10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended April 30, 2020
	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: 001-04604

HEICO CORPORATION

(Exact name of registrant as specified in its charter)

Florida	65-0341002
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer 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:

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

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐

Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

The number of shares outstanding of each of the registrant’s classes of common stock as of May 26, 2020 is as follows:

Common Stock, $.01 par value	54,182,069	shares
Class A Common Stock, $.01 par value	80,569,960	shares

HEICO CORPORATION

INDEX TO QUARTERLY REPORT ON FORM 10-Q

			Page
Part I.	Financial Information
	Item 1.	Financial Statements:
		Condensed Consolidated Balance Sheets (unaudited) as of April 30, 2020 and October 31, 2019	2
		Condensed Consolidated Statements of Operations (unaudited) for the six and three months ended April 30, 2020 and 2019	3
		Condensed Consolidated Statements of Comprehensive Income (unaudited) for the six and three months ended April 30, 2020 and 2019	4
		Condensed Consolidated Statements of Shareholders’ Equity (unaudited) for the six and three months ended April 30, 2020 and 2019	5
		Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended April 30, 2020 and 2019	7
		Notes to Condensed Consolidated Financial Statements (unaudited)	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
	Item 4.	Controls and Procedures	38
Part II.	Other Information
	Item 1A.	Risk Factors	39
	Item 6.	Exhibits	39
Signatures			40

1

PART I. FINANCIAL INFORMATION; Item 1. FINANCIAL STATEMENTS

HEICO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED

(in thousands, except per share data)

	April 30, 2020	October 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$346,786	$57,001
Accounts receivable, net	230,884	274,326
Contract assets	56,033	43,132
Inventories, net	457,819	420,319
Prepaid expenses and other current assets	33,991	18,953
Total current assets	1,125,513	813,731
Property, plant and equipment, net	171,399	173,345
Goodwill	1,300,187	1,268,703
Intangible assets, net	540,623	550,693
Other assets	227,113	162,739
Total assets	$3,364,835	$2,969,211
LIABILITIES AND EQUITY
Current liabilities:
Current maturities of long-term debt	$1,025	$906
Trade accounts payable	108,397	106,225
Accrued expenses and other current liabilities	145,345	178,957
Income taxes payable	1,586	3,050
Total current liabilities	256,353	289,138
Long-term debt, net of current maturities	739,188	561,049
Deferred income taxes	49,749	51,496
Other long-term liabilities	233,518	184,604
Total liabilities	1,278,808	1,086,287
Commitments and contingencies (Note 12)
Redeemable noncontrolling interests (Note 3)	196,507	188,264
Shareholders’ equity:
Preferred Stock, $.01 par value per share; 10,000 shares authorized; none issued	—	—
Common Stock, $.01 par value per share; 150,000 shares authorized; 54,182 and 54,143 shares issued and outstanding	542	541
Class A Common Stock, $.01 par value per share; 150,000 shares authorized; 80,555 and 80,353 shares issued and outstanding	806	804
Capital in excess of par value	297,324	284,609
Deferred compensation obligation	4,232	4,232
HEICO stock held by irrevocable trust	(4,232)	(4,232)
Accumulated other comprehensive loss	(23,804)	(16,739)
Retained earnings	1,583,646	1,397,327
Total HEICO shareholders’ equity	1,858,514	1,666,542
Noncontrolling interests	31,006	28,118
Total shareholders’ equity	1,889,520	1,694,660
Total liabilities and equity	$3,364,835	$2,969,211

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

2

HEICO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS – UNAUDITED

(in thousands, except per share data)

	Six months ended April 30,		Three months ended April 30,
	2020	2019	2020	2019
Net sales	$974,421	$981,794	$468,146	$515,648
Operating costs and expenses:
Cost of sales	597,484	590,170	289,256	306,261
Selling, general and administrative expenses	157,786	174,494	70,729	90,204
Total operating costs and expenses	755,270	764,664	359,985	396,465
Operating income	219,151	217,130	108,161	119,183
Interest expense	(8,042)	(10,973)	(3,759)	(5,484)
Other income	302	2,152	107	2,484
Income before income taxes and noncontrolling interests	211,411	208,309	104,509	116,183
Income tax expense	700	30,200	23,600	26,100
Net income from consolidated operations	210,711	178,109	80,909	90,083
Less: Net income attributable to noncontrolling interests	13,370	16,995	5,456	8,301
Net income attributable to HEICO	$197,341	$161,114	$75,453	$81,782
Net income per share attributable to HEICO shareholders:
Basic	$1.47	$1.21	$.56	$.61
Diluted	$1.44	$1.18	$.55	$.60
Weighted average number of common shares outstanding:
Basic	134,596	133,123	134,669	133,313
Diluted	137,269	137,092	137,117	137,206

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

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HEICO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME – UNAUDITED

(in thousands)

	Six months ended April 30,		Three months ended April 30,
	2020	2019	2020	2019
Net income from consolidated operations	$210,711	$178,109	$80,909	$90,083
Other comprehensive income:
Foreign currency translation adjustments	(7,399)	(1,262)	(4,721)	(5,636)
Amortization of unrealized loss on defined benefit pension plan, net of tax	39	12	15	6
Total other comprehensive loss	(7,360)	(1,250)	(4,706)	(5,630)
Comprehensive income from consolidated operations	203,351	176,859	76,203	84,453
Net income attributable to noncontrolling interests	13,370	16,995	5,456	8,301
Foreign currency translation adjustments attributable to noncontrolling interests	(295)	(154)	(165)	(347)
Comprehensive income attributable to noncontrolling interests	13,075	16,841	5,291	7,954
Comprehensive income attributable to HEICO	$190,276	$160,018	$70,912	$76,499

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

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HEICO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - UNAUDITED

For the Six Months Ended April 30, 2020 and 2019

(in thousands, except per share data)

		HEICO Shareholders' Equity
	Redeemable Noncontrolling Interests	Common Stock	Class A Common Stock	Capital in Excess of Par Value	Deferred Compensation Obligation	HEICO Stock Held by Irrevocable Trust	Accumulated Other Comprehensive Loss	Retained Earnings	Noncontrolling Interests	Total Shareholders' Equity
Balances as of October 31, 2019	$188,264	$541	$804	$284,609	$4,232	($4,232)	($16,739)	$1,397,327	$28,118	$1,694,660
Comprehensive income	9,422	—	—	—	—	—	(7,065)	197,341	3,653	193,929
Cash dividends ($.08 per share)	—	—	—	—	—	—	—	(10,762)	—	(10,762)
Issuance of common stock to HEICO Savings and Investment Plan	—	—	—	7,281	—	—	—	—	—	7,281
Share-based compensation expense	—	—	—	5,275	—	—	—	—	—	5,275
Proceeds from stock option exercises	—	—	2	2,390	—	—	—	—	—	2,392
Redemptions of common stock related to stock option exercises	—	—	—	(2,567)	—	—	—	—	—	(2,567)
Noncontrolling interests assumed related to acquisitions	7,538	—	—	—	—	—	—	—	—	—
Distributions to noncontrolling interests	(8,977)	—	—	—	—	—	—	—	(765)	(765)
Adjustments to redemption amount of redeemable noncontrolling interests	260	—	—	—	—	—	—	(260)	—	(260)
Other	—	1	—	336	—	—	—	—	—	337
Balances as of April 30, 2020	$196,507	$542	$806	$297,324	$4,232	($4,232)	($23,804)	$1,583,646	$31,006	$1,889,520

		HEICO Shareholders' Equity
	Redeemable Noncontrolling Interests	Common Stock	Class A Common Stock	Capital in Excess of Par Value	Deferred Compensation Obligation	HEICO Stock Held by Irrevocable Trust	Accumulated Other Comprehensive Loss	Retained Earnings	Noncontrolling Interests	Total Shareholders' Equity
Balances as of October 31, 2018	$132,046	$534	$796	$320,994	$3,928	($3,928)	($15,256)	$1,091,183	$104,757	$1,503,008
Cumulative effect from adoption of ASC 606	819	—	—	—	—	—	—	13,373	326	13,699
Comprehensive income	8,224	—	—	—	—	—	(1,096)	161,114	8,617	168,635
Cash dividends ($.07 per share)	—	—	—	—	—	—	—	(9,305)	—	(9,305)
Issuance of common stock to HEICO Savings and Investment Plan	—	—	—	6,390	—	—	—	—	—	6,390
Share-based compensation expense	—	—	—	4,987	—	—	—	—	—	4,987
Proceeds from stock option exercises	—	7	4	5,517	—	—	—	—	—	5,528
Redemptions of common stock related to stock option exercises	—	(3)	—	(27,741)	—	—	—	—	—	(27,744)
Noncontrolling interests assumed related to acquisitions	13,079	—	—	—	—	—	—	—	2,382	2,382
Distributions to noncontrolling interests	(7,384)	—	—	—	—	—	—	—	(806)	(806)
Adjustments to redemption amount of redeemable noncontrolling interests	4,666	—	—	—	—	—	—	(4,666)	—	(4,666)
Deferred compensation obligation	—	—	—	—	115	(115)	—	—	—	—
Other	—	—	—	54	—	—	—	—	2	56
Balances as of April 30, 2019	$151,450	$538	$800	$310,201	$4,043	($4,043)	($16,352)	$1,251,699	$115,278	$1,662,164

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

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HEICO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - UNAUDITED

For the Three Months Ended April 30, 2020 and 2019

(in thousands, except per share data)

		HEICO Shareholders' Equity
	Redeemable Noncontrolling Interests	Common Stock	Class A Common Stock	Capital in Excess of Par Value	Deferred Compensation Obligation	HEICO Stock Held by Irrevocable Trust	Accumulated Other Comprehensive Loss	Retained Earnings	Noncontrolling Interests	Total Shareholders' Equity
Balances as of January 31, 2020	$195,893	$541	$805	$287,779	$4,232	($4,232)	($19,263)	$1,508,784	$30,601	$1,809,247
Comprehensive income	4,655	—	—	—	—	—	(4,541)	75,453	636	71,548
Issuance of common stock to HEICO Savings and Investment Plan	—	—	—	5,983	—	—	—	—	—	5,983
Share-based compensation expense	—	—	—	2,629	—	—	—	—	—	2,629
Proceeds from stock option exercises	—	—	1	863	—	—	—	—	—	864
Redemptions of common stock related to stock option exercises	—	—	—	(5)	—	—	—	—	—	(5)
Noncontrolling interests assumed related to acquisitions	(2)	—	—	—	—	—	—	—	—	—
Distributions to noncontrolling interests	(4,630)	—	—	—	—	—	—	—	(231)	(231)
Adjustments to redemption amount of redeemable noncontrolling interests	591	—	—	—	—	—	—	(591)	—	(591)
Other	—	1	—	75	—	—	—	—	—	76
Balances as of April 30, 2020	$196,507	$542	$806	$297,324	$4,232	($4,232)	($23,804)	$1,583,646	$31,006	$1,889,520

		HEICO Shareholders' Equity
	Redeemable Noncontrolling Interests	Common Stock	Class A Common Stock	Capital in Excess of Par Value	Deferred Compensation Obligation	HEICO Stock Held by Irrevocable Trust	Accumulated Other Comprehensive Loss	Retained Earnings	Noncontrolling Interests	Total Shareholders' Equity
Balances as of January 31, 2019	$138,995	$534	$796	$324,395	$4,043	($4,043)	($11,069)	$1,174,811	$112,288	$1,601,755
Comprehensive income	4,585	—	—	—	—	—	(5,283)	81,782	3,369	79,868
Issuance of common stock to HEICO Savings and Investment Plan	—	—	—	5,344	—	—	—	—	—	5,344
Share-based compensation expense	—	—	—	2,548	—	—	—	—	—	2,548
Proceeds from stock option exercises	—	7	4	5,451	—	—	—	—	—	5,462
Redemptions of common stock related to stock option exercises	—	(3)	—	(27,591)	—	—	—	—	—	(27,594)
Noncontrolling interests assumed related to acquisitions	7,963	—	—	—	—	—	—	—	27	27
Distributions to noncontrolling interests	(4,987)	—	—	—	—	—	—	—	(408)	(408)
Adjustments to redemption amount of redeemable noncontrolling interests	4,894	—	—	—	—	—	—	(4,894)	—	(4,894)
Other	—	—	—	54	—	—	—	—	2	56
Balances as of April 30, 2019	$151,450	$538	$800	$310,201	$4,043	($4,043)	($16,352)	$1,251,699	$115,278	$1,662,164

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

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HEICO CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(in thousands)

	Six months ended April 30,
	2020	2019
Operating Activities:
Net income from consolidated operations	$210,711	$178,109
Adjustments to reconcile net income from consolidated operations to net cash provided by operating activities:
Depreciation and amortization	43,276	40,548
Share-based compensation expense	5,275	4,987
Employer contributions to HEICO Savings and Investment Plan	4,811	4,601
Increase in accrued contingent consideration	1,167	3,104
Deferred income tax (benefit) provision	(5,137)	648
Payment of contingent consideration	(175)	(67)
Changes in operating assets and liabilities, net of acquisitions:
Decrease (increase) in accounts receivable	44,419	(15,784)
(Increase) decrease in contract assets	(12,985)	5,699
Increase in inventories	(37,790)	(26,724)
(Increase) decrease in prepaid expenses and other current assets	(15,603)	27
Increase (decrease) in trade accounts payable	2,627	(7,698)
Decrease in accrued expenses and other current liabilities	(47,673)	(16,596)
Decrease in income taxes payable	(2,018)	(1,141)
Net changes in other long-term liabilities and assets related to HEICO Leadership Compensation Plan	13,951	10,604
Other	1,026	(2,064)
Net cash provided by operating activities	205,882	178,253
Investing Activities:
Acquisitions, net of cash acquired	(45,343)	(134,940)
Investments related to HEICO Leadership Compensation Plan	(13,600)	(10,800)
Capital expenditures	(12,435)	(12,596)
Other	473	636
Net cash used in investing activities	(70,905)	(157,700)
Financing Activities:
Borrowings on revolving credit facility	245,000	129,000
Payments on revolving credit facility	(68,000)	(105,000)
Proceeds from stock option exercises	2,392	5,528
Cash dividends paid	(10,762)	(9,305)
Distributions to noncontrolling interests	(9,742)	(8,190)
Redemptions of common stock related to stock option exercises	(2,567)	(27,744)
Payment of contingent consideration	(325)	(283)
Other	(444)	(176)
Net cash provided by (used in) financing activities	155,552	(16,170)
Effect of exchange rate changes on cash	(744)	109
Net increase in cash and cash equivalents	289,785	4,492
Cash and cash equivalents at beginning of year	57,001	59,599
Cash and cash equivalents at end of period	$346,786	$64,091

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

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HEICO CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of HEICO Corporation and its subsidiaries (collectively, “HEICO,” or the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q. Therefore, the condensed consolidated financial statements do not include all information and footnotes normally included in annual consolidated financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended October 31, 2019. The October 31, 2019 Condensed Consolidated Balance Sheet has been derived from the Company’s audited consolidated financial statements. In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments (consisting principally of normal recurring accruals) necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, statements of comprehensive income, statements of shareholders' equity and statements of cash flows for such interim periods presented. The results of operations for the six months ended April 30, 2020 are not necessarily indicative of the results which may be expected for the entire fiscal year.

The Company has two operating segments: the Flight Support Group (“FSG”), consisting of HEICO Aerospace Holdings Corp. and HEICO Flight Support Corp. and their respective subsidiaries; and the Electronic Technologies Group (“ETG”), consisting of HEICO Electronic Technologies Corp. (“HEICO Electronic”) and its subsidiaries.

HEICO's results of operations for the six and three months ended April 30, 2020 have been significantly affected by the COVID-19 outbreak, classified by the World Health Organization as a global pandemic in March 2020 (the “Outbreak”). The effects of the Outbreak and related actions by governments around the world to mitigate its spread have impacted the Company's employees, customers, suppliers and manufacturers. With respect to the Company’s results of operations, approximately half of HEICO’s net sales are derived from defense, space and other industrial markets including electronics, medical and telecommunications. Demand for products in that half of the Company’s business has not been fundamentally impacted and its operational results remain materially consistent with financial expectations prior to the commencement of the Outbreak. The remaining portion of HEICO’s net sales is derived from commercial aviation products and services. The Outbreak has caused significant volatility and a substantial decline in value across global economic markets. Most notably, the commercial aerospace industry has experienced an ongoing substantial decline in demand. As such, HEICO’s businesses that operate within the commercial aerospace industry have been materially impacted by the significant decline in global commercial air travel that began in March 2020.

8

As a result of the Outbreak, HEICO has assessed various accounting estimates, including those that require consideration of forecasted financial information, in context of the unknown future impacts of the Outbreak as of April 30, 2020 and through the date of filing this Quarterly Report. The accounting estimates assessed include, but were not limited to, the Company’s allowance for doubtful accounts, inventory reserves, contingent consideration arrangements, goodwill and other long-lived assets. Based on these assessments, no material impact was recorded to HEICO’s Condensed Consolidated Statement of Operations for the six and three months ended April 30, 2020.

New Accounting Pronouncements

        In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, which, as amended, was codified as Accounting Standards Codification ("ASC") Topic 842, "Leases" ("ASC 842"). ASC 842 requires recognition of lease assets and lease liabilities on the balance sheet of lessees. The Company adopted ASC 842 as of November 1, 2019 using a modified retrospective transition approach with the election to apply the guidance as of the adoption date instead of at the beginning of the earliest comparative period presented. The adoption of this guidance resulted in an increase in the Company's assets and liabilities due to the recognition of right-of-use ("ROU") assets and corresponding lease liabilities for leases that are currently classified as operating leases.

        Upon adoption, the Company elected the package of transitional practical expedients, which allowed the Company to not reassess its prior conclusions about lease identification, lease classification, and initial direct costs. In addition, the Company elected the short-term lease practical expedient, which allows HEICO to not record an ROU asset and lease liability for any lease with a term of twelve months or less, and also elected the single component practical expedient for all asset classes, which allows the Company to include both lease and non-lease components associated with a lease as a single lease component when determining the value of the ROU asset and lease liability.

        The adoption of this guidance resulted in the Company recording ROU assets and corresponding lease liabilities of $63.4 million and $64.1 million, respectively, in the Company's Condensed Consolidated Balance Sheet. The adoption of ASC 842 did not have a material impact on the Company’s Condensed Consolidated Statement of Operations or Statement of Cash Flows. See Note 9, Leases, for additional information regarding the Company's accounting policy for leases and disclosures required by ASC 842.

        In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment," which is intended to simplify the current test for goodwill impairment by eliminating the second step in which the implied value of a reporting unit is calculated when the carrying value of the reporting unit exceeds its fair value. Under ASU 2017-04, goodwill impairment should be recognized for the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 must be applied prospectively and is effective for any annual or interim goodwill impairment test in fiscal

9

years beginning after December 15, 2019, or in fiscal 2021 for HEICO. Early adoption is permitted. The Company is currently evaluating the effect the adoption of this guidance will have on its consolidated results of operations, financial position and cash flows.

2.  ACQUISITIONS

In December 2019, the Company, through a subsidiary of HEICO Electronic, acquired 100% of the business and assets of the Human-Machine Interface ("HMI") product line of Spectralux Corporation. HMI designs, manufactures, and repairs flight deck annunciators, panels, indicators, and illuminated keyboards, as well as lighting controls, and flight deck lighting.

In December 2019, the Company, through HEICO Electronic, acquired 80.1% of the stock of Quell Corporation ("Quell"). Quell designs and manufactures electromagnetic interference (EMI)/radio-frequency interference (RFI) and transient protection solutions for a wide variety of connectors that principally serve customers within the aerospace and defense markets. The remaining 19.9% continues to be owned by certain members of Quell's management team (see Note 3, Selected Financial Statement Information - Redeemable Noncontrolling Interests, for additional information).

        The purchase price of each fiscal 2020 acquisition was paid in cash, principally using proceeds from the Company's revolving credit facility, and is not material or significant to the Company's condensed consolidated financial statements. The allocation of the total consideration for the fiscal 2020 acquisitions to the tangible and identifiable intangible assets acquired and liabilities and noncontrolling interests assumed is preliminary until the Company obtains final information regarding their fair values. However, the Company does not expect any adjustment to such allocations to be material to the Company's consolidated financial statements. The operating results of the fiscal 2020 acquisitions were included in the Company’s results of operations from each of the effective acquisition dates. The amount of net sales and earnings of the fiscal 2020 acquisitions included in the Condensed Consolidated Statement of Operations for the six and three months ended April 30, 2020 is not material. Had the fiscal 2020 acquisitions occurred as of November 1, 2018, net sales, net income from consolidated operations, net income attributable to HEICO, and basic and diluted net income per share attributable to HEICO shareholders on a pro forma basis for the six and three months ended April 30, 2020 and 2019 would not have been materially different than the reported amounts.

