What changed in this filing

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Item 1A. Risk Factors

2026-02-25 compared with 2025-02-26 · 82 added, 42 removed, 364 unchanged (25% 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 businesses.

Cyclical changes and specific industry events, including changes in demand for the construction of data centers, 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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Historically, many of our key businesses generally have tended to have stronger performance in the second half of the year.

See “MD&A - Results of Continuing Operations and Results of Reportable Segments.”

See “MD&A - Results of Continuing Operations and Results of Reportable Segments and Corporate Expense.”

Our business depends on capital investment and maintenance expenditures by our customers.

Demand for most of our products and services depends on the level of new capital investment and planned maintenance expenditures by our customers.

The level of capital expenditures by our customers fluctuates based on planned expansions, new builds and repairs, commodity prices, general economic conditions, availability of credit, and expectations of future market behavior.

Although no one customer accounted for more than 10% of our consolidated revenues, many of our businesses derive revenues from large projects or key customer relationships and any of the aforementioned factors, whether individually or in the aggregate, could have a material adverse effect on our customers and, in turn, our business, financial condition, results of operations and cash flows.

Although to our knowledge no one customer accounted for more than 10% of our consolidated revenues, many of our businesses derive revenues from large projects or key customer relationships and any of the aforementioned factors, whether individually or in the aggregate, could have a material adverse effect on our customers and, in turn, our business, financial condition, results of operations and cash flows.

Our customers have been and could be impacted by commodity availability and prices.

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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, 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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These competitors may be in a stronger position to respond quickly to new or emerging technologies and may be able to undertake more extensive marketing campaigns and make more attractive offers to potential customers, employees and strategic partners.

In addition, competitive environments in slow-growth markets, to which some of our businesses have exposure, have been inherently more influenced by pricing and

domestic and global economic conditions.

In addition, competitive environments

in slow-growth markets, to which some of our businesses have exposure, have been inherently more influenced by pricing and domestic and global economic conditions.

To remain competitive, we need to invest in manufacturing, marketing, customer service and support, and our distribution networks.

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If terminated by the government as a result of our default, we could be liable for additional costs the government incurs in acquiring undelivered goods or services from another source and any other damages it suffers.

In addition, if we or one of our divisions were charged with wrongdoing with respect to a U.S.

In addition, if we or one of our businesses were charged with wrongdoing with respect to a U.S.

government contract, the U.S.

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government also reserves the right to debar a contractor from receiving new government contracts for fraudulent, criminal or other seriously improper conduct.

In addition, changes in focus or reductions in budgetary funding available to government or municipal agencies to which we sell could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Contracts with, or funded by, the U.S.

government or their agencies present additional risks compared to contracts with private sector customers.

Revenue generated from sales to or funded by the U.S.

government, and their agencies, expose us to certain risks, which could materially and negatively affect our business, financial condition, and results of operations:

• Some of our government contracts are long-term agreements funded on an annual basis.

If appropriations are not renewed for subsequent years of a multi‑year contract, we may be unable to realize the full revenue and profit originally anticipated.

Additionally, changes in government spending priorities, reductions in agency staffing levels, or government shutdowns could lead to program cancellations, work stoppages, delays in program execution and payments, and challenges in fulfilling existing contracts or competing for new opportunities.

Government customers are not obligated to maintain funding at any particular level, and program funding may be reduced or eliminated entirely or our customers may also redirect spending toward areas outside our current service offerings.

• Our contracts with the U.S.

government or their agencies, as well as those that receive government funding, are subject to audits, investigations, and other proceedings that may result in adjustments to reimbursable costs.

If any wrongdoing is alleged, we could also face temporary or permanent suspension from government programs, along with penalties that may include monetary damages and criminal or civil sanctions.

government and their agencies may modify, reduce, insource or terminate our contracts at any time before completion, and if we are unable to replace this work, our revenue could decline.

government contracts are awarded through a highly competitive process that often places significant emphasis on price.

