Welcome to the HEICO Corporation third quarter fiscal earnings conference call. My name is Justin, and I will be your conference operator for today. Certain statements in today's call will constitute forward-looking statements, which are subject to risks, uncertainties, and contingencies. HEICO's actual results may differ materially from those expressed in or implied by those forward-looking statements as a result of factors including the severity, magnitude, and duration of the COVID-19 pandemic. HEICO's liquidity and the amount of, and timing of cash generation, lower commercial air travel caused by the COVID-19 pandemic and its aftermath. Airline fee changes or airline purchasing decisions, which could cause lower demand for our goods and services. Product specification costs and requirements, which could cause an increase to our cost to complete contracts. Governmental and regulatory demands, export policies and restrictions. Reduction in defense, space, or homeland security spending by U.S. and/or foreign customers or competition from existing and new competitors, which could reduce our sales or ability to introduce new products and services at profitable pricing levels, which could reduce our sales or sales growth. Product development or manufacturing difficulties, which could increase our product development and manufacturing costs and delay sales. Our ability to make acquisitions and achieve operating synergies from acquired businesses, customer credit risk, interest, foreign currencies exchange, and income tax rates. Economic conditions, including the effects of inflation within and outside of the aviation, defense, space, medical, and telecommunication and electronic industries, which could negatively impact our costs and revenues. Defense spending or budget cuts, which could reduce our defense-related revenue. Parties listening to this call are encouraged to review all of HEICO's filings with the Securities and Exchange Commission, including but not limited to filing on Form 10-K, Form 10-Q, and Form 8-K. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except to the extent required by applicable law. As we begin the call, now I turn the call over to Laurans Mendelson, HEICO's Chairman and Chief Executive Officer. Thank you very much, and good morning to everyone on the call. We thank you for joining us, and we welcome you to this HEICO third quarter fiscal 2021 earnings announcement teleconference. I'm Laurans Mendelson, Chairman and CEO of HEICO Corporation, and I'm joined here this morning by Eric Mendelson, HEICO's Co-President and President of HEICO's Flight Support Group. Victor Mendelson, HEICO's Co-President and President of HEICO's Electronic Technologies Group. Carlos Macau, our Executive Vice President and CFO. Before beginning my review of the operating results, I'd like to take a moment and recognize all of HEICO's talented team members for their extraordinarily high performance during the challenging times brought on by COVID-19. The dedication to HEICO's customers and the safety of their fellow team members continues to be exceptional in our opinion. On behalf of our board of directors and management, I want to thank each and every member of HEICO's worldwide team for these efforts and the outstanding results that we are reporting today. I will now summarize the highlights of our third quarter and first nine months of fiscal 2021. We were very pleased to report consolidated operating income and net sales in the third quarter of fiscal 2021 improved 47% and 22%, respectively, as compared to the third quarter of fiscal 2020, which was the quarter in which our operating results were most negatively affected by the pandemic. Our performance principally reflects quarterly consolidated organic net sales growth of 17%, as well as the favorable impact from our fiscal 2020 and 2021 acquisitions. The Flight Support Group reported quarterly increases of 250% and 33% in operating income and net sales, respectively, as compared to the third quarter of fiscal 2020. These substantial increases principally reflect increased demand for the majority of our commercial aerospace products and services, resulting from some recovery in global commercial air travel as compared to the prior year. In addition, this marks the fourth consecutive quarter of sequential growth in net sales and operating income at the Flight Support Group. We are very pleased with this trend, and we do expect to see it continue. The Electronic Technologies Group reported quarterly increases of 14% and 11% in net sales and operating income, respectively, as compared to the third quarter of fiscal 2020. These increases principally reflect the impact from our profitable fiscal 2020 and 2021 acquisitions, as well as strong organic net sales for the majority of our products. Our total debt to shareholders' equity improved to 17.4% as of July 31, 2021. That compared to 36.8% as of October 31, 2020. Our net debt, which is total debt, less cash and cash equivalents of $117.1 million as of July 31, compared to shareholders' equity ratio, improved to a very low 5.3% as of July 31, 2021. That was down from 16.6% as of October 31, 2020. Obviously, we are not a heavily leveraged company, and we have a lot of debt capacity and ability for acquisition and growth. Our net debt to EBITDA ratio improved to 0.25% as of July 31, 2021, down from 0.71x as of October 31, 2020. During fiscal 2021, we successfully completed four acquisitions and have no significant debt maturities until fiscal 2024. We plan to utilize our financial strength and flexibility to aggressively pursue high-quality acquisitions of various sizes to accelerate growth and maximize shareholder returns. Cash flow provided by operating activities was very strong, increasing 33% to $124 million in the third quarter of fiscal 2021, and that was up from $93.1 million in the third quarter of fiscal 2020. Cash flow provided by operating activities remained strong, increasing 12% to $334.1 million in the first nine months of fiscal 2021, and that was up from $299 million in the first nine months of fiscal 2020. In July 2021, we paid a regular semiannual cash dividend of $0.09 per share, and this represented our 86th consecutive semiannual cash dividend, and it was 12.5% higher than the $0.08 per share cash dividend we paid in January 2021. In June 21, we acquired 80.1% of the assets of Camtronics, an FAA-certified Part 145 repair station with extensive proprietary FAA-designated engineering representative repairs. The remaining 19.9% interest continues to be owned by certain members of Camtronics' management team, as well as certain members of the management team of an existing HEICO Flight Support subsidiary. Camtronics is part of HEICO Flight Support, and we expect the acquisition to be accretive to earnings within the first 12 months following closing. Earlier this month, we acquired 89% of Ridge Engineering and The Bechdon Company. Ridge is a leader in performing tight tolerance machining and brazing of large-sized parts in mission-critical defense and aerospace applications. Bechdon provides machining, fabrication, and welding services for aerospace defense and other industrial applications. The remaining 11% interest continues to be owned by certain members of Ridge's and Bechdon management team. These companies are now part of HEICO's Flight Support Group, and we expect these acquisitions to be accretive to our earnings per share within the first 12 months following closing. At this time, I'd like to introduce Eric Mendelson, Co-President of HEICO and President of HEICO's Flight Support Group, and he will discuss the results of the Flight Support Group. Thank you very much. I'd like to start out by first thanking all of HEICO's team members for their incredible dedication, and in particular, their sacrifice in 2020. I think our shareholders and the community at large expect phenomenal results from HEICO, and they just automatically think that we're able to pump out these incredible results quarter after quarter. The truth is that all of the businesses that we're in are very competitive businesses, and our people have to work incredibly hard. Last year, they went through tremendous sacrifices, tremendous personal sacrifices. In order to help HEICO and looking at the results that we see now today, I believe is the result of that hard work and dedication. I just personally thank all