Good morning. My name is Crystal, and I will be your conference operator today. At this time, I would like to welcome everyone to the HEICO Corporation Fiscal 2013 Fourth Quarter and Full Year Earnings Results Conference Call. [Operator Instructions] Your host today is Laurans A. Mendelson, Chairman and Chief Executive Officer of HEICO Corporation. Before the conference call begins, I will read the following statement. Certain statements in this conference call will constitute forward-looking statements, which are subject to uncertainties and contingencies. HEICO's actual results may differ materially from those expressed in or implied by those forward-looking statements as a result of factors including, but not limited to, lower demand for commercial air travel or airline fleet changes, which could cause lower demand for our goods and services; product specification costs and requirements, which could cause an increase to our costs to complete contracts; governmental and regulatory demands; export policies and restrictions; reductions in defense, space or homeland security spending by U.S. and/or foreign customers or competition from existing and new competitors, which could reduce our sales; HEICO's ability to introduce new products and product pricing levels, which could reduce our sales or sales growth; HEICO's ability to make acquisitions and achieve operating synergies from acquired businesses; customer credit risk, interest and income tax rates and economic conditions within and outside of the aviation, defense, space, medical, telecommunication and electronic industries, which could negatively impact our costs and revenues. Those listening to this call are encouraged to review all of HEICO's filings with the Securities and Exchange Commission including, but not limited to, the filings on Forms 10-K, 10-Q and 8-K. We undertake no obligation to publicly update or revise any forward-looking statement whether as a result of new information, future events or otherwise. I would now like turn the call over to Mr. Mendelson. You may begin your conference.

Thank you, and good morning to everyone on this call. We thank you for joining us, and we welcome you to the HEICO Fourth Quarter and Full Fiscal 2013 Earnings Announcement Telecon. I'm Larry Mendelson. I am the Chairman and CEO of HEICO Corporation. And this morning, I'm joined here by -- with Eric Mendelson, HEICO's Co-President and President of HEICO's Flight Support Group; Victor Mendelson, HEICO's Co-President and President of HEICO's Electronic Technologies Group; Tom Irwin, HEICO's Senior Executive Vice President; and Carlos Macau, our Executive Vice President and CFO. Before reviewing the operating details, I would like to take a few moments to summarize highlights of another record-setting fourth quarter and full year results. Full fiscal 2013 net sales passed $1 billion for the first time in HEICO's history. This achievement is a testament to the focus and dedication of every team member in our company, and I would like to personally thank them at this time for this wonderful accomplishment. In July 2013, we paid our 70th consecutive semiannual cash dividend since 1979. And this was paid at a rate of $0.056 per share, which represented a 17% increase over the prior semiannual per share amount. As reported yesterday, we declared an increased regular semiannual cash dividend of $0.06 per share, as well as a special and extraordinary cash dividend of $0.35 per share. The aggregate $0.41 per share cash dividend will be paid on January 17. The regular semiannual cash dividend represents a 7% increase over the prior semiannual per share amount of $0.056. And of course, this has been adjusted for our 5-for-4 stock split in October 13. The dividend payable in January would be the 71st consecutive semiannual dividend since 1979. In October of 2013, our ETG group completed the acquisition of Lucix Corporation.…

Thank you. The Flight Support Group's net sales increased 27% to a record $189.6 million and increased 17% to a record $665.1 million in the fourth quarter and fiscal year of 2013, respectively, up from $149.7 million and $570.3 million in the fourth quarter of -- and fiscal year '12, respectively. The increase in the fourth quarter and fiscal year of '13 reflects organic growth of approximately 14% and 9%, respectively, as well as additional net sales of $18.7 million and $42.3 million, respectively, from fiscal '13 and '12 acquisitions. The organic growth in the fourth quarter and fiscal year of '13 principally reflects an increase in net sales from new product offerings and improving market conditions within our aftermarket replacement parts and repair and overhaul services product lines and within our specialty product line. The Flight Support Group's operating income increased 37% to a record $34.9 million and increased 17% to a record $122.1 million in the fourth quarter and fiscal year of '13, respectively, up from $25.4 million and $103.9 million in the fourth quarter and fiscal year of '12, respectively. The increase in the fourth quarter and fiscal year of '13 is primarily attributed to the previously mentioned net sales growth. The Flight Support Group's operating margin increased to 18.4% in both the fourth quarter and fiscal year of '13, up from 17% and 18.2% in the fourth quarter and fiscal year of '12, respectively. The increase in the fourth quarter and fiscal year of '13 is primarily attributed to the previously mentioned net sales growth. Now I would like to introduce Victor Mendelson, Co-President of HEICO and President of HEICO's Electronic Technologies Group, to discuss the results of the Electronic Technologies Group.

