Now that we have those assets, we have something to sell and help them solve their problems. They’re looking for us as well as our competitors in terms of how we can advance the next-generation of data centers around high-performance computing driven by all the things that we know, AI, AL, MV. And not having the TMG assets, we weren’t in those discussions, but we are today now.
Jeff Van Sinderen: Okay. And then, the new liquid-cooled CDU, that will be out in Q4 or Q1, we think?
Neil Brinker: Yeah. We’re targeting for Q1 of the next fiscal year and getting on some pilots and working closely with our customers, with a couple of our co-location customers, correct.
Jeff Van Sinderen: Okay. Great. Thanks for taking my questions and best of luck.
Neil Brinker: Yeah, of course.
Operator: [Operator Instructions] Our next question comes from the line of Brian Sponheimer with Gabelli Funds. Please proceed with your question.
Brian Sponheimer: Good morning, everyone. Congratulations on another great quarter.
Neil Brinker: Thanks Brian.
Brian Sponheimer: And a lot has been addressed already. Just on the German businesses, I’m looking at the cash flow statement, doesn’t look like there was any cash in. Were you able to jettison any liabilities with those businesses when they went out the door?
Michael Lucareli: Yeah. Hey, Brian. It’s Mick. Yeah, there was actually a small cash benefit on the ultimate transaction, but immaterial. And then two answers on your liability question. Actual liabilities, the biggest one on the balance sheet would be some pension liabilities that went, and that was a fairly material number, which we’re happy about. And then the second one, and you know it well, it was the potential liability. And right, if you took each of those facilities in a situation where we would exit them, the liability that Modine and the shareholders would have if we would have retained them was quite a large potential liability.
Brian Sponheimer: Okay. Yeah. I certainly appreciate that. And forgive me, but these businesses, so the roughly $30 million or so of revenue, was not in the prior 6 to 11 sales contemplation for growth that was given at the end of the second quarter?
Michael Lucareli: We had built — we factored that in, Brian, just in the days heading into our earnings call, and we were trending a little bit lower towards the lower end of the range. What we did this time is we trued it up, we made up some adjustments, and then on top of it for our remaining automotive business, we took that down a little bit.
Brian Sponheimer: Okay. All right. Understood there. I guess last one for me. Last year in the fourth quarter, you had evaluation allowance adjustment that tweaked your GAAP earnings. Anything as we think about this fourth quarter from a tax perspective that could move the needle one way or the other? Obviously, the algos are going to see year-over-year declines in EPS, but anything we should be thinking about for the fourth quarter here?
Michael Lucareli: No. A good point about the reported number, that’s going to be tough. We will do our — we’ll make sure we highlight that, but from this coming Q4, we’re not anticipating any large events or impacts to that.
Brian Sponheimer: Understood. Well, you all keep raising the bar higher and higher each quarter. So, congratulations, and I look forward to talking to you later.
Neil Brinker: Thanks Brian.
Operator: Our next question comes from the line of Tim Moore with EF Hutton. Please proceed with your question.
Tim Moore: Thanks and congratulations on the continued impressive EBITDA margin expansion and self-help catalysts to drive highly impressive EPS growth that even exceeded my street-high estimate. I got a really good sense of the data center’s differentiation edge when touring that facility in August in person, but I just want to address another business line, actually. For advanced solutions, those revenues were flat sequentially in the quarter, but your guidance at the midpoint implies about a 25% sequential growth in the March quarter from the December quarter. Could you just give us a little bit more of an update on battery thermal management as we kind of look out over the next 12 months? And that timing, without pinpointing exactly the $160 million sales and maturity, how far out do you think that is? And then while you’re on the topic for thermal management, how’s planning of the launch in Europe going?
Neil Brinker: Good question. Thanks for the questions. This is Neil here. So, we continue to invest in our battery thermal management system and electronics cooling package. Certainly, we’re seeing continued interest in the product, and we’re expanding our capability and capacities. We opened up the earnings, in my script at least, to talk about the $160 million that would be at peak volume. So think two to three years out, that’s when you’re running at peak volume within these programs that we want. So, we’re excited about that because the trend continues to grow quarter-over-quarter in terms of the potential revenue there. More investments are being made, and we’ve been in contact and had some really good conversations in Europe with some of our customers that we’ve targeted, and the fact that we’ve been public about the expansion, and an existing facility that has existing infrastructure and Modine employees that are already very attuned to making sure that we have good reliability, quality, and delivery for this industry has been well received.
So, we’re going to continue to ramp up our investments. We’re going to continue to open up the space in the facility in Italy for us to be able to grow in Europe, and we’ve had positive conversations with those customers, and we continue to trend in the direction that we’d expect with the amount of investment that we put into this business.
Tim Moore: Great. That’s really helpful, color. Just switching gears, during my visit in August, the facilities, not just data centers, but HVAC, I get a sense of really the customer’s focus and the emphasis there live in the shops, dedicated customers and such. But I’m just wondering, as you progress through 80/20, more so on performance technology side, are you uncovering more savings and efficiencies than you budget or expected a year ago? And then I’m just wondering, just thinking about this whole customer maximization, as you go through both segments on 80/20, how do you maybe avoid going too lean as you achieve the value-based pricing?
