Mike Jenkins: Yes. So each of the customers have their own specifics around how you can tender and go through an RFP process. So we are confined by some of those protocols from the customer, clearly we would like to build in a reasonable level of escalation into our contracts, given the inflationary environment that we’ve experienced over the last couple of years, where that’s not possible, then we have to take those inflationary challenges that are anticipated over the future into account when we go through the RFP process.
Andrew Shapiro: In last call, I also had asked about, and I think you said at the time you were negotiating improvements and it looks like you got 3 out of the 4. And you said on the contracts that wouldn’t amend the furthest the runoff would take you into the spring. So of those kind of contracts where they won’t amend to allow for a price increase, et cetera, and that are going to expire later in the spring. Do you expect those customers to then renew at your higher and better terms? Or that’s going to be kind of annualized revenue that you were generating that will not be added back in? And can you kind of give a range to help quantify or get our arms around, I guess, the amount of revenue from that subsegment that we wouldn’t mind necessarily going away, but we shouldn’t count on continuing?
Mike Jenkins: Yes. That is directionally correct. The number of these contracts are going to naturally expire in spring, actually in quarter 1 of our next fiscal year, some of them are at the end of April and in that time frame. So the renegotiations that we’ve done are basically for the current contract period, then we’ll go through the cycle for the next round of RFPs. At this point in time, those are active conversations, which are starting, and I really have no guidance to provide on any of that as those are active conversations with customers.
Andrew Shapiro: And like how large in terms of revenue is the whole State Light segment here that I guess includes a combination of profitable and unprofitable.
Per Brodin: When we acquired State Light we disclosed that they were a $9 million to $10 million business.
Andrew Shapiro: And the renegotiated ones, the ones that you opened up your inter period was this just to get to breakeven on those contracts or the pricing would provide for profitability at your normal margin or somewhere in between?
Mike Jenkins: Yes. Moving forward, it is our mandate to have these contracts be profitable. So not just breakeven.
Andrew Shapiro: No, I understand that, Bill, in terms of the new ones. But right now, you’ve gotten some contracts amended inter-period before they expire and you got some improvement. But the improvement you got, did you get just to break even, did you get to your desired margin? Or did you get to somewhere in between?
Mike Jenkins: Yes. All of these contracts, the pricing changes that we’re making will allow for the company to be profitable on these contracts. They are rolling out, so we don’t recognize the change in all cases immediately because there’s often a backlog and those types of things. So the full impact of these contract changes and pricing changes occur over time. But the goal and what we’ve implemented is for all these accounts to drive profitability.
Andrew Shapiro: And 2 other follow-ups not on State Light. Voltrek, when does that acquisition anniversary? And remind me the earn-out targets are not just revenue based, but they’re EBITDA based, right?
Mike Jenkins: So the anniversary of Voltrek just occurred this past month in October. So we’ve just now anniversaried it. And the earn-out is based on EBITDA, not on revenue.
Andrew Shapiro: And the DoD contract profitability, as you build that thing out, the accounting on that, that’s not like some kind of completion of contract type of accounting? Or is it.
Per Brodin: I mean, to some degree, that’s a decent way to think about it, it’s based on installation of the fixtures, which is a decent analog for percentage of completion. So as we impacting multiple buildings on those bases. So it’s as we install fixtures, we recognize the revenue.
