Ketan Mamtora: Thank you. Quick question on €“ follow-up your Coastal acquisition, can you talk about some of the key attributes or sort of drivers behind sort of expanding in the waterproofing business in terms of kind of relative attractiveness? Whether it’s in terms of end market or kind of margin stability, anything of that kind would be helpful?
Julian Francis: Sure. I would be happy to touch on that. Well, first of all, we have had a specialty waterproofing business out west. We have three acquisitions that we did in the sort of the mid-teens Atlas, and ProCoat out West. It was 13 branches. And as we rebalanced our portfolio a couple of years ago, when we looked at that, we always felt waterproofing was a category that we run to remain in. It has close ties to the roofing contractor, a lot of roofing contractors do the work. And so it’s always been a part of our complementary and it’s always been this sort of focus on more commercial than residential in terms of that marketplace. So, there is a really strong correlation in that business around the roofing and the replacement market.
Given the trends in both climate and what we saw, particularly in Florida with the collapse of the say condominium, obviously, that was a tragic one. That was related to the waterproofing and the maintenance of the waterproofing on that structure, which caused it to deteriorate and obviously collapse. We were familiar with what was going on. And it’s really been something that we have been looking to add to in a meaningful way, and the opportunity with Coastal presented itself as a great one. From an overall business and margin profile, as Frank said, they are more commercial than residential. So, that’s really important. The one thing that I would say about this probably more so than roofing in general is this is a highly technical sale. This is highly specified, as it is with commercial roofing.
But there is a tremendous amount of technical capabilities that you need to be in this space, and we have known that from what we have owned. But the Coastal team, as we said again in our prepared remarks, we believe that they have been the recognized leader in this space in terms of technical capabilities. And we think that the technical capabilities you bring creates both barriers to entry and also a great margin profile. So, overall, we think it’s great. We expect to see new regulations, and obviously, this positions us now as the clear leader in specialty, waterproofing, distribution, and we believe that, that’s a tremendous benefit for Beacon as a whole and complementing both our roofing business as well as expanding our waterproofing business.
We are very excited about this. And I also want to emphasize the leadership team. They are going to be a tremendous asset to us leading this new division.
Operator: Thank you. Our next question comes from the line of Garik Shmois with Loop Capital. Your line is now open.
Garik Shmois: Hi. Thanks. Congrats on the quarter. As you expect to draw down inventory here in the fourth quarter, do you expect to be largely complete by the end of the year? And then as you are engaging in that process, are you seeing any changes on the pricing side either from the suppliers or from the customers?
