x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Florida
|
65-0341002
|
(State or other jurisdiction of
|
(I.R.S. Employer Identification No.)
|
incorporation or organization)
|
3000 Taft Street, Hollywood, Florida
|
33021
|
(Address of principal executive offices)
|
(Zip Code)
|
Common Stock, $.01 par value
|
16,727,863 shares
|
Class A Common Stock, $.01 par value
|
24,987,301 shares
|
April 30, 2011
|
October 31, 2010
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 7,760,000 | $ | 6,543,000 | ||||
Accounts receivable, net
|
100,569,000 | 91,815,000 | ||||||
Inventories, net
|
153,676,000 | 138,215,000 | ||||||
Prepaid expenses and other current assets
|
7,006,000 | 3,769,000 | ||||||
Deferred income taxes
|
19,215,000 | 18,907,000 | ||||||
Total current assets
|
288,226,000 | 259,249,000 | ||||||
Property, plant and equipment, net
|
57,759,000 | 59,003,000 | ||||||
Goodwill
|
391,339,000 | 385,016,000 | ||||||
Intangible assets, net
|
61,395,000 | 49,487,000 | ||||||
Other assets
|
36,188,000 | 28,888,000 | ||||||
Total assets
|
$ | 834,907,000 | $ | 781,643,000 | ||||
LIABILITIES AND EQUITY
|
||||||||
Current liabilities:
|
||||||||
Current maturities of long-term debt
|
$ | 50,000 | $ | 148,000 | ||||
Trade accounts payable
|
36,722,000 | 28,604,000 | ||||||
Accrued expenses and other current liabilities
|
46,957,000 | 52,101,000 | ||||||
Income taxes payable
|
6,621,000 | 979,000 | ||||||
Total current liabilities
|
90,350,000 | 81,832,000 | ||||||
Long-term debt, net of current maturities
|
7,055,000 | 14,073,000 | ||||||
Deferred income taxes
|
45,695,000 | 45,308,000 | ||||||
Other long-term liabilities
|
38,370,000 | 30,556,000 | ||||||
Total liabilities
|
181,470,000 | 171,769,000 | ||||||
Commitments and contingencies (Note 13)
|
||||||||
Redeemable noncontrolling interests (Note 10)
|
53,955,000 | 55,048,000 | ||||||
Shareholders’ equity:
|
||||||||
Preferred Stock, $.01 par value per share; 10,000,000 shares authorized; 300,000 shares designated as Series B Junior Participating Preferred Stock and 300,000 shares designated as Series C Junior Participating Preferred Stock; none issued
|
— | — | ||||||
Common Stock, $.01 par value per share; 30,000,000 shares authorized 16,727,863 and 16,407,506 shares issued and outstanding
|
167,000 | 131,000 | ||||||
Class A Common Stock, $.01 par value per share; 30,000,000 shares authorized; 24,987,301 and 24,829,465 shares issued and outstanding
|
250,000 | 199,000 | ||||||
Capital in excess of par value
|
233,124,000 | 227,993,000 | ||||||
Accumulated other comprehensive income (loss)
|
1,743,000 | (124,000 | ) | |||||
Retained earnings
|
273,364,000 | 240,913,000 | ||||||
Total HEICO shareholders’ equity
|
508,648,000 | 469,112,000 | ||||||
Noncontrolling interests
|
90,834,000 | 85,714,000 | ||||||
Total shareholders’ equity
|
599,482,000 | 554,826,000 | ||||||
Total liabilities and equity
|
$ | 834,907,000 | $ | 781,643,000 |
Six months ended April 30,
|
Three months ended April 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net sales
|
$ | 358,705,000 | $ | 289,380,000 | $ | 184,486,000 | $ | 153,845,000 | ||||||||
Operating costs and expenses:
|
||||||||||||||||
Cost of sales
|
228,408,000 | 185,634,000 | 118,115,000 | 100,219,000 | ||||||||||||
Selling, general and administrative expenses
|
65,012,000 | 53,245,000 | 33,458,000 | 27,669,000 | ||||||||||||
Total operating costs and expenses
|
293,420,000 | 238,879,000 | 151,573,000 | 127,888,000 | ||||||||||||
Operating income
|
65,285,000 | 50,501,000 | 32,913,000 | 25,957,000 | ||||||||||||
