the NASA operations and preparedness for human spaceflight mission at the Johnson Space Center.

Speaker Change: Specifically <unk> will assist math and preparing for the upcoming Artemis to mission by ensuring the reliability of the integrated hardware and software systems at the neutral buoyancy laboratory.

Speaker Change: Additionally, we are currently phasing in the new eight year F five program, which is enabling.

Speaker Change: The advanced training of U S Naval pilots are providing readiness.

Speaker Change: Two the F five aircrafts that mimics current threat aircraft.

Speaker Change: Lastly, and moving to the right hand side of this slide <unk> is harnessing its capabilities to deliver next generation readiness solutions for customers.

Unnamed Speaker: Lastly, and moving to the right side of the slide, B2X is harnessing its capabilities to deliver next-generation readiness solutions for customers. For example, the company recently secured an award valued at three plus billion dollars over five years to enable full spectrum readiness. This award is representative of the capability synergies that can be generated by V2S. It leverages the legacy and breadth of the combined company. This includes readiness support, the ability to operate large, complex programs, and the introduction of technologies such as smart warehousing, 5G, and logistics tools.

Speaker Change: For example, the company recently secured an award valued at three plus billion dollars over five years to enable full spectrum readiness.

Speaker Change: This award is representative of the capability synergies that can be generated by <unk>.

Speaker Change: This award leveraged the legacy and breadth of the combined company. This includes readiness support ability to operate large complex programs and the insertion of technology, such as smart warehousing, five Mg and logistics tools.

Unnamed Speaker: Combining this robust set of capabilities with the insertion of artificial intelligence and a differentiated tool suite allowed V2X to submit a unique proposal. This is just one example of our combined capabilities that can be leveraged to win. Now I'd like to turn the call over to Shawn for a review of the financials.

Speaker Change: Combining this robust set of capabilities with the insertion of artificial intelligence and a differentiated tool suite allows <unk> to submit a unique proposal.

Speaker Change: This is just one example of our combined capabilities that can be leveraged to win.

Speaker Change: Now I'd like to turn the call over to Shaun for a review of the financials Sean.

Shaun: Thanks, Jeremy.

Shawn: It's a pleasure to be working with you, and thanks to everyone joining us today. Please turn to slide 5. Strong top-line performance continued in Q2. Record revenue of $1,072,000,000 in the quarter represents growth of 10% year-over-year. Revenue growth in the quarter was again achieved through expansion of existing business in the Middle East and Pacific regions, as well as new programs. This reflects the continued strong demand for our offerings around the globe.

Shaun: It's a pleasure to be working with you and thanks to everyone joining us today.

Please turn to slide five.

Shaun: Strong top line performance continued in Q2.

Speaker Change: Record revenue of $1.072 billion in the quarter represents growth of 10% year over year.

Speaker Change: Revenue growth in the quarter was again achieved through expansion of existing business in the middle East and Pacific regions as well as new programs.

Speaker Change: This reflects the continued strong demand of our offerings around the globe.

Speaker Change: Adjusted EBITDA in the quarter was $72 $3 million delivering a margin of six 7%.

Shawn: Adjusted EBITDA in the quarter was $72.3 million, delivering a margin of 6.7%. As a reminder, we are referring to certain non-GAAP financial measures because we believe such measures are useful to investors. As we have mentioned previously, we expect revenue and adjusted EBITDA to ramp sequentially throughout the remainder of the year. Interest expense for the quarter was $28.8 million. Cash interest expense was $26.8 million, and adjusted diluted EPS was $0.83. I'd like to point out that the adjusted tax rate in the second quarter was 28% due to the executive transition. Absent this, our adjusted tax rate would have been approximately 23%, yielding adjusted EPS of 88 cents.

Speaker Change: As a reminder, we are referring to certain non-GAAP financial measures because we believe such measures are useful to investors.

Speaker Change: As we have mentioned previously we expect revenue and adjusted EBITDA to ramp sequentially throughout the remainder of the year.

Speaker Change: Interest expense for the quarter was $28 8 million cash interest expense was $26 $8 million.

Speaker Change: Adjusted diluted EPS was <unk> 83.

Speaker Change: I'd like to point out that the adjusted tax rate in the second quarter was 28% due to the executive transition.

Absent this our adjusted tax rate would have been approximately 23%.

Speaker Change: Yielding adjusted EPS of <unk> 88.

Speaker Change: Please turn to slide six where I'll discuss our year to date results.

Shawn: Please turn to slide six, where I'll discuss our year-to-date results. Consistent with our expectations, year-to-date revenue is $2,083,000,000, increasing 8% year-over-year. Adjusted EBITDA for the first half of the year was $141.4 million, or 6.8% margin compared to $147.1 million in the prior year. The change reflects contract actions that were more heavily weighted in the first half of 2023 compared to 2024.

Speaker Change: Consistent with our expectations year to date revenue was $2 $83 million, increasing 8% year over year.

Speaker Change: Adjusted EBITDA for the first half of the year was $141 4 million or six 8% margin compared to $147 1 million in the prior year.

Speaker Change: The change reflects contract actions that were more heavily weighted in the first half of 2023 compared to 2024.

Speaker Change: Interest expense through June was $56 $4 million.

Shawn: Interest expense through June was $56.4 million, and cash interest expense was $52.2 million, a decrease of $6.8 million compared to the first half of 2023. This improvement is reflective of the continued debt reduction and successful repricing efforts. Year-to-date adjusted diluted EPS was $1.72 based on 31.9 million weighted average shares.

Speaker Change: Cash interest expense was $52 $2 million.