Thank you, Eric. The Electronic Technologies Group's net sales increased 6% in both the fourth quarter and the fiscal year of 2013 to a record of $99.9 million and $350 million, respectively, up from $94.4 million and $331.6 million in the fourth quarter and fiscal year 2012, respectively. The increase in the fourth quarter of 2013 reflects $3.1 million of additional net sales from a fiscal 2013 acquisition and organic growth of approximately 2%. The organic growth in the fourth quarter of fiscal 2013 principally reflects an increase in demand for certain aerospace and space products, partially offset by a decrease in demand for certain defense products. The increase in fiscal '13 reflects $8 million of additional net sales from fiscal 2013 and 2012, that's fiscal 2012, acquisitions and organic growth of 3% approximately. The organic growth in fiscal 2013 principally reflects an increase in demand for certain space and aerospace products, partially offset by a decrease in demand for certain defense and medical-related products. The Electronic Technologies Group's operating income increased 3% to a record $25.8 million and increased 7% to a record $83.1 million in the fourth quarter and fiscal year of 2013, respectively, up from $25 million and $77.4 million in the fourth quarter and fiscal year of 2012, respectively. The increase in the fourth quarter of 2013 reflects the previously mentioned increase in sales. The increase in fiscal 2013 principally reflects the previously mentioned increase in net sales and improved operating margin. Turning to ETG operating margins. Our margin was 25.8% and 26.5% in the fourth quarter of fiscal 2013 and fiscal 2012, respectively, and improved to 23.7% in the fiscal year of 2013, up from 23.4% in the fiscal year of 2012. The decrease in the fourth quarter of fiscal 2013 principally reflects increases in certain selling, general and administrative expenses and new product development research and development expenses, as a percentage of net sales. The increase in operating margin for fiscal 2013 comes mostly from the benefits derived from increased net sales on higher-margin products. At this point, I turn the call back over to Larry Mendelson.

Thank you, Victor. Diluted earnings per share -- consolidated net income per diluted share increased 22% to $0.44 in the fourth quarter of fiscal '13. This is up from $0.36 in the fourth quarter of fiscal '12. Our consolidated net income per diluted share increased 20% to $1.53 in fiscal '13 and that was up from $1.28 in fiscal '12. The earnings per share increases for both periods were principally derived from continued strong performances from both operating segments. All diluted earning per share amounts have been adjusted retrospectively for our 5-for-4 stock split, which was distributed to shareholders in October 2013. Depreciation and amortization expense increased by $2.4 million and $6.1 million in the fourth quarter and fiscal year of '13. That was up from $8.5 million and $30.7 million in the fourth quarter and fiscal year of '12. The increase in both periods principally reflects higher amortization expense of intangible assets recognized in connection with our fiscal '13 and fiscal '12 acquisitions. R&D expense increased 17% to $9.4 million in the fourth quarter of '13, up from $8 million in the fourth quarter of '12 and increased 8% to $32.9 million in fiscal '13, up from $30.4 million in fiscal '12. Significant ongoing new product development efforts are continuing at both Flight Support and Electronic Technologies as we continue to invest over 3% of each sales dollar into new product development. I would also like to point out that in recent years our Flight Support Group has been adding approximately 300 to 500 new Parts Manufacturer Approvals or PMAs and 300 to 400 FAA-approved repairs or what we call DER per year. We do intend to continue our investment in R&D during fiscal '14 at similar levels as we experienced in fiscal '13. SG&A expenses did increase 16%…

[Operator Instructions] Your first question comes from the line of J.B. Groh with D.A. Davidson. J. B. Groh - D.A. Davidson & Co., Research Division: Just a couple of questions for Eric. Maybe could you kind of break down this pretty impressive organic growth rate in the quarter? I mean, you talked a little bit about market penetration, new product introductions, those sorts of things. Do you get the sense that there was any sort of filling the bins at customers? Or how should we sort of disaggregate that 14% growth rate and the different ways that you have to grow?

J.B., this is Eric. Thanks for your question. Yes, I think there was a certain amount of pent-up demand that was out there. We would not characterize it really, though, as restocking where people are holding more inventory. But there's definitely some of the tired equipment came back and needed a little bit more service than had been expended in the prior number of years. There was a little bit of deferred maintenance. But I would not characterize it, as I said, as restocking, i.e., holding more months of inventory on hand. The strength was really pretty broad based. It was not in any one area. It wasn't just in the PMA parts area. It was also in the repair and the distribution specialty product lines. And they all performed similarly. And as my dad said throughout the call, I really think that this is a result of the culture that we have and the kind of people we have running these businesses as opposed to any one business or product line within that business. These folks just figure out how to drive the sales increases as opposed to, I would say, a rising tide in any particular business, including the PMA business. J. B. Groh - D.A. Davidson & Co., Research Division: So strength across-the-board, I guess, is the way you'd characterize it?

