Mark Hartman: Yes. I’ll say consistent with our prepared remarks. And as you mentioned, this is a second half story here. As Chip was mentioned earlier on the call a lot of the activities that were, as he mentioned, confirming and then working it towards they take time. And so that’s why we are talking about this is really a second half improvement.
Michael Ciarmoli: Okay. Is a stable supply chain good enough to get you there for the second half? I mean, most of the peers that are reporting are seemingly calling for a stabilized environment and you guys unfortunately strike your fiscal quarter for September, which kind of puts you in a little bit of a bind there too. I mean, is stable enough to get you there for the second half?
Mark Hartman: Stable is enough, because we have a lot of inventory as you can see and we have a lot of assembly and test and shipping capacity. And we need some stabilization and not missing those final one or two parts that hold us up. So we’ve got some good plans around Rapid Response Centers and shift balancing to get us that capacity and capabilities delivered in the second half.
Michael Ciarmoli: Got it. Perfect. Thanks, guys.
Mark Hartman: You’re welcome.
Operator: Your next question comes from the line of Noah Poponak with Goldman Sachs. Your line is now open.
Noah Poponak: Hey, good evening.
Chip Blankenship: Good evening, Noah.
Noah Poponak: This is going to be a little repetitive, but I guess I’m just struggling to piece together all the margin inputs, because you know, I just heard you saying stable is enough. Your — you know, description to the question prior sounded like supply chain was stable, if not a little better. You’ve got better pricing, it sounds like? And then just general cost input inflation, supply chain disruptions we’ve been dealing with. I guess, I’m trying to better understand why the margins were worse in the quarter. You know, putting the back half ramp aside for a moment, just still struggling to square. I guess it’s hard to really answer without showing me, but the line-by-line cost inputs, but it’s hard to understand why the margins are worse and it seems like some of them that you’ve had were stable and some of them that you’ve had were better?
Chip Blankenship: So no, I was pointing to some of the improvements that we’ve seen, but there’s in no way would I term our supply chain stable right now? What we’re trying to do internally, there are two places where the costs show up right now from our labor and training and so people who are in training are not even applying their labor to making a part. And then once they graduate from a step of training and are on a machine making a part, they’re making fewer parts than to standard or a proficient operator would make. So those are two places where costs are accumulating and impacting our margins that by the time we get to the second half, we’re planning to have more people be proficient by that time. So that’s an internal stability factor.
But then externally, we have — even though we’ve graduated more than 30 suppliers off that watchlist, we’ve got more than 20 on it right now. And as you know, you need all the parts to make the unit. And so the fact that in some cases we’re not getting good signals and we’re not getting the parts we need on time. We end up very much sub-optimizing our internal factories. So that’s sort of a double whammy on cost where we’re not getting the output and we’re resequencing or doing work at it, having traveled work or having to re-sequence it.
