SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Act of 1934
Date of Report (Date of earliest event reported): September 14, 2000
HEICO CORPORATION
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(Exact name of registrant as specified in its charter)
FLORIDA
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(State or other jurisdiction of incorporation)
001-04604 65-0341002
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(Commission File Number) (IRS Employer Identification No.)
3000 Taft Street
Hollywood, Florida 33021
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(Address of principal offices)
Registrant's telephone number, including area code: (954) 987-6101
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(Former name or former address, if changed since last report.)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On September 14, 2000, HEICO Aviation Products Corp. ("HAPC"), a
Florida corporation and wholly-owned subsidiary of HEICO Corporation (the
"Registrant"), consummated the sale of all of the outstanding capital stock of
HAPC's wholly-owned subsidiary Trilectron Industries, Inc. ("Trilectron"), to
Hobart Brothers Company, an Ohio corporation and wholly-owned subsidiary of
Illinois Tool Works Inc. ("Hobart"), pursuant to a Stock Purchase Agreement,
dated August 1, 2000, as amended, (the "Stock Purchase Agreement"), between
HAPC and Hobart. In consideration of the sale of Trilectron's capital stock,
including its 40% investment in the outstanding capital stock of R. H. Phillips
and Sons Engineers, LTD., HAPC received $52,500,000 in cash, an unsecured
promissory note for $12,000,000 payable in three equal installments over the
next 90 days and retained property having a book value of approximately $1.5
million. The purchase price will be adjusted based on the net worth of
Trilectron as of the closing date. The proceeds from the sale will be used to
pay down the outstanding balance on the Registrant's $120 million revolving
credit facility.
Item 7. Financial Statements and Exhibits.
(a) Not applicable.
(b) Pro forma financial information.
The following unaudited pro forma consolidated condensed financial
information is furnished in accordance with Article 11 of
Regulation S-X:
Introductory note to unaudited pro forma consolidated condensed
financial statements (page 5).
Unaudited pro forma consolidated condensed balance sheet as of July
31, 2000 (page 6).
Unaudited pro forma consolidated condensed statement of operations
for the nine months ended July 31, 2000 (page 7).
Unaudited pro forma consolidated condensed statement of operations
for the year ended October 31, 1999 (page 8).
Notes to unaudited pro forma consolidated condensed financial
statements (page 9).
(c) Exhibits
2.1 Stock Purchase Agreement, dated August 1, 2000, by and
between HEICO Aviation Products Corp., and Hobart Brothers
Company. The Registrant hereby agrees to furnish the
Securities and Exchange Commission, supplementally, any
schedules or exhibits to such agreement which are not filed
herewith, upon the request of the Securities and Exchange
Commission.
2.2 First Amendment to Stock Purchase Agreement, effective as of
September 14, 2000, between HEICO Aviation Products Corp. and
Hobart Brothers Company.
99.1 Press Release of HEICO Corporation, dated August 14, 2000.
99.2 Press Release of HEICO Corporation, dated September 18, 2000.
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<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
HEICO CORPORATION
By: /s/ Thomas S. Irwin
----------------------------------
Name: Thomas S. Irwin
Title: Executive Vice President and
Chief Financial Officer
Date: September 22, 2000
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<PAGE>
FINANCIAL STATEMENT INDEX
Introductory note to unaudited pro forma consolidated condensed financial
statements (page 5).
Unaudited pro forma consolidated condensed balance sheet as of July 31, 2000
(page 6).
Unaudited pro forma consolidated condensed statement of operations for the nine
months ended July 31, 2000 (page 7).
Unaudited pro forma consolidated condensed statement of operations for the year
ended October 31, 1999 (page 8).
Notes to unaudited pro forma consolidated condensed financial statements (page
9).
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<PAGE>
HEICO CORPORATION AND SUBSIDIARIES
INTRODUCTORY NOTE TO UNAUDITED
PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated condensed balance sheet and
statements of operations utilize the historical financial condition and results
of operations of HEICO Corporation and subsidiaries (the "Company") as of July
31, 2000 and for the nine months then ended and for the year ended October 31,
1999. The unaudited pro forma consolidated condensed financial statements have
been prepared on the basis summarized below:
o The unaudited pro forma consolidated condensed balance sheet as of
July 31, 2000 assumes that the Company's sale of all of the
outstanding capital stock of its wholly-owned subsidiary, Trilectron
Industries, Inc. ("Trilectron") including its 40% investment in the
outstanding capital stock of R. H. Phillips and Sons Engineers, LTD.
("Phillips") had been consummated as of that date.
o The unaudited pro forma consolidated condensed statement of
operations for the nine months ended July 31, 2000 assumes that the
Company's sale of all of the outstanding capital stock of Trilectron
including its 40% investment in the outstanding capital stock of
Phillips had been consummated as of the beginning of the nine-month
period ended July 31, 2000.
o The unaudited pro forma consolidated condensed statements of
operations for the year ended October 31, 1999 assumes that the
Company's sale of all of the outstanding capital stock of Trilectron
including its 40% investment in the outstanding capital stock of
Phillips had been consummated as of the beginning of the year ended
October 31, 1999.
