So the largest tool revenue year was 2021 previously. We do have opportunity for larger tool revenue in 2024 than even of what we saw in 2021. We don’t have perfect clarity on that. We wanted to give the information that we did have. I want to expect in the third, fourth and first quarter of next year, as we get more clarity we’ll definitely share that with the market.
Thomas Sonderman : Yeah, and then, as it relates to ATS, again, we see solid growth going into next year. We’re continuing to drive efficiencies as we talked in the past, Richard, our goal is to extract more ATS activities out of our total activities bucket and we’re doing that. That’s where a lot of these efficiency gains are coming from. And at the same time, we recognize that we have been growing very fast over the last 12 plus months. And it’s important to realize these are development programs. And so, programs that are in development move at different stages based on where they are in our funnel. And so, we’re remaining, we’ll call it conservative but optimistic that the growth that we have been seeing in ATS can continue. And we believe that that growth coupled with the investment, our customers are making in tools are going to allow us to achieve above industry growth as we get into ‘24 as we’ve demonstrated this last year with again above industry growth.
Richard Shannon: Okay, let’s turn off. Maybe just a quick follow-on in this general topic here. What kind of time frame for return on the investment in tool sales to your customers expect? Or is kind of implicit in their program progress?
Thomas Sonderman : Yeah. So, as you’ve kind of started out your question, you were referring to tools that that came in, in ‘21, the $19 million. So I think of a lot of the gains we’re seeing now are resulting from the tools that were coming in at ’21. We had relatively low amounts in ‘2022 and then, this year it’s beginning to pick up as we exit 2023. So the tools come in, obviously they get installed. They get qualified and then they start being used for development and ultimately prepare to go into production. So, think of it is a tool installed in ‘24 will begin to provide benefit in ‘25 and beyond. We have gotten very efficient with this process. And I think part of what we’re doing is installing new tools to enable capabilities and we have a very strong development team and a lot of the work that we talked about in the past of integrating ATS and wafer services holistically within a fab gives us great confidence bringing these tools in next year will prepare us for the ramps that we’re expecting in ’25 and beyond.
So tool investments in ‘24 should begin to pay dividends in ‘25.
Richard Shannon: Thanks for that. Can you just kind of think about your profile of revenues here and I am probably interested mostly in ATS, but if you want to talk about it on the whole business excluding tool sales. But I think about your kind of your revenues and two buckets, your government, and A&D programs versus commercial on the other side. I think from your comments today and past calls that the government and the A&D side has been particularly strong. As you’re looking forward to the next few quarters, how do you see that mix changing? Is it still going to be dominated in growth or mix going towards government A&D? Or is it going to be more balanced?
Thomas Sonderman : Well, I think, we’ve always talked about our long-term model is kind of 30% to 40% percent for A&D. Obviously, it’s running much stronger than that. And we’re taking advantage of that given where the industry is. It’s becoming a great lever for us to use to not only bring in new capabilities, but to address some of the softness in the, the commercial side of the business and not just for us, but for everyone. So I think that over time, getting it to that 40% level is the objective. But I think you’re going to see it continue to run hot through next year. And of course in ‘25, we do have our RadHard platform coming online. Our Readout IC see or the focal plane array thermal imaging platforms. So, these are initially tied to DoD programs.
So, we believe that our goal is to maintain healthy levels of revenue coming from that customer base, while growing the commercial base. So that in the end, you get to that kind of 60-40 split between commercial and A&D. But it will take a couple more years to get that balanced.
Richard Shannon: Okay. Fair enough. Appreciate that. And my last question, I’ll jump out the line here. Just following up on the topic from last quarter, I think, I had a lot of questions from investors regarding the consulting fees and what they’re for. And when do we start to see the benefit of that? And I think there were some comments you’ve made in the past and even today about velocity through the fab, as well as efficiencies. So, maybe if you can tell us what – to-date, whether we’ve seen any real benefits from that? And over what time period we should expect to see that? And then, maybe if you can just quantify end of the future consulting fees you’re expecting to incur here?
Thomas Sonderman : Yeah. So, I’ll start, and Steve can talk about the fees. So, I think you are seeing the benefit of a lot of these transformation investments that we’re making. And I said this on the last call that instead of having to invest in new equipment, we’re investing in business transformation, because we believe the opportunities we have are really dictated by us perfecting this unique model that we’re putting in place. And so, not only higher ATS activities than we’ve ever had, faster wafer velocity, better balance of our wafer services business to allow us to consistently meet customer commitments. These are all attributes that are coming together as a result of the transformation activities. And then, with John Sakamoto coming on Board as our COO, he and his team are really institutionalizing these processes.
So that we believe as we get end of the second half of this coming year, as I said in my comments, that we will no longer need the third-party support. So, in aggregate, you’re looking around a five quarter program to prepare us for what we believe will be continued growth as this decade unfolds, but also recognizing that we are doing something very unique in the industry. We believe it’s proprietary and we want to take the softness in the industry at a macro level and use it as an opportunity to prepare for the upswing that we all know is coming and doing it in a way where we can scale effectively and efficiently as we continue to grow this business model that we put in place. Steve, you want to add about the…
Steve Manko : Yeah. And Richard, you may have missed this in the opening remarks of the call. But Tom mentioned, the program could go through the first half of 2024. So, with that, I would expect a similar level of fees in the fourth quarter of this year as what we saw in the third quarter. I would then expect that those fees to start tapering off as soon as the first quarter of 2024.