Interest expense
|
(92,000 | ) | (286,000 | ) | (38,000 | ) | (167,000 | ) | ||||||||
Other income
|
206,000 | 423,000 | 151,000 | 268,000 | ||||||||||||
Income before income taxes and noncontrolling interests
|
65,399,000 | 50,638,000 | 33,026,000 | 26,058,000 | ||||||||||||
Income tax expense
|
20,750,000 | 17,700,000 | 10,900,000 | 9,150,000 | ||||||||||||
Net income from consolidated operations
|
44,649,000 | 32,938,000 | 22,126,000 | 16,908,000 | ||||||||||||
Less: Net income attributable to noncontrolling interests
|
10,745,000 | 8,572,000 | 5,296,000 | 4,335,000 | ||||||||||||
Net income attributable to HEICO
|
$ | 33,904,000 | $ | 24,366,000 | $ | 16,830,000 | $ | 12,573,000 | ||||||||
Net income per share attributable to HEICO shareholders:
|
||||||||||||||||
Basic
|
$ | .82 | $ | .60 | $ | .40 | $ | .31 | ||||||||
Diluted
|
$ | .80 | $ | .58 | $ | .40 | $ | .30 | ||||||||
Weighted average number of common shares outstanding:
|
||||||||||||||||
Basic
|
41,493,461 | 40,913,676 | 41,627,329 | 40,972,865 | ||||||||||||
Diluted
|
42,433,999 | 42,164,233 | 42,482,719 | 42,201,068 | ||||||||||||
Cash dividends per share
|
$ | .048 | $ | .038 | $ | — | $ | — |
HEICO Shareholders' Equity
|
||||||||||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||||||||||
Redeemable
|
Class A
|
Capital in
|
Other
|
Total
|
||||||||||||||||||||||||||||
Noncontrolling
|
Common
|
Common
|
Excess of
|
Comprehensive
|
Retained
|
Noncontrolling
|
Shareholders'
|
|||||||||||||||||||||||||
Interests
|
Stock
|
Stock
|
Par Value
|
Income (Loss)
|
Earnings
|
Interests
|
Equity
|
|||||||||||||||||||||||||
Balances as of October 31, 2010
|
$ | 55,048,000 | $ | 131,000 | $ | 199,000 | $ | 227,993,000 | $ | (124,000 | ) | $ | 240,913,000 | $ | 85,714,000 | $ | 554,826,000 | |||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||||||
Net income
|
5,625,000 | — | — | — | — | 33,904,000 | 5,120,000 | 39,024,000 | ||||||||||||||||||||||||
Foreign currency translation adjustments
|
— | — | — | — | 1,867,000 | — | — | 1,867,000 | ||||||||||||||||||||||||
Total comprehensive income
|
5,625,000 | — | — | — | 1,867,000 | 33,904,000 | 5,120,000 | 40,891,000 | ||||||||||||||||||||||||
Cash dividends ($.048 per share)
|
— | — | — | — | — | (1,990,000 | ) | — | (1,990,000 | ) | ||||||||||||||||||||||
Five-for-four common stock split
|
— | 33,000 | 50,000 | (83,000 | ) | — | (102,000 | ) | — | (102,000 | ) | |||||||||||||||||||||
Tax benefit from stock option exercises
|
— | — | — | 7,718,000 | — | — | — | 7,718,000 | ||||||||||||||||||||||||
Proceeds from stock option exercises
|
— | 3,000 | 1,000 | 1,802,000 | — | — | — | 1,806,000 | ||||||||||||||||||||||||
Stock option compensation expense
|
— | — | — | 1,128,000 | — | — | — | 1,128,000 | ||||||||||||||||||||||||
Acquisitions of noncontrolling interests
|
(7,241,000 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||
Redemptions of common stock related to stock option exercises
|
— | — | — | (5,432,000 | ) | — | — | — | (5,432,000 | ) | ||||||||||||||||||||||
Distributions to noncontrolling interests
|
(4,450,000 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||
Noncontrolling interests assumed related to acquisition
|
5,612,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Adjustments to redemption amount of redeemable noncontrolling interests
|
(639,000 | ) | — | — | — | — | 639,000 | — | 639,000 | |||||||||||||||||||||||
Other
|
— | — | — | (2,000 | ) | — | — | — | (2,000 | ) | ||||||||||||||||||||||
Balances as of April 30, 2011
|
