The short stories, hey, they’re going to abate. From what I can tell, I think the short thesis is that you’re going to find that margins go back to levels that were kind of normalized to the pre-COVID level. Some of the challenges when you look at this, and if you just take the 368 [ph] we made in 2020, right. If you do nothing else but add interest income, right, to that base net income number and divide by today’s share count, now you at least got a starting point, right. And it’s higher than the 368. Volumes are up 20% since then. And margins are fundamentally higher. And so that case is something I think that we respectfully disagree with. But we’ve put our money where our mouth is with the repurchase program. We’re still trading afford valuation multiples that are well below normal.
A lot of the benefit from our CapEx initiatives over the last year or so are still going to show their benefits in future periods. And if you just then settle with the demand drivers and the structural support for raw material inputs, they all remain positive. So with all that, I still see tremendous value in our stock, which I think the Board evidences with consistent repurchases every single quarter. So we’ll see, I guess the shorts at some point may be shareholders.
Daniel Jones: Yes. Over we also – over the years, we went public at 1992. And we’ve had periods where we get lumped in with – our stock is lumped in on copper plays. If folks are betting that copper is going to go down, they’ll associate that over the years. I’ve seen them associate that with our share price on the bet on the downside, so you just don’t know. We look into it. We try to keep up with it. We do a few things internally as best we have any type of control to try to go after that. So the easiest thing to see what our feelings are going forward and how we feel about the shorts and the multiples, as Bret just mentioned, is the stock buyback.
Unidentified Analyst: Okay. Thank you very much and good luck for the further execution of the strategy. And I think the most important thing probably is the operational excellence and yes. Thank you all. I appreciate call, yes.
Daniel Jones: Thank you.
Operator: Our final question is a follow-up from Brent Thielman with D.A. Davidson. Your line is open.
Brent Thielman: Hey, thanks, guys. Just a couple more. Bret, just wondering if you could clarify the SARs cost that might be embedded in SG&A this quarter and maybe how we should think about SG&A going forward?
Bret Eckert: If you look at it, and we really try to lay it out a bit in the press release. We’ve got about a $16.9 million SARs expense in the first nine months. I think that number that we actually took the SARs for in the first quarter, which is really where the bulk of the SARs came, it was probably $13.5 million, $14 million. And that’s the swing we talked about in the first quarter because you actually saw a $4 million or $5 million benefit in the first quarter of 2022 compared to $13.5 million and $14 million SARs in the first quarter of 2023. And so the difference in that and the $16.9 million on a year-to-date basis obviously would account for the difference in the last six months. We do get SARs. We’re not issuing anymore.
The last ones were issued in January of 2020. The exercise of those by employees continues. So we’re down to less than a third of what we had outstanding in January of 2020. And so somewhat of the timing of when someone potentially exercises that within a quarter, that then gets marked to whatever that price is that they exercise it. And that may be above or that may be below what the quarter end price was. And so some of that kind of falls out in the wash.
Brent Thielman: All right. I appreciate that, Bret. And then just the follow-up, the XLPE investment, I think this was intended to help maybe debottleneck some things, control your costs, maybe it potentially unlocks some capacity and having that full integration. You’ve talked about several markets that product goes into. But, Daniel, if you were to sort of narrow that list down, which of those markets or what gets you most excited about this investment in that product area? I would imagine data center sort of topped the list. But are there some other areas that this can accelerate for you that really validates putting the dollars into this?
Daniel Jones: Yes. With the whole – most of the Federal programs that have been announced, each one of those have a component that will create additional or at least solidify financially. The demand for the product that takes the XLPE water treatment facilities, majority of that is XLPE product. The hardening of the grid, there’s a significant amount of the distribution product that’s involved with XLPE installation. The data center AI upgrades the expansions of the current designs that are being reconfigured for data centers to become more efficient, allows for more of a multipurpose, if you will, product to be installed. And that’s all XLPE or cross-link products. So it’s really more of the same with some substitution.
And the XLPE is good for that on both copper and aluminum metal conductors. So it’s an exciting idea, it’s exciting demand that’s going to be there. We’re managing, if you will, that enthusiasm internally. And you couple that with controlling the input side. It’s going to be a good product for us. The hard part is to put your finger on what that actual number is going to be. But there’s no question with existing sales alone, without the new enthusiasm on top of these federal and state programs, we had to go that route to control our cost and as Bret mentioned more than once, control our service model. But the volume upside is substantial.
Brent Thielman: Yes. And Daniel, I mean, some of these areas, data center, grid hardening, renewables, I don’t recall being big markets for you five plus years ago. Maybe I’m wrong, but seems like this opens up some new doors for you. Is that a fair statement?
Daniel Jones: It definitely does, yes. We’re following existing customers where the peculiarities of doing business have been identified. We’ve talked about that in the past. Existing customers are going into and supporting their customers, as you should, which are reaching into some areas that may not have been labeled as a particular market segment for us in the past. The good thing is it’s the same technology, it’s the same wire that we currently make. It’s just more of it.
Brent Thielman: Okay, very good. Thank you.
Daniel Jones: Thanks, Brent.
Operator: There are no further questions at this time. I’d now like to turn the call back over to the presenters.
Daniel Jones: All right. Thank you, Jack, appreciate it. And I appreciate everyone’s involvement and great questions today. You guys have a great afternoon.
Operator: This concludes today’s program. We thank you for your participation. You may now disconnect.
