Garik Simha Shmois: Understood. Last question is just on the incremental or decremental margins moving forward? You’ve done a fantastic job this year, but it seems like the top line is still going to be a bit choppy given the trends that you discussed. It seems like you’re lapping some of the material and transportation cost benefits, but you are contemplating taking fixed costs out of the system, so just kind of curious how to think about the incremental margin line moving forward? Any additional color that you could provide would be great?
R. David Banyard: Sure. I think that maybe, Andi, can speak a little bit about Q4 as you do the math on that. But I think that’s – we want to outperform, but we’re also cognizant, particularly with what we’ve been able to accomplish in the second half of this year. We’re cognizant of our desire to keep investing in the business, because the investments we’re making right now are focused on growth in the future. Some of them take more time to come to fruition, and we’ll talk more specifically about those as they develop. But I think that that’s the balance. And so our team, I think, is institutionalized as part of our culture of the continuous improvement mindset, and so as that’s just part of how we do things. And so they take that money and we can either make it higher return for shareholders and/or it’s usually in hand, take some of that money and invest it.
And that’s going to really dictate moving forward, how we have decremental margins. But our goals are always to be world-class and to be better than contribution margin. And we look at the fixed cost base that we have and we’re always looking to make sure we’re optimizing that along with the continuous improvement in the variable side to build the headroom, if you will, for us to make decisions about investments. And obviously, as you go into a market like this year, even we were unsure. And so we wanted to hold off and wait until we saw how things progress before we go into investments, and we’ll treat it the same way any given year. As things go better, we’ll invest more. And if things don’t go well, we’ll trun back.
Andrea H. Simon: Yes. I think I can add a little color for the Q4, if it’s helpful. Generally, for this year, we do still plan to stay within our stated guidance, the decremental is no more than 20%. So we continue that trend. And really, we’ll see the Q4 from what’s impacting the quarter perspective to be very similar to Q3 and again, it will be that continuous improvement, supply chain initiatives on top of deflation that we expect to, again, heavily to offset that volume decline, trade downs, the strategic initiative spend, which we are going to continue for growth purposes and those personnel costs. And just a slight clarification just to make sure we understand on the discretes, of course, the Q3 discretes will not repeat in the Q4.
But as we mentioned in our prepared remarks, we do have that last insurance payment coming through from the tornado we experienced earlier in the year of $3.2 million. That is in the outlook. However, just to be clear, we do anticipate that to be offset by some FX headwinds and also some just normal holiday-related inefficiencies, which we talked about last quarter.
R. David Banyard: Yes. And to put a finer point on what Andi said, similar, but we will be investing more in Q4, and we do have the inefficiency, which we’re going to – we’ve already seen far enough ahead to say we’re going to take a couple of weeks shut down for maintenance in our plants. And that fixed cost, therefore, just comes at the bottom line. So it’s – I think if you do the math on the numbers, the – it’s not quite as good a performance as Q3, but that’s for a number of reasons that we are looking at controlling and deciding to do.
Garik Simha Shmois: Understood, thanks for all that and I will pass now.
Operator: Thank you. Our next question comes from the line of Tom Mahoney with Cleveland Research. Please proceed with your question.
Thomas Mcnally Mahoney: Good afternoon. I wanted to ask about the working capital comment in the fourth quarter where a neutral and you mentioned normal seasonal activity – is there some restart of production that’s associated with that? Just trying to get a sense for how you think about building it into the end of this year and looking forward into 2024 from a working capital perspective?
R. David Banyard: Yes, Tom, I’ll add a few things and then, Andi, may want to add some further detail. But generally speaking, in a normal year, we tend to have a slight build in inventory at the tail end of Q4 and into Q1. And a lot of that is driven by Lunar New Year in Asia. You have to get material on the water sooner to bolster through a couple of weeks of shutdown in that region. So that’s a normal course. I will say it’s really hard to look through our financials for last year because that wasn’t the case last year. We actually extended the Lunar New Year shutdown with our suppliers longer to kind of help reduce some of the choppiness that we had and we had plenty of inventory, obviously. So it’s really hard in this particular 1-year period to look at it year-over-year as what’s a normal Q4 into Q1.
So I would say the normal pace for our working capital is we have to build some inventory for Lunar New Year. And then on top of that, if you think about the new construction market, it does have some seasonality to it because of weather in the north. And so we tend to have higher activity coming out of Q1, and so you start building some inventory ahead of that as well. So those two dynamics are back in play this year. Again, we still think we have improvements to make to inventory. So it’s kind of a balances each other out, maybe not perfectly, but somewhere in the middle to balance each other out. So we’re going to continue to work on improving inventory with the supply chain initiatives that we have, but there is a dynamic of needing to order more material starting sooner rather than later here in the fourth quarter.
