Mike Bieber: Software is a big part of our business. It’s doing very well. It grew a few million dollars year-over-year. This year was $15 million in revenue. We don’t break off EBITDA, but it was, I believe, the highest margin business that we have at Willdan, so outstanding. And even better yet, they have a great pipeline going into the beginning of the year. We’re expecting some contract notifications here very soon that we’ll be able to talk about. So that looks really good going into next year. And it’s all driven by the fact that we have very little competition in that area. It’s really the competition to be in action by clients. We have a dominant solution that’s being widely adopted by large utilities around America right now. And it’s also starting to spin off consulting work. The partnership with the consulting side of the business is very effective. These newest contracts are about 50-50 software and consulting. So very good.
Craig Irwin: Okay. Excellent. And then the project closeouts or the sort of end of year budget flush that did help us a little bit this quarter. Can you maybe scope out for us where that came from? Was that from several customers, sort of broadly across the customer base, one or two customers? And if you could give us any color on the relative outperformance there versus the organic growth, and obviously, that is organic, but the organic growth in the core business.
Mike Bieber: Yes. It was very clearly three different areas. It was the California IOUs, First Energy on the East Coast and Con Edison. All three of those customers were behind in their energy efficiency goals and came to Willdan and asked us to expand our contracts, if we could. In every case, we made those expansions in the fourth quarter of the year and hit the higher numbers. And the results were very clear. It was $20 million in gross revenue, about $15 million in net revenue and $3 million in EBITDA. I think Kim mentioned that in the script. It came right out in the fourth quarter that we just couldn’t have expected. When you look at that, obviously, it was great results for the fourth quarter. We didn’t factor that in.
You can’t rely on that happening next year. So that’s why in guidance, if you back into our organic revenue growth, you’ll only see like 5% to 7%. Well, the $15 million of extra revenue that we booked in the fourth quarter of this year is about a 5.3% headwind to next year. So, if that happens again next year, then we’ll see the types of double-digit organic growth that we’ve been printing here for many quarters now.
Craig Irwin: Excellent. Then last question, if I may. IRA has been a little bit of a headwind from many of the other companies in the energy efficiency space. But at Willdan you’ve seen quite a lot of activity with your customer base, looking for you to provide consulting to help them figure out how they would use IRA money and what makes sense for them as far as sort of long-term investment that this could unlock. Can you maybe describe to us a little bit about what you’re doing to prepare for the next phase when the actual funding for these projects becomes available? Do you expect to have material participation on the projects where you’ve been advising and consulting? Or would you expect the consulting business to remain the driver there?
Mike Bieber: Yes, it’s a good question, Craig. We don’t quite know what’s to come, but we are helping more than 20 clients, and they’re generally municipalities figure out and apply for IRA funding right now. These are not material contributors to revenue right now, and they weren’t in 2023. They’re small-dollar studies, less than $100,000 apiece, so not material in aggregate, but there’s a lot of activity going on in the small front-end consulting work trying to figure out how to access IRA dollars. We have a number of opportunities, if those — if the funding is received by those communities, and that turns into projects, we have a number of opportunities where we will likely follow some of that funding into the next phases of design and implementation. But it’s still early. None of that money has hit the street at this point. It’s still in the application phase.
Operator: Next question is coming from [Richard Eisenberg], a private investor. Your line is now live.
Unidentified Analyst: Congratulations on a great quarter.
Kim Early: Thank you, Richard.
Unidentified Analyst: The software contracts that you are anticipating in the first half, is that embedded in the guidance? Or if they come through, then you kind of raised guidance for the year, in the $180 million to $187 million range? And also, is there a potential business in states like Florida, Texas, North Carolina, South Carolina? And the last question is, is the Company able to take advantage of this huge demand for artificial intelligence like data centers in your Engineering segment? Congratulations again.
