Eric Crown: I guess just one on my end, really. Could you provide just — I’d love to hear some commentary around the quality of the backlog in its current state during a potential economic slowdown. I guess just to expand on that front. Given the current customer and project mix that you guys have, should we think about the probability of canceled orders or slowdown any differently than kind of the historical cadence for the company during the downturn that…
Bill George: So here’s the thing. At any given time, between 80% and 90% of our backlog is work that’s already in progress. So it’s the cost — we don’t put something in the backlog until after we have a price and a scope and a commitment. And that almost always happens after the building has already started because somebody — so we have had very, very few cancellations over the last 25 years. Until COVID, we had only had 1 cancellation over $20 million, something that went into our backlog and came out. During COVID, we had $60 million or $70 million that we took out of backlog because they were put — in the middle of work, some stuff was put on hold with no recommencement date. All of that work has come back and been finished.
So our definition of backlog is so strict that we rarely, rarely — people just don’t build — have build a building in stock, very much in the U.S. Most places, it’s illegal to do that. So our backlog is very firmly committed historically. And is it possible that something? Yes, the thing that really when you’re exposed to certain clients, it’s possible they say stop stuff for a period of time. If anybody says stops stuff, if they don’t have a recommenced date, we take it out of backlog because we have a super strict definition of backlog we just always have. But [indiscernible] the quality of our backlog has never been better. It’s a astoundingly good. It’s really good. It’s worked — yes, it’s astoundingly good. It’s never been better.
Eric Crown: That’s extremely helpful. And yes, I guess that makes a lot of sense. It’s less of a concern of cancellations or postponements or anything more just a slowdown things being brought into the backlog? And I guess from that aspect, are there any kind of customer types that you flag maybe on the top of the list, if there was a slowdown, maybe work from their end would slow down a little bit as well.
Bill George: So commercial would 100% be the one that you would worry about right now, especially office building. We only — less than 20% of our revenue right now is commercial and it’s almost all service. So we just happened not to play in that market. And the markets that are important for us I think I would say in the backlog, there’s no real discernible risk. In the pipeline stuff that we consider very high potential, what could happen is people can figure out AI is not real or the chip stuff could be get bogged down in, I don’t know, they’d be sort of — or by the way, the biggest risk — if you look back in the last 20 years, the 2 times we hit a big delay, a big air pocket would have been 9/11, and I guess that’s more than 20 years ago and then the financial crisis when the financial crisis first hit, there were some serious delays on jobs. Although even then we were profitable right through it.
Eric Crown: Congrats on a great quarter.
Operator: I’m showing no further questions at this time. I’d like to turn the call back over to Brian Lane, CEO, for any closing remarks.
Brian Lane: Okay. Thanks, everyone, for your interest in Comfort Systems. I really want to once again thank our amazing employees, fantastic, fantastic job. I hope everyone has a wonderful upcoming holiday season. Stay safe. We look forward to seeing everyone and have a great weekend. Thank you.
Bill George: Thanks.
Operator: Thank you. Ladies and gentlemen, this does conclude today’s conference. Thank you all participating. You may now disconnect. Have a great day.