As a result of the sale, the Company will report a net gain of approximately
$10.6 million, after taxes, in the fourth quarter of fiscal 2000. This gain is
not reflected in the pro forma condensed statements of operations presented.
The unaudited pro forma consolidated condensed statements of operations are not
necessarily indicative of actual operating results had the sale been made at the
beginning of the periods presented or of future results of operations.
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<PAGE>
HEICO CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
as of July 31, 2000
(unaudited)
<TABLE>
<CAPTION>
Historical
Historical Trilectron
HEICO Industries, Pro Forma
Corporation(1) Inc.(2) Adjustments Pro Forma
-------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $2,304,000 $332,000 -- $2,636,000
Accounts receivable, net 52,241,000 (21,459,000) -- 30,782,000
Receivable from Hobart -- -- $16,749,000(7) 16,749,000
Inventories 51,564,000 (17,805,000) -- 33,759,000
Prepaid expenses and other current assets 4,517,000 (185,000) -- 4,332,000
Deferred income taxes 1,594,000 (169,000) -- 1,425,000
------------ ------------ ------------ ------------
Total current assets 112,220,000 (39,286,000) 16,749,000 89,683,000
Property, plant and equipment, net 33,824,000 (6,890,000) -- 26,934,000
Intangible assets, net 157,533,000 (4,337,000) -- 153,196,000
Long-term investments 4,532,000 -- -- 4,532,000
Other assets 9,232,000 (3,945,000) 1,500,000(8) 6,787,000
------------ ------------ ------------ ------------
Total assets $317,341,000 ($54,458,000) $18,249,000 $281,132,000
============ ============= ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $483,000 ($144,000) -- $339,000
Trade accounts payable 10,312,000 (4,793,000) -- 5,519,000
Accrued expenses and other current liabilities 18,101,000 (2,813,000) -- 15,288,000
------------ ------------ ------------ ------------
Total current liabilities 28,896,000 (7,750,000) -- 21,146,000
Long-term debt, net of current maturities 96,274,000 (4,165,000) ($34,629,000)(9) 57,480,000
Other non-current liabilities 3,894,000 (265,000) -- 3,629,000
------------ ------------ ------------ ------------
Total liabilities 129,064,000 (12,180,000) (34,629,000) 82,255,000
------------ ------------ ------------ ------------
Minority interests in consolidated subsidiary 32,718,000 -- -- 32,718,000
------------ ------------ ------------ ------------
Commitments and contingencies
Shareholders' equity:
Preferred stock, none issued -- -- -- --
Common stock 85,000 -- -- 85,000
Class A common stock 89,000 -- -- 89,000
Capital in excess of par 110,449,000 -- -- 110,449,000
Investment in and advances to Trilectron by HEICO -- (42,278,000) 42,278,000(10) --
Accumulated other comprehensive loss (1,433,000) -- -- (1,433,000)
Retained earnings 47,820,000 -- 10,600,000(11) 58,420,000
------------ ------------ ------------ ------------
157,010,000 (42,278,000) 52,878,000 167,610,000
Less: Note receivable from employee savings
and investment plan (1,451,000) -- -- (1,451,000)
------------ ------------ ------------ ------------
Total shareholders' equity 155,559,000 (42,278,000) 52,878,000 166,159,000
------------ ------------ ------------ ------------
Total liabilities and shareholders' equity $317,341,000 ($54,458,000) $18,249,000 $281,132,000
============ ============ ============ ============
</TABLE>
See accompanying notes to unaudited pro forma consolidated
condensed financial statements
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<PAGE>
HEICO CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the nine months ended July 31, 2000
(unaudited)
<TABLE>
<CAPTION>
Historical
Historical Trilectron
HEICO Industries, Pro Forma
Corporation(3) Inc.(4) Adjustments(16) Pro Forma
-------------- ------------- --------------- -----------
<S> <C> <C> <C> <C>
Net sales $155,400,000 ($44,255,000) -- $111,145,000
------------ ------------ ---------- ------------
Operating costs and expenses:
Cost of sales 98,184,000 (36,038,000) -- 62,146,000
Selling, general and administrative expenses 27,242,000 (4,903,000) -- 22,339,000
------------ ------------ ---------- ------------
Total operating costs and expenses 125,426,000 (40,941,000) -- 84,485,000
------------ ------------ ---------- ------------
Operating income 29,974,000 (3,314,000) -- 26,660,000
Interest expense (4,272,000) 180,000 $2,494,000(12) (1,598,000)
Intercompany interest expense -- 1,475,000 (1,475,000)(13) --
Interest and other income 609,000 (182,000) -- 427,000
------------ ------------ ---------- ------------
Income before income taxes and minority interest 26,311,000 (1,841,000) 1,019,000 25,489,000
Income tax expense 10,130,000 (711,000) 393,000(14) 9,812,000
------------ ------------ ---------- ------------
Income before minority interest 16,181,000 (1,130,000) 626,000 15,677,000
Minority interest 2,656,000 -- -- 2,656,000
------------ ------------ ---------- ------------
Net income $13,525,000 ($1,130,000) $626,000 $13,021,000
============ ============ ========== ============
Net income per share:
Basic $0.78 $0.75
============ ============
Diluted $0.68 $0.65
============ ============
Weighted average number of common shares outstanding:
Basic 17,351,608 17,351,608
============ ============
