Santiago Giraldo : Since earlier in the year, we had said that on a quarterly basis the residential revenues were going to be somewhat stable throughout the year and you so that in Q3, as well. So based on what we have today, I would not expect anything to different than what you saw in Q3 Sam. I would say that it’s going to be somewhat stable with a pickup more into 2024 once some of the vinyl product is actually already getting invoiced. As you heard earlier, that is already in production probably starting next week with the first order delivered by year end. So you don’t get to capture necessarily the benefit of that in Q4. But you will start capturing that in Q1 and Q2 and so on.
Sam Darkatsh: Okay. Very helpful. Thank you gentlemen.
Santiago Giraldo : Have a good day.
Jose Manuel Daes : Thank you.
Operator: Our next question comes from Tim Wojs with Baird. Please proceed.
Tim Wojs: Hey guys. Good morning. Maybe just to make sure I’m totally clear on the EBITDA guide. So, I think the midpoint of your prior guide versus the midpoint of this guide is maybe about $24 million lower. So you’ve got about $14 million from the revaluation that hit the gross margins in Q4 about $8 million to $9 million or so from the project push outs and then a couple million dollars from some higher installation. So those are kind of a three pieces to kind of bridge that gap.
Chris Daes : Are you – sorry. Tim, are you talking about versus the previous guidance that we gave during Q2?
Tim Wojs: Yeah, so your prior near point would have been 328. Now, it’s 304. And so I just want to make sure I understand, – I completely understand that the movie pieces between those items.
Chris Daes : Yeah. So, not all of it is from Q4 obviously, because the Q3 results came below that guidance that we gave up after Q2, as well, right? So you, you have to take out the below previous guidance we sold that was mainly resulting from that inventory markup. That is non-catch, right? So, if you take out the effect of that, the actual difference between the new guidance and the previous guidance is about $12 million, $13 million. And as I was just mentioning, when Sam asked the question, if you do the math on an operating leverage for Q4, taking $25 million, $30 million of revenues being pushed out, you get to about $9 million of that $12 million, $13 million. And then the remaining is more related to mix than anything else.
Because some of that revenue, – if you look at the revenue, the revenue is not coming down as much as the EBITDA, right? But that’s because some revenue from mix, some revenue from installation is actually going to hit Q4. So it’s, it’s essentially about $9 million from operating leverage and $3 million from mix. If you do the math, the midpoint now is 63 the previous midpoint was about 75 for Q4, right? I mean, I think you’re looking at it for the full second, half of the year, which you have to check out the Q3 mix.
Tim Wojs: Yes, exactly. Okay. Okay, perfect. And then, these are both timing-related items is what it’s kind of what I’m getting at.
Jose Manuel Daes : Well, since we always carry a lot of inventory. That has been our tradition. That’s why during COVID we’ve been softer to invoice because we had all supplies in-house for three, four months. Obviously we bought – we had inventory at 4800 pesos and the peso came down to 4,000. So that’s 20% revaluation just then and we’re still eating some of that higher price inventory. But this is all obviously, by year end, will all be clean out and will be at the current rate which hasn’t moved much in the last 45 days, which is good. We actually believe that it will rebound and go back up. But so far, we will clean it up by year end. The latest.
Santiago Giraldo : Yes, just to follow-up, Tim. It is a timing issue obviously we wanted to highlight that the inventory effect is completely non-cash, because you purchase the inventories in dollars and you sell them in dollars. It’s just a function of the functional currency being the Colombian peso, right? So, those inventories that were purchased during Q2 are essentially all having been sold already, right? So, you shouldn’t have any more of that in Q4. And the impact on the operating leverage is a timing issue, as well, because those are projects that are up and going already. They’re not getting cancellations. It’s just revenues that are being pushed out into ‘24. So it’s a timing issue as you said.
Tim Wojs: Okay. Okay. Very good. And then just the last piece on the market, it does sound like you guys are a little bit more constructive on the market this quarter than maybe you were last quarter. Is that just because of some of the financing starting to roll through at banks? And are you actually seeing better bidding? So I guess, just kind of curious how you see the market today than maybe three months ago?
Jose Manuel Daes : The prices have been good for us. The problem that we had last quarter was less invoicing because of the 30 million, I mentioned postponed to first quarter of next year and second quarter. And then, but on the pricing and then the peso revaluation. But the pricing has been steady. I don’t see other than a small competition lowering the prices, as simply the biggest comparison is PGP and the subsidiaries they haven’t done so. So we have a steady pricing and next year and we have a lower cost in aluminum. So everything should be par again next year.
Tim Wojs: Okay. Okay. Sounds good. Thank you, guys.
Santiago Giraldo : Thank you. Tim.
Operator: Our next question comes from Stanley Elliott with Stifel. Please proceed.
Stanley Elliott: Hey, good morning everyone. Thank you all for the question. I apologize if it’s got asked before I have to bounce around a little bit. Could you help us with the build on the top-line for the double-digit revenue growth into next year for starters?
Santiago Giraldo : Are you talking about the breakdown as to how that’s composed Stan?
Stanley Elliott: Yeah, roughly just trying to get a sense for kind of what are going to be the main drivers to get to that?
Santiago Giraldo : Well, if you use the math on the backlog that we reported, that typically that gets executed over the following 18 months, right. And that’s what we wanted to highlight that graph on our on our latest slide to show that the backlog is really sticky and obviously it gets executed, right? So, if you do the math and just take about two-thirds of that, you come up with what the commercial side of things should be for 2024, right? And that gives you a lot of visibility. And on the other hand, I’ll let Jose to kind of reiterate the opportunity on the single-family residential side. But obviously, when you have these new vinyl products where we have no revenues this year and you have these showrooms now operational for 12 months where you also have no revenues in ’23. That provides confidence that achieving double-digit growth next year is very doable. I don’t know, Jose, if you want to add to that?
