HEICO is a leading aerospace parts manufacturer and distributor that has a very unique angle on aftermarket parts and repairs. Over half of its business (51% of revenues in FY20) is categorized under the Flight Support Group (FSG), the main part of which consists of selling FAA approved functional equivalent parts that are otherwise sold by OEMs (original equipment manufacturers). These parts are categorized as PMA (Parts Manufacturer Approvals) and typically are priced below that of the OEMs. You can almost think of PMA as generic versions of branded pharmaceuticals, without the IP protection of the formulary.
Yes. Here is what Eric Mendelson said on the Q4 2020 earnings call:
"Having said that, our strategy within the parts business is to take a minority market share. We only go for a 30% market share. So, as long as we're able to pick up that market share at terms which makes sense for our customers as well as for ourselves, we kept that market share around that level because we want to make sure that our competitors also have a very good business strategy for their market share."
I am having some trouble understand the RO incremental capital. How do you come up with the rolling sums and the 2 and 4 year changes. The math does not seem to line up for me. I am likely completely wrong in how I calculate these numbers
Good stuff, thanks
Thanks Liberty!
Is the 30% market share cap figure something that's provided by Heico management?
Yes. Here is what Eric Mendelson said on the Q4 2020 earnings call:
"Having said that, our strategy within the parts business is to take a minority market share. We only go for a 30% market share. So, as long as we're able to pick up that market share at terms which makes sense for our customers as well as for ourselves, we kept that market share around that level because we want to make sure that our competitors also have a very good business strategy for their market share."
NIce review. thank you!
I am having some trouble understand the RO incremental capital. How do you come up with the rolling sums and the 2 and 4 year changes. The math does not seem to line up for me. I am likely completely wrong in how I calculate these numbers
Thanks for the question. I'll email you.