Well, I would -- strength across-the-board, but really execution even more than the strength. J. B. Groh - D.A. Davidson & Co., Research Division: Okay. And then Victor, you had a pretty nice margin in ETG this quarter and that typically kind of goes up and down. What do we attribute that strong margin performance this quarter versus last quarter? And then also maybe you could kind of remind us the different end market exposures in ETG percentages?

Sure, J.B. This is Victor. I would say, first, the answer to the first question as to the margin, what accounts for the margin, I would say, is mix -- more favorable mix. And as you know and you pointed out, that really does shift around over the course of the year and so was just more profitable on a higher-margin product that was coming out during the period. In terms of how it breaks down, if you look at our business in the ETG, somewhere around 1/3, maybe 35% or so, is defense-related. Probably a 1/4 of that is foreign-destined. So it may be to U.S. companies, but that's going to a foreign country, so -- about 3/4 would be domestic. Then about 20% of our business in ETG is space, somewhere in that neighborhood or close to that. Commercial aviation and commercial aerospace would be somewhere around the 10% range. And the balance of it, the roughly remaining 1/3 or so comes from a variety of markets, probably the largest of which is for medical equipment -- the products going into medical equipment like power supplies, high-voltage cable assemblies and so on. And then a variety of other markets that we serve, some of it's pro audio and broadcast markets, some of it is telecom, some of it's computer, just general electronic markets as well from other industrial markets. J. B. Groh - D.A. Davidson & Co., Research Division: Got you, okay. And then one quick one for Larry. On your CapEx outlook for the year, I think, typically, in the past you've said that sort of the wish list doesn't necessarily mean that we spend that much. Can you comment on kind of CapEx spending plans for 2014, whether that's -- are there specific things in there? Or is it just the normal course?

Well, as I've said in the past, the way we do this, we have a bottoms-up wish list from all the subsidiaries. They give detailed plans for what they intend to need for CapEx for the following year. And they normally overestimate what they're going to use because if they come to the well and they don't have the budget allocated by the board, then it becomes a problem for them to get it approved quickly. So I think, in the past, Tom can tell you, but I think in every year, we have overestimated what we will spend in CapEx. I can't guarantee it because maybe they'll find that they need it. But normally, our CapEx is a wish list and the actual CapEx expenditure is significantly less than what it was. And that was the case in 2013 and in previous years, too. But I think we try to make it all-inclusive, so we don't have any surprises and we don't have the funds because if they need a new machine or they need some equipment to fill an order or please a customer, we want to be able to respond very quickly. One of the advantages we have by having a very flat corporate bureaucracy is that the business unit leaders can get approvals with a phone call. And once we have the CapEx budget and we've scrutinized it long before they ever ask for it, we're pretty familiar with what they might require. So all they need is a call, a justification why they're calling for it now and they can make one call to Eric or Victor and then get my approval and we're talking about an hour. And there's no delay and there's no corporate bureaucracy that has to be followed in order to get this CapEx. They're all done in advance, preplanned, so it works very well for us. I don't know -- does that answer your question?

Your next question comes from the line of Arnie Ursaner with CJS Securities.

I know you try to be conservative as a team, but at least for one number in your guidance for next year makes no sense. Your operating margin in the range of 22% to 24% for ETG, you haven't had a number that low since 2008. So perhaps -- so could you comment on -- I've got to believe somewhere in there, there's an amortization expense because your mix towards space and aerospace should lead to higher margins. So what are we missing here?

Yes, I'm going to let Tom respond.

Yes, Arnie, this is Tom Irwin. Relative to our guidance and our expectations, operating margins, as you're pointing out, our commentary was 22% to 24% depending largely on product mix. And as Victor mentioned and Larry mentioned, the big uncertainty on that side is the defense. We have some very high-margin defense products. We have some lower margins, but -- so that's, number one, the explanation for the swing. If you look at the change from '13 to '14 guidance estimates, you're exactly right. If you look at principally the acquisition of Lucix, our amortization of intangibles in 2013 in that segment ran about 4% of sales with the Lucix about 5%. So you're talking about roughly 100 basis points of additional amortization, which brings it, if you will, to the low end of the range. And we hope to maybe pick up some if the mix helps us. But that's basically it, you're right.

And then my other question is your SG&A had a pretty sizeable jump and again well-deserved discretionary bonuses or performance-based bonuses, but did you also have any M&A transactions that concluded without an outcome you had -- that you had to write down the expense?

No.

The answer is no.

This is Carlos. There's no unusual expenses related to any acquisitions that have not closed or are in the process that ran through there during the fourth quarter.

Okay. You're talking about a roughly $13 million jump year-over-year in D&A, but can you give us the Q4 D&A number, please?

