Shawn Mural: Yeah, I’ll start with, yeah, I want to reiterate, we are off to the — start of the year like we expected right? So $69 million, I think we said when we released the guide, the profile or give up 45% of the adjusted EBITDA in the first half that that remains the case for no change. We’re feeling good about where we stand and the opportunities that we see. From a margin growth standpoint, as you see us and I talked about it a little bit, we’re streamlining operations a bit putting our processes, tools, things like that in place. That’s not going to be huge incremental margin enhancements. It does, of course, a couple of things also that are happening to us. And again consistent with what we said, 60% of the revenue in the quarter was on cost tight program.
So that we said, we were trending higher in the back half of last year. We continue to see to see that that’s supporting our clients and customers with the demands that they have. Part of what you see on page 7 back to the earlier question on, I’ll say mix changes. There are certainly higher margins and some of the things that are that are on there. Again we feel good about our ability to go address those things. But the team is doing an exceptional job of consistent improvement in program performance and ensuring that we can address everything and capture them – Chuck, any other comments you want to give?
Chuck Prow: No, I think you’ve summarized it perfectly. It’s just continuing to work on mix and then our teams continuing to lean out the operations. May be the last point that we didn’t talk about was just the seasoning of the backlog. Our $12 billion in backlog continued to be very front-end loaded, i.e. in the first couple of three years of the execution. And historically and the progress that we’re seeing indicates that as that backlog continues to season, we’ll drive higher margins.
Bert Subin: That’s great. Thank you. I guess last question I had another one for you Sean on the leverage side seems like that’s ticking lower sort of as expected. And you have here that you’re sort of targeting three turns or less by the end of the year which is encouraging. I guess what you think about your position, one what’s the current variable split? Is that still roughly 70 30? And then two, from the cash interest expense standpoint seems like the first quarter benefit a little bit. I think you said 25 million, but you’re looking for 116 for the year? Just some commentary on why that’s.
Shawn Mural: Yeah. So yeah, it is still the variable split is still 70, 30. Again, where I think for interest expense for the quarter? Yeah, we had a we had a little bit of favorability and I think you know some of it is just timing. I think we feel fine with again the guided about one 16 and there are things that come up. We just want to make sure that we’re covering everything Bert so that nothing particular there. The guide the 6.16. Thanks, John.
Bert Subin: Thanks, Shawn, thanks, Chuck.
Operator: Our next question is from the line of Joe Gomes with Noble Capital. Please proceed with your questions.
Joe Gomes: Good morning. Thanks for taking my questions.
Chuck Prow: Thank you, Joe.
Shawn Mural: Joe, how are you doing?
Joe Gomes: Well. So the first one kind of just wanted to ask the SG&A line. Look we’ve it looks like it took a step down in the quarters. Just wondering if there’s anything particular behind that? And if that is a good level going forward here, should we see that expect to see that to go back up?
Shawn Mural: Yeah. So no as I mentioned a little bit Joe we will continue to work on our back-office operations and that’s our stuff. We did a modest amount of realignment and restructuring as we closed out 2023. So you do see a little bit of an impact with lower SG&A here in Q1. The other thing I’ll say is that there’s always some seasonality to it, right? One or that one of the elements there in the SG&A is our bids and proposals and pursuit activities. And so there’s some there’s always some seasonality to how those things play out. But I think we feel good about where our cost structure is today. It’s very well aligned to meet the needs of the business. We have more work to do with putting those tools and processes in place all the things you would expect us.
Joe Gomes: Okay, great. Thanks for that one. And then Shawn maybe to talk a little bit more about the Air Force Augmentation Program. The DoD announced that you guys are one of the awardees and as you mentioned it’s now a $15 billion program up from $6.4 billion when it was last put out, similar to the other program we talked about it was a $900 million in Vectrus was awarded about $300 million. Do you have similar type of numbers here that 6.4 what does V2X end up getting on under this Air Force program? And how do you see the opportunities on the Air Force program playing out from there?
Shawn Mural: Yeah. I think under the last version of Abcam Mike we are 250 million?
Mike Smith: From 2021
Shawn Mural: From 2021 to today it’s about 250 million of that. That CAP program has really been a good program for us. So we’ve done a really nice job of expanding into new task. The margin profile has done very, very good. They’ve done a very nice job on the margin profile. And as I’ve mentioned, the demands around the world are not diminishing point one. Point two, existing assets for IT assets in the military and sometimes even the State Department require extension and the last point I’ll make is that the prior version I’ve asked cap add many more awardees but the consolidation of dine in PA into momentum et cetera have really continue to net down if you will the competitive set to the four or five players that you know.
So it’s a nice contract for us. I really like the operational capabilities that we’ve been able to develop internally in support of the Air Force client. And I look for the team to do a really nice job against the requirements that are going to be issued here in the near term.
Joe Gomes: Great. Thanks for that. Appreciate you taking the questions.
Shawn Mural: Thanks a lot Joe.
Operator: Thank you. At this time, we’ve reached the end of the question-and-answer session. And I’ll turn the call over to Chuck Prow for closing remarks.
Chuck Prow: Thank you, Rob, and I appreciate everybody joining us on the call today. We’ve had a very nice quarter and where we look for looking forward to updating you at the end of the second quarter. Have a good day.
Operator: This will conclude today’s conference. You may disconnect. Your lines at this time and thank you for your participation.
