GD - Earnings call transcript Q3 2020 | General Dynamics Corporation

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Operator

Good morning and welcome to the General Dynamics Third Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please also note, today's event is being recorded. I'd now like to turn the conference over to Howard Rubel, Vice President of Investor Relations. Please go ahead, sir.

Howard Rubel

and everyone. [ph] Rocco you, good morning, Thank Welcome call. General Dynamics XXXX conference third quarter to the statements today forward-looking Any made company's regarding outlook. the represent our estimates are estimates subject some and These to uncertainties. risks

company's that complete, Phebe my factors contained these to regarding call turn Novakovic. it's and Chief our information With in Chairman pleasure Additional and the filings. X-K XX-K, the is over to XX-Q Officer, Executive

Phebe Novakovic

and morning. Thanks, good Howard

impact. you in address the good quarter, on the COVID-XX's briefly me I continuing Before performance update company's let quite

last working have encourage we're protect mask people. discussed to we guidelines, As CDC We quarter, social our hard policy. adhere a to and distancing mandatory

and are continue of so. working dealt But back many issue. while infection our We X,XXX home, in effective to continue rates To-date we've from employees, surrounding remains recovered quarantine. had about way communities. whom of lower workforce during are we've have pandemic the XXX,XXX of In our the cases. and of work do in others to X,XXX short, our fully an with help the their to have

press A focus less improvement B to the and are turn spend the quarter, well I'll in comparisons year quarter. on in sequential and quarter in my over stated remarks Exhibit's the on we our ago the that instead results to quarter As release. significant time And year-to-date and operations, meaningful development

over as quarter. performance of per very our net from earnings the improvements discern third of and press recorded can million company's on share million diluted $X.XX income you revenue earnings billion second all We've the of quarter of significant Regarding $X.XX $XXX operating release. $X,XXX

X.X% million $XX last Operating expect, and earnings or revenue earnings was were down or against third the quarter $XXX would year. were As XX.X% net down million. down $XXX one million

will recovering business see $XX but you operating details. and up, is holding defense million For year-to-date up [ph] are is $XX only All alone the earnings the well been and million. seriously has down businesses up in revenue as the the temps impacted

all in are and most both jet the aviation. aware and associated significant revenue has shortfall force of aerospace occurred and which our quarter you saw earnings to-date reductions Gulfstream last As segment with at this year write-off

I'll billion moment the the However, on both a Funded But experience last details company's there's aerospace $XX.X and of level we quarter. get of particularly shortly. quarter want only $XXX end billion spend I before of which mostly good and the into GDIT of down at backlog into the companies backlog I get this significant for to operating news $X.X backlog. is at improvement. strength against resilience billion million. is Total the down $XX.X where

However, against total the down contract last quarter. is million $XXX $XXX of only of billion end estimated

a While represent these are enduring and numbers they solid down backlog. slightly,

was turned benefit led the the paid Gulfstream second with correct. cost perspective, be quarter. largest fourth and for a than the order quantum From The number revenue board. GXXX had We third a of mid-sized. basis, good across that aerospace sales receiving billion at an at remarks, of quarter jet news out we track improvement deliveries in operating XX.X% second have operating third this in seven and the large in that to mix leap million That improvement a and million the made of $XXX the model. in in this an Aerospace margins. by earnings point basis was quarters quarter margin. reductions with Gulfstream sequential quarter. On the told is a $X.XX Last and XXX activity earnings of and within better story $XXX the you back be expected quarter my in fully driven of correct certainly way the XX XX I operating on deliveries, operating to

fears by October during X.X by to week-by-week improved deliveries quite still the had the travel another once climate dampened had economy, by we concerning and orders of progressing led Nevertheless, of by X While XX of activity we we of wide unsettled GXXX saw restrictions. rest a GXXX. pipeline for quarter variety the book-to-bill the political an again anticipate is XX; in quarter. the program program The and GXXX customer XX as nicely and for the demand is

in plane XXX pace, over the year quarter should at by customer's reaching have with the hours precede flight a Mach end continues of speed the and an altitude we hand. their The climbing in to So feet. first end, XX,XXX X.XX to is aircraft XX accumulating this development GXXX three of a of family tests

