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If any of the following risks actually occur, our business, financial condition or results of operations could be negatively affected.
−Removed: Readers should not interpret the disclosure of any risk factor to imply that the risk has not already materialized.
Risk Relating to our Business
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Due to competitiveness within these industries, we may not be able to continue to increase prices for our products to cover increases in our costs or to achieve desired profitability.
−Removed: In addition, we face pressure from our customers to reduce prices, and the contractual nature of business with OEM customers, could adversely affect our revenues and profitability.
+Added: In addition, we face pressure from our customers to reduce prices, which coupled with the contractual nature of business with OEM customers, could adversely affect our revenues and profitability.
In addition, our customers may choose to purchase products from one of our competitors rather than pay the prices we seek for our products, which could adversely affect our revenues and profitability.
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Our supply of raw materials could be and has in the past been interrupted for a variety of reasons, including availability and pricing.
−Removed: Prices for raw materials necessary for production have fluctuated significantly in the past, have risen substantially over the past few years, and could continue to do so in the future.
+Added: Prices for raw materials necessary for production have fluctuated significantly in the past, have risen substantially at times in the past, and could continue to do so in the future.
We generally attempt to manage these fluctuations by passing along increased raw material prices to our customers in the form of price increases or surcharges;
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Any significant increase in the prices for such raw materials or logistics expenses could adversely affect our results of operations and profit margins.
−Removed: We may not realize the improved operating results that we anticipate from past and future acquisitions, may experience difficulties in integrating acquired businesses, and may incur unanticipated liabilities and costs associated with such acquired businesses.
+Added: We may not realize the improved operating results that we anticipate from past and future acquisitions, may experience challenges in integrating acquired businesses, and may incur unanticipated liabilities and costs associated with such acquired businesses.
We seek to grow, in part, through strategic acquisitions, joint ventures and other alliances, which are intended to complement or expand our businesses, and expect to continue to do so in the future.
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These rights are important to our business, and their loss, whether through patent infringement, counterfeiting, theft of trade secrets, data breach, or otherwise, could have a material adverse effect on the Company.
−Removed: Additionally, third parties may bring claims to challenge the validity of our patents or other intellectual property rights or allege that we infringe their patents or other intellectual property rights.
−Removed: We may incur substantial costs if our competitors or other third parties allege such claims.
+Added: Additionally, third parties may bring claims and have brought claims in the past to challenge the validity of our patents or other intellectual property rights or allege that we infringe their patents or other intellectual property rights.
+Added: We may incur substantial costs if our competitors or other third parties validate such claims.
If the outcomes of any such disputes are unfavorable to us, we could be subject to damages and reputational harm and our business could be otherwise adversely affected.
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Some of our debt has variable interest rates, which could increase the cost of servicing such debt, and fixed rate debt may have increased cost to refinance at maturity.
−Removed: Interest rates have risen significantly over the past few years and may remain elevated or rise in the future due to inflation or other causes.
−Removed: As a result, the costs of servicing our variable interest rate debt could further increase even if the amount borrowed under such facilities remains the same.
+Added: We have seen interest rates rise significantly in recent years, and while rates fell in 2024, they may rise again in the future due to inflation or other causes.
+Added: As a result, the costs of servicing our variable interest rate debt could increase even if the amount borrowed under such facilities remains the same.
Increased servicing costs could in turn negatively impact our profitability and cash flow.
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where we have significant sales, a strengthening in the U.S.
−Removed: dollar as we have seen over the past few years or devaluation in the local currency would reduce the value of our local inventory as presented in our Consolidated Financial Statements.
−Removed: In addition, a stronger U.S.
−Removed: dollar or a weaker local currency would result in reduced revenue, operating profit and shareholders' equity due to the impact of foreign exchange translation on our Consolidated Financial Statements.
+Added: dollar as we have seen over the past few years or devaluation in the local currency would reduce revenue, operating profit and shareholders' equity due to the impact of foreign exchange translation on our Consolidated Financial Statements.
Fluctuations in foreign currency exchange rates may make our products more expensive for others to purchase or increase our operating costs, affecting our competitiveness and our profitability.
Changes in exchange rates between the U.S.
−Removed: dollar and other currencies and volatile economic, political and market conditions in emerging market countries have in the past adversely affected our financial performance and may in the future adversely affect the value of our assets located outside the U.S., our gross profit and our results of operations.
+Added: dollar and other currencies and volatile economic, political and market conditions throughout the world have in the past adversely affected our financial performance and may in the future adversely affect the value of our assets located outside the U.S., our gross profit and our results of operations.
