John Drabik: Well, so we’re about 75% locked for the year in our total cost positions and that’s inventory on hand and what we’ve already experienced. So we’re in a pretty good shape for knowing what’s coming down at us for the rest of the year. What we are seeing is a little bit of headwinds in some of these metals really on the battery side. So zinc, lithium, we’re also seeing energy, which energy impacts our own plants, as well as some of the conversion costs for those metals. So all of that’s a bit of a headwind for us as we’re building this next round of inventory for the back half. But we’ve seen ocean free moderate. Now we had kind of anticipated some of that in our outlook. So it’s not a big upside to what we were originally calling, but it’s still positive.
And then I did call some outperformance in the first quarter, warehousing and distribution, which was mostly in North America, and that also was a little bit lower than we had anticipated. So a positive there.
Carla Casella: Okay. That’s great. Thanks.
Operator: The next question is from Hale Holden from Barclays. Please go ahead.
Hale Holden: Good morning. I just had two quick ones. You called out in the script negative headwinds from higher factoring rates. And I was wondering if you could sort of give us a sense of what that looked like and if it changes your view on whether factoring is an attractive source of cash?
John Drabik: Yes, that’s a good question. We called it out because that factoring goes through SG&A. And it is kind of variable rate, so we are looking at whether we can optimize that and I think there’s to the extent that we use it, it might be less. We’ll also look to use pro. We have multiple programs, we’ll try to find the ones that are the best for us, but it is something that we’re evaluating.
Hale Holden: Great. The second question was, I was wondering if you could tell us which bonds you bought back in the fourth quarter. I can wait for the queue if you need me to.
John Drabik: Let me follow-up with you on that one, I get you the details.
Hale Holden: Great. Thank you very much.
John Drabik: Thanks, Hale.
Operator: The next question is from Brian McNamara from Canaccord Genuity. Please go ahead.
Brian McNamara: Hey, good morning, guys. Thanks for taking the question.
Mark LaVigne: Good morning.
Brian McNamara: I hate you beat a dead horse on the inventory levels. You guys mentioned the stocking at retailers I’m curious which business are channel inventories in better shape at the moment, auto care or batteries? And then secondly, I’d be curious your opinion of consumer inventory in terms of pantry loading or lack thereof in both businesses? Thank you.
Mark LaVigne: No, we’re happy to revisit this obviously it’s an important point. I think from a consumer standpoint, we continue to see consumers buying for immediate needs. So we do not anticipate nor are we seeing that pantries are loaded from a consumer standpoint. They are migrating either to larger pack sizes or smaller pack sizes depending upon the individual consumer and value means something different to most consumers. But in the overall research that we’re seeing, we are seeing that a very high percentage of consumers are buying for immediate need. Retailer standpoint, when you go October, November, December, it’s a critical quarter for batteries. You tend to see inventory levels shift quite a bit during that time period.
