What changed in this filing

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Item 1A. Risk Factors

2025-04-24 compared with 2024-04-26 · 44 added, 45 removed, 139 unchanged (39% of the section changed)

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North American and global economic and industry-related business conditions materially adversely affect our sales and results of operations

Our Architectural Framing Systems, Architectural Glass, and Architectural Services Segments are influenced by North American economic conditions and the cyclical nature of the North American non-residential construction industry.

Architectural Metals, Architectural Services, Architectural Glass, and a portion of our Performance Surfaces Segment are influenced by North American economic conditions and the cyclical nature of the North American non-residential construction industry.

The non-residential construction industry is impacted by macroeconomic trends, such as availability of credit, employment levels, consumer confidence, interest rates and commodity prices.

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To the extent changes in these factors negatively impact the overall non-residential construction industry, our business, operating results and financial condition could be significantly adversely impacted.

Our LSO Segment primarily depends on the strength of the U.S.

A significant portion of our Performance Surfaces Segment primarily depends on the strength of the U.S.

retail custom picture framing industry.

This industry is heavily influenced by consumer confidence and the conditions of the U.S.

A decline in consumer confidence, whether as a result of an economic slowdown, uncertainty regarding the future or other factors, could materially and adversely reflect the operating results of the segment.

decline in consumer confidence, whether as a result of an economic slowdown, uncertainty regarding the future or other factors, could materially and adversely reflect the operating results of the segment.

Global instability and uncertainty arising from events outside of our control, such as significant natural disasters, political crises, public health crises, and/or other catastrophic events could materially adversely affect our results of operations

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Changes in our competitors' products, prices or services could negatively impact our share of demand and our operating results.

Our LSO Segment competes with several specialty glass manufacturers and acrylic suppliers.

If these competitors are able to successfully improve their product attributes, service capabilities and production capacity and/or improve their sales and marketing focus within the markets we serve, this segment's operating results could be negatively impacted.

Our customer concentration in the LSO Segment creates a significant risk for product sale declines

The LSO Segment is highly dependent on a relatively small number of customers for its sales, while working to grow in new markets and with new customers.

Accordingly, loss of a significant customer, a significant reduction in pricing, or a shift to a less favorable mix of value-added picture framing glass or acrylic products for one or more of those customers could materially reduce the segment's operating results.

Our customer concentration in the Performance Surfaces Segment creates a significant risk for product sale declines

The Performance Surfaces Segment is highly dependent on a relatively small number of customers for its sales, while working to grow in new markets and with new customers.

Accordingly, loss of a significant customer, or a significant reduction in pricing for one or more of those customers could materially reduce the segment's operating results.

Strategic Risks

We could be unable to effectively manage and implement our enterprise strategy, which could have a material adverse effect on our business, financial condition, and results of operations

Our strategy includes differentiating our product and service offerings, shifting our business mix toward higher operating margin products and services and higher return on invested capital performance, and moving away from our historical, decentralized operating model.

Execution of this strategy will require additional investments of time and resources and could fail to achieve the desired results.

Our strategy includes differentiating our product and service offerings, shifting our business mix toward higher growth and operating margin products and services, driving higher return on invested capital performance, and moving to a more centralized operating model.

Execution of this strategy require additional investments of time and resources and could fail to achieve the desired results.

For example, we may be unable to increase our sales and earnings by differentiating our product and service offerings in a cost-effective manner.

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We frequently evaluate our brand and product portfolios and may consider acquisitions that complement our business or divestitures of businesses that we no longer believe to be an appropriate strategic fit.

We have initiated, and may initiate in the future, restructuring plans to achieve strategic objectives and improve financial results.

As we consider and execute future acquisitions, we may incur risks in integrating operations, technologies, products, and employees;

As we consider and execute acquisitions, we may incur risks in integrating operations, technologies, products, and employees;

we may fail to realize expected revenue growth and cost synergies from integration initiatives;

we would likely increase debt levels to finance the acquisition;

we would likely increase debt levels to finance an acquisition;

we may not fully anticipate changes in cash flows or other market-based assumptions or conditions that cause the value of acquired assets to fall below book value, requiring impairment of intangible assets including goodwill;

we may subsequently identify contingent liabilities;

we may identify contingent liabilities subsequent to closing an acquisition;

and we may be entering markets in which we have no or limited experience.

As we consider and execute future divestitures, we may be exposed to risks associated to our ability to find appropriate buyers;

As we consider and execute future divestitures, we may be exposed to risks associated with our ability to find appropriate buyers;

difficulties in executing transactions on favorable terms;

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The loss of our CEO or any of our key senior executives could have a material adverse effect on our business, operating results and financial condition, particularly if we are unable to hire and integrate suitable replacements on a timely basis.

