Michael Chapman: Okay.
Bill Boor: Is that — am I getting that, Michael?
Michael Chapman: Yeah. No. You did. You got to it. I appreciate that. And then just kind of looking at…
Bill Boor: Yeah. Yeah. And we wouldn’t consider that to be a negative because that would be incremental volume over where we are at now. So, we would be thrilled with that average selling price as an indicator, but we are looking at the bottomline.
Michael Chapman: No. Fair enough. And then just kind of on inventory levels, over the last couple of years, inventory turns have gone up, inventory days have come down, obviously, through the pandemic and everything it’s changed. Are those going to come back or what’s the time period that you would think that those would get back to levels that they were in, say, the 2019 area?
Bill Boor: Yeah. It’s interesting because as we have gotten through the inventory problem and this is kind of a general industry statement, but certainly a statement of our company-owned stores as well, turns are getting back into good ranges anyway. They are kind of stocking at a level to — and you think about the incentives. Let’s take an independent dealer, you think about their incentives, floor plan financing has gone up in cost, so they are going to carry less inventory and make sure their turns are pretty solid. So when we look at turns even within our own system. They are pretty good right now. They are not bad at all, because inventory is being managed down.
Michael Chapman: Okay. And then just kind of following on the financing side, I mean, homebuilders have been kind of keeping volumes up, stick to homebuilders, keeping volumes up by basically buying down yield. So basically using their balance sheet to increase the volume. You guys — all the big guys have really good balance sheets on that. How do you go about doing that or is that just something that you wouldn’t do in the chattel market because of the credit profile that you face?
Bill Boor: Yeah. I mean, it’s something that, I’d say, as a general rule has not been a main driver of how people have gone to market. Traditionally in our industry, the manufacturer sales teams working with dealers, for example, have been selling on price and product. And so there hasn’t been a lot of subsidizing consumer rates. But it’s always a tool that you kind of keep an eye on and it’s something that could become a factor. That’s why I think it’s good for us to — so I am happy that we are kind of in the position we are with Country Place, because we can always keep an eye on that and if the opportunity came to drive more volume by providing this kind of programs, we have got the capability to do it. It hasn’t happened a lot yet, but in the end, you are trying to manage for integrated value and so it’s something that we do look at and opportunistically we would be willing to do it.
Michael Chapman: Okay. I mean could you have…
Bill Boor: The discipline on that — just to explain the discipline on that, just to finish that thought? We have, what’s commonly called an asset-light model in our lending business, where we don’t want to hold loans and so it creates a natural discipline that we have to have investors buying those loans, and they are going to want to buy loans at market. And so if we buy it down, it’s a good discipline because the economic reality of buying down that rate is staring us right in the face, right? So I think there’s a lot of discipline in that.
Michael Chapman: Okay. And then just kind of my last one, I mean, you guys in this quarter generated strong free cash flow, by any stretch of the imagination, in good times, you will obviously generate more.
Bill Boor: Yeah.
Michael Chapman: Do you have constraints on acquisitions or the volume of acquisitions you can make just because of the concentration of the industry? Because if you are going to do, give or take, $200 million in free cash flow and given at what you guys have been paying on price of sales, you guys could make…
Bill Boor: Yeah.
Michael Chapman: … $200 million, $300 million, $400 million in revenue purchases a year. But that’s a lot of revenue for what’s remaining outside the big three or four guys. So, I mean, I look at it and the cash flow that you guys have, seems like you have almost too much to just do nothing with it. And so I am kind of wondering what the thought process is, given the volume of cash flow and your ability to apply that in the market in acquisitions? Thanks.
Bill Boor: Yeah. Yeah. I think, one answer to your question is we don’t feel constrained on acquisitions. We kind of maintain our balance sheet, so we can act strategically and acquisitions you can look through our history, have been an important part of that. So certainly don’t feel constrained with either the cash balance or the cash flow that we have been generating as you identify. So we want to make sure we get those deals at the right prices, I think, is the limiting factor for us. We are always kind of looking to make sure it’s a fair deal for both sides. So we have obviously used repurchases as a balancing tool on our balance sheet. We have been pretty clear with folks that we want to maintain a responsible balance sheet and that’s where the repurchases come out back into play.
They are not really speculating on price. They are more trying to keep our balance sheet appropriate for keeping the dry powder to do the deals you are talking about. So anyway, I think, the bottomline to your question is, we do not feel constrained and when we see good opportunities and acquisitions, we feel free to do them given our strong balance sheet.
Michael Chapman: And there’s no regulatory constraints to increasing your market share?
Bill Boor: We haven’t gotten to that point yet and I think there’s a couple of things there. One is, as I said in my earlier remarks, it’s a local business and so that analysis really has to be done at a local business. And secondly, when you look at deals in this industry, I think, we are part of the overall homebuilding industry, not just the manufactured housing industry. So we haven’t really felt that we are bumping up against any kind of regulatory constraint or in concentration.
Michael Chapman: Okay. Great. Thanks. That’s all my questions. Appreciate it guys.
Bill Boor: Thank you
Operator: Thank you. That concludes the question-and-answer session. At this time, I would like to turn it back to Bill Boor, President and CEO for closing remarks.