$ | 53,955,000 | $ | 167,000 | $ | 250,000 | $ | 233,124,000 | $ | 1,743,000 | $ | 273,364,000 | $ | 90,834,000 | $ | 599,482,000 |
HEICO Shareholders' Equity
|
||||||||||||||||||||||||||||||||
Accumulated
|
||||||||||||||||||||||||||||||||
Redeemable
|
Class A
|
Capital in
|
Other
|
Total
|
||||||||||||||||||||||||||||
Noncontrolling
|
Common
|
Common
|
Excess of
|
Comprehensive
|
Retained
|
Noncontrolling
|
Shareholders'
|
|||||||||||||||||||||||||
Interests
|
Stock
|
Stock
|
Par Value
|
Income (Loss)
|
Earnings
|
Interests
|
Equity
|
|||||||||||||||||||||||||
Balances as of October 31, 2009
|
$ | 56,937,000 | $ | 104,000 | $ | 157,000 | $ | 224,625,000 | $ | (1,381,000 | ) | $ | 189,485,000 | $ | 77,668,000 | $ | 490,658,000 | |||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||||||
Net income
|
4,668,000 | — | — | — | — | 24,366,000 | 3,904,000 | 28,270,000 | ||||||||||||||||||||||||
Foreign currency translation adjustments
|
— | — | — | — | 1,512,000 | — | — | 1,512,000 | ||||||||||||||||||||||||
Total comprehensive income
|
4,668,000 | — | — | — | 1,512,000 | 24,366,000 | 3,904,000 | 29,782,000 | ||||||||||||||||||||||||
Cash dividends ($.038 per share)
|
— | — | — | — | — | (1,570,000 | ) | — | (1,570,000 | ) | ||||||||||||||||||||||
Five-for-four common stock split
|
— | 26,000 | 40,000 | (66,000 | ) | — | (68,000 | ) | — | (68,000 | ) | |||||||||||||||||||||
Tax benefit from stock option exercises
|
— | — | — | 952,000 | — | — | — | 952,000 | ||||||||||||||||||||||||
Proceeds from stock option exercises
|
— | 1,000 | 1,000 | 1,383,000 | — | — | — | 1,385,000 | ||||||||||||||||||||||||
Stock option compensation expense
|
— | — | — | 610,000 | — | — | — | 610,000 | ||||||||||||||||||||||||
Acquisitions of noncontrolling interests
|
(727,000 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||
Redemptions of common stock related to stock option exercises
|
— | — | — | (353,000 | ) | — | — | — | (353,000 | ) | ||||||||||||||||||||||
Distributions to noncontrolling interests
|
(4,446,000 | ) | — | — | — | — | — | — | — | |||||||||||||||||||||||
Adjustments to redemption amount of redeemable noncontrolling interests
|
(311,000 | ) | — | — | — | — | 311,000 | — | 311,000 | |||||||||||||||||||||||
Other
|
— | — | — | (1,000 | ) | 4,000 | — | — | 3,000 | |||||||||||||||||||||||
Balances as of April 30, 2010
|
$ | 56,121,000 | $ | 131,000 | $ | 198,000 | $ | 227,150,000 | $ | 135,000 | $ | 212,524,000 | $ | 81,572,000 | $ | 521,710,000 |
Six months ended April 30,
|
||||||||
2011
|
2010
|
|||||||
Operating Activities:
|
||||||||
Net income from consolidated operations
|
$ | 44,649,000 | $ | 32,938,000 | ||||
Adjustments to reconcile net income from consolidated operations to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
8,891,000 | 8,878,000 | ||||||
Impairment of intangible assets
|
— | 281,000 | ||||||
Deferred income tax provision
|
242,000 | 610,000 | ||||||
Tax benefit from stock option exercises
|
7,718,000 | 952,000 | ||||||
Excess tax benefit from stock option exercises
|
(6,358,000 | ) | (670,000 | ) | ||||
Stock option compensation expense
|
1,128,000 | 610,000 | ||||||
Changes in operating assets and liabilities, net of acquisitions:
|
||||||||
(Increase) decrease in accounts receivable
|
(3,597,000 | ) | 1,863,000 | |||||
Increase in inventories
|
(6,153,000 | ) | (184,000 | ) | ||||
Increase in prepaid expenses and other current assets
|
(2,777,000 | ) | (1,435,000 | ) | ||||
Increase (decrease) in trade accounts payable
|
4,119,000 | (614,000 | ) | |||||
