Megan Alexander: Okay, thank you very much.
Brian Mariotti: Thanks Megan.
Operator: The next question on the line comes from Gerrick Johnson of BMO. Please go ahead. Your line is open.
Gerrick Johnson: Hi, good afternoon. Thank you very much. Steve, can you talk about the inventory that you are liquidating, what type of product that is? I think it’s important given that a lot of your customers are collectors. And where is that product being liquidating? And how is that being done?
Steve Nave: Sure. So obviously, we went after the oldest inventory first. Again, inventory that we felt like we could sell over time, but due to the operational constraints, it’s just better to get out of it. So we’ve looked at all the inventory that’s been the oldest as our first bucket. And then we’re looking at anything where we feel like sure, we’re selling quite a bit of it, but we might have more weeks of supply than we need, right, to manage the business efficiently. I mean there are about 8 different lenses that we’re using to look at all of our inventory to determine which units are going to get destroyed. Speaking to how and where that’s happening, we’re using a third party and they’re not far from our distribution center in Buckeye, Arizona, so we’re not going to incur too much transportation expense to do that, but we’re using a facility that can certify the destruction for us so that we can provide certificates of destruction to our licensors.
Gerrick Johnson: Okay. So it’s being destroyed, clear. And the product, I guess, would be a whole range of products from pop on to other product that you sell, I don’t know.
Brian Mariotti: Yes, absolutely. Yes.
Gerrick Johnson: Okay. Okay. And Steve, can you talk about the inventory at Hobby and specialty a little bit more? Do you — and more importantly, I’m wondering, now that you’ve stepped into this role and you had a look under the hood, do you have confidence in Funko’s systems and the ability to track that inventory?
Steve Nave: Well, that’s a 2-part question for sure. My confidence level, yes, we don’t have the best systems right now, which is why we talk about things like an ERP and a warehouse management system. So I have confidence that we’re going to get to a place where our systems infrastructure supports the business the way it’s to. In the meantime, a lot of this stuff is done semi-manually. And we’ve especially on initiatives like this inventory effort, we’ve put in so many redundant controls in the generation of the products that we have flagged to get rid of as well as kind of the execution of getting the files passed back and forth between our planning group and the distribution center that I’m confident that we’ll do this without messing it up.
Very confident. One thing that I wanted to go back and just emphasize for you though, Garrett, is yes, we are destroying this product, but we’re doing it through a very green third-party firm that’s going to recycle everything, to the extent it can be recycled. So I just wanted to make sure that everybody knew that we’re trying to do this the most responsible way we possibly can.
Gerrick Johnson: Okay. Thank you very much.
Steve Nave: Yes, thank you Gerrick.
Operator: The next question on the line comes from Stephen Laszczyk of Goldman Sachs. Please go ahead.
Stephen Laszczyk: Hi, thanks for taking the question. Maybe just one more on the new distribution system. I was wondering if you could talk a little bit more about what the biggest differences will be between the new system compared to the one proposed last year? And do you anticipate that the new system once implemented will have a opportunity for efficiency over the long term as the plan you laid out at Investor Day last year?
