Jim Lico: Well, as we said, I think in the first half, we’re going to see some of those declines as we described. And I might note, point-of-sale is still really strong. So at Fluke and Tek, we normally get that scenario in a coal mine question around Fluke. And quite frankly, Fluke’s point-of-sale has stayed strong. So, we think that will moderate as some of the macro impact certainly moves that number down. But you’re working on such high comps relative to the last few years is that any moderation whatsoever could make it look negative, but really, quite frankly, is not a significant issue relative to both the backlog and kind of where we’re at relative to the historical perspective. So, yes, we’ll — some of that improvement in the second half is comps for sure, but some of it — we think Sensing probably as an example, probably stayed a little rough through the year.
And we get — we know what the OEMs are doing right now. So, we mentioned in the prepared remarks some places in industrial, like industrial automation and some parts of the world like China. But on balance, when we look at the sum total of Sensing, Fluke, and Tek, we still think there’ll be a little bit of improvement in the second half. But we don’t need a big improvement necessarily to really deliver what we described. It is as we talked on a couple of the questions, we’ve got some backlog as an insurance policy against those things may be declining a little bit more than we anticipated.
Joe Giordano: Okay. So, you’re saying it’s more of a dollar thing. I mean more of a comp mask think than dollars, I guess?
Chuck McLaughlin: That’s right. That’s right. I mean we’re really looking at some pretty significant growth rates over the last couple of years in orders that were much bigger than our revenue numbers because of the supply chain issues and the creation of a bigger backlog. And quite frankly, a bigger pass-through backlog, which we started to burn down as we’ve talked about throughout the day.
Joe Giordano: Okay. And then just last for me. You talked about, I guess, theoretical M&A on the call so far. But if you were — in a theoretical situation where equity was a component of a purchase, like how do you think about what your return hurdles would be in scenarios like that where equity is part of it?
Chuck McLaughlin: Well, first of all, I think it’s clear we’re trying to convey here is discipline will continue to be the word of the day relative to M&A. And I think we — our return hurdles are going to be what our return hurdles are. We’ve talked about 10% ROIC for the various kinds of deals, and we’ll continue to think about that. I think what we’ve been trying to describe is situations in which we’ll be disciplined. I think what you’ve seen in 2022 is the strong returns of that, certainly the most recent M&A that we’ve done for patient and service channel, beating their first-year numbers as an example of that. But also the deals that we did five, six years ago. that are just performing outstanding like Gordian and eMaint and Landauer.
So, I think we’re in a great place from a balance sheet perspective to deploy capital. And I would be much more focused on our discipline around returns and our discipline around accelerating strategy in places where we can really do that.
Joe Giordano: Thanks guys.
Chuck McLaughlin: Thank you.
Operator: We are all out of time for questions today. I would like to turn the call back over to Jim Lico for closing remarks.
Jim Lico: Thank you, Leanne and thanks everyone for spending the time with us today. We really appreciate — we know you’re busy this week with a number of things. I think what you heard from us today is a real sense of pride of what we did in 2022. We said 2022 is going to be a showing year and I think what you saw through the quarters and certainly in the full year numbers, the real power of the Fortive Business System and the building for us — use the FBS tool to accelerate. We try to convey the fact that getting back into in-person Kaizen is something that’s really important to us from a cultural perspective and from an ability to deliver in any sort of economic time. And that acceleration of in-person events we tried to demonstrate and show you some examples of that.
We’re back to work in that regard as we get into 2023. We look forward to continuing to share our strategies in May with you, and I think, what you’ll see this year and what you’re seeing in our guidance is the continued improvement in our portfolio and the strength of our culture in our business system. Special thanks to our 18,000 teammates around the world who made that happen and make it happen every day. Thanks, everybody. Have a great day. We look forward to the follow-up calls, and we’ll see you soon. Take care.
Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.
