Matt Bottomley: Yes, thank you. Good evening, everyone. Just wanted to touch on the adjusted gross margin again, and it’ll go on, you had some prepared remarks about this. But when you kind of look at the overall trend, over the last, three, four, even five quarters, it seems like the ratio of these types of adjustments are still fairly meaningful in relation to the size of your overall revenue. So I understand the general buckets and categories, and you have in your press release here in terms of what those general categories are, but I’m wonder if you could speak to the changes of maybe what’s going in and out of there. I know, historically, it was more inventory impairment. Now, there’s more development costs, given that you’re a variety of different growing medical markets internationally.
I would expect these types of costs and these types of opportunities and challenges to continue sort of indefinitely. So I’m just wondering how you’re anticipating this adjusted line moving just given that your actual, audited or reviewed statements have pretty nominal margins from unadjusted standpoint.
Glen Ibbott: Yes, thanks. So a couple things going in the market. They’re certainly the mix across the category. Market-by-market, the margins are holding up quite nicely. So we still see a stronger medical margin as we’ve seen over the past several years, a number of quarters in the Canadian Medical. Consumer, the margin this quarter was generally mixed related as Miguel just described and opportunistic and certainly incremental. Don’t mind the extra gross profit. And then the other key thing you were referring to, there are a couple of things in there that are hitting margins. What we adjust out of our margins are fair value adjustments, of course, because that’s the non-IFRS thing, but it’s confusing. And depreciation, we’re trying to get to a cash margin that will allow you to understand the underlying ability of the business to generate cash.
This quarter, there was an adjustment for a one-time effective level . I don’t know if you’re following natural gas prices, but they spiked tenfold in December, due to some weather in California, and then came right back down in January. So it was just the first time never seen that before, one-time transitory thing, we thought that wasn’t very reflective of the true gross margin. So we will look at kind of paint a picture for you of the underlying ability of the company to generate cash flow. I think that we will see less adjustments through EBITDA as we go forward, now that we’ve finished the business transformation or completed our objective there. There has been through that transformation with facility shutdowns and changes in transferring manufacturing line as SG&A reductions , so a fair amount of noise in our financials.
But I think we’re while SG&A reduction to a fair amount of noise in our financial, but I think we’re past that now in Q3, you should see the level of those sorts of adjustments coming down.
Operator: Thank you at this time. We have reached the end of the question-and-answer session. I’d like to turn the floor back over to Miguel for any closing comments.
Miguel Martin: Well, first and foremost, let me thank everybody for your interest and time. We’re thrilled to where we are. I would say this is absolutely not the finish line. If you take anything away from this call is that our strategic plan is working and we’re thrilled what we did here, but we’re also thrilled where we’re going forward. Appreciate everybody what you’re interesting. Look forward to talking to you in the future. All the best. Bye.
Operator: This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation and have a great day.
