Bob Ferris: Yes, G&A improvement, right. But I would say maybe 10% higher is kind of where I would — it would be a fair target over the next 18 months, because we might improve some quality, we might have a little increasing costs to improve some quality. And the technology changes too. I think we’d also be able to take advantage and make the margins higher by technology, reducing some of the equipment. That’s kind of what we’re looking at.
Richard Baldry: All right. And then —
John Givens: I’d also like to note that in the history of military simulation training, when companies have been able to win larger military contracts, they get a lot more economies of scale on those, whereas police contracts are often smaller and are more diverse equipment, which makes it a bit tougher to have larger margins on.
Bob Ferris: That’s a great point.
Richard Baldry: And last for me will be you started to touch on or actually answer my last question, so with the efficiencies you’re done and are able to achieve with the systems now more streamline, your G&A has actually gone down two quarters in a row. So now how do we think about absolute spending there, trending there? How efficient do you feel you’re at now sort of from a capacity? When would you need to be adding to that just as a natural course of growth on the overall business? Thanks.
Bob Ferris: I think a lot of that has to do with the kind of growth that we have. Right now, the way we’re building the scalability of the company would be to handle growth without having a lot of expense. John and I are both very conservative. And even to the point where John doesn’t rent a car, he borrowed a car that I have, and then he paid for tires to go on the car. So just to avoid rent a car fee for the company when John was here. So we’re very careful with the cash of the company and how it’s spent. And we feel like we’ve spent a lot of company money to build the scalability. We invested in the ERP system and are reinvesting in it to get it improved and much more effective than the first implementation where we had a lot of problems, as John mentioned.
So we would like to see it slow down, but only when we don’t see a good return. If we see a good return on investment, then, John and I, we want to be the most competitive company in the industry. And sometimes that takes some investment. But I think generally, we’re thinking some of that spend is going to slow down. Our plan is to — it would be to see a slow down unless there is an obvious need for it. We would prefer to move into the mode of higher efficiencies on SG&A, a reduction of capital spend now that V3 is set up, and a lot of our construction is done. I think that’s the bulk of what we thought was needed to prep VirTra to be the Tier 1 supplier for both military and law enforcement.
John Givens: I think it’s going to — even as we increase business, I don’t think we’ll reach equilibrium. It’s going to go down and stay there for several quarters anyways.
Richard Baldry: Great, thanks.
Operator: That’s all the time we have for questions. I’d like to hand the call back to Bob Ferris for closing remarks.
Bob Ferris: Thank you, Doug, and thank you, everyone. We appreciate your continued interest in our company. And to our investors, thank you for your continued support. Please know that we are dedicated more than ever before to building shareholder value and building the world’s most effective simulation training products, so that the war fighter and the law officer can serve their country, accomplish their mission, and make it home safely. With 2023 off to a strong start, I firmly believe the best days for VirTra are ahead of us. As always, be safe, take care and God bless.
Operator: Ladies and gentlemen, that does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.
