George Zoley: Yes. And during the year last year, we benefited from the full impact of those that were somewhat negotiated at the end of ‘22 and early ‘23 and that helped as well.
Kirk Ludtke: Got it. Thank you. That’s helpful. And then with respect to the – you mentioned the technology in that in ISAP is evolving. Can you talk about what you expect to happen with respect to the technology in that program and how it might impact margins and CapEx?
George Zoley: Well, all technologies, I think are obligated to continue to develop and evolve as our products, which presently include ankle monitors, phones and the new watches that we’ve developed. It’s called the VeriWatch. And we continue to think through replacements for those items in the future or replacements or inclusion of those monitoring mechanisms.
Kirk Ludtke: Okay. Thank you. Last call, you mentioned that county jails in Northern States were moving away from DHS and ICE and that might be an opportunity down the road, do you – I guess is there any way to put a range on that? How many beds you think might be in play this year?
George Zoley: It’s obviously going to depend on getting additional funding for ICE as we move through the fiscal year. And those opportunities are probably going to pop up in the second half of the year, assuming additional funding.
Kirk Ludtke: Got it. That’s helpful. Thank you. I appreciate it.
Operator: Thank you. And our next question comes from Greg Gibas with Northland Securities. Please go ahead.
Greg Gibas: Hi. Thanks guys. Congrats on the quarter. Thanks for taking the questions. I wanted to get a sense because I know we expected a little bit of a rebound in the second half of 2023 and ISAP participants that didn’t necessarily happen. And I just wanted to see if you had visibility on how those populations are expected to change or is it really stable or flat kind of the best assumption right now as we await more visibility from whether there is going to be government funding?
George Zoley: We really won’t know anything until the end of the first week of March. That’s the deadline for the existing continuing resolutions. And the funding for – the balance of the fiscal year will be determined by, I believe March 8th, unless there is the government shutdown of some sort, which we hope there is not.
Greg Gibas: Okay. That’s fair. Just wanted to see if you had any insight on whether that would change otherwise. I wanted to also ask, just with respect to your cost structure in 2024, any notable changes or variations on expenses relative to 2023 that are worth calling out, or is the cost structure going to be pretty steady comparatively?
George Zoley: I would say it’s going to be pretty steady comparatively. The biggest maybe line item change will be as we continue to reduce our debt, the interest expense year-over-year should be lower, I think what about, $20 million, $25 million. And that doesn’t – our guidance does not assume any benefit from any refinancing that may take place during the year as we discussed. We are looking at in the second half of the year at the latest at trying to redo or re-price or refinance the term loan. So, that could provide some additional benefit or upside.
Greg Gibas: Got it. I guess just last one, and I apologize if I missed this, but regarding sales, the potential sale of larger assets, has anything changed there in terms of interest levels or you might be able – the range of values that you could receive? Just curious if – I know that’s been something you have looked at the last several quarters. So, if there is anything different in terms of the potential sales of larger assets.
George Zoley: No. Our larger assets, what we have done is redeploy them through leases, most recently in Oklahoma and then a year or 2 years before that was New Mexico. Partly it’s driven from a state level by their funding issues and their budget issues and their ability to be able to make a large acquisition like that. So, I think it’s probably likely that it’s more preferable from their perspective to lease than to buy, but we will continue to look at both if it makes sense.
Greg Gibas: Okay. Thanks guys.
Operator: Thank you. And ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to George Zoley for any closing remarks.
George Zoley: Thank you for joining us on this call. We look forward to addressing you on the next call.
Operator: Thank you, sir. This concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day.
