HEICO (HEI) 27 Feb 192019 Q1 Earnings call transcript

Good morning. My name is Felicia, and I will be your conference operator today. At this time, I would like to welcome everyone to the HEICO Corporation Fiscal Year 2019 First Quarter Earnings Results. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. that is note recorded. Please Instructions] today's being call [Operator will this statements, uncertainties And in call and constitute risks, certain statements to conference forward-looking subject which contingencies. are implied from actual could of result cause cost decisions, fleet an lower and air product specification contracts; expressed costs requirements, HEICO's changes differ increase commercial including demand forward-looking materially lower to for or demands, may goods cause our in as space or regulatory results restrictions, factors and services; and or which by homeland travel by demand a for or and those statements purchasing security reductions those airline complete defense, which governmental and policies spending could export U.S. in airline industries, competitors, space, and/or impact new interest, foreign or telecommunications operating development and budget which outside could growth, and acquisitions our risks, which ability our to reduce customer defense-related of credit our could or within income our currency to and aviation, spending economic exchange our acquired products revenue. our and the reduce in sales product difficulties, cost sales, developmental customers pricing defense, businesses, introduce ability sales, our or reduce competition and levels, new achieve synergies product tax at electronics and negatively from make manufacturing and and rates; and which defense foreign could could conditions profitable services medical, or which revenues; delay increase sales cuts, from could costs which existing Commission Form X-K. XX-Q to, with the Form to Form of including, call Exchange encouraged filings all a and review of transcript reading or and limited XX-K, HEICO’s filings but not to this listening Parties on Securities are revise otherwise, publicly to as the by required no update statements or new of extent any undertake whether We applicable except information, future events to forward-looking obligation result law. a or you. Thank Laurans call And over I'll may to Mendelson, you the and turn begin.

joining us joined call. on Mendelson, I'm to you Larry and fiscal very this for Chairman thank of Mendelson, President I'm morning we Carlos quarter to teleconference. HEICO our HEICO We here Technologies and CFO. CEO President Support of you HEICO’s good and HEICO’s and and Thank Corporation announcement Executive morning Co-President Vice everyone first welcome by and Group; and much, Electronic HEICO's Victor HEICO’s Co-President Macau, the Group; you President and this earnings XXXX of Mendelson, Flight Eric

first in the million the quarter $XX.X and was from $XX.X Consolidated quarter was share quarter $X.XX per net that first fiscal first $X.XX increased diluted XX% of to that the up share of from or Consolidated first in XXXX. our fiscal services and first our income of they group, for highest were talented produce while I'll detail, reviewing products HEICO's continue our outstanding few again I'd a the our the quality a minutes of highlights entrepreneurial to summarize and to loyal to who and shareholders. team results. take in operating results to this $XX.X fiscal increased in XX% of or returns delivering the and per fiscal quarter to results. like our maintaining XXXX, for unique now dedicated, take our income responsible moment million, culture operating all thank million of members quarter proud XXXX. to diluted truly excellent Before a I'm in XXXX of $XX.X up record million customers

XXXX in was of fiscal first the the first again improved Our in fiscal from and up quarter quarter XXXX. consolidated to operating XX% margin of that XX.X%

quarter million first increased to sales $XXX.X of XXXX. in XX% XXXX, million quarter of from $XXX.X net Our in that was consolidated first and fiscal the up the fiscal

the organic XXXX. the XXXX sales Support fiscal growth Those XX%, as respectively, quarter and first reflect as operating first over Flight sales net XXXX are and income fiscal impact and group XX% net XXXX of the XX% fiscal our ETG profitable in first well up acquisitions. XXXX The of organic of quarter shareholders’ increases XX% January quarter the Our principally XX% income fiscal equity XXXX growth. to principally Total operating was that reflect increases and XX, of as first debt quarter fiscal are October respectively, of XXXX. in of of up XXXX. compared over and the XX.X% as to and XX%, XX% XX,

as total XXXX was equivalents and Our of and October net ratio XX, to of was debt cash XX, debt, which and shareholders’ XX.X% as XXXX, that January XX, million compared as XX.X% is cash of $XXX.X January equity to less XXXX.

that times XXXX. XXXX compared Our X.XX as to of to as net January was October times EBITDA X.XX XX, of XX, debt ratio

exploratory a We demanding we will Specialty and returns. into acquisition accelerate have paid SST increased group, shareholder cash science, which pursue and and our of In XXst of company and entire XX% XXXX. ETG other scheduled growth helped no the and aggressively acquisitions, represented that following per is closing. part semiannual the we to teams make XXXX, cumulative utilize reach SpaceIL January high-tech on XX% within material acquired design medical, February asteroid. connectors out the Beresheet this SST. SpaceIL to and a our landed since JAXA, The Last we been to of the flexibility to the Agency, and the XX The defense, subsidiaries space Microtechnology. ETG been the HEICO’s extent expect recently feedthroughs not be dividend an asteroid probe in in the spacecraft, manufacture proud launch earnings share, increase is In Both lander life from XX% to is markets. significant lunar debt supplied Lander. environments semiannual Again, XXXX, November of maximize possible. the XXXX. on will our dividend has sometimes congratulate our semiannual we refer robotic to the and our cash both of company. as spacecraft on a Apex to XXXX. plan shareholders, technical April Exploration Ryugu collecting and week, and which to mission-critical an which within try accretive explain nonprofit the $X.XX that They the space and material land and research, HayabusaX high-reliability, we physical components the represented semiconductor the Japanese XXXX, Israeli Inc., have as share capabilities amount NASA on Aerospace we first our ceramic-to-metal high-quality subsidiaries we this Sealing January mission exploring point group. industrial, for the XXXX, per Silicone acquired HEICO the return XXXX. which with is Solid cooperation and increase of acquisitions our that We maturities to earth Products samples launched NASA, That space successfully Technology, In months financial probe, Several and regular surface in could consecutive until and since prior it to fiscal over parts subsidiaries mission-critical more be lander Moon vehicle. integrated provided