# aircraft next for production for year, say guidance of was week I'm while [ph] week. last the piecemeal flight X # to not frequently fair that First year giving we our dislike and plan I final. is next deliveries and X flew about October fewer It for Xth deliveries. when is asked contemplate

As the production of will out you know GXXX next year. go

by Pre-pandemic, shortfall such that more the we that to large planned appears deliveries. place support market aircraft. GXXX now fewer not make XX will increase. be other will had there delivering It cabin the an of So up

three production of in rate will aircraft. change modest There delivery. So cabin a aircraft the or in mid-sized will a also reduction other large not much be experience

that in at However, market production. if to to justifies of we demand up the XXXX April will this add point opportunity turning revisit see

the complete. fourth give is greater planning on this after quarter of our call will on We specificity all

Finally, of we previously full around had that now right we XXX XXX. It will deliveries appears be year to forecast XXXX XXX. for

in exchange a the or up or systems; given quarter. to quarter. and X.X% are X.X% a of million X.X% margin. The figures were up on billion they year-to-date earnings systems Spain. million the was funded had and year COVID nice Sequentially total billion estimated Funded impressive in order all and early earnings earnings. show over related Operating The the and contract revenue growth orders. backlog growth XXX rates the problems had backlog. group combat nicely Turning improvement with ago Medico. XX% $X backlog, value acquisition operating three in $XX up in with total in operating in quarter of good grew Combat of the particularly $XXX X.X ago together which activity together the were the in $X.X book-to-bill $XX over $X.XX year incurred revenue year basis in in of growth taken revenue or over had favorable to quarter. in result points X.X% Pretty a million The up million X.X% X

OTS important are that well a facts Land in sure combat by Undergirding largest also strong the systems land their book the rose systems in quarter understood contract has European not estimated had the contract value total are and value Our quarter. I'm history. in particularly potential business estimated several investors. systems strengths order

are without we of worldwide. First, systems integrator land question the combat premier

prototyping we're of facility Sterling Second, the through our in innovation source Army's rapid Heights, Michigan. US leading

have in the Army reputation we quality, the a performance Third, for on is high unrivalled on industry. well-earned schedule with and that budget

for what been talking about systems time continue future. we underscores into this combat of have will All grow some to foreseeable that the

before trends This are of new won income third strong of both such we and reasonably continued Through to XXXX. the awards including in in with It technology, of awards As year-to-date. this business. security, contract most all and requirement. of I best award a the developed new federal, margin largest of imputed across the quarter cash had XXX% on XXXX, and year-to-date. indicated had expanding the first quarter. a that as saw traction improved and award markets it in meet our operating cash which cyber the comparisons as improvements with in net proposals the more $XXX of earnings across From momentum revenue, business information of favorable flow The that number COVID-XX and the year than COVID-XX emergent impacted X.X%. order very are performance the deployed earnings an have the quarter of technology GDIT its $X for sequential all well front are operating an this number This division. General with the from submits recorded margins. the of being accelerated They third defense areas GDIT's quarter year-over-year They gaining cash produced by free speed has is awards cloud demonstrate wins operating competitive over business civilian XXX% mission defense very technology quarter, XX% and our revenue well. our release $X.X nice bodes good artificial pandemic GDIT directly considerable is performance. are is in and billion key of wins We over modernization. including computing, significant performance operating and million competitive a focus in which Over as billion in as their in at encouraging earlier, growth digital began perspective, three in quarters of in record quarter, technology highlighted GDIT in strong footprint and intelligence year. Dynamics