Speaker Change: A decrease of $6 8 million compared.

Speaker Change: Compared to the first half of 2023.

Speaker Change: This improvement is reflective of our continued debt reduction and successful repricing efforts.

Speaker Change: Year to date adjusted diluted EPS was $1 72.

Speaker Change: Based on 31 9 million weighted average shares.

Speaker Change: Year to date net cash used by operating activities was $31 6 million reflective of working capital requirements to support growth as well as the implementation of new business applications.

Shawn: Here today, net cash used by operating activities was $31.6 million, reflective of working capital requirements to support growth, as well as the implementation of new business applications. Adjusted net cash used by operating activities was $137.3 million, adding back approximately $12.1 million of M&A and integration costs and removing the contribution of the Master Accounts Receivable Purchase, or MARPA, facility of $117.8 million. Please turn to slide 7.

Speaker Change: Adjusted net cash used by operating activities was $137 3 million, adding back approximately $12 1 million of M&A and integration costs and removing the contribution of the master accounts receivable purchase or Mark a facility of $117 8 million.

Speaker Change: Please turn to slide seven.

Speaker Change: During the quarter, we re priced and extended the $904 million term loan b.

Shawn: During the quarter, we repriced and extended the $904 million term loan. This represents the second successful repricing of Term 1B, which in aggregate has yielded an 85 basis point improvement in interest rate pricing since October of last year. These positive efforts have allowed us to reduce cash interest expense by $5 million in 2024, which is incorporated into our assumption. We continue to make excellent progress, proactively enhancing the capital structure and lowering interest expenses.

Speaker Change: This represents the second successful repricing of the term loan b, which in aggregate have yielded an 85 basis point improvement in interest rate pricing since October of last year.

Speaker Change: These positive efforts have allowed us to reduce cash interest expense by $5 million in 2024, which is incorporated into our assumptions.

Speaker Change: We continue to make excellent progress proactively enhancing the capital structure and lowering interest expense.

Shawn: Since the merger closed, we have lowered the weighted average annual interest rate grid pricing on our total debt by 170 basis points. Net debt improved by $27 million compared to the prior year. The net debt to EBITDA leverage ratio was 3.6 times at the end of the quarter, essentially flat compared to the first quarter. The company's balance sheet and liquidity position remain strong, with $479 million in capacity, which includes approximately $436 million of availability on the revolver. Please turn to slide 8.

Speaker Change: Since the merger closed we have lowered weighted average annual interest rate grid pricing on our total debt by 170 basis points.

Speaker Change: Net debt improved by $27 million compared to prior year.

Speaker Change: Our net debt to EBITDA leverage ratio was three six times at the end of the quarter essentially flat compared to the first quarter.

The company's balance sheet and liquidity position remains strong with $479 million in capacity, which includes approximately $436 million of availability on the revolver.

Speaker Change: Please turn to slide eight.

Speaker Change: Total backlog was $12 $2 billion in the second quarter.

Shawn: Total backlog was $12.2 billion in the second quarter, representing approximately three times revenue at the midpoint of guidance. This key metric is an important attribute of our business and provides excellent revenue visibility. We expect backlog to increase in the second half of the year due to awards and contract definition. As Jeremy discussed, there will be several awards that we'll add to our backlog. For example, the $747 million F5 Adversary Award, which is currently in the transition phase and expected to be booked in the third quarter.

Speaker Change: Presenting approximately three times revenue at the midpoint of guidance.

Speaker Change: This key metric is an important attribute of our business and provides excellent revenue visibility.

Speaker Change: We expect backlog to increase in the second half of the year due to awards and contract definitive patients.

Speaker Change: As Jeremy discussed there will be several awards that will add to our backlog for example, the $747 million F. Five adversary award, which is currently in the transition phase and expected to be booked in the third quarter and.

Shawn: In addition, the $141 million Recompete of FSET, which was awarded subsequent to Q2, is expected to be booked in Q3. With regard to the Saudi Aviation Training Support Services Award, we have completed transition, are successfully executing the program, and are progressing towards definitizing the contract. Finally, on the $3 billion plus readiness award, we expect to incrementally book activities as they are put on contract. In terms of revenue, we expect the program to ramp up in the second half of 2025 with a full annual incremental contribution of approximately $200 million. This, coupled with the F5 win, enhances revenue visibility by potentially adding approximately $300 million of annual revenue over the next several years. Please turn to slide nine.

Speaker Change: In addition, the $141 million Recompete of upset which was awarded subsequent to Q2 is expected to be booked in Q3.

Speaker Change: With regard to the Saudi Aviation training support Services Award. We have completed transition are successfully executing the program and are progressing towards the <unk> the contract.

Speaker Change: Finally on the 3 billion plus dollar readiness award, we expect to incrementally book activities as they are put on contract.

Speaker Change: In terms of revenue, we expect the program to ramp in the second half of 2025 with four annual incremental contribution of approximately $200 million.

Speaker Change: This coupled with the five win enhances revenue visibility by potentially adding approximately $300 million of annual revenue over the next several years.

Speaker Change: Please turn to slide nine.

Speaker Change: Given our strong year to date topline performance, we are raising our revenue guidance to $4 billion $175 million to $4 billion $275 million.

Shawn: Given our strong year-to-date top line performance, we are raising our revenue guidance to $4,175,000,000 to $4,275,000,000. We are reaffirming adjusted EBITDA, adjusted EPS, and adjusted net cash from operating activities. In summary, we are pleased with the performance across the business in the first half of the year. With that, I'd like to turn the call back over to Jeremy.

