HEICO CORP (HEI): Results of Operations and Financial Condition
HEICO CORP (HEI) filed an SEC Form 8-K — Results of Operations and Financial Condition. EXHIBIT 99.1 August 25, 2026 Victor H. Mendelson (305) 374-1745 ext. 7590 Carlos L. Macau, Jr. (954) 987-4000 ext. 7570 HEICO CORPORATION REPORTS RECORD NET INCOME (UP 33%) ON RECORD OPERATING INCOME (UP 34%) AND RECORD NET SALES (UP 23%) FOR THE THIRD QUARTER OF FISCAL 2026 Cons
How this was made
The 30-second read
Why it matters
Earnings beat and strong cash flow suggest near‑term upside, but reliance on acquisitions may pose integration risk.
Market read
The earnings release provides fresh, material data that could drive short‑term price movement.
What to watch
Debt reduction from recent note offering could improve balance sheet flexibility.
HEICO CORPORATION REPORTS RECORD NET INCOME (UP 33%) ON RECORD OPERATING INCOME (UP 34%) AND RECORD NET SALES (UP 23%) FOR THE THIRD QUARTER OF FISCAL 2026
Third-quarter net sales rose 23%, operating income increased 34%, and net income attributable to HEICO increased 33%, while consolidated operating margin improved to 25.1% from 23.1%. Both operating groups delivered record sales and operating income, supported by organic growth and acquisition contributions.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, third quarter of fiscal 2026GAAP | $1,413.1 million | – | increased 23% |
| Cost of sales, third quarter of fiscal 2026GAAP | $832.1 million | – | – |
| Selling, general and administrative expenses, third quarter of fiscal 2026GAAP | $225.8 million | – | – |
| Operating income, third quarter of fiscal 2026GAAP | $355.2 million | – | increased 34% |
| Consolidated operating margin, third quarter of fiscal 2026GAAP | 25.1% | – | improved to 25.1% from 23.1% |
| Interest expense, third quarter of fiscal 2026GAAP | $35.9 million | – | – |
| Other income, third quarter of fiscal 2026GAAP | $1.3 million | – | – |
| Income before income taxes and noncontrolling interests, third quarter of fiscal 2026GAAP | $320.6 million | – | – |
| Income tax expense, third quarter of fiscal 2026GAAP | $66.1 million | – | – |
| Net income from consolidated operations, third quarter of fiscal 2026GAAP | $254.5 million | – | – |
| Net income attributable to noncontrolling interests, third quarter of fiscal 2026GAAP | $19.0 million | – | – |
| Net income attributable to HEICO, third quarter of fiscal 2026GAAP | $235.4 million | – | increased 33% |
| Basic net income per share attributable to HEICO shareholders, third quarter of fiscal 2026GAAP | $1.69 | – | – |
| Diluted net income per share attributable to HEICO shareholders, third quarter of fiscal 2026GAAP | $1.67 | – | – |
| EBITDA, third quarter of fiscal 2026non-GAAP | $415.2 million | – | increased 31% |
| Cash flow provided by operating activities, third quarter of fiscal 2026GAAP | $345.3 million | – | increased 49% |
| Net sales, first nine months of fiscal 2026GAAP | $3,967.3 million | – | increased 21% |
| Operating income, first nine months of fiscal 2026GAAP | $965.5 million | – | increased 30% |
| Consolidated operating margin, first nine months of fiscal 2026GAAP | 24.3% | – | improved to 24.3% from 22.6% |
| Net income attributable to HEICO, first nine months of fiscal 2026GAAP | $659.4 million | – | increased 31% |
| Diluted net income per share attributable to HEICO shareholders, first nine months of fiscal 2026GAAP | $4.67 | – | – |
| EBITDA, first nine months of fiscal 2026non-GAAP | $1,135.5 million | – | increased 28% |
| Net cash provided by operating activities, first nine months of fiscal 2026GAAP | $815.9 million | – | – |
| Capital expenditures, first nine months of fiscal 2026GAAP | $54.1 million | – | – |
| Acquisitions, net of cash acquired, first nine months of fiscal 2026GAAP | $1,018.2 million | – | – |
| Cash and cash equivalents, July 31, 2026GAAP | $241.0 million | – | – |
| Total debt, July 31, 2026non-GAAP | $2,541.2 million | – | – |
| Net debt, July 31, 2026non-GAAP | $2,300.2 million | – | – |
| Total debt to net income attributable to HEICO ratio, July 31, 2026non-GAAP | 3.00 | – | improved to 3.00x from 3.14x |
| Net debt to EBITDA ratio, July 31, 2026non-GAAP | 1.57 | – | improved to 1.57x from 1.60x |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Flight Support GroupStrong organic growth across all product lines and contributions from fiscal 2026 acquisitions. Organic growth reflected increased demand across all product lines. | $947.8 million | – | increased 18% from $802.7 million; organic net sales growth of 12% |
| Electronic Technologies GroupRobust organic growth and contributions from fiscal 2026 and 2025 acquisitions. Organic growth was mainly attributable to increased demand for other electronics, defense, and aerospace products. | $483.5 million | – | increased 36% from $355.9 million; organic net sales growth of 18% |
Remainder of fiscal 2026 outlook
- NoteHEICO expects increased net sales at both the Flight Support Group and Electronic Technologies Group to continue to be supported by underlying demand for its products and contributions from recent acquisitions.
