Anthony Ambrose: Not going to get into that Dave. They’re consistent and typical with prior quarters, nothing strange either way.
David Kanen: Okay. And for the quarter, what were adapter sales?
Anthony Ambrose: The exact number we’ll put in the Q, but I know the things were up pretty well quarter-on-quarter. Jerry, do we have the exact adapter numbers? Jerry will take a look at that and we’ll let you know. What’s the next question?
David Kanen: Okay. On operating expenses, we’re up year-over-year. Revenues are down year-over-year. Gross margins are down. It seems like an unsustainable posture going forward. Can you talk about opportunities to trim costs and to be more efficient so that when we do report good revenues, we can get some leverage to the bottom-line and if possible, quantify that? I’m assuming this is in the works. But if not, I would be quite disappointed.
Anthony Ambrose: I think Jerry has clearly got some ideas on spending and he started implementing those in Q3. I’ll let him talk about that in a moment. But I just want to clarify some things. The revenue is actually up 25% year-over-year through the first nine months. So, yes, spending is up. Frankly, spending is up more than we would like it to be up. And the focus on spending control is something that Jerry is clearly digging into and has already got that started in Q3. But the whole concept is we want to — we’re delivering on our operating leverage, we’re about 40%, pretty close to that, but we clearly want to do better. And I think your comments are how can we continue to get more efficient and deliver even better operating leverage to the bottom-line, that will be better. So, I think, Jerry, what was our revenue on the adapters in Q3?
Gerald Ng: $1.8 million.
Anthony Ambrose: $1.8 million.
David Kanen: Okay. And then last question. This seems like inconsequential item, but it makes me question the seriousness and stewardship that you’re approaching the business at the current time. Interest income for the quarter was $41,000. Now, this may seem trivial, but what it tells me if I annualize that, on average, you’re getting about 1.4%, a three-month T-bill is at 5.3%, a six-month bills is at almost 5.6%. You can get a multitude of money markets paying 5.25%. Why is that? And going forward, is that something you’re going to pay attention to? Because on an annualized basis, we’re talking about giving away according to my math, like $400,000, am I wrong? If so, please correct me, but if you can give an explanation on what we’re doing going forward.
Gerald Ng: Yes, David, I can highlight that. As you know we do have a fairly strong cash position, however, we do have option operational needs, both in the US, in our Shanghai manufacturing facility, and in Germany. We do have a very active method of deploying unneeded cash to maximize the interest earnings. But it’s not clearly the case where we deploy everything 100%. We are obviously looking at that and balancing operational needs as well as the earnings opportunity.
Anthony Ambrose: So, Jerry, we’re clearly looking at that, but also my understanding is that if you look outside the US, the interest rates available on cash deposits may not be the same as the current high rates that we enjoy in the US.
Gerald Ng: Correct.
Anthony Ambrose: So, on a blended basis, we probably can’t get 5%. But I think to Dave’s point, we’re certainly looking at it and–
Gerald Ng: Yes. And we are currently using nightly sweeps. We are also deploying some of our money into short-term investments. So, we are obviously looking at it and on continuing to maximize the opportunity where we can.
David Kanen: How much of the $11.9 million is in the US?
Gerald Ng: Approximately half.
David Kanen: Yes. So, even on that, we’re not maximizing it. I mean, you can put your money in the money market and get 5.25%. I’m sure it’s better than 1.4% in Europe and in China? I mean across the globe, there have been numerous interest rate hikes. So, just pointing it out, it would make me feel better if you guys were maximizing that and also taking a look at every line item on the expense sheet.
Gerald Ng: Understood Dave. Thanks.
David Kanen: Thank you.
Operator: Our next question comes from Chris — Actually, our next question comes from Michael Cooper. Please go ahead with your question.
Unidentified Analyst: Good afternoon. Anthony, can you talk a little bit more about the SentriX funnel. I’ve been watching the sales progression of SentriX over the past few years as you improve the product and then learned about the market a little bit more. And I think you’ve changed where you’re going into the market, maybe more on the design side of things. But I’m still — each quarter comes and goes, and I’m waiting for a nice big uptick in revenue from SentriX , and I’m not exactly seeing it. But what I’m hoping is that in the background, you guys are very active maybe and have been over the last three or four quarters on the design side and maybe that is progressing through the funnel. I know that takes some time. But can you give us some metrics around that kind of dynamic so that we can understand how the market opportunity on SentriX is performing?
Anthony Ambrose: Sure. I’ll start, Michael, by saying we don’t break out SentriX separately. But in my comments, our pay-per-use revenue this year from units running through machines that are under that type of contract is up pretty close to 100% year-over-year. So, that’s a good indicator on the revenue side. On the designing side, I didn’t give you a size estimate of the win here in the solar market, but it’s a pretty hefty win. Channel partner believes it’s mid-six digits, okay, which would be a very, very nice volume run rate for us on the SentriX platform. Having said that, we continue to refine our marketing to better tailor our message and focus and we have customers that we’re engaged with now on SentriX opportunities in automotive, industrial, and other markets.
The key thing for us is to find the right person in the company to talk to about SentriX. And we’ve learned over the years that person is not the person we usually talk to for data programming. And so part of the problem and the strategy is, okay, if we have these relationships, how do we use them to find the right people in the company and talk about SentriX. And that’s what we’re doing on the marketing side.
David Kanen: Okay. Excellent. Thank you. And that $0.5 million potential number on your solar contract is very encouraging.
Anthony Ambrose: Yes, I guess a mid-six digits.
David Kanen: Sure. Understood.
Operator: And ladies and gentlemen, at this time, I’m showing no additional questions. That will conclude today’s question-and-answer session. I’d like to turn the floor back over to the management team for any closing remarks.
Anthony Ambrose: Well, operator, thank you very much. I’d like to thank everyone who joined the call and ask questions today. We look forward to sharing the developments with you as we go through Q4, and we’ll be at the Productronica trade show in Germany in November in Munich. We also have an Investor Summit Group’s Virtual Conference and the Singular Research Best of the Uncovered Conference in San Francisco in December and we’d love to see you there. If you have any questions on that, please send a note to Jordan Darrow. With that, I’d like to conclude today’s call. Thank you very much.
Operator: Ladies and gentlemen, with that, we’ll conclude today’s conference call and presentation. We thank you for joining. You may now disconnect your lines.
