HOLLYWOOD, Fla. and MIAMI, Dec. 13, 2016 (GLOBE NEWSWIRE) -- HEICO CORPORATION (NYSE:HEI.A) (NYSE:HEI) today reported that net income increased 17% to a record $156.2 million, or $2.29 per diluted share, in the fiscal year ended October 31, 2016, up from $133.4 million, or $1.97 per diluted share, in the fiscal year ended October 31, 2015.  Net income increased 16% to a record $44.3 million, or 65 cents per diluted share, in the fourth quarter of fiscal 2016, up from $38.3 million, or 56 cents per diluted share, in the fourth quarter of fiscal 2015.

Net sales increased 16% to a record $1,376.3 million in the fiscal year ended October 31, 2016, up from $1,188.6 million in the fiscal year ended October 31, 2015.  Net sales increased 11% to a record $363.3 million in the fourth quarter of fiscal 2016, up from $328.7 million in the fourth quarter of fiscal 2015.

Operating income increased 16% to a record $265.3 million in the fiscal year ended October 31, 2016, up from $229.7 million in the fiscal year ended October 31, 2015 and increased 10% to a record $76.1 million in the fourth quarter of fiscal 2016, up from $69.0 million in the fourth quarter of fiscal 2015.

The Company's consolidated operating margin was 19.3% in both the fiscal year ended October 31, 2016 and 2015.  The Company's consolidated operating margin was 20.9% and 21.0% in the fourth quarter of fiscal 2016 and 2015, respectively.

Consolidated Results

Laurans A. Mendelson, HEICO’s Chairman and CEO, commented on the Company's full fiscal year and fourth quarter results stating, "Our record full year and fourth quarter of fiscal 2016 results in consolidated net sales, operating income and net income reflect the impact of our profitable fiscal 2016 and 2015 acquisitions, as well as continued increased demand for the majority of HEICO's products.

Cash flow provided by operating activities was very strong, increasing 44% to a record $249.2 million in the fiscal year ended October 31, 2016, representing 160% of net income, as compared to $172.9 million in the fiscal year ended October 31, 2015.

Our net debt to shareholders' equity ratio was 39.6% as of October 31, 2016, with net debt (total debt less cash and cash equivalents) of $415.3 million principally incurred to fund acquisitions in fiscal 2016 and 2015.  We have no significant debt maturities until fiscal 2019 and plan to utilize our financial flexibility to aggressively pursue high quality acquisition opportunities to accelerate growth and maximize shareholder returns.

Based on our continued strong cash flows from operations, the Board of Directors declared a 13% increase in our regular semi-annual cash dividend to 9 cents per share payable on January 18, 2017.  By declaring and raising the semi-annual cash dividend, our Board of Directors' goal is to confirm its confidence in HEICO's consistent growth strategies and to continue to reward our shareholders, while retaining sufficient capital to fund our internal growth objectives and acquisition strategies.  Additionally, given the strength in HEICO’s share prices and the Company’s history of stock splits and dividends, the Board of Directors intends to consider a stock split or stock dividend at its next regular meeting on March 17, 2017.  Historically, we have declared 14 stock splits or stock dividends since 1995.

Considering the impact of cash dividends, prior stock splits and stock dividends, one share of HEI worth $8.38 in 1990 has become worth on a combined basis approximately $1,417, representing an increase of approximately 169 times the 1990 value and a compound annual growth rate of approximately 22%.

As we look ahead to fiscal 2017, we anticipate net sales growth within the Flight Support Group's commercial aviation and defense product lines.  We also expect growth within the Electronic Technologies Group, principally driven by demand for the majority of our products.  During fiscal 2017, we will continue our commitments to developing new products and services, further market penetration, and an aggressive acquisition strategy while maintaining our financial strength and flexibility.

Based on our current economic visibility, we are estimating 5% - 7% growth in full year net sales and 7% - 10% growth in full year net income over fiscal 2016 levels.  In addition, we anticipate our fiscal year 2017 consolidated operating margin to approximate 19% - 20%, depreciation and amortization expense of approximately $63 million, capital expenditures to approximate $38 million and cash flow from operations to approximate $255 million.  These estimates exclude additional acquired businesses, if any."

