What changed in this filing

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Item 1A. Risk Factors

2025-02-20 compared with 2024-02-22 · 66 added, 70 removed, 92 unchanged (60% of the section changed)

Our business, financial condition, results of operations and cash flows may be affected by a number of factors including but not limited to those set forth below.

Our business, financial condition, results of operations and cash flows may be affected by several factors including but not limited to those set forth below.

This discussion should be considered in conjunction with the discussion under the caption “Forward-Looking Information” preceding Part I, the information set forth under Item 1, “Business” and with the discussion of the business included in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These risks comprise the material risks of which we are aware.

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Macroeconomic fluctuations may harm our business, results of operations and stock price.

Our business, financial condition, operating results and cash flows may be adversely affected by changes in global economic conditions and geopolitical risks, including credit market conditions, trade policies, levels of consumer and business confidence, commodity prices and availability, inflationary pressures, exchange rates, levels of government spending and deficits, political conditions, extraordinary public health issues such as large-scale health epidemics or pandemics and other challenges that could affect the global economy including impacts associated with any economic sanctions imposed against Russia, including any territory within the Ukraine that Russia has occupied, in response to their invasion of the Ukraine.

These economic and geopolitical conditions could affect businesses such as ours in a number of ways.

Such conditions could have an adverse impact on our flexibility to react to changing economic and business conditions and on our ability to fund our operations, grow through operations or refinance maturing debt balances at economically favorable interest rates.

In addition, restrictions on credit availability could adversely affect the ability of our customers to obtain financing for significant purchases and could result in decreases in or cancellation of orders for our products and services as well as impact the ability of our customers to make payments.

Similarly, credit restrictions may adversely affect our supplier base and increase the potential for one or more of our suppliers to experience financial distress or bankruptcy.

Our business, financial condition, operating results and cash flows may be adversely affected by changes in global economic conditions and geopolitical risks, including credit market conditions, trade policies, levels of consumer and business confidence, commodity prices and availability, inflationary pressures, exchange rates, levels of government spending and deficits, political conditions, market instability, extraordinary public health issues such as large-scale health epidemics or pandemics and other challenges that could affect the global economy including impacts associated with any economic sanctions imposed on countries or regions in which we are doing business.

Such conditions could have an adverse impact on our flexibility to react to changing economic and business conditions and on our ability to fund our operations for growth or refinance maturing debt balances at economically favorable interest rates.

In addition, such conditions could adversely affect the ability of our customers to obtain financing for significant purchases, result in decreases in or cancellation of orders for our products and services, and impact the ability of our customers to make payments.

Similarly, such macroeconomic fluctuations may adversely affect our supplier base and increase the potential for one or more of our suppliers to experience financial distress or bankruptcy.

Demand for our products is variable and subject to factors beyond our control, which could result in unanticipated events significantly impacting our results of operations.

A substantial portion of our sales is concentrated in industries that are cyclical in nature or subject to market conditions which may cause customer demand for our products to be volatile.

A substantial portion of our sales is concentrated in industries that are subject to market conditions which may cause customer demand for our products to be volatile.

Global trends in the use of cash as well as increased durability of banknotes could impact demand.

Reductions in demand by these industries would reduce the sales and profitability of our business.

Our CPI business could be affected by sustained weakness in certain geographic markets or certain end markets such as gaming, retail or banking, as well as low employment levels, office occupancy rates and factors affecting vending operator profitability such as higher fuel, food and equipment financing costs;

Our CPI segment could be affected by sustained weakness in certain geographic markets or certain end markets such as gaming, retail or banking, as well as low employment levels, office occupancy rates and factors affecting vending operator profitability such as higher fuel, food and equipment financing costs;

results could also be impacted by unforeseen advances in payment processing technologies.

In addition, our results in Currency are subject to significant variability due to the timing and size of contract awards by central banks for banknote production and actual order rates, particularly with the U.S.

Fluctuation in the prices of, or our ability to source, our components and raw materials, and delays in the distribution of our products could adversely affect our results of operations.

Our operations require significant amounts of necessary components and raw materials that are critical to our profitability and can fluctuate in price.

Our costs are affected by price fluctuations of metals such as steel and copper as well as other raw materials such as electronic components, cotton and flax.

