Custom Truck One Source (CTOS) risk factors, FY2024 10-K

Risks Related to the Company’s Business and Industry

1. 01Effective management of our rental equipment is vital to our business, and an inability to obtain raw materials, component parts and/or finished goods in a timely and cost-effective manner would adversely affect our ability to manufacture and market our products
2. 02The Company is subject to competition, which may have a material adverse effect on the Company’s business by reducing the Company’s ability to increase or maintain revenues or profitability
3. 03Our sales order backlog may not be indicative of the level of our future revenues
4. 04A small portion of our workforce is unionized, and more of our workforce could become unionized in the future, which could negatively impact the stability of our production, materially reduce our profitability and increase the risk of work stoppages
5. 05A number of key personnel, including our management and skilled technicians, are critical to the success of our business
6. 06A material disruption to our operation and manufacturing locations could adversely affect our ability to generate revenue
7. 07The cost of new equipment that we purchase for use in our rental fleet or for sale as inventory may increase, and the aging or obsolescence of our existing equipment, and fluctuations in the market value thereof, could have a material adverse effect on our business, financial condition and results of operations
8. 08Our business is highly dependent on the timely and sufficient delivery of finished goods, such as commercial vehicles, from our suppliers
9. 09Our business may be impacted by government spending
10. 10We may experience losses in excess of our recorded reserves for receivables
11. 11Uncertainty relating to macroeconomic conditions may reduce demand for our products and services, resulting in non-performance of contracts by our lessees or delays in customer purchase decisions, limit our ability to obtain additional capital to finance new investments, or have other unforeseen negative effects
12. 12If petroleum prices increase, then our results of operations could be adversely affected
13. 13Regulatory, technological advancement, or other changes in our core end-markets may affect our customers’ spending on the products and services we provide
14. 14In the normal course of business, we engage in discussions relating to strategic initiatives including acquisitions and divestitures. Such transactions are accompanied by a number of risks
15. 15Platinum owns the majority of our equity, and its interests may not be aligned with yours
16. 16The price of our common stock has been, and may continue to be, volatile

Risks Related to the Company’s Indebtedness

1. 17We have, and may incur, significant indebtedness and may be unable to service our debt. This indebtedness could adversely affect our financial position, limit our available cash and our access to additional capital and prevent us from growing our business
2. 18If new debt is added to our current debt levels, the risks that we now face would intensify
3. 19availability of refinancing options, which will be affected by prevailing economic conditions and, the availability of capital, as well as financial, business and other factors, some of which are beyond our control
4. 20The Indenture and the ABL Credit Agreement impose significant operating and financial restrictions on our company and our subsidiaries, which may prevent us from capitalizing on business opportunities
5. 21Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly

Risks Related to Legal, Compliance and Regulatory Matters

1. 22We are subject to complex laws and regulations, including environmental and safety regulations that can adversely affect the cost, manner or feasibility of doing business
2. 23We are subject to a series of risks related to climate change
3. 24Increased attention to, and evolving expectations for, sustainability and environmental, social, and governance (“ESG”) initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business