L3harris Technologies, Inc. (LHX) September 9, 2026 Conference Transcript

But good afternoon, everyone. My name is Sheila Kayalu. I'm with the Jeffreys Aerospace Defense and Airlines Equity Research Team for those on the webcast. And we have the LHX team here, Ken Sharp, who's graciously stepped in as who's the CFO since March of 2026. So Ken, thank you for being here. And lots of action going around what's happened. And I know you've taken care of all the investor engagements and Sam Mehta's appointment to CEO. And I really appreciated Chris because he was a great professional mentor to me. And he came to this conference when no other companies would come. So he's been a supporter of mine and a great professional mentor. So I really appreciated what Chris brought to the table to LHX and all the growth that's ahead. So with that said, you know, how do you think about just the continuation of the strategy here and what Sam's background brings to the table as well?

Sure. So, look, I love Chris, and I've known him for a long time as well, Sheila. I think we both worked at the same firm eons ago, and I enjoyed my time with him. It was great joining L3 Harris, and so I look forward to building on what he did candidly. I think we have a great portfolio. Sam would recognize that. I think that, you know, we've gone through a lot of M&A, right, putting L3 together with Harris, then putting on two other acquisitions, including Aerojet, Rocketdyne, and about 10 or 12 divestitures in the process, probably 13. I should count the latest one. I think all that's been dizzying for investors a little bit, and we've also reorganized the business. So I think where we're at right now today is let's build on the great stuff Chris has done and the great portfolio we have, because I think we do have a spectacular portfolio, very well positioned. And Sam would say, hey, look, I like the business. I like what we did when we reorganized it. You know, we kind of lined ourselves up with multi-domain sensing, spectrum dominance, and then the missiles business. I think it's good. By the way, the last earnings call, we talked a lot about the missiles portfolio because I think people viewed that as maybe we paid too much for a transaction. I think if people could pay $4.7 billion for the business today, they would think that was a steal today. So I think there's a lot of goodness in the business, and I think Sam's going to drive it and build off of it. He would say, hey, look, when we're focused on driving the business, we get great results. Shareholders like it. And when we get distracted and start chasing some things around, people don't like it as much. So our job is to get kind and normal and boring and drive the business.

Since you called it out, I'll maybe ask that as well. You paid $4.7 billion for Aerojet. Is there a different change of how Sam and yourself view the value of the business to the core LHX portfolio today?

Sure, and I don't know if it's a lot different than Chris, and maybe if Ken Benningfield was here, he'd probably have similar comments. It is a highly valuable asset, whether it's inside L3Harris or outside L3Harris. I think there's benefits of being inside L3Harris, and, you know, just given the fact that you have the ability to make the investments, you don't duplicate a lot of pieces, and you can focus on driving the business, meaning build the missile capacitization, while we're actually, L3Harris is picking up some of the more administrative pieces. So, I think that makes sense. It's why when we talked about the IPO, we said we'd revisited in mid-2027. We also have, I think everybody realizes, some contractual requirements around the timing with that. We're not required to do an IPO, but certainly take business efforts to do on part of our Department of War investment. Not required to do an IPO, but certainly something we need to work through the process, which is what we're doing. And by the way, this is something we put criteria together with Chris and Ken and Sam and briefed it to the board. The board thought it was really thoughtful. We said we weren't going to go chase multiples, so everybody asked why we positioned this for mid-next year. I just think it makes sense. At the end of the day, we'll have six good quarters of performance. We'll get through some of this government, hey, CRs and, you know, Blue Wave and 833 language, which was highly unhelpful, right, I think our stock was down 7% that day, and we don't seem like we need any more bad news, so we get enough news, and we need to go fight through those things. So get through the government piece, get stuff under contract. I mean, we're talking about $20 billion of new contracts, and it's kind of mind-numbing, right? So how do we get them under? We had the first yucca yesterday. It went out $4.7 billion. And by the way, every time we have a press release, there's always more questions. I call Tony and ask. Yeah, I'll get better at press releases, I think, because I thought it was clear, but we're never clear, I guess. By the way, it wasn't aimed at your questions. I got more this morning. So I just think we have a great business and a great position. So let's go run it and drive value for the LHX shareholders.

