HEICO (HEI) 27 Aug 242024 Q3 Earnings call transcript

Welcome to the HEICO Corporation's Third Quarter 2024 Financial Results Call. My name is Samara, and I will be your operator for today's call.

Certain statements in this conference 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.

and such duration complete among regulatory could such lower commercial of COVID-XX HEICO's demand cause severity, things, increase as air product could timing export pandemic, requirements, and and costs cause and restrictions; cause changes magnitude public defense, liquidity purchasing for travel, that airline an differences generation; services; or reductions and U.S. other include, which space security the which the our to contracts; of fleet policies and Factors cash amount airline to lower or decisions, the health costs specification demands, spending our goods governmental could in and risks, by homeland new our competitors, which customers foreign and/or could and sales. or competition existing reduce from

introduce product products levels, Cybersecurity delay manufacturing growth; systems business. product sales; at profitable to our information our reduce sales which ability could difficulties, development other events our manufacturing technology adversely or services new could or affect pricing our and increase and development sales disruptions could of which and Our costs or

impact make and to and conditions, synergies customer telecommunications acquisitions and within from aviation, including space, risk, electronics effects the businesses; defense, obtaining currency domestic and/or any ability medical, rates; revenues. costs and foreign achieve governmental acquired our And which credit foreign of inflation interest, operating income our applicable negatively tax approvals; exchange and including the could economic outside of and industries,

XX-Q revise result the new obligation events on are otherwise, information, including, of as statement, Form and to applicable not no within whether Securities Commission, forward-looking the to any listening XX-K, We except encouraged but X-K. publicly review by future filings HEICO's filings or update required to, and law. to extent or undertake a to Form Parties this all call of limited Exchange Form

call Chief and the Executive Laurans Mendelson, now I over Officer. turn to HEICO's Chairman

'XX We call. on HEICO and earnings teleconference. joining good thank very to announcement us, morning much, fiscal this Samara, to we and thank welcome quarter you you this everyone you for third

I'm joined and Eric HEICO Technologies and Flight HEICO's Executive of am of Victor I Carlos Co-President HEICO's Chairman HEICO's of by President Co-President morning HEICO's Electronic Vice Larry and and and CEO Group; Mendelson, Mendelson, President Mendelson, Support Macau, CFO. And Corporation. President our Group; this

Now before reviewing HEICO's I'd of to for and talented their all like our contribution team members operating record-setting our a take results, to thank performance. moment

and HEICO. about excellent Your continued continue shareholders. And focus of very customer for be into the results expectations future optimistic operational on our translated exceeding I excellence to

this members team who accelerated of is Their who our this rapid customers members our HEICO in year. history Over we've XX markets air incredible the emerging times a to pandemic. be quarters of experienced and of team commendable, tenacity challenge crawl couldn't growth. I of one amid to the ability during period COVID-XX growth when professionalism includes slowed growth serving prouder past remarkable demonstrated last in darkest the aerospace Wencor after meet our from travel commercial the of family joined and the aviation

wins team this realized years in made am we progress global results the have the in the be expectation In over our mirror. is softer despite serving to addition, the in few who I effort that industry pleased the industry. of defense continue with will rearview and growth the and appear customers upcoming my It elections members past

the XX% the as net and highlights sales fiscal fiscal our to in XX%, operating compared summarize And improved now third income third and record fiscal quarter I'd 'XX HEICO 'XX. like 'XX respectively, represent results. and results of quarter to Consolidated record of quarter for the third by

those I that results. outstanding think are agree you'll all

of per 'XX. that in fiscal $X.XX of income diluted million record fiscal third quarter was third per $XXX.X the from a up diluted in share to 'XX. net increased or And million quarter XX% or the Consolidated $XXX share $X.XX

quarterly Flight 'XX. the 'XX, quarter all-time XX%, Group The XX% Support The in respectively, the and quarter improving fiscal third third net set and increases of sales operating over records of fiscal income organic principally services Flight reflect the mainly 'XX attributable and strong our 'XX to for acquisitions. from impact XX% growth aerospace commercial demand products Group's increased fiscal Support and the and profitable

quarter to was of XX% the in million up 'XX, the that $XXX.X fiscal increased fiscal million and EBITDA in from of 'XX. third $XXX.X quarter Consolidated third

debt-to-EBITDA That down net of as as X.XXx XX, was from ratio was July 'XX. Our XX, October 'XX. X.XXx of

we to the months historical X XX that acquisitions. of following year have ratio And acquisition. results of level net excluding forecast Wencor Our allowed to operating ago about debt-to-EBITDA us year to impact our any further the a excellent that's Xx roughly made return early-achieve would within

cash-generating Our extremely acquisition follow to opportunities to ability acquisitions HEICO. we intend strategy in our opportunistic both ETG, pipeline and Support the is that continue robust with of Flight and of expand time-tested

quarter cash XX% 'XX. activities by in fiscal third by XX% dividend share. cash 'XX, quarter was semiannual Cash and This our July fiscal XXnd million $XXX.X regular flow increased the increased $XXX operating our dividend In in per to provided third of of from million since that 'XX, the represented consecutive XXXX. to up semiannual $X.XX we

recent discuss I'd activity. like our to acquisition now

the for lines, cockpit certain we licenses assets product and You performing exclusive to Honeywell been announced displays and well extremely may and XXXNG December which display the support that group 'XX, International acquisition legacy has the perpetual Boeing us. recall, in from of XXX

result, May and assets XXX including licenses these displays cockpit or new the 'XX, military displays variant under of products, enhance lines. second further Boeing product XXXNG legacy As International, completed and manufacturing acquired the Honeywell screens certain additional of we a we to in transaction a with and which

of paid acquisition of acquisition. Flight accretive year principally to the delivery Aerial was our Last facility. week, acquisition announced Systems. following to credit Purchase And our we this the the expect proceeds divisions within from cash, that we price Capewell be first Support acquired aerial and this in descent using Group revolving earnings

I he third the this like Eric? introduce time, quarter of Support the of results Co-President to of HEICO Group. discuss Eric President Mendelson, and will would Group, Flight Support HEICO Flight At and

Thank third $XXX.X million you XX% lines. The across record million net net Group's fiscal The demand 'XX quarter from increase third growth quarter $XXX the from our fiscal of Flight of in mainly organic Support The of fiscal and net up XX% reflects our in sales acquisitions the reflects sales increased very to much. growth. 'XX, a the sales 'XX impact strong increased and product all 'XX. organic

acquisitions. Connecticut-based proprietary with leading have growth acquired we delivery process aerospace staff will and people successful impressed quality for products reliability emergency aircraft to They an week, egress a well provider their products, highly also family. As we've and of defense I and markets. within worldwide. both and strict FSG, which we who in Capewell, help cockpit, excellent fit ensure to excellent of high continue been HEICO safety the am also organic growth experience commercial manufacturing adherence through supplementing aerial the the within pilot very extremely improve Last

