Company: HEI-A
Filing Date: 2025-12-22
Form Type: 10-K
Source: 0000046619-25-000082
Chunk: 43

Company: HEICO CORP
Filing Date: 2025-12-22
Form: 10-K
Item: Item 1A
Chunk 43
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 key markets.

Regulatory and Legal Risks

We are subject to governmental regulation and our failure to comply with these regulations could cause the government to withdraw, suspend or revoke our authorizations and approvals to do business and could subject us to penalties and sanctions that could harm our business.

    Governmental agencies throughout the world, including the FAA, highly regulate the manufacture, repair and overhaul of aircraft parts and accessories.  We include, with the replacement parts that we sell to our customers, documentation certifying that each part complies with applicable regulatory requirements and meets applicable standards of airworthiness established by the FAA or the equivalent regulatory agencies in other countries.  In addition, our repair and overhaul operations are subject to certification pursuant to regulations established by the FAA.  Specific regulations vary from country to country, although compliance with FAA requirements generally satisfies regulatory requirements in other countries.  The revocation or suspension of any of our material authorizations or approvals would have an adverse effect on our business, financial condition and results of operations.  New and more stringent government regulations, if adopted and enacted, could have an adverse effect on our business, financial condition and results of operations. 

Also, our operations involve products and technologies subject to U.S. and international trade control laws, including the International Traffic in Arms Regulations (ITAR), the Export Administration Regulations (EAR), and economic sanctions administered by the Office of 

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Foreign Assets Control (OFAC).  These laws regulate the export, re-export, and transfer of certain items, technical data, software, and services, and may require us to obtain licenses or other governmental authorizations.  If we are unable to comply with the applicable trade laws and regulations, it could have a material adverse effect on our consolidated financial statements and competitive positions.  Additionally, the denial of export licenses could reduce our sales to certain countries and could have a material adverse effect on our business.

    Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Securities and Exchange Commission promulgated disclosure requirements regarding the use of certain minerals (tantalum, tin, gold and tungsten), known as conflict minerals, which are mined from the Democratic Republic of the Congo or another Covered Country.  There are costs associated with complying with the disclosure requirements, such as costs related to determining the source of certain minerals used in our products, as well as costs of possible changes to products, processes, or sources of supply as a consequence of such verification activities.  Given the complexity of our supply chain, we