HEICO CORP
For the period ended Jul 31, 2026. Filed Aug 27, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 31, 2026 · Filed Aug 27, 2026
HEI$332.65+1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-04-30; filed 2026-05-29.
0000046619-26-000016
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-07-31; filed 2026-08-27.
0000046619-26-000020
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 101 previous paragraphs and 93 current paragraphs.
51 unchanged; 34 reworded; 7 added; 13 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
Our consolidated SG&A expenses as a percentage of net sales improved to 16.1% in the first nine months of fiscal 2026, down from 17.1% in the first nine months of fiscal 2025. The
Current report
Our effective tax rate was 18.4% in the first nine months of fiscal 2026, as compared to
Current report
Comparison of Third Quarter of Fiscal 2026 to Third Quarter of Fiscal 2025
Current report
Our effective tax rate was 20.6% in the third quarter of fiscal 2026, as compared to 18.9% in the third quarter of fiscal 2025. The increase in our effective tax rate principally reflects a smaller favorable impact from tax-exempt unrealized gains recognized in the cash surrender values of life insurance policies related to the HEICO Corporation Leadership Compensation Plan (the "LCP") in the third quarter of fiscal 2026 as compared to the third quarter of fiscal 2025.
Current report
On June 11, 2026, we entered into a fourth amendment to our Credit Facility, to, among other things, (i) increase the capacity by $200 million to $2.2 billion, (ii) extend the maturity date to June 11, 2031, (iii) modify the Applicable Rate to be calculated based upon the most recently published ratings for our senior unsecured, non-credit enhanced, long-term indebtedness for borrowed money, and (iv) release our subsidiary guarantors from their guarantees under the Credit Facility. The Credit Facility includes features that will allow us, subject to certain conditions, to (i) increase the capacity by $800 million to become a $3.0 billion facility through increased commitments from existing and/or additional lenders and (ii) request up to two one-year extensions of the maturity date.
Current report
consolidated backlog, a $58.7 million increase in accounts receivable resulting from increased net sales and the timing of collections, and a $33.5 million increase in prepaid expenses and other current assets mainly reflecting deposits placed on future inventory deliveries, partially offset by a $47.3 million increase in trade accounts payable due to the timing of payments.
Current report
payable semi-annually on February 1 and August 1 of each year, commencing February 1, 2027. The 2031 Notes and 2036 Notes have effective interest rates of 5.2% and 5.5%, respectively. See Note 5, Long-Term Debt, to the Condensed Consolidated Financial Statements for additional information.
Removed paragraphs (13)
Previous report
Comparison of Second Quarter of Fiscal 2026 to Second Quarter of Fiscal 2025
Previous report
Our effective tax rate was 21.2% in the second quarter of fiscal 2026, as compared to 21.0% in the second quarter of fiscal 2025.
Previous report
Guarantor Group Summarized Financial Information
Previous report
The Notes were issued pursuant to an Indenture, dated as of July 27, 2023 (the “Base Indenture”), between HEICO and certain of its subsidiaries (collectively, the "Subsidiary Guarantors") and Truist Bank, as trustee (the “Trustee”), as supplemented by a First Supplemental Indenture, dated as of July 27, 2023 (the “First Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), between us, the Subsidiary Guarantors and the Trustee. The Notes are direct, unsecured senior obligations of HEICO and rank equally in right of payment with all of our existing and future senior unsecured indebtedness. Each Subsidiary Guarantor is owned either directly or indirectly by the Company and jointly and severally guarantee our obligations under the Notes. None of the Subsidiary Guarantors are
Previous report
organized outside of the U.S. A list of Subsidiary Guarantors is included as Exhibit 22 to this quarterly report.
Previous report
Under the Indenture, holders of the Notes will be deemed to have consented to the release of a subsidiary guarantee provided by a subsidiary guarantor, without any action required on the part of the Trustee or any holder of the Notes, upon such subsidiary guarantor ceasing to guarantee or to be an obligor with respect to the Credit Facility. Accordingly, if the lenders under the Credit Facility release a subsidiary guarantor from its guarantee of, or obligations as a borrower under, the Credit Facility, the obligations of the subsidiary guarantors to guarantee the Notes will immediately terminate. If any of our future subsidiaries incur obligations under the Credit Facility while the Notes are outstanding, then such subsidiary will be required to guarantee the Notes.
Previous report
In addition, a subsidiary guarantor will be released and relieved from all its obligations under its subsidiary guarantee in the following circumstances, each of which is permitted by the indenture:
Previous report
•upon the sale or other disposition (including by way of consolidation or merger), in one transaction or a series of related transactions, of a majority of the total voting stock of such subsidiary guarantor (other than to us or any of our affiliates); or
Previous report
•upon the sale or disposition of all or substantially all the property of such subsidiary guarantor (other than to any of our affiliates or another subsidiary guarantor);
Previous report
provided, however, that, in each case, such transaction is permitted by the Credit Facility and after giving effect to such transaction, such subsidiary guarantor is no longer liable for any subsidiary guarantee or other obligations in respect of the Credit Facility. The subsidiary guarantee of a subsidiary guarantor also will be released if we exercise our legal defeasance, covenant defeasance option or discharge the Indenture.
