Matt Hewitt: Got it. And then, maybe one last one and it touches on that a little bit as far as the site optimization. You have been building out some capacity, particularly in some newer markets. How quickly — I mean, what does the pipeline for those services look like? How quickly do you think you can ramp up on the sales side to kind of offset some of the upfront costs that you’ve borne getting those services ready to go?
Bob Leasure: Well, that’s a good question. And I would like it to be a lot faster than that it is, but I’m probably — I’m not very realistic. So — but I would tell you, in Rockville, we’ve only brought it probably 25% — probably 20% right now. The capacity is available in what we’ve built in Rockville. But what I’ve seen grow over the last three months during the quarter we just finished in December 31, very optimistic about the level of quoting activity, the backlog we built, and how we’re ramping up those revenues. Now, again, it’s only 20% of the facility and the capabilities available. But seeing that ramp up has been very encouraging. But I don’t think — that’s something that I think that facility should eventually do $25 million to $30 million.
That’s not going to happen overnight. That will take a couple of years to build that up, I believe two or three years realistically. But I’m very pleased with what I’ve seen to date in the first 90 days that was open. And as we bring — we’ll bring on more capacity by March and, again, by June, and so far, the response to what we’re building is very positive. And that doesn’t only impact just Rockville, but some of the things we’re doing in Rockville impacts our other facilities, because it’s — when we acquire company, remember, we pick up those sales and benefits from many other locations. And we’re already seeing what we’re picking up in Rockville benefiting other locations that we have. So, I’ll remain optimistic at this point and I think that will be good investment for us.
Operator: Thank you. Our next question is from Dave Windley with Jefferies. Please proceed with your question.
Dave Windley: Hi, thanks. Can you hear me okay, Bob?
Bob Leasure: Hi, David. Yes.
Dave Windley: Okay. Hi, good afternoon. Thanks for taking my question. My first question is what percentage of 2022 — fiscal 2022 revenue was represented by your NHPs, and maybe more specifically the Cambodia NHPs?
Bob Leasure: David, I think in our last press release in November, I believe we indicated that maybe the Cambodian NHPs were $140 million of our revenue. Now, it’s not top of my head, but I believe that’s what we said in the November. Beth, is that correct? Beth, are you on the phone?
Beth Taylor: Yes, that’s correct. It’s about — yes, 25.5%.
Dave Windley: Okay. And that takes you through the end of the fiscal year? That was kind of for the full year?
Beth Taylor: Yes, that was fiscal ’22.
Dave Windley: Okay. And then, as I think about your guidance and the progression, you, obviously, are guiding toward a lower level of activity in the first quarter. As we sit here today, I mean, you may not have the books closed, but the first quarter is done. What drives the sequential improvement — what’s the difference between the factors impacting 1Q versus what you’re going to get in 2Q and beyond? And maybe you could provide a little more detail as to whether 2Q, 3Q, 4Q looks similar, or do you expect a kind of a progression — an improving progression through the balance of the year?
Bob Leasure: You’re breaking up through some of that call, David. So, I think you’re asking if — where we’re going to see Q2 versus Q1, where would some of the sales increases come from?
Dave Windley: Yes. I apologize if I’m breaking up. So, just trying to get at the differences in 1Q, which is already now done versus your step-up in both revenue and profit margin 2Q and beyond.
Bob Leasure: Yes. I think that we will see some benefits from price increases. So, the price increases in the NHP business are going to be somewhere around 65% to over 100%, depending on where they came from. And those didn’t go in effect until January. So, I think those will be substantial, because we are still selling NHPs. In addition, I think, we’ll start seeing some of the additional services come on board from the DSA business. And then, the price increases we took on the RMS business range and the other models other than NHPs were somewhere between 5% and 25%. So, I think we will see some increase in sales from those. Between now and the end of the year, I do expect that we will see increasing sales from NHPs.
Dave Windley: Okay. So, then maybe my question on DSA would be, in terms of the cadence of impact, you said you’re still putting out record levels of quotes, but those are being dampened or diluted by cancellations. And normally, cancellations have a nearer-term impact and the quotes have maybe an out-quarter impact. Is that the right way to think about the new business — the net new business that is coming in?
Bob Leasure: It is. It puts additional pressure on the short-term operation to be flexible to move things around as things open up, or to go back out to the market and see if somebody else has a need for the capacity that just opened up. And — so, it does require a little bit more flexibility in how we handle the operations.
Dave Windley: Okay. Then my last question on the debt front. You described a number of — you and Beth, both, the movements in your delayed draw on your revolver and the covenants or the limitations disclosed in the press release tonight. From a practical standpoint, do you see those limitations through March of ’24 as preventing you from doing what you want to do in the business?
