Mike Jenkins : Just one clarification on that.
Andrew Shapiro: Sure.
Mike Jenkins : Well, we are in negotiations, a midstream on amending those contracts, worst case on a couple, they expire next spring. So we’re not locked in for long periods of time on the legacy Stay-Lite contracts anymore.
Andrew Shapiro: Okay. And that’s the longest duration of the, we’ll call them embedded loss contracts?
Mike Jenkins : Yes. Yes. Yes.
Andrew Shapiro: Okay. And based on their annual run rate and all that, if you’re not successful in getting an improvement in rates, do you have a rough estimate of what the embedded loss might be?
Mike Jenkins : It’s really hard to judge at this point, Andrew. As we said, we’re currently in negotiations to update those. We’ve had success on some fronts of getting those updated already. So we’re optimistic that we’ll get that done. So it’s very difficult to put a number on what that might be overall. We don’t see it as a significant number in connection to the whole business. And we have — we are looking at some other ways to mitigate what that is based on how we use subcontractors. So our objective is to keep that any loss contracts at a minimum for the remainder of the period. And we said — yes, sorry, just to add one more point to that. We did say in our prepared remarks that we thought this would generate some slight headwinds for this segment, but basically would not jeopardize our guidance of $100 million.
Per Brodin: Well, that’s on the revenue side. But obviously, though the customers are going to do whatever maintenance they can, knowing that there’s a price increase coming at the expiration if they stick with us. So I’m just trying to understand what kind of loss might eat. Just like a contract.
Mike Jenkins : Yes. We typically will not see an acceleration based on something like that because there is a very defined schedule and you don’t want to disrupt those operations, so.
Andrew Shapiro: Okay. And again, just flushing this out, just a little bit more. When you’re getting these rates adjusted to the extent your customers are working with you to be cooperative and do that. Is it to just get it up at a breakeven level, or is it — I know your aim is, but is your — are your customers and your relationships with it such that they’re willing to give you some modest amount of margin for the remainder of the contract?
Mike Jenkins: Yeah. Clearly, our goal across the board is to have profitability in all of our individual contracts. And so the actions that we’re taking right now will drive profitability for these individual contracts.
Andrew Shapiro: Okay. And on the new one, what pricing or margin provision protections are in the large multiyear maintenance contract here with the nationwide retailer that you recently announced. These are the same kind of terms, or are there some better protections for us?
Mike Jenkins: Yeah. We really don’t get into the specifics of individual contracts, but we feel good about this three year contract that we will be solidly profitable during the — for the duration.
Andrew Shapiro: Okay. I have follow-up questions on Voltrek, but I’ll back out into the queue because I’ve tapped down so many questions on the maintenance and service area here.
Mike Jenkins: Okay. Thanks.
Operator: Thank you. That concludes today’s Q&A session. I will now turn the call over to Mr. Jenkins.
Mike Jenkins: Operator. Sorry. I don’t think Andrew realized there was no one else in the queue. So I think he was going to jump back in if you give him a minute.
Operator: Sure. And our follow-up question is from Andrew Shapiro with Lawndale Capital Management. Your line is now open.
