DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - $ / shares | 3 Months Ended | |
Jan. 31, 2022 | Feb. 23, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Shell Company | false | |
Local Phone Number | 987-4000 | |
Entity File Number | 001-04604 | |
City Area Code | 954 | |
Entity Interactive Data Current | Yes | |
Amendment Flag | false | |
Document Period End Date | Jan. 31, 2022 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Entity Current Reporting Status | Yes | |
Entity Information [Line Items] | ||
Entity Incorporation, State or Country Code | FL | |
Entity Registrant Name | HEICO CORPORATION | |
Address | 3000 Taft Street | |
Entity Address, City or Town | Hollywood | |
State | FL | |
Zip Code | 33021 | |
Entity Central Index Key | 0000046619 | |
Entity Tax Identification Number | 65-0341002 | |
Current Fiscal Year End Date | --10-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Heico Common Stock [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common Stock, $.01 par value per share | |
Security Exchange Name | NYSE | |
Trading Symbol | HEI | |
Entity Common Stock, Shares Outstanding | 54,481,570 | |
Entity Common Stock Par Value | $ 0.01 | |
Common Class A [Member] | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Class A Common Stock, $.01 par value per share | |
Security Exchange Name | NYSE | |
Trading Symbol | HEI.A | |
Entity Common Stock, Shares Outstanding | 81,393,925 | |
Entity Common Stock Par Value | $ 0.01 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED - USD ($) $ in Thousands | Jan. 31, 2022 | Oct. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 124,818 | $ 108,298 |
Accounts receivable, net | 227,828 | 244,919 |
Contract assets | 82,238 | 80,073 |
Inventories, net | 503,506 | 478,050 |
Prepaid expenses and other current assets | 36,172 | 26,045 |
Total current assets | 974,562 | 937,385 |
Property, plant and equipment, net | 194,604 | 193,638 |
Goodwill | 1,446,250 | 1,450,395 |
Intangible assets, net | 566,090 | 582,307 |
Other assets | 332,389 | 334,682 |
Total assets | 3,513,895 | 3,498,407 |
Current liabilities: | ||
Current maturities of long-term debt | 1,484 | 1,515 |
Trade accounts payable | 89,005 | 85,544 |
Accrued expenses and other current liabilities | 181,361 | 206,857 |
Income taxes payable | 2,030 | 964 |
Total current liabilities | 273,880 | 294,880 |
Long-term debt, net of current maturities | 235,650 | 234,983 |
Deferred income taxes | 40,243 | 40,761 |
Other long-term liabilities | 363,777 | 378,257 |
Total liabilities | 913,550 | 948,881 |
Commitments and contingencies | ||
Redeemable noncontrolling interests | 258,289 | 252,587 |
Shareholders' equity: | ||
Preferred Stock | 0 | 0 |
Additional Paid in Capital | 302,104 | 320,747 |
Deferred Compensation Obligation | 5,297 | 5,297 |
Common Stock Issued, Employee Stock Trust | (5,297) | (5,297) |
Accumulated Other Comprehensive Income (Loss), Net of Tax | (16,962) | (8,552) |
Retained Earnings (Accumulated Deficit) | 2,018,990 | 1,949,521 |
Total HEICO shareholders' equity | 2,305,491 | 2,263,071 |
Noncontrolling interests | 36,565 | 33,868 |
Total shareholders' equity | 2,342,056 | 2,296,939 |
Total liabilities and equity | 3,513,895 | 3,498,407 |
Heico Common Stock [Member] | ||
Shareholders' equity: | ||
Common Stock | 545 | 543 |
Class A Common Stock [Member] | ||
Shareholders' equity: | ||
Common Stock | $ 814 | $ 812 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED [PARENTHETICAL] - $ / shares shares in Thousands | Jan. 31, 2022 | Oct. 31, 2021 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 10,000 | 10,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Heico Common Stock [Member] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000 | 150,000 |
Common stock, shares issued | 54,482 | 54,264 |
Common stock, shares outstanding | 54,482 | 54,264 |
Class A Common Stock [Member] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000 | 150,000 |
Common stock, shares issued | 81,394 | 81,224 |
Common stock, shares outstanding | 81,394 | 81,224 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Net sales | $ 490,343 | $ 417,902 |
Operating costs and expenses: | ||
Cost of sales | 300,133 | 259,468 |
Selling, general and administrative expenses | 91,388 | 78,149 |
Total operating costs and expenses | 391,521 | 337,617 |
Operating income | 98,822 | 80,285 |
Interest expense | (796) | (2,448) |
Other (expense) income | 226 | 711 |
Income before income taxes and noncontrolling interests | 98,252 | 78,548 |
Income tax expense | 4,000 | 2,300 |
Net income from consolidated operations | 94,252 | 76,248 |
Less: Net income attributable to noncontrolling interests | 7,331 | 5,652 |
Net income attributable to HEICO | $ 86,921 | $ 70,596 |
Net income per share attributable to HEICO shareholders: | ||
Basic (in dollars per share) | $ 0.64 | $ 0.52 |
Diluted (in dollars per share) | $ 0.63 | $ 0.51 |
Weighted average number of common shares outstanding: | ||
Basic (in shares) | 135,635 | 135,210 |
Diluted (in shares) | 137,966 | 137,742 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Net income from consolidated operations | $ 94,252 | $ 76,248 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | (8,751) | 11,648 |
Amortization of unrealized loss on defined benefit pension plan, net of tax | 11 | 34 |
Total other comprehensive income (loss) | (8,740) | 11,682 |
Comprehensive income from consolidated operations | 85,512 | 87,930 |
Less: Comprehensive income attributable to noncontrolling interests | 7,331 | 5,652 |
Less: Foreign currency translation adjustments attributable to noncontrolling interests | (330) | 404 |
Comprehensive income attributable to noncontrolling interests | 7,001 | 6,056 |
Comprehensive income attributable to HEICO | $ 78,511 | $ 81,874 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME - UNAUDITED - USD ($) $ in Thousands | Total | Redeemable Noncontrolling Interests [Member] | Common Stock [Member] | Common Stock [Member]Class A Common Stock [Member] | Capital In Excess Of Par Value [Member] | Deferred Compensation Obligation [Member] | HEICO Stock Held By Irrevocable Trust [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total Shareholders Equity [Member] |
Starting Balance at Oct. 31, 2020 | $ 542 | $ 809 | $ 299,930 | $ 4,886 | $ (4,886) | $ (9,149) | $ 1,688,045 | $ 30,430 | $ 2,010,607 | ||
Stockholders' Equity [Roll Forward] | |||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | $ 81,874 | 11,278 | 70,596 | ||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | 6,056 | $ 4,797 | 1,259 | ||||||||
Comprehensive income | 87,930 | 83,133 | |||||||||
Cash dividends | (10,818) | (10,818) | |||||||||
Share-based compensation expense | 2,229 | 2,229 | |||||||||
Proceeds from stock option exercises | 2 | 2,450 | |||||||||
Proceeds from stock option exercises, Adjustment to Additional Paid in Capital | 2,448 | ||||||||||
Stock Redeemed or Called During Period, Value | (3,571) | (3,571) | |||||||||
Distributions to noncontrolling interests | (7,378) | (366) | (366) | ||||||||
Adjustments to redemption amount of redeemable noncontrolling interests | 3,576 | (3,576) | (3,576) | ||||||||
Value of Stock Issued or Reversed During Period for Deferred Compensation Obligation | (109) | ||||||||||
Value of Stock Reversed During Period Deferred Compensation Obligation | 109 | ||||||||||
Adjustments to Additional Paid in Capital, Other | 71 | 71 | |||||||||
Ending Balance at Jan. 31, 2021 | 542 | 811 | 301,107 | 4,777 | (4,777) | 2,129 | 1,744,247 | 31,323 | 2,080,159 | ||
Starting Balance, Redeemable Noncontrolling Interests at Oct. 31, 2020 | 221,208 | ||||||||||
Temporary Equity [Roll Forward] | |||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | 6,056 | 4,797 | 1,259 | ||||||||
Distributions to noncontrolling interests | (7,378) | (366) | (366) | ||||||||
Adjustments to redemption amount of redeemable noncontrolling interests | 3,576 | (3,576) | (3,576) | ||||||||
Temporary Equity, Other Changes | 22 | ||||||||||
Ending Balance, Redeemable Noncontrolling Interests at Jan. 31, 2021 | 222,225 | ||||||||||
Starting Balance at Oct. 31, 2021 | 2,296,939 | 543 | 812 | 320,747 | 5,297 | (5,297) | (8,552) | 1,949,521 | 33,868 | 2,296,939 | |
Stockholders' Equity [Roll Forward] | |||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Parent | 78,511 | (8,410) | 86,921 | ||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | 7,001 | 4,141 | 2,860 | ||||||||
Comprehensive income | 85,512 | 81,371 | |||||||||
Cash dividends | (12,227) | (12,227) | |||||||||
Issuance of common stock to Savings and Investment Plan | 1,670 | 1,670 | |||||||||
Share-based compensation expense | 3,614 | 3,614 | |||||||||
Proceeds from stock option exercises | 3 | 3 | 769 | ||||||||
Proceeds from stock option exercises, Adjustment to Additional Paid in Capital | 763 | ||||||||||
Stock Redeemed or Called During Period, Value | (1) | (1) | (23,621) | (23,623) | |||||||
Distributions to noncontrolling interests | (5,883) | (163) | (163) | ||||||||
Adjustments to redemption amount of redeemable noncontrolling interests | 5,225 | (5,225) | (5,225) | ||||||||
Adjustments to Additional Paid in Capital, Other | (1,069) | (1,069) | |||||||||
Ending Balance at Jan. 31, 2022 | 2,342,056 | $ 545 | $ 814 | $ 302,104 | $ 5,297 | $ (5,297) | $ (16,962) | 2,018,990 | 36,565 | 2,342,056 | |
Starting Balance, Redeemable Noncontrolling Interests at Oct. 31, 2021 | 252,587 | 252,587 | |||||||||
