Q4 2024 V2X Inc Earnings Call

No conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions.

To ask question you.

Speaker Change: You May press Star then one on your Touchtone phone and to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Mr. Mike Smith, Vice President of Treasury Investor Relations and corporate development at <unk>. Please go ahead Sir.

Speaker Change: Thank you.

Speaker Change: Everyone welcome to the <unk> fourth quarter and full year 2024 earnings conference call.

Speaker Change: That today are Jeremy one figure.

Speaker Change: President and Chief Executive Officer.

Sean: And Sean morale senior Vice President and Chief Financial Officer.

Sean: Slides for today's presentation are available on the Investor Relations section of our website go <unk> Dot com.

Sean: Please turn to slide two.

Sean: During today's presentation management will be making forward looking statements pursuant to the safe Harbor provision of the federal Securities laws.

All participants will be in a listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions.

Sean: Please review our safe Harbor statements in our press release and presentation materials for a description of some of the factors that may cause actual results to differ materially from the results contemplated by these forward looking statements.

To ask question you.

Speaker Change: You May press Star then one on your Touchtone phone and to withdraw your question. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Mr. Mike Smith, Vice President of Treasury Investor Relations and corporate development at V to X. Please go ahead Sir.

Sean: The company assumes no obligation to update its forward looking statements.

Sean: In addition in todays remarks, we will refer to certain non-GAAP financial measures.

Speaker Change: Thank you.

Sean: Management believes such measures are useful to investors.

Speaker Change: Everyone welcome to the Beach fourth quarter and full year 2024 earnings conference call.

Sean: You can find a reconciliation of these measures to the most comparable measures calculated and presented in accordance with GAAP on our slide presentation and in our earnings release filed with the SEC.

Speaker Change: Today are Jeremy one cigar.

Speaker Change: President and Chief Executive Officer.

Speaker Change: Our morale senior Vice President and Chief Financial Officer.

Sean: Both of which are available on the Investor Relations section of our website.

Speaker Change: Slides for today's presentation are available on the Investor Relations section of our website go via <unk> Dot com.

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

Jeremy: Thank you, Mike and good afternoon, everyone.

Speaker Change: Please turn to slide two.

Jeremy: Thank you for joining us today before we get started I'd like to recognize the go over 16000 <unk> employees for all their contributions and in particular the strong performance during the fourth quarter that resulted in record quarterly revenue adjusted EBITDA and cash flow.

Speaker Change: During today's presentation management will be making forward looking statements pursuant to the safe Harbor provision of the federal Securities laws.

Speaker Change: Please review our safe Harbor statements in our press release and presentation materials for a description of some of the factors that may cause actual results to differ materially from the results contemplated by these forward looking statements.

Jeremy: We thank you for all that you've done and continued to do coordination and our company.

Speaker Change: The company assumes no obligation to update its forward looking statements.

Please turn to slide three.

Jeremy: In today's call I'm going to recap the fourth quarter and full year results and then discuss our positioning and alignment to national security priorities.

Speaker Change: In addition in todays remarks, we will refer to certain non-GAAP financial measures because management believes such measures are useful to investors.

Jeremy: Our momentum continued into the fourth quarter with revenue, increasing 11% year over year to $1 6 billion.

Speaker Change: You can find a reconciliation of these measures to the most comparable measures calculated and presented in accordance with GAAP on our slide presentation and our earnings release filed with the SEC.

Jeremy: This was driven by positive growth in all our geographies and noteworthy 27% increase in the Pacific region.

Speaker Change: Both of which are available on your Investor Relations section of our website.

Jeremy: For the full year revenue grew 9% to $4 3 billion.

Speaker Change: At this time I would now.

Speaker Change: I can turn the call over to Jeremy.

Jeremy: Seeding the top end of our guidance.

Jeremy: Thank you, Mike and good afternoon, everyone.

Jeremy: Adjusted EBITDA for the fourth quarter, and full year was $86 $2 million and $310 million, representing 5% and 6% year over year growth.

Thank you for joining us today before we get started I'd like to recognize the go over 16000 Btu ex employees for all their contributions and in particular the strong performance during the fourth quarter that resulted in record quarterly revenue adjusted EBITDA and <unk>.

Jeremy: Adjusted EPS for the fourth quarter and full year was $1 33 and $4 34.

Jeremy: Cash flow.

Jeremy: We thank you for all that you've done and continue to do for our nation and our company.

Jeremy: Representing 9% and 16% year over year growth.

Jeremy: Importantly, our focus on debt reduction and cash generation yielded impressive results with net debt improving $210 million year over year.

Jeremy: Please turn to slide three.

Jeremy: In today's call I'm going to recap the fourth quarter and full year results and then discuss our positioning and alignment to national security priorities.

Jeremy: This achievement Coates to a two six times net leverage ratio, which provides significant flexibility and optionality for <unk> in 2025 and beyond.

Jeremy: Our momentum continued into the fourth quarter with revenue, increasing 11% year over year to $1.16 billion.

Jeremy: This was driven by positive growth in all our geographies and noteworthy 27% increase in the Pacific region.

Jeremy: Total backlog at the end of the year was $12 5 billion reps.

Jeremy: Representing a one two times book to Bill ratio in the quarter.

For the full year revenue grew 9% to $4 $3 billion exceeding the top end of our guidance.

Jeremy: Our focus on growth is demonstrating results with <unk> securing contract wins at over $5 5 billion.

Jeremy: Adjusted EBITDA for the fourth quarter, and full year was $86 $2 million and $310 million, representing 5% and 6% year over year growth.

Jeremy: In 2024.

Jeremy: This was a record for the company and built an excellent foundation from which we can continue to drive revenue cash flow and value for our shareholders.

Jeremy: Adjusted EPS for the fourth quarter, and full year was $1 33, and $4.34, representing 9% and 16% year over year growth.

Roger Mason: Actually we are pleased to announce the arrival of Roger Mason, our chief growth Officer.

Roger Mason: Roger brings a wealth of experience and we will continue to build on our track record of growth.

Jeremy: Importantly, our focus on debt reduction and cash generation yielded impressive results with net debt improving $210 million year over year.

Roger Mason: This move positions <unk> exceptionally well for the years to come.

Roger Mason: In summary, 2024, it was a great year for <unk>, achieving several milestones and new records for the company.

Jeremy: This achievement Coates to a two six times net leverage ratio, which provides significant flexibility and optionality for <unk> in 2025 and beyond.

Roger Mason: Now I'd like to spend a few minutes and talk about our positioning and how <unk> helps customers increase efficiency reduce costs modernize capabilities improve readiness and strengthen national security.

Jeremy: Total backlog at the end of the year was $12 5 billion, representing a one two times book to bill ratio in the quarter.

Roger Mason: Fact that we are with our customer at every phase of the Michigan mission execution, primarily as a prime contractor gives us create intimacy and knowledge of what is happening and insight into evolving requirements.

Jeremy: Our focus on growth is demonstrating results would be to ask securing contract wins at over $5 $5 billion in 2024.

Roger Mason: The combination of our unique mission insight full lifecycle capabilities and eight year reputation as a trusted partner.

Jeremy: This was a record for the company.

Jeremy: Built an excellent foundation from which we can continue to drive revenue cash flow and value for shareholders.

Roger Mason: The differentiated and yielding results through recent wins and growth in key theaters.

Jeremy: Additionally, we are pleased to announce the arrival of Roger Mason, our chief growth Officer.

Roger Mason: For example in the Pacific Region <unk> is supporting increased mission requirements as DSD continues to identify China as a pacing challenge.

Jeremy: <unk> brings a wealth of experience and we will continue to build on our track record of growth.

Jeremy: This move positions <unk> exceptionally well for the years to come.

Roger Mason: Further investing to strengthen our deterrent.

Jeremy: In summary, 2024, it was a great year for <unk>, achieving several milestones and new records for the company.

Roger Mason: Our positioning in the region and our team's strong performance drove revenue growth of 24% in 2024.

Jeremy: Now I'd like to spend a few minutes and talk about our positioning and how <unk> helps customers increase efficiency reduce costs.

Roger Mason: We expect continued growth building on the requirement for readiness based on the administration's current priorities funding requests and demand signals.

Jeremy: Nice capabilities improve readiness and strengthen national security.

Jeremy: The fact that we are with our customer at every phase of the Michigan mission execution, primarily as a prime contractor gives us great intimacy and knowledge of what is happening and insight into evolving requirements.

Roger Mason: Turning to the U S. We continue to ramp up to $3 7 billion or fighter training readiness solutions program.

Roger Mason: This program is critical to National security readiness.

Roger Mason: As it ensures every soldier has the tools required to conduct realistic exercises and training.

Jeremy: The combination of our unique mission insight full lifecycle capabilities and eight year reputation as a trusted partner.

Roger Mason: The administration has stated improving <unk> or fighting and readiness our priorities. We believe <unk> is well positioned to meet these priorities.

Jeremy: The differentiated and yielding results, our recent wins and growth in key theaters.

Jeremy: For example, India the Pacific Region, <unk> is supporting increased mission requirements as Dear D continues to identify China as the pacing challenge.

Roger Mason: Additionally.

Roger Mason: In further support of readiness <unk> was recently awarded two contracts by the $270 million in aggregate to keep aircraft for the drug enforcement administration and the Federal Bureau of investigation fully machine ready and able to meet evolving operational demands.

Jeremy: Further investing to strengthen our deterrent.

Jeremy: Our positioning in the region and our team's strong performance.

Jeremy: Revenue growth of 24% in 2024.

Roger Mason: I would also like to call out our growing position in the Arctic and how under a contract valued up to $3 95 billion.

Jeremy: We expect continued growth building on the requirement for readiness based on the administration's current priorities funding requests and demand signals.

Roger Mason: With the U S space Force <unk> is supporting the Dod's strategic initiatives and interest in the region by delivering solutions.

Jeremy: Turning to the U S. We continue to ramp up to $3 $7 billion or fighter training readiness solutions program.

It will enable our customer to meet new challenges as the region is becoming a venue for strategic competition.

Jeremy: This program is critical to National security readiness.

Roger Mason: Finally, the situation in the Middle East continues to evolve.

Jeremy: As it ensures every soldier has the tools required to conduct realistic exercises and training.

Roger Mason: <unk> is uniquely positioned in the region with deep mission intimacy and operational expertise to continue delivering best of breed cost effective solutions that enable successful outcomes.

