Matthew Blair : Got it. And then last question is, I believe the cash flow statement reflected $15 million or $16 million in the third quarter from proceeds from the sale of business and other assets. What — can you remind us what that was for?
David Stasse : That was — it was kind of small immaterial sales of assets. It wasn’t a business. It’s kind of miscellaneous assets. It’s not even worth the time on the call.
Operator: We go next now to Michael Leithead at Barclays.
Michael Leithead : First, Frank, can you just speak to the intensity of lower-cost Asian imports across your portfolio? Is it getting better or worse relative to maybe earlier this year?
Frank Bozich : Yes, I would say it’s getting better, and that’s because the cost differential between European production and Asian cost has decreased, but there’s still a pronounced pressure due to the lack of capacity or the lack of — or the free capacity and underutilization of assets in Asia. So there’s still pressure from imports, and there still is a dislocation in cost between Europe and Asia. I would say it’s most pronounced in Plastic Solutions and in EM. And due to the nature of our Latex Binders business being a water-based products, it’s least or most nonexistent there.
Michael Leithead : Great. That’s super helpful. And then, Dave, after the recent refinancing, can you help us with what your current run rate annual cash interest is?
David Stasse : Yes. It’s $235 million a year, Mike.
Operator: We’ll go next to Hassan Ahmed at Alembic Global Advisors.
Hassan Ahmed: Guys, wanted to revisit some of the moving parts associated with the initial 2024 sort of guidance or bridge analysis you guys have given. Frank, you mentioned a good way to think about sort of run rate quarterly EBITDA as Q3 2023 levels, right? So I annualize that, and I come up with, call it, $164 million in EBITDA. Then you talked about the sort of tailwinds from asset and cost restructuring, which is another $75 million. The sort of non-presence of the unfavorable timing impacts in ’23, which is another $22 million and fixed costs under absorption, which is another $14 million. So you sum it up and you come to at least $274 million, $275 million in 2024 EBITDA. Am I right in assuming, first of all, that, that is the correct way of thinking about it? And of course, that does not factor in any sort of demand improvements and it doesn’t factor in potentially the benefit from the new styrene contract. And am I thinking about this the right way?
Frank Bozich : So I guess let me play back to you how I would think about it or I’ve been thinking about it, and I think how we discussed it earlier when Frank asked the question. So if we take $41 million for Q3 and add back the $4 million timing, plus the negative impact from the styrene outage of $15 million, that gets us to about a $60 million run performance — underlying performance in Q3. And from that, we have an additional tailwind of $100 million related to restructuring and natural gas hedges. So that’s how I would think about it. Again, this — we’re not guiding yet. We’ll guide in February. But sitting here today, that’s how I would think about next year.
Hassan Ahmed: Fair enough. Fair enough. And just, again, trying to sort of understand the demand side of things with this massive destock that we’ve seen. Back, I believe, it was Q4 of ’22 during the earnings call, you talked about how historically destockings lasted 2 quarters and the restock post those two sort of quarters of destocking historically had been quite impressive. Now here we are several quarters later with the destocking continuing. So I mean, should we expect after this level of destocking as and when it happens an equally impressive restocking?
Frank Bozich : I — we talked about this and I don’t know what to expect going forward, to be honest with you, because I think that the chemical industry, in general, is at an inflection point that in my 4 years, I’ve not seen before with overcapacities in Asia, geopolitical effects, dislocations and costs. So it’s hard for me to say what to expect going forward. Based on history, I would — based on our prior experience, if history would repeat itself, we would say yes. But I’m not again, sitting here today, it’s difficult to predict when and how that will happen or what it will look like.
Operator: We’ll go next now to Laurence Alexander at Jefferies.
Laurence Alexander : Could you unpack the comments around extended shutdowns? Is that just in kind of the appliance industry? Or are you also seeing that in automotive? And are you thinking about it in terms of shutdowns starting earlier than normal? Or are you also concerned about them spilling over into January more than usual?
Frank Bozich : No. We think that the customers will be working — managing working capital by reducing stocks through the year-end. And so their shutdowns will start earlier. And I would say this is across — probably across the value chains. And again, if there’s an exception, it’s probably automotive.
Laurence Alexander : And secondly, just in terms of the kind of the comp effects, if you take kind of the way your customers talked about their sense of underlying demand, is there at least a high confidence level of confidence that volumes are positive comparisons in Q2 year-over-year? Or customers more nervous on the visibility…?
Frank Bozich : Just to make sure I understand what the — so I just want to make sure I understand. Compared — positive volume compared to Q2…
Laurence Alexander : Should — when we think about the year-over-year cadence on volumes, should you be back in positive territory by Q2 of next year based on what your customers are saying? Or are they indicating too much uncertainty on demand trends? Just trying to think about the last thing of destock cycle?
