And so if anything, we had a lot of these things that we’ve reviewed and maybe kind of on the shelf and now we’re able to begin to move the ball forward in a more – at a higher level of velocity and speed. And that’s why I think the team is excited about being able to take those opportunities. And then, of course, we’re going to share them with you as each one of those comes along.
Ryan Merkel: Okay, thanks. Pass it on.
Jay Geldmacher: Thanks Ryan.
Operator: Your next question comes from the line of Amit Daryanani with Evercore ISI. Your line is open.
Michael Fisher: Hey, guys. It’s Michael Fisher on for Amit. So I was curious, just quick on the gross margin outside in the P&S business, is this primarily driven by the portfolio optimization stuff you guys talked about on the last couple of questions? Or is there any other dynamics to play there?
Tony Trunzo: It’s driven much more so by the progress that we’ve made in terms of – first of all, I guess if you look at the trajectory of the last several quarters, we made meaningful progress on price, but we were also facing significant inflationary impacts and components. We had significant broker buys. Freight rates were very high, all those kinds of things. And we’ve been able to work through all of them and those costs have normalized. We’ve also made significant progress in terms of labor efficiency. And these things we talked about it when this all unfolded, these kinds of things, we really felt like our progress was being masked for some number of quarters. I think what you’re seeing is that the progress that we have made is being revealed a little bit in terms of better margin.
I have to say I can’t overemphasize, from my perspective, the impressive performance of the business on a gross margin line this quarter given the volumes that they’re facing, I mean, 2.5 percentage points delta in gross margin with lower volume, it says a lot about the progress that we have made. Like I said, that hadn’t really been clear to investors that now I think you’re starting to see.
Jay Geldmacher: Yes, I would agree.
Michael Fisher: Makes sense. And then I think you guys caught up your success with higher content for the new home market and just, I think, overall in the homebuilder channel, things are going a little bit better for you guys. I’m just wondering if you can dig into that a little bit and maybe talk about how big the homebuilder channel is versus kind of the rest of the business?
Tony Trunzo: Well, the homebuilder channel for us is a fifth to a quarter of the business overall. We’re much more heavily indexed to the repair remodel and existing home sales dynamics. But the progress in R&C is it really comes from two things. One is our ability to add more relationships. I mean the work that our BD team has done in building out relationships with more and more builders and getting into their homes has been a significant driver. And then the other we referenced it, it’s really been BRK, which is a brand we got from First Alert in the smoke and CO area, that we’ve really worked hard to build out more access to that builder channel, and we’ve seen it.
Jay Geldmacher: Right, and that comes back to the increased content that we’re continuing to drive, and we have a lot more opportunity on a further content in there. And then back to what Tony said on the first piece, which I mentioned earlier, and that is the expansion of new builders into the R&C. And from my chair, as we expand that number of customers for R&C, as the markets come back, and with the increased content we’re going to really be able to – we will benefit by that.
Michael Fisher: Yes, great. That makes sense. Thanks for taking my questions.
Tony Trunzo: Thanks Mike.
Jay Geldmacher: Thank you.
