So and we expected it to be good, and it is good. So, when I look at all these things and the size of the company, I also believe that, as a matter of fact, I have said many times that we have a goal of growing 15% to 20% bottom line. And in ‘23, if you add back those non-recurring expenses that we incurred, the legal investment banking and so forth for the acquisition, we grew about 20% over the prior year ‘22. I feel very confident that in the current year, we will be able to grow 15% or 20%. We don’t give guidance, but clearly, we focus on our budgets and where we think we will wind up. But I feel knowing everything I know now that we will be able to repeat a 15%, 20% growth. So – and then that’s after making these sizable acquisitions and digesting them.
So, HEICO is a much stronger, bigger company than it has ever been. I mean it’s a major factor today in this, in the industries we operate. So, for all those reasons, I would say HEICO has become a powerhouse, and for those reasons, I feel extremely confident of the future for HEICO. Does that answer your question?
Mariana Perez Mora: Yes. Thanks so much. And then when you think about potential challenges, what keeps you up at night, gets you up at night? Like where are you like paying close attention to?
Laurans Mendelson: Well, the only thing that I worry about is exogenous events, which we can’t control or strange things like this. But as far as the operation of HEICO, I am highly confident because we have great depth in management. In other words, since we are a company that’s not consolidated. We are diversified and we leave the decision-making down at the level where we believe it belongs. So, corporate doesn’t tell the operating entities, what they have to do. We say to them, what do you think we should do, and how will you accomplish it in your budget. And to that extent, I have great confidence. These are people who have been running these businesses for many years. Nobody, in my opinion, nobody knows their market, their labor market, their customer market better than the people operating the businesses.
So and they have done it over and over and over again. So, it’s not as though, well, this is something new, can they do it, can they accomplish it, no. They have been doing this for many years. I mean HEICO has a record of growing over 30-some years, the bottom line close to 20% compounded growth. So, because of that, I have great, great confidence in what they are doing. I mean Eric and Victor run those companies, and they go out and they meet with the business unit leaders constantly. They speak to them by phone. Carlos has an extremely detailed financial report weekly. So, we keep track of the receivables of growth, the backlog, cash flows, everything. So, for all those reasons, I really don’t worry about the operation of our company.
I just worry about, but I don’t worry about it because I can’t control it. The things like COVID, wars and things like that, which might impact us. But I can’t change that. I think we have done as well, Eric, Victor and our team members have done as well as can be done with the company in terms of operations and control, so none of those things worry me.
Mariana Perez Mora: Perfect. Thanks so much. And then if I may, one last question for Carlos. Could we please dig deeper on M&A? I am curious if you could discuss the two sides of it, like, number One, like pipeline of opportunities and like how – any color on pricing there? But also you mentioned deleveraging. What is the targeted leverage? And I am curious how and if the an easing interest rate environment influences that target?
Carlos Macau: Well, clearly, higher interest rates causes me to want to pay down debt quicker, right. I mean that’s kind of our motor operation here. Within the next 12 months to 18 months, I am targeting somewhere in the low 2x, and that gets us close to historic norms, which have been somewhere slightly lower than 2x. That was the goal when we set out, and that’s what our objectives are. As far as our – as far as M&A backlog goes, we have a very active process, both segments have teams that are focused on markets and opportunities. It’s very opportunistic. And as I mentioned earlier, there will be those handful of deals that we see every year, which I would probably categorize a smaller, $100 million spend and less and things like that.
We will find deals like that all day long, and if it makes sense for our shareholders, we will pull the trigger. That won’t damage our plan to de-lever. But as far as larger deals, such as Wencor where we spent over $2 billion, I would think over the next 12 months to 18 months that, that would be unlikely that we would pursue something like that until we have de-levered a bit…
Mariana Perez Mora: Perfect. Thanks so much and yes that’s perfect. Thanks so much and happy holidays to everyone.
Carlos Macau: Thank you.
Laurans Mendelson: Thank you. You too.
Operator: And we will take our next question from Ian Franz Engelberg [ph] with Baird. Please go ahead.
Unidentified Analyst: Good morning Larry, Eric, Victor and Carlos. Thanks for taking the question.
Laurans Mendelson: Good morning.
Unidentified Analyst: Eric, if I can just sort of a high-level question, just over the next 12 months, in terms of flight activity across narrow-body, wide-body and then sort of North America, Europe and China. If you can just let us know how you are thinking about sort of potential areas of strength and potential regions where there is a watch item for your business for the aftermarket?
Eric Mendelson: Yes. We are seeing strength, frankly, across the board. So, we dive down into the part number level. So, it’s just very, very broad-based strength straight across the board. So, I wouldn’t want to call out one area or another. It’s really just very strong across the board.
Unidentified Analyst: No, that makes sense. Thank you. And if I could just have a quick follow-up, Victor, I think you may have answered just with ETG. But if you could just talk about sort of the supply chain outlook in 2024 and beyond, so there is less of an impact. I think you guys mentioned $10 million. Does that keep on improving for the remainder of ‘24?
