What changed in this filing

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Item 1A. Risk Factors

2025-03-11 compared with 2024-03-12 · 60 added, 42 removed, 206 unchanged (33% of the section changed)

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If any of these risks, or any risks not presently known to the Company or currently deemed immaterial by the Company, materialize, the Company’s business, reputation, stock price, financial condition or results of operations could be materially adversely affected, and the Company may not be able to achieve its goals or expectations.

This section should be read in conjunction with Part II, Item 7, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” and the consolidated financial statements and accompanying notes in Item 8, Financial Statements and Supplementary Data of this Form 10-K.

This section should be read in conjunction with Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and the consolidated financial statements and accompanying notes in Item 8, Financial Statements and Supplementary Data, of this Form 10-K.

Risks Related to Competition and Global Operations

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There is no guarantee that the Company’s products will be accepted by foreign customers or how long it may take to develop sales of the Company’s products in these foreign markets.

Tariffs, trade sanctions and political instability may impact the availability or cost of raw materials, which could adversely affect our margins, ability to meet customer demand, business, results of operations and financial condition.

The Company obtains raw materials used in the production of its products from domestic sources, as well as from Company-affiliated and unaffiliated sources in Asia.

Changes in international trade duties and other aspects of international trade policy, both in the United States and abroad, could materially impact the cost of these raw materials.

For example, from March 2018 until March 2021, the United States imposed an additional 25% tariff under Section 232 of the Trade Expansion Act of 1962, as amended, on steel products imported into the United States.

While these tariffs have mostly been lifted on imports from countries other than China, imports from many jurisdictions are subject to limitations on volume, after which substantial tariffs will be reimposed.

The United States also imposed a 10% tariff on all aluminum imports into the United States, with initial exemptions for aluminum imported from certain U.S.

trading partners.

Such actions could increase steel and aluminum costs and decrease supply availability.

In response to the invasion of Ukraine by the military forces of the Russian Federation, the United States, the European Union, and other jurisdictions have imposed sanctions that, among other things, prohibit the importation of a wide array of commodities and products from Russia, which is a major global supplier of nickel.

Any increase in nickel, steel and/or aluminum prices, whether as a result of existing tariffs and trade policy or as a result of new tariffs or policies that may be imposed by the new presidential administration or otherwise, that is not offset by an increase in the Company’s prices could have an adverse effect on the Company’s business, financial position, results of operations or cash flows.

In addition, if the Company is unable to acquire timely nickel, steel or aluminum supplies, the Company may need to decline customer orders, which could also have an adverse effect on the business, financial position, results of operations or cash flows of the Company.

Supply chain disruptions, delays in production, and forecast inaccuracies have affected and could continue to affect our ability to meet customer demand, lead to higher costs, result in excess inventory, and could have an adverse effect on our results of operations and financial condition.

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However, from time to time, the prices and availability of these raw materials fluctuate due to changes in existing and expected rates of inflation, which could impair the Company’s ability to procure the required raw materials for its operations or increase the cost of manufacturing its products.

For example, supply shortages and supply chain disruptions originally triggered by shutdowns and other restrictions imposed to slow the spread and resurgence of COVID-19 impacted the prices and availability of certain raw materials and components used in the production of the Company’s products.

The Company may be unable to pass all of these price increases on to its customers and could experience reductions in its profit margins.

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Price reductions taken by the Company in response to customer and competitive pressures, as well as price reductions and promotional actions taken to drive demand that may not result in anticipated sales levels, could also negatively impact the Company’s business.

The Company obtains raw materials used in the production of its products from domestic sources, as well as from Company-affiliated and unaffiliated sources in Asia.

Changes in international trade duties and other aspects of international trade policy, both in the United States and abroad, could materially impact the cost of these raw materials.

The United States also imposed a 10% tariff on all aluminum imports into the United States, with initial exemptions for aluminum imported from certain U.S.

trading partners.

Such actions could increase steel and aluminum costs and decrease supply availability.

Any increase in nickel, steel and/or aluminum prices that is not offset by an increase in the Company’s prices could have an adverse effect on the Company’s business, financial position, results of operations or cash flows.

Changes in competition in the markets that the Company services could impact revenues and earnings.

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The loss of certain customers could adversely affect the Company’s business, financial condition, or results of operations until such business is replaced, and no assurances can be made that the Company would be able to regain or replace any lost customers.

Risks Related to Acquisitions and Organic Growth

Risks Related to Acquisitions, Dispositions, and Organic Growth

The inability to develop new or updated products could limit growth.

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Difficulties encountered with acquisitions may have a material adverse effect on our business, financial condition, and results of operations.

We may be unable to successfully execute or effectively integrate businesses we may acquire in the future.