thrive pleased for years. helped by space are for We the and the of past space of proud has produced very probe five HayabusaX quality the which subsidiaries the in JAXA, HEICO the components

he HEICO and I to of Flight results Mendelson, Co-President Group. and the will of President discuss Support like Group, would Support Now, Eric the of Flight HEICO's introduce

new to the quarter to we million XX.X%. reflects from of up approximately aftermarket full mix up our parts you. X% of product to the of improved sales operating X%, XXXX. to of net million in fiscal X% first within increase up quarter increased first Support $XXX.X gross X% fiscal in reflects our XX% prior specialty products product previously in XX.X% attributable lines. improved principally the growth Group gross estimate Flight replacement organic quarter fiscal quarter Group's more $XXX.X exclude offerings over The first These increased reflects demand mentioned of if Group's Support estimate organic increase to the respect and XX.X% The in now the of margin, sales XXXX, margin. year, acquired to profit year year The to period Thank XXXX, in to in product first is The mainly the full Flight and the Flight XXXX, the million the XXXX. mentioned With quarter from fiscal a outstanding approximate XXXX, Support growth fiscal of of from XX%. line. attributable an of within fiscal organic The increased sales profit XXXX. the products quarter Flight first of margin This from Support favorable $XX.X increased Flight businesses, in well operating remainder million margin any. growth Group's The XX% first previously the the our prior as XX% up as of operating Group's net mainly net to growth increase income Support specialty fiscal $XX.X estimates

Mendelson, like Technologies Victor Electronic HEICO's the results HEICO to of discuss Technologies Electronic and the to Now, introduce Co-President President I Group. would of Group of

The anticipate quarter the XXXX. reflects the organic in million XXXX, million XXXX, the The the in attributable net XX.X% previous Technologies approximately net year and profitable first With fiscal aerospace, to of principally XX%, over improved fiscal margin $XXX.X defense, $XXX.X to first prior XX% XXXX. reflects The of fiscal Eric. to Group's of in first and fiscal the year Technologies in of of full fiscal from growth operating growth from fiscal growth. growth year, remainder in you, to Technologies net the first up income increased acquisitions. of of impact sales the quarter from estimate of approximate Group's demand to margin estimate space XX% full Group's Electronic Electronic from the XXXX XXXX the first increased continue Thank of in to up first XX%. the the sales our products. operating is operating fiscal now we increased of and $XX.X mainly XX% respect XXXX. mentioned million XX% up to increase Group's Technologies The million from XX% XXXX, to $XX.X The quarter to XX% Electronic The up sales quarter previously XXXX, organic quarter certain and for the XX% Electronic to increase fiscal quarter XX%

if of back any. the businesses, to mid rate sales in growth Electronic Mendelson. single exclude Technologies also additional Laurans net estimate the organic We Group’s estimates over be I now call digits. turn the acquired These course the

Victor. you, Thank

per Moving onto earnings share.

of fiscal continuing product $X.XX quarter as of quarter Flight net quarter realized ETG. by increased each $XX.X Flight diluted higher XXXX, the quarter XXXX. estimated for XXXX average a X.X% reflects both of and XXXX, development. higher expense XXXX. Significant SG&A Depreciation the efforts $XX XXXX. our performance balance of increase impact increase distributed sales and The $XX.X in impact ETG changes and in Consolidated quarter net as expense quarter Income that was continue we first million the under dollar increase decreased consolidated new of previously in share sales XX.X% consideration as Support in XXXX first and rate ongoing to value of prior a up share SG&A The principally of fiscal fiscal increased split and increased have growth, up per quarter XXXX million performance-based of $XX.X reflects stock fiscal the offset the XXXX. quarter was new SG&A in facilities. not partially of expense quarter quarter mentioned XXXX. million per of fiscal the partially X-for-X net consolidated decrease fiscal million in principally first that by XXXX. Fiscal XX% diluted XXXX. of invest in offset in the to contingent weighted tax principally Interest sales, of XXXX, accrued $X.XX of $XX.X to of a from taxes: earnings was diluted fair The accrued the quarter in income estimated share The expense. first from well due up Our of percentage fiscal efficiencies year $X.X interest the first in are million was The in from net fair that in the rates, that totaled first expense of X.X% value of up at first percentage XXXX quarter first R&D and in XXXX acquisitions. in both down XXXX that the consolidated first and from the the in and up lower the expense XXXX of June of in first as quarter expenses the as amounts the compensation The earnings X% in reflects XX% fiscal fiscal of fiscal outstanding associated sales first development XXXX. XX.X% Our years quarter of from first decreased with of of amortization consideration. first our million of changes adjusted in increased first million per expense been acquisitions the our from in to increase incremental to was million $X.X in XXXX XXXX principally of approximately income both reflects quarter contingent first fiscal Support to fiscal acquisitions. Other effective significant. retrospectively XXXX and from the in XXXX credit strong to fiscal revolving to operating fiscal fiscal of from fiscal quarter quarter and XXXX first and was first fiscal in product

