Tim Moore: Thanks. It was very nice to see the continued strong organic sales growth, gross margin expansion, and the return of free cash flow that was amazing free cash flow number. I just had a question, for your sales growth guidance for this year. With the swing factors between the low-end and the high-end range, is that more based on a mild recession factored in or is it based on if EV’s industrial growth remains pretty strong? Just kind of curious, you can maybe speak to what the different scenario-wise between the top and the low-end?
Jana Croom: Yeah. So, that’s actually a really great question and guidance is something quite honestly we grappled with a lot, trying to take in all of the macro data that we’re seeing, particularly as it relates to China, Europe, et cetera. We really, really work with our customers to make sure that what we have in terms of forecasting is as accurate as it can be. We try really hard to get all of the false signals out of the funnel and to put forth, and so what we provided you in terms of our net sales guidance is really what we think we’re going to achieve and the buoys in the water are, you know, what might happen in terms of recessionary output and also steady state norms. It’s also really interesting to point out that after a 35% growth year, we’re still growing at 4% to 7% and that’s with a $100 million reduction in a single customer.
So if that tells you anything that should help provide some guidance in terms of where we’re thinking, we’re going to shake out for the full year.
Tim Moore: Jana, that’s great and I’m glad you mentioned that in your prepared remarks about that Medical customer. Ric, I have a two-part question for you. Could you maybe elaborate on your more selective growth approach? I believe Kimball Electronics has walked away from some lower-margin opportunities in the past, like heated car seats and power windows, but I’m also wondering maybe if you talk about that, could you also maybe talk about on the other hand, there is a large medical opportunity for downstream. I imagine some customers are coming to you like they’re doing to other providers and asking you maybe to take out all of their business. Can you maybe talk about that and how you have to see if it’s a strategic fit, maybe that could help Medical revenues accelerate after that one customer’s hiccup normalizes?
Richard Phillips: Sure, absolutely, Tim, and great question. Certainly, something that we think hard about, we do pride ourselves to your point on really being selective in the programs that we participate in. We want them to be large enough that they can scale. We want them to be growing over time, so that we’re working with our customers to drive growth and we want to make sure it’s a fit such that it can meet our profitability hurdles. So we scrutinize that pretty hard. We also are revamping our strategic planning process even further to look further out at different technologies and really try to anticipate the fit there. So there is a lot of rigor that goes into that funnel and the screening and where we really go after and try to win programs and what we see is those ones that we determine our fit and go after, we have a really high win rate that we’re really proud of.
To your question in Medical, we’re hunting Medical hard. We’re seeing lots of activity in terms of discussions, quoting on specific programs, but also to your point, this trend of OEMs in Medical looking to outsource manufacturing is obviously a really attractive trend for us. We’re in multiple discussions on that topic right now. And in fact, we almost internally look at that as a form of M&A, right, a way to sort of acquire the manufacturing of our customers in a way that maybe allows them to free up capital and resources and allows us to specialize in what we do best. That’s particularly effective and attractive to us as I mentioned in high-level assembly, that’s a section of that business that we really like because it expands our role, it’s sticky, and it’s a great place for us to partner and even more so for the long-term.
Tim Moore: Great. That’s very helpful, Ric, and that’s exciting news to probably see a reacceleration in Medical when you lap this customer drag. And Jana, just lastly, and then I’ll save the rest of my questions for offline later, you provided capital expenditure guidance for this year, but how should we think about the step down in CapEx for the following year after you finish spending in the Poland plant, maybe by the spring and finished the equipment for Mexico, it’s fair to assume probably be below the $70 million to $80 million guided this year, right? I’m thinking for the June ’25 year to step down you think.
Jana Croom: Well, FY’24 is really about sort of growing into our close also, so in 18 months we expanded three facilities, higher CapEx, bricks and mortar, getting the SMT lines in place, and so we’re really focused this year on that 38% capacity increase and maximizing that as much as we possibly can. What we’re examining into FY’24 is the macro environment, the growth curve that we’re seeing, and what we may need to do in terms of future expansion. So I don’t quite want to say FY’24 is going to be a downtick because we haven’t sorted through that yet, provided we are not expanding in another geographic region. You could expect, yes, that it would normalize to something along the lines of depreciation plus what we would need to spend for automation and higher-level technology, but I’m not ready to commit to anything related to FY’24 yet. So you don’t get to hold us to it, more to come.
