Erin Kane: You bet.
Michael Preston: Thanks, Vincent.
Operator: Our next question comes from David Silver from CL King. Go ahead.
David Silver: Okay, great. Good morning.
Michael Preston: Good morning.
David Silver: Yes, I have a few admittedly scattershot questions here. First question would have to do with your balance sheet and in particular inventories. So your second quarter ending inventory balances sharply higher than a year ago and I’m guessing the units difference is greater than the dollar difference just given the shifts in product pricing. So certainly some of that is related to your upcoming turnarounds or which may be underway now, but could you just maybe talk about your comfort level with the inventories as of June 30? And then in in particular, did the buildup of inventory have a meaningful impact on your reported results in the second quarter? In other words, did it improve your unit margins? Obviously you produce more than your shipping. Thank you.
Michael Preston: Yes. No, I mean good question. So when you look at the inventory number as you point out we ended the quarter with $226 million of inventory and that was pretty flat relative to the first quarter Dave, about $1 million increase and up about $10 million since the end of the year. So again from a sequential basis not much of a change, but as you point out definitely a change from a year-over-year perspective and when you break that down, looking at roughly a $70 million increase in inventory from a year-over-year perspective. Raws were up in that $15 million range and we do have a lot of timing with respect to Q mean and based on the rotations and when we receive those. So that can certainly fluctuate from quarter-to-quarter.
But the balance is really in the finished goods and the work in process. And as you point out, as we head into the turnaround, the plant turnaround here in the third quarter, we clearly like to head into those with higher inventory balances. So we don’t disrupt sales and ensure continuity of sales to our customer base and so that’s critically important to us And as we roll through the turnaround in the third quarter here and through the second half as we come out of that, we would expect there to be a reduction in inventory and that is what we are planning for here in the second half. And then as we’ve sort of pointed out, we have been faced with some soft demand conditions for nylon and certain intermediate products tied to building and construction as well as consumer durables that’s also been a consideration.
And we continue to sort of optimize and navigate as we progress here in the second half, but we are expecting a reduction in inventory as we head through the turnaround in the second half of the year.
David Silver: Okay, great. Thank you for that. And I would like to ask you about your CapEx plans for this year. So no change in your targeted full year level, but I guess if you were just to divide that by four, the first half of the year you’re kind of trailing, yes, the pace at which your full year CapEx spend would play out. Can you just maybe talk about how you get from here to there, in other words, with the turnaround and everything and a number of diverse initiatives included in that somewhat larger spend this year? Just to — maybe just talk us through the back half of the year and how that spending might progress? Thank you.