of the HEICO team members for everything that they've done to make our company what it is today. Moving on to the prepared remarks. The Flight Support Group's net sales increased 33% to $237.1 million in the third quarter of fiscal 2021, up from $178.2 million in the third quarter of fiscal 2020. The net sales increase in the third quarter of fiscal 2021 is principally from organic growth of 32%. The organic growth is mainly attributable to increased demand for commercial aerospace products across all of our product lines. The Flight Support Group's net sales were $666.7 million in the first nine months of fiscal 2021, as compared to $731.2 million in the first nine months of fiscal 2020. The net sales decrease in the first nine months of fiscal 2021 is principally organic and reflects lower demand for the majority of our commercial aerospace products and services, resulting from a decline in global commercial air travel attributable to the pandemic. The Flight Support Group's operating income increased 250% to $42.1 million in the third quarter of fiscal 2021, up from $12 million in the third quarter of fiscal 2020. The operating income increase in the third quarter of fiscal 2021 principally reflects the previously mentioned net sales growth and an improved gross profit margin, mainly due to increased demand for our commercial aviation products. Additionally, we had a decrease in bad debt expense due to certain commercial aviation customers filing for bankruptcy protection in the third quarter of fiscal 2020 last year as a result of the pandemic's financial impact. The Flight Support Group's operating income was $103.4 million in the first nine months of fiscal 2021, as compared to $121.6 million in the first nine months of fiscal 2020. The operating income decrease in the first nine months of fiscal 2021 principally reflects the previously mentioned lower net sales, as well as higher performance-based compensation expense and the impact from lost fixed cost efficiencies stemming from the pandemic, partially offset by a decrease in bad debt expense. The Flight Support Group's operating margin improved to 17.7% in the third quarter of fiscal 2021, up from 6.7% in the third quarter of fiscal 2020. The operating margin increase in the third quarter of fiscal 2021 principally reflects the previously mentioned increase in net sales, improved gross profit margin, and lower bad debt expense. The Flight Support Group's operating margin was 15.5% in the first nine months of fiscal 2021, as compared to 16.6% in the first nine months of fiscal 2020. The operating margin decrease in the first nine months of fiscal 2021 principally reflects an increase in SG&A expenses as a percentage of net sales, mainly from the previously mentioned higher performance-based compensation expense and lost fixed cost efficiencies, partly offset by the previously mentioned lower bad debt expense. Now I'd like to introduce Victor Mendelson, Co-President of HEICO and President of HEICO's Electronic Technologies Group, to discuss the results of the Electronic Technologies Group. Eric, thank you. First, let me thank all of HEICO's remarkably talented and dedicated team members who delivered yet again on behalf of each other, on behalf of our customers, and on behalf of our fellow shareholders this quarter as you did throughout 2020 and throughout this year and frankly before, and as you do in both good times and in challenging times. We are truly grateful for what you do and how you do it. Thank you to all of our team members. The Electronic Technologies Group's net sales increased 14% to $239.5 million in the third quarter of fiscal 2021, up from $210.9 million in the third quarter of fiscal 2020. The net sales increase in the third quarter of fiscal 2021 principally resulted from our fiscal 2020 and 2021 acquisitions, as well as organic growth of 5%. The organic growth principally reflects increased demand from our other electronic, defense, medical, and commercial aerospace products, partially offset by decreased commercial space net sales. As we've historically noted, commercial space revenue recognitions tends to be uneven through the quarters due to factors like 606 accounting and periodic shifting of production resources between commercial and defense space work, which occurred this quarter and saw total space activity overall in line with our expectations. Importantly, our space orders remain healthy. The Electronic Technologies Group's net sales increased 11% to a record $706.2 million in the first nine months of fiscal 2021, up from $638.3 million in the first nine months of fiscal 2020. The net sales increase in the first nine months of fiscal 2021 principally reflects our fiscal 2020 and 2021 acquisitions, as well as organic growth of 2%. The organic growth principally reflects decreased demand for our other electronic and defense products, partially offset by lower commercial aerospace and commercial space product sales. The Electronic Technologies Group's operating income increased 11% to $69 million in the third quarter of fiscal 2021, up from $61.9 million in the third quarter of fiscal 2020. The operating income increase in the third quarter of fiscal 2021 principally reflects the previously mentioned net sales growth, partially offset by a slightly lower gross profit margin, mainly from the commercial space products net sales decrease. The Electronic Technologies Group's operating income increased 8% to a record $200.4 million in the first nine months of fiscal 2021, up from $184.9 million in the first nine months of fiscal 2020. The operating income increase in the first nine months of fiscal 2021 principally reflects the previously mentioned net sales growth, partially offset by a lower gross profit margin, mainly from a less favorable product mix for defense products and the lower commercial space products net sales, which in turn was partially offset by an increase in net sales of other electronic products. The Electronic Technologies Group's operating margin was 28.8% in the third quarter of fiscal 2021 as compared to 29.4% in the third quarter of fiscal 2020. The Electronic Technologies Group's operating margin was 28.4% in the first nine months of fiscal 2021 as compared to 29% in the first nine months of fiscal 2020. The current year's third quarter and nine-month margins are within the anticipated range I frequently discuss on these calls and remain excellent overall margins of which me and our team members are very proud. The operating margin change in the third quarter and nine months of fiscal 2021 principally reflects the previously mentioned gross profit margin effects from the periodic commercial space sales shift. I turn the call back over to Larry Mendelson. Thank you, Victor and Eric. Moving on to earnings per share. Consolidated net income per diluted share increased 40% to $0.56 in the third quarter of fiscal 2021, and that was up from $0.40 in the third quarter of fiscal 2020. The increase in the third quarter of fiscal 2021 principally reflects previously mentioned higher operating income at both operating segments. Consolidated net income per diluted share was $1.58 in the first nine months of fiscal 2021, and that compared to $1.83 in the first nine months of fiscal 2020. The decrease in the first nine months of fiscal 2021 principally reflects higher income tax expense and lower operating income of Flight Support Group, partially offset by higher operating income of the Electronic Technologies Group. Depreciation and amortization expense totaled $22.9 million in the third quarter of fiscal 2021, and that was up slightly from $21.9 million in the third quarter of fiscal 2020 and totaled $68.8 million in the first nine months of fiscal 2021, and that was up from $65.2 million in the first nine months of fiscal 2020. The increase in the third quarter and first nine months of fiscal 2021 principally reflect the incremental impact from our fiscal 2020 and 2021 acquisitions. Research and development expense increased to $18 million, or 3.8% of net sales in the third quarter of fiscal 2021, and that was up from $15.1 million, or 3.9% of net sales in the third quarter of fiscal 2020. R&D expense increased to $52.2 million or 3.8% of net sales in the first nine months of fiscal 2021. That was up from $49 million or 3.6% of net sales in the first nine months of fiscal 2020. As usual, significant ongoing new