Jon Tanwanteng: Okay, great. Thanks for that color. I was wondering if you could go a little bit more into the details of the space issues that you had in the quarter. Is that a one-time issue that you’re facing or is it going to be sustained? Kind of what do you see in your near-term planning for that business?
Bryan Sayler: Sure. Well, so listen, the space business, first of all, it’s a small part of our overall business. But we have a number of contracts that are for very complicated development programs. These are — meaning, we are doing effectively research and development to develop these things. And unfortunately, they were firm fixed contracts. And we’ve had some technical challenges there that we’re working through. We think that we have our arms around it, but there is a little bit more risk there, because we do not have these projects completed. And until you’ve got it up on the test stand and you’ve actually got it to pass the test, you really can’t declare victory. What led to the challenge, really, I think, is through the COVID moment, we’ve had some turnover in that business.
We lost some key engineers. We’ve had to hire new ones. And so, we’re going through a little bit of a learning curve there. But we do think that we’re going to get through it. The good news is, the rest of the A&E segment and the rest of our business overall has been able to more than compensate for the challenges we’ve had in the space segment.
Jon Tanwanteng: Okay, great. That’s good to hear. Can you talk a little bit more about MPE, the evaluation that you paid for and the accretion you’re expecting for next year?
Bryan Sayler: Sure. Listen, MPE is a business that we’ve known for a number of years. They’re very solid. They build RF filters for electromagnetic pulse applications. As you know, that’s one of the big growing areas that we’re kind of targeting. What’s attractive about it to us is that, they have a broader range of products. So in addition to doing facility filters, which we do at ETS-Lindgren, they also build component filters that go into military systems and other kinds of systems that require protection from electromagnetic pulse. That’s becoming a big market now because as you look at some of the things that are happening in critical infrastructure, both in the energy space and data centers and that sort of thing, that’s become more and more of an issue that people are trying to address.
What’s interesting about — so we did spend about $57 million for this business. We expect it to add about $10 million to $15 million of revenue for us in fiscal 2024. And we’re not really going to talk a lot about the margin, other than to say that we think that it will enhance the overall margins for the test segment. So we think it’s going to be accretive both at the revenue line and at the margin line for our overall test segment.
Chris Tucker: Yes, the other thing I would say, Jon, from an overall EPS perspective, we expect it to be – it’s incorporated into our 410 to 430 outlook. And we would expect it to be pretty close to break even. Could be some slight dilution or slight accretion based on how the overall — we don’t have full visibility yet to what amortization will be in some of that. And when I say it’d be close to breakeven from an accretion perspective that would also exclude the one-time inventory step-up charges we always kind of adjust those out, but — so anyway from an overall EPS perspective we expect very little impact in the year.
Jon Tanwanteng: Okay, good. But that’s including the cost of either financing that we are paying for it.
Bryan Sayler: Correct.
Jon Tanwanteng: Okay, got it. Understood. Great. Thank you guys. I’ll jump back in queue.
Bryan Sayler: Thank you.
Operator: Thank you. [Operator Instructions] And next we’ll have a follow-up from the line of John Franzreb from Sidoti. Your line is open.
John Franzreb: Yeah, I’m just a little curious about what’s behind the lower power filter sales that you saw in test. Can you provide some color on that?
Bryan Sayler: Sure. There’s a couple of factors there. So we have about — so primarily, the biggest driver for that last couple years has been in data center applications. That would be the one place where we think we might be seeing a little bit of a deep docking effect. We had one of our customers that had bought quite a lot of filters last year, and we think that they’re kind of completing their inventory this year. We think that’s going to resume before too long.
John Franzreb: Okay. I just wanted to get a handle on that.
Bryan Sayler: Yes.
John Franzreb: That’s it. Okay. Thank you very much.
Bryan Sayler: Thank you.
Operator: Thank you. One moment for our next question. Our next question will be a follow-up from the line of Jon Tanwanteng from CJS Securities. Your line is open.
Jon Tanwanteng: Hi, thanks. I just wanted to dig a little bit more into the strength you guys saw in the USG business. Did you meaningfully outperform your internal expectations there in either Doble or NRG or did you pull anything in from future quarters?
