Heico Corp. saw its Flight Support Group (FSG) boost sales 10% in fiscal year 2017, lifted by strong organic growth in its commercial replacement parts business, company executives report.
"Our aftermarket business is very strong," CFO Carlos Macau told analysts on a Dec. 19 earnings call. "We pushed 9% organic growth through the pipe in FSG, and that's pure aftermarket parts business."
FSG's year ended Oct. 31 was also bolstered by acquisitions closed during the period, including connector specialist Air Cost Control, that boosted top-line growth.
The typically close-to-the-vest company offered few details on which platforms are driving FSG demand, or whether it is beginning to see business from newer platforms, notably the 787, as fleets grow.
"We don't like to talk about specific platforms, but I can tell you that in general, with regard to the newer platforms, we're doing consistent with our expectations," FSG President and CEO Eric Mendelson says. "I can tell you we had a very strong year of new product development [in 2017], and I would anticipate that to continue."
The company typically targets developing 400-500 new parts annually to meet customer demand. Mendelson says 2018's new-product introduction will fall in this range.
The organic and acquisition-related growth was offset by a drop in demand for its "specialty products" line, the company says.
"The lower demand we experienced in our specialty products product line for certain aerospace, industrial and defense products was principally due to delays in customer orders that have pushed to the right," Mendelson says. "Many of these projects relate to defense, and our current backlog is encouraging for fiscal '18."
Heico boosted full-company net income 19% in 2017, to $186 million, on a net-sales increase of 11%, to $1.5 billion. Among the fourth-quarter highlights was a 16% increase in overall sales and a 12% increase in FSG sales, including 6% organic growth in FSG.
The company is projecting 10-12% growth in both sales and net income in 2018. Within FSG, it expects overall growth of about 10% in 2018, with half of it being generated organically.