DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - $ / shares | 9 Months Ended | |
Jul. 31, 2015 | Aug. 26, 2015 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jul. 31, 2015 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 | |
Entity Information [Line Items] | ||
Entity Registrant Name | HEICO CORPORATION | |
Address | 3000 Taft Street, Hollywood, Florida | |
State | Florida | |
Zip Code | 33,021 | |
Entity Central Index Key | 46,619 | |
Entity Tax Identification Number | 650,341,002 | |
Current Fiscal Year End Date | --10-31 | |
Entity Filer Category | Large Accelerated Filer | |
Trading Symbol | hei | |
Entity Common Stock, Shares Outstanding | 26,898,938 | |
Entity Common Stock Par Value | $ 0.01 | |
Class A Common Stock [Member] | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 39,935,811 | |
Entity Common Stock Par Value | $ 0.01 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED - USD ($) $ in Thousands | Jul. 31, 2015 | Oct. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 31,697 | $ 20,229 |
Accounts receivable, net | 150,930 | 149,669 |
Inventories, net | 236,235 | 218,042 |
Prepaid expenses and other current assets | 9,850 | 8,868 |
Deferred income taxes | 34,150 | 34,485 |
Total current assets | 462,862 | 431,293 |
Property, plant and equipment, net | 103,175 | 93,865 |
Goodwill | 713,127 | 686,271 |
Intangible assets, net | 220,514 | 200,810 |
Deferred income taxes | 974 | 1,063 |
Other assets | 87,762 | 75,912 |
Total assets | 1,588,414 | 1,489,214 |
Current liabilities: | ||
Current maturities of long-term debt | 343 | 418 |
Trade accounts payable | 53,035 | 57,157 |
Accrued expenses and other current liabilities | 91,390 | 92,578 |
Income taxes payable | 2,062 | 2,067 |
Total current liabilities | 146,830 | 152,220 |
Long-term debt, net of current maturities | 299,126 | 328,691 |
Deferred income taxes | 114,618 | 111,429 |
Other long-term liabilities | 106,437 | 82,289 |
Total liabilities | $ 667,011 | $ 674,629 |
Commitments and contingencies (Note 10) | ||
Redeemable noncontrolling interests (Note 3) | $ 64,821 | $ 39,966 |
Shareholders' equity: | ||
Common Stock | 269 | 268 |
Capital in excess of par value | 283,490 | 269,351 |
Deferred compensation obligation | 1,296 | 1,138 |
HEICO stock held by irrevocable trust | (1,296) | (1,138) |
Accumulated other comprehensive loss | (24,562) | (8,289) |
Retained earnings | 516,007 | 437,757 |
Total HEICO shareholders' equity | 775,603 | 699,484 |
Noncontrolling interests | 80,979 | 75,135 |
Total shareholders' equity | 856,582 | 774,619 |
Total liabilities and equity | 1,588,414 | 1,489,214 |
Class A Common Stock [Member] | ||
Shareholders' equity: | ||
Common Stock | $ 399 | $ 397 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED [PARENTHETICAL] - $ / shares shares in Thousands | Jul. 31, 2015 | Oct. 31, 2014 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 75,000 | 75,000 |
Common stock, shares issued | 26,899 | 26,847 |
Common stock, shares outstanding | 26,899 | 26,847 |
Class A Common Stock [Member] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 75,000 | 75,000 |
Common stock, shares issued | 39,936 | 39,699 |
Common stock, shares outstanding | 39,936 | 39,699 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Net sales | $ 300,370 | $ 291,030 | $ 859,976 | $ 840,088 |
Operating costs and expenses: | ||||
Cost of sales | 192,278 | 187,703 | 552,593 | 544,722 |
Selling, general and administrative expenses | 49,582 | 53,214 | 146,679 | 145,697 |
Total operating costs and expenses | 241,860 | 240,917 | 699,272 | 690,419 |
Operating income | 58,510 | 50,113 | 160,704 | 149,669 |
Interest expense | (1,088) | (1,444) | (3,346) | (4,166) |
Other income | (184) | 83 | 375 | 591 |
Income before income taxes and noncontrolling interests | 57,238 | 48,752 | 157,733 | 146,094 |
Income tax expense | 18,300 | 11,400 | 48,200 | 43,400 |
Net income from consolidated operations | 38,938 | 37,352 | 109,533 | 102,694 |
Less: Net income attributable to noncontrolling interests | 4,569 | 3,986 | 14,419 | 13,506 |
Net income attributable to HEICO | $ 34,369 | $ 33,366 | $ 95,114 | $ 89,188 |
Net income per share attributable to HEICO shareholders: | ||||
Basic (in dollars per share) | $ 0.51 | $ 0.50 | $ 1.43 | $ 1.34 |
Diluted (in dollars per share) | $ 0.51 | $ 0.49 | $ 1.40 | $ 1.32 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 66,813 | 66,497 | 66,706 | 66,442 |
Diluted (in shares) | 67,901 | 67,474 | 67,790 | 67,427 |
Cash dividends per share (in dollars per share) | $ 0.07 | $ 0.06 | $ 0.14 | $ 0.47 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Net income from consolidated operations | $ 38,938 | $ 37,352 | $ 109,533 | $ 102,694 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (5,442) | (2,064) | (17,177) | (2,715) |
Total other comprehensive income (loss) | (5,442) | (2,064) | (17,177) | (2,715) |
Comprehensive income from consolidated operations | 33,496 | 35,288 | 92,356 | 99,979 |
Less: Net income attributable to noncontrolling interests | 4,569 | 3,986 | 14,419 | 13,506 |
Less: Foreign currency translation adjustments attributable to noncontrolling interests | (94) | 0 | (904) | 0 |
Comprehensive income attributable to noncontrolling interests | 4,475 | 3,986 | 13,515 | 13,506 |
Comprehensive income attributable to HEICO | $ 29,021 | $ 31,302 | $ 78,841 | $ 86,473 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME - UNAUDITED - USD ($) $ in Thousands | Total | Redeemable Noncontrolling Interests [Member] | Common Stock [Member] | Common Stock [Member]Class A Common Stock [Member] | Capital In Excess Of Par Value [Member] | Deferred Compensation Obligation [Member] | HEICO Stock Held By Irrevocable Trust [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total Shareholders Equity [Member] |
Starting Balance at Oct. 31, 2013 | $ 268 | $ 396 | $ 255,889 | $ 1,138 | $ (1,138) | $ 144 | $ 349,649 | $ 116,889 | $ 723,235 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Comprehensive income (loss) | $ 86,473 | (2,715) | 89,188 | ||||||||
Comprehensive income (loss) | 13,506 | $ 4,180 | 9,326 | ||||||||
Comprehensive income (loss) | 99,979 | 95,799 | |||||||||
Cash dividends | (31,215) | (31,215) | |||||||||
Issuance of common stock to Savings and Investment Plan | 3,849 | 3,849 | |||||||||
Share-based compensation expense | 5,873 | 5,874 | |||||||||
Proceeds from stock option exercises | 594 | 594 | |||||||||
Tax benefit from stock option exercises | 93 | 93 | |||||||||
Redemptions of common stock related to stock option exercises | (273) | (273) | (273) | ||||||||
Distributions to noncontrolling interests | (4,141) | (72,576) | (72,576) | ||||||||
Acquisitions of noncontrolling interests | (1,243) | ||||||||||
Reclassification of Redeemable Noncontrolling Interests to Noncontrolling Interests | 19,383 | 19,383 | 19,383 | ||||||||
Adjustments to redemption amount of redeemable noncontrolling interests | (526) | 526 | 526 | ||||||||
Other | 4 | 1 | 5 | ||||||||
Ending Balance at Jul. 31, 2014 | 268 | 397 | 266,029 | 1,138 | (1,138) | (2,571) | 408,148 | 73,023 | 745,294 | ||
Starting Balance, Redeemable Noncontrolling Interests at Oct. 31, 2013 | 59,218 | ||||||||||
Ending Balance, Redeemable Noncontrolling Interests at Jul. 31, 2014 | 38,105 | ||||||||||
Starting Balance at Oct. 31, 2014 | 774,619 | 268 | 397 | 269,351 | 1,138 | (1,138) | (8,289) | 437,757 | 75,135 | 774,619 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Comprehensive income (loss) | 78,841 | (16,273) | 95,114 | ||||||||
Comprehensive income (loss) | 13,515 | 3,880 | 9,635 | ||||||||
Comprehensive income (loss) | 92,356 | 88,476 | |||||||||
Cash dividends | (9,343) | (9,343) | |||||||||
Issuance of common stock to Savings and Investment Plan | 1 | 5,090 | 5,091 | ||||||||
Share-based compensation expense | 4,394 | 4,394 | |||||||||
Proceeds from stock option exercises | 2 | 3,256 | 3,258 | ||||||||
Tax benefit from stock option exercises | 1,404 | 1,404 | |||||||||
Redemptions of common stock related to stock option exercises | (5) | (5) | (5) | ||||||||
Distributions to noncontrolling interests | (3,623) | (3,791) | (3,791) | ||||||||
Adjustments to redemption amount of redeemable noncontrolling interests | 7,522 | (7,522) | (7,522) | ||||||||
Deferred compensation obligation | 158 | ||||||||||
Deferred compensation obligation | (158) | ||||||||||
Other | 1 | 1 | |||||||||
Ending Balance at Jul. 31, 2015 | 856,582 | $ 269 | $ 399 | $ 283,490 | $ 1,296 | $ (1,296) | $ (24,562) | $ 516,007 | $ 80,979 | $ 856,582 | |
Starting Balance, Redeemable Noncontrolling Interests at Oct. 31, 2014 | 39,966 | 39,966 | |||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||
Noncontrolling interests assumed related to acquisitions | 17,076 | ||||||||||
Ending Balance, Redeemable Noncontrolling Interests at Jul. 31, 2015 | $ 64,821 | $ 64,821 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME - UNAUDITED [PARENTHETICAL] - $ / shares | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Cash dividends per share (in dollars per share) | $ 0.07 | $ 0.06 | $ 0.14 | $ 0.47 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Operating Activities: | ||
Net income from consolidated operations | $ 109,533 | $ 102,694 |
Adjustments to reconcile net income from consolidated operations to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 35,066 | 36,270 |
Impairment of intangible assets | 0 | 9,200 |
Share-based compensation expense | 4,394 | 5,874 |
Employer contributions to HEICO Savings and Investment Plan | 4,482 | 3,849 |
Deferred income tax provision (benefit) | (4,909) | (11,549) |
Tax benefit from stock option exercises | 1,404 | 93 |
Excess tax benefit from stock option exercises | (1,404) | (93) |
Change in value of contingent consideration | (412) | (19,516) |
Foreign currency transaction adjustments, net | (3,981) | 0 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Change in accounts receivable | 4,482 | 7,909 |
Change in inventories | (10,653) | (2,289) |
Change in prepaid expenses and other current assets | (548) | 7,048 |
Change in trade accounts payable | (6,570) | (6,129) |
Change in accrued expenses and other current liabilities | (7,977) | (12,456) |
Change in income taxes payable | (401) | 420 |
