Company: HEI-A
Filing Date: 2025-05-29
Form Type: 10-Q
Source: 0000046619-25-000046
Chunk: 69

Company: HEICO CORP
Filing Date: 2025-05-29
Form: 10-Q
Item: Item 2
Chunk 69
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 and Operating Expenses

Our consolidated gross profit margin improved to 39.9% in the second quarter of fiscal 2025, up from 38.9% in the second quarter of fiscal 2024 principally reflecting a 2.1% increase in the FSG’s gross profit margin, partially offset by a 1.4% decrease in the ETG's gross profit margin.  The increase in the FSG's gross profit margin principally reflects the previously mentioned higher net sales within our repair and overhaul parts and services product line and higher net sales and a more favorable mix of defense products within our specialty products product line.  The decrease in the ETG's gross profit margin principally reflects the previously mentioned decrease in net sales of defense and medical products, partially offset by the higher net sales of space products.  Total new product research and development expenses included within our consolidated cost of sales were $28.7 million in the second quarter of fiscal 2025, up from $27.9 million in the second quarter of fiscal 2024.

Our consolidated SG&A expenses were $189.7 million in the second quarter of fiscal 2025, as compared to $162.6 million in the second quarter of fiscal 2024.  The increase in consolidated SG&A expenses principally reflects $9.9 million attributable to changes in the estimated fair value of accrued contingent consideration, $8.6 million attributable to our fiscal 2025 and 2024 acquisitions, $5.6 million of higher performance-based compensation expense, and $4.1 million of higher other selling expenses.

Our consolidated SG&A expenses as a percentage of net sales was 17.3% in the second quarter of fiscal 2025, as compared to 17.0% in the second quarter of fiscal 2024.  The increase in consolidated SG&A expenses as a percentage of net sales principally reflects a 1.0% impact from the previously mentioned changes in the estimated fair value of accrued contingent consideration, partially offset by efficiencies realized from the previously mentioned net sales growth.

Operating Income

Our consolidated operating income increased by 19% to a record $248.2 million in the second quarter of fiscal 2025, up from $209.2 million in the second quarter of fiscal 2024.  The increase in consolidated operating income principally reflects a $36.1 million increase (a 24% increase) to a record $185.0 million in operating income of the FSG and a $2.6 million increase (a