QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
For the quarterly period ended January 31, 2020 | ||
OR | ||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||
For the transition period from ______ to _______ | ||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
3000 Taft Street, Hollywood, Florida | ||
(Address of principal executive offices) | (Zip Code) | |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock, $.01 par value | shares | ||
Class A Common Stock, $.01 par value | shares | ||
Page | |||
Part I. | Financial Information | ||
Item 1. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
Part II. | Other Information | ||
Item 6. | |||
January 31, 2020 | October 31, 2019 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Accounts receivable, net | ||||||||
Contract assets | ||||||||
Inventories, net | ||||||||
Prepaid expenses and other current assets | ||||||||
Total current assets | ||||||||
Property, plant and equipment, net | ||||||||
Goodwill | ||||||||
Intangible assets, net | ||||||||
Other assets | ||||||||
Total assets | $ | $ | ||||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Current maturities of long-term debt | $ | $ | ||||||
Trade accounts payable | ||||||||
Accrued expenses and other current liabilities | ||||||||
Income taxes payable | ||||||||
Total current liabilities | ||||||||
Long-term debt, net of current maturities | ||||||||
Deferred income taxes | ||||||||
Other long-term liabilities | ||||||||
Total liabilities | ||||||||
Commitments and contingencies (Note 12) | ||||||||
Redeemable noncontrolling interests (Note 3) | ||||||||
Shareholders’ equity: | ||||||||
Preferred Stock, $.01 par value per share; 10,000 shares authorized; none issued | ||||||||
Common Stock, $.01 par value per share; 150,000 shares authorized; 54,149 and 54,143 shares issued and outstanding | ||||||||
Class A Common Stock, $.01 par value per share; 150,000 shares authorized; 80,484 and 80,353 shares issued and outstanding | ||||||||
Capital in excess of par value | ||||||||
Deferred compensation obligation | ||||||||
HEICO stock held by irrevocable trust | ( | ) | ( | ) | ||||
Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
Retained earnings | ||||||||
Total HEICO shareholders’ equity | ||||||||
Noncontrolling interests | ||||||||
Total shareholders’ equity | ||||||||
Total liabilities and equity | $ | $ | ||||||
Three months ended January 31, | ||||||||
2020 | 2019 | |||||||
Net sales | $ | $ | ||||||
Operating costs and expenses: | ||||||||
Cost of sales | ||||||||
Selling, general and administrative expenses | ||||||||
Total operating costs and expenses | ||||||||
Operating income | ||||||||
Interest expense | ( | ) | ( | ) | ||||
Other income (expense) | ( | ) | ||||||
Income before income taxes and noncontrolling interests | ||||||||
Income tax (benefit) expense | ( | ) | ||||||
Net income from consolidated operations | ||||||||
Less: Net income attributable to noncontrolling interests | ||||||||
Net income attributable to HEICO | $ | $ | ||||||
Net income per share attributable to HEICO shareholders: | ||||||||
Basic | $ | $ | ||||||
Diluted | $ | $ | ||||||
Weighted average number of common shares outstanding: | ||||||||
Basic | ||||||||
Diluted | ||||||||
Three months ended January 31, | ||||||||
2020 | 2019 | |||||||
Net income from consolidated operations | $ | $ | ||||||
Other comprehensive income: | ||||||||
Foreign currency translation adjustments | ( | ) | ||||||
Amortization of unrealized loss on defined benefit pension plan, net of tax | ||||||||
Total other comprehensive (loss) income | ( | ) | ||||||
Comprehensive income from consolidated operations | ||||||||
Net income attributable to noncontrolling interests | ||||||||
Foreign currency translation adjustments attributable to noncontrolling interests | ( | ) | ||||||
Comprehensive income attributable to noncontrolling interests | ||||||||
Comprehensive income attributable to HEICO | $ | $ | ||||||
HEICO Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||
Redeemable Noncontrolling Interests | Common Stock | Class A Common Stock | Capital in Excess of Par Value | Deferred Compensation Obligation | HEICO Stock Held by Irrevocable Trust | Accumulated Other Comprehensive Loss | Retained Earnings | Noncontrolling Interests | Total Shareholders' Equity | ||||||||||||||||||||||||||||||
Balances as of October 31, 2019 | $ | $ | $ | $ | $ | ($ | ) | ($ | ) | $ | $ | $ | |||||||||||||||||||||||||||
Comprehensive income | — | — | — | — | — | ( | ) | ||||||||||||||||||||||||||||||||
Cash dividends ($.08 per share) | — | — | — | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||||||||||||
Issuance of common stock to HEICO Savings and Investment Plan | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Proceeds from stock option exercises | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Redemptions of common stock related to stock option exercises | — | — | — | ( | ) | — | — | — | — | — | ( | ) | |||||||||||||||||||||||||||
Noncontrolling interests assumed related to acquisitions | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | ( | ) | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
Adjustments to redemption amount of redeemable noncontrolling interests | ( | ) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Balances as of January 31, 2020 | $ | $ | $ | $ | $ | ($ | ) | ($ | ) | $ | $ | $ | |||||||||||||||||||||||||||
HEICO Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||
Redeemable Noncontrolling Interests | Common Stock | Class A Common Stock | Capital in Excess of Par Value | Deferred Compensation Obligation | HEICO Stock Held by Irrevocable Trust | Accumulated Other Comprehensive Loss | Retained Earnings | Noncontrolling Interests | Total Shareholders' Equity | ||||||||||||||||||||||||||||||