Other long-term assets and liabilities, net | (1,217) | 5,908 |
Net cash provided by operating activities | 121,289 | 127,233 |
Investing Activities: | ||
Acquisitions, net of cash acquired | (56,198) | (8,737) |
Capital expenditures | (13,767) | (12,261) |
Other | 171 | (30) |
Net cash used in investing activities | (69,794) | (21,028) |
Financing Activities: | ||
Borrowings on revolving credit facility | 68,696 | 112,000 |
Payments on revolving credit facility | (95,000) | (102,000) |
Distributions to noncontrolling interests | (7,414) | (76,717) |
Cash dividends paid | (9,343) | (31,215) |
Acquisitions of noncontrolling interests | 0 | (1,243) |
Revolving credit facility issuance costs | 0 | (767) |
Redemptions of common stock related to stock option exercises | (5) | (273) |
Proceeds from stock option exercises | 3,258 | 594 |
Excess tax benefit from stock option exercises | 1,404 | 93 |
Other | (290) | (1,082) |
Net cash (used in) provided by financing activities | (38,694) | (100,610) |
Effect of exchange rate changes on cash | (1,333) | (150) |
Net (decrease) increase in cash and cash equivalents | 11,468 | 5,445 |
Cash and cash equivalents at beginning of year | 20,229 | 15,499 |
Cash and cash equivalents at end of period | $ 31,697 | $ 20,944 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Jul. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies [Text Block] | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements of HEICO Corporation and its subsidiaries (collectively, “HEICO,” or the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q. Therefore, the condensed consolidated financial statements do not include all information and footnotes normally included in annual consolidated financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended October 31, 2014. The October 31, 2014 Condensed Consolidated Balance Sheet has been derived from the Company’s audited consolidated financial statements. In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments (consisting principally of normal recurring accruals) necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, statements of comprehensive income, statements of shareholders' equity and statements of cash flows for such interim periods presented. The results of operations for the nine months ended July 31, 2015 are not necessarily indicative of the results which may be expected for the entire fiscal year. The Company has two operating segments: the Flight Support Group (“FSG”), consisting of HEICO Aerospace Holdings Corp. (“HEICO Aerospace”) and HEICO Flight Support Corp. and their collective subsidiaries; and the Electronic Technologies Group (“ETG”), consisting of HEICO Electronic Technologies Corp. (“HEICO Electronic”) and its subsidiaries. New Accounting Pronouncements In March 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-05, “Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity,” which clarifies the applicable guidance for the release of any cumulative translation adjustments into net earnings. ASU 2013-05 specifies that the entire amount of cumulative translation adjustments should be released into earnings when an entity ceases to have a controlling financial interest in a subsidiary or group of assets within a consolidated foreign entity and the sale or transfer results in the complete or substantially complete liquidation of the investment in the foreign entity. The Company adopted ASU 2013-05 in the first quarter of fiscal 2015, resulting in no impact on the Company's consolidated results of operations, financial position or cash flows. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which provides a comprehensive new revenue recognition model that will supersede nearly all existing revenue recognition guidance. Under ASU 2014-09, an entity will recognize revenue when it transfers promised goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In August 2015, the FASB issued ASU 2015-14 which defers the effective date of ASU 2014-09 by one year. Accordingly, ASU 2014-09 is effective for fiscal years and interim reporting periods within those years beginning after December 15, 2017, or in fiscal 2019 for HEICO. Early adoption is not permitted. ASU 2014-09 shall be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. The Company is currently evaluating which transition method it will elect and the effect the adoption of this guidance will have on its consolidated results of operations, financial position and cash flows. In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” which requires entities to measure inventories at the lower of cost or net realizable value. Under current guidance, inventories are measured at the lower of cost or market. ASU 2015-11 must be applied prospectively and is effective for fiscal years and interim reporting periods within those years beginning after December 15, 2016, or in fiscal 2018 for HEICO. Early adoption is permitted. The Company is currently evaluating the effect, if any, the adoption of this guidance will have on its consolidated results of operations, financial position and cash flows. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Jul. 31, 2015 | |
Business Combinations [Abstract] | |
Acquisitions [Text Block] | ACQUISITIONS In January 2015 , the Company, through its HEICO Flight Support Corp. subsidiary, acquired 80% of the equity of Aeroworks International Holdings, B.V. (“Aeroworks”). Aeroworks, which is headquartered in The Netherlands and maintains a significant portion of its production facilities in Thailand and Laos, is a manufacturer of both composite and metal parts used primarily in aircraft interior applications, including seating, galleys, lavatories, doors, and overhead bins. The remaining 20% interest continues to be owned by a certain member of Aeroworks' management team (see Note 3, Selected Financial Statement Information, for additional information). The total consideration includes an accrual representing the estimated fair value of contingent consideration that the Company may be obligated to pay should Aeroworks meet certain earnings objectives during each of the first four years following the acquisition. See Note 7, Fair Value Measurements, for additional information regarding the Company’s contingent consideration obligation. In January 2015 , the Company, through its HEICO Flight Support Corp. subsidiary, acquired 80.1% of the equity of Harter Aerospace, LLC ("Harter"). Harter is a globally recognized component and accessory maintenance, repair, and overhaul (MRO) station specializing in commercial aircraft accessories, including thrust reverse actuation systems and pneumatics, and electromechanical components. The remaining 19.9% interest continues to be owned by certain members of Harter's management team (see Note 3, Selected Financial Statement Information, for additional information). In May 2015 , the Company, through its HEICO Flight Support Corp. subsidiary, acquired all of the stock of Thermal Energy Products, Inc. (“TEP”). TEP engineers, designs and manufactures removable/reusable insulation systems for industrial, commercial, aerospace and defense applications. The purchase prices of the fiscal 2015 acquisitions were paid in cash principally using proceeds from the Company’s revolving credit facility and the total consideration for the acquisitions is not material or significant to the Company's condensed consolidated financial statements. The allocation of the total consideration to the tangible and identifiable intangible assets acquired and liabilities and noncontrolling interests assumed for the fiscal 2015 acquisitions is preliminary until the Company obtains final information regarding their fair values. The operating results of the fiscal 2015 acquisitions were included in the Company’s results of operations from the effective acquisition dates. The amount of net sales and earnings of the fiscal 2015 acquisitions included in the Condensed Consolidated Statements of Operations is not material. Had the fiscal 2015 acquisitions been consummated as of November 1, 2013, net sales, net income from consolidated operations, net income attributable to HEICO, and basic and diluted net income per share attributable to HEICO shareholders on a pro forma basis for the nine and three months ended July 31, 2015 and July 31, 2014 would not have been materially different than the reported amounts. |
SELECTED FINANCIAL STATEMENT IN
SELECTED FINANCIAL STATEMENT INFORMATION | 9 Months Ended |
Jul. 31, 2015 | |
Selected Financial Statement Information [Abstract] | |
Selected Financial Statement Information [Text Block] | SELECTED FINANCIAL STATEMENT INFORMATION Accounts Receivable (in thousands) July 31, 2015 October 31, 2014 Accounts receivable $153,185 $151,812 Less: Allowance for doubtful accounts (2,255 ) (2,143 ) Accounts receivable, net $150,930 $149,669 Costs and Estimated Earnings on Uncompleted Percentage-of-Completion Contracts (in thousands) July 31, 2015 October 31, 2014 Costs incurred on uncompleted contracts $22,814 $24,437 Estimated earnings 11,761 11,747 34,575 36,184 Less: Billings to date (35,284 ) (29,829 ) ($709 ) $6,355 Included in the accompanying Condensed Consolidated Balance Sheets under the following captions: Accounts receivable, net (costs and estimated earnings in excess of billings) $4,695 $8,161 Accrued expenses and other current liabilities (billings in excess of costs and estimated earnings) (5,404 ) (1,806 ) ($709 ) $6,355 Changes in estimates pertaining to percentage-of-completion contracts did not have a material effect on net income from consolidated operations for the nine and three months ended July 31, 2015 and 2014. Inventories (in thousands) July 31, 2015 October 31, 2014 Finished products $113,626 $106,229 Work in process 32,871 30,056 Materials, parts, assemblies and supplies 87,598 79,163 Contracts in process 4,508 2,594 Less: Billings to date (2,368 ) — Inventories, net of valuation reserves $236,235 $218,042 Contracts in process represents accumulated capitalized costs associated with fixed price contracts. Related progress billings and customer advances (“billings to date”) are classified as a reduction to contracts in process, if any, and any excess is included in accrued expenses