Speaker Change: We are reaffirming adjusted EBITDA adjusted EPS and adjusted net cash from operating activities.

Speaker Change: Summary, we are pleased with the performance across the business in the first half of the year.

Speaker Change: I'd like to turn the call back over to Jeremy.

Jeremy Wenzinger: Thanks, Shawn. Please turn to slide 10.

Jeremy: Thanks, Sean Please turn to slide 10.

Jeremy: I'd like to close with some observations and what I believe are opportunities for <unk> to achieve its next stage of growth and drive additional value.

Jeremy Wenzinger: I'd like to close with some observations and what I believe are opportunities for B2X to achieve its next stage of growth and drive additional value. First, at $4 billion in revenue, B2X has the size and scale to compete in its core markets. Additionally, our global footprint, spanning over 50 countries, is an extremely important differentiator in the market served by B2X. The infrastructure, people, processes, and expertise to operate at a global level are a distinguishing feature and one that is not easily replicated.

Jeremy: First at $4 billion in revenue <unk> has the size and scale to compete in its core markets. Additionally, our global footprint spanning over 50 countries is an extremely important differentiator in the market served by <unk>.

Jeremy: The infrastructure people processes and expertise to operate on a global level is a discriminator and one that is not easily replicated.

Jeremy: Second from a capability perspective, <unk> is aligned to well funded federal budgets, including the largest component of the Dod spending at over $300 billion annually.

Jeremy Wenzinger: Second, from a capability perspective, B2X is aligned to well-funded federal budgets, including the largest component of the DOD budget at over $300 billion annually. Furthermore, B2X is positioned in key theaters such as the Pacific and Middle East, where missions matter and are receiving strong funding support from the DoD. For example, the DOD requested $9.9 billion in government fiscal year 25 as part of the Pacific Deterrence Initiative, which is up approximately 60% from the amount appropriated in government fiscal year 23.

Jeremy: Furthermore, <unk> is positioned in key theaters, such as the Pacific and Middle East permissions matter and are receiving strong funding support from the Dod.

Jeremy: For example, the Vod has requested nine $9 billion in government fiscal year 'twenty five as.

Jeremy: As part of the Pacific Deterrence initiative, which is up approximately 60% from the amount appropriated and government fiscal year 'twenty three.

Jeremy Wenzinger: Third, V2X has solid past performance in all aspects of its business, with operational intimacy that provides excellent insight into how missions are evolving. This allows V2X to be ready to support emerging requirements with the critical agility it is known for and that is required in the missions we support. In terms of opportunities, the market is rapidly evolving, and B2X is in a great position to accelerate technology insertion, such as artificial intelligence and machine learning, into the missions we support.

Third <unk> has solid past performance in all aspects of its business with operational intimacy that provides excellent insight into how missions are evolving.

Speaker Change: This allows <unk> to be ready to support emerging requirements with the critical agility <unk> is known for and that is required in the missions we support.

Speaker Change: In terms of opportunities the market is rapidly evolving and <unk> is in a great position to accelerate technology insertion, such as artificial intelligence and machine learning into the missions we support we.

Jeremy Wenzinger: We are inserting this technology into our bids today as differentiators. As a trusted partner, V2X can leverage operational know-how and technology to create a better customer experience and enhanced outcomes. You will hear me speak more about it in the future about how we are integrating these technologies into operations.

Speaker Change: We are inserting this technology into our bids today as differentiators.

Speaker Change: As a trusted partner <unk> can leverage operational know, how and technology to create a better customer experience and enhanced outcomes. You will hear me speak more about it in the future. How we are inserting these technologies into operations.

Speaker Change: The depth and breadth of the <unk> portfolio is differentiated and we have an excellent opportunity to do more with our capabilities.

Jeremy Wenzinger: The depth and breadth of the V2X portfolio is differentiated, and we have an excellent opportunity to do more with our capability. V2X has a robust set of solutions that have been further leveraged to pursue new opportunities. A great example was the recent Large Readiness Award, which utilized the full power of the organization.

<unk> has a robust set of solutions I think further leverage to pursue new opportunities. A great example was the recent large readiness award, which utilize the full power of the organization. We are in the early stages of what we can achieve and see multiple opportunities to build on this win.

Jeremy Wenzinger: We are in the early stages of what we can achieve and see multiple opportunities to build on this win. Our new business pipeline will continue to reflect the opportunity presented by the combination of our capabilities. As you heard me discuss earlier, B2X is at the front end of several large new business wins, and we will incorporate operational excellence that ensures that these programs are set up for long-term success. We will build on our past practices to enhance overall performance on new and existing programs.

Speaker Change: Our new business pipeline will continue to reflect the opportunity presented by the combination of our capabilities.

As you heard me discussed earlier <unk> is at the front end of several large new business wins, and we will incorporate up operational excellence that ensures that these programs are set up for long term success.

Speaker Change: We will build on the on our past practices to enhance overall performance on new and existing programs.

Speaker Change: Finally, I believe one of <unk> greatest opportunities is as we move from the chapter of integration to the chapter of optimization and performance excellence.

Jeremy Wenzinger: Finally, I believe one of V2X's greatest opportunities is as we move from the chapter of integration to the chapter of optimization and performance excellence. It will be my priority to leverage my experience across 30 plus integrations to refine our business and processes in order to drive value and take advantage of our global footprint and scale. In conclusion, V2X has great momentum, and I believe there is a substantial opportunity to build upon our strong performance.

Speaker Change: It will be my priority to leverage my experience across 30, plus integrations to refine our business and processes in order to drive value and take advantage of our global footprint and scale.