product development efforts are continuing at both ETG and Flight Support. Our consolidated SG&A expenses were $83.9 million in the third quarter of fiscal 2021. That compared to $75 million in the third quarter of fiscal 2020. The increase in consolidated SG&A expense in the third quarter of fiscal 2021 principally reflects higher performance-based compensation expense, higher other SG&A expense, and the impact from our fiscal 2020 and 2021 acquisitions, partially offset by lower bad debt expense. Consolidated SG&A expenses were $245.1 million in the first nine months of fiscal 2021. That compared to $232.8 million in the first nine months of fiscal 2020. The increase in consolidated SG&A expenses in the first nine months of fiscal 2021 principally reflects higher performance-based compensation expense and the impact from our fiscal 2020 and 2021 acquisitions, and partially offset by reductions in bad debt expense and other SG&A expense. The company's lower bad debt expense in the first nine months and third quarter of fiscal 2021 reflects higher bad debt expense in the first nine months in third quarter of fiscal 2020. That was due to potential collection difficulties from certain commercial aviation customers that filed for bankruptcy protection during the third quarter of fiscal 2020 as a result of the pandemic's financial impact. Consolidated SG&A expense as a percentage of net sales decreased to 17.8% in the third quarter of fiscal 2021, and that was down from 19.4% in the third quarter of fiscal 2020. The decrease in consolidated SG&A expense as a percentage of net sales in the third quarter of fiscal 2021 principally reflects lower bad debt expense, as well as efficiencies gained from the previously mentioned net sales growth, partially offset by higher performance-based compensation. Consolidated SG&A expense as a percentage of net sales was 18.1% in the first nine months of fiscal 2021, and that compared to 17.1% in the first nine months of fiscal 2020. The increase in consolidated SG&A expense as a percentage of net sales in the first nine months of fiscal 2021 principally reflects higher performance-based compensation expense, partially offset by lower bad debt expense. Interest expense decreased to $1.7 million in the third quarter of fiscal 2021, and that was down from $2.6 million in the third quarter of fiscal 2020. The decrease was principally due to lower weighted average balance on borrowings outstanding under our revolving credit facility. Interest expense decreased to $6.2 million in the first nine months of fiscal 2021, down from $10.6 million in the first nine months of fiscal 2020. That decrease was principally due to a lower weighted average interest rate on borrowings outstanding under our revolving credit facility. Other income in the first nine months and third quarter was not significant. Our effective tax rate was 15.7% in the third quarter of fiscal 2021, and that was up from 13.4% in the third quarter of fiscal 2020. The increase principally reflects a larger deduction related to foreign-derived intangible income, principally resulting from final tax regulations that were issued in the third quarter of fiscal 2020. Our effective tax rate in the first nine months of fiscal 2021 was 13.3%. That compared to 3.5% in the first nine months of fiscal 2020. As previously discussed in a prior quarterly teleconference, HEICO recognized a larger discrete tax benefit from stock option exercises in the first quarter of fiscal 2020 compared to fiscal 2021. That accounted for the majority of the increase in the year-to-date effective tax rate. In addition, our effective tax rate in the first nine months of fiscal 2021 reflects the favorable impact of higher tax-exempt, unrealized gains in the cash surrender value of life insurance policies related to the HEICO Corporation Leadership Compensation Plan. Net income attributable to non-controlling interest was $6.8 million in the third quarter of fiscal 2021. That compared to $3.2 million in the third quarter of fiscal 2020. Net income attributable to non-controlling interest was $18.2 million in the first nine months of fiscal 2021, and that compared to $16.6 million in the first nine months of fiscal 2020. The increase in net income attributable to non-controlling interest in both the third quarter of fiscal 2021 and the first nine months of fiscal 2021 principally reflects higher allocation of net income to non-controlling interest as a result of certain fiscal 2020 acquisitions and an increase in the operating results of certain subsidiaries of Flight Support and ETG, in which non-controlling interests are held. For the full fiscal 2021 year, we now estimate a combined effective tax rate and non-controlling interest rate between 22% and 23% of pre-tax income. Our days sales outstanding of receivables improved to 41 days as of July 31, 2021 and that was down from 43 days as of July 31, 2020. Of course, we monitor all receivable collection efforts in order to limit credit exposure. No one customer accounted for more than 10% of net sales, and our top five customers represented approximately 22% and 25% of consolidated net sales in the third quarter of fiscal 2021 and 2020 respectively. Our inventory turnover rate improved to 150 days for the period ending July 31, 2021. That compared to 154 days for the period ending July 31, 2020. Now for the outlook. Looking ahead to the remainder of fiscal 2021 and to fiscal 2022, we remain cautiously optimistic that the ongoing worldwide rollout of COVID-19 vaccines will positively influence commercial air travel and will benefit the markets we serve. As we have all learned, it is difficult to predict the pandemic's path and effect, including factors like vaccination rates, new variants, which can impact our key markets. Therefore, we feel it would not be responsible to provide fiscal 2021 net sales and earnings guidance at this time, nor for 2022. However, our ongoing conservative policies, very strong balance sheet, high degree of liquidity, enable us to invest in new R&D, execute on our successful acquisition program, and position HEICO for market share gains as the industry recovers. Again, in closing, I would like to thank our incredible team members for their continued support and commitment to HEICO. Without their unwavering passion to exceed customer expectation, our outstanding quarterly results would not be possible. Thank you for making HEICO such an excellent and unique company. I also want to thank our loyal shareholder base that recognizes that the future or believes as we do that the future is very bright and continue to hold our shares and support our efforts. Thank you. Now I'd like to open the floor for questions. At this time, I would like to remind everyone, in order to ask a question, you may press star then the number one on your telephone keypad. Again, it's star one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Larry Solow from CJS Securities. Your line is open. Please ask your question. Great. Good morning, guys, and thanks for taking the questions. First question, Larry, and perhaps for you just on a more macro temperature check. Sounds like, obviously we realize it's a very fluid situation with COVID-19 and all. Just what are you guys seeing? Obviously, we saw a nice large improvement in commercial travel in the first six months of the year. Now we're sort of stabilizing down about 20%. Has this driven any changes in customer behavior, order trends? More importantly, the path to full recovery seems like it's sort of up in the air. Do you still kind of think you can get back to 2019 levels sort of sometime, maybe perhaps towards the end of calendar 2022, particularly in FSG and commercial aviation? Larry, that's a very difficult question to ask. It's like asking a fortune teller what's in my future. Right. It's so difficult because things like the new Delta version of COVID pop up. All of a sudden, we were on a streak. Restaurants are pulling back. People are saying, "Well," hesitating and so forth. My personal opinion is that we will continue to grow through the remainder of 2020. I'm talking about Flight Support. Yeah, of course. We'll grow through the remainder of 2021 and certainly into 2022. Again, we're cautious because what is going to happen? Will the other shoe drop? Assuming that we don't have another shoe dropping and another version of COVID or some other unusual