Billy Cyr: Yes. So the chicken pricing, we lock the bulk of our chicken for an annual – on an annual basis, that was done in December and it was assumed in the pricing that we put in the market for February. It was slightly below where it had been a year ago, but not the magnitude that people may have seen as they watch chicken overall, the broader chicken market ramp up last year and then drop back down the kind of chicken that we buy didn’t go up as much and didn’t go down as much. So there’s really not a lot of leverage on the chicken pricing for the balance of this year. Your comment about the Ennis chicken processing facility, when that facility begins and it begins operating at scale, there is an opportunity for a benefit in lower cost chicken.
First, because it’s sourced in a different part of the country and chicken pricing can be regional. And the second is because of obviously the efficiency of being an on-site facility. So we’re very encouraged and optimistic, and that’s part of the rationale for having built the chicken processing facility, but we’re not ready yet to commit to a forecast what that magnitude of that improvement will be.
Michael Lavery: Okay. That’s helpful. And I just wanted to follow up on the comment you made about potential technology improvements that sounds like a – how you think about one of the upcoming lines? And I guess any more color you could add to that? And then at least specifically, would that be sort of a different set of equipment? Or is it something that could be applied retroactively back to some of the other lines as well? Or how could that play out?
Billy Cyr: Yes. So I would say we’re constantly working to improve the technology to make Freshpet. You should expect we’re looking for ways to deliver higher quality, higher yield, more capital efficient, taking up less space, and we have some pretty good leads that are taking us down that path. And if they do pan out, we would certainly try to retrofit anything back into the original facilities as much as possible. But at this point, we’re just leaving the option open. Our comments were really focused on leaving the options open because we do have some…
Michael Lavery: Thanks so much.
Operator: Thank you. Our next question comes from the line of Jason English with Goldman Sachs. Please proceed with your question.
Jason English: Hey, guys. Thanks for slotting me in. Two quick questions – well, one quick question and one as a quick question. First, a quick one, and I apologize if you provided this, can you give us the details of how you plan to fund the CapEx this year?
Todd Cunfer: Yes. So we ended the year with about $130 million of cash. We will generate some cash flow this year. So that’s a good thing probably in the range of $30 million or $35 million of cash flow generated from operations. We are going to redo the credit facility in some shape or form. So we will leverage some of that as well. So those are the basic building blocks. I’m very confident we’ll be able to get that done.
Jason English: Okay. Okay. And sticking on the theme of cash flow. You gave us a lot of incremental color at CAGNY last week. And I want to zoom in a bit on 2027, which seems like it’s a bit more reflective of a bit more of a steady state business. The CapEx numbers you’re projecting out there is still pretty lofty, close to 9% of sales, and you mentioned a 4-turn leverage target, which is mean a 6% loan borrowing rate equates to almost 5% of sales in terms of interest expense. This leaves you with free cash flow of around 4.5% of sales based on that disclosure. And that’s assuming a zero tax rate. If we actually normalize the tax rate, you end up with a very, very low single digit free cash flow out in 2027. I know it’s going to take time to bleed out those NOLs, but I still think it’s a reasonable way to look at it.
