Parsons Corporation
Q4 2020 Earnings Call Transcript

Published: 24 Feb 2021

[Operator:]

Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter 2020 Parsons Corporation Earnings Conference Call. Please be advised that today's conference may be recorded. I would now like to hand the conference over to your host today, Mr. David Spille, Vice President of Investor Relations. Please go ahead, sir.

[David Spille:]

Thank you. Good morning, and thank you for joining us today to discuss our fourth quarter and fiscal year 2020 financial results. Please note that we provided presentation slides on the Investor Relations section of our website.

[Charles Harrington:]

Thank you, Dave. Welcome to Parson's Fourth Quarter and Fiscal Year 2020 Earnings Call. 2020 will be a year none of us will soon forget between the global pandemic, political and social unrest, widespread, cyber attacks and an election that was unique to say the least. Our hearts go out to those who have suffered, and we all look forward to a brighter 2021. Parsons had a strong 2020 in spite of these events and ended the year with record adjusted EBITDA, record adjusted EBITDA margin, record cash flow, and a very strong balance sheet. We delivered adjusted EBITDA results within guidance, and we have now expanded margins by 180 basis points over the past two-years. We also exceeded the high end of our cash flow guidance. We were, however, not completely immune from the items mentioned in my opening. In terms of revenue, we were less than one percentage point below the low end of our 2020 guidance range. And we would have exceeded the high end of the range were it not for approximately $200 million of project-related COVID-19 headwinds. 60% of the COVID impacts were in our Federal Solutions segment, and the total COVID impact across both segments represented a 5% headwind to Parson's total revenues. We maintained our solid backlog, which stands at two times our 2020 annual revenues, and we reported a book-to-bill of 1.1 times for the full-year.

[Carey Smith:]

Thank you, Chuck. We had a strong 2020 despite experiencing COVID impacts on three large federal solutions contracts, which we expect to contribute to accelerating growth in the future. Most importantly, I'm proud of our employees continued focus on achieving mission success for our customers and delivering strong financial results with record adjusted EBITDA and cash flow. During the fourth quarter, we won significant contracts and posted our largest quarter book-to-bill ratio for critical infrastructure in two-years at 1.3 times. In our Federal Solutions segment, we had a 0.9 times book-to-bill ratio in a seasonally soft quarter. And we continue to win important other transaction agreement awards, completed the Braxton acquisition, which added key capabilities in the space domain. Notable contract wins in the fourth quarter included a 50/50 joint venture partnership on the $1.2 billion light rail transit project for Valley Line West in the city of Edmonton and Alberta, Canada. Globally, Parsons is a leader in light rail transit and advanced train control systems, serving over 80 rail and transit customers.

[George Ball:]

Thank you, Carey. Today, I will organize my remarks into the following five key areas

[Charles Harrington:]

Thanks, George. To summarize, 2020 was another successful year producing record results for adjusted EBITDA, margins and cash flow in spite of headwinds, primarily from COVID. We also continue to successfully deliver on our customers' missions and execute our growth strategy, while maintaining a strong balance sheet. As we look ahead, we expect 2021 to deliver modest revenue growth at the midpoint of our guidance range given continued impacts from COVID and pass-through revenue runoff. We also expect margins to incrementally expand and to continue to deliver strong free cash flow. We are excited about our future and confident of our broad and diversified portfolio, aligned with Biden administration's priorities for national defense, infrastructure and environmental initiatives, and our focus on cost and cash yield a robust balance sheet for continued organic and M&A investments. Thank you. And now we will open the line for questions.

[Operator:]

Our first question comes from Cai Von Rumohr with Cowen.

[Cai Von Rumohr:]

Yes. Thank you very much. So looking at your numbers, COVID impact was down in the fourth quarter from the third. So I assume it is going to be down in 2021. And as you know, 2021 revenue guide, I think, is below where most of the street is. So maybe you could give us some color on where is the COVID impact for both sectors assumed to be in 2021? What is the level of pass-throughs? And taking those two out, how come the numbers aren't stronger?

