What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2025-10-27 compared with 2024-10-28 · 64 added, 51 removed, 254 unchanged (31% of the section changed)

16 unchanged sentences

Additionally, new products and solutions may not achieve the same profit margins as expected or as compared to our historic products and solutions.

Conversely, market adoption of new products may impact the sales of other products and may expose on-hand inventories to future write-downs.

Market adoption of new products may impact the sales of other products and may expose on-hand inventories to future write-downs.

Accordingly, we cannot fully predict the ultimate effect of new product introductions on our business.

14 unchanged sentences

In addition, we operate in a highly competitive environment that is influenced by a number of general business and economic factors, such as economic vitality, employment levels, credit availability, interest rates, trends in vacancy rates and rent values, energy costs, and commodity costs.

Sales of lighting, lighting controls, and building technology solutions depend significantly on the level of activity in new construction and renovation/retrofits.

Sales of our products and services depend significantly on the level of activity in new construction and renovation/retrofits.

Declines in general economic activity, appropriations, and regulations, including tax and trade policy and other political uncertainties, may negatively impact new construction and renovation projects, or our ability to expand into new geographies, which in turn may impact demand for our product and service offerings.

8 unchanged sentences

Supply chain disruptions for certain components, including microchips and electronics, have resulted in higher prices for significant commodities and materials, as well as increased warehousing, freight, and container costs, which have negatively impacted our business.

Although these disruptions have subsided from their peaks, future disruptions in the supply chain and shortages could affect our ability to procure components for our products on a timely basis, or at all, or could require us to commit to increased purchases and provide longer lead times to secure critical components by entering into longer term guaranteed supply agreements.

Future disruptions in the supply chain and shortages could affect our ability to procure components for our products on a timely basis, or at all, or could require us to commit to increased purchases and provide longer lead times to secure critical components by entering into longer term guaranteed supply agreements.

Alternatively, supply chain disruptions and shortages could require us to rely on relatively high-cost spot market purchases for certain materials or products.

6 unchanged sentences

Profitability and volume could be negatively impacted by limitations inherent within the supply chain of certain of these component parts, including competitive, governmental, and legal limitations, natural disasters, and other events that could impact both supply and price.

Additionally, we are dependent on certain service providers for

key operational functions.

Additionally, we are dependent on certain service providers for key operational functions.

While there are a number of suppliers of these services, the cost to change service providers and set up new processes could be significant.

6 unchanged sentences

These competitors may vertically integrate and begin offering total solution packages that directly compete with our offerings.

Certain global and more diversified electrical manufacturers as well as certain global technology and building solution providers may be able to obtain a competitive advantage, either through internal development or acquisitions, over us by offering broader and more integrated solutions utilizing electrical, lighting, controls, building automation solutions, and data analytics, and small startup companies may offer more localized product sales and support services within individual regions.

Certain global and more diversified electrical manufacturers as well as certain global technology and building solution providers may be able to obtain a competitive advantage, either through internal development or acquisitions, over us by providing broader offerings that utilize a combination of products and/or services, and small startup companies may offer more localized product sales and support services within individual regions.

We may be unable to sustain significant customer and/or channel partner relationships.

Relationships with customers are directly impacted by our ability to deliver quality products and services.

Although no individual customer exceeded 10% of net sales during fiscal 2024, the loss of or a substantial decrease in the volume of purchases by certain larger customers could harm our business in a meaningful manner.

Although no individual customer exceeded 10% of net sales during fiscal 2025, 2024, or 2023, the loss of or a substantial decrease in the volume of purchases by certain larger customers could harm our business in a meaningful manner.

We have relationships with channel partners such as electrical distributors, home improvement retailers, independent sales agencies, system integrators, and value-added resellers.

1 unchanged sentence

We could be adversely affected by external disruptions, including geopolitical and/or other conditions, to our operations.

