Sophia Danziger: Got it. And another point here in Tim’s prepared remarks a focus on understanding so for the third quarter and just to clarify for the entire third quarter Seadrift was idled. Is it still idled today on the point of this call? I think an earlier comment noted hopefully restarting it in the back of the fourth quarter here, just recognizing in the start of November. So I want to think about some of that? I know slide 10 here and many slides in the past focused on thinking about the EV tailwind uplift and part of thinking about the go-forward landscape. Was that not something you considered to using the Seadrift needle coke production this past quarter to help offset some sales pressure in the electrodes?
Marcel Kessler: Yeah. So let me start by talking about — so Seadrift was down for the entire third quarter as we sit here today. It is not restarted yet, but we’re in the process of preparing Seadrift to restart here in the fourth quarter. I’m going to let Jeremy talk a little bit about kind of where we’re at and what our thinking was on the needle poke into that market.
Jeremy Halford: Yes. Sophia, I think the key point on that is that, if we were a year and a half or two years down the road, exactly what you said would have been the path that we would have gone down. And unfortunately, the battery anode value chain in the west is still undeveloped. It’s still in the very early stages of that development. And so, the things that we’ve been doing with needle coke have been focused primarily on proactively testing that needle coke with third parties and potential customers and making sure that that we’re able to participate in that industry or that value stream as it develops. But in the Western world, it’s still a little bit premature for that to happened, which is really what led to the decision to the idle Seadrift for a period of time just given the supply demand economics.
Sophia Danziger: Understood. Just last one for me here, can you help us understand what else you can do near term to think about some of the cash preservation and the free cash we saw this quarter. We’ve mentioned Seadrift idling. We’ve mentioned some of the revolver availability. You know past those two levers, what else can we be considering and thinking about near term here, if the demand environment continues to stay weak?
Marcel Kessler: Yeah. So I mean I think again to my comments around 2024 and looking out forward, right? It’s a little premature for us to sit here and say what we will or can’t or have to do in response to that. I think we really need to let the commercial season kind of work through its process and that will again will inform the way we approach next year. What we can do in the near term is remain kind of the rigorous focus that we’ve had over the last 12 months on cost, whether it’s period costs, SG&A, our capital spending, how we manage our working capital levels. I talked a little bit about the release of some additional working capital as we go through the fourth quarter. So all of those things will continue to happen.
And I think just organizationally without having the backdrop of the LTAs behind us, right, we are a much more cost focused and oriented business going forward. So, we’ll let the commercial exercise play out, and that’ll inform how we approach 2024 from a fiscal year perspective.
Sophia Danziger: Great. Thanks for taking my questions.
Marcel Kessler: Thank you.
Operator: Our next question comes from the line of Abe Landa from Bank of America. Please go ahead.
Abe Landa: Good morning. Thank you for taking my questions. Maybe a little bit more on these negotiations kind of on this, the LTA that even your ESA negotiations for next year. I know you can’t really comment on pricing, but can you maybe just talk about from a volume perspective, are you kind of seeing customers entering into LTA stays in the U.S. and Europe kind of at a normal cadence like you’ve seen in the past? Or is there something maybe different this time around?
Marcel Kessler: Yeah. So maybe just to be sure we’re saying the same thing. Typically when we talk about LTAs or ESAs, we’re talking about multi-year agreements, and the negotiation process that that Tim and I have both referenced is really a semi-annual or annual negotiation that takes place this time every year. The — so assuming you’re talking about the negotiations that are taking place right now, the process is playing out largely the way that we expect it to. I would say that the timing is maybe a little bit later, a little bit later in the year than it has been in years past, in part because of some of that economic uncertainty that I talked about in the prepared remarks. As everybody is still taking to get a read on where the market’s headed in total. But by and large, the process is playing out the way that that we expect it to. The timing is delayed a small amount, but nothing unexpected and nothing extraordinary.
Tim Flanagan: And Abe, I would just add on the LTA front, we talked a little bit about this in prior calls, right? These continue to be an offering that we think we’re uniquely positioned given the vertical integration with Seadrift to offer to our customers, right? And they are one of the many kind of commercial offerings that we offer and on options that we provide. I will say that from our standpoint given what we view as a somewhat depressed market or the bottom of the cycle, if you will, we’re not overly aggressively pursuing these or locking in pricing at these levels. So, Jeremy’s commentary about the commercial process and what’s going on right now for 2024 is spot on. These again remain as options that we have in our toolkit, if you will.
Abe Landa: That’s helpful color. Thank you.
Operator: Thank you. There are no further questions at this time. I’d now like to turn the call back over to Mr. Flanagan for any closing remarks.
Tim Flanagan: Thank you, Laura. I’d like to thank everyone on this call for your interest in graph tech. We look forward to speaking with you again next quarter. Have a good day.
Operator: Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.
