UNITED STATES
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) December 17, 2009
HEICO Corporation
(Exact name of registrant as specified in its charter)
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Florida |
1-4604 |
65-0341002 |
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(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
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3000 Taft Street, Hollywood, Florida |
33021 |
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| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (954) 987-4000
________________________________________________________________________________
(Former name or former address, if changed since last report)
| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | ||
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Item 2.02. Results of Operations and Financial Condition.
On December 17, 2009 the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
Exhibit 99.1. Press release dated December 17, 2009
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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HEICO Corporation
(Registrant) |
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December 17, 2009
(Date) |
/s/ THOMAS S. IRWIN
Thomas S. Irwin Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |
| Exhibit Index | ||
| 99.1 | Press release dated December 17, 2009 | |
EXHIBIT 99.1
HEICO Corporation Reports Fiscal 2009 Fourth Quarter and Full Year Results
4th Quarter Net Sales, Operating Income and Net Income Improve Over Prior Fiscal 2009 Quarterly Levels; Company Targets Growth in Fiscal 2010 Sales and Earnings
HOLLYWOOD, Fla. and MIAMI, Dec. 17, 2009 (GLOBE NEWSWIRE) -- HEICO Corporation (NYSE:HEI-A) (NYSE:HEI) today reported net income of $11,636,000, or 43 cents per diluted share, for the fourth quarter of fiscal 2009, compared to $13,650,000, or 50 cents per diluted share, for the fourth quarter of fiscal 2008 and up from $11,132,000, or 41 cents per diluted share, in the third quarter of fiscal 2009. For the fiscal year ended October 31, 2009, net income was $44,626,000, or $1.65 per diluted share, compared to the $48,511,000, or $1.78 per diluted share, reported for the fiscal year end ed October 31, 2008.
Operating income totaled $24,061,000 in the fourth quarter of fiscal 2009, compared to $28,710,000 in the fourth quarter of fiscal 2008 and up from $21,422,000 in the third quarter of fiscal 2009. For the fiscal year ended October 31, 2009, operating income was $88,255,000 compared to $105,788,000 for the fiscal year ended October 31, 2008. Our consolidated operating margin was 16.8% for the fourth quarter of fiscal 2009, compared to 18.3% in the fourth quarter of fiscal 2008 and up from 16.0% in the third quarter of fiscal 2009, and was 16.4% for the fiscal year ended October 31, 2009, compared to 18.2% for the fiscal year ended October 31, 2008.
Net sales totaled $143,607,000 in the fourth quarter of fiscal 2009, compared to $156,716,000 in the fourth quarter of fiscal 2008 and up from $134,086,000 in the third quarter of fiscal 2009. For the fiscal year ended October 31, 2009, net sales totaled $538,296,000 compared to $582,347,000 for the fiscal year ended October 31, 2008.
(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.)
Laurans A. Mendelson, HEICO's Chairman, President and CEO, commenting on the Company's fourth quarter results stated, "We are extremely pleased to see our net sales, operating income and net income improve in the fourth quarter compared to our reported results for each of the first three quarters of fiscal 2009. We are starting to see some early signs that the impacts of the global recession may be moderating.
"Our Flight Support Group reported net sales of $97.9 million and $395.4 million, respectively, for the fourth quarter and fiscal year ended October 31, 2009, compared to $116.5 million and $436.8 million, respectively, for the fourth quarter and fiscal year ended October 31, 2008. Fiscal 2009 fourth quarter net sales were comparable to the $97.2 million reported in the third quarter of fiscal 2009. Demand for our Flight Support Group products and services continued to be pressured by airline capacity reductions and short-term maintenance deferrals.
"Operating margins of the Flight Support Group were 14.0% and 15.2%, respectively, for the fourth quarter and fiscal year ended October 31, 2009, compared to 18.4% and 18.6%, respectively, for the fourth quarter and fiscal year ended October 31, 2008. The decreases reflect the impact of lower sales volume and variations in product mix. Operating income of the Flight Support Group totaled $13.7 million and $60.0 million, respectively, for the fourth quarter and fiscal year ended October 31, 2009, compared to $21.5 million and $81.2 million, respectively, for the fourth quarter and fiscal year ended October 31, 2008 reflecting the lower sales and operating margins.