Disruptions to our operations including, but not limited to, labor disputes, strikes, workplace violence, public health crises, pandemics and epidemics, climate change, brown outs and other power outages, earthquakes, fires, floods, explosions, terrorism, adverse weather conditions, water scarcity, cyber-attacks, civil or political disruptions, or other catastrophic events such as war, insurrection, or natural disasters, leading to production interruptions in our or one or more of our suppliers’ facilities could adversely affect us.

Disruptions to our operations including, but not limited to, labor disputes, strikes, workplace violence, public health crises, pandemics and epidemics, climate change, brown outs and other power outages, earthquakes, fires, floods, extreme precipitation, explosions, terrorism, adverse weather conditions, water scarcity, cyber-attacks, civil or political disruptions, or other catastrophic events such as war, insurrection, or natural disasters, leading to production interruptions in our or one or more of our suppliers’ facilities could adversely affect us.

Approximately 55% of our finished products are manufactured in Mexico, a country that periodically experiences heightened civil unrest or may experience trade disputes with the U.S., both of which could cause a disruption of the supply of products to or from these facilities.

6 unchanged sentences

We could incur uninsured losses and liabilities arising from such events, including damage to our reputation, loss of customers, and substantial losses in operational capacity.

Current global conflicts, such as the those between Russia and Ukraine as well as within the Middle East, have created substantial uncertainty in the global economy, including sanctions and penalties imposed on certain countries from several governments.

While we do not have operations in these locations and do not have significant

direct exposure to customers and vendors in those countries, we are unable to predict the impact that these actions will have on the global economy or on our financial condition, results of operations, and cash flows.

Company operating systems, information systems, or devices have experienced, and may experience in the future, a failure, a compromise of security, or a violation of data privacy laws or regulations, which could adversely impact our operations as well as the effectiveness of internal controls over operations and financial reporting.

Current global conflicts, such as those between Russia and Ukraine as well as within the Middle East, have created substantial uncertainty in the global economy, including sanctions and penalties imposed on certain countries and persons by several governments.

While we do not have operations in these locations and do not have significant direct exposure to customers and vendors in those countries, we are unable to predict the impact that these actions will have on the global economy or on our financial condition, results of operations, and cash flows.

Company operating systems, information systems, or devices have experienced, and may experience in the future, a failure or a compromise of security, which could adversely impact our operations as well as the effectiveness of internal controls over operations and financial reporting.

We are highly dependent on various software and automated systems to record and process operational and financial transactions.

3 unchanged sentences

We may also be subject to disruptions of systems arising from events that are wholly or partially beyond our control (for example, natural disasters, acts of terrorism, cyber-attacks, including but not limited to hacking, malware, ransomware attacks, denial-of-service attacks, social engineering, exploitation of internet-connected devises, and other attacks, epidemics, computer viruses, and electrical/telecommunications outages).

While prior compromises of our security have not had, in the aggregate, a material impact on the Company’s operations and financial condition, the Company expects events of this nature to continue as cyber-attacks are becoming more sophisticated and frequent, and the techniques used in such attacks change rapidly.

As artificial intelligence (“AI”) technologies advance, new and increasingly sophisticated attack methods are emerging, including fraud involving impersonation technologies or other forms of generative automation that enhance the scale and effectiveness of cyber threats.

The techniques used in such attacks change rapidly, and certain vulnerabilities or attack methods may go undetected until after they

are already deployed, potentially allowing them to persist within our systems for extended periods.

The Company monitors its data, information technology, and personnel usage of Company systems to reduce these risks and continues to do so on an ongoing basis for any current or potential threats.

3 unchanged sentences

There can be no assurance that our efforts to protect our data and information technology will prevent such compromises of security.

We also provide and maintain technology to enable lighting controls and building technology systems.

We also provide and maintain technology to enable lighting controls, building technology systems, and audio-video platforms.

In addition to the risks noted above, there are other risks associated with these customer offerings.

