HOLLYWOOD, FL and MIAMI, FL / ACCESSWIRE / February 26, 2024 / HEICO CORPORATION (NYSE:HEI.A)(NYSE:HEI) today reported an increase in net income of 23% to $114.7 million, or $.82 per diluted share, in the first quarter of fiscal 2024, up from $93.0 million, or $.67 per diluted share, in the first quarter of fiscal 2023.

Net sales increased 44% to $896.4 million in the first quarter of fiscal 2024, up from $620.9 million in the first quarter of fiscal 2023. Operating income increased 39% to $180.2 million in the first quarter of fiscal 2024, up from $129.4 million in the first quarter of fiscal 2023. The Company's consolidated operating margin was 20.1% in the first quarter of fiscal 2024, as compared to 20.8% in the first quarter of fiscal 2023.

Our commercial aerospace sales growth has resulted in fourteen consecutive quarters of sequential growth in net sales at the Flight Support Group.

EBITDA increased 43% to $224.4 million in the first quarter of fiscal 2024, up from $157.1 million in the first quarter of fiscal 2023. See our reconciliation of net income attributable to HEICO to EBITDA at the end of this press release.

Net income attributable to HEICO in the first quarter of fiscal 2024 and 2023 were both favorably impacted by a discrete income tax benefit from stock option exercises. The benefit in the first quarter of fiscal 2024, net of noncontrolling interests, was $13.3 million, up from $6.1 million in the first quarter of fiscal 2023.

Consolidated Results

Laurans A. Mendelson, HEICO's Chairman and CEO, commented on the Company's first quarter results stating, "We are very pleased to report strong quarterly consolidated net sales driven by record quarterly operating results at the Flight Support Group and the 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.



Our total debt to net income attributable to HEICO ratio was 5.88x as of January 31, 2024, down from 6.14x as of October 31, 2023. Our net debt to EBITDA ratio was 2.79x as of January 31, 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 46% to $111.7 million in the first quarter of fiscal 2024, up from $76.7 million in the first 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 first quarter results stating, "Continuing our growth trend, we achieved quarterly increases of 67% and 63% in net sales and operating income, respectively, as compared to the first quarter of fiscal 2023. These results principally reflect robust 12% quarterly organic net sales growth principally for our commercial aerospace parts and services as well as the contribution from our fiscal 2023 acquisition of Wencor, which continues to perform above our expectations, partially offset by lower specialty products net sales. The Flight Support Group has now achieved fourteen consecutive quarters of growth in net sales.

The Flight Support Group's net sales increased 67% to a record $618.7 million in the first quarter of fiscal 2024, up from $371.3 million in the first quarter of fiscal 2023. The net sales increase reflects the impact from our fiscal 2023 acquisition and strong 12% organic growth. 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 63% to a record $136.1 million in the first quarter of fiscal 2024, up from $83.6 million in the first quarter of fiscal 2023. The operating income increase principally reflects the previously mentioned net sales growth, partially offset by an increase in intangible asset amortization expense and higher inventory obsolescence expense.

The Flight Support Group's operating margin was 22.0% in the first quarter of fiscal 2024, as compared to 22.5% in the first quarter of fiscal 2023. The small decrease in the Flight Support Group's operating income as a percentage of net sales principally reflects a slightly lower gross profit margin and higher expected intangible asset amortization expense due to the Wencor acquisition, partially offset by lower performance-based compensation expense."

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 first quarter results stating, "Improved demand resulted in strong organic net sales growth of our aerospace products and the net sales contribution from our fiscal 2023 acquisitions collectively contributed to double-digit quarterly net sales growth. Our ongoing commitment to long-term growth was exhibited through increased spending on new product research and development.

The results of our new product research and development, combined with our near record backlog and our shipment schedule, are expected to result in higher net sales and profit margins in the quarters ahead and over the long term.

The Electronic Technologies Group's net sales increased 12% to $285.9 million in the first quarter of fiscal 2024, up from $255.1 million in the first quarter of fiscal 2023. The net sales increase is mainly attributable to the impact from our fiscal 2023 acquisitions and increased organic net sales of our aerospace products, partially offset by lower organic net sales of our other electronics, medical and commercial space products.

The Electronic Technologies Group's operating income was $55.3 million in the first quarter of fiscal 2024, as compared to $56.5 million in the first quarter of fiscal 2023. The operating income decrease principally reflects a less favorable product sales mix resulting in lower efficiencies and an increase in new product research and development expenses, partially offset by the previously mentioned net sales increase and acquisition costs incurred in the first quarter of fiscal 2023 related to the closing of an acquisition.

The Electronic Technologies Group's operating margin was 19.3% in the first quarter of fiscal 2024, as compared to 22.2% in the first quarter of fiscal 2023. The lower operating margin, which we expect to improve in the quarters ahead, principally reflects the previously mentioned product sales mix, higher new product research and development expenses, and increased selling, general and administrative ("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 lower acquisition costs. For the full year, we expect SG&A expenses to decrease as a percentage of net sales, as our net sales increase."

