Financial Results Announcement - Smith-Midland Corporation announced its financial results for the year ended December 31, 2024, on May 27, 2025[4] - The press release detailing the financial results is attached as Exhibit 99.1[5] Company Information - The company is registered under the NASDAQ trading symbol SMID[3]

Business Performance and Growth - Xcel Brands generated over $5 billion in retail sales via live streaming in interactive television and digital channels[15]. - The Judith Ripka Brand has shown continual quarterly sequential and year-over-year revenue growth since its launch on JTV in October 2023[35]. - The C Wonder Brand performed well in its launch year and is expected to continue increasing retail sales volume in 2025 and beyond[35]. - The company plans to continue its growth strategy through organic growth, developing new brands, and acquiring strategically important brands[33][35]. - The company expects growth through expansion of licensing activities and social media e-commerce platforms, including ORME[114]. Brand Portfolio and Licensing - The company launched the Longaberger Brand on ORME and introduced the TowerHill by Christie Brinkley and LB70 by Lloyd Boston brands in 2024[19][34]. - Xcel's brand portfolio includes Halston, Ripka, C Wonder, TowerHill, LB70, Longaberger, and Isaac Mizrahi, among others[25]. - Net licensing revenue from Qurate accounted for approximately 44% of total net revenue for the year ended December 31, 2024, compared to 34% for 2023[47]. - The Halston Master License generated net licensing revenue of approximately 31% of total net revenue for the year ended December 31, 2024, up from 9% in 2023[50]. - The Halston Master License has a term of 25 years, including an initial five-year period followed by a 20-year period[48]. Financial Condition and Risks - The company incurred net losses of approximately $22.6 million and $22.2 million for the years ended December 31, 2024 and 2023, respectively, with an accumulated deficit of approximately $76.2 million as of December 31, 2024[77]. - The company may require significant additional cash to satisfy working capital requirements and expand operations, which could limit growth potential[76]. - The company has a dependency on a limited number of licensees for revenue, which poses a risk if any of these licensees face financial difficulties[90]. - The company is subject to risks related to its debt obligations, which could impair liquidity and financial condition if not managed properly[79]. - The company has identified material weaknesses in its internal controls over financial reporting as of December 31, 2024, and is developing a remediation plan[85]. Market Environment and Competition - The retail environment is changing, with major retailers consolidating and potentially reducing purchases from the company, impacting sales[112]. - Intense competition in the apparel, fashion, and jewelry industries may lead to pricing pressures and reduced profit margins, impacting the company's sales and profitability[126][128]. - The company faces risks from potential economic downturns, which could adversely affect consumer spending and overall business performance[169]. Operational Challenges - The company is subject to various federal, state, and local regulations, and believes it is in compliance with all applicable laws[68]. - The company faces numerous risks associated with acquisitions, joint ventures, and collaborations, including unanticipated costs and integration challenges[120]. - The company relies significantly on information technology systems, and any failure or security lapse could have a material adverse effect on its operations[185]. - The company has experienced cybersecurity incidents, including an unsuccessful ransomware attack in February 2024, which could disrupt business operations[188]. Employee and Management - The Company had 21 employees as of December 31, 2024, and values its relationship with its employees[67]. - The company is dependent on key executives, including the CEO, for implementing business plans and growth strategies[118]. Stock and Shareholder Matters - As of April 5, 2025, the combined voting power of the company's directors and executive officers was approximately 40% of its voting securities, allowing management significant influence over shareholder matters[143]. - The company does not anticipate paying cash dividends on its common stock in the foreseeable future, planning instead to retain earnings for operations and acquisitions[163]. - The issuance of shares upon exercise of outstanding warrants and options could substantially dilute existing stockholders' percentage ownership[160]. Regulatory and Economic Factors - Changes in U.S. and foreign trade regulations, including tariffs, could have a material adverse effect on the company's operations and financial condition[174]. - The company is subject to changes in U.S. and foreign government administrative policy, which could adversely affect its business and financial condition[176]. - Changes in effective tax rates could adversely affect the company's results, particularly due to the 2017 Tax Cuts and Jobs Act, which may increase taxable income[180]. Real Estate and Lease Agreements - The company has entered into a lease agreement for approximately 12,000 square feet of office space in New York, effective February 29, 2024, expiring in 2031[206]. - The company currently leases approximately 29,600 square feet of office space at a former location, with the lease expiring on October 30, 2027, and has subleased this space to a third party[207].

