Operating Results Approximate 1st Quarter '09 Levels

HOLLYWOOD, Fla. and MIAMI, May 27, 2009 (GLOBE NEWSWIRE) -- HEICO Corporation (NYSE:HEI-A) (NYSE:HEI) today reported net income of $10,541,000, or 39 cents per diluted share, for the second quarter of fiscal 2009, compared to $11,948,000, or 44 cents per diluted share, for the second quarter of fiscal 2008 and $11,317,000, or 42 cents per diluted share, for the first quarter of fiscal 2009, which included a $1.1 million, or 4 cents per diluted share, benefit from settling an income tax audit. For the first six months of fiscal 2009, net income was $21,858,000, or 81 cents per diluted share, comparable to the $22,034,000, or 81 cents per diluted share, reported for the first six months of fiscal 2008.

Net sales totaled $130,166,000 in the second quarter of fiscal 2009, compared to $144,039,000 in the second quarter of fiscal 2008 and $130,437,000 in the first quarter of fiscal 2009. For the first six months of fiscal 2009, net sales totaled $260,603,000 compared to $278,326,000 for the first six months of fiscal 2008.

Operating income totaled $21,319,000 in the second quarter of fiscal 2009, compared to $26,359,000 in the second quarter of fiscal 2008 and $21,453,000 in the first quarter of fiscal 2009. For the first six months of fiscal 2009, operating income was $42,772,000 compared to $49,589,000 for the first six months of 2008.

(NOTE: HEICO has two classes of common stock traded on the NYSE. Both classes, the Class A Common Stock (HEI.A) and the Common Stock (HEI), are virtually identical in all economic respects. The only difference between the share classes is the voting rights. The Class A Common Stock (HEI.A) receives 1/10 vote per share and the Common Stock (HEI) receives one vote per share.)

Laurans A. Mendelson, HEICO's Chairman, President and CEO, commenting on the Company's second quarter results stated, "The continued effects of the slowdown in global economic activity impacted both of our business segments in the second quarter of fiscal 2009. Our Flight Support Group faces challenges brought on by worldwide airline capacity reductions and shrinking MRO spending. While our Electronic Technologies Group generally sees some strength in its defense and space related businesses, the global economic recession has continued to result in lower demand for certain of its medical, telecommunication and electronic products.

"Our Flight Support Group reported net sales of $100.7 million and $200.3 million, respectively, for the second quarter and first six months of fiscal 2009 as compared to $108.0 million and $210.3 million, respectively, for the second quarter and first six months of fiscal 2008. Fiscal 2009 second quarter net sales were up slightly from $99.6 million for the first quarter of fiscal 2009.

"Operating income of the Flight Support Group was $15.9 million for the second quarter of fiscal 2009 compared to $20.4 million in the second quarter of fiscal 2008, and was $31.5 million for the first six months of fiscal 2009 compared to $39.3 million for the first six months of fiscal 2008. Operating margins of the Flight Support Group were 15.8% in the second quarter of fiscal 2009 compared to 18.9% for the second quarter of fiscal 2008, and were 15.7% for the first six months of fiscal 2009 compared to 18.7% for the first six months of fiscal 2008, reflecting the lower sales volume and variations in product mix. Fiscal 2009 second quarter operating income and operating margins approximated the levels reported for the first quarter of fiscal 2009.

"Since the beginning of our fiscal 2009, airlines have continued to reduce capacity in light of the impact of the global recession on passenger and cargo traffic demand. Current market forecasts of worldwide airline capacity reductions in 2009 range from decreases of 5% to 10% from 2008 levels with forecasted MRO spending down as much as 10% to 20% for the same period.

"Our Electronic Technologies Group reported net sales of $29.5 million and $60.5 million, respectively, for the second quarter and first six months of fiscal 2009 as compared to $36.1 million and $68.0 million, respectively, for the second quarter and first six months of fiscal 2008.

"Operating income of the Electronic Technologies Group was $8.0 million for the second quarter of fiscal 2009, compared to $9.8 million for the second quarter of fiscal 2008, and was $16.6 million for the first six months of fiscal 2009, down slightly from $16.9 million for the first six months of fiscal 2008. Operating margins of the Electronic Technologies Group continued to be strong at 27.2% for the second quarter of fiscal 2009, up slightly from the 27.1% reported for the second quarter of fiscal 2008, and strengthened to 27.4% for the first six months of fiscal 2009, up from 24.9% for the first six months of fiscal 2008, reflecting a favorable product mix.

"As we have pointed out in the past, revenue and profits of our Electronic Technologies Group may vary considerably from quarter to quarter due to variations in shipping schedules and product margins. Historically, these variations have balanced out over a full fiscal year.

"Despite the current challenges our business units are facing, we remain true to our long-term principle of growth through the development of new products and services in order to increase market penetration with our existing and new customers and from the identification of select acquisition opportunities, all while maintaining a strong and healthy financial position. As we previously stated, our market share typically increases in downturns as our customers become increasingly committed to our cost savings opportunities.

"We invested nearly $10 million in the first half of fiscal 2009 in development expenses for new products and services, which represents a 15% increase in spending over the same period in fiscal 2008. These new products and services help to lower the operating costs of our airline partners and other worldwide customers and allow us to increase market share and unit volumes.

"We also expect to continue our successful acquisition strategy and are aggressively pursuing opportunities within both of our business segments. We believe our recently announced acquisition of 82.5% of VPT, Inc. through the Electronic Technologies Group exemplifies our unwavering commitment to acquire excellent businesses at fair prices.

"Our cash flow and balance sheet remain strong. As of April 30, 2009, the Company's net debt to equity ratio was just 6%, with net debt (total debt less cash and cash equivalents) of $28.0 million, and we have no significant debt maturities until fiscal 2013. Given our strong capitalization, we invested over $8 million in our own shares last March at prices we believe provided significant value for HEICO and its shareholders.

"Cash flow from operating activities for the first six months of fiscal 2009 totaled $26.6 million, including $21.4 million generated in the second quarter of fiscal 2009, compared to $35.2 million for the first six months of 2008. We expect full year cash flow from operating activities to approximate $70 million in fiscal 2009, as compared to $73 million in fiscal 2008. Our capital expenditures for fiscal 2009 should range between $10 to $12 million.

"In recent months, there have been some signs that airline capacity reductions are moderating as evidenced by ASMs (Available Seat Miles), parked aircraft and airline bookings, however, near-term visibility remains opaque. Accordingly, at this time, we do not expect our full fiscal 2009 net sales and diluted earnings per share to fall by more than 5% to 10% below fiscal 2008 levels despite the many economic challenges facing HEICO as well as other industrial companies today.

"Further, we continue to believe that our operating strategy, which focuses on intermediate and long-term growth, is a solid foundation to best reward HEICO and its shareholders.