Fred Hite: I think the comment was, in the fourth quarter, gross margin was 68.5%, which was lower than last year. And that reduction between the two years in the fourth quarter versus the 72.9% we saw in the fourth quarter of 2021, so that reduced gross margin rate is probably €“ half of that reduction is from the hire set sales at zero cost and the other half of it is from the FIREFLY.
David Turkaly: And the fair value adjustment to $26 million, what was that for?
Fred Hite: That was in the third quarter related to the ApiFix. So we updated the model. And our third party valuation firm sent us a new accretion model, which changed the accretion on ApiFix. As you may recall, we have a system sales payment out, an earnout payment based on sales in year four, which is April of 2024. So that adjustment was a favorable adjustment in the third quarter of 2022.
David Turkaly: Lastly, the $25 million in sets, I think in the past you’d said some of the new acquisitions, maybe before MD Ortho, maybe ApiFix and Orthex had sort of a different investment needed, so the $25 million that you’re forecasting this year, I guess any comments or color on how maybe the new newer products are a component of that or what’s core versus what’s new or how it maybe MDO and Pega compared to the other acquisitions you’ve done from a set standpoint?
Fred Hite: Absolutely. Since the benefit of MDO is . So that specialty bracing business can grow very aggressively without deploying more and more capital as we are on some of the legacy businesses. The Pega side, I would say, is more similar, although they have a high return on their sets being deployed. It’s similar to the legacy business. So, we are deploying capital on the Pega side of the business in 2023. We’d expect to do that for years to come. But in that $25 million is definitely some efficiencies from no capital for MDO growth, ApiFix growing at tremendously efficient capital, and as well you mentioned Orthex, which is probably our second highest product from an efficiency standpoint. So, there is the efficiencies built into that $25 million number for 2023, and we would expect that to probably increase, particularly as ApiFix continues to become a bigger part of the business.
Operator: Our next question comes from Sam Brodovsky with Truist.
Samuel Brodovsky: Just two quick ones to start on MDO and Pega. In terms of the cadence of growth, should we expect those businesses to follow the broader company seasonality in 2023 or can growth start to pick up a little more and maybe look a little off from that? And then between the two businesses, should we expect fairly similar growth rates for both or maybe MDO grows a little faster, given it’s got about a quarter headstart on Pega?
David Bailey: Yeah, I would say that the MDO business, the seasonality of the MDO business is a little different than our traditional implant business. I believe there is some seasonality there, but it’s not a lot. So that should hopefully, as that business grows, start to flatten our seasonality a bit. Certainly, it’s not big enough at this stage to have that big of an impact overall. But over the course of the next several years, as it grows, it’ll flatten that seasonality. So, Pega is very similar in terms of the seasonality, maybe a little bit flatter because it’s a trauma and limb deformity product. It’s not as impacted, obviously, what we see in the big summer scoliosis selling season. I think we expect both of those businesses to grow at similar rates, again, north of 20%, but kind of similar rate.
