David Schulz: Sam, we are. It’s — if you take a look at what we’ve experienced year-to-date, we posted a 5% in Q1. We posted a 3% here in Q2. We do expect there to be still positive pricing in the back half of the year, but an additional step down in the back half. We’re confident in the 3% to 4% for the full year. From an overall pricing perspective, we have continued to see the number of price increase notifications decrease sequentially as we’ve continued through this year. So as we take a look at what’s known for the back half, the number of price increases, the rate increase, behind those increases is also lower than the prior year. And as I mentioned in the prepared remarks, we also do have some pure commodity categories where we do have a headwind when it comes to price.
Sam Darkatsh: I think you’re talking year-on-year, though, I was talking sequentially. Are you expecting lower prices in the back half versus the second quarter?
David Schulz: No, no. And again, for the commodities, you’re right, it was a year-over-year comment in the prepared remarks. We don’t project or predict what the commodities are going to do. But as we think about the pure supplier price increase benefit to our top line, it will continue to be positive, but less than what we have in the first half.
Sam Darkatsh: Got you. And then my follow-up question. Can you remind us at this point what percentage of your overall backlog is EES versus UBS? And then same question as it relates to the inventory within your backlog, I’m guessing that’s more overweight EES because a lot of UBS is direct ship. But can you put a little bit of help around the mix of your backlog right now between your segments?
David Schulz: Certainly. So the — again, we’ve never broken out the specifics by strategic business unit within our backlog. There are varying levels of project business, and recall that only project business is in the backlog. So we’ve not provided that. But as you can see, what we’ve been seeing in our backlog over the last couple of quarters is we’ve been seeing the CSS backlog has continued to come down. That’s primarily because their supply chains heal faster than the balance of the business. And within UBS, we’ve been relatively consistent. You’ve seen some slight moderation in their backlog versus the prior year. Where we continue to see the growing backlog within EES. I would characterize EES makes up about half of our total backlog.
And again because of some of the supply chain issues that we’ve been dealing with, even though some product categories have gotten better, we still have some extended lead times in our backlog based on certain product categories, including switchgear within EES.
John Engel: I mean that’s an important point, Sam. I mentioned that lead times have come back to pre-pandemic level pretty much across the board in CSS. We’ve seen rapid reduction lead times for both UBS and EES as well across the majority of the portfolios. But we’re still seeing well extended lead times for switchgear, which is part of EES, breakers and transformers in Utility, as well as rubber goods. So when you take those categories, we’re talking about we’re still seeing significant extended lead times. Think of it as more of the engineered components, the engineered subproducts and solutions.
Sam Darkatsh: That’s all I was getting at, John. I was trying to figure out, all right, if we wave the magic wand and switchgear availability is normalized and transformer availability is normalized, how much of your inventory can you monetize, can you liquidate?
John Engel: Yes, that will accelerate our ability to ship against that backlog. We’ve been saying we expect backlog to come down sequentially, right? We’ve been very clear about that, because, again, that’s the other end of the supply chain cycle as the lead times of collect. We’re seeing that effect in CSS, those backlogs are coming down sequentially. We haven’t seen that in EES yet or in UBS materially. But again, you’re on the right point. As switchgear and the engineered components and EES, transformers and other engineered components in UBS come back to equilibrium, well, that creates an acceleration effect in terms of us being able to ship against our backlog and relieving inventory. Correct?
Sam Darkatsh: But is there any quantification of that for some direct —
John Engel: And I think it’s completely a function, Sam, of how those lead times come in. We’re still seeing a year-plus leads on gear and transformers.
Sam Darkatsh: Okay. I’ll defer to others. Thank you for the help.
