RTN
#Good morning, Rich.
Well, it's definitely at its infancy right now.
We are working with the army as also with some of our competitors to help them define what this program is moving forward.
Obviously we feel that a new missile can provide the best capability with the best cost, being able to integrate as much of the new technology that's out there as possible.
So that's really our position moving forward on it.
It's at its infancy and as we get more information relative to the army we'll be glad to share that with you over time.
This award is to go complete the engineering, manufacturing, and development phase of the program.
So the assets or the pods, 15 pods that are going to be developed, are essentially EDM assets or assets that will be used for qualification in terms of flight tests and also environmental tests that will be done on the pods to ensure that they meet the overall requirement needs of the United States Navy.
That's what that program is.
Following that program, there will be a transition to production, LRIP, and then a full on ---+ you asked about period of performance.
It's approximately four years for that $1 billion program.
Thank you.
Good morning, <UNK>.
That's correct.
<UNK>, I think that's a little tough to do to really define normalized, given the mix of development and production programs and the timing of completions and starts move around.
It's not consistent business by business.
What I can maybe give you a little bit of color on I will just go real quick by the businesses, is maybe give you an indication on how we see things playing out through the balance of this year.
So we talked about IDS and what happened in the quarter with the $36 million impact.
But we do see the margin improving through the year, partly driven by improvement in business mix as some of our larger international programs move through the production cycle.
And then you mentioned it a minute ago, we do have in the second half and the third quarter, the gain from the exit of the venture, which is $125 million to $150 million.
That's about 210 basis points to 250 basis points at the IDS level.
For IIS we're expecting total year 7.4% to 7.6%.
That would be roughly in line with 2015 after adjusting for the Q1 e-Borders settlement.
What we see happening compared to Q1 there is improved mix going forward within IIS, some improved productivity as we move through the year, and also some improvement coming from expected award fees for IIS.
From a missiles point of view, we talked about the impact in the first quarter with the $22 million adjustment.
But if we look forward for the balance of the year, we still see missiles getting to the 13% to 13.2% range with margins starting to improve or expand in Q2 and in the second half of the year, really driven by mix and the timing and the ramp up of programs and some expected efficiencies that we would see at missiles.
At SAS, they were down year-over-year in Q1 as we expected, really driven by some mix, but they were a little bit ahead of our expectations for the quarter.
And then when we think about SAS moving forward, again we're still in the 12.9% to 13.1% range.
And we do expect the margin to improve throughout the year, driven by more favorable mix and therefore the timing of some program improvements.
At Forcepoint real quick, margin improved in the quarter because of the addition of Websense, the acquisition last year.
Still on track for the total year, 11.5% to 12.5% range, really with a little bit more of a ramp or expansion in the second half of the year driven by two things; the completion of integration activities related to the Stonesoft acquisition, and also as the sales ramp up in the back half of the year.
So overall, we do see the cadence improving in Q2 as well as the second half, primarily as we progress through program life cycles on some of our more recent awards, and due to the timing of expected program improvements as well.
Mark, we have time for one more question.
You're absolutely correct on the jammer.
That's about a four-year period of performance.
The other big contract, the classified one, was another four-year period of performance.
So I would say it's going to have sustainable growth definitely over the next two years just based on the bookings that they've received here in the last quarter and then obviously last year in 2015.
So there's the potential for it to be recurring, <UNK>.
We have our shares that vest ---+ some of them vest in Q1 and some of them visit in Q2.
And the determination as to whether there would be an impact is driven by where the market price of the stock is on the date they vest compared to the price at issuance ---+ the strike price at issuance.
So there could be volatility, but it could be negative volatility as well if our stock price were to go down.
So we're going to have to assess that on an annual basis, based upon the market and what's happening out there.
So I wouldn't necessarily jump to the conclusion that the 100-basis-point adjustment is the right thing.
It would be really something we have to look at on a year-to-year basis.
Sure.
Okay.
Thank you for joining us this morning.
We look forward to speaking with you again on our second quarter conference call in July.
Mark.
