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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 27, 2003
HEICO CORPORATION
(Exact name of registrant as specified in its charter)
FLORIDA 1-4604 65-0341002
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
3000 Taft Street, Hollywood, Florida 33021
(Address of principal executive offices) (Zip Code)
(954) 987-4000
(Registrant's Telephone Number, Including Area Code)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit 99.1 Press release dated August 27, 2003 titled "HEICO
Corporation Reports Improved Third Quarter Results."
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On August 27, 2003, HEICO Corporation issued a press release announcing its
financial results for the third fiscal quarter ended July 31, 2003. A copy of
the press release is attached hereto as Exhibit 99.1 and is intended to be
furnished under this Item 12.
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HEICO CORPORATION
-----------------
(Registrant)
Date: August 27, 2003 By: /s/ Thomas S. Irwin
---------------------------
Thomas S. Irwin
Executive Vice President
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
3
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
99.1 Press release dated August 27, 2003 titled "HEICO Corporation
Reports Improved Third Quarter Results."
4
Exhibit 99.1
FOR IMMEDIATE RELEASE
August 27, 2003
Thomas S. Irwin (954) 987-4000 ext. 7560
Victor H. Mendelson (305) 374-1745 ext. 7590
HEICO CORPORATION REPORTS IMPROVED THIRD QUARTER RESULTS
HOLLYWOOD, FL, and MIAMI, FL -- HEICO CORPORATION (NYSE: HEI and HEI.A), today
reported that net income for the third quarter of fiscal 2003 increased by 15%
to $3,240,000, or 15 cents per share, from $2,829,000, or 13 cents per share,
for the third quarter of fiscal 2002. Net sales for the third quarter of fiscal
2003 were up 7% to $45,412,000 from $42,587,000 in the third quarter of fiscal
2002.
For the first nine months of fiscal 2003, net income totaled $8,682,000, or 39
cents per share, on sales of $128,791,000. Net income for the first nine months
of fiscal 2002 was $9,627,000, or 43 cents per share, on sales of $126,600,000.
Net income for the first nine months of fiscal 2002 included $765,000, or 3
cents per share, from the after tax gain on the sale of a product line.
Cash flow from operating activities totaled $18.1 million for the first nine
months of fiscal 2003, up $3.5 million from the first nine months of fiscal
2002, and equaled approximately 200% of the Company's net income.
Operating income increased 23% to $6,101,000 in the third quarter of fiscal 2003
from $4,954,000 in the third quarter of fiscal 2002. The improvement in
operating income for the third quarter of fiscal 2003 was driven by higher sales
and earnings within the Company's Flight Support Group (FSG). For the first nine
months of fiscal 2003, operating income totaled $16,561,000 and approximated
operating income for the same period of the prior year of $16,719,000. Operating
income in the first nine months of fiscal 2003 principally reflects increased
earnings within the FSG, offset by lower earnings within the Company's
Electronic Technologies Group (ETG).
Sales within the FSG increased 10% to $32,742,000 in the third quarter of fiscal
2003 from $29,724,000 in the third quarter of fiscal 2002 reflecting increased
revenues principally related to sales of new products and services and some
recovery within the commercial aerospace industry. For the first nine months of
fiscal 2003, FSG sales increased 8% to $95,004,000 from $88,316,000 in the first
nine months of fiscal 2002, which is primarily attributable to new products and
services.
-more-
Operating income of the FSG in the third quarter of fiscal 2003 increased 34% to
$4,797,000 from $3,577,000 in the third quarter of fiscal 2002 and increased 23%
to $14,336,000 in the first nine months of fiscal 2003 from $11,683,000 in the
first nine months of fiscal 2002. These increases primarily reflect higher sales
and improved operating margins, which increased with the higher sales levels.
Sales and operating income within the ETG of $12,814,000 and $2,702,000,
respectively, for the third quarter of fiscal 2003 approximated sales and
operating income for the third quarter of fiscal 2002 of $12,970,000 and
$2,698,000, respectively. For the first nine months of fiscal 2003, sales and
operating income within the ETG were $34,102,000 and $5,374,000, respectively,
versus $38,734,000 and $8,789,000 in the first nine months of fiscal 2002. The
decreases for the nine-month period primarily resulted from lower foreign
military sales. In addition, operating margins were somewhat lower in the
nine-month period due to a less favorable product mix.