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 fourth quarter and full fiscal year results stating, "The Flight Support Group's record fourth quarter and full fiscal year results are highlighted by record net sales and operating income, principally reflecting the impact from our fiscal 2015 acquisitions and continued stable growth and demand within our aftermarket replacement parts and specialty products product lines.  The Flight Support Group's net sales increased 5% to a record $228.5 million in the fourth quarter of fiscal 2016, up from $218.3 million in the fourth quarter of fiscal 2015.  The Flight Support Group's net sales increased 8% to a record $875.9 million in the fiscal year ended October 31, 2016, up from $809.7 million in the fiscal year ended October 31, 2015.  The increase in the fourth quarter and fiscal year ended October 31, 2016 reflects net sales contributed by our fiscal 2015 acquisitions as well as organic growth of 4% and 3%, respectively.  The organic growth in the fourth quarter and fiscal year ended October 31, 2016 is principally attributed to increased demand and new product offerings within our aftermarket replacement parts and specialty products product lines.

The net sales increase in the fourth quarter and fiscal year ended October 31, 2016 was partially offset by lower organic net sales from our repair and overhaul parts and services product line, principally resulting from the mix of products repaired, which required less extensive repair and overhaul services, as well as softer demand from our South American market.  The Flight Support Group experienced organic revenue growth of 6% in both the fourth quarter and fiscal year ended October 31, 2016, excluding our repair and overhaul parts and services product line.

The Flight Support Group's operating income increased 6% to a record $44.7 million in the fourth quarter of fiscal 2016, up from $42.3 million in the fourth quarter of fiscal 2015.  The increase principally reflects the previously mentioned net sales growth.

The Flight Support Group's operating margin improved to 19.6% in the fourth quarter of fiscal 2016, up from 19.4% in the fourth quarter of fiscal 2015.  The increase principally reflects a decrease in certain selling, general and administrative expenses as a percentage of net sales, partially offset by a gross profit margin impact mainly from the previously mentioned decrease in net sales within our repair and overhaul services product line.

The Flight Support Group's operating income increased 9% to a record $163.4 million in the fiscal year ended October 31, 2016, up from $149.8 million in the fiscal year ended October 31, 2015.  The increase principally reflects the previously mentioned net sales growth and a gross profit margin impact mainly from favorable net sales volumes and product mix within our aftermarket replacement parts and specialty products product lines.  These increases were partially offset by higher performance-based compensation expense, changes in the estimated fair value of accrued contingent consideration associated with a prior year acquisition and an increase in intangible assets amortization expense.

The Flight Support Group's operating margin improved to 18.7% in the fiscal year ended October 31, 2016, up from 18.5% in the fiscal year ended October 31, 2015.  The increase principally reflects the previously mentioned gross profit margin impact partially offset by higher performance-based compensation expense, changes in the estimated fair value of accrued contingent consideration associated with a prior year acquisition and an increase in intangible assets amortization expense.

With respect to fiscal 2017, we are estimating mid-single digit growth in the Flight Support Group's net sales over fiscal 2016 levels and the full year Flight Support Group operating margin to approximate 19.0% - 19.5%.  These estimates exclude additional acquired businesses, if any."

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 fourth quarter and full fiscal year results stating, "The Electronic Technologies Group's fourth quarter and full fiscal year results are highlighted by record net sales and operating income, principally reflecting the impact from our profitable fiscal 2016 and 2015 acquisitions as well as increased customer demand for certain products. 

The Electronic Technologies Group's net sales increased 22% to a record $138.3 million in the fourth quarter of fiscal 2016, up from $113.5 million in the fourth quarter of fiscal 2015.  The Electronic Technologies Group's net sales increased 31% to a record $511.3 million in the fiscal year ended October 31, 2016, up from $391.0 million in the fiscal year ended October 31, 2015.  The increase in the fourth quarter and fiscal year ended October 31, 2016 mainly reflects the net sales contributed by our fiscal 2016 and 2015 acquisitions.  Further, the increase in net sales in the fiscal year ended October 31, 2016 reflects organic growth of 4%, mainly resulting from higher net sales of certain space and medical products.  Additionally, our record fiscal 2016 fourth quarter results were moderated by a decrease in demand for certain defense products.

