Matt Flannery: I don’t really have it broken out that way. We really look, frankly when we’re planning, but more by region versus the verticals and then we track the verticals as we assign capital after the fact. So I actually don’t have that number for you, Ken. We can do a little work and get back to you on that. But just generally, right, without trying to get too pegged on numbers that I haven’t vetted. Generally, it’s €“ we view infrastructure as something that’s accelerating, right? We view that we’re seeing the beginnings of it €“ of the spend, and we think that’ll accelerate through 2023 and beyond into multi years. As far as the manufacturing, someone mentioned earlier, there’s some big plants going on right now that have a lot of fleet on rent as we speak.
But there’s also some projects coming out of the ground that we think are multi-year mega projects. I don’t really know how to lay those against each other. But I’d say overall the mega projects work will certainly outpace infrastructure work in totality. But the acceleration infrastructure will continue throughout the year.
Ken Newman: Understood. For the follow-up, and you touched on this a little bit, but obviously we’ve seen some cracks start to emerge for the broader industrial space, especially on the €“ you talked about PMI in your prepared remarks. I know that’s a little less than 50% of your customer mix, the industrial MRO part of the business. Maybe talk to us a little bit about how much conservatism is built in to the bottom end of the guide range. What’s embedded there in the assumption if we really do see a sharper turn in the industrial MRO demand environment?
Ted Grace: Yes, Ken, I’ll take that one. As Matt mentioned, when we do our forecasting, it’s really built by the branches up to districts, regions, divisions, and corporate ultimately. So it’s really kind of set by the field. We don’t look at it kind of top down looking by vertical. So as I mentioned, our industrial business has held in very well. We’re not seeing any signs of cracks, and I know people have looked at whether it’s the PMI or other metrics and it’s raise concerns. We’re not seeing signs of those. And as Matt mentioned in his prepared remarks, we also see a lot of these industrial projects kicking off this year. We’ve talked about autos and related stuff. We’ve talked about semis, but frankly, it’s even broader than that.
And so if there’s an offset from this €“ if there is a headwind on the MRO side, I think we’re very confident you’ll see within industrial kind of offsets on the construction side. But just to answer the question pointedly, we don’t forecast our business based on these industrial verticals.
Ken Newman: Got it. Maybe if I could just sneak one more in here. It doesn’t sound like you guys expect any constraints certainly from a capital perspective, even with the new dividend and the share repo, but I am curious if you think there’s enough management capacity to go after M&A here in the near term?
Matt Flannery: Yes, Ken. So outside of anything that has a significant overlap with Ahern, right? So in those markets where they’re integrating the teams together, right, getting the sales reps together, that’s a lot of work on the ground. So we’re going to pause for a little bit on anything that would have a large overlap. But if we have opportunities and we continue to work the pipeline as we have for the past couple years that don’t have a big overlap and we have capacity in the field. We’re absolutely if they clear that final hurdle of the finance €“ makes financial sense. We have the dry powder, we have the capability and we certainly would consider M&A that whether it be a tuck-in gen rent deal in a market that Ahern wasn’t in or a specialty product line where they’re not dealing with any integration issues right now.
So, our integration work rather than issues. So I would say absolutely we would. And just to touch on the capital allocation, one of the reasons why it was the right time for us to do a dividend now is because this is not at the expense of growth. When you look at the past two years and the kind of growth we drove, including significant M&A, we still have the capacity and free cash flow to give a dividend. So we had asked that question by someone earlier, are you given a dividend because of less growth prospects? No, quite contrary, it’s because even after supporting growth, we have excess cash to return and that’s push points to the resiliency of our strong free cash flow through the cycle.
Ken Newman: Very helpful. Congrats.
Matt Flannery: Thank you, Ken.
Operator: Thank you. We’ll take our next question from Stanley Elliott with Stifel.