"Net sales of our Electronic Technologies Group increased 14% to a record $45.8 million for the fourth quarter of fiscal 2009, up from $40.3 million for the fourth quarter of fiscal 2008, and decreased slightly to $143.4 million for the fiscal year ended October 31, 2009 from $146.0 million for the fiscal year ended October 31, 2008.
"Our Electronic Technologies Group reported record operating income for the fourth quarter and fiscal year ended October 31, 2009, with increases of 22% and 3%, respectively, over fiscal 2008. Operating income of our Electronic Technologies Group increased to $13.5 million for the fourth quarter of fiscal 2009, up from $11.0 million for the fourth quarter of fiscal 2008, and increased to $40.0 million for the fiscal year ended October 31, 2009, up from $38.8 million for the fiscal year ended October 31, 2008.
"Net sales and operating income of our Electronic Technologies Group benefited from a mid-year acquisition and from some strength in our space and defense related businesses. Strength in these markets was partially offset by reduced customer demand for certain of our medical, telecommunication and electronic products reflecting the effects of the global economic recession.
"Operating margins of the Electronic Technologies Group grew to a strong 29.4% and 27.9%, respectively, for the fourth quarter and fiscal year ended October 31, 2009, up from 27.4% and 26.6% reported for the fourth quarter and fiscal year ended October 31, 2008, reflecting favorable variations in product mix.
"Cash flow from operating activities for the fiscal year ended October 31, 2009 totaled $75.8 million, representing 170% of net income and including $32.1 million generated in the fourth quarter of fiscal 2009, compared to $73.2 million for the fiscal year ended October 31, 2008. Capital expenditures were $10.3 million in fiscal 2009, in line with previous expectations.
"Our cash flow and balance sheet remain extremely strong. As of October 31, 2009, the Company's net debt to equity ratio was a low 11%, with net debt (total debt less cash and cash equivalents) of $48.3 million. We have no significant debt maturities until fiscal 2013.
"Our strong cash flow and balance sheet will continue to allow us to take advantage of acquisition opportunities if they arise.
"As we look forward to fiscal 2010, we expect continued softness during the first half of calendar 2010 in our commercial aviation markets, which represents approximately 68% of our sales. While the consensus opinion within the industry expects a recovery within the airline industry in 2010, the strength and exact timing of such a recovery is uncertain at this time.
"Based on this and conditions within our other major markets, we are targeting fiscal 2010 growth of 5 - 8% in net sales and earnings, or within a range of $565 - $580 million for net sales and $1.74 - $1.79 for net income per diluted share with consolidated operating margins for the full year improving to approximately 17%. These targets exclude the impact of any potential acquisition opportunities and could increase with a stronger or more rapid recovery in the airline industry.
"Fiscal 2010 cash flow provided by operating activities is expected to remain strong and to approximate $75 - $80 million. Capital expenditures in fiscal 2010 are anticipated to approximate $12 - $15 million.
"We continue to believe our focus on intermediate and long-term growth with an emphasis on the development of new products and services to meet the needs of our customers is a solid foundation to best reward HEICO and its shareholders and to provide the best opportunity for sustainable growth."
As previously announced, HEICO will hold a conference call on Friday, December 18, 2009 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. (888) 299-4099, Canada (800) 796-9248, and International (302) 709-8352, wait for the conference operator and provide the operator with the "Verbal" Passcode/Conference ID VM62337 (or "8662337"). A digital replay will be available two hours after the completion of the conference for 14 days. To access, dial: (402) 220-2946, and enter the Playback Passcode/Conference ID 62337#.
There are currently approximately 15.7 million shares of HEICO's Class A Common Stock (HEI.A) outstanding and 10.4 million shares of HEICO's Common Stock (HEI) outstanding. The stock symbols for HEICO's two classes of common stock on most web sites are HEI.A and HEI. However, some web sites change HEICO's Class A Common Stock trading symbol (HEI.A) to HEI/A or HEIa.