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3.  SELECTED FINANCIAL STATEMENT INFORMATION

Accounts Receivable

(in thousands)	April 30, 2020	October 31, 2019
Accounts receivable	$235,154	$277,992
Less: Allowance for doubtful accounts	(4,270)	(3,666)
Accounts receivable, net	$230,884	$274,326

Inventories

(in thousands)	April 30, 2020	October 31, 2019
Finished products	$221,338	$199,880
Work in process	40,629	32,548
Materials, parts, assemblies and supplies	195,852	187,891
Inventories, net of valuation reserves	$457,819	$420,319

Property, Plant and Equipment

(in thousands)	April 30, 2020	October 31, 2019
Land	$6,817	$6,820
Buildings and improvements	118,933	116,997
Machinery, equipment and tooling	260,153	253,127
Construction in progress	10,380	8,382
	396,283	385,326
Less: Accumulated depreciation and amortization	(224,884)	(211,981)
Property, plant and equipment, net	$171,399	$173,345

Accrued Customer Rebates and Credits

The aggregate amount of accrued customer rebates and credits included within accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheets was $18.0 million as of April 30, 2020 and October 31, 2019. The total customer rebates and credits deducted within net sales for the six months ended April 30, 2020 and 2019 was $3.8 million and $3.6 million, respectively. The total customer rebates and credits deducted within net sales for the three months ended April 30, 2020 and 2019 was $1.7 million and $2.2 million, respectively.

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Research and Development Expenses

The amount of new product research and development ("R&D") expenses included in cost of sales for the six and three months ended April 30, 2020 and 2019 is as follows (in thousands):

	Six months ended April 30,		Three months ended April 30,
	2020	2019	2020	2019
R&D expenses	$33,855	$32,049	$16,752	$16,849

Redeemable Noncontrolling Interests

The holders of equity interests in certain of the Company's subsidiaries have rights ("Put Rights") that may be exercised on varying dates causing the Company to purchase their equity interests through fiscal 2029. The Put Rights, all of which relate either to common shares or membership interests in limited liability companies, provide that the cash consideration to be paid for their equity interests (the "Redemption Amount") be at fair value or a formula that management intended to reasonably approximate fair value based solely on a multiple of future earnings over a measurement period. Management's estimate of the aggregate Redemption Amount of all Put Rights that the Company could be required to pay is as follows (in thousands):

	April 30, 2020	October 31, 2019
Redeemable at fair value	$144,854	$136,611
Redeemable based on a multiple of future earnings	51,653	51,653
Redeemable noncontrolling interests	$196,507	$188,264

As discussed in Note 2, Acquisitions, the Company, through HEICO Electronic, acquired 80.1% of the stock of Quell in December 2019. As part of the shareholders' agreement, the noncontrolling interest holders have the right to cause the Company to purchase their equity interests over a four-year period beginning in fiscal 2025, or sooner under certain conditions, and the Company has the right to purchase the same equity interests over the same period.

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Accumulated Other Comprehensive Loss

Changes in the components of accumulated other comprehensive loss for the six months ended April 30, 2020 are as follows (in thousands):

	Foreign Currency Translation	Defined Benefit Pension Plan	Accumulated Other Comprehensive Loss
Balances as of October 31, 2019	($14,989)	($1,750)	($16,739)
Unrealized loss	(7,104)	—	(7,104)
Amortization of unrealized loss	—	39	39
Balances as of April 30, 2020	($22,093)	($1,711)	($23,804)

4.  GOODWILL AND OTHER INTANGIBLE ASSETS

        Changes in the carrying amount of goodwill by operating segment for the six months ended April 30, 2020 are as follows (in thousands):

	Segment		Consolidated Totals
	FSG	ETG
Balances as of October 31, 2019	$410,044	$858,659	$1,268,703
Goodwill acquired	—	34,173	34,173
Foreign currency translation adjustments	(569)	(1,835)	(2,404)
Adjustments to goodwill	—	(285)	(285)
Balances as of April 30, 2020	$409,475	$890,712	$1,300,187

The goodwill acquired pertains to the fiscal 2020 acquisitions described in Note 2, Acquisitions, and represents the residual value after the allocation of the total consideration to the tangible and identifiable intangible assets acquired and liabilities and noncontrolling interests assumed. Foreign currency translation adjustments are included in other comprehensive income (loss) in the Company's Condensed Consolidated Statements of Comprehensive Income. The adjustments to goodwill represent immaterial measurement period adjustments to the purchase price allocation of certain fiscal 2019 acquisitions. The Company estimates that $9 million of the goodwill acquired in fiscal 2020 will be deductible for income tax purposes.

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Identifiable intangible assets consist of the following (in thousands):

	As of April 30, 2020			As of October 31, 2019
	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount
Amortizing Assets:
Customer relationships	$417,412	($178,510)	$238,902	$411,076	($162,722)	$248,354
Intellectual property	220,372	(76,021)	144,351	216,359	(70,169)	146,190
Licenses	6,559	(4,387)	2,172	6,559	(4,102)	2,457
Patents	996	(691)	305	986	(666)	320
Non-compete agreements	805	(805)	—	813	(813)	—
Trade names	450	(199)	251	450	(180)	270
	646,594	(260,613)	385,981	636,243	(238,652)	397,591
Non-Amortizing Assets:
Trade names	154,642	—	154,642	153,102	—	153,102
	$801,236	($260,613)	$540,623	$789,345	($238,652)	$550,693

The increase in the gross carrying amount of customer relationships, intellectual property and trade names as of April 30, 2020 compared to October 31, 2019 principally relates to such intangible assets recognized in connection with the fiscal 2020 acquisitions (see Note 2, Acquisitions).

        Amortization expense related to intangible assets for the six months ended April 30, 2020 and 2019 was $27.6 million and $25.9 million, respectively. Amortization expense related to intangible assets for the three months ended April 30, 2020 and 2019 was $13.9 million and $13.1 million, respectively. Amortization expense related to intangible assets for the remainder of fiscal 2020 is estimated to be $27.5 million. Amortization expense for each of the next five fiscal years and thereafter is estimated to be $52.4 million in fiscal 2021, $45.8 million in fiscal 2022, $40.6 million in fiscal 2023, $36.1 million in fiscal 2024, $32.2 million in fiscal 2025, and $151.4 million thereafter.

5.  LONG-TERM DEBT

        Long-term debt consists of the following (in thousands):

	April 30, 2020	October 31, 2019
Borrowings under revolving credit facility	$730,000	$553,000
Finance leases and note payable	10,213	8,955
	740,213	561,955
Less: Current maturities of long-term debt	(1,025)	(906)
	$739,188	$561,049

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The Company's borrowings under its revolving credit facility mature in fiscal 2023. As of April 30, 2020 and October 31 2019, the weighted average interest rate on borrowings under the Company's revolving credit facility was 1.6% and 3.0%, respectively. The revolving credit facility contains both financial and non-financial covenants. As of April 30, 2020, the Company was in compliance with all such covenants.

6.  REVENUE

Contract Balances

        Contract assets (unbilled receivables) represent revenue recognized on contracts using an over-time recognition model in excess of amounts invoiced to the customer. Contract liabilities (deferred revenue) represent customer advances and billings in excess of revenue recognized and are included within accrued expenses and other current liabilities in the Company’s Condensed Consolidated Balance Sheets. 

        Changes in the Company’s contract assets and liabilities for the six months ended April 30, 2020 are as follows (in thousands):

	April 30, 2020	October 31, 2019	Change
Contract assets	$56,033	$43,132	$12,901
Contract liabilities	26,928	23,809	3,119
Net contract assets	$29,105	$19,323	$9,782

        The increase in the Company's contract assets during the first six months of fiscal 2020 occurred within the ETG and principally reflects additional unbilled receivables on certain customer contracts using an over-time recognition model in excess of billings on certain customer contracts.

        The increase in the Company's contract liabilities during the first six months of fiscal 2020 mainly occurred within the FSG and principally reflects the receipt of new customer deposits on certain customer contracts in excess of reductions to contract liabilities from customer deposits recognized as revenue.

        The amount of revenue that the Company recognized during the six and three months ended April 30, 2020 that was included in contract liabilities as of the beginning of fiscal 2020 was $16.5 million and $3.1 million, respectively.

Remaining Performance Obligations

        As of April 30, 2020, the Company had $394.4 million of remaining performance obligations associated with contracts with an original duration of greater than one year pertaining to the majority of the products offered by the ETG and the FSG's specialty products and aftermarket replacement parts product lines. The Company will recognize net sales as these

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obligations are satisfied. The Company expects to recognize $168.0 million of this amount during the remainder of fiscal 2020 and $226.4 million thereafter, of which the majority is expected to occur in fiscal 2021.

Contract Estimates

        Changes in estimates did not have a material effect on net income from consolidated operations for the six and three months ended April 30, 2020.

Disaggregation of Revenue

        The following table summarizes the Company’s net sales by product line for each operating segment (in thousands):

	Six months ended April 30,		Three months ended April 30,
	2020	2019	2020	2019
Flight Support Group:
Aftermarket replacement parts (1)	$309,459	$326,722	$141,192	$167,225
Repair and overhaul parts and services (2)	121,916	140,617	52,629	73,454
Specialty products (3)	121,656	128,125	58,143	67,572
Total net sales	553,031	595,464	251,964	308,251
Electronic Technologies Group:
Electronic component parts for defense, space and aerospace equipment (4)	329,675	299,414	168,962	161,664
Electronic component parts for equipment in various other industries (5)	97,691	99,466	49,993	52,787
Total net sales	427,366	398,880	218,955	214,451
Intersegment sales	(5,976)	(12,550)	(2,773)	(7,054)
Total consolidated net sales	$974,421	$981,794	$468,146	$515,648

⁽¹⁾ Includes various jet engine and aircraft component replacement parts.

⁽²⁾ Includes primarily the sale of parts consumed in various repair and overhaul services on selected jet engine and aircraft components, avionics, instruments, composites and flight surfaces of commercial and military aircraft.

⁽³⁾ Includes primarily the sale of specialty components such as thermal insulation blankets, renewable/reusable insulation systems, advanced niche components, complex composite assemblies, and expanded foil mesh.

⁽⁴⁾ Includes various component parts such as electro-optical infrared simulation and test equipment, electro-optical laser products, electro-optical, microwave and other power equipment, high-speed interface products, power conversion products, underwater locator beacons, emergency locator transmission beacons, traveling wave tube amplifiers, microwave power modules, three-dimensional

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microelectronic and stacked memory products, crashworthy and ballistically self-sealing auxiliary fuel systems, radio frequency (RF) and microwave amplifiers, transmitters and receivers, high performance communications and electronic intercept receivers and tuners, high performance active antenna systems, and technical surveillance countermeasures equipment.

⁽⁵⁾ Includes various component parts such as electromagnetic and radio interference shielding, high voltage interconnection devices, high voltage advanced power electronics, harsh environment connectivity products, custom molded cable assemblies and silicone material for a variety of demanding applications.

        The following table summarizes the Company’s net sales by industry for each operating segment (in thousands):

	Six months ended April 30,		Three months ended April 30,
	2020	2019	2020	2019
Flight Support Group:
Aerospace	$428,578	$484,398	$188,655	$249,225
Defense and Space	104,395	87,503	54,142	45,969
Other (1)	20,058	23,563	9,167	13,057
Total net sales	553,031	595,464	251,964	308,251
Electronic Technologies Group:
Defense and Space	272,601	251,171	139,491	135,952
Other (2)	112,706	105,538	57,743	55,623
Aerospace	42,059	42,171	21,721	22,876
Total net sales	427,366	398,880	218,955	214,451
Intersegment sales	(5,976)	(12,550)	(2,773)	(7,054)
Total consolidated net sales	$974,421	$981,794	$468,146	$515,648

⁽¹⁾ Principally industrial products.

⁽²⁾ Principally other electronics and medical products.

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7.  INCOME TAXES

        The Company's effective tax rate in the first six months of fiscal 2020 was .3%, as compared to 14.5% in the first six months of fiscal 2019. The Company recognized a discrete tax benefit from stock option exercises in both the first quarter of fiscal 2020 and 2019 of $47.6 million and $16.6 million, respectively. The $31.0 million larger benefit from stock option exercises recognized in the first quarter of fiscal 2020 was the result of more stock options exercised and the strong appreciation in HEICO's stock price during the optionees' holding periods.

        The Company's effective tax rate in the second quarter of fiscal 2020 was 22.6%, as compared to 22.5% in the second quarter of fiscal 2019.

8. FAIR VALUE MEASUREMENTS

The Company's assets and liabilities that were measured at fair value on a recurring basis are set forth by level within the fair value hierarchy in the following tables (in thousands):

	As of April 30, 2020
	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets:
Deferred compensation plan:
Corporate-owned life insurance	$—	$157,522	$—	$157,522
Total assets	$—	$157,522	$—	$157,522
Liabilities:
Contingent consideration	$—	$—	$18,993	$18,993

	As of October 31, 2019
	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets:
Deferred compensation plan:
Corporate-owned life insurance	$—	$151,871	$—	$151,871
Money market funds	20	—	—	20
Total assets	$20	$151,871	$—	$151,891
Liabilities:
Contingent consideration	$—	$—	$18,326	$18,326

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The Company maintains the HEICO Corporation Leadership Compensation Plan (the "LCP"), which is a non-qualified deferred compensation plan. The assets of the LCP principally represent cash surrender values of life insurance policies, which derive their fair values from investments in mutual funds that are managed by an insurance company, and are classified within Level 2 and valued using a market approach. Certain other assets of the LCP represent investments in money market funds that are classified within Level 1. The assets of the LCP are held within an irrevocable trust and classified within other assets in the Company’s Condensed Consolidated Balance Sheets. The related liabilities of the LCP are included within other long-term liabilities and accrued expenses and other current liabilities in the Company’s Condensed Consolidated Balance Sheets and have an aggregate value of $156.3 million as of April 30, 2020 and $151.1 million as of October 31, 2019.

As part of the agreement to acquire a subsidiary by the FSG in fiscal 2019, the Company may be obligated to pay contingent consideration of $6.4 million in fiscal 2022 should the acquired entity meet a certain earnings objective during the second and third years following the acquisition. As of April 30, 2020, the estimated fair value of the contingent consideration was $1.2 million.

As part of the agreement to acquire a subsidiary by the ETG in fiscal 2017, the Company may be obligated to pay contingent consideration of $20.0 million in fiscal 2023 should the acquired entity meet a certain earnings objective during the first six years following the acquisition. As of April 30, 2020, the estimated fair value of the contingent consideration was $17.8 million.

        The estimated fair value of the contingent consideration arrangements described above are classified within Level 3 and were determined using probability-based scenario analyses. Under this method, a set of discrete potential future subsidiary earnings was determined using internal estimates based on various revenue growth rate assumptions for each scenario. A probability of likelihood was assigned to each discrete potential future earnings estimate and the resultant contingent consideration was calculated. The resulting probability-weighted contingent consideration amounts were discounted using a weighted average discount rate reflecting the credit risk of HEICO. Changes in either the revenue growth rates, related earnings or the discount rate could result in a material change to the amount of contingent consideration accrued and such changes will be recorded in the Company's condensed consolidated statements of operations.

The Level 3 inputs used to derive the estimated fair value of the Company's contingent consideration liability as of April 30, 2020 were as follows:

	Fiscal 2019 Acquisition					Fiscal 2017 Acquisition
Compound annual revenue growth rate range	(7	%)	-	9	%	(3	%)	-	10	%
Weighted average discount rate	4.3				%	3.4				%

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Changes in the Company’s contingent consideration liability measured at fair value on a recurring basis using unobservable inputs (Level 3) for the six months ended April 30, 2020 are as follows (in thousands):

	Liabilities
Balance as of October 31, 2019	$18,326
Increase in accrued contingent consideration	1,167
Payment of contingent consideration	(500)
Balance as of April 30, 2020	$18,993

The Company's contingent consideration liability is included in other long-term liabilities in its Condensed Consolidated Balance Sheets and the Company records changes in accrued contingent consideration within selling, general and administrative expenses in its Condensed Consolidated Statements of Operations.

The Company did not have any transfers between Level 1 and Level 2 fair value measurements during the six months ended April 30, 2020.

The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, trade accounts payable and accrued expenses and other current liabilities approximate fair value as of April 30, 2020 due to the relatively short maturity of the respective instruments. The carrying amount of long-term debt approximates fair value due to its variable interest rates.

9.  LEASES

        The Company’s lease arrangements primarily pertain to manufacturing facilities, office buildings, equipment, land and vehicles. The Company evaluates whether a contractual arrangement that provides it with control over the use of an asset is, or contains, a lease at the inception date. The term of a lease is inclusive of any option to renew, extend, or terminate the lease when it is reasonably certain that the Company will exercise such option. The Company classifies a lease as operating or finance using the classification criteria set forth in ASC 842. Finance leases are not material to the Company's condensed consolidated financial statements. HEICO recognizes operating lease right-of-use (“ROU”) assets and corresponding lease liabilities as of the lease commencement date based on the present value of the lease payments over the lease term. The discount rate used to calculate the present value of the Company’s leases is based on HEICO’s incremental borrowing rate and considers credit risk, the lease term and other available information as of the commencement date since the leases do not provide a readily determinable implicit rate. Variable lease payments that depend on an index or a rate are included in the determination of operating ROU assets and lease liabilities using the index or rate at the lease commencement date. Variable lease payments that do not depend on an index or rate or resulting from changes in an index or rate subsequent to the lease commencement date, are recorded as lease expense in the period in which the obligation for the payment is incurred. The Company’s operating ROU assets are increased by any prepaid lease payments and initial direct

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costs and reduced by any lease incentives. The Company’s leases do not contain any material residual value guarantees or restrictive covenants.

        HEICO’s operating lease ROU assets represent its right to use an underlying asset during the lease term and its operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. HEICO’s operating lease ROU assets are included within other assets and its operating lease liabilities are included within other long-term liabilities and accrued expenses and other current liabilities in the Company’s Condensed Consolidated Balance Sheet. For additional information on the Company’s finance leases, see Note 5, Long-term Debt, of the Notes to Condensed Consolidated Financial Statements of this Quarterly Report and Note 5, Long-term Debt, and Note 3, Selected Financial Statement Information - Property, Plant and Equipment, of the Notes to Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the year ended October 31, 2019. The following table presents the Company’s operating lease ROU assets and lease liabilities as of April 30, 2020 (in thousands):

	April 30, 2020
Right-of-use assets	$60,056
Current lease liabilities	$13,365
Long-term lease liabilities	47,570
Total operating lease liabilities	$60,935

The Company’s operating lease expense is recorded as a component of cost of sales and/or selling, general, and administrative expenses in the Company’s Condensed Consolidated Statements of Operations. The following table presents the components of operating lease expense for the six and three months ended April 30, 2020 (in thousands): 

	Six months ended	Three months ended
	April 30, 2020	April 30, 2020
Operating lease expense	$8,544	$4,284
Variable lease expense	1,323	708
Total operating lease expense (1)	$9,867	$4,992

⁽¹⁾ Excludes short-term lease expense, which is not material.

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The following table presents a maturity analysis of the Company's operating lease liabilities as of April 30, 2020 for the remainder of fiscal 2020 and the next five fiscal years and thereafter (in thousands):

Year ending October 31,
2020	$7,762
2021	16,101
2022	14,192
2023	8,834
2024	5,006
2025	4,136
Thereafter	18,004
Total minimum lease payments	74,035
Less: amount representing interest	(13,100)
Present value of minimum lease payments	$60,935

Prior to the adoption of ASC 842, the Company's future minimum lease payments under non-cancelable operating leases on an undiscounted basis as of October 31, 2019 were $15.5 million in fiscal 2020, $15.6 million in fiscal 2021, $13.8 million in fiscal 2022, $8.5 million in fiscal 2023, $4.7 million in fiscal 2024 and $18.8 million thereafter.

        The Company does not have any material leases that have been signed but have yet to commence as of April 30, 2020.

        The following table presents the weighted average remaining lease term and discount rate of the Company’s operating leases as of April 30, 2020:

	April 30, 2020
Weighted average remaining lease term (years)	7
Weighted average discount rate	5.2%

The following table presents supplemental disclosures of cash flow information associated with the Company's operating leases for the six months ended April 30, 2020 (in thousands):

	Six months ended
	April 30, 2020
Cash paid for amounts included in the measurement of lease liabilities	$8,448
Right-of-use assets obtained in exchange for new lease liabilities	6,824

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10. NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS

        The computation of basic and diluted net income per share attributable to HEICO shareholders is as follows (in thousands, except per share data):

	Six months ended April 30,		Three months ended April 30,
	2020	2019	2020	2019
Numerator:
Net income attributable to HEICO	$197,341	$161,114	$75,453	$81,782
Denominator:
Weighted average common shares outstanding - basic	134,596	133,123	134,669	133,313
Effect of dilutive stock options	2,673	3,969	2,448	3,893
Weighted average common shares outstanding - diluted	137,269	137,092	137,117	137,206
Net income per share attributable to HEICO shareholders:
Basic	$1.47	$1.21	$.56	$.61
Diluted	$1.44	$1.18	$.55	$.60
Anti-dilutive stock options excluded	283	615	448	470

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11. OPERATING SEGMENTS

Information on the Company’s two operating segments, the FSG and the ETG, for the six and three months ended April 30, 2020 and 2019, respectively, is as follows (in thousands):

			Other, Primarily Corporate and Intersegment (1)	Consolidated Totals
	Segment
	FSG	ETG
Six months ended April 30, 2020:
Net sales	$553,031	$427,366	($5,976)	$974,421
Depreciation	7,245	5,809	511	13,565
Amortization	9,611	19,608	492	29,711
Operating income	109,576	123,017	(13,442)	219,151
Capital expenditures	6,765	5,665	5	12,435
Six months ended April 30, 2019:
Net sales	$595,464	$398,880	($12,550)	$981,794
Depreciation	6,758	5,395	503	12,656
Amortization	9,723	17,677	492	27,892
Operating income	115,046	118,954	(16,870)	217,130
Capital expenditures	6,576	6,012	8	12,596
Three months ended April 30, 2020:
Net sales	$251,964	$218,955	($2,773)	$468,146
Depreciation	3,628	2,881	256	6,765
Amortization	4,752	9,930	246	14,928
Operating income	47,531	65,526	(4,896)	108,161
Capital expenditures	2,647	2,938	—	5,585
Three months ended April 30, 2019:
Net sales	$308,251	$214,451	($7,054)	$515,648
Depreciation	3,403	2,789	252	6,444
Amortization	4,920	8,901	246	14,067
Operating income	62,166	67,352	(10,335)	119,183
Capital expenditures	3,727	2,954	8	6,689

⁽¹⁾ Intersegment activity principally consists of net sales from the ETG to the FSG.

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Total assets by operating segment are as follows (in thousands):

			Other, Primarily Corporate	Consolidated Totals
	Segment
	FSG	ETG
Total assets as of April 30, 2020	$1,201,852	$1,827,060	$335,923	$3,364,835
Total assets as of October 31, 2019	1,149,737	1,643,032	176,442	2,969,211

12.  COMMITMENTS AND CONTINGENCIES

Guarantees

As of April 30, 2020, the Company has arranged for standby letters of credit aggregating $4.8 million, which are supported by its revolving credit facility and pertain to payment guarantees related to potential workers' compensation claims and a facility lease as well as performance guarantees related to customer contracts entered into by certain of the Company's subsidiaries.

Product Warranty

Changes in the Company’s product warranty liability for the six months ended April 30, 2020 and 2019, respectively, are as follows (in thousands):

	Six months ended April 30,
	2020	2019
Balances as of beginning of fiscal year	$2,810	$3,306
Accruals for warranties	1,194	1,264
Acquired warranty liabilities	50	—
Warranty claims settled	(952)	(1,543)
Balances as of April 30	$3,102	$3,027

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.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

This discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and notes thereto included herein. The preparation of consolidated 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates if different assumptions were used or different events ultimately transpire.

Our critical accounting policies, which require management to make judgments about matters that are inherently uncertain, are described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Critical Accounting Policies” in our Annual Report on Form 10-K for the year ended October 31, 2019. There have been no material changes to our critical accounting policies during the six months ended April 30, 2020.

Our business is comprised of two operating segments: the Flight Support Group (“FSG”), consisting of HEICO Aerospace Holdings Corp. and HEICO Flight Support Corp. and their respective subsidiaries; and the Electronic Technologies Group (“ETG”), consisting of HEICO Electronic Technologies Corp. and its subsidiaries.

Our results of operations for the six and three months ended April 30, 2020 have been significantly affected by the COVID-19 outbreak, classified by the World Health Organization as a global pandemic in March 2020 (the “Outbreak”). The effects of the Outbreak and related actions by governments around the world to mitigate its spread have impacted our employees, customers, suppliers and manufacturers. In response to the economic impact from the Outbreak, we have implemented certain cost reduction efforts, including layoffs, temporary reduced work hours and temporary pay reductions within various departments of our business, including within our executive management team. Additionally, our response to the Outbreak has included the implementation of varying health and safety measures at our facilities, including: supplying and requiring the use of personal protective equipment; body temperature taking; staggering work shifts; increasing work-from-home capabilities; consistent and ongoing cleaning of work spaces and high-touch areas; and establishing processes aligned with the Centers for Disease and Control guidelines to work with any individual exposed to COVID-19 on their necessary quarantine period and the process for the individual to return to work.

With respect to our results of operations, approximately half of our net sales are derived from defense, space and other industrial markets including electronics, medical and telecommunications. Demand for products in that half of our business has not been

26

fundamentally impacted and its operational results remain materially consistent with financial expectations prior to the commencement of the Outbreak. However, we have experienced, and expect to continue experiencing, periodic operational disruptions resulting from supply chain disturbances, staffing challenges, temporary facility closures, transportation interruptions and other conditions which slow production or increase costs. While these issues have not yet been material, it is impossible to predict their future impact and our current experience indicates that the likely effect will be to delay orders and shipments measured in weeks and months, and to temporarily increase some costs, as opposed to profoundly changing our business overall. Fortunately, many of our defense and medical component design, manufacturing and supply operations are believed to be crucial suppliers to markets with continuing strong needs. While it has not had a material impact on our consolidated net sales, demand for our components used in medical equipment, such as ventilators, x-ray systems, sterilization equipment and personal protective equipment, has increased as a result of the Outbreak.

The remaining portion of our net sales is derived from commercial aviation products and services. The Outbreak has caused significant volatility and a substantial decline in value across global economic markets. Most notably, the commercial aerospace industry has experienced an ongoing substantial decline in demand. As such, our businesses that operate within the commercial aerospace industry have been materially impacted by the significant decline in global commercial air travel that began in March 2020. Once commercial air travel resumes, cost savings will most likely be a priority for our commercial aviation customers and we anticipate recovery in demand for our commercial aviation products, which frequently provide aircraft operators with significant savings. Furthermore, we believe our cost-saving solutions and robust product development programs will enable us to potentially increase market share and emerge with a stronger presence within this market.

Additionally, our results of operations for the six and three months ended April 30, 2020 have been affected by the fiscal 2019 acquisitions as further detailed in Note 2, Acquisitions, of the Notes to Consolidated Financial Statements of our Annual Report on Form 10-K for the year ended October 31, 2019.

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Results of Operations

The following table sets forth the results of our operations, net sales and operating income by segment and the percentage of net sales represented by the respective items in our Condensed Consolidated Statements of Operations (in thousands):

	Six months ended April 30,				Three months ended April 30,
	2020		2019		2020		2019
Net sales	$974,421		$981,794		$468,146		$515,648
Cost of sales	597,484		590,170		289,256		306,261
Selling, general and administrative expenses	157,786		174,494		70,729		90,204
Total operating costs and expenses	755,270		764,664		359,985		396,465
Operating income	$219,151		$217,130		$108,161		$119,183
Net sales by segment:
Flight Support Group	$553,031		$595,464		$251,964		$308,251
Electronic Technologies Group	427,366		398,880		218,955		214,451
Intersegment sales	(5,976)		(12,550)		(2,773)		(7,054)
	$974,421		$981,794		$468,146		$515,648
Operating income by segment:
Flight Support Group	$109,576		$115,046		$47,531		$62,166
Electronic Technologies Group	123,017		118,954		65,526		67,352
Other, primarily corporate	(13,442)		(16,870)		(4,896)		(10,335)
	$219,151		$217,130		$108,161		$119,183
Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Gross profit	38.7	%	39.9	%	38.2	%	40.6	%
Selling, general and administrative expenses	16.2	%	17.8	%	15.1	%	17.5	%
Operating income	22.5	%	22.1	%	23.1	%	23.1	%
Interest expense	.8	%	1.1	%	.8	%	1.1	%
Other income	—	%	.2	%	—	%	.5	%
Income tax expense	.1	%	3.1	%	5.0	%	5.1	%
Net income attributable to noncontrolling interests	1.4	%	1.7	%	1.2	%	1.6	%
Net income attributable to HEICO	20.3	%	16.4	%	16.1	%	15.9	%

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Comparison of First Six Months of Fiscal 2020 to First Six Months of Fiscal 2019

Net Sales

Our consolidated net sales in the first six months of fiscal 2020 decreased by 1% to $974.4 million, as compared to net sales of $981.8 million in the first six months of fiscal 2019. The decrease in consolidated net sales principally reflects a decrease of $42.4 million (a 7% decrease) to $553.0 million in net sales within the FSG partially offset by an increase of $28.5 million (a 7% increase) to a record $427.4 million in net sales within the ETG. The net sales decrease in the FSG is principally organic and reflects lower demand for the majority of our products and services resulting from the significant decline in global commercial air travel beginning in March 2020 due to the Outbreak. As a result, net sales of our repair and overhaul parts and services, aftermarket replacement parts, and specialty products product lines decreased by $18.7 million, $17.2 million, and $6.5 million, respectively. The net sales increase in the ETG reflects net sales of $28.2 million contributed by our fiscal 2019 and 2020 acquisitions as well as organic growth of 2%. The ETG's organic growth is mainly attributable to increased demand for our defense products resulting in a net sales increase of $22.0 million partially offset by lower demand for our space products resulting in a net sales decrease of $14.8 million. Sales price changes were not a significant contributing factor to the change in net sales of the FSG and ETG in the first six months of fiscal 2020.

Gross Profit and Operating Expenses

Our consolidated gross profit margin decreased to 38.7% in the first six months of fiscal 2020, as compared to 39.9% in the first six months of fiscal 2019, principally reflecting a decrease of 2.2% and 1.1% in the ETG's and FSG's gross profit margin, respectively. The decrease in the ETG's gross profit margin principally reflects a decrease in net sales of certain space products and a less favorable product mix of certain aerospace products, partially offset by increased net sales of certain defense products. The decrease in the FSG's gross profit margin principally reflects a decrease in net sales and less favorable product mix within our repair and overhaul parts and services product line as well as a less favorable product mix within our aftermarket replacement parts product line. Total new product research and development expenses included within our consolidated cost of sales were $33.9 million in the first six months of fiscal 2020, up from $32.0 million in the first six months of fiscal 2019.

Our consolidated selling, general and administrative ("SG&A") expenses decreased by 10% to $157.8 million in the first six months of fiscal 2020, as compared to $174.5 million in the first six months of fiscal 2019. The decrease in consolidated SG&A expenses principally reflects an $18.6 million decrease in performance-based compensation expense and a $4.3 million reduction in other selling expenses including outside sales commissions, marketing and travel, partially offset by $7.5 million attributable to the fiscal 2019 and 2020 acquisitions.

        Our consolidated SG&A expenses as a percentage of net sales decreased to 16.2% in the first six months of fiscal 2020, down from 17.8% in the first six months of fiscal 2019. The

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decrease in consolidated SG&A expenses as a percentage of net sales is mainly due to a 1.9% impact from the previously mentioned lower performance-based compensation expense.

Operating Income

        Our consolidated operating income increased by 1% to a record $219.2 million in the first six months of fiscal 2020, up from $217.1 million in the first six months of fiscal 2019. The increase in consolidated operating income principally reflects a $4.1 million increase (a 3% increase) to a record $123.0 million in operating income of the ETG partially offset by a $5.5 million decrease (a 5% decrease) to $109.6 million in operating income of the FSG. The increase in operating income of the ETG principally reflects the previously mentioned net sales growth and a $4.3 million decrease in performance-based compensation expense, partially offset by the previously mentioned lower gross profit margin. The decrease in operating income of the FSG principally reflects the previously mentioned decrease in net sales and lower gross profit margin, partially offset by an $11.8 million decrease in performance-based compensation expense. Further, the increase in consolidated operating income reflects $2.1 million of lower corporate expenses mainly attributable to a decrease in performance-based compensation expense.

Our consolidated operating income as a percentage of net sales improved to 22.5% in the first six months of fiscal 2020, up from 22.1% in the first six months of fiscal 2019. The increase principally reflects an increase in the FSG’s operating income as a percentage of net sales to 19.8% in the first six months of fiscal 2020, up from 19.3% in the first six months of fiscal 2019 and the previously mentioned lower corporate expenses, partially offset by a decrease in the ETG’s operating income as a percentage of net sales to 28.8% in the first six months of fiscal 2020 as compared to 29.8% in the first six months of fiscal 2019. The increase in the FSG’s operating income as a percentage of net sales principally reflects a 1.6% decrease in SG&A expenses as a percentage of net sales mainly from lower performance-based compensation expense, partially offset by the previously mentioned lower gross profit margin. The decrease in the ETG's operating income as a percentage of net sales principally reflects the previously mentioned lower gross profit margin partially offset by a 1.1% decrease in SG&A expenses as a percentage of net sales mainly from lower performance-based compensation expense.

Interest Expense

Interest expense decreased to $8.0 million in the first six months of fiscal 2020, down from $11.0 million in the first six months of fiscal 2019. The decrease was principally due to a lower weighted average interest rate on borrowings outstanding under our revolving credit facility.

Other Income

Other income in the first six months of fiscal 2020 and 2019 was not material.

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Income Tax Expense

Our effective tax rate in the first six months of fiscal 2020 was .3%, as compared to 14.5% in the first six months of fiscal 2019. HEICO recognized a discrete tax benefit from stock option exercises in both the first quarter of fiscal 2020 and 2019 of $47.6 million and $16.6 million, respectively. The $31.0 million larger benefit from stock option exercises recognized in the first quarter of fiscal 2020 was the result of more stock options exercised and the strong appreciation in HEICO's stock price during the optionees' holding periods.  

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests relates to the 20% noncontrolling interest held by Lufthansa Technik AG ("LHT") in HEICO Aerospace Holdings Corp. ("HEICO Aerospace") and the noncontrolling interests held by others in certain subsidiaries of the FSG and ETG. Net income attributable to noncontrolling interests was $13.4 million in the first six months of fiscal 2020, as compared to $17.0 million in the first six months of fiscal 2019. The decrease in net income attributable to noncontrolling interests in the first six months of fiscal 2020 principally reflects the impact of a dividend paid by HEICO Aerospace in June 2019 that effectively resulted in the transfer of the 20% noncontrolling interest held by LHT in eight of our existing subsidiaries within HEICO Aerospace that are principally part of the FSG's repair and overhaul parts and services product line to HEICO Flight Support Corp., a wholly owned subsidiary of HEICO.

Net Income Attributable to HEICO

Net income attributable to HEICO increased to a record $197.3 million, or $1.44 per diluted share, in the first six months of fiscal 2020, up from $161.1 million, or $1.18 per diluted share, in the first six months of fiscal 2019 principally reflecting the previously mentioned income tax benefit, increased operating income and lower interest expense.

Comparison of Second Quarter of Fiscal 2020 to Second Quarter of Fiscal 2019

Net Sales

Our consolidated net sales in the second quarter of fiscal 2020 decreased by 9% to $468.1 million, as compared to net sales of $515.6 million in the second quarter of fiscal 2019. The decrease in consolidated net sales principally reflects a decrease of $56.3 million (an 18% decrease) to $252.0 million in net sales within the FSG partially offset by an increase of $4.5 million (a 2% increase) to $219.0 million in net sales within the ETG. The net sales decrease in the FSG is principally organic and reflects lower demand for the majority of our products and services resulting from the significant decline in global commercial air travel beginning in March 2020 due to the Outbreak. As a result, net sales of our aftermarket replacement parts, repair and overhaul parts and services, and specialty products product lines decreased by $26.0 million, $20.8 million, and $9.5 million, respectively. The net sales increase in the ETG reflects net sales of $13.3 million contributed by our fiscal 2019 and 2020 acquisitions, partially offset by an

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organic net sales decrease of 2%. The ETG's decrease in organic net sales is mainly attributable to lower shipments of our space products resulting in a net sales decrease of $7.3 million partially offset by increased demand for our defense products resulting in a net sales increase of $2.7 million. Sales price changes were not a significant contributing factor to the change in net sales of the FSG and ETG in the second quarter of fiscal 2020.

Gross Profit and Operating Expenses

Our consolidated gross profit margin decreased to 38.2% in the second quarter of fiscal 2020, as compared to 40.6% in the second quarter of fiscal 2019, principally reflecting a decrease of 3.5% and 2.7% in the FSG's and ETG's gross profit margin, respectively. The decrease in the FSG's gross profit margin principally reflects a decrease in net sales and a less favorable product mix within our repair and overhaul parts and services and aftermarket replacement parts product lines. The decrease in the ETG's gross profit margin principally reflects a decrease in net sales and less favorable product mix of certain space and commercial aerospace products partially offset by increased net sales of certain defense products. Total new product research and development expenses included within our consolidated cost of sales were $16.8 million in both the second quarter of fiscal 2020 and 2019.

Our consolidated SG&A expenses decreased by 22% to $70.7 million in the second quarter of fiscal 2020, as compared to $90.2 million in the second quarter of fiscal 2019. The decrease in consolidated SG&A expenses principally reflects an $18.2 million decrease in performance-based compensation expense and a $3.7 million reduction in other selling expenses including outside sales commissions, marketing and travel, partially offset by $3.3 million attributable to the fiscal 2019 and 2020 acquisitions.

        Our consolidated SG&A expenses as a percentage of net sales decreased to 15.1% in the second quarter of fiscal 2020, down from 17.5% in the second quarter of fiscal 2019. The decrease in consolidated SG&A expenses as a percentage of net sales is mainly due to a 3.5% impact from the previously mentioned lower performance-based compensation expense partially offset by some inefficiencies resulting from the overall impacts of the Outbreak.

Operating Income

        Our consolidated operating income decreased by 9% to $108.2 million in the second quarter of fiscal 2020, as compared to operating income of $119.2 million in the second quarter of fiscal 2019. The decrease in consolidated operating income principally reflects a $14.6 million decrease (a 24% decrease) to $47.5 million in operating income of the FSG and a $1.8 million decrease (a 3% decrease) to $65.5 million in operating income of the ETG. The decrease in operating income of the FSG principally reflects the previously mentioned decrease in net sales and lower gross profit margin, partially offset by an $11.5 million decrease in performance-based compensation expense. The decrease in operating income of the ETG principally reflects the previously mentioned lower gross profit margin partially offset by a $4.0 million decrease in performance-based compensation expense and the previously mentioned increase in net sales.

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Further, the decreases in operating income of the FSG and ETG were partially moderated by lower corporate expenses of $4.1 million mainly attributable to a decrease in performance-based compensation expense.

Our consolidated operating income as a percentage of net sales was 23.1% in both the second quarter of fiscal 2020 and 2019 principally reflecting a 1.5% and 1.3% decrease in the ETG's and FSG's operating income as a percentage of net sales, respectively, offset by the previously mentioned lower corporate expenses. The decrease in the ETG's operating income as a percentage of net sales to 29.9% in the second quarter of fiscal 2020 from 31.4% in the second quarter of fiscal 2019 principally reflects the previously mentioned lower gross profit margin partially offset by a 1.2% decrease in SG&A expenses as a percentage of net sales mainly reflecting lower performance-based compensation expense. The decrease in the FSG's operating income as a percentage of net sales to 18.9% in the second quarter of fiscal 2020 from 20.2% in the second quarter of fiscal 2019 principally reflects the previously mentioned lower gross profit margin partially offset by a 2.2% decrease in SG&A expenses as a percentage of net sales mainly from lower performance-based compensation expense partially offset by some inefficiencies resulting from the overall impacts of the Outbreak.