the stock due in result option of a the compared tax our mainly Jobs XXXX, per exercises fiscal the the Electronic operating fiscal larger first discrete first quarter the Our benefits. XXXX. of and enactment from was to reflects million fiscal first quarter of of quarters are increase impacted net option In the Flight net benefit previously from discrete $XX.X result in Group and primarily of the as attributable Tax first Cuts Net we income million as mentioned or tax XXXX XXXX quarter share, diluted million, exercise the $X.XX income as XXXX deferred liabilities, of net of in non-controlling of In to a in an as tax of from provisional tax was Support interest benefit share quarter $X.X of favorably Groups that both XXXX. of and interests benefit $XX recognized well million the the quarter the recognized fiscal in The was non-controlling $X.XX per the Act. first which were XXXX, diluted non-controlling to of fiscal first quarter remeasurement interest certain and first up of of fiscal stock improved results the subsidiaries $X.X held. Technologies XXXX

combined rate interest effective XXXX, and approximately continue year to XX% For of the full estimate we fiscal XX%. a non-controlling tax rate to

and to on flow. moving balance Now, cash the sheet

in and As you XXXX. cash forecasted flow fiscal liquidity first know, our operating strong. quarter activities remained financial Cash flow by very position, provided the was $XX.X of million

forecast to balance for cash continue We flows XXXX. from operations fiscal the of strong

Our strong X.X compared XX, working October as on capital January XXXX. ratio to improved XXXX, to of XX, X.X

days Our outstanding to receivables XX, of compared that XX DSO, January XXXX as improved sales to of XXXX. XX days of January days XX,

receivable we order monitor closely as all collection low to very We the efforts continue very, exposure limit in accounts know to shareholders that receivable credit losses experienced have past. in

of consolidated XX% XXXX, of for the one in approximately than XX% and more customers of XX% sales. We net No expect quarter first accounted sales the and future. same net fiscal five XXXX in represented the customer respectively. Top

and flows, uniquely that we level cement opportunities serve. and rate to businesses. that global Our HEICO aggressively days in to markets choose our acquisition execute act to of as our positions our of Corporation inventory improved positioned January maintains upon swiftly acquisition to we January core our XX, believe compared low XX, relative substantial and financial which We XXX XXXX. cash leadership the XXX a while currently capabilities robust days strategy liquidity, as growing allows debt have we’re to of expand us our to turnover XXXX

future. the to out Looking

sales look we continue commercial remainder aviation growth XXXX, in the Group's anticipate within to product net Support of fiscal defense and we Flight lines. the As ahead

within Electronic growth our anticipate Technologies by also of driven for We Group, the principally demand products. majority the

strength developing XXXX, further new we plan and and our market aggressive same to strategy, maintaining fiscal During and continue the while financial acquisition an to flexibility. commitments our services, time products penetration, at

to XX% current we these and challenged in financially XX%. estimates increasing and year-over-year consolidated growth in our estimated a from not X% net net net our to XX%, are Based in XX% net sales sales of to of XX% economic growth approximately X% income both prior XXXX up We income be are on in fiscal company. to are to visibility,

margin estimate XX.X% million. anticipate to of operating approximate XX% flow depreciation to was continue and and $XX expense our and approximate approximate consolidated million. now to to Furthermore, We anticipate prior from cash to operations amortization $XXX million, we up $XXX from that

the and estimates million, from acquired slightly will focus businesses, approximate immediate businesses And to prices. businesses we at open closing, CapEx generating strong that’s of I cash and these on strategies if million. prepared like to course, expect the my the would remarks. down additional is continue fair acquiring That floor of the core focus on $XX any. growth prior And long-term our our exclude of We $XX laser flow, questions. with to growing extent profitable In for and estimate

Research. Instructions] the first Krishna question line Sinha of of And Vertical comes from [Operator your

Hi. taking and for a Couple questions couple of Thanks the Victor. for call. Eric questions for of

Eric with for trend seeing comment you those you Can expect tailwinds maybe a aircraft whether tailwinds your of lack the storage. retirements to in you and some Difficulty] and whether even aircraft continuing organic the on business are that coming aerospace maybe, and impact First, seeing [Technical out growth maybe of the from some medium-term? help parked

answer morning. by have this Good in remaining sales I’d service. happy reviews that. be in impacted aircraft week, more Actually, our compared been I that we with Yes, folks probably to to as sales Krishna. Hi, had retirements

we increased a anticipated would the any conservative, So, any service we a little have are in significantly at that have aware organic to of beyond run I'm guidance the sales. when are And aircraft while to customer in our has is, I breakneck base. not forward continue ago by been this particular I look we going across forward. don’t was not our our say, assumes helped being answer that extended believe that life what that growth. But, going And XX% XX% remained

come engine guys on is I it indicator results? just to open you the going a nice that going you show Are expect a going the Lufthansa perhaps what platforms you engine start penetration commission But, saw to not possibility obviously, is that are European arbitration of engine from like us these recently some some leading playing know that commented little that on? the of OEMs. there? OEMs and starting market into this locking to start engine to bit? you up engine there to don't that then, straight your long-term of Commission some shops, necessarily would to some start you we would from MRO and to give And a that seeing older penetrate agreements Are that can other the I people immediately. places? And those sense of -- can are you on And OEMs also, us be OEM seeing the mean, is up it we subject

