John Anderson: Yeah, Anthony, just kind of just say add on €“ on PD, one of the big drivers of one of the drivers of gross margin expansion in 2022 was pricing, we increase gross margins, over 250 basis points. There’s some mix. There’s some productivity improvements. But we’ve also been really good at passing on our inflationary input cost to the customers through price increase.
Anthony Stoss: That makes sense. And John, since I have you, I wondering kind of your view on the full year CapEx, I know you gave us for Q1. And on top of that, you guys have done a good job of free cash flow over the last 12 months, what are your thoughts now, given on the reduced expectations are 2023? Where your cash flow goes? And on the past year, we’re hoping that nearly it doubled them? And I’m curious what your updated view is for free cash flow?
John Anderson: I thought you’d €“ you mean CapEx or through cash flow. From CapEx, and I think we’re going to €“ yeah, we’re going to be kind of in the 4% to 5% of revenue from a CapEx standpoint, with more of it skewed to the PD, and MSA segments, we clearly aren’t going to put in more CapEx for capacity and CMM. So I would say two thirds of our CapEx in 2023, will go to PD, and MSA.
A €“ John Anderson: And I think it’s worth just mentioning on the CapEx side, Tony, one point, like 65% 70% of our CapEx used to go when we were at 7% 8%, towards the microphone business. Now, it’s like 33%, of 4% to 5%. And so you can see how we’re shifting where we spend our dollars. In terms of cash flow. I mean, despite some pretty tough macro conditions, we still delivered 7%, free cash flow, the percent of revenues in 2022. And we had a big headwind, Tony, with networking capital. Inventory increased our payables because we really started turning off the spigot, our payables were at a historic low as we exited 2023 — 2022. So it’s a $40 million to $50 million working capital, headwind in 2022. We don’t expect that to recur in 2023.
You know, that’s one of the metrics that I feel pretty good about is, we have a very reasonable shot at getting back to that 15%. So kind of doubling the 2022 rate as a percent of revenue in 2023 and, again, not having the headwind being a little more disciplined on our CapEx, and then some operating expenses.
A €“ Jeffrey Niew: So that kind of points to €“ you’re know, getting back to the free cash flow percent of sales back to where we were in 2021.
Anthony Stoss: One last question if I can sneak it in and maybe I misheard. We talked about kind of second half growth. For Q3, the September quarter, are you calling for September 2023 to be larger than September 2022 same thing with December?
A €“ Jeffrey Niew: Yes, I would say, €“ yes, I would say the answer does yes. You know, I think, you know, we just didn’t break it down by segment. We’re expecting growth, you know on precision devices in the back half over the back half of 2022 that we did all the dynamics we’ve talked about. In medtech, I think we started seeing as inventory correction in the back half of 2022. I think we have a lot easier paths. And again, the market is expecting, the end market, our customers, and there’s a lot of data out there are expected to return back to growth in the back half of the year. So we’re expecting some nice growth year-over-year. The wildcard is really around the microphone business. You know, I think, you know, right now, if I were to sit here and say, yes, I would expect year-over-year growth in the back half, but I’m being very cautious and calling that out.