Increasing use of multi‑year, multi‑award contracts requires additional competitive bidding for each task order, creating greater pricing pressure and incremental costs.

• We may be disadvantaged in competing for certain U.S.

government contracts due to policies that prioritize awards to small, under‑represented, or disadvantaged businesses.

• Certain U.S.

government contracts require security clearances, which can be difficult and time‑consuming to obtain.

If our employees or facilities cannot obtain or maintain the necessary clearances, existing contracts may not be renewed or could be terminated, and we may be unable to win new awards.

Risks Related to our Suppliers and Vendors

The price and availability of raw materials and components has and may adversely affect our business.

The price and availability of raw materials and components may adversely affect our business.

We are exposed to a variety of risks relating to the price and availability of raw materials and components.

In recent years, we have faced volatility in the prices of many key raw materials (e.g., steel and oil) and key components (e.g., circuit boards), including price increases in response to trade laws and tariffs and shortages related to supply chain disruptions, including as a result of public health crises, geopolitical events or other factors.

Increases in the prices of raw materials and components, including as a result of new or increased tariffs or the impact of new trade laws, or shortages or allocations of materials and components may have a material adverse effect on our financial position, results of operations or cash flows, as there may be delays in our ability, or we may not be able, to pass cost increases on to our customers, or our sales may be reduced.

In recent years, we have faced volatility in the prices of many key raw materials (e.g., steel, aluminum, oil, and copper) and key components (e.g., circuit boards), including price increases in response to trade laws and tariffs and shortages related to supply chain disruptions, including as a result of public health crises, geopolitical events or other factors.

cash flows, as there may be delays in our ability, or we may not be able, to pass cost increases on to our customers, or our sales may be reduced.

We are subject to, or may enter into, long-term supplier contracts that may increase our exposure to pricing fluctuations.

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To the extent that we underestimate the remaining cost to complete a project, we may overstate the revenues and profit in a particular period.

Further, certain of these contracts provide for penalties or liquidated damages for failure to timely perform our obligations under the contract, or require that we, at our expense, correct and remedy certain defects to the satisfaction of the

Because some of our contracts are at a fixed price, we face the risk that cost overruns or inflation may exceed, erode or eliminate our expected profit margin, or cause us to record a loss on our projects.

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The loss of, or substantial damage to, one or more of our facilities, our information system infrastructure or the facilities of our suppliers could make it difficult to manufacture our products and fulfill customer orders.

Severe weather events (such as flooding, tornadoes or hurricanes), earthquakes, tsunamis, fires, explosions, acts of war, terrorism, civil unrest, or outbreaks, epidemics or pandemics of infectious diseases (such as the recent COVID-19 pandemic) could adversely impact our operations.

Severe weather events (such as flooding, tornadoes or hurricanes), earthquakes, tsunamis, fires, explosions, acts of war, terrorism, civil unrest, outbreaks, epidemics or pandemics of infectious diseases (such as the COVID-19 pandemic), orders or actions by government authorities or requirements of law, embargoes or blockades, national or regional emergencies, telecommunications breakdowns, power outages or shortages, or other events beyond our reasonable control could adversely impact our operations.

Risks Related to Manufacturing Footprint Changes and Capacity Expansion.

We periodically invest in expanding or reconfiguring our manufacturing footprint, including constructing new facilities, adding production lines, relocating equipment and consolidating operations.

These projects involve significant estimates and dependencies, and are subject to risks and uncertainties that include, among others, delays or denials of environmental, zoning or building permits;

continued availability of necessary funding on acceptable terms or at all, contractor or supplier delays (including for long‑lead-time equipment);

availability of site utilities and interconnections;

inflation in construction and installation costs;

commissioning and qualification challenges;

the ability to attract and train sufficient skilled personnel to staff new and expanded facilities;

and achieving anticipated yields, throughput and cost‑savings.

