Exhibit 99.1
FOR IMMEDIATE RELEASE
May 29, 2003
Thomas S. Irwin (954) 987-4000 ext. 7560
Victor H. Mendelson (305) 374-1745 ext. 7590
HEICO CORPORATION REPORTS SECOND QUARTER RESULTS
HOLLYWOOD, FL, and MIAMI, FL -- HEICO CORPORATION (NYSE: HEI and HEI.A), today
reported net income of $2,608,000, or 12 cents per share, for the second quarter
of fiscal 2003 on sales of $41,591,000. For the second quarter of fiscal 2002,
net income was $3,970,000, or 18 cents per share, on sales of $43,001,000. Net
income in the second quarter of fiscal 2002 included $765,000, or 3 cents per
share, from the after tax gain on the sale of a product line.
For the first six months of fiscal 2003, net income totaled $5,442,000, or 25
cents per share, on sales of $83,379,000. Net income for the first half of
fiscal 2002 was $6,798,000, or 30 cents per share, including the $765,000, or 3
cents per share, after tax gain on the sale of the product line, on sales of
$84,013,000.
Cash flow from operating activities totaled $13.5 million for the first six
months of fiscal 2003, up $3.2 million from the first half of fiscal 2002, and
equaled approximately 250% of the Company's net income in the first half of
fiscal 2003.
Operating income was $4,931,000 in the second quarter of fiscal 2003 versus
$6,003,000 in the second quarter of fiscal 2002. For the first six months of
fiscal 2003, operating income totaled $10,460,000 versus $11,765,000 in the
first half of fiscal 2002. Operating income in the second quarter and the first
six months of fiscal 2003 reflects lower sales and earnings within the Company's
Electronic Technologies Group (ETG), partially offset by increased sales and
earnings within the Company's Flight Support Group (FSG) and lower corporate
expenses.
Sales within the FSG increased 3% to $30,376,000 in the second quarter of fiscal
2003 from $29,538,000 in the second quarter of fiscal 2002 reflecting increased
revenues related to sales of new products and services. For the first six months
of fiscal 2003, FSG sales increased 6% to $62,262,000 from $58,592,000 in the
first six months of fiscal 2002, which is also primarily attributable to new
products and services.
Operating income of the FSG in the second quarter of fiscal 2003 increased 8% to
$4,162,000 from $3,840,000 in the second quarter of fiscal 2002 and increased
18% to $9,539,000 in the first six months of fiscal 2003 from $8,106,000 in the
first six months of fiscal 2002. These increases primarily reflect higher sales
and lower new product development expenses.
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Sales and operating income within the ETG were $11,288,000 and $1,904,000,
respectively, in the second quarter of fiscal 2003 versus $13,630,000 and
$3,431,000, respectively, in the second quarter of fiscal 2002. For the first
six months of fiscal 2003, sales and operating income within the ETG were
$21,288,000 and $2,672,000, respectively, versus $25,764,000 and $6,091,000 in
the first six months of fiscal 2002. These decreases primarily resulted from
lower foreign military sales, delays in shipments resulting from production
delays in certain products as well as some delays pursuant to customer
requirements.
ETG sales and operating income for the second quarter were up 13% and 148%,
respectively, compared to the first quarter of fiscal 2003, reflecting delivery
of some of the previously delayed products.
Laurans A. Mendelson, HEICO's Chairman, President & Chief Executive Officer,
remarked, "We are pleased to report improved earnings in our Flight Support
Group, despite the continued weakness in the world economy and commercial
aerospace industry, which has been further impacted by the military conflict in
Iraq and the outbreak of SARS. The improved earnings in the Flight Support Group
are a result of our new product development efforts and our strategic
relationships with some of the world's major airlines. We believe that this
increase validates HEICO's well-known strategy of constantly focusing on medium
to long-term growth opportunities. In addition, we have continued to expand our
services to the regional airlines through a small acquisition earlier this
month.
"ETG sales for the first six months of 2003 were lower than the same period of
2002; however, sales and operating income for the second quarter of 2003 were up
$1.3 million and $1.1 million, respectively, compared to the first quarter of
2003. This increase reflects the shipments of some of the products that were
delayed in the first quarter, although the timing of certain foreign military
sales remains uncertain.
"We are also pleased to note that our cash flow from operating activities
remained strong in the first six months of fiscal 2003, allowing us to
successfully replace our $120 million revolving credit facility earlier this
month and to reduce outstanding borrowings on the facility by $8 million since
our last fiscal year end and by $20 million over the past twelve months.