[Charles Harrington:]

Thank you, Cai. Yes, we expect our COVID impact in 2021 to be about $100 million. And we also expect our low-margin pass-through revenues to be approximately another $100 million. And that will be pretty much complete with the runoff of pass-through revenues. The third area we have is a series of contracts that are going through transition. Some are transitioning out of design phase and end up going to non-controlling interest. Others are going from the DevOps phase into implementation. So 2021 is a year of transition of a couple of large contracts that we expect to lead to much greater growth in 2022.

[Cai Von Rumohr:]

Great. Maybe you could give us some color on the contract transitions?

[Charles Harrington:]

Yes. I will give a summary, and then I will have Carey give a bit more detail. But oftentimes, when we finish design and we move into execution, we have a fair amount of revenue in the design phase that doesn't show up as revenue as we go into execution phase, it ends up as non-controlling interest. So although our profits go up and our margins go up, we don't necessarily see the revenue associated with that. And ditto, when we transitioned from a DevOps phase, there is a bit of a lag as you really start moving into the full implementation. Carey, would you like to give a little more color on that, please?

[Carey Smith:]

Sure. Just a couple of specific examples. We had a program that was called N.V., the Enhanced Visualization environment that transitioned to guide on. So basically, the development effort completed and it went into a sustainment mode. So that is lower revenues in the Federal segment. In the Critical Infrastructure segment, there is a few examples. We had a program in California to a remediation effort, and that program was canceled due to COVID. So that is completely gone away. And then we also had a few that we were completing the design effort on, specifically Federal Way and Foothill are two good examples of those.

[Cai Von Rumohr:]

Very good. Thanks so much. I will let someone else go.

[Charles Harrington:]

Thank you Cai.

[Operator:]

Our next question comes from Tobey Sommer with Truist Securities.

[Tobey Sommer:]

Thanks. I was wondering if you could comment on the company's opportunity within the DHS contract for IDIQ for $2 billion? Is it confined to detect wise, are there other skills and know-how that the company could compete for in task orders underneath that IDIQ?

[Charles Harrington:]

Thank you, Tobey. It is a pretty broad scope associated with testing and so forth associated with COVID. And I suppose it could be even broader health-related issues, but it is much broader than just the DetectWise product. Carey, you might go into a bit more detail on the scope of that contract.

[Carey Smith:]

Surely. Let me start. So DHS, there is 240,000 employees, and there is 14 component commands. So all of those have access to the availability of this contract ceiling. Plus it can also be used for other government agencies. The scope is focused on two functional categories. One is for managed testing services. So it is basically all encompassing, where you take the test, you process the test, you provide the test kit and you give the support services. The second category is modular diagnostic test kits and testing services. And in that case, we provide the test kits, we process the results, but we do not collect the sample. The DHS components can select whichever of those functional categories they desire.

[Tobey Sommer:]

Thanks. And could you just for a second, give us a little background on the historical frequency and magnitude of write-downs so that we can frame the one in the quarter? And maybe also comment on the proportion of Critical Infrastructure segment revenue where Parsons is in a subcontractor junior role and can be in this quarter sort of situation where you are informed of a change can occur?

[Charles Harrington:]

Thank you, Tobey. Yes, this is a rare occurrence for us. We have a good track record in these projects. So as you can imagine, we are all over this. The amount of revenues across Parsons that have some sort of construction orientation in them are around 10% of revenues. And in this case, in accordance with GAAP, obviously, this anticipates performance through project completion for this job. But this is not something that we have on a regular occurrence for certain.

[Tobey Sommer:]

Okay. And then I had just a numbers question. Could you give us a little color on what you expect for free cash flow in 2021 and within that, if you could comment on expectation for DSO, that would be helpful?

