Bob Humphreys: Sure. So you know we’re in our €“ I think, our fifth quarter now, the beginnings of that with Fanatics on board on our digital-first strategy. I think we’ve made good sequential progress each quarter and producing more product and getting it out the door. We have more equipment running on that now than we ever have in our history and our output as we speak is the best that it’s been in our history and we see that continuing to grow. And then you know Black Friday will come in about a week and by then we will have additional shifts running to maximize what we can do in that business. But I think our third €“ our fourth quarter output was up over 30% from the prior year, and you know we expect strong unit and selling price growth in that business this quarter.
Our average unit price out the door, so that’s what we’re getting paid to deliver the garment and the print work is the highest it’s ever been. So we’re seeing some appreciation in that driven by number of prints on garments and garment pricing as well.
Unidentified Analyst: And we are the exclusive provider to Fanatics by contract for these digitally produced garments, correct?
Bob Humphreys: Well, I wouldn’t say that broadly. They certainly have other vendors that were you know a part of things that we can’t or don’t want to make. You know I think long term their demand and geographic footprint may be beyond what we can or want to do, but right now on this type of equipment, we’re the only provider.
Unidentified Analyst: Okay, and we have €“ are we adding €“ do we need to add a substantial amount of capacity still to meet their demand or are we mostly there at this point?
Bob Humphreys: No, we have additional equipment on order that we’ll be installing you know early next calendar year. So you know you get to be in this time of the year, going back 60 days it’s hard to install new equipment and get it started up and get it staffed to make a meaningful effort during the holiday period. We’ve tried that a number of times over the years and have learned to cut off earlier when we will take on installing additional equipment.
Unidentified Analyst: And Simone €“ go ahead, I’m sorry.
Bob Humphreys: Let me just say, I mean we’re €“ this equipment, we got the first prototype, and we got the prototype from the manufacturer out of their facility brought into our facility just about five quarters ago. And so we’ve gone from one prototype five quarters ago to 13 machines running in four different locations running. Through holiday, we’ll run two shifts in three of those locations, one shift in the other, and we’re running them seven days a week. And so you know, Fanatics can sell a lot of product and we’re cheering them on, but we’re also working very hard to make product in a fast start-up environment that’s you know very dynamic.
Unidentified Analyst: Yes, it’s very exciting. Simone, did you €“ I might have missed this when you’re talking about the financials, but what is roughly the gross margin for that kind of business?
Simone Walsh: For that business? So historically we have had higher levels of gross margin. Over the last 12 months as we have installed that print equipment, as we have said, that has depressed our margins. We expect going forward to take margins back to those historic levels.
Unidentified Analyst: But you’re talking about overall. I was just trying to understand for the Fanatics business.
Simone Walsh: So I was speaking €“ I haven’t spoken specifically about the Fanatics business. I’m sorry, I was referencing DTG2Go as a whole as part of our Delta Group
Unidentified Analyst: Okay. And what were the overall DTG margins?