Jeff Edwards: No. It’s Jeff. Not at all really. I mean, interestingly enough, because of our kind of cash position in our balance sheet, it’s actually – so from a robust pipeline perspective, it hasn’t changed. But honestly, private equity is a little wounded in terms of kind of being a competitive bidder with this, not in every case, but probably less so than normal. And so in terms of the sphere of potential buyers we actually feel better, I think about the M&A side of things. So at least there will be fewer at the table in those instances where we are having to get into more of a competitive bidding situation. Yes, we will talked about the for many times, that’s not in the condition to – we’ve developed a reputation, hopefully, I believe, deserve of being the right people to kind of do a deal with and be honorable in doing so and that they typically are previous owners stick with us for as long as we’d like them to and as long as they’d like to.
Unidentified Analyst: Great. Thank you.
Operator: Our next question is from Susan Maklari with Goldman Sachs. Please proceed with your question.
Susan Maklari: Thank you. Good morning, every one, and congrats on a great quarter, guys. Really well done.
Jeff Edwards: Great. Thank you, guys.
Susan Maklari: And my first question is when we think about the profitability of the business this quarter, in addition to the gross margin, you’re also seeing some really nice leverage on the SG&A line. And as we think about some of the dynamics that you talked about that are coming through the business this quarter and then even thinking further out in terms of where single-family starts are coming through today and some of the other dynamics between multi and single. Any thoughts on the ability to sustain some of this and where that may go over time?
Michael Miller: Yes. Actually, this is Michael. Thanks for that question. And I think it’s when – contextually, when you look at particularly G&A expenses, let’s that put selling and G&A together quarter-to-quarter, like – so from the second quarter to the third quarter, really, G&A does not move very much. I mean what impacts the dollar value of G&A is really, especially because we’re in not just on the material side, but pretty much across the board, a fairly benign inflationary environment, even on the G&A side, what impacts it really are acquisitions, obviously, because they bring their own G&A. And then quite frankly, for us, because we have a very high variable compensation structure, the variable comp has an impact on the absolute dollar value of administrative expenses, but it’s obviously key to profitability.
So as you correctly pointed out, from the second quarter to the third quarter, we actually improved our SG&A leverage and actually, the SG&A leverage in the third quarter was the best that it’s been this year. Still higher than it was in prior years, but we feel good about what’s happening there, and we also feel good that we’re not experiencing the inflationary pressure, particularly the wage inflationary pressure that we experienced through all of really ‘21 and ‘22 as it related to G&A expenses. But that variable component definitely is going to flex with the great profitability.
Susan Maklari: Okay. That’s very helpful, Michael. And then I wanted to follow-up on the comment that you made around commercial and shifting to a tailwind versus a headwind in there. Just given the macro environment around heavy commercial, can you talk a bit about the backlog that you have there and how you’re thinking about the forward trajectory of that business a bit?
Michael Miller: Yes. We feel good about it. As I think we’ve said on previous calls, last year, it was all about improving the profitability and not about sales. Now that the profitability has stabilized and improving, the team is doing an excellent job of bidding and bidding at – and it’s not – again, it’s not just the price they are bidding at – and it’s not – again, it’s not just the price they are bidding at. The team has come together and is the operational efficiency that they are experiencing is where it should be. They are – particularly on these large commercial jobs and on multifamily jobs, yes, price matters, but what’s more important is how well you manage the crews, how well you manage the GC and how strong that relationship is.
