Unidentified Analyst: No, absolutely. That’s incredibly helpful, Scott and a much better answer than it was question. So thank you. I’ll switch gears a little bit. The balance sheet is in good shape. You called out ample capacity to pursue the strategic priorities. Can you maybe just provide a little color on what the M&A landscape looks like? Is there anything out there that has you excited right now?
John Hall: I mean, there’s always properties that we’re constantly evaluating our pipeline and, I would say, our pipeline is fulsome right now. I think that the opportunities that you see where the investment dollars are going probably over the next 6 to 8 years offers some adjacencies for the Mueller line valves or bolt-ons that perhaps we don’t offer today that we think will gain money. I would say that if you look at the conversation in the country around what water retention looks like especially on the West Coast, you see the water crisis around Lake Mead, around these declining I think there’s going to be massive amounts of investment needed to move water from where we have plentiful water to the areas where we seem to be moving and getting population concentrations.
So all of those things, I think, drive and feed our acquisition pipeline. And we continue to be fairly bullish on our ability to get some of that done. But nothing is in the next quarter, that’s for sure.
Operator: The next question in the queue is from Brian Lee with Goldman Sachs.
Miguel De Jesus: This is Miguel on for Brian. We just had one question. I wanted to touch on the channel inventory dynamic again. Could you go into more detail possibly on the — on that dynamic that you’re seeing. Is there a way that you’ve been able to estimate how much is out there for the key products that you’re monitoring, maybe in terms of number of weeks or months and to what level the channel is trying to get down to?
John Hall: Yes, it’s a hard question to answer because I think if you were to ask the channel, they would say a lot of the inventory is committed inventory. And so if you look at what’s happened with price, so you take your baseline going in and you add — I’m making this up, don’t take this by 30% to 40% of the increase in inventory that you’ve seen in the channel is just price driven. So units are constant. And the balance is the increase as a result of the inflationary pressures that we see in price increases taken in the water space. So you say that’s 30% to 40% inflation. Then the balance of, let’s call it, ballpark, 100% increase is units. That 60% or 65% of increase that’s in units, there’s a huge portion of that, that is committed.
But waiting on pipe or waiting on labor or waiting on — and — but the — when the distributor took the order for that contractor, for that municipality, it was earmarked. And so there’s a fairly high backlog now measured in weeks of what’s just logistics backlog. So the speculative inventory would be the balance, right? Let’s call it 15%, 20% of channel inventories are on the speculative basis. I would expect that that’s the piece that would get targeted quickly. And so I think that that’s the at-risk. The other part for the channel to add value, they have to serve those contractors and those municipality jobs. Those are almost always delivered a job site. They’re not going from the distributors’ warehouse to some municipality work center and then being loaded on the truck again.
