Tim Moore: Thanks, Ric and Jana. It was nice to see the working capital recovery benefit. I mean, it seemed like free cash flow was about $29 million in the quarter, so that was great. I’m glad you’re still clawing that back. Jana, I actually had a question. You lowered your CapEx guidance by $15 million to $20 million this year. There’s really not that much tied to the divestiture. And how should we think about next year? Would kind of that $15 million to $20 million CapEx cut roll over and be catch-up next year? Are you thinking maybe $70 million to $80 million CapEx for next year?
Jana Croom: No, very clear about that. It’s not uncommon to have a company take a little bit of what I’ll refer to as a CapEx diet as you’re looking at the outlook that we’re looking at. And so think of it, frame it this way. You know that depreciation is roughly $38 million to $40 million. It is very important that companies keep their maintenance CapEx program in place because if you get off a maintenance CapEx program, just all sorts of challenging things happen downstream, and so we won’t do that. And then the balance of it is going to be what I’ll refer to as aggressively timed growth. As you all know, the lead time for our new programs to get up and running, particularly automotive, can be 12 to 18 months. And so what we’re really aggressively managing is the timing that we have to spend that capital to get that SMT line up and running, PPAP cleared, certified, versus earning the dollar of revenue.
And so we are going to keep that absolutely as tight as possible, not sacrificing future growth and getting programs up and running on time, but just being very, very mindful of the ways that we are spending our cash.
Tim Moore: Great. That makes sense, especially considering how much you guys spent on expansion CapEx the prior two years. But I have a question actually for Ric. I know you’ve been talking about the incoming opportunities for medical, insourcing decisions, and taking some processes in-house from some major customers and potential customers. So it seems like that’s been under consideration for maybe the last 12 months. Have you signed off on any of them or green-lit any of them?
Ric Phillips: Well, we have. We’re not yet able to comment specifically on that, but we’ve had some good success there. And again, we’re really pleased that everyone knows about the FDA recall situation and the significant impact in the year to us. And again, to be clear on that, we’ve not assumed that business returning in any of our future forecasts. We stand ready to support it. So that’s had a significant impact, but we’ve had significant wins elsewhere that have already begun to offset that, as you know. And there are more coming and there’s one very significant one that fits right into the category that you just described. We’ll be talking more about that very soon.
Tim Moore: Good. I mean it just seems like that pipeline is so big that you could eventually backfill in that consent decree customer issue, not immediately, but over the next few quarters. One last question maybe for Jana on gross margin, came in a bit light in the quarter. I am just — I know you only have one quarter left in the fiscal year, and investors should be looking out for the next fiscal year and the good setup for next year. But is an 8.4%, 8.3% gross margin possible in the June quarter if you exclude the discontinued automation, test and measurement, which seems to be losing $8 million operating income a quarter, when you strip that out as a discontinued item?
Jana Croom: So our goal — if you just do the rough math around getting to 5%, you need gross margin sort of in that 8.5% range, SG&A in the 3.5% range. What I will tell you is we’re still right-sizing the business and examining the revenue. So I don’t know that we quite get there in Q4, but certainly that’s the goal for FY 2025. But we’re going to have to be close to be in our adjusted OI guidance range for OI margin, so you can sort of back into the math of where we might be in Q4.
Tim Moore: No, that’s fine. That’s fine. And it’s nice. I guess it’s not nice. This was a big operating loss of, I don’t know, $30 million a year run rate. But it’s great that you’re getting rid of that and doing the proper ROI. So thanks a lot. I appreciate it.
Jana Croom: Yes, so the one — yes, Tim, I just want to call out, though, the loss in the quarter includes all of the restructuring and impairment. So when you’re looking at the GES business, you’re going to have to strip that out to get to the right number.
Tim Moore: Yes, so that was $22 million. And so maybe it’s more like an $8 million a year or something like that, ex-goodwill impairment in the assets and stuffs. Okay, well, thank you.
Ric Phillips: Thanks, Tim.
Operator: We currently have no further questions. And I kindly remind you that a replay of the call will be available on the Investors Relations page of the Kimball Electronics website. And this concludes today’s conference call. Have a nice day. You may now disconnect your lines.
