John Corkrean: Sure. It’s a little bit on the higher side, Jeff. I would say, we had a couple of items that were kind of unusual and non-cash actually, that probably represented about $10 million between a pension curtailment and a non-cash charge on a legal entity consolidation. So, I think, the number will probably be lower than that, probably between $20 million and $30 million, kind of representing kind of those same areas as far as the M&A-related activity, our SAP implementation and probably some finalization related to some restructurings we’ve done.
Jeff Zekauskas: Thanks. In the fourth quarter, you’re — in your working capital statement, your other assets were a cash inflow of $46.5 million. In the third quarter, they were — for the nine months, they were a cash outflow of $40 million. So, there was an $86 million or $87 million positive cash flow change from other assets in the fourth quarter. What was that?
John Corkrean: Yes, I think you got to look at the fourth quarter, but you’re exactly right, Jeff. And I mentioned it in our prepared remarks, we did have a one-time gain on maturity of a cross-currency swap and the impact that you’re seeing on other cash flow is almost entirely related to that. So, that’s non-repeating. Even if you take that away, it was a very strong cash flow quarter, driven by improving working capital and good profit growth.
Jeff Zekauskas: How big was the cross-currency swap gain?
John Corkrean: It was around $50 million. It was about $50 million.
Jeff Zekauskas: Was the engineering volume growth in the quarter above 3%?
Celeste Mastin: It was right about that. It was very near that.
Jeff Zekauskas: I think I’m good. Thank you very much.
Celeste Mastin: You’re welcome Jeff.
John Corkrean: Thanks Jeff.
Operator: Our next question is from Eric Petrie with Citi. Your line is open.
Eric Petrie: Hey good morning Celeste and John.
Celeste Mastin: Good morning Eric.
Eric Petrie: How much of your construction exposure is new construction versus repair and remodel? I’m sure there’s probably differences between flooring, roofing and insulated glass.
Celeste Mastin: Yes. So, if you look at our portfolio, about 9% of our businesses in new — sorry, 14% — sorry, less than 15% of our business — I’ve got to remember your question. Less than 15% of our business is in new construction and then we’ve got some additional business in the repair and remodel. I think that’s what you’re asking.
John Corkrean: Yes. And just — and when Celeste quotes those numbers, that would include our Construction Adhesives business as well as our other businesses in EA that are construction oriented like insulated glass windows. So, it’s — as Celeste said, kind of all in across the whole portfolio, it’s a little less than 15% and then a little — and then repair and remodel would be similarly sized, but actually a little less than that.
Celeste Mastin: Yes, it’s — and a little countercyclical.
Eric Petrie: Helpful. And then just as you turn leverage kind of to the three times and below, H.B. Fuller has been a consolidator in the industry. How do you see it, Celeste, that returning cash back to shareholders versus M&A?
Celeste Mastin: Yes. So, we have a target to hit, three times net debt-to-EBITDA leverage. We’re very serious about that target. And we’re progressing nicely along the path to get there.
John Corkrean: Yes. So, we should be going below three times debt to EBITDA in 2023, and would like to stay in that kind of two and a half to three times range. Eric, I think there’s — I think if you look at our strategy around M&A, there’s a lot of consolidation opportunity. We’ve got a robust pipeline for M&A. It’s mainly very small bolt-on deals which have worked very well for us. So, we would expect that would be the use of most of the excess cash to sort of keep us in that targeted capital structure range. If we were to move below 2.5 times or we would look at share repurchase, depending on where the stock price is. But we feel like that M&A pipeline is robust enough to really be the use of cash for us as it relates to just maintaining our targeted capital structure.
Eric Petrie: Thank you.
Operator: We have no further questions. At this time, we’ll turn it over to Celeste Mastin, Chief Executive Officer, for any closing remarks.
Celeste Mastin: Thanks, everyone, for joining us today. We look forward to interacting with you in the future. Take care.
Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.
