And we will get some defense businesses, but we don’t want our defense businesses to grow beyond where they are today. We have a healthy balance of 25% defense, 75% commercial. Almost half or 47% of our commercial businesses are overseas. We’re also expanding some defense business in the NATO countries and the Middle East. But having said that, I think my colleagues and I agree that we do not want to change our portfolio from what it is today to something that is not sustainable. If you’re singularly focused on one market, when that market suffers, then it takes the whole company down. Our balanced portfolio is our resilience and our ability to tolerate changes. And as you can see, while we have some weakness in certain areas, we have strength in other areas.
We have growth in instruments, in A&D, Engineered Systems. And so I don’t think that will change. Now I’m talking about three years. If you go beyond that, then I can’t predict, because the world is changing so much right now. I mean, it’s such a difficult environment in some cases. It will depend on what happens and our strategies will evolve.
Operator: [Operator Instructions] We have one more in queue at this time. We’re going now to Noah Poponak. Please go ahead.
Noah Poponak: Congratulations to everybody on the new seats or responsibilities. Robert, I just want to go back to the DI margin. You just printed a number that you previously said you would get to in two years. It sounds like you’re saying the majority of the explanation for that is that you performed an incremental cost out. And so, if that’s the driver, wouldn’t that kind of sustain in the margin from here? And therefore, why would that margin pull back from the level that you just reported?
Robert Mehrabian: I mentioned the margin for the year of 22.7% in DI, which is 35 basis higher than it was what I quoted in Q2 — at the end of Q2. What has happened is that the cost out is important because it’s not just people, it’s the consolidation of our facilities as well. We have not done that. We were all focused on, at first, fixing our export control issues, fixing our tax liabilities. We’re still working on tax liabilities somewhat. But what’s happening is that the defense business at Digital Imaging, specifically FLIR, are getting better. And machine vision, while it’s getting worse at the present time, it sooner or later is going to have to come back. And so, I was a little cautious about for next year when I was asked about the margins, and I stayed with the 22.7%, maybe 22%.
But over the long term, there’s no reason that these margins in these businesses could not be like margins in our Aerospace and Defense, which we’re predicting this year to be 27.6% or our instruments with our 26.1%. There’s no reason that margins cannot improve and get there.
Noah Poponak: Okay. That’s helpful context. I understood part of the challenge to be that there’s been volatility in defense outlays compared to what’s been authorized at the end market level. And so, with regard to your defense business inside of Digital Imaging, you were gearing up for higher defense revenue that then just kind of surprisingly didn’t come through. And so, did that come through in the third quarter, or what was the growth rate, I guess, in the defense piece of Digital Imaging in the quarter?
Robert Mehrabian: We have several large programs that came through in the third quarter. And large — for us things are below — above $10 million, $20 million, for example. We got some counter unmanned vehicle systems that we partnered with Kongsberg. That was a nice win in Q3. We’ve also penetrated some of our nano-drones are now moving into India. We had a nice award from there. Also, our surveillance program, we had to straighten out some of the issues with our gimbals and vibration and products that we inherited. We straightened those out, and we have now a Navy award that’s about $35 million. So surveillance grew in Q3. And I think with the many drones and our newer products, we think we’ll do fine. Our unmanned programs we expect to grow in Q4.