The Electronic Technologies Group's operating income increased 12% to a record $36.8 million in the fourth quarter of fiscal 2016, up from $32.8 million in the fourth quarter of fiscal 2015.  The increase principally reflects the previously mentioned net sales growth partially offset by a gross profit margin impact mainly driven by a less favorable product mix for certain space products and an increase in intangible assets amortization expense.

The Electronic Technologies Group’s operating margin was 26.6% and 28.9% in the fourth quarter of fiscal 2016 and 2015, respectively.  The decrease principally reflects the previously mentioned decrease in gross profit margin and the increase in intangible assets amortization expense.

The Electronic Technologies Group's operating income increased 28% to a record $126.0 million in the fiscal year ended October 31, 2016, up from $98.8 million in the fiscal year ended October 31, 2015.  The increase principally reflects the previously mentioned net sales growth, partially offset by an increase in intangible assets amortization expense.

The Electronic Technologies Group’s operating margin was 24.7% and 25.3% in the fiscal year ended October 31, 2016 and 2015, respectively.  The decrease principally reflects the previously mentioned increase in intangible assets amortization expense.

With respect to fiscal 2017, we are estimating mid to high-single digit growth in the Electronic Technologies Group's net sales over fiscal 2016 levels, and the full year Electronic Technologies Group's operating margin to approximate 24%.  These estimates exclude additional acquired businesses, if any."

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

There are currently approximately 40.3 million shares of HEICO's Class A Common Stock (HEI.A) outstanding and 27.0 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 Wednesday, December 14, 2016 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 21020742.  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 21020742.

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 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: lower demand for commercial air travel or 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 costs and delay sales; our ability to make acquisitions and achieve operating synergies from acquired businesses; customer credit risk; interest, foreign currency exchange and income tax rates; economic conditions within and outside of the aviation, defense, space, medical, telecommunications and electronics industries, which could negatively impact our costs and revenues; and defense budget cuts, which could reduce our defense-related revenue.  There can be no assurance that a stock split or stock dividend will be declared.  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,
 2016
 2015
Net sales$363,299  $328,672 
Cost of sales 227,615   201,876 
Selling, general and administrative expenses 59,608   57,844 
Operating income 76,076   68,952 
Interest expense (2,078)  (1,280)
Other expense (177)  (441)
Income before income taxes and noncontrolling interests 73,821   67,231 
Income tax expense 24,300   23,200 
Net income from consolidated operations 49,521   44,031 
Less: Net income attributable to noncontrolling interests 5,259   5,781 
Net income attributable to HEICO$44,262  $38,250 
    
Net income per share attributable to HEICO shareholders:   
Basic$.66  $.57 
Diluted$.65  $.56 
    
Weighted average number of common shares outstanding:   
Basic 67,257   66,840 
Diluted 68,435   67,875 
    
 Three Months Ended October 31,
 2016
 2015
Operating segment information:   
Net sales:   
Flight Support Group$228,451  $218,269 
Electronic Technologies Group 138,339   113,543 
Intersegment sales (3,491)  (3,140)
 $363,299  $328,672 
    
Operating income:   
Flight Support Group$44,670  $42,300 
Electronic Technologies Group 36,751   32,837 
Other, primarily corporate (5,345)  (6,185)
 $76,076  $68,952 
        


HEICO CORPORATION
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
  
 Fiscal Year Ended October 31,
 2016
 2015
Net sales$1,376,258  $1,188,648 
Cost of sales 860,766   754,469 
Selling, general and administrative expenses 250,147   204,523 
Operating income 265,345 (a)  229,656 
Interest expense (8,272)  (4,626)
Other expense (23)  (66)
Income before income taxes and noncontrolling interests 257,050   224,964 
Income tax expense 80,900   71,400 
Net income from consolidated operations 176,150   153,564 
Less: Net income attributable to noncontrolling interests 19,958   20,200 
Net income attributable to HEICO$156,192 (a) $133,364 
    
