Related to that, there are a number of competitions that Trax is in right now with other very large carriers where I don’t believe that they would be considered in the way that they are today if it weren’t for the backing of AAR. So our first priority was to open doors for Trax and in the first year since owning it, that’s absolutely proving out. The second priority was to ultimately leverage the Trax platform as a sales channel for AAR parts. That is something that is absolutely still a focus of ours. We’ve been focused more on the former and probably spending a little bit more time on the former than we might have anticipated in the first year. But the opportunity to ultimately sell Trax — sell parts through the Trax network is still very much an element of the strategy that we intend to pursue.
Louie DiPalma: Great. That’s it for me. Thanks, everyone.
John Holmes: Great. Thanks, Louie.
Operator: Thank you. One moment for our next question. And we do have a follow-up question from Robert Spingarn with Melius Research. Your line is open.
Robert Spingarn: Thank you. I actually — I have one for each of you and they both touch on things you already talked about. Sean, just we’ll start with you just quickly. You mentioned delivering the balance sheet and I just wondered if you could give us some color on the pace of that process as we go here and maybe how sale of Expeditionary Services would factor in and what the timing on that might be. Is that something that might be sooner rather than later?
Sean Gillen: Yeah. Maybe first, we have a target net leverage of 1 times to 2 times, obviously, on the back of this acquisition at 3.6 times pro forma. So the focus is to get back down to the high end of that range. So 2 times and I think that’d be 18 months to 24 months would be the timeline we’d be looking at for there. And I’d say that’s just an organic, no divestiture associated with that. That’d just be EBITDA growth and cash flow generation across the combined business. Obviously, any divestiture would get you there a bit quicker.
Robert Spingarn: Okay. Is that — all you want to say on divesting? I mean, is there any other color we can put around that?
John Holmes: I would just say that, obviously, deleveraging is a focus of ours and we have highlighted that Expeditionary Services is not core to the future going forward. However, where the balance sheet was a quarter ago, it wouldn’t necessarily have made sense to pursue that in earnest. Obviously, our balance sheet looks a little bit differently. So we’re paying a lot more attention to a potential process there.
Robert Spingarn: Okay. Okay. That’s good. And then, so John, we just talked about Triumph and some of what it brings to the table. I wanted to go back to something you said last quarter about their position in PMA relative to yours could accelerate…
John Holmes: Yeah.
Robert Spingarn: … your push a little bit. I know it’s early. I imagine this is not going to happen that quickly. But I wondered where you are in the process. Are you starting to aggregate a list of parts to PMA that might not run afoul of any parts distribution agreements you have…?
John Holmes: Yeah.
Robert Spingarn: … in the other parts of your business, like with the OEM parts suppliers? And first, is there a cost associated with putting this together? And then the last part of this somewhat lengthy question on PMA is, is the gridlock at FAA on the airplane programs impacting the PMA approval process from what you can see?
John Holmes: Yeah. Great set of questions and I’m actually very happy you asked about PMA because that is a focus of ours and an early focus of ours. So just a couple of thoughts. First of all, for AAR’s own internal PMA effort, it continues to move along well. We have several parts right now out for approval that’s related to the last part of your question. At this point, based on the office that we deal with, we have not seen any sort of slowness, so things are moving along. Again, inside of AAR, that’s a very small effort, but we’re excited about the potential there. As it relates to Triumph, I would say that on the balance, we’re more excited about the potential for PMA than we were even before we closed. They’ve got a nice portfolio, again, a small portfolio, but generating healthy revenue and healthy margin of PMAs that is not in any way in conflict with any of our distribution agreements.
So largely interior parts, so a totally different part of the aircraft than where we plan distribution. So that’s encouraging. The other thing that’s encouraging there is, they really are not engaged in any meaningful marketing activities for this PMA portfolio. So, the sales that they have, which again are impressive given the small number of parts that they have PMAs on, we think that we can just by putting their PMAs through our distribution channels to market, just grow their existing portfolio PMAs. Third thing I mentioned is that, they’ve got an engineering process and PMA design and approval set of procedures that is further advanced than what we have. We have a lot more data than they have in as much as we’re working on 1,000 aircraft a year in our hangars and we are able to collect data in terms of what parts might make good PMA candidates because of the volume of aircraft that we see.
So if you combine our access to data plus their, I would say, more advanced engineering and approval procedures, that’s a good combination. So again, a long answer to, I guess, a long set of questions, but we’re very encouraged by the PMA growth. Having said all of that, these are relatively small revenue dollars today inside the overall AAR portfolio, but as you know, it comes with high margin and now that we’re together, likely high growth.
Robert Spingarn: Great. Thank you. That was super helpful.
John Holmes: Great. Thanks, Rob.
Operator: Thank you. I’m showing no further questions at this time. I would now like to turn the call back over to management for any closing remarks.
John Holmes: Well, listen, we really appreciate the time and the interest and the very thoughtful questions everybody and we look forward to being back here with you next quarter. Thank you.
Operator: This concludes today’s program. Thank you for all — thank you all for participating. You may now disconnect.