and other liabilities. Property, Plant and Equipment (in thousands) July 31, 2015 October 31, 2014 Land $4,954 $4,501 Buildings and improvements 69,091 60,332 Machinery, equipment and tooling 152,249 139,963 Construction in progress 6,630 6,905 232,924 211,701 Less: Accumulated depreciation and amortization (129,749 ) (117,836 ) Property, plant and equipment, net $103,175 $93,865 Accrued Customer Rebates and Credits The aggregate amount of accrued customer rebates and credits included within accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheets was $7.8 million and $10.9 million as of July 31, 2015 and October 31, 2014, respectively. The total customer rebates and credits deducted within net sales for the nine months ended July 31, 2015 and 2014 was $4.3 million and $5.3 million , respectively. The total customer rebates and credits deducted within net sales for the three months ended July 31, 2015 and 2014 was $1.4 million and $1.9 million , respectively. The decrease in the amount of accrued customer rebates and credits since October 31, 2014 principally reflects payments made during fiscal 2015. Employee Retirement Plan The components of net pension income for the nine and three months ended July 31, 2015 and 2014 that were recorded within the Company's Condensed Consolidated Statements of Operations are as follows (in thousands): Nine months ended July 31, Three months ended July 31, 2015 2014 2015 2014 Expected return on plan assets $555 $555 $185 $185 Interest cost 420 459 140 153 Net pension income $135 $96 $45 $32 Research and Development Expenses The amount of new product research and development ("R&D") expenses included in cost of sales for the nine and three months ended July 31, 2015 and 2014 is as follows (in thousands): Nine months ended July 31, Three months ended July 31, 2015 2014 2015 2014 R&D expenses $28,860 $28,278 $9,421 $9,862 Redeemable Noncontrolling Interests The holders of equity interests in certain of the Company's subsidiaries have put rights that may be exercised on varying dates causing the Company to give cash consideration to purchase their equity interests based on fair value or a formula that management intended to reasonably approximate fair value based solely on a multiple of future earnings over a measurement period. Management's estimate of the aggregate redemption amount of all put rights (inclusive of the fiscal 2015 transactions described below) that the Company could be required to pay at varying dates through fiscal 2023 is as follows (in thousands): July 31, 2015 October 31, 2014 Redeemable at fair value $52,521 $27,666 Redeemable based on a multiple of future earnings 12,300 12,300 Redeemable noncontrolling interests $64,821 $39,966 As discussed in Note 2, Acquisitions, the Company, through the FSG, acquired interests of 80% and 80.1% in Aeroworks and Harter, respectively, in January 2015. As part of the Aeroworks purchase agreement, the Company has the right to purchase the noncontrolling interest over a four-year period beginning in fiscal 2019, or sooner under certain conditions, and the noncontrolling interest holder has the right to cause the Company to purchase the same equity interest over the same period. As part of the Harter purchase agreement, the Company has the right to purchase the noncontrolling interests over a four-year period beginning in fiscal 2020, or sooner under certain conditions, and the noncontrolling interest holders have the right to cause the Company to purchase the same equity interests over the same period. Accumulated Other Comprehensive Loss Changes in the components of accumulated other comprehensive loss for the nine months ended July 31, 2015 are as follows (in thousands): Foreign Currency Translation Pension Benefit Obligation Accumulated Other Comprehensive Loss Balances as of October 31, 2014 ($8,348 ) $59 ($8,289 ) Unrealized loss (16,273 ) — (16,273 ) Balances as of July 31, 2015 ($24,621 ) $59 ($24,562 ) |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Jul. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets Disclosure [Text Block] | GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill by operating segment for the nine months ended July 31, 2015 are as follows (in thousands): Segment Consolidated Totals FSG ETG Balances as of October 31, 2014 $282,407 $403,864 $686,271 Goodwill acquired 36,064 — 36,064 Foreign currency translation adjustments (1,704 ) (7,504 ) (9,208 ) Balances as of July 31, 2015 $316,767 $396,360 $713,127 The goodwill acquired pertains to the fiscal 2015 acquisitions described in Note 2, Acquisitions, and represents the residual value after the allocation of the total consideration to the tangible and identifiable intangible assets acquired and liabilities and noncontrolling interests assumed. The Company estimates that approximately $7 million of the goodwill acquired in fiscal 2015 will be deductible for income tax purposes. Identifiable intangible assets consist of the following (in thousands): As of July 31, 2015 As of October 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizing Assets: Customer relationships $156,119 ($60,058 ) $96,061 $144,478 ($55,393 ) $89,085 Intellectual property 83,760 (20,932 ) 62,828 73,005 (17,620 ) 55,385 Licenses 2,900 (1,810 ) 1,090 2,900 (1,645 ) 1,255 Non-compete agreements 915 (915 ) — 1,020 (1,020 ) — Patents 731 (432 ) 299 712 (405 ) 307 Trade names 166 (33 ) 133 166 (17 ) 149 244,591 (84,180 ) 160,411 222,281 (76,100 ) 146,181 Non-Amortizing Assets: Trade names 60,103 — 60,103 54,629 — 54,629 $304,694 ($84,180 ) $220,514 $276,910 ($76,100 ) $200,810 The increase in the gross carrying amount of customer relationships, intellectual property and non-amortizing trade names as of July 31, 2015 compared to October 31, 2014 principally relates to such intangible assets recognized in connection with the fiscal 2015 acquisitions (see Note 2, Acquisitions). The weighted-average amortization period of the customer relationships and intellectual property acquired during fiscal 2015 is 10 and 12 years, respectively. Amortization expense related to intangible assets for the nine months ended July 31, 2015 and 2014 was $19.7 million and $21.1 million , respectively. Amortization expense related to intangible assets for the three months ended July 31, 2015 and 2014 was $6.6 million and $7.0 million , respectively. Amortization expense related to intangible assets for the remainder of fiscal 2015 is estimated to be $6.5 million . Amortization expense for each of the next five fiscal years and thereafter is estimated to be $25.2 million in fiscal 2016, $24.3 million in fiscal 2017, $22.5 million in fiscal 2018, $20.6 million in fiscal 2019, $18.1 million in fiscal 2020, and $43.2 million thereafter. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Jul. 31, 2015 | |
Debt Disclosure [Abstract] | |
Long-term Debt [Text Block] | LONG-TERM DEBT Long-term debt consists of the following (in thousands): July 31, 2015 October 31, 2014 Borrowings under revolving credit facility $297,046 $326,000 Capital leases 2,423 3,109 299,469 329,109 Less: Current maturities of long-term debt (343 ) (418 ) $299,126 $328,691 During the first quarter of fiscal 2015, the Company elected to borrow €32 million under its revolving credit facility, which allows for borrowings made in foreign currencies up to a $50 million sublimit. The funds were used to facilitate an acquisition made during the same fiscal quarter. As of July 31, 2015, the United States ("U.S.") dollar equivalent of the Company's Euro borrowing was $35.0 million . As of July 31, 2015 and October 31, 2014, the weighted average interest rate on borrowings under the Company’s revolving credit facility was 1.3% . The revolving credit facility contains both financial and non-financial covenants. As of July 31, 2015, the Company was in compliance with all such covenants. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Jul. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | INCOME TAXES As of July 31, 2015, the Company’s liability for gross unrecognized tax benefits related to uncertain tax positions was $1.0 million of which $.7 million would decrease the Company’s income tax expense and effective income tax rate if the tax benefits were recognized. A reconciliation of the activity related to the liability for gross unrecognized tax benefits for the nine months ended July 31, 2015 is as follows (in thousands): Balance as of October 31, 2014 $879 Increases related to current year tax positions 114 Increases related to prior year tax positions 14 Lapse of statute of limitations (52 ) Balance as of July 31, 2015 $955 There were no material changes in the liability for unrecognized tax positions resulting from tax positions taken during the current or a prior year, settlements with other taxing authorities or a lapse of applicable statutes of limitations. The accrual of interest and penalties related to the unrecognized tax benefits was not material for the nine months ended July 31, 2015. Further, the Company does not expect the total amount of unrecognized tax benefits to materially change in the next twelve months. The Company’s effective tax rate in the first nine months of fiscal 2015 increased to 30.6% from 29.7% in the first nine months of fiscal 2014. The increase is principally due to the impact of a larger reduction in accrued contingent consideration in the first nine months of fiscal 2014 associated with a prior year acquisition acquired by means of a nontaxable stock transaction. This increase was partially offset by an income tax credit for qualified R&D activities for the last ten months of fiscal 2014 that was recognized in the first quarter of fiscal 2015 resulting from the retroactive extension of the U.S. federal R&D tax credit in December 2014 to cover calendar year 2014 and the benefit of recognizing additional foreign tax credits related to R&D activities at one of the Company's foreign subsidiaries inclusive of a prior year tax return amendment. The Company’s effective tax rate in the third quarter of fiscal 2015 increased to 32.0% from 23.4% in the third quarter of fiscal 2014. The increase is principally due to the impact of a larger reduction in accrued contingent consideration in the third quarter of fiscal 2014 compared to fiscal 2015 associated with a prior year acquisition acquired by means of a nontaxable stock transaction. The Company has not made a provision for U.S. income taxes on the undistributed earnings of a fiscal 2015 foreign acquisition as such earnings are considered permanently reinvested outside of the U.S. The amount of undistributed earnings is not material to the Company's condensed consolidated financial statements. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Jul. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | FAIR VALUE MEASUREMENTS The Company's assets and liabilities that were measured at fair value on a recurring basis are set forth by level within the fair value hierarchy in the following tables (in thousands): As of July 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Deferred compensation plans: Corporate owned life insurance $— $75,809 $— $75,809 Money market funds 2,482 — — 2,482 Equity securities 2,131 — — 2,131 Mutual funds 1,737 — — 1,737 Other 967 50 — 1,017 Total assets $7,317 $75,859 $— $83,176 Liabilities: Contingent consideration $— $— $20,622 $20,622 As of October 31, 2014 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Deferred compensation plans: Corporate owned life insurance $— $61,958 $— $61,958 Money market funds 3,974 — — 3,974 Equity securities 2,225 — — 2,225 Mutual funds 1,903 — — 1,903 Other 1,339 50 — 1,389 Total assets $9,441 $62,008 $— $71,449 Liabilities: Contingent consideration $— $— $1,184 $1,184 The Company maintains two non-qualified deferred compensation plans. The assets of the HEICO Corporation Leadership Compensation Plan (the “LCP”) principally represent cash surrender values of life insurance policies, which derive their fair values from investments in mutual funds that are managed by an insurance company and are classified within Level 2 and valued using a market approach. Certain other assets of the LCP represent investments in money market funds that are classified within Level 1. The assets of the Company’s other deferred compensation plan are principally invested in equity securities and mutual funds that are classified within Level 1. The assets of both plans are held within irrevocable trusts and classified within other assets in the Company’s Condensed Consolidated Balance Sheets and have an aggregate value of $83.2 million as of July 31, 2015 and $71.4 million as of October 31, 2014, of which the LCP related assets were $78.3 million and $65.9 million as of July 31, 2015 and October 31, 2014, respectively. The related liabilities of the two deferred compensation plans are included within other long-term liabilities in the Company’s Condensed Consolidated Balance Sheets and have an aggregate value of $82.2 million as of July 31, 2015 and $70.5 million as of October 31, 2014, of which the LCP related liability was $77.3 million and $65.0 million as of July 31, 2015 and October 31, 2014, respectively. As part of the agreement to acquire a subsidiary by the FSG in the first quarter of fiscal 2015, the Company may be obligated to pay contingent consideration of up to €24.4 million in aggregate, which translates to approximately $26.8 million based on the July 31, 2015 exchange rate, should the acquired entity meet certain earnings objectives during each of the first four years following the acquisition. The estimated fair value of the contingent consideration as of the acquisition date was €18.1 million , or approximately $21.3 million . As of July 31, 2015, the estimated fair value of the contingent consideration was €18.8 million , or $20.6 million . The $.7 million decrease is principally attributed to the strengthening of the U.S. dollar relative to the Euro partially offset by revised earnings estimates that reflect more favorable projected market conditions during the earnout period and was recorded as a reduction to selling, general and administrative expenses ("SG&A") in the Company's Condensed Consolidated Statement of Operations. As part of the agreement to acquire a subsidiary by the ETG in fiscal 2013, the Company may be obligated to pay contingent consideration of up to $30.0 million should the acquired entity meet certain earnings objectives during calendar years 2014 and 2015. The $1.2 million estimated fair value of the contingent consideration as of October 31, 2014 was recorded as a reduction to SG&A in the Company's Condensed Consolidated Statement of Operations in the second quarter of fiscal 2015. The decrease in the fair value of the contingent consideration is principally attributed to revised earnings estimates that reflect less favorable projected market conditions during the earnout period. The estimated fair value of the fiscal 2015 contingent consideration arrangement described above is classified within Level 3 and was determined using a probability-based scenario analysis approach. Under this method, a set of discrete potential future subsidiary earnings was determined using internal estimates based on various revenue growth rate assumptions for each scenario. A probability of likelihood was assigned to each discrete potential future earnings estimate and the resultant contingent consideration was calculated. The resulting probability-weighted contingent consideration amount was discounted using a weighted average discount rate reflecting the credit risk of a market participant. Changes in either the revenue growth rates, related earnings or the discount rate could result in a material change to the amount of contingent consideration accrued and such changes will be recorded in the Company's condensed consolidated statements of operations. The Level 3 inputs used to derive the estimated fair value of the Company's contingent consideration liability as of July 31, 2015 were as follows: Fiscal 2015 Acquisition Compound annual revenue growth rate range (3%) - 15% Weighted average discount rate 2.2% Changes in the Company’s contingent consideration liability measured at fair value on a recurring basis using unobservable inputs (Level 3) for the nine months ended July 31, 2015 are as follows (in thousands): Balance as of October 31, 2014 $1,184 Contingent consideration related to acquisition 21,355 Decrease in accrued contingent consideration, net (412 ) Foreign currency transaction adjustments (1,505 ) Balance as of July 31, 2015 $20,622 Included in the accompanying Condensed Consolidated Balance Sheet under the following captions: Accrued expenses and other current liabilities $6,119 Other long-term liabilities 14,503 $20,622 The Company did not have any transfers between Level 1 and Level 2 fair value measurements during the nine months ended July 31, 2015. The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, trade accounts payable and accrued expenses and other current liabilities approximate fair value as of July 31, 2015 due to the relatively short maturity of the respective instruments. The carrying amount of long-term debt approximates fair value due to its variable interest rates. |
NET INCOME PER SHARE ATTRIBUTAB
NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS | 9 Months Ended |
Jul. 31, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS The computation of basic and diluted net income per share attributable to HEICO shareholders is as follows (in thousands, except per share data): Nine months ended July 31, Three months ended July 31, 2015 2014 2015 2014 Numerator: Net income attributable to HEICO $95,114 $89,188 $34,369 $33,366 Denominator: Weighted average common shares outstanding - basic 66,706 66,442 66,813 66,497 Effect of dilutive stock options 1,084 985 1,088 977 Weighted average common shares outstanding - diluted 67,790 67,427 67,901 67,474 Net income per share attributable to HEICO shareholders: Basic $1.43 $1.34 $.51 $.50 Diluted $1.40 $1.32 $.51 $.49 Anti-dilutive stock options excluded 352 430 445 442 |
OPERATING SEGMENTS
OPERATING SEGMENTS | 9 Months Ended |
Jul. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | OPERATING SEGMENTS Information on the Company’s two operating segments, the FSG and the ETG, for the nine and three months ended July 31, 2015 and 2014, respectively, is as follows (in thousands): Other, Consolidated Segment FSG ETG Nine months ended July 31, 2015: Net sales $591,431 $277,439 ($8,894 ) $859,976 Depreciation and amortization 17,563 16,895 608 35,066 Operating income 107,498 65,996 (12,790 ) 160,704 Capital expenditures 9,000 4,457 310 13,767 Nine months ended July 31, 2014: Net sales $568,038 $279,298 ($7,248 ) $840,088 Depreciation and amortization 14,883 20,782 605 36,270 Operating income 103,323 62,495 (16,149 ) 149,669 Capital expenditures 7,339 4,364 558 12,261 Three months ended July 31, 2015: Net sales $206,599 $97,223 ($3,452 ) $300,370 Depreciation and amortization 6,402 5,317 206 11,925 Operating income 39,250 24,372 (5,112 ) 58,510 Capital expenditures 2,523 1,600 184 4,307 Three months ended July 31, 2014: Net sales $191,561 $102,065 ($2,596 ) $291,030 Depreciation and amortization 5,020 6,911 200 12,131 Operating income 34,234 21,455 (5,576 ) 50,113 Capital expenditures 3,083 1,605 88 4,776 Total assets by operating segment as of July 31, 2015 and October 31, 2014 are as follows (in thousands): Other, Consolidated Segment FSG ETG Total assets as of July 31, 2015 $790,103 $672,910 $125,401 $1,588,414 Total assets as of October 31, 2014 676,824 703,144 109,246 1,489,214 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Jul. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | COMMITMENTS AND CONTINGENCIES Guarantees As of July 31, 2015, the Company has arranged for standby letters of credit aggregating $2.3 million , which are supported by its revolving credit facility. One letter of credit in the amount of $1.5 million is to satisfy the security requirement of the insurance company used by the Company for potential workers' compensation claims and the remainder pertain to performance guarantees related to customer contracts entered into by certain of the Company's subsidiaries. Product Warranty Changes in the Company’s product warranty liability for the nine months ended July 31, 2015 and 2014, respectively, are as follows (in thousands): Nine months ended July 31, 2015 2014 Balances as of beginning of fiscal year $4,079 $3,233 Accruals for warranties 579 2,075 Acquired warranty liabilities 35 — Warranty claims settled (1,634 ) (1,429 ) Balances as of July 31 $3,059 $3,879 Litigation The Company is involved in various legal actions arising in the normal course of business. Based upon the Company’s and its legal counsel’s evaluations of any claims or assessments, management is of the opinion that the outcome of these matters will not have a material adverse effect on the Company’s results of operations, financial position or cash flows. |
