Ryan Greenawalt: Matt, I’ll take that one. This one is Ryan. On the Material Handling side, we have a pretty diverse end market exposure, which has some reasonable pockets of concentration. In the Midwest, it’s heavier manufacturing. We just saw the conclusion of the UAW strike, which is good news. It didn’t – it really wasn’t much of an impact on the business. There were some plants in our territory that were affected, but we’re happy that everything looks like it’s moving along in terms of that labor dispute. And the market for autos, we think it will be stable next year. There’s been a lot of turmoil and just disruption with the move towards electromobility, but we’re seeing that generally our area of the country is benefiting from that as we see new plants coming online for batteries, old plants converted to new lines and new products.
So just speaking about manufacturing, we think it’s stable demand going into next year. On the warehousing and distribution side, a similar story. That business tends to follow the density of the market. So the population density tends to have the areas like New York City, Boston, Chicago, Detroit, all have heavy exposure to the warehousing and logistics markets. And the only thing that we’re seeing there is a little bit of a softening as it relates to the engineered solutions, the warehouse automation. We’re seeing projects, as we commented on last quarter, taking a little bit longer to get through the sales cycle. And this is an area we do think is somewhat more related to interest rates as it’s less discretionary. With our forklift fleets, they come up for renewal, and it’s a pretty formulaic renewal process that those are sticky accounts.
With the warehousing market, they’re more discretionary investments that are based on an ROI and we’re seeing interest rates potentially having an effect there. And then another major market for us on the Material Handling side is food and beverage, that seeing no slowdown there. And then in the Northeast, in particular, the chemical and medical type of end markets where those also appear very stable and poised for growth next year.
Matt Summerville: Thank you, guys.
Operator: Next question is from the line of Steve Hansen with Raymond James. Your line is now open.
Steve Hansen: Yes, guys. Thank for the time. Maybe a first one on the balance sheet. Just curious where you are in that inventory journey that you described with the supply chains loosening up? How much further do you feel like you have to go? And what do you think the optimized level will be achieved?
Tony Colucci: We feel like we’re right kind of in the strike zone, Steve. We try to target two turns on new and used equipment, maybe a little bit quicker than that, actually on used. And we feel like we’re kind of right in the strike zone of that KPI. You always want to try to do better. We’ll never get back to the levels where we’re turning our new equipment 3x and 4x and maybe even 5x a year as we did through the supply chain issues. But I wouldn’t expect that to moderate a whole lot or to reduce a whole lot more. I would expect us to kind of just settle and maybe bounce around kind of where we’re at the year today. I think Hyster-Yale has been pretty upfront with some of their issues. We still have a lot of backlog, as I mentioned on that side of the house, and so to the extent that they’re able to increase production and deliver, we actually may see a little bit of an increase from here.
But all told, I think we’re stabilized on the inventory level.
Steve Hansen: Okay. That’s helpful. Thanks, Tony. And you referenced a fairly attractive multiple in one of your recent purchases. I’d just be curious to know how you feel like seller expectations have been shifting, if at all, given some of the macro backdrop, high rate environment, etcetera? It sounds like there’s still accretive deals to be done, but has there been any major shifting – shift in that sort of seller expectation side?
Tony Colucci: No, Steve, there really hasn’t. And that goes – it’s not just this last quarter or this last year. I think I’ve been with the company 9 years and there’s – these companies will always trade in a certain range and that range is accretive to Alta. These are usually single-line dealerships that are in a specific territory not the platform that Alta is. Maybe have a specific end market that they’re concentrated in. And so the multiples are a little bit lighter than certainly where we would feel fair value would be at. But no, the answer to that is no. I think we still think that we can execute on $15 million of EBITDA a year at 4 to 5x. And sometimes, we can find deals that are better than that in this instance we did.
Steve Hansen: That’s great. And maybe just one last one, if I could sneak it in, is just around the buyback and how you feel the value of the stock today. I think you referenced it in some of your remarks earlier around the market cap and the valuation. But just how do you feel about that relative opportunity for capital allocation relative to the growth opportunities you might still have on your plate as well? Thanks.
Ryan Greenawalt: Yes. Steve, so we’ve always triangulated all the data points on the buyback, which would be our leverage and liquidity levels, the M&A pipeline and what the multiples are there, as I just referenced. And obviously, some of the strategic elements of the M&A pipeline. These business – some of these businesses that we’re buying come up once in a generation or two generations or three in the case of Burris Equipment. I think Burris was in the same family for something like 80 years. And so we try to weigh all of those. And as the stock slips, obviously, it becomes more attractive relative to potentially the M&A pipeline or using capital elsewhere. But we’re also mindful of where we’re at kind of in the leverage cycle here and maybe preserving liquidity.
