Todd Leombruno: Joe, too, we talked about it, but if you think about that mix, it’s nearly 50-50 aftermarket versus OEM in the aerospace business. So that’s helpful as well.
Joe Giordano: Yes, for sure. Just on price, you mentioned you’re back to like normalized situation here. I guess inflation is kind of tough to figure, you have some things going up like copper, something is going down. If we get into a situation where inflation is more consistently rising than falling again, how do you think about your customers either willingness or ability to accept price to the same extent that they did last cycle?
Jennifer Parmentier: Well, I think we’ve talked about how our pricing team, our pricing muscle is strong. And one of the things that I think we even got stronger during these last couple of years is really looking at the total cost of inflation. So it’s not just material, right? It’s all those things that just hit extraordinary levels all at once. And while those aren’t easy conversations, you know their conversations that we had and if we would need to have them again, we would. They’re based on facts, they’re based on data. And we would cross that bridge when we come to it. But as I mentioned earlier, we’re back in more of a normal pricing environment, but I believe it’s sticky because inflation is still out there.
Joe Giordano: Thank you guys.
Todd Leombruno: Thank you.
Operator: Our next question is from the line of Brett Linzey with Mizuho. Please proceed with your question.
Brett Linzey: Hi. Good morning all.
Todd Leombruno: Good morning, Brett.
Jennifer Parmentier: Good morning.
Brett Linzey: Yes. First question is on business realignment charges. So it looks like the 2024 expectation dropped to $57 million from $70 million, anything to glean there? Is it just timing on projects? Or is there some costs to achieve perhaps moving lower, any thoughts there?
Todd Leombruno: Yes. It’s just a minor tweak. I would call it more timing than anything, maybe getting some of those done at a little bit of a lower cost as well. So we just kind of updated it based on the best that we had from the team.
Brett Linzey: Okay. Great. And then just on pricing, I know you don’t disclose actual price, but was it positive in both those industrial segments. And I’m just curious on any competitive behavior on price and some of the more challenged regions like Europe or Asia?
Jennifer Parmentier: No, you’re right. We don’t comment on the exact price. And as I mentioned earlier, we went out early and often. So we’ve protected our margin to make sure that it maintains neutral going through everything that’s gone on in the last couple of years, and that’s where we stand today with price.
Todd Leombruno: Yes. I mean if you’re asking about rolling price back, we’ve not done that, right? Jenny mentioned that we’re still in an inflationary environment and a lot of those costs that went up, have not gone back down. So we feel very much tied to the price. We don’t do it randomly. We do it when we need to and that’s kind of where our process has been.
Brett Linzey: Okay. Great. Congrats on a performance.
Todd Leombruno: Thanks Brett.
Jennifer Parmentier: Thanks Brett.
Todd Leombruno: Hi Rob. I think we’ve got time for one more question here if we’ve got somebody.
Operator: Sure. Sure. Our next question will be from line of Nigel Coe with Wolfe Research.
Todd Leombruno: Nigel, are you there?
Nigel Coe: Thanks. Yes. I am here. Can you hear me?
Todd Leombruno: Good to hear you.
Nigel Coe: Yes. Yes. Good. Thanks for squeezing me in. Okay. So coming back to April, let’s look at it again. Maybe could you just hone in the North America, where you’re seeing the improving trends. And the spirit of the question is that it feels like in your off-highway and even in the on-highway customers, things aren’t necessarily getting better. So I’d be curious on which pockets of customer groups are you seeing that improvement? And then if we do move to Europe, are we seeing a similar degree of improvement over there? Or do we still see pretty negative trends?
Jennifer Parmentier: No, I would say, Nigel, at this point, just commenting on how I see it better in April. I don’t really want to go into any detail in markets or specifics. But I would say that where we’re seeing it is mainly North America, it’s not to say that there’s nothing positive in Europe or Asia, but the comments about April are mainly North America, where we’re seeing quite — might be that this destocking is coming to an end and that we’ll see a turn here.
Nigel Coe: Yes, it’s got to come down at some point, I suppose. And then switching over to margin and SG&A productivity is really impressive. I think underlying SG&A came in at 13.5% this quarter. So I think for the full year, we’re sort of in that 14% zone. Is that the right range going forward? Do you think you can maintain sort of 15% SG&A to sales? That’s the question, really. Is there anything sort of like discretionary you’re controlling at this point? Or is this a good range going forward?
Todd Leombruno: Nigel thanks for recognizing that. We have always proud of ourselves on being frugal when it comes to SG&A expenses. Quite honestly, we think we can do better. I wouldn’t say that there’s anything that we’ve been holding off on, right? I mean the overall level of the business remains extremely high, right? The sales levels are at record levels. But we hold our team to constantly assessing and making sure, we’re making the best investments in the business. So we think we can do better when it comes to SG&A, there’s no doubt.
Nigel Coe: Great. Okay. Thanks.
Todd Leombruno: Thanks so much. I think that’s all we have time for. So I want to thank everyone for joining us today. As usual, Jeff Miller, our VP of Investor Relations; and Yan Huo, our Director of Investor Relations, will be available, if anyone needs any follow-ups. As always, we appreciate your time, your attention and your interest. So this concludes our FY 2024 Q3 earnings release webcast, and I wish everyone a great day. Thank you.
Operator: Thank you. Today’s conference and webcast has concluded. You may now disconnect your lines at this time and log off your computers. Thank you for your participation, and have a wonderful day.
