01—Abstract
Summary
Summary of the 10-K filed December 19, 2024. Cited figures are marked; the original filing is the authoritative source.
HEICO Corporation (NYSE: HEI.A, HEI) reported record fiscal 2024 results for the year ended October 31, 2024.
Net sales rose 30% to a record $3,857.7 milliona from $2,968.1 million in fiscal 2023, driven by the Flight Support Group (FSG), where net sales increased $869.2 million (49%) to $2,639.4 million, including $643.5 million contributed by fiscal 2023 and 2024 acquisitions and organic growth of 13%. The Electronic Technologies Group (ETG) net sales rose 3% to $1,263.6 million, with a 2% organic decline. Operating income increased 32% to a record $824.5 million, and net income attributable to HEICO increased 27% to a record $514.1 million, or $3.67 per diluted share.
Interest expense more than doubled to $149.3 millionb from $73.0 million, principally due to higher debt related to fiscal 2023 acquisitions, including Wencor. Cash flow from operations was $672.4 million, up from $448.7 million, principally reflecting higher net income and advance deposits received on certain long-term customer contracts. Capital expenditures were $58.3 million and acquisitions used $219.3 million of investing cash.
Total debt declined to $2,229.4 millionc from $2,478.1 million as of October 31, 2023, reducing total debt to total capitalization to 38% from 44%. Management expects net sales growth in both segments in fiscal 2025, driven primarily by organic growth, and anticipates fiscal 2025 capital expenditures of approximately $65 to $70 million. As of December 18, 2024, approximately $995 million of unused committed availability remained under the revolving credit facility.
Backlog, described as remaining performance obligations on firm contracts, stood at $1,924.5 milliond as of October 31, 2024, of which $1,178.1 million is expected to be recognized in fiscal 2025. Goodwill and intangible assets represented 62% of total assets as of October 31, 2024, compared with 64% a year earlier.
The company recognized a $7.5 million trade name impairment in fiscal 2024 at two ETG subsidiaries. The independent auditor, Deloitte & Touche LLP, issued unqualified opinions on both the financial statements and internal control over financial reporting.
02—Key points
Key Highlights
- Record net sales of $3,857.7 million, up 30% from $2,968.1 million in fiscal 2023.
- Flight Support Group net sales rose to $2,639.4 million (up 49%), including $643.5 million from fiscal 2023 and 2024 acquisitions and 13% organic growth.
- Operating income reached a record $824.5 million, up 32%, with operating margin of 21.4% versus 21.1% a year earlier.
- Net income attributable to HEICO grew 27% to a record $514.1 million, or $3.67 per diluted share.
- Interest expense increased to $149.3 million from $73.0 million, principally due to debt related to fiscal 2023 acquisitions.
- Operating cash flow rose to $672.4 million from $448.7 million; total debt fell to $2,229.4 million and debt-to-capitalization declined to 38% from 44%.
- Backlog (remaining performance obligations) totaled $1,924.5 million, with $1,178.1 million expected to be recognized in fiscal 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Heico kept $0.13.
- Revenue$3.86B100.0%
- Cost of revenue−$2.36B61.1%
- Gross profit$1.50B38.9%
- Operating costs−$677.3M17.6%
- Operating income$824.5M21.4%
- Interest, other & tax−$310.3M8.0%
- Net income$514.1M13.3%
04—Financials
Financial Highlights
Figures from 10-KFY2024filed December 19, 2024Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $3.86B$2.97B | +30.0% |
| Cost of Revenue | $2.36B$1.81B | +29.8% |
| Gross Profit | $1.50B$1.15B | +30.2% |
| R&D Expenses | $111.27M$95.77M | +16.2% |
| SG&A Expenses | $677.27M$528.15M | +28.2% |
| Operating Expenses | $3.03B$2.34B | +29.5% |
| Operating Income | $824.46M$625.34M | +31.8% |
| Interest Expense | $149.31M$72.98M | +104.6% |
| Net Income | $514.11M$403.60M | +27.4% |
| EPS (Basic) | $3.71$2.94 | +26.2% |
| EPS (Diluted) | $3.67$2.91 | +26.1% |
| Shares Outstanding (Basic) | 138.46M137.19M | +0.9% |
| Shares Outstanding (Diluted) | 140.20M138.91M | +0.9% |
05—Questions
Frequently Asked Questions
How did HEICO's sales and profitability change in fiscal 2024?
Net sales increased 30% to a record $3,857.7 million, operating income rose 32% to a record $824.5 million, and net income attributable to HEICO increased 27% to a record $514.1 million, or $3.67 per diluted share. The Flight Support Group drove most of the growth, while the Electronic Technologies Group's net sales rose 3% with a 2% organic decline.
How is HEICO's debt position?
Total debt was $2,229.4 million as of October 31, 2024, down from $2,478.1 million a year earlier, and total debt to total capitalization fell to 38% from 44%. As of December 18, 2024, about $995 million of unused committed availability remained under the revolving credit facility, which matures in July 2028. Interest expense rose to $149.3 million, mainly due to debt used for fiscal 2023 acquisitions.
What are the main risks highlighted for investors?
The filing cites risks including execution of the acquisition strategy, intense competition, dependence on the aviation industry and its cycles, reductions in defense, space or homeland security spending, cybersecurity events, reliance on key personnel, and foreign sales exposure, with about 37% of consolidated net sales derived from foreign customers in fiscal 2024. Goodwill and intangible assets represented 62% of total assets as of October 31, 2024.
What does HEICO expect for fiscal 2025?
Management anticipates net sales growth in both the Flight Support Group and the Electronic Technologies Group, driven primarily by organic growth and recently completed acquisitions. Capital expenditures in fiscal 2025 are anticipated to be approximately $65 to $70 million. The company also disclosed a semi-annual cash dividend of $.11 per share declared in December 2024, payable in January 2025.
What is the outlook for the company's order backlog?
Backlog, which the company believes equals its remaining performance obligations on firm contracts, was $1,924.5 million as of October 31, 2024. The company expects to recognize $1,178.1 million of this amount during fiscal 2025 and $746.4 million thereafter.
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