Shane Posted May 27, 2020 Share Posted May 27, 2020 Do they have a lot of cash to make acquisitions? No. I think they have will need to raise debt. Not saying it will happen, but it might. By way of comparison, TDG is very proactive. They raised debt, and said it was insurance against a longer downturn. I like that strategy: raise debt when it’s available, not when you need it. I still don’t understand why HEI hasn’t done this. Maybe their covenants are too restrictive, or their cash burn much smaller than TDG. I think it is because they have the non-aerospace business that is producing cash still so not necessary. TDG has a lot of leverage - wouldn't you rather a fresh balance sheet if this becomes a prolonged contraction? Management is surely in talks with banks regularly, I would feel pretty confident they could easily get financing if needed even in a pretty dire scenario. Link to comment Share on other sites More sharing options...
Liberty Posted May 27, 2020 Author Share Posted May 27, 2020 Do they have a lot of cash to make acquisitions? No. I think they have will need to raise debt. Not saying it will happen, but it might. By way of comparison, TDG is very proactive. They raised debt, and said it was insurance against a longer downturn. I like that strategy: raise debt when it’s available, not when you need it. I still don’t understand why HEI hasn’t done this. Maybe their covenants are too restrictive, or their cash burn much smaller than TDG. I think it is because they have the non-aerospace business that is producing cash still so not necessary. TDG has a lot of leverage - wouldn't you rather a fresh balance sheet if this is becomes a prolong contraction? Management is surely in talks with banks regularly, I would feel pretty confident they could easily get financing if needed even in a pretty dire scenario. Heico management has said at least a couple times that for the right opportunity(ies), they'd be ready to lever up 6-7x (iirc), as long as they knew they'd be able to delever relatively quickly after that. Link to comment Share on other sites More sharing options...
samwise Posted May 28, 2020 Share Posted May 28, 2020 Do they have a lot of cash to make acquisitions? No. I think they have will need to raise debt. Not saying it will happen, but it might. By way of comparison, TDG is very proactive. They raised debt, and said it was insurance against a longer downturn. I like that strategy: raise debt when it’s available, not when you need it. I still don’t understand why HEI hasn’t done this. Maybe their covenants are too restrictive, or their cash burn much smaller than TDG. I think it is because they have the non-aerospace business that is producing cash still so not necessary. TDG has a lot of leverage - wouldn't you rather a fresh balance sheet if this is becomes a prolong contraction? Management is surely in talks with banks regularly, I would feel pretty confident they could easily get financing if needed even in a pretty dire scenario. My second paragraph above was really about cash to survive, not for takeovers. So you are saying they didn’t raise debt because they don’t have any cash burn? Possible. It’s one of the possibilities I listed. If this becomes a prolonged grounding of planes, then yes I would prefer a zero debt balance sheet. A prolonged recession where most planes still fly (let’s say at 50% load) hurts the airlines, not HEI or TDG. Link to comment Share on other sites More sharing options...
Liberty Posted May 28, 2020 Author Share Posted May 28, 2020 I posted some of my highlights from the conference call in this thread, for those interested: Link to comment Share on other sites More sharing options...
Shane Posted May 28, 2020 Share Posted May 28, 2020 I posted some of my highlights from the conference call in this thread, for those interested: Great notes! Link to comment Share on other sites More sharing options...
Liberty Posted June 11, 2020 Author Share Posted June 11, 2020 FSG acquisition: https://www.businesswire.com/news/home/20200611005431/en/HEICO-Corporation-Acquires-Naval-Hydraulic-Repair-Specialist Flight Support Group acquired 70% of naval hydraulic systems specialist Rocky Mountain Hydrostatics, LLC in an all cash transaction. Additional financial details were not disclosed. Rocky Mountain overhauls industrial pumps, motors and other hydraulic units with a focus on the support of legacy systems for the US Navy. Customers include master ship repair contractors and the US Navy. Work is performed at Rocky Mountain’s facilities as well as shipboard at any location worldwide. Rocky Mountain has 21 team members and is headquartered in Brighton, Colorado, with satellite services in San Diego, CA and Norfolk, VA. HEICO stated that it does not expect the purchase to result in any material team member turnover and that Rocky Mountain will continue to operate in its existing locations. Rocky Mountain was founded in 1991 by Bradley and Therese Zuercher. Mr. Zuercher will continue to lead Rocky Mountain, and will retain 30% ownership. Link to comment Share on other sites More sharing options...
