Thomas Spiro: Tom Spiro, Spiro Capital. On Product ID, as I recall, Astro Machine’s revenues — annual revenues run in the low to mid-20s, something like $5 million, $6 million a quarter. If I’m right about that and if it did something like that in Q1, it would look to me like what I’ll call core Product ID was down. Am I right?
Gregory Woods: We don’t break it out exactly. But yes, I would say the growth in Q1 was driven by the Astro Machine business, correct.
Thomas Spiro: No, it’s not simply the growth. It looks like product — core Product ID was down.
Gregory Woods: We don’t break out the different segments, Tom.
Thomas Spiro: Okay. The quality issue — I think the quality issue first emerged in fiscal ’22, as I recall from one of your annual reports. And if I understood you your comments earlier, it’s going to be resolved by the end of this fiscal year. That seems to take a very long time. Why?
Gregory Woods: We actually are on our third iteration of fix for that, to be honest with you. So what happened is we worked with the supplier, and their first 2 recommendations which we implemented did not prove effective in the long run. So we reverted to a third that we tested very stringently in the last 4, 5 months. And that does seem to be working very well. So now we’re rolling that out across the board. Unfortunately, some of the machines we upgraded, we have to upgrade again to this latest fix. But the good news is it does look very sustainable now.
Thomas Spiro: Which product lines are affected by the quality issue?
Gregory Woods: It’s most of the Trojan-label products. Some of — only 1 or 2 of — actually, it’s very little of the QuickLabel. It’s mostly in the Trojan-label line.
Thomas Spiro: And does — if someone has one of these….
Gregory Woods: I was going to say, it works for some applications fine, but in certain applications, it didn’t perform as well as it needs to be, and that’s why we’re redoing those machines.
Thomas Spiro: I see, I see. And if I’m one of the folks who has one of the affected machines, does the problem prevent me from using the machine at all? Or simply do I use it at a lower rate? What do I do?
Gregory Woods: You may be able — it depends on your application. So some applications — and there’s different types of labels and different applications of our labels in a wide variety of markets. So some see no issue at all, some see an intermittent issue, where we can address that kind of just treating the symptoms but not the root cause. And then others, just — it doesn’t work for their applications because they require very specific application requirements. So it’s a mix — several hundred printers, yes.
Thomas Spiro: As I recall, we did receive some modest compensation from the vendor a couple of years ago for this problem. Are we expecting further compensation for what we’ve suffered or no?
Gregory Woods: We can’t disclose that exactly because it has to do with the agreements that we made. But the — it’s a combination of some concessions, and then future concessions and a variety of elements. But it won’t — there’s not a clear payment like we had at the outset there.
Operator: Our next question comes from Samir Patel from Askeladden Capital.
