Eifion Jones: Yes. So we have essentially completed all of the rightsizing of our SG&A base as we closed out Q4. And so we entered 2023 in a very healthy position to start realizing the entirety of the run rate savings of $25 million to $30 million per quarter. And so you will see our SG&A base in each of the quarters, around $60 million beginning in Q1. So we’re in great shape the year with all of those savings back into our numbers, and we’re realizing those as we come out of the gate.
Operator: The next question comes from Michael Halloran of Baird.
Michael Halloran: So 2 questions here quick. First one, when you look at the guidance back half of the year, it seems like you’re assuming positive North American growth, which makes sense given the destock comps. How are you guys thinking about the underlying sellout in the channel as you get to the back half of the year? Is it still down year-over-year at that point? Or it’s just the destocking comps that is driving the year-over-year gains? Or is there something else going on?
Eifion Jones: Yes. It’s Eifion. Yes. So no, we expect the destocking to impact our sales into the channel, predominantly in the first half. We expect sell out of the channel to be fairly consistently down over each of the quarters but our sell-in to the channel to pick up in the second half as we start to build for the seasonal year ’24.
Michael Halloran: And then how are you thinking about capital usage here? You just buy back in the fourth quarter, given where your guidance is leverage is a little bit higher here. Are you guys still contemplating buybacks as you think about capital usage in 2023, or are there other priorities?
Eifion Jones: Yes. Look, I would say we remain very disciplined on our capital allocation program. Our financial policy requires us to maintain leverage in the target range of 2 to 3x. At the end of ’22, we were at 2.9x. And despite the lower guidance on EBITDA in ’23 versus ’22, we still do expect to close ’23 out with leverage ratios of around 2.9 to 3x at the end of the year, driven by a meaningful cash flow generation. And the focus is going to be on meaningful cash flow generation from the business. We’ve got no particular plans now for use of capital other than to continue to pay down our net debt position throughout 2023 as well as the investor CapEx programs into the business.
Operator: The next question comes from William Carter of Stifel.
William Carter: So first question I would ask is going back to your own kind of inventory. Your drawdown plan, I believe, last quarter was $90 million, you draw down some, that would imply an incremental million. But I would guess your volume assumptions for next year are now different relative to where they were before. And if I look — if I read your free cash flow guidance correctly, you only got about $6 million to $15 million of working capital. So could you help us frame how much potential upside there is to that $150 million in free cash flow from drawdown, what you’re planning, your own inventory, your own production, your own purchases?
Eifion Jones: Yes, sure. So as we previously communicated, inventory peaks in our own balance sheet, midyear last year, we — around about $313 million. We reduced that down to $284 million by the end of the year. When you think about the year-over-year increase ’22 versus ’21, that was about a $50 million increase in working capital, about half of that was inflation. The other half is divided between safety stock positions we took and acquired inventory through the J&J acquisition. What we’re forecasting for next year is to continue to reduce our inventory down to our target months on hand position of 3 months on hand for raw materials and 2 months on hand finished goods. We don’t quite get there by the end of next year, but we’re super plus.
