Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries HEICO Corporation Reports Record Net Sales (Up 39%), Operating Income (Up 33%) and Net Income (Up 17%) for the Second Quarter of Fiscal 2024 By: ACCESSWIRE May 28, 2024 at 12:15 PM EDT HOLLYWOOD, FL and MIAMI, FL / ACCESSWIRE / May 28, 2024 / HEICO CORPORATION (NYSE:HEI.A)(NYSE:HEI) today reported an increase in net income of 17% to a record $123.1 million, or $.88 per diluted share, in the second quarter of fiscal 2024, up from $105.1 million, or $.76 per diluted share, in the second quarter of fiscal 2023. Net income increased 20% to a record $237.8 million, or $1.70 per diluted share, in the first six months of fiscal 2024, up from $198.1 million, or $1.43 per diluted share, in the first six months of fiscal 2023. Net sales increased 39% to a record $955.4 million in the second quarter of fiscal 2024, up from $687.8 million in the second quarter of fiscal 2023. Operating income increased 33% to a record $209.2 million in the second quarter of fiscal 2024, up from $157.1 million in the second quarter of fiscal 2023. The Company's consolidated operating margin was 21.9% in the second quarter of fiscal 2024, as compared to 22.8% in the second quarter of fiscal 2023. Net sales increased 41% to a record $1,851.8 million in the first six months of fiscal 2024, up from $1,308.8 million in the first six months of fiscal 2023. Operating income increased 36% to a record $389.4 million in the first six months of fiscal 2024, up from $286.5 million in the first six months of fiscal 2023. The Company's consolidated operating margin was 21.0% in the first six months of fiscal 2024, as compared to 21.9% in the first six months of fiscal 2023. Our commercial aerospace sales growth has resulted in fifteen consecutive quarters of sequential growth in net sales at the Flight Support Group. EBITDA increased 35% to $252.4 million in the second quarter of fiscal 2024, up from $187.2 million in the second quarter of fiscal 2023. EBITDA increased 38% to $476.8 million in the first six months of fiscal 2024, up from $344.3 million in the first six months of fiscal 2023. See our reconciliation of net income attributable to HEICO to EBITDA at the end of this press release. Consolidated Results Laurans A. Mendelson, HEICO's Chairman and CEO, commented on the Company's second quarter results stating, "We are very pleased to report strong record quarterly consolidated net sales driven by record quarterly operating results at the Flight Support Group and improved results at the Electronic Technologies Group, as well as strong contributions from our fiscal 2023 acquisitions. These results reflect 12% organic growth in the Flight Support Group's net sales principally arising from increased demand for its commercial aerospace products and services and 4% organic growth in the Electronic Technologies Group reflecting increased net sales of its defense and aerospace products. Our total debt to net income attributable to HEICO ratio was 5.39x as of April 30, 2024, down from 6.14x as of October 31, 2023. Our net debt to EBITDA ratio was 2.45x as of April 30, 2024, down from 3.04x as of October 31, 2023. See our reconciliation of total debt to net debt at the end of this press release. Cash flow provided by operating activities increased 82% to $141.1 million in the second quarter of fiscal 2024, up from $77.8 million in the second quarter of fiscal 2023. We continue to forecast strong cash flow from operations for fiscal 2024. As we look ahead to the remainder of fiscal 2024, we continue to anticipate net sales growth in both the Flight Support Group and the Electronic Technologies Group, principally driven by contributions from our fiscal 2023 acquisitions and demand for the majority of our products. Additionally, we plan to continue our commitment to developing new products and services and further market penetration, while maintaining our financial strength and flexibility." Flight Support Group Eric A. Mendelson, HEICO's Co-President and President of HEICO's Flight Support Group, commented on the Flight Support Group's record setting second quarter results stating, "Continuing our growth trend, we achieved quarterly increases of 65% and 49% in net sales and operating income, respectively, as compared to the second quarter of fiscal 2023. These results principally reflect robust 12% quarterly organic net sales growth, mainly from 21% organic growth in our aftermarket replacement parts as well as contributions from our fiscal 2023 and 2024 acquisitions. The Flight Support Group has now achieved fifteen consecutive quarters of growth in net sales. The Flight Support Group's net sales increased 65% to a record $647.2 million in the second quarter of fiscal 2024, up from $392.2 million in the second quarter of fiscal 2023. The Flight Support Group's net sales increased 66% to a record $1,265.9 million in the first six months of fiscal 2024, up from $763.5 million in the first six months of fiscal 2023. The Flight Support Group's net sales increase in the second quarter and first six months of fiscal 2024 reflects the impact from our fiscal 2023 and 2024 acquisitions and strong organic growth of 12%. The organic net sales growth mainly reflects increased demand within our aftermarket replacement parts and repair and overhaul parts and services product lines. The Flight Support Group's operating income increased 49% to a record $148.9 million in the second quarter of fiscal 2024, up from $99.9 million in the second quarter of fiscal 2023. The Flight Support Group's operating income increased 55% to a record $285.0 million in the first six months of fiscal 2024, up from $183.5 million in the first six months of fiscal 2023. The Flight Support Group's operating income increase in the second quarter and first six months of fiscal 2024 principally reflects the previously mentioned net sales growth, partially offset by an increase in intangible asset amortization expense, the prior year impact from the amendment and termination of a contingent consideration agreement, and higher inventory obsolescence expense. The Flight Support Group's operating margin was 23.0% in the second quarter of fiscal 2024, as compared to 25.5% in the second quarter of fiscal 2023. The Flight Support Group's operating margin was 22.5% in the first six months of fiscal 2024, as compared to 24.0% in the first six months of fiscal 2023. The Flight Support Group's operating margin decrease in the second quarter and first six months of fiscal 2024 principally reflects the prior year impact from the previously mentioned amendment and termination of a contingent consideration agreement, and higher intangible asset amortization expense, partially offset by lower performance-based compensation expense as a percentage of net sales." Electronic Technologies Group Victor H. Mendelson, HEICO's Co-President and President of HEICO's Electronic Technologies Group, commented on the Electronic Technologies Group's second quarter results stating, "Improved demand resulted in double-digit organic net sales growth of our defense and aerospace products, which contributed to our improved quarterly results. The Electronic Technologies Group's net sales increased 6% to $319.3 million in the second quarter of fiscal 2024, up from $301.8 million in the second quarter of fiscal 2023. The net sales increase is attributable to 4% organic growth mainly reflecting increased defense and aerospace products net sales, partially offset by lower other electronics products net sales. The Electronic Technologies Group's net sales increased 9% to $605.3 million in the first six months of fiscal 2024, up from $556.8 million in the first six months of fiscal 2023. The net sales increase is mainly attributable to the impact from our fiscal 2023 acquisition and increased organic net sales of our defense and aerospace products, partially offset by lower organic net sales of our other electronics products. The Electronic Technologies Group's operating income increased 11% to $75.3 million in the second quarter of fiscal 2024, up from $68.0 million in the second quarter of fiscal 2023. The operating income increase principally reflects an improved gross profit margin and the previously mentioned net sales growth. The improved gross profit margin principally reflects increased defense products net sales, partially offset by decreased other electronics products net sales. The Electronic Technologies Group's operating income increased 5% to $130.6 million in the first six months of fiscal 2024, up from $124.5 million in the first six months of fiscal 2023. The operating income increase principally reflects the previously mentioned net sales