CTS (CTS) risk factors, FY2024 10-K

Risks Related to Our Business and Industry

1. 01Because we currently derive a substantial portion of our revenues from a small number of customers, any decrease in orders from these customers could have an adverse effect on our business, financial condition and operating results
2. 02Our customers may cancel their orders, change production quantities or locations or delay production
3. 03Deterioration of general economic, political, credit and/or capital market conditions could adversely affect our financial performance, our ability to grow or sustain our business, financial condition and results of operations, and our ability to access the capital markets
4. 04Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy caused by the ongoing Russia-Ukraine conflict or other geopolitical tensions and conflict
5. 05The impacts of supply chain constraints and inflationary pressures could adversely impact our operating results
6. 06We sell products to customers in cyclical industries that are subject to significant downturns that could materially adversely affect our business, financial condition and operating results
7. 07A portion of our revenue is derived from the sale of defense-related products through various contracts and subcontracts. These contracts may be suspended, canceled, or delayed, which could have an adverse impact on our revenues
8. 08We are susceptible to trends and factors affecting industries that we serve
9. 09Our operating results may vary significantly from period to period
10. 10We may restructure our operations or fail to execute capital projects as planned, which may materially adversely affect our business, financial condition and operating results
11. 11We may be unable to compete effectively against competitors
12. 12We may be unable to keep pace with rapid technological changes that could make some of our products or processes obsolete before we realize a return on our investment
13. 13Products we manufacture may contain design or manufacturing defects that could result in reduced demand for our products or services and liability claims against us
14. 14We are subject to government regulations, including environmental, health, and safety laws and regulations, that expose us to potential financial liability
15. 15Changes in tax laws could cause volatility or have a material adverse effect on our business and financial results
16. 16Uncertainty over global tariffs and trade policies, or the financial impact of tariffs and trade policies, may negatively affect our results

Risks Related to Technology and Data Privacy

1. 17We are exposed to, and may be adversely affected by, cybersecurity threats, incidents or other disruptions to our information technology systems and data
2. 18Cybersecurity incidents could have a disruptive effect on our business
3. 19We are exposed to risks and costs associated with complying with privacy laws and protecting personal data and other sensitive information
4. 20Failure to keep pace with developments in technology could adversely affect our operations or competitive position and we may be exposed to risks and incur costs associated with maintaining or upgrading our technology and systems
5. 21Because third parties provide us with a number of operational and technical services, third-party cybersecurity incidents could expose us to liability, harm our reputation, damage our competitiveness and adversely affect our financial performance
6. 22As we integrate artificial intelligence technologies into our processes, these technologies may present business, compliance and reputational risks

Risks Related to Indebtedness and Financing

1. 23Our indebtedness may adversely affect our financial health
2. 24The estimates and assumptions on which our financial projections are based may prove to be inaccurate, which may cause our actual results to materially differ from such projections, which may adversely affect our future profitability, cash flows and stock price

Risks Related to Other External Factors

1. 25Loss, operational disruptions or closure of a key facility, including those of our suppliers, due to unforeseen or catastrophic events or otherwise, could have a material adverse effect on our business and financial results
2. 26as a result of the need for us or our suppliers to operate our respective businesses with substantial modifications to employee travel and employee work locations
3. 27Climate-related events and climate change legislation could adversely impact our business
4. 28Unfavorable outcomes of legal or regulatory matters may adversely affect our business and financial condition and damage our reputation
5. 29We face risks relating to our international operations
6. 30international operations. In addition, these same factors may also place us at a competitive disadvantage compared to some of our foreign competitors
7. 31We are exposed to fluctuations in foreign currency exchange rates that may adversely affect our business, financial condition and operating results
8. 32If we are unable to protect our intellectual property or we infringe or are alleged to infringe, on others' intellectual property rights, our business, financial condition and operating results could be materially adversely affected
9. 33Loss of our key management and other personnel, or an inability to attract key management and other personnel, could materially affect our business
10. 34Ineffective internal control over our financial reporting may harm our business
11. 35Environmental, social, and governance ("ESG") issues, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition and results of operations and damage our reputation
12. 36Shareholder activism efforts or unsolicited offers from a third party could cause a material disruption to our business and financial results
13. 37Future dividends on our common stock may be restricted or eliminated
14. 38We may not continue to repurchase our common stock or make repurchases of our common stock at favorable prices