So we still have $500 million of cash. And we got a lot of internal work to continue to improve the operations to get the profitability up. And that’s how you’ll see us focusing mostly here over 2024. We’ve got a good path toward growth. And now we’ve got to get the profitability up, and that’s how we’ll make internal investments, organic investments to make sure that we’re able to deliver on that. And these are investments that have – a $700 million revenue company needs to be making now to make sure that we are a hugely profitable $2 billion revenue company. And that’s really the focus that we have here in fiscal ’24.
Vijay Kumar: Understood. And Herman, one last one for you here.
Herman Cueto: Sure.
Vijay Kumar: On the EPS guidance, is the tax ratio, should that normalize once these DTAs go away or what’s the normalized tax rate? And do you expect gross margins to be up next year?
Herman Cueto: Yes. Let me take the gross margin one first. Yes, I do expect gross margin expansion next year, so we should certainly count on that. And what I would say is it’s growing. And it’s growing despite some investments that we’re making. So the Boston repository would put pressure on margin. We talked about some of the pricing pressures we’re seeing in genomics would put pressure on margin. But I think the big story is we do see volume. And with that volume coming in, we do expect leverage on our fixed overhead and labor efficiency. So we feel really good about that. Going to the tax rate, yes, I mean, I would anchor you back to where we were in ’23 as sort of a more normalized tax rate. And in the prepared remarks, I think I alluded to, if you remove the – this headwind, you do get back to that more normalized rate in that mid-20 range.
Vijay Kumar: Understood. Thanks, guys.
Herman Cueto: Thanks, Vijay.
Operator: Your next question comes from the line of Yuan Zhi with B. Riley. Your line is open.
Yuan Zhi: Hi team. Congrats on a good quarter, and thank you for taking on my questions.
Steve Schwartz: Hi, Yuan.
Yuan Zhi: Hi, Herman. Hi, Steve. So based on – sorry about this multiple question here, for the guided organic growth 5% to 8%, can you please clarify how much of it is contributed from B Medical? And then is the organic revenue growth in line with the overall industrial growth? Can you highlight the segment you think that grows higher than the industry average? Thank you.
Herman Cueto: Yes. I mean, let me start with a couple of things, and then Steve, feel free to jump in. If you look at – you want – I think maybe the best way to look at it is if you look at Azenta ex-acquisitions and ex-C&I, we grew 5% organically for the full year and 6% in the quarter. We did see sequential growth in C&I, which tells us that, you know, maybe we’ve cycled through these tough compares. Beyond that, when you think about the sales team investments, the channel expansion that we’re doing and the strong backlog that we have in stores, it gives us a lot of confidence in this 5% to 8% that we’ve guided today. And on top of that, we are seeing – you know, when you think about the stores business, we are seeing new vectors for growth.
We’re seeing companies who are – who manufacture biological materials that are using our stores as part of their supply chain. So we have a lot of confidence in the 5% to 8%. And this is a tough market and we do believe this 5% to 8% represents us outperforming it.
Steve Schwartz: And Yuan, to answer your question a little bit about how do we compare with the market, it’s tough for us because we don’t have full year looks from people and because we’re up cycle here. Our fiscal year started on October 1. We look at peers and kind of what they’re guiding for the quarter. We think in our core business, we’re outperforming. And just the momentum we’ve had in the bottoms-up look we have in the business, we’re really comfortable with the 5% to 8%. If the market picks up beyond what we believe it looks like, we’ll outperform that. We think we’re set up to do that. We focus on our ability to outperform. We think the offerings we have are superior. And that’s really how we’ve guided the business. On the product side, on the services side, we remain very competitive. And so we’re imagining a slow growth market, and that 5% to 8% growth would outgrow the – our current view of what the market is.
Yuan Zhi: Got it. Thank you for that helpful color. And maybe one last question from me. For the remaining $500 million, do you see any long-term initiatives where you can invest or improve internally to improve the top line and product margin?
Herman Cueto: Yes. It’s Herman, Yuan. Yes, I do think there could be – as we start to build out our plans on how we expand EBITDA margin through what I would describe as operational-type programs, there could be the need to use some of that money. Certainly, that’s a lot of money, $500 million, but use some of that money to build out some of those programs. And you know, we’re looking at architecture-type things that we want to think about. You know, maybe there’s some product line focus that we could do, and then certainly continuing with the org efficiencies that we’ve already began.