I'll go back to missiles, but just sticking on high level for a minute, how do you think about just the – we mentioned some of the enduring elements of the strategy. Where do you think Sam will focus in on the most to start as you think about just everything going on, whether it's the defense backdrop, the positive Golden Dome, missile defense spending, Europe, NATO? How do you think about how you'll conquer the growth ahead of you?

Wow, you're giving me lots of options. So, you know, it's funny because I think supply chain right now is something that's kind of going bump in the night for a lot of companies. You know, we have our CST business. We've talked about a second half ramp up pretty significantly in the second half. And then you wake up and the people that are buying all the stuff for AI are now impacting your radio capability as far as manufacturing it. So you're kind of scratching your head. I think Sam's right now, his big focus is on making sure we're executing at the business level, and then I would say also making sure he spends the time with the customers. It's no surprise, right? Everybody, Chris had access to pretty much everybody in the Pentagon, and I think Sam's working to go make sure we have that same access. I don't think it's a problem. I think he's doing a really good job at it. He was in with Feinberg last week, and, you know, he was out at Camden making sure we deliver on the missile side. I think maybe just taking a step back, just maybe more operational. I'm a big radios fan just because the capability with, you know, the software side. Chris maybe was a little less excitable about radios. You know, you can debate why. You know, I think I kid around. I say I put the race shield in his script three times last time. He took it out twice, and I said, well, if you take it out again, I'm just going to put it in the CFO's script, which really isn't a good place for it. So then he relented, right? But I think it's so important to talk about, because we say software-defined radios. I don't think people really know what that means, and it really means about putting technology on a radio to help the warfighter. And I think you'll see Sam spend a lot of time with the comms business, so I'd like to see us talk more about the strategy on comms, What we can do to win the battlefield for our warfighters and protect them. So I think that's really important. I think Wraith Shield is great. If you guys haven't watched the video, I think it is very important as far as the capability.

Okay, we'll go back to comms more because I think it was maybe animosity towards Rochester or something like that in its preference for Florida.

I'm not sure. We can hit on that, sure.

How do you think about, you know, just on the missiles business, the Department of War's billion-dollar investment? How much of that is flowing through? What are you setting up in terms of just buildings, infrastructure, automation, and pursuing, you know, supplier agreements as well?

Yeah, I would say we're setting up too much. That's the challenge for everybody. So I think Ken Benningfield is doing an amazing job. He's out working routinely. Sam was in Camden last week, and he said, you know, he calls me up, and he said, it's like the Manhattan Project. There's more bulldozers and things getting moved to build. It's 100 different buildings, ultimately, not just in Camden, but everywhere. We're also working, as you think about the supply chain, up and down the supply chain to make sure that we can meet our commitments. And we've been, and maybe wrong or right, and I'm waiting for hopefully not to get a bad report on this, but we've been out driving commitments to our supply chain way ahead of contract with the Department of War. Ken said this. I think it's right. We've been focused on winning the race, which means get the capacity in place, get the vendors lined up so when other competitors come in, they're behind us, and we'll be delivering all the capacity to the Department of War that they need, that the country deserves, with Protect the Homeland. We're very proud of this, and we're going to go drive the business. So now we've done that ahead of contract. I don't think there's a lot of contractors doing that.

That's great. Can you give us any insights on that capacity expansion roadmap as we think about solid rocket motors?

Sure. It feels like it changes routinely a little bit as far as the demand signal just keeps getting bigger. The different missiles that we provide components to, and we're on pretty much all the major programs, we're generally sole-sourced on, I would say, most, if not all of them. That's probably what creates some of the general energy around new entrants and all of that, which I think is important, and we love competition. We just hope they open up the whole missile architecture and leave things like Seekers to folks like us who have great products that actually built in the old L3 business. I think we have a Seeker that can go on Pack 3 today, and we want to prove it out because we think it's a pretty important part. So things like that we think are really important.

And I guess, what are the biggest constraints that you're seeing today in terms of doubling the capacity over the next few years?

