Brian Butler: Okay. Great. Thank you so much for taking the questions.
Douglas Cahill: Sure.
Operator: Thank you. One moment for our next question. That will come from the line of [Sharad Patel with Jefferies]. Your line is open.
Stephen Volkmann: Hi, good morning guys. Actually it’s Steve Volkmann here. Hope you’re all doing well?
Douglas Cahill: Hi, how you doing?
Stephen Volkmann: Doing fine. Thank you. Most of my questions have been answered. So maybe Doug, I should ask you about your golf game.
Douglas Cahill: I’ll tell you what, I always hate it when I peek in the fall and I’m peeking right now. My driver is ridiculous. So that’s an update, but I wish it was spring right now.
Stephen Volkmann: All right. On that note, I actually do have a couple quick ones. Can we talk, Rocky, just a little bit about the cadence of margins in 2024? And I’m thinking specifically about sort of the various price cost dynamics. Is there some kind of pass-through of the lower transportation costs at some point or do margins kind of grow a little bit or flat to a little bit each quarter? How do we think about that sort of flow through?
Robert Kraft: Yes. Again, Steve, not going to give full guidance, but I think we would be naive to think we’re not going to give some price back to some retailers next year. And so, I think you are going to see us do that. We are going to feel the benefit flowing through from the lower cost of goods sold. So as we exit the fourth quarter, we’ve said we’ll be above that 45% percent kind of historical rate, and we would expect to maintain that for most of next year.
Stephen Volkmann: Okay, great. And then, is it too early to sort of think about what the mature, MinuteKey 3.5 economics are? I mean, how much do you think one of those generates in terms of revenue and margin when it’s kind of at its run rate?
Douglas Cahill: So it is right now because, you know, the big question is we’re going to need and want – and the retailers definitely have agreed once we get the right number of machines, they need to start talking to the consumer about what’s available. Now, Steve, there’ll be a big auto key on top of that machine that used to just be an office key. And so we’ll be doing all we can. And we’ve got over 2 million emails of current MinuteKey customers that obviously will be targeting, not in a nuisance way, but in a great way of saving them money. So I would – I’ll be honest. I don’t know yet. All I know is that the software and the brains that the team have put together are working, and the backend, meaning the programming of that, are working on our two machines.
So we’re 2 for 2. But it’s a little early, at least for me, because we just don’t know how many consumers are going to be comfortable with that. So for example, on a transponder key where there’s a key that you have to plug into the car to have it start, meaning you can’t keep it in your pocket, we’re going to be able to copy that at the machine and we’ll send that to your house. That is pretty slick, but we don’t know yet if the consumer is going to get all that, and it’s our job to make sure, one, they do know they can, and two, we make sure that it’s 5 stars when they’re done. So I think it’s a bit early, but we’re excited. And the retailer is super excited, because they don’t have to lift a finger. We’re doing the work, and we should be bringing them a market that, from the Smart Fob side, they have zero share today.
So it could be good for both. They’re definitely supportive of it.
Stephen Volkmann: Okay. I appreciate it. Thanks.
Douglas Cahill: Yes, thank you.
Operator: Thank you. One moment for our next question. And that will come from the line of Ryan Merkel with William Blair. Your line is open.
Douglas Cahill: Hi, Ryan. Ryan, you there? We’re still not able to hear you.
Operator: Okay. I’m showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. Doug Cahill for any closing remarks.
Douglas Cahill: Thanks Cherie. And Ryan, we’ll catch up with you, no worries. Thanks everyone for joining us this morning. I’d like to thank our customers, our vendors, suppliers, and importantly, our hardworking team for the contribution to the quarter. And we look forward to updating you again in the near future. Thanks for joining us this morning.
Operator: This concludes today’s program. Thank you all for participating. You may now disconnect.
