10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2010

OR

o TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to _______

Commission File Number: 1-4604

HEICO CORPORATION

(Exact name of registrant as specified in its charter)

Florida	65-0341002
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)
3000 Taft Street, Hollywood, Florida	33021
(Address of principal executive offices)	(Zip Code)

(954) 987-4000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer xAccelerated filer o  Non-accelerated filer o  Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes o No x

The number of shares outstanding of each of the registrant’s classes of common stock as of August 27, 2010 is as follows:

Common Stock, $.01 par value	13,126,005 shares
Class A Common Stock, $.01 par value	19,817,872 shares

HEICO CORPORATION

INDEX TO QUARTERLY REPORT ON FORM 10-Q

			Page
Part I.	Financial Information:
	Item 1.	Condensed Consolidated Balance Sheets (unaudited) as of July 31, 2010 and October 31, 2009	2
		Condensed Consolidated Statements of Operations (unaudited) for the nine months and three months ended July 31, 2010 and 2009	3
		Condensed Consolidated Statements of Shareholders’ Equity and Comprehensive Income (unaudited)for the nine months ended July 31, 2010 and 2009	4
		Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended July 31, 2010 and 2009	5
		Notes to Condensed Consolidated Financial Statements (unaudited)	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	31
	Item 4.	Controls and Procedures	31
Part II.	Other Information:
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
	Item 6.	Exhibits	32
Signature			33

1

PART I.  FINANCIAL INFORMATION; Item 1.  FINANCIAL STATEMENTS

HEICO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS – UNAUDITED

	July 31, 2010			October 31, 2009
ASSETS
Current assets:
Cash and cash equivalents	$	11,037,000		$	7,167,000
Accounts receivable, net		84,078,000			77,864,000
Inventories, net		140,712,000			137,585,000
Prepaid expenses and other current assets		5,364,000			4,290,000
Deferred income taxes		18,534,000			16,671,000
Total current assets		259,725,000			243,577,000
Property, plant and equipment, net		59,803,000			60,528,000
Goodwill		380,709,000			365,243,000
Intangible assets, net		51,949,000			41,588,000
Other assets		25,853,000			21,974,000
Total assets	$	778,039,000		$	732,910,000
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$	199,000		$	237,000
Trade accounts payable		28,290,000			26,978,000
Accrued expenses and other current liabilities		38,292,000			36,978,000
Income taxes payable		1,196,000			1,320,000
Total current liabilities		67,977,000			65,513,000
Long-term debt, net of current maturities		47,093,000			55,194,000
Deferred income taxes		43,126,000			41,340,000
Other long-term liabilities		27,836,000			23,268,000
Total liabilities		186,032,000			185,315,000
Commitments and contingencies (Note 11)
Redeemable noncontrolling interests (Note 12)		56,053,000			56,937,000
Shareholders’ equity:
Preferred Stock, $.01 par value per share; 10,000,000 shares
authorized; 300,000 shares designated as Series B Junior
Participating Preferred Stock and 300,000 shares designated
as Series C Junior Participating Preferred Stock; none issued		¾			¾
Common Stock, $.01 par value per share; 30,000,000 shares authorized
13,126,005 and 13,011,426 shares issued and outstanding, respectively		131,000			104,000
Class A Common Stock, $.01 par value per share; 30,000,000
shares authorized; 19,815,122 and 19,641,543 shares issued
and outstanding, respectively		198,000			157,000
Capital in excess of par value		227,215,000			224,625,000
Accumulated other comprehensive loss		(498,000	)		(1,381,000	)
Retained earnings		225,206,000			189,485,000
Total HEICO shareholders’ equity		452,252,000			412,990,000
Noncontrolling interests		83,702,000			77,668,000
Total shareholders’ equity		535,954,000			490,658,000
Total liabilities and equity	$	778,039,000		$	732,910,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

HEICO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS – UNAUDITED

	Nine months ended July 31,						Three months ended July 31,
	2010			2009			2010			2009
Net sales	$	447,650,000		$	394,689,000		$	158,270,000		$	134,086,000
Operating costs and expenses:
Cost of sales		286,351,000			262,456,000			100,717,000			88,275,000
Selling, general and administrative expenses		81,805,000			68,039,000			28,560,000			24,389,000
Total operating costs and expenses		368,156,000			330,495,000			129,277,000			112,664,000
Operating income		79,494,000			64,194,000			28,993,000			21,422,000
Interest expense		(422,000	)		(484,000	)		(136,000	)		(177,000	)
Other income (expense)		392,000			186,000			(31,000	)		184,000
Income before income taxes and noncontrolling
interests		79,464,000			63,896,000			28,826,000			21,429,000
Income tax expense		27,000,000			19,331,000			9,300,000			6,511,000
Net income from consolidated operations		52,464,000			44,565,000			19,526,000			14,918,000
Less: Net income attributable to noncontrolling
interests		13,168,000			11,575,000			4,596,000			3,786,000
Net income attributable to HEICO	$	39,296,000		$	32,990,000		$	14,930,000		$	11,132,000
Net income per share attributable to HEICO
shareholders:
Basic	$	1.20		$	1.01		$	.45		$	.34
Diluted	$	1.16		$	.98		$	.44		$	.33
Weighted average number of common shares
outstanding:
Basic		32,793,137			32,799,101			32,917,530			32,603,643
Diluted		33,753,414			33,816,980			33,797,471			33,632,863
Cash dividends per share	$	.108		$	.096		$	.060		$	.048

The accompanying notes are an integral part of these condensed consolidated financial statements.

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HEICO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

AND COMPREHENSIVE INCOME – UNAUDITED

				HEICO Shareholders' Equity
											Accumulated
	Redeemable					Class A		Capital in			Other								Total
	Noncontrolling			Common		Common		Excess of			Comprehensive			Retained			Noncontrolling		Shareholders'
	Interests			Stock		Stock		Par Value			Loss			Earnings			Interests		Equity
Balances as of October 31, 2009
(as previously reported)	$	―		$	104,000	$	157,000	$	224,625,000		$	(1,381,000	)	$	234,348,000		$	―	$	457,853,000
Retrospective adjustments related to
adoption of accounting guidance for
noncontrolling interests		56,937,000			—		—		—			—			(44,863,000	)		77,668,000		32,805,000
Balances as of October 31, 2009
(as adjusted)		56,937,000			104,000		157,000		224,625,000			(1,381,000	)		189,485,000			77,668,000		490,658,000
Comprehensive income:
Net income		7,134,000			—		—		—			—			39,296,000			6,034,000		45,330,000
Foreign currency translation adjustments		—			—		—		—			877,000			—			—		877,000
Total comprehensive income		7,134,000			—		—		—			877,000			39,296,000			6,034,000		46,207,000
Cash dividends ($.108 per share)		—			—		—		—			—			(3,546,000	)		—		(3,546,000	)
Five-for-four common stock split		—			26,000		40,000		(66,000	)		—			(68,000	)		—		(68,000	)
Proceeds from stock option exercises		—			1,000		1,000		1,465,000			—			—			—		1,467,000
Tax benefit from stock option exercises		—			—		—		951,000			—			—			—		951,000
Stock option compensation expense		—			—		—		921,000			—			—			—		921,000
Distributions to noncontrolling interests		(7,184,000	)		—		—		—			—			—			—		—
Acquisitions of noncontrolling interests		(795,000	)		—		—		—			—			—			—		—
Redemptions of common stock related to
stock option exercises		—			—		—		(681,000	)		—			—			—		(681,000	)
Adjustments to redemption amount of
redeemable noncontrolling interests		(39,000	)		—		—		—			—			39,000			—		39,000
Other		—			—		—		—			6,000			—			—		6,000
Balances as of July 31, 2010	$	56,053,000		$	131,000	$	198,000	$	227,215,000		$	(498,000	)	$	225,206,000		$	83,702,000	$	535,954,000

