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24 Aug 16. HEICO CORPORATION (NYSE:HEI.A) (HEI) today reported that net income increased 22% to a record $42.0m, or 62 cents per diluted share, in the third quarter of fiscal 2016, up from $34.4m, or 51 cents per diluted share, in the third quarter of fiscal 2015. In the first nine months of fiscal 2016, net income increased 18% to a record $111.9m, or $1.64 per diluted share, up from $95.1m, or $1.40 per diluted share, in the first nine months of fiscal 2015.
Net sales increased 19% to a record $356.1m in the third quarter of fiscal 2016, up from $300.4m in the third quarter of fiscal 2015. In the first nine months of fiscal 2016, net sales increased 18% to a record $1,013.0m, up from $860.0 m in the first nine months of fiscal 2015.
Operating income increased 19% to a record $69.9m in the third quarter of fiscal 2016, up from $58.5m in the third quarter of fiscal 2015. In the first nine months of fiscal 2016, operating income increased 18% to a record $189.3m, up from $160.7m in the first nine months of fiscal 2015.
The Company’s consolidated operating margin was 19.6% and 19.5% in the third quarter of fiscal 2016 and 2015, respectively. The Company’s consolidated operating margin was 18.7% in both the first nine months of fiscal 2016 and 2015.
Consolidated Results
Laurans A. Mendelson, HEICO’s Chairman and CEO, commented on the Company’s third quarter results stating, “Our record quarterly results in consolidated net sales, operating income and net income reflect the impact of our profitable fiscal 2016 and 2015 acquisitions, as well as organic growth within both the Flight Support Group and Electronic Technologies Group.
Cash flow provided by operating activities was very strong, increasing 42% to $172.4m in the first nine months of fiscal 2016, representing 154% of net income, as compared to $121.3m in the first nine months of fiscal 2015.
Our net debt to shareholders’ equity ratio was 47.7% as of July 31, 2016, with net debt (total debt less cash and cash equivalents) of $482.7m principally incurred to fund acquisitions in fiscal 2016 and 2015. We have no significant debt maturities until fiscal 2019 and plan to utilize our financial flexibility to aggressively pursue high quality acquisition opportunities to accelerate growth and maximize shareholder returns.
As we look ahead to the remainder of fiscal 2016, we anticipate organic growth within our commercial aviation aftermarket replacement parts and specialty products product lines moderated by softer demand for certain component repair and overhaul parts and services. Further, we foresee modest full year organic growth within the Electronic Technologies Group based on current forecasted product demand. During the remainder of fiscal 2016, we plan to continue our focus on new product development, further market penetration, executing our acquisition strategies and maintaining our financial strength.
Based on our current economic visibility, we are increasing our estimated consolidated fiscal 2016 year-over-year growth in net income to 13% – 15%, up from our prior growth estimate of 12% – 14%. In addition, we continue to estimate consolidated fiscal 2016 year-over-year growth in net sales to approximate 15% – 17%, our consolidated operating margin to approximate 18.5% – 19.0%, depreciation and amortization expense of approximately $62m, capital expenditures to approximate $32 m and cash flow from operations to approximate $220m.”
Flight Support Group
Eric A. Mendelson, HEICO’s Co-President and President of HEICO’s Flight Support Group, commented on the Flight Support Group’s third quarter results stating, “Our record quarterly results in net sales reflect strong growth contributions from our fisca