SUBSEQUENT EVENTS SUBSEQUENT EV
SUBSEQUENT EVENTS SUBSEQUENT EVENTS | 9 Months Ended |
Jul. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | SUBSEQUENT EVENTS In August 2015 , the Company, through its HEICO Flight Support Corp. subsidiary, acquired 80.1% of the assets and assumed certain liabilities of Aerospace & Commercial Technologies , Inc. (“ACT”). ACT is a leading provider of products and services necessary to maintain up-to-date F-16 fighter aircraft operational capabilities. The remaining 19.9% continues to be owned by certain members of ACT’s management team. In August 2015 , the Company, through its HEICO Flight Support Corp. subsidiary, acquired all of the stock of Astroseal Products Mfg. Corporation (“Astroseal”). Astroseal makes expanded foil mesh which is integrated into composite aerospace structures for lighting strike protection in fixed and rotary wing aircraft. In August 2015 , the Company, through HEICO Electronic, acquired 80.1% of the equity of Midwest Microwave Solutions, Inc. (“MMS”). MMS designs, manufactures and sells unique Size, Weight, Power and Cost (SWAP-C) optimized Communications and Electronic Intercept Receivers and Tuners for military and intelligence applications. The remaining 19.9% continues to be owned by certain members of MMS’s management team. The purchase prices of these acquisitions were paid in cash principally using proceeds from the Company’s revolving credit facility and the total consideration for the acquisitions is not material or significant to the Company's condensed consolidated financial statements. The allocation of the total consideration to the tangible and identifiable intangible assets acquired and liabilities and noncontrolling interests assumed for these acquisitions is not material or significant to the Company’s condensed consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Jul. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation [Text Block] | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of HEICO Corporation and its subsidiaries (collectively, “HEICO,” or the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q. Therefore, the condensed consolidated financial statements do not include all information and footnotes normally included in annual consolidated financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended October 31, 2014. The October 31, 2014 Condensed Consolidated Balance Sheet has been derived from the Company’s audited consolidated financial statements. In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments (consisting principally of normal recurring accruals) necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, statements of comprehensive income, statements of shareholders' equity and statements of cash flows for such interim periods presented. The results of operations for the nine months ended July 31, 2015 are not necessarily indicative of the results which may be expected for the entire fiscal year. The Company has two operating segments: the Flight Support Group (“FSG”), consisting of HEICO Aerospace Holdings Corp. (“HEICO Aerospace”) and HEICO Flight Support Corp. and their collective subsidiaries; and the Electronic Technologies Group (“ETG”), consisting of HEICO Electronic Technologies Corp. (“HEICO Electronic”) and its subsidiaries. |
New Accounting Pronouncements [Text Block] | New Accounting Pronouncements In March 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-05, “Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity,” which clarifies the applicable guidance for the release of any cumulative translation adjustments into net earnings. ASU 2013-05 specifies that the entire amount of cumulative translation adjustments should be released into earnings when an entity ceases to have a controlling financial interest in a subsidiary or group of assets within a consolidated foreign entity and the sale or transfer results in the complete or substantially complete liquidation of the investment in the foreign entity. The Company adopted ASU 2013-05 in the first quarter of fiscal 2015, resulting in no impact on the Company's consolidated results of operations, financial position or cash flows. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which provides a comprehensive new revenue recognition model that will supersede nearly all existing revenue recognition guidance. Under ASU 2014-09, an entity will recognize revenue when it transfers promised goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. In August 2015, the FASB issued ASU 2015-14 which defers the effective date of ASU 2014-09 by one year. Accordingly, ASU 2014-09 is effective for fiscal years and interim reporting periods within those years beginning after December 15, 2017, or in fiscal 2019 for HEICO. Early adoption is not permitted. ASU 2014-09 shall be applied either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. The Company is currently evaluating which transition method it will elect and the effect the adoption of this guidance will have on its consolidated results of operations, financial position and cash flows. In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” which requires entities to measure inventories at the lower of cost or net realizable value. Under current guidance, inventories are measured at the lower of cost or market. ASU 2015-11 must be applied prospectively and is effective for fiscal years and interim reporting periods within those years beginning after December 15, 2016, or in fiscal 2018 for HEICO. Early adoption is permitted. The Company is currently evaluating the effect, if any, the adoption of this guidance will have on its consolidated results of operations, financial position and cash flows. |
SELECTED FINANCIAL STATEMENT 21
SELECTED FINANCIAL STATEMENT INFORMATION (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Selected Financial Statement Information [Abstract] | |
Schedule of Accounts Receivable [Table Text Block] | Accounts Receivable (in thousands) July 31, 2015 October 31, 2014 Accounts receivable $153,185 $151,812 Less: Allowance for doubtful accounts (2,255 ) (2,143 ) Accounts receivable, net $150,930 $149,669 |
Schedule of Costs in Excess of Billings and Billings in Excess of Costs [Table Text Block] | Costs and Estimated Earnings on Uncompleted Percentage-of-Completion Contracts (in thousands) July 31, 2015 October 31, 2014 Costs incurred on uncompleted contracts $22,814 $24,437 Estimated earnings 11,761 11,747 34,575 36,184 Less: Billings to date (35,284 ) (29,829 ) ($709 ) $6,355 Included in the accompanying Condensed Consolidated Balance Sheets under the following captions: Accounts receivable, net (costs and estimated earnings in excess of billings) $4,695 $8,161 Accrued expenses and other current liabilities (billings in excess of costs and estimated earnings) (5,404 ) (1,806 ) ($709 ) $6,355 |
Schedule of Inventory [Table Text Block] | Inventories (in thousands) July 31, 2015 October 31, 2014 Finished products $113,626 $106,229 Work in process 32,871 30,056 Materials, parts, assemblies and supplies 87,598 79,163 Contracts in process 4,508 2,594 Less: Billings to date (2,368 ) — Inventories, net of valuation reserves $236,235 $218,042 |
Schedule of Property, Plant and Equipment [Table Text Block] | Property, Plant and Equipment (in thousands) July 31, 2015 October 31, 2014 Land $4,954 $4,501 Buildings and improvements 69,091 60,332 Machinery, equipment and tooling 152,249 139,963 Construction in progress 6,630 6,905 232,924 211,701 Less: Accumulated depreciation and amortization (129,749 ) (117,836 ) Property, plant and equipment, net $103,175 $93,865 |
Schedule of Net Benefit Costs [Table Text Block] | The components of net pension income for the nine and three months ended July 31, 2015 and 2014 that were recorded within the Company's Condensed Consolidated Statements of Operations are as follows (in thousands): Nine months ended July 31, Three months ended July 31, 2015 2014 2015 2014 Expected return on plan assets $555 $555 $185 $185 Interest cost 420 459 140 153 Net pension income $135 $96 $45 $32 |
Schedule of Research and Development Expenses [Table Text Block] | The amount of new product research and development ("R&D") expenses included in cost of sales for the nine and three months ended July 31, 2015 and 2014 is as follows (in thousands): Nine months ended July 31, Three months ended July 31, 2015 2014 2015 2014 R&D expenses $28,860 $28,278 $9,421 $9,862 |
Schedule of Redeemable Noncontrolling Interests [Table Text Block] | Management's estimate of the aggregate redemption amount of all put rights (inclusive of the fiscal 2015 transactions described below) that the Company could be required to pay at varying dates through fiscal 2023 is as follows (in thousands): July 31, 2015 October 31, 2014 Redeemable at fair value $52,521 $27,666 Redeemable based on a multiple of future earnings 12,300 12,300 Redeemable noncontrolling interests $64,821 $39,966 |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | Changes in the components of accumulated other comprehensive loss for the nine months ended July 31, 2015 are as follows (in thousands): Foreign Currency Translation Pension Benefit Obligation Accumulated Other Comprehensive Loss Balances as of October 31, 2014 ($8,348 ) $59 ($8,289 ) Unrealized loss (16,273 ) — (16,273 ) Balances as of July 31, 2015 ($24,621 ) $59 ($24,562 ) |
GOODWILL AND OTHER INTANGIBLE22
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | Changes in the carrying amount of goodwill by operating segment for the nine months ended July 31, 2015 are as follows (in thousands): Segment Consolidated Totals FSG ETG Balances as of October 31, 2014 $282,407 $403,864 $686,271 Goodwill acquired 36,064 — 36,064 Foreign currency translation adjustments (1,704 ) (7,504 ) (9,208 ) Balances as of July 31, 2015 $316,767 $396,360 $713,127 |
