KBR - Earnings call 3 2023

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Operator

Hello, all and welcome to KBR Inc.'s 3rd Quarter 2023 Earnings Conference Call. My name is Lydia, and I will be your operator today. [Operator Instructions] It's my pleasure to now hand you over to your host, Jamie DuBray, VP of Investor Relations, to begin. Please go ahead.

Jamie DuBray

Thank you. to Quarter welcome Earnings Year and Call. morning, KBR's Fiscal Xrd XXXX Good

I Stuart performance Chief views your Chief President risks website statements, discussion includes A well believes me on open of on highlights our Bradie, This measure Joining discussion involve are and quarter included and and to at reconciliation to the nearest forward-looking forward-looking questions. call these Today's will Sopp, non-GAAP as results discussed measures on presentation. outlined then Vice from actual also includes the now in Stuart for our website. available potential useful of non-GAAP call as Executive kbr.com. This Executive President recent GAAP could is metrics Officer. the and to uncertainties to the as events Financial available and over financial the Investors the their Mark company to provide Mark is as reflecting our will X. at be KBR's about cause end XX-K Slide earnings Stuart. presentation section future these differ and turn of These our significantly on that from the investors. statements most that impact measures matters Form earnings Officer;

Stuart Bradie

Thank you, Jamie, and a warm welcome presentation. to our QX earnings

start let's X. Slide So on

to a looking sustainability view and high-level space attempts you the earth of is give both moment This security. environment and space in today for engaged to itself. KBR Our in Zero us Harm back space from how is

enhance environmental our programs on happening is have we the understanding from of of the planet. which space couple on what generated starting So of a slide, left data our is to on highlighted

and analysis to predict and we algorithms, highlighted satellites like validate real-time trending The gives debris middle, learning proprietary et development, [indiscernible] deforestation, to using estimates cetera. machine this events. digitally advanced our technology tracked have AI In space Stallion. proprietary the things Iron land of future And and

to today. the DoD, of U.S. our Iron acquired two Stallion allies addition have using In and are

we years space, and working on two reset And chunk, objective in focused where space which is key many economy reservicing looking ice minimize developing to done space, the in I deploying at vertical this exciting military differentiated stuff. the at playing and sustain Earth and say being know-how highlighted and assets added on work and right, of programs Silicon knowledge the exploration. NASA pretty existing moon on on has the engaged to have This and the next-generation for in is across civil with KBR water technologies, human Valley, recycling to center NASA monitoring cool and satellites Ames, for going KBR for to the both a it's have

every that amazing do really matter things people Our day.

at quick So while Slide on look business X to the light. a being that overall and business house

front, this On have people digits by year. head increased count double we time the last low since

this From areas is of solutions we're XXX sustained I world and across think middle present of in innovation where And AI global in first in completed to branding. managed of indicator our the growth a and develop teams an Services a the and business. the Technology sustainability, perspective, hackathon. innovating in competition volunteers digitalization good the

solutions together final say forward. were coming in myself have submissions, terrific, reviewed to be have ideas they and and later leadership month. will winners be this a certainly X number driven final The of regional and X absolutely we'll The to all compete their I taking the the

truly really So value-add process. I think a

fostering connecting of are creating people added silos very world I of very, foundries also there greater in So home across a successful. the benefit nontraditional is more think, collaboration a and working that's, where from and listed risk

commitment once within Forbes again the the world's And on front, as lastly, of top year, to and recognition, for be have the companies one in underscores gender think, were notified employees, XXXX. forging consecutive forward really an proud women all been recognized empowering Xrd the for equality our this people week in fostering to inclusive and in are by for we workplace. we I we And environment last the that our

to HSSE. on Now

a themselves best-in-class. helps our continue speak And to recruitment people around they're really statistics UN and unparalleled Zero And and sustainability with really think sustainability with world. really our activities it's partners our very is the in, Our also development to internally, program. health, security looking and you differentiator to them. clear for environments broader clients driven in and values impress culture working a of and a I And goals. we with This know, Harm with safety, as example commitment the obviously the around it's a the truly those ESG after key themselves and link

KBR So one doing going what goals we thought quarter is opposite present we forward. would of each these

So water we sanitation. with today started and

flavor, Dabur the you give the for ]. of both a world combat number Kosovo [ military. run to to a supply water U.K. in We and across the wastewater from portable today runs just KBR sites So

heavily Ocean river modernizations educate et that of authorities we've before. the cetera, supporting various upgrades, schools and And are water oceans in cleanups plastics program, engaged across the communities organized engage One seen and expansions, cities, our local on We and infrastructure. beach Australia to the water with we and through major wastewater in

