EXHIBIT 99.1
HEICO Corporation Reports Fiscal 2009 Fourth Quarter and Full Year Results
4th Quarter Net Sales, Operating Income and Net Income Improve Over Prior Fiscal 2009 Quarterly Levels; Company Targets Growth in Fiscal 2010 Sales and Earnings
HOLLYWOOD, Fla. and MIAMI, Dec. 17, 2009 (GLOBE NEWSWIRE) -- HEICO Corporation (NYSE:HEI-A) (NYSE:HEI) today reported net income of $11,636,000, or 43 cents per diluted share, for the fourth quarter of fiscal 2009, compared to $13,650,000, or 50 cents per diluted share, for the fourth quarter of fiscal 2008 and up from $11,132,000, or 41 cents per diluted share, in the third quarter of fiscal 2009. For the fiscal year ended October 31, 2009, net income was $44,626,000, or $1.65 per diluted share, compared to the $48,511,000, or $1.78 per diluted share, reported for the fiscal year end ed October 31, 2008.
Operating income totaled $24,061,000 in the fourth quarter of fiscal 2009, compared to $28,710,000 in the fourth quarter of fiscal 2008 and up from $21,422,000 in the third quarter of fiscal 2009. For the fiscal year ended October 31, 2009, operating income was $88,255,000 compared to $105,788,000 for the fiscal year ended October 31, 2008. Our consolidated operating margin was 16.8% for the fourth quarter of fiscal 2009, compared to 18.3% in the fourth quarter of fiscal 2008 and up from 16.0% in the third quarter of fiscal 2009, and was 16.4% for the fiscal year ended October 31, 2009, compared to 18.2% for the fiscal year ended October 31, 2008.
Net sales totaled $143,607,000 in the fourth quarter of fiscal 2009, compared to $156,716,000 in the fourth quarter of fiscal 2008 and up from $134,086,000 in the third quarter of fiscal 2009. For the fiscal year ended October 31, 2009, net sales totaled $538,296,000 compared to $582,347,000 for the fiscal year ended October 31, 2008.
(NOTE: HEICO has two classes of common stock traded on the NYSE. Both classes, the Class A Common Stock (HEI.A) and the Common Stock (HEI), are virtually identical in all economic respects. The only difference between the share classes is the voting rights. The Class A Common Stock (HEI.A) receives 1/10 vote per share and the Common Stock (HEI) receives one vote per share.)
Laurans A. Mendelson, HEICO's Chairman, President and CEO, commenting on the Company's fourth quarter results stated, "We are extremely pleased to see our net sales, operating income and net income improve in the fourth quarter compared to our reported results for each of the first three quarters of fiscal 2009. We are starting to see some early signs that the impacts of the global recession may be moderating.
"Our Flight Support Group reported net sales of $97.9 million and $395.4 million, respectively, for the fourth quarter and fiscal year ended October 31, 2009, compared to $116.5 million and $436.8 million, respectively, for the fourth quarter and fiscal year ended October 31, 2008. Fiscal 2009 fourth quarter net sales were comparable to the $97.2 million reported in the third quarter of fiscal 2009. Demand for our Flight Support Group products and services continued to be pressured by airline capacity reductions and short-term maintenance deferrals.
"Operating margins of the Flight Support Group were 14.0% and 15.2%, respectively, for the fourth quarter and fiscal year ended October 31, 2009, compared to 18.4% and 18.6%, respectively, for the fourth quarter and fiscal year ended October 31, 2008. The decreases reflect the impact of lower sales volume and variations in product mix. Operating income of the Flight Support Group totaled $13.7 million and $60.0 million, respectively, for the fourth quarter and fiscal year ended October 31, 2009, compared to $21.5 million and $81.2 million, respectively, for the fourth quarter and fiscal year ended October 31, 2008 reflecting the lower sales and operating margins.
"Net sales of our Electronic Technologies Group increased 14% to a record $45.8 million for the fourth quarter of fiscal 2009, up from $40.3 million for the fourth quarter of fiscal 2008, and decreased slightly to $143.4 million for the fiscal year ended October 31, 2009 from $146.0 million for the fiscal year ended October 31, 2008.