Interest Expense

Interest expense decreased to $3.8 million in the second quarter of fiscal 2020, down from $5.5 million in the second quarter of fiscal 2019. The decrease was principally due to a lower weighted average interest rate on borrowings outstanding under our revolving credit facility.

Other Income

Other income in the second quarter of fiscal 2020 and 2019 was not material.

Income Tax Expense

        Our effective tax rate in the second quarter of fiscal 2020 was 22.6%, as compared to 22.5% in the second quarter of fiscal 2019.

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests relates to the 20% noncontrolling interest held by LHT in HEICO Aerospace and the noncontrolling interests held by others in certain subsidiaries of the FSG and ETG. Net income attributable to noncontrolling interests was $5.5 million in the second quarter of fiscal 2020, as compared to $8.3 million in the second quarter of fiscal 2019. The decrease in net income attributable to noncontrolling interests in the second quarter of fiscal 2020 principally reflects the impact of a dividend paid by HEICO Aerospace in June 2019 that effectively resulted in the transfer of the 20% noncontrolling interest held by LHT in eight of our existing subsidiaries within HEICO Aerospace that are

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principally part of the FSG's repair and overhaul parts and services product line to HEICO Flight Support Corp., a wholly owned subsidiary of HEICO.

Net Income Attributable to HEICO

Net income attributable to HEICO was $75.5 million, or $.55 per diluted share, in the second quarter of fiscal 2020, as compared to $81.8 million, or $.60 per diluted share, in the second quarter of fiscal 2019 principally reflecting the previously mentioned lower operating income, partially offset by less net income attributable to noncontrolling interests and lower interest expense.

Outlook

In our Quarterly Report on Form 10-Q for the three months ended January 31, 2020, we provided net sales and net income estimates for fiscal 2020, but noted that it excluded any impact from the coronavirus outbreak as it was at such an early stage. As noted within our Form 8-K, filed on April 15, 2020, we withdrew our fiscal 2020 financial guidance due to the COVID-19 outbreak, classified by the World Health Organization as a global pandemic in March 2020 (the “Outbreak”). The Outbreak has resulted in a significant reduction in global demand for commercial air travel beginning in March 2020. As such, the results of operations for the six and three months ended April 30, 2020 are not indicative of the results to be expected for the full fiscal 2020 year.

We entered the Outbreak with a healthy balance sheet that included a strong cash position and nominal debt. We cannot estimate the duration and magnitude of the Outbreak and cannot confidently predict when demand for our commercial aerospace products will return to pre-Outbreak levels. However, we believe HEICO is favorably positioned for long-term success despite the short-term challenges created by the Outbreak in the global economy.

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Liquidity and Capital Resources

Our principal uses of cash include acquisitions, capital expenditures, cash dividends, distributions to noncontrolling interests and working capital needs. At the onset of the Outbreak, we borrowed $200.0 million on our revolving credit facility as a precautionary measure to ensure we have additional cash on hand to pay our employees and vendors and for potential acquisition opportunities. As a result of this borrowing and through net cash provided by operating activities, our cash and cash equivalents increased to $346.8 million as of April 30, 2020, up from $57.0 million as of October 31, 2019. We finance our business activities primarily from our operating and financing activities, including borrowings under our revolving credit facility. The revolving credit facility contains both financial and non-financial covenants. As of April 30, 2020, we were in compliance with all such covenants and our total debt to shareholders’ equity ratio was 39.2%.

Based on our current outlook, we believe that our net cash provided by operating activities, available borrowings under our revolving credit facility and cash and cash equivalents on hand will be sufficient to fund cash requirements for at least the next twelve months.

Operating Activities

Net cash provided by operating activities was $205.9 million in the first six months of fiscal 2020 and consisted primarily of net income from consolidated operations of $210.7 million, depreciation and amortization expense of $43.3 million (a non-cash item), net changes in other long-term liabilities and assets related to the HEICO Leadership Compensation Plan of $14.0 million (principally participant deferrals and employer contributions), $5.3 million in share-based compensation expense (a non-cash item), and $4.8 million in employer contributions to the HEICO Savings and Investment Plan (a non-cash item), partially offset by a $69.0 million increase in working capital and a $5.1 million deferred income tax benefit. The increase in working capital is inclusive of a $47.7 million decrease in accrued expenses and other current liabilities mainly reflecting the payment of fiscal 2019 accrued performance-based compensation; a $37.8 million increase in inventories as a result of certain inventory purchase commitments based on pre-Outbreak net sales expectations and to support the backlog of certain of our businesses; a $15.6 million increase in prepaid expenses and other current assets due to the timing of income tax payments; and a $13.0 million increase in contract assets, partially offset by a $44.4 million decrease in accounts receivable resulting from strong cash collections and lower net sales.

Net cash provided by operating activities increased by $27.6 million in the first six months of fiscal 2020, up from $178.3 million in the first six months of fiscal 2019. The increase is principally attributable to a $32.6 million increase in net income from consolidated operations partially offset by a $6.8 million increase in net working capital.

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Investing Activities

Net cash used in investing activities totaled $70.9 million in the first six months of fiscal 2020 and related primarily to acquisitions of $45.3 million (net of cash acquired), investments related to the HEICO LCP of $13.6 million and capital expenditures of $12.4 million. Further details regarding our fiscal 2020 acquisitions may be found in Note 2, Acquisitions, of the Notes to Condensed Consolidated Financial Statements.

Financing Activities

Net cash provided by financing activities in the first six months of fiscal 2020 totaled $155.6 million. During the first six months of fiscal 2020, we borrowed $200.0 million under our revolving credit facility to provide a cushion of liquidity during this period of economic uncertainty resulting from the Outbreak and $45.0 million to fund our fiscal 2020 acquisitions. Additionally, we made $68.0 million in payments on our revolving credit facility, paid $10.8 million in cash dividends on our common stock, and made $9.7 million of distributions to noncontrolling interests.

Contractual Obligations

There have not been any material changes to the amounts presented in the table of contractual obligations that was included in our Annual Report on Form 10-K for the year ended October 31, 2019.

Off-Balance Sheet Arrangements

Guarantees

As of April 30, 2020, we have arranged for standby letters of credit aggregating $4.8 million, which are supported by our revolving credit facility and pertain to payment guarantees related to potential workers' compensation claims and a facility lease as well as performance guarantees related to customer contracts entered into by certain of our subsidiaries.

New Accounting Pronouncements

        See Note 1, Summary of Significant Accounting Policies - New Accounting Pronouncements, of the Notes to Condensed Consolidated Financial Statements for additional information.

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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 “anticipate,” “believe,” “expect,” “estimate” and similar expressions are generally intended to identify forward-looking statements. Any forward-looking statement 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 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 in or implied by those forward-looking statements. Factors that could cause such differences include: the severity, magnitude and duration of the Outbreak; our liquidity and the amount and timing of cash generation; the continued decline in commercial air travel caused by the Outbreak, airline fleet changes or airline purchasing decisions, which could cause lower demand for our goods and services; product specification costs and requirements, which could cause an increase to our costs to complete contracts; 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; our ability to introduce new products and services at profitable pricing levels, which could reduce our sales or sales growth; product development or manufacturing difficulties, which could increase our product development and manufacturing costs and delay sales; our ability to make acquisitions and achieve operating synergies from acquired businesses; customer credit risk; interest, foreign currency exchange and income tax rates; economic conditions within and outside of the aviation, defense, space, medical, telecommunications and electronics industries, which could negatively impact our costs and revenues; and defense spending or budget cuts, which could reduce our defense-related revenue. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have not been any material changes in our assessment of HEICO’s sensitivity to market risk that was disclosed in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the year ended October 31, 2019.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this quarterly report. Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that HEICO’s disclosure controls and procedures are effective as of the end of the period covered by this quarterly report.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the second quarter ended April 30, 2020 that have materially affected, or are reasonably likely to materially affect, HEICO's internal control over financial reporting

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PART II. OTHER INFORMATION

Item 1A. RISK FACTORS

The following supplements the risk factors described in Item 1A., "Risk Factors" of the Company’s Annual Report on Form 10-K for the year ended October 31, 2019.

The Company is subject to risks arising from the recent COVID-19 outbreak (the "Outbreak").

The recent Outbreak has spread across the globe and is impacting worldwide economic activity. A pandemic, including COVID-19 or other public health epidemic, poses the risk that HEICO or its employees, customers, suppliers, manufacturers and other commercial partners may be prevented from conducting business activities for an indefinite period of time, including due to the spread of the disease or shutdowns requested or mandated by governmental authorities. While it is not possible at this time to estimate the full impact that the Outbreak could have on HEICO's business, the continued spread of COVID-19 could disrupt its customers' businesses, supply chain and the manufacture or shipment of its products, and its other activities, which could have a material adverse effect on its business, financial condition and results of operations.

Item 6. EXHIBITS

Exhibit	Description
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. **
101.INS	Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document. *
101.SCH	Inline XBRL Taxonomy Extension Schema Document. *
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document. *
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document. *
101.LAB	Inline XBRL Taxonomy Extension Labels Linkbase Document. *
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document. *
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). *

* Filed herewith.

** Furnished herewith.

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SIGNATURES

Pursuant to the requirements 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:	May 28, 2020	By:	/s/ CARLOS L. MACAU, JR.
			Carlos L. Macau, Jr. Executive Vice President - Chief Financial Officer and Treasurer (Principal Financial Officer)
		By:	/s/ STEVEN M. WALKER
			Steven M. Walker Chief Accounting Officer and Assistant Treasurer (Principal Accounting Officer)

40

EX-31.1

Exhibit 31.1

RULE 13a-14(a)/15d-14(a) CERTIFICATION

I, Laurans A. Mendelson, certify that:

(1)I have reviewed this Quarterly Report on Form 10-Q of HEICO Corporation;

(2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4)The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5)The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 28, 2020	/s/ LAURANS A. MENDELSON
		Laurans A. Mendelson
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

RULE 13a-14(a)/15d-14(a) CERTIFICATION

I, Carlos L. Macau, Jr., certify that:

(1)I have reviewed this Quarterly Report on Form 10-Q of HEICO Corporation;

(2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4)The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5)The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 28, 2020	/s/ CARLOS L. MACAU, JR.
		Carlos L. Macau, Jr.
		Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

SECTION 1350 CERTIFICATION

In connection with the Quarterly Report of HEICO Corporation (the “Company”) on Form 10-Q for the period ended April 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Laurans A. Mendelson, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 28, 2020	/s/ LAURANS A. MENDELSON
		Laurans A. Mendelson
		Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

Exhibit 32.2

SECTION 1350 CERTIFICATION

In connection with the Quarterly Report of HEICO Corporation (the “Company”) on Form 10-Q for the period ended April 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Carlos L. Macau, Jr., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 28, 2020	/s/ CARLOS L. MACAU, JR.
		Carlos L. Macau, Jr.
		Chief Financial Officer
		(Principal Financial Officer)

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

6 Months Ended

Apr. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill [Table Text Block]

Changes in the carrying amount of goodwill by operating segment for the six months ended April 30, 2020 are as follows (in thousands):

	Segment		Consolidated Totals
	FSG	ETG
Balances as of October 31, 2019	$410,044	$858,659	$1,268,703
Goodwill acquired	—	34,173	34,173
Foreign currency translation adjustments	(569)	(1,835)	(2,404)
Adjustments to goodwill	—	(285)	(285)
Balances as of April 30, 2020	$409,475	$890,712	$1,300,187

Schedule Of Identifiable Intangible Assets [Table Text Block]

Identifiable intangible assets consist of the following (in thousands):

	As of April 30, 2020			As of October 31, 2019
	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount
Amortizing Assets:
Customer relationships	$417,412	($178,510)	$238,902	$411,076	($162,722)	$248,354
Intellectual property	220,372	(76,021)	144,351	216,359	(70,169)	146,190
Licenses	6,559	(4,387)	2,172	6,559	(4,102)	2,457
Patents	996	(691)	305	986	(666)	320
Non-compete agreements	805	(805)	—	813	(813)	—
Trade names	450	(199)	251	450	(180)	270
	646,594	(260,613)	385,981	636,243	(238,652)	397,591
Non-Amortizing Assets:
Trade names	154,642	—	154,642	153,102	—	153,102
	$801,236	($260,613)	$540,623	$789,345	($238,652)	$550,693

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LEASES (Tables)

6 Months Ended

Apr. 30, 2020

Leases [Abstract]

Lessee, Operating Lease Asset and Liabilities [Table Text Block]

The following table presents the Company’s operating lease ROU assets and lease liabilities as of April 30, 2020 (in thousands):

	April 30, 2020
Right-of-use assets	$60,056
Current lease liabilities	$13,365
Long-term lease liabilities	47,570
Total operating lease liabilities	$60,935

Lease, Cost [Table Text Block]

The following table presents the components of operating lease expense for the six and three months ended April 30, 2020 (in thousands): 

	Six months ended	Three months ended
	April 30, 2020	April 30, 2020
Operating lease expense	$8,544	$4,284
Variable lease expense	1,323	708
Total operating lease expense (1)	$9,867	$4,992

⁽¹⁾ Excludes short-term lease expense, which is not material.

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

The following table presents a maturity analysis of the Company's operating lease liabilities as of April 30, 2020 for the remainder of fiscal 2020 and the next five fiscal years and thereafter (in thousands):

Year ending October 31,
2020	$7,762
2021	16,101
2022	14,192
2023	8,834
2024	5,006
2025	4,136
Thereafter	18,004
Total minimum lease payments	74,035
Less: amount representing interest	(13,100)
Present value of minimum lease payments	$60,935

Lessee, Operating Lease Term and Discount Rate [Table Text Block]

The following table presents the weighted average remaining lease term and discount rate of the Company’s operating leases as of April 30, 2020:

	April 30, 2020
Weighted average remaining lease term (years)	7
Weighted average discount rate	5.2%

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

The following table presents supplemental disclosures of cash flow information associated with the Company's operating leases for the six months ended April 30, 2020 (in thousands):

	Six months ended
	April 30, 2020
Cash paid for amounts included in the measurement of lease liabilities	$8,448
Right-of-use assets obtained in exchange for new lease liabilities	6,824

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OPERATING SEGMENTS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Apr. 30, 2020	Apr. 30, 2019	Apr. 30, 2020	Apr. 30, 2019
Segment Reporting Information [Line Items]
Revenues	$ 468,146	$ 515,648	$ 974,421	$ 981,794
Depreciation	6,765	6,444	13,565	12,656
Amortization	14,928	14,067	29,711	27,892
Operating Income (Loss)	108,161	119,183	219,151	217,130
Capital expenditures	5,585	6,689	12,435	12,596
Corporate And Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues	(2,773)	(7,054)	(5,976)	(12,550)
Depreciation	256	252	511	503
Amortization	246	246	492	492
Operating Income (Loss)	(4,896)	(10,335)	(13,442)	(16,870)
Capital expenditures	0	8	5	8
Flight Support Group [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenues	251,964	308,251	553,031	595,464
Depreciation	3,628	3,403	7,245	6,758
Amortization	4,752	4,920	9,611	9,723
Operating Income (Loss)	47,531	62,166	109,576	115,046
Capital expenditures	2,647	3,727	6,765	6,576
Electronic Technologies Group [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Revenues	218,955	214,451	427,366	398,880
Depreciation	2,881	2,789	5,809	5,395
Amortization	9,930	8,901	19,608	17,677
Operating Income (Loss)	65,526	67,352	123,017	118,954
Capital expenditures	$ 2,938	$ 2,954	$ 5,665	$ 6,012

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REVENUE (Disaggregation of Revenue, by Product Line) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Apr. 30, 2020	Apr. 30, 2019	Apr. 30, 2020	Apr. 30, 2019
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		$ 468,146	$ 515,648	$ 974,421	$ 981,794
Flight Support Group [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		251,964	308,251	553,031	595,464
Flight Support Group [Member] | Aftermarket Replacement Parts [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	[1]	141,192	167,225	309,459	326,722
Flight Support Group [Member] | Repair and Overhaul Parts and Services [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	[2]	52,629	73,454	121,916	140,617
Flight Support Group [Member] | Specialty Products [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	[3]	58,143	67,572	121,656	128,125
Electronic Technologies Group [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		218,955	214,451	427,366	398,880
Electronic Technologies Group [Member] | Electronic Components for Defense, Space and Aerospace [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	[4]	168,962	161,664	329,675	299,414
Electronic Technologies Group [Member] | Other Electronic Components [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	[5]	49,993	52,787	97,691	99,466
Corporate And Eliminations [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		$ (2,773)	$ (7,054)	$ (5,976)	$ (12,550)

[1] Includes various jet engine and aircraft component replacement parts.

[2] Includes primarily the sale of parts consumed in various repair and overhaul services on selected jet engine and aircraft components, avionics, instruments, composites and flight surfaces of commercial and military aircraft.

[3] Includes primarily the sale of specialty components such as thermal insulation blankets, renewable/reusable insulation systems, advanced niche components, complex composite assemblies, and expanded foil mesh.

[4] Includes various component parts such as electro-optical infrared simulation and test equipment, electro-optical laser products, electro-optical, microwave and other power equipment, high-speed interface products, power conversion products, underwater locator beacons, emergency locator transmission beacons, traveling wave tube amplifiers, microwave power modules, three-dimensional microelectronic and stacked memory products, crashworthy and ballistically self-sealing auxiliary fuel systems, radio frequency (RF) and microwave amplifiers, transmitters and receivers, high performance communications and electronic intercept receivers and tuners, high performance active antenna systems, and technical surveillance countermeasures equipment.

[5] Includes various component parts such as electromagnetic and radio interference shielding, high voltage interconnection devices, high voltage advanced power electronics, harsh environment connectivity products, custom molded cable assemblies and silicone material for a variety of demanding applications.