Balances as of October 31, 2018 | $ | $ | $ | $ | $ | ($ | ) | ($ | ) | $ | $ | $ | |||||||||||||||||||||||||||
Cumulative effect from adoption of ASC 606 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Cash dividends ($.07 per share) | — | — | — | — | — | — | — | ( | ) | — | ( | ) | |||||||||||||||||||||||||||
Issuance of common stock to HEICO Savings and Investment Plan | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Proceeds from stock option exercises | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Redemptions of common stock related to stock option exercises | — | — | — | ( | ) | — | — | — | — | — | ( | ) | |||||||||||||||||||||||||||
Noncontrolling interests assumed related to acquisitions | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | ( | ) | — | — | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
Adjustments to redemption amount of redeemable noncontrolling interests | ( | ) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Deferred compensation obligation | — | — | — | — | ( | ) | — | — | — | — | |||||||||||||||||||||||||||||
Balances as of January 31, 2019 | $ | $ | $ | $ | $ | ($ | ) | ($ | ) | $ | $ | $ | |||||||||||||||||||||||||||
Three months ended January 31, | |||||||
2020 | 2019 | ||||||
Operating Activities: | |||||||
Net income from consolidated operations | $ | $ | |||||
Adjustments to reconcile net income from consolidated operations to net cash provided by operating activities: | |||||||
Depreciation and amortization | |||||||
Share-based compensation expense | |||||||
Employer contributions to HEICO Savings and Investment Plan | |||||||
Increase in accrued contingent consideration | |||||||
Deferred income tax (benefit) provision | ( | ) | |||||
Payment of contingent consideration | ( | ) | ( | ) | |||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Decrease in accounts receivable | |||||||
(Increase) decrease in contract assets | ( | ) | |||||
Increase in inventories | ( | ) | ( | ) | |||
Increase in prepaid expenses and other current assets | ( | ) | ( | ) | |||
Decrease in trade accounts payable | ( | ) | ( | ) | |||
Decrease in accrued expenses and other current liabilities | ( | ) | ( | ) | |||
Decrease in income taxes payable | ( | ) | ( | ) | |||
Net changes in other long-term liabilities and assets related to HEICO Leadership Compensation Plan | |||||||
Other | |||||||
Net cash provided by operating activities | |||||||
Investing Activities: | |||||||
Acquisitions, net of cash acquired | ( | ) | ( | ) | |||
Investments related to HEICO Leadership Compensation Plan | ( | ) | ( | ) | |||
Capital expenditures | ( | ) | ( | ) | |||
Other | |||||||
Net cash used in investing activities | ( | ) | ( | ) | |||
Financing Activities: | |||||||
Borrowings on revolving credit facility | |||||||
Payments on revolving credit facility | ( | ) | ( | ) | |||
Cash dividends paid | ( | ) | ( | ) | |||
Distributions to noncontrolling interests | ( | ) | ( | ) | |||
Redemptions of common stock related to stock option exercises | ( | ) | ( | ) | |||
Payment of contingent consideration | ( | ) | ( | ) | |||
Proceeds from stock option exercises | |||||||
Other | ( | ) | |||||
Net cash (used in) provided by financing activities | ( | ) | |||||
Effect of exchange rate changes on cash | ( | ) | |||||
Net increase (decrease) in cash and cash equivalents | ( | ) | |||||
Cash and cash equivalents at beginning of year | |||||||
Cash and cash equivalents at end of period | $ | $ | |||||
(in thousands) | January 31, 2020 | October 31, 2019 | ||||||
Accounts receivable | $ | $ | ||||||
Less: Allowance for doubtful accounts | ( | ) | ( | ) | ||||
Accounts receivable, net | $ | $ | ||||||
(in thousands) | January 31, 2020 | October 31, 2019 | ||||||
Finished products | $ | $ | ||||||
Work in process | ||||||||
Materials, parts, assemblies and supplies | ||||||||
Inventories, net of valuation reserves | $ | $ | ||||||
(in thousands) | January 31, 2020 | October 31, 2019 | ||||||
Land | $ | $ | ||||||
Buildings and improvements | ||||||||
Machinery, equipment and tooling | ||||||||
Construction in progress | ||||||||
Less: Accumulated depreciation and amortization | ( | ) | ( | ) | ||||
Property, plant and equipment, net | $ | $ | ||||||
Three months ended January 31, | ||||||||
2020 | 2019 | |||||||
R&D expenses | $ | $ | ||||||
January 31, 2020 | October 31, 2019 | |||||||
Redeemable at fair value | $ | $ | ||||||
Redeemable based on a multiple of future earnings | ||||||||
Redeemable noncontrolling interests | $ | $ | ||||||
Foreign Currency Translation | Defined Benefit Pension Plan | Accumulated Other Comprehensive Loss | ||||||||||
Balances as of October 31, 2019 | ($ | ) | ($ | ) | ($ | ) | ||||||
Unrealized loss | ( | ) | — | ( | ) | |||||||
Amortization of unrealized loss | — | |||||||||||
Balances as of January 31, 2020 | ($ | ) | ($ | ) | ($ | ) | ||||||
Segment | Consolidated Totals | |||||||||||
FSG | ETG | |||||||||||
Balances as of October 31, 2019 | $ | $ | $ | |||||||||
Goodwill acquired | ||||||||||||
Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | ||||||
Adjustments to goodwill | ||||||||||||
Balances as of January 31, 2020 | $ | $ | $ | |||||||||
As of January 31, 2020 | As of October 31, 2019 | |||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||
Amortizing Assets: | ||||||||||||||||||||||||
Customer relationships | $ | ($ | ) | $ | $ | ($ | ) | $ | ||||||||||||||||
Intellectual property | ( | ) | ( | ) | ||||||||||||||||||||
Licenses | ( | ) | ( | ) | ||||||||||||||||||||
Patents | ( | ) | ( | ) | ||||||||||||||||||||
Non-compete agreements | ( | ) | ( | ) | ||||||||||||||||||||
Trade names | ( | ) | ( | ) | ||||||||||||||||||||
( | ) | ( | ) | |||||||||||||||||||||
Non-Amortizing Assets: | ||||||||||||||||||||||||