Schedule Of Identifiable Intangible Assets [Table Text Block] | Identifiable intangible assets consist of the following (in thousands): As of July 31, 2015 As of October 31, 2014 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizing Assets: Customer relationships $156,119 ($60,058 ) $96,061 $144,478 ($55,393 ) $89,085 Intellectual property 83,760 (20,932 ) 62,828 73,005 (17,620 ) 55,385 Licenses 2,900 (1,810 ) 1,090 2,900 (1,645 ) 1,255 Non-compete agreements 915 (915 ) — 1,020 (1,020 ) — Patents 731 (432 ) 299 712 (405 ) 307 Trade names 166 (33 ) 133 166 (17 ) 149 244,591 (84,180 ) 160,411 222,281 (76,100 ) 146,181 Non-Amortizing Assets: Trade names 60,103 — 60,103 54,629 — 54,629 $304,694 ($84,180 ) $220,514 $276,910 ($76,100 ) $200,810 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | Long-term debt consists of the following (in thousands): July 31, 2015 October 31, 2014 Borrowings under revolving credit facility $297,046 $326,000 Capital leases 2,423 3,109 299,469 329,109 Less: Current maturities of long-term debt (343 ) (418 ) $299,126 $328,691 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Contingencies [Table Text Block] | A reconciliation of the activity related to the liability for gross unrecognized tax benefits for the nine months ended July 31, 2015 is as follows (in thousands): Balance as of October 31, 2014 $879 Increases related to current year tax positions 114 Increases related to prior year tax positions 14 Lapse of statute of limitations (52 ) Balance as of July 31, 2015 $955 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The Company's assets and liabilities that were measured at fair value on a recurring basis are set forth by level within the fair value hierarchy in the following tables (in thousands): As of July 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Deferred compensation plans: Corporate owned life insurance $— $75,809 $— $75,809 Money market funds 2,482 — — 2,482 Equity securities 2,131 — — 2,131 Mutual funds 1,737 — — 1,737 Other 967 50 — 1,017 Total assets $7,317 $75,859 $— $83,176 Liabilities: Contingent consideration $— $— $20,622 $20,622 As of October 31, 2014 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Deferred compensation plans: Corporate owned life insurance $— $61,958 $— $61,958 Money market funds 3,974 — — 3,974 Equity securities 2,225 — — 2,225 Mutual funds 1,903 — — 1,903 Other 1,339 50 — 1,389 Total assets $9,441 $62,008 $— $71,449 Liabilities: Contingent consideration $— $— $1,184 $1,184 |
Schedule of Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Table Text Block] | The Level 3 inputs used to derive the estimated fair value of the Company's contingent consideration liability as of July 31, 2015 were as follows: Fiscal 2015 Acquisition Compound annual revenue growth rate range (3%) - 15% Weighted average discount rate 2.2% |
Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | Changes in the Company’s contingent consideration liability measured at fair value on a recurring basis using unobservable inputs (Level 3) for the nine months ended July 31, 2015 are as follows (in thousands): Balance as of October 31, 2014 $1,184 Contingent consideration related to acquisition 21,355 Decrease in accrued contingent consideration, net (412 ) Foreign currency transaction adjustments (1,505 ) Balance as of July 31, 2015 $20,622 Included in the accompanying Condensed Consolidated Balance Sheet under the following captions: Accrued expenses and other current liabilities $6,119 Other long-term liabilities 14,503 $20,622 |
NET INCOME PER SHARE ATTRIBUT26
NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The computation of basic and diluted net income per share attributable to HEICO shareholders is as follows (in thousands, except per share data): Nine months ended July 31, Three months ended July 31, 2015 2014 2015 2014 Numerator: Net income attributable to HEICO $95,114 $89,188 $34,369 $33,366 Denominator: Weighted average common shares outstanding - basic 66,706 66,442 66,813 66,497 Effect of dilutive stock options 1,084 985 1,088 977 Weighted average common shares outstanding - diluted 67,790 67,427 67,901 67,474 Net income per share attributable to HEICO shareholders: Basic $1.43 $1.34 $.51 $.50 Diluted $1.40 $1.32 $.51 $.49 Anti-dilutive stock options excluded 352 430 445 442 |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Segment Reporting [Abstract] | |
Schedule Of Segment Reporting Information By Segment [Table Text Block] | Information on the Company’s two operating segments, the FSG and the ETG, for the nine and three months ended July 31, 2015 and 2014, respectively, is as follows (in thousands): Other, Consolidated Segment FSG ETG Nine months ended July 31, 2015: Net sales $591,431 $277,439 ($8,894 ) $859,976 Depreciation and amortization 17,563 16,895 608 35,066 Operating income 107,498 65,996 (12,790 ) 160,704 Capital expenditures 9,000 4,457 310 13,767 Nine months ended July 31, 2014: Net sales $568,038 $279,298 ($7,248 ) $840,088 Depreciation and amortization 14,883 20,782 605 36,270 Operating income 103,323 62,495 (16,149 ) 149,669 Capital expenditures 7,339 4,364 558 12,261 Three months ended July 31, 2015: Net sales $206,599 $97,223 ($3,452 ) $300,370 Depreciation and amortization 6,402 5,317 206 11,925 Operating income 39,250 24,372 (5,112 ) 58,510 Capital expenditures 2,523 1,600 184 4,307 Three months ended July 31, 2014: Net sales $191,561 $102,065 ($2,596 ) $291,030 Depreciation and amortization 5,020 6,911 200 12,131 Operating income 34,234 21,455 (5,576 ) 50,113 Capital expenditures 3,083 1,605 88 4,776 |
Schedule of Assets from Segment to Consolidated [Table Text Block] | Total assets by operating segment as of July 31, 2015 and October 31, 2014 are as follows (in thousands): Other, Consolidated Segment FSG ETG Total assets as of July 31, 2015 $790,103 $672,910 $125,401 $1,588,414 Total assets as of October 31, 2014 676,824 703,144 109,246 1,489,214 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Jul. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Product Warranty Liability [Table Text Block] | Changes in the Company’s product warranty liability for the nine months ended July 31, 2015 and 2014, respectively, are as follows (in thousands): Nine months ended July 31, 2015 2014 Balances as of beginning of fiscal year $4,079 $3,233 Accruals for warranties 579 2,075 Acquired warranty liabilities 35 — Warranty claims settled (1,634 ) (1,429 ) Balances as of July 31 $3,059 $3,879 |
ACQUISITIONS (Details Textuals)
ACQUISITIONS (Details Textuals) - Jul. 31, 2015 | Total |
Business Acquisition [Line Items] | |
Business Combination, Pro Forma Information, Disclosure Impracticable | The amount of net sales and earnings of the fiscal 2015 acquisitions included in the Condensed Consolidated Statements of Operations is not material. Had the fiscal 2015 acquisitions been consummated as of November 1, 2013, net sales, net income from consolidated operations, net income attributable to HEICO, and basic and diluted net income per share attributable to HEICO shareholders on a pro forma basis for the nine and three months ended July 31, 2015 and July 31, 2014 would not have been materially different than the reported amounts. |
Aeroworks [Member] | |
Business Acquisition [Line Items] | |
Percentage of Voting Interests Acquired | 80.00% |
Harter [Member] | |
Business Acquisition [Line Items] | |
Percentage of Voting Interests Acquired | 80.10% |
Heico Flight Support Corp [Member] | Aeroworks [Member] | |
Business Acquisition [Line Items] | |
Effective Date of Acquisition | Jan. 31, 2015 |
Name of Acquired Entity | Aeroworks International Holdings, B.V. |
Percentage of Voting Interests Acquired | 80.00% |
Description of Acquired Entity | Aeroworks, which is headquartered in The Netherlands and maintains a significant portion of its production facilities in Thailand and Laos, is a manufacturer of both composite and metal parts used primarily in aircraft interior applications, including seating, galleys, lavatories, doors, and overhead bins. |
Ownership Percentage by Noncontrolling Owners | 20.00% |
Contingent Consideration Arrangements, Description | The total consideration includes an accrual representing the estimated fair value of contingent consideration that the Company may be obligated to pay should Aeroworks meet certain earnings objectives during each of the first four years following the acquisition. |
Heico Flight Support Corp [Member] | Harter [Member] | |
Business Acquisition [Line Items] | |
Effective Date of Acquisition | Jan. 31, 2015 |
Name of Acquired Entity | Harter Aerospace, LLC |
Percentage of Voting Interests Acquired | 80.10% |
Description of Acquired Entity | Harter is a globally recognized component and accessory maintenance, repair, and overhaul (MRO) station specializing in commercial aircraft accessories, including thrust reverse actuation systems and pneumatics, and electromechanical components. |
Ownership Percentage by Noncontrolling Owners | 19.90% |
Heico Flight Support Corp [Member] | TEP [Member] | |
Business Acquisition [Line Items] | |
Effective Date of Acquisition | May 1, 2015 |
Name of Acquired Entity | Thermal Energy Products, Inc. |
Description of Acquired Entity | TEP engineers, designs and manufactures removable/reusable insulation systems for industrial, commercial, aerospace and defense applications. |
SELECTED FINANCIAL STATEMENT 30
SELECTED FINANCIAL STATEMENT INFORMATION (Accounts Receivable) (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Oct. 31, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 153,185 | $ 151,812 |
Less: Allowance for doubtful accounts | (2,255) | (2,143) |
Accounts receivable, net | $ 150,930 | $ 149,669 |
SELECTED FINANCIAL STATEMENT 31
SELECTED FINANCIAL STATEMENT INFORMATION (Costs and Estimated Earnings on Uncompleted POC Contracts) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Jul. 31, 2015 | Oct. 31, 2014 | |
Costs incurred on uncompleted contracts | $ 22,814 | $ 24,437 |
Estimated Earnings | 11,761 | 11,747 |
