Michael Smith - Director, Investor Relations Ken Hunzeker - Chief Executive Officer and President Matt Klein - Senior Vice President and Chief Financial Officer.

Bill Loomis - Stifel Brian Ruttenbur - BB&T Michael French - Drexel Hamilton.

Good day, everyone and welcome to the Vectrus Incorporated Second Quarter 2015 Earnings Call. Today’s conference is being recorded. For opening remarks and introductions, I will turn the call over to Mr. Michael Smith. Please go ahead, sir..

Thank you, Debbie. Good morning, everyone. Welcome to the Vectrus second quarter earnings conference call. Joining us today are Ken Hunzeker, Chief Executive Officer and President; and Matt Klein, Senior Vice President and Chief Financial Officer. Slides from today’s presentation are available on our Investor Relations website, investors.vectrus.com.

Please turn to Slide 2. During today’s presentation, management will be making forward-looking statements pursuant to the safe harbor provisions of the federal securities laws.

Please review our safe harbor statement in our press release for a description of some of the factors that may cause actual results to differ materially from the results contemplated by these forward-looking statements. We assume no obligation to update our forward-looking statements.

Also, we’ll be making reference to non-GAAP financial measures during the call. We remind you that these non-GAAP financial measures are not a substitute for their comparable GAAP measures.

You can find the non-GAAP reconciliation and other disclosures in our earnings release and in our presentation slides, which are publicly available on the Vectrus website at investors.vectrus.com. At this time, I would like to turn the call over to Ken Hunzeker..

Thank you, Mike. Good morning, everyone. Thank you for joining us on the call today. We are excited to be here to discuss our second quarter results. Before I get started, I would like to highlight that on June 13, we celebrated our 70th anniversary of incorporation.

We recognized this occasion by hosting anniversary events at each of our locations around the world. Please turn to Slide 3, where you will see just one example of how our employees marked the occasion. This is one of our teams in the Middle East forming a big 70 to mark the day.

Along the bottom of the slide, you will also see a set of posters that commemorate our participation in key milestone events for the first 70 years. These range from the Distant Early Warning programs above the Arctic Circle to the reception operations for equipment during the final withdrawal from Iraq.

Each of these posters were sent to our programs to raise employee awareness about the history and to kick off the platinum anniversary events. Please turn to Slide 4. Finally, we ran a series of historical vignettes created to celebrate our historic history of supporting critical missions all over the world. Here, we have featured 2 of my favorites.

The first feature is nearly 1,000 faces of the most important aspect of our success over the years, our employees. The second, on the right page, is a very brief description of the legacy work we have done in our service lines over the years.

The Distant Early Warning line program was located above the Arctic Circle and was the precursor to successful programs we have participated in like Tax Walkup and On-Decks Walkup.

An interesting fact is that we have provided exceptional results for our customers from the subzero Arctic and Antarctic climates to the torrid desert heat of the Middle East.

This is just another example of our ability to perform difficult work in challenging environments anytime, anywhere and under any conditions is something we’re all very proud of. The 70th anniversary was truly an exciting and important milestone for our company.

I’d like to underscore that it would not have been possible without the hard work and dedication of our employees all over the world. Please turn to Slide 5. During the second quarter, we delivered strong results that included revenue of $310 million and a diluted earnings per share of $0.56.

We succeeded in achieving positive year-over-year adjusted revenue growth of approximately 3% in the quarter after many periods of decline. We generated $27 million of free cash flow in the quarter and paid down over $11 million in debt, $6 million of which was a voluntary payment.

Our long-term strategy is yielding visible results and we are seeing positive trends for our business. We continue to see stability and more predictable revenue flow in our non-Afghanistan business, which we refer to as our core business. Our core business revenue in the second quarter of 2015 was $264 million, which is up 15% from last year.

Core business was driven down in part by our Turkey-Spain Base Maintenance contract, which reached full operating capability in the beginning of the second quarter. Our Army Corps of Engineers Information Technology support services contract also contributed to revenue in the quarter and achieved full operating capability in late July.

Overall, we are on track to achieve at least 10% growth within our core business in 2015. Contracts based in Afghanistan declined year-over-year but increased 5% from the first quarter of 2015. Afghanistan-based programs are expected to contribute approximately $160 million in 2015. Please turn to Slide 6.

Before discussing the Vectrus-specific environment, I would like to comment on the global environment that affects the market in which we operate. Regarding the Middle East, there is no question that it continues to be a dangerous place with rapidly changing and emerging threats.