We may be unable to successfully execute acquisitions or dispositions or effectively integrate businesses we may acquire in the future.

We regularly review our portfolio of businesses and pursue growth through acquisitions.

We may not be able to complete transactions on favorable terms, on a timely basis, or at all, and the success of any such acquisitions depends on our ability to combine the acquired business with our existing business in a manner that does not disrupt our and the acquired business’s ongoing relationships with customers, suppliers, and employees.

Our results of operations and cash flows may be adversely impacted by (i) the failure of acquired businesses to meet or exceed expected returns, including risk of impairment;

(ii) the failure to integrate multiple acquired businesses into the Company simultaneously and on schedule or to achieve expected synergies and (iii) the discovery of unanticipated liabilities, cybersecurity and compliance issues, labor relations difficulties or other problems in acquired businesses for which we lack contractual protections, or insurance or indemnities.

We also regularly review our operations and results to identify businesses that no longer fit within our core capabilities, offerings, and markets and that we may determine to divest.

We may not be able to complete these acquisition or disposition transactions on favorable terms, on a timely basis, or at all, and the success of any such acquisitions depends on our ability to combine the acquired business with our existing business in a manner that does not disrupt our and the acquired business’s ongoing relationships with customers, suppliers, and employees.

Our results of operations and cash flows have been and may in the future be adversely impacted by (i) the failure of acquired businesses to meet or exceed expected returns, including risk of impairment;

(ii) the failure to integrate multiple acquired businesses into the Company simultaneously and on schedule or to achieve expected synergies;

(iii) the discovery of unanticipated liabilities, cybersecurity and compliance issues, labor relations difficulties or other problems in acquired businesses for which we lack contractual protections, or insurance or indemnities;

(iv) the potential disruption of our ongoing operations and distraction of management away from oversight of these activities that may be caused by the pursuit of acquisition or disposition transactions;

(v) failure to realize the anticipated benefits and cost savings of a transaction fully or within the expected time frame, or at all.

Risks Related to Technology and Information Security

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Data breaches and other serious cybersecurity incidents have increased globally, along with the methods, techniques, and complexity of attacks, including use of viruses, ransomware and other malicious software, phishing, and other efforts to discover and exploit any design flaws, bugs, or other security vulnerabilities.

Continued geopolitical turmoil, including the ongoing conflict between Russia and Ukraine, has heightened the risk of cyberattacks.

Continued geopolitical turmoil, including the ongoing conflict between Russia and Ukraine and relations between the United States and foreign governments, has heightened the risk of cyberattacks.

We have been, and likely will continue to be, subject to such cyberattacks, although none has had a material impact on our operations.

Also, the same cybersecurity threats exist for the third parties with whom we interact and share information and cyberattacks on third parties that possess or use our customer, personnel and other information could adversely impact us in the same way as would a direct cyberattack on us.

The rapid development and adoption of AI technologies further increases these risks, both because AI can be used to enhance the capabilities of attackers and because of its potential to help those subject to cyberattacks develop more advanced security measures and defenses.

As a result, we may need to invest additional resources to protect the security of our systems.

The Company is subject to federal, state, and international laws and regulations relating to the collection, use, retention, security and transfer of personally identifiable information and individual payment data.

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If so, in addition to the possibility of fines or other penalties, this could result in an order requiring that the Company change its data practices, which could be costly, divert management attention, and have an adverse effect on the Company’s business and results of operations.

Further, any changes to laws or regulations, including new restrictions or requirements applicable to our business, or an increase in enforcement of existing laws and regulations, could expose the Company to additional costs and liability.

The Company has incurred and may continue to incur significant costs relating to compliance with these laws and regulations, including costs related to updating certain business practices and systems and ensuring continued compliance and any changes to laws, regulations or enforcement could expose the Company to additional costs and liability.

Any security breaches for which the Company is, or is perceived to be, responsible, in whole or in part, or any actual or perceived violations of data privacy laws and regulations, could subject the Company to legal claims or legal proceedings, including regulatory investigations, which could harm the Company’s reputation and result in significant litigation costs and damage awards or settlement amounts.

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In addition, new laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or the imposition of new clean-up requirements could require the Company to incur costs or become the basis for new or increased liabilities that could have a material adverse effect on our business, financial condition, and results of operations.

Natural disasters, changes in climate, geo-political events and public health crises, including pandemics (such as COVID-19) and epidemics, and any related Company or government policies or actions may negatively impact our business.

Natural disasters, changes in climate, geo-political events, and public health crises, including pandemics (such as COVID-19) and epidemics, as well as Company or government policies adopted or actions taken as a result of such events, could materially adversely affect our business and financial performance.

