HEICO (HEI) 18 Dec 242024 Q4 Earnings call transcript

Welcome to the HEICO Corporation Fourth Quarter 2024 Financial Results Call. My name is Samara, and I will be your operator for today's call. Certain statements in this conference call will constitute forward-looking statements, which are subject to risks, uncertainties and contingencies. HEICO's actual results may differ materially from those expressed in or implied by those forward-looking statements. Factors that could cause such differences include the severity, magnitude and duration of public health threats such as the COVID-19 pandemic; HEICO's liquidity and the amount and timing of cash generation; lower commercial air travel, 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 cost 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 and manufacturing costs and delay sales; cybersecurity events or other disruptions of our information technology systems could adversely affect our business; our ability to make acquisitions, including obtaining any applicable domestic and/or foreign governmental approvals and achieve operating synergies from acquired businesses; customer credit risk, interest, foreign currency exchange and income tax rates; and economic conditions, including the effects of inflation within and outside of the aviation, defense, space, medical, telecommunications and electronics industries, which could negatively impact our costs and revenues. Parties listening to this call are encouraged to review all of HEICO's filings with the Securities and Exchange Commission, including, but not limited to, filings on Form 10-K, Form 10-Q and Form 8-K. 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. call Officer. Laurans the and HEICO's turn Executive Chief now over Mendelson, to Chairman I Mr. And Mendelson, please go ahead.

and joining welcome Thank to Quarter Mendelson, call. for Chairman President everyone sorry. Victor here Fiscal on and Mendelson, I'm Technologies you, Teleconference. of Carlos Eric this We and Co-President 'XX CFO. Co-President Earnings and Eric Mendelson, and Electronic this thank Group; is Support I'm HEICO by CEO to this of you of good morning joined Announcement Flight Group, morning am Macau, I us, Vice HEICO's HEICO's our Fourth President we Larry HEICO's you Corporation. President HEICO's HEICO and Executive and

HEICO's our Now exceptional for before discussing record success. results, our thank team contribution talented their operating to I sincerely members to want

to dedication and results my Your operational achieving customer and driven exceeding excellence HEICO's outstanding has confidence future. in reinforces expectations

we Aviation, period ever extraordinary past achieved growth several the the aerospace Commercial in a years, from industry. in Over than have very stronger emerging challenging

to results improved the and diverse summarize represent highlights the quarter net adaptability our resilience record commitment fourth presence a acquisitions for of Equally recovery growth fiscal remarkable. focus results. encouraged rapid delivering expansion us HEICO Our progress fourth solutions by agility members' our and collective success. I'm cost innovative, of compared also X%, sales and by and continued Consolidated now fiscal for enhanced markets in trusted in quarter 'XX. respectively, expanding reputation team reliable 'XX, has the such These are across partner. and success integrated fourth of as time to best been strengthened our during This is seamlessly our 'XX and as operating to quarter and and critical HEICO by have this our team have strategy which the of income shown recent operations our our in fiscal and sectors key for commendable XX% space. members defense as to long-term markets. I'll record and

Consolidated million or fourth fiscal 'XX, in quarter record $XXX.X per net up $XXX.X quarter the million $X.XX diluted share income fiscal increased XX% fourth and share 'XX. per to that in from diluted $X.XX a was the of or of

as the flight Group principally XX% the up was The mainly 'XX Flight and fourth fiscal Support 'XX. XX% from group's operating quarterly $XXX quarter as aviation 'XX, attributable acquisitions. fiscal sales from set in fiscal of products to reflect net demand fiscal all-time over organic million XX% fourth improving respectively, records quarter strong growth, and for The Consolidated million XX%, support $XXX.X profitable to impact quarter quarter fourth services increases income well of 'XX. our the of the fourth fiscal in the 'XX, and of increased and commercial and in 'XX and EBITDA that increased

Our as October X.XXx October net from and down debt-to-EBITDA 'XX, ratio X.XXx 'XX. XX, that was of of XX, as was

ratio forecast achieve acquisitions. Wenconr have would X within year our excluded the about and Xx return XX made a of that results excellent acquisition, Our debt-to-EBITDA that any impact us a the operating ago following of early net to the allowed level months to additional historical to year we roughly

to cash of continued payable and of per strategy quarter the declared by fiscal consecutive this flow $XXX.X and represents ability of provided flow fourth Directors up their Our that we intend and acquisition pipeline with the follow our continue ETG, HEICO. Support to share is acquisitions both that in in Yesterday, activities XXXX, increased million expand 'XX. HEICO's and of dividend extremely opportunistic million January cash-generating of and $X.XX XXrd the from 'XX, opportunities strong cash time-tested fiscal XX% reflects the was $XXX.X in this robust of dividend Light quarter generation operating our in to Board an confidence HEICO. Cash fourth in

Now acquisition let me talk about activity.

Over SVM Private They they of October in the XX.X% 'XX. strategic acquired XX.X% September past few acquired XXXX. Solutions Limited, months, of in acquiring acquisitions, Marwa XX% Group Mid-Continent controls November made our in Power 'XX, ETG several and of one,

Aerial our In Kquell Devices Group addition, of in delivery August division 'XX, acquired Flight the [ aerial Support and decent ] Systems.

revolving were which credit All cash using using was except from Kquell, of facility. these activities, by for funded proceeds principally operating provided funded by acquisitions our

