Jeff Hammond: Great. Great. Just want to dig in the organic guide. It looks like AMI is maybe included. So I’m kind of getting down one to up one. I’m just trying to kind of clarify that. And then maybe how to think about the organic growth for each of the segments embedded in the guide.
Milt Childress: Yes. Jeff, I’ll take the AMI question and then we can go back and forth a little bit on the segments. So with AMI, when we announced the deal, we had indicated that we paid approximately 13x EBITDA at $70 [ph] price. That gives you a general idea of what the run rate earnings for the business has been prior — or at the time of the acquisition. And so when you take into account this year, which is a partial year, we’ll have it for most of the year, but it’s not a full year and some onetime integration costs that will work their way through in fairly short order. That will give you a general indication of what we’ve included in the $260 million to $280 million EBITDA guide. So that puts brackets in capital the low- to mid-teens of EBITDA contribution for the year.
James Gentile: And in terms of your organic growth side, with the balance in Sealing and the sharp decline in the commercial vehicle OEM market, you can expect kind of flat plus or minus a little bit, excluding AMI and Advanced Surface Technologies as we said in the prepared remarks, the second half is expecting kind of a more brisk recovery, but we still expect some softness to persist through the first half of 2024.
Jeff Hammond: Okay. So go ahead.
Milt Childress: Weigh in with a little more clarification on what you’d like to hear about the segments in terms of guidance, Jeff.
Jeff Hammond: So okay. So yes, just so the midpoint of the guide says soft 1Q, that’s the bottom for AST. And then I think, James, you said brisk inflection in the second half. And then, I guess, the lower end contemplates maybe a slower recovery. Is that fair to say?
Milt Childress: Yes, you got it. And then to a lesser degree, what we see in commercial vehicle markets for the year and then just the overall economy, obviously. But the big — kind of the big swing factor is going to be the pace of pickup for our business in semiconductor. We’re already starting to see green shoots. You’ve heard it from other companies, it depends on where you play and where you’re positioned in the industry, and it will come — it will happen for us. We’re just working through this cycle for our business.
Eric Vaillancourt: Hi Jeff, Joe and I took a tour of our West Coast facilities a week ago. And we’re seeing some optimism that typically, during the peak, I’d say we’re making 20 parts a week and then through the trough we were making 10 and now it seems like we’re making 12 or 13 as an example. So you’re seeing that momentum and seeing customers haven’t purchased in a long time. So I think we’re starting to see the supply chain come back into balance where they’ve been destocking before. So we’re seeing a little bit of optimism basically in every facility we’re at, but it’s still going to be a while before we see a full recovery.
Jeff Hammond: Okay. Great. That’s helpful. And then just Sealing, pretty kind of start to decline here in 4Q. I don’t know if you saw some destocking or if that’s just the commercial OE piece. But maybe just how should we think about that persisting into the first part of the year, that kind of organic revenue decline?
Eric Vaillancourt: Mostly driven by the commercial OEM trailer builds that we started to see in the fourth quarter. And then we saw a general slowness just in industrial production really starting in December. October and November were actually where we expected. And then December, we started to see some fall off. But nothing significant other than I would say, industrial production and the commercial vehicle decline.
James Gentile: But the clear variance was this commercial vehicle OEM decline quarter-over-quarter.
Jeff Hammond: Okay, I’ll get you back in queue. Thanks.
Operator: Thank you. Our next questions come from the line of Steve Ferazani with Sidoti. Please proceed with your questions.
Steve Ferazani: Morning, everyone. I guess I wanted to follow up a little bit on the previous question. Just for 4Q, the guidance had been 2023 sales would be relatively flat to 2022. So obviously, your 4Q sales had to have disappointed internally. Can you specifically point out was it primarily commercial vehicle, were there other places where you were disappointed.
Milt Childress: Well, it really is commercial vehicle OEM. And then the continued softness in semiconductor and AST. Although at the time of our Q3 call, we did anticipate that we would see some sequential improvement, which we did see in the fourth quarter. And the commentary around guidance that we’ve made in Q3 is that we anticipated being at the low end of our previously stated guidance range. And when you take into account the $6.4 million of…
Steve Ferazani: I’m just referring to sales, Milt, I’m just referring to sales.
Milt Childress: Okay. Yes, I’ll stop then.
Steve Ferazani: And then back to the point of — so if I take out AMI, I guess, to the previous questions, you’re looking at relatively flat ’24 again, where do you see some — the upside purely on an earlier recovery or semi or where else do you see some potential benefits in ’24.
Eric Vaillancourt: We see some upside in space. Of course, the biggest thing will be the semiconductor rebound that will be the biggest thing by far. But we see some optimism in pharma. It seems like some of that’s, I would say, recovering from the bottom as well but it’s going to be slow growth.
