Greetings, and welcome to VSE Corporation's Second Quarter of 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. The question and answer session will follow the formal presentation. If anyone should require assistance, you're welcome to press star then zero on your telephone keypad. As a reminder, this conference is being recorded. I'd now like to hand over to your host, Mr. Noel Ryan of Investor Relations. Please go ahead. Thank you. Welcome to VSE Corporation Second Quarter 2022 Results Conference Call. Leading the call today are our President and CEO, John Cuomo, and Chief Financial Officer, Stephen Griffin. The presentation we are sharing today is on our website, and we encourage you to follow along accordingly. Today's discussion contains forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the SEC. Except as required by law, we undertake no obligation to update our forward-looking statements. We are using non-GAAP financial measures in our presentation. The appropriate GAAP financial reconciliations are incorporated into our presentation where available, which is posted on our website. All percentages in today's discussion refer to year-over-year progress, except where noted. At the conclusion of our prepared remarks, we will open the line for questions. With that, I would like to turn the call over to John Cuomo for his prepared remarks. John? Thank you, Noel, and welcome to everyone joining us on the call today. Let's begin on Slide three of our conference call materials. VSE finished the first half of 2022 with two of the strongest revenue quarters in more than a decade, led by broad-based year-over-year growth in all segments, including aviation, which reported record revenue in the second quarter. While the macro environment remains challenging, given continued supply chain disruptions, cost inflation, and labor constraints, we continue to make steady progress on our customer-centric value proposition, highlighting the strength and resiliency of the VSE team and the demand for our products and services in the market. Our strong second quarter performance further highlights our successful implementation of recently awarded distribution and MRO programs, together with our effective integration of recently acquired businesses. We executed on plan in the second quarter, delivering strong year-over-year growth in revenue and profitability. Total revenue increased by 38% year-over-year, adjusted EBITDA increased by 21% year-over-year, and adjusted net income increased by 25% versus the prior year. We continue to advance our ongoing business transformation, guided by three strategic initiatives that position us to drive long-term value creation for our shareholders. First, we are building sustainable revenue channels through new program execution, market share gains, and product and capability expansion. Second, we remain focused on margin expansion and profitable growth as we drive scale with our recent and ongoing investments and improve our supply chain and operations through continuous improvement. Third, we are building on our strong legacy programs and our long-term customer relationships to optimize our core revenue channels with outstanding customer service and depth and breadth of product and service offerings. The company's second quarter results demonstrate substantial progress across these strategic initiatives as we continued to execute the next phase of our business transformation roadmap, developing a market-leading aftermarket parts distribution and MRO services platform to support higher growth transportation end markets. I'll start by highlighting the progress in our aviation segment. Our aviation segment reported record results in the second quarter with $105 million of revenue, highlighted by organic revenue growth across both our distribution and MRO businesses and contributions from our global parts acquisition. Distribution revenue increased 177% year-over-year, representing the eighth consecutive quarter of sequential revenue growth. While MRO revenue increased 37% year-over-year, supported by ongoing commercial market recovery and continued growth within the business and general aviation market. Aviation segment adjusted EBITDA increased by over 293 basis points year-over-year to 11.4%, driven by new program implementations and an increased mix of higher margin repair activity. Over the last few years, the aviation team successfully launched new Business and General Aviation market focus programs. These programs expanded our Business and General Aviation customer base from 100 customers in 2020 to more than 3,000 unique customers today. Also, we are on track with our Global Parts acquisition integration activities and our new programs are performing ahead of initial expectations. Commercial air travel levels continue to recover, and we experienced incremental growth in commercial distribution and MRO activity in the quarter, which will contribute to further revenue growth in 2023 and beyond as commercial air travel recovers to pre-COVID levels. Turning to our fleet segment. Fleet revenue increased 12% year-over-year in the second quarter, driven by strong growth with commercial fleet customers and e-commerce fulfillment sales together with steady contributions from the U.S. Postal Service. We continue to experience strong demand for aftermarket parts servicing medium and heavy duty fleets across our commercial distribution and e-commerce fulfillment channels. Commercial revenue increased by more than 48% on a year-over-year basis in