None of our customers and our salespeople do not believe that the airlines are overstocking. But as I’ve cautioned everybody over the last number of quarters, every downturn, of course, is followed by a recovery and every recovery is followed by a slight overshoot. And I specifically asked this question to our sales leaders, are we in €“ do we have any indication that we’re in the overshoot area? And the answer is no. Nobody thinks that we’re in the overshoot area. So I’m cautiously optimistic. The numbers are incredible. They’re phenomenal. I think we’re capturing market share, and this is unique to HEICO. We’ve €“ we speak to our customers, and we see what’s going on with other suppliers. And we think that, frankly, the performance at HEICO is really with regard to the aftermarket is industry-leading, and we’re outperforming others.
And that’s as a result of being able to hold inventory, treating our customers, right, not jamming them with price increases, making sure that they get value. So I feel very good about where we are.
Larry Solow: And I know we’ve asked questions on the margins the last several quarters, they’ve been kind of running a little bit above that sort of 2021 historical range. Has the mix changed at all over the last few years that could maybe help that margin or not particularly?
Eric Mendelson: Not particularly. Not particularly. As a matter of fact, we’ve had a little bit more intangible amortization. So that would have as a result of the acquisition. So that would have decreased the margins. So no, I don’t think it’s really a mix thing. I think we’re just very efficient. We’ve got a great team. The thing that’s interesting is I think that these margins are a result of, frankly, what we did a decade and two decades ago. They’re not as a result of what we’ve done in the last year or two. When you treat your customers, right, you treat your people, right? You get into a virtuous cycle, and I think that’s very much where we are. And I think we’re reaping the benefits of the long-term the culture that we put into place over 20 years ago, 30 years ago, and that’s what’s driving these numbers.
We have the parts when other people did. We continue to develop a lot of new PMAs and other products through the downturn. We continue to take inventory. We did all of the right things, and that’s why these numbers are coming out and frankly, even surprising us.
Larry Solow: Got you. And then just one quick follow-up for Carlos, just on the €“ a little bit of a higher tax rate this quarter. I know a little bit less stock option credit for you guys. Has your full year outlook at all changed? I don’t know if you commented €“ I was going to do on the call for a couple of minutes. Has your full year outlook changed at all from the tax rate?
Carlos Macau: No, it really hasn’t. The fourth quarter tax rate was substantially larger this quarter than Q1 of 2022, which the reason Larry mentioned is the lower benefit from tax stock option, the tax benefits that we experienced. If you look at the rate, it’s 100% of the increase is due to that. I think for the year, we should fall out between 20% and 21%, kind of where we fell last year. I think that’s where we’ll wind up this year.
Larry Solow: Got you. Appreciate all the color. Thanks guys.
Carlos Macau: Thanks, Larry.
Operator: Our next question comes from Pete Osterland with Truist Securities. Please go ahead.
Pete Osterland: Good morning. Thank you for taking our questions today. First, I just wanted to ask, within the Flight Support Group, what are you seeing for product demand in the Chinese market? Has there been any choppiness as a result of their emergence from the pandemic lockdowns? And are you seeing any potential that sales into that market could be a strong tailwind for FSG sales over the rest of the fiscal year?