Speaker Change: In conclusion, <unk> has great momentum and I believe there is substantial opportunity to build upon our strong performance. The core of our foundation remains our employees and our commitment to deliver differentiated solutions to ensure customer mission success.

Jeremy Wenzinger: The core of our foundation remains our employees and our commitment to deliver differentiated solutions to ensure customer mission success. Now, I'd like to open the call to questions. Operator? We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad.

Speaker Change: Now I'd like to open the call to questions operator.

Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad. If you are using a speakerphone. Please pick up your handset before pressing the keys.

Operator: 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. If at any time your question has been answered and you would like to withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster. Our first question comes from Joe Gomes with Noble Capital. Please go ahead.

Speaker Change: If at any time that question has been addressed and you would like to withdraw your question. Please press Star then two at.

Speaker Change: At this time, we will pause momentarily to assemble a roster.

Joe Gomes: Good morning, and thanks for taking my question.

Unnamed Speaker: Morning, Joe.

Joe Gomes: So, Jeremy, welcome aboard. Nice to finally meet you, even though it's telephonically. Just wondering, in the last few months now... (inaudible)

Jeremy Wenzinger: Thank you for the question, and Joe, thanks for joining the call. I think the first impression I would give you is that I'm genuinely impressed with the people. You know, I said it in the last part of the earnings call there just a minute ago. These are some very impressive people doing very impressive work around the globe. It is a lot more complex than I probably thought when I walked in the door.

Speaker Change: Probably thought when I walked in the door.

Jeremy Wenzinger: I had the opportunity to meet with the management team in our Indianapolis facility and got to meet them in person, the people who lead the businesses. I am genuinely impressed with them. They have demonstrated performance. They have demonstrated the ability to take that performance and generate new wins and revenue growth. I am impressed.

Speaker Change: The opportunity to meet with the management team.

Speaker Change: Our Indianapolis facility and got to meet them in person that people who lead the businesses.

Speaker Change: Genuinely impressed with them they have.

Speaker Change: Demonstrated performance they have demonstrated the ability to take that performance and generate new wins and revenue growth.

Speaker Change: I've been I've been impressed and I think there's a lot to build on and I think as I look at where we're focusing our efforts. The efforts are around execution performance excellence.

Jeremy Wenzinger: I think there is a lot to build on. I think as I look at where we are focusing our efforts, the efforts are around execution, performance excellence, and driving what I would say is coming out of integration, having the opportunity to look at optimization through really a couple lenses. I think anytime you come out of integration, you really have a chance to look at what is now the company. We see the opportunity to take the broader portfolio into the fight, and I think you see that with the most recent award for readiness.

Speaker Change: And driving what I would say is coming out of integration having.

Speaker Change: Having the opportunity to look at optimization with really a couple a couple of lenses.

Speaker Change: I think anytime you come out of integration and you really have a chance to look at what is now the company.

Speaker Change: We see the opportunity to take the broader portfolio to the fight.

Speaker Change: And I think you'll see that with the most recent award for readiness.

Jeremy Wenzinger: That was the combination of the companies coming together that would not have been possible without the companies being acquired. So I think you will see us take more of that and move forward, and it will start manifesting itself in the pipeline as we think about the total capabilities of the company and drag them into these new opportunities. But candidly, I am genuinely impressed with the talent in the company, genuinely impressed with the overall ability to execute a very difficult... portfolio of programs, and they do it flawlessly. And I've been just thrilled to be here and thrilled with the people that have welcomed me so far.

Speaker Change: That was the combination of the companies coming together that would not have been possible without the companies being acquired.

Speaker Change: I think you will see us take more of that and move forward and it will start manifesting itself in the ports.

Speaker Change: Pipeline as we as we think about the total capabilities of the company and dragging them into these new opportunities, but you know candidly I am genuinely impressed with the talent in the company genuinely impressed with the overall ability to execute a very difficult.

Joe Gomes: Great, thanks for that; I appreciate it. You know, the past couple of quarters have been somewhat questionable, partly due to, you know, continuing resolution was kind of the awards pace. And obviously, we've seen the awards that you guys have been winning, but as you look at the overall picture, is the pace of awards coming out as you expected, or is it, you know, maybe still a little bit kind of slower just given, you know, the impact of last year's continuing resolution?

Shawn: Hey Joe, it's Shawn. Yeah, so in the quarter, you know, we had a book to build that was right around 0.7, very consistent with what we saw in Q1. So when we think about year to date, you know, we're looking at about $1.5 billion in awards. So we absolutely saw a continuation of that, I'll say muted, environment with a number of the things that we announced here today. Obviously, we expect that to pick up in the back half of the year.

Joe Gomes: Okay, and then one more from Ben, and I'll get back in queue. You didn't talk about the pipeline here. I think the last quarter, you know, was a $25 billion kind of pipeline, some near-term, some longer-term, obviously. Can you give us any color on what the pipeline stood at at the end of the quarter?

Speaker Change: You didn't talk about a pipeline here I think the last quarter. You know it was a 25 billion kind of pipeline. Some near term some longer term. Obviously can you give us any color on what the pipeline stood at the end of the quarter.

Speaker Change: Yeah, I don't think there was any material change to the pipeline you know I think if you think about the duration for which most of the programs are.

Jeremy Wenzinger: I don't think there was any material change to the pipeline. You know, I think if you think about the duration for which most of the programs are acquired, you start 18 to 24 months in advance.

Speaker Change: Our acquired you start 18 to 24 months in advance.

