Michael Ciarmoli: Hey, good evening, guys. Thanks for taking the questions. Rex, just back to tech-99 in the FDA process, what’s sort of the back and forth right now? What’s the dialogue like? Is there any surprises with what they’re requesting or with what you’re doing or anything new there? I know you’re talking about the approval later this year, but any color you can give us.
Rex Geveden: Yes, there’s really nothing new there, Michael. We had some findings from the FDA and some issues to work down, including some equipment modifications to run some reference batches and all that sort of thing. And we’re just sort of grinding right through that. So I’d say it’s absolutely on track relative to everything we said for the last several quarters. No change in posture at all.
Michael Ciarmoli: Okay, perfect. And then I guess, Robb, just as we think about 2024 and specifically the revenue growth in government, I think the initial view may have been a little bit more conservative. Can you give us any sense as to what’s really kind of picking up some momentum in that portfolio? Is it more the microreactors, some of the new start programs, or just kind of give us a sense what’s kind of really offsetting some of those headwinds from the carrier?
Robb LeMasters: Yes, I can. Thanks for the question. Yes. On the top line within the government business in general, we’re seeing a couple of drivers that contributed to the outsized performance in Q4 and will roll through in 2024, to name a couple of those. They’re outside of the core naval business, frankly. On the non-naval side, we’re really ramping DRACO nicely. So that’s our space microreactor program, as you know. We learned a lot from Pele in terms of standing up the supply chain and getting after that. And that allowed us to spend capital and hire people efficiently and get the materials we need to get working. So you saw some pretty good growth in that – in the fourth quarter and I think that’s going to roll through.
That’s – those are cost reimbursable programs, so that’s one of the sort of drags on margin. But to me, that’s a good news story to be ramping those quickly and serving our customer well. Then on the special materials business that we’ve been talking, and we’re going to spend a lot of time on that tomorrow in terms of our key capabilities around processing and handling. I think a lot of people think about that as a fuel business and a down blending business, but now we’ve landed this terrific program around U-Metal. We’re recovering some HALEU scraps and turning those over to ARDP winners. We have other prospects to expand that franchise. So within that special materials portfolio, we do have mature programs and so that’s good margin.
But again, as you’re bringing on U-Metal or you bring on HALEU, that that comes with good revenue as you’re standing that up. But our new program, right, so that has implications also, which we talk about from a top line and a margin perspective. Those are notable. And then just the core NOG – legacy NOG business is doing well. It’s coming with revenue. We’ve got the workforce now as we talked about hiring 10% net workforce overall as a company really is going to allow us to grow the top line nicely in 2024 in all of our business lines in Geo, but particularly in the ones I’ve named as well as just the core shipbuilding naval propulsion business.
Michael Ciarmoli: Got it. Got it. Helpful. And then just last one. I know you guys aren’t wildly impacted by the budget environment, continuing resolution, but any risks that we should be aware of, even looking at 2025, I know they’re kind of throwing out there maybe one Virginia class, although that seems to be a function of just kind of what the supply chain can handle. But any thoughts there?
Rex Geveden: Yes. Maybe just the broad thoughts here, Michael, maybe to frame it a little bit. Of course, some of our business is naturally completely insulated from that noise our commercial business in Canada. We’ve got a little footprint in the UK. But to the extent that our government programs are affected by continuing resolutions or stalling out actions on appropriations. And just every program in our portfolio is a program of record. I mean, that’s meaningful. Everything from HALEU to our Navy programs and certainly our national security programs with the NNSA. So that doesn’t – those CRs don’t influence our business very much, because those are crucial programs on multiyear money. I would say, the one place that might affect us, and you can talk to Suzy Sterner about this tomorrow.
The one place that can affect this is the DOE site cleanup type work, where you might have a funding break and go into sort of a stand down mode. So those kind of things can and have happened in the past, but overall, our business is really pretty well insulated from that kind of action.
Michael Ciarmoli: Okay, got it. Thanks, guys. I’ll see you tomorrow.
Rex Geveden: Yes, thanks, Michael.
Operator: That concludes our Q&A session. I would now like to turn the call over back to Chase Jacobson for brief closing remarks.
Chase Jacobson: Yes. Thanks, everybody, for joining us today. We look forward to seeing and speaking with many of you tomorrow and at upcoming investor events. If you have any questions, you can reach me by phone at 980-365-4300 or by email at investors@bwxt.com. Thank you.
Operator: This concludes the BWX Technologies’ fourth quarter and full year 2023 earnings conference call. Thank you for participation. You may now disconnect.
