Company: HEI-A
Filing Date: 2025-05-29
Form Type: 10-Q
Source: 0000046619-25-000046
Chunk: 26

Company: HEICO CORP
Filing Date: 2025-05-29
Form: 10-Q
Item: Item 1
Chunk 26
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 actual results to-date and an improving forecast for the subsidiary's products over the remainder of the earnout period, the estimated fair value of the contingent consideration increased from $0.0 million as of October 31, 2024 to $6.7 million as of April 30, 2025.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.

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The following unobservable inputs were used to derive the estimated fair value of the Company's Level 3 contingent consideration liabilities as of April 30, 2025 ($ in thousands):Unobservable Weighted Acquisition Date Fair Value Input Range Average (1) 1-31-2025$11,959Compound annual revenue growth rate5% - 22%17%Discount rate6.9% - 6.9%6.9%7-18-202221,375Compound annual revenue growth rate3% - 9%7%Discount rate6.9% - 6.9%6.9%3-17-20226,710Compound annual revenue growth rate(2%) - 6%3%Discount rate7.4% - 7.4%7.4%(1)    Unobservable inputs were weighted by the relative fair value of the contingent consideration liability.    Changes in the Company’s contingent consideration liabilities measured at fair value on a recurring basis using unobservable inputs (Level 3) for the six months ended April 30, 2025 are as follows (in thousands):LiabilitiesBalance as of October 31, 2024$30,207 Contingent consideration related to an acquisition11,509 Payment of contingent consideration(8,144)Increase in accrued contingent consideration, net6,766 Foreign currency transaction adjustments(294)Balance as of April 30, 2025$40,044 As of April 30, 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 Statements of Operations.The carrying amounts of the Company’s cash and cash equivalents, accounts