Wencor's marketplace. and continues of our convinced investment The Wencor for to exceed HEICO. record high-quality culture and an was produce in this operations products continued a to the we wins are excellent entrepreneurial producing expectations,

parts offerings customers for aerospace to product in Our overhaul continue and larger great find needs. component aftermarket repair and their value our

We stand-alone continue to operate operation. Wencor as business a

in combined a in serving our good seamless very made customers together we've and working progress fashion. However,

utilization include: PMAs working our and all HEICO how and Some at examples now repair of together DERs all we're of one, of stations. Wencor

cooperation. engineering particular, defense in PMAs. is Four, specialty our and utilizing Sarbanes-Oxley Six, vendors. and base, Electronic Group, help such Three, regulatory and cost X, commercial lists and Wencor HEICO's Two, And best-in-class all export such aftermarket driving sales HEICO's additional e-commerce the regulatory of to Technologies manufacturing and that FAA will products." ODA as Wencor platform as Five, various back-office sharing cooperation. synergies, payroll HEICO compliance, "new noncompetitive compliance, program. offset products

$XXX.X 'XX. amortization increase replacement Group's overhaul increase and product mentioned partially gross third The operating reflects net income and in fiscal in an the of operating intangible our a XX% and by asset reflects lines. parts The principally improved income growth margin, from parts margin the up gross to higher principally and in Support services the within The sales improved profit increased third aftermarket an sales repair record expense. 'XX, offset profit quarter fiscal net of $XX.X million quarter Flight previously million

'XX, The fiscal XX.X% Flight of fiscal quarter Support operating the Group's quarter third third up margin increased of from XX.X% in to the in 'XX.

XX.X% margin third approximately cash third absolute the than terms comparable Given in fiscal in basis basis is that acquisition-related points or of is Flight FSG's fiscal amortization, amortization EBITDA, Group 'XX. in 'XX, XXX before of expense excellent margin intangible the XX.X%, points quarter higher was Support which margin consumed cash quarter the operating of XXX our of approximately and the

mentioned am these margin previously The principally amortization the intangible I reflects improved mentioned extremely profit expense. the costs, asset with operating by acquisition as as pleased lower well increased gross higher partially results. margin offset previously

would Electronic the Victor? Electronic I HEICO Technologies introduce Victor Group. discuss results of of Group, Mendelson, to Now HEICO's and Technologies of President third Co-President the like quarter to

few The sales medical commented earnings $XXX.X quarter million products expectations net is fiscal and in Thank quarters sales. conference you, destocking the over by net consistent to lower our slight inventory other Eric. our customers. and the were This with fiscal third principally of electronics quarter products is calls defense, third Technologies space in aerospace 'XX. Electronic at reflects and last offset compared increased line sales, sales 'XX partially The Group's of million we've net in with as $XXX.X the on some net decrease as

the remains very quarterly anticipate but We the continue net to trend ETG's sales, positive. overall defense volatility in

these compared third typically fiscal our of other were XX% other electronic in markets of companies in these in third fiscal improved the and XX% trends quarter quarter expected, of order As these have are These believe other between We markets. sales. markets seeing 'XX orders some during bottomed, 'XX. of lower our net to equate sales we the and to

'XX. growth expect the these fiscal continue to in first to during We overall and half of return end-markets an businesses

tailwind have are margins. including acquisition, with optimism, non-A&D business' a growing backlog very performance, fiscal for its expectations meeting commercial a year. and and strong products as support The our improve, Orders orders performance our profit very and defense ETG's next Exxelia, overhaul markets to been record be aviation and our strong expect we the our healthy robust, pleased into we at which continues like

for quotation I Further, our well. for to augments nicely. 'XX optimism course, 'XX, And is in our of did which addition fiscal as activity to say fiscal mean 'XX, and periods book later building order

our of note fiscal The our above third expenses 'XX. Electronic quarter I'd acquisition-related basis margin XX% fiscal quarter up amortization of margin. XX.X% 'XX, expenses, of before was improved margin operating consume also operating from third XX.X% intangibles XXX as in intangibles points Technologies the around that in Group's the amortization those

as how businesses that's correlates to we And our judge our cash. most that closely

principally look improvement. partially SG&A and we how operating our level pleased very at overall with we efficiencies. their the profit mentioned are are on businesses The when gross margin continued increase So reflects basis, doing margin, an margins lower operating previously improved by offset of the

back the to I over Mendelson. call turn Larry

Victor. you, Thank

Now for the outlook.

As products. be largely contributions fueled fiscal ETG. we the and about majority sustained to growth the 'XX along acquisitions, achieving look FSG is fiscal for optimistic net of This by of both demand the our remain our 'XX, to we ahead growth from for and remainder 'XX with sales expected

are market committed innovation, maintaining strength further our and and service financial and we flexibility. ongoing Additionally, product to penetration,

to their unwavering my for want to team support again HEICO. I gratitude express to conclusion, the In dedication members and exceptional

strategy our building shareholders. outcomes businesses of outstanding diversified Our of deliver a for positive to continues portfolio

very key markets is fiscal in successful be up strong, shaping year. Our are another 'XX, and to

very for your as optimistic trust. Thank for And we'll I you now about floor future open HEICO. continued remain mentioned the I the questions. shareholders as And before, to

first Instructions] question We'll Spingarn take Melius Robert with [Operator our Research. from

end FSG's quarter. couple to X integration reflect the in is simply and demand market, was Eric, HEICO you -- end-market thought of growth this relative accelerated organic this strengthening that Wencor? does quarters. maturing maybe the I aftermarket? start nice rate Very just the with wondering, I function and And a the Or the a I'd talked between about prior Got And markets.

