Michael Metcalf: I don’t have anything to add. I mean, they the other, the other, the commercial and other industrial bucket that went up 202%. That I mentioned my prepared remarks. It’s really driven by the items that Brett mentioned, data centers and things of that nature.
John Franzreb: Okay. Okay. Fair enough. And when you think about the, maybe this, this goes back to the gross margin profile, is it a, is it a bigger function of the pricing environment, the competitive landscape, the inflationary environment, or the mix that’s going to keep you from hitting those higher 19%, 20% gross margins? If you kind of maybe rank them all just your thoughts about those three pieces?
Brett Cope: That’s a good question. It’s, it’s certainly all three. The price takes time, because of the project, the way we kind of laid off the old revenue, and then the phasing of the timing of that revenue, so it has an impact. And I think at some point, we’ll see it. I mean, the pricing environment, for all of our sectors is better than it was certainly, a couple of years ago, it’s not, but there’ll be a limit to that, as there always is another cycle. Mix, mix, to me is probably a big issue. But lately, you can’t just count the inflation piece, it is really hit a year ago in Q1. On the engineer side, the steel index is back up more recently, something we’re really attuned to, to watching the incoming steel prices, and how that lays out into the future piece. That that probably has as much attention for us anything on the cost side right now. We’re, we’re heavily in the input costs. Mike?
Michael Metcalf: Yes, if I could add here, John, I think both the pricing initiatives and the cost management, we’ve been really focused on that over the last 12, 24 months starting to see that exit the backlog. Now, when you look at the quality of the backlog with those elements in it, we’re really happy with where we are. The other item that that is, can’t be discounted, as you look across the facilities in the around the power landscape. Most of the plants, if not all, the plants have very healthy backlog. And with that increased volume, we should we expect to see volume, leverage productivity cost efficiencies come through the system. So again, we aspire to get up to that, that 20% level. And those are those are kind of the levers that we would look to get there.
John Franzreb: Got it. And I guess one of the parts that may get you there is I guess, maybe the service side of the business. And just a quick update on what percent of revenue is that kind of coming in at the current quarter. Any thoughts, updated thoughts about how that business is going to play out for the balance of the year?
Brett Cope: You’re building on the momentum that we kind of talked about last year. The strategic initiative that embodies a service piece you have you have the kind of the stuff that tags on to the existing business, which is still the predominant part of the service revenue. The installation, transitioning parts is the kind of short term stuff. The more strategic stuff is going well and we hope that in the coming quarters we’ll be able to share more as we feel confident that sustains. We’re still running on average annually 15 points, 20 points against the whole revenue profile. But we’re, we’re optimistic that that will sustain, as we hope strategically and be able to break it out and provide some more color about it. Because there are some things that we’ve noted throughout last year that we’re taking some steps on that front to leverage the engineering fees to, to grab more spin with the client and more service capability as well.
Not just winning the job, but really expanding our, our ability to provide value to our clients. So it’s going well, and if it continues throughout this year, I think we’ll be in a better position, towards the end of the fiscal year to really start talking about what structurally reporting we can make on a consistent basis going forward, John.
John Franzreb: Okay, and if I may, just one last question regarding the cash uses of cash and, and potential M&A. Brett, some updated thoughts on what you’re thinking about, and as far as the M&A market, you just mentioned you up the dividend as far as use of cash. But or you’re out there aggressively looking, updated thoughts about maybe the size or the nature of any kind of potential acquisition?
Brett Cope: We are out in the market, looking on the non-organic side. Again, our profile pile and operationally as well as in this process with the board and the conversations will continue to be, an overly or a conservative bent to our approach. There are things that we want to do and we think we can add end. There’s always the question of availability and affordability, and, of course our ability to integrate if we when we get to that point. So we are out looking, meanwhile, we aren’t discounting? I know, this has been a question in the past, John, on the CapEx side. We had a little pop this last quarter. We see some opportunity, productivity wise, and the teams around the company invested in the business, I feel good about that.
That’d be really good capital spent for the shareholder. So, and then and then the dividend? I think it’s it’s a directional step strategically, as we look forward over the next couple of years to take a step. We’ve shared that we’re going to actively continue looking at that at the board. So this is a directional step. And, and we’re going to continue to evaluate that in the coming years as we build the success behind the strategies and the core business.
John Franzreb: Great. Thanks again, Mike and Brett thanks for taking my questions.
Brett Cope: Good bye John. Take care.
Operator: Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Brett Cope for any closing remarks.
Brett Cope: Thank thanks, Jed . As you’ve heard from Mike and me this morning, we view our first quarter as a positive indicator for the rest of the fiscal year. The outlook for our core end markets is favorable and improving. While the project funnel for our non-industrial markets remains robust. A special thank you to the Powell team for their hard work, tenacity and incredible resilience. And of course, thank you to our customers for their business and their trust in our company. Thank you for joining us this morning. We appreciate your continued interest in Powell and look forward to updating everyone next quarter.
Operator: And thank you, sir. The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
