David Strauss: Mark, could you just — could you comment on the inventory levels you’re carrying? And it looks like the inventory balance is basically where it was pre going back to 2019 sales or 20% lower. I mean, how much excess inventory are you running today? And when do you expect some of this to reverse out?
Mark Hartman: Yes. So we’re significantly increased on the inventory and well above where we want to be, that is for sure. Really with the supply chain and the labor disruption, our inventory has gone up, it continued to go up here in Q1. It increased in fiscal €˜22 and continued to go up here in Q1. What we’re focused on as a team is, as we mentioned in our prepared remarks to begin improving here in the second half of the year, both around output and that would help with reducing inventory. So at this point, it’s at, like you’re mentioning, almost all-time highs from that perspective and something the team is very focused on making improvements. And with the output increases that were anticipated in the second half of the year that would help reduce some of that inventory as we go forward.
David Strauss: Okay. And on the Defense side, I mean it looks like the Aero, the Aero OEM and aftermarkets coming back as would be expected. But what is the right run rate and I’ll think about for the defense business was $750 million revenue a year business that now looks like it’s $600 million? I mean, is that the right way to think about as a baseline for the business going forward? Or is there something that’s going to fill in the, I guess, the gap that JDAM has left?
Mark Hartman: So on the Defense side, I would say that it’s in the ballpark of what we’re looking at based on of the decline in the JDAM. Now we have spoken about there is some increases both with the small diameter ROM, SDB and AIM-9X, which is a weapon of choice on the F-35. But the volumes aren’t at what the volumes were of the JDAM back, when it was the weapon of choice back in the last decade or so. On the Defense aftermarket side, we do see strong demand there. A lot of our supply chain and labor disruption is impacting that defense aftermarket side of the business. So what we’ve talked about for fiscal ’23 is we anticipate defense to be stable throughout the year. Obviously, some headwind as I was just describing on the guided weapons side, offset by some improvements on the defense aftermarket side.
Based on output improvement that we’ve spoken about here in the second half of the year. So that’s kind of in that stable world is kind of where we’re at from a revenue perspective for FY €˜23, compared to FY €˜22.
David Strauss: Okay. And last one for me. You said your Q1 came in line with your, I guess, internal plan. Obviously was, you know, a fair amount below what the was looking for. Any help you want to provide to calibrate us on Q2?
Mark Hartman: So we don’t give quarterly guidance as you know. I’ll go back to really a lot of discussion that we had in November that I also had in my prepared remarks today. This is a second half improvement recovery is, kind of, where we are starting to see, that’s where it will begin to subside. So if you look at Q2, we will have the variable comp that I spoke about, right, the $50 million increase is what’s anticipated for the year, compared to FY €˜22. We did book $12 million more in Q1, than we did the prior year, but that will still be there. As Chip was mentioning, for example, with the Rapid Complex Machining, improvements that we’re making. Again, that won’t really be producing many parts here in Q2. It’s more of a back half opportunity for us.