the second quarter, representing 40% of total segment revenue in the period, up from 10% at the end of 2019. Looking ahead, we anticipate further growth within commercial channels as we continue to expand operational and supply chain capabilities to meet this growing demand. Also, our USPS revenue increased on both the sequential and year-over-year basis in the second quarter, given consistent customer spending, including increased spending on commercial off-the-shelf fleet vehicles. Turning to our federal and defense segment. Federal and defense revenue increased 3% on a year-over-year basis, supported by growth in the foreign military sales program with the U.S. Navy as we focus on optimizing legacy programs. In the second quarter of 2022, federal and defense segment margins declined versus prior year levels, driven by an increased shift in our contract mix from fixed price to cost plus. Cost plus now comprises 48% of total federal revenue versus 31% in the second quarter of 2021. Before Steve shares our financial performance for the quarter in more detail, I'd like to take a moment to announce two recent additions to the VSE Board of Directors as part of our long-term succession plan. We are excited to welcome Anita Britt and Lloyd Johnson to the VSE board during this next chapter of growth and transformation. Both incoming directors are accomplished executives with decades of commercial experience at respected world-class public companies committed to delivering long-term value for shareholders. We are confident they will provide diverse and valuable perspectives integral to our continued business transformation. Our results for the first half of 2022 demonstrate the strength and resiliency of the VSE team and the demand for our products and services and strong execution on our multi-year business transformation strategy. I am proud of our team, how they support our customers and OEM partners, and for delivering strong and record-setting first half results. As we look to the second half of the year, we intend to build upon this momentum with a strong focus on program execution, market share gains, and new business integration in continued support of the growing fragmented markets we serve. I will now turn the call over to Steve for a detailed review of our financial performance. Thanks, John. Now let's turn to Slides four and five of the conference call materials for an overview of our second quarter performance. VSE reported $241.7 million in revenue in the second quarter, an increase of 38% versus the prior year period. Second quarter revenue grew year-over-year in all three of our operating segments. Aviation generated $105 million of revenue, its highest quarter ever, driven by a combination of strong new program execution, share gains within the business and general aviation market, and continued commercial end market recovery. Fleet segment growth was supported by commercial fleet and e-commerce fulfillment revenue. Federal and defense growth was driven by growth in our U.S. Navy programs, partially offset by a U.S. Army contract completion. During the second quarter of 2022, we generated adjusted EBITDA of $22.9 million, an increase of 21% on a year-over-year basis. Adjusted EBITDA margin rate decreased to 9.5% in the second quarter as margin expansion across the aviation segment offset margin compression within the federal and defense segment. Turning to Slide six. Aviation segment revenue of $105 million increased 121% year over year in the second quarter. Both our distribution and repair businesses grew on a year-over-year basis of 177% and 37% respectively. Distribution revenue, excluding $23.7 million of revenue contribution from our global parts acquisition, is approximately 150% above pre-pandemic levels as a result of recent new awards and strong program execution. Total MRO revenues are approximately 6% below pre-pandemic levels and are led by business and general aviation repair, which is above pre-COVID levels, while commercial repair is approximately 25% below pre-COVID levels. Consistent with recent market trends and our first quarter expectations, we anticipate moderate commercial MRO recovery in the second half of 2022 and continue to expect commercial MRO to recover to pre-pandemic levels by 2024. Looking ahead, we will continue to invest in new capabilities and to expand our integrated solutions across a growing base of new business and general aviation and commercial customers. This is including MRO capabilities in support of our recently announced Honeywell Aerospace agreement for avionics product repair and our 737 end-of-life aircraft solutions business supporting a major U.S. airline. Aviation adjusted EBITDA increased by more than 198% year-over-year, while adjusted EBITDA margins increased by 293 basis points year-over-year to 11.4%. Within the aviation segment, we continue to anticipate year-over-year growth in quarterly revenue during the second half of 2022, together with an adjusted EBITDA rate of approximately 10%-11%, driven by the mix of MRO recovery. We maintain our longer-term mid-teen adjusted EBITDA margin target. Turning to Slide seven. Fleet segment revenue increased 12% versus the prior year period, driven by higher commercial and e-commerce fulfillment revenue. Commercial revenues were $26 million in the second quarter, an increase of 48% versus the prior year period, and now represent 40% of total segment revenue. USPS revenues were up 4% on a year-over-year basis. Segment adjusted EBITDA of $7.7 million increased 