Ken Peterman: Yes, I’ll tell you that Q4 is, as I think, traditionally been — our Q4 has traditionally been a good quarter for us. We see the U.S. government looking to sweep up and spend money and we can and our positioning to benefit from that. And I think that — but other than that, I think it’s just lumpiness. I don’t think that there’s a downward trend.
Chris Sakai: Okay. Sounds good. And then can you — can we — what would be a good sort of normalized rate for gross profit I know it was down to, what, about 32%. Should that be — should we expect that maybe around the 34%, 35% range?
Mike Bondi: Yes. On gross profit, Chris, I’ll talk in terms of consolidated. Our view is, right now, we are going through a transformation. We are making changes to our business and so while we do see improvements, we are also reinvesting and making some tough decisions to make us stronger as we go into 2024. So while we have an eye for margin improvement, I think Q4 might look similar to Q3. And as we move into next year, I would expect to see margin improvement, but I won’t give a specific percentage right now. I think we’ll give more wholesome guidance one quarter out when we get closer to the end of Q4.
Ken Peterman: I’ll add, Chris, that the organization is going through significant transformation. Now there’s a lot of changes going on across the organization. We’re rolling out tools and processes. We’re teaching people how to use those tools and processes. And those tools and processes will bear fruit in terms of streamlined, more efficient business operations. We’re also going through a period where we’re burning backlog. And to some degree, this backlog, some of it is pre-COVID pricing and that kind of thing. So we have to burn that off. So I think that I’m quite pleased with the consistent performance, the ability of us to meet our commitments in terms of hitting our forecast. And I think the upward trend that we’re experiencing in both sales and profitability, is a positive sign that we can go through this difficult transformational period and still meet our commitments and still see an upward trajectory before we’ve actually seen the results and the impacts of the lean initiatives and cost reduction initiatives that we’re implementing.
So I think there’s — I’m real pleased by where we are right now, and I’m really pleased by what — I’m encouraged and excited about what the next few quarters are going to hold as we start to see the benefits of that. I mean, I would repeat again that we are — I would — I’d just repeat again that we are on or ahead of the schedule that we put together 10 months ago.
Chris Sakai: Okay. Great. Now you’ve mentioned that you’re burning through some lower margin backlog. Can you shed any light as to how much of that backlog of the current backlog is lower margin?
Mike Bondi: Yes, Chris, I’ll take that one. I would say this is more prone to be within our terrestrial and wireless segment. There, we had booked a very large amount of contracts in the last couple of years and those are multiyear contracts. So sitting here today, you have a couple of hundred million dollars of backlog. And we think that that’s going to burn off over like a 24-month period of time. And so therefore, we’re going to be facing this headwind in the background for a little bit as we reset that backlog. But it’s more in the terrestrial and wireless segment.
Ken Peterman: And that’s one of the reasons. And of course, the cost reduction, the lean initiatives are working to offset or even more than offset any of that challenge.
Chris Sakai: Okay. Okay, great. Thanks for the answers.
Operator: Thank you. Our next question will come from Greg Burns with Sidoti. Your line is open.