growth, lower acquisition costs and an improved gross profit margin, partially offset by lower selling, general and administrative ("SG&A") efficiencies. The improved gross profit margin principally reflects increased defense products net sales, partially offset by decreased other electronics products net sales. The Electronic Technologies Group's operating margin improved to 23.6% in the second quarter of fiscal 2024, up from 22.5% in the second quarter of fiscal 2023. The operating margin increase principally reflects the previously mentioned improved gross profit margin and net sales growth, partially offset by lower SG&A efficiencies. The Electronic Technologies Group's operating margin was 21.6% in the first six months of fiscal 2024, as compared to 22.4% in the first six months of fiscal 2023. The lower operating margin principally reflects increased SG&A expenses as a percentage of net sales, which supports our forecasted strong net sales and earnings growth for the remainder of fiscal 2024, partially offset by the previously mentioned improved gross profit margin. The increased SG&A expenses principally reflect lower efficiencies, partially offset by the previously mentioned lower acquisition costs." Non-GAAP Financial Measures To provide additional information about the Company's results, HEICO has discussed in this press release its EBITDA (calculated as net income attributable to HEICO adjusted for depreciation and amortization expense, net income attributable to noncontrolling interests, interest expense and income tax expense), its net debt (calculated as total debt less cash and cash equivalents), and its net debt to EBITDA ratio (calculated as net debt divided by EBITDA), which are not prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These non-GAAP measures are included to supplement the Company's financial information presented in accordance with GAAP and because the Company uses such measures to monitor and evaluate the performance of its business and believes the presentation of these measures enhance an investor's ability to analyze trends in the Company's business and to evaluate the Company's performance relative to other companies in its industry. However, these non-GAAP measures have limitations and should not be considered in isolation or as a substitute for analysis of the Company's financial results as reported under GAAP. These non-GAAP measures are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. These measures should only be used to evaluate the Company's results of operations in conjunction with their corresponding GAAP measures. Pursuant to the requirements of Regulation G of the Securities and Exchange Act of 1934, the Company has provided a reconciliation of these non-GAAP measures in the last table included in this press release. (NOTE: HEICO has two classes of common stock traded on the NYSE. Both classes, the Class A Common Stock (HEI.A) and the Common Stock (HEI), are virtually identical in all economic respects. The only difference between the share classes is the voting rights. The Class A Common Stock (HEI.A) carries 1/10 vote per share and the Common Stock (HEI) carries one vote per share.) There are currently approximately 83.7 million shares of HEICO's Class A Common Stock (HEI.A) outstanding and 54.8 million shares of HEICO's Common Stock (HEI) outstanding. The stock symbols for HEICO's two classes of common stock on most websites are HEI.A and HEI. However, some websites change HEICO's Class A Common Stock trading symbol (HEI.A) to HEI/A or HEIa. As previously announced, HEICO will hold a conference call on Wednesday, May 29, 2024 at 9:00 a.m. Eastern Daylight Time to discuss its second quarter results. Individuals wishing to participate in the conference call should dial: US and Canada (888) 256-1007, International (929) 477-0448, wait for the conference operator and provide the operator with the Conference ID 1602283. A digital replay will be available two hours after the completion of the conference for 14 days. To access the replay, please visit our website at www.heico.com under the Investors section for details. HEICO Corporation is engaged primarily in the design, production, servicing and distribution of products and services to certain niche segments of the aviation, defense, space, medical, telecommunications and electronics industries through its Hollywood, Florida-based Flight Support Group and its Miami, Florida-based Electronic Technologies Group. HEICO's customers include a majority of the world's airlines and overhaul shops, as well as numerous defense and space contractors and military agencies worldwide, in addition to medical, telecommunications and electronics equipment manufacturers. For more information about HEICO, please visit our website at www.heico.com. Certain statements in this press release constitute forward-looking statements, which are subject to risks, uncertainties and contingencies. HEICO's actual results may differ materially from those expressed in or implied by those forward-looking statements. Factors that could cause such differences include, among others: the severity, magnitude and duration of public health threats, such as the COVID-19 pandemic; our liquidity and the amount and timing of cash generation; lower commercial air travel, airline fleet changes or airline purchasing decisions, 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; our ability to introduce new products and services at profitable pricing levels, which could reduce our sales or sales growth; product development or manufacturing difficulties, which could increase our product development and manufacturing costs and delay sales; cyber security events or other disruptions of our information technology systems could adversely affect our business; and our ability to make acquisitions, including obtaining any applicable domestic and/or foreign governmental approvals, and achieve operating synergies from acquired businesses; customer credit risk; interest, foreign currency exchange and income tax rates; and economic conditions, including the effects of inflation, within and outside of the aviation, defense, space, medical, telecommunications and electronics industries, which could negatively impact our costs and revenues. Parties receiving this material are encouraged to review all of HEICO's filings with the Securities and Exchange Commission, including, but not limited to filings on Form 10-K, Form 10-Q and Form 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, except to the extent required by applicable law. HEICO CORPORATION Condensed Consolidated Statements of Operations(Unaudited)(in thousands, except per share data) Three Months Ended April 30, 2024 2023 Net sales $ 955,395 $ 687,841 Cost of sales 583,600 421,329 Selling, general and administrative expenses 162,642 109,422 Operating income 209,153 157,090 Interest expense (38,512 ) (11,373 ) Other income 460 343 Income before income taxes and noncontrolling interests 171,101 146,060 Income tax expense 36,200 31,000 Net income from consolidated operations 134,901 115,060 Less: Net income attributable to noncontrolling interests 11,755 9,940 Net income attributable to HEICO $ 123,146 $ 105,120 Net income per share attributable to HEICO shareholders: Basic $ .89 $ .77 Diluted $ .88 $ .76 Weighted average number of common shares outstanding: Basic 138,386 136,916 Diluted 140,059 138,600 Three Months Ended April 30, 2024 2023 Operating segment information: Net sales: Flight Support Group $ 647,232 $ 392,202 Electronic Technologies Group 319,322 301,759 Intersegment sales (11,159 ) (6,120 ) $ 955,395 $ 687,841 Operating income: Flight Support Group $ 148,876 $ 99,912 Electronic Technologies Group 75,263 67,979 Other, primarily corporate (14,986 ) (10,801 ) $ 209,153 $ 157,090 HEICO CORPORATION Condensed Consolidated Statements of Operations (Unaudited)(in thousands, except per share data) Six Months Ended April 30, 2024 2023 Net sales $ 1,851,758 $ 1,308,756 Cost of sales 1,133,194 798,445 Selling, general and administrative expenses 329,201 223,787 Operating income 389,363 286,524 Interest expense (77,119 ) (17,441 ) Other income 1,139 982 Income before income taxes and noncontrolling interests 313,383 270,065 Income tax expense 53,000 (a) 52,000 (b) Net income from consolidated operations 260,383 218,065 Less: Net income attributable to noncontrolling interests 22,539 19,918 Net income attributable to HEICO $ 237,844 (a) $ 198,147 (b) Net income per share attributable to HEICO shareholders: Basic $ 1.72 (a) $ 1.45 (b) Diluted $ 1.70 (a) $ 1.43 (b) Weighted average number of common shares outstanding: Basic 138,325 136,786 Diluted 139,976 138,590 Six Months Ended April 30, 