10% versus the prior year period, while adjusted EBITDA margins remained relatively flat given a higher mix of commercial revenue. For the remainder of the year, we continue to anticipate flat to modestly higher quarterly revenue year-over-year as commercial growth is offset with flat to modestly lower USPS and Department of Defense revenue. We expect Fleet's adjusted EBITDA rate to be approximately 12%-13%. We remain focused on driving higher EBITDA dollar contribution year-over-year as this segment drives revenue diversification as a key strategic initiative. Turning to Slide eight. Federal and Defense segment revenue increased 3% on a year-over-year basis, driven by U.S. Navy growth, partially offset by the expiration of a contract with the U.S. Army. Federal and Defense adjusted EBITDA was $3.4 million in the second quarter, a decline of 58% year-over-year. Adjusted EBITDA margins declined 690 basis points on a year-over-year basis to 4.8%, given a higher mix of cost plus contracts in line with prior communications. For the remainder of the year, we continue to anticipate relatively flat quarterly revenue year-over-year as new awards under our NAVSEA program offset the expiration of a contract with the US Army. We expect Federal and Defense's adjusted EBITDA rate to be approximately 4%-5%, driven by the contract mix of cost plus versus fixed price awards. Turning to Slide nine. At the end of the second quarter, we had $91 million in cash and unused commitment availability under our $350 million credit facility. Our existing credit facility includes a $100 million accordion provision subject to customary lender commitment approvals. As expected, we used $3.4 million of cash in the quarter, up from $19 million in the first quarter, primarily driven by the completion of new aviation distribution awards and timing of inventory purchases to support 2022 sales. Looking to the remainder of 2022, we expect sequential improvements in Free Cash Flow and maintain our outlook for positive Free Cash Flow for the year. At the end of the second quarter, we had total net debt outstanding of $308 million. Adjusted EBITDA for the trailing twelve months was $84.3 million and excludes full year EBITDA contributions from the Global Parts acquisition. At the conclusion of the second quarter, net leverage was 3.7 times. Subsequent to the completion of the second quarter and following the expiration of previous interest rate swaps in the first quarter of 2022, we executed $150 million of forward starting interest rate swaps in July 2022, equivalent to approximately 50% of our outstanding debt, which will serve to mitigate interest rate exposure over the coming years. We continuously evaluate our existing capital structure and look forward to sharing more at our upcoming Investor Day in the fourth quarter of this year. Operator, we are now ready for the question and answer portion of our call. Thank you very much, sir. Ladies and gentlemen, at this time, we will be conducting the question and answer session. If you would like to ask a question, you're welcome to press star then one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two to exit the question queue. For participants using web equipment, it may be necessary to pick up your handset before pressing the star key. We'll pause a moment while we poll for questions. The first question comes from Ken Herbert of RBC Capital Markets. Hey, good morning, John and Steve. Nice quarter. Thanks, Ken. Good morning. Good morning. Hey, John. On the aviation business, it looks like you saw a bit of an inflection in the repair business in the quarter. Sounds like from the commentary that wasn't as much on the commercial side as it was on the business jet side. I know this tends to be the higher margin business, but can you just dig a little bit deeper into what you saw in the quarter on the repair side? Comments sounded still a little cautious on the pace of the commercial repair recovery, but what are you seeing in that market and a little bit more on how the second half could look there? Yeah, I mean, we saw improvement and revenue increase in both the commercial and the business and general aviation repair businesses. The recovery is happening, and we are still feeling very bullish about the future. You know, we know, I think that when we look at the year-over-year growth and how the other programs have executed as well, and when we look at the pipeline of new business opportunities that we have ahead of us and the issues around labor, we've definitely been a little more cautious in hiring and making sure that we're fully staffed to support the growth. You know, growing a business and, you know, more than doubling the size of a business in a year, requires a lot of operational excellence as well. We have definitely been a little bit more cautious on the SG&A side, as well as the commercial MRO businesses have been slightly slower to recover, which is why we're more cautious on margins. Steve, do you wanna share any more color on kind of the breakout of commercial versus BG&A? I know we don't go in too much detail, but. Yeah, we don't provide the split necessarily, but you are right. Based on the commentary, Ken, we did see significant strength in BG&A. I think generally speaking, we could see some of that pent-up demand coming through at the end of the first quarter that helped to translate into strong revenue generation for business and general aviation repair. I think we continue to see that commercial recovery, as John pointed out. As you