Jeremy Wenzinger: You work it through the pursuit phase, that pursuit ends up being culminated in an RFP, and, you know, Shawn just spoke about how post RFP can be subject to a lot of constraints, you know, and as you just said, CR being one of them. But, you know, there's no real material change to the pipeline. What I'm more excited about, Joe, candidly, is what the pipeline is going to start looking like as we have the opportunity now coming out of integration.

You work it through the pursuit phase that pursued ends up being culminated in an RFP and you know as Sean just spoke want you know post RFP can can be subject to a lot of constraints.

Speaker Change: As you just said CR being one of them.

Speaker Change: But theres no real material change the pipeline what I'm more excited about Joe candidly is what the pipeline is going to start looking like as we have the opportunity now coming out of integration and candidly.

Jeremy Wenzinger: And candidly, you know, I'll be honest, there's a lot of fog in integration, right? You're working very diligently to get all the systems up and running, getting everybody in a position to be able to run the business without impacting our customers. This team did a remarkable job of not impacting customers, not impacting missions, not impacting employees. You know, that part of integration was exceptionally well done. Now, the real opportunity is taking everything that we now see that's horizontally across the company and putting it together in a way that it will start to show itself in pursuits that previously weren't in the pipeline because of desperate companies, but now, as one company, you will start seeing that pipeline reflect the combination of the company's capabilities as we pursue that going forward.

Speaker Change: Honestly, there's a lot of fog and integration right Youre working very diligently to get all the systems up and running getting everybody in a position to be able to execute the business without impacting our customer.

Speaker Change: Team did a remarkable job of not impacting customers not impacting missions not impacting employees.

Jeremy Wenzinger: So, you know, I'll talk more about it in the fall timeframe, but right now, the pipeline remains pretty consistent with what you've seen in the past. But I'm more excited about what it's going to look like in the future.

Joe Gomes: Great. Thanks. I appreciate it. I'll jump back in the queue. Thank you.

Operator: Our next question comes from Tobey Sommer with SunTrust. Please go ahead.

Tobey Sommer: Thanks. I wanted to ask you a question about the forward outlook with the slightly better revenue growth but holding the profit metrics in line. What are the puts and takes in that from your perspective that are restraining the profit metrics from accompanying the higher expected revenue?

Shawn: Yeah, I think, Tobey, some of it's the contingency support that we do around the globe, right? So in the quarter, we saw good, strong, continued growth in the Middle East, I think 29%, and similarly in Asia-Pacific. And, you know, those things that that type of workforce tends to bring with it a lower margin. So we're seeing the top line; we're seeing the top line revenue, of course, flow through. And it's a bit more, you know, lower, like I said, lower margin programs that deliver some of that.

Tobey Sommer: And if I could ask you to comment on the contract awards that you've already won in the current quarter, I guess. And maybe the quantity and extent of contract decisions that you expect in this, you know, final fiscal quarter of your customers, because just trying to get a sense for how much you already have in the bag and what a book to build would look like if we were to ask for one today for the quarter and maybe what your expectations are for what is, you know, seasonally, a pretty strong one.

Speaker Change:

Speaker Change: And maybe the quantity and extent of a contract decisions that you expect in this.

Speaker Change: Final fiscal quarter are your customers.

Speaker Change: Because I'm.

Speaker Change: Just trying to get a sense for how much you already have in the bag and what our book to Bill would look like if we were to add.

Speaker Change: Ask for one today for the quarter and maybe what your expectations is for what is seasonally a pretty strong one.

Shawn: I'd say it this way, for the total year as opposed to the absolute quarter, because there's always timing affected with definitizations, that sort of stuff. Like we mentioned, I think we're encouraged with some recent, I'd say that we're right around a 1.0 book to bill for the year, which is what we're expecting. Obviously, back half-weighted in terms of some of those things.

Speaker Change: Yeah, I think for the.

Speaker Change: I'd say it this way for that for the total year as opposed to the absolute quarter, because there's always timing affected with different activations that for stuff like we mentioned I think we're encouraged with some with some recent.

Speaker Change: I would say that we're right around a one <unk> book to Bill for the year is what we're expecting.

Speaker Change: Obviously back half weighted.

Speaker Change: In terms of in terms of some of those things.

Speaker Change: Okay and then.

Tobey Sommer: Okay, and then... Anything that we should consider for the revenue outlook being, you know, slightly faster growth? Anything that we should consider that might taper off, just trying to..., get some color there as we look to model next year, how we should think about exiting this year at a better clip. Yeah, so.

Speaker Change:

Speaker Change: Anything that.

Speaker Change: The revenue outlook being slightly faster growth.

Speaker Change: Anything that we should consider that might taper off just trying to.

Shawn: Yeah, so I'll go back to what we said kind of as we came into the year. So programs like T1A and KC10, they wind down actually this quarter, really, you know, so that activity will be, you know, largely behind us, and then you're seeing some mix with some of the transition activities that we just talked about. Those tend to be, you know, a little bit more gradual, I'll say. For example, F5, I mentioned the ATSS award that we're executing now, but it's still being defined. So I think those are some of the things that we expect to see on the ramp here, but, you know, it'll be somewhat modest in the back half of this year.

Tobey Sommer: And last one for me, do you have any significant protests or re-competes for us to consider either currently or over the next several quarters?

Shawn: protests. I mean, the big one was the one that we announced earlier today on the F5 that we're in transition on. There's no other items that are in protest that we're waiting on adjudication on, you know, for the balance of the year. Relative to re-competes, you know, nothing material in the back half of this year that is material in nature.

Tobey Sommer: Okay, thank you very much.

Operator: Our next question comes from Ken Herbert with RBC Capital Markets. Please go ahead.