I and So this just for gives a we as did across different KBR. into you lens space think sustainability,

quarter, bottom momentum a growth to continue business the 'XX we continued reflecting left, as On bookings strong really, to beyond. really and on

volatility, is at strongly at of allow group X% growth, our pace people to up high the level, was around customers, at the performance critical our a at us the again, for XXX%. X% us, would people for quarter financials of is Cash And all was contract ahead as I'm finish but this many, you say there ultimately, all the a on for and level that a world, organic. in from conversions really I'll As really retailers expect, organic many companies world for with delivering stepped area XX%, a in line focus and our shareholders. sure under And margins it work rates interest year a of again. terrific out this once over our standout XX%. with revenue to higher the to

of of principle of million clear That's our convertible as cash on demonstration of the Mark and November, the And one upside remaining the in of also that matured. activities event in in to the cover a retired other deployment Xst positive cash, belief all will course, of in which And provide it month cash promised first to linked is $XXX subsequent the helped note we KBR. moment, as a optionality. of value

Now on to X. Slide

markets efficient, book-to-bill continually decarbonized this this, STS become Ongoing we've more owners but remain in recognize X.Xx discussed was security trilemma The in think including highlighted I using science, buoyant to and assets adds we to across also of as energy data-enabled X way And previously. aging area. continue trailing across need energy activity see a as tools. the only particularly instability, variety quarter. they high of technologies to awards and of XX-month a the digital we've levels geopolitical engineering multiple

effectively Tracking and transport existing and that announced you networks. a been tracking first back and hydrogen project it infrastructure gas had taking it into is awarded Firstly, utilize as liquid Korea. Ammonium This can facilities, we with Commercial ammonia world's so Daesan and in we the that

ammonia very deal for that a significantly is to and of this future committed to KBR that production, effect deliver of as real know, allows a Now high have the on and a demand importantly increasing a course, countries enabler you share. have for big we hydrogen it commitment market can where

digitalization. our the services and in LNG we with is decarbonization market, to we best-in-class aligned we IP innovative risk energy the synergy for fantastic existing This sustainable profile were the reimbursable solutions. EET U.K. It blue gas the and contract decarbonizing Hydrogen modifications In a security a combines engaged the example believe leading in EPCm project U.K.'s of X project are project. in the all where our engineering the fully is U.K., Australia hydrogen Woodside. fuel, for Train finally, largest And with across deeply transition is awarded of in technology Pluto services industrial

Now on to Government.

Government market recent energy defense, the emerging Okus on real spot lead in with operationalizing growing in high-end can multi-government significance is these discussed budgets U.S. and global a like as collaboration, differentiator, infrastructure. challenges. in in lease for critical our technologies areas focus as robust critical the our critical possible, emphasizes as elevate quickly consulting is GS we in sweet be side, for areas role in look the in of we've the value International GS services we a beyond critical that We believe on business a addressing with which priorities and as which play Ongoing ], of these to continues KBR, segment times. and world So a engaged as many greater [ transition events

quarter was segment this GS XX was X.Xx. the bringing up Book-to-bill our excellent. whole trailing back in for X.Xx months loan to

we & As highlighted a so all our strong number in XXXX. whole In billion quarter, are these and bookings the Space a segment over International you total, last the positioned business. into well $X.X for are may GS quarter move recall, multiyear. had of is Science as We've awards well awards importantly,

takeaways, FEEDs, for good million coming Very with all recompete several OMES additive XXXX basis, increasing with be in With both growth Science year. should the Space exciting. dollars see rate were value and IMO a on it's & easy in that full to hundred these awards QX and by as being through and run a

nice nice the the more unfortunately, awards Intel say several contract Defense pickup too also real cadence vehicle customers & can't we've these. to it key And about NRO. quarter, the in had the in Intel, much side wins see we the was MAC under awards Similarly, in some with in quarter. IAC But like

technology real services KBR's Science Space, 'XX. Intel into we Management growth to for good the similar Program. Risk move & Defense secured are cloud From platform mission for shape has and Federal a a So & proprietary perspective, business prioritized as been our

are of just prioritized AI in for this investment space. continue platforms and both open called KBR, Vaault® example platform Investments is in with to new with customers. only the Our government X one area the of opportunities commercial is one and we making

also provide generated register to down slightly orders Europe, that make to a specifically And a opportunity businesses, point of head as in on slide, task KBR on final X% growth flourish into multiyear will after organic new new months few 'XX. the awarded has we QX. been although The while sustainment shown in not

the finished We options high since also backlog to quarter and transformation. record our

