Greetings and welcome to the VSE Corporation third quarter 2022 earnings call. At this time, all participants are in listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star then zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Noel Ryan. Thank you, sir. You may begin. Thank you. Welcome to VSE Corporation's third quarter 2022 results conference call. Leading the call today are our President and CEO, John Cuomo, and Chief Financial Officer, Steve 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. Thank you, Noel. Welcome to everyone joining us on the call today. As detailed in our third quarter earnings release, our business transformation continues to gain momentum. Recent new business wins and strategic progress across each of our business segments have contributed to continued profitable growth during a period of broader market volatility. Let's now turn to slide three of our conference call material. During the third quarter, revenue, net income, Adjusted EBITDA, and free cash flow each increased materially on a year-over-year basis, driven by a combination of new business wins, program execution, and improved demand across our key commercial end markets. Total revenues of $242.5 million increased 21% year-over-year, driven by growth across all three segments. In the third quarter, both the aviation and Fleet segments recorded their highest year-to-date revenue in company history. Third quarter Adjusted EBITDA of $24 million was up 12% versus the prior year, driven by contributions from both our aviation and Fleet segments. Our aviation segment had another outstanding quarter, with revenue of $102 million, up 40%, and adjusted EBITDA up 86% in the third quarter. This segment's strong performance was supported by balanced growth across both commercial and business and general aviation customers and both our distribution and MRO revenue channels. Revenue in our Fleet segment increased 7% in the third quarter, driven by growth with commercial and e-commerce fulfillment customers. Commercial Fleet revenue increased 23% on a year-over-year basis and now represents 39% of total Fleet segment revenue. Fleet segment Adjusted EBITDA increased 13% on a year-over-year basis in the third quarter. The EBITDA improvement benefited from commercial Fleet growth, along with steady contributions from the US Postal Service. During the quarter, federal and defense segment revenue increased 12% year-over-year, driven by growth within the foreign military sales program with the U.S. Navy. Finally, we generated positive free cash flow for the quarter of $11.3 million. In summary, our third quarter results highlight the many successes generated by solving complex problems for customers during a challenging supply chain environment. Turning now to slide four and an update on our key strategic priorities of number one, building a growing base of recurring revenue, number two, generating Adjusted EBITDA growth, and number three, optimizing legacy programs. We made steady progress in the quarter on new business growth and building sustainable revenue. Last week, our aviation segment announced multiple new distribution agreements with global OEMs to support their products in the business and general aviation market. These agreements represent a combined value of approximately $350 million and are anticipated to commence in early 2023, with contract terms ranging between two and 15 years in duration. These new business wins support our goal of building a pipeline of consistent and recurring multi-year revenue, and they include the following. A new 15-year distribution agreement with Pratt & Whitney Canada, supporting new engine line maintenance spare parts and engine accessory exchange to support customers in the Asia Pacific region. A new five-year exclusive distribution agreement with a global OEM supporting their fuselage-mounted antenna systems for their European, Middle East, Africa, and India customers. The expansion of an agreement with a global OEM where VSE acts as the exclusive distributor of their inertial reference system and navigation device, supporting a wide range of aircraft platforms from Bombardier, Textron, Dassault, and Gulfstream. A new two-year agreement as a sales channel partner to distribute more than 200,000 spare parts supporting Embraer Executive Jets. In the third quarter, we also announced an important investment to ensure continued commercial and e-commerce growth within our Fleet segment. To support our successful revenue diversification strategy and to build scale to the next phase of sales growth in 2023 and beyond, we are launching an e-commerce fulfillment center in Memphis, Tennessee area. This new state-of-the-art 425,000 sq ft facility will have on-hand inventory of more than 175,000 Fleet SKUs once fully operational. This low CapEx, high return, organic growth investment is scheduled to begin servicing customers in the first quarter of 2023. Our next strategic