DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - $ / shares | 3 Months Ended | |
Apr. 30, 2020 | May 26, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Shell Company | false | |
Local Phone Number | 987-4000 | |
Entity File Number | 001-04604 | |
City Area Code | 954 | |
Entity Interactive Data Current | Yes | |
Amendment Flag | false | |
Document Period End Date | Apr. 30, 2020 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2020 | |
Entity Current Reporting Status | Yes | |
Entity Information [Line Items] | ||
Entity Incorporation, State or Country Code | FL | |
Entity Registrant Name | HEICO CORPORATION | |
Address | 3000 Taft Street | |
Entity Address, City or Town | Hollywood | |
State | FL | |
Zip Code | 33021 | |
Entity Central Index Key | 0000046619 | |
Entity Tax Identification Number | 65-0341002 | |
Current Fiscal Year End Date | --10-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Heico Common Stock [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Stock, $.01 par value per share | |
Security Exchange Name | NYSE | |
Trading Symbol | HEI | |
Entity Common Stock, Shares Outstanding | 54,182,069 | |
Entity Common Stock Par Value | $ 0.01 | |
Common Class A [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Class A Common Stock, $.01 par value per share | |
Security Exchange Name | NYSE | |
Trading Symbol | HEI.A | |
Entity Common Stock, Shares Outstanding | 80,569,960 | |
Entity Common Stock Par Value | $ 0.01 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED - USD ($) $ in Thousands | Apr. 30, 2020 | Oct. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 346,786 | $ 57,001 |
Accounts receivable, net | 230,884 | 274,326 |
Contract assets | 56,033 | 43,132 |
Inventories, net | 457,819 | 420,319 |
Prepaid expenses and other current assets | 33,991 | 18,953 |
Total current assets | 1,125,513 | 813,731 |
Property, plant and equipment, net | 171,399 | 173,345 |
Goodwill | 1,300,187 | 1,268,703 |
Intangible assets, net | 540,623 | 550,693 |
Other assets | 227,113 | 162,739 |
Total assets | 3,364,835 | 2,969,211 |
Current liabilities: | ||
Current maturities of long-term debt | 1,025 | 906 |
Trade accounts payable | 108,397 | 106,225 |
Accrued expenses and other current liabilities | 145,345 | 178,957 |
Income taxes payable | 1,586 | 3,050 |
Total current liabilities | 256,353 | 289,138 |
Long-term debt, net of current maturities | 739,188 | 561,049 |
Deferred income taxes | 49,749 | 51,496 |
Other long-term liabilities | 233,518 | 184,604 |
Total liabilities | 1,278,808 | 1,086,287 |
Commitments and contingencies | ||
Redeemable noncontrolling interests | 196,507 | 188,264 |
Shareholders' equity: | ||
Preferred Stock, $.01 par value per share; 10,000 shares authorized; none issued | 0 | 0 |
Common Stock | 542 | 541 |
Capital in excess of par value | 297,324 | 284,609 |
Deferred compensation obligation | 4,232 | 4,232 |
HEICO stock held by irrevocable trust | (4,232) | (4,232) |
Accumulated other comprehensive loss | (23,804) | (16,739) |
Retained earnings | 1,583,646 | 1,397,327 |
Total HEICO shareholders' equity | 1,858,514 | 1,666,542 |
Noncontrolling interests | 31,006 | 28,118 |
Total shareholders' equity | 1,889,520 | 1,694,660 |
Total liabilities and equity | 3,364,835 | 2,969,211 |
Class A Common Stock [Member] | ||
Shareholders' equity: | ||
Common Stock | $ 806 | $ 804 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED [PARENTHETICAL] - $ / shares shares in Thousands | Apr. 30, 2020 | Oct. 31, 2019 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 10,000 | 10,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000 | 150,000 |
Common stock, shares issued | 54,182 | 54,143 |
Common stock, shares outstanding | 54,182 | 54,143 |
Class A Common Stock [Member] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000 | 150,000 |
Common stock, shares issued | 80,555 | 80,353 |
Common stock, shares outstanding | 80,555 | 80,353 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2020 | Apr. 30, 2019 | Apr. 30, 2020 | Apr. 30, 2019 | |
Net sales | $ 468,146 | $ 515,648 | $ 974,421 | $ 981,794 |
Operating costs and expenses: | ||||
Cost of sales | 289,256 | 306,261 | 597,484 | 590,170 |
Selling, general and administrative expenses | 70,729 | 90,204 | 157,786 | 174,494 |
Total operating costs and expenses | 359,985 | 396,465 | 755,270 | 764,664 |
Operating income | 108,161 | 119,183 | 219,151 | 217,130 |
Interest expense | (3,759) | (5,484) | (8,042) | (10,973) |
Other (expense) income | 107 | 2,484 | 302 | 2,152 |
Income before income taxes and noncontrolling interests | 104,509 | 116,183 | 211,411 | 208,309 |
Income tax expense | 23,600 | 26,100 | 700 | 30,200 |
Net income from consolidated operations | 80,909 | 90,083 | 210,711 | 178,109 |
Less: Net income attributable to noncontrolling interests | 5,456 | 8,301 | 13,370 | 16,995 |
Net income attributable to HEICO | $ 75,453 | $ 81,782 | $ 197,341 | $ 161,114 |
Net income per share attributable to HEICO shareholders: | ||||
Basic (in dollars per share) | $ 0.56 | $ 0.61 | $ 1.47 | $ 1.21 |
Diluted (in dollars per share) | $ 0.55 | $ 0.60 | $ 1.44 | $ 1.18 |
Weighted average number of common shares outstanding: | ||||
Basic (in shares) | 134,669 | 133,313 | 134,596 | 133,123 |
Diluted (in shares) | 137,117 | 137,206 | 137,269 | 137,092 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2020 | Apr. 30, 2019 | Apr. 30, 2020 | Apr. 30, 2019 | |
Net income from consolidated operations | $ 80,909 | $ 90,083 | $ 210,711 | $ 178,109 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (4,721) | (5,636) | (7,399) | (1,262) |
Amortization of unrealized loss on defined benefit pension plan, net of tax | 15 | 6 | 39 | 12 |
Total other comprehensive income (loss) | (4,706) | (5,630) | (7,360) | (1,250) |
Comprehensive income from consolidated operations | 76,203 | 84,453 | 203,351 | 176,859 |
Less: Comprehensive income attributable to noncontrolling interests | 5,456 | 8,301 | 13,370 | 16,995 |
Less: Foreign currency translation adjustments attributable to noncontrolling interests | (165) | (347) | (295) | (154) |
Comprehensive income attributable to noncontrolling interests | 5,291 | 7,954 | 13,075 | 16,841 |
Comprehensive income attributable to HEICO | $ 70,912 | $ 76,499 | $ 190,276 | $ 160,018 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME - UNAUDITED - USD ($) $ in Thousands | Total | Redeemable Noncontrolling Interests [Member] | Redeemable Noncontrolling Interests [Member]Cumulative Effect, Period of Adoption, Adjustment | 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] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Retained Earnings [Member]Cumulative Effect, Period of Adoption, Adjustment | Noncontrolling Interest [Member] | Noncontrolling Interest [Member]Cumulative Effect, Period of Adoption, Adjustment | Total Shareholders Equity [Member] | Total Shareholders Equity [Member]Cumulative Effect, Period of Adoption, Adjustment |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 534 | $ 796 | $ 320,994 | $ 3,928 | $ (3,928) | $ (15,256) | $ 1,091,183 | $ 104,757 | $ 1,503,008 | ||||||
Beginning Balance at Oct. 31, 2018 | 534 | 796 | 320,994 | 3,928 | (3,928) | (15,256) | 1,091,183 | 104,757 | 1,503,008 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 538 | 800 | 310,201 | 4,043 | (4,043) | (16,352) | 1,251,699 | 115,278 | 1,662,164 | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | Accounting Standards Update 2014-09 [Member] | $ 13,373 | $ 326 | $ 13,699 | ||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | $ 160,018 | (1,096) | 161,114 | ||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | 16,841 | $ 8,224 | 8,617 | ||||||||||||
Comprehensive income | 176,859 | 168,635 | |||||||||||||
Cash dividends | (9,305) | (9,305) | |||||||||||||
Issuance of common stock to Savings and Investment Plan | 6,390 | 6,390 | |||||||||||||
Share-based compensation expense | 4,987 | 4,987 | |||||||||||||
Proceeds from stock option exercises | 7 | 4 | 5,528 | ||||||||||||
Proceeds from stock option exercises, Adjustment to Additional Paid in Capital | 5,517 | ||||||||||||||
Stock Redeemed or Called During Period, Value | (3) | (27,741) | (27,744) | ||||||||||||
Noncontrolling Interest, Increase from Business Combination | 13,079 | 2,382 | 2,382 | ||||||||||||
Distributions to noncontrolling interests | (7,384) | (806) | (806) | ||||||||||||
Adjustments to redemption amount of redeemable noncontrolling interests | 4,666 | (4,666) | (4,666) | ||||||||||||
Deferred compensation obligation | (115) | ||||||||||||||
Stock Issued During Period Value Deferred Compensation Obligation | 115 | ||||||||||||||
Stockholders' Equity, Other | 2 | 56 | |||||||||||||
Adjustments to Additional Paid in Capital, Other | 54 | ||||||||||||||
Ending Balance at Apr. 30, 2019 | 538 | 800 | 310,201 | 4,043 | (4,043) | (16,352) | 1,251,699 | 115,278 | 1,662,164 | ||||||
Ending Balance (Accounting Standards Update 2014-09 [Member]) at Apr. 30, 2019 | 13,373 | 326 | 13,699 | ||||||||||||
Starting Balance, Redeemable Noncontrolling Interests at Oct. 31, 2018 | 132,046 | ||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | 16,841 | 8,224 | 8,617 | ||||||||||||
Noncontrolling Interest, Increase from Business Combination | 13,079 | 2,382 | 2,382 | ||||||||||||
Distributions to noncontrolling interests | (7,384) | (806) | (806) | ||||||||||||
Adjustments to redemption amount of redeemable noncontrolling interests | 4,666 | (4,666) | (4,666) | ||||||||||||
Ending Balance, Redeemable Noncontrolling Interests at Apr. 30, 2019 | 151,450 | ||||||||||||||
Ending Balance, Redeemable Noncontrolling Interests (Accounting Standards Update 2014-09 [Member]) at Apr. 30, 2019 | $ 819 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 534 | 796 | 324,395 | 4,043 | (4,043) | (11,069) | 1,174,811 | 112,288 | 1,601,755 | ||||||
Beginning Balance at Jan. 31, 2019 | 534 | 796 | 324,395 | 4,043 | (4,043) | (11,069) | 1,174,811 | 112,288 | 1,601,755 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 538 | 796 | 310,201 | 4,043 | (4,043) | (11,069) | 1,251,699 | 112,288 | 1,601,755 | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | Accounting Standards Update 2014-09 [Member] | 13,373 | 326 | 13,699 | ||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | 76,499 | (5,283) | 81,782 | ||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | 7,954 | 4,585 | 3,369 | ||||||||||||
Comprehensive income | 84,453 | 79,868 | |||||||||||||
Issuance of common stock to Savings and Investment Plan | 5,344 | 5,344 | |||||||||||||
Share-based compensation expense | 2,548 | 2,548 | |||||||||||||
Proceeds from stock option exercises | 7 | 4 | 5,462 | ||||||||||||
Proceeds from stock option exercises, Adjustment to Additional Paid in Capital | 5,451 | ||||||||||||||
Stock Redeemed or Called During Period, Value | (3) | (27,591) | (27,594) | ||||||||||||
Noncontrolling Interest, Increase from Business Combination | 7,963 | 27 | 27 | ||||||||||||
Distributions to noncontrolling interests | (4,987) | (408) | (408) | ||||||||||||
Adjustments to redemption amount of redeemable noncontrolling interests | 4,894 | (4,894) | (4,894) | ||||||||||||
Stockholders' Equity, Other | 2 | 56 | |||||||||||||
Adjustments to Additional Paid in Capital, Other | 54 | ||||||||||||||
Ending Balance at Apr. 30, 2019 | 538 | 800 | 310,201 | 4,043 | (4,043) | (16,352) | 1,251,699 | 115,278 | 1,662,164 | ||||||
Ending Balance (Accounting Standards Update 2014-09 [Member]) at Apr. 30, 2019 | 13,373 | 326 | 13,699 | ||||||||||||
Starting Balance, Redeemable Noncontrolling Interests at Jan. 31, 2019 | 138,995 | ||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | 7,954 | 4,585 | 3,369 | ||||||||||||
Noncontrolling Interest, Increase from Business Combination | 7,963 | 27 | 27 | ||||||||||||
Distributions to noncontrolling interests | (4,987) | (408) | (408) | ||||||||||||
