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Index

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
 
 
 
For the quarterly period ended January 31, 2020
 
 
 
 
 
OR
 
 
 
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
 
 
 
For the transition period from ______ to _______
Commission File Number: 001-04604
HEICO CORPORATION
(Exact name of registrant as specified in its charter)
Florida
 
65-0341002
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
 
 
3000 Taft Street, Hollywood, Florida
 
33021
(Address of principal executive offices)
 
(Zip Code)
(954) 987-4000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
 
 
 
 
 
Common Stock, $.01 par value per share
 
HEI
 
New York Stock Exchange
Class A Common Stock, $.01 par value per share
 
HEI.A
 
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer Non-accelerated filer
Smaller reporting company Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
The number of shares outstanding of each of the registrant’s classes of common stock as of February 25, 2020 is as follows:
Common Stock, $.01 par value
54,149,118

shares
Class A Common Stock, $.01 par value
80,510,464

shares


Index

HEICO CORPORATION

INDEX TO QUARTERLY REPORT ON FORM 10-Q

 
 
 
Page
Part I.
Financial Information
 
 
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
 
 
Item 3.
 
 
 
 
 
Item 4.
 
 
 
 
Part II.
Other Information
 
 
 
 
 
 
Item 6.
 
 
 
 
 



1

Index

PART I. FINANCIAL INFORMATION; Item 1. FINANCIAL STATEMENTS

HEICO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
(in thousands, except per share data)
 
 
January 31, 2020
 
October 31, 2019
ASSETS
Current assets:
 
 
 
 
Cash and cash equivalents
 

$63,971

 

$57,001

Accounts receivable, net
 
252,050

 
274,326

Contract assets
 
44,823

 
43,132

Inventories, net
 
441,250

 
420,319

Prepaid expenses and other current assets
 
22,616

 
18,953

Total current assets
 
824,710

 
813,731

 
 
 
 
 
Property, plant and equipment, net
 
172,299

 
173,345

Goodwill
 
1,301,316

 
1,268,703

Intangible assets, net
 
556,718

 
550,693

Other assets
 
242,078

 
162,739

Total assets
 

$3,097,121

 

$2,969,211

 
 
 
 
 
LIABILITIES AND EQUITY
Current liabilities:
 
 
 
 
Current maturities of long-term debt
 

$932

 

$906

Trade accounts payable
 
95,385

 
106,225

Accrued expenses and other current liabilities
 
144,472

 
178,957

Income taxes payable
 
2,742

 
3,050

Total current liabilities
 
243,531

 
289,138

 
 
 
 
 
Long-term debt, net of current maturities
 
567,864

 
561,049

Deferred income taxes
 
29,835

 
51,496

Other long-term liabilities
 
250,751

 
184,604

Total liabilities
 
1,091,981

 
1,086,287

 
 
 
 
 
Commitments and contingencies (Note 12)
 

 

 
 
 
 
 
Redeemable noncontrolling interests (Note 3)
 
195,893

 
188,264

 
 
 
 
 
Shareholders’ equity:
 
 
 
 
Preferred Stock, $.01 par value per share; 10,000 shares authorized; none issued
 

 

Common Stock, $.01 par value per share; 150,000 shares authorized; 54,149 and 54,143 shares issued and outstanding
 
541

 
541

Class A Common Stock, $.01 par value per share; 150,000 shares authorized; 80,484 and 80,353 shares issued and outstanding
 
805

 
804

Capital in excess of par value
 
287,779

 
284,609

Deferred compensation obligation
 
4,232

 
4,232

HEICO stock held by irrevocable trust
 
(4,232
)
 
(4,232
)
Accumulated other comprehensive loss
 
(19,263
)
 
(16,739
)
Retained earnings
 
1,508,784

 
1,397,327

Total HEICO shareholders’ equity
 
1,778,646

 
1,666,542

Noncontrolling interests
 
30,601

 
28,118

Total shareholders’ equity
 
1,809,247

 
1,694,660

Total liabilities and equity
 

$3,097,121

 

$2,969,211

The accompanying notes are an integral part of these condensed consolidated financial statements.


2

Index

HEICO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS – UNAUDITED
(in thousands, except per share data)
 
 
Three months ended January 31,
 
 
2020
 
2019
 
 
 
 
 
Net sales
 

$506,275

 

$466,146

 
 
 
 
 
Operating costs and expenses:
 
 
 
 
Cost of sales
 
308,228

 
283,909

Selling, general and administrative expenses
 
87,057

 
84,290

 
 
 
 
 
Total operating costs and expenses
 
395,285

 
368,199

 
 
 
 
 
Operating income
 
110,990

 
97,947

 
 
 
 
 
Interest expense
 
(4,283
)
 
(5,489
)
Other income (expense)
 
195

 
(332
)
 
 
 
 
 
Income before income taxes and noncontrolling interests
 
106,902

 
92,126

 
 
 
 
 
Income tax (benefit) expense
 
(22,900
)
 
4,100

 
 
 
 
 
Net income from consolidated operations
 
129,802

 
88,026

 
 
 
 
 
Less: Net income attributable to noncontrolling interests
 
7,914

 
8,694

 
 
 
 
 
Net income attributable to HEICO
 

$121,888

 

$79,332

 
 
 
 
 
Net income per share attributable to HEICO shareholders:
 
 
 
 
Basic
 

$.91

 

$.60

Diluted
 

$.89

 

$.58

 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
Basic
 
134,523

 
132,933

Diluted
 
137,421

 
136,978

 
 
 
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.


3

Index

HEICO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME – UNAUDITED
(in thousands)
 
 
Three months ended January 31,
 
 
2020
 
2019
 
 
 
 
 
Net income from consolidated operations
 

$129,802

 

$88,026

Other comprehensive income:
 
 
 
 
Foreign currency translation adjustments
 
(2,678
)
 
4,374

Amortization of unrealized loss on defined benefit pension plan, net of tax
 
24

 
6

Total other comprehensive (loss) income
 
(2,654
)
 
4,380

Comprehensive income from consolidated operations
 
127,148

 
92,406

Net income attributable to noncontrolling interests
 
7,914

 
8,694

Foreign currency translation adjustments attributable to noncontrolling interests
 
(130
)
 
193

Comprehensive income attributable to noncontrolling interests
 
7,784

 
8,887

Comprehensive income attributable to HEICO
 

$119,364

 

$83,519

The accompanying notes are an integral part of these condensed consolidated financial statements.



4

Index

HEICO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - UNAUDITED
(in thousands, except per share data)
 
 
 
HEICO Shareholders' Equity
 
 
 
 
 
Redeemable Noncontrolling Interests
 
Common Stock
 
Class A Common Stock
 
Capital in Excess of Par Value
 
Deferred Compensation Obligation
 
HEICO Stock Held by Irrevocable Trust
 
Accumulated Other Comprehensive Loss
 
Retained Earnings
 
Noncontrolling Interests
 
Total Shareholders' Equity
Balances as of October 31, 2019

$188,264

 

$541

 

$804

 

$284,609

 

$4,232

 

($4,232
)
 

($16,739
)
 

$1,397,327

 

$28,118

 

$1,694,660

Comprehensive income
4,767

 

 

 

 

 

 
(2,524
)
 
121,888

 
3,017

 
122,381

Cash dividends ($.08 per share)

 

 

 

 

 

 

 
(10,762
)
 

 
(10,762
)
Issuance of common stock to HEICO Savings and Investment Plan

 

 

 
1,298

 

 

 

 

 

 
1,298

Share-based compensation expense

 

 

 
2,646

 

 

 

 

 

 
2,646

Proceeds from stock option exercises

 

 
1

 
1,527

 

 

 

 

 

 
1,528

Redemptions of common stock related to stock option exercises

 

 

 
(2,562
)
 

 

 

 

 

 
(2,562
)
Noncontrolling interests assumed related to acquisitions
7,540

 

 

 

 

 

 

 

 

 

Distributions to noncontrolling interests
(4,347
)
 

 

 

 

 

 

 

 
(534
)
 
(534
)
Adjustments to redemption amount of redeemable noncontrolling interests
(331
)
 

 

 

 

 

 

 
331

 

 
331

Other

 

 

 
261

 

 

 

 

 

 
261

Balances as of January 31, 2020

$195,893

 

$541

 

$805

 

$287,779

 

$4,232

 

($4,232
)
 

($19,263
)
 

$1,508,784

 

$30,601

 

$1,809,247

 
 
 
HEICO Shareholders' Equity
 
 
 
 
 
Redeemable Noncontrolling Interests
 
Common Stock
 
Class A Common Stock
 
Capital in Excess of Par Value
 
Deferred Compensation Obligation
 
HEICO Stock Held by Irrevocable Trust
 
Accumulated Other Comprehensive Loss
 
Retained Earnings
 
Noncontrolling Interests
 
Total Shareholders' Equity
Balances as of October 31, 2018

$132,046

 

$534

 

$796

 

$320,994

 

$3,928

 

($3,928
)
 

($15,256
)
 

$1,091,183

 

$104,757

 

$1,503,008

Cumulative effect from adoption of ASC 606
819

 

 

 

 

 

 

 
13,373

 
326

 
13,699

Comprehensive income
3,639

 

 

 

 

 

 
4,187

 
79,332

 
5,248

 
88,767

Cash dividends ($.07 per share)

 

 

 

 

 

 

 
(9,305
)
 

 
(9,305
)
Issuance of common stock to HEICO Savings and Investment Plan

 

 

 
1,046

 

 

 

 

 

 
1,046

Share-based compensation expense

 

 

 
2,439

 

 

 

 

 

 
2,439

Proceeds from stock option exercises

 

 

 
66

 

 

 

 

 

 
66

Redemptions of common stock related to stock option exercises

 

 

 
(150
)
 

 

 

 

 

 
(150
)
Noncontrolling interests assumed related to acquisitions
5,116

 

 

 

 

 

 

 

 
2,355

 
2,355

Distributions to noncontrolling interests
(2,397
)
 

 

 

 

 

 

 

 
(398
)
 
(398
)
Adjustments to redemption amount of redeemable noncontrolling interests
(228
)
 

 

 

 

 

 

 
228

 

 
228

Deferred compensation obligation

 

 

 

 
115

 
(115
)
 

 

 

 

Balances as of January 31, 2019

$138,995

 

$534

 

$796

 

$324,395

 

$4,043

 

($4,043
)
 

($11,069
)
 

$1,174,811

 

$112,288

 

$1,601,755

The accompanying notes are an integral part of these condensed consolidated financial statements.



5


HEICO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(in thousands)
 
Three months ended January 31,
 
2020
 
2019
Operating Activities:
 
 
 
Net income from consolidated operations

$129,802

 

$88,026

Adjustments to reconcile net income from consolidated operations to net cash provided by operating activities:
 
 
 
Depreciation and amortization
21,583

 
20,037

Share-based compensation expense
2,646

 
2,439

Employer contributions to HEICO Savings and Investment Plan
2,613

 
2,153

Increase in accrued contingent consideration
408

 
1,862

Deferred income tax (benefit) provision
(25,718
)
 
3,798

Payment of contingent consideration
(175
)
 
(67
)
Changes in operating assets and liabilities, net of acquisitions:
 
 
 
Decrease in accounts receivable
23,734

 
4,982

(Increase) decrease in contract assets
(1,719
)
 
7,270

Increase in inventories
(20,449
)
 
(24,284
)
Increase in prepaid expenses and other current assets
(3,303
)
 
(7,921
)
Decrease in trade accounts payable
(10,678
)
 
(19,832
)
Decrease in accrued expenses and other current liabilities
(48,319
)
 
(34,537
)
Decrease in income taxes payable
(1,334
)
 
(3,636
)
Net changes in other long-term liabilities and assets related to
HEICO Leadership Compensation Plan
11,315

 
9,143

Other
730

 
133

Net cash provided by operating activities
81,136

 
49,566

 
 
 
 
Investing Activities:
 
 
 
Acquisitions, net of cash acquired
(45,343
)
 
(101,039
)
Investments related to HEICO Leadership Compensation Plan
(11,800
)
 
(8,700
)
Capital expenditures
(6,850
)
 
(5,907
)
Other
439

 
72

Net cash used in investing activities
(63,554
)
 
(115,574
)
 
 
 
 
Financing Activities:
 
 
 
Borrowings on revolving credit facility
45,000

 
93,000

Payments on revolving credit facility
(38,000
)
 
(17,000
)
Cash dividends paid
(10,762
)
 
(9,305
)
Distributions to noncontrolling interests
(4,881
)
 
(2,795
)
Redemptions of common stock related to stock option exercises
(2,562
)
 
(150
)
Payment of contingent consideration
(325
)
 
(283
)
Proceeds from stock option exercises
1,528

 
66

Other
(213
)
 
29

Net cash (used in) provided by financing activities
(10,215
)
 
63,562

 
 
 
 
Effect of exchange rate changes on cash
(397
)
 
703

 
 
 
 
Net increase (decrease) in cash and cash equivalents
6,970

 
(1,743
)
Cash and cash equivalents at beginning of year
57,001

 
59,599

Cash and cash equivalents at end of period

$63,971

 

$57,856

The accompanying notes are an integral part of these condensed consolidated financial statements.


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Index

HEICO CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED
1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of HEICO Corporation and its subsidiaries (collectively, “HEICO,” or the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q. Therefore, the condensed consolidated financial statements do not include all information and footnotes normally included in annual consolidated financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended October 31, 2019. The October 31, 2019 Condensed Consolidated Balance Sheet has been derived from the Company’s audited consolidated financial statements. In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments (consisting principally of normal recurring accruals) necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, statements of comprehensive income, statements of shareholders' equity and statements of cash flows for such interim periods presented. The results of operations for the three months ended January 31, 2020 are not necessarily indicative of the results which may be expected for the entire fiscal year.

The Company has two operating segments: the Flight Support Group (“FSG”), consisting of HEICO Aerospace Holdings Corp. and HEICO Flight Support Corp. and their respective subsidiaries; and the Electronic Technologies Group (“ETG”), consisting of HEICO Electronic Technologies Corp. (“HEICO Electronic”) and its subsidiaries.
    
New Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, which, as amended, was codified as Accounting Standards Codification ("ASC") Topic 842, "Leases" ("ASC 842"). ASC 842 requires recognition of lease assets and lease liabilities on the balance sheet of lessees. The Company adopted ASC 842 as of November 1, 2019 using a modified retrospective transition approach with the election to apply the guidance as of the adoption date instead of at the beginning of the earliest comparative period presented. The adoption of this guidance resulted in an increase in the Company's assets and liabilities due to the recognition of right-of-use ("ROU") assets and corresponding lease liabilities for leases that are currently classified as operating leases.

Upon adoption, the Company elected the package of transitional practical expedients, which allowed the Company to not reassess its prior conclusions about lease identification, lease classification, and initial direct costs. In addition, the Company elected the short-term lease practical expedient, which allows HEICO to not record an ROU asset and lease liability for any


7

Index

lease with a term of twelve months or less, and also elected the single component practical expedient for all asset classes, which allows the Company to include both lease and non-lease components associated with a lease as a single lease component when determining the value of the ROU asset and lease liability.

The adoption of this guidance resulted in the Company recording ROU assets and corresponding lease liabilities of $63.4 million and $64.1 million, respectively, in the Company's Condensed Consolidated Balance Sheet. The adoption of ASC 842 did not have a material impact on the Company’s Condensed Consolidated Statement of Operations or Statement of Cash Flows. See Note 9, Leases, for additional information regarding the Company's accounting policy for leases and disclosures required by ASC 842.    

In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment," which is intended to simplify the current test for goodwill impairment by eliminating the second step in which the implied value of a reporting unit is calculated when the carrying value of the reporting unit exceeds its fair value. Under ASU 2017-04, goodwill impairment should be recognized for the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 must be applied prospectively and is effective for any annual or interim goodwill impairment test in fiscal years beginning after December 15, 2019, or in fiscal 2021 for HEICO. Early adoption is permitted. The Company is currently evaluating the effect the adoption of this guidance will have on its consolidated results of operations, financial position and cash flows.


2.     ACQUISITIONS

In December 2019, the Company, through a subsidiary of HEICO Electronic, acquired 100% of the business and assets of the Human-Machine Interface ("HMI") product line of Spectralux Corporation. HMI designs, manufactures, and repairs flight deck annunciators, panels, indicators, and illuminated keyboards, as well as lighting controls, and flight deck lighting.

In December 2019, the Company, through HEICO Electronic, acquired 80.1% of the stock of Quell Corporation ("Quell"). Quell designs and manufactures electromagnetic interference (EMI)/radio-frequency interference (RFI) and transient protection solutions for a wide variety of connectors that principally serve customers within the aerospace and defense markets. The remaining 19.9% continues to be owned by certain members of Quell's management team (see Note 3, Selected Financial Statement Information - Redeemable Noncontrolling Interests, for additional information).

The purchase price of each fiscal 2020 acquisition was paid in cash, principally using proceeds from the Company's revolving credit facility, and is not material or significant to the Company's condensed consolidated financial statements. The allocation of the total consideration for the fiscal 2020 acquisitions to the tangible and identifiable intangible assets acquired and liabilities and noncontrolling interests assumed is preliminary until the Company


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Index

obtains final information regarding their fair values. However, the Company does not expect any adjustment to such allocations to be material to the Company's consolidated financial statements. The operating results of the fiscal 2020 acquisitions were included in the Company’s results of operations from each of the effective acquisition dates. The amount of net sales and earnings of the fiscal 2020 acquisitions included in the Condensed Consolidated Statement of Operations for the three months ended January 31, 2020 is not material. Had the fiscal 2020 acquisitions occurred as of November 1, 2018, net sales, net income from consolidated operations, net income attributable to HEICO, and basic and diluted net income per share attributable to HEICO shareholders on a pro forma basis for the three months ended January 31, 2020 and 2019 would not have been materially different than the reported amounts.


3.     SELECTED FINANCIAL STATEMENT INFORMATION

Accounts Receivable
(in thousands)
 
January 31, 2020
 
October 31, 2019
Accounts receivable
 

$256,678

 

$277,992

Less: Allowance for doubtful accounts
 
(4,628
)
 
(3,666
)
Accounts receivable, net
 

$252,050

 

$274,326



Inventories
(in thousands)
 
January 31, 2020
 
October 31, 2019
Finished products
 

$211,279

 

$199,880

Work in process
 
38,184

 
32,548

Materials, parts, assemblies and supplies
 
191,787

 
187,891

Inventories, net of valuation reserves
 

$441,250

 

$420,319


Property, Plant and Equipment
(in thousands)
 
January 31, 2020
 
October 31, 2019
Land
 

$6,819

 

$6,820

Buildings and improvements
 
117,111

 
116,997

Machinery, equipment and tooling
 
256,262

 
253,127

Construction in progress
 
10,743

 
8,382

 
 
390,935

 
385,326

Less: Accumulated depreciation and amortization
 
(218,636
)
 
(211,981
)
Property, plant and equipment, net
 

$172,299

 

$173,345





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Index

Accrued Customer Rebates and Credits

The aggregate amount of accrued customer rebates and credits included within accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheets was $19.4 million as of January 31, 2020 and $18.0 million as of October 31, 2019. The total customer rebates and credits deducted within net sales for the three months ended January 31, 2020 and 2019 was $2.1 million and $1.4 million, respectively.

