James Picariello: Thank you.
Operator: Our next question comes from the line of Joseph Spak with UBS. Please go ahead.
Joseph Spak: Thanks. Good morning, everyone. I just want to make sure, coming back to Colin’s question, I understand some of the moving pieces versus sort of just how you bucketed things, I guess, prior. So before the divestiture was in the guidance, but it wasn’t breaking out. So then if we just look at sales now, if we sort of add divestitures back into traditional organic, you get 215 versus 240 prior. So organic is lower in the rest of the business. But then the – you do the same thing on EBITDA, the conversion is actually higher. So, I guess, I just want to understand the conversion, that’s performance or some segment mix-related factors that are driving that.
Timothy Kraus: Hi, Joe, it’s Tim. It’s both. So obviously there’s some mix in there. The easiest one to think about is Ag, right? With Ag being further down, we’re picking it up and then it is between segments as well. But yes, there is also performance in there as we continue to drive the efficiencies and performance across the company.
Joseph Spak: Okay. And the lower organic is what you mentioned earlier about some softening in Ag?
Timothy Kraus: Yes, that’s a big chunk of it.
Joseph Spak: Okay. And sorry just to clarify you – that you’re assuming this is a second-quarter closing, so that $55 million top line impact is a back-half number, effectively?
Timothy Kraus: Correct. Yes, it’s a back half.
Joseph Spak: Okay. Just on power technologies in the quarter, I think revenue and EBITDA both looked a little bit stronger than we thought. It looks like in your walk it was EV driven. So is – and I think as you’re maybe we were just alluding to that’s I think the one area where you do have some light vehicle EV exposure. So can you just talk about how you expect that to progress through the year?
Timothy Kraus: Sure. So you’re talking about on the investment side or just on the current production side?
Joseph Spak: Well, I guess, just the EV business within Power Tech, both on a revenue and data basis.
Timothy Kraus: Yes. So we see it continuing to be stable to up. Our biggest program is the BEV3. So the encouraging remarks from GM data, they had a good fourth or first quarter around EV and battery production. So that’s obviously reflected when you look at the Power Tech walk on EV. We continue to see a better than last year, so up on – in terms of volume and we think that will convert through on the bottom line.
Joseph Spak: And just because you’re providing to the pack and obviously they’ve had some challenges on that pack and I guess really a lot of automakers have. Is that a longer lead time, shipment, and revenue for you versus like if we’re looking at production of EV vehicles, or how should especially sort of relative to maybe some other products in that business?
Jim Kamsickas: Really good question. This is Jim. That’s good. Good morning. This is Jim. That’s a really good question. No, the lead times aren’t any longer. I would call it as it is very much precision stamping and precision fluid management and fluid engineering side of it, but it doesn’t extend the lead time. It’s a very good question. It’s not tied to the battery like we’re all associated with. So to further Tim’s point though, in that construct the way we’ve designed, engineered the product and therefore also established our processes and equipment, they’re quite flexible for not just the battery cooling that we tend to talk about in all such of this, but also our electronics cooling. So just for the full audience to consider, there’s more to that business.
You’re mentioning electrification, so I’ll talk about that. But if you think about all of the electrification cooling that’s required with IGBTs and other things associated with inverters, so on and so forth. So, we’re flexing the capital, and like Tim said, and I think we put into the numbers, we feel like it’s relatively stable from an outlook this year.
Joseph Spak: Okay, thanks for the color.
Jim Kamsickas: Thank you.
Operator: Our final question will come from the line of Dan Levy with Barclays. Please go ahead.
Trevor Young: Hi, Trevor Young on for Dan today. Thanks for taking the questions. First, I guess, I wanted to ask just a little bit more clarity on what you mean here with that and what’s going on with the true-ups around commodities. I guess, just conceptually it’s a little confusing to me that the lower steel prices are leading to a bigger commodities tail. And when I get that it would reduce recoveries, but just in general, is it the contracts that you’re in that are holding your steel prices higher than spot rates would imply or is there anything else going on there that I’m missing? Thanks.
Timothy Kraus: Yes. So there’s two things you got to remember when you think about how the commodity mechanisms work. Typically we’re only covered for 75%. So on the way up, we tend to get hit, on the way down we tend to recover some of that, and then there’s a lag in that. So as we see commodity prices come down, we tend to be three to six months difference between when we have to give that back to the customers. So you’re seeing a combination of the two, which is why we’re having higher givebacks right now on the top line. But you’re not seeing all of that flow through on the bottom line. So it’s a combination of just the timing of it and then the fact that we’re only giving back 75% of those lower commodity costs.
Trevor Young: Okay. Alright. That’s helpful. Thank you. And Tim, as a follow-up, your CapEx guide for $450 million on the year assumes a $50 million year-over-year decline. It looks like you fully realized this in 1Q. So I guess, I was curious why we shouldn’t expect the CapEx spend declines in 1Q, that you noted to be related to lower launch costs. Why we shouldn’t expect that to continue throughout the year, or at least to some extent?