Temporary Equity [Roll Forward] | |||||||||||
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | 7,001 | 4,141 | 2,860 | ||||||||
Noncontrolling Interest, Increase from Business Combination | 172 | ||||||||||
Distributions to noncontrolling interests | (5,883) | $ (163) | (163) | ||||||||
Adjustments to redemption amount of redeemable noncontrolling interests | 5,225 | $ (5,225) | $ (5,225) | ||||||||
Temporary Equity, Other Changes | 2,047 | ||||||||||
Ending Balance, Redeemable Noncontrolling Interests at Jan. 31, 2022 | $ 258,289 | $ 258,289 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME - UNAUDITED [PARENTHETICAL] - $ / shares | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Cash dividends per share (in dollars per share) | $ 0.09 | $ 0.08 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Operating Activities: | ||
Net income from consolidated operations | $ 94,252 | $ 76,248 |
Adjustments to reconcile net income from consolidated operations to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 23,222 | 23,003 |
Share-based compensation expense | 3,614 | 2,229 |
Employer contributions to HEICO Savings and Investment Plan | 3,165 | 2,840 |
Deferred income tax provision (benefit) | (322) | (8,345) |
Change in value of contingent consideration | (114) | 432 |
Changes in operating assets and liabilities, net of acquisitions: | ||
Change in accounts receivable | 16,191 | 9,234 |
Increase (Decrease) in Contract with Customer, Asset | (1,780) | 2,623 |
Change in inventories | (26,967) | 2,602 |
Change in prepaid expenses and other current assets | (9,005) | (6,614) |
Change in trade accounts payable | 2,469 | 1,641 |
Change in accrued expenses and other current liabilities | (38,725) | (19,241) |
Change in income taxes payable | (72) | 6,627 |
Increase (Decrease) in Obligation, Other Postretirement Benefits | 11,603 | 12,022 |
Other | 449 | 1,898 |
Net cash provided by operating activities | 77,980 | 107,199 |
Investing Activities: | ||
Acquisitions, net of cash acquired | 0 | (345) |
Capital expenditures | (8,691) | (15,509) |
Net Investment Related to Deferred Compensation Plan | (10,100) | (10,400) |
Other | (1,168) | 983 |
Net cash used in investing activities | (19,959) | (25,271) |
Financing Activities: | ||
Payments on revolving credit facility | (25,000) | (70,000) |
Proceeds from Long-term Lines of Credit | 26,000 | 0 |
Cash dividends paid | (12,227) | (10,818) |
Distributions to noncontrolling interests | (6,046) | (7,744) |
Common Stock Issued Repurchased and Retired Related To Stock Option Exercises | (23,623) | (3,571) |
Payments of Debt Issuance Costs | 0 | (1,468) |
Proceeds from stock option exercises | 769 | 2,450 |
Other | 207 | (256) |
Net cash (used in) provided by financing activities | (39,920) | (91,407) |
Effect of exchange rate changes on cash | (1,581) | 2,030 |
Net (decrease) increase in cash and cash equivalents | 16,520 | (7,449) |
Cash and cash equivalents at beginning of year | 108,298 | 406,852 |
Cash and cash equivalents at end of period | $ 124,818 | $ 399,403 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Jan. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies [Text Block] | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements of HEICO Corporation and its subsidiaries (collectively, “HEICO,” or the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q. Therefore, the condensed consolidated financial statements do not include all information and footnotes normally included in annual consolidated financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended October 31, 2021. The October 31, 2021 Condensed Consolidated Balance Sheet has been derived from the Company’s audited consolidated financial statements. In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments (consisting principally of normal recurring accruals) necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, statements of comprehensive income, statements of shareholders' equity and statements of cash flows for such interim periods presented. The results of operations for the three months ended January 31, 2022 are not necessarily indicative of the results which may be expected for the entire fiscal year. The Company has two operating segments: the Flight Support Group (“FSG”), consisting of HEICO Aerospace Holdings Corp. and HEICO Flight Support Corp. ("HFSC") and their respective subsidiaries; and the Electronic Technologies Group (“ETG”), consisting of HEICO Electronic Technologies Corp. and its subsidiaries. The Company's results of operations in fiscal 2022 continue to reflect the adverse impact from the COVID-19 global pandemic (the “Pandemic”). Most notably, demand for the Company's commercial aviation products and services continues to be moderated by the ongoing depressed commercial aerospace market as compared to pre-Pandemic levels. The Company experienced a significant improvement in operating results in the first quarter of fiscal 2022 as compared to the first quarter of fiscal 2021 principally reflecting greatly improved demand for its commercial aerospace products. The Flight Support Group has reported six consecutive quarters of improvement in net sales and operating income resulting from signs of commercial air travel recovery in certain domestic travel markets, moderated by a slower recovery in international travel markets. |
SELECTED FINANCIAL STATEMENT IN
SELECTED FINANCIAL STATEMENT INFORMATION | 3 Months Ended |
Jan. 31, 2022 | |
Selected Financial Statement Information [Abstract] | |
Selected Financial Statement Information [Text Block] | SELECTED FINANCIAL STATEMENT INFORMATION Accounts Receivable (in thousands) January 31, 2022 October 31, 2021 Accounts receivable $239,621 $255,793 Less: Allowance for doubtful accounts (11,793) (10,874) Accounts receivable, net $227,828 $244,919 Inventories (in thousands) January 31, 2022 October 31, 2021 Finished products $253,249 $238,867 Work in process 47,057 44,887 Materials, parts, assemblies and supplies 203,200 194,296 Inventories, net of valuation reserves $503,506 $478,050 Property, Plant and Equipment (in thousands) January 31, 2022 October 31, 2021 Land $11,267 $11,363 Buildings and improvements 133,547 134,150 Machinery, equipment and tooling 299,569 297,297 Construction in progress 12,031 7,784 456,414 450,594 Less: Accumulated depreciation and amortization (261,810) (256,956) Property, plant and equipment, net $194,604 $193,638 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 $14.7 million as of January 31, 2022 and $13.2 million as of October 31, 2021. The total customer rebates and credits deducted within net sales for the three months ended January 31, 2022 and 2021 was $1.7 million and $.8 million, respectively. Research and Development Expenses The amount of new product research and development ("R&D") expenses included in cost of sales for the three months ended January 31, 2022 and 2021 is as follows (in thousands): Three months ended January 31, 2022 2021 R&D expenses $18,396 $16,181 Redeemable Noncontrolling Interests 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 through fiscal 2032. 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 a formula that management intended to reasonably approximate fair value based solely on a multiple of future earnings over a measurement period. Management's estimate of the aggregate Redemption Amount of all Put Rights that the Company could be required to pay is as follows (in thousands): January 31, 2022 October 31, 2021 Redeemable at fair value $223,845 $217,416 Redeemable based on a multiple of future earnings 34,444 35,171 Redeemable noncontrolling interests $258,289 $252,587 Accumulated Other Comprehensive Loss Changes in the components of accumulated other comprehensive loss for the three months ended January 31, 2022 are as follows (in thousands): Foreign Currency Translation Defined Benefit Pension Plan Accumulated Balances as of October 31, 2021 ($6,989) ($1,563) ($8,552) Unrealized loss (8,421) — (8,421) Amortization of unrealized loss — 11 11 Balances as of January 31, 2022 ($15,410) ($1,552) ($16,962) |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Jan. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets Disclosure [Text Block] | GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill by operating segment for the three months ended January 31, 2022 are as follows (in thousands): Segment Consolidated Totals FSG ETG Balances as of October 31, 2021 $468,288 $982,107 $1,450,395 Foreign currency translation adjustments (1,672) (2,056) (3,728) Adjustments to goodwill (284) (133) (417) Balances as of January 31, 2022 $466,332 $979,918 $1,446,250 Foreign currency translation adjustments are included in other comprehensive income (loss) in the Company's Condensed Consolidated Statements of Comprehensive Income. The adjustments to goodwill represent immaterial measurement period adjustments to the purchase price allocation of certain fiscal 2021 acquisitions. Identifiable intangible assets consist of the following (in thousands): As of January 31, 2022 As of October 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizing Assets: Customer relationships $463,387 ($230,444) $232,943 $464,506 ($221,098) $243,408 Intellectual property 254,805 (99,094) 155,711 255,011 (94,313) 160,698 Licenses 6,559 (5,163) 1,396 6,559 (5,072) 1,487 Patents 1,129 (799) 330 1,110 (793) 317 Non-compete agreements 718 (718) — 722 (722) — Trade names 450 (267) 183 450 (257) 193 727,048 (336,485) 390,563 728,358 (322,255) 406,103 Non-Amortizing Assets: Trade names 175,527 — 175,527 176,204 — 176,204 $902,575 ($336,485) $566,090 $904,562 ($322,255) $582,307 Amortization expense related to intangible assets for the three months ended January 31, 2022 and 2021 was $15.0 million and $15.2 million, respectively. Amortization expense related to intangible assets for the remainder of fiscal 2022 is estimated to be $43.0 million. Amortization expense for each of the next five fiscal years and thereafter is estimated to be $52.3 million in fiscal 2023, $47.3 million in fiscal 2024, $42.9 million in fiscal 2025, $38.4 million in fiscal 2026, $35.5 million in fiscal 2027, and $131.2 million thereafter. |