Yes.

last question, a a over spent I why the think and over great incredible Rob, so going business There's the is details. outstanding strong. think growth that sales of month that's in reviews factors. and of was lot XX% But with the I lot really X time I a our in folks, remains of the question because reason no the rate market do particular,

having years in can, to to and continue these them. planning and them accumulation we sold working win marketplace. on of get in being the HEICO needs of combination when as they the And the them individual lot is market as or the hard One, able developing an advance, products, a businesses hit demand a shelf

everybody's rear think every you if number one. the that's make Really, heroes I will, So unsung ends happen. their are of, off to sort this working who all day

So reason. first the that's probably

definitely be addition of and line. would product second due The the our Wencor the to of broadening

speaking many in purchasing supplier. our our a are very decades. as much with from think think last customers, are products additional I transitioned customers we confident HEICO today repair. I more parts, it's whether viewed the mean, over PMA, I in tremendously has And us, distribution, complete

And market our I think growing we're share.

the a the it's businesses think broadening XXX the So of think, and the really acquisitions. Wencor strong line focusing market, yes, on and XXX our I really, unit more, detail but display through product and I by

been airlines there bit have you far? patterns any seeing been there that's Okay. talking the a Are of And that here. order theme then in so overcapacity growth notwithstanding evidence a the some about strong out of

really the over-ordered they sort needed we matter They, their a of bit of in XXXX. more No, if a took hindsight, airlines actually. number purchases. trimmed in XXXX, in of And as back don't, I you think, than fact, will, have

customers. So customers that But of other we year. cutting this evidence was really strength by have back anecdotal offset certain do at

I very So think well. continue we to do

really roll model all sort And the in -- of the who area, my to figure after destiny. gets of desk time. business beauty to up this real up instead And they're that the make that HEICO short fact the one they're they and their got control if to own in units who how these we've -- another doesn't and this have individual doing area, in out that it

strong. market for So the in remains us mean, quite summary, no, I

in then OE production at OE. Okay. continue they're side side, slower-than-expected commercial the you higher slowdown Are and OE the because to And Boeing? at ship the orders seeing on any ramps inventory? and you Victor target rates on exposure both you do to Airbus some and taking of the just Or both just have

due rates. that seen and conversations want definitely is yes, the they course, of forecast has and side, we've in definitely based There's after to think, Yes, their strength than production, than Boeing XXXX, our by on offset commercial customers defense a expected. I things our better of doing, in Airbus That, area. OE been to on off that are reduction we no and But question build our strength expect the with continue into what XXXX there. softer

Okay. this question, And then thought I here's anybody a but Larry, jump question, I you in. would please ask

acquisitive. be to continue You

just from are characterize M&A year maybe prior out You How you who properties another stands did there And deal. with equity any as in so? or private sell? is the it folks relative to change behavior to pipeline the there would today

a Eric. just is for take this Rob, I'll that moment.

as course, the of were capital Of our we of on amount that as well focused is consumed a ago, a history year the Wencor, deal company, largely $X billion, and in over tremendous largest effort.

that pipeline robust. today remains you tell can I incredibly But our

work. in We a the lot of have projects

are the country. around nonstop running Our acquisitions teams

very buyer differentiate will I fingers hard the of to to And we'll fruition. worked of crossed our think that keep as come ourselves these choice. some we

there's no all with think done getting key I in and don't reputation call businesses for counterparty strong. you a and HEICO's very because And But I and to respective acquisitions of I can on their having attractive sellers have recent us of very, for and reasons the that particularly out those all but dealt that our own remains deals our pipeline want has conversations, question made partners. been has tell to they us, sellers individual

Eric -- me preempted the me. I asked is know you know I Larry. Rob, but question, this

told now. looking we accurate. staff he full. what The many acquisitions and are actually the And active. is of taking you pipeline very at So too time ery is right It's full it's

looking that we need. We're we because high. priced That's more And The do although in fill our see private interest, when compete, very to equity we equity compete nonprivate we nonprivate deals some of pricing. enough more they're all for normally, have equity. really to the best can't we is problem But try deals.

it's market now. us, for buyer's So a right

Got it. quarter. could Carlos, it. rate the And Got the what organic blended quickly, if was you ask I growth just in

as about whole? for a company talking the You're

Yes.

So in, factor when you all yes.

Yes.

over the So growth tick organic it a company. all for was X% in, whole

next Stifel. Bert We'll question take our from with Subin

on with Maybe, to FSG you start Eric, the just side.

called being, you've widest being OEM I growth, think about you extremely it. with you seen relative the sort I growth, discount mentioned and accelerating of to of impressive. about you organic parts replacement of XX%, XX% Last close side being that to quarter, growth talked the ever aftermarket X/X the out had believe, priced

I'm in an Was Or third be pricing So does curious, growth? of quarter? a fiscal of more volume increases to that that element continue change did story? how the it

Yes.

the more story. answer, volume a of So it's short

XX% -- as quarter, was I Most so business. quarter, last that the And think XX%, it I volume. parts for this was of you last is think mentioned. it

it of but mostly volume would on side. is say Some definitely the it's I price,

firm we've very have got is, it our as passing and make price And costs that's that to purchased get increases up our our we gone along special about to whether labor that whatever or sure been customers. We've passed we've along. processes, to product, material, sure make got

majority and volume would extent then the lesser that So is of a much price. be the definitely, vast

or, of trimming opportunity or Do sound Eric, up know I just you element any the meaningful that for I the like up a capacity, in side, if go it parts do share becomes yields. sort Just how had to opens more thinking lower that's doesn't aftermarket that of as airline maybe parts guess, you there's on attractive I we an the if things think seeing percentage? yet. Or sort gain of the FS, brought forward maybe several little a the you think it where volume? customers slow was portfolio think pricing to down. PMA lower for next earlier because It guess, replacement about business, with balances for bit you're do you're maybe just impact curious slowdown makes bought quarters a it into

Yes. Again, slowdown we haven't signs any seen of date. to

when of drop, of is advantage contrary. when a point. the -- obviously, additional to pick and up to That's that share regard As a take we realize sort the that most they've contrary, we've the customers up of got is with stronger normally course, slowdown, when volumes surprisingly then and fact, when of share. And And at than savings, pick matter quite parts because share. market recovers, additional cost And market recover to economy our we market that repairs. picked we up even there

The they're to in excited and demanding fair product regard. provides competition, want I HEICO are think, customers the competition that very HEICO very have very, about They line. competition,

So parts when that pick I to for we're that up repairs, very market -- additional occurs. share, and think well going if do designed get sure, and, in, that

we X And Victor. Very for sort at the of over quarters, side, helpful. about just the of the from question organic several on bounced last averaged ETG negative to positive last Victor, business sort around look if X%.

function expecting I sort mid-single-digit in think is longer back X-part what sort your is outlook? longer-term I question. as growth I of I'm that sort year, be were there a then to potential low the guess into target a the that that in organic. you business One, just FY of exceed think as just ramp 'XX, recovering? to go significant half. earlier growth more of And changed meant curious you a this of term two,

are surprise so a of think back They're has us. I you, good the been and year Thank Bert. to in half don't far the Yes. we where questions. really

thought, we average the were tried second higher I margins call that quarter that of the an in for we that course example, we would over year. think period the look to for in hint

out So of far slightly. it's not maybe really too line,

that it their We're though rate to to would look with look them little budgets premature fiscal submit our our when and because it's say budgets me certainty and in as stronger feels have Again, growth in early a doing a the I we I order for backlogs for October. me 'XX. fiscal at now our do rate, 'XX. But companies at

waiting But I'm So those. how now, it on to that's right yes. feels me,

CJS We'll from take Solow question with next Larry Securities. our

the impressive growth Congrats growth it on for some of side Victor, even, and good really bookings business. your like sounds