event, or the Afghanis attacking Mr. Biden or something. Yeah. Assuming things are kind of normal, I see continued strength and growth in our markets. To go out on a limb and predict it and tell shareholders we're definitely going to do it, that's just not been our style. We don't hype the stock. Absolutely. We say we try our best, but I have a very positive outlook. Based upon what I see, I feel very positive. Could something else happen? Yes. I'd like Eric to add to that, if you don't mind. Yeah, absolutely. Hi, Larry. Good morning. It's Eric. Yes. A great question and something we spend a lot of time talking about. I spent a lot of the last two weeks with our aftermarket leadership and sales and marketing folks understanding what they're seeing and what their plans are. I can tell you that they're all very optimistic. We are continuing to take market share. We're doing very well in all of our businesses in the aftermarket. I feel that since we were able to hang on to a greater percentage of our people than our competitors, that we are very well positioned for the recovery. Specifically to answer your question, across the board, no, we have not seen a drop in business as a result of the Delta variant thus far. Right. The Americas in general has been strong. Europe never saw really the recovery. Asia, ex-China, hasn't seen the recovery. I think that we've got a lot of wind to our backs and I think a lot of increased demand to help continue to drive the sales higher. Having said that, if you look at what's going on with the Delta variant in the United States, I think it's inevitable that there'll be a little bit of a pullback here. I think people are continuing to travel for personal travel as well as for business meetings. I think where travel is being clipped is in larger conventions, larger group meetings. Right. We haven't seen it, but it would be logical for it to temper back a little bit. Of course, there's normally a little bit of a fall pullback anyway. Again, since we haven't seen the rebound in Europe nor Asia, ex-China, I think that we've got a lot of very good potential there. I remain very optimistic. As far as when do we get back to the 2019 levels, I certainly hope that by the end of 2022, we are back at the 2019 levels. However, that is not to say that 2022 will equal 2019 because it is gonna take a while to get back to those levels. I think consensus in the industry is that, 2023 should, overall, for a full year equal 2019. Remember, our 2023 starts November 1st of 2022. I'm pretty optimistic on how we're doing. We feel good notwithstanding the recent news flow. Right. No, I really appreciate that color. Maybe just switching gears real fast, quick question for Victor. I know you guys don't give specifics on particular acquisitions, but it does look like this Ridge Engineering and The Bechdon Company, I guess that's two separate purchases kind of combined. Looks like it's a little bit larger than some of your smaller ones to date. I guess that's sort of part A of the question. Part B, looks like they don't have a manufacturing expertise, so perhaps there's some cross-selling opportunities using their technologies or their expertise or capabilities as you look at other businesses as well. Is that true? Well, yeah, Larry, this is Victor. Of course, that, as you know, is part of the Flight Support Group being a mechanical manufacturing business, a metals-based manufacturing business. Okay. There is some opportunity for cross-selling with some of the things that the ETG does. I don't think it's going to be a tremendous needle mover, but there is some opportunity there, and we'll explore those as we get a little further down the road and a little more time passes. Got it. Okay, great. Thank you, guys. I appreciate it. You're welcome. Thanks, Larry. Your next question comes from the line of Josh Sullivan. Your line is open. Please ask your question. Hey, good morning. Morning, Josh. HEICO's always been thought of as a leader in the PMA market, but curious of your thoughts on the DER market. Is Camtronics a part of any larger opportunity in DER, or just what are some of the dynamics you're seeing in that market? Josh, that's a great question. I think something that a lot of people often overlook. Yes, HEICO, we believe, is the largest independent repair and overhaul group focusing on the components market in the world. When we say independent, we mean non-OEM, non-airline, non-government affiliated. A key part of that strategy is using the DER repairs. When we combine that with the opportunity to use certain PMA parts, I think it results in an unbeatable combination. I can tell you that we operate a very decentralized business where we've got businesses that focus on specific product, and Camtronics is particularly good in a number of the products that it does. It does have DERs. I think we've got the ability to develop more DERs. I think we're going to do very well because we offer it as a full suite. It's not just walking in and offering a single DER. It's offering lots of different DERs. Yes, I think that's been an important part of the strategy along with the PMA. Okay. Just thinking about the bad debt expense exposure at this point, last year obviously was a very tough time for the airlines. As the government support tapers off going forward, what do you think about your airline partners' financial position, just kind of broadly speaking? Do you think the bad debt expenses are behind us, or do you think that we should just be cognizant going forward? I think the distress is behind us, frankly. I feel good about where they are, and I can tell you, looking at some of the order patterns and some of the stuff that they're ordering from us that they'd never bought from us before, leads me to believe that HEICO's going to continue to take market share as they've got to focus on cost, and as HEICO's treated them very well through these crises. I really think the airline distress is behind us. Okay. Thank you. Thank you. Your next question comes from the line of Peter Arment from Baird. Your line is open. Please ask your question. Yeah. Good morning, Larry, Victor, Eric, Carlos. Good morning. Hey, Eric, maybe just to start with you, can you maybe just give us a little more color on what you just mentioned on order rates at FSG, regarding you were early on calling the end of the de-stocking, and we saw, I guess, surprisingly, 16% sequential growth last quarter, but just 3% this quarter. Maybe you could talk maybe a little bit about the cadence of what you're seeing. Sure. I mentioned in the second quarter call three months ago that the 16% really surprised us, and we were frankly shocked to see it so strong. I cautioned everybody at that time that I didn't see that continuing. Sure enough, that didn't continue at that 16% rate. Look, I'm very happy that we held the ground. When you go up 16%, often you can cut back, trim back. I was happy that we were able to post 3% above what was off-the-charts numbers. In hindsight, would it have looked good to have a 10% growth and then 10% growth? Yes, that's not how we manage it. I can tell you, the airlines with whom we deal are very optimistic, and I've never spoken to our sales force before and seen them so positive and optimistic. Now, part of that is due to us gaining market share, in the PMA and the DER, as well as the distribution area. HEICO is doing very well because we were financially strong through the crisis. We held on to a much larger percentage of our workforce than our competitors. I think we're starting to reap those benefits. It's very hard to figure out quarter-over-quarter increases. Again, the focus and the other point I want to make is that our businesses are focused on profitability, and if you see the profitability and the margin, it far outpaced the sales increase. We evaluate businesses on cash flow and profitability. Sales is sort of irrelevant. As a matter of fact, if you have a lot of sales and not profitability, that's not a good thing at HEICO. We don't want to tie up capital in that. We'd rather invest capital in something that's going to produce income. I'm overjoyed, frankly, with the earnings that we've been able to put out, while delivering very good savings to the customers. I think that in North America, there's got to be some sort of impact on flight schedules. I think it's going to be at the margins. Again, Europe and