[Charles Harrington:]

Excellent. George, do you want to take the cash flow and DSO?

[George Ball:]

You know, our free cash flow would be essentially our operating cash flow, less CapEx at about 1% of revenue. From the standpoint of DSO, we would view ourselves going moderately lower in 2021.

[Tobey Sommer:]

Thank you very much.

[Charles Harrington:]

Thank you Toby.

[George Ball:]

Thank you Toby.

[Operator:]

Our next question comes from Gavin Parsons with Goldman Sachs.

[Gavin Parsons:]

Hey good morning. I appreciate the color on the transition year in response to Cai's question, but I kind of wanted to ask about the Federal Solutions and the opportunity pipeline and the backlog. Just given the backlog didn't really grow in 2020 if I strip out the Braxton acquisition. But it sounds like you are bidding on a ton of new work, you are going after bigger contracts, you have expanded your addressable market to M&A. So I mean, what are your expectations for bookings in 2021 that support an acceleration beyond and how much visibility do you actually have on contract growth that we may not see reflected in your backlog right now?

[Charles Harrington:]

Yes. Thank you, Gavin. So as we sit today, we at the end of Q4 have approximately $200 million in awarded, not booked. And we have eight single award $100 million contracts and 15 multiple-award contracts that we are awaiting adjudication at the end of Q4 2020. And so we have a very robust and solid pipeline. In fact, if we look throughout the year at our outstanding proposals awaiting adjudication, it continued to increase throughout the year and was about 6.7 billion at the end of Q4 2020 compared with 4.6 billion at the end of Q4 2019. So it is a very robust and growing pipeline in almost all of our markets. So Carey, do you want to provide a little more color to that?

[Carey Smith:]

Sure. Overall, we have a $37 billion pipeline. Federal is very strong. The items that Chuck mentioned, when you look at the awards greater than 100 million, out of the eight, five of those are in Federal. Out of the 15 multiple-award contracts, those are all in Federal. And then when you look in total, we have over 80 opportunities greater than 100 million that are in our pipeline. We also look at the amount of bids that we expect to submit in 2021. 2020, we submitted about 12.4 billion. 2021, we are looking at 24.9 billion.

[Gavin Parsons:]

Got it. That is helpful, thank you. And then on EBITDA margin guidance, the 9.2%, up 50 bps at the midpoint. Does that consider a 10% Federal Solutions margin and if not, what is your new time line for that and do you still think you can get the total company to 10% next year?

[Charles Harrington:]

Yes, thank you. The margin for Federal Solutions next year is below 10%. And again, part of that is the fact that we still have work that is being impacted by COVID. We remain committed to getting the unit to 10% through the methods we talked about previously, increasing our product sales, bidding on larger work and continuing with our M&A of companies that have materially greater than 10% margins.

[Gavin Parsons:]

Thanks.

[Operator:]

Our next question comes from Greg Konrad with Jefferies.

[Gregory Konrad:]

Good morning. A couple of follow-up questions from the ones that I already asked. But you mentioned COVID impact is a 100 million in 2021. I think it was close to 200 million in 2020. That is not incremental and maybe what are some of the programs that step-up and maybe get better and then do you fully expect to recapture that as we kind of move into 2022, assuming it is a more normalized environment?

[Charles Harrington:]

Yes. Thank you Greg, great question. As we look at the roughly $200 million of COVID impact we had in 2020, about $120 million of that hit our Federal Solutions business, predominantly on three large contracts where all or part of the expected work was deferred for future years. So it doesn't come back in one year, it pretty much just extends the length of our contract to the future. And those were the FAA, which has started to come back and hence, why we have a lesser impact in 2021. The Antarctica work, which we would not expect to remobilize until sometime in Q3 at the earliest and also our work on Kwajalein Island. In Critical Infrastructure, we were nominally $80 million, and that was predominantly a delay of vehicle inspection work. And again, those cars will all get inspected, so we expect that to get back to normal in 2021. And then we did have, as Carey mentioned, a neighborhood environmental remediation contract that was terminated. It was a low margin contract. So as we look to 2021, we expect that impact to be about 100 million as well as running off about $100 million of low-margin pass-through revenues, which should complete that aspect of our stated strategy. Does that answer your question, Greg?