LONG-TERM DEBT
LONG-TERM DEBT | 3 Months Ended |
Jan. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-term Debt [Text Block] | LONG-TERM DEBT Long-term debt consists of the following (in thousands): January 31, 2022 October 31, 2021 Borrowings under revolving credit facility $226,000 $225,000 Finance leases and note payable 11,134 11,498 237,134 236,498 Less: Current maturities of long-term debt (1,484) (1,515) $235,650 $234,983 |
REVENUE
REVENUE | 3 Months Ended |
Jan. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | REVENUE Contract Balances Contract assets (unbilled receivables) represent revenue recognized on contracts using an over-time recognition model in excess of amounts invoiced to the customer. Contract liabilities (deferred revenue) represent customer advances and billings in excess of revenue recognized and are included within accrued expenses and other current liabilities in the Company’s Condensed Consolidated Balance Sheet. Changes in the Company’s contract assets and liabilities for the three months ended January 31, 2022 are as follows (in thousands): January 31, 2022 October 31, 2021 Change Contract assets $82,238 $80,073 $2,165 Contract liabilities 42,938 32,738 10,200 Net contract assets $39,300 $47,335 ($8,035) The increase in the Company's contract liabilities during the first quarter of fiscal 2022 mainly occurred within the ETG and principally reflects the receipt of advance deposits on certain customer contracts. The amount of revenue that the Company recognized during the first quarter of fiscal 2022 that was included in contract liabilities as of the beginning of fiscal 2022 was $13.5 million. Remaining Performance Obligations As of January 31, 2022, the Company had $474.4 million of remaining performance obligations associated with contracts with an original duration of greater than one year pertaining to the majority of the products offered by the ETG as well as certain products of the FSG's specialty products and aftermarket replacement parts product lines. The Company will recognize net sales as these obligations are satisfied. The Company expects to recognize $273.9 million of this amount during the remainder of fiscal 2022 and $200.5 million thereafter, of which the majority is expected to occur in fiscal 2023. Disaggregation of Revenue The following table summarizes the Company’s net sales by product line for each operating segment (in thousands): Three months ended January 31, 2022 2021 Flight Support Group: Aftermarket replacement parts (1) $150,901 $118,434 Repair and overhaul parts and services (2) 62,487 42,412 Specialty products (3) 59,293 38,488 Total net sales 272,681 199,334 Electronic Technologies Group: Electronic component parts primarily for defense, space and aerospace equipment (4) 157,468 167,089 Electronic component parts for equipment in various other industries (5) 64,868 56,461 Total net sales 222,336 223,550 Intersegment sales (4,674) (4,982) Total consolidated net sales $490,343 $417,902 (1) Includes various jet engine and aircraft component replacement parts. (2) Includes primarily the sale of parts consumed in various repair and overhaul services on selected jet engine and aircraft components, avionics, instruments, composites and flight surfaces of commercial and military aircraft. (3) Includes primarily the sale of specialty components such as thermal insulation blankets, renewable/reusable insulation systems, advanced niche components, complex composite assemblies, and expanded foil mesh as well as machining, brazing, fabricating and welding services generally to original equipment manufacturers. (4) Includes various component parts such as electro-optical infrared simulation and test equipment, electro-optical laser products, electro-optical, microwave and other power equipment, high-speed interface products, power conversion products, underwater locator beacons, emergency locator transmission beacons, traveling wave tube amplifiers, microwave power modules, a wide variety of memory products and radio frequency (RF) and microwave products, crashworthy and ballistically self-sealing auxiliary fuel systems, high performance communications and electronic intercept receivers and tuners, high performance active antenna systems and technical surveillance countermeasures (TSCM) equipment. (5) Includes various component parts such as electromagnetic and radio frequency interference shielding, high voltage interconnection devices, high voltage advanced power electronics, harsh environment connectivity products, custom molded cable assemblies, silicone material for a variety of demanding applications and rugged small form-factor embedded computing solutions. The following table summarizes the Company’s net sales by industry for each operating segment (in thousands): Three months ended January 31, 2022 2021 Flight Support Group: Aerospace $202,405 $135,056 Defense and Space 58,655 54,044 Other (1) 11,621 10,234 Total net sales 272,681 199,334 Electronic Technologies Group: Defense and Space 131,447 142,092 Other (2) 73,363 63,907 Aerospace 17,526 17,551 Total net sales 222,336 223,550 Intersegment sales (4,674) (4,982) Total consolidated net sales $490,343 $417,902 (1) Principally industrial products. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jan. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | INCOME TAXES The Company's effective tax rate was 4.1% in the first quarter of fiscal 2022, as compared to 2.9% in the first quarter of fiscal 2021. The increase in the Company's effective tax rate reflects an unfavorable impact from tax-exempt unrealized losses in the cash surrender values of life insurance policies related to the HEICO Leadership Compensation Plan in the first quarter of fiscal 2022 as compared to tax-exempt unrealized gains recognized on such policies in the first quarter of fiscal 2021, partially offset by a larger tax benefit from stock options exercises recognized in the first quarter of fiscal 2022. The Company recognized a discrete tax benefit from stock option exercises in both the first quarter of fiscal 2022 and 2021 of $17.8 million and $13.5 million, respectively. The tax benefit from stock option exercises in both periods was the result of strong appreciation in HEICO's stock price during the optionees' holding periods. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Jan. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | FAIR VALUE MEASUREMENTS The Company's assets and liabilities that were measured at fair value on a recurring basis are set forth by level within the fair value hierarchy in the following tables (in thousands): As of January 31, 2022 Quoted Prices Significant Significant Unobservable Inputs Total Assets: Deferred compensation plan: Corporate-owned life insurance $— $235,693 $— $235,693 Money market funds 5,148 — — 5,148 Total assets $5,148 $235,693 $— $240,841 Liabilities: Contingent consideration $— $— $61,853 $61,853 As of October 31, 2021 Quoted Prices Significant Significant Unobservable Inputs Total Assets: Deferred compensation plan: Corporate-owned life insurance $— $245,580 $— $245,580 Money market funds 4 — — 4 Total assets $4 $245,580 $— $245,584 Liabilities: Contingent consideration $— $— $62,286 $62,286 The Company maintains the HEICO Corporation Leadership Compensation Plan (the "LCP"), which is a non-qualified deferred compensation plan. The assets of the LCP principally represent cash surrender values of life insurance policies, which derive their fair values from investments in mutual funds that are managed by an insurance company, and are classified within Level 2 and valued using a market approach. Certain other assets of the LCP represent investments in money market funds that are classified within Level 1. The assets of the LCP are held within an irrevocable trust and classified within other assets in the Company’s Condensed Consolidated Balance Sheets. The related liabilities of the LCP are included within other long-term liabilities and accrued expenses and other current liabilities in the Company’s Condensed Consolidated Balance Sheets and have an aggregate value of $240.5 million as of January 31, 2022 and $244.3 million as of October 31, 2021. As part of the agreement to acquire 89% of the membership interests of a subsidiary by the FSG in fiscal 2021, the Company may be obligated to pay contingent consideration of $8.9 million as early as in fiscal 2024 should the acquired entity meet a certain earnings objective during the three-year period following the acquisition. Additionally, the Company may be obligated to pay contingent consideration