So -- like Eric, a good question, upcoming. on that you it detail a for some the of looks for couple guess you, hopefully, Wencor. some be having, couple we'll just thank quarters of I

synergies it even break like of a few organic So I'm out, it certainly combining getting, if kept lot but growth overall you don't growth exceeded whatnot. common just of of this your revenue sounds are you and curious know has the looks the I stuff over or like, quarters? sort some and could services last at Wencor up like, FSG

FSG. very mean mean consistent with can consistent. we there legacy little various I very well be is But the some very they're and the would look doing anomalies there. businesses, organic Wencor are HEICO say it's and I I general, growth or their at businesses. in consistent -- with here

PMA parts And plus X increased Does certainly But few X growth -- Have overall has obviously, the parts? last equals it more? has even you of -- help quarters? in offering your increased that overall offering the has X. the increased

that, it. we've seen has. the and advantages has frankly, And it enthusiasm really overall around of customer grown. offering Yes, the the And

Got you.

stuff, color that? a little Any be right? a some specialty It how little looks going quarters like maybe Is sales, question, a in like, -- nice it's acquisition, that Just bit to well, that more of... little Capewell at more kind niche, guess, it the bigger so higher-margin sounds to more tuck-in. I a on choppy look products, sometimes,

the sorry, and commercial descent and business, terrific military is -- business. basically a lines. have they main X the aerial One military commercial and product I'm It's

the or in cockpit out event the cockpit a also of you way aircraft in egress aircraft the door basically from need business, So blocked, -- when you problem. have is the are case the to cargo cockpit of need basically, tankers a or egress

get are is in need the and in key or a commercial product, escape. out really very really the slides aircraft, either of sophisticated, people inactive aircraft a they event which only way standard aircraft. And military on certain to the number types time-tested, the which of well exist to don't they and of is appreciated have And

So that's business. part their of

area part tanks they're an airplane drop various the various mechanisms, if of business the are critical. dropping their you've you're or and is is, attachment And of that then C-XXs descent to or got or it other attach or piece, and out aerial mechanisms of equipment, sophisticated the whether C-XXXs fairly parachutes there it, parachuting whatever which are really

we It's in since this out company appreciated and the hit once So dragged the to a and the parachute. that not XXXXs and think and detach customers, which is to they the ground jump great is result device, designed get business permit the its really of airplanes of paratroopers as by a business. frankly, this original that pioneer the was

that's so a And very strong business.

the And niche our -- very fit Group. Flight has of products our very connection specialty course, overall Specialty in a well to thought a the Products business, parts it lot we to of Support. It's and why that's of other

about So it's very We're fit. it. excited good I think very a

guess to question, pass last maybe Excellent. I just Carlos.

pick you and margins X you at? where on operating XX% on the I much so up on next continue margin. not side up next do and quarter look to those Perhaps mentioned, see Just the cash the margin, years? but you the on X, to the or to over X in the cash XX% can respectively, they mean ETG, FSG

expect grow we the to business, question gains to to answer volume the our is, of as out So we continue eke your history. incremental margin with the consistent do

base little is a that grows, to it's of it amount support the the As relative business of lower. the needed growth, overhead to

we'll expect that. I get So

should a this here If the of back, look our would And kind to forward, before, do so expect look it and move that's EBITDA happy it's you're we once continue into back what margin decade, elevated, forward we ETG. that as quarter. FSG you in and sell talking margin, at And stabilize pretty quoted I've I if and improvements. think I footprint this eke you with gains, look an we that think the I were out about going

from Baird. We'll next question take Arment our with Peter

and some about talk the year. a ETG you growth could But the results. just confidence about seeing booking of end-markets maybe sort seeing, your little it's more digits next the are Victor, growing Nice talked it's a just seeing some maybe of you other of there. about I defense, -- rates is in areas you're that color thinking bit softness? that and some Or little is just assume XX% segment, that mid-single of almost

Yes.

as to and part some And again, So strong, beyond. our really well beyond seeing bookings extremely of 'XX, some business growth. again, indications, that's double-digit have commercial of and quote 'XX Peter, fill aviation the in defense experiencing been I'm side. come of where defense the the And of as longer-term some those really the out on activity the order

a for aviation been phenomenal. is now, commercial us. I like leader right And defense has good feel So really

and orders it in, up year. that of like add I sort to you us these X-month down out. the nice and customers are used appears at So I coming rates in are It a our seeing say from those be the when gets consistent people tailwind markets, excess time look kinds have are with, what very I like think, I inventory markets, fiscal order if on the together, bottoming a there lead other that's and 'XX. looks us why it And will I that are that, other take that which feel into of next

that's that, on be can't certain just now. right feels I course, it how Of but

But of is now, Carlos. the to XX%. about just we're out, you're segment. this point XX% right I Peter, what want not tracking said wrong you on around

past, in the once I've we're defense Right settles segment down, expect this -- behind our to around XX% the in on the a the for I now, little XX% number mentioned have revenues of still become we only do So over time. mix the being closer defense total to still sort quarter.

you That's to it the Okay. thinking where about the still leverage, ability thoughts How exactly -- where your Carlos, sticking come but full, guys that to? delever, with you, taking maybe want are you on the just, you're down would, leverage X.X then just pipeline And to given to M&A thought it's updated just what's on is helpful. turns. any

think, the we've nature, some by timetable down look, we're to company, we set Well, I an out had, done that. debt we -- and aggressive and an of acquisitive pay that we

I the are abound. think opportunities

leverage, keep opportunities which been don't real that right? we As has high-margin candidly leverage high companies goal And I to EBITDA, the like our as we there's that find long us. think very for that businesses. mean our X, can I have us the disrupt is under ones for profitable history, that

impact So with more higher we where has margin, about steering the internally do less on we things I'm that's when And our leverage. it deals. these acquisitions the the talk

our David Strauss from Barclays. We'll take with question next

to capital inventory Last wanted year, year, big about about an build. working or coming working fairly fairly you maybe basis big potentially slower just a thinking I growth This are build. inventory had ask on here? from capital. working capital or How you absolute down

weren't. that And And people, inventories we you the big and COVID, we as will capture able most. HEICO And were HEICO the too advantage. customer all that's coming than HEICO if a and when then and with I'll this always much been get service, trimming bottom quicker line, support out really making sure financial. result of our Carlos Eric. cutting others sort the capture. much, our that specifics been out on market has at David, the picture look to recovered a on huge incremental is of not sales into not we of can start of the focused

understanding working are to increased. operational all our units, the in an receivables, specifically inventory very So I business how have the capital, I on from due receivables sales. the reviewing can perspective, tell focused huge Obviously, or that's and you up very, of Victor increase

