Julio Romero: Hi. Can you guys maybe talk about, you know, repair and remodel spending in the near term? You talked about your customers have announced longer than normal holiday shutdowns. I understand the choppy kind of first-half outlook, but maybe if you can help us think about maybe a range of outcomes for volumes in the first half.
George Wilson: You know, we’ve seen a bigger impact in our cabinet segment. Obviously, you can see the volumes there, what we’re projecting being down more so than others. You know, that’s a combination of, you know, the COVID pull forward, some of the seasonality backlogs dropping. You know, I think that impact, and that mainly R&R there, those markets will be hit a little harder in the first half than anything else that we see. The opportunity for a – an improvement, more so than what we’re forecasting, you know, I suspect it’s there. A lot of it is dependent upon some of the macro things. I mean, if the fed comes out and lowers interest rates and you’d start to see some of that consumer confidence build. I think that there still is a lot of pent-up demand in all the product lines that we serve and that there is a possibility.
As I mentioned to Reuben, you know, we traditionally do take a little conservative view. So I think the opportunity for upside is greater than not but I think dependent upon the Fed and whether – the weather building season because again as we go back to a more seasonal pattern, if you remember, as Scott said, our first half tends to be significantly slower that’s dealt and a lot of that has to do with the building season. So you know, hopefully, we have a mild winter, and the builders can keep doing their things to help fulfill that upside that we think is probably there.
Julio Romero: Got it. I appreciate the color there. Maybe just going back to LMI a little bit, can you maybe give us some flavor for the primary end markets that are currently driving LMI sales? I know you had talked about I think about eight different end markets when you did the deal, but maybe just highlight for us what are the top one or two end markets that LMI currently sells into.
George Wilson: So they sell into a wide variety that’s – it’s a pretty diverse market set. They have a piece of business that goes into automotive. We have a piece of the business that goes into, you know, windows and doors, some other types of building products. We have some of the products that go into electronics and consumer goods. And we actually have, you know, some products that go like into, you know, pet toys. So a wide range of markets that continues to expand and grow. No one market really dominates anything.
Julio Romero: Okay. Got it. And maybe thinking about the preliminary assumptions for fiscal ’24, how do you guys think about free cash shaking out especially after, you know, you just had a really strong fiscal ’23, and does working capital become a benefit, a use of cash or kind of neutral?
Scott Zuehlke: So clearly working capital was a benefit in 2023. It took a big hit actually in 2022. So as we forecast this year, roughly flat. I mean, there may be a little benefit, there may be a little hit depending on how the year transpires but we’re not expecting huge swings in working capital this year. Now, I mean obviously, free cash flow we had a record year at $110 million. I think there’s probably going to hit somewhere lower than that this year, plus we expect to spend a little more on the CapEx side, and we’ll give more concrete numbers around that when we give official guidance.
Julio Romero: Got you. That dovetails into my very last one, which is the CapEx range of $40 million to $45 million, kind of nice to see that step up there. Just maybe talk about the key organic growth initiatives that are targeted with that CapEx.
George Wilson: So as mentioned a little bit in my section of the script, we have juiced up the R&D and development of new products. So I think you’ll see investment – continued investment in our UPVC facilities specifically in the U.K. market as we continue to do things both from a product line and a facility perspective there, continued development of new compounds and adhesives and sealants within our space of business in the mixing compounds, those would be the priorities. But really starting to invest more heavily in new product development and – than traditionally seen from us.
