Collin Verron: Great quarter and thanks for taking my questions. I just wanted to start with the guide. Backing to some numbers back into a 100 basis point increase in the EBITDA margin from your previous guide. Can you just give us some more detail around what’s driving the increase in the margin guide? Is it all operational improvements? Or are you seeing the — or is it going to be lower raw material costs? Just looking for some more color on the drivers of that.
Scott Culbreth: Yes, I’d really take it back to Paul’s comment a moment ago. Certainly, the impact of our first quarter being better than what we had modeled and assumed when we gave that outlook a year ago would be a contributor and as he mentioned, pricing was a key piece of that as well as how we run in the factories. As we go forward, we expect to continue to run our factories well. So we think we’ve got some upside for that, and we’ve got that factored in to the overall equation. We do expect softer demand as a bit of an offset as we go forward. But when we take all of those considerations together, we’re confident with the increase that we’ve put out there for our range.
Collin Verron: Okay, that’s helpful. And then in terms of the margin performance through the rest of the year, any help in thinking about that as the shape of the year? And where you see EBITDA margins bottoming?
Scott Culbreth: So I don’t want to get into a quarterly outlook view on really, quite frankly, sales or EBITDA. That’s how we give the full-year view. The only thing I will comment on specifically is just recall that Q2 a year ago, was by far and away our strongest sales comp in the prior year. Why was that? We made considerable headway in reducing our backlog a year ago. So just as a reminder, that would be a bit of a tailwind as we think about this upcoming quarter fiscal year ’24.
Collin Verron: Great. That’s helpful color. And then just the last one here for me. You talked about some destocking at the home centers. Can you just talk about how much of a headwind that was for you guys in the quarter? And where you guys think that channel is from an inventory perspective after this quarter?
Scott Culbreth: I have a specific amount that I’ll call out for that, Collin, but we believe there’s an opportunity at both of our key accounts to see increases in in-store inventory levels to help both the bath, kitchen, quite frankly, even storage category. So our teams work hand in hand with our customers on driving that improvement in stock rates so that we can assure that we get our in-consumers product to be able to purchase.
Collin Verron: Great, thank you and good luck with the rest of the year.
Paul Joachimczyk: Okay, thank you.
Scott Culbreth: Thank you, Collin.
Operator: [Operator Instructions] Our next question comes from Tim Wojs with Baird. Please go ahead.
Tim Wojs: Hey, guys. Good afternoon, [Indiscernible]. Maybe just my first question, just on that one of your last answer to Scott, did you say, are these are the tailwind? Did you mean a headwind from inventory kind of your backlog kind of conversion in the prior year last year?
Scott Culbreth: So we had a — sorry, to clarify that comment, when you compare Q2 to prior year or specifically, prior year had the benefit of being able to chew through a pretty substantial amount of backlog. We will not have that this year. So there’s a tailwind last year that doesn’t repeat itself this year. Thus, it’s a headwind. Sorry for not being clear that first time.
Tim Wojs: No, yes. I just want to make sure I heard that Okay. Got that. And then I guess within your builder business, I mean, is there — are you seeing any differences in terms of kind of order activity or just kind of the confidence that your builders have based on — based on the size of the builder. Just trying to think — I know you do a lot of work with the larger kind of builders. But how would you kind of compare and contrast some of the larger builders to some of the smaller ones?
Scott Culbreth: Yes. All the statements you made are all accurate. So there’s a wide range. And it’s not only a factor of the builder specifically, Tim, but also the region. So we’ve seen some weakness out West as of late. That was sort of the last area of the country to start to rotate down. We expect that to come back. So it varies depending on the account, but I would say the larger builders are pretty bullish on their expectations now for the year as opposed to where they were three and six months ago.
Tim Wojs: Okay, okay. Good. And then would you think from a lead time perspective, or how we think about kind of lagging starts or kind of comparing to completion. I know with the supply chain that had kind of got out of the lag over the last couple of years. But would you kind of revert back to that kind of 90 to 100-day lag relative to starts now as we kind of think about the new construction market?
Scott Culbreth: I wouldn’t go all the way back to that historic norm. We certainly saw the increase and Paul would quote that moving up, I think, roughly 30 to 60 days. Over the past couple of years, we certainly hear about that coming down you even see some of the builders report on that specifically at that time to build has shrunk. But I don’t think we’re back to the historic norms yet. We get still pockets of labor challenges, again, market by market, that’s creating some difficulty on builders being able to get the homes to complete status. Then you get weather, things like out West and Southern California that also creates some disruptions in that cycle time.
Tim Wojs: Okay, okay, very good. Very good. Thanks for the time, guys. Good luck.
Scott Culbreth: Thank you, Tim.
Operator: [Operator Instructions] As I do not see that there is anyone else waiting to ask a question, I would like to turn the line over to Mr. Joachimczyk for any closing comments. Please go ahead, sir.
Paul Joachimczyk: Since there are no additional questions, this concludes our call. Thank you for taking [Technical Difficulty]
Operator: [Technical Difficulty] You may now disconnect.
