Bellring Brands (BRBR) risk factors, FY2024 10-K

Industry and Operating Risks

1. 01A substantial amount of our net sales comes from our RTD protein shakes, and a decrease in sales of our RTD protein shakes would adversely affect our business, financial condition, results of operations and cash flows
2. 02We operate in a category with strong competition
3. 03Disruption of our supply chain and changes in weather conditions could have an adverse effect on our business, financial condition, results of operations and cash flows
4. 04ounce size are currently sourced from a single facility of a third-party contract manufacturer. Competitors can be affected differently by weather conditions and natural disasters depending on the location of their suppliers and operations
5. 05Our reliance on a limited number of suppliers for certain equipment, ingredients and packaging materials, the price and availability of ingredients and packaging materials, higher freight costs and higher energy costs could negatively impact our business, financial condition, results of operations and cash flows
6. 06We must identify changing consumer and customer preferences and behaviors and develop and offer products to meet these preferences
7. 07Our results may be adversely impacted if consumers do not maintain favorable perceptions of our brands
8. 08Consolidation in our distribution channels, and competitive, economic and other pressures facing our customers, may hurt our profit margins
9. 09Our sales and profit growth are dependent upon our ability to expand existing market penetration and enter into new markets
10. 10If our products become contaminated or adulterated, or if they are misbranded or mislabeled, we might need to recall or withdraw those items and we may experience product liability claims
11. 11A limited number of customer accounts represents a large percentage of our combined net sales. Our largest customers, Walmart and its affiliates (which includes Sam’s Club), Costco and Amazon, accounted for approximately 74.8% of our net sales in our year ended September 30, 2024
12. 12Fluctuations in our business due to changes in our promotional activities and seasonality may have an adverse impact on our financial condition, results of operations and cash flows
13. 13Our international operations subject us to additional risks
14. 14Our market size and related estimates may prove to be inaccurate
15. 15Our intellectual property rights are valuable and any inability to protect them, or termination of our material intellectual property licenses, could reduce the value of our products and brands and have a material adverse effect on our business
16. 16We may not be able to effectively manage our growth, which could materially harm our business, financial condition, results of operations and cash flows
17. 17Technology failures, cybersecurity incidents and corruption of our data privacy protections could disrupt our operations and negatively impact our business
18. 18and motives (including monetization of corporate, payment or other internal or personal data, theft of trade secrets and intellectual property for competitive advantage and leverage for political, social, economic and environmental reasons)
19. 19Climate change, or legal or market measures to address climate change, may negatively affect our business, reputation and operations
20. 20If we pursue acquisitions or other strategic transactions, we may not be able to successfully consummate favorable transactions or successfully integrate acquired businesses

Financial and Economic Risks

1. 21We have substantial debt, which could have a negative impact on our financing options and liquidity position and which could adversely affect our business
2. 22Despite our level of indebtedness, we may be able to incur substantially more debt, which could further exacerbate the risks related to our debt leverage, and we may in any event be required to maintain a minimum level of indebtedness
3. 23The agreements governing our debt contain various covenants that limit our ability to take certain actions and also require us to meet financial maintenance tests, and failure to comply with these covenants could have a material adverse effect on us
4. 24contractual limits on the ability of our subsidiaries to pay dividends to us; enter into new lines of business; enter into transactions with affiliates; and sell assets or merge with other companies
5. 25To service indebtedness and fund other cash needs, we will require a significant amount of cash. Our ability to generate cash depends on many factors beyond our control
6. 26Uncertain or unfavorable economic conditions, including during periods of high inflation, recessions or other economic disruption, could limit consumer and customer demand for our products, increase our costs or otherwise adversely affect us
7. 27Increases in interest rates may negatively affect our earnings
8. 28Our borrowing costs and access to capital and credit markets could be adversely affected by a downgrade or potential downgrade of our credit ratings
9. 29U.S. and global capital and credit market issues, including those that have arisen as a result of heightened inflation and recession or other economic concerns, could negatively affect our liquidity, increase our costs of borrowing and disrupt the operations of our suppliers and customers
10. 30Impairment in the carrying value of intangible assets could negatively impact our financial condition and results of operations. If our goodwill or other intangible assets become impaired, we will be required to record impairment charges, which may be significant
11. 31Unsuccessful implementation of business strategies to reduce costs, or unintended consequences of the implementation of such strategies, may adversely affect our business, financial condition, results of operations and cash flows
12. 32We have incurred, and we will continue to incur, additional fees, costs and expenses to create and maintain the corporate infrastructure to operate as a public company, and we have and we will continue to experience increased ongoing costs and expenses in connection with being a public company
13. 33Actual operating results may differ significantly from our guidance and our forward-looking statements

Risks Related to Our Relationship with Post

1. 34We have overlapping directors and management with Post, which may lead to conflicting interests or the appearance of conflicting interests
2. 35Our certificate of incorporation could prevent us from benefiting from corporate opportunities that might otherwise have been available to us
3. 36We may be responsible for U.S. federal income tax liabilities that relate to the Spin-off

Legal and Regulatory Risks

1. 37Violations of laws or regulations by us or our third-party contract manufacturers, as well as new laws or regulations or changes to existing laws or regulations, could adversely affect our business
2. 38Certain of our products are subject to a higher level of regulatory scrutiny, resulting in increased costs of operations and the potential for delays in product sales
3. 39Pending and future litigation and claims may impair our reputation or lead us to incur significant costs
4. 40We are subject to environmental laws and regulations that can impose significant costs and expose us to potential financial liabilities

Risks Related to Ownership of Our Common Stock

1. 41The market price and trading volume of our common stock may be volatile
2. 42We may not declare or pay any dividends on our common stock for the foreseeable future
3. 43Our certificate of incorporation and bylaws and provisions of Delaware law may discourage or prevent strategic transactions, including a takeover of the Company, even if such a transaction would be beneficial to our stockholders
4. 44These restrictions and provisions could keep us from pursuing relationships with strategic partners and from raising additional capital, which could impede our ability to expand our business and strengthen our competitive position. These restrictions could also limit stockholder value by impeding a sale of the Company

General Risks

1. 45Changes in tax laws may adversely affect us, and the IRS or a court may disagree with our tax positions, which may result in adverse effects on our business, financial condition, results of operations and cash flows
2. 46performance of an investment in our stock. Furthermore, there is no assurance that the IRS or a court will agree with the positions taken by us, in which case tax penalties and interest may be imposed that could adversely affect our business, financial condition, results of operations and cash flows
3. 47Increases in labor-related costs, including costs of medical and other employee health and welfare benefits, may reduce our profitability
4. 48If we are unable to continue to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act, or our internal control over financial reporting is not effective, the reliability of our financial statements may be questioned, and the price of our common stock could suffer
5. 49Actions of stockholders could cause us to incur substantial costs, divert management’s attention and resources and have an adverse effect on our business