That has the potential in the long term to be a cash flow benefit for us. And then we’ve been very thoughtful and been auditing all the transactional revenue that we’re sending out through billing and putting what they call payer blocks or other blocks on to make sure it’s right before it goes out. There’s been a lot of thought on the team so far, so good. We may have some of the transaction will be a little later. We’ll have a subscription be a little earlier, and I think we’ll wash out very well.
Michael Hoffman: All right. Cool. And then, beginning of the year, you revised some of the parameters around your outlook, and you reaffirmed those in this document today, 13% to 17% EBITDA, 50% free cash, when do we start seeing that happen now that 80% of the volume is on one platform and a lot of people can be held accountable in a good way. When do I start seeing the benefit of that 13% to 17% and that 50% cash conversion?
Cindy Miller: Yes. I think what we’ve talked about is taking year-end 2023 and then build from there. And more of that is based off of the timing of this ERP, the focus that we can then put into maturing that process as well as several others. So a couple of things we talk about as being levers that we have. Right now that the ERP is in and as we mature with this and that folks get back – get better, get smoother. We put in a few enhancements to help really facilitate things working and going – flowing through our plants and out the customers a little easier. There’s an opportunity then for us. We’ve been leaning into attrition, and we talk about removing the manual less. I’ve often said, at some point in time, when you get a technology system that can move data for you as opposed to needing to move it paper or needing to move statistics or needing to swivel chair things from one system to the next, that there should be a removal of a lot of that manual intervention.
So for us, I think we’ve got a continued – or maybe an additional targeted workforce reduction as we continue to develop these things. And like I said, we will still lean into attrition with controlled hiring. I think as we get better with our infrastructure, with any of the operational improvements, the ERP improvements that we can continue to fine-tune for efficiency, for productivity, for scheduling, for engagement with customers. I think all of those things in combination are things that we will enact in 2024 moving forward. And then we continue, Michael, as you know, then at some point in time, McCarran comes on. At some point in time, we retire the legacy system. Those are some pretty big levers that I think are – that are at our disposal in order to make that adjusted EBITDA margin hit the long-range targets that we’ve put out there.
Janet Zelenka: And just to add to that – 2023 is the base year for that 13% to 17% annual adjusted EBITDA growth rate that we expect to see. So you’ll see it in 2024. And the 3% to 5% is a CAGR growth rate that. So 2024 is when you should start seeing it directly Michael, to that question. In Q1, if you look at the commodity headwinds on paper, you will see some of that continue in Q1. But we have the system now. We have a great variable cost model. So we’re looking for that to begin in 2024.
Michael Hoffman: Okay. That’s what I was looking for. This is iterative every year, not all back-ended on the multiyear compound.
Janet Zelenka: Correct. Right
Michael Hoffman: Okay. I think this is a big part of this because the market is going to see evidence that all of this effort is beginning to pay off in 2024.
Janet Zelenka: And as Cindy mentioned, we already have put in a targeted workforce reduction that we executed in the fourth quarter that will generate $8 million next year. So those are some of the layers that we have as we drive efficiencies. She also mentioned careful hiring, attrition. We have strategic initiatives that drive efficiencies and improvements and then our modernization efforts in our facilities are starting to take hold. You combine that with the systems. You just sort of get a compounding effect on efficiency being able to be driven.
Michael Hoffman: Great. Thank you.
Operator: [Operator Instructions] One moment please for our next question. And again, we have Dave Manthey of Baird. Your line is now open. Dave? Mr. Manthey? Again, if you are mute, please unmute your line. Mr. Manthey? Good to hear you. Thank you.
Janet Zelenka: Good to hear your voice.
Dave Manthey: All right. Well, congrats on the ERP. My question, I’m going to talk about the paper. And Cindy, you talked earlier about the long-range paper pricing being in the 150 range. What’s magical about 192% and 60%? I would have thought that over time as you cycle in new contracts and sign additional customers and lose some that, that number would move around, like you’d be able to move the 192 set point lower and get a lower percentage of absorption. Can you talk about that formula and why that number hasn’t changed in a while?
Janet Zelenka: Yes. Dave, great question. So I think in terms of that, while anybody can set numbers and it ranges, what we actually tried to do is take market data and an understanding of what’s going on in the marketplace. And we took this whole recycling revenue surcharge and put that onto a scale, unlike anybody else in the marketplace on that side of the business, that was purely putting out a recycling surcharge fee, whether it’s a flat 10%, if it’s 20%, whatever it is. We felt that this one – the scale that we’ve designed, we looked at the market in general to see what do we think – where is the opportunities for us to develop the scale where we believe we can win. We can still be competitive. We can still get paid for the value of the service that we provide.