[Gregory Konrad:]

Yes. That is very helpful. So I mean none of it goes away and it gets a little bit better, but you are not fully back in 2021?

[Charles Harrington:]

Correct.

[Gregory Konrad:]

And then the third part of the transition, you talked about design to execution revenue, and I think that there is probably a lot of programs or multiple pieces to that. But even just from a backlog perspective or an opportunity set, is there any numbers around that as we kind of think about these programs going into execution as kind of like the opportunity with this transition?

[Charles Harrington:]

Yes. So I guess the numbers that I would think of is, this is probably between $80 million and $100 million of work that is going through this transition phase. As we go into the sustainment phase as Carey talked about, especially some of our large cyber programs. And now go into mission execution and it is a dynamic cyber environment. So we would expect to see growth there as we move into full implementation and then obviously, the products and tools usually get enhanced as well. As we in the design phase of certain projects, now we go into that engineering support during construction, which is a multiyear support effort. And usually, those have a tail on them of at least two if not three or four years.

[Gregory Konrad:]

Thank you.

[Charles Harrington:]

You are welcome.

[Operator:]

Our next question comes from Joseph DeNardi with Stifel.

[Joseph DeNardi:]

Hi thanks good morning. And I appreciate the additional color you provided in the slides on the 2021 outlook. That was helpful. Chuck, can you just talk a little bit about what you are seeing maybe kind of from the business in terms of the change of administration, award flow changing priorities, that sort of things?

[Charles Harrington:]

Yes. Thank you Joe, with any new administration, there is always a little bit of delay as they get people into the slots and try to get senate confirmations. So we are not seeing anything unique. It is just the normal transition that goes on with a new administration. It is still early days, but we do see a lot of support around the items that are near and dear to our hearts of National Security. And I think the new Secretary of Defense and the folks that we see in the intelligence community and National Security are all folks that we know. And support the important efforts, especially around cyber, as Carey mentioned, with the solar winds attack. That is likely to lead to more expenditures in the Federal Government on cyber. As well as commitment to missile defense and the C5ISR and driving more efficiency and execution, which typically means more platforms and software. As well as their focus on infrastructure and environmental services. So those are all areas of strength for us. So we are not foreseeing any areas that we are focused on that we think are subject to any sort of defunding or curtailment. In fact, quite the opposite, we think it will remain or even potentially increase in some areas.

[Joshua Sullivan:]

Okay. That is helpful. And then can you just remind us on GBSD. Where you all stand with that and whether that is a contributor to stronger growth in 2022?

[Charles Harrington:]

Yes. So as you recall, GBSD, as we have said in previous calls, that is not in our guidance. And last week, after a series of discussions with the Air Force that have been going on, we were deemed that we did not have an OCI previously. In February, now the Air Force has come back and made a final determination that we indeed do have an OCI for the work that we are going to be doing for Northrop. So our work that we do for the Defense Department is a very sophisticated modeling and simulations and systems engineering work we have with a 10-year contract that compares missile systems efficiency. So with that, we stand committed to the customers we have, and we will be honoring that contract, and we will not be going forward on the GBSD team with Northrop Grumman.

[Joshua Sullivan:]

Okay. Thank you.

[Charles Harrington:]

You are welcome.

[Operator:]

Our next question comes from Matt Sharpe with Morgan Stanley.

[Matthew Sharpe:]

Chuck, George, Carey good morning and I hope everyone is well. Just on the revenue guidance, it looks like the company is up about, I think, 1% at the midpoint. Just wondering how much is currently in backlog versus, say, how much you need to actually go out and win this year to hit your numbers and then any view of growth at a segment level would be helpful?

