Mike Harrison: Okay. Historically, you guys have been kind of closer to that 150 to 175 range. Is that kind of where you could potentially get to as we think about next year and beyond?
Erik Aldag: Yes, absolutely. I’d say we’re sticking to that 7% of sales kind of ratio. This year, the biggest impact has been, in the first half we still had significant year-over-year inflation to contend with. And so, that’s continued to kind of push out the normal working capital cycle. But the second half should be very strong. We’re expecting $115 million to 135 million of cash from ops in the second half, $70 million to $90 million of free cashflow in the second half. So, that’s turning around in the short term here.
Mike Harrison: Excellent. Thanks very much for your help.
Operator: Our next question comes from the line of David Silver with C.L. King. Please go ahead.
David Silver: Yes. Hi, good morning. So, a few topics, and this will be a little scattered. The first topic I wanted to ask you about, Doug, maybe would be your outlook or your take, your perception of the Chinese market, maybe Asia in general, but really China in particular. So, I’m about halfway through my earning season, and every company that has exposure there has called that out as kind of a negative comparison year-over-year. However, I think your company, if anything you were a little more positive, and I think it was a positive factor you called out on PCC and maybe one other area. So, from your perspective as someone producing in country, could you give us a sense of how their reopening or their economic recovery has gone year-to-date?
And then secondly, maybe just a sense of overall demand for their products, I guess the export-based products or things that move out – are made in region, but move out. Just your sense of the activity levels in Asia and for you in Asia in general, and China in particular, please.
Doug Dietrich: Yes, sure. So, yes, I’ll go back to the comments I just made in my remarks. We operate – I think every company’s a little bit different in China, right? And it depends on what you’re doing there. I guess we are largely localized. And what I say about that is, we kind of source, produce and sell in the region. So, we’re not a large export – we’re not reliant on exporting or importing into the region. It’s largely localized. That’s the first piece. Second piece, it’s still a relatively small region for us. It’s about 8% of our revenues. And I’m speaking about China, not Asia. The dynamics for us are a little bit different. They always have been. Yes, demand levels do affect us. Economic activity, whether it’s 6%, 8% or 2%, will have an effect on that 8% of our sales.
But our growth and how we’ve been growing in that market over the past 10, 15, actually 20 years now, is driven more by substitution and technology, new technology introduction. So, to give you an example. In the metal casting business, bentonite is always consumed as a base in the binding systems that every foundry uses. But the technology that we deploy, which creates a custom blend, is still bentonite-based, but it is a higher – it is a more efficient way of making a cast product. It saves the foundry money in terms of throughput, productivity, scrap rates, quality, et cetera. And so, we are able – and that’s also – we sell it at a higher price point than a base ton of bentonite. So, we’re able to, through this technology, increase our sales within a given amount of economic activity.