Laurans A. Mendelson, HEICO's Chairman, President & Chief Executive Officer,
remarked, "We are pleased to report continued improvements in sales and earnings
for our Flight Support Group in fiscal 2003 versus fiscal 2002. The increases in
the third quarter are a result of our continuing new product development efforts
and also reflect some recent recovery in commercial aviation, both domestically
and overseas. The commercial aerospace industry has recently been positively
affected by the end of military conflict in Iraq and the subsiding impact of
SARS.
"Our Electronic Technologies Group also reported an improved trend in sales and
operating income in the fiscal 2003 third quarter. Third quarter fiscal 2003
sales and operating income were up 14% and 42%, respectively, compared to the
second quarter of fiscal 2003. These increases reflect the shipments of some of
the products whose delivery was delayed in the first half of the year.
"In addition, our cash flow from operations remained strong at an annualized
rate in excess of $20 million, allowing us to reduce borrowings under our
revolving credit facility by another $4 million in the third quarter to an
aggregate reduction of $12 million since our last fiscal year end. July 2003
also marked another milestone for HEICO, when we paid our 50th consecutive
semi-annual cash dividend since 1979.
"Based on the recent uptick in the commercial aerospace industry and our
continued success in introducing our new products and services, we are now
targeting fiscal 2003 earnings at the high end of the previously reported range
of 50 to 55 cents per share on sales growth of 2% to 3% over our fiscal 2002
sales."
As previously announced, HEICO will hold a conference call on Thursday, August
28, 2003 at 8:30 a.m. Eastern time to discuss its third quarter results.
Individuals wishing to participate in the conference call should dial:
U.S./Canada/International/Local 302-709-8328, wait for the conference operator
and provide the operator with the "Verbal" Passcode/Conference ID 7004021. A
digital replay will be available one hour after the completion of the conference
for 14 days. To access, dial: U.S./Canada/International/Local 402-220-2946 and
enter Passcode/Conference ID 7004021#.
-more-
HEICO Corporation is engaged primarily in certain niche segments of the
aerospace, defense and electronics industries through its Hollywood, FL-based
HEICO Aerospace Holdings Corp. subsidiary and its Miami, FL-based HEICO
Electronic Technologies Corp. subsidiary. HEICO's customers include a majority
of the world's airlines and airmotives as well as numerous defense contractors
and military agencies worldwide in addition to communications, electronics and
medical equipment manufacturers. For more information about HEICO, please visit
our web site at http://www.heico.com.
The stock symbols for HEICO's two classes of common stock on most web sites are
HEI and HEI.A. However, some web sites change HEICO's Class A Common Stock stock
symbol (HEI.A) to HEI/A or HEIa.
Certain statements in this press release constitute forward-looking statements
which may involve risks and uncertainties. HEICO's actual experience may differ
materially from that discussed 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 our costs to complete contracts to
increase; governmental and regulatory demands, export policies and restrictions,
military program funding by U.S. and non-U.S. Government agencies or competition
on military programs, which could reduce our sales; HEICO's ability to introduce
new products and product pricing levels, which could reduce our sales or sales
growth; HEICO's ability to make acquisitions and achieve operating synergies
from acquired businesses, customer credit risk, interest rates and economic
conditions within and outside of the aerospace, defense 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
Forms 10-K, Forms 10-Q and Forms 8-K. We undertake no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
-more-
HEICO CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended July 31,
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2003 2002
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Net sales $ 45,412,000 $ 42,587,000
Cost of sales 30,276,000 27,651,000
Selling, general and administrative expenses 9,035,000 9,982,000
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Operating income 6,101,000 4,954,000
Interest expense (307,000) (473,000)
Interest and other income 17,000 12,000
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Income before income taxes and minority interests 5,811,000 4,493,000
Income tax expense 2,107,000 1,472,000
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Income before minority interests 3,704,000 3,021,000
Minority interests in consolidated subsidiaries 464,000 192,000
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Net income $ 3,240,000 $ 2,829,000
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Net income per share:
Basic $ .15 $ .14
Diluted $ .15 $ .13
Weighted average number of common shares outstanding:
Basic 21,122,443 20,944,797
Diluted 22,239,765 22,532,844
Three Months Ended July 31,
--------------------------------
2003 2002
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Operating segment information:-
Net sales:
Flight Support Group $ 32,742,000 $ 29,724,000
Electronic Technologies Group 12,814,000 12,970,000
Intersegment sales (144,000) (107,000)
