Operator: The next question comes from Brian Wright with ROTH Capital Partners.
Brian Wright : I just wanted to follow up on the comment in the press release about the Brazilian financing switching to quarterly allocation. And just — how to think about that having any impact on seasonality in the international sales in ’24?
Randy Wood: Yes. Brian, this is Randy. I’ll take that one. And this was a fundamental change and how the program is administered in Brazil. And at the macro level, we did see aggressive finance rates 10.5%. We did see an increase — a published increase and the amount of money that will go into the program. But historically, there was 1 tranche. It was announced in the June, July time frame. All the applications were entered, all the money was allocated. So we saw a lot of that order backlog early. And then we generally burned it down through the remainder of the year. This year, it’s being administered very differently, and the government is now managing 4 tranches, quarterly tranches throughout the year. So there’ll be an application process, but then that money will get metered out for different times across the year.
So it does change the order pattern. And in our view, it is going to change backlog in Brazil. It’s going to be more staged and spread out over the year. And we’ll have to wait and see how that really corresponds into projects being shipped and revenue being recognized. Overall, it’s still very good news for the market. The government continues to invest and support in agriculture, but the timing is going to look different this year and not having any historical reference point on how these quarterly tranches are going to work, it’s tough to predict. But the strong market fundamentals there in our view, still will generate growth in the region.
Brian Wright : Over time after we get through this first year transition, do you think that, that will, over the long term, actually improve your visibility on that part of the business potentially?
Randy Wood: It could and it couldn’t. And I think I can’t or maybe won’t is when the program is administered once a year, you’ve kind of got immediate demand visibility of market demand. Now as these programs are administered quarterly, we’re just going to see that demand for different times throughout the year as opposed to a single time in the year. So I think it’s good for material planning, efficiency through the factory, I’d rather have flat volume flow month-over-month, quarter-over-quarter, we can run more efficiently that way. But it’s also nice to see the backlog and know what you’ve got in front of you. But I think our ability to support customers, run an efficient safe factory, I think that’s going to be certainly a lot easier with the way the program is administered this year.
And — but there’s no guarantee that this is how the government will continue to operate it. If they like what they see, I expect they would and could. If they see other administrative issues with managing this way, I wouldn’t be surprised if they went back to the older way as well.
Brian Wright : Okay. That’s really helpful for that color. Is there any way like can you help us with inventory, we’ve seen a nice reduction in inventory. Is that normalization pretty much complete? Or could that also be a benefit to cash flow in ’24?
Brian Ketcham: Yes, Brian. Yes, we had a very dedicated focus on inventory this year. And I would say it was really across the board. I mean, a lot of it came out of our U.S. plant, but we also had reduced inventories in Brazil and Turkey. And it was really reflective of during the pandemic and afterwards with supply chain issues and things we all carried like a lot of other companies carried more inventory than we normally would. So this is primarily reflective of just getting the inventories down to a more manageable level. And so yes, I think — we think there’s still opportunity there, but not to the level that we saw in 2023.
