John Franzreb: Perfect, Ziv. Thank you. I’ll get back into queue.
Operator: Thank you. The next question goes to Griffin Boss of B. Riley. Griffin, please go ahead. Your line is open.
Griffin Boss: Hi, thanks for taking my questions. So, just to start off, I wanted to build on that last question. So, you increased your three- to five-year targets back in February 2022. And since then, we’ve seen the geopolitical conflict in Russia and now Israel. I’m just curious, is there any risk that you see of potentially prolonged conflict that could affect your three- to five-year targets that you implemented in February 2022, or are those still good benchmarks that you’re aiming for?
Ziv Shoshani: Griffin, the three to five years are definitely still a good benchmark. At this point in time, the biggest effect on our business is really the slowdown in the economy, the high interest rates, and, to a certain degree, the slowdown in China, which affects mainly our industrial and steel business. As I indicated, AMS is still growing strong, and we have a very good indication from our customers and our distributors that the semiconductor market as well as the consumer market will — is expected to pick up next year. So, the three- to five-years plan is definitely valid.
Griffin Boss: Okay. Great. Thank you. And just speaking of AMS, you talked about the DTS, the orders were strong there. Can you just clarify, was there still that $1 million headwind for the redesign in the third quarter? Or were you implying that shipments had already started in the third quarter, and that was what helped with the strength in Measurement Systems?
Ziv Shoshani: Shipments already started in Q3, while the redesign has been completed at the end of Q2. But I would say, more important, new, or, I would say, higher bookings we have seen for DTS for the AMS business, and this is for new features or new crash dummies that we developed for — I would say, for defense applications. And every project, those are higher ASP items. So, we do expect the AMS business to continue to be strong for DTS also in the coming future due to those new designs being developed.
Griffin Boss: Got it. Are those the WIAMan dummies that you’re talking about, or is this new features just in general?
Ziv Shoshani: You are correct, WIAMan is definitely part of that. But in addition to that, we have new features that has been developed, but WIAMan is part of those programs.
Griffin Boss: Okay. Great. All right. And then, so shifting gears, it was nice to see the debt pay down this quarter. Just going forward, wondering if you could just give some more color about how you’re prioritizing capital allocation. I know you have the three-prongs of paying down that revolver, share repurchases and M&A, but just curious how you’re prioritizing it now that we’re seeing you pay down some debt. And along those lines, too, if you could just talk about what you’re seeing in the M&A market right now? Just how multiples have been trending and what you’re seeing there?
Ziv Shoshani: Sure. So, maybe I will start with the M&A, and then Bill will provide more color regarding our capital allocation. Regarding M&A, we do see many more opportunities as interest rate continues to be high, more opportunities regarding higher-quality companies that we do believe could fit VPG’s portfolio in terms of the financial structure, in terms of the product structure, in terms of the growth rate. So far, we have been in dialogue with few companies. But at this point in time, nothing came to fruition. But no doubt, there is much more activity. And to an extent, we do see that valuations are going down slowly, but they are still going down. Bill, can you take, please, the capital allocation question?
