What changed in this filing

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Item 1A. Risk Factors

2025-02-26 compared with 2024-02-23 · 40 added, 37 removed, 366 unchanged (17% of the section changed)

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The businesses of many of our customers are to varying degrees cyclical and have experienced, and may continue to experience, periodic downturns.

Cyclical changes and specific industry events could also affect sales of products in our other businesses.

Cyclical changes and specific industry events could also affect sales of products in our businesses.

Downturns in the business cycles of our different operations may occur at the same time, which could exacerbate any adverse effects on our business.

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On the other hand, declining commodity prices may cause our customers to delay or cancel projects relating to the production of such commodities.

Reduced demand for our products and services could result in the delay or cancellation of existing orders or lead to excess manufacturing capacity, which unfavorably impacts our absorption of fixed manufacturing costs.

Reduced demand for, or increased costs of, our products and services could result in the delay or cancellation of existing or future orders, or lead to excess manufacturing capacity, which unfavorably impacts our absorption of fixed manufacturing costs.

Reduced demand may also erode average selling prices in the relevant market.

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Third-party supplier and subcontractor business interruptions can include, but are not limited to, work stoppages, union negotiations and other labor disputes.

Current economic conditions could also impact the ability of suppliers and subcontractors to access credit and, thus, impair their ability to provide us quality products or services in a timely manner, or at all.

Prevailing economic conditions could also impact the ability of suppliers and subcontractors to access credit and, thus, impair their ability to provide us quality products or services in a timely manner, or at all.

Risks Related to Our Manufacturing and Operations

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Our recent and future acquisitions involve a number of risks and may present financial, managerial and operational challenges, including:

• Adverse effects on our reported operating results due to charges to earnings, including potential impairment charges associated with goodwill and other intangibles;

• Adverse effects on our reported operating results due to charges to earnings, including potential impairment charges associated with goodwill and other intangible assets;

• Diversion of management attention from core business operations;

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embargoes and foreign trade restrictions by the United States could adversely affect the market for our products in the United States;

• Customs and tariffs may make it difficult or impossible for us to move our products or assets across borders in a cost-effective manner and may increase the cost of our raw materials, including raw materials sourced domestically;

• Customs and tariffs may make it difficult or impossible for us to move our products or assets across borders in a cost-effective manner, may increase the price of our products which may lead to lost business, and may increase the cost of our raw materials, including raw materials sourced domestically;

• Transportation and shipping expenses may add additional cost to our products;

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Downturns in global economies could negatively impact our results of operations and prospects.

In addition, economic instabilities resulting from geopolitical activities, including instabilities associated with the armed conflict in Ukraine, and the imposition of governmental sanctions in response thereto, and any conflict or threat of conflict that may affect Taiwan or any other nations, could negatively impact our results of operations and prospects.

In addition, economic instabilities resulting from geopolitical activities, including instabilities associated with armed conflicts, and the imposition of governmental sanctions in response thereto, and any conflict or threat of conflict that may affect Taiwan or any other nations, could negatively impact our results of operations and prospects.

revenues and operations expose us to numerous risks that may negatively impact our business.

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manufacturing bases expose us to a number of risks, including:

• Customs, tariffs and trade restrictions may make it difficult or impossible for us to move our products or assets across borders in a cost-effective manner, may increase the price of our products which may lead to lost business, and may increase the cost of our raw materials, including raw materials sourced domestically;

• Significant competition could come from local or long-term participants in non-U.S.

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In addition, these barriers may impact our existing businesses, including making it more difficult for them to grow;

• Local political, economic and social conditions, including the possibility of hyperinflationary conditions, political instability, nationalization of private enterprises, or unexpected changes relating to currency could adversely impact our revenues and operations;

• Customs, tariffs and trade restrictions may make it difficult or impossible for us to move our products or assets across borders in a cost-effective manner;

• Local political, economic and social conditions, including the possibility of hyperinflationary conditions, political instability, and nationalization of private enterprises;

• Unexpected changes relating to currency exchange rates could adversely impact our operations, revenues, operating profit and cash flows;

• Transportation and shipping expenses may add additional cost to our products;

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• Public health crises, including the outbreak of a pandemic or other contagious disease.