Our results of operations may be materially affected by conditions in global financial markets or in any of the geographic regions in which we, our customers or our suppliers operate.
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Accordingly, we may be forced to delay raising capital, issue shorter tenors than we prefer or pay unattractive interest rates, which could increase our interest expense, decrease our profitability and significantly reduce our financial flexibility.
−Removed: If a customer becomes insolvent or files for bankruptcy, our ability to recover accounts receivable from that customer would be adversely affected and any payment we received during the preference period prior to a bankruptcy filing potentially may be recoverable by the bankruptcy estate.
+Added: If a customer becomes insolvent or files for bankruptcy (events which we have occasionally experienced in the past and continue to experience from time to time), our ability to recover accounts receivable from that customer would be adversely affected and any payment we received during the preference period prior to a bankruptcy filing potentially may be recoverable by the bankruptcy estate.
Furthermore, if certain of our customers liquidate in bankruptcy, we may incur impairment charges relating to obsolete inventory and machinery and equipment.
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If any of our suppliers are unable or unwilling to provide the products or services that we require or materially increase their costs, our ability to offer and deliver our products on a timely and profitable basis could be impaired.
−Removed: We cannot assure you that any or all of our relationships will not be terminated or that such relationships will continue as presently in effect.
Furthermore, if any of our suppliers were to become subject to bankruptcy, receivership or similar proceedings, we may be unable to arrange for alternate or replacement relationships on favorable terms, which could harm our sales and operating results.
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• the imposition of sanctions on countries in which we operate, from which we receive critical supplies or into which we sell our products;
−Removed: • strained geopolitical relations between countries in which we have significant operations including the U.S.
+Added: • strained geopolitical relations between countries in which we have significant operations including the U.S., China and Mexico, among others;
• political protests or unrest which could negatively impact our operations;
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• difficulty in staffing and managing geographically diverse operations;
−Removed: • disruptions to our global supply chain and logistical issues associated with port closures or congestion, delays or increased costs;
+Added: • disruptions to our global supply chain and logistical issues associated with port closures or strikes, delays or increased costs;
• tax exposures related to cross-border intercompany transfer pricing and other tax risks unique to international operations;
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Our future success also will depend on our ability to attract, retain and develop highly skilled personnel at all levels of the organization, such as engineering, finance, marketing and senior management professionals, as well as skilled labor.
−Removed: Competition for these types of employees is intense, particularly in developed countries such as the U.S., and has increased recently, and we could experience difficulty from time to time in hiring, developing and retaining the personnel necessary to support our business.
+Added: Competition for these types of employees is intense, and has increased recently, and we could experience difficulty from time to time in hiring, developing and retaining the personnel necessary to support our business.
If we do not succeed in retaining and developing our current employees, attracting new high-quality employees, and developing and successfully executing succession plans, our business could be materially adversely affected.
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Current and future environmental health and safety laws, regulations, and customer requirements impose substantial costs and limitations on our operations and compliance may be more costly than we expect.
−Removed: We are subject to the risk of substantial environmental liability and limitations on our operations due to current environmental laws and regulations and future environmental laws and regulations could impose additional risks and limitations.
−Removed: We are or may become subject to extensive federal, state, local and foreign environmental, health and safety laws and regulations concerning matters such as air emissions, wastewater discharges, the use of per- and polyfluoroalkyl substances, such as polytetrafluoroethylene, or other chemicals of concern, waste management (e.g.
+Added: We are subject to the risk of potentially substantial environmental liability and limitations on our operations due to current environmental laws and regulations and future environmental laws and regulations could impose additional potential risks and limitations.
+Added: We are or may become subject to extensive federal, state, local and foreign environmental, health and safety laws and regulations concerning matters such as air emissions, wastewater discharges, the use of per- and polyfluoroalkyl substances ("PFAS"), such as polytetrafluoroethylene ("PTFE"), or other chemicals of concern, waste management (e.g.
storage, disposal) and the investigation and remediation of contamination.
−Removed: The risks of substantial costs and liabilities related to compliance with these laws and regulations are an inherent part of our business, and future conditions may develop, arise or be discovered that create substantial environmental compliance or remediation liabilities and costs or which may require that we change certain production methods or materials used in our manufacturing processes or products.
+Added: The risks of substantial costs and liabilities related to compliance with these laws and regulations are an inherent part of our business, and conditions may develop, arise or be discovered that create substantial environmental compliance or remediation liabilities and costs or which may require that we change certain production methods or materials used in our manufacturing processes or products.