know, there's just some uncertainty generally in that market space, but we're pleased with the execution in the quarter. Yeah, no, it looks great. Is there anything that's giving you pause within the BG&A segment, or are you seeing anything from your customers that may imply that the growth we've seen in that market could start to moderate? No, I mean, you know, you and I have had a few conversations. I tend to be a little more cautious than what you read in the market. That said, when we see the backlog and we see the customer activity, we continue to, you know, to see pretty robust trends in that market. Okay, great. Just one final question. With Global Parts, and then of course, with the distribution agreements you've put in place, now that you're, you know, a few quarters or you know, a year or so into some of these distribution agreements, any surprises on these? Anything around, with the material you've acquired that's either positive or negative or how are those performing relative to plan? I appreciate the question. Actually, Monday was a year anniversary of the Global Parts acquisition. You know, that was a self-source deal at a low multiple, and when we look at, you know, the multiple in terms of how it performed compared to plan, it's tremendously exceeded our expectations. We're on track for a Q4 system integration and, you know, full integration of the business into our full distribution business, but it's performed above plan year to date. When we look at our Pratt & Whitney Canada agreement, as well as a few of our other larger distribution agreements that we launched last year, I can't stress enough how proud I am of the team to be able to build out, you know, platforms that essentially double the size of our distribution business while having, you know, market-leading distribution results and just amazing customer feedback in terms of, you know, how much we've improved both, you know, operational performance as well as, you know, as inventory availability. So far, you know, everything is really performing above plan and, you know, we came in with a thesis of where there were some gaps in the market, and the market's really responding well to it. That's great. All right. Well, thank you very much. Thanks, Ken. Our next question comes from Michael Ciarmoli of Truist. Hey, good morning, guys. Thanks for taking the questions. Nice results as well. John, maybe just to kind of go back to Ken's first question on aviation. I think you kinda hinted at the margin dynamic talking about SG&A, but obviously the second half implies a step down, and you are getting that pickup in, you know, the MRO, which is higher margin. Is there anything, you know, else kinda any other moving pieces in the second half? You know, are you looking at, you know, just higher labor, you know, any longer turn times, anything that might also be impacting the margin in second half? I'm assuming the MRO revenues don't take a step back here in 3Q and 4Q from where they were. You know, maybe you could just comment on the margin dynamic. Sure. I mean, at the end of the day, you know, mix is what's gonna drive the margin at this point. As we get into 2023 and beyond, you'll see SG&A as a percentage of sales, a big focus of that operational excellence in decreasing that. Right now, I think you're gonna see mix drive kind of the margin. Steve, any color you wanna add on that? I would say, let me add on the MRO side, we are not expecting a step down in the back half of the year. Yeah, no, I think, John, you highlighted it well, the mix dynamic there. Then we did reference during the first quarter that we continue to make investments in the business for growth. I think you can see with the second quarter results, in terms of strong execution on the top line, we continue to see opportunities to grow organically. We'll make some investments to help generate that growth, as we launch some of our newer programs, which we previously announced in the first quarter. Besides the dynamics that John referred to, I don't think there's anything else necessarily to call out. Okay. On those investments, can we just think that you guys may be carrying extra costs while some of these organic investments get ramped up? Is that the right way to think about sort of how the margin might be impacted? Absolutely. You look at. You know, I'll give you a real example. You look at a, you know, we signed our first OEM authorized MRO capability to do avionics work, a 10-year agreement, you know, out of our facility in South Florida, which traditionally was an independent facility. To get that, you know, business up and running, we've got to, you know, get the testing equipment, we've got inventory. You know, inventory is not in SG&A, but we've got testing equipment, we've got labor. When we look at the growth and the opportunities ahead, you know, we don't wanna pass on those opportunities by being overly cautious on the SG&A front. Like I said, we've been a little bit more aggressive in this market to make sure that we are able to staff and perform, that you know the value proposition is based on you know above market performance. To our end user customer, we wanna make sure that we can continue to be there. Steve, any other color? Got it. I think you hit it all. Thanks. Thanks, Mike. Just one other one as well. Just on. You mentioned the BG&A, the backlog, the activity. I guess we're now in a technical recession here, and there's always been pretty tight correlation to corporate profits with biz jet activity. I mean, how are