2024 2023 Operating segment information: Net sales: Flight Support Group $ 1,265,948 $ 763,480 Electronic Technologies Group 605,264 556,818 Intersegment sales (19,454 ) (11,542 ) $ 1,851,758 $ 1,308,756 Operating income: Flight Support Group $ 284,967 $ 183,521 Electronic Technologies Group 130,591 124,516 Other, primarily corporate (26,195 ) (21,513 ) $ 389,363 $ 286,524 HEICO CORPORATION Footnotes to Condensed Consolidated Statements of Operations (Unaudited) (a) During the first quarter of fiscal 2024, the Company recognized a $13.6 million discrete tax benefit from stock option exercises, which, net of noncontrolling interests, increased net income attributable to HEICO by $13.3 million, or $.10 per basic and diluted share. (b) During the first quarter of fiscal 2023, the Company recognized a $6.2 million discrete tax benefit from stock option exercises, which, net of noncontrolling interests, increased net income attributable to HEICO by $6.1 million, or $.04 per basic and diluted share. HEICO CORPORATION Condensed Consolidated Balance Sheets(Unaudited)(in thousands) April 30, 2024 October 31, 2023 Cash and cash equivalents $ 204,161 $ 171,048 Accounts receivable, net 504,362 509,075 Contract assets 110,158 111,702 Inventories, net 1,088,101 1,013,680 Prepaid expenses and other current assets 61,919 49,837 Total current assets 1,968,701 1,855,342 Property, plant and equipment, net 326,740 321,848 Goodwill 3,285,468 3,274,327 Intangible assets, net 1,333,337 1,357,281 Other assets 451,599 386,265 Total assets $ 7,365,845 $ 7,195,063 Short-term and current maturities of long-term debt $ 4,382 $ 17,801 Other current liabilities 554,781 647,541 Total current liabilities 559,163 665,342 Long-term debt, net of current maturities 2,385,267 2,460,277 Deferred income taxes 119,987 131,846 Other long-term liabilities 490,253 379,640 Total liabilities 3,554,670 3,637,105 Redeemable noncontrolling interests 368,369 364,807 Shareholders' equity 3,442,806 3,193,151 Total liabilities and equity $ 7,365,845 $ 7,195,063 HEICO CORPORATION Condensed Consolidated Statements of Cash Flows(Unaudited)(in thousands) Six Months Ended April 30, 2024 2023 Operating Activities: Net income from consolidated operations $ 260,383 $ 218,065 Depreciation and amortization 86,336 56,784 Share-based compensation expense 9,463 6,055 Employer contributions to HEICO Savings and Investment Plan 8,802 6,533 Deferred income tax benefit (11,532 ) (9,596 ) Amendment and termination of contingent consideration agreement - (9,057 ) Payment of contingent consideration (6,203 ) (6,299 ) (Decrease) increase in accrued contingent consideration, net (5,326 ) 1,842 Decrease (increase) in accounts receivable 5,309 (21,222 ) Decrease (increase) in contract assets 3,172 (9,267 ) Increase in inventories (71,103 ) (75,251 ) Decrease in current liabilities, net (76,338 ) (9,698 ) Other 49,829 5,547 Net cash provided by operating activities 252,792 154,436 Investing Activities: Acquisitions, net of cash acquired (46,208 ) (524,231 ) Capital expenditures (26,325 ) (21,921 ) Investments related to HEICO Leadership Compensation Plan (14,410 ) (14,000 ) Other 1,657 362 Net cash used in investing activities (85,286 ) (559,790 ) Financing Activities: (Payments) borrowings on revolving credit facility, net (75,000 ) 448,000 Distributions to noncontrolling interests (15,372 ) (22,650 ) (Payments) borrowings on short-term debt, net (13,924 ) 1,672 Cash dividends paid (13,831 ) (13,668 ) Payment of contingent consideration (13,797 ) (12,610 ) Acquisitions of noncontrolling interests (3,165 ) (2,733 ) Redemptions of common stock related to stock option exercises (2,352 ) (14,811 ) Proceeds from stock option exercises 4,151 4,074 Other (1,905 ) 1,491 Net cash (used in) provided by financing activities (135,195 ) 388,765 Effect of exchange rate changes on cash 802 4,246 Net increase (decrease) in cash and cash equivalents 33,113 (12,343 ) Cash and cash equivalents at beginning of year 171,048 139,504 Cash and cash equivalents at end of period $ 204,161 $ 127,161 HEICO CORPORATION Non-GAAP Financial Measures(Unaudited)(in thousands, except ratios) Six Months Ended April 30, EBITDA Calculation 2024 2023 Net income attributable to HEICO $ 237,844 $ 198,147 Plus: Depreciation and amortization 86,336 56,784 Plus: Net income attributable to noncontrolling interests 22,539 19,918 Plus: Interest expense 77,119 17,441 Plus: Income tax expense 53,000 52,000 EBITDA (a) $ 476,838 $ 344,290 Three Months Ended April 30, EBITDA Calculation 2024 2023 Net income attributable to HEICO $ 123,146 $ 105,120 Plus: Depreciation and amortization 42,831 29,724 Plus: Net income attributable to noncontrolling interests 11,755 9,940 Plus: Interest expense 38,512 11,373 Plus: Income tax expense 36,200 31,000 EBITDA (a) $ 252,444 $ 187,157 Trailing Twelve Months Ended EBITDA Calculation April 30, 2024 October 31, 2023 Net income attributable to HEICO $ 443,293 $ 403,596 Plus: Depreciation and amortization 159,595 130,043 Plus: Net income attributable to noncontrolling interests 43,408 40,787 Plus: Interest expense 132,662 72,984 Plus: Income tax expense 111,900 110,900 EBITDA (a) $ 890,858 $ 758,310 Net Debt Calculation April 30, 2024 October 31, 2023 Total debt $ 2,389,649 $ 2,478,078 Less: Cash and cash equivalents (204,161 ) (171,048 ) Net debt (a) $ 2,185,488 $ 2,307,030 Total debt $ 2,389,649 $ 2,478,078 Net income attributable to HEICO (trailing twelve months) $ 443,293 $ 403,596 Total debt to net income attributable to HEICO ratio 5.39 6.14 Net debt $ 2,185,488 $ 2,307,030 EBITDA (trailing twelve months) $ 890,858 $ 758,310 Net debt to EBITDA ratio (a) 2.45 3.04 (a) See the "Non-GAAP Financial Measures" section of this press release. Victor H. Mendelson (305) 374-1745 ext. 7590Carlos L. Macau, Jr. (954) 987-4000 ext. 7570 SOURCE: HEICO Corporation View the original press release on accesswire.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
HEICO Corporation Reports Record Net Sales (Up 39%), Operating Income (Up 33%) and Net Income (Up 17%) for the Second Quarter of Fiscal 2024 By: ACCESSWIRE May 28, 2024 at 12:15 PM EDT HOLLYWOOD, FL and MIAMI, FL / ACCESSWIRE / May 28, 2024 / HEICO CORPORATION (NYSE:HEI.A)(NYSE:HEI) today reported an increase in net income of 17% to a record $123.1 million, or $.88 per diluted share, in the second quarter of fiscal 2024, up from $105.1 million, or $.76 per diluted share, in the second quarter of fiscal 2023. Net income increased 20% to a record $237.8 million, or $1.70 per diluted share, in the first six months of fiscal 2024, up from $198.1 million, or $1.43 per diluted share, in the first six months of fiscal 2023. Net sales increased 39% to a record $955.4 million in the second quarter of fiscal 2024, up from $687.8 million in the second quarter of fiscal 2023. Operating income increased 33% to a record $209.2 million in the second quarter of fiscal 2024, up from $157.1 million in the second quarter of fiscal 2023. The Company's consolidated operating margin was 21.9% in the second quarter of fiscal 2024, as compared to 22.8% in the second quarter of fiscal 2023. Net sales increased 41% to a record $1,851.8 million in the first six months of fiscal 2024, up from $1,308.8 million in the first six months of fiscal 2023. Operating income increased 36% to a record $389.4 million in the first six months of fiscal 2024, up from $286.5 million in the first six months of fiscal 2023. The Company's consolidated operating margin was 21.0% in the first six months of fiscal 2024, as compared to 21.9% in the first six months of fiscal 2023. Our commercial aerospace sales growth has resulted in fifteen consecutive quarters of sequential growth in net sales at the Flight Support Group. EBITDA increased 35% to $252.4 million in the second quarter of fiscal 2024, up from $187.2 million in the second quarter of fiscal 2023. EBITDA increased 38% to $476.8 million in the first six months of fiscal 2024, up from $344.3 million in the first six months of fiscal 2023. See our reconciliation of net income attributable to HEICO to EBITDA at the end of this press release. Consolidated Results Laurans A. Mendelson, HEICO's Chairman and CEO, commented on the Company's second quarter results stating, "We are very pleased to report strong record quarterly consolidated net sales driven by record quarterly operating results at the Flight Support Group and improved results at the Electronic Technologies Group, as well as strong contributions from our fiscal 2023 acquisitions. These results reflect 12% organic growth in the Flight Support Group's net sales principally arising from increased demand for its commercial aerospace products and services and 4% organic