Jeremy: The administration has stated improving lethality war fighting and readiness our priorities. We believe <unk> is well positioned to meet these priorities.

Roger Mason: In summary, <unk> is positioned to key theaters with the ability to deliver a comprehensive end to end capabilities throughout the entire mission lifecycle.

Jeremy: Additionally, in further support of readiness V to X was recently awarded two contracts valued at $270 million in aggregate to keep aircraft for the drug enforcement administration and the Federal Bureau of investigation fully machine ready and able to meet evolving operational demands.

Roger Mason: This provides us with the opportunity to be part of strategic initiatives for the U S government as they protect the homeland and focus on the terms.

Roger Mason: Please turn to slide four.

Jeremy: I would also like to call out our growing position in the Arctic and how under a contract valued up to $3 $95 billion with the U S space Force feed two axis supporting the Dod's strategic initiatives and interest in the region by delivering solutions.

Roger Mason: Not only does <unk> have the global scale and capability to support National security priorities, we have a track record of enhancing outcomes and increasing value for our customers through innovation monetization and improved operational performance.

Jeremy: Will enable our customer to meet new challenges as the region is becoming a venue for strategic competition.

Roger Mason: Is squarely aligned with the focus area of the New administration and the D O D.

Roger Mason: Current challenges our customers face are very real with having to prepare for today, while planning for the threats of tomorrow, all while facing approximately $240 billion.

Jeremy: Finally, the situation in the Middle East continues to evolve.

Jeremy: <unk> is uniquely positioned in the region with deep mission intimacy and operational expertise to continue delivering best of breed cost effective solutions that enable successful outcomes.

Roger Mason: Have already deferred maintenance on its equipment and facilities. This.

Roger Mason: This deferred maintenance must be addressed in order to maintain readiness.

Jeremy: In summary, <unk> is positioned to key theaters with the ability to deliver a comprehensive end to end capabilities throughout the entire mission lifecycle.

We believe <unk> is extremely well positioned to help the dod's solve these challenges.

Roger Mason: For example, we are delivering innovative solutions and mission readiness technologies by leveraging our operational Knowhow and technology expertise.

Jeremy: This provides us with the opportunity to be part of strategic initiatives.

Jeremy: The U S government as they protect the homeland and focus on returns.

Roger Mason: This includes our smart warehouse solution, which can improve space utilization by 90% increased storage capacity by 77% and importantly yield a 69% reduction in operating costs.

Jeremy: Please turn to slide four.

Speaker Change: Not only does V to X have the global scale and capability to support National security priorities, we have a track record of enhancing outcomes and increasing value for our customers through innovation modernization and improved operational performance. This is squarely aligned with the focus area of the new administration and the D O D.

Roger Mason: The net benefit to the Doj is not just cost savings and footprint rationalization, but also significantly improving visibility of unaccounted inventory and assets and enhancing readiness.

Speaker Change: The current challenges our customers face are very real with having to prepare for today, while planning for the threats of tomorrow.

Roger Mason: When we think about the <unk> one two trillion of asset base spanning over 700000 facilities. We believe there is a tremendous opportunity for audit assurance and value creation for our customers.

Speaker Change: While facing approximately $240 billion.

Speaker Change: I've already deferred maintenance on its equipment and facilities. This.

Additionally, our platform modernization and rapid prototyping solutions are fielding new systems in months to bring upgraded technology platforms with significant cost and schedule benefits. This includes the very recent example, where <unk> is delivering rapid response prototyping production and Sustainment of counter.

Speaker Change: This deferred maintenance must be addressed in order to maintain readiness.

Speaker Change: We believe <unk> is extremely well positioned to help the dod's solve these challenges.

Speaker Change: For example, we are delivering innovative solutions and Michigan rating technologies by leveraging our operational know how and technology expertise.

Speaker Change: This includes our smart warehouse solution, which can improve space utilization by 90%.

Roger Mason: Demand aerial systems and air Defense solutions that solve complex and evolving battlefield threats.

Speaker Change: Increased storage capacity by 77% and importantly yield a 16, 9% reduction in operating costs.

Roger Mason: We are also seeing demand signals and opportunities to utilize the system and the Pacific region.

Roger Mason: Lastly, our utilization of technology predictive and preventive maintenance data analytics and continuous improvement have resulted in <unk> <unk> generating over $65 million of savings through optimized operational performance to the D. O D. On several cost plus programs. These deliberate and purposeful efforts provide cut.

Speaker Change: And that benefit to the D. O D. It's not just cost savings and footprint rationalization, but also significantly improving visibility of unaccounted inventory and assets and enhancing readiness.

Speaker Change: When we think about the <unk> one two trillion dollar asset base spanning over 700000 facilities. We believe there is a tremendous opportunity for audit assurance and value creation for our customers.

Roger Mason: <unk> with additional funding to support the requirements.

Maintaining the highest level the mission readiness and performance.

Speaker Change: Additionally, our platform modernization and rapid prototyping solutions are fielding new systems in months to bring upgraded technology platforms with significant cost and schedule benefits. This includes the very recent example, where V to X is delivering rapid response prototyping production and Sustainment of counter.

Roger Mason: This performance makes <unk>, a trusted partner of choice for missions of consequence.

Roger Mason: As you can see.

Roger Mason: <unk> shoulder to shoulder with our customers.

With a proven track record of bringing cost effective and value added solutions.

Roger Mason: Please turn to slide five.

Roger Mason: Later this year <unk> will celebrate its <unk> anniversary. This is a major milestone and an important trade of our business for 80 years <unk> has played a critical role supporting our customers' most important missions around the globe.

Speaker Change: Unmanned aerial systems and air Defense solutions that solve complex and evolving battlefield threats.

Speaker Change: We are also seeing demand signals and opportunities to utilize the system and the Pacific region.

Speaker Change: Lastly, our utilization of technology predictive and preventive maintenance data analytics and continuous improvement have resulted in V to X generating over $65 million of savings through optimized operational performance to the D. O D on several cost plus programs.

Roger Mason: This includes helping establish the distant early warning line radar network back into $19 50, which was located above the Arctic circle was critical to enhancing our readiness and national security during the Cold War.

Roger Mason: We have continued to grow since that time investing and expanding our capabilities. This has and is enabling <unk> to do more and offer technology based solutions that prevail on the battlefield and in real mission environments.

Speaker Change: Deliberate and purposeful efforts provide customers with additional funding to support their requirements, while maintaining the highest level of mission readiness and performance.

Speaker Change: This performance makes <unk>, a trusted partner of choice for missions of consequence.

Roger Mason: For example, today, we are leveraging our global expertise in spectrum engineering information technology, Cyber and network communications to deliver.

Speaker Change: As you can see b, two axis shoulder to shoulder with our customers.

Speaker Change: With a proven track record of bringing cost effective and value added solutions we.

Roger Mason: <unk> and secure mission ready communication solutions, and our remote regions of the Pacific.

Speaker Change: Turn to slide five.

Speaker Change: Later this year V to X will celebrate its eighth anniversary. This is a major milestone and an important trade of our business for 80 years <unk> has played a critical role supporting our customers' most important missions around the globe.

Roger Mason: This V to X technology, as assuring connectivity and readiness for our Warfighters.

Roger Mason: From the Arctic to Asia, and all around the globe <unk> comprehensive full lifecycle solutions and relatively fresh brand that is backed by a long legacy is allowing us to bring new technology innovation and forest model type solutions to our customers.

Speaker Change: This includes helping establish the distant early warning line radar network back in the 19 fifties, which was located above the Arctic circle. It was critical to enhancing our readiness and national security during the Cold War.

Roger Mason: Turning to the right hand side of the slide.

Quickly like to call out on our 2020 for revenue diversification across defense intelligence and commercial markets.

Speaker Change: We have continued to grow since that time investing and expanding our capabilities. This has and is enabling <unk> to do more and offer technology based solutions that prevail on the battlefield and real mission environments.

Roger Mason: We thought it is important to note that only 5% of our revenue is derived from federal civilian agencies.

Roger Mason: <unk> fared on border security drug enforcement and human space flight.

Speaker Change: For example, today, we are leveraging our global expertise in spectrum engineering information technology, Cyber and network communications to deliver a private and secure mission ready communication solution and a remote regions of Pacific.

Roger Mason: Moving to our mix of contracts.

Roger Mason: As you can see approximately 60% of our 2020 for revenue is generated from cost plus programs and 40% from fixed price.

Roger Mason: We continue to work with our customers to confirm appropriate contracts and programs to fixed price. We welcome. The recent emphasis on outcome based contracting and believe our institutional knowledge.

This V to X technology, as assuring connectivity and readiness for our Warfighters.

Speaker Change: The Arctic to Asia, and all around the globe <unk> comprehensive full lifecycle solutions and relatively fresh brand. That's backed by a long legacy is allowing us to bring new technologies innovation and for small applying solutions to our customers.

Roger Mason: It's a compelling opportunity for <unk> and our customers.

Roger Mason: Please turn to slide six.

Roger Mason: And the prior slides I'll discuss why we believe <unk> is well positioned for continued growth and performance.

Roger Mason: Our strategy is very clear it is to deliver full lifecycle capabilities in support of National security priorities.

Speaker Change: Turning to the right hand side of the slide.

Speaker Change: I'd quickly like to call out or <unk> or 'twenty 'twenty four revenue diversification across defense intelligence and commercial markets.

Roger Mason: That enhanced mission effectiveness extend asset utilization reduce cost and improve security and mission outcomes.

Speaker Change: We thought it is important to note that only 5% of our revenue is derived from federal civilian agencies.

Roger Mason: Our focus on readiness of the Warfighter via training equipping deploying supporting and modernizing we believe is well aligned to the current administration and future needs of the Dod.

Speaker Change: Primarily fared on border security drug enforcement and human space flight.

Speaker Change: Moving to our mix of contracts.

Speaker Change: As you can see approximately 60% of our 2020 for revenue is generated from cost plus programs and 40% from fixed price.

Roger Mason: When it comes to government efficiencies. We have described how <unk> is already executing and supporting these initiatives and we believe we can do more.

Speaker Change: We continue to work with our customers to confirm appropriate contracts and programs to fixed price. We welcome. The recent emphasis on outcome based contracting and believe our institutional knowledge.

Roger Mason: For example, <unk> keeps over 600 aircraft flying.

Roger Mason: Ready for their next mission.

Speaker Change: <unk> is a compelling opportunity for <unk> and our customers.

