Chris Villavarayan: I mean, we price for value, Steve, and there’s and you saw that in the fourth quarter, some of these discussions went over two quarters for us ultimately to get to retroactive improvements. But Hadi Awada and the team that he’s built over the last two years, we really started to see the progress 18 months ago. And some of these conquest wins, they take 18 months to two years to ramp-up and actually for us to get the sales. So, this has been a continuation of his team continuing to drive service, bringing good products and bringing the right team to the market. And equally important, I think we should mention that all that new business is coming in at margins that we’re very proud of.
Steve Byrne: Okay, thank you.
Chris Villavarayan: You’re welcome.
Operator: Thank you. Next question today is coming from Kevin McCarthy from Vertical Research Partners. Your line is now live.
Kevin McCarthy: Yes, good morning. In the first quarter of ’23, would you expect to run your assets at a similar rate to the first quarter of ’22 or higher or lower and how might that answer vary by your major businesses?
Chris Villavarayan: I would expect them to run pretty similar. Volumes are relatively stable. Mobility is going to be slightly up versus the first quarter of 2022. Industrial volumes will be slightly down, but overall it’s going to be very, a very similar buying picture.
Kevin McCarthy: Okay. And then as a follow-up, Sean, in your prepared remarks, I think you referenced $5 million of retroactive price adjustment. Can you speak to what that is, why it occurred and whether we should expect any additional so-called retroactive adjustments in the first quarter and beyond?
Sean Lannon: Yes, we’re not expecting any big retrospective, but you can imagine, Kevin, some of these discussions last a multitude of months and sometimes two quarters, ultimately to get this to the finish line. And so, that’s really what you’re seeing the dynamic in the fourth quarter. Some of these discussions have been going on for two quarters and you’re seeing the realization once we actually reached a final verdict, with the customers and actually able to invoice them. But we’re not expecting big retros in the first quarter in our current guide.
Kevin McCarthy: Understood. Thank you very much.
Operator: Thank you. Next question is coming from John Roberts from Credit Suisse. Your line is now live.
John Roberts: Welcome, Chris.
Chris Villavarayan: Thank you.
John Roberts: Maybe I could lean on you a little bit for your auto experience. The auto dealer inventories are still relatively low. Do the auto producers still have constraints keeping them from fully further restocking or are they unconstrained and you think they’re just cautious about rebuilding their —
Chris Villavarayan: No, I believe there’re still constraints and a lot of my experience was on the commercial vehicle side. And as I think about, where commercial vehicle trucks and truck production sits, there’s historic backlogs on that side and if you look at some of the recent customer announcements with your earnings calls, you can see there’s continued pent-up demand as we look into moving into next year. And it grows across both baskets, whether it’s the Mobility side or sorry the light vehicle side or the commercial vehicle side. And you can see even with our numbers, right, so we’re going from $82 million, up to $83 million to $84 million in ’23, but if you look at the external forecasters there at $85 million, so we do have some op upside here, but again we are being cautious primarily, if you think about China, if you think about Europe, we want to make sure we have a fixed cost model that is slightly lower and then we are prepared for the upside here.
So, and if you look overall, I think the key message is that we have, let’s call it a market that we believe is going up primarily because inventories are still tight on both sides. On top of that though, as Sean mentioned on the last point, we’re outpacing end market activity, whether we’re driving growth in as you heard on the Mobility side, on the light vehicle side with, Hadi and the team have driven significant growth in China. And then on top of that, on the heavy side, they’ve also closed with Navistar here. So, anyway, great story across the board.
John Roberts: And then, just a quick one, Sean, not that it’s big, but what’s driving color pigment prices up? It’s very few things are actually going up right now.
Sean Lannon: Yes, it’s just a supply demand imbalance that continues to inflate those.
John Roberts: Okay. Thank you.
Operator: Thanks, the next question today is coming from David Begleiter from Deutsche Bank. Your line is now live.
