I think I’m going to make a shirt like that and you know wear it to breweries on the weekend or something. But, yeah, I guess, that’s how we’re thinking about the rest of the quarter and what gives us confidence in that and the things we’re working through in our 2024 budgeting.
Operator: We’ll take our next question from Jeff Grampp at Alliance Global Partners.
Jeff Grampp: Good morning, guys, and appreciate the delay in the call an hour.
Kyle Udseth: Hey, Jeff.
Jeff Grampp: I know we come first when you guys think about planning things. Question on the margin performance, now that continues to be very strong. Is there any more room for growth there, given the tail ends on the equipment pricing and then hardware and things of that nature or do you feel we’re kind of topping out here around these levels?
Kyle Udseth: Let me go first but and then I’ll turn it over to Eric and maybe even Scott has a perspective on it too. I — higher is better right in the short-term, but I almost worry that our gross margins are starting to get too high, right? It’s always that delicate balance of how are you priced relative to competitors and what’s the price elasticity and if you go a little bit lower on pricing and seed a little bit of gross margin do you more than make that up in volume which is something we’re going to look at. Our teams have done a tremendous job in both Hawaii and New York and supported by some great corporate work on negotiating and realizing discounts in procurement. Certainly a trend across the industry, but I’m proud of what we’ve been able to accomplish on the cost basis on that and so you see that come through.
We’re — it’s again to go back to just the 2024 budgeting, we’re trying to form up a perspective on what we actually want the gross margin percentage to be in 2024 and where the OpEx needs to be and how that allows us to get 10% or higher EBITDA margin at each of the operating businesses and that’s also a benchmark we look for new companies to acquire. So I think there is continued room to drive cost out of the business and keep lowering the cost basis and then the margin is kind of a question of what we want to do on pricing and what — where the elasticity is that. I don’t know, Eric, whether do you think to add on to that?
Eric Ingvaldson: Yeah. I think that in today’s kind of inflationary environment consumers are used to cost increasing, so we’ve been able to maintain or just slightly reduce our selling prices, while taking advantage of lowering equipment costs and dealer fees to enhance our margins. So that we are closely watching our market share numbers to make sure to see what our competitors are doing. We want to make sure that we’re still competitive in each market that we’re in. But so far we’ve been able to maintain pricing and take advantage of lower equipment and financing costs to-date.
Kyle Udseth: Okay.
Jeff Grampp: Okay.
Kyle Udseth: Yeah. No. Okay. Go ahead, Jeff.
Jeff Grampp: Helpful. Thank you. And for my follow-up I’ll ask the obligatory M&A question and just get an update for what you guys are seeing in that market. It’s potentially opportunity rich, but obviously a lot of macro uncertainty, so just wondering how you guys are thinking about potentially executing something in this market?
Kyle Udseth: We absolutely want to and remain focused on it and the absence of announcing a closed deal this quarter and last quarter should not be interpreted to mean an absence of activity there. We’ve been incredibly active on it. It’s a big part of what we focus on. And I think, I’ll say, our pipeline is the biggest. I don’t know if this is the right term the healthiest it’s ever been right, because you start with a lot of companies entering the funnel and then you get to know them more, you diligence them and then you have a front row seat to how they perform over time through good times and through some of the challenges more recently and then it really shakes out and you get a greater confidence level and who the right company is the right fit for you the best operators.