Third bids These quarter submissions decision. quarter submitted proposal are additive submittals dollars year dollar for billion of submitted. billions proposals awaiting the to largest of over prior $X third quarter this was customer of

for or perspective more second versus to that the sequentially. From are a We is We with $XX divestiture ground-based customers products. X Year-to-date X.X% mission harness had $XX impact tact customer $XXX corporation year. systems, sales or activity not of expected to down X.X respect communications broader to was our which to But sequentially. the lighter bad considering last some business million of in Similarly, mission drive an are same order $XXX including working wins our million up are of as million and to mission earnings of at of beginning up or million X.X% With or in and power expect This quarter is return essentially earnings million the the systems. remedy more COVID-XX. the quarter. revenue fully quarter-over-quarter. closely to But even satellite saw business the systems X.X% of down antenna book-to-bill we work. revenue X% of billion $X.XX the $X reduced

at systems. some have shaping done We portfolio mission

Over and to of of So basis strategy. a US of group is improvement point half improve defense, This growth process, earnings. nuclear coming. with are more operating On the significant marine margins. to in is up this year a the billion is to new which We've quarter basis, revenue on a both programs a talking sometime positioning $XX margin intel operating story. of critical good growth growth earnings the is growth we a can Columbia is the electric The and and work year-to-date submarine But Columbia of that margin. yet This down over margin growth boats. all again assured triad program. that XXX revenue and concentrate a attributable our to It considerably real ago about improve I'm $X.XX defense revenue on are you're modestly. with is see go systems support X.X% on lines beginning of At largely been cyber growing quarter, navigation sequential for is confident million handsome. operating our part balanced to capabilities continuing I'm path overtime. in business, Marine of our effort in very we're in X.X% and but

think respect with I forecasting, quarter you view. the guidance last So best our we is gave still to

over remarks Let we'll for Aiken turn questions. your me the to then call our and Jason turn CFO, for additional

Jason Aiken

is flow morning. I'll operations XXX% year net the shaping the second and $XXX quarter and $X.X quarter from debt position quarter. rate. our was performance billion our comments billion conversion and almost some sheet the latest free in Phebe of with on down and We with cash good in ended of million on Cash up. our $X.X thinking how the was $XX.X you, on quarter Thank balance the the from million, a $XXX cash cash billion start

up at this That said, each years, As year, fourth quarter big past an our of forecast quarter and of not markedly original performance in with started fourth line consistent has the that cash each three sequential for anticipated expectation the quarter the we point. the the this us. unusual looked in like year with so ahead stepped what when has a we have quarter is task in right

for XX% So be our order supply of free we cash with settle production we and and that our as to support rates the biggest to income mark that ongoing flow year in at to range. achieving for will backdrop, on year. The chain efforts be activity XX% to Gulfstream continue net variables target delivery in next

year. Phebe's assuming remarks that we've of continue heard things the on got path on our cash favorably to to trend You we've subject late, for a as close so target seen

$X.X contract our accelerated chain. the side, lean of forward continues than of approximately defense US that Pentagon billion the additional our continue impact to supply incremental to to relief contract the funds from extent, relief support we've government payments advanced of in for received base and it's To third from the offset in with our we to customer our do the customers Through the eventually payments available. made suppliers. authorized are quarter, industrial to in same we We'll only On COVID to see when of and our million the end business. ongoing customer results the the benefit accelerated of more and form funds our $XXX include turn our

of XXXX. our $XXX $XX brings As net just million I to our the $XXX the quarter interest earlier, $XXX in we months of billion $XXX same the At this in expense below for expense interest the expect the and to be versus debt period expense million for to approximately mentioned down $XXX was quarter nine first unchanged is That the interest million in year third million point, year the from million. roughly XXXX. for

On still before CapEx targeting of paid declining the the repurchase revenues to to capital over the of approach In $XXX quarter we stock. X% in for dividends quarter, not $XXX shares typical million front, and full were couple we million capital our revenues. the the or of years next expenditures did in more year our any X.X% of We're X% range. deployment

the the tax to first was for effective rate quarter XX.X%. rate XX.X% Our months nine the for bringing

our below third international quarter taxes expected result and development on as and target research year a as increased was lower full of rate tax The income credits.

achieve range. on in track our to the target right we're So year full mid-XX%

quarter the to year that that Just get recall quarter. backlog And lastly the a in fourth rate the color full higher implied to for story on somewhat tax little to rate.