"Although we remain confident of our long-term opportunities for growth, we have
revised our target fiscal 2003 earnings to a range of 50 to 55 cents per share
on sales growth of 1% to 2% over our fiscal 2002 sales due to the current
uncertainty in the commercial aviation industry. Despite challenges in the
aviation industry, HEICO remains committed to growth through its new product
development programs. Our new parts and repair services continue to lower the
operating costs of our worldwide customers, and have become integral to their
cost reduction and survival strategies. Further, our partnerships with
Lufthansa, American Airlines, United Airlines, Delta Air Lines, and Air Canada
give us a committed customer base on which we can plan our growth and unit
volumes."
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As previously announced, HEICO will hold a conference call on Friday, May 30,
2003 at 8:30 a.m. Eastern time to discuss its second quarter results.
Individuals wishing to participate in the conference call should dial:
U.S./Canada/International/Local 302-709-8328, wait for the conference operator
and provide the operator with the "Verbal" Passcode/Conference ID 559031. A
digital replay will be available one hour after the completion of the
conference, for 24 hours. To access, dial: U.S./Canada/International/Local
402-220-2946 and enter Passcode/Conference ID 559031#.
HEICO Corporation is engaged primarily in certain niche segments of the
aerospace, defense 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 contractors
and military agencies worldwide in addition to communications, electronics and
medical equipment manufacturers. For more information about HEICO, please visit
our web site at http://www.heico.com.
The stock symbols for HEICO's two classes of common stock on most web sites are
HEI and HEI.A. However, some web sites change HEICO's Class A Common Stock stock
symbol (HEI.A) to HEI/A or HEIa.
Certain matters discussed in this press release include forward-looking
statements which involve risks and uncertainties. HEICO's actual experience may
differ materially from that discussed as a result of factors, including, but not
limited to, the demand for commercial air travel, product specification costs
and requirements, governmental and regulatory demands, competition on military
programs, HEICO's ability to introduce new products, product pricing levels,
airline fleet changes, customer credit risk, U.S. governmental export policies
and restrictions, military program funding by U.S. and non-U.S. government
agencies, HEICO's ability to make acquisitions and achieve operating synergies
from acquired businesses, interest rates and economic conditions within and
outside of the aerospace, defense and electronics industries. 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
Forms 10-K, Forms 10-Q and Forms 8-K.
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HEICO CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended April 30,
----------------------------
2003 2002
------------ ------------
Net sales $ 41,591,000 $ 43,001,000
Cost of sales 27,690,000 27,642,000
Selling, general and administrative expenses 8,970,000 9,356,000
------------ ------------
Operating income 4,931,000 6,003,000
Interest expense (285,000) (474,000)
Interest and other income 8,000 29,000
Gain on sale of product line -- 1,230,000
------------ ------------
Income before income taxes and minority interests 4,654,000 6,788,000
Income tax expense 1,641,000 2,430,000
------------ ------------
Income before minority interests 3,013,000 4,358,000
Minority interests in consolidated subsidiaries 405,000 388,000
------------ ------------
Net income $ 2,608,000 $ 3,970,000
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Net income per share:
Basic $ .12 $ .19
Diluted $ .12 $ .18
Weighted average number of common shares
outstanding:
Basic 21,018,308 20,886,951
Diluted 22,085,108 22,654,966
Three Months Ended April 30,
----------------------------
2003 2002 /(1)/
------------ ------------
Operating segment information: -
Net sales:
Flight Support Group $ 30,376,000 $ 29,538,000
Electronic Technologies Group 11,288,000 13,630,000
Intersegment sales (73,000) (167,000)
------------ ------------
$ 41,591,000 $ 43,001,000
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Operating income:
Flight Support Group $ 4,162,000 $ 3,840,000
Electronic Technologies Group 1,904,000 3,431,000
Other, primarily corporate (1,135,000) (1,268,000)
------------ ------------
$ 4,931,000 $ 6,003,000
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(1) During the fiscal year ended October 31, 2002, one of the Company's
subsidiaries formerly included in the Electronic Technologies Group was
reclassified to the Flight Support Group. Prior period results have been
retroactively restated to reflect the revised segment classification.
