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HEICO Corporation Reports Record Sales, Operating Income And Net Income For The Fourth Quarter And Full Year Of Fiscal 2012; Targets Continued Growth In Fiscal 2013

As previously announced, HEICO will hold a conference call on Wednesday, December 19, 2012 at 9:00 a.m. Eastern Standard Time to discuss its fourth quarter and fiscal year results.  Individuals wishing to participate in the conference call should dial: U.S. and Canada (877) 586-4323, International (706) 679-0934, wait for the conference operator and provide the operator with the Conference ID 74993322.  A digital replay will be available two hours after the completion of the conference call for 14 days.  To access, dial: (404) 537-3406, and enter the Conference ID 74993322.

HEICO Corporation is engaged primarily in 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 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, 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 October 31,
  2012   2011  
Net sales $242,409   $208,919  
Cost of sales 152,671   134,600  
Selling, general and administrative expenses 44,132   36,879  
Operating income 45,606   37,440  
Interest expense (616)   (43)  
Other income (expense) 123   (85)  
Income before income taxes and noncontrolling interests 45,113   37,312  
Income tax expense 15,800   12,900  
Net income from consolidated operations 29,313   24,412  
Less: Net income attributable to noncontrolling interests 5,522   5,898  
Net income attributable to HEICO $23,791   $18,514 (b)
         
Net income per share attributable to HEICO shareholders: (d)        
Basic $.45   $.35 (b)
Diluted $.45   $.35   (b)
         
Weighted average number of common shares outstanding: (d)        
Basic 52,801   52,265  
Diluted 53,327   53,209  
         
  Three Months Ended October 31,
  2012   2011  
Operating segment information:        
Net sales:        
Flight Support Group $149,671   $144,370  
Electronic Technologies Group 94,373   65,294  
Intersegment sales (1,635)   (745)  
  $242,409   $208,919  
         
Operating income:        
Flight Support Group $25,420   $26,616  
Electronic Technologies Group 24,966   14,909  
Other, primarily corporate (4,780)   (4,085)  
  $45,606   $37,440  
         
         
HEICO CORPORATION
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
         
  Fiscal Year Ended October 31,
  2012   2011  
Net sales $897,347   $764,891  
Cost of sales 569,911   490,450  
Selling, general and administrative expenses 164,142   136,010  
Operating income 163,294   138,431  
Interest expense (2,432)   (142)  
Other income 313   64  
Income before income taxes and noncontrolling interests 161,175   138,353  
Income tax expense 54,500   42,900  
Net income from consolidated operations 106,675   95,453  
Less: Net income attributable to noncontrolling interests 21,528   22,633  
Net income attributable to HEICO $85,147 (a) $72,820 (b)(c)
         
Net income per share attributable to HEICO shareholders: (d)        
Basic $1.62 (a) $1.40 (b)(c)
Diluted $1.60 (a) $1.37 (b)(c)
         
Weighted average number of common shares outstanding: (d)        
Basic 52,689   52,040  
Diluted 53,299   53,127  
         
  Fiscal Year Ended October 31,
  2012   2011  
Operating segment information:        
Net sales:        
Flight Support Group $570,325   $539,563  
Electronic Technologies Group 331,598   227,771  
Intersegment sales (4,576)   (2,443)  
  $897,347   $764,891  
         
Operating income:        
Flight Support Group $103,943   $95,001  
Electronic Technologies Group 77,438   59,465  
Other, primarily corporate (18,087)   (16,035)  
  $163,294   $138,431  
 
 
HEICO CORPORATION
Footnotes to Condensed Consolidated Statements of Operations (Unaudited)
 ____________________
(a)   During the third quarter of fiscal 2012, the Company filed its fiscal 2011 U.S. federal and state tax returns. As a result, the Company recognized an aggregate benefit, which increased net income attributable to HEICO for the fiscal 2012 year by approximately $.9 million, or $.02 per basic and diluted share, net of expenses, principally from higher research and development tax credits. 
   
