Ghansham Panjabi: Okay, terrific. Thank you so much and happy holidays to all of you.
Larry Hilsheimer: Thank you, Ghansham.
Operator: And one moment for our next question. Our next question will come from [Cashen Keeler] (ph) of Bank of America. Your line’s open.
Unidentified Analyst: Yeah, hi. Good morning. This is Cashen on for George. He had a conflict this morning, business-related. So just on container board, I know you’re not including it in guidance here, but I guess can you generally just speak to your rationale behind the price increases and then, you also talked to some improvement just on container board. It’s trending better relative to URB. So just on the demand front there, can you talk at all just how that may be trended throughout the quarter and what you’re hearing from your customers on that front as well?
Ole Rosgaard: Yeah, I mean, we are raising the prices because we, like everybody else, have faced inflationary cost pressures. Obviously, OCC is up. We deliver great services to our customers, and demand’s been up. So we are — we’ve gone out with that, and it will be effective January 1. That’s essentially it.
Unidentified Analyst: Okay. And then on — just on demand and container board.
Ole Rosgaard: Yeah, you’ve got that trend stuff there.
Larry Hilsheimer: You’re talking about fourth quarter?
Ole Rosgaard: Yeah.
Larry Hilsheimer: Yeah, so the mills, let’s see here, yeah, mills are 0.5% and in sheets and CorrChoice, 2.8%. In boxboard, we were down 6.9%, and tube and core down 7.6%.
Ole Rosgaard: Yeah, so sequentially a significant turnaround because we’ve been running negative, so.
Unidentified Analyst: Okay, understood. Appreciate that color. And then, I know you’ve done a number of acquisitions or announced a number this year, and, Ole, you talked to M&A being part of the story, kind of longer term here. And on past calls, you’ve talked to stuff maybe in the kind of immediate term pipeline. So at this point, is there anything that you could potentially execute on in the coming year? Or how can we kind of think about that?
Ole Rosgaard: We haven’t closed on Ipackchem yet. That will close here in the first calendar quarter. [Technical Difficulty] Ipackchem they operate in nine countries. And given the volume situation we have at the moment and our guidance, we’re not sort of going out aggressively to buy, but we have the means to do something, and we remain opportunistic over the next six months in terms of what’s available. And we’re not going to miss a good opportunity to do a good deal.
Larry Hilsheimer: Yeah, the thing I would also just share is even if we had hit this low end, if that’s all that happens this year, we still are well within any of our debt covenants and will be in great shape going forward. I mean, even if we got to just like recovering 50% of our volume this year, we would, with Ipackchem, we’d still be right around 3 on a leverage ratio. Obviously as we recover, we think there’s significant upsides. And to put a little point on that, so we’re out at $585. If we recovered paper and pricing margins to the average of the last five years, we’d pick up $101 million. If we recapture the volume, we already said that’s $174 million. If we add Ipackchem in there, say roughly $60 million, we’re up to $920 million. If those things happen, we’re already back down in our debt ratio target.
Unidentified Analyst: Got it. Understood. And then just one last one and I’ll turn it over. Just with the change in terms of your fiscal year, is it possible at all to quantify what the inflation might be or what costs you might incur related to that?
Larry Hilsheimer: Yeah, the fiscal year change thing is relatively minor. It’s a couple million dollars kind of thing for that element of it.
Unidentified Analyst: Got it. Thanks. I’ll turn it over.
Operator: And one moment for our next question. Our next question will come from [indiscernible] of Stifel. Your line is open.
Unidentified Analyst: Good morning. Thanks for taking my questions. If you could just talk about what you’re watching as indications of change in the business fundamentals and what needs to happen to support a positive [churn] (ph) is coming, and you would feel more comfortable providing guidance range.
Ole Rosgaard: Well, what needs to happen is, I mean, obviously there’s a lot of factors involved, but if we see a interest rate reduction, we will probably see some improvements in the housing sector. And the housing sector, when people move houses, drives a lot of the business we see from our paint in segments, but also on container boards. That would be a huge positive, probably the biggest, I would say. And then you have all the issues on geopolitical conflicts we have around the world, that has an effect as well. Those would probably be the biggest.
Larry Hilsheimer: Yeah, I would just — you asked me to reflect on last year. We came out in the first quarter call with low end guidance. By the second quarter, we gave a range. So we’re not, I mean, when we see something, we will react and get everybody the information that you’d rather see. But I’ll also tell you, a year ago on this call, at this time, our paper customers were telling us they thought business was going to bounce back in January. Our chemical companies were saying first — our second quarter calendar last year. And by the time we got to the first quarter, everybody was like, what’s going on? And it started extending further and further out. So it’s — and I’ll also reflect on The Great Recession. When we did see an inflection point, it was rapid. The demand kicked off aggressively. So hopefully we start to see a recovery that ties to some of the things that Ole just mentioned and we are well positioned to respond.
