Clifton Pemble: Yes, I think, Erik, one of the factors to consider is that the timing of new product releases, both last year and this year, will be a factor in creating noise between the quarters. This year, Q1 was still marked by a relatively easy comp, especially in fitness, with our new product introductions that happened last year towards the end of Q1 into Q2. So definitely, that will create a different dynamic in Q2. And then just generally, as we look out for the rest of the year, the timing of other new product introductions is in our minds in terms of how we look at the whole year.
Erik Woodring: Okay. And then, Doug, I know you like to have a kind of a rainy day slush fund. Again, it’s always best to have liquidity when no one else does. And I appreciate that, but you have over $3 billion of net in gross cash, probably not earning your cost of capital today. Just can you help us understand why you wouldn’t put more of that to work? Obviously, on an organic basis, you’re seeing a ton of success. Why not complement that with either accelerating buybacks or more work that you can do organically? What stops you from taking those kind of actions?
Douglas Boessen: Yes, good question. As it relates to cash, we do have our priorities for cash being reliable dividends. As you mentioned, our investments back in our business, whether for manufacturing facilities or just strengthening our business for the growth that we have looking at strategic acquisitions, such as JL Audio and then share repurchase. It relates to share repurchases, that is depending upon your market conditions, business conditions. I do want to remind you that we were in the blackout for most of Q1 from a standpoint. But our priorities for cash are consistent with what they’ve been for a while.
Operator: Next question comes from the line of David MacGregor from Longbow Research.
David MacGregor: I guess I wanted to ask around inventories, but maybe focus around channel inventories, if you will. And can you talk about sell-through rates across your various lines? And as you think across these lines, where are channel inventory levels, may be a little higher or a little lower, just adjusting for seasonal patterns, of course.
Clifton Pemble: We think that channel inventory is really clean and healthy at this point. We don’t see any concerns. In terms of overall inventory retailers and across our businesses, frankly, are not placing big bets on inventory. So when they buy in, they know that there’s customers there that want it, and the availability of product is much better now than it has been over the last kind of disruption of the last 4 years in supply chain. So we feel very good about it. And we also feel like the registration rates are very consistent with the quantities that we’re selling in.
David MacGregor: And if I could go back to the question on inventory, obviously, a substantial work down inventory this quarter, and you alluded to the strength of the business and just a lot stronger than maybe you had expected. What are the implications there for sort of second and third quarter margins as you rebuild that inventory? I would guess you get a better fixed cost absorption, better operating leverage. Should we be modeling a stronger margin performance as a consequence of inventory rebuild?
Douglas Boessen: No, that’s not really a big factor for us. But there is the part where you’re mentioning there, just basically leveraging some of our overheads do production, but that’s just a part of us managing our overall cost and having a lower cost structure.
David MacGregor: Okay. And last question for me, is there any way you can sort of provide some color or granularity around how much of the growth right now? I mean, setting aside auto OEM, but the other 4 segments, how much of the growth rate now would be price versus unit growth?
Clifton Pemble: I think it’s mostly driven by higher unit volumes.
David MacGregor: Congrats on all the progress.
Operator: Your next question comes from the line of Jordan Lyonnais, Bank of America.
Jordan Lyonnais: I appreciate that it’s a softer comp in the quarter, but really strong growth in Europe and Asia, too. Are you expecting those markets to continue on this trend and you see a recovery?
Clifton Pemble: I think one factor to consider geographically is the impact of higher auto OEM volumes on those regions. So when we produce and sell, for instance, domain controllers out of Europe, that tends to increase disproportionately the revenue there. So there’s some puts and takes because of that. But generally, our wearable products performed very well in Europe. Asia has been influenced by auto OEM some, but we also have some tailwind with — excuse me, some headwind due to currency issues in the region as well. So there’s just lots of factors. There probably isn’t any one that we could point to and try to draw conclusions about it.
Operator: [Operator Instructions]. And your next question comes from the line of Noah Zatzkin from KeyBanc Capital Markets.
Noah Zatzkin: Maybe just on the marine segment, strong performance there. First, hoping you could provide kind of an update on how JL Audio is performing post acquisition relative to expectations now that we’re a couple of quarters in? And then second, if you could remind us what the full year benefit from JL Audio is embedded in the marine guide? And then I was just hoping to get your thoughts on the state of the marine end market in general, given what looks like pretty strong organic outperformance this quarter versus the industry?
Clifton Pemble: Yes. I think generally, we would say our JL performance was in line with what we expected. I think leading right into that question about the overall state of the market I think I would say the marine market has kind of stabilized. It’s historically not a huge growth market, as you know. So I think we’re kind of past some of the ripples that we’ve seen over the last few years. And there is certainly some issues out there right now with boat inventories that people have been talking about. But in general, those have not impacted us in any kind of significant way. And I think on a full year basis, Doug?
Douglas Boessen: Yes, sure. As it relates to JL Audio, basically, we expect JL Audio on the revenue line to be about 15% of the total marine business.
Operator: We have a follow-up question from David MacGregor from Longbow Research.
David MacGregor: I guess there’s been some talk just in the macro lately of consumers getting more cautious and mixing down, and then we get these rather disappointing consumer confidence numbers here today. Just how you — obviously, you’ve got a lot of innovation in the marketplace. You talked already about the strong mix, and that seems to be overpowering whatever might be occurring underneath in terms of deteriorating consumer confidence. But what are you seeing at all in terms of just maybe leading indicators or things you watch for consumer mix down and how that might ultimately impact your — the mix and kind of the subscription rate around new product introductions over the balance of the year?