"Our Electronic Technologies Group reported record operating income for the fourth quarter and fiscal year ended October 31, 2009, with increases of 22% and 3%, respectively, over fiscal 2008. Operating income of our Electronic Technologies Group increased to $13.5 million for the fourth quarter of fiscal 2009, up from $11.0 million for the fourth quarter of fiscal 2008, and increased to $40.0 million for the fiscal year ended October 31, 2009, up from $38.8 million for the fiscal year ended October 31, 2008.
"Net sales and operating income of our Electronic Technologies Group benefited from a mid-year acquisition and from some strength in our space and defense related businesses. Strength in these markets was partially offset by reduced customer demand for certain of our medical, telecommunication and electronic products reflecting the effects of the global economic recession.
"Operating margins of the Electronic Technologies Group grew to a strong 29.4% and 27.9%, respectively, for the fourth quarter and fiscal year ended October 31, 2009, up from 27.4% and 26.6% reported for the fourth quarter and fiscal year ended October 31, 2008, reflecting favorable variations in product mix.
"Cash flow from operating activities for the fiscal year ended October 31, 2009 totaled $75.8 million, representing 170% of net income and including $32.1 million generated in the fourth quarter of fiscal 2009, compared to $73.2 million for the fiscal year ended October 31, 2008. Capital expenditures were $10.3 million in fiscal 2009, in line with previous expectations.
"Our cash flow and balance sheet remain extremely strong. As of October 31, 2009, the Company's net debt to equity ratio was a low 11%, with net debt (total debt less cash and cash equivalents) of $48.3 million. We have no significant debt maturities until fiscal 2013.
"Our strong cash flow and balance sheet will continue to allow us to take advantage of acquisition opportunities if they arise.
"As we look forward to fiscal 2010, we expect continued softness during the first half of calendar 2010 in our commercial aviation markets, which represents approximately 68% of our sales. While the consensus opinion within the industry expects a recovery within the airline industry in 2010, the strength and exact timing of such a recovery is uncertain at this time.
"Based on this and conditions within our other major markets, we are targeting fiscal 2010 growth of 5 - 8% in net sales and earnings, or within a range of $565 - $580 million for net sales and $1.74 - $1.79 for net income per diluted share with consolidated operating margins for the full year improving to approximately 17%. These targets exclude the impact of any potential acquisition opportunities and could increase with a stronger or more rapid recovery in the airline industry.
"Fiscal 2010 cash flow provided by operating activities is expected to remain strong and to approximate $75 - $80 million. Capital expenditures in fiscal 2010 are anticipated to approximate $12 - $15 million.
"We continue to believe our focus on intermediate and long-term growth with an emphasis on the development of new products and services to meet the needs of our customers is a solid foundation to best reward HEICO and its shareholders and to provide the best opportunity for sustainable growth."
As previously announced, HEICO will hold a conference call on Friday, December 18, 2009 at 9:00 a.m. Eastern Standard Time to discuss its fourth quarter and fiscal year results. Individuals wishing to participate in the conference call should dial: U.S. (888) 299-4099, Canada (800) 796-9248, and International (302) 709-8352, wait for the conference operator and provide the operator with the "Verbal" Passcode/Conference ID VM62337 (or "8662337"). A digital replay will be available two hours after the completion of the conference for 14 days. To access, dial: (402) 220-2946, and enter the Playback Passcode/Conference ID 62337#.
There are currently approximately 15.7 million shares of HEICO's Class A Common Stock (HEI.A) outstanding and 10.4 million shares of HEICO's Common Stock (HEI) outstanding. The stock symbols for HEICO's two classes of common stock on most web sites are HEI.A and HEI. However, some web sites change HEICO's Class A Common Stock trading symbol (HEI.A) to HEI/A or HEIa.
HEICO Corporation is engaged primarily in certain niche segments of the aviation, defense, space and electronics industries through its Hollywood, FL-based HEICO Aerospace Holdings Corp. subsidiary and its Miami, FL-based HEICO Electronic Technologies Corp. subsidiary. HEICO's customers include a majority of the world's airlines and airmotives as well as numerous defense and space contractors and military agencies worldwide in addition to medical, telecommunication and electronic equipment manufacturers. For more information about HEICO, please visit our web site at http://www.heico.com.