Roger Mason: Today the D. O D. Currently has over 13000 aircraft in its inventory excluding unmanned vehicles. We believe <unk> has the opportunity to gain additional market share by helping the Dod improve readiness and mission capable rates of the fleet, while creating additional cost savings through outsourcing.

Speaker Change: Please turn to slide six.

Speaker Change: And the prior slides I discuss why we believe <unk> is well positioned for continued growth and performance.

Speaker Change: Our strategy is very clear it is to deliver full lifecycle capabilities in support of National security priorities.

Speaker Change: Enhanced mission effectiveness extend asset utilization reduce cost and improve security and mission outcomes.

Roger Mason: Additionally, <unk> is utilizing technology and internally investing through R&D to modernize assets and platforms extending their lives and enabling our customers to close the gap on the $240 billion of deferred maintenance.

Speaker Change: Our focus on readiness of the Warfighter via training equipping deploying supporting and modernizing we believe is well aligned to.

Roger Mason: In terms of overall budgetary environment <unk> has demonstrated performance throughout various economic and political cycles. This is due to our strategic focus on supporting critical and enduring missions.

Speaker Change: The current administration and future needs of the D O D.

Speaker Change: When it comes to government efficiencies. We have described how V to X is already executing and supporting these initiatives and we believe we can do more.

Roger Mason: At the global level, the overall threat environment remains elevated with tension persisting if not escalating.

Speaker Change: For example, the two ex keeps over 1600 aircraft flying.

Roger Mason: This is what the Dod is focused on re establishment of determined.

Speaker Change: And ready for their next mission today the D. O D. Currently has over 13000 aircraft in its inventory excluding unmanned vehicles.

Roger Mason: The fact that we have presence and mission intimacy and Keith theaters and geographies that matter positions us exceptionally well to continue delivering end to end full lifecycle solutions to support evolving requirements.

Speaker Change: We believe <unk> has the opportunity to gain additional market share by helping the D. O D improve readiness and mission capable rates of the fleet, while creating additional cost savings through outsourcing.

Roger Mason: What we do is $24 $73 65 supporting missions of consequence around the globe is something we're extremely proud of and something that cannot be easily replicated.

Speaker Change: Additionally, two axes, utilizing technology and internally investing through R&D to modernize assets and platforms extending their lives and enabling our customers to close the gap on the $240 billion of deferred maintenance.

Roger Mason: To wrap up our 2024 results demonstrate the value of V to X brings to our customers our positioning in key theaters alignment to missions of high consequence.

Roger Mason: And our ability to execute on our commitments.

Speaker Change: In terms of overall budgetary environment <unk> has demonstrated performance throughout various economic and political cycles. This is due to our strategic focus on supporting critical and enduring missions.

Roger Mason: We are excited about the future the trend and leading indicators in our business remained strong with a $12 $5 billion backlog limited recompete and a robust pipeline of new opportunities.

Speaker Change: At the global level, the overall threat environment remains elevated retentions persisting if not escalating.

Roger Mason: We look forward to the opportunity <unk> has to increased our percentage of a large addressable market and bring more solutions to meet our customers' mission requirements.

Speaker Change: This is what the D. R. D is focused on re establishment determinists.

Speaker Change: The fact that we have presence and mission intimacy and Keith theaters and geographies that matter positions us exceptionally well to continue delivering end to end full lifecycle solutions to support evolving requirements.

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

Shaun: Thank you Jeremy and thanks, everyone for joining us this afternoon.

Roger Mason: Let's turn to slide seven.

We are pleased to announce an impressive close to the year with strong fourth quarter performance across all financial metrics, driven by double digit topline growth and exceptional cash generation.

Speaker Change: What we do is 24 seven 365 supporting missions of consequence around the globe, it's something we're extremely proud of and something that cannot be easily replicated.

Roger Mason: We are extremely proud of what the team accomplished in 2024, which resulted in vitro meeting or exceeding all financial commitments.

Speaker Change: To wrap up our 2024, our results demonstrate the value of V to X brings to our customers our positioning in key theaters alignment to missions of high consequence, and our ability to execute on our commitments.

Roger Mason: Revenue in 2024 increased 9% on a year over year basis to $4 $32 billion exceeding.

Speaker Change: We are excited about the future the trend and leading indicators in our business remained strong with a $12 $5 billion backlog limited recompete and a robust pipeline of new opportunities.

Roger Mason: Exceeding the top end of our guidance range by approximately $47 million.

Roger Mason: Reflects a continued demand of our services and solutions in both bond contract growth.

Speaker Change: We look forward to the opportunity would be to ask has to increase our percentage of a large addressable market and bring more solutions to meet our customers' mission requirements.

Roger Mason: And the pace of New awards.

Roger Mason: This is reflective of the capabilities.

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

Roger Mason: Range with notable New awards to include the five adversary program.

Shaun: Thank you Jeremy and thanks, everyone for joining us this afternoon.

Roger Mason: On missile Defense program.

Roger Mason: Production Award for the Gateway, Michigan Railroad.

Speaker Change: Are you starting to slide seven.

Speaker Change: We are pleased to announce an impressive close to the year with strong fourth quarter performance across all financial metrics.

Roger Mason: And Navy Pacific Communications Award of foreign military sales contract for aviation and training support.

Speaker Change: By double digit topline growth and exceptional cash generation.

Roger Mason: What was a sole source award to provide next generation Chem bio threat detection.

Speaker Change: We're extremely proud of what the team accomplished in 2024, which resulted in vitro meeting or exceeding all financial commitments.

Roger Mason: Adjusted EBITDA for the year was $310 million, increasing 6% year over year and delivering a margin of seven 2%.

Speaker Change: Revenue in 2024 increased 9% on a year over year basis to $4 $32 billion exceeding the top end of our guidance range by approximately $47 million.

Roger Mason: Interest expense for the year was $107 9 million.

Roger Mason: Cash interest expense was $105 million, improving $13 million or 11% year over year reflective of our proactive repricing activities debt paydown and cash flow generation.

Speaker Change: Reflects a continued demand of our services and solutions and both on contract growth.

Speaker Change: And the pace of New awards.

Speaker Change: This is reflective of the capabilities.

Roger Mason: Adjusted diluted EPS was $4 34 up 16% from the prior year based on approximately 32 million weighted average shares.

Speaker Change: Strange with notable New awards to include the five adversary program.

Speaker Change: Missile Defense program.

Speaker Change: Production award for the Gateway, Michigan router.

Roger Mason: Full year adjusted net cash provided by operating activities was $161 million.

Speaker Change: And Navy Pacific Communications Award, a foreign military sales contract for aviation and training support.

Roger Mason: This represents 116% adjusted net income conversion and strong cash generation capabilities of <unk>.

Speaker Change: What was a sole source award to provide next generation Chem bio threat detection.

Speaker Change: Adjusted EBITDA for the year was $310 million, increasing 6% year over year and delivering a margin of 7.2%.

Roger Mason: Please turn to slide eight where I'll discuss our fourth quarter results.

Roger Mason: Revenue for the quarter.

Roger Mason: With $1 6 billion.

Increasing 11% year over year and setting yet another record for the company.

Speaker Change: Interest expense for the year was 107 point $90 million.

Roger Mason: Adjusted EBITDA was $86 2 million also a record for the company with a margin of seven 4%.

Speaker Change: Cash interest expense was $100.5 million, improving $13 million or 11% year over year reflective of our proactive repricing activities debt pay down and cash flow generation.

Roger Mason: Interest expense for the quarter was $24 4 million.

Roger Mason: Cash interest expense was $22 7 million improving.

Speaker Change: Adjusted diluted EPS was $4.34 up 16% from the prior year based on approximately 32 million weighted average shares.

Roger Mason: Improving $3 6 million or 14% year over year.

Roger Mason: Adjusted diluted EPS was $1 33.

Roger Mason: Growing 9% on a year over year basis.

Speaker Change: Full year adjusted net cash provided by operating activities was $161 million.

Roger Mason: Adjusted net cash provided by operating activities was $168 million.

Speaker Change: This represents 116% adjusted net income conversion and strong cash generation capabilities of the two acts.

Roger Mason: Please turn to slide nine.

Roger Mason: Our commitment to achieve a net leverage ratio at or below three times was a company wide priority I'm pleased to report that we demonstrated excellent performance on this front delivering a net leverage ratio of two six times at the end of the fourth quarter.

Speaker Change: Please turn to slide eight where I'll discuss our fourth quarter results.

Speaker Change: Revenue for the quarter.

Speaker Change: It was one $6 billion, increasing 11% year over year and setting yet another record for the company.

Roger Mason: Our continued focus on cash generation and debt reduction resulted in a net debt improving $210 million year over year to $874 million.

Speaker Change: Adjusted EBITDA was $86 2 million also a record for the company with a margin of seven 4%.

Roger Mason: Our liquidity position is strong with a zero balance on our $500 million revolver at the end of the quarter.

Speaker Change: Interest expense for the quarter was $24 $4 million.

Speaker Change: Cash interest expense was $22 $7 million, improving $3 $6 million or 14% year over year.

Roger Mason: As can be seen in our financial results, our focus on enhancing the capital structure and the cost of our credit facilities combined with debt Paydown is improving cash flow and earnings.

Speaker Change: Adjusted diluted EPS was $1.33 growing 9% on a year over year basis.

Roger Mason: This strong performance allowed us to reprice, our $900 million first lien term loan.

Speaker Change: Adjusted net cash provided by operating activities was $168 million.

Roger Mason: Our repricing further improves our annual interest margin by 50 basis points, representing 135 basis points of savings achieved since October 2023.

Please turn to slide nine.

Speaker Change: Our commitment to achieve a net leverage ratio at or below three times was a companywide priority.

Roger Mason: This outcome is a testament to the strength of our business and will generate additional value in 2025 and beyond.

Speaker Change: Pleased to report that we demonstrated excellent performance on this front delivering a net leverage ratio of two six times at the end of the fourth quarter.

Roger Mason: As you can see on the chart. We have made substantial progress. This demonstrates the strong and reoccurring cash flow characteristics of the business. Furthermore, it underscores our commitment to thoughtful allocation of capital.

Speaker Change: Focus on cash generation and debt reduction resulted in a net debt improving $210 million year over year to $874 million.

Speaker Change: Our liquidity position is strong with us.

Roger Mason: Please turn to slide 10.

Speaker Change: Zero balance on our $500 million revolver at the end of the quarter.

Roger Mason: Book to Bill in the quarter was approximately one two times.

