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spk_0: day ladies and gentlemen welcome to the see a second quarter conference call he advised that this call is being recorded i would knowledge turn the meeting over to andrew out of it could go ahead
spk_1: good afternoon everyone of thanks for joining us before we begin i'd like to remind you that stays remarks including management a book and answers the question of campaign forward looking statements is bothering to be able to represent their expectations as of today november ten wife twenty to and accordingly are subject to change that statements are based on assumptions that the not materialize in are subject to risks and uncertainties actual results may differ materially a listeners akashi not place undue reliance on his the to state a description risks factors assumption that may affect future result he came to to annual and dna the billboard corporate website and our by islands with the creative security as into athlete are and the us securities exchange commission on at car on the call me this afternoon or now she's president and chief executive officer and sonia break our chief financial officer after a marsh remark and sonia will open the called questions for financial analyst that the conclusion that that segment with open the line and members of the
spk_2: let me out on the call physics math
spk_3: enter a good afternoon everyone joining a phone call
spk_4: we have strong performance in the second quarter lead by double digit growth and civil and sequentially better results than percent well have delivered another quarter of double digit revenue growth and health would hire profitability we had heated security future with nearly one point three billion dollars total orders or record ten point six billion dollars of adjusted backlog had one point three times book the cells ratio it's civil we make excellent progress converting are large opportunities pipeline into seven one hundred and fifty one billion dollar the borders
spk_3: resulting in a one point four eight times book to cells ratio
spk_4: that has especially impressive considering net revenue is already percent higher than last year or include long term trade agreements would airlines and business aircraft opera years including a new fifteen year pilot training and operations screen with with quantify one the world's most renowned airline and like the and name synonymous with safety
spk_3: well for secure trade agreements with virgin australia just smart airline dhl air you pay an american airlines
spk_4: demand for or flight simulators was robust with eighteen sales and a quarter we saw another five for play at actually bring our total here today tallied the twenty nine the general order which hold another five or flight simulators or total thirty four sales since the start of the fiscal year several financial and operational performance was also strong and a second quarter you double digit growth across all metric we deliver ten full flight simulators and a quarter an average trenton printing sorry utilization of with sixty six percent up from fifty three percent last year
spk_3: this reflects the air traffic recovery and psych reason and a measure of summer she's nally
spk_4: commercial aviation train them and anti america continue to be very strong why europe was she is simply lower on a sequential basis in asia the reopening of japan has been a positive catalyst but the regional overall remain well below pre pandemic levels you to the ongoing travel restrictions and china and business aviation training a man could pay to be robust throughout our network reflecting a high level of pilot trying to sports business aircraft by activity which has shown find the stabilization that approximately twenty percent above pre pandemic levels in defense as we've been saying for some time the earliest spines of our progress towards a larger and more profitable business is order and paper and testament to that this past quarter marks another step in the right direction fully booked orders for training and mission support solution value that five hundred billion dollars for a one point one three times book the sales which marked the fifth consecutive quarter that this ratio has been above one and situation
spk_3: with a book the fills ratio of one point three three times on a trillion twelve month basis
spk_4: what else the seine higher order a take replenishing are backlog with you and more profitable defense contract the there's quarters this quarter reflect our capabilities across all five thousand face to me in the air domain we signed a contract with p i feel air space for the t one eighty of van people flight simulator the italian air force and we batted at our relationship with lockheed martin for system trainers and modifications evolving she won thirty platforms a key tenet of our strategy is to develop strategic relationships with platform williams and these agreement in addition to our recently and else and more you would bowling for global collaboration are notable signs of progress and the land of aim we expanded our capability with a prototype development award under the us army soldier virtual trainer contract a component of the synthetic training environment as a soldier virtual traded contract as wiki continued expansion of synthetic training environment with a platform to empower soldier like trent the fans also want to contract and see the with the platforms and system training contract to support a royal australian navy
