Jeffrey Powell: Yes, one — the — so we have around, I think, about 24 kind of companies with P&Ls, and I would say kind of half of them are in it. The thing that’s impacting it now, which, frankly, is a little frustrating for us is that you really can’t have an ERP project going on at the same time as 80/20 because they’re both so significant in scope and the resources that they require. And so as it turns out, what’s controlling our — some of our 80/20 implementation now is companies that are either in or getting ready to start ERP projects. It just as luck would have it, we’ve got companies that are end of life with the current ERP systems, where we were forced to implement new ones, and that really has delayed implementing 80/20 in some of those businesses.
And so that’s been something we’ve been wrestling with, I would say, over the last kind of 18 months trying to decide, okay, which ones can we delay the ERP project until 80/20 is finished, and which ones are we going to have to delay 80/20. And so that’s really controlling some of the pace. The other thing, of course, is we continue to build up our internal team, the expertise, but it also has some limitations. Just the available expertise to implement projects. So we still have — I’ve been saying for some time, I think we still have probably another, say, three years, four years for this to run out, and that’s, of course, not including new acquisitions. Every time you acquire a new company, then you take on a new future project. And so we have a couple of new future projects, which we just added this year.
So it will never stop. But I think — we will, I think, in three to four years, have almost all of our businesses that we currently have kind of coming out of the back end of the process.
Walter Liptak: Okay. Good. Okay. Good. Maybe one last one for me, just switching gears to the pricing environment. And in 2020 — I don’t remember that there was ever any issues because your niche markets with selling price. But are you taking up prices again? Are you still seeing inflation?
Jeffrey Powell: Well, I would say that a lot of the inflationary pressures we’ve seen in raw materials have subsided. They’ve improved. I would also say that with demand down somewhat, customers are very reluctant to accept big price increases. As we mentioned before, back in ’21, ’22, we were all just trying to get the materials from a supply chain standpoint to provide. And so it was more can you get me something and what’s it going to cost us to do it. And that was a thing for us buying our raw materials. So things have stabilized there. And so I think we’re returning back to a more normal environment from a pricing standpoint. And as you know, we — if you look at our improvement that we’ve made, it’s almost all been on the — on our SG&A side.
Our margins have held very steady, which is an indication of our pricing. So what we’ve really worked hard on is reducing our kind of our operating cost, and that’s really where we’ve gotten the improvement from reducing our internal expenses.
Walter Liptak: Okay, great. Thank you.
Operator: Thank you. I’m not showing any further questions in the queue. I would now like to turn it back to Jeff Powell for any closing remarks.
Jeffrey Powell: Thank you, Victor. So before wrapping up the call today, I just want to leave you with a few takeaways. 2023 was another record-setting year for Kadant, and our employees deserve a lot of credit for achieving these results. I want to thank all our employees around the world for the commitment to serving our customers’ needs. I also want to welcome our newest employees, from both Key Knife and KWS manufacturing. We’re excited about the value you add to Kadant and the opportunity to build upon the successes you have achieved. In 2024, we will continue to seek new opportunities to create value as we focus on meeting our customers’ needs with innovative technologies and solutions that drive sustainable industrial processing. Lastly, our financial health is excellent, and our market positions remain strong. We look forward to delivering exceptional value for all our stakeholders again in 2024. With that, I want to thank you for joining the call today.
Operator: Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect. Everyone, have a great day.
