David Sewell: Yes. So, there was a couple of things. Weather certainly played a role in December. We also have some really large national accounts that as it got to the end of the year, they just wanted to reduce their inventory levels. And then how January started, we feel we’re back to where we were at 22 levels. So, if you look overall, as far as a dollar basis, which I know is also common that way to look at it, it’s flat, which is similar to how the industry looks at this when you take out FX and pricing. So, we continue to see strength in our consumer business and where we’re at. And I think there was just a weather related and just some inventory relations with some large customers at the end of the year.
Phil Ng: You talked about how your export business was a little weaker in containerboard. Are you seeing any of that on your boxboard side? I mean, I believe the SBS you probably explored a little bit?
David Sewell: Yeah. So because of the weather, we actually could have sold a little bit more. But because of the weather that happened in December, as I mentioned, our sales were still up in paperboard. So we’re not seeing paperboard trends similar to containerboard at all.
Phil Ng: Okay. Super helpful. And then from an inflation standpoint, Alex, really appreciate the color you provided for fiscal 2Q. But how do you think about it more holistically on a full year basis some of the major inputs? And then on the nat gas side, certainly, it’s pulled back quite a bit lately. Can you remind us how much of it’s hedged because I think you started implementing a hedging program more recently?
Alex Pease: Yeah. So we’re probably hedged in the sort of 40% to 50% ZIP code. What we’ve done is our assumption on natural gas for the second quarter is around $5 per MMBtu. So that’s contributing about a $25 million tailwinds to EBITDA, when you think sequentially. When you think about the full year, the full year outlook for natural gas, we expect it to stay relatively stable. So on a year-over-year basis, down about, call it, 25%. The other area is where we are seeing favorability again, sequentially versus €“ and also year-over-year are fiber and freight. So fiber, OCC, sequentially, we anticipate being roughly flat, up about 3% to, call it, $36 a ton and then continuing to strengthen as we get through the balance of the year, but that’s offset by virgin, which is down about 8%.
So that becomes about a $20 million good guy to EBITDA sequentially from Q4. And then freight has mitigated as well. So sequentially, we anticipate that being down about 1%. The area where we’re seeing some inflationary effect offsetting the good guys that I just mentioned are both wages and chemicals, which are both up about 4%. So that’s about a $75 million headwind sequentially, and that will persist likely through the balance of the year. And then just while we’re talking about kind of guidance and the outlook, important to point out Gondi is going to add about $12 million of incremental depreciation for the quarter and about $47 million of interest. So as you’re getting your models tweaked, get those two inputs.
Phil Ng: And on your hedge exposure in nat gas, can you remind us where you’re hedged at the dollar value?
Alex Pease: Well, what we do is we dollar cost average it over the course of every month, we make a purchase and we’re in the market dollar cost averaging it. So like I said, the blended number that we can share is $5 per MMBtu over our overall portfolio.
Phil Ng: Got you. Super helpful. And then from a cash flow standpoint, I’m pretty impressed despite the uncertainty you’re able to reiterate your free cash flow guidance. Any offsets that you’re seeing that’s helping you kind of sustaining that level of free cash flow. And in this current environment, David, any thoughts on how you want to deploy that capital?