Trade names | — | — | ||||||||||||||||||||||
$ | ($ | ) | $ | $ | ($ | ) | $ | |||||||||||||||||
January 31, 2020 | October 31, 2019 | |||||||
Borrowings under revolving credit facility | $ | $ | ||||||
Finance leases and note payable | ||||||||
Less: Current maturities of long-term debt | ( | ) | ( | ) | ||||
$ | $ | |||||||
January 31, 2020 | October 31, 2019 | Change | |||||||||
Contract assets | $ | $ | $ | ||||||||
Contract liabilities | |||||||||||
Net contract assets | $ | $ | ($ | ) | |||||||
Three months ended January 31, | ||||||||
2020 | 2019 | |||||||
Flight Support Group: | ||||||||
Aftermarket replacement parts (1) | $ | $ | ||||||
Repair and overhaul parts and services (2) | ||||||||
Specialty products (3) | ||||||||
Total net sales | ||||||||
Electronic Technologies Group: | ||||||||
Electronic component parts for defense, space and aerospace equipment (4) | ||||||||
Electronic component parts for equipment in various other industries (5) | ||||||||
Total net sales | ||||||||
Intersegment sales | ( | ) | ( | ) | ||||
Total consolidated net sales | $ | $ | ||||||
(1) | Includes various jet engine and aircraft component replacement parts. |
(2) | Includes primarily the sale of parts consumed in various repair and overhaul services on selected jet engine and aircraft components, avionics, instruments, composites and flight surfaces of commercial and military aircraft. |
(3) | Includes primarily the sale of specialty components such as thermal insulation blankets, renewable/reusable insulation systems, advanced niche components, complex composite assemblies, and expanded foil mesh. |
(4) |
(5) | Includes various component parts such as electromagnetic and radio interference shielding, high voltage interconnection devices, high voltage advanced power electronics, harsh environment connectivity products, custom molded cable assemblies and silicone material for a variety of demanding applications. |
Three months ended January 31, | ||||||||
2020 | 2019 | |||||||
Flight Support Group: | ||||||||
Aerospace | $ | $ | ||||||
Defense and Space | ||||||||
Other (1) | ||||||||
Total net sales | ||||||||
Electronic Technologies Group: | ||||||||
Defense and Space | ||||||||
Other (2) | ||||||||
Aerospace | ||||||||
Total net sales | ||||||||
Intersegment sales | ( | ) | ( | ) | ||||
Total consolidated net sales | $ | $ | ||||||
(1) |
(2) |
As of January 31, 2020 | ||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||
Assets: | ||||||||||||||||
Deferred compensation plan: | ||||||||||||||||
Corporate-owned life insurance | $ | $ | $ | $ | ||||||||||||
Money market funds | ||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||
Liabilities: | ||||||||||||||||
Contingent consideration | $ | $ | $ | $ | ||||||||||||
As of October 31, 2019 | ||||||||||||||||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||
Assets: | ||||||||||||||||
Deferred compensation plan: | ||||||||||||||||
Corporate-owned life insurance | $ | $ | $ | $ | ||||||||||||
Money market funds | ||||||||||||||||
Total assets | $ | $ | $ | $ | ||||||||||||
Liabilities: | ||||||||||||||||
Contingent consideration | $ | $ | $ | $ | ||||||||||||
Fiscal 2019 Acquisition | Fiscal 2017 Acquisition | ||||||||
Compound annual revenue growth rate range | ( | %) | - | ( | %) | - | |||
Weighted average discount rate | |||||||||
Liabilities | ||||
Balance as of October 31, 2019 | $ | |||
Increase in accrued contingent consideration | ||||
Payment of contingent consideration | ( | ) | ||
Balance as of January 31, 2020 | $ | |||
January 31, 2020 | |||
Right-of-use assets | $ | ||
Current lease liabilities | $ | ||
Long-term lease liabilities | |||
Total operating lease liabilities | $ | ||
Three months ended | |||
January 31, 2020 | |||
Operating lease expense | $ | ||
Variable lease expense | |||
Total operating lease expense (1) | $ | ||
(1) | Excludes short-term lease expense, which is not material. |
Year ending October 31, | |||
2020 | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
2025 | |||
Thereafter | |||
Total minimum lease payments | |||
Less: amount representing interest | ( | ) | |
Present value of minimum lease payments | $ | ||
January 31, 2020 | ||
Weighted average remaining lease term (years) | ||
Weighted average discount rate | % | |
Three months ended | |||
January 31, 2020 | |||
Cash paid for amounts included in the measurement of lease liabilities | $ | ||
Right-of-use assets obtained in exchange for new lease liabilities | $ | ||
Three months ended January 31, | ||||||||
2020 | 2019 | |||||||
Numerator: | ||||||||
Net income attributable to HEICO | $ | $ | ||||||
Denominator: | ||||||||
Weighted average common shares outstanding - basic | ||||||||
Effect of dilutive stock options | ||||||||
Weighted average common shares outstanding - diluted | ||||||||
Net income per share attributable to HEICO shareholders: | ||||||||
Basic | $ | $ | ||||||
Diluted | $ | $ | ||||||
Anti-dilutive stock options excluded | ||||||||
Other, Primarily Corporate and Intersegment (1) | Consolidated Totals | |||||||||||||||
Segment | ||||||||||||||||
FSG | ETG | |||||||||||||||
Three months ended January 31, 2020: | ||||||||||||||||
Net sales | $ | $ | ($ | ) | $ | |||||||||||
Depreciation | ||||||||||||||||
Amortization | ||||||||||||||||
Operating income | ( | ) | ||||||||||||||
Capital expenditures | ||||||||||||||||
Three months ended January 31, 2019: | ||||||||||||||||
Net sales | $ | $ | ($ | ) | $ | |||||||||||
Depreciation | ||||||||||||||||
Amortization | ||||||||||||||||
Operating income | ( | ) | ||||||||||||||
Capital expenditures | ||||||||||||||||
Other, Primarily Corporate | Consolidated Totals | |||||||||||||||
Segment | ||||||||||||||||
FSG | ETG | |||||||||||||||
Total assets as of January 31, 2020 | $ | $ | $ | $ | ||||||||||||
