Doug Lane: Yeah, hi. Good morning, everybody. I just have a couple of things here. I look at the third quarter EBITDA loss of $5.7 million and that’s not really too far from where that quarter was pre-COVID. Through nine months, your gross margin is 40%, 41%. Again, not too far from where you were pre-COVID. So I guess my question is, how close are we with regards to reverting to the mean on your cost structure?
Bill Shea: From a margin perspective, if you look at, Doug, if you look at a 10-year history from 2012 to 2021, you saw us in that 42% range, give or take 50 basis points. We had a low point of 37.2 a few years ago and we’ve been climbing back. And this year, we’ve obviously made great progress on that. At the beginning of the year, we had guided that we’d be in the low 39% for the year and we upped that after the second quarter and now anticipate that our margins will exceed 40% this year and be in the low 40s, 40.1%. So we’re climbing back, but we’re not all the way there yet. We do think there’s still opportunity for us and that we’re going to revert back to our historical mean of 42% over the next couple of years.
Doug Lane: You’re getting pretty close. Anyway, I’m looking at the balance sheet here and I have to ask, what’s the acquisition fund look like? Are you still prioritizing acquisitions in your growth strategy and what’s the environment like these days?
Jim McCann: Well, I think, Doug, this is Jim. The overall environment, I’d say, is that a lot of smaller companies, particularly earlier stage companies, really have a hard time finding capital if they don’t have profitability or a clear short-term path to profitability. So it’s a target-rich environment. We’re being very judicious about what things we give real consideration to. We talked about an acquisition just a few weeks ago. We don’t even really look at that as an acquisition. We see that as a talent acquisition. We see that as a capabilities acquisition. It comes with very little revenue, but a very talented technology team that’s fitted very nicely with our existing team. We’re using that to improve our capabilities.
We’re spending a lot of effort in terms of our portfolio of products that we have. So I don’t think we need to do any acquisitions to achieve our near-term objectives. We will be opportunistic if we find something that really does fit our portfolio well and we’ll continue to do these tuck-in kind of talent acquisitions that really buttress our capabilities of providing a full experience for our consumers, helping them to have more and better relationships and provide them with a different blend of services. So I think it’s a good environment, but we’re being very judicious about what kind of a company do we want to be, what capabilities do we need to really serve our customers. We already have an enormous database. How else can we serve those customers in that database is our primary objective.
And Bill or Tom, any follow-up?
Tom Hartnett: Yeah, I was going to say, I mean, you’ve seen us do big acquisitions over the years with Harry and David and Personalization more. You’ve seen us do tuck-in acquisitions with the Sherry’s Berries and Things Remembered type of items. And you’ve seen us almost like acquihires over the last year or so with SmartGift and now with Cardisle to kind of bring capabilities to the company that will help enhance the offerings that we have for our customers. And with Cardisle, it does give us an offering that comes with the greeting cards that are at the low price points that our consumers can interact with us. And we want our customers to come and visit us and interact with us more frequently.
Doug Lane: Great. That’s very helpful. Thanks, guys.
Jim McCann: Thanks, David.
Operator: Ladies and gentlemen, this was our last question.
Jim McCann: Well, thank you all. Thanks for your interest and for your good questions. Any other follow-up you have, we’ll be happy to chat with you one-on-one. We’ll be happy to do that today, tomorrow, anytime in the future. A reminder, we’re at the beginning of the Mother’s Day push here, so all the wonderful moms in your life, we’re here with a beautiful selection of gifts from all of our portfolio brands to help you express yourself in just the right way to the women in your life who are moms, who had a very mom-like influence on you and the people around you. So enjoy the upcoming Mother’s Day holiday. Thanks for your interest and your time today.
Operator: Ladies and gentlemen, the conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