Net income per share attributable to HEICO shareholders:   
Basic$2.33(a) $2.00
Diluted$2.29(a) $1.97
    
Weighted average number of common shares outstanding:   
Basic 67,045   66,740 
Diluted 68,170   67,811 
    
 Fiscal Year Ended October 31,
 2016
 2015
Operating segment information:   
Net sales:   
Flight Support Group$875,870  $809,700 
Electronic Technologies Group 511,272   390,982 
Intersegment sales (10,884)  (12,034)
 $1,376,258  $1,188,648 
    
Operating income:   
Flight Support Group$163,427  $149,798 
Electronic Technologies Group 126,031   98,833 
Other, primarily corporate (24,113)  (18,975)
 $265,345  $229,656 
        

HEICO CORPORATION
Footnotes to Condensed Consolidated Statements of Operations (Unaudited)
                                   

(a) During the first quarter of fiscal 2016, the Company incurred $3.1 million of acquisition costs in connection with a fiscal 2016 acquisition.  These are one-time nonrecurring costs.  These expenses, net of tax, decreased net income attributable to HEICO by $2.0 million, or $.03 per basic and diluted share.

 
HEICO CORPORATION
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands)
    
 October 31, 2016 October 31, 2015
Cash and cash equivalents$42,955  $33,603 
Accounts receivable, net 202,227   181,593 
Inventories, net 286,302   243,517 
Prepaid expenses and other current assets 52,737   44,899 
Total current assets 584,221   503,612 
Property, plant and equipment, net 121,611   105,670 
Goodwill 865,717   766,639 
Intangible assets, net 366,863   272,593 
Other assets 101,063   87,873 
Total assets$2,039,475  $1,736,387 
    
Current maturities of long-term debt$411  $357 
Other current liabilities 214,010   168,030 
Total current liabilities 214,421   168,387 
Long-term debt, net of current maturities 457,814   367,241 
Deferred income taxes 105,962   110,588 
Other long-term liabilities 114,061   105,618 
Total liabilities 892,258   751,834 
Redeemable noncontrolling interests 99,512   91,282 
Shareholders’ equity 1,047,705   893,271 
Total liabilities and equity$2,039,475  $1,736,387 
        


HEICO CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
  
 Fiscal Year Ended October 31,
 2016
 2015
Operating Activities:   
Net income from consolidated operations$176,150  $153,564 
Depreciation and amortization 60,277   47,907 
Employer contributions to HEICO Savings and Investment Plan 7,020   6,125 
Share-based compensation expense 6,434   6,048 
Increase in accrued contingent consideration, net 3,063   293 
Foreign currency transaction adjustments, net 13   (3,704)
Deferred income tax benefit (9,194)  (7,080)
Tax benefit from stock option exercises 868   1,402 
Excess tax benefit from stock option exercises (881)  (1,402)
Payment of contingent consideration (631)   
Increase in accounts receivable (15,955)  (22,572)
Increase in inventories (14,421)  (10,187)
Increase in current liabilities 40,796   2,659 
Other (4,355)  (190)
Net cash provided by operating activities 249,184   172,863 
    
Investing Activities:   
Acquisitions, net of cash acquired (263,811)  (166,784)
Capital expenditures (30,863)  (18,249)
Other (2,942)  (973)
Net cash used in investing activities (297,616)  (186,006)
    
Financing Activities:   
Borrowings on revolving credit facility, net 90,000   41,696 
Distributions to noncontrolling interests (19,017)  (9,699)
Cash dividends paid (10,724)  (9,343)
Payment of contingent consideration (6,329)   
Acquisitions of noncontrolling interests (3,599)   
Proceeds from stock option exercises 5,924   3,673 
Excess tax benefit from stock option exercises 881   1,402 
Other (364)  (393)
Net cash provided by financing activities 56,772   27,336 
    
Effect of exchange rate changes on cash 1,012   (819)
    
Net increase in cash and cash equivalents 9,352   13,374 
Cash and cash equivalents at beginning of year 33,603   20,229 
Cash and cash equivalents at end of year$42,955  $33,603 
        


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