Elias Sabo: Yes, we generally like to be conservative. It’s hard for us to own a company that’s not hard. We love owning a company that grows 50% a year. But it’s hard for us to forecast that that will continue. And so, there’s nothing right now, Matt, in the first two months that suggests that that isn’t the case. Pat can speak to the January and February results and how they were relative to last year, but we embedded in our guidance is that Lugano would come down materially from the growth levels that we had in 2022. But still be a good strong double-digit grower. Now Pat in January and February, I think it’s
Pat Maciariello: January very strong, February is coming – beginning of the year is fine and is in line with exactly what Elias was saying, if not a little better.
Elias Sabo: Yes, so there’s been no slowdown Matt. In that business in January, February from where we exited 2022 and what the – Q4 year-over-year was. But again, we just – we would rather be conservative and plan for that business to grow, but grow at a more reasonable rate and then over deliver and have that help carry our results going forward.
Matt Koranda: Okay, makes sense. And then just last one from me. $170 million in proceeds from ACI divestiture, just if you could put a finer point on how much debt repaid after sort of fees. What does that do to pro form a net leverage kind of post debt paydown? And then just – you mentioned on the working capital front like plenty of opportunity to flush inventory. I think that’s maybe underappreciated among investment community? So maybe just if you could help us kind of shape up the potential inventory flush that you have this year and how much that contributes to cash and where perhaps that leverage could shake up by the end of this year?
Ryan Faulkingham: Yes, sure Matt, happy to assist with that. Yes, so the $170 million proceeds we used to paydown revolver as we mentioned. And there is there is a profit allocation payment that will be made on that gain. So that will be net against that. And that amount is not calculated yet it’s in process. So yes, a couple of tenths of turn essentially is the effect of that and you can kind of do the math on what those proceeds would do to our leverage. And we highlighted – so to your second question, we highlighted in Investor Day, the retained cash that we have in the system now and 2023, we expect to be at or above 2022 levels. And we had said in the Investor Day deck that we had just about $75 million of retained cash pre-working capital.
So as we think about that amount next year and then as Elias highlighted some of our working capital coming back in it sort of implies north of $75 million. Now as I think about inventory levels we had used last year about $200 million throughout the year of working capital. A good portion of that was inventory. Some of that though was to support Lugano. And as Lugano continues to grow, as we hope it will, that business will still need some inventory. So, we don’t see that inventory coming back. Some of that inventory was just needed to support 14% growth we had last year. But then there is another roughly third of that, that’s excess. And that’s what we expect in addition to the retained cash I mentioned that will come back into the system.
So hard to put dollars on that for you, but I think a good reasonable amount would be to assume same level of retained cash, hopefully no working – capital build next year. And then, roughly third of last year’s inventory use coming back as cash conversion in 2023.
