Finally this year, we are likely to see the long-expected return to our normal level of travel. While we have expected the return to normalcy to occur before now, it has been repeatedly delayed as the incidence of COVID variants has continued to constrain our ability to travel. We now hope that those travel restrictions are largely behind us and we expect machine clothing travel and R&D will rise by close to $5 million in 2022 compared to 2021.

Feb 16, 2022 / CFO / receipt, needs a key / Chief Financial Officer, CFO | earnings call 2022-02-16 | transcript a0b43bb3-454a-44e6-a5b2-2136c03c75be | chars 23285-23733 | segment 23

As we look forward to 2022, we will continue to see negative mixed effects on our gross margins. The growth on the LEAF program is expected to exceed the total growth of the segment, implying a net reduction of revenue on the higher margin fixed price programs that make up the remainder of our segment revenue. This will lead to a meaningful decline in our full year average gross margin. Beyond the mix effects, we are seeing some impact from cost growth. First, similar to the MC segment, we are seeing inflation impacting all of our input costs. While we are contraction insulated from cost increases on many of our raw materials, That is not true of all the materials we consume, nor is it typically true of labor and logistics. As a result, we'll see inflation-driven increases in both cost of goods sold and SG&A. Second, we expect a return to normal travel. And third, we continue to invest in both R&D and sales and marketing, predominantly to support near-term identified pursuits. While these investments will depress near-term profitability, we believe that the long-term benefits more than justify the expense.

Feb 16, 2022 / CFO / receipt, needs a key / Chief Financial Officer, CFO | earnings call 2022-02-16 | transcript a0b43bb3-454a-44e6-a5b2-2136c03c75be | chars 27222-28345 | segment 27