So I would say, and I probably say this too much, we don't have contracts. So I would like contracts, first, second, and third, because I'm the guy that keeps signing off on stuff for Ken to say, go build and spend more. I mean, like I said, we got on the last earnings call and we said we had $2.2 billion out in either supply chain or building commitments. And at some point, I need a customer and product to bill them. And if I don't have a contract, in theory, I can't, right? I mean, we know it'll get resolved, but I would sleep a lot better if I had multiple contracts. And I think everybody saw the PAC-3 award, right? $4.6 billion. We didn't put any of the escalators or anything in that. That's 80% of the PAC-3 demand. You guys can bounce that off of the 833 language, but that's 100% of all the DACs as well. So I think we're in a good position. We just want to go get busy and build them. You know, look, Ken's working up and down the supply chain, moving dirt. I mean, you'd be amazed. I mean, one day we're out working in Orange, and then the construction workers are like, hey, we have to go work someplace else because it's a data center, and they actually have preference over you. And then we go back to the Department of War, and they come back the next day and say, nope, you have preference over them. So it is, Ken's got a full-time job at the end of the day working through this. But I think it's really important. I think he's doing a great job.

How do you think about the competitive positioning of, you know, solid rocket motors and propulsion? We hear a lot about it from the new entrants, but also, you know, your market share. Is there opportunity for you to become second source on some programs where you might not be a provider?

So, I mean, for one, there's just so much demand out there. We're happy to see people come in and compete. If it puts a better product in for the warfighter, we're all for it. We think it actually is causing us to drive harder for the business. So one, I want to be open around competition. If it's there, great. We think we're going to outrun everybody. That's been Ken's mantra. That's been Chris's mantra. Sam will carry that mantra on. I certainly have it. I think it's important. So the solid fuel rocket motor place, we feel pretty good. We've been working on some other pieces around, you know, affordable masks, cruise missiles, those kind of things, I think are definitely opportunities. The electronic side, this goes back to the thesis of putting L3 Harris together with Aerojet, you know, 30 percent of what's the missiles business today is stuff that we put in. It's probably 40, 35, 40 percent with the divestiture we just made. I think it's pretty important that we go and do different things on missiles, and we do a lot of stuff with electronics and fuses and so forth, so Seekers, whatever else, I think is a good place for us to play. I think the team just needs to drive, and the opportunities are there.

Maybe moving on to the space and mission systems business, how do we think about what needs to happen for space and mission systems to consistently outperform defense budgets? And just give us an update on what's going on with some programs, whether it's SDA or missile warning and tracking.

Sure. So we just received the latest Golden Dome Award. I think that was last quarter. So we were really the only awardee on the kind of missile tracking, missile warning layer that has been the prime on all five kind of awards, and I would say five tranches, but then we get confused on the nomenclature of what each award's called. So AMDT-3, the three stands for third tranche, but it's the fifth award on a set of satellites, so you guys can figure that out later. I can. But I would say I think we're well positioned. I think the clear Golden Dome gets, I think we're well positioned for it. If we won all five, clearly we have some secret sauce around that. We believe our payloads are very important into that. I think it's why we win. We've been trying to work through the mechanics of, you know, we weren't a space prime, right? We weren't building satellites as a prime. We're now doing that. There's a lot of lessons learned we've been taking in in the last four or five years. I would say some of this we did through our own P&L that probably maybe surprised a few people here or there. Certainly the charge we took last quarter, the $55 million, was on a program we signed a relatively long time ago. But that's what happens when you're kind of breaking in pioneering space. And we look to get that behind us and drive better returns in that business.

That's great to hear. I guess when we think about the business today, $11.5 billion of revenues in 26, what gets it to the $13 billion plus? Where does the billion dollars of revenue come from?

It'll be interesting. We have a fair amount, and this business has been exceeding our expectations, right? The organic growth in the first half is 15%. So it's been a very strong grower. We've had some episodic things with aircraft and so forth, and this business is split kind of a third, a third, a third, but I would say a third on the space side, a third on the ISR. In fact, you went to the Greenville location with Tony. Pretty cool stuff, right?

Best facility visit I've ever been to. I can't stop talking.