of up to $17.8 million as early as in fiscal 2026 should the acquired entity meet a certain earnings objective during the three-year period following the second anniversary of the acquisition. As of January 31, 2022, the estimated fair value of the contingent consideration was $18.2 million. As part of the agreement to acquire 89.99% of the equity interests of a subsidiary by the ETG in fiscal 2020, the Company may be obligated to pay contingent consideration of up to CAD $27.0 million, or $21.2 million, in fiscal 2025 should the acquired entity meet certain earnings objectives during fiscal 2023 and 2024. However, should the acquired entity achieve a certain earnings objective over any two consecutive fiscal years beginning in fiscal 2021 and ending in fiscal 2023, half of the contingent consideration obligation, or CAD $13.5 million, would be payable in the following year. As of January 31, 2022, the estimated fair value of the contingent consideration was CAD $14.9 million, or $11.7 million. As part of the agreement to acquire a subsidiary by the ETG in fiscal 2020, the Company may be obligated to pay contingent consideration of up to $35.0 million in fiscal 2025 based on the earnings of the acquired entity during calendar years 2023 and 2024 provided the entity meets certain earnings objectives during each of calendar years 2021 to 2024. As of January 31, 2022, the estimated fair value of the contingent consideration was $13.3 million. The obligation to pay any contingent consideration would be payable by a consolidated subsidiary of HEICO that is 75% owned by HEICO Electronic. As part of the agreement to acquire a subsidiary by the ETG in fiscal 2017, the Company may be obligated to pay contingent consideration of $20.0 million in fiscal 2023 should the acquired entity meet a certain earnings objective during the first six years following the acquisition. As of January 31, 2022, the estimated fair value of the contingent consideration was $18.6 million. The following unobservable inputs were used to derive the estimated fair value of the Company's Level 3 contingent consideration liabilities as of January 31, 2022 ($ in thousands): Unobservable Weighted Acquisition Date Fair Value Input Range Average (1) 8-4-2021 $18,213 Compound annual revenue growth rate 0% - 9% 7% Discount rate 5.5% - 5.7% 5.6% 8-18-2020 11,711 Compound annual revenue growth rate 6% - 17% 10% Discount rate 4.9% - 5.5% 5.1% 8-11-2020 13,309 Compound annual revenue growth rate 2% - 15% 10% Discount rate 5.5% - 5.5% 5.5% 9-15-2017 18,620 Compound annual revenue growth rate (1%) - 7% 5% Discount rate 4.3% - 4.3% 4.3% (1) Unobservable inputs were weighted by the relative fair value of the contingent consideration liability. Changes in the Company’s contingent consideration liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) for the three months ended January 31, 2022 are as follows (in thousands): Liabilities Balance as of October 31, 2021 $62,286 Decrease in accrued contingent consideration, net (114) Foreign currency transaction adjustments (319) Balance as of January 31, 2022 $61,853 Included in the accompanying Condensed Consolidated Balance Sheet under the following captions: Accrued expenses and other current liabilities $7,655 Other long-term liabilities 54,198 $61,853 The Company records changes in accrued contingent consideration and foreign currency transaction adjustments within selling, general and administrative expenses in its Condensed Consolidated Statement of Operations. |
NET INCOME PER SHARE ATTRIBUTAB
NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS | 3 Months Ended |
Jan. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | 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 (in thousands, except per share data): Three months ended January 31, 2022 2021 Numerator: Net income attributable to HEICO $86,921 $70,596 Denominator: Weighted average common shares outstanding - basic 135,635 135,210 Effect of dilutive stock options 2,331 2,532 Weighted average common shares outstanding - diluted 137,966 137,742 Net income per share attributable to HEICO shareholders: Basic $.64 $.52 Diluted $.63 $.51 Anti-dilutive stock options excluded 728 28 |
OPERATING SEGMENTS
OPERATING SEGMENTS | 3 Months Ended |
Jan. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | OPERATING SEGMENTS Information on the Company’s two operating segments, the FSG and the ETG, for the three months ended January 31, 2022 and 2021, respectively, is as follows (in thousands): Other, (1) Consolidated Segment FSG ETG Three months ended January 31, 2022: Net sales $272,681 $222,336 ($4,674) $490,343 Depreciation 3,718 3,366 246 7,330 Amortization 5,513 10,092 287 15,892 Operating income 52,376 55,588 (9,142) 98,822 Capital expenditures 3,582 5,070 39 8,691 Three months ended January 31, 2021: Net sales $199,334 $223,550 ($4,982) $417,902 Depreciation 3,450 3,059 246 6,755 Amortization 5,136 10,838 274 16,248 Operating income 25,822 60,128 (5,665) 80,285 Capital expenditures 1,988 13,521 — 15,509 (1) Intersegment activity principally consists of net sales from the ETG to the FSG. Total assets by operating segment are as follows (in thousands): Other, Consolidated Segment FSG ETG Total assets as of January 31, 2022 $1,310,311 $1,932,351 $271,233 $3,513,895 Total assets as of October 31, 2021 1,274,462 1,952,413 271,532 3,498,407 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Jan. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | COMMITMENTS AND CONTINGENCIES Guarantees As of January 31, 2022, the Company has arranged for standby letters of credit aggregating $16.1 million, which are supported by its revolving credit facility and principally pertain to performance guarantees related to customer contracts entered into by certain of the Company's subsidiaries as well as payment guarantees related to potential workers' compensation claims and a facility lease. Product Warranty Changes in the Company’s product warranty liability for the three months ended January 31, 2022 and 2021, respectively, are as follows (in thousands): Three months ended January 31, 2022 2021 Balances as of beginning of fiscal year $3,379 $3,015 Accruals for warranties 641 175 Warranty claims settled (541) (323) Balances as of January 31 $3,479 $2,867 Litigation On April 20, 2021, an indirect subsidiary of HFSC, which was acquired in June 2020, received a grand jury subpoena from the United States District Court for the Southern District of California requiring the production of documents for the time period December 1, 2017 through February 4, 2019 related to the subsidiary's employment of a certain individual and its performance of work on certain Navy vessels during that time period. The Company is cooperating with the investigation. The Company has completed its production of documents responsive to the subpoena, although the Company has a continuing obligation to produce such documents should any be located. At this early stage in the investigation, the Company cannot predict the outcome of the investigation or when the investigation will ultimately be resolved; nor can the Company reasonably estimate the possible range of loss or impact to its business, if any, that may result from this matter. With the exception of the matter noted above, 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. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Jan. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTIn February 2022, the Company announced that the FSG had entered into an agreement to acquire 74% of the membership interests of Pioneer Industries, LLC (“Pioneer”) for cash payable at closing plus additional cash contingent consideration should the acquired entity meet certain post-closing earnings objectives. Closing, which is subject to governmental approval and standard closing conditions, is expected to occur in the second quarter of fiscal 2022. Pioneer is a specialty distributor of spares for military aviation, marine, and ground platforms. The remaining 26% interest will continue to be owned by certain members of Pioneer's management team. The purchase price is expected to be paid principally using proceeds from the Company's revolving credit facility and is not material or significant to the Company's condensed consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Jan. 31, 2022 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncement In October 2021, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers," which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, "Revenue from Contracts with Customers," as if the acquirer had originated the contracts. ASU 2021-08 is effective for fiscal years and interim reporting periods within those fiscal years beginning after December 15, 2022, or in fiscal 2024 for HEICO. Early adoption is permitted and ASU 2021-08 shall be applied on a prospective basis to business combinations that occur on or after the adoption date. The Company is currently evaluating the effect, if any, the adoption of this guidance will have on its consolidated results of operations, financial position and cash flows. |
