Trevor Walsh: Terrific. Thank you for the perspective. Maybe one more from me. For Shawn, it looked like, based on the guide, that you’ve got a little bit of an uptick in the CapEx outlook for the year going from about $25 million to $30 million. It looked like from what I could tell in our model. Just curious where the added investment is going or kind of what you see, kind of where the — where that spend will be progressing throughout the year?
Shawn Mural: Yes. No. Great question. Thank you. So, we had mentioned at the end of last year, in the third quarter release, that we would — we thought CapEx would be around $28 million. We came in slightly under that, Trevor. We came in right around $26 million in CapEx for 2023. And so, really what you’re seeing is a carryover of that. Think of that as engineering tools. Again, just — everything that Chuck just mentioned about the modernization and sustainment capabilities that the business has, we’re investing in some engineering tools to help ensure that we have that capability and we enhance it going forward. So, that’s really all it is, Trevor, is timing between years on those investments.
Trevor Walsh: Got it. Makes sense. Okay. Thanks for taking my questions. I’ll hop back in the queue.
Operator: Our next question comes from Stephen Strackhouse with RBC Capital Markets. Please proceed with your question.
Stephen Strackhouse: Hey, good morning, all. Thank you for taking my question. I was hoping you could provide a little bit more detail around the Middle East exposure, maybe how fast can that market grow? And then maybe just even kind of compare contrasting that to INDOPACOM?
Chuck Prow: Yes, you said — Stephen, hello, how are you doing? Did you say — you cut out, but you say Middle East exposure?
Stephen Strackhouse: Yes, I did. Yes.
Chuck Prow: Okay. So, yes. So, we — Middle East is our — and has been historically our largest individual, non-CONUS area of operation. We’ve been operating in the region for really three decades now. As you undoubtedly know, there is a lot of activity in the Middle East now. As we mentioned in the prepared remarks, the op tempo that we are in fact seeing in the region today is being largely handled through the existing contracts we have in the region. Although we did note a new win with the Air Force as well, that’ll be ramping here as we speak. With regards to additional business, additional orders, we do believe when all the funding situations are finally resolved with regards to the Congressional action, there are opportunities for new awards.
We have several demand signals from our clients that we worked diligently with our clients on. But, again, we see op tempo remaining high for the foreseeable future. And, again, as the budget resolutions — as the budget situations, I should say, are resolved, the opportunity for new orders may in fact arise.
Stephen Strackhouse: Great. Thank you for that. And then maybe just kind of following up there on the budget, maybe just the impact of the CR and kind of what is or isn’t factored into the 2024 guide? And then maybe also just kind of how importantly kind of the lack of any Ukraine supplemental might be, or then what upside that has for the 2024 guide as well?
Chuck Prow: So, we have factored in a more muted award scenario for this year, as Shawn indicated in his prepared remarks in the prior question. Having said that, we will see some awards. Our teams continue to do an excellent job with on-contract growth, which is typically provided from the existing budgets. And then the reality is that the op tempo remains high. So, I think, balancing both new awards on-contract growth and the realistic — and the realities, I should say, of the current op tempo gives us confidence in the guides that we’ve issued here today. I think, you mentioned INDOPACOM, too. There are not exercises, named exercises scheduled at this point in time, because, as we’ve indicated in the past, those are done on odd years. Having said that, we continue to see several demand signals and a high degree of op tempo in the region, and we continue to provide ways to modernize bases that we’re currently operating on, such as Kwajalein in the Marshall Islands.
Stephen Strackhouse: Great. Really appreciate the color. I’ll jump back in the queue.
Chuck Prow: Thank you.
Operator: Our next question comes from Sahej Singh with Stifel. Please proceed with your question.
Sahej Singh: Hey, guys. Good morning. I’m on for Bert.
Chuck Prow: How are you?
Shawn Mural: Good morning.
Sahej Singh: Doing well. I guess, you’ve touched on it, but just to get some more color on it, just curious about your view on MRO ramped lifecycles. You sort of talked about pipeline, but what are you seeing in terms of new awards? How do you then see that impacting or normalizing margins? Just any color you could provide there would be helpful.
Chuck Prow: As we talked last quarter, the F-5 Adversary award was an important award. It happens to be fixed price as well. It’s still under protest. We will, at the resolution of that protest, assume that we’ll get — be able to start that program here in this year, probably closer to the second half of the year, I would assume. Really, the only two platforms we have in retirement now we’ve talked about are the KC-10 and the T-1A. Both of those are — been very predictably winding down. And other than those two, we have no other — at this point in time, we have no other known retirements in our portfolio of contracts.
Sahej Singh: Okay.
Chuck Prow: Do you have — was there anything else to your question? Is there anything else that you wanted to add on that one?
Sahej Singh: Just the margin impact would be helpful. And then if I could add on to that, I guess thinking through maybe early days on maybe Test Wing in the Pacific and Atlantic, if you could touch there, too?
