Robert Buck: Hey, Phil. This is Robert. I’ll take the first part. So, yeah, I mean, definitely, the pipeline looks good from that perspective. Obviously, we were waiting to see if we got the SPI across the finish line. And so now that we’ve moved forward from that, made our decision to remain disciplined on the M&A front, then we’ll be — moving forward over some of our other opportunities that we have. So, yeah, so feel good about the pipeline, really across all three end segments, including the C&I side as well.
Robert Kuhns: Yeah, Phil, and this is Rob. In terms of buybacks, like I said earlier, we’re not going to be able to give any guidance exactly of how that’s going to play out. We’re going to obviously see how the M&A pipeline flows, prioritize that. But as you point out, we’re sitting in a very healthy balance sheet position today. So, we’ll see how many of these M&A deals we get to the finish line, and we’ll certainly balance that with the buybacks moving forward. Like we’ve talked about in the past, we think net debt leverage somewhere in the one to two is probably the right type number, and we’re obviously at 0.42 at the end of this quarter. We were anticipating using a significant portion of that cash on the SPI deal. So, obviously, we’re pivoting from that, and hence the announcement of the billion-dollar authorization.
Philip Ng: But Rob, I guess, if there’s no deals, the game plan wouldn’t be to build excess cash, right? The plan would probably still stay within that leverage ratio, or maybe closer to the low end. Am I thinking about it right?
Robert Kuhns: Yeah. I mean, I think if we spent the majority of that, we’ll probably still end up on the low end of our — of that one to two right now.
Philip Ng: Okay. All right, that’s helpful. And then from a material availability standpoint, a little surprise how tight it is. I know it’s tight on allocation, I’m a little surprised on your some limitations on getting material. Did I hear you correctly, Robert, that the Knauf plan is coming on sometime in 3Q if that was supposed to come on July? So that might create even tighter environment. Certainly, there’s price increases out there for fiberglass and mineral, but rates are high for longer now. So, how are you thinking about your ability to kind of push this through, and how do you think about supply demand overall?
Robert Buck: Yes. I think that was a good question. So, the plan is coming up and call it June, July as far as winter starts up. If I may get running — if you will at maybe a steady pace, you’re probably talking definitely into Q3. And as you think about materials we talked about, there’s still maintenance to be done in the industry. And we’ve seen some unplanned downtime, which gives you a little bit of Knauf for concern. So that’s why we think materials stays tight the remainder of this year. And then if you take the single-family starts, which we think even if you just take the order information from the builders, I think we think single-family will be strong the back half of the year. So, we think there’s good possibility of protraction there in material.
And then we’ll see how 2025 plays out here. Those lines should be up full production by then. And then we’ll see what’s happening from a start’s perspective as well. And some of this code piece of it that we talk about, you’ll see some central pounds coming into play there relative to capacity needs. So, should line up well here for the back half of the year, but let’s keep playing the allocation piece as well.
Philip Ng: Sorry to sneak this one in, Robert. I mean, you were talking about how code changes would be a good guy for demand. Materials clearly tight. Single-family should pick up in the back half. Are you hearing anything from your suppliers in terms of potentially adding more capacity that could potentially be a relief next year? I know Owens Corning is taking that are hard to look at any long-term plans on the capacity front. But any incremental uplift that you see perhaps next year at the head of Knauf ramping up more fully and perhaps from a maintenance standpoint, things being a little better spot.
Robert Buck: Yeah. I think maybe two things I’ll say, Phil. I think one, people are evaluating, that’s for sure, but I think people are evaluating multiple insulating products whenever they’re doing the evaluation if that makes sense.
Philip Ng: Okay. Thank you.
Robert Buck: Thank you.
Operator: Thank you. Our next question comes from the line of Trey Grooms with Stephens Inc. Please proceed with your question.
Sid Ramesh: Hey, guys. This is Sid Ramesh on for Trey Grooms. Thanks for taking my question. Could you maybe talk about the trends you saw in April and into May on the different end markets? Anything noticeable with maybe rates taking a little higher? Sounds like single families improving, but any changes on the commercial or multifamily side?
Robert Kuhns: Yeah. I’d say, Sid, for us, no major changes. April came in about as we expected. And just like I think Robert mentioned in his opening comments, we saw March was the first month. We saw single-family with year-over-year sales growth. First time we’d seen that in a year. April, we saw that again. So, we are seeing some of the improvement from the improved starts on the single-family side, which is definitely a positive sign as we move forward here.
Sid Ramesh: Got it. And then, quickly on the mid-single digit commercial growth number, how should we think about R&R and new kind of assumed in that number? We’ve been hearing maybe some weakness on the new construction side. So, any color would be helpful?
Robert Kuhns: Yeah. I think, I mean, like we said in the past, I mean the R&R within our Specialty Distribution business, which is 60% commercial. It’s about a quarter of that revenue. Robert — hopefully the comments Robert made in his script today talking about that LNG facility in Louisiana helps kind of drive home the scale of what we’re talking about with some of those types of jobs. I mean, that’s a job where our total revenue over a couple of years is going to be over $30 million. And then you think about it, you got that recurring revenue coming after that, you’re going to have ongoing maintenance and repair that happens throughout the life. And then you’re going to have every five years or so a complete tear down and replacement of that.
So, while we’re watching the commercial industrial side of things closely too, I think, we haven’t seen any slowdown in our bid rates, a lot of the work that’s going on with some of these mega projects, whether it be LNG, whether it be chip manufacturing, there are heavy insulation needs for those projects that are going on, which should be a tailwind for our business as we move forward.
Sid Ramesh: Great. Appreciate the color, guys. Thanks.
Operator: Thank you. And our next question comes from the line of Jeffrey Stevenson with Loop Capital Markets. Please proceed with your question.
Jeffrey Stevenson: Hi. Thanks for taking my questions today and congrats on the nice quarter.
Robert Buck: Thanks, Jeff.
