Andy Kaplowitz: David, just to be clear…
David Johnson: Maybe not this quarter, but [perhaps] (ph) this next year or so.
Andy Kaplowitz: Got it. But just to be clear, David, you’re not calling for some sort of big inflection in PVC conduit volume, it’s more easy comps, or is there more of an inflection that you’re calling for when you get the changing growth here in ’24?
David Johnson: No, I think it is more just one. We don’t have the de-stocking year-over-year, and so we see some positive sequential lines there. I think you are starting to see continued investment in grid hardening, which I think is another positive. I mean, if we happen to have any slight increase in single-family housing or anything like that, that would be helpful, but we’re certainly not counting on that. And then, we do have some new products, which we think our customers will like, and so I think there’s a little bit of opportunity there.
Bill Waltz: Yeah. Andy, I’ll also take the same question from the like, positive to negative, but it’s a positive to go, the markets are there. In other words, the amount of construction backlog is within 0.2 months plus or minus as high as it’s ever been. Architectural Billings Index was slightly down, but the amount if you actually look into how many months of backlog does an architect have is still as strong as it’s ever been. So, all the volume is there, let alone when we started getting more of the infrastructure from the IRA and so forth, the IIJA, so it really becomes what are the limiting factors and it’s been labor. So, in some ways, one could argue a little bit softer labor market that we can get more people working construction will help.
And then, it’s other people’s products like switchgear and so forth. So, the more that they get — to David’s earlier point, get out of their backlog, the quicker our products will flow. And then as David mentioned, yeah, I’d say we do have easier comps because we don’t have the de-stock going on. So, we get the factory up, we get some of these projects moving ahead, we get our growth initiatives, we’re optimistic as we go forward, obviously.
Andy Kaplowitz: Great. And then I just wanted to focus on your guide for the ’24 of 25% to 26% EBITDA margin. It’s obviously up significantly as you’ve showed us from mid- to high-teens pre-pandemic. Maybe a little more color on sort of it seems like you’re saying, okay, that’s basically the trough. I want to sort of clarify that or at least that sort of new run rate going forward. And then, if I look at that chart that you have, you did say there’s a down arrow for — regarding potential future pricing normalization versus what you gave us last year around that bridge to $18-plus. So, is pricing normalization still you’re going to retain $400 million or did something change there?
David Johnson: That’s a very good question. Those arrows going from where we are to the $18 wasn’t necessarily vis-a-vis versus what we said last time. It’s more or less what we think the actual bridge will be. So, but with that, I mean, I think the only thing that that arrow recognizes is we did say $585 million in total. And if you midpoint our current guide plus last year’s actuals, it’d be around $500 million. So, we’re giving ourselves a little bit of an area saying there could be some continuation in that last year, FY ’25, to get that $85 million or so. Obviously, Andy, we’ll see as the year progresses.
Andy Kaplowitz: Got it. And then, I just want to ask you about conduits of growth in the context of, you mentioned the solar facility doubling. Are you past the sort of startup issues that you had there? And is it possible to size when you look at ’24 how much the conduits of growth are helping you sort of make your forecast on revenue or EBITDA?
Bill Waltz: Yeah. So, we’re still working through some of the startups, but we have that in our forecast for this quarter, and expect as we go into the next calendar year to be having these things behind us. By the way, we’re seeing — we get weekly — our leadership, our president and so forth, daily metrics, but David and I, weekly metrics. And we’re seeing the pickup and we’re seeing the, “Hey, here’s the next part being run and the turnover time and bringing on another shift of employees”. So, everything basically going as expected. We are probably just way too optimistic in, call it, July of the time it takes to start up a whole factory with a whole other workforce, but we’re on schedule for that now. And then for the conduits to growth, Andy, I’m going to wing something, but I know David wants to probably speak to it is the way I look at it is absolutely driving because we’re forecasting double-digit growth organic next year and pick whatever number, 2%, 3% for just what the markets on — naturally drive.
So that extra growth, whether it is solar torque tubes, whether it is new product development, whether it is the service centers and be able to drive that one order, one delivery, one invoice with comprehensive pricing of products, that’s what’s driving Atkore and our optimism in the future to grow more than the markets.
