Operator: [Operator Instructions]. Your next question comes from the line of Eric Coldwell from Baird.
Eric Coldwell: I had a couple here. First on the commentary about cash flow normalizing in 2024. To be fair, Ed, I’m not sure there’s really been a normal year since you got to that company. Cash flow, $114 million in 2019, then it was $280 million, then it was $74 million, then it was $158 million. Of course, this year was a blowout. What is normal? And do we just take the simple average of the four years before this year and call it $150 million of free cash flow? Or is there a ratio you can share with us that you think is a normal ratio of some sort to get a better sense on this year?
Alexander Bruni: This is Alex. So it’s definitely a fair question and a fair observation about not having a normal year. So as we go forward – at Investor Day, we talked about having $400 million of free cash flow, operating cash flow in 2028. So I think as we see the impact of the investments that Ed has talked about this morning, we would expect to ramp up over the next few years to be in line with that, that we think that that reflects kind of a good goal of operating cash flow once our investments take place.
Eric Coldwell: Would 2024 be in theory – I know things can bounce around a lot and even calendar days can have an impact each year, but is 2024 in theory the low point and then a ramp up to that $400 million in 2028 pretty linear. Is that the process?
Alexander Bruni: I’m not sure it’s exactly linear, but I think that’s a fair approximation of how I’d think about it.
Eric Coldwell: On EBITDA, I know there are some variables that are included in your EBITDA add-backs that are probably next to impossible to precisely forecast. So, definitely give some hall passes on that, but technically you did miss EBITDA by about $10 million to $30 million on the range for 2023. And I think a chunk of that was a lower LIFO charge add-back probably than you expected in the fourth quarter. I was hoping you could quantify that. For 2024 guidance, again, you said LIFO would normalize and, frankly, just not sure what that means. What is the 2024 guidance inclusion for a LIFO charge or credit or whatever it is and how does that compare to the absolute amount in 2023? A – Alexander Bruni On this complexity here, so just to kind of go back, when we reset or redefined the adjusted EBITDA in Q1, we talked about having $25 million in 2022 and about $30 million in 2023 combined for LIFO and stock comp.
That is roughly where we ended the year, although I will say our projections did fluctuate. And so, that was part of the difficulty in 2023. There was about $2 million of LIFO in 2023 and about $23 million in stock comp. We expect that to normalize in 2024 and to be just north of $50 million combined.
Eric Coldwell: $50 million of addback?
Alexander Bruni:
Eric Coldwell: And last one, I’m going to go a little away from the call here. We did recently notice a headline that the West Virginia University, WVU, medicine deal has been delayed – or at least some of the ramp, the build out of the site has been delayed by a year. Can you tell us what’s going on there? And is that having any kind of an impact on the 2024 results or outlook?
Edward Pesicka: Eric, no impact at all. It’s actually working with the contractor to get the facility built. That’s the delay on the construction. We’ve actually extended our long term deal with WVU. And so, there’s zero impact on 2024. That business, we’ve had for the last two years. It’s been served out of another distribution center. It’ll continue to be served out of another distribution center until we get the facility completed. WVU has been an incredible partner to us. And there’d be no impact at all in 2024 because we are serving the business out of another distribution center and it’s just a matter of getting the new one up and running for them.
Operator: We have no further questions in our queue at this time. I will now turn a call back to Ed Pesicka for closing remarks.
Edward Pesicka: Thank you, operator. First of all, I want to thank everyone who joined us on the call today. Besides those on the call, I want to thank our teammates across the globe that have really worked tremendously in 2023 and to position us to where we are today. I also want to thank our customers, our patients, our partners, as well as our shareholders. As we reflect on where we are, we firmly believe that we have the right team in place. And even more than that, we have the right strategy. That strategy has enabled us to continue the momentum that we’ve accelerated during the year as we saw tremendous progress from Q1 to Q2 to Q3 to Q4 and exited the year with strength. So as you can see, I’m pretty excited about where we are right now, but even more excited about the future.
And I look forward to sharing our progress with you as the year progresses. So just again, thank you everyone for joining us today and look forward to talking again after the first quarter results. Thank you.
Operator: This concludes today’s conference call. Thank you for your participation and you may now disconnect.