Decrease in accrued expenses and other current liabilities
|
(2,969,000 | ) | (2,250,000 | ) | ||||
Increase (decrease) in income taxes payable
|
5,985,000 | (688,000 | ) | |||||
Other
|
203,000 | (28,000 | ) | |||||
Net cash provided by operating activities
|
51,081,000 | 40,263,000 | ||||||
Investing Activities:
|
||||||||
Acquisitions, net of cash acquired
|
(27,936,000 | ) | (36,189,000 | ) | ||||
Capital expenditures
|
(3,845,000 | ) | (4,600,000 | ) | ||||
Other
|
3,000 | (2,000 | ) | |||||
Net cash used in investing activities
|
(31,778,000 | ) | (40,791,000 | ) | ||||
Financing Activities:
|
||||||||
Payments on revolving credit facility
|
(35,000,000 | ) | (28,000,000 | ) | ||||
Borrowings on revolving credit facility
|
28,000,000 | 37,000,000 | ||||||
Acquisitions of noncontrolling interests
|
(7,241,000 | ) | (727,000 | ) | ||||
Redemptions of common stock related to stock option exercises
|
(5,432,000 | ) | (353,000 | ) | ||||
Distributions to noncontrolling interests
|
(4,450,000 | ) | (4,446,000 | ) | ||||
Cash dividends paid
|
(2,092,000 | ) | (1,638,000 | ) | ||||
Excess tax benefit from stock option exercises
|
6,358,000 | 670,000 | ||||||
Proceeds from stock option exercises
|
1,806,000 | 1,385,000 | ||||||
Other
|
(125,000 | ) | (102,000 | ) | ||||
Net cash (used in) provided by financing activities
|
(18,176,000 | ) | 3,789,000 | |||||
Effect of exchange rate changes on cash
|
90,000 | 97,000 | ||||||
Net increase in cash and cash equivalents
|
1,217,000 | 3,358,000 | ||||||
Cash and cash equivalents at beginning of year
|
6,543,000 | 7,167,000 | ||||||
Cash and cash equivalents at end of period
|
$ | 7,760,000 | $ | 10,525,000 |
April 30, 2011
|
October 31, 2010
|
|||||||
Accounts receivable
|
$ | 102,970,000 | $ | 94,283,000 | ||||
Less: Allowance for doubtful accounts
|
(2,401,000 | ) | (2,468,000 | ) | ||||
Accounts receivable, net
|
$ | 100,569,000 | $ | 91,815,000 |
April 30, 2011
|
October 31, 2010
|
|||||||
Costs incurred on uncompleted contracts
|
$ | 5,972,000 | $ | 6,323,000 | ||||
Estimated earnings
|
5,846,000 | 7,603,000 | ||||||
11,818,000 | 13,926,000 | |||||||
Less: Billings to date
|
(7,699,000 | ) | (8,967,000 | ) | ||||
$ | 4,119,000 | $ | 4,959,000 | |||||
Included in the accompanying Condensed Consolidated
|
||||||||
Balance Sheets under the following captions:
|
||||||||
Accounts receivable, net (costs and estimated earnings in excess of billings)
|
$ | 4,119,000 | $ | 5,135,000 | ||||
Accrued expenses and other current liabilities
|
||||||||
(billings in excess of costs and estimated earnings)
|
— | (176,000 | ) | |||||
$ | 4,119,000 | $ | 4,959,000 |
April 30, 2011
|
October 31, 2010
|
|||||||
Finished products
|
$ | 82,601,000 | $ | 72,263,000 | ||||
Work in process
|
23,171,000 | 19,034,000 | ||||||
Materials, parts, assemblies and supplies
|
47,904,000 | 46,918,000 | ||||||
Inventories, net of valuation reserves
|
$ | 153,676,000 | $ | 138,215,000 |
April 30, 2011
|
October 31, 2010
|
|||||||
Land
|
$ | 3,656,000 | $ | 3,656,000 | ||||
Buildings and improvements
|
39,480,000 | 38,772,000 | ||||||
Machinery, equipment and tooling
|
88,687,000 | 85,095,000 | ||||||
Construction in progress
|
5,657,000 | 6,319,000 | ||||||
137,480,000 | 133,842,000 | |||||||
Less: Accumulated depreciation and amortization
|
(79,721,000 | ) | (74,839,000 | ) | ||||
Property, plant and equipment, net
|
$ | 57,759,000 | $ | 59,003,000 |
Segment
|
Consolidated
|
|||||||||||
FSG
|
ETG
|
Totals
|
||||||||||
Balances as of October 31, 2010
|
$ | 188,459,000 | $ | 196,557,000 | $ | 385,016,000 | ||||||
