Company: HEI-A
Filing Date: 2025-02-28
Form Type: 10-Q
Source: 0000046619-25-000015
Chunk: 22

Company: HEICO CORP
Filing Date: 2025-02-28
Form: 10-Q
Item: Item 1
Chunk 22
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 the membership interests of a subsidiary by the FSG in fiscal 2022, the Company may be obligated to pay contingent consideration of $14.1 million in fiscal 2027 should the acquired entity meet a certain earnings objective during the five-year period following the acquisition.  As of January 31, 2025, the estimated fair value of the contingent consideration was $2.4 million.As part of the agreement to acquire 89.99% of the equity interests of a subsidiary by the ETG in fiscal 2020, the Company paid contingent consideration of CAD $11.7 million, or $8.1 million, in January 2025 as the acquired entity met certain earnings objectives during fiscal 2023 and 2024.    The following unobservable inputs were used to derive the estimated fair value of the Company's Level 3 contingent consideration liabilities as of January 31, 2025 ($ in thousands):Unobservable Weighted Acquisition Date Fair Value Input Range Average (1) 1-31-2025$11,457Compound annual revenue growth rate5% - 22%17%Discount rate7.6% - 7.6%7.6%7-18-202222,697Compound annual revenue growth rate5% - 10%9%Discount rate7.6% - 7.6%7.6%3-17-20222,360Compound annual revenue growth rate1% - 5%4%Discount rate8.1% - 8.1%8.1%(1)    Unobservable inputs were weighted by the relative fair value of the contingent consideration liability.

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Changes in the Company’s contingent consideration liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) for the three months ended January 31, 2025 are as follows (in thousands):LiabilitiesBalance as of October 31, 2024$30,207 Contingent consideration related to an acquisition11,457 Payment of contingent consideration(8,144)Increase in accrued contingent consideration3,288 Foreign currency transaction adjustments(294)Balance as of January 31, 2025$36,514 As of January 31, 2025, the Company's contingent consideration balance is included within other long-term liabilities in its Condensed Consolidated Balance Sheet.  The Company records changes in accrued contingent consideration and foreign currency transaction adjustments within SG&A expenses in its Condensed Consolidated