Having said that, for 2024 we expect $1 million to $2 million of pricing — price capture, a net of inflation. So it’s a really good start, a net of inflation, $1 million to $2 million in this environment, is a pretty good start for us on that journey. And I expect that to continue to get better as we progress.
Vladimir Bystricky: That’s really helpful color. I appreciate it. And then, just on the capital allocation side, can you talk about the $7 million to $10 million of investment in high-return capital-light growth advancements that you’ve called out on the slide, can you give some examples of what these investments entail and how we should think about the potential pace of these kinds of investments looking beyond 2024?
Todd M. Butz: Yes, I’ll give you a couple of examples. This year, in particular, we are focusing on cobots, right? Cobots are — they are similar to robots, but they sort of work with humans a lot more flexibly than a regular robot. So when we think about automation, we’re looking to deploy numerous instances where we could actually use a cobot, and that could eliminate not only a human operator, but also the cobot can run lights out 24/7. So, we’re trialing that technology in multiple locations, in multiple plants, in multiple applications. That would be one example. The second example would be, as we look to replace old equipment, we will look to automate, use newer technology, and continue to look for productivity improvements in terms of labor, but also in terms of capacity utilization.
How can we run the machine 24/7 is really how we think about these automation investments. Many times, these are not expensive. A cobot, just the gear itself, is like $70,000, and fully implemented, maybe $100,000 to — you push it $120,000, right. If that $120,000 cobot can eliminate one operator in three shifts, it’s a quick payback. So that’s how we think about these automation investments, and then continue to deploy automation to drive productivity and expand capacity.
Vladimir Bystricky: Right, appreciate the examples Jag. I will hop back in queue.
Jag A. Reddy: Thanks Vlad.
Operator: [Operator Instructions]. Our next question is from Ted Jackson of Northland Securities. Please go ahead.
Jag A. Reddy: Good morning Ted.
Edward Jackson: Congratulations on the quarter. Yes, good morning. My kind of easy questions were all asked, or actually have been answered in your presentation, so let’s ask more like kind of conceptual things. So let’s start with MSA and you did talk a bit about the customer cross-pollinization. But can you give us an update in terms of the capacity utilization at MSA today, I mean, when you bought the company, it was at 80%, you had about 20% of that to fill, where does that stand now, when do you think you’d get that at 100%?
Jag A. Reddy: Yes. When you think of MSA, initially that utilization rate was around that 80%. We’ve opened up excess capacity through our MBX over the last, let’s call it, three quarters. So I would say today that’s more like 70%. So it provides us even more opportunity to cross-pollinate that facility. Our pipeline remains very strong. We’re very encouraged by the number of opportunities that we’re seeing. And it unfortunately takes a little more time in some circumstances when customers model changeovers, and just their timing of launch doesn’t always align with where we’d like it to see it. But generally speaking, everything there is really shaping up as we expected. And again, you can see by the performance in the quarter, they’re all performing given our initial expectation. And a lot of that is surrounded by really adapting that MBX culture.
Edward Jackson: Okay. Then getting away from MSA and also Hazel Park, the rest of your facilities, can you give us an update in terms of where utilization rates are in there and where you think you can get them in the next one year and two years?
Todd M. Butz: Yes, as we discussed, Ted, Hazel Park will be a $100 million revenue plant for us in 2025. We have the demand to fill that plant, and we are continuing to ramp our product launches in the plant. And we are optimistic that we’ll hit that target by end of this year going into 2025 to make Hazel Park a $100 million plant for MEC in 2025 and beyond. And after that, how much more can we expand capacity at Hazel Park with MBX and productivity initiatives, we’ll focus on that once we get into 2025. But at this point, we’re focused on ramping the plant to hit our targeted revenue for 2025.
Edward Jackson: Jag, actually I was asking for the non-Hazel Park plants, the ones that you’ve been very upfront with regards to Hazel Park itself, although it does take a question. I think I recall with — maybe it was, I think it was the last call, you were on track for $100 million, you had $75 million of what you expected to run through there, like in the books, and you had $25 million more to go. So just since we’re on Hazel Park, is it fair to assume that you’ve kind of circled on the rest of that business that you needed to fill that plant in terms of your guidance? And then again, kind of more a question in kind of where is capacity outside of Hazel Park and MSA and kind of where you see the trend lines for that? Thanks.
Jag A. Reddy: Yes. We continue to fill that $25 million pipeline, if you will. Our pipeline is very strong. Going into 2025, I am confident that we will be able to fill that revenue gap in Hazel Park — outside of Hazel Park, Ted. The demand continues to be strong. We continue to open capacity, even on push shifts. If you recall, we were full on push shifts. We were approximately 79% full on second shift and third and fourth shifts, right, much lower. So, what we’ve done over the past year is to continue to open up capacity with MBX initiatives. We have done about 150 Kaizen events in the last 12 months — sorry, last five quarters. With all of those activities, we continue to expand capacity and productivity both on first and second shifts.