[Charles Harrington:]

George that was addressed to you.

[George Ball:]

Okay. From the standpoint of the revenue component from backlog, it would be consistent with historic patterns. So our new wins would be nominally about 20%, that would be skewed towards the Critical Infrastructure segment, less so in Federal.

[Matthew Sharpe:]

Got it. And just one quick one on space following the Braxton deal. Carey, I know you mentioned spaces up and about 50% year-over-year. Can you maybe remind us where that puts the company on a percent basis overall and then maybe talk a little bit about growth expectations for the end market as well as growth expectations in revenue for Braxton, in particular in 2021?

[Carey Smith:]

Yes. So space has been our smallest market, but it is our fastest growing market going forward. We are quite excited about the capabilities this adds and again at 50% more revenue, specifically we are bringing in capabilities such as enterprise ground systems, which are standard interoperable that will support the Department of Defense as well as the intelligence community. We also have precision navigation timing capabilities. So if you think of GPS is getting jammed, we have the capability to provide a solution to work around that. So we think our space market is very robust. I would also highlight our small satellite launch and integration program, where we are two for two on launches, and we anticipate doing about two launches a year. Our next launch is going to be with a Landsat multi-manifest vehicle. And this time, we are actually going to have 18 small satellites that are being launched on that mission.

[Matthew Sharpe:]

Got it. And then any expectation for Braxton into 2021?

[Carey Smith:]

We are estimating about 131 million for Braxton in 2021.

[Matthew Sharpe:]

Okay. And then just on a pro forma, what is that in terms of growth for Braxton year-over-year?

[Carey Smith:]

George, do you have that?

[George Ball:]

Yes, Carey. I would say it is about between 10% to 15%.

[Matthew Sharpe:]

Got it. Thank you.

[Charles Harrington:]

And Matt, to put that in perspective, if you recall, we bought that obviously late in the year and the revenue to Parsons for Braxton last year was about $10 million.

[Matthew Sharpe:]

Got it thanks.

[Operator:]

Our next question comes from Josh Sullivan with The Benchmark Company.

[Joshua Sullivan:]

Hey good morning. Just one on COVID. Do you think you and the market are getting better at handling it? There is so many scenarios going forward. You gave some thoughts kind of on the margin impact near-term, but what are your thoughts on kind of the long-term impact to you in the market and just what has changed with COVID?

[Charles Harrington:]

Yes. Great question. As we look at 2021, more near-term, the two contracts that we have less control, I would say, over is restarting our work in Kwajalein Island, which is really controlled by the Marshall Island Government. And when they have confident, which may be around when people are vaccinated and kind of ditto in Antarctica. In terms of longer-term impacts of COVID, we really see it in two areas. One, we, like every other company have learned to do so much virtually, that I anticipate a one, reduced travel expenses going forward as we do more internal meetings and in some cases, with customers who actually prefer virtual meetings over in person. I mean, I think that will come back, but not come back to the way it was pre-COVID. And ditto with real estate, we have obviously learned how to do a lot more with less. And we anticipate substantial reductions in real estate footprint going forward as our leases come up for renewal, we will be renewing at significantly smaller footprints. We have learned to do better in that regard as well. And then lastly, I think with our customers, there seems to be a shift in mindset that would appear to be more permanent in nature just around how people interface with infrastructure, inter buildings, depart buildings, using more touch less technologies which actually leads to improved customer interface. So I think that there will be probably a lot more physical upgrades to especially mass transit systems, airport entry departure as well as large facilities, and there will also be software updates as well.

[Joshua Sullivan:]

Great. Thank you.

[Operator:]

Our next question comes from Ron Epstein with Bank of America.

[Ronald Epstein:]

Hey good morning guys. So we have seen a lot of services companies report this quarter, pretty much across the board, everybody has missed. And pretty much across the board, everybody is seeing the same thing. And it almost feels like the markets changed and nobody wants to admit it. Why is that thesis wrong?

