Tom Ferguson: Yeah. I think when it comes to residential construction isn’t a huge piece. I’m going to let David talk to the markets a little bit here in just a second. But — so for Precoat, the focus is obviously, it was disruptive to the Precoat leadership team going through this whole process and then coming on board with AZZ. And it’s been a great, I’ll call it a great onboarding process. So we’ve tried to make it as minimally impactful on them as possible, but it’s still disruptive to come into a new organization, new processes of a public company. I’d say we’re through the vast majority of that. We don’t anticipate any major systems, integrations or activities that can be disruptive as we go through at least the first part of next year.
So I anticipate — we don’t anticipate, I know the focus is going to be on continuing to drive value with the customers. I do think there’s opportunities to more quickly drive productivity and efficiency improvements. The team is really focused on that. And as some of these customer inventories are coming down, which they are. That’s starting to open up the ability to drive their traditional productivity and efficiencies in their plants. The plants that are underperforming there’s a plan there and the team is very, very focused on that. It just takes a while. These are highly automated plants, so it takes a little time to gain traction on that. But these are things that we’ve been focused on since we’ve — they’ve been in full. So I think what — but those market headwinds you mentioned, that is going to have — that is — those are true headwinds.
I think we’ll focus on continuing to grow share. And then we’ll see how the economy goes. But — so our focus is going to be more on let’s improve our profitability on the volumes that we have and drive the efficiencies, make sure that we maintain that stability. We do think there’s some synergies between on the sales side. And so we have really good effort going on there. But that will take — that takes two or three quarters to gain traction on. So as we get through the first quarter and into the second. I think we’ll start to see the benefits of those things. The hard synergies, we’ve generated some of those and — but the cost have offset it. So I’m pretty enthusiastic about both of our businesses, but both of them are going to be focused more on protecting their profitability, driving improvements.
And then, we’ll see where the volumes go. And David, if you want to talk about where you see construction things.
David Nark: Sure. Thanks, Tom. Yeah. Couple of things, Noelle, non-residential construction still remains pretty good, particularly on the Precoat side with metal intensive sectors like warehousing and manufacturing faring pretty well. We do have a specification of pre-painted insulated metal panels and things like data centers and cold storage construction, which continues to be a positive trend for them. When you take a look at the residential construction, as you know, single-family housing starts have struggled in the broader market, but multi-family remains quite strong. We do have the use of prepayment metal roofing, continuing to gain traction in multiple markets within residential. So we think that’s going to be a positive for us going forward.
Appliance and HVAC shipments have eased quite a bit from the solid pace experienced earlier in the year. And again, that related to general market and economic slowdown in the U.S. But the container market, which we’ve talked about on previous calls, particularly the beverage can shipments have benefited from favorable secular growth trends and the switch to aluminum for recyclability and consumer packaging preferences. So those are some of the highlights on the Precoat side specific to your question.
Noelle Dilts: Okay. Great. That’s really helpful. And then I know you’re not including the JV income in the fourth quarter. Would you anticipate that you would start to include that in guidance as you look at next year or is that still sort of a TBD item? Thanks.
Tom Ferguson: We did have our first Board meeting yesterday, and we like the leadership team. So they’re very disciplined and focused. They’re getting through the usual purchase price accounting things to go from being part of AZZ to being a private company. I think I’d like to give them a little bit of time, call it, a quarter. So I don’t think we’re going to be able to give guidance on what that equity income is going to look like as we issue our guidance. I do think as we get into next year, I think we’re going to be able to start providing some general guidance on what that equity income is going to look like for the balance of next year. But I think we’ve got to let them get through another — at least another quarter of their operations and how they’re managing the business and what their focus is.
So my intent is not to have it in this guidance that we give towards the end of January. But that hopefully, we can start to provide better context as we hopefully, by the time we do our full year earnings call.
Noelle Dilts: Okay. Very good. Thank you.
Operator: Our next question comes from John Braatz with Kansas City Capital. Please go ahead.
John Braatz: Good morning, everyone.