Ken Herbert: Yeah, hi, good morning, Jeremy, Shawn, and Mike. Maybe Jeremy, I just wanted to drill down into some of your comments on sort of the optimization. As you think about that transition now, and as you think about those opportunities, can you maybe provide a little more granularity? You know, I can appreciate you've only been there a few months, but a little more granularity beyond contract mix, maybe where you might see some opportunity for better margin performance, or maybe different priorities in terms of investing and areas of growth with better margin opportunities as you look out, not just in the second half of this year but then certainly into next year as well.

Speaker Change: Contract mix, maybe where you might see.

Speaker Change: The opportunity for better margin performance or maybe different priorities in terms of investing in areas of growth with better margin opportunity as you look out not just in the second half of this year, but then certainly into next year as well.

Speaker Change: Happy to and thanks for joining the call I. Appreciate the question Ken I think you know when I when I think about optimization. It is it comes down to giving our local teams.

Jeremy Wenzinger: Happy to. And thanks for joining the call. I appreciate the question, Ken. I think, when I think about optimization, it comes down to giving our local teams the information that allows them to optimize performance, whether that is through the supply chain, whether it's through staffing and recruiting, whether it's through the, you know, just the ability to have information at their fingertips that allows them to optimize performance on the program.

Speaker Change: The information that allows them to optimize performance.

Speaker Change: Whether that is through the supply chain, whether it's through staffing and recruiting whether it's through the just the ability to have.

Speaker Change: Information at their fingertips that allow them to optimize the performance on the program and and as I tried to say as you come through integration you're really focused on.

Jeremy Wenzinger: And, as I tried to say, as you come through integration, you're really focused on the kind of nuts and bolts of getting everything put together. But when you come out of that, then it comes down to how do I put visualization tools in front of them? How do I put processes in front of them.

Speaker Change: The kind of the nuts and bolts of getting everything put together, but when you come out of that then it comes down to how do I put visualization tools in front of them, how do I put process in front of them, how do I put procedures in front of them that allow us to have commonality across the platform and where this really gets to you.

Jeremy Wenzinger: How do I put procedures in front of them that allow us to have commonality across the platform? And where this really gets to, you get leverage on this. Program managers looking across the organization are operating their programs consistently within the V2X way. And as they do that, you know, that capability starts to travel easily horizontally across the company. And so optimization, to me, is about giving the local teams the things they need to execute their programs successfully without having to worry about systems or, you know, a lot of things you bump into in integration.

Speaker Change: You get leverage on this is <unk>.

Jeremy Wenzinger: How, you know, do I have any hiccups in the supply chain as I implement an ERP system? Anything that would impact their ability to execute kind of gets washed behind you. And now you're starting to really focus on giving them everything they need to be successful at the program level that takes the program to the next level, whether it's on margins or whether it's on flexibility, whether it's on readiness, whatever it is, it allows them to focus much more on that mission success.

Jeremy Wenzinger: With regards to new business. I think we'll spend some time this fall talking about what I just said, which is now as you come into that optimization and you're seeing the fact that we are an engineering company, we are a company that has a strong global footprint, that those two things become differentiators and how we're going to leverage those in terms of the mix of our pipeline is what we're going to spend time on this fall as we talk about the strategy of the company going forward and then the resulting margin impact associated with that.

Ken Herbert: Yeah, Jeremy, thank you. That's very helpful. And it looks like the revised or the guidance today implies a nice sort of step up in margins from first half to second half. I'm guessing that a lot of that is mixed.

Shawn: But then as you think about the progression in the next year, is it too premature? Can we at least think 2025 is some improvement on margins this year, maybe not quite back to the 8% level. But can you give any early indications on sort of how you think the progression continues beyond the second half of this year? Yeah.

Shawn: Yeah, I'd say this, you know, relative to the margins, the first half played out almost exactly like we thought it would. I think we had said coming into the year about 45% in the first half, 55% in the back half, exactly what you're seeing play out. You know, there is some seasonality to it in terms of productivity improvements, contract actions, things of that nature that we tend to see. And we're seeing those in the back half of this year.

Shawn: It would be early, obviously, to talk about 25. I don't know that I would think that it would be, you know, the beginning of 25, probably not on par with where we would end 2024, right, again, due to that seasonality of some of those non-reoccurring things that we get.

Ken Herbert: That's great. Thanks. And then just finally, on the free cash, really nice, you know, I think the outlook for some improvement there. Maybe Shawn, if you could just walk through some of the puts and takes as we think about the free cash in the second half of this year to get you down below the three times exiting the year.

Speaker Change: In the year.

Shawn: Yeah, yeah, great. I'd say this, you know, so we have had a couple of impacts in the second quarter, specifically relative to, I'll say, receipt timing. So, you know, we did, I talked about in the prepared remarks, a system implementation that we deployed that had a modest impact. We've also seen a little bit of changes in the payment cycles from certain customers that we expect to get, you know, kind of on track in the back half.

Speaker Change: Yeah great.

Speaker Change: I'd say this so we have had a couple of impacts in the second quarter, specifically relative to I'll say receipt timing.

Speaker Change: So we did I did talk about in the prepared remarks, a system implementation that we deployed that had a modest impact. We've also seen a little bit of changes in the payment cycles from certain customers that we expect to get kind of on track in the back half.

Shawn: The team's doing what you would expect everybody to do, which is, you know, working through those definitions, the startups, which, of course, also consumes some working capital. We'll be out of that here in the second half of the year and expect to meet our commitments.

Speaker Change: The team is doing what you would expect.

Speaker Change: Everybody to do which is working through those definitive <unk> startups.