growth in the Electronic Technologies Group reflecting increased net sales of its defense and aerospace products. Our total debt to net income attributable to HEICO ratio was 5.39x as of April 30, 2024, down from 6.14x as of October 31, 2023. Our net debt to EBITDA ratio was 2.45x as of April 30, 2024, down from 3.04x as of October 31, 2023. See our reconciliation of total debt to net debt at the end of this press release. Cash flow provided by operating activities increased 82% to $141.1 million in the second quarter of fiscal 2024, up from $77.8 million in the second quarter of fiscal 2023. We continue to forecast strong cash flow from operations for fiscal 2024. As we look ahead to the remainder of fiscal 2024, we continue to anticipate net sales growth in both the Flight Support Group and the Electronic Technologies Group, principally driven by contributions from our fiscal 2023 acquisitions and demand for the majority of our products. Additionally, we plan to continue our commitment to developing new products and services and further market penetration, while maintaining our financial strength and flexibility." Flight Support Group Eric A. Mendelson, HEICO's Co-President and President of HEICO's Flight Support Group, commented on the Flight Support Group's record setting second quarter results stating, "Continuing our growth trend, we achieved quarterly increases of 65% and 49% in net sales and operating income, respectively, as compared to the second quarter of fiscal 2023. These results principally reflect robust 12% quarterly organic net sales growth, mainly from 21% organic growth in our aftermarket replacement parts as well as contributions from our fiscal 2023 and 2024 acquisitions. The Flight Support Group has now achieved fifteen consecutive quarters of growth in net sales. The Flight Support Group's net sales increased 65% to a record $647.2 million in the second quarter of fiscal 2024, up from $392.2 million in the second quarter of fiscal 2023. The Flight Support Group's net sales increased 66% to a record $1,265.9 million in the first six months of fiscal 2024, up from $763.5 million in the first six months of fiscal 2023. The Flight Support Group's net sales increase in the second quarter and first six months of fiscal 2024 reflects the impact from our fiscal 2023 and 2024 acquisitions and strong organic growth of 12%. The organic net sales growth mainly reflects increased demand within our aftermarket replacement parts and repair and overhaul parts and services product lines. The Flight Support Group's operating income increased 49% to a record $148.9 million in the second quarter of fiscal 2024, up from $99.9 million in the second quarter of fiscal 2023. The Flight Support Group's operating income increased 55% to a record $285.0 million in the first six months of fiscal 2024, up from $183.5 million in the first six months of fiscal 2023. The Flight Support Group's operating income increase in the second quarter and first six months of fiscal 2024 principally reflects the previously mentioned net sales growth, partially offset by an increase in intangible asset amortization expense, the prior year impact from the amendment and termination of a contingent consideration agreement, and higher inventory obsolescence expense. The Flight Support Group's operating margin was 23.0% in the second quarter of fiscal 2024, as compared to 25.5% in the second quarter of fiscal 2023. The Flight Support Group's operating margin was 22.5% in the first six months of fiscal 2024, as compared to 24.0% in the first six months of fiscal 2023. The Flight Support Group's operating margin decrease in the second quarter and first six months of fiscal 2024 principally reflects the prior year impact from the previously mentioned amendment and termination of a contingent consideration agreement, and higher intangible asset amortization expense, partially offset by lower performance-based compensation expense as a percentage of net sales." Electronic Technologies Group Victor H. Mendelson, HEICO's Co-President and President of HEICO's Electronic Technologies Group, commented on the Electronic Technologies Group's second quarter results stating, "Improved demand resulted in double-digit organic net sales growth of our defense and aerospace products, which contributed to our improved quarterly results. The Electronic Technologies Group's net sales increased 6% to $319.3 million in the second quarter of fiscal 2024, up from $301.8 million in the second quarter of fiscal 2023. The net sales increase is attributable to 4% organic growth mainly reflecting increased defense and aerospace products net sales, partially offset by lower other electronics products net sales. The Electronic Technologies Group's net sales increased 9% to $605.3 million in the first six months of fiscal 2024, up from $556.8 million in the first six months of fiscal 2023. The net sales increase is mainly attributable to the impact from our fiscal 2023 acquisition and increased organic net sales of our defense and aerospace products, partially offset by lower organic net sales of our other electronics products. The Electronic Technologies Group's operating income increased 11% to $75.3 million in the second quarter of fiscal 2024, up from $68.0 million in the second quarter of fiscal 2023. The operating income increase principally reflects an improved gross profit margin and the previously mentioned net sales growth. The improved gross profit margin principally reflects increased defense products net sales, partially offset by decreased other electronics products net sales. The Electronic Technologies Group's operating income increased 5% to $130.6 million in the first six months of fiscal 2024, up from $124.5 million in the first six months of fiscal 2023. The operating income increase principally reflects the previously mentioned net sales growth, lower acquisition costs and an improved gross profit margin, partially offset by lower selling, general and administrative ("SG&A") efficiencies. The improved gross profit margin principally reflects increased defense products net sales, partially offset by decreased other electronics products net sales. The Electronic Technologies Group's operating margin improved to 23.6% in the second quarter of fiscal 2024, up from 22.5% in the second quarter of fiscal 2023. The operating margin increase principally reflects the previously mentioned improved gross profit margin and net sales growth, partially offset by lower SG&A efficiencies. The Electronic Technologies Group's operating margin was 21.6% in the first six months of fiscal 2024, as compared to 22.4% in the first six months of fiscal 2023. The lower operating margin principally reflects increased SG&A expenses as a percentage of net sales, which supports our forecasted strong net sales and earnings growth for the remainder of fiscal 2024, partially offset by the previously mentioned improved gross profit margin. The increased SG&A expenses principally reflect lower efficiencies, partially offset by the previously mentioned lower acquisition costs." Non-GAAP Financial Measures To provide additional information about the Company's results, HEICO has discussed in this press release its EBITDA (calculated as net income attributable to HEICO adjusted for depreciation and amortization expense, net income attributable to noncontrolling interests, interest expense and income tax expense), its net debt (calculated as total debt less cash and cash equivalents), and its net debt to EBITDA ratio (calculated as net debt divided by EBITDA), which are not prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These non-GAAP measures are included to supplement the Company's financial information presented in accordance with GAAP and because the Company uses such measures to monitor and evaluate the performance of its business and believes the presentation of these measures enhance an investor's ability to analyze trends in the Company's business and to evaluate the Company's performance relative to other companies in its industry. However, these non-GAAP measures have limitations and should not be considered in isolation or as a substitute for analysis of the Company's financial results as reported under GAAP. These non-GAAP measures are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. These measures should only be used to evaluate the Company's results of operations in conjunction with their corresponding GAAP measures. Pursuant to the requirements of Regulation G of the Securities and Exchange Act of 1934, the Company has provided a reconciliation of these non-GAAP measures in the last table included in this press release. (NOTE: HEICO has two