David Whiston: Hi guys. Just two questions from me. In the press release, you talked about an unfavorable product mix in the quarter. And I’m just curious, does that imply there were advanced feature products that lagged? And was that just all FDM and HomeLink or something else?
Kevin Nash: Yes. I mean it’s mostly just a combination of the higher cost on some of the more advanced features and then, yes, shortage shipping really what we were expecting kind of going into the quarter. So it really resulted in last year at this time, we had really, really strong outside mirror growth, as well. This year was a little bit more flat in the fourth quarter. And you see a lot of that. I mean we didn’t €“ this year’s €“ the last couple of years have been a little odd just because of everything else that’s been going on. Normally in Q4, you do see our Tier 1 customers usually focus on inventory adjustments. So usually in December, you’ll see them take a little less HomeLink outside mirrors, which are primary products that we ship through Tier 1.
John Murphy: Okay. And I think what Kevin was answering a question earlier on margin heavens and particularly called out raw materials and freight. It sounds like then those are the single biggest gross margin headwinds by far or in the past, it seems like suppliers is always just been we need more volume and nothing else is as important.
Kevin Nash: No, I mean raw materials, the biggest headwind we’ve experienced is what I was referring to over the last 18 months. It’s certainly the biggest part of our build material and with the electronics piece of it being a big portion of our business, that’s certainly where the most opportunity for improvement over the next 2 years exists. We’ve done — if you remember back during COVID, we kind of right-sized our operations in our overhead structure so that it was built for this size. And so as we grow, we should be able to leverage that as well, but it’s not as big of a headwind as kind of the material side.
John Murphy: So, if you had your choice of dramatic improvement in raw material costs now or say, a much more normalized SAAR at a higher level, you’d take the raw materials?
Kevin Nash: Absolutely.
John Murphy: Interesting. Okay. Thanks, guys.
Kevin Nash: Thanks, John. Thank you.
Operator: Thank you. And one moment please for our next question. Our next question will come from Ron Jewsikow of Guggenheim Partners. Your line is open.
Ronald Jewsikow: Yes. Good morning, guys and thanks for taking my questions.
Steve Downing: Hey Ron.
Ronald Jewsikow: Just first, hey guys. You mentioned the guide assumes a stable cost environment. Does that include freight and overtime pay or are those potential sources of upside? And how is that trending, I guess, so far in January?
Steve Downing: No we think that will be stable as well, if not a slight €“ on the labor and overtime side and even on the freight, we actually think that will be a slight tailwind in 2023 versus 2022.
Ronald Jewsikow: Okay. And then this is maybe more of a question for Neil, but how many FDM nameplates do you think you can get to exiting 2023?
Neil Boehm: So we think we can pick up another probably between 15 to 20 somewhere in there based on current so much of it’s variable depending on the last half of the year in the fourth quarter. Sometimes they bump into the first quarter of the following year. So it just kind of depends on alignment. But I would say 15% is probably a pretty good number right now.