Any of the above factors or other factors affecting social and economic activity in the United Kingdom and China or affecting the movement of people and products into and from these countries to our major markets, could have a significant negative effect on our operations.

Any of the above factors or other factors affecting social and economic activity in the United Kingdom, Canada, and China or affecting the movement of people and products into and from these countries to our major markets, could have a significant negative effect on our operations.

Climate change and legal or regulatory responses thereto may have an adverse impact on our business and results of operations.

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Increased energy or compliance costs and expenses as a result of increased legal or regulatory requirements may cause disruptions in, or an increase in the costs associated with, the manufacturing and distribution of our products and we may be required to develop product improvements to satisfy developing energy-efficiency targets in order to remain competitive.

In addition, the impacts of climate change and legal or regulatory initiatives to address climate change could have a long-term adverse impact on our business and results of operations.

The impacts of climate change and legal or regulatory initiatives to address climate change could have a long-term adverse impact on our business and results of operations.

If we fail to achieve or improperly report on our progress on environmental and sustainability programs and initiatives or fail to develop product improvements to satisfy developing energy-efficiency targets, the results could have an adverse impact on our business, results of operations and financial condition.

Failure to meet evolving expectations for reporting on environmental, social, and governance ( “ ESG ” ) matters could adversely affect our sales and results of operations.

Expectations from investors, customers, team members, government agencies and other third parties concerning ESG reporting have increased, and our ability to meet those expectations is dependent on a variety of factors, including cooperation from sourcing vendors and other third parties and having access to consistent and reliable data.

In addition, under recently implemented governmental requirements, we will incur additional costs in complying with climate-related reporting mandates.

Under laws enacted in California, we, and other companies doing business in California that exceed requisite financial thresholds, will be subject to extensive climate-related reporting.

The reporting requirements of the California laws and related regulations will result in increased compliance costs and could result in regulatory reporting risks.

Failure to comply with laws and regulations can have adverse consequences, including civil, administrative, and criminal penalties as well as a negative impact on the Company’s reputation, business, results of operations and cash flows.

Failure to meet evolving expectations for other reporting on sustainability and social responsibility matters could adversely affect our sales and results of operations.

Expectations from investors, customers, team members, certain government agencies and other third parties for reporting on sustainability and social responsibility matters have increased, and our ability to meet those expectations is dependent on a variety of factors, including cooperation from sourcing vendors and other third parties and having access to consistent and reliable data.

Negative customer perceptions regarding the safety and sourcing of the products we sell and the sufficiency and transparency of our reporting on such matters and events that give rise to actual, potential, or perceived sustainability, social responsibility and similar concerns could hurt our reputation, result in lost sales, cause our customers to seek alternative sources for their needs and make it difficult and costly for us to regain the confidence of our customers.

Furthermore, costs associated with responding to ESG related laws, regulations, or customer requirements may have an adverse impact on our business, financial condition and results of operations and cash flows.

Risks Related to Information, Technology and Cybersecurity

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and the data related to our research and development efforts.

The failure of our IT systems or those of our business partners or third-party service providers to perform properly, or difficulties encountered in the development of new systems or the upgrade of existing systems, could disrupt our business and harm our reputation, which may result in decreased sales, increased overhead costs, excess or obsolete inventory, and product shortages, causing our business, reputation, financial condition, and operating results to suffer.

Upon expiration or termination of any of our agreements with third-party vendors, we may not be able to replace the services provided to us in a timely manner or on terms and conditions, including service levels and cost, that are favorable to us, and a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete.

The failure of our IT systems or those of our business partners or third-party service providers to perform properly, or difficulties encountered in the development of new systems or the upgrade of existing systems, could disrupt our business and harm our reputation, which may result in decreased sales, increased costs, excess or obsolete inventory, and product shortages, causing our business, reputation, financial condition, and operating results to suffer.

