Columbus Mckinnon (CMCO) risk factors, FY2025 10-K

Business Risks

1. 01Our business is affected by industrial economic and macroeconomic conditions
2. 02Our business, particularly with respect to our material handling and precision conveyance products, is highly competitive and subject to consolidation of competitors. Increased competition could reduce our sales, earnings, and profitability
3. 03Our growth strategy depends on successful integration of acquisitions, including upon closing of such transaction, the Kito Acquisition
4. 04Our future operating results may be affected by price fluctuations and trade tariffs on steel, aluminum, and other raw materials purchased to manufacture our products. We may not be able to pass on increases in raw material costs to our customers
5. 05Our results of operations could be materially adversely affected if we are unable to obtain sufficient pricing for our products and service to meet our profitability expectations
6. 06If critical components or raw materials used to manufacture our products become scarce or unavailable, then we may incur delays in manufacturing and delivery of our products, which has damaged, and could continue to damage, our business, results of operations and financial condition
7. 07Our backlog is subject to modification, termination or reduction of orders, which could negatively impact our sales
8. 08We rely in large part on independent distributors for sales of our products
9. 09Our future success depends, in part, on our ability to continue to attract, develop, engage and retain qualified employees
10. 10Our ability to understand our customers’ specific preferences and requirements, and to develop, manufacture and market products that meet customer demand as we expand into additional international markets, could significantly affect our business results

Financial Risks

1. 11In connection with the completion of the Precision Conveyance acquisitions, our indebtedness has increased significantly. Our indebtedness could limit our cash flow available for operations and our flexibility
2. 12Our ability to raise capital in the future may be limited
3. 13Our operations outside the U.S. pose certain risks that may adversely impact sales and earnings
4. 14We are subject to currency fluctuations from our sales outside the U.S
5. 15We are subject to debt covenant restrictions
6. 16A ratings downgrade or other negative action by a ratings organization could adversely affect the trading price of our common stock

Risks related to the Kito Acquisition

1. 17The Kito Acquisition is contingent upon the satisfaction of a number of conditions, including regulatory approval, that may be outside either party’s control and that either party may be unable to satisfy or obtain that could cause the stock purchase agreement to be terminated in accordance with its terms
2. 18The Kito Acquisition may present certain risks to our business and operations prior to the closing
3. 19We may fail to successfully close the Kito Acquisition, and if we do successfully close the Kito Acquisition, we may fail to realize all of the anticipated benefits of the Kito Acquisition or those benefits may take longer to realize than expected
4. 20Upon closing of the Kito Acquisition, the Kito business may underperform relative to our expectations
5. 21We will issue a substantial number of Preferred Shares (as defined below) and incur a substantial amount of indebtedness in connection with the financing of the Kito Acquisition
6. 22We expect to incur substantial expenses related to the Kito Acquisition and to the integration of Kito into our business, and the expenses may be greater than anticipated due to unexpected events
7. 23Pursuant to the terms of the Investment Agreement, we are required to recommend that our shareholders approve certain matters and terms relating to the Preferred Shares. We cannot guarantee that our shareholders will approve these matters

Legal Risks

1. 24Our products involve risks of personal injury and property damage, which exposes us to potential liability
2. 25We are subject to various environmental laws, which may require us to expend significant capital, incur substantial cost and could lower our margins
3. 26We may face claims of infringement on the intellectual property of others, or others may infringe upon our intellectual property
4. 27We rely on subcontractors or suppliers to perform their contractual obligations

General Risks

1. 28The market price of our common stock has been, and may in the future continue to be, volatile
2. 29Adverse changes in global economic conditions may negatively affect our industry, business, and results of operations
3. 30Climate change, or legal, regulatory or market measures to address climate change, may materially adversely affect our financial condition and business operations
4. 31Our business operations may be adversely affected by information technology systems interruptions or intrusion
5. 32We operate in many different jurisdictions, and we could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-corruption laws
6. 33We depend on our management team and the loss of any member could adversely affect our operations