Laura Champine: Got it. But any more granularity you can give me on how much the negative impact was on the acquired revenues to the margins in Q4?
Chris Wellborn: Well, the businesses are fully integrated. I expect that they are somewhat dilutive as the markets have slowed down and were underutilized.
Laura Champine: Got it. Thank you.
Operator: And our next question today comes from Matthew Bouley with Barclays. Please go ahead.
Matthew Bouley: Hi. Good morning. Thank you for taking the questions. Just zooming into Global Ceramic, obviously, price cost was positive for the entire enterprise, but it was still negative in ceramic. Any color on how you’re expecting price versus cost to play out sequentially into Q1 in ceramic? Thank you.
Chris Wellborn: Yeah. I’ll comment on ceramic. So Q4 was in line with what we expected. Year-over-year, margins were impacted by lower demand, price/mix and FX. And then we also took extra production downtime around the holidays to manage our inventories. In that environment, we still were able to enhance our mix with new products. We reduced our cost and we’ve increased our productivity, and we also got those acquisitions integrated. You are seeing some decline in price/mix as the energy prices are coming down, and most of those have been passed along to the consumers.
Jeff Lorberbaum: And I would say sequentially, so from — if that’s what you’re seeking in, from Q4 to Q1, I think you’ve seen a lot of that [bottoming] (ph) out, and it should actually slightly improve again sequentially.
Matthew Bouley: Got it. Okay. Perfect. Thank you. And then second one, obviously, you’ve gotten — or you’ve announced a few cost reduction programs over the past year. Can you just sort of remind us of the magnitude of these cost reduction programs together? And are you kind of at run rate today in terms of those savings flowing through, or there’s additional benefit to kind of accrue as we move through 2024? Thank you.
Jeff Lorberbaum: So, we focused in the restructuring actions late over the last 18 months of trying to take out high cost assets, aligning our capacity, and implementing other lower cost processes really across all three of the segments. Collectively, there are about $150 million of cost reductions that we should garner from these actions. Almost half of that has been realized in 2023. So, you get the remaining portion to flow through 2024. Of course, you’re seeing some of that in 2023 being offset by other factors. We’ll continue to evaluate the current situation and take actions as necessary to continue trying to drive improved results.
Matthew Bouley: All right. Thanks, guys. Good luck.
Operator: And our next question today comes from Kathryn Thompson with Thompson Research Group. Please go ahead.
Kathryn Thompson: Hi. Thank you for taking my questions. Tagging on the previous question, you’re largely behind the bulk of cost cutting measures. But earlier in the call, you said that you don’t know when — you can’t predict M&A. But that said, you can and we have plenty of public companies and private companies that can comment on their path for growth, including the balance more focused on organic growth and what the pipeline looks like for M&A. So, could you please comment on your thoughts on growth going forward, both from an organic, focusing on what products and geographies are greater focus, and then comment on just the flavor of the pipeline for M&A? Thank you.
Jeff Lorberbaum: Let’s start out with all the businesses are underutilized the capacities that we have. So, the goal is to drive the utilization of the present product categories and operations that we have as the business improved. On the other ones — on the other product that we’re investing in are the areas where before we went into this slowdown that were more constrained, and we’re investing in those. Those include the LVT category, which we’ve — in the process of changing the plants over and they should be filled up as we go through this year. We’re introducing a new LVT renewable polymer core structure, that’s going into the marketplace and being well accepted. In laminate, we’re introducing new technologies and acoustics and durability to improve the use of those assets.
Ceramic, we’ve putting products in that have differentiated color intensity, textures and three dimensional surfaces. Countertops — but it’s in every product category. So, the main objective is to use the assets that we own and drive them up as we go through. On the acquisition side, there are no pending acquisitions sitting at this moment that we’re ready to close, is that we’re always in the market to look at opportunities. But there’s a large difference between buyers and sellers at the moment, which we discussed before. So, there’s nothing immediate waiting to be closed at this point.
Kathryn Thompson: Any type of — just in terms of — from an M&A standpoint, is there a — just a further clarification or confirmation in terms of geographic and/or product focus?
Jeff Lorberbaum: The — was that an acquisition question or an investment question?
Kathryn Thompson: That’s an acquisition question. It’s an acquisition question.
Jeff Lorberbaum: We just — in Latin America, we completed two acquisitions. They are basically fully integrated. And so, there’s nothing more to do in those. Those managements are taking care of those. We have a number of bolt-on acquisitions that we’re finishing up and improving that we haven’t got all the benefits across the world, which we’ve gone through at earlier points. Those are going through. We really don’t have a specific piece that we need to drive. I guess, if I had to pick one, we have our insulation business, which the insulation business is growing. So, I would say that investing in additional assets in it would be done sooner than other ones to expand capacities in an additional area. And then on the acquisition side, it’s really more where do we find the right acquisition that fits in with a business.
