Philip Shen: Hey, thanks for taking the questions. First one is on margins. So I know you’re not providing guidance for ’24, but you did make a commentary that you expect margins to recover until back half 2024. So I was wondering if you might be able to quantify in any way what margins might look like in Q1 and 2? Should we expect it to be similar to current levels or a modest recovery in Q1 and 2 and then stronger performance in the back half of ’24. Thanks.
Kai Strohbecke: Philip, this is Kai. I think for the question. Yes, we’ve we’re not giving guidance yet. We — as you said, we hinted to margin and EBITDA recovery in the second half, which is, of course, based on the new introductions that we’re going to have of seventh generation performance series, the Maxeon 7 further progress also on our US utility scale. I think we had something in our prepared remarks where we said that we expect further cost reductions there, efficiency improvement and ASP increases, which should get these margins up potentially into the double digits. So that’s going to be a positive thing, of course, working through inventories, of course, of some Maxeon 3 and Maxeon 6 inventory still in the first half of the year and probably also a little bit of a tail in the second half.
I would say in terms of the fourth quarter and how things are going to develop from there, you have seen in my prepared remarks that I was listing some nonrecurring items that are going to affect margins in the fourth quarter guidance. We expect those to be nonrecurring, and we are still working on some of those. So we also expect that these things are going to get better as we reengineer our overall manufacturing footprint, take costs out, rightsize things. And then go into 2024 with better spring.
Philip Shen: Okay. Thanks, Kai. On the flip side, let’s talk about pricing, again, if we can for IBC. You’re going to be controlling your own destiny, Bill, as you mentioned earlier, a number of times. And so that happens in March. And heading into March, I can imagine you’re working on deals to try to secure agreements with different players. And so I was wondering if you could share how those conversations might be going now? Is it a little bit premature to get a feel for how close you are in locking down volume and pricing? And then some of our checks suggest modules in the US resi channel may not clear until after Q2 of next year. So high efficiency module pricing has already come down dramatically since the summer. What kind of pricing can you guys secure in a post SunPower relationship with your benchmark.
Well, you guys are typically the benchmark. But as you think of other peers that are trying to do what you guys do and their pricing is, I don’t know, maybe $0.40, $0.50 for a lower volume, but maybe $0.40 plus with that level for higher volume. Are we going to need to see you guys pricing that kind of $0.50 range as we think about modeling ASPs for our IBC volume in ’24? Thanks.
Bill Mulligan: Right. Thanks, Phil. Yes. I think — first of all, I want to just clarify that we’re actually free to approach sent our dealers starting January 1. We have exclusivity on the Maxeon 6 product through the end of Q1, but we are able to sell Maxeon 3 and Maxeon 7 starting the first of the year. It is a little early to see how that’s going. We’ve obviously been very careful not to approach SunPower dealers while the contract is still in place. And that remains to be the case for a number of dealers, not all of the dealers, but a number of the dealers through the end of the year. We’re just 6 weeks away or so, three of those weeks are holiday weeks. So January 1 is going to be here very quickly, and we’ll engage super quickly at that point in time.
With regards to ASPs, we’re still actually running quite healthy ASPs in Europe. We made the choice not to chase ASPs to the bottom. We’ve always had a premium product. We play in a premium segment. We sort of feel like it’s a fool’s errand to just race to the bottom. So we prefer to take a little bit lower volume and maintain our pricing. We’ve done very well with that in Europe state. Pricing in the US is actually still today fairly substantially higher than what it is in Europe, even though it’s lower than it has been for sure. But again, with eliminating the mark-up that SunPower puts on our panels being able to access these dealers directly. We think we’ve got headroom there to really be competitive in the market in the current situation.
And again, a lot of it is being able to sell the premium product story. I’m super excited to have Vikas Desai back. Vikas and I worked together from 2005 to 2010 and he was the architect of this. He knows how to tell the story. We’ve got the best panels in the world. We just got to get out there and tell that story. And it’s very effective, if you do it right. And we’re going to be doing that. And again, I think we’ve got headroom. But we feel good about our pricing. It’s going to be higher than what the numbers you were throwing out for sure, substantially higher.
Philip Shen: Great. Okay. Thanks. A couple more here, and then I’ll pass it on. In the SunPower 8-K, there was some mention of effective components and some sharing or split between you and SunPower on the cost of those defective components. Can you provide a little bit more color on what that is and maybe quantify what it might be and what the split might be between the two companies? And then shifting over, I think, in your release, you guys gave some detail on some $30 million payment security bond that SunPower sped up. Can you provide a little bit of detail on the mechanics of that? And how that might work? Thanks.