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GOODWILL AND OTHER INTANGIBLE ASSETS (Details Textuals) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2020	Apr. 30, 2019	Apr. 30, 2020	Apr. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Business Acquisition, Goodwill, Expected Tax Deductible Amount	$ 9.0		$ 9.0
Amortization expense related to intangible assets	13.9	$ 13.1	27.6	$ 25.9
Estimated Amortization Expense, remainder of fiscal year	27.5		27.5
Estimated Amortization Expense, for fiscal 2021	52.4		52.4
Estimated Amortization Expense, for fiscal 2022	45.8		45.8
Estimated Amortization Expense, for fiscal 2023	40.6		40.6
Estimated Amortization Expense, for fiscal 2024	36.1		36.1
Estimated Amortization Expense, for fiscal 2025	32.2		32.2
Estimated Amortization Expense, thereafter	$ 151.4		$ 151.4

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CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED - USD ($) $ in Thousands	Apr. 30, 2020	Oct. 31, 2019
Current assets:
Cash and cash equivalents	$ 346,786	$ 57,001
Accounts receivable, net	230,884	274,326
Contract assets	56,033	43,132
Inventories, net	457,819	420,319
Prepaid expenses and other current assets	33,991	18,953
Total current assets	1,125,513	813,731
Property, plant and equipment, net	171,399	173,345
Goodwill	1,300,187	1,268,703
Intangible assets, net	540,623	550,693
Other assets	227,113	162,739
Total assets	3,364,835	2,969,211
Current liabilities:
Current maturities of long-term debt	1,025	906
Trade accounts payable	108,397	106,225
Accrued expenses and other current liabilities	145,345	178,957
Income taxes payable	1,586	3,050
Total current liabilities	256,353	289,138
Long-term debt, net of current maturities	739,188	561,049
Deferred income taxes	49,749	51,496
Other long-term liabilities	233,518	184,604
Total liabilities	1,278,808	1,086,287
Commitments and contingencies
Redeemable noncontrolling interests	196,507	188,264
Shareholders' equity:
Preferred Stock, $.01 par value per share; 10,000 shares authorized; none issued	0	0
Common Stock	542	541
Capital in excess of par value	297,324	284,609
Deferred compensation obligation	4,232	4,232
HEICO stock held by irrevocable trust	(4,232)	(4,232)
Accumulated other comprehensive loss	(23,804)	(16,739)
Retained earnings	1,583,646	1,397,327
Total HEICO shareholders' equity	1,858,514	1,666,542
Noncontrolling interests	31,006	28,118
Total shareholders' equity	1,889,520	1,694,660
Total liabilities and equity	3,364,835	2,969,211
Class A Common Stock [Member]
Shareholders' equity:
Common Stock	$ 806	$ 804

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CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME - UNAUDITED - USD ($) $ in Thousands	Total	Redeemable Noncontrolling Interests [Member]	Redeemable Noncontrolling Interests [Member] Cumulative Effect, Period of Adoption, Adjustment	Common Stock [Member]	Common Stock [Member] Class A Common Stock [Member]	Capital In Excess Of Par Value [Member]	Deferred Compensation Obligation [Member]	HEICO Stock Held By Irrevocable Trust [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Retained Earnings [Member] Cumulative Effect, Period of Adoption, Adjustment	Noncontrolling Interest [Member]	Noncontrolling Interest [Member] Cumulative Effect, Period of Adoption, Adjustment	Total Shareholders Equity [Member]	Total Shareholders Equity [Member] Cumulative Effect, Period of Adoption, Adjustment
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest				$ 534	$ 796	$ 320,994	$ 3,928	$ (3,928)	$ (15,256)	$ 1,091,183		$ 104,757		$ 1,503,008
Beginning Balance at Oct. 31, 2018				534	796	320,994	3,928	(3,928)	(15,256)	1,091,183		104,757		1,503,008
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest				538	800	310,201	4,043	(4,043)	(16,352)	1,251,699		115,278		1,662,164
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | Accounting Standards Update 2014-09 [Member]											$ 13,373		$ 326		$ 13,699
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	$ 160,018								(1,096)	161,114
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest	16,841	$ 8,224										8,617
Comprehensive income	176,859													168,635
Cash dividends										(9,305)				(9,305)
Issuance of common stock to Savings and Investment Plan						6,390								6,390
Share-based compensation expense						4,987								4,987
Proceeds from stock option exercises				7	4									5,528
Proceeds from stock option exercises, Adjustment to Additional Paid in Capital						5,517
Stock Redeemed or Called During Period, Value				(3)		(27,741)								(27,744)
Noncontrolling Interest, Increase from Business Combination		13,079										2,382		2,382
Distributions to noncontrolling interests		(7,384)										(806)		(806)
Adjustments to redemption amount of redeemable noncontrolling interests		4,666								(4,666)				(4,666)
Deferred compensation obligation							(115)
Stock Issued During Period Value Deferred Compensation Obligation								115
Stockholders' Equity, Other												2		56
Adjustments to Additional Paid in Capital, Other						54
Ending Balance at Apr. 30, 2019				538	800	310,201	4,043	(4,043)	(16,352)	1,251,699		115,278		1,662,164
Ending Balance (Accounting Standards Update 2014-09 [Member]) at Apr. 30, 2019											13,373		326		13,699
Starting Balance, Redeemable Noncontrolling Interests at Oct. 31, 2018		132,046
Increase (Decrease) in Temporary Equity [Roll Forward]
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest	16,841	8,224										8,617
Noncontrolling Interest, Increase from Business Combination		13,079										2,382		2,382
Distributions to noncontrolling interests		(7,384)										(806)		(806)
Adjustments to redemption amount of redeemable noncontrolling interests		4,666								(4,666)				(4,666)
Ending Balance, Redeemable Noncontrolling Interests at Apr. 30, 2019		151,450
Ending Balance, Redeemable Noncontrolling Interests (Accounting Standards Update 2014-09 [Member]) at Apr. 30, 2019			$ 819
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest				534	796	324,395	4,043	(4,043)	(11,069)	1,174,811		112,288		1,601,755
Beginning Balance at Jan. 31, 2019				534	796	324,395	4,043	(4,043)	(11,069)	1,174,811		112,288		1,601,755
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest				538	796	310,201	4,043	(4,043)	(11,069)	1,251,699		112,288		1,601,755
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | Accounting Standards Update 2014-09 [Member]											13,373		326		13,699
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	76,499								(5,283)	81,782
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest	7,954	4,585										3,369
Comprehensive income	84,453													79,868
Issuance of common stock to Savings and Investment Plan						5,344								5,344
Share-based compensation expense						2,548								2,548
Proceeds from stock option exercises				7	4									5,462
Proceeds from stock option exercises, Adjustment to Additional Paid in Capital						5,451
Stock Redeemed or Called During Period, Value				(3)		(27,591)								(27,594)
Noncontrolling Interest, Increase from Business Combination		7,963										27		27
Distributions to noncontrolling interests		(4,987)										(408)		(408)
Adjustments to redemption amount of redeemable noncontrolling interests		4,894								(4,894)				(4,894)
Stockholders' Equity, Other												2		56
Adjustments to Additional Paid in Capital, Other						54
Ending Balance at Apr. 30, 2019				538	800	310,201	4,043	(4,043)	(16,352)	1,251,699		115,278		1,662,164
Ending Balance (Accounting Standards Update 2014-09 [Member]) at Apr. 30, 2019											13,373		326		13,699
Starting Balance, Redeemable Noncontrolling Interests at Jan. 31, 2019		138,995
Increase (Decrease) in Temporary Equity [Roll Forward]
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest	7,954	4,585										3,369
Noncontrolling Interest, Increase from Business Combination		7,963										27		27
Distributions to noncontrolling interests		(4,987)										(408)		(408)
Adjustments to redemption amount of redeemable noncontrolling interests		4,894								(4,894)				(4,894)
Ending Balance, Redeemable Noncontrolling Interests at Apr. 30, 2019		151,450
Ending Balance, Redeemable Noncontrolling Interests (Accounting Standards Update 2014-09 [Member]) at Apr. 30, 2019			$ 819
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest				538	800	310,201	4,043	(4,043)	(16,352)	1,251,699		115,278		1,662,164
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | Accounting Standards Update 2014-09 [Member]											$ 13,373		$ 326		$ 13,699
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	1,694,660			541	804	284,609	4,232	(4,232)	(16,739)	1,397,327		28,118		1,694,660
Beginning Balance at Oct. 31, 2019	1,694,660			541	804	284,609	4,232	(4,232)	(16,739)	1,397,327		28,118		1,694,660
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	1,694,660			542	806	297,324	4,232	(4,232)	(23,804)	1,583,646		31,006		1,889,520
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	190,276								(7,065)	197,341
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest	13,075	9,422										3,653
Comprehensive income	203,351													193,929
Cash dividends										(10,762)				(10,762)
Issuance of common stock to Savings and Investment Plan						7,281								7,281
Share-based compensation expense						5,275								5,275
Proceeds from stock option exercises					2									2,392
Proceeds from stock option exercises, Adjustment to Additional Paid in Capital						2,390
Stock Redeemed or Called During Period, Value						(2,567)								(2,567)
Noncontrolling Interest, Increase from Business Combination		7,538
Distributions to noncontrolling interests		(8,977)										(765)		(765)
Adjustments to redemption amount of redeemable noncontrolling interests		260								(260)				(260)
Stockholders' Equity, Other				1										337
Adjustments to Additional Paid in Capital, Other						336
Ending Balance at Apr. 30, 2020	1,889,520			542	806	297,324	4,232	(4,232)	(23,804)	1,583,646		31,006		1,889,520
Starting Balance, Redeemable Noncontrolling Interests at Oct. 31, 2019	188,264	188,264
Increase (Decrease) in Temporary Equity [Roll Forward]
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest	13,075	9,422										3,653
Noncontrolling Interest, Increase from Business Combination		7,538
Distributions to noncontrolling interests		(8,977)										(765)		(765)
Adjustments to redemption amount of redeemable noncontrolling interests		260								(260)				(260)
Ending Balance, Redeemable Noncontrolling Interests at Apr. 30, 2020	196,507	196,507
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest				541	805	287,779	4,232	(4,232)	(19,263)	1,508,784		30,601		1,809,247
Beginning Balance at Jan. 31, 2020				541	805	287,779	4,232	(4,232)	(19,263)	1,508,784		30,601		1,809,247
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	1,889,520			541	806	287,779	4,232	(4,232)	(23,804)	1,508,784		31,006		1,889,520
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	70,912								(4,541)	75,453
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest	5,291	4,655										636
Comprehensive income	76,203													71,548
Issuance of common stock to Savings and Investment Plan						5,983								5,983
Share-based compensation expense						2,629								2,629
Proceeds from stock option exercises					1									864
Proceeds from stock option exercises, Adjustment to Additional Paid in Capital						863
Stock Redeemed or Called During Period, Value						(5)								(5)
Noncontrolling Interest, Increase from Business Combination		(2)
Distributions to noncontrolling interests		(4,630)										(231)		(231)
Adjustments to redemption amount of redeemable noncontrolling interests		591								(591)				(591)
Stockholders' Equity, Other				1										76
Adjustments to Additional Paid in Capital, Other						75
Ending Balance at Apr. 30, 2020	1,889,520			542	806	297,324	4,232	(4,232)	(23,804)	1,583,646		31,006		1,889,520
Starting Balance, Redeemable Noncontrolling Interests at Jan. 31, 2020		195,893
Increase (Decrease) in Temporary Equity [Roll Forward]
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest	5,291	4,655										636
Noncontrolling Interest, Increase from Business Combination		(2)
Distributions to noncontrolling interests		(4,630)										(231)		(231)
Adjustments to redemption amount of redeemable noncontrolling interests		591								(591)				(591)
Ending Balance, Redeemable Noncontrolling Interests at Apr. 30, 2020	196,507	$ 196,507
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 1,889,520			$ 542	$ 806	$ 297,324	$ 4,232	$ (4,232)	$ (23,804)	$ 1,583,646		$ 31,006		$ 1,889,520

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FAIR VALUE MEASUREMENTS (Details Textuals) - USD ($) $ in Thousands	Apr. 30, 2020	Oct. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total liabilities	$ 18,993	$ 18,326
Flight Support Group [Member] | FY2019 Acquisition [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High	6,400
Total liabilities	1,200
Electronic Technologies Group [Member] | FY 2017 Acquisition [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High	20,000
Total liabilities	17,800
Aggregate LCP Liability [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Related liabilities of deferred compensation plans, specified as other long-term liabilities	$ 156,300	$ 151,100

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LEASES (Lease Term and Discount Rate) (Details)	Apr. 30, 2020
Leases [Abstract]
Weighted average remaining lease term	7 years
Weighted average discount rate	520.00%

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SELECTED FINANCIAL STATEMENT INFORMATION SELECTED FINANCIAL STATEMENT INFORMATION (Research and Development Expenses) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Apr. 30, 2020	Apr. 30, 2019	Apr. 30, 2020	Apr. 30, 2019
Selected Financial Statement Information (Details) [Abstract]
R&D expenses	$ 16,752	$ 16,849	$ 33,855	$ 32,049

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ACQUISITIONS (Details Textuals)	3 Months Ended
	Apr. 30, 2020
Electronic Technologies Group [Member] | HMI [Member]
Business Acquisition [Line Items]
Description of Acquired Entity	HMI designs, manufactures, and repairs flight deck annunciators, panels, indicators, and illuminated keyboards, as well as lighting controls, and flight deck lighting.
Business Acquisition, Percentage of Voting Interests Acquired	100.00%
Electronic Technologies Group [Member] | Quell [Member]
Business Acquisition [Line Items]
Name of Acquired Entity	Quell Corporation
Description of Acquired Entity	Quell designs and manufactures electromagnetic interference (EMI)/radio-frequency interference (RFI) and transient protection solutions for a wide variety of connectors that principally serve customers within the aerospace and defense markets.
Business Acquisition, Percentage of Voting Interests Acquired	80.10%
Existing Management [Member] | Quell [Member]
Business Acquisition [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners	19.90%

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OPERATING SEGMENTS

6 Months Ended

Apr. 30, 2020

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

OPERATING SEGMENTS

Information on the Company’s two operating segments, the FSG and the ETG, for the six and three months ended April 30, 2020 and 2019, respectively, is as follows (in thousands):

			Other, Primarily Corporate and Intersegment (1)	Consolidated Totals
	Segment
	FSG	ETG
Six months ended April 30, 2020:
Net sales	$553,031	$427,366	($5,976)	$974,421
Depreciation	7,245	5,809	511	13,565
Amortization	9,611	19,608	492	29,711
Operating income	109,576	123,017	(13,442)	219,151
Capital expenditures	6,765	5,665	5	12,435
Six months ended April 30, 2019:
Net sales	$595,464	$398,880	($12,550)	$981,794
Depreciation	6,758	5,395	503	12,656
Amortization	9,723	17,677	492	27,892
Operating income	115,046	118,954	(16,870)	217,130
Capital expenditures	6,576	6,012	8	12,596
Three months ended April 30, 2020:
Net sales	$251,964	$218,955	($2,773)	$468,146
Depreciation	3,628	2,881	256	6,765
Amortization	4,752	9,930	246	14,928
Operating income	47,531	65,526	(4,896)	108,161
Capital expenditures	2,647	2,938	—	5,585
Three months ended April 30, 2019:
Net sales	$308,251	$214,451	($7,054)	$515,648
Depreciation	3,403	2,789	252	6,444
Amortization	4,920	8,901	246	14,067
Operating income	62,166	67,352	(10,335)	119,183
Capital expenditures	3,727	2,954	8	6,689

⁽¹⁾ Intersegment activity principally consists of net sales from the ETG to the FSG.

Total assets by operating segment are as follows (in thousands):

			Other, Primarily Corporate	Consolidated Totals
	Segment
	FSG	ETG
Total assets as of April 30, 2020	$1,201,852	$1,827,060	$335,923	$3,364,835
Total assets as of October 31, 2019	1,149,737	1,643,032	176,442	2,969,211

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SELECTED FINANCIAL STATEMENT INFORMATION

6 Months Ended

Apr. 30, 2020

Selected Financial Statement Information [Abstract]

Selected Financial Statement Information [Text Block]

SELECTED FINANCIAL STATEMENT INFORMATION

Accounts Receivable

(in thousands)	April 30, 2020	October 31, 2019
Accounts receivable	$235,154	$277,992
Less: Allowance for doubtful accounts	(4,270)	(3,666)
Accounts receivable, net	$230,884	$274,326

Inventories

(in thousands)	April 30, 2020	October 31, 2019
Finished products	$221,338	$199,880
Work in process	40,629	32,548
Materials, parts, assemblies and supplies	195,852	187,891
Inventories, net of valuation reserves	$457,819	$420,319

Property, Plant and Equipment

(in thousands)	April 30, 2020	October 31, 2019
Land	$6,817	$6,820
Buildings and improvements	118,933	116,997
Machinery, equipment and tooling	260,153	253,127
Construction in progress	10,380	8,382
	396,283	385,326
Less: Accumulated depreciation and amortization	(224,884)	(211,981)
Property, plant and equipment, net	$171,399	$173,345

Accrued Customer Rebates and Credits

The aggregate amount of accrued customer rebates and credits included within accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheets was $18.0 million as of April 30, 2020 and October 31, 2019. The total customer rebates and credits deducted within net sales for the six months ended April 30, 2020 and 2019 was $3.8 million and $3.6 million, respectively. The total customer rebates and credits deducted within net sales for the three months ended April 30, 2020 and 2019 was $1.7 million and $2.2 million, respectively.

Research and Development Expenses

The amount of new product research and development ("R&D") expenses included in cost of sales for the six and three months ended April 30, 2020 and 2019 is as follows (in thousands):

	Six months ended April 30,		Three months ended April 30,
	2020	2019	2020	2019
R&D expenses	$33,855	$32,049	$16,752	$16,849

Redeemable Noncontrolling Interests

The holders of equity interests in certain of the Company's subsidiaries have rights ("Put Rights") that may be exercised on varying dates causing the Company to purchase their equity interests through fiscal 2029. The Put Rights, all of which relate either to common shares or membership interests in limited liability companies, provide that the cash consideration to be paid for their equity interests (the "Redemption Amount") be at fair value or a formula that management intended to reasonably approximate fair value based solely on a multiple of future earnings over a measurement period. Management's estimate of the aggregate Redemption Amount of all Put Rights that the Company could be required to pay is as follows (in thousands):

	April 30, 2020	October 31, 2019
Redeemable at fair value	$144,854	$136,611
Redeemable based on a multiple of future earnings	51,653	51,653
Redeemable noncontrolling interests	$196,507	$188,264

As discussed in Note 2, Acquisitions, the Company, through HEICO Electronic, acquired 80.1% of the stock of Quell in December 2019. As part of the shareholders' agreement, the noncontrolling interest holders have the right to cause the Company to purchase their equity interests over a four-year period beginning in fiscal 2025, or sooner under certain conditions, and the Company has the right to purchase the same equity interests over the same period.

Accumulated Other Comprehensive Loss

Changes in the components of accumulated other comprehensive loss for the six months ended April 30, 2020 are as follows (in thousands):

	Foreign Currency Translation	Defined Benefit Pension Plan	Accumulated Other Comprehensive Loss
Balances as of October 31, 2019	($14,989)	($1,750)	($16,739)
Unrealized loss	(7,104)	—	(7,104)
Amortization of unrealized loss	—	39	39
Balances as of April 30, 2020	($22,093)	($1,711)	($23,804)

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INCOME TAXES

6 Months Ended

Apr. 30, 2020

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

INCOME TAXES

        The Company's effective tax rate in the first six months of fiscal 2020 was .3%, as compared to 14.5% in the first six months of fiscal 2019. The Company recognized a discrete tax benefit from stock option exercises in both the first quarter of fiscal 2020 and 2019 of $47.6 million and $16.6 million, respectively. The $31.0 million larger benefit from stock option exercises recognized in the first quarter of fiscal 2020 was the result of more stock options exercised and the strong appreciation in HEICO's stock price during the optionees' holding periods.

        The Company's effective tax rate in the second quarter of fiscal 2020 was 22.6%, as compared to 22.5% in the second quarter of fiscal 2019.

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CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED [PARENTHETICAL] - $ / shares shares in Thousands	Apr. 30, 2020	Oct. 31, 2019
Preferred Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	10,000	10,000
Preferred Stock, Shares Issued	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	150,000	150,000
Common stock, shares issued	54,182	54,143
Common stock, shares outstanding	54,182	54,143
Class A Common Stock [Member]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	150,000	150,000
Common stock, shares issued	80,555	80,353
Common stock, shares outstanding	80,555	80,353

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CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME - UNAUDITED [PARENTHETICAL] - $ / shares	3 Months Ended
	Apr. 30, 2020	Apr. 30, 2019
Cash dividends per share (in dollars per share)	$ 0.080	$ 0.070

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FAIR VALUE MEASUREMENTS (Contingent Consideration Liability) (Details) - USD ($) $ in Thousands	6 Months Ended
	Apr. 30, 2020	Apr. 30, 2019
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Change in value of contingent consideration	$ 1,167	$ 3,104
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Opening balance, Liabilities	18,326
Change in accrued contingent consideration	1,167
Change in value of contingent consideration	(500)
Ending balance, Liabilities	$ 18,993

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LEASES (Future minimum lease payments) (Details) $ in Thousands	Apr. 30, 2020 USD ($)
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
Current fiscal year	$ 7,762
Next fiscal twelve months	16,101
Year Two	14,192
Year three	8,834
Year four	5,006
Year five	4,136
Thereafter	18,004
Total minimum lease payments	74,035
Less: amount representing interest	(13,100)
Present value of minimum lease payments	$ 60,935

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SELECTED FINANCIAL STATEMENT INFORMATION SELECTED FINANCIAL STATEMENT INFORMATION (Redeemable Noncontrolling Interests) (Details) - USD ($) $ in Thousands	Apr. 30, 2020	Oct. 31, 2019
Redeemable Noncontrolling Interest [Line Items]
Redeemable at fair value	$ 144,854	$ 136,611
Redeemable based on a multiple of future earnings	51,653	51,653
Redeemable noncontrolling interests	$ 196,507	$ 188,264

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SELECTED FINANCIAL STATEMENT INFORMATION (Accounts Receivable) (Details) - USD ($) $ in Thousands	Apr. 30, 2020	Oct. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable	$ 235,154	$ 277,992
Less: Allowance for doubtful accounts	(4,270)	(3,666)
Accounts receivable, net	$ 230,884	$ 274,326

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ACQUISITIONS

6 Months Ended

Apr. 30, 2020

Business Combinations [Abstract]

Acquisitions [Text Block]

ACQUISITIONS

In December 2019, the Company, through a subsidiary of HEICO Electronic, acquired 100% of the business and assets of the Human-Machine Interface ("HMI") product line of Spectralux Corporation. HMI designs, manufactures, and repairs flight deck annunciators, panels, indicators, and illuminated keyboards, as well as lighting controls, and flight deck lighting.

In December 2019, the Company, through HEICO Electronic, acquired 80.1% of the stock of Quell Corporation ("Quell"). Quell designs and manufactures electromagnetic interference (EMI)/radio-frequency interference (RFI) and transient protection solutions for a wide variety of connectors that principally serve customers within the aerospace and defense markets. The remaining 19.9% continues to be owned by certain members of Quell's management team (see Note 3, Selected Financial Statement Information - Redeemable Noncontrolling Interests, for additional information).

