HEICO Corporation

Human capital and workforce · Key personnel dependence and succession

Our success substantially depends on the performance, contributions and expertise of our senior management team led by Eric A. Mendelson and Victor H. Mendelson, our Co-Chairmen and Co-Chief Executive Officers, and Carlos L. Macau, Jr., our Chief Financial Officer. The loss of the services of any of our executive officers or other key employees or our inability to continue to attract or retain the necessary personnel could have a material adverse effect on our business.

Supply chain and procurement · Supplier operation and dependance

Our business is affected by the availability and price of the raw materials and component parts that we use to manufacture our products. Our ability to manage inventory and meet delivery requirements may be constrained by our suppliers' ability to adjust delivery of long-lead time products during times of volatile demand. Our inability to fill our supply needs could jeopardize our ability to fulfill obligations under customer contracts.

Core operations · Quality control and product defects

Product specification costs and requirements could result in us having to spend more to design or manufacture products and this could reduce our profit margins on current contracts or those we obtain in the future.

Core operations · Operational disruption and business continuity

Should insurance or other risk transfer mechanisms, such as our existing disaster recovery and business continuity plans, be insufficient to recover all costs, we could experience a material adverse effect on our business, financial condition and results of operations.

Industry regulation · Licensing and permits

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. The revocation or suspension of any of our material authorizations or approvals would have an adverse effect on our business.

Legal and litigation · Product liability and warranty claims

We may incur product liability claims that are not fully insured and such insurance may not be available at commercially reasonable rates. Our jet engine and aircraft component replacement parts and repair and overhaul services expose our business to potential liabilities for personal injury or death as a result of the failure of an aircraft component that we have designed, manufactured or serviced.

Industry regulation · Regulatory compliance and changes

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. Governmental agencies throughout the world, including the FAA, highly regulate the manufacture, repair and overhaul of aircraft parts and accessories. New and more stringent government regulations, if adopted and enacted, could have an adverse effect on our business.

Strategic execution · Merger acquisition and divestiture risks

A key element of our strategy is growth through the acquisition of additional companies. Our acquisition strategy is affected by and poses a number of challenges and risks, including the following: Availability of suitable acquisition candidates; Availability of capital; Diversion of management's attention; Effective integration of the operations and personnel of acquired companies; Potential write-downs of acquired intangible assets; Potential loss of key employees of acquired companies.

Strategic execution · Strategic transformation and turnaround risks

We may not have the administrative, operational or financial resources to continue to grow the company. We have experienced rapid growth in recent periods and intend to continue to pursue an aggressive growth strategy, both through acquisitions and internal expansion of products and services. Our growth to date has placed, and could continue to place, significant demands on our administrative, operational and financial resources.

Market position and competition · Pricing pressure and margin compression

As OEMs continue to develop and improve jet engines and aircraft components, we may not be able to re-design and manufacture replacement parts that perform as well as those offered by OEMs or we may not be able to profitably sell our replacement parts at lower prices than the OEMs. Our smaller competitors may be able to offer more attractive pricing of parts as a result of lower labor costs or other factors.

Innovation and product development · Product development and randd investment risks

Our success is dependent on the development and manufacture of new products, equipment and services. Our inability to develop, manufacture and introduce new products and services at profitable pricing levels could reduce our sales or sales growth. Consequently, we devote substantial resources to research and product development.

Market position and competition · Market cyclicality and demand volatility

Historically, the aviation industry has been subject to downward cycles from time to time which reduce the overall demand for jet engine and aircraft component replacement parts and repair and overhaul services, and such downward cycles result in lower sales and greater credit risk. Demand for commercial air travel can be influenced by airline industry profitability, world trade policies, government-to-government relations, terrorism, disease outbreaks, environmental constraints imposed upon aircraft operations, technological changes, price and other competitive factors.

Market position and competition · Competitive pressure and market share loss

We face significant competition in each of our businesses. Some of our OEM competitors have greater name recognition than HEICO, as well as complementary lines of business and financial, marketing and other resources that HEICO does not have. A variety of potential actions by any of our competitors, including a reduction of product prices or the establishment by competitors of long-term relationships with new or existing customers, could have a material adverse effect on our business.

International and currency · Foreign exchange and currency exposure

We market our products and services to approximately 130 countries, with approximately 38% of our consolidated net sales in fiscal 2025 derived from sales to foreign customers. As a result, we are subject to risks of doing business internationally, including the following: Fluctuations in currency exchange rates.

International and currency · International operations and emerging markets

We are subject to risks of doing business internationally, including the following: Geopolitical unrest, war, terrorism and other acts of violence; Volatility in foreign political, regulatory, and economic environments; Ability to obtain required export licenses or approvals; Uncertainty of the ability of foreign customers to finance purchases.

Corporate governance · Shareholder rights and activism

As of December 19, 2025, collectively our executive officers and entities controlled by them, the HEICO Savings and Investment Plan (our 401(k) Plan) and members of the Board of Directors beneficially owned approximately 11% of our outstanding Common Stock and approximately 3% of our outstanding Class A Common Stock. Accordingly, they will be able to substantially influence the election of the Board of Directors and control our business, policies and affairs.

Cybersecurity and data protection · Data privacy and protection regulations

We also collect and store sensitive data, including confidential business information and personal data that are subject to privacy and security laws and regulations. Certain of our businesses that perform work for the U.S. Department of Defense are also required to comply with applicable cybersecurity standards, including the Department of Defense's Cybersecurity Maturity Model Certification ('CMMC') program.

Technology infrastructure · Technology systems and infrastructure failure

These systems may be susceptible to damage, disruptions or shutdowns due to attacks by computer hackers, computer viruses, employee error or malfeasance, power outages, hardware failures, telecommunication or utility failures, catastrophes or other unforeseen events.

Cybersecurity and data protection · Third party data security and vendors

We rely on information technology systems, some of which are managed by third parties, to process, transmit and store electronic information, and to manage or support a variety of critical business processes and activities.

Geopolitical and trade · Government funding and budget changes

Reductions in defense, space or homeland security spending by U.S. and/or foreign customers could reduce our revenues. In fiscal 2025, approximately 31% of our net sales were derived from the sale of defense, commercial and defense satellite and spacecraft components, and homeland security products. A decline in defense, space or homeland security budgets or additional restrictions imposed by the U.S. government on sales of products or services to foreign military agencies could lower sales.