Previous report
We conduct our operations almost entirely through our subsidiaries. Accordingly, the Guarantor Group’s cash flow and ability to service any guaranteed registered debt securities will depend on the earnings of our subsidiaries and the distribution of those earnings to the Guarantor Group, including the earnings of the non-guarantor subsidiaries, whether by dividends, loans or otherwise. Holders of the guaranteed registered debt securities will have a direct claim only against the Guarantor Group.
Previous report
The following tables include summarized financial information for the Guarantor Group (in thousands). The information for the Guarantor Group is presented on a combined basis, excluding intercompany balances and transactions between us and the Guarantor Group and excluding investments in and equity in the earnings of non-guarantor subsidiaries. The Guarantor Group’s amounts due from, amounts due to, and transactions with non-guarantor subsidiaries have been presented in separate line items. The consolidating schedules are provided in accordance with the reporting requirements of Rule 13-01 under SEC Regulation S-X for the issuer and guarantor subsidiaries.
Reworded paragraphs (34)
Previous wording
Our critical accounting policies, which require management to make judgments about matters that are inherently uncertain, are described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended October 31, 2025. There have been no material changes to our critical accounting policies during the six months ended April 30, 2026.
Current wording
Our critical accounting policies, which require management to make judgments about matters that are inherently uncertain, are described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended October 31, 2025. There have been no material changes to our critical accounting policies during the nine months ended July 31, 2026.
Previous wording
Our results of operations for the six and three months ended April 30, 2026 have been affected by the fiscal 2025 acquisitions as further detailed in Note 2, Acquisitions, of the Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended October 31, 2025 and the fiscal 2026 acquisitions as further detailed in Note 2, Acquisitions, of the Notes to the Condensed Consolidated Financial Statements of this quarterly report.
Current wording
Our results of operations for the nine and three months ended July 31, 2026 have been affected by the fiscal 2025 acquisitions as further detailed in Note 2, Acquisitions, of the Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended October 31, 2025 and the fiscal 2026 acquisitions as further detailed in Note 2, Acquisitions, of the Notes to the Condensed Consolidated Financial Statements of this quarterly report.
Previous wording
Comparison of First Six Months of Fiscal 2026 to First Six Months of Fiscal 2025
Current wording
Comparison of First Nine Months of Fiscal 2026 to First Nine Months of Fiscal 2025
Previous wording
Our consolidated net sales in the first six months of fiscal 2026 increased by 20% to a record $2,554.3 million, up from net sales of $2,128.0 million in the first six months of fiscal 2025. The increase in consolidated net sales principally reflects an increase of $269.2 million (an 18% increase) to a record $1,749.4 million in net sales of the FSG and an increase of $157.7 million (a 23% increase) to a record $830.2 million in net sales of the ETG. The net sales increase in the FSG reflects robust organic growth of 16% and net sales of $36.1 million contributed by fiscal 2025 and 2026 acquisitions. The FSG's organic net sales growth reflects increased demand within its aftermarket replacement parts, repair and overhaul parts and services, and specialty products product lines resulting in net sales increases of $161.9 million, $40.3 million, and $30.5 million, respectively. The net sales increase in the ETG reflects very strong organic growth of 12% and net sales of $79.8 million contributed by fiscal 2025 and 2026 acquisitions. The ETG's organic net sales growth is mainly attributable to increased demand for its other electronics, aerospace, and defense products resulting in net sales increases of $30.7 million, $21.8 million, and $19.9 million, respectively. Sales price changes were not a significant contributing factor to the change in net sales of the FSG and ETG in the first six months of fiscal 2026.
Current wording
Our consolidated net sales in the first nine months of fiscal 2026 increased by 21% to a record $3,967.3 million, up from net sales of $3,275.6 million in the first nine months of fiscal 2025. The increase in consolidated net sales principally reflects an increase of $414.3 million (an 18% increase) to a record $2,697.2 million in net sales of the FSG and an increase of $285.3 million (a 28% increase) to a record $1,313.7 million in net sales of the ETG. The net sales increase in the FSG reflects robust organic growth of 15% and net sales of $81.9 million contributed by fiscal 2026 and 2025 acquisitions. The FSG's organic net sales growth reflects increased demand within its aftermarket replacement parts, repair and overhaul parts and services, and specialty products product lines resulting in net sales increases of $234.0 million, $50.7 million, and $46.4 million, respectively. The net sales increase in the ETG reflects very strong organic growth of 14% and net sales of $140.1 million contributed by fiscal 2026 and 2025 acquisitions. The ETG's organic net sales growth is mainly attributable to increased demand for its other electronics, defense, aerospace, and medical products resulting in net sales increases of $60.0 million, $36.3 million, $31.1 million, and $7.0 million, respectively. Sales price changes were not a significant contributing factor to the change in net sales of the FSG and ETG in the first nine months of fiscal 2026.