priority is growing Adjusted EBITDA. During the third quarter, the aviation segment achieved record Adjusted EBITDA through successful implementation and execution of recently awarded distribution programs, along with growth and scale within our MRO businesses. Segment margin increased 326 basis points on a year-over-year basis to 13.2%, the highest level achieved since the first quarter of 2020. The Fleet segment also grew Adjusted EBITDA in the quarter. This 13% increase was driven by a combination of commercial sales growth and stable contributions from the US Postal Service. Our final strategic priority is optimizing legacy programs, where all three segments demonstrated progress in the quarter. The aviation segment was awarded two multi-year contract renewals during the quarter, providing both sustained revenue and increased cross-selling opportunities. In addition, VSE Aviation announced a five-year agreement with Lufthansa Technik for 737 Next Generation parts, along with MRO service support, resulting from our 737 Used Serviceable Materials agreement with Southwest Airlines. The Fleet segment also experienced solid legacy program performance with a stable quarter from our USPS customer, including the continued expansion of product offerings for all USPS vehicle types. Finally, our federal and defense segment's NAVSEA program drove revenue opportunities in the quarter. During the quarter, our existing bridge contract supporting Foreign Military Sales for the U.S. Navy was increased by $86 million to $185 million. This addition is expected to generate incremental bookings and backlogs during the next 12 months with anticipated revenue benefits in 2023 and 2024. In summary, our third quarter results reflect strong financial performance, significant new business wins, and continued execution on our multi-year business transformation strategy. Before I turn the call over to Steve, I have a few closing comments. In 2023, VSE intends to host an investor day to share more details about our business strategy, platform capabilities, customer and supplier program details, and long-term financial outlook. We will confirm a date and share more details for the 2023 Investor Day soon. Finally, I want to honor a recent milestone. Earlier this month, VSE celebrated our 40th year on the Nasdaq exchange. As we enter our fifth decade as a publicly traded company, we do so with incredible momentum. We are well positioned for the future with our customer-focused value propositions, our market-leading product and service offerings, and an increasingly robust pipeline of new business opportunities. Truly, the thing that makes us different and that sets us apart from our competition in every market is the strength of our team. Our people, culture, and their dedication to customer excellence is a meaningful differentiator and our greatest asset. The strong performance this year and this quarter is indicative of that difference. I will now turn the call over to Steve for a detailed review of our financial performance. Thanks, John. Let's now turn to slides five and six of the conference call materials for an overview of our third quarter performance. We reported third quarter revenue of $242.5 million, an increase of 21% versus the prior year period, driven by growth in all three of our operating segments. Aviation recorded another strong quarter with over $100 million in revenue, driven by the successful implementation of new programs, share of wallet expansion, and continued end market recovery in both business and general aviation and commercial end markets. Fleet segment growth was supported by commercial Fleet and e-commerce fulfillment revenue, together with modestly higher contributions from the US Postal Service. Federal and Defense segment growth was driven by U.S. Navy programs, specifically Foreign Military Sales in support of ongoing aftermarket services. During the third quarter, we generated Adjusted EBITDA of $24 million, an increase of 12% on a year-over-year basis. Consolidated Adjusted EBITDA margin rate decreased 80 basis points to 9.9% as margin expansion across both the aviation and Fleet segments was offset by margin compression within the federal and defense segment. Turning to slide seven. Aviation segment revenue of $102.6 million increased 40% year- over- year in the third quarter. Both our distribution and MRO businesses grew on a year-over-year basis, up 35% and 55% respectively. Distribution continues to operate above pre-pandemic levels, while commercial MRO remains 10% below pre-pandemic levels. Aviation Adjusted EBITDA increased by more than 86% year- over- year, while Adjusted EBITDA margins increased by 326 basis points year- over- year to 13.2%. Margin expansion was driven by achieving scale on new programs, improved MRO results, and disciplined price and cost management across our mix of offerings. Within the aviation segment, we maintain our assumption of year-over-year