SELECTED FINANCIAL STATEMENT INFORMATION

12 Months Ended

Oct. 31, 2021

Selected Financial Statement Information [Abstract]

Additional Financial Information Disclosure [Text Block]

SELECTED FINANCIAL STATEMENT INFORMATION

Accounts Receivable

	As of October 31,
(in thousands)	2021	2020
Accounts receivable	$255,793	$223,171
Less: Allowance for doubtful accounts	(10,874)	(12,738)
Accounts receivable, net	$244,919	$210,433

Inventories

	As of October 31,
(in thousands)	2021	2020
Finished products	$238,867	$235,501
Work in process	44,887	37,957
Materials, parts, assemblies and supplies	194,296	189,747
Inventories, net of valuation reserves	$478,050	$463,205

Property, Plant and Equipment

	As of October 31,
(in thousands)	2021	2020
Land	$11,363	$6,678
Buildings and improvements	134,150	120,769
Machinery, equipment and tooling	297,297	265,408
Construction in progress	7,784	8,487
	450,594	401,342
Less: Accumulated depreciation and amortization	(256,956)	(232,494)
Property, plant and equipment, net	$193,638	$168,848

The amounts set forth above include tooling costs having a net book value of $6.8 million and $8.3 million as of October 31, 2021 and 2020, respectively. Amortization expense on capitalized tooling was $2.8 million, $3.2 million and $3.1 million in fiscal 2021, 2020 and 2019, respectively.

Depreciation and amortization expense, exclusive of tooling, on property, plant and equipment was $27.8 million, $27.1 million and $25.8 million in fiscal 2021, 2020 and 2019, respectively.

Accrued Expenses and Other Current Liabilities

	As of October 31,
(in thousands)	2021	2020
Accrued employee compensation and related payroll taxes	$121,200	$83,055
Contract liabilities	32,738	25,631
Accrued customer rebates and credits	13,237	15,813
Current operating lease liabilities	13,874	14,180
Other	25,808	23,553
Accrued expenses and other current liabilities	$206,857	$162,232

    The increase in accrued employee compensation and related payroll taxes principally reflects a lower level of accrued performance-based compensation expense in fiscal 2020 resulting from lower consolidated operating results mainly attributable to the Pandemic. The total customer rebates and credits deducted within net sales in fiscal 2021, 2020 and 2019 was $3.3 million, $4.6 million and $9.0 million, respectively.

Other Long-Term Assets and Liabilities

    The Company provides eligible employees, officers and directors of the Company the opportunity to voluntarily defer base salary, bonus payments, commissions, long-term incentive awards and directors fees, as applicable, on a pre-tax basis through the HEICO Corporation Leadership Compensation Plan (“LCP”), a nonqualified deferred compensation plan that

conforms to Section 409A of the Internal Revenue Code. The Company matches 50% of the first 6% of base salary deferred by each participant. Director fees that would otherwise be payable in Company common stock may be deferred into the LCP, and, when distributable, are distributed in actual shares of Company common stock. The deferred compensation obligation associated with Company common stock is recorded as a component of shareholders’ equity at cost and subsequent changes in fair value are not reflected in operations or shareholders’ equity of the Company. Further, while the Company has no obligation to do so, the LCP also provides the Company the opportunity to make discretionary contributions. The Company’s matching contributions and any discretionary contributions are subject to vesting and forfeiture provisions set forth in the LCP. Company contributions to the LCP charged to income in fiscal 2021, 2020 and 2019 totaled $7.1 million, $4.7 million and $6.1 million, respectively. The aggregate liabilities of the LCP were $244.3 million and $178.3 million as of October 31, 2021 and 2020, respectively, and are classified within other long-term liabilities and accrued expenses and other current liabilities in the Company’s Consolidated Balance Sheets. The assets of the LCP, totaling $245.6 million and $180.1 million as of October 31, 2021 and 2020, respectively, are classified within other assets in the Company's Consolidated Balance Sheets and principally represent cash surrender values of life insurance policies that are held within an irrevocable trust that may be used to satisfy the obligations of the LCP. Additional information regarding the assets of the LCP may be found in Note 8, Fair Value Measurements.

Research and Development Expenses

    The amount of new product research and development ("R&D") expenses included in cost of sales is as follows (in thousands):

	Year ended October 31,
	2021	2020	2019
R&D expenses	$68,877	$65,559	$66,630

Accumulated Other Comprehensive Loss

    Changes in the components of accumulated other comprehensive loss during fiscal 2021 and 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 gain (loss)	8,529	(1,012)	7,517
Amortization of unrealized loss	—	73	73
Balances as of October 31, 2020	(6,460)	(2,689)	(9,149)
Unrealized (loss) gain	(529)	991	462
Amortization of unrealized loss	—	135	135
Balances as of October 31, 2021	($6,989)	($1,563)	($8,552)