We'll get that handy -- I mean, roughly, I can tell you the $49 million for next year is roughly $28 million in amortization and $21 million in depreciation. And again, the big jump is from 2013 to 2014 is amortization and additional depreciation on the acquired businesses.

Your next question comes from the line of Julie Yates Stewart with Crédit Suisse. Julie Yates - Crédit Suisse AG, Research Division: A question on the free cash flow. The free cash-to-net income conversion in '13 was, I believe, 110%, which was below where you've been running over the last 5 years, which I think is around 150%. And next year, you're guiding to 120%. So how should we think about the conversion over the next 3 to 4 years? Can you return to that kind of 150% level? Or is there a reason that maybe you run a little bit lower as the business continues to grow?

Julie, this is Tom Irwin. Our outlook for next year is basically roughly 100 -- well, our guidance refers to a cash flow from operating activities to be consistent and that's about 140%. It was down a little bit this year to 129% of net income. But again, as Larry mentioned, that's a timing thing of, between '13 and '14, some taxes and some payroll deposits. But we're still looking at about 140%. Historically, that cash flow from operating income -- cash flow from operating activities relative to net income has been running about 150%. So not a big, big swing. Some of the businesses might have a little different mix in working capital requirements and our guidance estimates. And again, we do, particularly out of the box, early in the year try to be conservative. We want to give expectations that we're highly confident of. We may do better at cash flow from operations than those numbers, but I think it's not materially different. It's not a change in the fundamental strategy or requirements of our businesses. As Larry mentioned earlier, the CapEx number, which is probably included in your free cash computation, typically, we only spend 80% to 90% of that, so that will drive up any estimated free cash based on those numbers.

Julie, I think, just -- I have to look back, but my -- just recollection, I think as Tom said, coming out of the box, we kind of guide to the low side and normally it creeps up. Also, I think that the Lucix amortization is a very confusing bit of accounting because there's a contingent payout. And depending upon the contingent payout, we have to estimate what the contingent payout may be and you might as well take a dart and fling it at the board to try to figure this thing out. The accountants have really done a number on us and they tell us, estimate. Well, if we estimate, we would know what it is and we wouldn't have to have a contingent payout. So the whole thing to me makes absolutely no sense. However, we have to follow GAAP and we have to make some kind of an estimate. So depending upon how the estimate comes out, we could have greater good intangibles because we pay more because the company earned more and then we would have greater amortization. So it's a very, very confusing computation. And I could tell you at our audit committee meeting and the board meeting, we go over this and you really -- it's a very difficult thing, but we think we're close to it. We've done our best, but that also could influence what ultimately is the add-back from the amortization. Julie Yates - Crédit Suisse AG, Research Division: Okay. And did that have anything to do with coming in a little bit below where you had initially guided for the year on cash flow from ops? I think the initial target was 140%?

No, no. Not at all. The big thing is what I mentioned. There was about $7 million of pre -- in the payroll and the income taxes, we overpaid income taxes and it fell into fiscal '13. And so it's really a -- the tax portion was a prepayment of '14. So that was -- it's really not significant. The other thing was a payroll transfer that was done on the 31st, which applied to November and it was just -- the total of them was a swing of about $7 million. If you add that back, which you really should do, it comes out to the same as last year. So the answer is no. The Lucix transaction had nothing to do with that. Julie Yates - Crédit Suisse AG, Research Division: Okay. And then just last question on inventories. Was the increase to the year, is that primarily in the ETG business or FSG or is that in both?

Most of the increase, Julie, in the inventory relates to Lucix acquisition. We had an increase due to the Reinhold acquisition that we acquired about 5 months ago. And then the rest of it, frankly, is due to organic growth and our expectations for the coming quarters. So nothing unusual going on in the inventory line other than that.

And again the terms were actually down, down slightly.

Your next question comes from the line of Eric Hugel with S&P Capital. Eric Hugel - S&P Capital IQ Equity Research: Eric, with regards to your margin expectations for next year relatively flat for this year, you guys are looking for some pretty decent organic growth. Can you talk about sort of why you're not seeing margin expansion?

I'll answer, this is Eric, in terms -- since I've kind of focused on the forward-looking stock. But I would say within Flight Support Group, as you're pointing out, we are cautiously optimistic about the commercial aviation growth. On the other hand, that's about 80% of FSG. The other 20%, in particular, some defense component, as we mentioned in the details of the call, there is some level of uncertainty and perhaps some lowering of sales. They could be down 5% or 10%, something like that, in some of the defense components. So bottom line is when we try to estimate the impact of the upside on the commercial aviation with some pressures on some product within the defense product lines that are relatively high margin. That has -- the caution, if you will, about not trying to forecast improvement in operating margins before in the flat area. Again, as you're aware, we're constantly looking to improve operating margins and often are able to pick up a couple of basis points. But again, to come out of the box, given the uncertainty, again particularly in the defense area, we're cautious and feel much more comfortable beginning the year with flat margins in that segment. Eric Hugel - S&P Capital IQ Equity Research: Did you say defense sales in FSG is about 20% of segment?

