Financial Performance - Consolidated net sales for the first six months of fiscal 2023 increased by 27% to a record $1,308.8 million, compared to $1,029.2 million in the same period of fiscal 2022[95]. - The Flight Support Group (FSG) reported net sales of $763.5 million, a 32% increase, while the Electronic Technologies Group (ETG) achieved net sales of $556.8 million, a 21% increase[95]. - Operating income rose by 29% to a record $286.5 million in the first six months of fiscal 2023, up from $221.6 million in the same period of fiscal 2022[100]. - The FSG's operating income increased by 55% to $183.5 million, while the ETG's operating income rose by 2% to $124.5 million[100]. - Consolidated net sales increased by 28% to a record $687.8 million in Q2 FY2023, up from $538.8 million in Q2 FY2022, driven by strong growth in both FSG and ETG segments[109]. - FSG net sales reached $392.2 million, a 28% increase, while ETG net sales were $301.8 million, a 27% increase, with FSG benefiting from 20% organic growth[109]. - Consolidated operating income rose by 28% to $157.1 million in Q2 FY2023, compared to $122.8 million in Q2 FY2022, with FSG's operating income increasing by 51%[114]. - Net income attributable to HEICO increased by 15% to a record $198.1 million, or $1.43 per diluted share, in the first six months of fiscal 2023[107]. - Net income attributable to HEICO increased by 24% to $105.1 million, or $0.76 per diluted share, in Q2 FY2023, up from $85.0 million, or $0.62 per diluted share, in Q2 FY2022[121]. Expenses and Costs - Selling, general and administrative (SG&A) expenses increased to $223.8 million in the first six months of fiscal 2023, up from $179.8 million in the same period of fiscal 2022[97]. - SG&A expenses increased to $109.4 million in Q2 FY2023 from $88.5 million in Q2 FY2022, reflecting costs related to acquisitions and net sales growth[111]. - Interest expense increased significantly to $17.4 million in the first six months of fiscal 2023, compared to $1.8 million in the same period of fiscal 2022[102]. - Consolidated gross profit margin was 38.7% in Q2 FY2023, down from 39.2% in Q2 FY2022, reflecting a 2.0% improvement in FSG's margin but a 3.5% decrease in ETG's margin[110]. Taxation - The effective tax rate increased to 19.3% in the first six months of fiscal 2023, up from 15.0% in the same period of fiscal 2022[105]. - The effective tax rate decreased to 21.2% in Q2 FY2023 from 23.7% in Q2 FY2022, primarily due to favorable tax-exempt unrealized gains[119]. Cash Flow and Capital Expenditures - Net cash provided by operating activities was $154.4 million in the first six months of FY2023, down from $174.8 million in the same period of FY2022[126]. - The company plans capital expenditures of approximately $45 to $50 million for FY2023[124]. Acquisitions - The company entered into an agreement to acquire Wencor Group for $1.9 billion in cash and stock, enhancing its aftermarket capabilities[92]. - The pending acquisition of Wencor for $1.9 billion is expected to close by the end of calendar 2023, with sufficient funds available from current credit facilities and cash on hand[132]. Financial Instruments - HEICO issued a ten-year €150 million note to Exxelia, accruing interest at 4.7% per annum[137]. - A hypothetical 10% strengthening of the U.S. dollar against the Euro would decrease the U.S. dollar equivalent of the Euro note receivable by approximately $16.8 million[137]. - The same hypothetical scenario would also decrease operating income by approximately $16.8 million[137].
HEICO (HEI_A) - 2023 Q2 - Quarterly Report