				HEICO Shareholders' Equity
													Accumulated
	Redeemable						Class A			Capital in			Other									Total
	Noncontrolling			Common			Common			Excess of			Comprehensive			Retained			Noncontrolling			Shareholders'
	Interests			Stock			Stock			Par Value			Loss			Earnings			Interests			Equity
Balances as of October 31, 2008
(as previously reported)	$	―		$	106,000		$	158,000		$	229,443,000		$	(4,819,000	)	$	192,872,000		$	―		$	417,760,000
Retrospective adjustments related to
adoption of accounting guidance for
noncontrolling interests		48,736,000			—			—			—			—			(35,896,000	)		71,138,000			35,242,000
Balances as of October 31, 2008
(as adjusted)		48,736,000			106,000			158,000			229,443,000			(4,819,000	)		156,976,000			71,138,000			453,002,000
Comprehensive income:
Net income		5,938,000			—			—			—			—			32,990,000			5,637,000			38,627,000
Foreign currency translation adjustments		—			—			—			—			2,859,000			—			—			2,859,000
Total comprehensive income		5,938,000			—			—			—			2,859,000			32,990,000			5,637,000			41,486,000
Repurchases of common stock		—			(2,000	)		(2,000	)		(8,094,000	)		—			—			—			(8,098,000	)
Cash dividends ($.096 per share)		—			—			—			—			—			(3,150,000	)		—			(3,150,000	)
Proceeds from stock option exercises		—			—			1,000			821,000			—			—			—			822,000
Tax benefit from stock option exercises		—			—			—			1,889,000			—			—			—			1,889,000
Stock option compensation expense		—			—			—			15,000			—			—			—			15,000
Distributions to noncontrolling interests		(5,533,000	)		—			—			—			—			—			(461,000	)		(461,000	)
Acquisitions of noncontrolling interests		(10,015,000	)		—			—			—			—			6,845,000			—			6,845,000
Noncontrolling interests assumed
related to acquistion		7,505,000			—			—			—			—			(4,202,000	)		—			(4,202,000	)
Adjustments to redemption amount of
redeemable noncontrolling interests		971,000			—			—			—			—			(971,000	)		—			(971,000	)
Other		—			—			—			—			164,000			1,000			—			165,000
Balances as of July 31, 2009	$	47,602,000		$	104,000		$	157,000		$	224,074,000		$	(1,796,000	)	$	188,489,000		$	76,314,000		$	487,342,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

HEICO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS – UNAUDITED

	Nine months ended July 31,
	2010			2009
Operating Activities:
Net income from consolidated operations	$	52,464,000		$	44,565,000
Adjustments to reconcile net income from consolidated operations
to net cash provided by operating activities:
Depreciation and amortization		13,578,000			10,951,000
Impairment of intangible assets		281,000			—
Deferred income tax benefit		(80,000	)		(1,376,000	)
Tax benefit from stock option exercises		951,000			1,889,000
Excess tax benefit from stock option exercises		(669,000	)		(1,572,000	)
Stock option compensation expense		921,000			15,000
Changes in operating assets and liabilities, net of acquisitions:
(Increase) decrease in accounts receivable		(2,988,000	)		20,207,000
Decrease (increase) in inventories		3,625,000			(9,282,000	)
Increase in prepaid expenses and other current assets		(1,051,000	)		(2,271,000	)
Decrease in trade accounts payable		(177,000	)		(2,995,000	)
Increase (decrease) in accrued expenses and other current liabilities		1,744,000			(15,776,000	)
Decrease in income taxes payable		(794,000	)		(1,080,000	)
Other		116,000			444,000
Net cash provided by operating activities		67,921,000			43,719,000
Investing Activities:
Acquisitions, net of cash acquired		(39,061,000	)		(34,562,000	)
Capital expenditures		(6,743,000	)		(7,784,000	)
Other		(18,000	)		73,000
Net cash used in investing activities		(45,822,000	)		(42,273,000	)
Financing Activities:
Payments on revolving credit facility		(45,000,000	)		(49,000,000	)
Borrowings on revolving credit facility		37,000,000			68,000,000
Acquisitions of noncontrolling interests		(795,000	)		(11,268,000	)
Repurchases of common stock		—			(8,098,000	)
Distributions to noncontrolling interests		(7,184,000	)		(5,994,000	)
Cash dividends paid		(3,614,000	)		(3,150,000	)
Redemptions of common stock related to stock option exercises		(681,000	)		—
Proceeds from stock option exercises		1,467,000			822,000
Excess tax benefit from stock option exercises		669,000			1,572,000
Other		(152,000	)		(158,000	)
Net cash used in financing activities		(18,290,000	)		(7,274,000	)
Effect of exchange rate changes on cash		61,000			214,000
Net increase (decrease) in cash and cash equivalents		3,870,000			(5,614,000	)
Cash and cash equivalents at beginning of year		7,167,000			12,562,000
Cash and cash equivalents at end of period	$	11,037,000		$	6,948,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

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HEICO CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS–UNAUDITED

1.      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, 2009.  The October 31, 2009 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 and statements of cash flows for such interim periods presented.  The results of operations for the nine months ended July 31, 2010 are not necessarily indicative of the results which may be expected for the entire fiscal year.

Stock Split

In March 2010, the Company’s Board of Directors declared a 5-for-4 stock split on both classes of the Company’s common stock.  The stock split was effected as of April 27, 2010 in the form of a 25% stock dividend distributed to shareholders of record as of April 16, 2010.  All applicable share and per share information has been adjusted retrospectively to give effect to the 5-for-4 stock split.

Noncontrolling Interests

Effective November 1, 2009, the Company adopted new accounting guidance that requires the recognition of certain noncontrolling interests (previously referred to as minority interests) as a separate component within equity in the consolidated balance sheet.  It also requires the amount of consolidated net income attributable to the parent and the noncontrolling interests be clearly identified and presented within the consolidated statement of operations.  The adoption of this new guidance has affected the presentation of noncontrolling interests in the Company’s condensed consolidated financial statements on a retrospective basis.  For example, under this guidance, “Net income from consolidated operations” is comparable to what was previously presented as “Income before minority interests” and “Net income attributable to HEICO” is comparable to what was previously presented as “Net income.”  Further, acquisitions of noncontrolling interests are considered a financing activity under the new accounting guidance and are no longer presented as an investing activity.

6

Effective November 1, 2009, the Company also adopted new accounting guidance that affects the financial statement classification and measurement of redeemable noncontrolling interests.  As further detailed in Note 15, Commitments and Contingencies, of the Notes to Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the year ended October 31, 2009, the holders of equity interests in certain of the Company’s subsidiaries have rights (“Put Rights”) that require the Company to provide cash consideration for their equity interests (the “Redemption Amount”) at fair value or at a formula that management intended to reasonably approximate fair value based solely on a multiple of future earnings over a measurement period.  The Put Rights are embedded in the shares owned by the noncontrolling interest holders and are not freestanding.  Previously, the Company recorded such redeemable noncontrolling interests at historical cost plus an allocation of subsidiary earnings based on ownership interest, less dividends paid to the noncontrolling interest holders.  Effective November 1, 2009, the Company adjusted its redeemable noncontrolling interests in accordance with this new accounting guidance to the higher of their carrying cost or management’s estimate of the Redemption Amount with a corresponding decrease to retained earnings and classified such interests outside of permanent equity.  Under this guidance, subsequent adjustments to the carrying amount of redeemable noncontrolling interests to reflect any changes in the Redemption Amount at the end of each reporting period will be recorded in the same manner.  Such adjustments to Redemption Amounts based on fair value will have no effect on net income per share attributable to HEICO shareholders whereas the portion of periodic adjustments to the carrying amount of redeemable noncontrolling interests based solely on a multiple of future earnings that reflect a redemption amount in excess of fair value will effect net income per share attributable to HEICO shareholders under the two-class method.

As a result of adopting the new accounting guidance for noncontrolling interests and redeemable noncontrolling interests, the Company (i) reclassified approximately $78 million from temporary equity (previously labeled as “Minority interests in consolidated subsidiaries”) to permanent equity (labeled as “Noncontrolling interests”) pertaining to noncontrolling interests that do not contain a redemption feature; and (ii) renamed temporary equity as “Redeemable noncontrolling interests” and recorded an approximately $45 million increase to redeemable noncontrolling interests with a corresponding decrease to retained earnings in the Company’s Condensed Consolidated Balance Sheet.  The resulting $57 million of redeemable noncontrolling interests as of November 1, 2009 represents management’s estimate of the aggregate Redemption Amount of all Put Rights that the Company would be required to pay of which approximately $25 million is redeemable at fair value and approximately $32 million is redeemable based solely on a multiple of future earnings.  The actual Redemption Amount will likely be different.  See Note 12, Redeemable Noncontrolling Interests, for additional information.

New Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued new guidance which defines fair value, establishes a framework for measuring fair value, and requires expanded disclosures about fair value measurements.  In February 2008, the FASB issued additional guidance which delayed the effective date by one year for nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis.  These nonfinancial assets and liabilities include items such as goodwill,

7

other intangible assets, and property, plant and equipment that are measured at fair value resulting from impairment, if deemed necessary.  The portions of the new guidance that were delayed were adopted by the Company on a prospective basis as of the beginning of fiscal 2010, or November 1, 2009.  The adoption did not have a material effect on the Company’s results of operations, financial position or cash flows.

In December 2007, the FASB issued new guidance for business combinations that retains the fundamental requirements of previous guidance that the acquisition method of accounting (formerly the “purchase accounting” method) be used for all business combinations and for an acquirer to be identified for each business combination.  However, the new guidance changes the approach of applying the acquisition method in a number of significant areas, including that acquisition costs will generally be expensed as incurred; noncontrolling interests will be valued at fair value as of the acquisition date; in-process research and development will be recorded at fair value as an indefinite-lived intangible asset as of the acquisition date; restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date; and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense.  Further, any contingent consideration will be recognized as a liability at fair value as of the acquisition date with subsequent fair value adjustments recorded in operations.  Contingent consideration was previously accounted for as an additional cost of the respective acquired entity when paid.  The Company adopted the new guidance on a prospective basis as of the beginning of fiscal 2010 for all business combinations consummated on or after November 1, 2009.  The adoption did not have a material effect on the Company’s results of operations, financial position or cash flows.

