Matt Miksic: Okay, thanks for that. And then just to follow-up on sort of cash flows and maybe the ability to sort of reinvest here and your maybe priorities for reinvesting, some of the R&D spend that you’re unwinding into the end of this year. If you could provide any color on your most recent thought? And I understand there’s a stock plan underway, and there’s a new CEO potentially coming on board soon. And you want to get ahead of that, but your latest thoughts on how to think about that adding back to the P&L and being redeployed for what kinds of investments? Thanks.
Alex Shvartsburg: Matt, this is Alex. I’ll take the free cash flow. Our target for this year is $85 million to $95 million of adjusted free cash flow. Our goal is to continue to drive cash conversion. That’s what the organization is focused on. That is assuming an expectation that we continue to see improvements in profitability and work in capital management. As far as capital deployment for next year, we’re not ready to talk about that at this point. Obviously, there are multiple scenarios in terms of success with depression and getting us ready for a potential launch there. We’ll update you guys as we get into 2024 early in the first quarter.
Matt Miksic: Okay, fair enough, thanks.
Bill Cozy: Thank you.
Operator: Thank you. Our next question comes from David Rescott of Baird. David, your line is now open. Please go ahead.
David Rescott: Hey guys, thanks for taking the question. I wanted to start on essence and kind of the margin contribution from that segment. I appreciate the comments around the pricing premium. I know it’s really in the early days here, still just getting underway, but just wondering how we should think about maybe the contribution or leverage from that product as that ramps and as you move into 2024 beyond just relative to the rest of the portfolio?
Bill Cozy: So this is, as far as Essenz margins are concerned, we expect, sort of, some margin improvement as we scale the volumes there. The cost base is slightly higher and we obviously compensate for that with our price premium at this point. Essenz, as it continues to ramp into 2024, will have a margin improvement for the cardiopulmonary business. Our capital business has a higher margin base than our consumable business. So slightly different perhaps from other companies, but that’s the way we think about the business. That Essenz will have a strong contribution to our gross margin improvement in 2024.
David Rescott: Okay, that’s helpful. And then just two quick follow-ups on I think some prior comments that you made actually at our conference. Just wondering one, I think the prior expectation maybe had been to have a CEO replacement in place by January of 2024. So wondering if that’s still the expected timeline? And then second, I think we had asked in the past just about whether or not any of this concern or anything you’re seeing around GLP-1s are impacting the enrollment of the OSPREY trials. I just wonder if there’s any updated thoughts on both of those? Thank you.
Bill Cozy: Hey, thank you. I’ll take the first one. You’re exactly right. We had talked back in April at the time of my arrival about a six to nine month window. And of course, that nine month window would take us into the January time frame. As you would guess, we’re not operating under any deadline. We’re going to find the right person. We’ll know that right person when we see them. Every effort is being made to get that person in sooner. I want to make sure that, that commitment is clear. At the same time, we’ll find that right person, and we won’t be pushed by any time frames or calendars or anything. So the Board’s very sincerely committed to the spec, as I mentioned just a few minutes ago. And I don’t think we’re going to see as waiver from that. Now Matt, would you comment on the GLP-1 please?
Matthew Dodds: Sure, on the GLP-1s we don’t believe we’re seeing any impact on the enrollment of OSPREY. And also, you know, that trial is relatively small, 125 to 150 patients as our expectations. So we’re not seeing anything.
David Rescott: Okay, great. Thanks.
Bill Cozy: Hey, thank you.
Operator: Thank you. Our next question is a follow-up question from Mike Polark of Wolfe Research. Your line is now open. Please go ahead.
Mike Polark: Hey, thank you for taking the follow-up. Just one, Alex, I thought in your prepared remark you said something about the tax rate. What did you say? What’s a good input in ‘24, ‘25?
Alex Shvartsburg: Yes, thanks Mike. Recall from our Investor Day in December of 2021, we kind of foreshadowed an increased tax rate. At that time, we were saying that over the course of 2022 to 2024, we’d expect the tax rate to be in the range of 15% to 20%, where we’re going to see that happen in 2024. So that’s what I would recommend that you guys start modeling.
Mike Polark: So I just want to be clear, though. This is for your adjusted reporting. The adjusted tax rate goes from something like 10% this year to 15% or 20% next year? And if that’s true, what’s driving it? I mean, what are the changes?
Alex Shvartsburg: Yes, that is correct. The changes are we’re enjoying a very low tax rate today. It’s very different versus, if you look at some of our competitors and we expect that to, kind of, normalize as some of our tax planning. We lose the benefits of some of the tax planning that we’ve enjoyed over the last few years.
Mike Polark: Okay, it’s just that feels, yes, it feels like a big step up. So, okay, I appreciate the comments. Thank you.
Bill Cozy: Hey, thank you.
Operator: Thank you. At this time, we currently have no further questions. So I’ll hand it back to Bill Cozy for any further remarks.
Bill Cozy: Thank you everyone for joining us on today’s call. On behalf of the entire team, we appreciate your support and your interest in LivaNova. Thank you.
Operator: Thank you.
