Mike Halloran: Yes. So basically, it seems like you’re saying, from a seasonal perspective, you’re going to get a lot of variance by end market, but you’re not expecting acceleration in any of kind of the shorter cycle, earlier cycle type things in the area where you might see a little bit of that extra strength of these longer-cycle things. So, not assuming some sort of recovery in the year in the areas where there’s a little bit of stress that’s being seen in the short term, correct?
Louis Pinkham: I would tell you, resi HVAC later — fourth quarter of the year is we would expect it to see a little bit of a rebound. But otherwise, no, I think you’re off right on. We don’t really see a lot of seasonality, though, Mike. I wouldn’t reference this — seasonality. But when you think about it — a couple of other things I’d just provide you. When you think about the strength of our backlog, up 45%, when you think about the comps, the stacking of orders for both our commercial and climate business has a 30% stack in fourth quarter. So, we weren’t so surprised about orders being down in fourth quarter in those two segments. Overall, though, we’re forecasting, our viewpoint is our backlog will likely drop as the year progresses. The first half of the year, orders will be down high-single-digit, low-double-digit levels and starting to recover in third and fourth quarter.
Mike Halloran: That’s very great context. And then, a follow-up is just on the success you’re having on new product side. Maybe talk about how the market is receiving some of the initiatives you’re putting out there and the confidence, I suppose, in that end market outperformance remains high. So any help on that side would be great.
Louis Pinkham: Yes. Our confidence remains quite high. Really, the only thing that’s going to slow us down is the supply chain. And whenever you launch a new product, it takes a little bit longer and it’s a little tougher. Electronics continues to be a bit of a constraint for us. But, we have a partner OEM in our compressor drive. And so, we can accelerate that as fast as I can produce it. We have a partner OEM in our global motor impeller solution, a COPRA solution, where our partner OEM would take more than I can, capacity get out the door. It’s a great product. It’s a smaller footprint. It’s more energy efficient than anything in the marketplace. This aligns very well with how we think about our subsystem solutions and driving differentiation to solve our customers’ problem.
We come out with other products in the portfolio all around that approach. And so I feel our teams have done a great job over the last few years of developing a robust product road map. And we’re seeing launches come out that should help us overachieve market, and that’s why we’re pretty confident in that 300 — 250, 300 basis points of beat to market.
Operator: The next question comes from Christopher Glynn of Oppenheimer. Please go ahead.
Christopher Glynn: Thanks. Good morning. And I appreciate all the detail. Curious about some of the book-to-bills in January with the 1.2s at MCS and Climate. I think Climate’s just kind of a wonky, denominator moving around quite a bit there. But maybe the MCS there speaks to some particular strength. Curious if you could comment on that.
Louis Pinkham: We saw a little bit more strength in our order rates at MCS than we anticipated in January. You’re spot on. Aerospace is strong. There’s no question. We get larger blanket orders there. We’ve got a large order in January. We got a large order as well in solar in January. So, I think if you take those out, overall, it’s not a big surprise that book bill. The other — on Climate, just clearly, you’re right, it is a little wonky. The other wonkiness is that we did shut down the facility the 1st week of January, given the demand levels, and we thought — the facilities, I should say. We thought that was the most efficient manner to manage the order rates. And so, that’s why it’s 1.2 book bill.
Christopher Glynn: Okay. Great. And then, Louis, you mentioned early in the pitch about significant upside to the synergies once closed Altra. I think that comment ties to the relative progress towards the original $160 million target?
Louis Pinkham: No, it really ties to simply that once we close, we’ll have access to that $160 million target. I wasn’t referencing yet that we have line of sight to anything significantly more than that. Of course, we have not come out with growth synergies, which we are really bullish about with this transaction, and we won’t come out with until probably 6 to 9 months after we close, but that’s the whole reason why we’re doing Altra is to drive the accelerated growth for Regal. We’re very pleased with our growth synergies out of the MCS PMC transaction of last year. They achieved north of $25 million, which was right on track of what we were looking for. So, right now, though, nothing more to guide on synergies.
Christopher Glynn: Okay. Great. And then on the PMC, is it about $50 million plus incremental realized within the 2023 guide?
Rob Rehard: Yes, it’s $50 million incremental. Some of that is carryover and then plus new. So, it’s about $20 million of carryover and $30 million of new.
Operator: The next question comes from Julian Mitchell of Barclays.
Unidentified Analyst: Hi. This is Matthew Shaffer on for Julian Mitchell. My first question would be on China. You guys cited some pressures in Commercial and Industrial in the quarter. Can you maybe flesh out your expectations for China in 2023?
Louis Pinkham: Yes, happy to. Yes, definitely, there was some pressure. I think our team’s performed extremely well, though. And you see it in the results of Q4, even given the fact that we did have some operational pressure in Q4 and orders slowed. Now, we do not expect — and by the way, all of our operations are fully operational at this point in China. Supply chains are a little bit still constrained, but we expect a nice rebound coming out of Chinese New Year. And although we’re not forecasting a lot of strength in China in 23, I think it could surprise. Right now, it’s relatively flat year-over-year is our forecast. I think it could surprise China, always surprises me on the upside.
Unidentified Analyst: Okay. Thank you. And then just one on pricing, you guys don’t give much price disclosure, but are you still expecting to hold or grow price in 2023. And then what gives management the confidence that you guys will be able to do it potentially if there is more deflationary environment?
