Ryan MacDonald: Super helpful. Thank you. And then Anthony maybe for you. You talked about obviously the 180 million now that will be rolled out by third quarter. How should we start to think about I guess revenue coming into the model? Is this something that’s you said over three years, like is that recognized ratably where you’re about 60 million annualized per year starting in third quarter? How should we think about that?
Anthony Capone: Yes, that’s the right way to look at it. We have to build up to that, so it’s obviously not 60 million immediately. But that 180 million is in the current guidance for this year. And what that allows us to do when we look at last year’s number versus the guidance that we just gave, that 60 million really allows us to explain our entire guidance for this year as opposed to having to use a plug.
Ryan MacDonald: Helpful. And maybe just last one for me on the leased hour model sort of starting that transition, taking 50% trying to getting all the customers on that model. What sort of I guess are your expectations for customer retention as you make that transition? And what sort of pushback are you getting on sort of the switch, if any?
Anthony Capone: Medical transportation is in extraordinary demand right now. So for a customer to switch is very, very painful. It’s very rare that we find a customer that is not willing to switch. There are extenuating circumstances where one may not, but it’s certainly rare. I don’t — from a percentage perspective, I don’t know which ones will and which ones will not. But what I can say is that we’ve been speaking about this with our customers for over a year. So they’re well informed that when the contract comes up for renewal that the only option is to renew as a leased hour program, so there will be no surprises to either sides, if they decide not to go through it. But to switch an ambulance provider right now would be very, very painful for any hospital system to do.
Ryan MacDonald: Excellent. Thanks for the color.
Operator: . Our next question is from David Grossman with Stifel. Please proceed with your question.
David Grossman: Good afternoon. Thank you. Anthony, I wanted to just first follow up a question you just answered about the $180 million of backlog coming into revenue. So should we assume that that once fully implemented is a $60 million ARR kind of revenue contribution and that you get a quarter of that in ’23 and you get a full year of it in ’23? Is that the way to think of it? In other words, does it all come into revenue pretty much in the fourth quarter and then it stays at that level throughout next year?
Anthony Capone: No. I think that for sure you’re at a full run rate basis for all of the fourth quarter. But many of those contracts have already begun rolling out now. Like as of today, they’ve already begun rolling out. So I would say the scale between now to the end of the fourth quarter is fairly linear from now until then. But then through the full fourth quarter, you’re at that full kind of revenue run rate that on an annualized basis is not exactly 60, but close enough.
David Grossman: Okay, so linear ramp to around 60 million, and then you would take the 50 million a quarter into ’24, I guess, right?
Anthony Capone: Correct, yes. Then it continues on for the next three years into ’24 and ’25.
David Grossman: Right. Got it. And then just on the margins, so should we assume that — I thought in your prepared remarks, you said you had about $1 million headwind EBITDA from exiting the transport business in California and then an immaterial impact to revenue. Did I catch that right so that when we look at the ’23 guide, that includes $1 million dollar headwind EBITDA?
Anthony Capone: It does. It already includes that. We’ve already factored that into our guidance.
David Grossman: Right. Got it. And then just one last thing I wanted to ask was on the — just how to think about startup expenses? So you’ve already done a great job of articulating, you’re at these elevated levels and you’re trying to bring them down. How much — by the time you exit this year, it sounds like you’d feel that you’ll have taken a lot of the costs out of the ramp as a result of some of the staffing actions that you’re taking as well as on the vehicles. How do you think about when you go into ’24 then when you ramp? Do you think you’ll have the vast majority of that 600 basis points out of the system by the time we exit this year?
Anthony Capone: No, I think we’ll have about half of it. When you think about it, we’re at about 120 days today and we’re trying to go down to 60 days, so you’re basically cutting the time period for your startup in half. But then there’s certainly that 60 days worth of room to grow. And there’s additional plans we have to kind of eliminate that 60 — the 60-day period of startup costs on the labor side. I won’t go into too much detail here, because I don’t want to spoil all the good stuff for next earnings call. But we have a lot of plans for 2024 to get the additional 60 days so that there’s actually virtually no startup costs. And we’ll begin those initiatives after we get through this rapid normalization initiative. But the current rapid normalization initiative is to go from 120 to 60, so you can think about it as gaining those kinds of 300 basis points of the 600.
David Grossman: Got it. And just one last thing just for Norm. What should we use for CapEx for 2023?
