John Krier: Yes, absolutely. Good to hear your voice again this morning, Jeff. So, if you look at the cash utilization, we actually did increase cash by 34,000 in the quarter, but on operating activities, we used 1.7. So, the way to really understand that is the primary driver of that was reducing accounts payable and other accrued expenses to the tune of just under one million. And the remainder was funding prepaid expenses with almost exclusive amount of that being the fund prepaid inventory, you know, advances to our suppliers as we prepare demand in the future. So, we’re still continuing to getting this business to profitability. A good result here in the first quarter, is just one quarter, and that’s going to also be important for us to manage cash at similar performance.
Jeffrey Cohen: Okay, got it. Could you talk about margins a little bit for the balance of 2024? How are you thinking about? Then this Q1 represent a floor for you? And what could you get to by the balance of the year?
Brian Baker: Jeff, I’ll come back to earlier comments. We’re trying to stay away from providing guidance on that right now, because there’s just still some unknowns as it relates to revenue volume and how that can affect margin. And we’re looking still at where our costs are settling in. We believe we have some opportunities to reduce costs, but until we have some additional data, we don’t want to get into any great detail. But yes, I think that, you know, I don’t know, John, have anything else you’d want to provide in terms of that?
John Krier: Yes, I think Jeff, you make a good point. You know, where’s some of our recent data points and how do we think about the quarter in terms of our margin performance. So, our margin at just under 25% for the quarter was actually similar to where we finished last fiscal year. Now, Q1 is typically one of our highest quarters along with Q4. And what we saw in the quarter, our decline from prior year was two-thirds driven by just less revenue and one-third driven by less utilization or efficiency in our plans. So, if we looked at history and we’re drawing inferences from history, knowing that Q2 and Q3 tend to be less revenue. This would be likely somewhere in the higher range. And this would be the data point to then say, okay, if revenue is down a little bit in the next couple quarters, maybe margin might be down a little bit.
But we simply don’t know yet, which is why we’re not giving guidance. We need to see some more data. But if I were looking at history, that’s what I would draw up on.
Jeffrey Cohen: Okay, got it. And one more, if I may. I commend you on the discipline on the SG&A line for Q1. Could you talk about that a little bit and then talk about that, how that’s being leveraged into your channels and your customers out there in the marketplace?
Brian Baker: Yes, thanks, Jeff, for recognizing the work that we’ve done with SG&A. I think that the way we’ve got that cost structure in OpEx, we can leverage that as we start to see revenue growth come through. We don’t think that there’s a lot of additional expenses that we need to put in SG&A as we start to see the growth happen in the business. So I think that’s the leverage that we’re going to get. John, I don’t know if you want to add anything to that?
John Krier: Yes, the one thing I would say, adding to Brian’s point, if you look at the overall SG&A being sub-28% as a percentage of net sales and Q1 was lower than our guidance. So it is expected to likely come up a little bit in the couple quarters, just with some seasonality and on lower revenue, typically in Q2 and Q3. But I think the way Brian described it is accurate, which is we try to be very flexible with our labor pool and only adjust labor as revenue will be supported because of our very clear goal for operating discipline and profitability at this revenue level.