See, that got Tony a promotion to go back to do real engineering instead of financial stuff. So, as you know, he's a classically trained engineer. So, I think it's great that he's running a P&L now. So, a third is that ISR kind of aircraft capability and then a mixture on the other third around cyber and some other pieces. You know, we've had a great period of time, right? We'll do better probably this year than we expected in that business. So, let's see where it goes. I think we feel pretty good about it. Certainly the backlog we've built up there will help, you know, whether there's a CR or not, whether, you know, there's other rewards, how quick Golden Dome comes out. I mean, we need to just focus on driving down and, you know, delivering the satellites, getting the, I think there's 72 left that we got to get up in space, so getting those completed and ready to go.

Maybe can we talk about the 955 million AMDT-3 contract for 18 satellites? It now means that you have 70 satellites on order. How do you transition from prototype demonstration to mass production and what it means for your margins as they sit around 10% at the end of the quarter?

Yeah, so if you had to dissect the segment and look at the sector, the space business is lower than the average margin in the segment. So certainly getting that to perform better is important. And as you can imagine, like Tronch 5, AMDT 3 is Tronch 5. So as you get into that next level, certainly we've learned a lot, you know, as far as what buses we're using, what other components are on a spacecraft. And just getting kind of better on the supply chain side, the engineering, I think, has been where the team has been after. I think they've been doing a nice job. How we bid the programs has shifted, and I think we've been trying to be more thoughtful around or disciplined around the economics. So I think that part's good. And, you know, the truth is we've been kind of being somewhat conservative on our booking rates, on the margins, to make sure we deliver. And then as we de-risk the programs, you'll see better and better margins. So, in the past, we probably didn't run with a level of management reserve on the programs that we've kind of built into the programs now.

Maybe I just want to close the loop on the segment margins as we think about space only representing a third. How do we think about, you know, the ISR business? It's gone through a transformation here, and it's on a positive trajectory where margins sit there and the remaining third of the business.

Yeah, and I think the ISR piece is closer to the average margin in the business. So I think it is to your point, and Tony was there, they did a great job of getting that business where it needed to be. We've got a couple very large newer wins as far as new aircraft types. So just kind of getting those kind of laid flat, getting the, I mean, and these are real hard to, until you go on one, you don't realize what the team's doing. I mean, they're cutting new holes, they're filling them full of electric, cutting new holes in the fuselage, sorry, and redesigning kind of the airplanes and what they can, the loads they can carry, how to carry them, how to also do the ISR work that the payload's doing inside. So I think the team's done a nice job. They'll get to a level that it's repeatable, right? They've done that on the domestic side and these new international variants, that's what they're working through now. I think there's a lot of, you know, you asked about growth. I think both on the space side specifically and the ISR side for the aircraft, I think there's a lot of opportunity.

It's great to hear. Maybe just on CSD, let's go to communications. We could finally touch on it. You know, you talked about resilient communication orders of over a billion dollars from European allies like Germany, Poland, and Netherlands. I guess how do you – first, maybe let's size the total communications business and how you think about demands both U.S. and internationally.