Further, as we continue to grow our business, we will continue to adjust our senior management team.

Further, as our business evolves, we may have changes in our senior management team.

If we are unable to attract or retain the right individuals for the team, it could hinder our ability to efficiently execute our business, and could disrupt our operations or otherwise have a material adverse effect on our business.

Additionally, our success depends on the skills of construction project managers and other key technical personnel, and our ability to secure sufficient manufacturing and installation labor.

In recent years, strong residential and non-residential construction and low U.S.

unemployment have caused increased competition for experienced construction project managers and other labor.

Additionally, an important aspect of our success depends on the skills of construction project managers and other key technical personnel, and our ability to secure sufficient manufacturing and installation labor.

In recent years, low U.S.

unemployment has caused increased competition for experienced construction project managers and other labor.

If we are unable to retain existing employees, provide a safe and healthy working environment, and/or recruit and train additional employees with the requisite skills and experience, our operating results could be adversely impacted.

Continuing inflation may negatively impact our profitability.

Rising inflation, interest rates, and construction costs, or any one of them, could reduce the demand for our products and services and impact our profitability.

Higher interest rates make it more expensive for our customers to finance construction projects, and as a result, may reduce the number of projects available to us and the demand for our products and services, and also increase the interest expenses associated with our borrowings.

Cost inflation, including significant cost increases for freight, aluminum, glass, paint and other materials used in our operations, has impacted, and could continue to impact, our profitability.

Furthermore, in some of our segments, we operate on contracts wherein we bear part or all of the risk of inflation on materials costs and the cost of installation services.

Our ability to mitigate these costs, or recover the cost increases through price increases, may lag the cost increases, which could negatively impact our margins.

If we are unable to manage our supply and distribution chains effectively our results of operations will be negatively affected

Our Architectural Framing Systems and Architectural Services Segments use aluminum as a significant input to their products and our operating results in those two segments could be negatively impacted by supply chain disruptions and adverse price movements in the market for raw aluminum.

Our Architectural Metal and Architectural Services Segments use aluminum as a significant input to their products.

Our operating results in those two segments could be negatively impacted by supply chain disruptions and adverse price movements in the market for raw aluminum.

In recent years, we have seen increased volatility in the price of aluminum that we purchase from both domestic and international sources.

Due to our Architectural Framing Systems and Architectural Services Segments presence in Canada, we have significant cross-border activity, as our Canadian businesses purchase inputs from U.S.-based suppliers and sell to U.S.-based customers.

Due to our Architectural Metals and Architectural Services Segments presence in Canada, we have significant cross-border activity, as our Canadian businesses purchase inputs from U.S.-based suppliers and sell to U.S.-based customers.

A significant change in U.S.

trade policy with Canada could, therefore, have an adverse impact on our operating results.

Our Architectural Glass and LSO Segments use raw glass as a significant input to their products.

We periodically experience a tighter supply of raw glass when there is growth in automotive manufacturing and residential and non-residential construction.

Failure to acquire a sufficient amount of raw glass on terms as favorable as current terms, including as a result of a significant unplanned downtime or shift in strategy at one or more of our key suppliers, could negatively impact our operating results.

Our Architectural Glass and Performance Surfaces Segments use raw glass as a significant input to their products.

Increases in demand for raw glass may lead to lower supply or higher costs to acquire.

Failure to acquire a sufficient supply of raw glass on terms as favorable as current terms could negatively impact our operating results.

Our suppliers are subject to the fluctuations in general economic cycles.

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Project management and installation issues could adversely affect our operating results

Some of our segments are awarded fixed-price contracts that include material supply and installation services.

Often, bids are required before all aspects of a construction project are known.

Some of our segments are occasionally awarded fixed-price contracts that do not include escalation clauses on material and labor costs.

These bids are required before all aspects of a construction project are known.

An underestimate in the amount of labor required and/or cost of materials for a project;

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Additionally, we may have heightened cybersecurity, information security and operational risks as a result of work-from-home arrangements.

Our workforce operates with a combination of remote work and flexible work schedules opening us up for cybersecurity threats and potential breaches as a result of increased employee usage of networks other than company-managed.

This could result in one or more third-parties obtaining unauthorized access to our customer or supplier data or our internal data, including personally identifiable information, intellectual property and other confidential business information.

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however, there can be no assurance that our existing and planned precautions of backup systems, regular data backups, security protocols and other procedures will be adequate to prevent significant damage, system failure or data loss and the same is true for our partners, vendors and other third parties on which we rely.

