Steve Silver: That’s helpful, thanks. And one more if I may. Regarding the recently announced Track Tools rail acquisition, can you speak to your views on the growth opportunity there and maybe perhaps what synergies you see with the core business?
Paul Sternlieb: Yes, absolutely. We’re really excited to complete that acquisition and although it was small, not material for us, it is very strategic, certainly, it’s the first of our acquisitions that are linked towards of what we’re doing in our focused verticals, and in this case, rail. And the exciting part for us about Track Tools is, first and most importantly, it has – it’s very differentiated technology for the marketplace that really creates some significant benefits and functionality for end users in that space, which obviously was our key interest in the acquisition. I think secondly, although it’s a very relatively small brand and business today, and essentially only focused in the U.S., what we’re excited about is our ability to scale that globally given our presence really in all major markets and our existing customer relationships in the rail sector in many of those markets and we’re actively working on that as we speak.
So we’re excited about the commercial growth potential. And frankly, over time, some of the cost synergies as we can drive out some of the – you know, the overall cost of the product and improve the production efficiencies over time. So it’s a really exciting acquisition, early days, but we’re pleased with the progress we’re making.
Steve Silver: Great, thank you so much. And my congratulations on the quarter as well.
Paul Sternlieb: Thank you very much, Steve.
Anthony Colucci: Thanks, Steve.
Operator: Thank you. Next question today is coming from Gary Prestopino from Barrington Research. Your line is now live.
Gary Prestopino: Hi, good morning, everyone.
Paul Sternlieb: Good morning.
Paul Sternlieb: Just a quick question on your building an acquisition pipeline, would it be safe to say that, a lot of these acquisitions are small private companies that are very product-specific to your markets or are they really across the board in terms of the kind of things you’re looking at?
Anthony Colucci: Yes, hi, Gary. So from a size perspective, I’d say, it’s a bit across the board in terms of what our funnel has. I’ll go back and just say from, what the types of companies that we’re looking for are, we’re really trying to stay close to our knitting here, is what I would say. We’re looking for product tuck-ins. We’re looking for targets that would help us expand in our key vertical markets that we’ve been discussing. And then, the targets that help us expand our technology or innovation here as well. So I mean that’s what we’re focused on in terms of our targets and that’s what we have in our funnel.
Paul Sternlieb: Yes, and I would add to that, Gary, you know, our current funnel, I would say, both quality and quantity, has significantly improved as we brought on a full-time Corporate Development leader about half a year ago now, who is fully dedicated to that. I’d say the second thing is, we have, what I would classify as both small, medium, and larger size kind of deals in that funnel, so many of them, yes, could be characterized as more privately held kinds of businesses, but we’ve got all different kinds in there and we continue to have good meaningful conversations as we know these things tend to be episodic and depend on asset availability. So we’ve got a pretty disciplined process from early stage target identification through to outreach and cultivation, ultimately transacting and integrating deals.
Gary Prestopino: Okay. And then, just lastly on the ASCEND program, there was a prior question, I think you hit at least this quarter close to your adjusted EBITDA margin target. Going forward, as you move from ASCEND to maybe just continual cost control, productivity improvement, whatever, what are you targeting areas that would help to drive the margin even further? I mean, assume that a lot of the lower hanging fruit on ASCEND has been taken care of, so what do you bank on to grow the margins going forward, is it products, higher margin products? Are you still able – you’re going to go through a program where you’re going to really tightly control SG&A expenses, any vision you can give us on that, that would be helpful.
Paul Sternlieb: Yes, sure. I think there are a few things, you know, from a cost of goods perspective, we still believe we have ample opportunities to drive more manufacturing productivity inefficiencies, somewhat through investment as Tony referenced earlier in automation, other capital investments, and we’re actively exploring those. I’d say, secondarily, we still believe we have opportunities in sourcing. We still have a relatively complex supply chain and there are definitely opportunities to drive more best-cost country sourcing, more vendor consolidation, more value engineering work. We continue to evaluate our footprint and look for opportunities there. And then on the SG&A side, as Tony referenced in his remarks, I mean, we’re pleased with the progress we’ve made, and yet, I would say, we’re still high relative to what we see as best-in-class industrials and think there’s more opportunities over time to drive greater efficiencies there as we’ve been doing.
So – and then, of course, there will be some pricing and ultimately mix benefits, especially driven, I would say, particularly by our focus on our core verticals and the work that we do in innovation, I would say, generally speaking, most of our innovation, we would expect to be margin accretive, especially if it is truly differentiated product in the marketplace, which is really what’s in our funnel. So all that should be favorable over time. Of course, some of that we may choose to reinvest to drive accelerated organic growth, so not all of that will drop to the bottom line, but on balance we still see opportunities for margin expansion.
Anthony Colucci: Yes, I agree, I would just add that we have a lot of opportunities and initiatives in our pipeline here across the board, did a lot of work over the last two years, but there’s still more opportunities that are there that we are driving, and we really are taking this to the next level here as well in terms of the ideation that we have and just really moving to a continuous improvement type of mindset.