For example, a customer may depend on integral information from, or functionality of, our technology to support that customer’s other systems, such that a failure of our technology could impact those systems, including by loss or destruction of data.

Likewise, a customer’s failure to properly configure, update, segregate, or upgrade its own network and integrations with our technology are outside of our control and could result in a failure in functionality or security of our technology.

Likewise, a customer’s failure to properly configure, update, segregate, or upgrade its own network and integrations with our technology is outside of our control and could result in a failure in functionality or security of our technology.

We and certain of our third-party vendors may receive and store personal information in connection with human resources operations, customer offerings, and other aspects of the business.

A material network breach in the security of these systems could include the theft of intellectual property, the unauthorized release, gathering, monitoring, misuse, loss, change, or destruction of our or our customers', suppliers', or other third-party's confidential, proprietary or personally identifying information, other disruptions of our customers' or other third parties' business operations.

A material network breach in the security of these systems could include the theft of intellectual property, the unauthorized release, gathering, monitoring, misuse, loss, change, or destruction of our or our customers', suppliers', or other third-party's confidential, proprietary or personally identifiable information, other disruptions of our customers' or other third parties' business operations.

To the extent that any disruption or security breach results in a loss or damage to our data, or an inappropriate disclosure of information, it could cause significant damage to our reputation, affect relationships with our customers, employees, and others, or lead to claims against us.

1 unchanged sentence

In addition, we may incur significant costs, regulatory fines, or penalties, or be required to take actions, to protect against damage caused by these disruptions or security breaches.

We are also subject to an increasing number of evolving and uncertain data privacy and security laws and regulations that impose requirements on us and our technology prior to certain use or transfer, storing, processing, disclosure, and protection of data and prior to sale or use of certain technologies.

Changes in data privacy laws and our ability to comply with them could adversely impact our operations

We are subject to an increasing number of evolving and uncertain data privacy and security laws and regulations that impose requirements on us and our technology prior to certain use or transfer, storing, processing, disclosure, and protection of data and prior to sale or use of certain technologies.

Failure to comply with such laws and regulations could result in the imposition of fines, penalties, and other costs.

New privacy and security laws are frequently enacted.

New privacy and security laws are

frequently enacted.

Inconsistencies between the interpretation and the practical application of both existing and new laws are common across jurisdictions.

20 unchanged sentences

As we expand our service and solutions offerings, reliance on the technical infrastructure to provide services to customers will increase.

If we fail to appropriately manage and secure the technical infrastructure required, customers could experience service outages or delays in implementation of services.

If we fail to appropriately manage and secure the technical infrastructure required, customers could experience service outages or delays in the implementation of services.

If we are unable to manage and mitigate these risks, we could incur liabilities and other losses.

1 unchanged sentence

We utilize strategic partners and third-party relationships in order to operate and grow our business.

For instance, we utilize third parties for contract manufacturing of certain products, subcontract installation and commissioning, as well as perform certain selling, distribution, and administrative functions.

For instance, we utilize third parties for contract manufacturing of certain products, subcontract installation, and commissioning, as well as for performing certain selling, distribution, and administrative functions.

We cannot control the actions or performance, including product quality, of these third parties and therefore, cannot be certain that we or our end-users will be satisfied.

Any future actions of or any failure to act by any third party on which our business relies could cause us to incur losses or interruptions in our operations.

Any future actions of or any failure to act by any third party on which our business relies could cause us to incur losses or interruptions to our operations.

In addition, we act as a general contractor in certain relationships with third parties, and as such are subject to risks applicable to general contractors.

2 unchanged sentences

Our operations, as well as those of key vendors, are therefore subject to regulatory, economic, political, military, and other events in countries where these operations are located.

