Jon Block: Todd, just the $5.3 million to $5 million leverage for year-end ’23, and there’s a lot of reasons in the slides, why the cash requirements stepped down in ’24. I think I get that, but — is there anything from a covenant perspective to be aware of? Any step downs in 24 or 25 on the leverage ratios to call out? And then the second question, I’ll ask about the front. Just Seresto down Q-over-Q, Jeff, I don’t think it’s been down 3Q to 4Q for the past 4 to 5 years, at least since I’ve got the breakout. So can you talk about the product share. And then anything new with the EPA on the horizon, do you expect resolution with the EPA in 2023?
Todd Young: Jon, the leverage covenants are over 7 times. We don’t think there’s any issue on that going forward. We continue to feel confident in this guide and EBITDA expanding in future years.
Jeff Simmons: Yes, Jon, on Q4, as you know, the seasonality, this is a much smaller quarter for Seresto. It’s off season. We think the economic dynamics and the recessionary pullback on the retail segment where people went more for treatment and prevention. That was definitely a big driver. Retailers stepped down in inventory. It was a little trade down and maybe a move over to the vet clinic, but not substantial. So we’ve done a lot of study into this. I think the key lead indicators that give us a lot of confidence as we come into the season and the early indicators in the year are positive as we look at sequential change is 1 as we move into the season, Seresto’s brand loyalty, the retailer and e-com loyalty to this product, we’ve got as many as much physical availability, as I mentioned, and more retailers, probably more end caps going into this season as ever.
And so I think it was a lot of economic-driven off-season, smaller quarter that caused the bigger percentages. Now we’re going to have some of these same pressures across the bigger notion of our total business. So we’re going to see some step down, but as a whole, again, a lot of confidence in Seresto. I would highlight that as we look at the EPA, yes, we’re having a very constructive positive dialogue — we do expect to report as we look at the overall working arrangement with the EPA on how we can improve brand stewardship and oversight of this product is something that we’re endorsing and looking at as FDA products like the EPA. So look for us to have an outcome with EPA, yes, I would see it in ’23. And again, the dialogue has been very collaborative and constructive and something that we’re encouraging.
And again, we see Seresto medium, long term being a key product that will help drive the strength and profile of this company.
Katy Grissom: Thanks. We’ll take the next caller. And I realize we have a few in the queue. We’ll continue to answer questions. We might go a little bit over the hour.
Operator: Our next question comes from Elliot Wilbur from Raymond James. Please go ahead. Your line is open.
Elliot Wilbur: First question for Jeff and or Todd. I heard the number you called out specifically for competitive pressures in the fourth quarter. But if you mentioned the full year impact, I did not catch those. So I was wondering if you could detail what the full year impact was of the competitive pressures that you have cited on a couple of occasions over the last couple of calls. And then specifically, Jeff, how are you thinking about the forthcoming launch of mab for osteoarthritis in the U.S., given what you’ve seen to date in Europe. And I understand the product labeling is slightly more favorable in the U.S. than Europe, but just trying to sort of balance that versus what seems to be a growing desire on the part of vets to reduce or control disintermediation within the U.S. vet channel?
