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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

[X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

        For the fiscal year ended October 31, 2007 or

[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

        For the transition period from ___________________to__________________

                          Commission file number 1-4604

                                HEICO CORPORATION
             (Exact name of registrant as specified in its charter)

                     Florida                                 65-0341002
         (State or other jurisdiction of                 (I.R.S. Employer
         incorporation or organization)                 Identification No.)

      3000 Taft Street, Hollywood, Florida                     33021
    (Address of principal executive offices)                (Zip Code)

                                 (954) 987-4000
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:

   Common Stock, $.01 par value per share         New York Stock Exchange
        Class A Common Stock, $.01                (Name of each exchange
            par value per share                     on which registered)
          (Title of each class)

           Securities registered pursuant to Section 12(g) of the Act:

        Rights to Purchase Series B Junior Participating Preferred Stock
        Rights to Purchase Series C Junior Participating Preferred Stock
                                (Title of class)

        Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

        Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

        Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. Yes [X] No [ ]

        Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X]

        Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

        Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange
Act:

   Large accelerated filer [X] Accelerated filer [ ] Non-accelerated filer [ ]

        The aggregate market value of the voting and non-voting common equity
held by nonaffiliates of the registrant was $761,806,000 based on the closing
price of Common Stock and Class A Common Stock as of April 30, 2007 (the last
business day of the registrant's most recently completed second fiscal quarter)
as reported by the New York Stock Exchange.

        The number of shares outstanding of each of the registrant's classes of
common stock, as of December 20, 2007:

         Common Stock, $.01 par value                   10,538,691 shares
         Class A Common Stock, $.01 par value           15,614,663 shares

                       DOCUMENTS INCORPORATED BY REFERENCE

        Portions of the registrant's definitive proxy statement for the 2008
Annual Meeting of Shareholders are incorporated by reference into Part III.

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                                HEICO CORPORATION
                       INDEX TO ANNUAL REPORT ON FORM 10-K

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PART I
      Item 1.     Business.................................................................................       1
      Item 1A.    Risk Factors.............................................................................      11
      Item 1B.    Unresolved Staff Comments................................................................      15
      Item 2.     Properties...............................................................................      16
      Item 3.     Legal Proceedings........................................................................      16
      Item 4.     Submission of Matters to a Vote of Security Holders......................................      16

PART II
      Item 5.     Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases
                      of Equity Securities.................................................................      17
      Item 6.     Selected Financial Data..................................................................      21
      Item 7.     Management's Discussion and Analysis of Financial Condition and Results of Operations....      22
      Item 7A.    Quantitative and Qualitative Disclosures About Market Risk...............................      37
      Item 8.     Financial Statements and Supplementary Data..............................................      39
      Item 9.     Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.....      75
      Item 9A.    Controls and Procedures..................................................................      75
      Item 9B.    Other Information........................................................................      75

PART III
      Item 10.    Directors, Executive Officers and Corporate Governance...................................      76
      Item 11.    Executive Compensation...................................................................      76
      Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
                      Matters..............................................................................      76
      Item 13.    Certain Relationships and Related Transactions, and Director Independence................      76
      Item 14.    Principal Accountant Fees and Services...................................................      76

PART IV
      Item 15.    Exhibits and Financial Statement Schedules...............................................      77

SIGNATURES...............................................................................................        82
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                                     PART I

ITEM 1.    BUSINESS

THE COMPANY

        HEICO Corporation through its subsidiaries (collectively, "HEICO," "we,"
"us," "our," or the "Company") believes it is the world's largest manufacturer
of Federal Aviation Administration ("FAA")-approved jet engine and aircraft
component replacement parts, other than the original equipment manufacturers
("OEMs") and their subcontractors. HEICO also believes it is a leading
manufacturer of various types of electronic equipment for the aviation, defense,
space, medical, telecommunications, and electronics industries.

        Our business is comprised of two operating segments:

        The Flight Support Group. Our Flight Support Group, consisting of HEICO
Aerospace Holdings Corp. ("HEICO Aerospace") and its subsidiaries, accounted for
76%, 71% and 71% of our net sales in fiscal 2007, 2006, and 2005, respectively.
This Group uses proprietary technology to design and manufacture jet engine and
aircraft component replacement parts for sale at lower prices than those
manufactured by OEMs. These parts are approved by the FAA and are the functional
equivalent of parts sold by OEMs. In addition, the Flight Support Group repairs
and distributes jet engine and aircraft components, avionics, and instruments
for domestic and foreign commercial air carriers and aircraft repair companies
as well as military and business aircraft operators; and manufactures thermal
insulation products and other component parts primarily for aerospace, defense,
and commercial applications.

        The Flight Support Group competes with the leading industry OEMs and, to
a lesser extent, with a number of smaller, independent parts distributors.
Historically, the three principal jet engine OEMs, General Electric (including
CFM International), Pratt & Whitney, and Rolls Royce, have been the sole source
of substantially all jet engine replacement parts for their jet engines. Other
OEMs have been the sole source of replacement parts for their aircraft component
parts. While we believe that we currently supply less than 2% of the market for
jet engine and aircraft component replacement parts, we have consistently been
adding new products to our line and currently hold Parts Manufacturer Approvals,
which we refer to as "PMAs," for over 6,000 jet engine and aircraft component
replacement parts.

        We believe that, based on our competitive pricing, reputation for high
quality, short lead time requirements, strong relationships with domestic and
foreign commercial air carriers and repair stations (companies that overhaul
aircraft engines and/or components), strategic relationships with Lufthansa and
other major airlines, and successful track record of receiving PMAs from the
FAA, we are uniquely positioned to continue to increase our product lines and
gain market share.

        The Electronic Technologies Group. Our Electronic Technologies Group,
consisting of HEICO Electronic Technologies Corp. and its subsidiaries,
accounted for 24%, 29% and 29% of our net sales in fiscal 2007, 2006, and 2005,
respectively. Through our Electronic Technologies Group, which derived
approximately 41% of its sales in fiscal 2007 from the sale of products and
services to U.S. and foreign military agencies, we design, manufacture, and sell
various types of electronic, microwave, and electro-optical products, including
infrared simulation and test equipment, laser rangefinder receivers, electrical
power supplies, back-up power supplies, electromagnetic interference and radio
frequency interference shielding, high power capacitor charging power supplies,
amplifiers, photodetectors, amplifier modules, flash lamp drivers, laser diode
drivers, arc lamp power supplies, custom power supply designs, cable assemblies,
high voltage interconnection devices and wire, high voltage energy generators,
high

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frequency power delivery systems, and high-speed interface products that link
devices such as telemetry receivers, digital cameras, high resolution scanners,
simulation systems, and test systems to almost any computer.

        In October 1997, we entered into a strategic alliance with Lufthansa.
Lufthansa is the world's largest independent provider of engineering and
maintenance services for aircraft components and jet engines and supports over
200 airlines, governments, and other customers. As part of this strategic
alliance, Lufthansa has invested approximately $50 million in our company to
acquire and maintain a 20% minority interest in HEICO Aerospace and to partially
fund the accelerated development of additional FAA-approved replacement parts
for jet engines and aircraft components over the subsequent four years pursuant
to a research and development cooperation agreement. This strategic alliance has
enabled us to expand domestically and internationally by enhancing our ability
to (i) identify key jet engine and aircraft component replacement parts with
significant profit potential by utilizing Lufthansa's extensive operating data
on engine and component parts; (ii) introduce those parts throughout the world
in an efficient manner due to Lufthansa's testing and diagnostic resources; and
(iii) broaden our customer base by capitalizing on Lufthansa's established
relationships and alliances within the airline industry.

        In March 2001, we entered into a joint venture with American Airlines,
one of the world's largest airlines, to develop, design, and sell FAA-approved
jet engine and aircraft component replacement parts through HEICO Aerospace. The
joint venture is partly owned by American Airlines. American Airlines and HEICO
Aerospace have agreed to cooperate regarding technical services and marketing
support on a worldwide basis. We have also entered into several strategic
relationships with other leading airlines, such as United Airlines (May 2002),
Delta Air Lines (February 2003), Air Canada (March 2003), Japan Airlines (March
2004), and British Airways (May 2007). These relationships accelerate HEICO's
efforts in developing a broad range of jet engine and aircraft component
replacement parts for FAA approval. Each of the aforementioned airlines purchase
these newly developed parts, and most of HEICO Aerospace's current FAA-approved
parts product line, on an exclusive basis from HEICO Aerospace.

        In February 2006, we entered into a Joint Cooperation Agreement with
China Aviation Import and Export Group Corporation ("CASGC") of the Peoples
Republic of China to promote HEICO Aerospace FAA-approved aircraft and engine
replacement products in China. CASGC is a state-owned company, which is a
comprehensive service provider for aviation supplies, primarily engaged in the
import and export of aviation-related products in China including aircraft
engines, spares, ground support, and safety equipment. CASGC's business scope
also covers leasing maintenance, component repair and overhaul, consignment
stores, manufacturing, and training.

        We have continuously operated in the aerospace industry for more than 50
years. Since assuming control in 1990, our current management has achieved
significant sales and profit growth through a broadened line of product
offerings, an expanded customer base, increased research and development
expenditures, and the completion of a number of acquisitions. As a result of
internal growth and acquisitions, our net sales from continuing operations have
grown from $26.2 million in fiscal 1990 to $507.9 million in fiscal 2007, a
compound annual growth rate of approximately 19%. During the same period, we
improved our net income from continuing operations from $2.0 million to $39.0
million, representing a compound annual growth rate of approximately 19%.

FLIGHT SUPPORT GROUP

        The Flight Support Group, headquartered in Hollywood, Florida, serves a
broad spectrum of the aviation industry, including (i) commercial airlines and
air cargo carriers, (ii) repair and overhaul facilities, (iii) OEMs, and (iv)
U.S. and foreign governments.

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        Jet engine and aircraft component replacement parts can be categorized
by their ongoing ability to be repaired and returned to service. The general
categories in which we participate are as follows: (i) rotable, (ii) repairable,
and (iii) expendable. A rotable is a part which is removed periodically as
dictated by an operator's maintenance procedures or on an as needed basis and is
typically repaired or overhauled and re-used an indefinite number of times. An
important subset of rotables is "life limited" parts. A life limited rotable has
a designated number of allowable flight hours and/or cycles (one take-off and
landing generally constitutes one cycle) after which it is rendered unusable. A
repairable is similar to a rotable except that it can only be repaired a limited
number of times before it must be discarded. An expendable is generally a part
which is used and not thereafter repaired for further use.

        Jet engine and aircraft component replacement parts are classified
within the industry as (i) factory-new, (ii) new surplus, (iii) overhauled, (iv)
repairable, and (v) as removed. A factory-new or new surplus part is one that
has never been installed or used. Factory-new parts are purchased from
FAA-approved manufacturers (such as HEICO or OEMs) or their authorized
distributors. New surplus parts are purchased from excess stock of airlines,
repair facilities, or other redistributors. An overhauled part is one that has
been completely repaired and inspected by a licensed repair facility such as
ours. An aircraft spare part is classified as "repairable" if it can be repaired
by a licensed repair facility under applicable regulations. A part may also be
classified as "repairable" if it can be removed by the operator from an aircraft
or jet engine while operating under an approved maintenance program and is
airworthy and meets any manufacturer or time and cycle restrictions applicable
to the part. A "factory-new," "new surplus," "overhauled," or "repairable" part
designation indicates that the part can be immediately utilized on an aircraft.
A part in "as removed" condition requires inspection and possibly functional
testing, repair, or overhaul by a licensed facility prior to being returned to
service in an aircraft.

        Factory-New Jet Engine and Aircraft Component Replacement Parts. The
principal business of the Flight Support Group is the research and development,
design, manufacture, and sale of FAA-approved replacement parts that are sold to
domestic and foreign commercial air carriers and aircraft repair and overhaul
companies. Our principal competitors are Pratt & Whitney, a division of United
Technologies Corporation, and General Electric Company, including its CFM
International joint venture. The Flight Support Group's factory-new replacement
parts include various jet engine and aircraft component replacement parts. A key
element of our growth strategy is the continued design and development of an
increasing number of Parts Manufacturer Approval ("PMA") replacement parts in
order to further penetrate our existing customer base and obtain new customers.
We select the jet engine and aircraft component replacement parts to design and
manufacture through a selection process which analyzes industry information to
determine which replacement parts are suitable candidates. As part of
Lufthansa's investment in the Flight Support Group, Lufthansa has the right to
select 50% of the parts for which we will seek PMAs, provided that such parts
are technologically and economically feasible and substantially comparable with
the profitability of our other PMA parts.

        Repair and Overhaul Services. The Flight Support Group provides repair
and overhaul services on selected jet engine and aircraft component parts, as
well as on avionics, instruments, composites, and flight surfaces of commercial
aircraft. The Flight Support Group also provides repair and overhaul services to
military aircraft operators and aircraft repair and overhaul companies. Our
repair and overhaul operations require a high level of expertise, advanced
technology, and sophisticated equipment. Services include the repair,
refurbishment, and overhaul of numerous accessories and parts mounted on gas
turbine engines and airframes. Components overhauled include fuel pumps,
generators, fuel controls, pneumatic valves, starters and actuators, turbo
compressors and constant speed drives, hydraulic pumps, valves and actuators,
composite flight controls, electro-mechanical equipment, and auxiliary power
unit accessories. The Flight Support Group also provides commercial airlines,
regional operators, asset management companies, and Maintenance, Repair and
Overhaul ("MRO") providers with high quality and cost effective niche accessory
component exchange services as an alternative to OEMs' spares services.

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        Furthermore, the Flight Support Group repairs avionics and navigation
systems as well as subcomponents and other instruments utilized in military and
commercial aircraft. Our customers include the United States government, foreign
military agencies, and both domestic and foreign commercial airlines.

        Distribution. The Flight Support Group distributes FAA-approved parts
including hydraulic, pneumatic, mechanical, and electro-mechanical components
for the commercial, regional, and general aviation markets.

        Manufacture of Specialty Aircraft/Defense Related Parts and
Subcontracting for OEMs. The Flight Support Group manufactures thermal
insulation blankets primarily for aerospace, defense, and commercial
applications. The Flight Support Group also manufactures specialty components
for sale as a subcontractor for aerospace and industrial original equipment
manufacturers and the United States government.

        FAA Approvals and Product Design. Non-OEM manufacturers of jet engine
replacement parts must receive a Parts Manufacturer Approval ("PMA") from the
FAA to sell the replacement part. The PMA approval process includes the
submission of sample parts, drawings, and testing data to one of the FAA's
Aircraft Certification Offices where the submitted data are analyzed. We believe
that an applicant's ability to successfully complete the PMA process is limited
by several factors, including (i) the agency's confidence level in the
applicant, (ii) the complexity of the part, (iii) the volume of PMAs being
filed, and (iv) the resources available to the FAA. We also believe that
companies such as HEICO that have demonstrated their manufacturing capabilities
and established favorable track records with the FAA generally receive a faster
turnaround time in the processing of PMA applications. Finally, we believe that
the PMA process creates a significant barrier to entry in this market niche
through both its technical demands and its limits on the rate at which
competitors can bring products to market.

        As part of our growth strategy, we have continued to increase our
research and development activities. Research and development expenditures by
the Flight Support Group, which were approximately $300,000 in fiscal 1991,
increased to approximately $10.7 million in fiscal 2007, $10.6 million in fiscal
2006, and $8.8 million in 2005. We believe that our Flight Support Group's
research and development capabilities are a significant component of our
historical success and an integral part of our growth strategy.

        Our expanded research and development activities have included
development of more complex jet engine and aircraft component replacement parts.
We now have approximately 4,000 parts approved by the FAA that are actively
being marketed and have cumulative FAA approvals for over 6,000 parts. We
believe the development and subsequent sale of PMA parts represents a
significant long-term market opportunity. In fiscal 2007, the FAA granted us
PMAs for approximately 400 new parts (excluding acquired PMAs); however, no
assurance can be given that the FAA will continue to grant PMAs or that we will
achieve acceptable levels of net sales and gross profits on such parts in the
future.

        We benefit from our proprietary rights relating to certain design,
engineering, and manufacturing processes and repair and overhaul procedures.
Customers often rely on us to provide initial and additional components, as well
as to redesign, re-engineer, replace, or repair and provide overhaul services on
such aircraft components at every stage of their useful lives. In addition, for
some products, our unique manufacturing capabilities are required by the
customer's specifications or designs, thereby necessitating reliance on us for
production of such designed products.

        We have no patents for the proprietary techniques, including software
and manufacturing expertise, we have developed to manufacture jet engine and
aircraft component replacement parts and

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instead, we rely on trade secret protection. Although our proprietary techniques
and software and manufacturing expertise are subject to misappropriation or
obsolescence, we believe that we take appropriate measures to prevent
misappropriation or obsolescence from occurring by developing new techniques and
improving existing methods and processes, which we will continue on an ongoing
basis as dictated by the technological needs of our business.

ELECTRONIC TECHNOLOGIES GROUP

        Much of our Electronic Technologies Group's strategy is centered around
producing equipment that helps the U.S. military and allied foreign military
agencies conduct stand-off operations from greater distances. Our activities in
this regard are focused on products that are placed in airborne, vehicle-based,
or handheld targeting systems as well as in providing equipment used to develop,
test, and calibrate such systems.

        Electro-Optical Infrared Simulation and Test Equipment. The Electronic
Technologies Group believes it is a leading international designer and
manufacturer of niche state-of-the-art simulation, testing, and calibration
equipment used in the development of missile seeking technology, airborne
targeting and reconnaissance systems, shipboard targeting and reconnaissance
systems, space-based sensors as well as ground vehicle-based systems. These
products include infrared scene projector equipment, such as our MIRAGE IR Scene
Simulator, high precision blackbody sources, software, and integrated
calibration systems.

        Simulation equipment allows the U.S. government and allied foreign
military to save money on missile testing as it allows infrared-based missiles
to be tested on a multi-axis, rotating table instead of requiring the launch of
a complete missile. In addition, several large military prime contractors have
elected to purchase such equipment from us instead of maintaining internal staff
to do so because we can offer a more cost-effective solution. Our customers
include major U.S. Department of Defense weapons laboratories and defense prime
contractors, such as Lockheed Martin, Northrop Grumman, and Boeing.

        Electro-Optical Laser Products. The Electronic Technologies Group
believes it is a leading designer and maker of Laser Rangefinder Receivers and
other photodetectors used in airborne, vehicular, and handheld targeting systems
manufactured by major prime military contractors, such as Northrop Grumman and
Lockheed Martin. Most of our Rangefinder Receiver product offering consists of
complex and patented products which detect reflected light from laser targeting
systems and allow the systems to confirm target accuracy and calculate target
distances prior to discharging a weapon system. These products are also used in
laser eye surgery systems for tracking ocular movement.

        Electro-Optical, Microwave, and Other Power Equipment. The Electronic
Technologies Group produces power supplies, amplifiers, and flash lamp drivers
used in laser systems for military, medical, and other applications that are
sometimes utilized with our Rangefinder Receivers. We also produce emergency
back-up power supplies and batteries used on commercial aircraft and business
jets for services such as emergency exit lighting, emergency fuel shut-off,
power door assists, cockpit voice recorders, and flight computers. We offer
custom or standard designs that solve challenging OEM requirements and meet
stringent agency safety and emissions requirements. Our power electronics
products include capacitor charger power supplies, laser diode drivers, arc lamp
power supplies, and custom power supply designs.

        Our microwave products are used in satellites and electronic warfare
systems. These products, which include isolators, bias tees, circulators,
latching ferrite switches, and waveguide adapters, are used in satellites to
control or direct energy according to operator needs. As satellites are
frequently used as sensors for stand-off warfare, we believe this product line
further supports our goal of increasing our

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activity in the stand-off market. We believe we are a leading supplier of the
niche products which we design and make for this market, a market that includes
commercial satellites. Our customers for these products include satellite
makers, such as Space Systems/Loral, Boeing, and Raytheon.

        Electromagnetic and Radio Interference Shielding. The Electronic
Technologies Group designs and manufactures shielding used to prevent
electromagnetic energy and radio frequencies from interfering with computers,
telecommunication devices, avionics, weapons systems, and other electronic
equipment. Our products include a patented line of shielding applied directly to
circuit boards and a line of gasket-type shielding applied to computers and
other electronic equipment. Our customers consist essentially of medical,
electronic, telecommunication, and defense equipment producers.

        High-Speed Interface Products. The Electronic Technologies Group designs
and manufactures advanced high-technology, high-speed interface products
utilized in homeland security, defense, medical research, astronomical, and
other applications across numerous industries.

        High Voltage Interconnection Devices. The Electronic Technologies Group
designs and manufactures high and very high voltage interconnection devices,
cable assemblies, and wire for the medical equipment, defense, and other
industrial markets. Among others, our products are utilized in aircraft missile
defense, fighter pilot helmet displays, avionic systems, medical applications,
wireless communications, as well as industrial applications including high
voltage test equipment and underwater monitoring systems.

        High Voltage Advanced Power Electronics. The Electronic Technologies
Group designs and manufactures a patented line of high voltage energy generators
for medical, baggage inspection, and industrial imaging systems. In addition, we
offer a patented line of high frequency power delivery systems for the
commercial sign industry.

FINANCIAL INFORMATION ABOUT OPERATING SEGMENTS AND GEOGRAPHIC AREAS

        See Note 14, Operating Segments, of the Notes to Consolidated Financial
Statements for financial information by operating segment and by geographic
areas.

SALES, MARKETING, AND CUSTOMERS

        Each of our operating segments independently conducts sales and
marketing efforts directed at their respective customers and industries and, in
some cases, collaborates with other operating divisions and subsidiaries within
its group for cross-marketing efforts. Sales and marketing efforts are conducted
primarily by in-house personnel and, to a lesser extent, by independent
manufacturer's representatives. Generally, the in-house sales personnel receive
a base salary plus commission and manufacturer's representatives receive a
commission on sales.

        We believe that direct relationships are crucial to establishing and
maintaining a strong customer base and, accordingly, our senior management is
actively involved in our marketing activities, particularly with established
customers. We are also a member of various trade and business organizations
related to the commercial aviation industry, such as the Aerospace Industries
Association, which we refer to as AIA, the leading trade association
representing the nation's manufacturers of commercial, military, and business
aircraft, aircraft engines, and related components and equipment. Due in large
part to our established industry presence, we enjoy strong customer relations,
name recognition, and repeat business.

        We sell our products to a broad customer base consisting of domestic and
foreign commercial and cargo airlines, repair and overhaul facilities, other
aftermarket suppliers of aircraft engine and airframe

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materials, OEMs, domestic and foreign military units, electronic manufacturing
services companies, manufacturers for the defense industry and
telecommunications companies as well as medical, scientific, and industrial
companies. No one customer accounted for sales of 10% or more of total
consolidated sales from continuing operations during any of the last three
fiscal years. Net sales to our five largest customers accounted for
approximately 21% of total net sales during the year ended October 31, 2007.

COMPETITION

        The aerospace product and service industry is characterized by intense
competition and some of our competitors have substantially greater name
recognition, inventories, complementary product and service offerings,
financial, marketing, and other resources than we do. As a result, such
competitors may be able to respond more quickly to customer requirements than we
can. Moreover, smaller competitors may be in a position to offer more attractive
pricing as a result of lower labor costs and other factors.

        Our jet engine and aircraft component replacement parts business
competes primarily with Pratt & Whitney and General Electric. The competition is
principally based on price and service inasmuch as our parts are
interchangeable. With respect to other aerospace products and services sold by
the Flight Support Group, we compete with both the leading jet engine OEMs and a
large number of machining, fabrication, and repair companies, some of which have
greater financial and other resources than we do. Competition is based mainly on
price, product performance, service, and technical capability.

        Competition for the repair and overhaul of jet engine and aircraft
components comes from three principal sources: OEMs, major commercial airlines,
and other independent service companies. Some of these competitors have greater
financial and other resources than we do. Some major commercial airlines own and
operate their own service centers and sell repair and overhaul services to other
aircraft operators. Foreign airlines that provide repair and overhaul services
typically provide these services for their own aircraft components and for third
parties. OEMs also maintain service centers that provide repair and overhaul
services for the components they manufacture. Other independent service
organizations also compete for the repair and overhaul business of other users
of aircraft components. We believe that the principal competitive factors in the
repair and overhaul market are quality, turnaround time, overall customer
service, and price.

        Our Electronic Technologies Group competes with several large and small
domestic and foreign competitors, some of which have greater financial and other
resources than we do. The market for our electronic products are niche markets
with several competitors with competition based mainly on design, technology,
quality, price, and customer satisfaction.

RAW MATERIALS

        We purchase a variety of raw materials, primarily consisting of high
temperature alloy sheet metal and castings, forgings, pre-plated steel,
pre-plated phosphor bronze, and electrical components from various vendors. The
materials used by our operations are generally available from a number of
sources and in sufficient quantities to meet current requirements subject to
normal lead times.

BACKLOG

        Our total backlog of unshipped orders was $106.3 million as of October
31, 2007 compared to $80.0 million as of October 31, 2006. The Flight Support
Group's backlog of unshipped orders was $43.6 million as of October 31, 2007 as
compared to $34.4 million as of October 31, 2006. This backlog excludes
forecasted shipments for certain contracts of the Flight Support Group pursuant
to which customers provide only estimated annual usage and not firm purchase
orders. The increase in the Flight

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Support Group's backlog is primarily related to continued strong demand for its
aftermarket replacement parts and repair and overhaul services, as well as
orders of new products and services. Our backlogs within the Flight Support
Group are typically short-lead in nature with many product orders being received
within the month of shipment. The Electronic Technologies Group's backlog of
unshipped orders was $62.7 million as of October 31, 2007 as compared to $45.6
million as of October 31, 2006. The increase in the Electronic Technologies
Group's backlog is primarily related to orders of new products and services as
well as additional backlogs from fiscal 2007 acquisitions. Substantially the
entire backlog of orders as of October 31, 2007 is expected to be delivered
during fiscal 2008.

GOVERNMENT REGULATION

        The FAA regulates the manufacture, repair, and operation of all aircraft
and aircraft parts operated in the United States. Its regulations are designed
to ensure that all aircraft and aviation equipment are continuously maintained
in proper condition to ensure safe operation of the aircraft. Similar rules
apply in other countries. All aircraft must be maintained under a continuous
condition monitoring program and must periodically undergo thorough inspection
and maintenance. The inspection, maintenance, and repair procedures for the
various types of aircraft and equipment are prescribed by regulatory authorities
and can be performed only by certified repair facilities utilizing certified
technicians. Certification and conformance is required prior to installation of
a part on an aircraft. Aircraft operators must maintain logs concerning the
utilization and condition of aircraft engines, life-limited engine parts, and
airframes. In addition, the FAA requires that various maintenance routines be
performed on aircraft engines, some engine parts, and airframes at regular
intervals based on cycles or flight time. Engine maintenance must also be
performed upon the occurrence of certain events, such as foreign object damage
in an aircraft engine or the replacement of life-limited engine parts. Such
maintenance usually requires that an aircraft engine be taken out of service.
Our operations may in the future be subject to new and more stringent regulatory
requirements. In that regard, we closely monitor the FAA and industry trade
groups in an attempt to understand how possible future regulations might impact
us.

        There has been no material adverse effect to our consolidated financial
statements as a result of these government regulations.

