H. Woltz: Well, I mean, there’s always pushback to price increases. But I think the magnitude of increases in costs that we’ve seen are undeniable. And I don’t think there’s any competitor in our industry that would expect to absorb those raw material increases. And I think the customer base is realistic about sources of supply. So I think supply and demand have matched up in a way that makes this price increase around look attainable. What happens in the future is going to be determined the strength of demand for our products and also about what happens in the overall steel market. And it’s just beyond us to be able to project that past a month or two out..
Tyson Bauer: And were you the industry leader in implementing the price increases? Or were you following others within the industry and their actions or have others followed your actions now?
H. Woltz: We are typically the leader in the industry, and we have seen others follow our actions.
Tyson Bauer: Okay. Inventory levels, so we’re $9 million below where we were the prior quarter, which you have some seasonal lift in there. What’s the split between the raw material and the finish? And is that split something that was impacted by delayed shipments at the end of the quarter? Or is that fairly normal split from what you’ve seen in prior quarters?
H. Woltz: It would be a fairly normal split, Tyson. There are a couple of product lines where we needed to reduce finished goods inventories. I don’t think that you’ll see our raw material inventories fall further than where they are today. They’re at a very comfortable level. And of course, raw material inventories are a function of steel mill service levels. The worse the service levels are and the longer the lead times are extended and the higher the inventory levels we end up carrying. And the other real driver there is our activity in offshore markets which is today at a low area. So our raw material inventories are comfortable for the state of the business and our finished goods inventory liquidations are about complete. But I wouldn’t say that there’s any change in the split between raw materials and finished goods that would be surprising.
Tyson Bauer: And the overall level should be as we gear up for the warmer seasonality, we’ll start to see the inventory amount creep up as we get into Q2 forward. Okay. It sounds like — Scot, was there no incentive calculations or pay compensation that was included in Q1. So does that imply a true-up possibility in future quarters that may have better profitability?
Scot Jafroodi: Yes, there is no expense pickup in Q1 for the incentive plan. But — and yes, it would — improving results in Q2, Q3 would accelerate that.
Tyson Bauer: Okay. And when we look at Dodge, you look at ABI, you look at all their AIA data, how much of that do you think is — as far as the expected projects having better numbers is really dependent upon rate cuts and when those rate cuts occur, that would spur actual activity, whether that be in housing, commercial or otherwise. It seems like the infrastructure piece will be there, given state and local municipality budgets on DOT with the matching of the federal funds. So that side seems to be fairly high conviction level. That will show up, what about the residential and more of the commercial side. Is that more rate dependent?
H. Woltz: I think in residential, higher rates have already had the impact. And as you can see from new home construction, which is the primary consumer of our product, it hasn’t been — it hasn’t been hurt nearly to the extent that overall home sales has been hurt by our rates. So I think on the new construction side, that trauma has run its course and that we should see reasonable market conditions going forward. We may not be building 2 million homes a year, but it’s not 1.2 million either. So I think it’s run its course and really the issue for us in that market over the last few months has been more margin compression than it has been volumes. Volumes have recovered pretty nicely. Commercial construction has undoubtedly been affected by higher interest rates, particularly speculative projects that are not undertaken by owners, I think that interest rates have been high enough and the change has been dramatic enough to make some projects uneconomic and we see many of those coming back to market for requotes time and time again just as investors assess the viability projects.
But it has been — that market has been adversely affected. And certainly, if interest rates were to begin coming down, I think it would have a beneficial impact there.
Operator: Thank you. We have no further questions registered. And with that, I will hand back to your host, H. Woltz for closing remarks.
H. Woltz: Okay. Thank you. We appreciate your interest in the company. We look forward to our next call where we fully expect to report much improved results. Thank you.
Operator: This concludes today’s call. Thank you for your participation. You may now disconnect your lines.