Recently, senior leaders in the Pentagon have commented that the Islamic State of Iraq and Syria, also known as ISIS, represents a persistent threat in the region. Also, it has been noted that the ISIS threat has evolved in Afghanistan as being framed probably operationally emergent.

The administration continues to review our nation’s approach in the region with their military experts to decide on the appropriate way ahead. It is worth noting that the administration’s plan to withdraw U.S. troops in Afghanistan was formed before the emergence of the ISIS threat.

However it is resolved, Vectrus is well positioned in the Middle East and Central Asia to respond quickly and efficiently to the needs of the customer we’re extremely familiar with in a region we’re very knowledgeable about. I would also like to mention that in June, U.S.

and Spanish officials signed an amendment to the nation’s defense agreement that will change the deployment of the U.S. Crisis Response Force at Morón Air Base from temporary to permanent. Officials note that the crisis response task force protects U.S.

diplomatic personnel and facilities in Africa and supports this effort to stabilize an area of shared concern. As a reminder, Vectrus provides the full spectrum of day-to-day base operations and maintenance services at Morón Air Base in Spain and at several locations in Turkey.

I recently completed a 10-day trip to Kuwait, Qatar, Turkey and Spain to meet with our employees, customers and senior leaders, something I do on a regular basis. We’re extremely proud to serve side-by-side with our customers in these important and strategic locations.

I could not be happier with the performance that we’re delivering day in and day out in these programs. I see tremendous opportunity for Vectrus to expand our current positioning through the continued focus of being our customer’s first choice and most trusted partner. Next, I would like to provide an update on the Vectrus environment.

Contract re-competes are part of the normal business cycle for all government contractors. We have some updates on our major re-competes that I’d like to discuss. Our largest re-compete on a revenue basis is the Kuwait-Base Operations and Security Support Services program, also known as K-BOSSS.

Our performance has been very strong in this program, which is demonstrated by our exceptional government ratings. We were previously in contract through September of 2015, but subsequent to the close of the quarter, we were awarded a $221 million extension to the current contract that runs to March of 2016.

We submitted our proposal for the K-BOSSS re-compete in May. Our status of APS-5 Kuwait and Qatar contracts remains unchanged from the first quarter. The contracts will be consolidated into a single solicitation, with anticipated proposals due later this fall. An award of the contract is currently expected in 2016.

Regarding our Maxwell Base Operations Support program, our current contract was scheduled to end in the fall of 2015. During the second quarter, we were awarded a bridge contract that runs into May of 2016 and has the potential for an additional two to three-month option periods. The total potential contract value is $62 million over this period.

Our performance on Maxwell has also been very strong as demonstrated by our exceptional government ratings. Our re-competes are a critical focus for us and we believe that we are well positioned to win.

It is important to note that all of the aforementioned re-competes are now likely to award in 2016 and the schedule shift provides revenue visibility for the second half of 2015. Turning to new business, we continue to focus on building our pipeline and pursuing new work.

We currently have approximately $1 million of bids submitted awaiting potential award, but due to the uncertainty surrounding award dates, we have not included any of these bids in our 2015 guidance.

Predicting when request for proposals or RFPs will be released and awards will be made is difficult given the number of variables that influence the outcome. It is not uncommon to see delays in RFPs and award activity. However, we feel good about our pipeline of opportunities.

And as it stands currently, over the course of the next 12 months, we plan to submit proposals on approximately $6 billion of new pursuits with $3 billion expected in the remainder of 2015.

On the award side, I am pleased to announce that we were awarded the prime positions on three important multiple-award indefinite delivery/indefinite quantity, or IDIQ contract vehicles in the second quarter, which are reflected on the slide. I will also note, we won three additional IDIQ positions as a subcontractor.

These vehicles are instrumental for pursuing task, order-based work for IT, infrastructure and logistics with various government customers. First, we were one of the eight contractors selected for a prime position on approximately $5 billion Air Force Contract Augmentation Program.

The contract has an estimated completion date of September 2021 and this was a great win for us as our first contract augmentation program as a prime contractor. We look forward to continuing and strengthening our long-term relationship with the Air Force and to providing innovative and affordable global contingency solutions.

Second, we were one of 18 large service providers selected for a prime position on the $1.1 billion U.S. Army TACOM Strategic Service Solutions Equipment Related Services contract. Work will include maintenance, repair and overhaul, equipment modification and technical representation services.

