x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSACTION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
|
Florida
|
65-0341002
|
(State
or other jurisdiction of
|
(I.R.S.
Employer Identification No.)
|
incorporation
or organization)
|
|
3000
Taft Street, Hollywood, Florida
|
33021
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Common
Stock, $.01 par value
|
13,126,005
shares
|
Class
A Common Stock, $.01 par value
|
19,817,872
shares
|
Page
|
|||
Part
I.
|
Financial
Information:
|
||
|
|||
Part
II.
|
Other
Information:
|
||
July
31, 2010
|
October
31, 2009
|
|||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 11,037,000 | $ | 7,167,000 | ||||
Accounts
receivable, net
|
84,078,000 | 77,864,000 | ||||||
Inventories,
net
|
140,712,000 | 137,585,000 | ||||||
Prepaid
expenses and other current assets
|
5,364,000 | 4,290,000 | ||||||
Deferred
income taxes
|
18,534,000 | 16,671,000 | ||||||
Total
current assets
|
259,725,000 | 243,577,000 | ||||||
|
||||||||
Property,
plant and equipment, net
|
59,803,000 | 60,528,000 | ||||||
Goodwill
|
380,709,000 | 365,243,000 | ||||||
Intangible
assets, net
|
51,949,000 | 41,588,000 | ||||||
Other
assets
|
25,853,000 | 21,974,000 | ||||||
Total
assets
|
$ | 778,039,000 | $ | 732,910,000 | ||||
LIABILITIES
AND EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Current
maturities of long-term debt
|
$ | 199,000 | $ | 237,000 | ||||
Trade
accounts payable
|
28,290,000 | 26,978,000 | ||||||
Accrued
expenses and other current liabilities
|
38,292,000 | 36,978,000 | ||||||
Income
taxes payable
|
1,196,000 | 1,320,000 | ||||||
Total
current liabilities
|
67,977,000 | 65,513,000 | ||||||
Long-term
debt, net of current maturities
|
47,093,000 | 55,194,000 | ||||||
Deferred
income taxes
|
43,126,000 | 41,340,000 | ||||||
Other
long-term liabilities
|
27,836,000 | 23,268,000 | ||||||
Total
liabilities
|
186,032,000 | 185,315,000 | ||||||
Commitments
and contingencies (Note 11)
|
||||||||
Redeemable
noncontrolling interests (Note 12)
|
56,053,000 | 56,937,000 | ||||||
Shareholders’
equity:
|
||||||||
Preferred
Stock, $.01 par value per share; 10,000,000 shares
|
||||||||
authorized;
300,000 shares designated as Series B Junior
|
||||||||
Participating
Preferred Stock and 300,000 shares designated
|
||||||||
as
Series C Junior Participating Preferred Stock; none issued
|
¾ | ¾ | ||||||
Common
Stock, $.01 par value per share; 30,000,000 shares
authorized
|
||||||||
13,126,005
and 13,011,426 shares issued and outstanding, respectively
|
131,000 | 104,000 | ||||||
Class
A Common Stock, $.01 par value per share; 30,000,000
|
||||||||
shares
authorized; 19,815,122 and 19,641,543 shares issued
|
||||||||
and
outstanding, respectively
|
198,000 | 157,000 | ||||||
Capital
in excess of par value
|
227,215,000 | 224,625,000 | ||||||
Accumulated
other comprehensive loss
|
(498,000 | ) | (1,381,000 | ) | ||||
Retained
earnings
|
225,206,000 | 189,485,000 | ||||||
Total
HEICO shareholders’ equity
|
452,252,000 | 412,990,000 | ||||||
Noncontrolling
interests
|
83,702,000 | 77,668,000 | ||||||
Total
shareholders’ equity
|
535,954,000 | 490,658,000 | ||||||
Total
liabilities and equity
|
$ | 778,039,000 | $ | 732,910,000 |
Nine
months ended July 31,
|
Three
months ended July 31,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net
sales
|
$ | 447,650,000 | $ | 394,689,000 | $ | 158,270,000 | $ | 134,086,000 | ||||||||
Operating
costs and expenses:
|
