hei-20220131

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

						For the quarterly period ended January 31, 2022

						OR

☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

						For the transition period from ______ to _______

Commission File Number: 001-04604

HEICO CORPORATION

(Exact name of registrant as specified in its charter)


Florida						65-0341002
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer 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)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $.01 par value per share

HEI

New York Stock Exchange

Class A Common Stock, $.01 par value per share

HEI.A

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐

Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of each of the registrant’s classes of common stock as of February 23, 2022 is as follows:


Common Stock, $.01 par value	54,481,570	shares
Class A Common Stock, $.01 par value	81,393,925	shares

Index

HEICO CORPORATION

INDEX TO QUARTERLY REPORT ON FORM 10-Q


			Page
Part I.	Financial Information

	Item 1.	Financial Statements:

		Condensed Consolidated Balance Sheets (unaudited) as of January 31, 2022 and October 31, 2021	2

		Condensed Consolidated Statements of Operations (unaudited) for the three months ended January 31, 2022 and 2021	3

		Condensed Consolidated Statements of Comprehensive Income (unaudited) for the three months ended January 31, 2022 and 2021	4

		Condensed Consolidated Statements of Shareholders’ Equity (unaudited) for the three months ended January 31, 2022 and 2021	5

		Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended January 31, 2022 and 2021	6

		Notes to Condensed Consolidated Financial Statements (unaudited)	7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29

	Item 4.	Controls and Procedures	29

Part II.	Other Information

	Item 6.	Exhibits	30

Signatures			31

Index

PART I. FINANCIAL INFORMATION; Item 1. FINANCIAL STATEMENTS

HEICO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED

(in thousands, except per share data)


	January 31, 2022	October 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$124,818	$108,298
Accounts receivable, net	227,828	244,919
Contract assets	82,238	80,073
Inventories, net	503,506	478,050
Prepaid expenses and other current assets	36,172	26,045
Total current assets	974,562	937,385

Property, plant and equipment, net	194,604	193,638
Goodwill	1,446,250	1,450,395
Intangible assets, net	566,090	582,307
Other assets	332,389	334,682
Total assets	$3,513,895	$3,498,407

LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$1,484	$1,515
Trade accounts payable	89,005	85,544
Accrued expenses and other current liabilities	181,361	206,857
Income taxes payable	2,030	964
Total current liabilities	273,880	294,880

Long-term debt, net of current maturities	235,650	234,983
Deferred income taxes	40,243	40,761
Other long-term liabilities	363,777	378,257
Total liabilities	913,550	948,881

Commitments and contingencies (Note 10)

Redeemable noncontrolling interests (Note 2)	258,289	252,587

Shareholders’ equity:
Preferred Stock, $.01 par value per share; 10,000 shares authorized; none issued	—	—
Common Stock, $.01 par value per share; 150,000 shares authorized; 54,482 and 54,264 shares issued and outstanding	545	543
Class A Common Stock, $.01 par value per share; 150,000 shares authorized; 81,394 and 81,224 shares issued and outstanding	814	812
Capital in excess of par value	302,104	320,747
Deferred compensation obligation	5,297	5,297
HEICO stock held by irrevocable trust	(5,297)	(5,297)
Accumulated other comprehensive loss	(16,962)	(8,552)
Retained earnings	2,018,990	1,949,521
Total HEICO shareholders’ equity	2,305,491	2,263,071
Noncontrolling interests	36,565	33,868
Total shareholders’ equity	2,342,056	2,296,939
Total liabilities and equity	$3,513,895	$3,498,407

The accompanying notes are an integral part of these condensed consolidated financial statements.

Index

HEICO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS – UNAUDITED

(in thousands, except per share data)


	Three months ended January 31,
	2022	2021

Net sales	$490,343	$417,902

Operating costs and expenses:
Cost of sales	300,133	259,468
Selling, general and administrative expenses	91,388	78,149

Total operating costs and expenses	391,521	337,617

Operating income	98,822	80,285

Interest expense	(796)	(2,448)
Other income	226	711

Income before income taxes and noncontrolling interests	98,252	78,548

Income tax expense	4,000	2,300

Net income from consolidated operations	94,252	76,248

Less: Net income attributable to noncontrolling interests	7,331	5,652

Net income attributable to HEICO	$86,921	$70,596

Net income per share attributable to HEICO shareholders:
Basic	$.64	$.52
Diluted	$.63	$.51

Weighted average number of common shares outstanding:
Basic	135,635	135,210
Diluted	137,966	137,742

The accompanying notes are an integral part of these condensed consolidated financial statements.

Index

HEICO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME – UNAUDITED

(in thousands)


	Three months ended January 31,
	2022	2021

Net income from consolidated operations	$94,252	$76,248
Other comprehensive (loss) income:
Foreign currency translation adjustments	(8,751)	11,648
Amortization of unrealized loss on defined benefit pension plan, net of tax	11	34
Total other comprehensive (loss) income	(8,740)	11,682
Comprehensive income from consolidated operations	85,512	87,930
Net income attributable to noncontrolling interests	7,331	5,652
Foreign currency translation adjustments attributable to noncontrolling interests	(330)	404
Comprehensive income attributable to noncontrolling interests	7,001	6,056
Comprehensive income attributable to HEICO	$78,511	$81,874

The accompanying notes are an integral part of these condensed consolidated financial statements.

Index

HEICO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - UNAUDITED

(in thousands, except per share data)


		HEICO Shareholders' Equity
	Redeemable Noncontrolling Interests	Common Stock	Class A Common Stock	Capital in Excess of Par Value	Deferred Compensation Obligation	HEICO Stock Held by Irrevocable Trust	Accumulated Other Comprehensive Loss	Retained Earnings	Noncontrolling Interests	Total Shareholders' Equity
Balances as of October 31, 2021	$252,587	$543	$812	$320,747	$5,297	($5,297)	($8,552)	$1,949,521	$33,868	$2,296,939
Comprehensive income	4,141	—	—	—	—	—	(8,410)	86,921	2,860	81,371
Cash dividends ($.09 per share)	—	—	—	—	—	—	—	(12,227)	—	(12,227)
Issuance of common stock to HEICO Savings and Investment Plan	—	—	—	1,670	—	—	—	—	—	1,670
Share-based compensation expense	—

SEC Form 10-Q filed by Heico Corporation