ENVIRONMENTAL REGULATION

        Our operations are subject to extensive, and frequently changing,
federal, state, and local environmental laws and substantial related regulation
by government agencies, including the Environmental Protection Agency. Among
other matters, these regulatory authorities impose requirements that regulate
the operation, handling, transportation, and disposal of hazardous materials,
the health and safety of workers, and require us to obtain and maintain licenses
and permits in connection with our operations. This extensive regulatory
framework imposes significant compliance burdens and risks on us.
Notwithstanding these burdens, we believe that we are in material compliance
with all federal, state, and local laws and regulations governing our
operations.

OTHER REGULATION

        We are also subject to a variety of other regulations including
work-related and community safety laws. The Occupational Safety and Health Act
of 1970 mandates general requirements for safe workplaces for all employees and
established the Occupational Safety and Health Administration ("OSHA") in the
Department of Labor. In particular, OSHA provides special procedures and
measures for the handling of some hazardous and toxic substances. In addition,
specific safety standards have been promulgated for workplaces engaged in the
treatment, disposal, or storage of hazardous waste.

                                        8
<PAGE>

Requirements under state law, in some circumstances, may mandate additional
measures for facilities handling materials specified as extremely dangerous. We
believe that our operations are in material compliance with OSHA's health and
safety requirements.

INSURANCE

        We are a named insured under policies which include the following
coverage: (i) product liability, including grounding; (ii) personal property,
inventory, and business income at our facilities; (iii) general liability
coverage; (iv) employee benefit liability; (v) international liability and
automobile liability; (vi) umbrella liability coverage; and (vii) various other
activities or items subject to certain limits and deductibles. We believe that
our insurance coverage is adequate to insure against the various liability risks
of our business.

EMPLOYEES

        As of October 31, 2007, we had 2,185 full-time and part-time employees,
of whom 1,501 were in the Flight Support Group, 659 were in the Electronic
Technologies Group, and 25 were Corporate. None of our employees is represented
by a union. We believe that we have good relations with our employees.

AVAILABLE INFORMATION

        Our Internet web site address is http://www.heico.com. We make available
free of charge through our web site our annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K, and amendments to those
reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 as soon as reasonably practicable after we electronically
file such material with, or furnish it to, the Securities and Exchange
Commission ("SEC"). These materials are also available free of charge on the
SEC's website at http://www.sec.gov. The information on or obtainable through
our web site is not incorporated into this annual report on Form 10-K.

        We have adopted a code of ethics that applies to our principal executive
officer, principal financial officer, principal accounting officer, or
controller and other persons performing similar functions. The code of ethics is
located on our web site at http://www.heico.com. Any amendments to or waivers
from a provision of this code of ethics will be posted on the web site. Also
located on the web site are our Corporate Governance Guidelines, Finance/Audit
Committee Charter, Nominating & Corporate Governance Committee Charter, and
Compensation Committee Charter.

        Copies of the above referenced materials will be made available, free of
charge, upon written request to the Corporate Secretary at the Company's
headquarters.

                                        9
<PAGE>

EXECUTIVE OFFICERS OF THE REGISTRANT

        Our executive officers are elected by the Board of Directors at the
first meeting following the annual meeting of shareholders and serve at the
discretion of the Board. The following table sets forth the names, ages of, and
positions and offices held by our executive officers as of December 20, 2007:

<TABLE>
<CAPTION>
                                                                                             DIRECTOR
NAME                     AGE     POSITION(S)                                                  SINCE
----------------------  ----     ------------------------------------------------------     ----------
<S>                      <C>     <C>                                                          <C>
Laurans A. Mendelson     69      Chairman of the Board, President, and Chief                  1989
                                 Executive Officer
Thomas S. Irwin          61      Executive Vice President and Chief Financial                   _
                                 Officer
Eric A. Mendelson        42      Executive Vice President and Director; President and         1992
                                 Chief Executive Officer of HEICO Aerospace Holdings
                                 Corp.
Victor H. Mendelson      40      Executive Vice President, General Counsel, and               1996
                                 Director; President and Chief Executive Officer
                                 of HEICO Electronic Technologies Corp.
William S. Harlow        59      Vice President of Corporate Development                        _
</TABLE>

        Laurans A. Mendelson has served as Chairman of the Board of the Company
since December 1990. He has also served as Chief Executive Officer of the
Company since February 1990 and President of the Company since September 1991.
HEICO Corporation is a member of the Aerospace Industries Association ("AIA") in
Washington D.C., and Mr. Mendelson frequently serves on the Board of Governors
of AIA. He is also Chairman of the Board of Trustees, member of the Executive
Committee, and member of the Society of Mt. Sinai Founders of Mt. Sinai Medical
Center in Miami Beach, Florida. In addition, Mr. Mendelson served as a Trustee
of Columbia University in The City of New York from 1995 to 2001, as well as
Chairman of the Trustees' Audit Committee. Mr. Mendelson currently serves as
Trustee Emeritus of Columbia University. Mr. Mendelson is a Certified Public
Accountant. Laurans A. Mendelson is the father of Eric Mendelson and Victor
Mendelson.

        Thomas S. Irwin has served as Executive Vice President and Chief
Financial Officer of the Company since September 1991, Senior Vice President of
the Company from 1986 to 1991, and Vice President and Treasurer from 1982 to
1986. Mr. Irwin is a Certified Public Accountant and a Trustee of the Greater
Hollywood Chamber of Commerce.

        Eric A. Mendelson has served as Executive Vice President of the Company
since 2001; President and Chief Executive Officer of HEICO Aerospace Holdings
Corp., a subsidiary of the Company, since its formation in 1997; and President
of HEICO Aerospace Corporation since 1993. He also served as Vice President of
the Company from 1992 to 2001; President of HEICO's Jet Avion Corporation, a
wholly owned subsidiary of HEICO Aerospace, from 1993 to 1996; and Jet Avion's
Executive Vice President and Chief Operating Officer from 1991 to 1993. From
1990 to 1991, Mr. Mendelson was Director of Planning and Operations of the
Company. Mr. Mendelson is a co-founder, and, since 1987, has been Managing
Director of Mendelson International Corporation, a private investment company,
which is a shareholder of HEICO. Eric Mendelson is the son of Laurans Mendelson
and the brother of Victor Mendelson.

                                       10
<PAGE>

        Victor H. Mendelson has served as Executive Vice President of the
Company since 2001; President and Chief Executive Officer of HEICO Electronic
Technologies Corp., a subsidiary of the Company, since September 1996; and
General Counsel of the Company since 1993. He served as Vice President of the
Company from 1996 to 2001; Executive Vice President of the Company's former
MediTek Health Corporation subsidiary from 1994; and MediTek Health's Chief
Operating Officer from 1995 until its sale in July 1996. He was the Company's
Associate General Counsel from 1992 until 1993. From 1990 until 1992, he worked
on a consulting basis with the Company, developing and analyzing various
strategic opportunities. Mr. Mendelson is a co-founder, and, since 1987, has
been President of Mendelson International Corporation, a private investment
company, which is a shareholder of HEICO. He is a Trustee of the Greater Miami
Chamber of Commerce, a Trustee of St. Thomas University in Miami Gardens,
Florida, and a Director of the Florida Grand Opera. Victor Mendelson is the son
of Laurans Mendelson and the brother of Eric Mendelson.

        William S. Harlow has served as Vice President of Corporate Development
since 2001 and served as Director of Corporate Development from 1995 to 2001.

ITEM 1A.   RISK FACTORS

        Our business, financial condition, operating results, and cash flows can
be impacted by a number of factors, many of which are beyond our control,
including but not limited to those set forth below and elsewhere in this Annual
Report on Form 10-K, any one of which may cause our actual results to differ
materially from anticipated results:

Our success is highly dependent on the performance of the aviation industry,
which could be impacted by lower demand for commercial air travel or airline
fleet changes causing lower demand for our goods and services.

        Economic factors and passenger security concerns that affect the
aviation industry also affect our business. The aviation industry has
historically been subject to downward cycles from time to time which reduce the
overall demand for jet engine and aircraft component replacement parts and
repair and overhaul services, and such downward cycles result in lower prices
and greater credit risk. These economic factors and passenger security concerns
may have a material adverse effect on our business, financial condition, and
results of operations.

We are subject to governmental regulation and our failure to comply with these
regulations could cause the government to withdraw or revoke our authorizations
and approvals to do business and could subject us to penalties and sanctions
that could harm our business.

        Governmental agencies throughout the world, including the FAA, highly
regulate the manufacture, repair, and overhaul of aircraft parts and
accessories. We include with the replacement parts that we sell to our customers
documentation certifying that each part complies with applicable regulatory
requirements and meets applicable standards of airworthiness established by the
FAA or the equivalent regulatory agencies in other countries. In addition, our
repair and overhaul operations are subject to certification pursuant to
regulations established by the FAA. Specific regulations vary from country to
country, although compliance with FAA requirements generally satisfies
regulatory requirements in other countries. The revocation or suspension of any
of our material authorizations or approvals would have an adverse effect on our
business, financial condition, and results of operations. New and more stringent
government regulations, if adopted and enacted, could have an adverse effect on
our business, financial condition, and results of operations. In addition, some
sales to foreign countries of the equipment manufactured by our Electronic
Technologies Group require approval or licensing from the U.S.

                                       11
<PAGE>

government. Denial of export licenses could reduce our sales to those countries
and could have a material adverse effect on our business.

The retirement of commercial aircraft could reduce our revenues.

        Our Flight Support Group designs, engineers, manufactures, and
distributes jet engine and aircraft component replacement parts and also offers
repairs, refurbishments, and overhauls of jet engine and aircraft components. If
aircraft for which we have replacement parts or supply repair and overhaul
services are retired and there are fewer aircraft that require these parts or
services, our revenues may decline.

Reductions in defense, space or homeland security spending by U.S. and/or
foreign customers could reduce our revenues.

        In fiscal 2007, approximately 41% of the sales of our Electronic
Technologies Group were derived from the sale of products and services to U.S.
and foreign military agencies and their suppliers. A decline in defense, space
or homeland security budgets or additional restrictions imposed by the U.S.
government on sales of products or services to foreign military agencies could
lower sales of our products and services.

Intense competition from existing and new competitors may harm our business.

        We face significant competition in each of our businesses.

     Flight Support Group

        o       For jet engine replacement parts, we compete with the industry's
                leading jet engine OEMs, particularly Pratt & Whitney and
                General Electric.

        o       For the overhaul and repair of jet engine and airframe
                components as well as avionics and navigation systems, we
                compete with:

                -       major commercial airlines, many of which operate their
                        own maintenance and overhaul units;
                -       OEMs, which manufacture, repair, and overhaul their own
                        parts; and
                -       other independent service companies.

    Electronic Technologies Group

        o       For the design and manufacture of various types of electronic
                and electro-optical equipment as well as high voltage
                interconnection devices and high speed interface products, we
                compete in a fragmented marketplace with a number of companies,
                some of which are well capitalized.

        The aviation aftermarket supply industry is highly fragmented, has
several highly visible leading companies, and is characterized by intense
competition. Some of our OEM competitors have greater name recognition than
HEICO, as well as complementary lines of business and financial, marketing, and
other resources that HEICO does not have. In addition, OEMs, aircraft
maintenance providers, leasing companies, and FAA-certificated repair facilities
may attempt to bundle their services and product offerings in the supply
industry, thereby significantly increasing industry competition. Moreover, our
smaller competitors may be able to offer more attractive pricing of parts as a
result of lower labor costs or other factors. A variety of potential actions by
any of our competitors, including a reduction of product

                                       12
<PAGE>

prices or the establishment by competitors of long-term relationships with new
or existing customers, could have a material adverse effect on our business,
financial condition, and results of operations. Competition typically
intensifies during cyclical downturns in the aviation industry, when supply may
exceed demand. We may not be able to continue to compete effectively against
present or future competitors, and competitive pressures may have a material and
adverse effect on our business, financial condition, and results of operations.

Our success is dependent on the development and manufacture of new products,
equipment, and services. Our inability to develop, manufacture, and introduce
new products and services at profitable pricing levels could reduce our sales or
sales growth.

        The aviation, defense, space, and electronics industries are constantly
undergoing development and change and, accordingly, new products, equipment, and
methods of repair and overhaul service are likely to be introduced in the
future. In addition to manufacturing electronic and electro-optical equipment
and selected aerospace and defense components for OEMs and the U.S. government
and repairing jet engine and aircraft components, we re-design sophisticated
aircraft replacement parts originally developed by OEMs so that we can offer the
replacement parts for sale at substantially lower prices than those manufactured
by the OEMs. Consequently, we devote substantial resources to research and
product development. Technological development poses a number of challenges and
risks, including the following:

        o       We may not be able to successfully protect the proprietary
                interests we have in various aircraft parts, electronic, and
                electro-optical equipment and our repair processes;

        o       As OEMs continue to develop and improve jet engines and aircraft
                components, we may not be able to re-design and manufacture
                replacement parts that perform as well as those offered by OEMs
                or we may not be able to profitably sell our replacement parts
                at lower prices than the OEMs;

        o       We may need to expend significant capital to:

                -       purchase new equipment and machines,
                -       train employees in new methods of production and
                        service, and
                -       fund the research and development of new products; and

        o       Development by our competitors of patents or methodologies that
                preclude us from the design and manufacture of aircraft
                replacement parts or electrical and electro-optical equipment
                could adversely affect our business, financial condition, and
                results of operations.

        In addition, we may not be able to successfully develop new products,
equipment, or methods of repair and overhaul service, and the failure to do so
could have a material adverse effect on our business, financial condition, and
results of operations.

Product specification costs and requirements could cause an increase to our
costs to complete contracts.

        Although our engineering teams have usually successfully foreseen
contract completion costs, the costs to meet customer specifications and
requirements could result in us having to spend more to design or manufacture
products and this could reduce our profit margins on current contracts or those
we obtain in the future.

                                       13
<PAGE>

We may incur product liability claims that are not fully insured.

        Our jet engine and aircraft component replacement parts and repair and
overhaul services expose our business to potential liabilities for personal
injury or death as a result of the failure of an aircraft component that we have
designed, manufactured, or serviced. The commercial aviation industry
occasionally has catastrophic losses that may exceed policy limits. An uninsured
or partially insured claim, or a claim for which third-party indemnification is
not available, could have a material adverse effect on our business, financial
condition, and results of operations. Additionally, insurance coverage costs may
become even more expensive in the future. Our customers typically require us to
maintain substantial insurance coverage and our inability to obtain insurance
coverage at commercially reasonable rates could have a material adverse effect
on our business.

We may not have the administrative, operational, or financial resources to
continue to grow the company.

        We have experienced rapid growth in recent periods and intend to
continue to pursue an aggressive growth strategy, both through acquisitions and
internal expansion of products and services. Our growth to date has placed, and
could continue to place, significant demands on our administrative, operational,
and financial resources. We may not be able to grow effectively or manage our
growth successfully, and the failure to do so could have a material adverse
effect on our business, financial condition, and results of operations.

We may not be able to execute our acquisition strategy, which could slow our
growth.

        A key element of our strategy is growth through the acquisition of
additional companies. Our acquisition strategy is affected by and poses a number
of challenges and risks, including the following:

        o       Availability of suitable acquisition candidates;

        o       Availability of capital;

        o       Diversion of management's attention;

        o       Integration of the operations and personnel of acquired
                companies;

        o       Potential write downs of acquired intangible assets;

        o       Potential loss of key employees of acquired companies;

        o       Use of a significant portion of our available cash;

        o       Significant dilution to our shareholders for acquisitions made
                utilizing our securities; and

        o       Consummation of acquisitions on satisfactory terms.

        We may not be able to successfully execute our acquisition strategy, and
the failure to do so could have a material adverse effect on our business,
financial condition, and results of operations.

We may incur environmental liabilities and these liabilities may not be covered
by insurance.

        Our operations and facilities are subject to a number of federal, state,
and local environmental laws and regulations, which govern, among other things,
the discharge of hazardous materials into the air and water as well as the
handling, storage, and disposal of hazardous materials. Pursuant to various
environmental laws, a current or previous owner or operator of real property may
be liable for the costs of removal or remediation of hazardous materials.
Environmental laws typically impose liability whether or not the owner or
operator knew of, or was responsible for, the presence of hazardous materials.
Although

                                       14
<PAGE>

management believes that our operations and facilities are in material
compliance with environmental laws and regulations, future changes in them or
interpretations thereof or the nature of our operations may require us to make
significant additional capital expenditures to ensure compliance in the future.

        We do not maintain specific environmental liability insurance, and the
expenses related to these environmental liabilities, if we are required to pay
them, could have a material adverse effect on our business, financial condition,
and results of operations.

We are dependent on key personnel and the loss of these key personnel could have
a material adverse effect on our success.

        Our success substantially depends on the performance, contributions, and
expertise of our senior management team led by Laurans A. Mendelson, our
Chairman, President, and Chief Executive Officer. Technical employees are also
critical to our research and product development, as well as our ability to
continue to re-design sophisticated products of OEMs in order to sell competing
replacement parts at substantially lower prices than those manufactured by the
OEMs. The loss of the services of any of our executive officers or other key
employees or our inability to continue to attract or retain the necessary
personnel could have a material adverse effect on our business, financial
condition, and results of operations.

Our executive officers and directors have significant influence over our
management and direction.

        As of January 22, 2007, collectively our executive officers and entities
controlled by them, our 401(k) Plan, and members of the Board of Directors
beneficially owned approximately 35% of our outstanding Common Stock and
approximately 9% of our outstanding Class A Common Stock. Accordingly, they will
be able to substantially influence the election of the Board of Directors and
control our business, policies, and affairs, including our position with respect
to proposed business combinations and attempted takeovers.

ITEM 1B.   UNRESOLVED STAFF COMMENTS

        None.

                                       15
<PAGE>

ITEM 2.    PROPERTIES

        The Company owns or leases a number of facilities, which are utilized by
its Flight Support Group ("FSG"), Electronic Technologies Group ("ETG"), and
Corporate office. All of the facilities listed below are in good operating
condition, are well maintained, and are in regular use. The Company believes
that its existing facilities are sufficient to meet its operational needs for
the foreseeable future. Summary information on the facilities utilized within
the FSG and the ETG to support their principal operating activities is as
follows:

FLIGHT SUPPORT GROUP

<TABLE>
<CAPTION>
                                                 SQUARE FOOTAGE
                                           -------------------------
LOCATION                                     LEASED         OWNED       DESCRIPTION
---------------------------------------    ----------    -----------    ---------------------------------------------
<S>                                           <C>            <C>        <C>
United States facilities (9 states)           281,000        159,000    Manufacturing, engineering and distribution
                                                                          facilities, and corporate headquarters
United States facilities (5 states)            97,000        141,000    Repair and overhaul facilities
International facilities (2 countries)          5,000             --    Manufacturing, engineering and distribution
   - India and Singapore                                                  facilities
</TABLE>

ELECTRONIC TECHNOLOGIES GROUP

<TABLE>
<CAPTION>
                                                 SQUARE FOOTAGE
                                           -------------------------
LOCATION                                     LEASED         OWNED       DESCRIPTION
---------------------------------------    ----------    -----------    ---------------------------------------------
<S>                                           <C>             <C>       <C>
United States facilities (7 states)           137,000         76,000    Manufacturing and engineering facilities
International facilities (2 countries)         52,000         12,000    Manufacturing and engineering facilities
   - Canada and United Kingdom
</TABLE>

CORPORATE

<TABLE>
<CAPTION>
                                                 SQUARE FOOTAGE
                                           -------------------------
LOCATION                                     LEASED         OWNED       DESCRIPTION
---------------------------------------    ----------    -----------    ---------------------------------------------
<S>                                                <C>         <C>      <C>
United States facilities (1 state)                 --          4,000    Administrative offices
</TABLE>

(1)     Represents the square footage of corporate offices in Miami, Florida.
        The square footage of the Company's corporate headquarters in Hollywood,
        FL is included within the square footage under the caption "United
        States facilities (9 states)" under Flight Support Group.

ITEM 3.    LEGAL PROCEEDINGS

        The Company is involved in various legal actions arising in the normal
course of business. Based upon the Company's and its legal counsel's evaluations
of any claims or assessments, management is of the opinion that the outcome of
these matters will not have a material adverse effect on the Company's results
of operations or financial position.

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        There were no matters submitted to a vote of security holders during the
fourth quarter of fiscal 2007.

                                       16
<PAGE>

                                     PART II

ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS,
           AND ISSUER PURCHASES OF EQUITY SECURITIES

MARKET INFORMATION

        The Company's Class A Common Stock and Common Stock are listed and
traded on the New York Stock Exchange ("NYSE") under the symbols "HEI.A" and
"HEI," respectively. The following tables set forth, for the periods indicated,
the high and low share prices for the Class A Common Stock and the Common Stock
as reported on the NYSE, as well as the amount of cash dividends paid per share
during such periods.

                              CLASS A COMMON STOCK

                                                           CASH
                                                         DIVIDENDS
                                  HIGH          LOW      PER SHARE
                               ----------   ----------   ----------
         FISCAL 2006:
             First Quarter     $    21.93   $    16.90   $      .04
             Second Quarter         29.65        19.73           --
             Third Quarter          31.20        22.87          .04
             Fourth Quarter         30.67        24.33           --

         FISCAL 2007:
             First Quarter     $    33.01   $    28.72   $      .04
             Second Quarter         34.29        29.10           --
             Third Quarter          37.58        30.65          .04
             Fourth Quarter         44.36        32.65           --

        As of December 20, 2007, there were 867 holders of record of the
Company's Class A Common Stock.

                                  COMMON STOCK

                                                           CASH
                                                         DIVIDENDS
                                  HIGH          LOW      PER SHARE
                               ----------   ----------   ----------
         FISCAL 2006:
             First Quarter     $    27.45   $    21.87   $      .04
             Second Quarter         34.69        24.56           --
             Third Quarter          35.87        26.95          .04
             Fourth Quarter         37.12        29.25           --

         FISCAL 2007:
             First Quarter     $    40.07   $    34.01   $      .04
             Second Quarter         40.35        33.76           --
             Third Quarter          44.43        35.81          .04
             Fourth Quarter         54.52        39.51           --

        As of December 20, 2007, there were 829 holders of record of the
Company's Common Stock.

                                       17
<PAGE>

PERFORMANCE GRAPHS

        The following graph and table compare the total return on $100 invested
in HEICO Common Stock and HEICO Class A Common Stock with the total return of
$100 invested in the New York Stock Exchange (NYSE) Composite Index and the Dow
Jones U.S. Aerospace Index for the five-year period from October 31, 2002
through October 31, 2007. The NYSE Composite Index measures all common stock
listed on the NYSE. The Dow Jones U.S. Aerospace Index is comprised of large
companies which make aircraft, major weapons, radar, and other defense equipment
and systems as well as providers of satellites used for defense purposes. The
total returns include the reinvestment of cash dividends.

                              [CHART APPEARS HERE]

<TABLE>
<CAPTION>
                                                  CUMULATIVE TOTAL RETURN AS OF OCTOBER 31,
                                 ---------------------------------------------------------------------------
                                    2002         2003         2004         2005         2006         2007
                                 ----------   ----------   ----------   ----------   ----------   ----------
<S>                              <C>          <C>          <C>          <C>          <C>          <C>
HEICO Common Stock (1)           $   100.00   $   159.40   $   203.66   $   249.93   $   412.61   $   618.65
HEICO Class A Common Stock (1)   $   100.00   $   158.94   $   204.13   $   249.50   $   443.30   $   642.02
NYSE Composite Index             $   100.00   $   119.17   $   133.85   $   148.65   $   175.49   $   206.22
Dow Jones U.S. Aerospace Index   $   100.00   $   114.34   $   139.15   $   168.60   $   220.42   $   291.04
</TABLE>

----------
(1)     Information has been adjusted retroactively to give effect to a 10%
        stock dividend paid in shares of Class A Common Stock in January 2004.

                                       18
<PAGE>

         The following graph and table compare the total return on $100 invested
in HEICO Common Stock since October 31, 1990 with the same indices shown on the
five-year performance graph on the previous page. October 31, 1990 was the end
of the first fiscal year following the date the current executive management
team assumed leadership of the Company. No Class A Common Stock was outstanding
as of October 31, 1990. As with the five-year performance graph, the total
returns include the reinvestment of cash dividends.

                              [CHART APPEARS HERE]

<TABLE>
<CAPTION>
                                                  CUMULATIVE TOTAL RETURN AS OF OCTOBER 31,
                                 ---------------------------------------------------------------------------
                                    1990         1991         1992         1993         1994         1995
                                 ----------   ----------   ----------   ----------   ----------   ----------
<S>                              <C>          <C>          <C>          <C>          <C>          <C>
HEICO Common Stock (1)           $   100.00   $   141.49   $   158.35   $   173.88   $   123.41   $   263.25
NYSE Composite Index             $   100.00   $   130.31   $   138.76   $   156.09   $   155.68   $   186.32
Dow Jones U.S. Aerospace Index   $   100.00   $   130.67   $   122.00   $   158.36   $   176.11   $   252.00
</TABLE>

<TABLE>
<CAPTION>
                                                  CUMULATIVE TOTAL RETURN AS OF OCTOBER 31,
                                 ---------------------------------------------------------------------------
                                    1996         1997         1998         1999         2000         2001
                                 ----------   ----------   ----------   ----------   ----------   ----------
<S>                              <C>          <C>          <C>          <C>          <C>          <C>
HEICO Common Stock (1)           $   430.02   $ 1,008.31   $ 1,448.99   $ 1,051.61   $   809.50   $ 1,045.86
NYSE Composite Index             $   225.37   $   289.55   $   326.98   $   376.40   $   400.81   $   328.78
Dow Jones U.S. Aerospace Index   $   341.65   $   376.36   $   378.66   $   295.99   $   418.32   $   333.32
</TABLE>

<TABLE>
<CAPTION>
                                                  CUMULATIVE TOTAL RETURN AS OF OCTOBER 31,
                                 ---------------------------------------------------------------------------
                                    2002         2003         2004         2005         2006         2007
                                 ----------   ----------   ----------   ----------   ----------   ----------
<S>                              <C>          <C>          <C>          <C>          <C>          <C>
HEICO Common Stock (1)           $   670.39   $ 1,067.42   $ 1,366.57   $ 1,674.40   $ 2,846.48   $ 4,208.54
NYSE Composite Index             $   284.59   $   339.15   $   380.91   $   423.05   $   499.42   $   586.87
Dow Jones U.S. Aerospace Index   $   343.88   $   393.19   $   478.49   $   579.77   $   757.97   $ 1,000.84
</TABLE>

----------
(1)     Information has been adjusted retroactively to give effect to all stock
        dividends paid during the seventeen-year period.

                                       19
<PAGE>

DIVIDEND POLICY

        The Company has historically paid semi-annual cash dividends on both its
Class A Common Stock and Common Stock. In July 2007, HEICO paid its 58th
consecutive semi-annual cash dividend since 1979. HEICO's Board of Directors
presently intends to continue the payment of regular semi-annual cash dividends
on both classes of its common stock. In December 2007, the Board of Directors
declared a regular semi-annual cash dividend of $.05 per share payable in
January 2008. The cash dividend represents a 25% increase over the prior per
share amount of $.04. The Company's ability to pay dividends could be affected
by future business performance, liquidity, capital needs, alternative investment
opportunities, and loan covenants under its revolving credit facility.

EQUITY COMPENSATION PLAN INFORMATION

        The following table summarizes information about the Company's equity
compensation plans as of October 31, 2007.

