This is a safety-first market and this is a safety-first product. And we have exceptionally good data in support of that. And so we think it’s an outstanding fit for markets that are looking for a better answer on closure, but want to put a premium on safety and productivity and patient satisfaction, all of which come with the Vascular Closure pipeline. So more to come, but we were optimistic about the growth trajectory in international. It’s starting essentially from ground zero, it’s a zero base, but we look forward to continued robust uptake.
Andrew Cooper: Okay, great. And then maybe shifting a little bit to costs and the cash flows, just you mentioned freight costs rising again. A little bit more detail there would maybe be helpful. Are we back on the upswing? Any signs of kind of stabilization there? It’s been sort of noisy through the pandemic, but had felt like we had gotten a little bit more normal. And then just would love a little bit more color on some of the collection delays you called out in terms of cash flow. I think with the guide, it sounds like it’s maybe more timing than it is an actual fundamental shift. But just thinking about that and inventory balance, just a little bit of sense for how you think about cash flows, maybe beyond fiscal 2024 and whether anything has changed.
James D’Arecca: Right. Hi, Andrew. Thanks for the question. So, on the freight costs, what we’ve seen there in terms of higher freight, mostly a good story there, just because it’s been more volume based, the more volume have, we have to pay more freight. And you see that in our cost line. That’s the good news part of it. We are watching the events unfolding in the Red Sea that has created some additional cost. We are looking to manage that as best we can and figure out ways to absorb that. But overall, big picture landscape on freight, apart from what’s going on in the Red Sea, I think it’s a good story overall. The rates have certainly come back down from their peaks back a year or so ago. On the cash flow side, there were some collection delays that I mentioned earlier that has mostly resolved itself, and it really was more of a timing issue around year end with certain collections.
And then we had some turnover on our staff, which led to a bit of an uptick. We’ve seen a lot of that now come back and we should see that normalize here very shortly. And the story for the future in terms of overall cash flow is still a very good one. This business generates a lot of cash and we expect it to continue to do so. You heard Chris remark at the end there. We’re going to have about $2 billion in capacity by the end of 2026 to continue down our M&A agenda.
Andrew Cooper: Great, appreciate it. I’ll hop back in the queue. Thank you.
Operator: Thank you. And our next question coming from the line of Joanne Wuensch with Citi. Your line is open.
Unidentified Analyst : Good morning. This is actually Anthony out for Joanne. Thank you for taking our questions. First, going back to VASCADE, can you share or remind us just where you think your share is in the U.S. in those small- and mid-bore procedures? And then is the incremental opportunity here really more share gain or market growth?
Chris Simon: Anthony, so I appreciate the question. The share question is not as simple and straightforward as we might like, because really what we’re doing here is driving advancement in medical therapy. Disproportionately our competition, particularly in the small- and mid-bore areas that you called out, is manual compression, clearly a suboptimal therapy, or suturing, typically via a figure of eight. And so we’re actively transitioning jointly with the medical community advancements there. And what we think about it is we’ve identified these top 600 hospitals. They represent more than 90% of the ablation procedures. And for those hospitals, we will be in fully 500 of them by the end of this fiscal, so in another month and a half.
And the disproportionate source of growth for us is the already converted hospitals driving significantly higher levels of utilization. When we sat down and worked through with Cardiva at the time, what we thought would be an appropriate level of utilization we were targeting numbers that were 35% to 45%. What we are seeing in our most established accounts now are numbers well worth north of 50%, 65%, 75% in some cases. It’s really good technology and it’s being broadly adopted. So, it tells us there is significantly more upside and there is a lot of stickiness to the product. That’s what’s driving the uptake. And that’s true in ablation, it’s also true in interventional technologies with PCI. So there’s a lot more room to run with that product here in the U.S. and internationally.
Unidentified Analyst : Got it. That’s helpful. And then you just mentioned the two billion in capacity. Talking about M&A, can you share maybe what other adjacencies you would be interested in when it comes to inorganic opportunities in the Hospital segment?
James D’Arecca: Yes, I appreciate the question, Anthony. Look for us, our first priority for capital allocation will be organic, right, whether that is building a fit for task commercial force or strengthening our clinical and our data and analytic capabilities, we feel quite good about what we’ve done there. In R&D, it’s about additional indications, it’s about new product offerings on the same existing product families, and further build out there in terms of registration and such. In terms of M&A, our clear, close second priority, we think there is significantly more room to run with what we’re now calling interventional technologies. So really anything in the EP and IC suite, our game plan hasn’t changed. We want enabling technologies.