HEICO these HEICO's will following of We the of our quarter discuss be accretive earnings Group, Support Eric Flight fourth within President to Mendelson, to Group. acquisition. At year introduce Eric? acquisitions of Support time, of would the Flight results to like expect the this he and Co-President of each I and

growth. from 'XX you excellent expectations, the strong fourth organic net quarter are very reflects convinced of quarter organic Group's the fiscal product to our $XXX.X Support sales HEICO. a increased in of XX% acquisition fiscal sales net the we The in across continued operations from net reflects for and increased million was very of up mainly Thank Flight record exceed The much. 'XX. $XXX.X and to impact 'XX, fourth million increase growth 'XX this our acquisitions XX% Wencor The fiscal demand our and all sales lines. The an

and is continue for larger growth component translated to great aerospace which offerings our excellent for aftermarket and our and and product overhaul repair leads, their customers find legacy Wencor. success businesses opportunities into both Our parts in value

a stand-alone strategy continue defined consistency and I perfect to operation. this sales, capabilities as our was strategy. consolidation. The earnings as business and margins prove have without Wencor operate cash the cooperation, We

progress continue to in have combined serving customers I fashion. working together As we make seamless a in our good before, mentioned

customers, help HEICO three, back-office working additional stations; we synergies, and compliance regulatory addition, as such all payroll, sales HEICO. offer compliance mean and as asked Many such the chance will many replacement sell our various manufacturing defense save highest PMAs of costs out products; repair excellent short, opportunities, price to and to one, parts excited commercial aftermarket ODA. In four, and FAA has retirement possibilities our X savings SOX Wencor getting that presidential U.S. at is lower together DERs many utilizing always more five, taxpayers about noncompetitive are In best-in-class for sales HEICO's quote engineering are new -- significant customers, all in cooperation; much examples have best an benefits our alternative how administration Whether government and they're other base them. defense or the people sharing finding what change in money opportunity. and utilization or commercial or cost the us for HEICO sixth, of of regulatory we it's been defense Wencor about the insurance, cost of and continue offset grow will and whether it. include: the are lists FSG's not and platform vendors; aircraft solutions about Some export two, e-commerce all Wencor to PMAs; many. HEICO cost very cooperation; to the our

Another years. dramatically example effectively of in for important for States defense which the products shortage components sales over opportunity with us. large growing these United defense amidst a of missiles to the make allies, the Missile and set a of strong what a very and backlog business we missile is is defenses growing our is systems, are increasingly

existing growth from of expect this We loans. backlog meaningful

$XXX.X line. The quarter sales to from up of million income fourth reflects mentioned principally fiscal and in 'XX. XX% decrease a previously operating Support fourth The acquisition sales Group's in higher fiscal 'XX, in Moving gross margin. in The XX.X% the the margin the improved The on improved net overhaul quarter net operating increase Flight 'XX. fiscal fiscal Support income. Flight margin of the and quarter repair in and $XXX.X reflects XX% million services income to operating of profit operating costs of increased growth fourth an product improved within fourth and principally from the quarter Group's up aftermarket parts gross our 'XX, to parts

XXX higher is approximately intangible businesses and the been our fourth points in that which margin amortization operating was reflects 'XX. The before mentioned operating and of basis of what mentioned results. The margin consistently profit of extremely EBITDA or from I the XX.X%, our as the than excellent margin it Given 'XX. higher cash previously we growth. we quarter FSG these the and well acquisition-related am lower the margin previously acquisition call gross costs net has principally internally cash XXXX XXX increased way during basis as with in points level measure efficiencies, of of expense XX% fiscal a improved fourth resulting margin the approximately FSG's quarter sales fiscal amortization consumed comparable pleased SG&A

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

quarter increased and principally 'XX customers, to of fourth the offset and decrease sales space quarters, other those by net Electronic were over our is and consistent in products sales we've $XXX.X defense our earnings in from acquisitions. This reflects commented past $XXX.X inventory particularly in Thank as fiscal with 'XX at the 'XX. on the the and million fourth sales, expectations, fourth non-aerospace The line of quarter you, net Eric. few is quarter The with Group's lower markets. compared net calls destocking some partially impact and in the defense as fiscal sales million in fiscal the electronics net Technologies

volatility anticipate historically will varied the and know, though growth been the in as remains Our has quarter, growth by positive. defense year sales was But continue. quarterly case, which, the highly defense trend 'XX ETG's this healthy we sales nicely fiscal you overall the

million sales. The and Electronic previously low As of indicate was improve, strong Electronic quarter markets growth from to anticipate 'XX improving. I gross of of in orders 'XX 'XX. better as less quarter previously of as restocking. 'XX. the and due during fiscal was and decreased products lower of next fiscal other fourth fiscal our The the much ETG's expected, sales operating the recent end compared sales, the continue quarter as expect favorable the in Group's Technologies half fiscal other growth the non-A&D margin into markets fourth of in Group's million fiscal the reflects net fourth and the overall believe fourth was increased a other a destocking sales And support to order single-digit to mainly to mentioned lower are quarter net fourth quarter defense Technologies I by income of in our decline fourth quarter partially these fourth in compared to fiscal compared the and fiscal decline quarters. record $XX.X offset electronic operating fiscal change year. The we the operating principally $XX.X income in 'XX. the 'XX electronics XX.X% XX.X% mentioned organic margin, a profit The backlog than 'XX first optimism return and backlog to were prior continue during quarter to The businesses electronic trends customer and flow net

our intangibles Importantly, expense before amortization XX% around above margin. XXX consumes basis acquisition-related intangibles as amortization our in margin operating of was points

correlates we that's our that most businesses Now how to closely judge as cash.