Previous wording
Our consolidated gross profit margin improved to 40.1% in the first six months of fiscal 2026, up from 39.6% in the first six months of fiscal 2025, principally reflecting a .6% increase in the FSG’s gross profit margin. The increase in the FSG's gross profit margin principally reflects a more favorable product mix within its aftermarket replacement parts product line. Total new product research and development expenses included within our consolidated cost of sales were $68.4 million in the first six months of fiscal 2026, up from $56.3 million in the first six months of fiscal 2025.
Current wording
Our consolidated gross profit margin improved to 40.5% in the first nine months of fiscal 2026, up from 39.7% in the first nine months of fiscal 2025, principally reflecting a .7% increase in the FSG’s gross profit margin and a .4% increase in the ETG’s gross profit margin. The increase in the FSG's gross profit margin principally reflects a more favorable product mix within its aftermarket replacement parts product line. The increase in the ETG's gross profit margin principally reflects the previously mentioned higher net sales of its aerospace products, partially offset by a lower proportion of net sales from its space products. Total new product research and development expenses included within our consolidated cost of sales were $104.5 million in the first nine months of fiscal 2026, up from $88.3 million in the first nine months of fiscal 2025.
Previous wording
Our consolidated selling, general and administrative ("SG&A") expenses were $414.2 million in the first six months of fiscal 2026, as compared to $368.5 million in the first six months of fiscal 2025. The increase in consolidated SG&A expenses reflects $19.3 million attributable to our fiscal 2025 and 2026 acquisitions, an $11.3 million increase in share-based compensation expense, and costs incurred to support the previously mentioned net sales growth, which resulted in increases of $11.8 million and $3.2 million in other selling expenses and other general and administrative expenses, respectively.
Current wording
Our consolidated selling, general and administrative ("SG&A") expenses were $639.9 million in the first nine months of fiscal 2026, as compared to $560.6 million in the first nine months of fiscal 2025. The increase in consolidated SG&A expenses reflects $36.1 million attributable to our fiscal 2026 and 2025 acquisitions, a $15.6 million increase in share-based compensation expense, and costs incurred to support the previously mentioned net sales growth, which resulted in increases of $17.9 million and $9.8 million in other selling expenses and other general and administrative expenses, respectively.
Previous wording
Our consolidated SG&A expenses as a percentage of net sales improved to 16.2% in the first six months of fiscal 2026, down from 17.3% in the first six months of fiscal 2025. The decrease in consolidated SG&A expenses as a percentage of net sales principally reflects efficiencies realized from the previously mentioned net sales growth.
Current wording
decrease in consolidated SG&A expenses as a percentage of net sales principally reflects efficiencies realized from the previously mentioned net sales growth.
Previous wording
Our consolidated operating income increased by 29% to a record $610.3 million in the first six months of fiscal 2026, up from $475.0 million in the first six months of fiscal 2025. The increase in consolidated operating income principally reflects a $92.7 million increase (a 26% increase) to a record $443.8 million in operating income of the FSG and a $40.7 million increase (a 26% increase) to a record $195.1 million in operating income of the ETG. The increase in operating income of the FSG principally reflects the previously mentioned net sales growth, SG&A expense efficiencies realized from the net sales growth, and the previously mentioned improved gross profit margin. The increase in operating income of the ETG principally reflects the previously mentioned net sales growth and SG&A expense efficiencies realized from the net sales growth.
Current wording
Our consolidated operating income increased by 30% to a record $965.5 million in the first nine months of fiscal 2026, up from $740.0 million in the first nine months of fiscal 2025. The increase in consolidated operating income principally reflects a $139.7 million increase (a 25% increase) to a record $689.1 million in operating income of the FSG and an $85.3 million increase (a 36% increase) to a record $320.6 million in operating income of the ETG. The increase in operating income of the FSG principally reflects the previously mentioned net sales growth, the previously mentioned improved gross profit margin, and SG&A expense efficiencies realized from the net sales growth. The increase in operating income of the ETG principally reflects the previously mentioned net sales growth, SG&A expense efficiencies realized from the net sales growth, and the previously mentioned improved gross profit margin.
Previous wording
Our consolidated operating income as a percentage of net sales improved to 25.5% in the second quarter of fiscal 2026, up from 22.6% in the second quarter of fiscal 2025. The increase in consolidated operating income as a percentage of net sales principally reflects an increase in the ETG’s operating income as a percentage of net sales to 26.5% in the second quarter of fiscal 2026, up from 22.8% in the second quarter of fiscal 2025, and an increase in the FSG's operating income as a percentage of net sales to 26.2% in the second quarter of fiscal 2026, up from 24.1% in the second quarter of fiscal 2025. The increase in the ETG's operating income as a percentage of net sales reflects the previously mentioned improved gross profit margin and a 1.0% impact from a decrease in SG&A expenses as a percentage of net sales, primarily driven by the previously mentioned SG&A expense efficiencies. The increase in the FSG's operating income as a percentage of net sales reflects a 1.3% impact from a decrease in SG&A expenses as a percentage of net sales, primarily driven by the previously mentioned SG&A expense efficiencies, and the previously mentioned improved gross profit margin.