Asia ex China haven't experienced the return. I think we've got far more upside in those areas than we do in some little potential risk in the U.S. I got to say, the major operators in the U.S. are all, without exception, very optimistic, and they want to make sure that they're going to get product. Everybody's nervous about supply chain shortages. There were articles in the journal today about China not that we get our parts from China, but not being able to get enough labor for the factories as well as COVID in Vietnam and all sorts of supply chain challenges. I think they're going to be pretty aggressive and leave those parts on order. So, we're feeling good. Yeah. Just to follow up on that. We're not really seeing a restocking yet on the shelves yet for. Sorry? In terms of the transition from out of the end of the de-stocking, you're in a more normalized rate kind of matching overall flight activity. We haven't seen a restocking of parts yet. Yeah. I would say that is correct, but I think in hindsight, some of the second quarter may have been a little bit of restocking for certain customers. No, there's not wholesale restocking going on. In the Americas, or in North America, I think the airlines want to make sure that they've got enough parts on the shelf. Maybe there was a little bit of that in the second quarter, but not to the full extent that we would anticipate Okay. Understood. Just to follow, quick one on Carlos. Just the cash generation continues to be really impressive. Maybe you could just talk a little bit about expectations around the working capital dynamic from here. Is there a potential for a little bit of a headwind as demand starts to pick up, as we go into next year, building any inventory or anything? Peter, thanks for the question. I was feeling lonely over here in the corner. Working capital management in our subsidiaries is fantastic, and I expect that to continue. We went through what I'll call challenging times over the last year, dealing with COVID, and the focus by our subsidiaries on cost management without penalizing the labor force, just looking for efficiencies and doing the most lean things they could, has been extraordinary, and I think that will continue. I don't expect big changes in the pattern you're seeing. Now, as sales pick up, we will have an investment in receivables. That will happen. I think our inventories is the right levels right now. The only change I could see is an investment in receivables, but I do anticipate capital to be strong through this year. Appreciate all the color. Thanks. Bye, Peter. Your next question comes from the line of Michael Ciarmoli from Truist Securities. Your line is open. Please ask your question. Hey, good morning, guys. Thanks for taking the questions here. I don't know, Eric or Carlos, maybe just to put a finer point on this. This quarter, I guess, is normally a little bit slower in general coming off the heavy flying season. We've seen this pick up in the Delta year, and I guess you're not going to give guidance, but if I look at FSG's sequential growth, Street's got you guys at 13% into the fourth quarter. Given what we're seeing, the softer, as you already telegraphed last quarter, Eric, that 16 wasn't sustainable. Is that too heavy, or do you guys have orders and kind of confirmation that you'll see a step-up in sequential growth into this current quarter we're in now? Michael, this is Carlos. I'll answer the first part of that, maybe Eric will have a follow-up. Because of the uncertainties we're seeing in the marketplace, and it's real. Stop-starts, the trend is there, but we have challenges with order patterns as the Delta variant kicked up. That's why we didn't give guidance. I don't want to comment on 13%, 20%, 5%. We really don't know. I can tell you that I think in general, the sales will continue to trend up. We've said consistently for quite some time that we think it's more of a linear pattern upward. That's why we were surprised in Q2 with the growth in FSG. I think we'll continue this pace back up to 2019 levels towards the end of 2022 on a trailing 12 at the end of the year, and I think that's what people should expect. Anything above that will be gravy and will make us all happy, but we're not expecting lumpiness in the patterns quarter by quarter, more of just a linear progression up. Yeah. I think that's a great and very accurate response, Carlos. The only thing that I would add, and also what you're bringing up here as well as some of the prior questions, is that it's very difficult to predict when the restocking is going to occur. We don't believe that we've seen much restocking to date because our AOG orders have been fairly strong. If people are needing parts right away, they don't have them on the shelf. That leads me to believe that there's a lot of pent-up demand yet to come, and I keep on mentioning from Europe and Asia, ex-China. Mike, it's really hard to predict when it's going to hit. As you know, we get roughly 70% of our orders in the month of shipment, so we don't have visibility to be able to see that. We know that we're winning market share. We know we're developing products. We know that our people are more pumped up than ever. I think that we're going to do exceptionally well, and people will continue to fly. I'm sure you've been flying, everyone's itching to fly. When that occurs is very hard to predict. Got it. Yeah. Yeah. Got it. That's fair. Are you getting any indications, Eric, either from your people or from airlines? We've been talking about maybe when this restocking happened, but presumably the bulk of your demand right now coming from narrow bodies. Should we expect, assuming vaccinations continue to happen here and, knock on wood, maybe international travel starts to really recover? Is there an expectation from you guys that maybe we get a little bit of a bow wave of activity to support some of the wide bodies out there in the fleet that presumably are still very much underutilized in terms of daily utilization flight activity as that starts to pick up? Yeah, I think that will start. Frankly, the wide body is really going to be more transoceanic traffic. My guess is that recovery is shifted more to the right, and probably in getting prepared for next summer. My sense is next summer is going to be very strong. It's interesting, when I look at our Asian facilities, the vaccination rate is somewhere between 90% and 100%. Our people are vaccinated, at least with one shot, and we've been very careful in how we're operating. We're doing quite well out there. Which leads me to believe that there's going to be a big surge in travel. People are going to want to go to Europe, to Asia, they're going to want to come here. I think wide body come the spring is wide body demand for parts is going to start taking off, and it'll be delayed just like the narrow body was, but it's going to be there. Got it. I still feel good about it. Got it. Okay. Maybe just one last one for Carlos. The FSG operating margins, very strong sequential growth. I think 3% revenue growth, 18% operating growth, great leverage there, really high sequential incremental margins. Can that sort of margin expansion continue? Should we be thinking about costs starting to be layered back in as that top line continues to ramp, or just how should we calibrate ourselves for margin expansion and cadence going forward? I think the best way, Michael, for you to look at that is trend the operating margin up with the revenue growth. We ultimately expect the Flight Support Group to get back to 20% GAAP operating margins. I think if you trend that upwards with your model on revenue growth, you're going to be pretty much in line with at least our expectations at this point. As we rebounded, and as I've mentioned in prior calls, the incremental margins can be a little higher than our decrements because you have things like, product flying off the shelf as opposed to manufacturing, right? You can get a bigger bang for the incremental dollar than on the downside. We saw that this quarter, but I wouldn't assume massive leaps in our OI margin. I would trend it with sales growth and get your model back to around 20%. At that point, I think what will happen is we'll react similar to how we have in the past. You'll have this incremental bump ups in the margin as time passes through efficiencies and growth in sales. Does that help? Got