Jon Anderson: Okay. And the Modesto extraction capability, can you — you may have mentioned that this already, but when will that start contributing in earnest, do you think to sales? And is that product that you will use internally to support the plant-based the finished goods business or will the portion of that be dedicated to external ingredient sales?
Joseph Ennen: There will be some external ingredient sales, but a significant portion of the oat base that is produced out of Modesto will be consumed internally. In terms of when we see that, really Q1 will be in startup mode. So really Q2 is when we would expect that to be contributing materially.
Jon Anderson: Okay, great. A question perhaps for Greg here. During the prepared comments mentioned that in 2024 you expect to generate free cash flow of $35 million to $45 million. Is that unlevered free cash flow or free cash flow after interest expense and capital expenditures? Just want to make sure I have the definition of that, right?
Greg Gaba: Yes, no problem, John. It is free cash flow, including interest, so not the unlevered free cash flow we referenced in the past.
Jon Anderson: Excellent. Excellent. And then the last one, I think you talked about this as well. You’re working towards kind of restructuring, I guess of the ABL to a term and revolver facility. Do you have any thoughts on the timing of that and how that could impact your interest rate and kind of annual expense, or is it just too early to call that? Thanks.
Joseph Ennen: Great question, Jon. We’re expecting to get that done by the end of the year. Our bank partners have been extremely supportive. We’ve started the process, and we don’t see any reason why that won’t be completed by the end of the year. I would say from an interest rate perspective, it will be relatively similar to where we are now. It just creates a lot of flexibility for us with the new structure.
Jon Anderson: Great. Congrats on the new SunOpta. We look forward to strong performance going forward. So, good luck.
Joseph Ennen: Thanks, Jon.
Greg Gaba: Thanks Jon.
Operator: Thank you, Jon. And our final question today comes from the line of John Baumgartner with Mizuho Securities. John, please go ahead.
John Baumgartner: Maybe first off on the plant-based side, Joe, given the volume declines we’re seeing, you mentioned the expectations for continued declines in 2024 in the track channels. And I think last quarter there was some discussion around retailers maybe cooling to the idea of adding new brands, but we’re still seeing modest growth in GDPs for the category through October, and I’m curious what the outlook for declines there? Do you sense there’s any desire for retailers to address the tail in the category, the lower velocity brands and pair back some of the underperformers and declutter the shelf a bit? I’m just curious how you think about changes in retailer merchandising for this category in line with the volume softness?
Joseph Ennen: Yes, what I would say, I would expect to see in 2024 is probably less assortment changes and more of a focus on promotional activity from the brands. I think as the collective brand owners have experienced some volume softness in track channels. I would expect that the promotional activity in 2024 will intensify. I think that is a pretty consistent message we’re hearing across all categories in the grocery store as a kind of thematic for 2024. And I would expect that that would play out in our category as well. But we have not seen any kind of material movement from retailers to trim the bottom end of the category at this juncture. But certainly as resets occur typically in the middle of the year, call it middle Q2, Q3 we will certainly be watching out for that.
John Baumgartner: Okay. And then pertaining to fruit snacks, the category volume there has also been soft the last few months in the scanner data, but you sound very bullish on growth for next year as well. And think about the impact we saw in the back half of this year from softness and plant-based beverages sort of hitting orders in the back half. How do you see the visibility into order staying on track for snacks in 2024? Is there a difference in the customer retailer mix for fruit that better allows you to buck the trend if the overall take will remain soft? How do you think about that and the risks to the outlook for fruit in 2024?
Joseph Ennen: Yes, good question. So with 13 consecutive quarters of double-digit growth and a significant capacity expansion coming online, we are very bullish about our growth. It is a — our business is very, very driven by club stores and specifically both tracked and untracked club. And so, when you look at the trends in those — with those retailers, we see very, very strong growth. It’s also worth noting, I mean, we’ve had several customers on allocation for what might be approaching multiple years. And so, those customers are also incredibly anxious to come off allocation and be able to drive this business. So just even in the first month and I referenced strength in the fourth quarter that we’re seeing, certainly the added fruit snacks capacity is one of the things or one of the areas of the business where we’re seeing, certainly very strong early trends here in Q4 as this product continues to just perform and perform and perform.
John Baumgartner: Okay. Thank you.
Operator: Thanks, John. And with that, I would like to turn the call back over to Joe Ennen for closing remarks. Joe, the floor is yours.
Joseph Ennen: Great. Thank you. I just want to thank everybody for joining us on the call today and look forward to speaking to many of you in the future. Thanks again.
Operator: And ladies and gentlemen, that concludes today’s call. Thank you all for joining and you may now disconnect. Have a great day, everyone.