revenue growth as we look to the fourth quarter. The newly announced distribution deals highlighted earlier will contribute to revenue beginning in early 2023 as we ramp the programs through the first half of the year. We have updated our assumptions for aviation Adjusted EBITDA margins from approximately 10%-11% to 11%-13% for the full year of 2022. This improvement is driven by both stronger business and general aviation market dynamics and a broader MRO recovery, partially offset by approximately 25-50 basis points of dilution associated with our prior year acquisition. We maintain our longer-term mid-teen Adjusted EBITDA margin expectations for the segment. Turning to slide eight. Fleet segment revenue increased 7% versus the prior year period, driven by higher commercial sales and e-commerce fulfillment support. Total commercial revenues were $25.4 million in the third quarter, an increase of 23% versus the prior year period, and represents 39% of total segment revenue. US Postal Service revenues were up 7% on a year-over-year basis, which is included within our other government revenue. Segment Adjusted EBITDA of $8.7 million increased 13% versus the third quarter of 2021 as Fleet continues to scale offerings and solutions for commercial customers. Adjusted EBITDA margin grew modestly in the quarter as the business drove scale while shifting towards lower margin commercial revenue. Looking to the fourth quarter, we continue to anticipate flat to modestly higher quarterly revenue year-over-year as growth in commercial revenues offset flat to modestly lower seasonal USPS revenue. We maintain our assumption of an Adjusted EBITDA rate between 12%-13% for the full year of 2022. We continue to remain focused on delivering higher EBITDA dollar contribution year-over-year as this segment continues to drive revenue diversification as a key strategic initiative. Looking towards 2023, we expect the new Fleet commercial Center of Excellence to contribute to revenue in the first quarter and ramp progressively throughout the year as we fully operationalize the facility and expand inventories. We expect lower Fleet segment Adjusted EBITDA margins in the first quarter of 2023, driven by this new facility launch with progressive improvements from there on out. Turning to slide nine. Federal and Defense segment revenue increased 12% on a year-over-year basis, driven by growth in U.S. Navy aftermarket services. This quarter, the FDS segment saw meaningful revenue contributions associated with the transfer of a naval frigate to Bahrain as part of our Foreign Military Sales program. Federal and Defense Adjusted EBITDA was $2.8 million in the third quarter, a decline of 57% year-over-year. Adjusted EBITDA margins declined 600 basis points on a year-over-year basis to 3.7%. While we continue to right-size this business and develop a solid pipeline of potential opportunities with our government customers, the continued shift from fixed price to cost-plus contracts negatively impacted the segment Adjusted EBITDA margin in the third quarter. Cost-plus contracts now represent 53% of Federal and Defense segment revenue versus 40% in the same period last year. 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 U.S. Army. We continue to expect Federal and Defense segment Adjusted EBITDA rate to be approximately 4%-5% for the full year of 2022, driven by the contract mix of cost-plus versus fixed price awards. Turning to slide 10. At the end of the third quarter, we had $99 million in cash and unused commitment availability under our $350 million credit facility. After the completion of the third quarter, we successfully amended and extended our existing loan agreement. This amendment benefits VSE in multiple ways. First, it extends the maturity of our existing arrangement from 2024 until 2025. Second, it reduces anticipated borrowing costs. Lastly, it increases the availability under our credit facility. This amendment provides flexibility to further our business transformation, organically invest in new business opportunities, and remain opportunistic for strategic M&A. As expected, we generated $11.3 million of free cash flow in the quarter, primarily driven by revenue growth and the successful execution of recent aviation distribution awards. At the end of the third quarter, we had total net debt outstanding of $298 million. Adjusted EBITDA for the trailing 12-month period ending September 30, 2022 was $86.9 million. In line with the prior communications, net leverage was down from 3.7x in the second quarter to 3.4x in the third quarter. We maintain our outlook for positive free cash flow for the full year 2022. However, we may choose to strategically invest in working capital to support newly announced distribution deals in our new Memphis Center of Excellence before year-end if it can positively impact revenue and margins in 2023. These strategic investments could affect full year free cash flow, and we expect to share the details of such during our fourth quarter call. We're proud of the strong third quarter performance and look forward to sharing our full year results in March. With that, operator, we are now ready for the question and answer portion of our call. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star and then one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and then two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. The first question we have is from Kenneth Herbert from RBC Capital Markets. Hey, good morning, John. How are you? Good morning, Ken. Yeah. Good move, obviously in the aviation segment. My first question, you've nudged up the guidance there for the full year EBITDA. I just wondered if you can provide a little bit more detail on where you're seeing the incremental upside, and then specifically, how are you handling inflation when you think about increased costs from your suppliers on the distribution side or increased costs on the MRO side? Are you able to pass most of that through? It sounds like it, but just help us better understand the moving- Yeah, sure. Moving pieces within inflation. Yeah. I'll start with the inflation piece, then I'll let Steve talk about the EBITDA guidance. With regard to inflation, you know, we are in a predominantly transactional business, you know, being 100% aftermarket focused. So we do have the ability, for the most part, to push price down to the end user customer as we see price increases. So we are not seeing the inflationary pressure on material costs impact our margins. Obviously, labor has a slight play there, but we're not seeing the material costs have that negative impact. Let's see. You wanna address the- Yeah. Margin improvement? Yeah. I think the second half of this year in terms of improvements versus what we initially anticipated, I think the business and general aviation businesses remain quite robust, and that's helped improve our expectations for the business. The second half of it is an improved MRO recovery, and that's both on the business and general aviation side and on the commercial side. We've talked a lot about sort of expecting what we expect throughout the year for commercial recovery. We're now at about 10% below pre-COVID levels in our commercial repair business, which has improved versus the second quarter, and continues to pace in line with the overall market recovery. Our business and general aviation repair businesses continue to accelerate in terms of investments we've placed into those businesses. All of that, I think, has contributed to the expectations change. That's great. Thank you. If I could, in the Fleet business with the opening of the Center of Excellence in Tennessee in Memphis, how can that contribute or what's the potential opportunity for revenue increase from that? Or should we think about that more as you come out of the investments as more accretive to margins? Both. It'll be revenue first. Steve, you wanna give a little color? Yeah, sure. Ken, you know, if you look at the run rate for our commercial business within Fleet right now, I'd say it's, you know, let's call it roughly $100 million commercial business at this point. We think that as we look towards next year, this can contribute up to potentially $50 million of incremental revenue, which is an important step for us as we think about building our business. Obviously it's gonna take us some time to ramp the facility, ramp our capabilities, and we expect that this will be an important pivot point as we think about the overall diversification of our revenue from the United States Postal Service and commercial. As it relates to the margins, you know, we've made reference to this earlier, but we will see some margin dilutive effects, driven by the investments we're making to build the facility, and ramp it up, as well as the fact that the commercial revenues do come with a lower margin rate. However, we are very, you know, very bullish on this opportunity for the diversification effect it has, as well as our opportunity to grow long-term EBITDA dollars. That's great. Can you quantify or at least help us bracket the potential margin impact or sequentially how we think about the first quarter of 2023 relative to how you should come out of this year in this Fleet segment? You know, I don't think we're ready yet to give the specific guidance. I think it's gonna take us some time to really get our arms around the ramp and the production, in terms of hiring of new individuals and exactly how it's gonna translate into revenue. We've tried to give our you know, best estimate at this point, which is to say that we expect it to be dilutive in the first quarter. At this point, I don't think we're ready to provide any specific range. Perfect. All right. Hey, nice quarter. Thank you very much. Thanks, Ken. Appreciate it. Next question we have is from Michael Ciarmoli from Truist Securities. Hey, good