While we maintain cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured.

Because techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative or mitigation measures.

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Regardless of the merits and ultimate outcome of these matters, we may be required to devote time and expense to their resolution.

In addition, the increase in the number and the scope of data security incidents has increased regulatory and industry focus on security requirements and heightened data security industry practices.

In addition, the number of data security incidents has increased regulatory and industry focus on security requirements and heightened data security industry practices.

New regulation, evolving industry standards, and the interpretation of both, may cause us to incur additional expense in complying with any new data security requirements.

As a result, the failure to maintain the integrity of and protect customer or supplier data or our confidential internal data could have a material adverse effect on our business, operating results and financial condition.

Legal, Regulatory and Tax Risks

Legislative, Regulatory and Tax Risks

Changes in trade policies may result in increased costs and could adversely affect our operating results

The impact of geopolitical tensions, including the potential implementation of more restrictive trade policies, higher tariffs or the renegotiation of existing trade agreements in the U.S.

or countries where we sell our products and services or procure products, could have a material adverse effect on our business.

In particular, political or trade disputes, or future phases of trade negotiations with Canada that could lead to the imposition of tariffs or other trade actions could require us to take action to mitigate those effects.

We may be unable to pass through additional tariff costs to our customers through price increases, and may be unable to secure adequate alternative sources of supply.

Our inability to offset higher tariff costs could have a material adverse effect on our operating results, profitability, customer relationships and future cash flow.

Violations of legal and regulatory compliance requirements, including environmental laws, and changes in existing legal and regulatory requirements, may have a negative impact on our business and results of operations

We are subject to a legal and regulatory framework imposed under federal and state laws and regulatory agencies, including laws and regulations that apply specifically to U.S.

We are subject to a legal and regulatory framework imposed under federal and state laws and regulatory agencies, including

laws and regulations that apply specifically to U.S.

public companies and laws and regulations applicable to our manufacturing and construction site operations.

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If we are unable to recover on insurance claims, in whole or in part, or if we exhaust our available insurance coverage at some point in the future, then we might be forced to expend our own funds on legal fees and settlement or judgment costs, which could negatively impact our profitability, results of operations, cash flows and financial condition.

Potential future tariffs may result in increased costs and could adversely affect the Company’s operating results

We utilize certain aluminum products in our manufacturing processes.

Tariffs imposed in the U.S.

or other countries on these aluminum products imported into the U.S.

could result in increased costs and a decreased available supply.

We may be unable to pass price increases on to our customers and may be unable to secure adequate alternative sources.

The tariffs, and our inability to offset them with higher pricing, could have a material adverse effect on our operating results.

Our judgments regarding the accounting for tax positions and the resolution of tax disputes, as well as any changes in tax legislation may impact our net earnings and cash flow

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As a result, our future actual results could vary materially from our projections which could have an adverse impact on the market price of our common stock.

Changes in macroeconomic factors may negatively impact our profitability

Rising interest rates, inflation, and higher input costs, could reduce the demand for our products and services and impact our profitability.

Cost inflation, including significant cost increases for freight, aluminum, glass, paint, wood-based and other materials used in our operations, has impacted, and could continue to impact, our profitability.

Furthermore, in some of our segments, we operate on contracts wherein we bear part or all of the risk of inflation on materials costs and the cost of installation services.

Our ability to mitigate these costs, or recover the cost increases through price increases, may lag the cost increases, which could negatively impact our margins.

We may experience further impairment of our goodwill, indefinite- and definite-lived intangible assets and long-lived assets, in the future, which could adversely impact our financial condition and results of operations

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The assessment of impairment involves significant judgment and projections about future performance.

Based on our annual impairment valuation analysis performed in the fourth quarter of fiscal 2024, there was no impairment of goodwill or indefinite and definite-lived intangibles identified.

As a result of a publicly announced restructuring plan in the fourth quarter of fiscal 2024, we incurred $6.2 million of impairment charges related to property, plant and equipment and operating lease right-of-use assets.

Based on our annual impairment valuation analysis performed in the fourth quarter of fiscal 2025, we incurred $7.6 million of pre-tax impairment charges related to indefinite-lived intangibles in the Architectural Metals Segment as a result of strategic branding changes.

Additionally, as a result of a publicly announced restructuring plan in the fourth quarter of fiscal 2024, we incurred $6.2 million of pre-tax impairment charges related to property, plant and equipment and operating lease right-of-use assets.

The discounted cash flow projections and revenue projections used in our annual impairment valuation analysis are dependent upon achieving forecasted levels of revenue and profitability.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors