And so that will then drive the investment thesis for the operation being located there. The other thing we look at is we have a very strong private label set of brands with respect to EWP and Millwork. For example, we also have a well-oiled machine around structural products, commodity panels and commodity lever that we believe it gives us the ability to greenfield an operation very quickly between both private label and the structural side of the business. So once you find the warehouse and enough outdoor storage and then we can we have the balance sheet to invest in fleet, which basically means we’re able to reduce our cost to serve by going with our own fleet operations as opposed to third-party freight then that also reduces the payback period increases the returns.
And then, of course, it’s the people right taking advantage of our expertise our centers of operational excellence. Obviously, the ERP platform we have in place and the digital excellence initiatives as well as our inventory manage, our procurement and pricing and then partnering with key vendors. In fact, I’ve had conversations with vendors that have made it very clear they want to partner with us in a collaborative way to grow those markets, and they view it as a mutual investment. So the opportunities are great. It’s just a matter of us finding those. And again, we have a list of markets. It’s just a matter of making sure that all those boxes are checked as it relates to the site and the our ability to get into a site and then move forward with the operations and of course, hiring the general manager and the other talent that goes along with it Got it.
Kurt Yinger: And just one quick follow-up on that. I mean would you consider opening up a greenfield and leading West now some of those private label products like EWP and structural with an eye towards eventually having a more complete pipe yesterday vendor list and pipeline of or would you feel like you need to have that established at the outset?
Shyam Reddy: You know that? Well, first of all, we can we can absolutely lead with our private label in structural product lines for sure. And that’s what gives us I think the ability to — to move forward with greenfields maybe more so than others I and two-step distribution because we’ve already got our own product mix that we have complete control over. At the same time however, like yes we have had conversations with vendors that provide other lines of specialty products that have expressed a very strong interest in helping us grow those markets. And then of course even in those markets where vendors might have to have a presence or have partnerships in place like I said with respect to the relationships with home centers and in the multifamily area where we’re growing there are opportunities for us to sell product lines in those in those areas irrespective of what may already exist in those markets.
So there are a number of different ways for us to go to market in any greenfield look in any given greenfield locations. But what what’s great though is the fact that we can hit the ground running immediately with our existing product lines and then leverage our vendor relationships to grow into new was fairly quickly. The proof will be in the pudding right we have to start it after we start I can give you more clarity on and what that glide path looks like.
Kurt Yinger: Got it. Makes sense. Appreciate all the guys and good luck to your Q2. Thank you.
Shyam Reddy: Thanks, Kurt.
Operator: Your last question come from the line of Reuben Garner from Benchmark. Please go ahead.
Reuben Garner: Thank you. Good morning, everyone.
Andy Wamser: Good morning, Reuben.
Shyam Reddy: Hey, Reuben.
Reuben Garner: Maybe we’ll see — we’ll start inventory in the channel. Have you noticed any changes in customer behavior in recent weeks whether it’s on the specialty or the structural side and how much inventory and they’re carrying. And I guess the interesting question is, is it possible that in this rising rate environment there’s even more of a reliance on SAN? You guys and what you bring as are as you seeing customers maybe get defensive?
Shyam Reddy: Yes. So I would I would say from my conversations with recently with our folks in the field, we’re sort of seeing our customers expressing steady-state business. So nothing — nothing out of the ordinary. Everything we’re seeing. It kind of fits with our seasonal buys and the increase in volumes that you would typically see heading into the summer season and the late spring summer season. And of course, the sequential improvement Q1 over Q4 due to inventory builds et cetera. So we feel like what we would expect is actually flowing through the P&L as it relates to on the second part of your question I absolutely believe in the value of two-step distribution in the building products value chain and your point and you know again supports that value proposition as it relates to just-in-time data working capital management all of which is more valuable during times of uncertainty and our business our value proposition supports that on the part of our customers.
So we’re being very smart with our buys and at the same time matching those up with our customer needs and being able to give them their fill-in business there just in time they may have to the extent they were ordering and may have ordered more before and they’d rather just order less from us and pay a little bit more to do that in order to protect their own balance sheets and manage our working capital more effectively. That’s where that’s where we can come in and help in addition to the value add services as well. So I know that I feel good about that carrying through the remainder of the year for sure.
Reuben Garner: Got it. And then on the Specialty gross margin front even if I strip out the $7 million you’re still another quarter above kind of 19% level. And I know you said you started off the next quarter and the 18% to 19% range. Is there any reason I mean the last four quarters and you’ve kind of been in the 19% to 20% range. Is there any reason why that would change in this environment over the course of the rest of the year? Or is there mix dynamics that that could change and work against you or for you just help us with that kind of run rate?