Adjustments to redemption amount of redeemable noncontrolling interests | 4,894 | (4,894) | (4,894) | ||||||||||||
Ending Balance, Redeemable Noncontrolling Interests at Apr. 30, 2019 | 151,450 | ||||||||||||||
Ending Balance, Redeemable Noncontrolling Interests (Accounting Standards Update 2014-09 [Member]) at Apr. 30, 2019 | $ 819 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 538 | 800 | 310,201 | 4,043 | (4,043) | (16,352) | 1,251,699 | 115,278 | 1,662,164 | ||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | Accounting Standards Update 2014-09 [Member] | $ 13,373 | $ 326 | $ 13,699 | ||||||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 1,694,660 | 541 | 804 | 284,609 | 4,232 | (4,232) | (16,739) | 1,397,327 | 28,118 | 1,694,660 | |||||
Beginning Balance at Oct. 31, 2019 | 1,694,660 | 541 | 804 | 284,609 | 4,232 | (4,232) | (16,739) | 1,397,327 | 28,118 | 1,694,660 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 1,694,660 | 542 | 806 | 297,324 | 4,232 | (4,232) | (23,804) | 1,583,646 | 31,006 | 1,889,520 | |||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | 190,276 | (7,065) | 197,341 | ||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | 13,075 | 9,422 | 3,653 | ||||||||||||
Comprehensive income | 203,351 | 193,929 | |||||||||||||
Cash dividends | (10,762) | (10,762) | |||||||||||||
Issuance of common stock to Savings and Investment Plan | 7,281 | 7,281 | |||||||||||||
Share-based compensation expense | 5,275 | 5,275 | |||||||||||||
Proceeds from stock option exercises | 2 | 2,392 | |||||||||||||
Proceeds from stock option exercises, Adjustment to Additional Paid in Capital | 2,390 | ||||||||||||||
Stock Redeemed or Called During Period, Value | (2,567) | (2,567) | |||||||||||||
Noncontrolling Interest, Increase from Business Combination | 7,538 | ||||||||||||||
Distributions to noncontrolling interests | (8,977) | (765) | (765) | ||||||||||||
Adjustments to redemption amount of redeemable noncontrolling interests | 260 | (260) | (260) | ||||||||||||
Stockholders' Equity, Other | 1 | 337 | |||||||||||||
Adjustments to Additional Paid in Capital, Other | 336 | ||||||||||||||
Ending Balance at Apr. 30, 2020 | 1,889,520 | 542 | 806 | 297,324 | 4,232 | (4,232) | (23,804) | 1,583,646 | 31,006 | 1,889,520 | |||||
Starting Balance, Redeemable Noncontrolling Interests at Oct. 31, 2019 | 188,264 | 188,264 | |||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | 13,075 | 9,422 | 3,653 | ||||||||||||
Noncontrolling Interest, Increase from Business Combination | 7,538 | ||||||||||||||
Distributions to noncontrolling interests | (8,977) | (765) | (765) | ||||||||||||
Adjustments to redemption amount of redeemable noncontrolling interests | 260 | (260) | (260) | ||||||||||||
Ending Balance, Redeemable Noncontrolling Interests at Apr. 30, 2020 | 196,507 | 196,507 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 541 | 805 | 287,779 | 4,232 | (4,232) | (19,263) | 1,508,784 | 30,601 | 1,809,247 | ||||||
Beginning Balance at Jan. 31, 2020 | 541 | 805 | 287,779 | 4,232 | (4,232) | (19,263) | 1,508,784 | 30,601 | 1,809,247 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 1,889,520 | 541 | 806 | 287,779 | 4,232 | (4,232) | (23,804) | 1,508,784 | 31,006 | 1,889,520 | |||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | 70,912 | (4,541) | 75,453 | ||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | 5,291 | 4,655 | 636 | ||||||||||||
Comprehensive income | 76,203 | 71,548 | |||||||||||||
Issuance of common stock to Savings and Investment Plan | 5,983 | 5,983 | |||||||||||||
Share-based compensation expense | 2,629 | 2,629 | |||||||||||||
Proceeds from stock option exercises | 1 | 864 | |||||||||||||
Proceeds from stock option exercises, Adjustment to Additional Paid in Capital | 863 | ||||||||||||||
Stock Redeemed or Called During Period, Value | (5) | (5) | |||||||||||||
Noncontrolling Interest, Increase from Business Combination | (2) | ||||||||||||||
Distributions to noncontrolling interests | (4,630) | (231) | (231) | ||||||||||||
Adjustments to redemption amount of redeemable noncontrolling interests | 591 | (591) | (591) | ||||||||||||
Stockholders' Equity, Other | 1 | 76 | |||||||||||||
Adjustments to Additional Paid in Capital, Other | 75 | ||||||||||||||
Ending Balance at Apr. 30, 2020 | 1,889,520 | 542 | 806 | 297,324 | 4,232 | (4,232) | (23,804) | 1,583,646 | 31,006 | 1,889,520 | |||||
Starting Balance, Redeemable Noncontrolling Interests at Jan. 31, 2020 | 195,893 | ||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | 5,291 | 4,655 | 636 | ||||||||||||
Noncontrolling Interest, Increase from Business Combination | (2) | ||||||||||||||
Distributions to noncontrolling interests | (4,630) | (231) | (231) | ||||||||||||
Adjustments to redemption amount of redeemable noncontrolling interests | 591 | (591) | (591) | ||||||||||||
Ending Balance, Redeemable Noncontrolling Interests at Apr. 30, 2020 | 196,507 | $ 196,507 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 1,889,520 | $ 542 | $ 806 | $ 297,324 | $ 4,232 | $ (4,232) | $ (23,804) | $ 1,583,646 | $ 31,006 | $ 1,889,520 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME - UNAUDITED [PARENTHETICAL] - $ / shares | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Cash dividends per share (in dollars per share) | $ 0.080 | $ 0.070 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Operating Activities: | ||
Net income from consolidated operations | $ 210,711 | $ 178,109 |
Adjustments to reconcile net income from consolidated operations to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 43,276 | 40,548 |
Share-based compensation expense | 5,275 | 4,987 |
Employer contributions to HEICO Savings and Investment Plan | 4,811 | 4,601 |
Change in value of contingent consideration | 1,167 | 3,104 |
Deferred income tax provision (benefit) | (5,137) | 648 |
PaymentofContingentConsiderationinExcessofAcquisitionDateValue | (175) | (67) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Change in accounts receivable | 44,419 | (15,784) |
Increase (Decrease) in Contract with Customer, Asset | (12,985) | 5,699 |
Change in inventories | (37,790) | (26,724) |
Change in prepaid expenses and other current assets | (15,603) | 27 |
Change in trade accounts payable | 2,627 | (7,698) |
Change in accrued expenses and other current liabilities | (47,673) | (16,596) |
Change in income taxes payable | (2,018) | (1,141) |
Increase (Decrease) in Obligation, Other Postretirement Benefits | 13,951 | 10,604 |
Other | 1,026 | (2,064) |
Net cash provided by operating activities | 205,882 | 178,253 |
Investing Activities: | ||
Acquisitions, net of cash acquired | (45,343) | (134,940) |
Net Investment Related to Deferred Compensation Plan | (13,600) | (10,800) |
Capital expenditures | (12,435) | (12,596) |
Other | 473 | 636 |
Net cash used in investing activities | (70,905) | (157,700) |
Financing Activities: | ||
Proceeds from Long-term Lines of Credit | 245,000 | 129,000 |
Payments on revolving credit facility | (68,000) | (105,000) |
Cash dividends paid | (10,762) | (9,305) |
Distributions to noncontrolling interests | (9,742) | (8,190) |
Common Stock Issued Repurchased and Retired Related To Stock Option Exercises | (2,567) | (27,744) |
Payment of Contingent Consideration | (325) | (283) |
Proceeds from stock option exercises | 2,392 | 5,528 |
Other | (444) | (176) |
Net cash (used in) provided by financing activities | 155,552 | (16,170) |
Effect of exchange rate changes on cash | (744) | 109 |
Net (decrease) increase in cash and cash equivalents | 289,785 | 4,492 |
Cash and cash equivalents at beginning of year | 57,001 | 59,599 |
Cash and cash equivalents at end of period | $ 346,786 | $ 64,091 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Apr. 30, 2020 | |
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, 2019. The October 31, 2019 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 six months ended April 30, 2020 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. and HEICO Flight Support Corp. and their respective subsidiaries; and the Electronic Technologies Group (“ETG”), consisting of HEICO Electronic Technologies Corp. (“HEICO Electronic”) and its subsidiaries. HEICO's results of operations for the six and three months ended April 30, 2020 have been significantly affected by the COVID-19 outbreak, classified by the World Health Organization as a global pandemic in March 2020 (the “Outbreak”). The effects of the Outbreak and related actions by governments around the world to mitigate its spread have impacted the Company's employees, customers, suppliers and manufacturers. With respect to the Company’s results of operations, approximately half of HEICO’s net sales are derived from defense, space and other industrial markets including electronics, medical and telecommunications. Demand for products in that half of the Company’s business has not been fundamentally impacted and its operational results remain materially consistent with financial expectations prior to the commencement of the Outbreak. The remaining portion of HEICO’s net sales is derived from commercial aviation products and services. The Outbreak has caused significant volatility and a substantial decline in value across global economic markets. Most notably, the commercial aerospace industry has experienced an ongoing substantial decline in demand. As such, HEICO’s businesses that operate within the commercial aerospace industry have been materially impacted by the significant decline in global commercial air travel that began in March 2020. As a result of the Outbreak, HEICO has assessed various accounting estimates, including those that require consideration of forecasted financial information, in context of the unknown future impacts of the Outbreak as of April 30, 2020 and through the date of filing this Quarterly Report. The accounting estimates assessed include, but were not limited to, the Company’s allowance for doubtful accounts, inventory reserves, contingent consideration arrangements, goodwill and other long-lived assets. Based on these assessments, no material impact was recorded to HEICO’s Condensed Consolidated Statement of Operations for the six and three months ended April 30, 2020. New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, which, as amended, was codified as Accounting Standards Codification ("ASC") Topic 842, "Leases" ("ASC 842"). ASC 842 requires recognition of lease assets and lease liabilities on the balance sheet of lessees. The Company adopted ASC 842 as of November 1, 2019 using a modified retrospective transition approach with the election to apply the guidance as of the adoption date instead of at the beginning of the earliest comparative period presented. The adoption of this guidance resulted in an increase in the Company's assets and liabilities due to the recognition of right-of-use ("ROU") assets and corresponding lease liabilities for leases that are currently classified as operating leases. Upon adoption, the Company elected the package of transitional practical expedients, which allowed the Company to not reassess its prior conclusions about lease identification, lease classification, and initial direct costs. In addition, the Company elected the short-term lease practical expedient, which allows HEICO to not record an ROU asset and lease liability for any lease with a term of twelve months or less, and also elected the single component practical expedient for all asset classes, which allows the Company to include both lease and non-lease components associated with a lease as a single lease component when determining the value of the ROU asset and lease liability. The adoption of this guidance resulted in the Company recording ROU assets and corresponding lease liabilities of $63.4 million and $64.1 million, respectively, in the Company's Condensed Consolidated Balance Sheet. The adoption of ASC 842 did not have a material impact on the Company’s Condensed Consolidated Statement of Operations or Statement of Cash Flows. See Note 9, Leases, for additional information regarding the Company's accounting policy for leases and disclosures required by ASC 842. In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment," which is intended to simplify the current test for goodwill impairment by eliminating the second step in which the implied value of a reporting unit is calculated when the carrying value of the reporting unit exceeds its fair value. Under ASU 2017-04, goodwill impairment should be recognized for the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 must be applied prospectively and is effective for any annual or interim goodwill impairment test in fiscal |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Apr. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions [Text Block] | ACQUISITIONS In December 2019, the Company, through a subsidiary of HEICO Electronic, acquired 100% of the business and assets of the Human-Machine Interface ("HMI") product line of Spectralux Corporation. HMI designs, manufactures, and repairs flight deck annunciators, panels, indicators, and illuminated keyboards, as well as lighting controls, and flight deck lighting. In December 2019, the Company, through HEICO Electronic, acquired 80.1% of the stock of Quell Corporation ("Quell"). Quell designs and manufactures electromagnetic interference (EMI)/radio-frequency interference (RFI) and transient protection solutions for a wide variety of connectors that principally serve customers within the aerospace and defense markets. The remaining 19.9% continues to be owned by certain members of Quell's management team (see Note 3, Selected Financial Statement Information - Redeemable Noncontrolling Interests, for additional information). The purchase price of each fiscal 2020 acquisition was paid in cash, principally using proceeds from the Company's revolving credit facility, and is not material or significant to the Company's condensed consolidated financial statements. The allocation of the total consideration for the fiscal 2020 acquisitions to the tangible and identifiable intangible assets acquired and liabilities and noncontrolling interests assumed is preliminary until the Company obtains final information regarding their fair values. However, the Company does not expect any adjustment to such allocations to be material to the Company's consolidated financial statements. The operating results of the fiscal 2020 acquisitions were included in the Company’s results of operations from each of the effective acquisition dates. The amount of net sales and earnings of the fiscal 2020 acquisitions included in the Condensed Consolidated Statement of Operations for the six and three months ended April 30, 2020 is not material. Had the fiscal 2020 acquisitions occurred as of November 1, 2018, 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 six and three months ended April 30, 2020 and 2019 would not have been materially different than the reported amounts. |
SELECTED FINANCIAL STATEMENT IN
SELECTED FINANCIAL STATEMENT INFORMATION | 6 Months Ended |
Apr. 30, 2020 | |
Selected Financial Statement Information [Abstract] | |
Selected Financial Statement Information [Text Block] | SELECTED FINANCIAL STATEMENT INFORMATION Accounts Receivable (in thousands) April 30, 2020 October 31, 2019 Accounts receivable $235,154 $277,992 Less: Allowance for doubtful accounts (4,270) (3,666) Accounts receivable, net $230,884 $274,326 Inventories (in thousands) April 30, 2020 October 31, 2019 Finished products $221,338 $199,880 Work in process 40,629 32,548 Materials, parts, assemblies and supplies 195,852 187,891 Inventories, net of valuation reserves $457,819 $420,319 Property, Plant and Equipment (in thousands) April 30, 2020 October 31, 2019 Land $6,817 $6,820 Buildings and improvements 118,933 116,997 Machinery, equipment and tooling 260,153 253,127 Construction in progress 10,380 8,382 396,283 385,326 Less: Accumulated depreciation and amortization (224,884) (211,981) Property, plant and equipment, net $171,399 $173,345 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 $18.0 million as of April 30, 2020 and October 31, 2019. The total customer rebates and credits deducted within net sales for the six months ended April 30, 2020 and 2019 was $3.8 million and $3.6 million, respectively. The total customer rebates and credits deducted within net sales for the three months ended April 30, 2020 and 2019 was $1.7 million and $2.2 million, respectively. Research and Development Expenses The amount of new product research and development ("R&D") expenses included in cost of sales for the six and three months ended April 30, 2020 and 2019 is as follows (in thousands): Six months ended April 30, Three months ended April 30, 2020 2019 2020 2019 R&D expenses $33,855 $32,049 $16,752 $16,849 Redeemable Noncontrolling Interests The holders of equity interests in certain of the Company's subsidiaries have rights ("Put Rights") that may be exercised on varying dates causing the Company to purchase their equity interests through fiscal 2029. The Put Rights, all of which relate either to common shares or membership interests in limited liability companies, provide that the cash consideration to be paid for their equity interests (the "Redemption Amount") be at 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 that the Company could be required to pay is as follows (in thousands): April 30, 2020 October 31, 2019 Redeemable at fair value $144,854 $136,611 Redeemable based on a multiple of future earnings 51,653 51,653 Redeemable noncontrolling interests $196,507 $188,264 As discussed in Note 2, Acquisitions, the Company, through HEICO Electronic, acquired 80.1% of the stock of Quell in December 2019. As part of the shareholders' agreement, the noncontrolling interest holders have the right to cause the Company to purchase their equity interests over a four-year period beginning in fiscal 2025, or sooner under certain conditions, and the Company has the right 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 six months ended April 30, 2020 are as follows (in thousands): Foreign Currency Translation Defined Benefit Pension Plan Accumulated Balances as of October 31, 2019 ($14,989) ($1,750) ($16,739) Unrealized loss (7,104) — (7,104) Amortization of unrealized loss — 39 39 Balances as of April 30, 2020 ($22,093) ($1,711) ($23,804) |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Apr. 30, 2020 | |
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 six months ended April 30, 2020 are as follows (in thousands): Segment Consolidated Totals FSG ETG Balances as of October 31, 2019 $410,044 $858,659 $1,268,703 Goodwill acquired — 34,173 34,173 Foreign currency translation adjustments (569) (1,835) (2,404) Adjustments to goodwill — (285) (285) Balances as of April 30, 2020 $409,475 $890,712 $1,300,187 The goodwill acquired pertains to the fiscal 2020 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. Foreign currency translation adjustments are included in other comprehensive income (loss) in the Company's Condensed Consolidated Statements of Comprehensive Income. The adjustments to goodwill represent immaterial measurement period adjustments to the purchase price allocation of certain fiscal 2019 acquisitions. The Company estimates that $9 million of the goodwill acquired in fiscal 2020 will be deductible for income tax purposes. Identifiable intangible assets consist of the following (in thousands): As of April 30, 2020 As of October 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizing Assets: Customer relationships $417,412 ($178,510) $238,902 $411,076 ($162,722) $248,354 Intellectual property 220,372 (76,021) 144,351 216,359 (70,169) 146,190 Licenses 6,559 (4,387) 2,172 6,559 (4,102) 2,457 Patents 996 (691) 305 986 (666) 320 Non-compete agreements 805 (805) — 813 (813) — Trade names 450 (199) 251 450 (180) 270 646,594 (260,613) 385,981 636,243 (238,652) 397,591 Non-Amortizing Assets: Trade names 154,642 — 154,642 153,102 — 153,102 $801,236 ($260,613) $540,623 $789,345 ($238,652) $550,693 The increase in the gross carrying amount of customer relationships, intellectual property and trade names as of April 30, 2020 compared to October 31, 2019 principally relates to such intangible assets recognized in connection with the fiscal 2020 acquisitions (see Note 2, Acquisitions). Amortization expense related to intangible assets for the six months ended April 30, 2020 and 2019 was $27.6 million and $25.9 million, respectively. Amortization expense related to intangible assets for the three months ended April 30, 2020 and 2019 was $13.9 million and $13.1 million, respectively. Amortization expense related to intangible assets for the remainder of fiscal 2020 is estimated to be $27.5 million. Amortization expense for each of the next five fiscal years and thereafter is estimated to be $52.4 million in fiscal 2021, $45.8 million in fiscal 2022, $40.6 million in fiscal 2023, $36.1 million in fiscal 2024, $32.2 million in fiscal 2025, and $151.4 million thereafter. |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Apr. 30, 2020 | |
Debt Disclosure [Abstract] | |
Long-term Debt [Text Block] | LONG-TERM DEBT Long-term debt consists of the following (in thousands): April 30, 2020 October 31, 2019 Borrowings under revolving credit facility $730,000 $553,000 Finance leases and note payable 10,213 8,955 740,213 561,955 Less: Current maturities of long-term debt (1,025) (906) $739,188 $561,049 |
REVENUE
REVENUE | 6 Months Ended |
Apr. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | REVENUE Contract Balances Contract assets (unbilled receivables) represent revenue recognized on contracts using an over-time recognition model in excess of amounts invoiced to the customer. Contract liabilities (deferred revenue) represent customer advances and billings in excess of revenue recognized and are included within accrued expenses and other current liabilities in the Company’s Condensed Consolidated Balance Sheets. Changes in the Company’s contract assets and liabilities for the six months ended April 30, 2020 are as follows (in thousands): April 30, 2020 October 31, 2019 Change Contract assets $56,033 $43,132 $12,901 Contract liabilities 26,928 23,809 3,119 Net contract assets $29,105 $19,323 $9,782 The increase in the Company's contract assets during the first six months of fiscal 2020 occurred within the ETG and principally reflects additional unbilled receivables on certain customer contracts using an over-time recognition model in excess of billings on certain customer contracts. The increase in the Company's contract liabilities during the first six months of fiscal 2020 mainly occurred within the FSG and principally reflects the receipt of new customer deposits on certain customer contracts in excess of reductions to contract liabilities from customer deposits recognized as revenue. The amount of revenue that the Company recognized during the six and three months ended April 30, 2020 that was included in contract liabilities as of the beginning of fiscal 2020 was $16.5 million and $3.1 million, respectively. Remaining Performance Obligations As of April 30, 2020, the Company had $394.4 million of remaining performance obligations associated with contracts with an original duration of greater than one year pertaining to the majority of the products offered by the ETG and the FSG's specialty products and aftermarket replacement parts product lines. The Company will recognize net sales as these obligations are satisfied. The Company expects to recognize $168.0 million of this amount during the remainder of fiscal 2020 and $226.4 million thereafter, of which the majority is expected to occur in fiscal 2021. Contract Estimates Changes in estimates did not have a material effect on net income