Operator: The next question is from Walt Liptak with Seaport Research.
Walt Liptak: I wanted to go back to Deane’s question about the — where you commented about the forecasting and you said you had the internal forecast versus the sell-side forecast and that we were just — they were wrong. So the question is, I thought that the first half was going to be weaker and then the second half was going to be stronger. And so I guess the question is — so that this is helpful to everybody is, how are we doing on the second quarter like, seasonally, you typically have a pickup going into that spring selling season, are you expecting that? Are we going to see sort of a sequentially flat quarter? What are you thinking about?
John Hall: Okay. Well, it’s hard to get it. Gross margin expectations around Q2 is kind of how I — and I don’t want to get into giving quarterly guidance but I will say this in general. Look, I think our annual guidance implies year-over-year improvement in adjusted EBITDA margins of around, I don’t know, 70 basis points at the midpoint. I think it was driven by improvements in gross margins which are approximately 190 basis points with headwinds, I think, from the pension expense and higher total SG&A. And so you know that, let’s call it, 70 improvement. I think the inflation pressures and manufacturing performance headwinds will have to continue in Q2. We certainly are going to be dependent on the outsource. And I think we’re going to be dependent on third-party maintenance services indicator for all — certainly all of the quarter.
So, I think the timing issue with our capitalized variance and the inventory write-up associated with the inflation that took place believes that says that gross margins ought to be kind of flattish in Q2 with Q1. And then, you won’t start to see the step-up of improvement that will generate the leverage on the volume growth until you’re actually able to start impacting those 2 things. Does that help your model, Walt?
Walt Liptak: Yes, that does. And on the revenue piece for the quarter, the second quarter, I think what you’re saying is that you’ve got to — if you get that regular seasonal uptick, you’ve got to wait and see because you don’t know how the channel inventory is going to be. Is that fair?
John Hall: Yes. I think we have a big enough backlog that we should be able to hit our sales number. I’m not as concerned about that. It’s more concerned about the margin flow-through and getting the throughput up sequentially. So as I said in my comments, we had fewer days in gate valves in our Q1 because we took down the facility for an extended period of time versus the previous year so that we could do some and some other maintenance that needed to be done. And so we had fewer days in Q1. We expect that we’ll be able to get gate valve volumes back up in Q2. We expect improvement in throughput in Albertville for hydrants in Q2. We expect the continued improvement in throughput from Kimball and they’ve been quarter-on-quarter-on-quarter improving since we’ve opened them.
So pleased with that. So I think that’s really where you think about that implied improvement in adjusted EBITDA. We’re only going to get clawing back some of the inefficiency we had in manufacturing in Q2 but we still got the bulk of the heavy lifting to do in the second half which will only come when we remove be outsourced and we start producing meaningful pounds at the new foundry.
Walt Liptak: Okay. All right, great. I guess another one for me is last quarter, I think one of the big takeaways was that activist that you guys are working with. You didn’t comment on them at all. Are you still thinking about it the same way? Has anything changed?
