Noah Poponak: Do you know the size of — in front of you guys there on how much of a markdown you took in the quarter?
Robert Mehrabian: Well, we took in Q1, we took about a $7 million EBITDA, which was basically $0.10 to $0.11. So if that hadn’t happened, we would have made our earnings.
Noah Poponak: Okay. Okay.
Robert Mehrabian: Despite the downturn in a short cycle imaging. We’ll fix it. We are fixing it.
Noah Poponak: Got it. Got it. That’s helpful. That’s helpful. Last one, I guess given how much you’ve now delevered balance sheet, net debt to EBITDA post-FLIR integration, you’re still going to have pretty healthy free cash flow despite the tweaks you’re making here today. If you’re coming out with a share repurchase, I guess the number you’re talking about is kind of small relative to your forward annual free cash flow generation. How much balance sheet firepower you have if you were to take leverage a little higher? A little bit of like if you’re going to lay up, lay-up type of thing — I guess I’m surprised that you maybe part of it is you formulated all this before the move in the stock today. Is there a scenario where you reevaluate something more aggressive in 2024? Do you need to keep room for the M&A pipeline? How would you respond to that?
Robert Mehrabian: Well, two ways. First, we’ll put out a K about our authorization. And if you look at that, we have authorization to go from what we said was $200 million to $250 million to $300 million, we can go up to $1.25 billion in buybacks. As you know, Noah, that depends on the stock price and how the markets reacts. But at the lower stock price that we — I’m just looking at this morning — I was looking at this morning, that would be a significant number of shares. We can do that if we choose. We’ll still have enough powder to make acquisitions. Frankly, that part of our portfolio doesn’t bother me. If you look at final data points, you may want to know is we have only $150 million of debt — fixed debt, that we have to pay in the second half of 2024.
In October, $150 million. We just paid $450 million. The next payment doesn’t have come due until 2026. And then if you look forward the next three or four payments, our average borrowing cost, and those are all fixed, our average borrowing cost is more like 2.35%. So that’s about as ideal as you want to have. And if, as we generate cash, we can buy the shares and we can make acquisition, and we haven’t even touched our line of credit yet. So from that perspective, I feel pretty comfortable.
Noah Poponak: Okay. Helpful. Thank you.
Robert Mehrabian: Thank you, Noah.
Operator: At this time, there are no additional questions in queue.
Robert Mehrabian: Thank you very much. We would like now to conclude the conference. Operator, I will now ask Jason to do so.
Jason VanWees: Thank you, John, and thanks, everyone, for joining the earnings call this morning. Again, all the earnings release are on our website. The replay is available. And for those on the call, please feel free to contact me if you would like to talk further. So thank you, everyone. Bye.
Operator: As we mentioned, this conference has been recorded for replay, which will be available for one month starting at 10:00 A.M. Pacific time today, and ending May 24, 2024 at midnight. To access and listen to the replay at any time, you can call (866) 207-1041 and use access code 832-7266. International callers, you can use the number (402) 970-0847 and again, for domestic, that is (866) 207-1041 and international (402) 970-0847 and the access code to use is 832-7266. That does conclude your conference call for today. And we do thank you for your participation and for using AT&T Event conferencing. You may now disconnect.