HEICO Corporation is engaged primarily in certain niche segments of the aviation, defense, space 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 and space contractors and military agencies worldwide in addition to medical, telecommunication and electronic equipment manufacturers. For more information about HEICO, please visit our web site 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; 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 aviation, defense, space, medical, telecommunication and electronic industries, which could negatively impact our costs and revenues; and HEICO's ability to maintain effective internal controls, which could adversely affect our business and the market price of our common stock. 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.
HEICO CORPORATION
Condensed Consolidated Statements of Operations (Unaudited)
Fiscal year ended October 31,
-------------------------------
2009 2008
-------------- --------------
Net sales $538,296,000 $582,347,000
Cost of sales 357,285,000 371,852,000
Selling, general and
administrative expenses 92,756,000 104,707,000
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Operating income 88,255,000 105,788,000
Interest expense (615,000) (2,314,000)
Other income (expense) 205,000 (637,000)
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Income before income taxes and
minority interests 87,845,000 102,837,000
Income tax expense 28,000,000 35,450,000
-------------- --------------
Income before minority interests 59,845,000 67,387,000
Minority interests' share of
income 15,219,000 18,876,000
-------------- --------------
Net income $44,626,000 (a) $48,511,000 (b)
============== ==============
Net income per share:
Basic $1.70 $1.84
Diluted $1.65 $1.78
Weighted average number of common
shares outstanding:
Basic 26,204,799 26,309,139
Diluted 27,024,031 27,243,356
Fiscal year ended October 31,
-------------------------------
2009 2008
-------------- --------------
Operating segment information: -
Net sales:
Flight Support Group $395,423,000 $436,810,000
Electronic Technologies Group 143,372,000 146,044,000
Intersegment sales (499,000) (507,000)
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$538,296,000 $582,347,000
============== ==============
Operating income:
Flight Support Group $60,003,000 $81,184,000
Electronic Technologies Group 39,981,000 38,775,000
Other, primarily corporate (11,729,000) (14,171,000)
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$88,255,000 $105,788,000
============== ==============
HEICO CORPORATION
Condensed Consolidated Statements of Operations (Unaudited)
Three months ended October 31,
-------------------------------
2009 2008
-------------- --------------
Net sales $143,607,000 $156,716,000
Cost of sales 94,829,000 99,257,000
Selling, general and
administrative expenses 24,717,000 28,749,000
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Operating income 24,061,000 28,710,000
Interest expense (131,000) (363,000)
Other income (expense) 19,000 (419,000)
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Income before income taxes and
minority interests 23,949,000 27,928,000
Income tax expense 8,669,000 9,410,000
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Income before minority interests 15,280,000 18,518,000
Minority interests' share of
income 3,644,000 4,868,000
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Net income $11,636,000 $13,650,000
============== ==============
Net income per share:
Basic $.45 $.52
Diluted $.43 $.50
Weighted average number of common
shares outstanding:
Basic 26,101,350 26,395,921
Diluted 26,935,366 27,246,666
Three months ended October 31,
-------------------------------
2009 2008
-------------- --------------
Operating segment information: -
Net sales:
Flight Support Group $97,880,000 $116,524,000
Electronic Technologies Group 45,849,000 40,347,000
Intersegment sales (122,000) (155,000)
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$143,607,000 $156,716,000
============== ==============
Operating income:
Flight Support Group $13,706,000 $21,461,000
Electronic Technologies Group 13,473,000 11,044,000
Other, primarily corporate (3,118,000) (3,795,000)
-------------- --------------
$24,061,000 $28,710,000
============== ==============
HEICO CORPORATION
Footnote to Condensed Consolidated Statements of Operations
(Unaudited)
----------------------
(a) Fiscal 2009 net income reflects a settlement reached with the
Internal Revenue Service in the first quarter of fiscal 2009
concerning the income tax credit claimed by the Company on its
U.S. federal filings for qualified research and development
activities incurred during fiscal years 2002 through 2005 as well
as an aggregate reduction to the related reserve for fiscal years
2006 through 2008, which increased net income by approximately
$1,225,000, or $.05 per diluted share.
