And trust me, there’s an art to that. So we’ve foresaw that and really have the right talent in place to be able to make sure that we can all go ahead and say flawlessly and put pressure on them, implement these new accounts that we’re bringing on.
Greg Kitt: Thank you. That was helpful. On the large food distributor customer, I think if I heard you correctly, I think it sounded late, I think I heard you say that you can talk more about that in a couple of weeks. Did I hear that right?
Ray Hatch: Yes. We’re not quite in a position to be able to do that, but we anticipate being able to be more forthcoming on it in a few weeks.
Greg Kitt: Okay. Great. Thank you. And so is there the potential that that you might be able to tell everybody who that customer is or it sounds like there’s more information to come.
Ray Hatch: Yeah, that’s what we’re talking about. We’re hopeful that we’ll be able to share more information with that customer. We’re really proud of them. So we’ll see what we can share with you in a few weeks, Greg.
Greg Kitt: Thanks, Ray.
Ray Hatch: You bet.
Greg Kitt: And then I always think that that 8-figure commentary is really funny, because $10 million to $99 million of revenue is like a big range. And so is there any way to think about how that can – obviously, you’re going to start ramping, I think, you said in the second quarter. Is there any way to think about how that customer could progress over several years, especially as you talked about fleet and you talked about Proganics at one point becoming an opportunity?
Ray Hatch: Well, we hope to have all of that. It’s a large customer, and it’s somewhere it’s probably closer to $10 million than $99 million, Greg, just to give you a little direction on that. But as with a lot of these larger customers, they’ve got huge amounts of potential spend. And that’s just where we’re starting. I mean, we’re going to earn our way to the rest of it. But I can’t really give you a share of wallet number. I know that’s what I’d be looking for if I were you. But it’s probably as much or more than what we’re getting on the front side.
Greg Kitt: Thank you. On the [debt five] [ph] piece, so you’re winning all these customers, you want to make sure that you’re in a position to service them well. And I’m sure that you want, it’s like this balance between flexibility and cost. And you could probably get, when you put the Monroe facility in place, I think this current facility was like coming out of COVID. I think it was the fall of 2020, something like that. And you were doing $4.5 million of EBITDA. And so, now you’re doing $16 million, probably quite a bit more this year, because you had some RWS specific stuff. You had one customer thing last year that was a charge in the third quarter. And so all that should go away this year like it’s not unreasonable to say you could do $20 million of EBITDA this year.
So the business in terms of EBITDA is up almost 5x probably. Is there something that you can do that gives you flexibility, but still brings the rate down from like $11.5 million on that Monroe piece, while you’re winning all this business so that you’re making sure you have the flexibility to execute well?
Brett Johnston: Greg, I think you nailed it for us. You pretty much answered the question for us. That’s exactly why we formed the board, and management have formed this committee is to make sure that we’re able to do exactly that. We don’t want to handicap the growth that we’ve got. We’re feel really confident. We’re going to continue to grow. We want to be able to support that. At the same time, we’d like cheaper interest rates. It’s a higher rate environment right now. And we think we’re going to be in a better position in the future as we better demonstrate the value, right, with enhanced margins and better flow through rates. So we’re really excited about where we’re going to end up.
Greg Kitt: Thank you. Do you think that that process is there some way to think about when that could conclude, is that something that you expect to finish in 2024 by the end of the year? Or do you think that could be sooner?
Brett Johnston: I think that’s probably a fair starting point from a deliverable, we’ll probably have some room for it to push a little bit more if we need it to. So it’s hard to set a timeline right now. We need to start – we need to find – pick an advisor and start meeting and work through the options that we’ve got.
Greg Kitt: Okay. Thank you. And then on SG&A, a little bit of a step up in Q1 and some of that sounds like tech, but probably also maybe some of these integrations, I’m not sure. Is there a way to – in the past, when we first invested, we would see 50% of incremental gross profit dollars fall to EBITDA. And so, if you were investing in SG&A – and obviously business changed a lot, because you’re investing to scale it much better, which we’re excited about. But in the first quarter, if we’re seeing SG&A increase by $500,000 or $600,000 sequentially should we think that there may not be a $500,000 or $600,000 sequential increase in gross profit to offset that increase in SG&A. I’m trying to think through this increase in SG&A and the implications to profitability in the first part of the year.
Brett Johnston: Yeah, it’s hard to talk through quarter to quarter future, but what we – I mean, you asked the question, can we expect 50% plus operating leverage going forward. We certainly believe we’re in a position to do that now and improve as we roll these new automation platforms into our processes. So, again, we’re really excited about that operating leverage continuing throughout the year.
Greg Kitt: Okay. Thank you. I’ll hop off after this last question to give other people a chance. So if you had $3.5 million of adjusted EBITDA for the December quarter and that included that $1.2 million charge so you would have been more like, I think, the release had $4.6 million of adjusted EBITDA.
Brett Johnston: Yeah.