Basis of Presentation [Text Block] | 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, 2021. The October 31, 2021 Condensed Consolidated Balance Sheet has been derived from the Company’s audited consolidated financial statements. In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments (consisting principally of normal recurring accruals) necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, statements of comprehensive income, statements of shareholders' equity and statements of cash flows for such interim periods presented. The results of operations for the three months ended January 31, 2022 are not necessarily indicative of the results which may be expected for the entire fiscal year. The Company has two operating segments: the Flight Support Group (“FSG”), consisting of HEICO Aerospace Holdings Corp. and HEICO Flight Support Corp. ("HFSC") and their respective subsidiaries; and the Electronic Technologies Group (“ETG”), consisting of HEICO Electronic Technologies Corp. and its subsidiaries. |
SELECTED FINANCIAL STATEMENT _2
SELECTED FINANCIAL STATEMENT INFORMATION (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Selected Financial Statement Information [Abstract] | |
Schedule of Accounts Receivable [Table Text Block] | Accounts Receivable (in thousands) January 31, 2022 October 31, 2021 Accounts receivable $239,621 $255,793 Less: Allowance for doubtful accounts (11,793) (10,874) Accounts receivable, net $227,828 $244,919 |
Schedule of Inventories [Table Text Block] | Inventories (in thousands) January 31, 2022 October 31, 2021 Finished products $253,249 $238,867 Work in process 47,057 44,887 Materials, parts, assemblies and supplies 203,200 194,296 Inventories, net of valuation reserves $503,506 $478,050 |
Schedule of Property, Plant and Equipment [Table Text Block] | Property, Plant and Equipment (in thousands) January 31, 2022 October 31, 2021 Land $11,267 $11,363 Buildings and improvements 133,547 134,150 Machinery, equipment and tooling 299,569 297,297 Construction in progress 12,031 7,784 456,414 450,594 Less: Accumulated depreciation and amortization (261,810) (256,956) Property, plant and equipment, net $194,604 $193,638 |
Schedule of Research and Development Expenses [Table Text Block] | The amount of new product research and development ("R&D") expenses included in cost of sales for the three months ended January 31, 2022 and 2021 is as follows (in thousands): Three months ended January 31, 2022 2021 R&D expenses $18,396 $16,181 |
Schedule of Redeemable Noncontrolling Interests [Table Text Block] | Management's estimate of the aggregate Redemption Amount of all Put Rights that the Company could be required to pay is as follows (in thousands): January 31, 2022 October 31, 2021 Redeemable at fair value $223,845 $217,416 Redeemable based on a multiple of future earnings 34,444 35,171 Redeemable noncontrolling interests $258,289 $252,587 |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | Changes in the components of accumulated other comprehensive loss for the three months ended January 31, 2022 are as follows (in thousands): Foreign Currency Translation Defined Benefit Pension Plan Accumulated Balances as of October 31, 2021 ($6,989) ($1,563) ($8,552) Unrealized loss (8,421) — (8,421) Amortization of unrealized loss — 11 11 Balances as of January 31, 2022 ($15,410) ($1,552) ($16,962) |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | Changes in the carrying amount of goodwill by operating segment for the three months ended January 31, 2022 are as follows (in thousands): Segment Consolidated Totals FSG ETG Balances as of October 31, 2021 $468,288 $982,107 $1,450,395 Foreign currency translation adjustments (1,672) (2,056) (3,728) Adjustments to goodwill (284) (133) (417) Balances as of January 31, 2022 $466,332 $979,918 $1,446,250 |
Schedule Of Identifiable Intangible Assets [Table Text Block] | Identifiable intangible assets consist of the following (in thousands): As of January 31, 2022 As of October 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortizing Assets: Customer relationships $463,387 ($230,444) $232,943 $464,506 ($221,098) $243,408 Intellectual property 254,805 (99,094) 155,711 255,011 (94,313) 160,698 Licenses 6,559 (5,163) 1,396 6,559 (5,072) 1,487 Patents 1,129 (799) 330 1,110 (793) 317 Non-compete agreements 718 (718) — 722 (722) — Trade names 450 (267) 183 450 (257) 193 727,048 (336,485) 390,563 728,358 (322,255) 406,103 Non-Amortizing Assets: Trade names 175,527 — 175,527 176,204 — 176,204 $902,575 ($336,485) $566,090 $904,562 ($322,255) $582,307 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | Long-term debt consists of the following (in thousands): January 31, 2022 October 31, 2021 Borrowings under revolving credit facility $226,000 $225,000 Finance leases and note payable 11,134 11,498 237,134 236,498 Less: Current maturities of long-term debt (1,484) (1,515) $235,650 $234,983 |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability [Table Text Block] | Changes in the Company’s contract assets and liabilities for the three months ended January 31, 2022 are as follows (in thousands): January 31, 2022 October 31, 2021 Change Contract assets $82,238 $80,073 $2,165 Contract liabilities 42,938 32,738 10,200 Net contract assets $39,300 $47,335 ($8,035) |
Product Line [Member] | |
Disaggregation of Revenue [Line Items] | |
Disaggregation of Revenue [Table Text Block] | The following table summarizes the Company’s net sales by product line for each operating segment (in thousands): Three months ended January 31, 2022 2021 Flight Support Group: Aftermarket replacement parts (1) $150,901 $118,434 Repair and overhaul parts and services (2) 62,487 42,412 Specialty products (3) 59,293 38,488 Total net sales 272,681 199,334 Electronic Technologies Group: Electronic component parts primarily for defense, space and aerospace equipment (4) 157,468 167,089 Electronic component parts for equipment in various other industries (5) 64,868 56,461 Total net sales 222,336 223,550 Intersegment sales (4,674) (4,982) Total consolidated net sales $490,343 $417,902 (1) Includes various jet engine and aircraft component replacement parts. (2) Includes primarily the sale of parts consumed in various repair and overhaul services on selected jet engine and aircraft components, avionics, instruments, composites and flight surfaces of commercial and military aircraft. (3) Includes primarily the sale of specialty components such as thermal insulation blankets, renewable/reusable insulation systems, advanced niche components, complex composite assemblies, and expanded foil mesh as well as machining, brazing, fabricating and welding services generally to original equipment manufacturers. (4) Includes various component parts such as electro-optical infrared simulation and test equipment, electro-optical laser products, electro-optical, microwave and other power equipment, high-speed interface products, power conversion products, underwater locator beacons, emergency locator transmission beacons, traveling wave tube amplifiers, microwave power modules, a wide variety of memory products and radio frequency (RF) and microwave products, crashworthy and ballistically self-sealing auxiliary fuel systems, high performance communications and electronic intercept receivers and tuners, high performance active antenna systems and technical surveillance countermeasures (TSCM) equipment. (5) Includes various component parts such as electromagnetic and radio frequency interference shielding, high voltage interconnection devices, high voltage advanced power electronics, harsh environment connectivity products, custom molded cable assemblies, silicone material for a variety of demanding applications and rugged small form-factor embedded computing solutions. |
Sales by Industry [Member] | |
Disaggregation of Revenue [Line Items] | |
Disaggregation of Revenue [Table Text Block] | The following table summarizes the Company’s net sales by industry for each operating segment (in thousands): Three months ended January 31, 2022 2021 Flight Support Group: Aerospace $202,405 $135,056 Defense and Space 58,655 54,044 Other (1) 11,621 10,234 Total net sales 272,681 199,334 Electronic Technologies Group: Defense and Space 131,447 142,092 Other (2) 73,363 63,907 Aerospace 17,526 17,551 Total net sales 222,336 223,550 Intersegment sales (4,674) (4,982) Total consolidated net sales $490,343 $417,902 (1) Principally industrial products. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The Company's assets and liabilities that were measured at fair value on a recurring basis are set forth by level within the fair value hierarchy in the following tables (in thousands): As of January 31, 2022 Quoted Prices Significant Significant Unobservable Inputs Total Assets: Deferred compensation plan: Corporate-owned life insurance $— $235,693 $— $235,693 Money market funds 5,148 — — 5,148 Total assets $5,148 $235,693 $— $240,841 Liabilities: Contingent consideration $— $— $61,853 $61,853 As of October 31, 2021 Quoted Prices Significant Significant Unobservable Inputs Total Assets: Deferred compensation plan: Corporate-owned life insurance $— $245,580 $— $245,580 Money market funds 4 — — 4 Total assets $4 $245,580 $— $245,584 Liabilities: Contingent consideration $— $— $62,286 $62,286 |
