Andy Wamser: Yes. So, there is a little more than a $30 million sort of dragging Q1. We would expect maybe a little bit in Q2 and then it starting to reverse in Q3 and as we get to then year end. So, it’s generally in line with sort of seasonal patterns for the first quarter, moderately second, and then we’ll get some improvement certainly in Q3, and then last year — sorry, the fourth quarter at the end of the year.
Greg Palm: All right. Okay. That is it for me. Thanks.
Shyam Reddy: Thanks, Greg.
Andy Wamser: Thanks, Greg.
Operator: Your next question comes from the line of Kurt Yinger of D.A. Davidson. Please go ahead.
Kurt Yinger: Great. Thanks and good morning, everyone. Just a point of clarification on the volume commentary in specialty, will you reference kind of mid-single digit improvement in April? Was that a sequential number or on a year-over-year basis
Andy Wamser: So, that’s talking on a sequential basis.
Kurt Yinger: Okay. Got you. And I guess it sounded like, February and March, might have been up on a on a year-over-year basis but kind of offsetting that January pressure? Yes, or I might be mistaken that?
Andy Wamser: Yes. No, it would they were up. It was up year-over-year in February and March.
Kurt Yinger: Got you. Okay. I mean is it fair to say that with that kind of sequential improvement, you’ve seen that year-over-year improvement continue as well or maybe that’s pulled back a little bit depending on seasonality and maybe a little bit of catch-up for January.
Andy Wamser: I would say, we’ve been pleased with some of the volume numbers, I’d say from February March and into the first four weeks. And I’d sort of give some indication in terms of what we’ve seen the improvement for April. Although, I would say the one thing though that is the headwind is the specialty deflation that we’ve talked about over and over. So we think about from a gross profit basis, there’s headwinds there. But yes, we’re pleased with some of the volumes. I mean that being said, to caveat that, it’s certainly the markets is uncertain in terms of how we think about expectations for rates and what that means for starts. But long-term, we’re clearly optimistic in terms of what the market will hold or over the longer term.
Shyam Reddy: Yes. And then as it relates to what we are presented with in-market, we’ve launched a number of strategic initiatives to grow the business in key markets along those five key specialty product categories, while also leveraging our relationships with the national account side to grow that business as well very strategically. And then as I touched on in previous calls, there is a portion of starts where we don’t have that much of a presence and that’s multifamily. And we have now some dedicated resources to growing that business out in the regions and in the local markets where the opportunities are great. And we’ve got some great vendor partnerships that are enabling us to do that as well. So it’s — we’re basically taking the bull by the horns despite the market headwinds but they are real for sure.
Kurt Yinger: Great. Yes, okay. That all makes sense. In the last six months, you guys have announced kind of some expanded partnerships with LP Huber. Curious, if you’ve gotten that product in place in those additional locations and have started to kind of ramp sales at expected run rate at this stage or whether that’s something that could still kind of prove instrumental over the next couple of quarters?
Andy Wamser: Yes. So we continue to expand our relationships with them and the sales — once we bring in stocking positions in those locations the sales start to flow through the P&L. But we have a lot more room for opportunity in additional markets that will come online that are in discussions. As you can imagine market expansion with any of our key vendors is done pursuant to a schedule and it takes time over the course of the year. But so far, we are very pleased with the markets we’ve opened up with, whether it’d be our siding partner like Allura or LP with respect to other type of siding. And then of course you mentioned Uber as well, but we have a number of relationships where we are expending product lines that are giving our teams in the field some readiness and create excitement in what’s otherwise a challenging market.
And also as it relates to your kind of your normal customer base, there are opportunities where we like we’re expanding in markets with respect to multi-family and our home centers where we might not otherwise be selling a specific product. So that’s also another opportunity for growth and product expansion. So it’s both geographic and channel.
Kurt Yinger : Okay. Okay. That’s good to hear. And Andy you had touched on kind of seasonally stronger EBITDA margin profile in the middle part of the year. I guess if we were to think about Q2 and that being the case would we account for kind of that duty benefit and maybe strip that out? Or do you feel like that’s a comment that could be taken through the kind of the number that you reported here in Q1?
Andy Wamser : Yes, I mean, you would have to strip out the impact or the positive net impact from the duties. So from a reported, I would say, a 5.3% was with the duties was 4.4% without. So I think there will be a marginal improvement from the 4.4%. So that’s what I’d be using.
Kurt Yinger : Right. Okay. Makes total sense. And then last one just on greenfields. Can you maybe talk a little bit about kind of the key considerations when you’re evaluating some of these different locations and markets where you don’t already have a presence? And we talk about the West, is it markets that you completely don’t serve today or should we think about that as more an expansion of where Vandermeer might already have some presence, but is serving customers from a long distance or something like that?
Shyam Reddy: Yes. So let me first start by saying that we serve all 50 states, and in those areas where we have warehouses or distribution operations and can deliver out a warehouse that in a cost effective manner. We clearly serve those states within the periphery of the locations. In other states where we don’t have a close enough presence to make the economics work, we have both. We have direct sales and we sell out of reloads. So we are able to service all 50 states with some being at a higher margin level, obviously, because of the presence we have there. As it relates to the market, some of the key considerations we look at are obviously starts and permits and demographic trends that suggest and the ability to participate in the growth cycle when the housing market picks back up, and connects with rates coming down.