Research and Development Expenses

The amount of new product research and development ("R&D") expenses included in cost of sales for the three months ended January 31, 2020 and 2019 is as follows (in thousands):
 
 
Three months ended January 31,
 
 
2020
 
2019
R&D expenses
 

$17,103

 

$15,200



Redeemable Noncontrolling Interests

The holders of equity interests in certain of the Company's subsidiaries have rights ("Put Rights") that may be exercised on varying dates causing the Company to purchase their equity interests through fiscal 2029. The Put Rights, all of which relate either to common shares or membership interests in limited liability companies, provide that the cash consideration to be paid for their equity interests (the "Redemption Amount") be at fair value or a formula that management intended to reasonably approximate fair value based solely on a multiple of future earnings over a measurement period. Management's estimate of the aggregate Redemption Amount of all Put Rights that the Company could be required to pay is as follows (in thousands):
 
 
January 31, 2020
 
October 31, 2019
Redeemable at fair value
 

$144,240

 

$136,611

Redeemable based on a multiple of future earnings
 
51,653

 
51,653

Redeemable noncontrolling interests
 

$195,893

 

$188,264



As discussed in Note 2, Acquisitions, the Company, through HEICO Electronic, acquired 80.1% of the stock of Quell in December 2019. As part of the shareholders' agreement, the noncontrolling interest holders have the right to cause the Company to purchase their equity interests over a four-year period beginning in fiscal 2025, or sooner under certain conditions, and the Company has the right to purchase the same equity interests over the same period.



10

Index

Accumulated Other Comprehensive Loss

Changes in the components of accumulated other comprehensive loss for the three months ended January 31, 2020 are as follows (in thousands):
 
 
Foreign Currency Translation
 
Defined Benefit Pension Plan
 
Accumulated
Other
Comprehensive Loss
Balances as of October 31, 2019
 

($14,989
)
 

($1,750
)
 

($16,739
)
Unrealized loss
 
(2,548
)
 

 
(2,548
)
Amortization of unrealized loss
 

 
24

 
24

Balances as of January 31, 2020
 

($17,537
)
 

($1,726
)
 

($19,263
)



4.     GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill by operating segment for the three months ended January 31, 2020 are as follows (in thousands):
 
 
Segment
 
Consolidated Totals
 
 
FSG
 
ETG
 
Balances as of October 31, 2019
 

$410,044

 

$858,659

 

$1,268,703

Goodwill acquired
 

 
33,268

 
33,268

Foreign currency translation adjustments
 
(200
)
 
(540
)
 
(740
)
Adjustments to goodwill
 

 
85

 
85

Balances as of January 31, 2020
 

$409,844

 

$891,472

 

$1,301,316



The goodwill acquired pertains to the fiscal 2020 acquisitions described in Note 2, Acquisitions, and represents the residual value after the allocation of the total consideration to the tangible and identifiable intangible assets acquired and liabilities and noncontrolling interests assumed. Foreign currency translation adjustments are included in other comprehensive income (loss) in the Company's Condensed Consolidated Statements of Comprehensive Income. The adjustments to goodwill represent immaterial measurement period adjustments to the purchase price allocation of certain fiscal 2019 acquisitions. The Company estimates that $10 million of the goodwill acquired in fiscal 2020 will be deductible for income tax purposes.




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Index

Identifiable intangible assets consist of the following (in thousands):
 
 
As of January 31, 2020
 
As of October 31, 2019
 
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Amortizing Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Customer relationships
 

$422,609

 

($172,037
)
 

$250,572

 

$411,076

 

($162,722
)
 

$248,354

Intellectual property
 
222,315

 
(74,021
)
 
148,294

 
216,359

 
(70,169
)
 
146,190

Licenses
 
6,559

 
(4,244
)
 
2,315

 
6,559

 
(4,102
)
 
2,457

Patents
 
992

 
(680
)
 
312

 
986

 
(666
)
 
320

Non-compete agreements
 
812

 
(812
)
 

 
813

 
(813
)
 

Trade names
 
450

 
(190
)
 
260

 
450

 
(180
)
 
270

 
 
653,737

 
(251,984
)
 
401,753

 
636,243

 
(238,652
)
 
397,591

Non-Amortizing Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Trade names
 
154,965

 

 
154,965

 
153,102

 

 
153,102

 
 

$808,702

 

($251,984
)
 

$556,718

 

$789,345

 

($238,652
)
 

$550,693



The increase in the gross carrying amount of customer relationships, intellectual property and trade names as of January 31, 2020 compared to October 31, 2019 principally relates to such intangible assets recognized in connection with the fiscal 2020 acquisitions (see Note 2, Acquisitions).

Amortization expense related to intangible assets for the three months ended January 31, 2020 and 2019 was $13.7 million and $12.8 million, respectively. Amortization expense related to intangible assets for the remainder of fiscal 2020 is estimated to be $41.4 million. Amortization expense for each of the next five fiscal years and thereafter is estimated to be $52.5 million in fiscal 2021, $46.0 million in fiscal 2022, $40.7 million in fiscal 2023, $36.2 million in fiscal 2024, $32.3 million in fiscal 2025, and $152.7 million thereafter.


5.     LONG-TERM DEBT

Long-term debt consists of the following (in thousands):
 
 
January 31, 2020
 
October 31, 2019
Borrowings under revolving credit facility
 

$560,000

 

$553,000

Finance leases and note payable
 
8,796

 
8,955

 
 
568,796

 
561,955

Less: Current maturities of long-term debt
 
(932
)
 
(906
)
 
 

$567,864

 

$561,049





12

Index

The Company's borrowings under its revolving credit facility mature in fiscal 2023. As of January 31, 2020 and October 31 2019, the weighted average interest rate on borrowings under the Company's revolving credit facility was 2.7% and 3.0%, respectively. The revolving credit facility contains both financial and non-financial covenants. As of January 31, 2020, the Company was in compliance with all such covenants.


6.     REVENUE
    
Contract Balances

Contract assets (unbilled receivables) represent revenue recognized on contracts using an over-time recognition model in excess of amounts invoiced to the customer. Contract liabilities (deferred revenue) represent customer advances and billings in excess of revenue recognized and are included within accrued expenses and other current liabilities in the Company’s Condensed Consolidated Balance Sheet.    

Changes in the Company’s contract assets and liabilities for the three months ended January 31, 2020 are as follows (in thousands):
 
January 31, 2020
 
October 31, 2019
 
Change
 
 
 
 
 
 
Contract assets

$44,823

 

$43,132

 

$1,691

Contract liabilities
26,148

 
23,809

 
2,339

Net contract assets

$18,675

 

$19,323

 

($648
)

    
The increase in the Company's contract assets during the first quarter of fiscal 2020 mainly occurred within the ETG and principally reflects additional unbilled receivables on certain customer contracts using an over-time recognition model in excess of billings on certain customer contracts made during the quarter.

The increase in the Company's contract liabilities during the first quarter of fiscal 2020 mainly occurred within the FSG and principally reflects the receipt during the quarter of new customer deposits on certain customer contracts in excess of reductions to contract liabilities from customer deposits recognized as revenue.

The amount of revenue that the Company recognized during the first quarter of fiscal 2020 that was included in contract liabilities as of the beginning of fiscal 2020 was $13.4 million.
    
Remaining Performance Obligations

As of January 31, 2020, the Company had $403.8 million of remaining performance obligations associated with contracts with an original duration of greater than one year pertaining to the majority of the products offered by the ETG and the FSG's specialty products and


13

Index

aftermarket replacement parts product lines. The Company will recognize net sales as these obligations are satisfied. The Company expects to recognize $214.9 million of this amount during the remainder of fiscal 2020 and $188.9 million thereafter, of which the majority is expected to occur in fiscal 2021.
    
Disaggregation of Revenue

The following table summarizes the Company’s net sales by product line for each operating segment (in thousands):
 
 
Three months ended January 31,
 
 
2020
 
2019
Flight Support Group:
 
 
 
 
Aftermarket replacement parts (1) 
 

$168,267

 

$159,497

Repair and overhaul parts and services (2)
 
69,287

 
67,163

Specialty products (3)
 
63,513

 
60,553

Total net sales
 
301,067

 
287,213

 
 
 
 
 
Electronic Technologies Group:
 
 
 
 
Electronic component parts for defense,
space and aerospace equipment (4)
 
160,713

 
137,750

Electronic component parts for equipment
in various other industries (5)
 
47,698

 
46,679

Total net sales
 
208,411

 
184,429

 
 
 
 
 
Intersegment sales
 
(3,203
)
 
(5,496
)
 
 
 
 
 
Total consolidated net sales
 

$506,275

 

$466,146

 
 
 
 
 

(1) 
Includes various jet engine and aircraft component replacement parts.
(2) 
Includes primarily the sale of parts consumed in various repair and overhaul services on selected jet engine and aircraft components, avionics, instruments, composites and flight surfaces of commercial and military aircraft.
(3) 
Includes primarily the sale of specialty components such as thermal insulation blankets, renewable/reusable insulation systems, advanced niche components, complex composite assemblies, and expanded foil mesh.
(4) 
Includes various component parts such as electro-optical infrared simulation and test equipment, electro-optical laser products, electro-optical, microwave and other power equipment, high-speed interface products, power conversion products, underwater locator beacons, emergency locator transmission beacons, traveling wave tube amplifiers, microwave power modules, three-dimensional microelectronic and stacked memory products, crashworthy and ballistically self-sealing auxiliary fuel systems, radio frequency (RF) and microwave amplifiers, transmitters and receivers, high performance communications and electronic intercept receivers and tuners, high performance active antenna systems, and technical surveillance countermeasures equipment.


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Index

(5) 
Includes various component parts such as electromagnetic and radio interference shielding, high voltage interconnection devices, high voltage advanced power electronics, harsh environment connectivity products, custom molded cable assemblies and silicone material for a variety of demanding applications.

The following table summarizes the Company’s net sales by industry for each operating segment (in thousands):
 
 
Three months ended January 31,
 
 
2020
 
2019
Flight Support Group:
 
 
 
 
Aerospace
 

$239,923

 

$235,173

Defense and Space
 
50,253

 
41,534

Other (1)
 
10,891

 
10,506

Total net sales
 
301,067

 
287,213

 
 
 
 
 
Electronic Technologies Group:
 
 
 
 
Defense and Space
 
133,110

 
115,219

Other (2)
 
54,963

 
49,915

Aerospace
 
20,338

 
19,295

Total net sales
 
208,411

 
184,429

 
 
 
 
 
Intersegment sales
 
(3,203
)
 
(5,496
)
 
 
 
 
 
Total consolidated net sales
 

$506,275

 

$466,146

 
 
 
 
 

(1) 
Principally industrial products.
(2) 
Principally other electronics and medical products.


7.     INCOME TAXES
    
The Company incurred an income tax benefit of $22.9 million in the first quarter of fiscal 2020 compared to income tax expense of $4.1 million in the first quarter of fiscal 2019. The Company recognized a discrete tax benefit from stock option exercises in both the first quarter of fiscal 2020 and 2019 of $47.6 million and $16.6 million, respectively. The $31.0 million larger benefit from stock option exercises recognized in the first quarter of fiscal 2020 was the result of more stock options exercised and the strong appreciation in HEICO's stock price during the optionees' holding periods. The Company recognized a $25.7 million non-cash deferred income tax benefit in the first quarter of fiscal 2020 that is principally attributable to the tax benefit from stock option exercises, which it expects to realize during the remainder of fiscal 2020.



15

Index

8.    FAIR VALUE MEASUREMENTS

The Company's assets and liabilities that were measured at fair value on a recurring basis are set forth by level within the fair value hierarchy in the following tables (in thousands):
 
 
As of January 31, 2020
 
 
Quoted Prices
in Active Markets for Identical Assets
(Level 1)
 
Significant
Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
Total
Assets:
 
 
 
 
 
 
 
 
Deferred compensation plan:
 
 
 
 
 
 
 
 
Corporate-owned life insurance
 

$

 

$166,275

 

$

 

$166,275

Money market funds
 
3,832

 

 

 
3,832

Total assets
 

$3,832

 

$166,275

 

$

 

$170,107

 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
Contingent consideration
 

$

 

$

 

$18,234

 

$18,234

 
 
As of October 31, 2019
 
 
Quoted Prices
in Active Markets for Identical Assets (Level 1)
 
Significant
Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
Total
Assets:
 
 
 
 
 
 
 
 
Deferred compensation plan:
 
 
 
 
 
 
 
 
Corporate-owned life insurance
 

$

 

$151,871

 

$

 

$151,871

Money market funds
 
20

 

 

 
20

Total assets
 

$20

 

$151,871

 

$

 

$151,891

 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
Contingent consideration
 

$

 

$

 

$18,326

 

$18,326



The Company maintains the HEICO Corporation Leadership Compensation Plan (the "LCP"), which is a non-qualified deferred compensation plan. The assets of the LCP principally represent cash surrender values of life insurance policies, which derive their fair values from investments in mutual funds that are managed by an insurance company and are classified within Level 2 and valued using a market approach. Certain other assets of the LCP represent investments in money market funds that are classified within Level 1. The assets of the LCP are held within an irrevocable trust and classified within other assets in the Company’s Condensed Consolidated Balance Sheets. The related liabilities of the LCP are included within other long-term liabilities in the Company’s Condensed Consolidated Balance Sheets and have a value of $168.9 million as of January 31, 2020 and $151.1 million as of October 31, 2019.

As part of the agreement to acquire a subsidiary by the FSG in fiscal 2019, the Company may be obligated to pay contingent consideration of $6.4 million in fiscal 2022 should the acquired entity meet a certain earnings objective during the second and third years following the


16

Index

acquisition. As of January 31, 2020, the estimated fair value of the contingent consideration was $1.2 million.

As part of the agreement to acquire a subsidiary by the ETG in fiscal 2017, the Company may be obligated to pay contingent consideration of $20.0 million in fiscal 2023 should the acquired entity meet a certain earnings objective during the first six years following the acquisition. As of January 31, 2020, the estimated fair value of the contingent consideration was $17.1 million.
    
The estimated fair value of the contingent consideration arrangements described above are classified within Level 3 and were determined using probability-based scenario analyses. Under this method, a set of discrete potential future subsidiary earnings was determined using internal estimates based on various revenue growth rate assumptions for each scenario. A probability of likelihood was assigned to each discrete potential future earnings estimate and the resultant contingent consideration was calculated. The resulting probability-weighted contingent consideration amounts were discounted using a weighted average discount rate reflecting the credit risk of HEICO. Changes in either the revenue growth rates, related earnings or the discount rate could result in a material change to the amount of contingent consideration accrued and such changes will be recorded in the Company's condensed consolidated statements of operations.

The Level 3 inputs used to derive the estimated fair value of the Company's contingent consideration liability as of January 31, 2020 were as follows:
 
Fiscal 2019 Acquisition
 
Fiscal 2017 Acquisition
Compound annual revenue growth rate range
(7
%)
-
9%
 
(3
%)
-
10%
Weighted average discount rate
5.4%
 
4.3%


Changes in the Company’s contingent consideration liability measured at fair value on a recurring basis using unobservable inputs (Level 3) for the three months ended January 31, 2020 are as follows (in thousands):
 
 
Liabilities
Balance as of October 31, 2019
 

$18,326

Increase in accrued contingent consideration
 
408

Payment of contingent consideration
 
(500
)
Balance as of January 31, 2020
 

$18,234



The Company's contingent consideration liability is included in other long-term liabilities in its Condensed Consolidated Balance Sheet and the Company records changes in accrued contingent consideration within selling, general and administrative expenses in its Condensed Consolidated Statement of Operations.



17

Index

The Company did not have any transfers between Level 1 and Level 2 fair value measurements during the three months ended January 31, 2020.

The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, trade accounts payable and accrued expenses and other current liabilities approximate fair value as of January 31, 2020 due to the relatively short maturity of the respective instruments. The carrying amount of long-term debt approximates fair value due to its variable interest rates.


9.     LEASES

The Company’s lease arrangements primarily pertain to manufacturing facilities, office buildings, equipment, land and vehicles. The Company evaluates whether a contractual arrangement that provides it with control over the use of an asset is, or contains, a lease at the inception date. The term of a lease is inclusive of any option to renew, extend, or terminate the lease when it is reasonably certain that the Company will exercise such option. The Company classifies a lease as operating or finance using the classification criteria set forth in ASC 842. Finance leases are not material to the Company's condensed consolidated financial statements. HEICO recognizes operating lease right-of-use (“ROU”) assets and corresponding lease liabilities as of the lease commencement date based on the present value of the lease payments over the lease term. The discount rate used to calculate the present value of the Company’s leases is based on HEICO’s incremental borrowing rate and considers credit risk, the lease term and other available information as of the commencement date since the leases do not provide a readily determinable implicit rate. Variable lease payments that depend on an index or a rate are included in the determination of operating ROU assets and lease liabilities using the index or rate at the lease commencement date. Variable lease payments that do not depend on an index or rate or resulting from changes in an index or rate subsequent to the lease commencement date, are recorded as lease expense in the period in which the obligation for the payment is incurred. The Company’s operating ROU assets are increased by any prepaid lease payments and initial direct costs and reduced by any lease incentives. The Company’s leases do not contain any material residual value guarantees or restrictive covenants.

HEICO’s operating lease ROU assets represent its right to use an underlying asset during the lease term and its operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. HEICO’s operating lease ROU assets are included within other assets and its operating lease liabilities are included within both accrued expenses and other current liabilities and other long-term liabilities in the Company’s Condensed Consolidated Balance Sheet. For additional information on the Company’s finance leases, see Note 5, Long-term Debt, of the Notes to Condensed Consolidated Financial Statements of this quarterly report and Note 5, Long-term Debt, and Note 3, Selected Financial Statement Information - Property, Plant and Equipment, of the Notes to Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the year ended October 31, 2019. The following table presents the Company’s operating lease ROU assets and lease liabilities as of January 31, 2020 (in thousands):



18

Index

 
January 31, 2020
Right-of-use assets

$62,114

 
 
Current lease liabilities

$13,114

Long-term lease liabilities
49,797

Total operating lease liabilities

$62,911



The Company’s operating lease expense is recorded as a component of cost of sales and/or selling, general, and administrative expenses in the Company’s Condensed Consolidated Statements of Operations. The following table presents the components of operating lease expense for the three months ended January 31, 2020 (in thousands):    

 
Three months ended
 
January 31, 2020
Operating lease expense

$4,260

Variable lease expense
615

Total operating lease expense (1)

$4,875

 
 
(1) 
Excludes short-term lease expense, which is not material.
    
