Lee Rudow: Right. Scott, we have seen in the last couple of years, more activity on the PE side in terms of outreach to potential acquisitions, but literally, I think I’m comfortable saying this to date (ph), it’s very hard for us to point towards an acquisition that we wanted to make, that we weren’t able to make whether it’d be price or some other factor. PE is in this space, but we understand it. This is all we do, right. So we are intimate with these companies. We know the owners. We know the process. I think it’s very differentiated which is what I tried to allude to in my earnings call. So far it hasn’t had an impact on any company that we can point to that we wanted to acquire. So, I don’t see that changing anytime soon. There are some companies that had been acquired in this space, but the ones that we left behind because they didn’t meet the criteria of our disciplined process.
Scott Buck: Great. That’s helpful. And then my second one, could you talk a little bit about what drives customers to the rental business versus acquiring equipment and whether, or not how sustainable that really is, or whether we are just kind of in a peak macro environment that drives people to make that decision rather than another?
Lee Rudow: Right. Some of the factors include and I’d say, first and foremost, an urgent unexpected need. When you think about rentals, you’re thinking about someone needs equipment right now and didn’t necessarily see it coming, so they turn to the rental market. That would be a primary mover. You also have the difference between CapEx and OpEx. And as you go through different economic cycles, the macros we also this things cycle in and out as well a little bit, but those two sometimes balance each other off. I think the third factor is, the way we market rentals. I mean we are — we have become over the last, I’m going to say half a decade, last three years to five years really adept at marketing. Getting into the digital world, with our brand, with our offerings, with our diverse value proposition and rentals is part of it.
So I think rentals connects to service, service connects to rentals, distributions in between both. So it’s that combination — a unique combination that we bring to market. I think we factor all three of those in, the macros, the urgent, unexpected need, and the way we go about trying to grow our rental business, those are the three factors. And I see them — I don’t see any major changes on the horizon that would change me — our way of thinking in terms of the consistency of that business.
Scott Buck: Great. I appreciate that. That’s it from me, guys. Congrats again on the quarter.
Lee Rudow: Okay. Thanks, Scott.
Thomas Barbato: Thanks, Scott.
Operator: Our next question comes from the line of Martin Yang with Oppenheimer. Please proceed with your question.
Martin Yang: Hi. Good morning. Thank you for taking the question. I have two. First on CapEx. You referenced the need to increase for rental assets. So the CapEx in 3Q, as a pickup quarter-over-quarter is that associated with your expansion on the rental business? And then, do we see — should we see that as the goal for a run rate, or another step up as a more normalized CapEx after the acquisition?
Thomas Barbato: Yeah. I think Martin, some of that — I was specifically referencing the year-over-year increase that we saw in Q3, and certainly rentals played a role in that. As we continue to grow the rental business, we’ll continue to see additional investment required in that space, it’s just the nature of that business, right. You’ve got to have the assets in order to grow the business. But it will be done in a very well thought out kind of methodical way and with a focus on assets that are going to drive the highest returns.
Martin Yang: Got it. Thank you, Tom. My next question is on the lead generation potential between rental and distribution. Is one more effective than the other, for example as rental business a better lead-gen tool than distribution?
Lee Rudow: I wouldn’t characterize it that way, Martin. And I’m not sure we are prepared to rank the two. I would clearly with distribution, people are buying test equipment. At some point, we’ll have a need to have that test equipment service. So it is just such a natural connection there. And some of them need the calibration done right upfront in order to put into service. So that’s hard to get better than that but with our rental customers to the degree that they’re picking up test equipment users that we wouldn’t otherwise have as a customer, if we didn’t have a rental program, yes, that will be incremental. To the degree that our rental customers are a byproduct of our distribution customers our installed base, then it would be not incremental and I’m not sure if any better than our core distribution.
So I think they’re both important, but you just got to love the connection between the distribution and it is a really close connection from distribution to rentals.
Martin Yang: Thank you, Lee. Just a quick follow-up. So the — for both rental and the distribution, are the equipment in both services recalibrated before you deliver to your customers?
