So we’ll see where that goes. But right now, this quarter is looking fairly positive for book-to-bill compared to prior quarters.
Frank Takkinen: Okay, that’s helpful. And then maybe just for my second one to circle back to the NHP dynamic. I heard the comments around a new supplier coming on board and the expectations for more in 2024. Can you help level set us just on where we are from a quantity basis? I was a little surprised to hear that prices may be coming down. I figured we would still be in a very supply constrained environment, but maybe some of these suppliers are bringing on more volume than anticipated. So I don’t know if there’s anything quantifiable you can provide, just how significant some of these new suppliers can be and what kind of supply we could see in 2024 versus previous years?
Bob Leasure: Yes, this is, again, just our opinion. I don’t have anything quantifiable. I can’t tell you on the world market, there are additional farms that are increasing and have been for the last several years increasing their breeding and their availability of NHPs. So I think the population on the world market may be increasing. And if you look over the last year, it’s been a year since the Cambodian imports were taken out of the US market. But they’re still going everywhere else in the world. So they’re still available on the world market. They’re just not available to the US. And many people are still importing or using Cambodians. We just are — we are not at this time. So we’re just looking at and seeing, okay, we think that we have — some people have found supply.
It’s had a year to adjust. They found ways around it. And we’re expecting that some of the pricing that went up last year may not stay at that level. So we’ll see how that evolves in fiscal Q2 and Q3. But yes, we have additional suppliers. We feel like our volume could, as I said earlier, we may be able to achieve the same volume we did last year, but I’m just not sure that the margins will stay the same. On the world market, I will also say that I think some of the pricing will begin to come down as that capacity is out there. And then there’s still the unknown what will happen with China and then the unknown what could eventually happen with Cambodia. So with those things being out there we felt at this point. And if that capacity comes on the market, it would put additional price pressure.
With those issues being out there over the next 12 months, a ton of the opposite trends that we saw 12 months ago, and we thought this time we should be fairly cautious. We don’t have anything for sure and we don’t have anything that we can definitely point to from a quantitative standpoint, but at this point we wanted — we want to be cautious about what we’re saying, how that market could turn out.
Frank Takkinen: Got it. Okay. That’s good color. Thanks for taking the questions. I’ll stop there.
Bob Leasure: Thanks Frank.
Operator: Our next question comes from the line of Matt Hewitt with Craig Hallam. Please proceed with your question.
Matt Hewitt: Good afternoon, and I guess congratulations on kind of pushing through here over the past year. I know it was not an easy environment. Maybe the first question regarding gross margin and EBITDA margin, How should we be thinking about the progression over the course of this year? It sounds like Q1 is going to be off to a strong start and then maybe we start to see some pricing pressure weighing on those margins as the year progresses? Or can volumes help offset that so that you could maybe even see flat to up a little bit as the year progresses on those two lines? Thanks.
Bob Leasure: First, start with Q1. I think Q1 typically has been our slowest quarter of the year. Last year, I think we’re coming off a base of Q1 was only $122 and it’s — at that time we it was down because we stopped selling the NHPs and then this year I think the NHP volume will be less than last year. That being said, I think we’ll exceed the $122 million, because some of the NHP pricing still is staying strong this quarter. I think we’ll see again continued reduction of expenses in our RMS business and I think we’ll continue to see hopefully some improved margins from our DSA business on sales growth in the DSA business. But typically, this is our slowest or lowest quarter. So I’m not looking for anything really great out of Q1, but it sure exceeded last year, which put a lot of pressure on us for the rest of the year and put a lot of pressure on our trailing 12.
So, I hope to eliminate that. As far as the rest of the year, again, a lot of that will depend on where the NHP margins come out and what — and what do other people do in terms of imports. But I don’t see it changing a whole lot from last year. I think it’s still — eventually we’re still going to be back in the $20 million plus EBIT dollar range. I think we still — if you look backward, now $23 million [indiscernible] $23 million, seven out of the last eight quarters if you take out the Q1. And I think, I don’t know that we’ll see that in Q1, but I think if you look at the average going beyond that, I think it’ll continue to be fairly strong for us. And I do hope we’ll see some of the margins improve from the other businesses, but you know the NHP is less predictable at this time.
Matt Hewitt: Got it. And maybe one additional question regarding bringing the transportation in-house. How complex of a process is that and how much will that help margins once you get that fully integrated? Thank you.