The following table presents a maturity analysis of the Company's operating lease liabilities as of January 31, 2020 for the remainder of fiscal 2020 and the next five fiscal years and thereafter (in thousands):
Year ending October 31,
 
2020

$11,759

2021
15,776

2022
13,859

2023
8,536

2024
4,755

2025
3,998

Thereafter
18,055

Total minimum lease payments
76,738

Less: amount representing interest
(13,827
)
Present value of minimum lease payments

$62,911


Prior to the adoption of ASC 842, the Company's future minimum lease payments under non-cancelable operating leases on an undiscounted basis as of October 31, 2019 were $15.5 million in fiscal 2020, $15.6 million in fiscal 2021, $13.8 million in fiscal 2022, $8.5 million in fiscal 2023, $4.7 million in fiscal 2024 and $18.8 million thereafter.
    


19

Index

The Company does not have any material leases that have been signed but have yet to commence as of January 31, 2020.
        
The following table presents the weighted average remaining lease term and discount rate of the Company’s operating leases as of January 31, 2020:
 
January 31, 2020
Weighted average remaining lease term (years)
7.1

Weighted average discount rate
5.2
%


The following table presents supplemental disclosures of cash flow information associated with the Company's operating leases for the three months ended January 31, 2020 (in thousands):
 
Three months ended
 
January 31, 2020
 
 
Cash paid for amounts included in the measurement of lease liabilities

$4,243

Right-of-use assets obtained in exchange for new lease liabilities

$5,162

 
 



10.    NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS
The computation of basic and diluted net income per share attributable to HEICO shareholders is as follows (in thousands, except per share data):
 
 
Three months ended January 31,
 
 
2020
 
2019
Numerator:
 
 
 
 
Net income attributable to HEICO
 

$121,888

 

$79,332

 
 
 
 
 
Denominator:
 
 
 
 
Weighted average common shares outstanding - basic
 
134,523

 
132,933

Effect of dilutive stock options
 
2,898

 
4,045

Weighted average common shares outstanding - diluted
 
137,421

 
136,978

 
 
 
 
 
Net income per share attributable to HEICO shareholders:
 
 
 
 
Basic
 

$.91

 

$.60

Diluted
 

$.89

 

$.58

 
 
 
 
 
Anti-dilutive stock options excluded
 
117

 
760




20

Index

11.    OPERATING SEGMENTS

Information on the Company’s two operating segments, the FSG and the ETG, for the three months ended January 31, 2020 and 2019, respectively, is as follows (in thousands):
 
 
 
 
 
 
Other,
Primarily Corporate and
Intersegment
(1)
 
Consolidated
Totals
 
 
Segment
 
 
 
 
FSG
 
ETG
 
 
Three months ended January 31, 2020:
 
 
 
 
 
 
 
 
Net sales
 

$301,067

 

$208,411

 

($3,203
)
 

$506,275

Depreciation
 
3,617

 
2,928

 
255

 
6,800

Amortization
 
4,859

 
9,678

 
246

 
14,783

Operating income
 
62,045

 
57,491

 
(8,546
)
 
110,990

Capital expenditures
 
4,118

 
2,727

 
5

 
6,850

 
 
 
 
 
 
 
 
 
Three months ended January 31, 2019:
 
 
 
 
 
 
 
 
Net sales
 

$287,213

 

$184,429

 

($5,496
)
 

$466,146

Depreciation
 
3,355

 
2,606

 
251

 
6,212

Amortization
 
4,803

 
8,776

 
246

 
13,825

Operating income
 
52,880

 
51,602

 
(6,535
)
 
97,947

Capital expenditures
 
2,849

 
3,058

 

 
5,907

 
 
 
 
 
 
 
 
 


(1) Intersegment activity principally consists of net sales from the ETG to the FSG.

Total assets by operating segment are as follows (in thousands):
 
 
 
 
 
 
Other,
Primarily Corporate
 
Consolidated
Totals
 
 
Segment
 
 
 
 
FSG
 
ETG
 
 
Total assets as of January 31, 2020
 

$1,182,947

 

$1,712,901

 

$201,273

 

$3,097,121

Total assets as of October 31, 2019
 
1,149,737

 
1,643,032

 
176,442

 
2,969,211






21

Index

12.     COMMITMENTS AND CONTINGENCIES
Guarantees
As of January 31, 2020, the Company has arranged for standby letters of credit aggregating $4.8 million, which are supported by its revolving credit facility and pertain to payment guarantees related to potential workers' compensation claims and a facility lease as well as performance guarantees related to customer contracts entered into by certain of the Company's subsidiaries.
Product Warranty
Changes in the Company’s product warranty liability for the three months ended January 31, 2020 and 2019, respectively, are as follows (in thousands):
 
 
Three months ended January 31,
 
 
2020
 
2019
Balances as of beginning of fiscal year
 

$2,810

 

$3,306

Accruals for warranties
 
1,007

 
694

Acquired warranty liabilities
 
50

 

Warranty claims settled
 
(459
)
 
(829
)
Balances as of January 31
 

$3,408

 

$3,171



Litigation
The Company is involved in various legal actions arising in the normal course of business. Based upon the Company’s and its legal counsel’s evaluations of any claims or assessments, management is of the opinion that the outcome of these matters will not have a material adverse effect on the Company’s results of operations, financial position or cash flows.




22

Index

Item 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview

This discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and notes thereto included herein. The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates if different assumptions were used or different events ultimately transpire.

Our critical accounting policies, which require management to make judgments about matters that are inherently uncertain, are described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended October 31, 2019. There have been no material changes to our critical accounting policies during the three months ended January 31, 2020.

Our business is comprised of two operating segments: the Flight Support Group (“FSG”), consisting of HEICO Aerospace Holdings Corp. and HEICO Flight Support Corp. and their respective subsidiaries; and the Electronic Technologies Group (“ETG”), consisting of HEICO Electronic Technologies Corp. and its subsidiaries.

Our results of operations for the three months ended January 31, 2020 have been affected by the fiscal 2019 acquisitions as further detailed in Note 2, Acquisitions, of the Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended October 31, 2019.





23

Index

Results of Operations
The following table sets forth the results of our operations, net sales and operating income by segment and the percentage of net sales represented by the respective items in our Condensed Consolidated Statements of Operations (in thousands):
 
 
Three months ended January 31,
 
 
2020
 
2019
Net sales
 

$506,275

 

$466,146

Cost of sales
 
308,228

 
283,909

Selling, general and administrative expenses
 
87,057

 
84,290

Total operating costs and expenses
 
395,285

 
368,199

Operating income
 

$110,990

 

$97,947

 
 
 
 
 
Net sales by segment:
 
 
 
 
Flight Support Group
 

$301,067

 

$287,213

Electronic Technologies Group
 
208,411

 
184,429

Intersegment sales
 
(3,203
)
 
(5,496
)
 
 

$506,275

 

$466,146

 
 
 
 
 
Operating income by segment:
 
 
 
 
Flight Support Group
 

$62,045

 

$52,880

Electronic Technologies Group
 
57,491

 
51,602

Other, primarily corporate
 
(8,546
)
 
(6,535
)
 
 

$110,990

 

$97,947

 
 
 
 
 
Net sales
 
100.0
%
 
100.0
%
Gross profit
 
39.1
%
 
39.1
%
Selling, general and administrative expenses
 
17.2
%
 
18.1
%
Operating income
 
21.9
%
 
21.0
%
Interest expense
 
(.8
%)
 
(1.2
%)
Other income (expense)
 
%
 
(.1
%)
Income tax (benefit) expense
 
(4.5
%)
 
.9
%
Net income attributable to noncontrolling interests
 
1.6
%
 
1.9
%
Net income attributable to HEICO
 
24.1
%
 
17.0
%



24

Index

Comparison of First Quarter of Fiscal 2020 to First Quarter of Fiscal 2019

Net Sales

Our consolidated net sales in the first quarter of fiscal 2020 increased by 9% to $506.3 million, up from net sales of $466.1 million in the first quarter of fiscal 2019. The increase in consolidated net sales principally reflects an increase of $24.0 million (a 13% increase) to $208.4 million in net sales within the ETG as well as an increase of $13.9 million (a 5% increase) to $301.1 million in net sales within the FSG. The net sales increase in the ETG reflects net sales of $14.9 million contributed by our fiscal 2019 and 2020 acquisitions as well as organic growth of 6%. The ETG's organic growth is mainly attributable to increased demand for our defense products resulting in a net sales increase of $19.3 million partially offset by lower demand for our space products resulting in a net sales decrease of $7.5 million. The net sales increase in the FSG reflects organic growth of 4%. The FSG's organic growth is mainly attributable to increased demand and new product offerings within our aftermarket replacement parts, repair and overhaul parts and services, and specialty products product lines resulting in net sales increases of $8.8 million, $2.1 million and $1.5 million, respectively. Sales price changes were not a significant contributing factor to the ETG and FSG net sales growth in the first quarter of fiscal 2020.

Gross Profit and Operating Expenses

Our consolidated gross profit margin was 39.1% in both the first quarter of fiscal 2020 and 2019 principally reflecting an increase of 1.1% in the FSG's gross profit margin offset by a 1.5% decrease in the ETG's gross profit margin. The increase in the FSG's gross profit margin principally reflects a more favorable product mix within all of its product lines. The decrease in the ETG's gross profit margin principally reflects a decrease in net sales of certain space products partially offset by increased net sales of certain defense products. Total new product research and development expenses included within our consolidated cost of sales were $17.1 million in the first quarter of fiscal 2020 compared to $15.2 million in the first quarter of fiscal 2019.

Our consolidated selling, general and administrative ("SG&A") expenses were $87.1 million and $84.3 million in the first quarter of fiscal 2020 and 2019, respectively. The increase in consolidated SG&A expenses principally reflects $4.2 million attributable to the fiscal 2019 and 2020 acquisitions partially offset by $1.5 million of lower expenses related to changes in the estimated fair value of accrued contingent consideration.

Our consolidated SG&A expenses as a percentage of net sales decreased to 17.2% in the first quarter of fiscal 2020, down from 18.1% in the first quarter of fiscal 2019. The decrease in consolidated SG&A expenses as a percentage of net sales is mainly due to a .3% impact from the previously mentioned lower expenses related to changes in the estimated fair value of accrued contingent consideration as well as a .3% impact from a decrease in performance-based compensation expense as a percentage of net sales and efficiencies realized from the net sales growth.



25

Index

Operating Income

Our consolidated operating income increased by 13% to $111.0 million in the first quarter of fiscal 2020, up from $97.9 million in the first quarter of fiscal 2019. The increase in consolidated operating income principally reflects a $9.2 million increase (a 17% increase) to $62.0 million in operating income of the FSG and a $5.9 million increase (an 11% increase) to $57.5 million in operating income of the ETG. The increase in operating income of the FSG principally reflects the previously mentioned improved gross profit margin and net sales growth as well as a $1.2 million favorable impact from lower expenses related to changes in the estimated fair value of accrued contingent consideration. The increase in operating income of the ETG principally reflects the previously mentioned net sales growth partially offset by the previously mentioned lower gross profit margin.

Our consolidated operating income as a percentage of net sales improved to 21.9% in the first quarter of fiscal 2020, up from 21.0% in the first quarter of fiscal 2019. The increase principally reflects an increase in the FSG’s operating income as a percentage of net sales to 20.6% in the first quarter of fiscal 2020, up from 18.4% in the first quarter of fiscal 2019 partially offset by a decrease in the ETG’s operating income as a percentage of net sales to 27.6% in the first quarter of fiscal 2020 as compared to 28.0% in the first quarter of fiscal 2019. The increase in the FSG’s operating income as a percentage of net sales principally reflects the previously mentioned improved gross profit margin and a 1.1% decrease in SG&A expenses as a percentage of net sales mainly from the previously mentioned efficiencies realized from the net sales growth and lower expenses related to changes in the estimated fair value of accrued contingent consideration. The decrease in the ETG's operating income as a percentage of net sales principally reflects the previously mentioned lower gross profit margin partially offset by a 1.1% decrease in SG&A expenses as a percentage of net sales mainly from a decrease in performance-based compensation expense and efficiencies realized from the net sales growth.

Interest Expense

Interest expense decreased to $4.3 million in the first quarter of fiscal 2020, down from $5.5 million in the first quarter of fiscal 2019. The decrease was principally due to a lower weighted average interest rate on borrowings outstanding under our revolving credit facility.

Other Income (Expense)

Other income (expense) in the first quarter of fiscal 2020 and 2019 was not material.

Income Tax (Benefit) Expense

HEICO incurred an income tax benefit of $22.9 million in the first quarter of fiscal 2020 compared to income tax expense of $4.1 million in the first quarter of fiscal 2019. We recognized a discrete tax benefit from stock option exercises in both the first quarter of fiscal 2020 and 2019 of $47.6 million and $16.6 million, respectively. The $31.0 million larger benefit from stock option exercises recognized in the first quarter of fiscal 2020 was the result of more


26

Index

stock options exercised and the strong appreciation in HEICO's stock price during the optionees' holding periods.     

Net Income Attributable to Noncontrolling Interests
Net income attributable to noncontrolling interests relates to the 20% noncontrolling interest held by Lufthansa Technik AG ("LHT") in HEICO Aerospace Holdings Corp. ("HEICO Aerospace") and the noncontrolling interests held by others in certain subsidiaries of the FSG and ETG. Net income attributable to noncontrolling interests was $7.9 million in the first quarter of fiscal 2020 as compared to $8.7 million in the first quarter of fiscal 2019. The decrease in net income attributable to noncontrolling interests in the first quarter of fiscal 2020 principally reflects the impact of a dividend paid by HEICO Aerospace in June 2019 that effectively resulted in the transfer of the 20% noncontrolling interest held by LHT in eight of our existing subsidiaries within HEICO Aerospace that are principally part of the FSG's repair and overhaul parts and services product line to HEICO Flight Support Corp., a wholly owned subsidiary of HEICO, partially offset by improved operating results of certain subsidiaries of the FSG and ETG in which noncontrolling interests are held.

Net Income Attributable to HEICO

Net income attributable to HEICO increased to a record $121.9 million, or $.89 per diluted share, in the first quarter of fiscal 2020, up from $79.3 million, or $.58 per diluted share, in the first quarter of fiscal 2019 principally reflecting the previously mentioned income tax benefit and increased net sales and operating income.

Outlook

As we look ahead to the remainder of fiscal 2020, we anticipate net sales growth within the FSG's commercial aviation and defense product lines. We also expect growth within the ETG, principally driven by demand for the majority of our products. Also, we plan to continue our commitments to developing new products and services, further market penetration, and an aggressive acquisition strategy while maintaining our financial strength and flexibility. Based on our current economic visibility, we are continuing to estimate our consolidated fiscal 2020 year-over-year growth in net sales to be 6% - 8% and increasing our estimate of fiscal 2020 year-over-year growth in net income to be 14% - 15%, up from our prior growth estimate of 13% - 14%. This outlook excludes the impact of additional acquired businesses, if any. Additionally, this outlook excludes any potential impact from the recent coronavirus outbreak as the impact to our businesses is uncertain and difficult to predict.
 
  



27

Index

Liquidity and Capital Resources

Our principal uses of cash include acquisitions, capital expenditures, cash dividends, distributions to noncontrolling interests and working capital needs. We continue to anticipate fiscal 2020 capital expenditures to be approximately $42 million. We finance our activities primarily from our operating and financing activities, including borrowings under our revolving credit facility. The revolving credit facility contains both financial and non-financial covenants. As of January 31, 2020, we were in compliance with all such covenants. As of January 31, 2020, our total debt to shareholders’ equity ratio was 31.4%.

Based on our current outlook, we believe that our net cash provided by operating activities and available borrowings under our revolving credit facility will be sufficient to fund cash requirements for at least the next twelve months.

Operating Activities

Net cash provided by operating activities was $81.1 million in the first quarter of fiscal 2020 and consisted primarily of net income from consolidated operations of $129.8 million, depreciation and amortization expense of $21.6 million (a non-cash item), net changes in other long-term liabilities and assets related to the HEICO Leadership Compensation Plan ("LCP") of $11.3 million (principally participant deferrals and employer contributions), $2.6 million in share-based compensation expense (a non-cash item), and $2.6 million in employer contributions to the HEICO Savings and Investment Plan (a non-cash item), partially offset by a $62.1 million increase in working capital and a $25.7 million deferred income tax benefit. The increase in working capital is inclusive of a $48.3 million decrease in accrued expenses and other current liabilities mainly reflecting the payment of fiscal 2019 accrued performance-based compensation, a $20.4 million increase in inventories to support the growth of our businesses and backlog, and a $10.7 million decrease in trade accounts payable partially offset by a $23.7 million decrease in accounts receivable resulting from the timing of payments and collections, respectively. The deferred income tax benefit principally reflects the previously mentioned income tax benefit from stock option exercises, which the Company expects to realize during the remainder of fiscal 2020.

Net cash provided by operating activities increased by $31.6 million in the first quarter of fiscal 2020 from $49.6 million in the first quarter of fiscal 2019. The increase is principally attributable to a $41.8 million increase in net income from consolidated operations and a $15.9 million decrease in net working capital partially offset by a $29.5 million increase in deferred income tax benefits. The decrease in net working capital primarily resulted from the timing associated with the collection of accounts receivable and payment of trade accounts payable and accrued expenses and other current liabilities. The increase in deferred income tax benefits is attributable to the previously mentioned income tax benefit from stock option exercises.
 


28

Index

Investing Activities

Net cash used in investing activities totaled $63.6 million in the first quarter of fiscal 2020 and related primarily to acquisitions of $45.3 million (net of cash acquired), investments related to the HEICO LCP of $11.8 million and capital expenditures of $6.9 million. Further details regarding our fiscal 2020 acquisitions may be found in Note 2, Acquisitions, of the Notes to Condensed Consolidated Financial Statements.

Financing Activities

Net cash used in financing activities in the first quarter of fiscal 2020 totaled $10.2 million. During the first quarter of fiscal 2020, we made $38.0 million in payments on our revolving credit facility, paid $10.8 million in cash dividends on our common stock, made $4.9 million of distributions to noncontrolling interests and redeemed common stock related to stock option exercises aggregating $2.6 million. Additionally, we borrowed $45.0 million under our revolving credit facility to fund our fiscal 2020 acquisitions and received $1.5 million in proceeds from stock option exercises.

Contractual Obligations

There have not been any material changes to the amounts presented in the table of contractual obligations that was included in our Annual Report on Form 10-K for the year ended October 31, 2019.

Off-Balance Sheet Arrangements

Guarantees

As of January 31, 2020, we have arranged for standby letters of credit aggregating $4.8 million, which are supported by our revolving credit facility and pertain to payment guarantees related to potential workers' compensation claims and a facility lease as well as performance guarantees related to customer contracts entered into by certain of our subsidiaries.

