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TheStreet Open House

HEICO Corporation Reports Record Net Sales And Net Income For The First Quarter Of Fiscal 2013; Full Year Sales And Net Income Growth Estimates Raised

Stocks in this article: HEI

(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) receives 1/10 vote per share and the Common Stock (HEI) receives one vote per share.)

There are currently approximately 31.6 million shares of HEICO's Class A Common Stock (HEI.A) outstanding and 21.4 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 Thursday, February 21, 2013 at 9:00 a.m. Eastern Standard Time to discuss its first quarter 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 11128596.  A digital replay will be available two hours after the completion of the conference for 14 days.  To access, dial: (404) 537-3406, and enter the Conference ID 11128596.

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 January 31,
  2013   2012
Net sales $216,490   $212,655
Cost of sales 138,901   134,407
Selling, general and administrative expenses 42,650   40,616
Operating income 34,939   37,632
Interest expense (640)   (610)
Other income  285   144
Income before income taxes and noncontrolling interests 34,584   37,166
Income tax expense 9,600   12,700
Net income from consolidated operations 24,984   24,466
Less: Net income attributable to noncontrolling interests 5,026   5,281
Net income attributable to HEICO $19,958 (a) $19,185
       
Net income per share attributable to HEICO shareholders: (b)     
Basic $.38 (a) $.36
Diluted $.37 (a) $.36
       
Weighted average number of common shares outstanding: (b)     
Basic 52,951   52,611
Diluted 53,439   53,285
       
  Three Months Ended January 31,
  2013   2012
Operating segment information: -      
Net sales:      
Flight Support Group $138,998   $138,867
Electronic Technologies Group 78,841   74,471
Intersegment sales (1,349)   (683)
  $216,490   $212,655
       
Operating income:      
Flight Support Group $24,245   $25,507
Electronic Technologies Group 15,546   16,205
Other, primarily corporate (4,852)   (4,080)
  $34,939   $37,632
HEICO CORPORATION
Footnotes to Condensed Consolidated Statements of Operations (Unaudited)
                                              
(a)   In January 2013, Section 41 of the Internal Revenue Code, "Credit for Increasing Research Activities," was retroactively extended to cover a two year period from January 1, 2012 to December 31, 2013. As a result, an income tax credit for qualified research and development activities for the last ten months of fiscal 2012 was recognized by the Company in the first quarter of fiscal 2013. The tax credit, net of expenses, increased net income attributable to HEICO by approximately $1.0 million, or $.02 per basic and diluted share, for the three months ended January 31, 2013.
     
(b)   All fiscal 2012 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)
     
  January 31, 2013 October 31, 2012
Cash and cash equivalents $19,089 $21,451
Accounts receivable, net 110,258 122,214
Inventories, net 195,089 189,704
Prepaid expenses and other current assets 35,259 34,542
Total current assets 359,695 367,911
Property, plant and equipment, net 81,800 80,518
Goodwill 543,932 542,114
Intangible assets, net 150,786 154,324
Other assets 56,308 47,979
Total assets $1,192,521 $1,192,846
     
Current maturities of long-term debt $657 $626
Other current liabilities 101,917 130,888
Total current liabilities 102,574 131,514
Long-term debt, net of current maturities 254,224 131,194
Deferred income taxes 89,863 90,436
Other long-term liabilities 62,098 52,777
Total liabilities 508,759 405,921
Redeemable noncontrolling interests 51,218 67,166
Shareholders' equity 632,544 719,759
Total liabilities and equity $1,192,521 $1,192,846
     
HEICO CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
  Three Months Ended January 31, 
  2013 2012
Operating Activities:    
Net income from consolidated operations $24,984 $24,466
Depreciation and amortization 8,140 6,975
Tax benefit from stock option exercises 5,170 13,026
Excess tax benefit from stock option exercises (5,105) (11,983)
Stock option compensation expense 1,094 942
Deferred income tax provision 803 851
Decrease in value of contingent consideration (159)  —
Decrease in accounts receivable 12,142 4,189
Increase in inventories (4,960) (5,885)
Increase in prepaid expenses and other current assets  (2,456) (7,666)
Decrease in current liabilities (27,113) (27,263)
Other 743 98
Net cash provided by (used in) operating activities 13,283 (2,250)
     
Investing Activities:    
Acquisitions, net of cash acquired (1,242) (142,328)
Capital expenditures (4,466) (3,788)
Other (3) (107)
Net cash used in investing activities (5,711) (146,223)
     
Financing Activities:    
Borrowings on revolving credit facility, net 123,000 151,000
Cash dividends paid (116,645) (2,526)
Acquisitions of noncontrolling interests (16,610)  —
Excess tax benefit from stock option exercises 5,105 11,983
Distributions to noncontrolling interests (2,310) (3,006)
Redemptions of common stock related to stock option exercises (2,364)  —
Revolving credit facility issuance costs  (570) (3,028)
Proceeds from stock option exercises 286 79
Other (152) (93)
Net cash (used in) provided by financing activities (10,260) 154,409
     
Effect of exchange rate changes on cash 326 (345)
     
Net (decrease) increase in cash and cash equivalents (2,362) 5,591
Cash and cash equivalents at beginning of year 21,451 17,500
Cash and cash equivalents at end of period $19,089 $23,091
     
CONTACT: Thomas S. Irwin (954) 987-4000 ext. 7560
         Victor H. Mendelson (305) 374-1745 ext. 7590
         Carlos L. Macau, Jr. (954) 987-4000 ext. 7570

HEICO Corporation logo

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