Greg Rustowicz: Yes. So, Pat’ overall as we think about our long-term target of the 21% EBITDA margin, we’re looking at roughly 40% gross margins, SG&A as a percent of sales of roughly 21%. And then there’s, .5 half add back for depreciation. So, getting to 21% is a combination of being really efficient with our spend, but also scaling, as David mentioned.
Patrick Baumann: Got it. Okay. So in a year in which maybe the growth isn’t as high as you would want in the long-term plan. You would look to be more efficient, I guess, on your spend, sounds like.
David Wilson: Yes, and look at structural cost, instructional costs, and we will benefit from a lot of the IT investments that we’ve made in digital investments over the past year, including, a couple of SAP implementations this past year. Künzelsau was Mexico.
Patrick Baumann: Okay, it makes sense. Thanks for the time. Appreciate it.
Greg Rustowicz: Absolutely. Thanks.
Operator: Thank you. The next question is coming from Jon Tanwanteng of CJS Securities. Please proceed with your follow-up question.
Jon Tanwanteng: Hi, guys. Just a follow-up on the large customer that currently paused in e-commerce? Do you expect them to come back and then determine any point and would be at a similar level of scale or something different? I assume their push for automation is going to decrease at all. So just wondering what your thoughts are?
David Wilson: It’s a great question, Jon and we are very actively engaged in dialogue with them as a customer and working with them and many other customers in the space and excited about the opportunities that exist there. Obviously, it’s a pretty material impact to absorbed in a, nine month period. But we really proud of the team really excited about the investments we’ve made in the space. And think that the longer term opportunities there are really great. And so when you look at what will happen over time, and the CapEx that will be spent in automating delivery and execution, as people think about e-commerce or e-delivery. We think we’re going to really see some nice developments there, both with this customer and others.
And so the discussions that we’re having involve project opportunities that are every bit as large as what we’ve experienced in the past, and could be even more significant. But obviously, that depends on timing and how things develop and the pace at which they do but when you look more broadly, at the market in general. And you think about the distribution and execution of order fulfillment, and the automation needs in that environment. And our focus on being very relevant there. I think there’s a nice opportunity.
Jon Tanwanteng: Got it. Thank you. And then just coming back to the improvement in cash flow. I know you’re planning to pay down $10 million in debt, what what’s the plan for the excess at this point? I know you’ve been repurchasing some shares. Are you planning to keep that powder dry? Or is that is a potential use of the capital?
David Wilson: Yes, so we will be pushing the entire quarter on the cash front to reduce inventory and collect more receivables, et cetera. And a lot of times, the last couple of weeks of the quarter is when you see a pretty significant spike. As we’re putting the full court press on and so we’ll probably end up with the cash on the balance sheet.
Jon Tanwanteng: Okay, got it. Thank you.
David Wilson: Great. Thanks, Jon.
