Now there are some places where it does not make sense to compete in disposables where we don’t think we have competitive advantage and we don’t want to race to the bottom on pricing there. But as we think about what is strategic and how best to where we have advantages, there are disposable products that we’re very excited about and we’re going to continue to leverage. And a couple of things specifically that come to mind, and we talked about this a bit last quarter is the clean room applications. Clean rooms, it’s not just your basic run the mill, low level disposable item, we see opportunities in semiconductor EV, continued in health care and the Lakeland brand and the product there is very good. The other, we alluded to this a bit in our prepared remarks is our larger distributor direct-to-customer container program.
And we saw a tick in that. This quarter, again, our large customer sales force is doing a great job. And what that enables us to do is kind of strategically use certain disposable products to fill out a container that we ship directly to the customer. It’s better margin and cost profile for us because we’re not handling it and it results in more sales because they can go to one place, one stop and kind of get the full range of needs that fill out the container the goods shipped to them. So while we see the most growth — the most accelerated growth and growth percentages in fire and especially from an M&A perspective in fire service and also in industrial, the disposables as it relates to things like critical environment, clean room and direct-to-customer container programs is considered highly strategic for us.
Gerry Sweeney : Got it. Understood.
Jim Jenkins: And I didn’t mean —
Gerry Sweeney : Disposable go all the way, but I — that’s a great overview.
Roger Shannon: And I’d just add, it’s kind of hard — gotten the question, it’s hard to say what you think the percentage is going to be It gets down to what the — when you see China recovery on one hand and on the other hand, what the acquisitions look like because the acquisitions are going to be typically in the fire or the higher value industrial. So that revenue channel would just expect it to grow faster.
Gerry Sweeney : Understood. Yes. And I’m sorry, I didn’t mean to imply that it was going to absolutely go away, but what — I understand what you’re saying. There’s certainly —
Roger Shannon: No, no, we didn’t take it that way. It’s just you opportunity to kind of make it clear how we think about disposables.
Jim Jenkins: And in a lot of ways, it’s math, right? A lot of ways, it’s math, Gerry, right? I mean as we continue to grow the higher value and we continue — and we move — continue — we don’t abandon in any way, safe perform the disposable market, but it’s just as a percentage of our portfolio, we just sort of naturally get a little bit smaller, which I don’t think
Gerry Sweeney : What — and this — little housekeeping more for modeling, but where do you want to get inventory levels down? I think all things being equal, right. You’re going to grow — you’re continuing to grow, et cetera. But just curious as to what level
Roger Shannon: Gerry, I’ll take that one as well. And again, it’s — what way we’ll need to kind of keep in mind is the caveat is that we are starting to do the purchase accounting on Pacific. We will bringing that in. So that will affect the inventory balance. Like — kind of like Eagle, like our fire products, these are made to order. So there’s not going to be significant, if any, finished goods that come along with Pacific. But of course, they have the raw materials and the work in process. That said, we have been very pleased at how we were able to reduce the — call it, the — what I’ve roughly circled up is the $58 million of inventory down to the $54 million level. As I think about that baseline, we would like to get another $2 million to $4 million out of that. It’s like
Gerry Sweeney : So you’re pretty close, yes.
Roger Shannon: Yes. So now we still have — it’s a call we still have weekly. We have targets and programs underway, and it’s still very much a high priority. And you can see the cash flow that’s resulted in during the quarter.
Gerry Sweeney : Got it. I appreciate.
A –Jim Jenkins: And I’ll just add on that just briefly, and that’s really a testament to Roger and his team, our COO, Helena and her team, they really have worked together on – and our sales team on forecasting and driving down that inventory number. And it’s become a significant priority for us. And under Roger’s leadership, we’re starting to see some real encouraging results.
Operator: We have reached the end of the question-and-answer session. And I will now turn the call over to Jim for closing remarks.
Jim Jenkins : Thank you, operator. Thank you all for joining us on today’s call. We appreciate your continued interest in Lakeland. The global growth opportunities for our business are robust, and we look forward to building on the strong momentum Lakeland has built and sharing our successes with you in fiscal 2024. Have a great day.
Operator: This concludes today’s conference, and you may disconnect your lines at this time. Thank you for your participation.
