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) February 28, 2007
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(b) 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 February 28, 2007 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 February 28, 2007
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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February 28, 2007
(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 February 28, 2007 | |
EXHIBIT 99.1
HEICO Corporation Reports Strong First Quarter Results; Fiscal 2007 Targets Raised for Sales and Earnings
1st Quarter Net Income Up 17% And Operating Income Up 12% On 29% Increase In Net Sales
HOLLYWOOD, Fla. and MIAMI, Feb. 28, 2007 (PRIME NEWSWIRE) -- HEICO Corporation (NYSE:HEI.A) (NYSE:HEI) today reported that net income increased 17% to $7,921,000, or $.30 per diluted share, for the first quarter of fiscal 2007 from $6,749,000, or $.26 per diluted share, for the first quarter of fiscal 2006.
Operating income increased 12% to $17,140,000 for the first quarter of fiscal 2007 from $15,286,000 for the first quarter of fiscal 2006.
Net sales increased 29% to $113,684,000 for the first quarter of fiscal 2007 from $88,101,000 for the first quarter of fiscal 2006.
(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 & Chief Executive Officer, remarked, "We are pleased to report increased sales in each of our two business segments reflecting both organic growth and growth through acquiring profitable, well-managed businesses. Our Flight Support Group reported record quarterly net sales of $88.1 million, up 38% over the first quarter of fiscal 2006. The sales growth within the Flight Support Group reflects recent strategic acquisitions, as well as strong organic growth approximating 18%. Our Electronic Technologies Group reported net sales of $25.6 million, up 5% over the first quarter of fiscal 2006, reflecting organic growth consistent with our near-term expectations.
"As we have pointed out in the past, and as might be expected, revenues and profits of the Electronic Technologies Group vary considerably from quarter to quarter due to variations in shipping schedules. Accordingly, we do not provide revenue and earnings guidance on a quarterly basis. These variations tend to normalize on an annual basis and therefore we feel more comfortable giving annual guidance.
"Operating income of our Flight Support Group increased 24% to $14.4 million for the first quarter of fiscal 2007, up from $11.6 million for the first quarter of fiscal 2006. Operating margins of the Flight Support Group were 16.4% in the first quarter of fiscal 2007 versus 18.2% for the first quarter of fiscal 2006, reflecting product mix, but approximated the operating margins of 16.9% experienced for the full fiscal 2006 year.
"Operating income of our Electronic Technologies Group totaled $5.8 million for the first quarter of fiscal 2007, down slightly from $6.4 million for the first quarter of fiscal 2006. Operating margins of the Electronic Technologies Group were 22.5% for the first quarter of fiscal 2007 versus 26.2% in the first quarter of fiscal 2006 reflecting product mix. Based on the current backlog of unshipped orders within the Electronic Technologies Group, which have increased to $56 million as of January 31, 2007, up 23% from the backlog as of October 31, 2006, we expect higher quarterly sales and operating margins for the balance of fiscal 2007.
"Our consolidated operating margin decreased to 15.1% for the first quarter of fiscal 2007 from 17.4% for the first quarter of fiscal 2006, principally reflecting decreased gross profit margins partially offset by improved operating efficiencies within SG&A expenses. We expect improving operating margins within the Electronic Technologies Group to contribute to an overall improvement in consolidated operating margins during the balance of fiscal 2007.
"Based on current market conditions, we are raising our targeted fiscal 2007 net sales to a range of $466 to $471 million, operating income to a range of $80 to $81 million and diluted net income per share to a range of $1.38 to $1.40. These targets exclude the impact of additional acquisitions, if any.
"We continue to target fiscal 2007 cash flow from operating activities to approximate $50 to $54 million and our capital expenditures for fiscal 2007 should approximate $18 million. Cash flow from operating activities for the first quarter of fiscal 2007 totaled $3.1 million versus $6.3 million for the first quarter of fiscal 2006. The decrease is principally due to a higher excess tax benefit from stock option exercises presented as a financing activity in the current period.
"As we look to the balance of fiscal 2007 and beyond, we believe our commitment to develop new products and services, increasing product demand from our customers, our strong financial position and our ability to identify select acquisition opportunities, provide the foundation for continued growth in sales and earnings. We remain confident our disciplined business model will also provide opportunity for long-term sustainable growth."
As previously announced, HEICO will hold a conference call on Thursday, March 1, 2007 at 9:00 a.m. Eastern Standard Time to discuss its first quarter results. Individuals wishing to participate in the conference call should dial: U.S./Canada/International/Local (641) 297-7768, wait for the conference operator and provide the operator with the "Verbal" Passcode/Conference ID 7HEICO (or "743426"). A digital replay will be available two hours after the completion of the conference for 14 days. To access, dial: U.S./Canada/International/Local (641) 297-5263 and enter Passcode/Conference ID 7HEICO (or "743426").