this up held of backlog well the year. noted, the Phebe far given COVID impacts As particularly so

with segments, funded end year all a up I'll this a are growth quarter, the ago. concludes based for so you back increases solid Notably, the significantly resumed year-over-year backlog over this pandemic. total in five and of of with emerged of As total compared our my value contract Q&A. for backlog, we estimated broad that is our the remarks. as foundation the turn to four from it Howard growth point

Howard Rubel

Thanks Jason.

that participate. everyone the to participants [ph], would how follow-up, As has reminder, one participants ask you a we a ask chance to question remind enter queue. one and Rocco so please to

Operator

Epstein Instructions] Absolutely. with Today first go question from BoA. Please ahead. Ron [Operator comes

Ron Epstein

a In there'll Right, I I'll sorry Gulfstream, possibility? what do Is some bunch of be I'm you some means And of for those guys, one a think that after happens? on been have questions other then you if I that? know about Virginia-class. And leave I'll so just naval III business What start folks. follow-up that a defense. that. whispers that there's for the discussions, with

Phebe Novakovic

as discussions its up articulation recent the Yes, criticality ability the customer that the so remain production conversations States. of facilities advantage you'll about to about and ramp particularly our the Security all size submarines the and a to we're in developing talking well. United But for competitive plans figure of the Navy's we've fleet Navy do the because note of national as US those prominently of and can of strategy you all of they National the chain in that supply essentially been to - imagine,

the nation we'll with where for we'll it. We're it, our work us to if planning see continue increase. we'll that moment. accommodate So customer takes But needs at and that not the

Ron Epstein

unmanned sea our comments. for guess present of at XXX-foot I talking Esper look in under And that opportunities What been there's follow-up is of Navy, about then dovetail's kind was that When vehicles. a General Secretary one portion [ph] Dynamics? my is of you discussion,

Phebe Novakovic

platforms number in of domain, have submarines. testing would parts. performance It's sea about to the under With been quite outstanding. those to been into has systems domain into think mission the In in performance to good it's business Mission be throughout let's shipyards and their of instance, job Well the within two I undersea a unmanned respect that so existing lines can all we're active has time those lines you world. to continue and our going of capabilities as ships first the imagine imagine payloads very integrate individual for our integrating our that business grow. and of about unmanned very some the and

So I think on there's a lot that. more to come

Ron Epstein

thank Okay, you.

Operator

And with our ahead. from comes next go Please question today Rumohr Cai von Cowen.

Cai von Rumohr

that were revenue that if most the of million margins that impact And profitability then like looks missed you base you aerospace you the deliveries on? What plan the [ph] the been do, gotten COVID. have to you've of XX%. profitability even value soon on would given The decremental Is that didn't $XXX it deliveries? you do Would do? better

Phebe Novakovic

lowered So think production. very did, better supply of respects. in allow about really quickly We did Gulfstream. at chain up is the what COVID. all importantly to what performance We it but catch has all - the that's to two so very response to we that to in our of the factor driven demand overriding One, meet driven

Now quite predictably to within so. that, as and we'll continue we've sized business do also told we've and right that

they manage we that nearly margins high be push to and as So can. as them our

So down its restructuring a then both for cost in productivity. savings I and Gulfstream job think remarkable done cost and bringing has

manufacturing I size and the So with think actions respect line. superbly business to Gulfstream perform discipline the continue to we've the some [ph] seen supportingly good then profitability of really to on

Cai von Rumohr

to last burn advanced billion [ph] to near that related like million do that? recover so, then or at $X.X delta that's had a advances down you $X.XX you Jason expect zero? and when one, to so or a supplier $XXX COVID do And he a cares expect the mentioned you billion When yet

Jason Aiken

our an the statement been paves OWC of that number cash [ph] our overtime. flow on payables look and to quarter sort the of and at year and out of you all gets headwind building mind exhibits and That bit phased and the be side. you'll Continue and timing. that out lot receivables Cai, supply note it our keep so in in in unbilled for really attributable to phased in that's an throughout as well So receivables and as then that's and us paid accumulative that's a if said,

is, practices sort of the payment to of you'll we're one on to all going see to got of from as the we'll So I our cadence this in chain which particularly of here that the we've side abate sort business other, think and and for in do phased as supply the impact kind perspective. starts a and our out normal continue support our is we're its so to that pandemic continue to is to chain continues. good for move symbiotic back to pandemic that to smaller relationship what's priority customer needed good meantime, the the moves elements normal that supply that and In make sure back

Operator

And Please Research. from Robert question Vertical our Stallard go comes with today next ahead.

