Andy Rose: In Q1, I think, as you mentioned, Martin, volumes for WAVE were up slightly from where they were in Q1 of last year. But keep in mind that they’re about two-thirds repair and remodel. And so, you’re starting to see some pretty reasonable stability. Those end markets are certainly not growing at 10% or 15% per year, but they’re low-single digit or flattish. And that’s a good environment for WAVE. Honestly, the reason that they’re able to grow has a lot to do with how innovative their products are and how they really think about the pain points of their customers. And think about speed of install. If you’re trying to put up 10 floors of acoustical ceilings, your highest cost is not your materials, your highest cost is your labor and WAVE has historically done an absolutely terrific job of understanding how people need to do their jobs and how to make them more efficient.
And so, I think you’re just seeing some really – a reflection of some of that goodness show up in the way that they’re able to perform and continue to have really good margins.
Operator: Our next question comes from Phil Gibbs from KeyBanc.
Phil Gibbs: As it relates to the joint venture portfolio in totality, obviously, WAVE is a big piece, but we probably do have some seasonality as we enter the fall and winter seasons, and I’m not exactly clear what spreads are doing across the portfolio because you’ve had a lot of volatility in results over the last 12 months? So how do we think about just the joint venture bucket as we look at the next couple of quarters? Is seasonality a bigger factor? Or spread is a bigger factor? Are they both factors, trying to think about everything as it relates to that bucket?
Andy Rose: I think, specifically, the JV portfolio in Building Products, I think Tim can certainly speak to the JV portfolio within Steel, but within Building Products, with WAVE, we just talked about that. Don’t expect anything that’s substantial one way or the other. ClarkDietrich, we’ve talked about this. They’re a little bit of a different mix than WAVE is. They’re two-thirds-ish new construction. And so, they’re seeing similar headwinds related to their exposure to that market versus somebody who’s maintenance, repair and remodel focused. And so, we’ve talked about this. We do expect – ClarkDietrich is a phenomenal business and a great team. But they will more than likely be down year-over-year for the next several quarters just coming off of a great year that they had in our fiscal 2023.
Phil Gibbs: And then, Tim, on the Steel side?
Tim Adams: I think the unconsolidated JV in Mexico, Serviacero Worthington, they are going to see similar headwinds and impact, maybe not to the same extent that we do in the US, but automotive strike is going to potentially impact them as well because it can have far reaching effects. I think our other joint ventures, there’s a lot of automotive in there as well. Two of those are toll processing. So, Spartan and Worthington Specialty Processing or Worthington Samuel Coil Processing – SCP is how we refer to it usually – those have a lot of automotive in there as well. And then TWB, they have a lot of blank operation, is 100% automotive. So I think it really depends on how the strike goes will dictate how the North American joint ventures go for Steel.
Phil Gibbs: You also have some of the kind of normalization in metal spreads happening, though, in those businesses irrespective of the strike, though, I would imagine, right?
Tim Adams: Spartan is toll processing. The SCP is toll processing. TWB has a pretty decent sized order book in tolling. And a lot of that is directed buy. So, there really is no metal margin impact there. And then, at Serviacero, they do have a high toll processing orderbook, but they’re also fairly large in direct, and so they will be exposed to the metal margin changes.
Operator: [Operator Instructions]. Our next question comes from John Tumazos from John Tumazos Very Independent Research.
John Tumazos: Congratulations on the great results. In 2022 to 2025, there’s 3 million tons of sheet and plate capacity coming on each year, Steel Dynamics, Nucor, US Steel, then Nucor again. While this year’s steel demand has rebounded from the November/December lows, it looks like the apparent demand is going to be about 7 million tons or less than the 2017/2018/2019 average pre-pandemic, which doesn’t help to absorb 3 million tons a year for four years. How are you managing steel processing differently to access these new mills? Do you anticipate that some of your prior suppliers may disappear and are you going to deliberately hold lower inventories out of concern that we don’t see $2,000 a ton or $1,500 a ton anytime soon?
Tim Adams: So there’s a lot of a lot of questions packed in there. So I would say we are deliberately always trying to drive down our inventory in terms of tons, right? We recognize that the price of steel is volatile. And we want to keep those tons as low as possible at all times, right, because it’s just sleeping money. And that becomes even more important when we’re standalone. I think in terms of new capacity coming online, what we envision is – and we don’t participate in the plate market, but in the sheet market, I would say that we will use those mills. I’m not worried or we’re not worried about any potential suppliers going away. We welcome the new capacity. We think it’s great. And we will try to use those mills to gain access to customers we don’t already have. If those mills are located in southern Texas, we will attempt to go after business that’s down there that we haven’t traditionally had access to.