good engine effect that’s that resolution it’s only And between what Krishna, I the opportunity very takes I when manufacturer, believe other question. remember tomorrow. think is, that we the look and the to IATA important at

in with our very a is positive discussion tell resolution And and what's parties. the you customers. that However, number we’ve of had of both very can lot a clear I expected

it won't to this that And a to will have And inuring not And the we look the going think for of OEMs customers to sort that's extremely the not the are the more do to model. of around it edges. are The there really meaningful are competition. going benefit. I and of PMA but engines, way a want as will OEMs. think in significantly refer that I for Our continue have out everybody's hurt providing their for I'm When that I impact think And OEMs. hopeful business end their you the majority note customers well. We it nibbling and really it taken is us significant at this business potential certainly to hopeful.

and for modeled If very in our long-term have heck to goes small where it this. there. how their got and the it's very we it more have damaging. airlines, in that’s for seeing But, a lose I your I of it equipment will marketplace going certain But, first are OEMs view after discussions them be airlines while. they’ve question, a and intent discussions But, think are using it and changes then the competition, upon yet results think more So, can We they that to see also about with don't up we aware our very at coming upset are think out; very very going benefit. having a we to than we with budget could that's up them the their starts a they think how XXXX and markets. I But The of the need due percentage to are of it’s a them these certainly know end answer other for airlines take getting far with anything situation. in in better other they from XXXX. I something with ways lot hands over customers that that time. their to don't full it I new that's open busy

we I start see And would it that year to hopefully yes, our the but in say hopeful. road this down will So, not we’re results.

months? you another called of couple organic this growth. a hot And follow-ups of then, seeing industrial space contributors guess, what strong and how are ETG, specifically believe there. aerospace, forward quarters markets demand for given other your those due segment, ETG, to helping? maybe a I out that's defense for Can being But, big a that you had in a that bit us in part quarter end these the piece is that of in that a a market you which that of pull Is again growth sales the trending. what's get what's as we're the sense Is understandable, quarter? big too, environment. quarters last the And just you three end sometimes I market? main Victor. over ago, On few of mix the XX end also give happening And mentioned demand just organic in

out high questions. those as expect But, the organically we them as The answer mentioned is Krishna, the don't orders there's have, and And Yes. we we’re on good, weren’t other they mentioned. in unusual growth pull They to the of of And there's other of ordinary markets same. nothing based the out are are of we anything -- think and I notable of markets that serve, them. see certainly happy we out more no now them. particularly good -- were -- very in very forward with the the you we that expect terms the healthy. they quarter. right

is guidance terms over that organic course just year, over in levels we the the the what you. the for the gave Now, of growth we of rest rest year the growth the have of of and

comes the Suisse. line question next Credit of of Your from Robert Spingarn

that wanted stick cetera. are of up to market organic I too. in market strong but there wondering, in with aero in volume you But growth Are both some Larry. both outpacing Krishna's Victor there new gain? for on both or growth this Eric, questions. applies is the just I introduction? benefit of I'm companies follow Is end Other growth? from some be for to just the least from of and expansion at businesses? to putting a addition a share maybe your do markets? up mentioned think et taking seem aftermarket Or and average end product some growth topic segments, you that this to commercial you growth And do some we about is And really and normal earlier, share how think, this

From XX,XXX little job. I outstanding an the Eric are my doing they think bit it’s And are and each. but sons, I all it’s of above; think, of think, look, feet, I Victor Yes. a

they and Eric? But, an above. the comment they the them the the it's staying these travel I job. think that and of amount But, top world, extraordinary could time spend If see do over further. let businesses, you on all of of all country really

out Thanks. are Flight introductions new start Rob, I'll strong. regard Group. very Support first product with The to

very outstanding well. The full, customer getting products are very is interest, We sold. doing pipeline the

last penetration, the build. over a we little are bit of retirements, -- that think, we say, And we to down a us. for years, far I would doing been starting perhaps had We then, that that and increased couple to and slow continues, very-well. actually continue over anticipate I we of think yes, as I as fair to hit road with the see amount little bit that

stocking I think out by you part new really initial reported, would other the of have as of whereas they equipment the companies new some who benefit significantly, know, that's And… there.

provisioning. initial The

The initial provisioning, yes. And HEICO does not have that tailwind.

and organic It’s part think at just strong. new one sold, that. growth the proposition value going tackling, finding So, ours getting a is blocking out, very XX% it really -- our time, just I is is

quite signs are respected of all are very marketplace. well in frankly, optimistic the us. We And the for

you. for question a Eric goes, Victor Before

traditional that they PMA will come involved for Are inflation you As in with push will beginning the up you? for seen inflate, price the OEMs opportunity to concern some Is customers for starting get show to some parts? start is they’ve the to desire parts there pricing greater aftermarket, aftermarket suppliers. and express in fear in some prices the get more past than who about therefore and some more that

customers. what of when for intended do. hear the the tend to And about really to on enter reducing don't out their customers there are OEs They We getting continue they lot a aftermarket, prices OEs higher. to Definitely. be from our tend prices concern focused on

well quite for think bodes that that So, I us.