We have seen a period of sustained price increases for components and raw materials, which has resulted in, and may continue to result in, increased costs for us.

We deploy a continuous, company-wide process to secure an adequate supply of raw materials at prices which are favorable to us, to source our components and raw materials from fewer suppliers, and to obtain parts from suppliers in low-cost countries where possible.

If we are unable to timely source these components or raw materials, whether resulting from more stringent regulatory requirements;

supplier financial condition;

disruptions in transportation;

an outbreak of a severe public health pandemic;

severe weather;

or the occurrence or threat of wars, including Russia’s invasion of Ukraine or other conflicts, our operations may be disrupted, or we could experience a delay or temporary stoppage in certain of our manufacturing operations.

If the prices of critical components and raw materials continue to increase or we are unable to pass increased costs of components and raw materials to customers, our results of operations could be adversely affected.

Additionally, a disruption within our supply chain network could adversely affect our results of operations.

Information systems and technology networks failures and breaches in data security, personally identifiable and other information, non-compliance with our contractual or other legal obligations regarding such information, or a violation of our privacy and security policies with respect to such information, could adversely affect us.

We are dependent on information technology networks and systems, including the Internet, to process, transmit and store electronic information, and, in the normal course of our business, we collect and retain certain types of personally identifiable and other information pertaining to our customers, stockholders and employees.

The legal, regulatory and contractual environment surrounding information security and privacy is constantly evolving and companies that collect and retain such information are under increasing attack by cyber-criminals around the world.

A theft, loss, fraudulent use or misuse of customer, vendor, employee or our proprietary data by cybercrime or otherwise, non-compliance with our contractual or other legal obligations regarding such data or a violation of our privacy and security policies with respect to such data could adversely impact our reputation and could result in costs, fines, litigation or regulatory action against us.

Security breaches can create system disruptions and shutdowns that could result in disruptions to our operations.

We cannot be certain that advances in criminal capabilities, new vulnerabilities or other developments will not compromise or breach the security solutions protecting our information technology, networks and systems.

A cyber-attack on our information systems technology or those of our partners, vendors, or suppliers could adversely affect our ability to process orders, maintain proper levels of inventory, collect accounts receivable and pay expenses, all of which could have an adverse effect on our results of operations, financial condition and cash flows.

Failure to effectively prevent, detect and recover from security breaches, including attacks on information technology and infrastructure by hackers;

breaches due to employee error or actions;

or other disruptions could seriously harm our operations as well as the operations of our customers and suppliers.

Such serious harm can involve, among other things, misuse of our assets, business disruptions, loss of data, unauthorized access to trade secrets and confidential business information, unauthorized access to personal information, legal claims or proceedings, reporting errors, processing inefficiencies, negative media attention, reputational harm, loss of sales, remediation and increased insurance costs, and interference with regulatory compliance.

We have experienced and expect to continue to experience some of these types of cybersecurity threats and incidents, which could be material in the future.

In addition, our results in the SAT segment are subject to significant variability due to the timing and size of contract awards by central banks for banknote production and actual order rates, particularly with the U.S.

We conduct a substantial portion of our business outside the U.S.

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• economic and political instability, including the risk of geopolitical conflict or territorial incursions, in the countries and regions in which we operate;

• the risks of fluctuations in foreign currency exchange rates, primarily the euro, the British pound, the Japanese yen, and the Swedish krona, could adversely affect our reported results, as amounts earned in other countries are translated into U.S.

• the risks of fluctuations in foreign currency exchange rates, primarily the Japanese yen, the British pound, the euro, and the Swedish krona, could adversely affect our reported results, as amounts earned in other countries are translated into U.S.

dollars for reporting purposes;

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economy, which in turn could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We may be unable to successfully develop and introduce new products, which would limit our ability to grow and maintain our competitive position and adversely affect our financial condition, results of operations and cash flow.

Our growth depends, in part, on continued sales of existing products, as well as the successful development and introduction of new products or technologies, which face the uncertainty of customer acceptance and reaction from competitors.

Any delay in the development or launch of a new product could result in our not being the first to market, which could compromise our competitive position.

The inability of new products to meet targeted performance measures, or the discovery of a successful counterfeit of our security technology products, could cause reputational harm and hurt future sales.

