Nigel Coe: That’s great. Thanks, Mark. And then my follow-up question is really, could we just size the Dana Kepner acquisition? I think 19 branches, I think that’s your largest acquisition as a public company. So if you just size that. And then on your EBITDA margin, the 80 basis points of midpoint down year-to-year, any of that would be attributed to M&A dilution?
Mark Witkowski: Okay, sure, Nigel. First on Dana Kepner, I’d say roughly those 19 branches, kind of that average branch size, ends up being around a $300 million top line for the full year. It’ll end up being slightly accretive for us, I would say, at the bottom line. So no real, I’d say M&A dilution in the EBITDA figures for 2024. I would think of M&A as neutral to slightly accretive.
Operator: Our next question comes from David Manthey from Baird.
David Manthey: My first question, and maybe I’m reading this wrong, but in your remarks, it sounded a bit like you’re downplaying IIJA. And it’s fine, I guess, relative to guidance, if those dollars are incremental. But I’m wondering if we could just check your head here and make sure you’re as optimistic today as you were a year ago, or has something changed?
Steve LeClair: Hey, Dave, this is Steve. So yes, we really didn’t put much into this year for that. We do view this as upside if it should start really rolling through. But as you’ve heard from us in the last several quarterly calls, we’re seeing signs of this, but we’re not seeing anything material really starting to move through. Seeing some great opportunities that are, really being sketched out right now for treatment plan operations in Arizona, out in Florida, and a couple other areas. But it’ll be a bit before those things actually result in orders and deliveries. So some work to do there. We’re continuing to push that, doing everything we can to make sure our municipalities are aware of the available funding and their state revolving funds. And we’ll see kind of how that moves throughout the year, but not a whole lot put into the guide for ’24.
David Manthey: Okay. And second, excluding the benefits that you’ve gotten via acquisition, how satisfied are you currently with the progress you’re making towards your margin goals?
Mark Witkowski: Yes, Dave, I would say we’re very satisfied, as it relates to our margin initiatives, especially on the gross margin side, really made a lot of, I’d say, critical investments into private label. During 2023, we added, as you heard, a lot of distribution space, along with a lot of SKUs. And I think we’re going to see some acceleration there in private label as we work through 2024. Still scratching the surface on some of the pricing analytics but expect some really good movement there. And then, really had some nice benefits come through in ’23 on some sourcing work the teams have been doing. So really pleased there. I’d say the area that we’re watching closely is the SG&A side. We have seen some cost inflation come through, in particular, with a lot of our facilities and fleets that we lease, that’s been under, I’d say, some more cost pressure.
And then, we’ve continued to make investments in technology to make this business more modern and more efficient as we go forward. And then, you heard we made some investments in some green fields this year and some other investments for growth. So, obviously need those to pay off. That’s part of our guide here as we go into ’24 and achieving and getting, I’d say, back to our consistent track record of delivering on above market growth. I believe we’ve made the right investments there, but, obviously need that to pay off here in 2024.
Operator: The next question comes from Mike Dahl from RBC Capital Markets.
Mike Dahl: To piggyback off of some of the margin questions, can you give us a sense in terms of the cadence, how you’re thinking about both gross margin and SG&A, kind of the start of the year in the first half versus the second half? And I guess just as a point of clarification, I think you alluded to some of the M&A as still being gross margin accretive. So, just in totality, since you now have a couple of big acquisitions rolling through for the full year guide, does it assume that the M&A contributions are coming in at or above company average gross margin? Thanks.
Mark Witkowski: Yes. Thanks, Mike. I would say on the gross margin side related to acquisitions, I’d say just slightly accretive there. I wouldn’t expect really much in terms of significant benefit coming through there to offset any of that normalization. In terms of the cadence, I would say most of that we expect to show up in the first quarter. First quarter I’d say, our toughest comp. That was our best quarter as you look back to 2023. And really, I would say that 30 to 50 coming off the fourth quarter number on gross margin, I would look to that to be pretty steady throughout the year. But that first quarter comp will obviously show the toughest pressure from a year-over-year perspective.
Mike Dahl: Okay, got it. And then back on the S&GA dynamic, Mark, your comments. I think that’s ultimately going to be an important lever for you guys. The guide seems to imply kind of flattish to maybe a little slight de-leveraging again, despite, what should be a pretty strong top line, both organically and inorganically. So, specific to 2024, can you talk about, the levels of inflation that you’re seeing or maybe parse out some of those other investments in terms of quantification to help us understand kind of, okay, what’s it going to take in terms of rate of growth or timing to get back to a position where you’re better leveraging SG&A?