are mentioned we margins, a call margin profit are with the operating think you. less back operating and on it. excellent true of the to what So basis, SG&A Mendelson. Thank level gross Larry very margin as and pleased efficiencies. I the change reflects turn principally these The favorable we previously of over lower

thank you. Victor,

'XX, Now fiscal do light and to products. by as organic technologies, driven for of the in support both growth for net by the our outlook, supported electronic as growth, strong anticipate sales demand we primarily ahead look majority we

new drive efforts. recently cost provide on cost potential our in acquisitions best and government to efficiency the administration's while plan we from to future acquisitions addition, new to positioning capitalize opportunities through and savings our opportunities ourselves to completed In growth

value HEICO. continued a include with for team market financial and depreciation priorities shareholders. In penetration, further their strong emphasis reiterate our our development, to services closing, exceptional expanding our my all long-term members I commitment strong support to and to maintaining products on and would strength to like Our steadfast delivering new flexibility, and heartfelt

of the Our yield as highly outstanding call businesses now over HEICO's HEICO. thank positive for operator Thank I've portfolio to I And strong in the will to strategy is of be you, before, you questions. remain another poised positive all. to results turn with cultivating our for continues for a fiscal shareholders about I And 'XX future. confidence key markets continued shared diverse year. We your successful

Securities. Instructions] our with We'll [Operator first from CJS take question Larry Solow

quarter, good year. guess question, first maybe a the for Eric. another on Congratulations I good couple

It detail things there. Wencor sounds You lot the acquisition. good of like gave going really us a well are on

hood Or done, mentioned and you was X that about are out it some a there. Curious -- synergies? still as are ever could acquisitions more curious, obviously, we going bigger the spoke things look Just forward, things of opportunities you've of to of even revenue there the maybe you can gain there lot were of a things surprises positive this that didn't forward the little excuse of you under work or available that for on umbrella, business? you've -- under year more going the sort think that had on side than me, a on the that you

Larry, and question. for your thanks

stuff the First and really exceeded you cooperation we're out, of there expectations. as a of with fit new the we with of that basket. each all culture. you similar, and at exceptionally successful in the our mean, been they are that are the of in running, just -- they've and these the their very starting immensely to a are are busy that terms wildest acquisition. now. I bigger trying do extremely Number people. left in one, It getting all out HEICO alone with They the kinds organic with And them customers of going we've all pointed the Wencor together. all, developing But outstanding. of XX% is in now, additional businesses working backlog accomplish The businesses aftermarket. can of further so happy growth, our this well. as has parts They right aftermarket about companies and in very . We're performing door course, XX% think are the unique well I to got record results, numbers, situation just what opportunity see

possible. Following deal thought anybody a beats that, what tremendous like that was

So there with But we're that. we very, that additional do opportunities. very think are happy

in already the very harvest side HEICO the as and and PMAs successful HEICO putting and working very been repair to We've by Our pairs teams well opportunities. of are those the Wencor DER all as together closely the parts Wencor together.

stations in costs continued focus the levels up repair service really And our area. been we've unit in anticipate and we success down successful to drive and can that, So in particular very that and customer.

Wencor because of legacy gift I HEICO really is think of going so there being be just Wencor, and businesses fit I well. to on but internally, because yes, going as think said keeps So I that the not only giving, perfect the the and

whether or side Eric, it the side. new increasing opportunities And seem maybe you just business it there military side the the are a it. opportunities just of administration, the Got it under and lot you mentioned on like on on government be the dose touched whatever, briefly military your of that on through

that right, forward color Just getting I we been any opportunity? Is near you've mid- more there. to something obviously to the PMA I much a on there? of aircrafts more always know I side longer-term that kind look should focused think there's guess, military term? not where Is the of more into on,

color So would more be great. there any

call, we opportunity. everybody our specifics We them fruit. offers question, we've and low-hanging think course, I something what the without out -- HEICO excited into tremendous And dose do. But that's fruit. a of and lay welcome are needless of the mean realizes this getting say, country this we great a there was the of about think various for more we this can't HEICO going But because road competitors simple, I to wisely. real extremely of I and it. in a the all to have spend map to solutions is is on low-hanging before working is election. I our got that we're on them to dollars amount

hopeful of a there that very number were And we breakthroughs. so would be

have want course, cost, are those better the through I and cut, where various be tests, We fire. When look also offer a hopeful there's just of road the to the not be money of opportunities. the lower lines budget products, our -- very way, the to only particular, pour has competitors. I the deficit But a time on think in savings because, rig development in whereby, there cost. map to without are quality, to proven and don't provide HEICO careful are that new And quality. And just of at but by increased increased number it's you not an areas that's of that tagline And amount development still can tremendous that. that of more cost we and there fuel

us. to So outstanding dose for I is think going be

term, Now having I U.S. to the short going short, it's going think to long be government the committed. mean, in be I is that, term. more said medium has medium or term, money

to is. substantial what So But to I it only just this just not because we be that's expect for feel is it's legs be But very and HEICO clarity going opportunities do as the forward. I price. that about additional very, move

Got color. Carlos. it. a for lastly And maybe appreciate Great. I question just all that

coming high-level know a looking I know 'XX. back dependent. a margins. little fiscal outlook it of consistent And specifically, mix FSG just more but in pretty the for I you sort bit year. was was ETG, Just guide was

So just into we thoughts look any fiscal 'XX? as

at as I and the performing pretty XX% Flight as look We're we're it's expected. we Support posting think Group, XX% consistently. -- posting operating margins between

build be SG&A business. base which additive margin. to think on that of I our leverage the of slight grow continue some our to get on fixed be on improvement as We'll the we the should will costs, -- our

to similar you to And not It when segment saying look, come mix would exceed out, them small see to did that the be pleased on a decade settles lose. It's to ran was be I expect we been very the quarter, I the that. for And going around margin range. steps. while I've what GAAP ETG, a Very prior that XX% basis this in the ] will get to [ COVID.

baseline my as business range. be quarters I as expect And and continue are I but XX% have We'll So lumpy to it been. is has that to around always that would look into the lower. 'XX, higher

next take Melius with Robert question Spingarn from our Research. We'll

Rob on This for Spingarn. is Mikus Scott

government. in up saving You the federal the brought money [indiscernible] across

you like sales the that what FSG just than already quantify parts list of aggregating of commercial directly a right was percentage the could PX. derivatives are then the started process for I wondering, DoD? the Have to programs other you could DoD? And be now So sold the potential of to

