Short answer
Heico Corp (HEI) filed its fiscal 2014 10-K annual report with the SEC on Dec 18, 2014.
- Top risk flagged: FAA certification risk: authorization suspension could halt aircraft-part repair and overhaul operations
Heico Corp FY2014 10-K analysis
AI summary of each section, grounded in the filing text
Business Overview
- Core model: FAA-approved aerospace replacement parts, repairs and niche electronic components sold below OEM pricing
- Flight Support Group rose to 67% of fiscal 2014 sales, versus 66% in 2013 and 63% in 2012
- Electronic Technologies Group emphasized mission-critical products across defense, space, medical, telecommunications and industrial applications
- Research and development reached $37.4 million in fiscal 2014, including $16.1 million in Flight Support and $21.3 million in Electronic Technologies
- Backlog shifted to $291 million, with Flight Support increasing to $135 million and Electronic Technologies declining to $156 million
Management Discussion & Analysis
- Revenue $1,132.3M, up 12% YoY, with FSG $762.8M, up 15%, and ETG $379.4M, up 8%
- Operating margin 18.0% vs 18.2%; net income attributable to HEICO $121.3M vs $102.4M
- Best segment FSG: $136.5M operating income, up 12%; ETG operating income $88.9M, up 7%
- Operating cash flow $190.7M; acquisitions $8.7M, capital expenditures $50.0M over three years, dividends $31.2M
- Fiscal 2015 outlook: higher sales and net income, with risks from defense budget cuts and weaker commercial aviation demand
Risk Factors
- FAA certification risk: authorization suspension could halt aircraft-part repair and overhaul operations
- Defense-budget exposure: 55% of Electronic Technologies Group sales tied to defense, satellite, spacecraft and homeland-security products
- Foreign-market exposure: 33% of fiscal 2014 consolidated net sales from customers outside the U.S.
- OEM competition: Pratt & Whitney and General Electric compete directly in jet-engine and component replacement parts
- Supply-chain vulnerability: supplier changes may require costly part recertification with customers and regulatory agencies
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