I indicative KBR. being still is all hasn't evaluated. as not across great of transform on quite of the demand October, as said in leadership Homesafe, to readiness And program think early momentum yet and really forget, started

civilians and the to As families. assumed approach and improve of is thus, significant from this careful I'm moving to delivering number to to program. outcome. targets via of jointly we recall the And are are members, TRANSCOM adopting effort we their committed of margins, fully you with a this XXXX And aware, during news you'll one with service initial sure that are the due moves X. experience ourselves this HomeSafe calculated day no modest year this a and and our mainly ensure ramp-up the priority

in and Although start XXXX still year. unclear to results look February it like. that ramp hasn't full started today, remains it But when ramp be we year yet, should guidance what late we There more and progressively. next clarity in do will moves expect 'XX report QX

we are and shape be started interestingly, the the of and nature do Now should ways get level. moves markets the in that that one the EBITDA at will said, assumes there in overperformance our in, with we good for always were the targets. from HomeSafe meet given we've now If we And XXXX. the plan the uniqueness businesses an perspective EBITDA fill many we STS that design to real of in 'XX, group

many quarters, needs EBITDA pathways earnings company KBR and with for multiple the the As a be for growth, corporation. real to focus we is said on consistently to whole

work right up verticals from 'XX playing strong performing So into keep and to EBITDA, exciting and secured to the momentum knowledge 'XX market increasingly in economy out delivering KBR cash head close in move continues and have short, pace well-funded keep as and beyond. on we and to the truly

who Mark, and With own to the Mark? of color, with up works numbers. add the course, that, I over his will now hand back will

Mark Sopp

Stuart, and I'll everyone. Slide start Page or X. right. Thank you, X on All hello,

pleased certainly ability deliver the to So we're Xrd in strong and performance well-rounded our quarter. with team's

Stuart these as X%, deliver QX. expected. Adjusted of on we across organic, levels the and required margins, said, before, healthy this the all is at same you in a production As case execution all to and of were was wins up our Focused balance across recent up operations see margins EBITDA ramp on-contract constant the program revenues and both reflecting of continues I up on to growth segments. that said be

people this a on big constantly amazing. the deliver KBR, who So out shout to front across

Adjusted favorable EPS grew by driven below-the-line the EBITDA to compared $X.XX growth items to and share, XX% per year. last net

year-over-year generate check. to expected, expense as which team strong in reduction debt and also cash pulled the flow was higher interest While costs together financing really kept actions,

effective a did resolution guidance R&D up our have bit, While us a we an tax line tax are rates which trending in keep of tax also rate with credit, did as well. favorable

adjusted approximately reflecting I cash million, and conversion again really mitigating have good. we environment that QX job Quite challenging about superb the a year-to-date flow of folks op tax strong in of mentioned, interest a million. XXX%. was So and ratio $XXX did our treasury flow today. at more with tax $XX just cash

improved team This is and requirements. across normative cash this running continue Free plus $XXX Consolidated will by two board. million, due you, year, focus specific the project DSOs remind to increased the the twice rate flow the on CapEx to be X is about course. I'll days year-to-date

picture big for results. the that's enterprise So the

for to on Now XX segment performance. Slide

seeing with growth profit STS, we tremendous and margins. are Starting

$XX case. EBITDA XX% was and under Sustainable In EBITDA cash segment said with that working Top across of addition, and margin cash XX% was generating line We that shown with well balanced XXX%. entire million. remains here, capital. just wins negative free Services. excellent not This before, growth a technology while as conversion STS is flow flow over totaling year-to-date the well almost

world, Slide As on is of we're we are improving adoption seeing That's the X, evident do. and and and increasing proprietary solutions sustainability in remarks high service technology back Stuart's all what for we demand the our our offerings position clients. around

organic the is Government, in growth business consistent units. across X to which QX, X% Over was pretty

and prospects X.Xx. actions QX and growth strong At opportunity in almost cash With Slide for flow As On adjusted $XXX year-to-date Stuart bookings deploying QX, at M&A, million costs. ratio start related and million of the the the effective improved capital we kept mentioned, XXXX. repatriation forward warrants, year actually That's the steady after to settlement million convert and provide dividends saying we of some $XXX XX modest $XXX leverage year-to-date from end of $XXX strong legacy into as on the growth cash moving EBITDA on with over really head on and our interest again, buybacks, XX%. something adjusted million of matters. legal higher

of keeping accomplishment all ratio going leverage an quite the So steady after through that.

