So we – I mean, to be clear, we – my remarks were for a reason, we don’t want to part ways with capital at the levels that we’re at today, which is why you saw kind of the Ault deal – Ault, A-U-L-T, deal struck at a higher price. We wanted to – we negotiated a floor on what we are willing to part ways with on our stock. And so yes, that’s kind of how we position that answer.
Steve Hansen: That’s good color. I appreciate it. Thanks, guys.
Operator: Thanks. Thank you for your question. Next question is from the line of Ted Jackson with Northland Securities. Your line is now open.
Ted Jackson: Thank you very much. Congratulations on the quarter. Yes, I got a – most of my questions were asked, but a couple. I’d like to circle to the Pennsylvania opportunity just because it’s kind of unique in terms of at least my experience with Alta. Can you – was there no – I guess the question is, was there no like CASE presence in that region would be kind of one sort of thing like how do they come into play? And then when you put a new location in, how long does it take for you – first of all, what’s the investment for, you, say, a typical location than you’re greenfielding it? And then how long does it take for a location like that to hit stride in terms of where it’s actually performing at the metrics that you would want it to perform at? And that would be my first question.
Ryan Greenawalt: Thanks, Ted. This is Ryan. I’ll take part of that, and then I think Tony will probably fill in some color on that. So first of all, we typically shy away from opportunities you would deem with greenfield, where we’re going into a territory and trying to carve out share for a manufacturer who’s not already there. You can’t create new demand and all you’re doing is bringing in product that potentially competes in a mature market, and it’s very difficult. And that’s not what this is. Here, we have a dealer that has decided to part ways or it’s been, I guess, mutual that they are going to part ways with the CASE relationship and they’re pivoting to a different manufacturer, and they have had some historical success in that market, and there’s an existing field population that today is being left unserved and unsupported.
And this deal for us is being underwritten on the strength of that field population and what we know a field population will yield in the way of parts and service and supporting a headcount of technicians. So how quickly we can ramp up is going to be dependent on how quickly we can attach on to that customer base and take care of them with their existing equipment and preserve the goodwill that’s there with the CASE brand and with that customer base. As a point of reference, we’ve resurrected territories for OEMs in the past and our legacy business here in Michigan, the oldest part of our Construction Equipment business, started with negligible market share and very little field population. And it was about a 3-year ramp-up to being a $100 million business and having sustainable market share.
That’s sort of what we’re forecasting for this business over the near-term without any further territorial expansion. With the territory we have and with the field population that’s there, we expect to be able to ramp up to that level over the next 3 years. And that could be further I guess, stimulated by other M&A opportunities or other brands that would be ancillary, allied lines that we could bring in, but that’s kind of the strategy. And then Tony, do you have anything on just sort of…
Tony Colucci: I think I agree with Ryan, it’s probably – it’s at least 3 years, Ted, before you have any sort of material. I think in this instance, given it’s a pretty cold start here, we do have – we’ll be stepping into some parts revenue, but we’ve got to ramp up technicians, the facilities effectively just starting new here. These were existing facilities that we’ll step into the lease with. But CASE has really been a good partner here and understands that this is going to take some time. But as Ryan mentioned, we’re sort of used to this situation, and we’re looking forward to it. In terms of capital, Ted, it’s an immaterial kind of amount. We’ve got some soft costs, right, just starting to maybe with some sales leaders and people in the branches, but nothing of any sort of material outlay. Eventually, we will start to build a rental fleet out there. But again, I don’t expect anything material for several years.
Ted Jackson: So if I understanding what you said. So the first, you’re taking over leases from this dealer that’s walking away from CASE? And is that going to be the first two locations that you referenced? And then once you kind of get those stood up, then there’s growth opportunity for you within the region just because you have this whole region, and that will be sort of a longer-term build out, if you would? Is that what I’m hearing from you?
Tony Colucci: Correct. Correct. We’re starting with two locations where we stepped into the leases, and there’s other locations kind of to be had. That we expect to…
Ted Jackson: Will you bring some of the employee base from those dealers along? Like when you need to get technicians because they’re so hard to get. I mean will there be at least kind of a base level of talent, if you would, that’s already there that comes along with this? Or is that something you have to go out and get?
Tony Colucci: There’s a base level of talent that the other dealer clearly had that was technicians working on CASE. This is very much in its infancy as it was just kind of announced publicly today, Ted. And so we’ll be working on kind of building out the team in the coming weeks. So today, we’re starting anew, but there’s talent out there and we have to kind of go after.
Ted Jackson: So no, I mean, it sounds pretty cool, actually. And honestly, I don’t know if there’s a press release out because I know in the earnings release you referenced it, but I didn’t see it on any newsfeed or on your press release before the call started. Going on to just my next question, just kind of talking about the electric side of the Alta house, if you would, you were – you announced some of your first Nikola truck sales last quarter. Just maybe an update with regards to kind of where that stands, I think you felt like there was room for more unit sales by the end of this fiscal year. And then I know the longer-term that one of the – where the business becomes interesting is maybe less on the battery side and more on the hydrogen side and just maybe a longer-term discussion of where that – how that’s developing also. And that would be it for me. Thanks.
Ryan Greenawalt: Yes. This is Ryan. I’ll take that. So Nikola just had their earnings call, I think, last week. And there’s not a whole lot more to report than what was announced in that call in terms of how the recall is being supported. We did have an initial fleet installation that unfortunately is part of that recall and we’re still navigating that. It’s expected that that – those units will be back in customer hands in Q1 of next year as they work through the battery issue. And then you kind of teed it right up for me, Ted, that we think that in our region, and just in terms of Class 8 in general, longer haul and heavier duty trucking, it’s going to be an application more suited for fuel cells. And we’re excited about the product.
Nikola has officially launched the product. It’s being heavily demonstrated, especially right now in California, where there’s more readily supply of gas. But we’re very excited about it, and we’re poised for this opportunity. We’ve been supporting auto manufacturing with fuel cell-powered forklifts for years now. We actually deliver gas for one of the major OEMs in the auto industry, and we’re poised to have our gas solution be part of our services going forward. So more on that to come. It’s still early stages, but we’re really excited about the direction Nikola is headed with the product, and we’ll be eager to get these trucks back on the road next quarter.
