Mike Yates: Linda, good question. I think — and it’s a good observation. Inventory at Outdoor is a little higher than we had hoped for against directly tied into the fact that North American retail, our wholesale partners, aren’t taking as much, right? And so we have a little more inventory on hand than we hope to there. But we’re working through that. That’s a priority here, as I mentioned in the prepared remarks.
John Walbrecht: And through Adventure as well, Linda, right? I mean, when you look at the overall businesses, we didn’t expect to see the headwinds in either Outdoor or Adventure that we experienced.
Mike Yates: They’re a little closer. John is correct, but they’re a little closer to the target, right? And the miss, as you’re pointing out, it’s a little — a little stronger at Outdoor.
Linda Bolton-Weiser: So I mean, I know that this is not the same channel as what you’re supplying into. But I mean, when you look at like Walmart, for example, I think their inventory in the most recent quarter was actually flat year-over-year. Like they’ve declared the inventory reductions kind of completed. So is there just something different going on among your retail customers that’s so different from, say, a Walmart? Like can you just like talk about it? Is your inventory up still year-over-year but just up less at retail? Or can you give us more color on that?
John Walbrecht: Smart. I would say that our retailers aren’t exactly similar to Walmart, but I think they would all tell you that over the last three to six months, they have successfully moved down their inventory towards their targets and their new open to buys. And that’s why, as we said in the — looking into the future, we can’t tell you by exactly every channel, every geography, but we expect the businesses to see growth now that the inventories have come down, right? And that was — that’s what impacted Q4 so much was big retailers using — trying to manage every ounce of inventory at the cost of open to buy.
Linda Bolton-Weiser: So you see that growth in second quarter or not until third quarter 2023?
John Walbrecht: I think we expect it to start accelerating in the second quarter, but we do think that the second half of the year will be stronger .
Mike Yates: That’s correct.
Linda Bolton-Weiser: Okay. All right. Thanks very much.
Mike Yates: Great. Thanks Linda.
Operator: Thank you. Our next question comes from the line of Jim Duffy with Stifel. Please proceed.
Jim Duffy: Thanks. Hi, John. A quick one on the cash flow. Mike, what’s the gap between the $60 million EBITDA and the $30 million to $40 million cash flow guide? I guess I’m surprised you don’t see working capital opportunity in 2023.
Mike Yates: We do see some working capital next year, though we’re going to be a higher tax — cash taxpayer, right? We only have $18 million of NOL left, right? We utilized over $40 million this year. So that’s the main driver.
Jim Duffy: Okay. And then next question, I guess, for you, John. With Neil coming on board, you spoke to where he’s going to focus his efforts with the Black Diamond brand. Maybe you could talk about what the incremental bandwidth that provides to you and Aaron, what are the areas that are going to attract your attention and where do you see the opportunity for greatest return on your incremental bandwidth?
John Walbrecht: Yes. I think as we look to 2023 and beyond, this being a year that we’re not as focused on M&A, which obviously was an area of our bandwidth in the past, is really accelerating the business, new NPI Innovate and Accelerate side along with the operational plans and strategic planning of accelerating the other categories, which we still believe have strong growth.