In January 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-06, “Improving Disclosures About Fair Value Measurements,” which requires new disclosures regarding transfers in and out of Level 1 and Level 2 fair value measurements and more detailed information of activity in Level 3 fair value measurements.  The Company adopted ASU 2010-06 as of the beginning of the second quarter of fiscal 2010, except the additional Level 3 disclosures, which are effective in fiscal years beginning after December 15, 2010, or as of fiscal 2012 for HEICO.  The adoption did not have a material effect on the Company’s results of operations, financial position or cash flows.

2.      ACQUISITIONS

In February 2010, the Company, through its HEICO Electronic Technologies Corp. (“HEICO Electronic”) subsidiary, acquired substantially all of the assets and assumed certain liabilities of dB Control.  dB Control produces high-power devices used in both defense and commercial applications.  The total consideration for this acquisition and related allocation to the tangible and identifiable intangible assets acquired and liabilities assumed is not material or significant to the Company’s condensed consolidated financial statements.  The purchase price (including a post closing purchase price adjustment of approximately $1.6 million accrued as of the acquisition date and paid during the third quarter of fiscal 2010) was paid in cash principally using proceeds from the Company’s revolving credit facility.  The total consideration includes an accrual of approximately $1.2 million representing the fair value of contingent consideration that the Company may be obligated to pay in fiscal 2013 should dB Control meet certain earnings

8

objectives during the second and third years following the acquisition.  The maximum amount of contingent consideration that the Company could be required to pay is $2.0 million.  See Note 7, Fair Value Measurements, for additional information regarding the Company’s contingent consideration obligation.

As part of the purchase agreements associated with certain prior year acquisitions, the Company may be obligated to pay additional purchase consideration based on the acquired subsidiary meeting certain earnings objectives following the acquisition.  The Company accrues an estimate of additional purchase consideration when the earnings objectives are met.  During the first quarter of fiscal 2010, the Company, through HEICO Electronic, paid $1.9 million of additional purchase consideration of which $1.8 million was accrued as of October 31, 2009.  During the second and third quarters of fiscal 2010, the Company, through HEICO Electronic, paid $1.0 million and $1.3 million, respectively, of additional purchase consideration related to prior year acquisitions for which the earnings objectives were met during fiscal 2010.  The aforementioned amounts paid were based on a multiple of each applicable subsidiary’s earnings relative to target and were not contingent upon the former shareholders of the respective acquired entity remaining employed by the Company or providing future services to the Company.  Accordingly, these amounts represent an additional cost of the respective entity recorded as additional goodwill.  Information regarding additional purchase consideration related to prior year acquisitions may be found in Note 11, Commitments and Contingencies.

The operating results of the Company’s fiscal 2010 acquisition were included in the Company’s results of operations from the effective acquisition date.  The amount of net sales and earnings of the 2010 acquisition included in the Condensed Consolidated Statements of Operations is not material.  The following table presents unaudited pro forma financial information as if the fiscal 2010 acquisition had occurred as of November 1, 2008 for purposes of the information presented for the nine and three months ended July 31, 2009.  Had the fiscal 2010 acquisition been consummated as of November 1, 2009, net sales, net income from consolidated operations, net income attributable to HEICO, and basic and diluted net income per share attributable to HEICO shareholders on a pro forma basis for the nine and three months ended July 31, 2010 would not have been materially different than the reported amounts.  The pro forma financial information is presented for comparative purposes only and is not necessarily indicative of the results of operations that actually would have been achieved if the acquisition had taken place as of November 1, 2008.  The unaudited pro forma financial information includes adjustments to historical amounts such as additional amortization expense related to intangible assets acquired and increased interest expense associated with borrowings to finance the acquisition.

	Nine months ended		Three months ended
	July 31, 2009		July 31, 2009
Net sales	$	412,717,000	$	139,023,000
Net income from consolidated operations	$	45,882,000	$	14,969,000
Net income attributable to HEICO	$	34,307,000	$	11,183,000
Net income per share attributable
to HEICO shareholders:
Basic	$	1.05	$	.34
Diluted	$	1.01	$	.33

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3.      SELECTED FINANCIAL STATEMENT INFORMATION

Accounts Receivable

	July 31, 2010			October 31, 2009
Accounts receivable	$	86,962,000		$	80,399,000
Less:  Allowance for doubtful accounts		(2,884,000	)		(2,535,000	)
Accounts receivable, net	$	84,078,000		$	77,864,000

Costs and Estimated Earnings on Uncompleted Percentage-of-Completion Contracts

	July 31, 2010			October 31, 2009
Costs incurred on uncompleted contracts	$	4,548,000		$	10,280,000
Estimated earnings		5,480,000			8,070,000
		10,028,000			18,350,000
Less:  Billings to date		(7,251,000	)		(12,543,000	)
	$	2,777,000		$	5,807,000
Included in the accompanying Condensed Consolidated
Balance Sheets under the following captions:
Accounts receivable, net (costs and estimated
earnings in excess of billings)	$	2,958,000		$	5,832,000
Accrued expenses and other current liabilities
(billings in excess of costs and estimated earnings)		(181,000	)		(25,000	)
	$	2,777,000		$	5,807,000

Changes in estimates did not have a material effect on net income from consolidated operations for the nine months ended July 31, 2010 and 2009.

Inventories

	July 31, 2010		October 31, 2009
Finished products	$	74,609,000	$	79,665,000
Work in process		18,814,000		14,279,000
Materials, parts, assemblies and supplies		47,289,000		43,641,000
Inventories, net	$	140,712,000	$	137,585,000

Inventories related to long-term contracts were not significant as of July 31, 2010 and October 31, 2009.

Property, Plant and Equipment

	July 31, 2010			October 31, 2009
Land	$	3,656,000		$	3,656,000
Buildings and improvements		38,750,000			38,091,000
Machinery, equipment and tooling		86,276,000			80,697,000
Construction in progress		6,028,000			5,331,000
		134,710,000			127,775,000
Less:  Accumulated depreciation and amortization		(74,907,000	)		(67,247,000	)
Property, plant and equipment, net	$	59,803,000		$	60,528,000

10

Accrued Customer Rebates and Credits

The aggregate amount of accrued customer rebates and credits included within accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheets was $7,692,000 and $9,689,000 as of July 31, 2010 and October 31, 2009, respectively. The total customer rebates and credits deducted within net sales for the nine months ended July 31, 2010 and 2009 was $6,642,000 and $6,757,000 respectively.  The total customer rebates and credits deducted within net sales for the three months ended July 31, 2010 and 2009 was $2,244,000 and $2,023,000 respectively.

4.      GOODWILL AND OTHER INTANGIBLE ASSETS

The Company has two operating segments: the Flight Support Group (“FSG”) and the Electronic Technologies Group (“ETG”).  Changes in the carrying amount of goodwill by operating segment for the nine months ended July 31, 2010 are as follows:

	Segment				Consolidated
	FSG		ETG		Totals
Balances as of October 31, 2009	$	188,459,000	$	176,784,000	$	365,243,000
Acquired goodwill		¾		12,920,000		12,920,000
Adjustments to goodwill		¾		1,960,000		1,960,000
Foreign currency translation adjustment		¾		586,000		586,000
Balances as of July 31, 2010	$	188,459,000	$	192,250,000	$	380,709,000

The goodwill acquired pertains to a current year acquisition and represents the residual value after the allocation of the total consideration to the tangible and identifiable intangible assets acquired and liabilities assumed (inclusive of contingent consideration).  The adjustments to goodwill principally represent additional purchase consideration paid relating to prior year acquisitions for which the earnings objectives were met in fiscal 2010.  See Note 2, Acquisitions, for additional information regarding the fiscal 2010 acquisition and additional purchase consideration.  The foreign currency translation adjustment reflects unrealized translation gains on the goodwill recognized in connection with a foreign subsidiary.

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Identifiable intangible assets consist of the following:

	As of July 31, 2010							As of October 31, 2009
	Gross					Net		Gross					Net
	Carrying		Accumulated			Carrying		Carrying		Accumulated			Carrying
	Amount		Amortization			Amount		Amount		Amortization			Amount
Amortizing Assets:
Customer relationships	$	41,759,000	$	(14,360,000	)	$	27,399,000	$	33,237,000	$	(9,944,000	)	$	23,293,000
Intellectual property		7,303,000		(1,247,000	)		6,056,000		3,369,000		(628,000	)		2,741,000
Licenses		1,000,000		(603,000	)		397,000		1,000,000		(547,000	)		453,000
Non-compete agreements		1,166,000		(991,000	)		175,000		1,221,000		(969,000	)		252,000
Patents		558,000		(261,000	)		297,000		575,000		(246,000	)		329,000
Trade names		569,000		(84,000	)		485,000		569,000		¾			569,000
		52,355,000		(17,546,000	)		34,809,000		39,971,000		(12,334,000	)		27,637,000
Non-Amortizing Assets:
Trade names		17,140,000		¾			17,140,000		13,951,000		¾			13,951,000
	$	69,495,000	$	(17,546,000	)	$	51,949,000	$	53,922,000	$	(12,334,000	)	$	41,588,000

The increase in the gross carrying amount of customer relationships, intellectual property and non-amortizing trade names as of July 31, 2010 compared to October 31, 2009 principally relates to such intangible assets recognized in connection with an acquisition made during the second quarter of fiscal 2010 (see Note 2, Acquisitions).  The weighted average amortization period of the customer relationships and intellectual property acquired during fiscal 2010 is eight years.  Based on the final purchase price allocations during the allocation period for certain fiscal 2009 acquisitions, the weighted average amortization period of the customer relationships and intellectual property acquired in fiscal 2009 is now eight years and seven years, respectively.

