HEICO Corporation Q2 FY2025 earnings call

• Remembered Tom Irwin and Rob Spingarn. - Thanked team members and military. - Second quarter results strong with record consolidated operating income and net sales. - Flight Support Group's growth from organic demand and acquisitions. - Electronic Technologies Group's results with organic growth in some products. - Continued focus on acquisitions, including acquisition of Rosen Aviation LLC in Q2 2025.

Consolidated operating income and net sales in Q2 2025 were record, up 19% and 15% vs Q2 2024. Flight Support Group (FSG) had record Q2 net sales of $767.1M, up 19%, operating income $185M, up 24%. Organic growth 14% with 16% in aftermarket parts/distribution and 18% in defense. Electronic Technologies Group (ETG) net sales $342.2M, up 7%, operating income $77.9M, up 3%. Organic growth 4% with space/aerospace products up double-digit, defense net sales expected strong in H2.

• Confident in net sales growth in FSG and ETG driven by strong organic demand. - Aim to accelerate growth from recent acquisitions and pursue future acquisition opportunities. - Disciplined financial strategy focusing on strategic acquisitions and organic growth to maximize shareholder value.

• Public health threats like COVID-19. - Liquidity, cash generation, lower commercial air travel, airline fleet changes/purchasing decisions. - Product specification costs/requirements increasing contract completion costs. - Governmental/regulatory demands, export policies/restrictions. - Reductions in defense, space, homeland security spending. - Competition from existing/new competitors. - Ability to introduce new products at profitable pricing. - Product development/manufacturing difficulties. - Cybersecurity events/IT system disruptions. - Ability to make acquisitions and achieve synergies. - Customer credit risk, interest, foreign currency exchange, income tax rates, and economic conditions including inflation.

Q: Sheila Kahyaoglu with Jefferies asked about FSG growth, margins, parts visibility.

A: Eric Mendelson and Carlos Macau responded on FSG growth components, margin drivers, and parts growth.

Q: Larry Solow with CJS Securities asked about organic growth in parts business, share gains, aftermarket defense.

A: Victor Mendelson and Eric Mendelson discussed share gains, strong defense business, and backlog in ETG.

Q: Kristen Liwag with Morgan Stanley asked about aftermarket strength drivers, pricing strategy.

A: Victor Mendelson responded on aftermarket strength drivers like product offerings and HEICO's customer-friendly pricing.

Q: Ken Herbert with RBC asked about ETG European exposure, working capital.

A: Victor Mendelson and Carlos Macau discussed ETG European growth and working capital expectations.

Q: Noah Poponak with Goldman Sachs asked about ETG back half growth, defense PMA.

A: Carlos Macau and Victor Mendelson responded on ETG growth expectations and defense PMA efforts.

Q: Jordan Lyonnais with Bank of America asked about defense business backlog.

A: Victor Mendelson responded on defense business segments.

Q: Peter Arment with Baird asked about tariffs, PMA output.

A: Victor Mendelson and Eric Mendelson discussed tariff impact and PMA output.

Q: Scott Deuschle with Deutsche Bank asked about FSG supply constraint, Asia demand.

A: Eric Mendelson responded on FSG supply constraint and Asia demand.

Q: Josh Sullivan with Deutsche Bank asked about missile defense expansion, M&A focus.

A: Victor Mendelson and Carlos Macau discussed missile defense expansion and M&A focus.

Q: Tony Bancroft with Gabelli Funds asked about M&A focus.

A: Victor Mendelson and Eric Mendelson discussed M&A strategy.

Q: Louis Raffetto with Wolfe Research asked about competitive landscape.

A: Victor Mendelson responded on competitive market.

Q: Gavin Parsons with UBS asked about FSG purchasing behavior, tariff pause.

A: Victor Mendelson responded on FSG purchasing behavior.

Q: Gautam Khanna with TD Cowen asked about Wencor cross-selling, PMA product development.

A: Victor Mendelson and Eric Mendelson discussed Wencor cross-selling and PMA product development.

Q: Michael Ciarmoli with Truist asked about ETG defense, FSG margin.

A: Victor Mendelson responded on ETG defense and FSG margin