Heico Corporation Reports Record Fiscal 2000 Year End Results
14 December 2000
Heico Corporation Reports Record Fiscal 2000 Year End Results
HOLLYWOOD, Fla. & MIAMI--Dec. 14, 2000--HEICO CORPORATION , today announced fiscal 2000 net income from continuing operations increased by 70% to $27,739,000, or $1.39 per diluted share, from $16,337,000, or 84 cents per diluted share, in fiscal 1999. The increase represents a 65% increase on a per diluted share basis. Net sales for fiscal 2000 increased 44% to $202,909,000 from $141,269,000 in fiscal 1999.
For the fourth quarter of fiscal 2000, net income from continuing operations increased by 203% to $14,214,000, or 71 cents per diluted share, from $4,693,000 or 23 cents per diluted share, in the fourth quarter of fiscal 1999. The increase represents a 209% increase on a per diluted share basis. Net sales for the fourth quarter of fiscal 2000 were up 6% to $47,509,000 from $44,734,000 in the fourth quarter of fiscal 1999. Reflecting the previously reported sale of Trilectron Industries, Inc. during September 2000, consolidated sales, excluding Trilectron, increased 20% in the fourth quarter of fiscal 2000 over the fourth quarter of fiscal 1999.
Net income from continuing operations for the fourth quarter fiscal 2000 includes a $17,296,000 pretax gain on the sale of the product line represented by the former operations of Trilectron and a $1,312,000 pretax write-off of receivables relating to bankruptcies of certain customers. Excluding these non-recurring items, net income from continuing operations was $17,848,000, or 90 cents per diluted share, for the full year and $4,323,000, or 22 cents per diluted share, in the fourth quarter.
Cash earnings per share from continuing operations (net income per diluted share before goodwill amortization) increased to $1.59 ($1.10 before the non-recurring items) in fiscal 2000 versus 96 cents in fiscal 1999 and increased to 76 cents (27 cents before the non-recurring items) in the fourth quarter of fiscal 2000 versus 28 cents in the fourth quarter of fiscal 1999.
All per share information has been adjusted retroactively for the 10% stock dividend paid in July 2000.
Operating income increased to $37,923,000 ($39,235,000 before the receivable write-off) in fiscal 2000 versus $32,815,000 in fiscal 1999 and declined to $7,949,000 ($9,261,000 before the receivable write-off) in the fourth quarter of fiscal 2000 versus $9,832,000 in the fourth quarter of fiscal 1999. Excluding the receivable write-off, the decrease in operating income in the fourth quarter of fiscal 2000 was principally due to the previously reported softness in certain segments of the aviation aftermarket industry, lower research and development reimbursements and the September 2000 sale of Trilectron.
Flight Support sales increased 26% to $119,304,000 in fiscal 2000 from $94,617,000 in fiscal 1999 and increased 14% to $32,184,000 in the fourth quarter of fiscal 2000 versus $28,170,000 in the fourth quarter of fiscal 1999. The increased sales reflect the addition of newly-acquired businesses and increases in sales of new products and services, including newly-developed and acquired FAA-approved jet engine replacement parts, partially offset by the softness within the aviation aftermarket in the second half of fiscal 2000.
Electronic Technologies (formerly Electronics & Ground Support Group) sales increased 79% to $83,605,000 in fiscal 2000 from $46,652,000 in fiscal 1999. This increase reflects new products and increased market penetration as well as the addition of sales from newly-acquired businesses. As a result of the sale of Trilectron during the fourth quarter of fiscal 2000, sales decreased by 7% to $15,325,000 versus $16,564,000 in the fourth quarter of fiscal 1999.
During the fourth quarter of fiscal 2000, the Company reached a settlement of its previously reported tax dispute relating to the 1996 sale of the Company's health care operations. The settlement, pursuant to which the IRS conceded one-third of the proposed tax adjustment, resulted in additional taxes and related interest aggregating $1.4 million, or 7 cents per diluted share. This charge is reflected as a net loss from the discontinued health care operations in fiscal 2000. After deducting the net loss from discontinued operations, net income for fiscal 2000 was $26,317,000, or $1.32 per diluted share, and net income for the fourth quarter of fiscal 2000 was $12,792,000, or 64 cents per diluted share.
Commenting on operating results, Laurans A. Mendelson, HEICO's Chairman, President and Chief Executive Officer remarked that, "Our fiscal 2000 results represent all time highs for sales, operating income and net income from continuing operations, both before and after non-recurring gains. The sales and earnings growth reflects our continued focus on adding new products, accelerating our market penetration, selective acquisitions of quality niche businesses and the successful integration and growth of these acquired businesses, while experiencing some weakness in certain segments of the aviation aftermarket."