morning, guys. John, Steve, thanks for taking the question here. Nice results. John, can you just give us a little bit of color on aviation? I mean, it sounds like, you know, trends are pretty favorable, but revenue's down a bit sequentially. Did any noticeable changes in demand, anything different from the customers, just from 2Q to 3Q or, you know, any color you could provide on the sequential downtick in revenues? Yeah. No, just a little bit of seasonality. You know, we're going through an integration with our global parts business, so slightly slower sales there, but nothing. I wouldn't say anything material. On the commercial side of the business, we are seeing very consistent month-over-month, just nice gradual improvements in inputs in our MRO business and in bookings on our distribution business. Business and general aviation tends to be a little bit more driven by activity, you know, because it's very engine-focused, so a little bit more cyclical in nature there. Nothing, you know, I would say nothing special in the quarter. A few one-time orders, but nothing special. Okay. Got it. I think you called out the agreement with Lufthansa and you know, now having the ability with the Southwest deal, you know, it seems like you've got a natural sort of sales channel there. You know, can you just give us an update on what's happening? I guess, you know, looking at the headlines this morning, it sounds like Southwest is you know, getting their jets at a slower pace. Want to know if there's you know, if that's impacting sort of your expectation with that program to get access to that material on those older planes. Yeah, there's about 250 aircraft. I think we were a little bit more conservative in our internal forecasting than what the initial proposal was, because we just assumed things are gonna get pushed out more than they're gonna get pulled in. We feel very comfortable with the inventory pipeline that's coming in, you know, and we'll put ourselves in a position, you know, partnering with Southwest to be the largest used serviceable material supplier for 737, 700s, and 800s as those aircraft start to get, you know, continue to get torn down. We're seeing nice activity, you know, across different geographies supporting that product. Okay, got it. Just to maybe tie this in, you mentioned the Memphis facility and potentially investing in working capital, but you've got this range of other deals that you've also announced. Some of them are extensions, some of them are new, but should we think about you know, any potential startup costs or additional working capital investment, inventory that might also be a little bit of a drag on cash even as we enter into you know, 2023? Steve, I'll let Steve address it. The return on the Fleet investments is very quick, you know, because that inventory does turn, and getting that inventory in and seeing the revenue generation from it, you know, within the next two or three quarters is going to happen. Steve, you want to give a little color on kind of investments and what that looks like? Yeah, sure. As you noted, Michael, there's some elements of it that are new programs, some that are extensions. I'd say in the aggregate, if you look at all the announcements, including the Memphis facility, there's probably about $60 million of working and capital investment that we'll make into our business over the coming six months or so, and probably about $10 million of CapEx next year as part of all the growth that we're experiencing. I'd say of the $60 million in working capital, there's maybe up to a third of it that could be in the fourth quarter, depending upon how things play out. I know we mentioned this earlier, but you know, we're gonna look to strategically, potentially bring on inventory to support customers, support the partnerships with the OEMs especially, and then see if there are revenue opportunities. There's some element of uncertainty to that as we play through the remainder of this year. As we think towards next year, there's definitely investment, as I referenced, and then we expect, as John mentioned, for it to begin to turn into revenue shortly thereafter. Gotcha. Last one, I'll get out of the way here. On Memphis, I think you mentioned, you know, $50 million of revenue once everything is up and running and operational. You're not saying that's $50 million of revenue in 2023. You're saying sort of on a full run rate once that facility is mature and going full tilt, it'll generate $50 million? No, we're saying $50 million in 2023. I mean, it'll obviously ramp up throughout the year. $50 million. Yeah. I mean. Okay. Just to give you. Okay. Just to give you a feel of what's happening today, we're capacity constrained, so we can't add SKUs. I talked about the SKU expansion at that facility. We can add SKUs to support our e-commerce fulfillment customers or through our own e-commerce site at this point in time. We are, you know, ready. We've done the