No, I said commercial aviation is about 80%. Defense is running, with the addition of Reinhold, now is about 12% and then about 8% runs the other primarily industrial products. So the 20% is both defense and industrial and then commercial is roughly 80%. That's sort of a pro forma with Reinhold being in there for a full year. Eric Hugel - S&P Capital IQ Equity Research: Okay, great. Can you talk about -- Larry, can you talk about the M&A pipeline both in terms of activity and pricing? And are there more opportunities in sort of one area versus another?

No, I would say we're an equal opportunity buy. We're opportunistic and wherever the opportunity presents itself, I would say that the normally -- at this time, I think the pipeline is sort of normal. We do see prices -- requested prices pushing up a little bit. Nothing significant that we can't handle or we're not talking about -- the things that we look at normally we like to pay 5x to 7x, 7.5x so maybe they're pushing up to 8x or 8.5x and we'll still buy something at 8x, 8.5x if we can feel highly confident that, in the first year that we own them, that the growth of the company will result in us having an effective multiple of somewhere between 6.5, and say, 7. So the answer is no. We have opportunity on both sides. And it fluctuates throughout the year. Sometimes you have Flight Support a lot of opportunity there. Other times, you have a lot of opportunity in Electronic Technologies. But nothing unusual. Eric Hugel - S&P Capital IQ Equity Research: All right. And just 2 quickies, if I can. In terms of how should we think about share creep for next year? And for your tax rate, are you expecting the R&D tax credit to be renewed or not? How is that -- is that factored in?

I don't think the R&D tax credit is factored in because the law right now doesn't permit us to do that. So if they change the law, if they amend it, which they've done over a number of years, then we'll reflect it in the quarter that it's approved. So that -- when you say share creep ...

I think what he's referring to is -- and if you look at our fourth quarter share count, it's gone up. And we're running, I think, in our internal estimates, if you will, we're using around 67,300,000, 67 4 -- 67,400,000 shares roughly, which reflects the fact that it's up a bit basically based on dilutive options.

We have no intention at this time of issuing equity or anything like that. Eric Hugel - S&P Capital IQ Equity Research: No, no. I understand that. But -- and just Carlos, what's the value of the R&D tax credit to you guys?

The value of the R&D credit on an annual basis? $6 million.

Your next question comes from the line of Sheila Kahyaoglu with Jefferies.

So my first question's on FSG. What sort of flight hour growth are you embedding in your guidance for next year? And how do we think about the remainder, whether it's new products or share gains? And would it be possible to be a bit more granular on what you're seeing in the aftermarket, whether it's regional trends or by aircraft platform?

Sheila, this is Eric. With regard to the, the available seat mile forecast going forward, our -- again, we do a bottoms-up budget by operating unit and their budget sort of takes into account consensus on that, which is sort of roughly 5%. And with regard to areas of focus, we don't like to go into too much detail there for competitive reasons. But again, we're seeing the -- our guidance assumes strength across the -- sort of equal strength across the business. We don't really see, you wanted a little bit of color, getting a little more granular, we don't see any particular areas of strength such as PMA or repair. It's really very, very much broad based. And I think the reason why HEICO is outperforming the market is, again, as I said, really as a result of our people and the culture that we develop in the business and the kind of teamwork that the companies operate with and have operated with for a very long time. This is not -- some big companies come out with programs every couple of years on how they're going to change how they operate in order to increase immediate results. This is not as a result of any of those kind of programs. It's a result of our folks just being properly motivated, having the right people, having the right teams in place who, frankly, probably wouldn't do well in other organizations that are more bureaucratic and layered with all sorts of nonsense. So I think that it's just outperformance really in all the areas. Whether it's a large commercial, regional, it's really across-the-board.

Okay, I appreciate that. Then maybe if you could provide more color on the integration progress within Reinhold and Lucix. And if you could talk about those 2 properties at all and where you're seeing opportunities for sales synergies or any efficiencies within those platforms.

The answer is that, with regard to Lucix, we think there are some synergistic opportunities with some of the other companies that we have and we're investigating it. We're looking into it. None of our assumptions -- when we make acquisitions, we rarely assume that we're going to have synergies. We take a conservative approach and we just assume little or no synergy. So all the projections and guidance that we've given you show -- assume little or no synergy. But sometimes we have it. As far as Reinhold goes, same thing. We're looking for opportunities, but we don't build in any assurances.

