Mitchell Sacks: Guys, congrats on a super Q4. So this is the first time I’ve seen you guys give guidance and obviously been following you a while. Can you just talk a little bit about why you have the confidence this year to give guidance as you such and obviously it’s a very nice turnaround from a business that suffered during COVID and now into a nicely profitable stance. If you could do that’d be great.
Bart Shuldman: Yes, Mitch, when we looked at the numbers and now again we all know that something can change in June and bomb to go off, China could say they’re taking it to another level but what we see right now is a very steady casino business. And we do have these projects with SSP. So we felt due to the fact that we came through such a difficult period that you deserved to hear from us. What we were seeing right now, again, things can change. And we saw that as the pandemic hit, things can change. But given where we’ve come from, and the support that we’ve had from the shareholders over these past couple of years, and how difficult that has been for them, to watch what’s occurred not without, not just with us, but other companies. We felt good about sharing some of this good news. So you could at least see that we’ve made a lot of progress, and we’re expecting even more progress this year.
Mitchell Sacks: Awesome. And then with respect to the FST business, we’ve been to the restaurant show and seeing what’s out there. Are you seeing anything out there from any competitors that give you any pause in terms of your kind of first mover advantage?
Bart Shuldman: No, I think the low hanging fruit is labeling, Mitch, and when you talk to a restaurant company, and then we’ll talk about the different verticals, right, when you talk to a restaurant company, and they are fighting food inflation and labor, and labor shortages and labor inflation, and you sell them the labeling, and you show them what it can save them. That’s it resonates with them, you’re not asking them to change the whole system, you’re really just saying, look, here’s what we can do, you’ve already had, you’re either doing it by hand, or you’ve got our old 9,700 in. And now look at what you can do with this thing. And it’s resonating. So in the restaurant industry the talk of labor savings, and the fact that they can see the label better and either not serve something that’s expired, or can see that something is expiring and make some stuff up.
So they don’t lose their food and throw it out. And if we can save them 2% – 3% on waste, it’s huge. So we’re really focusing in on what where we think we’re the strongest, which is labor, and we always have them. Now the C-store and grocery aisle is all about fresh food and labeling. And the interesting thing there is a lot of our customers are starting to see that that label can become a marketing device. And we’re working with them on different designs and brown labels and color labels and things like that. And the C-store market is very interesting market, like 60% of the C-store market are individual stores. So you’re really just working on the top 30%- 40%. But they’re all looking at fresh food as a growth. And when they start looking at that and looking at what’s the most efficient, productive way to do that.
Clearly, our labeling solution is catching their attention. And included the fact that we’ve been in the industry, the longest with labeling, right? We started with McDonald’s, right? 9,700 started rolling it out, big orders in 2014 and all that, we’ve learned a lot about labeling and the different things that people can do with it. There are things that we do that nobody else does, just because of our experience over the years. So what we are really trying to focusing on is when we look at the restaurant market, stop talking to huge story. Get in and talk to them about where their costs are, and how you can help their costs. They’re taking temperature today, we get it. But if you can show them a clear label that says, hey, in two days, that thing’s going to expire.
Maybe you want to cook some more something with the tomato sauce, so you don’t have to throw that out. So we’ve heard from restaurants, how much money we’re saving them on both labor, but also on food costs. And even one restaurant company told me personally, that they think that their food quality has gone up. So we’re really trying to focus, Mitch, and I share this with you on where we can sell. Because look, restaurants are, they still have headwinds, man, they came out of a tough pandemic, and they got inflation up the wazoo. They got food, they got labor shortages, when you can sit down and just say, look, you’re doing this today, but look what we can do for you. And it’s not that expensive. We can sell you the software for the labeling and we can sell you the terminal and all that.
It really resonates with them. So that’s where we’re really taking the focus.
Operator: Our next question is from Jeff Martin with ROTH MKM.
Jeff Martin: Thanks, Bart. I wanted to ask you about your capacity in casino and gaming. I mean you look at Q4 was $11 million in revenue. I always thought of the business is $5 million quarterly in terms of capacity at your market share, that would suggest you’re near 100% market share now. And on top of that you’ve got pent-up demand to service. So I guess question number one is how much pent-up demand remains? Number two, do you anticipate your competitor or within your guidance, do you assume that your competitor comes back into the market? Or do you assume that you’re kind of the only game in town still for the balance of 2023?
Bart Shuldman: So what’s important for us, and we’re all doing a fair amount of travel to keep our ears to the ground to listen to what’s going on with our competitor, because we have ramped up our production. We are assuming that we’re going to maintain most of the market share through 2023, we do assume that it’s going to come down a little because it’s hard to imagine them not coming back. But our backlog is really high. I mean, people are walking up our production. So we have, and that answers the question, okay, why can you give some guidance, because we have some visibility that we’ve never had before. Our casino customers would buy and we would ship, we always had inventory. And now they’re replacing orders months ahead of time.
So we have some visibility to the demand. But we do project in the second half that it comes down a little and still feel that this sales and EBITDA numbers are good. With the fourth line that we put the jobs, our capacity can meet what we consider the demand to be today. We look at the history of the casino business, we do know that there was pent-up demand in the fourth quarter, because there was this shortage of product in the fourth quarter. There was a shortage, huge shortage of product in the third quarter. So we were able to make up some of that shortage. But we are seeing the demand continue. And we do think that the fourth production line should meet that demand. Like I said it pretty much it’s right now getting up and running. And we do believe that fourth line will let us meet if there’s continued demand.
And should there be more demand, which we’re not expecting, well, at least have that capacity. Because we are using that demand to put some printers on the ocean to eventually get to a stocking position. We don’t want to have to charge our customers to airfreight. So we are increasing the demand. You’ll see our inventory come up a tiny bit because we want to put some product on the ocean and start to service them out of our inventory versus airfreighting to them.