The contract has an estimated completion date of May of 2023. This contract is important to Vectrus as it is very similar to the work we are already performing and allows us to serve the TACOM customer as a prime vendor. Third, as we previously discussed in May, we regained a prime contractor seat on the Navy SeaPort-E contract.

Seaport is an important Navy IT vehicle and we already have customer relationships and past performance on the contract via one of our current programs. We have made great strides in a short period of time in gaining seats on IDIQs and additional bids in the works this year.

As a reminder, only specific and qualified IDIQ task orders are included in our pipeline estimates. Now I would like to turn the call over to Matt and he will go through the details of the second quarter, then we will open the call up for questions..

Thank you, Ken. Good morning, everyone. Please turn to Slide 7. Today, I will be discussing our results for the three months and six months period ended June 26, 2015.

The table at the top of Page 7 and 8 reflects the generally accepted accounting principles financial results, which includes the Tethered Aerostat Radar System program and separation costs required to become a standalone company. The TARS program was retained by Exelis as part of the spin and separation costs are a non-recurring cost to the business.

I will address the financial results on an adjusted basis, which we believe better reflects the ongoing business trends. You can reference the appendix of this presentation for the reconciliation of our adjusted results to GAAP.

I would like to turn your attention to the table shown on the lower half of Slide 7, which reflects the adjusted financial results for the second quarter of 2015. Funded orders were $332 million. Orders were down $16 million compared to the second quarter of 2014, but up from $144 million in the first quarter of 2015.

Revenue for the quarter was $310 million, $8 million higher when compared to the same period of 2014. We succeeded in achieving positive year-over-year revenue growth of 3% in the quarter. We believe we have reached a revenue inflection point as new programs offset the Afghanistan revenue declines we have experienced the last couple of years.

Afghanistan contracts contributed $46 million of revenue, down $27 million or 37% compared to the prior year’s quarter. Our core business revenue, which excludes Afghanistan contracts from our adjusted revenue, equated to $264 million, up 15% compared to prior year’s quarter.

Due to the stabilization of our existing programs and the ramp up of new contract revenue, we anticipate growth in our core business to continue for the remainder of the year.

Second quarter adjusted operating income was $10.9 million or 3.5% operating margin, which is $2.2 million or 90 basis points unfavorable when compared to the same period in 2014. Afghanistan contracts contributed $3.5 million in the quarter, which were down $1.7 million compared to the prior year.

This variance was anticipated and is due to lower service requirements on Afghanistan contracts.

The adjusted diluted earnings per share for the second quarter was $0.56 per share compared to $0.81 per share in the second quarter of 2014, largely due to the mix of the business as we diversify our business base and replace the decline in Afghanistan contract activity. Please turn to Slide 8.

I would like to draw your attention to the table shown on the lower half of Slide 8, which reflects the adjusted financial results for the six months period ended June 26, 2015. Our adjusted funded orders were $476 million. Orders were up $11 million compared to the prior year due primarily to timing of funded awards.

Year-to-date adjusted revenue was $570 million, $28 million or 5% lower when compared to the same period of 2014. The reduction was driven by lower requirements and associated revenue in our Afghanistan based programs. Afghanistan contracts contributed $90 million of revenue, down $64 million or 42% compared to the prior year.

Our core business revenue was $480 million, up $36 million or 8% when compared to the same period of 2014. Revenue in the period saw stabilization in our existing core business as well as contributions from our new contracts.

Adjusted operating income was $20.4 million year-to-date or 3.6% operating margin, which is $11.5 million or 170 basis points unfavorable when compared to the same period in 2014. Afghanistan contracts contributed $6.3 million year-to-date, which were down $11.5 million compared to the prior year.

We generated $27 million of free cash flow in the second quarter. Free cash flow was the use of $0.9 million year-to-date. Our cash collections enabled us to pay down $11 million in debt. Our debt now stands at $124 million, which – representing a total debt to trailing 12 months consolidated EBITDA ratio of 2.55 times.

Year-to-date adjusted diluted earnings per share were $1.03 per share compared to $1.96 per share in the prior period. Before I move to the next slide, I would like to take a moment to discuss an important milestone achieved this quarter.

Our corporate team assumed full operational capability of the Vectrus standalone IT networks, servers and financial applications from our former parent company. This milestone removes a major element of the transition service agreement and helps us achieve cost savings in the second half of 2015.