New Accounting Pronouncements

See Note 1, Summary of Significant Accounting Policies - New Accounting Pronouncements, of the Notes to Condensed Consolidated Financial Statements for additional information.



29

Index

Forward-Looking Statements
Certain statements in this report constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained herein that are not clearly historical in nature may be forward-looking and the words “anticipate,” “believe,” “expect,” “estimate” and similar expressions are generally intended to identify forward-looking statements. Any forward-looking statement contained herein, in press releases, written statements or other documents filed with the Securities and Exchange Commission or in communications and discussions with investors and analysts in the normal course of business through meetings, phone calls and conference calls, concerning our operations, economic performance and financial condition are subject to risks, uncertainties and contingencies. We have based these forward-looking statements on our current expectations and projections about future events. All forward-looking statements involve risks and uncertainties, many of which are beyond our control, which may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. Also, forward-looking statements are based upon management’s estimates of fair values and of future costs, using currently available information. Therefore, actual results may differ materially from those expressed in or implied by those forward-looking statements. Factors that could cause such differences include: lower demand for commercial air travel or airline fleet changes or airline purchasing decisions, which could cause lower demand for our goods and services; product specification costs and requirements, which could cause an increase to our costs to complete contracts; governmental and regulatory demands, export policies and restrictions, reductions in defense, space or homeland security spending by U.S. and/or foreign customers or competition from existing and new competitors, which could reduce our sales; our ability to introduce new products and services at profitable pricing levels, which could reduce our sales or sales growth; product development or manufacturing difficulties, which could increase our product development costs and delay sales; our ability to make acquisitions and achieve operating synergies from acquired businesses; customer credit risk; interest, foreign currency exchange and income tax rates; economic conditions within and outside of the aviation, defense, space, medical, telecommunications and electronics industries, which could negatively impact our costs and revenues; defense spending or budget cuts, which could reduce our defense related revenue; and any impact from the recent coronavirus outbreak. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.




30

Index

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have not been any material changes in our assessment of HEICO’s sensitivity to market risk that was disclosed in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the year ended October 31, 2019.


Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this quarterly report. Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that HEICO’s disclosure controls and procedures are effective as of the end of the period covered by this quarterly report.

Changes in Internal Control Over Financial Reporting

During the first quarter ended January 31, 2020, we adopted Accounting Standards Update 2016-02, which, as amended, was codified as Accounting Standards Codification (“ASC”) Topic 842, "Leases" (“ASC 842”). See Note 1, Summary of Significant Accounting Policies - New Accounting Pronouncements, and Note 9, Leases, of the Notes to Condensed Consolidated Financial Statements for additional information. As a result of adopting ASC 842, we have implemented certain changes to our internal controls over financial reporting to support the recognition and disclosure requirements under ASC 842, including changes to our accounting policies and internal control procedures.




31

Index

PART II. OTHER INFORMATION
Item 6.    EXHIBITS
Exhibit
 
Description
31.1
 
 
 
 
31.2
 
 
 
 
32.1
 
 
 
 
32.2
 
 
 
 
101.INS
 
Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document. *

 
 
 
101.SCH
 
Inline XBRL Taxonomy Extension Schema Document. *
 
 
 
101.CAL
 
Inline XBRL Taxonomy Extension Calculation Linkbase Document. *
 
 
 
101.DEF
 
Inline XBRL Taxonomy Extension Definition Linkbase Document. *
 
 
 
101.LAB
 
Inline XBRL Taxonomy Extension Labels Linkbase Document. *
 
 
 
101.PRE
 
Inline XBRL Taxonomy Extension Presentation Linkbase Document. *
 
 
 
104
 
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). *
 
 
*
Filed herewith.
**    Furnished herewith.



32

Index

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
HEICO CORPORATION
 
 
 
 
Date:
February 27, 2020
By:
/s/ CARLOS L. MACAU, JR.
 
 
 
Carlos L. Macau, Jr.
Executive Vice President - Chief Financial Officer and Treasurer
(Principal Financial Officer)
 
 
 
 
 
 
By:
/s/ STEVEN M. WALKER
 
 
 
Steven M. Walker
Chief Accounting Officer
and Assistant Treasurer
(Principal Accounting Officer)


33
Exhibit


Exhibit 31.1

RULE 13a-14(a)/15d-14(a) CERTIFICATION

I, Laurans A. Mendelson, certify that:

(1)
I have reviewed this quarterly report on Form 10-Q of HEICO Corporation;

(2)
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3)
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4)
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5)
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:
February 27, 2020
/s/ LAURANS A. MENDELSON
 
 
Laurans A. Mendelson
 
 
Chief Executive Officer
 
 
(Principal Executive Officer)


Exhibit


Exhibit 31.2

RULE 13a-14(a)/15d-14(a) CERTIFICATION

I, Carlos L. Macau, Jr., certify that:

(1)
I have reviewed this quarterly report on Form 10-Q of HEICO Corporation;

(2)
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3)
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4)
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5)
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:
February 27, 2020
/s/ CARLOS L. MACAU, JR.
 
 
Carlos L. Macau, Jr.
 
 
Chief Financial Officer
 
 
(Principal Financial Officer)



Exhibit


Exhibit 32.1

SECTION 1350 CERTIFICATION

In connection with the Quarterly Report of HEICO Corporation (the “Company”) on Form 10-Q for the period ended January 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Laurans A. Mendelson, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:
February 27, 2020
/s/ LAURANS A. MENDELSON
 
 
Laurans A. Mendelson
 
 
Chief Executive Officer
 
 
(Principal Executive Officer)



Exhibit


Exhibit 32.1

SECTION 1350 CERTIFICATION

In connection with the Quarterly Report of HEICO Corporation (the “Company”) on Form 10-Q for the period ended January 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Carlos L. Macau, Jr., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:
February 27, 2020
/s/ CARLOS L. MACAU, JR.
 
 
Carlos L. Macau, Jr.
 
 
Chief Financial Officer
 
 
(Principal Financial Officer)




v3.19.3.a.u2
INCOME TAXES (Details Textuals) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Jan. 31, 2020
Jan. 31, 2019
Jan. 31, 2020
Income Tax Disclosure [Abstract]      
Income Tax Expense (Benefit) $ 22,900 $ (4,100)  
Tax benefit from stock option exercises recognized in the period 47,600 16,600  
Year Over Year, Deferred Tax Expense From Stock Option Exercised     $ 31,000
Deferred Income Tax Expense (Benefit) $ 25,718 $ (3,798)  
v3.19.3.a.u2
GOODWILL AND OTHER INTANGIBLE ASSETS (Identifiable Intangible Assets) (Details) - USD ($)
$ in Thousands
Jan. 31, 2020
Oct. 31, 2019
Finite-Lived Intangible Assets, Net [Abstract]    
Gross Carrying Amount $ 653,737 $ 636,243
Accumulated Amortization (251,984) (238,652)
Net Carrying Amount 401,753 397,591
Intangible Assets, Net (Excluding Goodwill) [Abstract]    
Intangible Asset Gross Carrying Amount 808,702 789,345
Intangible Asset Net Carrying Amount 556,718 550,693
Trade Names [Member]    
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract]    
Gross Carrying Amount 154,965 153,102
Net Carrying Amount 154,965 153,102
Customer Relationships [Member]    
Finite-Lived Intangible Assets, Net [Abstract]    
Gross Carrying Amount 422,609 411,076
Accumulated Amortization (172,037) (162,722)
Net Carrying Amount 250,572 248,354
Intellectual Property [Member]    
Finite-Lived Intangible Assets, Net [Abstract]    
Gross Carrying Amount 222,315 216,359
Accumulated Amortization (74,021) (70,169)
Net Carrying Amount 148,294 146,190
Licensing Agreements [Member]    
Finite-Lived Intangible Assets, Net [Abstract]    
Gross Carrying Amount 6,559 6,559
Accumulated Amortization (4,244) (4,102)
Net Carrying Amount 2,315 2,457
Patents [Member]    
Finite-Lived Intangible Assets, Net [Abstract]    
Gross Carrying Amount 992 986
Accumulated Amortization (680) (666)
Net Carrying Amount 312 320
Noncompete Agreements [Member]    
Finite-Lived Intangible Assets, Net [Abstract]    
Gross Carrying Amount 812 813
Accumulated Amortization (812) (813)
Net Carrying Amount 0 0
Trade Names [Member]    
Finite-Lived Intangible Assets, Net [Abstract]    
Gross Carrying Amount 450 450
Accumulated Amortization (190) (180)
Net Carrying Amount $ 260 $ 270
v3.19.3.a.u2
REVENUE (Contract Assets and Liabilities) (Details) - USD ($)
$ in Thousands
3 Months Ended
Jan. 31, 2020
Oct. 31, 2019
Contract with Customer, Asset and Liability [Abstract]    
Contract assets $ 44,823 $ 43,132
Contract liabilities 26,148 23,809
Net contract assets 18,675 $ 19,323
Decrease in contract assets, net 1,691  
Increase (Decrease) in Customer Deposits 2,339  
Contract with Customer, Billings in Excess of Unbilled Receivable and New Deposits in Excess of Deposits Recognized as Revenue $ (648)  
v3.19.3.a.u2
OPERATING SEGMENTS (Details 1) - USD ($)
$ in Thousands
Jan. 31, 2020
Oct. 31, 2019
Segment Reporting, Asset Reconciling Item [Line Items]    
Total assets $ 3,097,121 $ 2,969,211
Other Primarily Corporate and Intersegment [Member]    
Segment Reporting, Asset Reconciling Item [Line Items]    
Total assets 201,273 176,442
Flight Support Group [Member] | Operating Segments [Member]    
Segment Reporting, Asset Reconciling Item [Line Items]    
Total assets 1,182,947 1,149,737
Electronic Technologies Group [Member] | Operating Segments [Member]    
Segment Reporting, Asset Reconciling Item [Line Items]    
Total assets $ 1,712,901 $ 1,643,032
v3.19.3.a.u2
LONG-TERM DEBT (Tables)
3 Months Ended
Jan. 31, 2020
Debt Disclosure [Abstract]  
Schedule of Long-term Debt Instruments [Table Text Block]

Long-term debt consists of the following (in thousands):
 
 
January 31, 2020
 
October 31, 2019
Borrowings under revolving credit facility
 

$560,000

 

$553,000

Finance leases and note payable
 
8,796

 
8,955

 
 
568,796

 
561,955

Less: Current maturities of long-term debt
 
(932
)
 
(906
)
 
 

$567,864

 

$561,049



v3.19.3.a.u2
COMMITMENTS AND CONTINGENCIES
3 Months Ended
Jan. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block] COMMITMENTS AND CONTINGENCIES
Guarantees
As of January 31, 2020, the Company has arranged for standby letters of credit aggregating $4.8 million, which are supported by its revolving credit facility and pertain to payment guarantees related to potential workers' compensation claims and a facility lease as well as performance guarantees related to customer contracts entered into by certain of the Company's subsidiaries.
Product Warranty
Changes in the Company’s product warranty liability for the three months ended January 31, 2020 and 2019, respectively, are as follows (in thousands):
 
 
Three months ended January 31,
 
 
2020
 
2019
Balances as of beginning of fiscal year
 

$2,810

 

$3,306

Accruals for warranties
 
1,007

 
694

Acquired warranty liabilities
 
50

 

Warranty claims settled
 
(459
)
 
(829
)
Balances as of January 31
 

$3,408

 

$3,171



Litigation
The Company is involved in various legal actions arising in the normal course of business. Based upon the Company’s and its legal counsel’s evaluations of any claims or assessments, management is of the opinion that the outcome of these matters will not have a material adverse effect on the Company’s results of operations, financial position or cash flows.
v3.19.3.a.u2
NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS (Tables)
3 Months Ended
Jan. 31, 2020
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
The computation of basic and diluted net income per share attributable to HEICO shareholders is as follows (in thousands, except per share data):
 
 
Three months ended January 31,
 
 
2020
 
2019
Numerator:
 
 
 
 
Net income attributable to HEICO
 

$121,888

 

$79,332

 
 
 
 
 
Denominator:
 
 
 
 
Weighted average common shares outstanding - basic
 
134,523

 
132,933

Effect of dilutive stock options
 
2,898

 
4,045

Weighted average common shares outstanding - diluted
 
137,421

 
136,978

 
 
 
 
 
Net income per share attributable to HEICO shareholders:
 
 
 
 
Basic
 

$.91

 

$.60

Diluted
 

$.89

 

$.58

 
 
 
 
 
Anti-dilutive stock options excluded
 
117

 
760


v3.19.3.a.u2
FAIR VALUE MEASUREMENTS
3 Months Ended
Jan. 31, 2020
Fair Value Disclosures [Abstract]  
Fair Value Disclosures [Text Block] FAIR VALUE MEASUREMENTS

The Company's assets and liabilities that were measured at fair value on a recurring basis are set forth by level within the fair value hierarchy in the following tables (in thousands):
 
 
As of January 31, 2020
 
 
Quoted Prices
in Active Markets for Identical Assets
(Level 1)
 
Significant
Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
Total
Assets:
 
 
 
 
 
 
 
 
Deferred compensation plan:
 
 
 
 
 
 
 
 
Corporate-owned life insurance
 

$—

 

$166,275

 

$—

 

$166,275

Money market funds
 
3,832

 

 

 
3,832

Total assets
 

$3,832

 

$166,275

 

$—

 

$170,107

 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
Contingent consideration
 

$—

 

$—

 

$18,234

 

$18,234

 
 
As of October 31, 2019
 
 
Quoted Prices
in Active Markets for Identical Assets (Level 1)
 
Significant
Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
Total
Assets:
 
 
 
 
 
 
 
 
Deferred compensation plan:
 
 
 
 
 
 
 
 
Corporate-owned life insurance
 

$—

 

$151,871

 

$—

 

$151,871

Money market funds
 
20

 

 

 
20

Total assets
 

$20

 

$151,871

 

$—

 

$151,891

 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
Contingent consideration
 

$—

 

$—

 

$18,326

 

$18,326



The Company maintains the HEICO Corporation Leadership Compensation Plan (the "LCP"), which is a non-qualified deferred compensation plan. The assets of the LCP principally represent cash surrender values of life insurance policies, which derive their fair values from investments in mutual funds that are managed by an insurance company and are classified within Level 2 and valued using a market approach. Certain other assets of the LCP represent investments in money market funds that are classified within Level 1. The assets of the LCP are held within an irrevocable trust and classified within other assets in the Company’s Condensed Consolidated Balance Sheets. The related liabilities of the LCP are included within other long-term liabilities in the Company’s Condensed Consolidated Balance Sheets and have a value of $168.9 million as of January 31, 2020 and $151.1 million as of October 31, 2019.

As part of the agreement to acquire a subsidiary by the FSG in fiscal 2019, the Company may be obligated to pay contingent consideration of $6.4 million in fiscal 2022 should the acquired entity meet a certain earnings objective during the second and third years following the
acquisition. As of January 31, 2020, the estimated fair value of the contingent consideration was $1.2 million.

As part of the agreement to acquire a subsidiary by the ETG in fiscal 2017, the Company may be obligated to pay contingent consideration of $20.0 million in fiscal 2023 should the acquired entity meet a certain earnings objective during the first six years following the acquisition. As of January 31, 2020, the estimated fair value of the contingent consideration was $17.1 million.
    
The estimated fair value of the contingent consideration arrangements described above are classified within Level 3 and were determined using probability-based scenario analyses. Under this method, a set of discrete potential future subsidiary earnings was determined using internal estimates based on various revenue growth rate assumptions for each scenario. A probability of likelihood was assigned to each discrete potential future earnings estimate and the resultant contingent consideration was calculated. The resulting probability-weighted contingent consideration amounts were discounted using a weighted average discount rate reflecting the credit risk of HEICO. Changes in either the revenue growth rates, related earnings or the discount rate could result in a material change to the amount of contingent consideration accrued and such changes will be recorded in the Company's condensed consolidated statements of operations.

The Level 3 inputs used to derive the estimated fair value of the Company's contingent consideration liability as of January 31, 2020 were as follows:
 
Fiscal 2019 Acquisition
 
Fiscal 2017 Acquisition
Compound annual revenue growth rate range
(7
%)
-
9%
 
(3
%)
-
10%
Weighted average discount rate
5.4%
 
4.3%


Changes in the Company’s contingent consideration liability measured at fair value on a recurring basis using unobservable inputs (Level 3) for the three months ended January 31, 2020 are as follows (in thousands):
 
 
Liabilities
Balance as of October 31, 2019
 

$18,326

Increase in accrued contingent consideration
 
408

Payment of contingent consideration
 
(500
)
Balance as of January 31, 2020
 

$18,234



The Company's contingent consideration liability is included in other long-term liabilities in its Condensed Consolidated Balance Sheet and the Company records changes in accrued contingent consideration within selling, general and administrative expenses in its Condensed Consolidated Statement of Operations.

The Company did not have any transfers between Level 1 and Level 2 fair value measurements during the three months ended January 31, 2020.

The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, trade accounts payable and accrued expenses and other current liabilities approximate fair value as of January 31, 2020 due to the relatively short maturity of the respective instruments. The carrying amount of long-term debt approximates fair value due to its variable interest rates.
v3.19.3.a.u2
GOODWILL AND OTHER INTANGIBLE ASSETS
3 Months Ended
Jan. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Disclosure [Text Block] GOODWILL AND OTHER INTANGIBLE ASSETS

Changes in the carrying amount of goodwill by operating segment for the three months ended January 31, 2020 are as follows (in thousands):
 
 
Segment
 
Consolidated Totals
 
 
FSG
 
ETG
 
Balances as of October 31, 2019
 

$410,044

 

$858,659

 

$1,268,703

Goodwill acquired
 

 
33,268

 
33,268

Foreign currency translation adjustments
 
(200
)
 
(540
)
 
(740
)
Adjustments to goodwill
 

 
85

 
85

Balances as of January 31, 2020
 

$409,844

 

$891,472

 

$1,301,316



The goodwill acquired pertains to the fiscal 2020 acquisitions described in Note 2, Acquisitions, and represents the residual value after the allocation of the total consideration to the tangible and identifiable intangible assets acquired and liabilities and noncontrolling interests assumed. Foreign currency translation adjustments are included in other comprehensive income (loss) in the Company's Condensed Consolidated Statements of Comprehensive Income. The adjustments to goodwill represent immaterial measurement period adjustments to the purchase price allocation of certain fiscal 2019 acquisitions. The Company estimates that $10 million of the goodwill acquired in fiscal 2020 will be deductible for income tax purposes.


