Tommy Moll: Thank you, all. I’ll pivot to a forward-looking conversation here and I hope that we could advance the conversation around potential revenue impact next year and into ‘25 from the coming refrigerant regulations. The OEMs have certainly been more vocal here. We have heard that the impact could be as much as 15% to 20% cumulative price over the next couple of years. And so my question for you is, does that sound like a reasonable range? And if you unpack the dynamics here, what do you expect to see in terms of impact from the pricing on the new equipment? And what are you seeing now or what do you think you might see on the existing equipment configured for R410, where there will be a big curtailment of supply as you head into next year?
Al Nahmad: So let me call on Paul Johnston for that.
Paul Johnston: Yes, easy question here. I think what two of the OEMs have announced that they think it’s going to be in the 10% to 15% range. We’ll just have to see what they – what movement that they have on that. There are going to be higher cost in the new products. And obviously, those are going to be reflected in higher prices. I think as we move into next year, we are going to find out more and more about what the regulations actually state and what the regulations allow going forward into 2025 as far as the curtailment of 410a equipment. And I think that’s really the open question that we have right now. Obviously, at some point, we are going to be 100% 454 or 32a refrigerant, which are going to have higher prices, because they are slightly inflammable.
There have to be safety devices on the units. It is going to increase the price of the products. There is no doubt about it. I am not going to give you a forecast what I think it’s going to be, but it will be higher than what we are seeing right now. It’s the new higher efficiency products that we introduced this year.
Tommy Moll: And just on the on the existing equipment configured for R410, are you seeing anything or hearing anything or expecting anything as you move into next year where the refrigerant itself is likely more expensive and what that could mean for overall equipment pricing there?
Paul Johnston: I think there is going to be – there is going to be some increases. There have been increases here recently in the last couple of weeks on 410a. It’s a matter of what the refrigerant manufacturers are – how they are going to handle their new allocations. Their allocations for GWP products were reduced by 30% for next year. And so they are going to have to come up with their formulas internally that would determine how much 410a they can afford to make versus some of the other lower GWP products given their allocations. And then secondly, we get into the long-term issue, we’ve got another 30% reduction coming in 2029. And when that occurs, I think you are going to really see a crunch, if you will. But right now, we are just – we are trying to ferret out exactly what the regulations, how they impact the OEMs, how they impact the service level for the contractors that we work with and what’s going to be the long tail or short tail of existing 410 equipment in the market.
Tommy Moll: Thank you, all. I appreciate the insight and will turn it back.
Operator: The next question comes from Brett Linzey from Mizuho. Please go ahead.
Brett Linzey: Hey, good morning. Yes. So just the first question regarding HVAC equipment growth, a nice snapback up 6% in the third quarter. Do you think there is a little bit of catch-up from some of the OE issues you had in the second quarter? And then any comments just on underlying replacement activity does continue to show some resilience here. But just curious if there is any cracks in terms of metrics or ticket size, etcetera?
