Gary Prestopino: Okay.
Nicholas Pinchuk: Actually you are looking over a year we had you know kind of a – what 6,7,5,6 cents impact for taxes year over year each quarter. Negative impact. Yeah, so we still were up 8.9% even with the $0.37 even when that $0.06 impact.
Gary Prestopino: Okay. Thank you.
Operator: Thank you. And our next question today comes from David McGregor with Longbow Research. Please go ahead.
David McGregor: Yeah. Good morning, everyone.
Nicholas Pinchuk: Hi, David.
David McGregor: Hey, Nick. I just wanted to ask you about the UAW strikes and any potential impact or re precautionary decision across the business. You talked already about the dealership business and you characterized as being lumpy, but I’m wondering just maybe OEMs told you to hit the brakes on that. Well, they are sorting the strike issues and then there was any followed on the tool segment as well?
Nicholas Pinchuk: Yeah, that’s a complicated. Look, it’s hard to predict, of course, this is like shooting darts in the dark or something. But, look, I think I think this is the situation. First of all, I want to correct just a little bit. The dealership business itself was not down. The OEM programs were down some, but they were still at a relatively historically high levels even though they backed off a little bit, year-over-year. So we haven’t seen what I would call a significant pullback in the OEM programs at this point. Having said that, the OES, the UAW strike, I used to work for the auto companies themselves, and they are cash monsters, you know, they eat cash like mad and so it could happen as the strike goes on longer, you could see some diminishment in that business, in that particular business.
Now, when that would hit, I’m not so sure because, they might not cancel programs. They must just delay some or they may they may in fact cancel future programs. Not so clear how they would play out. But it is a possibility that that would happen. Regarding the dealerships themselves, I don’t necessarily – I think the effect on them is unknowable because sometimes if they don’t get new cars, they just turn more attention to repair and parts. And so this is good news for us. Sometimes they pull in the back down the hatches and reduce. But generally I think they tend to look at more at repair and parts if they don’t get the new cars and that’s not so bad. So I see that as being the two possibilities playing out.
David McGregor: Right. Okay, thanks for that. And then, just back to your earlier observation with the SFC order book was up 5% to mid-single-digit.
Nicholas Pinchuk: I think it’s 5, to kind of mid-single.
David McGregor: No you said mid-single.
Nicholas Pinchuk: Right.
David McGregor: Right. Single-digit minus – I apologize.
Nicholas Pinchuk: Sure.
David McGregor: I’m just trying to sort of reconcile that with some of the capacity challenges you’re facing which are clearly improving, but it sound like they’ll still be somewhat of an issue in 4Q. Do you see more of the fulfillment on that order growth being channeled into sort of 4Q and maybe on a year over basis than what you would seen a year ago when there wasn’t that kind of an impediment in place? And there was a consequent you might see a little bit of incremental growth from that concentration in 4Q?
Nicholas Pinchuk: I guess. I don’t know, I think I’m not quite sure I understood exactly the import of your question, David. But, but the thing is, the way I see it is, the capacity is getting better. Even if you have the building up, you can start putting in the machines there’s a ramp up period. You don’t have this worse and so you kind of get this, it starts to help you. The first the first product that comes out is the help but it’s not so clear how much of a help will be. I think, you’ll still see us in a fourth quarter trying to stick handle around the capacity issues and that’s part of the thing that’s here. But that’s stick handling will get more – less complex and therefore we should be able to take more advantage of the orders.
But the timelines, the time constants associated with that are always pretty hard to predict, the dependent on your ability to wrap up, which we have a lot of faith in and it is dependent on the nature of the orders applied against those. I would simply say that looking forward we feel like we’re in a better position than looking recently backwards.
David McGregor: And then – maybe this is a questions for Aldo, but are you able to talk about just, the impact on margins from the capacity constraints and incremental costs associated with that in 3Q?
Aldo Pagliari : No, the overall margin performance is pretty solid as you saw across the board. Sure, there are incremental cost and expediting expenses and elements of over time of overtime having to be expended. But at the same time, we with the supply chain improvements that have occurred over the past 12 months or so, we have more resources to turn our attention to RCI initiatives. So, David, well, there is a lot of challenge in any quarter we expect to rise the occasion and try to offset those incremental costs. But yes, there will be some incremental cost involved, but the tools group and the other segments are able to offset that.
Nicholas Pinchuk: I don’t know I had a chime in here though. In my book, I think over a hundred basis points margin improvement in every segment – I don’t know, sounds gangbusters to me. Not so. And so, it sounds pretty good to me. So I think – I think it should be helped going forward, but I’m not sure where that will lay out. We anticipate like, I say we expect to improve margins all the time.
David McGregor: Great. Thanks gentlemen.
Nicholas Pinchuk: Sure.
Operator: Thank you. And our next question today comes from Christopher Glenn with Oppenheimer. Please go ahead.
Christopher Glenn: Hey, thanks. Good morning all. Curious Nick if you could elaborate on your comments about expand adding capabilities in the critical industry space, what types of activities? What’s the scale? What exactly are you chasing so to speak?
