So we’re actually opening up more global markets for our automation business. And we do feel this is a line of business that’s got strong growth potential going forward, and we’re investing accordingly. But you’re right, is size-wise relative to the scale of what we’re doing in the Motion Control, it’s definitely a smaller business, but it has much higher growth potential so we’re treating it as a kind of a growth trajectory product line, and in particular, getting global distribution in sales of it. Our Force & Motion Control and our Engineered Components businesses, the outcome, MCS, or Motion Control Solutions are already globally based in global distribution for those, but automation is a catch up. But given the end customers are different for those product lines, we’re kind of bringing the go-to-market strategy through separate channels because it’s just more effective to pick up opportunities.
So we have seen some really nice pickup both in orders and sales there. As you know, that business has got tremendous potential given the pressure for automation that exists globally. We just have done a really good job of taking the product lines that we have acquired from the dramatic acquisition that forms that business. We have done a good job of commercializing them globally. And we’re doing a much better job since the third quarter of last year of putting those teams in place to leverage that. And we plan on doing that very aggressively going forward as a growth driver, which are right material because it size-wise won’t be as material to the overall picture.
Myles Walton: Okay. And then just a couple of cleanup ones if I could. I think, Julie, you said $24 million of interest expense. Is that right? And is there an idea you should maybe term out the revolver?
Julie Streich: So the $24 million is the right number. And we were quite fortunate in that Michael Kennedy, our Head of Tax and Treasury here, did some repositioning of the portfolio last year before interest rates started to pick up. So I think we’re — while we don’t appreciate the higher interest expense, I think we’re comfortable with the terms we have right now. And if an opportunity would present itself to reduce the overall interest burden for the company, we would certainly look at it. But I think we’re actually fairly well positioned in terms of the renegotiation we did last year and the repositioning of that revolver.
Myles Walton: Okay. And then last one, sorry. On the cash flow, I guess, I’m still a little unclear the $50 million miss in the fourth quarter free cash flow was the primary driver? And also the outlook for 2023, I think your D&A is $50 million above CapEx. So why would the conversion not be significantly better than 100%, given what happened in 2022 and that conversion?
Julie Streich: Sure. No, it’s a good question. So the Q4 performance was, I mean, was disappointing to me. We had intentions of driving down our inventory at a greater rate. This is all an inventory question that we’re dealing with right now. And for a variety of reasons, the inventory did not come down at the rate we expected. What I would say is that in the back half of the year, both the second, or excuse me, both the third and fourth quarter delivered well above 100% cash conversion. So that gives me confidence going into 2023 that we’ll be able to continue on that trajectory. We are laser focused on the inventory drawdown and managing that process now. And to your point around greater than 100% cash conversion, we have approximately, I would love to see us get back up to the levels we were at historically, which is above 100% cash conversion.
What we need to do is be thoughtful about the time line over which the inventories will come down. It’s not going to happen overnight. It will work down over the course of the year, and we’ll ultimately see what that delivers us from a free cash conversion.
Myles Walton: Okay, all right. Thank you.
Thomas Hook: Thank you, Myles.