Sure, and it moves around a lot because, and maybe for folks, if they don't fully get our radios business, it's generally kind of the military radios. They're highly effective. So if, you know, we have them deployed in Ukraine today, the Russians are very good at jamming communications, so our radios are the best. So we're very good about uploading new capabilities into the radios to get them on different spectrum and so forth. So we're waveforms so people can communicate. They don't get jammed. So at the end of the day, it's a great business where we get into the kind of have the revenue ebbs and flows. We go through upgrades like your iPhone or whatever device you use. We're, you know, right now we're on Falcon 4 domestically. Falcon 4 will go to Falcon 5 in the next probably year and a half. That drives a little bit of demand signal as well because you get better capabilities. It may be different than I found. If you guys ever look at a warfighter, but they have a screen in front of them, a radio, and a battery over here. It's still pretty big, right? It has to have a lot of capability, survive in combat. So, you know, the form factor is important to work down. The compute power, the communication power of the radios are all still unlike your phone, and I'm not a kid, so I have to ask my kids, but they do different things when you get the newer phone, but they all kind of seem to be the same to me. I think our radios aren't all the same, and maybe Chris's frustration with Rochester was they're too hot, and we weren't working the form factor fast enough, and I think we've worked the form factor well, and the Falcon 5 will be that. In the international space, we tend to be on Falcon 3, move to Falcon 4. When we talk about software products going out on these radios, you know, you need the newer variants for the software products. And if you think about WraithShield being this kind of fence that goes around with every radio, that you can detect drones coming in, and literally it'll detect it, sense it, and then jam it and drop these drones down if there are drones, it's pretty important. And so, and for me, I mean, it's like a personal thing, because I used to be a warfighter, and I got a young kid that comes to my house who's a, you know, he's an Army Ranger. And at the end of the day, I said, hey, watch this video, tell me what you think. And he's like one of the, in the Ranger Battalion. So these are the guys that get deployed all the time. He's like, hey, that, I mean, he has a lot of choice words. There's too many people here, it's probably recorded. So I won't use his words, but he would say it's very important. And how do we get it? And, you know, we're working with SOCOM on something like that. And he's very big too, by the way. So I try to be really nice to him. But he dates my daughter. She's probably giving you guys too much. So I get a little worried about that, too. But anyway, that's the importance of the radios. That's why I think getting these software products out, getting capability in the warfighter. I mean, if you think about it, if a swarm of drones comes in, you can't take it out with munitions and firing and kinetics. It has to be kind of jamming and whatever else. It's just a really cool capability. That's what our radios do without any additional kind of weight. It's just software. So I think it's a great business. Tony's now in the business that does the turrets with Westcam and also the counter UAS. I think that's also a really good business. We've talked about a billion dollars in pipeline that showed up out of nowhere because everybody now feels like they need counter UAS systems. You know, our first round of that is really kind of firing $30,000 missiles at drones. You know, the kill rate on it's about 80%. It's probably better now. But we've been working through all the algorithms and so forth. It's been fielded in Ukraine, so it's had live fire activity. So I think Tony's like probably the best salesman for it. Is that right, Tony? Yeah.

I'll check some out at AUSA next month, so I might get to see Tony one more time.

Ah, fabulous. You'll see him a bunch here, because that's going to be his hot spot, right? So, I mean, but, like, with all things like this, we have a huge ramp in front of us trying to get all the electronics. Like, literally, I think two weeks ago, we're working through how do you get the Department of War certifications behind you internationally, because the AI demand is huge. So I think, you know, we've talked about a huge ramp second half, and I've said, hey, revenue ramp second half. We still firmly believe it will ramp second half, but it's probably more fourth quarter weighted. Second, third quarter is probably flatter at the end of the day. But that's a little frustrating because it's such a great business. We want to see the product out. But I will tell you, Sam is working that with the team night and day because we've got to drive to get the supply chain laid flat. It's really two vendors, and it's like fourth-tier materials and that kind of stuff. So it just shows the world we live in today, right?

I have two follow-up questions for that. As we think about the U.S. market Falcon 4 to Falcon 5 over the next year and a half, what does that mean? Is it a software upgrade? What does that mean in terms of investment ahead? And how do we think about the U.S. modernization cycle in terms of what's completed and what's ahead?

Sure. So it's a whole new radio. So it's all hardware. So think of something that this is like big going to something maybe half the size and hopefully has better battery life, heat, more capacity for communication, so more ability to put software on it. So that new radio will probably effectively roll out the end of next year. So we don't want to get ahead of ourselves because we also want to keep selling Falcon 4s because they're very important and we have to keep everything moving. So I think this will just be the next iteration like your iPhone. Like I said, it's kind of like going from an iPhone 5 to a 14, which then I'm not really sure which one they're at today, but maybe a 17 because my kids told me we need a new one. But anyway, I think it's kind of a pretty big evolution. So we're very excited about it.

And what's the percentage in terms of the modernization that you think – how do you think about the modernization cadence as we progress every year?

