Patrick Sheffield: Just a couple of housekeeping items. One, could you kind of share how much the refinancing costs and fees in the first quarter?
Jonathan Banas: Patrick, Jon again. We haven’t gone through in the disclosed fees and other costs to affect the refinancing but however, when you think about taking out the previously existing senior secured notes, we did have to incur that prepayment premium and then as also disclosed, there were discounts on the newly issued notes, the backstop fees and the customary fees, I’ll say, for advisories in the way of financial and attorney bills and the other customary closing costs. So most of those fees are already publicly out there, and we’re racking up the rest of those costs, and we’ll have those in our Q1 cash flow that we’ll talk about here in a couple of months.
Patrick Sheffield: Okay. And then on working capital, do you — is there any framework you can share about whether you think that’s going to be a source or use of cash in ’23?
Jonathan Banas: Yes, Patrick, in my prepared remarks, I indicated that we think free cash flow is going to be positive with all of the current assumptions that we’re operating with. And a part of that free cash flow positive will be further optimization of our inventory balances. Jeff described things looking more stable this year. That will help us manage inventory a little bit better. We only need to have as much safety stock on hand and we’ll be able to have a better minimum order quantities once those — the release schedules and EDI schedules stabilize. So that will be a component of positive working capital. And also, we are looking to continue to drive our tooling balances down. As a reminder, we spend tooling dollars on behalf of our customers and get reimbursed once those tools are ultimately built and PPAP and approved by the customer.
So we’re — in part of our ongoing conversations with our customers, we’re looking for more progressive payments on tools rather than waiting until the end and tying up Cooper Standard Capital and using our balance sheet to fund those tools. Instead, we’re looking for assistance from our customers to help foot the bill on the tools they ultimately own. So we think there’s opportunities to drive the tooling balances down and as a frame of reference, we ended 2022 with about $100 million of tools on our balance sheet that somebody else owns. And with our current cost of capital, not the most efficient use of our resources, hence, the hike conversations with our customers there. So between those 2 working capital line items, we see a lot of benefit.
With a rising sales environment, and of course, you always have the offsetting effect that accounts receivable will go up and tie up some working capital at year-end. But net-net working capital should be a positive for us.
Patrick Sheffield: Got it. Okay. And then on the 2023 bridge — EBITDA bridge, you have $150 million benefit from volume mix and price. And I was just curious how much of that $150 million is still subject to finalizing commercial agreements in Q1? In other words, does that reflect what you’ve already achieved? Or is that taking in some assumption on incremental positive progress in your Q1 commercial discussion.
Jonathan Banas: Yes. It is forward-looking on our expectations. As Jeff described a couple of minutes ago, we’ll have better line of sight as Q1 closes here, and we have a lot of those customer agreements negotiated and locked up. So the $150 million includes our expectations about how those will go, but not solidified as of yet. So we’ll have a better update for you here once again, we close Q1.