it. Perfect. Thanks. Thanks, guys. I'll jump back in the queue. Your next question comes from the line of Sheila Kahyaoglu. Your line is open. Please ask your question. Good morning, guys. Thank you for the time. I'll start with maybe ETG. Victor, I don't want you to feel left out. What's kind of going on in ETG? Organic growth was pretty good, up 5, granted on easy comp. We've seen a lot of suppliers really decelerate in their defense business. Maybe if you could talk about what you're seeing in defense and space, because I believe it accounts for 60% of the ETG sales, what's going on, and should we expect any air pockets of softness? Hi, Sheila. This is Victor. I would say that, overall the business has, as we pointed out in the numbers, it was just pretty much firing on just about all cylinders this quarter. The outlook, I think, is pretty healthy. Not every business is as strong as the other business is. I think we've said, over time, we expect defense to flatten out, at the very least, with the budgets. The budget is not resolved, as you know. We would expect that to be the case going forward. We would expect space to be strong. We think our other markets right now should continue overall to be strong. Of course, that's predicated on what happens in the overall economy and with the viruses. Right now what we see is general strength and recovery as well in our commercial aviation markets. When I refer to space, I refer generally to commercial space, but also our defense space. I think we'll just have to see where defense plays out over time. We tend not to just look quarter to quarter, as you know. In defense, I think we constructed the business pretty well, to avoid the operations tempo, although we're certainly not free from that. We've always tried to stay more focused on the higher technology realms that are not so much involved with the engagements that our country is involved in, and that we're more involved with intelligence, surveillance, reconnaissance, to a certain extent, standoff warfare and things like that. That generally tends not to be as volatile. Of course, we'll have to see how that plays out, but that's been the strategy. Okay. No, that's helpful. Larry, for you, your favorite topic. I think you guys raised your dividends. You also did three acquisitions within FSG over the last two months. What are you seeing in the market, whether it's for M&A or using your balance sheet, and just given recent deals with Meggitt and Parker Hannifin and TransDigm, how do you guys approach, what is a rational estimate for synergies as a percentage of sales? How do you guys see that and just your overall thoughts on the market? Well, I think overall, we are looking at quite a large number of transactions. We're doing due diligence on them. Some of these big transactions, specifically, you mentioned the TransDigm and Parker, with regard to Meggitt. I think that both of them are paying very high prices for that. We model dozens of public companies to see what they might look like combined with HEICO. We think they're paying a very high price, but they also feel that they can get great synergies. I would say that they're both very good companies, and I assume that they know what they're doing. It's probably richer than our blood could stand, but, I wish them good luck and success in those acquisitions. We are looking at a large number of companies. We certainly have the balance sheet and the capacity to do large transactions. Our nature is to be more conservative, of course, than TransDigm, which you know. Our model is a little bit different than TransDigm, but I think we are seeing a lot of opportunity and we're working on it. The problem is a lot of private equity and money is very cheap, and people are pushing up. I think there is a basic inflation in the M&A world. People are paying very high prices, we are a little bit conservative on that. Also because our model is a decentralized model, we don't go in and clean house with an acquisition and throw people out of jobs and all that kind of stuff. Again, we have to be a little bit careful in how we do things. I think there are enough potential transactions out there that will enable us to close on our fair share of what's available. I'm cautiously optimistic. I think with us, it will be sort of business as usual. It is harder because we are competing with a lot of people with a lot of cash in their pocket, and it's burning a hole in their pocket. We probably won't be as aggressive as those people, but that is just our style, and it's worked for 31 years. I think we'll continue pretty much the way we are. Awesome. Well, thank you for the color. Okay. Your next question comes from the line of Gautam Khanna from Cowen. Your line is open. Please ask your question. Hi, good morning, guys. Good morning. Good morning. Hey, I had a couple questions. First on FSG, I was curious about sequential trend within the quarter. Was like the exit rate in July, sales in July, were they substantially different than that of the preceding two months? Was there any sort of fits and starts you saw through the quarter? Anything you could talk about just within the quarter, what the trend was? No, Gautam, it's Eric. No, I wouldn't say that we saw any real particular trends within the quarter. Just sort of a gradual upward shift. No, nothing that really stands out. Okay. Within the segment of FSG, we have the three major subsegments. Any major differences between the three, specialized products, repairs, and the aftermarket parts and services? Hey, Gautam, this is Carlos. How are you? Great, thank you. The repair group was quite strong in Q3, which by the way, we expected. It performed quite nicely. It had really done a good job. Parts and repair was way up. Again, we expected that. I don't want to harp on this too much. The laggard, if you would, the lowest growing part of the segment was specialty products. Again, we kind of anticipated that. The OEM cycle is a little softer than the aftermarket. We anticipated that. It's growing nicely. We're happy with its performance. You'll see the breakout. We'll file our quarter on Thursday. You'll be able to see the trend in the sales by those two areas. Okay. Gautam, this is Eric. That's why, Carlos just pointed out with the specialty products sort of growing the least out of the group or the smallest percentage, that's why we've got a lot of confidence that when that recovers, that we're going to have a nice rebound there because we haven't seen that yet. We've seen some, but not to the full extent. That makes sense. Victor, I was just curious within the ETG group, it's not all defense, there's aero defense and then there's other industrial markets, medical, whatever. I was curious, anything you could speak about the non-defense, the non-aero businesses within ETG and how they trended in the quarter and what visibility looks like. Yeah. In the upcoming quarters? Thank you. Sure. Gautam. This is Victor. Those businesses have been very strong and actually gaining momentum throughout the year. We are seeing strong demand. They're not without supply chain challenges, in fact, but we have never been one of the just-in-time inventory companies in our own policies, so we haven't really had to contend much with those challenges. I anticipate that as the year wears on, we might see some here and there. We've been able to navigate those very successfully. I think that's a sign, frankly, that we might encounter a little more of those in the noise level, that demand is just very strong there, and it doesn't seem to be subsiding. That's across the board in the various markets that we serve. It's not just limited to one individual market, let's say. Right now, we're very pleased with how those businesses are proceeding. We've seen a nice recovery as well in some of the medical product end markets that we serve that had been affected, of course, by the pandemic and an improvement in demand there. Obviously as procedures were put on hold in the middle or early part of 2020. Those recoveries have been good for us as well. Those feel pretty good for us, too. Okay. Thank you, Victor. Larry, for you, last one for me. Just wanted to ask about your comments on the Parker and people paying high prices and all that. I am curious, is there any larger transactions you guys are looking at, or is the pipeline today kind of filled with more of the typical HEICO acquisition