you looking at the trends longer term? I mean, do you have that much backlog and visibility in that specific segment? No. I mean, it's an aftermarket business, so you're correct. There's not- Yeah. There's not a tremendous. Okay Backlog of visibility. We look at the trends. The trends are continuing to perform, you know, the way that the year has started to perform. When we look at 2023, you know, and we look at the back end of 2022, you know, I'm a little bit more cautious than I, you know, than the, you know, double-digit growth rates that you see out in the market. Yeah I do not think that we will see the, like, let's say, the 2008 business and general aviation kind of boom and bust market. That said, I do think- Yeah ... there'll be a level of caution in the forecast as we look at 2023 plus. Steve, anything else there? Got it. Nope. I think you hit it. Got it. Thanks, guys. I'll jump back in the queue. Thanks. Thank you. The next question comes from Louie DiPalma of William Blair. John and Steve, good morning. Hey, Louie. How are you? Good morning, Louie. Your aviation revenue growth, John and Steve, continues to be robust. Was your new Honeywell avionics contract that you announced in April, was that the key driver for revenue growth in aviation this quarter? Louie, actually, that program that we announced in the first quarter really won't start to generate revenue until maybe late this year, but probably more like early next year. It doesn't necessarily contribute to the strong results this quarter. I think what we would attribute the strong results this quarter to is really excellent implementation of the new programs, as well as success within the Global Parts business. You know, we continue to see that the teams are operating at a very high level of efficiency, in terms of, you know, managing our product as well as at the same time finding new solutions for customers. We're very pleased with the implementation of those programs, as well as optimizing the legacy programs that existed within VSE Aviation beforehand. Great. Steve, what were some of those, I guess, new programs that were the key revenue drivers in aviation? You know, I would point back to the three large programs that we announced last year. One being, the Pratt & Whitney Canada engine accessories deal. The second one being the Pratt & Whitney Canada auxiliary power unit deal, and then the last being the Triumph Actuation program. All of those programs now are at full implementation. That combined with the Global Parts integration and helping to drive some commercial synergies in terms of sales opportunities and sales leads, I think that helped to contribute to the strength on the top line. Great. When those programs are at full implementation, does that mean that, like, growth is somewhat capped for those programs? Or should there be, like, continued growth in future quarters and years from the Pratt & Whitney Canada engine accessory parts and the other programs that you mentioned? Yeah. I mean, once they're fully ramped, you're not gonna see the growth rates that you're seeing today. You'll see us- Okay Grow with the market. You'll see, you know, us have the ability to grow both in terms of price and volume. Then there's additions and some add-ons as we kind of gain share wallet kind of in tangential sales around those core programs. There is a growth strategy beyond the full implementation. It just won't be at the same pace that you see the implementation growth rate. Thanks, John. John, I think you referenced how the pipeline is very large, and Steve talked about how there is some caution related to staffing. Right now, are you turning down certain deals or even deferring certain partnerships until the staffing environment improves? No. I wouldn't say staffing is holding us back. Again, we've been a little bit more aggressive both in our fleet business and in our aviation business to support the growth that we have in front of us and the growth that we see even further ahead. We are looking at capacity. You know, during COVID, we created centers of excellence that will help us drive scale in all of our businesses. You know, we've got a few that we're still working on getting that scale ready to handle the future. I wouldn't say we're turning down business, but I'd say that we are watching capacity to make sure that we can handle the growth, not just today, but in 2023 and beyond. That makes sense. One final one. How is the Southwest program progressing? Southwest this morning announced that it expects reduced deliveries for its Boeing 737 MAX for this year. Would that have any impact on how your program with Southwest ramps? It does. You know, we purposely did not put a large forecast and didn't put a big forecast out in the market on that program for the near term. Although we anticipate about 250 or so aircraft that will retire during the life of that program, we don't believe that this is gonna be the robust year. You know, you need new aircraft deliveries to support aircraft retirements, and there's just a level of uncertainty out there in terms of delivery. Our forecast is extremely conservative for 2022, and even relatively speaking for 2023 on the program until we know that deliveries are gonna come in that'll allow them to retire those aircraft. No change to any of our forecasts, but again, a level of conservatism around how we look at that program. Great. Thanks. I'll jump back in the queue. Thanks, B. Riley. The next question comes from Austin Moeller of Canaccord. Good morning, John