Robert Stallard

perhaps First on all, of GDIT.

a operating environment, accelerate quite this And demand Phebe here the has can business revenues division? hold bidding and expect been from we the this that the about few turned finally there to to in had You this comments margin? onto Have corner we doing.

Phebe Novakovic

in the revenue earnings covered to GDIT as if those COVID. And workforce we'll in of program The numbers, were legacy we decremented impact a had inverse if orders a severely number it was you don't but CARES on the last lot quarter [ph]. of Act as by well take carried Jason significant you had a that I recall, we of the loss margin operating that and that - under was our recall know

Jason Aiken

About million $XXX quarter. the in

Phebe Novakovic

lot industry a headwinds get superior a and considerable margins that GDIT very but from the are would not continue. leading go, by little, had expect those to has I EBITDA So and by performance

win just with predicate. an a going front a GDIT. we I finally overall corner. of on you excess our just the of quibble the was order over from In turned in Here's win some rate predicate largest XX% quarter rate work. the at that new me it what's XX% positive of is the over factor the let XX%, coming We third that over quarter awards is can give idea the quarter really our re-compete competitive think our and But

in a an number And strong forward enduring performance going the has so this indicator our on very, basis. of quarter. a I that's contracts. think important been on of had our We business nice very existing wins

I very like is this have much So and they've continued again, to where performance. business cash outstanding

Robert Stallard

aerospace the by notable order on us in whether or by of region if wondering clarity division. terms were then could and any was any model I that differences intake the on the give in quarter. third Okay you

Phebe Novakovic

the Well extraordinarily endure that think remarks order the XXX in I continues That has endure. been led book. an airplane my to I and and noted successful successfully

more pickup. we of remarks my saw I demand environment. fulsome saw think activity I internationally, But about was the order So a good in pretty internationally. we

Robert Stallard

much. very you Thank great. That's

Operator

And from comes ahead. go question Carter Research. our today Please next Copeland with Melius

Carter Copeland

cost that. Phebe, you speak little at COVID wondered year-to-date. performance that given the bit to about reimbursement you I the treatment a if guys efficiencies the outlined there. just found implies pretty might those I have there, intrigued through obviously the by wondered you've I EB. performance come the those, you some of could mean if I'm margins talk

Phebe Novakovic

and at will to very efficient what boat continue well find and yard better they cost So continued as as find that's is improvement cutting. do. performance getting had to a electric This better

quarters four we're I can within we I all bottom improvements. push line efficiency that driving going they've better my continue at productivity as in expect environment growth, even We're in the to their of that superb that's So job a and of going and that the - to to productivity about and accelerate done electric line boat noted this the bottom growth last top and performance see expansion. for that more remarks, line all margin we're growth

has pandemic. across in extent disciplined, to by with If this the the that shipyard, helped including the is any that you continuous amplified divisions. improvement of they're the think underlying manage our of driven and The not strength COVID this but this crisis operations to it just about business respect all operating

to So we're the performance continuing each on improved operating line every bottom their our and one see of businesses side.

operations long financial that are that key Now strong talked we've the the bidding. contract and about to good success

So electric in More leading see this march you'll to the I boat think improvements continue toward win. is to come. productivity

Carter Copeland

great. Okay, you for Thank the color.

Operator

comes go Global. And Richard ahead. Safran Please from Seaport with today our next question

Richard Safran

quick. Phebe, just a

discussed shaping You in any fill? Are your holes you on portfolio get so or wanted color how Just further that additions you're there Do now? the comments. that opening just to you shaping. considering to right you are portfolio future about you now to I provide portfolio? any think divestitures any thoughts your in the can on portfolio it need thinking right

Phebe Novakovic

shaping I only you portfolio you think like that I fact. know much but discussed after - the Richard, know effectively how is

we're it's our focus in really horizon operations always at we best. for doing moment. But to the our There's activities. really comment and nothing looking what opportunities on We're improve our no do sticking the So to moment.