spk_5: and this program is tricky just be significant in the context of australia's defence modernization primary in light of geopolitical tensions in the indo pacific region
spk_4: on your five year agreement will be supporting your clutter training transformation of royal heir the navy as bad mariners across for see platforms on fight in port and the or leverage in our experience training marine years worldwide including a us navy on multiple naval aircraft platforms bridge training for a literal littoral combat ship and the us army maritime integrate training system and the space and fiber domain we receive additional word from our space and michelle the best customer along with fiber technology updates on our core platforms and systems are very customers within the us department of defense are you any caught combination of experience digital technology and subject matter expert he's also provided new opportunities quarter which repeat customers for prototype development they included authorization from the airforce research lab to develop and demonstrate innovative mission effective unmanned aerial vehicle capability to the with man on man teaming along with an aviation mission planning prototype for a sensitive customer go for us national defense priorities and leverage capabilities across seas business units our financial performance for defense and a quarter improved sequentially consistent with our expectations this performance is a result of a heightened operational focus and the pace of the challenges will we highlighted last order namely the prevailing supply chain and labour edwin and order to leave all of which are pervasive across the defense sector and broader economy
spk_6: with that are now turn the call oversight hill provide additional details about our financial performance study thank mark and good afternoon everyone and celebrated revenue of nine hundred ninety three point two million dollars was twenty two percent higher compared to the second for your last year adjusted segment operating income with one hundred and twenty four point seven million dollars compared to ninety point seven million dollars and the second quarter last year and quarterly adjusted net income was sixty five sixty one point five million dollars or nineteen cents per share compared to seventeen cents in the second quarter last year we incurred restructuring integration acquisition cost of twenty two point six million dollars during the quarter the leading mostly to feel three harris military training and air center acquisition net cash provided by operating activities of quarter with one hundred and thirty eight million dollars compared to thirty point nine million dollars in the second quarter of fiscal twenty twenty two free cash flow with the hundred and eight point four million dollars compared to nineteen point four million dollars in the second quarter last year the increase was mainly due to higher cash provided by operating activities and more investment and non cash working capital he usually pay the higher level of the investment and noncash working capital accounts during the first half a year and tend to see a portion of these investments versed in the second half capital expenditures total sixty eight point six million dollars this quarter but approximately eighty percent invested in grow to specifically at past the to our civil double training network to deliver on the long term training attract in our back off income tax expensive quarter with fourteen point five million dollars for an effective tax rate of twenty four percent which just hired and our annual outlook the twenty two percent which remains or expectation going forward arnett that position at the and in the quarter with approximately three point two billion dollars or net debt to adjusted ebitda four point one seven times that he added a quarter the completed take back net debt to adjusted ebitda of below three times by the middle of next fiscal year now turning towards segmented performance and civil second quarter revenue with up forty percent to five hundred and seven point two million dollars compared to the second quarter last year and the just a figment operating income without sixty percent to one hundred and four point four million dollars versus of hacking quarter last year for a margin of twenty point six percent are stronger year of year civil performance with mainly due to higher training network utilization and simulator deliveries and we also integrated into a result of beer center results which represented approximately seven percent of civil revenue and a quarter and defend second quarter revenue of or hundred and forty two point four million dollars with up six percent of it's huge you left here adjusted segment operating income with eighteen point four million dollars but a quarter down from there and twenty six point seven million dollars in the second quarter last year the revenue growth and from higher level of activity on programmed while the lower adjusted segment operating income reflect higher costs associated with supply chain and labor shortages partially mitigated by or cost reduction initiative and then healthcare second quarter revenue with forty three point six million dollars up from thirty four point nine million dollars in cute you last year mainly due to increase failed the patient simulator adjusted just a second operating income with one point nine million by them a quarter compared to a lot of one point three million dollars and shoot you a last year with that allah
spk_7: market that the way forward
spk_8: thanks idea