<TABLE>
<CAPTION>
                                                                                 NUMBER OF SECURITIES
                                            NUMBER OF                             REMAINING AVAILABLE
                                        SECURITIES TO BE                          FOR FUTURE ISSUANCE
                                           ISSUED UPON       WEIGHTED-AVERAGE        UNDER EQUITY
                                           EXERCISE OF       EXERCISE PRICE OF    COMPENSATION PLANS
                                           OUTSTANDING          OUTSTANDING      (EXCLUDING SECURITIES
                                       OPTIONS, WARRANTS,   OPTIONS, WARRANTS,    REFLECTED IN COLUMN
                                           AND RIGHTS           AND RIGHTS               (a))
PLAN CATEGORY                                  (a)                  (b)                   (c)
-----------------------------------    ------------------   ------------------   ---------------------
<S>                                             <C>         <C>                                <C>
Equity compensation plans
  approved by security holders (1)              1,600,330   $            10.21                 162,904

Equity compensation plans not
  approved by security holders (2)                275,000   $             7.36                      --
                                       ------------------                        ---------------------
Total                                           1,875,330   $             9.79                 162,904
                                       ==================                        =====================
</TABLE>

----------
(1)     Represents aggregated information pertaining to the Company's three
        equity compensation plans: the 1993 Stock Option Plan, the Non-Qualified
        Stock Option Plan, and the 2002 Stock Option Plan. See Note 8, Stock
        Options, of the Notes to Consolidated Financial Statements for further
        information regarding these plans.

(2)     Represents stock options granted to a former shareholder of a business
        acquired in fiscal 1999. Such stock options were fully vested and
        transferable as of the grant date and expire ten years from the date of
        grant. The exercise price of such options was the fair market value as
        of the date of grant.

ISSUER PURCHASES OF EQUITY SECURITIES

        As announced by the Company on October 21, 2002, the Company's Board of
Directors has authorized the repurchase of up to 425,000 shares of its Class A
Common Stock and/or Common Stock to be executed, at management's discretion, in
the open market or via private transactions. From October 21, 2002 through
October 31, 2003, the Company repurchased 22,000 shares of its Class A Common
Stock. The remaining 403,000 shares authorized for repurchase are subject to
certain restrictions included in the Company's revolving credit agreement. The
Company did not repurchase any shares of its Class A Common Stock and/or Common
Stock during fiscal 2007, 2006, or 2005. The repurchase program does not have a
fixed termination date.

                                       20
<PAGE>

ITEM 6.    SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                     FOR THE YEAR ENDED OCTOBER 31, (1)
                                                -----------------------------------------------------------------------------
                                                    2003           2004               2005           2006            2007
                                                ------------   ------------       ------------   ------------    ------------
<S>                                             <C>            <C>                <C>            <C>             <C>
                                                                    (in thousands, except per share data)
OPERATING DATA:
Net sales                                       $    176,453   $    215,744       $    269,647   $    392,190    $    507,924
                                                ------------   ------------       ------------   ------------    ------------
Gross profit                                          58,104         75,812            100,996        142,513         177,458
Selling, general, and administrative expenses         34,899         43,193             56,347         75,646          91,444
                                                ------------   ------------       ------------   ------------    ------------
Operating income                                      23,205         32,619(3)          44,649         66,867          86,014
                                                ------------   ------------       ------------   ------------    ------------
Interest expense                                       1,189          1,090              1,136          3,523           3,293
                                                ------------   ------------       ------------   ------------    ------------
Interest and other income                                 93             26                528            639              95
                                                ------------   ------------       ------------   ------------    ------------
Life insurance proceeds                                   --          5,000(4)              --             --              --
                                                ------------   ------------       ------------   ------------    ------------
Net income                                      $     12,222   $     20,630(3)(4) $     22,812   $     31,888(5) $     39,005(6)
                                                ============   ============       ============   ============    ============

Weighted average number of common
 shares outstanding:(2)
   Basic                                              23,237         24,037             24,460         25,085          25,716
   Diluted                                            24,531         25,755             26,323         26,598          26,931

PER SHARE DATA: (2)
Net income:
   Basic                                        $        .53   $        .86(3)(4) $        .93   $       1.27(5) $       1.52(6)
   Diluted                                               .50            .80(3)(4)          .87           1.20(5)         1.45(6)
Cash dividends                                          .045           .050               .050           .080            .080

BALANCE SHEET DATA (AS OF OCTOBER 31):
Total assets                                    $    333,244   $    364,255       $    435,624   $    534,815    $    631,302
Total debt (including current portion)                32,013         18,129             34,124         55,061          55,952
Minority interests in consolidated
 subsidiaries                                         40,577         44,644             49,035         63,301          72,938
Shareholders' equity                                 221,518        247,402            273,503        317,258         371,601
</TABLE>

----------
(1)     Results include the results of acquisitions from each respective
        effective date.

(2)     Information has been adjusted retroactively to give effect to a 10%
        stock dividend paid in shares of Class A Common Stock in January 2004.

(3)     Operating income was reduced by an aggregate of $850 in restructuring
        expenses recorded by certain subsidiaries of the Flight Support Group
        that provide repair and overhaul services, including $350 recorded in
        cost of sales and $500 recorded in selling, general, and administrative
        expenses. The restructuring expenses decreased net income by $427, or
        $.02 per basic and diluted share.

(4)     Represents proceeds from a $5,000 key-person life insurance policy
        maintained by a subsidiary of the Flight Support Group. The minority
        interest's share of this income totaled $1,000, which is reported as a
        component of minority interests' share of income. Accordingly, the life
        insurance proceeds increased net income by $4,000, or $.17 per basic and
        $.16 per diluted share.

(5)     Includes the benefit of a tax credit (net of related expenses) for
        qualified research and development activities claimed for certain prior
        years, which increased net income by $1,002, or $.04 per basic and
        diluted share.

(6)     Includes the benefit of a tax credit (net of related expenses) for
        qualified research and development activities recognized for the full
        fiscal 2006 year pursuant to the retroactive extension in December 2006
        of Section 41, "Credit for Increasing Research Activities," of the
        Internal Revenue Code, which increased net income by $535, or $.02 per
        basic and diluted share.

                                       21
<PAGE>

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF OPERATIONS

OVERVIEW

        The Company's operations are comprised of two operating segments, the
Flight Support Group ("FSG") and the Electronic Technologies Group ("ETG").

        The Flight Support Group consists of HEICO Aerospace Holdings Corp.
("HEICO Aerospace") and its subsidiaries, which primarily:

    o   Designs, Manufactures, Repairs and Distributes Jet Engine and Aircraft
        Component Replacement Parts. The Flight Support Group designs,
        manufactures, repairs and distributes jet engine and aircraft component
        replacement parts. The parts and services are approved by the Federal
        Aviation Administration ("FAA"). The Flight Support Group also
        manufactures and sells specialty parts as a subcontractor for aerospace
        and industrial original equipment manufacturers and the United States
        government.

        The Electronic Technologies Group consists of HEICO Electronic
Technologies Corp. ("HEICO Electronic") and its subsidiaries, which primarily:

    o   Designs and Manufactures Electronic, Microwave, and Electro-Optical
        Equipment, High-Speed Interface Products, High Voltage Interconnection
        Devices, and High Voltage Advanced Power Electronics. The Electronic
        Technologies Group designs, manufactures and sells various types of
        electronic, microwave and electro-optical equipment and components,
        including power supplies, laser rangefinder receivers, infra-red
        simulation, calibration and testing equipment; electromagnetic
        interference shielding for commercial and military aircraft operators,
        electronics companies, and telecommunications equipment suppliers;
        advanced high-technology interface products that link devices such as
        telemetry receivers, digital cameras, high resolution scanners,
        simulation systems, and test systems to computers; high voltage energy
        generators interconnection devices, cable assemblies and wire for the
        medical equipment, defense, and other industrial markets; and high
        frequency power delivery systems for the commercial sign industry.

        The Company's results of operations during each of the past three fiscal
years have been affected by a number of transactions. This discussion of the
Company's financial condition and results of operations should be read in
conjunction with the Consolidated Financial Statements and Notes thereto
included herein. For further information regarding the acquisitions discussed
below, see Note 2, Acquisitions, of the Notes to Consolidated Financial
Statements. The acquisitions have been accounted for using the purchase method
of accounting and are included in the Company's results of operations from the
effective dates of acquisition.

        In November 2005, the Company, through HEICO Electronic, acquired all of
the stock of Engineering Design Team, Inc. and substantially all of the assets
of its affiliate (collectively "EDT") and through HEICO Aerospace, acquired a
51% interest in Seal Dynamics LLC ("Seal LLC"). The remaining 49% interest is
principally owned by a member of Seal LLC's management group.

        In May 2006 and September 2006, the Company, through HEICO Aerospace,
acquired all of the stock of Arger Enterprises, Inc. and its related companies
(collectively "Arger") and an 80% interest in Prime Air, Inc. and its affiliate
(collectively "Prime"), respectively. Under the Prime transaction, a new
subsidiary was formed, Prime Air, LLC ("Prime Air"), which acquired
substantially all of the assets and

                                       22
<PAGE>

assumed certain liabilities of Prime. Prime Air is owned 80% by the Company and
20% by certain members of Prime's management group.

        During fiscal 2007, the Company, through HEICO Aerospace and HEICO
Electronic, acquired an additional 10% and .75%, respectively, of the equity
interests in two of its subsidiaries, which increased the Company's ownership
interest to 90% and 85.75%, respectively. The purchase price of the acquired
equity interests was paid using cash provided by operating activities.

        In April and September 2007, the Company, through HEICO Electronic,
acquired all of the stock of FerriShield, Inc. ("FerriShield") and EMD
Technologies Inc. ("EMD"), respectively. In May 2007 and August 2007, the
Company, through HEICO Aerospace, acquired certain assets of a supplier and
substantially all of the assets of a U.S. company that designs and manufactures
FAA-approved aircraft and engine parts, respectively. The purchase price of the
supplier's assets was paid using cash provided by operating activities.

        The purchase price of each fiscal 2006 and 2007 acquisition was paid in
cash using proceeds from the Company's revolving credit facility unless
otherwise noted and was not significant to the Company's consolidated financial
statements individually.

CRITICAL ACCOUNTING POLICIES

        The Company believes that the following are its most critical accounting
policies, some of which require management to make judgments about matters that
are inherently uncertain.

Revenue Recognition

        Revenue is recognized on an accrual basis, primarily upon the shipment
of products and the rendering of services. Revenue from certain fixed price
contracts for which costs can be dependably estimated is recognized on the
percentage-of-completion method, measured by the percentage of costs incurred to
date to estimated total costs for each contract. Variations in actual labor
performance, changes to estimated profitability, and final contract settlements
may result in revisions to cost estimates. Revisions in cost estimates as
contracts progress have the effect of increasing or decreasing profits in the
period of revision. For fixed price contracts in which costs cannot be
dependably estimated, revenue is recognized on the completed-contract method. A
contract is considered complete when all significant costs have been incurred or
the item has been accepted by the customer. The percentage of the Company's net
sales recognized under the percentage-of-completion method was approximately 3%,
4%, and 6% in fiscal 2007, 2006, and 2005, respectively. The aggregate effects
of changes in estimates relating to inventories and/or long-term contracts did
not have a significant effect on net income or diluted net income per share in
fiscal 2007, 2006, or 2005.

Valuation of Accounts Receivable

        The valuation of accounts receivable requires that the Company set up an
allowance for estimated uncollectible accounts and record a corresponding charge
to bad debt expense. The Company estimates uncollectible receivables based on
such factors as its prior experience, its appraisal of a customer's ability to
pay, and economic conditions within and outside of the aviation, defense, space,
and electronics industries. Actual bad debt expense could differ from estimates
made.

                                       23
<PAGE>

Valuation of Inventory

        Inventory is stated at the lower of cost or market, with cost being
determined on first-in, first-out or the average cost basis. Losses, if any, are
recognized fully in the period when identified.

        The Company periodically evaluates the carrying value of inventory,
giving consideration to factors such as its physical condition, sales patterns,
and expected future demand and estimates the amount necessary to write-down its
slow moving, obsolete, or damaged inventory. These estimates could vary
significantly from actual requirements based upon future economic conditions,
customer inventory levels, or competitive factors that were not foreseen or did
not exist when the estimated write-downs were made.

Valuation of Goodwill

        The Company tests goodwill for impairment annually as of October 31 or
more frequently if events or changes in circumstances indicate that the carrying
amount of goodwill may not be fully recoverable. The test requires the Company
to compare the fair value of each of its reporting units to its carrying value
to determine potential impairment. If the carrying value of a reporting unit
exceeds its fair value, the implied fair value of that reporting unit's goodwill
is to be calculated and an impairment loss is recognized in the amount by which
the carrying value of a reporting unit's goodwill exceeds its implied fair
value, if any. The determination of fair value requires the Company to make a
number of estimates, assumptions, and judgments of such factors as earnings
multiples, projected revenues, and operating expenses and the Company's weighted
average cost of capital. If there is a material change in such assumptions used
by the Company in determining fair value or if there is a material change in the
conditions or circumstances influencing fair value, the Company could be
required to recognize a material impairment charge. Based on the annual goodwill
test for impairment as of October 31, 2007, the Company determined there is no
impairment of its goodwill.

Purchase Accounting

        The Company applies the purchase method of accounting to its
acquisitions. Under this method, the purchase price, including any capitalized
acquisition costs, is allocated to the underlying tangible and identifiable
intangible assets acquired and liabilities assumed based on their estimated fair
market values, with any excess recorded as goodwill. Determining the fair value
of assets acquired and liabilities assumed requires management's judgment and
often involves the use of significant estimates and assumptions, including
assumptions with respect to future cash inflows and outflows, discount rates,
asset lives, and market multiples, among other items. We determine the fair
values of such assets and liabilities, generally in consultation with
third-party valuation advisors.

                                       24
<PAGE>

RESULTS OF OPERATIONS

        The following table sets forth the results of the Company's operations,
net sales and operating income by operating segment, and the percentage of net
sales represented by the respective items in the Company's Consolidated
Statements of Operations:

<TABLE>
<CAPTION>
                                                          FOR THE YEAR ENDED OCTOBER 31,
                                                --------------------------------------------------
                                                     2005              2006              2007
                                                --------------    --------------    --------------
<S>                                             <C>               <C>               <C>
Net sales                                       $  269,647,000    $  392,190,000    $  507,924,000
                                                --------------    --------------    --------------
Cost of sales                                      168,651,000       249,677,000       330,466,000
Selling, general, and administrative expenses       56,347,000        75,646,000        91,444,000
                                                --------------    --------------    --------------
Total operating costs and expenses                 224,998,000       325,323,000       421,910,000
                                                --------------    --------------    --------------
Operating income                                $   44,649,000    $   66,867,000    $   86,014,000
                                                ==============    ==============    ==============

Net sales by segment:
   Flight Support Group                         $  191,989,000    $  277,255,000    $  383,911,000
   Electronic Technologies Group                    77,821,000       115,021,000       124,035,000
   Intersegment sales                                 (163,000)          (86,000)          (22,000)
                                                --------------    --------------    --------------
                                                $  269,647,000    $  392,190,000    $  507,924,000
                                                ==============    ==============    ==============

Operating income by segment:
   Flight Support Group                         $   32,795,000    $   46,840,000    $   67,408,000
   Electronic Technologies Group                    20,978,000        34,026,000        33,870,000
   Other, primarily corporate                       (9,124,000)      (13,999,000)      (15,264,000)
                                                --------------    --------------    --------------
                                                $   44,649,000    $   66,867,000    $   86,014,000
                                                ==============    ==============    ==============

Net sales                                                100.0%            100.0%            100.0%
Gross profit                                              37.5%             36.3%             34.9%
Selling, general, and administrative expenses             20.9%             19.3%             18.0%
Operating income                                          16.6%             17.0%             16.9%
Interest expense                                           0.4%              0.9%              0.6%
Interest and other income                                  0.2%              0.2%              0.0%
Income tax expense                                         6.0%              5.3%              5.4%
Minority interests' share of income                        1.9%              2.9%              3.2%
Net income                                                 8.5%              8.1%              7.7%
</TABLE>

                                       25
<PAGE>

COMPARISON OF FISCAL 2007 TO FISCAL 2006

Net Sales

        Net sales in fiscal 2007 increased by 29.5% to $507.9 million, as
compared to net sales of $392.2 million in fiscal 2006. The increase in net
sales reflects an increase of $106.7 million (a 38.5% increase) to $383.9
million in net sales within the FSG, and an increase of $9.0 million (a 7.8%
increase) to $124.0 million in net sales within the ETG. The FSG's net sales
increase reflects organic growth of approximately 21% and acquisitions,
principally Arger in May 2006 and Prime Air in September 2006. The organic
growth reflects increased sales of new products and services and continued
increased demand for the FSG's aftermarket replacement parts and repair and
overhaul services within the commercial airline industry. The ETG's net sales
increase reflects organic growth of approximately 5% and the acquisitions of
FerriShield in April 2007 and EMD in September 2007. The organic growth
principally reflects increased demand for certain products.

        The Company's net sales in fiscal 2007 by market approximated 69% from
the commercial aviation industry, 16% from the defense and space industries, and
15% from other industrial markets including medical, electronics, and
telecommunications. The Company's net sales in fiscal 2006 by market
approximated 64% from the commercial aviation industry, 19% from the defense and
space industries, and 17% from other industrial markets including medical,
electronics, and telecommunications.

Gross Profit and Operating Expenses

        The Company's gross profit margin decreased to 34.9% in fiscal 2007 as
compared to 36.3% in fiscal 2006, reflecting lower margins within the ETG due
principally to a less favorable product mix. Consolidated cost of sales in
fiscal 2007 and 2006 includes approximately $16.5 million and $15.3 million,
respectively, of new product research and development expenses.

        Selling, general, and administrative ("SG&A") expenses were $91.4
million and $75.6 million in fiscal 2007 and 2006, respectively. The increase in
SG&A expenses was mainly due to higher operating costs, principally personnel
related, associated with the growth in net sales discussed above including
acquisitions and an increase in corporate expenses. The increase in corporate
expenses reflects higher compensation and performance awards based on
improvement in consolidated operating results.

        As a percentage of net sales, SG&A expenses decreased to 18.0% in fiscal
2007 compared to 19.3% in fiscal 2006. The decrease as a percentage of net sales
is due to efficiencies in controlling costs while increasing revenues.

Operating Income

        Operating income in fiscal 2007 increased by 28.6% to $86.0 million,
compared to operating income of $66.9 million in fiscal 2006. The increase in
operating income reflects an increase of $20.6 million (a 43.9% increase) to
$67.4 million in operating income of the FSG in fiscal 2007, partially offset by
a $.2 million decrease (a .5% decrease) in operating income of the ETG to $33.9
million in fiscal 2007 and a $1.3 million increase in corporate expenses as
discussed above.

        As a percentage of net sales, operating income decreased slightly to
16.9% in fiscal 2007 compared to 17.0% in fiscal 2006. The decrease in operating
income as a percentage of net sales reflects a decrease in the ETG's operating
income as a percentage of net sales from 29.6% in fiscal 2006 to 27.3% in fiscal
2007, partially offset by an increase in the FSG's operating income as a
percentage of net sales

                                       26
<PAGE>

from 16.9% in fiscal 2006 to 17.6% in fiscal 2007. The decrease in the ETG's
operating income as a percentage of net sales principally reflects the lower
gross profit margins discussed previously. The increase in the FSG's operating
income as a percentage of net sales reflects the increase in net sales and
operating efficiencies within SG&A expenses. See "Outlook" below for additional
information on the operating margins of the FSG & ETG.

Interest Expense

        Interest expense decreased to $3,293,000 in fiscal 2007 from $3,523,000
in fiscal 2006. The decrease was principally due to a lower weighted average
balance outstanding under the revolving credit facility in fiscal 2007,
partially offset by higher interest rates. Additional information about the
Company's revolving credit facility may be found within "Financing Activities,"
which follows within this Item 7.

Interest and Other Income

        Interest and other income in fiscal 2007 and 2006 were not material.

Income Tax Expense

        The Company's effective tax rate for fiscal 2007 increased to 33.2% from
32.7% in fiscal 2006. The increase is principally due to the phase-out of the
extraterritorial income ("ETI") exclusion provisions pursuant to the American
Jobs Creation Act of 2004 that had resulted in a tax benefit on export sales,
partially offset by a higher amount of the minority interests' share of income
excluded from the Company's 2007 consolidated income subject to federal income
taxes.

        The effective tax rate for fiscal 2007 reflects an income tax credit
(net of expenses) for qualified research and development activities recognized
for the full fiscal 2006 year in fiscal 2007. The fiscal 2006 tax credit was
recorded pursuant to the December 2006 retroactive extension for the two year
period covering January 1, 2006 to December 31, 2007 of Section 41, "Credit for
Increasing Research Activities," of the Internal Revenue Code and increased net
income by approximately $.5 million in fiscal 2007.

        Income tax expense in fiscal 2006 includes an income tax credit for
qualified research and development activities claimed in the Company's income
tax return for fiscal 2005 and amended returns for previous tax years that were
filed in fiscal 2006. The aggregate tax credit, net of expenses, increased net
income by approximately $1.0 million in fiscal 2006.

        For a detailed analysis of the provision for income taxes, see Note 6,
Income Taxes, of the Notes to Consolidated Statements of Operations.

Minority Interests' Share of Income

        Minority interests' share of income of consolidated subsidiaries relates
to the minority interests held in HEICO Aerospace, including the 20% minority
interest held in HEICO Aerospace, the 49% minority interest held in Seal LLC,
and the 20% minority interest held in Prime Air; as well as the minority
interests held in certain subsidiaries of HEICO Electronic. The increase in the
minority interests' share of income in fiscal 2007 compared to fiscal 2006 is
primarily attributable to the higher earnings of the FSG and Seal LLC, as well
as the September 2006 acquisition of Prime Air.

                                       27
<PAGE>

Net Income

        The Company's net income was $39.0 million, or $1.45 per diluted share,
in fiscal 2007 compared to $31.9 million, or $1.20 per diluted share, in fiscal
2006 reflecting the increased operating income referenced above, partially
offset by the increased minority interests' share of certain consolidated
subsidiaries.

Outlook

        The Company reported increased consolidated net sales and operating
income in fiscal 2007 compared to fiscal 2006, reflecting both strong organic
growth and growth through acquisitions. The consolidated operating margin of
16.9% for fiscal 2007 was in line with the Company's expectations and
approximated the 17.0% reported for fiscal 2006. The operating margins of the
FSG improved year-over-year due principally to operating efficiencies, and,
although the ETG experienced a slight decrease, the operating margins within the
ETG have remained strong.

        As the Company looks forward to fiscal 2008 and beyond, HEICO will
continue its focus on developing new products and services, further market
penetration, additional acquisition opportunities, and maintaining its financial
strength. Based on current economic and market conditions and including the
results of the Company's recent acquisitions, the Company is targeting growth in
fiscal 2008 net sales and earnings over fiscal 2007 results.

COMPARISON OF FISCAL 2006 TO FISCAL 2005

Net Sales

        Net sales in fiscal 2006 increased by 45.4% to $392.2 million, as
compared to net sales of $269.6 million in fiscal 2005. The increase in net
sales reflects an increase of $85.3 million (a 44.4% increase) to $277.3 million
in net sales within the FSG, and an increase of $37.2 million (a 47.8% increase)
to $115.0 million in net sales within the ETG. The FSG's net sales increase
reflects the acquisitions of Seal LLC, Arger, and Prime Air and organic growth
of approximately 14%. The organic growth reflects increased sales of new
products and services as well as improved demand for the FSG's aftermarket
replacement parts and repair and overhaul services associated with continued
recovery within the commercial airline industry. The ETG's net sales increase
reflects the acquisitions of Connectronics, Lumina, HVT, and EDT and organic
growth of approximately 8% reflecting increased demand for certain products.

        The Company's net sales in fiscal 2006 by market approximated 64% from
the commercial aviation industry, 19% from the defense and space industries, and
17% from other industrial markets including medical, electronics, and
telecommunications. The Company's net sales in fiscal 2005 by market
approximated 64% from the commercial aviation industry, 23% from the defense and
space industries, and 13% from other industrial markets including medical,
electronics, and telecommunications.

Gross Profit and Operating Expenses

        The Company's gross profit margin decreased slightly to 36.3% in fiscal
2006 as compared to 37.5% in fiscal 2005, reflecting slightly lower margins
within the FSG offset by an increase in the ETG margin. The FSG's gross profit
margin decrease was due principally to a less favorable product mix including
the expected impact of lower margins realized on products distributed by Seal
LLC and Arger. The ETG's gross profit margin increase was principally from
improved product mix, including a higher

                                       28
<PAGE>

margin product mix contributed by recent acquisitions. Consolidated cost of
sales in fiscal 2006 and 2005 includes approximately $15.3 million and $11.3
million, respectively, of new product research and development expenses.

        Selling, general, and administrative ("SG&A") expenses were $75.6
million and $56.3 million in fiscal 2006 and 2005, respectively. The increase in
SG&A expenses was mainly due to higher operating costs, principally personnel
related, associated with the aforementioned acquisitions, the increase in net
sales discussed above, an increase in corporate expenses and stock option
compensation expense (see "Stock Based Compensation," which follows within this
Item 7). The increase in corporate expenses reflects higher compensation and
performance awards ($2.0 million) as well as professional fees ($.7 million)
associated with a qualified research and development activities claim (see
"Income Tax Expense" below).

        As a percentage of net sales, SG&A expenses decreased to 19.3% in fiscal
2006 compared to 20.9% in fiscal 2005. The decrease as a percentage of net sales
is due to continued efficiencies in controlling costs while increasing revenues.

Operating Income

        Operating income in fiscal 2006 increased by 49.8% to $66.9 million,
compared to operating income of $44.6 million in fiscal 2005. The increase in
operating income reflects an increase of $14.0 million (a 42.8% increase) to
$46.8 million in operating income of the FSG in fiscal 2006. Operating income of
the ETG increased $13.0 million (a 62.2% increase) to $34.0 million in fiscal
2006. These increases were partially offset by the aforementioned increase in
corporate expenses. As a percentage of net sales, operating income increased
from 16.6% in fiscal 2005 to 17.0% in fiscal 2006. The increase in operating
income as a percentage of net sales reflects a slight decrease in the FSG's
operating income as a percentage of net sales from 17.1% in fiscal 2005 to 16.9%
in fiscal 2006 offset by an increase in the ETG's operating income as a
percentage of net sales from 27.0% in fiscal 2005 to 29.6% in fiscal 2006. The
decrease in the FSG's operating income as a percentage of net sales reflects the
lower gross profit margins discussed previously, partially offset by improved
operating efficiencies within SG&A expenses. The increase in the ETG's operating
income as a percentage of net sales reflects the increased gross profit margins
discussed previously.

Interest Expense

        Interest expense increased to $3,523,000 in fiscal 2006 from $1,136,000
in fiscal 2005. The increase was principally due to a higher weighted average
balance outstanding under the revolving credit facility in fiscal 2006 and
higher interest rates. Additional information about the Company's revolving
credit facility may be found within "Financing Activities," which follows within
this Item 7.

Interest and Other Income

        Interest and other income in fiscal 2006 and 2005 were not material.

Income Tax Expense

        The Company's effective tax rate for fiscal 2006 decreased to 32.7% from
36.6% in fiscal 2005. The decrease is principally due to a higher amount of the
minority interests' share of income excluded from the Company's fiscal 2006
consolidated income subject to federal income taxes, as well as an income tax
credit for qualified research and development activities claimed in its income
tax return for fiscal 2005 and amended returns for previous tax years that were
filed in the third and fourth quarters of

                                       29
<PAGE>

fiscal 2006. The aggregate tax credit, net of expenses, increased net income by
approximately $1.0 million in fiscal 2006. For a detailed analysis of the
provision for income taxes see Note 6, Income Taxes, of the Notes to
Consolidated Statements of Operations.

