Robert Mehrabian: Yes. I think, to cut to the chase, we still have over $3 billion of backlog, which is very healthy. There are some short-cycle businesses that there have obviously been short cycles, especially in the environmental area, as an example. 0.9, 0.93 does not bother me, only because we have also a slew of new products that are coming to market. For example, just take going back to FLIR Defense, we just introduced a new nano-drone called the Black Hornet 4, which can go twice as high as the one we have, which is Black Hornet 3, was only 10,000 feet. This can go up to 20,000 feet, last longer, be a lot more — do a lot of other things. We also have new programs in counter-UAS. And the other thing that is exciting for us that we’re just starting to get some traction on is understanding where we can bring our intelligence systems, if you want to call it, artificial intelligence, to bear.
We have now about $250 million to $300 million of products that are benefiting from not just being sensors but being systems, cameras that provide intelligent information. So, it doesn’t bother me, the slight decrement in backlog. It’s primarily because certain parts of the market, like semiconductor is done. But all semiconductor inclusive across Teledyne is less than 10%. So, it doesn’t bother me. I think the more important thing is, can we just keep bringing new products and make the acquisitions that we are now able to do because our leverage is down and do what we’ve always done, acquire, integrate and increase our earnings per share.
Andrew Buscaglia: Yes. Okay. Well, that dovetails into my next question around M&A. With your leverage now back below 2ish, what are you seeing in the pipeline for next year? And then, maybe if you don’t see M&A materialize, what are your thoughts on share repurchase just given where your valuation is?
Robert Mehrabian: I’ll answer the M&A question. Share repurchase is something that we haven’t done. We’ve only purchased shares I’m going to say, 10, 12 years ago about $400 million, when you look at our market cap versus that very small fraction. I think our M&A opportunities are there. We’re looking at smaller acquisitions at the present time with one or two what I’ll call, midsize, several hundred million dollar acquisitions in the potential pipeline. The one thing we have to be careful about is there’s some really outrageous prices that people are paying for some of the acquisitions we’ve looked at. multiples of sales going 15 times. And that’s just not us. Well, we are looking at smaller acquisitions, both here and in Europe and they’ll come along just like we’ve done before, what we call the string of pearls, and we will make those acquisitions.
If we don’t make any acquisitions on the flip side, by the end of next year, our leverage ratio would be 1, which was actually less than that before the FLIR acquisition. And cash also will help our earnings, but our primary focus is going to be acquisitions.
Operator: Next, we go to Rob Jamieson with UBS.
Rob Jamieson: Just a couple. Can we run through the segment — each segment and what you’re embedding for organic and margin expectations just for the rest of the year? And then also, just hit on your net leverage comment there. Is it safe to kind of assume that you guys are going to be able to produce above like maybe $1 billion in free cash flow in ’24?
