Jim Ricchiuti: I wanted to see if we could dig a little bit more into the way you see the year unfolding, it sounds like Q1 a little bit more seasonality. And I guess, with respect to the full year guidance, as you think about the balance of the year, are you making some assumptions of recovery in the shorter cycle business in the latter part of the year, particularly some of the areas that have been weaker, like the lab instrumentation and the industrial automation, machine vision area.
Robert Mehrabian : Alright. Yes. We’re right now expecting uptick in those businesses in the second half of the year. We think that what will happen is that we will have a linear ramp in sales and earnings throughout the year with about average revenue increase of about 4% and earnings as we’ve outlined up to $20.68, which would reflect also an improvement in margin from this year to next year of another almost 50 to 60 basis points. So yes, we’re anticipating that. On the other hand, we’re also adjusting our cost structure and if necessary, we’ll do more. So that our earnings remain healthy.
Jim Ricchiuti: With respect to the margin improvement that you’re anticipating I’m wondering how should we think about margins by some of the major business units just directionally?
Robert Mehrabian : Sure. Jim, we are expecting margin improvement in every segment. A little lower in instruments, maybe 25 basis points. We already have very healthy margins there. On the other hand, in Digital Imaging, about 80 basis points. In Aerospace and Defense, we think we’ll have 80 to 90 basis points. And engineered systems around 50 basis points. So overall, Jim, in the segment, we anticipate about 70 basis points margin improvement. And overall, for the company between 50 and 60 basis points. In a way, it’s kind of similar to what we achieved this year. Which was about 60 basis points over last year.
Operator: Next, we’ll go to the line of Greg Konrad with Jefferies.
Greg Konrad: Maybe just to follow up with the last question, but on the revenue side, given the commentary around book to bail, 4% growth for the year. Can you maybe talk about the assumptions between long and short cycle or from a segment basis for growth in 2024?
Robert Mehrabian : Yes, Greg, let me give you the segment first. And then I’ll try and answer the first question. From a segment perspective, with the instrumentation, would grow about 3.5% this year over last year. We think Digital Imaging will — going back to instrumentation, there’s a difference between the different businesses that we have. The marine businesses with healthy background backlog, as George mentioned, would grow about 6% to 6.5%, whereas environmental would be just under 3%, and we’re expecting T&M to basically hold. Going to Digital Imaging. We believe that the overall sales increase would be above 4%. Aerospace and Defense, about 5%. Engineered Systems, about 4%. And when you add all of that up, we expect an average of about 4% at this time.
Greg Konrad: And then maybe if we can just dig into digital imaging a little bit more. I mean the commentary and the release around product lines on the call was helpful. But is there any way just for Q4 in 2023 to kind of level set or put some numbers behind growth in space in health care versus maybe the declines you’ve seen in other parts of the portfolio?
Robert Mehrabian : Sure. Let me start with Q4, please, and then I’ll go to some of the others. In health care, we had really nice Q4. Revenue increased about 13.5% to 14%. In Aerospace and Defense, it increased about 5%. This offset basically weakness in our industrial and scientific vision systems. The flip side, if you go over to our FLIR businesses, we have really robust growth in our surveillance system, about 16.5%, and some of our detection products Overall, in Q4, FLIR revenue defense increased about 4.8%. Now going forward, to the future. I’ll make a little distinction between DALSA e2v and FLIR. We think that DALSA e2v would have a modest growth of about 3%, offset by about 4.5% in FLIR. As mentioned earlier, clear defense especially, is experiencing really good order intake — and we expect the growth there to exceed that of the rest of the imaging. So I can give you more detail, but that’s basically a summary of it.
Operator: We’ll go to the line of Ron Epstein with Bank of America.
Unidentified Analyst: This is Jordan Lines on for Ron. I wanted to ask, so for the backlog growth in the defense wins that you guys are seeing, how are you guys thinking about the risk of the CR?
Robert Mehrabian : Well, Sure. Obviously, CR is always an unpleasant occurrence for us. The way we’re looking at it is we’re only right now considering the orders that we have in house. We’re not really looking at future orders. So book-to-bill has been healthy. These are longer-term programs. And frankly, we have some exciting new products coming out, which are being now tested. For example, if you look at our Black Hornet, we — Black Hornet 3, which is our nano drones. Black Hornet 3 had a really good run over the past 5, 6 years. We’ve introduced a Black Hornet 4, which is already getting traction. We also have some really nice programs in space development agency, tranche true tracking layer as well as our international sales in that domain are healthy. So in some ways, while CR would be not a pleasant thing to experience. We’ve done it in the past. We’ve had CRs in many years. Right now, we’re looking at what we have in our backlog, which is healthy.
