Luke McFadden: Hi, good morning. This is Luke McFadden on for Tim Mulrooney. Thanks for taking our questions today. So I wanted to ask, too, just on first date, I’ll start with the first one and then move on to the second one after. But First Aid and Safety has been growing at a double digit rate for quite a few quarters in a row now. I know there’s a penetration story here with your established base of uniform customers, but I’m also curious if new product introductions are an important driver of this growth. How much of your growth in that segment is from new product introductions?
Todd Schneider: Good morning, Luke. We really like the First Aid business. Part of our culture is continued innovation. So we’re always looking at improving our — improving our processes, improving our products, improving our services, so it’s always a component. I cannot give you a number of, hey, it was X basis points of growth due to a product rollout or what have you, but I can tell you this. The value proposition in the First Aid business and all of our businesses, but in First Aid, as you asked about, it’s really resonating. And the mix of business that we have there is really good. And we’re able to be better sourcers, better providers of products with our investment and our distribution center. So when you have a robust supply chain that allows us to get products to the customers in a really timely fashion, it puts us in a great spot to be successful.
And so yeah, cross-sell, we’re absolutely, we want all of our customers, whether they’re uniform or fire or direct sale customer, we want them all to know about our First Aid business. And we try to make sure that that occurs in many different conduits, but it’s, yeah, we’re benefiting from that cross-sell.
Luke McFadden: Understood, really helpful, and maybe just sticking on first aid and safety here. As you think about that segment of your business, does it feel like you’ve essentially built out the full suite of products and services there, or at some point should we expect that potentially you’re more about other product introductions as you continue to build out the portfolio? Because the room here for more is essentially what I’m curious to know.
Todd Schneider: Yeah, Luke, yeah, again, I’ll go back to our culture. Our culture is such that we are constantly innovating and pushing ourselves to be the — to provide the best products and services. And so you’ll see more of that to come. We’re constantly innovating to put our partners in the best position, our employee partners in the best position to provide the most value for our customers.
Mike Hansen: And maybe one added comment Luke, when we think about this business, you may have heard us speak to umbrellas of image, safety, cleanliness and compliance and when we think about this business, safety is a fairly large umbrella and when our first aid and safety people are speaking with customers and thinking about that innovation that Todd talked about, we’re thinking quite broadly about how do we keep our customers, how do we help our customers keep their employees safe. And that can mean opportunities into the future. And that’s the way we look at it from a broad perspective.
Operator: And our next question comes from Andrew Steinerman from JP Morgan Securities. Please go ahead, Andrew.
Andrew Steinerman: Hi. In the quarter, when you look at your rentals and facility services segment, how much of the growth is actually coming from uniforms versus ancillary services directionally? Like, is there good growth in both? And also if you can make a comment about ad stops within uniforms.
Todd Schneider: Good morning, Andrew. As you know, we don’t give out those specific numbers, but directionally to your question, yeah, we’re seeing growth across them at all. It’s — there’s good demand for our uniform business and our facility services business, frankly for all of our business products and services. So, nothing to point out to one particular area there. As far as ad stops, we haven’t really seen a change to our customer behavior there. So, it’s — I’ll call it kind of business as usual. There’s many inputs to that number, but nevertheless, I’d say it’s kind of business as usual.
Andrew Steinerman: Thank you.
Todd Schneider: Yes, sir.
Operator: And our next question comes from Jasper Bibb from Truist Securities. Please go ahead, Jasper.
Jasper Bibb: Hey, good morning, guys. I wanted to follow up on the earlier discussion on first aid. The gross margin there was really impressive at 56% this quarter, but you also had SG&A at 25% from the prior year. So, could you provide just maybe a bit of color on the investments you’re making in that business? And when do you think the first aid segment should start to deliver a bit more margin leverage over that G&A base?
Todd Schneider: Yeah, Jasper, good morning. As I mentioned, we really like the business and it’s performing really well and we’re investing appropriately. The amount of prospects out there are massive. And to Mike’s point earlier, the value proposition is resonating. We talk about the mantra in that business is what’s more important to a business than the health and safety of their employees and their customers. So that is resonating. We’re in a great position to invest to provide those products and services. So we’re doing just that. And so we’re investing in selling resources, we’re investing in marketing resources, because we really like where we are and it makes sense to invest. And I think you’re seeing it show up in the operating margin and the gross margin.
Mike Hansen: Yeah, we’ve — each quarter this year has been 22% or higher, which is quite a big improvement from a year ago. And so, as Todd said, these — and we want to continue to invest in the long-term growth of all of our businesses. And you can really see those investments playing out, particularly in the gross margin line of first aid and safety. But we love the margins. They’re up quite a bit over the last few years. And we’ll continue to invest as we see appropriate.