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 83.6 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 Tuesday, February 27, 2024 at 9:00 a.m. Eastern Standard Time to discuss its first 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 8809355. 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; 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 
January 31, 2024 2023 Net sales $ 896,363 $ 620,915 Cost of sales 549,594 377,116 Selling, general and administrative expenses 166,559 114,365 Operating income 180,210 129,434 Interest expense (38,607 ) (6,068 ) Other income 679 639 Income before income taxes and noncontrolling interests 142,282 124,005 Income tax expense 16,800 (a) 21,000 (b) Net income from consolidated operations 125,482 103,005 Less: Net income attributable to noncontrolling interests 10,784 9,978 Net income attributable to HEICO $ 114,698 (a) $ 93,027 (b) Net income per share attributable to HEICO shareholders: Basic $ .83 (a) $ .68 (b) Diluted $ .82 (a) $ .67 (b) Weighted average number of common shares outstanding: Basic 138,265 136,655 Diluted 139,893 138,579 Three Months Ended 
January 31, 2024 2023 Operating segment information: Net sales: Flight Support Group $ 618,716 $ 371,278 Electronic Technologies Group 285,942 255,059 Intersegment sales (8,295 ) (5,422 ) $ 896,363 $ 620,915 Operating income: Flight Support Group $ 136,091 $ 83,609 Electronic Technologies Group 55,328 56,537 Other, primarily corporate (11,209 ) (10,712 ) $ 180,210 $ 129,434

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)

January 31, 2024 October 31, 2023 Cash and cash equivalents $ 196,323 $ 171,048 Accounts receivable, net 471,697 509,075 Contract assets 108,888 111,702 Inventories, net 1,068,735 1,013,680 Prepaid expenses and other current assets 66,716 49,837 Total current assets 1,912,359 1,855,342 Property, plant and equipment, net 327,661 321,848 Goodwill 3,290,494 3,274,327 Intangible assets, net 1,365,682 1,357,281 Other assets 439,873 386,265 Total assets $ 7,336,069 $ 7,195,063 Short-term and current maturities of long-term debt $ 4,739 $ 17,801 Other current liabilities 599,356 647,541 Total current liabilities 604,095 665,342 Long-term debt, net of current maturities 2,495,726 2,460,277 Deferred income taxes 128,203 131,846 Other long-term liabilities 425,541 379,640 Total liabilities 3,653,565 3,637,105 Redeemable noncontrolling interests 365,865 364,807 Shareholders' equity 3,316,639 3,193,151 Total liabilities and equity $ 7,336,069 $ 7,195,063

HEICO CORPORATION
Condensed Consolidated Statements of Cash Flows 
(Unaudited)
(in thousands)

Three Months Ended January 31, 2024 2023 Operating Activities: Net income from consolidated operations $ 125,482 $ 103,005 Depreciation and amortization 43,505 27,060 Employer contributions to HEICO Savings and Investment Plan 5,665 3,814 Share-based compensation expense 4,881 2,812 Increase in accrued contingent consideration, net 1,095 1,336 Deferred income tax (benefit) provision (3,759 ) 980 Payment of contingent consideration (6,203 ) (6,299 ) Decrease (increase) in accounts receivable 38,940 (7,095 ) Decrease (increase) in contract assets 4,560 (7,303 ) Increase in inventories (49,846 ) (52,041 ) (Decrease) increase in current liabilities (49,714 ) 4,264 Other (2,954 ) 6,153 Net cash provided by operating activities 111,652 76,686 Investing Activities: Acquisitions, net of cash acquired (46,208 ) (503,736 ) Capital expenditures (13,377 ) (10,846 ) Investments related to HEICO Leadership Compensation Plan (12,710 ) (11,800 ) Other 1,156 402 Net cash used in investing activities (71,139 ) (525,980 ) Financing Activities: Borrowings on revolving credit facility, net 35,000 493,000 Payments on short-term debt, net (13,924 ) - Cash dividends paid (13,831 ) (13,668 ) Payment of contingent consideration (13,797 ) (3,710 ) Distributions to noncontrolling interests (8,766 ) (11,291 ) Acquisitions of noncontrolling interests (2,212 ) (2,733 ) Redemptions of common stock related to stock option exercises (601 ) (14,805 ) Proceeds from stock option exercises 2,254 2,845 Other (852 ) (463 ) Net cash (used in) provided by financing activities (16,729 ) 449,175 Effect of exchange rate changes on cash 1,491 3,234 Net increase in cash and cash equivalents 25,275 3,115 Cash and cash equivalents at beginning of year 171,048 139,504 Cash and cash equivalents at end of period $ 196,323 $ 142,619

HEICO CORPORATION
Non-GAAP Financial Measures (Unaudited)
(in thousands, except ratios)

Three Months Ended January 31, EBITDA Calculation 2024 2023 Net income attributable to HEICO $ 114,698 $ 93,027 Plus: Depreciation and amortization 43,505 27,060 Plus: Net income attributable to noncontrolling interests 10,784 9,978 Plus: Interest expense 38,607 6,068 Plus: Income tax expense 16,800 21,000 EBITDA (a) $ 224,394 $ 157,133 Trailing Twelve Months Ended EBITDA Calculation January 31, 2024 October 31, 2023 Net income attributable to HEICO $ 425,267 $ 403,596 Plus: Depreciation and amortization 146,488 130,043 Plus: Net income attributable to noncontrolling interests 41,593 40,787 Plus: Interest expense 105,523 72,984 Plus: Income tax expense 106,700 110,900 EBITDA (a) $ 825,571 $ 758,310 Net Debt Calculation January 31, 2024 October 31, 2023 Total debt $ 2,500,465 $ 2,478,078 Less: Cash and cash equivalents (196,323 ) (171,048 ) Net debt (a) $ 2,304,142 $ 2,307,030 Total debt $ 2,500,465 $ 2,478,078 Net income attributable to HEICO (trailing twelve months) $ 425,267 $ 403,596 Total debt to net income attributable to HEICO ratio 5.88 6.14 Net debt $ 2,304,142 $ 2,307,030 EBITDA (trailing twelve months) $ 825,571 $ 758,310 Net debt to EBITDA ratio (a) 2.79 3.04

(a) See the "Non-GAAP Financial Measures" section of this press release.

CONTACT:

Victor H. Mendelson (305) 374-1745 ext. 7590 
Carlos L. Macau, Jr. (954) 987-4000 ext. 7570

SOURCE: HEICO Corporation

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