And then from there, as we talk about targeted levels, right, we’re really focused on our main categories, and it’s making sure, again, that we have one or two that are available for demonstration, loaner or display units. And that’s just what you need in order to drive the high volume of sales, right? And so that’s really what we’re talking about. We’re missing out on sales opportunities because we don’t have those high horsepower items on our lots. And if we did, our sales would be even higher than they are today. So taking a step back, I think it’s important to keep all of that in perspective. So we continue to improve our business model, and we want to be as efficient as possible, and we certainly want to focus on presale activities and all of that is good business practices that we’ll continue to do going forward.
Alex Rygiel: That’s very helpful. And then back in January, you had some delivery delays. I know it’s kind of hard to quantify those, but do you think you’re all caught up in those delivery delays?
Bryan Knutson: No, not yet, Alex. In fact, Bo spoke to his prepared comments, our backlog is actually up a little bit sequentially. So no, we anticipate likely at least another couple of quarters before we can get caught up on that. Just our shops are really busy, which is a good thing and we’re selling a lot of iron, which is a good thing. And it will just take a little time up. But Bo, anything to add on your end?
Bo Larsen: No. Yes. I think that that’s right. We talked about our mix and available-for-sale inventory and wanting to normalize that backlog, and we continue to see opportunity to focus on that at the back half of the year.
Alex Rygiel: Thank you very much.
David Meyer: And one more comment I had to, with some of the supply side issues and some of the conditions, some of the equipment when it’s coming out of the factories, too, it’s taken us substantially longer per unit to get them through our shops right now. And we’re seeing that it started to improve a little bit, and we do think that’s going to be probably back to normal towards the end of the year, too. So that will help a lot.
Alex Rygiel: Thank you.
Operator: Thank you. Our next question comes from the line of Ted Jackson with Northland Securities. Please proceed with your question.
Ted Jackson: Thank you and good morning. So I’m going to throw my two questions back as it relates to the O’Connor acquisition. And the first one is just maybe a little more color on the Case IH Australia dealer network. Can you give us some sense in terms of how many locations there are across Australia like kind of maybe the average locations per dealer kind of like who’s the next largest dealer, now that you have the largest kind of who’s number two, just some metrics to kind of give us a sense with regards to how it compares to the domestic dealer network for Case International Harvester.
David Meyer: So in our discussions with the management team there, they had a pretty well-defined future growth strategy through acquisitions like identified locations. They’ve been in conversations with different owners. But I’d say it’s much different in the United States. You’ve got — you don’t have a lot of really big dealer groups, at least on the case side, maybe more so on some of the competition. So a lot of family business, smaller businesses. And what I say, I think it’s a much more robust consolidation story than what we’ve even experienced here in the United States. And a lot of smaller groups, family owned. And I think that’s just right for consolidation as you continue to adjacent from where they are now. And I think there’s really good relationships between our team and some of the existing owners and some good camaraderie.
And so — we just want to do that on a timely and managed approach. But no, I think we — that’s one of the positives about the story is future M&A opportunities.
Bryan Knutson: Yes. And Ted, I would just add on to David. I think you asked what’s the next largest. And so O’Connor’s footprint in the grain belt there would be there’s a CNH dealership with six rooftops. And then you asked what the average is. And so the average is more around two to three locations per.
Ted Jackson: Okay. And do you have any kind of sense in terms of just, I don’t know, like the number of locations that are in Australia, just bit of curiosity, just the kind of the whole size of that market, at least from like a location standpoint?
Bryan Knutson: Yes. We know the number definitely in the grain belt and in O’Connor’s footprint where we’re where our interest level is. There’s just — as David mentioned, I’ll just go back to there will likely be a fair amount of consolidation in that area over time here. And we’re seeing that with the Deere side as well. RDO equipment that is headquartered out of Fargo here as well. That’s a very large John Deere dealer, has 25 locations in Australia has for a long time. You know what, I remember way back when they entered the Australian market, and they continue to add locations and continue to build their presence every year in Australia. And then service equipment, large John Deere dealer just North of us here in Canada has 15 locations, so they’re now on basically either side of us. So there is a fair amount of North American presence there now between us and RDO in service.
Ted Jackson: My second question just is in terms of O’Connor’s revenue mix. When you look at it from sort of equipment parts, services, rental, et cetera, I mean would you — is it a mix that’s similar to your domestic business here in ag? Or is it more like the international business? I mean, not that they’re that much different, but you have a bit more of a skew towards equipment relative to some of the higher-margin stuff internationally than you do domestically. And so I’m just kind of curious if you could give some color on kind of the mix of O’Connor’s business and then I’ll get in queue again. Thanks.
Bo Larsen: Yes. It’s pretty similar to our domestic ag business. The supplemental deck that we posted on our website breaks that down pretty nicely. So looking at a three-year historical average there, equipment sales mix was 82% versus on the U.S. side, ours is more like 77%, 78%. So a couple of percentage points different, but very similar. And that’s just one of the many similarities that their business profile and metrics have to our domestic ag business.
Ted Jackson: Okay. Congrats on the quarter and the acquisition.
Operator: Our next question comes from the line of Daniel Imbro with Stephens Inc. Please proceed with your question.
Reid Seay: Hey, guys. This is Reid on for Daniel. Just a couple of questions on margins here. As you noted, we’re seeing a lot lower inventory, which should translate to a better gross margin and that should benefit your SG&A to gross margin ratio. Is this a sustainable ratio going forward, assuming inventory stays low? Or how should we be thinking about that?