Speaker Change: As can be seen in our financial results, our focus on enhancing the capital structure and the cost of our credit facilities combined with debt Paydown is improving cash flow and earnings.

Roger Mason: Total backlog was $12 5 billion at quarter end, which represents approximately three times revenue coverage at the midpoint of our 2025 guidance.

Roger Mason: We believe this provides solid revenue visibility, especially when taking into account. The backlog only includes the initial $225 million of funding for the Warfighter training and readiness program.

Speaker Change: This strong performance allowed us to reprice, our $900 million first lien term loan.

Speaker Change: The repricing further improves our annual interest margin by 50 basis points, representing 135 basis points of savings achieved since October 2023.

Roger Mason: As a reminder, we expect to incrementally book activities associated with this contract.

Roger Mason: They are transitioned.

Speaker Change: This outcome is a testament to the strength of our business and will generate additional value in 2025 and beyond.

Roger Mason: Further enhancing revenue visibility at our 2025 mid point, we expect a modest 4% contribution from Recompete.

As you can see on the chart. We have made substantial progress this demonstrates the strong and reoccurring cash flow characteristics.

Roger Mason: Please turn to slide 11.

Roger Mason: The trends in our business remain positive and we believe our strategy to deliver a full lifecycle solutions that increase efficiency reduce costs modernize capabilities improve readiness and strengthen national security provide substantial opportunities for future growth and value creation.

Speaker Change: Furthermore, it underscores our commitment to thoughtful allocation of capital.

Speaker Change: Please turn to slide 10.

Speaker Change: Book to Bill in the quarter with approximately 1.2 times.

Speaker Change: Backlog was $12 $5 billion at quarter end, which represents approximately three times revenue coverage at the midpoint of our 2025 guidance.

Roger Mason: For 2025, we are establishing a guidance range that we would characterize is appropriately prudent.

Roger Mason: With that in 2025, we expect revenue to build on our very successful 2024 that exceeded the top end of our guidance.

Speaker Change: We believe this provides solid revenue visibility, especially when taking into account. The backlog only includes the initial $225 million of funding for the Warfighter training and readiness program.

Roger Mason: Revenue is expected to be four 3% up from five to $4 5 billion.

Speaker Change: As a reminder, we expect to incrementally book activities associated with this contract.

Roger Mason: Representing approximately 3% growth at the midpoint.

Roger Mason: Revenue in 2025 incorporates the previously disclosed completion of the KC 10, and <unk> programs, which contributed approximately $80 million to revenue in 2024 with mature margins.

Speaker Change: Are transitioned.

Further enhancing revenue visibility at our 2025 mid point, we expect a modest 4% contribution from re competes.

Speaker Change: Please turn to slide 11.

Speaker Change: The trends in our business remain positive and we believe our strategy to deliver full lifecycle solutions that increase efficiency reduce costs modernize capabilities improve readiness and strengthen national security provide substantial opportunities for future growth and value creation.

Adjusted EBITDA is estimated at $305 million to $320 million.

Roger Mason: Adjusted EBITDA contemplates the phase in of New awards, the completion of our previously discussed programs and modest internal investments.

Roger Mason: Adjusted diluted earnings per share guidance is $4 45.

Speaker Change: For 2020 five we are establishing a guidance range that we would characterize is appropriately prudent.

Roger Mason: To $4 85.

Roger Mason: Presenting 7% growth at the midpoint.

Speaker Change: With that in 2020 five we expect revenue to build on our very successful 2024 that exceeded the top end of our guidance.

Roger Mason: Regarding the cadence.

Roger Mason: We expect revenue and adjusted EBITDA to ramp sequentially throughout the year. This reflects the phase and have already announced new business.

Speaker Change: Revenue is expected to be four point briefs up from five to $4 $5 billion, representing approximately 3% growth at the midpoint.

Roger Mason: We expect adjusted net cash provided by operating activities to be $150 million to $170 million. We believe cash flow should be in line with our normal seasonal pattern with cash generation occurring in the second half of the year.

Speaker Change: Revenue within 2025 incorporates the previously disclosed completion of the KC 10, and T. One eight programs, which contributed approximately $80 million to revenue in 2024 with mature margins.

Roger Mason: Cash interest expense is expected to be $83 million with other expense of $12 million.

Speaker Change: Adjusted EBITDA is estimated at $305 million to $320 million adjust.

Roger Mason: Capital expenditures for the year are estimated at approximately $30 million.

Speaker Change: Adjusted EBITDA contemplates the phase in of New awards, the completion of our previously discussed programs and modest internal investments.

Roger Mason: Now we'd like to open the call for your questions operator.

Roger Mason: Thank you we will now begin the question and answer session.

Speaker Change: Adjusted diluted earnings per share guidance is $4.45 to $4.85, representing 7% growth at the midpoint.

Speaker Change: To ask a question you May Press Star then one on your Touchtone phone.

Speaker Change: If youre using a speakerphone please pick up your handset before pressing the keys.

Speaker Change: Regarding the cadence, we expect revenue and adjusted EBITDA to ramp sequentially throughout the year. This reflects the phase and have already announced new business.

Speaker Change: Anytime Youre question has been addressed and you would like to withdraw your question. Please press Star then two and at this time, we will pause momentarily to assemble our roster.

Speaker Change: We expect adjusted net cash provided by operating activities to be $150 million to $170 million. We believe cash flow should be in line with our normal seasonal pattern with cash generation occurring in the second half of the year.

Speaker Change: And the first question will come from Peter Arment with Baird. Please go ahead.

Peter Arment: Yes, good afternoon, Jeremy Sean Mike.

Speaker Change: Nice results.

Speaker Change: Jeremy I wanted to see if I could just double click on a comment that you made about kind of outcome based contracting.

Speaker Change: Cash interest expense is expected to be $83 million with other expense of $12 million.

Speaker Change: How you see this evolving with given your mix of cost plus contracting is all.

Speaker Change: Capital expenditures for the year are estimated at approximately $30 million.

Speaker Change: How quickly can you start to convert if you can convert that to any of that fixed price and more favorable and just maybe how you see this evolving because it seems like certainly you guys have the knowledge and the experience. If you wanted to flip it over to from a fixed price perspective.

Speaker Change: Now we'd like to open the call for your questions operator.

Speaker Change: Thank you we will now begin the question and answer session.

Speaker Change: To ask a question you May Press Star then one on your Touchtone phone.

Speaker Change: Yes, I mean, I think we have.

Speaker Change: If youre using a speakerphone please pick up your handset before pressing the keys.

Speaker Change: <unk> points from prior years, where we have successfully converted as far as the fixed price.

Speaker Change: If at any time. Your question has been addressed and you would like to withdraw. Your question. Please press Star then two and at this time, we'll pause momentarily to assemble our roster.

Speaker Change: And demonstrated additional savings for the customer and we continue to approach them.

Speaker Change: All the time on some of these mature programs that we think are great candidates to be flipped over to Fisher price and allows us to get more performance based contracting out of that and save them money.

Speaker Change: And the first question will come from Peter Arment with Baird. Please go ahead.

Is there.

Speaker Change: Yes, good afternoon, Jeremy Sean Mike.

Speaker Change: Is there a percentage of contracts that come up on an annual basis, where theres an opportunity to look at it or how should we think about just the quantity the opportunity here.

Speaker Change: Nice results.

Speaker Change: Hey, Jeremy I wanted to see if I could just double click on a comment that you made about kind of outcome based contracting and.

Speaker Change: But we continually put white papers in front of customers, we continually talk to them about the opportunity set to help them get to.

Speaker Change: Kind of how you see this evolving with you know given your mix of <unk>.

Speaker Change: Cost plus contracting is all how how quickly can you start to convert if you can convert that to any of it fixed price or more favorable and just maybe how you see this evolving because it seems like certainly you guys have the knowledge and the experience. If you. If you wanted to flip it over to from a fixed price perspective.

Speaker Change: For a more performance based contracting outcome for them. It will improve readiness I think it will save the customer money and.

Speaker Change: Crude overall efficiency for them as we look downstream. So again this is not something that's new it's just something that I think it aligns pretty well with this current administration to focus on outcomes.

Speaker Change: Yeah, I mean, I think we have.

Speaker Change: Proof points from prior years, where we have successfully converted.

Speaker Change: Yes for sure and then just a quick one on your <unk>.

Speaker Change: It's a fixed price and demonstrated additional savings for the customer and we continue to approach them.

Just your guidance.

Speaker Change: Sure.

Speaker Change: What's contemplated regarding impacts from the CR as the CR do you have baked in that it gets resolved or how are you thinking about that.

Speaker Change: All the time on some of these mature programs that we think are great candidates to be flipped over to fixed price and allow us to get more performance based contracting out of that and save them money.

Speaker Change: Sean.

Speaker Change: But I think if you look at the kind of work we do.

Speaker Change: Is there is there a percentage of contracts that come up on an annual basis, where theres an opportunity to look at it or how should we think about just the quantity the opportunity here.

Speaker Change: 40 of it is going to be pretty immune to the CR given that it is not new Newark. If these are mostly existing contracts that we are either taking market share or giving renewals on what we're doing already.

Speaker Change: Look we continually put.

Speaker Change: Papers in front of customers, we continually talk to them about the opportunity set to help them get to a more performance based contracting outcome for them. It will improve readiness I think it will save the customer money and improve overall efficiency for them as we look downstream. So again. This is not something that's new it's just something that I think.

Peter Arment: Exactly Peter I'd say.

Speaker Change: We have modest impacts as Jeremy said typically in a <unk> environment and so our guide contemplates I'll say business as usual.

Peter Arment: Obviously.

Peter Arment: Expect to see or to be resolved.

Peter Arment: And move forward with a number of things, but if we think about the opportunities that are in front of us.

Speaker Change: It aligns pretty well with this current administration to focus on outcomes.

Peter Arment: Most of the year is of course conversion of our backlog.

Speaker Change: Yes for sure and then just a quick one on on your just.

Peter Arment: With modest Recompete as we said in the prepared remarks, and new new business. So I think we feel good from a.

Speaker Change: Just your guidance.

Speaker Change: What's contemplated regarding impacts from the C or is the C or do you have baked in that it gets resolved or how are you thinking about that.

Peter Arment: Our range standpoint that we're aligned around.

Speaker Change: Shawn This is Bob but I think if you look at the kind of work, we do but majority of it is going to be pretty immune to the CR given that it is not new Newark. If these are mostly existing contracts that we are either taking market share or giving renewals on what we're doing already.

