Todd Macomber: Yes. Yes, $5 million a year.
Mark Argento: Okay. So like this quarter, you guys did adjusted EBITDA $90.2 million. I’m looking for adjusted net income. Adjusted net income $6.5 million, less $1.25 million or whatever five divided by four is. So kind of $5 million roughly would probably be a good kind of free cash flow. So just over half of EBITDA you’re turning into free cash.
Todd Macomber: Yes, I think that’s fair.
Bohn Crain: Yes, I think that’s fair and kind of where we are, I guess that was quite a big effort by that just in the context of — I don’t think anybody would characterize the current environment as being normalized. But in the kind of — in the current kind of where we collectively are in the cycle, I think that’s reflective of the profile and kind of cash flow characteristics of the business kind of in this down market, but we would expect it to be obviously higher than that with a little less of a headwind.
Mark Argento: Yes. I mean if you can make $15 million to $20 million in free cash or generate $15 million to $20 million in free cash in this environment. And obviously, you got a great balance sheet, so you guys are in a great shape. But I appreciate it. Thanks for the question guys — for the answers.
Operator: The next question comes from Jeff Kauffman with Vertical Research Partners. Please go ahead.
Jeffrey Kauffman: Hey, gentlemen. How are you?
Bohn Crain: Good, Jeff.
Jeffrey Kauffman: All right. Good. A couple of knits here. Could you talk a little bit about what the impact of the Daleray acquisition is going to be to the financials? I guess since it’s an agency, our former agency tuck-in, we’re not going to see a revenue impact, but we will see more of a margin impact. Can you set me straight?
Bohn Crain: Yes, that particular transaction is pretty small in the scheme of things. So I wouldn’t look for any meaningful impact to that particular transaction. But I think it is indicative of kind of — not in terms of dollar value, but we do expect to have an opportunity to convert more agent stations to company-owned stores. But it’s a great question, Jeff, because I was going to tease you a little bit. So for — everybody on the call, Jeff is notorious for modeling in M&A transactions into his guidance. So he’s always high on guidance to this model again, M&A transaction. So don’t model in any M&A transaction, Jeff, just give us the baseline.
Jeffrey Kauffman: I’m just skating to where the buck is going to be, not where it is. So I guess on that topic, normally, in a normal environment, second quarter seasonality would see revenues up about 4% to 5% sequentially from first quarter, and a little bit of deterioration on the net revenue margin because of mix. Given your comments on the kind of math peak season that we’re seeing, would you — guide is the wrong word, but would you convince us to be above or below that normal range? Or do you think we should think about this as a muted, but normal transition from fiscal 1Q to fiscal 2Q?
Bohn Crain: We’re in such kind of foreign territory. I’m not sure I would rely on some of kind of those historical trends right now. Firstly, we’ll see how it plays out. But I would kind of anticipate us being relatively flat on a sequential basis here through the end of the year and then likely a softer quarter ended March and kind of building back from there.
Jeffrey Kauffman: Maybe give you some fun to talk about here. There’s been a lot of discussion about near-shoring and reshoring and companies kind of moving supply chains around. I know in Asia, it’s resulted in some Chinese-based manufacturing going to say Vietnam or Thailand or Cambodia. Can you talk about where you’re seeing the impact of reshoring, whether it’s on the international side, whether it’s say things going into Mexico, and then coming into the U.S. through your networks? Just give us an idea of what you’re seeing on that side.
