They’re working their way into those kind of consumer-driven markets, which again, we have lighter exposure on broadly, but it’s still important because that trend will continue, and it’s one we have to set ourselves up for. Initial prototyping, clearly easier market, lower risk for them to get into, but it is definitely – they’re definitely working on the industrial markets now, beginning with the easier ones, and working their way up to the harder ones. So, hopefully it answers both parts of your question.
Ananda Baruah: Yes, absolutely. Appreciate the context. I’ll just put an eye on time here. I’ll see leave it there and just get you guys on the call. Thanks a lot.
Jeffrey Graves: Okay. Well, we look forward to talking to you, Ananda, as always. Thanks.
Operator: Thank you. Next question is coming from James Ricchiuti from Needham & Company. Your line is now live.
James Ricchiuti: Hi. Good morning. Most of my questions have been asked, but just wanted to follow up to see if I can get a little bit more color on the decline in the industrial business, which the quarterly level looks like the lowest quarter of the year. And you talk about areas where the business has held up better, I think aerospace, defense, semi. But yes, what areas in particular were weak in the quarter and did that – was it more pronounced in any one geography?
Jeffrey Graves: No, it was – Jim, I’ll try to answer all of those. It was pretty equal between the US and Europe. Most of our sales are in US and Europe. So, it was pretty equally split there, because frankly, central banks in both parts of the world have been raising interest rates. It was much more consumer market-driven, consumer end market-driven. So, if you look at all of our customers, industrial customers, big industrial companies, customers on the industrial side, some of them serve consumer markets. And I think the concern, Jim, that they all had was, with this rapid rise in interest rates, were consumers going to be able to buy as much and did they need the capacity? So, it’s not like they canceled orders, but they just – again, I keep using the phrase, they slow rolled POs. So, you call them and say, where’s the PO?
Yes, next week, next week, next week, it’s coming. So, they weren’t canceled, and I believe they are all coming. I believe we’ll continue to see a slow roll until they’re convinced that the consumer isn’t going to go away. And the closer you get to specialized equipment like semiconductor equipment manufacturer, very strong for us. We’ve been working in that market for a long time. So, people that are putting in semiconductor equipment, heavy industrial equipment, that business remains strong, no doubt about it. Defense and aerospace remain strong. It was, as you go closer to companies that make consumer products, those are the ones that were hesitant on the CapEx spend. And with all of that said, industrial hung in there better than healthcare last year.
But again, healthcare was dominated by dental being off due to orthodontics. And then again, they had a lot of capacity in printers themselves. So, you saw some roll off in printers, even in healthcare. But industrial, we almost offset the decline by new customers coming in. So, while we didn’t see an uptick, we didn’t see as much of a decline on the industrial side either. So, if there’s a ray of sunshine in there somewhere, it’s probably that. My disappointment was Q4 is usually a very strong quarter and clearly it was not. We did not see the lift. We usually see people just hung onto their purchase orders.
James Ricchiuti: Got it. And just last question from me is just on the non-GAAP OpEx to what you’re guiding for in 2024, that would seem to suggest a pretty healthy step-down in Q1, but I don’t know if that’s going to be more backend loaded with some of the restructuring actions you’re taking.
Jeffrey Graves: Yes, Jim, I would say it’s probably a little bit more backend loaded. We took a lot of action quickly in North America when we launched this in terms of the headcount component. The tricky part is now the site closures, which again are split between US and Europe. The site closures take a little bit more time, and then the accounting resolution isn’t done until you’re out of the facility basically. So, we’ve got to be a little careful. So, you see a range of OpEx in our guidance. And again, I’d like to think we’ll do better than that, but it’s – we try to be realistic about timing because I do think you’ll see a big hit in the first half, which is good, but a lot of the benefits don’t start flowing through until the second half.
James Ricchiuti: Got it. Thank you.
Operator: Thank you. We’ve reached the end of our question-and-answer session. I’d like to turn the floor back over to Dr. Graves for any further closing comments.
Jeffrey Graves: Thanks, Kevin. Listen, thank you all very much. I know we went beyond time, but I wanted to field questions because I know it’s a volatile time for our company and for the industry. So, thank you very much for hanging in there and asking the questions you did. I appreciate you joining. We are cautiously optimistic about 2024. We look forward to the year ahead. We’ll look forward to updating you each quarter on progress. Thanks very much for calling.
Operator: Thank you. That does conclude today’s teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