Natural disasters, changes in climate, geo-political events, and public health crises, including pandemics and epidemics, and any related Company or government policies or actions may negatively impact our business.

Natural disasters, changes in climate, geo-political events, and public health crises, including pandemics and epidemics, as well as Company or government policies adopted or actions taken as a result of such events, could materially adversely affect our business and financial performance.

The occurrence of one or more natural disasters, such as hurricanes, tropical storms, floods, fires, earthquakes, tsunamis, cyclones, typhoons, weather conditions such as major or extended winter storms, droughts and tornadoes, whether as a result of climate change or otherwise, severe changes in climate, geo-political events, such as war, civil unrest or terrorist attacks, or public health crises in a country in which we operate or in which our suppliers are located could result in loss of human life, significant property and equipment damage, environmental pollution, or reputational harm and could adversely affect our operations and financial performance.

Our business and operations may be disrupted if we do not respond, or are perceived not to respond, in an appropriate manner to any of these hazards and risks or any other major crisis or if we are unable to efficiently restore or replace affected operational components and capacity.

Countermeasures to address global health crises, epidemics or pandemics, such as those that were taken to reduce the spread of COVID-19, may result in reduced demand for our products;

Countermeasures to address global health crises, epidemics or pandemics may result in reduced demand for our products;

disruptions to our supply chain, the global economy or financial or commodity markets;

disruptions in our contractual arrangements with our service providers, suppliers and other counterparties;

failures by our suppliers, contract manufacturers, contractors, joint venture partners and external business partners, to meet their obligations to us;

or failures by our suppliers, contract manufacturers, contractors, joint venture partners and external business partners, to meet their obligations to us;

or reduced workforce productivity.

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Further, our insurance may not be adequate to compensate us for all resulting losses described above, and the cost to obtain adequate coverage may increase for us in the future or may not be available.

The Company could be subject to litigation, which could have a material impact on the Company’s business, financial condition, or results of operations.

The Company is from time to time subject to litigation, which could have a material impact on the Company’s business, financial condition, or results of operations.

From time to time, the Company’s operations are parties to or targets of lawsuits, claims, investigations, and proceedings, including product liability, personal injury, patent, and intellectual property, commercial, contract, and environmental and employment matters, which are defended and settled in the ordinary course of business.

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See Item 3 – Legal Proceedings of this Form 10-K for a discussion of current litigation.

The Company could be subject to additional tax liabilities.

The Company could be subject to additional or unanticipated tax liabilities.

The Company is subject to income tax laws of the United States, its states, and municipalities and those of other foreign jurisdictions in which the Company has business operations.

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or (3) recoverability of our deferred tax assets and liabilities.

Beginning in 2022, the U.S.

Due to the pace of legislative changes, any substantial changes in tax policies or legislative initiatives may materially and adversely affect our business, the taxes we are required to pay, our financial position, and results of operations.

For example, beginning in 2022, the U.S.

Tax Cuts and Jobs Act of 2017 eliminated the existing option to deduct research and development expenditures and requires taxpayers to amortize them over five years pursuant to IRC Section 174.

This requirement is expected to reduce our cash flow.

In August 2022, the United States enacted the Inflation Reduction Act of 2022 (the “IRA”) which includes a new 15% corporate minimum tax as well as a 1% excise tax on fair value of corporate stock repurchases made after December 31, 2022.

Further, in August 2022, the United States enacted the Inflation Reduction Act of 2022 (the “IRA”) which includes a new 15% corporate minimum tax as well as a 1% excise tax on fair value of corporate stock repurchases made after December 31, 2022.

The IRA could have a negative impact on our tax position.

Many countries and organizations such as the Organization for Economic Cooperation and Development are also actively considering changes to existing tax laws or have proposed or enacted new laws that could increase our tax obligations in countries where we do business or cause us to change the way we operate our business.

Many countries and organizations such as the Organization for Economic Cooperation and Development (the “OECD”) are also actively considering changes to existing tax laws or have proposed or enacted new laws that could increase our tax obligations in countries where we do business or cause us to change the way we operate our business.

Any of these developments or changes in federal, state, or international tax laws or tax rulings could adversely affect our effective tax rate and our results of operations.

For example, the OECD has released guidance covering various topics, including country-by-country reporting and an initiative that aims to standardize and modernize global tax policy.

The guidance has also established a global minimum tax of 15%, which is being or may be implemented in various jurisdictions.

[Depending on the final form of legislation and the jurisdictions which enact it, there may be significant tax consequences for us.] In addition, the U.S.

presidential administration has directed the U.S.