Yes.

in that what is sales. X/X FSG goes the the far defense So I have But can to information front as approximately I don't of percentage that you as me. DoD, tell of

an get there. idea you So

opportunity. up the mentioned. that come have only terms In list. the not the opportunity is you of areas We But we yes, a in with --

be. We the are opportunities of what aware could

to want should substantial. on it Of -- be are course, really the government And is outline we it these I can't call, -- don't saving I but quite the dollars.

also Okay. Encore a And -- use the manufactured to in parts. past, lot then going to the shops they back print of build

You talked that journey? talk that about of to about gain cost that you in-sourcing manufacturing. work? you And more in in-sourcing where some is even there of are more Can savings from

businesses. There Absolutely, got is Wencor's treat an And that we're business as our long with existing new various within us to pair capabilities as broad HEICO. product focusing and the to some loyal of terms right very robust at us, resource very yes. on of them. opportunity we HEICO are in manufacturing manufacturing We've development vendors stuff

have -- there's robust think the keep strong opportunity area. so frankly, pipeline new very, very again, shops we busy. And the really about. worry that that So it nothing But is in is they to very our will really

Markets. Ken RBC from comes Herbert question next Capital Our with

to Eric, Maybe, start.

organic growth fiscal specific, 'XX, across reason FSG double-digit shouldn't you within see As but to there is fiscal FSG we at 'XX? growth any again too you're I know look in not probably going to get organic

shouldn't all reason there's X bucket think they're of any Yes. specialty no, repair disaggregated on parts see products, I it. strong. very I optimistic -- very We're you and don't revenue our

a XX into expectation is I mean, double-digit so only of we're said course, is And days reasonable. I year. the that

New end and way Thanksgiving to their of be depending what the skewed can want from always the vendors be always year the on other then and X volumes the inventory. a circumspect manage we little Year, customers the our and and us or the way between shipments So at they to want

segments. very of take numbers are Flight rest and in strong the to November internal and organic again, December growth in of our don't yes, order prognosticate our Support like X all within So for I months of to year. But the double-digit the the

Carlos. is This

Just seasonality important. just to out keep have we our mind, in Eric don't really X while thing is very pointed business,

quarter second, first little a to the than Our and the typically quarter. third with lighter be fourth holidays tends

what that you're keep in just So mind thinking said. just when he about

I January at been are December, Yes. And first types drives always for months. the years I've always quarter. December the the And November November month the mean, lower historically and of XX is that company. and

internal heads numbers So we're hard ever than business not and seen of I've to and them. optimistic frankly, are our in so very optimistic, extremely January, it's course, optimistic are say. our more But

around some and makes How to turn of younger? you just in get and sense? spending of just do on of -- would very if really how sort helpful. XXXX the does on new around side, 'XX greater better if -- the airframe Okay. obviously in there's terms perform engine could. aircraft execution of recently start slow and actually OEM start quickly legacy X terms to the would quickly more, your can assets sort engine sort And of in a ideally deliveries tide to legacy slow confidence think the in on that The better if start lot aircraft That's execution deliveries of I the been of fleets start that things become to out OEMs. What's as commentary there new to do and view of

Yes.

tremendous and are on know, So number the beat companies. They one, COVID, their They're build supply unfortunately, orders, suppliers. up airframe are they're and And products. chains, OEMs. supply slash dependent got as through engine at just incredible companies the the their respect the people not we the I for as they those chains. phenomenal have at many But terribly

that And rates, around marginally, of lot some can had production I still challenges. and I I businesses, go they've chain are I think have think the and tremendous. in but you, and the our that's talk the exist, areas, see I they And intent. challenges they tell they So to about supply increasing a

the supply is I suppliers from money substantially. of personally seen not that. to that down turn I going the putting are So have evidence not around OEM any

to continue think been badly in able the the don't expect routes aftermarket very have assets to where want have strong. remain schedule. be So so complete to by And their they I their to the don't get and situation they that to bitten airlines the I legacy deferrals

So mean got always foolishly, going a I be not I that's expect they've I strong. but to to them plan. have think continue spend is backup money, to aftermarket to And why the

In addition, even look if deliveries you OEM the with increasing.

If at mean miles the and easy the what to seats you look number. seat in available IATA additional absorb huge available a I older and increasing miles very predicted, X% And seat would in XXXX. be is This it keep service. the frankly, aircraft

legacy So order very, it we we see, trends -- strong based the on remains that for very the aircraft.

moment, this change see at So there. a don't

question TD from Next with Gautam Cowens. Khanna comes

require I parts, -- historically on curious is just I'm they OEM it entertain like it just the there buying has their been those? COD I'm PMA like Yes. their disconnect -- [indiscernible] culture? do parts? ability actually what curious Or prevented and it what willingness was to just Yes. -- wondering, on Or Is is has

don't a process. have They

going great them parts. And mixed me, these said burned, we chambers could As They already for said, and mean, you and I develop you're we've follow check, is we and into fuel buy additional a PMA and that supplied is When to able Carlos this what we're can't the where why that's you to the buy have, we to been be said is those box well, that's frankly, first could FAA. airlines the on And years what use to do but and to and that I showed XX air these And combustion the do stuff. have additional you idea, process the all this And we with should had XX have box buying the check. parts. can't with to they says, successful. to years what a record, airlines ago. a and you what worked parts service immensely went our don't this is

everything commercially, is to we think as representatives here. President if be opportunities. can the still I for change. details there The I very or specifically enough And this the a be want they And it's everybody what senators nonsense. got to cannot Vice provide. that to I must have the provides fly don't And I irresponsibly It's And of can HEICO do be or think is DoD, what know when government for part out This want past. or opportunity number And when I the change. And these DoD. That or very lends we've States we President think lot is rocket business HEICO to of the substantial. And usual. don't to think low-hanging be us the a to is the relic And think Defense fruit. significant are you I to need for products used else and what United the to to does very very just reason must into of the careful. on and they to we recognizes budget continue well, This we you obviously, a the providers get but on scientist figure that good one but can't there's there But still doesn't, add commercially, well. tremendous HEICO. to current run not cannot itself going provide to products and a certainly deficits. out fly fly is do government it. continue at but of maybe Secretary President frankly, it the So is no the

