It’s a 20-year company that we bought based in Houston. We have a lot of relationships. They have a lot of skill sets, one is fire and safety, for example, that there are no one fell in that specific Southwest Region. So we’re building on our strengths and doing a good job in delivering on what we commit to do.
Eric Beder: Great. A little more granular. When you look at Q4 revenues, do you still expect it to be about two-thirds non-CEA?
Brad Nattrass: So for Q2 and Q3, it’s maintained that. I would, based upon our pipeline and what’s expected to close and the backlog that we have, I would expect it to stay at that level. If we continue to have good strong CEA announcements this quarter, like we started to see in Q3, I would say you could see that begin to go more towards the 50-50 mark in Q1 and Q2 next year as the cannabis facilities or the vertical farm facilities ramp up.
Eric Beder: Great. And last question. In terms of the equipment, obviously, you need more CEA to drive the equipment business. Are there opportunities here given that your purchase have equipment here, and I’m assuming that a lot of people are in the same issues as you are with CEA that the margins in equipment when they come back can be, I guess, in theory, a little bit stronger because the equipment companies right now are having problems selling their product?
Brad Nattrass: Yes. Thank you, Eric, I would look at it as we can’t agree. Like when you look at the 9-month performance, that’s close to $4 million, right, in margins that we weren’t able to take advantage of this year. I feel we have relationships with dozens of manufacturers. And I feel that we’re in a place to better serve our clients if we have a cost-plus markup. If we’re working with them on is services, we’re then moving forward to construction and then it goes to equipment, we want to be equipment agnostic. And to do that, we just have a set markup in our contracts and then we work with multiple manufacturers. And those manufacturers just are not in the U.S., we’re also in Europe as well. We definitely want to increase the equipment, Eric.
I think you asked on the last call, we have in Q3, we did successfully integrate mechanical or closed the mechanical contract. We haven’t shipped it yet, but into a non-CEA, very large clients. So it is a focus for us to spread our Acasta a larger web and also sell into those other markets equipment systems too.
Eric Beder: Thank you.
Operator: Thank you. The next question is coming from Ellis Acklin of First Berlin. Please go ahead.
Ellis Acklin: Hi, guys. How’s it going? Thanks for taking my questions. For starters, I’d like to circle back to your earlier comments about keeping your team and key staff members in place so that you have the capacity to handle much larger revenue going forward. I was just wondering if you could share some insight as to what the inflection point might be in terms of revenue volume so that you guys can consistently generate a positive adjusted EBITDA with the current staffing and G&A cost structure?
Dick Akright: I’ll take that one. Good question. I think as we’ve indicated before, we think we could still see a relatively substantial increase in the revenue with the staffing that we have. As I’ve sat here today kind of swagging that, I would say I’m pretty comfortable that we can get up to at least $40 million of quarterly revenue without having substantial increases from a personnel standpoint. And again, part of that is just we’re just seeing an increase in the size of the jobs that we’re doing, especially on the construction side. And then when the cannabis equipment side does come back, the ordering of that equipment doesn’t take a lot of people. So I kind of played around with our projections going forward. And I certainly think that $40 million of revenue, even $45 million of revenue a quarter, it’s not going to require very many more, if any, people for us.
And that was kind of the way we’ve built the business. It’s just unfortunately with the falloff in cannabis and especially with the way it hurt equipment, just kind of lacked is from the standpoint of our income statement with that downturn. But when it comes back, we’ve really got the people in place to be able to handle things.
Brad Nattrass: I’ll add on the back there, just a little bit, Acklin, I’ll add on to the back there. As our revenues increase, we will add architects or engineers or site superintendents, those will be the key roles that we continue to hire and bringing operational expertise in certain areas, we’ll bring those individuals as well. But as far as the senior executive team, EVP and hire, we don’t anticipate much need for that in the very near future for sure.
Ellis Acklin: Okay. Just to continue along with this line of thinking, my question is more assuming that the business mix remains as it is going forward for a while and keeping the staff that you have in place, where is the point? Is it in revenues where you can break even consistently at the adjusted EBITDA level? Is that $25 million, $30 million, $35 million or like Dick was talking about $40 million. Is there a spot that you guys target? I was like okay, more breaking even here?
Brad Nattrass: It all depends on that mix, right? So with —
Ellis Acklin: Assuming the mix stays about what it is right now with depressed equipment sales.
Brad Nattrass: Yes. That’s where our guidance is, Ellis, right now, right approximately $30 million in revenue. And that’s only with less than 10% equipment in the quarter. So that equipment changes, you see some inflection points hit in the cannabis space that can decrease. But our guidance is approximately $30 million in revenues and breakeven to positive EBITDA, we’re there right now.
Ellis Acklin: Okay. That’s great. And then if I may, just one quick follow-up. Regarding the project you had to take out of the backlog last quarter. Is there any update on that? When that might stop idling or if you might be able to put it back in at some point?
