Heico Corp (NYSE: HEI) stock rose 4% in the pre market session of August 28^th, 2019 (Source: Google finance) after the company in the third quarter of FY 19 has reported the 14% increase in net sales to a record $532.3 million in the third quarter of fiscal 2019, up from $465.8 million in the third quarter of fiscal 2018. Operating income increased 18% to a record $119.4 million in the third quarter of fiscal 2019, up from $101.4 million in the third quarter of fiscal 2018. The Company’s consolidated operating margin improved to 22.4% in the third quarter of fiscal 2019, up from 21.8% in the third quarter of fiscal 2018. EBITDA increased 17% to $140.8 million in the third quarter of fiscal 2019, up from $120.7 million in the third quarter of fiscal 2018. Cash flow provided by operating activities was very strong, increasing 46% to $313.4 million in the first nine months of fiscal 2019, up from $214.8 million in the first nine months of fiscal 2018.

Moreover, during FY19, the company has successfully completed six acquisitions and completed seven acquisitions over the past year. As a result of these acquisitions, partially offset by the impact of our strong cash flows, the total debt to shareholders’ equity ratio increased to 39.0% as of July 31, 2019, up from 35.4% as of October 31, 2018. The net debt (total debt less cash and cash equivalents) of $581.1 million to shareholders’ equity ratio increased to 35.4% as of July 31, 2019, up from 31.5% as of October 31, 2018. The net debt to EBITDA ratio increased to 1.11x as of July 31, 2019, up from 1.04x as of October 31, 2018. The company have no significant debt maturities until fiscal 2023 and plan to utilize the financial flexibility to aggressively pursue high quality acquisitions to accelerate growth and maximize shareholder returns.

For FY 19, HEI expects net sales growth to be 14% – 15% and net income growth to be 23% – 24%, up from the prior growth estimates in net sales of 12% – 13% and in net income of 17% – 18%. The company now anticipate the consolidated operating margin to approximate 22.0%, up from the prior estimate of 21.5% – 22.0% and continue to anticipate depreciation and amortization expense to approximate $84 million. Further, the company now anticipates cash flow from operations to approximate $405 million, up from the prior estimate of $380 million, and capital expenditures to approximate $31 million, down from the prior estimate of $38 million.