Total assets as of October 31, 2019 | ||||||||||||||||
Three months ended January 31, | ||||||||
2020 | 2019 | |||||||
Balances as of beginning of fiscal year | $ | $ | ||||||
Accruals for warranties | ||||||||
Acquired warranty liabilities | — | |||||||
Warranty claims settled | ( | ) | ( | ) | ||||
Balances as of January 31 | $ | $ | ||||||
Item 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Three months ended January 31, | ||||||||
2020 | 2019 | |||||||
Net sales | $506,275 | $466,146 | ||||||
Cost of sales | 308,228 | 283,909 | ||||||
Selling, general and administrative expenses | 87,057 | 84,290 | ||||||
Total operating costs and expenses | 395,285 | 368,199 | ||||||
Operating income | $110,990 | $97,947 | ||||||
Net sales by segment: | ||||||||
Flight Support Group | $301,067 | $287,213 | ||||||
Electronic Technologies Group | 208,411 | 184,429 | ||||||
Intersegment sales | (3,203 | ) | (5,496 | ) | ||||
$506,275 | $466,146 | |||||||
Operating income by segment: | ||||||||
Flight Support Group | $62,045 | $52,880 | ||||||
Electronic Technologies Group | 57,491 | 51,602 | ||||||
Other, primarily corporate | (8,546 | ) | (6,535 | ) | ||||
$110,990 | $97,947 | |||||||
Net sales | 100.0 | % | 100.0 | % | ||||
Gross profit | 39.1 | % | 39.1 | % | ||||
Selling, general and administrative expenses | 17.2 | % | 18.1 | % | ||||
Operating income | 21.9 | % | 21.0 | % | ||||
Interest expense | (.8 | %) | (1.2 | %) | ||||
Other income (expense) | — | % | (.1 | %) | ||||
Income tax (benefit) expense | (4.5 | %) | .9 | % | ||||
Net income attributable to noncontrolling interests | 1.6 | % | 1.9 | % | ||||
Net income attributable to HEICO | 24.1 | % | 17.0 | % | ||||
Exhibit | Description | |
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS | Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document. * | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document. * | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. * | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. * | |
101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document. * | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. * | |
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). * | |
* | Filed herewith. |
HEICO CORPORATION | |||
Date: | February 27, 2020 | By: | /s/ CARLOS L. MACAU, JR. |
Carlos L. Macau, Jr. Executive Vice President - Chief Financial Officer and Treasurer (Principal Financial Officer) | |||
By: | /s/ STEVEN M. WALKER | ||
Steven M. Walker Chief Accounting Officer and Assistant Treasurer (Principal Accounting Officer) | |||
(1) | I have reviewed this quarterly report on Form 10-Q of HEICO Corporation; |
(2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
(3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
(4) | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(5) | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
Date: | February 27, 2020 | /s/ LAURANS A. MENDELSON |
Laurans A. Mendelson | ||
Chief Executive Officer | ||
(Principal Executive Officer) | ||
(1) | I have reviewed this quarterly report on Form 10-Q of HEICO Corporation; |
(2) | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
(3) | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
(4) | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(5) | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
Date: | February 27, 2020 | /s/ CARLOS L. MACAU, JR. |
Carlos L. Macau, Jr. | ||
Chief Financial Officer | ||
(Principal Financial Officer) | ||
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | February 27, 2020 | /s/ LAURANS A. MENDELSON |
Laurans A. Mendelson | ||
Chief Executive Officer | ||
(Principal Executive Officer) | ||
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | February 27, 2020 | /s/ CARLOS L. MACAU, JR. |
Carlos L. Macau, Jr. | ||
Chief Financial Officer | ||
(Principal Financial Officer) | ||
INCOME TAXES (Details Textuals) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
Jan. 31, 2020 |
Jan. 31, 2019 |
Jan. 31, 2020 |
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| Income Tax Disclosure [Abstract] | |||
| Income Tax Expense (Benefit) | $ 22,900 | $ (4,100) | |
| Tax benefit from stock option exercises recognized in the period | 47,600 | 16,600 | |
| Year Over Year, Deferred Tax Expense From Stock Option Exercised | $ 31,000 | ||
| Deferred Income Tax Expense (Benefit) | $ 25,718 | $ (3,798) | |
REVENUE (Contract Assets and Liabilities) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Jan. 31, 2020 |
Oct. 31, 2019 |
|
| Contract with Customer, Asset and Liability [Abstract] | ||
| Contract assets | $ 44,823 | $ 43,132 |
| Contract liabilities | 26,148 | 23,809 |
| Net contract assets | 18,675 | $ 19,323 |
| Decrease in contract assets, net | 1,691 | |
| Increase (Decrease) in Customer Deposits | 2,339 | |
| Contract with Customer, Billings in Excess of Unbilled Receivable and New Deposits in Excess of Deposits Recognized as Revenue | $ (648) |
OPERATING SEGMENTS (Details 1) - USD ($) $ in Thousands |
Jan. 31, 2020 |
Oct. 31, 2019 |
|---|---|---|
| Segment Reporting, Asset Reconciling Item [Line Items] | ||
| Total assets | $ 3,097,121 | $ 2,969,211 |
| Other Primarily Corporate and Intersegment [Member] | ||
| Segment Reporting, Asset Reconciling Item [Line Items] | ||
| Total assets | 201,273 | 176,442 |
| Flight Support Group [Member] | Operating Segments [Member] | ||
| Segment Reporting, Asset Reconciling Item [Line Items] | ||
| Total assets | 1,182,947 | 1,149,737 |
| Electronic Technologies Group [Member] | Operating Segments [Member] | ||
| Segment Reporting, Asset Reconciling Item [Line Items] | ||
| Total assets | $ 1,712,901 | $ 1,643,032 |
LONG-TERM DEBT (Tables) |