Minority Interests' Share of Income

        Minority interests' share of income of consolidated subsidiaries relates
to the minority interests held in HEICO Aerospace, including the 20% minority
interest held in HEICO Aerospace, the 49% minority interest held in Seal LLC and
the 20% minority interest held in Prime Air; and the minority interests held in
the ETG, which consist of the 20% minority interest held in Sierra Microwave
Technology, LLC ("Sierra") and the 15% minority interest held in HVT. The
increase in the minority interests' share of income in fiscal 2006 compared to
fiscal 2005 is attributable to the acquisitions of Seal LLC (November 2005), HVT
(September 2005), and Prime Air (September 2006) and the higher earnings of the
FSG and Sierra.

Net Income

        The Company's net income was $31.9 million, or $1.20 per diluted share,
in fiscal 2006 compared to $22.8 million, or $.87 per diluted share, in fiscal
2005 reflecting the increased operating income referenced above.

INFLATION

        The Company has generally experienced increases in its costs of labor,
materials, and services consistent with overall rates of inflation. The impact
of such increases on the Company's net income has been generally minimized by
efforts to lower costs through manufacturing efficiencies and cost reductions.

LIQUIDITY AND CAPITAL RESOURCES

        The Company generates cash primarily from its operating activities and
financing activities, including borrowings under short-term and long-term credit
agreements.

        Principal uses of cash by the Company include acquisitions, payments of
principal and interest on debt, capital expenditures, cash dividends, and
increases in working capital.

        The Company believes that its net cash provided by operating activities
and available borrowings under its revolving credit facility will be sufficient
to fund cash requirements for the foreseeable future.

Operating Activities

        Net cash provided by operating activities was $57.5 million for fiscal
2007, principally reflecting net income of $39.0 million, minority interests'
share of income of $16.3 million, depreciation and amortization of $12.2
million, a tax benefit related to stock option exercises of $6.9 million, and a
deferred income tax provision of $2.8 million, partially offset by an increase
in net operating assets of $16.0 million and the presentation of $5.3 million of
excess tax benefit from stock option exercises as a financing activity in
accordance with the provisions of SFAS No. 123(R) (see "Stock Based
Compensation" below). The increase in net operating assets (current assets used
in operating activities net of current liabilities) primarily reflects a higher
investment in inventories by the FSG required to meet increased sales demand
associated with new product offerings, sales growth, improved product delivery
times, and higher prices of certain raw materials; and an increase in accounts
receivable due to sales growth; partially

                                       30
<PAGE>

offset by higher current liabilities associated with increased sales and
purchases and higher accrued employee compensation and related payroll taxes.

        Net cash provided by operating activities was $46.9 million for fiscal
2006, principally reflecting net income of $31.9 million, minority interests'
share of income of $11.2 million, depreciation and amortization of $10.6
million, a tax benefit related to stock option exercises of $2.2 million, a
deferred income tax provision of $2.6 million, and stock option compensation
expense of $1.4 million, partially offset by an increase in net operating assets
of $12.0 million and the presentation of $1.6 million of excess tax benefit from
stock option exercises as a financing activity in accordance with the provisions
of SFAS No. 123(R) (see "Stock Based Compensation" below). The increase in net
operating assets (current assets used in operating activities net of current
liabilities) primarily reflects a higher investment in inventories required to
meet increased sales demand associated with new product offerings, sales growth,
and increased lead times on certain raw materials; and an increase in accounts
receivable due to sales growth; partially offset by higher current liabilities
associated with increased sales and purchases and higher accrued employee
compensation and related payroll taxes.

        Net cash provided by operating activities was $35.8 million for fiscal
2005, principally reflecting net income of $22.8 million, depreciation and
amortization of $7.4 million, minority interests' share of income of $5.1
million, a deferred income tax provision of $3.0 million and a tax benefit
related to stock option exercises of $2.8 million, partially offset by an
increase in net operating assets of $5.3 million. The increase in net operating
assets (current assets used in operating activities net of current liabilities)
primarily reflects a higher investment in inventories required to meet increased
sales demand associated with new product offerings, sales growth, and increased
lead times on certain raw materials; and an increase in accounts receivable due
to sales growth; partially offset by higher current liabilities associated with
increased sales and purchases and higher accrued employee compensation and
related payroll taxes.

Investing Activities

        Net cash used in investing activities during the three fiscal year
period ended October 31, 2007 primarily relates to several acquisitions,
including contingent payments, totaling $148.0 million, including $48.4 million
in fiscal 2007, $58.1 million in fiscal 2006, and $41.5 million in fiscal 2005.
Further details on acquisitions may be found at the beginning of this Item 7
under the caption "Overview" and Note 2, Acquisitions, of the Notes to
Consolidated Financial Statements. Capital expenditures aggregated $31.1 million
over the last three fiscal years, primarily reflecting the expansion of existing
production facilities and capabilities, which were generally funded using cash
provided by operating activities. In fiscal 2005, the Company received proceeds
of $3.5 million from the sale of a building held for sale.

Financing Activities

        During the three fiscal year period ended October 31, 2007, the Company
borrowed an aggregate $142.0 million under its revolving credit facility
principally to fund acquisitions, including $46.0 million in fiscal 2007, $59.0
million in fiscal 2006, and $37.0 million in fiscal 2005. Further details on
acquisitions may be found at the beginning of this Item under the caption
"Overview" and Note 2, Acquisitions, of the Notes to Consolidated Financial
Statements. Repayments on the revolving credit facility aggregated $105.0
million over the last three fiscal years, including $46.0 million in fiscal
2007, $38.0 million in fiscal 2006, and $21.0 million in fiscal 2005. For the
three year fiscal period ended October 31, 2007, the Company received proceeds
from stock option exercises aggregating $13.7 million, made distributions to
minority interest owners aggregating $10.4 million, and paid cash dividends
aggregating $5.3 million, partially offset by net repayments of $2.0 million on
the Company's short-term line of credit. Net cash provided by financing
activities also includes the presentation of $5.3 million and

                                       31
<PAGE>

$1.6 million of excess tax benefit from stock option exercises in fiscal 2007
and 2006, respectively, in accordance with the provisions of SFAS No. 123(R).

        In August 2005, the Company amended its revolving credit facility by
entering into a $130 million Amended and Restated Revolving Credit Agreement
("Credit Facility") with a bank syndicate, which expires in August 2010. The
Credit Facility includes a feature that will allow the Company to increase the
Credit Facility, at its option, up to an aggregate amount of $175 million
through increased commitments from existing lenders or the addition of new
lenders. The Credit Facility may be used for working capital and general
corporate needs of the Company, including letters of credit, capital
expenditures, and to finance acquisitions. In July 2006, the Company amended the
Credit Facility principally to include a less restrictive covenant regarding
requisite approval of acquisitions by the bank syndicate. The prior covenant
relating to approval by the bank syndicate of acquisitions in excess of an
aggregate of $50 million over any twelve-month period was eliminated provided
the Company maintains an agreed upon, or lower, leverage ratio. Advances under
the Credit Facility accrue interest at the Company's choice of the "Base Rate"
or the London Interbank Offered Rate ("LIBOR") plus applicable margins (based on
the Company's ratio of total funded debt to earnings before interest, taxes,
depreciation and amortization, minority interest, and non-cash charges or
"leverage ratio"). The Base Rate is the higher of (i) the Prime Rate or (ii) the
Federal Funds rate plus .50%. The applicable margins range from .75% to 2.00%
for LIBOR based borrowings and from .00% to .50% for Base Rate based borrowings.
A fee is charged on the amount of the unused commitment ranging from .20% to
..50% (depending on the Company's leverage ratio). The Credit Facility also
includes a $10 million swingline sublimit and a $15 million sublimit for letters
of credit. The Credit Facility is secured by substantially all assets other than
real property of the Company and its subsidiaries and contains covenants that
require, among other things, the maintenance of the leverage ratio and a fixed
charge coverage ratio as well as minimum net worth requirements. See Note 5,
Short-Term and Long-Term Debt, of the Notes to Consolidated Financial Statements
for further information regarding the revolving credit facility.

CONTRACTUAL OBLIGATIONS

        The following table summarizes the Company's contractual obligations as
of October 31, 2007:

<TABLE>
<CAPTION>
                                                                PAYMENTS DUE BY FISCAL PERIOD
                                                  ---------------------------------------------------------
                                      TOTAL           2008        2009 - 2010    2011 - 2012    THEREAFTER
                                  ------------    ------------   ------------   ------------   ------------
<S>                               <C>             <C>            <C>            <C>            <C>
Short term and long-term debt
  obligations (1)                 $ 55,788,000    $  2,134,000   $ 53,450,000   $    181,000   $     23,000
Capital lease obligations
  and equipment loans (1)              164,000          53,000        102,000          9,000             --
Operating lease obligations (2)     25,927,000       4,682,000      6,899,000      4,454,000      9,892,000
Purchase obligations (3)            11,899,000      11,857,000         42,000             --             --
Other long-term liabilities (4)      2,216,000       1,932,000        137,000         81,000         66,000
                                  ------------    ------------   ------------   ------------   ------------
Total contractual obligations     $ 95,994,000    $ 20,658,000   $ 60,630,000   $  4,725,000   $  9,981,000
                                  ============    ============   ============   ============   ============
</TABLE>

----------
(1)     Excludes interest charges on borrowings and the fee on the amount of any
        unused commitment that the Company may be obligated to pay under its
        revolving credit facility as such amounts vary. Also excludes interest
        charges associated with notes payable, capital lease obligations, and
        equipment loans as such amounts are not material. See Note 5, Short-Term
        and Long-Term Debt, of the Notes to Consolidated Financial Statements
        and "Financing Activities" above for additional information regarding
        the Company's long-term debt and capital lease obligations and equipment
        loans.

                                       32
<PAGE>

(2)     See Note 15, Commitments and Contingencies - Lease Commitments, of the
        Notes to Consolidated Financial Statements for additional information
        regarding the Company's operating lease obligations.

(3)     Includes additional purchase consideration aggregating $11,736,000
        relating to fiscal 2006 acquisitions. See Note 2, Acquisitions, of the
        Notes to Consolidated Financial Statements. Also includes $163,000 of
        commitments for capitalized expenditures and excludes all purchase
        obligations for inventory and supplies in the ordinary course of
        business.

(4)     Includes $1,826,000 of discretionary contributions under our Leadership
        Compensation Plan, which is explained further in Note 3, Selected
        Financial Statement Information - Other Non-Current Liabilities, of the
        Notes to Consolidated Financial Statements. The amounts in the table do
        not include amounts related to the Company's other deferred compensation
        arrangement for which there is an offsetting asset included in the
        Company's Consolidated Balance Sheets. Also includes projected payments
        aggregating $315,000 under our Directors Retirement Plan, which is
        explained further in Note 9, Retirement Plans, of the Notes to
        Consolidated Financial Statements (the plan is unfunded and we pay
        benefits directly) and $75,000 of other contractual obligations.

OFF-BALANCE SHEET ARRANGEMENTS

        The Company has arranged for standby letters of credit aggregating $1.8
million to meet the security requirement of its insurance company for potential
workers' compensation claims, which are supported by the Company's revolving
credit facility. In addition, the Company's industrial development revenue bonds
are secured by a $2.0 million letter of credit expiring April 2008 and a
mortgage on the related properties pledged as collateral.

        Pursuant to the purchase agreement related to the acquisition of an 80%
interest in a subsidiary by the FSG in fiscal 2001, the Company acquired an
additional 10% of the equity interests of the subsidiary in fiscal 2007. The
Company has the right to purchase the remaining 10% of the equity interests in
fiscal 2011, or sooner under certain conditions, and the minority interest
holder has the right to cause the Company to purchase the same equity interest
in the same period.

        As part of the agreement to acquire an 80% interest in a subsidiary by
the ETG in fiscal 2004, the Company has the right to purchase the minority
interests beginning at approximately the tenth anniversary of the acquisition,
or sooner under certain conditions, and the minority interest holders have the
right to cause the Company to purchase their interests commencing on
approximately the fifth anniversary of the acquisition, or sooner under certain
conditions.

        As part of the agreement to purchase a subsidiary by the ETG in fiscal
2005, the Company may be obligated to pay additional purchase consideration
currently estimated to total up to $2.3 million should the subsidiary meet
certain product line-related earnings objectives during the fourth and fifth
years following the acquisition. The additional purchase consideration will be
accrued when the earnings objectives are met.

        As part of the agreement to acquire an 85% interest in a subsidiary by
the ETG in fiscal 2005, the minority interest holders have the right to cause
the Company to purchase their interests over a four-year period starting around
the second anniversary of the acquisition, or sooner under certain conditions.
In fiscal 2007, some of the minority interest holders exercised their option to
cause the Company to purchase their aggregate 3% interest over the four-year
period ending in fiscal 2010. Accordingly, the Company increased its ownership
interest in the subsidiary by .75% (or one-fourth of such minority interest
holders' aggregate interest) to 85.75% effective April 2007.

                                       33
<PAGE>

        As part of the agreement to acquire a 51% interest in a subsidiary by
the FSG in fiscal 2006, the Company has the right to purchase 28% of the equity
interests of the subsidiary over a four-year period beginning approximately
after the second anniversary of the acquisition, or sooner under certain
conditions, and the minority interest holders have the right to cause the
Company to purchase the same equity interest over the same period. Further, the
Company has the right to purchase the remaining 21% of the equity interests of
the subsidiary over a three-year period beginning approximately after the fourth
anniversary of the acquisition, or sooner under certain conditions, and the
minority interest holders have the right to cause the Company to purchase the
same equity interest over the same period.

        As part of the agreement to acquire a subsidiary by the ETG in fiscal
2006, the Company may be obligated to pay additional purchase consideration up
to $17.8 million and $19.2 million, respectively, based on the subsidiary's
fiscal 2008 and 2009 respective earnings relative to target. The additional
purchase consideration will be accrued when the earnings objectives are met and
payable in the subsequent fiscal year.

        As part of an agreement to acquire an 80% interest in a subsidiary by
the FSG in fiscal 2006, the Company has the right to purchase the minority
interests beginning at approximately the eighth anniversary of the acquisition,
or sooner under certain conditions, and the minority interest holders have the
right to cause the Company to purchase the same equity interest over the same
period.

        As part of the agreement to acquire a subsidiary by the ETG in fiscal
2007, the Company may be obligated to pay additional purchase consideration up
to $76.9 million in aggregate should the subsidiary meet certain earnings
objectives during the first five years following the acquisition. The additional
purchase consideration will be accrued when the earnings objectives are met.

        For additional information on the aforementioned acquisitions see Note
2, Acquisitions, of the Notes to Consolidated Financial Statements.

STOCK BASED COMPENSATION

        Effective November 1, 2005, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 123(R), "Share-Based Payment," as interpreted
by the Securities and Exchange Commission in Staff Accounting Bulletin No. 107
and began recording compensation expense associated with stock options. SFAS No.
123(R) requires companies to recognize in the statement of operations the cost
of employee services received in exchange for awards of equity instruments based
on the grant date fair value of those awards (with limited exceptions). Prior to
the adoption of SFAS No. 123(R), the Company accounted for stock-based employee
compensation using the intrinsic value method prescribed by Accounting
Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
Employees." Accordingly, compensation expense had only been recorded in the
consolidated financial statements for any stock options granted below fair
market value of the underlying stock as of the date of grant.

        The Company adopted the modified prospective transition method provided
for under SFAS No. 123(R) and, accordingly, prior period results have not been
retroactively adjusted. The modified prospective transition method requires that
stock-based compensation expense be recorded for (i) all new stock options
granted on or after November 1, 2005 based on the grant date fair value
determined under the provisions of SFAS No. 123(R) and (ii) all unvested stock
options granted prior to November 1, 2005 based on the grant date fair value as
determined under the provisions of SFAS No. 123.

        Beginning in fiscal 2006, the Company has presented the cash flows
resulting from tax deductions in excess of the cumulative compensation cost
recognized for stock options exercised ("excess tax benefit") as a financing
activity in the Consolidated Statements of Cash Flows as prescribed by SFAS

                                       34
<PAGE>

No. 123(R). Prior to the adoption of SFAS No. 123(R), the Company presented all
tax benefits resulting from stock option exercises as an operating activity in
the Consolidated Statements of Cash Flows. For the fiscal years ended October
31, 2007 and 2006, the excess tax benefit from stock option exercises of
$5,262,000 and $1,550,000, respectively, was presented in financing activities
in the Company's Consolidated Statements of Cash Flows.

        As a result of the adoption of SFAS No. 123(R), the Company's net income
for the fiscal years ended October 31, 2007 and 2006 includes compensation
expense of $658,000 and $1,373,000, respectively, and an income tax benefit
related to the Company's stock options of $165,000 and $391,000, respectively.
Substantially all of the stock option compensation expense was recorded as a
component of selling, general, and administrative expenses in the Company's
Consolidated Statements of Operations.

        As of October 31, 2007, there was $.2 million of pre-tax unrecognized
compensation expense related to nonvested stock options, which is expected to be
recognized over a weighted average period of approximately .7 years.

        Further information regarding stock options can be found in Note 8,
Stock Options, of the Notes to Consolidated Financial Statements.

NEW ACCOUNTING PRONOUNCEMENTS

        In May 2005, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 154, "Accounting Changes and Error Corrections, a replacement of APB
Opinion No. 20 and FASB Statement No. 3." SFAS No. 154 changes the requirements
for the accounting and reporting of a change in accounting principle. The
Statement eliminates the requirement in APB Opinion No. 20 to include the
cumulative effect of changes in accounting principle in the income statement in
the period of change, and instead requires that changes in accounting principle
be retrospectively applied unless it is impracticable to determine either the
period-specific effects or the cumulative effect of the change. The Statement
applies to all voluntary changes in accounting principle. SFAS No. 154 is
effective for changes made in fiscal years beginning after December 15, 2005.
The adoption of SFAS No. 154 did not have a material effect on the Company's
results of operations, financial position, or cash flows.

        In June 2006, the FASB issued FASB Interpretation No. 48 ("FIN 48")
"Accounting for Uncertainty in Income Taxes--an interpretation of FASB Statement
No. 109," which seeks to reduce the diversity in practice associated with the
accounting and reporting for uncertain income tax positions. This Interpretation
prescribes a comprehensive model for the financial statement recognition,
measurement, presentation, and disclosure of uncertain tax positions taken or
expected to be taken in an income tax return. FIN 48 presents a two-step process
for evaluating a tax position. The first step is to determine whether it is
more-likely-than-not that a tax position will be sustained upon examination,
based on the technical merits of the position. The second step is to measure the
benefit to be recorded from tax positions that meet the more-likely-than-not
recognition threshold, by determining the largest amount of tax benefit that is
greater than 50 percent likely of being realized upon ultimate settlement, and
recognizing that amount in the financial statements. FIN 48 is effective for
fiscal years beginning after December 15, 2006, or in fiscal 2008 for HEICO. The
Company is currently evaluating the impact that the adoption of FIN 48 will have
on it results of operations financial position and cash flows.

        In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements," which provides enhanced guidance for using fair value to measure
assets and liabilities. SFAS No. 157 provides a common definition of fair value
and establishes a framework to make the measurement of fair value in accordance
with generally accepted accounting principles more consistent and comparable.
SFAS No.

                                       35
<PAGE>

157 also requires expanded disclosures to provide information about the extent
to which fair value is used to measure assets and liabilities, the methods and
assumptions used to measure fair value, and the effect of fair value measures on
earnings. SFAS No. 157 is effective for fiscal years beginning after November
15, 2007, or in fiscal 2009 for HEICO. The Company is currently in the process
of evaluating the effect that the adoption of SFAS No. 157 will have on its
results of operations, financial position, and cash flows.

        In September 2006, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") No. 108, "Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements." SAB No. 108 was issued in order to eliminate the diversity in
practice surrounding how public companies quantify financial statement
misstatements. SAB No. 108 requires that registrants quantify errors using both
a balance sheet (iron curtain) approach and an income statement (rollover)
approach then evaluate whether either approach results in a misstated amount
that, when all relevant quantitative and qualitative factors are considered, is
material. SAB No. 108 is effective for fiscal years ending after November 15,
2006. The adoption of SAB No. 108 did not have a material effect on the
Company's results of operations, financial position, or cash flows.

        In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option
for Financial Assets and Financial Liabilities - Including an Amendment of FASB
Statement No. 115." SFAS No. 159 permits entities to choose to measure certain
financial assets and liabilities at fair value and report unrealized gains and
losses on items for which the fair value option has been elected in earnings.
SFAS No. 159 is effective for fiscal years beginning after November 15, 2007, or
in fiscal 2009 for HEICO. The Company has not yet determined if it will elect to
apply any of the provisions of SFAS No. 159 and is currently evaluating the
effect, if any, the adoption of SFAS No. 159 will have on its results of
operations, financial position, and cash flows.

        In December 2007, the FASB issued SFAS No. 141(R), "Business
Combinations." SFAS No. 141(R) establishes principles and requirements for how
an acquirer recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, the goodwill acquired, and any
noncontrolling interest in the acquiree. This Statement also establishes
disclosure requirements to enable the evaluation of the nature and financial
effect of the business combination. SFAS No. 141(R) is effective for fiscal
years beginning after December 15, 2008, or in fiscal 2010 for HEICO. The
Company is in the process of evaluating the effect that the adoption of SFAS No.
141(R) will have on its results of operations, financial position, and cash
flows.

        In December 2007, the FASB issued SFAS No. 160, "Noncontrolling
Interests in Consolidated Financial Statements - an amendment of ARB No. 51."
SFAS No. 160 establishes accounting and reporting standards pertaining to
ownership interests in subsidiaries held by parties other than the parent, the
amount of net income attributable to the parent and to the noncontrolling
interest, changes in a parent's ownership interest, and the valuation of any
retained noncontrolling equity investment when a subsidiary is deconsolidated.
This Statement also establishes disclosure requirements that clearly identify
and distinguish between the interests of the parent and the interests of the
noncontrolling owners. SFAS No. 160 is effective for fiscal years beginning on
or after December 15, 2008, or in fiscal 2010 for HEICO. The Company is in the
process of evaluating the effect that the adoption of SFAS No. 160 will have on
its results of operations, financial position, and cash flows.

FORWARD LOOKING STATEMENTS

        Certain statements in this Report constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements contained herein that are not clearly historical in
nature may be forward-looking and the words "believe," "expect," "estimate," and
similar

                                       36
<PAGE>

expressions are generally intended to identify forward-looking statements. Any
forward-looking statements contained herein, in press releases, written
statements, or other documents filed with the Securities and Exchange Commission
or in communications and discussions with investors and analysts in the normal
course of business through meetings, phone calls, and conference calls,
concerning our operations, economic performance, and financial condition are
subject to known and unknown risks, uncertainties, and contingencies. We have
based these forward-looking statements on our current expectations and
projections about future events. All forward-looking statements involve risks
and uncertainties, many of which are beyond our control, which may cause actual
results, performance, or achievements to differ materially from anticipated
results, performance, or achievements. Also, forward-looking statements are
based upon management's estimates of fair values and of future costs, using
currently available information. Therefore, actual results may differ materially
from those expressed or implied in those statements. Factors that could cause
such differences include, but are not limited to:

    o   Lower demand for commercial air travel or airline fleet changes, which
        could cause lower demand for our goods and services;

    o   Product specification costs and requirements, which could cause an
        increase to our costs to complete contracts;

    o   Governmental and regulatory demands, export policies and restrictions,
        reductions in defense, space or homeland security spending by U.S.
        and/or foreign customers, or competition from existing and new
        competitors, which could reduce our sales;

    o   HEICO's ability to introduce new products and product pricing levels,
        which could reduce our sales or sales growth;

    o   HEICO's ability to make acquisitions and achieve operating synergies
        from acquired businesses, customer credit risk, interest rates, and
        economic conditions within and outside of the aviation, defense, space,
        and electronics industries, which could negatively impact our costs and
        revenues; and

    o   HEICO's ability to maintain effective internal controls, which could
        adversely affect our business and the market price of our common stock.

        We undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information, future
events, or otherwise.

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        The primary market risk to which the Company has exposure is interest
rate risk, mainly related to its revolving credit facility and industrial
development revenue bonds, which have variable interest rates. Interest rate
risk associated with the Company's variable rate debt is the potential increase
in interest expense from an increase in interest rates. Periodically, the
Company enters into interest rate swap agreements to manage its interest
expense. The Company did not have any interest rate swap agreements in effect as
of October 31, 2007. Based on the Company's aggregate outstanding variable rate
debt balance of $55 million as of October 31, 2007, a hypothetical 10% increase
in interest rates would increase the Company's interest expense by approximately
$314,000 in fiscal 2008.

        The Company maintains a portion of its cash and cash equivalents in
financial instruments with original maturities of three months or less. These
financial instruments are subject to interest rate risk and

                                       37
<PAGE>

will decline in value if interest rates increase. Due to the short duration of
these financial instruments, a hypothetical 10% increase in interest rates as of
October 31, 2007 would not have a material effect on the Company's results of
operations or financial position.

        The Company is also exposed to foreign currency exchange rate
fluctuations on the United States dollar value of its foreign currency
denominated transactions, which are principally in Canadian dollar and British
pound sterling. A hypothetical 10% weakening in the exchange rate of the
Canadian dollar or British pound sterling to the United States dollar as of
October 31, 2007 would not have a material effect on the Company's results of
operations or financial position.

                                       38
<PAGE>

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                       HEICO CORPORATION AND SUBSIDIARIES
                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                              PAGE
                                                                              ----
<S>                                                                             <C>
Management's Report on Internal Control Over Financial Reporting................40

Reports of Independent Registered Public Accounting Firm........................41

Consolidated Balance Sheets as of October 31, 2007 and 2006.....................44

Consolidated Statements of Operations for the years ended October 31, 2007,
  2006, and 2005................................................................45

Consolidated Statements of Shareholders' Equity and Comprehensive Income
  for the years ended October 31, 2007, 2006, and 2005..........................46

Consolidated Statements of Cash Flows for the years ended October 31, 2007,
  2006, and 2005................................................................47

Notes to Consolidated Financial Statements......................................48
</TABLE>

                                       39
<PAGE>

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

        Management of HEICO Corporation is responsible for establishing and
maintaining adequate internal control over financial reporting. Internal control
over financial reporting is a process designed by, or under the supervision of,
the Company's principal executive and principal financial officers and effected
by the Company's board of directors, management, and other personnel to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles and includes those policies and
procedures that:

        o   Pertain to the maintenance of records that in reasonable detail
            accurately and fairly reflect the transactions and dispositions of
            the assets of the Company;

        o   Provide reasonable assurance that transactions are recorded as
            necessary to permit preparation of financial statements in
            accordance with generally accepted accounting principles, and that
            receipts and expenditures of the Company are being made only in
            accordance with authorizations of management and directors of the
            Company; and

        o   Provide reasonable assurance regarding prevention or timely
            detection of unauthorized acquisition, use, or disposition of the
            Company's assets that could have a material effect on the financial
            statements.

        Because of inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Projections of any evaluation
of effectiveness to future periods are subject to the risks that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.

        Management assessed the effectiveness of the Company's internal control
over financial reporting as of October 31, 2007. In making this assessment,
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control-Integrated
Framework.

        Based on our assessment, management believes that, as of October 31,
2007, the Company's internal control over financial reporting is effective.

