51 added · 40 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
For example, we recognized impairment losses for a portion of the goodwill related to the acquisition of the Product Support business in conjunction with the allocation of goodwill in the Repair & Engineering reporting unit upon the decision to divest the LGO business.
For example, in April 2025, the White House’s Office of Management and Budget proposed to reduce the DoS’s budget by nearly 50%, closing a number of overseas diplomatic missions, and reducing diplomatic staff, which has negatively impacted the available funding for our DoS contracts by $70 million in annual revenue for those contracts.
In addition, in May 2025, the Secretary of Commerce initiated an investigation to determine the effects on the national security of imports of commercial aircraft and jet engines, and parts for commercial aircraft and jet engines under Section 232 of the Trade Expansion Act of 1962, as amended.
A termination for default could expose us to liability and adversely affect our financial performance and our ability to win new contract awards. 13 Table of Contents The success of our Repair & Engineering business segment is dependent upon our ability to manage our operational footprint.
To the extent artificial intelligence capabilities improve and are increasingly adopted, they may be used to identify vulnerabilities and produce advanced cybersecurity attacks, and vulnerabilities may be introduced from the use of artificial intelligence by us, our customers, suppliers and other business partners and third-party providers.
In addition, we are exploring implementing artificial intelligence strategies for our products and services, which may be costly or ineffective, introduce errors, cause loss of intellectual property, and raise complex regulatory compliance and other business and legal issues.
Government in procuring undelivered items from another source. 21 Table of Contents We have been subject to government investigation that has resulted in the payment of penalties and has required our compliance with the terms of agreements with government agencies.
We periodically divest or seek to divest certain businesses and investments, including those that are no longer a part of our ongoing strategic plan, such as the recent divestiture of our LGO business in the fourth quarter of fiscal 2025, which adversely affected our fiscal 2025 results of operations and financial condition.
We must expend resources to comply with these regulations and our failure to comply with these regulations may subject us to regulatory actions, which may adversely impact our financial condition or results of operations. 22 Table of Contents Our operations are subject to anti-corruption laws including the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. §201, the United Kingdom Bribery Act 2010, the U.S.
For example, there have been two instances in the current U.S. federal administration where license applications have been placed on hold by the U.S.
For example, FAR is currently under a comprehensive review and re-write, which may impact our business and overall risk once implemented.
Our sales to commercial customers, including major airlines and related OEM suppliers, were $1,976.1 million (71.1% of consolidated sales) in fiscal 2025.
No longer disclosed
We are devoting substantial management attention and resources to integrating our and the Product Support business’s business practices so that we can fully realize the anticipated benefits of the acquisition, all of which may divert attention of management from our existing business.
The acquisition could also result in the assumption of unknown or contingent liabilities, and, because the Product Support business operates in the same sector that we do, the acquisition could also exacerbate a number of risks that currently apply to us by increasing our exposure to sector-specific trends. 17 Table of Contents Potential difficulties we may encounter include, but are not limited to, the following: ● the inability to successfully combine our business and the Product Support business in a manner that permits us to realize the anticipated benefits, including any synergies, cross-selling opportunities, cost savings, financial or business growth opportunities, of the acquisition in the time frame currently anticipated, or at all; ● the failure to integrate internal systems, programs and controls, or decisions by our management to apply different accounting policies, assumptions or judgments to the Product Support business’s operational results than the Product Support business applied in the past; ● loss of sales and other commercial relationships; ● the additional complexities of combining the Product Support business with our company and its culture, strategies and customer base; ● the failure to retain key employees that may be difficult to replace; ● the disruption of each company’s ongoing businesses or inconsistencies in services, standards, controls, procedures and policies; ● potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the acquisition; ● the increase in our indebtedness as a result of the incurrence of the notes and borrowings under our Amended Revolving Credit Facility to finance the acquisition; and ● performance shortfalls as a result of the diversion of management’s attention caused by integrating our and the Product Support business’s operations.
As a result, the anticipated benefits of the acquisition may not be realized at all or may take longer to realize or cost more than expected, which could adversely affect our business, financial condition, results of operations and growth prospects.
Based on our preliminary purchase accounting estimates, we have allocated $554.2 million of the acquisition purchase price to goodwill and amortizable intangible assets.
The indebtedness incurred to finance the acquisition may adversely affect our ability to operate our business, remain in compliance with debt covenants, or react to changes in our business or the industry in which we operate.
The success of the acquisition of the Product Support business will depend, in part, on our ability to realize the anticipated benefits from successfully combining our business and the Product Support business.
Specifically, it is less likely that we will make stock repurchases in the near future in light of the debt incurred to finance the acquisition of the Product Support business from Triumph Group.
We must test goodwill for possible impairment on at least an annual basis and must evaluate amortizable intangible assets for impairment if there are indicators of a possible impairment.
Our acquisition of the Product Support business from Triumph Group involves separating the Product Support business from Triumph Group and integrating it into our Company.
If the acquisition does not yield expected returns, we may be required to record impairment losses, which could materially adversely affect our reported results.
Our operations are subject to anti-corruption laws including the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. §201, the United Kingdom Bribery Act 2010, the U.S.
A termination for default could expose us to liability and adversely affect our financial performance and our ability to win new contract awards.