Achieving this important milestone was an important element in realizing our 8% to 10% SG&A improvement in 2015. Please turn to Slide 9. For the second quarter, the total backlog was $2.5 billion, with approximately $700 million funded. Total backlog represents firm orders and potential options on multi-year contracts, excluding IDIQ contracts.

Our backlog continues to exclude the Thule Base Maintenance contract. I want to take a moment and update you on the status regarding Thule. In October 2014, a Danish company owned by Vectrus won the $411 million Thule contract. The contract award was protested by the competition at the GAO, which ultimately denied the protest.

The protesters then filed a protest with the Court of Federal Claims. On May 28, 2015, the Court of Federal Claims entered a judgment in favor of the protesters, which sets aside the award and enjoins the Air Force from proceeding with the contract.

As ordered by the Air Force, the Danish company had stopped work on the Thule contract but has filed a notice of appeal with the United States Court of Appeals for the Federal Circuit. This appeal could take a while, maybe as long as a year, but we believe we have a strong case.

We believe the proposal provided a cost effective and innovative solution for our customer that met all the requirements. Please turn to Slide 10. We are increasing the lower end of our 2015 revenue and EPS guidance as shown in the table.

We now forecast revenue at $1.15 billion to $1.2 billion, an increase from $1.1 billion on the lower end of the previously stated range. Accordingly, the midpoint of revenue increased to $1.175 billion from $1.15 billion. I would like to note that a 100% of our 2015 revenue is expected to come from current programs under contract.

We continue to estimate adjusted operating margins in 2015, which as a reminder, only exclude minimal spin cost to range from 3.2% to 3.6%. In conjunction with the revenue increase, we now forecast adjusted diluted EPS at $1.85 to $2.23 per share, an increase of $0.09 from the lower end of the previously stated range.

As a result, the midpoint of EPS increased to $2.04 per share from $1.99 per share. We continue to estimate free cash flow in the range of $15 million to $19 million. Now, I would like to turn the call over for questions..

Thank you. [Operator Instructions] We will go first today to Bill Loomis with Stifel..

Hi, thank you. Good morning..

Good morning, Bill..

Just looking at the re-competes in 2016, so including the big three ones plus other smaller ones, what would be your total revenues that will be up for re-compete in 2016?.

In 2016, I think it’s – you have got 30% of our business tied up in K-BOSSS roughly. And then you add what we have disclosed was APS-5 Kuwait and Qatar and Maxwell. They all add up to roughly close to about 50% of the business. If the current burn rates hold that would still be about the same number in 2016..

Okay.

And then that’s – there is no other larger ones that will come up initially in 2016?.

This is the big cycle. I think what you have seen in ‘15 we had everything planned to re-compete and award this year. Everything is delayed. So, whatever would naturally come up, which is a lot less material on ‘16 would – could see the same kind of effect and could delay and push..

But Bill, this is Ken. There is nothing else in ‘16. Those are the only – there are some smaller ones, but those are the big three..

Okay.

And then the $3.5 million was that operating income from the Afghan contracts in the quarter?.

$3.5 million?.

Yes..

Yes, correct..

And the $6.3 million for the six months, so why did the – why was the margin higher in the second quarter on that? Did you have more direct labor on the Afghan?.

So, what we were pleased with in the second quarter is we saw a slight increase in our Afghanistan revenue stream. So, we went from about $44 million in the first quarter to $46 million in the second quarter.

And on those contracts, when we see stability, you have clarity on how to perform and how to manage your cost and the outcome was our margins were a little bit better in the second quarter. If that continues through the rest of the year, we could see that same kind of profitability.

If there is a lot of change on these programs, which causes a lot of churns that’s when you can see a slight dip in your profit..

So, now you had sequential improvement from first to second on that. And others that do a lot of OCO revenue have had similar situations, where in fact, one yesterday said they could actually see an increase in the back half.

What’s your view on – because your guidance of $160 million implies some sequential declines in the second half? What’s your views on that? Is that a conservative view or is the client doing something different overseas this year?.

When you look at the year-over-year, we still had a 42% decline from last year. The positive sign, like I said, is we are seeing an increase in the second quarter. The $160 million benchmark for the full year would anticipate further declines in the third and fourth quarter, whether or not we realize that, that’s an uncertainty.

I think that the $160 million is firm and it’s probably in the lower end of the range. And I will turn it over to Ken to give you some thoughts on what’s going on in Afghanistan..

