Operator: Thank you. The next question is from Tony Bancroft with Gabelli Funds. Please go ahead.
Tony Bancroft: Thanks for taking my question. Great job, gents on the quarter. Regarding the plastics, maybe just step up — climbing to the 30,000 feet and just sort of long-term view on it. With these — with regulations that have been implemented on plastics, like the ones that one and two effect in Canada, I maybe assume as it goes to Canada and California goes the rest. How do you see those maybe stricter regulations and what can be made and thrown out versus the need to be recycled and the restrictions on that, How is that impact in the long-term your polymer centers? And maybe how it changes producer behavior? And what they’ll produce. And how does that maybe impact your long-term net return on investment for those facilities?
Jon Vander Ark: Yes. Listen [Indiscernible] companies for a long time have talked about minimum content goals. I think when the regulatory environment came online with California and the other states have followed, that’s really what’s driven different activity in the marketplace. So we had pretty clear expectations for returns, when we built the Las Vegas Polymer Center, as we always do, we’re going to be good stewards of capital. And we’ve certainly exceeded our expectations there. And I think there’s more upward opportunity as we go, we could sell up that facility five times over. And the same will be true in Indianapolis and the other centers, the market is structurally short supplied of recycled PET, and we’ve got the unique capability of collecting something five million times a day, right?
And so we can be the anchor tenant of our own facility on that front. So overtime, I think we’ll think about innovating on collection. So how do we get more PET and more olefins into the system? And then that might spark the opportunity to create fifth or sixth polymer center, and we’ll take that on as we go.
Tony Bancroft: Great answers. Thanks so much. Great job.
Operator: Thank you. The next question is from Tobey Sommer with Truist Securities. Please go ahead.
Tobey Sommer: Thanks. A question for you on the hazardous side, how is sort of pipeline and overall demand? And do you think it’s sufficient to easily absorb new incinerator capacity coming towards the end of this calendar year?
Jon Vander Ark: Yes. Pipeline is strong. Its activity, like I said, was certainly weather-related impact in the first quarter. Pipeline is strong. We got a number of attractive things, again, both on recurring streams and some event work in the pipeline. The market is structurally short supplied on incineration. And even with the new capacity coming online, I think it’s likely to be tight for the foreseeable future on that front. And then you think about any kind of medium to even a bearish case on PFAS is going to push more volume in liquid side into incineration. So we see that, again, market being tight supplied for the foreseeable future.
Tobey Sommer: Appreciate that. And then, if I could ask a question on the expense side beyond wages. In terms of hiring, training and the safety events that tend to happen more frequently with new employees, are those other elements around direct compensation also sort of seeing less growth in sort of a benefit to margins this year?
Jon Vander Ark: Yes. We’re seeing certainly great tracking. We talked about safety numbers. We talked about Turnover. We talked about NPS. And listen, all these things are connected. We’ve done this a long time. And we know that when you are fully staffed and you’ve got trained and tenure drivers, they provide great customer service, right? It lowers your risk costs. Those customers are happy with the product offering? And they’re willing to pay more and stay longer. So, we’re certainly seeing some of the benefits of reduced] turnover as well.
Operator: Thank you. The next question is from James Schumm with TD Cowen. Please go ahead.
James Schumm: Hi. Thanks. Good afternoon. Just curious, if you guys are seeing any trends in the residential business with respect to competition or pricing?
Jon Vander Ark: Yes. Listen, I think that, that’s — we’ve talked about this at length. That’s over the last decade as the business has improved and transformed lots of ways. That’s one of the parts of the business that hasn’t made as much progress. And we have a very strong belief that we need to raise returns in that part of the business. And on balance, I’d say, competitive conduct is improving in terms of people getting a fair return for the work they do, it still has room to improve. And we’re going to be disciplined in that space, and we’re not going to do work for low returns. And if the city wants a different provider who might be cheaper, but doesn’t provide as much benefit, so be it, we’re going to put our — allocate our capital to places where we get a very attractive return.
James Schumm: Got it. Thanks for that. And then I’m assuming turnover is trending lower, but did you give any specifics there? And what’s your target for turnover if you have one, and apologies if I missed it.
Jon Vander Ark: No problem. We don’t talk about mid sub-20%. And there’s a seasonal curve to turn over, obviously, again, it goes up in Q2 and Q3, just like volumes do and comes down in Q4 and Q1 running the business sub 20%, right, is getting very attractive in terms of all the operating metrics I talked about earlier, including the financial performance of the business.
James Schumm: Okay. Thank you very much.
Operator: Thank you. The next question is from Stephanie Moore with Jefferies. Please go ahead.
Unidentified Analyst: Hello. This is [indiscernible] on for Stephanie Moore. I guess just on the M&A side, do you expect this year to be above average M&A? We’ve heard some of other competitors, say, M&A this year may be a little bit more active. And I guess in terms of your verticals, which verticals would you look to see — would you look and made the biggest gains in M&A? Thank you.
