Manny Stamatakis: Just to give you one example, as Ed said. Last year, I had asked for a list of contracts that were not – where the margins weren’t acceptable. It was just very low-margin business. And we’ve been tracking those contracts from July of last year through February of this year. And the latest report I got was that, we were able to, through – a series of pricing initiatives and price increases and cost reductions, we’ve been able to improve those margins by 3% to 5%, primarily because of what we’ve done in Project Phoenix. And it’s through a combination of improving our pricing and a combination of cutting back on our overheads. So it is working. We just need more time to develop that thinking and not the thinking, to develop that approach with our customers.
It just takes time, but it is working. And I was really happy to see that, because that to me – that proved to me that it’s working. So I wanted to see evidence of that myself, and I’ve seen it. And so that’s an example of how the Project Phoenix mindset has already started to improve the margins in some of our low-margin contracts.
Brian Russo: Okay, great. And then when I look at the 2024 midpoint of the revenue guidance, it looks like maybe slightly under 5% growth. Are there any one of your largest three end markets or even the submarkets within those three that are growing faster than others? You mentioned the three segments, O&G, but I’m curious, on the Aerospace & Defense side, are you seeing more interest for third-party raw material and parts inspections, given what’s been playing out in Commercial Aerospace over the last six to nine months?
Manny Stamatakis: We are. We are seeing improved interest in Aerospace, in our Industrials, I mentioned Data Analytics Solutions, and our team has come up with some very creative ways to partner with our customers, who have demand that they need to have met. So in the Aerospace area, there is demand, and we’ve been strategizing with them to meet that demand, by adding more equipment and moving forward in that direction. So, we think that in ‘24, we will have improved growth, as I said, in our Data Analytics, in our Aerospace, and we’ll continue to grow in our Industrials area.
Brian Russo: Okay, great. And then what should we assume for 2024 capital expenditures?
Manny Stamatakis: Ed, what do we have?
Ed Prajzner: We have it up a little bit from ‘23. We’ll probably be up another $3 million, $4 million, maybe $5 million. So we have an aggressive year plan for CapEx, again, in Shop Labs, in Aerospace, in Data Solutions, those type of areas where we want to put a little more growth, expanding capabilities, expanding service line offerings for current customers and new customers. So, yeah, we’ve got a high interest in doing that where we keep leaning into the CapEx. So we’ll do more of that, but we’re not going to double it. But it might be up 10% over this year, maybe 15% top end if the opportunity is there. If they’re right, we’re going to be very judicious in the ROIs and paybacks we look for. But yeah, we will see CapEx expand ever so modestly here in ‘24.
Brian Russo: Okay and then –
Manny Stamatakis: The key to what Ed has said is, that our process in determining how to allocate that capital expenditures has been revived and revamped. When we invest, we will do so based on the return on – an acceptable return on investment. So our CapEx expenditures are going to be focused on initiatives that will drive and grow revenue.
Brian Russo: Okay, great. Well, thank you very much. I appreciate it.
Manny Stamatakis: Thank you, Brian.
Operator: Thank you. At this time, I see no callers in the queue, so I’ll hand the call back over to Mr. Stamatakis for his closing remarks.
Manny Stamatakis: Thank you, operator. And thank you, everyone for joining this important call today and also for your continued interest in Mistras. I look forward to providing you with an update on our big business and progress achieved towards our ongoing initiatives on our next call. Everyone, please have a safe and a prosperous day.
Operator: This end today’s conference call. You may disconnect at this time.
