Sabrina Baxamusa: Hi, this is Sabrina on for Philip. Thanks for taking our question. Could you provide some color on the performance of Sniper 2.0 during the first quarter? And then any early signs on second quarter performance to date with new products, and then also just more broadly?
Matt Stevenson: Yes, Sniper 2 is, of course, a really important product for our business and has resonated extremely well in the marketplace. And we just introduced this new Bluetooth connectivity kit for your phone. So previously, when you purchased a Sniper 2, it came with a digital display. So now with this new Bluetooth module that hooks up to the phone, more price sensitive customers can get a great Sniper 2 product at a lower entry point. So we’re very optimistic in Sniper 2 performance. It’s doing well, and it’s the leader in its space relative to this premium entry level EFI conversion. So, all things are looking strong for that product.
Sabrina Baxamusa: Great. Thank you. And then a quick follow-up. Your team has made considerable progress working down past due. So how are you thinking about your plans for past due order fulfillment for the remainder of the year and that incremental margin impact versus last year?
Jesse Weaver: Yes, this is Jesse. So, I would say, Sabrina, that most of the past due fulfillment improvements happened in the back half. And so, we would expect potentially some improvement here in Q2. But largely we see that happen in the back half. And I think we’re probably getting close to what would be a standard run rate of past dues, which I would say is in the $5 million range of the business at its current size. The plan is to work as hard as possible to get down to that by the end of the year, but that’s kind of where we expect it to level off.
Sabrina Baxamusa: Okay, great. Thank you so much.
Jesse Weaver: Thank you.
Operator: Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I’ll turn the floor back to Mr. Stevenson for any final comments.
Matt Stevenson: All right. Thank you, Melissa. The Slide 21 underscores the compelling investment narrative surrounding Holley. This market, propelled by automotive enthusiasts, extends beyond a mere pastime. It is a passion and it is a way of life for our customers. Its resilience to economic cycles is notable given that is more than just a fleeting trend. We command a vast addressable market approaching $40 billion, which has demonstrated consistent growth over many years. Holley is at the forefront of the industry with a collection of storage brands that have a legacy of innovation. Additionally, our history is marked by successful acquisitions and value creation through strategic integrations. Plus, we are presented with the unique opportunity to forge a new digital frontier that will transform how our consumers and distribution partners engage with our brands, providing us with a competitive edge and fostering growth.
This leads to a compelling investment case with a business committed to delivering stable organic growth of at least 6%, maintaining 40% gross margins, achieving over 20% EBITDA margins, generating sustainable free cash flow, and establishing a platform that facilitates the unlocking of value and strategic acquisitions. The combination of the allure of the automotive enthusiast marketplace and Holley’s distinguished brand portfolio presents an exceptional investment opportunity. In closing, I wish to express my sincere appreciation to our team members for their dedication to serving our customers daily, to our remarkable consumers who support our brands, as well as to our distribution partners, many of whom have been integral to our success for decades.
Also, thank you for your attention today and look forward to providing updates on our progress in subsequent quarters. I want to thank you, and wish you a great day.
Operator: Thank you. This concludes today’s conference call. You may disconnect your lines at this time. Thank you for your participation.
