Ben Bollin: Cliff or Doug, I’m curious on your bigger picture perspective on outdoor and fitness gross margins. If you look back pre-COVID, we still haven’t quite recovered to the gross margin level seen in ‘17 and ‘18. Just curious how you think about the opportunity to return to those levels in the higher-end wearables categories? And then I have a follow-up.
Cliff Pemble: Yes. I think there’s so much has happened between then and now that it would be hard to really build a bridge from where we were back then in terms of margin structure to now. I would say that the product mix probably has a big part of that. And so, as the segment ebbs and flows in terms of various categories, the gross margin will vary accordingly.
Ben Bollin: Okay. And then the other question for you, Cliff, is a bigger picture also. How you think about more opportunities with recurring revenue? You’ve talked about lower arm [ph] and inReach, and it seems like that’s expanded. Curious if you see other opportunities to pursue maybe M&A in the app space or other content space, introduce your own? Just high-level thoughts on that.
Cliff Pemble: We’re looking across all of the things that we offer as a company, including content and are looking for ways that we can monetize that into value-added services for our customers. Some recent examples of that are marine chart subscriptions that come with our chartplotters and also outdoor maps that we can bundle with all of our products really that focus on the outdoor segment. So, we’re looking more organically at that and not necessarily at M&A, but we do have a lot of opportunities where we can leverage.
Operator: Your next question comes from the line of David MacGregor with Longbow Research.
Unidentified Analyst: This is Joe Nolan on for David. So, I’m not expecting any sort of quantitative guidance or anything, but I was just hoping you could talk high level about some of your initial thoughts for 2024? And just maybe how conversations are going with customers regarding 2024?
Cliff Pemble: Yes. I think, unfortunately, I really can’t provide much color because, as I mentioned earlier, we’re — most of our business lines are shorter cycle, meaning that retailers are focused now on Q4. And we really haven’t had a lot of discussions around what they’re thinking for next year. So, again, I would just look generally at the momentum we have right now and generally, favorable indications we’re getting for fourth quarter as indications that hopefully business will continue to be good into 2024.
Unidentified Analyst: Got it. Okay. And then just a quick follow-up. With the UAW strike, just can you talk about what sort of — what impact, if any, that’s having on your guys business?
Cliff Pemble: Yes. There’s really no impact that we’ve had from that event. Most of our OEM customers are outside of the Big 3 that were affected by that. So, that’s not something that’s affected us.
Operator: Your next question comes from the line of Noah Zatzkin with KeyBanc.
Noah Zatzkin: Maybe just one for me on the stronger-than-expected trends in fitness. Hoping you could provide some color around the drivers. And maybe any larger trends at play as you see them that are driving better-than-expected performance in fitness, maybe relative to expectations a quarter or two ago? Then I have a quick follow-up.
Cliff Pemble: Yes. Noah, the big driver really is, as we mentioned in the remarks, wearables have been very strong. And that’s across all of the wearable families in fitness, from running watches to the advanced wearables to even basic wearables. So, everything there has been strong. Other categories in the segment were also very strong. We saw strength across the whole segment really. So it definitely was much better than what we had anticipated earlier in the year, as our new products came to market and they were well received.
Noah Zatzkin: And then, maybe just one on marine EBIT margins. I think 13% down sequentially, quite a bit. So just hoping you could provide some color on kind of the puts and takes there? And then, how to think about margins relative to historical next quarter given the addition of JL Audio?
