Chris Dankert: I guess, first off, in safety and infrastructure, in particular, volume was up nice, and obviously, the comp was a bit easier. But anything in particular you’d call out on the demand side kind of fueling that volume in S&I?
Bill Waltz: Yes. So whenever we reference a little bit about data centers and fab plants, a lot of that, when you start thinking about the metal framing, our wire basket products — even in a different part of their business, security was pretty strong this quarter. So pretty broadly speaking, they’ve had solid growth across all their product lines this quarter.
Chris Dankert: And then, maybe to follow up. Obviously, there’s a lot of different governmental actions going on right now. You’ve got the IRA, infrastructure jobs, RDOF, et cetera. I guess, first off, what impact is baked into that kind of mid single digit volume guide from those at? I know it’s hard to — break it hard that way, but if you can kind of give any sense for, is that more of a 2024 dynamic, I assume, for the majority of it, but any sense on is some of that showing up? What’s based in the guide? And any comments on just kind of that environment.
Bill Waltz: Yes. I think, Chris, I’ll just paraphrase back what we said. I think it will be more impactful in 2024, just because a lot of these things like the Inflation Reduction act with credits and so forth, just literally kicked in, in January. But there’s probably a little bit in there, but nothing major, but we are definitely knowing that these things are coming along, positioning ourselves, and that’s again where I say Atkore is a company to invest in and grow with as we go forward.
David Johnson : And like the fiber investments and all that dynamics, how these — I think the deadline is pretty soon and they can sign up for the money and see what their need is. So we’re still a little ways before that actually gets to action. So to this point, a little bit, but not the majority of our volume growth this year.
Chris Dankert: I guess if nothing else, it certainly gives you confidence at that 2025 target number on $18.
Operator: Our next question comes from Chris Moore with CJS Securities.
Chris Moore: Most of it is covered. I was hoping maybe you could just give some updated thoughts on the HDPE market opportunity. You talked about it a little bit, but obviously, lots of acquisitions there and a lot’s going on that front. Maybe just any updated thoughts you have there?
Bill Waltz: Yes, Chris, really excited for that market. Every facet of it, first, almost — the other Chris had just asked the question. I think the best is yet to come here with funding for and getting things ready for fiber optic and so forth. And without mentioning specific customers, we have a great general manager that was just talking to some of the largest electrical distributors in the nation yesterday. And while they’re optimistic for ’23, they’re even more optimistic for 2024, and we are well positioned, and we have a kick ass team that very much reminds me as a complement to Atkore, the PBC division of a decade ago where you take 5, 6 of the best run companies and you bring together those management teams. They get to compare now best practices, manufacturing, how we have a national footprint, how we can, therefore, work with national customers that a lot of other people can’t, just because they’re regional.
And this is why, almost back to the previous analyst questions, we have high comfort at this stage with our 2025, $18 plus EPS. So economy is going in the right direction, secular trends going in the right direction, and Atkore is getting well positioned. So long-winded answer and say we’re excited for HDPE.
Chris Moore: Last one for me, just kind of cash flow related. So cash flow from operations, I think just under $200 million for the quarter. Inventory was down a little bit, but $11.5 million. What are kind of your thoughts in terms of inventory levels for the balance of the year?
David Johnson : I mean, I think from a days standpoint, we’re kind of where we want to be, but you will see a little bit here — as we talked about in the back half of the year, we expect a lot more solar volume coming up with our new facilities. So we will have a little bit of an inventory build there. So when you look at it on, say, a day’s level, it’s going to be fairly level between now and end of the year, but that does mean a little bit of a dollar increase for the next, I’d say, quarter or two.
Operator: Our last question comes from Alex Rygiel with B. Riley.
Alex Rygiel: To follow up on that last question, can you comment on sort of the trend in solar demand in the near term as well as telecom conduit demand in the near term, appreciating the very positive long-term outlook?
Bill Waltz: Yes. Both short term and long term, really optimistic. It almost ties back to some of the other questions with what are we seeing. Again, some of the background that David talked about in our prepared remarks, is, solar credits are out there. They just started with Inflation Reduction Act. So I think it is something that — the people that make the solar arrays, the people that buy them for the solar farms are aware of, and that is a great stimulus, and well, I’ll kick on here on January 1. But we’re for Atkore well positioned. I think we’ve talked in previous conference calls where we actually — some intelligence, quite frankly, some done lot, but we had started up a whole facility dedicated to making the solar torque tubes, and that’s coming online for us here kind of in the beginning of Q3.
So another quarter out, but that will both help with organic growth, help with our EPS, and the demand is absolutely out there, both just people wanting to be green. And these tax credits are probably shipped on a lot of business that used to be made offshore to U.S. manufacturing. So good for the economy, good for the U.S., good for green and good for Atkore.
