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#As we look at it year over year, the head wind from a sales perspective is a little bit over $40 million.
And I'd say the vast majority of that is in our government systems business.
That said, we're still forecasting government systems to be flat despite that headwind.
The customer-funded pickup is around our data links, and I think Pat described that in his remarks.
Company-funded is around this TrueNet radio solution which provides both ground and airborne capability, primarily focused at the international market.
And remember, we've said as we start to come out of this cycle in government systems, we are going to spend a little bit more on R&D to position our products for international markets or commercial-type procurements, and that's exactly what we're doing.
No, no update for you.
Let me start with the second question first.
The growth in these new programs, whether it be KC-46, the F-35 program, are driven by the cycles of those programs.
In fact, we are seeing good growth now on the helmet and avionics that were brought in the F-35.
That will continue.
We're actually going through a period of a dip between development and production on KC-46, which is a headwind for us.
Our revenues are down on KC-46.
They'll ramp back up as we start low rate initial production, and production of those aircrafts.
They tend to follow the program cycle as opposed to the overall budget dynamics there.
The first part of your question was around the data links.
We are gaining share in the data link area.
Programs that are important there are the MIDS to JTRS conversion.
We're implementing some new wave form capability.
We've got a new data link capability called TTMT which is a broadband data link.
You've probably seen this recent announcement by Northrop Grumman of the air-to-air refueling of the unmanned platform.
That was done utilizing our TTNT advanced networking technology.
We see really good growth opportunities there in our data link business.
I'll also say that our core communications business, if you set aside the JTRS Manpack phenomenon, is doing quite well.
As we went into the cycle, our short-cycle business was impacted more dramatically, more quickly.
But as we're stabilizing here, we are seeing our short-cycle business actually coming back.
So, things like data links, our navigation equipment, communications equipment are all showing signs, early signs of recovery, which is good.
We're not in the Rifleman competition.
We're more in the Manpack program.
That's the big army communication program out there for us.
The draft RP is out.
Industry is commenting on that.
They're planning to go to procurement competition late this fiscal year.
Awards will be probably next year but you're not going to see any meaningful revenue now until probably 2017 when we start ramping up.
Their intent is to select multiple suppliers for that but it will be a full and open competition.
That's probably a big one to watch going forward.
Saner, I'm not sure what the heck the army is going to do on Saner yet, whether it's going to be funded, whether they're going to delay that, whether they're going to continue to just buy some of the existing solutions that they have.
I'm not sure yet on Saner whether that's going to be an opportunity for us or not.
I'd prefer to see a new Saner open competition.
It would give us more opportunity.
But I think in the main, it's not a material driver.
It's not a JTRS kind of program.
No, unfortunately, we're not seeing any of that yet.
I've not forecasted that we're going to see that until we get into another budgeting cycle.
It's something I talk to the guys repeatedly about.
But I can't track any major shift in strategic direction that gives us a retrofit opportunity that we can track to a fuel.
It, obviously, isn't hurting but I don't think the money is moving from the fuel budget to the retrofits and mods budget yet.
No.
If you look at our dividend ratio it was just time for us to update that.
So, there's no change in strategy.
This just reflects the increase of income that the growth is providing from the company, and we're adjusting our dividend accordingly.
So, you should expect that as we continue to grow the bottom line of the Company.
That particular acquisition we're looking at providing about 1 point of revenue next fiscal year to our commercial portfolio.
I think more importantly is that it provides us this broad offering and will certainly allow us to continue to be successful in the in-seat and wireless video application in the single-aisle market.
It's 1 point of growth next year, which is good.
Not overly material, though.
We don't provide wired in-seat twin-aisle solutions right now.
Our focus is in complementing our single-aisle product line.
Whether this would be applicable to a twin aisle might be something we'll look at in the future.
While this product line is going to sit in our commercial systems business unit, this is a part of our overall strategy to provide information offerings.
So, you can envision in the future where we're providing not just the in-seat video equipment but also the onboard wireless distribution, as well as the connectivity service.
And we've been expanding in our market reach there to provide the cabin connectivity service.
So, we can see in the future where we're providing a much broader, fuller sweep of offerings to our customers going forward.
I would say there's properties out there we're continuing to work.
They're particularly like a Pacific Avionics which means they're privately owned, they take nurturing to make the deal happen.
I've said publicly that I wish we were a little faster at moving these.
Jeff MacLauchlan's come into the company and that's one of his focus areas, is to try to accelerate our ability to convert on these.
I think there's opportunities for us to continue to build out the portfolio, and we'll keep prosecuting those.
I think you should view this as a typical bolt-on enhancing our total product offering in this new connected airplane environment.
Today we've got the IMS organization that allows us to provide the services.
We had the onboard equipment for in-flight entertainment.
We did not have a product offering for this wireless distribution.
That's where Pacific Avionics comes in.
There are other areas we'll continue to look to build out this portfolio to provide all the value-added offerings associated with a connected airplane going forward.
So I wouldn't look at this as a platform.
I'd look at this more as building on the platform that we've already got and as part of our overall information strategy.
I think it was pretty close, maybe a little bit higher.
We're still planning on having a lower tax rate in the second half of the year.
I would tell you, I think the bulk of the tax planning is going to be in the fourth quarter.
So you'll probably see a rate in the 30% range for the third quarter, then coming down in the fourth quarter.
We're at really low rate as they're going through the ramp-up right now.
I think we have 30 ship sets in our year so we're on a one to two month rate right now.
Pretty muted ramp-up as they deliver those aircraft at a much slower pace than what we saw with 787.
Now, we are aligned to do Airbus in this overall A-350 ramp-up.
So, we're not in the situation where we saw with 787, where we were misaligned and then it took us a ---+ I'm sorry, with 77, it took us a year to get back aligned.
We're pretty well directly aligned right out of the chute with Airbus.
There was a few.
We sold it.
The sale price was $5 million.
There was $3 million in cash and we took a $2 million note.
Not exactly a robust sales process but we did get a little bit.
Yes, I think we're looking for more stable performance out of the large cabin as opposed to growth.
I think actually our global demand was probably more to do with the alignment of when we were shipping equipment as opposed to market demand for the aircraft.
We're watching that very closely.
Obviously the Russia sanctions is an example, is an area that is of concern for the large cabins.
We track that just like you do with the OEMs, but we're calling for relatively stable global production.
Thank you, Melissa.
We plan to file our Form 10-Q later today so please review that document for additional disclosures.
Thank you for joining us and participating on today's conference call.
