Scott Malmanger: Yes. So that’s actually the area I would definitely highlight, right? I think if you looked at the existing customer base with the 5,000, there’s definitely interest in InteropONE. We had some trials. U.S. Forestry and Bureau of Land Management, the federal level had some trials. And they do see this capability having value. That being said, for where they operate, they tend to have no cell phone coverage. And so they’re really looking for that low earth orbit satellite system that’s going to be put out where you have satellite direct to cell phone service and that we’re still a little bit early in that market. But for those types of customers, they’re really looking for that service to be available to provide coverage obviously in areas where there’s no coverage today.
In terms of where we’re seeing the most traction is really with the BKR9000 customer. So pretty much every customer who has purchased the 9000, we’ve talked to them about InteropONE. And all of them find that service, as an added value to their business. So most recently, the larger ones that we got, Sandoval County in the Q4 timeframe when we went to make the deliveries for the 9000. We had our team there. So over 200 radios, I think, we delivered to them. And we took the opportunity, right, to introduce them to InteropONE. And immediately, they saw the value, of that service and they’ve been in field trials since then. More recently, Boulder County, same story. So pretty much every customer we talk to around the 9000, there’s a tie in with InteropONE.
And again, it’s a little bit different operation. They tend to be more around the cities and the suburbs and the need for broadband is something that they’re using today. So that lot of their officers already have smartphones deployed. So that was very encouraging for us, as we see that. And we do believe that these are complementary services. They don’t replace each other, but having both services, the 9000 and InteropONE certainly adds to our story of why you should choose the 9000.
Aaron Martin: Now going back to the gross margin, is it fair to say that, I mean, there’s some of the stuff in the gross margin improvement in the earlier quarters, your 6 quarters of improvement was really just getting rid of some of the supply chain, higher cost stuff and you were expediting stuff and all that. Is it fair to say all that is finished and now it’s a question of cost downs?
John Suzuki: Yes. I will expand on that a little bit, Aaron. Some of these cost ends as we go forward with East West, right? We’re more able to vertically integrate the sub-assemblies into the East West manufacturing operations avoiding that 2 stepping. And so as they take more control of the full product, the cost of the product will go down over time.
Aaron Martin: Though as you did mention, you do have very high inventory going into this into the year. Do you still have some of the high cost inventory sitting there on your balance sheet, which will keep the gross margin slightly lower while it’s running through the balance sheet?
Scott Malmanger: Aaron, I would say there’s some, but I would say it’s minimal. I would say it’s not material or not significant.
John Suzuki: Yes, especially from the 2022 timeframe.
Aaron Martin: So lastly though, I think Scott you said before in regards to the question about the guidance, if you just take the current revenue run rate to mid-70s, put a 35% gross margin on it, you essentially get and the same operating expense levels, you essentially get $1.50 in EPS. So I’m trying to reconcile that with the call for continued gross margin improvement. And so even let’s say revenue does not grow, which put that as it is, shouldn’t we if 35% of the baseline going into the quarter going into the year. And I mean, I don’t know what how much improvement we’re talking about, but $1.50 seems conservative if there’s going to be gross margin improvement. Is that accurate?
Scott Malmanger: I like a conservative measure.
Aaron Martin: But my math is correct?
Scott Malmanger: Your math is correct.
Operator: Well, we don’t appear to have any further questions in the queue. I’m now going to hand back over to the management for their closing remarks.
John Suzuki: Thank you, Jen. Thank you all for participating in today’s call. We look forward to speaking with you again, as we report our Q1 results. All the best to all of you and have a great day.
Operator: Thank you very much, John. This does conclude today’s conference. You may now disconnect your lines and have a wonderful day. Thank you for your participation.
