Jagadeesh Reddy: Yes, Mig, we were not in a position to provide any guidance on 2024 at this point. Having said that, we remain committed to the 3-year revenue, EBITDA and cash flow targets we laid out recently at our Investor Day. We continue to expect progress towards the goals even with a perhaps muted 2024 growth picture. So we expect 2024 to be a growth year for MEC. We expect to grow above market next year, both top line and margin expansion and cash flow generation as well. So we’re pretty optimistic about 2024, but we’re not in a position to provide any particular guidance at this point.
Mircea Dobre: Yes. Well — and I appreciate that. And I wasn’t necessarily wanting to pin you down on guidance for ’24. It was more trying to understand it’s November, right? So you probably have a pretty decent idea in terms of the incremental programs that you have that you know will start flowing into ’24 because your macro commentary is obviously more cautious than it was before. So I think we’re all trying to figure out what MEC specifically can do to sort of offset this more difficult macro setup, if you would.
Jagadeesh Reddy: Yes. No. Okay. So on Slide 5 in our deck that we put out this morning or last night, you can see that we’re projecting most of our end markets to be either down or slightly flat. And we’re projecting our power sports market to be up even though the market is going to be down, up significantly given our new program starts that we discussed multiple times in the last couple of quarters in our Investor Day. Similarly, our commercial vehicles also, even the market may be down 18%, 18.5% is what ACT is projecting. That market is going to be down next year. We’re expecting at least to be flat in 2024. Similarly, Construction and Access, we’re 60-40, construction and access. That’s how we break our revenues. We expect access market to be pretty good going into 2024, given the customer comments that we heard in their public comments recently.
Construction — residential construction obviously is down. But we have other programs that we’re on, that gives us confidence that we will at least be — as a second segment, we will at least be flat next year. Similarly, ag — residential small ag is down. But large ag and then addition from MSA, ag demand — sorry, revenues as well will continue to give us at least a flattish picture next year in our ag markets as well. And military is a small segment. We expect to be up, given some new program wins. So overall, that’s why it gives us confidence that even though the end markets might be down next year, right, we will perform above end market averages.
Mircea Dobre: Okay. And sort of sticking with the Slide 5 and the way the mix, the revenue mix is going to be evolving between these verticals. Is there any insight to be gained in terms of what that looks like from a margin standpoint? And like military friends, if it’s growing quite a bit. Is that positive for margin for mix or now?
Jagadeesh Reddy: It’s, I would say, generally speaking, maybe slightly accretive when the mix change for next year, Mig.
Todd Butz: And I would just add that generally speaking, our margin performance in each segment is very similar. Maybe within 1 or 2 points, it is in place getting 35% margin in 1 market, 15% in another. So it’s very similar across the board.
Mircea Dobre: Okay. Understood. And last question, just a clarification around the UAW strike. So your guidance for the fourth quarter, does that assume any drag from the strike, like for instance, in the month of November or not, you’re just sort of quantifying it, but it’s not factored into the numbers yet?
Todd Butz: It has not been factored into the guidance. In a normal course, we would expect to be within our original guidance. Now the strike, which we’re optimistic and hopefully, they get settled here in the near term. If that is prolonged, that would most likely result in about $6 million to $7 million per month of lost sales and about $1 million to $2 million of EBITDA impact. Again, has not been factored into our guidance.