Goodwill acquired
|
3,898,000 | — | 3,898,000 | |||||||||
Accrued additional purchase consideration
|
— | 1,278,000 | 1,278,000 | |||||||||
Foreign currency translation adjustments
|
— | 1,147,000 | 1,147,000 | |||||||||
Balances as of April 30, 2011
|
$ | 192,357,000 | $ | 198,982,000 | $ | 391,339,000 |
As of April 30, 2011
|
As of October 31, 2010
|
|||||||||||||||||||||||
Gross
|
Net
|
Gross
|
Net
|
|||||||||||||||||||||
Carrying
|
Accumulated
|
Carrying
|
Carrying
|
Accumulated
|
Carrying
|
|||||||||||||||||||
Amount
|
Amortization
|
Amount
|
Amount
|
Amortization
|
Amount
|
|||||||||||||||||||
Amortizing Assets:
|
||||||||||||||||||||||||
Customer relationships
|
$ | 46,813,000 | $ | (15,125,000 | ) | $ | 31,688,000 | $ | 37,338,000 | $ | (12,142,000 | ) | $ | 25,196,000 | ||||||||||
Intellectual property
|
7,402,000 | (1,840,000 | ) | 5,562,000 | 7,281,000 | (1,372,000 | ) | 5,909,000 | ||||||||||||||||
Licenses
|
2,900,000 | (721,000 | ) | 2,179,000 | 1,000,000 | (621,000 | ) | 379,000 | ||||||||||||||||
Non-compete agreements
|
1,378,000 | (1,121,000 | ) | 257,000 | 1,170,000 | (1,019,000 | ) | 151,000 | ||||||||||||||||
Patents
|
575,000 | (294,000 | ) | 281,000 | 554,000 | (270,000 | ) | 284,000 | ||||||||||||||||
Trade names
|
569,000 | (168,000 | ) | 401,000 | 569,000 | (112,000 | ) | 457,000 | ||||||||||||||||
59,637,000 | (19,269,000 | ) | 40,368,000 | 47,912,000 | (15,536,000 | ) | 32,376,000 | |||||||||||||||||
Non-Amortizing Assets:
|
||||||||||||||||||||||||
Trade names
|
21,027,000 | — | 21,027,000 | 17,111,000 | — | 17,111,000 | ||||||||||||||||||
$ | 80,664,000 | $ | (19,269,000 | ) | $ | 61,395,000 | $ | 65,023,000 | $ | (15,536,000 | ) | $ | 49,487,000 |
April 30, 2011
|
October 31, 2010
|
|||||||
Borrowings under revolving credit facility
|
$ | 7,000,000 | $ | 14,000,000 | ||||
Notes payable and capital leases
|
105,000 | 221,000 | ||||||
7,105,000 | 14,221,000 | |||||||
Less: Current maturities of long-term debt
|
(50,000 | ) | (148,000 | ) | ||||
$ | 7,055,000 | $ | 14,073,000 |
Balance as of October 31, 2010
|
$ | 2,306,000 | ||
Increases related to prior year tax positions
|
104,000 | |||
Increases related to current year tax positions
|
291,000 | |||
Balance as of April 30, 2011
|
$ | 2,701,000 |
As of April 30, 2011
|
||||||||||||||||
Quoted Prices
|
Significant
|
Significant
|
||||||||||||||
in Active Markets
|
Other Observable
|
Unobservable
|
||||||||||||||
for Identical Assets
|
Inputs
|
Inputs
|
||||||||||||||
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
Deferred compensation plans:
|
||||||||||||||||
Corporate owned life insurance
|
$ | — | $ | 29,090,000 | $ | — | $ | 29,090,000 | ||||||||
Equity securities
|
1,973,000 | — | — | 1,973,000 | ||||||||||||
Money market funds and cash
|
922,000 | — | — | 922,000 | ||||||||||||
Mutual funds
|
1,102,000 | — | — | 1,102,000 | ||||||||||||
Other
|
— | 408,000 | 579,000 | 987,000 | ||||||||||||
Total assets
|
$ | 3,997,000 | $ | 29,498,000 | $ | 579,000 | $ | 34,074,000 | ||||||||
Liabilities:
|
||||||||||||||||
Contingent consideration
|
$ | — | $ | — | $ | 1,150,000 | $ | 1,150,000 |
As of October 31, 2010
|
||||||||||||||||
Quoted Prices
|
Significant
|
Significant
|
||||||||||||||
in Active Markets
|
Other Observable
|
Unobservable
|
||||||||||||||
for Identical Assets
|
Inputs
|
Inputs
|
||||||||||||||
(Level 1)
|
(Level 2)
|
(Level 3)
|
Total
|
|||||||||||||
Assets:
|
||||||||||||||||
Deferred compensation plans:
|
||||||||||||||||
Corporate owned life insurance
|
$ | — | $ | 22,908,000 | $ | — | $ | 22,908,000 | ||||||||