        The Company's independent registered public accounting firm, Deloitte &
Touche LLP, has issued an attestation report on the Company's internal control
over financial reporting. Their report appears on the following page.


Date:    December 28, 2007

/s/ LAURANS A. MENDELSON                                 /s/ THOMAS S. IRWIN
------------------------                                 -----------------------
Laurans A. Mendelson                                     Thomas S. Irwin
Chief Executive Officer                                  Chief Financial Officer

                                       40
<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
HEICO Corporation
Hollywood, Florida

We have audited the internal control over financial reporting of HEICO
Corporation and subsidiaries (the "Company") as of October 31, 2007, based on
criteria established in Internal Control--Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission. The Company's
management is responsible for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness of internal
control over financial reporting, included in the accompanying Management's
Report on Internal Control over Financial Reporting. Our responsibility is to
express an opinion on the Company's internal control over financial reporting
based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, testing
and evaluating the design and operating effectiveness of internal control based
on the assessed risk, and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable
basis for our opinion.

A company's internal control over financial reporting is a process designed by,
or under the supervision of, the company's principal executive and principal
financial officers, or persons performing similar functions, and effected by the
company's board of directors, management, and other personnel to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company's internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial
reporting, including the possibility of collusion or improper management
override of controls, material misstatements due to error or fraud may not be
prevented or detected on a timely basis. Also, projections of any evaluation of
the effectiveness of the internal control over financial reporting to future
periods are subject to the risk that the controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective
internal control over financial reporting as of October 31, 2007, based on the
criteria established in Internal Control--Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated financial
statements and financial statement schedule as of and for

                                       41
<PAGE>

the year ended October 31, 2007 of the Company and our report dated December 28,
2007 expressed an unqualified opinion on those financial statements and
financial statement schedule.

DELOITTE & TOUCHE LLP
Certified Public Accountants

Miami, Florida
December 28, 2007

                                       42
<PAGE>

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
HEICO Corporation
Hollywood, Florida

We have audited the accompanying consolidated balance sheets of HEICO
Corporation and subsidiaries (the "Company") as of October 31, 2007 and 2006,
and the related consolidated statements of operations, shareholders' equity and
comprehensive income, and cash flows for each of the three years in the period
ended October 31, 2007. Our audits also included the financial statement
schedule listed in the Index at Item 15. These financial statements and
financial statement schedule are the responsibility of the Company's management.
Our responsibility is to express an opinion on the financial statements and
financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of HEICO Corporation and subsidiaries
as of October 31, 2007 and 2006, and the results of their operations and their
cash flows for each of the three years in the period ended October 31, 2007, in
conformity with accounting principles generally accepted in the United States of
America. Also, in our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.

We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the Company's internal control over
financial reporting as of October 31, 2007, based on the criteria established in
Internal Control--Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated December 28, 2007
expressed an unqualified opinion on the Company's internal control over
financial reporting.

DELOITTE & TOUCHE LLP
Certified Public Accountants

Miami, Florida
December 28, 2007

                                       43
<PAGE>

                       HEICO CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                       AS OF OCTOBER 31,
                                                                                  ---------------------------
                                                                                      2007           2006
                                                                                  ------------   ------------
<S>                                                                               <C>            <C>
                                     ASSETS
Current assets:
    Cash and cash equivalents                                                     $  4,947,000   $  4,999,000
    Accounts receivable, net                                                        82,399,000     65,012,000
    Inventories, net                                                               115,770,000     97,283,000
    Prepaid expenses and other current assets                                        4,557,000      3,418,000
    Deferred income taxes                                                           10,135,000      9,309,000
                                                                                  ------------   ------------
       Total current assets                                                        217,808,000    180,021,000

Property, plant and equipment, net                                                  55,554,000     49,489,000
Goodwill                                                                           310,502,000    275,116,000
Intangible assets, net                                                              35,333,000     22,011,000
Other assets                                                                        12,105,000      8,178,000
                                                                                  ------------   ------------
       Total assets                                                               $631,302,000   $534,815,000
                                                                                  ============   ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
    Current maturities of long-term debt                                          $  2,187,000   $     39,000
    Trade accounts payable                                                          28,161,000     22,386,000
    Accrued expenses and other current liabilities                                  53,878,000     41,503,000
    Income taxes payable                                                             3,112,000      1,575,000
                                                                                  ------------   ------------
       Total current liabilities                                                    87,338,000     65,503,000

Long-term debt, net of current maturities                                           53,765,000     55,022,000
Deferred income taxes                                                               35,296,000     28,052,000
Other non-current liabilities                                                       10,364,000      5,679,000
                                                                                  ------------   ------------
       Total liabilities                                                           186,763,000    154,256,000
                                                                                  ------------   ------------
Minority interests in consolidated subsidiaries                                     72,938,000     63,301,000
                                                                                  ------------   ------------

Commitments and contingencies (Notes 2 and 15)
Shareholders' equity:
    Preferred Stock, $.01 par value per share; 10,000,000 shares authorized;
      300,000 shares designated as Series B Junior Participating Preferred
      Stock and 300,000 shares designated as Series C Junior Participating
      Preferred Stock; none issued                                                          --             --
    Common Stock, $.01 par value par share; 30,000,000 shares authorized;
      10,538,691 and 10,311,564 shares issued and outstanding, respectively            105,000        103,000
    Class A Common Stock, $.01 par value per share; 30,000,000 shares
      authorized; 15,612,862 and 15,062,398 shares issued and
      outstanding, respectively                                                        156,000        151,000
    Capital in excess of par value                                                 220,658,000    206,260,000
    Accumulated other comprehensive income                                           3,050,000         62,000
    Retained earnings                                                              147,632,000    110,682,000
                                                                                  ------------   ------------
      Total shareholders' equity                                                   371,601,000    317,258,000
                                                                                  ------------   ------------
      Total liabilities and shareholders' equity                                  $631,302,000   $534,815,000
                                                                                  ============   ============
</TABLE>

        The accompanying notes are an integral part of these consolidated
                              financial statements.

                                       44
<PAGE>

                       HEICO CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                FOR THE YEAR ENDED OCTOBER 31,
                                                        -----------------------------------------------
                                                            2007             2006             2005
                                                        -------------    -------------    -------------
<S>                                                     <C>              <C>              <C>
Net sales                                               $ 507,924,000    $ 392,190,000    $ 269,647,000
                                                        -------------    -------------    -------------
Operating costs and expenses:
     Cost of sales                                        330,466,000      249,677,000      168,651,000
     Selling, general, and administrative expenses         91,444,000       75,646,000       56,347,000
                                                        -------------    -------------    -------------
Total operating costs and expenses                        421,910,000      325,323,000      224,998,000
                                                        -------------    -------------    -------------
Operating income                                           86,014,000       66,867,000       44,649,000

Interest expense                                           (3,293,000)      (3,523,000)      (1,136,000)
Interest and other income                                      95,000          639,000          528,000
                                                        -------------    -------------    -------------
Income before income taxes and minority interests          82,816,000       63,983,000       44,041,000

Income tax expense                                         27,530,000       20,900,000       16,100,000
                                                        -------------    -------------    -------------
Income before minority interests                           55,286,000       43,083,000       27,941,000

Minority interests' share of income                        16,281,000       11,195,000        5,129,000
                                                        -------------    -------------    -------------
Net income                                              $  39,005,000    $  31,888,000    $  22,812,000
                                                        =============    =============    =============
Net income per share:
     Basic                                              $        1.52    $        1.27    $         .93
     Diluted                                            $        1.45    $        1.20    $         .87

Weighted average number of common shares outstanding:
     Basic                                                 25,715,899       25,084,532       24,460,185
     Diluted                                               26,931,048       26,597,603       26,323,302
</TABLE>

   The accompanying notes are an integral part of these consolidated financial
                                   statements.

                                       45
<PAGE>

                       HEICO CORPORATION AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME

<TABLE>
<CAPTION>
                                                                                      ACCUMULATED
                                                         CLASS A      CAPITAL IN         OTHER
                                             COMMON       COMMON       EXCESS OF     COMPREHENSIVE     RETAINED      COMPREHENSIVE
                                              STOCK       STOCK        PAR VALUE     INCOME (LOSS)     EARNINGS         INCOME
                                           ----------   ----------   -------------   -------------   -------------   -------------

<S>                                        <C>          <C>          <C>             <C>             <C>             <C>
Balances as of October 31, 2004            $   99,000   $  143,000   $ 187,950,000   $          --   $  59,210,000
Net income                                         --           --              --              --      22,812,000   $  22,812,000
Foreign currency translation adjustments           --           --              --         (65,000)             --         (65,000)
                                                                                                                     -------------
Comprehensive income                               --           --              --              --              --   $  22,747,000
                                                                                                                     =============
Cash dividends ($.05 per share)                    --           --              --              --      (1,224,000)
Tax benefit from stock option exercises            --           --       2,830,000              --              --
Proceeds from stock option exercises            2,000        2,000       1,742,000              --              --
Stock option compensation expense                  --           --           2,000              --              --
Other                                              --           --          (1,000)             --           1,000
                                           ----------   ----------   -------------   -------------   -------------
Balances as of October 31, 2005               101,000      145,000     192,523,000         (65,000)     80,799,000
Net income                                         --           --              --              --      31,888,000   $  31,888,000
Foreign currency translation adjustments           --           --              --         127,000              --         127,000
                                                                                                                     -------------
Comprehensive income                               --           --              --              --              --   $  32,015,000
                                                                                                                     =============
Cash dividends ($.08 per share)                    --           --              --              --      (2,004,000)
Tax benefit from stock option exercises            --           --       7,300,000              --              --
Proceeds from stock option exercises            2,000        6,000       5,063,000              --              --
Stock option compensation expense                  --           --       1,373,000              --              --
Other                                              --           --           1,000              --          (1,000)
                                           ----------   ----------   -------------   -------------   -------------
Balances as of October 31, 2006               103,000      151,000     206,260,000          62,000     110,682,000
Net income                                         --           --              --              --      39,005,000   $  39,005,000
Foreign currency translation adjustments           --           --              --       2,966,000              --       2,966,000
                                                                                                                     -------------
Comprehensive income                               --           --              --              --              --   $  41,971,000
                                                                                                                     =============
Cash dividends ($.08 per share)                    --           --              --              --      (2,056,000)
Tax benefit from stock option exercises            --           --       6,873,000              --              --
Proceeds from stock option exercises            2,000        5,000       6,868,000              --              --
Stock option compensation expense                  --           --         658,000              --              --
Other                                              --           --          (1,000)         22,000           1,000
                                           ----------   ----------   -------------   -------------   -------------
Balances as of October 31, 2007            $  105,000   $  156,000   $ 220,658,000   $   3,050,000   $ 147,632,000
                                           ==========   ==========   =============   =============   =============
</TABLE>

   The accompanying notes are an integral part of these consolidated financial
                                   statements.

                                       46
<PAGE>

                       HEICO CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                FOR THE YEAR ENDED OCTOBER 31,
                                                                         --------------------------------------------
                                                                             2007            2006            2005
                                                                         ------------    ------------    ------------
<S>                                                                      <C>             <C>             <C>
Operating Activities:
  Net income                                                             $ 39,005,000    $ 31,888,000    $ 22,812,000
  Adjustments to reconcile net income to net cash provided by
   operating activities:
    Depreciation and amortization                                          12,167,000      10,565,000       7,409,000
    Deferred income tax provision                                           2,819,000       2,557,000       3,031,000
    Minority interests' share of income                                    16,281,000      11,195,000       5,129,000
    Tax benefit from stock option exercises                                 6,873,000       2,210,000       2,830,000
    Excess tax benefit from stock option exercises                         (5,262,000)     (1,550,000)             --
    Stock option compensation expense                                         658,000       1,373,000           2,000
    Changes in assets and liabilities, net of acquisitions:
      Increase in accounts receivable                                     (13,790,000)     (5,018,000)     (6,852,000)
      Increase in inventories                                             (14,701,000)    (13,148,000)    (10,113,000)
      (Increase) decrease in prepaid expenses and other current assets       (266,000)        431,000        (119,000)
      Increase in trade accounts payable                                    4,265,000       3,696,000       2,301,000
      Increase in accrued expenses and other current liabilities            7,013,000       1,698,000       7,247,000
      Increase in income taxes payable                                      1,523,000         362,000       2,163,000
    Other                                                                     865,000         649,000         (32,000)
                                                                         ------------    ------------    ------------
  Net cash provided by operating activities                                57,450,000      46,908,000      35,808,000
                                                                         ------------    ------------    ------------

Investing Activities:
  Acquisitions and related costs, net of cash acquired                    (48,367,000)    (58,117,000)    (41,500,000)
  Capital expenditures                                                    (12,886,000)     (9,964,000)     (8,273,000)
  Proceeds from sale of building held for sale                                     --              --       3,520,000
  Other                                                                        59,000         520,000         357,000
                                                                         ------------    ------------    ------------
  Net cash used in investing activities                                   (61,194,000)    (67,561,000)    (45,896,000)
                                                                         ------------    ------------    ------------

Financing Activities:
  Borrowings on revolving credit facility                                  46,000,000      59,000,000      37,000,000
  Payments on revolving credit facility                                   (46,000,000)    (38,000,000)    (21,000,000)
  Borrowings on short-term line of credit                                   1,000,000       1,000,000              --
  Payments on short-term line of credit                                    (1,000,000)     (3,000,000)             --
  Cash dividends paid                                                      (2,056,000)     (2,004,000)     (1,224,000)
  Proceeds from stock option exercises                                      6,875,000       5,071,000       1,746,000
  Excess tax benefit from stock option exercises                            5,262,000       1,550,000              --
  Distributions to minority interest owners                                (6,448,000)     (3,306,000)       (653,000)
  Other                                                                       (57,000)        (26,000)       (647,000)
                                                                         ------------    ------------    ------------
  Net cash provided by financing activities                                 3,576,000      20,285,000      15,222,000
                                                                         ------------    ------------    ------------
Effect of exchange rate changes on cash                                       116,000          37,000         (18,000)
                                                                         ------------    ------------    ------------
Net (decrease) increase in cash and cash equivalents                          (52,000)       (331,000)      5,116,000
Cash and cash equivalents at beginning of year                              4,999,000       5,330,000         214,000
                                                                         ------------    ------------    ------------
Cash and cash equivalents at end of year                                 $  4,947,000    $  4,999,000    $  5,330,000
                                                                         ============    ============    ============
</TABLE>

        The accompanying notes are an integral part of these consolidated
                              financial statements.

                                       47
<PAGE>

                       HEICO CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

        HEICO Corporation, through its principal subsidiaries HEICO Aerospace
Holdings Corp. ("HEICO Aerospace") and HEICO Electronic Technologies Corp.
("HEICO Electronic") and their subsidiaries (collectively, the "Company"), is
principally engaged in the design, manufacture, and sale of aerospace, defense,
and electronics related products and services throughout the United States and
internationally. The Company's customer base is primarily the commercial
aviation, defense, space, and electronics industries.

BASIS OF PRESENTATION

        The consolidated financial statements include the accounts of HEICO
Corporation and its subsidiaries, all of which are wholly-owned except for HEICO
Aerospace, which is 20%-owned by Lufthansa Technik AG, the technical services
subsidiary of Lufthansa German Airlines. In addition, HEICO Aerospace
consolidates a joint venture formed in March 2001, which is 16%-owned by
American Airlines' parent company, AMR Corporation, a 51%-owned subsidiary, an
80%-owned subsidiary, and a 90%-owned subsidiary. Also, HEICO Electronic
consolidates two subsidiaries, which are 80% and 85.75% owned, respectively.
(See Note 2, Acquisitions, of the Notes to Consolidated Financial Statements.)
All significant intercompany balances and transactions are eliminated.

USE OF ESTIMATES

        The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities as of
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

CASH AND CASH EQUIVALENTS

        For purposes of the consolidated financial statements, the Company
considers all highly liquid investments purchased with an original maturity of
three months or less to be cash equivalents.

ACCOUNTS RECEIVABLE

        Accounts receivable consist of amounts billed and currently due from
customers and unbilled costs and estimated earnings related to revenues from
certain fixed price contracts recognized on the percentage-of-completion method
that has been recognized for accounting purposes, but not yet billed to
customers. The valuation of accounts receivable requires that the Company set up
an allowance for estimated uncollectible accounts and record a corresponding
charge to bad debt expense. The Company estimates uncollectible receivables
based on such factors as its prior experience, its appraisal of a customer's
ability to pay, and economic conditions within and outside of the aviation,
defense, space, and electronics industries.

                                       48
<PAGE>

INVENTORY

        Inventory is stated at the lower of cost or market, with cost being
determined on the first-in, first-out or the average cost basis. Losses, if any,
are recognized fully in the period when identified.

        The Company periodically evaluates the carrying value of inventory,
giving consideration to factors such as its physical condition, sales patterns,
and expected future demand and estimates the amount necessary to write-down its
slow moving, obsolete, or damaged inventory. These estimates could vary
significantly from actual requirements based upon future economic conditions,
customer inventory levels, or competitive factors that were not foreseen or did
not exist when the estimated write-downs were made.

PROPERTY, PLANT AND EQUIPMENT

        Property, plant and equipment is stated at cost. Depreciation and
amortization is provided mainly on the straight-line method over the estimated
useful lives of the various assets. The Company's property, plant and equipment
is depreciated over the following estimated useful lives:

        Buildings and improvements............................   15 to 40 years
        Leasehold improvements................................    2 to 20 years
        Machinery and equipment...............................    3 to 10 years
        Tooling...............................................    2 to 5 years

        The costs of major additions and improvements are capitalized. Leasehold
improvements are amortized over the shorter of the leasehold improvement's
useful life or the lease term. Repairs and maintenance are charged to operations
as incurred. Upon disposition, the cost and related accumulated depreciation are
removed from the accounts and any related gain or loss is reflected in earnings.

GOODWILL AND OTHER INTANGIBLE ASSETS

        The Company tests goodwill for impairment annually as of October 31 or
more frequently if events or changes in circumstances indicate that the carrying
amount of goodwill may not be fully recoverable. The test requires the Company
to compare the fair value of each of its reporting units to its carrying value
to determine potential impairment. If the carrying value of a reporting unit
exceeds its fair value, the implied fair value of that reporting unit's goodwill
is to be calculated and an impairment loss is recognized in the amount by which
the carrying value of a reporting unit's goodwill exceeds its implied fair
value, if any.

        The Company's intangible assets subject to amortization are amortized on
the straight-line method over the following estimated useful lives:

        Customer relationships................................  3 to 7 years
        Intellectual property.................................  4 to 10 years
        Licenses..............................................  12 to 17 years
        Non-compete agreements................................  2 to 7 years
        Patents...............................................  5 to 18 years

        The Company's intangible assets not subject to amortization consist of
trade names. The Company tests each non-amortizing asset for impairment annually
as of October 31, or more frequently if events or changes in circumstances
indicate that the asset might be impaired. The test consists of a

                                       49
<PAGE>

comparison of the fair value of each intangible asset to its carrying amount. If
the carrying amount of an intangible asset exceeds its fair value, an impairment
loss is recognized in an amount equal to that excess.

        Based on its annual impairment tests, the Company determined there is no
impairment of its goodwill or trade names as of October 31, 2007.

FINANCIAL INSTRUMENTS

        The carrying amounts of cash and cash equivalents, accounts receivable,
trade accounts payable, and accrued expenses and other current liabilities
approximate fair value due to the relatively short maturity of the respective
instruments. The carrying value of long-term debt approximates fair market value
due to its variable interest rates.

        Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of temporary cash investments
and trade receivables. The Company places its temporary cash investments with
high credit quality financial institutions and limits the amount of credit
exposure to any one financial institution. Concentrations of credit risk with
respect to trade receivables are limited due to the large number of customers
comprising the Company's customer base and their dispersion across many
different geographical regions.

        Investments are stated at fair value based on quoted market prices.
Investments that are intended to be held for less than one year are included
within prepaid expenses and other current assets in the Company's Consolidated
Balance Sheets, while those intended to be held for longer than one year are
classified as non-current within other assets. Unrealized gains or losses
associated with available-for-sale securities are reported net of tax within
other comprehensive income in shareholders' equity. Unrealized gains or losses
associated with trading securities are recorded as a component of other income
in the Company's consolidated statement of operations

INTEREST RATE SWAP AGREEMENTS

        The Company has previously entered into interest rate swap agreements to
manage interest expense related to its revolving credit facility. Interest rate
risk associated with the Company's variable rate revolving credit facility is
the potential increase in interest expense from an increase in interest rates. A
derivative instrument (e.g. interest rate swap agreement) that hedges the
variability of cash flows related to a recognized liability is designated as a
cash flow hedge.

        On an ongoing basis, the Company assesses whether derivative instruments
used in hedging transactions are highly effective in offsetting changes in cash
flows of the hedged items and therefore qualify as cash flow hedges. For a
derivative instrument that qualifies as a cash flow hedge, the effective portion
of changes in fair value of the derivative is deferred and recorded as a
component of other comprehensive income until the hedged transaction occurs and
is recognized in earnings. All other portions of changes in the fair value of a
cash flow hedge are recognized in earnings immediately.

        The Company did not enter into any interest rate swap agreements in
fiscal 2007, 2006, or 2005.

PRODUCT WARRANTIES

        Product warranty liabilities are estimated at the time of shipment and
recorded as a component of accrued expenses and other current liabilities in the
Company's Consolidated Balance Sheets. The amount recognized is based on
historical claims cost experience.

                                       50
<PAGE>

REVENUE RECOGNITION

        Revenue is recognized on an accrual basis, primarily upon the shipment
of products and the rendering of services. Revenue from certain fixed price
contracts for which costs can be dependably estimated is recognized on the
percentage-of-completion method, measured by the percentage of costs incurred to
date to estimated total costs for each contract. Revisions in cost estimates as
contracts progress have the effect of increasing or decreasing profits in the
period of revision. For fixed price contracts in which costs cannot be
dependably estimated, revenue is recognized on the completed-contract method. A
contract is considered complete when all significant costs have been incurred or
the item has been accepted by the customer. The aggregate effects of changes in
estimates relating to inventories and/or long-term contracts did not have a
significant effect on net income or diluted net income per share in fiscal 2007,
2006, or 2005. Revenues earned from rendering services represented less than 10%
of consolidated net sales for all periods presented.

LONG-TERM CONTRACTS

        Accounts receivable and accrued expenses and other current liabilities
include amounts related to the production of products under fixed-price
contracts exceeding terms of one year. Revenues are recognized on the
percentage-of-completion method for certain of these contracts, measured by the
percentage of costs incurred to date to estimated total costs for each contract.
The percentage of the Company's net sales recognized under the
percentage-of-completion method was approximately 3%, 4%, and 6% in fiscal 2007,
2006, and 2005, respectively. This method is used because management considers
costs incurred to be the best available measure of progress on these contracts.
Revenues are recognized on the completed-contract method for certain other
contracts. This method is used when the Company does not have adequate
historical data to ensure that estimates are reasonably dependable.

        Contract costs include all direct material and labor costs and those
indirect costs related to contract performance, such as indirect labor,
supplies, tools, repairs, and depreciation costs. Selling, general, and
administrative costs are charged to expense as incurred. Provisions for
estimated losses on uncompleted contracts are made in the period in which such
losses are determined. Variations in actual labor performance, changes to
estimated profitability, and final contract settlements may result in revisions
to cost estimates and are recognized in income in the period in which the
revisions are determined.

        The asset, "costs and estimated earnings in excess of billings" on
uncompleted percentage-of-completion contracts, included in accounts receivable,
represents revenues recognized in excess of amounts billed. The liability,
"billings in excess of costs and estimated earnings," included in accrued
expenses and other current liabilities, represents billings in excess of
revenues recognized on contracts accounted for under either the
percentage-of-completion method or the completed-contract method. Billings are
made based on the completion of certain milestones as provided for in the
contracts.

INCOME TAXES

        Income tax expense includes United States and foreign income taxes, plus
the provision for United States taxes on undistributed earnings of foreign
subsidiaries not deemed to be permanently invested. Deferred income taxes are
provided on elements of income that are recognized for financial accounting
purposes in periods different from periods recognized for income tax purposes.

NET INCOME PER SHARE

        Basic net income per share is computed by dividing net income by the
weighted average number of common shares outstanding during the period. Diluted
net income per share is computed by dividing

                                       51
<PAGE>

net income by the weighted average number of common shares outstanding during
the period plus potentially dilutive common shares arising from the assumed
exercise of stock options, if dilutive. The dilutive impact of potentially
dilutive common shares is determined by applying the treasury stock method.

FOREIGN CURRENCY TRANSLATION

        All assets and liabilities of foreign subsidiaries that do not utilize
the United States dollar as its functional currency are translated at year-end
rates of exchange, while revenues and expenses are translated at monthly
weighted average rates of exchange for the year. Unrealized translation gains or
losses are reported as foreign currency translation adjustments through other
comprehensive income in shareholders' equity.

STOCK BASED COMPENSATION

        Effective November 1, 2005, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 123(R), "Share-Based Payment," as interpreted
by the Securities and Exchange Commission in Staff Accounting Bulletin No. 107
and began recording compensation expense associated with stock options. SFAS No.
123(R) requires companies to recognize in the statement of operations the cost
of employee services received in exchange for awards of equity instruments based
on the grant date fair value of those awards (with limited exceptions). Prior to
the adoption of SFAS No. 123(R), the Company accounted for stock-based employee
compensation using the intrinsic value method prescribed by Accounting
Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to
Employees." Accordingly, compensation expense had only been recorded in the
consolidated financial statements for any stock options granted below fair
market value of the underlying stock as of the date of grant.

        The Company adopted the modified prospective transition method provided
for under SFAS No. 123(R) and, accordingly, prior period results have not been
retroactively adjusted. The modified prospective transition method requires that
stock-based compensation expense be recorded for (i) all new stock options
granted on or after November 1, 2005 based on the grant date fair value
determined under the provisions of SFAS No. 123(R) and (ii) all unvested stock
options granted prior to November 1, 2005 based on the grant date fair value as
determined under the provisions of SFAS No. 123.

        Beginning in fiscal 2006, the Company has presented the cash flows
resulting from tax deductions in excess of the cumulative compensation cost
recognized for stock options exercised ("excess tax benefit") as a financing
activity in the Consolidated Statements of Cash Flows as prescribed by SFAS No.
123(R). Prior to the adoption of SFAS No. 123(R), the Company presented all tax
benefits resulting from stock option exercises as an operating activity in the
Consolidated Statements of Cash Flows. For the fiscal years ended October 31,
2007 and 2006, the excess tax benefit from stock option exercises of $5,262,000
and $1,550,000, respectively, was presented in financing activities in the
Company's Consolidated Statements of Cash Flows.

        The Company has calculated the amount of excess tax benefit that is
available to offset future write-offs of deferred tax assets, or additional
paid-in-capital pool ("APIC Pool"), in accordance with paragraph 81 of SFAS No.
123(R). Accordingly, the Company tracks each stock option award granted after
November 1, 1996 on an employee-by-employee basis and on a grant-by-grant basis
to determine whether there is a tax benefit situation or tax deficiency
situation for each such award. The Company then compares the fair value expense
to the tax deduction received for each stock option grant and aggregates the
benefits and deficiencies, which have the effect of increasing or decreasing,
respectively, the APIC Pool. Should the amount of future tax deficiencies be
greater than the available APIC Pool, the Company will record the excess as
income tax expense in its consolidated statements of operations.

