Bryan Fairbanks: We’ll provide a lot more detail on 2024 as we get into the end-of-the-year call and margin cadence. I would expect that we will see a stronger early buy as the channel recognizes that we need to ensure the appropriate amount of material is out there. But aside from that, really nothing else to provide at this point.
Operator: The next question comes from Ryan Merkel of William Blair. Please go ahead.
Ryan Merkel: Hey, everyone. Thanks for taking the questions.My first one, Bryan, is just you mentioned the positive response to the new decking products. How did you measure that? And then should we expect a bigger pop next year as you’re rolling that out in a bigger way?
Bryan Fairbanks: Yes. To answer your second question, yes, absolutely. It does take some time to get these products in the market. We launched two colors of our Lineage product line in I believe it was May of last year and then two additional colors in December of 2022. So we’ve seen that build as we’ve gone through the course of the year. And we expect to see that continue to build next year as more people get more familiar with the Transcend Lineage product line, the heat mitigating technology, the updated colors. So what — we’re calling it based off of what we’re actually seeing in the market. From a Signature perspective, we expect that will be more of a niche product. It’s designed to really hold on to that super premium buyer that’s looking for the aesthetics of the feel of that real tropical hardwood. So we are seeing that turn through the channel in the test markets that we’ve launched it into, and we will have a national rollout of that in the new year.
Ryan Merkel: Perfect. And then for my follow-up, I’m just getting asked about the risk of consumer financing again. Can you just refresh us on your thinking there and how — what percent of the consumer you think uses financing for your products?
Bryan Fairbanks: Consumer financing for deck projects is not extensively used. Data that we have in talking with our contractors, it’s less than 10% of the marketplace. It’s not something that we hear back from our contractors. And our contractors are not shy about asking us for selling tools to help them in the marketplace. It doesn’t even show up in the top 10 of things that they’re looking for, for selling tools along the way.
Operator: The next question comes from Joe Ahlersmeyer of Deutsche Bank. Please go ahead.
Joseph Ahlersmeyer: Hi, Joe. Hey, good afternoon, everybody. Thanks for taking the questions. I’m always looking at your finished good inventory, but I think this third quarter number is particularly important as we think about what actions people might take in the channel around pre-buy. And it’s $43 million, I think, on finished goods. That is far lower than last year, and it’s more in line with 2021. I’m just wondering how you’re planning, I guess, production in the fourth quarter to service even the guidance that you’ve put out, and then what you might do if the prebuy is actually a little bit stronger than you’re assuming. I just want to also to make sure that the number that you assume is pushed to 1Q hasn’t changed either.
Bryan Fairbanks: Yes, remember, last year, we pulled back our sales guidance significantly because of the need to reduce inventory in the channel. So we were building inventory and putting it on our balance sheet from that perspective. Whereas this year, it was a regular third quarter inventory, and to your point, looks more like a normal end of the third quarter where we finish with usually the lowest inventory for the year. As we go into the end of the year, we will be building inventory as we normally do during the fourth quarter, and we’ll use that in addition to our production to be able to service the early buy and then through the second quarter of next year.
Joseph Ahlersmeyer: And so thinking about the fourth quarter implied gross margin, that’s reflective probably of the production rate of 3Q. And so as you build inventory in 4Q, we might see a pretty decent step-up in the 1Q gross margin. Is that a fair way to think about it?
Bryan Fairbanks: Yes. Production will be roughly in line with what we made, maybe even marginally a little bit higher than what we made in the third quarter.