from consolidated operations for the six and three months ended April 30, 2020. Disaggregation of Revenue The following table summarizes the Company’s net sales by product line for each operating segment (in thousands): Six months ended April 30, Three months ended April 30, 2020 2019 2020 2019 Flight Support Group: Aftermarket replacement parts (1) $309,459 $326,722 $141,192 $167,225 Repair and overhaul parts and services (2) 121,916 140,617 52,629 73,454 Specialty products (3) 121,656 128,125 58,143 67,572 Total net sales 553,031 595,464 251,964 308,251 Electronic Technologies Group: Electronic component parts for defense, space and aerospace equipment (4) 329,675 299,414 168,962 161,664 Electronic component parts for equipment in various other industries (5) 97,691 99,466 49,993 52,787 Total net sales 427,366 398,880 218,955 214,451 Intersegment sales (5,976) (12,550) (2,773) (7,054) Total consolidated net sales $974,421 $981,794 $468,146 $515,648 (1) Includes various jet engine and aircraft component replacement parts. (2) Includes primarily the sale of parts consumed in various repair and overhaul services on selected jet engine and aircraft components, avionics, instruments, composites and flight surfaces of commercial and military aircraft. (3) Includes primarily the sale of specialty components such as thermal insulation blankets, renewable/reusable insulation systems, advanced niche components, complex composite assemblies, and expanded foil mesh. (4) Includes various component parts such as electro-optical infrared simulation and test equipment, electro-optical laser products, electro-optical, microwave and other power equipment, high-speed interface products, power conversion products, underwater locator beacons, emergency locator transmission beacons, traveling wave tube amplifiers, microwave power modules, three-dimensional microelectronic and stacked memory products, crashworthy and ballistically self-sealing auxiliary fuel systems, radio frequency (RF) and microwave amplifiers, transmitters and receivers, high performance communications and electronic intercept receivers and tuners, high performance active antenna systems, and technical surveillance countermeasures equipment. (5) Includes various component parts such as electromagnetic and radio interference shielding, high voltage interconnection devices, high voltage advanced power electronics, harsh environment connectivity products, custom molded cable assemblies and silicone material for a variety of demanding applications. The following table summarizes the Company’s net sales by industry for each operating segment (in thousands): Six months ended April 30, Three months ended April 30, 2020 2019 2020 2019 Flight Support Group: Aerospace $428,578 $484,398 $188,655 $249,225 Defense and Space 104,395 87,503 54,142 45,969 Other (1) 20,058 23,563 9,167 13,057 Total net sales 553,031 595,464 251,964 308,251 Electronic Technologies Group: Defense and Space 272,601 251,171 139,491 135,952 Other (2) 112,706 105,538 57,743 55,623 Aerospace 42,059 42,171 21,721 22,876 Total net sales 427,366 398,880 218,955 214,451 Intersegment sales (5,976) (12,550) (2,773) (7,054) Total consolidated net sales $974,421 $981,794 $468,146 $515,648 (1) Principally industrial products. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Apr. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | INCOME TAXES The Company's effective tax rate in the first six months of fiscal 2020 was .3%, as compared to 14.5% in the first six months of fiscal 2019. The Company recognized a discrete tax benefit from stock option exercises in both the first quarter of fiscal 2020 and 2019 of $47.6 million and $16.6 million, respectively. The $31.0 million larger benefit from stock option exercises recognized in the first quarter of fiscal 2020 was the result of more stock options exercised and the strong appreciation in HEICO's stock price during the optionees' holding periods. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Apr. 30, 2020 | |
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 April 30, 2020 Quoted Prices Significant Significant Unobservable Inputs Total Assets: Deferred compensation plan: Corporate-owned life insurance $— $157,522 $— $157,522 Total assets $— $157,522 $— $157,522 Liabilities: Contingent consideration $— $— $18,993 $18,993 As of October 31, 2019 Quoted Prices Significant Significant Unobservable Inputs Total Assets: Deferred compensation plan: Corporate-owned life insurance $— $151,871 $— $151,871 Money market funds 20 — — 20 Total assets $20 $151,871 $— $151,891 Liabilities: Contingent consideration $— $— $18,326 $18,326 The Company maintains the HEICO Corporation Leadership Compensation Plan (the "LCP"), which is a non-qualified deferred compensation plan. The assets of 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 LCP are held within an irrevocable trust and classified within other assets in the Company’s Condensed Consolidated Balance Sheets. The related liabilities of the LCP are included within other long-term liabilities and accrued expenses and other current liabilities in the Company’s Condensed Consolidated Balance Sheets and have an aggregate value of $156.3 million as of April 30, 2020 and $151.1 million as of October 31, 2019. As part of the agreement to acquire a subsidiary by the FSG in fiscal 2019, the Company may be obligated to pay contingent consideration of $6.4 million in fiscal 2022 should the acquired entity meet a certain earnings objective during the second and third years following the acquisition. As of April 30, 2020, the estimated fair value of the contingent consideration was $1.2 million. As part of the agreement to acquire a subsidiary by the ETG in fiscal 2017, the Company may be obligated to pay contingent consideration of $20.0 million in fiscal 2023 should the acquired entity meet a certain earnings objective during the first six years following the acquisition. As of April 30, 2020, the estimated fair value of the contingent consideration was $17.8 million. The estimated fair value of the contingent consideration arrangements described above are classified within Level 3 and were determined using probability-based scenario analyses. 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 amounts were discounted using a weighted average discount rate reflecting the credit risk of HEICO. 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 April 30, 2020 were as follows: Fiscal 2019 Acquisition Fiscal 2017 Acquisition Compound annual revenue growth rate range (7 %) - 9 % (3 %) - 10 % Weighted average discount rate 4.3 % 3.4 % Changes in the Company’s contingent consideration liability measured at fair value on a recurring basis using unobservable inputs (Level 3) for the six months ended April 30, 2020 are as follows (in thousands): Liabilities Balance as of October 31, 2019 $18,326 Increase in accrued contingent consideration 1,167 Payment of contingent consideration (500) Balance as of April 30, 2020 $18,993 The Company's contingent consideration liability is included in other long-term liabilities in its Condensed Consolidated Balance Sheets and the Company records changes in accrued contingent consideration within selling, general and administrative expenses in its Condensed Consolidated Statements of Operations. The Company did not have any transfers between Level 1 and Level 2 fair value measurements during the six months ended April 30, 2020. 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 April 30, 2020 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. |
LEASES
LEASES | 6 Months Ended |
Apr. 30, 2020 | |
Leases [Abstract] | |
Lessee, Operating Leases [Text Block] | LEASES The Company’s lease arrangements primarily pertain to manufacturing facilities, office buildings, equipment, land and vehicles. The Company evaluates whether a contractual arrangement that provides it with control over the use of an asset is, or contains, a lease at the inception date. The term of a lease is inclusive of any option to renew, extend, or terminate the lease when it is reasonably certain that the Company will exercise such option. The Company classifies a lease as operating or finance using the classification criteria set forth in ASC 842. Finance leases are not material to the Company's condensed consolidated financial statements. HEICO recognizes operating lease right-of-use (“ROU”) assets and corresponding lease liabilities as of the lease commencement date based on the present value of the lease payments over the lease term. The discount rate used to calculate the present value of the Company’s leases is based on HEICO’s incremental borrowing rate and considers credit risk, the lease term and other available information as of the commencement date since the leases do not provide a readily determinable implicit rate. Variable lease payments that depend on an index or a rate are included in the determination of operating ROU assets and lease liabilities using the index or rate at the lease commencement date. Variable lease payments that do not depend on an index or rate or resulting from changes in an index or rate subsequent to the lease commencement date, are recorded as lease expense in the period in which the obligation for the payment is incurred. The Company’s operating ROU assets are increased by any prepaid lease payments and initial direct costs and reduced by any lease incentives. The Company’s leases do not contain any material residual value guarantees or restrictive covenants. HEICO’s operating lease ROU assets represent its right to use an underlying asset during the lease term and its operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. HEICO’s operating lease ROU assets are included within other assets and its operating lease liabilities are included within other long-term liabilities and accrued expenses and other current liabilities in the Company’s Condensed Consolidated Balance Sheet. For additional information on the Company’s finance leases, see Note 5, Long-term Debt, of the Notes to Condensed Consolidated Financial Statements of this Quarterly Report and Note 5, Long-term Debt, and Note 3, Selected Financial Statement Information - Property, Plant and Equipment, of the Notes to Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the year ended October 31, 2019. The following table presents the Company’s operating lease ROU assets and lease liabilities as of April 30, 2020 (in thousands): April 30, 2020 Right-of-use assets $60,056 Current lease liabilities $13,365 Long-term lease liabilities 47,570 Total operating lease liabilities $60,935 The Company’s operating lease expense is recorded as a component of cost of sales and/or selling, general, and administrative expenses in the Company’s Condensed Consolidated Statements of Operations. The following table presents the components of operating lease expense for the six and three months ended April 30, 2020 (in thousands): Six months ended Three months ended April 30, 2020 April 30, 2020 Operating lease expense $8,544 $4,284 Variable lease expense 1,323 708 Total operating lease expense (1) $9,867 $4,992 (1) Excludes short-term lease expense, which is not material. The following table presents a maturity analysis of the Company's operating lease liabilities as of April 30, 2020 for the remainder of fiscal 2020 and the next five fiscal years and thereafter (in thousands): Year ending October 31, 2020 $7,762 2021 16,101 2022 14,192 2023 8,834 2024 5,006 2025 4,136 Thereafter 18,004 Total minimum lease payments 74,035 Less: amount representing interest (13,100) Present value of minimum lease payments $60,935 Prior to the adoption of ASC 842, the Company's future minimum lease payments under non-cancelable operating leases on an undiscounted basis as of October 31, 2019 were $15.5 million in fiscal 2020, $15.6 million in fiscal 2021, $13.8 million in fiscal 2022, $8.5 million in fiscal 2023, $4.7 million in fiscal 2024 and $18.8 million thereafter. The Company does not have any material leases that have been signed but have yet to commence as of April 30, 2020. The following table presents the weighted average remaining lease term and discount rate of the Company’s operating leases as of April 30, 2020: April 30, 2020 Weighted average remaining lease term (years) 7 Weighted average discount rate 5.2% The following table presents supplemental disclosures of cash flow information associated with the Company's operating leases for the six months ended April 30, 2020 (in thousands): Six months ended April 30, 2020 Cash paid for amounts included in the measurement of lease liabilities $8,448 Right-of-use assets obtained in exchange for new lease liabilities 6,824 |