Amortization expense related to intangible assets for the nine months ended July 31, 2010 and 2009 was $5,446,000 and $3,148,000, respectively.  Amortization expense related to intangible assets for the three months ended July 31, 2010 and 2009 was $1,976,000 and $1,336,000, respectively.  Amortization expense related to intangible assets for the fiscal year ending October 31, 2010 is estimated to be $6,795,000.  Amortization expense for each of the next five fiscal years and thereafter is estimated to be $6,327,000 in fiscal 2011, $5,621,000 in fiscal 2012, $5,161,000 in fiscal 2013, $4,864,000 in fiscal 2014, $3,739,000 in fiscal 2015 and $7,748,000 thereafter.

5.      LONG-TERM DEBT

Long-term debt consists of the following:

	July 31, 2010			October 31, 2009
Borrowings under revolving credit facility	$	47,000,000		$	55,000,000
Notes payable, capital leases and equipment loans		292,000			431,000
		47,292,000			55,431,000
Less: Current maturities of long-term debt		(199,000	)		(237,000	)
	$	47,093,000		$	55,194,000

As of July 31, 2010 and October 31, 2009, the weighted average interest rate of borrowings under the Company’s $300 million revolving credit facility was 1.0% and .9%, respectively.  The revolving credit facility contains both financial and non-financial covenants.  As of July 31, 2010, the Company was in compliance with all such covenants.

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6.      INCOME TAXES

As of July 31, 2010, the Company’s liability for gross unrecognized tax benefits related to uncertain tax positions was $2,596,000 of which $2,058,000 would decrease the Company’s income tax expense and effective income tax rate if the tax benefits were recognized.  A reconciliation of the activity related to the liability for gross unrecognized tax benefits for the nine months ended July 31, 2010 is as follows:

Balance as of October 31, 2009	$	3,328,000
Decreases related to prior year tax positions		(837,000	)
Increases related to current year tax positions		393,000
Lapse of statutes of limitations		(288,000	)
Balance as of July 31, 2010	$	2,596,000

The $732,000 net decrease in the liability for gross unrecognized tax benefits was principally related to the finalization of a study of qualifying research and development activities used to prepare the Company’s fiscal 2009 U.S. federal and state income tax returns.  The decrease in the liability reduced the Company’s income tax expense by $801,000.

The accrual of interest and penalties related to the unrecognized tax benefits was not material for the nine months ended July 31, 2010.  Further, the Company does not expect the total amount of unrecognized tax benefits to materially change in the next twelve months.

7.      FAIR VALUE MEASUREMENTS

The Company performs its fair value measurements according to accounting guidance that defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  The guidance also establishes a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  An asset or liability’s level is based on the lowest level of input that is significant to the fair value measurement.  The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

Level 1 — Quoted prices in active markets for identical assets or liabilities;

Level 2 — Inputs, other than quoted prices included within Level 1, that are observable for the asset or liability either directly or indirectly; or

Level 3 — Unobservable inputs for the asset or liability where there is little or no market data, requiring management to develop its own assumptions.

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The following tables set forth by level within the fair value hierarchy, the Company’s assets and liabilities that were measured at fair value on a recurring basis:

	As of July 31, 2010
	Level 1		Level 2		Level 3		Total
Assets:
Deferred compensation plans:
Corporate owned life insurance	$	—	$	20,672,000	$	—	$	20,672,000
Equity securities		964,000		—		—		964,000
Mutual funds		961,000		—		—		961,000
Money market funds and cash		832,000		—		—		832,000
Other		—		525,000		—		525,000
Total assets	$	2,757,000	$	21,197,000	$	—	$	23,954,000
Liabilities:
Contingent consideration	$	—	$	—	$	1,150,000	$	1,150,000

	As of October 31, 2009
	Level 1		Level 2		Level 3		Total
Assets:
Deferred compensation plans:
Corporate owned life insurance	$	—	$	15,687,000	$	—	$	15,687,000
Equity securities		1,057,000		—		—		1,057,000
Mutual funds		614,000		—		—		614,000
Money market funds and cash		2,163,000		—		—		2,163,000
Other		—		243,000		—		243,000
Total assets	$	3,834,000	$	15,930,000	$	—	$	19,764,000
Liabilities		—		—		—		—

The Company maintains two non-qualified deferred compensation plans.  The assets of the HEICO Corporation Leadership Compensation Plan (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.  Certain other assets of the LCP represent investments in HEICO common stock and are classified within Level 1.  The assets of the Company’s other deferred compensation plan are principally invested in a life insurance policy that is classified within Level 2 and equity securities, mutual funds and money market funds that are classified within Level 1.  The assets of both plans are held within irrevocable trusts and classified within other assets in the Company’s Condensed Consolidated Balance Sheets.  The related liabilities of the two deferred compensation plans are included within other long-term liabilities in the Company’s Condensed Consolidated Balance Sheets and have an aggregate value of $23,667,000 as of July 31, 2010 and $19,505,000 as of October 31, 2009.

As part of the agreement to acquire a subsidiary by the ETG in the second quarter of fiscal 2010, the Company may be obligated to pay contingent consideration of up to $2.0 million in fiscal 2013 should the acquired entity meet certain earnings objectives during the second and third years following the acquisition.  The $1,150,000 fair value of the contingent consideration

14

as of the acquisition date was determined using a discounted cash flow model and probability adjusted internal estimates of the subsidiary’s future earnings and is classified in Level 3.  There have been no subsequent changes in the fair value of this contingent consideration as of July 31, 2010 and this obligation is included in other long-term liabilities in the Company’s Condensed Consolidated Balance Sheet.  Changes in the fair value of contingent consideration will be recorded in the Company’s condensed consolidated statements of operations.

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 July 31, 2010 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.

8.      RESEARCH AND DEVELOPMENT EXPENSES

Cost of sales for the nine months ended July 31, 2010 and 2009 includes approximately $16.5 million and $14.8 million, respectively, of new product research and development expenses.  Cost of sales for the three months ended July 31, 2010 and 2009 includes approximately $6.0 million and $5.1 million, respectively, of new product research and development expenses.

9.      NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS

The computation of basic and diluted net income per share attributable to HEICO shareholders is as follows:

	Nine months ended July 31,				Three months ended July 31,
	2010		2009		2010		2009
Numerator:
Net income attributable to HEICO	$	39,296,000	$	32,990,000	$	14,930,000	$	11,132,000
Denominator:
Weighted average common shares outstanding-basic		32,793,137		32,799,101		32,917,530		32,603,643
Effect of dilutive stock options		960,277		1,017,879		879,941		1,029,220
Weighted average common shares outstanding-diluted		33,753,414		33,816,980		33,797,471		33,632,863
Net income per share attributable to HEICO shareholders:
Basic	$	1.20	$	1.01	$	.45	$	.34
Diluted	$	1.16	$	.98	$	.44	$	.33
Anti-dilutive stock options excluded		432,292		3,193		431,250		9,579

No portion of the adjustments to the redemption amount of redeemable noncontrolling interests of ($39,000) and $272,000 for the nine months and three months ended July 31, 2010, respectively, reflect a redemption amount in excess of fair value and therefore no portion of the adjustments affect basic or diluted net income per share attributable to HEICO shareholders.