classes of common stock traded on the NYSE. Both classes, the Class A Common Stock (HEI.A) and the Common Stock (HEI), are virtually identical in all economic respects. The only difference between the share classes is the voting rights. The Class A Common Stock (HEI.A) carries 1/10 vote per share and the Common Stock (HEI) carries one vote per share.) There are currently approximately 83.7 million shares of HEICO's Class A Common Stock (HEI.A) outstanding and 54.8 million shares of HEICO's Common Stock (HEI) outstanding. The stock symbols for HEICO's two classes of common stock on most websites are HEI.A and HEI. However, some websites change HEICO's Class A Common Stock trading symbol (HEI.A) to HEI/A or HEIa. As previously announced, HEICO will hold a conference call on Wednesday, May 29, 2024 at 9:00 a.m. Eastern Daylight Time to discuss its second quarter results. Individuals wishing to participate in the conference call should dial: US and Canada (888) 256-1007, International (929) 477-0448, wait for the conference operator and provide the operator with the Conference ID 1602283. A digital replay will be available two hours after the completion of the conference for 14 days. To access the replay, please visit our website at www.heico.com under the Investors section for details. HEICO Corporation is engaged primarily in the design, production, servicing and distribution of products and services to certain niche segments of the aviation, defense, space, medical, telecommunications and electronics industries through its Hollywood, Florida-based Flight Support Group and its Miami, Florida-based Electronic Technologies Group. HEICO's customers include a majority of the world's airlines and overhaul shops, as well as numerous defense and space contractors and military agencies worldwide, in addition to medical, telecommunications and electronics equipment manufacturers. For more information about HEICO, please visit our website at www.heico.com. Certain statements in this press release constitute forward-looking statements, which are subject to risks, uncertainties and contingencies. HEICO's actual results may differ materially from those expressed in or implied by those forward-looking statements. Factors that could cause such differences include, among others: the severity, magnitude and duration of public health threats, such as the COVID-19 pandemic; our liquidity and the amount and timing of cash generation; lower commercial air travel, airline fleet changes or airline purchasing decisions, 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; our ability to introduce new products and services at profitable pricing levels, which could reduce our sales or sales growth; product development or manufacturing difficulties, which could increase our product development and manufacturing costs and delay sales; cyber security events or other disruptions of our information technology systems could adversely affect our business; and our ability to make acquisitions, including obtaining any applicable domestic and/or foreign governmental approvals, and achieve operating synergies from acquired businesses; customer credit risk; interest, foreign currency exchange and income tax rates; and economic conditions, including the effects of inflation, within and outside of the aviation, defense, space, medical, telecommunications and electronics industries, which could negatively impact our costs and revenues. Parties receiving this material are encouraged to review all of HEICO's filings with the Securities and Exchange Commission, including, but not limited to filings on Form 10-K, Form 10-Q and Form 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, except to the extent required by applicable law. HEICO CORPORATION Condensed Consolidated Statements of Operations(Unaudited)(in thousands, except per share data) Three Months Ended April 30, 2024 2023 Net sales $ 955,395 $ 687,841 Cost of sales 583,600 421,329 Selling, general and administrative expenses 162,642 109,422 Operating income 209,153 157,090 Interest expense (38,512 ) (11,373 ) Other income 460 343 Income before income taxes and noncontrolling interests 171,101 146,060 Income tax expense 36,200 31,000 Net income from consolidated operations 134,901 115,060 Less: Net income attributable to noncontrolling interests 11,755 9,940 Net income attributable to HEICO $ 123,146 $ 105,120 Net income per share attributable to HEICO shareholders: Basic $ .89 $ .77 Diluted $ .88 $ .76 Weighted average number of common shares outstanding: Basic 138,386 136,916 Diluted 140,059 138,600 Three Months Ended April 30, 2024 2023 Operating segment information: Net sales: Flight Support Group $ 647,232 $ 392,202 Electronic Technologies Group 319,322 301,759 Intersegment sales (11,159 ) (6,120 ) $ 955,395 $ 687,841 Operating income: Flight Support Group $ 148,876 $ 99,912 Electronic Technologies Group 75,263 67,979 Other, primarily corporate (14,986 ) (10,801 ) $ 209,153 $ 157,090 HEICO CORPORATION Condensed Consolidated Statements of Operations (Unaudited)(in thousands, except per share data) Six Months Ended April 30, 2024 2023 Net sales $ 1,851,758 $ 1,308,756 Cost of sales 1,133,194 798,445 Selling, general and administrative expenses 329,201 223,787 Operating income 389,363 286,524 Interest expense (77,119 ) (17,441 ) Other income 1,139 982 Income before income taxes and noncontrolling interests 313,383 270,065 Income tax expense 53,000 (a) 52,000 (b) Net income from consolidated operations 260,383 218,065 Less: Net income attributable to noncontrolling interests 22,539 19,918 Net income attributable to HEICO $ 237,844 (a) $ 198,147 (b) Net income per share attributable to HEICO shareholders: Basic $ 1.72 (a) $ 1.45 (b) Diluted $ 1.70 (a) $ 1.43 (b) Weighted average number of common shares outstanding: Basic 138,325 136,786 Diluted 139,976 138,590 Six Months Ended April 30, 2024 2023 Operating segment information: Net sales: Flight Support Group $ 1,265,948 $ 763,480 Electronic Technologies Group 605,264 556,818 Intersegment sales (19,454 ) (11,542 ) $ 1,851,758 $ 1,308,756 Operating income: Flight Support Group $ 284,967 $ 183,521 Electronic Technologies Group 130,591 124,516 Other, primarily corporate (26,195 ) (21,513 ) $ 389,363 $ 286,524 HEICO CORPORATION Footnotes to Condensed Consolidated Statements of Operations (Unaudited) (a) During the first quarter of fiscal 2024, the Company recognized a $13.6 million discrete tax benefit from stock option exercises, which, net of noncontrolling interests, increased net income attributable to HEICO by $13.3 million, or $.10 per basic and diluted share. (b) During the first quarter of fiscal 2023, the Company recognized a $6.2 million discrete tax benefit from stock option exercises, which, net of noncontrolling interests, increased net income attributable to HEICO by $6.1 million, or $.04 per basic and diluted share. HEICO CORPORATION Condensed Consolidated Balance Sheets(Unaudited)(in thousands) April 30, 2024 October 31, 2023 Cash and cash equivalents $ 204,161 $ 171,048 Accounts receivable, net 504,362 509,075 Contract assets 110,158 111,702 Inventories, net 1,088,101 1,013,680 Prepaid expenses and other current assets 61,919 49,837 Total current assets 1,968,701 1,855,342 Property, plant and equipment, net 326,740 321,848 Goodwill 3,285,468 3,274,327 Intangible assets, net 1,333,337 1,357,281 Other assets 451,599 386,265 Total assets $ 7,365,845 $ 7,195,063 Short-term and current maturities of long-term debt $ 4,382 $ 17,801 Other current liabilities 554,781 647,541 Total current liabilities 559,163 665,342 Long-term debt, net of current maturities 2,385,267 2,460,277 Deferred income taxes 119,987 131,846 Other long-term liabilities 490,253 379,640 Total liabilities 3,554,670 3,637,105 Redeemable noncontrolling interests 368,369 364,807 Shareholders' equity 3,442,806 3,193,151 Total liabilities and equity $ 7,365,845 $ 7,195,063 HEICO CORPORATION Condensed Consolidated Statements of Cash Flows(Unaudited)(in thousands) Six Months Ended April 30, 2024 2023 Operating Activities: Net income from consolidated operations $ 260,383 $ 218,065 Depreciation and amortization 86,336 56,784 Share-based compensation expense 9,463 6,055 Employer contributions to HEICO Savings and Investment Plan 8,802 6,533 Deferred income tax benefit (11,532 ) (9,596 ) Amendment and termination of contingent consideration agreement - (9,057 ) Payment of contingent consideration (6,203 ) (6,299 ) (Decrease) increase in accrued contingent consideration, net (5,326 ) 1,842 Decrease (increase) in accounts receivable 5,309 (21,222 ) Decrease (increase) in contract assets 3,172 (9,267 ) Increase in inventories (71,103 ) (75,251 ) Decrease in current