Company: HEI-A
Filing Date: 2025-05-29
Form Type: 10-Q
Source: 0000046619-25-000046
Chunk: 50

Company: HEICO CORP
Filing Date: 2025-05-29
Form: 10-Q
Item: Item 8
Chunk 50
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.  The increase in the FSG's gross profit margin principally reflects the previously mentioned net sales growth across all of its product lines, inclusive of a more favorable mix of defense products within its specialty products product line.  Total new product research and development expenses included within our consolidated cost of sales were $56.3 million in the first six months of fiscal 2025, up from $53.0 million in the first six months of fiscal 2024.

Our consolidated selling, general and administrative ("SG&A") expenses were $368.5 million in the first six months of fiscal 2025, as compared to $329.2 million in the first six months of fiscal 2024.  The increase in consolidated SG&A expenses reflects $12.6 million attributable to our fiscal 2024 and 2025 acquisitions, $12.1 million attributable to changes in the estimated fair value of accrued contingent consideration, $8.9 million of higher performance-based compensation expense and $8.5 million of higher other selling expenses, partially offset by a $2.8 million decrease in other general administrative expenses.

Our consolidated SG&A expenses as a percentage of net sales improved to 17.3% in the first six months of fiscal 2025, down from 17.8% in the first six months of fiscal 2024.  The decrease in consolidated SG&A expenses as a percentage of net sales principally reflects efficiencies realized from the previously mentioned net sales growth, partially offset by a .6% 

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impact from the previously mentioned changes in the estimated fair value of accrued contingent consideration.

Operating Income

Our consolidated operating income increased by 22% to a record $475.0 million in the first six months of fiscal 2025, up from $389.4 million in the first six months of fiscal 2024.  The increase in consolidated operating income principally reflects a $66.1 million increase (a 23% increase) to a record $351.1 million in operating income of the FSG and a $23.7 million increase (an 18% increase) to a record $154.3 million in operating income of the ETG.  The increase in operating income of the FSG principally reflects the previously mentioned net sales growth, improved gross profit margin and SG&A expense efficiencies realized from the net sales growth, partially offset by a $12.5 million impact from changes in the estimated fair value of accrued contingent consideration.  The increase in operating income of the ETG principally reflects the