Identifiable intangible assets consist of the following (in thousands):
 
 
As of January 31, 2020
 
As of October 31, 2019
 
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Amortizing Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Customer relationships
 

$422,609

 

($172,037
)
 

$250,572

 

$411,076

 

($162,722
)
 

$248,354

Intellectual property
 
222,315

 
(74,021
)
 
148,294

 
216,359

 
(70,169
)
 
146,190

Licenses
 
6,559

 
(4,244
)
 
2,315

 
6,559

 
(4,102
)
 
2,457

Patents
 
992

 
(680
)
 
312

 
986

 
(666
)
 
320

Non-compete agreements
 
812

 
(812
)
 

 
813

 
(813
)
 

Trade names
 
450

 
(190
)
 
260

 
450

 
(180
)
 
270

 
 
653,737

 
(251,984
)
 
401,753

 
636,243

 
(238,652
)
 
397,591

Non-Amortizing Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Trade names
 
154,965

 

 
154,965

 
153,102

 

 
153,102

 
 

$808,702

 

($251,984
)
 

$556,718

 

$789,345

 

($238,652
)
 

$550,693



The increase in the gross carrying amount of customer relationships, intellectual property and trade names as of January 31, 2020 compared to October 31, 2019 principally relates to such intangible assets recognized in connection with the fiscal 2020 acquisitions (see Note 2, Acquisitions).

Amortization expense related to intangible assets for the three months ended January 31, 2020 and 2019 was $13.7 million and $12.8 million, respectively. Amortization expense related to intangible assets for the remainder of fiscal 2020 is estimated to be $41.4 million. Amortization expense for each of the next five fiscal years and thereafter is estimated to be $52.5 million in fiscal 2021, $46.0 million in fiscal 2022, $40.7 million in fiscal 2023, $36.2 million in fiscal 2024, $32.3 million in fiscal 2025, and $152.7 million thereafter.
v3.19.3.a.u2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3 Months Ended
Jan. 31, 2020
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies [Text Block] SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of HEICO Corporation and its subsidiaries (collectively, “HEICO,” or the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q. Therefore, the condensed consolidated financial statements do not include all information and footnotes normally included in annual consolidated financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended October 31, 2019. The October 31, 2019 Condensed Consolidated Balance Sheet has been derived from the Company’s audited consolidated financial statements. In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments (consisting principally of normal recurring accruals) necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, statements of comprehensive income, statements of shareholders' equity and statements of cash flows for such interim periods presented. The results of operations for the three months ended January 31, 2020 are not necessarily indicative of the results which may be expected for the entire fiscal year.

The Company has two operating segments: the Flight Support Group (“FSG”), consisting of HEICO Aerospace Holdings Corp. and HEICO Flight Support Corp. and their respective subsidiaries; and the Electronic Technologies Group (“ETG”), consisting of HEICO Electronic Technologies Corp. (“HEICO Electronic”) and its subsidiaries.
    
New Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, which, as amended, was codified as Accounting Standards Codification ("ASC") Topic 842, "Leases" ("ASC 842"). ASC 842 requires recognition of lease assets and lease liabilities on the balance sheet of lessees. The Company adopted ASC 842 as of November 1, 2019 using a modified retrospective transition approach with the election to apply the guidance as of the adoption date instead of at the beginning of the earliest comparative period presented. The adoption of this guidance resulted in an increase in the Company's assets and liabilities due to the recognition of right-of-use ("ROU") assets and corresponding lease liabilities for leases that are currently classified as operating leases.

Upon adoption, the Company elected the package of transitional practical expedients, which allowed the Company to not reassess its prior conclusions about lease identification, lease classification, and initial direct costs. In addition, the Company elected the short-term lease practical expedient, which allows HEICO to not record an ROU asset and lease liability for any
lease with a term of twelve months or less, and also elected the single component practical expedient for all asset classes, which allows the Company to include both lease and non-lease components associated with a lease as a single lease component when determining the value of the ROU asset and lease liability.

The adoption of this guidance resulted in the Company recording ROU assets and corresponding lease liabilities of $63.4 million and $64.1 million, respectively, in the Company's Condensed Consolidated Balance Sheet. The adoption of ASC 842 did not have a material impact on the Company’s Condensed Consolidated Statement of Operations or Statement of Cash Flows. See Note 9, Leases, for additional information regarding the Company's accounting policy for leases and disclosures required by ASC 842.    

In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment," which is intended to simplify the current test for goodwill impairment by eliminating the second step in which the implied value of a reporting unit is calculated when the carrying value of the reporting unit exceeds its fair value. Under ASU 2017-04, goodwill impairment should be recognized for the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 must be applied prospectively and is effective for any annual or interim goodwill impairment test in fiscal years beginning after December 15, 2019, or in fiscal 2021 for HEICO. Early adoption is permitted. The Company is currently evaluating the effect the adoption of this guidance will have on its consolidated results of operations, financial position and cash flows.
v3.19.3.a.u2
SELECTED FINANCIAL STATEMENT INFORMATION (Details Textuals) - USD ($)
$ in Millions
3 Months Ended
Jan. 31, 2020
Jan. 31, 2019
Oct. 31, 2019
Selected Financial Statement Information (Details) [Abstract]      
Accrued customer rebates and credits $ 19.4   $ 18.0
Total customer rebates and credits deducted within net sales $ 2.1 $ 1.4  
Electronic Technologies Group [Member] | Quell [Member]      
Business Acquisition [Line Items]      
Business Acquisition, Percentage of Voting Interests Acquired 80.10%    
v3.19.3.a.u2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textuals)
$ in Thousands
Jan. 31, 2020
USD ($)
Operating Lease, Right-of-Use Asset $ 62,114
Operating Lease, Liability 62,911
Accounting Standards Update 2016-02 [Member]  
Operating Lease, Right-of-Use Asset 63,400
Operating Lease, Liability $ 64,100
v3.19.3.a.u2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Thousands
3 Months Ended
Jan. 31, 2020
Jan. 31, 2019
Net income from consolidated operations $ 129,802 $ 88,026
Other comprehensive income (loss):    
Foreign currency translation adjustments (2,678) 4,374
Amortization of unrealized loss on defined benefit pension plan, net of tax 24 6
Total other comprehensive income (loss) (2,654) 4,380
Comprehensive income from consolidated operations 127,148 92,406
Less: Comprehensive income attributable to noncontrolling interests 7,914 8,694
Less: Foreign currency translation adjustments attributable to noncontrolling interests (130) 193
Comprehensive income attributable to noncontrolling interests 7,784 8,887
Comprehensive income attributable to HEICO $ 119,364 $ 83,519
v3.19.3.a.u2
DOCUMENT AND ENTITY INFORMATION - $ / shares
3 Months Ended
Jan. 31, 2020
Feb. 25, 2020
Document Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Transition Report false  
Entity Shell Company false  
Local Phone Number 987-4000  
Entity File Number 001-04604  
City Area Code 954  
Entity Interactive Data Current Yes  
Amendment Flag false  
Document Period End Date Jan. 31, 2020  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2020  
Entity Current Reporting Status Yes  
Entity Information [Line Items]    
Entity Incorporation, State or Country Code FL  
Entity Registrant Name HEICO CORPORATION  
Address 3000 Taft Street  
Entity Address, City or Town Hollywood  
State FL  
Zip Code 33021  
Entity Central Index Key 0000046619  
Entity Tax Identification Number 65-0341002  
Current Fiscal Year End Date --10-31  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Heico Common Stock [Member]    
Entity Information [Line Items]    
Title of 12(b) Security Common Stock, $.01 par value per share  
Security Exchange Name NYSE  
Trading Symbol HEI  
Entity Common Stock, Shares Outstanding   54,149,118
Entity Common Stock Par Value $ 0.01  
Common Class A [Member]    
Entity Information [Line Items]    
Title of 12(b) Security Class A Common Stock, $.01 par value per share  
Security Exchange Name NYSE  
Trading Symbol HEI.A  
Entity Common Stock, Shares Outstanding   80,510,464
Entity Common Stock Par Value $ 0.01  
v3.19.3.a.u2
SELECTED FINANCIAL STATEMENT INFORMATION (Property, Plant and Equipment) (Details) - USD ($)
$ in Thousands
Jan. 31, 2020
Oct. 31, 2019
Property, Plant and Equipment [Line Items]    
Land $ 6,819 $ 6,820
Buildings and improvements 117,111 116,997
Machinery, equipment and tooling 256,262 253,127
Construction in progress 10,743 8,382
Property, plant and equipment, gross 390,935 385,326
Less: Accumulated depreciation and amortization (218,636) (211,981)
Property, plant and equipment, net $ 172,299 $ 173,345
v3.19.3.a.u2
LEASES (ROU Assets and Lease Liabilities) (Details)
$ in Thousands
Jan. 31, 2020
USD ($)
Leases [Abstract]  
Right-of-use assets $ 62,114
Current lease liabilities 13,114
Long-term lease liabilities 49,797
Total operating lease liabilities $ 62,911
v3.19.3.a.u2
FAIR VALUE MEASUREMENTS (Fair Value Hierarchy, by Category) (Details) - USD ($)
$ in Thousands
Jan. 31, 2020
Oct. 31, 2019
Deferred Compensation Plans [Abstract]    
Deferred compensation plans $ 170,107 $ 151,891
Liabilities:    
Contingent consideration 18,234 18,326
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]    
Deferred Compensation Plans [Abstract]    
Deferred compensation plans 3,832 20
Liabilities:    
Contingent consideration 0 0
Significant Other Observable Inputs (Level 2) [Member]    
Deferred Compensation Plans [Abstract]    
Deferred compensation plans 166,275 151,871
Liabilities:    
Contingent consideration 0 0
Significant Unobservable Inputs (Level 3) [Member]    
Deferred Compensation Plans [Abstract]    
Deferred compensation plans 0 0
Liabilities:    
Contingent consideration 18,234 18,326
Corporate Owned Life Insurance [Member]    
Deferred Compensation Plans [Abstract]    
Deferred compensation plans 166,275 151,871
Corporate Owned Life Insurance [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]    
Deferred Compensation Plans [Abstract]    
Deferred compensation plans 0 0
Corporate Owned Life Insurance [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Deferred Compensation Plans [Abstract]    
Deferred compensation plans 166,275 151,871
Corporate Owned Life Insurance [Member] | Significant Unobservable Inputs (Level 3) [Member]    
Deferred Compensation Plans [Abstract]    
Deferred compensation plans 0 0
Money Market Funds [Member]    
Deferred Compensation Plans [Abstract]    
Deferred compensation plans 3,832 20
Money Market Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]    
Deferred Compensation Plans [Abstract]    
Deferred compensation plans 3,832 20
Money Market Funds [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Deferred Compensation Plans [Abstract]    
Deferred compensation plans 0 0
Money Market Funds [Member] | Significant Unobservable Inputs (Level 3) [Member]    
Deferred Compensation Plans [Abstract]    
Deferred compensation plans $ 0 $ 0
v3.19.3.a.u2
LEASES (Supplemental Cash Flow Information) (Details)
$ in Thousands
3 Months Ended
Jan. 31, 2020
USD ($)
Leases [Abstract]  
Cash paid for amounts included in the measurement of lease liabilities $ 4,243
Right-of-use assets obtained in exchange for new lease liabilities $ 5,162
v3.19.3.a.u2
LEASES
3 Months Ended
Jan. 31, 2020
Leases [Abstract]  
Lessee, Operating Leases [Text Block] LEASES

The Company’s lease arrangements primarily pertain to manufacturing facilities, office buildings, equipment, land and vehicles. The Company evaluates whether a contractual arrangement that provides it with control over the use of an asset is, or contains, a lease at the inception date. The term of a lease is inclusive of any option to renew, extend, or terminate the lease when it is reasonably certain that the Company will exercise such option. The Company classifies a lease as operating or finance using the classification criteria set forth in ASC 842. Finance leases are not material to the Company's condensed consolidated financial statements. HEICO recognizes operating lease right-of-use (“ROU”) assets and corresponding lease liabilities as of the lease commencement date based on the present value of the lease payments over the lease term. The discount rate used to calculate the present value of the Company’s leases is based on HEICO’s incremental borrowing rate and considers credit risk, the lease term and other available information as of the commencement date since the leases do not provide a readily determinable implicit rate. Variable lease payments that depend on an index or a rate are included in the determination of operating ROU assets and lease liabilities using the index or rate at the lease commencement date. Variable lease payments that do not depend on an index or rate or resulting from changes in an index or rate subsequent to the lease commencement date, are recorded as lease expense in the period in which the obligation for the payment is incurred. The Company’s operating ROU assets are increased by any prepaid lease payments and initial direct costs and reduced by any lease incentives. The Company’s leases do not contain any material residual value guarantees or restrictive covenants.

HEICO’s operating lease ROU assets represent its right to use an underlying asset during the lease term and its operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. HEICO’s operating lease ROU assets are included within other assets and its operating lease liabilities are included within both accrued expenses and other current liabilities and other long-term liabilities in the Company’s Condensed Consolidated Balance Sheet. For additional information on the Company’s finance leases, see Note 5, Long-term Debt, of the Notes to Condensed Consolidated Financial Statements of this quarterly report and Note 5, Long-term Debt, and Note 3, Selected Financial Statement Information - Property, Plant and Equipment, of the Notes to Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the year ended October 31, 2019. The following table presents the Company’s operating lease ROU assets and lease liabilities as of January 31, 2020 (in thousands):

 
January 31, 2020
Right-of-use assets

$62,114

 
 
Current lease liabilities

$13,114

Long-term lease liabilities
49,797

Total operating lease liabilities

$62,911



The Company’s operating lease expense is recorded as a component of cost of sales and/or selling, general, and administrative expenses in the Company’s Condensed Consolidated Statements of Operations. The following table presents the components of operating lease expense for the three months ended January 31, 2020 (in thousands):    

 
Three months ended
 
January 31, 2020
Operating lease expense

$4,260

Variable lease expense
615

Total operating lease expense (1)

$4,875

 
 
(1) 
Excludes short-term lease expense, which is not material.
    
The following table presents a maturity analysis of the Company's operating lease liabilities as of January 31, 2020 for the remainder of fiscal 2020 and the next five fiscal years and thereafter (in thousands):
Year ending October 31,
 
2020

$11,759

2021
15,776

2022
13,859

2023
8,536

2024
4,755

2025
3,998

Thereafter
18,055

Total minimum lease payments
76,738

Less: amount representing interest
(13,827
)
Present value of minimum lease payments

$62,911


Prior to the adoption of ASC 842, the Company's future minimum lease payments under non-cancelable operating leases on an undiscounted basis as of October 31, 2019 were $15.5 million in fiscal 2020, $15.6 million in fiscal 2021, $13.8 million in fiscal 2022, $8.5 million in fiscal 2023, $4.7 million in fiscal 2024 and $18.8 million thereafter.
    
The Company does not have any material leases that have been signed but have yet to commence as of January 31, 2020.
        
The following table presents the weighted average remaining lease term and discount rate of the Company’s operating leases as of January 31, 2020:
 
January 31, 2020
Weighted average remaining lease term (years)
7.1

Weighted average discount rate
5.2
%


The following table presents supplemental disclosures of cash flow information associated with the Company's operating leases for the three months ended January 31, 2020 (in thousands):
 
Three months ended
 
January 31, 2020
 
 
Cash paid for amounts included in the measurement of lease liabilities

$4,243

Right-of-use assets obtained in exchange for new lease liabilities

$5,162

 
 

v3.19.3.a.u2
LONG-TERM DEBT
3 Months Ended
Jan. 31, 2020
Debt Disclosure [Abstract]  
Long-term Debt [Text Block] LONG-TERM DEBT

Long-term debt consists of the following (in thousands):
 
 
January 31, 2020
 
October 31, 2019
Borrowings under revolving credit facility
 

$560,000

 

$553,000

Finance leases and note payable
 
8,796

 
8,955

 
 
568,796

 
561,955

Less: Current maturities of long-term debt
 
(932
)
 
(906
)
 
 

$567,864

 

$561,049



The Company's borrowings under its revolving credit facility mature in fiscal 2023. As of January 31, 2020 and October 31 2019, the weighted average interest rate on borrowings under the Company's revolving credit facility was 2.7% and 3.0%, respectively. The revolving credit facility contains both financial and non-financial covenants. As of January 31, 2020, the Company was in compliance with all such covenants.
v3.19.3.a.u2
COMMITMENTS AND CONTINGENCIES (Tables)
3 Months Ended
Jan. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Product Warranty Liability [Table Text Block]
Changes in the Company’s product warranty liability for the three months ended January 31, 2020 and 2019, respectively, are as follows (in thousands):
 
 
Three months ended January 31,
 
 
2020
 
2019
Balances as of beginning of fiscal year
 

$2,810

 

$3,306

Accruals for warranties
 
1,007

 
694

Acquired warranty liabilities
 
50

 

Warranty claims settled
 
(459
)
 
(829
)
Balances as of January 31
 

$3,408

 