Diluted 19,904,387 19,904,387
============ ============
</TABLE>
See accompanying notes to unaudited pro forma consolidated
condensed financial statements
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<PAGE>
HEICO CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended October 31, 1999
(unaudited)
<TABLE>
<CAPTION>
Historical
Historical Trilectron
HEICO Industries, Pro Forma
Corporation(5) Inc.(6) Adjustments(16) Pro Forma
-------------- ----------- --------------- ------------
<S> <C> <C> <C> <C>
Net sales $141,269,000 ($36,617,000) -- $104,652,000
------------ ------------ ---------- ------------
Operating costs and expenses:
Cost of sales 83,737,000 (29,368,000) -- 54,369,000
Selling, general and administrative expenses 24,717,000 (4,467,000) -- 20,250,000
------------ ------------ ---------- ------------
Total operating costs and expenses 108,454,000 (33,835,000) -- 74,619,000
------------ ------------ ---------- ------------
Operating income 32,815,000 (2,782,000) 30,033,000
Interest expense (2,173,000) 173,000 $1,628,000(12) (372,000)
Intercompany interest expense -- 621,000 (621,000)(13) --
Interest and other income 894,000 22,000 -- 916,000
------------ ------------ ---------- ------------
Income from continuing operations before
income taxes and minority interest 31,536,000 (1,966,000) 1,007,000 30,577,000
Income tax expense 11,606,000 (748,000) 389,000(14) 11,247,000
------------ ------------ ---------- ------------
Income before minority interest 19,930,000 (1,218,000) 618,000 19,330,000
Minority interest 3,593,000 -- -- 3,593,000
------------ ------------ ---------- ------------
Net income $16,337,000 $(1,218,000) $ 618,000 $15,737,000
============ ============ ========== ============
Net income per share:
Basic $1.00 $0.97
============ ============
Diluted $0.84 $0.81
============ ============
Weighted average number of common shares
outstanding:(15)
Basic 16,302,791 16,302,791
============ ============
Diluted 19,407,399 19,407,399
============ ============
</TABLE>
See accompanying notes to unaudited pro forma consolidated
condensed financial statements
-8-
<PAGE>
HEICO CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. As disclosed in the Company's Quarterly Report on Form 10-Q as of July
31, 2000.
2. Represents Trilectron Industries, Inc. condensed balance sheet as of
July 31, 2000.
3. As disclosed in the Company's Quarterly Report on Form 10-Q for the
nine months ended July 31, 2000.
4. Represents Trilectron Industries, Inc. condensed statement of
operations for the nine months ended July 31, 2000.
5. As disclosed in the Company's Annual Report on Form 10-K for the year
ended October 31, 1999.
6. Represents Trilectron Industries, Inc. condensed statement of
operations for the year ended October 31, 1999.
The pro forma adjustments give effect to:
7. Represents a $12 million short-term note receivable from Hobart as
additional sales proceeds, discounted at the Company's borrowing rate
and an estimated purchase price adjustment of $4.9 million based on
Trilectron's net book value as of July 31, 2000.
8. Represents assets of Trilectron retained by the Company.
9. Represents reduction of outstanding borrowings under the Credit
Facility from the $52.5 million cash proceeds at closing less estimated
cash required for expenses and related costs of approximately $12
million, and payment of estimated income taxes of approximately $7
million on the gain. Estimated expenses and related costs of $12
million include Board-approved management incentive bonuses, contract
indemnification costs and required reserves, and professional services
fees.
10. Elimination of investment in and advances to Trilectron by the Company.
11. Estimated gain on sale of Trilectron, after applicable Federal and
state income taxes, as if consummated as of July 31, 2000.
12. Represents reduction of interest expense assuming the cash proceeds
from the sale were used to reduce the borrowings outstanding under the
Credit Facility.
13. Elimination of intercompany interest expense.
14. Additional income tax expense after elimination of Trilectron and
giving effect to the pro forma adjustments.
15. Weighted average number of common shares outstanding have been adjusted
from the originally reported amount to reflect a 10% stock dividend
paid July 21, 2000.
16. As a result of the sale, the Company will report a net gain of
approximately $10.6 million, after taxes, in the fourth quarter of
fiscal 2000. This gain is not reflected in the proforma condensed
statements of operations presented.
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<PAGE>
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
2.1 Stock Purchase Agreement, dated August 1, 2000, by and
between HEICO Aviation Products Corp., and Hobart Brothers
Company. The Company hereby agrees to furnish the Securities
and Exchange Commission, supplementally, any schedules or
exhibits to such agreement which are not filed herewith, upon
the request of the Securities and Exchange Commission.
2.2 First Amendment to Stock Purchase Agreement, effective as
of September 14, 2000, between HEICO Aviation Products Corp.
and Hobart Brothers Company.
99.1 Press Release of HEICO Corporation, dated August 14, 2000.
99.2 Press Release of HEICO Corporation, dated September 18, 2000.
