But, no, there is not any forward spend necessary to effectuate the savings of Phoenix that we’re giving you here today. That effort is behind us. And there is not an incremental investment to do that. Manny was talking about investing in the business going forward, that’s an entirely different thing and we may redeploy some overhead in our higher growth areas. That’s a whole different topic, but that’s reinvestment. But, no, there is not any incremental effort needed to achieve the savings that we’re laying out today. We are very confident. We’ve spent a lot of diligence going through that and feel very confident that will be a true savings and a benefit in fiscal 2024.
Mitchell Pinheiro: Okay. Well, thank you for taking the questions. I’ll pass it on.
Manny Stamatakis: Okay. Thank you, Mitch.
Operator: Thank you. And one moment while we move to our next question. And our next question is going to come from the line of Tim Moore with EF Hutton. Your line is open. Please go ahead.
Tim Moore: Thanks. I just want to follow-up on your updated free cash flow guidance for this year. Ed, what are the exact total cash costs spent already or will be spent by the end of this year, by December for the year, to implement Project Phoenix, including the lease break costs and the severance? And then the other part I had was, just reconciling the free cash flow guidance, that one account receivable, do you expect that maybe to convert more like in January? I know you said you are going to work on working capital towards the end of this year, but if your free cash flow guidance came down, do you think that might be more of a January collection?
Ed Prajzner: Yes. Hi, Tim. Great question, yes. Well, the first part of your question of the outflows relative to Project Phoenix, real costs to make that happen, that’s probably about an order of magnitude, maybe $6 million this year, or probably cash out the door to effectuate that savings. So that’s about the number that’s baked in. That was not in our guidance earlier, but we have a pretty good line of sight now to that number. So $6 million came off the free cash flow from that region. The AR, yes, the WIP bill that we’ve seen and some of the delay in AR, we’re working hard to pull that down here in 2023. I hope to be able to achieve, if not slightly exceed, that new revised free cash flow. Worst case, it might trickle into January, but we are working very hard to bring that back down here in the fourth quarter.
I will mention there’s a third piece there. There is some incremental CapEx year-over-year, that’s a little bit higher now, where we are investing in some of the new higher growth areas, that’s also bringing down that free cash flow a little bit. Again, that’s good investment in the future that will lead to some growth there. But it’s primarily the WIP bill in the AR that is adversely hurting me now that made us bring down the free cash flow, and we’re going to work that back down as hard as we can by 12/31, but, yes, to your point, some of that may slip into Q1.
Tim Moore: Great. That was really helpful, giving that bridge of the components. I think that really helps investors. Definitely all adds up to the free cash flow guidance difference. It clearly makes sense. What about that one defense project? I know it was pushed out, stop-and-go from the first half of the year. I don’t know it could be maybe $7 million or $8 million in sales. Did that start up again, or is it about to start up?
Ed Prajzner: Unfortunately, no, Chris – Tim sorry – that’s still delaying a little bit, so that’s not appreciably picking up here in the back half, second half of 2023. We had hoped that. That’s kind of maybe a reason why our revenue guidance came off a little bit. We do see that getting back online next year. Again, the job didn’t go away, it just got pushed out and delayed. But, no, we did not have that appreciably help through the third quarter. It is slowly coming back up, and the staffing is occurring, and it will get back online. But you can think of that more of a 2024 event at this point. That’s not going to appreciably get back online in 2023.
Tim Moore: Yes, that’s helpful, Ed. And my last question is around Data Analytical Solutions. Manny had mentioned, I think, on the prepared remarks, maybe a 15% to 20% CAGR. If you look at the first half of this year, stripping out the September quarter, it was growing, I think, at 22%. And it decelerated, I don’t know if my math is right, maybe 5% in the September quarter. Was there any lumpiness in that Data Solutions? Was it just because it was lapping a really good growth period the year before? Was there anything with OnStream or something that went on in the September quarter that might have caused the sales growth rate to be below kind of the target goal?
Ed Prajzner: I will let Manny expand on that one. Well, it’s 16% through the nine months, so it will ebb and flow any given quarter. The very nature of data and software, there is a big piece of implementation that happens there. It’s not just pure software licenses. There is work to implement along the way so that that number may not climb in a linear manner, but that CAGR growth that Manny alluded to is real, we are right in that range now at 16%. But no, it’s a high growth area for us and we want to do more of it as Manny said. I’ll defer to Manny any other color he wants to add on data analytics?
Manny Stamatakis: Yes, what I would like to just add is this. This is a very – it’s a profitable and important sector in our business and we are now going to be focusing on scaling that to a greater level. We want to be able to put, to get into more plants quicker. And we think that the proprietary software that exists there will be very helpful to our customers. It has been helpful to the customers we’re in now, but there is a huge market for this type of service. And we need to be able to get into all those markets, including our own markets which were – a lot of these plants that we have are plants that we identified and brought in outside of our customer base and so part of our plan is to scale, to bring those solutions to our own customers.
We think there is a lot of opportunity there. We think there is a lot of room for growth, but we don’t want to do it unless we’re prepared. So 2024, we’re going to be focusing on getting ready to scale so that we can do multiple installations at the same time, and so that we can get into more and more plants with this solution.
Tim Moore: Great.
Manny Stamatakis: I don’t know if that answers your question.
Tim Moore: It did. It did. I am a big believer in the data solutions driver for your top line. So thanks Manny and Ed. And I’ll turn it back over to the operator.
Ed Prajzner: Thank you, Tim.
Operator: Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Brian Russo with Sidoti. Your line is open. Please go ahead.
Brian Russo: Yes. Hi. Good morning.
Manny Stamatakis: Good morning, Brian.
