Joe Woody: You got it.
Operator: The next question comes from Drew Ranieri with Morgan Stanley. Please go ahead.
Drew Ranieri: Hi, Joe. Hi, Michael. Thanks for taking the questions. Just maybe on the cost transformation side for a moment and I understand that there’s a lot going on that we will eventually get details with. But just kind of looking back at the company, it’s been kind of a few years of talking of right-sizing the business and getting the expense structure in place. But I was just kind of curious how you can or if you can really kind of give more details about the growth side of the equation and really what you are thinking on that side, because it just feels like Avanos has kind of been a low single-digit grower. So I’d like to hear more about how you are thinking about growth improving and accelerating over the next 12 months, 18 months, 24 months?
Joe Woody: Maybe I could start with a little bit of growth and I think Michael will pick up on some more of the costs. But obviously, we want to set that foundation so that we get the drop-through and leverage. And if you go around and look at what’s going on in Chronic Care, you do see a lot of spots of double-digit growth. I mean, NeoMed almost hitting 40% consistent mid-single-digit growth really and the rest of it just to help the portfolio on a global basis. We are starting to see Pain come back. It’s limited right now by some of the supply chain issues. There’s probably still another $2 million or so a quarter going to be this year that would be backlog each quarter that we could sell through. And also, we know we have a line of sight to some strong acquisitions and good valuations like we have been doing before in the areas where we compete, so orthopedic pain and recovery, management, and then, obviously, we said, we are going to an emphasis on Digestive Health.
So we think that’s going to be enhancing it. And if you pull all that back in a normalized situation, we feel like we do have a mid-single-digit growing organic business, not going to show through, obviously, in the first half, but starting to show through in the second half, but really being powerful as we move into 2024 coupled with the balance sheet that we have as the size of the company. So I think putting that together is where we see a lot of strong value creation and when you see the cash flow now increasing, it gives us also medium-term opportunity to do some, what we would call, bigger things for us, not like the pharma kind of a scenario like you see in the market, but larger than the deals that we have been doing, and generally being, in many cases anyway, complementary to EBITDA and accretive growth.
So with that, I will let Michael maybe hit some of the costs.
Michael Greiner: Yeah. No. I would say, Drew, this is not a cost takeout effort. This is a — to Joe’s point, a portfolio rationalization/optimization effort. And oh, by the way, if we are going to that there’s some cost opportunities, and obviously, from a reporting requirement, we have got to get restructuring and other things. out of the table. But when you look at all our internal messaging, this has nothing to do with cost takeout. Those are just — that’s just a byproduct and a good byproduct for sure of what we are doing with our portfolio.
Joe Woody: Our intention to make further portfolio moves and maybe by the time we get to New York in June, there are some other things that help enhance the profile of our growth that are related there. So we are pretty excited about it.
