Heico Corp (NYSE:HEI) stock fell 4.62% (As on May 23, 11:40:25 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the second quarter of FY 23. Operating income increased 28% to a record $157.1 million in the second quarter of fiscal 2023, up from $122.8 million in the second quarter of fiscal 2022. The Company’s consolidated operating margin was 22.8% in both the second quarter of fiscal 2023 and 2022. Improvement in the commercial aerospace market has resulted in eleven consecutive quarters of sequential growth in net sales and operating income at the Flight Support Group. Net income increased 24% to $105.1 million in the second quarter of fiscal 2023, up from $85.0 million, in the second quarter of fiscal 2022. EBITDA increased 28% to $187.2 million in the second quarter of fiscal 2023, up from $146.6 million in the second quarter of fiscal 2022.

HEI in the second quarter of FY 23 has reported the adjusted earnings per share of 76 cents, beating the analysts’ estimates for the adjusted earnings per share of 73 cents. The company had reported the adjusted revenue growth of 28 percent to $687.8 million in the second quarter of FY 23, beating the analysts’ estimates for revenue of $675.9 million. The total debt to shareholders’ equity ratio was 26.4% as of April 30, 2023, as compared to 11.0% as of October 31, 2022. The net debt (total debt less cash and cash equivalents) of $627.5 million as of April 30, 2023 to shareholders’ equity ratio was 21.9% as of April 30, 2023, as compared to 5.7% as of October 31, 2022.

The total debt to net income attributable to HEICO ratio was 2.0x as of April 30, 2023, as compared to .83x as of October 31, 2022. The net debt to EBITDA ratio was .94x and .25x as of April 30, 2023 and October 31, 2022, respectively. The increase in the debt ratios in the first six months of fiscal 2023 principally reflect the impact from financing the purchase of Exxelia International in January 2023.

Cash flow provided by operating activities was $77.8 million in the second quarter of fiscal 2023, as compared to $96.8 million in the second quarter of fiscal 2022. Cash flow provided by operating activities in the second quarter of fiscal 2023 reflects an increase in working capital principally driven by an increase in inventories to support the increased consolidated backlog. The company continues to forecast strong cash flow from operations for fiscal 2023.