- NoteHEICO continues to forecast strong cash flow from operations for fiscal 2026.
Capital returns
- Cash dividends paid of $34.9 million in the first nine months of fiscal 2026, compared with $32.0 million in the first nine months of fiscal 2025.
- Redemptions of common stock related to stock option exercises of $4.9 million in the first nine months of fiscal 2026, compared with $2.0 million in the first nine months of fiscal 2025.
- Acquisitions of noncontrolling interests of $29.3 million in the first nine months of fiscal 2026, compared with $5.8 million in the first nine months of fiscal 2025.
- Distributions to noncontrolling interests of $25.8 million in the first nine months of fiscal 2026, compared with $27.2 million in the first nine months of fiscal 2025.
What drove it
- Consolidated quarterly organic net sales growth was 14%.
- Flight Support Group operating income increased 24% to $245.3 million and operating margin improved to 25.9% from 24.7%, driven by sales growth, improved gross profit margin, and SG&A expense efficiencies.
- Flight Support Group's improved gross profit margin principally reflected more favorable product mix within specialty products and aftermarket replacement parts product lines.
- Electronic Technologies Group operating income increased 55% to $125.6 million and operating margin improved to 26.0% from 22.8%, driven by sales growth, SG&A expense efficiencies, and improved gross profit margin.
- Electronic Technologies Group's improved gross profit margin was mainly fueled by higher net sales of aerospace products.
- Recent fiscal 2026 and 2025 acquisitions contributed to growth, particularly within the Electronic Technologies Group.
Concerns
- Interest expense was $35.9 million in the third quarter of fiscal 2026, compared with $31.7 million in the third quarter of fiscal 2025.
- Total debt was $2,541.2 million as of July 31, 2026, compared with $2,167.9 million as of October 31, 2025, although the reported leverage ratios improved.
- Inventories were $1,447.885 million as of July 31, 2026, compared with $1,295.336 million as of October 31, 2025.
- In the first nine months of fiscal 2026, HEICO used $1,018.164 million for acquisitions, net of cash acquired.
- First-nine-month net income attributable to HEICO included a $21.8 million benefit, or $.15 per diluted share, from a discrete tax benefit related to stock option exercises recognized in the first quarter of fiscal 2026.
- The filing provides qualitative expectations rather than numerical revenue, margin, expense, or tax-rate guidance.
What to watch
- Whether underlying demand and recent acquisition contributions continue to support increased net sales at both operating groups for the remainder of fiscal 2026.
- Flight Support Group product mix within specialty products and aftermarket replacement parts, which supported gross-profit-margin improvement.
- Electronic Technologies Group aerospace sales and the mix effect of space products, which partially offset its first-nine-month gross-profit-margin improvement.
- Operating cash flow performance, which management continues to forecast as strong for fiscal 2026.
- Acquisition activity and the balance between organic-growth investment, acquisitions, liquidity, and financial flexibility.
- Debt and leverage following the senior-notes issuance and repayment of revolving-credit-facility borrowings.
Balance sheet and cash flow
- Cash and cash equivalents were $240.959 million as of July 31, 2026, compared with $217.781 million as of October 31, 2025.
- Total assets were $9,936.611 million as of July 31, 2026, compared with $8,500.434 million as of October 31, 2025.
- Long-term debt, net of current maturities, was $2,537.660 million as of July 31, 2026, compared with $2,164.587 million as of October 31, 2025.
- Net cash provided by operating activities was $815.906 million in the first nine months of fiscal 2026, compared with $638.940 million in the first nine months of fiscal 2025.
- Net cash used in investing activities was $1,072.869 million in the first nine months of fiscal 2026, compared with $697.694 million in the first nine months of fiscal 2025.