NET INCOME PER SHARE ATTRIBUTAB
NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS | 6 Months Ended |
Apr. 30, 2020 | |
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): Six months ended April 30, Three months ended April 30, 2020 2019 2020 2019 Numerator: Net income attributable to HEICO $197,341 $161,114 $75,453 $81,782 Denominator: Weighted average common shares outstanding - basic 134,596 133,123 134,669 133,313 Effect of dilutive stock options 2,673 3,969 2,448 3,893 Weighted average common shares outstanding - diluted 137,269 137,092 137,117 137,206 Net income per share attributable to HEICO shareholders: Basic $1.47 $1.21 $.56 $.61 Diluted $1.44 $1.18 $.55 $.60 Anti-dilutive stock options excluded 283 615 448 470 |
OPERATING SEGMENTS
OPERATING SEGMENTS | 6 Months Ended |
Apr. 30, 2020 | |
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 six and three months ended April 30, 2020 and 2019, respectively, is as follows (in thousands): Other, Primarily Corporate and Intersegment (1) Consolidated Segment FSG ETG Six months ended April 30, 2020: Net sales $553,031 $427,366 ($5,976) $974,421 Depreciation 7,245 5,809 511 13,565 Amortization 9,611 19,608 492 29,711 Operating income 109,576 123,017 (13,442) 219,151 Capital expenditures 6,765 5,665 5 12,435 Six months ended April 30, 2019: Net sales $595,464 $398,880 ($12,550) $981,794 Depreciation 6,758 5,395 503 12,656 Amortization 9,723 17,677 492 27,892 Operating income 115,046 118,954 (16,870) 217,130 Capital expenditures 6,576 6,012 8 12,596 Three months ended April 30, 2020: Net sales $251,964 $218,955 ($2,773) $468,146 Depreciation 3,628 2,881 256 6,765 Amortization 4,752 9,930 246 14,928 Operating income 47,531 65,526 (4,896) 108,161 Capital expenditures 2,647 2,938 — 5,585 Three months ended April 30, 2019: Net sales $308,251 $214,451 ($7,054) $515,648 Depreciation 3,403 2,789 252 6,444 Amortization 4,920 8,901 246 14,067 Operating income 62,166 67,352 (10,335) 119,183 Capital expenditures 3,727 2,954 8 6,689 (1) Intersegment activity principally consists of net sales from the ETG to the FSG. Total assets by operating segment are as follows (in thousands): Other, Consolidated Segment FSG ETG Total assets as of April 30, 2020 $1,201,852 $1,827,060 $335,923 $3,364,835 Total assets as of October 31, 2019 1,149,737 1,643,032 176,442 2,969,211 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Apr. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | COMMITMENTS AND CONTINGENCIES Guarantees As of April 30, 2020, the Company has arranged for standby letters of credit aggregating $4.8 million, which are supported by its revolving credit facility and pertain to payment guarantees related to potential workers' compensation claims and a facility lease as well as 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 six months ended April 30, 2020 and 2019, respectively, are as follows (in thousands): Six months ended April 30, 2020 2019 Balances as of beginning of fiscal year $2,810 $3,306 Accruals for warranties 1,194 1,264 Acquired warranty liabilities 50 — Warranty claims settled (952) (1,543) Balances as of April 30 $3,102 $3,027 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. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Apr. 30, 2020 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
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, 2019. The October 31, 2019 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 six months ended April 30, 2020 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. and HEICO Flight Support Corp. and their respective subsidiaries; and the Electronic Technologies Group (“ETG”), consisting of HEICO Electronic Technologies Corp. (“HEICO Electronic”) and its subsidiaries. HEICO's results of operations for the six and three months ended April 30, 2020 have been significantly affected by the COVID-19 outbreak, classified by the World Health Organization as a global pandemic in March 2020 (the “Outbreak”). The effects of the Outbreak and related actions by governments around the world to mitigate its spread have impacted the Company's employees, customers, suppliers and manufacturers. With respect to the Company’s results of operations, approximately half of HEICO’s net sales are derived from defense, space and other industrial markets including electronics, medical and telecommunications. Demand for products in that half of the Company’s business has not been fundamentally impacted and its operational results remain materially consistent with financial expectations prior to the commencement of the Outbreak. The remaining portion of HEICO’s net sales is derived from commercial aviation products and services. The Outbreak has caused significant volatility and a substantial decline in value across global economic markets. Most notably, the commercial aerospace industry has experienced an ongoing substantial decline in demand. As such, HEICO’s businesses that operate within the commercial aerospace industry have been materially impacted by the significant decline in global commercial air travel that began in March 2020. |
Accounting Standards Update 2016-02 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Description of New Accounting Pronouncements Not yet Adopted [Text Block] | In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, which, as amended, was codified as Accounting Standards Codification ("ASC") Topic 842, "Leases" ("ASC 842"). ASC 842 requires recognition of lease assets and lease liabilities on the balance sheet of lessees. The Company adopted ASC 842 as of November 1, 2019 using a modified retrospective transition approach with the election to apply the guidance as of the adoption date instead of at the beginning of the earliest comparative period presented. The adoption of this guidance resulted in an increase in the Company's assets and liabilities due to the recognition of right-of-use ("ROU") assets and corresponding lease liabilities for leases that are currently classified as operating leases. Upon adoption, the Company elected the package of transitional practical expedients, which allowed the Company to not reassess its prior conclusions about lease identification, lease classification, and initial direct costs. In addition, the Company elected the short-term lease practical expedient, which allows HEICO to not record an ROU asset and lease liability for any lease with a term of twelve months or less, and also elected the single component practical expedient for all asset classes, which allows the Company to include both lease and non-lease components associated with a lease as a single lease component when determining the value of the ROU asset and lease liability. The adoption of this guidance resulted in the Company recording ROU assets and corresponding lease liabilities of $63.4 million and $64.1 million, respectively, in the Company's Condensed Consolidated Balance Sheet. The adoption of ASC 842 did not have a material impact on the Company’s Condensed Consolidated Statement of Operations or Statement of Cash Flows. See Note 9, Leases, for additional information regarding the Company's accounting policy for leases and disclosures required by ASC 842. |
Accounting Standards Update 2017-04 [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Description of New Accounting Pronouncements Not yet Adopted [Text Block] | In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment," which is intended to simplify the current test for goodwill impairment by eliminating the second step in which the implied value of a reporting unit is calculated when the carrying value of the reporting unit exceeds its fair value. Under ASU 2017-04, goodwill impairment should be recognized for the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 must be applied prospectively and is effective for any annual or interim goodwill impairment test in fiscal years beginning after December 15, 2019, or in fiscal 2021 for HEICO. Early adoption is permitted. The Company is currently evaluating the effect the adoption of this guidance will have on its consolidated results of operations, financial position and cash flows. |
SELECTED FINANCIAL STATEMENT _2
SELECTED FINANCIAL STATEMENT INFORMATION (Tables) | 6 Months Ended |
Apr. 30, 2020 | |
Selected Financial Statement Information [Abstract] | |
Schedule of Accounts Receivable [Table Text Block] | Accounts Receivable (in thousands) April 30, 2020 October 31, 2019 Accounts receivable $235,154 $277,992 Less: Allowance for doubtful accounts (4,270) (3,666) Accounts receivable, net $230,884 $274,326 |
Schedule of Inventories [Table Text Block] | Inventories (in thousands) April 30, 2020 October 31, 2019 Finished products $221,338 $199,880 Work in process 40,629 32,548 Materials, parts, assemblies and supplies 195,852 187,891 Inventories, net of valuation reserves $457,819 $420,319 |
Schedule of Property, Plant and Equipment [Table Text Block] | Property, Plant and Equipment (in thousands) April 30, 2020 October 31, 2019 Land $6,817 $6,820 Buildings and improvements 118,933 116,997 Machinery, equipment and tooling 260,153 253,127 Construction in progress 10,380 8,382 396,283 385,326 Less: Accumulated depreciation and amortization (224,884) (211,981) Property, plant and equipment, net $171,399 $173,345 |
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 six and three months ended April 30, 2020 and 2019 is as follows (in thousands): Six months ended April 30, Three months ended April 30, 2020 2019 2020 2019 R&D expenses $33,855 $32,049 $16,752 $16,849 |
Schedule of Redeemable Noncontrolling Interests [Table Text Block] | Management's estimate of the aggregate Redemption Amount of all Put Rights that the Company could be required to pay is as follows (in thousands): April 30, 2020 October 31, 2019 Redeemable at fair value $144,854 $136,611 Redeemable based on a multiple of future earnings 51,653 51,653 Redeemable noncontrolling interests $196,507 $188,264 |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | Changes in the components of accumulated other comprehensive loss for the six months ended April 30, 2020 are as follows (in thousands): Foreign Currency Translation Defined Benefit Pension Plan Accumulated Balances as of October 31, 2019 ($14,989) ($1,750) ($16,739) Unrealized loss (7,104) — (7,104) Amortization of unrealized loss — 39 39 Balances as of April 30, 2020 ($22,093) ($1,711) ($23,804) |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Apr. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | Changes in the carrying amount of goodwill by operating segment for the six months ended April 30, 2020 are as follows (in thousands): Segment Consolidated Totals FSG ETG Balances as of October 31, 2019 $410,044 $858,659 $1,268,703 Goodwill acquired — 34,173 34,173 Foreign currency translation adjustments (569) (1,835) (2,404) Adjustments to goodwill — (285) (285) Balances as of April 30, 2020 $409,475 $890,712 $1,300,187 |
