We’ve demonstrated success with this model in several geographies around the world, notably LatAm and parts of Western Europe. And really we’ve used it as a tool to get deeper with very targeted customers and very specific verticals where we have the capability to provide the service, the customer expects and if we can do it profitably and so you have to have a significant amount of embedded infrastructure to support equipment as a service model. So, we’ve been successful – demonstrated success in a few pockets and we’re using that learning as well as leaning into some additional analysis to understand what it would take to scale that more broadly outside – within those geographies and outside of other geographies. But we want to make sure that we can deliver a fantastic customer experience that is compelling to the customer to move this direction for all the reasons it’s appealing to us.
We want to make sure it’s compelling for the customer as well. And last but not least, we want to make sure we can do it profitably and so we’re spending time to understand what works and what doesn’t, what infrastructure we need to support the model, and then we’ll and then we’ll look at scaling it in a very targeted fashion where it makes sense around the world. It’s an opportunity to differentiate ourselves versus smaller, regional, local competitors that don’t have the infrastructure to support this, and as well as so it’s a differentiated offering versus competition. And it’s potentially a really compelling business model proposition, value proposition to some target customers, and target verticals that could over time make us much more sticky.
And so we all know the appeal of a recurring revenue model, and we would look to look to take advantage of that, again where we’re capable and where it makes sense financially for both us and our customers.
Tim Moore: Okay, that was great and once again, terrific color. So my final question for Dave and Fay. I believe you might have started that inorganic study and review for larger targets and adjacencies to leverage our core assets, I don’t want to do steal your thunder, in case you detail this maybe in a possible Investor Day early next year whenever it may be, but is there any update on that review for acquisitions or is it still only maybe halfway completed at this point?
Dave Huml: Yes. So thanks for the question. We are actively engaged in that work now, we’re little bit past halfway, but it’s starting to come into view. I don’t think it’s stealing thunder at all. We’re really proud of the fact that we’re heading in this direction and actually this investment in defining our M&A strategy is one of the incremental investments that we’re making in the business to set ourselves up for future value creation, that’s a reason why you see the first half, second half disparity kind of in terms of the performance and results. Earlier, the reason we’re looking at this is, we think it’s a really compelling value-creation opportunity for us as an enterprise. We think that we’ve got some unique and compelling assets and capabilities that we can leverage that will make us a more rightful owner of some other companies out there.
We believe that our strategy will be a hybrid of some close-in, near sort of core investments to support and accelerate growth and defend our core space in the mechanized cleaning market globally as well as some near and maybe even some further out adjacencies that we will find interesting and attractive from a strategic and a financial perspective. So that we can lean into it and create some serious value for incremental value above just our core business for our investors. I don’t want to fully unveil our strategy yet. And it’s not that I’m holding. I just want to make sure that we’re fully lined out. I will tell you we are assessing our potential opportunities in terms of their strategic value, their operational fit, and their financial return and so across those three facets, we’re taking a – we’ve opened the aperture very wide and we’re leveraging a Tier 1 consulting partner to help us make sure that we are really taking a solid look at the potential opportunities in the marketplace on a global basis.
We do anticipate providing more definition around our M&A strategy in upcoming quarters and we do have an eye towards an Investor Day, first half of 2024, where we’re not only unveil the full strategy, but have more time to go into greater depth and take Q&A at that time.
Tim Moore: Well Dave, thanks for that sneak peek. That’s it for my questions. And have a well-deserved nice weekend.
Dave Huml: Hi, Thanks, Tim.
Operator: Since there are no further questions at this time, I’d like to turn the call back over to management for any closing remarks.
Dave Huml: Thank you. I’d like to congratulate the entire global Tennant team on a fantastic quarter and a great start to the year. I want to thank everyone on the call for your interest in Tennant Company. This concludes our call today. Have a great day.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
