Deane Dray: That’s helpful. And then just as a follow-up, any commentary about outgrowth expectations? Anything you’d call out in terms of competitive dynamics because like in PT, if competitor lead times have shrunk that can also change some of the destocking. So just any competitive and outgrowth commentary would be helpful.
Brooks Mallard: Yes, look, I’d say that we – the business continues to perform very nicely in terms of automotive vertical, both on the OEM as well as on the AR side. So we not only are keeping up, we have increased output nicely there, and that’s paying nice dividends. So I’m not going to indicate that we are not taking market share, but as we indicated auto came in mid-teens for the quarter. And so that’s quite strong. I think that PT is doing well, but again, full disclosure, right, last year we were getting impacted most significantly with the polymer supply in PT. And so I think that the comps that we anticipate are going to be somewhat favorable across few of the lines. But I just think that the lead times will probably remain somewhat elevated on PT.
Operator: Thank you. Your next question comes from the line of Jerry Revich of Goldman Sachs. Please go ahead.
Jerry Revich: Yes. Hi. Good morning, everyone.
Brooks Mallard: Good morning, Jerry.
Jerry Revich: You folks – hi. Can you talk about the impact of supply chain on margin performance this year? Was that still a drag because it’s pretty impressive that year-to-date your gross margins are up on down volumes? And I’m just wondering, is there another tailwind, we should be thinking about 2024 versus 2023 because the supply chain’s getting better, but it doesn’t feel like it was completely clean in the first half of the year? We’d love to hear your comments on that.
Brooks Mallard: Yes. So the first half of the year we saw things get progressively better. They were better in Q1 than they were in the back half of 2022. They were better in Q2 than they were in Q1. And then they’re better in the back they – we anticipate they’ll be better in the back half of 2023. And that’s where if you remember last year we talked about some of the gross margin drag that we had. Certainly, in the face of a little bit of core growth headwind and maybe a little mix headwind in the second half, the stabilization of the operating environment, better supply chain performance, and then more normalized operational performance in the second half is what’s driving our gross margin improvement. So we expect it to continue to see it get better in the second half of the year hopefully returning to complete normality. And then pivoting to gross margin expansion with the initiatives that we’ve talked about as we head into 2024.
Jerry Revich: Super. And Brooks, can I ask you just on your prior comment regarding returning to normal seasonality, normally first quarter top lines up low to mid-single digits. From the fourth, which what I think would translate to year-over-year organic growth, but it feels like there’s going to be some tough comps just given the stocking that we had seen in the first quarter of 2023 in North America. I’m wondering if you just comment on that cadence? Obviously, we’re not talking 2024 outlook yet, but we’re hoping you comment on the first quarter comp?
Brooks Mallard: It feels like you’re trying to get me to talk 2024, Jerry, so I’m going to stay away from that. Look, I think, look, we – the top line is largely developing like we thought it would in the second half. But a little bit longer recovery in China and then the mobility I think it is as you see inflation moderate, you’ll probably see pricing moderate some which really going to impact gross margin. So as you kind of move through the next few quarters, you’ll see that pricing moderate. But we expect to see gross margin expansion, as I said before from some of our initiatives. I’m hopeful we return to normal seasonality cadence and everything gets back to normal in 2024. But we’ll have to wait and see. And we’ll be sure to make sure we let you know when we roll out our 2024 guidance.
Operator: Thank you. Your next question comes from the line of Jamie Cook of Credit Suisse. Please go ahead.
Jamie Cook: Hi, good morning. Most of my – just one follow-up. Obviously, the cash flow projection is strong for the year. But I’m just wondering as you look at your inventory with supply chain, sort of starting to normalize how you’re thinking about the opportunity on the working capital front in terms of inventory or do you sort of over the longer term would keep inventory at higher levels versus history? Just as you know, supply chain, the world sort of changed. Thanks.
Brooks Mallard: We’re already starting to take inventory out particularly on the raw material side. And so as our supply chains normalize, we’re adjusting our raw materials, we continue to adjust our finished goods, based on customer demand. But on the lead time side, we’re already seeing some improvement on the raw material side. And we would expect as, again, as supply chains normalized to see some additional improvement. But let’s not forget, if you look at trailing 12 months, we’re 135% cash conversion. So as we’ve rolled over some of the step up in cost and the receivables on inflation and the comps are more normalized, the cash generating aspect of this business is starting to flow through again. We’re over at a 100% cash conversion for Q2, which I believe is a record for Q2 as well.
So no, we were already seeing some favorability some improvement from an inventory perspective. We would expect to see a little bit more. But then all in, we expect to see cash generation continue to return back to normal.
Jamie Cook: Thank you.
Operator: There are no further questions at this time. I’ll now turn the call over to Rich Kwas for closing remarks.
Rich Kwas: Thanks everyone for participating. If you have any follow-up questions, feel – please, feel free to reach out. Have a great rest of the day and a great weekend.
Operator: This concludes today’s [call ends abruptly].
