David Silver: Okay. Thank you very much. I’ll get back in queue. Appreciate it.
Operator: Thank you. [Operator Instructions] One moment for our next question. Our next question comes from Dave Storms with Stonegate. Your line is now open.
Dave Storms: Good morning.
Luis Rojo: Good morning.
Dave Storms: Just wondering if I could ask about kind of what you’re seeing upstream from a raw material standpoint, both from a cost and sourcing lens and how you expect that might change over these next coming quarters?
Luis Rojo: Good question, Dave. And look, when you think about raw material prices and pricing, I think we’re in a pretty good position. As you saw Q4, despite our sales down 15%, our cost of goods sold is down 17%, so we basically almost hold a gross margin flatish $66, $67 million despite the 15% drop in sales. You see oil now relatively stable in the 70 to 80 range, and what we have seen is our raw material prices have stabilized. There are a few pockets where they are still coming down a little bit, but the 80 for the 20 is stable, and this is why we are catching up on the margin side.
Scott Behrens: Yes. I would just say overall capacity in the chemical industry is much looser than it was 12 months ago, 18 months ago, right? There’s greater optionality and opportunity to really work on your raw material costs in the current environment.
Dave Storms: Very helpful. Thank you. And then just also, what’s the customer acquisition environment looking like? It sounds like you defend your market share pretty well and continue to defend your market share pretty well. Is there potential to expand into more clients, either Tier 1s through 3s?
Scott Behrens: Yes, so that’s obviously a big part of our growth strategy within the surfactant business, is to continue to service and sell more Tier 2 and Tier 3 customers. Even last year in the challenging market we had financially, we grew our net customers within surfactants by over 500 new customers. Those are around the world that truly value our technical service, our formulation expertise, and our broad product line. And that continues in a difficult challenging market. So we’re very excited that our sales and R&D teams continue to do a great job bringing new customers into the company.
Dave Storms: That’s perfect. And then just one more quick clarifying question. Luis, I think you mentioned earlier that you were through most of the high-cost inventory. Was that specific to surfactants inventory, or did that include polymer and specialty?
Luis Rojo: Yes, it’s both. It’s the three businesses.
Dave Storms: Perfect. Very helpful. Thank you very much for taking my questions.
Dave Storms: Thank you, Dave.
Operator: Thank you. I’m showing no further questions at this time. I would now like to turn it back to Scott Behrens for closing remarks.
Scott Behrens: Thank you very much for joining us on today’s call. We appreciate your interest and ownership Stepan Company, and please have a great day.
Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.