Estimated Revenue on Completed Percentage-of-Completion Contracts | 34,575 | 36,184 |
Billings to date | (35,284) | (29,829) |
Provision for Loss on Contracts | (709) | |
Receivables, Long-term Contracts or Programs | 6,355 | |
Included in the accompanying Condensed Consolidated Balance Sheets under the following captions: | ||
Accounts receivable, net (costs and estimated earnings in excess of billings) | 4,695 | 8,161 |
Accrued expenses and other current liabilities (billings in excess of costs and estimated earnings) | (5,404) | (1,806) |
Provision for Loss on Contracts | $ (709) | |
Receivables, Long-term Contracts or Programs | $ 6,355 |
SELECTED FINANCIAL STATEMENT 32
SELECTED FINANCIAL STATEMENT INFORMATION (Inventories) (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Oct. 31, 2014 |
Inventory [Line Items] | ||
Finished products | $ 113,626 | $ 106,229 |
Work in process | 32,871 | 30,056 |
Materials, parts, assemblies and supplies | 87,598 | 79,163 |
Contracts in process | 4,508 | 2,594 |
Less: Billings to date | (2,368) | 0 |
Inventories, net of valuation reserves | $ 236,235 | $ 218,042 |
SELECTED FINANCIAL STATEMENT 33
SELECTED FINANCIAL STATEMENT INFORMATION (Property, Plant and Equipment) (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Oct. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Land | $ 4,954 | $ 4,501 |
Buildings and improvements | 69,091 | 60,332 |
Machinery, equipment and tooling | 152,249 | 139,963 |
Construction in progress | 6,630 | 6,905 |
Property, plant and equipment, gross | 232,924 | 211,701 |
Less: Accumulated depreciation and amortization | (129,749) | (117,836) |
Property, plant and equipment, net | $ 103,175 | $ 93,865 |
SELECTED FINANCIAL STATEMENT 34
SELECTED FINANCIAL STATEMENT INFORMATION SELECTED FINANCIAL STATEMENT INFORMATION (Employee Retirement Plan) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Expected return on plan assets | $ 185 | $ 185 | $ 555 | $ 555 |
Interest cost | 140 | 153 | 420 | 459 |
Net pension income | $ 45 | $ 32 | $ 135 | $ 96 |
SELECTED FINANCIAL STATEMENT 35
SELECTED FINANCIAL STATEMENT INFORMATION SELECTED FINANCIAL STATEMENT INFORMATION (Research and Development Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Selected Financial Statement Information (Details) [Abstract] | ||||
R&D expenses | $ 9,421 | $ 9,862 | $ 28,860 | $ 28,278 |
SELECTED FINANCIAL STATEMENT 36
SELECTED FINANCIAL STATEMENT INFORMATION SELECTED FINANCIAL STATEMENT INFORMATION (Redeemable Noncontrolling Interests) (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Oct. 31, 2014 |
Selected Financial Statement Information (Details) [Abstract] | ||
Redeemable at fair value | $ 52,521 | $ 27,666 |
Redeemable Noncontrolling Interest [Line Items] | ||
Redeemable at fair value | 12,300 | 12,300 |
Redeemable noncontrolling interests | $ 64,821 | $ 39,966 |
SELECTED FINANCIAL STATEMENT 37
SELECTED FINANCIAL STATEMENT INFORMATION SELECTED FINANCIAL STATEMENT INFORMATION (Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Starting accumulated other comprehensive loss | $ (8,289) | |||
Other Comprehensive Income (Loss), Net of Tax | $ (5,442) | $ (2,064) | (17,177) | $ (2,715) |
Ending accumulated other comprehensive loss | (24,562) | (24,562) | ||
Foreign Currency Translation [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Starting accumulated other comprehensive loss | (8,348) | |||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | (16,273) | |||
Ending accumulated other comprehensive loss | (24,621) | (24,621) | ||
Pension Benefit Obligation [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Starting accumulated other comprehensive loss | 59 | |||
Other Comprehensive Income (Loss), Net of Tax | 0 | |||
Ending accumulated other comprehensive loss | 59 | 59 | ||
Accumulated Other Comprehensive Income (Loss) [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Starting accumulated other comprehensive loss | (8,289) | |||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | (16,273) | |||
Ending accumulated other comprehensive loss | $ (24,562) | $ (24,562) |
SELECTED FINANCIAL STATEMENT 38
SELECTED FINANCIAL STATEMENT INFORMATION (Details Textuals) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | Oct. 31, 2014 | |
Business Acquisition [Line Items] | |||||
Accrued customer rebates and credits | $ 7.8 | $ 7.8 | $ 10.9 | ||
Total customer rebates and credits deducted within net sales | $ 1.4 | $ 1.9 | $ 4.3 | $ 5.3 | |
Aeroworks [Member] | |||||
Business Acquisition [Line Items] | |||||
Percentage of Voting Interests Acquired | 80.00% | 80.00% | |||
Harter [Member] | |||||
Business Acquisition [Line Items] | |||||
Percentage of Voting Interests Acquired | 80.10% | 80.10% |
GOODWILL AND OTHER INTANGIBLE39
GOODWILL AND OTHER INTANGIBLE ASSETS (Goodwill) (Details) $ in Thousands | 9 Months Ended |
Jul. 31, 2015USD ($) | |
Goodwill [Line Items] | |
Balances as of October 31, 2014 | $ 686,271 |
Goodwill acquired | 36,064 |
Foreign currency translation adjustments | (9,208) |
Balances as of July 31, 2015 | 713,127 |
Flight Support Group [Member] | |
Goodwill [Line Items] | |
Balances as of October 31, 2014 | 282,407 |
Goodwill acquired | 36,064 |
Foreign currency translation adjustments | (1,704) |
Balances as of July 31, 2015 | 316,767 |
Electronic Technologies Group [Member] | |
Goodwill [Line Items] | |
Balances as of October 31, 2014 | 403,864 |
Goodwill acquired | 0 |
Foreign currency translation adjustments | (7,504) |
Balances as of July 31, 2015 | $ 396,360 |
GOODWILL AND OTHER INTANGIBLE40
GOODWILL AND OTHER INTANGIBLE ASSETS (Identifiable Intangible Assets) (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Oct. 31, 2014 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | $ 244,591 | $ 222,281 |
Accumulated Amortization | (84,180) | (76,100) |
Net Carrying Amount | 160,411 | 146,181 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Intangible Asset Gross Carrying Amount | 304,694 | 276,910 |
Intangible Asset Net Carrying Amount | 220,514 | 200,810 |
Trade Names [Member] | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | 60,103 | 54,629 |
Net Carrying Amount | 60,103 | 54,629 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 156,119 | 144,478 |
Accumulated Amortization | (60,058) | (55,393) |
Net Carrying Amount | 96,061 | 89,085 |
Intellectual Property [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 83,760 | 73,005 |
Accumulated Amortization | (20,932) | (17,620) |
Net Carrying Amount | 62,828 | 55,385 |
Licensing Agreements [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 2,900 | 2,900 |
Accumulated Amortization | (1,810) | (1,645) |
Net Carrying Amount | 1,090 | 1,255 |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 915 | 1,020 |
Accumulated Amortization | (915) | (1,020) |
Net Carrying Amount | 0 | 0 |
Patents [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 731 | 712 |
Accumulated Amortization | (432) | (405) |
Net Carrying Amount | 299 | 307 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 166 | 166 |
Accumulated Amortization | (33) | (17) |
Net Carrying Amount | $ 133 | $ 149 |
GOODWILL AND OTHER INTANGIBLE41
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Textuals) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | $ 7 | $ 7 | ||
Amortization expense related to intangible assets | 6.6 | $ 7 | 19.7 | $ 21.1 |
Estimated Amortization Expense, remainder of fiscal 2015 | 6.5 | 6.5 | ||
Estimated Amortization Expense, for fiscal 2016 | 25.2 | 25.2 | ||
Estimated Amortization Expense, for fiscal 2017 | 24.3 | 24.3 | ||
Estimated Amortization Expense, for fiscal 2018 | 22.5 | 22.5 | ||
Estimated Amortization Expense, for fiscal 2019 | 20.6 | 20.6 | ||
Estimated Amortization Expense, for fiscal 2020 | 18.1 | 18.1 | ||
Estimated Amortization Expense, thereafter | $ 43.2 | $ 43.2 | ||
Customer Relationships [Member] | ||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | |||
Intellectual Property [Member] | ||||
Acquired Indefinite-lived Intangible Assets [Line Items] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 12 years |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Oct. 31, 2014 |
Borrowings under revolving credit facility | $ 297,046 | $ 326,000 |
Capital leases | 2,423 | 3,109 |
Total debt and capital leases | 299,469 | 329,109 |
Less: Current maturities of long-term debt | (343) | (418) |
Long-term debt, net of current maturities | $ 299,126 | $ 328,691 |
LONG-TERM DEBT (Details Textual
LONG-TERM DEBT (Details Textuals) € in Millions, $ in Millions | Jul. 31, 2015EUR (€) | Jul. 31, 2015USD ($) | Oct. 31, 2014 |
Foreign Line of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 50 | ||
Long-term Debt | $ 35 | ||
Foreign Line of Credit [Member] | Euro Member Countries, Euro | |||
Debt Instrument [Line Items] | |||
Long-term Debt | € | € 32 | ||
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 1.30% | 1.30% | 1.30% |
INCOME TAXES (Details)
INCOME TAXES (Details) $ in Thousands | 9 Months Ended |
Jul. 31, 2015USD ($) | |
Income Tax Contingency [Line Items] | |
Balance as of October 31, 2014 | $ 879 |
Increases related to current year tax positions | 114 |
Increases related to prior year tax positions | 14 |
Lapse of statute of limitations | (52) |
Balance as of July 31, 2015 | $ 955 |
INCOME TAXES (Details Textuals)
INCOME TAXES (Details Textuals) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | Oct. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||||
Unrecognized tax benefits on uncertain tax position | $ 955 | $ 955 | $ 879 | ||
Unrecognized tax benefits that would impact effective tax rate | $ 700 | $ 700 | |||
Effective Income Tax Rate, Continuing Operations | 30.00% | 23.40% | 30.60% | 29.70% |
FAIR VALUE MEASUREMENTS (Fair V
FAIR VALUE MEASUREMENTS (Fair Value Hierarchy, by Category) (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Oct. 31, 2014 |
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | $ 83,176 | $ 71,449 |
Liabilities: | ||
Contingent consideration | 20,622 | 1,184 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 7,317 | 9,441 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 75,859 | 62,008 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 0 | 0 |
Liabilities: | ||
Contingent consideration | 20,622 | 1,184 |
