Craig Kesler: Yes. Look, again, it’s not a big volume oriented business. It’s not a high fixed cost business. So down volumes doesn’t hurt as much. And paper prices, which is a large input are down year-over-year. That continued to be a benefit, a nice tailwind as is energy. So energy is down a couple of dollars a million versus where we were last year and seems to be continuing to track that direction. So what had been tailwind or headwinds a year ago have kind of turned around and help keep margins pretty flat.
Operator: The next question comes from Anthony Pettinari with Citi.
Anthony Pettinari: Can you talk a little bit more about the rationale for the Stockton terminal acquisition, what was attractive about that asset and how it supplements your system? And then just following up on Stanley’s question on M&A. You had a lot of success with the Kosmos acquisition. Are there heavy-side assets out there that could potentially be attractive? Or are those just kind of so scarce to kind of once the blue moon?
Michael Haack: Yes. So this is Michael. I appreciate the question. Yes, when we look at — first, I’ll take your second question first. We’re always involved if any acquisition work come to light. We evaluate a bunch of stuff. But as Craig and I both mentioned, we have some strict financial performance criteria that are there. But again, if anything were to come to light, we would be interested in it, one of our cash allocation criteria is to keep our existing assets and like new condition and grow through acquisition if something were to come available. We look at a lot of different businesses out there. And we only select the ones that really fit our network the best. As for Stockton, if you look at the West Coast and everything where we stand, we have a business on that side.
That import terminal really supports our business as we grow with our Nevada Cement opportunity. We were already bringing cement into California from Nevada. And as Nevada continues to grow and some of the surrounding areas there continue to grow, we’re finding — we were a little light on supporting our customers. So we saw this as a great opportunity to bring in a product to support our customers and continue to grow in that market that supports one of our cement facilities there.
Anthony Pettinari : Okay. That’s very helpful. I’ll turn it over.
Operator: The next question comes from Jerry Revich with Goldman Sachs.
Jatin Khanna: This is Jatin Khanna on behalf of Jerry Revich. How are you thinking about cement pricing for 2024 in light of the extreme volatility in diesel prices and overall inflation?
Craig Kesler: Just to be clear, diesel prices don’t have as much of an impact on us in our cement business. And – so we have announced price increases in cement for early January, as we said earlier, kind of between $10 and $15 a ton depending upon the market. And that’s our announced plans at this point.
Operator: The next question comes from Adam Thalhimer with Thompson, Davis.
Adam Thalhimer: Nice quarter. Craig, what was the exit price in Wallboard for Q2?
Craig Kesler: It was pretty consistent with the quarterly average.
Adam Thalhimer: Got it. And then cement volumes down 1% year-over-year, you cited weather. How are you thinking about the December quarter, you have an easy comp. You were down 13% last year. I don’t remember what that was, probably weather. But how are you thinking about that comp and then kind of early 2024 cement volumes?
Craig Kesler: Brent, yes, look, there’s always weather in different quarters. But look, the underlying fundamental demand for cement continue to go in the right direction, whether that’s infrastructure, the highway awards that continue to grow these large industrial facilities, it’s hard to predict quarter-to-quarter depending upon when certain things happen or project delays or whatnot. But we continue to see an environment where utilization rates should remain high across our network, and there’s a good demand backdrop for us.
