Steve Lichtman: Thank you. Congrats on the quarter, guys. Fred, I wanted to ask about WRAPSODY, obviously we still have a little bit of time here, but with the completion of the trial getting closer and closer into view, can you sort of update us on your thoughts on the market opportunity there, particularly as we’re getting closer to filing here?
Fred Lampropoulos: Yes, listen, we started this project, as you know, a number of years ago, it’s a product that’s vertically integrated. I think that we are going to – we’ve closed the enrollment as you know, the last patient will roll out on the – in February of sometime, and we expect that we will then monitor, do the data cleaning and analysis phase early in the second quarter of 2024. And we plan to complete the clinical study report and be in position to file with the FDA, PMA by the end of the second quarter in 2024. Once we get to that point, then it’s up to the FDA to go through their process. I think we can’t say that we’ve always been very excited about the product. But I think, again, without trying to avoid the question, I’d rather wait until we have our update in February to lay it out as we get closer to the data, to be able to lay out what we’re going to do and what our thoughts are as we present our plan for next year.
Raul Parra: Yes, we’re really focused on just making sure that the filing goes according to plan. I think from a revenue and market opportunity standpoint, we’ll talk about that, I think post-PMA approval, but super excited about that and super excited about the quarter, just in general.
Fred Lampropoulos: Yes, yes.
Steve Lichtman: Great. And then just secondly, you talked your bullishness on continued free cash flow and your net leverage ratios remain low here. Just thinking about M&A looking forward, obviously you were quite acquisitive already year-to-date, but given valuations or should we expect a little more additional activity, looking ahead at a Merit?
Fred Lampropoulos: Well, listen, I think we all understand that the world has changed. The cost of capital is higher. We see that I mean, I don’t know what the fed’s going to do, but we saw what the economic activity was which was positive today. Values have come down. I think a lot of the other institutions that would be helpful to startups and companies like that I have quite a bit different view than they maybe did a year ago or even two years ago. Values are starting to come into place, as you’ll recall, I think we’re very disciplined and in some ways I don’t want to say criticized, but we were very cautious. We didn’t want to overpay now. All that being said, we’re probably seeing as much activity and opportunities.
We’ve just returned from TCT. There are a lot of opportunities out there. But the really important thing is, we have a plan. We have requirements that we want to hit. We have a commercial team and things have to fit for us. We don’t need to do anything. We can just do our organic. We have WRAPSODY coming. If they’re the right products, in the right channels of our product and meet the criteria and there are some that we think they can do that. So there’s a lot of stuff out there and we expect not that necessarily that we’re going to be very active and do anything, but that if it meets that and it meets the discipline that we require, we’ll look at those opportunities and they will be there. I have no doubt about that.
Steve Lichtman: Appreciate it. Thanks, guys.
Fred Lampropoulos: You bet.
Operator: One moment for our next question. Our next question comes from Jayson Bedford with Raymond James. Your line is open.
Jayson Bedford: Hi, good afternoon guys. Congrats on the quarter. Nice result. I apologize if I missed some of this. I got on a little late. Was Russia a headwind to growth in 3Q?
Fred Lampropoulos: Listen, we were able to get our licenses approved in late August, and we started making some shipments in September. So we had a small benefit, very small. But really, those things are going to roll into this fourth quarter. But the point is, we have our licenses. I think somewhere around 90% or 95% of our Russian licenses have been approved by the United States government. And so we will see that those will come back online to some extent now with all the things that are going on, Jayson, in Russia, in the Middle East, we built all of these things into our numbers, but there will be some Russia as we go forward.
Raul Parra: Yes, I think just generally speaking, EMEA was in line with expectations, Jayson. And I think even with Russia coming back, we did have some SKU rationalization products that sold through in the third quarter, which also helped. We won’t have those in the fourth quarter, so mix should be a little bit better. But, yes, I think generally we came in kind of in line with expectations.
Jayson Bedford: Okay, helpful. Just on gross margin did the move from the acquired products moving from upstate New York down to Mexico, did that have an impact on gross margin?
Raul Parra: No, those won’t have an impact until next year, Jayson. As you can imagine, we build bridge inventory just to make sure that things go accordingly. And as Fred mentioned, we are just in the process of moving things. We had the Biopsy device just left last week on a truck, and the rest of the products will continue to move over the next three months over to our Mexican facility. So really it’s a 2024 impact that you’ll see.
Jayson Bedford: Okay. And I think you mentioned geography as a bit of a pressure on gross margin. Is that not much, but is that a dynamic of mix? Or is that more a comment on the inflationary dynamics in Mexico?
Raul Parra: No, it’s really mix, product mix. Right. So we had some products, some SKU rationalization related to FFG, specifically our pack business. So you’ll see that our CPS products were up. Normally they’re flat. That really related to that business that we’re exiting just because the gross margins aren’t what we want them to be.
Jayson Bedford: Okay. And we haven’t talked about the move from air to water in a while, just kind of, where are you in that? And is that a bit of a tailwind to margin as we look to 2024?
Fred Lampropoulos: Yes. Listen, Jayson, our team has executed to plan. We still have more to go, but I think it’ll be a benefit to us moving forward. And our team has executed well on that.