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HEICO CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
Six Months Ended April 30,
----------------------------
2003 2002
------------ ------------
Net sales $ 83,379,000 $ 84,013,000
Cost of sales 55,702,000 53,804,000
Selling, general and administrative expenses 17,217,000 18,444,000
------------ ------------
Operating income 10,460,000 11,765,000
Interest expense (630,000) (1,262,000)
Interest and other income 89,000 92,000
Gain on sale of product line -- 1,230,000
------------ ------------
Income before income taxes and minority interests 9,919,000 11,825,000
Income tax expense 3,498,000 4,200,000
------------ ------------
Income before minority interests 6,421,000 7,625,000
Minority interests in consolidated subsidiaries 979,000 827,000
------------ ------------
Net income $ 5,442,000 $ 6,798,000
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Net income per share:
Basic $ .26 $ .33
Diluted $ .25 $ .30
Weighted average number of common shares
outstanding:
Basic 21,002,926 20,863,790
Diluted 22,165,480 22,596,372
Six Months Ended April 30,
----------------------------
2003 2002 /(1)/
------------ ------------
Operating segment information: -
Net sales:
Flight Support Group $ 62,262,000 $ 58,592,000
Electronic Technologies Group 21,288,000 25,764,000
Intersegment sales (171,000) (343,000)
------------ ------------
$ 83,379,000 $ 84,013,000
============ ============
Operating income:
Flight Support Group $ 9,539,000 $ 8,106,000
Electronic Technologies Group 2,672,000 6,091,000
Other, primarily corporate (1,751,000) (2,432,000)
------------ ------------
$ 10,460,000 $ 11,765,000
============ ============
(1) During the fiscal year ended October 31, 2002, one of the Company's
subsidiaries formerly included in the Electronic Technologies Group was
reclassified to the Flight Support Group. Prior period results have been
retroactively restated to reflect the revised segment classification.
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HEICO CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
April 30, 2003 October 31, 2002 /(1)/
-------------- ----------------------
Cash and cash equivalents $ 7,662,000 $ 4,539,000
Accounts receivable, net 25,162,000 28,407,000
Inventories 54,342,000 54,514,000
Prepaid expenses and other current assets 10,229,000 11,106,000
-------------- ---------------------
Total current assets 97,395,000 98,566,000
Property, plant and equipment, net 40,106,000 40,059,000
Goodwill and other intangible assets, net 189,011,000 188,963,000
Other assets 8,195,000 8,744,000
-------------- ---------------------
Total assets $ 334,707,000 $ 336,332,000
============== =====================
Current maturities of long-term debt $ 2,000 $ 6,756,000
Other current liabilities 20,794,000 22,575,000
-------------- ---------------------
Total current liabilities 20,796,000 29,331,000
Long-term debt, net of current maturities 47,980,000 49,230,000
Other non-current liabilities 14,038,000 12,394,000
-------------- ---------------------
Total liabilities 82,814,000 90,955,000
Minority interests in consolidated subsidiaries 39,444,000 38,313,000
Shareholders' equity 212,449,000 207,064,000
-------------- ---------------------
Total liabilities and shareholders' equity $ 334,707,000 $ 336,332,000
============== =====================
(1) Certain amounts in the prior year's financial statements have been
reclassified to conform to the current year presentation.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended April 30,
----------------------------
2003 2002
------------ ------------
Cash flows from operating activities:
Net income $ 5,442,000 $ 6,798,000
Depreciation and amortization 2,429,000 2,181,000
Gain on sale of product line -- (1,230,000)
Decrease in accounts receivable 3,245,000 5,720,000
Decrease (increase) in inventories 172,000 (4,335,000)
Increase (decrease) in income taxes payable 988,000 (564,000)
Other 1,224,000 1,715,000
------------ ------------
Net cash provided by operating activities 13,500,000 10,285,000
------------ ------------
Cash flows from investing activities:
Capital expenditures (2,343,000) (3,347,000)
Acquisitions and related costs, net of cash acquired (83,000) (4,844,000)
Other 468,000 618,000
------------ ------------
Net cash used in investing activities (1,958,000) (7,573,000)
------------ ------------
Cash flows from financing activities:
(Payments on) proceeds of long-term debt, net (8,004,000) 986,000
Other (415,000) (215,000)
------------ ------------
Net cash flows (used in) provided by financing activities (8,419,000) 771,000
------------ ------------
Net increase in cash and cash equivalents 3,123,000 3,483,000
Cash and cash equivalents at beginning of year 4,539,000 4,333,000
------------ ------------
Cash and cash equivalents at end of period $ 7,662,000 $ 7,816,000
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