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Jan. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Long-term Debt Instruments [Table Text Block] | Long-term debt consists of the following (in thousands):
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COMMITMENTS AND CONTINGENCIES |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Text Block] | COMMITMENTS AND CONTINGENCIES Guarantees As of January 31, 2020, the Company has arranged for standby letters of credit aggregating $4.8 million, which are supported by its revolving credit facility and pertain to payment guarantees related to potential workers' compensation claims and a facility lease as well as performance guarantees related to customer contracts entered into by certain of the Company's subsidiaries. Product Warranty Changes in the Company’s product warranty liability for the three months ended January 31, 2020 and 2019, respectively, are as follows (in thousands):
Litigation The Company is involved in various legal actions arising in the normal course of business. Based upon the Company’s and its legal counsel’s evaluations of any claims or assessments, management is of the opinion that the outcome of these matters will not have a material adverse effect on the Company’s results of operations, financial position or cash flows.
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NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS (Tables) |
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Jan. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The computation of basic and diluted net income per share attributable to HEICO shareholders is as follows (in thousands, except per share data):
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FAIR VALUE MEASUREMENTS |
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| Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Text Block] | FAIR VALUE MEASUREMENTS The Company's assets and liabilities that were measured at fair value on a recurring basis are set forth by level within the fair value hierarchy in the following tables (in thousands):
The Company maintains the HEICO Corporation Leadership Compensation Plan (the "LCP"), which is a non-qualified deferred compensation plan. The assets of the LCP principally represent cash surrender values of life insurance policies, which derive their fair values from investments in mutual funds that are managed by an insurance company and are classified within Level 2 and valued using a market approach. Certain other assets of the LCP represent investments in money market funds that are classified within Level 1. The assets of the LCP are held within an irrevocable trust and classified within other assets in the Company’s Condensed Consolidated Balance Sheets. The related liabilities of the LCP are included within other long-term liabilities in the Company’s Condensed Consolidated Balance Sheets and have a value of $168.9 million as of January 31, 2020 and $151.1 million as of October 31, 2019. As part of the agreement to acquire a subsidiary by the FSG in fiscal 2019, the Company may be obligated to pay contingent consideration of $6.4 million in fiscal 2022 should the acquired entity meet a certain earnings objective during the second and third years following the acquisition. As of January 31, 2020, the estimated fair value of the contingent consideration was $1.2 million. As part of the agreement to acquire a subsidiary by the ETG in fiscal 2017, the Company may be obligated to pay contingent consideration of $20.0 million in fiscal 2023 should the acquired entity meet a certain earnings objective during the first six years following the acquisition. As of January 31, 2020, the estimated fair value of the contingent consideration was $17.1 million. The estimated fair value of the contingent consideration arrangements described above are classified within Level 3 and were determined using probability-based scenario analyses. Under this method, a set of discrete potential future subsidiary earnings was determined using internal estimates based on various revenue growth rate assumptions for each scenario. A probability of likelihood was assigned to each discrete potential future earnings estimate and the resultant contingent consideration was calculated. The resulting probability-weighted contingent consideration amounts were discounted using a weighted average discount rate reflecting the credit risk of HEICO. Changes in either the revenue growth rates, related earnings or the discount rate could result in a material change to the amount of contingent consideration accrued and such changes will be recorded in the Company's condensed consolidated statements of operations. The Level 3 inputs used to derive the estimated fair value of the Company's contingent consideration liability as of January 31, 2020 were as follows:
Changes in the Company’s contingent consideration liability measured at fair value on a recurring basis using unobservable inputs (Level 3) for the three months ended January 31, 2020 are as follows (in thousands):
The Company's contingent consideration liability is included in other long-term liabilities in its Condensed Consolidated Balance Sheet and the Company records changes in accrued contingent consideration within selling, general and administrative expenses in its Condensed Consolidated Statement of Operations. The Company did not have any transfers between Level 1 and Level 2 fair value measurements during the three months ended January 31, 2020. The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, trade accounts payable and accrued expenses and other current liabilities approximate fair value as of January 31, 2020 due to the relatively short maturity of the respective instruments. The carrying amount of long-term debt approximates fair value due to its variable interest rates.