There are some opportunities to open some doors, which we've done effectively. But again, the HEICO strategy is to make sure that the individual business heads have full responsibility for the control of their business. So they've got the authority. They've got the responsibility. In the corporate office, we try not to mess around. We want to be helpful. We want to open doors. But we want them to be fully responsible and tell us how we can help them. So most of these numbers are not due to any synergies other than really infusing the HEICO management style, which is making sure that we back up our people and we're there for advice in consultation and make sure they build the best teams possible and that we really focus on how those people are taken care of. Because If they're happy in what they do, they remain doing what they do. They work hard at it. When things don't go -- when things go wrong, as occasionally they do, we don't beat them up over it. We talk to them about what we need to do to go forward. And it's really not due to corporate initiatives from the top telling them how to operate synergistically.

Your next question comes from the line of Stephen Levenson with Stifel. Stephen E. Levenson - Stifel, Nicolaus & Co., Inc., Research Division: Could you give us maybe a little bit broader picture of how you're looking at the trends in commercial aerospace right now, particularly how something like the American Airlines-US Airways merger might affect HEICO? And how things are shifting particularly overseas with low-cost carriers who, it seems like, are outsourcing more of the service and doing less with the OEMs?

Yes, Steve, this is Eric. Again, with regard to any specific airlines or customer's products, we don't like to comment because out of respect for confidentiality and also not to give our competitors the heads up. But needless to say, we do a lot of work with both American and US Airways. They will continue to operate as 2 separate airlines for the next while. So we will continue to support them and we're optimistic about the future. With regard to the LCCs and the other airlines around the world, we get in there, we talk to them. Again, typically, when an airline is taking a high percentage of their current fleet as new equipment, they don't realize what's about to come down the road and hit them in terms of prices and costs. So typically, as that fleet matures, that's when it becomes more of an opportunity for us. But we are very active around the world, making sure that we stay out there with the customers and support them when they need our products. Stephen E. Levenson - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And in terms of aircraft that have been put into service over the last several years and the once that are still going at higher rates, do you see a sweet spot period approaching? Or do you think that's still well off in the future?

Yes, I think that you've got to balance the new aircraft coming in with some old aircraft coming out. I think that's all really embedded in our numbers. I wouldn't -- we're not anticipating really some huge sweet spot coming in there. I think it's really just a lot of blocking and tackling and execution on developing new products, make sure -- making sure we sell the existing products to people who aren't buying them, acquiring other businesses. But no, we're not anticipating really the tide to rise and us just to get lucky and sort of sit there and be the beneficiary of all sorts of good macro trends. I think it's very complex to be able to model all that out. It's not really possible. So instead, we try to break it down into small tasks where our businesses understand where they need to deliver. And I think that's why we're successful doing it.

Your next question comes from the line of Chris Quilty with Raymond James. Chris Quilty - Raymond James & Associates, Inc., Research Division: I just want to circle back with comments that Eric made earlier about the channel inventories. I was just hoping you could clarify that a little bit. It sounds like you're seeing channel inventories, is it fair to say at a normalized level? Or was there some channel fill that you think you saw over the past 2 quarters that help boost the organic growth?

We think that the airlines continue to run lean. If you look at organic growth that comes from, I suppose, in theory, it comes from 3 places. One is obviously new products, which are defined either as parts we haven't sold before or parts we haven't sold to that particular customer. The second area would be if people increased the amount of inventory they want to keep on hand number of month's supply and we don't see that. The third would be sort of the natural evolution in the repair cycle where, in good times, they tend to do more maintenance than in bad times. And then what happens is, sooner or later, the stuff that they fixed in the bad times comes due for service. And I think we did see some of that third. We saw the first and we saw the third part portion in our -- the second half of 2013 whereby we're very successful selling new parts to both new customers, as well as developing new stuff and in addition to airlines just needing a little bit more. Because the stuff that came in was in slightly worse condition than they had anticipated. But no, it's not what we would define as traditional restocking, i.e., holding more parts on hand. Airlines are not coming to us saying, we're holding whatever it is 1 to 3 months of inventory. Now we want to hold 2 to 4 months or 5 to 6 months of inventory. That's not happening at least from our perspective. Maybe it's happening for other people, but it's not happening with the customers that we're working with. Chris Quilty - Raymond James & Associates, Inc., Research Division: Okay. How about the fourth lever, which is pricing? Have you seen any changes, either in your own pricing increases or that of the OEMs, and where do you think you sit in the sort of normal range of price increases that you've seen over time?