||||||||||||||||
Cost
of sales
|
286,351,000 | 262,456,000 | 100,717,000 | 88,275,000 | ||||||||||||
Selling,
general and administrative expenses
|
81,805,000 | 68,039,000 | 28,560,000 | 24,389,000 | ||||||||||||
Total
operating costs and expenses
|
368,156,000 | 330,495,000 | 129,277,000 | 112,664,000 | ||||||||||||
Operating
income
|
79,494,000 | 64,194,000 | 28,993,000 | 21,422,000 | ||||||||||||
Interest
expense
|
(422,000 | ) | (484,000 | ) | (136,000 | ) | (177,000 | ) | ||||||||
Other
income (expense)
|
392,000 | 186,000 | (31,000 | ) | 184,000 | |||||||||||
Income
before income taxes and noncontrolling
|
||||||||||||||||
interests
|
79,464,000 | 63,896,000 | 28,826,000 | 21,429,000 | ||||||||||||
Income
tax expense
|
27,000,000 | 19,331,000 | 9,300,000 | 6,511,000 | ||||||||||||
Net
income from consolidated operations
|
52,464,000 | 44,565,000 | 19,526,000 | 14,918,000 | ||||||||||||
Less:
Net income attributable to noncontrolling
|
||||||||||||||||
interests
|
13,168,000 | 11,575,000 | 4,596,000 | 3,786,000 | ||||||||||||
Net
income attributable to HEICO
|
$ | 39,296,000 | $ | 32,990,000 | $ | 14,930,000 | $ | 11,132,000 | ||||||||
Net
income per share attributable to HEICO
|
||||||||||||||||
shareholders:
|
||||||||||||||||
Basic
|
$ | 1.20 | $ | 1.01 | $ | .45 | $ | .34 | ||||||||
Diluted
|
$ | 1.16 | $ | .98 | $ | .44 | $ | .33 | ||||||||
|
||||||||||||||||
Weighted
average number of common shares
|
||||||||||||||||
outstanding:
|
||||||||||||||||
Basic
|
32,793,137 | 32,799,101 | 32,917,530 | 32,603,643 | ||||||||||||
Diluted
|
33,753,414 | 33,816,980 | 33,797,471 | 33,632,863 | ||||||||||||
|
||||||||||||||||
Cash
dividends per share
|
$ | .108 | $ | .096 | $ | .060 | $ | .048 |
HEICO
Shareholders' Equity
|
||||||||||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||||||||||
Redeemable
|
Class
A
|
Capital
in
|
Other
|
Total
|
||||||||||||||||||||||||||||
Noncontrolling
|
Common
|
Common
|
Excess
of
|
Comprehensive
|
Retained
|
Noncontrolling
|
Shareholders'
|
|||||||||||||||||||||||||
Interests
|
Stock
|
Stock
|
Par
Value
|
Loss
|
Earnings
|
Interests
|
Equity
|
|||||||||||||||||||||||||
Balances
as of October 31, 2009
|
||||||||||||||||||||||||||||||||
(as
previously reported)
|
$ | ― | $ | 104,000 | $ | 157,000 | $ | 224,625,000 | $ | (1,381,000 | ) | $ | 234,348,000 | $ | ― | $ | 457,853,000 | |||||||||||||||
Retrospective
adjustments related to
|
||||||||||||||||||||||||||||||||
adoption
of accounting guidance for
|
||||||||||||||||||||||||||||||||
noncontrolling
interests
|
56,937,000 | — | — | — | — | (44,863,000 | ) | 77,668,000 | 32,805,000 | |||||||||||||||||||||||
Balances
as of October 31, 2009
|
||||||||||||||||||||||||||||||||
(as
adjusted)
|
56,937,000 | 104,000 | 157,000 | 224,625,000 | (1,381,000 | ) | 189,485,000 | 77,668,000 | 490,658,000 | |||||||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||||||
Net
income
|
7,134,000 | — | — | — | — | 39,296,000 | 6,034,000 | 45,330,000 | ||||||||||||||||||||||||
Foreign
currency translation adjustments
|
— | — | — | — | 877,000 | — | — | 877,000 | ||||||||||||||||||||||||
Total
comprehensive income
|
7,134,000 | — | — | — | 877,000 | 39,296,000 | 6,034,000 | 46,207,000 | ||||||||||||||||||||||||
Cash
dividends ($.108 per share)
|
— | — | — | — | — | (3,546,000 | ) | — | (3,546,000 | ) | ||||||||||||||||||||||
Five-for-four
common stock split
|
— | 26,000 | 40,000 | (66,000 | ) | — | (68,000 | ) | — | (68,000 | ) | |||||||||||||||||||||
