Colin Devine: This is actually Colin on for Phil. I guess just wanted to touch on where you guys outperformed relative to your guide on the sales line. Can you just walk us through what performed better in the quarter versus your expectations whether the channel or region or the acquisition performed better? Just curious as to your thoughts there.
Mark Yost: I think, I would say the acquisition performed better. There is, if you look at October, November, December industry shipments for those three months, the industry shrink at about 2.5% in aggregate. But within that, there is a tremendous amount of noise. So when you look at Regional Homes has a heavy presence in Mississippi, Louisiana, those Southern states. So Louisiana year-over-year during the quarter grew 79% in terms of year-over-year shipments. Mississippi was up 45% year-over-year in terms of industry shipments. So I would say those geographies and those markets are kind of rebounding quite strongly. So I would say Regional did very well, probably outpaced our expectations during the quarter in aggregate. So I think that’s good.
Probably the Carolina’s and Georgia did a little better than we thought during the quarter. But most of our markets where we have heavy concentration with kind of our core business, so we’re heavy in California. California during the quarter was down 34%, the Midwest, Illinois, Iowa, Indiana, Michigan, Ohio, That region where we have a good presence was down 41% year-over-year. In Pennsylvania where we have a lot of plants was down 30%. So I think it was really kind of a balancing where certain regions did better and certain regions did a little worse in terms of the geographic dispersion. There was a lot of movement, but I would say overall that Southern Mississippi type region and the strength of the Regional Homes team and what they have done is surprising us positively every day.
Colin Devine: And then just moving over to the retail channel. Can you provide just some more color on how that performed? And I believe you called out the increase in captive retail sales as a benefit to price. Can you help quantify how much your business is now going through captive retail with the regional acquisition and the price differential there?
Mark Yost: We are not disclosing that specific breakout, Colin, of how much goes through. Currently, I think it does help the ASPs. You can probably have a sense that regionals $120 million is heavily influenced by retail activity, in general. So that can give you a good proxy to think through.
Colin Devine: And then my last question here is on gross margin, came in nicely ahead on the quarter. Can you just talk about the outperformance there versus your initial expectations and just how you’re thinking about gross margin going forward with a quarter of ownership of the acquisition completed at this point?
Laurie Hough: Sure, Colin. U.S. volumes came in better than we expected, as well as product mix and pricing. So we really improved versus expectation and on all three of those fronts.
Colin Devine: And any color as to gross margins maybe in the fiscal fourth quarter and into calendar year ’24?
Laurie Hough: Yes. I still expect that gross margins are going to come down a bit sequentially from what we saw this quarter. Similar to what I mentioned last quarter, we do expect to see a decrease in average selling price as well as really driven by product mix and the customer having to choose less options, which impact gross margins. Also we have the three recently opened idled facilities that are negatively impacting gross margins for the time being. And then the regional acquisition, generally the regional operations have lower gross margins until we start capturing more synergies. And also the purchase accounting implications, which we believe are going to be higher than what we saw in the next couple of quarters versus the third quarter.
Operator: Our next question comes from Matthew Bouley from Barclays.
Matthew Bouley: Just I wanted to touch on sort of the recent trends with all the volatility in rates that you experienced during your fiscal quarter and kind of year-to-date. And obviously, I think, Mark, you mentioned at the top there’s some noise around weather as well. So could you just kind of speak to maybe focusing on the dealer channel since you gave a lot already on the community side, but just kind of how has demand been progressing from a dealer perspective and retail perspective over the course of the calendar quarter and kind of into the New Year?
Mark Yost: I think the dealer channel has been very strong over the actually several quarters, but this quarter definitely. We saw our year-over-year order growth increased by 230% and that was largely driven by builder developer and retail as the communities were still are still slowly coming back, but significantly down year-over-year. So, I think that bodes well to the strength of that retail channel as it continues to return.
Matthew Bouley: And then second one on the price mix side, just kind of curious if you can kind of unpack a little bit where that can go? And is it kind of dependent on what happens with interest rates or because at a certain point, you’re going to be at, you’re going to be comping against the price mix having been coming down for a while. So, kind of where do you anticipate price mix settling out? And what do you think it would take for that to begin to improve again?
