CSW Industrials (CSW) risk factors, FY2025 10-K

Market, Economic and Geopolitical Risks

1. 01We have significant manufacturing operations in Vietnam, in addition to using third parties located in China and elsewhere
2. 02The industries in which we operate are highly competitive, and many of our products are in highly competitive markets. We may lose market share to producers of other products that directly compete with or that can be substituted for our products
3. 03Certain end markets that we serve are cyclical, which can cause significant fluctuations in our results of operations and cash flows
4. 04Growth of our business will depend in part on market awareness of our industrial brands, and any failure to develop, maintain, protect or enhance our industrial brands would hurt our ability to retain or attract customers
5. 05Climate change could have an adverse effect on our business
6. 06Climate change regulations may impact our ability to operate at a profit and harm our operating margins
7. 07directed the SEC to explain its plan for the rules in a July 2025 status report. If the rules become effective, we will be required to provide the enhanced climate-related disclosures

Business, Operations and Human Capital Risks

1. 08Our attempts to address evolving customer needs require that we continually enhance our products. Our efforts to enhance our products may not be commercially viable and failure to develop commercially successful products or keep pace with our competitors could harm our business and results of operations
2. 09Our international sales and manufacturing operations, including our use of third-party manufacturers for certain products that we sell, involve inherent risks that could result in harm to our business
3. 10Loss of key suppliers, the inability to secure raw materials on a timely basis, the potential impacts of global inflation, or our inability to pass commodity price increases on to customers could have an adverse effect on our business
4. 11Our insurance policies may not cover, or fully cover, us against natural disasters, global conflicts or environmental risk
5. 12Cybersecurity breaches and other disruptions to our information technology systems could compromise our information, disrupt our operations, and expose us to liability, which may adversely impact our operations
6. 13Our relationships with our employees could deteriorate, which could adversely affect our operations
7. 14Loss of key personnel or our inability to attract and retain new qualified personnel could hurt our business and inhibit our ability to operate and grow successfully

Strategic Transactions and Investments Risks

1. 15Our acquisition and integration of businesses could negatively impact our financial results
2. 16From time to time, our business has engaged in strategic initiatives, and such activities may occur in the future. These efforts have included consolidating manufacturing facilities, rationalizing our manufacturing processes, and establishing a joint venture within our Specialized Reliability Solutions segment
3. 17Changes in future business or other market conditions could cause business investments and/or recorded goodwill or other long-term assets to become impaired, resulting in substantial losses and write-downs that would materially adversely affect our results of operations and financial condition

Financial Risks

1. 18Our outstanding indebtedness and the restrictive covenants in the agreements governing our indebtedness limit our operating and financial flexibility
2. 19Fluctuations in currency exchange rates may significantly impact our results of operations and may significantly affect the comparability of our results between financial periods
3. 20Changes in effective tax rates or adverse outcomes resulting from examination of our income tax returns could adversely affect our results
4. 21We may acquire various structured financial instruments for purposes of hedging or reducing our risks, which may be costly and ineffective
5. 22We may inadvertently fail to maintain effective disclosure controls and procedures and internal controls over financial reporting

Legal and Regulatory Risks

1. 23Regulatory and statutory changes applicable to us or our customers could adversely affect our financial condition and results of operations
2. 24Compliance with extensive environmental, health and safety laws could require material expenditures, changes in our operations or site remediation
3. 25Likewise, any investigation of any potential violations of the FCPA, other anti-corruption laws or Trade Control Laws by the U.S. or foreign authorities could also have an adverse impact on our reputation, business, financial condition and results of operations
4. 26Industrial manufacturing is inherently hazardous, which could result in accidents that disrupt our operations or expose us to significant losses or liabilities
5. 27Regulation of our employees’ exposure to certain chemicals or other hazardous products could require material expenditures or changes in our operations
6. 28We may be unable to protect our trademarks, trade secrets, other intellectual property and proprietary information, which could harm our competitive position
7. 29Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our business, financial condition or results of operations
8. 30Forward-Looking Statements