with attendant little messaging the the of the later. resolve maturity of a year, Consistent mature notes was the which November beginning and capital warrants, that our priority expire to is X the convertible our at and

cash and As cash which from with $XXX Stuart hand the just revolver notes we X, million. was said, yesterday, a funded million flow. debt accumulated did of November free on That in payment of culminated $XX cash retire of million $XXX

in on seek to terms capital window we goes, forward open an to or capacity see what there's months XX do depend early so the so. On be warrants, so Slide settlement so. X we'll Doing that negotiated, but have how the certainly will the for next to As for guidance. can of those

world our how EPS a current in that's flow long-term in are tracking due seasonality update the outlook the targets. through the quarter, XXXX happening numbers having EBITDA we're fewer KBR, margins, our to of pace, to year. is embodied growth, things rest here's productive like production for suggest quick we While are excellent days QX, of and QX toward we last into raised factor With including guide With the and ahead on guide, that. that from to sticking there cash including in holidays all the

we things For EBITDA are of pace flow. well our on under on ahead for cash control, and pace

interest by is to of implications all and longer the For the EPS, expected higher rates much with for that EPS more by primarily influenced which the harder HomeSafe that. is of due have $X.XX and to ramp-up now to external factors, achieve XXXX we uncertainty looking stay on

our see Stuart baseline, same. For meet our to pace to for as the is our or on factors, our more offerings than capture And Government of original pace. ahead STS is said, and controllable stronger we is EBITDA. strong as ability well our the markets end targeted demand

continuing see momentum We beyond. and this through XXXX

turn me short the for I'll it back to it wrap that's So for report. it pretty Stuart quarter, to up.

Stuart Bradie

Thanks, moments Mark. just but Mark Great said job. -- emphasize And to what few ago. a

including cash Our associated well EBITDA pace, ahead trajectory is of conversions.

our that, control, the me target in summarize and to really control that are achieve. headwinds external 'XX to the EPS However, beyond factors of due let our With are more key there $X.XX going now making difficult takeaways well. are

Firstly, to economy stakeholders deliver for delivery, our with consistent people-centric and customers, the great into another knowledge growth our resilient, organic and shareholders other our we so through culture, continue quarter. key increasingly values-driven

organic growth businesses absolutely terrific elements, was across the Mark key and et interest cetera. cash, a strong management Continued across of management, all DSO is as group reduction, repatriation said, many takeaway. Cash

cash the as and strong the were gives what we again, especially we management on deployment principal GS paid in key we have We said U.S. in promised, forward. optionality once group, capital the going Bookings convert us do. Responsible leverage across quarter. cash That's strong takeaway. another in would doing

XXXX targeted bookings and transition quarter-on-quarter. as energy trilemma the see work Now growth to a of across growth performance, year growth year. STS inbuilt that continues we'll with happening light and outstanding a energy consequence margin recompete deliver organic you into latter as with in the win in next delivery half,

and we'll should into is So at HomeSafe year-end and was growth know than slower moves by strong expected likely much up momentum more takeaway the earnings. XXXX. in here but a key continued XXXX, organic bookings ramp originally underpin pace

expect from in HomeSafe thus EBITDA overperform However, we to shortfall STS XXXX. mitigating any do

multiple our for and of the for pathways will result questions. operating success. there to key the This diversified up Thank multiple EBITDA Thank economy. a across takeaway it you. operator, back is the differentiated, model within are the now here again hand to open knowledge And resilient business I Finally, is who listening. that will you global verticals call

Operator

comes Sommer Instructions] from of Tobey [Operator first question Our today Truist.

Jasper Bibb

This is any Tobey. share of ramp bit us would I here. additional the uncertainty on be Bibb Jasper you that color quite on on still there's with appreciate HomeSafe could But for appreciated. can a

volume the I do an run to And think point? moves be the there for the first expectation there XXXX? that 'XX? over underlying in total you in of the taking XQ still point think revenue expectation some you're with at happening it's going of share Is to full hit that rate at feasible

Stuart Bradie

sure trying The upfront rate the that message. happening to is what's mean and then. feeling we're about it's across much a get to distinct I in But and to punches. it transparent facts still understand, uncertainty run world, next possible 'XX. timing remarks. the as Is to in by happen can today, That's is. we we rate and through because clear And it somewhere Yes, any No. But at try it's moment our and the that's bare clarity full have on there's not say more as that to months control. But it few 'XX. guaranteed? ramp prepared you 'XX that to answer truth around we Yes. so be can what said, Could like, that's you until going not yes, in still very our by what's it to full get just of run February, not we're quite the is, of be get the is in Is way we'll the and difficult we just, the just totally get I'm

Jasper Bibb

think target to the makes you rates. That harder it hit And of said to No. sense. going be EPS because was interest $X.XX I higher definitely then

if plan? initial from that, Just you specific? tie could there EPS rates Like curious more the could headwind is those that's an that relative higher you frame versus your headwind to