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10.           OPERATING SEGMENTS

Information on the Company’s two operating segments, the Flight Support Group (“FSG”), consisting of HEICO Aerospace Holdings Corp. and its subsidiaries, and the Electronic Technologies Group (“ETG”), consisting of HEICO Electronic Technologies Corp. and its subsidiaries, for the nine months and three months ended July 31, 2010 and 2009, respectively, is as follows:

					Other,
					Primarily
	Segment				Corporate and			Consolidated
	FSG		ETG		Intersegment			Totals
For the nine months ended July 31, 2010:
Net sales	$	301,145,000	$	147,231,000	$	(726,000	)	$	447,650,000
Depreciation and amortization		7,467,000		5,817,000		294,000			13,578,000
Operating income		50,332,000		39,961,000		(10,799,000	)		79,494,000
Capital expenditures		5,513,000		1,214,000		16,000			6,743,000
For the nine months ended July 31, 2009:
Net sales	$	297,543,000	$	97,523,000	$	(377,000	)	$	394,689,000
Depreciation and amortization		7,330,000		3,287,000		334,000			10,951,000
Operating income		46,297,000		26,508,000		(8,611,000	)		64,194,000
Capital expenditures		6,644,000		1,075,000		65,000			7,784,000
For the three months ended July 31, 2010:
Net sales	$	104,323,000	$	54,107,000	$	(160,000	)	$	158,270,000
Depreciation and amortization		2,493,000		2,111,000		96,000			4,700,000
Operating income		17,557,000		15,198,000		(3,762,000	)		28,993,000
Capital expenditures		1,696,000		434,000		13,000			2,143,000
For the three months ended July 31, 2009:
Net sales	$	97,236,000	$	37,054,000	$	(204,000	)	$	134,086,000
Depreciation and amortization		2,521,000		1,409,000		113,000			4,043,000
Operating income		14,759,000		9,935,000		(3,272,000	)		21,422,000
Capital expenditures		1,867,000		466,000		54,000			2,387,000

Total assets by operating segment as of July 31, 2010 and October 31, 2009 are as follows:

					Other,
	Segment				Primarily		Consolidated
	FSG		ETG		Corporate		Totals
Total assets as of July 31, 2010	$	413,551,000	$	324,822,000	$	39,666,000	$	778,039,000
Total assets as of October 31, 2009		414,030,000		285,602,000		33,278,000		732,910,000

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11.           COMMITMENTS AND CONTINGENCIES

Guarantees

The Company has arranged for a standby letter of credit for $1.5 million to meet the security requirement of its insurance company for potential workers’ compensation claims, which is supported by the Company’s revolving credit facility.

Product Warranty

Changes in the Company’s product warranty liability for the nine months ended July 31, 2010 and 2009, respectively, are as follows:

	Nine months ended July 31,
	2010			2009
Balances as of beginning of fiscal year	$	1,022,000		$	671,000
Accruals for warranties		1,251,000			1,163,000
Warranty claims settled		(855,000	)		(645,000	)
Acquired warranty liabilities		80,000			—
Balances as of July 31	$	1,498,000		$	1,189,000

Additional Contingent Purchase Consideration

As part of the agreement to acquire a subsidiary by the ETG in fiscal 2007, the Company may be obligated to pay additional purchase consideration of up to 73 million Canadian dollars in aggregate, which translates to approximately $71 million U.S. dollars based on the July 31, 2010 exchange rate, should the subsidiary meet certain earnings objectives through fiscal 2012.

As part of the agreement to acquire a subsidiary by the ETG in fiscal 2009, the Company may be obligated to pay additional purchase consideration of up to approximately $1.3 million in fiscal 2011 and $10.1 million in fiscal 2012 should the subsidiary meet certain earnings objectives during the second and third years, respectively, following the acquisition.

As part of the agreement to acquire a subsidiary by the ETG in fiscal 2009, the Company may be obligated to pay additional purchase consideration of up to approximately $11.7 million should the subsidiary meet certain earnings objectives during the first two years following the acquisition.

The above referenced additional contingent purchase consideration will be accrued when the earnings objectives are met.  Such additional contingent purchase consideration is based on a multiple of earnings above a threshold (subject to a cap in certain cases) and is not contingent upon the former shareholders of the acquired entities remaining employed by the Company or providing future services to the Company.  Accordingly, such consideration will be recorded as an additional cost of the respective acquired entity when paid.  The aggregate maximum amount of such contingent purchase consideration that the Company could be required to pay is approximately $94 million payable over future periods beginning in fiscal 2011 through fiscal

17

2012.  Assuming the subsidiaries perform over their respective future measurement periods at the same earnings levels they have performed in the comparable historical measurement periods, the aggregate amount of such contingent purchase consideration that the Company would be required to pay is approximately $11 million.  The actual contingent purchase consideration will likely be different.

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.

12.           REDEEMABLE NONCONTROLLING INTERESTS

As further detailed in Note 15, Commitments and Contingencies, of the Notes to Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the year ended October 31, 2009, the holders of equity interests in certain of the Company’s subsidiaries have rights (“Put Rights”) that may be exercised on varying dates causing the Company to purchase their equity interests beginning in fiscal 2011 through fiscal 2018.  The Put Rights, all of which relate either to common shares or membership interests in limited liability companies, provide that the cash consideration to be paid for their equity interests (the “Redemption Amount”) be at fair value or at a formula that management intended to reasonably approximate fair value based solely on a multiple of future earnings over a measurement period.  As of July 31, 2010, management’s estimate of the aggregate Redemption Amount of all Put Rights that the Company would be required to pay is approximately $56 million.  The actual Redemption Amount will likely be different.  The portion of the estimated Redemption Amount as of July 31, 2010 redeemable at fair value is $25 million and the portion redeemable based solely on a multiple of future earnings is $31 million.  See Note 1, Summary of Significant Accounting Policies, for more information regarding how the Company accounts for its redeemable noncontrolling interests in accordance with new accounting guidance adopted as of the beginning of fiscal 2010 and the Condensed Consolidated Statements of Shareholders’ Equity and Comprehensive Income for a summary of changes in redeemable noncontrolling interests for the nine months ended July 31, 2010 and 2009.

In April 2010, the Company, through HEICO Electronic, acquired an additional 3.4% equity interest in one of its subsidiaries, which increased the Company’s ownership interest to 93.3%.  In May 2010, the Company, through its HEICO Aerospace Holdings Corp. subsidiary, acquired an additional 2.2% equity interest in one of its subsidiaries, which increased the Company’s ownership interest to 82.3%.  The purchase prices of the redeemable noncontrolling interests acquired were paid using cash provided by operating activities.  The acquisitions resulted in a decrease to redeemable noncontrolling interests and had no effect on HEICO shareholders’ equity.

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During the nine months ended July 31, 2009, the Company acquired certain redeemable noncontrolling interests and accounted for the transactions under the accounting guidance in effect at that time pertaining to step acquisitions.  The excess of the purchase price paid over the carrying amount was allocated principally to goodwill under such guidance.  As mentioned in Note 1, Summary of Significant Accounting Policies, the Condensed Consolidated Statement of Shareholders’ Equity and Comprehensive Income for the nine months ended July 31, 2009 is presented on a retrospective basis to reflect the adoption of new accounting guidance as of November 1, 2009 pertaining to redeemable noncontrolling interests, which resulted in an increase to redeemable noncontrolling interests and a decrease to retained earnings.  The subsequent acquisition of certain redeemable noncontrolling interests on a retrospective basis results in a reversal of any previously recorded decrease to retained earnings related to such redeemable noncontrolling interests recorded as part of the adoption of this new accounting guidance.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

This discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and notes thereto included herein.  The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ materially from those estimates if different assumptions were used or different events ultimately transpire.

Our critical accounting policies, which require management to make judgments about matters that are inherently uncertain, are described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended October 31, 2009.  One such critical accounting policy pertains to the valuation of our goodwill which we test for impairment annually as of October 31, or more frequently if events or changes in circumstances indicate that the carrying amount of goodwill may not be fully recoverable.  Based on the results of our annual goodwill impairment testing as of October 31, 2009, the fair value of each of our reporting units exceeded their carrying value.  No events or changes in circumstances have occurred since the last annual impairment test to indicate potential goodwill impairment.

Our business is comprised of two operating segments:  the Flight Support Group (“FSG”), consisting of HEICO Aerospace Holdings Corp. (“HEICO Aerospace”) and its subsidiaries, and the Electronic Technologies Group (“ETG”), consisting of HEICO Electronic Technologies Corp. (“HEICO Electronic”) and its subsidiaries.

Our results of operations for the nine months and three months ended July 31, 2010 have been affected by certain fiscal 2010 and 2009 acquisitions as further detailed in Note 2, Acquisitions, of the Notes to Condensed Consolidated Financial Statements of this quarterly report and of the Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended October 31, 2009.

All per share information has been adjusted retrospectively to reflect a 5-for-4 stock split effected in April 2010.  See Note 1, Summary of Significant Accounting Policies – Stock Split, of the Notes to Condensed Consolidated Financial Statements for additional information regarding this stock split.

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Results of Operations

The following table sets forth the results of our operations, net sales and operating income by segment and the percentage of net sales represented by the respective items in our Condensed Consolidated Statements of Operations.