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$ 45,412,000 $ 42,587,000
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Operating income:
Flight Support Group $ 4,797,000 $ 3,577,000
Electronic Technologies Group 2,702,000 2,698,000
Other, primarily corporate (1,398,000) (1,321,000)
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$ 6,101,000 $ 4,954,000
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-more-
HEICO CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
Nine Months Ended July 31,
--------------------------------
2003 2002
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Net sales $ 128,791,000 $ 126,600,000
Cost of sales 85,978,000 81,455,000
Selling, general and administrative expenses 26,252,000 28,426,000
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Operating income 16,561,000 16,719,000
Interest expense (937,000) (1,735,000)
Interest and other income 106,000 104,000
Gain on sale of product line - 1,230,000
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Income before income taxes and minority interests 15,730,000 16,318,000
Income tax expense 5,605,000 5,672,000
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Income before minority interests 10,125,000 10,646,000
Minority interests in consolidated subsidiaries 1,443,000 1,019,000
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Net income $ 8,682,000 $ 9,627,000
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Net income per share:
Basic $ .41 $ .46
Diluted $ .39 $ .43
Weighted average number of common shares outstanding:
Basic 21,042,765 20,890,792
Diluted 22,190,241 22,575,196
Nine Months Ended July 31,
--------------------------------
2003 2002
-------------- --------------
Operating segment information:-
Net sales:
Flight Support Group $ 95,004,000 $ 88,316,000
Electronic Technologies Group 34,102,000 38,734,000
Intersegment sales (315,000) (450,000)
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$ 128,791,000 $ 126,600,000
============== ==============
Operating income:
Flight Support Group $ 14,336,000 $ 11,683,000
Electronic Technologies Group 5,374,000 8,789,000
Other, primarily corporate (3,149,000) (3,753,000)
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$ 16,561,000 $ 16,719,000
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-more-
HEICO CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
July 31, 2003 October 31, 2002 /(1)/
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Cash and cash equivalents $ 4,735,000 $ 4,539,000
Accounts receivable, net 27,319,000 28,407,000
Inventories 53,687,000 54,514,000
Prepaid expenses and other current assets 10,766,000 11,106,000
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Total current assets 96,507,000 98,566,000
Property, plant and equipment, net 40,145,000 40,059,000
Goodwill, net 188,677,000 187,677,000
Other assets 10,316,000 10,030,000
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Total assets $ 335,645,000 $ 336,332,000
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Current maturities of long-term debt $ 34,000 $ 6,756,000
Other current liabilities 20,903,000 22,575,000
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Total current liabilities 20,937,000 29,331,000
Long-term debt, net of current maturities 43,985,000 49,230,000
Other non-current liabilities 15,300,000 12,394,000
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Total liabilities 80,222,000 90,955,000
Minority interests in consolidated subsidiaries 39,966,000 38,313,000
Shareholders' equity 215,457,000 207,064,000
------------------- ----------------------
Total liabilities and shareholders' equity $ 335,645,000 $ 336,332,000
=================== ======================
(1) Certain amounts in the prior year's financial statements have been
reclassified to conform to the current year presentation.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended July 31,
--------------------------------
2003 2002
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Cash flows from operating activities:
Net income $ 8,682,000 $ 9,627,000
Depreciation and amortization 3,754,000 3,345,000
Gain on sale of product line - (1,230,000)
Decrease in accounts receivable 1,400,000 6,607,000
Decrease (increase) in inventories 1,258,000 (4,434,000)
Increase (decrease) in income taxes payable 545,000 (564,000)
Other 2,472,000 1,252,000
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Net cash provided by operating activities 18,111,000 14,603,000
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Cash flows from investing activities:
Capital expenditures (3,137,000) (5,031,000)
Acquisitions and related costs, net of cash acquired (1,530,000) (5,770,000)
Other 197,000 839,000
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Net cash used in investing activities (4,470,000) (9,962,000)
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Cash flows from financing activities:
Payments on revolving credit facilities, net (12,000,000) (3,000,000)
Other (1,445,000) (634,000)
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Net cash flows used in financing activities (13,445,000) (3,634,000)
-------------- --------------
Net increase in cash and cash equivalents 196,000 1,007,000
Cash and cash equivalents at beginning of year 4,539,000 4,333,000
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Cash and cash equivalents at end of period $ 4,735,000 $ 5,340,000
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