There’s more than just what the list price is or how we would change our pricing at the list. There’s rebates. There’s other marketing programs we run with them. But we think we can hold our price fairly well and we’ve not really seen a significant movement yet on the direct material cost side. Labor continues to trend up, freight is continuing to go up. And rates or I should say material costs are still in many cases fairly elevated from where we were back in the 2019, 2020 timeframe when we took on $100 plus million of inflation in the business and really never were able to pass full pricing on to maintain margin levels, which has driven some of the compression we’ve seen. But look, it’s different in every product category. I think that’s where we need to maintain flexibility as we go forward.
And look, if we get a massive tailwind from deflation, it could be a different story as we look out in time. But right now, it’s kind of flat pricing, for the year is the assumption and the approach we’re taking.
Susan Maklari: And then, thinking about the productivity and the efficiencies you can realize, I know you talked about that $4 million of carryover benefit that you’ll get in the first half of the year. But are there further improvements that you can make on the cost side as we go through this year? And other opportunities that perhaps can come through over time?
Scott Rajeski: Yes. So, Susan, we’ve continued to ramp up our value engineering efforts and initiatives on all fronts. We’ve talked a lot about the lean. A lot of that was not to say we haven’t been doing it, but I think we’ve continued to accelerate that. We’ve continued to add more engineering resources to the team. And part of the incremental decremental margin we’re seeing as we move through the year is as we ramp and bring more engineers on to start to build that pipeline of productivity and efficiency projects on the materials side in fiberglass and the other product areas, increase the number of lean events we’re doing in the factories. It’s going to take a little while for that ROI to kick in, but what we’ve seen from the initial waves, there clearly is more to become from all of those initiatives.
We’ve got some really, really neat things in the hopper. I think as we move through time that pipeline will build and we’re trying to get on to an ongoing 3% to 5% productivity gain every year on the material front from those efforts and initiatives.
Operator: This concludes our question-and-answer session. Would like to turn the conference back over to Scott Rajeski for any closing remarks.
Scott Rajeski: Yes, thanks. Hey, thank you for your time, everyone to take called here this afternoon and your ongoing interest in Latham. As we think about Latham, right, we’re extremely well positioned to continue to outperform the overall market and drive that continued acceleration in fiberglass penetration as a total of the new in-ground pool starts like we discussed earlier today. We also remain very confident in the long-term growth opportunities we see not only in our business, but in the industry overall. And we look forward to catching up with all of you upcoming investor events. Thanks for your time and have a good evening.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
