CTS (CTS) risk factors, FY2025 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 markets29% rewritten
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, increased tariffs and inflationary pressures could adversely impact our operating results37% rewritten
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 have a substantial amount of goodwill on our balance sheet. Future write-offs of goodwill may have the effect of decreasing our earnings or increasing our lossesNew
12. 12We may be unable to compete effectively against competitors
13. 13We 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
14. 14Products we manufacture may contain design or manufacturing defects that could result in reduced demand for our products or services and liability claims against us
15. 15We are subject to government regulations, including environmental, health, and safety laws and regulations, that expose us to potential financial liability20% rewritten
16. 16Changes in tax laws could cause volatility or have a material adverse effect on our business and financial results
17. 17Uncertainty over global tariffs and trade policies, or the financial impact of tariffs and trade policies, may negatively affect our results37% rewritten

Risks Related to Technology, Cybersecurity and Data Privacy

1. 18We are exposed to, and may be adversely affected by, cybersecurity threats, incidents or other disruptions to our information technology systems and data
2. 19Cybersecurity incidents could have a disruptive effect on our business24% rewritten
3. 20We are exposed to risks and costs associated with complying with privacy laws and protecting personal data and other sensitive information
4. 21Failure 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. 22Because 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. 23As we integrate artificial intelligence technologies into our processes, these technologies may present business, compliance and reputational risks

Risks Related to Indebtedness and Financing

1. 24Our indebtedness may adversely affect our financial health73% rewritten
2. 25Our credit facility contains provisions that could materially restrict our businessNew
3. 26The 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. 27Loss, 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. 28as 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. 29Climate-related events and climate change legislation could adversely impact our business
4. 30Unfavorable outcomes of legal or regulatory matters may adversely affect our business and financial condition and damage our reputation
5. 31We face risks relating to our international operations59% rewritten
6. 32We are exposed to fluctuations in foreign currency exchange rates that may adversely affect our business, financial condition and operating results
7. 33If 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
8. 34Loss of our key management and other personnel, or an inability to attract key management and other personnel, could materially affect our business
9. 35Ineffective internal control over our financial reporting may harm our business
10. 36Shareholder activism efforts or unsolicited offers from a third party could cause a material disruption to our business and financial results
11. 37Future dividends on our common stock may be restricted or eliminated
12. 38We may not continue to repurchase our common stock or make repurchases of our common stock at favorable prices35% rewritten