                                       52
<PAGE>

        As a result of the adoption of SFAS No. 123(R), the Company's net income
for the fiscal years ended October 31, 2007 and 2006 includes compensation
expense of $658,000 and $1,373,000, respectively, and an income tax benefit
related to the Company's stock options of $165,000 and $391,000, respectively.
Substantially all of the stock option compensation expense was recorded as a
component of selling, general and administrative expenses in the Company's
Consolidated Statements of Operations.

        The following table illustrates the pro forma effects on net income and
net income per share as if the Company had applied the fair value recognition
provisions of SFAS No. 123 to stock-based compensation for the fiscal year ended
October 31, 2005:

         Net income, as reported                                   $ 22,812,000

         Add:  Stock-based employee compensation expense included
         in reported net income, net of tax                               2,000

         Deduct:  Stock-based employee compensation expense
         determined under a fair value method, net of tax            (1,162,000)
                                                                   ------------
         Pro forma net income                                      $ 21,652,000
                                                                   ============

         Net income per share:
           Basic - as reported                                     $        .93
           Basic - pro forma                                       $        .89

           Diluted - as reported                                   $        .87
           Diluted - pro forma                                     $        .82

        Further information regarding stock options can be found in Note 8,
Stock Options, of the Notes to Consolidated Financial Statements.

CONTINGENCIES

        Losses for contingencies such as product warranties, litigation, and
environmental matters are recognized in income when they are probable and can be
reasonably estimated. Gain contingencies are not recognized in income until they
have been realized.

NEW ACCOUNTING PRONOUNCEMENTS

        In May 2005, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 154, "Accounting Changes and Error Corrections, a replacement of APB
Opinion No. 20 and FASB Statement No. 3." SFAS No. 154 changes the requirements
for the accounting and reporting of a change in accounting principle. The
Statement eliminates the requirement in APB Opinion No. 20 to include the
cumulative effect of changes in accounting principle in the income statement in
the period of change, and instead requires that changes in accounting principle
be retrospectively applied unless it is impracticable to determine either the
period-specific effects or the cumulative effect of the change. The Statement
applies to all voluntary changes in accounting principle. SFAS No. 154 is
effective for changes made in fiscal years beginning after December 15, 2005.
The adoption of SFAS No. 154 did not have a material effect on the Company's
results of operations, financial position, or cash flows.

        In June 2006, the FASB issued FASB Interpretation No. 48 ("FIN 48")
"Accounting for Uncertainty in Income Taxes--an interpretation of FASB Statement
No. 109," which seeks to reduce the diversity in practice associated with the
accounting and reporting for uncertain income tax positions. This Interpretation
prescribes a comprehensive model for the financial statement recognition,
measurement,

                                       53
<PAGE>

presentation, and disclosure of uncertain tax positions taken or expected to be
taken in an income tax return. FIN 48 presents a two-step process for evaluating
a tax position. The first step is to determine whether it is
more-likely-than-not that a tax position will be sustained upon examination,
based on the technical merits of the position. The second step is to measure the
benefit to be recorded from tax positions that meet the more-likely-than-not
recognition threshold, by determining the largest amount of tax benefit that is
greater than 50 percent likely of being realized upon ultimate settlement, and
recognizing that amount in the financial statements. FIN 48 is effective for
fiscal years beginning after December 15, 2006, or in fiscal 2008 for HEICO. The
Company is currently evaluating the impact that the adoption of FIN 48 will have
on it results of operations, financial position and cash flows.

        In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements," which provides enhanced guidance for using fair value to measure
assets and liabilities. SFAS No. 157 provides a common definition of fair value
and establishes a framework to make the measurement of fair value in accordance
with generally accepted accounting principles more consistent and comparable.
SFAS No. 157 also requires expanded disclosures to provide information about the
extent to which fair value is used to measure assets and liabilities, the
methods and assumptions used to measure fair value, and the effect of fair value
measures on earnings. SFAS No. 157 is effective for fiscal years beginning after
November 15, 2007, or in fiscal 2009 for HEICO. The Company is currently in the
process of evaluating the effect that the adoption of SFAS No. 157 will have on
its results of operations, financial position, and cash flows.

        In September 2006, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") No. 108, "Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements." SAB No. 108 was issued in order to eliminate the diversity in
practice surrounding how public companies quantify financial statement
misstatements. SAB No. 108 requires that registrants quantify errors using both
a balance sheet (iron curtain) approach and an income statement (rollover)
approach then evaluate whether either approach results in a misstated amount
that, when all relevant quantitative and qualitative factors are considered, is
material. SAB No. 108 is effective for fiscal years ending after November 15,
2006. The adoption of SAB No. 108 did not have a material effect on the
Company's results of operations, financial position, or cash flows.

        In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option
for Financial Assets and Financial Liabilities - Including an Amendment of FASB
Statement No. 115." SFAS No. 159 permits entities to choose to measure certain
financial assets and liabilities at fair value and report unrealized gains and
losses on items for which the fair value option has been elected in earnings.
SFAS No. 159 is effective for fiscal years beginning after November 15, 2007, or
in fiscal 2009 for HEICO. The Company has not yet determined if it will elect to
apply any of the provisions of SFAS No. 159 and is currently evaluating the
effect, if any, the adoption of SFAS No. 159 will have on its results of
operations, financial position, and cash flows.

        In December 2007, the FASB issued SFAS No. 141(R), "Business
Combinations." SFAS No. 141(R) establishes principles and requirements for how
an acquirer recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, the goodwill acquired, and any
noncontrolling interest in the acquiree. This Statement also establishes
disclosure requirements to enable the evaluation of the nature and financial
effect of the business combination. SFAS No. 141(R) is effective for fiscal
years beginning after December 15, 2008, or in fiscal 2010 for HEICO. The
Company is in the process of evaluating the effect that the adoption of SFAS No.
141(R) will have on its results of operations, financial position, and cash
flows.

        In December 2007, the FASB issued SFAS No. 160, "Noncontrolling
Interests in Consolidated Financial Statements - an amendment of ARB No. 51."
SFAS No. 160 establishes accounting and

                                       54
<PAGE>

reporting standards pertaining to ownership interests in subsidiaries held by
parties other than the parent, the amount of net income attributable to the
parent and to the noncontrolling interest, changes in a parent's ownership
interest, and the valuation of any retained noncontrolling equity investment
when a subsidiary is deconsolidated. This Statement also establishes disclosure
requirements that clearly identify and distinguish between the interests of the
parent and the interests of the noncontrolling owners. SFAS No. 160 is effective
for fiscal years beginning on or after December 15, 2008, or in fiscal 2010 for
HEICO. The Company is in the process of evaluating the effect that the adoption
of SFAS No. 160 will have on its results of operations, financial position, and
cash flows.

2.   ACQUISITIONS

        In December 2004, the Company, through its HEICO Electronic Technologies
Corp. subsidiary ("HEICO Electronic"), acquired substantially all of the assets
and assumed certain liabilities of Connectronics Corp. and its affiliate,
Wiremax, Ltd. (collectively "Connectronics"). The purchase price was principally
paid in cash using proceeds from the Company's revolving credit facility.
Connectronics is engaged in the production of specialty high voltage
interconnection devices and wire primarily for defense applications and other
markets.

        In February 2005, the Company, through HEICO Electronic, acquired
substantially all of the assets and assumed certain liabilities of Lumina Power,
Inc. ("Lumina"). The purchase price was principally paid in cash using proceeds
from the Company's revolving credit facility. Lumina is engaged in the design
and manufacture of power supplies for the laser industry.

        In September 2005, the Company, through HEICO Electronic, acquired an
85% interest in the stock of HVT Group, Inc. ("HVT") with the remaining 15%
minority interest held by certain members of HVT's management group. The
purchase price was principally paid in cash using proceeds from the Company's
revolving credit facility. The minority interest holders have the right to cause
the Company to purchase their interests over a four-year period starting around
the second anniversary of the acquisition, or sooner under certain conditions.
During fiscal 2007, some of the minority interest holders exercised their option
to cause the Company to purchase their aggregate 3% interest over the four-year
period ending in fiscal 2010. Accordingly, the Company increased its ownership
in the subsidiary by .75% (or one-fourth of such minority interest holders'
aggregate interest) to 85.75% effective April 2007. HVT is a provider of very
high voltage interconnection devices and cable assemblies for the medical
equipment, defense, and industrial markets.

        In September 2005, the Company, through its HEICO Aerospace Holdings
Corp. subsidiary ("HEICO Aerospace"), acquired certain assets and assumed
certain liabilities in an aerospace and defense product line acquisition, which
will be used in the operations of one of its existing subsidiaries. The purchase
price was paid in cash provided by operating activities.

        In November 2005, the Company, through HEICO Aerospace, acquired a 51%
interest in Seal Dynamics LLC ("Seal LLC"). The remaining 49% interest is
principally owned by a member of Seal LLC's management group. The purchase price
was principally paid in cash using proceeds from the Company's revolving credit
facility. The Company has the right to purchase the remaining 49% minority
interest over a seven-year period beginning approximately after the second
anniversary of the acquisition, or sooner under certain conditions, and the
minority interest holders have the right to cause the Company to purchase the
same equity interest over the same period. Seal LLC is a distributor and
designer of FAA-approved hydraulic, pneumatic, mechanical, and
electro-mechanical components for the commercial, regional, and general aviation
markets.

                                       55
<PAGE>

        In November 2005, the Company, through HEICO Electronic, acquired all of
the stock of Engineering Design Team, Inc. and substantially all of the assets
of its affiliate (collectively "EDT"). The purchase price was principally paid
in cash using proceeds from the Company's revolving credit facility. EDT
specializes in the design, manufacture, and sale of advanced high-technology,
high-speed interface products that link devices such as telemetry receivers,
digital cameras, high resolution scanners, simulation systems, and test systems
to almost any computer. EDT's products are utilized in homeland security,
defense, medical, research, astronomical, and other applications across numerous
industries.

        In May 2006, the Company, through HEICO Aerospace, acquired all of the
stock of Arger Enterprises, Inc. and its related companies (collectively
"Arger"). The purchase price was principally paid in cash using proceeds from
the Company's revolving credit facility. Arger designs and distributes
FAA-approved aircraft and engine parts primarily for the commercial aviation
market. The Company has since combined the operations of Arger within other
subsidiaries of HEICO Aerospace. As of the acquisition date, the Company
recognized a $1.8 million restructuring liability as part of the acquisition
costs consisting principally of employee termination and relocation costs,
moving costs and associated expenses, and contract termination costs. During the
remainder of fiscal 2006, $1.1 million of such accrued costs were paid and $.6
million were deemed not necessary and reversed. The remaining $.1 million of
costs was paid during the first quarter of fiscal 2007.

        In September 2006, the Company, through HEICO Aerospace, acquired an 80%
interest in the business, assets, and certain liabilities of Prime Air, Inc.,
and its affiliate (collectively "Prime"). Under the transaction, a new
subsidiary was formed, Prime Air, LLC ("Prime Air"), which acquired
substantially all of the assets and assumed certain liabilities of Prime. Prime
Air is owned 80% by the Company and 20% by certain members of Prime's management
group. The purchase price was principally paid in cash using proceeds from the
Company's revolving credit facility. The Company has the right to purchase the
remaining 20% minority interests beginning at approximately the eighth
anniversary of the acquisition, or sooner under certain conditions, and the
minority interest holders have the right to cause the Company to purchase the
same equity interest over the same period. Prime Air provides commercial
airlines, regional operators, asset management companies, and MRO providers with
high quality and cost effective niche accessory component exchange services as
an alternative to OEMs' spares services.

        During the first quarter of fiscal 2007, the Company, through HEICO
Aerospace, acquired an additional 10% of the equity interest in one of its
subsidiaries, which increased the Company's ownership interest to 90%. The
purchase price was paid using cash provided by operating activities.

        In April 2007, the Company, through HEICO Electronic, acquired all the
stock of FerriShield, Inc. ("FerriShield"). The purchase price was principally
paid in cash using proceeds from the Company's revolving credit facility.
FerriShield is engaged in the design and manufacture of Radio Frequency
Interference and Electromagnetic Frequency Interference Suppressors for a
variety of markets. The Company is in the process of integrating FerriShield
into the operations of one of its existing subsidiaries.

        In May 2007, the Company, through HEICO Aerospace, acquired certain
assets of a supplier. The acquired assets were integrated into one of its
existing subsidiaries and will be utilized to bring certain manufacturing
operations in-house. The purchase price was paid using cash provided by
operating activities.

        In August 2007, the Company, through HEICO Aerospace, acquired
substantially all of the assets and assumed certain liabilities of a U.S.
company that designs and manufactures FAA-approved aircraft and engine parts
primarily for the commercial aviation market. The purchase price was principally
paid in cash using proceeds from the Company's revolving credit facility.

                                       56
<PAGE>

        In September 2007, the Company, through HEICO Electronic, acquired all
of the stock of EMD Technologies Inc. ("EMD"). The purchase price was
principally paid in cash using proceeds from the Company's revolving credit
facility. Subject to meeting certain earnings objectives during the first five
years following the acquisition, the Company may be obligated to pay additional
purchase consideration of up to $76.9 million in aggregate. EMD designs and
manufactures high voltage energy generators for medical, baggage inspection, and
industrial imaging manufacturers and high frequency power delivery systems for
the commercial sign industry.

        As part of the purchase agreement associated with certain acquisitions,
the Company may be obligated to pay additional purchase consideration based on
the acquired subsidiary meeting certain earnings objectives following the
acquisition. During the first quarter of fiscal 2007 and 2006, the Company,
through HEICO Electronic, paid $7.3 million and $2.2 million, respectively, of
such additional purchase consideration related to acquisitions made in previous
years, of which $7.2 million and $2.2 million, respectively, was accrued as of
October 31, 2006 and 2005, respectively. The Company accrues an estimate of
additional purchase consideration when the earnings objectives are met. As of
October 31, 2007, the Company, through HEICO Aerospace and HEICO Electronic,
accrued $7.0 million and $4.7 million, respectively, of additional purchase
consideration related to prior year acquisitions, which it expects to pay in
fiscal 2008. Information regarding additional purchase consideration related to
acquisitions may be found in Note 15, Commitments and Contingencies -
Acquisitions, of the Notes to Consolidated Financial Statements.

        All of the acquisitions described above were accounted for using the
purchase method of accounting. The purchase price of each acquisition was not
significant to the Company's consolidated financial statements. The results of
operations of each acquired company were included in the Company's results of
operations from their effective acquisition date. The pro forma consolidated
operating results assuming each fiscal 2005 acquisition had been consummated as
of the beginning of the fiscal year would not have been materially different
from the reported results. The following table presents the Company's unaudited
pro forma consolidated operating results assuming the fiscal 2007 and 2006
acquisitions had been consummated as of the beginning of fiscal 2006. The pro
forma financial information is presented for comparative purposes only and is
not necessarily indicative of the results of operations that actually would have
been achieved if the acquisitions had taken place as of the beginning fiscal
2006. The unaudited pro forma financial information includes adjustments to
historical amounts such as additional amortization expense related to acquired
intangible assets, increased interest expense associated with borrowings to
finance the acquisitions, and, when applicable, incremental minority interest in
net income.

                                  FOR THE YEAR ENDED OCTOBER 31,
                                 -------------------------------
                                      2007             2006
                                 --------------   --------------
         Net sales               $  522,224,000   $  445,240,000
         Net income              $   38,076,000   $   30,743,000
         Net income per share:
             Basic               $         1.48   $         1.23
             Diluted             $         1.41   $         1.16

        The allocation of the purchase price of each acquisition to the tangible
and identifiable intangible assets acquired and liabilities assumed is based on
their estimated fair values as of the date of acquisition. The Company
determines the fair values of such assets and liabilities, generally in
consultation with third-party valuation advisors. The allocation of the purchase
price of the fiscal 2007 acquisitions to the tangible and identifiable
intangible assets acquired and liabilities assumed in these consolidated
financial statements is preliminary until the Company obtains final information
regarding their fair values.

                                       57
<PAGE>

The excess of the purchase price over the net of the amounts assigned to assets
acquired and liabilities assumed has been recorded as goodwill (See Note 16,
Supplemental Disclosures of Cash Flow Information, of the Notes to Consolidated
Financial Statements). The aggregate cost of acquisitions, including payments
made in cash and contingent payments, was $48.4 million, $58.1 million, and
$41.5 million in fiscal 2007, 2006, and 2005, respectively.

3.   SELECTED FINANCIAL STATEMENT INFORMATION

ACCOUNTS RECEIVABLE

                                                       AS OF OCTOBER 31,
                                                  ----------------------------
                                                      2007            2006
                                                  ------------    ------------
         Accounts receivable                      $ 84,111,000    $ 67,905,000
         Less:  Allowance for doubtful accounts     (1,712,000)     (2,893,000)
                                                  ------------    ------------
           Accounts receivable, net               $ 82,399,000    $ 65,012,000
                                                  ============    ============

        The $1.2 million decrease in the Company's allowance for doubtful
accounts is principally as a result of a sale and associated write-off in the
second quarter as well as a write-off during the third quarter of fiscal 2007 of
accounts receivable for certain customers in the aviation industry that were
fully reserved in fiscal 2005 when the customers filed for bankruptcy. The
proceeds from the aforementioned sale did not have a material effect on net
income or diluted net income per share.

COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED PERCENTAGE-OF-COMPLETION CONTRACTS

<TABLE>
<CAPTION>
                                                                       AS OF OCTOBER 31,
                                                                  ----------------------------
                                                                      2007            2006
                                                                  ------------    ------------
      <S>                                                         <C>             <C>
      Costs incurred on uncompleted contracts                     $ 21,832,000    $ 16,428,000
      Estimated earnings                                            13,111,000      12,221,000
                                                                  ------------    ------------
                                                                    34,943,000      28,649,000
      Less:  Billings to date                                      (25,661,000)    (21,614,000)
                                                                  ------------    ------------
                                                                  $  9,282,000    $  7,035,000
                                                                  ============    ============
      Included in accompanying Consolidated Balance
        Sheets under the following captions:
          Accounts receivable, net (costs and estimated
           earnings in excess of billings)                        $  9,300,000    $  7,204,000
          Accrued expenses and other current liabilities
           (billings in excess of costs and estimated earnings)        (18,000)       (169,000)
                                                                  ------------    ------------
                                                                  $  9,282,000    $  7,035,000
                                                                  ============    ============
</TABLE>

        Changes in estimates did not have a material effect on net income or
diluted net income per share in fiscal 2007, 2006, or 2005.

INVENTORIES

                                                        AS OF OCTOBER 31,
                                                   ----------------------------
                                                       2007            2006
                                                   -------------   ------------
      Finished products                            $  61,592,000   $ 52,245,000
      Work in process                                 15,406,000     13,805,000
      Materials, parts, assemblies, and supplies      38,772,000     31,233,000
                                                   -------------   ------------
      Inventories, net                             $ 115,770,000   $ 97,283,000
                                                   =============   ============

        Inventories related to long-term contracts were not significant as of
October 31, 2007 and 2006.

                                       58
<PAGE>

PROPERTY, PLANT AND EQUIPMENT

                                                       AS OF OCTOBER 31,
                                                 ------------------------------
                                                     2007             2006
                                                 -------------    -------------
Land                                             $   3,656,000    $   3,155,000
Buildings and improvements                          30,732,000       27,724,000
Machinery, equipment and tooling                    65,242,000       59,052,000
Construction in progress                             6,339,000        3,796,000
                                                 -------------    -------------
                                                   105,969,000       93,727,000
Less: Accumulated depreciation and amortization    (50,415,000)     (44,238,000)
                                                 -------------    -------------
  Property, plant and equipment, net             $  55,554,000    $  49,489,000
                                                 =============    =============

        The amounts set forth above include tooling costs having a net book
value of $4,165,000 and $3,910,000 as of October 31, 2007 and 2006,
respectively. Amortization expense on capitalized tooling was $1,448,000,
$1,304,000, and $1,346,000 for the fiscal years ended October 31, 2007, 2006,
and 2005, respectively. Expenditures for capitalized tooling costs were
$1,634,000, $1,363,000, and $885,000 in fiscal 2007, 2006, and 2005,
respectively.

        Depreciation and amortization expense, exclusive of tooling, on
property, plant and equipment was $6,678,000, $5,786,000, and $5,574,000 for the
fiscal years ended October 31, 2007, 2006, and 2005, respectively.

        Included in the Company's property, plant and equipment is rotable
equipment located at various customer locations in connection with certain
repair and maintenance agreements. The rotables are stated at a net book value
of $1,195,000 and $2,710,000 as of October 31, 2007 and 2006, respectively.
Under the terms of the agreements, the customers may purchase the equipment at
specified prices, which are no less than net book value, upon termination of the
agreements. The equipment is currently being depreciated over its estimated
life.

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

<TABLE>
<CAPTION>
                                                                     AS OF OCTOBER 31,
                                                                ---------------------------
                                                                    2007           2006
                                                                ------------   ------------
      <S>                                                       <C>            <C>
      Accrued employee compensation and related payroll taxes   $ 21,551,000   $ 17,546,000
      Accrued additional purchase consideration                   11,736,000      7,180,000
      Accrued customer rebates and credits                        10,452,000      9,066,000
      Other                                                       10,139,000      7,711,000
                                                                ------------   ------------
        Accrued expenses and other current liabilities          $ 53,878,000   $ 41,503,000
                                                                ============   ============
</TABLE>

OTHER NON-CURRENT LIABILITIES

        Other non-current liabilities include deferred compensation of
$5,201,000 and $4,999,000 as of October 31, 2007 and 2006, respectively,
principally related to elective deferrals of salary and bonuses under a Company
sponsored non-qualified deferred compensation plan available to selected
employees. The Company makes no contributions to this plan. The assets of this
plan related to this deferred compensation liability are held within an
irrevocable trust and classified within other assets (long-term) in the
accompanying Consolidated Balance Sheets.

                                       59
<PAGE>

        During fiscal 2006, the Company established the HEICO Corporation
Leadership Compensation Plan ("LCP"), a nonqualified deferred compensation plan
that conforms to Section 409A of the Internal Revenue Code. The LCP was
effective October 1, 2006 and provides eligible employees, officers, and
directors of the Company the opportunity to voluntarily defer base salary, bonus
payments, commissions, long-term incentive awards, and directors fees, as
applicable, on a pre-tax basis. The Company matches 50% of the first 6% of base
salary deferred by each participant. While the Company has no obligation to do
so, the LCP also provides the Company the opportunity to make discretionary
contributions. The Company's matching contributions and any discretionary
contributions are subject to vesting and forfeiture provisions set forth in the
LCP. Company contributions to the Plan charged to income in fiscal 2007 and
fiscal 2006 totaled $2,119,000 and $985,000, respectively. In the accompanying
Consolidated Balance Sheets, $688,000 was included in accrued expenses and other
current liabilities and $4,586,000 in other non-current liabilities as of
October 31, 2007, and $985,000 was included in accrued expenses and other
current liabilities as of October 31, 2006. The assets of the LCP, totaling
$4,559,000 as of October 31, 2007, are classified within other assets
(long-term) and represent cash surrender values of life insurance policies that
are held within an irrecoverable trust that may be used to satisfy the
obligations under the LCP.

4.   GOODWILL AND OTHER INTANGIBLE ASSETS

        The Company has two operating segments: the Flight Support Group ("FSG")
and the Electronic Technologies Group ("ETG"). Changes in the carrying amount of
goodwill during fiscal 2007 and 2006 by operating segment are as follows:

<TABLE>
<CAPTION>
                                                       SEGMENT
                                            ------------------------------    CONSOLIDATED
                                                 FSG              ETG            TOTALS
                                            -------------    -------------    -------------
<S>                                         <C>              <C>              <C>
Balances as of October 31, 2005             $ 139,343,000    $ 108,886,000    $ 248,229,000
Goodwill acquired                              17,325,000        3,118,000       20,443,000
Accrued additional purchase consideration              --        7,180,000        7,180,000
Adjustments to goodwill                           536,000       (1,272,000)        (736,000)
                                            -------------    -------------    -------------
Balances as of October 31, 2006               157,204,000      117,912,000      275,116,000
Goodwill acquired                               6,210,000       16,550,000       22,760,000
Accrued additional purchase consideration       7,000,000        4,736,000       11,736,000
Foreign currency translation adjustment                --        1,354,000        1,354,000
Adjustments to goodwill                          (725,000)         261,000         (464,000)
                                            -------------    -------------    -------------
Balances as of October 31, 2007             $ 169,689,000    $ 140,813,000    $ 310,502,000
                                            =============    =============    =============
</TABLE>

        The goodwill acquired and accrued additional purchase consideration
recognized during fiscal 2007 and 2006 are a result of the Company's
acquisitions described in Note 2, Acquisitions, of the Notes to Consolidated
Financial Statements. The foreign currency translation adjustment reflects the
weakening of the United States dollar relative to the Canadian dollar subsequent
to the fiscal 2007 acquisition of a Canadian-based subsidiary. This unrealized
translation gain is included in other comprehensive income in the Company's
Consolidated Statements of Shareholders' Equity and Comprehensive Income.
Adjustments to goodwill during fiscal 2007 and 2006 consist primarily of final
purchase price adjustments related to the preliminary allocation of the purchase
price during the allocation period for certain prior year acquisitions to the
assets acquired and liabilities assumed. The Company estimates that
approximately $30 million and $26 million of the goodwill recognized in fiscal
2007 and 2006, respectively, will be deductible for income tax purposes.

                                       60
<PAGE>

        Identifiable intangible assets consist of:

<TABLE>
<CAPTION>
                                    AS OF OCTOBER 31, 2007                          AS OF OCTOBER 31, 2006
                         ---------------------------------------------   ---------------------------------------------
                             GROSS                            NET            GROSS                            NET
                           CARRYING       ACCUMULATED      CARRYING        CARRYING       ACCUMULATED      CARRYING
                            AMOUNT       AMORTIZATION       AMOUNT          AMOUNT       AMORTIZATION       AMOUNT
                         -------------   -------------   -------------   -------------   -------------   -------------
<S>                      <C>             <C>             <C>             <C>             <C>             <C>
Amortizing Assets:
Customer relationships   $  19,784,000   ($  4,912,000)  $  14,872,000   $  13,595,000   ($  2,138,000)  $  11,457,000
Intellectual property        6,204,000      (1,066,000)      5,138,000       1,992,000        (498,000)      1,494,000
Licenses                     1,000,000        (400,000)        600,000       1,000,000        (326,000)        674,000
Non-compete agreements         937,000        (628,000)        309,000         800,000        (434,000)        366,000
Patents                        560,000        (132,000)        428,000         560,000        (102,000)        458,000
                         -------------   -------------   -------------   -------------   -------------   -------------
                            28,485,000      (7,138,000)     21,347,000      17,947,000      (3,498,000)     14,449,000
Non-Amortizing Assets:
Trade names                 13,986,000              --      13,986,000       7,562,000              --       7,562,000
                         -------------   -------------   -------------   -------------   -------------   -------------
                         $  42,471,000   ($  7,138,000)  $  35,333,000   $  25,509,000   ($  3,498,000)  $  22,011,000
                         =============   =============   =============   =============   =============   =============
</TABLE>

        The increase in the gross carrying amount of identifiable intangible
assets as of October 31, 2007 compared to October 31, 2006 principally relates
to such intangible assets recognized in connection with recent acquisitions as
well as the effect of a foreign currency translation adjustment (see Note 2,
Acquisitions, and Note 16, Supplemental Disclosures of Cash Flow Information, of
the Notes to Consolidated Financial Statements). The weighted average
amortization period of the customer relationships, intellectual property, and
non-compete agreements recognized in fiscal 2007 is approximately six years, ten
years, and six years, respectively.

