Michael Petras: I dig in that business very frequently. I would just make sure we understand that, one of the things we’ve talked about in the past, that business has been a consistent performer pre-pandemic. It was probably the mid-30s in margin rates. We got a big bolus of volume that came in PPE that was great mix that we really did a great job digesting. It took our margin rates up significantly higher than our expectations. We were able to execute against that. And coming out of that, it’s been a challenging environment with labor and volume. But I’d say overall, I spent quite a bit of time there, but Joe and the team doing a really good job. Lots of good work in growing our pharma business and our presence there continue to drive customer satisfaction.
And really, overall, the thought leadership they bring across the industry in the company has been good. That sort of volumes we’d like though, so we’ve got to continue to work on that but it’s something that we all spend time on making sure we’re doing the best we can and taking care of our customers in that segment.
Operator: [Operator Instructions] The next question is from Michael Polark from Wolfe Research. Please go ahead.
Michael Polark: Another twist on the guidance update. Michael, to your credit earlier this year, you were calling out potential destock in amongst device customers, you were saying that ahead of your close peer who is now also saying it. And so I look at the quarter and you missed the Street a little bit. You hit us. Sterigenics was again, a little light versus the Street in line with us. If you hadn’t told me any adjustment to the full year, I would have, I think, with the straight face been able to pencil out the back half as it previously was so kind of getting back to your old range. And so look, thematically, you seem to have anticipated some of these challenges. I’m just wondering what changed. Is it just thematically, you had it numerically, it was softer and that’s the answer? And maybe bring in John here. John, just curious if there’s kind of a change in guidance philosophy now that you’re in the seat. So any color on this front would be great.
Michael Petras: Yes. Thematically, the time when we talked last time, Mike, we saw some concerns around the softness, but you don’t know exactly — as we’ve talked about in the past, we don’t know exactly where our customers’ inventory levels are. We’ve got thousands of customers on the Sterigenics side, and how that’s going to play out. It’s a really mixed bag. As I mentioned earlier in this call, we’ve got some categories that are doing really, really well. And then, there are some others that aren’t in just the impact of that. I think to your point, thematically, we’ve seen it. And numerically, we wanted to make sure we’re being thoughtful as we give guide the rest of the year based on what we’re seeing. But we are still very bullish on this business overall and our ability to continue to deliver significant growth year in and year out.
It’s just right now, we want to make sure we’re being responsible in messaging to you. John can give you reaction to philosophy and guidance but —
Jonathan Lyons: Yes. My initial reaction is that Michael and I are very much aligned on our approach to this. We want to tell you what we see in a timely manner. We want to look down the field and make sure we’re telling you what we see and hit the numbers that we put out there. It’s very important to us, and we’ll continue to work at it.
Michael Polark: Helpful. For the follow-up, just can you refresh us on just Sterigenics capacity expansion projects? How many are in process and over the next, say, 18 months, what do you expect to start going live and filling up?
Michael Petras: Yes. So we’ve got four of them still in process, and those will start rolling out. One late this year and then a couple into next year and the following year.
Operator: And ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to Michael Petras for any closing remarks.
Michael Petras: Great. Thank you, Chad. Thank you, everybody, for joining us this morning. I appreciate your time and support ongoing and have a great day. Thank you. Bye-bye.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