work, and the team just needs the facility and the infrastructure to go execute on the plan. That's why I was saying the return is pretty quick on the investment there. Got it. Okay. You're comfortable with us modeling? We're gonna see kinda upper teens, 20% revenue growth in Fleet next year with that $50 million? Well, yeah, I mean, there's the offset to that, which is the US Postal Service, which we anticipate to be- Yeah. Okay. You know, let me put it this way. Yep. We haven't given guidance on that for the full year next year, but there's some- Yeah. Likely some declines there. Okay As we continue to articulate. You know, what we tried to articulate is that, you know, we expect to see some margin dilution. As I mentioned, it's gonna take us certainly the first quarter we'll see a bigger impact on margins, but it's gonna take us some time progressively get back, as it relates to kind of getting to full ramp rate, and there's the mix shift dynamic on the commercial revenue channel versus the US Postal Service. Of course. Got it. All right, perfect. Thanks, guys. Thanks, Mike. The next question we have is from Austin Mollo from Canaccord. Good morning, John and Steve. Great quarter here. My first question, within aviation, that we're seeing on the commercial side, is that largely being driven by airlines now coming to you with some of the deferred maintenance that they put off? Yes, I think it's a little bit of deferred maintenance. I think it's you know RPKs continue to improve compared to 2019 levels as well. I think it's just it's just probably a balanced demand improvement across you know our commercial airline customers. Again, we continue to see that consistent kind of improvement both in distribution and in MRO on the commercial side. Great. Just on the Fleet segment, are we seeing margin improvement in any of the commercial sales, or is it primarily just there's higher USPS revenue in the mix? I'd say we're beginning to see some improvements on the commercial side, but it still remains dilutive to the overall mix of the business. To your point, there's an element of improvements with the United States Postal Service being up, about 6%-7%. There's also some improvements on the commercial side, but I would say it still remains dilutive. Okay. When we think about the multiple new contract wins that were just announced within 2023, I know you sort of said phase in in the first half, but should we think about that as, like, late Q1, early Q2? What's sort of the timing there on that phasing in? Yeah. I'd say, it's gonna phase in over that time period, so it's not gonna be fully effective for the first quarter. If you look at the aviation deals that we've announced, I'd say, you know, we're looking at maybe call it $10 million-$12 million of incremental revenue for next year, with opportunities for us to continue to support more customers, depending upon the timing of the transition and inventory transitions and the like. But over that time period, you know, 2Q is probably a fair approximation, but we'll share more updates when we get to the fourth quarter call and we actually get through some of the implementation phases in the next couple of months. Okay, great. Thanks for all the details. Thanks, Austin. The next question we have is from Louie DiPalma from William Blair. Morning, Louie. John, Steve, Nolan, Tarang, good morning to you as well. Congrats on the launch of the new Memphis facility. I was wondering how great of a capacity increase is the new facility versus your existing facility? About 100% increase from our existing footprint. Great. Related to this, facility, what types of new features does it have from a technology standpoint to increase productivity and ultimately margins? Yeah. I mean, we're going live in the site with a new warehouse management system and a new ERP system. We're going live in the next few weeks with that new system. We will move in 2023 to more of a robotic warehousing system. We will not do that on the launch 'cause we wanna get the site up and running and make sure the ERP and the WMS are talking to each other well. As we get to the back end of 2023, we will start to implement some more robotic warehousing that's in the queue and in the pipeline to help drive productivity improvements as well as order accuracy. Okay. Are you going to shut down the existing facility, or will you operate both simultaneously? No. Our existing facility in Pennsylvania, just outside of Pittsburgh, that will remain as the distribution center and corporate headquarters for the Fleet business. Essentially, the commercial traditional distribution sales and the USPS sales will still be supported out of that facility. Memphis will solely support e-commerce direct and e-commerce fulfillment, you know, through our fulfillment partners. Awesome. Switching to aviation, you announced an expansion of your Pratt & Whitney Canada partnership to the Asia Pacific, and you also