profile, midsize, small size tuck-ins? Is there an opportunity here to kind of, while the cycle's still early, go bigger? Is that something you guys are keen to do or anything you could say about that would be helpful. The answer is yes, we are looking. As I mentioned earlier in this call, we are looking at larger companies. Sometimes we can't make the numbers work, at least in our decentralized operation, where we don't go in and cut and do those type of things. We are looking at larger companies and standard companies and all size companies. We run models consistently, our M&A people, in addition to investment banking people who call us virtually every day, to look at this possibility and this possibility. We certainly have the financial ability to do large transactions, in the multi-billion dollar size. Our balance sheet is pristine, you know that. The idea that we have is not to grow because of size, top line, biggest sales company, but to be the most profitable company that generates the most cash. To us, an acquisition is really all about cash. Yes, earnings per share and so forth. For example, on these calls, what we haven't focused on is And I'm sure that many people on the call, analysts and investors, focus on cash. I know that because when we have one-on-one conferences and conversations, that's what they talk about. In my opinion, running HEICO, managing HEICO, it's all about what the EBITDA looks like and what is the cash flow looking like, and that's the critical factor. When we make an acquisition, it's all about cash flow return on our investment, not to become the biggest company in aerospace or electronics or anything else. That's what we really focus on. If you really do the arithmetic, we find that on medium-size acquisitions at the right price and the right company, we can generate as much or more cash than we can generate on very large companies. Be assured that Carlos, Eric, Victor, me, our M&A guys, we're looking at this virtually 24/7. Again, it's all different sizes. The bottom line to us is, number one, cash flow, two, earnings per share. Because if we have cash flow, we'll have earnings per share. But if we have earnings per share, we might be heavily leveraged, and we won't have cash flow. That's a possibility, as you know. We put that all into the model, and we try to figure out what is the best total overall result for HEICO for an acquisition. Yes, we're looking at all sizes. Thank you, guys. Your next question comes from the line of Noah Poponak from Goldman Sachs. Your line is open, please ask your question. Hi. Good morning, everybody. Good morning, Noah. In the aerospace aftermarket, I'm hearing you say, no major sequential change month by month through the quarter. I'm hearing you say that airlines are generally still sort of concerned about not being ready for a recovery, as opposed to being incrementally worried about COVID-19. I'm hearing you say that you expect 4Q revenue up sequentially, and that's with 1 month under your belt, and also a period that usually transitions a little bit to business from leisure. I guess this is maybe less of a question and more of making sure I have the summary correct. We've heard some other companies say that the exit rate of the June quarter was worse than the entry rate and suggest that airlines have gone on a little bit of a pause in aftermarket purchasing activity because they are worried about Delta variant. Just want to confirm that I have it correct, that you are not really seeing it that way, that you've seen domestic leisure strong, international business weak, and Delta just kind of keeps it there for the time being, and you're not seeing really incremental weakness that you're concerned with in your aerospace aftermarket business. Hi, Noah. It's Eric. There's a lot of information in there. Basically, I would agree with what you said. Okay. One little caveat. On the international side, I don't think it's only business. I think it's a lot of leisure travel as well that international hasn't picked up. My comment was more overall that I think international's got good potential to go up, number one. Number two, Europe hasn't recovered, and Asia ex-China has not recovered. Right. I would say yes. That was all true pre-Delta variant. I guess what I'm saying is, it sounds like your summary is that the Delta variant of COVID-19 has not really significantly changed the trend line in your aerospace aftermarket business for now. For now, that is correct. Okay. For now, that is correct. I was asked to comment on what I thought would come down the road, and since Europe hasn't recovered, Asia ex China hasn't recovered, of course, the OEM cycle is building, and we've got significant market share gains, that I answered the way that I did. Okay. Yes. Look, I think it's possible that HEICO does a bit better than other companies because of these various points that we just spoke about. Obviously, it's very difficult to anticipate specifically what the fourth quarter is going to be. Yeah, you're right, we've got three and a half weeks under our belt, but I don't have full numbers for August yet. We never know what the subsidiaries are going to do until they post those numbers, so I won't know until basically September 1st what the month looks like. Right. It's very difficult to predict because we've seen our guys tend to be fairly conservative, so the trend tends to be right before the end of the month, they're always way low and they end up coming in higher. Right. Until I see that, I don't know what it is. I would caution against being too aggressive for the fourth quarter, because I mentioned Delta variant is obviously not good news for the United States nor for the rest of the world. From what we've seen thus far, it's not crippling at all. Okay. Yeah. Okay. No, that's very helpful. I recognize that I packed a lot into that question there, the overall overarching summary, I think I understand. Does HEICO have more exposure to what's happening with the parked fleet and aircraft coming back into service? I know you have, I think, a significant sized structures component repair group business, and maybe there's other exposures there. Usually traffic and parked are linked, to the extent that aircraft are coming back into the service at a faster clip than traffic, or those are just different, is that meaningful for HEICO? Yeah. Look, I think overall, the aftermarket, not only for HEICO but for the industry, is obviously you got to look at the 20-something thousand aircraft out there. By definition, most of those, the ones that were parked, were basically in need of maintenance. They didn't park the ones that didn't need maintenance. Yes, as demand gets added back, they've got to put money into the fleet. I think that is one of the situations that we've seen. However, we do ultimately anticipate a restocking and ultimately, of course, the rest of the world returning to normal. My sense is those attributes are going to be present over the next year as well. Okay. Just last question, the share gain that you've referred to, any way to quantify that? How much revenue have you added to the PMA business over the last 18 months from share gain, or I know it's not just in PMA, but any way to even directionally size what you've accomplished there? Yeah. It's hard for me to present what those numbers are because they're occurring in many different areas. It's difficult to see in the numbers. Yes, we know what we're doing in terms of new products. Also, you got to combine that with the recovery in other markets. You got to look at how additional share gain is going to impact us going forward. It becomes very difficult to identify, to call out. Part of the problem, this is Carlos. Part of the problem might be is because we track these share gains by customer. We certainly don't want to talk about customers on this call, but we're very aware of our market share with each airline globally that we serve, and we are seeing that they're buying more, or they're putting in orders for things that they had not bought before. We believe that that trend that we're seeing is a result of gaining market share from our customer base. Okay. Fair enough. Thanks very much. You bet. Thank you. Your next question comes from the line of Louis Raffetto from UBS. Your line is open. Please ask your question. Good morning, everybody. Good morning. Morning. Eric, I wanted to circle back with you on the Ridge Engineering deal. As you talk about flight support getting back to 2019 levels by the end of 2022, how much impact does that deal have on that? Sticking with that, and I know the deal didn't close till early 4Q, so I'm guessing we're not going to know what you spent on that until the 10-K, or any guidance you can give us on those two things, just as we think about cash balances and things like that going into the end of the year? Louis, this is Carlos. We didn't disclose the purchase price because the acquisition relative to our balance sheet was not material. We have a big balance sheet. I wouldn't look at it being a drain on cash. We paid with cash on hand in our beginning of this month. If you look at our cash balance, whatever we had sitting around, we usually operate with probably half of what we got on the balance sheet. Some of that went towards the acquisition. Okay, great. Thank you. Eric, any impact, I guess, on the top line you can just help us? Again, it does seem like it's a bigger deal within FSG than you've done in a while. 