Alan Yu: Well, here’s what we see. We will be going very light asset in terms of 2024. In 2021-’22 — year ’22, we actually spent a lot of money on CapEx investment. This year, for the fourth quarter of this year, we’re probably seeing zero or very little CapEx expenditure. In 2024, we’re seeing a very, very low CapEx expenditure as well. So, with all the money that we save, we are looking at possibly increasing our dividend or special dividend every semiannual or annually on that part. And also, as well as any acquisition that we’ve discussed in the past, we believe, in 2024, it’s very likely because market condition is actually allowing people to looking to sell their business while they can right now, because a lot of business are actually, not struggling, I would say they’re not growing.
And they haven’t grown in the past year, and they were not looking to sell at a reasonable price. But I think that, in next year, more and more businesses looking to consolidate and also to sell the business. And that more opportunity will be out there for 2024 for strategic-wise, basically. We mentioned earlier that we’re looking for smaller warehouses, satellite warehouses, not necessarily open up our own warehouse, but also acquiring a small business that has a warehouse location that we can just take on that additional and that add on to the business. That will also — on top of the organic growth, this will be acquisition growth in terms of 2024.
Michael Hoffman: Okay, great. Thank you very much for taking my questions.
Alan Yu: Thank you, Michael.
Operator: And our next question will come from Ryan Meyers with Lake Street Capital. Please go ahead.
Ryan Meyers: Hey, guys, thanks for taking my questions. First one for me, how do you think about pricing environment in 2024? And do you feel like you’ve seen enough here through the last couple quarters, that it stabilized a little bit?
Alan Yu: We’re seeing the pricing stabilize right now, except for California. California has been very competitive in terms of pricing-wise. But one thing is the labor, we don’t see a labor increase across the board, every industry. And that is going to — we’re going to see how that plays out in terms of price decrease or price increase going forward. Warehouse prices going up, labor is going up, everything going up in California. Gas is going up, delivery going up. So, so far, we’re seeing is it stabilize, but we’ll have to see, wait till the first quarter to see what happen for 2024, a lot of changes in 2024.
Ryan Meyers: Got it, makes sense. And then, obviously during the quarter you guys announced the expansion of five new sales reps. Just wondering if you could talk a little bit about the productivity that you’ve seen there, how that ramp-up has gone?
Alan Yu: Yes. And I mentioned earlier that, in the past, like first two quarter this year, we only gain about around a low single-digit new distributor every month. But right now we’re gaining double-digit new distribution, adding — coming onboard every month right now. And these sales reps are basically mainly targeting toward the Midwest and East Coast. And we’re seeing meaningful distribution converting to account and start placing orders. And that’s why we’re heavily increasing our inventory in those sectors, which are the warehouse, I’ll say, it’s fully packed up right now. So, we’re looking to open up new warehouse in that area, not in California. We’re looking to scale back in California. Also, another one of the major method that we’re looking to increase or maintain our gross revenue is scaling back more manufacturing in the U.S. As we mentioned in our earlier releases, that, currently, 22% of the overall revenue were produced by our manufacturing facility in the U.S. Our goal is just to provide 12% to 15% or maybe 10% to 12% overall revenue from U.S. That will increase our gross margin.
Ryan Meyers: Great, thank you for taking my questions.
Operator: And our next question here will come from Jake Bartlett with Truist Securities. Please go ahead.