Schedule Of Identifiable Intangible Assets [Table Text Block] | Identifiable intangible assets consist of the following (in thousands): As of April 30, 2020 As of October 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizing Assets: Customer relationships $417,412 ($178,510) $238,902 $411,076 ($162,722) $248,354 Intellectual property 220,372 (76,021) 144,351 216,359 (70,169) 146,190 Licenses 6,559 (4,387) 2,172 6,559 (4,102) 2,457 Patents 996 (691) 305 986 (666) 320 Non-compete agreements 805 (805) — 813 (813) — Trade names 450 (199) 251 450 (180) 270 646,594 (260,613) 385,981 636,243 (238,652) 397,591 Non-Amortizing Assets: Trade names 154,642 — 154,642 153,102 — 153,102 $801,236 ($260,613) $540,623 $789,345 ($238,652) $550,693 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Apr. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | Long-term debt consists of the following (in thousands): April 30, 2020 October 31, 2019 Borrowings under revolving credit facility $730,000 $553,000 Finance leases and note payable 10,213 8,955 740,213 561,955 Less: Current maturities of long-term debt (1,025) (906) $739,188 $561,049 |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Apr. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability [Table Text Block] | Changes in the Company’s contract assets and liabilities for the six months ended April 30, 2020 are as follows (in thousands): April 30, 2020 October 31, 2019 Change Contract assets $56,033 $43,132 $12,901 Contract liabilities 26,928 23,809 3,119 Net contract assets $29,105 $19,323 $9,782 |
Product Line [Member] | |
Disaggregation of Revenue [Line Items] | |
Disaggregation of Revenue [Table Text Block] | The following table summarizes the Company’s net sales by product line for each operating segment (in thousands): Six months ended April 30, Three months ended April 30, 2020 2019 2020 2019 Flight Support Group: Aftermarket replacement parts (1) $309,459 $326,722 $141,192 $167,225 Repair and overhaul parts and services (2) 121,916 140,617 52,629 73,454 Specialty products (3) 121,656 128,125 58,143 67,572 Total net sales 553,031 595,464 251,964 308,251 Electronic Technologies Group: Electronic component parts for defense, space and aerospace equipment (4) 329,675 299,414 168,962 161,664 Electronic component parts for equipment in various other industries (5) 97,691 99,466 49,993 52,787 Total net sales 427,366 398,880 218,955 214,451 Intersegment sales (5,976) (12,550) (2,773) (7,054) Total consolidated net sales $974,421 $981,794 $468,146 $515,648 (1) Includes various jet engine and aircraft component replacement parts. (2) Includes primarily the sale of parts consumed in various repair and overhaul services on selected jet engine and aircraft components, avionics, instruments, composites and flight surfaces of commercial and military aircraft. (3) Includes primarily the sale of specialty components such as thermal insulation blankets, renewable/reusable insulation systems, advanced niche components, complex composite assemblies, and expanded foil mesh. (4) Includes various component parts such as electro-optical infrared simulation and test equipment, electro-optical laser products, electro-optical, microwave and other power equipment, high-speed interface products, power conversion products, underwater locator beacons, emergency locator transmission beacons, traveling wave tube amplifiers, microwave power modules, three-dimensional microelectronic and stacked memory products, crashworthy and ballistically self-sealing auxiliary fuel systems, radio frequency (RF) and microwave amplifiers, transmitters and receivers, high performance communications and electronic intercept receivers and tuners, high performance active antenna systems, and technical surveillance countermeasures equipment. (5) Includes various component parts such as electromagnetic and radio interference shielding, high voltage interconnection devices, high voltage advanced power electronics, harsh environment connectivity products, custom molded cable assemblies and silicone material for a variety of demanding applications. |
Sales by Industry [Member] | |
Disaggregation of Revenue [Line Items] | |
Disaggregation of Revenue [Table Text Block] | The following table summarizes the Company’s net sales by industry for each operating segment (in thousands): Six months ended April 30, Three months ended April 30, 2020 2019 2020 2019 Flight Support Group: Aerospace $428,578 $484,398 $188,655 $249,225 Defense and Space 104,395 87,503 54,142 45,969 Other (1) 20,058 23,563 9,167 13,057 Total net sales 553,031 595,464 251,964 308,251 Electronic Technologies Group: Defense and Space 272,601 251,171 139,491 135,952 Other (2) 112,706 105,538 57,743 55,623 Aerospace 42,059 42,171 21,721 22,876 Total net sales 427,366 398,880 218,955 214,451 Intersegment sales (5,976) (12,550) (2,773) (7,054) Total consolidated net sales $974,421 $981,794 $468,146 $515,648 (1) Principally industrial products. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Apr. 30, 2020 | |
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 April 30, 2020 Quoted Prices Significant Significant Unobservable Inputs Total Assets: Deferred compensation plan: Corporate-owned life insurance $— $157,522 $— $157,522 Total assets $— $157,522 $— $157,522 Liabilities: Contingent consideration $— $— $18,993 $18,993 As of October 31, 2019 Quoted Prices Significant Significant Unobservable Inputs Total Assets: Deferred compensation plan: Corporate-owned life insurance $— $151,871 $— $151,871 Money market funds 20 — — 20 Total assets $20 $151,871 $— $151,891 Liabilities: Contingent consideration $— $— $18,326 $18,326 |
Fair Value Measurement Inputs and 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 April 30, 2020 were as follows: Fiscal 2019 Acquisition Fiscal 2017 Acquisition Compound annual revenue growth rate range (7 %) - 9 % (3 %) - 10 % Weighted average discount rate 4.3 % 3.4 % |
Fair Value, Liabilities 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 six months ended April 30, 2020 are as follows (in thousands): Liabilities Balance as of October 31, 2019 $18,326 Increase in accrued contingent consideration 1,167 Payment of contingent consideration (500) Balance as of April 30, 2020 $18,993 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Apr. 30, 2020 | |
Leases [Abstract] | |
Lessee, Operating Lease Asset and Liabilities [Table Text Block] | The following table presents the Company’s operating lease ROU assets and lease liabilities as of April 30, 2020 (in thousands): April 30, 2020 Right-of-use assets $60,056 Current lease liabilities $13,365 Long-term lease liabilities 47,570 Total operating lease liabilities $60,935 |
Lease, Cost [Table Text Block] | The following table presents the components of operating lease expense for the six and three months ended April 30, 2020 (in thousands): Six months ended Three months ended April 30, 2020 April 30, 2020 Operating lease expense $8,544 $4,284 Variable lease expense 1,323 708 Total operating lease expense (1) $9,867 $4,992 (1) Excludes short-term lease expense, which is not material. |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | The following table presents a maturity analysis of the Company's operating lease liabilities as of April 30, 2020 for the remainder of fiscal 2020 and the next five fiscal years and thereafter (in thousands): Year ending October 31, 2020 $7,762 2021 16,101 2022 14,192 2023 8,834 2024 5,006 2025 4,136 Thereafter 18,004 Total minimum lease payments 74,035 Less: amount representing interest (13,100) Present value of minimum lease payments $60,935 |
Lessee, Operating Lease Term and Discount Rate [Table Text Block] | The following table presents the weighted average remaining lease term and discount rate of the Company’s operating leases as of April 30, 2020: April 30, 2020 Weighted average remaining lease term (years) 7 Weighted average discount rate 5.2% |
Schedule of Cash Flow, Supplemental Disclosures [Table Text Block] | The following table presents supplemental disclosures of cash flow information associated with the Company's operating leases for the six months ended April 30, 2020 (in thousands): Six months ended April 30, 2020 Cash paid for amounts included in the measurement of lease liabilities $8,448 Right-of-use assets obtained in exchange for new lease liabilities 6,824 |
NET INCOME PER SHARE ATTRIBUT_2
NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS (Tables) | 6 Months Ended |
Apr. 30, 2020 | |
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): Six months ended April 30, Three months ended April 30, 2020 2019 2020 2019 Numerator: Net income attributable to HEICO $197,341 $161,114 $75,453 $81,782 Denominator: Weighted average common shares outstanding - basic 134,596 133,123 134,669 133,313 Effect of dilutive stock options 2,673 3,969 2,448 3,893 Weighted average common shares outstanding - diluted 137,269 137,092 137,117 137,206 Net income per share attributable to HEICO shareholders: Basic $1.47 $1.21 $.56 $.61 Diluted $1.44 $1.18 $.55 $.60 Anti-dilutive stock options excluded 283 615 448 470 |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 6 Months Ended |
Apr. 30, 2020 | |
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 six and three months ended April 30, 2020 and 2019, respectively, is as follows (in thousands): Other, Primarily Corporate and Intersegment (1) Consolidated Segment FSG ETG Six months ended April 30, 2020: Net sales $553,031 $427,366 ($5,976) $974,421 Depreciation 7,245 5,809 511 13,565 Amortization 9,611 19,608 492 29,711 Operating income 109,576 123,017 (13,442) 219,151 Capital expenditures 6,765 5,665 5 12,435 Six months ended April 30, 2019: Net sales $595,464 $398,880 ($12,550) $981,794 Depreciation 6,758 5,395 503 12,656 Amortization 9,723 17,677 492 27,892 Operating income 115,046 118,954 (16,870) 217,130 Capital expenditures 6,576 6,012 8 12,596 Three months ended April 30, 2020: Net sales $251,964 $218,955 ($2,773) $468,146 Depreciation 3,628 2,881 256 6,765 Amortization 4,752 9,930 246 14,928 Operating income 47,531 65,526 (4,896) 108,161 Capital expenditures 2,647 2,938 — 5,585 Three months ended April 30, 2019: Net sales $308,251 $214,451 ($7,054) $515,648 Depreciation 3,403 2,789 252 6,444 Amortization 4,920 8,901 246 14,067 Operating income 62,166 67,352 (10,335) 119,183 Capital expenditures 3,727 2,954 8 6,689 |
Reconciliation of Assets from Segment to Consolidated [Table Text Block] | Total assets by operating segment are as follows (in thousands): Other, Consolidated Segment FSG ETG Total assets as of April 30, 2020 $1,201,852 $1,827,060 $335,923 $3,364,835 Total assets as of October 31, 2019 1,149,737 1,643,032 176,442 2,969,211 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Apr. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Product Warranty Liability [Table Text Block] | Changes in the Company’s product warranty liability for the six months ended April 30, 2020 and 2019, respectively, are as follows (in thousands): Six months ended April 30, 2020 2019 Balances as of beginning of fiscal year $2,810 $3,306 Accruals for warranties 1,194 1,264 Acquired warranty liabilities 50 — Warranty claims settled (952) (1,543) Balances as of April 30 $3,102 $3,027 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textuals) $ in Thousands | Apr. 30, 2020USD ($) |
Operating Lease, Right-of-Use Asset | $ 60,056 |
Operating Lease, Liability | 60,935 |
Accounting Standards Update 2016-02 [Member] | |
Operating Lease, Right-of-Use Asset | 63,400 |
Operating Lease, Liability | $ 64,100 |
ACQUISITIONS (Details Textuals)
ACQUISITIONS (Details Textuals) | 3 Months Ended |
Apr. 30, 2020 | |
Electronic Technologies Group [Member] | HMI [Member] | |
Business Acquisition [Line Items] | |
Description of Acquired Entity | HMI designs, manufactures, and repairs flight deck annunciators, panels, indicators, and illuminated keyboards, as well as lighting controls, and flight deck lighting. |
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% |