Proceeds
from stock option exercises
|
— | 1,000 | 1,000 | 1,465,000 | — | — | — | 1,467,000 | ||||||||||||||||||||||||
Tax
benefit from stock option exercises
|
— | — | — | 951,000 | — | — | — | 951,000 | ||||||||||||||||||||||||
Stock
option compensation expense
|
— | — | — | 921,000 | — | — | — | 921,000 | ||||||||||||||||||||||||
Distributions
to noncontrolling interests
|
(7,184,000 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||
Acquisitions
of noncontrolling interests
|
(795,000 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||
Redemptions
of common stock related to
|
||||||||||||||||||||||||||||||||
stock
option exercises
|
— | — | — | (681,000 | ) | — | — | — | (681,000 | ) | ||||||||||||||||||||||
Adjustments
to redemption amount of
|
||||||||||||||||||||||||||||||||
redeemable
noncontrolling interests
|
(39,000 | ) | — | — | — | — | 39,000 | — | 39,000 | |||||||||||||||||||||||
Other
|
— | — | — | — | 6,000 | — | — | 6,000 | ||||||||||||||||||||||||
Balances
as of July 31, 2010
|
$ | 56,053,000 | $ | 131,000 | $ | 198,000 | $ | 227,215,000 | $ | (498,000 | ) | $ | 225,206,000 | $ | 83,702,000 | $ | 535,954,000 |
HEICO
Shareholders' Equity
|
||||||||||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||||||||||
Redeemable
|
Class
A
|
Capital
in
|
Other
|
Total
|
||||||||||||||||||||||||||||
Noncontrolling
|
Common
|
Common
|
Excess
of
|
Comprehensive
|
Retained
|
Noncontrolling
|
Shareholders'
|
|||||||||||||||||||||||||
Interests
|
Stock
|
Stock
|
Par
Value
|
Loss
|
Earnings
|
Interests
|
Equity
|
|||||||||||||||||||||||||
Balances
as of October 31, 2008
|
||||||||||||||||||||||||||||||||
(as
previously reported)
|
$ | ― | $ | 106,000 | $ | 158,000 | $ | 229,443,000 | $ | (4,819,000 | ) | $ | 192,872,000 | $ | ― | $ | 417,760,000 | |||||||||||||||
Retrospective
adjustments related to
|
||||||||||||||||||||||||||||||||
adoption
of accounting guidance for
|
||||||||||||||||||||||||||||||||
noncontrolling
interests
|
48,736,000 | — | — | — | — | (35,896,000 | ) | 71,138,000 | 35,242,000 | |||||||||||||||||||||||
Balances
as of October 31, 2008
|
||||||||||||||||||||||||||||||||
(as
adjusted)
|
48,736,000 | 106,000 | 158,000 | 229,443,000 | (4,819,000 | ) | 156,976,000 | 71,138,000 | 453,002,000 | |||||||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||||||
Net
income
|
5,938,000 | — | — | — | — | 32,990,000 | 5,637,000 | 38,627,000 | ||||||||||||||||||||||||
Foreign
currency translation adjustments
|
— | — | — | — | 2,859,000 | — | — | 2,859,000 | ||||||||||||||||||||||||
Total
comprehensive income
|
5,938,000 | — | — | — | 2,859,000 | 32,990,000 | 5,637,000 | 41,486,000 | ||||||||||||||||||||||||
Repurchases
of common stock
|
— | (2,000 | ) | (2,000 | ) | (8,094,000 | ) | — | — | — | (8,098,000 | ) | ||||||||||||||||||||
Cash
dividends ($.096 per share)
|
— | — | — | — | — | (3,150,000 | ) | — | (3,150,000 | ) | ||||||||||||||||||||||
Proceeds
from stock option exercises
|
— | — | 1,000 | 821,000 | — | — | — | 822,000 | ||||||||||||||||||||||||
Tax
benefit from stock option exercises
|
— | — | — | 1,889,000 | — | — | — | 1,889,000 | ||||||||||||||||||||||||
Stock
option compensation expense
|
— | — | — | 15,000 | — | — | — | 15,000 | ||||||||||||||||||||||||
Distributions
to noncontrolling interests
|
(5,533,000 | ) | — | — | — | — | — | (461,000 | ) | (461,000 | ) | |||||||||||||||||||||
Acquisitions
of noncontrolling interests