Any failure to execute these projects as planned—or to bring capacity online in line with demand—could result in cost overruns, schedule slippage, production shortfalls, customer delivery delays, penalties under customer or incentive agreements, and reduced returns on invested capital.

In addition, we may be unable to realize benefits from expansions of production facilities if relevant customer demand falls below anticipated levels.

These risks may limit or delay the realization of benefits from our restructuring, cost‑reduction or footprint‑optimization and expansion initiatives and, depending on the nature and extent of the impact from these risks, they could have a material adverse effect on our business, results of operations, or financial condition.

Risks Related to Acquisitions and Dispositions

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In addition, we may not realize some or all of the anticipated benefits of our dispositions.

See “Business,” “MD&A - Results of Discontinued Operations,” and Note 4 to our consolidated financial statements for the status of our divestitures.

We have divested a number of businesses, including the Spin-Off in 2015.

See “Business,”

“MD&A - Results of Discontinued Operations,” and Note 4 to our consolidated financial statements for the status of our divestitures.

We have divested a number of businesses.

With respect to some of these former businesses, we have contractually agreed to indemnify the counterparties against, or otherwise retain, certain liabilities, including certain lawsuits, tax liabilities, product liability claims, and environmental matters.

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Even if we ultimately succeed in recovering any amounts for which we were initially held liable, we may be temporarily required to bear these losses ourselves.

We may be unable to effect dispositions of non-core businesses on attractive terms or at all.

In connection with the acquisition of Crawford, we identified the businesses comprising its former Industrial & Transportation Products segment, which serve aerospace, defense, transportation, and marine markets, as non-core to our long-term strategy.

We intend to execute on a plan to sell these businesses within twelve months, including identifying a suitable buyer(s).

If we are unable to dispose of some or all of these businesses on attractive terms, or at all, it may divert significant resources away from our long-term strategy and may result in dilution to earnings.

Additionally, the risks identified above with respect to completed dispositions may be applicable with respect to transactions we complete to divest any of these businesses.

Risks Related to Macro-Economic, Domestic and World Events

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Worldwide economic conditions could negatively impact our businesses.

Many of our customers historically have tended to delay capital projects, including expensive maintenance and upgrades, during economic downturns.

Poor macroeconomic conditions could negatively impact our businesses by adversely affecting, among other things, our:

• Cash flows;

• Customers’ orders, including order cancellation activity or delays on existing orders;

• Customers’ orders, including order cancellation activity or delays on new or existing orders;

• Customers’ ability to access credit;

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• Suppliers’ and distributors’ ability to perform and the availability and costs of materials and subcontracted services;

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 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.

• Our ability to realize expected returns from facility expansions.

Our results of operations and prospects could be negatively impacted by downturns in economic conditions in relevant global and North American markets, including as a result of international trade tensions, the imposition, or threat of imposition, of tariffs and other trade barriers, including any new or increased tariffs or trade barriers announced by the U.S.

government, and retaliatory tariffs announced in response thereto.

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 nations relevant to our business or the businesses of our customers and vendors, 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;

• Customs, tariffs and trade restrictions, including the expiration or negotiation of free trade agreements such as the United States-Mexico-Canada Agreement, 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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Climate change and legal or regulatory responses thereto may have an adverse impact on our business and results of operations.

There is growing concern that increases in global average temperatures as a result of increased concentration of carbon dioxide and other greenhouse gases in the atmosphere will cause significant adverse long-term climate changes, as well as more near-term changes in weather patterns that could adversely impact our operations.

Moreover, growing concern over climate change may result in additional legal or regulatory requirements to disclose levels of carbon dioxide and other greenhouse gas emissions or that are designed to reduce or mitigate the effects of carbon dioxide and other greenhouse gas emissions on the environment.

There is continuing concern that increases in global average temperatures as a result of increased concentration of carbon dioxide and other greenhouse gases in the atmosphere will cause significant adverse long-term climate changes, as well as more near-term changes in weather patterns that could adversely impact our operations.