Compliance with environmental, health and safety legislation and regulatory requirements may prove to be more limiting and costly than we anticipate.
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New laws and regulations, including those that may relate to emissions of greenhouse gases or the use, discharge or disposal of chemicals of concern utilized in our manufacturing processes, stricter enforcement of existing laws and regulations, new and more stringent customer requirements, the discovery of previously unknown contamination or the imposition of new clean-up requirements or standards could require us to incur costs, change production methods or materials or become the basis for new or increased liabilities that could have a material adverse effect on our business, financial condition or results of operations.
+Added: PTFE and other fluoropolymer materials, which are known to be included in certain of our products, are subject to increasing regulatory scrutiny.
+Added: Certain of our products, including but not limited to certain seals and plain bearings, are known to contain PTFE or other fluoropolymer materials, which are included in certain broad definitions of PFAS.
+Added: These products represent a relatively small portion of our total product portfolio.
+Added: PFAS have been increasingly scrutinized due to their potential environmental and health risks and are now the subject of increasing regulatory attention from the Environmental Protection Agency, state governments, the European Union and other regulators.
+Added: These evolving regulations may restrict the use, manufacture, sale and/or distribution of our products or our ability to obtain components of our products, or may require us to report data on our use of certain PFAS.
+Added: Such regulations could lead to significant costs.
+Added: In addition, certain PFAS, including PFAS previously or currently within PTFE or other fluoropolymer materials, have increasingly become subject to new or more stringent investigation and remediation requirements where such PFAS is believed to have caused an impact to the environment.
+Added: Certain of the Company’s operations and facilities have already been, or may in the future become, the subject of formal or informal investigations, enforcement actions or proceedings relating to these regulations or of private or public rights of action for the investigation and remediation of PFAS released into the environment.
+Added: Such investigations, remediations, other response actions, and any related proceedings could lead to significant costs or limitations on future production in the absence of viable alternatives.
We are subject to a wide variety of domestic and foreign laws and regulations that could adversely affect our results of operations, cash flow or financial condition.
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Also, our sales to public-sector customers are subject to complex regulations.
−Removed: Noncompliance with government procurement regulations, information security requirements, or other applicable laws or regulations could result in civil, criminal and administrative liability, termination of government contracts or other public-sector customer contracts, and suspension, debarment or ineligibility from doing business with governmental entities or other customers in the public sector.
+Added: Noncompliance with government procurement regulations, information security requirements such as the National Institute of Standards and Technology standards and guidelines, or other applicable laws or regulations could result in civil, criminal and administrative liability, termination of government contracts or other public-sector customer contracts, and suspension, debarment or ineligibility from doing business with governmental entities or other customers in the public sector.
Compliance with the laws and regulations described above or with other applicable foreign, federal, state, and local laws and regulations currently in effect or that may be adopted in the future could materially adversely affect our competitive position, operating results, financial condition and liquidity.
−Removed: The global regulatory landscape is rapidly evolving and new and potentially conflicting requirements, including with respect to climate change, environmental sustainability and other matters, could lead to added operational complexity and compliance risks while adversely impacting our costs and financial results.
+Added: The global regulatory landscape is rapidly evolving and new and potentially conflicting requirements or preferences, including with respect to climate change, environmental sustainability and other matters, could lead to added operational complexity and compliance risks while adversely impacting our costs and financial results.
In addition, severe weather associated with a changing climate could negatively impact our operations and those of our customers and suppliers.
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Actions required to comply with regulations or stakeholder expectations associated with corporate social responsibility (“CSR”) topics, including those related to climate change, could adversely affect our business and performance.
−Removed: Investors, customers, suppliers, employees, regulators and other stakeholders are increasingly focused on CSR practices and disclosures, and expectations in this area are rapidly evolving and growing.
+Added: Investors, customers, suppliers, employees, regulators and other stakeholders are increasingly focused on CSR practices and disclosures, and expectations in this area are rapidly evolving and growing and sometimes conflicting.
We have announced goals covering certain CSR topics, such as those related to reductions in greenhouse gas emissions and maintaining employee health and safety.
−Removed: Over time, stakeholder expectations for, and regulatory requirements (such as the Corporate Sustainability Reporting Directive) related to, our CSR program and initiatives may change, and our investors, customers, suppliers, employees or regulators may advocate that we implement additional, or stricter, goals and initiatives related to CSR topics.
