Mike Rice: Yes. I think I’ll answer the last part first. We made some significant improvements in sourcing tanks for freezers, but also a new bag supplier on the media side in cell processing which will hopefully reduce the scrap that we’ve been experiencing for the last several quarters in a row now. The bag supplier we currently have is a world class company, but the bag itself is not particularly certified as particulate free. And so we’re having to throw a fair amount of bags away because they do have particulates in them, despite the supplier’s best efforts. And obviously our own internal inspection is completely rigid and robust about that. But the new supplier that’s coming online we think will have a meaningful impact in reducing scrap and then improving gross margin within the already high margin self-processing line itself.
And then as far as in the quarter, there’s certainly €“ in Q4, there’s certainly was some scrap that Troy had mentioned whether it’s talking about bags or we had some scrap in evil line, we had some scrap in the freezer line as well.
Unidentified Analyst: Got it. That’s helpful color. And then for 2023, you guided cell processing revenues to grow 30% to 35% year-over-year, which compares to the 52% growth you saw in 2022. Is there a decent amount of conservatism baked in here and are there any potential sources of upside that you can highlight for the year?
Mike Rice: Yes, appreciate you noticing that. That’s an anticipated question on our side. And yes indeed, we are conservative by nature. Our goal is to meet or slightly beat and not have bad surprises and there could be some upside that we would speak to, but I’ll just say generally and not speak about specific customers in that regard. We’re obviously keeping a really close eye on, the five anticipated approvals this year and the five for next year and really paying attention to those customers and working with their procurement teams to make sure that we’ve got good forecasts and plenty of inventory to take care of them.
Unidentified Analyst: Got it. That’s helpful. Never could just squeeze in one more. You’ve previously €“ so you indicated a goal to reach 70% recurring high margin revenues of total revenues in 2025. What are the steps that you’re taking to increase that higher margin recurring revenue stream and what catalyst should we be looking for to monitor your progress?
Mike Rice: Yes, good question. So, we’re already at about 60 now, so it’s 10 percentage points of improvement to get there, to have 70% recurring high margin or disposable consumable, we’ll call it what you want. And that will be driven from obviously this de novo growth and self-processing from the current customers and then the additional customers that are at late stage and between now and then some of them getting approved and kicking into becoming meaningful revenue contributors. But also some of the new products and services as it relates to accessories and other non-instrument product and service lines that we’ve got in development right now. And we just love to tell everybody in the call a lot of those details, but obviously for competitive reasons, we’ll hold that fire until it’s time.
Unidentified Analyst: Got it. Thanks again for taking my questions.
Mike Rice: You’re welcome.
Operator: We’ll take our next question from Thomas Flaten with Lake Street.
Thomas Flaten: Hey guys. I appreciate you taking the questions. As we look, kind of as you’re exiting 2024, Mike, I’m curious about the geographic distribution of revenues. Do you anticipate there being any significant shift from the way the revenues are distributed today?
Mike Rice: Yes, really good question, Thomas. So yes I would say that we would look for a much more meaningful contribution from Asia Pacific compared to where it is now, relatively speaking. Yes.
Thomas Flaten: And can you talk a little bit about, what parts of the business or maybe it’s all will contribute to that shift over to Asia?