Or comparable on may on opportunity built they're have big just follow the And products the up commercial and opportunity is is sense. biggest with commercial on? makes where that? there That to on you that, derivatives there aircraft a that PA beyond like Tanker

that both. a large think is there opportunity I very in

no-brainer. already the mean, they is commercial derivatives, I just it's use this parts. again, is a On some no-brainer. this the And of a --

very that not well. But these can fundamentally impact. good to think it's very opportunities this opportunities large that need again, that they fiscal commercial commit of derivatives, later, savings also to are This all box the term is occur. that think that want but outside opposed, And they're add-on then short don't I to significant are -- we of it's And So nice XXXX not not just there obviously as there a check. you it's a the doing. comes there go because when currently stuff are over I we're

framework That I already wondering was makes give fiscal some inorganic last could if Carlos, in the year what based the you sense. on And one, opening you've acquired? contribution us for

Yes, sure.

to don't give outlook. subsidiary want So I

will helpful. we've quarter, subsidiary careful quarters. cable bucket going to contributions get again, X that being won't lapse course, want -- be Wencor to and think that's some inorganic it's done be we the this I'm side, acquisitions, FSG because next of I recent if in the don't have had that we've I first acquisitions and not we'll be the be they're think segment. recent immaterial, not And on details. But X material material in into going to -- TG, for It to the quarter. the the I the year recent don't

next mostly pretty it's year. much organic So

from Or Sheila Jefferies. with Kahyaoglu question comes next

if and with okay, please. morning, you could start I the that's Eric, thank for Good time. you, if

quarter. price How do you there? demand with of business Can is up you the versus just And organic from what -- the and XX% could the MROs think about double down up airlines still about business, just then it trending aftermarket seeing talk last parts what are 'XX? is the digits? different the into XX%, grow you FSG within slightly XX% right, If parts growth the

you and for all, Well, of questions. your first hi, thank

areas. the organic as organic already all are parts parts I accelerate the in But our backlog that those. We strong going probably growth the area the our in and to in XXXX, that am in within a I said anticipate, had highest the optimistic in growth is products. I segments. I it going on growth organic remain side say, with of that XXXX. And products very disaggregated breaking that growth, We continued mentioned, digits In specialty double area. side. Component in -- think down all double-digit frankly, somewhat is was be we X double-digit on growth, would will based repair growth, our lowest definitely between to in have the expecting specialty organic And strong the the of our growth, we area, also

unrelated if or core How becoming customer SKUs relative quantify defense under your And minute. maybe synergies, PMA easier a revenue for their our think see to of have penetrated how so. you about way X base? question Maybe we new Sure. administration? to PMA about side many then a Okay. into the could the XX,XXX talk business, X,XXX do to Any but the you the

Yes.

parts million, regard last you'll repair, and with is you Wencor, -- take look approximately within our at to see if $XX specifically we growth fourth Wencor, of a organic of quarter entire and component over the growth fourth for organic in basically, all there's the the $XX there in a parts just remember, repair. And own year. pretty that organic. So million That's quarter -- much

got million ever these incredible was anything Wencor no For mean, and possible. far incredible businesses. I teams, $XX beyond We've acquisitions. thought in HEICO to that that's I grow and leaders organically, huge frankly,

solution. There it's each HEICO there, I the front have think amount getting able with just is unsold forces into a a our that businesses get out own that combined them tremendous matter we out units, these its their and to getting sure in of is there. There of team, its much that central help old advantage give a business is can competitive of them be switch so from customers. more as making them solution with where to structured, they sales individual new legacy had business have own potential. help we way HEICO's leadership we And

the the strong. look "Oh, And the are yes, out changed. The any really, look caught all the when and and go Not subcontractors to very mean to up. specialty ramp. very they. When folks, now is in labor be also in I to XXXX." able field I we're into there prayer. to talk is that expect they're and from Everything has our the they back encouraged products, incredibly say, the market out I challenge vendors businesses is I force go because these difficult where it's very to when to executing be a And we don't getting areas, products at I the backlogs so I'm tremendous. our future So what are

areas. of our And so in that's all bullish why very I'm

asked had the about You military side.

added that's think I just opportunity.

we've these it across our it's well quickly. focused processes excited we parts business are if approach, again, the history a we've that because we're running success. that Support of And using beneficiary certainly that it's can result think, the can HEICO of are lower do this as also area, I Electronic get wise You higher when I lot country, because the by a result know make to in be, as is and a only a because country, things for HEICO. And the this degree couple because I really out never made dose our before that new tremendous slows savings money. it has And has a a provide, for using HEICO that that our various we've prior as systems and comments they spoken in are cost cost, accelerate quality, doing limited can and in the And down. is administration these of a to savings there's to opportunity and government competitively done got tremendous or the operated technology. But they as our cost for for the in very about government, as Technologies seen which had and HEICO it of of smaller of so But that the believe developed businesses is government going think think years, a huge I Flight I'm not I imperative, questions, low-hanging really fruit fast, wants areas, we us.

well? the you I I'm PMA makes more commercial as commercial parts think the Eric, side. easier sorry, meant Do to on it administration

Yes.

I -- work the will, to over workforce I mean, last civilian a you there. The with. work been, administrations if think expect to has I years. the I FAA change supportive. frankly, outstanding that mean, with expect always the been I XX don't to with continue. have has been great

So I get and our in everything ability no continuing to expect change PMAs.

