Sergio Heiber: Super, Joe. I know that this has been your plan going back a few years. Congratulations on achieving what you set out to achieve. So the — I have one last question about the royalty. And that’s never been — I don’t think anything that you brought up. Can you give us more color on why you chose to go the royalty route?
Dr. Joe Forkey: Yes, sure. So first, I’ll say I didn’t — I haven’t said much about it before because we’ve been negotiating with the customer, and we weren’t sure until it was done, where exactly where we’re going to end up. What I will say is this, this particular customer was an ideal customer for us to engage with for our first single-use program. They really have been a partner in figuring out together how we would manage not only the technical aspects of the single-use program, but also the economic aspects of it. And so I have talked a lot about the fact that as we’ve been going through this program, we’ve been learning not only the technology, but also the business side of it. And so we basically started with this company some 4 or 5 years ago and sat down at the conference room table and said, “Look, there are some challenges we’re going to have to overcome, but we’re willing to work together and to get creative and figure out how we can put together a plan that works for both sides.” And so the real — there are a number of benefits to our customer to have this technology licensing arrangement in place.
So first of all, they can have us continue to manufacture it for forever if they want, right? They also, however, have the option of taking it to their own facility or to a third-party facility. And that becomes very important with the single-use program because the labor cost profile of a company in Gardner, Massachusetts is not the most aggressive, right? And there’s always an interest on our customers’ part to having multiple suppliers, especially these days where everyone is concerned about supply chain with some of the challenges that came over the last couple of years. So at the end of the day, the bottom line is going this route where there’s an opportunity for our customer to move to a third-party manufacturer, which might be themselves, and pay us a royalty is beneficial to us because we receive a royalty without using all of our limited resources, all of our limited production resources.
That royalty is lower than it would be for a gross margin. But because we’re not using up all of our resources, it’s still beneficial because it drops directly to the bottom line. From our customer standpoint, it basically removes one layer of the supply chain if they bring it in-house or they can go to a very low-cost labor contract manufacturer. And so from their standpoint, the royalty ends up being a much smaller addition to their cost of goods than they would see otherwise. So really, it benefits both of us in a way that allows us both to benefit from the really significant growth that we’re all seeing in the single-use market.
Sergio Heiber: Fantastic Joe. And can we expect more acquisitions?
Dr. Joe Forkey: So as I’ve said before, we are looking at acquisitions, and we will pursue acquisitions on an opportunistic basis. And as I said before, the optics industry is fairly well fragmented, and I think there are probably other targets out there.
Sergio Heiber: So Joe, do you — 3 years ago, did you see the company as it is now? Are you exceeding your expectations? Meeting your expectations? Or behind?
Dr. Joe Forkey: That’s a tough question because I ran through lots and lots of models. On the whole, we are performing as well or better than I had hoped for.
Operator: The next question is from Rick Teller, a private investor.