Current wording
Our consolidated operating income as a percentage of net sales improved to 24.3% in the first nine months of fiscal 2026, up from 22.6% in the first nine months of fiscal 2025. The increase in consolidated operating income as a percentage of net sales principally reflects an increase in the FSG’s operating income as a percentage of net sales to 25.5% in the first nine months of fiscal 2026, up from 24.1% in the first nine months of fiscal 2025, and an increase in the ETG's operating income as a percentage of net sales to 24.4% in the first nine months of fiscal 2026, up from 22.9% in the first nine months of fiscal 2025. The increase in the FSG's operating income as a percentage of net sales reflects the previously mentioned improved gross profit margin and a .7% impact from a decrease in SG&A expenses as a percentage of net sales, mainly due to the previously mentioned SG&A expense efficiencies. The increase in the ETG's operating income as a percentage of net sales reflects a 1.1% impact from a decrease in SG&A expenses as a percentage of net sales, mainly due to the previously mentioned SG&A expense efficiencies, and the previously mentioned improved gross profit margin.
Previous wording
Interest expense decreased to $63.6 million in the first six months of fiscal 2026, down from $65.3 million in the first six months of fiscal 2025. The decrease in interest expense was principally due to a lower weighted-average interest rate on outstanding borrowings under our revolving credit facility, partially offset by an increase in the amount of debt outstanding.
Current wording
Interest expense was $99.6 million in the first nine months of fiscal 2026, as compared to $97.0 million in the first nine months of fiscal 2025. The increase in interest expense was principally due to an increase in the amount of debt outstanding, partially offset by a lower weighted-average interest rate on outstanding borrowings under our revolving credit facility ("Credit Facility").
Previous wording
Other income in the first six months of fiscal 2026 and 2025 was not material.
Current wording
Other income in the first nine months of fiscal 2026 and 2025 was not material.
Previous wording
Our effective tax rate was 17.1% in the first six months of fiscal 2026, as compared to 14.4% in the first six months of fiscal 2025. The increase in our effective tax rate principally reflects a smaller tax benefit from stock option exercises recognized in the first quarter of fiscal 2026. We recognized a discrete tax benefit from stock option exercises in the first quarter of fiscal 2026 and 2025 of $22.3 million and $27.2 million, respectively.
Current wording
16.0% in the first nine months of fiscal 2025. The increase in our effective tax rate principally reflects a smaller tax benefit from stock option exercises recognized in the first quarter of fiscal 2026. We recognized a discrete tax benefit from stock option exercises in the first quarter of fiscal 2026 and 2025 of $22.3 million and $27.2 million, respectively.
Previous wording
Net income attributable to noncontrolling interests relates to the 20% noncontrolling interest held by Lufthansa Technik AG in HEICO Aerospace Holdings Corp. and the noncontrolling interests held by others in certain subsidiaries of the FSG and ETG. Net income attributable to noncontrolling interests was $31.1 million in the first six months of fiscal 2026, as compared to $27.3 million in the first six months of fiscal 2025. The increase in net income attributable to noncontrolling interests principally reflects improved operating results of certain subsidiaries in which noncontrolling interests are held.
Current wording
Net income attributable to noncontrolling interests relates to the 20% noncontrolling interest held by Lufthansa Technik AG in HEICO Aerospace Holdings Corp. and the noncontrolling interests held by others in certain subsidiaries of the FSG and ETG. Net income attributable to noncontrolling interests was $50.1 million in the first nine months of fiscal 2026, as compared to $40.7 million in the first nine months of fiscal 2025. The increase in net income attributable to noncontrolling interests principally reflects improved operating results of certain subsidiaries in which noncontrolling interests are held.
Previous wording
Net income attributable to HEICO increased by 31% to a record $424.0 million, or $3.01 per diluted share, in the first six months of fiscal 2026, up from $324.7 million, or $2.31 per diluted share, in the first six months of fiscal 2025, principally reflecting the previously mentioned higher consolidated operating income.
Current wording
Net income attributable to HEICO increased by 31% to a record $659.4 million, or $4.67 per diluted share, in the first nine months of fiscal 2026, up from $502.1 million, or $3.57 per diluted share, in the first nine months of fiscal 2025, principally reflecting the previously mentioned higher consolidated operating income.
Previous wording
Our consolidated net sales in the second quarter of fiscal 2026 increased by 25% to a record $1,375.7 million, up from net sales of $1,097.8 million in the second quarter of fiscal 2025. The increase in consolidated net sales principally reflects an increase of $162.4 million (a 21% increase) to a record $929.4 million in net sales of the FSG and an increase of $117.4 million (a 34% increase) to a record $459.5 million in net sales of the ETG. The net sales increase in the FSG reflects strong organic growth of 19% and net sales of $17.4 million contributed by fiscal 2026 acquisitions. The FSG's organic net sales growth reflects increased demand within its aftermarket replacement parts, specialty products, and repair and overhaul parts and services product lines resulting in net sales increases of $102.4 million, $22.7 million, and $19.7 million, respectively. The net sales increase in the ETG reflects strong organic growth of 17% and net sales of $58.3 million contributed by fiscal 2026 and 2025 acquisitions. The ETG's organic net sales growth is mainly attributable to increased demand for its other electronics, defense, aerospace, and space products resulting in net sales increases of $22.6 million, $16.5 million, $13.8 million, and $4.0 million, respectively. Sales price changes were not a significant contributing factor to the change in net sales of the FSG and ETG in the second quarter of fiscal 2026.