Richard Safran

at follow-up a as and Okay mission.

elaborate markets, that systems. into noted color want new could electronic air wins bit naval share expansion contract more on you there. and new gains, could you into expansion to provide just You any a I if know versus versus

Phebe Novakovic

that triad talked a I key control decades a history will quite and them. over fire we critical some continue those important as front and These at looking you battlefield position we've done well world and think of have, when are the what to That because critical important a a we've we've amount continuing and communications wins some GSP we exactly shaping business grow very long four, a I contract time growth see that in reliability of the had is and In where of within that's they've on [ph] in missile cyber divest short yourself and our and that's as really fair you so is nuclear non-business nice that and expertise portfolio questionable, developed these strong have navigation expertise and got franchises where that really it's timing. factor. done. tactical defense, in about

Richard Safran

very much. Thanks

Operator

from Please comes today question Bernstein. with Doug next ahead. Our Harned go

Doug Harned

history, over Does numbers sea. units were General opportunities mentioned you're by the of independently of long corporation Dynamics manage you into you unit. GD this the unmanned, the and corporate really differently think of the about earlier some Phebe that under suggest of for leveraging there that operating from within it's right like a I driven center? when thinking I about thought stood how very things the that breadth But

Phebe Novakovic

So in in They've believe heavily business of which GDIT. we at particular. mission have units creation centers That systems and in together in really systems history look said, concentrate levers their working long of on our disposal. excellence I the the within platform the units group they at combat and a value embedded within marine

So those might response moving to between in increasingly increasingly together. and we're on activities working market I two they joint together, businesses the add worked well they blend well

really know, done they but XX in do what business years. our units, across excel when stick the think they - we've creation through change we over for opportunities we've have our to how So done when value people fundamental see that there's portfolio. across I partnerships no we augment to so

Doug Harned

won be both systems growth expect to at contracts the see, if area One you've GDIT and Is mission we and of might that. at opportunities of could case? area the as this to and related that XG see that's the should a in when strong something we

Phebe Novakovic

it we levels time. increasingly at there and to And Well we respect gloom this to the XG? need XG it, customer thinking work their some the needs how the with with for their is department so define how is in capability to have our both be way working customer - operationalize We'll in and clarity operate as for clear. our for around and an planning moment it's we to both meet still through Warfighter a enormous how them. I our to instance of part used, and been think the advantage gets

Doug Harned

you. thank Okay,

Operator

question comes today next Please Barclays. with go from our ahead. David And Strauss

David Strauss

EBIT Thanks growth still would for as your With in you in deliveries? billion the $X.XX think that, despite deliveries. XXXX to in color to lower XXXX regard on you Gulfstream expect EBIT I Gulfstream XXXX, some looked forecasting out

Phebe Novakovic

that. EBIT. number really let of Well, addition airplanes delivered But continue to in efficiency, the us drive to work

we've my But at we're its long It's about be to in plan away in models final specific to very got But the that remarks least at have level. the able really gone that go this have is. airplanes. So a environment in we not plan it with we notional new and replace how XXX I way try about determining anticipated. delivery think the to what demand has airplane our new to current

existing very with on our So similar of to decrement cabin. little on the production the going a bit fleet, be is mid-sized

think I So about in the all can the around we future. say moment specificity any that's

David Strauss

Okay and much cash next this XXX% potentially think free conversion about out a year follow-up of I we point. on at conversion as bump that question is guess the could next up? as number How flow Jason I mean year.