Electronic Technologies Group [Member] | Quell [Member] | |
Business Acquisition [Line Items] | |
Name of Acquired Entity | Quell Corporation |
Description of Acquired Entity | Quell designs and manufactures electromagnetic interference (EMI)/radio-frequency interference (RFI) and transient protection solutions for a wide variety of connectors that principally serve customers within the aerospace and defense markets. |
Business Acquisition, Percentage of Voting Interests Acquired | 80.10% |
Existing Management [Member] | Quell [Member] | |
Business Acquisition [Line Items] | |
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 19.90% |
SELECTED FINANCIAL STATEMENT _3
SELECTED FINANCIAL STATEMENT INFORMATION (Accounts Receivable) (Details) - USD ($) $ in Thousands | Apr. 30, 2020 | Oct. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 235,154 | $ 277,992 |
Less: Allowance for doubtful accounts | (4,270) | (3,666) |
Accounts receivable, net | $ 230,884 | $ 274,326 |
SELECTED FINANCIAL STATEMENT _4
SELECTED FINANCIAL STATEMENT INFORMATION (Inventories) (Details) - USD ($) $ in Thousands | Apr. 30, 2020 | Oct. 31, 2019 |
Inventory [Line Items] | ||
Finished products | $ 221,338 | $ 199,880 |
Work in process | 40,629 | 32,548 |
Materials, parts, assemblies and supplies | 195,852 | 187,891 |
Inventories, net of valuation reserves | $ 457,819 | $ 420,319 |
SELECTED FINANCIAL STATEMENT _5
SELECTED FINANCIAL STATEMENT INFORMATION (Property, Plant and Equipment) (Details) - USD ($) $ in Thousands | Apr. 30, 2020 | Oct. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Land | $ 6,817 | $ 6,820 |
Buildings and improvements | 118,933 | 116,997 |
Machinery, equipment and tooling | 260,153 | 253,127 |
Construction in progress | 10,380 | 8,382 |
Property, plant and equipment, gross | 396,283 | 385,326 |
Less: Accumulated depreciation and amortization | (224,884) | (211,981) |
Property, plant and equipment, net | $ 171,399 | $ 173,345 |
SELECTED FINANCIAL STATEMENT _6
SELECTED FINANCIAL STATEMENT INFORMATION SELECTED FINANCIAL STATEMENT INFORMATION (Research and Development Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2020 | Apr. 30, 2019 | Apr. 30, 2020 | Apr. 30, 2019 | |
Selected Financial Statement Information (Details) [Abstract] | ||||
R&D expenses | $ 16,752 | $ 16,849 | $ 33,855 | $ 32,049 |
SELECTED FINANCIAL STATEMENT _7
SELECTED FINANCIAL STATEMENT INFORMATION SELECTED FINANCIAL STATEMENT INFORMATION (Redeemable Noncontrolling Interests) (Details) - USD ($) $ in Thousands | Apr. 30, 2020 | Oct. 31, 2019 |
Redeemable Noncontrolling Interest [Line Items] | ||
Redeemable at fair value | $ 144,854 | $ 136,611 |
Redeemable based on a multiple of future earnings | 51,653 | 51,653 |
Redeemable noncontrolling interests | $ 196,507 | $ 188,264 |
SELECTED FINANCIAL STATEMENT _8
SELECTED FINANCIAL STATEMENT INFORMATION SELECTED FINANCIAL STATEMENT INFORMATION (Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2020 | Apr. 30, 2019 | Apr. 30, 2020 | Apr. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Starting accumulated other comprehensive loss | $ (16,739) | |||
Unrealized gain | (7,104) | |||
Amortization of unrealized loss on defined benefit pension plan, net of tax | $ 15 | $ 6 | 39 | $ 12 |
Ending accumulated other comprehensive loss | (23,804) | (23,804) | ||
Foreign Currency Translation [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Starting accumulated other comprehensive loss | (14,989) | |||
Unrealized gain | (7,104) | |||
Ending accumulated other comprehensive loss | (22,093) | (22,093) | ||
Pension Benefit Obligation [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Starting accumulated other comprehensive loss | (1,750) | |||
Amortization of unrealized loss on defined benefit pension plan, net of tax | 39 | |||
Ending accumulated other comprehensive loss | $ (1,711) | $ (1,711) |
SELECTED FINANCIAL STATEMENT _9
SELECTED FINANCIAL STATEMENT INFORMATION (Details Textuals) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2020 | Apr. 30, 2019 | Apr. 30, 2020 | Apr. 30, 2019 | Oct. 31, 2019 | |
Selected Financial Statement Information (Details) [Abstract] | |||||
Accrued customer rebates and credits | $ 18 | $ 18 | $ 18 | ||
Total customer rebates and credits deducted within net sales | $ 1.7 | $ 2.2 | $ 3.8 | $ 3.6 | |
Electronic Technologies Group [Member] | Quell [Member] | |||||
Business Acquisition [Line Items] | |||||
Business Acquisition, Percentage of Voting Interests Acquired | 80.10% | 80.10% |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Goodwill) (Details) $ in Thousands | 6 Months Ended |
Apr. 30, 2020USD ($) | |
Goodwill [Line Items] | |
Opening Balance | $ 1,268,703 |
Goodwill acquired | 34,173 |
Foreign currency translation adjustments | (2,404) |
Adjustments to goodwill | (285) |
Ending Balance | 1,300,187 |
Flight Support Group [Member] | |
Goodwill [Line Items] | |
Opening Balance | 410,044 |
Foreign currency translation adjustments | (569) |
Ending Balance | 409,475 |
Electronic Technologies Group [Member] | |
Goodwill [Line Items] | |
Opening Balance | 858,659 |
Goodwill acquired | 34,173 |
Foreign currency translation adjustments | (1,835) |
Adjustments to goodwill | (285) |
Ending Balance | $ 890,712 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS (Identifiable Intangible Assets) (Details) - USD ($) $ in Thousands | Apr. 30, 2020 | Oct. 31, 2019 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | $ 646,594 | $ 636,243 |
Accumulated Amortization | (260,613) | (238,652) |
Net Carrying Amount | 385,981 | 397,591 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Intangible Asset Gross Carrying Amount | 801,236 | 789,345 |
Intangible Asset Net Carrying Amount | 540,623 | 550,693 |
Trade Names [Member] | ||
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | 154,642 | 153,102 |
Net Carrying Amount | 154,642 | 153,102 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 417,412 | 411,076 |
Accumulated Amortization | (178,510) | (162,722) |
Net Carrying Amount | 238,902 | 248,354 |
Intellectual Property [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 220,372 | 216,359 |
Accumulated Amortization | (76,021) | (70,169) |
Net Carrying Amount | 144,351 | 146,190 |
Licensing Agreements [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 6,559 | 6,559 |
Accumulated Amortization | (4,387) | (4,102) |
Net Carrying Amount | 2,172 | 2,457 |
Patents [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 996 | 986 |
Accumulated Amortization | (691) | (666) |
Net Carrying Amount | 305 | 320 |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 805 | 813 |
Accumulated Amortization | (805) | (813) |
Net Carrying Amount | 0 | 0 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Amount | 450 | 450 |
Accumulated Amortization | (199) | (180) |
Net Carrying Amount | $ 251 | $ 270 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Textuals) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2020 | Apr. 30, 2019 | Apr. 30, 2020 | Apr. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Business Acquisition, Goodwill, Expected Tax Deductible Amount | $ 9 | $ 9 | ||
Amortization expense related to intangible assets | 13.9 | $ 13.1 | 27.6 | $ 25.9 |
Estimated Amortization Expense, remainder of fiscal year | 27.5 | 27.5 | ||
Estimated Amortization Expense, for fiscal 2021 | 52.4 | 52.4 | ||
Estimated Amortization Expense, for fiscal 2022 | 45.8 | 45.8 | ||
Estimated Amortization Expense, for fiscal 2023 | 40.6 | 40.6 | ||
Estimated Amortization Expense, for fiscal 2024 | 36.1 | 36.1 | ||
Estimated Amortization Expense, for fiscal 2025 | 32.2 | 32.2 | ||
Estimated Amortization Expense, thereafter | $ 151.4 | $ 151.4 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Apr. 30, 2020 | Oct. 31, 2019 |
Borrowings under revolving credit facility | $ 730,000 | $ 553,000 |
Finance leases and note payable | 10,213 | 8,955 |
Total debt and capital leases | 740,213 | 561,955 |
Current maturities of long-term debt | (1,025) | (906) |
Long-term debt, net of current maturities | $ 739,188 | $ 561,049 |
LONG-TERM DEBT (Details Textual
LONG-TERM DEBT (Details Textuals) | Apr. 30, 2020 | Oct. 31, 2019 |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 1.60% | 3.00% |
REVENUE (Contract Assets and Li
REVENUE (Contract Assets and Liabilities) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 30, 2020 | Oct. 31, 2019 | |
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract] | ||
Contract assets | $ 56,033 | $ 43,132 |
Contract liabilities | 26,928 | 23,809 |
Net contract assets | 29,105 | $ 19,323 |
Decrease in contract assets, net | 12,901 | |
Increase (Decrease) in Customer Deposits | 3,119 | |
Contract with Customer, Billings in Excess of Unbilled Receivable and New Deposits in Excess of Deposits Recognized as Revenue | $ 9,782 |
REVENUE (Disaggregation of Reve
REVENUE (Disaggregation of Revenue, by Product Line) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2020 | Apr. 30, 2019 | Apr. 30, 2020 | Apr. 30, 2019 | ||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 468,146 | $ 515,648 | $ 974,421 | $ 981,794 | |
Flight Support Group [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 251,964 | 308,251 | 553,031 | 595,464 | |
Flight Support Group [Member] | Aftermarket Replacement Parts [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | [1] | 141,192 | 167,225 | 309,459 | 326,722 |
Flight Support Group [Member] | Repair and Overhaul Parts and Services [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 52,629 | 73,454 | 121,916 | 140,617 |
Flight Support Group [Member] | Specialty Products [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | [3] | 58,143 | 67,572 | 121,656 | 128,125 |
Electronic Technologies Group [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 218,955 | 214,451 | 427,366 | 398,880 | |
Electronic Technologies Group [Member] | Electronic Components for Defense, Space and Aerospace [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | [4] | 168,962 | 161,664 | 329,675 | 299,414 |
Electronic Technologies Group [Member] | Other Electronic Components [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | [5] | 49,993 | 52,787 | 97,691 | 99,466 |
Corporate And Eliminations [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ (2,773) | $ (7,054) | $ (5,976) | $ (12,550) | |
[1] | Includes various jet engine and aircraft component replacement parts. | ||||
[2] | Includes primarily the sale of parts consumed in various repair and overhaul services on selected jet engine and aircraft components, avionics, instruments, composites and flight surfaces of commercial and military aircraft. | ||||
[3] | Includes primarily the sale of specialty components such as thermal insulation blankets, renewable/reusable insulation systems, advanced niche components, complex composite assemblies, and expanded foil mesh. | ||||
[4] | Includes various component parts such as electro-optical infrared simulation and test equipment, electro-optical laser products, electro-optical, microwave and other power equipment, high-speed interface products, power conversion products, underwater locator beacons, emergency locator transmission beacons, traveling wave tube amplifiers, microwave power modules, three-dimensional microelectronic and stacked memory products, crashworthy and ballistically self-sealing auxiliary fuel systems, radio frequency (RF) and microwave amplifiers, transmitters and receivers, high performance communications and electronic intercept receivers and tuners, high performance active antenna systems, and technical surveillance countermeasures equipment. | ||||
[5] | Includes various component parts such as electromagnetic and radio interference shielding, high voltage interconnection devices, high voltage advanced power electronics, harsh environment connectivity products, custom molded cable assemblies and silicone material for a variety of demanding applications. |