Roger Mason: Terrific and then just Shawn just can I get a clarification on that would be waters.

Speaker Change: Warfighter training readiness contract could you give that amount again, and how you think it phases in the back half of the year.

Speaker Change: Yeah, exactly so when we think year over year think of it as adding about $120 million to the topline.

Speaker Change: Yeah, exactly Peter I'd say.

Speaker Change: We have modest impacts as as Jeremy said typically in a <unk> environment and so are our guide contemplates I'll say business as usual we obviously.

Speaker Change: Dominantly in Q3, and Q4, so back half loaded as Theres a contracted transitions that we assume that is the bulk of the activities. We are executing task orders today they are fairly modest.

Speaker Change: We expect to see or to be resolved.

Speaker Change: And move forward with a number of things, but if we think about the opportunities that are in front of us.

Speaker Change: <unk>.

Speaker Change: Excellent news that we're seeing.

Speaker Change: The increase in that ops tempo of those task orders being put in front of us that were then bidding and responding to.

Speaker Change: Most of the year is of course conversion of our backlog.

Speaker Change: With modest Recompete, because as we said in the prepared remarks, and new new business. So I think we feel good from a.

Speaker Change: So like I said, its backend loaded its about $120 million or so incremental.

Speaker Change: To 2024.

Our range standpoint that we're aligned around.

Speaker Change: Terrific. Thanks, again, I'll jump back in queue nice results.

Speaker Change: Terrific and just John just can I get a clarification on that they would be waters.

Speaker Change: Thanks, David I appreciate it.

Speaker Change: The next question will come from Andre <unk> with <unk>. Please go ahead.

Speaker Change: The Warfighter training readiness contract could you give that amount again, and how you think it phases in the back half of the year.

Speaker Change: Hey, good afternoon, everyone and thanks for taking my question.

Speaker Change: Yeah, exactly so when we think year over year think of it as adding about $120 million to the topline predominantly in Q3 and Q4, so back half loaded as there's a contract transitions that we assume that is the bulk of the activities we are executing cask.

Speaker Change: Now if we can kind of zoom in on the Indo Pacific I know you mentioned, 27% growth in the region sales.

Speaker Change: And maybe just a point of clarification that doesn't include Indo pay comes specifically right that falls under U S sales and then I guess further on top of that I know you mentioned the space in the Philippines, but what are some of the other major moving pieces in the region that we should be looking out for.

Speaker Change: Today, they are fairly modest.

Speaker Change: Size the excellent news is that we're seeing.

Speaker Change: Yes, so just to clarify it does include into pay down.

Speaker Change: And that op tempo of those task orders being put in front of US that were then bidding and responding to so like I said, its backend loaded its about $120 million or so incremental.

Speaker Change: In terms of those those results based on the geography.

Speaker Change: Just as the middle East.

Speaker Change: In terms of how we report the middle East incorporates centcom. So also <unk> com and the activities that we support there are bucket.

Speaker Change: 2024.

Terrific. Thanks, again, I'll jump back in queue nice results.

Speaker Change: In Asia Pacific.

David: Thanks, David I appreciate it.

Speaker Change: To the other part of your question when we think about 2025.

Andre: The next question will come from Andre Madrid with BTG. Please go ahead.

Speaker Change: There are exercises that get undertaken every other year and so when we think about those things this year.

Andre Madrid: Hey, good afternoon, everyone and thanks for taking my question.

Andre Madrid: Now if we can kind of zoom in on the Indo Pacific I know you mentioned, 27% growth in the region sales.

Speaker Change: We expect a level of opportunity.

Andre Madrid: Maybe just a point of clarification that doesn't include Endo pay comes specifically right that falls under U S sales and then I guess further on top of that I know you mentioned the space in the Philippines, but what are some of the other major moving pieces in the region that we should be looking out for.

Speaker Change: I will admit.

Speaker Change: As these things come up we typically and so we'll see how those well see how those play out this year from a sequencing standpoint, obviously folks are off assessing the budgetary environment to funding that may be required for those things of that nature Andre.

Andre Madrid: Yes, so just to clarify it does include <unk> com.

Yeah, Andrew I look at that and like I do.

Andre Madrid: In terms of those you know those results based on the geography.

Speaker Change: Before I think presences everything and as I think this administration has said looking.

Andre Madrid: Just as the Middle East from a you know for in terms of how we report the middle East incorporates centcom. So so endo pay com and the activities that we support there are our bucket.

Speaker Change: Looking at the <unk> Com region in us having a.

Speaker Change: A solid footprint in that region and a contract vehicle that region readily accessible to them I think is quite weak.

Andre Madrid: In Asia Pacific.

Andre Madrid: To the other part of your question you know when we think about 2025.

Speaker Change: And a lot of confidence around the future for <unk> in that area.

Andre Madrid: There are exercises that get undertaken every other year and so when we think about those things. This year, we expect a level of opportunity.

Speaker Change: Got it got it very helpful and if I could squeeze in just one more.

Speaker Change: If you look at the implied.

Speaker Change: EBIT margin for the year, it's a step down over 24.

Speaker Change: Could you maybe just move us through the puts and takes there is all of it due to the loss of KC 10, and <unk> are the other factors included.

Andre Madrid: As these things come up we typically and so we'll see how those we'll see how those play out this year from a.

Speaker Change: Just trying to size that up and then really assess what what are the moving pieces there.

Andre Madrid: Sequencing standpoint, obviously folks are off assessing the budgetary environment to funding that may be required for those things of that nature Andre.

Speaker Change: Yes, yeah perfect. Thanks for the question.

Speaker Change: So predominantly those those headwinds from mature programs that that.

Andre Madrid: When I look at that and like I do.

Speaker Change: Have concluded because of those assets have been retired.

Andre Madrid: Before I think presence is everything and as I think this administration.

Speaker Change: Is what's contributing to it.

Speaker Change: In terms of the change in the new work that we listed off a number of things in the prepared remarks always start out at a lower margin.

Andre Madrid: Looking at the take home region and us having a.

Andre Madrid: A solid footprint in that region and contract vehicle in that region are readily accessible to them I think is why we were.

Speaker Change: Growth in the year is going to be back back half weighted and therefore I do expect margins in the second half to be higher than they are in the first half and we.

Andre Madrid: And a lot of confidence around the future for <unk> in that area.

Speaker Change: Hopefully build on those things.

Andre Madrid: Got it got it very helpful and if I, if I could squeeze in just one more I mean, you know if you look at the implied.

Speaker Change: As we go forward I will say some of the work doesn't mature extremely quickly from a margin contribution standpoint, right. Some of the work on platforms that we have may take some time and I would measure that in excess of a year not necessarily quarter to quarter on some of those programs and thats why as some of these platforms have retired.

EBITDA margin for the year, it's a step down over 24, I mean is could you maybe just move us through the puts and takes there is all of it due to the loss of KC 10, and C. One a or the other.

Andre Madrid: Factors included I'm, just trying to size that up and then really assess what what are the moving pieces there.

Speaker Change: Yeah.

Yeah, Yeah perfect. Thanks for the question so predominantly those those headwinds from mature programs that are that have concluded because of those assets have been retired.

Speaker Change: They are kind of at their peak.

Speaker Change: When when one of our executing that work and so we have to build that capability back up but that's.

Speaker Change: Exactly why you see the profile.

Speaker Change: I'd say, it's a great example performance based contracting.

Andre Madrid: Is what's contributing to it.

Andre Madrid: In terms of the change in the new work that we listed off a number of things in the prepared remarks always start out at a lower margin because of growth in the year is going to be back.

Speaker Change: And given the new contract awards. It takes some time to absorb that program figure out the operational side of it and then once they once they get comfortable and subtract.

Speaker Change: Some track record and do a wonderful job of optimizing readiness and supporting the customer and ensuring our overall understanding of the program.

Andre Madrid: Caf weighted and therefore, I do expect margins in the second half to be higher than they are in the first half and we should hopefully build on those things as we go forward I will say some of the work doesn't mature extremely quickly from a margin contribution standpoint, right. Some of the work on platforms that we have.

Speaker Change: First though is it takes a little bit of time, and so you think about shifting the curve or immature program to occur and we just several that we just rattled off.

Speaker Change: Yet there and very comfortable with that.

Andre Madrid: May take some time and I would measure that in excess of a year not necessarily quarter to quarter on some of those programs and that's why as some of these platforms have retired.

Speaker Change: In terms of execution.

Sean: That's extremely helpful color. Thank you so much I'll leave it there thanks, Jeremy Sean.

Speaker Change: Thanks, Andrew.

Andre Madrid: They are kind of at their peak.

Ken Herbert: The next question will come from Ken Herbert with RBC capital markets. Please go ahead.

Andre Madrid: When when when we're no longer executing that work and so we have to build that capability back up but that's that's exactly why you see the profile.

I would say, it's a great example performance based contracting.

Pardon me Mr. Herbert is your line muted.

Andre Madrid: Can you give us a new contract award it takes some time to absorb that program figure out the operational side of it and then once they once they get comfortable and subtract.

Ken Herbert: Yes, hi, thank you.

Ken Herbert: Good afternoon.

Ken Herbert: Jeremy Sean and Mike.

Speaker Change: Hey, I wanted to first ask if you look at.

Andre Madrid: Some track record they do a wonderful job of optimizing readiness and supporting the customer end.

Speaker Change: If you look at the 9% growth and outperformance of guidance in 2024.

Speaker Change: Is there a way maybe Jeremy you're trying to think about how much of that came from sort of new contract wins versus sort of on contract growth and maybe the tech insertion and I'm just trying to see if you can help us by quantifying sort of where the maybe really what drove the upside in 'twenty four as we think about maybe a springboard as we as we think about <unk>.

Andre Madrid: Ensuring our overall understanding of the program.

So it just takes a little bit of time, and so you can think about shifting the curve very mature programs through a program. We just several that we've just rattled off there.

Andre Madrid: We'll get there and very comfortable with that.

Andre Madrid: Good.

Andre Madrid: In terms of execution.

Speaker Change: <unk> ability of the 2025.

Speaker Change: That's extremely helpful color. Thank you so much I'll I'll I'll leave it there thanks, Jeremy Sean.

Ken Herbert: Hey, Ken.

Speaker Change: So it was predominantly on contract growth, let me give some color a runway.

Andre Madrid: Thanks, Andrew.

Ken Herbert: The next question will come from Ken Herbert with RBC capital markets. Please go ahead.

