Elizabeth Anderson: Okay, got it. Thanks so much.
Operator: Our second question comes from Susan Anderson of Canaccord Genuity. Susan, your line is open. Please go ahead.
Susan Anderson: Hi, good morning. Thanks for taking my question. I was wondering if maybe you could just talk about the EBITDA margin. It looks like the guidance for this year is maybe in the 10% to 11% range. How are you thinking about that longer term? And do you think that you can still see that grow as we go throughout the years?
Paul Jacobson: Yes. So I’ll make one comment here, and then I’ll also see if Tom McKenna wants to make a comment. So as I mentioned and I tried to highlight in the prepared remarks, we are completing a brand-new plant and expanding our current one, which will come online later this year. In order to accommodate the necessary hiring, it means that we have to add to our blue-collar workforce during the course of this year and get them trained. There’s no way we can open a new plant until we have the workforce in there and ready to go, and they have to go through significant training on the machinery. Our best estimate, and I’m emphasizing that this is a guess, that it’s going to knock off three to four gross margin points this year, which is where we’re coming in on the adjusted EBITDA.
So we basically, as I made that the comment in the prepared remarks, that we’re making an investment in our long-term future. Our growth is telling us that we should do it. And we’re big believers in the importance of not only controlling manufacturing, but doing it here in the United States and trying to get a jump on what we think is going to be a big reshoring trend. Tom, do you want to add anything to that? Or do you think we’re good?
Tom McKenna: Yes. I think Susan €“ Susan, can you hear me?
Susan Anderson: Yes, I can hear you.
Tom McKenna: Okay. To Paul’s point and to answer your question about the longer term, while we’re effectively taking a hit on the investment side to position ourselves for greater capacity and demand in the future, the staffing that we’re scaling up this year will not be necessary in the future. In other words, we can capitalize on reasonably more stable staff with greater output. So we’re anticipating that our gross margins over time, by the middle of this decade, we’ll move into sort of mid-50s range and then potentially higher thereafter as we continue to progress through the decade and have greater volume going through our facilities, again, with more stable staffing with respect to the overhead allocation dropping.
Susan Anderson: Okay. Great. That’s helpful. And then just really quick on the marketing spend, I think it’s going to be second half weighted, I guess. Or should we expect a similar large campaign that you guys did last year? How should we think about that? Or any thoughts on €“ any color on what that will be?
Paul Jacobson: Yes, Susan. I’m going to let Michelle Crow answer that. She’s our Chief Marketing Officer. Go ahead.
Michelle Crow: So when we look at 2023, as we mentioned, we’re planning on around 14% to 15% of sales spent on marketing. And this year, our cadence will be more evenly distributed than last year. We will have one big brand campaign that we’re planning to launch around July, and that will feature a big high-profile partner we’re going to be announcing soon that we’re really excited about. So there will be a slightly higher spend around the Q3 range. However, it will be more even than it has been historically.
Susan Anderson: Okay. Great. And then if I could just add one more. I’m just curious just on the macro environment, there’s been some talk around just VMS slowing, consumer is getting impacted. I know you guys cater though to higher-end consumer. It doesn’t look like you guys are getting impacted. But just curious if you’ve seen any change in consumer behavior, how they buy your products either in the DTC channel or the professional channel?
