And so I really – that may be, let’s say, the third reason. So increased home prices, more inventory on dealer lots and then just other finance companies being more conservative, so they’re getting a larger piece of the business on the consignment side.
Brian Glenn: Sure. Okay. That’s helpful. And I would suspect it actually benefits you guys and larger operators more so than smaller ones because it gives you a chance just to use your balance sheet to handle that contingency?
Duncan Bates: That’s right.
Brian Glenn: Yes. And then my second question, I know someone asked this, you jumped into it a little bit. If we – so without talking about specific competitors, but if we grab some of your peers, which are publicly traded, so I know it’s only a slice of the market. And if you just do – I mean, you can do the math anyway you want, but if you jump in to just their manufactured housing try to come up with a cost of goods sold per home, sure, that includes depreciation, maybe for them, it includes depreciation on underutilized or underutilized facilities or facilities not running at full capacity. But regardless, the number is big. It’s a substantial number in terms of what you guys can produce a home for. There’s also an assumption in there about double versus single if they disclose that breakdown or not, but either any way you slice it, it’s a big number.
And so that gap is really just you guys in-sourcing and being more vertically integrated. And I think probably a little bit of this product to just being slightly dialed down, still a high-quality product. But can you elaborate on that?
Duncan Bates: Yes. I’ll try to give you some additional thoughts there. We do pride ourselves on being vertically integrated and trying to buy materials and source materials from overseas and build our own components. I certainly think that’s an advantage. Another advantage is, look, we’ve got two founders that probably have more invested, at least on the manufacturing side of this industry than anybody else in the country, and they’ve both been in it for over 40 years. So a lot of thought and time and effort has gone into how do you build a great floor plan and a nice house that’s going to last efficiently. And so I think we may do a better job as far as like using the right materials in the right places. But I think the biggest component that you hit, and this is something that I want to make clear on this call is I don’t have to feed 30 or 40 plants.
I’ve got three plants and we know that they’re profitable even at lower production levels. And historically, a lot of these plants with the right labor have done more – significantly more in production than what we’re currently doing. We’d love to ramp that up, and I think there’s additional margin there, but it’s really hard in today’s labor environment. And as the market slows and people idle plants and don’t have orders and companies, smaller businesses shut down, though you really – you can’t get small fast enough and I think that some of the larger competitors could really struggle there where you’ve got 40 plants, and there’s more fixed cost than people realize. And in a tight labor environment, you’re moving pretty slow to get rid of your core team because it may be next to impossible to hire all those people back.
So I think that just having a large manufacturing footprint, it could be pretty difficult in a down cycle.