Equity securities
|
1,267,000 | — | — | 1,267,000 | ||||||||||||
Money market funds and cash
|
1,165,000 | — | — | 1,165,000 | ||||||||||||
Mutual funds
|
1,002,000 | — | — | 1,002,000 | ||||||||||||
Other
|
— | 545,000 | — | 545,000 | ||||||||||||
Total assets
|
$ | 3,434,000 | $ | 23,453,000 | $ | — | $ | 26,887,000 | ||||||||
Liabilities:
|
||||||||||||||||
Contingent consideration
|
$ | — | $ | — | $ | 1,150,000 | $ | 1,150,000 |
Balance as of October 31, 2010
|
$ | — | ||
Purchases
|
550,000 | |||
Total unrealized gains
|
29,000 | |||
Balance as of April 30, 2011
|
$ | 579,000 |
Six months ended April 30,
|
Three months ended April 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Numerator:
|
||||||||||||||||
Net income attributable to HEICO
|
$ | 33,904,000 | $ | 24,366,000 | $ | 16,830,000 | $ | 12,573,000 | ||||||||
Denominator:
|
||||||||||||||||
Weighted average common shares outstanding-basic
|
41,493,461 | 40,913,676 | 41,627,329 | 40,972,865 | ||||||||||||
Effect of dilutive stock options
|
940,538 | 1,250,557 | 855,390 | 1,228,203 | ||||||||||||
Weighted average common shares outstanding-diluted
|
42,433,999 | 42,164,233 | 42,482,719 | 42,201,068 | ||||||||||||
Net income per share attributable to HEICO shareholders:
|
||||||||||||||||
Basic
|
$ | .82 | $ | .60 | $ | .40 | $ | .31 | ||||||||
Diluted
|
$ | .80 | $ | .58 | $ | .40 | $ | .30 | ||||||||
Anti-dilutive stock options excluded
|
396,563 | 541,016 | 523,125 | 539,063 |
Other,
|
||||||||||||||||
Primarily
|
||||||||||||||||
Segment
|
Corporate and
|
Consolidated
|
||||||||||||||
FSG
|
ETG
|
Intersegment
|
Totals
|
|||||||||||||
Six months ended April 30, 2011:
|
||||||||||||||||
Net sales
|
$ | 254,445,000 | $ | 105,311,000 | $ | (1,051,000 | ) | $ | 358,705,000 | |||||||
Depreciation and amortization
|
5,014,000 | 3,687,000 | 190,000 | 8,891,000 | ||||||||||||
Operating income
|
43,834,000 | 29,183,000 | (7,732,000 | ) | 65,285,000 | |||||||||||
Capital expenditures
|
2,963,000 | 878,000 | 4,000 | 3,845,000 | ||||||||||||
Six months ended April 30, 2010:
|
||||||||||||||||
Net sales
|
$ | 196,822,000 | $ | 93,124,000 | $ | (566,000 | ) | $ | 289,380,000 | |||||||
Depreciation and amortization
|
4,974,000 | 3,706,000 | 198,000 | 8,878,000 | ||||||||||||
Operating income
|
32,775,000 | 24,763,000 | (7,037,000 | ) | 50,501,000 | |||||||||||
Capital expenditures
|
3,817,000 | 780,000 | 3,000 | 4,600,000 | ||||||||||||
Three months ended April 30, 2011:
|
||||||||||||||||
Net sales
|
$ | 133,804,000 | $ | 51,372,000 | $ | (690,000 | ) | $ | 184,486,000 | |||||||
Depreciation and amortization
|
2,636,000 | 1,853,000 | 95,000 | 4,584,000 | ||||||||||||
Operating income
|
23,405,000 | 13,645,000 | (4,137,000 | ) | 32,913,000 | |||||||||||
Capital expenditures
|
1,678,000 | 527,000 | 3,000 | 2,208,000 | ||||||||||||
Three months ended April 30, 2010:
|
||||||||||||||||
Net sales
|
$ | 103,043,000 | $ | 51,066,000 | $ | (264,000 | ) | $ | 153,845,000 | |||||||
Depreciation and amortization
|
2,510,000 | 2,018,000 | 99,000 | 4,627,000 | ||||||||||||
Operating income
|
16,055,000 | 13,593,000 | (3,691,000 | ) | 25,957,000 | |||||||||||
Capital expenditures
|
1,868,000 | 574,000 | — | 2,442,000 |
Other,
|
||||||||||||||||
Segment
|
Primarily
|
Consolidated
|
||||||||||||||
FSG
|
ETG
|
Corporate
|
Totals
|
|||||||||||||
Total assets as of April 30, 2011
|
$ | 456,136,000 | $ | 327,834,000 | $ | 50,937,000 | $ | 834,907,000 | ||||||||
Total assets as of October 31, 2010
|
410,666,000 | 328,577,000 | 42,400,000 | 781,643,000 |
