Steven Downing: John, I love your energy. I mean, it’s been so many years since I’ve…
John Murphy: They’re off, they’re off this year.
Steven Downing: Yes. I’ve had so many years of being hit with a board that I think I’ve lost optimism or something. No, I mean, if it were to happen — and realistically, I think that’s where OEMs are trying to get to as well to the numbers you just discussed, we would see at least point-for-point improvement in our guidance. In other words, if North America was up 200 basis points instead of down 100, we would expect to see 200 to 300 at least improvement in our own business there because we do have — obviously, we do have a lot of exposure to the North American OEMs with good content.
John Murphy: Okay. And then just lastly, do you see any inventory buffer in the channel? I mean, obviously, worldwide scared people quite a bit. I mean, are you seeing anything that you’ve built up in your inventories or maybe even forward-looking into your Tier 1 customers, Tier 1 supplier partners and then in the automakers? Or is that something you’re just not seeing…
Steven Downing: No. Well, quite the opposite. Given the growth we’ve experienced over the last 2 years and the lengthening of how long it’s taken to get capital, if you notice our CapEx, we keep guiding higher than we’re actually able to spend. And the last 2 years haven’t been because we’re cutting that back, it’s just because the supply base on capital has pushed out so far that it’s hard to get it in place. So the last 2 years, we’ve been actually under-capacitized for what the volumes have been. And so our actually finished goods inventory is lower than we would like it to be. And so we’re working 6/7 days at times just to keep up with demand. And so we would welcome like obviously not a slowdown but a chance for stable orders so that we could get caught up and get inventories back to where they were.
So fortunately, we haven’t — from a financial side, fortunately, we haven’t prebuilt or preshipped anything. So we don’t see any glut in inventory either at our customers or definitely not internally.
Operator: And our next question is going to come from the line of Mark Delaney with Goldman Sachs.
Mark Delaney: You started — I was hoping to follow up on the topic John was just bringing up around LVP for this year. And you started to cover a little bit around how you guys see the regions. You mentioned, I believe, that you think North America might be tracking a little bit stronger than what IHS is currently projecting based on what you’re seeing from OEM schedules. Could you talk a little bit more on all the regions and globally and anything you may be seeing in OEM schedules that is either similar or different to what IHS is projecting?
Steven Downing: Yes, I think — and just to clarify quickly, we are really using just John’s presupposition that it was going to be better. I wouldn’t say that the company necessarily feels that it’s understated. It is certainly — at this point, prognosticating light vehicle production by region is something that I obviously — we don’t get paid for that forecast. So unless you want to buy it from me, I’d be happy to provide you one if you’d like me to tell you my own personal forecast. But I look at it and say it’s probably a fairly flattish production environment globally. Now the mix in between the regions, obviously, if you look at Japan, Korea, it’s had a tough few years. Obviously, Europe has kind of oscillated back and forth really over the last 5.
North America definitely would say there’s definitely some demand there. The question is OEM mix and which OEMs are going to win in the marketplace. And quite frankly, you do have some other OEMs who are expanding into North America for sales here with their manufacturing. And that’s European OEMs included. And so I kind of look at the globe and say, listen, I would fully expect that the China market will probably cool some. And if that happens and the rest of it has picked up out of our primary markets being Europe, North America and Japan, Korea, that bodes really well for us, a, our revenue is better in those areas, the profitability tends to be a little better as well.
Mark Delaney: Got it. And then the second question was on OpEx. And understandably, the company is taking OpEx up this year to support all of the different growth initiatives that you have as well as the revenue growth that you’re seeing in the business. Maybe help us think a little bit beyond 2024, with the investments you’re putting into place this year, is that a pretty good base of investment level and OpEx beyond ’24 may grow more slowly? Or would you anticipate continued increases in OpEx that may be a little bit higher than the typical underlying economic inflation to support some of the longer-term efforts?
Steven Downing: Yes. No, I think if you look at this guidance we put in place for this year, I think somewhere in that range for the next couple of years will probably be where we’re at. Like I wouldn’t expect it to go above this $225 million to $250 million range in ’25. If you look at that level — and really the factor comes if ’24 and ’25 pan out the way we’re talking about, we’re going to be looking at being at capacity — I’m sorry, Kevin, what did you say?
