Eric Mendelson: Hi. This is Eric. Good morning. Yes, we’re doing quite nicely in the Chinese market. I mean, we’re €“ we tend to be €“ I tend to not like to get into a lot of detail on specific customers or markets for competitive reasons. But I can tell you that we’re doing very well. We’ve got a very good presence there, and I think we are well positioned to pick up market share and to continue to grow that market as it recovers. Frankly, our sales there have really been outstanding over the last year in excess of what we had predicted and frankly, where we were in 2019. And I think we’ll continue to benefit as that market recovers.
Pete Osterland: Thanks. That’s helpful. And then I had one for Carlos. Could you provide an estimate for what you expect interest expense to be for the year? Is the first quarter level a good run rate to use? Or just any help you could get there?
Carlos Macau: Well, I think our interest right now is running close to 6% on our debt. It’s variable. We just borrowed $0.5 billion for Exxelia. So I haven’t really given a forecast on that. But if you take our outstandings, it’s going to be somewhere at $10 million. If you’re thinking about a run rate, it could be around $10 million a quarter, something like that.
Pete Osterland: Appreciate the help. Thanks.
Operator: We’ll take our next question from Kristine Liwag with Morgan Stanley. Please go ahead.
Kristine Liwag: Hey guys. Following up on some of the questions on leverage. Laurans, you said that you’ve got a busy pipeline for acquisitions. So how should we think about how you finance this? I mean the business is under levered and also you guys use the Class A stock to finance acquisitions before, how do we think about the balance of financing for those incremental portions? And you guys have historically run a very underlevered book. But what would be the peak leverage you’re willing to consider if the deals are available and accretive?
Laurans Mendelson: Do you want to answer? Basically, we will continue right now to use our credit line, which we’re underdrawn on that credit line. We have €“ we can go to $1.5 billion, and we have facility to go to $1.850 billion. And we’re right now what Carlos $650 million or something like that.
Carlos Macau: Yes, around $700 million.
Laurans Mendelson: $700 million. So we have plenty of room on that. In the event that we were to consider something larger, we have spoken to our banks and the banks are fully supportive of going much further if we would like to. At the moment, we have no request into them to do that. But we’ve always spoken with them and said, in the event that we need additional funds, we can do that. As for issuing HEICO Class A stock and an acquisition. We normally don’t do that because we find that because of our strong cash flow, we’d rather pay cash and reduce the debt balance quickly. As Carlos said earlier, we would increase the leverage amounts as long as we could bring them down to a much more manageable amount, which I consider in the area of 2x to 3x EBITDA €“ at 2x to 3x.
We’ve never been at 2x EBITDA. We’ve always been below. And we will continue to be a low-levered company. We never intend to go as some companies go to 5x, 6x, 7x. We do not do that. Does that answer your question?
Kristine Liwag: Yes, that’s great. Very helpful. Thank you. And if I could ask another question. During COVID, airlines were a lot more cost conscious and PMAs were a priority for them. Now that we’ve seen air traffic continue to be strong and sustained, we are seeing that globally. Can you talk about where PMA is in terms of your airline customers’ priorities? And if you could provide some information regarding how your market share evolved maybe for your top 10 customers and the use of PMA that would be most appreciated.