In addition to the risks that are common to both our domestic and

international operations, we face risks specifically related to our foreign operations and sourcing activities, including but not limited to:

In addition to the risks that are common to both our domestic and international operations, we face risks specifically related to our foreign operations and sourcing activities, including but not limited to:

exposure to foreign currency fluctuations;

6 unchanged sentences

Additionally, if we expand our global footprint into new geographies or territories, our exposure to these risks may increase.

We source certain components and approximately 17% of our finished goods from Asia, a significant portion of which are subject to import tariffs.

We source certain components and finished goods from countries outside of the United States, some of which are subject to import tariffs.

These tariffs could increase in future periods resulting in higher costs and/or lower demand.

4 unchanged sentences

In addition, if our Mexican facilities cease to qualify for Maquiladora status or if the Mexican government adopts additional adverse changes to the program, including nationalization, our manufacturing costs in Mexico could increase.

We are also subject to certain other laws and regulations affecting our international operations, including laws and regulations such as the United States, Mexico, Canada Free Trade Agreement (“USMCA”) which, among other things, provide certain beneficial duties and tariffs for qualifying imports and exports, subject to compliance with the applicable classification and other requirements.

A majority of our sales are subject to USMCA.

In addition, the US government has initiated or is considering imposing tariffs on certain foreign goods, including steel and aluminum.

Related to this action, certain foreign governments, including China, have instituted or are considering imposing tariffs on certain U.S.

We are also subject to certain other laws and regulations affecting our international operations, including laws and regulations such as the United States-Mexico-Canada Agreement (“USMCA”), which, among other things, provide certain beneficial duties and preferential tariff treatment for qualifying imports and exports, subject to compliance with the applicable classification and other requirements.

A large portion of our sales are impacted by the USMCA.

In addition, the U.S.

government has initiated or is considering imposing tariffs on certain foreign goods, including steel, copper, and aluminum.

Increased and/or proposed tariffs by the United States have led, and may continue to lead, to the imposition of retaliatory tariffs by China and other countries.

It remains unclear what the U.S.

2 unchanged sentences

economy or certain sectors therein, and, could adversely impact our business.

The evolution of our products, complexity of our supply chain, and reliance on third-party vendors such as customs brokers and freight vendors, which may not have effective processes and controls to enable us to fully and accurately comply with such requirements, could subject us to liabilities for past, present, or future periods.

The evolution of our products, the complexity of our supply chain, and our reliance on third-party vendors such as customs brokers and freight vendors, which may not have effective processes and controls to enable us to fully and accurately comply with such requirements, could subject us to liabilities for past, present, or future periods.

Such liabilities could adversely impact our business.

1 unchanged sentence

Some of these risks, including but not limited to foreign exchange rates, violations of laws, and higher costs associated with changes in regulation, could adversely impact our business.

We are subject to exchange rate fluctuations, which could adversely impact our business.

We are subject to fluctuations in foreign currency exchange rates.

We engage in cross-border transactions through operations in multiple countries, which increases our exposure to exchange rate volatility.

Significant changes in exchange rates relative to the U.S.

dollar could adversely affect our pricing competitiveness, cost structure and overall financial performance.

In particular, a stronger U.S.

dollar could reduce the competitiveness of our products in international markets.

Conversely, a weaker U.S.

dollar could raise the cost of imported inventory, materially increasing the cost of goods sold, which could adversely impact our business.

Our business could be negatively impacted by social impact and sustainability matters.

5 unchanged sentences

These initiatives, targets, and goals could be difficult and expensive to implement, and we could be criticized for the accuracy, adequacy, or completeness of the disclosure thereof.

Further, statements about our ESG initiatives, targets, and goals, and progress against those targets and goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, as well as assumptions, estimates and climate scenarios that are subject to change in the future.

In addition, we could be criticized or subject to litigation for the

scope or nature of such initiatives, targets, or goals, or for any revisions to such targets or goals.

Further, statements about our ESG initiatives, targets, and goals, and progress against those targets and goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions, estimates, and climate scenarios that are subject to change in the future.