spk_4: the things that we saw during the second quarter it gives them the confidence to reaffirm pope or fiscal twenty we twenty twenty three outlook and a long term target our i'll look for civil remain strong with industry leading positioning enabling us to grow significantly on the commercial aviation marker recovery and beyond or less two years we've expanded our reach capabilities to better serve customers while significantly improving our costs are we expect a rate of civil commercial aviation printing a recovery that continue to be driven in large part by the eventually easing of remaining travel restrictions especially in asia
spk_3: where china rebates a large component of any global recovery scenario
spk_5: a potential recovery
spk_3: in china would also be expected to lead to further recovery for flight simulator sale and on the a macroeconomic from watching the global energy situation closely and perfectly in europe would respect operating costs which have already increase across hard at work and the potential for impact of travel the there
spk_4: in business aviation the consensus view at the recent and be a conference but highly positive a week continue the strong demand for pilot training in response to market the ban we are you training about battery coming online include our new business aviation training center in las vegas which opened last one and singapore which began operating this month but the second half of the fiscal year with festival to grow faster did it did in the first half and we waited more to the fourth or we expect to deliver a higher number of for flight simulators in the fourth quarter and i have a higher number simulators or if you come online in our train network in addition to quit to go or share of even trade market and expanding our position in digital play services way to festival to maintain its leading share of full flight simulator sale and to deliver more than forty five foot like the layers the customers worldwide this a lot from our previous outlook for forty in defence are sequential growth paired with the thing you can get bookings and improve backlog that we're experiencing gives us confidence or stronger near term for phone in the last two years defense has become the world leading pure play platform agnostic training and simulation business well positioned to address larger more profitable and more comprehensive programs across all five battle space the me work closely aligned with national defense party focused on your peer threats and he increase the for digital immersion base synthetic for them were uniquely positioned in this regard being able to draw directly from seed innovations to the commercial aviation stimulation anymore defense represents a secular growth market percy as the sector is in the early stages of what we believe will be an extended of cycle driven by geo political realities and increased commitment to the defense modernization and already is the early indications our success have been ordered leading up to build a more profitable backlog what bidding more and were bidding larger and what i see ahead is highly encouraging what a pipeline but multiple hundred million dollar plus program and the number of billion dollar plus programs that were getting over the next three years as we replenish our backlog week spent defense was strength in the next couple years so low that will digit percentage of adjusted segment operating income margin profile currently active business proposal awaiting customers and stand at approximately eight billion dollars which is nearly double the amount outstanding three years ago looking to the remainder of fiscal year for defense we expect the current widespread macro economic headwinds including supply chain and labour challenges to persist for some time and that order delays will continue to be a factor or focus on execution and weren't confident in our expected stronger second half performance which we expect to be substantially waited to fourth quarter underlying issue is or expectation for select the late program award to come to fruition and that will be able to execute er programs and backlog we also expect and partially mitigate his head with with internal cost reductions that efficiency which are ramping up toward the end of the fiscal year and in health care we see potential for more value creation as begin share in the healthcare simulation a training market and continues to build on it's growth momentum and increase possibility in terms of our capital allocation parties we've concluded a heavier than usual in organic growth and best the cycle which spanned last two years as we seize opportunities that are disrupted market to enable see a to become a bigger stronger and more profitable company for the future
spk_3: we're not concentrating on organic investment that are made in lockstep with customer demand or autofocus are reducing the leverage and that's sonia indicated we're confident arm the debt debt debt suggested he did not ratio will decrease the below three times by the middle of next fiscal year which at that time with further increase our financial flexibility these belgian border directors are autofocus on reinstating and prioritizing return of capital the shareholders on a timely basis
spk_4: which is a cornerstone of our main capital allocation bird
spk_9: in summary
spk_4: the overall strength that we saw on a quarter and our current expectations for the balance of the year or what allows us to reaffirm our outlook for mid twenty percent and solid it it and for segment operating income growth this fiscal year and to maintain our alert long current target of a three year he appears com
spk_3: found growth rate in the mid twenty percent range with that i thank you for your pension that word out really fast request
spk_1: thank you mark operator we doubt be pleased to take questions from financial analyst
spk_0: thank you for analyst wishing to ask a question or comment track the one followed by the for on your telephone you hear a three tome prompt to acknowledge your request if your question has been answered and you would like to withdraw your registration please press the one followed by this three one moment please far
spk_10: first question
spk_0: he first question has a cabin chang as see a b c
spk_11: that that thanks for taking my question like maybe just the the first one here i believe the us department of defense it issued a memo two to two or to contractors for for a good old equitable adjustments for cost overruns just given to unprecedented inflation and and i believe fear he has has applied for some some of these adjustments to maybe help offset previous inflation just just wondered what were that's to get one if i'm correct to know were that sits today and and if you start to see maybe some of those adjustments show up either the quarter that just ended or or maybe the back out with this school year
spk_4: well i can certainly confirmed it as a lot of effort going on in that very guard regard as kevin whether whether it be direct representation by dollars to lawmakers a bit of the with capital i can tell you to let that and true you know that combined efforts that we do with industry association and a letter have gone out and the and and i like fully expect you know action to a crow there yet when it happens when it yeah no i really can't tell you but i've always been of the view that we've shared this the unless call that know we expect that we will have some measure of mitigation of somebody costs cost overruns that that have occurred we've made no real we were take with taken no benefit of that so far but i believe spent in the future to will get some
spk_11: okay that's er that's offered a job just my second question ignore on on the on the last quarterly call email you probably be provided a lot of detail on on on the problem contracts that that resulted in the right down one of them on the the legacy see a defense contract and i think one of the issues was just the the expected renewal of her contract what was maybe not coming in as fast as originally anticipated which which may be drop some of that right down to to any update their terms of the the the bidding process for that a movie your your your confidence in in in in in being awarded a renewal
spk_4: well i'll tell you that the rfp his out and we are bidding on it so is that the nature of the contract has changed i think it's a lot more track in terms of a contract so much will say it will have a very attractive been where the the it i have high hopes but get a were very well be very prudent the that regard can add and ago at the what they don't tell you which which is very yeah got a testament to what i'm saying about you know in terms of changing nature of this for a contract and other that if you take what that contract looks like it's change from really be a lowest price tag the several contract and we saw usually to now a contract that based more on better value that plays very well to see straight a meeting not just around cough and and the wee we bit it is for the terms that are in the contract with include your specific banging around utilization rate so the risk that we saw in the euro fell on that contract where you know we basically bit at a certain level you like this and the knee the a
spk_3: later should have made it was much higher we would have that rich anymore a this been completely taken out of the original or pile the contra
spk_11: that's good yeah i'll leave it there that you very much
spk_0: thank you
spk_12: and keep the next question comes from bodies moon of the ammo people had thank you good afternoon on just one quick clarification from
spk_13: of did i hear you mention that shrivel you expect the growth in the second half to exceed the growth from the protocol from my you been expected the got the guidance
spk_12: yeah it is very very okay okay forget the quite stronger again i think what you're expecting maybe in the beginning of the year what what what's driving that specifically in aviation i mean you have some decent amount or interview today than it looks like can
spk_4: sequentially in the second quarter we'd had a big job you're in a monument season on jambo it's say in the second guessing your first like a asian market coming back little bit stronger in their area that gasify go on other guy them just curious about down the perform other i would have okay okay me too trip to say look at it as a general rule and places are consolidated the fia element that we give them for the back and it slightly cheaper to normal and in a particular is what we've done by civil it okay we're not we're not yet in the normal environmentalists have said in the calls you the china still really you're not reopen the for that put a lid on things there but ill you what you're seeing in the back half is as a person will take years seen the benefit of all the sunlight or orders that would find this year we've had more hundred per share more is they're very happy see that and so we're seeing a lot of of that or okay translating into deliveries and a bad happened is that him in the in the fourth quarter of a i am very high visibility on that plus law ramping up capital that we've already deployed in in terms of sibling years in in in both the commercial business aircraft train networks and yeah specifically else had mentioned in my remarks you see that in the ass muslim opener you las vegas business aviation training center a you see the so you'll see if impair your show very shortly
spk_12: open or single organization training center so all those factors that and in the order and take a look at the order of take again this quarter of one point four eight times go to sell the civil on top of revenues that or forty percent higher security a your reader so i think that fault that is watch translate into book thing okay great one one question on a defense sorry if i may a we get lot of the of of
spk_3: kind of question from investors are there and the backlog other punk rock like this to a legacy contract that you have last quarter where you are still expecting renewal maybe contract that i'm not performing pure expectation and you're still expecting a you will or is this
spk_4: again all behind us like this book look at of you're referring to to the charges in a big yard and we recognize in the first quarter
spk_3: africa has said that the time yeah i really see those as unique and one off and nature it really not typical of the risk profile of our business and i've been as you know very well i've been at the business know seventeen years and it's a first time that i've ever seen you know charged like that hit you know ah
spk_4: our piano in the point like that it's not that we don't manage programs that are watch other we won't leave when hundreds of pull get some of our march others but we managed them well so obviously a live event like this forced to you you'd you'd be foolish not to go back and in even in hampshire new level of scrutiny of course
spk_12: we've done that i had i been part of a lot of that but yeah i specifically to your question i don't see any similar risk in our backlog program certainly are the ones that we see at that time and at the give you some more color if i look at your terms and conditions of contract that would begin these days i was giving
spk_0: examples and after their and the discipline that word that that were applying to those big like it gives me a lot of carthage in our current leadership team and expected margins that will be able to execute on those contests
spk_14: okay thank you
spk_15: thank you the next question have them james mcgarrigle are the sea biscuit
spk_14: hebron ah thanks to take my question i had a quarter of snow on
spk_4: the increase on the to defend backlog and somebody yeah new contracts you're putting on give any protection for any potential supply chain issued on the go new contract i think you know supply chain of the guy i turned out to a wedding into going to get get get better and you know it supply conditions were to percent you don't just
spk_3: fit for another year or two years of credit we see any risk to margins without a new contract that you're putting on our there's some protection kind of being built into those i knew agreements are you working there right now
spk_4: well you could be sure that the contract that would be the now take into account the situation at least that we see now including you know issues as continue the inflation that the levels that we've seen and and of the customers by large are you know i understand that reality so yeah just a contract that i reviewed the other day where and have a fairly major contract where you're typically as in previous contrast to what you to see you as see fuel begin element that will cost of there but yeah with the end but the with the price of fuel that the weeds escalated the the unpredictably of it
spk_3: the customer sound don't want us to bid at you know to cover cells can we we'd been that at very high rate of copper south so what you see specifically that attract which is a red think a very good example kinds of things that we see his wee bit it basically with that component as a naughty see order of other your rent costs so it means it takes it out completely you try with it
spk_16: the totally enough which is he happy and you know by large
spk_14: as made a previous had shows pack mother's that we're seeing his ship a contract that turning the ones were bidding on going from really you know lowest price wins though what's called lowest cost technically that will contract the best value a the united states defense department so i'm pretty confident that
spk_17: you know the first of all that the program that we're winning that heard a backlog for a year is certainly last five quarters of where we see this strong backlog increase our at profit to be levels of support your are get this below double digit profitability and we will either that point up and will execute them
spk_18: i'm at that margin papa
spk_4: appreciate that and on you know moment of questions on the that the civil business and on a recovery there's obviously predicated on august i recovered to prevent democrats and the i know you don't operate in china but i'm your age of businesses are affected by with by what goes on in that country so
spk_3: in other countries as your public policy affected are you recovery are you kind of managing do that uncertainty
