Stephen Gengaro: Got it. Okay. Good, thank you. And then the other one on Dyna is given what’s going on in the market and kind of assuming that maybe the rig count seems to be flattish from these levels for the next – let’s say, through year-end, what’s the driver of that? I mean is it just kind of – should we think about it as following the rig count and completion activity? Or is there longer laterals or some technology that maybe can bump the top line as well?
Michael Kuta: I’d probably think about it as more steady, stable now. One of the key ways we win is with our customers. And so our customers that we’re aligned with, our key is delivering technology at the well site, quality service delivery and then partnering with the right customers and how they’re performing with the E&P. So I think we’re aligned with the right customers there. So I think probably stable to steady. And we tend to outperform the market there, so we feel pretty good about, even in a flat rig count environment, we’re doing what we can do to control our destiny here.
Stephen Gengaro: Got it. Great. And just one final quick one. Are – any guess – well, not guess. But I guess one is any guess on kind of where your share stands? And just not a guess. What’s the current pricing environment look like for the perf business?
Michael Kuta: So share, we’re – we’ve been in that, I think, 25%-ish, maybe a bit north of 25%. We kind of bounce between 25% and 30%. And the pricing environment kind of remains as is. It’s been a fairly challenged environment over the last couple of – I’d say, a couple of years quite frankly. But I think it’s relatively stable pricing right now.
Stephen Gengaro: Okay. Great. Thanks for the details.
Michael Kuta: Thank you, Stephen.
Operator: Thank you. Our next question is from Gerry Sweeney with ROTH Capital Partners. Please proceed with your question.
Gerry Sweeney: Hey, good afternoon, Mike, Eric and Geoff. Thanks for taking my call.
Michael Kuta: Thank you, Gerry.
Gerry Sweeney: Just sticking with Arcadia. Obviously, I think that was a little bit [indiscernible]. It sounds like there was some, I guess, weakness at the storefront level. But I’m curious if anyone is – the competitors are maybe adjusting some of their strategy or anything happening on that [indiscernible] after you. Or is this just strictly a lower investment market?
Michael Kuta: Gerry, great question. I don’t think it’s competitive pressure as much as it is really the backdrop in the commercial business, which we see improving. So we don’t see any competitors doing anything different. But I think there’s a second item, which is we also saw a slowdown in our ultra high-end resi division. And so we’ve done a lot of work in that business, which was, I’d say, not a mature business. It was a small piece of the overall Arcadia. And we’ve done a lot of work to really improve the back end in terms of our operations, reducing lead times. So we see that business, I think, hit a valley in the first quarter, particularly at the end of the first quarter. So with all of these improvements in place, we’re driving the front end of the business now, and there’s a lot we’re doing to add rigor to our sales processes and what we’re doing on the front end in terms of close rates, pipeline, dealer performance.
So we think that business is going to track favorably as we start moving through the year. So really, we’re kind of seeing a double whammy on the commercial storefront side as well as on residential. But it’s more market related and specific also to our residential business than customer.
Gerry Sweeney: Got it.
Michael Kuta: Or competitor.
Gerry Sweeney: Do you know how much of that storefront business is new build versus like replacement type business? Or is that just hard to gauge because it’s – you have trucks lining up there just taking sticks every day. You may not [indiscernible] curious if you have – is it a new build or replacement or too hard to tell?
Michael Kuta: It’s too hard to tell right now. We’re actually getting a lot of good visibility now out of our ERP system. We’re not there on that yet, Gerry. Hopefully, in the coming months, quarters, we can start talking a little bit more about that. But it’s certainly a mix of new build and repair and remodel.
Gerry Sweeney: Got it. And then speaking to the ERP system. I did a quick – aluminum prices actually looked like they kind of spiked a little bit through April past. There’s been a little bit of mismatch between sort of inventory coming out, product going out with the ERP system, right? Any concern there? Or we sort of move beyond that or…
Michael Kuta: I don’t see any concern there. There’s a tick up there in aluminum. Hopefully, we might even be able to capture some margin there. So I don’t think anything to be concerned about. Maybe even a little bit upside there as we kind of move through the year.
Eric Walter: Yes. And Gerry, what I’d say, just to add to that, I think we’ve got more visibility into how those aluminum costs move through our production system versus where we were this time last year. So I think we’re going to have a much better handle on how we can handle those cost increases and pass this on to customers in a timely manner.
Gerry Sweeney: And then one last question. I’ll jump back the line. You mentioned you could pull back on CapEx, but there was paint line but there was anodizing as well. And anodizing was margin accretive or positive to margins, however you want to say it. Are you sticking with that? Or has that changed with the CapEx on that front?
Michael Kuta: Yes. I mean that was going to be back-end loaded in 2024 anyway, so we’re evaluating that. There’s different opportunities and sources we’re looking at there. So I don’t think right now, with where the market’s at, we’re leaving a lot of money on the table here. So we’re continuing to evaluate that, Gerry.
Eric Walter: Yes. And I think what we would do, as we evaluate it, is to look for how we can get the highest ROI. So is it spending the CapEx and bringing those capabilities in-house? Or is it actually looking at outsourcing some of this capacity to a third party. Where there may be some overcapacity in the industry, we might be able to get a better return that way. So that’s going to be part of the analysis. And at the end of the day, we’ll determine what we do based on the return we get from the different approaches.