There are currently approximately 15.1 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 stock 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 telecommunications, electronics and medical 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 or space 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 and electronics 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)
Three Months Ended January 31,
------------------------------
2007 2006
------------- -------------
Net sales $ 113,684,000 $ 88,101,000
Cost of sales 76,196,000 56,049,000
Selling, general and
administrative expenses 20,348,000 16,766,000
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Operating income 17,140,000 15,286,000
Interest expense (849,000) (808,000)
Interest and other
income (expense) 184,000 (53,000)
------------- -------------
Income before income taxes
and minority interests 16,475,000 14,425,000
Income tax expense 4,988,000 4,916,000
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Income before minority
interests 11,487,000 9,509,000
Minority interests'
share of income 3,566,000 2,760,000
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Net income $ 7,921,000(a) $ 6,749,000
============= =============
Net income per share:
Basic $ .31 $ .27
Diluted $ .30 $ .26
Weighted average number
of common shares
outstanding:
Basic 25,482,633 24,673,957
Diluted 26,811,861 26,231,848
Three Months Ended January 31,
------------------------------
2007 2006
------------- -------------
Operating segment
information: - (b)
Net sales:
Flight Support Group $ 88,075,000 $ 63,678,000
Electronic Technologies Group 25,609,000 24,482,000
Intersegment sales -- (59,000)
------------- -------------
$ 113,684,000 $ 88,101,000
============= =============
Operating income:
Flight Support Group $ 14,425,000 $ 11,615,000
Electronic Technologies Group 5,764,000 6,403,000
Other, primarily corporate (3,049,000) (2,732,000)
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$ 17,140,000 $ 15,286,000
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HEICO CORPORATION
Footnotes to Condensed Consolidated
Statements of Operations (Unaudited)
(a) Net income reflects the benefit of a tax credit (net of
related expenses) for qualified research and development
activities recognized for the full fiscal 2006 year pursuant to
the retroactive extension in December 2006 of Section 41, "Credit
for Increasing Research Activities," of the Internal Revenue
Code, which increased net income for the first quarter of fiscal
2007 by $332,000, or $.01 per diluted share.
(b) During the third quarter of fiscal 2006, one of the Company's
subsidiaries formerly included in the Electronic Technologies
Group was reclassified to the Flight Support Group. Prior period
amounts have been retroactively restated to reflect the revised
segment classification.
HEICO CORPORATION
Condensed Consolidated Balance Sheets (Unaudited)
January 31, October 31,
2007 2006
------------ ------------
Cash and cash equivalents $ 5,843,000 $ 4,999,000
Accounts receivable, net 66,360,000 65,012,000
Inventories, net 99,228,000 97,283,000
Prepaid expenses and
other current assets 17,334,000 12,727,000
------------ ------------
Total current assets 188,765,000 180,021,000
Property, plant and
equipment, net 50,105,000 49,489,000
Goodwill 276,423,000 275,116,000
Other assets 31,667,000 30,189,000
------------ ------------
Total assets $546,960,000 $534,815,000
============ ============
Current maturities of
long-term debt $ 6,000 $ 39,000
Other current liabilities 52,185,000 65,464,000
------------ ------------
Total current liabilities 52,191,000 65,503,000
Long-term debt, net of
current maturities 60,016,000 55,022,000
Deferred income taxes 28,970,000 28,052,000
Other non-current liabilities 8,099,000 5,679,000
------------ ------------
Total liabilities 149,276,000 154,256,000
Minority interests in
consolidated subsidiaries 65,674,000 63,301,000
Shareholders' equity 332,010,000 317,258,000
------------ ------------
Total liabilities and
shareholders' equity $546,960,000 $534,815,000
============ ============
HEICO CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended January 31,
----------------------------
2007 2006
------------ ------------
Operating Activities:
Net income $ 7,921,000 $ 6,749,000
Depreciation and amortization 2,945,000 2,149,000
Deferred income tax provision (1,502,000) 1,061,000
Minority interests' share of income 3,566,000 2,760,000
Tax benefit from stock option exercises 6,885,000 2,365,000
Excess tax benefit from stock option
exercises (5,271,000) (1,130,000)
Stock option compensation expense 258,000 428,000
(Increase) decrease in accounts
receivable (1,329,000) 1,444,000
Increase in inventories (2,131,000) (4,157,000)
Decrease in current liabilities (6,052,000) (5,172,000)
Other (2,189,000) (149,000)
------------ ------------
Net cash provided by operating
activities 3,101,000 6,348,000
------------ ------------
Investing Activities:
Acquisitions and related costs, net of
cash acquired (8,385,000) (30,062,000)
Capital expenditures (2,666,000) (1,207,000)
Other 72,000 360,000
------------ ------------
Net cash used in investing activities (10,979,000) (30,909,000)
------------ ------------
Financing Activities:
Borrowings on revolving credit
facility, net 5,000,000 27,000,000
Borrowings on short-term line of credit -- 1,000,000
Cash dividends paid (1,022,000) (991,000)
Proceeds from stock option exercises 664,000 576,000
Excess tax benefit from stock option
exercises 5,271,000 1,130,000
Distributions to minority interest
owners (1,164,000) (250,000)
Other (39,000) (13,000)
------------ ------------
Net cash provided by financing
activities 8,710,000 28,452,000
------------ ------------
Effect of exchange rate changes on cash 12,000 5,000
------------ ------------
Net increase in cash and cash equivalents 844,000 3,896,000
Cash and cash equivalents at beginning
of year 4,999,000 5,330,000
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Cash and cash equivalents at end
of period $ 5,843,000 $ 9,226,000
============ ============
CONTACT: HEICO Corporation
Thomas S. Irwin
(954) 987-4000 ext. 7560
Victor H. Mendelson
(305) 374-1745 ext. 7590