But stuff regard wrong our we that and result, to make the a inventory. have with have companies fact being lot been the outstanding a we terms do having and blows the right very, that very then shelf on very and careful have inventory they've problem. very There and to are sure can't they inventory find where policies correct as inventory businesses it, that people And of robust on we're that. the shelf. their inventory, after reserve has out a the it's make always we up got to sure really very, proactive not of HEICO in sell been the

into no So frankly, slow big internal you question inventory. it focus when But the the the only for organic in We our and increased to was mean really growth key on there is And had at aftermarket you. outstanding, Carlos a that I through business. I will want that to XX% that accomplished there's specifics think that be But that growth. inventories. look business, get the really we can is

business. of know growth in I don't the -- in the up use that. much inventory more sales our spend ramping how inventory quarter, say spend to has at could to add rate and I for our that is the increase I the our down that mean, XX% would pace. I come relative comparatively, not are,

that. with happy I'm So

year, David, just amount lead ago orders of the I had because years times. what outstanding that think X mentioned made our of of commitment in firm we a earlier had some I subsidiaries on inventory fair

made that our base them to good good to moment or we advantage our as things that to vendors our on we're going expect does to in a and to us. of so take be partners We're sure to base those. not vendor be we good -- disrupts they make time, of bad them company And with type the vendor

beyond I grows, business and little use pointed But continue the grow bit. come of has to as expect So it Eric now a -- we as out. bit little those a firm working the down. that, will rate particularly of come of to do as capital, inventory We're orders sort down

wasn't pleased the working this I with use. capital as quarter So

rate of We And to the it. year. expected in the compared of is spend change again, first half the that considerably inventory down

other just David, also, add And to little anecdote. one

was of course, the unit XXXNG purchase inventory was due of display and line. the business as to increase chunk Of product that. good the result, a XXX of purchase And a the a

So inventory. an up It's is business. acquisition. shows that really inventory. a good But that as all It's obviously new

you take account. of have into that So sort to

stripped that increase is smaller. when the So much out,

Great. detailed answer. Thanks for the

GAAP improvement. Was sequentially. The about sequentially? other or drop. something margins, talked I point on did basis I that drop little drop the What that a know margins margins But had you did question drove bit XX mix FSG year-over-year else?

what sequentially. nothing unusual what's I folks, -- happening think, the David, about there's -- margin we've in told There's the

I the is going XX%, unusual that high It's maybe as think between don't and in been as expect we ebbs we've think there's on. run flows. what told folks to quarter. segment has as it XX% the anything last I

in little a have mix. shift You

down a parts accretive Products. bit That of is repair margin out, commercial than the business. is That's is As very business helpful. business well. little in Specialty The parts Eric less was doing growing the The business also. pointed some

vertical have segment. going puts the as the you're to footprints of to business get So takes and settle into the we

things no I odd going wouldn't in onetimes or there. on So -- there's look

the is our Flight the what in perspective it call David, third look which EBITDA increase But we've I to been quarter Eric. lower cash cash points Support basis was was able margin, way XX.X%. Group XXX the at or XX.X%. is, cash despite Wencor, of year acquisition margin, an This we this of the year ago, sort that to a Also at margin a operating from the margin, a up

those outstanding. really So are I numbers think

that's say as that's bounce I within why it's around. And a be range, to they just we -- this, standard but mean going certain Carlos just we noise. says,

question our next take We'll Skibitski Alembic Pete with Global. from

And just bit negatively well think start a to sounds business. drove the business. about guess I because it parts guys quarter, the the it did you it -- repair with, I chain quarter of this like Eric, last kind talked sounds impacting Eric. maybe as supply like

supply do the the the of chain? there going through specifically or any So more you tunnel end light on you talk see at with maybe what's can

would definitely I say, problems supply over business. chain we the Yes. all have Pete,

a getting are top -- on demand and vendors Our of be There's chain. there got out challenged. huge supply your we really to

your do to what sure they make prioritized got and top expect. is you're on be vendors they that that to of You

driven a to certain inability many past that's or due. vendors' still And commitments. vendors backlog large by frankly, of We have produce according their to

people the to of a And So supply. don't amount demand continues that lot in tremendous frankly, a just retired. supply is see chain. struggle. improvement be aviation Basically, A outstripping of I

their, Some some down, you lost businesses if processes. businesses special will, shut

struggled. a that ripping And time, processes documented a are the if and a think there industry, of, I the went produce lot is all their period when supply for as really they look basically high-tech the say, at special quickly, And to did. suppliers. retired they need undocumented. has of chain these knowing orders is I folks And way less of struggled very large why, the slashing this with everyone certain those the out this would really processes you framers, they largely industry OEMs lot out of didn't a air their result Despite manufacturers, away there of a result a and really, as have engine actions,

a result, just try they them come companies most sorts fought asset they is get go XX%, like on people hire our of possible reasons. basis. keep tell make when on This lay was of XX% people some cut we but wanted to going I temporary back, why when few off, And there a valuable their HEICO, as permanent our you that not knew the sure all to can't came off of hell some and as out we they back. back to reduce because to we can back workforces, basis, pissed figure are who went folks, to to a industry because would go that how that as retired, schedules, these there and out And to are

long I problem. back. think the So big, why are it's road a And big major having that's a manufacturers

Okay.

the that repair versus grow business, parts you're faster beholden So to you'd to business? say just because, less you go-forward, business suppliers expect the

ship confident because a We're supply There's supplier's unit, have faster. parts are ship individual that in when can or you that hard a growth parts, the overhauling component our Whereas say to the you if stock. you -- parts. component in it's all LRU, inability have wouldn't all both. shift replaceable impacted question to the I only of you you're no by you you which will pretty a other particular when line less grow

of So if that there's not shipping material and XXX unit. bill you're parts a you're X, missing of

you're our even And past-due then could engine, complications. creates complex backlog be that of parts of had performing you plenty there businesses when building are if spades. But airplane we of have suppliers. course, in think well. all is like and higher quite or just sales So from It's I an problem assembly our a that that those an in actually

COVID-type the talk broader area appreciate Victor, medical normalizing. could because Victor. I now X medical in but strongly had if that helpful. That's medical normalize. almost that -- and portion I touched kind the other other? kind or than X, I imagine And quarter of growing is wondering the you if more to if I the bifurcate could other surge and about that could And Okay. of ETG. the more not on you will impacting it was you and But ask it's in is? portion Or it, that. medical are economy next we I negatively is know just of

Yes.

