James Picariello: On the customer cost recoveries, you achieved $15 million in the fourth quarter. Just curious on a finer point, I know this has been indirectly asked, but how should we be thinking about what that cost recovery number looks like for this year? Is the 100 basis points in net pricing still the right target for this year? Because, right, that would imply maybe three points of net positive price relative to your typical 2% APR. So that’s something on the order of $55 million to $60 million in recoveries implied for this year. Is that the right range to be thinking about?
Steve Downing: Yeah, so I’d say you’re exactly right about the goal for this year and where we think we can end is at about a net positive of 100 basis points.
James Picariello: Okay. And then the trajectory out for 2024 still encouraging from both the top line and gross margin is a maybe now more still weighted in 2024. Just focusing on the cost side of the equation, can you quantify what the total addressable cost bucket is in terms of as an exit rate for 2022, what that what that cost bucket is in terms of how that winds down through 2024. What’s addressable, what allows you to get to that 35% to 36% exit rate in 2024 from a cost perspective?
Kevin Nash: The biggest piece is obviously raw materials that have gone up by 350 basis points over the last 18 months. So that’s addressable as we get into the late half of next year into 2024, we would expect to start to see that improve. The thing we didn’t talk about in here was freight. That’s also been about 150 basis point headwind over the last 18 months that is starting to show signs of improvement. And then, the last piece really is between mix and leveraging our overhead, right? So I mean, you have a lot of things put in place for growth that has been stalled a little bit because of mostly supply chain constraints. But as you see, our forecast this next year move into roughly 15% growth and another 10% next year. But the investments in CapEx will start to be leveraged with that sales growth.
Steve Downing: Yes. And I think, James, the other one too, that we’re pretty optimistic about is the labor cost increases have been very significant, but really even driving that more has been overtime cost because of the lack of staffing and headcount that we needed. We’ve made a lot of progress over the last month or so on the direct labor side. And we feel like that will help limit the amount of overtime costs. And so there could be another 50 to100 basis points of tailwind over the next 18 months as we get the staffing in place and trained and become more efficient from an operations standpoint. .
James Picariello: Thanks, guys.
Kevin Nash: Thanks, James.
Operator: Thank you. And one moment please for our next question. Our next question will come from Josh Nichols of B. Riley. Your line is open.
Josh Nichols: Yes. Thanks for taking my question here. Just thinking a little bit more about cash flow given some of the investments that are going on for CapEx and what not for 2023 I did know so inventory levels were actually down in 4Q. Are you at a level where you think you’d probably don’t need to invest more in inventory? And is that going to be a source of cash flow for 2023? Or is it going to hold around current levels? I’m just curious your thought process given the demand dynamic that you’re seeing right now?