Certain statements in this press release constitute forward-looking statements, which are subject to risks, uncertainties and contingencies. HEICO's actual results may differ materially from those expressed in or implied by those forward-looking statements as a result of factors including, but not limited to: lower demand for commercial air travel or airline fleet changes, which could cause lower demand for our goods and services; product specification costs and requirements, which could cause an increase to our costs to complete contracts; governmental and regulatory demands, export policies and restrictions, reductions in defense, space or homeland security spending by U.S. and/or foreign customers or competition from existing and new competitors, which could reduce our sales; HEICO's ability to introduce new products and product pricing levels, which could reduce our sales or sales growth; HEICO's ability to make acquisitions and achieve operating synergies from acquired businesses, customer credit risk, interest rates and economic conditions within and outside of the aviation, defense, space, medical, telecommunication and electronic industries, which could negatively impact our costs and revenues; and HEICO's ability to maintain effective internal controls, which could adversely affect our business and the market price of our common stock. Parties receiving this material are encouraged to review all of HEICO's filings with the Securities and Exchange Commission, including, but not limited to filings on Form 10-K, Form 10-Q and Form 8-K. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
HEICO CORPORATION Condensed Consolidated Statements of Operations (Unaudited) Fiscal year ended October 31, ------------------------------- 2009 2008 -------------- -------------- Net sales $538,296,000 $582,347,000 Cost of sales 357,285,000 371,852,000 Selling, general and administrative expenses 92,756,000 104,707,000 -------------- -------------- Operating income 88,255,000 105,788,000 Interest expense (615,000) (2,314,000) Other income (expense) 205,000 (637,000) -------------- -------------- Income before income taxes and minority interests 87,845,000 102,837,000 Income tax expense 28,000,000 35,450,000 -------------- -------------- Income before minority interests 59,845,000 67,387,000 Minority interests' share of income 15,219,000 18,876,000 -------------- -------------- Net income $44,626,000 (a) $48,511,000 (b) ============== ============== Net income per share: Basic $1.70 $1.84 Diluted $1.65 $1.78 Weighted average number of common shares outstanding: Basic 26,204,799 26,309,139 Diluted 27,024,031 27,243,356 Fiscal year ended October 31, ------------------------------- 2009 2008 -------------- -------------- Operating segment information: - Net sales: Flight Support Group $395,423,000 $436,810,000 Electronic Technologies Group 143,372,000 146,044,000 Intersegment sales (499,000) (507,000) -------------- -------------- $538,296,000 $582,347,000 ============== ============== Operating income: Flight Support Group $60,003,000 $81,184,000 Electronic Technologies Group 39,981,000 38,775,000 Other, primarily corporate (11,729,000) (14,171,000) -------------- -------------- $88,255,000 $105,788,000 ============== ============== HEICO CORPORATION Condensed Consolidated Statements of Operations (Unaudited) Three months ended October 31, ------------------------------- 2009 2008 -------------- -------------- Net sales $143,607,000 $156,716,000 Cost of sales 94,829,000 99,257,000 Selling, general and administrative expenses 24,717,000 28,749,000 -------------- -------------- Operating income 24,061,000 28,710,000 Interest expense (131,000) (363,000) Other income (expense) 19,000 (419,000) -------------- -------------- Income before income taxes and minority interests 23,949,000 27,928,000 Income tax expense 8,669,000 9,410,000 -------------- -------------- Income before minority interests 15,280,000 18,518,000 Minority interests' share of income 3,644,000 4,868,000 -------------- -------------- Net income $11,636,000 $13,650,000 ============== ============== Net income per share: Basic $.45 $.52 Diluted $.43 $.50 Weighted average number of common shares outstanding: Basic 26,101,350 26,395,921 Diluted 26,935,366 27,246,666 Three months ended October 31, ------------------------------- 2009 2008 -------------- -------------- Operating segment information: - Net sales: Flight Support Group $97,880,000 $116,524,000 Electronic Technologies Group 45,849,000 40,347,000 Intersegment sales (122,000) (155,000) -------------- -------------- $143,607,000 $156,716,000 ============== ============== Operating income: Flight