100% anything. It's a nice size company. They've got about 200 people. They are in the manufacturing business. They're really a very outstanding company. We're really honored to be the home that they selected for this business. We think that there are a lot of people who would've coveted buying the company, and they saw the culture that HEICO's got and really our long-term commitment, and the fact that we don't sell companies and that we just build and grow them. They're going to be embarking on additional growth in terms of more buildings, more equipment. We're very excited about that. We've spoken with major customers, and they're extremely well valued and really the furthest ahead in that space, according to our customers. We're really very optimistic that it's going to provide another great avenue for growth. Just a good business with really great people. We're very optimistic, and it's, again, a nice adjacent white space for us. We never did machining or brazing like this. Frankly, I'd never seen this elsewhere. What they've been able to pioneer and develop. This started out as a very small company, and due to the grit and determination of the founders and leaders of the business and all the people, they've been able to do stuff that other people viewed as really impossible. Frankly, I've seen quite a bit of machining in my 31 years at HEICO, and I've never seen anything like Ridge. The machining and the brazing that they do is really very close tolerance, very difficult to do. I don't think anybody else in the world can really do these kinds of products. I think that it's just very good opportunity for us, and it's one of the reasons I'm very optimistic about our specialty products business, that we're going to see continued demand as the cycle builds over on the commercial side. Then, with these products and some of the other stuff we're doing on the military side, why I'm very optimistic on it. Okay. That's great. Thank you. Carlos, just another one for you. I guess the corporate cost looks like another quarter of pretty high. Is this sort of a new sustainable level? Anything else like one-time in nature in there just to be mindful of as we think forward? I think the only thing really in the corporate cost center that's up is performance-based comp expense. I think going into the first quarter was light. Q2 we add a little bit more, Q3 was more on the run rate. I think what you'll see, Louis, is if you look for anywhere from 1.8%-2% of revenues, that's about what our corporate cost center will amount to for any given year. That's what I'd focus on if you're modeling. There's no unusual stuff. It really is just related to hopefully having bonuses this year. Remember, we didn't have any last year, so the comparables to the prior year are low, principally related to the performance-based comp being absent in 2020. Okay. That's great. Just a quick one, Larry. You talked a lot about the M&A, and obviously you guys have been extremely successful in doing that over the last 30 years. I guess maybe the question is, has that landscape changed at all, given all this new competition that you're seeing, and what people are kind of willing to pay, and then sort of combine that with your conservative nature? Well, as I indicated earlier, people are paying much higher prices because there is an inflation in our economy, and you see that. Just read the newspaper and they tell you that prices of goods and services is going up, number one. The M&A world is seeing the same thing. Low interest rates, just a plethora of money. The definition of inflation is more money chasing the same amount of goods, so obviously we're getting an inflation in acquisition. The question is, can we invest HEICO's money wisely to get the type of return that makes sense? That becomes more difficult when you're competing with somebody who's willing to pay 14x EBITDA, and take you 20, 25 years to repay your investment. We look at things as a return, as you would, as a wise investor, which you are, as return on investment. We like to get our money back within, say, 10 years. Our model is that we pay fair prices. We'll pay 8x, 10x EBIT. We want to see the cash flow coming back so that if we mentally say we pay whatever we pay for it, by the time we're into the fourth or fifth year of owning a company, we have received enough cash back to make that company costing us in our portfolio, say, 4x or 5x EBIT. It becomes a no-brainer. That has been our strategy. If we have to pay prices that take us 20 years to do that, all of a sudden we wind up going to the banks and getting heavily indebted, which we don't. Again, our strategy is to be relatively low leverage, and we can't do that if it takes us 20- 25 years to recoup our investment. We do that study, and that's our model. Our model, we've been able to grow without being heavily indebted for the past 31 years, and we've grown at a compound rate of, I don't know, 19%, or the stock has grown at 24%, or whatever it is. That's the model we want to stick to. We had a board meeting the other day, we discussed it, and basically, the board is in agreement with that. Not to say there aren't opportunities for us to acquire companies that are strong cash flow generators and will give us and our shareholders a return on their investment. There are a lot of companies going at 14x and 16x EBITDA, and you make all kinds of assumptions. You can justify any acquisition. You can justify a 20x EBITDA price if you assume that the synergies are going to be God knows what. We're a little more conservative, and we don't do that. I can't tell you, is that the smartest thing? I don't know, except that we've done 80 some acquisitions, and we've never had one blow up on us, and our history is very clear. That's our strategy, and I think we're sticking to that. I believe there will be enough. It's harder. We have to look at more companies to get one good acquisition than we've looked at in the past. We will do that, and we will continue to do it, and I'm convinced that we will be successful going forward. We have a very experienced M&A group with Eric, Victor, Carlos, other people that work on it, myself included. I am confident that we will continue to exceed expectations in M&A. Believe me, it is really tough. Tough because people are paying price. That's great. I really appreciate all the color, Larry. There are no further questions at this time. You may continue. I do want to thank the people that have tuned in to this conference and shown interest in HEICO. We appreciate your interest and your support over the years. As you all know, Carlos, Eric, Victor, myself, we're available. If you call us, email us, we'll discuss if you have questions that we can answer without running into problems, SEC problems, disclosure problems. We'll be very happy to discuss things. Anything that we can discuss openly, we'll be happy to. Our doors and telephones are open to you. We welcome any call that you might want to make. We will talk to you, I guess, the fourth quarter, we don't report until the middle, towards the end of December. Probably the middle of December. We look forward to speaking with you at that time. In the meantime, let us know if you have any questions. Again, thank you very much, and this ends our formal call. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.