Revenue and Profitability - Subscription revenue for the three months ended April 30, 2025, was $673 million, a 12% increase from $603 million in the same period of 2024[117] - Total revenue for the same period was $688 million, up from $617 million, reflecting a 12% year-over-year growth[117] - The gross profit margin improved to 77% for the three months ended April 30, 2025, compared to 76% in the prior year[119] - Operating income for the three months ended April 30, 2025, was $39 million, a significant improvement from an operating loss of $47 million in the same period of 2024[117] - The company reported a net income of $62 million for the three months ended April 30, 2025, compared to a net loss of $40 million in the same period of 2024[117] - Subscription revenue constituted approximately 98% of total revenue for the three months ended April 30, 2025[119] - Gross profit for the same period was $533 million, representing a 14% increase from $469 million year-over-year[125] - Subscription gross margin improved to 80% from 78% year-over-year, driven by improved spend efficiency[126] Customer Metrics - The dollar-based net retention rate was 106% as of April 30, 2025, indicating strong customer retention and expansion[123] - The number of customers with an annual contract value above $100,000 increased by 7% year-over-year[123] - As of April 30, 2025, the number of customers with annual contract value above $100,000 increased to 4,870 from 4,550 in 2024[145] - The dollar-based net retention rate decreased to 106% from 111% year-over-year, impacted by the macroeconomic environment[145] Expenses and Costs - The cost of subscription revenue was $136 million, resulting in a gross margin of 80% for subscription services[117] - For the three months ended April 30, 2025, total cost of revenue increased to $155 million, up 6% from $148 million in the same period of 2024[125] - Research and development expenses decreased to $154 million, down 6% from $163 million, primarily due to a reduction in stock-based compensation[131] - Sales and marketing expenses remained flat at $237 million, with a decrease in percentage of revenue from 38% to 34%[133] - General and administrative expenses decreased to $103 million, down 11% from $117 million, attributed to reduced stock-based compensation and legal settlement costs[135] Cash Flow and Investments - As of April 30, 2025, the company had cash, cash equivalents, and short-term investments totaling $2,725 million for working capital and potential acquisitions[155] - For the three months ended April 30, 2025, net cash provided by operating activities was $241 million, an increase of $22 million compared to the same period in 2024[166] - Cash used in investing activities during the three months ended April 30, 2025, was $120 million, a decrease from $194 million in the same period in 2024[167] - Cash used in financing activities was $45 million for the three months ended April 30, 2025, an increase of $8 million compared to the same period in 2024[168] Debt and Financing - In fiscal 2025, the company repurchased $42 million principal amount of the 2025 Notes for $40 million in cash, and $258 million principal amount of the 2026 Notes for $240 million in cash, resulting in an aggregate gain on early extinguishment of debt of $19 million[159] - The company issued the 2025 Notes with a principal amount of $1,060 million, of which $510 million remains outstanding as of April 30, 2025[183] - The 2026 Notes have a principal amount of $1,150 million, with $350 million remaining outstanding as of April 30, 2025[184] - The company continues to assess its capital structure and may seek additional equity or debt financing in the future[160] Market and Competitive Landscape - The company experienced revenue growth rates of 43%, 22%, and 15% during fiscal years 2023, 2024, and 2025, respectively[196] - The company incurred net losses of $355 million and $815 million in fiscal years 2024 and 2023, respectively, despite achieving profitability in fiscal 2025[204] - The company faces intense competition, particularly from larger, well-established companies, with Microsoft identified as a principal competitor[201] - The company’s revenue growth is dependent on retaining existing customers and expanding commercial relationships, which may fluctuate due to various factors[206] - The company may experience quarterly fluctuations in results due to demand variability, customer retention, and competitive landscape changes[208] Operational Risks and Challenges - The company has faced cybersecurity incidents in the past, which have harmed its reputation and financial results[195] - Economic conditions, such as inflation and interest rates, may adversely impact demand for the company’s solutions, affecting revenue[195] - The company anticipates increased operating expenses in future periods, which may not be offset by revenue growth, potentially harming financial results[198] - The company faces challenges in expanding operations internationally, including compliance with varying legal and regulatory requirements[218] - The company may need to adjust pricing strategies in response to inflation, interest rates, and competitive pressures[230] Compliance and Regulatory Issues - Compliance with evolving privacy and data security regulations may impose additional burdens and costs, potentially limiting service adoption[247] - The company has attained multiple privacy certifications, including the Privacy Recognition for Processors and the European Union Cloud Code of Conduct, Level 2, which are essential for retaining and attracting customers[255] - Increasing global data protection laws may raise compliance costs and expose the company to greater enforcement risks, potentially impacting business operations[258] - Non-compliance with data protection obligations can trigger significant fines and penalties, leading to increased resource expenditure for compliance[260] Technology and Security - The company has implemented various security measures, but these may not be sufficient to prevent all cybersecurity threats[239] - The company relies on third-party service providers for technology infrastructure, which may lead to service interruptions if these providers fail to meet capacity requirements[236] - The company must ensure its solutions integrate with various operating systems and platforms; failure to do so may reduce competitiveness and harm results[265] - The company is investing in expanding its AI capabilities, including the deployment and improvement of existing machine learning and AI technologies, as well as developing new product features using generative AI[273] Intellectual Property - The company faces risks related to intellectual property ownership and licensing rights surrounding AI technologies, which may require additional investment in proprietary datasets and machine learning models[274] - The company relies on a combination of patents, copyrights, trademarks, and trade secret laws to protect its proprietary rights, but these protections may be inadequate[275] - The company may incur significant costs related to monitoring and enforcing its intellectual property rights, which could distract management and impair its competitive position[277]

Financial Performance - Net sales for the three months ended May 4, 2025, increased to $39,856 million, up from $36,418 million in the same period last year, representing a growth of 6.7%[20] - Gross profit for the same period was $13,459 million, compared to $12,433 million, reflecting an increase of 8.2%[20] - Operating income for Q1 2025 was $5,133 million, slightly up from $5,079 million in Q1 2024, indicating a growth of 1.1%[20] - Net earnings decreased to $3,433 million from $3,600 million year-over-year, a decline of 4.6%[20] - Basic earnings per share for Q1 2025 was $3.46, down from $3.64 in Q1 2024, a decrease of 4.9%[20] Assets and Liabilities - Total assets increased to $99,157 million as of May 4, 2025, compared to $96,119 million at February 2, 2025, a rise of 3.2%[17] - Total liabilities rose to $91,202 million from $89,479 million, reflecting an increase of 1.9%[17] - Total lease liabilities increased to $12,051 million as of May 4, 2025, compared to $11,928 million as of February 2, 2025[49] - Goodwill increased to $19,568 million as of May 4, 2025, from $19,475 million at the end of the previous quarter, reflecting recent acquisitions[51] Cash Flow and Capital Expenditures - Cash and cash equivalents at the end of the period were $1,369 million, down from $4,264 million at the beginning of the period, a decrease of 67.8%[27] - Net cash provided by operating activities for Q1 2025 was $4,325 million, compared to $5,497 million in Q1 2024, a decline of 21.3%[27] - The company reported capital expenditures of $806 million for the quarter, slightly down from $847 million in the same period last year[27] - Cash flow from operations was $4.3 billion, used to pay $2.3 billion in dividends, repay $1.1 billion of long-term debt, and fund $806 million in capital expenditures[79] - The company plans to invest approximately $4 billion in capital expenditures for fiscal 2025, focusing on customer experience and technology improvements[110] Sales and Revenue Segments - Net sales for the Primary segment increased to $37,287 million for the three months ended May 4, 2025, compared to $36,418 million for the same period in 2024, representing a growth of 2.4%[40] - The cost of sales for the Primary segment was $24,384 million, up from $23,985 million, indicating an increase of 1.7% year-over-year[40] - Operating income for the Primary segment was $5,046 million, slightly down from $5,079 million, reflecting a decrease of 0.6%[40] - Net sales in the U.S. reached $37,224 million, a significant increase from $33,569 million, marking a growth of 10.0%[44] - Net sales from products amounted to $38,512 million, compared to $35,078 million, showing an increase of 6.9%[45] - Online sales represented 15.5% of net sales in Q1 fiscal 2025, increasing by 10.9% compared to Q1 fiscal 2024, with an 8.3% increase on a comparable week basis[92] Shareholder Returns and Stock Activity - The company has approximately $11.7 billion remaining from a $15.0 billion share repurchase authorization as of May 4, 2025[64] - The company purchased a total of 323,001 shares in the first quarter of fiscal 2025 at an average price of $357.69 per share[135] - The Board of Directors approved a $15.0 billion share repurchase authorization in August 2023, which does not have a prescribed expiration date[136] - The company has not resumed share repurchase activity as of May 4, 2025, after pausing in March 2024[136] Operational Metrics - The company's inventory turnover ratio was 4.3 times at the end of the first quarter of fiscal 2025, down from 4.5 times in the same period of fiscal 2024[78] - Comparable sales decreased by 0.3% in fiscal 2025, while customer transactions increased by 2.1% to 394.8 million[87] - Total comparable sales decreased by 0.3% in Q1 fiscal 