Bill Larkin: Rob, and I think on your question is, we’re not going to be able to cut our way out of this. We need to grow the top line as well. So it’s going to be a balanced approach between cutting costs, right sizing the business, but we also have to focus on growing the top line to get profitability.
Rob Brown: Yes. Okay. Thank you. And then I guess the European heavy duty market, I think, was down in the quarter you mentioned. But I think there’s some signs of life in that market. How do you see that market recovering and growing into this year?
Dan Sceli: Yes, we’re – I mean, we’re all watching every day what’s happening both in the heavy duty and the light vehicle markets on volumes. It’s pretty volatile. Our goal is to be prepared if the volumes do come that we’re prepared to supply it at whatever the customer needs, do I think the market is going to rebound in heavy trucks? I’m hoping so. I don’t have that crystal ball. We rely completely on our OEM customers to let us know exactly where they’re going and what they plan on for volumes.
Rob Brown: Okay. Thank you. I’ll turn it over.
Operator: Thank you. Your next question comes from Amit Dayal with H.C. Wainwright. Please go ahead.
Amit Dayal: Thank you. Good morning, Dan and Bill.
Dan Sceli: Good morning.
Amit Dayal: With regards to the Euro 6 and 7 deliveries, have they commenced? You had highlighted that these deliveries potentially would be beginning in 2024. So just wondering, where that is?
Dan Sceli: Euro 6 has begun. Euro 7 is going to be ramping up. We did see a bit of a delay in the launch of some of the new programs with our OEM customer, our biggest OEM customer over there. But we do expect those to ramp-up faster now that the delay has put some pressure on them in the marketplace. So Euro 6 has started and Euro 7 is coming.
Amit Dayal: Understood. I know the first quarter was a little bit weaker year-over-year, but for 2024 should we continue to anticipate year-over-year growth as some of your – the customers who may have delayed orders, et cetera come back and other initiatives sort of start ramping for you guys?
Dan Sceli: Yes. Yes. I’ll start taking that. So on a yearly basis, it’s – it’s going to be a little bit of a challenge in Q2 from a reporting standpoint and prior to provide transparency on the business as it is today and what the future business looks like and what is the future? As we sit here, we’re expecting to, clearly Q1 was a weak quarter and we do expect Q2 to pick up, which is with the seasonality that’s typically what we see in our business where it ramps up in Q2 and we’ll see that drop in Q3 just because of the seasonality. And most of Europe is on holiday, and they will see their business ramp back up in Q4.
Amit Dayal: Okay. Thank you for that.
Dan Sceli: Yes.
Amit Dayal: Just one last one from me on the China side. This was a big part of the narrative a few years ago, and then there wasn’t much progress. This time around is there potentially a way to accelerate this relationship and opportunity from development type work into production orders? Just trying to get a sense of whether this is coming back to potentially really contribute in terms of revenues and margins not in 2024, but maybe 2025 and beyond?
Dan Sceli: Yes. You know what…
Amit Dayal: What are the catalysts that are driving sort of this revival in this relationship and opportunity?
Dan Sceli: Yes. So I think when you said 2025, I think you hit it right on. I think that’s when we’re still working engine development activities and we don’t know or can’t speak to specific timing of when that customer will kick off production of that model. But we still have a good relationship. We’re still doing development work. They’re still looking to use our technology for the new platform and – but as I said earlier, we have no orders today on production for within 2024, but the development will continue in a positive way where we’re still working very well with them.
Amit Dayal: Okay. That’s all I have for you. I will follow up offline. Thank you so much.
Dan Sceli: Yes. Yes. Good.
Operator: Thank you. Your next question comes from Jeff Osborne with TD Cowen. Please go ahead.
Jeff Osborne: Hey. Good morning. Just two quick ones on my side. I was wondering, Bill, if you could frame the OpEx run rate, post the announcements that you detailed on the call. Is there a way to think about the dollar value of costs that’s been taken out of the business?
Bill Larkin: Yes. Right now we’re not in a position to quantify what that is. We expect to see as we progress on these cost reductions. We do expect our G&A sales and marketing run rate to decline on a comparative basis. And I suspect we’ll huddle up internally and on future calls I’m sure we’ll continue to provide update on how we’re progressing on our cost reduction initiatives.
Jeff Osborne: Got it. Would there be any…
Dan Sceli: The scope, sorry, let me – let me add to that. The scope of our cost reduction activities as I said in the opening, it’s from the board right down to the shop floor. There’s nothing off limits. And we’re very aggressive in cutting the costs. And as you know, many times when you go about this, you’re taking on a bunch of one-time costs to get there. We’re still mapping out the run rate, but we’re in the middle of this cost cutting, right. It’s an aggressive effort across the company and as we get through we’ll get a better feel for what it’s going to look like longer term.
Jeff Osborne: Got it. I assume you couldn’t touch on; is there any cash severance that we should be modeling in or one-time charges for the upcoming quarter?
Bill Larkin: I think from one-time severance, I don’t expect it to be significant. We did have some severance, as we mentioned in the first quarter. In terms of one-time cost we’re still, as we mentioned we’re still incurring outside services related to getting a joint venture to the finish line and getting that kicked-off, and that we should start seeing that taper off in the third quarter.
Jeff Osborne: Makes sense. And my last one is just – is there any notable technical progress that you could update us on – on the hydrogen ice engine platform more broadly?