[Charles Harrington:]

Yes. Well, I think it is interesting that we all probably are operating in different parts of the market, but there is no question COVID had a big impact. And for some of us, it was bigger than for others. I think what we will see is that as COVID diminishes and work restarts, things will come back. But when you look at the underlying drivers of our markets, infrastructure, we all know is outdated. We have, in cases of transportation, massive changes in terms of the number of electric vehicles not that far off autonomous vehicles. Infrastructure has to change. It can't just stay as it is. And the world is not becoming a safer place. So I think if you are in the area of defending our nation from cyber attacks, dealing with the changes of hypersonics in the missile field and dealing with a much more crowded nature of space, those are just drivers that aren't going to go away. I can't speak for other parts of the segment. Carey, I know you also have some great perceptions here. Why don't you jump in on this?

[Carey Smith:]

Sure. I would say at the end of the year, there was a little bit of slowdown, particularly in the intelligence community awards. We do expect that to pick back up in 2021. I also want to highlight the fact that we have not included a federal infrastructure bill in our forecast. And we think this presents tremendous upside with the Biden administration. And just to reiterate on Chuck's points on the environment, we are extremely well aligned to capitalize on that opportunity, particularly in areas like emerging contaminants. We also are involved in biofuels, and we do other work on clean energy.

[Ronald Epstein:]

Okay, good. Thank you.

[Charles Harrington:]

Thank you Ron.

[Operator:]

Our next question comes from Louie Dipalma with William Blair.

[Louie Dipalma:]

Chuck, George, Carey and David good morning. You have noted the optimism regarding President Biden and his plans to revise transportation infrastructure here in the U.S.. And you mentioned how you have relationships with over 80 transportation agencies, and you also have a pretty strong partnership with Neology for Tolling Tech. I was wondering, is there any way you can, at a high level, quantify how much of your revenue is related to transportation infrastructure and how do you expect a Biden stimulus/transportation policies to play out over the next several years and how would that like impact your revenue?

[Charles Harrington:]

Yes. Thank you, Louie, it is a great question. So if we look at our portfolio and infrastructure, the overwhelming majority of those revenues are associated with transportation. As a rough order of magnitude, I would say probably about three quarters. As we look at historical infrastructure bills, to put them in perspective going back to roughly 2000, the largest bill this nation has ever had, funded transportation infrastructure at roughly $61 billion per year on average. And if we look at what is being talked about in the Congress, and you assume somewhere like - if they produced - I mean, they are talking about numbers like $1.5 trillion. Even at half a trillion with a five-year build, that is obviously $100 billion a year, which would be a large uptick and at half a trillion, the largest transportation infrastructure bill ever approved. If they go to $1 trillion or $1.5 billion and maybe even extend to seven to 10-years, that does two things. One, it is a more money per year. But larger programs generally where the largest economic benefit to the U.S. comes from the large programs, those take five to seven-years to complete. So a longer program we get, the larger the projects and programs that are implemented, and that plays more into Parsons' strengths of large projects. In terms of our relationship with and Neology and Tolling and relationship with our iNET product, Carey, you might want to shed a little bit more color on that?

[Carey Smith:]

Sure. So we are partner with ne Neology. We have some big bids coming up this year, specifically in Georgia as well as New Jersey, New York area. So we are very excited about that and the opportunities that will bring. Relative to iNET, that is when the most globally deployed traffic management systems, and our sensor networks monitor and manage traffic conditions that reduce congestion travel times. This is going to play a lot into clean energy and sustainability going forward in the future. We recently launched an intelligent intersection, and that is getting a lot of opportunity, because with COVID, the traffic patterns are quite different. So cities are looking at how they change.

