Question-and-Answer Session
Operator
Your first question comes from Gary Liebowitz - Wells Fargo Securities.
Gary Liebowitz - Wells Fargo Securities
Joe, you mentioned that the orders for WIN-T are coming in pretty nicely. I guess you’re not seeing any of the effects of, I think there is the talk of possibly restructuring part of that program in connection with the future Combat systems restructure, or maybe emphasizing certain elements of the program, but you are not seeing any impact of that on your business?
Joe Caldarelli
No, we haven’t. With the orders that we currently have, and these are firm orders and releases, it carries us out into the 2011 timeframe. So any restructure would impact us beyond that period, but we’re pretty secure for the next nearly two year period.
Gary Liebowitz - Wells Fargo Securities
Also I was wondering, if you could quantify what some of the cost saving measures, what that benefit might have been in the quarter, because you attributed the strong margin improvement sequentially to both the cost initiatives and also the mix of sales apparently and I’m just trying to get a sense of how much of the margin improvement is sustainable because they’re due to the cost saving measures as opposed to the mix issues which could fluctuate quarter-to-quarter?
Joe Caldarelli
Well, we’ve estimated the annualized cost savings in the $10 million range. So we haven’t specifically tried to calculate the impact on this quarter, but it’s reasonable to assume, a couple of million plus at these rates and of course as the sales rate increases we expect to see incremental benefits. So that’s probably a reasonable way to model it.
Gary Liebowski - Wachovia Capital Markets
Just one last one for Joel, I mean cash flow was a bit stronger than I had expected, and it seems like you’ve almost met your full year guidance for free cash flow through nine months. What were the working capital changes that led to such strong cash flow in the quarter?
Joel Littman
There’s a variety of items, but some of the items include receivables, we had good collections in the quarter. Our receivables are running about 45 day sales outstanding, and I consider that an excellent level of receivables, that’s one of the impacts. We continue to perhaps and are able to collect advance payments from customers, that’s also a big helper on cash flow.
Gary Liebowski - Wachovia Capital Markets
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