(Source: PrimeNewswire)
HOLLYWOOD, Fla. and MIAMI, Aug. 26, 2009 (GLOBE NEWSWIRE) -- HEICO Corporation (NYSE:HEI.A) (NYSE:HEI) today reported net income of $11,132,000, or 41 cents per diluted share, for the third quarter of fiscal 2009, compared to $12,827,000, or 47 cents per diluted share, for the third quarter of fiscal 2008 and up from $10,541,000, or 39 cents per diluted share, in the second quarter of fiscal 2009. For the first nine months of fiscal 2009, net income was $32,990,000, or $1.22 per diluted share, compared to the $34,861,000, or $1.28 per diluted share, reported for the first nine months of fiscal 2008.
Operating income totaled $21,422,000 in the third quarter of fiscal 2009, compared to $27,489,000 in the third quarter of fiscal 2008 and $21,319,000 in the second quarter of fiscal 2009. For the first nine months of fiscal 2009, operating income was $64,194,000 compared to $77,078,000 for the first nine months of 2008. Our consolidated operating margin was 16.0% for the third quarter of fiscal 2009, compared to 18.7% in the third quarter of fiscal 2008 and 16.4% in the second quarter of fiscal 2009, and was 16.3% for the first nine months of fiscal 2009, compared to 18.1% for the first nine months of fiscal 2008.
Net sales totaled $134,086,000 in the third quarter of fiscal 2009, compared to $147,305,000 in the third quarter of fiscal 2008 and $130,166,000 in the second quarter of fiscal 2009. For the first nine months of fiscal 2009, net sales totaled $394,689,000 compared to $425,631,000 for the first nine months of fiscal 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 third quarter results stated, "As we saw in the first half of fiscal 2009, the continued effects of a global recession impacted both of our business segments in the third quarter of fiscal 2009. Despite these challenges, we have been able to maintain customer focus, carefully manage our resources and make improvements in areas within our control in order to maintain our operating income in each of the first three quarters of fiscal 2009.
"Our Flight Support Group reported net sales of $97.2 million and $297.5 million, respectively, for the third quarter and first nine months of fiscal 2009, compared to $110.0 million and $320.3 million, respectively, for the third quarter and first nine months of fiscal 2008. Fiscal 2009 third quarter net sales were down slightly from $100.7 million for the second quarter of fiscal 2009 as airlines around the world continued to make capacity reductions as a result of ongoing weak passenger and cargo demand.
"Operating margins of the Flight Support Group were 15.2% and 15.6%, respectively, for the third quarter and first nine months of 2009, compared to 18.5% and 18.6%, respectively, for the third quarter and first nine months of fiscal 2008. The decreases reflect the lower sales volume and variations in product mix as well as a $1 million increase in inventory reserves recorded in the third quarter of fiscal 2009 to reflect the impact of lower sales volumes of certain parts evaluated as slow-moving. Operating income of the Flight Support Group was $14.8 million and $46.3 million, respectively, for the third quarter and first nine months of fiscal 2009, compared to $20.4 million and $59.7 million, respectively, for the third quarter and first nine months of fiscal 2008.
"Demand for passenger air travel and cargo traffic remains soft. Current market forecasts of worldwide airline capacity reductions in 2009 continue to range from decreases of 5% to 10% from 2008 levels with forecasted MRO spending down 10% to 15% for overhaul and repairs services and 15% to 25% for replacement parts during the same period due to capacity reductions, inventory destocking and short-term maintenance deferrals. We have been able to offset a substantial portion of this market decline by accelerated new product development efforts and additional market penetration.
"Our Electronic Technologies Group reported net sales of $37.1 million and $97.5 million, respectively, for the third quarter and first nine months of fiscal 2009, compared to $37.7 million and $105.7 million, respectively, for the third quarter and first nine months of fiscal 2008. While our Electronic Technologies Group was aided by some strength in its defense and space related business and the acquisition of VPT, Inc. in May 2009, the global economic recession has continued to result in lower demand for certain of its medical, telecommunication and electronic products.
"Operating margins of the Electronic Technologies Group remained strong at 26.8% and 27.2%, respectively, for the third quarter and first nine months of fiscal 2009, compared to 28.6% and 26.2% reported for the third quarter and first nine months of fiscal 2008, respectively. Operating income of the Electronic Technologies Group was $9.9 million and $26.5 million, respectively, for the third quarter and first nine months of fiscal 2009, compared to $10.8 million and $27.7 million, respectively, for the third quarter and first nine months of fiscal 2008.
"Our cash flow and balance sheet remain strong. As of July 31, 2009, the Company's net debt to equity ratio was a low 11%, with net debt (total debt less cash and cash equivalents) of $49.5 million. We have no significant debt maturities until fiscal 2013. Our strong cash flow and balance sheet combined with our healthy cash position will allow us to take advantage of acquisition opportunities if they arise.
"Cash flow from operating activities for the first nine months of fiscal 2009 totaled $43.7 million, including $17.1 million generated in the third quarter of fiscal 2009, compared to $56.6 million for the first nine months of 2008. We continue to anticipate 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 are expected to range between $10 to $12 million.
"Given the challenging economic environment we're operating in, we are pleased to note that our consolidated net sales, operating income and diluted net income per share for the third quarter of fiscal 2009 were comparable to, or slightly above, such amounts reported in the first and second quarters of fiscal 2009 and we anticipate some further improvement in the fourth quarter.
"Although airline capacity reductions have been moderating in recent months, near-term visibility remains somewhat opaque. Based on current market conditions, we are targeting fiscal 2009 full year net sales in the range of $533 to $538 million and diluted net income per share within a range of $1.62 to $1.65. These targets are within the range of our prior estimates and exclude the impact of additional acquisitions, if any. The Company expects to provide its fiscal 2010 guidance at the time of its fourth quarter earnings release.
"We continue to believe our focus on intermediate and long-term growth is a solid foundation to best reward HEICO and its shareholders and to provide the best opportunity for sustainable growth."
As previously announced, HEICO will hold a conference call on Thursday, August 27, 2009 at 9:00 a.m. Eastern Daylight Time to discuss its third quarter results. Individuals wishing to participate in the conference call should dial: U.S. (888) 299-4099, Canada (866) 682-1172, and International (302) 709-8337, wait for the conference operator and provide the operator with the "Verbal" Passcode/Conference ID VM17450 (or "8617450"). A digital replay will be available two hours after the completion of the conference for 14 days.
