Company: HEI-A
Filing Date: 2025-05-29
Form Type: 10-Q
Source: 0000046619-25-000046
Chunk: 67

Company: HEICO CORP
Filing Date: 2025-05-29
Form: 10-Q
Item: Item 2
Chunk 67
---
 sales principally reflects an increase in the ETG's operating income as a percentage of net sales to 23.0% in the first six months of fiscal 2025, up from 21.6% in the first six months of fiscal 2024 and an increase in the FSG’s operating income as a percentage of net sales to 23.7% in the first six months of fiscal 2025, up from 22.5% in the first six months of fiscal 2024.  The increase in the ETG's operating income as a percentage of net sales principally reflects a 1.6% 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.  The increase in the FSG's operating income as a percentage of net sales principally reflects the previously mentioned improved gross profit margin.

Interest Expense

Interest expense decreased to $65.3 million in the first six months of fiscal 2025, down from $77.1 million in the first six 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 borrowings outstanding under our revolving credit facility. 

Other Income

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

Income Tax Expense

Our effective tax rate decreased to 14.4% in the first six months of fiscal 2025, down from 16.9% in the first six 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 

28

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 $27.3 million in the first six months of fiscal 2025, as compared to $22.5 million in the first six months of fiscal 2024.  The increase in