Fair Value Measurement Inputs and Valuation Techniques [Table Text Block] | The following unobservable inputs were used to derive the estimated fair value of the Company's Level 3 contingent consideration liabilities as of January 31, 2022 ($ in thousands): Unobservable Weighted Acquisition Date Fair Value Input Range Average (1) 8-4-2021 $18,213 Compound annual revenue growth rate 0% - 9% 7% Discount rate 5.5% - 5.7% 5.6% 8-18-2020 11,711 Compound annual revenue growth rate 6% - 17% 10% Discount rate 4.9% - 5.5% 5.1% 8-11-2020 13,309 Compound annual revenue growth rate 2% - 15% 10% Discount rate 5.5% - 5.5% 5.5% 9-15-2017 18,620 Compound annual revenue growth rate (1%) - 7% 5% Discount rate 4.3% - 4.3% 4.3% |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | Changes in the Company’s contingent consideration liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) for the three months ended January 31, 2022 are as follows (in thousands): Liabilities Balance as of October 31, 2021 $62,286 Decrease in accrued contingent consideration, net (114) Foreign currency transaction adjustments (319) Balance as of January 31, 2022 $61,853 Included in the accompanying Condensed Consolidated Balance Sheet under the following captions: Accrued expenses and other current liabilities $7,655 Other long-term liabilities 54,198 $61,853 |
NET INCOME PER SHARE ATTRIBUT_2
NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The computation of basic and diluted net income per share attributable to HEICO shareholders is as follows (in thousands, except per share data): Three months ended January 31, 2022 2021 Numerator: Net income attributable to HEICO $86,921 $70,596 Denominator: Weighted average common shares outstanding - basic 135,635 135,210 Effect of dilutive stock options 2,331 2,532 Weighted average common shares outstanding - diluted 137,966 137,742 Net income per share attributable to HEICO shareholders: Basic $.64 $.52 Diluted $.63 $.51 Anti-dilutive stock options excluded 728 28 |
OPERATING SEGMENTS (Tables)
OPERATING SEGMENTS (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule Of Segment Reporting Information By Segment [Table Text Block] | Information on the Company’s two operating segments, the FSG and the ETG, for the three months ended January 31, 2022 and 2021, respectively, is as follows (in thousands): Other, (1) Consolidated Segment FSG ETG Three months ended January 31, 2022: Net sales $272,681 $222,336 ($4,674) $490,343 Depreciation 3,718 3,366 246 7,330 Amortization 5,513 10,092 287 15,892 Operating income 52,376 55,588 (9,142) 98,822 Capital expenditures 3,582 5,070 39 8,691 Three months ended January 31, 2021: Net sales $199,334 $223,550 ($4,982) $417,902 Depreciation 3,450 3,059 246 6,755 Amortization 5,136 10,838 274 16,248 Operating income 25,822 60,128 (5,665) 80,285 Capital expenditures 1,988 13,521 — 15,509 (1) Intersegment activity principally consists of net sales from the ETG to the FSG. |
Reconciliation of Assets from Segment to Consolidated [Table Text Block] | Total assets by operating segment are as follows (in thousands): Other, Consolidated Segment FSG ETG Total assets as of January 31, 2022 $1,310,311 $1,932,351 $271,233 $3,513,895 Total assets as of October 31, 2021 1,274,462 1,952,413 271,532 3,498,407 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Product Warranty Liability [Table Text Block] | Changes in the Company’s product warranty liability for the three months ended January 31, 2022 and 2021, respectively, are as follows (in thousands): Three months ended January 31, 2022 2021 Balances as of beginning of fiscal year $3,379 $3,015 Accruals for warranties 641 175 Warranty claims settled (541) (323) Balances as of January 31 $3,479 $2,867 |
SELECTED FINANCIAL STATEMENT _3
SELECTED FINANCIAL STATEMENT INFORMATION (Accounts Receivable) (Details) - USD ($) $ in Thousands | Jan. 31, 2022 | Oct. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 239,621 | $ 255,793 |
Less: Allowance for doubtful accounts | (11,793) | (10,874) |
Accounts receivable, net | $ 227,828 | $ 244,919 |
SELECTED FINANCIAL STATEMENT _4
SELECTED FINANCIAL STATEMENT INFORMATION (Inventories) (Details) - USD ($) $ in Thousands | Jan. 31, 2022 | Oct. 31, 2021 |
Inventory [Line Items] | ||
Finished products | $ 253,249 | $ 238,867 |
Work in process | 47,057 | 44,887 |
Materials, parts, assemblies and supplies | 203,200 | 194,296 |
Inventories, net of valuation reserves | $ 503,506 | $ 478,050 |
SELECTED FINANCIAL STATEMENT _5
SELECTED FINANCIAL STATEMENT INFORMATION (Property, Plant and Equipment) (Details) - USD ($) $ in Thousands | Jan. 31, 2022 | Oct. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Land | $ 11,267 | $ 11,363 |
Buildings and improvements | 133,547 | 134,150 |
Machinery, equipment and tooling | 299,569 | 297,297 |
Construction in progress | 12,031 | 7,784 |
Property, plant and equipment, gross | 456,414 | 450,594 |
Less: Accumulated depreciation and amortization | (261,810) | (256,956) |
Property, plant and equipment, net | $ 194,604 | $ 193,638 |
SELECTED FINANCIAL STATEMENT _6
SELECTED FINANCIAL STATEMENT INFORMATION (Research and Development Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2020 | |
Selected Financial Statement Information (Details) [Abstract] | ||
R&D expenses | $ 18,396 | $ 16,181 |
SELECTED FINANCIAL STATEMENT _7
SELECTED FINANCIAL STATEMENT INFORMATION (Redeemable Noncontrolling Interests) (Details) - USD ($) $ in Thousands | Jan. 31, 2022 | Oct. 31, 2021 |
Redeemable Noncontrolling Interest [Line Items] | ||
Redeemable at fair value | $ 223,845 | $ 217,416 |
Redeemable based on a multiple of future earnings | 34,444 | 35,171 |
Redeemable noncontrolling interests | $ 258,289 | $ 252,587 |
SELECTED FINANCIAL STATEMENT _8
SELECTED FINANCIAL STATEMENT INFORMATION (Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Starting accumulated other comprehensive loss | $ (8,552) | |
Unrealized gain (loss) | (8,421) | |
Amortization of unrealized loss on defined benefit pension plan, net of tax | 11 | $ 34 |
Ending accumulated other comprehensive loss | (16,962) | |
Foreign Currency Translation [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Starting accumulated other comprehensive loss | (6,989) | |
Unrealized gain (loss) | (8,421) | |
Ending accumulated other comprehensive loss | (15,410) | |
Pension Benefit Obligation [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Starting accumulated other comprehensive loss | (1,563) | |
Amortization of unrealized loss on defined benefit pension plan, net of tax | 11 | |
Ending accumulated other comprehensive loss | $ (1,552) |
SELECTED FINANCIAL STATEMENT _9
SELECTED FINANCIAL STATEMENT INFORMATION (Details Textuals) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 31, 2022 | Jan. 31, 2021 | Oct. 31, 2021 | |
Selected Financial Statement Information (Details) [Abstract] | |||
Accrued customer rebates and credits | $ 14,700 | $ 13,200 | |
Total customer rebates and credits deducted within net sales | $ 1,700 | $ 800 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Goodwill) (Details) $ in Thousands | 3 Months Ended |
Jan. 31, 2022USD ($) | |
Goodwill [Line Items] | |
Opening Balance | $ 1,450,395 |
Foreign currency translation adjustments | (3,728) |
Adjustments to goodwill | (417) |
Ending Balance | 1,446,250 |
Flight Support Group [Member] | |
Goodwill [Line Items] | |
Opening Balance | 468,288 |
Foreign currency translation adjustments | (1,672) |
Adjustments to goodwill | (284) |
Ending Balance | 466,332 |
Electronic Technologies Group [Member] | |
Goodwill [Line Items] | |
Opening Balance | 982,107 |
Foreign currency translation adjustments | (2,056) |
Adjustments to goodwill | (133) |
Ending Balance | $ 979,918 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS (Identifiable Intangible Assets) (Details) - USD ($) $ in Thousands | Jan. 31, 2022 | Oct. 31, 2021 |
Acquired Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ||
Finite-Lived Customer Relationships, Gross | $ 463,387 | $ 464,506 |
Finite-Lived Intellectual Property, Gross | 254,805 | 255,011 |
Finite-Lived License Agreements, Gross | 6,559 | 6,559 |
Finite-Lived Patents, Gross | 1,129 | 1,110 |
Finite-Lived Noncompete Agreements, Gross | 718 | 722 |
Finite-Lived Trade Names, Gross | 450 | 450 |
Gross Carrying Amount | 727,048 | 728,358 |
Indefinite-Lived Trade Names | 175,527 | 176,204 |
Intangible Assets, Gross (Excluding Goodwill) | 902,575 | 904,562 |
Accumulated Amortization | (336,485) | (322,255) |
Net Carrying Amount | 390,563 | 406,103 |
Intangible Asset Net Carrying Amount | 566,090 | 582,307 |
Customer Relationships [Member] | ||
Acquired Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | (230,444) | (221,098) |
Net Carrying Amount | 232,943 | 243,408 |
Intellectual Property [Member] | ||
Acquired Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | (99,094) | (94,313) |
Net Carrying Amount | 155,711 | 160,698 |
Licensing Agreements [Member] | ||
Acquired Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | (5,163) | (5,072) |
Net Carrying Amount | 1,396 | 1,487 |
Patents [Member] | ||
Acquired Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | (799) | (793) |
Net Carrying Amount | 330 | 317 |
Noncompete Agreements [Member] | ||
Acquired Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | (718) | (722) |
Net Carrying Amount | 0 | 0 |
Trade Names [Member] | ||
Acquired Finite Lived and Indefinite Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | (267) | (257) |
Net Carrying Amount | $ 183 | $ 193 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Textuals) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense related to intangible assets | $ 15 | $ 15.2 |
Estimated Amortization Expense, remainder of fiscal year | 43 | |
Estimated Amortization Expense, for fiscal 2023 | 52.3 | |