[Charles Harrington:]

You know Louie, one other thing I would mention to keep our eyes on is that as electric vehicles become a larger part of the fleet, the gas tax has less of an impact on funding infrastructure. So I would also keep our eyes open to what has been kicked around in Congress for a long time as vehicle miles traveled. And then the technology used to get that information and how that is actually charged to the citizens that use the infrastructure.

[Louie Dipalma:]

Great. And you are also involved with the New York City congestion tech deployment with TransCore, right. I would assume that project has been delayed as it relates to COVID. But over the long-term, do you expect that project to be resumed and further to be congestion tax deployment in other cities in the United States potentially with funding from an infrastructure bill?

[Charles Harrington:]

Yes, that is a really great question, and you are correct and it was delayed a bit. And as we know, London has been doing this for some time. I don't know really where every single city will fall out on this, but certainly this is the first one in the U.S., and it is very large. Carey, you might provide a little more color. I know you have been involved in that very deeply.

[Carey Smith:]

Yes. Thanks, Louie. As you mentioned, this is the first congestion pricing program in New York. It was slightly delayed, but it is starting to pick back up. And we have had interest expressed from many major American cities to implement programs going forward into next year.

[Louie Dipalma:]

Excellent. Thanks. And I look forward to hearing more on March 11th.

[Charles Harrington:]

Thank you Louie.

[Operator:]

Our next question comes from Cai Von Rumohr with Cowen.

[Cai Von Rumohr:]

Yes. Thank you. So you mentioned that the big COVID impact is really in Federal Solutions is on Kwajalein, . As I recall, aren't those all engineered systems?

[Charles Harrington:]

Yes.

[Cai Von Rumohr:]

Correct?

[Charles Harrington:]

Yes.

[Cai Von Rumohr:]

And therefore, as I look at your guide, which is a little disappointing for 2021, pretty much all of - I mean, the engineered - by my numbers, Engineered Systems could be down 100 million or so?

[Charles Harrington:]

Well, the impact probably a little bit less in that, but yes, you are in the ballpark.

[Carey Smith:]

Engineered Systems will be slightly up next year. The other three markets are up substantially, but Engineered Systems is slightly up.

[Charles Harrington:]

The COVID impact to that unit should be about 90 million.

[Cai Von Rumohr:]

Okay. The point I'm making is that where you are missing is really in kind of your more mundane work, not to say that is totally mundane. And where you are still getting the growth is in space, cyber, those kind of programs, is that correct next year?

[Charles Harrington:]

Yes. And C5ISR part of our -.

[Cai Von Rumohr:]

Right.

[Charles Harrington:]

Yes.

[Cai Von Rumohr:]

Okay. Thank you very much.

[Charles Harrington:]

Thank you Cai.

[Operator:]

Our next question comes from Joseph DeNardi with Stifel.

[Joseph DeNardi:]

Yes, thanks. Chuck, could you just talk about what you all intend to talk about at Investor Day, maybe preview that for us a bit? Thank you.

[Charles Harrington:]

You are looking for a teaser?

[Joseph DeNardi:]

Right.

[Charles Harrington:]

Yes. So I will give an overview of our strategy and what we expect to see over the next three to four years and where we are going. Carey will talk about how that is operationalized and how that goes down into our segments. We will also show a few videos of some of our newest technology. We will have a couple of roundtables with our market leaders with federal and critical infrastructure. We will have a Q&A with our market leaders to allow attendees to hear right from our market leads, how they view their markets and where they are going and what is exciting them. George will go over the financials and talk about our multiyear guidance that we will be talking about. And then we will wrap it all up with a closing Q&A.

[Joseph DeNardi:]

That is great. Thank you.

[Operator:]

That is all the time we have for questions. I would like to turn the call back to Dave Spille for closing remarks.

[David Spille:]

Thank you, and thanks for joining us this morning. If you have any questions, please don't hesitate to give me a call. We look forward to speaking with many of you over the coming weeks. And with that, we will end the call. Have a great day.

[Operator:]

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.