01—Abstract
Summary
Summary of the 8-K filed February 25, 2026. Cited figures are marked; the original filing is the authoritative source.
HEICO Corporation reported record first-quarter fiscal 2026 results for the three months ended January 31, 2026, in a press release furnished as Exhibit 99.1.
Net income attributable to HEICO rose 13% to a record $190.2 milliona, or $1.35 per diluted share, from $168.0 million, or $1.20 per diluted share, a year earlier. Net sales increased 14% to $1,178.6 million and operating income increased 15% to $259.9 million, with the consolidated operating margin improving to 22.1% from 22.0%. Both periods were favorably affected by discrete tax benefits from stock option exercises, which were $21.8 million, or 15 cents per diluted share, in fiscal 2026 and $26.5 million, or 19 cents per diluted share, in fiscal 2025.
Cash flow from operating activities was $178.6 millionb, down from $203.0 million, which management attributed to a significant distribution under the HEICO Leadership Compensation Plan and higher performance-based compensation payments. Leverage increased after an acquisition completed during the quarter: the total debt to net income attributable to HEICO ratio was 3.52x versus 3.14x at October 31, 2025, and the net debt to EBITDA ratio was 1.79x versus 1.60x. Long-term debt rose to $2,504.3 million from $2,164.6 million, and acquisitions, net of cash acquired, totaled $441.4 million in the quarter.
Management said it expects continued sales momentum in both segments and strong cash flow from operations for fiscal 2026. By segment, the Flight Support Group grew net sales 15% to $820.0 millionc, with organic growth of 12%, and operating income rose 21% to $200.7 million. The Electronic Technologies Group grew net sales 12% to $370.7 million, with organic growth of 6%, but its operating income declined to $73.2 million from $76.5 million, and its operating margin fell to 19.8% from 23.1%, reflecting lower gross profit margin from product mix and lower space product sales.
02—Key points
Key Highlights
- Record net income attributable to HEICO of $190.2 million, or $1.35 per diluted share, up 13% from $168.0 million, or $1.20 per diluted share.
- Net sales rose 14% to $1,178.6 million; operating income rose 15% to $259.9 million; consolidated operating margin was 22.1% versus 22.0%.
- Flight Support Group net sales increased 15% to $820.0 million with 12% organic growth; operating income rose 21% to $200.7 million and operating margin improved to 24.5%.
- Electronic Technologies Group net sales increased 12% to $370.7 million with 6% organic growth, but operating income fell to $73.2 million and operating margin declined to 19.8% from 23.1%.
- Operating cash flow was $178.6 million, down from $203.0 million, due to a significant distribution under the HEICO Leadership Compensation Plan and higher performance-based compensation payments.
- Leverage increased after an acquisition: total debt to net income ratio was 3.52x (3.14x at October 31, 2025) and net debt to EBITDA was 1.79x (1.60x).
- Net tax benefits from stock option exercises were $21.8 million ($0.15 per diluted share) in fiscal 2026, compared with $26.5 million ($0.19 per diluted share) in fiscal 2025.
03—Questions
Frequently Asked Questions
Why did operating cash flow decline this quarter?
Operating cash flow fell to $178.6 million from $203.0 million. The company attributes the decrease to a significant distribution to a certain participant under the HEICO Leadership Compensation Plan and higher performance-based compensation payments driven by strong fiscal 2025 operating performance. Management still expects strong cash flow from operations for fiscal 2026.
Why did leverage ratios increase?
The filing states that the increase in leverage in the first quarter of fiscal 2026 is a direct result of the successful completion of an acquisition during the quarter. Total debt rose to $2,507.7 million from $2,167.9 million, and net debt to EBITDA rose to 1.79x from 1.60x.
What drove the growth in the Flight Support Group?
Net sales increased 15% to $820.0 million, including organic growth of 12% attributable to increased demand across all of the group's product lines, plus contributions from fiscal 2025 acquisitions. Operating income increased 21% to $200.7 million, driven by higher net sales, SG&A efficiencies, and an improved gross profit margin tied to a more favorable product mix in repair and overhaul parts and services.
Why did Electronic Technologies Group operating income decline?
Operating income fell to $73.2 million from $76.5 million despite a 12% rise in net sales. The decrease principally reflected lower gross profit margin, caused by a less favorable product mix of defense products and lower space product sales, partially offset by higher aerospace product sales. Space products were the only area cited with declining demand, while other electronics, aerospace and defense products grew.
What does the company expect for the rest of fiscal 2026?
Management expects continued sales momentum across both the Flight Support Group and the Electronic Technologies Group, supported by organic demand and recent acquisitions. It also said it remains focused on selective acquisition opportunities and on preserving financial strength and flexibility, and it continues to forecast strong cash flow from operations for fiscal 2026.
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