        Amortization expense of other intangible assets was $3,647,000,
$3,057,000, and $193,000 for the fiscal years ended October 31, 2007, 2006, and
2005, respectively. Amortization expense for each of the next five fiscal years
is expected to be $4,915,000 in fiscal 2008, $4,302,000 in fiscal 2009,
$3,788,000 in fiscal 2010, $3,105,000 in fiscal 2011, and $2,352,000 in fiscal
2012.

5.   SHORT-TERM AND LONG-TERM DEBT

        In July 2007, one of the Company's subsidiaries extended a short-term
line of credit with a bank in the amount of $5.0 million, which now expires in
June 2008. The line of credit may be used for inventory purchases and other
working capital needs and is secured by all the assets of the subsidiary.
Advances under the line of credit bear interest at the subsidiary's choice of
the "Prime Rate Advance" (prime rate less .75%) or "LIBOR Advance" (LIBOR rate
plus .75%). As of October 31, 2007 and 2006, no borrowings were outstanding
under the line of credit.

        Long-term debt consists of:

                                                        AS OF OCTOBER 31,
                                                   ----------------------------
                                                       2007            2006
                                                   ------------    ------------
Borrowings under revolving credit facility         $ 53,000,000    $ 53,000,000
Industrial Development Revenue Refunding
  Bonds - Series 1988                                 1,980,000       1,980,000
Notes payable, capital leases and equipment loans       972,000          81,000
                                                   ------------    ------------
                                                     55,952,000      55,061,000
Less:  Current maturities of long-term debt          (2,187,000)        (39,000)
                                                   ------------    ------------
                                                   $ 53,765,000    $ 55,022,000
                                                   ============    ============

                                       61
<PAGE>

        The aggregate amount of long-term debt maturing in each of the next five
fiscal years is $2,187,000 in fiscal 2008, $289,000 in fiscal 2009, $53,263,000
in fiscal 2010, $145,000 in fiscal 2011, and $45,000 in fiscal 2012.

REVOLVING CREDIT FACILITY

        In August 2005, the Company amended its revolving credit facility by
entering into a $130 million Amended and Restated Revolving Credit Agreement
("Credit Facility") with a bank syndicate, which expires in August 2010. The
Credit Facility includes a feature that will allow the Company to increase the
Credit Facility, at its option, up to an aggregate amount of $175 million
through increased commitments from existing lenders or the addition of new
lenders. The Credit Facility may be used for working capital and general
corporate needs of the Company, including letters of credit, capital
expenditures, and to finance acquisitions. In July 2006, the Company amended the
Credit Facility principally to include a less restrictive covenant regarding
requisite approval of acquisitions by the bank syndicate. The prior covenant
relating to approval by the bank syndicate of acquisitions in excess of an
aggregate of $50 million over any twelve-month period was eliminated provided
the Company maintains an agreed upon, or lower, leverage ratio. Advances under
the Credit Facility accrue interest at the Company's choice of the "Base Rate"
or the London Interbank Offered Rate ("LIBOR") plus applicable margins (based on
the Company's ratio of total funded debt to earnings before interest, taxes,
depreciation and amortization, minority interest, and non-cash charges or
"leverage ratio"). The Base Rate is the higher of (i) the Prime Rate or (ii) the
Federal Funds rate plus .50%. The applicable margins range from .75% to 2.00%
for LIBOR based borrowings and from .00% to .50% for Base Rate based borrowings.
A fee is charged on the amount of the unused commitment ranging from .20% to
..50% (depending on the Company's leverage ratio). The Credit Facility also
includes a $10 million swingline sublimit and a $15 million sublimit for letters
of credit. The Credit Facility is secured by substantially all assets other than
real property of the Company and its subsidiaries and contains covenants that
require, among other things, the maintenance of the leverage ratio and a fixed
charge coverage ratio as well as minimum net worth requirements.

        As of October 31, 2007 and 2006, the Company had a total of $53 million
borrowed under its revolving credit facility at weighted average interest rates
of 5.8% and 6.1%, respectively. The amounts were primarily borrowed to fund
acquisitions (see Note 2, Acquisitions, of the Notes to Consolidated Financial
Statements). The revolving credit facility contains both financial and
non-financial covenants. As of October 31, 2007, the Company was in compliance
with all such covenants.

INDUSTRIAL DEVELOPMENT REVENUE BONDS

        The industrial development revenue bonds outstanding as of October 31,
2007 represent bonds issued by Broward County, Florida in 1988 (the "1988
bonds"). The 1988 bonds are due April 2008 and bear interest at a variable rate
calculated weekly (3.3% and 3.6% as of October 31, 2007 and 2006, respectively).
The 1988 bonds as amended are secured by a $2.0 million letter of credit
expiring April 2008 and a mortgage on the related properties pledged as
collateral.

                                       62
<PAGE>

6.   INCOME TAXES

        The provision for income taxes on income before income taxes and
minority interests for each of the three fiscal years ended October 31 is as
follows:

                                       2007           2006           2005
                                   ------------   ------------   ------------
        Current:
          Federal                  $ 20,688,000   $ 15,301,000   $ 11,346,000
          State                       3,746,000      2,780,000      1,667,000
          Foreign                       277,000        262,000         56,000
                                   ------------   ------------   ------------
                                     24,711,000     18,343,000     13,069,000
        Deferred                      2,819,000      2,557,000      3,031,000
                                   ------------   ------------   ------------
        Total income tax expense   $ 27,530,000   $ 20,900,000   $ 16,100,000
                                   ============   ============   ============

        The following table reconciles the federal statutory tax rate to the
Company's effective tax rate for each of the three fiscal years ended
October 31:

<TABLE>
<CAPTION>
                                                                            2007       2006       2005
                                                                           ------     ------     ------
<S>                                                                          <C>        <C>        <C>
Federal statutory tax rate                                                   35.0%      35.0%      35.0%
State taxes, less applicable federal income tax reduction                     3.3        3.5        3.2
Net tax benefit on minority interests' share of income                       (3.4)      (2.7)       (.5)
Net tax benefit on qualified research and development activities claimed     (1.8)      (2.4)        --
Net tax benefit on export sales                                               (.2)      (1.3)      (1.8)
Other, net                                                                    0.3        0.6        0.7
                                                                           ------     ------     ------
  Effective tax rate                                                         33.2%      32.7%      36.6%
                                                                           ======     ======     ======
</TABLE>

        Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. The Company
believes that it is more likely than not that it will generate sufficient future
taxable income to utilize all of its deferred tax assets and has therefore not
recorded a valuation allowance on any such asset. Significant components of the
Company's deferred tax assets and liabilities are as follows:

                                                       AS OF OCTOBER 31,
                                                -------------------------------
                                                     2007             2006
                                                --------------   --------------
   Deferred tax assets:
     Inventories                                $    6,791,000   $    5,650,000
     Deferred compensation liability                 4,603,000        2,289,000
     Customer rebates accrual                          875,000          800,000
     Allowance for doubtful accounts receivable        526,000          895,000
     Other                                           3,454,000        2,764,000
                                                --------------   --------------
       Total deferred tax assets                    16,249,000       12,398,000
                                                --------------   --------------
   Deferred tax liabilities:
     Intangible asset amortization                  37,252,000       27,016,000
     Accelerated depreciation                        3,194,000        3,670,000
     Other                                             964,000          455,000
                                                --------------   --------------
       Total deferred tax liabilities               41,410,000       31,141,000
                                                --------------   --------------
       Net deferred tax liability               $  (25,161,000)  $  (18,743,000)
                                                ==============   ==============

                                       63
<PAGE>

        The net deferred tax liability is classified in the accompanying
Consolidated Balance Sheets as follows:

                                            AS OF OCTOBER 31,
                                     -------------------------------
                                          2007             2006
                                     --------------   --------------
        Current asset                $   10,135,000   $    9,309,000
        Long-term liability              35,296,000       28,052,000
                                     --------------   --------------
        Net deferred tax liability   $  (25,161,000)  $  (18,743,000)
                                     ==============   ==============

        The increase in the net deferred tax liability from $18.7 million as of
October 31, 2006 to $25.2 million as of October 31, 2007 is principally due to
the $2.8 million deferred income tax expense for fiscal 2007, $3.3 million in
net deferred tax liabilities recognized through purchase accounting in
connection with recent acquisitions, and $.3 million from foreign currency
translation adjustments. In fiscal 2006 and 2005, the Company recorded $.9
million and $1.6 million, respectively, in net deferred tax liabilities in
connection with acquisitions. The net deferred tax liabilities recognized
principally relate to differences between the assigned values and the tax bases
of identifiable intangible assets and property, plant and equipment acquired.

        In 1999 - 2002, certain individual holders of non-qualified stock
options issued by the Company exchanged these options for annuity contracts. As
a result, the recognition of compensation income otherwise reportable upon the
exercise or transfer of stock options was deferred by the individual holders.
Based on agreements between the individuals, the Company and the Internal
Revenue Service, the remaining deferred compensation income was accelerated and
reported by the individuals. As a result, the Company's corresponding
compensation deduction benefit was recognized in its fiscal 2005 income tax
return. The Company recorded a $5.1 million tax benefit from stock option
exercises during 2006 by increasing capital in excess of par value, a component
of shareholders' equity, and decreasing income taxes payable.

        The Company claimed an income tax credit for qualified research and
development activities in its income tax return for fiscal 2005 and amended
returns for previous tax years that were filed in the third and fourth quarters
of fiscal 2006 upon completion of a study conducted by outside tax consultants.
The aggregate tax credit, net of expenses, increased net income by approximately
$1.0 million in fiscal 2006.

        In December 2006, Section 41 of the Internal Revenue Code, "Credit for
Increasing Research Activities," was retroactively extended for two years to
cover the period from January 1, 2006 to December 31, 2007. As a result, the
Company recognized an income tax credit for qualified research and development
activities in fiscal 2007 for the full fiscal 2006 year. The tax credit, net of
expenses, increased net income by approximately $.5 million for the fiscal year
ended October 31, 2007.

7.   SHAREHOLDERS' EQUITY

PREFERRED STOCK PURCHASE RIGHTS PLAN

         The Company's Board of Directors adopted, as of November 2, 2003, a
Shareholder Rights Agreement (the "2003 Plan"). Pursuant to the 2003 Plan, the
Board declared a dividend of one preferred share purchase right for each
outstanding share of Common Stock and Class A Common Stock (with the preferred
share purchase rights collectively as the "Rights"). The Rights trade with the
common stock and are not exercisable or transferable apart from the Common Stock
and Class A Common Stock until

                                       64
<PAGE>

after a person or group either acquires 15% or more of the outstanding common
stock or commences or announces an intention to commence a tender offer for 15%
or more of the outstanding common stock. Absent either of the aforementioned
events transpiring, the Rights will expire as of the close of business on
November 2, 2013.

        The Rights have certain anti-takeover effects and, therefore, will cause
substantial dilution to a person or group who attempts to acquire the Company on
terms not approved by the Company's Board of Directors or who acquires 15% or
more of the outstanding common stock without approval of the Company's Board of
Directors. The Rights should not interfere with any merger or other business
combination approved by the Board since they may be redeemed by the Company at
$.01 per Right at any time until the close of business on the tenth day after a
person or group has obtained beneficial ownership of 15% or more of the
outstanding common stock or until a person commences or announces an intention
to commence a tender offer for 15% or more of the outstanding common stock. The
2003 Plan also contains a provision to help ensure a potential acquiror pays all
shareholders a fair price for the Company.

COMMON STOCK AND CLASS A COMMON STOCK

        Each share of Common Stock is entitled to one vote per share. Each share
of Class A Common Stock is entitled to a 1/10 vote per share. Holders of the
Company's Common Stock and Class A Common Stock are entitled to receive when, as
and if declared by the Board of Directors, dividends and other distributions
payable in cash, property, stock, or otherwise. In the event of liquidation,
after payment of debts and other liabilities of the Company, and after making
provision for the holders of preferred stock, if any, the remaining assets of
the Company will be distributable ratably among the holders of all classes of
common stock.

SHARE REPURCHASES

        The Company did not repurchase any shares of its common stock in fiscal
2007, 2006, or 2005.

8.   STOCK OPTIONS

        The Company currently has two stock option plans, the 2002 Stock Option
Plan ("2002 Plan") and the Non-Qualified Stock Option Plan, under which stock
options may be granted. The Company's 1993 Stock Option Plan ("1993 Plan")
terminated in March 2003 on the tenth anniversary of its effective date. No
options may be granted under the 1993 Plan after such termination date; however,
options outstanding as of the termination date may be exercised pursuant to
their terms. In addition, the Company granted stock options to a former
shareholder of an acquired business pursuant to an employment agreement entered
into in connection with the acquisition in fiscal 1999. A total of 2,038,233
shares of the Company's stock are reserved for issuance to employees, directors,
officers, and consultants as of October 31, 2007, including 1,875,330 shares
currently under option and 162,904 shares available for future grants. Options
issued under the 2002 Plan may be designated as incentive stock options or
non-qualified stock options. Incentive stock options are granted with an
exercise price of not less than 100% of the fair market value of the Company's
common stock as of date of grant (110% thereof in certain cases) and are
exercisable in percentages specified as of the date of grant over a period up to
ten years. Only employees are eligible to receive incentive stock options.
Non-qualified stock options under the 2002 Plan may be granted at less than fair
market value and may be immediately exercisable. Options granted under the
Non-Qualified Stock Option Plan may be granted with an exercise price of no less
than the fair market value of the Company's common stock as of the date of grant
and are generally exercisable in four equal annual installments commencing one
year from the date of grant. The options granted pursuant to the 2002 Plan may
be designated as Common Stock and/or Class A Common Stock in

                                       65
<PAGE>

such proportions as shall be determined by the Board of Directors or the Stock
Option Plan Committee in its sole discretion. The stock options granted to a
former shareholder of an acquired business were fully vested and transferable as
of the grant date and expire ten years from the date of grant. The exercise
price of such options was the fair market value as of the date of grant. Options
under all stock option plans expire not later than ten years after the date of
grant, unless extended by the Stock Option Plan Committee or the Board of
Directors.

        Information concerning stock option activity for each of the three
fiscal years ended October 31 is as follows:

<TABLE>
<CAPTION>
                                                         SHARES UNDER OPTION
                                                     ----------------------------
                                                                       WEIGHTED
                                        SHARES                         AVERAGE
                                      AVAILABLE                        EXERCISE
                                      FOR GRANT         SHARES          PRICE
                                     ------------    ------------    -----------
<S>                                       <C>           <C>          <C>
Outstanding as of October 31, 2004        157,303       4,035,267    $       9.20
Granted                                    (1,000)          1,000    $      19.08
Cancelled                                      --         (82,637)   $      13.38
Exercised                                      --        (364,950)   $       5.36
                                     ------------    ------------
Outstanding as of October 31, 2005        156,303       3,588,680    $       9.50
Granted                                        --              --    $         --
Cancelled                                   6,380         (10,371)   $       8.96
Exercised                                      --        (844,291)   $       7.34
                                     ------------    ------------
Outstanding as of October 31, 2006        162,683       2,734,018    $      10.16
Granted                                        --              --    $         --
Cancelled                                     221         (16,787)   $      13.11
Exercised                                      --        (841,901)   $      10.94
                                     ------------    ------------
Outstanding as of October 31, 2007        162,904       1,875,330    $       9.79
                                     ============    ============
</TABLE>

                                       66
<PAGE>

        Information concerning stock options outstanding and stock options
exercisable by class of common stock as of October 31, 2007 is as follows:

COMMON STOCK

                                    OPTIONS OUTSTANDING
                  ----------------------------------------------------------
                                                   WEIGHTED
                                                   AVERAGE
                                   WEIGHTED       REMAINING      AGGREGATE
   RANGE OF         NUMBER         AVERAGE       CONTRACTUAL     INTRINSIC
EXERCISE PRICES   OUTSTANDING   EXERCISE PRICE   LIFE (YEARS)      VALUE
---------------   -----------   --------------   ------------   ------------
$ 1.16 - $ 2.90       111,182   $         1.84             .9   $  5,848,000
$ 2.91 - $ 7.00            --   $           --             --             --
$ 7.01 - $12.00       431,500   $         9.21            5.1     19,517,000
$12.01 - $21.92       443,450   $        14.02            3.3     17,925,000
                  -----------                                   ------------
                      986,132   $        10.54            3.8   $ 43,290,000
                  ===========                                   ============

                                     OPTIONS EXERCISABLE
                  ----------------------------------------------------------
                                                   WEIGHTED
                                                   AVERAGE
                                   WEIGHTED       REMAINING      AGGREGATE
   RANGE OF         NUMBER         AVERAGE       CONTRACTUAL     INTRINSIC
EXERCISE PRICES   EXERCISABLE   EXERCISE PRICE   LIFE (YEARS)      VALUE
---------------   -----------   --------------   ------------   ------------
$ 1.16 - $ 2.90       111,182   $         1.84             .9   $  5,848,000
$ 2.91 - $ 7.00            --   $           --             --             --
$ 7.01 - $12.00       375,499   $         9.41            5.1     16,908,000
$12.01 - $21.92       443,450   $        14.02            3.3     17,925,000
                  -----------                                   ------------
                      930,131   $        10.70            3.7   $ 40,681,000
                  ===========                                   ============

CLASS A COMMON STOCK

                                    OPTIONS OUTSTANDING
                  ----------------------------------------------------------
                                                   WEIGHTED
                                                   AVERAGE
                                   WEIGHTED       REMAINING      AGGREGATE
   RANGE OF         NUMBER         AVERAGE       CONTRACTUAL     INTRINSIC
EXERCISE PRICES   OUTSTANDING   EXERCISE PRICE   LIFE (YEARS)      VALUE
---------------   -----------   --------------   ------------   ------------
$ 1.16 - $ 2.90        95,795   $         1.71             .9   $  3,987,000
$ 2.91 - $ 7.00        96,690   $         5.54            5.4      3,654,000
$ 7.01 - $12.00       451,854   $         8.12            4.7     15,911,000
$12.01 - $21.92       244,859   $        14.71            2.9      7,008,000
                  -----------                                   ------------
                      889,198   $         8.96            3.8   $ 30,560,000
                  ===========                                   ============

                                     OPTIONS EXERCISABLE
                  ----------------------------------------------------------
                                                   WEIGHTED
                                                   AVERAGE
                                   WEIGHTED       REMAINING      AGGREGATE
   RANGE OF         NUMBER         AVERAGE       CONTRACTUAL     INTRINSIC
EXERCISE PRICES   EXERCISABLE   EXERCISE PRICE   LIFE (YEARS)      VALUE
---------------   -----------   --------------   ------------   ------------
$ 1.16 - $ 2.90        95,795   $         1.71             .9   $  3,987,000
$ 2.91 - $ 7.00        71,390   $         5.54            5.4      2,698,000
$ 7.01 - $12.00       440,313   $         8.12            4.6     15,505,000
$12.01 - $21.92       240,259   $        14.73            2.8      6,872,000
                  -----------                                   ------------
                      847,757   $         9.05            3.8   $ 29,062,000
                  ===========                                   ============

        The aggregate intrinsic values in the tables above are calculated based
on the difference between the closing price per share of the underlying common
stock as reported on the New York Stock Exchange as of October 31, 2007 less the
option exercise price (if a positive spread) multiplied by the number of stock
options.

                                       67
<PAGE>

        If there were a change in control of the Company, options outstanding
for an additional 30,854 shares of Common Stock and 33,334 shares of Class A
Common Stock would become immediately exercisable.

        The following table provides information concerning stock options
exercised during the fiscal years ended October 31:

                                                        2007           2006
                                                    ------------   ------------
Cash proceeds from stock option exercises           $  6,875,000   $  5,071,000
Tax benefit realized from stock option exercises       6,873,000      1,385,000
Intrinsic value of stock option exercises             20,900,000     16,105,000

        Effective as of November 1, 2005, the Company generally recognizes stock
option compensation expense ratably over the vesting period. As of October 31,
2007, there was $159,000 of pre-tax unrecognized compensation expense related to
nonvested stock options, which is expected to be recognized over a weighted
average period of approximately .7 years.

        The Company did not grant any stock options in fiscal 2007 or 2006. In
fiscal 2005, there were no grants of Common Stock options. The estimated
weighted average fair value of the Class A Common Stock options granted in
fiscal 2005 was $9.16 and was estimated on the date of grant using the
Black-Scholes option-pricing model based on the following weighted average
assumptions: an expected stock price volatility of 43.84%, a risk-free interest
rate of 4.09%, a dividend yield of .38%, and an expected option life of six
years.

9.   RETIREMENT PLANS

        The Company has a qualified defined contribution retirement plan (the
"Plan") under which eligible employees of the Company and its participating
subsidiaries may make Elective Deferral Contributions up to the limitations set
forth in Section 402(g) of the Internal Revenue Code. The Company generally
makes a 25% or 50% Employer Matching Contribution, as determined by the Board of
Directors, based on a participant's Elective Deferral Contribution up to 6% of
the participant's Compensation for the Elective Deferral Contribution period.
The Employer Matching Contribution may be contributed to the Plan in the form of
the Company's common stock or cash, as determined by the Company. The Company's
match of a portion of a participant's contribution is invested in Company common
stock and is based on the fair market value of the shares as of the date of
contribution. The Plan also provides that the Company may contribute to the Plan
additional amounts in its common stock or cash at the discretion of the Board of
Directors. Employee contributions can not be invested in Company common stock.

        Participants receive 100% vesting of employee contributions and cash
dividends received on Company common stock. Vesting in Company contributions is
based on a participant's number of years of vesting service. Contributions to
the Plan charged to income in fiscal 2007, 2006, and 2005 totaled $164,000,
$170,000, and $148,000, respectively. Company contributions are made with the
use of forfeited shares within the Plan. As of October 31, 2007, the Plan held
approximately 150,000 forfeited shares of Common Stock and 165,000 forfeited
shares of Class A Common Stock, which are available to make future Company
contributions.

        In 1991, the Company established a Directors Retirement Plan covering
its then current directors. The net assets of this plan as of October 31, 2007,
2006, and 2005 were not material to the financial

                                       68
<PAGE>

position of the Company. During fiscal 2007, 2006, and 2005, $20,000, $64,000,
and $59,000, respectively, were expensed for this plan.

10.  RESEARCH AND DEVELOPMENT EXPENSES

        Cost of sales amounts in fiscal 2007, 2006, and 2005 include
approximately $16.5 million, $15.3 million, and $11.3 million, respectively, of
new product research and development expenses.

11.  SALE OF INVESTMENT IN JOINT VENTURE

        During fiscal 2005, the Company's HEICO Aerospace Holdings Corp.
subsidiary sold its investment in a 50%-owned joint venture that was accounted
for under the equity method and recognized a gain on the sale of $276,000, which
is included in interest and other income in the Company's Consolidated
Statements of Operations. The Company's investment in the 50%-owned joint
venture and its share of the operating results were not significant to the
Company's consolidated financial statements.

12.  NET INCOME PER SHARE

        The following table sets forth the computation of basic and diluted net
income per share for each of the three fiscal years ended October 31:

<TABLE>
<CAPTION>
                                                             2007           2006           2005
                                                         ------------   ------------   ------------
<S>                                                      <C>            <C>            <C>
Numerator:
  Net income                                             $ 39,005,000   $ 31,888,000   $ 22,812,000
                                                         ============   ============   ============

Denominator:
  Weighted average common shares outstanding - basic       25,715,899     25,084,532     24,460,185
  Effect of dilutive stock options                          1,215,149      1,513,071      1,863,117
                                                         ------------   ------------   ------------
  Weighted average common shares outstanding - diluted     26,931,048     26,597,603     26,323,302
                                                         ============   ============   ============

Net income per share - basic                             $       1.52   $       1.27   $        .93
Net income per share - diluted                           $       1.45   $       1.20   $        .87

Anti-dilutive stock options excluded                               --         12,540        181,760
</TABLE>

                                       69
<PAGE>

13.  QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

                         FIRST          SECOND         THIRD          FOURTH
                        QUARTER        QUARTER        QUARTER         QUARTER
                      ------------   ------------   ------------   ------------
Net sales:
    2007              $113,684,000   $121,215,000   $133,155,000   $139,870,000
    2006                88,101,000     92,092,000    102,172,000    109,825,000
Gross profit:
    2007                37,488,000     43,667,000     47,705,000     48,598,000
    2006                32,052,000     33,536,000     37,585,000     39,340,000
Net income:
    2007                 7,921,000      9,407,000     10,914,000     10,763,000
    2006                 6,749,000      7,542,000      8,276,000      9,321,000

Net income per share:
  Basic:
    2007              $        .31   $        .37   $        .42   $        .41
    2006                       .27            .30            .33            .37
  Diluted:
    2007                       .30            .35            .40            .40
    2006                       .26            .28            .31            .35

        During the third and fourth quarters of fiscal 2006, the Company
recognized the benefit of a tax credit (net of related expenses) for qualified
research and development activities claimed for certain prior years, which
increased net income by $235,000 and $767,000, respectively, or $.01 and $.03
per diluted share, respectively.

        During the first and second quarters of fiscal 2007, the Company
recorded the benefit of a tax credit (net of related expenses) for qualified
research and development activities recognized for fiscal 2006 pursuant to the
retroactive extension in December 2006 of Section 41, "Credit for Increasing
Research Activities," of the Internal Revenue Code, which increased net income
by $332,000 and $167,000, respectively, or by $.01 each per diluted share.

        Due to changes in the average number of common shares outstanding, net
income per share for the full fiscal year may not equal the sum of the four
individual quarters.

14.  OPERATING SEGMENTS

        The Company has two operating segments: the Flight Support Group ("FSG")
consisting of HEICO Aerospace and its subsidiaries and the Electronic
Technologies Group ("ETG"), consisting of HEICO Electronic and its subsidiaries.
The Flight Support Group designs, manufactures, repairs and distributes jet
engine and aircraft component replacement parts. The parts and services are
approved by the FAA. The FSG also manufactures and sells specialty parts as a
subcontractor for aerospace and industrial original equipment manufacturers and
the United States government. The Electronic Technologies Group designs and
manufactures electronic, microwave, and electro-optical equipment and
components, high-speed interface products, high voltage interconnection devices,
and high voltage advanced power electronics products primarily for the aviation,
defense, space, homeland security, electronics, and medical industries.

                                       70
<PAGE>

        The Company's reportable operating segments offer distinctive products
and services that are marketed through different channels. They are managed
separately because of their unique technology and service requirements.

SEGMENT PROFIT OR LOSS

        The accounting policies of the Company's operating segments are the same
as those described in Note 1, Summary of Significant Accounting Policies, of the
Notes to Consolidated Financial Statements. Management evaluates segment
performance based on segment operating income.