Liberty Posted June 16, 2020 Author Share Posted June 16, 2020 New JV: https://www.businesswire.com/news/home/20200616005254/en/ Efficient Power Conversion (EPC) Corporation and VPT, Inc., A HEICO company (NYSE:HEI.A) (NYSE:HEI) announce the establishment of EPC Space LLC, a joint venture focused on designing and manufacturing radiation hardened (Rad Hard) GaN-on-silicon transistors and ICs packaged, tested, and qualified for satellite and high-reliability applications. Link to comment Share on other sites More sharing options...
Liberty Posted August 12, 2020 Author Share Posted August 12, 2020 Two-in-one acquisitions: https://www.businesswire.com/news/home/20200812005411/en/ Although ID and TS are separate companies, Mr. Pirali and Mr. Whittingham partnered their companies in 2010 when they became roughly equal owners in each other’s company in order to share certain resources and jointly develop critical technologies. The two companies, which together employ approximately 50 people, are co-located in state-of-the-art facilities in Columbia, MD and share extensive resources. Link to comment Share on other sites More sharing options...
Beekman Posted August 12, 2020 Share Posted August 12, 2020 Does anyone have a view on the size of these companies they acquired? Two-in-one acquisitions: https://www.businesswire.com/news/home/20200812005411/en/ Although ID and TS are separate companies, Mr. Pirali and Mr. Whittingham partnered their companies in 2010 when they became roughly equal owners in each other’s company in order to share certain resources and jointly develop critical technologies. The two companies, which together employ approximately 50 people, are co-located in state-of-the-art facilities in Columbia, MD and share extensive resources. Link to comment Share on other sites More sharing options...
Liberty Posted August 19, 2020 Author Share Posted August 19, 2020 New acquisition at ETG: https://www.businesswire.com/news/home/20200819005455/en/ "acquired 89.99% of Connect Tech... Connect Tech designs and manufactures rugged, small-form-factor embedded computing solutions... CTI is NVIDIA’s largest global embedded hardware partner" Link to comment Share on other sites More sharing options...
Liberty Posted August 25, 2020 Author Share Posted August 25, 2020 Heico Q3: You know things are a little rough when they focus on "first nine month of Fiscal 2020" rather than Q2... https://www.businesswire.com/news/home/20200825005877/en/HEICO-Corporation-Reports-Strong-Net-Income-Cash "The Flight Support Group's net sales were $178.2 million in the third quarter of fiscal 2020, as compared to $320.0 million in the third quarter of fiscal 2019" ETG only down 2% in the Q, though.. Link to comment Share on other sites More sharing options...
Liberty Posted December 14, 2020 Author Share Posted December 14, 2020 Expanding the revolver: https://www.businesswire.com/news/home/20201214005232/en/ Link to comment Share on other sites More sharing options...
Liberty Posted December 21, 2020 Author Share Posted December 21, 2020 Heico Q3 (fiscal Q4): (I don't like how they did that press release, without the usual calculated %... tsk tsk tsk): https://www.businesswire.com/news/home/20201221005710/en/ Link to comment Share on other sites More sharing options...
Liberty Posted February 19, 2021 Author Share Posted February 19, 2021 If you own Heico, a little part of what you own made it to Mars yesterday (4 Heico subs provided tech for Perseverance): https://www.businesswire.com/news/home/20210219005419/en/ Link to comment Share on other sites More sharing options...
Liberty Posted February 23, 2021 Author Share Posted February 23, 2021 Q4 (fiscal Q1.. ugh): https://www.businesswire.com/news/home/20210223006095/en/ Link to comment Share on other sites More sharing options...
Liberty Posted March 8, 2021 Author Share Posted March 8, 2021 New ETG acquisition: https://www.businesswire.com/news/home/20210308005458/en/ Founded in 2003, Sunnyvale, CA-based Pyramid is a specialty semiconductor designer and manufacturer offering a well-developed line of processors, static random-access memory (SRAM), electronically erasable programmable read-only memory (EEPROM) and Logic products on a diverse array of military, space and medical platforms and are sold to numerous companies worldwide. Paid cash, details not disclosed. Link to comment Share on other sites More sharing options...
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