+Added: Over time, stakeholder expectations for, and regulatory requirements (such as the European Union, Corporate Sustainability Reporting Directive) related to, our CSR program and initiatives may change, and our investors, customers, suppliers, employees or regulators may advocate that we implement additional, or stricter, goals and initiatives related to CSR topics.
Greater expectations or legal requirements may cause us to undertake costly initiatives to satisfy such new criteria.
2 unchanged sentences
The Company may be subject to risks relating to its information technology systems, including the risk of cybersecurity incidents.
−Removed: The Company relies on information technology systems and those of third parties who provide products or services to us to manage and operate its business and to process, transmit and store data, including its intellectual property, personal data and other proprietary business information and that of its customers and suppliers.
+Added: The Company relies on information technology systems and those of third parties who provide products or services to us to manage and operate its business and to process, transmit and store data, including its intellectual property, personal data and other proprietary business information and that of its employees, customers and suppliers.
Despite security measures taken by the Company, the Company’s information technology systems (both on-premises and third-party managed) may be vulnerable to attacks by hackers or subject to unauthorized access due to employee error, technology vulnerabilities or misconfigurations, supplier error, malfeasance or other causes.
−Removed: While we have utilized and continue to utilize various controls and systems to mitigate such risks, we cannot assure that the actions we have implemented and are implementing, or that we have required or will require third-party service providers to implement, will be sufficient to protect our systems or data.
+Added: Cybersecurity incidents and similar attacks vary in their form and can include the deployment of harmful malware or ransomware, denial-of-services attacks, and other attacks, which may affect business continuity and threaten the availability, confidentiality and integrity of our systems and information.
+Added: While we have utilized and continue to utilize various controls and systems to mitigate such risks, we cannot assure that the actions we have implemented and are implementing, or that we have required or will require third-party service providers and other business partners to implement, will be sufficient to protect our systems or data.
We have been and may in the future be subject to attempts to gain unauthorized access to our information technology systems.
To date, the impacts of prior incidents have not had a material adverse effect on us.
−Removed: A cybersecurity incident could expose the Company and its employees, customers and suppliers to risks of misuse of confidential information, manipulation and destruction of data, production downtimes and operational disruptions, which in turn could result in litigation, business disputes and government investigations, and related monetary damages, injunctive requirements and fines, and could adversely affect the Company's reputation, competitive position, business or results of operations.
+Added: A cybersecurity incident or failure or disruption relating to our information systems or technology infrastructure or that of our third-party service providers, could expose the Company and its employees, customers and suppliers to risks of misuse of confidential information, manipulation and destruction of data, production downtimes and operational disruptions, which in turn could result in litigation, business disputes and government investigations, and related monetary damages, injunctive requirements and fines, and could adversely affect the Company's reputation, competitive position, business or results of operations.
Data privacy and security concerns, as well as evolving regulation and enforcement, could adversely affect our results of operations and profitability.
−Removed: We collect, store, access and otherwise process certain confidential or sensitive data, including proprietary business information, personal data or other information that is subject to privacy, data protection and security laws, regulations and/or government or customer-imposed controls.
+Added: We and certain authorized third parties of ours, collect, transmit, store, access and otherwise process certain confidential or sensitive data, including proprietary business information, personal data or other information that is subject to privacy, data protection and security laws, regulations and/or government or customer-imposed controls.
We operate in a global environment in which the data privacy regulatory and legal framework and corresponding enforcement and litigation landscape are evolving quickly.
−Removed: Moreover, the data privacy laws of the specific jurisdictions in which we operate may vary and potentially conflict.
+Added: Moreover, the data privacy laws and regulations of the specific jurisdictions in which we operate may vary and potentially conflict.
+Added: These laws and regulations can also impose significant fines and penalties for noncompliance and afford private rights of action to individuals under certain circumstances.
As such, we incur and expect to continue to incur significant ongoing costs as part of our efforts to comply with applicable law.
−Removed: Any failure, or perceived failure, to comply with our data protection or privacy-related legal obligations may result in reputational damage, loss of business, regulatory investigations and fines, and civil lawsuits, and related monetary damages and injunctive requirements, any of which may adversely affect our results of operations and profitability.
+Added: Any failure, or perceived failure, to comply with our data protection or privacy-related legal obligations may result in reputational damage, loss of business, regulatory investigations and fines, and litigation, and related monetary damages and injunctive requirements, any of which may adversely affect our results of operations and profitability.
General Risk Factors
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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.