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TheStreet Open House

HEICO Corporation Reports Record Sales, Operating Income, Net Income And EPS For First Quarter Of Fiscal 2011; Fiscal 2011 Full Year Sales And Net Income Estimates Raised

There are currently approximately 19.9 million shares of HEICO's Class A Common Stock (HEI.A) outstanding and 13.3 million shares of HEICO's Common Stock (HEI) outstanding. The stock symbols for HEICO's two classes of common stock on most web sites are HEI.A and HEI. However, some web sites change HEICO's Class A Common Stock trading symbol (HEI.A) to HEI/A or HEIa.

HEICO Corporation is engaged primarily in certain niche segments of the aviation, defense, space, medical, telecommunication and electronic industries through its Flight Support Group and its Electronic Technologies Group. HEICO's customers include a majority of the world's airlines and airmotives as well as numerous defense and space contractors and military agencies worldwide in addition to medical, telecommunication and electronic equipment manufacturers. For more information about HEICO, please visit our web site at http://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 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; and 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. 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.

 
HEICO CORPORATION
Condensed Consolidated Statements of Operations (Unaudited)
 
  Three Months Ended January 31,
  2011 2010
Net sales $174,219,000 $135,535,000
Cost of sales 110,293,000 85,415,000
Selling, general and administrative expenses 31,554,000 25,576,000
Operating income 32,372,000 24,544,000
Interest expense (54,000) (119,000)
Other income  55,000 155,000
Income before income taxes and noncontrolling interests 32,373,000 24,580,000
Income tax expense 9,850,000 8,550,000
Net income from consolidated operations 22,523,000 16,030,000
Less: Net income attributable to noncontrolling interests 5,449,000 4,237,000
Net income attributable to HEICO $17,074,000 (a) $11,793,000
     
Net income per share attributable to HEICO shareholders: (b)   
Basic $.52 (a) $.36
Diluted $.50 (a) $.35
     
Weighted average number of common shares outstanding: (b)   
Basic 33,087,674 32,683,590
Diluted 33,908,223 33,701,918
     
  Three Months Ended January 31,
  2011 2010
Operating segment information: --    
Net sales:    
Flight Support Group $120,641,000 $93,779,000
Electronic Technologies Group 53,939,000 42,058,000
Intersegment sales (361,000) (302,000)
  $174,219,000 $135,535,000
     
Operating income:    
Flight Support Group $20,429,000 $16,720,000
Electronic Technologies Group 15,538,000 11,170,000
Other, primarily corporate (3,595,000) (3,346,000)
  $32,372,000 $24,544,000

HEICO CORPORATION
Footnotes to Condensed Consolidated Statements of Operations (Unaudited)
   
(a) In December 2010, Section 41 of the Internal Revenue Code, "Credit for Increasing Research Activities," was retroactively extended for two years to cover the period from January 1, 2010 to December 31, 2011. As a result, we recognized an income tax credit for qualified research and development activities for the last ten months of fiscal 2010 in the first quarter of 2011. The tax credit, net of expenses, increased net income attributable to HEICO by approximately $.8 million, or $.02 per diluted share, in the first quarter of fiscal 2011.
 
(b) All fiscal 2010 share and per share information has been adjusted retrospectively to reflect a 5-for-4 stock split effected in April 2010.

 

HEICO CORPORATION
Condensed Consolidated Balance Sheets (Unaudited)
     
  January 31, 2011 October 31, 2010
Cash and cash equivalents $13,865,000 $6,543,000
Accounts receivable, net 92,047,000 91,815,000
Inventories, net 149,445,000 138,215,000
Prepaid expenses and other current assets 25,004,000 22,676,000
Total current assets 280,361,000 259,249,000
Property, plant and equipment, net 58,134,000 59,003,000
Goodwill 389,202,000 385,016,000
Other assets 97,803,000 78,375,000
Total assets $825,500,000 $781,643,000
     
Current maturities of long-term debt $91,000 $148,000
Other current liabilities 81,098,000 81,684,000
Total current liabilities 81,189,000 81,832,000
Long-term debt, net of current maturities 24,074,000 14,073,000
Deferred income taxes 44,967,000 45,308,000
Other non-current liabilities 36,924,000 30,556,000
Total liabilities 187,154,000 171,769,000
Redeemable noncontrolling interests 61,196,000 55,048,000
Shareholders' equity 577,150,000 554,826,000
Total liabilities and equity $825,500,000 $781,643,000

 

HEICO CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
     
  Three Months Ended January 31, 
  2011 2010
Operating Activities:    
Net income from consolidated operations $22,523,000 $16,030,000
Depreciation and amortization 4,307,000 4,251,000
Deferred income tax provision 347,000 429,000
Tax benefit from stock option exercises 7,695,000 947,000
Excess tax benefit from stock option exercises (6,359,000) (666,000)
Stock option compensation expense 543,000 308,000
Decrease in accounts receivable 4,836,000 3,401,000
Increase in inventories (2,045,000) (4,082,000)
(Decrease) increase in current liabilities (6,201,000) 1,080,000
Other (2,099,000) (1,421,000)
Net cash provided by operating activities 23,547,000 20,277,000
     
Investing Activities:    
Acquisitions, net of cash acquired (22,588,000) (2,182,000)
Capital expenditures (1,637,000) (2,158,000)
Other 6,000 (3,000)
Net cash used in investing activities (24,219,000) (4,343,000)
     
Financing Activities:    
Borrowings (payments) on revolving credit facility, net 10,000,000 (12,000,000)
Excess tax benefit from stock option exercises 6,359,000 666,000
Redemptions of common stock related to stock option exercises (4,371,000) (353,000)
Distributions to noncontrolling interests (2,269,000) (2,508,000)
Cash dividends paid (1,990,000) (1,570,000)
Proceeds from stock option exercises 295,000 232,000
Other (59,000) (34,000)
Net cash provided by (used in) financing activities 7,965,000 (15,567,000)
     
Effect of exchange rate changes on cash 29,000 (10,000)
     
Net increase in cash and cash equivalents 7,322,000 357,000
Cash and cash equivalents at beginning of year 6,543,000 7,167,000
Cash and cash equivalents at end of period $13,865,000 $7,524,000
CONTACT: Thomas S. Irwin (954) 987-4000 ext. 7560
         Victor H. Mendelson (305) 374-1745 ext. 7590

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