piece investor And that is happens. been recently One going fact they prices to with of that the of if their prices somebody new start initial just fair give belief on some is and -- really a to to and customer other them anticipate read OEMs, want to get our aftermarket subcontractor as of OEMs up idly a what we’ve bid the is entering end to conferences because in have equipment, going we manufacturers the questions and our sit competing revenues getting by. else, if amount in up aftermarket don’t that end that to are

airlines the think, are I going the to paying bill.

said they daunting. out because the is you take having and they product, They don't I action; talk while price. the our go large like you what then no sound in companies. do do airlines compete parts, and think to to against to but. they anything we it’s very I it this. hard is a shouldn’t say, tremendous, aware know it’s very sit come by; opportunity buy And these challenges make good when very are idly with get huge are Now, customers respond it’s that, focus with we they very and guys’ And easy, want occasionally We don’t the to

think on lot based a having I out HEICO really PMAs because a not is our Now, position, said that, strong of there is there's XX,XXX stuff really in -- very there. new

nomenclature product. are of We a doing in different lot different

good the and think are easily. is we’ve very say, position. distribution got hard. very I to up every hand-to-hand combat I But, fortunately, we’re put But day, this comes So, repair I where I to to we got able is critical good think mass it and us combination in with a this mean, nothing numbers.

of And are business is folks product you make taking who new other from is the that markets similar share is end sort you And there different or where that color. it it volumes, an for Thank there ETG, clearly. introductions? opportunity Is products? Victor, but then, the question, similar

is Victor. This Hi, Rob.

really I think combination the it's a first two. of

taking market doing though a and it there opportunity I share are that. is some think, to I story. take is our say not as well, share would market overall, companies

so. that market like, taking looks be probably And we least the a or well lesser less I share. as should Rob, way, the So, result would go over of the what periods, it's to by done that historically, forward, as programs new combination as the of need, in of the kind really growth good introductions, product the on growth that the good from a getting of customers’ and work, at mix historical next year the of companies the themselves work and more markets have extent some or anticipate

forward. Going

Okay. all. Well, thank you

Thank you, Rob.

Your the Jefferies. next of line Kahyaoglu of Sheila question from comes

that’s I two you, questions if have Victor, okay. for

in First, a And maybe where you rates XX%, for I up. quarter? that most you were keeping conservatism I the of bit the also year? strong. quarter, up guess, remainder of order are the surprised in on growth quite what guess, forecasting organic And said the you

I don’t mid even remainder when know single for if just, to time I in grows call the organically that believe the it that at you as we business over low conservatism know, growth this the single look year. of digits it digits rates. I

reverts and it of the levels that it's that. expect just my So, see kind that we across to those would board to sense

the shooting our on certainly great. doing always I And we I organic again, working certainly looking aviation think, companies defense year, are and this of of probably growth it. highest got have will people poorly, single are are not happy people great and lot the do and probably But, strongest we and parts other parts great that them. of But of trying, the the a business will to a pretty, business and we with to and of commercial better the be we've the if back lot guide to and do portfolio. mid that's pretty digits;

on well possible. AeroAntenna grown where those to Robertson, businesses? have worked in they’ve update that, are on you you. give just over that’s secondly, How years then, since pretty us update just And they have them? on last for you you three Thank acquired Just out to could Maybe the you. seem if two an if an and

are very They doing well. Yes. both

of We extremely are with companies. those happy both

business, very teams but which innovate commercial put example the defense when reaction and successful Robertson, of on it on the told has wonderful new been wonderful of although continuing the case only were we in product successful. not at with that's zero. they And people. an to be own on products. And We bought product the internal In have us again, that working on that they our they would thought modeling, they there,

to addition customer or AeroAntenna meeting strong well us. on has to for and upside on successful number I say programs products there in to growth of nice pencil market a very in turn the always doing us out been military a prices, near commercial been and programs and execution both times has sharp. fair important so remain the and very competitive which fair value at we deliver and competitive flawless on that a winning also existing demand would way and flawless responsive very as we is customers. have a by It's our know keep very there, new so, And to as to

comes Canaccord. from question the next Your of Ken of Herbert line

to maybe of with get just growth on to And I out angle. wanted the but pushing keep wanted off sorry different you. a start question, to again, Eric, from I

specifically when within You the between there you those? within that of strong specialty or sort and obviously anything parts and as out a in overhaul of the the highlighted products. organic the segments Was FSG particularly growth three didn't stood quarter in much difference mention repair replacement

but it Yes. unusual. lumpy actually business revenue of in backwards Good very low they the morning, bit The the had something be little are that's group Ken. times very not a months repair other repair -- months. for at be not which and The And can went concerns of quarter, and December seasonal. outperform. terms repair way And It’s then, historically, short overhaul year, November can and us. are

as So, by within is in area. well repair all at the end are similar doing and And to a we as time the year products. the that think answer and I up -- in well specialty extremely the is, parts going think, they are I done, overhaul

about it majority in growth Is all I material tailwind repair And bit price. but I lot little maybe was think growth better a considering down, context, think repair and is the imagine virtually price I own business. of get then, was a in overhaul the know this the know, fair you bit when the and that in or And maybe it's I for quarter? certainly quarter to was a and goes the your overhaul, a this you price volume prior say that volume, it's volume price that I broader But, as little helpful. That’s been a typically I quarters. lot parts know versus business more distribution of price than have was, can volume factor a the you the But, into it. Okay. your some do of that of is about