|
(10,015,000 | ) | — | — | — | — | 6,845,000 | — | 6,845,000 | |||||||||||||||||||||||
Noncontrolling
interests assumed
|
||||||||||||||||||||||||||||||||
related
to acquistion
|
7,505,000 | — | — | — | — | (4,202,000 | ) | — | (4,202,000 | ) | ||||||||||||||||||||||
Adjustments
to redemption amount of
|
||||||||||||||||||||||||||||||||
redeemable
noncontrolling interests
|
971,000 | — | — | — | — | (971,000 | ) | — | (971,000 | ) | ||||||||||||||||||||||
Other
|
— | — | — | — | 164,000 | 1,000 | — | 165,000 | ||||||||||||||||||||||||
Balances
as of July 31, 2009
|
$ | 47,602,000 | $ | 104,000 | $ | 157,000 | $ | 224,074,000 | $ | (1,796,000 | ) | $ | 188,489,000 | $ | 76,314,000 | $ | 487,342,000 |
Nine
months ended July 31,
|
||||||||
2010
|
2009
|
|||||||
Operating
Activities:
|
||||||||
Net
income from consolidated operations
|
$ | 52,464,000 | $ | 44,565,000 | ||||
Adjustments
to reconcile net income from consolidated operations
|
||||||||
to
net cash provided by operating activities:
|
||||||||
Depreciation
and amortization
|
13,578,000 | 10,951,000 | ||||||
Impairment
of intangible assets
|
281,000 | — | ||||||
Deferred
income tax benefit
|
(80,000 | ) | (1,376,000 | ) | ||||
Tax
benefit from stock option exercises
|
951,000 | 1,889,000 | ||||||
Excess
tax benefit from stock option exercises
|
(669,000 | ) | (1,572,000 | ) | ||||
Stock
option compensation expense
|
921,000 | 15,000 | ||||||
Changes
in operating assets and liabilities, net of acquisitions:
|
||||||||
(Increase)
decrease in accounts receivable
|
(2,988,000 | ) | 20,207,000 | |||||
Decrease
(increase) in inventories
|
3,625,000 | (9,282,000 | ) | |||||
Increase
in prepaid expenses and other current assets
|
(1,051,000 | ) | (2,271,000 | ) | ||||
Decrease
in trade accounts payable
|
(177,000 | ) | (2,995,000 | ) | ||||
Increase
(decrease) in accrued expenses and other current
liabilities
|
1,744,000 | (15,776,000 | ) | |||||
Decrease
in income taxes payable
|
(794,000 | ) | (1,080,000 | ) | ||||
Other
|
116,000 | 444,000 | ||||||
Net
cash provided by operating activities
|
67,921,000 | 43,719,000 | ||||||
|
||||||||
Investing
Activities:
|
||||||||
Acquisitions,
net of cash acquired
|
(39,061,000 | ) | (34,562,000 | ) | ||||
Capital
expenditures
|
(6,743,000 | ) | (7,784,000 | ) | ||||
Other
|
(18,000 | ) | 73,000 | |||||
Net
cash used in investing activities
|
(45,822,000 | ) | (42,273,000 | ) | ||||
|
||||||||
Financing
Activities:
|
||||||||
Payments
on revolving credit facility
|
(45,000,000 | ) | (49,000,000 | ) | ||||
Borrowings
on revolving credit facility
|
37,000,000 | 68,000,000 | ||||||
Acquisitions
of noncontrolling interests
|
(795,000 | ) | (11,268,000 | ) | ||||
Repurchases
of common stock
|
— | (8,098,000 | ) | |||||
Distributions
to noncontrolling interests
|
(7,184,000 | ) | (5,994,000 | ) | ||||
Cash
dividends paid
|
(3,614,000 | ) | (3,150,000 | ) | ||||
Redemptions
of common stock related to stock option exercises
|
(681,000 | ) | — | |||||
Proceeds
from stock option exercises
|
1,467,000 | 822,000 | ||||||
Excess
tax benefit from stock option exercises
|
669,000 | 1,572,000 | ||||||
Other
|
(152,000 | ) | (158,000 | ) | ||||
Net
cash used in financing activities
|
(18,290,000 | ) | (7,274,000 | ) | ||||
|
||||||||
Effect
of exchange rate changes on cash
|
61,000 | 214,000 | ||||||
Net
increase (decrease) in cash and cash equivalents
|
3,870,000 | (5,614,000 | ) | |||||
Cash