2025, reflecting a 0.5% decrease in comparable customer transactions[94] Expenses and Profitability - SG&A expenses rose by $863 million, or 12.9%, to $7.5 billion in Q1 fiscal 2025, representing 18.9% of net sales[98] - Gross profit increased by 8.3% to $13.5 billion in Q1 fiscal 2025, with a gross profit margin of 33.8%, down from 34.1% in Q1 fiscal 2024[96] - Diluted earnings per share decreased to $3.45 in Q1 fiscal 2025 from $3.63 in Q1 fiscal 2024, primarily due to lower net earnings[102] Regulatory and Compliance - The company reported approximately $1.5 million in penalties paid to the EPA related to a civil consent decree, with expectations to recoup additional amounts from fines levied against third-party installers[132] - The company expects the civil consent decree with the EPA to be terminated after the stipulated penalties are resolved[132] - The company evaluated its disclosure controls and procedures and concluded they were effective as of May 4, 2025[125] Business Initiatives - The company is undergoing a business transformation initiative, including upgrading accounting and finance systems, with plans to continue migrating additional processes over the next few years[126] - The company completed the acquisition of SRS for $18.0 billion, primarily funded through commercial paper borrowings and long-term debt issuance[72] - The company acquired SRS, a leading residential specialty trade distribution company, in June 2024, which is expected to enhance market presence[39]

Business Combination and Corporate Changes - Following the Business Combination on March 13, 2024, the company changed its name from "ESGEN Acquisition Corporation" to "Zeo Energy Corp."[361] - The Business Combination was accounted for as a reverse recapitalization, with Sunergy being treated as the accounting acquirer[367]. - The primary sellers retained 83.8% ownership of the company immediately following the Business Combination, ensuring no change in control[372]. Financial Performance - Revenue decreased by approximately $36.4 million, from $109.7 million in 2023 to $73.2 million in 2024, a decline of 33.2%[400]. - Gross profit decreased from $49.8 million in 2023 to $34.4 million in 2024, resulting in a gross margin increase from 45.4% to 47.0%[378]. - Adjusted EBITDA decreased from $6.98 million in 2023 to $1.96 million in 2024, with the adjusted EBITDA margin dropping from 6.4% to 2.7%[378]. - Contribution profit decreased from $19.7 million in 2023 to $14.6 million in 2024, with the contribution margin increasing from 18.0% to 19.9%[378]. - Cost of goods sold decreased by $21.4 million, from $59.4 million in 2023 to $38.0 million in 2024, maintaining a cost of goods sold percentage of 52.4%[401]. - General and administrative expenses increased by $8.7 million, from $12.9 million in 2023 to $21.6 million in 2024, primarily due to stock compensation expenses[404]. - Sales and marketing expenses decreased by $10.7 million, from $30.3 million in 2023 to $19.6 million in 2024, attributed to reduced commissions from lower revenue[403]. - Total revenue for 2024 was $73.2 million, down from $109.7 million in 2023, reflecting a decline in overall sales[419]. Cash Flow and Financial Position - As of December 31, 2024, cash and cash equivalents were approximately $5.6 million, down from $8.0 million in 2023[407]. - Net cash used in operating activities was approximately $8.7 million in 2024, a decrease of $20.7 million compared to a net cash provided of approximately $12.0 million in 2023[412]. - Net cash provided by financing activities was approximately $13.7 million in 2024, a significant increase of $18.9 million compared to a net cash used of $5.2 million in 2023[414]. - The company incurred approximately $7.4 million in net cash used in investing activities in 2024, compared to $1.0 million in 2023, primarily due to asset purchases[413]. - The company cannot assure that its cash and cash equivalents will be sufficient for its business needs over the next twelve months, indicating potential future financing requirements[410]. Sales and Market Strategy - The company has approximately 290 sales agents and 22 independent sales dealers as of December 31, 2024, focusing on a capital-light business strategy[358]. - The majority of sales in 2023 were generated in Florida, with a significant split between Florida and Ohio in 2024, indicating a focus on operational efficiency due to revenue decreases[359]. - The company aims to expand into new markets with favorable net metering policies and cost incentives, enhancing its customer base[359]. - The company plans to expand its residential sales into new markets, currently operating in eight states and servicing customers in 16 states[384]. - The company intends to expand its roofing business alongside solar installations to improve processing times and customer financing options[385]. - Revenues from lease arrangements accounted for 64% of sales in 2024, up from 21% in 2023, indicating a significant shift in customer financing preferences[412]. Operational Developments - The company has built a scalable regional operating platform to support rapid sales and installation growth through a multi-channel marketing approach[356]. - The company entered into a Promissory Note for $2.4 million in December 2024 to fund the creation of a year-round sales team[409]. - The company has approximately $3.6 million in trade-credit with solar equipment distributors and $2.4 million in a convertible promissory note with a related party[415].