Further, the development and introduction of new products may require us to make investments in specialized personnel and capital equipment, increase marketing efforts and reallocate resources away from other uses.

We also may need to modify our systems and strategy in light of new products that we develop.

If we are unable to develop and introduce new products in a cost-effective manner or otherwise manage effectively the operations related to new products, our financial condition, results of operations and cash flows could be adversely impacted.

We compete with other industrial technology businesses for highly qualified employees in the countries in which we operate, and we may not be able to retain our personnel or hire and retain additional personnel needed for us to sustain and grow our business as planned.

Our business segments and corporate offices are dependent upon highly qualified personnel, and we generally are dependent upon the continued efforts of key management employees.

A number of factors may adversely affect the labor force available to us or increase labor costs, including high employment levels, federal unemployment subsidies, and other government regulations.

We have recently observed an overall tightening and increasingly competitive labor market which has, and could continue to result in, higher compensation costs.

While we believe we have a robust intellectual capital process, we may have difficulty retaining key personnel or locating and hiring additional qualified personnel.

The loss of the services of any of such personnel or our failure to attract and retain other qualified and experienced personnel on acceptable terms could impair our ability to successfully sustain and grow our business, which could have an adverse effect on our results of operations and financial condition.

Security breaches can create system disruptions and shutdowns that could result in disruptions to our operations.

We cannot be certain that advances in criminal capabilities, including the use of artificial intelligence, new vulnerabilities or other developments will not compromise or breach the security solutions protecting our information technology, networks and systems.

Failure to effectively prevent, detect and recover from security breaches, including attacks on information technology and infrastructure by hackers, viruses, breaches due to employee error or actions, or other disruptions, could seriously harm our operations as well as the operations of our customers and suppliers.

We have experienced and expect to continue to experience some of these types of cybersecurity threats and incidents, which could be material in the future.

We may be unable to identify or to complete acquisitions, or to successfully integrate the businesses we acquire.

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Our ability to achieve our growth goals depends in part upon our ability to identify and successfully acquire, finance and integrate companies and businesses at appropriate prices and realize anticipated cost savings.

Fluctuation in the prices of, or our ability to source, our components and raw materials, and delays in the distribution of our products could adversely affect our results of operations.

Our operations require significant amounts of necessary components and raw materials that are critical to our profitability and can fluctuate in price.

Our costs are affected by price fluctuations of metals such as steel and copper as well as other raw materials such as electronic components, cotton and flax.

We have seen a period of sustained price increases for certain raw materials and increased trade tariffs may result in increased costs for us.

If we are unable to timely source these components or raw materials, whether resulting from more stringent regulatory requirements;

supplier financial condition;

disruptions in transportation;

an outbreak of a severe public health pandemic;

severe weather;

or the occurrence or threat of wars, our operations may be disrupted, or we could experience a delay or temporary stoppage in certain of our manufacturing operations.

Additionally, a disruption within our supply chain network could adversely affect our results of operations.

Our business segments and corporate offices are dependent upon highly qualified personnel, and we generally are dependent upon the continued efforts of key management employees.

Several factors may adversely affect the labor force available to us or increase labor costs, including high employment levels, federal unemployment subsidies, and other government regulations.

We have recently observed an overall tightening and increasingly competitive labor market which has, and could continue to result in, higher compensation costs.

While we believe we have a robust intellectual capital process, we may have difficulty retaining key personnel or locating and hiring additional qualified personnel.

Any delay in the development or launch of a new product could result in our not being the first to market, which could compromise our competitive position.

We also may need to modify our systems and strategy considering new products that we develop.

Our businesses are subject to governmental regulation;

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Failure to comply with any of these regulations could result in civil and criminal liability, monetary and non-monetary penalties, fines, disruptions to our business, limitations on our ability to export products and services, and damage to our reputation.

Our operations expose us to the risk of litigation, claims and investigations, including those related to product liability and warranties, and employee, commercial, intellectual property and environmental matters, that could adversely affect our

financial condition, results of operations, cash flows and reputation.

Our business could be harmed if we are unable to protect our intellectual property.

We rely on a combination of trade secrets, patents, trademarks, copyrights and confidentiality procedures to protect our products and technology.

Existing trade secret, patent, trademark and copyright laws offer only limited protection.

Our patents could be invalidated or circumvented.