Current wording
Our consolidated net sales in the third quarter of fiscal 2026 increased by 23% to a record $1,413.1 million, up from net sales of $1,147.6 million in the third quarter of fiscal 2025. The increase in consolidated net sales principally reflects an increase of $145.1 million (an 18% increase) to a record $947.8 million in net sales of the FSG and an increase of $127.6 million (a 36% increase) to a record $483.5 million in net sales of the ETG. The net sales increase in the FSG reflects strong organic growth of 12% and net sales of $45.8 million contributed by fiscal 2026 acquisitions. The FSG's organic net sales growth reflects increased demand within its aftermarket replacement parts, specialty products, and repair and overhaul parts and services product lines resulting in net sales increases of $72.1 million, $15.9 million, and $10.4 million, respectively. The net sales increase in the ETG reflects robust organic growth of 18% and net sales of $60.2 million contributed by fiscal 2026 and 2025 acquisitions. The ETG's organic net sales growth is mainly attributable to increased demand for its other electronics, defense, and aerospace products resulting in net sales increases of $29.3 million, $16.3 million, and $9.3 million, respectively. Sales price changes were not a significant contributing factor to the change in net sales of the FSG and ETG in the third quarter of fiscal 2026.
Previous wording
Our consolidated gross profit margin improved to 41.4% in the second quarter of fiscal 2026, up from 39.9% in the second quarter of fiscal 2025, principally reflecting a 2.7% increase in the ETG’s gross profit margin and a .8% increase in the FSG's gross profit margin. The increase in the ETG's gross profit margin principally reflects the previously mentioned higher net sales and a more favorable product mix of its aerospace products. The increase in the FSG's
Current wording
Our consolidated gross profit margin improved to 41.1% in the third quarter of fiscal 2026, up from 39.8% in the third quarter of fiscal 2025, principally reflecting a 1.0% increase in the FSG’s gross profit margin and a .9% increase in the ETG's gross profit margin. The increase in the FSG's gross profit margin principally reflects a more favorable product mix within its specialty products and aftermarket replacement parts product lines. The increase in the ETG's gross profit margin principally reflects the previously mentioned higher net sales of its aerospace products. Total new product research and development expenses included within our consolidated cost of sales were $36.1 million in the third quarter of fiscal 2026, up from $31.9 million in the third quarter of fiscal 2025.
Previous wording
Our consolidated SG&A expenses were $219.1 million in the second quarter of fiscal 2026, as compared to $189.7 million in the second quarter of fiscal 2025. The increase in consolidated SG&A expenses reflects $11.8 million attributable to our fiscal 2026 and 2025 acquisitions, $4.9 million of higher share-based compensation expense, and costs incurred to support the previously mentioned net sales growth, which resulted in increases of $6.9 million and $5.8 million in other selling expenses and other general and administrative expenses, respectively.
Current wording
Our consolidated SG&A expenses were $225.8 million in the third quarter of fiscal 2026, as compared to $192.1 million in the third quarter of fiscal 2025. The increase in consolidated SG&A expenses reflects $16.8 million attributable to our fiscal 2026 and 2025 acquisitions, $4.3 million of higher share-based compensation expense, and costs incurred to support the previously mentioned net sales growth, which resulted in increases of $6.6 million and $6.1 million in other general and administrative expenses and other selling expenses, respectively.
Previous wording
Our consolidated SG&A expenses as a percentage of net sales improved to 15.9% in the second quarter of fiscal 2026, down from 17.3% in the second quarter of fiscal 2025. The decrease in consolidated SG&A expenses as a percentage of net sales principally reflects efficiencies realized from the previously mentioned net sales growth.
Current wording
Our consolidated SG&A expenses as a percentage of net sales improved to 16.0% in the third quarter of fiscal 2026, down from 16.7% in the third quarter of fiscal 2025. The decrease in consolidated SG&A expenses as a percentage of net sales principally reflects efficiencies realized from the previously mentioned net sales growth.
Previous wording
Our consolidated operating income increased by 41% to a record $350.4 million in the second quarter of fiscal 2026, up from $248.2 million in the second quarter of fiscal 2025. The increase in consolidated operating income principally reflects a $58.1 million increase (a 31% increase) to a record $243.1 million in operating income of the FSG and a $43.9 million increase (a 56% increase) to a record $121.8 million in operating income of the ETG. The increase in operating income of the FSG principally reflects the previously mentioned net sales growth, SG&A expense efficiencies realized from the net sales growth, and the previously mentioned improved gross profit margin. The increase in operating income of the ETG principally reflects the previously mentioned net sales growth and improved gross profit margin, as well as SG&A expense efficiencies realized from the net sales growth.