Business Combination and Corporate Changes - Following the Business Combination on March 13, 2024, the company changed its name from "ESGEN Acquisition Corporation" to "Zeo Energy Corp."[361] - The Business Combination was accounted for as a reverse recapitalization, with Sunergy being treated as the accounting acquirer[367]. - The company retains majority control post-Business Combination, with the Primary Sellers owning 83.8% of the equity[372]. Financial Performance - Revenue decreased by approximately $36.4 million, from $109.7 million in 2023 to $73.2 million in 2024, a decline of 33.2%[400]. - Gross profit fell to $34.4 million in 2024, down from $49.8 million in 2023, with a gross margin of 47.0% compared to 45.4% in the previous year[378]. - Adjusted EBITDA decreased to $1.96 million in 2024, with an adjusted EBITDA margin of 2.7%, down from $6.98 million and 6.4% in 2023[378]. - Net loss increased to $9.87 million in 2024, compared to a net income of $4.85 million in 2023, representing a significant decline[378]. - Contribution profit for 2024 was $14.6 million, a decrease from $19.7 million in 2023, with a contribution margin of 19.9% compared to 18.0% in 2023[419]. Expenses and Cost Management - General and administrative expenses rose by $8.7 million to $21.6 million in 2024, primarily due to $7.8 million in stock compensation expenses[404]. - Sales and marketing expenses decreased by $10.7 million to $19.6 million in 2024, attributed to reduced commissions from lower revenue[403]. - Cost of goods sold decreased by $21.4 million, from $59.4 million in 2023 to $38.0 million in 2024, maintaining a cost of goods sold percentage of 52.4%[401]. Cash Flow and Capital Management - As of December 31, 2024, cash and cash equivalents were approximately $5.6 million, down from $8.0 million in 2023[407]. - Net cash used in operating activities was approximately $8.7 million in 2024, a decrease of $20.7 million compared to a net cash provided of approximately $12.0 million in 2023[412]. - Net cash used in investing activities was approximately $7.4 million in 2024, significantly higher than $1.0 million in 2023, primarily due to a $4.0 million asset purchase[413]. - The company cannot assure that its cash and cash equivalents will be sufficient for its business needs over the next twelve months, indicating potential future capital requirements[410]. Sales and Market Strategy - The company has approximately 290 sales agents and 22 independent sales dealers as of December 31, 2024, focusing on a capital-light business strategy[358]. - The majority of sales in 2023 were generated in Florida, with a significant split between Florida and Ohio in 2024, indicating a focus on operational efficiency due to revenue decreases[359]. - The company aims to expand into new markets with favorable net metering policies and cost incentives, enhancing its customer base[359]. - The company plans to expand its residential sales into new markets, currently operating in eight states and servicing customers in 16 states[384]. - The company intends to grow its in-house sales force and introduce a year-round sales team in 2025 to enhance operational efficiency[386]. Financing Activities - The company raised approximately $13.7 million in net cash from financing activities in 2024, primarily from the issuance of convertible preferred stock[414]. - The company has approximately $3.6 million in trade-credit with solar equipment distributors and $2.4 million in a convertible promissory note with a related party[415]. - The company entered into a promissory note for $2.4 million in December 2024 to fund the creation of a year-round sales team[409]. Revenue Composition - Revenues associated with lease arrangements accounted for 64% of sales in 2024, up from 21% in 2023[412]. - Total revenue for 2024 was $73.2 million, down from $109.7 million in 2023, resulting in a gross profit of $34.4 million compared to $49.8 million in 2023[419].