Speaker Change: We talked about a book to Bill that's about $1 two in the quarter.

Speaker Change: The bulk of those awards were on contract growth related and as we've talked previously that tends to turn into revenue.

Speaker Change: Pardon me Mr. Herbert is your line muted.

Ken Herbert: Yes, hi, thank you.

Speaker Change: More quickly and so that's what we saw as we as we exited 2024.

Speaker Change: Good afternoon.

Speaker Change: Jeremy Sean and Mike.

Speaker Change: Hey, I wanted to first ask if you look at.

Speaker Change: From a contribution and what accelerated some of that growth.

Speaker Change: If you look at the 9% growth and outperformance of guidance in 2024 is there a way maybe Jeremy you're trying to think about how much of that came from sort of new contract wins versus sort of on contract growth and maybe the tech insertion and I'm just trying to see if you can help us by quantifying sort of where the.

Speaker Change: I'd say you mentioned <unk> I think when I look at.

What we're doing in terms of maturing some of the technologies and where they are in terms of either early Delaware production or early development phase they.

Roger Mason: They will continue to mature and become ever increasing opportunities for us to move downstream and I know, it's one of the areas that Roger has focused on as the new chief growth officer wishes.

Really what drove the upside in 'twenty four as we think about maybe a springboard as we as we think about applicability into 2025.

Roger Mason: Starting differentiation into our offerings, because we have the opportunity to do that.

Speaker Change: Yeah.

Ken Herbert: Yeah, Hey, Ken.

Ken Herbert: So it was predominantly on contract growth, let me give some color a little bit. So we talked about a book to bill that's about one point to win in the quarter. The bulk of those awards were on contract growth related and as we've talked previously that tends to turn into revenue.

Roger Mason: Engineering organization.

Speaker Change: Okay very helpful. I mean, I can appreciate some of the some of the KC 10, and <unk> sort of headwinds, but is there any reason to think beyond maybe some risks around timing in terms of just just where we are with the CR in fiscal 'twenty five 'twenty six requests, but any reason to think we.

Ken Herbert: More quickly and so that's what we saw as we are as we exited 2024.

Speaker Change: Couldnt see our you would deliver on sort of similar on contract growth and 25, I mean, I'm not trying to get too far ahead of the obviously what looks like a sort of cautiously optimistic revenue guide, but it certainly seems like youll have some levers to pull as the budget situation stabilizes.

Ken Herbert: From a contribution and what what accelerated some of that growth.

Ken Herbert: I'd say you mentioned <unk> I think when I look at.

Ken Herbert: What we're doing in terms of maturing some of the technologies and where they are in terms of either early.

Ken Herbert: If production or early development phase they.

Speaker Change: So I'd say those can I think we did open up the range a little bit on the guidance on what we did a year ago.

They will continue to mature and become an ever increasing opportunities for us to move downstream and I know, it's one of the areas of Rogers focused on as the new Chief growth Officer, which is.

Speaker Change: To account for should that occur.

Speaker Change: We'll see how some things play out the teams do a wonderful job Jeremy mentioned conversion of things too.

Ken Herbert: Starting differentiation into our offerings.

Ken Herbert: We have the opportunity to do that with.

Speaker Change: Sharon organization.

Speaker Change: Performance based contracting our teams around the globe are consistently putting things in front of our customers to drive additional value to the customers.

Speaker Change: Okay very helpful. I mean, I can appreciate some of the some of the KC 10, and <unk> sort of headwinds, but is there any reason to think beyond maybe some risks around timing in terms of just just where we are with the CR in fiscal 'twenty five 'twenty six requests, but any reason to think we.

Speaker Change: Save money save.

Speaker Change: <unk>.

Speaker Change: Operational performance for both the customers as well as us and so those things when they occur they tend to occur pretty quickly. So we don't always have perfect visibility into them and they are dictated by a whole range of.

Speaker Change: Couldn't see or you would deliver on sort of similar on contract growth in 2005, I mean, I'm not trying to get too far ahead of the obviously what looks like a sort of cautiously optimistic revenue guide, but it certainly seems like youll have some levers to pull as the budget situation stabilizes.

Speaker Change: Of activities.

Speaker Change: That can arise so we tried to address it in the range that we gave for some variability that we may see will see its obviously very early.

Speaker Change: I would say yes.

Speaker Change: Yes, I'd say, that's kind of I think we did open up the range a little bit on the guide from what we did a year ago.

Speaker Change: Geographic footprint.

Speaker Change: I think the diversification in the portfolio around the globe.

Speaker Change: And the contracts, we have for our customer in terms of accessibility.

Speaker Change: To account for you know should that occur.

Speaker Change: We'll see how some things play out the teams do a wonderful job Jeremy mentioned conversion of things too.

Speaker Change: Very good position to deal with the ever changing environment.

Speaker Change: Okay.

Speaker Change: That's great and if I could just finally in the last few months or basically since the new administration or assist the election, maybe and then the new administration came in it may be early but have you seen any change in sort of a sense of urgency around say funding for projects and it will pay com or any indications that you might see that become.

Speaker Change: Performance based contracting our teams around the globe are consistently putting things in front of a customers to drive additional value to the customers.

Speaker Change: Save money and save them.

Speaker Change: Improved operational performance for both the customers as well as us and so you know those things when they occur they tend to occur pretty quickly. So we don't always have perfect visibility into them and they are dictated by a whole range of of.

Speaker Change: Early signs a higher priority for the new administration in terms of of addressing some of the some of the requirements that we see there.

Speaker Change: <unk> activities.

Speaker Change: I think one of what we're seeing is that we're aligned with their priorities in terms of where we're located.

That can arise so we tried to address it in the range that we gave for <unk>.

Speaker Change: We have not seen awards happen, which is great. So we haven't seen any slowdown in that we've mentioned in the.

Speaker Change: Variability that we may see will see its obviously very early.

Speaker Change: I would say.

Talk about geographic footprint.

Speaker Change: Script.

Speaker Change: Youre seeing that we are in terms of how we've tried to portray the business I am extremely excited about how we are aligned with their priorities, whether it's endo pay com whether it's in.

Speaker Change: I think the diversification from the portfolio around the globe.

Speaker Change: The contracts, we have for our customer in terms of accessibility puts us in a very good position to deal with the ever changing requirements.

Speaker Change: Up in the Arctic region, whether it's even in the U S. In terms of readiness in terms of the aircraft craft in terms of putting forward a deterrent strategy I think we're exceptionally well aligned with that and so.

Speaker Change: Yes.

That's great and if I could just finally in the last few months or basically since the new administration or it's just the election, maybe and then the new administration came in it may be early but have you seen any change in sort of a sense of urgency around say funding for projects and it will pay com or any indications that you might see that become.

Speaker Change: With regards to what we have in terms of the pipeline and the ability to prosecute the pipeline that is I believe very much aligned with their over our overall priorities.

Speaker Change: I think the very positive there Tobey is exactly where Germany.

Speaker Change: <unk>, which is the.

Speaker Change: You don't really signs a higher priority for the new administration in terms of of addressing some of the some of the requirements that we see there.

Speaker Change: Sure.

Speaker Change: The things that we expected to be awarded the funding activities that we've expected have been consistent in the early days.

Speaker Change: I think one of what we're seeing is that we're aligned with their priorities in terms of where we're located.

Speaker Change: This administration and asset start off the year.

Speaker Change: We haven't seen perturbations or changes from a I'll say a customer engagement.

Speaker Change: We have not seen awards happen, which is great. So we haven't seen any slowdown in that we've mentioned that Linda.

Speaker Change: Our ops tempo standpoint from from that vantage point.

Speaker Change: Script.

Speaker Change: Youre seeing that we are in terms of how we've tried to portray the business I'm extremely excited about how we are aligned with their priorities, whether it's endo paid com whether it's in <unk>.

Speaker Change: Perfect. Thanks, Sean Thanks, Jeremy.

Speaker Change: Thank you.

Speaker Change: The next question will come from Joe Gomes with Noble capital. Please go ahead.

Speaker Change: Up in the Arctic region, whether it's even in the U S. In terms of readiness in terms of the aircraft craft in terms of.

Joe Gomes: Good afternoon, and thanks for taking my questions.

Speaker Change: Putting forward a deterrent strategy I think we're exceptionally well aligned with that and so and then I look at you know with regards to what we have in terms of the pipeline and the ability to prosecute that pipeline that is I believe very much aligned with their over our overall priorities.

Speaker Change: Hey, Joe.

Speaker Change: To start out one of the things you discussed it a little bit here I think a little bit more in the past was foreign military sales that they had been gaining some traction.

Speaker Change: I think the very.

Speaker Change: Positive there Tobey is exactly where Germany.

Speaker Change: Just wondering if you give us kind of more of a update are you seeing anything new exciting that is.

Speaker Change: Which is the.

Speaker Change: Yeah.

Speaker Change: In the near term that.

Speaker Change: The things that we expected to be awarded the funding activities that we've expected have been consistent in the early days.

Speaker Change: Youre pretty positive about.

Speaker Change: Yes.

Speaker Change: Obviously they have.

Speaker Change: This administration and asset to start off the year.

Speaker Change: Our sales channel that does very well on the Fms front, we have a contract in the middle East Thats under contract and we do continue to see opportunities I will tell you. The Fms side does not face the same way that U S. Procurements do and so we are also excited about the opportunity we are very realistic about pace for which they actually.

So we haven't seen perturbations or changes from a I'll say a customer engagement, our ops tempo standpoint from from that vantage point.

Speaker Change: Perfect. Thanks, Sean Thanks, Jeremy.

Speaker Change: Thank you.

The next question will come from Joe Gomes with Noble capital. Please go ahead.

Speaker Change: Occur and so.

Speaker Change: And again it goes anywhere from you think about it is <unk>.

Joe Gomes: Good afternoon, and thanks for taking my questions.

Speaker Change: All the way back to the Middle East.

Speaker Change: We have opportunities we are pursuing those opportunities.

Speaker Change: Hey, Joe.

Speaker Change: To start out one of the things you.

Speaker Change: We're just cautious about the pacing of those awards.

Speaker Change: Discussed a little bit here, I think a little bit more in the past was foreign military sales and you know that they had been gaining some traction.

Speaker Change: It takes a little longer and a little more complicated.

Speaker Change: But very very comfortable with our strategic position.

Speaker Change: Okay, great for that and then I mean, you guys talk about your re competes.

Speaker Change: Just wondering if you can give us kind of more of a update are you seeing anything new exciting that is.