Clearly, we are in touch with our customer. We are talking to all of our leaders on the ground. And as Matt said, we are seeing a lot of stability there. There could be some slight upside there, but we are really waiting till some signals come from the administration to see exactly what takes place. So, we are being conservative there, Bill..

But do you think the revenues for you and other contractors over there being more stable is because we are kind of in a pause from a policy standpoint in terms of there is no aggressive withdrawals or anything going on and until we hear something differently that, that could continue to be more stable than it has been over the last year?.

I think that’s exactly what we are seeing..

And just one quick final one, on the EACs, the fixed price contract adjustments, why was it – I know you had some favorable and both unfavorable, was a net unfavorable, but what’s causing the unfavorable adjustments on that?.

So, the pressure that we are seeing through the midpoint of the year is really on our new programs. We kind of described those as you start up contracts. They are a little less efficient than when you really get a year behind you and we are starting to see some of that. The positive news is our performance is outstanding on these contracts.

The customer feedback is very positive and that’s where you can go wrong, which we are not doing. Performance is really essential at the beginning of the contract. Now, we can focus on the cost in the coming quarters and we expect those programs to generate and contribute the normal range that we have guided to before..

On the EAC adjustments, is that what you are talking about?.

Yes, right. Part of the EAC adjustments on a quarterly basis, we go through our material contracts and do a bottom-up estimate. That created pressure on the second quarter related to our new contracts primarily. And then we expect those to improve over time. We just have to figure out how quickly we can see that improvement..

So, when you decided on the fixed price contracts with the costs, those are – the costs are higher now for some reason on the new ones?.

Yes. I mean, when you think about your phasing in over the next 30 to 60 days, there is a lot of activity to get ready and prepared to take over the responsibility of the contract. That drives some additional cost.

And there is some open elements that you negotiate with your customer that you have to work through and all those things are kind of in play. That will take some time to kind of work through..

Okay, thank you..

Thank you..

[Operator Instructions] We’ll go next to Brian Ruttenbur with BB&T..

Yes, thank you very much. Great quarter. Couple of questions.

First of all, following on Bill’s question on the OCO, so the trend right now maybe you can address so far in July, has it been any different than the June period or have you seen a falloff?.

Really, at this point, Brian, we are seeing very consistent contract requirements in July that we are seeing what we saw in the second quarter. I think the positive sign, if you go back a year, the positive sign is we are not seeing contraction. We are seeing very stable programs across all of our programs and that shows that there is a pause.

And if there is an upside, we haven’t started to see anything material at this point..

Okay. So, with core contracts being extended, just on the revenue side, just trying to understand the revenue range, it seems like 2015 should be at – close to the top end of the range rather than the bottom end of the range.

Maybe you can help me out and understand what would push you to the bottom end? Maybe there are some seasonality issues coming up and fourth quarter is always a little weaker than – is one of the weaker quarters because of holidays and things like that.

But help me out with why you wouldn’t continue the second quarter run-rate going forward?.

Well, clearly with the extensions of these key re-competes, we do feel more comfortable with the second half of the year. Things that can play in differently in the Q3 and Q4 timeframe then played out in the second period is programs that complete can change your top line impacts.

We do have a couple of programs that have small construction projects that can be in the several million dollars that could create some variability and then the – really the unknown in Afghanistan. We saw some consistency in Afghanistan, but those could change and those change pretty rapidly, which is one of our differentiators.

We can adapt to that, but that could also cause some pressure both on the top line and the bottom line in the second half. It's shaping up nicely. We are very pleased with the first half results. We are getting more comfortable, especially on the operating margins finishing two periods or six months at 3.6%, at the higher end of our range.

There we are making very, very good progress..

Okay.

And then you mentioned the operating margins, what would change your operating margins from what you know right now, especially with the extension [ph] for the remainder of the year?.

The core is pretty stable. It would really be around the mix of sites and staffing requirements on Afghanistan. So that would be one element and that changes like I said.

And then just the pressures on the new programs that would cause another bottom line pressure in the second half, like I said, I think we are in really good shape having completed the first quarter on these two programs. We are getting more and more clarity on where those risks are and where those pressures are.

But those are the two main elements that I – we are watching..

Okay.

Last question, debt repayment plans this year, you have accelerated some, are there plans for further acceleration of debt repayment beyond the minimum?.