liabilities, net (76,338 ) (9,698 ) Other 49,829 5,547 Net cash provided by operating activities 252,792 154,436 Investing Activities: Acquisitions, net of cash acquired (46,208 ) (524,231 ) Capital expenditures (26,325 ) (21,921 ) Investments related to HEICO Leadership Compensation Plan (14,410 ) (14,000 ) Other 1,657 362 Net cash used in investing activities (85,286 ) (559,790 ) Financing Activities: (Payments) borrowings on revolving credit facility, net (75,000 ) 448,000 Distributions to noncontrolling interests (15,372 ) (22,650 ) (Payments) borrowings on short-term debt, net (13,924 ) 1,672 Cash dividends paid (13,831 ) (13,668 ) Payment of contingent consideration (13,797 ) (12,610 ) Acquisitions of noncontrolling interests (3,165 ) (2,733 ) Redemptions of common stock related to stock option exercises (2,352 ) (14,811 ) Proceeds from stock option exercises 4,151 4,074 Other (1,905 ) 1,491 Net cash (used in) provided by financing activities (135,195 ) 388,765 Effect of exchange rate changes on cash 802 4,246 Net increase (decrease) in cash and cash equivalents 33,113 (12,343 ) Cash and cash equivalents at beginning of year 171,048 139,504 Cash and cash equivalents at end of period $ 204,161 $ 127,161 HEICO CORPORATION Non-GAAP Financial Measures(Unaudited)(in thousands, except ratios) Six Months Ended April 30, EBITDA Calculation 2024 2023 Net income attributable to HEICO $ 237,844 $ 198,147 Plus: Depreciation and amortization 86,336 56,784 Plus: Net income attributable to noncontrolling interests 22,539 19,918 Plus: Interest expense 77,119 17,441 Plus: Income tax expense 53,000 52,000 EBITDA (a) $ 476,838 $ 344,290 Three Months Ended April 30, EBITDA Calculation 2024 2023 Net income attributable to HEICO $ 123,146 $ 105,120 Plus: Depreciation and amortization 42,831 29,724 Plus: Net income attributable to noncontrolling interests 11,755 9,940 Plus: Interest expense 38,512 11,373 Plus: Income tax expense 36,200 31,000 EBITDA (a) $ 252,444 $ 187,157 Trailing Twelve Months Ended EBITDA Calculation April 30, 2024 October 31, 2023 Net income attributable to HEICO $ 443,293 $ 403,596 Plus: Depreciation and amortization 159,595 130,043 Plus: Net income attributable to noncontrolling interests 43,408 40,787 Plus: Interest expense 132,662 72,984 Plus: Income tax expense 111,900 110,900 EBITDA (a) $ 890,858 $ 758,310 Net Debt Calculation April 30, 2024 October 31, 2023 Total debt $ 2,389,649 $ 2,478,078 Less: Cash and cash equivalents (204,161 ) (171,048 ) Net debt (a) $ 2,185,488 $ 2,307,030 Total debt $ 2,389,649 $ 2,478,078 Net income attributable to HEICO (trailing twelve months) $ 443,293 $ 403,596 Total debt to net income attributable to HEICO ratio 5.39 6.14 Net debt $ 2,185,488 $ 2,307,030 EBITDA (trailing twelve months) $ 890,858 $ 758,310 Net debt to EBITDA ratio (a) 2.45 3.04 (a) See the "Non-GAAP Financial Measures" section of this press release. Victor H. Mendelson (305) 374-1745 ext. 7590Carlos L. Macau, Jr. (954) 987-4000 ext. 7570 SOURCE: HEICO Corporation View the original press release on accesswire.com
HOLLYWOOD, FL and MIAMI, FL / ACCESSWIRE / May 28, 2024 / HEICO CORPORATION (NYSE:HEI.A)(NYSE:HEI) today reported an increase in net income of 17% to a record $123.1 million, or $.88 per diluted share, in the second quarter of fiscal 2024, up from $105.1 million, or $.76 per diluted share, in the second quarter of fiscal 2023. Net income increased 20% to a record $237.8 million, or $1.70 per diluted share, in the first six months of fiscal 2024, up from $198.1 million, or $1.43 per diluted share, in the first six months of fiscal 2023. Net sales increased 39% to a record $955.4 million in the second quarter of fiscal 2024, up from $687.8 million in the second quarter of fiscal 2023. Operating income increased 33% to a record $209.2 million in the second quarter of fiscal 2024, up from $157.1 million in the second quarter of fiscal 2023. The Company's consolidated operating margin was 21.9% in the second quarter of fiscal 2024, as compared to 22.8% in the second quarter of fiscal 2023. Net sales increased 41% to a record $1,851.8 million in the first six months of fiscal 2024, up from $1,308.8 million in the first six months of fiscal 2023. Operating income increased 36% to a record $389.4 million in the first six months of fiscal 2024, up from $286.5 million in the first six months of fiscal 2023. The Company's consolidated operating margin was 21.0% in the first six months of fiscal 2024, as compared to 21.9% in the first six months of fiscal 2023. Our commercial aerospace sales growth has resulted in fifteen consecutive quarters of sequential growth in net sales at the Flight Support Group. EBITDA increased 35% to $252.4 million in the second quarter of fiscal 2024, up from $187.2 million in the second quarter of fiscal 2023. EBITDA increased 38% to $476.8 million in the first six months of fiscal 2024, up from $344.3 million in the first six months of fiscal 2023. See our reconciliation of net income attributable to HEICO to EBITDA at the end of this press release. Consolidated Results Laurans A. Mendelson, HEICO's Chairman and CEO, commented on the Company's second quarter results stating, "We are very pleased to report strong record quarterly consolidated net sales driven by record quarterly operating results at the Flight Support Group and improved results at the Electronic Technologies Group, as well as strong contributions from our fiscal 2023 acquisitions. These results reflect 12% organic growth in the Flight Support Group's net sales principally arising from increased demand for its commercial aerospace products and services and 4% organic growth in the Electronic Technologies Group reflecting increased net sales of its defense and aerospace products. Our total debt to net income attributable to HEICO ratio was 5.39x as of April 30, 2024, down from 6.14x as of October 31, 2023. Our net debt to EBITDA ratio was 2.45x as of April 30, 2024, down from 3.04x as of October 31, 2023. See our reconciliation of total debt to net debt at the end of this press release. Cash flow provided by operating activities increased 82% to $141.1 million in the second quarter of fiscal 2024, up from $77.8 million in the second quarter of fiscal 2023. We continue to forecast strong cash flow from operations for fiscal 2024. As we look ahead to the remainder of fiscal 2024, we continue to anticipate net sales growth in both the Flight Support Group and the Electronic Technologies Group, principally driven by contributions from our fiscal 2023 acquisitions and demand for the majority of our products. Additionally, we plan to continue our commitment to developing new products and services and further market penetration, while maintaining our financial strength and flexibility." Flight Support Group Eric A. Mendelson, HEICO's Co-President and President of HEICO's Flight Support Group, commented on the Flight Support Group's record setting second quarter results stating, "Continuing our growth trend, we achieved quarterly increases of 65% and 49% in net sales and operating income, respectively, as compared to the second quarter of fiscal 2023. These results principally reflect robust 12% quarterly organic net sales growth, mainly from 21% organic growth in our aftermarket replacement parts as well as contributions from our fiscal 2023 and 2024 acquisitions. The Flight Support Group has now achieved fifteen consecutive quarters of growth in net sales. The Flight Support Group's net sales increased 65% to a record $647.2 million in the second quarter of fiscal 2024, up from $392.2 million in the second quarter of fiscal 2023. The Flight Support Group's net sales increased 66% to a record $1,265.9 million in the first six months of fiscal 2024, up from $763.5 million in the first six months of fiscal 2023. The Flight Support Group's net sales increase in the second quarter and first six months of fiscal 2024 reflects the impact from our fiscal 2023 and 2024 acquisitions and strong organic growth of 12%. The organic net sales growth mainly reflects increased demand within our aftermarket replacement parts and repair and overhaul parts and services product lines. The Flight Support Group's operating income increased 49% to a record $148.9 million in the second quarter of fiscal 2024, up from $99.9 million in the second quarter of fiscal 2023. The Flight Support Group's operating income increased 55% to a record $285.0 million in the first six months of fiscal 2024, up from $183.5 million in the first six months of fiscal 2023. The Flight Support Group's operating income increase in the second quarter and first six months of fiscal 2024 principally reflects the previously mentioned net sales