Ed Prajzner: Great question, Tim. Yeah, that has now lapsed, so there’s no – there’ll be no impact on that year-over-year going into ‘24 we’re past the 12 month anniversary of when that dropped off. So that would only be upside in that case. We won’t have to call that out. That will not be a lag anymore. That would be upside at this point. But we feel good about commercial space, private space and that defense this year, but that will not be causing any tailwinds at this point.
Tim Moore: Good. I have one last question and I’ll turn over. For Data Analytics Solutions. I mean, that’s been a good growth driver. I know you’ve come out, I think, last call and guided maybe a 15% to 20% CAGR when I asked about it, it was nice to see those sales reaccelerate December quarter after they came down. They weren’t as robust growing in the September quarter. But how do you think about the gross margin contribution there? I mean, you’re getting to a point where there’s probably good inflection point when you get to a certain amount of revenue. Do you think that steps up later this year or do you have to kind of reinvest in that business and maybe the incremental contribution of the margin won’t be as big as maybe it could have been?
Manny Stamatakis: We are planning on growth in Data Analytical Solutions in ‘24, but we will, at the same time, be developing a strategy to scale that in ‘25 and ‘26 and ‘27, and we will be investing in that initiative in order to achieve that scale. It’s good margins and it’s good business. So you’ll still see growth in ‘24 because our Data Solutions team has that baked into their ‘24 numbers. As I indicated, they finished the year at 16%. They finished the fourth quarter at 18% growth, and their growth objectives for ‘24 and beyond are in that range and beyond. So we’re excited about that.
Tim Moore: I love that growth driver. I remember sitting down with Ed about it 10 months ago in New York. But, thanks a lot. And that’s it for my questions. Congrats.
Manny Stamatakis: Thanks, Tim.
Ed Prajzner: Thanks, Tim.
Operator: Thank you. One moment for our next question. Our next question comes from Brian Russo with Sidoti. Your line is now open.
Brian Russo: Hi. Good morning. Just on the $20 million of incremental Project Phoenix savings in 2024, if I heard you correctly, I think $12 million of that is the overhead or i.e., SG&A savings. So that leaves about $8 million. Is that the commercialization – commercial initiatives and the pricing initiatives? And have any of that $8 million been achieved yet?
Manny Stamatakis: Ed, why don’t you –
Ed Prajzner: Sure, Manny. Yes. Yeah, Brian, the amount – the breakdown components for Project Phoenix, as we cited back in our November press release, as an adjunct to the third quarter press release, that’s all still holding serve and we’re reiterating that. So as you pointed out, the $12 million – of the $20 million, $12 million is incremental SG&A savings in ‘24. That number is baked in and we feel good about that. Of the other $8 million, $5 million of that was revenue price increasing adders, and $3 million was gross profit margin reductions. So you’ve got $5 million coming on the revenue line, $3 million coming on the CoGS improvement line, and the other $12 million coming in SG&A. That’s the component composite of the $20 million incremental Project Phoenix Savings we’re projecting for ‘24.
Brian Russo: Okay, understood. And out of the $5 million of pricing adders, is there any kind of, maybe a generic, but true example of where the pricing initiative has been successful to-date?
Ed Prajzner: Absolutely. Pricing was one of our key work streams in – on this commercial function. The other one is called sales enablement, where we’re trying to drive some new business. But pricing by far, is the key one. As Manny said earlier, it’s a strategy, it’s a new structure. It’s this, let’s know in the bid what we’re going after. Let’s track it through the deal desk. Let’s really think about multiyear pricing impacts. Obviously hard to do as Manny said, you’ve got multiyear MSAs, you can’t magically change that. But you have a discussion. It’s all about the ROI as Manny said, it’s about the higher value-add. We have the ROI. We’re not just a cost-plus commodity. We don’t want to be seen that way.
There has to be a bigger discussion there on the longer-term, the investments we’re talking about in our capabilities and our data, that’s value to the customer. And it’s about having a discussion. So we’ve had real examples now, our budget, internal budgets have baked in opportunities. We went to top tier customers, bottom tier customers thought of what works, there’s different strategies, different dialogues, different capabilities there. But there’s meaningful increases built in now to contracts as a structural thing going into ‘24 that we didn’t quite have the discipline on in the past. So, no, there’s real meaningful examples that that numbers is a part of our growth here in ‘24 having the pricing factor on top of a volume factor, growing that top line organically.
So there’s real examples with customers on different facets of our work that has been accepted. We’ve had those discussions, and lo and behold, to a large extent, many of those increases were accepted by the customer. So, yeah, we feel very good that there’s a real pricing trajectory. It’s a meaningful part of Project Phoenix, and that’ll be kind of one of the ending phases here as we get to growth areas, leveraging our footprint. I do believe there’s more to be had there, but it’s more about having a pricing structure now, a pricing strategy, a philosophy about it going forward. That’s really what changed. But there’s lots of tangible examples where customers have accepted it going forward, and that impact will be there in ‘24.