Stuart Bradie

difference course, we've X on is $X.XX the may I as or months, just rate, which the of think of that's about. X in HomeSafe, there's talked embedded ramp-up has yield now the the in may months, be would the mass over longer, back would the are the mean, particular, I Yes. looking terms happened the interest And you yield then the went rates they curves, not moment, factors, X, curves edge, means, say achievable down, are last at for interest back a course, higher that coming were down, on of which borrow they it's accretive coming I stock. And were say. the I money is buy to few if and

free flow, if obviously, so And you're cash it's accretive. using

If on rates. we're And trying your sheet, that the to it's you're message decision. Mark, really difficult balance think interest that's the putting the more give I and around any... a of higher implications that

Mark Sopp

buyback flow buybacks. compelling an it's opportunity original kind that suggested, of the a of think so M&A, Stuart the accretion for long forth. to real our terrific is as return lever think that's and I had just stock not to clarify free over these absent our perspective. for But use assumption intend and in to a lower days Yes, term up from We all was targets. That we When rates shareholders. an we push our cash

the that but than the rate, since that in the or HomeSafe part said the which won't FX want all bit other strong little our move so and things accretion A rates were relative well as as as planned. tax derivation of the headwind not we operationally, uncertain. really we which of remarks, is interest was biggest targets, those timing, stronger dramatic on assume. But to to prepared And deliver

Operator

today question comes Subin next Bert of Stifel. Our from

Bert Subin

can be continue think I There last be $XXX where there start double-digit mean, 'XX, that I level overperform you're a over time. growth then. growing Maybe lumpiness just we in 'XX? right about could us out, give think in about, about you we you is trajectory to I should target? think by that new elevated you any some supposed situation sort that to of think we now, mentioned the said expected as then grow And for a How Is 'XX to call, as to the STS Stuart, EBITDA just million at update year. guess, XX%. organic Is in while. on you expected there? there mean, an was I you that next

Stuart Bradie

Yes. is I But Bert. know that are to a out well of over if target we pace. we're what mean would on I today, I 'XX get don't going STS say ahead

QX We through going $XXX think EBITDA You're this of We I to target. to right. million the recognizes that. the results, ahead with a are blow guide everyone higher. I pace that think and particularly We're on even had quite STS. And that's all of we're the year. of at it's raised year-to-date, pointing it's in performance quarter, pace think circa if KBR, for you And to that, I relative quarter, look STS XX% last

its KBR ago, clearly, that as the value And where and we go be and be And clearer. look And we thought. so contribution. that in as originally But, much into its coming few well hopefully, we outpaces thought higher a multiple in we we'll off would as forward ourselves And the be base. contribution double-digit clearer that from. is will even set months of reflects terms becoming year, to growth we that a next starting

well. probably -- then, lot those be So Day, we've at clarity sort in got next then as know, get also realigning way year, to by you I targets to think that's it. We'll more certainly an we'll a May and as we have of should Investor the HomeSafe look by on best the

next future. sort at we that in years where of think off couple we're cover I can heading really of So the

Bert Subin

of say growth did Stuart, be clarify a a base, there, will higher Just off you double-digit it's you and or a growth challenge, higher double-digit expect to so base?

Stuart Bradie

too. much no, point no. the you in starting that We digits, My No, put being, firmly a double-digit it's number expect growth. double higher

Bert Subin

it. Got

then on side news was, of I HomeSafe start that sequential Okay. parts I I challenges it is were to there. follow-up guess, with just ready watching think, guess, still think like of seems That and or, turned from the mean, pretty things, you are they And September And things go. some TRANSCOM and the integrating like there? expectation, then there of in say January I HomeSafe I us started just concerns moving of Connect. there you're get on a move give whenever revenue sort guys that as there Can part essentially some mill ramp on the a out you

Stuart Bradie

And being I little not up mean, don't we thought in sure, of But there. I'm reiterate don't the this when be is will for way. in it we I I falter. that think and ramp passion to absolutely how do again, it the And and actually be quite we the QX. ensuring expect systems absolutely it's about a Yes. we right. they later sides quite right, will quite start, get around not that to be X. bit concerned ramp quarter. their think integration moves the January considered That's right the want think can all I It's sure all, quickly it very I and I comes directionally, it TRANSCOM falter any both relationship, I'll up. on about about to back, readiness at but mean it's in

we in I said give we're at. the know trying to uncertainty. more don't because that And I what of than say just And -- anymore. so prepared to just truthful. remarks sorry, think can't color. so kind more I'm I'm I where I be -- It's can't that's related

Operator

TD Gautam Cowen. comes The next of question Khanna today from

Gautam Khanna

questions. Two

saw just I'm year. part we year logistics to confidence partners to about the on contract may this last runaway of HomeSafe, given on inflation for curious prior terms of some your the First, have agreed execution,

kind a your what doesn't follow-up. that -- stuff contractual to what's have of confidence get I have Just that, renegotiated? then And