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GOODWILL AND OTHER INTANGIBLE ASSETS |
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| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Text Block] | GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill by operating segment for the three months ended January 31, 2020 are as follows (in thousands):
The goodwill acquired pertains to the fiscal 2020 acquisitions described in Note 2, Acquisitions, and represents the residual value after the allocation of the total consideration to the tangible and identifiable intangible assets acquired and liabilities and noncontrolling interests assumed. Foreign currency translation adjustments are included in other comprehensive income (loss) in the Company's Condensed Consolidated Statements of Comprehensive Income. The adjustments to goodwill represent immaterial measurement period adjustments to the purchase price allocation of certain fiscal 2019 acquisitions. The Company estimates that $10 million of the goodwill acquired in fiscal 2020 will be deductible for income tax purposes. Identifiable intangible assets consist of the following (in thousands):
The increase in the gross carrying amount of customer relationships, intellectual property and trade names as of January 31, 2020 compared to October 31, 2019 principally relates to such intangible assets recognized in connection with the fiscal 2020 acquisitions (see Note 2, Acquisitions). Amortization expense related to intangible assets for the three months ended January 31, 2020 and 2019 was $13.7 million and $12.8 million, respectively. Amortization expense related to intangible assets for the remainder of fiscal 2020 is estimated to be $41.4 million. Amortization expense for each of the next five fiscal years and thereafter is estimated to be $52.5 million in fiscal 2021, $46.0 million in fiscal 2022, $40.7 million in fiscal 2023, $36.2 million in fiscal 2024, $32.3 million in fiscal 2025, and $152.7 million thereafter.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended |
|---|---|
Jan. 31, 2020 | |
| Accounting Policies [Abstract] | |
| Summary of Significant Accounting Policies [Text Block] | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements of HEICO Corporation and its subsidiaries (collectively, “HEICO,” or the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q. Therefore, the condensed consolidated financial statements do not include all information and footnotes normally included in annual consolidated financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended October 31, 2019. The October 31, 2019 Condensed Consolidated Balance Sheet has been derived from the Company’s audited consolidated financial statements. In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments (consisting principally of normal recurring accruals) necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, statements of comprehensive income, statements of shareholders' equity and statements of cash flows for such interim periods presented. The results of operations for the three months ended January 31, 2020 are not necessarily indicative of the results which may be expected for the entire fiscal year. The Company has two operating segments: the Flight Support Group (“FSG”), consisting of HEICO Aerospace Holdings Corp. and HEICO Flight Support Corp. and their respective subsidiaries; and the Electronic Technologies Group (“ETG”), consisting of HEICO Electronic Technologies Corp. (“HEICO Electronic”) and its subsidiaries. New Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, which, as amended, was codified as Accounting Standards Codification ("ASC") Topic 842, "Leases" ("ASC 842"). ASC 842 requires recognition of lease assets and lease liabilities on the balance sheet of lessees. The Company adopted ASC 842 as of November 1, 2019 using a modified retrospective transition approach with the election to apply the guidance as of the adoption date instead of at the beginning of the earliest comparative period presented. The adoption of this guidance resulted in an increase in the Company's assets and liabilities due to the recognition of right-of-use ("ROU") assets and corresponding lease liabilities for leases that are currently classified as operating leases. Upon adoption, the Company elected the package of transitional practical expedients, which allowed the Company to not reassess its prior conclusions about lease identification, lease classification, and initial direct costs. In addition, the Company elected the short-term lease practical expedient, which allows HEICO to not record an ROU asset and lease liability for any lease with a term of twelve months or less, and also elected the single component practical expedient for all asset classes, which allows the Company to include both lease and non-lease components associated with a lease as a single lease component when determining the value of the ROU asset and lease liability. The adoption of this guidance resulted in the Company recording ROU assets and corresponding lease liabilities of $63.4 million and $64.1 million, respectively, in the Company's Condensed Consolidated Balance Sheet. The adoption of ASC 842 did not have a material impact on the Company’s Condensed Consolidated Statement of Operations or Statement of Cash Flows. See Note 9, Leases, for additional information regarding the Company's accounting policy for leases and disclosures required by ASC 842. In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment," which is intended to simplify the current test for goodwill impairment by eliminating the second step in which the implied value of a reporting unit is calculated when the carrying value of the reporting unit exceeds its fair value. Under ASU 2017-04, goodwill impairment should be recognized for the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 must be applied prospectively and is effective for any annual or interim goodwill impairment test in fiscal years beginning after December 15, 2019, or in fiscal 2021 for HEICO. Early adoption is permitted. The Company is currently evaluating the effect the adoption of this guidance will have on its consolidated results of operations, financial position and cash flows.