and cash equivalents at beginning of year
|
7,167,000 | 12,562,000 | ||||||
Cash
and cash equivalents at end of period
|
$ | 11,037,000 | $ | 6,948,000 |
Nine
months ended
|
Three
months ended
|
|||||||
July
31, 2009
|
July
31, 2009
|
|||||||
Net
sales
|
$ | 412,717,000 | $ | 139,023,000 | ||||
Net
income from consolidated operations
|
$ | 45,882,000 | $ | 14,969,000 | ||||
Net
income attributable to HEICO
|
$ | 34,307,000 | $ | 11,183,000 | ||||
Net
income per share attributable
|
||||||||
to
HEICO shareholders:
|
||||||||
Basic
|
$ | 1.05 | $ | .34 | ||||
Diluted
|
$ | 1.01 | $ | .33 |
July
31, 2010
|
October
31, 2009
|
|||||||
Accounts
receivable
|
$ | 86,962,000 | $ | 80,399,000 | ||||
Less: Allowance
for doubtful accounts
|
(2,884,000 | ) | (2,535,000 | ) | ||||
Accounts
receivable, net
|
$ | 84,078,000 | $ | 77,864,000 |
July
31, 2010
|
October
31, 2009
|
|||||||
Costs
incurred on uncompleted contracts
|
$ | 4,548,000 | $ | 10,280,000 | ||||
Estimated
earnings
|
5,480,000 | 8,070,000 | ||||||
10,028,000 | 18,350,000 | |||||||
Less: Billings
to date
|
(7,251,000 | ) | (12,543,000 | ) | ||||
$ | 2,777,000 | $ | 5,807,000 | |||||
Included
in the accompanying Condensed Consolidated
|
||||||||
Balance
Sheets under the following captions:
|
||||||||
Accounts
receivable, net (costs and estimated
|
||||||||
earnings
in excess of billings)
|
$ | 2,958,000 | $ | 5,832,000 | ||||
Accrued
expenses and other current liabilities
|
||||||||
(billings
in excess of costs and estimated earnings)
|
(181,000 | ) | (25,000 | ) | ||||
$ | 2,777,000 | $ | 5,807,000 |
July
31, 2010
|
October
31, 2009
|
|||||||
Finished
products
|
$ | 74,609,000 | $ | 79,665,000 | ||||
Work
in process
|
18,814,000 | 14,279,000 | ||||||
Materials,
parts, assemblies and supplies
|
47,289,000 | 43,641,000 | ||||||
Inventories,
net
|
$ | 140,712,000 | $ | 137,585,000 |
July
31, 2010
|
October
31, 2009
|
|||||||
Land
|
$ | 3,656,000 | $ | 3,656,000 | ||||
Buildings
and improvements
|
38,750,000 | 38,091,000 | ||||||
Machinery,
equipment and tooling
|
86,276,000 | 80,697,000 | ||||||
Construction
in progress
|
6,028,000 | 5,331,000 | ||||||
134,710,000 | 127,775,000 | |||||||
Less: Accumulated
depreciation and amortization
|
(74,907,000 | ) | (67,247,000 | ) | ||||
Property,
plant and equipment, net
|
$ | 59,803,000 | $ | 60,528,000 |
Segment
|
Consolidated
|
|||||||||||
FSG
|
ETG
|
Totals
|
||||||||||
Balances
as of October 31, 2009
|
$ | 188,459,000 | $ | 176,784,000 | $ | 365,243,000 | ||||||
Acquired
goodwill
|
¾ | 12,920,000 | 12,920,000 | |||||||||
Adjustments
to goodwill
|
¾ | 1,960,000 | 1,960,000 | |||||||||
Foreign
currency translation adjustment
|
¾ | 586,000 | 586,000 | |||||||||
Balances
as of July 31, 2010
|
$ | 188,459,000 | $ | 192,250,000 | $ | 380,709,000 |
As
of July 31, 2010
|
As
of October 31, 2009
|
|||||||||||||||||||||||
Gross
|
Net
|
Gross
|
Net
|
|||||||||||||||||||||
Carrying
|
Accumulated
|
Carrying
|
Carrying
|
Accumulated
|
Carrying
|
|||||||||||||||||||
Amount
|
Amortization
|
Amount
|
Amount
|
Amortization
|
Amount
|
|||||||||||||||||||
Amortizing Assets:
|
||||||||||||||||||||||||
Customer
relationships
|
$ | 41,759,000 | $ | (14,360,000 | ) | $ | 27,399,000 | $ | 33,237,000 | $ | (9,944,000 | ) | $ | 23,293,000 | ||||||||||
Intellectual
property
|
7,303,000 | (1,247,000 | ) | 6,056,000 | 3,369,000 | (628,000 | ) | 2,741,000 | ||||||||||||||||
Licenses
|
1,000,000 | (603,000 | ) | 397,000 | 1,000,000 | (547,000 | ) | 453,000 | ||||||||||||||||
