Tom Salmon: I know what you’ve referred to. It was very interesting. In what is our fiscal fourth quarter, the calendar third quarter, there was a real change or perturbation in demand that last week in August and in September. It was quite pronounced. And you’ve heard that referenced by a number of other companies inside the space. And the reference point in terms of the ongoing dynamic backdrop that we’re facing customers €“ our end customers, specifically are just being really cautious in terms of what they’re carrying inventory, how they’re actually measuring and metering consumer demand. So there’s not going to be a lot of fluff in the supply chain in terms of excess inventories, given the rationale around that softer customer demand outlook for what is our fiscal first quarter calendar fourth quarter.
Mike Roxland: Got it. And then just one quick question. This quarter and last quarter you mentioned mix changes with Engineered Materials trying to “mix up€ certain categories. Can you provide us a little bit more color on what you’re trying to do in EM aside from reworking distribution?
Tom Salmon: Inside our Engineered Materials business material science is the core competency of what we do, the ability ultimately to secure more multilayer film structures to take advantage of that material science capability, standing materials making them more sustainable while not compromising physical properties is again a core competency that applies to that business and an area that we continue to seek to grow and to pivot toward. And it’s consistent with the capital investment that we’re making and applies frankly not only inside the food categories, but also applies to the transportation films as well.
Mike Roxland: Thank you. Looking the quarter.
Tom Salmon: Thank you.
Operator: Our next question comes from the line of Gabe Hajde with Wells Fargo. Your line is now open.
Gabe Hajde: Hi, Tom, Mark, Dustin. Good morning.
Tom Salmon: Yes.
Gabe Hajde: A little bit late in the call. I did want to dig in a little bit on HH&S and there’s been a lot of I don’t say noise in the numbers in terms of obviously pandemic-induced benefits, but also you guys have intentionally pivoted the portfolio a little bit away from diaper into adult incontinence and fem care. I’m just curious how far along you are in that — that’s sort of moving at this point? And then thinking about diapers as a semi-discretionary or somewhat convenience item any input from your customers in terms of expectations for — I know we’re not going to talk about price strategy, but volumes kind of going into the next fiscal year. And then profitability was a touch short from what we were looking at. And could it have just been us mismodeling things? You called out recovering some price/cost in fiscal 2023. Is that contractual in nature, or is there anything in there that’s just I guess out of pattern that you can call out for us?
Tom Salmon: Thanks, Gabe. The ongoing efforts to pivot more of our portfolio to adult incontinence, premium, hygiene, premium baby continues to be well underway and we’ll continue on that path as we look to secure more and more share in that space. For our fiscal Q4 the baby care business was actually positive and our hygiene products were stable which frankly offset what was the difficult comps that we faced in masks and wipes and drapes and gowns from a year ago that were benefited from the pandemic along with some of the inventory drawdowns that we spoke of at the end of the pandemic. We would say this though from a performance perspective on earnings it was actually in line with our expectation. And it’s more of a function of mix and lag in price recovery tied to the contractual terms with our end customers, specifically, on non-resin costs were the primary drivers.
And we anticipate sequential improvement from an earnings perspective in fiscal Q1 and we expect to get back to a price cost positive position in our fiscal third quarter which is the June quarter 2023.