Estimated Amortization Expense, for fiscal 2024 | 47.3 | |
Estimated Amortization Expense, for fiscal 2025 | 42.9 | |
Estimated Amortization Expense, for fiscal 2026 | 38.4 | |
Estimated Amortization Expense, for fiscal 2027 | 35.5 | |
Estimated Amortization Expense, thereafter | $ 131.2 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Jan. 31, 2022 | Oct. 31, 2021 |
Borrowings under revolving credit facility | $ 226,000 | $ 225,000 |
Finance leases and note payable | 11,134 | 11,498 |
Total debt and capital leases | 237,134 | 236,498 |
Current maturities of long-term debt | (1,484) | (1,515) |
Long-term debt, net of current maturities | $ 235,650 | $ 234,983 |
LONG-TERM DEBT (Details Textual
LONG-TERM DEBT (Details Textuals) | Jan. 31, 2022 | Oct. 31, 2021 |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 1.10% | 1.10% |
REVENUE (Contract Assets and Li
REVENUE (Contract Assets and Liabilities) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2022 | Oct. 31, 2021 | |
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract] | ||
Contract assets | $ 82,238 | $ 80,073 |
Contract liabilities | 42,938 | 32,738 |
Net contract assets | 39,300 | $ 47,335 |
Amount of Increase (Decrease) in Contract Assets | 2,165 | |
Amount of Increase (Decrease) in Contract Liabilities | 10,200 | |
Amount of Increase (Decrease) in Net Contract Assets | $ (8,035) |
REVENUE (Disaggregation of Reve
REVENUE (Disaggregation of Revenue, by Product Line) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 31, 2022 | Jan. 31, 2021 | ||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 490,343 | $ 417,902 | |
Flight Support Group [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 272,681 | 199,334 | |
Flight Support Group [Member] | Aftermarket Replacement Parts [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | [1] | 150,901 | 118,434 |
Flight Support Group [Member] | Repair and Overhaul Parts and Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 62,487 | 42,412 |
Flight Support Group [Member] | Specialty Products [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | [3] | 59,293 | 38,488 |
Electronic Technologies Group [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 222,336 | 223,550 | |
Electronic Technologies Group [Member] | Electronic Components for Defense, Space and Aerospace [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | [4] | 157,468 | 167,089 |
Electronic Technologies Group [Member] | Other Electronic Components [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | [5] | 64,868 | 56,461 |
Corporate And Eliminations [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | $ (4,674) | $ (4,982) | |
[1] | Includes various jet engine and aircraft component replacement parts. | ||
[2] | Includes primarily the sale of parts consumed in various repair and overhaul services on selected jet engine and aircraft components, avionics, instruments, composites and flight surfaces of commercial and military aircraft. | ||
[3] | Includes primarily the sale of specialty components such as thermal insulation blankets, renewable/reusable insulation systems, advanced niche components, complex composite assemblies, and expanded foil mesh as well as machining, brazing, fabricating and welding services generally to original equipment manufacturers. | ||
[4] | Includes various component parts such as electro-optical infrared simulation and test equipment, electro-optical laser products, electro-optical, microwave and other power equipment, high-speed interface products, power conversion products, underwater locator beacons, emergency locator transmission beacons, traveling wave tube amplifiers, microwave power modules, a wide variety of memory products and radio frequency (RF) and microwave products, crashworthy and ballistically self-sealing auxiliary fuel systems, high performance communications and electronic intercept receivers and tuners, high performance active antenna systems and technical surveillance countermeasures (TSCM) equipment. | ||
[5] | Includes various component parts such as electromagnetic and radio frequency interference shielding, high voltage interconnection devices, high voltage advanced power electronics, harsh environment connectivity products, custom molded cable assemblies, silicone material for a variety of demanding applications and rugged small form-factor embedded computing solutions. |
REVENUE (Disaggregation of Re_2
REVENUE (Disaggregation of Revenue, by Industry) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 31, 2022 | Jan. 31, 2021 | ||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 490,343 | $ 417,902 | |
Flight Support Group [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 272,681 | 199,334 | |
Flight Support Group [Member] | Aerospace [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 202,405 | 135,056 | |
Flight Support Group [Member] | Defense and Space [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 58,655 | 54,044 | |
Flight Support Group [Member] | Other Industries [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | [1] | 11,621 | 10,234 |
Electronic Technologies Group [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 222,336 | 223,550 | |
Electronic Technologies Group [Member] | Aerospace [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 17,526 | 17,551 | |
Electronic Technologies Group [Member] | Defense and Space [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 131,447 | 142,092 | |
Electronic Technologies Group [Member] | Other Industries [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | [2] | 73,363 | 63,907 |
Corporate And Eliminations [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | $ (4,674) | $ (4,982) | |
[1] | Principally industrial products. | ||
[2] | Principally other electronics and medical products. |
REVENUE (Details Textuals)
REVENUE (Details Textuals) $ in Millions | 3 Months Ended |
Jan. 31, 2022USD ($) | |
REVENUE [Abstract] | |
Contract with Customer, Liability, Revenue Recognized | $ 13.5 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-02-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue, Remaining Performance Obligation, Amount | $ 474.4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-02-02 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 9 months |
Revenue, Remaining Performance Obligation, Amount | $ 273.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-11-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 9 months 1 day |
Revenue, Remaining Performance Obligation, Amount | $ 200.5 |
INCOME TAXES (Details Textuals)
INCOME TAXES (Details Textuals) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate Reconciliation, Percent | 4.10% | 2.90% |
Tax benefit from stock option exercises recognized in the period | $ 17,800 | $ 13,500 |
FAIR VALUE MEASUREMENTS (Fair V
FAIR VALUE MEASUREMENTS (Fair Value Hierarchy, by Category) (Details) - USD ($) $ in Thousands | Jan. 31, 2022 | Oct. 31, 2021 |
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | $ 240,841 | $ 245,584 |
Liabilities: | ||
Contingent consideration | 61,853 | 62,286 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 5,148 | 4 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Significant Other Observable Inputs (Level 2) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 235,693 | 245,580 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 0 | 0 |
Liabilities: | ||
Contingent consideration | 61,853 | 62,286 |
Corporate Owned Life Insurance [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 235,693 | 245,580 |
Corporate Owned Life Insurance [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 0 | 0 |
Corporate Owned Life Insurance [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 235,693 | 245,580 |
Corporate Owned Life Insurance [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 0 | 0 |
Money Market Funds [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 5,148 | 4 |
Money Market Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 5,148 | 4 |
Money Market Funds [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | 0 | 0 |
Money Market Funds [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Deferred Compensation Plans [Abstract] | ||
Deferred compensation plans | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS (Level
FAIR VALUE MEASUREMENTS (Level 3 Valuation Inputs) (Details) - Fair Value, Inputs, Level 3 [Member] $ in Thousands | Jan. 31, 2022USD ($) | Oct. 31, 2021USD ($) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value | $ 61,853 | $ 62,286 | |
FY2021 Acquisition Subsidiary 1 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value | 18,213 | ||
FY2020 Acquisition Subsidiary 1 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value | 11,711 | ||
FY2020 Acquisition Subsidiary 2 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value | 13,309 | ||
FY 2017 Acquisition [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value | $ 18,620 | ||
Measurement Input, Long-term Revenue Growth Rate [Member] | FY2021 Acquisition Subsidiary 1 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | [1] | 0.07 | |
Measurement Input, Long-term Revenue Growth Rate [Member] | FY2021 Acquisition Subsidiary 1 | Minimum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0 | ||
Measurement Input, Long-term Revenue Growth Rate [Member] | FY2021 Acquisition Subsidiary 1 | Maximum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.09 | ||
