Vincent Anderson: Sure. Okay. Fair enough. And then you spoke a bit about this in your prepared remarks, but I just kind of wanted to clarify what’s going on in Asia Pacific. So you mentioned broader market improvements in APAC driving volumes, though results in the first half of the year did seem to be trailing what limited indicators we have at least for China. So I was hoping you could kind of square your first half volumes relative to those data points like steel product production, aluminum production versus the improvement that you saw specifically in this quarter.
Andy Tometich: Yes. Thanks, Vincent. In Asia Pacific and obviously, China is a key component of it, although comments really apply across. We have seen improvements in the second half. We’re seeing kind of general improvements both in metals and metal working. Now from relatively low levels, as you indicated in the first half, we see that being a function of both what’s happening with our customers and their business. And also I think we’re doing a differentiated job of targeting the right business to grow with them. So it’s a combination of factors, but it’s encouraging, and we’re hopeful that’s going to continue.
Vincent Anderson: Thanks. And if I could sneak a quick one quick one in here. Just given the continued improvement in cash flow and the balance sheet health overall. I’m curious how the tuck-in M&A market is looking these days and your appetite for playing in that again next year through maybe a couple of different macroeconomic scenarios.
Andy Tometich: Yes. Thanks, Vincent. For sure, M&A is a key part of our capital allocation strategy, and we continue to be focused on where we’re going to add shareholder value. We also lined it up in a disciplined fashion with our enterprise growth strategy. So while we invest in organic growth, we want to align that with inorganic opportunities. We have an active pipeline. We’re continuing to make progress with a number of opportunities. We’ve had a lot of success at Quaker Houghton over the years with bolt-ons that take advantage of our service model to provide even more solutions for our customers as we expand our position in their overall spend, and we’ll continue to move those forward and make use of a balance sheet that will reinforce our ability to do it.
Vincent Anderson: Alright. Thanks again. That’s all from me.
Andy Tometich: Thanks.
Operator: Thank you. Our next question is from Jon Tanwanteng with CJS Securities. Please proceed with your question.
Justin Ages: Hi, this is Justin on for John. Good morning.
Andy Tometich: Good morning.
Justin Ages: So leverage has come down substantially. So I think you can be a little more flexible on the capital allocation you were mentioning. So can you just kind of rank your priorities between further debt paydown, M&A, repurchases, dividend, internal investments? And how might that change as rates go up or your share price changes?
Andy Tometich: Yes. Why don’t I start with the capital strategy, and then Shane can add some details at the end here on your question. But I mean our capital allocation strategy remains consistent, focusing on shareholder value. First and foremost, we’ve been a committed dividend payer for — throughout our history. We increased our dividend again 5% this year. We’ve been also paying down debt over $125 million year to date, and we’re investing in our organic growth, as I highlighted, a little bit earlier, focusing on where our innovation can be even more successful and how we can deliver that as efficiently as possible to our customers. M&A with the bolt-ons, as I just highlighted, is extremely important. And then if there are other levers for us to provide shareholder returns if the opportunities are appropriate, we’ll pursue those.
Shane Hostetter: Yes. I think Andy hit on the most important factor in the end is shareholder value. As we think about items we consider as M&A, definitely, hurdle rates have changed a bit due to interest rates improving, and we have other levers similar to what Andy was talking about buybacks that we may consider. So overall, we’ll balance what is the most appropriate avenue to return value to our shareholders.
Justin Ages: All right. That’s helpful. And then one more, if I may. What are your expectations for inflation, deflation in the near term and the ability to pass through or hold on to price?
Andy Tometich: Yes. Well, certainly, inflation has been a big part of the story for quite some time. When we think about raw materials, in the fourth quarter, we’ve got a very mixed bag with over 3,000 different raw materials, and there’s some that are moving up, some that are — have kind of stabilized. But I mean, overall, we don’t see a fundamental shift based upon what we see at the moment. We’re not expecting it to necessarily move directionally in a significant fashion.
Justin Ages: All right, thanks. I appreciate you taking the questions.
Andy Tometich: You’re welcome.
Operator: Thank you. Our next question is from Arun Viswanathan with RBC Capital Markets. Please proceed with your question.
Arun Viswanathan: Great, thanks for taking my question. Good morning. Hope you are well.
Andy Tometich: Good morning.
Arun Viswanathan: So first off, I guess just going back to the Q4 outlook, most of the quarters this year, like you’ve been in the double-digit gain year on year of growth in EBITDA, is that kind of the magnitude you’re still thinking of in Q4? I know there’s some seasonality that may play into that. There’s maybe some lingering impacts of destocking, but then maybe you hold on to as you did this quarter, some strong pricing efforts and some mix. So maybe you can just kind of size kind of the impact of growth that you see in Q4 year on year.
Andy Tometich: Yes. Arun, we don’t typically provide any detailed guidance on that. But as I highlighted seasonality in the fourth quarter, in particular, in Europe and the Americas as part of the equation. And typically, that’s kind of low to mid-single digits relative to other quarters. We also — I would highlight the order pattern with some of the working capital management we expect our customers to do will probably contribute to that.
Arun Viswanathan: Okay, thanks. And then similarly on 2024, it sounds like you do expect it to grow. Again, we have maybe a little bit more modest growth in 2024, modeled right now versus what we saw year on year in 2023. Again, in 2023, you had some nice recovery of margin. I know that you’re still targeting some margin growth for next year, but would you agree that the growth that you expect in EBITDA next year will be more modest than 2023 growth?
Andy Tometich: I think what I would highlight, it’s still pretty early for 2024. But as we see it right now, we have proven that we’re able to continue to win new business, valuable business over and above what’s happening with our customers underlying business. We expect to continue to do that. There are some encouraging signs. We’ll see how those continue to play out. But in markets like aerospace and automotive and in our Asia Pac business that we think is encouraging. And we’re going to continue to manage the costs to serve overall. So we think — and sorry, I missed the margins. We still think there’s a bit of room to go with respect to our margins. So we’re anticipating, and we’re always going to expect to grow this business, but we’re not quantifying it at this stage.
