Joe Ahlersmeyer: Nice job on the quarter. I just wanted to go back to the Infiltrator results in the quarter and thinking about also the comment around the sales improving sort of in line with the improvement in starts in the quarter? And maybe if you could talk about the relationship with completions, if you think maybe since completions in the second quarter on single-family were roughly flat, slightly down, if that had anything to do with the sort of maybe the lag in strength that you may not have expected if you were just looking at starts. And then on that improvement alongside starts, does that have anything to do with the destocking that you saw in the fiscal second quarter of last year? Maybe inventories were too low and so now starts are improving. You’re seeing ordering and inventories coming back up, just a theory, but would be curious to your thoughts.
Scott Barbour: This is Scott Barbour, Joe. And I would say yes, yes and yes. So I think as probably the distribution overcorrected a bit. And as they saw housing starts getting better that’s demand for that septic distribution. They started to bring in at a slightly better pace than we anticipated, and that’s how we exceeded expectations. I think completions — starts and completions have kind of narrowed again back to the kind of more traditional time lags and stuff like that. So I think that has benefited Infiltrator. I would also say that probably where they participate in those kind of ex urban or suburban or rural homes is probably more consistent and sticky than kind of the volume homes, which has been the big swing kind of in starts and whatnot.
So there’s a lot — that kind of threw a lot at you. That third one is more kind of our belief and somewhat kind of tribal. But I think those first two things of probably overcorrected as distribution overcorrected. The demand looks better. The distribution began to kind of bring in at normal rates because we went back and looked at that. And if you kind of look at seasonally and historically, it was kind of normal rates that they were bringing in. We’d add that it looks to be flowing through on our channel checks and reorder patterns look to be pretty normal right now for in August, late July, August period of time. And I do think that the Infiltrator piece is on a good trajectory. We’re — some of the questions about how to leverage and gross margins and stuff like that.
And this infiltrator sequential even year-over-year is gross profit performance is a really good example of operating well, where last fall, we took a lot of actions around drawing our materials down, working our headcount, we shut some machines down, all that kind of stuff. And we underabsorbed, for sure for two or three months. But as we’ve come back, we’ve been able to take advantage of some really good material buys because we have low inventory and it flowed through fast. We leveraged our costs very nicely there, did an excellent job of doing what they needed to do and they’re coming out of it great. And oh, by the way, we did that in the midst of a management change with Roy retiring and Craig taking over. So lots of good continuity there.
And I know we’ve gotten those questions in the past about Roy retiring and that great management team we have at Infiltrator. And I think this is just a great example of how they have stayed the course and kind of worked their way through it. So we’re really pleased and proud of how they’re operating right now.
Joe Ahlersmeyer: Really appreciate all the details there. Am I — to interpret that phasing relative to the destock last year, as you probably think sales dollars for Infiltrator are up year-over-year in fiscal 2Q? And then…