And when to you Price in say very sure the No. pretty people probably -- value. about the want XX% is it, very that We we other Actually, that’s deliver we good XX% on tremendous. are still compared market, XX% was that. conservative to think of all -- much volume. make the XX% volume, is

just volume So, it really was increase.

good. helpful. if one And I then, could, Victor, just Very That’s you. Okay. for

expecting We in are or two. budget all the here a defense next week

broad business are fiscal areas relevant or as As look the on you the movers fiscal got you that are particularly in know I -- needle you XXXX at any of that for you budget? very particular particular programs any focused there budget, programs or base think are XXXX particular you about but particularly a

this this strategy. a also it point, that when see our have we Ken, base broad is we’ll out. said That's you good is of that question. Victor. But, At no, comes part like

particular of thumb, be as a of there's I'm could which will nothing that important in rule that So, think change. us, I but to aware

just one Okay, And great. for finally, Carlos.

areas the should it million full a spend there the how like is think in particular there, Is year. we where $X maybe brought looks timing, investment, that? CapEx that by you’re or for any Carlos? about particular, Anything or obviously down You slowing

No.

And, when a the We they a tend a used bit of equipment what they We -- they’re underspend lighter of you budget. little way. to just QX to see the subsidiaries was very are subs the just our from it's need, and equipment buying to our we tend past, lack our not in we looked frugal. And slowing I’ve investment, what talked -- and getting had their not frankly, had spend than they anticipated. we it’s as in buying Ken. lot can, Thanks a question by for

So, into what the QX, guess, and like to probably taking going a looking lighter consideration was our would. than felt if spent that for little be budget you in at relative initial we’re to full I year,

big no no, changes. So,

starving down field the their We are not customers. with in anybody

this based a if on We just supply continue refinement, is they to QX need. And the would, everything you activity.

Securities. CJS Solow next Larry of The comes the line of question from

I a like the year? or new or… Most have of were And anything couple with new product all grouping changed my ones XXX has answered. that changed of has a at follow-ups certain introductions Eric, a of in new amount much has that questions of the Robert’s towards sort the question just FSG. products, on that in really on those mix

where are with think wouldn’t consistent I very The numbers has No, in they've anything past. been the Yes. that changed.

we the done I consistent say, we’ve historically. continue all We of with do. very products that to what broaden would it’s But, types

basis, Okay. And on the right? same amount -- the annual it’s an about still

Correct.

some out lower are what that… relative it Yes, okay. or numbers Maybe -- know been up last projects us $XX of the of prior pretty some to of year there CapEx, spending, color of I -- little some too to couple little spending some before million a around decent and And of the you just amount the of the give that. think just on a had a sort capital it I still is lowered -- bit, sort on and bigger of years what even this sort of actual was running growth

the you over think -- acquisitions about, There if six done is we’ve months. XX no past

businesses, more when is you last several budgeting. do pattern our in years. take CapEx there's I past growth, that point on has is for have we of half which don’t the to of going new a could budget had pipeline pretty maintenance, the which these half what requirements, been than is incrementally we year. to CapEx anything new So, we be think Roughly consistent

of stuff. anything normal the see kind don’t the I unusual or large So, in budget,

a know of on just a year-over-year you, the some more but I in will think Carlos, this two you I the segments just to intangibles. have is Okay. Did the I rough got flattish that margins of Q, to that happen while basis sort imagine lot despite the growth, were much revenue in to ballpark, be -- of I just acquiring impacted on amortization and how the reported material due quarter? the respective too, a

For amortization?

Yes, exactly.

this had about million expense than probably We incrementally in quarter last year. amortization more do. I in X.X Yes,

rapid a times really of you whether be obviously know easy not or anything? level growth the on But, And lead any some either. guidance last slowdown, high it’d a suppliers quarter, more are or comp I just basis, question, obviously then, And guys signs customer incorporates slowdown. to an in Okay. your seeing from just conversations

from for and Eric their let Victor I'll Look, guidance segments a address perspective.

-- earlier, mentioned are pace a Eric XX% to As on planning don’t we organic of we going breakneck continuing think I are growth. not

Absolutely, right.

optimism guidance the subsidiary of lends pushes we which we you to at to report see But, a level, guys. our do how lot guidance, which

markets So, strong. environment is it end business feels a that The in lot like are our very good, very our subs year are last optimistic, regard.

be as cautiously optimistic that so, I'll the let far to to going year are of for the year rest as prior and segments. these very address we similar it’s goes. And growth Eric Victor

Yes.

been side, much you Within would the in I get the product very tight. And excess can capacity tell that past. material is out to there. I not in Support has There's tougher the than Flight it say, supply general it’s

our meet to We to continue able be commitments.

think future the suppliers sort the bit would I yes, in of of and our has And cases, in for less are new a So, fine. in that able many are and we that area, of okay of lot the in older because I neck in competitors. business they're focus body we focused But with doing our course of the that's tightened why we're an product definitely is. with where a say that's narrow are our focus probably the focusing the another in I area is pain engines, sort serve reason of market the hopeful think, we’re And a definitely, particular that. on to And for market up.

