Nigel Coe: And of course, with assuming flat sequential from a very depressed base with destocking. If you had to put a line in the sand and say, this is the quarter when we expect destocking to essentially be done, when do you say – would you say it’s 1Q next year, I mean and any thoughts there?
Louis Pinkham: From a PES perspective, we would say – we would expect it to be likely done in the end of this year. What I like about our portfolio is the diversification of the portfolio. So it’s a little bit difficult, Julian to answer that question without doing it by segment and in some aspects, having to do it by division. But let me try to simplify. From an IPS perspective, we would actually expect much of that destocking, we’re getting through it. And again, it would be a Q4. The factory automation side of AMC we’re still honestly trying to get a little bit more clarity on that. Now we got some strong orders in October, but they were a bit more longer cycle that’s going to help us in 2024. So we’re getting our arms around the business. I think as the quarter’s progress, we’ll give you more clarity certainly on the factory automation piece of the business.
Nigel Coe: Okay. And then a quick follow-on. Just to be specific, in 4Q, what is the synergy capture modeling from PMC and Altra?
Rob Rehard: Sure, Nigel. The PMC, we’re expecting about $13 million in the fourth quarter and Altra about $10 million, about $23 million overall. Remember that for the PMC side, as we said, we do expect to get about $6 million or so of those additional costs to maintain our service levels and it may mask some of that benefit on the PMC side. But the synergies are still permanent and absolutely expected to be realized in the quarter. So a total of $23 million.
Nigel Coe: Great. Thank you.
Louis Pinkham: Great. Thanks.
Operator: [Operator Instructions] Our next question comes from Christopher Glynn from Oppenheimer. Please go ahead.
Christopher Glynn: Yes, thanks. Good morning. So Louis, realizing that the October pickup isn’t a trend yet. Just curious to dig a little deeper, what channels, what was the nature of the pickup, particularly, I’m curious if those channel partners that destocked in the most in the third quarter, where you see in the October pickup?
Louis Pinkham: Yes. So – and the simple answer, Chris, and good morning, is yes. Those that we saw slowing down in Q3, we did see a start of the pickup in Q4. But you’re right, one month does not make a trend. And so we’d like to see that continuing. That’s partially why we also are forecasting this quarter to be modestly down sequentially from Q3.
Christopher Glynn: Okay. And in terms of inventory rebalances, how would you compare what you’re seeing in distribution channel versus with OEMs? Because hoarding and gathering was systemic for a little while there, now that lead times are better. Obviously, we’re on the other end of that.
Louis Pinkham: Yes. So I think there’s still some room in OEM. And whereas I think the distribution channel has more quickly tried to readjust.
Christopher Glynn: Okay. And are there specific conversations with distributors? Or is it just too fast moving and contemporaneous to bring that to bear on your general comments that the distributors are moving through destock faster?
Louis Pinkham: We have pretty clear visibility to our industrial distribution channel. We see their sales out, we see their inventory levels. We see their calls [ph]. Probably why I was a little more unclear around factory automation is we don’t have that level of clarity in factory automation. And although I can assure you with the Altra businesses that we now own as part of Regal, we will get that clarity in time. It’s just that we don’t have that quite yet. But from a IPS standpoint, in particular, we know what our distributors are holding for inventory or the majority of our distributors, we know where they stand with sales out and with their orders on us. So good clarity there.
Christopher Glynn: Sure.
Louis Pinkham: Thanks, Chris.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Louis Pinkham for any closing remarks.
Louis Pinkham: Thank you, operator. And thanks to our investors and analysts for joining us today. As you heard this morning, while we are facing more challenging end market headwinds in parts of our business, our Regal Rexnord team is effectively managing through them. But what keeps us excited is our ongoing transformation, executing our path to top quartile gross margins to generating over $1 billion in annual free cash flow over the next couple of years, to rapidly deleveraging our balance sheet. And to the outgrowth acceleration, we are confident we can deliver by raising our new product vitality and by executing our many 80/20 growth initiatives. In short, many levers we can pull to create tremendous value for our key stakeholders. Thank you again for joining us today, and thanks for your interest in Regal Rexnord.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