REVENUE (Disaggregation of Re_2
REVENUE (Disaggregation of Revenue, by Industry) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2020 | Apr. 30, 2019 | Apr. 30, 2020 | Apr. 30, 2019 | ||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 468,146 | $ 515,648 | $ 974,421 | $ 981,794 | |
Flight Support Group [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 251,964 | 308,251 | 553,031 | 595,464 | |
Flight Support Group [Member] | Aerospace [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 188,655 | 249,225 | 428,578 | 484,398 | |
Flight Support Group [Member] | Defense and Space [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 54,142 | 45,969 | 104,395 | 87,503 | |
Flight Support Group [Member] | Other Industries [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | [1] | 9,167 | 13,057 | 20,058 | 23,563 |
Electronic Technologies Group [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 218,955 | 214,451 | 427,366 | 398,880 | |
Electronic Technologies Group [Member] | Aerospace [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 21,721 | 22,876 | 42,059 | 42,171 | |
Electronic Technologies Group [Member] | Defense and Space [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | 139,491 | 135,952 | 272,601 | 251,171 | |
Electronic Technologies Group [Member] | Other Industries [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 57,743 | 55,623 | 112,706 | 105,538 |
Corporate And Eliminations [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ (2,773) | $ (7,054) | $ (5,976) | $ (12,550) | |
[1] | Principally industrial products. | ||||
[2] | Principally other electronics and medical products. |
REVENUE (Details Textuals)
REVENUE (Details Textuals) $ in Thousands | 3 Months Ended | 6 Months Ended |
Apr. 30, 2020USD ($) | Apr. 30, 2020USD ($) | |
REVENUE [Abstract] | ||
Contract with Customer, Liability, Revenue Recognized | $ 3,100 | $ 16,500 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-05-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Amount | $ 394,400 | $ 394,400 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year 1 day | 1 year 1 day |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-05-02 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Amount | $ 168,000 | $ 168,000 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 6 months | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-11-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, Remaining Performance Obligation, Amount | $ 226,400 | $ 226,400 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 6 months 1 day | 6 months 1 day |
INCOME TAXES (Details Textuals)
INCOME TAXES (Details Textuals) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Apr. 30, 2020 | Jan. 31, 2020 | Apr. 30, 2019 | Jan. 31, 2019 | Apr. 30, 2020 | Apr. 30, 2019 | Jan. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||||||
Effective Income Tax Rate Reconciliation, Percent | 22.60% | 22.50% | 0.30% | 14.50% | |||
Tax benefit from stock option exercises recognized in the period | $ 47.6 | $ 16.6 | |||||
Year Over Year, Deferred Tax Expense From Stock Option Exercised | $ 31 |
FAIR VALUE MEASUREMENTS (Fair V
FAIR VALUE MEASUREMENTS (Fair Value Hierarchy, by Category) (Details) - USD ($) $ in Thousands | Apr. 30, 2020 | Oct. 31, 2019 |
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | $ 157,522 | $ 151,891 |
Liabilities: | ||
Contingent consideration | 18,993 | 18,326 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 0 | 20 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 157,522 | 151,871 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 0 | 0 |
Liabilities: | ||
Contingent consideration | 18,993 | 18,326 |
Corporate Owned Life Insurance [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 157,522 | 151,871 |
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 | 157,522 | 151,871 |
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 | 20 | |
Money Market Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 20 | |
Money Market Funds [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 0 | |
Money Market Funds [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | $ 0 |
FAIR VALUE MEASUREMENTS FAIR VA
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Level 3 Valuation Inputs) (Details) - Fair Value, Inputs, Level 3 [Member] | Apr. 30, 2020 |
Measurement Input, Long-term Revenue Growth Rate [Member] | FY2019 Acquisition [Member] | Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Business Combination, Contingent Consideration, Liability, Measurement Input | (0.07) |
Measurement Input, Long-term Revenue Growth Rate [Member] | FY2019 Acquisition [Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.09 |
Measurement Input, Long-term Revenue Growth Rate [Member] | FY 2017 Acquisition [Member] | Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Business Combination, Contingent Consideration, Liability, Measurement Input | (0.03) |
Measurement Input, Long-term Revenue Growth Rate [Member] | FY 2017 Acquisition [Member] | Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.10 |
Measurement Input, Discount Rate [Member] | FY2019 Acquisition [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.043 |
Measurement Input, Discount Rate [Member] | FY 2017 Acquisition [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.034 |
FAIR VALUE MEASUREMENTS (Contin
FAIR VALUE MEASUREMENTS (Contingent Consideration Liability) (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Change in value of contingent consideration | $ 1,167 | $ 3,104 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Opening balance, Liabilities | 18,326 | |
Change in accrued contingent consideration | 1,167 | |
Change in value of contingent consideration | (500) | |
Ending balance, Liabilities | $ 18,993 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details Textuals) - USD ($) $ in Thousands | Apr. 30, 2020 | Oct. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities | $ 18,993 | $ 18,326 |
Flight Support Group [Member] | FY2019 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 | 6,400 | |
Total liabilities | 1,200 | |
Electronic Technologies Group [Member] | FY 2017 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 | 20,000 | |
Total liabilities | 17,800 | |
Aggregate LCP Liability [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Related liabilities of deferred compensation plans, specified as other long-term liabilities | $ 156,300 | $ 151,100 |
LEASES (ROU Assets and Lease Li
LEASES (ROU Assets and Lease Liabilities) (Details) $ in Thousands | Apr. 30, 2020USD ($) |
Leases [Abstract] | |
Right-of-use assets | $ 60,056 |
Current lease liabilities | 13,365 |
Long-term lease liabilities | 47,570 |
Total operating lease liabilities | $ 60,935 |
LEASES (Operating Lease Expense
LEASES (Operating Lease Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2020 | ||
Leases [Abstract] | |||
Operating lease expense | $ 4,284 | $ 8,544 | |
Variable lease expense | 708 | 1,323 | |
Total operating lease expense (1) | [1] | $ 4,992 | $ 9,867 |
[1] | Excludes short-term lease expense, which is not material. |
LEASES (Future minimum lease pa
LEASES (Future minimum lease payments) (Details) $ in Thousands | Apr. 30, 2020USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
Current fiscal year | $ 7,762 |
Next fiscal twelve months | 16,101 |
Year Two | 14,192 |
Year three | 8,834 |
Year four | 5,006 |
Year five | 4,136 |
Thereafter | 18,004 |
Total minimum lease payments | 74,035 |
Less: amount representing interest | (13,100) |
Present value of minimum lease payments | $ 60,935 |
LEASES (Lease Term and Discount
LEASES (Lease Term and Discount Rate) (Details) | Apr. 30, 2020 |
Leases [Abstract] | |
Weighted average remaining lease term | 7 years |
Weighted average discount rate | 520.00% |
LEASES (Supplemental Cash Flow
LEASES (Supplemental Cash Flow Information) (Details) $ in Thousands | 6 Months Ended |
Apr. 30, 2020USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of lease liabilities | $ 8,448 |
Right-of-use assets obtained in exchange for new lease liabilities | $ 6,824 |
LEASES (Details Textuals)
LEASES (Details Textuals) - USD ($) $ in Thousands | Apr. 30, 2020 | Oct. 31, 2019 |
Item Effected [Line Items] | ||
Next fiscal twelve months | $ 16,101 | |
Year Two | 14,192 | |
Year three | 8,834 | |
Year four | 5,006 | |
Year five | 4,136 | |
Thereafter | $ 18,004 | |
Previous Accounting Guidance [Member] | ||
Item Effected [Line Items] | ||
Next fiscal twelve months | $ 15,500 | |
Year Two | 15,600 | |
Year three | 13,800 | |
Year four | 8,500 | |
Year five | 4,700 | |
Thereafter | $ 18,800 |
NET INCOME PER SHARE ATTRIBUT_3
NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2020 | Apr. 30, 2019 | Apr. 30, 2020 | Apr. 30, 2019 | |
Numerator: | ||||
Net income attributable to HEICO | $ 75,453 | $ 81,782 | $ 197,341 | $ 161,114 |
Denominator: | ||||
Weighted Average Number of Shares Outstanding, Basic | 134,669 | 133,313 | 134,596 | 133,123 |
Effect of dilutive stock options | 2,448 | 3,893 | 2,673 | 3,969 |
Weighted Average Number of Shares Outstanding, Diluted | 137,117 | 137,206 | 137,269 | 137,092 |
Earnings Per Share, Basic | $ 0.56 | $ 0.61 | $ 1.47 | $ 1.21 |
Earnings Per Share, Diluted | $ 0.55 | $ 0.60 | $ 1.44 | $ 1.18 |
Anti-dilutive stock options excluded | 448 | 470 | 283 | 615 |
OPERATING SEGMENTS (Details)
OPERATING SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2020 | Apr. 30, 2019 | Apr. 30, 2020 | Apr. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 468,146 | $ 515,648 | $ 974,421 | $ 981,794 |
Depreciation | 6,765 | 6,444 | 13,565 | 12,656 |
Amortization | 14,928 | 14,067 | 29,711 | 27,892 |
Operating Income (Loss) | 108,161 | 119,183 | 219,151 | 217,130 |
Capital expenditures | 5,585 | 6,689 | 12,435 | 12,596 |
Corporate And Eliminations [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | (2,773) | (7,054) | (5,976) | (12,550) |
Depreciation | 256 | 252 | 511 | 503 |
Amortization | 246 | 246 | 492 | 492 |
Operating Income (Loss) | (4,896) | (10,335) | (13,442) | (16,870) |
Capital expenditures | 0 | 8 | 5 | 8 |
Flight Support Group [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 251,964 | 308,251 | 553,031 | 595,464 |
Depreciation | 3,628 | 3,403 | 7,245 | 6,758 |
Amortization | 4,752 | 4,920 | 9,611 | 9,723 |
Operating Income (Loss) | 47,531 | 62,166 | 109,576 | 115,046 |
Capital expenditures | 2,647 | 3,727 | 6,765 | 6,576 |
Electronic Technologies Group [Member] | Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 218,955 | 214,451 | 427,366 | 398,880 |
Depreciation | 2,881 | 2,789 | 5,809 | 5,395 |
Amortization | 9,930 | 8,901 | 19,608 | 17,677 |
Operating Income (Loss) | 65,526 | 67,352 | 123,017 | 118,954 |
Capital expenditures | $ 2,938 | $ 2,954 | $ 5,665 | $ 6,012 |
OPERATING SEGMENTS (Assets) (De
OPERATING SEGMENTS (Assets) (Details) - USD ($) $ in Thousands | Apr. 30, 2020 | Oct. 31, 2019 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 3,364,835 | $ 2,969,211 |
Other Primarily Corporate and Intersegment [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 335,923 | 176,442 |
Flight Support Group [Member] | Operating Segments [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 1,201,852 | 1,149,737 |
Electronic Technologies Group [Member] | Operating Segments [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 1,827,060 | $ 1,643,032 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Schedule of Product Warranties [Line Items] | ||
Balances as of beginning of fiscal year | $ 2,810 | $ 3,306 |
Accruals for warranties | 1,194 | 1,264 |
Acquired warranty liabilities | 50 | |
Warranty claims settled | (952) | (1,543) |
Balances as of end of period | $ 3,102 | $ 3,027 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details Textuals) $ in Thousands | Apr. 30, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 4,800 |