Keith Hughes: Thank you. A question on the fourth quarter is kind of the implied guide. There’s going to be a little bit of weakness in EBITDA at the midpoint. Can you talk about what’s going to be the makeup on the fourth quarter, how it’s going to trend?
Chris Calzaretta: Yes, Keith, I’ll take that. This is Chris. Yes, if you look – you can kind of see the implied fourth quarter volume, again that’s really driven by – relative to our previous expectations. It’s a little better market. But also, as Vic mentioned, some of that retail home center volume that we expected to come out earlier this year. We’ve got that pegged to come out in the fourth quarter, which is really contributing to that year-over-year volume decline in the fourth quarter. And then also, if you look at kind of how we’ve thought through and modeled some of the assumptions with SG&A. There’s a little bit of a heavier SG&A comp compared to the prior year due to some promotional spending that we have on some new product launches as well as higher incentive comp where we’re lapping a softer base period there due to some benefits that were taken in the prior year period.
So just a couple of points of input there as I think about the fourth quarter. The other piece maybe to mention is on the AS side, a little bit softer AS finish to the year due to anticipated project delays, which again can be choppy from time to time.
Keith Hughes: Okay. And then what about input costs in Mineral Fiber, I know it was a positive in this quarter. What are you thinking full for?
Chris Calzaretta: Yes. So better-than-expected freight and energy costs there, so some deflation there. Raws were about as expected. I’d say, looking forward, on a full year basis, we’re now out looking for total input costs about flattish, so maybe some slight inflation there versus prior year in percentage terms with raw materials in that high single-digit range.
Keith Hughes: Okay. Thank you.
Chris Calzaretta: You’re welcome. Thanks, Keith.
Vic Grizzle: Thanks, Keith.
Operator: Your next question comes from the line of Phil Ng from Jefferies. Your line is open.
Phil Ng: Hi Vic, congrats on a really strong quarter. And then the commentary on office was pretty constructive about at least you’re seeing some signs it’s starting to stabilize. You gave us some great color in terms of bidding, quoting activity on AS. Any color on what you’re seeing on those same KPIs for your Mineral Fiber business? Should we kind of assume that things are starting to stabilize and you can get back to trend line from a growth standpoint in 2024? Or there’s still some risk it could route [ph] base lower?
Vic Grizzle: Overall bidding activity was fairly consistent with what we saw in 2Q, still slightly down from a year ago. And then by vertical, again, kind of moving quarter-to-quarter in and out of positive negative territory. So not some big numbers one way or the other. I kind of look at those numbers as within the margins as directional. So renovation being still the drag on overall bidding activity with new construction being fairly positive. So, I don’t know, it just feels like, Phil, that even the bidding activity seems to be kind of bouncing along a new bottom here, if you will, that feels fairly sideways moving, if you will. So, I think that’s overall for the business. That’s kind of what I can see in the numbers.
Phil Ng: And Vic, can you remind us how big is your more discretionary rental piece in terms of overall volumes for Mineral Fiber?
Vic Grizzle: Well, rental is 70% of our business, 30% is in the new area. And then of that rental, you can – of that 70%, you can split it half and half as larger renovation projects versus more patch and match, if you will, type projects. There’s discretionary elements of both of those. So certainly, people who can wait as we talked about last year, are waiting, and I think we continue to see some of that. Although as time goes and some of the uncertainty clears up for certain parts of the market, such as healthcare and education we’re seeing some of those delayed projects come back into the marketplace. So it’s going to continue to ebb and flow, again, it feels like there’s some stabilization here in terms of the directional. It’s not getting better, it just – it didn’t get worse. I think again, I think that’s consistent within the overall bidding and quoting activity that we’re seeing.
Phil Ng: Okay. That makes perfect sense. And then, Vic, I appreciate the great color you guys provided on some of that home center dynamic. But I understand one of your competitors had operational issues on the mineral fiber set for a higher value product. Was that an opportunity for you to pick up some share during the quarter? And how do you kind of see that transpiring over the course of the year?
Vic Grizzle: Yes. We’re aware of the issue you’re talking about. And we did get calls. We were able to help some of their customers out in the short term. If it wasn’t material and it’s not material in terms of any share shifts go – share moves in this industry over time. So not material really in the quarter, nor do we expect this to be a continuing share move for the rest of the year.
Phil Ng: Okay. Appreciate the color. Thank you.
Vic Grizzle: Yes. You bet.
Operator: Your next question comes from the line of Rafe Jadrosich from Bank of America. Your line is open.
Rafe Jadrosich: Hi good morning. Thanks for taking my question. It’s Rafe. Can you just break out what the inventory revaluation impact was in the third quarter? And is there any impact anticipated for in the fourth quarter guidance?
Chris Calzaretta: Hey, Rafe, it’s Chris. Yes, yes, we don’t call out the inventory valve impact there in the quarter. But as I said in my prepared remarks, given the fact that input costs and material, raw materials have moderated a bit as compared to their previous levels. You see the benefit of that flowing through the P&L by way of what we call inventory valves. So we’ve picked up and recouped a bit of the headwind that we experienced earlier this year. There’s an assumed benefit in the fourth quarter. And we’re going to be pretty close just shy of the full year headwind that we saw in the first half kind of coming close to offsetting within the year. So hopefully, that adds a little bit of context. If raws moderate even further, that could potentially drive some additional tailwind there. But that’s the dynamic and how that works. It’s not a write-off of inventory. Again, it’s just the timing of inflation rolling through the income statement.
Rafe Jadrosich: Got it. And the first half was $6 million of impact of a headwind?
Chris Calzaretta: Yes, the first quarter was $6 million.