Mr. Mendelson also noted, "As we look forward to fiscal 2001, we believe our continued new product efforts, anticipated strengthening in the aviation aftermarket in the second half of fiscal 2001 and redeployment of the $50 million proceeds from the sale of Trilectron should result in significant earnings growth. Accordingly, our goal for sales and EPS growth for fiscal 2001 is 15% to 20% over our fiscal 2000 results from continuing operations, as adjusted for the non-recurring items. Continuation of current demand levels within the aviation aftermarket together with the sale of Trilectron could, however, result in our earnings for the first half of fiscal 2001 being flat when compared with the same period of fiscal 2000."
As previously announced, HEICO will hold a conference call on Thursday, December 14, 2000 at 11:00 a.m. Eastern time to discuss its fourth quarter results. Individuals wishing to participate in the conference call should dial 973-633-1010 and request the "HEICO Conference Call." A digital replay will be available for 24 hours following the call by dialing: 402-220-1167 for Domestic (U.S.) and International.
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, including the United States Air Force and Navy in addition to communications and electronics manufacturers. HEICO has developed and successfully employs programs which emphasize principles to enhance its manufacturing operations and has followed highly focused marketing and product development programs to greatly expand product offerings and marketing reach following acquisitions. For more information concerning HEICO, please see our World Wide Web site at: http://www.heico.com/
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, lower commercial air travel, product specification costs and requirements, governmental and regulatory demands, competition on military programs, product pricing levels, HEICO's ability to make acquisitions and achieve operating synergies from such acquisitions, 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.
HEICO CORPORATION
Consolidated Condensed Statements of Operations
For the Twelve Months Ended
%
Increase
10/31/00 10/31/99 (Decrease)
Net sales $202,909,000 $141,269,000 44%
Cost of sales 127,098,000 83,737,000 52%
Selling, general, and
administrative expenses 36,576,000 24,717,000 48%
Write-off of receivables 1,312,000 - N/A
Operating income 37,923,000 32,815,000 16%
Interest expense (5,611,000) (2,173,000) 158%
Interest and other income 929,000 894,000 4%
Gain on sale of
product line 17,296,000 - N/A
Income from continuing
operations before income
taxes and minority
interest 50,537,000 31,536,000 60%
Income tax expense 19,509,000 11,606,000 68%
Income from continuing
operations before
minority interest 31,028,000 19,930,000 56%
Minority interest 3,289,000 3,593,000 (8%)
Net income from
continuing operations 27,739,000 16,337,000 70%
Net loss from discontinued
health care operations (1,422,000) - N/A
Net income $26,317,000 $16,337,000 61%
Basic per share data:(1)
Net income from continuing
operations $1.59 $1.00 59%
Net loss from discontinued
health care operations ($0.08) - N/A
Net income $1.51 $1.00 51%
Diluted per share data:(1)
Net income from continuing
operations $1.39 $0.84 65%
Net loss from discontinued
operations ($0.07) - N/A
Net income $1.32 $0.84 57%
Weighted average number of
common shares outstanding:(1)
Basic 17,376,657 16,302,791
Diluted 19,916,794 19,407,399
Operating segments
information: -
Net sales:
Flight Support Group $119,304,000 $94,617,000 26%
Electronic Technologies
Group 83,605,000 46,652,000 79%
$202,909,000 $141,269,000 44%
Operating income (before
goodwill amortization):
Flight Support Group $34,054,000 $34,337,000 (1%)
Electronic Technologies
Group 14,144,000 6,603,000 114%
Other, primarily
corporate (4,162,000) (4,460,000) (7%)
$44,036,000 $36,480,000 21%
Operating income (after
goodwill amortization):
Flight Support Group $29,621,000 $31,338,000 (5%)
Electronic Technologies
Group 12,464,000 5,937,000 110%
Other, primarily
corporate (4,162,000) (4,460,000) (7%)
$37,923,000 $32,815,000 16%
HEICO CORPORATION
Consolidated Condensed Statements of Operations
For the Three Months Ended
%
Increase
10/31/00 10/31/99 (Decrease)
(Unaudited)
Net sales $47,509,000 $44,734,000 6%