        The purchase price of each fiscal 2020 acquisition was paid in cash, principally using proceeds from the Company's revolving credit facility, and is not material or significant to the Company's condensed consolidated financial statements. The allocation of the total consideration for the fiscal 2020 acquisitions to the tangible and identifiable intangible assets acquired and liabilities and noncontrolling interests assumed is preliminary until the Company obtains final information regarding their fair values. However, the Company does not expect any adjustment to such allocations to be material to the Company's consolidated financial statements. The operating results of the fiscal 2020 acquisitions were included in the Company’s results of operations from each of the effective acquisition dates. The amount of net sales and earnings of the fiscal 2020 acquisitions included in the Condensed Consolidated Statement of Operations for the six and three months ended April 30, 2020 is not material. Had the fiscal 2020 acquisitions occurred as of November 1, 2018, net sales, net income from consolidated operations, net income attributable to HEICO, and basic and diluted net income per share attributable to HEICO shareholders on a pro forma basis for the six and three months ended April 30, 2020 and 2019 would not have been materially different than the reported amounts.

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REVENUE

6 Months Ended

Apr. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

REVENUE

Contract Balances

        Contract assets (unbilled receivables) represent revenue recognized on contracts using an over-time recognition model in excess of amounts invoiced to the customer. Contract liabilities (deferred revenue) represent customer advances and billings in excess of revenue recognized and are included within accrued expenses and other current liabilities in the Company’s Condensed Consolidated Balance Sheets. 

        Changes in the Company’s contract assets and liabilities for the six months ended April 30, 2020 are as follows (in thousands):

	April 30, 2020	October 31, 2019	Change
Contract assets	$56,033	$43,132	$12,901
Contract liabilities	26,928	23,809	3,119
Net contract assets	$29,105	$19,323	$9,782

        The increase in the Company's contract assets during the first six months of fiscal 2020 occurred within the ETG and principally reflects additional unbilled receivables on certain customer contracts using an over-time recognition model in excess of billings on certain customer contracts.

        The increase in the Company's contract liabilities during the first six months of fiscal 2020 mainly occurred within the FSG and principally reflects the receipt of new customer deposits on certain customer contracts in excess of reductions to contract liabilities from customer deposits recognized as revenue.

        The amount of revenue that the Company recognized during the six and three months ended April 30, 2020 that was included in contract liabilities as of the beginning of fiscal 2020 was $16.5 million and $3.1 million, respectively.

Remaining Performance Obligations

        As of April 30, 2020, the Company had $394.4 million of remaining performance obligations associated with contracts with an original duration of greater than one year pertaining to the majority of the products offered by the ETG and the FSG's specialty products and aftermarket replacement parts product lines. The Company will recognize net sales as these

obligations are satisfied. The Company expects to recognize $168.0 million of this amount during the remainder of fiscal 2020 and $226.4 million thereafter, of which the majority is expected to occur in fiscal 2021.

Contract Estimates

        Changes in estimates did not have a material effect on net income from consolidated operations for the six and three months ended April 30, 2020.

Disaggregation of Revenue

        The following table summarizes the Company’s net sales by product line for each operating segment (in thousands):

	Six months ended April 30,		Three months ended April 30,
	2020	2019	2020	2019
Flight Support Group:
Aftermarket replacement parts (1)	$309,459	$326,722	$141,192	$167,225
Repair and overhaul parts and services (2)	121,916	140,617	52,629	73,454
Specialty products (3)	121,656	128,125	58,143	67,572
Total net sales	553,031	595,464	251,964	308,251
Electronic Technologies Group:
Electronic component parts for defense, space and aerospace equipment (4)	329,675	299,414	168,962	161,664
Electronic component parts for equipment in various other industries (5)	97,691	99,466	49,993	52,787
Total net sales	427,366	398,880	218,955	214,451
Intersegment sales	(5,976)	(12,550)	(2,773)	(7,054)
Total consolidated net sales	$974,421	$981,794	$468,146	$515,648

⁽¹⁾ Includes various jet engine and aircraft component replacement parts.

⁽²⁾ Includes primarily the sale of parts consumed in various repair and overhaul services on selected jet engine and aircraft components, avionics, instruments, composites and flight surfaces of commercial and military aircraft.

⁽³⁾ Includes primarily the sale of specialty components such as thermal insulation blankets, renewable/reusable insulation systems, advanced niche components, complex composite assemblies, and expanded foil mesh.

⁽⁴⁾ Includes various component parts such as electro-optical infrared simulation and test equipment, electro-optical laser products, electro-optical, microwave and other power equipment, high-speed interface products, power conversion products, underwater locator beacons, emergency locator transmission beacons, traveling wave tube amplifiers, microwave power modules, three-dimensional

microelectronic and stacked memory products, crashworthy and ballistically self-sealing auxiliary fuel systems, radio frequency (RF) and microwave amplifiers, transmitters and receivers, high performance communications and electronic intercept receivers and tuners, high performance active antenna systems, and technical surveillance countermeasures equipment.

⁽⁵⁾ Includes various component parts such as electromagnetic and radio interference shielding, high voltage interconnection devices, high voltage advanced power electronics, harsh environment connectivity products, custom molded cable assemblies and silicone material for a variety of demanding applications.

        The following table summarizes the Company’s net sales by industry for each operating segment (in thousands):

	Six months ended April 30,		Three months ended April 30,
	2020	2019	2020	2019
Flight Support Group:
Aerospace	$428,578	$484,398	$188,655	$249,225
Defense and Space	104,395	87,503	54,142	45,969
Other (1)	20,058	23,563	9,167	13,057
Total net sales	553,031	595,464	251,964	308,251
Electronic Technologies Group:
Defense and Space	272,601	251,171	139,491	135,952
Other (2)	112,706	105,538	57,743	55,623
Aerospace	42,059	42,171	21,721	22,876
Total net sales	427,366	398,880	218,955	214,451
Intersegment sales	(5,976)	(12,550)	(2,773)	(7,054)
Total consolidated net sales	$974,421	$981,794	$468,146	$515,648

⁽¹⁾ Principally industrial products.

(2) Principally other electronics and medical products.

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NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS

6 Months Ended

Apr. 30, 2020

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS

        The computation of basic and diluted net income per share attributable to HEICO shareholders is as follows (in thousands, except per share data):

	Six months ended April 30,		Three months ended April 30,
	2020	2019	2020	2019
Numerator:
Net income attributable to HEICO	$197,341	$161,114	$75,453	$81,782
Denominator:
Weighted average common shares outstanding - basic	134,596	133,123	134,669	133,313
Effect of dilutive stock options	2,673	3,969	2,448	3,893
Weighted average common shares outstanding - diluted	137,269	137,092	137,117	137,206
Net income per share attributable to HEICO shareholders:
Basic	$1.47	$1.21	$.56	$.61
Diluted	$1.44	$1.18	$.55	$.60
Anti-dilutive stock options excluded	283	615	448	470

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SELECTED FINANCIAL STATEMENT INFORMATION (Tables)

6 Months Ended

Apr. 30, 2020

Selected Financial Statement Information [Abstract]

Schedule of Accounts Receivable [Table Text Block]

Accounts Receivable

(in thousands)	April 30, 2020	October 31, 2019
Accounts receivable	$235,154	$277,992
Less: Allowance for doubtful accounts	(4,270)	(3,666)
Accounts receivable, net	$230,884	$274,326

Schedule of Inventories [Table Text Block]

Inventories

(in thousands)	April 30, 2020	October 31, 2019
Finished products	$221,338	$199,880
Work in process	40,629	32,548
Materials, parts, assemblies and supplies	195,852	187,891
Inventories, net of valuation reserves	$457,819	$420,319

Schedule of Property, Plant and Equipment [Table Text Block]

Property, Plant and Equipment

(in thousands)	April 30, 2020	October 31, 2019
Land	$6,817	$6,820
Buildings and improvements	118,933	116,997
Machinery, equipment and tooling	260,153	253,127
Construction in progress	10,380	8,382
	396,283	385,326
Less: Accumulated depreciation and amortization	(224,884)	(211,981)
Property, plant and equipment, net	$171,399	$173,345

Schedule of Research and Development Expenses [Table Text Block]

The amount of new product research and development ("R&D") expenses included in cost of sales for the six and three months ended April 30, 2020 and 2019 is as follows (in thousands):

	Six months ended April 30,		Three months ended April 30,
	2020	2019	2020	2019
R&D expenses	$33,855	$32,049	$16,752	$16,849

Schedule of Redeemable Noncontrolling Interests [Table Text Block]

Management's estimate of the aggregate Redemption Amount of all Put Rights that the Company could be required to pay is as follows (in thousands):

	April 30, 2020	October 31, 2019
Redeemable at fair value	$144,854	$136,611
Redeemable based on a multiple of future earnings	51,653	51,653
Redeemable noncontrolling interests	$196,507	$188,264

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

Changes in the components of accumulated other comprehensive loss for the six months ended April 30, 2020 are as follows (in thousands):

	Foreign Currency Translation	Defined Benefit Pension Plan	Accumulated Other Comprehensive Loss
Balances as of October 31, 2019	($14,989)	($1,750)	($16,739)
Unrealized loss	(7,104)	—	(7,104)
Amortization of unrealized loss	—	39	39
Balances as of April 30, 2020	($22,093)	($1,711)	($23,804)

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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Apr. 30, 2020

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The Company's assets and liabilities that were measured at fair value on a recurring basis are set forth by level within the fair value hierarchy in the following tables (in thousands):

	As of April 30, 2020
	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets:
Deferred compensation plan:
Corporate-owned life insurance	$—	$157,522	$—	$157,522
Total assets	$—	$157,522	$—	$157,522
Liabilities:
Contingent consideration	$—	$—	$18,993	$18,993

	As of October 31, 2019
	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets:
Deferred compensation plan:
Corporate-owned life insurance	$—	$151,871	$—	$151,871
Money market funds	20	—	—	20
Total assets	$20	$151,871	$—	$151,891
Liabilities:
Contingent consideration	$—	$—	$18,326	$18,326

Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]

The Level 3 inputs used to derive the estimated fair value of the Company's contingent consideration liability as of April 30, 2020 were as follows:

	Fiscal 2019 Acquisition					Fiscal 2017 Acquisition
Compound annual revenue growth rate range	(7	%)	-	9	%	(3	%)	-	10	%
Weighted average discount rate	4.3				%	3.4				%

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

Changes in the Company’s contingent consideration liability measured at fair value on a recurring basis using unobservable inputs (Level 3) for the six months ended April 30, 2020 are as follows (in thousands):

	Liabilities
Balance as of October 31, 2019	$18,326
Increase in accrued contingent consideration	1,167
Payment of contingent consideration	(500)
Balance as of April 30, 2020	$18,993

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NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Apr. 30, 2020	Apr. 30, 2019	Apr. 30, 2020	Apr. 30, 2019
Numerator:
Net income attributable to HEICO	$ 75,453	$ 81,782	$ 197,341	$ 161,114
Denominator:
Weighted Average Number of Shares Outstanding, Basic	134,669	133,313	134,596	133,123
Effect of dilutive stock options	2,448	3,893	2,673	3,969
Weighted Average Number of Shares Outstanding, Diluted	137,117	137,206	137,269	137,092
Earnings Per Share, Basic	$ 0.56	$ 0.61	$ 1.47	$ 1.21
Earnings Per Share, Diluted	$ 0.55	$ 0.60	$ 1.44	$ 1.18
Anti-dilutive stock options excluded	448	470	283	615

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COMMITMENTS AND CONTINGENCIES (Details Textuals) $ in Thousands	Apr. 30, 2020 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Guarantor Obligations, Maximum Exposure, Undiscounted	$ 4,800

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REVENUE (Disaggregation of Revenue, by Industry) (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Apr. 30, 2020	Apr. 30, 2019	Apr. 30, 2020	Apr. 30, 2019
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		$ 468,146	$ 515,648	$ 974,421	$ 981,794
Flight Support Group [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		251,964	308,251	553,031	595,464
Flight Support Group [Member] | Aerospace [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		188,655	249,225	428,578	484,398
Flight Support Group [Member] | Defense and Space [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		54,142	45,969	104,395	87,503
Flight Support Group [Member] | Other Industries [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	[1]	9,167	13,057	20,058	23,563
Electronic Technologies Group [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		218,955	214,451	427,366	398,880
Electronic Technologies Group [Member] | Aerospace [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		21,721	22,876	42,059	42,171
Electronic Technologies Group [Member] | Defense and Space [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		139,491	135,952	272,601	251,171
Electronic Technologies Group [Member] | Other Industries [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax	[2]	57,743	55,623	112,706	105,538
Corporate And Eliminations [Member]
Disaggregation of Revenue [Line Items]
Revenue from Contract with Customer, Excluding Assessed Tax		$ (2,773)	$ (7,054)	$ (5,976)	$ (12,550)

[1] Principally industrial products.

[2] Principally other electronics and medical products.

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LONG-TERM DEBT (Details) - USD ($) $ in Thousands	Apr. 30, 2020	Oct. 31, 2019
Borrowings under revolving credit facility	$ 730,000	$ 553,000
Finance leases and note payable	10,213	8,955
Total debt and capital leases	740,213	561,955
Current maturities of long-term debt	(1,025)	(906)
Long-term debt, net of current maturities	$ 739,188	$ 561,049

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LEASES (Supplemental Cash Flow Information) (Details) $ in Thousands	6 Months Ended
	Apr. 30, 2020 USD ($)
Leases [Abstract]
Cash paid for amounts included in the measurement of lease liabilities	$ 8,448
Right-of-use assets obtained in exchange for new lease liabilities	$ 6,824

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FAIR VALUE MEASUREMENTS (Fair Value Hierarchy, by Category) (Details) - USD ($) $ in Thousands	Apr. 30, 2020	Oct. 31, 2019
Deferred Compensation Plans [Abstract]
Deferred compensation plans	$ 157,522	$ 151,891
Liabilities:
Contingent consideration	18,993	18,326
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Deferred Compensation Plans [Abstract]
Deferred compensation plans	0	20
Liabilities:
Contingent consideration	0	0
Significant Other Observable Inputs (Level 2) [Member]
Deferred Compensation Plans [Abstract]
Deferred compensation plans	157,522	151,871
Liabilities:
Contingent consideration	0	0
Significant Unobservable Inputs (Level 3) [Member]
Deferred Compensation Plans [Abstract]
Deferred compensation plans	0	0
Liabilities:
Contingent consideration	18,993	18,326
Corporate Owned Life Insurance [Member]
Deferred Compensation Plans [Abstract]
Deferred compensation plans	157,522	151,871
Corporate Owned Life Insurance [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Deferred Compensation Plans [Abstract]
Deferred compensation plans	0	0
Corporate Owned Life Insurance [Member] | Significant Other Observable Inputs (Level 2) [Member]
Deferred Compensation Plans [Abstract]
Deferred compensation plans	157,522	151,871
Corporate Owned Life Insurance [Member] | Significant Unobservable Inputs (Level 3) [Member]
Deferred Compensation Plans [Abstract]
Deferred compensation plans	$ 0	0
Money Market Funds [Member]
Deferred Compensation Plans [Abstract]
Deferred compensation plans		20
Money Market Funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Deferred Compensation Plans [Abstract]
Deferred compensation plans		20
Money Market Funds [Member] | Significant Other Observable Inputs (Level 2) [Member]
Deferred Compensation Plans [Abstract]
Deferred compensation plans		0
Money Market Funds [Member] | Significant Unobservable Inputs (Level 3) [Member]
Deferred Compensation Plans [Abstract]
Deferred compensation plans		$ 0

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LEASES (ROU Assets and Lease Liabilities) (Details) $ in Thousands	Apr. 30, 2020 USD ($)
Leases [Abstract]
Right-of-use assets	$ 60,056
Current lease liabilities	13,365
Long-term lease liabilities	47,570
Total operating lease liabilities	$ 60,935

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DOCUMENT AND ENTITY INFORMATION - $ / shares	3 Months Ended
	Apr. 30, 2020	May 26, 2020
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Entity Shell Company	false
Local Phone Number	987-4000
Entity File Number	001-04604
City Area Code	954
Entity Interactive Data Current	Yes
Amendment Flag	false
Document Period End Date	Apr. 30, 2020
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2020
Entity Current Reporting Status	Yes
Entity Information [Line Items]
Entity Incorporation, State or Country Code	FL
Entity Registrant Name	HEICO CORPORATION
Address	3000 Taft Street
Entity Address, City or Town	Hollywood
State	FL
Zip Code	33021
Entity Central Index Key	0000046619
Entity Tax Identification Number	65-0341002
Current Fiscal Year End Date	--10-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Heico Common Stock [Member]
Entity Information [Line Items]
Title of 12(b) Security	Common Stock, $.01 par value per share
Security Exchange Name	NYSE
Trading Symbol	HEI
Entity Common Stock, Shares Outstanding		54,182,069
Entity Common Stock Par Value	$ 0.01
Common Class A [Member]
Entity Information [Line Items]
Title of 12(b) Security	Class A Common Stock, $.01 par value per share
Security Exchange Name	NYSE
Trading Symbol	HEI.A
Entity Common Stock, Shares Outstanding		80,569,960
Entity Common Stock Par Value	$ 0.01

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Apr. 30, 2020	Apr. 30, 2019	Apr. 30, 2020	Apr. 30, 2019
Net income from consolidated operations	$ 80,909	$ 90,083	$ 210,711	$ 178,109
Other comprehensive income (loss):
Foreign currency translation adjustments	(4,721)	(5,636)	(7,399)	(1,262)
Amortization of unrealized loss on defined benefit pension plan, net of tax	15	6	39	12
Total other comprehensive income (loss)	(4,706)	(5,630)	(7,360)	(1,250)
Comprehensive income from consolidated operations	76,203	84,453	203,351	176,859
Less: Comprehensive income attributable to noncontrolling interests	5,456	8,301	13,370	16,995
Less: Foreign currency translation adjustments attributable to noncontrolling interests	(165)	(347)	(295)	(154)
Comprehensive income attributable to noncontrolling interests	5,291	7,954	13,075	16,841
Comprehensive income attributable to HEICO	$ 70,912	$ 76,499	$ 190,276	$ 160,018

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Apr. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies [Text Block]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of HEICO Corporation and its subsidiaries (collectively, “HEICO,” or the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q. Therefore, the condensed consolidated financial statements do not include all information and footnotes normally included in annual consolidated financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended October 31, 2019. The October 31, 2019 Condensed Consolidated Balance Sheet has been derived from the Company’s audited consolidated financial statements. In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments (consisting principally of normal recurring accruals) necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, statements of comprehensive income, statements of shareholders' equity and statements of cash flows for such interim periods presented. The results of operations for the six months ended April 30, 2020 are not necessarily indicative of the results which may be expected for the entire fiscal year.

The Company has two operating segments: the Flight Support Group (“FSG”), consisting of HEICO Aerospace Holdings Corp. and HEICO Flight Support Corp. and their respective subsidiaries; and the Electronic Technologies Group (“ETG”), consisting of HEICO Electronic Technologies Corp. (“HEICO Electronic”) and its subsidiaries.

HEICO's results of operations for the six and three months ended April 30, 2020 have been significantly affected by the COVID-19 outbreak, classified by the World Health Organization as a global pandemic in March 2020 (the “Outbreak”). The effects of the Outbreak and related actions by governments around the world to mitigate its spread have impacted the Company's employees, customers, suppliers and manufacturers. With respect to the Company’s results of operations, approximately half of HEICO’s net sales are derived from defense, space and other industrial markets including electronics, medical and telecommunications. Demand for products in that half of the Company’s business has not been fundamentally impacted and its operational results remain materially consistent with financial expectations prior to the commencement of the Outbreak. The remaining portion of HEICO’s net sales is derived from commercial aviation products and services. The Outbreak has caused significant volatility and a substantial decline in value across global economic markets. Most notably, the commercial aerospace industry has experienced an ongoing substantial decline in demand. As such, HEICO’s businesses that operate within the commercial aerospace industry have been materially impacted by the significant decline in global commercial air travel that began in March 2020.