Speaker Change: Less than 5% or 4%.

Speaker Change: In the near term that you use.

Speaker Change: You were pretty positive about.

For this year.

Speaker Change: Are there any.

Speaker Change: Yes, I mean, we obviously have.

Speaker Change: Larger significant to you.

Speaker Change: Our sales channel that does very well on the Fms front, we have contracted under in the Middle East Thats under contract and we do continue to see opportunities I will tell you on the Fms side does not face the same way that U S. Procurements do and so we are also excited about the opportunity we are very realistic about pace for which they actually are.

Speaker Change: Oh, we compete that could be coming up on contracts. Obviously that you don't currently have that you would you would be.

Speaker Change: Very excited about getting in on that.

Speaker Change: Yes.

Speaker Change: I think thats the majority.

Speaker Change: I just want to refer to very little of what we do is what I would call a new start.

Speaker Change: Occur and so.

Speaker Change: And again it goes anywhere from you think about it is into Pacific all the way back to the Middle East we have opportunities we are pursuing this opportunity.

Speaker Change: I think when you start to anniversary.

Speaker Change: You would see what we're doing over in India.

Speaker Change: The capability that is solid following a need for a customer and that would fall sometimes as a new category, but again I think the vast majority of our pipeline is about us garner.

Speaker Change: We're just cautious about the pacing of those awards.

Speaker Change: Take a little longer than our low horsepower, but very very comfortable with our strategic position.

Roger Mason: Garnering additional market share for work that is already exist and yes, we have quite a few bids on the street that are substantial in size and we look at pipeline that Roger and his team are boring and again it reflects.

Speaker Change: Okay, great for that.

Speaker Change: I mean, you guys talked about your re competes.

Speaker Change: Less than 5% or 4% for this year.

Joe Gomes: A nice mix of both very large and very strategic opportunities for us and I think exactly to that point, Joe because of the.

Speaker Change: Are there any larger significant to you.

Speaker Change: Oh, recompete that could be coming up on contracts, obviously that you don't currently have that.

Joe Gomes: Because of the modest amount of Recompete that we have off it's allowing us to make sure that we're addressing and opening our aperture perhaps for additional addressable market.

Speaker Change: Are you would you would be very.

Speaker Change: Cited about getting in on that bidding.

Joe Gomes: During this period and the team is doing a great job on.

Speaker Change: Yes.

Speaker Change: I think that's the right choice before very little of what we do is what I would call a new start.

Joe Gomes: Of aligning those things and so that we can continue to build on that gain that momentum going out.

Joe Gomes: The out years.

Speaker Change: I think when you start to anniversary what you would see what we're doing over in India, where we're building a capability that is solid following a need for a customer and that would fall sometimes as a new category, but again I think the vast majority of our pipeline is about us.

Joe Gomes: Okay, and then one more if I may.

Joe Gomes: One of the data points historically have given on the pipeline as the amount of bids submitted in the next 12 months.

Joe Gomes: Pipeline I was wondering if you could give us what those data points are as of the end of the year.

Speaker Change: Garnering additional market share for work that is already exist and yes, we have quite a few bids on the street that are substantial in size and we look at pipeline that Roger and his team.

Joe Gomes: Yes so.

Speaker Change: As Jeremy announced Roger Rogers joined US he is going through a thorough pipeline review and and assessing it with his team to understand exactly where everything is so I think youll hear us I know youll hear us talk about it.

Speaker Change: And again it reflects.

Speaker Change: A nice mix of both very large and very strategic opportunities for us and I think exactly to that point, Joe because of the because of the modest amount of recompete that we have off it's allowing us to make sure that we're addressing and opening our aperture and perhaps for additional addressable market.

Joe Gomes: Calls Joe.

Joe Gomes: But I think at this time as the teams are progressing well.

We will refrain from quantifying anything other than I think Jeremy we've talked about increasing our bid volume as we go through the year kind of tied back to what we said.

Speaker Change: During this period and the team's doing a great job of aligning those things and so that we can continue to build on that gain that momentum going out into the out years.

Joe Gomes: Previously here, which is taking advantage of the opportunity that's in front of us and having a higher ops tempo from a bid standpoint going forward everything that I've seen so far for 25 has the velocity of bids going through <unk> higher than 2024 and that is the primary key metric for me which is.

Speaker Change: Okay, and then one more if I may.

Speaker Change: One of the data points that you historically have given on the pipeline as you know the amount of bids submitted in the next 12 months.

Speaker Change: Pipeline and I was wondering if you could give us what those data points are as of the end of the year.

Joe Gomes: We have a large addressable market were relatively small.

Joe Gomes: In that market and so the idea of areas is create differentiation and use or use our key positions that we have around the globe to put more opportunities.

Speaker Change: Yes so.

Speaker Change: As you know as Jeremy announced Roger Rogers joined Us he's going through a thorough pipeline review and and assessing it with his team to understand exactly where everything is so I think you'll hear us I know you'll hear us talk about it.

Joe Gomes: And on the battlefield.

Speaker Change: Okay, great. Thanks for that I'll get back in queue.

Joe Gomes: Future calls Joe.

Speaker Change: But I think at this time as the teams.

Trevor Walsh: The next question will come from Trevor Walsh with citizens JMP. Please go ahead.

Speaker Change: <unk> will will refrain from quantifying anything other than I think Jeremy we've talked about increasing our bid volume as we go through the year.

Trevor Walsh: Great. Thanks for taking the questions.

Trevor Walsh: Jeremy.

Speaker Change: Tied to back to what we said.

Trevor Walsh: Sean really.

Speaker Change: I appreciate the color that you gave at the beginning in the prepared remarks around the messaging lining with continuous administration.

Speaker Change: Previously here, which is taking advantage of the opportunity that's in front of us and having a higher ops tempo from a bid standpoint going forward everything that I've seen so far for 25 has lost bids going through <unk> higher than 2024.

Speaker Change: I guess approach with dose and the like I'm, just curious around the potential for 8% budget cuts kind of across the Doj and thats been thrown out there you guys have been doing this for a long time, just curious how you might see.

Speaker Change: Primary key metric for me, which is.

We have a large addressable market were relatively small.

Speaker Change: Whether it's 8% or some other number if theres just a kind of a broad based set of priorities to kind of cut does that basically it looked like a X percent haircut kind of across all programs is it kind of is it geography specific in certain programs that just get like how do we get to that sort of number in terms of how you guys are seeing maybe similar.

Speaker Change: That market and so the idea here is as create differentiation and use or use our key positions that we have around the globe to put more opportunities.

Speaker Change: And on the battlefield.

Speaker Change: Okay, great. Thanks for that I'll get back in queue.

Speaker Change: A environment play out just when <unk> kind of just generally trying to cut costs.

Trevor Walsh: The next question will come from Trevor Walsh with citizens JMP. Please go ahead.

Speaker Change: Yes.

We'd be speculating at best if I knew how they were going to do that and I think the entire industry would be speculating I will say the enduring nature of what we do in terms of mission support.

Trevor Walsh: Hi team thanks for taking the questions.

Speaker Change: Jeremy <unk>, Sean really.

Speaker Change: Appreciate the color that you gave at the beginning in the prepared remarks around the messaging lining with continuous and administrations.

Speaker Change: These are for enduring missions and our the overall strategy of the U S government, but again.

Speaker Change: I guess approach with dose and the like.

Speaker Change: Just curious around the potential for 8% budget cuts kind of across the Dod and its been thrown out there.

Speaker Change: I would I would be just speculating if I told you how they were going to go about doing this I think Trevor.

Speaker Change: The way that I think we look at it from a.

Speaker Change: I've been doing this for a long time, just just curious how you might see it or whether it was weather.

Speaker Change: Our risk standpoint, or whatever might be more aligned with what could be policy changes that could influence outcomes, either positively or negatively relative to where we sit today right as opposed to having gone through sequestration and <unk>.

Speaker Change: It's 8% or some other number if theres just a kind of broad based set of priorities to kind of cut does that basically looked like a X percent haircut, it's kind of across all programs is it kind of is it geography specific in certain programs that just get like how do we get to that sort of number in terms of how you guys are seeing maybe similar types of.

Speaker Change: And other stuff back a decade plus ago.

Speaker Change: As opposed to broad cups that impact a certain percentage of every program, they're probably more likely to be impacted by policy changes that the administration of SaaS, because thats, where they end up putting dollars.

Speaker Change: <unk> play out just when do you kind of just generally trying to cut cut costs.

Speaker Change: Yes.

Speaker Change: I would be speculating at best if I knew how they were going to do that and I think the entire industry would be speculating.

Speaker Change: As Jeremy said, we are an enduring missions places that have been long standing for the.

Speaker Change: I will say the enduring nature of what we do in terms of mission support.

Speaker Change: For this country in this nation.

Speaker Change: These are for enduring missions and our the overall strategy of the U S government, but again.

Speaker Change: As Jeremy said, it would be speculative to say where theyre going.

Speaker Change: Not seen in the type of work that we do where it's just.

Speaker Change: I would I would be just speculating if I told you how they were going to go about doing this I think Trevor.

Speaker Change: Take a 10% cut here.

Speaker Change: Got it that's super helpful.

Speaker Change: The way that I think we look at it from a.

Sean: Sean maybe again for you.

Sean: Congrats on the great work on getting the net leverage kind of below the target level.

Speaker Change: Our risk standpoint, or whatever might be more aligned with what could be policy changes that could influence outcomes, either positively or negatively relative to where we sit today right as opposed to having gone through sequestration and a N a.

Sean: Was.

Sean: Just curious to see I know, we had talked about before when you there is not necessarily going to be a new goalpost for where that metric might go but I know you did make comments previously that it would give you some optionality around kind of what you can do with capital any ideas or thoughts, especially just given the disease, new dynamics, New administration et cetera, about where you might deploy some of those resource.

Speaker Change: And other stuff back a decade plus ago.

Speaker Change: As opposed to broad cuts that impact a certain percentage of every program. They are probably more likely to be impacted by policy changes that the administration says because that's where they end up putting dollars.

Sean: <unk>, given you sort of hit that hit that goal.

Sean: Sure Yes.

Speaker Change: I think as Jeremy said, we are an enduring missions places that have been long standing for the for this country in this nation.

Sean: I want to make sure that I say again and thank the team for all of their efforts in achieving our objectives.

Sean: We are very focused on doing the things we said we're going to do.

Speaker Change: As Jeremy said it would be.

Speaker Change: They are going.

