Company: HEI-A
Filing Date: 2025-08-27
Form Type: 10-Q
Source: 0000046619-25-000062
Chunk: 74

Company: HEICO CORP
Filing Date: 2025-08-27
Form: 10-Q
Item: Item 2
Chunk 74
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 in operating income of the ETG principally reflects the previously mentioned net sales growth, partially offset by a $3.6 million increase in performance-based compensation expense.

Our consolidated operating income as a percentage of net sales improved to 23.1% in the third quarter of fiscal 2025, up from 21.8% in the third quarter of fiscal 2024.  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 24.7% in the third quarter of fiscal 2025, up from 22.5% in the third quarter of fiscal 2024, partially offset by a decrease in the ETG's operating income as a percentage of net sales to 22.8% in the third quarter of fiscal 2025, as compared to 23.5% in the third quarter of fiscal 2024.  The increase in the FSG's operating 

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income as a percentage of net sales principally 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 reflecting the previously mentioned SG&A expense efficiencies.  The decrease in the ETG's operating income as a percentage of net sales principally reflects a .4% impact from higher SG&A expenses as a percentage of net sales, mainly from the previously mentioned increase in performance-based compensation expense, as well as the impact from the previously mentioned lower gross profit margin.

Interest Expense

Interest expense decreased to $31.7 million in the third quarter of fiscal 2025, down from $36.8 million in the third quarter of fiscal 2024.  The decrease in interest expense was principally due to a lower weighted-average interest rate and a decrease in the amount of outstanding debt on our revolving credit facility.

Other Income

Other income in the third quarter of fiscal 2025 and 2024 was not material.

Income Tax Expense

Our effective tax rate increased to 18.9% in the third quarter of fiscal 2025, up from 18.0% in the third quarter of fiscal 2024.  The increase in our effective tax rate principally reflects the prior year favorable impact from the reversal of accrued contingent consideration associated with a subsidiary acquired by the ETG in a stock acquisition and a larger income tax credit for qualified research and development activities recognized in the third quarter of fiscal 2024.

Net Income Attributable to Noncontrolling Inter