Non-compete
agreements
|
1,166,000 | (991,000 | ) | 175,000 | 1,221,000 | (969,000 | ) | 252,000 | ||||||||||||||||
Patents
|
558,000 | (261,000 | ) | 297,000 | 575,000 | (246,000 | ) | 329,000 | ||||||||||||||||
Trade
names
|
569,000 | (84,000 | ) | 485,000 | 569,000 | ¾ | 569,000 | |||||||||||||||||
52,355,000 | (17,546,000 | ) | 34,809,000 | 39,971,000 | (12,334,000 | ) | 27,637,000 | |||||||||||||||||
Non-Amortizing Assets:
|
||||||||||||||||||||||||
Trade
names
|
17,140,000 | ¾ | 17,140,000 | 13,951,000 | ¾ | 13,951,000 | ||||||||||||||||||
$ | 69,495,000 | $ | (17,546,000 | ) | $ | 51,949,000 | $ | 53,922,000 | $ | (12,334,000 | ) | $ | 41,588,000 |
July
31, 2010
|
October
31, 2009
|
|||||||
Borrowings
under revolving credit facility
|
$ | 47,000,000 | $ | 55,000,000 | ||||
Notes
payable, capital leases and equipment loans
|
292,000 | 431,000 | ||||||
47,292,000 | 55,431,000 | |||||||
Less:
Current maturities of long-term debt
|
(199,000 | ) | (237,000 | ) | ||||
$ | 47,093,000 | $ | 55,194,000 |
Balance
as of October 31, 2009
|
$ | 3,328,000 | ||
Decreases
related to prior year tax positions
|
(837,000 | ) | ||
Increases
related to current year tax positions
|
393,000 | |||
Lapse
of statutes of limitations
|
(288,000 | ) | ||
Balance
as of July 31, 2010
|
$ | 2,596,000 |
Level 1 —
|
Quoted
prices in active markets for identical assets or
liabilities;
|
Level 2 —
|
Inputs,
other than quoted prices included within Level 1, that are observable for
the asset or liability either directly or indirectly;
or
|
Level 3 —
|
Unobservable
inputs for the asset or liability where there is little or no market data,
requiring management to develop its own
assumptions.
|
As
of July 31, 2010
|
||||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
Deferred
compensation plans:
|
||||||||||||||||
Corporate
owned life insurance
|
$ | — | $ | 20,672,000 | $ | — | $ | 20,672,000 | ||||||||
Equity
securities
|
964,000 | — | — | 964,000 | ||||||||||||
Mutual
funds
|
961,000 | — | — | 961,000 | ||||||||||||
Money
market funds and cash
|
832,000 | — | — | 832,000 | ||||||||||||
Other
|
— | 525,000 | — | 525,000 | ||||||||||||
Total
assets
|
$ | 2,757,000 | $ | 21,197,000 | $ | — | $ | 23,954,000 | ||||||||
|
||||||||||||||||
Liabilities:
|
||||||||||||||||
Contingent
consideration
|
$ | — | $ | — | $ | 1,150,000 | $ | 1,150,000 |
As
of October 31, 2009
|
||||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
Deferred
compensation plans:
|
||||||||||||||||
Corporate
owned life insurance
|
$ | — | $ | 15,687,000 | $ | — | $ | 15,687,000 | ||||||||
Equity
securities
|
1,057,000 | — | — | 1,057,000 | ||||||||||||
Mutual
funds
|
614,000 | — | — | 614,000 | ||||||||||||
Money
market funds and cash
|
2,163,000 | — | — | 2,163,000 | ||||||||||||
Other
|
— | 243,000 | — | 243,000 | ||||||||||||
Total
assets
|
$ | 3,834,000 | $ | 15,930,000 | $ | — | $ | 19,764,000 | ||||||||
Liabilities
|
— | — | — | — |
Nine
months ended July 31,
|
Three
months ended July 31,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Numerator:
|
||||||||||||||||
Net
income attributable to HEICO
|
$ | 39,296,000 | $ | 32,990,000 | $ | 14,930,000 | $ | 11,132,000 | ||||||||
Denominator:
|
||||||||||||||||
Weighted
average common shares outstanding-basic
|
32,793,137 | 32,799,101 | 32,917,530 | 32,603,643 | ||||||||||||
Effect
of dilutive stock options
|
960,277 | 1,017,879 | 879,941 | 1,029,220 | ||||||||||||