Financial Performance - Net income increased by 27% to $156.8 million, or $1.12 per diluted share, in Q2 2025, compared to $123.1 million, or $0.88 per diluted share, in Q2 2024[1] - Net sales reached a record $1,097.8 million in Q2 2025, up 15% from $955.4 million in Q2 2024, with an operating income increase of 19% to $248.2 million[2] - EBITDA increased by 18% to $297.7 million in Q2 2025, up from $252.4 million in Q2 2024[5] - Operating income for the three months ended April 30, 2025, was $248,152, up 18.6% from $209,153 in the prior year[34] - Net income attributable to HEICO for the three months ended April 30, 2025, was $156,793, representing a 27.4% increase from $123,146 in 2024[34] Cash Flow and Debt Management - Cash flow from operating activities rose by 45% to $204.7 million in Q2 2025, compared to $141.1 million in Q2 2024[7] - The total debt to net income ratio improved to 3.79x as of April 30, 2025, down from 4.34x as of October 31, 2024[8] - The net debt to EBITDA ratio improved to 1.86 as of April 30, 2025, compared to 2.06 on October 31, 2024[43] Segment Performance - The Flight Support Group's net sales increased by 19% to $767.1 million in Q2 2025, driven by a 14% organic net sales growth[11] - The Electronic Technologies Group's net sales increased by 7% to $342.2 million in Q2 2025, reflecting organic growth of 4%[18] - The Flight Support Group's operating margin improved to 24.1% in Q2 2025, up from 23.0% in Q2 2024[15] - The Electronic Technologies Group's operating margin was 22.8% in Q2 2025, down from 23.6% in Q2 2024, primarily due to a lower gross profit margin[23] Overall Growth - For the six months ended April 30, 2025, net sales reached $2,128,042, a 14.9% increase compared to $1,851,758 in the same period of 2024[36] - The company's EBITDA for the six months ended April 30, 2025, was $571,614, up 19.9% from $476,838 in 2024[43] Assets and Cash Position - Cash and cash equivalents increased to $242,309 as of April 30, 2025, compared to $204,161 at the end of the same period in 2024[42] - Total assets as of April 30, 2025, were $8,092,176, an increase from $7,592,822 on October 31, 2024[41] Tax Benefits - The company recognized a $27.2 million discrete tax benefit from stock option exercises during the first quarter of fiscal 2025, increasing net income attributable to HEICO by $26.5 million[40] Sales Growth Strategy - The company aims to achieve net sales growth across both segments, driven by strong organic demand and recent acquisitions[9]

Financial Performance - Net income increased by 27% to $156.8 million, or $1.12 per diluted share, in Q2 2025, compared to $123.1 million, or $0.88 per diluted share, in Q2 2024[1] - Net sales reached a record $1,097.8 million in Q2 2025, up 15% from $955.4 million in Q2 2024[2] - Operating income rose 19% to a record $248.2 million in Q2 2025, compared to $209.2 million in Q2 2024[2] - Net sales for the three months ended April 30, 2025, increased to $1,097,820, a 14.9% rise from $955,395 in the same period of 2024[34] - Operating income for the three months ended April 30, 2025, was $248,152, up 18.6% from $209,153 in the prior year[34] - Net income attributable to HEICO for the three months ended April 30, 2025, was $156,793, representing a 27.4% increase compared to $123,146 in 2024[34] - For the six months ended April 30, 2025, net sales reached $2,128,042, a 14.9% increase from $1,851,758 in the same period of 2024[36] - The company's EBITDA for the six months ended April 30, 2025, was $571,614, up 19.9% from $476,838 in 2024[43] Cash Flow and Assets - Cash flow from operating activities increased by 45% to $204.7 million in Q2 2025, up from $141.1 million in Q2 2024[7] - Cash and cash equivalents increased to $242,309 as of April 30, 2025, compared to $162,103 at the end of October 2024[41] - Total assets grew to $8,092,176 as of April 30, 2025, from $7,592,822 at the end of October 2024[41] Debt and Ratios - The total debt to net income ratio improved to 3.79x as of April 30, 2025, down from 4.34x as of October 31, 2024[8] - The net debt to EBITDA ratio improved to 1.86 as of April 30, 2025, compared to 2.06 in the prior year[43] Segment Performance - The Flight Support Group's net sales increased 19% to a record $767.1 million in Q2 2025, up from $647.2 million in Q2 2024[11] - The Electronic Technologies Group's net sales increased 7% to $342.2 million in Q2 2025, up from $319.3 million in Q2 2024[18] - The Flight Support Group achieved 14% organic net sales growth in Q2 2025, reflecting increased demand across all product lines[10] - The Electronic Technologies Group's operating margin was 22.8% in Q2 2025, down from 23.6% in Q2 2024, primarily due to a lower gross profit margin[23] Tax Benefits - The company recognized a $27.2 million discrete tax benefit from stock option exercises during the first quarter of fiscal 2025, increasing net income attributable to HEICO by $26.5 million[40] Growth Strategy - The Company aims to achieve net sales growth across both segments, driven by strong organic demand and recent acquisitions[9]

