David Dunbar: Yes.
Gary Prestopino: Okay. All right.
David Dunbar: Yes. And part of the reported margin change in the group also has to do with mix. You probably recall that the magnetics business in general has a lower margin than the SST, the switches and sensors. So as that mix changes so your mix down a little bit of margin. But the underlying businesses, the margins are improving.
Ademir Sarcevic: Right. That’s right.
Gary Prestopino: Okay. Thank you.
Operator: Our next question comes from Ross Sparenblek from William Blair. Please go ahead.
Ross Sparenblek: Hey, good morning, guys.
Ademir Sarcevic: Hey, Ross.
David Dunbar: Good morning, Ross.
Ross Sparenblek: Maybe just to put a finer point on Chris’s question with the rescheduling of the EVs. Can you maybe give us a sense of what is sitting in that backlog? I mean it looks like the orders are decently well and I know the second half expectations were for at least some pretty stable Chinese demand coming through that could help drive those margins. So, anything around that would be helpful.
David Dunbar: Well, we are seeing — the slowdown we are seeing is in North America and Europe, primarily, as you said China is plugging along and we are in — those China vehicles that operated at more than 400 volts. So there’s — I don’t have a backlog number for you, but the scheduled — what we do with these, we get awarded a platform and we get an annual schedule from the OEM of what they think they’ll need in the quarter. So what we are getting from some of the European and American EVs is kind of a push out of that schedule.
Ross Sparenblek: Yes, the expectation is still there. You know you should have some good volume and at least some year-over-year growth in the second half from Chinese adoption, right?
David Dunbar: Yes. Chinese adoption, but also in Europe we anticipate growth just not as much as we had thought. Growth in China, you know some growth in Europe. North America, don’t know if that’s going to be flat or slightly up.
Ademir Sarcevic: And Ross, just as a good reminder as you know our content per EV is three times to five times the content in ICE. So even if the EVs are growing at a lower rate, as long as they’re growing it’s a good thing for us and I think to David’s point you know because of all the headlines we are seeing you know these days and some of the push outs, the growth is slowing down, but again our content is still, you know we are still benefiting from the content change and we expect that to continue in the years ahead.
Ross Sparenblek: Yes. No, absolutely. That’s why I’m just — I’m trying to reconcile the $7 million of cost savings actions, I mean come into this quarter you know everything seems pretty steady EVs in the second half. Now, we need to do some restructuring. So it feels like maybe something changed. I understand the mix with the magnetics the volume wasn’t that lower year-over-year. I mean generally, just general industrial PMIs slowing and that’s just kind of the pause or concern for you guys at Electronics?
David Dunbar: Yes. Because like I mentioned before, I think it was to Chris’ question. Our new product sales are up. Our new applications are up. And the Fast growth market numbers they’re growing not as fast as we thought. So the problem is not there. It’s just this kind of legacy-based general business through distribution and through the various, and sundry applications that I mentioned earlier.
Ademir Sarcevic: Yes. I know, and the cost action electronics, these are the app, you know we might be accelerating some of those actions, because of the market softness. But you know as part of our margin expansion progress you know to hit those targets that we gave, you know we always look at our back office structure, our cost of goods sold components and this is just one — you know one way we are working through to make sure we continue improving our margins and protecting our margins through some of the softness, if you will.