Weighted
average common shares outstanding-diluted
|
33,753,414 | 33,816,980 | 33,797,471 | 33,632,863 | ||||||||||||
Net
income per share attributable to HEICO shareholders:
|
||||||||||||||||
Basic
|
$ | 1.20 | $ | 1.01 | $ | .45 | $ | .34 | ||||||||
Diluted
|
$ | 1.16 | $ | .98 | $ | .44 | $ | .33 | ||||||||
Anti-dilutive
stock options excluded
|
432,292 | 3,193 | 431,250 | 9,579 |
Other,
|
||||||||||||||||
Primarily
|
||||||||||||||||
Segment
|
Corporate
and
|
Consolidated
|
||||||||||||||
FSG
|
ETG
|
Intersegment
|
Totals
|
|||||||||||||
For the nine months ended July 31,
2010:
|
||||||||||||||||
Net
sales
|
$ | 301,145,000 | $ | 147,231,000 | $ | (726,000 | ) | $ | 447,650,000 | |||||||
Depreciation
and amortization
|
7,467,000 | 5,817,000 | 294,000 | 13,578,000 | ||||||||||||
Operating
income
|
50,332,000 | 39,961,000 | (10,799,000 | ) | 79,494,000 | |||||||||||
Capital
expenditures
|
5,513,000 | 1,214,000 | 16,000 | 6,743,000 | ||||||||||||
For the nine months ended July 31,
2009:
|
||||||||||||||||
Net
sales
|
$ | 297,543,000 | $ | 97,523,000 | $ | (377,000 | ) | $ | 394,689,000 | |||||||
Depreciation
and amortization
|
7,330,000 | 3,287,000 | 334,000 | 10,951,000 | ||||||||||||
Operating
income
|
46,297,000 | 26,508,000 | (8,611,000 | ) | 64,194,000 | |||||||||||
Capital
expenditures
|
6,644,000 | 1,075,000 | 65,000 | 7,784,000 | ||||||||||||
For the three months ended July 31,
2010:
|
||||||||||||||||
Net
sales
|
$ | 104,323,000 | $ | 54,107,000 | $ | (160,000 | ) | $ | 158,270,000 | |||||||
Depreciation
and amortization
|
2,493,000 | 2,111,000 | 96,000 | 4,700,000 | ||||||||||||
Operating
income
|
17,557,000 | 15,198,000 | (3,762,000 | ) | 28,993,000 | |||||||||||
Capital
expenditures
|
1,696,000 | 434,000 | 13,000 | 2,143,000 | ||||||||||||
For the three months ended July 31,
2009:
|
||||||||||||||||
Net
sales
|
$ | 97,236,000 | $ | 37,054,000 | $ | (204,000 | ) | $ | 134,086,000 | |||||||
Depreciation
and amortization
|
2,521,000 | 1,409,000 | 113,000 | 4,043,000 | ||||||||||||
Operating
income
|
14,759,000 | 9,935,000 | (3,272,000 | ) | 21,422,000 | |||||||||||
Capital
expenditures
|
1,867,000 | 466,000 | 54,000 | 2,387,000 |
Other,
|
||||||||||||||||
Segment
|
Primarily
|
Consolidated
|
||||||||||||||
FSG
|
ETG
|
Corporate
|
Totals
|
|||||||||||||
Total
assets as of July 31, 2010
|
$ | 413,551,000 | $ | 324,822,000 | $ | 39,666,000 | $ | 778,039,000 | ||||||||
Total
assets as of October 31, 2009
|
414,030,000 | 285,602,000 | 33,278,000 | 732,910,000 |
Nine
months ended July 31,
|
||||||||
2010
|
2009
|
|||||||
Balances
as of beginning of fiscal year
|
$ | 1,022,000 | $ | 671,000 | ||||
Accruals
for warranties
|
1,251,000 | 1,163,000 | ||||||
Warranty
claims settled
|
(855,000 | ) | (645,000 | ) | ||||
Acquired
warranty liabilities
|
80,000 | — | ||||||
Balances
as of July 31
|
$ | 1,498,000 | $ | 1,189,000 |
Item
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|
Nine
months ended July 31,
|
Three
months ended July 31,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net
sales
|
$ | 447,650,000 | $ | 394,689,000 | $ | 158,270,000 | $ | 134,086,000 | ||||||||
Cost
of sales
|
286,351,000 | 262,456,000 | 100,717,000 | 88,275,000 | ||||||||||||
Selling,
general and administrative expenses
|
81,805,000 | 68,039,000 | 28,560,000 | 24,389,000 | ||||||||||||
Total
operating costs and expenses
|
368,156,000 | 330,495,000 | 129,277,000 | 112,664,000 | ||||||||||||