and Steve. Nice quarter. Thank you. Good morning. My first question here, just in the fleet business, you know, the performance on the USPS contract was relatively strong. Do you now expect that USPS may perform better than anticipated going forward, just given the diverse vehicle fleet and potential extension of use on the Grumman LLVs if we see, like, the Oshkosh vehicles get pushed to the right? Yeah. I think that we are anticipating the LLVs to be more of a longer-term play for the Postal Service based on the communication that, you know, you see what's in the public domain as well as the same that we do. Based on both delivery of new vehicles and being a longer delivery cycle, the mix of fleet that the USPS will have, you know, when they're complete with their fleet transition in probably 8-10 years from now, which will include some commercial off-the-shelf vehicles as well as the inability for them to get vehicles today, we do anticipate the LLV being extended, and that's obviously, you know, we have very strong market share on that vehicle. We also are seeing market share gains on other vehicle types within the USPS fleet for two reasons. Number one, they're starting to age out, and as they start to age out, we're seeing revenue by vehicle types start to grow. As well as we start to understand how the customer uses the vehicles, we're starting to, you know, be able to penetrate with additional products as well. Yes, it was a very strong quarter for the USPS. Thank you. The next question comes from Ajay Vashishat of B. Riley. Hi. Good morning, everyone, and let me add my congratulations as well. Good morning. Thanks. Good morning. Just a follow-up on the BG&A MRO segment. Looks like you're building pretty good momentum there, taking market share. What's your latest thinking on what inning we're in relevant to taking more market share there in that segment? I mean, in the businesses generally, so let me just talk at a high level about MRO share gain. MRO share gain is from when we kind of launch a capability or win a new program until you see revenue execution is about 12 months. It could even be as high as 18 months before you see these programs ramp. You know, it's a little different than a distribution program where we have to get the capability and the testing and the like up and running. We still see a long runway ahead for both distribution share gains as well as MRO share gains in both commercial and in business and general aviation. Just wanna share the difference, though, when we announce a kind of win in the MRO space in terms of revenue realization versus a win in the distribution space as quicker terms of revenue realization. We still see a tremendous upside in both BG&A and commercial MRO capability expansion. Okay. Great. I know you touched on being more aggressive on labor. Just wanted to circle back to that. Are there any changes for better or worse in kind of the latest that you're seeing in terms of labor availability, labor rates? Any change there? I would say there's no material change or difference from, you know, kind of what we've seen in the prior quarters. You know, part of what we're building is building a culture, and it may sound a little corny, but building a culture of a winning team where people wanna be on the team. I believe that if you look at some of our growth segments, like our aviation, our fleet segment, we actually have lower turnover than most of the market has experienced in, you know, in the recent times. Okay. Good. Any update on supply chain, how you're seeing availability evolve, and then maybe just update on how you're handling price increases in the near term? Yeah. I'll talk about pricing first, then we'll talk about supply chain. I mean, from a pricing perspective, we're an aftermarket business. We do not have a lot of long-term fixed price contracts, and that does give us the ability to you know, amend price and you know, change and adjust price pretty quickly to end user customers. As we look at supply chain, you know, we look at supply chain in two. It's kind of like a seesaw. You look at the risks, and then you look at the opportunities that can come out of those risks. So when you look at our working capital usage, we are you know, really making sure we've got sufficient inventories on the shelf to support both the current demand as well as the future demand that we anticipate. You know, somebody earlier mentioned kind of, you know, are we in a recession or not based on the metrics. We look at our business as one that, you know, has opportunity set during recessions as people try to extend the life of assets, specifically transportation assets. The repair spend typically goes up and you see maintenance repair and overhaul and distribution businesses perform quite well. We are positioning ourselves pretty strong in terms of our inventory position to support both 2023, the back end of 2023 as well as back end of 2022 as well as 2023. Okay, great. Thanks for taking my questions and best of luck. Of course. Thank you. Thank you. Next, we have a follow-up from Kenneth Herbert of RBC Capital Markets. Hey, John or Steve. Thanks for taking the follow-up. Just quickly, the positive Free Cash Flow guide for the year implies a pretty nice recovery in the back half. You've had a nice improvement sequentially in cash from the first to the second quarter. How should we think about the cadence there? Are you Free Cash Flow positive in the third quarter? How much of it is dependent upon the fourth quarter? It's a good