Martin Englert: And how – when you’re looking at a hybrid vehicle versus battery EV, how does the electrical steel intensity change from a typical platform? Is it some multiple one versus the other, or is it not markedly different?
Jeff Klingler: Martin, this is Jeff Klingler. That’s a tough one. It does get marginally more electrical steel intensive, as you go to a full electric vehicle. But, we have some data it definitely varies by program. It’s going to evolve, but any number of traction motors is a good thing for us in the transition.
Martin Englert: Okay. All right. Appreciate the color. Thank you very much.
Jeff Klingler: Thank you, Martin.
Operator: And we will take follow-up questions from Phil Gibbs with KeyBanc Capital Markets. Your line is open.
Phil Gibbs: Thanks very much. Are the payments to the parent company done following this quarter? Is there any residual moving ahead?
Tim Adams: We paid the $150 million dividend on December 1. There’s nothing else that we have to do. I mean, we’ve got some TSAs and some long-term agreements. We share a campus and we’ve got some of those types of things, but – if you’re talking about the dividends specifically, that is done. It’s paid and we moved on.
Phil Gibbs: Following the payments in the quarter, can you just remind us what your current liquidity is?
Tim Adams: Yes. We’ve got ample liquidity. I think you noted it in your note. Our leverage is pretty low, and we’ve got ample liquidity, to pursue any of these growth projects from the ABL we put in place.
Phil Gibbs: And what’s the size of the ABL? Can you just remind us of that?
Tim Adams: $550 million ABL.
Phil Gibbs: And what’s the rate on that right now, just given all the volatility and interest rates?
Tim Adams: Just under 7%. It’s an [AFE] SOFR plus type arrangement.
Phil Gibbs: The last one from me, is just kind of a broad question. I know you’re just getting your sea legs as a standalone company, but given the historical consistency of free cash flow and operating cash flow, is there any thoughts over the midterm to put in a buyback or remain active in the M&A channel, or both under consideration?
Geoff Gilmore: Buybacks, we talked a little bit about during Investor Day. It’s going to be a way that we return capital to shareholders along with dividends. We have not put anything formal in place. We are still discussing that. So at some point, we would expect to have a buyback program in place. And we are continuing to look at M&A opportunities. We haven’t really stopped. We’ve got these big growth CapEx projects, but as we talked about, we’re pretty selective in who we want to buy, right. We’re looking for high value-added companies that we can bolt on, and complement what we have or enter new niches. So, we’re not out of M&A. We’ve just paused a little bit to get through the spin, and we’ll crank that effort up and continue to look, for companies that match us from a culture standpoint, and match us from a high-value-add standpoint.
Phil Gibbs: I did actually have one more. You mentioned in your release that the tolling pricing was up quite nicely year-over-year. Is that a good baseline to use moving forward, or is that just a mix and timing thing?
Geoff Gilmore: It’s a mixed thing. I mean – you’ve got to think about this in two ways. So, if you do a straight high-value-added process like galvanizing, it’s going to command a higher price per ton than, say, a slit. But then we report ship tons for tolling. So, if you do multiple processes to a coil of steel, so you pickle, you galv, then you slit it, that’s going to show up as a high invoice, or a high-priced item, right. So, it really is a mixed situation for us.
Phil Gibbs: Thank you.
Geoff Gilmore: Hi Phil, I want to circle back on your question, about Q4 and automotive. Our automotive or our volume typically is up in the high single-digits. I said low single-digits. It’s probably closer to high single-digits.
Phil Gibbs: Thank you for the clarification. Appreciate it.
Geoff Gilmore: You bet.
Operator: And ladies and gentlemen, that is all of the time we have for questions today. So, I will now turn the call back to Mr. Geoff Gilmore, for closing remarks.
Geoff Gilmore: Thank you, everybody. Appreciate the participation and the interest in Worthington Steel. Again, very proud of our employees, excited about the progress this quarter, and even more excited about what’s to come. And we’ll look forward to our next call and sharing our progress on our strategy. Have a great weekend, everybody. Thank you.
Operator: Ladies and gentlemen, this concludes today’s call. And we thank you for your participation. You may now disconnect.
