Steven Downing: Yes. I mean, we’re always focused on looking for opportunities. I think one of the things that we’ve struggled with is the valuations of a lot of the acquisition targets just haven’t made sense to us. And so one of the hurdle rates we look at is saying, hey, what is the return profile of share repurchases versus acquisitions? And you have to look at those over a long period of time. And so far, we’ve had most of the acquisitions we’ve done have been smaller technology plays, startups, new tech instead of an existing income statement acquisition. We’re not opposed to it, and we continue to look a lot. Unfortunately, over the last few years, valuations really haven’t declined as much as we had hoped. We were — I was pretty optimistic that given the higher interest rate market and some of the things that were happening that acquisitions and valuations were going to drop.
And it has, to some degree, but not to the extent to which I had hoped and not to the extent to which we are ready to go acquire something that was a better return profile than share repurchases, investing in R&D and small technology acquisitions.
Charles Sloan: Right. Okay. So maybe the question is just generally how much cash you need. But that’s a separate question.
Kevin Nash: Just $1 more.
Charles Sloan: Yes, exactly. Well, it’s a tale of 2 cities, right, from last year to this year, and it’s wonderful to hear kind of how strong you are on the operational side. And — so we just look forward to seeing more of that in the future. And hopefully, things will work out good for a change instead of getting some bad luck on the other side. So anyway, great quarter, and we’ll look forward to seeing Gentex in the Federal Reserve minutes of companies that don’t need more capital to raise.
Operator: Our next question comes from the line of James Picariello with BNP Paribas Exane.
James Picariello: Can you hear me?
Steven Downing: Yes, James.
James Picariello: So as we think about the second half on a year-over-year basis, where are you seeing deflationary trends in the supply chain from a sourcing perspective, right? This would be separate from your cost recoveries progress on the net pricing front. Just curious where you’re actually seeing costs come down in the back half?
Steven Downing: Yes. You’re starting to see some really — in the second half versus last year, what we’re really anticipating is better freight cost for sure. What you’re starting to see is some deflationary pressures in metals and plastics and some of the precious metals. They’re running at really high levels really over the last 18 months. So we’re expecting those to continue to at least stabilize, if not get better. On the electronic side and really on the glass side, we’re still seeing some inflationary pressures. We’re hoping that through some supplier changes and through some co-development and engineering that we’re going to be able to offset those. But that’s going to take work. And so we know some of these we can do just through growing the book of business of the suppliers. Some of this by consolidating suppliers, we can potentially get savings. In other cases, we’re going to have to make some supplier changes in order to get to our cost targets.
James Picariello: Got it. No, that’s super helpful. And then just on the net pricing recoveries front, what is the baked-in assumption in the guidance at this point? I mean, is it closer to neutral or trending toward that positive 100 basis points that was once discussed. Where are we in that for the guidance?
Kevin Nash: Yes. I mean we’re close to that 100 basis points. That’s kind of what’s been realized so far in what we’re — I mean what we — between the temporary or the recoveries and the permanent price increases. That’s what we’re tracking towards and planning for working towards by the end of the year.
