On the positive side, those numbers are relatively consistent, absent the volatility of the corporate accounts and the OEM, which I discussed in the first question. So that’s – we feel good about kind of where we are on that front. So as you look forward off of that, then the quarters as the next one, and this is why we’re saying we’re taking this one quarter at a time will be impacted by kind of normal macroeconomic trends. And I don’t think – we’re looking at the same data you are, and we don’t pretend to have a crystal ball. So our focus there is that we’re going to – or continue to get every piece of business we can get. All indications are from all of our data sources that we’re either holding or taking share and we’ll continue to try and layer in margin and deliver free cash flow in this environment.
Ryan Merkel: Got it. That’s helpful. And then another question I had was on project releases. I was hearing that tighter credit and short of switchgear was delaying the releases of projects. Are you guys seeing that? And any visibility as to when maybe that gets a little bit better?
Neil Ashe: Yes. So I’ll take switchgear and then projects. First on switchgear. the lead times, as we understand it, have not yet – have not compressed for switchgears. So just to put that in context, they were in the kind of 50-week range, so not days, weeks range. So they have been the bottleneck on many of the already funded projects. So that’s the switchgear thing. Those will – all those projects will continue to happen. And now that our lead times are basically normal, our expectation is that they will order their lighting for those projects on a more normal schedule. So that should play out over a while. In terms of new projects, that’s really – from our perspective, that’s the macro environment. So with higher rates, I think everyone is going to relook at their projects.
And so anecdotally, we have projects that are – we have a fair number of projects in our independent sales network that are in queue, but they’re being changed, modified, kind of reevaluated, those sorts of things, which is frankly normal. It’s not abnormal. But it doesn’t make it clear exactly what the market size is going to be, which is why again we’re taking it quarter-by-quarter and we’re focused on kind of layering the margins, delivering cash flow.
Ryan Merkel: Got it. Very helpful. Thank you.
Operator: Our next question comes from the line of Chris Snyder with UBS.
Chris Snyder: Hello.
Neil Ashe: Hi Chris.
Chris Snyder: Sorry about that. I had a little phone trouble. So the last couple of quarters, we’ve seen very significant 300 basis points gross margin expansion, but also pretty steep volume declines. And I know there’s destocking headwinds. But is there a negative volume impact in response to the company’s increased focus on margins? And Neil, I would just be interested in hearing about how you think about that trade-off and why the focus on margins is the right one for Acuity. Thank you.
Neil Ashe: Yes. So I’ll happily address that. And from our perspective, the – we’re very clear with our company on how we create value. We grow net sales, we turn profits into cash and we don’t grow the balance sheet as fast. So as we look out strategically around price, volume, et cetera, our objective with the lighting, lighting control business is to be predictable, repeatable and scalable. And we’re delivering on that. So in the current environment, you’re right, and Karen has indicated this on other call, that we have had more price than volume over the course of kind of this year. So – and that’s a combination of kind of all of the factors we’ve talked about before. And that is delivering the results that we are seeing.