Operating
income
|
$ | 79,494,000 | $ | 64,194,000 | $ | 28,993,000 | $ | 21,422,000 | ||||||||
Net
sales by segment:
|
||||||||||||||||
Flight
Support Group
|
$ | 301,145,000 | $ | 297,543,000 | $ | 104,323,000 | $ | 97,236,000 | ||||||||
Electronic
Technologies Group
|
147,231,000 | 97,523,000 | 54,107,000 | 37,054,000 | ||||||||||||
Intersegment
sales
|
(726,000 | ) | (377,000 | ) | (160,000 | ) | (204,000 | ) | ||||||||
$ | 447,650,000 | $ | 394,689,000 | $ | 158,270,000 | $ | 134,086,000 | |||||||||
Operating
income by segment:
|
||||||||||||||||
Flight
Support Group
|
$ | 50,332,000 | $ | 46,297,000 | $ | 17,557,000 | $ | 14,759,000 | ||||||||
Electronic
Technologies Group
|
39,961,000 | 26,508,000 | 15,198,000 | 9,935,000 | ||||||||||||
Other,
primarily corporate
|
(10,799,000 | ) | (8,611,000 | ) | (3,762,000 | ) | (3,272,000 | ) | ||||||||
|
$ | 79,494,000 | $ | 64,194,000 | $ | 28,993,000 | $ | 21,422,000 | ||||||||
Net
sales
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Gross
profit
|
36.0 | % | 33.5 | % | 36.4 | % | 34.2 | % | ||||||||
Selling,
general and administrative expenses
|
18.3 | % | 17.2 | % | 18.0 | % | 18.2 | % | ||||||||
Operating
income
|
17.8 | % | 16.3 | % | 18.3 | % | 16.0 | % | ||||||||
Interest
expense
|
.1 | % | .1 | % | .1 | % | .1 | % | ||||||||
Other
income (expense)
|
.1 | % | — | — | .1 | % | ||||||||||
Income
tax expense
|
6.0 | % | 4.9 | % | 5.9 | % | 4.9 | % | ||||||||
Net
income attributable to noncontrolling
|
||||||||||||||||
interests
|
2.9 | % | 2.9 | % | 2.9 | % | 2.8 | % | ||||||||
Net
income attributable to HEICO
|
8.8 | % | 8.4 | % | 9.4 | % | 8.3 | % |
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
CONTROLS
AND PROCEDURES
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
|
Exhibit
|
Description
|
|
31.1
|
Rule 13a-14(a)/15d-14(a)
Certification of Chief Executive Officer. *
|
|
|
||
31.2
|
Rule 13a-14(a)/15d-14(a)
Certification of Chief Financial Officer. *
|
|
32.1
|
Section 1350 Certification of
Chief Executive Officer. **
|
|
32.2
|
Section 1350 Certification of
Chief Financial Officer. **
|
|
101.INS
|
XBRL Instance
Document.**
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
Document.**
|
|
101.CAL
|
XBRL Taxonomy Extension
Calculation Linkbase Document.**
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
Document.**
|
|
101.LAB
|
XBRL Taxonomy Extension Labels
Linkbase Document.**
|
|
101.PRE
|
XBRL Taxonomy Extension
Presentation Linkbase
Document.**
|
|
*
|
Filed
herewith.
|
|
**
|
Furnished
herewith.
|
HEICO CORPORATION | |||
Date: September
1, 2010
|
By:
|
/s/ THOMAS S. IRWIN | |
Thomas S. Irwin | |||
Executive
Vice President and
Chief
Financial Officer
(Principal
Financial and
Accounting
Officer)
|
|||
|
Exhibit
|
Description
|
|
31.1
|
Rule 13a-14(a)/15d-14(a)
Certification of Chief Executive Officer. *
|
|
|
||
31.2
|
Rule 13a-14(a)/15d-14(a)
Certification of Chief Financial Officer. *
|
|
32.1
|
Section 1350 Certification of
Chief Executive Officer. **
|
|
32.2
|
Section 1350 Certification of
Chief Financial Officer. **
|
|
101.INS
|
XBRL Instance
Document.**
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
Document.**
|
|
101.CAL
|
XBRL Taxonomy Extension
Calculation Linkbase Document.**
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
Document.**
|
|
101.LAB
|
XBRL Taxonomy Extension Labels
Linkbase Document.**
|
|
101.PRE
|
XBRL Taxonomy Extension
Presentation Linkbase
Document.**
|