That's a very good point. I'm glad you mentioned it and you can see sort of, from my thinking, we don't normally consider pricing to be a huge opportunity for us. We do continue to raise our list prices consistent with OEM prices. But normally, when we have a customer who's locked in with us, we tend to be very customer-friendly, maybe overly customer-friendly. And that's sort of been the culture of the company for right or for wrong. And OEMs continue to increase prices at a significant clip. Some of the acquisitions that you've seen out there have been done at very high multiples. And as a result, they've got to cover the cost of capital and what they pay for these businesses. So as a result, they jacked up prices significantly. So I think that, that is an opportunity for us probably to be a little more aggressive. And clearly, when list prices go up and we develop a product, our price would be set against the current list price at the time we offer the part. So there probably is a little bit of -- a little more opportunity in the pricing area than there's been in the past, but it's not been a major driver for us. That's sort of interesting because with our organic growth rate, say, 14% on FSG in the fourth quarter, that was done really with volume. Very, very little of that was pricing. If you want to say 1% or 2% was pricing, the rest was volume. I mean, that really is -- I think it shows, to my dad's point, about the strength of our people. Because they're not doing it by just jacking up monopoly-leveraged positions.

Your next question comes from the line of Michael Ciarmoli with KeyBanc Capital Markets.

Eric, maybe just one question that I have. I think you guys mentioned in the prepared remarks regarding some of the new product developments, new parts, 300 to 500 and 300 to 400 DER repairs. Can you maybe elaborate what's sort of the target aircraft or target engines are? I mean, are you still -- are you starting to target some of the newer planes that are entering into service? I mean, I think it would be maybe premature for the 787. That still seems to be a ways out. But can you give us a sense of what exactly you guys are developing, both on the product and repair side?

Yes. Again, we're fairly sensitive about going into too much detail for competitive reasons. But needless to say, the products that we develop are the products that are used most often. So you can see there's obviously a lot of 737 and A320 because that's sort of obvious and whatever is typically flown. I mean, if you just look at the fleet that's out there, that's really what we go after. As far as talking about any particular OEM, we're reluctant to do that obviously for competitive reasons, but we're active in a lot of different areas. Again, most of our sales now -- over half of our sales come from non-engine and well over half of our new product development efforts are in the non-engine area. We continue to develop engine parts. But just for us, as a percentage of the total, it's less significant than it used to be. We used to be 100% engine and now we're less than 50% engine. And we see a lot of growth in that area as airlines have come to us to focus and really build out that product space. And I think there's a lot more non-engine products that we will be going after. In terms of getting into detail about where non-engine, we'd rather not do that because we don't want to get people concerned. Again, I think the press really helped us about 10, 15 years ago talking about the PMA phenomenon that it was going to create all these savings opportunities. But it also can unnecessarily scare certain competitors and OEMs into becoming fearful that their business model doesn't work. And that's absolutely not true. If you look at the percentage of PMAs, the percentage of the large commercial transport spares market, we're guessing it's roughly in the 2% area. So this is really tiny. And when the OEMs have got the ability to raise prices mid- to high single digits or some of them even more than that, whatever they may lose to us to add a couple of customers is not significant. So that's why we're reluctant in go into great detail by customer type or product type because we don't want people to get unnecessarily concerned. The OEMs still have outstanding business models and we just help our customer sort of in a small way.

Okay. And then just kind of maybe directionally or strategically thinking about the environment, are you guys hearing or seeing from your customers -- I would imagine if carriers decide to keep some of these older planes in service longer that might be a net positive for you. Are you hearing any chatter among the airlines that some may be thinking about employing more via the Delta-type strategy where they're actually willing to take those older planes, like the 717s, just to lower their capital cost? I mean, are you seeing any trends out there like that, that would keep those revenue tales going for even longer on some of those older, more mature airplanes?

It's sort of a mixed bag. I mean, you hear that in some places and then you hear in other places they're focusing on new equipment. I think, Delta, they're really exceptional operators and they know how to operate. They've got their maintenance costs under control. They run a very tight airline. And I think, frankly, it's amazing if you look at the job that Richard Anderson and his team have done over the last 5 years. They're very smart. They go after low capital cost equipment and they make it work. And -- but I think they have the DNA to be able to do that. Not every airline has got that DNA. So to answer your question, yes, I think some people are looking at Delta and trying to replicate that model. Others, of course, have full order books and are going to get a maintenance holiday as a result of the full order book. But they know that they're going to pay the price down the road and the price for spare parts for each successive generation of equipment is multiples over the prior generation. So it may stay on wing longer or maybe the equipment may or may not fly for as many years. But the price of the point -- the price point -- the price of the part is significantly higher. So I think it's a mixed bag. I wouldn't -- but I wouldn't conclude that equipment is really going to be staying out there longer. I mean, certainly, if you hear Boeing and Airbus, I mean, they want to sell a lot of new equipment and they're doing everything they possibly can. If interest rates go up, capital costs go up, that will become more difficult to do.

Your next question comes from the line of Ken Herbert with Canaccord.

Just the first question, if I could, for Victor. When you look at your organic 3% to 4% growth heading into fiscal '14, can you provide any granularity on how you're looking at specifically defense versus space versus maybe the medical and industrial markets?

Yes, so the answer is we're expecting internally that the domestic defense market and our defense sales would be affected by that. We're expecting budget cut. We would think the way it would filter through would be somewhere in the 5% to 10% range. Of course, we don't know with certainty, at this point, if our information is pretty much the same as everyone else's on that. But that's kind of what we think we're looking at. We expect growth in space -- in our space markets. We think we have opportunity there, in particular, on the commercial side. We expect to see growth in commercial aviation and some growth in our other markets. So that's kind of how it balances out and how we get to those numbers.

Okay. So defense -- I guess, international defense was a piece of your sales, the 25%, give or take, would go to ultimately to international customers. Is fair to say that you're thinking about is maybe flat to up slightly? I mean, probably doing better than the down 5% to 10% on domestic defense?

Yes, I think that's our thinking right there.

Okay, great. And Eric, just one question for you. On FSG, can you remind me what percentage of your business you might consider as part of a long-term agreement and maybe how that's been trending for you, specifically within the commercial aerospace side over the last year, maybe thinking around that heading into '14?

I would think, Ken, that is, I would say, consistent with past levels. A majority of our business is under long-term agreement. If we're going to be very price-friendly to customers, it's only fair to expect multiyear agreements that they're going to stick by us and we'll have that commitment. So I would say that there's really been no change to the business model there.

Your next question comes from Jim Foung with Gabelli & Company.

Yes, I just have 1 question, just about the PMA market. I was just wondering if you could just talk a little bit about the dynamics there? Eric, I think you mentioned it's like 2% of the industry. Has that been grown over time? Are you seeing more airlines accepting PMAs more? And so there's a slow migration of kind of growth from OE parts to PMA?

Yes, I think there's continued focus on cost reduction at the airlines. I think PMAs are gaining momentum. I mean, of course, you've got the offset of new customers, new parts. The offset to that is equipment that's retired and that's all figured into sort of this complex equation. The reason I think it's hung sort of around that, whatever the number is, SH&E [ph] is at 2% or 3% or whatever, it's sort of hard to get your hands around the exact number. But the reason it's sort of staying at that level is, of course, the OEM -- my dad always has spoken about the theory of the expanding universe. The OEM prices continue to go up by just, say, 5%, 6%, 7% per year. And that frankly dwarfs the PMA percentage of the total market. So I think that it will continue to hang around in this area or go up a bit. Remember also that the OEMs don't give up business. We have to fight for every piece of business that we have. There are not -- the days 20 years ago where they really didn't care if they lost it, I mean, those have been gone for well over 10 years. They fight for every piece of business. And the greater challenge for us is getting the airlines to go and approve the use of these parts and making sure that they continue to grow their engineering steps and continue to approve more parts for use. It's not -- there's really not for us a funnel at the FAA. We've got a very good relationship and a lot of credibility with the FAA built over decades, so we're able to get PMAs there. But in terms of as a percentage of the market, I see it growing, but not growing, in any one year, a huge amount. I mean, this is not a threat to any OEM's business model.

But how long does it take from the time you start talking to an airline about PMA parts to the time they get convinced to buy from you?

Well, if they don't -- if they're not doing much maintenance because they have all new equipment, they have to feel the pain of the cost of maintaining this equipment. So they have to be operating the equipment for a number of years for that to happen and then we're in there. We're talking to them. And typically, it takes roughly a year from the time we identify a part until we have it. Sometimes, it can be as short as 3 months or sometimes it could be even longer, depending if it's very complex. But if you want to assume until we really have sufficient parts on the shelf, it's roughly 1 year and then we build the market share over the next 2 years, 3 years or so. And that's when we start harvesting the sales from a particular part.

So I was just wondering if the growth that you're see -- the organic growth that you're seeing in the aftermarket is from more of that relationship building you've done over the previous years and that's what's driving that momentum for you quarter-by-quarter?

Right, yes, and I agree with you. I think we have very strong relationships with the airlines that we've invested in. And again, it's not developed in any 1, 2, 3 or 5 years. These are very, very long-term relationships. And I think, yes, that's one of the reasons why we have the growth rate that we've got because we're able to introduce products much more quickly than others and they approve them more easily than other companies.

[Operator Instructions] At this time, there are no questions in queue.

Thank you. Again, I want to wish everybody out there on this call a very happy, healthy new year, wonderful holidays. And we look forward to either seeing you at one of the conferences that are coming up in 2014, or we'll be speaking with you at the end of the first quarter of fiscal 2014. So that is the end of the conference call, and we are now done. Thank you, all.

This concludes today's conference call. You may now disconnect.