Stuart Bradie

Yes.

of if commitments we from in ramp and have initial never mind the few support the down I supply market think the chain come are in deliver Gautam, thinking the out I comes the months, of the started those I should the and heat's market come think, TRANSCOM that. we -- event. out that naturally as think somewhat tomorrow, rates to a around the that Even heat

chain, terms right right got about we're and the we've got I that we've think were good not the concerned we supply about. partners, feel of our people question a really we confidence So It's the that. really levels, in feeling in

Gautam Khanna

And a follow-up. then Okay. just quick

think XXXX, I you $X.XX target know is updated expense, On can the for per you take the out -- do mean cetera. when guys what guys the which about do for variance it today, that you target, variance was interest HomeSafe Where to you stand? right? the What To win. share it, from -- earnings I knowing HomeSafe what what of share higher count, et you 'XX? Is see? $X.XX, a

Stuart Bradie

the we on alluding what don't used mean Mark we was terms cash tricky And know do I of to so HomeSafe. buybacks. as ramp were flow, because it's to free in

So there's big calculation. in piece the of a initial that

And us, so if a share initially, things. that and our you around challenge I like average think for set we is buybacks interest targets, mass rates $X, was the and then base surrounded that not was that $X.XX prices Gautam, around back, There I HomeSafe. with assumptions when accretion $X.XX dilution and and think things it set And that. look of

everyone about everyone the remember So EPS but those assumptions, ultimately, just and goes forgets and -- target.

the EBITDA. short-term be going wins. that move interest the of that. we measured. think with projecting if movements EPS our we've we're And such from external volatility mean doesn't within way better how But come with EPS and be, generation FX think EBITDA our and I and that longer-term we control in be can should factors future, part our And world about particularly growth so that movements but probably And And we we I control in EBITDA. guess, and today, think volatility more things will and to really think will things something the is I these to like is not a are rates certainly as can't organic our executive away I that's is like. That the we think about as is control how EPS compensation, totally --

Gautam Khanna

And an Homesafe EBITDA target updated have ex-HomeSafe? for recognizing do 'XX you --

Mark Sopp

the STS government of a think It's believe on matter ahead a remarks very and there. I on time. still was that clear HomeSafe were of Stuart lot ex-HomeSafe. is And for pace by pace in we

it everyone optimistic delivered. the a we intended be get date reasonably that over a putting first and but deliver HomeSafe's through and the little hard, intended will the comfortable So is EBITDA was is precise that moves we once XXXX quality are time in still contribution can

original So ahead pace. the important most is driver, is to that targets, is news the the of great EBITDA relative which

quantified haven't yet. We that

on do on But and and heading Investor STS' best trajectory-wise, 'XX. we the level maybe think more the continue. precise which run own your they're for guide will that be to it's exact can 'XX where rate calculation think wait for You Day to I

Stuart Bradie

that we certainly with as EBITDA them STS certainly, outperforming opposite targets into wholesale we be in the very mean our confident by we're made of and shortfall explained pathway I move will STS. any and moving as 'XX, up

So we're Gautam. at not worried about all, that pathway

Operator

Research Our Partners. Dudas next comes Michael of from Vertical question today

Michael Dudas

hear you Hello? me? Can

Stuart Bradie

We can.

Michael Dudas

Yes. Yes. Great.

weeks to maybe just of So hydrogen last of news funding the hubs. in couple STS. wanted move the of towards a for lot There's U.S.

that? clients certainly, next, market And of news hydrogen and business sure, Maybe drive for visibility opportunities the some about and what you've in get explain how several already KBR of little are on about So described flow. can hydrogen you the thinking the continues more and how its top could lot ammonia that a bit to years? a

Stuart Bradie

have hydrogen about the with area. far in talked urgency, ammonia bit and which opposite and some construction $X you positioned customer I well. however, doing will as of to half the we the think well funding think around got I for moving think, in that be in hubs, think, X XXXX, we're sets X we've world, I be and targeted, I things of I And to hydrogen Yes. more spent tracking mean, online. all thought as I think Mike, hydrogen little of I are billion, I know it, greater enabling, a where faster think And we're

a So the the as think guess, story, I is the good of U.S. there's I as and well part think the growth stimulus I outside near U.S. the story. But it. term, it's great part of really in of probably

we're the it And work, thinking course, busy so course, in us really how only are of It's which, about is evolving. that the the elsewhere we way we amazing a I capability U.S. but back for into play and it's think gives of to terrific KBR, announced, credentials recently and opportunity in

Operator

today The Goldman Jerry Revich from Sachs. of comes next question

Adam Bubes

Government Wondering for going that, How the some understand the things interested you the about on thinking -- you're in given Adam Solutions? if help for how on of in the us could today. is international and in XXXX you're about by This how particularly outlook HomeSafe the platform growth piece, thinking Jerry excluding world?

