David Martin: Yes, Kirk, I’ll take that into couple different angles. One is, we carry less inventory than we used to from a raw material perspective. We also have tightened up our contracts with our suppliers with respect to trying to make sure that we’re not hitting spikes in peaks and valleys with respect to the steel because it’s been very volatile over the last couple years. And so first of all, we’ve tightened up the supply side so to prevent any major movement one way or another. And then that that’s enabled us to also to work with our customers to tighten it up on the pricing end so that we have again less volatility overall. And we do have contracts that are in place and we have them, they’re changing typically either every 90 days or €“ and sometimes there’s lags on how that index is used for purposes of pricing.
So we got any number of ways to combat volatility. As we know, as we went through 2022, we were seeing a very strong drop in pricing on hot-rolled coils as well. So if you think about that in the U.S., it’s been pretty volatile and we were able to manage it through 2022. And we fully expect with the actions that we’ve taken that we’ll be able to lessen the volatility with respect to how it flows through our production.
Kirk Ludtke: Okay. Thank you. I €“ so I guess input costs were a tailwind in 2022. Is that safe to say?
David Martin: Well, not on the tire side. We’ve had elevated costs throughout 2022 that we’re able to manage, and you can see that our margins have been pretty solid with all that. And I would say right now it’s become more stable as we enter 2023 than it was throughout 2022. In our assurance of supply is actually getting a little bit better as well. So I think as we look forward, I think we’re in really good shape with how we’re going to be able to manage those input costs. At the same time, we do face inflation on things such as labor and other areas as well that we’re trying to manage as well. But as far as raw materials themselves, we think €“ again the actions we’ve taken to manage on both on the supply side and the pricing side have lessened our €“ the amount of volatility that we could see from that.
Kirk Ludtke: Got it. Thank you. And then lastly, on the capital, back to the capital allocation question, just for a second one follow-up. You mentioned opportunistic acquisitions or JVs €“ and/or JVs. Which side of the business are you €“ where are you seeing the opportunities?
Paul Reitz: I think we’re in a good position where it could be in a number of different areas across the spectrum of customers and products that we produce ag mining or construction, but it will stay within our core. So we’ll be able to leverage that in a way that will be beneficial. We are not looking to reach and expand in ways that, again, don’t fit in from a €“ and it’s not just in a cost synergy, but it’s our ability to better serve the marketplace and take care of our customers. That’s €“ those are the synergies that we would expect to get and where we’re looking.
Kirk Ludtke: So it would be focused on improving the range of product.
Paul Reitz: Range of products and/or distribution, both of those products, correct.
Kirk Ludtke: Okay. Got it. I appreciate it. Thank you very much. Congratulations on a fantastic year.
David Martin: Yes. Thanks, Kirk.
Paul Reitz: Thank you.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Reitz for any closing remarks.
Paul Reitz: I just want to thank everybody for your participation in today’s call and really look forward to giving you an update at end of our first quarter results. Thank you. Have a good day.
Operator: Thank you for attending today’s presentation. The conference call has now concluded.