<TABLE>
<CAPTION>
                                                                          OTHER,
                                                                         PRIMARILY
                                                                       CORPORATE AND    CONSOLIDATED
                                            FSG             ETG        INTERSEGMENT        TOTALS
                                       -------------   -------------   -------------    -------------
<S>                                    <C>             <C>             <C>              <C>
For the year ended October 31, 2007:
  Net sales                            $ 383,911,000   $ 124,035,000   $     (22,000)   $ 507,924,000
  Depreciation and amortization            8,047,000       3,786,000         334,000       12,167,000
  Operating income                        67,408,000      33,870,000     (15,264,000)      86,014,000
  Capital expenditures                    10,146,000       2,300,000         440,000       12,886,000
  Total assets                           379,433,000     230,448,000      21,421,000      631,302,000

For the year ended October 31, 2006:
  Net sales                            $ 277,255,000   $ 115,021,000   $     (86,000)   $ 392,190,000
  Depreciation and amortization            6,822,000       3,437,000         306,000       10,565,000
  Operating income                        46,840,000      34,026,000     (13,999,000)      66,867,000
  Capital expenditures                     8,189,000       1,607,000         168,000        9,964,000
  Total assets                           337,020,000     180,359,000      17,436,000      534,815,000

For the year ended October 31, 2005:
  Net sales                            $ 191,989,000   $  77,821,000   $    (163,000)   $ 269,647,000
  Depreciation and amortization            5,875,000       1,117,000         417,000        7,409,000
  Operating income                        32,795,000      20,978,000      (9,124,000)      44,649,000
  Capital expenditures                     7,459,000         763,000          51,000        8,273,000
  Total assets                           259,957,000     159,123,000      16,544,000      435,624,000
</TABLE>

MAJOR CUSTOMER AND GEOGRAPHIC INFORMATION

        No one customer accounted for 10% or more of the Company's consolidated
net sales during the last three fiscal years. The Company's net sales
originating and long-lived assets held outside of the United States during each
of the last three fiscal years were not material.

        The Company markets its products and services in over 100 countries.
Other than in the United States, the Company does not conduct business in any
other country in which its sales in that country exceed 10% of consolidated
sales. Sales are attributed to countries based on the location of customers. The
composition of the Company's sales to customers between those in the United
States and those in other locations for each of the three fiscal years ended
October 31 as follows:

                                   2007            2006            2005
                               -------------   -------------   -------------
        United States          $ 365,588,000   $ 284,048,000   $ 199,855,000
        Other                    142,336,000     108,142,000      69,792,000
                               -------------   -------------   -------------
        Total                  $ 507,924,000   $ 392,190,000   $ 269,647,000
                               =============   =============   =============

                                       71
<PAGE>

15.  COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

        The Company leases certain property and equipment, including
manufacturing facilities and office equipment under operating leases. Some of
these leases provide the Company with the option after the initial lease term
either to purchase the property at the then fair market value or renew the lease
at the then fair rental value. Generally, management expects that leases will be
renewed or replaced by other leases in the normal course of business.

        Minimum payments for operating leases having initial or remaining
non-cancelable terms in excess of one year are as follows:

            Year ending October 31,
            2008.......................................  $  4,682,000
            2009.......................................     3,618,000
            2010.......................................     3,281,000
            2011.......................................     2,420,000
            2012.......................................     2,034,000
            Thereafter.................................     9,892,000
                                                          -----------
            Total minimum lease commitments............  $ 25,927,000
                                                          ===========

        Total rent expense charged to operations for operating leases in fiscal
2007, 2006, and 2005 amounted to $4,221,000, $3,409,000 and $2,679,000,
respectively.

GUARANTEES

        The Company has arranged for standby letters of credit aggregating $1.8
million to meet the security requirement of its insurance company for potential
workers' compensation claims, which are supported by the Company's revolving
credit facility. In addition, the Company's industrial development revenue bonds
are secured by a $2.0 million letter of credit expiring April 2008 and a
mortgage on the related properties pledged as collateral.

PRODUCT WARRANTY

        Changes in the Company's product warranty liability for fiscal 2007 and
2006 are as follows:

          Balance as of October 31, 2005   $   395,000
          Acquired warranty liabilities         15,000
          Accruals for warranties              635,000
          Warranty claims settled             (511,000)
                                           -----------
          Balance as of October 31, 2006       534,000
          Acquired warranty liabilities         52,000
          Accruals for warranties            1,451,000
          Warranty claims settled             (856,000)
                                           -----------
          Balance as of October 31, 2007   $ 1,181,000
                                           ===========

        The acquired warranty liabilities pertain to the acquisitions made as
further discussed in Note 2, Acquisitions, of the Notes to Consolidated
Financial Statements.

                                       72
<PAGE>

ACQUISITIONS

        Pursuant to the purchase agreement related to the acquisition of an 80%
interest in a subsidiary by the FSG in fiscal 2001, the Company acquired an
additional 10% of the equity interests of the subsidiary in fiscal 2007. The
Company has the right to purchase the remaining 10% of the equity interests in
fiscal 2011, or sooner under certain conditions, and the minority interest
holder has the right to cause the Company to purchase the same equity interest
in the same period.

        As part of the agreement to acquire an 80% interest in a subsidiary by
the ETG in fiscal 2004, the Company has the right to purchase the minority
interests beginning at approximately the tenth anniversary of the acquisition,
or sooner under certain conditions, and the minority interest holders have the
right to cause the Company to purchase their interests commencing on
approximately the fifth anniversary of the acquisition, or sooner under certain
conditions.

        As part of the agreement to purchase a subsidiary by the ETG in fiscal
2005, the Company may be obligated to pay additional purchase consideration
currently estimated to total up to $2.3 million should the subsidiary meet
certain product line-related earnings objectives during the fourth and fifth
years following the acquisition. The additional purchase consideration will be
accrued when the earnings objectives are met.

        As part of the agreement to acquire an 85% interest in a subsidiary by
the ETG in fiscal 2005, the minority interest holders have the right to cause
the Company to purchase their interests over a four-year period starting around
the second anniversary of the acquisition, or sooner under certain conditions.
In fiscal 2007, some of the minority interest holders exercised their option to
cause the Company to purchase their aggregate 3% interest over the four-year
period ending in fiscal 2010. Accordingly, the Company increased its ownership
interest in the subsidiary by .75% (or one-fourth of such minority interest
holders' aggregate interest) to 85.75% effective April 2007.

        As part of the agreement to acquire a 51% interest in a subsidiary by
the FSG in fiscal 2006, the Company has the right to purchase 28% of the equity
interests of the subsidiary over a four-year period beginning approximately
after the second anniversary of the acquisition, or sooner under certain
conditions, and the minority interest holders have the right to cause the
Company to purchase the same equity interest over the same period. Further, the
Company has the right to purchase the remaining 21% of the equity interests of
the subsidiary over a three-year period beginning approximately after the fourth
anniversary of the acquisition, or sooner under certain conditions, and the
minority interest holders have the right to cause the Company to purchase the
same equity interest over the same period.

        As part of the agreement to acquire a subsidiary by the ETG in fiscal
2006, the Company may be obligated to pay additional purchase consideration up
to $17.8 million and $19.2 million, respectively, based on the subsidiary's
fiscal 2008 and 2009 respective earnings relative to target. The additional
purchase consideration will be accrued when the earnings objectives are met and
payable in the subsequent fiscal year.

        As part of an agreement to acquire an 80% interest in a subsidiary by
the FSG in fiscal 2006, the Company has the right to purchase the minority
interests beginning at approximately the eighth anniversary of the acquisition,
or sooner under certain conditions, and the minority interest holders have the
right to cause the Company to purchase the same equity interest over the same
period.

        As part of the agreement to acquire a subsidiary by the ETG in fiscal
2007, the Company may be obligated to pay additional purchase consideration up
to $76.9 million in aggregate should the subsidiary

                                       73
<PAGE>

meet certain earnings objectives during the first five years following the
acquisition. The additional purchase consideration will be accrued when the
earnings objectives are met.

LITIGATION

        The Company is involved in various legal actions arising in the normal
course of business. Based upon the Company's and its legal counsel's evaluations
of any claims or assessments, management is of the opinion that the outcome of
these matters will not have a material adverse effect on the Company's results
of operations, financial position, or cash flows.

16.  SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

        Cash paid for interest was $3,287,000, $3,459,000, and $1,062,000 in
fiscal 2007, 2006, and 2005, respectively. Cash paid for income taxes was
$16,572,000, $15,823,000, and $8,176,000 in fiscal 2007, 2006, and 2005,
respectively. Cash received from income tax refunds in fiscal 2007, 2006, and
2005 was $243,000, $51,000, and $101,000, respectively.

        Cash investing activities related to acquisitions, including contingent
purchase price payments to previous owners of acquired businesses and any
adjustments to the preliminary allocation of the purchase price of prior year
acquisitions to the assets acquired and liabilities assumed for each of the
three fiscal years ended October 31, is as follows:

<TABLE>
<CAPTION>
                                                              2007             2006             2005
                                                          -------------    -------------    -------------
<S>                                                       <C>              <C>              <C>
Fair value of assets acquired:
   Liabilities assumed                                    $   7,460,000    $  13,937,000    $   5,202,000
   Minority interests in consolidated subsidiaries             (412,000)       6,301,000               --
   Less:
     Goodwill                                                22,296,000       19,707,000       28,510,000
     Identifiable intangible assets                          15,902,000       19,640,000        4,210,000
     Accrued additional purchase consideration                7,180,000        3,045,000               --
     Inventories, net                                         3,539,000       21,342,000        4,645,000
     Accounts receivable, net                                 2,569,000       12,213,000        4,055,000
     Property, plant, and equipment                           2,142,000          690,000        4,904,000
     Other assets                                             1,787,000        1,718,000          378,000
                                                          -------------    -------------    -------------
   Acquisitions and related costs, net of cash acquired   $ (48,367,000)   $ (58,117,000)   $ (41,500,000)
                                                          =============    =============    =============
</TABLE>

        In connection with certain acquisitions, the Company accrued additional
purchase consideration aggregating $11.7 million, $7.2 million, and $3.0 million
in fiscal 2007, 2006 and 2005, respectively, which was allocated to goodwill
(see Note 2, Acquisitions, of the Notes to Consolidated Financial Statements).

        There were no significant capital lease and/or other equipment financing
activities during fiscal 2007, 2006, or 2005.

                                       74
<PAGE>

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
           FINANCIAL DISCLOSURE

        Not applicable.

ITEM 9A.   CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

        The Company's Chief Executive Officer and its Chief Financial Officer
conducted an evaluation of the effectiveness of the Company's disclosure
controls and procedures as of the end of the period covered by this Annual
Report on Form 10-K. Based upon that evaluation, the Company's Chief Executive
Officer and its Chief Financial Officer concluded that the Company's disclosure
controls and procedures are effective.

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

        Management's report on the Company's internal control over financial
reporting is included in Item 8, Financial Statements and Supplementary Data, of
this Annual Report on Form 10-K.

ATTESTATION REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

        Deloitte & Touche LLP's attestation report on the Company's internal
control over financial reporting is included in Item 8, Financial Statements and
Supplementary Data, of this Annual Report on Form 10-K.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

        The Company is continuously seeking to improve the efficiency and
effectiveness of its operations and of its internal controls. This results in
refinements to processes throughout the Company. However, there have been no
changes in the Company's internal control over financial reporting that occurred
during the Company's most recent fiscal quarter that have materially affected,
or are reasonably likely to materially affect, the Company's internal control
over financial reporting.

ITEM 9B.   OTHER INFORMATION

        Not applicable.

                                       75
<PAGE>

                                    PART III

ITEM 10.   DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

        Information concerning the Directors of the Company, including the
Finance/Audit Committee of the Board of Directors and its Finance/Audit
Committee Financial Expert, as well as information concerning compliance with
Section 16(a) of the Securities Exchange Act of 1934 is hereby incorporated by
reference to the Company's definitive proxy statement, which will be filed with
the Securities and Exchange Commission ("Commission") within 120 days after the
close of fiscal 2007.

        Information concerning the Executive Officers of the Company is set
forth in Item 1 of Part I hereof under the caption "Executive Officers of the
Registrant."

        The Company has adopted a code of ethics that applies to its principal
executive officer, principal financial officer, principal accounting officer, or
controller and persons performing similar functions. The code of ethics is
located on the Company's Internet web site at http://www.heico.com. Any
amendments to or waivers from a provision of this code of ethics will be posted
on the Company's web site.

ITEM 11.   EXECUTIVE COMPENSATION

        Information concerning executive compensation is hereby incorporated by
reference to the Company's definitive proxy statement, which will be filed with
the Commission within 120 days after the close of fiscal 2007.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
           RELATED STOCKHOLDER MATTERS

        Information concerning security ownership of certain beneficial owners
and management is hereby incorporated by reference to the Company's definitive
proxy statement, which will be filed with the Commission within 120 days after
the close of fiscal 2007.

        Equity compensation plan information is set forth in Item 5 of Part II
hereof under the caption "Equity Compensation Plan Information."

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
           INDEPENDENCE

        Information concerning certain relationships and related transactions,
and director independence is hereby incorporated by reference to the Company's
definitive proxy statement, which will be filed with the Commission within 120
days after the close of fiscal 2007.

ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES

        Information concerning the principal accountant's fees and services is
hereby incorporated by reference to the Company's definitive proxy statement,
which will be filed with the Commission within 120 days after the close of
fiscal 2007.

                                       76
<PAGE>

                                     PART IV

ITEM 15.   EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1)   FINANCIAL STATEMENTS

        The following consolidated financial statements of the Company and
subsidiaries are included in Part II, Item 8:

                                                                            PAGE
                                                                            ----
Management's Report on Internal Control Over Financial Reporting.............40
Reports of Independent Registered Public Accounting Firm.....................41
Consolidated Balance Sheets as of October 31, 2007 and 2006..................44
Consolidated Statements of Operations for the years ended October 31, 2007,
   2006, and 2005............................................................45
Consolidated Statements of Shareholders' Equity and Comprehensive Income
   for the years ended October 31, 2007, 2006, and 2005......................46
Consolidated Statements of Cash Flows for the years ended October 31, 2007,
   2006, and 2005............................................................47
Notes to Consolidated Financial Statements...................................48

(a)(2)   FINANCIAL STATEMENT SCHEDULES

        The following financial statement schedule of the Company and
subsidiaries is included herein:

  o  Schedule II - Valuation and Qualifying Accounts

        All other schedules have been omitted because the required information
is not applicable or the information is included in the consolidated financial
statements or notes thereto presented in Part II, Item 8.

(a)(3)   EXHIBITS

EXHIBIT      DESCRIPTION
-------      ------------------------------------------------------------------
  2.1    --  Amended and Restated Agreement of Merger and Plan of
             Reorganization, dated as of March 22, 1993, by and among HEICO
             Corporation, HEICO Industries, Corp. and New HEICO, Inc. is
             incorporated by reference to Exhibit 2.1 to the Registrant's
             Registration Statement on Form S-4 (Registration No. 33-57624)
             Amendment No. 1 filed on March 19, 1993.*

  3.1    --  Articles of Incorporation of the Registrant are incorporated by
             reference to Exhibit 3.1 to the Company's Registration Statement on
             Form S-4 (Registration No. 33-57624) Amendment No. 1 filed on March
             19, 1993.*

  3.2    --  Articles of Amendment of the Articles of Incorporation of the
             Registrant, dated April 27, 1993, are incorporated by reference to
             Exhibit 3.2 to the Company's Registration Statement on Form 8-B
             dated April 29, 1993.*

                                       77
<PAGE>

EXHIBIT      DESCRIPTION
-------      ------------------------------------------------------------------
  3.3    --  Articles of Amendment of the Articles of Incorporation of the
             Registrant, dated November 3, 1993, are incorporated by reference
             to Exhibit 3.3 to the Form 10-K for the year ended October 31,
             1993.*

  3.4    --  Articles of Amendment of the Articles of Incorporation of the
             Registrant, dated March 19, 1998, are incorporated by reference to
             Exhibit 3.4 to the Company's Registration Statement on Form S-3
             (Registration No. 333-48439) filed on March 23, 1998.*

  3.5    --  Articles of Amendment of the Articles of Incorporation of the
             Registrant, dated as of November 2, 2003, are incorporated by
             reference to Exhibit 3.5 to the Form 10-K for the year ended
             October 31, 2003.*

  3.6    --  Bylaws of the Registrant are incorporated by reference to Exhibit
             3.1 to the Form 8-K filed on December 19, 2007.*

  4.0    --  The description and terms of the Preferred Stock Purchase Rights
             are set forth in a Rights Agreement between the Company and
             SunTrust Bank, N.A., as Rights Agent, dated as of November 2, 2003,
             incorporated by reference to Exhibit 4.0 to the Form 8-K dated
             November 2, 2003.*

 10.1    --  Loan Agreement, dated March 1, 1988, between HEICO Corporation and
             Broward County, Florida is incorporated by reference to Exhibit
             10.1 to the Form 10-K for the year ended October 31, 1994.*

 10.2    --  SunBank Reimbursement Agreement, dated February 28, 1994, between
             HEICO Aerospace Corporation and SunBank/South Florida, N.A. is
             incorporated by reference to Exhibit 10.2 to the Form 10-K for the
             year ended October 31, 1994.*

 10.3    --  Amendment, dated March 1, 1995, to the SunBank Reimbursement
             Agreement dated February 28, 1994 between HEICO Aerospace
             Corporation and SunBank/South Florida, N.A. is incorporated by
             reference to Exhibit 10.3 to the Form 10-K from the year ended
             October 31, 1995.*

 10.4    --  Amendment and Extension, dated February 28, 1999 to the SunBank
             Reimbursement Agreement dated February 28, 1994, between SunTrust
             Bank, South Florida, N.A. and HEICO Aerospace Corporation is
             incorporated by reference to Exhibit 10.4 to the Form 10-K for the
             year ended October 31, 1999.*

 10.5    --  Amendment, dated July 20, 2000, to the SunBank Reimbursement
             Agreement dated February 28, 1994, between HEICO Aerospace
             Corporation and SunTrust Bank is incorporated by reference to
             Exhibit 10.5 to the Form 10-K for the year ended October 31, 2000.*

 10.6    --  Amendment, dated as of January 14, 2004, to the SunBank
             Reimbursement Agreement, dated as of February 28, 1994, between
             HEICO Aerospace Corporation and SunTrust Bank is incorporated by
             reference to Exhibit 10.1 to the Form 10-Q for the quarterly period
             ended January 31, 2004.*

 10.7#   --  HEICO Savings and Investment Plan, as amended and restated
             effective as of January 1, 2002 is incorporated by reference to
             Exhibit 10.6 to the Form 10-K for the year ended October 31, 2002.*

                                       78
<PAGE>

EXHIBIT      DESCRIPTION
-------      ------------------------------------------------------------------
 10.8#   --  First Amendment, effective as of January 1, 2002, to the HEICO
             Savings and Investment Plan, is incorporated by reference to
             Exhibit 10.7 to the Form 10-K for the year ended October 31, 2003.*

 10.9#   --  Second Amendment, effective as of January 1, 2002, to the HEICO
             Savings and Investment Plan, is incorporated by reference to
             Exhibit 10.8 to the Form 10-K for the year ended October 31, 2003.*

10.10#   --  Third Amendment, effective as of October 1, 2003, to the HEICO
             Savings and Investment Plan, is incorporated by reference to
             Exhibit 10.9 to the Form 10-K for the year ended October 31, 2003.*

10.11#   --  Fourth Amendment, with portions effective as of January 1, 2005,
             and other portions effective as of January 1, 2004, to the HEICO
             Savings and Investment Plan, is incorporated by reference to
             Exhibit 10.11 to the Form 10-K for the year ended October 31,
             2004.*

10.12#   --  Fifth Amendment, effective as of March 28, 2005, to the HEICO
             Savings and Investment Plan is incorporated by reference to Exhibit
             10.1 to the Form 10-Q for the quarterly period ended April 30,
             2005.*

10.13#   --  Sixth Amendment, effective as of January 1, 2006, to the HEICO
             Savings and Investment Plan is incorporated by reference to Exhibit
             10.13 to the Form 10-K for the year ended October 31, 2005.*

10.14#   --  Non-Qualified Stock Option Agreement for Directors, Officers and
             Employees is incorporated by reference to Exhibit 10.8 to the Form
             10-K for the year ended October 31, 1985.*

10.15#   --  HEICO Corporation 1993 Stock Option Plan, as amended, is
             incorporated by reference to Exhibit 4.7 to the Company's
             Registration Statement on Form S-8 (Registration No. 333-81789)
             filed on June 29, 1999.*

10.16#   --  HEICO Corporation 2002 Stock Option Plan, effective March 19, 2002,
             is incorporated by reference to Exhibit 10.10 to the Form 10-K for
             the year ended October 31, 2002.*

10.17#   --  HEICO Corporation Directors' Retirement Plan, as amended, dated as
             of May 31, 1991, is incorporated by reference to Exhibit 10.19 to
             the Form 10-K for the year ended October 31, 1992.*

10.18#   --  Key Employee Termination Agreement, dated as of April 5, 1988,
             between HEICO Corporation and Thomas S. Irwin is incorporated by
             reference to Exhibit 10.20 to the Form 10-K for the year ended
             October 31, 1992.*

10.19#   --  HEICO Corporation Leadership Compensation Plan, effective October
             1, 2006, is incorporated by reference to Exhibit 10.1 to the Form
             8-K filed on October 31, 2006.*

10.20#   --  HEICO Corporation 2007 Incentive Compensation Plan, effective as of
             November 1, 2006, is incorporated by reference to Exhibit 10.1 to
             the Form 8-K filed on March 19, 2007.*

                                       79
<PAGE>

EXHIBIT      DESCRIPTION
-------      ------------------------------------------------------------------
 10.21   --  Shareholders Agreement, dated October 30, 1997, by and between
             HEICO Aerospace Holdings Corp., HEICO Aerospace Corporation and all
             of the shareholders of HEICO Aerospace Holdings Corp. and Lufthansa
             Technik AG is incorporated by reference to Exhibit 10.32 to Form
             10-K/A for the year ended October 31, 1997.*

 10.22   --  Revolving Credit Agreement, dated as of May 15, 2003, among HEICO
             Corporation and SunTrust Bank, as Administrative Agent, is
             incorporated by reference to Exhibit 10.1 to the Form 8-K filed on
             May 29, 2003.*

 10.23   --  Consent to Extension dated as of April 5, 2004 to the Revolving
             Credit Agreement dated as of May 15, 2003 among HEICO Corporation
             and SunTrust Bank, is incorporated by reference to Exhibit 10.1 to
             the Form 10-Q for the quarterly period ended April 30, 2004.*

 10.24   --  First Amendment, effective as of April 13, 2005, to the Revolving
             Credit Agreement among HEICO Corporation as Borrower, the lenders
             from time to time party hereto, and SunTrust Bank, as
             Administrative Agent, is incorporated by reference to Exhibit 10.1
             to Form 10-Q for the quarterly period ended July 31, 2005.*

 10.25   --  Amended and Restated Revolving Credit Agreement, dated as of August
             4, 2005, among HEICO Corporation, as Borrower, the lenders from
             time to time party hereto, and SunTrust Bank, as Administrative
             Agent; Wachovia Bank, National Association as Syndication Agent;
             and HSBC Bank USA, as Documentation Agent, is incorporated by
             reference to Exhibit 10.1 to the Form 8-K filed on August 8, 2005.*

 10.26   --  First Amendment, effective as of July 14, 2006, to the Amended and
             Restated Revolving Credit Agreement among HEICO Corporation, as a
             Borrower, the lenders from time to time party hereto, and SunTrust
             Bank, as Administrative Agent; Wachovia Bank, National Association
             as Syndication Agent; and HSBC Bank USA, as Documentation Agent, is
             incorporated by reference to Exhibit 10.1 to the Form 10-Q for the
             quarterly period ended July 31, 2006.*

  21     --  Subsidiaries of HEICO Corporation.**

  23     --  Consent of Independent Registered Public Accounting Firm.**

 31.1    --  Rule 13a-14(a)/15d-14(a) Certification of Chief Executive
             Officer.**

 31.2    --  Rule 13a-14(a)/15d-14(a) Certification of Chief Financial
             Officer.**

 32.1    --  Section 1350 Certification of Chief Executive Officer.***

 32.2    --  Section 1350 Certification of Chief Financial Officer.***

----------
#    Management contract or compensatory plan or arrangement required to be
     filed as an exhibit.
*    Previously filed.
**   Filed herewith.
***  Furnished herewith.

                                       80
<PAGE>

                       HEICO CORPORATION AND SUBSIDIARIES
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
<CAPTION>
                                                                              FOR THE YEAR ENDED OCTOBER 31,
                                                                       --------------------------------------------
                                                                           2007            2006            2005
                                                                       ------------    ------------    ------------
<S>                                                                    <C>             <C>             <C>
Allowance for doubtful accounts:
     Allowance as of beginning of year                                 $  2,893,000    $  2,148,000    $    582,000
     Additions (deductions) charged (credited) to costs and expenses        (75,000)        653,000       1,867,000
     Additions charged to other accounts (a)                                  4,000         287,000          10,000
     Deductions (b)                                                      (1,110,000)       (195,000)       (311,000)
                                                                       ------------    ------------    ------------
     Allowance as of end of year                                       $  1,712,000(c) $  2,893,000    $  2,148,000
                                                                       ============    ============    ============
</TABLE>

(a)  Principally additions from acquisitions.
(b)  Principally write-offs of uncollectible accounts receivables, net of
     recoveries.
(c)  Decrease in allowance for doubtful accounts as of the end of the year
     principally relates to write-offs and a partial recovery for certain
     customers in the aviation industry that were fully reserved in fiscal 2005
     when the customers filed for bankruptcy.

<TABLE>
<S>                                                                    <C>             <C>             <C>
Inventory valuation reserves:
     Reserves as of beginning of year                                  $ 24,554,000    $ 16,488,000    $ 14,487,000
     Additions charged to costs and expenses                              2,035,000       3,521,000       2,218,000
     Additions charged to other accounts (a)                              1,516,000       4,779,000         402,000
     Deductions (b)                                                        (964,000)       (234,000)       (619,000)
                                                                       ------------    ------------    ------------
     Reserves as of end of year                                        $ 27,141,000    $ 24,554,000    $ 16,488,000
                                                                       ============    ============    ============
</TABLE>

(a)  Principally additions from acquisitions.
(b)  Principally write-offs of slow moving, obsolete, or damaged inventory.

                                       81
<PAGE>

                                   SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                                 HEICO CORPORATION


Date:  December 28, 2007                         By: /s/  THOMAS S. IRWIN
                                                     ---------------------------
                                                     Thomas S. Irwin
                                                     Executive Vice President
                                                     and Chief Financial Officer
                                                     (Principal Financial and
                                                     Accounting Officer)

        Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


/s/ LAURANS A. MENDELSON          Chairman, President,
--------------------------        Director (Principal
Laurans A. Mendelson              Executive Officer)

/s/ SAMUEL L. HIGGINBOTTOM        Director
--------------------------
Samuel L. Higginbottom

/s/ WOLFGANG MAYRHUBER            Director
--------------------------
Wolfgang Mayrhuber

/s/ ERIC A. MENDELSON             Director
--------------------------
Eric A. Mendelson

/s/ VICTOR H. MENDELSON           Director
--------------------------
Victor H. Mendelson

/s/ ALBERT MORRISON, JR           Director
--------------------------
Albert Morrison, Jr.

/s/ JOSEPH W. PALLOT              Director
--------------------------
Joseph W. Pallot

/s/ ALAN SCHRIESHEIM              Director
--------------------------
Alan Schriesheim

/s/ FRANK J. SCHWITTER            Director
--------------------------
Frank J. Schwitter

                                       82
<PAGE>

                                  EXHIBIT INDEX

EXHIBIT      DESCRIPTION
-------      -------------------------------------------------------------------
   21    --  Subsidiaries of HEICO Corporation.

   23    --  Consent of Independent Registered Public Accounting Firm.

   31.1  --  Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

   31.2  --  Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

   32.1  --  Section 1350 Certification of Chief Executive Officer.

   32.2  --  Section 1350 Certification of Chief Financial Officer.

                                       83