Core Molding Technologies (CMT) risk factors, FY2024 10-K

Risks Relating to our Business

1. 01Our business has concentration risks associated with significant customers
2. 02Our business is affected by the cyclical and overall nature of the industries and markets that we serve
3. 03Price increases in raw materials (including price increases due to prolonged inflation or imposition of tariffs) and availability of raw materials, including disruptions in supply chain, could adversely affect our operating results and financial condition
4. 04Long-term fixed price customer contracts could adversely impact operating results in an inflationary economy
5. 05Cost reduction and quality improvement initiatives by original equipment manufacturers could have a material adverse effect on our business, results of operations, or financial condition
6. 06We operate in highly competitive markets, and if we are unable to effectively compete it may negatively impact future operating results, sales, and earnings
7. 07We may be subject to additional shipping expense or late fees if we are not able to meet our customers' on-time demand for our products
8. 08Increasing competition for highly skilled and talented workers, as well as labor shortages, could adversely affect our business
9. 09Work stoppages or other labor issues at our facilities or at our customers' facilities, or those of our supplies or vendors, could adversely affect our business, results of operations or financial condition
10. 10Our foreign operations in Mexico and Canada subject us to risks that could negatively affect our business
11. 11Changes in U.S. trade policy, including the imposition of new or increased tariffs and the resulting consequences, could have an adverse effect on our business, operating results, and financial condition
12. 12Our business is subject to risks associated with manufacturing equipment and infrastructure
13. 13We explore opportunities to acquire businesses that we believe are related to our core competencies, some of which may be material to us. We expect such acquisitions will produce operating results consistent with our other operations; however, any such acquisition could fail to produce the expected operating results
14. 14If we are unable to meet future capital requirements, our business may be adversely affected
15. 15We may not achieve expected efficiencies related to the proximity of our customers' production facilities to our manufacturing facilities, or with respect to existing or future production relocation plans
16. 16Our products may be rendered obsolete or less attractive if there are changes in technology, regulatory requirements, governmental policies or competitive processes

Financial and Accounting Risks

1. 17Fluctuations in foreign currency exchange rates could adversely affect our results of operations, cash flow, liquidity, or financial condition
2. 18Our stock price can be volatile
3. 19Our ability to maintain effective internal control over financial reporting may be insufficient to allow us to accurately report our financial results or prevent fraud, and this could cause our financial statements to become materially misleading and adversely affect the trading price of our common stock
4. 20Our failure to comply with our debt covenants could have a material adverse effect on our business, financial condition, or results of operations

Legal, Insurance, Tax and Cybersecurity Risks

1. 21Changes in the legal, regulatory, and social responses, including those of stockholder activist organizations, to climate change, including any possible effect on energy prices, could adversely affect our business and reduce our profitability
2. 22We may be subject to product liability claims, recalls or warranty claims, which could have a material adverse effect on our business, results of operations, or financial condition
3. 23Our insurance coverage may be inadequate to protect against the potential hazards to our business
4. 24Certain senior management employees have entered into potentially costly severance arrangements with us if terminated by the employee for good reason
5. 25Our provision for income tax, adverse tax audits, or changes in tax policy could have an adverse effect on our business, financial condition, and results of operations
6. 26Cybersecurity incidents may threaten our confidential information, disrupt operations and result in harm to our reputation and adversely impact our business and financial performance

Risks Related to Economic Conditions

1. 27Economic conditions and disruptions in the financial markets could have an adverse effect on our business, financial condition, and results of operations