I am sorry. So our objective in 2015 is really to focus on the debt. We guided that if given the opportunity, we would accelerate payments in the $5 million to $10 million. So obviously, we made some good progress in the second quarter. We are still on that same path.

If given the opportunity and we have some additional cash at the end of the year, we will work closely with the Board and we may actually exceed the $10 million. But we will communicate that and make those decisions as we kind of complete the third and fourth quarter..

Okay. And then, I said that was my last, I am going to throw one more out to Ken just on a macro basis. What are you seeing in terms of new contracts coming up, margin pressures and we had talked in the past about maybe low price technically acceptable is becoming less the norm.

And maybe just talk a little bit, from a macro standpoint, what’s going on, on the top line and in terms of government services, where you are positioned and in terms of margins and pricing?.

Well, Brian, as we have discussed in the past, there is a natural tendency for LPTA to put pressure on margins.

What – an interesting thing that we are seeing in a lot of our pursuits is we are seeing more fixed price elements, which obviously puts the risk on the contractor and not on the government, but also allows you some opportunities away from a large majority of our contracts being cost-plus now.

What I am – what we are also seeing at the macro level is what we experienced with extensions on K-BOSSS, APS-5 Kuwait and Qatar and Maxwell is also taking place on the pursuits that we are going after. So it’s kind of on one hand, you see the – your program getting extended and then now going into ’16.

We are seeing the same thing on – as you are going after in a takeaway basis other contracts..

Thank you very much..

Thanks Brian..

We will take our next question from Michael French with Drexel Hamilton. Sir if you would check your mute button, we are not hearing your response..

Hi, good morning thanks for taking my questions..

Good morning Mike..

The first question I have is kind of a follow-up to Brian’s question about debt repayment. For the rest of this year, if there is any cash left over, would you have a preference for share repurchases or would you think about M&A.

And then kind of the next phase of the question is, looking into next year, let’s assume the debt is substantially paid down and you have got essentially some dry powder, how would your capital deployment priorities change in that – under that scenario, would M&A become more important or...?.

So we are executing on a very focused strategy in 2015. There are a couple of reasons. One, we are a new company. We are standing up a lot of new functions. So managing our debt was very important to us in the first year. And I think we are doing quite well in that regard.

The second is really the credit agreement and the terms in the credit agreement, being a new company are pretty restrictive. So the idea in ‘15 was to pay down debt that’s reasonable, get those leverage ratios as low as possible to give us flexibility in the future to make different capital allocation decisions.

Those capital allocation decisions, we would work closely with our Board. And we haven’t communicated what ‘16 would look like, but when the time is right we will do that. And we will contemplate further opportunities and options..

And we have communicated – this is Ken. We have communicated that we are looking at all options as far as capital allocation. And we are not taking anything off the plate. But clearly this is a year where want to pay down the debt, get comfortable with covenants and then look at what the opportunities that come forward..

Okay, alright. Yes, that makes a lot of sense. And then on your CapEx, you have guided for $2 million this year.

Just curious, what’s in there and what is that going to look like next year?.

Year-over-year, that stays pretty consistent in the $2 million to $3 million and that’s really driven mostly by contract requirements. So, there is nothing really that we do from a central location in the capital arena that drives that number..

Okay. And then, I think you said there is $1 billion of proposals outstanding.

Maybe you can discuss what your win rates have – how those have changed, if at all since the spin and what you expect going forward on that?.

So win rates in our business are tough because we have some very large programs. Take you back to the fall of last year, winning those three contracts, adding over $1 billion, that really skews your PWS [ph]. I think we see what normally contractors see, we have high re-compete win rates.

We have talked about our re-compete contracts, so we expect to win those contracts.

And then as far as the pipeline – we think the pipeline is, we have to have a robust deep pipeline that rolls, right $2 billion to $4 billion in a given year that we are submitting on new contracts allows us to win our fair share of the business that’s in our core space..

Okay, alright. Thank you. I appreciate it..

Thanks Mike..

Thanks Mike..

Ladies and gentlemen, this will conclude our question-and-answer session. Mr. Hunzeker, I will turn it back to you for closing remarks..

Thanks, Debbie. Thank you for joining us on the call today. We are happy to have returned to our positive adjusted revenue growth. We are making solid progress on executing our strategy to enhance the foundation, balance and diversify the portfolio and increase value through the offerings.

Thank you for your interest and look forward to updating you on our progress in the next quarter..

Ladies and gentlemen, thank you for your participation. This does conclude today’s conference..