William Grippin: Great. Thanks for the opportunity good to speak with you all here. My first question was just you talked earlier in the call about getting out there and telling your story on the modules and the premium position that you kind of hold in the market. Could you address maybe what you’re thinking in terms of costs for ramping your DG customer base or investments that might be needed to do that and kind of backfill this lost SunPower demand?
Bill Mulligan: Yes. Will, yes, we’re trying to do it with a light touch approach. This is not an area where we feel like we have to make a huge amount of additional investment. We have the model working today in Europe. The basic plan is to replicate that model back here in the U.S. And again, we have a lot of people at this company that have a lot of experience in developing and operating this kind of a channel. So we know how to do it efficiently, and that’s our goal.
Peter Aschenbrenner: The only thing I would say, Will, is our — if you look at our historical OpEx. It’s — I think it’s fair to say that cost of running a channel sales organization is single-digit gross margin percentages. So it’s not it’s not a tremendously expensive thing to do, number one. Number two, these are people that we already have on staff now, largely as a result of our Soleria acquisition. So in terms of incremental spend, there’s some marketing expenses. But for the most part, I think we’re there to do what we need to do in 2024.
William Grippin: Got it. I appreciate that. Just last one here. On the production changes, you talked in the pre-announcement about replacing Maxeon 3 capacity with Maxeon 7. And now you’re talking about running down Maxeon 6. So just as you transition here, is there going to be a gap in your DG module production as a result of the shift? Just really trying to understand the cadence and timing of these changes.
Bill Mulligan: Yes. Well, as we mentioned in the remarks, we are going to prebuild some Maxeon 6 technology to bridge us through the transition. And again, this is an opportunistic time given with demand down to make a change like this and do a transition because you obviously can’t continue to manufacture at 100%, while you’re making a transition. So we’re going to prebuild some inventory, manage a fairly rapid transition then ramp back up, and that’s our bridging strategy.
Kai Strohbecke: And I just want to add in spite of prebuilding that inventory, we still expect inventories to go down from here with the expected shipments to SunPower and also further shipments into DG channels. So we are kind of modulating it in a way that we continue to sell more than we are making for the time being in order to get closer to an equilibrium.
William Grippin: You perfectly anticipated my follow-up. Thank you. That’s all I had.
Kai Strohbecke: Thanks, Will.
Operator: Please stand by for our next question. Our next question comes from the line of Andrew Percoco with Morgan Stanley. Your line is open.
Andrew Percoco: Great. Thanks so much for taking the question. And maybe this is a follow-up. So I’ll ask it. But as we think about moving into next year, obviously, you’re highlighting margin pressure could continue into early next year. How are you thinking about the cadence of free cash flow? And what point would you consider the need to raise additional capital? Are there any liquidity thresholds or balance sheet metrics that you’re hoping to maintain as you go through this transition period?
Kai Strohbecke: Yes. Thank you, Andrew. So I think it has, of course, a lot to do with the things that we have been discussing. You’ve seen the negative cash flow in this quarter, which had a lot to do with the growing imbalance between our manufacturing operations and sales that has developed during the third quarter, and that’s, of course, then reflected in changes in working capital. We have taken all these decisive actions on the working capital side on the side of our manufacturing footprint and so on and modulating the capacities in order to address, especially that. So we think that with the current cash balance that we have and all these measures that we talked about during the call and in the prepared remarks, that we are in a good position to generate sufficient cash and maintain sufficient cash levels for our existing business.
Andrew Percoco: Great. That’s super helpful. The rest of my questions have been answered, so I’ll take the rest offline. Thank you.
Kai Strohbecke: Thanks, Andrew.
Operator: Thank you. Ladies and gentlemen, I’m showing no further questions in the queue. This concludes today’s conference call. Thank you for your participation. You may now disconnect.