(b) Fiscal 2008 net income reflects impairment charges related to the
valuation of certain intangible assets within the Electronic
Technologies Group, which in aggregate decreased net income by
$1,140,000, or $.04 per diluted share.
HEICO CORPORATION
Condensed Consolidated Balance Sheets (Unaudited)
As of October 31,
-------------------------------
2009 2008
-------------- --------------
Cash and cash equivalents $7,167,000 $12,562,000
Accounts receivable, net 77,864,000 88,403,000
Inventories, net 137,585,000 132,910,000
Prepaid expenses and other current
assets 20,961,000 17,635,000
-------------- --------------
Total current assets 243,577,000 251,510,000
Property, plant and equipment, net 60,528,000 59,966,000
Goodwill 365,243,000 323,393,000
Other assets 63,562,000 41,673,000
-------------- --------------
Total assets $732,910,000 $676,542,000
============== ==============
Current maturities of long-term
debt $237,000 $220,000
Other current liabilities 65,276,000 81,008,000
-------------- --------------
Total current liabilities 65,513,000 81,228,000
Long-term debt, net of current
maturities 55,194,000 37,381,000
Deferred income taxes 41,340,000 39,192,000
Other long-term liabilities 23,268,000 17,003,000
-------------- --------------
Total liabilities 185,315,000 174,804,000
Minority interests in consolidated
subsidiaries 89,742,000 83,978,000
Shareholders' equity 457,853,000 417,760,000
-------------- --------------
Total liabilities and
shareholders' equity $732,910,000 $676,542,000
============== ==============
HEICO CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
Fiscal year ended October 31,
-------------------------------
2009 2008
-------------- --------------
Operating Activities:
Net income $44,626,000 $48,511,000
Depreciation and amortization 14,967,000 15,052,000
Impairment of intangible assets 300,000 1,835,000
Deferred income tax (benefit)
provision (2,651,000) 3,617,000
Minority interests' share of
income 15,219,000 18,876,000
Tax benefit from stock option
exercises 1,890,000 6,248,000
Excess tax benefit from stock
option exercises (1,573,000) (4,324,000)
Stock option compensation expense 181,000 142,000
Decrease (increase) in accounts
receivable 15,214,000 (4,749,000)
Increase in inventories (87,000) (16,597,000)
(Decrease) increase in current
liabilities (17,851,000) 3,571,000
Other 5,582,000 980,000
-------------- --------------
Net cash provided by operating
activities 75,817,000 73,162,000
-------------- --------------
Investing Activities:
Acquisitions and related costs,
net of cash acquired (71,066,000) (29,038,000)
Capital expenditures (10,253,000) (13,455,000)
Other 20,000 166,000
-------------- --------------
Net cash used in investing
activities (81,299,000) (42,327,000)
-------------- --------------
Financing Activities:
Borrowings (payments) on
revolving credit facility, net 18,000,000 (16,000,000)
Payment of industrial development
revenue bonds -- (1,980,000)
Distributions to minority
interest owners (9,591,000) (7,456,000)
Repurchases of common stock (8,098,000) --
Cash dividends paid (3,150,000) (2,631,000)
Excess tax benefit from stock
option exercises 1,573,000 4,324,000
Proceeds from stock option
exercises 1,207,000 2,398,000
Other (219,000) (1,158,000)
-------------- --------------
Net cash used in financing
activities (278,000) (22,503,000)
-------------- --------------
Effect of exchange rate changes
on cash 365,000 (717,000)
-------------- --------------
Net (decrease) increase in cash
and cash equivalents (5,395,000) 7,615,000
Cash and cash equivalents at
beginning of year 12,562,000 4,947,000
-------------- --------------
Cash and cash equivalents at end
of year $7,167,000 $12,562,000
============== ==============
CONTACT: HEICO Corporation
Thomas S. Irwin
(954) 987-4000 ext. 7560
Victor H. Mendelson
(305) 374-1745 ext. 7590