Unidentified Analyst: Yes, fair. I’ll leave it there and pass it on.
Scott Barbour: All right.
Operator: And your next question comes from the line of Matthew Bouley with Barclays. Your line is open.
Matthew Bouley: Hey, good morning, everyone. Thank you for taking the questions. So maybe picking up on where Scott C. left off at the end of the prepared remarks around the margins in the second half, I think you’re guiding to something like 25% EBITDA margins in the second half after you did 34% in the first half. So obviously, that’s a bit of a larger first half to second half margin decline than is normal for ADS. So I think you mentioned there might be some accelerating investments that you’re looking at, perhaps building in some conservatism. Maybe you can just kind of touch on the bridge there and sort of what would lead to that larger-than-normal decline into the second half? Thank you.
Scott Cottrill: Yes, Matt, it’s Scott here. You nailed two of the biggest ones, right. It’s being prudent with our end market guidance, given kind of what we see out there. I think on the gross margin side of the house, you’ll kind of see relatively flat performance as you look at the guide, to what we’re used to seeing in that 1H, 2H degradation, the SG&A piece of this that talks to the investments we’re making in engineering, customer service, order execution, we are taking advantage of a better-than-expected year to pull some of those investments forward. So those will come through SG&A. So you will see some of that headwind on a margin deterioration. You are absolutely correct. That 1H, 2H degradation is greater than what we normally historically experience and those are the three key drivers of that.
Matthew Bouley: Got it. Okay. That’s perfect. Thank you for that. And secondly, price/cost, obviously, was positive again in the quarter, wanted to pick up on some of your comments that you said a few times that price is performing in line with expectations. So just kind of wanted to unpack a little – that a little bit. What were those expectations? How is price performing within that price/cost bucket? And are you finding opportunities to perhaps utilize price adjustments in any regions to perhaps win conversion to your products? Thank you.
Scott Cottrill: Yes. I mean, it’s a local game, as we keep talking that and as you know. So the team has done a great job. We talked about holding onto the majority, vast majority of the pricing that we’ve gotten into the market over the last couple of years. Lot of drivers for why ADS is able to do that but what we’re seeing is absolutely a realization of what we talked about. We never talked about holding onto all of it, obviously, need to be aware of competitive environments, geographical issues, all of those items come into play. But we talked about holding onto the vast majority. We are holding onto the vast majority. That will continue. And obviously, we’ve got the nice – resin being lower on a year-over-year basis, which is, as you saw in our EBITDA bridge that we provided, it gives us a nice little acceleration of our performance, both on the margin as well as the EBITDA growth.
Matthew Bouley: Great, all right, guys. Good luck.
Scott Cottrill: Thanks Matt.
Operator: And your next question comes from the line of Garik Shmois with Loop Capital. Your line is open.
Garik Shmois: Hi, thanks for taking our question. Just higher level, just wondering on the non-res side, how bidding on projects and how your backlog was tracking over the course of the quarter.
Mike Higgins: Yes. So I had a little bit of a hard time hearing you there, Garik but I think you talked about kind of backlog and project activity in the nonresidential end markets. I would say, steady, right. It’s a challenging non-residential end market. There’s pockets of different types of projects but we’ve seen pretty good activity on but I would say kind of the backlog is steady. Order activity through the quarter was good. We didn’t see it deteriorate further. But with that said, we still have another six months of the year that’s left. And I think everybody is well aware of the challenges that exist around non-residential with higher interest rates, tightening credit standards and dug in, just general concern about kind of strength of the economy moving forward.