Measurement Input, Long-term Revenue Growth Rate [Member] | FY2020 Acquisition Subsidiary 1 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | [1] | 0.10 | |
Measurement Input, Long-term Revenue Growth Rate [Member] | FY2020 Acquisition Subsidiary 1 | Minimum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.06 | ||
Measurement Input, Long-term Revenue Growth Rate [Member] | FY2020 Acquisition Subsidiary 1 | Maximum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.17 | ||
Measurement Input, Long-term Revenue Growth Rate [Member] | FY2020 Acquisition Subsidiary 2 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | [1] | 0.10 | |
Measurement Input, Long-term Revenue Growth Rate [Member] | FY2020 Acquisition Subsidiary 2 | Minimum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.02 | ||
Measurement Input, Long-term Revenue Growth Rate [Member] | FY2020 Acquisition Subsidiary 2 | Maximum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.15 | ||
Measurement Input, Long-term Revenue Growth Rate [Member] | FY 2017 Acquisition [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | [1] | 0.05 | |
Measurement Input, Long-term Revenue Growth Rate [Member] | FY 2017 Acquisition [Member] | Minimum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | (0.01) | ||
Measurement Input, Long-term Revenue Growth Rate [Member] | FY 2017 Acquisition [Member] | Maximum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.07 | ||
Measurement Input, Discount Rate [Member] | FY2021 Acquisition Subsidiary 1 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | [1] | 0.056 | |
Measurement Input, Discount Rate [Member] | FY2021 Acquisition Subsidiary 1 | Minimum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.055 | ||
Measurement Input, Discount Rate [Member] | FY2021 Acquisition Subsidiary 1 | Maximum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.057 | ||
Measurement Input, Discount Rate [Member] | FY2020 Acquisition Subsidiary 1 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | [1] | 0.051 | |
Measurement Input, Discount Rate [Member] | FY2020 Acquisition Subsidiary 1 | Minimum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.049 | ||
Measurement Input, Discount Rate [Member] | FY2020 Acquisition Subsidiary 1 | Maximum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.055 | ||
Measurement Input, Discount Rate [Member] | FY2020 Acquisition Subsidiary 2 | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | [1] | 0.055 | |
Measurement Input, Discount Rate [Member] | FY2020 Acquisition Subsidiary 2 | Minimum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.055 | ||
Measurement Input, Discount Rate [Member] | FY2020 Acquisition Subsidiary 2 | Maximum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.055 | ||
Measurement Input, Discount Rate [Member] | FY 2017 Acquisition [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | [1] | 0.043 | |
Measurement Input, Discount Rate [Member] | FY 2017 Acquisition [Member] | Minimum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.043 | ||
Measurement Input, Discount Rate [Member] | FY 2017 Acquisition [Member] | Maximum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.043 | ||
[1] | Unobservable inputs were weighted by the relative fair value of the contingent consideration liability. |
FAIR VALUE MEASUREMENTS (Contin
FAIR VALUE MEASUREMENTS (Contingent Consideration Liability) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2022 | Oct. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Accrued Liabilities, Current | $ 181,361 | $ 206,857 |
Other Liabilities, Noncurrent | 363,777 | $ 378,257 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Opening balance, Liabilities | 62,286 | |
Change in accrued contingent consideration | (114) | |
Ending balance, Liabilities | 61,853 | |
Accrued Liabilities, Current | 7,655 | |
Other Liabilities, Noncurrent | 54,198 | |
Significant Unobservable Inputs (Level 3) [Member] | Foreign Currency Gain (Loss) | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair Value, Liability, Recurring Basis, Still Held, Unrealized Gain (Loss) | $ (319) |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details Textuals) $ in Thousands, $ in Thousands | Jan. 31, 2022USD ($) | Jan. 31, 2022CAD ($) | Oct. 31, 2021USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total liabilities | $ 61,853 | $ 62,286 | |
Aggregate LCP Liability [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Related liabilities of deferred compensation plans, specified as other long-term liabilities | $ 240,500 | $ 244,300 | |
FY2021 Acquisition Subsidiary 1 | Heico Aerospace Corp | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business Acquisition, Percentage of Voting Interests Acquired | 89.00% | 89.00% | |
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, Low | $ 8,900 | ||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 17,800 | ||
Total liabilities | $ 18,200 | ||
FY2020 Acquisition Subsidiary 1 | Heico Electronic Technologies Corp | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business Acquisition, Percentage of Voting Interests Acquired | 89.99% | 89.99% | |
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 21,200 | ||
Total liabilities | 11,700 | ||
FY2020 Acquisition Subsidiary 1 | Heico Electronic Technologies Corp | Canada, Dollars | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, Low | $ 13,500 | ||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 27,000 | ||
Total liabilities | $ 14,900 | ||
FY2020 Acquisition Subsidiary 2 | Heico Electronic Technologies Corp | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 35,000 | ||
Total liabilities | 13,300 | ||
FY 2017 Acquisition [Member] | Heico Electronic Technologies Corp | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | 20,000 | ||
Total liabilities | $ 18,600 | ||
Subsidiary | Heico Electronic Technologies Corp | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Business Acquisition, Percentage of Voting Interests Acquired | 75.00% | 75.00% |
NET INCOME PER SHARE ATTRIBUT_3
NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Numerator: | ||
Net income attributable to HEICO | $ 86,921 | $ 70,596 |
Denominator: | ||
Weighted Average Number of Shares Outstanding, Basic | 135,635 | 135,210 |
Effect of dilutive stock options | 2,331 | 2,532 |
Weighted Average Number of Shares Outstanding, Diluted | 137,966 | 137,742 |
Earnings Per Share, Basic | $ 0.64 | $ 0.52 |
Earnings Per Share, Diluted | $ 0.63 | $ 0.51 |
Anti-dilutive stock options excluded | 728 | 28 |
OPERATING SEGMENTS (Details)
OPERATING SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Jan. 31, 2022 | Jan. 31, 2021 | ||
Segment Reporting Information [Line Items] | |||
Revenues | $ 490,343 | $ 417,902 | |
Depreciation | 7,330 | 6,755 | |
Amortization | 15,892 | 16,248 | |
Operating income | 98,822 | 80,285 | |
Capital expenditures | 8,691 | 15,509 | |
Corporate And Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | [1] | (4,674) | (4,982) |
Depreciation | [1] | 246 | 246 |
Amortization | [1] | 287 | 274 |
Operating income | [1] | (9,142) | (5,665) |
Capital expenditures | [1] | 39 | 0 |
Flight Support Group [Member] | Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 272,681 | 199,334 | |
Depreciation | 3,718 | 3,450 | |
Amortization | 5,513 | 5,136 | |
Operating income | 52,376 | 25,822 | |
Capital expenditures | 3,582 | 1,988 | |
Electronic Technologies Group [Member] | Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 222,336 | 223,550 | |
Depreciation | 3,366 | 3,059 | |
Amortization | 10,092 | 10,838 | |
Operating income | 55,588 | 60,128 | |
Capital expenditures | $ 5,070 | $ 13,521 | |
[1] | Intersegment activity principally consists of net sales from the ETG to the FSG. |
OPERATING SEGMENTS (Details 1)
OPERATING SEGMENTS (Details 1) - USD ($) $ in Thousands | Jan. 31, 2022 | Oct. 31, 2021 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 3,513,895 | $ 3,498,407 |
Other Primarily Corporate and Intersegment [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 271,233 | 271,532 |
Flight Support Group [Member] | Operating Segments [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 1,310,311 | 1,274,462 |
Electronic Technologies Group [Member] | Operating Segments [Member] | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 1,932,351 | $ 1,952,413 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Schedule of Product Warranties [Line Items] | ||
Balances as of beginning of fiscal year | $ 3,379 | $ 3,015 |
Accruals for warranties | 641 | 175 |
Warranty claims settled | (541) | (323) |
Balances as of end of period | $ 3,479 | $ 2,867 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details Textuals) $ in Millions | Jan. 31, 2022USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Guarantor Obligations, Maximum Exposure, Undiscounted | $ 16.1 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event - Pioneer - Heico Aerospace Corp | 1 Months Ended | |
Feb. 25, 2022 | Feb. 01, 2022 | |
Subsequent Event [Line Items] | ||
Business Acquisition, Percentage of Voting Interests Acquired | 74.00% | |
Name of Acquired Entity | Pioneer Industries, LLC | |
Description of Acquired Entity | Pioneer is a specialty distributor of spares for military aviation, marine, and ground platforms. | |
Existing Management | ||
Subsequent Event [Line Items] | ||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 26.00% |