PMAs than So gotten to I expect we've and ever, that I continue. mean more

Scott question Deuschle And Bank. Deutsche our next comes from with

looking us and sense of OE Because pretty it year? missile Specialty Products the my tailwinds was over like a look what defense any like there of Specialty of at model, for the growth sounds XXXX ramp could you a next just lot I there Eric, was XX% acceleration regularly. growth. time you've period the between give Products was and And in can and got where growing XXXX

get a trying trying here, that excited sense not to just of I'm repeat get perhaps So whether something to like but too itself. could

Yes. I internal numbers the really mean, products. over specialty I've strong are in got

suppliers. everything, budgets based products to at As it, on and being I I of mentioned, least the on seeing you on XX% think think out very really, the certain from a But and spreadsheet, what think we're easy. get appreciates are It's everybody key I is able a be know seems and organic when to reasonable. And growth it's of that I spreadsheet. what

constrained in in year, organically one, businesses it's X market think type trained accomplish we've XX% a that's got mean, incredible growth these You by you material just about tremendous put XX when years. But when this that doubles in this, quadruples XX% grows in point I that it and years. labor. and to think in. to And business rate. with a a I easy and

areas. very those I'm in optimistic So

Eric. X Okay. X Great. And then just follow-up,

think it seems spare of up inventory there's aftermarket airlines parts. some number like built I of a that have

I hand airlines evidence them. customer your for have inventory specific mouth United generally think seen pretty parts. of I for or HEICO to guess build of is any X parts you

Yes.

HEICO parts There on strong. Also, I'm I to really all takes parts pretty tell they're since material it's to -- to they very they supply think very aware so always when program, the hand at us are but I they're mean got we're parts in I puts don't HEICO our don't well. many rely [indiscernible] and of of mouth. and they a of overstock that, us the has are have any really they surplus. way. parts not delivery can month these oversupplies all on have a with I because able certainly good airlines. airlines mean bad think order, typically

Our Sachs. next question Goldman comes from Poponak with Noah

that fielding margin, about ask FSG the this and to wanted some last questions on night I morning.

probably decent were I the the outperformed kind you higher a the of the final year. but year, fourth at amount think quarter, And beginning in full also of through then the it's what down year is than projecting sequentially.

can is to abnormal higher? anything in fourth quarter you year? XQ those that piece helpful. the margins mix That else or can guess, if Or there it's give think a So speak then go And is just you I me whether Or noncash XQ? could you next margin? be numbers where those versus cost would

Carlos. is this No,

that. Let at me stab take a

digging here. deep brain you're So in my

on And in you XX%. basically and XX% my the noise what bit than not probably to I've I'd down amortization in that for fourth little we're -- will to we're done. XX the a contributed that. I like expectation go consider the lot noise. a is there's of unusual about that things that's bps There year quarter So a a we've year. and that vocal for open There between QX pretty QX. lot which isn't been almost either tell And quarter of the little is blip. last FSG year. more this that that margins

do. like or to the it So pretty count in forward, margin would I that move can that, that be much as our I things costs. And something would due I on incremental other what did on some than that shifts we thought think mix leverage gains

Again, little in eke we're these margin going mix, expectations that's are expect So very has consistently the a the revenue base as of percent absent going in trend very big what shift done incremental year. been continue, I my that's that X revenue down to has a that year. thing gains. spend done The efficient any has well to out all grown. manner. the They've FSG next where without and as really SG&A to

growing sense I that expect be Carlos, no there's you're when you're to I revenue, would sound a -- margin makes you're growing quickly business probably XX% over of environment time, in you like guess as growing digits that mid- able that that I mean, in to even as way revenue range guess but I you're you makes would it it a -- or high where it Yes. think time. But an had as kind historically, to single XX%, flat over that cost referenced have you -- in double not consistent you've right? you're incremental pretty

be prior it the think decade be That's XX didn't I in margins that. I'm -- if margin year, correct. XX, insinuating going based business. going bps pre-COVID What to improvement. expect was hope and to I over to mean historically, to you on were that, look No, And a they're It's back flat. growth no, growing our volume don't the insinuate that I absolutely I is

revenues. And we your point, growing we in base mix, absent as that fast continue. to cost we're not isn't the any moving see to that cadence the that forward. I be grow, expect as swings As big then should

wanted Great. of sense. That the the to I lot ask are Okay. other of industries makes defense And then ETG. outside within a about space

a down row quarter where I the the down. fifth in it's in that quarter being think that

you easier where but again. were So down the it it's compare, quarter was the first lapping

and can I stabilize piece what's to So to guess, take that grow to you then talk that? what it would again? start get about And behind

Noah. Victor, is This Yes.

my not which of the place reverse bottom. comments, that -- a started of time. in others, in I wash rate But it's the kind to the along think, where signs and start some we our to we turn has reverses see I a over event businesses X.X of said years. basically, out sometime X-year the like general overordering, in It longer the a sense that of over, number starts that to bouncing period year. And up X, looks of instances took it's necessarily half first it probably in place is took as So order

this half less, sales could sequentially. both it experience more. we in be later, starts up somewhere month year a occasional better positive And of that neighborhood. sales show the surprise, doing of end neighborhood a cases when with a happens, to the little couple just a rising we sometime expected orders little an that It It could we get but and recently. And in has be than been sometimes our in in

play events, of that, course, that expect so unforeseen barring, would what does would I I out but that's And like would any expect. it typically

it. appreciate Victor, helpful. That's Okay.