growth, partially offset by an increase in intangible asset amortization expense, the prior year impact from the amendment and termination of a contingent consideration agreement, and higher inventory obsolescence expense. The Flight Support Group's operating margin was 23.0% in the second quarter of fiscal 2024, as compared to 25.5% in the second quarter of fiscal 2023. The Flight Support Group's operating margin was 22.5% in the first six months of fiscal 2024, as compared to 24.0% in the first six months of fiscal 2023. The Flight Support Group's operating margin decrease in the second quarter and first six months of fiscal 2024 principally reflects the prior year impact from the previously mentioned amendment and termination of a contingent consideration agreement, and higher intangible asset amortization expense, partially offset by lower performance-based compensation expense as a percentage of net sales." Electronic Technologies Group Victor H. Mendelson, HEICO's Co-President and President of HEICO's Electronic Technologies Group, commented on the Electronic Technologies Group's second quarter results stating, "Improved demand resulted in double-digit organic net sales growth of our defense and aerospace products, which contributed to our improved quarterly results. The Electronic Technologies Group's net sales increased 6% to $319.3 million in the second quarter of fiscal 2024, up from $301.8 million in the second quarter of fiscal 2023. The net sales increase is attributable to 4% organic growth mainly reflecting increased defense and aerospace products net sales, partially offset by lower other electronics products net sales. The Electronic Technologies Group's net sales increased 9% to $605.3 million in the first six months of fiscal 2024, up from $556.8 million in the first six months of fiscal 2023. The net sales increase is mainly attributable to the impact from our fiscal 2023 acquisition and increased organic net sales of our defense and aerospace products, partially offset by lower organic net sales of our other electronics products. The Electronic Technologies Group's operating income increased 11% to $75.3 million in the second quarter of fiscal 2024, up from $68.0 million in the second quarter of fiscal 2023. The operating income increase principally reflects an improved gross profit margin and the previously mentioned net sales growth. The improved gross profit margin principally reflects increased defense products net sales, partially offset by decreased other electronics products net sales. The Electronic Technologies Group's operating income increased 5% to $130.6 million in the first six months of fiscal 2024, up from $124.5 million in the first six months of fiscal 2023. The operating income increase principally reflects the previously mentioned net sales growth, lower acquisition costs and an improved gross profit margin, partially offset by lower selling, general and administrative ("SG&A") efficiencies. The improved gross profit margin principally reflects increased defense products net sales, partially offset by decreased other electronics products net sales. The Electronic Technologies Group's operating margin improved to 23.6% in the second quarter of fiscal 2024, up from 22.5% in the second quarter of fiscal 2023. The operating margin increase principally reflects the previously mentioned improved gross profit margin and net sales growth, partially offset by lower SG&A efficiencies. The Electronic Technologies Group's operating margin was 21.6% in the first six months of fiscal 2024, as compared to 22.4% in the first six months of fiscal 2023. The lower operating margin principally reflects increased SG&A expenses as a percentage of net sales, which supports our forecasted strong net sales and earnings growth for the remainder of fiscal 2024, partially offset by the previously mentioned improved gross profit margin. The increased SG&A expenses principally reflect lower efficiencies, partially offset by the previously mentioned lower acquisition costs." Non-GAAP Financial Measures To provide additional information about the Company's results, HEICO has discussed in this press release its EBITDA (calculated as net income attributable to HEICO adjusted for depreciation and amortization expense, net income attributable to noncontrolling interests, interest expense and income tax expense), its net debt (calculated as total debt less cash and cash equivalents), and its net debt to EBITDA ratio (calculated as net debt divided by EBITDA), which are not prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These non-GAAP measures are included to supplement the Company's financial information presented in accordance with GAAP and because the Company uses such measures to monitor and evaluate the performance of its business and believes the presentation of these measures enhance an investor's ability to analyze trends in the Company's business and to evaluate the Company's performance relative to other companies in its industry. However, these non-GAAP measures have limitations and should not be considered in isolation or as a substitute for analysis of the Company's financial results as reported under GAAP. These non-GAAP measures are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. These measures should only be used to evaluate the Company's results of operations in conjunction with their corresponding GAAP measures. Pursuant to the requirements of Regulation G of the Securities and Exchange Act of 1934, the Company has provided a reconciliation of these non-GAAP measures in the last table included in this press release. (NOTE: HEICO has two classes of common stock traded on the NYSE. Both classes, the Class A Common Stock (HEI.A) and the Common Stock (HEI), are virtually identical in all economic respects. The only difference between the share classes is the voting rights. The Class A Common Stock (HEI.A) carries 1/10 vote per share and the Common Stock (HEI) carries one vote per share.) There are currently approximately 83.7 million shares of HEICO's Class A Common Stock (HEI.A) outstanding and 54.8 million shares of HEICO's Common Stock (HEI) outstanding. The stock symbols for HEICO's two classes of common stock on most websites are HEI.A and HEI. However, some websites change HEICO's Class A Common Stock trading symbol (HEI.A) to HEI/A or HEIa. As previously announced, HEICO will hold a conference call on Wednesday, May 29, 2024 at 9:00 a.m. Eastern Daylight Time to discuss its second quarter results. Individuals wishing to participate in the conference call should dial: US and Canada (888) 256-1007, International (929) 477-0448, wait for the conference operator and provide the operator with the Conference ID 1602283. A digital replay will be available two hours after the completion of the conference for 14 days. To access the replay, please visit our website at www.heico.com under the Investors section for details. HEICO Corporation is engaged primarily in the design, production, servicing and distribution of products and services to certain niche segments of the aviation, defense, space, medical, telecommunications and electronics industries through its Hollywood, Florida-based Flight Support Group and its Miami, Florida-based Electronic Technologies Group. HEICO's customers include a majority of the world's airlines and overhaul shops, as well as numerous defense and space contractors and military agencies worldwide, in addition to medical, telecommunications and electronics equipment manufacturers. For more information about HEICO, please visit our website at www.heico.com. Certain statements in this press release constitute forward-looking statements, which are subject to risks, uncertainties and contingencies. HEICO's actual results may differ materially from those expressed in or implied by those forward-looking statements. Factors that could cause such differences include, among others: the severity, magnitude and duration of public health threats, such as the COVID-19 pandemic; our liquidity and the amount and timing of cash generation; lower commercial air travel, airline fleet changes or airline purchasing decisions, 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; our ability to introduce new products and services at profitable pricing levels, which could reduce our sales or sales growth; product development or manufacturing difficulties, which could increase our product development and manufacturing costs and delay sales; cyber security events or other disruptions of our information technology systems could adversely affect our business; and our ability to make acquisitions, including obtaining any applicable domestic and/or foreign