announced a distribution agreement, I believe, with Honeywell for their JetWave tail-mounted antenna for the Middle East. Do you already have the infrastructure to support distribution in Asia and the Middle East, or is this an incremental cost? Also, can you describe, like, overall the international opportunity for your distribution business? As right now, I believe it's primarily, you know, domestic, but- Yeah. I mean, Louie, yeah, from a strategic perspective, we're definitely highly domestic. We have a team in Europe and have plans, other plans in 2023 to continue to grow there. The opportunity with Pratt & Whitney Canada to support Southeast Asia is a great opportunity. We'll be supporting out of both Brisbane and Singapore. We do have existing infrastructure in Singapore to support that. We will work with a third-party logistics initially in Brisbane. We don't need. There's not a tremendous amount of cost and start-up cost to get that program up and running. Then for the Honeywell JetWave program, that will be supported out of our existing infrastructure as well. There's not a lot of upfront cost, but we do see a lot of cross-selling opportunities as we bring on new customers in these regions that we're not supporting today, specifically in the business and general aviation market. Great. One final one. What impact does the expansion of your NAVSEA program contract have on the renewal of the long-term contract? The expansion is essentially to support our Egypt customer. Okay. The Foreign Military Sales program that we have with NAVSEA is a U.S.-based program, but we do support foreign military through it. Our customer through Egypt essentially wants to get the scope of their work completed, so the ceiling was increased on that program, and that's predominantly to support Egypt. We are anticipating an award for the complete recompeted renewal in early 2023. Okay. In the slides, you mentioned how a portion of, I think, the Bahrain frigate is non-recurring. Will there be growth in 2023 over 2022, or is most of the non-recurring revenue in 2022 such that there's a headwind for 2023? There is. A ship transfer, when the U.S. does a ship transfer, we have strong ability to have access to that through our NAVSEA contract, and it's a great opportunity for us to support that program. Those are not consistent programs. They're one-off programs. They are large programs and large in revenue and non-repeatable. The NAVSEA program will have a lower revenue in 2023. Much more. Okay. In line with the consistent revenue we've had in prior years. Okay. I think in your 10-K it said, I think for the past few years, it's been around a $100 million run- rate. Exactly. Is that what we should expect? We haven't finished the forecast yet for that program, but I'd say in that range is how you should be looking at it. How much in revenue was it generating in 2022? We haven't necessarily shared it, but I'd say the Bahrain ship transfer in the quarter specifically was up about 86%. That drove the majority of the 86% increase within the NAVSEA program. NAVSEA is about 1/3 of the business, so that should help give some approximation. Awesome. Thanks, Steve, and thanks, everyone. Yeah. Thanks, Louie. Thank you. Ladies and gentlemen, just a reminder, if you would like to ask a question, please press star and then one now. The next question we have is from Josh Sullivan from The Benchmark Company. Hey, good morning. Morning, Josh. Morning. Just on the new Memphis facility, you know, great location for the organic business. Curious how much of the decision was aimed at capturing maybe larger Fleet customers that may operate in the area. I guess was choosing the location opportunistic, or are there larger potential customers who might have had some input which might be driving that $50 million goal? No, it's, it actually wasn't based on that. It's really based on the ability to get e-commerce parts out as late as possible. That business is obviously highly transactional. We wanna be able to take orders as late in the day as possible and get them out for same-day shipment. We also wanna be in a city that has, you know, a reasonable cost of labor and reasonable lease rates on warehouse facilities and put us in a position, where, you know, we've got the existing infrastructure in a city like that, and Memphis just happened to check all those boxes. We did look at a number of locations. Got it. On the aviation side, you know, what are your needs to hire technicians to continue the growth? Or maybe how much excess capacity do you have built into the current infrastructure before you need to expand? I'd say in distribution, we still have built capacity to continue to expand, and we do expect, you know, to be able to scale that business a little faster. I would say when we look at the MRO businesses as they start to recover close to pre-pandemic levels, we are in a position where we don't need to add dollar for dollar of