Six months ended April 30,
|
||||||||
2011
|
2010
|
|||||||
Balances as of beginning of fiscal year
|
$ | 1,636,000 | $ | 1,022,000 | ||||
Accruals for warranties
|
602,000 | 850,000 | ||||||
Warranty claims settled
|
(414,000 | ) | (570,000 | ) | ||||
Acquired warranty liabilities
|
— | 80,000 | ||||||
Balances as of April 30
|
$ | 1,824,000 | $ | 1,382,000 |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Six months ended April 30,
|
Three months ended April 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net sales
|
$ | 358,705,000 | $ | 289,380,000 | $ | 184,486,000 | $ | 153,845,000 | ||||||||
Cost of sales
|
228,408,000 | 185,634,000 | 118,115,000 | 100,219,000 | ||||||||||||
Selling, general and administrative expenses
|
65,012,000 | 53,245,000 | 33,458,000 | 27,669,000 | ||||||||||||
Total operating costs and expenses
|
293,420,000 | 238,879,000 | 151,573,000 | 127,888,000 | ||||||||||||
Operating income
|
$ | 65,285,000 | $ | 50,501,000 | $ | 32,913,000 | $ | 25,957,000 | ||||||||
Net sales by segment:
|
||||||||||||||||
Flight Support Group
|
$ | 254,445,000 | $ | 196,822,000 | $ | 133,804,000 | $ | 103,043,000 | ||||||||
Electronic Technologies Group
|
105,311,000 | 93,124,000 | 51,372,000 | 51,066,000 | ||||||||||||
Intersegment sales
|
(1,051,000 | ) | (566,000 | ) | (690,000 | ) | (264,000 | ) | ||||||||
$ | 358,705,000 | $ | 289,380,000 | $ | 184,486,000 | $ | 153,845,000 | |||||||||
Operating income by segment:
|
||||||||||||||||
Flight Support Group
|
$ | 43,834,000 | $ | 32,775,000 | $ | 23,405,000 | $ | 16,055,000 | ||||||||
Electronic Technologies Group
|
29,183,000 | 24,763,000 | 13,645,000 | 13,593,000 | ||||||||||||
Other, primarily corporate
|
(7,732,000 | ) | (7,037,000 | ) | (4,137,000 | ) | (3,691,000 | ) | ||||||||
$ | 65,285,000 | $ | 50,501,000 | $ | 32,913,000 | $ | 25,957,000 | |||||||||
Net sales
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Gross profit
|
36.3 | % | 35.9 | % | 36.0 | % | 34.9 | % | ||||||||
Selling, general and administrative expenses
|
18.1 | % | 18.4 | % | 18.1 | % | 18.0 | % | ||||||||
Operating income
|
18.2 | % | 17.5 | % | 17.8 | % | 16.9 | % | ||||||||
Interest expense
|
— | .1 | % | — | .1 | % | ||||||||||
Other income
|
.1 | % | .1 | % | .1 | % | .2 | % | ||||||||
Income tax expense
|
5.8 | % | 6.1 | % | 5.9 | % | 5.9 | % | ||||||||
Net income attributable to noncontrolling interests
|
3.0 | % | 3.0 | % | 2.9 | % | 2.8 | % | ||||||||
Net income attributable to HEICO
|
9.5 | % | 8.4 | % | 9.1 | % | 8.2 | % |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
CONTROLS AND PROCEDURES
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
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
|
XBRL Instance Document. ^
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document. ^
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document. ^
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document. ^
|
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document. ^
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document. ^
|
|
*
|
Filed herewith.
|
|
**
|
Furnished herewith.
|
^
|
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under those sections.
|
HEICO CORPORATION
|
||
Date: May 31, 2011
|
By:
|
/s/ THOMAS S. IRWIN
|
Thomas S. Irwin
|
||
Executive Vice President and
|
||
Chief Financial Officer
|
||
(Principal Financial and
|
||
Accounting Officer)
|
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
|
XBRL Instance Document.
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document.
