Joseph Molino : Yeah, I was saying that it’s difficult to ascertain changes in market share, because there’s so many players. And we really just don’t have that access to that data. It’s a little hard to tease out because as we were making the price increases, what — we were seeing retail sentiment consumer sentiment also fall off. So it’s really hard to split out what might be a fall off in share versus just the general economic situation or anything .
Andrew Shapiro : Well, I would think you are the OEM provider, you’re making the private label brand for Home Depot. And that would seem to be the kind of the promotional or cost leader for Home Depot. In tighter times the progression often is towards the private label products rather than the premium priced on the brands. What do you feel is going on that retail line item, which had a sizable drop off year-over-year?
Joseph Molino : Well certainly, there’s a number of things going on. Depot has chosen, this probably did goes back a couple of years. But they’re — and I don’t know when the last time you were in a Home Depot was. But there was a time when our tools were fairly prominently displayed in what they call the Tool Corral or Tool Crib. For the most part Depot has moved those tools out of the Tool Crib in a separate aisle. So if you’re looking for tools, you’re going to go and you’re not going to find ours, where all the other tools are, especially the battery operated one. So I think that had a negative effect on things. And that’s Home Depot’s decision. And we’re not part of that. And in general, battery operated tools are certainly an issue on the very low end.
And in the long run, they’re certainly growing faster than then pneumatic tools. So that’s also a factor. And as I said, we saw a change in retail sentiment even in Amazon, on the automotive side. So a number of factors; couldn’t really point my finger at anyone in particular, and certainly the price increase, there’s certainly some elasticity there, which can’t be ignored.
Andrew Shapiro : So do you feel here we are near the end of the first quarter? And I know you don’t get a lot of visibility other than what you’re shipping and et cetera. But do you feel that the trend is still a headwind and could be for the rest of the year?
Richard Horowitz : I don’t think we would have that clearance. We wouldn’t have that clearance. We wouldn’t have that vision. Nobody knows in the world, especially in these times of the economy. But all we can tell you is that the first quarter have rebounded somewhat, which is —
Joseph Molino : One other one other — I’m sorry, Richard. Go ahead. One other comments, spray guns, which are not an insignificant portion of the Depot line, probably bore the brunt of the fall off. As we’ve seen those were being heavily used during COVID, as we’ve discussed. And that time has passed for that major bump in demand. So that’s probably some of it as well.
Andrew Shapiro : Okay. And on the automotive side is that, I think, Richard, you intimated that things have picked up again back there. There’s not anything any particular secular trend or headwind going on there? Is that correct?
Richard Horowitz : Yeah, that’s correct. I mean, I would say, Andrew, that it’s definitely gotten better. I don’t think it’s as good as — I know, it’s not as good as it was a year ago. But it’s definitely better than it was.
Andrew Shapiro : Sure. Now last quarter’s call you guys discussed Florida Pneumatic now moving to aerospace. Florida Pneumatic’s revenue and margin mix was favorably impacted by rebounds in the aerospace product line. And that was both in commercial and defense. And that made up, kind of filled some of the hole that was created when the Boeing business, especially with the 737 MAX grounding, and the 787 production issues, that the production rates and the demand and use for your tools slowed slow greatly, and there was this hole. And you had this new business in aerospace that was filling up. And on the last call, you had said that Boeing had only recovered to about 50% of their pre-pandemic or pre-grounding, kind of consumption rate.
So I presume with Boeing’s commercial production rate nowhere near former levels, your business with them similarly is not fully recovered, but hasn’t migrated up yet from the approximately 50% level you said, which was almost six months ago, given this was fiscal year end, and there’s a longer time lag for your reporting?
Richard Horowitz : It’s basically been about the same. It goes sporadically and — but I would say generally, maybe slightly up over that, but not dramatically. But we’ve experienced a lot of other business, in defence and aerospace to counteract that.
Andrew Shapiro : Right. So then when Boeing’s already publicized that their production rate in ’24 is going to step up pretty sizably. They’re opening another production line for the 737 MAX and hiring 10,000, most of which are production workers, again 2024. Presumably, all those people are going to need tools. Do you feel you’re well positioned that when they have this increased demand, P&F is going to get your Jiffy line and other lines are going to get their fair share?
Richard Horowitz : I do. Joe, how do you feel?