Joseph Schmitz: No. This is Joe. It’s product specific from our perspective from what we delivered to them.
Daniel Baker: So what is public is that they list the subsidiary, it’s in the contract. So it’s a matter of public record. So the subsidiary that buys these parts of Pacesetter, which is the CRM division, the cardiac rhythm management division of Abbott. So from that one can certainly infer that, that’s where these devices are used. But from our standpoint, it’s a contract or an agreement to supply a certain type of sensor. And so that’s — and the rest of the specifics we had to redact from the agreement for confidentiality concerns.
Unidentified Analyst: Okay, thank you very much. And good luck going forward. It was nice quarter. Thanks.
Daniel Baker: Thanks, Don. Always a pleasure, talk to you.
Operator: Our next question comes from the line of Alex Woodward with Bridge City Capital. Your line is open.
AlexWoodward: I wanted to ask about linearity in the quarter. Looking at the DSO and the days inventory, it looks like that — what was linearity like especially at the end of the quarter?
Joseph Schmitz: So for clarification, could you define for me what you mean by linearity?
Alex Woodward: Linearity in terms of revenue being recognized.
Joseph Schmitz: I’m not sure I understand the question. If you’re asking, is there a direct correlation to the drop-off in revenue to the reduction in receivables to some sort of a drop off of revenue, I’m not sure you can make that case because a lot of our receivable activity was on, as I mentioned, was on large outstanding project-related work that we’re getting collection on. So I would not say that as due to some sort of a decrease in revenue as much as just a lot of good hard work on our end. I don’t know if that’s answering your question, but I’m trying to interpret your…
Alex Woodward: Well, I don’t doubt that there was a lot of hard work on your end, but your DSOs are 25 days. And if your terms are 30 days, then you’re less than a cycle if everyone is paid. So it would appear that maybe you didn’t have as many sales in the last month of the quarter?
Joseph Schmitz: Well, I think we had said in our prepared comments, we did have some softness in our medical device sales. Some of that was in December. Not all of our customers are on 30 days. Some of our customers actually have shorter terms.
Alex Woodward: It’s a very good number, 25, it’s a record as far as I can tell. But inventory days are also a record, excluding the first COVID quarter. And a lot of that is in work in process raw materials, which I view is a good thing. But would you anticipate that the raw materials would start to work its way lower from here?
Joseph Schmitz: Yes. I mean I think that — I mean, that’s obviously what we intend to do. I think that would be a reasonable assumption. I mean that product is going to be — that raw material and work in process is going to be used to fill existing orders. So I would also say that you’ll see a — you saw a little bit of an increase in our finished goods inventory as well, and that was a buildup for some of our future demand that we have in the first quarter of this year. So it wasn’t all finished raw materials and work in process.
