Kieran O’Sullivan: Thank you.
Operator: Our next question is from John Franzreb from Sidoti. Mr. John, your line is now open. Please go ahead.
John Franzreb: Good morning guys and thanks for taking the questions.
Kieran O’Sullivan: Good morning John.
John Franzreb: Just to go back on your thoughts on revenues for the year. I guess when I first started, I thought that the €“ your non-transportation revenues would be up for the year. But now I am wondering with maybe distribution shortfall, maybe lessening into the second quarter. Are you looking at a potentially down year in non-transportation?
Kieran O’Sullivan: No, John. We would see it just across those non-transportation markets. We would see growth in medical and in aero and defense. What we are seeing is the mixed results in industrial and inventory corrections in distribution, which is impacting volumes.
John Franzreb: Okay. And also in your prepared remarks, you mentioned something about potential pricing from your customers. Could you talk a little bit of what you meant by that?
Ashish Agrawal: John, we haven’t seen anything yet, but we are keeping our eyes and ears open on what’s happening on that front. If there is softening of demand, then there is a potential that we could see some pressure. And as I mentioned earlier, we would want to stay ahead on the supply chain side to be able to offset that with any material cost favorability that we might be able to get.
Kieran O’Sullivan: John, I would tell you, we are very focused on the alignment with our supply side costing, making sure that’s in line as we go forward to protect our margins. In the current environment holding prices as well as pushing some smaller price increases through €“ in certain parts of our business.
John Franzreb: Okay. So, you were able to push through pricing during the recovery and you are worried about pushback, I guess mostly in the transportation market, should there be a weakening. Is that a fair assessment?
Kieran O’Sullivan: Yes. I would say in transportation, but I would go a little bit broader in the industrial distribution space as well. And John, one other comment is just to make sure we are all calibrated is cost pressures have not gone away yet. They are still there. They are still real for companies.
John Franzreb: Got it. And then I will go back to an earlier question about how the Q1 lines up versus Q4. I normally would think that seasonally, it would be stronger. I just want to make sure that, that’s still the case on a normalized basis, or is the aforementioned revenue problems result in something that’s more flattish or even down versus Q4?
Kieran O’Sullivan: So, John, our comments were that you can expect Q1 sales to be roughly in line with where we finished Q4 because of the semiconductor shortage and some adjustments in inventory as it comes to distribution or industrial markets. But again, we said very clearly an improving trend for the rest of the year. We feel very good about our medical and aerospace and defense markets. And transportation is a little bit of €“ is it flat, is it up a few single digits, that’s what we are trying to gauge. And to Ashish’s point, we will have a better €“ we get a wide guide, but we will have a much better sense as we get through the first quarter with how the macroeconomic situation is evolving.
John Franzreb: Prefect. Thanks a lot and appreciate taking my questions. Thanks.
Kieran O’Sullivan: You’re welcome.
Operator: Our next question is from David Kelley from Jefferies. David, your line is now open. Please go ahead.
David Kelley: Hey. Good morning guys and thanks for taking my questions. Maybe a question on the supply constraints, but from the angle of commercial vehicles, which I believe you noted in the PowerPoint would likely have an impact on the first quarter. So, can you talk specifically a bit more about visibility to your commercial vehicle exposure? And do you also expect those constraints to ease with kind of broader transport exposure as we work through Q1?
Kieran O’Sullivan: So, Dave, good morning. The softness we are seeing in Q1 is pretty much similar to the softness we had in Q4 due to the semiconductor shortage. And again, I want to emphasize that’s going to get fixed by the end of the first quarter. We are on it. We feel like we are on a good track with that. And then to your visibility on the commercial vehicles side, we feel good about the first six months of the year. I would tell you, even some of our customers out there feel good about the rest of the year. We are just waiting to see the first six months evolve and take it from there.
David Kelley: Okay. Got it. Thank you. And just you noted the strengthening EV platform wins. If we take a step back, we are seeing some OEMs cut EV pricing in the U.S. The U.S. EV incentives were just adjusted that now includes more models. So, can you talk broadly about the bidding opportunity in electrification, if you are seeing a meaningful uptick there in the recent months from customers, and you have got the target out there to increase revenues, but maybe talk about the cadence over the next couple of years, how you are expecting momentum to unfold in electrification?
Kieran O’Sullivan: Yes, David, I think as we all know, on the transportation side, pricing pressures in the competitive side of it is always high. We haven’t seen any meaningful change. And I imagine on the electric vehicles, when your big dollar items like displays and other things that go in there, you are going to experience a lot of pressure. Our products tend to be smaller dollar value, highly engineered and customized to the customers’ requirements where, as you know, the dependability, quality and innovation is important. So, we feel pretty good. Our focus more so is strengthening the portfolio. With the small acquisition we have done in Switzerland, we see that as a good step forward. But we are also very excited about eBrake applications and other things we have been developing around moderate current sensing that we think are going to build nice momentum for us in transportation markets.
And also we are looking at how do we do move that into other mobility applications as well.
David Kelley: Okay. Got it. Thanks guys. Appreciate it.
Kieran O’Sullivan: Thanks David.
Operator: Our next question is from Hendi Susanto from Gabelli Funds. Hendi, your line is now open. Please go ahead.
Hendi Susanto: Good morning. Good morning Kieran. Good morning Ashish.
Kieran O’Sullivan: Good morning Hendi.
Ashish Agrawal: Hi Hendi.