$3,171


v3.19.3.a.u2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended
Jan. 31, 2020
Jan. 31, 2019
Net sales $ 506,275 $ 466,146
Operating costs and expenses:    
Cost of sales 308,228 283,909
Selling, general and administrative expenses 87,057 84,290
Total operating costs and expenses 395,285 368,199
Operating income 110,990 97,947
Interest expense (4,283) (5,489)
Other (expense) income 195 (332)
Income before income taxes and noncontrolling interests 106,902 92,126
Income tax expense (22,900) 4,100
Net income from consolidated operations 129,802 88,026
Less: Net income attributable to noncontrolling interests 7,914 8,694
Net income attributable to HEICO $ 121,888 $ 79,332
Net income per share attributable to HEICO shareholders:    
Basic (in dollars per share) $ 0.91 $ 0.60
Diluted (in dollars per share) $ 0.89 $ 0.58
Weighted average number of common shares outstanding:    
Basic (in shares) 134,523 132,933
Diluted (in shares) 137,421 136,978
v3.19.3.a.u2
SELECTED FINANCIAL STATEMENT INFORMATION (Inventories) (Details) - USD ($)
$ in Thousands
Jan. 31, 2020
Oct. 31, 2019
Inventory [Line Items]    
Finished products $ 211,279 $ 199,880
Work in process 38,184 32,548
Materials, parts, assemblies and supplies 191,787 187,891
Inventories, net of valuation reserves $ 441,250 $ 420,319
v3.19.3.a.u2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED - USD ($)
$ in Thousands
3 Months Ended
Jan. 31, 2020
Jan. 31, 2019
Operating Activities:    
Net income from consolidated operations $ 129,802 $ 88,026
Adjustments to reconcile net income from consolidated operations to net cash provided by (used in) operating activities:    
Depreciation and amortization 21,583 20,037
Share-based compensation expense 2,646 2,439
Employer contributions to HEICO Savings and Investment Plan 2,613 2,153
Change in value of contingent consideration 408 1,862
Deferred income tax provision (benefit) (25,718) 3,798
PaymentofContingentConsiderationinExcessofAcquisitionDateValue (175) (67)
Changes in operating assets and liabilities, net of acquisitions:    
Change in accounts receivable 23,734 4,982
Increase (Decrease) in Contract with Customer, Asset (1,719) 7,270
Change in inventories (20,449) (24,284)
Change in prepaid expenses and other current assets (3,303) (7,921)
Change in trade accounts payable (10,678) (19,832)
Change in accrued expenses and other current liabilities (48,319) (34,537)
Change in income taxes payable (1,334) (3,636)
Increase (Decrease) in Obligation, Other Postretirement Benefits 11,315 9,143
Other 730 133
Net cash provided by operating activities 81,136 49,566
Investing Activities:    
Acquisitions, net of cash acquired (45,343) (101,039)
Net Investment Related to Deferred Compensation Plan (11,800) (8,700)
Capital expenditures (6,850) (5,907)
Other 439 72
Net cash used in investing activities (63,554) (115,574)
Financing Activities:    
Proceeds from Long-term Lines of Credit 45,000 93,000
Payments on revolving credit facility (38,000) (17,000)
Cash dividends paid (10,762) (9,305)
Distributions to noncontrolling interests (4,881) (2,795)
Common Stock Issued Repurchased and Retired Related To Stock Option Exercises (2,562) (150)
Payment of Contingent Consideration (325) (283)
Proceeds from stock option exercises 1,528 66
Other (213) 29
Net cash (used in) provided by financing activities (10,215) 63,562
Effect of exchange rate changes on cash (397) 703
Net (decrease) increase in cash and cash equivalents 6,970 (1,743)
Cash and cash equivalents at beginning of year 57,001 59,599
Cash and cash equivalents at end of period $ 63,971 $ 57,856
v3.19.3.a.u2
SELECTED FINANCIAL STATEMENT INFORMATION SELECTED FINANCIAL STATEMENT INFORMATION (Accumulated Other Comprehensive Loss) (Details) - USD ($)
$ in Thousands
3 Months Ended
Jan. 31, 2020
Jan. 31, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Starting accumulated other comprehensive loss $ (16,739)  
Unrealized gain (2,548)  
Amortization of unrealized loss on defined benefit pension plan, net of tax 24 $ 6
Ending accumulated other comprehensive loss (19,263)  
Foreign Currency Translation [Member]    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Starting accumulated other comprehensive loss (14,989)  
Unrealized gain (2,548)  
Ending accumulated other comprehensive loss (17,537)  
Pension Benefit Obligation [Member]    
Accumulated Other Comprehensive Income (Loss) [Line Items]    
Starting accumulated other comprehensive loss (1,750)  
Amortization of unrealized loss on defined benefit pension plan, net of tax 24  
Ending accumulated other comprehensive loss $ (1,726)  
v3.19.3.a.u2
LEASES (Details Textuals) - USD ($)
$ in Thousands
Jan. 31, 2020
Oct. 31, 2019
Item Effected [Line Items]    
Next fiscal twelve months $ 15,776  
Year Two 13,859  
Year three 8,536  
Year four 4,755  
Year five 3,998  
Thereafter $ 18,055  
Previous Accounting Guidance [Member]    
Item Effected [Line Items]    
Next fiscal twelve months   $ 15,500
Year Two   15,600
Year three   13,800
Year four   8,500
Year five   4,700
Thereafter   $ 18,800
v3.19.3.a.u2
LEASES (Operating Lease Expense) (Details)
$ in Thousands
3 Months Ended
Jan. 31, 2020
USD ($)
Leases [Abstract]  
Operating lease expense $ 4,260
Variable lease expense 615
Total operating lease expense (1) $ 4,875 [1]
[1]
Excludes short-term lease expense, which is not material.
v3.19.3.a.u2
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Level 3 Valuation Inputs) (Details) - Fair Value, Inputs, Level 3 [Member]
Jan. 31, 2020
Measurement Input, Long-term Revenue Growth Rate [Member] | FY2019 Acquisition [Member] | Minimum [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Business Combination, Contingent Consideration, Liability, Measurement Input (0.07)
Measurement Input, Long-term Revenue Growth Rate [Member] | FY2019 Acquisition [Member] | Maximum [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Business Combination, Contingent Consideration, Liability, Measurement Input 0.09
Measurement Input, Long-term Revenue Growth Rate [Member] | FY 2017 Acquisition [Member] | Minimum [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Business Combination, Contingent Consideration, Liability, Measurement Input (0.03)
Measurement Input, Long-term Revenue Growth Rate [Member] | FY 2017 Acquisition [Member] | Maximum [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Business Combination, Contingent Consideration, Liability, Measurement Input 0.10
Measurement Input, Discount Rate [Member] | FY2019 Acquisition [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Business Combination, Contingent Consideration, Liability, Measurement Input 0.054
Measurement Input, Discount Rate [Member] | FY 2017 Acquisition [Member]  
Fair Value Measurement Inputs and Valuation Techniques [Line Items]  
Business Combination, Contingent Consideration, Liability, Measurement Input 0.043
v3.19.3.a.u2
GOODWILL AND OTHER INTANGIBLE ASSETS (Goodwill) (Details)
$ in Thousands
3 Months Ended
Jan. 31, 2020
USD ($)
Goodwill [Line Items]  
Opening Balance $ 1,268,703
Goodwill acquired 33,268
Foreign currency translation adjustments (740)
Adjustments to goodwill 85
Ending Balance 1,301,316
Flight Support Group [Member]  
Goodwill [Line Items]  
Opening Balance 410,044
Goodwill acquired 0
Foreign currency translation adjustments (200)
Adjustments to goodwill 0
Ending Balance 409,844
Electronic Technologies Group [Member]  
Goodwill [Line Items]  
Opening Balance 858,659
Goodwill acquired 33,268
Foreign currency translation adjustments (540)
Adjustments to goodwill 85
Ending Balance $ 891,472
v3.19.3.a.u2
LONG-TERM DEBT (Details Textuals)
Jan. 31, 2020
Oct. 31, 2019
Revolving Credit Facility [Member]    
Debt Instrument [Line Items]    
Weighted average interest rate 2.70% 3.00%
v3.19.3.a.u2
REVENUE (Details Textuals)
$ in Millions
3 Months Ended
Jan. 31, 2020
USD ($)
REVENUE [Abstract]  
Contract with Customer, Liability, Revenue Recognized $ 13.4
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-02-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 1 year 1 day
Revenue, Remaining Performance Obligation, Amount $ 403.8
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-02-02  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 9 months
Revenue, Remaining Performance Obligation, Amount $ 214.9
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-11-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period 9 months 1 day
Revenue, Remaining Performance Obligation, Amount $ 188.9
v3.19.3.a.u2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($)
$ in Thousands
3 Months Ended
Jan. 31, 2020
Jan. 31, 2019
Schedule of Product Warranties [Line Items]    
Balances as of beginning of fiscal year $ 2,810 $ 3,306
Accruals for warranties 1,007 694
Acquired warranty liabilities 50  
Warranty claims settled (459) (829)
Balances as of end of period $ 3,408 $ 3,171
v3.19.3.a.u2
OPERATING SEGMENTS (Tables)
3 Months Ended
Jan. 31, 2020
Segment Reporting [Abstract]  
Schedule Of Segment Reporting Information By Segment [Table Text Block]

Information on the Company’s two operating segments, the FSG and the ETG, for the three months ended January 31, 2020 and 2019, respectively, is as follows (in thousands):
 
 
 
 
 
 
Other,
Primarily Corporate and
Intersegment
(1)
 
Consolidated
Totals
 
 
Segment
 
 
 
 
FSG
 
ETG
 
 
Three months ended January 31, 2020:
 
 
 
 
 
 
 
 
Net sales
 

$301,067

 

$208,411

 

($3,203
)
 

$506,275

Depreciation
 
3,617

 
2,928

 
255

 
6,800

Amortization
 
4,859

 
9,678

 
246

 
14,783

Operating income
 
62,045

 
57,491

 
(8,546
)
 
110,990

Capital expenditures
 
4,118

 
2,727

 
5

 
6,850

 
 
 
 
 
 
 
 
 
Three months ended January 31, 2019:
 
 
 
 
 
 
 
 
Net sales
 

$287,213

 

$184,429

 

($5,496
)
 

$466,146

Depreciation
 
3,355

 
2,606

 
251

 
6,212

Amortization
 
4,803

 
8,776

 
246

 
13,825

Operating income
 
52,880

 
51,602

 
(6,535
)
 
97,947

Capital expenditures
 
2,849

 
3,058

 

 
5,907

 
 
 
 
 
 
 
 
 


Reconciliation of Assets from Segment to Consolidated [Table Text Block]
Total assets by operating segment are as follows (in thousands):
 
 
 
 
 
 
Other,
Primarily Corporate
 
Consolidated
Totals
 
 
Segment
 
 
 
 
FSG
 
ETG
 
 
Total assets as of January 31, 2020
 

$1,182,947

 

$1,712,901

 

$201,273

 

$3,097,121

Total assets as of October 31, 2019
 
1,149,737

 
1,643,032

 
176,442

 
2,969,211


v3.19.3.a.u2
REVENUE (Tables)
3 Months Ended
Jan. 31, 2020
Revenue from Contract with Customer [Abstract]  
Contract with Customer, Asset and Liability [Table Text Block]
Changes in the Company’s contract assets and liabilities for the three months ended January 31, 2020 are as follows (in thousands):
 
January 31, 2020
 
October 31, 2019
 
Change
 
 
 
 
 
 
Contract assets

$44,823

 

$43,132

 

$1,691

Contract liabilities
26,148

 
23,809

 
2,339

Net contract assets

$18,675

 

$19,323

 

($648
)

Product Line [Member]  
Disaggregation of Revenue [Line Items]  
Disaggregation of Revenue [Table Text Block]
The following table summarizes the Company’s net sales by product line for each operating segment (in thousands):
 
 
Three months ended January 31,
 
 
2020
 
2019
Flight Support Group:
 
 
 
 
Aftermarket replacement parts (1) 
 

$168,267

 

$159,497

Repair and overhaul parts and services (2)
 
69,287

 
67,163

Specialty products (3)
 
63,513

 
60,553

Total net sales
 
301,067

 
287,213

 
 
 
 
 
Electronic Technologies Group:
 
 
 
 
Electronic component parts for defense,
space and aerospace equipment (4)
 
160,713

 
137,750

Electronic component parts for equipment
in various other industries (5)
 
47,698

 
46,679

Total net sales
 
208,411

 
184,429

 
 
 
 
 
Intersegment sales
 
(3,203
)
 
(5,496
)
 
 
 
 
 
Total consolidated net sales
 

$506,275

 

$466,146

 
 
 
 
 

(1) 
Includes various jet engine and aircraft component replacement parts.
(2) 
Includes primarily the sale of parts consumed in various repair and overhaul services on selected jet engine and aircraft components, avionics, instruments, composites and flight surfaces of commercial and military aircraft.
(3) 
Includes primarily the sale of specialty components such as thermal insulation blankets, renewable/reusable insulation systems, advanced niche components, complex composite assemblies, and expanded foil mesh.
(4) 
Includes various component parts such as electro-optical infrared simulation and test equipment, electro-optical laser products, electro-optical, microwave and other power equipment, high-speed interface products, power conversion products, underwater locator beacons, emergency locator transmission beacons, traveling wave tube amplifiers, microwave power modules, three-dimensional microelectronic and stacked memory products, crashworthy and ballistically self-sealing auxiliary fuel systems, radio frequency (RF) and microwave amplifiers, transmitters and receivers, high performance communications and electronic intercept receivers and tuners, high performance active antenna systems, and technical surveillance countermeasures equipment.
(5) 
Includes various component parts such as electromagnetic and radio interference shielding, high voltage interconnection devices, high voltage advanced power electronics, harsh environment connectivity products, custom molded cable assemblies and silicone material for a variety of demanding applications.
Sales by Industry [Member]  
Disaggregation of Revenue [Line Items]  
Disaggregation of Revenue [Table Text Block]
The following table summarizes the Company’s net sales by industry for each operating segment (in thousands):
 
 
Three months ended January 31,
 
 
2020
 
2019
Flight Support Group:
 
 
 
 
Aerospace
 

$239,923

 

$235,173

Defense and Space
 
50,253

 
41,534

Other (1)
 
10,891

 
10,506

Total net sales
 
301,067

 
287,213

 
 
 
 
 
Electronic Technologies Group:
 
 
 
 
Defense and Space
 
133,110

 
115,219

Other (2)
 
54,963

 
49,915

Aerospace
 
20,338

 
19,295

Total net sales
 
208,411

 
184,429

 
 
 
 
 
Intersegment sales
 
(3,203
)
 
(5,496
)
 
 
 
 
 
Total consolidated net sales
 

$506,275

 

$466,146

 
 
 
 
 

(1) 
Principally industrial products.
(2) 
Principally other electronics and medical products.
v3.19.3.a.u2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
3 Months Ended
Jan. 31, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]  
Basis of Presentation [Text Block]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of HEICO Corporation and its subsidiaries (collectively, “HEICO,” or the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q. Therefore, the condensed consolidated financial statements do not include all information and footnotes normally included in annual consolidated financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended October 31, 2019. The October 31, 2019 Condensed Consolidated Balance Sheet has been derived from the Company’s audited consolidated financial statements. In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments (consisting principally of normal recurring accruals) necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, statements of comprehensive income, statements of shareholders' equity and statements of cash flows for such interim periods presented. The results of operations for the three months ended January 31, 2020 are not necessarily indicative of the results which may be expected for the entire fiscal year.

The Company has two operating segments: the Flight Support Group (“FSG”), consisting of HEICO Aerospace Holdings Corp. and HEICO Flight Support Corp. and their respective subsidiaries; and the Electronic Technologies Group (“ETG”), consisting of HEICO Electronic Technologies Corp. (“HEICO Electronic”) and its subsidiaries.
    
Accounting Standards Update 2016-02 [Member]  
New Accounting Pronouncements or Change in Accounting Principle [Line Items]  
New Accounting Pronouncements, Policy [Policy Text Block]
In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, which, as amended, was codified as Accounting Standards Codification ("ASC") Topic 842, "Leases" ("ASC 842"). ASC 842 requires recognition of lease assets and lease liabilities on the balance sheet of lessees. The Company adopted ASC 842 as of November 1, 2019 using a modified retrospective transition approach with the election to apply the guidance as of the adoption date instead of at the beginning of the earliest comparative period presented. The adoption of this guidance resulted in an increase in the Company's assets and liabilities due to the recognition of right-of-use ("ROU") assets and corresponding lease liabilities for leases that are currently classified as operating leases.

Upon adoption, the Company elected the package of transitional practical expedients, which allowed the Company to not reassess its prior conclusions about lease identification, lease classification, and initial direct costs. In addition, the Company elected the short-term lease practical expedient, which allows HEICO to not record an ROU asset and lease liability for any
lease with a term of twelve months or less, and also elected the single component practical expedient for all asset classes, which allows the Company to include both lease and non-lease components associated with a lease as a single lease component when determining the value of the ROU asset and lease liability.

