Jim Clark: Yes. I mean, I think that some of the things, well, first of all, Rick, thanks for joining. Thanks for the question. I think some of the things we’ve talked about in the past are still the levers we’re able to pull. And if I were to kind of try to paint a picture, those levers that we’re pulling, we’ve pulled them a quarter of the way, two-thirds of the way. We still have room in them. But chiefly, it’s manufacturing efficiency improvements and ongoing improvements in our manufacturing efficiency. Supply chain, we’ve got a very good team relative to supply chain. It’s not just about pricing, it’s about being good partners to our suppliers that supply us, being predictable. Giving them the forecast that we stay on and they have been reliable suppliers.
When you do that, you are no longer expediting things. You are not pulling the lever for contingencies. You are not disrupting your manufacturing process that is expensive. So, I want to say there’s simple, well grounded, basic kind of levers of running a good business, and our team is just good at doing that. We think that we still have levers to pull and room within the levers we’re pulling.
Rick Fearon: And as I know you’re well aware, LSI’s longstanding customer, Burger King just announced the acquisition of their largest franchisee, Carrols Restaurant Group. And in the announcement, they also talked about remodeling over 1,000 franchise stores over the next five years. And so, can’t help but think there’s some opportunity there. I was just interested in your perspective on this as well as really any other QSR activity that might be on the horizon?
Jim Clark: Yes, I don’t have, I’m aware of that transaction and congratulations to them. I’m sure that given the pace at which they’re making changes within their system, they will benefit from it and we will benefit from it. I will say that, it’s a great partnership. We really respect the way they run their business and the plans they have in mind and their execution matches up very well with ours. And that’s why I think we have become such strong partners with them. And I will say, it’s the exact same thing that attracts a number of the potential customers or a number of newer customers we are dealing with. That very high say do ratio, right? We are not super flashy, although I think some of our solutions are. We’re not — we don’t over commit.
We sit down and have realistic conversations with them and other partners in that space, and I think we have gotten real value out of that. The customers have gotten real value out of that, because they know what to expect. We deliver and we say we are going to do. And it fits very well within that structure of that environment because it’s very hard to come in and make those changes without potentially disrupting their normal flow of business and we have earned the reputation of being able to do that. And I think that our customer is responding very well to it. So I’m very excited what we will see, what will happen there. I would suspect that, we are right there in that planning process.
Rick Fearon: Yes. It really speaks volumes to have a customer like Burger King and such strong customers like Burger King on the QSR side. And so, you guys are obviously doing things right to keep them happy. Yes, my only other question really, sort of follow-up on one of the other questions relates to your strong balance sheet. You have once again reproduced with the methodical debt reduction, great work on that front. And so, yes, here we are with have some, I’m sure, exciting opportunities that are coming across the desk. And just wondered if you could provide any color on valuations. Like, it sounds like, it is more of a buyer’s market than it has been, but curious if that’s consistent with what you are seeing.
Jim Clark: Yes, I mean, I’m not sure I’m willing to jump on. It’s completely a buyer’s market, but it has changed, right? So it has changed a bit. I still think there is great respect for the businesses that are currently for sale and they want to get maximum value whether they are financially-owned or independently individually or corporate-owned or whatever it is. So the pricing is obviously pricing and valuations still remain a key element. I would say, overall in perspective, inflation has hit the valuations also. But we feel very encouraged that, the conversations are much more meaningful now. They are much more balanced. It’s kind of the best analog I can give it. It’s kind of like the real estate market. A couple of years back, properties that were up for sale, agents were saying, submit your best and final no home inspection.
All bids are due by 3 PM, that type of thing. And much like that in the M&A environment, we feel that, the conversations are much more meaningful. They are much more future oriented. They are proud of the accomplishments they have had, where the business is, or they are aware of where the business is. But they are much more willing to talk about put future opportunities in wide and support their valuations and that’s what we enjoy in those conversations. And as you know, most of the people on this call know, we also highly value cultural fit right? There are businesses we would like to be involved in, but we sit down and we realize — we’re just not a good fit. We see things differently. We value things differently. And although the business might fit well in our plan, if we have to go in and change course of that business, we know that the value is just not there for us.
