Short answer
Heico Corp (HEI) filed its fiscal 2013 10-K annual report with the SEC on Dec 19, 2013.
- Top risk flagged: FAA certification revocation or suspension: Aircraft parts and repair operations depend on continuing regulatory approvals
Heico Corp FY2013 10-K analysis
AI summary of each section, grounded in the filing text
Business Overview
- Two-segment aerospace and electronics manufacturer, combining FAA-approved replacement parts, repair services and mission-critical electronic components
- Fiscal 2013 acquisitions expanded backlog, with total backlog reaching $305 million versus $252 million in 2012
- Flight Support Group share increased to 66% of sales from 63%, while Electronic Technologies declined to 34% from 37%
- R&D rose to $32.9 million, with Flight Support at $14.2 million and Electronic Technologies at $18.7 million
- Workforce reached approximately 3,500 employees, including 1,900 in Flight Support and 1,600 in Electronic Technologies
Management Discussion & Analysis
- Revenue $1,008.8M, up 12% YoY from $897.3M
- Operating margin 18.2% vs 18.2%; net income attributable to HEICO $102.4M vs $85.1M
- Best segment FSG: sales $665.1M, operating income $122.1M, margin 18.4%
- Cash flow $131.8M; acquisitions $222.6M, capex $43.0M over three years, dividends $113.5M special
- Fiscal 2014 target: higher sales and net income; risks from defense budget cuts and commercial aviation demand
Risk Factors
- FAA certification revocation or suspension: Aircraft parts and repair operations depend on continuing regulatory approvals
- Defense exposure: Electronic Technologies Group derived approximately 52% of sales from defense, satellite, spacecraft and homeland-security products
- Foreign-market concentration: Approximately 35% of consolidated fiscal 2013 sales came from foreign customers across 100 countries
- Supply-chain vulnerability: Long-lead components may require costly customer and regulatory recertification when suppliers change
- Governance concentration: Executives, directors and affiliated entities controlled approximately 21% of Common Stock and 6% of Class A Common Stock
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