Peter Smith: So that’s actually making it difficult to kind of keep the business separated. And we see opportunity in services to take — to provide services where Aviat didn’t have footprint and vice versa. So that’s a pleasant surprise that’s masked by our slower-than-expected ramp but we’re really excited about that. And I would say we’re 6 months out from being able to bring some of the Aviat software and put it on top of the Pasolink radio. And what I would — this doesn’t show up in the financials but we’re enthused about the customer engagement and the desire for us to make things like FAS and HAS [ph] and our network management software work on the Pasolink radios.
Theodore O’Neill: Okay. And on the diverse India microwave backhaul order, did something unique happen in India that opened up this opportunity for you?
Peter Smith: I think we proved ourselves with the E-band and multiband and our vendor-agnostic software as well as our delivery. And what that was an opportunity to do was go after some of the incumbents and the feedback that we’ve received, right? We did well when we got the small opportunity and the feedback we’re getting now on the microwave pieces, they like the technical performance of our product, the simplicity of the design and some of our key features. So we’re — we executed on the toehold and it seems like it’s going to pave the way for future growth.
Theodore O’Neill: Okay. And for David, on selling and admin expense, I’m wondering how it should trend from here. There’s $1.7 million of M&A in the current quarter. And I’m wondering if that continues.
David Gray: That should go down significantly from here on out. I wouldn’t expect there’d be some straggling costs as we tackle certain things. But no, they’re — like Pete mentioned, that would have helped the margins that also help our OpEx is the reduction in some of the transition services costs quarter-over-quarter as we go forward. So we expect to be getting more of those costs out going forward. So that should be working in our favor.
Theodore O’Neill: Okay. And my last question. Pete, I think every company should be filing S-3 shelf filings of however much money they can get. But I was wondering if you could share your thoughts on putting that in place for Aviat.
Peter Smith: Yes. So we have an existing shelf from three years ago that expires on May 4. And I know that some investors get concerned about — I think we’re — we’ve been a prudent deployer of capital. And so us just putting the shelf in place is a good corporate housekeeping if some opportunity were to present itself, we’re in a position to capitalize on it. But I want to be clear, we currently have no active deal in our M&A pipeline that would necessitate pulling down the shelf but we just wanted the flexibility. And then, a couple of investors put in some questions since that filing came out about our firepower. And we were comfortable using debt up to 3x our 12-month trailing EBITDA or 3x the pro forma combined EBITDA. So we think we have some significant firepower. And then an additional question was — if you use that debt, what would the rate be and we think it would be in the SOFR plus 250 basis points to SOFR plus 300 basis points.
Operator: And our next question comes from Tim Savageaux of Northland Capital Markets.
Tim Savageaux: You mentioned 7% organic growth for Aviat in fiscal Q3. I wonder if you can give us a similar estimate, not a similar number but the same type of estimate for organic growth that you’re implying here for Q4 — and I think that brings you in, right, likely bring you in somewhere around 5% for the year. Is that sort of rate maybe a little bit below your historic growth rate but would you expect — at least as you look at it now, would you expect that to persist into fiscal ’25 or maybe something more typical kind of mid- to high-single digits in terms of organic growth rate for Aviat?
David Gray: Yes. I think in that mid-single digits where we would end this year would carry forward into ’25. We’re not going to estimate in the high single digits at this point.
Peter Smith: Look, for modeling purposes, put it at mid-single digits and we — of course, we’re going to try and do better than that. And look, we talked about two other headwinds Tier 1 and Africa. We think that the Africa is really at a bottom and that’s largely interest rates. And another data point that I’d like to add is on a constant currency basis, our revenue was down 4%. It would have been 4% higher if we didn’t have the emerging market currency issue and we would have had about $1.9 million more EBITDA. So we beat the consensus on the bottom line despite that. So our number 1 focus is to drive the Pasolink revenue up quicker. And we — I would say the African currency issue that’s beyond the control of Aviat but we’re well-positioned when that dam breaks.
Tim Savageaux: Okay. And maybe I was going to follow up with that with hopefully a discussion on some of the puts and takes around that organic growth rate. You mentioned Africa, although that sounds like it’s impacting this year. And if it’s bottoming, maybe that could be a tailwind. I imagine the rural broadband growth drivers to get stronger next year. Then again, you mentioned finishing up a Tier 1 project and maybe that’s a tough compare. So Pete, I wonder if you might just go through some of those puts and takes around that mid-single-digit growth rate and what could drive it either way.
Peter Smith: Yes. So the Tier 1 project is a tough compare. We think we have about 35% share of rural broadband. And if the RDOF kicks in a meaningful way, that’s going to be very, very positive for us, a reversal in the currency with respect to Africa is going to be good. And then — so let me come back to the U.S. Tier 1. This is a question that we’ve gotten in the quiet period is about some multi-dwelling unit trials that we can’t disclose the customer but we’d acknowledge those. And if that were to get across the goal line, that would be a significant uplift to offset the completion of the project. So we’re pretty happy with our funnel and we think that the future is rather bullish for us and so the puts and takes — the put is the completion of the U.S. Tier 1.