spk_4: going forward what i think that we start this usurped by saying is it would you look at the margins that were printing ray now in film will without your china in asia market really been back and we're back to margin is that are near prepare them a level you know if you're twenty one percent and that what you're seeing an ad at all other hit a lower level or revenue that we shall prepare them that you're showing you know the cost savings that their that was taken out out of our network coming to fruition so expect as a recovery computers were progress which are fully expect that it will expect murder for a of further margin progression that regard from but but going back to said get your question the way china effect
spk_3: us is historically we've had a very high market share of selling simulators in china
spk_14: it looks like that that will continue the market is all right now so we're are selling a lot of similar china right now nobody is
spk_0: as i look at how else does that how the hell else for that china's choice perfect of is that all over training center in asia pacific the anchor customers that we have that training those location there are a lot of their flights are to and from china every day so that you have obviously effect yamato fly
spk_19: activity the ummah and there for about a twenty accurately and that's why use that's where does lot of expect recovery that river
spk_20: there are created an alternate line over thank you very much
spk_19: it
spk_21: thank you the next question cut some corners gupta a scotiabank please go ahead
spk_19: thanks operator and a good afternoon at one want to do first
spk_4: i'm trying to make sense of the defense as to why for a second quarter which was i think eighteen million dollar still kind of down hello the normal levels that you had before the last quarter
spk_22: job and i understand the you have supply chain issues you mention and the labor issues and some out of delays and all those things but would you say you know like even if it's trip out those issues
spk_4: the contract adjustments that utopian that spoke you one that would have a stole a all like showed up at the new margin level and that's so cute do and that should continue i'm like i'm just trying to understand like how our defense as like and go from eighteen and que tu to to are like significantly higher number seven que three you for well i think little their a survey thing aren't you tube of llamas with as respected the image as they said it would be and on the last cause sequentially have led quarter of course the justice for the discreet charges that we saw into one of course which aren't as i said one and look we're not alone in his like our peers we considered that we continue that really affect them very real labor and for play challenges across the industry
spk_19: and what people are men and well
spk_11: but as well we use the site or ordered a award delayed on ordered takes a will continue to work the and would it specifically with guards to labor supply changes the we were managing and of course they affect our company we see these a baking by the year at not going away totally by
spk_6: certainly a beating us and that's where you're seeing the that push specific orders that we coming in that we have high visibility on
spk_23: it gives them the confidence that it'll we can achieve the ramp up in the in defense numbers in terms of profitably in the third in especially the fourth quarter that point one thing that i think yeah like me have be excited about as you ordered pick which cookies be very strong you to get by quarter
spk_6: years on you know book to build hired a one with year twelve much trailing your book to bill and of that the higher than one point three that that really points to strong and improve performance in the future that that sulfur mark thanks so much and have one more for up perhaps with sania
spk_24: i think in your comments you mention that you want to reinstate shareholder returns or time so a like two part question they're like a does that mean dividends or buybacks and would you have to wait until the leverage ratio going down below three times before you read stirred beeping
spk_0: hill as we mentioned our first priority is to do love her and that we continue the on track to bring our let that adjusted ebitda down to below three times
spk_25: by mid next fiscal year and then we believe will then be in a position to consider return on capital return of half a the shareholders to june two to really speak to the forum
spk_26: but with the added you know once we we she'll reach kind of a normal life balance sheet than and financial flexibility
spk_25: you know will will will turn to return on capital to shareholders
spk_26: thanks honey
spk_25: thank you
spk_4: and next question cause some chrissie like of morgan stanley could go ahead he good afternoon everyone hello
spk_3: hey i'm mark
spk_27: circling back on defense you know you tube highlighted some of the puts and take their but keep provide a more detailed bridge on how you get from four percent margin where the businesses today and how you get you a high single digit are potentially load double digit at some point how much of the margin expansion is a function of more march
spk_16: and contracts rolling off or better
spk_4: and or better volumes absorb some overhead or anything like that on any more detail would be appreciated because it seems like there are a lot of moving pieces in terms of that recovery
spk_1: well i think the coupon for exactly that when you said it's that your elite if if you're that business and we were taught my for while we just come up before the five quarters of you know book to build hired and one with the past three years before that we were both to build law one so we're running out about
