And so we expect that to flow through in revenues, but it’s still been sluggish of getting back to the levels that we would expect out of an area that we’re really excited about participating in as a leader to that end market in front of us. On the semiconductor side, we took a pretty good punch last year. I tried to highlight it specifically with the actual dollar drag that we had. Revenues were down 50% in the semiconductor space for Gexpro last year. It had the biggest impact on our earnings for the Gexpro division. That $8.3 million – $8.4 million drag that we had for the year on EBITDA. That end market is still kind of book-to-bills, not where we’d like to see it yet, but our customers, we’re still engaged with them, and we’re working currently on ways to expand our current wallet share with them.
And as we also – it’s kind of been interesting, we’ve seen a shift with one of our customers in particular, and another one that we’re working with, where some of their production is moved away from the U.S., at the same time, as we’re working actively with a number of customers on new expanded fabrication capacity in the U.S., which we all kind of think would expect with the CHIPS Act. But it’s not been kind of as seamless as we’d like to see, as we’ve seen some shifting overseas from customers at the same time as we’re seeing new plants being built domestically. So there’s some choppiness still in that end market, we expect it by the second half of the year. That’s really where the back half of the year element that we’ve kind of laid out there for Gexpro.
We expect to see more of a renewed or restored level of activity there on the semiconductors. The other end markets have actually held up quite well. And so if you take those challenges out, our organic growth rate, we would have had flat to positive organic growth in each of those verticals without those headwinds.
Kevin Steinke: All right, makes sense.
Bryan King: The only other thing, Kevin, in terms of just thinking about headwinds that we had last year, but also celebrating the great work that was done would be the sales force kind of transition that we did at Lawson. We got the benefit of more productivity out of our sellers. We’ve reorganized some of the ways that they serve their customers, and some of the efficiency with which we lean on those sellers in their particular selling territories. And so that has created some level of choppiness that – we think that – we kind of – we knew that it would probably lift margins but create some drag on organic growth last year. We just didn’t expect that we would also have the drag on the other two verticals at the same time.
So we thought we’d get the benefit of the EBITDA flow through with a little bit of a drag on organic sales growth at Lawson, while we would also – we were enjoying through the first half of last year and into the third quarter, really strong end market, still strength on a blended basis across the other two verticals, which we thought would kind of not highlight as much the drag of the sales force reorganization on organic growth. But that was very much of a deliberate objective to be able to bring the structural profitability of Lawson up closer to where we think it should be over time.
Kevin Steinke: Okay, thank you. And just following-up on that, when you talk about the expectations for a better second half of 2024. In discussions with your clients, how much does the macro outlook play into the building pipelines and what have you? I guess, we’ve just been hearing more generally from various companies that they’re getting more comfortable with the way inflation is trending and the possibility of interest rate cuts at some point this year. Is that kind of factoring into your clients thought process and starting to move forward with some spend on some of the more interest rate sensitive things like renewable development, et cetera?
Bryan King: Yes. Kevin, I mean, for me, the best example of that is just seeing the book-to-bill on some of the markets that have been more sensitive to inflation or to interest rates like the renewables. So the renewables have the highest book-to-bill currently of any of the markets that we serve. But that in and of itself to me is an indication that there’s confidence in that end market anyway, which has been probably the most sensitive of our end markets to interest rates and kind of the overhang or concern about a recession. And they are moving forward with projects in their engagements with us around the request for proposals, and then obviously booking orders with us. But those won’t translate into the revenue lift, we don’t think, until later in the year than the first quarter.
That’s probably the best industry for me to use as a proxy for the question you asked. But I do think that there’s two other elements that we’re seeing is just like we were able to destock some quite a bit during last year, we watched our customers do the same. And so the concerns that we all had about inflation, and every time we reordered a product being having pricing pass through on us from our vendors. We had customers who were experiencing the same from us. And then everyone was puffing their orders some or carrying more inventory, both because of the concern about an inflationary price increase, as well as the concern around supply chain disruptions. Tested measurement was an area where we had seen a real overhang on supply chain disruption and distributors like us or rental companies that are similar to us took – kind of went out and took inventory positions in an effort to try and smooth the challenging backdrop that we had from the vendor or the manufacturer getting us product.