Support Group $13,706,000 $21,461,000 Electronic Technologies Group 13,473,000 11,044,000 Other, primarily corporate (3,118,000) (3,795,000) -------------- -------------- $24,061,000 $28,710,000 ============== ============== HEICO CORPORATION Footnote to Condensed Consolidated Statements of Operations (Unaudited) ---------------------- (a) Fiscal 2009 net income reflects a settlement reached with the Internal Revenue Service in the first quarter of fiscal 2009 concerning the income tax credit claimed by the Company on its U.S. federal filings for qualified research and development activities incurred during fiscal years 2002 through 2005 as well as an aggregate reduction to the related reserve for fiscal years 2006 through 2008, which increased net income by approximately $1,225,000, or $.05 per diluted share. (b) Fiscal 2008 net income reflects impairment charges related to the valuation of certain intangible assets within the Electronic Technologies Group, which in aggregate decreased net income by $1,140,000, or $.04 per diluted share. HEICO CORPORATION Condensed Consolidated Balance Sheets (Unaudited) As of October 31, ------------------------------- 2009 2008 -------------- -------------- Cash and cash equivalents $7,167,000 $12,562,000 Accounts receivable, net 77,864,000 88,403,000 Inventories, net 137,585,000 132,910,000 Prepaid expenses and other current assets 20,961,000 17,635,000 -------------- -------------- Total current assets 243,577,000 251,510,000 Property, plant and equipment, net 60,528,000 59,966,000 Goodwill 365,243,000 323,393,000 Other assets 63,562,000 41,673,000 -------------- -------------- Total assets $732,910,000 $676,542,000 ============== ============== Current maturities of long-term debt $237,000 $220,000 Other current liabilities 65,276,000 81,008,000 -------------- -------------- Total current liabilities 65,513,000 81,228,000 Long-term debt, net of current maturities 55,194,000 37,381,000 Deferred income taxes 41,340,000 39,192,000 Other long-term liabilities 23,268,000 17,003,000 -------------- -------------- Total liabilities 185,315,000 174,804,000 Minority interests in consolidated subsidiaries 89,742,000 83,978,000 Shareholders' equity 457,853,000 417,760,000 -------------- -------------- Total liabilities and shareholders' equity $732,910,000 $676,542,000 ============== ============== HEICO CORPORATION Condensed Consolidated Statements of Cash Flows (Unaudited) Fiscal year ended October 31, ------------------------------- 2009 2008 -------------- -------------- Operating Activities: Net income $44,626,000 $48,511,000 Depreciation and amortization 14,967,000 15,052,000 Impairment of intangible assets 300,000 1,835,000 Deferred income tax (benefit) provision (2,651,000) 3,617,000 Minority interests' share of income 15,219,000 18,876,000 Tax benefit from stock option exercises 1,890,000 6,248,000 Excess tax benefit from stock option exercises (1,573,000) (4,324,000) Stock option compensation expense 181,000 142,000 Decrease (increase) in accounts receivable 15,214,000 (4,749,000) Increase in inventories (87,000) (16,597,000) (Decrease) increase in current liabilities (17,851,000) 3,571,000 Other 5,582,000 980,000 -------------- -------------- Net cash provided by operating activities 75,817,000 73,162,000 -------------- -------------- Investing Activities: Acquisitions and related costs, net of cash acquired (71,066,000) (29,038,000) Capital expenditures (10,253,000) (13,455,000) Other 20,000 166,000 -------------- -------------- Net cash used in investing activities (81,299,000) (42,327,000) -------------- -------------- Financing Activities: Borrowings (payments) on revolving credit facility, net 18,000,000 (16,000,000) Payment of industrial development revenue bonds -- (1,980,000) Distributions to minority interest owners (9,591,000) (7,456,000) Repurchases of common stock (8,098,000) -- Cash dividends paid (3,150,000) (2,631,000) Excess tax benefit from stock option exercises 1,573,000 4,324,000 Proceeds from stock option exercises 1,207,000 2,398,000 Other (219,000) (1,158,000) -------------- -------------- Net cash used in financing activities (278,000) (22,503,000) -------------- -------------- Effect of exchange rate changes on cash 365,000 (717,000) -------------- -------------- Net (decrease) increase in cash and cash equivalents (5,395,000) 7,615,000 Cash and cash equivalents at beginning of year 12,562,000 4,947,000 -------------- -------------- Cash and cash equivalents at end of year $7,167,000 $12,562,000 ============== ==============
CONTACT: HEICO Corporation Thomas S. Irwin (954) 987-4000 ext. 7560 Victor H. Mendelson (305) 374-1745 ext. 7590