Laurie Hough: Dan, yes, in the 26%, 27% range, I would say probably on the lower side of that range given the three new factories starting out.
Operator: Our next question is from Greg Palm with Craig-Hallum Capital Group.
Greg Palm: I wanted to first follow-up on the margin discussion. It’s pretty impressive in light of production volumes being down as much as they were that, your ability to maintain pretty elevated margins. So I guess, as a follow-up to some of your prepared comments, anything sort of one-time in the quarter, whether that was just the benefit of lower raw material costs or something else that we should be aware of? And then more importantly, as we kind of think ahead, maybe you can just remind us about some of the structural improvements you made to the business where even if production volumes don’t pick up like we expect, maybe — you’re still able to sort of maintain this much, much higher than historical level of margins?
Laurie Hough: Yes, so not really anything unusual in this quarter’s results, we did start to see a couple of things happening. And I think are going to continue more strongly in the fourth quarter, and that would be the elimination of or reduction of our material surcharges in the units that are finally coming through production and then also the shifting of the product mix to smaller units with less features and options in order for the consumer to hit that monthly payment that they need with the higher interest rates. So where we probably saw just a piece of that this quarter, we’re going to see the vast majority of next quarter’s product having those implications. And then as I mentioned, we’re bringing on 3 new factories over the next probably 4 quarters.
And so that’s going to impact margins somewhat. So those 2 — sorry, I forgot the second part of your question. Oh, the structural changes. The structural changes are primarily streamlining of the product offering and kind of taking a campus approach to that as well. So not only are we simplifying the floor plans and options that we’re producing and making it more production-friendly, but we’re also on campuses that are and production facilities that are close to one another, streamlining the production of similar products to make it easier for the direct labor workforce to build.
Greg Palm: And do you feel like there’s still room for further improvements on the product simplification area. And then it sounds like maybe you’re accelerating your increase in some of those investments in automation, I’m guessing that can also have some sort of benefit to margins at some point going forward, right?
Laurie Hough: Yes, so we have certainly room to still go as far as just the general simplification of product offering and streamlining of that product offering. I’ll let Mark speak to the automation.
Mark Yost: Yes, Greg, I think we’re probably about halfway through that streamlining of product. As far as automation, I mentioned on the call that we have — we’re dedicating certain facilities towards R&D and innovation. So — on the call, I mentioned we’re opening up our Decatur, Indiana facility, which will produce customer products, but it will be kind of an — automation hub for the company, kind of an R&D center for the company in part, along with we’ve got some other campuses we’re looking at doing that as well. So automation is a different step level change for the company in the future. The innovation that we can see from automation is actually kind of mind-blowing to be very honest with you. It will really transform housing to a whole different level in the country and we’ll make an affordable home — a quality affordable home much more attainable for the general population in the future.
