Greg Palm: Okay, great. All right. Appreciate all the color. Best of luck going forward. Thanks.
Lee Rudow: Thanks, Greg.
Operator: Thank you. Our next question comes from the line of Scott Buck with H.C. Wainwright. Please proceed with your question.
Scott Buck: Hi, good morning guys. Thanks for the time. Piggybacking a little bit on Greg’s last question on the rental business. I was curious, are you seeing cannibalization there from sales with the increased rentals? Or are they entirely separate from one another?
Lee Rudow: Generally, Scott, they’re separate. We’re not seeing cannibalization. I mean, I’m not seeing it doesn’t — it’s never occurred, but it’s — I’m not seeing any numbers that would lead me to point in that direction. I think it’s — when we look at our value proposition, distribution has its place. And I think there’s a discrete place for rentals. Rentals if anything is strategically a bridge between services and distribution. It’s kind of a service in and of itself. But we have not seen cannibalization. So that’s a good thing for the business. It’s been incremental from our — in that respect.
Scott Buck: Thanks. That’s helpful Lee. And could you tell us what kind of CapEx expectations are for calendar 2023 in the rental business? And if there’s any meaningful change from a year ago?
Lee Rudow: Yes, not a meaningful change. The rental pool is kind of a dynamic population of equipment, but something in the $2 million to $3 million range is what we would expect to be at this year and would see in the near future as well going forward.
Scott Buck: Okay. That’s helpful. And Tom, generally, how should we be thinking about OpEx growth from here? Is there any significant hire you guys need to do on the corporate side or anything like that that would drive a meaningful increase there?
Tom Barbato: No, I think the goal longer term is, obviously, to start seeing some leverage from a — from an OpEx standpoint. And I think that’s a reasonable expectation or a reasonable way to think about it going forward. It’s not going to happen overnight, but as we think of our longer-term plan that’s certainly what we’re shooting for.
Scott Buck: Great. And then just last one from me. When you look at some of the efficiency gains on the service side, how far are you through those programs? And when should we expect kind of the — all the fruit of that labor to be into the gross margin?
Lee Rudow: Yes, Scott, this is Lee. We still see ourselves more towards the beginning, I would characterize than the end in that margin enhancement journey. I mean, we started out in the low 24s on the service side, we’ve got it to the low 30s now. But between automation, some robotics, we’re putting a lot of sort of enhanced processes in place that are showing good early signs in terms of improving efficiency and productivity. So I would say, I’m not going to put an exact timetable on it in this call, but like we’ve talked about in the past, we see this company the next stage for us in the mid-30s. And I think that’s achievable in a reasonable amount of time and our initiatives that we have in place should get us there. Beyond that, we’ll continue to work on process, we’ll continue to see what percentage of the business can be automated.