Stuart Bradie

Yes.

So the I growth covered in is remarks prepared between think off. aligned saw guide somewhere on and I I we're well that on ex-HomeSafe in X% and X% of think as terms

as Intelligence move there's space rightly lot additional going recent and good for come, with secured the particularly is QX. quite bit D&I the we've in you and I and its place takeaways a more 'XX taken time. terrific a portfolio, the on we've think I board and a in expect on we wins, into across And to growth. We've in got think, volumes contract scope as Community, at this our would science

organic think I of we task about But expecting next that feeling little year. The where I I And of we're a RNS as of softness, again, piece the we're multiyear, that growth of again, So the said, one months. recent sort the interesting. last move to with out is as really into is we've strongly up there. couple back in bit international seen think, all

international the think piece probably is faster I growing most. But than Okay.

have been double-digit those Australia where factors. ago, in see I up spending I have come a settled growth think directionally through all what's of and months that's can the we down, they new nicely as and that, government down settled that a we're and few and in happening opposite a they're the think and, there's lined looking of world we're at and there consequence the stronger collaboration sort markets

growth the that breakdown pretty I that and range, GS we're overall across that's about So all helps. up, think sort feeling portfolio good of our

Adam Bubes

any in any Very major decisions Can timing you award and helpful. And targeting talk you of about there? then STS. new contracts might be that expected

Stuart Bradie

say largest across the probably It's be that different energy or do as largest crude market of economy of the explained. portfolio. you're that expected probably fastest-growing out capital for economy largest many I a I I decarbonization I lot aware, thematic Saudi, guess a really economy. There's the in crude, -- as for We into value from the are sets think, or customer replacing in there's turning across it a trying chain then in with the growing world. to diversify STS next the multifaceted of news, they're a they're lot to they happening mean, to economy -- stopping biggest that I the that is gas, mean petrochemicals. burning putting a Yes. we're are their trilemma, the we as would heavily that. lot the with And they work and extend by a years they where for power, couple engaged lot on going coming

through, major really we history and win I working new up portfolio got doing bid and like billions if with Saudi substantial operate. a we've pre-FEED so we've a and mutually. our in And Aramco, a there's And they of hundreds that, management. and of we of X, that investment for integrated think comes really long terms how of with with And it's relationship huge in understand share we fair X it, It's got program associated can FEED well of good up now project dollars. crackers and running of if

win QX. that's quite there'll can through. in sizable that largest multiyear. the there. our That's we I I be probably there, that think coming noise about if comes one And if through And we share out very and fair largest so in think And exciting the that probably that's think

risk be think just nice that's LNG which than high-end people help work this I think take in coming look proven the felt we was can a as use, like security. we've Plaquemine. more and And them that more capability in not could I and that there we tolerate case out that also quarter the of also sort work, energy of know I I gas reimbursable our a through guess, not to are as and customers that succeed, fuel number transition model to that Plaquemines mature there to around

more good. happening So world I tracking terms of what's ammonia in of in think terms across opportunities. that's the all ammonia But

delegation QX doors, recycling opened move that of we've saw like, just the into end positive with the that up for plastic very investment there week week. of fact, probably and And big have CEO, in partner You a Mura last next the the at And as ramping as Mura, you in production year. tail the last if or business. we was we

So all again, I that's think exciting.

recycling the in come So once plastics more will area. that's I'm happening, sure

to from, opportunities around long excitement to in what's the happening opportunities a to ammonia obviously, the question, Saudi so There's olefins a portfolio, that much across cetera. et across energy in Australia a sorry, security, the to So answer STS. there's goes the short tracking global and world and in Korea but hydrogen happening lot

not additional thematic So happening it's the the Arab. global what's in the to around very and in with a imagine business U.S. funding decarbonization all

So I think all good in that arena.

Sorry.

answer, it's long about a quite but Sorry, STS. we're excited

Operator

of Perez Please go comes of ahead. from Our Mora today next America. Mariana Bank question

Samantha Stiroh

the Samantha in strong beginning, as I see that? about the to with about, was the And that? have in growth is particularly then Mariana. you do at you on just little kind already the bit count you STS, seeing what a talked keep Stiroh This with head up head of for you're wondering count ramp, place

Stuart Bradie

curve us that extremely mean of business there, the who and, slightly got doing Sam, of respected we're team's we've real is valve a highly that and a a there, we're bit and I we're and relief -- terrific well lady we've diversify ahead allows it's talent little Yes. attract got in large think terrific. able talent, just so to marketplace, a presence India -- hiring I in which leads

in real world's so like ultimately, and got and talent. team. But We've things work I life think elements sustaining and like big actually like solutions a the But certain in security so and in keeping and talent, very far, so in the well I of recruitment government things become, pace particularly to issues. do side sustainable a I'm good, think that. far, as constraints is draw issues company younger around in no where we that's process around the they gone things value being that strong of So a on and that. past marketplace They sit will really part like sure, way we're we decarbonization change trying address thematics, a climate as for the

we our we aspect. help, after they're and one the is our do in helps are really but once -- only and things recruitment where the it's So overall we reputation look markets people here,

retention is we're in area. certainly, that I think another aspect. the well doing very And

so think I So far, so good.

Operator

Our Sahil final comes of [ question Citibank. from Manocha ] today

Unknown Analyst

Kaplowitz. This [ morning. Good is ] Andy for any Manocha Sahil

short-term, government medium-term approaching how deadline shutdown, some impact So could November. shutdown another provide Solutions Could in a business? on is color you Government the

Stuart Bradie

of Yes. we getting companies that do question. lots what at Thanks, Sahil. I'm that do sure

year, to nothing every we is mean happen understand is CR seems shutdown whether our to year us, year, International I that. completely and pull and what think we're in STS immune I after or the it our Government very business this We doing. For new. we're Remember business that resilient.

Station whether that's So across doesn't we've in tip the of funding of We've defense operational got it lot portfolio. a or whole call intelligence matter in-built where Europe spear the got whatever, the some missions and our Space on what immunity. I what would critical do we or

concerned So that. about we're not

times. that the -- answers many I'm sure many ramp. -- our government in of we've and in ultimately, the it it's It's peers been engaged I from same think so

I don't it's So not think great of things impact avoided. But that if those I would happen, to -- too it's mean, much. be does one KBR be going it to

Unknown Analyst

-- settled your in some but shares? decision which been made you they'll provided That's the cash XXXX, you on the mature first opening just then could provide an the be on of remaining remarks, color in plans helpful. the whether And half settle on has update or in your to warrants,

Stuart Bradie

go. on open be warrant we an to that rules allowed in the dialogue of start with I depends under to will not in the we're we're window, it how holders think which mean, Yes, engagement we until I tomorrow.

we So negotiation. that start can

and around if in settle to options premiums cut And accelerated an as Mark said, have we we reasonable a things fashion. deal can

our count do reduction just the in these be way is for share on quite we think push of up depending the a are it negotiations I calculated for if fact the interesting settle that that bit share will because go year, things EPS that to around count. will decide a early, how XXXX,

taken be with as consideration patterns So fact well. some there good into to

that? more any Mark, So on color

Mark Sopp

the just add that open, of per take, the after been $XXX I'll complex warrants price, of but piece $X remaining of is $XX know and story, with roughly has at I those yesterday this are value roughly or a last value today's warrants. And million, vary Yes, pretty give does the stock because the movement.

And you so that our into that will thinking. gives go to some -- sensitivity

it There we'll are counterparties And we'll we'll and a still what so market evaluate instruments, that see undertake and goes, that bears. advise we'll where the negotiation, as and is and accordingly.

Operator

in We queue. further questions have no the

Stuart back for Bradie So the to call I'll any final turn remarks.

Stuart Bradie

Thank for morning and for the this taking thank again. you. Thanks to Thanks questions. time listen you your

good on performance, be we really momentum. Obviously, very HomeSafe feeling to our I'm on program and in the discussed company, very feeling very 'XX about in any look We're QX, uncertainty margins. into we'll about I very good really about not about think the We in continued truthful good prospects ramp. we've with about -- bookings pull trying the clear general. feeling punches you strong can very over ask got the ahead We're control strong destiny. bookings, obviously some QX at where and the

So the please said we take that know as we've to it, -- look what but like. ramp's and going don't

more again, give to 'XX. to in start than path and will clarity, path up 'XX, and get But full you unclear until a we that ramp is ramp We it by difficult uncertain. get is There But that. will to over it's time. any

this uptake upwards place be and that one-on-one finish So forward to others a strong time. and for you 'XX. you give can't to your we'll to it, Thank again, sure interest and to talking But thank And more we I'm this leave good as in a look at probably to That's almost you. we than we KBR. progress. apologies 'XX in

Operator

joining. This concludes for today's call. Thank you

your disconnect now may You lines.

KBR (KBR) 2 Nov 232023 Q3 Earnings call transcript