Before I finish, I want to give an update on our sales and profit expectations for the full year of 2024. Regarding our top line sales, we expect full year 2024 sales will show flat to low-single-digit percentage growth as noted in our release this morning. Adjusted EBITDA is expected to be in the range of 9% to 9.5% and essentially flat with 2023. This estimate includes an operating profit rate flat with 2023 as savings and pricing initiatives offset inflation. Factoring expenses of $45 million to $48 million, largely flat with 2023 as we remain in a highly uncertain interest rate environment and some additional costs related to the expansion of distribution capabilities in a new warehouse in Shawnee, Kansas as Jim highlighted before. I would also note that we saw the US dollar weaken against key currencies in 2023 and it has remained at those lower levels to start 2024.
In connection with our adjusted EBITDA outlook, we expect our interest expense on outstanding debt to be on average about $3 million to $4 million each quarter given flat interest rates and we expect our income tax rate to be 25%. Borrowings are expected to remain flat by December 2024. As cash flows normalize, we look to invest approximately $25 million in our new DC and return cash to shareholders via dividends. To wrap up our outlook, let me make two notes regarding the cadence of these items across the year. First, regarding the cadence of earnings across the four quarters in 2024, we expect Q1 will be impacted by headwinds from several things including the higher costs related to the startup of the new DC and slightly higher year-over-year cost from customer factoring programs as we finally lap rate increases.
Second, keep in mind our operating expenses are incurred ratably across the year and do not vary with top line sales, and we anticipate total operating expenses including factoring costs will be approximately $78 million to $80 million each quarter in 2024. To wrap up, while the year ended slower than we hoped, we were very pleased with our efforts to improve our gross margin rates across all segments as well as turning significant improvements in cash flow. We are very much appreciative of the efforts of all our team members to in meeting these objectives. Thank you for your attention. I’ll now turn the call back to Eric for some final comments.
Eric Sills: Well, thank you Nathan. And I’m closing. As you’ve heard 2023 was a year of ups and downs, and while the numbers reflect some of the challenges faced in terms of cost pressures and temporary market dynamics, we have a lot to be proud of and to be excited about. We remain extremely bullish on both of our end markets. The aftermarket has a long history of resilience. There can always be some short-term highs and lows. And while 2023 was a disappointing year, on balance it is an extremely stable industry and tends to outperform during difficult economic times, especially in nondiscretionary categories like ours. Our position within the aftermarket also remains strong. We have excellent relationships with our trading partners who continue to recognize us as a leading supplier through the numerous awards that we win.
We continue to be very excited about our Engineered Solutions business. Quite different from the aftermarket where we enjoy much — where we enjoy strong market share, here we are not so much rising on the dynamics of the market itself as we are on getting known as a strong supplier with diverse capabilities and winning new business. Here I believe we have tremendous potential. There are multiple end markets from commercial vehicle to construction and agricultural equipment to power sports. And furthermore, the opportunities are global and we’re able to take advantage of customer adjacencies with operations in North America, Europe and Asia. We do recognize we have work to do on profitability and continue to pursue cost reduction initiatives throughout our organization as well as pricing actions and look forward to progress moving forward.
So, while 2023 had its challenges, we are very excited about the future. So that concludes our prepared remarks. And at this point, we’ll turn it back to the moderator and open it up for questions.
Operator:
Operator: Thank you, Mr. Sills. [Operator Instructions] We’ll go first today to Daniel Imbro at Stephens.
Joe Enderlin: Hey guys, this is Joe Enderlin on for Daniel. Thanks for taking the question.
Eric Sills: Good morning.
Joe Enderlin: Morning guys. Looking to vehicle control, point of sales activity slowed through the quarter and you noted some volatility in customer ordering patterns. Is it safe to say you’re seeing customers destocking? And if so how long do you expect this will continue.
Eric Sills: Yes. Thank you for the question. And really no it’s not a matter of destocking. And as we look at their inventories they’ve been basically flat over the course of the fourth quarter. So, really it had more to do with just a softening in the marketplace of their end demand. And I think that you’re kind of hearing that for the big publicly-traded distributors on their earnings calls that as the quarter progressed things softened out there. As I did mention in my prepared remarks we are encouraged to see that more recently we’ve seen a bit of a rebound in outs. Don’t want to judge things week-to-week but we do we’re encouraged by what we’ve seen more recently.
Joe Enderlin: Got it. As a follow-up I guess for that rebound was there any particular parts or categories you’re seeing customers defer orders?
Eric Sills: It was really across the board. You have to recognize that we are in such so many diverse categories within vehicle control hundreds of different categories that we really don’t track individual ones to that extent.