The quick high X had Just in running. the fairly been to quarter one. last it is corporate where compared

strike about should expense moving think forward? big Is run how the don't something we that? abnormal rate Or corporate guys guys. there me as You in

X I think had insurance over things run something corporate things in No, tremendous typically years, imagine, that like we've X.X% about sales those mean, all rise. and the inflation, or we last expenses. I as of you benefits can and like

FX. We also noise have with little a

weakened, we in going X.X% had of X.X%, out we forward, the of I dollar challenges. trend I that. think mean the should As some sales nothing extraordinary. FX But continue noting the -- to be

As company do to keep everything. we legs the we track need don't grows, expenditures, lavish but arms have and of

So that's principally, the Zip code will in. run

We'll with take Securities. Michael next question Truist our Ciarmoli from

talked sequential I Eric, rates seen there notable the business record quarters. just a from the bit? that here. revenue anything versus it FSG but a several in changes running mean, sounds guess, growth, growth lowest the I looking at all -- sequential quarter are -- I any and and Was levels, that holidays lot FSG about sequential in last that we've trajectory we've lines, X Happy just up unusual customers mean, behavioral quarter? down all this pick changes like maybe or capabilities of

done in they HEICO we rates around, businesses that the I are Number we that what always a prior exaggerate any compared it. couple we've of things things. the sequential that and bounce number year. The X one, never in can at the can Yes. look that state can should move annual at to is growth metrics around growth I mean of the Because rate. is look of

look basically, in was our And approximately when FSG XX%. at first I it growth, mean, quarter, the organic I

Second quarter, XX%.

is Third this And with the out growth. regard of anybody quarter, I'm phenomenal so concerned, as as what mean, in XX%. I quarter, far to above fourth that XX%. far industry is organic else that's does park, and

we the of So stuff. second important compare annual. quarter just to overly had third incredibly basically is we I comparison the that I'm to it. And that that, I the the don't when to next. with we is quarter look to growth. happy between if didn't sorts excited mean get big what's X more we and super And the can strong. deals all be mean due or various I sequential mean, think quarter,

these various the in move sometimes moves and numbers And jumps.

at in it really a it's sequential to So like basis dangerous that. look

that's consolidated other the for level? Got give helpful. growth X at just ETG rate then it. Victor. you quarter Victor, for organic Eric X No, for sorry, housekeeping And did -- or the the

that? provide we Did

what quarter happened. X% it. was mean pretty and electronics down the offset like And about I That's contributing we the by organically. defense can space. for I it's ATG, other do approximately talked that was digits, low to earlier, BTG much single down what

X%. the quarter, I with up side growth think organic X% in the acquired there, in total was were roughly we some down for but

take Pete next from our with question Skibitski Global. Alembic We'll

you of we working of couple kind was expectation post-Wencor, quick just if just a or was for post a wondering also big especially inventory for maybe you build guys that wondering Carlos. for Carlos, use in add-back been Do Just going larger. if should pretty to in the just of COVID, greater I'm in expect capital, flow. forward? of short-term thing has a inventory sort because 'XX? And have DNA ones is an then I for cash DNA a

Sure.

as on But how a was next percentage, could roughly do actually, this up many So be Depending year. it same it A be side. year. to year, it expected think next similar I year D&A our expect on acquisitions to very to this we as flex I the the

We out commit moderate year. that made of higher beginning of ago normally these do probably on years far a expect of into firm challenges skew to capital, that being COVID because we expect of that we on as where some goes. I what of had. bit supply as purchased would a interesting. took spend get had as chain line as working the we we coming inventory than annual far beginning those guys into X lot As the this of because multiple towards commitments And stuff to on had that talked of came took got of last as this deliveries of of of A our we we lot into that advance. we on lot in little the fiscal delivery we products our we commitments our stuff that and this times a and inventory year a lead X-year year with beginning it's little about And years had some how year. sort last deals

should don't few organically, we we as inventory bit years. So But we've to see a with calm that the slope been that a it got of I know support the the down little more high will spend. in-store prior grow be it in as business had of in as spend

receivable Our impeccable. management is

have consumption growth our receivables, We at very capital given of is had amazing for which working least. little we

of So probably to capital we expect a going are X we're management the our working X consumption highly historically I you've think years. working focused as and and capital on going I versus like to over team seen guys or return forward, more last

Next Barclays. question comes Strauss from with David

question. a I NOS to wanted morning. think Good up, I Thanks. there follow was

for subsegments in Carlos in of or I rates Eric, repair influencing -- for you see especially parts, either some gave growth individual within relative guess, 'XX? growth FSG I the of the margin, FSG do think, relative those kind margin the terms parameters between How and that their around you in So cost. Eric,

would I think it help.

will it So I think help.

I in to this what yet the think margin least important the frankly we think, mean company. I I at happened most from the to story was when FSG of basically XXXX XX% look roughly reported margin to has X XX% XXXX things area. been, operating our that and

XX% margin XX% Now the the operating is area. up to in

time gone period that COVID number acquisitions there. about making of that margin of turmoil and the all up we've through So a happened XXX going basis and over points lower after

thing do just We Instead, HEICO amount year. wring And by efficiencies at this of of programs margin. don't just 'XX as exceptionally course. year something it the cost or the the make 'XX the we increased think We office on matter, work that. they efficiency. operating They their like HEICO continually here a I on operations just higher don't just So businesses have grind and the of out down. or continuing a 'XX at They volume. with get or are to they over them good focus like we corporate HEICO but

cost we our there's investments north want So and But Obviously, that, doing savings would it I anticipate to we I volume to that that bounces the have continue while you price, providing around still heading to via perspective from not various via depends to. make. no continue year-over-year, and what change operating it were our to think do. margins benefits and and huge but to that to and what alluding customers. cost on

think And if don't -- ETG, more but grow I you Okay. on into to I think said don't Terrific. XX? single mid-single would next specifically is year digit? ETG you revenue digit it And expect so, or low organically

