Adam Thalhimer: Congrats on the great quarter. Can you talk about modular for a little bit longer because I’m curious the contract you signed in December, like are you shipping on that now? And then if so, what has been the early experience with margins and productivity? Because I think that was supposed to start with kind of low productivity and ramp up.
Bill George: Yes. So — just as you know, what was booked in a 10-day period in December was numerous purchase orders. So they range from $20 million to $40 million for individual units that were just all sent over in a batch to get us to help us feel comfortable signing those leases. Some of those have already — they’re already on track. Very small part of them are on track, but a ton of that is already being built up, so we’re working [2.5 shares]. And we’ve received some new orders. The going better than we could have hoped, right? Look at our numbers, right? So far, knock on wood, I don’t know.
Adam Thalhimer: Wait till some new orders versus the ones in December?
Bill George: Yes. So we’ve gotten more orders. Otherwise, you would have seen our backlog go up by even more, right, in the second quarter, and then it’s up in the third quarter, which shows that you couldn’t really — you couldn’t be getting 0 orders in modular and hope to have a sequential increase. And by the way, those come in lumpy. I mean, people should not worry about a sequential backlog change unless it’s — unless we’re telling you to worry about it. It’s — there’s going to be — if we didn’t have some quarters where we had sequentials down, we would spin out of control and go out of business. I mean people I know, love to see that. But right now, what we’re telling you is we’re turning away work. You’re going to see — I think you’re going to see in the overall construction market at some point in the next year or 2 that some — maybe a little less stuff is being built than a lot of people are projecting.
When that happens, it’s going to be because the capacity to build it isn’t there. It’s not going to be because suddenly people aren’t going to want AI or chips or our food or because the baby boomers stock getting older, it’s just there’s so — there’s such a capacity constraint that right now, the governors are the ability to do it. And obviously, that puts us in a pretty good place, right, because we represent a lot of productive capacity.
Adam Thalhimer: Okay. Perfect. And then Actually, just a couple of cash flow questions. I’m completely confused in this R&D tax credit. I had a negative in my model like for the next 5 quarters from that — from the exploration, like a negative cash, a pretty large one, actually. And should I still be baking that in?
Bill George: So here, I’m going to tell you, it got even crazier this quarter. So the IRS released an interpretation where they said, “Hey, we’ve got this stuff going on where you can’t recognize certain expenses.” Listen, I’m not — we’ll get you on the phone with our tax guy. But they came out and they said, but you don’t need to recognize the revenue related to those expenses this year, it’s a 1-year change on a 5-year problem. Suddenly, we didn’t need to make a tax payment in the third quarter. It’s really complicated. And we just need Congress to pass that extender. It’s going to put a lot of little companies out of business if they don’t, and we need things to go back to normal. But you’re absolutely — it’s a good catch.
