Company: HEI-A
Filing Date: 2025-08-27
Form Type: 10-Q
Source: 0000046619-25-000062
Chunk: 55

Company: HEICO CORP
Filing Date: 2025-08-27
Form: 10-Q
Item: Item 8
Chunk 55
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 sales principally reflects an increase in the FSG’s operating income as a percentage of net sales to 24.1% in the first nine months of fiscal 2025, up from 22.5% in the first nine months of fiscal 2024 and an increase in the ETG's operating income as a percentage of net sales to 22.9% in the first nine months of fiscal 2025, up from 22.3% in the first nine months of fiscal 2024.  The increase in the FSG's operating income as a percentage of net sales principally reflects the previously mentioned improved gross profit margin.  The increase in the ETG's operating income as a percentage of net sales principally reflects a .9% impact from lower SG&A expenses as a percentage of net sales, mainly due to the previously mentioned efficiencies realized from the net sales growth, partially offset by the previously mentioned lower gross profit margin.

Interest Expense

Interest expense decreased to $97.0 million in the first nine months of fiscal 2025, down from $113.9 million in the first nine months of fiscal 2024.  The decrease in interest expense was principally due to a decrease in the amount of outstanding debt as well as a lower weighted-average interest rate on outstanding borrowings under our revolving credit facility.

Other Income

Other income in the first nine months of fiscal 2025 and 2024 was not material.

Income Tax Expense

Our effective tax rate decreased to 16.0% in the first nine months of fiscal 2025, down 

31

from 17.3% in the first nine months of fiscal 2024.  The decrease in our effective tax rate principally reflects a larger tax benefit from stock option exercises recognized in the first quarter of fiscal 2025.  We recognized a discrete tax benefit from stock option exercises in the first quarter of fiscal 2025 and 2024 of $27.2 million and $13.6 million, respectively.

Net Income Attributable to Noncontrolling Interests

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 $40.7 million in the first nine months of fiscal 2025, as compared to $33.8 million in the first nine months of fiscal