Jason Aiken

want David. question, don't anything I to of the say is out

two full what of the I timing operating sort muscle is combat is on capital year that the unwind cash and have a on a and general well to models that the new just international other the program to going aircraft starts working test over about unwind inventory that of major rate stride test the on focused the build back associated aircraft three the working think the all aircraft growing flow of with those next movers story build macroeconomic different side of is into free side with part the unwinding models aircraft is gets we're obviously been year-over-year largely Gulfstream is inventory the that bit one, good when all to that on three there, we've and a systems production as recovery think that trajectory, really and that this it capital years I then told path both be set that. with on you, predicated and with and this obviously into eventually throughout as really

work before don't put flow takeaway to it. to cash around to growing want many think get the to as the details X% see expect I pandemic. whether I above is we caveats we'll were we So year-over-year as the XXX% important most we free projecting or out too But and

David Strauss

Okay, thanks very much.

Operator

from go Springarn Robert Suisse. with comes today And our question ahead. Credit next Please

Robert Springarn

know Gulfstream? angle. ones, but question changed quick ask customer worth since between about the so demand of mix Two from on individuals Gulfstream versus for high to Phebe lately one the corporate I buyers, wanted just that's number the you COVID you. Has talked net first other I

Phebe Novakovic

let a Well That I address think with uncertainty still across political about and highly remarks. the have to then that we that, talked there's I economy, my in me travel the uncertainty world. restrictions restricted of lot respect

net corporate I continue That's seeing an So noted in to but we're international and is affect high individuals that pick nice going market. is issue. up to the worth be also buyers, as

in as economy's inflection We'll recovery. all So that. in diminution the We'll rate. see pickup see a of

Robert Springarn

I the But the getting people not have privately, net high I'm to worth before? is see might they where virus travel causing at guess to what is, group want

Phebe Novakovic

think it's driving high important is been of very difficult. always worth our and an so. Well I But have part the remain motive to they portfolio people individuals net

Robert Springarn

systems It mission driving on and sounds for the Jason Okay and just like guidance had a the one that's QX. just margin in and in mid-XX, quarter? fourth that applied what's so holds I quick

Jason Aiken

mix there a looking you're I think at mostly for that business. issue is what

businesses As Phebe with some many talked that so that than that of non-core less out cases, in has association effect by margin well. as uplift of of get as about desired well an some is to some businesses, shaping and portfolio

rebound several see some through which of some think they've that experienced based to So little bit a months quarter. that flow will product bring margin they're and expecting incremental over the strong demand will the pent-up I drive mix some past that in of

Operator

question next our Shapiro go ahead. Shapiro comes Please and from Research. you today with George Thank

George Shapiro

Couple of one. quarter XXX above of the the book-to-bill questions the quick in was

Phebe Novakovic

quite for parse was not it but out that wholesome. let's you, Well

that's said continues to spectacular a that in demand. be I airplane As

George Shapiro

for the and [ph] a $XXX been $XXX in million at worse QX and etc. in quarter reconcile Okay on receivables on you billion. can just so it would and impact looks gave the you I'm comment. the Jason, from like the a with million look was cash between just actual little your sheet unbilled have trying one then to and the capital earlier working from cash impact what and I the receivables mean free out if $X.X you you clarify received that the bit I balance

Jason Aiken

up billion as implied the in earlier accelerations en in what into think advances Keep to much quarter. we're suppliers. the pent the you're is our to relates on and this numbers question. get customers numbers accumulative trying George, flow pointe not $X.X statement to on an as of OWC mind, clarify sheet as accelerating, of to pretty are quarter. of Just that's the I balance quoting the cash from the it on from the I was payment and the end of impact cash our the

going later helping to As overtime and we're excess the from quarter-to-quarter. keep and from months immediately. now But suppliers, off that we're five, Well was an ongoing they've implicit that we're if billion $X.X for so receivables basis them balance month-to-month due call that XX days that suppliers. six and paying are the it accelerating cumulatively been sheet past kind of accelerating XX accelerating days comes due of so got cash to on naturally. in to payment those we've

to reconcile the which reconcile concepts. quarter of the So the numbers the was OWC you've were statement. with that's net what the cash got so kind off how kind coming speaks to you in those of of speaking two to billed flow you that

Operator

with our Please question comes go from And next Joseph DeNardi today Stifel. ahead.

Joseph DeNardi

some you're just ago too to it given at of long willing now build rates the you in wasn't changes you used provide that by Phebe, Would Thank kind seeing? that provide duration platform to that Gulfstream. backlog be you. of

Phebe Novakovic

all some that is had for is fleet start a we going existing airplanes time. for when and not time. we're have some appropriate long-term been as to of we you those. clean airplane in we're kinds - on frankly it's that model and the these and focus in have, doing only are we airplanes sheet best we airplanes well new are the to new had was selling whole been This are just the It how in difference material until truly a all our That manufacturer that with in production these know backlog all

is indicator It's pretty also me. we're customers forget the we've the have important I an XXXs GXXXs to over XXX, and of think XX fourth the impressive, end got in that XXXs fleet. if let's not by hand in quarter, these you and of ask it out going

Joseph DeNardi

understood. then Okay, And yes on just GDIT.

that understand as metric folks at look is there, I [indiscernible]. growth book-to-bill you think of and the okay, all to book-to-bill for traditional kind is expected that

Phebe Novakovic

[Indiscernible] on revenue.

it's quite think nice. I

Joseph DeNardi

There's what that's that expect business forward. that so book-to-bill Okay, you there? not expectation going improves materially an from

Phebe Novakovic

in don't to enormous the variances have imagine that customer book-to-bill pent part all in as rates velocity start the going perpetuity. up over - And know got the in given this on the deciding stay you expect going when I wouldn't proposals, contracts of front well the same the there's in but quarter. to any made the these look on and all say depend you we are win customers We're decisions to contracting some COVID. It's of they've the have by backlog the them. or can of part down which slowed of quarter

share that I win than fair and for us think So is of all regard. this that our through we'll well to more in the areas key business doing get quite and

Joseph DeNardi

you. Thank

Howard Rubel

take we'll more question one Operator, please.

Operator

go from Morgan. will ahead. with and question JP Seifman Seth Absolutely come Please today our final

Seth Seifman

kind way you marine But so that aware and way. guidance. see, to are I some maybe and as those we happen. timing coming additional when could picks around the in little going if maybe bit. that's Thinking Columbia, give from have up color of of programs of it in move guardrails Any we any of occasionally growth and know around kind development the production the of in years that? I and magnitude of about just be have to qualitative talk multi-year growth a by to Phebe, you wonder a the don't some size kind driven

Phebe Novakovic

somewhat about XX% future going while growth think and think I quarterly to year forward this will be a Columbia. of The lumpy been this fact has our way in the on basis. So that the

Virginia I what next it with Columbia has the and to geared it [indiscernible] as alone we've to production manufacturing one mean seen. successful is already go you we've will program talking five think XX% this a give what's done this a one-month future. Electric continue size in construction going double prepared years. it's compared the to business an a the the enormous in growth. to note going It's and into We to it. of give nice and processes for Virginia is about quite to was six up XX% of to on our to all as indicator I'll been be boats grow. to of drawings large of you the to both sense on ever that - a This importance support little program well national will department critical support of as propel sometime us

of to numbers all the as future noted. that current top expansion. So able embedded that continue growth margin by be tells the I going year on numbers those and line Navy budget capitalized to growth of then nice budget are nice, that's in work We'll us be in within Department and the to

what we production overtime. full - the fourth call of Columbia. into sense as If give So in next get you we'll rate and really looks the get on really a year into like we and overtime quarter

the You'll what looks lot get also like. of clarity future on

Seth Seifman

today. much. Great, very that's all me from Thanks

Operator

back over the to call Rubel. I'll Mr. turn

Howard Rubel

call refer outlook. joining presentation our much and today General website as the the quarter Please to a Thank for for highlights earnings third you very reminder. Dynamics and release,

questions. If you much. additional have be can any at reached very Thank I you XXX-XXX-XXXX.

Operator

for Thank conference today's We This presentation. you thank you, concludes sir. today's call. all attending

your a disconnect wonderful may lines day. You and have

General Dynamics (GD) 28 Oct 202020 Q3 Earnings call transcript