Peter Osterland: All right, understood. I’ll leave it there. Thanks for taking the question.
Lynn Bamford: Thank you.
Operator: [Operator Instructions] We’ll take our next question from Myles Walton with Wolf Research. Your line is open.
Greg Dahlberg: Hi, good morning. This is Greg Dahlberg on for Myles Walton. I’d just had a quick cleanup on SMR. I’ve been previously mentioned content on X-energy, commented here in discussions with Hitachi and Rolls Royce. So, maybe any updates on those discussions and maybe expectations for design revenues into 2024 and beyond?
Lynn Bamford: So, we’ve been very public on, we’re over $100 million content on those four-unit plant for X-energy. We continue to work with them and explore other systems that we can build. I would say, I don’t know if you saw a press release we put out maybe a month or so ago, for a major control system that we’ve won with TerraPower. So, that was something we could go out – go ahead and put out into the public. And so, those are the things that we’re okay to talk about at this point in time, but the activity is very steady across the board on all the major SMR reactors, and we’re really hoping that as we move to our Investor Day next May, our goal is, obviously, we have to comply with what our customers want, but hopefully a lot of this will become a little bit clearer and we’ll be able to really talk about some of where we sit across the various reactors by that Investor Day. So, that’s your key to try to make you really want to come to our Investor Day.
Greg Dahlberg: Okay. Great. And one more quick one, anything on M&A just broad color on expectations in the year end, what you’re seeing right now? Thank you.
Lynn Bamford: So, we have quite a few very interesting properties in the pipeline. I wouldn’t see their, well, I guess, there’s a chance it could be something yet coming by year end, but our pipeline is very healthy and I feel optimistic that in 2024 we’ll be able to have at least one announcement of really good solid property that matches both those strategic and financial filters that I talked about. I will say that, as we said years in the past, we surely have evaluated a lot of properties this year. Small to some very large ones, but considering the cost of capital right now, that’s pretty high bar to, want to make sure the fit is really good to forecast all those things are really solid and we’ve passed on quite a few properties this year, but we have some we’re very optimistic about.
Chris Farkas: Yes. And then just to that point, I mean, just relative to financing, I mean, back in June of 2020, we completed the EAS acquisition and then we paid down $200 million in notes in Q1. And I’m really pleased to report that based upon that strong free cash flow generation that we’ve shown year-to-date, we exited the third quarter off the revolver, so, those borrowing rates are approximately 6%. So, with a strong fourth quarter finish, we’ll be putting some cash onto the balance sheet here, not too much, but certainly preparing ourselves for any of these opportunities that present themselves as we move into 2024.
Greg Dahlberg: Great. Thank you.
Lynn Bamford: Thank you.
Operator: [Operator Instructions] We will take our next question from Louie DiPalma with William Blair. Your line is open.
Louie DiPalma: Lynn, Chris, and Jim, good morning.
Chris Farkas: Good morning.
Louie DiPalma: Congress and Newport News and Electric Boat have referenced how the submarine industrial base remains very fragile, specific with the Virginia-class. Has this impacted you at all? And in the context of how the contractors are ordering long lead time materials, is there the potential that your Navy business expands as Virginia-class production expands?
Lynn Bamford: So, we talked about back in our Investor Day back in 2021, and continue to be true is, we were a very solid supplier across the submarine program and had a great reputation within the customer base or our ability to deliver on the submarine programs. And so, we’re always making it clear that we’re interested in expanding our content across those programs as potentially other suppliers fail, and we have instances of that over during the period, and continue to have very proactive discussions with those customers that you referenced around that topic. It’s something that, you know, again, I guess twice in this call, its something we’re not really that free to speak about the specifics of, but the other area associated with that is, there’s been money made available in the defense budgets, and then there’s money in the current plus up that’s being debated in Congress to support Israel and Ukraine.
There’s actually money in that for the submarine supplier base that we’re considering, how it might apply to us. Make sure we are doing those things as things like AKUS comes and Columbia ramps to about a year and they want to potentially ramp up Virginia that we’re really prepared to do that. So we’re very proactive about considering how we can pursue those funds to be a really solid portion of that supply base into those important submarine programs.
Louie DiPalma: Thanks, Lynn. And across your industrial and defense segments, are you still seeing any supply chain headwinds? I know that several of your competitors have referenced a new reality in terms of the supply chain on the defense side, but it seems you’ve been able to manage better than most, but if the supply chain improves, like should that lead to, like, better output and potentially higher margins?
