Unidentified Analyst: Understood. Appreciate that. And then, just on the North American new residential construction side of the business, is there any way you could help ballpark what you’re multi-family exposure is? I mean, realizing there’s a mix shift to single-family from the expected declines, but just given the magnitude, just some sense of quantification there would be helpful.
Christopher Ball : Hey, Chris this is Chris Ball here. I’ll go ahead and take that. First off if you zoom out in the business we’re relatively evenly split between RRR and new construction. As you look at the new construction segment, it’s more heavily weighted towards the single-family homes. We don’t get clear data on which product goes into which segments. But I’d say the door is going into the single-family homes, one of the bigger factors to consider though, as you look into the next year as you look into the very high multi-family stars that we’ve had in 2023, we do see that as a helpful tailwind for us as you have a single-family via higher percentage of the overall starts. That should be helpful for us as we go into next year and look at the new construction portion of our business that should be constructive for us or helpful for us.
Unidentified Analyst: Understood. I’ll pass it on.
Christopher Ball : Thanks Chris.
Operator: Thank you. The next question is coming from Steven Ramsey of Thompson Research Group. Please go ahead.
Steven Ramsey: Hi, good morning. On Fleetwood’s, strong margin profile, do you consider that a normalized level the 2024 outlook for Fleetwood, is that a baseline to build off of? And then on the growth plans for that company, do you see that more in wholesale or retail? Just any color on where you intend to take that business over the next couple of years?
Russ Tiejema : Hey Steven. This is Russ. Good morning. Maybe I’ll take the first part of that, give you a little bit of perspective on the margin profile and the trajectory for the business and then Howard or Chris could comment on growth opportunities for it. First of all, if you step back and look at Fleetwood over the last several years, the business has grown really nicely from 2019 to 2022, their top line grew to CAGR and to mid-teens. And they grew their margins, their EBITDA margins that is from mid-teens to above 20% over that period. Now they’ve had a really, particularly strong year in 2023, just because they’ve built up some backlog, due to some supply constraints in 2022 that they were able to realize in 2023. So, if you were to look at their margin profile in the last 12 months period, it was actually approaching a 30% range.
We don’t think that that’s a normalized level necessarily. There’s clearly some volume leverage in there. But they’ve also been very effective at taking price to the market in late 2022 that’s continues to read through. And that’s in line with pricing some of their product lines and lying with the elite luxury market that they serve. So that’s what’s informing our view that as we look into 2024, that revenue in – call it the 150 range and a low 20% EBITDA margin is probably a realistic near-term outlook for the business. But it’s a really healthy platform from which we would expect further growth from there.
Christopher Ball : And Steven, this is Chris. I’ll take the second part of question around where the growth comes from as we look forward on that business. First off, Fleetwood does participate in one of the top trends in our industry, which is a indoor, outdoor living. Howard referenced it when he covered that beautiful pictures that shows the type of solutions you can get with the Fleetwood products that with their door products and with their overall systems around the home. So it’s very much on trend for what homeowners are looking for. The second piece is, the product portfolio and offerings that has include leading edge designs with a low profile edge with the probably edge product that they just recently launched. So, very much kind of on the on the cutting edge of what architects are looking for and what builders are looking for.
And then the third piece you asked around, whether it was kind of a retail or wholesale. We would go into market through a group of exclusive distributors that really partner with them on addressing the market needs and making sure they’re out there. This is going after the builders who are having homeowners designing products that fit what’s Fleetwood is bringing to the market. So, the growth comes not just from continuing those partnerships with those dealers, but also looking regionally as we go and expand beyond the West Coast where the majority of the volume is, we think there’s a lot of fast-growing housing markets that again can benefit from those indoor/outdoor living trends that have a need for these products and then also are underpenetrated right now from a Fleetwood dealer standpoint.
Steven Ramsey: That’s great. And then, thinking about the combination or just the position, maybe of shelf space gains that you may have gotten in the retail or wholesale channel this year, combined with most channels running light through this year given slower volume. Curious just kind of on those two dynamics now and where you see that benefiting you in 2024 even if it’s a continued challenged year?
Christopher Ball : Yes, Steven we had to answer that. This is Chris again. As you really look at the places where we’ve looked at incremental distribution opportunities and going after some of the places where these life and living needs can be solved, our focus – if you go back to our strategy and the three pillars, the product leadership and reliable supply foundations have opened up new opportunities for us. But it also is giving the chance with the existing partners, they know what to talk about, how we solve the needs and how we can do things like the performance door system national rollout. And ultimately, then winning the sale with how we capture that demand through the end-markets and through the channel. And so, when you, when you look at both the wholesale and retail sides of our business, the joint business planning approach that we’re taking with all of our customers is really the way that we’re activating that.
And I’ve used the proof points of the vendor of the year at both Home Depot and Lowe’s as examples of how we’re really going to be able to capture more of that demand, fill the demand through the market with our product leadership and win the sale and ultimately benefit both our channel partners, as well as homeowners in the end.
Steven Ramsey: Great. Thank you.
Christopher Ball : Thanks, Steven.
Operator: Thank you. The next question is coming from Joe Ahlersmeyer of Deutsche Bank. Please go ahead.
Joseph Ahlersmeyer: Hey, everybody. How are you doing?
Howard Heckes : Hey Joe. Good morning.
Russ Tiejema: Good morning.
