Michael Stubblefield: Right. I certainly understand the question, Michael and we’re as anxious as you are and everyone else is try to understand and get some clarity as to how the shape of this recovery is ultimately going to unfold. Unfortunately, when we think about the short order cycle of our business, particularly in the lab part of our business, which is measured in days and weeks. We really don’t have a crystal ball that tells us when these orders are ultimately going to turn around. And so we end up then trying to triangulate just based on what customers are telling us about their expectations for next year, how the destocking trends are playing out and what’s the health of their overall inventory. And as I look at the feedback that we’ve aggregated here coming out of the third quarter, and look at the sentiment and the expectations from our customers, particularly within Biopharma, overwhelmingly, they’re anticipating next year to be a stronger year than 2023.
Undoubtedly, inventory levels are improving. Many customers reporting normal inventories at this stage and the percentage of customers that are holding outsized inventories has declined significantly. So the signals continue to be positive, but with a short order cycle business, like we have, it is difficult for us to get really specific, particularly where we sit here in October to call what the timing of a turnaround would be going into next year. So we’ll take the benefit of the next couple of months, and we’ll be back to you on how we think about ’24 when we get into February.
Michael Ryskin: Okay. Fair enough. And then just kind of a follow-up on that, Michael, just to your point on the short order — the short-cycle nature of the business and some of that limited visibility. There’s been a lot of updates in Biopharma in the last couple of months in terms of major cuts, reorgs, the Pfizer announcement a couple of weeks ago, certainly was the most notable one, but not the only one. So can you sort of contrast that with your commentary on improving tone and improving sentiment? I mean is that — some of the cuts that we’re seeing in pharma, is that something that you’ve already been experiencing for a couple of quarters, so it’s not really incremental or why is that not correspond to what you’re hearing from your customers now?
Michael Stubblefield: I think that’s the right way to think about it, Michael is, we’ve been calling those headwinds out now for a couple of quarters and have had that baked into our outlook in the second half. So the fact that, particularly those that had outsized COVID exposure are starting to curtail activities and reset their outlooks and adjust their activities accordingly, is not incremental information for us. It’s a trend that has fueled this cautionary posture that we’ve seen from large pharma over the last couple of quarters. And with some of those resets now in place and I would say the reprioritization of pipelines and focus on things like cell and gene therapy, it really does favor our model where we’re well positioned with a pretty compelling offering into that space. So yes, I think the way you’re thinking about it is about right. These are not incremental to what we’ve already been experiencing the last couple of quarters.
Michael Ryskin: Got it. Thanks so much.
Operator: The next question comes from Patrick Donnelly with Citi. Patrick, please go ahead. Your line is now open.
Patrick Donnelly: Hey, guys. Good morning. Thanks for taking the questions. Brent, maybe one for you on the – Yeah. Good morning, Michael. Brent, maybe just on the margin side. I’m just trying to get a little more granularity in terms of the moving pieces for 4Q, would you be able to quantify what feels more onetime, so again, particularly the inventory charges? Is it fair to kind of ballpark that around the cash flow increase bridge like that $12.5 million? Maybe just try to flesh that out a little bit for us as we try to think about, again, kind of that core 4Q number maybe outside some of the one-timers.
Brent Jones: Yeah. I mean, we — thinking about one-timers versus on a rate basis, absolutely for sure, absorption is an issue. You always have to manage as Michael indicated there. I mean that will depend a lot on the go forward, but we’re pretty tight attention to that. So I think that has a decent onetime nature as well as the inventory is definitely a onetime nature. So on a rate basis, probably at least half of it I’d put to onetime and the rest of it is real based on the underlying activity.
Patrick Donnelly: Okay. That’s helpful. And then Michael, maybe a similar vein, just on the pricing outlook. You mentioned some of the kind of contracts you got on the academic education side. But maybe just talk about overall pricing, what you’re seeing in the business? How much discounting you guys are doing versus seeing pricing increases? And then similarly, I guess, in that bioprocessing market, as that comes back, how you think about the pricing environment as you work your way towards the recovery?
Michael Stubblefield: So pricing for us has been relatively stable throughout the year. We did our customary increases early in the year, have been quite frankly pleased that we haven’t had to go back to the market multiple times this year. And I know our customers appreciate the relative stability we’ve been able to bring to them this year. And so it’s been relatively quiet throughout the year from a pricing standpoint, and we’re getting the traditional price over COGS contribution to our margins that we would have seen historically and that our underpinned our long-term growth algorithm. So as I think ahead to the pricing environment, I would say it’s constructive. And ultimately, as we think about the actions we’ll take next year or going into next year, it’s going to somewhat depend on where inflation starts to settle out.
And we’re right in that process now of getting the quotes and pricing terms with our suppliers which is an important input into how we think about then setting our customer pricing going into next year. But it’s been, I would say, constructive and stable and in line with our expectations.
Patrick Donnelly: Understood. Thank you, guys.
Operator: The next question comes from Rachel Vatnsdal with JPMorgan. Rachel, please go ahead. Your line is now open.
Rachel Vatnsdal: Perfect. Thank you for taking the questions. So I want to ask on Healthcare, just given the high-single digit decline were stepped down from the mid-single digit growth in 2Q. So you planned some biomaterial strength, but that was more than offset by the consumables weakness in the Americas and Europe. So can you just walk us through some more color on why there was that sequential step down? And are you expecting Healthcare to return to growth into 4Q and beyond?
