Becky Weyenberg: I’ll take that one, Larry. Good morning. Inventory, the makeup of really the increase this quarter was largely in finished goods, which is up $25 million, and WIP which is up $21 million. So it’s really that conversion. And we have the one site that carries the lion’s share of the inventory, and that’s the one that’s going through all the transformation work. So their ability to bleed that down will come next year for sure. And we might see some of that in Q4, but that’s going to be the meaningful one. And when it drops, it should drop fairly significantly. And they’ve got high backlog, and they’ve been working through a lot of change. So that’s really, I would say, the lion’s share, pipes have turns improvement, because we’ve got to keep in mind that inventory also has that incremental pricing from our supplier so the normal value will remain higher which we’re pricing for and certainly our confident in our ability to price for inflation so.
Steve Anderson: Yes, Larry also Jaco mentioned about a couple of deals that just didn’t get through on the reporting line and that those were certainly an inventory at quarter end but that’ll get relieved as those shipments are delivered on a couple of the bigger plants.
Jaco Merwe: Now this is just to make a comment on the finished goods that Becky mentioned. We’ve had some cancellations but very little to mention actually, Larry, so that’s not the risk most of that inventory is carryover is part of the carryover so we’ll see that change. If you look at the year-over-year, the cost of that inventory you can work on about 6% or so that is just pure inflation year-over-year and so when you calculate that and the change is not that significant. And we mentioned last quarter that supplier lead times is still elevated so that’s still the case even though we have less supplier issues lead times are still high. And I got confirmation just yesterday from our teams that we are continuously updating our supplier lead times and so as lead times come down inventory will be a reflection of that.
So, yes, we have some work to do there for sure obviously it’s costing us in terms of interest so we are really focused on driving that over the next couple of quarters.
Larry Maria: Okay. If I could just sneak more in here. Thank you for that color. Look, we had a quarter with lower expect margin, even solving for the litigation, higher inventory and you have one factory going through a transformation. I believe this would be a little concerned on the ERP implementation. So can you maybe discuss that a little bit more, maybe the impact of ERP outside of expectations in the quarter and how that ultimately is going? Because obviously there’d be some concern that’s having some impact. Thank you.
Becky Weyenberg: Yes, Larry, great question. I think it’s important to separate two things going on at this one site. So there’s two different transformation efforts going on. They have the Oracle implementation, which happened in May. But for the last two years, all of last year and all of this year, there’s been $25 million of capital improvements that are going on. And when you have a tight floor footprint, it’s like a quilt, right? You pick out a patch and you move it and then you move it to equipment and you keep playing musical chairs until everything comes in. So it’s that same facility, so it’s not just one effort that’s going on, if you will. So they will be turning the corner here and as Jaco mentioned, they’re just about through the last investment is happening right now and we’ll turn on a state-of-the-art ERP system in Q1.
And then the capital investment there is really complete and their Oracle system is in and they’re perfecting that. We’re seeing some operational improvements from both those already, but it’s going to be meaningful more so next year.
Larry Maria: Okay, thanks. So aside from that facility then there’s nothing outside the ordinary and what’s specific to the ERP system broadly at Astec this quarter?
Jaco Merwe: I mean, right now we’re in the middle of designing the ETO module for the future sites and the teams are getting ready for the 2024 launches. We have a significant number of our infrastructure solution sites that will go live next year. And we are continuously monitoring the cost. And right now we’re still in the ranges of what we reported before. And if we see anything change on that, we’ll obviously inform the market about that.
Becky Weyenberg: Yes, but to be very specific, no impacts in Q3 or Q4 to performance expected from ERP.
Operator: There are no further questions in the queue. I’d like to hand the call back to Steve Anderson for closing remarks.
Steve Anderson: All right, thank you Dennis. We appreciate your participation on the conference call this morning and thank you for your interest in Astec. As today’s news release indicates, today’s conference call has been recorded. A replay of this conference call will be available through November 15, 2023. And an archive webcast will be available for 90 days. The transcript will be available under the Investors to Relations section of the Astec Industries website within the next seven days. All of that information is contained in the news release distributed earlier this morning. This concludes our call, but I’m happy to connect with you if you have any additional questions. So thank you all and have a good day.
Operator: Ladies and gentlemen, this does conclude today’s teleconference. Thank you for your participation. You may disconnect your lines at this time. And have a wonderful day.