This Sure. Victor. is

that being month to belief, came hearing them all conservative this only short digits X But I it acquisitions So only who we clear. little projection don't wind think to on hopefully careful for we'll the they are more felt very from expect great in some my we're look, fiscal of well. And ETG up our year. And the in with growth range. I finished budgeting where being in got a organically the based that the their Organically, companies year. year. be next in single talking the our and in ones mean, year, we've we've we're for than next and as that. -- I pipeline it's know acquisitions, new up putting lower

to Some people it's or money call conservative going because to our to they companies they're sandbagging. that on I that I'm accuse going according see side. think plan them what the that good they think and to are spend revenue say not

point moment, throughout to that we'll others. been this at I'm to as better We're internal existence lumpy the But want this here just point. hopeful have going out, throughout I that it of And our the quarters that and will sit bigger has budget. to be than ETG, I year. at always it course, as we'll see, don't to in commit our do But than

more some fact, And up budgets Some have much up. others. be that in may than the

in product is sales that And the just historically. based other but But variety I way, rates when expect ways, a factors. as we've the which market, in of multiple end of expected well to the are result income, shipped upon a by and continue as as many by -- including seen production their what not customer would that factors, and wants

our And with question next from Epstein we'll take Ron of Bank America.

asked, Yes. yet. A lot has been nobody really this one asked but

with the expectation change M&A what's your in administration? new the for environment the So maybe

area, we've year been bought strong we know, in Well, businesses. and very the this X as fiscal you different acquisitions

busier segments, Our are teams, ever looking both at by they've the been whole sizes. way, of all than variety in deals a

anticipate, scrutiny, business some a we're So of that the been have think evaluation we other market. for would very people going HEICO, less for forward. more don't I it's preferred strong folks HEICO, pro buyer complications obviously, expect I because much have. a But

but improves, So for it still very remain I think will HEICO. the regulatory environment good

[indiscernible]

the supplier never like We in have call, our One point pushed that sort of had in a of regulatory to any customers. with regulatory preferred Eric the buttons environment of out, earlier on the I never into never things that value always to price button. to expect, like monopoly is course, think We've sort. we we've of we always the said, and the pushed people and course, been, pricing of on begin issues business a more as approvals. And And as favorable companies consequence, to as generally be ours. things to said

of your And the another I appetite keep bit, for big Got one. doing pulling it. string if kind little then a it. Got on what's

there be if has you And no Boeing interested shopping there in? around. You gotten anything bigger. been you can would that two, that guys then guys Is some stuff secret maybe it's have say,

Yes.

them sense. the when doing they same. including make for the them ones do line. We've them sizes, for adding done we do Our of remains sake acquisitions It's or about larger of us appetite deals. revenue. We bottom larger all just won't the all And to

way, Historically, the sense So and across doesn't fold-in nothing buying companies. And we've the smaller as by that make acquisitions, seen, opportunities, same are spread the for you've makes an everything to our is or that as well appetite sense that board. including buy small to the as opportunistic out bolt-ons for been acquisitions buy.

at our absolute run. you to been I date, Ron, if course, was, And think, look an which home of Wencor, it's largest acquisition

market cash execute the do and to proven to ratio we get win we we've can basically and and businesses continue think to the that back I So and leverage our assimilate and these so reload down generate execute can more.

So I to our feel do larger to XXX% ability continue confident in acquisitions.

next from question Wolfe with comes And Louis Research. the Raffetto

Eric, levels just here. sure make to I'm

repair parts, MRO It that I growth in organic products in the quarter? do have XX% bit fourth specialty lighter. been you aftermarket had for a the quarter? accelerate seemed know MRO maybe like So and did little

Yes.

and Products the fourth quarter, the in XX% about fourth was is in -- looks MRO So XX% Specialty quarter.

there? it just Just then another a in maybe, know like looks like color contingency was and either be waived. you, corporate? or looks in quarter. segments know Carlos, adjustment may for it the I if actually ran don't I -- didn't that small was through impairment that any both there And or

contingent small big the course not And the about you're million. quarter. Yes. of up It talking a adjustments, wrapping stuff, contingency in guess It's Louis? impairment business a to $X.X year. just what was normal earn-out had there. adjust, deal a -- any about fourth I name trade We

Again, look the million. I there's again Yes, $X a earnings. negative both to would those, think, of be at

it's been sort I it's about if a these, term. margins it's have have like positive and them I'll or So call I you negative, of the I of actually long think know would contingencies. ex one-timers talked sort better a

So that the just square trying to where been? may have

Yes.

So okay.

the we and the It's evenly accreting it's X liability usual nothing the So earn-out every was liability much value. getting segments, pretty just relating discounted liability the -- trade contingent to roughly noise that net just for million value, name split and the was increase terminal have accretive quarter in to the to that in $X normal between payout there.

to. again, step But sense. that I'm might sure makes But got sequential up the All million. me. the look $X.X I of wraps for not curious. margins, you in if questioning no, at even Yes, that what down explain some works FSG right, out just was or the

Yes.

on is, on balance I full every up and you to pay earn-out value. you out reminder, sheet it X, can't I a have accrete those but fair Just it because wish put could have -- the as to value the value adjustments quarter we day then

quarter noise unusual the So was nothing a every about we're There little going adjustments. like just quarter, to fourth have those normal. was And that.

for will remarks. to Laurans Mendelson this closing additional or back At time, turn any I conference the

the it I earnings And look on in for which their would forward for $XX like so. continue company next of in call optimistic to outlook And I thank million. Personally, do to call, about I'm feel that this and internal first would very to and we interest everybody our be extremely HEICO. We see the the quarter acquisition well, is opportunity HEICO. doing growth. for will

have if speak know questions you this Thank us we quarter answered the otherwise, during ready any you very let to other 'XX. we So you And haven't to at first end the much. stand that of call.

This your today's concludes call. participation. you Thank for

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