In addition, others may develop substantially equivalent, or superseding proprietary technology, or competitors may offer equivalent non-infringing products in competition with our products, thereby substantially reducing the value of our proprietary rights.

The laws of some foreign countries in which our products are or may be manufactured or sold may not protect our products or intellectual property rights to the same extent as do the laws of the U.S.

We cannot assure that the steps we take to protect our intellectual property will be adequate to prevent misappropriation of our technology.

We could incur significant and/or unexpected costs in our efforts to avoid, manage, defend and litigate intellectual property matters.

Our inability to protect our intellectual property could have an adverse effect on our financial condition, results of operations and cash flows.

We may not have sufficient insurance coverage or indemnification rights to cover such claims.

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We are committed to continuous productivity improvement, and we continue to evaluate opportunities to reduce costs, simplify or improve global processes, and increase the reliability of order fulfillment and satisfaction of customer needs.

In order to operate more efficiently and control costs, from time to time we execute restructuring activities, which include workforce reductions and facility consolidations.

For example, we recorded pre-tax restructuring charges in 2023 and 2022 related to our 2022 restructuring program.

To operate more efficiently and control costs, from time to time we execute restructuring activities, which include workforce reductions and facility consolidations.

For example, we recorded pre-tax restructuring charges in 2024 and 2023.

While these are proactive actions to increase our productivity and operating effectiveness, our inability to adequately respond to potential declines in global demand for our products and services and properly align our cost base could have an adverse effect on our financial condition, results of operations and cash flows.

Our business could be harmed if we are unable to protect our intellectual property.

We rely on a combination of trade secrets, patents, trademarks, copyrights and confidentiality procedures to protect our products and technology.

Existing trade secret, patent, trademark and copyright laws offer only limited protection.

Our patents could be invalidated or circumvented.

The laws of some foreign countries in which our products are or may be manufactured or sold may not protect our products or intellectual property rights to the same extent as do the laws of the U.S.

We cannot assure that the steps we take to protect our intellectual property will be adequate to prevent misappropriation of our technology.

We could incur significant and/or unexpected costs in our efforts to successfully avoid, manage, defend and litigate intellectual property matters.

Our inability to protect our intellectual property could have an adverse effect on our financial condition, results of operations and cash flows.

We face significant competition which may adversely impact our financial condition, results of operations, and cash flows in the future.

While we are a principal competitor in most of our markets, all of our markets are highly competitive.

While we are a principal competitor in most of our markets, all our markets are highly competitive.

The competitors in many of our business segments can be expected in the future to improve technologies, reduce costs and develop and introduce new products.

The ability of our business segments to achieve similar advances will be important to our competitive positions.

Competitive pressures, including those discussed above, could cause one or more of our business segments to lose

market share or could result in significant price erosion, either of which could have an adverse effect on our financial condition, results of operations and cash flows.

Competitive pressures, including those discussed above, could cause one or more of our business segments to lose market share or could result in significant price erosion, either of which could have an adverse effect on our financial condition, results of operations and cash flows.

Additional tax expense or exposures could affect our financial condition, results of operations and cash flows.

We are subject to income taxes in the U.S.

and various international jurisdictions.

Our financial condition, results of operations and cash flow could be affected by changes to any or all the following:

tax laws, regulations, accounting principles and judicial rulings, the geographic mix of our earnings, the valuation of our deferred tax assets and liabilities, and the results of audits and examinations of previously filed tax returns.

Our future results of operations and financial condition could be adversely impacted by intangible asset impairment charges.

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Future determinations of significant write-offs of goodwill or intangible assets as a result of an impairment test or any accelerated amortization of other intangible assets could have an adverse effect on our financial condition and results of operations.

Additional tax expense or exposures could affect our financial condition, results of operations and cash flows.

We are subject to income taxes in the U.S.

and various international jurisdictions.

Our financial condition, results of operations and cash flow could be affected by changes to any or all of the following:

If our internal controls are found to be ineffective, our financial results or our stock price may be adversely affected.

We believe that we currently have adequate internal control procedures in place for future periods, including processes related to newly acquired businesses;

We believe that we have adequate internal control procedures in place for future periods, including processes related to newly acquired businesses;

however, increased risk of internal control breakdowns generally exists in any business environment that is decentralized such as ours.

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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