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
(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 31, 2011
|
/s/ LAURANS A. MENDELSON
|
Laurans A. Mendelson
|
|
Chief Executive Officer
|
|
(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 31, 2011
|
/s/ THOMAS S. IRWIN
|
Thomas S. Irwin
|
|
Chief Financial Officer
|
|
(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 31, 2011
|
/s/ LAURANS A. MENDELSON
|
Laurans A. Mendelson
|
|
Chief Executive Officer
|
|
(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 31, 2011
|
/s/ THOMAS S. IRWIN
|
Thomas S. Irwin
|
|
Chief Financial Officer
|
CONDENSED CONSOLIDATED BALANCE SHEETS [PARENTHETICAL] (USD $)
|
Apr. 30, 2011
|
Oct. 31, 2010
|
---|---|---|
Preferred Stock, par value | $ 0.01 | $ 0.01 |
Preferred Stock, share authorized | 10,000,000 | 10,000,000 |
Preferred Stock, share issued | 0 | 0 |
Common Stock
|
 |  |
Common Stock, par value | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 30,000,000 | 30,000,000 |
Common Stock, shares issued | 16,727,863 | 16,407,506 |
Common stock, shares outstanding | 16,727,863 | 16,407,506 |
Class A Common Stock
|
 |  |
Common Stock, par value | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 30,000,000 | 30,000,000 |
Common Stock, shares issued | 24,987,301 | 24,829,465 |
Common stock, shares outstanding | 24,987,301 | 24,829,465 |
Series B Junior Participating Preferred Stock
|
 |  |
Preferred Stock, share authorized | 300,000 | 300,000 |
Preferred Stock, share issued | 0 | 0 |
Series C Junior Participating Preferred Stock
|
 |  |
Preferred Stock, share authorized | 300,000 | 300,000 |
Preferred Stock, share issued | 0 | 0 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2011
|
Apr. 30, 2010
|
Apr. 30, 2011
|
Apr. 30, 2010
|
|
Net sales | $ 184,486,000 | $ 153,845,000 | $ 358,705,000 | $ 289,380,000 |
Operating costs and expenses: | Â | Â | Â | Â |
Cost of sales | 118,115,000 | 100,219,000 | 228,408,000 | 185,634,000 |
Selling, general and administrative expenses | 33,458,000 | 27,669,000 | 65,012,000 | 53,245,000 |
Total operating costs and expenses | 151,573,000 | 127,888,000 | 293,420,000 | 238,879,000 |
Operating income | 32,913,000 | 25,957,000 | 65,285,000 | 50,501,000 |
Interest expense | (38,000) | (167,000) | (92,000) | (286,000) |
Other income | 151,000 | 268,000 | 206,000 | 423,000 |
Income before income taxes and noncontrolling interests | 33,026,000 | 26,058,000 | 65,399,000 | 50,638,000 |
Income tax expense | 10,900,000 | 9,150,000 | 20,750,000 | 17,700,000 |
Net income from consolidated operations | 22,126,000 | 16,908,000 | 44,649,000 | 32,938,000 |
Less: Net income attributable to noncontrolling interests | 5,296,000 | 4,335,000 | 10,745,000 | 8,572,000 |
Net income attributable to HEICO | $ 16,830,000 | $ 12,573,000 | $ 33,904,000 | $ 24,366,000 |
Net income per share attributable to HEICO shareholders: | Â | Â | Â | Â |
Basic | $ 0.40 | $ 0.31 | $ 0.82 | $ 0.60 |
Diluted | $ 0.40 | $ 0.30 | $ 0.80 | $ 0.58 |
Weighted average number of common shares outstanding: | Â | Â | Â | Â |
Basic | 41,627,329 | 40,972,865 | 41,493,461 | 40,913,676 |
Diluted | 42,482,719 | 42,201,068 | 42,433,999 | 42,164,233 |
Cash dividends per share | $ 0 | $ 0 | $ 0.048 | $ 0.038 |
Document And Entity Information
|
3 Months Ended | ||
---|---|---|---|
Apr. 30, 2011
|
May 24, 2011
Common Stock
|
May 24, 2011
Class A Common Stock
|
|
Entity Registrant Name | HEICO CORP | Â | Â |
Entity Central Index Key | 0000046619 | Â | Â |
Current Fiscal Year End Date | --10-31 | Â | Â |
Entity Filer Category | Large Accelerated Filer | Â | Â |
Trading Symbol | hei | Â | Â |
Entity Common Stock, Shares Outstanding | Â | 16,727,863 | 24,987,301 |
Document Type | 10-Q | Â | Â |
Amendment Flag | false | Â | Â |
Document Period End Date | Apr. 30, 2011 | ||
Document Fiscal Period Focus | Q2 | Â | Â |
Document Fiscal Year Focus | 2011 | Â | Â |
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LONG-TERM DEBT
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | Â | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt [Text Block] | 5. LONG-TERM DEBT
Long-term debt consists of the following:
As of April 30, 2011 and October 31, 2010, the weighted average interest rate on borrowings under the Company’s $300 million revolving credit facility was .9% as of each date. The revolving credit facility contains both financial and non-financial covenants. As of April 30, 2011, the Company was in compliance with all such covenants.
|
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