Department of Treasury to develop options for “protective measures” in response to tax rules imposed by non-U.S.

countries that are extraterritorial or disproportionately affect U.S.

companies (which may include taxes imposed under the OECD guidance) and legislation has been introduced that would increase U.S.

tax rates on non-U.S.

companies and investors if their home jurisdictions impose discriminatory or extraterritorial taxes on U.S.

companies, but we cannot predict whether such protective measures or legislation will be adopted or what, if any, responsive measures may be adopted by non-U.S.

We continue to monitor the effects of the IRA, the OECD guidelines and other regulatory developments on our financial conditions, operating results, and income tax rate.

Significant judgment and interpretation are required in determining the Company’s worldwide provision for income taxes.

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These laws, regulations, rules, and policies could relate to any of an array of issues including, but not limited to, data privacy and security, environmental, tax, intellectual property, trade secrets, product liability, contracts, antitrust, employment, securities, import/export, and unfair competition.

These laws and regulations may differ in different jurisdictions and are subject to change.

These laws and regulations may differ in different jurisdictions and are subject to change, including as a result of changes to regulatory, legislative and enforcement priorities with changes in U.S.

presidential administration, and regulatory actions that non-U.S.

countries may take in response to such changes.

The cost of maintaining compliance under multiple and changing regulatory regimes, and expenditures that may be required to comply with new laws and regulations, may adversely affect the Company’s business, financial condition, and results of operations.

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Risks Related to Global Economic Conditions

Global economic conditions have in the past and may in the future have a material adverse effect on the Company’s financial condition and operating results.

Global economic conditions have in the past and may in the future impact the Company’s results.

For example, volatile economic conditions that resulted from the COVID-19 pandemic led to economic slowdowns that caused contractions in some or all the markets we serve, and these impacts have continued and may continue for the foreseeable future.

Global economic conditions have in the past had and may in the future have a material adverse effect on the Company’s financial condition and operating results.

Global economic conditions have impacted in the past and may in the future impact the Company’s results.

This has led to and may continue to lead to decreased demand for the Company’s products, which in turn has negatively impacted, and may continue to negatively impact, the Company’s financial condition and operating results.

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General Risk Factors

The Company’s goodwill or indefinite-lived intangible assets may become impaired, which could require a significant charge to earnings be recognized.

The Company’s goodwill or indefinite-lived intangible assets may become impaired, which has in the past required and could in the future require a significant charge to earnings be recognized.

Under accounting principles generally accepted in the United States, goodwill and indefinite-lived intangible assets are not amortized but are reviewed for impairment at least annually.

Future operating results used in the assumptions, such as sales or profit forecasts, may not materialize, and the Company has been and could in the future be required to record a significant charge to earnings in the financial statements during the period in which any impairment is determined, resulting in an unfavorable impact on our results of operations.

The Company may not be able to reach acceptable terms for contracts negotiated with its labor unions and be subject to work stoppages or disruption of production.

During 2025, union contracts covering approximately 35% of the Company’s total workforce are expected to expire.

The Company has been successful in negotiating new contracts over the years but cannot guarantee that will continue and the Company has, in the past experienced, and could in the future experience, temporary work stoppages during negotiation of such contracts.

Failure to negotiate new union contracts, or any work stoppage that is prolonged, could result in the disruption of production, inability to deliver product, or several unforeseen circumstances, any of which could have an unfavorable material impact on the Company’s results of operations or financial condition.

The Company may need additional capital in the future, which may not be available on acceptable terms, if at all.

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The failure to successfully hire and retain executives and key employees or the loss of any executives and key employees could have a significant impact on our operations.

The Company may not be able to reach acceptable terms for contracts negotiated with its labor unions and be subject to work stoppages or disruption of production.

During 2024, no union contracts are scheduled to expire.

Deterioration in the creditworthiness of several major customers could have a material impact on the Company’s business, financial condition, or results of operations.

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Although the Company is not dependent on any one customer, deterioration in several large customers at the same time could have an unfavorable material impact on the Company’s results of operations or financial condition.

One customer represented 12% of total accounts receivable for fiscal 2023 and one customer represented 14% of total accounts receivable for fiscal 2022.

One customer represented 14% of total accounts receivable as of December 28, 2024 and one customer represented 12% of total accounts receivable as of December 30, 2023.

The Company’s operating results may fluctuate, which makes the results of operations difficult to predict and could cause the results to fall short of expectations.

The Company’s operating results may fluctuate because of several factors, many of which are outside of our control.

The Company’s operating results may fluctuate because of several factors, including those described above, many of which are outside of our control.

As a result, comparing the Company’s operating results on a period-to-period basis may not be meaningful, and past results should not be relied upon as an indication of future performance.

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Future operating results may fall below expectations.

These types of events could cause the price of the Company’s stock to fall.

These types of events could cause the Company’s stock price to drop.

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