SG&A, but we'll definitely need technicians to do the work. Got it. Thank you for the time. Thanks, Josh. The next question we have is from Jeff Van Sinderen from B. Riley. Good morning, everyone, and let me add my congratulations on continued strong overall metrics. Just wanted to follow up regarding the $350 million in contracts you announced. Wondering if there's anything notable there relevant to margins? Steve, you wanna address that? Yeah. No. I think we maintain our longer-term projections of that business being a mid-teens margin rate business. I don't think that the deals that we've announced would change that in terms of our expectations. Okay, great. I think you mentioned some of the considerations around the new Memphis facility and why you picked that. Just wondering if you can touch on labor for that facility, how you're working around that, and then I guess generally what you're seeing most recently overall on the labor front. Yeah. I mean, we're starting to see a little bit of stabilization, I'd say, in terms of labor. We are, you know, we do have our leadership team for the Memphis facility hired and on board, and we're going through, you know, recruiting process, you know, essentially right now to get ourselves ramped up for a, you know, a Q1 start. The local area has been great and provided a tremendous amount of great support for us, and we do feel, you know, very comfortable that we're gonna be able to staff the location. Okay, great. Just wondering any update you can provide in terms of your acquisition pipeline, maybe latest that you're seeing there. Yeah. I mean, M&A pipeline, you know, is still looks strong. And we've shared mostly in the aviation business. Obviously now with our announcement on the Fleet business, you know, can see why that wasn't the focus area. We've got a tremendous organic pipeline there. We're continuing to look at both MRO and distribution businesses, and pipeline is looking strong. You know, the markets are a little, I'd say slower in terms of deal flow than probably anticipated. You know, we still remain very focused on growing both organically and inorganically. As the right deal comes forward, you know, expect us to move forward if it, you know, meets all the criteria that we've kind of previously- Okay, great. All righty. I'll take the rest offline. Best of luck in Q4. Thanks. Appreciate it. Speak soon. Thank you. Ladies and gentlemen, just a final reminder. If you would like to ask a question, please press star and then one now. The next question we have is a follow-up from Michael Ciarmoli of Truist Securities. Hey, guys. Thanks for taking the follow-up. I guess, John, just maybe the one negative here in the quarter. The federal EBITDA margins, you know, look like a multi-year, maybe even an all-time low. I mean, is anything? Are these just still bad contracts flowing through? I mean, I realize there are a lot of cost-plus. I mean, are the- No, Mike, the biggest driver of that is actually the bridge contract for the NAVSEA program. Essentially, when that bridge contract came through last year at $100 million and now the $80 million addition, the contract immediately flips to a cost reimbursable program at a lower margin. Now, over time, you can work to move task orders to fixed price and, you know, and work on a margin improvement plan. With a new contract, you know, essentially coming out in early 2023, it's a very difficult time to get contracting officers to go through that process. We are in a position right now where we're essentially almost that entire program has moved from a balanced program of fixed price and cost reimbursable to essentially all cost reimbursable. That's the biggest driver of it. I guess I'm still surprised. I mean, that's really low for a cost-plus, and presumably you can pass through all of your inflation. It's just I mean, is it just, is it low fee? Is it just not a great contract? I mean, it just seems artificial. No, it's an outstanding contract. As you know, if you look at a lot of these low cost, technically acceptable bids out in the market, you know, they traditionally have a very low risk, but they're essentially, you know, you're seeing many of them well below 5% operating margin. That's where those contracts tend to trade. This one does perform better than that. But it is, again, without the ability to move task orders to fixed price, it's put some margin pressure on that segment for sure. Okay. Got it. Perfect. Thanks, guys. Thank you, sir. At this stage, there are no further questions. I would like to turn the floor back over to John Cuomo, President and CEO, for closing comments. Thanks for attending our third quarter call today, and look forward to speaking with you in early 2023 to talk about the full year and our outlook for 2023. Have a great rest of your day. Thank you, sir. Ladies and gentlemen, that concludes today's conference. Thank you for joining us. You may now disconnect your lines.