Financial Performance - The Company reported a net income of $7,675 for 2024, a significant increase from $795 in 2023, reflecting a growth of 867%[81] - Total revenue for 2024 was $78,508, up $18,928 or 32% from $59,580 in 2023, driven by increased sales in barrier rentals, shipping, installation, and utility products[86] - Operating income surged to $9,899 in 2024, an increase of $8,781 or 785% compared to $1,118 in 2023, primarily due to higher revenues and lower cost of sales[102] - The Company reported a net income of $7,675 for the year ended December 31, 2024, compared to $795 for 2023, with earnings per share increasing from $0.15 to $1.45[104] Sales and Revenue Growth - Soundwall sales increased by 54% in 2024 compared to 2023, attributed to higher production volumes across all plants[88] - Architectural sales saw a remarkable increase of 272% in 2024, linked to the production of two major projects initiated in early 2024[89] - Utility product sales surged by 171% in 2024, driven by the growing market for dry utility vaults supporting data center expansion[94] - Barrier rentals increased by 90% in 2024, with core rental fleet revenue rising by 52%, reflecting a strategic shift from barrier sales to rentals[96] Cost Management and Margins - Cost of sales as a percentage of revenue decreased to 78% in 2024 from 86% in 2023, indicating improved margins[82] - General and administrative expenses rose by 9% to $6,554 in 2024, influenced by higher salary rates and increased credit loss allowances[100] Cash Flow and Capital Expenditures - Cash provided by operations was $5,584, while cash disbursements from investing activities totaled $6,576, leading to a decrease in cash from $9,175 in 2023 to $7,548 in 2024[111] - Capital expenditures increased from $5,010 in 2023 to $6,629 in 2024, primarily for the expansion of the North Carolina production facility and new manufacturing equipment[112] - The Company anticipates capital spending for 2025 to be approximately $5,000, focusing on increased production capacity and miscellaneous manufacturing equipment[112] Accounts Receivable and Inventory - The Company's accounts receivable balance increased to $19,420 in 2024 from $17,209 in 2023, attributed to increased revenue, with days sales outstanding (DSO) improving from 113 days in 2023 to 88 days in 2024[116] - Inventory rose to $6,677 in 2024 from $5,150 in 2023, with annual inventory turns decreasing from 15.0 to 10.0[117] Sales Backlog - The Company's sales backlog as of March 3, 2025, was approximately $59.5 million, slightly down from $60.8 million the previous year, with expectations for increased sales volumes in 2025[85] - The Company had a sales backlog of approximately $59.5 million as of March 3, 2025, compared to $60.8 million in 2024, indicating stable demand for its products[123] Strategic Initiatives - The Company is continuing its strategy of innovation and new product development to mitigate risks associated with recessionary economic conditions[124] - The Company is implementing lean business practices to improve production quality, reduce defects, and increase sales volume[125] - The Company has a $5,000 line of credit with no balance outstanding as of December 31, 2024, which is collateralized by accounts receivable and inventory[110]

Financial Performance - Champion Homes reported net sales of approximately $2.5 billion for fiscal 2025, maintaining a market share of about 2.5% in the total U.S. housing market[16]. - For fiscal 2025, net sales increased by $458.6 million, or 22.7%, to $2.5 billion compared to fiscal 2024[162]. - U.S. manufacturing and retail net sales rose by $472.4 million, or 25.1%, driven by strong demand and the acquisition of Regional Homes[163]. - The number of U.S. homes sold increased by 20.6% to 25,273 units, with an average home selling price of $93.3 thousand, up 3.7%[162][163]. - The backlog of customer orders at the end of fiscal 2025 was $343.4 million, an increase from $315.8 million in fiscal 2024[157]. - The company's gross profit margin improved to 26.7% in fiscal 2025, up from 24.0% in fiscal 2024[160]. - Total gross profit for fiscal 2025 was $664.0 million, an increase of $178.2 million or 36.7% compared to $485.8 million in fiscal 2024[167]. - Adjusted EBITDA for fiscal 2025 was $285.1 million, representing 11.5% of net sales, compared to 12.1% in fiscal 2024[160]. - Interest (income), net was $(17.0) million in fiscal 2025, a decrease of $11.3 million or 39.9% compared to $(28.3) million in fiscal 2024[175]. - Income tax expense for fiscal 2025 was $53.7 million, representing an effective tax rate of 20.9%, compared to $47.1 million and 23.5% in fiscal 2024[177]. Operations and Manufacturing - The company operates 48 manufacturing facilities across 20 states in the U.S. and three provinces in Canada, employing around 9,000 individuals[16][36]. - The company is expanding its retail presence with 72 active sales centers across the U.S. as of the end of fiscal 2025[18]. - The company maintains a one to three-week supply of raw materials at manufacturing facilities to mitigate supply chain challenges[45]. - The company began production in previously idled facilities in Decatur, Indiana, and Bartow, Florida, to enhance manufacturing capacity[153]. - The company owns or leases six idle manufacturing facilities that could be utilized for additional production capacity, requiring capital investments[132]. Market Trends and Challenges - The housing industry experiences seasonal fluctuations, with demand for single-family new home products typically peaking in spring and summer, leading to decreased traffic during holidays and winter months[69]. - Raw material shortages and price increases, particularly for lumber and steel, could materially impact construction costs and cash flows, especially during high demand periods[72]. - In fiscal 2025, the U.S. imposed increased tariffs on foreign imports, which may lead to higher costs of goods and potential supply chain disruptions, adversely affecting financial results[73]. - Labor shortages and turnover in the homebuilding industry can increase production costs and delays, adversely affecting net sales and operational results[89]. - Increased costs of transportation due to a lack of qualified drivers may impact the cost of goods sold and the ability to meet customer demand timely[90]. - Changes in consumer preferences and the introduction of new product features are critical for maintaining competitiveness in the factory-built housing market[80]. - Regulatory changes related to environmental standards and zoning ordinances could adversely affect the production and sale of factory-built homes, impacting sales and cash flows[85][86]. - Public health issues, such as pandemics, could disrupt operations and have a material adverse effect on business results[84]. Strategic Initiatives - Champion Homes began lending activities through Champion Financing, providing tailored financing products to enhance home ownership accessibility[19]. - The company is focused on enhancing operational excellence and leveraging digital technologies to improve customer engagement and streamline processes[21][24]. - The company is pursuing strategic acquisitions to expand its capabilities efficiently, including retail locations and manufacturing facilities[24]. - The company acquired Regional Homes in October 2023, expanding its manufacturing and retail presence in the Southeast U.S.[152]. Financial Position and Cash Flow - The company had cash, cash equivalents, and restricted cash of $610.3 million at the end of fiscal 2025, up from $495.1 million at the end of fiscal 2024[184]. - The company has a $200.0 million revolving credit facility with no borrowings as of March 29, 2025, and total available borrowings under the credit agreement were $168.5 million as of March 30, 2024[189]. - The company anticipates compliance with its debt covenants and projects cash availability to exceed operational needs for the next year[184]. - Cash used in investing activities significantly decreased to $46.2 million in fiscal 2025 from $485.7 million in fiscal 2024, primarily due to the absence of major acquisitions[187]. - Cash used in financing activities was $73.0 million in fiscal 2025, compared to $10.9 million provided in fiscal 2024, largely due to $80.0 million in common stock repurchases[188]. Risks and Liabilities - The company faces risks from product liability claims and warranty claims, which can be costly and impact financial results[95]. - Increased interest rates and inflation have limited the purchasing power of potential customers, adversely affecting sales and financial results[107][110]. - The availability of wholesale financing for retailers is limited, which could negatively impact inventory levels and sales[111]. - Contingent repurchase obligations related to wholesale financing may incur additional expenses and reduce cash flows[112]. - The company has contingent liabilities totaling $17.5 million in surety bonds and $31.5 million in letters of credit as of March 29, 2025[194]. - The company recorded charges of $34.5 million for a remediation plan related to water intrusion product liability claims during the fourth quarter of fiscal 2024[197]. Corporate Governance and Compliance - The company is subject to extensive regulations affecting the production and sale of factory-built housing, with non-compliance potentially leading to sanctions[87]. - A material weakness in internal control over financial reporting was identified due to ineffective controls in the Regional Homes retail operations acquired in October 2023[117]. - The company has established a comprehensive cybersecurity program overseen by the Audit Committee, focusing on risk management and incident response[122][123]. - The company does not expect any material adverse effects from cybersecurity threats on its business strategy or financial condition[129].