Nathan Jones: I am going to follow up on Bryan’s last question on the Life Sciences margin and see if we can get any more help with the progression of that through ’24. Margins swung by 30 points from the first quarter of ’23 to fourth quarter of ’23. Just — I know, Scott, you said positive for the year. Is there any help you can give us with — I mean, I assume they’re going to start out negative in the first quarter. Should we be thinking about something like the fourth quarter margin in the first quarter? And how that kind of ramps up through the year to get to positive?
Scott Robinson: Yeah. I mean we’re looking at next year where we definitely stepped up our investments in the fourth quarter. So as sales increase, it’ll certainly help cover those costs. Don’t forget we also have the Disk Drive headwinds this year that we expect to abate next year. So we’re looking at low single-digit profitability. And for the most part, relatively consistent throughout the fiscal year, achieving a positive operating margin for the next year. So there’s not any massive swings contemplated. The really big investment period was the fourth quarter, and we had the Disk Drive headwinds that will normalize sequentially going forward. So we feel like we’re in a better position and the results will reflect that.
Nathan Jones: So the margins — you’re not thinking the margins in Life Sciences have a big ramp up throughout the year, they’re relatively consistent? I mean if you’re assuming volume gets sequentially better through the year, I assume margins would get sequentially better through the year, but there’s not a huge variance in those numbers.
Tod Carpenter: There’s not a huge variance in the numbers, Nathan. And Life Science will be actually a little bit lumpy in the year more than some of the other — than the other two segments, but just slight degrees of difference throughout the year.
Scott Robinson: And we put out the Investor Day target, right, of 22.5% operating margin for Life Sciences three years out, and we’re still committed to that number and believe it’s achievable.
Tod Carpenter: Right.
Nathan Jones: And that just comes from absorbing these costs with revenue as those businesses ramp up, right? I mean you’re still in a position with a number of those businesses where revenue is pretty minimal.
Tod Carpenter: Exactly. And when you look at what additional CapEx might be needed in the businesses, that particular — the way we look at that is we will need some additional manufacturing capability across the Life Sciences segment. We will have that investment within the next three years, adding that in to be able to meet the manufacturing capabilities. But we take that all within this guide, we put that all within the investors’ targets and gives us confidence within the targets that we talked about last April.
Nathan Jones: Maybe we could get some more color on the $210 million opportunity pipeline that you talked about, Tod. Half has achieved technical approval, I guess that means the other half is still waiting for it. Is that $210 million all business that you expect to win? Or is that business that you still have to compete to win? And how should we think about that kind of those projects being released and ramping up?
Tod Carpenter: So the $210 million is the opportunity pipeline, and that’s why we pointed out that we’re 20% of it is approved, right? So 80% of it, we are still looking to go through with the particular OE approval process or we are in flight of the approval process. So — but that’s near term what we’re chasing. And we’ve looked at that $210 million over a seven-year period. It’s important to also understand that what we baked into this particular guide out of those seed planting-based businesses is very little revenue for this fiscal year. It really starts to show a bit more next year and then ramps up.
Nathan Jones: Great. Thanks for taking my questions. I’ll pass it along.
Operator: Your next question comes from the line of Brian Drab with William Blair. Please go ahead.
Brian Drab: Hi, good morning. Thanks for taking my questions. The Univercells acquisition, curious, that was $10 million in revenue in ’22. You paid a good multiple for that, I think it’s like 13.5 times trailing sales. So I assume that’s growing rapidly. What should we model for that business in roughly for fiscal ’24? It must be in the, I guess, like $15 million range or something thereabouts?
Tod Carpenter: Yeah. We baked that into the current guide that we gave you, obviously, on with what our expectations are. We do expect it to grow double digits within that business. But we also have some pieces to put in place in order to be able to execute that, which we have all put in on the revenue side as well as any particular cost on that into this guide that we just gave you, remembering that we have not owned that business very long. So we’ll be integrating it throughout this year.
Brian Drab: Yeah. Okay. Got it. Makes sense. And — so with the 20% forecast for the Life Sciences segment, I guess maybe like I’m going to probably model it like 15% organic revenue growth. And I’m just wondering — can you — should I discern anything from the press release in terms of the order that you listed the drivers of growth in Life Sciences because Food and Beverage, Bioprocessing then Disk Drives? I’m just wondering like which of those is expected to contribute most of the incremental organic revenue in fiscal ’24, which of those three segments…
Tod Carpenter: Yes, it’s going to be broad-based, Brian, but you’re right. We’ve grown the Food and Beverage business double digits for a number of years. We expect that to happen again this year. And then, of course, we noted that our Solaris backlogs are at all-time highs. We would have expected that. That just is a good indicator to you that we’re executing quite well. And then we would expect Disk Drive coming off easier comps to have a low double-digit type of a growth rate. So you pack all that together, that’s how — that’s what really gives us confidence in the numbers we’re giving.
Brian Drab: Okay. Got it. Thanks. And then just one last one. Can you talk about customer development within the — like acquisition progress that you’re making with customers within the Life Sciences segment? How many customers do you have now? The Solaris backlog, is that across many different customers? Or is it one big project for one customer? Any color on that would be really helpful. Thanks.
Tod Carpenter: Yeah. Thanks, Brian. So it’s not one big project. It is more broad-based. And remember that Solaris makes the very small desktop type of bioreactors that would go into laboratory type of use as well as the larger project type of bioreactors that you’re referring to. Their backlog is a bit more broad-based than one big elephant, so to speak. So we’re happy with the progress that we have there. And then with the newer acquisitions, we’re also happy with the very, very broad-based customer acceptance of those particular products and are working with a number of opportunities.
Brian Drab: Okay. Thanks, Tod.
