Michael Miller: Yes. Multifamily gave was a significant impact on the price/mix calculation, and you did hear it correctly. In all honesty, the shift to production builders weighted towards production builders relative to the regional and local builders has not happened as quickly as we expected it to. So we think that the dynamics around production builders seeing a negative impact or a headwind to the price/mix disclosures is really a 2024 event, quite frankly.
Noah Merkousko: Got it. Alright. Well, thanks for the time. And good luck with the rest of the year.
Operator: Our next question is from Phil Ng with Jefferies. Please proceed with your question.
Phil Ng: Hey, guys. It’s great that you guys have managed this air pocket very well with single-family slowing down, but certainly, it sounds like you’re – you got some favorable outlook as we look at 2024. How does that all kind of play out? I mean do you expect your volumes kind of bottom out in 3Q and you start seeing a positive inflection by 2024? Because it sounds like most of your end markets, you’re pretty positive, housing up, sounds pretty resilient and same thing on the multifamily side. So kind of help us contextualize how your volumes could kind of progress in the next few quarters?
Michael Miller: Yes. I think I would say that volumes are not going to be great for the next couple of quarters. I think it’s really going to be more maybe back half of second quarter and into the back half of the year. And that’s really as the production builder is just absolutely accelerate their construction pace. I mean, just from a context perspective, their backlogs are still down dramatically from where they were. Now that’s a reflection of the order growth having declined so much. Now in the past few quarters, they haven’t grown significantly and us improving not just us, the industry significantly improving cycle times to bring those backlogs down. But as they continue to work to build those backlogs back up and continue to build homes, which we think will again be a 24 event, that should positively impact our volume disclosures.
Phil Ng: Michael, we should expect the rate of decline to moderate in the coming quarters? Or it’s going to still take some time until like mid next year?
Michael Miller: Yes. I would say that as it answered the previous question that our volume trends were the best in October that they have been all year.
Phil Ng: That’s helpful. And then your margins were – have been very impressive this year and your messaging has been pretty clear value over volume. It sounds like labor material is still very tight. Is that a backdrop where you see material prices go higher? And more importantly, is that an environment you can raise prices and drive margins higher in 2024? Or is the goal just kind of hold on to price margins just because margins have been strong and obviously your customers are looking to tackle affordability as well.
Michael Miller: Yes, I’ll start that, and then Jeff can finish. But obviously, and I think we’ve been pretty consistent in this, is that we always want to value the services that we provide fairly and we always – we do want to maintain margins where they are. But there is a balance. We have to have a balance between our customers, profitability, our suppliers. And it’s hard to express really how important the stability that we’ve seen across the board in so many aspects of the business have really helped us to manage very effectively this year and deliver the kind of improvement in profitability that we have. The team has just done an outstanding job of managing the various inputs, if you will, and dealing with the fact that they don’t have the stress that they had last year associated with getting materials.
So yes, we will continuously work to maintain and improve margin. But admittedly, our margins have been – our gross margins have been really we’ve been very confident with and feel very good about the results that we’ve had this year.