	Nine months ended July 31,						Three months ended July 31,
	2010			2009			2010			2009
Net sales	$	447,650,000		$	394,689,000		$	158,270,000		$	134,086,000
Cost of sales		286,351,000			262,456,000			100,717,000			88,275,000
Selling, general and administrative expenses		81,805,000			68,039,000			28,560,000			24,389,000
Total operating costs and expenses		368,156,000			330,495,000			129,277,000			112,664,000
Operating income	$	79,494,000		$	64,194,000		$	28,993,000		$	21,422,000
Net sales by segment:
Flight Support Group	$	301,145,000		$	297,543,000		$	104,323,000		$	97,236,000
Electronic Technologies Group		147,231,000			97,523,000			54,107,000			37,054,000
Intersegment sales		(726,000	)		(377,000	)		(160,000	)		(204,000	)
	$	447,650,000		$	394,689,000		$	158,270,000		$	134,086,000
Operating income by segment:
Flight Support Group	$	50,332,000		$	46,297,000		$	17,557,000		$	14,759,000
Electronic Technologies Group		39,961,000			26,508,000			15,198,000			9,935,000
Other, primarily corporate		(10,799,000	)		(8,611,000	)		(3,762,000	)		(3,272,000	)
	$	79,494,000		$	64,194,000		$	28,993,000		$	21,422,000
Net sales		100.0	%		100.0	%		100.0	%		100.0	%
Gross profit		36.0	%		33.5	%		36.4	%		34.2	%
Selling, general and administrative expenses		18.3	%		17.2	%		18.0	%		18.2	%
Operating income		17.8	%		16.3	%		18.3	%		16.0	%
Interest expense		.1	%		.1	%		.1	%		.1	%
Other income (expense)		.1	%		—			—			.1	%
Income tax expense		6.0	%		4.9	%		5.9	%		4.9	%
Net income attributable to noncontrolling
interests		2.9	%		2.9	%		2.9	%		2.8	%
Net income attributable to HEICO		8.8	%		8.4	%		9.4	%		8.3	%

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Comparison of First Nine Months of Fiscal 2010 to First Nine Months of Fiscal 2009

Net Sales

Net sales for the first nine months of fiscal 2010 increased by 13.4% to a record $447.7 million, as compared to net sales of $394.7 million for the first nine months of fiscal 2009.  The increase in net sales reflects an increase of $49.7 million (a 51.0% increase) to a record $147.2 million in net sales within the ETG and an increase of $3.6 million (a 1.2% increase) to $301.1 million in net sales within the FSG.  The net sales increase in the ETG reflects the additional net sales totaling approximately $31 million contributed by a February 2010 acquisition and two fiscal 2009 acquisitions as well as organic growth of approximately 14%.  The organic growth in the ETG reflects continued strength in demand for certain of our medical equipment, electronic, satellite and defense products.  The net sales increase within the FSG, which is entirely organic growth, reflects higher net sales of our industrial products, partially offset by lower net sales of our other FSG products and services for which demand has been lower principally as a result of reduced airline capacity.

Gross Profit and Operating Expenses

Our consolidated gross profit margin increased to 36.0% for the first nine months of fiscal 2010 as compared to 33.5% for the first nine months of fiscal 2009, mainly reflecting higher margins within the FSG principally due to a more favorable product sales mix.  Consolidated cost of sales for the first nine months of fiscal 2010 and 2009 includes approximately $16.5 million and $14.8 million, respectively, of new product research and development expenses.

Selling, general and administrative (“SG&A”) expenses were $81.8 million and $68.0 million for the first nine months of fiscal 2010 and fiscal 2009, respectively.  The increase in SG&A expenses was mainly due to the operating costs of the fiscal 2010 and fiscal 2009 acquisitions referenced above, and higher operating costs, principally personnel related, associated with the growth in consolidated net sales.  SG&A expenses as a percentage of net sales increased from 17.2% for the first nine months of fiscal 2009 to 18.3% for the first nine months of fiscal 2010 reflecting an increase in amortization expense of intangible assets associated with the recent acquisitions and a higher level of accrued performance awards based on the improved consolidated operating results.

Operating Income

Operating income for the first nine months of fiscal 2010 increased by 23.8% to a record $79.5 million as compared to operating income of $64.2 million for the first nine months of fiscal 2009.  The increase in operating income reflects a $13.5 million increase (a 50.8% increase) to a record $40.0 million in operating income of the ETG in the first nine months of fiscal 2010, up from $26.5 million for the first nine months of fiscal 2009 and a $4.0 million increase (a 8.7% increase) in operating income of the FSG to $50.3 million for the first nine months of fiscal 2010, up from $46.3 million for the first nine months of fiscal 2009, partially offset by a $2.2 million increase in corporate expenses.  The increase in operating income for the

22

ETG in the first nine months of fiscal 2010 reflects the impact of the fiscal 2010 and 2009 acquisitions and organic sales growth.  The increase in operating income for the FSG in the first nine months of fiscal 2010 reflects the aforementioned higher gross profit margins.  The increase in corporate expenses for the first nine months of fiscal 2010 is primarily due to the higher level of accrued performance awards discussed previously.

As a percentage of net sales, our consolidated operating income increased to 17.8% for the first nine months of fiscal 2010, up from 16.3% for the first nine months of fiscal 2009.  The increase in consolidated operating income as a percentage of net sales reflects an increase in the FSG’s operating income as a percentage of net sales to 16.7% in the first nine months of fiscal 2010 from 15.6% in the first nine months of fiscal 2009 resulting primarily from the favorable product mix previously referenced.  The ETG’s operating income as a percentage of net sales was 27.1% in the first nine months of fiscal 2010, approximating the 27.2% reported in the first nine months of fiscal 2009.

Interest Expense

Interest expense in the first nine months of fiscal 2010 and 2009 was not material.

Other Income

Other income in the first nine months of fiscal 2010 and 2009 was not material.

Income Tax Expense

Our effective tax rate for the first nine months of fiscal 2010 increased to 34.0% from 30.3% for the first nine months of fiscal 2009.  The effective tax rate for the first nine months of fiscal 2009 was lower due to a settlement reached with the Internal Revenue Service (“IRS”) pertaining to the income tax credit claimed on HEICO’s U.S. federal filings for qualified research and development activities incurred for fiscal years 2002 through 2005 and a resulting reduction to the related liability for unrecognized tax benefits for fiscal years 2006 through 2008 based on new information obtained during the examination.  In addition, the effective tax rate for the first nine months of fiscal 2010 was higher as it reflects a credit for qualifying research and development activities for only two months as the underlying provision of the IRS tax code expired in December 2009 and was higher due to an increased effective state income tax rate principally as a result of the previously mentioned fiscal 2010 and 2009 acquisitions.

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests relates to the 20% noncontrolling interest held in the FSG and the noncontrolling interests held in certain subsidiaries of the FSG and ETG.  The increase in net income attributable to noncontrolling interests for the first nine months of fiscal 2010 compared to the first nine months of fiscal 2009 is related to higher earnings of certain ETG and FSG subsidiaries in which noncontrolling interests exist.

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Net Income Attributable to HEICO

Net income attributable to HEICO was a record $39.3 million, or $1.16 per diluted share, for the first nine months of fiscal 2010 compared to $33.0 million, or $.98 per diluted share, for the first nine months of fiscal 2009 reflecting the increased operating income referenced above.  Diluted net income per share attributable to HEICO shareholders in the first nine months of fiscal 2009 included a $.04 per diluted share benefit from the aforementioned favorable IRS settlement.

Comparison of Third Quarter of Fiscal 2010 to Third Quarter of Fiscal 2009

Net Sales

Net sales for the third quarter of fiscal 2010 increased by 18.0% to a record $158.3 million, as compared to net sales of $134.1 million for the third quarter of fiscal 2009.  The increase in net sales reflects an increase of $17.1 million (a 46.0% increase) to a record $54.1 million in net sales within the ETG in addition to an increase of $7.1 million (a 7.3% increase) to $104.3 million in net sales within the FSG.  The net sales increase in the ETG reflects organic growth of approximately 22% as well as additional net sales totaling approximately $7 million contributed by a February 2010 acquisition and an October fiscal 2009 acquisition.  The organic growth in the ETG reflects continued strength in demand for certain of our medical equipment, electronic, satellite and defense products.  The net sales increase within the FSG, which is entirely organic growth, principally reflects an increase in net sales to our commercial aviation customers and higher net sales of our industrial products.

Gross Profit and Operating Expenses

Our consolidated gross profit margin increased to 36.4% for the third quarter of fiscal 2010 as compared to 34.2% for the third quarter of fiscal 2009, mainly reflecting higher margins within the FSG principally due to a more favorable product sales mix.  Consolidated cost of sales for the third quarter of fiscal 2010 and 2009 includes approximately $6.0 million and $5.1 million, respectively, of new product research and development expenses.

SG&A expenses were $28.6 million and $24.4 million for the third quarter of fiscal 2010 and fiscal 2009, respectively.  The increase in SG&A expenses was mainly due to the operating costs of the fiscal 2010 acquisition and the fiscal 2009 acquisition referenced above, and higher operating costs, principally personnel related, associated with the growth in consolidated net sales.  SG&A expenses as a percentage of net sales decreased slightly to 18.0% for the third quarter of fiscal 2010 from 18.2% for the third quarter of fiscal 2009 reflecting the benefit of higher net sales on the portion of SG&A expenses that are fixed costs, partially offset by an increase in amortization expense of intangible assets associated with the recent acquisitions and the higher level of accrued performance awards.