Yeah, I think somewhere around – we've been at like 40-plus percent in the U.S., and then internationally it's a lot harder, right, because every country – they don't all use our radios, but let's be – if you're trying to communicate, you want this commonality between systems so you can communicate. And then if you're putting your kids on the battlefield, you want to give them the best odds of survivability. That's L3HarrisRadio. So that's why we've been doing a really bang-up job internationally, and that's where you're seeing a lot of demand come in.

One more follow-up question you mentioned. It's a very Q4-weighted business. How do we think about, you know, some of the – I guess, supply chain areas that you're keenly focused on to get that, you know, insured you ship.

Yeah, I would say it's predominantly kind of pieces that go into electronic boards. I mean, we make these radios all ourselves, so it's always putting resistors and stuff like that on boards. So I would say there's some materials in the boards that have gotten to be a little bit harder. We've had to go dual source, different vendors, also, you know, work with countries. Some of these suppliers are not in the U.S., so trying to go explain to them, hey, it's important for the Department of War, engage the Department of War with them, which Sam has done, and vendors, it's a little bit of a positive surprise, candidly, that vendors have said, okay, we're prioritizing you. Our demands aren't as high as somebody building a bunch of boxes for a data center, so maybe that's why it's been a little bit easier, but we hit a little bit of a bump, and I think we'll work our way through it, but we'll certainly talk about it on the next call for sure.

That's helpful. Maybe if you could talk about, last year, the team had mentioned Link16. You've kind of highlighted success of getting Link16 into space. Can you talk about what that means and how you think about NextGen, Jammer, low-band pods, and how does the integration of Palantir's AI platform help with your sensor business?

Yeah, so I would say you've got a big universe there. So let me try. So Link 16 into space, I think it's just kind of important from a comms perspective. We're a big comms company, so owning kind of the framework, how things work, I think is really important. And that was also part of why we bought the business. So I think that's a positive all the way around. Let's see. You then mentioned NextGen Jammer. The team would say they're absolutely on schedule, on price. We're kind of in the first phase of the contract. There'll hopefully be another booking somewhere in the distant future, not too distant future, excuse me, on NextGen Jammer. I think Sam would say it's working really well. I checked him out on the NextGen Jammer recently. But, you know, we're in a development phase on the program. So it's cost type, lower margins. You know, so look, we just need to work through the program. It's a great program to have, right? And we like the position we have with it. And you asked about pods, electronic warfare in general.

We got a lot in that because you've segmented into two segments now. So we need you to break out again and give more color. So I'm not jamming all these questions.

Oh, it's all good. Yeah, yeah. So, and then just kind of electronic warfare in general. I think we, you know, we, you know, like everybody, right? I think it's a very important part of the business. Even putting, you know, I was spending some time the other day just even getting EW platforms on relatively small drones just so you can fly in contested environments and be able to make deliveries even, believe it or not, on ships, for example. That's been one of the mission sets of late. So, I think there's a whole lot going on. I think it's an important space.

Moving on to some financials, the CFO stuff now we need to get to talk about. So, you know, LHX Next, that seems long ago now. How do you think about, you know, the next steps of implementation? You've exceeded your targets of $1.2 billion of savings. How do we think about next steps in terms of residual, sorry, margins from here?

Yeah, so, I mean, one, I think it's very important. I just always look at margins, and I've had enough kind of time at L3 Harris now where people talk about noise in our financials and stuff like that and how to have cleaner quarters. So I'll be honest, I'm kind of a cleaner quarter guy, so we pulled all the one-timers out of our numbers or non-recurring items and look at it and say, okay, we're not at our 16% margin, so what do we need to do to make sure we get to our 16% in a clean way, right? When I say clean, it's not asset sale gains or non-operational things. So, you know, I think a big part of the focus is how do we go drive the business to get there and be able to, you know, any of these one-timers that come up are kind of, you know, on top of the numbers at the end of the day. So the LHX Next program was important. I think, you know, this going in and looking at the business differently and spending a little bit more time operationally, I think, was good. But I think Sam will, candidly, I think Sam will take it to the next level. And, you know, he's already asking for tons of data on spend and consultant spend and different pieces that I think are really important.

I guess, how do we think about the next level deep? You know, is it, you know, what do you think is required, whether it's focused on supply chain? Is it just delivering on operating leverage? Is it mixed transitioning from development to production? That's a broad scope for such a large company, but how do we think about some of the three, maybe few buckets as you think about margin expansion?

Yeah, I think one, getting out of the EAC charges we've had specifically. I know we had some ISR ones. We had some space ones. I think Ken Bedingfield did a nice job of, and we've talked about this, right, making sure we put more management reserve on programs, starting off with lower margins, and then as we have the right to book larger margins, we book them up. I mean, we're bidding them at higher margins, but we are recording and recognizing it's all appropriate from accounting. We're recognizing lower margins in the earlier stages because we have more risk. So I think maybe under, you know, or maybe previously, things got ahead of the company and we're trying to make sure that we take a pretty conservative stance to new business and programs that are earlier stage. So I think that's kind of first piece. And then, you know, if I had to think about margins, it's, you know, like I'll use missiles as a great example. We're going to 3x, 4x, 5x, 10x volumes on different programs. And some of it, you just kind of scratch your head a little bit. If you can't drive higher margin in that, you're doing something wrong, right? And I think some people probably here have even been to Ken's new building or facility in Huntsville. We took the Remington facility. I don't remember how many square feet. It's huge. And part of that is how do we dual source stuff that's either creating issues in the supply chain or stuff where we think that the vendors aren't treating us fairly and make sure that we're getting the benefit of the cost reductions for all three Harris shareholders. So we've got the capacity. So we'll be working through that. So I would like to believe you'll see missiles have kind of supplier margins than where they are. We're not trying to do it on the back of the customer. We're trying to do it by running a better manufacturing, a better operation. And I think Ken will do a nice job with that because that's what he set out to do. And he was already doing that. So I think that's a piece. And just, hey, look, we got to stay focused and vigilant on the business and look at cost. And I think LHX Next was nice because I'm not sure we had taken a fresh look at cost. I think we need to keep doing that.

That's helpful. And maybe, you know, now that you guys have had some time to sit, not really a lot of time, but how do you think about the business, whether it's from a segment structure? I know you've realigned a few times, or from a portfolio standpoint, how do you think about just, you know, are there better fits elsewhere? Or do you think like, you know, maybe breaking down the segments a little bit more, what you'd like to see from here?

Yeah, sure. So I'd like to see no changes. And I think our investors would like to see no changes when we look at all the investor perception studies and everything. In fact, when Sam was getting announced, I sat down with him, went through Q&A. And as every good CFO, you want to make sure you're attached to the CEO and you're not saying something different. And if you don't like what the CEO is going to tell you, you need to change it. So I literally, like question one was, org structure, are you going to change it? And I was all ready for, hey, pump the brakes, we're not doing that. But I let him give his answer was that was the last thing we need to do again. And I went, chick, okay, good. I think we have, and Sam was a big part of the portfolio and structuring it the way he did. And I think it actually makes sense, right? Now, we could argue, could you split space and ISR? Okay, if you're, we run it that way today. It's a construct of the businesses are together that way, but we run them in different sectors underneath. So, okay, but I don't think there's a wholesale, we're going to go shuffle the deck chairs. If we did that, I would probably lose my mind, and I don't think we want to do that. And by the way, I think Sam would, too. Sam's exact quote was, the last thing, Ken, we need to do is do that. I went, yes, that makes perfect sense, is what I was thinking. And he said, and our stock was working really well when we weren't confusing investors and we were driving the business. He actually said driving the business. I added confusing investors. And I think it's important because we did all this really fast. That is an L3 Harris way. The problem is when you do things really fast, it's really hard to give investors all the data broken down by quarter, by different segments and the underlying data, not the segments themselves, because we don't have it, right? So how can we give it to you? If you won a bookings by segment three years ago, it would be hard for me to create that. When you do it fast, when you do it in a slower fashion, we have more of that data. So I would say we're very happy with the structure we have, and we want to continue providing transparency to the investors so they can understand what we know is the great company we have and why you should be investing in it.

Well, thank you for a lot of that clarity. So appreciate you being here, Ken. Thank you very much, everyone, for listening in.

Thank you.