Ross Sparenblek: Yes, so it should be a pretty nice exit right there. And then maybe just one more here. Is there anything to read into the CapEx? We entered the year expecting roughly $15 million. That was tied to electronics and engineered customer commitments. And we reduced it by about $10 million now as of the second quarter. So is this just being pushed to the right? Are the customer programs being pushed to the right? I’m just curious. I’m not sure how to do it.
David Dunbar: You’ve watched this for a while. We’re getting much better at forecasting sales and profits. We have ways to go on forecasting CapEx. So I’d say the difference between what we said coming into the year and the update now, there’s a bit of delay with some of the capital equipment that we need in our plan. So some of that’s been pushed to the right. We did in the last year, we talked about we’ve reduced headcount in some businesses to adjust lower sales in the end markets. That kind of reduces the manpower to implement projects. So that pushes some projects to the right. Those are two big, two of the major factors. Ademir.
Ademir Sarcevic: That’s it.
Ross Sparenblek: Awesome, guys. Well, thank you and good luck.
David Dunbar: Thank you, Ross.
Operator: We have our next question coming from the line of Gary Prestopino from Barrington Research. Please go ahead.
Gary Prestopino: Hey, good morning, David, Ademir, Chris. A couple of questions here. First of all, on the Engraving side, you said you’re looking at some lower sales in Q3. Are those lower sales a function of what you’re seeing in the automotive market or what markets are actually causing that to move down sequentially?
David Dunbar: Yes, so this happens every year. It’s the Chinese New Year effect. We do a sizable business in China. It’s very profitable and slows down for a couple of weeks every time this year.
Gary Prestopino: Okay, so nothing in there in terms of that’s systemic to some particular industry you’re serving. It’s just a slowdown in China for the New Year.
David Dunbar: Right. And this business from quarter-to-quarter, there are waves and there’s a project timing issue. So North America is going to be a little slower as well, simply from the timing of platforms. Platform releases.
Gary Prestopino: That’s right. Okay. And then in regard to Q3 with this charge that you’re going to take for you, David, does that charge. Yes, I know, your retirement thing besides getting your Medicare card, right? Will you be backing that charge back into your adjusted EBITDA calculation?
David Dunbar: It will not be adjusted. We look at this as a timing thing, Gary. At some point, this would be in part of our P&L and we didn’t feel it was appropriate to call that out as an adjustment. So it will be included in our…
Gary Prestopino: The corporate expense.
David Dunbar: Right, in our corporate expenses line.
Gary Prestopino: Okay. And then could you just refresh my memory as to what you’re paying for Sanyu and how are you paying for it? It’s a debt transaction and you’re paying all debt or just lowering your cash balances?
David Dunbar: Well, first of all, we are taking it from our existing cash balances. Remember, I’ll just remind you on the sale of Procon where we netted $70 million and we used that to buy Sanyu, to buy Minntronix, and then give an additional money back to the shareholders in terms of dividends and share buybacks. So that’s the way we would fund it. We haven’t really — we’re still waiting to close. We’ll disclose more information about the exact purchase price and everything else as we close the transaction. But that gives you a good indication of what we are paying for.
Gary Prestopino: Thank you.
David Dunbar: Thanks, Gary.
Operator: Thank you. There are no further questions at this time. I’d now like to turn the call back over to Mr. David Dunbar for final closing comments.
David Dunbar: Thank you. I want to thank everybody for joining us for the call. We enjoy reporting on our progress at Standex. And finally, again, I want to thank our employees, the board of directors, and shareholders for your continued support and contributions. We look forward to speaking with you again in our fiscal third quarter 2024 call.
Operator: Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.