orders we 'XX, procedures if things a were of part medical stronger, it lot was I and elective was strong Because of and even actually talked a 'XX. the at -- think the weaker. in happened that, was was is then deferred. it 'XX had make, about very you in there they it 'XX what we first but that in like And surge 'XX of remember, things and some and

through They've I to think at did had right, end-users, much level, the from and of maybe our manufacturers And work or inventory. those had customers' too that some then I were materialize -- the at the happened on the not concluded orders was they shelves, what think -- slower. they the

you right customers moving As them to us we're seeing before the you oh, of the left, we're were like opposed move this right? And defer coming back to know to, opposed can were going now right, to deferring sooner? Can can pull to discussions in? more We now what, the to saying, but we not things having them, these order, to going as those. ship out you you

had I I system a wish at expectations of a do from over-order sign of care that. good and great a manufacturers. know question let's It's least, economy mixed But I out case of health for, visibility the it. don't well, seems higher on into delivery broader the like know very as it I the and if classic it's say,

Okay.

the like sounds it is like? quarter sounds or you it think destocking So that the in over so, about next

mode. always, I feels shoots, it so I've to not we're up by seeing how it much in some me. That's not or And signs, higher that's but that -- some followed feels quote But usually, indication activity. kind orders this gets green would speak, bottoming but after. usually, seen of say more bottom long Yes. we're an to

next our Wolfe with Research. Raffetto from We'll take Louis question

something with, start noticed. just things not from charge, guys. can of I guess, I couple you we I see Impairment Maybe

spot if if that. and information had curious if sure you was related the in Just those any contingency each that on as just change So about or other the one is to one offset of sort in income was additional of else. well? consideration somewhere not statement one at And kind all was the

business impairment a in projections both of the contingency have end-markets come the some One were related industry changed, revenue the have space the segment. See, Carlos. X that where is is contingent for was the down. this have within and the subsidiaries. to reversal we So charge different They were ETG

this a math. So It's impairment. trade just is name essentially

business to a the The as on higher when putting our business expectation a is little doing value fine. It's far trade as bought just it is name. we a

bit. conclusion we we came would trade a that name to this impair quarter so that And the

the contingent the The an earnout, nothing due at was that thing. earnout objectives it all low. a to they subsidiaries one clip in And or meet it of would circumstances was whereby kind our was so change likelihood was of earn-out

they So that that earn us earnout. weren't became occurred to going apparent this that when it to quarter

through same a a went nonevent. was at coincidence. it's general each both selling a other. They the subs. kind They It of bit they administrative of X time, expenses, So to -- they happened went so different offset

Appreciate not just color, a I All material, in quarter? usage then Capewell from to just And the fourth it's size know least right. cash deal. anyway, maybe hugely Carlos. at the the but

deal I margin to majority It, mean don't don't stuff does military. a some -- for and -- us. out, it's don't in aviation the cash of usage. be we acquisition. pointed business. I good going nichey I believe Eric we'll a big it as the should I Yes. think think It good for -- It's parts a be borrowed

we'll come, to more so see. And

acquisition not -- immaterial But HEICO too the an for it giving much your dilutive is not or anything of total, of margins, a so out details segment that. to financial we're that's the question. It's it's in not like if part

about excited I'm can you, tell about technology, business, the really I Yes. this the the excited people, capability.

is what aircraft on These egress. I solutions. You look cockpit at -- are one mean, businesses, or the X cost-effective really the critical, very

catches the these And If to you and have going these really on solutions in situations, time-tested bad. solutions airplane work well. fire don't it's certain be are and extremely

HEICO So be happy we're for in portfolio. to the them really

and threats for demand of is we're today, now to number with to is And the which you around critical. going are look the control country at of because aerial that able material militaries this various drop course, drop solutions autonomous on to ground, be all super way a working we're unique the to a this really really, do Super, further military sorts And drive And it. if the of sorts all world huge autonomous these vehicles. going if don't you're only now, of to at technology going you this vehicles, there's on able hotspots to programs you've world. have there's But this. got are where facing critical. deliver the the And

So we good space think be that a in. to it's really

around Capewell ejection they're mean, Whether world. you they to if space. certain pioneer you're able as also was this well you've got -- eject a very aircraft accepted release the the have And do or customers company, a it's paratroopers, and so fighter you mechanism, at release the a This point, seat very, by in name. the Great I from that. really

portfolio. extremely I to it's going HEICO So well the in fit think

Markets. Ken We'll take Capital Herbert question with RBC our next from

you in Eric, Maybe, to just the start segment. I FSG with wanted

XX% Xx-ing several -- organic ASK over in sort the single-digit Wencor, if your As acquired seen high you growth volume assume been last basically growth industry you we've of think quarters. you've the to about I since growth relative

now PMA view your about opportunities is trend continue the share think think you you price, growth, have gain, within segment you As in right growth and How to fiscal from normalizing, terms of volume the opportunity to secular aftermarket beyond the way 'XX? Wencor about? Xx

hope is the we excess had we're market question or growth yes, number. I is well. We'll, still market, whether no don't the other Xx Well, certainly significant we of lot a whatever And so. there's after out capturing fact. in you is there. share. of guess, I correct And know ASMs But there, find that the whether look frankly, result growing a factor, at out really that

years ago, really, of happen. their Frankly, have continue so. hard be make number, asked So surprise whether hard that many we're we'd at to to you thought working work. people I really wouldn't result had this me But if us as our this a

So we hope so, but I time will guess tell.

opportunity, think differentiation sort worked haven't you the customers Okay. of And more of is along as I provide it seeing sort customers, capture of that with about before? those can and you from Or are share that any you new greater airlines the additional a lines? at wallet it maybe

world. I in we think, Yes. the deal would airline to, in single every I every -- pretty certainly we the sell airline world, mean much major

us. key at story that really That's capture -- is airlines. really it for big So a those the additional of big is the

Okay. the of growth? quarter line can I'm third or the finally, And growth, sort just product you the the in sorry, quarter Honeywell quantify second impact

-- don't we're providing... I know I if Carlos, don't

the under I tick inorganic, So were of million, roughly Ken, million sales $XXX were is $XXX acquired. just that tell quarter a you what could in

of most a legacy so business. the and little And that of was bit Wencor display

Perfect. Okay.

Ken, this ourselves in very, about about entrench very the got technology. gets us mentioned business. I tremendous a it has Capewell legacy we prior even really again happy think with call customers. we're And very just I excited that excited our to potential, about -- we're And should unique as prior question, add, into the and deeper

just guts, for part us of So a -- a really cockpit the or I big go a the you outstanding time I XXX HEICO was mean on NG, and our quick when product in think next in key you something screens. frankly, acquisition, airplane. see because take there look into puts it that extremely and go that's that, a transformative an line you'll X

too the course, have high within the happy HEICO of that very very very, we'll They're quality and expect. response give them entered that we is the has the that really they this pilots, thus customer And business, visibility, good for and airline. but very And time turn far.