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Operating Income

Operating income for the third quarter of fiscal 2010 increased by 35.3% to a record $29.0 million as compared to operating income of $21.4 million for the third quarter of fiscal 2009.  The increase in operating income reflects a $5.3 million increase (a 53.0% increase) to a record $15.2 million in operating income of the ETG in the third quarter of fiscal 2010, up from $9.9 million for the third quarter of fiscal 2009 and a $2.8 million increase (a 19.0% increase) in operating income of the FSG to $17.6 million for the third quarter of fiscal 2010, up from $14.8 million for the third quarter of fiscal 2009, partially offset by a $.5 million increase in corporate expenses.  The increase in operating income for the ETG in the third quarter of fiscal 2010 is primarily due to the organic sales growth, as well as the impact of the fiscal 2010 and 2009 acquisitions.  The increase in operating income for the FSG in the third quarter of fiscal 2010 reflects the aforementioned higher gross profit margins.  The increase in corporate expenses for the third quarter of fiscal 2010 is primarily due to the higher level of accrued performance awards discussed previously.

As a percentage of net sales, our consolidated operating income increased to 18.3% for the third quarter of fiscal 2010, up from 16.0% for the third quarter of fiscal 2009.  The FSG’s operating income as a percentage of net sales increased to 16.8% in the third quarter of fiscal 2010, up from 15.2% in the third quarter of fiscal 2009 resulting primarily from the favorable product mix previously referenced.  The ETG’s operating income as a percentage of net sales increased to 28.1% in the third quarter of fiscal 2010, up from 26.8% in the third quarter of fiscal 2009 primarily due to the higher net sales and a favorable product sales mix.

Interest Expense

Interest expense in the third quarter of fiscal 2010 and 2009 was not material.

Other Income

Other income in the third quarter of fiscal 2010 and 2009 was not material.

Income Tax Expense

Our effective tax rate for the third quarter of fiscal 2010 increased to 32.3% from 30.4% for the third quarter of fiscal 2009.  The increase principally reflects the expiration of an income tax credit for qualified research and development activities as of December 2009.  Our effective tax rate of 32.3% for the third quarter of fiscal 2010 is less than the effective tax rate of 35.0% experienced in the first half of fiscal 2010 as the third quarter includes a $732,000 decrease in the liability for unrecognized tax benefits that principally relates to the finalization of a study of fiscal 2009 qualified research and development activities as further explained in Note 6, Income Taxes, of the Notes to Condensed Consolidated Financial Statements.

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Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests relates to the 20% noncontrolling interest held in the FSG and the noncontrolling interests held in certain subsidiaries of the FSG and ETG.  The increase in net income attributable to noncontrolling interests for the third quarter of fiscal 2010 compared to the third quarter of fiscal 2009 is principally related to higher earnings of certain FSG and ETG subsidiaries in which noncontrolling interests exist and higher earnings of the FSG.

Net Income Attributable to HEICO

Net income attributable to HEICO was a record $14.9 million, or $.44 per diluted share, for the third quarter of fiscal 2010 compared to $11.1 million, or $.33 per diluted share, for the third quarter of fiscal 2009 reflecting the increased operating income referenced above.

Outlook

As we look forward to the balance of fiscal 2010 and beyond, we are seeing some signs of improved product demand within our commercial aviation markets, which represent over 60% of our consolidated net sales.  To date, the strengthening has been moderate, but appears sustainable into fiscal 2011.  Based on current market conditions within our aviation and other major markets, we are raising our fiscal 2010 net sales target to approximately 11% over fiscal 2009 and raising our net income per diluted share target to a range of 14% - 16% over fiscal 2009.  We expect fiscal 2010 cash flow provided by operating activities to grow approximately 3% - 8% over fiscal 2009.

Liquidity and Capital Resources

Our principal uses of cash include acquisitions, payments of principal and interest on debt, capital expenditures, distributions to noncontrolling interests, cash dividends and increases in working capital.

We finance our activities primarily from our operating activities and financing activities, including borrowings under our revolving credit facility.  As of July 31, 2010, our net debt to shareholders’ equity ratio was 6.8%, with net debt (total debt less cash and cash equivalents) of $36.3 million.  We have no significant debt maturities until fiscal 2013.

Based on our current outlook, we believe that our net cash provided by operating activities and available borrowings under our revolving credit facility will be sufficient to fund cash requirements for the foreseeable future.

Operating Activities

Net cash provided by operating activities was $67.9 million for the first nine months of fiscal 2010 and consisted primarily of net income from consolidated operations of $52.5 million and depreciation and amortization of $13.6 million (a non-cash item).  Net cash provided by operating activities increased $24.2 million from $43.7 million in the first nine months of fiscal

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2009 due to higher net income from consolidated operations after adding back depreciation and amortization, controlling our inventory levels in the first nine months of fiscal 2010 and the lower accrual for performance based awards in fiscal 2009 coupled with the payment that year of such awards accrued in fiscal 2008, partially offset by increased accounts receivable related to the higher net sales in fiscal 2010 compared to fiscal 2009 and the timing of cash collections.

Investing Activities

Net cash used in investing activities of $45.8 million during the first nine months of fiscal 2010 related primarily to acquisitions of $39.1 million and capital expenditures totaling $6.7 million.  Cash invested in acquisitions principally represents the acquisition by the ETG of a subsidiary in the second quarter and additional purchase consideration paid pursuant to the terms of the purchase agreements associated with the current year and certain prior year acquisitions.  See Note 2, Acquisitions, of the Notes to Condensed Consolidated Financial Statements for further details.

Financing Activities

Net cash used in financing activities of $18.3 million during the first nine months of fiscal 2010 related primarily to net payments on our revolving credit facility of $8.0 million, distributions to noncontrolling interests of $7.2 million, the payment of $3.6 million in cash dividends on our common stock, and $.8 million in acquisitions of noncontrolling interests, partially offset by proceeds from stock option exercises of $1.5 million.

Contractual Obligations

There have not been any material changes to the amounts presented in the table of contractual obligations that was included in our Annual Report on Form 10-K for the year ended October 31, 2009.

See “New Accounting Pronouncements” below for additional information pertaining to our redeemable noncontrolling interests.

See “Off-Balance Sheet Arrangements – Acquisitions – Additional Contingent Purchase Consideration” below for additional information pertaining to any additional contingent purchase consideration we may be obligated to pay based on future earnings of certain acquired businesses.

Off-Balance Sheet Arrangements

Guarantees

We have arranged for a standby letter of credit for $1.5 million to meet the security requirement of our insurance company for potential workers’ compensation claims, which is supported by our revolving credit facility.

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Acquisitions – Additional Contingent Purchase Consideration

As part of the agreement to acquire a subsidiary by the ETG in fiscal 2007, we may be obligated to pay additional purchase consideration of up to 73 million Canadian dollars in aggregate, which translates to approximately $71 million U.S. dollars based on the July 31, 2010 exchange rate, should the subsidiary meet certain earnings objectives through fiscal 2012.

As part of the agreement to acquire a subsidiary by the ETG in fiscal 2009, we may be obligated to pay additional consideration of up to approximately $1.3 million in fiscal 2011 and $10.1 million in fiscal 2012 should the subsidiary meet certain earnings objectives during the second and third years, respectively, following the acquisition.

As part of the agreement to acquire a subsidiary by the ETG in fiscal 2009, we may be obligated to pay additional purchase consideration of up to approximately $11.7 million should the subsidiary meet certain earnings objectives during the first two years following the acquisition.

The above referenced additional contingent purchase consideration will be accrued when the earnings objectives are met.  Such additional contingent purchase consideration is based on a multiple of earnings above a threshold (subject to a cap in certain cases) and is not contingent upon the former shareholders of the acquired entities remaining employed by us or providing future services to us.  Accordingly, such consideration will be recorded as an additional cost of the respective acquired entity when paid.  The aggregate maximum amount of such contingent purchase consideration that we could be required to pay is approximately $94 million payable over future periods beginning in fiscal 2011 through fiscal 2012.  Assuming the subsidiaries perform over their respective future measurement periods at the same earnings levels they have performed in the comparable historical measurement periods, the aggregate amount of such contingent purchase consideration that we would be required to pay is approximately $11 million.  The actual contingent purchase consideration will likely be different.

New Accounting Pronouncements

Effective November 1, 2009, we adopted new accounting guidance that requires the recognition of certain noncontrolling interests (previously referred to as minority interests) as a separate component within equity in the consolidated balance sheet.  It also requires the amount of consolidated net income attributable to the parent and the noncontrolling interests be clearly identified and presented within the consolidated statement of operations.  The adoption of this new guidance has affected the presentation of noncontrolling interests in our condensed consolidated financial statements on a retrospective basis.  For example, under this guidance, “Net income from consolidated operations” is comparable to what was previously presented as “Income before minority interests” and “Net income attributable to HEICO” is comparable to what was previously presented as “Net income.”  Further, acquisitions of noncontrolling interests are considered a financing activity under the new accounting guidance and are no longer presented as an investing activity.