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SELECTED FINANCIAL STATEMENT INFORMATION (Details Textuals) - USD ($) $ in Millions |
3 Months Ended | ||
|---|---|---|---|
Jan. 31, 2020 |
Jan. 31, 2019 |
Oct. 31, 2019 |
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| Selected Financial Statement Information (Details) [Abstract] | |||
| Accrued customer rebates and credits | $ 19.4 | $ 18.0 | |
| Total customer rebates and credits deducted within net sales | $ 2.1 | $ 1.4 | |
| Electronic Technologies Group [Member] | Quell [Member] | |||
| Business Acquisition [Line Items] | |||
| Business Acquisition, Percentage of Voting Interests Acquired | 80.10% | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textuals) $ in Thousands |
Jan. 31, 2020
USD ($)
|
|---|---|
| Operating Lease, Right-of-Use Asset | $ 62,114 |
| Operating Lease, Liability | 62,911 |
| Accounting Standards Update 2016-02 [Member] | |
| Operating Lease, Right-of-Use Asset | 63,400 |
| Operating Lease, Liability | $ 64,100 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Jan. 31, 2020 |
Jan. 31, 2019 |
|
| Net income from consolidated operations | $ 129,802 | $ 88,026 |
| Other comprehensive income (loss): | ||
| Foreign currency translation adjustments | (2,678) | 4,374 |
| Amortization of unrealized loss on defined benefit pension plan, net of tax | 24 | 6 |
| Total other comprehensive income (loss) | (2,654) | 4,380 |
| Comprehensive income from consolidated operations | 127,148 | 92,406 |
| Less: Comprehensive income attributable to noncontrolling interests | 7,914 | 8,694 |
| Less: Foreign currency translation adjustments attributable to noncontrolling interests | (130) | 193 |
| Comprehensive income attributable to noncontrolling interests | 7,784 | 8,887 |
| Comprehensive income attributable to HEICO | $ 119,364 | $ 83,519 |
SELECTED FINANCIAL STATEMENT INFORMATION (Property, Plant and Equipment) (Details) - USD ($) $ in Thousands |
Jan. 31, 2020 |
Oct. 31, 2019 |
|---|---|---|
| Property, Plant and Equipment [Line Items] | ||
| Land | $ 6,819 | $ 6,820 |
| Buildings and improvements | 117,111 | 116,997 |
| Machinery, equipment and tooling | 256,262 | 253,127 |
| Construction in progress | 10,743 | 8,382 |
| Property, plant and equipment, gross | 390,935 | 385,326 |
| Less: Accumulated depreciation and amortization | (218,636) | (211,981) |
| Property, plant and equipment, net | $ 172,299 | $ 173,345 |
LEASES (ROU Assets and Lease Liabilities) (Details) $ in Thousands |
Jan. 31, 2020
USD ($)
|
|---|---|
| Leases [Abstract] | |
| Right-of-use assets | $ 62,114 |
| Current lease liabilities | 13,114 |
| Long-term lease liabilities | 49,797 |
| Total operating lease liabilities | $ 62,911 |
LEASES (Supplemental Cash Flow Information) (Details) $ in Thousands |
3 Months Ended |
|---|---|
|
Jan. 31, 2020
USD ($)
| |
| Leases [Abstract] | |
| Cash paid for amounts included in the measurement of lease liabilities | $ 4,243 |
| Right-of-use assets obtained in exchange for new lease liabilities | $ 5,162 |
LEASES |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lessee, Operating Leases [Text Block] | LEASES The Company’s lease arrangements primarily pertain to manufacturing facilities, office buildings, equipment, land and vehicles. The Company evaluates whether a contractual arrangement that provides it with control over the use of an asset is, or contains, a lease at the inception date. The term of a lease is inclusive of any option to renew, extend, or terminate the lease when it is reasonably certain that the Company will exercise such option. The Company classifies a lease as operating or finance using the classification criteria set forth in ASC 842. Finance leases are not material to the Company's condensed consolidated financial statements. HEICO recognizes operating lease right-of-use (“ROU”) assets and corresponding lease liabilities as of the lease commencement date based on the present value of the lease payments over the lease term. The discount rate used to calculate the present value of the Company’s leases is based on HEICO’s incremental borrowing rate and considers credit risk, the lease term and other available information as of the commencement date since the leases do not provide a readily determinable implicit rate. Variable lease payments that depend on an index or a rate are included in the determination of operating ROU assets and lease liabilities using the index or rate at the lease commencement date. Variable lease payments that do not depend on an index or rate or resulting from changes in an index or rate subsequent to the lease commencement date, are recorded as lease expense in the period in which the obligation for the payment is incurred. The Company’s operating ROU assets are increased by any prepaid lease payments and initial direct costs and reduced by any lease incentives. The Company’s leases do not contain any material residual value guarantees or restrictive covenants. HEICO’s operating lease ROU assets represent its right to use an underlying asset during the lease term and its operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. HEICO’s operating lease ROU assets are included within other assets and its operating lease liabilities are included within both accrued expenses and other current liabilities and other long-term liabilities in the Company’s Condensed Consolidated Balance Sheet. For additional information on the Company’s finance leases, see Note 5, Long-term Debt, of the Notes to Condensed Consolidated Financial Statements of this quarterly report and Note 5, Long-term Debt, and Note 3, Selected Financial Statement Information - Property, Plant and Equipment, of the Notes to Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the year ended October 31, 2019. The following table presents the Company’s operating lease ROU assets and lease liabilities as of January 31, 2020 (in thousands):
The Company’s operating lease expense is recorded as a component of cost of sales and/or selling, general, and administrative expenses in the Company’s Condensed Consolidated Statements of Operations. The following table presents the components of operating lease expense for the three months ended January 31, 2020 (in thousands):