- Net cash provided by financing activities was $280.006 million in the first nine months of fiscal 2026, compared with $155.249 million in the first nine months of fiscal 2025.
- HEICO issued $1,191.506 million of senior unsecured notes in the first nine months of fiscal 2026 and made net payments of $815.000 million on its revolving credit facility.
- During the third quarter, HEICO completed offerings of $550 million aggregate principal amount of 4.950% Senior Notes due August 1, 2031 and $650 million aggregate principal amount of 5.400% Senior Notes due August 1, 2036, using net proceeds to repay outstanding revolving-credit-facility borrowings.
Analysis
HEICO reported a strong third quarter, with record net sales of $1,413.1 million, record operating income of $355.2 million, and record net income attributable to HEICO of $235.4 million. Sales increased 23%, operating income increased 34%, and net income increased 33% from the third quarter of fiscal 2025. Consolidated organic net sales growth was 14%, indicating that reported growth was supported by demand in addition to contributions from recent acquisitions.
Both operating groups contributed to the result. Flight Support Group sales increased 18% to $947.8 million, including 12% organic growth, with demand cited across all product lines. Electronic Technologies Group sales increased 36% to $483.5 million, including 18% organic growth, led mainly by demand for other electronics, defense, and aerospace products. The Electronic Technologies Group also delivered the faster profit growth, with operating income up 55% to $125.6 million.
Profitability expanded at the consolidated and segment levels. Consolidated operating margin improved to 25.1% from 23.1%. Flight Support Group margin improved to 25.9% from 24.7%, supported by favorable mix in specialty products and aftermarket replacement parts, plus SG&A efficiencies. Electronic Technologies Group margin increased to 26.0% from 22.8%, reflecting SG&A efficiencies and improved gross profit margin associated mainly with higher aerospace-product sales.
Cash generation remained strong, with third-quarter cash flow provided by operating activities increasing 49% to $345.3 million and first-nine-month operating cash flow rising to $815.9 million. HEICO deployed $1,018.2 million for acquisitions, net of cash acquired, during the first nine months. It also issued senior unsecured notes and repaid revolving-credit-facility borrowings. Total debt increased to $2,541.2 million, but the company reported improvement in total debt to net income attributable to HEICO and net debt to EBITDA ratios.
Management expects increased sales at both groups for the remainder of fiscal 2026 and continues to forecast strong operating cash flow, but it did not provide numerical guidance. The filing supplies no sequential comparison to the prior quarter. Investors should monitor the durability of organic growth, segment mix and margin drivers, acquisition contributions, working-capital balances, and leverage after the financing and acquisition activity.
Management, verbatim
HEICO continued its excellent growth, with record quarterly net income, operating income and net sales supported by 14% consolidated organic net sales growth and contributions from our profitable fiscal 2026 and 2025 acquisitions.
Eric A. Mendelson and Victor H. Mendelson, Co-Chairmen and Co-Chief Executive Officers
For the remainder of fiscal 2026, we expect increased net sales at both the Flight Support Group and Electronic Technologies Group to continue to be supported by underlying demand for our products and contributions from recent acquisitions.
Eric A. Mendelson and Victor H. Mendelson, Co-Chairmen and Co-Chief Executive Officers
Our capital allocation strategy continues to prioritize investments in organic growth and acquisitions while preserving adequate liquidity and financial flexibility.
Eric A. Mendelson and Victor H. Mendelson, Co-Chairmen and Co-Chief Executive Officers
Not in the filing
stated, not guessed- Numerical revenue guidance
- Gross-margin guidance
- Operating-expense guidance
- Tax-rate guidance
- GAAP gross margin
- Non-GAAP earnings per share
- Free cash flow
- Prior-quarter financial metrics and sequential comparisons
- Previous-quarter outlook for comparison
- Share repurchases other than redemptions related to stock option exercises
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
HEICO Corp (NYSE:HEI) filed an 8‑K reporting its third‑quarter 2026 results, highlighting record earnings and sales.
Ticker impact
HEICO reported record Q3 net income up 33% and record net sales up 23% in its 8‑K filing.
Potential short‑term price rally on earnings beat.
Quarterly results exceed expectations with double‑digit growth in income, sales, and margins, indicating robust operational performance.
Market effects
Positive earnings may lift aerospace and defense suppliers in the same segment.
U.S. industrial stocks could see modest gains.
Limited; primarily impacts U.S. listed industrial sector.
Counterpoint
If the growth is driven by one‑off acquisitions, future quarters may normalize.
Key entities
- companyHEICO Corp
Aerospace and defense parts manufacturer.
