Thilo Wrede: Yes, there is — the vast majority of this is CapEx we can get into — in the follow on call, we can get into the accounting details. There are some that will count as OpEx, but for practical purposes as soon this is our CapEx.
Robert Dickerson: Okay, all right. great. Thanks a lot. I’ll pass it on.
Russell Diez-Canseco: Thanks Rob.
Operator: Thank you. Our next question comes from the line of Matthew McGinley with Needham. Your line is now open.
Matthew McGinley: Thank you. So, I have a follow-up on the margin. It’s more of a long-term one. I know that the targets that you outlined for 2027 were linear, but how should we think about where you’ll be at this year with margins being relatively flat at 10% versus your plan to get to that 12% to 14% over the next few years. Does that leverage in the model come more from gross margin or from operating expense? And as you’re on that path to $1 billion, do you see most of that leverage when you get closer to that $1 billion mark? Or do you see leverage all along the way where kind of this year is more of an anomaly where you noted the puts and takes where the margins are relatively flat?
Thilo Wrede: Yes, I don’t think it’s going to be exactly linear. There’s still going to be quarters and years that might be a bit heavy on investments and some years that are little lighter. I think with the digital transformation, for example, once we are live, we can think about, say, with all the data that we are now getting, what other capabilities can we build, for example, where can we invest in running the business even better. I think the guidance for this year, it’s early days. We talked about anticipating increases in freight rates, for example, we’ll see how that will play out. [Indiscernible] is to get from where we are — what we’re guiding this year in terms of EBITDA to get to the 12% to 14%, it’s a pretty clear path for us, but we want to make sure that as we are giving you guidance on how to think about the modeling that we’re not getting ahead of our skis on that.
Matthew McGinley: Okay, I appreciate that. And then you had a really outstanding year for operating cash flow generation, and most of that was driven by the increase in profitability. This year, your implied profit dollars won’t grow at the same rate, obviously, with the big margin increase you had and obviously, it won’t have the same impact on cash flow. So, I’m wondering if the operating cash flow this year may be difficult to sustain at that same level you did last year if you have a more normal investment in working capital?
Thilo Wrede: Yes, I think where we had a benefit, Matt, last year, was that a lot of the growth came from pricing, right? When you think about what drove our revenue growth last year, it was about half volume, half was price/mix and price is obviously a very nice way to drive cash flow. This year, the growth will be pretty much entirely volume-driven. And so the makeup of where the growth is coming from, it’s a bit more expensive, if you want. And so with that, we are probably getting a bit less of an operating cash flow benefit than we did last year. But we continue to be very cash generating and being able to fund operations entirely with the cash that the business generates.
Matthew McGinley: Yes, okay. Thank you very much.
Operator: Thank you. Our next question comes from the line of Ben Klieve with Lake Street Capital Markets. Your line is now open.
Ben Klieve: All right. Thank you for taking my questions. Congratulations on the great end of the year here. I just have one question here as a follow-up on the foodservice conversation. 6% of revenue, $25 million, $30 million revenue business out of foodservice, I’m wondering how — if you can characterize kind of how much of that revenue is really from restaurants that you have kind of characterized as those that uniquely fit your brand versus just kind of more general pull from restaurants and may just be aware of your product from the broad-liners? Do you guys have a relationship with the vast majority of that $25 million or $30 million? Or are you guys seeing some pull that just comes because of the success of your brand outside of your internal efforts in sales and marketing?
Russell Diez-Canseco: I think that’s a great question. And I actually don’t have an exact split to share with you on this call, although we can probably do a little bit of research and come up with an estimate. What I would say is that not unlike the grocery business in 2023, we did experience some sales acceleration due to avian influenza. And I’m confident that we got some trial from some restaurants over the short run that may or may not have become enduring and there’s a conversion rate not unlike what we see in households. I’m really excited about that, rhe strategy we’ve discussed and really partnering with great brands, and we should probably do a better job of helping you understand how big that opportunity is.
