Bryan Fairbanks: I’d say expectations have remained relatively steady. They continue to see good demand through the fourth quarter. Clearly, there were some questions about that from a channel perspective. Would they be able to continue selling at a level to draw down inventory, but then also be able to bring in the start of an early buy in the month of December. And as you move out to the first quarter, again, we continue to see that consumers are going to both our pro channel as well as DIY customers and placing orders for Trex products.
Jeff Stevenson: That’s great to hear. And then I just wanted to touch on the progress you’ve made expanding your distribution and network. So the Texas announcements were encouraging. But just how long a runway do you believe you have in expanding your distribution partnerships moving forward?
Bryan Fairbanks: Generally speaking, for Trex, it’s going to be less about adding new distributors. These were a couple of marketplaces where we see the growth is quite significant, and we felt that we needed to add some additional representation. So the largest growth will come from additional retail outlets as well as improving our share within the existing outlet that we sell from. But these were important enough in a marketplace that we do see outsized growth in the future that we wanted to call them out specifically.
Jeff Stevenson: Okay. Thank you.
Bryan Fairbanks: Thanks.
Operator: The next question is from Phil Ng with Jefferies. Please go ahead.
Phil Ng: Hi, guys. Congrats on an impressive quarter.
Bryan Fairbanks: Thanks, Phil.
Phil Ng: Question for you, Dennis, I guess, the 26% to 27% EBITDA margin target, appreciating you’re not guiding to $1 billion of sales, but that implies mid-single-digit volume declines, give or take. What if it was like weaker, like down 10%? Do you have enough levers to kind of still sustain that margin threshold in that demand backdrop?
Dennis Schemm: Well, I think you saw in the past, how we’re able to move and get our cost structure right. So I think that there are things that we would do to improve the margin structure and keep it robust.
Phil Ng: Okay. And I forgot to ask, Dennis, any way to help us think how much of the cost out is driving some of that strength in the sustainability and the strength of the margins for 2023?
Dennis Schemm: Well, I mean that’s the baseline, right, for us moving forward. And now what you have is what the cost saving measures of continuous improvement, cost outs that we worked really hard on from a labor perspective, energy diversification, etcetera. They are all coming into play now. That’s that additional in 150 to 200 basis points of gross margin improvement that we’re calling out.
Phil Ng: Okay. That’s helpful. And then on your CapEx guidance, the $130 million to $140 million for 2023, to more muted than I would have thought appreciating maybe you are adding some of this little rock capacity further out down the road. Is that $130 million to $140 million sustainable? And if I heard you guys correctly, you are not actually physically adding decking capacity until 2026. Is that when it hits the market?
Bryan Fairbanks: I expect that we will start to see production out in that timeframe. I think it’s really important for everybody to understand our existing facilities. We don’t have room for additional buildings or additional capacity. So, it’s important that we have the third site and we have a building that’s ready for decking capacity to be able to go in. And based off what we are looking at this point, we think that timing is early 2026 when that would start running.
Phil Ng: Okay. Super. That’s helpful.
Operator: The next question comes from Reuben Garner with The Benchmark Company. Please go ahead.