Sean: And the team did an exceptional job as we closed 24 now relative to okay. What's next which is which is the heart of your question.

Speaker Change: We have not seen that type of work that we do where it's just hey take a 10% cut here.

Got it that's super helpful.

Sean: I think Jeremy has said before it provides us with optionality.

Sean: Sean maybe again for you.

Sean: We're very happy with where we sit today.

Sean: Congrats on the great work on getting the net leverage kind of below the target level.

Sean: But I think there is opportunities and options that are open for us that by the way we have been continually sifting through its not like we put things on a shelf and we're looking at things just because we had a leverage ratio that may not have been conducive to those things. It's just part of the DNA and the stuff that the company.

Sean: Was just curious to see I know, we had talked about before when you they're not necessarily going to be a new goalpost for where that metric might go but I know you did make comments previously that it would give you some optionality around kind of what you can do with capital any ideas or thoughts, especially just given the disease, new dynamics, New administration et cetera.

Sean: Does regularly and we've established that appropriate cadence to be looking at at those opportunities. We don't have anything to announce of course, but I think in terms of.

Sean: Where you might deploy some of those resources, giving you sort of hit that hit that goal.

Sean: Looking at what the art of the possible is in areas that we think we can.

Sean: Sure Yes.

Sean: I wanted to make sure that I would say again and thank the team for all of their efforts in achieving our objectives.

Sean: Be meaningful contributors.

Is stuff that we'll pursue throughout 'twenty five.

Sean: We are very focused on doing the things we said we're going to do.

I think I've been very clear about this.

Sean: Now includes us looking at it from the lens of what's going to generate the most shareholder value.

Sean: And the team did an exceptional job as we closed 24 now relative to okay. What's next which is which is the heart of your question.

Sean: And that will continue to be our focus is those options that are reported to us are going to be solely square squarely on shareholder value.

Sean: I think Jeremy have said before it provides us with optionality.

Sean: We're very happy with where we sit today.

Sean: But I think there is opportunities and options that are open for us that by the way we have been continually.

Paul: Great. Thanks, Paul I'll get back in queue.

Speaker Change: Thanks Trevor.

Speaker Change: The next question will come from Mariana Perez Mora with Bank of America. Please go ahead.

Sean: <unk> through its not like we put things on a shelf and weren't looking at things just because we had a leverage ratio that may not have been conducive to those things. It's just part of the DNA and the stuff that the company does regularly and we've established that appropriate cadence to be looking at at those opportunities. We don't have anything to announce of course, but I think in terms of.

Speaker Change: Good afternoon, everyone. Thank you for taking the question.

Speaker Change: So my question is a follow up to these like reshuffling of defense spending as part of headset requirement training and readiness and Sustainment. All those activities are core and they are not up for revision.

Sean: Looking at what the art of the possible is in areas that we think we can.

Speaker Change: How much do you think you are like.

Speaker Change: Like operating it saves him Bahram and business as usual environment, how much is actually.

Sean: Be meaningful contributors.

Sean: Is it stuff that we'll pursue throughout 'twenty five.

Sean: I think I've been very clear about this.

Speaker Change: How.

Speaker Change: Soon we could see upside from training opportunities like the one you got head doubled your Trs recent contract last year.

Sean: Now includes us looking at it from the lens of what's going to generate the most shareholder value.

Sean: And that will continue to be our focus.

Sean: Options that are afforded to us we're going to be solely square squarely on shareholder value.

Speaker Change: Okay.

Speaker Change: The dummy Trs program has the opportunity to be the contract of choice for people that are looking to.

Speaker Change: Great. Thanks, Paul I'll get back in queue.

Trevor Walsh: Thanks Trevor.

Speaker Change: Okay.

Speaker Change: The next question will come from Mariana Perez Mora with Bank of America. Please go ahead.

Speaker Change: Performance readiness and training programs and so I think we've talked about the number of pdl's that where coffee deals or task orders that continue to flow to this contract vehicle because it has been for the customers that they want to have the opportunity to make it easy for customers to procure training resources and.

Speaker Change: Good afternoon, everyone. Thank you for taking the question.

Speaker Change: So my question is a follow up to this like reshuffling of defense spending as part of headsets requirement training and readiness and Sustainment. All those activities are core and they are now tougher relation how much do you think you are like to like operating it saves them borrow man.

Speaker Change: Those pages of.

Speaker Change: Task orders that we're looking at right now and the team is very busy and doing an exceptional job.

Speaker Change: Whether that.

Speaker Change: That's usually environment, how much is actually or how.

Speaker Change: Whether there's other training opportunities out there we'll continue to look at obviously, it's a core competency of ours and we will continue.

Speaker Change: Soon we could see upside from training opportunities like the one you got on like Pet doubled your Trs recent contract last year.

Speaker Change: To look at those opportunities as we build our pipeline I think the important to characterize that a little bit.

Speaker Change: Those things again, they tend to turn very quick when we think about on contract growth that this businesses is very skilled at doing we're turning some of those task orders and admittedly. They are modest in size today, but there are there is a volume of them and we turn those around to the customer from a pricing and all that good sort of stuff.

Speaker Change: Yes.

Speaker Change: W. Trs program has the opportunity to be the contract of choice for people that are looking to.

Speaker Change: Yes.

Speaker Change: Performance readiness and training programs and so I think we've talked about the number of T cells that were call pvs or task orders that continue to flow to this contract vehicle because it has been for the customers that they want to have the opportunity to make it easy for customers to procure training resources.

Speaker Change: We turn those around in days.

Speaker Change: Team does that.

Speaker Change: It's just second nature to the team and so they can be put on contract.

Speaker Change: To your question is around where when could we see upside the bulk of these activities as I said will transition in the second half of the year put some things happen earlier, if they could we've not seen that yet but.

Speaker Change: Theres pages of.

Speaker Change: Task orders that we're looking at right now and the team is very busy and doing an exceptional job.

Speaker Change: That vehicles that mechanics, everything is in place such that it is a frictionless transaction between us and our customer to execute.

Speaker Change: Whether that.

Speaker Change: Whether there is other training opportunities out there we'll continue to look at obviously, it's a core competency of ours and we will continue.

Speaker Change: To look at those opportunities as we build our pipeline I think the important thing to characterize it a little bit.

Speaker Change: <unk>.

Speaker Change: On the mission.

Speaker Change: <unk> team has done an exceptional job standing program getting it to that point that Sean just said, where it is the engine that it just allows the customer to come to US with these task orders and the team does a great job turning these task orders around in a very timely basis.

Speaker Change: Those things again, they tend to turn very quick when we think about on contract growth that this businesses is very skilled at doing we're turning some of those task orders and admittedly. They are modest in size today, but there are there is a volume of them and we turn those around to the customer from a pricing and all that good sort of stuff.

Speaker Change: Great. Thank you that's that's great color and then what are other key metrics in your U S growth.

Speaker Change: We turn those around in days.

Speaker Change: Alright fair milestones, we should be looking at.

Speaker Change: Team does to that.

Speaker Change: Yes, I think it's the ramp of a lot of the things that we've talked about right. So we the <unk>.

Speaker Change: It's just second nature to the team and so they can be put on contract.

Speaker Change: To your question is around where when could we see upside the bulk of these activities as I said will transition in the second half of the year could some things happen earlier, if they could not seen that yet but.

Speaker Change: Five award that we got last year has completed its transition it is often executing and obviously we have regular touch points with all of our programs to ensure that they are executing successfully the water's activity, we talked about we mentioned in <unk>.

Speaker Change: The vehicles that mechanics, everything is in place such that it is a frictionless transaction between us and our customer.

Speaker Change: Award that we got we've said previously that that kind of win from an L. Rip phase.

Speaker Change: To execute.

Speaker Change: Two a full rate production. So we're ensuring that the supply base and everybody is ready for our production capabilities for those things that again, just part of our DNA in terms of how we execute.

Speaker Change: On the mission.

Speaker Change: The team has done an exceptional job standing up programs getting it to that point that Sean just said, where it is of engine that it just allows the customer to come to US with these task orders and the team does a great job turning these task orders around in a very timely basis.

Speaker Change: On programs.

Speaker Change: Not one particular thing that we put more overweight in another to be honest with you Marianna it's.

Speaker Change: Great. Thank you that's that's great color and then what are other key metrics in your U S growth.

Speaker Change: Stuff that we do on a weekly basis to support our programs and delivering to the customers.

Speaker Change: Or are there milestones we should be looking at.

Speaker Change: Great. Thank you so much for the color.

Speaker Change: Yes, I think it's the ramp of a lot of the things that we've talked about right. So we the F. Five award that we got last year has completed its transition. It is often executing and obviously we have regular touch points with all of our programs to ensure that they are executing successfully the water's activity we.

Speaker Change: Sure.

Jeremy: This concludes our question and answer session I would like to turn the conference back over to Mr. Jeremy worst singer for any closing remarks. Please go ahead Sir.

Jeremy: Thank you for the time today and I appreciate everybody that.

Jeremy: <unk> listened and I did wanted to echo what Sean said I want to thank the team and the employees of <unk>.

Speaker Change: <unk> talked about we mentioned that GM or award that we got we've said previously that that kind of went from an L. Rip phase.

Jeremy: They delivered.

Peter Arment: Amendments Peter commitments.

Jeremy: I can't be any more proud of them and I am.

Speaker Change: Two a full rate production. So we're ensuring that the supply base and everybody is ready for production capabilities for those things that again, just part of our DNA in terms of how we execute.

Peter Arment: So very hard.

Peter Arment: Looking forward in 2025, so thank you and have a good day.

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

Speaker Change: And programs.

Speaker Change: Not one particular thing that we put more overweight in another to be honest with you Marianna. It's it's it's stuff that we do on a weekly basis to support our programs and delivering to the customers.

Speaker Change: Great. Thank you so much for the color.

Speaker Change: Sure.

This concludes our question and answer session I would like to turn the conference back over to Mr. Jeremy worst singer for any closing remarks. Please go ahead Sir.

Speaker Change: Thank you for the time today and I appreciate everybody that.

Speaker Change: Listen than I do.

Speaker Change: Wanted to Echo, what Sean said I want to thank the team and the employees of <unk>.

Speaker Change: They delivered.

Amendments Peter commitments.

Speaker Change: I can't be any more proud of them and it works very very hard.

Speaker Change: Looking forward to 2025 and thank you for that.

Speaker Change: Good day.

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

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Speaker Change: Yeah.

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