Operator: [Operator Instructions] Our next question comes from Jason Wittes from ROTH MKM.
Jason Wittes: You mentioned pricing. Some of your larger peers are talking about getting better pricing sessions in an inflationary environment. Are you seeing that as well? And also in terms of gross margin, you did see some improvements. How much of that is related to inflation or subsiding of inflation?
Matt Trerotola: Yes. I’d say, Jason, we’re seeing on both sides of the business, some, I’d say, favorable pricing momentum. One, on the P&R side, where we’re the market leader, and we can put price increases in selective product lines. We’ve continued to do that over the last couple of years, and we’ve seen some benefits there. On the Recon side, given we’re a smaller player, we generally kind of follow what the market is doing. What we’re seeing is some stabilization there in terms of pricing. So we’re not seeing as much of the erosion that maybe we’ve seen in the past, but not a whole lot of increase either. But overall, we would expect that to continue, and like in an inflationary environment, and then probably revert back to more normalized views kind of in more normal times.
In terms of gross margins, it really kind of lines up with our kind of our expansion goals that we’ve really laid out, which is, one, kind of getting the mix improvements of kind of the Recon business becoming a bigger part of our company. It’s getting the read-through on the price versus cost, the productivity programs that we can continue to drive the leverage that we’re getting from the volume growth. And then the scale of the acquisitions as well. That’s a key component of driving our increases in gross margins as well. So all of those are contributing to the 140 basis points of expansion that we saw in the quarter.
Jason Wittes: And on Lima, if you could maybe just review kind of sort of the key products that we should be focused on? I mean, obviously, the shoulders are important, but — and distribution is very important. But just curious on kind of how you rank sort of the kind of contributors from Lima, and how we should be thinking about it?
Matt Trerotola: Yes, sure. Yes. First of all, a very strong shoulder position with their SMR shoulder, and that’s going to — that’s going to be something that is valuable and extendable. The second would be, they really had a very strong revision position. And that’s — good product in hip and knee, but very strong provision position. And revisions very attractive part of the market. And we’ve been earlier days in terms of our revision position in hip and knee. And so that’s attractive and complementary. And then third, they have just great technologies around 3D printing. They’ve been a pioneer, really, in designing and manufacturing with metal 3D printing, and have done everything from having custom implants that are 3D-printed printed for very complicated cases, which is a great tip of the spear to be able to bring to surgeons to get them interested in the product line.
And at the same time, they’ve also used those technologies to design some great products, like their revision cones for knees that take advantage of that, trabecular titanium, proprietary metal 3D printing. So the — that’s the kind of hierarchy of some of the great products they’ve got in technologies that I would share.
Operator: At this time, we are done with our question-and-answer session, and we will then finish the conference as well. We thank you very much for attending today’s presentation. You may now disconnect.
