Jim Tarangelo: Yes. I’ll take the first one with respect to the underlying lever. So I think the results we generated in Q1 and the sources of those margins coming from, again, scale and SG&A, supply chain efficiencies disciplined at the middle of the P&L with food and labor, and the continued progression of new business margin maturity. I think we expect a similar mix as we look toward the remainder of the year. As I mentioned, I think if you look at the core levers drove the majority of the margin improvement in Q1, I sort of rounded to about 50 basis points. If you look at the midpoint of our guidance at 45 bps, that’s pretty consistent with what we’re seeing. And like I said in Q1, the sort of upside I think generally came from inflation moderating, and that’s obviously not definitively built into the outlook.
John Zillmer: And I would just add. I think — I’m sorry, I didn’t mean to interrupt you. I was just going to add on the base business acceleration that we’re seeing, I think it’s a combination of things. It’s improved volume in existing locations, more customers having returned to work on a full-time basis. So you’re seeing a ramp of improving customer counts, and you’re also seeing the ramp up of accounts that we’ve sold over the course of the last couple of years beginning to mature in terms of the range of offerings as well. So it’s a combination of both. I think we can basically put COVID in the rearview mirror and say that we fully recovered any of the base business losses that we experienced during COVID. And now we’re just beginning to really get back to a steady state and working on volume growth and improving customer counts.
Neil Tyler: Thank you very much. That’s very helpful, very clear.
John Zillmer: Thank you.
Operator: Our next question comes from Ashish Sabadra with RBC Capital Markets. Your line is open.
Ashish Sabadra: Jim, congrats on the appointment and solid results. I just wanted to see if you had any thoughts on M&A. If you’re thinking of any tuck-in acquisition or even in terms of portfolio, you’ve done some pretty good portfolio rationalization, but anything remaining on that front in terms of non-core ownership. Thanks.
John Zillmer: Yes. I would say this is John; we’re always looking at potential tuck-in acquisitions to go ahead and build out capabilities of the various businesses we operate. We’re always open to looking for those kinds of extensions, if you will, as we did with Union Supply. And nothing on the horizon today to talk about, and — but we’re always open and willing to pursue things that may become available if we can do it on an accretive basis. So we don’t view M&A as our primary growth driver. It’s really a secondary driver. And we’ll be opportunistic, but we’ll be very disciplined.
Ashish Sabadra: That’s very helpful color, solid results.
John Zillmer: Thank you.
Operator: Our next question comes from Josh Chan with UBS. Your line is open.
Josh Chan: Hi, good morning. Thanks for taking my questions. I know that on the net new side, you aim at 4% to 5% a year. So I guess with one quarter in, how do you feel about that target for this year, and what do you see are the biggest opportunities or risks on that front? Thank you.
John Zillmer: Yes. I would say that that’s absolutely a target that we have established for ourselves. It’s also built into our compensation system. So you have the entire management team focused on those initiatives on net new growth. And so the organization is very disciplined and very focused on it. We believe, obviously, in setting those targets that they’re achievable. And there’s nothing that’s transpired in the last quarter that would cause me to change that target. I would say, as I said earlier, our opportunities are very robust, our pipeline is very large, and without getting into specific opportunities, I have no concern around the 4% to 5% net new number being a challenge.
Josh Chan: Perfect. Thank you for that color. And if I can ask one on the corporate expense that was lowered nicely, I’m sure that the spin had to do with that, but I guess is the new level of corporate expense what we should expect going forward?
Jim Tarangelo: Yes. That’s right. It’s sort of a rebase for the spin. We’re very focused on SG&A. That’s an area that I oversee and oversaw my prior role, and we work very closely with functional groups to try to be flat to the prior year. We did have some moderate benefit with some share based comp, a few true-ups there, and some forfeitures that provided a moderate benefit to the quarter. So — but generally I think that run rate should be fairly consistent.
Josh Chan: Okay. Great. Thank you both for the color and the time.
John Zillmer: Thank you.
Operator: Next question comes from Andrew Wittmann with Baird. Your line is open.
Andrew Wittmann: Yes. Great. Thanks for taking my question, guys. I guess with the benefit of few months here since the Uniform rental business has been separated out, John, I was just wondering if you look at the kind of the corporate structure that supports the business, there’s anything that you’re identifying that could result in that for making more efficient, maybe either now, today, or as you look at as their transition services agreement runs out, probably later this calendar year when they’re probably off your assistance, if there’s anything to think about there.
John Zillmer: Yes. There are minor adjustments. We’ve really rebased the organization already and we’re able to provide those services with a base level of employee that we’ll probably maintain going forward. So don’t anticipate any further restructuring or any significant change. I think we’re very happy with the level of resourcing in the organization today, and we expect that we’ll be able to absorb additional growth as the organization continues to add net new business and grow both domestically and internationally, that we can absorb that growth without having to add any SG&A. So that’s why we’re very confident in being able to manage that lever very aggressively and appropriately going forward. So no anticipated significant change going forward.
Andrew Wittmann: Okay. That’s helpful. And then I guess I wanted to ask on retention, and obviously retention, you said COVID is in the rearview mirror. But one of the good things that happened from COVID I guess from a retention point of view is that that kind of spiked. I was just wondering if you could address the trends in your retention that you’ve seen here in the last few months and maybe how that relates to those spikes during the COVID period and versus the historical averages.
John Zillmer: Yes. I would say we’re basically right on the historical average. We expect to be in that range again this year, really no change to the pattern. And yes, during the first year of COVID retention spiked pretty dramatically. But I think it’ll settle in this 96% range. And I don’t see any real — really any change to that as our expectation. Some years it’ll be 96.5%, some years it might approach 97%. But in general, I think that level of retention is certainly achievable and don’t see any threat to that.
Andrew Wittmann: Thank you very much.
John Zillmer: Thank you, Andrew.
Operator: Our next question comes from Harold Antor with Jefferies. Your line is open.
Harold Antor: Hello, this is Harold Antor on for Stephanie Moore. So two quick question. Just want to get an idea, COVID is in the rearview of what your focus, priorities and strategies are for the company looking forward over the next fiscal year and further.
