SELECTED FINANCIAL STATEMENT INFORMATION

6 Months Ended

Apr. 30, 2023

Selected Financial Statement Information [Abstract]

Selected Financial Statement Information [Text Block]

SELECTED FINANCIAL STATEMENT INFORMATION

Accounts Receivable


(in thousands)	April 30, 2023	October 31, 2022
Accounts receivable	$371,708	$303,181
Less: Allowance for doubtful accounts	(10,651)	(8,333)
Accounts receivable, net	$361,057	$294,848

Inventories


(in thousands)	April 30, 2023	October 31, 2022
Finished products	$353,668	$285,024
Work in process	69,700	59,739
Materials, parts, assemblies and supplies	298,201	237,708
Inventories, net of valuation reserves	$721,569	$582,471

Property, Plant and Equipment


(in thousands)	April 30, 2023	October 31, 2022
Land	$19,232	$17,579
Buildings and improvements	168,689	148,598
Machinery, equipment and tooling	360,894	322,252
Construction in progress	23,578	14,533
	572,393	502,962
Less: Accumulated depreciation and amortization	(298,537)	(277,083)
Property, plant and equipment, net	$273,856	$225,879

Accrued Customer Rebates and Credits

The aggregate amount of accrued customer rebates and credits included within accrued expenses and other current liabilities in the accompanying Condensed Consolidated Balance Sheets was $19.5 million as of April 30, 2023 and $17.9 million as of October 31, 2022. The total customer rebates and credits deducted within net sales for the six months ended April 30, 2023 and 2022 was $4.2 million and $3.7 million, respectively. The total customer rebates and credits deducted within net sales for the three months ended April 30, 2023 and 2022 was $2.0 million and $2.0 million, respectively.

Research and Development Expenses

The amount of new product research and development ("R&D") expenses included in cost of sales for the six and three months ended April 30, 2023 and 2022 is as follows (in thousands):


	Six months ended April 30,		Three months ended April 30,
	2023	2022	2023	2022
R&D expenses	$43,134	$37,147	$22,896	$18,751

Redeemable Noncontrolling Interests

The holders of equity interests in certain of the Company's subsidiaries have rights ("Put Rights") that may be exercised on varying dates causing the Company to purchase their equity interests through fiscal 2032. The Put Rights, all of which relate either to common shares or membership interests in limited liability companies, provide that the cash consideration to be paid for their equity interests (the "Redemption Amount") be at fair value or a formula that management intended to reasonably approximate fair value based solely on a multiple of future earnings over a measurement period. Management's estimate of the aggregate Redemption Amount of all Put Rights that the Company could be required to pay is as follows (in thousands):


	April 30, 2023	October 31, 2022
Redeemable at fair value	$300,756	$300,693
Redeemable based on a multiple of future earnings	45,077	26,908
Redeemable noncontrolling interests	$345,833	$327,601

As discussed in Note 2, Acquisitions, the Company, through HEICO Electronic,

acquired 93.69% of the common stock of Exxelia in January 2023. During the second quarter of fiscal 2023, the Company sold an additional 2.72% of the common stock of Exxelia to its existing noncontrolling interest holders and certain members of Exxelia's management team, which decreased the Company's ownership interest in the common stock of the subsidiary to 90.97%. As part of the liquidity agreement, the noncontrolling interest holders have the right to cause the Company to purchase their equity interest beginning in fiscal 2028, or sooner under certain conditions, and the Company has the right to purchase the same equity interest beginning in the same period.

As discussed in Note 2, Acquisitions, the Company, as a result of its acquisition of Exxelia, acquired 90% of the stock of Alcon in January 2023. As part of the shareholders' agreement, the noncontrolling interest holder has the right to cause the Company to purchase their equity interest beginning in fiscal 2025, or sooner under certain conditions, and the Company has the right to purchase the same equity interest beginning in the same period.

During fiscal 2022, the holder of a 19.9% noncontrolling equity interest in a subsidiary of the FSG that was acquired in fiscal 2015 exercised their option to cause the Company to purchase their noncontrolling interest over a four-year period ending in fiscal 2026. Accordingly, the Company acquired one-fourth of such interest in December 2022, which increased the Company's ownership interest in the subsidiary to 85.1%.

Accumulated Other Comprehensive Loss

Changes in the components of accumulated other comprehensive loss for the six months ended April 30, 2023 are as follows (in thousands):


	Foreign Currency Translation	Defined Benefit Pension Plan	Accumulated Other Comprehensive Loss
Balances as of October 31, 2022	($45,369)	($1,130)	($46,499)
Unrealized gain	28,845	—	28,845
Amortization of unrealized loss	—	28	28
Balances as of April 30, 2023	($16,524)	($1,102)	($17,626)