The adoption of this guidance resulted in the Company recording ROU assets and corresponding lease liabilities of $63.4 million and $64.1 million, respectively, in the Company's Condensed Consolidated Balance Sheet. The adoption of ASC 842 did not have a material impact on the Company’s Condensed Consolidated Statement of Operations or Statement of Cash Flows. See Note 9, Leases, for additional information regarding the Company's accounting policy for leases and disclosures required by ASC 842.
Accounting Standards Update 2017-04 [Member]  
New Accounting Pronouncements or Change in Accounting Principle [Line Items]  
Description of New Accounting Pronouncements Not yet Adopted [Text Block]
In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment," which is intended to simplify the current test for goodwill impairment by eliminating the second step in which the implied value of a reporting unit is calculated when the carrying value of the reporting unit exceeds its fair value. Under ASU 2017-04, goodwill impairment should be recognized for the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 must be applied prospectively and is effective for any annual or interim goodwill impairment test in fiscal years beginning after December 15, 2019, or in fiscal 2021 for HEICO. Early adoption is permitted. The Company is currently evaluating the effect the adoption of this guidance will have on its consolidated results of operations, financial position and cash flows.
v3.19.3.a.u2
ACQUISITIONS (Details Textuals)
3 Months Ended
Jan. 31, 2020
Electronic Technologies Group [Member] | HMI [Member]  
Business Acquisition [Line Items]  
Description of Acquired Entity HMI designs, manufactures, and repairs flight deck annunciators, panels, indicators, and illuminated keyboards, as well as lighting controls, and flight deck lighting.
Business Acquisition, Percentage of Voting Interests Acquired 100.00%
Electronic Technologies Group [Member] | Quell [Member]  
Business Acquisition [Line Items]  
Name of Acquired Entity Quell Corporation
Description of Acquired Entity Quell designs and manufactures electromagnetic interference (EMI)/radio-frequency interference (RFI) and transient protection solutions for a wide variety of connectors that principally serve customers within the aerospace and defense markets.
Business Acquisition, Percentage of Voting Interests Acquired 80.10%
Existing Management [Member] | Quell [Member]  
Business Acquisition [Line Items]  
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners 19.90%
v3.19.3.a.u2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME - UNAUDITED - USD ($)
$ in Thousands
Total
Redeemable Noncontrolling Interests [Member]
Common Stock [Member]
Common Stock [Member]
Class A Common Stock [Member]
Capital In Excess Of Par Value [Member]
Deferred Compensation Obligation [Member]
HEICO Stock Held By Irrevocable Trust [Member]
AOCI Attributable to Parent [Member]
Retained Earnings [Member]
Noncontrolling Interest [Member]
Total Shareholders Equity [Member]
Starting Balance at Oct. 31, 2018     $ 534 $ 796 $ 320,994 $ 3,928 $ (3,928) $ (15,256) $ 1,091,183 $ 104,757 $ 1,503,008
Increase (Decrease) in Stockholders' Equity [Roll Forward]                      
Comprehensive Income (Loss), Net of Tax, Attributable to Parent $ 83,519             4,187 79,332    
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest 8,887 $ 3,639               5,248  
Comprehensive income 92,406                   88,767
Cash dividends                 (9,305)   (9,305)
Issuance of common stock to Savings and Investment Plan         1,046           1,046
Share-based compensation expense         2,439           2,439
Proceeds from stock option exercises                     66
Proceeds from stock option exercises, Adjustment to Additional Paid in Capital         66            
Stock Redeemed or Called During Period, Value         (150)           (150)
Noncontrolling Interest, Increase from Business Combination   5,116               2,355 2,355
Distributions to noncontrolling interests   (2,397)               (398) (398)
Adjustments to redemption amount of redeemable noncontrolling interests   (228)             228   228
Deferred compensation obligation           (115)          
Stock Issued During Period Value Deferred Compensation Obligation             115        
Ending Balance at Jan. 31, 2019     534 796 324,395 4,043 (4,043) (11,069) 1,174,811 112,288 1,601,755
Starting Balance, Redeemable Noncontrolling Interests at Oct. 31, 2018   132,046                  
Increase (Decrease) in Temporary Equity [Roll Forward]                      
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest 8,887 3,639               5,248  
Noncontrolling Interest, Increase from Business Combination   5,116               2,355 2,355
Distributions to noncontrolling interests   (2,397)               (398) (398)
Adjustments to redemption amount of redeemable noncontrolling interests   (228)             228   228
Ending Balance, Redeemable Noncontrolling Interests at Jan. 31, 2019   138,995                  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                      
Cumulative Effect of New Accounting Principle in Period of Adoption | Accounting Standards Update 2014-09 [Member]   819             13,373 326 13,699
Increase (Decrease) in Temporary Equity [Roll Forward]                      
Cumulative Effect of New Accounting Principle in Period of Adoption | Accounting Standards Update 2014-09 [Member]   819             13,373 326 13,699
Starting Balance at Oct. 31, 2019 1,694,660   541 804 284,609 4,232 (4,232) (16,739) 1,397,327 28,118 1,694,660
Increase (Decrease) in Stockholders' Equity [Roll Forward]                      
Comprehensive Income (Loss), Net of Tax, Attributable to Parent 119,364             (2,524) 121,888    
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest 7,784 4,767               3,017  
Comprehensive income 127,148                   122,381
Cash dividends                 (10,762)   (10,762)
Issuance of common stock to Savings and Investment Plan         1,298           1,298
Share-based compensation expense         2,646           2,646
Proceeds from stock option exercises       1             1,528
Proceeds from stock option exercises, Adjustment to Additional Paid in Capital         1,527            
Stock Redeemed or Called During Period, Value         (2,562)           (2,562)
Noncontrolling Interest, Increase from Business Combination   7,540                  
Distributions to noncontrolling interests   (4,347)               (534) (534)
Adjustments to redemption amount of redeemable noncontrolling interests   (331)             331   331
Adjustments to Additional Paid in Capital, Other         261           261
Ending Balance at Jan. 31, 2020 1,809,247   $ 541 $ 805 $ 287,779 $ 4,232 $ (4,232) $ (19,263) 1,508,784 30,601 1,809,247
Starting Balance, Redeemable Noncontrolling Interests at Oct. 31, 2019 188,264 188,264                  
Increase (Decrease) in Temporary Equity [Roll Forward]                      
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest 7,784 4,767               3,017  
Noncontrolling Interest, Increase from Business Combination   7,540                  
Distributions to noncontrolling interests   (4,347)               $ (534) (534)
Adjustments to redemption amount of redeemable noncontrolling interests   (331)             $ 331   $ 331
Ending Balance, Redeemable Noncontrolling Interests at Jan. 31, 2020 $ 195,893 $ 195,893                  
v3.19.3.a.u2
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED - USD ($)
$ in Thousands
Jan. 31, 2020
Oct. 31, 2019
Current assets:    
Cash and cash equivalents $ 63,971 $ 57,001
Accounts receivable, net 252,050 274,326
Contract assets 44,823 43,132
Inventories, net 441,250 420,319
Prepaid expenses and other current assets 22,616 18,953
Total current assets 824,710 813,731
Property, plant and equipment, net 172,299 173,345
Goodwill 1,301,316 1,268,703
Intangible assets, net 556,718 550,693
Other assets 242,078 162,739
Total assets 3,097,121 2,969,211
Current liabilities:    
Current maturities of long-term debt 932 906
Trade accounts payable 95,385 106,225
Accrued expenses and other current liabilities 144,472 178,957
Income taxes payable 2,742 3,050
Total current liabilities 243,531 289,138
Long-term debt, net of current maturities 567,864 561,049
Deferred income taxes 29,835 51,496
Other long-term liabilities 250,751 184,604
Total liabilities 1,091,981 1,086,287
Commitments and contingencies
Redeemable noncontrolling interests 195,893 188,264
Shareholders' equity:    
Preferred Stock, $.01 par value per share; 10,000 shares authorized; none issued 0 0
Common Stock 541 541
Capital in excess of par value 287,779 284,609
Deferred compensation obligation 4,232 4,232
HEICO stock held by irrevocable trust (4,232) (4,232)
Accumulated other comprehensive loss (19,263) (16,739)
Retained earnings 1,508,784 1,397,327
Total HEICO shareholders' equity 1,778,646 1,666,542
Noncontrolling interests 30,601 28,118
Total shareholders' equity 1,809,247 1,694,660
Total liabilities and equity 3,097,121 2,969,211
Class A Common Stock [Member]    
Shareholders' equity:    
Common Stock $ 805 $ 804
v3.19.3.a.u2
SELECTED FINANCIAL STATEMENT INFORMATION SELECTED FINANCIAL STATEMENT INFORMATION (Research and Development Expenses) (Details) - USD ($)
$ in Thousands
3 Months Ended
Jan. 31, 2020
Jan. 31, 2019
Selected Financial Statement Information (Details) [Abstract]    
R&D expenses $ 17,103 $ 15,200
v3.19.3.a.u2
INCOME TAXES
3 Months Ended
Jan. 31, 2020
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block] INCOME TAXES
    
The Company incurred an income tax benefit of $22.9 million in the first quarter of fiscal 2020 compared to income tax expense of $4.1 million in the first quarter of fiscal 2019. The Company recognized a discrete tax benefit from stock option exercises in both the first quarter of fiscal 2020 and 2019 of $47.6 million and $16.6 million, respectively. The $31.0 million larger benefit from stock option exercises recognized in the first quarter of fiscal 2020 was the result of more stock options exercised and the strong appreciation in HEICO's stock price during the optionees' holding periods. The Company recognized a $25.7 million non-cash deferred income tax benefit in the first quarter of fiscal 2020 that is principally attributable to the tax benefit from stock option exercises, which it expects to realize during the remainder of fiscal 2020.
v3.19.3.a.u2
SELECTED FINANCIAL STATEMENT INFORMATION
3 Months Ended
Jan. 31, 2020
Selected Financial Statement Information [Abstract]  
Selected Financial Statement Information [Text Block] SELECTED FINANCIAL STATEMENT INFORMATION

Accounts Receivable
(in thousands)
 
January 31, 2020
 
October 31, 2019
Accounts receivable
 

$256,678

 

$277,992

Less: Allowance for doubtful accounts
 
(4,628
)
 
(3,666
)
Accounts receivable, net
 

$252,050

 

$274,326



Inventories
(in thousands)
 
January 31, 2020
 
October 31, 2019
Finished products
 

$211,279

 

$199,880

Work in process
 
38,184

 
32,548

Materials, parts, assemblies and supplies
 
191,787

 
187,891

Inventories, net of valuation reserves
 

$441,250

 

$420,319


Property, Plant and Equipment
(in thousands)
 
January 31, 2020
 
October 31, 2019
Land
 

$6,819

 

$6,820

Buildings and improvements
 
117,111

 
116,997

Machinery, equipment and tooling
 
256,262

 
253,127

Construction in progress
 
10,743

 
8,382

 
 
390,935

 
385,326

Less: Accumulated depreciation and amortization
 
(218,636
)
 
(211,981
)
Property, plant and equipment, net
 

$172,299

 

$173,345



Accrued Customer Rebates and Credits

The aggregate amount of accrued customer rebates and credits included within accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheets was $19.4 million as of January 31, 2020 and $18.0 million as of October 31, 2019. The total customer rebates and credits deducted within net sales for the three months ended January 31, 2020 and 2019 was $2.1 million and $1.4 million, respectively.

Research and Development Expenses

The amount of new product research and development ("R&D") expenses included in cost of sales for the three months ended January 31, 2020 and 2019 is as follows (in thousands):
 
 
Three months ended January 31,
 
 
2020
 
2019
R&D expenses
 

$17,103

 

$15,200



Redeemable Noncontrolling Interests

The holders of equity interests in certain of the Company's subsidiaries have rights ("Put Rights") that may be exercised on varying dates causing the Company to purchase their equity interests through fiscal 2029. The Put Rights, all of which relate either to common shares or membership interests in limited liability companies, provide that the cash consideration to be paid for their equity interests (the "Redemption Amount") be at fair value or a formula that management intended to reasonably approximate fair value based solely on a multiple of future earnings over a measurement period. Management's estimate of the aggregate Redemption Amount of all Put Rights that the Company could be required to pay is as follows (in thousands):
 
 
January 31, 2020
 
October 31, 2019
Redeemable at fair value
 

$144,240

 

$136,611

Redeemable based on a multiple of future earnings
 
51,653

 
51,653

Redeemable noncontrolling interests
 

$195,893

 

$188,264



As discussed in Note 2, Acquisitions, the Company, through HEICO Electronic, acquired 80.1% of the stock of Quell in December 2019. As part of the shareholders' agreement, the noncontrolling interest holders have the right to cause the Company to purchase their equity interests over a four-year period beginning in fiscal 2025, or sooner under certain conditions, and the Company has the right to purchase the same equity interests over the same period.

Accumulated Other Comprehensive Loss

Changes in the components of accumulated other comprehensive loss for the three months ended January 31, 2020 are as follows (in thousands):
 
 
Foreign Currency Translation
 
Defined Benefit Pension Plan
 
Accumulated
Other
Comprehensive Loss
Balances as of October 31, 2019
 

($14,989
)
 

($1,750
)
 

($16,739
)
Unrealized loss
 
(2,548
)
 

 
(2,548
)
Amortization of unrealized loss
 

 
24

 
24

Balances as of January 31, 2020
 

($17,537
)
 

($1,726
)
 

($19,263
)

v3.19.3.a.u2
OPERATING SEGMENTS
3 Months Ended
Jan. 31, 2020
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block] OPERATING SEGMENTS

Information on the Company’s two operating segments, the FSG and the ETG, for the three months ended January 31, 2020 and 2019, respectively, is as follows (in thousands):
 
 
 
 
 
 
Other,
Primarily Corporate and
Intersegment
(1)
 
Consolidated
Totals
 
 
Segment
 
 
 
 
FSG
 
ETG
 
 
Three months ended January 31, 2020:
 
 
 
 
 
 
 
 
Net sales
 

$301,067

 

$208,411

 

($3,203
)
 

$506,275

Depreciation
 
3,617

 
2,928

 
255

 
6,800

Amortization
 
4,859

 
9,678

 
246

 
14,783

Operating income
 
62,045

 
57,491

 
(8,546
)
 
110,990

Capital expenditures
 
4,118

 
2,727

 
5

 
6,850

 
 
 
 
 
 
 
 
 
Three months ended January 31, 2019:
 
 
 
 
 
 
 
 
Net sales
 

$287,213

 

$184,429

 

($5,496
)
 

$466,146

Depreciation
 
3,355

 
2,606

 
251

 
6,212

Amortization
 
4,803

 
8,776

 
246

 
13,825

Operating income
 
52,880

 
51,602

 
(6,535
)
 
97,947

Capital expenditures
 
2,849

 
3,058

 

 
5,907

 
 
 
 
 
 
 
 
 


(1) Intersegment activity principally consists of net sales from the ETG to the FSG.

Total assets by operating segment are as follows (in thousands):
 
 
 
 
 
 
Other,
Primarily Corporate
 
Consolidated
Totals
 
 
Segment
 
 
 
 
FSG
 
ETG
 
 
Total assets as of January 31, 2020
 

$1,182,947

 

$1,712,901

 

$201,273

 

$3,097,121

Total assets as of October 31, 2019
 
1,149,737

 
1,643,032

 
176,442

 
2,969,211


v3.19.3.a.u2
LEASES (Lease Term and Discount Rate) (Details)
Jan. 31, 2020
Leases [Abstract]  
Weighted average remaining lease term 7 years 1 month 6 days
Weighted average discount rate 5.20%
v3.19.3.a.u2
FAIR VALUE MEASUREMENTS (Details Textuals) - USD ($)
$ in Thousands
Jan. 31, 2020
Oct. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total liabilities $ 18,234 $ 18,326
Flight Support Group [Member] | FY2019 Acquisition [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total liabilities 1,200  
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High 6,400  
Electronic Technologies Group [Member] | FY 2017 Acquisition [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total liabilities 17,100  
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High 20,000  
Aggregate LCP Liability [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Related liabilities of deferred compensation plans, specified as other long-term liabilities $ 168,900 $ 151,100
v3.19.3.a.u2
OPERATING SEGMENTS (Details) - USD ($)
$ in Thousands
3 Months Ended
Jan. 31, 2020
Jan. 31, 2019
Segment Reporting Information [Line Items]    
Revenues $ 506,275 $ 466,146
Depreciation 6,800 6,212
Amortization 14,783 13,825
Operating income 110,990 97,947
Capital expenditures 6,850 5,907
Corporate And Eliminations [Member]    
Segment Reporting Information [Line Items]    
Revenues (3,203) (5,496)
Depreciation 255 251
Amortization 246 246
Operating income (8,546) (6,535)
Capital expenditures 5 0
Flight Support Group [Member] | Operating Segments [Member]    
Segment Reporting Information [Line Items]    
Revenues 301,067 287,213
Depreciation 3,617 3,355
Amortization 4,859 4,803
Operating income 62,045 52,880
Capital expenditures 4,118 2,849
Electronic Technologies Group [Member] | Operating Segments [Member]    
Segment Reporting Information [Line Items]    
Revenues 208,411 184,429
Depreciation 2,928 2,606
Amortization 9,678 8,776
Operating income 57,491 51,602
Capital expenditures $ 2,727 $ 3,058
v3.19.3.a.u2
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Textuals) - USD ($)
$ in Millions
3 Months Ended
Jan. 31, 2020
Jan. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]    
Business Acquisition, Goodwill, Expected Tax Deductible Amount $ 10.0  
Amortization expense related to intangible assets 13.7 $ 12.8
Estimated Amortization Expense, remainder of fiscal year 41.4  
Estimated Amortization Expense, for fiscal 2021 52.5  
Estimated Amortization Expense, for fiscal 2022 46.0  
Estimated Amortization Expense, for fiscal 2023 40.7  
Estimated Amortization Expense, for fiscal 2024 36.2  
Estimated Amortization Expense, for fiscal 2025 32.3  
Estimated Amortization Expense, thereafter $ 152.7  
v3.19.3.a.u2
REVENUE (Disaggregation of Revenue, by Product Line) (Details) - USD ($)
$ in Thousands
3 Months Ended
Jan. 31, 2020
Jan. 31, 2019
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax $ 506,275 $ 466,146
Flight Support Group [Member]    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax 301,067 287,213
Flight Support Group [Member] | Aftermarket Replacement Parts [Member]    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax [1] 168,267 159,497
Flight Support Group [Member] | Repair and Overhaul Parts and Services [Member]    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax [2] 69,287 67,163
Flight Support Group [Member] | Specialty Products [Member]    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax [3] 63,513 60,553
Electronic Technologies Group [Member]    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax 208,411 184,429
Electronic Technologies Group [Member] | Electronic Components for Defense, Space and Aerospace [Member]    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax [4] 160,713 137,750
Electronic Technologies Group [Member] | Other Electronic Components [Member]    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax [5] 47,698 46,679
Corporate And Eliminations [Member]    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax $ (3,203) $ (5,496)
[1]
Includes various jet engine and aircraft component replacement parts.
[2]
Includes primarily the sale of parts consumed in various repair and overhaul services on selected jet engine and aircraft components, avionics, instruments, composites and flight surfaces of commercial and military aircraft.
[3]
Includes primarily the sale of specialty components such as thermal insulation blankets, renewable/reusable insulation systems, advanced niche components, complex composite assemblies, and expanded foil mesh.
[4] Includes various component parts such as electro-optical infrared simulation and test equipment, electro-optical laser products, electro-optical, microwave and other power equipment, high-speed interface products, power conversion products, underwater locator beacons, emergency locator transmission beacons, traveling wave tube amplifiers, microwave power modules, three-dimensional microelectronic and stacked memory products, crashworthy and ballistically self-sealing auxiliary fuel systems, radio frequency (RF) and microwave amplifiers, transmitters and receivers, high performance communications and electronic intercept receivers and tuners, high performance active antenna systems
[5]
Includes various component parts such as electromagnetic and radio interference shielding, high voltage interconnection devices, high voltage advanced power electronics, harsh environment connectivity products, custom molded cable assemblies and silicone material for a variety of demanding applications.
v3.19.3.a.u2
LEASES (Tables)
3 Months Ended
Jan. 31, 2020
Leases [Abstract]  
Lessee, Operating Lease Asset and Liabilities [Table Text Block] The following table presents the Company’s operating lease ROU assets and lease liabilities as of January 31, 2020 (in thousands):

 
January 31, 2020
Right-of-use assets

$62,114

 
 
Current lease liabilities

$13,114

Long-term lease liabilities
49,797

Total operating lease liabilities

$62,911


Lease, Cost [Table Text Block] The following table presents the components of operating lease expense for the three months ended January 31, 2020 (in thousands):    

 
Three months ended
 
January 31, 2020
Operating lease expense

$4,260

Variable lease expense
615

Total operating lease expense (1)

$4,875

 
 
(1) 
Excludes short-term lease expense, which is not material.
Lessee, Operating Lease, Liability, Maturity [Table Text Block]
Year ending October 31,
 
2020

$11,759

2021
15,776

2022
13,859

2023
8,536

2024
4,755

2025
3,998

Thereafter
18,055

Total minimum lease payments
76,738

Less: amount representing interest
(13,827
)
Present value of minimum lease payments

$62,911


Lessee, Operating Lease Term and Discount Rate [Table Text Block]
The following table presents the weighted average remaining lease term and discount rate of the Company’s operating leases as of January 31, 2020:
 
January 31, 2020
Weighted average remaining lease term (years)
7.1

Weighted average discount rate
5.2
%

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]
The following table presents supplemental disclosures of cash flow information associated with the Company's operating leases for the three months ended January 31, 2020 (in thousands):
 
Three months ended
 
January 31, 2020
 
 
Cash paid for amounts included in the measurement of lease liabilities

$4,243

Right-of-use assets obtained in exchange for new lease liabilities

$5,162

 
 

v3.19.3.a.u2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)
3 Months Ended
Jan. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill [Table Text Block]

Changes in the carrying amount of goodwill by operating segment for the three months ended January 31, 2020 are as follows (in thousands):
 
 
Segment
 
Consolidated Totals
 
 
FSG
 
ETG
 
Balances as of October 31, 2019
 

$410,044

 

$858,659

 

$1,268,703

Goodwill acquired
 

 
33,268

 
33,268

Foreign currency translation adjustments
 
(200
)
 
(540
)
 
(740
)
Adjustments to goodwill
 

 
85

 
85

Balances as of January 31, 2020
 

$409,844

 

$891,472

 

$1,301,316


Schedule Of Identifiable Intangible Assets [Table Text Block]
Identifiable intangible assets consist of the following (in thousands):
 
 
As of January 31, 2020
 
As of October 31, 2019
 
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
Amortizing Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Customer relationships
 

