Heico Corp (NYSE: HEI) stock lost over 6.6% on 26th August, 2020 (as of 10:10 am GMT-4 ; Source: Google finance) after the company’s net income fell to $54.3 million as compared to $81.1 million for the third quarter of FY 20, in the third quarter of fiscal 2019. Moreover, the Flight Support Group’s net sales had fallen to $178.2 million in the third quarter of fiscal 2020, as compared to $320.0 million in the third quarter of fiscal 2019 due to pandemic. The Electronic Technologies Group’s net sales fell 2% to $210.9 million in the third quarter of fiscal 2020.
Further, the company’s total debt to shareholders’ equity ratio stood at 37.9% and 33.2% at the end of July, 2020 and October, 2019, respectively. During fiscal 2020, the company had successfully completed six acquisitions, four of which were completed since the Outbreak’s start. The company presently has no significant debt maturities until fiscal 2023 and plan to utilize the financial strength and flexibility to aggressively pursue high quality acquisitions of various sizes to accelerate growth and maximize shareholder returns. The company generated cash flow by operating activities of total $93.1 million, or 171% of net income in the third quarter of fiscal 2020, as compared to $135.1 million in the third quarter of fiscal 2019.
Meanwhile, the commercial aerospace industry seen an ongoing substantial fall in demand, that has resulted from a significant number of aircraft in the global fleet being grounded during the third quarter. Therefore, the company’s commercial aerospace businesses were materially affected in the third quarter of fiscal 2020 due to the significant decline in global commercial air travel that began in March 2020. Once commercial air travel resumes, the company’s priority will be the cost savings and the company expects recovery in demand for the commercial aviation products, which frequently provide aircraft operators with significant savings.
HEI in the third quarter of FY 20 has reported the adjusted earnings per share of 40 cents, while reported the adjusted revenue of $386.4 million in the third quarter of FY 20.
In the third quarter of fiscal 2020, operating income declined to $68.4 million, as compared to $119.4 million in the third quarter of fiscal 2019. The Company’s consolidated operating margin has contracted 17.7% in the third quarter of fiscal 2020, as compared to 22.4% in the third quarter of fiscal 2019. In the third quarter of fiscal 2020, EBITDA has also fallen to $91.0 million, as compared to $140.8 million in the third quarter of fiscal 2019.