Dan Fachner: Right. Another good question. And we’ve been talking about this now for over a couple of years and our goals that Ken and I have wanted to drive the business to and to get to that 30% gross profit margin. Really proud of the teams to have followed the strategies to allow us to get there. And yes, Jon, we might be a little even more bullish there. We think our strategies are working. We think some of the new lines allow us to make products more efficiently. We think our teams are working hard in every facet and are starting to look at that 30% as a floor in which we can grow from. How quickly? Again, we have some seasonality to it. We’re coming off the back end of the summer months, where Dippin’ Dots and ICEE are a big part of our sales. And as you get into the winter months, that isn’t as strong. But we think we can continue to grow from where we landed this year for sure.
Jon Andersen: Great. Thanks. Thank you, guys, and congrats again. Good luck.
Dan Fachner: Thank you, Jon.
Ken Plunk: Thanks, Ken.
Operator: Thank you. [Operator Instructions] And our next question is going to come from the line of Connor Rattigan with Consumer Edge. Your line is open. Please go ahead.
Connor Rattigan: Hey, guys. Good morning. Thanks for taking our question.
Dan Fachner: Good morning, Connor.
Ken Plunk: Good morning, Connor.
Connor Rattigan: Yes. So Dan, I think I just heard you mention that you are expecting some pricing next year. So if I’m not mistaken, you guys are pretty much back to pre-pandemic margins with deflation in flux commodities. I guess just, how do you go to customers and sort of push that pricing through while they know you’re experiencing deflation? And I guess maybe could you provide a little color into your visibility into your input costs for next year and maybe any hedging you have in place? And I guess should we kind of expect that deflation to continue next year? Thanks.
Dan Fachner: Good question, Connor. We are experiencing deflation in some of the areas and, yet, we are having double-digit inflation in others, like sugars and sweeteners. And that impacts some of our business pieces, like the ICEE side or the Dippin’ Dots side or pieces of our frozen novelties. And so there will be some areas that we will be able or will be taking price increases and probably need to, maybe have needed to already. And yet, there will be other areas that we’ll be taking a look at and I’m sure we’ll be challenged in and we’re prepared for those areas as they come. So there will be some pricing that we’ll take. ICEE is pretty consistent about doing that at the first of the year, and I believe that we’re scheduled for that again. And Ken, do you want to mention the other piece of that?
Ken Plunk: Yes. Connor, in terms of kind of covered or contracts, I couldn’t say enough good things about the procurement organization, so whether it’s flour, whether it’s sweeteners, whether it’s something like eggs or whatever. I think they’re managing that very well. In some cases, we’ve got contracts out for the next three months. Some cases, it would be six to nine months. But I think we’re really well positioned to kind of maintain and manage and minimize any other inflation or maximize deflation in that, in how we buy. In terms of the outlook, I mean, that’s always hard to say. You’ve seen different political and just international things happen that can drive things pretty quickly, whether it’s the Ukraine situation.
So those wild cards, I think, are still out there. But absent any of that, I think it’s going to be a pretty stable environment. I mean, I don’t see a lot of significant more deflation, but I think most of these categories will hold pretty well. And so I don’t expect to see a lot of inflation. CPI, I think, came out yesterday at around 2%. Production CPI is generally about 150 basis points higher than that, because there’s a bit of a trail there. As we look forward, I think the forecast on inflation is in that 1.5% to 2% range. So that’s probably how we kind of feel about it and how we are trying to manage what we do in terms of procuring materials and how we do that.
Connor Rattigan: Okay, perfect. Very thorough. And then I guess just one more for me. So Dan, in your prepared remarks, you mentioned targeting international growth, especially down in Mexico. I guess, first, can you remind us if you currently have any international operations? And I guess just, is this more of an exploratory project or should we expect this to be like a tangible 2024 impact? And then I guess just kind of stepping back as well. We’ve seen a lot of CPGs that are U.S. focused kind of attempt to migrate to international markets only to really run into issues gaining distribution and also experiencing some profitability challenges given the skew to more traditional retail and also just a lack of scale? I guess just sort of what is the plan in place to sort of drive that distribution growth and maybe minimize those profitability headwinds?
Dan Fachner: Yes. Down in Mexico, our operation is really centered around ICEE today, and they really had a tremendous year. They had a record year in both sales and profits and proud of what that team’s doing down there. We want to be able to expand on some of their business. We want to be able to maybe take some of our products that they aren’t operating with today and expand them down there, such as Dippin’ Dots or some of our snack food items and think that there’s a real opportunity for us to grow. We do a little business internationally today and feel like there’s an opportunity for growth for us. And so for kind of really the first time, we’ve brought on an international business leader to help us identify that and to do some steps along that way.
