Jonathan Baliff: No, exactly. I mean, the expenditures that we make for equipment, a lot of it’s captured in the contracts themselves and paid for by the contracts, right? So — but a lot of the CapEx that Pete for example used perfect examples is an example of CapEx that we can use, I mean these pieces of equipment last a long time and can be used on other contracts. That’s why you’re seeing a level of efficiency. The only I would add to Pete’s comments is, the return — we watch these return on invested capital, this CapEx very, very closely and that’s why you’re seeing the narrowing of our cash flow from operations has happened because we’re focused on those returns happening for our investments earlier, and then obviously with a threshold that’s got to meet. There’s a discipline to this process, Suji.
Suji DeSilva: And then sticking to the financials, the gross margin side, you talked in the prepared remarks about gross margin tailwind from mix. Can you just remind us the relative gross margins, how should we think about that in segments and where the mix tailwinds are versus headwinds in gross margin or relative gross margins?
Peter Cannito: Yes, so we don’t have segments, so our gross margin is our gross margin. What I can tell talk to you about gross margin is the way we think about it is, one of the key things that I tried to highlight in my comments was this idea of avoiding growth at any cost. And I would say a year — potentially two years ago, the industry was — quite frankly, the investor community was primarily focused on top line growth really at any cost. I’m not sure Redwire was ever all in on that concept. But certainly, in the past year, we’ve been very selective about what we bid and we’ve been working very hard at sunsetting other programs that either came through acquisition or otherwise that had gross margin less than what we’re targeting. So, that disciplined approach of selective bidding on programs that where we feel that we can maintain our margins is what’s driving the changes you’re seeing in gross margins right now. Did that answer your question?
Suji DeSilva: Yes, it does. And good to hear that you’re doing that on the acquisitions. And then last question really on the demand in the civil area. You talked about some volatility around the U.S. government. Are you seeing actual program pushouts or positive reductions yet? Or is that just a sort of sense that there is some uncertainty there more broadly?
Peter Cannito: Yes, I think it’s being prudent about watching closely what’s going on in terms of budgeting, specifically for NASA. So, I wouldn’t say it’s always difficult to understand why the government does what they do. They publicly, I believe, just announced that they were pushing the LTV procurement out for instance. I can’t say I don’t have firsthand knowledge as to why that is. But we have to be realistic about that some of the congressional budgets that are being out there, I believe some of them are looking at rolling back masses budget to 2022 levels. Obviously, we have a fair amount of congressional budgeting or I would say maybe just U.S. government dysfunction going on right now. So, that’s certainly going to find its way into the planning cycles. And so we just need everybody to be clear eyed and realistic about the potential risk associated with those dynamics.
Jonathan Baliff: I mean Suji, the only other thing I would say on that is, it is one of — we’re pretty deliberate about — we’re celebrating the year that we are partnered — acquired Space NV, now Redwire Europe. And so, we’re pretty deliberate about that. Obviously, we need our financial thresholds, which it’s meeting, but also it allows us to diversify. And the ESA and other European governments are very much on a 3-year cycle of their budgeting as we’ve talked about with the investors and you. And that really helps diversify, as part of what the Redwire overall strategy is to be this, still grow this business, grow it profitably, but also make sure that it’s a lower risk type of profile and take advantage of these opportunities as they come up globally.
Operator: Our next question comes from the line of Greg Konrad with Jefferies.
Greg Konrad: Maybe just to kind of bridge or follow-up to some of the prior questions. I mean, you’re coming off the third straight strong quarter around EBITDA. I know you don’t guide for the year, we can see what the revenue guidance is. But how are you thinking about the variability of profitability into Q4 and how much is tied to volume versus mix? I think you’ve talked investments in the past. And how are you thinking about maintaining positive EBITDA into the year-end?
Peter Cannito: So if you think about some of the comments I made on balancing top-line and bottom-line growth, I already touched on one aspect of this approach, that’s the idea of being selective in our bidding. But we don’t want to pass on very significant opportunities that may present itself in the pipeline that requires some investment upfront, because we’ve kind of talked ourselves into a corner, if you will, around EBITDA, right? So we’re very focused on being profitable. We’re very focused on selectively bidding programs that we could be profitable on. But there are instances where going back to the discussion on CapEx, we may be required to make an investment, of course, that won’t hit EBITDA, that’ll hit cash flow more, but there’s other internal SG&A or B&P or IRAD dollars that do flow through SG&A that we might have to ramp up on in order to take advantage of some your positioning that we have.
And we don’t want to sub optimize our approach based on something like the guidance we’re giving or what have you. So that’s what we mean by balancing top line and bottom line growth is, if there is A, opportunity out there that includes a high probability win that will really transform Redwire as a business and we need to spend some of our SG&A money to go after that, we’re going to do it. So does that answer your question?
Greg Konrad: Yes, that’s helpful. And then maybe just to follow-up on PIL-BOX, and I think you’ve announced some other partnerships on the drug development side, plus with what you’ve done historically. Is there any way to think about the TAM of that market and just timing given some of your other partnerships and kind of where we are in terms of adoption and transition, given it seems like there’s a lot of opportunities in that market?