So I'm very bullish on that.

Our question Jefferies. comes next from Sheila with Kahyaoglu

so versus think an pre-Exxelia of And idea cash this if net quarter liability margin? there? last what margins, XX% they year, one. quarter, go A that's few the the Victor, start with questions, name to if the by I'll check, and for trading okay. talk double that us impairment, maybe is offset $X about, And you margins million do out. could happened Victor cash you this of to cash give XX% about last just kind out Eric we contingent can then how

don't But answer of Carlos business XXX rule the margins. us zone. impairment about to penalizes and and going the as if, that somewhere I'm I that. let mind Sure. Carlos, will just of margin I'll the a Exxelia you on Carlos, cash points thumb by let comment And taking in basis that

an And mentioned name, when accounting I what doesn't in Sheila, amortize. do. you day a And Sure, have have of you establish think these you sure, purchase are sure. the when you so as the intangible accounting, to static assess intangible you world all estimates the on trade acquisition, it X for going on make it's to earlier, time. a impairment, all assets revenues the asset,

look model. impairment at it have You to under

you one In We trade that this it affect this our thought the can And it lot happened time a we it off we easier was. trade of stuff housekeep of prudent it on was a to basis. this that's spectacular. change things makes sense. Nothing and impair my quarter. that, We analysis some there some any it's was quarter to really end-markets particular because do like impair name quarter. in case, books -- look the get annually. just at of the Candidly, subs a quarterly life it name that less of to decided so every that made that And what

that's So it. we did why

Got it.

net they each So other? out

the positive, The negative yes. about the was impairment. change is earn-out. earn-out -- contingent the $X $X.X a do, They million earnout and was million and ETG, One change in

the not operating So it's a roughly drag, $XXX,XXX significant to at about margin. all

Thanks, ask wanted Carlos. just margins I year-over-year. to about cash

down In right? I Is XXX they were think bps. that ETG?

Yes, down the that's think of drop. And a tick. just because just I volume

said talent That serve non-defense, rightsize we spend, actually non-space, XX%, want what the business that is is business earlier, we to to the those margin the HEICO I we about don't keep or is and or unless has contributing of retain quarter down, them is to have so we not year, give really a last customers. of if challenge materially any the listened that turns, ask earlier, changed. our you If SG&A other take, when the it's talked the our as having Victor believe of don't Again, that electronic of roughly that to other drag earlier. What's, will that reactions non-aerospace, we as talked think, overhead lifetime, something business. support in a one lines the end-markets, business segment. businesses there products, we're at on Eric We so some particular their spend knee-jerk have really we

see lack SG&A., think, efficiencies that expansion once on I -- inefficiencies back, supports should that judgment, and of the expect about will the had of sales I come believe we the think in order talk backlog or and the some will in that volume turn, away We that SG&A go that that's you impact that really, And those volume aspect they what the segment. has the which margins. I contributed. as and

Sheila, Eric. this is

numbers, like it looks year. at actually basis XX looking went from cash that roughly to points my isn't the this up last area, Although but margin me at ETG the

So it Yes. is improved.

Okay.

number. wrong have I Sorry, must had the

Yes.

defense think just to been But I'm markets dragging do see defense are at quarters you've growth? even to you, maybe -- the Why I get starting XX underperforming straight. promise. for peers going I you know to double-digit Eric, Victor, are this when

year, think we're underperforming. I so We had double-digit growth don't this defense

have excellent think defense this I growth we year.

it. Got Okay.

that So question, that's And the last then Eric... drag. XX%,

The is for from sure. the drag other markets,

it's a comment Eric, sales revenue talk X about and out or you laid commercials maybe synergies that -- Wencor could about lifts happened you have whether with you Okay. PMAs Wencor, now. of opportunities, cost sort made and operation all if and

about a focus Wencor and entity we airline, it an as HEICO think about how the where combined does you do how going to think upsell? is allow when you So PMA to

Yes.

still we though parts repair are even the So example, many of is what we group, even the businesses for typical subsidiaries. individual the do, as the group model. we HEICO Because really which pre-Wencor, go to HEICO HEICO within there airlines, or have,

to And are those airlines PMA for the there repair were And within sure and HEICO companies. find parts in So there companies group, the already went X additional repair example, are HEICO group, to individually opportunities. XX to they companies. the their make supporting product

as group HEICO contact a and overall, will, as contact contract. So group parts there well may if -- repair you and HEICO be we contract an still and

individual However, the their we businesses the are about lines. product they're who sent knowledgeable most always because ones in

So somebody sit with an the shop. you go down in to engineer or want

the There's than really somebody to there inspected, metallurgy, how nobody process, details strength using understand other dimensions, particular the and installed, into how know better everything always the it's been it. HEICO. the people who's And the that's that product, are it's is materials, how the of about manufacturing

thing. And the exactly has done fortunately, Wencor same

quite I and they model and is frankly, adopted of the saw it. greatest -- and it they thought worked well, imitation saw the They HEICO form flattery, HEICO the model, that they is this think, pre-acquisition.

change. no there's So

a at the level. on they're they in repair there their sure detail product, goes parts really same understands So the in and and make basis Wencor that way,

leadership executives having senior package. guys XX,XXX of, and get number PMAs Now hey, do you've from the and X,XXX look, to is, we said do you DERs, can want understand bigger thousands a saying, we other whatever the airline what that, I got got as and

well that, we've been business the in tied with dealing again, can when and it achieve. And very we But greater then it presenting do is when so make that. successful to want and able in that to that. do show tactically in they to package we're aggregate they them each what And the to airline, individual sure comes overall

We'll take our next question from Michael Ciarmoli Truist with Securities.

of to talking back Maybe, Eric, about. questioning, been just you've Ken's line what even and

and pressure Airbus FSG to Boeing How start X%. think when about you market, and revenue Would the expect you're ticked higher sequential Wencor. and in here, getting the opportunities growth synergies outgrowing over door? You're growth quarter, if planes getting the these from FSG, the cross sequential some out you're upsell I and see guess we growth, on your volumes? do has question can every X-part

I see guys? picking that's go start talked operating equipment you're just just just And if going is we global under you higher the longer. warranty, a up curious once I'm older fleet they're airlines to about that headwind of and because to you some levels mean, I'm for but create of And share, natural

are those understand logically have that's maintain the saying. lot more also year by last years. fact significantly of the getting in all counterbalanced what you're aircraft think I mean than X been the certainly year. a by aircraft every are And But to I ordered that I hope ones. And not. they XX delivered old expensive I

sales. greater to yes, would that reduce So is retirement extent there the

huge and fleet significantly have mitigated ones. sizes this the delivered, been generations However, recently the and of larger that's the being older by than that newer are group aircraft

to mitigate think it. I going that's So

that products additional And these the now, Wencor you we the and content units look aircraft. that offer at higher newer particular on display all and we in with significantly stuff, acquisition also have the

to think going that's I So mitigate it.

