Kelly Hibbs: Yes. And so I guess, as we alluded to in our speaking points, certainly seasonally, third to fourth quarter here, we expect to see some compression as our sales come down and we are not able to leverage those fixed costs. So, we will have some deleveraging there. But we feel really good about what BMD has been able to do and what has been a quite volatile last couple of years in terms of their margin profile. And we are executing upon what we said our strategy is, which is to make that product mix richer to have a higher margin profile and that would include things like the BROSCO acquisition.
Susan Maklari: Okay. And let me squeeze one more in, which is you mentioned the ongoing investments in a lot of your strategic initiatives, the door shops and Kansas City, Denver, the acquisition in Florida that you closed. Just any update on how those are progressing? And any further details there?
Kelly Hibbs: Yes. So, we have a pretty good amount of spending ahead of us in the balance of this year and then we expect to have, again, a pretty sizable capital plan in 2024, but we’re still working a number of things. So, we won’t speak to 2024 in any detail at this point. But yes, in BMD, for example, in the fourth quarter, we did announce that we got the West Palm Beach. We bought a new distribution center there, which expands our presence in that market, which is great. We continue to build out the Denver door shop. It’s not quite up and running yet, but it will be here soon. We’re close on completing the Marion, Ohio relocation that we started a year or two ago. And then we’re forever chasing rolling stock that we hope to get landed here in the fourth quarter.
In terms of the other – a couple of other big projects in BMD those being Hondo, Texas and Walterboro, South Carolina, those were greenfields. We bought bare pieces of ground and it takes a fair bit of time to get those sites prepared. So, we still have a fair bit of spending ahead of us on those. And those will be a while yet to come up. In terms of wood products, again, a fairly hefty spend here in the balance of this year, and that’s not uncommon, right? When we have some seasonally slower periods some holiday periods. We take advantage of those times to complete some capital projects, and we expect to do that again this fourth quarter. And I would say that’s pretty normal course stuff in terms of like some random stackers in the West for veneer.
Chapman, PLV line, which is great, again, that’s part of our capacity expansion in terms of being able to capture that veneer and put it in EWP. We’ve got a little bit of spending on a relatively small mass timber project in White City, Oregon and then just some – a lot of – a fair bit of maintenance to do here in the fourth quarter. So I’ll stop there, Sue.
Susan Maklari: Okay. Thank you for all that color. It was helpful. I will turn it over now. And good luck with everything.
Kelly Hibbs: Thank you.
Nate Jorgensen: Thanks Sue.
Operator: Thank you. And one moment please for our next question. The next question will come from Kurt Yinger of D.A. Davidson. Your line is open.
Kurt Yinger: All right. Thanks, and good morning, everyone.
Nate Jorgensen: Good morning Kurt.
Kelly Hibbs: Good morning.
Kurt Yinger: I just wanted to follow-up on Susan’s question on BMD margins. I mean commodity prices have largely normalized, EWP prices come off a decent amount, volumes moderated a bit, but segment EBITDA margin still nicely above 6%. I guess as you look to 2024, absent the potential for a softer demand environment and maybe some fixed cost deleveraging, is there anything that you see today as kind of a material risk to that margin profile?
Kelly Hibbs: Yes, I mean I think you hit on the material risks, Kurt, in your comments around volumes and demands that could flow through there. And then there is always price risk across commodities, across general line and we are seeing some modest price risk here in EWP. So, I guess, Nate has an additional comment here.
