Arcosa (ACA) risk factors, FY2024 10-K

Risks Related to our Business and Operations

1. 01The seasonality of Arcosa's business and its susceptibility to severe and prolonged periods of adverse weather and other conditions could have a material adverse effect on us
2. 02Delays in construction projects and any failure to manage Arcosa’s inventory could have a material adverse effect on us
3. 03Arcosa operates in highly competitive industries. Arcosa may not be able to sustain its market positions, which may impact its financial results
4. 04Arcosa's inability to deliver its backlog on time could affect its revenues, future sales and profitability and its relationships with customers
5. 05Arcosa depends on its key management employees, and Arcosa may not be able to retain their services in the future
6. 06The inability to hire and retain skilled or professional labor could adversely impact Arcosa’s operations
7. 07Failure to maintain safe work sites could result in losses, which could adversely affect our business and reputation
8. 08Some of Arcosa’s employees belong to labor unions and strikes or work stoppages could adversely affect Arcosa’s operations
9. 09Extensive damage to Arcosa’s facilities, including as a result of natural disasters or similar incidents, could lead to production, delivery or service curtailments or shutdowns, loss of revenue, or higher expenses
10. 10Fluctuations in the price and supply of raw materials and parts and components used in the production of Arcosa’s products could have a material adverse effect on its ability to cost-effectively manufacture and sell its products
11. 11The availability of natural aggregates reserves, specialty materials reserves, and supply stock for recycled aggregates could have a material adverse effect on Arcosa's ability to cost-effectively manufacture and sell its products
12. 12Reductions in the availability of energy supplies or an increase in energy costs may increase Arcosa’s operating costs
13. 13Any material nonpayment or nonperformance by any of our customers could have a material adverse effect on our business and results of operations
14. 14Defects in materials and workmanship could harm our reputation, expose us to product warranty or product liability claims, decrease demand for products, or materially harm existing or prospective customer relationships
15. 15Insurance coverage could be costly, unavailable, or inadequate
16. 16Arcosa's indebtedness restricts its current and future operations, which could adversely affect its ability to respond to changes in its business and manage its operations
17. 17Borrowings under the Credit Agreement incur interest which is variable based on fluctuations in the referenced Secured Overnight Financing Rate ("SOFR"). Increases in the referenced SOFR will increase Arcosa's borrowing costs and negatively impact financial results and cash flows
18. 18Arcosa's indebtedness could adversely affect its financial condition and prevent it from fulfilling its obligations
19. 19Arcosa may be required to reduce the value of Arcosa’s long-lived assets, including intangible assets and/or goodwill, which would weaken Arcosa’s financial results

Risks Related to Economic, Geopolitical, and Legal Factors

1. 20Pandemics, epidemics, or other public health emergencies, as well as the governmental reaction thereto, may adversely affect Arcosa’s business
2. 21availability of our transportation and distribution networks. If any of Arcosa’s facilities become subject to closure from a public health emergency, the business as a whole could be materially affected
3. 22Instability in the economy or negative conditions in credit markets may adversely affect our business by limiting Arcosa's or its customers' and suppliers' access to credit
4. 23Arcosa and its customers participate in cyclical industries, which are subject to downturns
5. 24The impact of increased prices and inflation on principal raw material prices, including the cost of steel with respect to the order of new barges or wind towers and liquid asphalt with respect to our asphalt paving operations, could negatively impact Arcosa's performance and financial results

Risks related to Arcosa’s operations outside of the U.S., particularly Mexico, could decrease Arcosa’s profitability

1. 25Arcosa may incur increased costs due to fluctuations in foreign currency exchange rates
2. 26Arcosa may be adversely affected by trade policies and practices, including trade practices of competitors that violate U.S. or other foreign laws, regulations, or practices
3. 27Arcosa and its customers depend on government spending and funding from federal, state and local government agencies, and any disruption in government funding could harm Arcosa's business
4. 28Repercussions from terrorist activities or armed conflict could harm Arcosa’s business
5. 29Litigated disputes and other claims could increase Arcosa’s costs and weaken Arcosa’s liquidity and financial condition

Risks Related to Growth Strategy

1. 30Arcosa may not be able to successfully identify, consummate or integrate acquisitions
2. 31Acquisitions and divestitures bring risks of unexpected liabilities that could harm Arcosa's business
3. 32Potential expansion of our business may expose us to new business, regulatory, political, operational, financial, and economic risks associated with such expansion, both inside and outside of the U.S

Risks Related to Regulatory and Environmental Matters

1. 33Our business is subject to significant regulatory compliance obligations in the U.S., Mexico, and other countries where we do business, and a failure to comply with any current or future laws or regulations could have a material adverse effect on us
2. 34Arcosa’s operations are also subject to various governmental regulations in the U.S., Mexico, and other countries where we do business related to the environment, occupational safety and health, labor, and business practices, including OSHA and MSHA
3. 35Arcosa is subject to health and safety laws and regulations and any failure to comply with any current or future laws or regulations could have a material adverse effect on us
4. 36Arcosa has potential exposure to environmental liabilities that may increase costs and lower profitability
5. 37Arcosa’s environmental permits and related laws and regulations, the risk of environmental liability is inherent in the operation of Arcosa’s businesses
6. 38Responding to claims relating to improper handling, transport, storage, or disposal of hazardous materials could be time consuming and costly
7. 39Our manufacturing plants or other facilities may have unknown environmental conditions that could be expensive and time-consuming to correct
8. 40Business, regulatory, and legal developments regarding climate change, and physical impacts from climate change, could have an adverse effect on our business
9. 41Arcosa’s sustainability efforts may be costly or may not align with the public sentiments of our stockholders and others with respect to our sustainability practices and related public disclosures
10. 42From time to time Arcosa may take tax positions that the Internal Revenue Service (“IRS”), the Servicio de Administracion Tributaria (“SAT”) in Mexico, or other taxing jurisdictions may contest
11. 43The expiration, elimination, modification, or reduction of tax benefits or tax credits or the ability to utilize federal-aid programs that allow for purchase price reimbursement or other government funding or subsidies may harm Arcosa's business

Risks Related to Technology and Cybersecurity

1. 44Information system failures, cyber incidents or security breaches, whether with Arcosa or a third party, could disrupt our business and result in the compromise of confidential, sensitive, or proprietary information
2. 45Arcosa is subject to complex and evolving laws and regulations regarding privacy and cybersecurity
3. 46Arcosa’s inability to sufficiently protect Arcosa’s intellectual property rights could adversely affect Arcosa’s business

Risks Related to Arcosa Common Stock

1. 47Arcosa cannot guarantee the timing, amount, or payment of dividends on its common stock
2. 48Certain provisions in Arcosa’s restated certificate of incorporation and amended and restated bylaws ("Arcosa’s Governing Documents"), and of Delaware law, may prevent or delay an acquisition of Arcosa, which could decrease the trading price of the common stock
3. 49Arcosa’s stock price may fluctuate significantly
4. 50Stockholders’ percentage ownership in Arcosa may be diluted because of equity issuances for acquisitions, capital market transactions, or otherwise, including, without limitation, equity awards that Arcosa grants to its directors, officers, and employees