Mark Smith: Excellent. Thank you.
Christopher Killoy: Thanks, Mark.
Operator: Thank you. Our next question comes from the line of Rommel Dionisio of Aegis Capital.
Rommel Dionisio: Thanks. Good morning. Chris, I wonder if you could just give us some perspective on the thoughts behind the restructuring. We’re looking at your backlog numbers and inventories to spin the industry, it doesn’t seem like a time companies normally with an active restructuring. Is this move towards more flexible manufacturing, continuous improvement, supply chain efficiency or are you seeing something different in your long-term industry outlook that would kind of motivate you to enact a more permanent restructuring here? How should we think about that?
Christopher Killoy: Well, Rommel, good morning. The real thing is most of these folks are indirect labor folks, in fact all of them are indirect labor, either salaried personnel or hourly folks working indirect labor jobs. And so when we eliminated those positions as difficult as it was is partially as a result of some of the efficiencies we’ve gained with our main manufacturing efforts as well as our One Best Way initiative where we’re trying to consolidate activity amongst our plants. Again, having three large manufacturing plants, there’s a lot of opportunity for consolidation of activity. And this is one that painful as it was for us and for the folks involved, we thought it was the right long-term restructuring action to take to make sure that we’re focusing on our future and getting our margins in order, getting our costs in order and knowing that we’re going to be in a competitive market for the foreseeable future, we had to get right in terms of our cost structure and that’s what this intended to do.
The good news is we’re able to move, as we said, about half of those folks into direct labor positions. So for example, a person who might have been working an indirect labor job, perhaps serving several product lines, is now working on the line itself building firearms and that was our intent.
Rommel Dionisio: Okay. All right. Thanks for that color. Maybe just a follow up then. The industry has not seen a demand surge for a few years now and we’re getting into much near deal [ph]. Given the effect of the restructuring, do you still have that ability to quickly and rapidly flex up, if necessary, if the industry would — obviously your own brand name see that kind of corresponding demand surge as the industry does tend to see every few years? Thanks.
Christopher Killoy: Yes, absolutely. We’re in the process of flexing up right now. Like I said, Q2 production has already moved ahead of what Q1 was and that’s our goal, and I suspect Q3 will be going in that direction as well. Despite things like NICS being down quarter-over-quarter or year-over-year, we’ve got some great opportunities ahead of us. And even though I don’t typically speak in terms of forward-looking guidance, we’ve got some great new products coming that you’ll see later this year. And that’s part of the reason for flexing our muscles now and increasing demand or increasing production so we can be ready for those new products and perhaps shift people from some of the existing lines to some of those new products that are just getting started now.
Rommel Dionisio: Okay, great. Thanks for the color. Looking forward to seeing the new products. Thanks, Chris.
Christopher Killoy: Thanks, Rommel.
Operator: Thank you. I would now like to turn the conference back to Chris Killoy for closing remarks. Sir?
Christopher Killoy: In closing, I would like to thank all of you for attending our call this morning and thank our shareholders for their continued investment in our company. And I would like to thank our loyal customers and our 1,800 hard-working members of the Ruger team who design, build and sell rugged, reliable firearms. I hope you will be able to join us at our virtual 2024 Annual Meeting on Thursday, May 30. Proxy notifications were sent out to shareholders in mid-April, so please be on the lookout and be sure to vote your shares in advance of the meeting. I appreciate your support. As we approach Memorial Day on May 27, please remember those service members who made the ultimate sacrifice to secure our freedoms. Thank you all.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
