Andrew Rem : Okay. And then on inventories, obviously, you had a pickup in the fourth quarter due to Honeywell, but you also had another pickup this quarter, about $1.7 million. Can you just help us understand what’s going on? And is this related to are you excess inventory as you make these product transitions. Is that what’s driving it?
Rell Winand: Yes. You have a couple of things. So the Honeywell inventory coming in, right? So that’s going from the prepaid. You can see the movement there into inventory. And we have some last time buys. We have items in flow and we’re going to need the inventory and flow meaning production ahead of going to produce ahead a little bit. So all that’s going to increase. And obviously, as we add more Honeywell and you’re going to see that grow and grow and grow because the prepaid Honeywell inventory was $12 million. As you receive that, it comes out of their and comes into your normal inventory, if that makes sense.
Andrew Rem : Did we expect in the second half of the year kind of inventory kind of normalizes, you get the product transition, you get back behind you, you brought in all the Honeywell inventory, is that reasonable?
Rell Winand: Yes, but it will be a big number because we got.
Shahram Askarpour: It’s going to be a big number, but it’s going to.
Rell Winand: It should level up.
Shahram Askarpour: It should level up
Andrew Rem : Okay. And then on CapEx.
Rell Winand: Go ahead, you’re going to order that kind of thing, right.
Andrew Rem : All right. On CapEx, can you just comment on — it was pretty high this quarter. How should we think about that for the full year?
Rell Winand: I mean, look, we’ve — CapEx, we’ve increased the building, have done some work in the building, things like that. So that’s going to be a part of it.
Andrew Rem : Well, I’m just looking at $182,000 versus $300,000 for the full year fiscal ’23.
Rell Winand: Yes. Well, we probably bought some machinery. Now we’re working on. Usually.
Shahram Askarpour: Well, love benches.
Rell Winand: Yes. I bought a lot of stuff for the Honeywell. So fitting that out as well as making upgrading a part of the building the plant for that. So all that’s adding into a little higher than normal in a period of time.
Shahram Askarpour: Yes, that should all.
Rell Winand: Actual level or so.
Shahram Askarpour: Stabilized.
Rell Winand: Yes. Typically, we don’t have. We do 200,000, 300,000 generally a year. It’s always not a big number.
Shahram Askarpour: Investment in our IT structure as well — because as you know, this cybersecurity now is becoming a thing. And — so we’re doing some.
Rell Winand: Upgrading servers.
Shahram Askarpour: A lot of upgrades as well as increasing our cybersecurity practice. And I think long term, it saves us money because that reduces your insurance cost as well.
Andrew Rem : Can you guys comment then on — like if we just think about CapEx and what the incremental components, so you mentioned IT infrastructure would be incremental for this year and then some incremental CapEx related to everything that you’re doing around plenty well. Can you kind of — so if we — if you’ve got a base CapEx spend a couple of hundred thousand and then how much incremental from these IT and Honeywell related?
Rell Winand: Not a lot. $100,000. $150,000 maybe. We’re pretty much done that, if you will. I guess, say, some more another is $250,000, maybe on average, I guess.
Shahram Askarpour: Going forward, you’re also going to look at air conditioning system, which is 20 years old.
Rell Winand: It’s old.
Shahram Askarpour: Different. Potential going to be addressing.
Andrew Rem : All right. Well, I guess that’s it for me, but I did want to say that you guys have done a pretty amazing job generated good cash flow here. We’ve taken 1.5 out of your debt, I had speculated that maybe you guys could exit this fiscal year below 1 time. So I think it looks like you maintain the current trajectory, you guys are going to flow right through that. So kudos to you guys and the team for doing a great job improving the balance sheet so quickly. So anyway, thanks a lot. Appreciated.
Rell Winand: Thank you, Andrew.
Operator: The next question comes from Doug Ruth with Lenox Financial Services. Please go ahead.
Doug Ruth : Hi. I want to start off by congratulating you on a really strong quarter. You’ve done a wonderful job. I had a question. Is the management team and the Board of Directors, do you folks now have the ability to buy stock?
Rell Winand: Well, when the window is open. The window opens actually on — for us, it’s the third business day after earnings on Monday. So there’s — and it closes a couple of weeks before the end of the quarter. So it’s — so as a Monday, there is an open window, yes.