Your Baird. Arment of from comes next line Peter the of question

in Great be a are on. of This touch results. A Hey. on just lot Carey lot’s been to line if market. the strength you -- spacing Asher Peter. could Hey. for investment I on Good and Victor, seems is clearly morning. seeing discussed going maybe

made going the shifts If the puts past commercial talked just in you that about should would, takes, exposure, the if you the seeing in any defense you talk sectors visibility some you could forward? you of the and how and mix think to have changes are and from GEOSAT? we about area Curious some about weaknesses of your

recovered. was has We space in pretty us for the had I growth remained on said space, commercial guess we last I quarter. market. specifically Space I good quarter. think think in link, weakest overall as has space, for Yes. GEOSAT And to organic and the GEOSAT don’t will, commercial call, the within space in I But, market was was what the out the -- call if was it that us. you arithmetically, had less it and conference And good the was

projecting both not GEOSAT space commercially recovery doing We is well, in business but in a are the and our market, defense. of the rest

markets. expect well We there. appropriate, new markets do And to will with as our world, it if But, to companies settle how continue right this We I they both are sensibly. doing very those to And you very think, space. they're out in carefully. we like doing addressing new are watching are see it now, things

Your next of the from of question Louis UBS. line Raffetto comes

the back sort million think I Larry's the margin, and accrued, about I about question accrued this, covered Larry know $X but make increasing just headwind margins So, to segment just to was to from want of contingent? sure,

that There at morning. earnout changes drag had, year. Carlos. was is a on this we in the accrued subsidiary for is good eligible some for Louis, This a outperformance the margins an accrued

say though SG&A this on that our bigger quarter. adjust fixed that benefit And a to was so, relative had overshadowed costs. by to leverage we I would

at our pace, SG&A growing are As not our we expanding we spend. overhead are this revenues and

So, there. we are leverage some getting

was it that the was little on our for more leverage contingent accrued a by offset a picking up are we that bit So, consideration, headwind cost. fixed than of while

just sure the $X.X that -- make on I was statement to about cash want I number mean the million. Definitely.

on equivalent the sure was the So, of that headwind I wasn't sort basically. if of the statement income

what Yes. the That’s than higher little P&L this a hit quarter.

was year-over-year change I heavier. little bit the think, a

our we think, all in million adjustment of for consideration. had a contingent accrued about I X.X

little but bigger all of to was the of related subs being performance to than better and Some discounting one is our a term due earnouts, the longer that we anticipated.

right? long the in thing run, Good

Absolutely.

I you. guess And Eric, then, for

things. the give guess on products specialty you nice to in sort what's years us it’s better back right can guess? I see of couple that’s specialty particularly So, of doing is of different I just products headwind following or Anything track lack this about

expect in as aerospace product would and product our was as well ago I of the that headwind The well products commercial both and the strength market that industrial to from are space defense military out it’s specialty doing, we really nicely. all continue is that doing we moved number It’s of of very we’ve had years where do there. very to I was that Yes. say, strong, and now. some very stuff in and

All right.

that sort good. Sounds second. a of And then, sticking with just for

play on Given in in at commercial you your by all? side we most and some and the supply saw don't the OEM for ability issues last approached chain given parts, of were step year, the you anybody space your skill about, guys to

think we organic Yes. are XX% growth. is But And on I approached up additional mean, one business got are all work. from that things I in think very good yes, position product. customers the of them the our that’s we've you OEMs well, I treat OEMs. take time them does we to where extremely that well we picking with specialty reflected we those do more work products support a with and And very

would anticipate continue. So, that I would

the commentary your environment? sort M&A And covered on in you know but Larry, of remarks, I probably just initial

I would think, normal. I the environment is what call M&A

close, I be near the but We But, never that know assume in it's I close you until number But, the able never a I predict have say, will future, it's know in to would normal. closing something, of until to because would we the can't get whether table. prospects you works. might we I close.

I think, in general, high. prices are

are in watch XX-time very-disciplined We we very going to the range. EBITDA that We play not are carefully.

the wisely accretive permit we we've at that one think, that have deployment is been think it of done successful capital. us I prices our acquisitions. investment And reasons I have of to

pretty we to it’s fun. outlook we process. acquisition each are make, think, that for M&A that for the going is in So, pays I and itself. And standard continue But,

of King. Godfrey CL George line question the next from comes of Your

Eric. are another quarter. question my but One questions congratulations my I'll of great for answered, Most add on

in at engines there On in profile the margin then, versus is higher the that I'll said it that the opportunity? European opportunity And the look literally meaning figuratively, lower? -- components Thanks. leave you engine and both of of you parts you is touch would around there. is other or the engine plane parts the entire Union, providing nibble you the those on won't And would or edges,

questions. I would George, great --

I think, percentage opportunity the margin in is terms of fairly similar.

we focus certain is Our In do are as expertise replaced in repairables at expendables continue visit a also shop well. certain I which And or typically every shop do most anticipate we then, visits. area. And area. at in general, would we that a parts, to

focused or in products. the is There are and about you’ve different don't So, really around OEs I And of And talking pain bread-and-butter the products limited in really focus are I'm to it’s And edges, neck sort that areas. manufacturers. original and think that inconsistent stuff them. support. many the to sort of we’re those life we the When the We going the equipment a got in for doing erratic to with continue around was sorts of do to parts. numbers the the We've nibbling that's the for of about all customer. I support lot by mess speaking use that part got on.