spk_25: a of inherently inefficient okay and by itself call it affected us we we are working through labor supply chain supply chain challenges that the industry itself is faye faye things so for us it's really rolling off contract that are
spk_28: a lot more a lower profitability
spk_3: replacing them with contract that we've been winning again good going back to the ordinary day and the orders that we're winning are a creative to the objectives that we have of
spk_25: although that would you to return
spk_29: and on the we've done a great deal i the
spk_23: pretty i'm sorry and so severe look again pick i said continue to what ordering paid for or against the one to watch same thing is for if few words now and order think is very good were bit as if they were bidding more we're building a larger
spk_6: in just look at yeah we're without a outstanding bit and proposals them or eight billion dollars which is a very substantial increase so i'm all those other factors that are are going to be that bridge as you're looking for
spk_25: i think mark would you quantify on how much of that lower margin defense revenues rolling off this year it needed to help us with modeling
spk_0: we can be that specific really at the time so you at
spk_30: no i think that to leave it to to a with the we've said already
spk_31: great and if i could add have one more me the on a commercial on you know you'd be thinking of you restructuring cause the ah
spk_28: going forward you share the magnitude of what these costs with a detailed that year and also of when you think about the once you've fully realize the cost benefit of these action how we should think about incremental margin
spk_30: so pretty and i'll take the fun but the reception caravan as and it add that concept behind it and didn't into one and the as you can see it it you know being realize already as we pietro go to the civil margins regular he had committed to seventy million bucks a recurring structural day
spk_32: i think that we see it with the it in their adult margin what what buffalo the counted really the integration cause of the major acquisitions and on other three harris military training that will be trailing off in the second half and an air center will continue integration for the next few quarters
spk_4: great think it mark they get on yeah thank you the next question custom anthony valentini of goldman sachs or guys that the up with our area
spk_3: no good thing three
spk_7: i just wanted to focus on our local segment for a second on look it up a better slightly year old flight
spk_23: the simulator deliveries were flat quarter of a core the utilization with down and as left and you leaders in the network yeah revenues rough six percent sequentially so
spk_33: just like help to bridge that on it
spk_4: well i think maybe send you this morning
spk_28: color but i think that said in the past that the
spk_30: first home margins and utilization aren't perfectly correlated
spk_34: if you feel lot of mixer not all similar your orders are created equal either
spk_35: that they can depend quite substantial i'm one quarter of one quarter to next to specifically were for example if the the data supplied the by with directly by the early as an example
spk_32: so maybe funny one expand on into spent on that yeah absolutely so you know as a fight the the deliberate thing flattening out and public back with a little and when he even work a one quarter and the economic mattered in terms of the of the training as well so you know left in an alley under than the that by than the commercial flight
spk_0: that have the margin and and you vote for the sims and the network while the absolute number of them good lower as we did a bit of a rationalization the you wish it drive the revenue the which as simulators are active or revenue generation actually went up quarter to quarter
spk_36: okay that vocal and from the the mix can comment on the about of the wigley that a wide body of the amount of will lose the you as you get another body bush's narrow
spk_3: we don't actually bring it out
spk_4: appropriate zone where people would follow up on yeah i don't think that but only that we don't have actually the data we don't we don't bring it out that with yeah we we don't have fairly break it out that you can you can assume that it's mostly narrow body okay great and then last one on the to me is how much is the revenue and and at the y contribution in the corner from faber
spk_36: seven percent revenue get the never return civil really have an adequate about thirty five million dollars than and a pretty strong a creative margin
spk_4: to the been great thank you so much thank you
spk_3: the next question i'm michael cuddyer of of dissolve a go ahead
spk_4: i'd argue particular question maybe just on the announcements with the quantities and virgin that be expect burger outsourcing of training across said the airline industry given that they're facing higher costs right now and in other parts of their business
spk_37: yeah
spk_0: i think this is the continued good the martha good time for live in the future for out or things as we predicted all along it's just the it's just the natural evolution builders we created the real only real global third year of third party
spk_38: way to and be able to do training and we're we're we're the largest trading network in the world frame or a million hours them
spk_33: of training a year so we provide new synergy there and huge benefits to airlines the what to do it so yes i continue to see more opportunities out there and we announced the big one like likely your time but want that for the lot that we will do overflow training and as that's been a factor as well and we're putting simulators
