Mark Witkowski: Yes, thanks, Mike. In terms of, what it’s going to take, I will say, most of our growth in 2024 is either tied to volume and big part of that being above-market growth in the M&A. I’d say the M&A has had a little higher SG&A base to it. And obviously, this is a heavy resource and personnel business. So, when we’re growing volume, it does take a little tougher time to leverage that, especially when we’re seeing some of the cost inflation come through, primarily with some of the leased facilities and vehicles that we use to deliver the product. So, we need to see those start to ease a little bit. And, that can allow us to leverage that a little better. Obviously, if we get a little bit more benefit, from price on the top line, we can leverage that as well, but not really something we’re expecting at this stage.
So, if we see those investments we’ve made into growth payoff and get us more on the high end of that above-market range, I think you’re going to start seeing the deleveraging start to happen again in SG&A.
Operator: Our next question comes from Kathryn Thompson from Thompson Research Group.
Kathryn Thompson: I’ll just follow up on a clarification on guidance. With the M&A activity this year, we have a pretty good sense of the product breakout contribution by your four major operating segments. But could you clarify which segments should see relatively higher growth, or should it be somewhat evenly split among the four groups?
Mark Witkowski: Yeah. Thanks, Katheryn. I would say as it relates to 2024, given the market growth, the above-market growth in the M&A that we’ve got built in, I would say, your higher growth categories are going to be, pipe valves fittings, storm drainage, and smart meters, just given the acceleration we continue to see there. Fire protection, typically a higher growth category for us, I would say, won’t see as much of the benefit from M&A that’s already closed. And they’re primarily tied to non-resi for us, which we expect to be kind of flattish. So I would expect the other categories to be higher growth and probably a little softer, on the fire protection side, given some of those dynamics.
Kathryn Thompson: Yes. And shifting gears to non-res, could you clarify, are there certain types of projects that are incrementally or tougher as you look into ’24, in other words, schools versus data centers versus warehousing? And then also a better understanding of the type of projects that you see or anticipate ’24 and how that plays into your overall margin guidance.
Steve LeClair: Yes, Katheryn, this is Steve. So take you through a couple areas that we’re expecting some softness in non-residential, certainly like commercial retail. And as you know, we group multifamily into that. Those will continue to be depressed. I think we’ll say the same thing about warehousing as well. On the strength side, the highway, street, and bridge projects have been incredibly strong. Our position that we’ve got with storm drainage and with geosynthetics really should allow us to have some accelerated growth in those areas. And then, we see pockets in parts around the country where industrial manufacturing facilities are still going strong. Really good opportunities for us, both with land development there and also with fire protection. Data centers continues to be a lot of buzz around that. So we’re positioning ourselves pretty well to capitalize on those areas as well.
Kathryn Thompson: Okay, great. And then a final question is around private label. One of your recent acquisitions, Eastern Supply has custom fabrication abilities in addition to normal pipe offerings. I appreciate the color you gave in the prepared commentary in terms of the bogeys of where you’re seeking to grow private label. But could you pull the string a little bit more and help us understand the types of categories where you expect to see the greatest momentum in building out private label? And is there any type of geographic or project type that lends itself to greater private label? Thanks.
Steve LeClair: Okay, thanks, Katheryn. I wouldn’t put Eastern Supply really into our private label piece as much. When we talk about private label, we’re talking about a lot of categories that go into a lot of non-specified type products that go in. Fire protection, we’ve really done a nice job there pulling product through there, whether they’re lowly specified items like some minor valves. And certainly you get into things like hangers and struts and things along those lines that play really well for us to be able to distribute across our network. In waterworks, we’re still continuing to find opportunities there, whether it gets into packaging of glands and valve packages that will get into a lot of the nuts and bolts and accessory packs that go into that.
So, there are just numerous areas for us to do that. As Mark shared with you, we’ve added a thousand SKUs in this last year. And I would say that if you look at kind of what our inventory plan was as we went into 2023 and bleeding off a lot of inventory, obviously that impacted private label as well, too. So, we just weren’t bringing in as much material on private label. And we feel now that we’re much more stabilized in the inventory levels. Our ability to pull through is going to be much stronger as we get into 2024.
Operator: Our next question is from Anthony Pettinari from Citigroup.