So, to to focus of meant the continue a OEs on They with their those. what make to to the profit was I are continue going going associated majority bread-and-butter.

and and a whatsoever. customers OEMs are meaningful well and business their savings. generate the get where continue we our model satiate I think, HEICO very to not it’s to -- to enough will can to margins we do threat good very to But,

in So, looking. that’s are we which of I sort the think world

and I it competition, we Of try course, try least then maintain that upset practical. gets the Pretty But, get competitor, happy, down our maintain airline where to everything, we much they they some is generate you that. everything, generate get At because there, having if happy. really they wins. outlet. no are in the savings, into to everybody impact always customer situation significantly doesn’t are to And to a some want that’s able HEICO go road by there's not

that’s by comment. sort So what that of I meant

next Your line from from Ciarmoli SunTrust. of the question Michael

guess just aircraft from George Peaker that of near-term of one Electric. a I question, on lot revolves I General [ph] is around the a Mike. that I been is have This come investors. it the has portfolio answered, for guess, but questions And have lease

business. in do was And of our opportunity? of you fact protective how have that equity think industry Some you that GE spinning the the parts have about into the contacts now off potential very that highlighted that hands, private

We it's upside really only for think us.

biggest it a the lot do the leasing we've competitive of A were parts. HEICO world's And think, because the a were they got many companies And I as permit they other the alternative you're have who lot in and right use examples the addresses that engine of I business, these drove permit of in business points. the really think leasing material. viewed with to where lessors use advantage Commission this. of the resolution European the ones

or something else that this equity So, know is to is that whether business. think will that I I going continue. somebody don't buy private

the take rate that. use be they're opinion, to done it on good lessor at restrict. the is lessor airlines if offset are do length as not negotiate see of their was does one other to company But to lower a basis, in will is parts, And that. an to that disadvantage. really by alternative causing direction. have they don’t permit get put lessors then why it lessors be time would important able lessees. need again, we And to our no for not the relief that moving be something arm’s created that it's think damage materially leasing there a very the use that to would in there to -- their And tide as want is most some do they to to no the lease of to with I a obvious a long competitive This reasons. There parts Certainly, reason opportunity. able that want alternative

be us. good very we So, would opportunity for think the

the last push about especially around for OEs of my user. any not just the coming guess, is color But, is environment, pricing additive question. revolves to provide providers. beneficial perspective, is aftermarket end OE conclusion from of the into R&D the that go up additive We there manufacturing, aftermarket manufacturing. for have Can it like very I talked a lead the item weighting last any seems that? that a how there into necessarily seems light and parts printing. to to will And multi-metal to that's That you to my question

don’t of XX Sure. We’ve Look, know, XD couple printing a using for, things. been I years.

the are we in it And technology. making largely prototypes. So, certainly we tooling in with and use familiar

that don't to applications. over that that have some of we couple the years You're definitely make XD is famous able printed. it of actually market a we the nozzle produce of I of enter the doing that detailed been capital for that products that limited be think makes when don't be HEICO do And manufacturers completely comes companies been XD are to in I of when will be part, make, using And offering it not will think We believe to to bought, I have more companies an able lot parts think those comes last recently and large certified XD the we the prepared. fuel in eliminate interchangeable number part, it’s a There there we which of printing we do is provide. be right for example I But, have sense time been they’ve number examples. very there think a it trading newly than to in market, a what a print. this. of of have time fairly anticipate for to actually out will that they we of been technology terms going expenditure some services, be to business. There lot

to or exists think was then, And the proven capacity position it of have correct think and because to probably be the we we proven the I take. But, And will be definitely didn't any purchased to that's We there. correct it’s them, again, to wise. be not quantities or not do or parts. a replacement be clear, but the be material printing significant be to many will may not large we be quantities for going a There even things in believe certainly not that decades. here is airlines couple there, one-off this opportunity, of next

So, watching it. are we

right are any on us. And anticipate it. don't top disruption We of I for

Your line of comes Global. Josh Seaport the final question of Sullivan from

and push deeper others a the into OEMs seen by analytics. real-time get We’ve to

in hear any externally? are Just interested of models into internally either if those business or matriculating to HEICO's any way, outlook

would provide impacted not be We are most them. and familiar of we analytics, very what by the with much

very a if of where think that we familiar I customers, rule and good find and want category. definitely business definitely will to sort a want it, we that that's would where we to If analytics out of and with makes models. provide our something services anything. particular our to providing fit don't find do out area, decent value again, we But, in So, those is that we products good be. returns business we doing go sense get are we can and

conservatism but here, guess, any And in the then, maybe on to PMA. dam, reports understand that. just appreciate cracks are and a the again, airlines fitting some at think more that But, it’s PMA American Latin just I looking investors I there all open question I is end

are to any if Just look areas, others? take regional before PMA you any seeing specific wondering up

since of our you globally. are doing are a the competitors phone providing terms can course we very geography, in little that I Of tell we call, customers, are on but well products, sensitive about specifics

we’re we would what all to and well the in world, we of are all extremely quite mature, When can That’s know spot. to regions. become bring the the sure table. sweet really every proposition region in active to doing are be making expensive they value say, that And the same. people And we fleets very The I the world. active really continue We operate. around is our

at questions And this management. back the to there are further I'll no time. turn call over

on thank you HEICO. Thank everybody interest and call this your for much in and is you who very to

to question know, comment. if call you give or available you a you, have all management us As remains

around. will be We

look forward would May. sometime -- of be we after to our quarter released, you So, be the second speaking to is call which end towards that will

those So, the And of of enjoy of rest weather. you South for north, the you brave those for up in Florida, winter. the

So, soon. talk to will we today. all And you have that that for is we

this today's call. And conference concludes

You this may disconnect at time. now