Upon expiration or termination of any of our agreements with third-party vendors, we may not be able to replace the services provided to us in a

timely manner or on terms and conditions, including service levels and cost, that are favorable to us, and a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete.

IT security threats are increasing in frequency and sophistication.

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These threats pose a risk to the security of our systems and networks, and those of our business partners and third-party service providers, and to the confidentiality, availability, and integrity of our data.

Our business, reputation, operating results,

and financial condition could be materially adversely affected if, as a result of a significant cyber event or otherwise, our operations or industrial processes are disrupted or shutdown;

Despite our implementation of security measures, cybersecurity threats, such as malicious software, ransomware, phishing attacks, computer viruses, and attempts to gain unauthorized access, cannot be completely mitigated and may become more virulent due to further development through the application of artificial intelligence.

Our business, reputation, operating results, and financial condition could be materially adversely affected if, as a result of a significant cyber event or otherwise, our operations or industrial processes are disrupted or shutdown;

our confidential, proprietary information is stolen or disclosed;

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From time to time we also undertake projects to implement new, or update existing, ERP systems and other applications.

While we believe we have the experience, skill and management abilities, as well as access to the necessary experts and consultants, to plan and execute these projects without significant disruption to our businesses, ERP and other application implementations and updates are very complex and inherently subject to risks and uncertainty.

While we believe we have the experience, skill and management abilities, as well as access to the necessary experts and consultants, to plan and execute these projects without significant disruption to our businesses, ERP and other application implementations and updates are complex and inherently subject to risks and uncertainty.

There is no assurance that the projects will succeed or that failures in the design, programming, software or implementation of these projects will not cause significant disruption to our businesses.

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As a result, we may have, and from time to time have had, to replace certain components and/or provide remediation in response to the discovery of defects in products that are shipped.

market acceptance of our products and loss of sales, which would harm our business and adversely affect our revenues, profitability and cash flows.

The occurrence of any defects, errors, failures or quality issues could result in cancellation of orders, product returns, diversion of our resources, legal actions by our customers or our customers’ end users and other losses to us or to any of our customers or end users, and could also result in the loss of or delay in market acceptance of our products and loss of sales, which would harm our business and adversely affect our revenues, profitability and cash flows.

We are subject to potential liability relating to claims, complaints and proceedings, including those relating environmental, product liability and other matters.

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We are subject to work stoppages, union negotiations, labor disputes and other matters associated with our labor force, which may adversely impact our operations and cause us to incur incremental costs.

At December 31, 2023, we had six domestic collective bargaining agreements covering approximately 460 of our over 4,100 employees.

Four of these collective bargaining agreements expire in 2024 and are scheduled for negotiation and renewal.

At December 31, 2024, we had six domestic collective bargaining agreements covering approximately 460 of our approximately 4,300 employees.

None of these collective bargaining agreements will expire in 2025 or are scheduled for negotiation and renewal.

We also have various co llective labor arrangements covering certain non-U.S.

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dollar will increase the effective price of our products sold in U.S.

dollars into other countries, including countries utilizing the Euro, which may have a material adverse effect on sales or require us to lower our prices, and also decrease our reported revenues or margins related to sales conducted in foreign currencies to the extent we are unable or determine not to increase local currency prices.

dollars into other countries, which may have a material adverse effect on sales or require us to lower our prices, and also decrease our reported

revenues or margins related to sales conducted in foreign currencies to the extent we are unable or determine not to increase local currency prices.

Likewise, the increased strength of the U.S.

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countries in which we manufacture will have a comparable effect against the currencies of other jurisdictions in which we sell.

For example, our Radiodetection business manufactures a number of detection instruments in the United Kingdom and sells to customers in other countries, therefore increased strength of the British pound sterling will increase the effective price of these products sold in British pound sterling

into other countries;

and decreased strength of British pound sterling could have a material adverse effect on the cost of materials and products purchased outside of the United Kingdom.

