Jon Lyons: Yeah. Brett, thanks for the question. It’s Jon Lyons. We do see a favorable position on free cash flow for the year. I think when you pull out the settlement, we are somewhere around $40 million or $50 million in 2023. A couple of moving pieces inside that as I look going into 2024. Number one, we do have the Georgia settlement that paid out in January. So that’s a moving piece. And then interest is going to be slightly elevated for the year compared to last, and taxes will be slightly elevated. On the flip side, we’ll have some EBITDA growth that will generate some cash, and we have less of a headwind on working capital going into the year. And we’re very focused on generating free cash flow, and we’ll keep driving it. And as we — as I said before, in Q3, we see CapEx coming down over the next couple of years, and our free cash flow performance will really accelerate as we move into ‘25 and ‘26.
Brett Fishbin: All right. Thanks for taking the questions. Appreciate it.
Jon Lyons: Thanks, Brett.
Operator: The next question will come from Casey Woodring with JPMorgan. Please go ahead.
Casey Woodring: Hi. Thank you for taking my questions. Just – yeah, to follow-up on the CapEx guide, the $205 million to $225 million this year. Is that the floor or could the finalized NESHAP ruling drive that high potentially? And then maybe if you could just break down for us how much of that number is on EO facility enhancements versus the capacity expansion projects and the cobalt development programs underway? And then you just mentioned now that the elevated CapEx this year will take a step down in 2025. Can you just give us a sense for how many of these costs this year are not repeating?
Michael Petras: So Casey, I guess you got the one question out of 15 compounds. I’ll try to answer as best we can. We’re expecting the guide to be $205 million to $225 million on CapEx. We’ve got about $40 million in there for GFE. The cobalt development is a significant investment this year, as we stated, this last year and this year, the biggest years around that. As far as NESHAP, we expect to hear something in NESHAP sometime in the month of March. It could be earlier March. We’re waiting for the final guide from the government. There could be incremental cost on it depending on exactly where that comes from. But based on what we know today, we feel pretty confident of our position and our ability to meet the requirements.
Again, we took a very industry-leading approach on this on how we’re trying to resolve the emission challenges that are expected by the EPA. But overall, we feel pretty good about the cap guide that we’re giving for 2024. I think I got all your questions, there were several of them in there. I’m sorry if I missed one.
Casey Woodring: Yeah. No, that was helpful. Just as a follow-up, too. So you completed four Sterigenics capacity expansion projects in ‘23. You have three left to finish. I think you mentioned at our conference last month that you have one of those coming online this quarter. Just curious if you can quantify the increase in overall Sterigenics capacity by the end of these expansion projects? And then if you could walk through what your capacity utilization expectations are for 2024, and if the softer volume environment is weighing on margins at all and would then create an easier comp once demand normalizes? Thank you.
Michael Petras: Okay. So yes, we have one of the three capacity projects in process that’s coming live in the first quarter. We don’t get into particulars of how much incremental capacity that will generate for the market. But overall, again, we try to get commitments to our customers for approximately 40% of those expansions before we do that. That doesn’t mean it happens at everyone, but that’s what our guide is. And I would tell you that as we look at those programs, one of them will come this year and then we’ll have one late in ‘24 and into ‘25 for the other ones. I think I got all of them. The capacity utilization, I think, was your other question. We target about 80%.
Casey Woodring: Okay, got it. Thank you.
Operator: The next question will come from Patrick Donnelly with Citi. Please go ahead.
Patrick Donnelly: Hey, guys. Thanks for taking the questions. Michael, maybe one just on the pricing side. It sounds like this year is going to be a little more at the low end of kind of that long-term 3.5% to 5% algorithm. Is that just — I know you touched on some of the timing stuff. Is that all — I just want to kind of talk through what you’re hearing from customers on the core business. It sounds like the Nordion piece is maybe dragging that down a little bit. But what are you hearing on pricing? And again, what’s the right way to just think about that going forward beyond this year as well?
Michael Petras: Yes. Patrick, thanks for the question. Yeah, we feel confident in 3.5% to 5%. We just wanted to signal to you this year, it could be on the lower end of it range, driven by the point that you just referenced. The longer-term, it’s just the nature of what it’s been the longer-term contracts for Nordion rolled off. We had a very strong Nordion price performance in 2023, which would just soften a little bit in ‘24. We are not concerned about our long-range ability to generate price based on the value proposition we offer to our customers.
Patrick Donnelly: Okay. That’s helpful. And it sounds like over the past couple of quarters maybe you had some good dialogue with investors. Obviously, there’s a pretty concentrated holding at the top there. I mean, any intel or insight into kind of what the initial holders are kind of thinking about in terms of potentially things like secondaries, things like that in terms of just the concentration of the holdings up top, given that you seem like you can chat with them a good amount?
