Jack Meehan: Thank you.
Operator: Your next question comes from the line of Vijay Kumar with Evercore ISI. Your line is open.
Vijay Kumar: Hey, guys. Thanks for taking my question and congrats on the Q1 execution. Maybe, Shawn, for you, the — you beat Q1 by 500 basis points, right, at the minimum relative to your expectations. So that’s annualized 125 basis points, but you’ve raised guidance by 50 basis points. So, did anything change around the back half assumptions that makes you perhaps want to be a little bit more cautious?
Shawn Vadala: No. Hey, Vijay, thanks for the question. No, I mean, we’re not seeing, I want to be clear. We’re not seeing anything negative or new negative changes in the business. We just feel like it’s still a little bit early in the year. You know we only have 1.5 months’ worth of backlog. And we’re just a little bit cautious here kind of going into the second quarter and we’d just like to have a little bit more visibility to the second half of the year. When I think after the end of the Q2, we’ll be in a better position to reassess the second half. But I think we’re still optimistic about growing in the second half and — but we just like to have a little bit more visibility here before we kind of get out over our skis.
Vijay Kumar: Understood. And maybe, Patrick, for you as a follow-up. You know, Shawn mentioned visibility for back half and a backlog rate. What is typical backlog for Mettler? When you say visibility, is that — is that sort of being driven by funnel activity, customer conversations, or are you hoping or do you have any expectations for China stimulus to play out in the back half?
Patrick Kaltenbach: Thanks for the question, Vijay. Look, as Shawn just said, we have about 1.5 months of backlog. So we have a pretty fast turnover in most of our businesses. When we look at the second half, again, the comps will get much easier for us based on what we have seen last year. So that of course implies some positive growth for the second half. We see very good customer engagement out there also here in Q1 and our teams are in great discussion with customers. I think there’s great interest in our new products that we just launched and we are confident that we are really well positioned. What we’re seeing, however, is that the sales cycle times are still somewhat longer at the moment. But as Shawn also mentioned, given where we are with the portfolio, given what we see in terms of customer engagement, we don’t see any negative trends or changes to what we have said in the first quarter.
We think we are well-positioned to achieve the goals we have for the second half to be honest.
Vijay Kumar: Understood. Thanks, guys.
Operator: Your next question comes from the line of Michael Ryskin with Bank of America. Your line is open.
Michael Ryskin: Great. Thanks for taking the question, guys. I’m going to ask another one about market conditions as you go through the year because I think that’s where there’s the most interest. Just following up on your comments just there. Is there anything in particular you’re looking for as you go through the year? I mean, is it really just a matter of time of — you don’t want to call for an improvement until you’re only about three or six months out or are there any specific indicators, whether it’s PMI, whether it’s funding levels, whether it’s just some budgets being unlocked, whether it’s a recovery in China. Just walk us through sort of like what are the indicators you’re looking for as you go through the year to gain a little bit more confidence in that reopening of the markets and that acceleration.
Shawn Vadala: Yeah. Hey, Mike, this is Shawn. Hey, maybe not to entirely repeat what we just said, but I probably will echo it to a large degree. I think it comes back to this sitting on pretty much 1.5 months’ worth of backlog. We do see good activity in our pipeline. As Patrick, I think, mentioned before, we are seeing order cycles being elongated a little bit in the first quarter. Certainly, it would be nice to see those that the conversions actually starting to happen here in the second quarter, but the activity is good. But I think it comes back to we only sit on about 1.5 months’ worth of backlog. We have still some difficult comparisons on a multi-year basis here in the second quarter. It would be nice just to see to gain a few more months here and just kind of get a little bit closer to that second half.
And then I think we’ve generally been — our second half growth story has — is also largely been about easier comparisons. And so it would be nice to see how the market kind of develops here in the second quarter in addition to those easier comparisons. And of course, hey, there’s plenty of uncertainty and risks in the world that are out there, nothing specific to our business, but whether it’s economic risks or geopolitical risks and we’ll just kind of see how the world plays out here for a few more months.
Michael Ryskin: Okay. Thanks. And I want to ask one on the P&L. I mean, 1Q earnings beat pretty handily, obviously shipping recovery and the underlying business being better probably played a decent role in that. But could you sort of parse that out? I mean, you gave a lot of color on what revenues would have been if it wasn’t for the shipping recovery. Any color you can give on the P&L in terms of how much benefit it was the EPS? And what I’m getting at is your 2Q EPS guide of roughly $9 is essentially flat versus 1Q. You normally see a pretty nice sequential step up. So again, I appreciate that the shipping recovery had some noise to that, but I’m just trying to get a better sense of like the margin cadence 1Q to 2Q. Thanks.
Shawn Vadala: Yeah. Hey, so in terms of the first quarter, as we kind of said, we benefited about 6% in terms of sales from the shipping delay benefit. Our expectation was that we were going to benefit about 5%. So we had a 1% benefit. So you can kind of maybe draw your own conclusions of what that would have meant or not. But maybe more importantly, if you just take that reported number of sales in Q1 and you look at our guidance for Q2 regardless of shipping delay benefit, like with that benefit, the reported number is actually a very similar dollar number sequentially to what we see in the second quarter. And if you look at the EPS for Q2, it’s actually our guidance is higher than Q1, which I think points a little bit to some of the good execution we are doing on our side in terms of cost savings and productivity measures.
