Obviously, CVI, we continue to believe strongly in CVI. And our operating companies have been the subject of a turnaround, right? If you look at Pep Boys, if you look at Viskase, on other metrics for some of the other companies, they’re all generating cash flow, increasing amounts of cash flow. So our strategy on the owned companies has been continue to accelerate and improve the pace of performance across each one of them. And it’s evident in many different metrics, some more than others. Some it’s more cash, some of its more income. So sorry, that was a little long winded, but I felt that question deserved a longer more robust answer.
Dan Fannon: Understood. And then just to clarify on the shorts or is it more of the market or broader hedges have come down and the shorts are more reflective of offsetting longs to be more hedged within the context of the investment portfolio directly?
David Willetts: Both are true, right? The broad market hedges have come down materially. We still have a level of them because we think it makes sense because not everything is hedgeable on a name-by-name basis. But we have very specific name-by-name hedges, resector hedges to attempt to offset any risk that we see with the specific loans in that sector or that specific long itself.
Dan Fannon: Understood. Okay. Thank you.
Operator: And it comes from the line of Bruce Monrad with Northeast Investors Trust. Please proceed.
Bruce Monrad: Hi guys, can you hear me okay?
David Willetts: We can. Good morning, Bruce.
Bruce Monrad: Good morning and a question on food packaging, if that’s okay. So obviously, outstanding numbers out of this case. So we use that is — are the production probably — it seems like Tim has nailed it on the production? Or is there also help on the revenue side, pricing? Or what’s behind it all?
David Willetts: The answer is yes. What I’d say is Tim and the team, I think, have done a very, very good job on multiple levers. Not every initiative is where we would want it to be. But I think when you take a look at how that team has skilfully managed to offset headwinds or surprises, you can basically see that performance is up, right? And the bumper sticker is, they have been very good at thoughtfully looking at their gross margin percentages and increasingly and that’s not just price. That’s also working with the customers to make sure they’re selling the right SKUs or the right items jettisoning low value to the customer, negative or low value to Viskase products. So gross margin management has been obviously a very, very strong performance factor.
The plants, we have a new team on the plants. This isn’t as of today, but it’s over the course of this year, and they’re getting their arms around our production issues. I think we have a very coherent, clear plan to continue to get yields and rates efficiencies where they need to be. They’re not entirely where I think Tim wants them to be, but they’re making steady and measured progress on a series of fairly complex process and technical issues. When you take a look at volume, generally speaking, there are puts and takes depending on which region you look at or which substrate you look at. But the team has done very well at balancing. I think the entire book of business and running it like a professional operation. I’m also pleased with the cash flow.
They continue to generate cash flow, work through inventory and work to pay down the liabilities. So I think broadly speaking, the team has done a fantastic job.
Bruce Monrad: Well, that’s good. That’s great. And these are obviously your top two compare — toughest comparisons of the year. So this is great now. On the November call, you talked about a cocktail when things were good. I’ll tell you that I’ll be having a cocktail tonight and if you want to hop on a plane and come on up and join me with. Thank you.