question. What we've iterated here is that you should expect sequential Free Cash Flow improvement from here. I think that would intuitively imply some level of positive Free Cash Flow for the third quarter. You know, we reiterate our guidance that, you know, barring any major organic investments that might be strategic, we expect Free Cash Flow to be positive for the year. Candidly, Ken, it's kind of similar to what you saw last year. When we do see this kind of being somewhat of a dynamic as we move forward, where stocking of inventory towards the year end, that then could lead to payables that head out in the first quarter, in the second quarter is a dynamic that might play in the industries that we're in. You do tend to see more of a second-half focus around cash flow, but we reiterate that guide. Okay, that's great. Steve, good job on some of the hedging. It looks like you did about half the debt. Is there plans to cover sort of the other half of the debt or anything else you can provide on the hedging strategy and how we think about the potential risk there in terms of rates? Yeah. First, you know, we did hedge about half the debt. I do think that we'll be able to provide further updates for you in the second half of this year 'cause we'll be getting together in the fourth quarter for our Analyst Day. That might be able to provide a bit more guidance when we get to that discussion. You know, right now we feel very comfortable obviously with that 50% hedge, especially as we generate stronger Free Cash Flow in the second half of the year. As it relates to interest rate risk, I mean, I think you should expect interest rate in terms of how it affects our PNL to be, you know, pretty close to where we're at in the third quarter. We do anticipate obviously higher interest rate on the remainder portion of the debt that's not hedged. We do also expect that positive Free Cash Flow to reduce our debt balance and therefore improve our interest expense. Net-net, I think you can expect third and fourth quarter to be in line with what we saw, thereabouts in the second quarter. Excellent. Perfect. Thank you. Yeah, thank you. Thanks, Ken. Next we have a follow-up from Michael Ciarmoli of Truist. Hey, thanks, guys. Steve, just housekeeping, I may have missed it. The $2.3 million or so charge for Russia, Ukraine, what specifically was the write down there related to? Yeah, we had, you know, a bit of outstanding aged receivables. As well, we had some inventory that we had purchased that is specific for that. There is a small slice of the business in general aviation market that is tied to Russia. Given some of the recent news, as well as obviously some of the sanctions, we felt it was most appropriate to, you know, take a reserve on those two items. I would say with both items, there's no further risk on either one of them. Okay. Got it. Just, I guess looking at that second half Free Cash Fow, accounts receivable up pretty significantly. Do we get a working capital tailwind? Obviously, supply chain and inventory investment, but anything going on with receivables or just thinking about working capital second half? Yeah. I think we expect to see some elements of tailwind from a working capital standpoint. Now, I would caution that with the amount of growth that you're seeing within our business, we do expect working capital from accounts receivable to grow just by the nature of the business. I would say there's Okay. You know, from a collectibility standpoint, nothing to be concerned about. I think as you look to the second half of the year, you'll see a bit more of the EBITDA contribution of the business fall down, as well as a little bit of a working capital, benefit. Got it. Perfect. Thanks, guys. Thanks, Mike. Next, we have a follow-up from Austin Moeller of Canaccord Genuity. Thank you. Thanks for taking my question. Got disconnected. You sort of touched on this in a prior question, but if we do see a slowdown in business jet activity into next year, do you think that might be offset by that greater pent-up demand that hasn't been realized yet from commercial aircraft MRO? Yeah. I think, you know, we continue to look at diversity of the businesses within the businesses, so to speak. When we look inside of... That sentence made a lot of sense. See, when we look inside of Business and General Aviation, you know, I think that we are touching all different types of aircraft, all different types of users, all different types of parts of the airplane on a tip to tail approach, and that we continue to see opportunities to kinda grow share of wallet. If we see kind of a slower growth rate next year, first there'll be opportunities for share of wallet gain within our existing customers to kinda combat that. Second, absolutely, we expect the commercial business, and both the share gain and the other opportunity sets in front of us to help counterbalance any kinda concerns we have in business and general aviation. Okay, great. Thanks for the details, John. Sure. Ladies and gentlemen, we have reached the end of the question and answer session. I'll now turn the call over to Mr. John Cuomo, President and CEO, for closing remarks. Thanks everybody for joining our call today. We look forward to seeing many of you at our Investor Day that we'll hold shortly. That'll be in the late third quarter, early fourth quarter, and if not, on our third quarter earnings call. Thanks again for the support. Have a great day. Thank you. This concludes today's conference. Thank you for your participation and you.