In addition, we could be criticized or subject to litigation for the scope or nature of such initiatives, targets, or goals, or for any revisions to such targets or goals.

If our ESG-related data, processes, and reporting are incomplete or inaccurate, or if we fail, or are perceived to fail, to achieve progress with respect to our ESG targets or goals on a timely basis, or at all, our reputation, business, financial performance, and growth could be adversely affected.

We have begun to incorporate artificial intelligence capabilities in our product offerings and operations, and challenges with properly managing the use of artificial intelligence and machine learning could result in reputational harm, competitive harm, and legal liability, and adversely affect our results of operations, financial condition, and/or cash flows.

We have begun incorporating artificial intelligence (“AI”) capabilities into certain product offerings as well as utilizing AI as part of our operational processes.

We have begun to incorporate artificial intelligence (“AI”) capabilities in our product offerings and operations, and challenges with properly managing the use of AI and machine learning could result in reputational harm, competitive harm, and legal liability and adversely affect our results of operations, financial condition, and/or cash flows.

We have begun incorporating AI capabilities into certain product offerings as well as utilizing AI as part of our operational processes.

These features may become more important over time.

Our competitors or other third parties may incorporate AI into their products more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations.

Additionally, if the content, analyses, or recommendations that AI applications assist in producing are or are alleged to be deficient, inaccurate, or biased, we could be subject to competitive risks, potential legal liability, and reputational harm, and our business, financial condition, and results of operations may be adversely affected.

Many known and unknown risks related to AI exist.

Currently recognized risks include issues related to accuracy, bias, toxicity, intellectual property infringement or misappropriation, data privacy and cybersecurity, and data provenance.

If the content, analyses, or recommendations that AI applications assist in producing are or are alleged to be deficient, inaccurate, or biased, we could be subject to competitive risks, potential legal liability, and reputational harm, and our business, financial condition, and results of operations may be adversely affected.

The use of AI capabilities may also result in cybersecurity incidents.

7 unchanged sentences

the Safe Harbor data privacy program between the U.S.

and European Union;

the United States-Mexico-Canada-Free Trade Agreement (“USMCA”);

and the European Union;

regulations from the Occupational Safety and Health Administration agency;

7 unchanged sentences

In addition, the U.S.

Congress and federal and state regulatory agencies have considered other legislation and regulatory proposals to reduce emissions of GHGs, and many states and other jurisdictions have already taken legal measures to reduce emissions of GHGs, primarily through the development of GHG inventories, GHG permitting, and/or regional GHG cap-and-trade programs.

GHG inventories, GHG permitting, and/or regional GHG cap-and-trade programs.

It is uncertain whether, when, and in what form a federal mandatory carbon dioxide emissions reduction program, or other state programs, may be adopted.

Similarly, certain countries have adopted the Kyoto Protocol, and in February 2021, the U.S.

rejoined the Paris Agreement.

Similarly, certain countries have adopted the Kyoto Protocol and joined the Paris Agreement.

In addition, permits and environmental controls are required for certain of our operations to limit air and water pollution, and these permits are subject to modification, renewal, and revocation by issuing authorities.

3 unchanged sentences

We may be affected by those or other future standards, laws, or regulations, including those imposed in response to energy, climate change, our carbon footprint, product functionality, geopolitical, corporate social responsibility, or similar concerns.

As customers become increasingly concerned about the environmental impact of their purchases,

if we fail to keep up with changing regulations or innovate or operate in ways that minimize the energy use of or other impacts of our products or operations, customers may choose more energy efficient or sustainable alternatives.

As customers become increasingly concerned about the environmental impact of their purchases, if we fail to keep up with changing regulations or innovate or operate in ways that minimize the energy use of or other impacts of our products or operations, customers may choose more energy efficient or sustainable alternatives.