As a result of the Outbreak, HEICO has assessed various accounting estimates, including those that require consideration of forecasted financial information, in context of the unknown future impacts of the Outbreak as of April 30, 2020 and through the date of filing this Quarterly Report. The accounting estimates assessed include, but were not limited to, the Company’s allowance for doubtful accounts, inventory reserves, contingent consideration arrangements, goodwill and other long-lived assets. Based on these assessments, no material impact was recorded to HEICO’s Condensed Consolidated Statement of Operations for the six and three months ended April 30, 2020.

New Accounting Pronouncements

        In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, which, as amended, was codified as Accounting Standards Codification ("ASC") Topic 842, "Leases" ("ASC 842"). ASC 842 requires recognition of lease assets and lease liabilities on the balance sheet of lessees. The Company adopted ASC 842 as of November 1, 2019 using a modified retrospective transition approach with the election to apply the guidance as of the adoption date instead of at the beginning of the earliest comparative period presented. The adoption of this guidance resulted in an increase in the Company's assets and liabilities due to the recognition of right-of-use ("ROU") assets and corresponding lease liabilities for leases that are currently classified as operating leases.

        Upon adoption, the Company elected the package of transitional practical expedients, which allowed the Company to not reassess its prior conclusions about lease identification, lease classification, and initial direct costs. In addition, the Company elected the short-term lease practical expedient, which allows HEICO to not record an ROU asset and lease liability for any lease with a term of twelve months or less, and also elected the single component practical expedient for all asset classes, which allows the Company to include both lease and non-lease components associated with a lease as a single lease component when determining the value of the ROU asset and lease liability.

        The adoption of this guidance resulted in the Company recording ROU assets and corresponding lease liabilities of $63.4 million and $64.1 million, respectively, in the Company's Condensed Consolidated Balance Sheet. The adoption of ASC 842 did not have a material impact on the Company’s Condensed Consolidated Statement of Operations or Statement of Cash Flows. See Note 9, Leases, for additional information regarding the Company's accounting policy for leases and disclosures required by ASC 842.

        In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment," which is intended to simplify the current test for goodwill impairment by eliminating the second step in which the implied value of a reporting unit is calculated when the carrying value of the reporting unit exceeds its fair value. Under ASU 2017-04, goodwill impairment should be recognized for the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 must be applied prospectively and is effective for any annual or interim goodwill impairment test in fiscal

years beginning after December 15, 2019, or in fiscal 2021 for HEICO. Early adoption is permitted. The Company is currently evaluating the effect the adoption of this guidance will have on its consolidated results of operations, financial position and cash flows.

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GOODWILL AND OTHER INTANGIBLE ASSETS

6 Months Ended

Apr. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

GOODWILL AND OTHER INTANGIBLE ASSETS

        Changes in the carrying amount of goodwill by operating segment for the six months ended April 30, 2020 are as follows (in thousands):

	Segment		Consolidated Totals
	FSG	ETG
Balances as of October 31, 2019	$410,044	$858,659	$1,268,703
Goodwill acquired	—	34,173	34,173
Foreign currency translation adjustments	(569)	(1,835)	(2,404)
Adjustments to goodwill	—	(285)	(285)
Balances as of April 30, 2020	$409,475	$890,712	$1,300,187

The goodwill acquired pertains to the fiscal 2020 acquisitions described in Note 2, Acquisitions, and represents the residual value after the allocation of the total consideration to the tangible and identifiable intangible assets acquired and liabilities and noncontrolling interests assumed. Foreign currency translation adjustments are included in other comprehensive income (loss) in the Company's Condensed Consolidated Statements of Comprehensive Income. The adjustments to goodwill represent immaterial measurement period adjustments to the purchase price allocation of certain fiscal 2019 acquisitions. The Company estimates that $9 million of the goodwill acquired in fiscal 2020 will be deductible for income tax purposes.

Identifiable intangible assets consist of the following (in thousands):

	As of April 30, 2020			As of October 31, 2019
	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount	Gross Carrying Amount	Accumulated Amortization	Net Carrying Amount
Amortizing Assets:
Customer relationships	$417,412	($178,510)	$238,902	$411,076	($162,722)	$248,354
Intellectual property	220,372	(76,021)	144,351	216,359	(70,169)	146,190
Licenses	6,559	(4,387)	2,172	6,559	(4,102)	2,457
Patents	996	(691)	305	986	(666)	320
Non-compete agreements	805	(805)	—	813	(813)	—
Trade names	450	(199)	251	450	(180)	270
	646,594	(260,613)	385,981	636,243	(238,652)	397,591
Non-Amortizing Assets:
Trade names	154,642	—	154,642	153,102	—	153,102
	$801,236	($260,613)	$540,623	$789,345	($238,652)	$550,693

The increase in the gross carrying amount of customer relationships, intellectual property and trade names as of April 30, 2020 compared to October 31, 2019 principally relates to such intangible assets recognized in connection with the fiscal 2020 acquisitions (see Note 2, Acquisitions).

        Amortization expense related to intangible assets for the six months ended April 30, 2020 and 2019 was $27.6 million and $25.9 million, respectively. Amortization expense related to intangible assets for the three months ended April 30, 2020 and 2019 was $13.9 million and $13.1 million, respectively. Amortization expense related to intangible assets for the remainder of fiscal 2020 is estimated to be $27.5 million. Amortization expense for each of the next five fiscal years and thereafter is estimated to be $52.4 million in fiscal 2021, $45.8 million in fiscal 2022, $40.6 million in fiscal 2023, $36.1 million in fiscal 2024, $32.2 million in fiscal 2025, and $151.4 million thereafter.

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FAIR VALUE MEASUREMENTS

6 Months Ended

Apr. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

FAIR VALUE MEASUREMENTS

The Company's assets and liabilities that were measured at fair value on a recurring basis are set forth by level within the fair value hierarchy in the following tables (in thousands):

	As of April 30, 2020
	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets:
Deferred compensation plan:
Corporate-owned life insurance	$—	$157,522	$—	$157,522
Total assets	$—	$157,522	$—	$157,522
Liabilities:
Contingent consideration	$—	$—	$18,993	$18,993

	As of October 31, 2019
	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets:
Deferred compensation plan:
Corporate-owned life insurance	$—	$151,871	$—	$151,871
Money market funds	20	—	—	20
Total assets	$20	$151,871	$—	$151,891
Liabilities:
Contingent consideration	$—	$—	$18,326	$18,326

The Company maintains the HEICO Corporation Leadership Compensation Plan (the "LCP"), which is a non-qualified deferred compensation plan. The assets of the LCP principally represent cash surrender values of life insurance policies, which derive their fair values from investments in mutual funds that are managed by an insurance company, and are classified within Level 2 and valued using a market approach. Certain other assets of the LCP represent investments in money market funds that are classified within Level 1. The assets of the LCP are held within an irrevocable trust and classified within other assets in the Company’s Condensed Consolidated Balance Sheets. The related liabilities of the LCP are included within other long-term liabilities and accrued expenses and other current liabilities in the Company’s Condensed Consolidated Balance Sheets and have an aggregate value of $156.3 million as of April 30, 2020 and $151.1 million as of October 31, 2019.

As part of the agreement to acquire a subsidiary by the FSG in fiscal 2019, the Company may be obligated to pay contingent consideration of $6.4 million in fiscal 2022 should the acquired entity meet a certain earnings objective during the second and third years following the acquisition. As of April 30, 2020, the estimated fair value of the contingent consideration was $1.2 million.

As part of the agreement to acquire a subsidiary by the ETG in fiscal 2017, the Company may be obligated to pay contingent consideration of $20.0 million in fiscal 2023 should the acquired entity meet a certain earnings objective during the first six years following the acquisition. As of April 30, 2020, the estimated fair value of the contingent consideration was $17.8 million.

        The estimated fair value of the contingent consideration arrangements described above are classified within Level 3 and were determined using probability-based scenario analyses. Under this method, a set of discrete potential future subsidiary earnings was determined using internal estimates based on various revenue growth rate assumptions for each scenario. A probability of likelihood was assigned to each discrete potential future earnings estimate and the resultant contingent consideration was calculated. The resulting probability-weighted contingent consideration amounts were discounted using a weighted average discount rate reflecting the credit risk of HEICO. Changes in either the revenue growth rates, related earnings or the discount rate could result in a material change to the amount of contingent consideration accrued and such changes will be recorded in the Company's condensed consolidated statements of operations.

The Level 3 inputs used to derive the estimated fair value of the Company's contingent consideration liability as of April 30, 2020 were as follows:

	Fiscal 2019 Acquisition					Fiscal 2017 Acquisition
Compound annual revenue growth rate range	(7	%)	-	9	%	(3	%)	-	10	%
Weighted average discount rate	4.3				%	3.4				%

Changes in the Company’s contingent consideration liability measured at fair value on a recurring basis using unobservable inputs (Level 3) for the six months ended April 30, 2020 are as follows (in thousands):

	Liabilities
Balance as of October 31, 2019	$18,326
Increase in accrued contingent consideration	1,167
Payment of contingent consideration	(500)
Balance as of April 30, 2020	$18,993

The Company's contingent consideration liability is included in other long-term liabilities in its Condensed Consolidated Balance Sheets and the Company records changes in accrued contingent consideration within selling, general and administrative expenses in its Condensed Consolidated Statements of Operations.

The Company did not have any transfers between Level 1 and Level 2 fair value measurements during the six months ended April 30, 2020.

The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, trade accounts payable and accrued expenses and other current liabilities approximate fair value as of April 30, 2020 due to the relatively short maturity of the respective instruments. The carrying amount of long-term debt approximates fair value due to its variable interest rates.

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SELECTED FINANCIAL STATEMENT INFORMATION (Property, Plant and Equipment) (Details) - USD ($) $ in Thousands	Apr. 30, 2020	Oct. 31, 2019
Property, Plant and Equipment [Line Items]
Land	$ 6,817	$ 6,820
Buildings and improvements	118,933	116,997
Machinery, equipment and tooling	260,153	253,127
Construction in progress	10,380	8,382
Property, plant and equipment, gross	396,283	385,326
Less: Accumulated depreciation and amortization	(224,884)	(211,981)
Property, plant and equipment, net	$ 171,399	$ 173,345

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textuals) $ in Thousands	Apr. 30, 2020 USD ($)
Operating Lease, Right-of-Use Asset	$ 60,056
Operating Lease, Liability	60,935
Accounting Standards Update 2016-02 [Member]
Operating Lease, Right-of-Use Asset	63,400
Operating Lease, Liability	$ 64,100

XML

SELECTED FINANCIAL STATEMENT INFORMATION (Details Textuals) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Apr. 30, 2020	Apr. 30, 2019	Apr. 30, 2020	Apr. 30, 2019	Oct. 31, 2019
Selected Financial Statement Information (Details) [Abstract]
Accrued customer rebates and credits	$ 18.0		$ 18.0		$ 18.0
Total customer rebates and credits deducted within net sales	$ 1.7	$ 2.2	$ 3.8	$ 3.6
Electronic Technologies Group [Member] | Quell [Member]
Business Acquisition [Line Items]
Business Acquisition, Percentage of Voting Interests Acquired	80.10%		80.10%

XML

NET INCOME PER SHARE ATTRIBUTABLE TO HEICO SHAREHOLDERS (Tables)

6 Months Ended

Apr. 30, 2020

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The computation of basic and diluted net income per share attributable to HEICO shareholders is as follows (in thousands, except per share data):

	Six months ended April 30,		Three months ended April 30,
	2020	2019	2020	2019
Numerator:
Net income attributable to HEICO	$197,341	$161,114	$75,453	$81,782
Denominator:
Weighted average common shares outstanding - basic	134,596	133,123	134,669	133,313
Effect of dilutive stock options	2,673	3,969	2,448	3,893
Weighted average common shares outstanding - diluted	137,269	137,092	137,117	137,206
Net income per share attributable to HEICO shareholders:
Basic	$1.47	$1.21	$.56	$.61
Diluted	$1.44	$1.18	$.55	$.60
Anti-dilutive stock options excluded	283	615	448	470

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Apr. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

COMMITMENTS AND CONTINGENCIES

Guarantees

As of April 30, 2020, the Company has arranged for standby letters of credit aggregating $4.8 million, which are supported by its revolving credit facility and pertain to payment guarantees related to potential workers' compensation claims and a facility lease as well as performance guarantees related to customer contracts entered into by certain of the Company's subsidiaries.

Product Warranty

Changes in the Company’s product warranty liability for the six months ended April 30, 2020 and 2019, respectively, are as follows (in thousands):

	Six months ended April 30,
	2020	2019
Balances as of beginning of fiscal year	$2,810	$3,306
Accruals for warranties	1,194	1,264
Acquired warranty liabilities	50	—
Warranty claims settled	(952)	(1,543)
Balances as of April 30	$3,102	$3,027

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.

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LONG-TERM DEBT (Tables)

6 Months Ended

Apr. 30, 2020

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

Long-term debt consists of the following (in thousands):

	April 30, 2020	October 31, 2019
Borrowings under revolving credit facility	$730,000	$553,000
Finance leases and note payable	10,213	8,955
	740,213	561,955
Less: Current maturities of long-term debt	(1,025)	(906)
	$739,188	$561,049

XML

REVENUE (Contract Assets and Liabilities) (Details) - USD ($) $ in Thousands	6 Months Ended
	Apr. 30, 2020	Oct. 31, 2019
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract]
Contract assets	$ 56,033	$ 43,132
Contract liabilities	26,928	23,809
Net contract assets	29,105	$ 19,323
Decrease in contract assets, net	12,901
Increase (Decrease) in Customer Deposits	3,119
Contract with Customer, Billings in Excess of Unbilled Receivable and New Deposits in Excess of Deposits Recognized as Revenue	$ 9,782

XML

GOODWILL AND OTHER INTANGIBLE ASSETS (Identifiable Intangible Assets) (Details) - USD ($) $ in Thousands	Apr. 30, 2020	Oct. 31, 2019
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	$ 646,594	$ 636,243
Accumulated Amortization	(260,613)	(238,652)
Net Carrying Amount	385,981	397,591
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Intangible Asset Gross Carrying Amount	801,236	789,345
Intangible Asset Net Carrying Amount	540,623	550,693
Trade Names [Member]
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract]
Gross Carrying Amount	154,642	153,102
Net Carrying Amount	154,642	153,102
Customer Relationships [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	417,412	411,076
Accumulated Amortization	(178,510)	(162,722)
Net Carrying Amount	238,902	248,354
Intellectual Property [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	220,372	216,359
Accumulated Amortization	(76,021)	(70,169)
Net Carrying Amount	144,351	146,190
Licensing Agreements [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	6,559	6,559
Accumulated Amortization	(4,387)	(4,102)
Net Carrying Amount	2,172	2,457
Patents [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	996	986
Accumulated Amortization	(691)	(666)
Net Carrying Amount	305	320
Noncompete Agreements [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	805	813
Accumulated Amortization	(805)	(813)
Net Carrying Amount	0	0
Trade Names [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Gross Carrying Amount	450	450
Accumulated Amortization	(199)	(180)
Net Carrying Amount	$ 251	$ 270

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INCOME TAXES (Details Textuals) - USD ($) $ in Millions	3 Months Ended				6 Months Ended		12 Months Ended
	Apr. 30, 2020	Jan. 31, 2020	Apr. 30, 2019	Jan. 31, 2019	Apr. 30, 2020	Apr. 30, 2019	Jan. 31, 2020
Income Tax Disclosure [Abstract]
Effective Income Tax Rate Reconciliation, Percent	22.60%		22.50%		0.30%	14.50%
Tax benefit from stock option exercises recognized in the period		$ 47.6		$ 16.6
Year Over Year, Deferred Tax Expense From Stock Option Exercised							$ 31.0

XML

OPERATING SEGMENTS (Assets) (Details) - USD ($) $ in Thousands	Apr. 30, 2020	Oct. 31, 2019
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	$ 3,364,835	$ 2,969,211
Other Primarily Corporate and Intersegment [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	335,923	176,442
Flight Support Group [Member] | Operating Segments [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	1,201,852	1,149,737
Electronic Technologies Group [Member] | Operating Segments [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	$ 1,827,060	$ 1,643,032

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Apr. 30, 2020

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Basis of Presentation [Text Block]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of HEICO Corporation and its subsidiaries (collectively, “HEICO,” or the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States of America for interim financial information and in accordance with the instructions to Form 10-Q. Therefore, the condensed consolidated financial statements do not include all information and footnotes normally included in annual consolidated financial statements and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended October 31, 2019. The October 31, 2019 Condensed Consolidated Balance Sheet has been derived from the Company’s audited consolidated financial statements. In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments (consisting principally of normal recurring accruals) necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, statements of comprehensive income, statements of shareholders' equity and statements of cash flows for such interim periods presented. The results of operations for the six months ended April 30, 2020 are not necessarily indicative of the results which may be expected for the entire fiscal year.

The Company has two operating segments: the Flight Support Group (“FSG”), consisting of HEICO Aerospace Holdings Corp. and HEICO Flight Support Corp. and their respective subsidiaries; and the Electronic Technologies Group (“ETG”), consisting of HEICO Electronic Technologies Corp. (“HEICO Electronic”) and its subsidiaries.

HEICO's results of operations for the six and three months ended April 30, 2020 have been significantly affected by the COVID-19 outbreak, classified by the World Health Organization as a global pandemic in March 2020 (the “Outbreak”). The effects of the Outbreak and related actions by governments around the world to mitigate its spread have impacted the Company's employees, customers, suppliers and manufacturers. With respect to the Company’s results of operations, approximately half of HEICO’s net sales are derived from defense, space and other industrial markets including electronics, medical and telecommunications. Demand for products in that half of the Company’s business has not been fundamentally impacted and its operational results remain materially consistent with financial expectations prior to the commencement of the Outbreak. The remaining portion of HEICO’s net sales is derived from commercial aviation products and services. The Outbreak has caused significant volatility and a substantial decline in value across global economic markets. Most notably, the commercial aerospace industry has experienced an ongoing substantial decline in demand. As such, HEICO’s businesses that operate within the commercial aerospace industry have been materially impacted by the significant decline in global commercial air travel that began in March 2020.

As a result of the Outbreak, HEICO has assessed various accounting estimates, including those that require consideration of forecasted financial information, in context of the unknown future impacts of the Outbreak as of April 30, 2020 and through the date of filing this Quarterly Report. The accounting estimates assessed include, but were not limited to, the Company’s allowance for doubtful accounts, inventory reserves, contingent consideration arrangements, goodwill and other long-lived assets. Based on these assessments, no material impact was recorded to HEICO’s Condensed Consolidated Statement of Operations for the six and three months ended April 30, 2020.

Accounting Standards Update 2016-02 [Member]

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Description of New Accounting Pronouncements Not yet Adopted [Text Block]

In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02, which, as amended, was codified as Accounting Standards Codification ("ASC") Topic 842, "Leases" ("ASC 842"). ASC 842 requires recognition of lease assets and lease liabilities on the balance sheet of lessees. The Company adopted ASC 842 as of November 1, 2019 using a modified retrospective transition approach with the election to apply the guidance as of the adoption date instead of at the beginning of the earliest comparative period presented. The adoption of this guidance resulted in an increase in the Company's assets and liabilities due to the recognition of right-of-use ("ROU") assets and corresponding lease liabilities for leases that are currently classified as operating leases.

        Upon adoption, the Company elected the package of transitional practical expedients, which allowed the Company to not reassess its prior conclusions about lease identification, lease classification, and initial direct costs. In addition, the Company elected the short-term lease practical expedient, which allows HEICO to not record an ROU asset and lease liability for any lease with a term of twelve months or less, and also elected the single component practical expedient for all asset classes, which allows the Company to include both lease and non-lease components associated with a lease as a single lease component when determining the value of the ROU asset and lease liability.

        The adoption of this guidance resulted in the Company recording ROU assets and corresponding lease liabilities of $63.4 million and $64.1 million, respectively, in the Company's Condensed Consolidated Balance Sheet. The adoption of ASC 842 did not have a material impact on the Company’s Condensed Consolidated Statement of Operations or Statement of Cash Flows. See Note 9, Leases, for additional information regarding the Company's accounting policy for leases and disclosures required by ASC 842.

Accounting Standards Update 2017-04 [Member]

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Description of New Accounting Pronouncements Not yet Adopted [Text Block]

In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment," which is intended to simplify the current test for goodwill impairment by eliminating the second step in which the implied value of a reporting unit is calculated when the carrying value of the reporting unit exceeds its fair value. Under ASU 2017-04, goodwill impairment should be recognized for the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. ASU 2017-04 must be applied prospectively and is effective for any annual or interim goodwill impairment test in fiscal years beginning after December 15, 2019, or in fiscal 2021 for HEICO. Early adoption is permitted. The Company is currently evaluating the effect the adoption of this guidance will have on its consolidated results of operations, financial position and cash flows.

