Patrick Baumann: Hi. Good morning. Thanks for taking my question. Quick question on €“ you mentioned a couple of different times around customer schedule management, I think. And you talked about that’s being felt most, if specific end markets. Because you also mentioned lumpiness, I think in microelectronics, maybe that’s what you are talking about, just
Ron Keating: Yes, just, for?
Patrick Baumann: Just looking for incremental color around kind of the scattered comments you made in your commentary around project delays, lumpiness in kind of projects, that sort of thing.
Ron Keating: Yes. So, actually as you think about our project outlays, and this is one of the difficulties we have had through the entire supply chain difficulty is, we are working, we are aligned we are ready to deliver. It is customer sites being prepared for us to deliver to. So, the larger and the more complex the system that we are selling, the more challenging that is for them to be on time because they are having to coordinate multiple other subcontractors, multiple other supply chains to be ready for our system to go in. Again, when our system goes in, it’s towards the end because they are getting ready to turn on the water. The system goes in, it gets delivered. And then until they turn it on and start the operation, it delays our billing around our operating and maintenance or build on operate top contracts.
So, that’s €“ you kind of think about when you look at Page 5, the more complex, the larger systems like the microelectronics that I highlighted, would be the ones that would be a little more lumpy on customer timing and customer delays against the remainder of the projects.
Patrick Baumann: And that’s something that you had previously embedded in your outlook. I think you are saying. So, that’s not something that is a surprise to you. It’s just something that you are highlighting as yes, okay.
Ron Keating: We have been dealing this with this from the, I would say, the supply chain challenge. We deal with it always, but certainly, the supply chain difficulty has exacerbated that issue, and we have been managing this for the past 2 years.
Patrick Baumann: Thanks for those comments. And then can you comment on how Mar Cor performed in the quarter and how that business is kind of performing versus expectations?
Ron Keating: Yes. I would say it’s right on track. We feel very good about Mar Cor, where it is. It’s right on track. We still have an expectation for our SAP rollout in the month of February, and things are lined up exactly as we anticipated.
Patrick Baumann: Okay. Great. Thanks for answering the questions. Have a good day. Thanks.
Ron Keating: Thank you too.
Operator: Thank you. Our next question comes from Mike Halloran with Baird.
Unidentified Analyst: Hey. Good morning everybody. This is Pez on for Mike.
Ron Keating: Good morning.
Unidentified Analyst: Quick question for you. Obviously, the margin performance was pretty exceptional and a healthy amount of price helping there on the price/cost side of things. Could you maybe talk about the margins embedded in the expanding backlog, particularly given the current mix and just the sustainability of margin performance?
Ron Keating: Yes. I mean we feel good about it. We look at the margins in the backlog with regularity. And again, one thing that we highlighted as our pricing goes out. It’s very sticky. It stays. Our backlog is already priced against price increases. And we feel good around the way that we are managing the business and able to manage the supply chain.
Unidentified Analyst: And then a bit of a clarifying question. I believe I heard something about some permitting hang-ups. Just a quick clarification, is that a broader comment on changing the permitting environment, or is that €“ I suspect that’s more of a one-off comment associated with a subset of projects?
Ron Keating: It’s a few specific projects in certain market areas. And again, that really goes to the question I had previously around how we are dealing with delays on a customer site. When they are dealing with delays around permitting, around getting their supply chain, the rest of the infrastructure in place for us to be able to deliver is something that we manage against with regularity. Sometimes €“ it creates some lumpiness in the recognition of revenue against backlog on occasion. But it’s nothing new that we haven’t been dealing with in the past.