Corporate Owned Life Insurance [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 75,809 | 61,958 |
Corporate Owned Life Insurance [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 0 | 0 |
Corporate Owned Life Insurance [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 75,809 | 61,958 |
Corporate Owned Life Insurance [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 0 | 0 |
Money Market Funds [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 2,482 | 3,974 |
Money Market Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 2,482 | 3,974 |
Money Market Funds [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 0 | 0 |
Money Market Funds [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 0 | 0 |
Equity Securities [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 2,131 | 2,225 |
Equity Securities [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 2,131 | 2,225 |
Equity Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 0 | 0 |
Equity Securities [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 0 | 0 |
Equity Funds [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 1,737 | 1,903 |
Equity Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 1,737 | 1,903 |
Equity Funds [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 0 | 0 |
Equity Funds [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 0 | 0 |
Other Defined Deferred Compensation Plan [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 1,017 | 1,389 |
Other Defined Deferred Compensation Plan [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 967 | 1,339 |
Other Defined Deferred Compensation Plan [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 50 | 50 |
Other Defined Deferred Compensation Plan [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS FAIR VA
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Level 3 Valuation Inputs) (Details) - FY 2015 Acquisition [Member] - Fair Value, Inputs, Level 3 [Member] | 9 Months Ended |
Jul. 31, 2015 | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Fair Value Inputs, Discount Rate | 2.20% |
Minimum [Member] | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Negative Long-term Revenue Growth Rate | (3.00%) |
Maximum [Member] | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |
Fair Value Inputs, Long-term Revenue Growth Rate | 15.00% |
FAIR VALUE MEASUREMENTS (Contin
FAIR VALUE MEASUREMENTS (Contingent Consideration Liability) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 31, 2015 | Oct. 31, 2014 | |
Liabilities [Abstract] | ||
Accrued Liabilities, Current | $ 91,390 | $ 92,578 |
Other Liabilities, Noncurrent | 106,437 | 82,289 |
Total liabilities | 667,011 | $ 674,629 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Balances as of October 31, 2014, Liabilities | 1,184 | |
Business Combination, Consideration Transferred, Liabilities Incurred | 21,355 | |
Increase in accrued contingent consideration | (412) | |
Balances as of July 31, 2015, Liabilities | 20,622 | |
Liabilities [Abstract] | ||
Accrued Liabilities, Current | 6,119 | |
Other Liabilities, Noncurrent | 14,503 | |
Total liabilities | 20,622 | |
Foreign Currency Gain (Loss) [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Liabilities Measured on Recurring Basis, Change in Unrealized Gain (Loss) | $ (1,505) |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details Textuals) $ in Thousands, € in Millions | 9 Months Ended | ||||
Jul. 31, 2015USD ($) | Jul. 31, 2015EUR (€) | Jul. 31, 2015USD ($) | Jan. 31, 2015USD ($) | Oct. 31, 2014USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Business Combination, Contingent Consideration, Liability | $ 20,622 | $ 1,184 | |||
Assets held within irrevocable trusts and classified within other assets | 83,176 | 71,449 | |||
Related liabilities of deferred compensation plans, specified as other long-term liabilities | 82,200 | 70,500 | |||
Aggregate LCP Assets [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Assets held within irrevocable trusts and classified within other assets | 78,300 | 65,900 | |||
Related liabilities of deferred compensation plans, specified as other long-term liabilities | 77,300 | 65,000 | |||
Significant Other Observable Inputs (Level 2) [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Business Combination, Contingent Consideration, Liability | 0 | 0 | |||
Assets held within irrevocable trusts and classified within other assets | 75,859 | 62,008 | |||
Significant Unobservable Inputs (Level 3) [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Business Combination, Contingent Consideration, Liability | 20,622 | 1,184 | |||
Assets held within irrevocable trusts and classified within other assets | 0 | $ 0 | |||
Flight Support Group [Member] | FY 2015 Acquisition [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Business Combination, Contingent Consideration, Liability | 20,600 | $ 21,300 | |||
Foreign Currency Transaction Loss, before Tax | $ 700 | ||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 26,800 | ||||
Flight Support Group [Member] | Euro Member Countries, Euro | FY 2015 Acquisition [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Business Combination, Contingent Consideration, Liability | 18,800 | $ 18,100 | |||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | € | € 24.4 | ||||
Electronic Technologies Group [Member] | FY 2013 Acquisition [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 30,000 |
NET INCOME PER SHARE ATTRIBUT50
NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Numerator: | ||||
Net income attributable to HEICO | $ 34,369 | $ 33,366 | $ 95,114 | $ 89,188 |
Denominator: | ||||
Weighted Average Number of Shares Outstanding, Basic | 66,813 | 66,497 | 66,706 | 66,442 |
Effect of dilutive stock options | 1,088 | 977 | 1,084 | 985 |
Weighted Average Number of Shares Outstanding, Diluted | 67,901 | 67,474 | 67,790 | 67,427 |
Earnings Per Share, Basic | $ 0.51 | $ 0.50 | $ 1.43 | $ 1.34 |
Earnings Per Share, Diluted | $ 0.51 | $ 0.49 | $ 1.40 | $ 1.32 |
Anti-dilutive stock options excluded | 445 | 442 | 352 | 430 |
OPERATING SEGMENTS (Details)
OPERATING SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 300,370 | $ 291,030 | $ 859,976 | $ 840,088 |
Depreciation and amortization | 11,925 | 12,131 | 35,066 | 36,270 |
Operating income | 58,510 | 50,113 | 160,704 | 149,669 |
Capital expenditures | 4,307 | 4,776 | 13,767 | 12,261 |
Flight Support Group [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 206,599 | 191,561 | 591,431 | 568,038 |
Depreciation and amortization | 6,402 | 5,020 | 17,563 | 14,883 |
Operating income | 39,250 | 34,234 | 107,498 | 103,323 |
Capital expenditures | 2,523 | 3,083 | 9,000 | 7,339 |
Electronic Technologies Group [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 97,223 | 102,065 | 277,439 | 279,298 |
Depreciation and amortization | 5,317 | 6,911 | 16,895 | 20,782 |
Operating income | 24,372 | 21,455 | 65,996 | 62,495 |
Capital expenditures | 1,600 | 1,605 | 4,457 | 4,364 |
Other Primarily Corporate and Intersegment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | (3,452) | (2,596) | (8,894) | (7,248) |
Depreciation and amortization | 206 | 200 | 608 | 605 |
Operating income | (5,112) | (5,576) | (12,790) | (16,149) |
Capital expenditures | $ 184 | $ 88 | $ 310 | $ 558 |
OPERATING SEGMENTS (Details 1)
OPERATING SEGMENTS (Details 1) - USD ($) $ in Thousands | Jul. 31, 2015 | Oct. 31, 2014 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 1,588,414 | $ 1,489,214 |
Flight Support Group [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 790,103 | 676,824 |
Electronic Technologies Group [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 672,910 | 703,144 |
Other Primarily Corporate and Intersegment [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 125,401 | $ 109,246 |
COMMITMENTS AND CONTINGENCIES53
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Jul. 31, 2015 | Jul. 31, 2014 | |
Schedule of Product Warranties [Line Items] | ||
Balances as of beginning of fiscal year | $ 4,079 | $ 3,233 |
Accruals for warranties | 579 | 2,075 |
Acquired warranty liabilities | 35 | 0 |
Warranty claims settled | (1,634) | (1,429) |
Balances as of July 31 | $ 3,059 | $ 3,879 |
COMMITMENTS AND CONTINGENCIES54
COMMITMENTS AND CONTINGENCIES (Details Textuals) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2015 | Jul. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 2,300 | $ 2,300 | ||
Standby letter of credit to meet the security requirement of its insurance company for potential workers'compensation claims | 1,500 | |||
New product research and development expenses | $ 9,421 | $ 9,862 | $ 28,860 | $ 28,278 |
SUBSEQUENT EVENTS SUBSEQUENT 55
SUBSEQUENT EVENTS SUBSEQUENT EVENTS (Details) - Aug. 01, 2015 - Subsequent Event [Member] | Total |
Electronic Technologies Group [Member] | Midwest Microwave Solutions [Member] | |
Subsequent Event [Line Items] | |
Effective Date of Acquisition | Aug. 1, 2015 |
Name of Acquired Entity | Midwest Microwave Solutions, Inc. |
Description of Acquired Entity | MMS designs, manufactures and sells unique Size, Weight, Power and Cost (SWAP-C) optimized Communications and Electronic Intercept Receivers and Tuners for military and intelligence applications. |
Percentage of Voting Interests Acquired | 80.10% |
Ownership Percentage by Noncontrolling Owners | 19.90% |
Heico Flight Support Corp [Member] | Aerospace & Commercial Technologies [Member] | |
Subsequent Event [Line Items] | |
Effective Date of Acquisition | Aug. 1, 2015 |
Name of Acquired Entity | Aerospace & Commercial Technologies |
Description of Acquired Entity | ACT is a leading provider of products and services necessary to maintain up-to-date F-16 fighter aircraft operational capabilities. |
Percentage of Voting Interests Acquired | 80.10% |
Ownership Percentage by Noncontrolling Owners | 19.90% |
Heico Flight Support Corp [Member] | Astroseal Products Manufacturing Corp [Member] | |
Subsequent Event [Line Items] | |
Effective Date of Acquisition | Aug. 1, 2015 |
Name of Acquired Entity | Astroseal Products Mfg. Corporation |
Description of Acquired Entity | Astroseal makes expanded foil mesh which is integrated into composite aerospace structures for lighting strike protection in fixed and rotary wing aircraft. |