Cost of sales 28,914,000 26,793,000 8%
Selling, general, and
administrative expenses 9,334,000 8,109,000 15%
Write-off of receivables 1,312,000 - N/A
Operating income 7,949,000 9,832,000 (19%)
Interest expense (1,339,000) (1,101,000) 22%
Interest and other income 320,000 167,000 92%
Gain on sale of
product line 17,296,000 - N/A
Income from continuing
operations before income
taxes and minority interest 24,226,000 8,898,000 172%
Income tax expense 9,379,000 3,343,000 181%
Income from continuing
operations before minority
interest 14,847,000 5,555,000 167%
Minority interest 633,000 862,000 (27%)
Net income from continuing
operations 14,214,000 4,693,000 203%
Net loss from discontinued
health care operations (1,422,000) - N/A
Net income $12,792,000 $4,693,000 173%
Basic per share data:(1)
Net income from
continuing operations $0.81 $0.27 200%
Net loss from discontinued
health care operations ($0.08) - N/A
Net income $0.73 $0.27 170%
Diluted per share data:(1)
Net income from continuing
operations $0.71 $0.23 209%
Net loss from discontinued
health care operations ($0.07) - N/A
Net income $0.64 $0.23 178%
Weighted average number
of common shares
outstanding:(1)
Basic 17,451,805 17,329,747
Diluted 19,954,017 20,213,713
Operating segments
information: -
Net sales:
Flight Support Group $32,184,000 $28,170,000 14%
Electronic Technologies
Group 15,325,000 16,564,000 (7%)
$47,509,000 $44,734,000 6%
Operating income (before
goodwill amortization):
Flight Support Group $7,411,000 $9,110,000 (19%)
Electronic Technologies
Group 3,293,000 3,054,000 8%
Other, primarily corporate (1,136,000) (983,000) 16%
$9,568,000 $11,181,000 (14%)
Operating income (after
goodwill amortization):
Flight Support Group $6,195,000 $8,104,000 (24%)
Electronic Technologies
Group 2,890,000 2,711,000 7%
Other, primarily corporate (1,136,000) (983,000) 16%
$7,949,000 $9,832,000 (19%)
HEICO CORPORATION
Consolidated Condensed Balance Sheets
10/31/00 10/31/99
Cash and cash
equivalents $4,807,000 $6,031,000
Receivable from sale
of product line 12,412,000 -
Receivables, net 29,553,000 35,326,000
Inventories 34,362,000 45,172,000
Prepaid expenses and
other current assets 5,518,000 4,061,000
Total current assets 86,652,000 90,590,000
Property, plant and
equipment, net 26,903,000 28,336,000
Intangible assets, net 152,770,000 143,557,000
Other assets 15,407,000 10,680,000
Total assets $281,732,000 $273,163,000
Current liabilities $31,183,000 $27,312,000
Long-term debt, net
of current maturities 40,015,000 72,950,000
Other non-current
liabilities 7,339,000 3,590,000
Total liabilities 78,537,000 103,852,000
Minority interest in
consolidated subsidiary 33,351,000 30,022,000
Shareholders' equity 169,844,000 139,289,000
Total liabilities and
shareholders' equity $281,732,000 $273,163,000
Consolidated Condensed Cash Flows
For the Twelve Months Ended
10/31/00 10/31/99(2)
Cash flows from
operating activities:
Net income $26,317,000 $16,337,000
Gain on sale of
product line (17,296,000) -
Depreciation and
amortization 9,775,000 6,289,000
(Increase) in accounts
receivable (11,569,000) (5,442,000)
(Increase) in inventory (7,471,000) (12,209,000)
Other 12,376,000 4,637,000
Net cash provided by
operating activities 12,132,000 9,612,000
Cash flows from
investing activities:
Proceeds from sale of
product line, net
of expenses 48,377,000 -
Acquisitions and related
costs, net of
cash acquired (24,799,000) (104,861,000)
Capital expenditures (8,665,000) (14,217,000)
Other (168,000) (2,392,000)
Net cash provided by
(used in) investing
activities 14,745,000 (121,470,000)
Cash flows from
financing activities:
Proceeds from offering of
Class A Common Stock - 56,265,000
(Decrease) increase in
short-term and long-term
debt, net (28,214,000) 43,662,000
Additional minority
interest investment - 11,537,000
Other 113,000 (2,184,000)
Net cash flows (used in)
provided by financing
activities (28,101,000) 109,280,000
Net decrease in cash
and cash equivalents (1,224,000) (2,578,000)
Cash and cash equivalents
at beginning of year 6,031,000 8,609,000
Cash and cash equivalents
at end of period $4,807,000 $6,031,000
(1)Information has been adjusted retroactively for the 10% stock
dividend paid in July 2000.
(2)Fiscal 1999 amounts have been reclassified to conform to the
current year presentation.