On that piece of it, we’ve got active dialogues going with the customers. And there’s — we’ve seen some sliding in their interest to kind of either replace or expand their equipment needs. But — and we think that we’re going to see a renewed level of order flow there but that’s the area that we’ve had the most softness across all of our DSG platform which is in those — that kind of 2/3 of the historic test equity piece that was tied to more capital spend. And we — now there were some pieces of that that’s been interesting that have been more favorable to kind of, I guess, equally, one has been kind of pressure on gross margins. The other has been to the benefit of. We have seen a shift as people deferred or delayed their purchases on equipment.
They have asked for more rental equipment access. And that obviously has historically come with a higher gross margin associated with it. It does influence how we have to think about investing dollars into our rental fleet. And then one of the things that I spoke to specifically on test and measurement that’s been a real drag for — on the test equity side on the capital spend side that’s been a drag to us but has actually had a little bit more support in the top line. It’s been a drag to margins and revenue over the last several years has been our chamber side. And we will lap some orders that we got over a year ago where we were in a different cost of goods sold environment that we had locked into pricing. And we finally get out from that burden here in the fourth quarter, having worked through the backlog.
We have expanded our contract manufacturing capabilities for those that support us on our — on the chamber side and it allows us to start accelerating the revenue out of our chambers again because we’ve had a large backlog there and it allows us to get back to a much healthier margin.
Kevin Steinke: I’m just wondering how we should think about adjusted EBITDA margins. As we look to the second half and beyond, I think you mentioned, Ron, that 40 basis points sequentially of the margin versus the first quarter, the 40-basis point headwind just from inclusion of Hisco and he also talked about plans to improve Hisco margins. I mean we started to run in some tougher comps, I guess, in the second half year year-over-year. Should we think about just layering in Hisco being largely offset by organic margin expansion? Or how quickly can you start to improve the Hisco margins? Just any color on margin direction would be helpful.
Ron Knutson: Yes, I can start. Sure, Bryan. Yes, I’ll start with that. So yes, you’re — Kevin, you’re spot on the Hisco impact on the sequential margins from Q1 to Q2. And we did anticipate that when we announced the Hisco transaction, we knew that it would bring down the overall margin on a shorter-term basis. But clearly, our expectation is that when we work through the integration process which we were well underway as we sit today, that those margins will — that they’ll really come up to the margin profile of overall DSG. So the interesting part in the second quarter was they were only in for 3 weeks, right? So we have to think about bringing them in for the full quarter here in Q3 and Q4. So whether or not it’s going to be entirely offset by margin expansion from the other entities is a bit of a tough question to answer without giving specific guidance here over the last 6 months of the year.
What I would say is that we have very specific objectives around and action items around the integration of Hisco. We did comment on some of the cost actions that test equity has already taken around that to how that will help right away here starting in the third quarter. And Gexpro Services just continues to deliver. When we start thinking about even their end market cycling a bit, they have a great ability to be able to focus on those end markets where they can pick up growth. And we saw — and we continue to see incremental margin expansion there on the organic basis as well as on the Lawson side. So — it — so hopefully, that helps without giving you — without giving you a specific percentage that we’re going after here in Q3 and Q4 but that might give you a little bit of context just in terms of some of the actions we’re taking.
Bryan King: Yes, Ron, let me — I’m going to dovetail onto that and just kind of as it relates to Hisco. There — one thing I want to flag is that we’ve got an earn-out element to the Hisco transaction that’s at the end of this quarter or if it is October, I guess, Ron, is that right?
Ron Knutson: Yes, October.