Speaker Change: Which of course also consumed some some working capital will be out of that here in the second half of the year end and expect to meet our commitments.

Speaker Change: Great. Thanks, Sean and welcome Jeremy I'll pass it back there.

Ken Herbert: Great. Thanks, Shawn, and welcome, Jeremy. I'll pass it on there.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Trevor Walsh with citizens J M. P. Please go ahead.

Operator: Our next question comes from Trevor Walsh with Citizens JMP. Please go ahead.

Trevor Walsh: Great. Good morning team and thanks for taking my questions, Jeremy maybe starting with you Shawn mentioned the.

Trevor Walsh: Great. Good morning, team.

Jeremy Wenzinger: Thanks for taking my questions. Jeremy, maybe starting with you, Shawn mentioned the different contingency support revenues coming in, and that sounds like it's fairly broad-based, kind of from a geopolitical perspective. It would be interesting to hear your take on just broadly the geopolitical environment and where you see kind of areas where you can better serve customers, just based on kind of where you may be reading your tea leaves, kind of see things going, and how you maybe adjust or reposition resources or assets to kind of, again, deal with some of the different... complexities in the world, if you will.

Speaker Change: The different contingency.

Trevor Walsh: Contingency support revenues coming in and then it sounds like it's fairly broad based kind of from a geo perspective, just be interesting to hear your take on just broadly the geopolitical environment and where you see.

Speaker Change: Kind of.

Jeremy Wenzinger: No, thank you, and I appreciate the question and thanks for joining the call. I think when I gave the remarks earlier, I think it's important for you to understand that that global footprint is a true differentiator. And we are, and if you look at where the government spends its money on that $300 billion plus, we are absolutely aligned with that. And if you think about, you know, the Indo-Paycom move and our existing footprint in Indo-Paycom as, you know, you've The two areas where you hear the most in the news are the two areas where we have key differentiation, the Middle East and Indo-Pecan.

Jeremy Wenzinger: Those areas afford us a tremendous amount of flexibility to be reactive to customer needs on a real-time basis. And so, as the government continues to, you know, look at its footing and where it needs to spend its time and its calories, we are well-aligned with those funding profiles. The key for us is what I keep coming back to, which is bringing the entirety of the company to bear on our customer. And as we look at optimization, it is going to be 100% around bringing the entirety of the company to that customer and making them aware of what is available within the company so that when they have emissions of consequence, we are ready to serve them in a way that our presence allows us to be reactive and responsive to those needs.

Trevor Walsh: Great. I appreciate your perspective on that one. Maybe switching gears a little to the GMR contract. You mentioned in your previous remarks about some optimization around the unit itself, around the kind of size and whatnot. Can you maybe just, if you're able to, give us a little bit more detail there, and then maybe in the context of where you see, obviously, it's starting with the Army, but just where you see that expanding out to the other components, especially given you mentioned JADC2 kind of in the context there, just giving your outlook on that particular contractor that way? Sure, happy to.

Jeremy Wenzinger: Sure, happy to. I mean, I'm excited that we have a tow hold in JADC2. I think that is, you know, you hear about it a lot. This is a proven capability which I'm excited about, but think about it. It's past the, you know, does it work phase. You know, it's past the study phase, which is wonderful. We're now into what I would call LRIP, right?

Jeremy Wenzinger: You're in that phase where you're putting it in the vehicles. You're demonstrating it over and over again that this is a real-time problem that our customers have. Our next goal is to move this program to a program of record. And as it moves to a program of record, it then unleashes the fact that you have hundreds of thousands of these vehicles and aircraft that will benefit from this capability.

Jeremy Wenzinger: Our goal during this time frame is to continue to work on the form factor, which comes down to size, power, and weight within that unit. And we will continue to invest very consistently with what we've invested in the past to continue to enhance that asset and that capability to be ready for it when it becomes that program of record and becomes that opportunity for them to truly implement a JASC-2 solution.

Trevor Walsh: Great. I got it. I appreciate it. Maybe just one last one for you, Shawn. Can you just give us – I appreciate the color that you gave kind of in the callback – or in the prepared remarks, rather, around some of the contracts associated with the backlog and kind of where those are coming in kind of in this current 3Q. But just overall, maybe give us some color on how you think backlog should track for the balance of the year in terms of whether it's on a sequential growth basis or year-over-year, or Just give us a little bit of some guardrails.

Shawn: That'd be helpful. Thanks. Sure.

Speaker Change: CIS or year over year I, just just first half.

Speaker Change: Second half compare kind of just give us a little bit of a some guardrails that that'd be helpful. Thanks.

Shawn: Sure, happy to do so. You know, I think we expect the book to bill to end right around 1. The Readiness Award that we talked about is kind of a binary activity set, Trevor, meaning, you know, when things get put on contract, and that contract will ramp up in the back half of 2025, so very modest, you know, bookings anticipated this year for that activity set. The other things that you'll see added to backlog and grow are the other awards that we mentioned.

Speaker Change: Sure happy to do so.

Speaker Change: I think we expect.

Speaker Change: Say the book to Bill to end right around one.

Speaker Change: The readiness award that we talked about is kind of a binary.

Trevor Walsh: Activity Trevor meaning.

Speaker Change: When things get put on contract and that contract will ramp in the back half of 2025, so very modest.

Trevor Walsh: Bookings anticipated this year for that activity set.

Shawn: We've got a couple, you know, and we expect the teams to do a wonderful job. Jeremy mentioned our footprint around the globe in both IndoPACOM and the Middle East. I'd be remiss if I didn't highlight, again, in the quarter, we had over $500 million of on-contract growth. There are some other activities that we'll expect in the back half of the year to continue to do that. So, I do expect bookings to increase, specifically in Q3, and then, obviously, in Q4.