(b)   During the fourth quarter of fiscal 2011, the Company recorded impairment losses related to the write-down of certain intangible assets to their estimated fair values that were partially offset by a reduction in the value of contingent consideration related to a prior year acquisition, which decreased net income attributable to HEICO for the fourth quarter and fiscal 2011 year by approximately $2.4 million, or $.05 per basic and diluted share, in aggregate.
   
(c)   During fiscal 2011, the Company recognized a tax benefit principally from state income apportionment updates and higher research and development tax credits upon the filing of its fiscal 2010 U.S. federal and state tax returns and amendments of certain prior year state tax returns and also benefited from an income tax credit, net of expenses, for ten months' of fiscal 2010 qualified research and development activities recognized in fiscal 2011 upon the retroactive extension in December 2010 of Section 41, "Credit for Increasing Research Activities," of the Internal Revenue Code, which increased net income attributable to HEICO for the fiscal 2011 year by approximately $2.8 million, or $.05 per basic and diluted share, in aggregate. 
   
(d) All share and per share information has been adjusted retrospectively to reflect a 5-for-4 stock split effected in April 2012.
 
 
HEICO CORPORATION
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands)
     
  As of October 31,
  2012 2011
Cash and cash equivalents $21,451 $17,500
Accounts receivable, net 122,214 106,414
Inventories, net 189,704 164,967
Prepaid expenses and other current assets 34,542 27,757
Total current assets 367,911 316,638
Property, plant and equipment, net 80,518 67,074
Goodwill 542,114 443,402
Intangible assets, net 154,324 78,157
Other assets 47,979 35,798
Total assets $1,192,846 $941,069
     
Current maturities of long-term debt $626 $335
Other current liabilities 130,888 123,055
Total current liabilities 131,514 123,390
Long-term debt, net of current maturities 131,194 39,823
Deferred income taxes 90,436 58,899
Other long-term liabilities 52,777 33,373
Total liabilities 405,921 255,485
Redeemable noncontrolling interests 67,166 65,430
Shareholders' equity 719,759 620,154
Total liabilities and equity $1,192,846 $941,069
 
 
HEICO CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
     
  Fiscal Year Ended October 31,
  2012 2011
Operating Activities:    
Net income from consolidated operations $106,675 $95,453
Depreciation and amortization 30,656 18,543
Impairment of intangible assets 4,987
Change in value of contingent consideration 119 (1,150)
Issuance of common stock for HEICO Savings and Investment Plan 982
Deferred income tax (benefit) provision (2,834) 29
Tax benefit from stock option exercises 13,164 7,703
Excess tax benefit from stock option exercises (12,110) (6,346)
Stock option compensation expense 3,948 2,647
Increase in accounts receivable (5,782) (5,327)
Increase in inventories (7,484) (9,405)
Increase in current liabilities 11,210 19,198
Other 41 (814)
Net cash provided by operating activities 138,585 125,518
     
Investing Activities:    
Acquisitions, net of cash acquired (197,285) (94,655)
Capital expenditures (15,262) (9,446)
Other (161) 201
Net cash used in investing activities (212,708) (103,900)
     
Financing Activities:    
Borrowings on revolving credit facility, net 91,000 22,000
Excess tax benefit from stock option exercises 12,110 6,346
Distributions to noncontrolling interests (9,090) (14,893)
Redemptions of common stock related to stock option exercises (307) (14,298)
Acquisitions of noncontrolling interests (7,616) (7,241)
Cash dividends paid (5,689) (4,494)
Revolving credit facility issuance costs (3,028)
Proceeds from stock option exercises 833 2,167
Other 214 (256)
Net cash provided by (used in) financing activities 78,427 (10,669)
     
Effect of exchange rate changes on cash (353) 8
     
Net increase in cash and cash equivalents 3,951 10,957
Cash and cash equivalents at beginning of year 17,500 6,543
Cash and cash equivalents at end of year $21,451 $17,500
CONTACT: Thomas S. Irwin (954) 987-4000 ext. 7560
         Victor H. Mendelson (305) 374-1745 ext. 7590
         Carlos L. Macau (954) 987-4000 ext. 7570

HEICO Corporation logo

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