Ed Breen: Yes, Steve, it kind of takes four to five months on the raws to work its way through in our system and we build a customer. So some of this, we’re obviously going to see now in 2024 but the procurement team has been working very aggressively and Lori and I meet with a very consistent basis because it’s a big part of seeing up on 2024 for us. And by the way, Steve, just as a side note, the margins on the E&I, remember, not much of the walls were in E&I, we only raised prices 2% there. The predominant part of it is going to become in W&P. And the thing that affected the margins in E&I is really the absorption charge that we’ve taken. We we’re going to take it again in the third quarter, we’re probably going to take it in the fourth quarter, just to make sure everything is teed up for 2024, and that’s affected our – or like in the third – in the second quarter that affected our margins in E&I by about 400 basis points.
So without the absorption, we know we’re running that business north of 30, even in a reduced volume environment. So I feel very confident you all watched us run that in a 32%, 33% EBITDA range. I’m very comfortable when I look at our math that we’re in good shape there as we rebound.
Steve Tusa: And is there any risk around anything you’re seeing in pricing in W&P that when you look out to the second half or into next year, any aggression on pricing in those businesses?
Ed Breen: So very small. The one area we’re going to give up some price that we forecasted in the second half of the year is in the construction-related markets. We also had to raise very significantly in those markets because of what the raws did last year. So, we’ve made an assumption in this forecast that we’ll give up some of the pricing there. Otherwise, we’re feeling pretty solid across the rest of the portfolio.
Steve Tusa: Okay. Great. Thanks a lot.
Ed Breen: Thanks, Steve.
Operator: The next question comes from David Begleiter from Deutsche Bank.
David Begleiter: Thank you. Ed and Lori, how much did Spectrum add to Q3 and 2023 guidance?
Lori Koch: Yeah. So in total, it will give you about a little north of $200 million in sales at a 22% margin. It’s pretty consistent across the months, so you’ll take two months of it in the third quarter and then the full three months in the fourth quarter. From an EPS perspective, it’s really only about $0.01 on a full year basis once you factor in the loss of the interest income from the cash that we paid for the deal. There’s more of an EBITDA function versus an EPS.
David Begleiter: Got it. And then, just on destocking in Shelter, where do you think we are? I know you said you were closely end here or it’s moderating? How much further do you think we have to go Shelter Solutions destocking?
Ed Breen: I think it’s mostly done destocking by the end of this third quarter. And that’s talking to a couple of our key distributors and customers. One of the big box guys, by the way, was doing a rebalancing of all, their inventory by moving it around to different stores and regions. That’s how we were doing it. And they’re pretty much through that process. So I think the end of third quarter, we’re kind of there.
David Begleiter: Thank you.
Ed Breen: Thanks.
Operator: Your next question comes from Mike Leithead from Barclays.
Mike Leithead: Great, thanks. Good morning, guys. First question, your Corporate and Retained business came in a bit better than historically has. Can you just help us unpack what happened this quarter there? And just how that should trend going forward?
Lori Koch: Yes. So we had a really strong growth within Corporate M&M. It was driven by the EV piece, which is the largest segment of it. And it’s really from the EV growth in the overall Auto build growth. So Auto build were up about 16% in the second quarter, we would have posted a similar number. And we see really nice performance in the EV piece. So that’s what drove the improvement year-over-year primarily.
Mike Leithead: Great. And then second, just on E&I, you talked about reducing production rates to help manage inventory. Do you expect that to still be some degree of drag in the second half to earnings? And then just relatedly, how should we expect working capital to finish out this year?
