Kyle Lorentzen: Yes. So, on the input cost side, I think it’s probably a little bit of a mixed bag relative to what we are seeing. I mean there is definitely some inputs that are coming down, and there is other inputs that are – we are actually seeing some increases in. I think just in general, how you should think about it is if we go back to where we were 2 years ago, our input costs are – still remain higher than where we were back then. I think as we think about the 20 – as we move into 2024, I don’t think we expect to see major changes there or at least in any modeling we would be doing. And I think as we have talked about before, for us, it’s really trying to manage the margins and how the pricing versus the input costs impact margin.
So, I think it’s a mixed bag. I think we are definitely still higher than where we were. It’s definitely still inflated. We are seeing some relief, but not to the levels that we saw sort of pre-supply chain challenges.
George Notter: Got it. And then you mentioned price, I mean any opportunity to kind of try to go after some more price in the marketplace to try to improve the sort of margin and EBITDA situation here?
Chuck Treadway: I think we are competitively priced at this point. So, I wouldn’t be – we are not seeing much price pressure. So, what I would say right now, we are just seeing prices hold right now.
George Notter: Okay. Thank you.
Operator: [Operator Instructions] Our next question comes from Sam McCaney with JPMorgan. Your line is open.
Joe Cardoso: Hi. Thanks for the question guys. This is Joe Cardoso on for Samik. So, just one question from me. Some of your peers in the space have highlighted recent headwinds in the form of enhanced ACAM program, given participation would exclude customers from participating in BEAD. Curious if you are seeing any of that in your customer base? And if so, any way you can characterize how much of your customer base would be eligible to participate in enhanced – the Enhance ACAM program, just trying to get a sense of the potential impact and exposure there. Thanks.
Chuck Treadway: Can you restate the question? I didn’t catch – I didn’t understand the term you used in the beginning.
Joe Cardoso: Yes. The Enhance ACAM program is essentially an extension of the original ACAM program with investments to service provider customers, where essentially they can essentially participate in that instead of the BEAD funding and essentially, what that entails is that the spending would be tranched out as opposed to seeing the funding all upfront for BEAD. So therefore, customers are taking a pause in deciding if they want to participate in that or indeed I don’t know if you guys have any…?
Kyle Lorentzen: Yes. I think the way that we would answer that is, we are understanding the requirements of BEAD. We are working with our customers. There is lots of permutations that we see relative to the funding and the programs. The way that I would think about it is we are in constant dialogue with the customers about what they can do and what we can do. And I think that’s – for us, that’s still unfolding. And we don’t have any specifics around that right now.
Chuck Treadway: And the other comment I would add to that is BEAD the largest program at $42.5 billion and the states are going to start getting awarded that business in the first half of ‘24. And we will see a small revenue impact from that in ‘24, but the large ramp of that is expected more in 2025.
Joe Cardoso: Got it. Thanks for the color guys.
Chuck Treadway: Thank you.
Operator: [Operator Instructions] Our next question comes from Matt Niknam with Deutsche Bank. Your line is open.
Matt Niknam: Hi guys. Thank you for taking the question. Just two if I could. First, on visibility, I am just wondering maybe, Chuck or Kyle, is the commentary varying at all across CCS, OWN, ANS, or is it fairly uniform in terms of everybody pausing at a minimum through the middle of next year? And then secondarily, on asset sales, you referenced that as a potential option, something you may be evaluating. I know there have been some press reports out there. Just wondering if there is any additional color you can offer up in terms of what pieces of the business could potentially be monetized? Thanks.
Kyle Lorentzen: Okay. So, I will take the first part of the question. I think as we think about visibility across the business segments, I think where we have the lowest level of visibility is in the CCS and OWN business. And I think although we are in constant dialogue with our customers, trying to get the true understanding of their build plan, I think is challenging at this point in time. And I think we are not alone in that position. I think on the ANS side of the business, we are talking to the major customers and some of the challenges that we see now, we believe are short-term in nature as they adjust their inventory levels. And then I think we have talked about mix where yes, I mean we have pushed a lot of products into the channel partners as we release some backlog.
They are digesting that, that we are seeing a little bit lower order rates. But again, in that business, a lot of our business is going through channel partners, and we have a lot of leading metrics to look at what the funnels are and what we are winning ahead of actually shipping the product. And I think we feel that, again, as we move into ‘24, we have some visibility in the mix. So, I think CCS and OWN, I think are probably the places that we have the most challenges with the visibility. The second part of your question, I mean we are really not going to comment on that. I think we have identified that asset sales are a possibility for us to deal with the capital structure. And I think that’s – at this point in time, that’s all we are going to say.
Matt Niknam: Thank you.
Operator: [Operator Instructions] Our next question comes from Steven Fox with Fox Advisors. Your line is open.
Steven Fox: Hi. Good morning. After what you just said, Chuck, this might be an unfair question, but I was just curious, [Technical Difficulty] CCS and OWN business to disaggregate the inventory correction from the actual cycle, just – and maybe compare sort of cyclical challenges to prior cycles, especially given what seems like over enthusiasm for like government funding that is impacting things. Thanks.
Chuck Treadway: Yes. I would say what we are really learning is there was obviously an overbuy, similar to what we saw in the rest of the economy related to COVID. We are trying to get that understood about in terms of percentage. If you really ask us the ballpark of it, it could be a 20%-ish type number. And what we have been working with our customers, and I have had personal visits in their offices and all the major customers where we are talking with them about, we want to be a better supplier to you when this thing turns back on because it will turn back on. And we need help understanding the specific SKUs that you are going to be buying not because I can’t produce dollars, I have to produce SKUs. So, we have been working a lot with them in understanding their inventory that they have on hand.
Understanding what they think they are going to need in their build plans, but we need it at the next level of detail, and our teams are working together to do that. And I feel confident that we are going to be a better supplier and that relationship is going to help us going forward.
Steven Fox: And just to be clear, you are saying a 20% inventory overbuy, is that what the 20% was referring to?
Chuck Treadway: That’s the ballpark, Steve, if I had to say what I think, yes.
Steven Fox: Okay. Thank you.
Operator: And I am not showing any further questions at this time. I would like to turn the call back over to Chuck Treadway for any closing remarks.
Chuck Treadway: Yes, I would like to thank everyone for their support of CommScope and for your time today. I would like everyone to have – wish everyone a very good week. Thank you.
Operator: Ladies and gentlemen, this does conclude today’s presentation. You may now disconnect and have a wonderful day.
