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Heico Annual Report, Year Ended Oct 31, 2004

Filing Date
Filed January 14, 2005
Period End
October 31, 2004
Securities
HEIHEI-A
In the record · 2016–202610-K1010-Q338-K83

HEI filed 10 annual reports (10-K), 33 quarterly reports (10-Q) and 83 current reports (8-K) between 2016 and 2026.

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01—Abstract

Summary

Summary of the 10-K filed January 14, 2005. Cited figures are marked; the original filing is the authoritative source.

HEICO Corporation (HEI) reported fiscal 2004 (year ended October 31, 2004) net sales of $215.7 milliona, up from $176.5 million in fiscal 2003, and net income of $20.6 million, or $.80 per diluted share, compared with $12.2 million, or $.50 per diluted share, a year earlier.

Operating income rose to $32.6 millionb from $23.2 million. The Electronic Technologies Group's operating income increased to $15.3 million from $8.5 million, reflecting the December 2003 acquisition of an 80% interest in Sierra Microwave Technology, while the Flight Support Group's operating income rose to $24.3 million from $19.2 million on higher aftermarket and repair sales. Results also include a $5.0 million key-person life insurance receipt, which increased net income by $4.0 million, partly offset by $850,000 of restructuring expenses and $410,000 of litigation-related costs.

Balance sheet strength improved over the year. Total debt fell to $18.1 millionc from $32.0 million, as the company repaid $14.0 million net on its $120 million revolving credit facility, and shareholders' equity rose to $247.4 million from $221.5 million. Backlog grew to $45.2 million from $34.6 million.

Management stated it is targeting fiscal 2005 net sales and earnings growth over fiscal 2004 results, including the effect of the December 2004 Connectronics acquisition, which the filing describes as not significant to consolidated financial statements. The filing also notes that the balance sheet and cash flow statements for fiscal 2003 and 2002 were restated to reclassify capitalized tooling costs into property, plant and equipment, with no effect on reported income. The company paid semi-annual cash dividends and cited its 52nd consecutive semi-annual dividend in July 2004.

02—Key points

Key Highlights

  1. Net sales rose 22.3% to $215.7 million in fiscal 2004, with the Flight Support Group at $153.2 million and the Electronic Technologies Group at $62.6 million.
  2. Operating income increased 40.6% to $32.6 million, and operating margin improved to 15.1% from 13.2%.
  3. Net income was $20.6 million, or $.80 per diluted share, versus $12.2 million, or $.50 per diluted share, in fiscal 2003, helped by a $5.0 million life insurance receipt.
  4. Total debt declined to $18.1 million from $32.0 million, and cash flow from operations was $44.1 million.
  5. Backlog increased to $45.2 million at October 31, 2004, from $34.6 million a year earlier.
  6. Acquisitions included the 80% interest in Sierra Microwave Technology (December 2003) and Connectronics (December 2004, subsequent event).
  7. Prior balance sheet and cash flow periods were restated to reclassify capitalized tooling costs into property, plant and equipment, with no effect on net income.

03—Questions

Frequently Asked Questions

  1. How did HEICO perform financially in fiscal 2004?

    Net sales were $215.7 million, up from $176.5 million, and net income was $20.6 million, or $.80 per diluted share, compared with $12.2 million, or $.50 per diluted share, in fiscal 2003. Results included a $5.0 million key-person life insurance receipt that increased net income by $4.0 million.

  2. What drove the growth in the Electronic Technologies Group?

    Sales in the Electronic Technologies Group rose to $62.6 million from $48.6 million, primarily from the December 2003 acquisition of Sierra Microwave Technology and improved demand for defense and industrial electronics components. Its operating income increased to $15.3 million from $8.5 million.

  3. How strong is HEICO's balance sheet?

    Total debt decreased to $18.1 million at October 31, 2004, from $32.0 million, as the company repaid borrowings under its $120 million revolving credit facility. Shareholders' equity increased to $247.4 million from $221.5 million.

  4. What is the company's outlook for fiscal 2005?

    Management said it is targeting fiscal 2005 net sales and earnings growth over fiscal 2004 results, expects Flight Support Group operating margins to continue improving year over year, and expects Electronic Technologies Group margins to remain strong.

  5. Did HEICO pay dividends and repurchase shares?

    HEICO paid semi-annual cash dividends of $.025 per share in each of the first and third quarters of fiscal 2004, and its Board intends to continue regular semi-annual dividends. The company did not repurchase any shares during fiscal 2004.

04—Continue

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