01—Abstract
Summary
Summary of the 10-K filed December 19, 2013. Cited figures are marked; the original filing is the authoritative source.
HEICO Corporation reported record fiscal 2013 results for the year ended October 31, 2013.
Net sales rose 12% to a record $1,008.8 milliona from $897.3 million, and net income attributable to HEICO increased to a record $102.4 million, or $1.53 per diluted share, from $85.1 million, or $1.28 per diluted share. Operating income grew 12% to a record $183.6 million. The Flight Support Group, which accounted for 66% of fiscal 2013 net sales, reported net sales of $665.1 million and operating income of $122.1 million, while the Electronic Technologies Group reported net sales of $350.0 million and operating income of $83.1 million.
Growth was supported by acquisitions. The company acquired Reinhold Industries for approximately $133.0 millionb net of cash acquired and Lucix Corporation in October 2013, and aggregate cash paid for acquisitions was $222.6 million in fiscal 2013. As a result, total debt rose to $377.5 million at October 31, 2013 from $131.8 million a year earlier, and total debt to total capitalization increased to 34% from 15%.
Net cash provided by operating activities was $131.8 millionc. The company's revolving credit facility was amended in November 2013 to $800 million, with an accordion feature to $1.0 billion, and about $431 million was unused as of December 17, 2013. The Board declared a regular semi-annual cash dividend of $.06 per share and a special and extraordinary cash dividend of $.35 per share, totaling $.41 per share payable January 17, 2014.
The company's backlog was $305 milliond at October 31, 2013, up from $252 million. Management targets growth in fiscal 2014 full-year net sales and net income over fiscal 2013 levels.
02—Key points
Key Highlights
- Record fiscal 2013 net sales of $1,008.8 million, up 12% from $897.3 million in fiscal 2012.
- Record net income attributable to HEICO of $102.4 million, or $1.53 per diluted share, versus $1.28 in fiscal 2012.
- Record operating income of $183.6 million, with the Flight Support Group contributing $122.1 million and the Electronic Technologies Group $83.1 million.
- Acquisitions totaling $222.6 million in cash in fiscal 2013, including Reinhold Industries and Lucix Corporation, raised total debt to $377.5 million from $131.8 million.
- Backlog of unshipped orders rose to $305 million at October 31, 2013 from $252 million a year earlier.
- Board declared a $.35 special and extraordinary dividend plus a $.06 regular semi-annual dividend, payable January 17, 2014.
- Revolving credit facility was increased to $800 million in November 2013, with a feature to expand it to $1.0 billion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Heico kept $0.10.
- Revenue$1.01B100.0%
- Cost of revenue−$637.6M63.2%
- Gross profit$371.2M36.8%
- Operating costs−$187.6M18.6%
- Operating income$183.6M18.2%
- Interest, other & tax−$81.2M8.0%
- Net income$102.4M10.2%
04—Financials
Financial Highlights
Figures from 10-KFY2013filed December 19, 2013Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $1.01B$897.35M | +12.4% |
| Cost of Revenue | $637.58M$569.91M | +11.9% |
| Gross Profit | $371.18M$327.44M | +13.4% |
| R&D Expenses | $32.90M$30.39M | +8.2% |
| SG&A Expenses | $187.59M$164.14M | +14.3% |
| Operating Expenses | $825.17M$734.05M | +12.4% |
| Operating Income | $183.59M$163.29M | +12.4% |
| Interest Expense | $3.72M$2.43M | +52.8% |
| Net Income | $102.40M$85.15M | +20.3% |
| EPS (Basic) | $1.54$1.29 | +19.4% |
| EPS (Diluted) | $1.53$1.28 | +19.5% |
| Shares Outstanding (Basic) | 66.30M65.86M | +0.7% |
| Shares Outstanding (Diluted) | 66.98M66.62M | +0.5% |
05—Questions
Frequently Asked Questions
How did HEICO perform financially in fiscal 2013?
HEICO reported record net sales of $1,008.8 million, operating income of $183.6 million, and net income attributable to HEICO of $102.4 million, or $1.53 per diluted share. Each of these figures set a company record and increased from fiscal 2012.
How much debt does HEICO carry and how did it change?
Total debt, including current portion, was $377.5 million as of October 31, 2013, compared with $131.8 million a year earlier. Total debt to total capitalization was 34%, up from 15%. Most borrowings were under the revolving credit facility, with $373.0 million outstanding at year end.
What dividends did HEICO declare?
On December 17, 2013, the Board declared a regular semi-annual cash dividend of $.06 per share and a special and extraordinary cash dividend of $.35 per share, paid together as $.41 per share on January 17, 2014 to shareholders of record as of January 3, 2014.
What is HEICO's outlook for fiscal 2014?
Management anticipates continued organic growth in product lines serving commercial aviation and expects overall organic growth in the Electronic Technologies Group, moderated by lower demand for certain defense products. The company is targeting growth in fiscal 2014 full-year net sales and net income over fiscal 2013 levels, and expects capital expenditures of approximately $25 million.
What are the main risks to HEICO's business according to the filing?
The filing cites dependence on the aviation industry and its cyclical downturns, government regulation by the FAA, reductions in defense, space or homeland security spending, risks from foreign sales, intense competition, and the execution of its acquisition strategy. It also notes that executive officers and directors beneficially owned approximately 21% of Common Stock as of December 17, 2013.
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