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REVENUE (Tables)

6 Months Ended

Apr. 30, 2020

Revenue from Contract with Customer [Abstract]

Contract with Customer, Asset and Liability [Table Text Block]

Changes in the Company’s contract assets and liabilities for the six months ended April 30, 2020 are as follows (in thousands):

	April 30, 2020	October 31, 2019	Change
Contract assets	$56,033	$43,132	$12,901
Contract liabilities	26,928	23,809	3,119
Net contract assets	$29,105	$19,323	$9,782

Product Line [Member]

Disaggregation of Revenue [Line Items]

Disaggregation of Revenue [Table Text Block]

The following table summarizes the Company’s net sales by product line for each operating segment (in thousands):

	Six months ended April 30,		Three months ended April 30,
	2020	2019	2020	2019
Flight Support Group:
Aftermarket replacement parts (1)	$309,459	$326,722	$141,192	$167,225
Repair and overhaul parts and services (2)	121,916	140,617	52,629	73,454
Specialty products (3)	121,656	128,125	58,143	67,572
Total net sales	553,031	595,464	251,964	308,251
Electronic Technologies Group:
Electronic component parts for defense, space and aerospace equipment (4)	329,675	299,414	168,962	161,664
Electronic component parts for equipment in various other industries (5)	97,691	99,466	49,993	52,787
Total net sales	427,366	398,880	218,955	214,451
Intersegment sales	(5,976)	(12,550)	(2,773)	(7,054)
Total consolidated net sales	$974,421	$981,794	$468,146	$515,648

⁽¹⁾ Includes various jet engine and aircraft component replacement parts.

⁽²⁾ Includes primarily the sale of parts consumed in various repair and overhaul services on selected jet engine and aircraft components, avionics, instruments, composites and flight surfaces of commercial and military aircraft.

⁽³⁾ Includes primarily the sale of specialty components such as thermal insulation blankets, renewable/reusable insulation systems, advanced niche components, complex composite assemblies, and expanded foil mesh.

⁽⁴⁾ Includes various component parts such as electro-optical infrared simulation and test equipment, electro-optical laser products, electro-optical, microwave and other power equipment, high-speed interface products, power conversion products, underwater locator beacons, emergency locator transmission beacons, traveling wave tube amplifiers, microwave power modules, three-dimensional

microelectronic and stacked memory products, crashworthy and ballistically self-sealing auxiliary fuel systems, radio frequency (RF) and microwave amplifiers, transmitters and receivers, high performance communications and electronic intercept receivers and tuners, high performance active antenna systems, and technical surveillance countermeasures equipment.

⁽⁵⁾ Includes various component parts such as electromagnetic and radio interference shielding, high voltage interconnection devices, high voltage advanced power electronics, harsh environment connectivity products, custom molded cable assemblies and silicone material for a variety of demanding applications.

Sales by Industry [Member]

Disaggregation of Revenue [Line Items]

Disaggregation of Revenue [Table Text Block]

The following table summarizes the Company’s net sales by industry for each operating segment (in thousands):

	Six months ended April 30,		Three months ended April 30,
	2020	2019	2020	2019
Flight Support Group:
Aerospace	$428,578	$484,398	$188,655	$249,225
Defense and Space	104,395	87,503	54,142	45,969
Other (1)	20,058	23,563	9,167	13,057
Total net sales	553,031	595,464	251,964	308,251
Electronic Technologies Group:
Defense and Space	272,601	251,171	139,491	135,952
Other (2)	112,706	105,538	57,743	55,623
Aerospace	42,059	42,171	21,721	22,876
Total net sales	427,366	398,880	218,955	214,451
Intersegment sales	(5,976)	(12,550)	(2,773)	(7,054)
Total consolidated net sales	$974,421	$981,794	$468,146	$515,648

⁽¹⁾ Principally industrial products.

(2) Principally other electronics and medical products.

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OPERATING SEGMENTS (Tables)

6 Months Ended

Apr. 30, 2020

Segment Reporting [Abstract]

Schedule Of Segment Reporting Information By Segment [Table Text Block]

Information on the Company’s two operating segments, the FSG and the ETG, for the six and three months ended April 30, 2020 and 2019, respectively, is as follows (in thousands):

			Other, Primarily Corporate and Intersegment (1)	Consolidated Totals
	Segment
	FSG	ETG
Six months ended April 30, 2020:
Net sales	$553,031	$427,366	($5,976)	$974,421
Depreciation	7,245	5,809	511	13,565
Amortization	9,611	19,608	492	29,711
Operating income	109,576	123,017	(13,442)	219,151
Capital expenditures	6,765	5,665	5	12,435
Six months ended April 30, 2019:
Net sales	$595,464	$398,880	($12,550)	$981,794
Depreciation	6,758	5,395	503	12,656
Amortization	9,723	17,677	492	27,892
Operating income	115,046	118,954	(16,870)	217,130
Capital expenditures	6,576	6,012	8	12,596
Three months ended April 30, 2020:
Net sales	$251,964	$218,955	($2,773)	$468,146
Depreciation	3,628	2,881	256	6,765
Amortization	4,752	9,930	246	14,928
Operating income	47,531	65,526	(4,896)	108,161
Capital expenditures	2,647	2,938	—	5,585
Three months ended April 30, 2019:
Net sales	$308,251	$214,451	($7,054)	$515,648
Depreciation	3,403	2,789	252	6,444
Amortization	4,920	8,901	246	14,067
Operating income	62,166	67,352	(10,335)	119,183
Capital expenditures	3,727	2,954	8	6,689

Reconciliation of Assets from Segment to Consolidated [Table Text Block]

Total assets by operating segment are as follows (in thousands):

			Other, Primarily Corporate	Consolidated Totals
	Segment
	FSG	ETG
Total assets as of April 30, 2020	$1,201,852	$1,827,060	$335,923	$3,364,835
Total assets as of October 31, 2019	1,149,737	1,643,032	176,442	2,969,211

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REVENUE (Details Textuals) $ in Thousands	3 Months Ended	6 Months Ended
	Apr. 30, 2020 USD ($)	Apr. 30, 2020 USD ($)
REVENUE [Abstract]
Contract with Customer, Liability, Revenue Recognized	$ 3,100	$ 16,500
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-05-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 394,400	$ 394,400
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	1 year 1 day	1 year 1 day
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-05-02
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 168,000	$ 168,000
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	6 months	6 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-11-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Amount	$ 226,400	$ 226,400
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	6 months 1 day	6 months 1 day

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LONG-TERM DEBT (Details Textuals)	Apr. 30, 2020	Oct. 31, 2019
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Weighted average interest rate	1.60%	3.00%

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GOODWILL AND OTHER INTANGIBLE ASSETS (Goodwill) (Details) $ in Thousands	6 Months Ended
	Apr. 30, 2020 USD ($)
Goodwill [Line Items]
Opening Balance	$ 1,268,703
Goodwill acquired	34,173
Foreign currency translation adjustments	(2,404)
Adjustments to goodwill	(285)
Ending Balance	1,300,187
Flight Support Group [Member]
Goodwill [Line Items]
Opening Balance	410,044
Foreign currency translation adjustments	(569)
Ending Balance	409,475
Electronic Technologies Group [Member]
Goodwill [Line Items]
Opening Balance	858,659
Goodwill acquired	34,173
Foreign currency translation adjustments	(1,835)
Adjustments to goodwill	(285)
Ending Balance	$ 890,712

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COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	6 Months Ended
	Apr. 30, 2020	Apr. 30, 2019
Schedule of Product Warranties [Line Items]
Balances as of beginning of fiscal year	$ 2,810	$ 3,306
Accruals for warranties	1,194	1,264
Acquired warranty liabilities	50
Warranty claims settled	(952)	(1,543)
Balances as of end of period	$ 3,102	$ 3,027

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FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS (Level 3 Valuation Inputs) (Details) - Fair Value, Inputs, Level 3 [Member]	Apr. 30, 2020
Measurement Input, Long-term Revenue Growth Rate [Member] | FY2019 Acquisition [Member] | Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Business Combination, Contingent Consideration, Liability, Measurement Input	(0.07)
Measurement Input, Long-term Revenue Growth Rate [Member] | FY2019 Acquisition [Member] | Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Business Combination, Contingent Consideration, Liability, Measurement Input	0.09
Measurement Input, Long-term Revenue Growth Rate [Member] | FY 2017 Acquisition [Member] | Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Business Combination, Contingent Consideration, Liability, Measurement Input	(0.03)
Measurement Input, Long-term Revenue Growth Rate [Member] | FY 2017 Acquisition [Member] | Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Business Combination, Contingent Consideration, Liability, Measurement Input	0.10
Measurement Input, Discount Rate [Member] | FY2019 Acquisition [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Business Combination, Contingent Consideration, Liability, Measurement Input	0.043
Measurement Input, Discount Rate [Member] | FY 2017 Acquisition [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Business Combination, Contingent Consideration, Liability, Measurement Input	0.034

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LEASES (Operating Lease Expense) (Details) - USD ($) $ in Thousands		3 Months Ended	6 Months Ended
		Apr. 30, 2020	Apr. 30, 2020
Leases [Abstract]
Operating lease expense		$ 4,284	$ 8,544
Variable lease expense		708	1,323
Total operating lease expense (1)	[1]	$ 4,992	$ 9,867

[1] Excludes short-term lease expense, which is not material.

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LEASES (Details Textuals) - USD ($) $ in Thousands	Apr. 30, 2020	Oct. 31, 2019
Item Effected [Line Items]
Next fiscal twelve months	$ 16,101
Year Two	14,192
Year three	8,834
Year four	5,006
Year five	4,136
Thereafter	$ 18,004
Previous Accounting Guidance [Member]
Item Effected [Line Items]
Next fiscal twelve months		$ 15,500
Year Two		15,600
Year three		13,800
Year four		8,500
Year five		4,700
Thereafter		$ 18,800

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED - USD ($) $ in Thousands	6 Months Ended
	Apr. 30, 2020	Apr. 30, 2019
Operating Activities:
Net income from consolidated operations	$ 210,711	$ 178,109
Adjustments to reconcile net income from consolidated operations to net cash provided by (used in) operating activities:
Depreciation and amortization	43,276	40,548
Share-based compensation expense	5,275	4,987
Employer contributions to HEICO Savings and Investment Plan	4,811	4,601
Change in value of contingent consideration	1,167	3,104
Deferred income tax provision (benefit)	(5,137)	648
PaymentofContingentConsiderationinExcessofAcquisitionDateValue	(175)	(67)
Changes in operating assets and liabilities, net of acquisitions:
Change in accounts receivable	44,419	(15,784)
Increase (Decrease) in Contract with Customer, Asset	(12,985)	5,699
Change in inventories	(37,790)	(26,724)
Change in prepaid expenses and other current assets	(15,603)	27
Change in trade accounts payable	2,627	(7,698)
Change in accrued expenses and other current liabilities	(47,673)	(16,596)
Change in income taxes payable	(2,018)	(1,141)
Increase (Decrease) in Obligation, Other Postretirement Benefits	13,951	10,604
Other	1,026	(2,064)
Net cash provided by operating activities	205,882	178,253
Investing Activities:
Acquisitions, net of cash acquired	(45,343)	(134,940)
Net Investment Related to Deferred Compensation Plan	(13,600)	(10,800)
Capital expenditures	(12,435)	(12,596)
Other	473	636
Net cash used in investing activities	(70,905)	(157,700)
Financing Activities:
Proceeds from Long-term Lines of Credit	245,000	129,000
Payments on revolving credit facility	(68,000)	(105,000)
Cash dividends paid	(10,762)	(9,305)
Distributions to noncontrolling interests	(9,742)	(8,190)
Common Stock Issued Repurchased and Retired Related To Stock Option Exercises	(2,567)	(27,744)
Payment of Contingent Consideration	(325)	(283)
Proceeds from stock option exercises	2,392	5,528
Other	(444)	(176)
Net cash (used in) provided by financing activities	155,552	(16,170)
Effect of exchange rate changes on cash	(744)	109
Net (decrease) increase in cash and cash equivalents	289,785	4,492
Cash and cash equivalents at beginning of year	57,001	59,599
Cash and cash equivalents at end of period	$ 346,786	$ 64,091

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Apr. 30, 2020	Apr. 30, 2019	Apr. 30, 2020	Apr. 30, 2019
Net sales	$ 468,146	$ 515,648	$ 974,421	$ 981,794
Operating costs and expenses:
Cost of sales	289,256	306,261	597,484	590,170
Selling, general and administrative expenses	70,729	90,204	157,786	174,494
Total operating costs and expenses	359,985	396,465	755,270	764,664
Operating income	108,161	119,183	219,151	217,130
Interest expense	(3,759)	(5,484)	(8,042)	(10,973)
Other (expense) income	107	2,484	302	2,152
Income before income taxes and noncontrolling interests	104,509	116,183	211,411	208,309
Income tax expense	23,600	26,100	700	30,200
Net income from consolidated operations	80,909	90,083	210,711	178,109
Less: Net income attributable to noncontrolling interests	5,456	8,301	13,370	16,995
Net income attributable to HEICO	$ 75,453	$ 81,782	$ 197,341	$ 161,114
Net income per share attributable to HEICO shareholders:
Basic (in dollars per share)	$ 0.56	$ 0.61	$ 1.47	$ 1.21
Diluted (in dollars per share)	$ 0.55	$ 0.60	$ 1.44	$ 1.18
Weighted average number of common shares outstanding:
Basic (in shares)	134,669	133,313	134,596	133,123
Diluted (in shares)	137,117	137,206	137,269	137,092

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LONG-TERM DEBT

6 Months Ended

Apr. 30, 2020

Debt Disclosure [Abstract]

Long-term Debt [Text Block]

LONG-TERM DEBT

        Long-term debt consists of the following (in thousands):

	April 30, 2020	October 31, 2019
Borrowings under revolving credit facility	$730,000	$553,000
Finance leases and note payable	10,213	8,955
	740,213	561,955
Less: Current maturities of long-term debt	(1,025)	(906)
	$739,188	$561,049

The Company's borrowings under its revolving credit facility mature in fiscal 2023. As of April 30, 2020 and October 31 2019, the weighted average interest rate on borrowings under the Company's revolving credit facility was 1.6% and 3.0%, respectively. The revolving credit facility contains both financial and non-financial covenants. As of April 30, 2020, the Company was in compliance with all such covenants.

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LEASES

6 Months Ended

Apr. 30, 2020

Leases [Abstract]

Lessee, Operating Leases [Text Block]

LEASES        The Company’s lease arrangements primarily pertain to manufacturing facilities, office buildings, equipment, land and vehicles. The Company evaluates whether a contractual arrangement that provides it with control over the use of an asset is, or contains, a lease at the inception date. The term of a lease is inclusive of any option to renew, extend, or terminate the lease when it is reasonably certain that the Company will exercise such option. The Company classifies a lease as operating or finance using the classification criteria set forth in ASC 842. Finance leases are not material to the Company's condensed consolidated financial statements. HEICO recognizes operating lease right-of-use (“ROU”) assets and corresponding lease liabilities as of the lease commencement date based on the present value of the lease payments over the lease term. The discount rate used to calculate the present value of the Company’s leases is based on HEICO’s incremental borrowing rate and considers credit risk, the lease term and other available information as of the commencement date since the leases do not provide a readily determinable implicit rate. Variable lease payments that depend on an index or a rate are included in the determination of operating ROU assets and lease liabilities using the index or rate at the lease commencement date. Variable lease payments that do not depend on an index or rate or resulting from changes in an index or rate subsequent to the lease commencement date, are recorded as lease expense in the period in which the obligation for the payment is incurred. The Company’s operating ROU assets are increased by any prepaid lease payments and initial direct

costs and reduced by any lease incentives. The Company’s leases do not contain any material residual value guarantees or restrictive covenants.

        HEICO’s operating lease ROU assets represent its right to use an underlying asset during the lease term and its operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. HEICO’s operating lease ROU assets are included within other assets and its operating lease liabilities are included within other long-term liabilities and accrued expenses and other current liabilities in the Company’s Condensed Consolidated Balance Sheet. For additional information on the Company’s finance leases, see Note 5, Long-term Debt, of the Notes to Condensed Consolidated Financial Statements of this Quarterly Report and Note 5, Long-term Debt, and Note 3, Selected Financial Statement Information - Property, Plant and Equipment, of the Notes to Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the year ended October 31, 2019. The following table presents the Company’s operating lease ROU assets and lease liabilities as of April 30, 2020 (in thousands):

	April 30, 2020
Right-of-use assets	$60,056
Current lease liabilities	$13,365
Long-term lease liabilities	47,570
Total operating lease liabilities	$60,935

The Company’s operating lease expense is recorded as a component of cost of sales and/or selling, general, and administrative expenses in the Company’s Condensed Consolidated Statements of Operations. The following table presents the components of operating lease expense for the six and three months ended April 30, 2020 (in thousands): 

	Six months ended	Three months ended
	April 30, 2020	April 30, 2020
Operating lease expense	$8,544	$4,284
Variable lease expense	1,323	708
Total operating lease expense (1)	$9,867	$4,992

⁽¹⁾ Excludes short-term lease expense, which is not material.

The following table presents a maturity analysis of the Company's operating lease liabilities as of April 30, 2020 for the remainder of fiscal 2020 and the next five fiscal years and thereafter (in thousands):

Year ending October 31,
2020	$7,762
2021	16,101
2022	14,192
2023	8,834
2024	5,006
2025	4,136
Thereafter	18,004
Total minimum lease payments	74,035
Less: amount representing interest	(13,100)
Present value of minimum lease payments	$60,935

Prior to the adoption of ASC 842, the Company's future minimum lease payments under non-cancelable operating leases on an undiscounted basis as of October 31, 2019 were $15.5 million in fiscal 2020, $15.6 million in fiscal 2021, $13.8 million in fiscal 2022, $8.5 million in fiscal 2023, $4.7 million in fiscal 2024 and $18.8 million thereafter.

        The Company does not have any material leases that have been signed but have yet to commence as of April 30, 2020.

        The following table presents the weighted average remaining lease term and discount rate of the Company’s operating leases as of April 30, 2020:

	April 30, 2020
Weighted average remaining lease term (years)	7
Weighted average discount rate	5.2%

The following table presents supplemental disclosures of cash flow information associated with the Company's operating leases for the six months ended April 30, 2020 (in thousands):

	Six months ended
	April 30, 2020
Cash paid for amounts included in the measurement of lease liabilities	$8,448
Right-of-use assets obtained in exchange for new lease liabilities	6,824

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SELECTED FINANCIAL STATEMENT INFORMATION SELECTED FINANCIAL STATEMENT INFORMATION (Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Apr. 30, 2020	Apr. 30, 2019	Apr. 30, 2020	Apr. 30, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]
Starting accumulated other comprehensive loss			$ (16,739)
Unrealized gain			(7,104)
Amortization of unrealized loss on defined benefit pension plan, net of tax	$ 15	$ 6	39	$ 12
Ending accumulated other comprehensive loss	(23,804)		(23,804)
Foreign Currency Translation [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Starting accumulated other comprehensive loss			(14,989)
Unrealized gain			(7,104)
Ending accumulated other comprehensive loss	(22,093)		(22,093)
Pension Benefit Obligation [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Starting accumulated other comprehensive loss			(1,750)
Amortization of unrealized loss on defined benefit pension plan, net of tax			39
Ending accumulated other comprehensive loss	$ (1,711)		$ (1,711)

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SELECTED FINANCIAL STATEMENT INFORMATION (Inventories) (Details) - USD ($) $ in Thousands	Apr. 30, 2020	Oct. 31, 2019
Inventory [Line Items]
Finished products	$ 221,338	$ 199,880
Work in process	40,629	32,548
Materials, parts, assemblies and supplies	195,852	187,891
Inventories, net of valuation reserves	$ 457,819	$ 420,319

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COMMITMENTS AND CONTINGENCIES (Tables)

6 Months Ended

Apr. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of Product Warranty Liability [Table Text Block]

Changes in the Company’s product warranty liability for the six months ended April 30, 2020 and 2019, respectively, are as follows (in thousands):

	Six months ended April 30,
	2020	2019
Balances as of beginning of fiscal year	$2,810	$3,306
Accruals for warranties	1,194	1,264
Acquired warranty liabilities	50	—
Warranty claims settled	(952)	(1,543)
Balances as of April 30	$3,102	$3,027