Meenal Sethna: Sure. So I would take a step back on electronics, but a lot of the work that we had done was really very foundational, right? We talked about the past few years, all the work that we had done is relating to the IXYS acquisition, a lot of supply chain work volume place of a key part in that as well and just some operational efficiencies that we’ve had. For us, on the pricing side, right, the pricing was really meant to offset the cost inflation that we have seen. So it wasn’t a change in the market or changes in the long-term pricing strategy necessarily, but that was really to make sure that we were keeping up and/or in some cases staying ahead on the cost inflation side. So with the sustainable floor of the things that we have done, all the efficiencies, et cetera, and volume starts to come back, right?
Dave talked in an earlier question about at some point, we’ll see inventory destocking stop and we’ll start to see some recoveries. The incremental from those from every sales dollar tends to be pretty strong for us. So that will be a big part of margin recovery. I’d also say during this time, we continue to manage our cost structure and our discretionary spend as we always do during the challenging market times. So while we may have quarters that are not at the 20% range, I still expect the year to be at that level.
Matt Sheerin: Okay, great. Thank you. And just back to the order rates in electronics. Could you tell us, Dave, what the book-to-bill is? And has that changed materially in the last quarter or so?
Dave Heinzmann: Yeah. We have not really – it remains well below one still. And we really haven’t seen it change too much from third quarter to fourth quarter to the end of January. It’s been reasonably stable as there’s continuing to work and bring down that inventory level at a distribution partners of ours. Although, it’s certainly not above one, where we loved to see it, it’s been reasonably stable at the level it’s at.
Matt Sheerin: Okay, great. And just one last question, if I may. Just regarding your M&A strategy? And obviously, that’s been a big part of your growth rate. You’ve been very successful there. But it sounds like you’re, sort of, and really focused here on trying to improve margins across the business, dealing with this correction. So are we to assume that you’re going to be maybe more focused on the business than acquisitions or if there’s attractive opportunities will you do that?
Dave Heinzmann: Yeah. No. We believe we can walk and chew gum at the same time on this. So actually, M&A continues to be a focus area for us. Our balance sheet is quite strong. We have a good funnel of opportunities as we’ve looked to diversify the end markets we’re targeting and the technology niches where we think we can add value with our current customers. We continue to evaluate those. Yes, we haven’t had acquisitions we’ve announced in the last couple of quarters. However, they can be a little lumpy. So we continue to drive that. We continue to see that is a way to sustain and continue to grow our organic growth pattern over the long time. So while we clearly are focused on execution and making sure that we’re managing through the downturn more effectively than we have in the past, which we’re demonstrating. We still see M&A as a key opportunity for us, and we continue to be quite busy in that space.
Matt Sheerin: Okay. Fair enough. Thanks very much.
Dave Heinzmann: Thanks for your questions, Matt.
Operator: Your next question comes from the line of David Williams with The Benchmark Company. Your line is open.
David Williams: Hey, good morning. Thanks for letting me ask the few questions here. So I guess maybe if you could just talk first about the geographic demand divergences maybe in auto, but also industrial, if you’re seeing anything from the industrial standpoint that stands out geographically? Thank you.
Dave Heinzmann: Sure. I would say, if we look at the fourth quarter from a geographic standpoint, maybe the big area of difference is in transportation, where China was quite strong in the fourth quarter and really outperformed what we expected there. With the launch of a lot of new vehicles, both high voltage but a whole lot of low-voltage applications, where we saw really strong performance there. I would say North America, although overall car build was okay, with the UAW strike in the fourth quarter, GM, for particularly, were a little softer for us than we anticipated, and we have high content opportunities there. So that maybe hurt us a little bit there. But overall, that’s the mix we saw in transportation. On the industrial side, what I would say is our industrial is probably heavier North America content with growth in Europe and in Asia.
And we generally continue to see broad-based softness in China that kind of cross everything but transportation. We see a lot of softness in the Chinese market right now. Other than that, I think North America we saw particular softness in residential HVAC, which is a market that we target in industrial. And you may have seen reports there with kind of excess inventory of units in the field and at distribution. Some of the HVAC residential in North America was down like 30% in the fourth quarter. So, certainly, that weighed a bit on us there.
David Williams: Great. Thank you. And then maybe just — the destocking seems like it’s been kind of rolling through and been heavier in certain segments. But just are you seeing, I guess, areas where the inventory is running lean or has come back to more normalized levels? Or are you seeing maybe just a commentary across your segments in terms of the inventory? Thanks.