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We cannot assure you that expenses or losses for uncollectible amounts will not have a material adverse effect on our earnings and cash flows.

Commodity, currency and interest rate hedging activities may adversely impact our financial performance as a result of changes in relevant commodity prices, interest rates and currency rates.

We use derivative financial instruments in order to reduce the substantial effects of currency and commodity fluctuations and interest rate exposure on our cash flow and financial condition.

These instruments may include foreign currency and commodity forward contracts, currency swap agreements and currency option contracts, as well as interest rate swap agreements.

We have entered into, and may continue to enter into, such hedging arrangements.

By utilizing hedging instruments, we may forgo benefits that might result from fluctuations in currency exchange, commodity and interest rates.

Currency and interest rate hedging activities may adversely impact our financial performance as a result of changes in relevant interest rates and currency rates.

We use derivative financial instruments in order to reduce the substantial effects of currency and interest rate exposure on our cash flow and financial condition.

These instruments may include foreign currency, currency swap agreements and currency option contracts, as well as interest rate swap agreements.

We have entered into, and may continue to enter into, these or other hedging arrangements.

By utilizing hedging instruments, we may forgo benefits that might result from fluctuations in currency exchange and interest rates.

We are also exposed to the risk that counterparties to hedging contracts will default on their obligations.

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or foreign tax laws and regulations, or their interpretation and application, could have a material impact on our financial position, results of operations, and cash flows.

As indicated in Note 12 to our consolidated financial statements, certain of our income tax returns are currently under audit.

In connection with these and any future audits, there is a risk that we could be challenged by tax authorities on certain of the tax positions we have taken, or will take, on our tax returns.

As indicated in Note 12 to our consolidated financial statements, we regularly have various income tax returns under examination or audit.

In connection with these and any future examinations or audits, there is a risk that we could be challenged by tax authorities on certain of the tax positions we have taken, or will take, on our tax returns.

Although we believe that current tax laws and regulations support our positions, there can be no assurance that tax authorities will agree with our positions.

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We monitor impairment indicators across all of our businesses.

Significant changes in market conditions and estimates or judgments used to determine expected future cash

flows that indicate a reduction in carrying value may give, and have given, rise to impairments in the period that the change becomes known.

Significant changes in market conditions and estimates or judgments used to determine expected future cash flows that indicate a reduction in carrying value may give, and have given, rise to impairments in the period that the change becomes known.

Cost reduction actions may affect our business.

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At December 31, 2024, we h a d $614.7 in total indebtedness.

On that same date, we h ad $489.2 o f available borrowing capacity under our revolving credit facilities, after givin g effect to $10.8 reserved for outstanding letters of credit.

On that same date, we h ad $909.0 o f available borrowing capacity under our revolving credit facilities, after givin g effect to borrowings under the domestic revolving loan facilities of $80.0 and $11.0 reserved for outstanding letters of credit.

In addition, at December 31, 2024, we had $8.0 of available issuance capacity under our foreign credit instrument facilities after giving effect to $17.0 res erved for outstanding letters of credit.

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Our ability to make scheduled payments of principal or pay interest on, or to refinance, our indebtedness and to satisfy our other debt obligations will depend upon our future operating performance, which may be affected by general economic, financial, competitive, legislative, regulatory, business and other factors beyond our control.

In addition, we cannot assure you that future borrowings or equity financing will be available for the payment or refinancing of our indebtedness.

In addition, we cannot assure you

that future borrowings or equity financing will be available for the payment or refinancing of our indebtedness.

If we are unable to service our indebtedness, whether in the ordinary course of business or upon an acceleration of such indebtedness, we may pursue one or more alternative strategies, such as restructuring or refinancing our indebtedness, selling assets, reducing or delaying capital expenditures, revising implementation of or delaying strategic plans or seeking additional equity capital.

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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