The following table presents a maturity analysis of the Company's operating lease liabilities as of January 31, 2020 for the remainder of fiscal 2020 and the next five fiscal years and thereafter (in thousands):
Prior to the adoption of ASC 842, the Company's future minimum lease payments under non-cancelable operating leases on an undiscounted basis as of October 31, 2019 were $15.5 million in fiscal 2020, $15.6 million in fiscal 2021, $13.8 million in fiscal 2022, $8.5 million in fiscal 2023, $4.7 million in fiscal 2024 and $18.8 million thereafter. The Company does not have any material leases that have been signed but have yet to commence as of January 31, 2020. The following table presents the weighted average remaining lease term and discount rate of the Company’s operating leases as of January 31, 2020:
The following table presents supplemental disclosures of cash flow information associated with the Company's operating leases for the three months ended January 31, 2020 (in thousands):
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LONG-TERM DEBT |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-term Debt [Text Block] | LONG-TERM DEBT Long-term debt consists of the following (in thousands):
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COMMITMENTS AND CONTINGENCIES (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Product Warranty Liability [Table Text Block] | Changes in the Company’s product warranty liability for the three months ended January 31, 2020 and 2019, respectively, are as follows (in thousands):
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
|---|---|---|
Jan. 31, 2020 |
Jan. 31, 2019 |
|
| Net sales | $ 506,275 | $ 466,146 |
| Operating costs and expenses: | ||
| Cost of sales | 308,228 | 283,909 |
| Selling, general and administrative expenses | 87,057 | 84,290 |
| Total operating costs and expenses | 395,285 | 368,199 |
| Operating income | 110,990 | 97,947 |
| Interest expense | (4,283) | (5,489) |
| Other (expense) income | 195 | (332) |
| Income before income taxes and noncontrolling interests | 106,902 | 92,126 |
| Income tax expense | (22,900) | 4,100 |
| Net income from consolidated operations | 129,802 | 88,026 |
| Less: Net income attributable to noncontrolling interests | 7,914 | 8,694 |
| Net income attributable to HEICO | $ 121,888 | $ 79,332 |
| Net income per share attributable to HEICO shareholders: | ||
| Basic (in dollars per share) | $ 0.91 | $ 0.60 |
| Diluted (in dollars per share) | $ 0.89 | $ 0.58 |
| Weighted average number of common shares outstanding: | ||
| Basic (in shares) | 134,523 | 132,933 |
| Diluted (in shares) | 137,421 | 136,978 |
SELECTED FINANCIAL STATEMENT INFORMATION (Inventories) (Details) - USD ($) $ in Thousands |
Jan. 31, 2020 |
Oct. 31, 2019 |
|---|---|---|
| Inventory [Line Items] | ||
| Finished products | $ 211,279 | $ 199,880 |
| Work in process | 38,184 | 32,548 |
| Materials, parts, assemblies and supplies | 191,787 | 187,891 |
| Inventories, net of valuation reserves | $ 441,250 | $ 420,319 |
SELECTED FINANCIAL STATEMENT INFORMATION SELECTED FINANCIAL STATEMENT INFORMATION (Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Jan. 31, 2020 |
Jan. 31, 2019 |
|
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Starting accumulated other comprehensive loss | $ (16,739) | |
| Unrealized gain | (2,548) | |
| Amortization of unrealized loss on defined benefit pension plan, net of tax | 24 | $ 6 |
| Ending accumulated other comprehensive loss | (19,263) | |
| Foreign Currency Translation [Member] | ||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Starting accumulated other comprehensive loss | (14,989) | |
| Unrealized gain | (2,548) | |
| Ending accumulated other comprehensive loss | (17,537) | |
| Pension Benefit Obligation [Member] | ||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
| Starting accumulated other comprehensive loss | (1,750) | |
| Amortization of unrealized loss on defined benefit pension plan, net of tax | 24 | |
| Ending accumulated other comprehensive loss | $ (1,726) | |
LEASES (Details Textuals) - USD ($) $ in Thousands |
Jan. 31, 2020 |
Oct. 31, 2019 |
|---|---|---|
| Item Effected [Line Items] | ||
| Next fiscal twelve months | $ 15,776 | |
| Year Two | 13,859 | |
| Year three | 8,536 | |
| Year four | 4,755 | |
| Year five | 3,998 | |
| Thereafter | $ 18,055 | |
| Previous Accounting Guidance [Member] | ||
| Item Effected [Line Items] | ||
| Next fiscal twelve months | $ 15,500 | |
| Year Two | 15,600 | |
| Year three | 13,800 | |
| Year four | 8,500 | |
| Year five | 4,700 | |
| Thereafter | $ 18,800 |
LEASES (Operating Lease Expense) (Details) $ in Thousands |
3 Months Ended | |||
|---|---|---|---|---|
|
Jan. 31, 2020
USD ($)
| ||||
| Leases [Abstract] | ||||
| Operating lease expense | $ 4,260 | |||
| Variable lease expense | 615 | |||
| Total operating lease expense (1) | $ 4,875 | [1] | ||
| ||||
GOODWILL AND OTHER INTANGIBLE ASSETS (Goodwill) (Details) $ in Thousands |
3 Months Ended |
|---|---|
|
Jan. 31, 2020
USD ($)
| |
| Goodwill [Line Items] | |
| Opening Balance | $ 1,268,703 |
| Goodwill acquired | 33,268 |
| Foreign currency translation adjustments | (740) |
| Adjustments to goodwill | 85 |
| Ending Balance | 1,301,316 |
| Flight Support Group [Member] | |
| Goodwill [Line Items] | |
| Opening Balance | 410,044 |
| Goodwill acquired | 0 |
| Foreign currency translation adjustments | (200) |
| Adjustments to goodwill | 0 |
| Ending Balance | 409,844 |
| Electronic Technologies Group [Member] | |
| Goodwill [Line Items] | |
| Opening Balance | 858,659 |
| Goodwill acquired | 33,268 |
| Foreign currency translation adjustments | (540) |
| Adjustments to goodwill | 85 |
| Ending Balance | $ 891,472 |
LONG-TERM DEBT (Details Textuals) |
Jan. 31, 2020 |
Oct. 31, 2019 |
|---|---|---|
| Revolving Credit Facility [Member] | ||
| Debt Instrument [Line Items] | ||
| Weighted average interest rate | 2.70% | 3.00% |
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Jan. 31, 2020 |
Jan. 31, 2019 |
|
| Schedule of Product Warranties [Line Items] | ||
| Balances as of beginning of fiscal year | $ 2,810 | $ 3,306 |
| Accruals for warranties | 1,007 | 694 |
| Acquired warranty liabilities | 50 | |
| Warranty claims settled | (459) | (829) |
| Balances as of end of period | $ 3,408 | $ 3,171 |
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