Rajiv Prasad: Yes.
Steve Ferazani: Makes sense. Makes sense. Thanks for the detail on that. When I think about and I know this isn’t a one quarter or two quarter story, but when I think about the expectations that working capital trends down for multiple factors, but as supply chain constraints ease and you catch up on sales to orders, certainly that trend should grow in 2023, which would indicate much healthier cash flow as we think about that priority €“ immediate priority reducing debt. Is that reasonable to think that way?
Al Rankin: Reducing what?
Rajiv Prasad: Reducing debt.
Steve Ferazani: Reducing debt.
Al Rankin: All right. Just to make it crystal clear here, our focus is on producing trucks for which we already have the parts are a significant proportion of the parts. And so if we can find those one or two parts that are missing on individual trucks, we can work through without bringing in a lot of new additional inventory. And it isn’t so much a focus on bringing down debt, but as working capital comes down, the debt automatically reduces because we just €“ we don’t have the need for the debt in order to finance the working capital that we’ve already paid for. So there are a number of things that going to be at work here. On the one hand, receivables are going to trend up. On the other hand, inventory’s going to move down for the reasons that we described.
And one of the things that’s also going to be happening is that payables are going to be moving up because at the moment, so much of the inventory that we have €“ we’ve already paid for, and we’ll come back to more normalized levels of payables as we move through the course of the year. So that’s kind of the dynamic that’s at play. And we would expect that the cash flows in the business would more than sustain any other uses in cash €“ any other uses of cash and allow us to bring the debt down at the same time.
Rajiv Prasad: I mean maybe Scott can say a little bit more about this, but our debt, we have two types of debt, right? We have that term loan, which is really there for the long-term. Then we have our revolver, which we use for operationally, and our revolver has been higher than normal over the last couple of years that we’ve gone through this challenge. We want to bring that back to our normal state that we draw during the trough period in the month, and by the end of the month, it’s in good state €“ good shape pretty much not drawn. So that’s what we are working towards. We think we’ll get there in the second half of the year sometime, so that, that’s the primary mission. And then any excess cash we have beyond that will be used for some of the strategic initiatives that we had planned, which we’ve held off on due to this dynamic that we’ve gone through over the last couple of years.
Scott Minder: Rajiv, this is Scott. I think you’ve covered it well. By the end of 2023, we expect to have lower debt balances as the working capital comes down and uses of cash as Rajiv outlined, beyond debt pay down are to fund our growth initiatives and to maintain our factories to ensure we can efficiently produce the increasing loans throughout the year.
Steve Ferazani: Perfect. Thanks everyone for that. Last one for me, just on Bolzoni, I think you’d agree probably that Europe has held up a lot better than we were probably thinking six months ago. I would say that, I’m guessing that you’ve seen the same thing noting that Bolzoni, a lot of that business is in Europe. How much does that improve as Lift Truck, not just from you, but from your competitors picks up a supply chains eased? Or is that really more with the replacement €“ with replacement parts? How do we need to think about Bolzoni?
