James Clark: Yeah. Well, I mean, we believe that those almost 600 stores will need to be rebranded completely, entirely, because they’ll be coming from their legacy brand to an entirely new brand. So those would be new store opportunities. And we do believe that the other stores, depending on how the merger plays out and what the plans are from the principles, that all of those stores will still offer opportunities in terms of co-branding, re-branding, reformats, that type of thing with the two brands melded together. So you’ve got a completely new store opportunity, which would be 600 — around 600 stores minimum. You’ve got the combined re-branding between the combination of the other two principles, and then you’ve got just kind of general updates to the stores that have been a little lagging as they’ve been working their way through this.
And then lastly, the last component I would add to this is the other competitors are sitting on the sidelines determining — trying to figure out who they’re going to be competing against. Are they going to be competing against a store that’s going to be that’s going to maintain its existing brand. Is it going to be rebranded as a part of one of the two stores or is it going to be sold off. And we think that that piece of business is going to be a boom too and a significant benefit to us. So we are looking at three bites — potentially three bites of the apple, depending on how things shake out.
Operator: And our next question comes from the line of Leanne Hayden with Canaccord Genuity.
Leanne Hayden: Morning, everyone. Thanks so much for taking my question and congrats on the progress this quarter. Just to start, are you continuing to see supply and permitting constraints in the marketplace, whether this is from transformers or permits? Or has there been an improvement? Or is this kind of part of a new reality we should come to terms with?
James Clark: Hi, Leanne. Thanks for joining and thanks for the question. Yeah, I mean, I — we’ve been talking about it now for an extended period of time, years about disruptions in supply chain in certain industries. Definitely being at the top of that list, switch gear and electrical supplies still remain unsteady, but I would definitely categorize it as the new reality in the new state of business. I can’t say that anything that’s impacted our businesses directly because of that, but it does help to explain some of that longer conversion cycle we talked about as customers go to launch a new project and they go and check on the realities of equipment and product delivery and that type of thing. I do think it helps to explain why we have that lengthening quote to conversion ratio.
It’s just to accommodate all of these extended lead times and some of these products. But I would also underline that I just think it’s our new reality, at least for the time being. And I think that over the next few quarters or maybe over the next few years, that will just continue to come down as we work our way to pre-2020 reality or normality in terms of delivery and that type of thing.
Leanne Hayden: Got it. Okay, that makes sense. And then just a second one for me. You have a lot of your own manufacturing facilities and you’ve acquired several manufacturing facilities. Can you please talk about any sort of wage inflation that could impact your financials going forward?
James Clark: I don’t — there isn’t anything of note to speak of in terms of wage inflation. We have always been an employee first type company. We try to make sure that our starting wages and the wages we offer to our manufacturing employees in particular are competitive and are compelling enough for those folks to stay with us. I think that we have been on that path even prior to the inflationary period in wages that happened post COVID. So for us, I don’t think there’s any significant threat or any significant changes that we think we’re going to have to accommodate. We’ve always tried to work it towards — like I said, kind of employee friendly. And you know, the labor is not an exceedingly large part of our product cost. It’s a component of it, but it’s not the overwhelming component.
Operator: Thank you. And we have reached the end of the question-and-answer session. I’ll now turn the call back over to President and CEO, Jim Clark, for closing remarks.
James Clark: Hi. I just wanted to say thank you again for taking the time to dial in and continue to learn a little bit more about LSI. We’re very excited about the addition of EMI onto the team, we’re just beginning that process. We do have our normal integration team working to bring EMI into the fold. I don’t think that you can expect to see anything happen overnight in terms of the synergies, we think that we have there, but we do believe we have a good path forward and a lot to capture. We believe both companies will benefit significantly. And more importantly, our customers will benefit. We are have circled around the idea of a one-stop shop in specializing in certain verticals, and EMI allows us to continue to expand that value to our customers and we look forward to the benefit we’re able to offer to our shareholders and our customers alike.
So with that, I’ll just say thank you for calling in, and I’ll look forward to speaking to you on our next call. Take care.
Operator: And this concludes today’s conference and you may disconnect your lines at this time. Thank you for your participation.