$422,609

 

($172,037
)
 

$250,572

 

$411,076

 

($162,722
)
 

$248,354

Intellectual property
 
222,315

 
(74,021
)
 
148,294

 
216,359

 
(70,169
)
 
146,190

Licenses
 
6,559

 
(4,244
)
 
2,315

 
6,559

 
(4,102
)
 
2,457

Patents
 
992

 
(680
)
 
312

 
986

 
(666
)
 
320

Non-compete agreements
 
812

 
(812
)
 

 
813

 
(813
)
 

Trade names
 
450

 
(190
)
 
260

 
450

 
(180
)
 
270

 
 
653,737

 
(251,984
)
 
401,753

 
636,243

 
(238,652
)
 
397,591

Non-Amortizing Assets:
 
 
 
 
 
 
 
 
 
 
 
 
Trade names
 
154,965

 

 
154,965

 
153,102

 

 
153,102

 
 

$808,702

 

($251,984
)
 

$556,718

 

$789,345

 

($238,652
)
 

$550,693


v3.19.3.a.u2
COMMITMENTS AND CONTINGENCIES (Details Textuals)
$ in Millions
Jan. 31, 2020
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
Guarantor Obligations, Maximum Exposure, Undiscounted $ 4.8
v3.19.3.a.u2
NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
3 Months Ended
Jan. 31, 2020
Jan. 31, 2019
Numerator:    
Net income attributable to HEICO $ 121,888 $ 79,332
Denominator:    
Weighted Average Number of Shares Outstanding, Basic 134,523 132,933
Effect of dilutive stock options 2,898 4,045
Weighted Average Number of Shares Outstanding, Diluted 137,421 136,978
Earnings Per Share, Basic $ 0.91 $ 0.60
Earnings Per Share, Diluted $ 0.89 $ 0.58
Anti-dilutive stock options excluded 117 760
v3.19.3.a.u2
LONG-TERM DEBT (Details) - USD ($)
$ in Thousands
Jan. 31, 2020
Oct. 31, 2019
Borrowings under revolving credit facility $ 560,000 $ 553,000
Finance leases and note payable 8,796 8,955
Total debt and capital leases 568,796 561,955
Less: Current maturities of long-term debt (932) (906)
Long-term debt, net of current maturities $ 567,864 $ 561,049
v3.19.3.a.u2
REVENUE (Disaggregation of Revenue, by Industry) (Details) - USD ($)
$ in Thousands
3 Months Ended
Jan. 31, 2020
Jan. 31, 2019
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax $ 506,275 $ 466,146
Flight Support Group [Member]    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax 301,067 287,213
Flight Support Group [Member] | Aerospace [Member]    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax 239,923 235,173
Flight Support Group [Member] | Defense and Space [Member]    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax 50,253 41,534
Flight Support Group [Member] | Other Industries [Member]    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax [1] 10,891 10,506
Electronic Technologies Group [Member]    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax 208,411 184,429
Electronic Technologies Group [Member] | Aerospace [Member]    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax 20,338 19,295
Electronic Technologies Group [Member] | Defense and Space [Member]    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax 133,110 115,219
Electronic Technologies Group [Member] | Other Industries [Member]    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax [2] 54,963 49,915
Corporate And Eliminations [Member]    
Disaggregation of Revenue [Line Items]    
Revenue from Contract with Customer, Excluding Assessed Tax $ (3,203) $ (5,496)
[1] Principally industrial products.
[2] Principally other electronics and medical products.
v3.19.3.a.u2
FAIR VALUE MEASUREMENTS (Tables)
3 Months Ended
Jan. 31, 2020
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The Company's assets and liabilities that were measured at fair value on a recurring basis are set forth by level within the fair value hierarchy in the following tables (in thousands):
 
 
As of January 31, 2020
 
 
Quoted Prices
in Active Markets for Identical Assets
(Level 1)
 
Significant
Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
Total
Assets:
 
 
 
 
 
 
 
 
Deferred compensation plan:
 
 
 
 
 
 
 
 
Corporate-owned life insurance
 

$—

 

$166,275

 

$—

 

$166,275

Money market funds
 
3,832

 

 

 
3,832

Total assets
 

$3,832

 

$166,275

 

$—

 

$170,107

 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
Contingent consideration
 

$—

 

$—

 

$18,234

 

$18,234

 
 
As of October 31, 2019
 
 
Quoted Prices
in Active Markets for Identical Assets (Level 1)
 
Significant
Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
Total
Assets:
 
 
 
 
 
 
 
 
Deferred compensation plan:
 
 
 
 
 
 
 
 
Corporate-owned life insurance
 

$—

 

$151,871

 

$—

 

$151,871

Money market funds
 
20

 

 

 
20

Total assets
 

$20

 

$151,871

 

$—

 

$151,891

 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
Contingent consideration
 

$—

 

$—

 

$18,326

 

$18,326


Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]
The Level 3 inputs used to derive the estimated fair value of the Company's contingent consideration liability as of January 31, 2020 were as follows:
 
Fiscal 2019 Acquisition
 
Fiscal 2017 Acquisition
Compound annual revenue growth rate range
(7
%)
-
9%
 
(3
%)
-
10%
Weighted average discount rate
5.4%
 
4.3%

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]
Changes in the Company’s contingent consideration liability measured at fair value on a recurring basis using unobservable inputs (Level 3) for the three months ended January 31, 2020 are as follows (in thousands):
 
 
Liabilities
Balance as of October 31, 2019
 

$18,326

Increase in accrued contingent consideration
 
408

Payment of contingent consideration
 
(500
)
Balance as of January 31, 2020
 

$18,234


v3.19.3.a.u2
SELECTED FINANCIAL STATEMENT INFORMATION (Tables)
3 Months Ended
Jan. 31, 2020
Selected Financial Statement Information [Abstract]  
Schedule of Accounts Receivable [Table Text Block]

Accounts Receivable
(in thousands)
 
January 31, 2020
 
October 31, 2019
Accounts receivable
 

$256,678

 

$277,992

Less: Allowance for doubtful accounts
 
(4,628
)
 
(3,666
)
Accounts receivable, net
 

$252,050

 

$274,326


Schedule of Inventories [Table Text Block]
Inventories
(in thousands)
 
January 31, 2020
 
October 31, 2019
Finished products
 

$211,279

 

$199,880

Work in process
 
38,184

 
32,548

Materials, parts, assemblies and supplies
 
191,787

 
187,891

Inventories, net of valuation reserves
 

$441,250

 

$420,319


Schedule of Property, Plant and Equipment [Table Text Block]
Property, Plant and Equipment
(in thousands)
 
January 31, 2020
 
October 31, 2019
Land
 

$6,819

 

$6,820

Buildings and improvements
 
117,111

 
116,997

Machinery, equipment and tooling
 
256,262

 
253,127

Construction in progress
 
10,743

 
8,382

 
 
390,935

 
385,326

Less: Accumulated depreciation and amortization
 
(218,636
)
 
(211,981
)
Property, plant and equipment, net
 

$172,299

 

$173,345



Schedule of Research and Development Expenses [Table Text Block]
The amount of new product research and development ("R&D") expenses included in cost of sales for the three months ended January 31, 2020 and 2019 is as follows (in thousands):
 
 
Three months ended January 31,
 
 
2020
 
2019
R&D expenses
 

$17,103

 

$15,200


Schedule of Redeemable Noncontrolling Interests [Table Text Block] Management's estimate of the aggregate Redemption Amount of all Put Rights that the Company could be required to pay is as follows (in thousands):
 
 
January 31, 2020
 
October 31, 2019
Redeemable at fair value
 

$144,240

 

$136,611

Redeemable based on a multiple of future earnings
 
51,653

 
51,653

Redeemable noncontrolling interests
 

$195,893

 

$188,264


Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]
Changes in the components of accumulated other comprehensive loss for the three months ended January 31, 2020 are as follows (in thousands):
 
 
Foreign Currency Translation
 
Defined Benefit Pension Plan
 
Accumulated
Other
Comprehensive Loss
Balances as of October 31, 2019
 

($14,989
)
 

($1,750
)
 

($16,739
)
Unrealized loss
 
(2,548
)
 

 
(2,548
)
Amortization of unrealized loss
 

 
24

 
24

Balances as of January 31, 2020
 

($17,537
)
 

($1,726
)
 

($19,263
)

v3.19.3.a.u2
SELECTED FINANCIAL STATEMENT INFORMATION (Accounts Receivable) (Details) - USD ($)
$ in Thousands
Jan. 31, 2020
Oct. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Accounts receivable $ 256,678 $ 277,992
Less: Allowance for doubtful accounts (4,628) (3,666)
Accounts receivable, net $ 252,050 $ 274,326
v3.19.3.a.u2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME - UNAUDITED [PARENTHETICAL] - $ / shares
3 Months Ended
Jan. 31, 2020
Jan. 31, 2019
Cash dividends per share (in dollars per share) $ 0.080 $ 0.070
v3.19.3.a.u2
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED [PARENTHETICAL] - $ / shares
shares in Thousands
Jan. 31, 2020
Oct. 31, 2019
Preferred Stock, Par or Stated Value Per Share $ 0.01 $ 0.01
Preferred Stock, Shares Authorized 10,000 10,000
Preferred Stock, Shares Issued 0 0
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized 150,000 150,000
Common stock, shares issued 54,149 54,143
Common stock, shares outstanding 54,149 54,143
Class A Common Stock [Member]    
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized 150,000 150,000
Common stock, shares issued 80,484 80,353
Common stock, shares outstanding 80,484 80,353
v3.19.3.a.u2
SELECTED FINANCIAL STATEMENT INFORMATION SELECTED FINANCIAL STATEMENT INFORMATION (Redeemable Noncontrolling Interests) (Details) - USD ($)
$ in Thousands
Jan. 31, 2020
Oct. 31, 2019
Redeemable Noncontrolling Interest [Line Items]    
Redeemable at fair value $ 144,240 $ 136,611
Redeemable based on a multiple of future earnings 51,653 51,653
Redeemable noncontrolling interests $ 195,893 $ 188,264
v3.19.3.a.u2
NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS
3 Months Ended
Jan. 31, 2020
Earnings Per Share [Abstract]  
Earnings Per Share [Text Block] NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS
The computation of basic and diluted net income per share attributable to HEICO shareholders is as follows (in thousands, except per share data):
 
 
Three months ended January 31,
 
 
2020
 
2019
Numerator:
 
 
 
 
Net income attributable to HEICO
 

$121,888

 

$79,332

 
 
 
 
 
Denominator:
 
 
 
 
Weighted average common shares outstanding - basic
 
134,523

 
132,933

Effect of dilutive stock options
 
2,898

 
4,045

Weighted average common shares outstanding - diluted
 
137,421

 
136,978

 
 
 
 
 
Net income per share attributable to HEICO shareholders:
 
 
 
 
Basic
 

$.91

 

$.60

Diluted
 

$.89

 

$.58

 
 
 
 
 
Anti-dilutive stock options excluded
 
117

 
760


v3.19.3.a.u2
REVENUE
3 Months Ended
Jan. 31, 2020
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer [Text Block] REVENUE
    
Contract Balances

Contract assets (unbilled receivables) represent revenue recognized on contracts using an over-time recognition model in excess of amounts invoiced to the customer. Contract liabilities (deferred revenue) represent customer advances and billings in excess of revenue recognized and are included within accrued expenses and other current liabilities in the Company’s Condensed Consolidated Balance Sheet.    

Changes in the Company’s contract assets and liabilities for the three months ended January 31, 2020 are as follows (in thousands):
 
January 31, 2020
 
October 31, 2019
 
Change
 
 
 
 
 
 
Contract assets

$44,823

 

$43,132

 

$1,691

Contract liabilities
26,148

 
23,809

 
2,339

Net contract assets

$18,675

 

$19,323

 

($648
)

    
The increase in the Company's contract assets during the first quarter of fiscal 2020 mainly occurred within the ETG and principally reflects additional unbilled receivables on certain customer contracts using an over-time recognition model in excess of billings on certain customer contracts made during the quarter.

The increase in the Company's contract liabilities during the first quarter of fiscal 2020 mainly occurred within the FSG and principally reflects the receipt during the quarter of new customer deposits on certain customer contracts in excess of reductions to contract liabilities from customer deposits recognized as revenue.

The amount of revenue that the Company recognized during the first quarter of fiscal 2020 that was included in contract liabilities as of the beginning of fiscal 2020 was $13.4 million.
    
Remaining Performance Obligations

As of January 31, 2020, the Company had $403.8 million of remaining performance obligations associated with contracts with an original duration of greater than one year pertaining to the majority of the products offered by the ETG and the FSG's specialty products and
aftermarket replacement parts product lines. The Company will recognize net sales as these obligations are satisfied. The Company expects to recognize $214.9 million of this amount during the remainder of fiscal 2020 and $188.9 million thereafter, of which the majority is expected to occur in fiscal 2021.
    
Disaggregation of Revenue

The following table summarizes the Company’s net sales by product line for each operating segment (in thousands):
 
 
Three months ended January 31,
 
 
2020
 
2019
Flight Support Group:
 
 
 
 
Aftermarket replacement parts (1) 
 

$168,267

 

$159,497

Repair and overhaul parts and services (2)
 
69,287

 
67,163

Specialty products (3)
 
63,513

 
60,553

Total net sales
 
301,067

 
287,213

 
 
 
 
 
Electronic Technologies Group:
 
 
 
 
Electronic component parts for defense,
space and aerospace equipment (4)
 
160,713

 
137,750

Electronic component parts for equipment
in various other industries (5)
 
47,698

 
46,679

Total net sales
 
208,411

 
184,429

 
 
 
 
 
Intersegment sales
 
(3,203
)
 
(5,496
)
 
 
 
 
 
Total consolidated net sales
 

$506,275

 

$466,146

 
 
 
 
 

(1) 
Includes various jet engine and aircraft component replacement parts.
(2) 
Includes primarily the sale of parts consumed in various repair and overhaul services on selected jet engine and aircraft components, avionics, instruments, composites and flight surfaces of commercial and military aircraft.
(3) 
Includes primarily the sale of specialty components such as thermal insulation blankets, renewable/reusable insulation systems, advanced niche components, complex composite assemblies, and expanded foil mesh.
(4) 
Includes various component parts such as electro-optical infrared simulation and test equipment, electro-optical laser products, electro-optical, microwave and other power equipment, high-speed interface products, power conversion products, underwater locator beacons, emergency locator transmission beacons, traveling wave tube amplifiers, microwave power modules, three-dimensional microelectronic and stacked memory products, crashworthy and ballistically self-sealing auxiliary fuel systems, radio frequency (RF) and microwave amplifiers, transmitters and receivers, high performance communications and electronic intercept receivers and tuners, high performance active antenna systems, and technical surveillance countermeasures equipment.
(5) 
Includes various component parts such as electromagnetic and radio interference shielding, high voltage interconnection devices, high voltage advanced power electronics, harsh environment connectivity products, custom molded cable assemblies and silicone material for a variety of demanding applications.

The following table summarizes the Company’s net sales by industry for each operating segment (in thousands):
 
 
Three months ended January 31,
 
 
2020
 
2019
Flight Support Group:
 
 
 
 
Aerospace
 

$239,923

 

$235,173

Defense and Space
 
50,253

 
41,534

Other (1)
 
10,891

 
10,506

Total net sales
 
301,067

 
287,213

 
 
 
 
 
Electronic Technologies Group:
 
 
 
 
Defense and Space
 
133,110

 
115,219

Other (2)
 
54,963

 
49,915

Aerospace
 
20,338

 
19,295

Total net sales
 
208,411

 
184,429

 
 
 
 
 
Intersegment sales
 
(3,203
)
 
(5,496
)
 
 
 
 
 
Total consolidated net sales
 

$506,275

 

$466,146

 
 
 
 
 

(1) 
Principally industrial products.
(2) 
Principally other electronics and medical products.
v3.19.3.a.u2
ACQUISITIONS
3 Months Ended
Jan. 31, 2020
Business Combinations [Abstract]  
Acquisitions [Text Block] ACQUISITIONS

In December 2019, the Company, through a subsidiary of HEICO Electronic, acquired 100% of the business and assets of the Human-Machine Interface ("HMI") product line of Spectralux Corporation. HMI designs, manufactures, and repairs flight deck annunciators, panels, indicators, and illuminated keyboards, as well as lighting controls, and flight deck lighting.

In December 2019, the Company, through HEICO Electronic, acquired 80.1% of the stock of Quell Corporation ("Quell"). Quell designs and manufactures electromagnetic interference (EMI)/radio-frequency interference (RFI) and transient protection solutions for a wide variety of connectors that principally serve customers within the aerospace and defense markets. The remaining 19.9% continues to be owned by certain members of Quell's management team (see Note 3, Selected Financial Statement Information - Redeemable Noncontrolling Interests, for additional information).

The purchase price of each fiscal 2020 acquisition was paid in cash, principally using proceeds from the Company's revolving credit facility, and is not material or significant to the Company's condensed consolidated financial statements. The allocation of the total consideration for the fiscal 2020 acquisitions to the tangible and identifiable intangible assets acquired and liabilities and noncontrolling interests assumed is preliminary until the Company
obtains final information regarding their fair values. However, the Company does not expect any adjustment to such allocations to be material to the Company's consolidated financial statements. The operating results of the fiscal 2020 acquisitions were included in the Company’s results of operations from each of the effective acquisition dates. The amount of net sales and earnings of the fiscal 2020 acquisitions included in the Condensed Consolidated Statement of Operations for the three months ended January 31, 2020 is not material. Had the fiscal 2020 acquisitions occurred as of November 1, 2018, net sales, net income from consolidated operations, net income attributable to HEICO, and basic and diluted net income per share attributable to HEICO shareholders on a pro forma basis for the three months ended January 31, 2020 and 2019 would not have been materially different than the reported amounts.
v3.19.3.a.u2
LEASES (Future minimum lease payments) (Details)
$ in Thousands
Jan. 31, 2020
USD ($)
Lessee, Operating Lease, Liability, Payment, Due [Abstract]  
Current fiscal year $ 11,759
Next fiscal twelve months 15,776
Year Two 13,859
Year three 8,536
Year four 4,755
Year five 3,998
Thereafter 18,055
Total minimum lease payments 76,738
Less: amount representing interest (13,827)
Present value of minimum lease payments $ 62,911
v3.19.3.a.u2
FAIR VALUE MEASUREMENTS (Contingent Consideration Liability) (Details) - USD ($)
$ in Thousands
3 Months Ended
Jan. 31, 2020
Jan. 31, 2019
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Change in value of contingent consideration $ 408 $ 1,862
Significant Unobservable Inputs (Level 3) [Member]    
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]    
Opening balance, Liabilities 18,326  
Change in accrued contingent consideration 408  
Change in value of contingent consideration (500)  
Ending balance, Liabilities $ 18,234