These standards, laws, or regulations may also impact our costs of operation, the sourcing of raw materials, and the manufacture and distribution of our products and may place restrictions and other requirements or impediments on the products and solutions we can sell in certain geographical locations or on the willingness of certain investors to own our shares.

16 unchanged sentences

Many of our products and solutions have become more complex in recent years and include more sophisticated and sensitive electronic components.

A problem or issue relating to any individual component could have the effect of creating a compounded problem for an integrated solution, which could result in significant costs and losses.

A problem or issue relating to any

individual component could have the effect of creating a compounded problem for an integrated solution, which could result in significant costs and losses.

We have increasingly manufactured certain of those components and products in our own facilities.

26 unchanged sentences

It is uncertain whether, when, and in what form a federal mandatory carbon dioxide emissions reduction program, or other state programs, may be adopted.

Similarly, certain countries have adopted the Kyoto Protocol, and in February 2021, the U.S.

rejoined the Paris Accord.

Similarly, certain countries have adopted the Kyoto Protocol and joined the Paris Accord.

These and other existing or potential international initiatives and regulations could affect our international operations.

1 unchanged sentence

These actions could also increase costs associated with our operations, including costs for raw materials and transportation.

We may also be subject to consumer lawsuits or enforcement actions by governmental authorities if our ESG claims relating to product marketing are inaccurate.

We may also be subject to consumer lawsuits or enforcement actions by governmental authorities if our ESG claims relating to product

marketing are inaccurate.

It is uncertain what laws will be enacted, and therefore we cannot predict the potential impact of such laws on our future financial condition, results of operations, and cash flows.

4 unchanged sentences

Our consolidated tax obligation is driven largely by our corporate structure as well as domestic and international intercompany arrangements.

We operate in several jurisdictions, including but not limited to, the United States, Mexico, Canada, and Europe.

We operate in several jurisdictions, including but not limited to, the United States, Mexico, Canada, Europe, and Asia.

Certain jurisdictions may aggressively interpret their laws, regulations, and policies in an effort to raise additional tax revenue, and international tax authorities may seek to assert extraterritorial taxing rights on our transactions or operations.

15 unchanged sentences

Significant changes in actual investment returns on defined benefit plan assets, discount rates, and other factors could adversely affect our comprehensive income and the amount of contributions we are required to make to the defined benefit plans in future periods.

As our defined benefit plan assets and liabilities are marked-to-market on an annual basis, large non-cash gains or losses could be recorded in the fourth quarter of each fiscal year.

As our defined benefit plan assets and liabilities are marked-to-market on an

annual basis, large non-cash gains or losses could be recorded in the fourth quarter of each fiscal year.

In accordance with United States generally accepted accounting principles, the income or expense for the plans is calculated using actuarial valuations.

2 unchanged sentences

Unfavorable changes in these factors could adversely affect our results.

Additionally, a planned termination of any of our defined retirement benefit plans may not be approved timely, or at all, by the appropriate regulatory authorities;

Additionally, planned or actioned termination or settlement activities of any of our defined retirement benefit plans may not be approved timely, or at all, by the appropriate regulatory authorities;

may result in additional non-cash charges within our results of operations as well as additional administrative costs;

and may not yield the desired benefits.

and/or may not yield the desired benefits.

Our business and operations are subject to interest rate risks, and changes in interest rates can reduce demand for our products and increase borrowing costs.

Rising interest rates could have a negative effect on overall economic activity, and could impair the ability of real estate developers, property owners, and contractors to obtain reasonable costs of capital on borrowed funds, resulting in depressed levels of construction and renovation projects and a resulting decrease in demand for our products and services.

Rising interest rates could have a negative effect on overall economic activity, and could impair the ability of real estate developers, property owners, contractors, and system integrators to obtain reasonable costs of capital on borrowed funds, resulting in depressed levels of construction and renovation projects and a resulting decrease in demand for our products and services.

Rising interest rates could also impair our customers’ ability to repay obligations to us.

1 unchanged sentence

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