Current wording
Our consolidated operating income increased by 34% to a record $355.2 million in the third quarter of fiscal 2026, up from $265.0 million in the third quarter of fiscal 2025. The increase in consolidated operating income principally reflects a $47.0 million increase (a 24% increase) to a record $245.3 million in operating income of the FSG and a $44.6 million increase (a 55% increase) to a record $125.6 million in operating income of the ETG. The increase in operating income of the FSG principally reflects the previously mentioned net sales growth, the previously mentioned improved gross profit margin, and SG&A expense efficiencies realized from the net sales growth. The increase in operating income of the ETG principally reflects the previously mentioned net sales growth, SG&A expense efficiencies realized from the net sales growth, and the previously mentioned improved gross profit margin.
Previous wording
Our consolidated operating income as a percentage of net sales improved to 23.9% in the first six months of fiscal 2026, up from 22.3% in the first six months of fiscal 2025. The increase in consolidated operating income as a percentage of net sales principally reflects an increase in the FSG’s operating income as a percentage of net sales to 25.4% in the first six months of fiscal 2026, up from 23.7% in the first six months of fiscal 2025, and an increase in the ETG's operating income as a percentage of net sales to 23.5% in the first six months of fiscal 2026, up from 23.0% in the first six months of fiscal 2025. The increase in the FSG's operating income as a percentage of net sales reflects a 1.1% impact from a decrease in SG&A expenses as a percentage of net sales, mainly due to the previously mentioned SG&A expense efficiencies and the previously mentioned improved gross profit margin. The increase in the ETG's operating income as a percentage of net sales principally reflects the previously mentioned SG&A expense efficiencies.
Current wording
Our consolidated operating income as a percentage of net sales improved to 25.1% in the third quarter of fiscal 2026, up from 23.1% in the third quarter of fiscal 2025. The increase in consolidated operating income as a percentage of net sales principally reflects an increase in the ETG’s operating income as a percentage of net sales to 26.0% in the third quarter of fiscal 2026, up from 22.8% in the third quarter of fiscal 2025, and an increase in the FSG's operating income as a percentage of net sales to 25.9% in the third quarter of fiscal 2026, up from 24.7% in the third quarter of fiscal 2025. The increase in the ETG's operating income as a percentage of net sales reflects a 2.3% impact from a decrease in SG&A expenses as a percentage of net sales,
Previous wording
Interest expense increased to $34.2 million in the second quarter of fiscal 2026, as compared to $32.9 million in the second quarter of fiscal 2025. The increase in interest expense was principally due to an increase in the amount of outstanding debt, partially offset by a lower weighted-average interest rate on borrowings outstanding under our revolving credit facility.
Current wording
Interest expense was $35.9 million in the third quarter of fiscal 2026, as compared to $31.7 million in the third quarter of fiscal 2025. The increase in interest expense was principally due to an increase in the amount of outstanding debt, partially offset by a lower weighted-average interest rate on borrowings outstanding under our Credit Facility.
Previous wording
Other income in the second quarter of fiscal 2026 and 2025 was not material.
Current wording
Other income in the third quarter of fiscal 2026 and 2025 was not material.
Previous wording
Net income attributable to noncontrolling interests relates to the 20% noncontrolling interest held by Lufthansa Technik AG in HEICO Aerospace Holdings Corp. and the noncontrolling interests held by others in certain subsidiaries of the FSG and ETG. Net income attributable to noncontrolling interests was $16.5 million in the second quarter of fiscal 2026, as compared to $13.7 million in the second quarter of fiscal 2025. The increase in net income attributable to noncontrolling interests principally reflects improved operating results of certain subsidiaries in which noncontrolling interests are held.
Current wording
Net income attributable to noncontrolling interests relates to the 20% noncontrolling interest held by Lufthansa Technik AG in HEICO Aerospace Holdings Corp. and the noncontrolling interests held by others in certain subsidiaries of the FSG and ETG. Net income attributable to noncontrolling interests was $19.0 million in the third quarter of fiscal 2026, as compared to $13.3 million in the third quarter of fiscal 2025. The increase in net income attributable to noncontrolling interests principally reflects improved operating results of certain subsidiaries in which noncontrolling interests are held.
Previous wording
Net income attributable to HEICO increased by 49% to a record $233.8 million, or $1.66 per diluted share, in the second quarter of fiscal 2026, up from $156.8 million, or $1.12 per diluted share, in the second quarter of fiscal 2025 principally reflecting the previously mentioned higher consolidated operating income.
Current wording
Net income attributable to HEICO increased by 33% to a record $235.4 million, or $1.67 per diluted share, in the third quarter of fiscal 2026, up from $177.3 million, or $1.26 per diluted share, in the third quarter of fiscal 2025, principally reflecting the previously mentioned higher consolidated operating income.
Previous wording
For the remainder of fiscal 2026, we expect increased net sales at both the FSG and ETG to continue to be supported by underlying demand for our products and contributions from recent acquisitions. We intend to continue evaluating acquisition opportunities that are consistent with our strategic objectives. Our capital allocation approach remains focused on balancing organic growth and acquisitions while maintaining liquidity and financial flexibility.
Current wording
For the remainder of fiscal 2026, we expect increased net sales at both the FSG and ETG to continue to be supported by underlying demand for our products and contributions from recent acquisitions. We remain focused on identifying and evaluating acquisition opportunities that align with our strategic objectives. Our capital allocation strategy continues to prioritize investments in organic growth and acquisitions while preserving adequate liquidity and financial flexibility.
Previous wording
Our principal uses of cash include acquisitions, interest payments, capital expenditures, cash dividends, distributions to noncontrolling interests and working capital needs. We now estimate fiscal 2026 capital expenditures to be approximately $85 to $95 million. We finance our activities primarily from our operating and financing activities, including borrowings under our revolving credit facility. The revolving credit facility and senior unsecured notes contain both financial and non-financial covenants. As of April 30, 2026, we were in compliance with all such covenants and our total debt to shareholders’ equity ratio was 53.3%.
Current wording
Our principal uses of cash include acquisitions, interest payments, capital expenditures, cash dividends, distributions to noncontrolling interests and working capital needs. We continue to estimate fiscal 2026 capital expenditures to be approximately $85 to $95 million. We finance our activities primarily from our operating and financing activities, including borrowings under our Credit Facility. The Credit Facility and senior unsecured notes contain both financial and non-financial covenants. As of July 31, 2026, we were in compliance with all such covenants and our total debt to shareholders’ equity ratio was 50.6%.
Previous wording
Based on our current outlook, we believe that net cash provided by operating activities and available borrowings under our revolving credit facility will be sufficient to fund our cash requirements for at least the next twelve months.
Current wording
Based on our current outlook, we believe that net cash provided by operating activities and available borrowings under our Credit Facility will be sufficient to fund our cash requirements for at least the next twelve months.
Previous wording
Net cash provided by operating activities was $470.6 million in the first six months of fiscal 2026 and consisted primarily of net income from consolidated operations of $455.1 million, depreciation and amortization expense of $107.6 million (a non-cash item), $22.5 million in share-based compensation expense (a non-cash item), net changes of $18.4 million included in the "Other" caption (principally the receipt of advance deposits on certain long-term customer contracts), net changes in other long-term liabilities and assets related to the HEICO Corporation Leadership Compensation Plan (the "LCP") of $13.7 million (principally participant deferrals and employer contributions), an $11.8 million deferred income tax provision (a non-cash item), and $10.5 million in employer contributions to the HEICO Savings and Investment Plan (a non-cash item), partially offset by a $173.5 million increase in net working capital. The increase in net working capital is inclusive of a $75.9 million decrease in accrued expenses and other current liabilities, mainly reflecting the payment of fiscal 2025 accrued performance-based compensation, distributions to participants of the LCP, and the payment of payroll taxes arising from withholding requirements on stock option exercises, partially offset by accrued performance-based compensation expense; as well as a $65.1 million increase in accounts receivable resulting from the timing of collections, and a $40.5 million increase in inventories to support an increase in consolidated backlog, partially offset by a $50.0 million increase in trade accounts payable.
Current wording
Net cash provided by operating activities was $815.9 million in the first nine months of fiscal 2026 and consisted primarily of net income from consolidated operations of $709.6 million, depreciation and amortization expense of $166.4 million (a non-cash item), $34.4 million in share-based compensation expense (a non-cash item), $17.9 million in employer contributions to the HEICO Savings and Investment Plan (a non-cash item), net changes in other long-term liabilities and assets related to the LCP of $16.2 million (principally participant deferrals and employer contributions), and net changes of $15.1 million included in the "Other" caption (principally the receipt of advance deposits on certain long-term customer contracts), partially offset by a $154.4 million increase in net working capital. The increase in net working capital is inclusive of a $78.4 million increase in inventories to support an increase in
Previous wording
Net cash provided by operating activities increased by $62.8 million (a 15% increase) in the first six months of fiscal 2026, up from $407.7 million in the first six months of fiscal 2025. The increase is principally attributable to a $103.0 million increase in net income from consolidated operations and a $29.7 million increase in the deferred income tax provision, partially offset by a $79.8 million increase in net working capital.
Current wording
Net cash provided by operating activities increased by $177.0 million (a 28% increase) in the first nine months of fiscal 2026, up from $638.9 million in the first nine months of fiscal 2025. The increase is principally attributable to a $166.8 million increase in net income from consolidated operations, a $31.5 million increase in the deferred income tax provision, a $21.5 million increase in depreciation and amortization expense, and a $16.1 million increase in share-based compensation expense, partially offset by a $65.9 million increase in net working capital. The increase in net working capital mainly reflects a $48.4 million increase in prepaid expenses and other current assets principally from increased deposits placed on future inventory deliveries and a $22.7 million increase in accounts receivable resulting from the higher net sales.
Previous wording
million, and LCP funding of $16.8 million, partially offset by $22.7 million in proceeds from corporate-owned life insurance policy withdrawals within the LCP. Further details regarding our fiscal 2026 acquisitions may be found in Note 2, Acquisitions, of the Notes to Condensed Consolidated Financial Statements.
Current wording
Net cash used in investing activities totaled $1,072.9 million in the first nine months of fiscal 2026 and related primarily to acquisitions of $1,018.2 million, capital expenditures of $54.1 million, and LCP funding of $19.4 million, partially offset by $22.7 million in proceeds from corporate-owned life insurance policy withdrawals within the LCP. Further details regarding our fiscal 2026 acquisitions may be found in Note 2, Acquisitions, of the Notes to Condensed Consolidated Financial Statements.
Previous wording
Net cash provided by financing activities in the first six months of fiscal 2026 totaled $371.9 million. During the first six months of fiscal 2026, we borrowed $830.7 million under our revolving credit facility, which was partially offset by $410.7 million in payments made on our revolving credit facility, $16.7 million of cash dividends paid on our common stock, $16.4 million of distributions to noncontrolling interests, and $12.4 million of payments to acquire certain noncontrolling interests.
Current wording
Net cash provided by financing activities in the first nine months of fiscal 2026 totaled $280.0 million. During the first nine months of fiscal 2026, we received net proceeds of $1,191.5 million from the issuance of senior unsecured notes and borrowed $1,030.7 million under our Credit Facility, which was partially offset by $1,845.7 million in payments made on our Credit Facility, $34.9 million of cash dividends paid on our common stock, $29.3 million of payments to acquire certain noncontrolling interests, and $25.8 million of distributions to noncontrolling interests.
Previous wording
There have not been any material changes to our other obligations and commitments that were included in our Annual Report on Form 10-K for the year ended October 31, 2025.
Current wording
Except as noted below, there have not been any material changes to our other obligations and commitments that were included in our Annual Report on Form 10-K for the year ended October 31, 2025.
Previous wording
On July 27, 2023, we completed the public offer and sale of senior unsecured notes, which consisted of $600 million principal amount of 5.25% Senior Notes due August 1, 2028 (the "2028 Notes") and $600 million principal amount of 5.35% Senior Notes due August 1, 2033 (the "2033 Notes" and, collectively with the 2028 Notes, the "Notes"). The Notes are fully and unconditionally guaranteed on a senior unsecured basis by all of our existing and future subsidiaries that guarantee our obligations under our revolving credit facility ("Credit Facility") (the “Guarantor Group”). We were in compliance with all covenants related to the Notes as of April 30, 2026.
Current wording
On July 16, 2026, we completed the public offering of senior unsecured notes, which consisted of $550 million aggregate principal amount of 4.950% Senior Notes due August 1, 2031 (the "2031 Notes") and $650 million aggregate principal amount of 5.400% Senior Notes due August 1, 2036 (the "2036 Notes"). We used the net proceeds from the offering to repay outstanding borrowings under our Credit Facility. Interest on the 2031 Notes and 2036 Notes is
Previous wording
Certain statements in this report constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained herein that are not clearly historical in nature may be forward-looking and the words “anticipate,” “believe,” “expect,” “estimate” and similar expressions are generally intended to identify forward-looking statements. Any forward-looking statement contained herein, in press releases, written statements or other documents filed with the Securities and Exchange Commission or in communications and discussions with investors and analysts in the normal course of business through meetings, phone calls and conference calls, concerning our operations, economic performance and financial condition are subject to risks, uncertainties and contingencies. We have based these forward-looking statements on our current expectations and projections about future events. All forward-looking statements involve risks and uncertainties, many of which are beyond our control, which may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. Also, forward-looking statements are based upon management’s estimates of fair values and of future
Current wording
Certain statements in this report constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained herein that are not clearly historical in nature may be forward-looking and the words “anticipate,” “believe,” “expect,” “estimate” and similar expressions are generally intended to identify forward-looking statements. Any forward-looking statement contained herein, in press releases, written statements or other documents filed with the Securities and Exchange Commission or in communications and discussions with investors and analysts in the normal course of business through meetings, phone calls and conference calls, concerning our operations, economic performance and financial condition are subject to risks, uncertainties and contingencies. We have based these forward-looking statements on our current expectations and projections about future events. All forward-looking statements involve risks and uncertainties, many of which are beyond our control, which may cause actual results, performance or achievements to differ materially from anticipated results, performance or achievements. Also, forward-looking statements are based upon management’s estimates of fair values and of future costs, using currently available information. Therefore, actual results may differ materially from those expressed in or implied by those forward-looking statements. Factors that could cause such differences include, among others:
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
primarily driven by the previously mentioned SG&A expense efficiencies and the previously mentioned improved gross profit margin. The increase in the FSG's operating income as a percentage of net sales principally reflects the previously mentioned improved gross profit margin.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
gross profit margin principally reflects a more favorable product mix within its aftermarket replacement parts product line. Total new product research and development expenses included within our consolidated cost of sales were $36.4 million in the second quarter of fiscal 2026, up from $28.7 million in the second quarter of fiscal 2025.
Previous report — wording carried elsewhere
Net cash used in investing activities totaled $851.0 million in the first six months of fiscal 2026 and related primarily to acquisitions of $821.3 million, capital expenditures of $31.5
Previous report — wording carried elsewhere
costs, using currently available information. Therefore, actual results may differ materially from those expressed in or implied by those forward-looking statements. Factors that could cause such differences include, among others: