Huntington Ingalls Industries, Inc. (NYSE:HII) Q4 2019 Earnings Conference Call - Final Transcript

Feb 13, 2020 • 09:00 am ET


Huntington Ingalls Industries, Inc. (NYSE:HII) Q4 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by and welcome to the Q4 2019 Huntington Ingalls Industries, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session.

[Operator Instructions]

I would now like to hand the conference over to your speaker today, Dwayne Blake, Vice President of Investor Relations. Please go ahead, sir.

Dwayne Blake

Thanks, Josh. Good morning and welcome to the Huntington Ingalls Industries' fourth quarter 2019 earnings conference call. With us today are Mike Petters, President and Chief Executive Officer, and Chris Kastner, Executive Vice President and Chief Financial Officer.

As a reminder, statements made in today's call that are not historical facts are considered forward-looking statements and are made pursuant to the Safe Harbor provision of federal securities law. Actual results may differ. Please refer to our SEC filings for a description of some of the factors that may cause actual results to vary materially from anticipated results.

Also, in the remarks today, Mike and Chris will refer to certain non-GAAP measures. Reconciliations of these metrics to the comparable GAAP measures are included in the appendix of our earnings presentation that is posted on our website.

We plan to address the posted presentation slides during the call to supplement our comments. Please access our website at and click on the Investor Relations link to view the presentation as well as our earnings release.

With that, I'll turn the call over to our President and CEO, Mike Petters. Mike?

Mike Petters

Thanks, Dwayne. Good morning, everyone. And thanks for joining us on today's call. 2019 was a great year for HII and I want to personally thank each of our 42,000 employees for continuing to execute their daily activities with an unwavering commitment to our core principles of safety, quality, cost and schedule.

I would characterize 2019 as a year of positioning for the future. We captured major contract awards that resulted in a record backlog of $46 billion at the end of the year. We enhanced our shipbuilding facilities by bringing new projects online to improve efficiency and affordability as we completed the fourth year of our five-year generational capex program, and we challenged our employees to remain focused on execution, while driving continuous improvement, innovation and creativity.

Now, specifically, during 2019, we delivered three ships -- the guided missile destroyer, USS Paul Ignatius; National Security Cutter Midgett; and the attack submarine USS Delaware. And we redelivered the USS Gerald R. Ford following her post shakedown availability. We were awarded an historic $15 billion contract to build two more Gerald R. Ford class aircraft carriers as well as an $8 billion contract for the Virginia-class Block V submarines.

And we successfully navigated through the second year of our shipbuilding program maturity transition and achieved shipbuilding return on sales that were in line with our expectations.

We expanded our portfolio by acquiring Fulcrum in early 2019 and additional portfolio-shaping activities are continuing with the pending acquisition of