So they try to match their supply with the demand and not have overcapacity because it costs them, and their margins are fairly tight. But we are seeing the suppliers ramp up production. It’s been about 12 months coming, they started working on it early on. So we’re seeing that some of that production come into Q, which is going to speed things up. The other thing that has helped tremendously is, we have been a consistent buyer of that pipe from our wholesalers. And so those relationships really make a difference when there’s been a kind of a scramble and everyone out there trying to buy stuff that we’ve gotten bumped up to the top of the list because of our relationships and our consistency of ordering goods and services from certain vendors.
So I think we’ve peaked, I think it’s starting to get better. We have seen a pretty big increase in some of the costs. We’ve seen increases in our year-over-year inventory balances as well. So as we found excess supply available, the team would grab it and we would go store it. So, I think it’s easy to talk about on earnings call, but the reality is that the procurement team and the engineering team really did a fantastic job. And if you go back and listen to our earnings calls through last year, we will softly say, it’s a tough year for capital. It’s a tough year for capital. It’s a tough year for capital. And clearly, it was but in the fourth quarter, we had a record fourth quarter, which resulted in a record year, the team has done a fantastic job.
We are seeing price increases, obviously, with all the inflationary pressures as well, but I think we’re managing through it. And I hope we’re through the worst of it. The indications I’ve seen so far is that it’s starting to get a little bit better now. So barring any other major disruptive global events, I think we’ll be on the downside of the problem. And hopefully, things will start leveling off.
Davis Sunderland: Thank you. That is helpful. And my follow-up question would just be about the business development project pipeline, obviously very exciting to hear about New Mexico and just wanted to ask if there’s anything in particular that — to the extent that you can share, of course that you are looking into or weighing options as far as water versus wastewater, or certain geographies that are more attractive. Any details that would be great. Thank you very much.
Marty Kropelnicki: Sure. Very good question, obviously. Well, we back up. So at 50,000 feet, we’ve closed deals in in all five states, including Texas. So I think that the market continues to be decent. The pipeline continues to be full, sellers’ expectations and buyers’ expectations, that’s always for the challenge is going to be. We’re doing deals on both sides, water and wastewater. We’ve had very good growth in Texas. We’ve obviously in the state of California, and in the state of Washington, it’s been more kind of water systems in Hawaii. And Texas has been more wastewater systems. So we’re growing on both sides of it. And it just depends on where the market is and where the growth is happening. As I mentioned to Jonathan’s question, we’re very kind of valued focused on a system, we’re not interested in buying a system and overpaying for it, and then not having the ability to invest more capital into that system.
And that is a lose, lose situation for stockholders and for our company. So we like to buy it on a value basis where we got room to invest, make capital improvements, bring somebody up to our operating standards, and then, the selling shareholder of the entity, it’s their buy out, we get the asset at a fair price, not an inflated price, but a fair place. And then, our stockholder gets the ability to invest capital in that system, which allows us to start generating a greater return. So I’m still kind of bullish on the PD side, obviously, inflation is going to be a factor and what happens with the economy in 2023. But the PD team has been hot, and it’s been hot in all five states. And I don’t see our momentum slowing down. And having said that, these aren’t really big deals either, but obviously, they’re big deals to the subsidiary companies, because they’re growing exponentially with these deals.
