So, we’re probably still seeing – I don’t know what you want to say to be stocking, but certainly inventory is probably at appropriate levels. Jeff and I were just talking before the call that one thing we all need to be mindful of is that as the world dries out here in the United States and we had – and it’s – of 130 in a year we actually had a wetter year 120th this year in the first quarter of the year than the 110th or whatever last year at this time and one did not plan for that, but you can’t plan for the weather you’ve got to respond to it. But as the world dries out the likelihood of seeing some good demand in ag as we start seeing pumps getting turned on. So, I think the channel inventory to answer your question specifically, I think it’s in good shape.
I don’t think it’s overly high. I don’t think it’s overly low. Jeff, do you have additional color to add to that?
Jeff Taylor: No, I think you hit it right on, Greg, I mean, the business as a whole water fueling and distribution we aren’t getting positive pricing. As Gregg mentioned in water, we’re a little more favorable outside the US, but generally low single digits, more of a return to normal from what we saw several years ago and less frequent price increases than when we were in the high inflation environment. Distribution is getting good price on what I would call the core products, pumps, motors, drives, and controls. The commodity piece continues to be negative price in the current environment. So, that’s what we’re seeing across the business.
Mike Halloran: Great. Thanks for that. And then, secondly, just on the margins for the water side good seasonal margins there. Obviously, you mentioned the prepared remarks that mix was a benefit. How do you think about what the run rate looks like or how to think about modeling that for the rest of the year?
Jeff Taylor: Yes, I think the, I mean, we got a favorable mix particularly from the decline in large dewatering which is at the low end of the water system’s margin range and so with that being a lower percentage of the overall mix that’ll be a favorable mix impact for us. We do expect large dewatering to continue to be down year over year as we move through 2024.And I think the best way to model it, Mike, is just assume the current mix that we have and on a go-forward basis. And then we’ll see as it happens. I will mention, though, that large dewatering is going to be lumpy this year as we move through the year. So there’s a lot of movement there in terms of quarter-to-quarter impact.
Mike Halloran: Thank you. Appreciate it, gentlemen.
Jeff Taylor: Thanks Mike.
Gregg Sengstack: Thanks Mike.
Operator: Thank you. One moment, please, for our next question. And our next question comes from the line of Matt Summerville with D.A. Davidson
Matt Summerville: Yes. Thanks. Good morning. Can you maybe talk about kind of embedded in your guidance for the year what sort of organic outlook you’re assuming for water distribution and fueling in 2024 relative to 2023? Just maybe a little bit more segment granularity there, and then I’ll follow up.
Jeff Taylor: Yes. A little more organic outlook. I mean, I think on for the guidance overall on a four-year basis, we’re kind of low to mid-single digits top-line growth. In water systems, I think we expect pretty normal organic growth for the business, except excluding the impact from large dewatering, which we know is going to be down on a year-over-year basis. And so that’ll be in that normal range that we talk about in that 3% to 5% range. Fueling, I think fueling will be slightly lower this year till net positive overall. But they’ve come off of a really strong year in 2023, and we’re seeing a bit of a normalization in terms of demand in that market. So, still positive overall. And then distribution. Distribution on an organic basis, I think, similar to what we see in water systems. And possibly some upside in distribution as the market, as we come into season and the market picks up.
Matt Summerville: Got it. And then just a follow-up on kind of water and distribution. If you look at U.S., Canada, how did your business perform in terms of residential versus Ag? And how are you thinking about organic outlooks there for 24 relative to 23?
Jeff Taylor: Yes. Interesting question. In the first quarter on a year-over-year basis, residential was down slightly. I would say low single digits. And that’s reflective of our groundwater business, which was somewhat impacted by weather during the quarter. Ag was down a little more in the quarter. Ag was down mid-single digits for the quarter on a year-over-year basis. And I also believe weather was a factor that impacted ag overall.