you, you on And up, airlines fact, quote I mixed older can don't as if then I in who exactly tell a I directionally, there saying. don't tell are I'm anecdotally, I'm are, that this slightly because you what understand can aircraft. want me of and getting operating, suggested, but number also, But it you'll --

the maintenance fifth For a example, on heavy AXXX, not there's I check. think

is of continuing aircraft been on So not -- they they're number us. airlines doing are of revenue end planning to operate a for to continuing check That had the any fifth it. this creating where maintenance the

amount And aren't think maintenance to continue of dollars. to there's that generating aircraft out. fly be that a going stuff which is that I older pulled certain So

think at think are very a mean, you HEICO one we look business we've is any as in both And we're family, come we We're team not to where very And there -- I'm invested bullish. very, experts leadership, truth will members because I sailed little right the my for all inevitably here industry space commercial as at know I and that through look, the So well together this excellent this in not bumps is and with invested cycle. to out. the leisure for -- going be the travel, historically, is the periods. decades. not there. this those and always defense But be even HEICO,

So cute direction too an the I perspective, can we the been tell making operating -- tried our products you focus one we've be, or did. on miss we of travel on if sure smart, or whenever you new HEICO's too our we And -- doesn't that Because the had have from whenever, historically, shelf because developing shelf. when no change else we've parts to will, on you tried it. and strength inventory is

to back aerial That's they Or competitor descent. just marketplace? one, Airborne TransDigm's one Systems? quick And how positioning their shifting last product that are just lines, Is in to are Capewell then their Or a with and gears it. specifically helpful. and company think the complementary? about they the Got

Yes.

I think complementary. they're

complementary. they're think I

a I they're very of are lot market. mechanisms think that the to in release sold TransDigm, complementary and the

TD next our take Khanna question We'll Cowen. from with Gautam

Eric. a had question, for first quick I

if versus Just maybe or in of know channel kind parts. it terms same? of all Did it, relative like products direct? between airframe in of stuff the there growth any sell is the discernible the parse I is versus terms or distribution engine to any don't types you of -- through differences but rate, notice aftermarket replacement way

I the very other. would the say major even not versus we understand. I'm based the and area very, particular frankly, would one million there puts don't trends the quarter all in on strength was aware that a I mean in I always takes say But same. Yes. any it's factors, of are broad-based. no,

It was.

level don't the X expect curious just just a like way in the to you you now? we where generally a here, opportunity have XX% fully. Wencor And there? what -- I from we space, of Okay. do Are years of where [indiscernible] like we some respect you from product with have integration the know of things relative I'm integrate of common was to to and development Are year be are kind or wondering you. and I terms But integration,

No.

stuff that done And job, to I I that think we've -- before, I there's but be said off the competitors additional we of HEICO plenty giving. gift and think be can but still do, great think more. going gas -- a think that I there. as tank our combination is And don't that keeps of to the want I I've is as is to there on in going Wencor Wencor the to tip

sky businesses, additional look the we of opportunities and the the Wencor for that and we them. the Frankly, I that from need as And of, promotion got take continue responsibility. And the areas we benefit. can think the to step more HEICO another, within There's to members, really, limit there's can team at we've customers I one is businesses think lot when need company. lot the a team where more we members acquire -- a benefit additional up

more who gosh, it's a that's want have acquisitions I breakneck the folks want whether mean, to growth, For on it's a mean, growth responsibility, like XX% and lot in work of, to take organic or organic hard quarter, we pace. I my whether

a that do all on the side, up that in But for we businesses. lot growing stuff can XX%, There's creating sorts that it's of opportunities people. more particular, you're to done. can sharing they're when be that's just promotional all The additional And even promotional hard acquisitions across at you before for on, keep people. our repairs, frankly, stuff repair opportunities There's of do stuff. creating,

we're are at in I may would even we? for we? quarter. be say where are first sure, first half. We definitely, So Where the the

be going to happen personal away, think people's lot going more. and going career take it's But as right it's out over they something have hopper to at having acquisitions the can to more a greatest I on opportunities well time. the not so to work It's acquisitions. enough people to there's not who internal many is and take on got more, in of we one because that promote we've constraints we responsibility very

acquisitions internal have we on people. have to because don't sometimes And we those pass

be So I opportunity. a big think there's going to very

you've at has trending Victor, And within Thank is In that that times ETG? you, past, Eric. out just you. for business been space one something the called lagged. How

Yes.

that overall, Carlos, think have me or us. year I it's flattish have quarter, if right? roughly do for correct I this business. It's it wrong, important an I but Carlos, this

that I'm sorry, the was organic growth?

space. Organic in the

little it's I is Yes, quarter. it's up, quarter. the mean, the for -- a flattish year, it's the for It flattish. but it's up bit for

Bancroft We'll take Gabelli Funds. our final question Tony with from

there's obviously, into any on do I opportunity Chump grateful Honeywell, A a regarding Congratulations on Are side and ISSC. great great fields business the those Capewell school. displays thought obviously, from the that great quarter, at it, I'm getting a acquisition Capewell's like out using that dragged with the of the there? other there as smaller integration a across But well. know programs Five-Jump obviously that companies a then I job platforms. like acquisition. display lot other like OEs there Airborne Alabama and looks to be and of products not

that thoughts Just on want market. to get your

the in. do good Tony, you think this -- displays a market be We display really is think We some tell Yes. Eric. these is unit already I to displays. We can able to difficult, if be IP, impossible, the do be unless we the of particular overhaul in would to extremely did it, through to purchase these. Honeywell the way not it that that was

very customers our come product. and So then their HEICO I turn we and take and with expect, combine a product able IP their to terrific and think important. time And high-quality that's to that that can we're that have the deliver

So I'm within HEICO. avionics really package It about excited very, fits nicely our at very extremely this.

it. Great I product. Great job. safe Good, like product.

back the to time, any for And or additional conference Mendelson closing at remarks. will turn Laurans I this

technical a having we're Eric. think I challenge. This is

anybody answer any quarter speaking at with So reach earnings you call end have. to out our the and additional for our don't on happy on we're to questions third or to speak of towards Victor to -- with hesitate has whatever me and forward look call. If you to December. I'd you questions, everybody please thank our to fourth like our participating quarter Carlos, or dad, We

interest quarter. your We put for results very and HEICO. fourth today we've appreciate the thank you you forth hope look We great forward terrific a in that much to

Thank and summer. So call. of your much. This enjoy the stay very well rest concludes the you

participation. you and Thank thank you, for your

You may disconnect. now