Ken Zener: Thank you.
Operator: Thank you. Our next question comes from the line of Adam Baumgarten with Zelman. Please proceed with your question.
Adam Baumgarten: Hey good morning everyone. You mentioned that the [Indiscernible] insulation price increase was pushed out. Do you expect that to still be kind of having realized, just given the uptick in demand? Or is that potentially at risk of not being realized at least from the manufacturers?
Robert Buck: Yes, morning Adam, it’s Robert. I think a little hard to say and that has been pushed out and the traction wasn’t as much in September. But given its tightened up here in October, — and the — again, the maintenance that we talked about earlier, I think it’s probably got some better traction coming. And as we’ve always talked about before, we stay close to the manufacturers relative to that and have ongoing discussions.
Adam Baumgarten: Okay, got it. That’s helpful. And then just on SPI, I mean it’s been a few months now since you guys announced the deal. Just any incremental benefits that you’re starting to see in the business as you kind of get under the hood here?
Robert Buck: What we would say there is as we’ve gotten closer with the team there and just really, obviously, what we can do is planning, integration and how that would look on the other side, our confidence level just continues to rise and strengthen. I mean, it’s a great team there. Great operations team as well as throughout the business, including the leadership team there. So, I think our confidence continues to grow as we talk about integration, what that looks like, things about systems leverage, tools, those types of things. So I think you heard it in our prepared remarks, our confidence continues to strengthen there with that acquisition.
Adam Baumgarten: Great. Thanks a lot.
Operator: Thank you. Our next question comes from the line of Phil Ng with Jefferies. Please proceed with your question.
Philip Ng: Hey guys. I have a quick question on how we should think about the volume cadence through this year going to early next year. You mentioned, Robert, that single-family — the pickup in single-family starts kind of started flowing through later in the quarter. So, have volumes effectively bottomed out here, and maybe we see an inflection by early next year? And then on the multifamily side, I mean we could all appreciate, starts at an all-time high right now. But similar to single-family this year, there’s a lag dynamic on completion. So, as it relates to completions on the multi-family side, what kind of impact should we expect on demand for you next year, just because there’s certainly some concerns around multi-family right now?
Robert Kuhns: Yes. So, this is Rob. So on the volume side of things, as you look at the guidance we’ve put out there, I’d say if you back into it from a same-branch perspective, we’re looking at kind of flattish fourth quarter there. And that’s probably with flattish volume, flattish price on a year-over-year basis. So some improvement on the single-family side, but also the seasonality that usually comes in the fourth quarter. We’re not anticipating a significant jump up there. And then to your point, as we move into next year, we’re definitely cautiously optimistic that single-family will continue to improve as it has. Obviously, we’ve got to see how things play out with interest rates and the impacts of that. But we’re cautiously optimistic there. And the backlog we have on multifamily, we definitely feel it’s going to last us into next year. How far that’s going to last into next year, we’ll make that part of our guide when we talk to you in February.
Philip Ng: Okay. And on pricing, on your distribution side of things, pricing was down a little bit, do you see more risk of slippage from here? Any impact — I mean, it didn’t impact your margins in a meaningful way, but in any way if you think about the impact there? And any color where you’re seeing more pressure, I guess, perhaps in spray versus fiberglass?
Robert Kuhns: Yes, Phil, this is Rob. So, I’d say the pressure we saw there in the quarter was primarily driven by spray foam and gutters. And so as we move into Q4, I think I don’t anticipate it getting significantly worse from where we are. But it’s something certainly we’ll keep our eye on. And as you mentioned, we’re going to do our best to maintain our margins and recover on the material side, anything we give up on the price side.
Philip Ng: Okay. Thank you. Appreciate it.
Operator: Thank you. Our next question comes from the line of Noah Merkousko with Stephens. Please proceed with your question.
Noah Merkousko: Good morning and thanks for taking my questions. So, first, I know there’s been a lot of talk about price here, but you’ve got pricing moving in two different directions on these segments on installation versus distribution. I guess just going forward, should we continue to expect some higher — I guess, a greater amount of pricing power in the Installation segment that even if we do see material availability increase, that the installation pricing should outperform compared to distribution?
Robert Buck: Yes, good morning Noah. It’s Robert. So, as you look at that, obviously, Rob mentioned that we saw some pressure on the distribution side, spray foam gutters and some fiberglass as well in the quarter. And I think about the install side, I would — do know what happened there more to productivity than our pricing. Again, where the team just continue to work the labor efficiency, sales productivity. And again, we talked about some of the tools that we put in place on that side of the business. So, I think you’ll continue to see the team work, operational improvements and efficiencies in the business, but I have noted more to that, now we’re on the pricing side. And I think we’ll see what happens relative to the demand curve here. But as Rob mentioned, we see material getting tighter here in the quarter, and we’ll see how that plays out for the rest of the year and heading into 2024.
Robert Kuhns: Noah, and this is Rob. I’d just add to that. I mean, just historically speaking, price tends to be a little stickier on the install side than it is on the distribution side of things.
Noah Merkousko: Got it. That’s helpful. And then on my follow-up, leverage here, really low, below one turn. How are you thinking about balancing capital allocation towards M&A versus share repurchases?
Robert Kuhns: Yes, Noah, this is Rob. So I mean our strategy there really is unchanged, I’d say. You layer in SPI, our net debt this quarter on a pro forma basis would have been about 1.59 times, which is right in that targeted range of 1 to 2 that we’re comfortable in. So, while we’re a little bit lower where we landed for the quarter, I think with SPI sitting just down the road from us here, we see that definitely going higher. And we’re going to continue to focus on capital allocation. Our strategy there is to prioritize M&A and then to continue to evaluate stock buybacks, right? And obviously, at our evaluation today, we think that’s an attractive opportunity as well. So we’ll continue to evaluate both, just like we have in the past.