Moreover, concern over climate change may result in additional legal or regulatory requirements to disclose levels of carbon dioxide and other greenhouse gas emissions or that are designed to reduce or mitigate the effects of carbon dioxide and other greenhouse gas emissions on the environment.

Many of our manufacturing plants and the products we manufacture, particularly in the HVAC reportable segment, use significant amounts of electricity generated by burning fossil fuels, which releases carbon dioxide.

Additionally, many of the products we manufacture in the HVAC reportable segment use natural gas or oil as a fuel source and may be subject to increasing regulatory restrictions aimed at “de-carbonization” or the elimination of such fuel sources.

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.

Increased energy usage 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.

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.

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.

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

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

Certain of these laws and regulations are subject to pending legal challenges.

Unless the reporting requirements of the California laws and related regulations are invalidated or substantially reduced as a result of these legal challenges, they 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.

Expectations from investors, customers, team members, certain government agencies and other third parties for reporting on sustainability and social responsibility matters have increased over the past several years, 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.

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We depend on such IT infrastructure for electronic communications among our locations around the world and between our personnel and suppliers and customers.

In addition, we rely on these IT systems to record, process, summarize, transmit, and store electronic information, and to manage or support a variety of business processes and activities, including, among other things, our accounting and financial reporting processes;

our manufacturing and supply chain processes;

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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.

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, including state-sponsored attacks coordinated by certain foreign governments.

We have experienced, and expect to continue to experience, cyber-attacks on our IT systems and networks.

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In addition, newer generations of certain of our products include IT systems, including systems that are cloud-based and/or interconnect through the internet.

These systems are subject to the same cybersecurity threats described above and the failure of these systems, including by cyber-attack, could disrupt our customers’ business, leading to potential exposure for us.

These systems are subject to the same cybersecurity threats described above and the failure of these systems, including by cyber-attack, could disrupt our business, leading to potential exposure for us.

Operation on multiple Enterprise Resource Planning (“ERP”) information systems and other applications may negatively impact our operations and internal control environment.

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Our profitability and cash flows may be adversely affected during any periods of unexpected or rapid increases in interest rates.

We maintain a credit agreement with both term loan facilities and a revolving credit facility.

Borrowings under these facilities accrue interest at either an alternate base rate or Term Secured Overnight Financing Rate (“SOFR”) plus, in each case, an applicable margin based on our consolidated leverage ratio as defined in the credit agreement.

Our senior credit agreement includes both term loan facilities and a revolving credit facility.

A significant increase in Term SOFR or the other benchmark rates used in determining the alternative base rate would significantly increase our cost of borrowings.

Further, any changes in regulatory standards or industry practices, such as the discontinuation of the use of Term SOFR and/or the transition to alternative benchmark rates may result in the usage of higher interest rates under the credit agreement, and our current or future indebtedness may be adversely affected.

Further, any changes in regulatory standards or industry practices, such as the discontinuation of the use of Term SOFR and/or the transition to alternative benchmark rates may result in the usage of higher interest rates under our senior credit agreement, and our current or future indebtedness may be adversely affected.

We are also exposed to risks if the U.S.

Federal Reserve raises its benchmark interest rate, which may reduce the availability of, and increase the cost of, obtaining new debt and refinancing existing indebtedness.

Reserve raises its benchmark interest rate, which may reduce the availability of, and increase the cost of, obtaining new debt and refinancing existing indebtedness.

For additional information related to this risk, see Item 7A “Quantitative and Qualitative Disclosures About Market Risk.”

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

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.

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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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.

We may 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.

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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.

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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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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We also may issue a significant number of additional shares, i n connection with acquisitions, through a registration statement, or otherwise.

For example, in 2025, we issued 3.059 shares of our common stock for cash in a registered public offering.

Additional shares issued would have a dilutive effect on our earnings per share.

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