Operator: [Operator Instructions] The next question comes from Daniel Stauder with JMP Securities. Please go ahead.
Daniel Stauder: So just first one would be on gross margin. I mean, you talked about both today and during your Analyst Day and you’re almost there right now with earnings, but you talked about 59% for the full year. But really just looking out, I just wanted to ask about how do some of these new products play into that? I think you had talked about them being accretive to margins upon full ramp. But I just wanted to ask, post launch of some of these new products in the next 12 months, how long will it take to really add to that gross margin and add some even more power there.
Michael Greiner: Yes. So I think you’re referring to a couple of launches we have in DH, plus, obviously, adding the Diros technology. They will be, over time, Daniel. They will be additive to gross margins, which could provide some upside to our 60% to 61% that we have previously disclosed, but we also have those inflationary headwinds that we described, which some may argue were conservative that we shared on Investor Day, it was over 400 basis points of inflationary headwinds. So we still feel very comfortable the 60% to 61%, but as you see the numbers already roll up at 50 to 59 and what we’re looking at, you can make other assessments that perhaps 60 to 61 is too conservative. But we’re comfortable with that range right now until we see how the inflationary environment in Mexico plays out over the next 12 to 18 months and ensuring that these launches occur successfully and that zero is what we strongly believe it will be for us.
Daniel Stauder: And then just one more for me on pain management. You mentioned that the softness was due to some supply chain issues. But I really just wanted to ask about the underlying procedure demand here. How does that trend throughout the year? And then as far as the supply challenges, what was the main issue there? It seems interesting to us that the headwinds were so broad based. So any specific thing you can would be helpful.
Joe Woody: Underlying is trending up, and we’re in a situation with backorder where we’re sort of having to allocate to our top 200 accounts, and we can’t take advantage to your point, of the upswing in procedures. We think that’s going to close out as we move into the fourth quarter, really more towards the mid part of the fourth quarter and as we go into 2024, so we can take advantage of those, which is why we’re feeling a little bit more positive around that. The actual areas are around chips and components in some of our CRGs some of the supplies that are part of the COOLIEF or the RF procedure. And then we have a catheter issue that we’re dealing with on a supplier to really affect the ON-Q growth in particular. So it’s really holding us back.
We’re stated by it. We worked our way through it. We again, have said, we think we’ll be through it by the end of the year, and that’s when we’ll start to jump in and take advantage of some of this natural procedural growth, which is there.
Operator: This concludes our question-and-answer session. I would now like to turn the call back over to Joe Woody for his closing remarks.
Joe Woody: Thank you. I think everybody can get the feeling that we’re focused on execution and delivering this plan and all the things that we outlined at Investor Day. So this year, already, we’ve executed on product exits, divested our RH business, acquired what we think is a valuable technology in Diros and approved an additional share repurchase program, and we’re delivering on most of our financial objectives. Our feeling is these results have established a necessary foundation for us to deliver our midterm financial commitments. We’re confident that the transformation priorities and our market-leading portfolio in attractive markets position us for sales growth and the margin expansion that we’re talking about, and of course, meaningful free cash flow generation. So I know we’ll be talking to a number of you going forward. Thanks for attending the call and your continued interest in Avanos.
Operator: The conference has now concluded. Thank you for your participation. You may now disconnect.