Speaker Change: The other things that Youll see added to backlog and grow are the other awards that we mentioned we've got a couple of when we expect the teams do a wonderful job Jeremy mentioned, our footprint around the globe and both Indo pay calm in the middle East.

Speaker Change: I'd be remiss, if I didn't highlight again in the quarter, we had over $500 million of on contract growth. There are some other activities that we will expect in the back half of the year to continue to do that it takes advantage of the of the distributed network. We have around the globe to meet our customers' needs and so we will continue to see those things.

Speaker Change: As well as some of.

Trevor Walsh: Got it. Terrific. Appreciate the help. Thanks for taking the questions.

Operator: Again, if you have a question, please press star, then 1. Our next question comes from Bert Subin with Stiefel. Please go ahead.

Bert Subin: Hey, good morning. Thanks for the question. Maybe just the... Hi, Bert. Hey, good morning.

Unnamed Speaker: Maybe just to kick off, I just want to, I guess, better understand some of the comments on the sequential progression and margin relative to what's been happening in the Middle East. You saw 29% growth in the quarter. I think that's, After 22% in the first quarter, and that's been a large part, I think, of what's been driving margin lower is just, you know, a higher mix of cost plus work in the region. Do you expect that to slow materially in the second half, and then that becomes margin accretive? Or do you expect that to continue to grow similarly, and it just gets aided by other contract action?

Bert Subin: Yeah, I think that the latter is exactly the way to think about it, right? I mean, the situations are, you know, are ever evolving, you know, as we watch the news and that sort of stuff. So it would be premature to try to predict any of those things.

Shawn: We're focused on what we can control in terms of outcomes that we deliver. And so, yeah, I think about it as, you know, maybe a little bit more muted on some of that 29% growth sequentially. But the contract actions, productivity improvements, Jeremy talked about, you know, moving into optimization. That's something that we're carrying forward to all of the programs and the cadence around the enterprise. And so I expect to drive improvements from those things here in the back half of the year.

Bert Subin: Got it, okay. And just to follow up on the Next Generation Readiness Contract, can you give us a little more color there? Is this the Warfighter Readiness Contract that was put out to bid, or is that an incremental opportunity? And then is this a multi-award contract, so we should be looking for you to win task orders under this as you get further into the process?

Shawn: Yeah, so we're not at liberty to name the contract right now, Bert. It is a single award that we're all, you know, kind of working through with the customer, and when we can talk more about it, we will. But we wanted to highlight it today because it is so notable, of course, and we're very excited to support the customer as we go forward.

Jeremy Wenzinger: And I think, you know, the other reason we reference it is that it is a perfect example of a program that would not have been available to the companies individually. But now, with the combination of the companies, it became, very addressable, and the wind shows that. And so that was the purpose of highlighting it today.

Bert Subin: Yeah, great. That's great, very large wins, so congratulations. And then just one more for you, Shawn.

Bert Subin: On the interest expense side of things, can you just help us understand that better? I think you said you did $52 million in cash interest in the first half, and you were guiding to $60 million in the second half, which would be like a 9% to 10% interest rate. But it sounds like based on where your term structure is, you're below that. What's going on on the interest side, and where should that settle out?

Shawn: Yeah, I think we're right around, you know, so the interest expense is right around 8-2 with the refinancing that we did, 8-2 to 8-3, you know, somewhere in there, Bert specifically. So, you know, I think the team's done a wonderful job continuing to restructure the debt and the financing, and you see a little bit in the assumptions that we changed about $5 million in interest expense for the total year.

Shawn: I think it's down to $111 for the total year. I'll also remind you there are some markup fees that are in there, which could be one of the deltas, well, is the delta to what you're seeing.

Bert Subin: Got it, that helps. And just one more question for you, Jeremy, you talked about going from sort of the integration to optimization phase, you know, appreciate you've sort of only been on board about two months at this point, but you know, maybe as you've gotten up to speed at v2x, you know, what do you see as maybe the number one area for improvement as you go into the next chapter?

Jeremy Wenzinger: I really do think that the opportunity for us is on the execution side. It is really giving programs at the local level the visibility into metrics and performance levers that they need to improve the overall execution at that level. You know, like I said, when you're going through integration, it's a lot more blocking and tackling. And when you move into optimization, it's more about visualizing data, allowing people to have seamless access to all the information required for execution.

Jeremy Wenzinger: And also, it flows the other way, too. We start to have a better understanding of everything that we're doing and look at capabilities that might travel from one location to another location. Because during integration, you're not thinking about that. You're thinking about, like I said, the blocking and tackling.

Jeremy Wenzinger: And now, information flows in both directions. The ability to give them everything they need at the local level to optimize execution. It allows us to see where we have differentiators that can be applied to the pipeline, and that's where the biggest opportunity for us, I think, as I move forward is looking at that pipeline, shaping that pipeline for the company we are today, not the companies that came together that were disparate. That's great. Thank you

Bert Subin: That's great. Thank you, and welcome.

Operator: This concludes our question and answer session. I would like to turn the conference back over to Mr. Jeremy Wenzinger for any closing remarks. Megan, thank you.

Jeremy Wenzinger: Megan, thank you for coordinating this today and then thank everybody for coming on the call today. I'm excited to be here. The welcome has been exceptionally warm, and I'm just excited to have the opportunity to be with this team and drive this company forward. Thank you for your questions today, and I look forward to working with you as we go forward.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: Okay.