But conversely, on the other side, we did have additional fee from just great performance from our project managers, and I would call, those project closeouts. The examples of those are, we often carry a small amount in our projects, 1% or 2% for contingency in the event that there’s something that might have to be reworked or additional comments from regulators on some aspect. And a lot of these projects were closed out with no comment and in fact, accelerated approval from the regulators and outside stakeholders on our work. So that also contributed to, I would say, a byproduct of it or sort of a bank shot that contributed. You can see it in our DSO. When you are getting paid that quick and that much in advance of what your regular schedule is, you can see it in the DSO and you see it at 54 days.
And that also means when you are getting paid that quick and projects are going that well, then you are able to close out without having to use up contingency items. So I would say, there was the project closeouts in the fourth quarter just because of excellent project management and technical delivery from our staff across the company.
Andrew Wittmann: That makes sense and its helpful context. Just digging a little bit here next into the guidance. It might be helpful actually for you guys just to comment on the interest expense, given that interest rates have been changing and are so much higher. Maybe you want to give that and then we can all kind of back into your EBITDA. But when you get to the EBITDA, it looks like there’s certainly some margin improvement baked into 2024 over 2023. Certainly, that makes sense. It sounds like your utilization is very good and it sounds like you have been getting better here. You have got year-over-year benefits from the cost synergies that you have got in flight but haven’t been recognized yet in the first quarter, second quarter and even into the third quarter from RPS.
And then there’s even some of these mix things that we talked about, there’s always puts and takes on mix, but certainly, a lot of Ukraine contribution, like, you just talked about, mixes margins down, you had the incentive fee the other way, mix it up. But I guess maybe that would be helpful for you to kind of level set us about what the implicit EBITDA margin is and how much it is year-over-year and what you think the variable could be to make it even better than what you have guided? It seems like it’s good, but it could even be better if the year unfolds like you are saying it could?
Dan Batrack: There’s a lot of moving pieces there. Let me start at a high level and then I will let Steve talk to interest in some of the other items embedded within the company that we have. So for instance, our IAS up hired this year, because having RPS for a full year. But let me start at a high level. We do — we have embedded, if you do the calculations of our low end of our revenue range to the low end of our EPS range. You would see there’s about a 50-basis-point increase. In fact, you would see it quite uniform, if you went high, high and mid, mid and you did the calculation, you will see about a 50-basis-point increase. I do think if you take a look at a favorable mix, which might be a low end of revenue and a high end of EPS, you would be up at about an 80-basis-point increase within fiscal year 2024.
So that’s sort of a range. I will say that RPS was not with Tetra Tech in the first quarter of last year. It didn’t join us until the very end of January. So our guidance for the first quarter, margins are actually weighed on a little bit, even though they are higher than last year, they are weighed on a little bit, because RPS’ margins still are not at a level of Tetra Tech. In fact, Tetra Tech is up around 13%-ish, maybe a little more and they will be coming into the year around 10%. So in the first quarter, while you would expect margins to continue to increase, I will comment that we have about 20% additional revenue, which represents RPS at a lower margin, and of course, it will ramp through the year. So I think there are a number of puts and takes.
But overall, I would go to the annual year at somewhere between 50 basis points to 80 basis points depending on how you take the comparisons of different components of our margin within guidance for 2024. And let me have Steve speak to some of the individual moving items such as interest and other items.
Steve Burdick: Yeah. So, Andy, if you take a look at our model, the — based on the run rate of depreciation each quarter, midpoint is probably about $26 million of depreciation next year. Amortization, it was on Dan’s slide up there. You saw about $42 million. Our net interest cost probably somewhere between $40 million and $45 million is what we are looking at. So the midpoint about $42.5 million and those are probably those moving pieces to get to an EBITDA number.
Andrew Wittmann: Great. That’s all for me. Thank you very much.
Dan Batrack: Great. Thank you very much, Andy.
Operator: Thank you. Our next question comes from the line of Ryan Connors with Northcoast Research. Please proceed with your question.
Ryan Connors: Great. Thanks for fitting me in and good morning.
Dan Batrack: Good morning, Ryan.