governmental approvals, and achieve operating synergies from acquired businesses; customer credit risk; interest, foreign currency exchange and income tax rates; and economic conditions, including the effects of inflation, within and outside of the aviation, defense, space, medical, telecommunications and electronics industries, which could negatively impact our costs and revenues. Parties receiving this material are encouraged to review all of HEICO's filings with the Securities and Exchange Commission, including, but not limited to filings on Form 10-K, Form 10-Q and Form 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, except to the extent required by applicable law. HEICO CORPORATION Condensed Consolidated Statements of Operations(Unaudited)(in thousands, except per share data) Three Months Ended April 30, 2024 2023 Net sales $ 955,395 $ 687,841 Cost of sales 583,600 421,329 Selling, general and administrative expenses 162,642 109,422 Operating income 209,153 157,090 Interest expense (38,512 ) (11,373 ) Other income 460 343 Income before income taxes and noncontrolling interests 171,101 146,060 Income tax expense 36,200 31,000 Net income from consolidated operations 134,901 115,060 Less: Net income attributable to noncontrolling interests 11,755 9,940 Net income attributable to HEICO $ 123,146 $ 105,120 Net income per share attributable to HEICO shareholders: Basic $ .89 $ .77 Diluted $ .88 $ .76 Weighted average number of common shares outstanding: Basic 138,386 136,916 Diluted 140,059 138,600 Three Months Ended April 30, 2024 2023 Operating segment information: Net sales: Flight Support Group $ 647,232 $ 392,202 Electronic Technologies Group 319,322 301,759 Intersegment sales (11,159 ) (6,120 ) $ 955,395 $ 687,841 Operating income: Flight Support Group $ 148,876 $ 99,912 Electronic Technologies Group 75,263 67,979 Other, primarily corporate (14,986 ) (10,801 ) $ 209,153 $ 157,090 HEICO CORPORATION Condensed Consolidated Statements of Operations (Unaudited)(in thousands, except per share data) Six Months Ended April 30, 2024 2023 Net sales $ 1,851,758 $ 1,308,756 Cost of sales 1,133,194 798,445 Selling, general and administrative expenses 329,201 223,787 Operating income 389,363 286,524 Interest expense (77,119 ) (17,441 ) Other income 1,139 982 Income before income taxes and noncontrolling interests 313,383 270,065 Income tax expense 53,000 (a) 52,000 (b) Net income from consolidated operations 260,383 218,065 Less: Net income attributable to noncontrolling interests 22,539 19,918 Net income attributable to HEICO $ 237,844 (a) $ 198,147 (b) Net income per share attributable to HEICO shareholders: Basic $ 1.72 (a) $ 1.45 (b) Diluted $ 1.70 (a) $ 1.43 (b) Weighted average number of common shares outstanding: Basic 138,325 136,786 Diluted 139,976 138,590 Six Months Ended April 30, 2024 2023 Operating segment information: Net sales: Flight Support Group $ 1,265,948 $ 763,480 Electronic Technologies Group 605,264 556,818 Intersegment sales (19,454 ) (11,542 ) $ 1,851,758 $ 1,308,756 Operating income: Flight Support Group $ 284,967 $ 183,521 Electronic Technologies Group 130,591 124,516 Other, primarily corporate (26,195 ) (21,513 ) $ 389,363 $ 286,524 HEICO CORPORATION Footnotes to Condensed Consolidated Statements of Operations (Unaudited) (a) During the first quarter of fiscal 2024, the Company recognized a $13.6 million discrete tax benefit from stock option exercises, which, net of noncontrolling interests, increased net income attributable to HEICO by $13.3 million, or $.10 per basic and diluted share. (b) During the first quarter of fiscal 2023, the Company recognized a $6.2 million discrete tax benefit from stock option exercises, which, net of noncontrolling interests, increased net income attributable to HEICO by $6.1 million, or $.04 per basic and diluted share. HEICO CORPORATION Condensed Consolidated Balance Sheets(Unaudited)(in thousands) April 30, 2024 October 31, 2023 Cash and cash equivalents $ 204,161 $ 171,048 Accounts receivable, net 504,362 509,075 Contract assets 110,158 111,702 Inventories, net 1,088,101 1,013,680 Prepaid expenses and other current assets 61,919 49,837 Total current assets 1,968,701 1,855,342 Property, plant and equipment, net 326,740 321,848 Goodwill 3,285,468 3,274,327 Intangible assets, net 1,333,337 1,357,281 Other assets 451,599 386,265 Total assets $ 7,365,845 $ 7,195,063 Short-term and current maturities of long-term debt $ 4,382 $ 17,801 Other current liabilities 554,781 647,541 Total current liabilities 559,163 665,342 Long-term debt, net of current maturities 2,385,267 2,460,277 Deferred income taxes 119,987 131,846 Other long-term liabilities 490,253 379,640 Total liabilities 3,554,670 3,637,105 Redeemable noncontrolling interests 368,369 364,807 Shareholders' equity 3,442,806 3,193,151 Total liabilities and equity $ 7,365,845 $ 7,195,063 HEICO CORPORATION Condensed Consolidated Statements of Cash Flows(Unaudited)(in thousands) Six Months Ended April 30, 2024 2023 Operating Activities: Net income from consolidated operations $ 260,383 $ 218,065 Depreciation and amortization 86,336 56,784 Share-based compensation expense 9,463 6,055 Employer contributions to HEICO Savings and Investment Plan 8,802 6,533 Deferred income tax benefit (11,532 ) (9,596 ) Amendment and termination of contingent consideration agreement - (9,057 ) Payment of contingent consideration (6,203 ) (6,299 ) (Decrease) increase in accrued contingent consideration, net (5,326 ) 1,842 Decrease (increase) in accounts receivable 5,309 (21,222 ) Decrease (increase) in contract assets 3,172 (9,267 ) Increase in inventories (71,103 ) (75,251 ) Decrease in current liabilities, net (76,338 ) (9,698 ) Other 49,829 5,547 Net cash provided by operating activities 252,792 154,436 Investing Activities: Acquisitions, net of cash acquired (46,208 ) (524,231 ) Capital expenditures (26,325 ) (21,921 ) Investments related to HEICO Leadership Compensation Plan (14,410 ) (14,000 ) Other 1,657 362 Net cash used in investing activities (85,286 ) (559,790 ) Financing Activities: (Payments) borrowings on revolving credit facility, net (75,000 ) 448,000 Distributions to noncontrolling interests (15,372 ) (22,650 ) (Payments) borrowings on short-term debt, net (13,924 ) 1,672 Cash dividends paid (13,831 ) (13,668 ) Payment of contingent consideration (13,797 ) (12,610 ) Acquisitions of noncontrolling interests (3,165 ) (2,733 ) Redemptions of common stock related to stock option exercises (2,352 ) (14,811 ) Proceeds from stock option exercises 4,151 4,074 Other (1,905 ) 1,491 Net cash (used in) provided by financing activities (135,195 ) 388,765 Effect of exchange rate changes on cash 802 4,246 Net increase (decrease) in cash and cash equivalents 33,113 (12,343 ) Cash and cash equivalents at beginning of year 171,048 139,504 Cash and cash equivalents at end of period $ 204,161 $ 127,161 HEICO CORPORATION Non-GAAP Financial Measures(Unaudited)(in thousands, except ratios) Six Months Ended April 30, EBITDA Calculation 2024 2023 Net income attributable to HEICO $ 237,844 $ 198,147 Plus: Depreciation and amortization 86,336 56,784 Plus: Net income attributable to noncontrolling interests 22,539 19,918 Plus: Interest expense 77,119 17,441 Plus: Income tax expense 53,000 52,000 EBITDA (a) $ 476,838 $ 344,290 Three Months Ended April 30, EBITDA Calculation 2024 2023 Net income attributable to HEICO $ 123,146 $ 105,120 Plus: Depreciation and amortization 42,831 29,724 Plus: Net income attributable to noncontrolling interests 11,755 9,940 Plus: Interest expense 38,512 11,373 Plus: Income tax expense 36,200 31,000 EBITDA (a) $ 252,444 $ 187,157 Trailing Twelve Months Ended EBITDA Calculation April 30, 2024 October 31, 2023 Net income attributable to HEICO $ 443,293 $ 403,596 Plus: Depreciation and amortization 159,595 130,043 Plus: Net income attributable to noncontrolling interests 43,408 40,787 Plus: Interest expense 132,662 72,984 Plus: Income tax expense 111,900 110,900 EBITDA (a) $ 890,858 $ 758,310 Net Debt Calculation April 30, 2024 October 31, 2023 Total debt $ 2,389,649 $ 2,478,078 Less: Cash and cash equivalents (204,161 ) (171,048 ) Net debt (a) $ 2,185,488 $ 2,307,030 Total debt $ 2,389,649 $ 2,478,078 Net income attributable to HEICO (trailing twelve months) $ 443,293 $ 403,596 Total debt to net income attributable to HEICO ratio 5.39 6.14 Net debt $ 2,185,488 $ 2,307,030 EBITDA (trailing twelve months) $ 890,858 $ 758,310 Net debt to EBITDA ratio (a) 2.45 3.04 (a) See the "Non-GAAP Financial Measures" section of this press release. Victor H. Mendelson (305) 374-1745 ext. 7590Carlos L. Macau, Jr. (954) 987-4000 ext. 7570 SOURCE: HEICO Corporation View the original press release on accesswire.com