Yilma Abebe: Thank you. I think you partly answered sort of my last follow-up question on the free cash flow. And that is sort of, I guess, a bit of a bridge. It sounds like some of it is going be from driven by revenue increase in the related profitability. A lot of it appears to be working capital come back. If you’re ready, maybe to help us in terms of the relative size, what is the working capital contribution to this $40 million free cash flow forecast versus the growth in the business and improving profitability? Thank you.
Patrick Fogarty: Yes, Yilma, I would comment that the excess working capital, as I mentioned in my comments, we believe, is roughly $50 million. That recovery or the harvesting of that excess working capital to cash will not occur overnight. We estimate that that will occur over the next 12 to 18 months as supply chain stabilizes, as further reductions in supplier lead-times take place. And I think clearly that will happen over 12 to 18 months. The additional working capital needed to grow our business into next year depends on the business segment. But in general, if you use 25% to 28% of every new sales dollars is invest in working capital, I think that’s a good starting point. And then consider the harvesting of the $50 million over the next 12 to 18 months.
Yilma Abebe: Thanks very much. That’s all I had.
Matthew Crawford: Thank you.
Patrick Fogarty: Thank you.
Operator: Our next question is from Dave Storms with Stonegate Capital Markets. Please proceed.
Dave Storms: Morning, gentlemen and thanks for taking my call. Just wanted to kind of start on backlogs. I know last quarter you mentioned you were looking at probably about six to nine months of backlogs. Has that kind of shortened up a little bit or what’s the color that you’re seeing there?
Matthew Crawford: No activity. Again, our Capital Equipment business, which is what we’re referencing, Dave, is what we’re talking about when we allude to those backlogs. Most of the rest of the business, the non-equipment business is shorter term sort of visibility. So, when we refer to the Capital Equipment business in the backlogs, they’ve continued to stay strong. The order book continues to — it can be a bit lumpy. But in general, the order book and the order interest continues to be strong. And again, I would point to while there may be some fears of a recession, I would point to the fact that the manufacturing sector in the United States has been massively underinvested in. And as they’re looking at some of the megatrends, I mentioned in the first part of my comments, particularly as it relates to infrastructure and defense, we’re underinvested as the country.
So, I think we’re going to continue to see investments in upgrading the capacity and the productivity and the base. So, it may be choppy, it may be influenced a bit by credit, but in general, I think we’re seeing some positive trends.
Dave Storms: So, that’s actually a good segue to my second question here. I’m sorry to hear, some rumblings of other people seeing funds related to the Inflation Adoption Act start to trickle into the market. Is any of that expected to get to you guys in Park-Ohio? And does that give you any visibility into 2023 related to any — to that might make a few?
Matthew Crawford: I think it’s a great question and I wish I had a better answer. The answer I would tell you — what I would give you is, trickle is the right word. I don’t think there’s a ton of visibility and how that money is going to be spent, at least where we are in the supply chain. I will say certainly large defense contractors and other large government suppliers are certainly — I’m certain having discussions at that level of how to invest these dollars. So, there are some very strategic conversations going on between ourselves and some of the kind of household name manufacturers around increasing capacity for them, with our equipment, for us to support them, and I think it’s very real. And then layer on top of that, some of the reshoring that we’re seeing motivated by the Infrastructure Bill and the Inflation — I mean, that we’re continuing to see I think a need for a more American manufacturing.
