Sameer Joshi: Understood. Thanks for that. And on the display side, there is the capacity expansion that is being planned already underway. Is there any significant CapEx involved in that, or is it just a few couple of million dollars?
Jim Clark: Yes. It is a couple of million dollars, and it’s kind of within our plan, plus or minus $1 million or so. Nothing – again, I think the first – one of the first questions we got was around our capital plan and it remains consistent with our prior year’s adjusted for inflationary costs and things like that. But yes, it’s already included and it’s not significant. We have been – in our prior years, we have been staging up for this. So, there has been incremental investments we have made that we are now just consolidating into one facility, new facility.
Sameer Joshi: Understood. And then just you mentioned a few things in terms of delay, lead time delays. How does that impact your OpEx and working capital requirements? Another way to ask the question is, do you see any impact on operating profits because of these delays?
Jim Clark: No. They don’t rise to the level where they disrupt a quarter significantly, but there could be mid-single digit adjustments on a quarter-by-quarter basis. But I think if you took any two quarters together, they would normalize.
Sameer Joshi: Okay. And so we should expect operating leverage year-over-year. In other words, operating expense as a percent of revenue will be – should be expected to be lower in the…?
Jim Clark: Yes. Well, that is one of the levers we pull, right, is that – and so yes, I mean I think there is still a lot of those efficiencies and there is still a lot of the timing things that we can do to create that opportunity. And that’s just our ongoing job to execute against them. And I think this year, if you look at 2024 on a whole, you can see that kind of incremental steps up. Sometimes we are taking two steps forward and a half step back and sometimes we are taking a half step forward. But if you look at it on an aggregated basis, you can see that continued improvement.
Jim Galeese: Sameer, I will just add that there are some variable costs in operating expense, so they do flex. So, if there is a bit of softness somewhere, things like agency commissions go down [ph], because you don’t pay it. So, there is – we will be able to manage our OpEx in line with our operating margin expectations.
Sameer Joshi: Understood. And then the distribution of – or rather contribution from the lighting versus display. I think this quarter, you had around 57.7% of revenues from lighting. Is that trend – is that proportion expected in the next few quarters? And if so, does it imply a better gross margin going forward?
Jim Clark: No, I think that – and I am not making any blanket statements here, but in general, lighting has more of a sensitivity to the seasonality we talked about than display solutions does. I think that you will always see it kind of hovering in this 50-50, 40-60 range. It’s not going to go outside of those markers. If you think about it in terms of a football field, we are going to play between the 40s all the time, lighting and display solutions.
Sameer Joshi: And gross margin implications?
Jim Clark: In what regards you mean…?
Sameer Joshi: Because I think your Lighting segment gross margins are 33% plus and display are lower…
Jim Clark: Yes, much different business profile. If you – I think that in order to get an apples-to-apples comparison, you look at the top line revenue and you look at the bottom line – yes, the operating margin. The stuff that happens in the middle is really a reflection of the differences between the two businesses, one being more capital intensive than the other…