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Effective November 1, 2009, we also adopted new accounting guidance that affects the financial statement classification and measurement of redeemable noncontrolling interests.  As further detailed in Note 15, Commitments and Contingencies, of the Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended October 31, 2009, the holders of equity interests in certain of our subsidiaries have rights (“Put Rights”) that require us to provide cash consideration for their equity interests (the “Redemption Amount”) at fair value or at a formula that management intended to reasonably approximate fair value based solely on a multiple of future earnings over a measurement period.  The Put Rights are embedded in the shares owned by the noncontrolling interest holders and are not freestanding.  Previously, we recorded such redeemable noncontrolling interests at historical cost plus an allocation of subsidiary earnings based on ownership interest, less dividends paid to the noncontrolling interest holders.  Effective November 1, 2009, we adjusted our redeemable noncontrolling interests in accordance with this new accounting guidance to the higher of their carrying cost or management’s estimate of the Redemption Amount with a corresponding decrease to retained earnings and classified such interests outside of permanent equity.  Under this guidance, subsequent adjustments to the carrying amount of redeemable noncontrolling interests to reflect any changes in the Redemption Amount at the end of each reporting period will be recorded in the same manner.  Such adjustments to Redemption Amounts based on fair value will have no effect on net income per share attributable to HEICO shareholders whereas the portion of periodic adjustments to the carrying amount of redeemable noncontrolling interests based solely on a multiple of future earnings that reflect a redemption amount in excess of fair value will effect net income per share attributable to HEICO shareholders under the two-class method.

As a result of adopting the new accounting guidance for noncontrolling interests and redeemable noncontrolling interests, we (i) reclassified approximately $78 million from temporary equity (previously labeled as “Minority interests in consolidated subsidiaries”) to permanent equity (labeled as “Noncontrolling interests”) pertaining to noncontrolling interests that do not contain a redemption feature; and (ii) renamed temporary equity as “Redeemable noncontrolling interests” and recorded an approximately $45 million increase to redeemable noncontrolling interests with a corresponding decrease to retained earnings in our Condensed Consolidated Balance Sheet.  The resulting $57 million of redeemable noncontrolling interests as of November 1, 2009 represents management’s estimate of the aggregate Redemption Amount of all Put Rights that we would be required to pay of which approximately $25 million is redeemable at fair value and approximately $32 million is redeemable based solely on a multiple of future earnings.  The actual Redemption Amount will likely be different.  See Note 12, Redeemable Noncontrolling Interests, for additional information.

In September 2006, the Financial Accounting Standards Board (“FASB”) issued new guidance which defines fair value, establishes a framework for measuring fair value, and requires expanded disclosures about fair value measurements.  In February 2008, the FASB issued additional guidance which delayed the effective date by one year for nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis.  These nonfinancial assets and liabilities include items such as goodwill, other intangible assets, and property, plant and equipment that are measured at fair value resulting from impairment, if deemed necessary.  We adopted the portions of the new guidance that were delayed on a prospective basis as of the beginning of fiscal 2010, or November 1, 2009.

29

The adoption did not have a material effect on our results of operations, financial position or cash flows.

In December 2007, the FASB issued new guidance for business combinations that retains the fundamental requirements of previous guidance that the acquisition method of accounting (formerly the “purchase accounting” method) be used for all business combinations and for an acquirer to be identified for each business combination.  However, the new guidance changes the approach of applying the acquisition method in a number of significant areas, including that acquisition costs will generally be expensed as incurred; noncontrolling interests will be valued at fair value as of the acquisition date; in-process research and development will be recorded at fair value as an indefinite-lived intangible asset as of the acquisition date; restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date; and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense.  Further, any contingent consideration will be recognized as a liability at fair value as of the acquisition date with subsequent fair value adjustments recorded in operations.  Contingent consideration was previously accounted for as an additional cost of the respective acquired entity when paid.  We adopted the new guidance on a prospective basis as of the beginning of fiscal 2010 for all business combinations consummated on or after November 1, 2009.  The adoption did not have a material effect on our results of operations, financial position or cash flows.

In January 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-06, “Improving Disclosures About Fair Value Measurements,” which requires new disclosures regarding transfers in and out of Level 1 and Level 2 fair value measurements and more detailed information of activity in Level 3 fair value measurements.  We adopted ASU 2010-06 as of the beginning of the second quarter of fiscal 2010, except the additional Level 3 disclosures, which are effective in fiscal years beginning after December 15, 2010, or as of fiscal 2012 for us.  The adoption did not have a material effect on our results of operations, financial position or cash flows.

Forward-Looking Statements

Certain statements in this report constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  All statements contained herein that are not clearly historical in nature may be forward-looking and the words “anticipate,” “believe,” “expect,” “estimate” and similar expressions are generally intended to identify forward-looking statements.  Any forward-looking statements contained herein, in press releases, written statements or other documents filed with the Securities and Exchange Commission or in communications and discussions with investors and analysts in the normal course of business through meetings, phone calls and conference calls, concerning our operations, economic performance and financial condition are subject to known and unknown risks, uncertainties and contingencies.  We have based these forward-looking statements on our current expectations and projections about future events.  All forward-looking statements involve risks and uncertainties, many of which are beyond our control, which may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements.  Also, forward-looking statements are based upon management’s estimates of fair values and of future

30

costs, using currently available information.  Therefore, actual results may differ materially from those expressed or implied in those statements.  Factors that could cause such differences include, but are not limited to:  lower demand for commercial air travel or airline fleet changes, which could cause lower demand for our goods and services; product specification costs and requirements, which could cause an increase to our costs to complete contracts; governmental and regulatory demands, export policies and restrictions, reductions in defense, space or homeland security spending by U.S. and/or foreign customers or competition from existing and new competitors, which could reduce our sales; HEICO’s ability to introduce new products and product pricing levels, which could reduce our sales or sales growth and; HEICO’s ability to make acquisitions and achieve operating synergies from acquired businesses, customer credit risk, interest rates and economic conditions within and outside of the aviation, defense, space, medical, telecommunication and electronic industries, which could negatively impact our costs and revenues.  We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have not been any material changes in our assessment of HEICO’s sensitivity to market risk that was disclosed in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the year ended October 31, 2009.

Item 4.    CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this quarterly report.  Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that HEICO’s disclosure controls and procedures are effective as of the end of the period covered by this quarterly report.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation referred to above that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II.  OTHER INFORMATION

Item 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During May 2010, we repurchased 8,434 shares of our Common Stock at an average price of $38.88 per share as settlement for employee taxes due pertaining to exercises of non-qualified stock options.  We made no repurchases of common stock under our existing share program during the third quarter of fiscal 2010 and the number of shares that may be repurchased is 1,280,928.

Item 6. EXHIBITS

Exhibit	Description
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer. *
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer. *
32.1	Section 1350 Certification of Chief Executive Officer. **
32.2	Section 1350 Certification of Chief Financial Officer. **
101.INS	XBRL Instance Document.**
101.SCH	XBRL Taxonomy Extension Schema Document.**
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.**
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.**
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document.**
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.**

* Filed herewith.

** Furnished herewith.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	HEICO CORPORATION
Date: September 1, 2010	By:	/s/ THOMAS S. IRWIN
		Thomas S. Irwin
		Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

33

EXHIBIT INDEX

Exhibit	Description
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer. *
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer. *
32.1	Section 1350 Certification of Chief Executive Officer. **
32.2	Section 1350 Certification of Chief Financial Officer. **
101.INS	XBRL Instance Document.**
101.SCH	XBRL Taxonomy Extension Schema Document.**
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.**
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.**
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document.**
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.**

EX-31.1

Exhibit 31.1

RULE 13a-14(a)/15d-14(a) CERTIFICATION

I, Laurans A. Mendelson, Chief Executive Officer of HEICO Corporation, certify that:

(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:

a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(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):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date   September 1, 2010	/s/ LAURANS A. MENDELSON
	Laurans A. Mendelson
	Chief Executive Officer

EX-31.2

Exhibit 31.2

RULE 13a-14(a)/15d-14(a) CERTIFICATION

I, Thomas S. Irwin, Chief Financial Officer of HEICO Corporation, certify that:

(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:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(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):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date   September 1, 2010	/s/ THOMAS S. IRWIN
	Thomas S. Irwin
	Chief Financial Officer

EX-32.1

Exhibit 32.1

SECTION 1350 CERTIFICATION

In connection with the Quarterly Report of HEICO Corporation (the “Company”) on Form 10-Q for the period ended July 31, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Laurans A. Mendelson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(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   September 1, 2010	/s/ LAURANS A. MENDELSON
	Laurans A. Mendelson
	Chief Executive Officer

EX-32.2

Exhibit 32.2

SECTION 1350 CERTIFICATION

In connection with the Quarterly Report of HEICO Corporation (the “Company”) on Form 10-Q for the period ended July 31, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas S. Irwin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(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   September 1, 2010	/s/ THOMAS S. IRWIN
	Thomas S. Irwin
	Chief Financial Officer