spk_39: out there on contract to do just that and when we do that we get long term contracts that's going to be a good good for toy i cook idiot i continued to see that as being a trend going for
spk_33: perfect thank you that's good color and maybe just been on the expressed contracts i saw bowling at during the industry came out and said that the going forward they have no longer appetite for fixed rate programs or maybe just your opinion if that in the industry elspeth in the shadow the share that view in the industry navy stepping away from that both
spk_5: look i like i can only comment about us you a we bit on the contract that fit our strategy and the the capabilities that we have been the but a lot of them are fixed by the for private contracts and and we're good that exceeds that he those kind of contracts are listed now we're standing the
spk_40: what happened in that specific leave a one off reasons last corner have a very good track record billion over multiple years and and be and i'm very confident that we going to contract
spk_33: their are from price in in length in future and and and and i think going back to what i'm saying a while ago and really center what we see specifically in the us market is a shift to best value contract and that that is very positive for ceo year with our specific different different
spk_3: creation and a market stall and ethic the laughing you say is that and they began in previous of arrested previous question they the government doesn't want to created an environment in which case you know the risks are well managed that was an example of a fuel prices that taking that out of the equation some of the so i think that in summarize it to summary your will continue to bid on contract and i and when picks for price or not i will execute them are quite often for the thank you appreciate it
spk_4: and you the next question comes from a lee of a golem brown please go ahead
spk_41: i beg your pardon
spk_42: i've difficult occasionally of civilization right
spk_1: clinton decline
spk_0: selling one percent black and sixty six is that declined get the now the cold better there's some other factor the vulgar mainly finale
spk_43: it now okay that okay and interval by looking longer term that that you live nation later in part of the club again and the seventy two into that expect to get back to that try to read longer term or you could be higher or lower
spk_4: head to the reason why not them were operating you know the us that much higher rate than now right now
spk_5: and soul of their know there is no natural reason why that would publish really going to be a cop a a year
spk_4: you don't blink has it all with his to the amount of wind done by by the airlines and business aircraft so and that's a very high rate as i say the of the circus stabilizing a flight level of play the activity about twenty percent over particle that period and and i see that is he doing so i the is been be pretty good and and historically i think the reason i use that example for business aircraft is usually that own that old be a more utilization by the very nature that you know we we don't train as much you know a lot of back end of the clock the like and bills aviation so inherently brings utilization level
spk_43: don't even know it's still very that revenue
spk_44: okay thank you
spk_4: operator a girl members of the this move to a community of for their questions and now we like open the line the media or in question to review
spk_45: oh thank you as a reminder if you'd like to register a question or comment is press the one alibi by the for on your telephone once again to register question or comment on one for one moment please
spk_4: the first question custom for stephen of a lot of us can again please go ahead labels on this about i'll miss the diplomatic kill am the
spk_43: live off of a group only because of the fall fall on hong kong campbell am melissa gonna get so she did was hilariously these uncles and way as imagine if know it's cool that if you getting at my the this thing than that and i'm not a goofy the of yes you
spk_4: not on a poll on work when the singer and i've been that are now on i'll post a bullet one basket of a lot of us as benefits analysts and does it have good men feel under the table and don't of my best show on the dog that it done and will is assumed that had up for fun the martha shows and all of the huge is what have found that the euro zone know what the
spk_28: wow so blue or do it on my that someone the barn the don't the show the the at the volatile come out with a come on that are point can cannot just given a a seeker or coach you
spk_43: piano or market a cab come out the federal he you get picks on what will have enough muslim officer the
spk_46: okay am to take them is it is a single of a scan sonar glanville montages point they may i kiss or quarter pound a day is and and is as an attempt to like trash that could young man and please ask of that he he a idea from a gag gift is shazia one wire
spk_0: each shot of the character that on they offer so
spk_1: a nice little sean is that don't have found it on our on our copy d v d kill needy people who is this the on the left field of play that's the go that far off get their law made a gasket air allocated for the on the of the it's what watching we did the dirty that they feed on done or said
spk_0: all costs of a much new you that pick they all work comment the
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