Commercial Vehicle Group (CVGI) risk factors, FY2024 10-K

Risks Related to Our Business and Industry

1. 01Our results of operations could be adversely affected by declines in new truck orders by fleets, freight tonnage hauled and in infrastructure development and other construction projects as a result of a downturn in the U.S. and/or global economy or other reasons
2. 02We face risks related to heightened inflation, recession, financial and credit market disruptions and other economic conditions
3. 03Volatility in and disruption to the global economic environment and changes in the regulatory and business environments in which we operate may have an adverse effect on our business, results of operations and financial condition
4. 04We may be unable to successfully implement our business strategy and, as a result, our businesses and financial position and results of operations could be adversely affected
5. 05Circumstances associated with our divestiture strategy could adversely affect our results of operations and financial condition
6. 06Our customer base is concentrated and the loss of business from a major customer or the discontinuation of particular commercial vehicle platforms could reduce our revenues
7. 07Our profitability could be adversely affected if the actual production volumes for our customers’ vehicles are significantly lower than expected or our costs are higher than expected
8. 08Many of our new and targeted customers are start-up or early-stage companies and these customers are at substantial risk that their businesses will not succeed
9. 09We may be unable to successfully implement price increases to offset inflation or new tariffs and, as a result, our businesses and financial position and results of operations could be adversely affected
10. 10We are subject to certain risks associated with our foreign operations
11. 11Decreased availability or increased costs of materials could affect both our ability to produce products as well as the cost of producing our products
12. 12We have invested substantial resources in markets where we expect growth and we may be unable to timely alter our strategies should such expectations not be realized
13. 13Our inability to compete effectively in the highly competitive commercial vehicle component supply industry could result in lower prices for our products, loss of market share and reduced gross margins, which could have an adverse effect on our revenues and operating results
14. 14We may be unable to successfully introduce new products and, as a result, our business, and financial condition and results of operations could be adversely affected
15. 15We rely on third parties for raw materials, parts, and components
16. 16We could experience disruption in our supply or delivery chain, which could cause one or more of our customers to halt or delay production
17. 17If we are unable to recruit or retain senior management and other skilled personnel, our business, operating results and financial condition could be adversely affected
18. 18We may be adversely impacted by labor strikes, work stoppages and other matters
19. 19Our earnings may be adversely affected by changes to the carrying values of our tangible and intangible assets as a result of recording any impairment charges deemed necessary
20. 20may trigger an evaluation of the recoverability of the recorded goodwill and other long-lived assets. Any charge for impairment could adversely affect our reported net income and our stockholders’ equity
21. 21We have established and may establish in the future valuation allowances on deferred tax assets. These changes may have an adverse effect on our results of operations and financial position
22. 22Our inability to successfully achieve operational efficiencies could result in the incurrence of additional costs and expenses that could adversely affect our reported earnings
23. 23The geographic profile of our taxable income could adversely impact our tax provision and therefore our results of operations
24. 24Exposure to currency exchange rate fluctuations on cross border transactions and translation of local currency results into United States dollars could adversely impact our results of operations
25. 25We have only limited protection for our proprietary rights in our intellectual property, which makes it difficult to prevent third parties from infringing upon our rights and our operations could be limited by the rights of others
26. 26Our products may be susceptible to claims by third parties that our products infringe upon their proprietary rights
27. 27We may be subject to product liability claims, recalls or warranty claims, which could be expensive, damage our reputation and result in a diversion of management resources
28. 28Our businesses are subject to statutory environmental and safety regulations in multiple jurisdictions, and the impact of any changes in regulation and/or the violation of any applicable laws and regulations by our businesses could result in an adverse effect on our financial condition and results of operations
29. 29We may be unable to complete strategic acquisitions, or we may encounter unforeseen difficulties in integrating acquisitions

Risks Related to Our Indebtedness

1. 30A credit rating downgrade could impair our ability to obtain additional debt financing on favorable terms, if at all, and significantly reduce the trading price of our common stock
2. 31Our indebtedness may adversely affect our cash flow and our ability to operate our business, remain in compliance with debt covenants and make payments on our indebtedness

Risks Related to Our Common Stock

1. 32Our operating results, revenues and expenses may fluctuate significantly from quarter-to-quarter or year-to-year, which could have an adverse effect on the market price of our common stock
2. 33Our operating results, revenues and expenses have in the past varied and may in the future vary significantly from quarter-to-quarter or year-to-year. These fluctuations have in the past and could have in the future an adverse effect on the market price of our common stock
3. 34Our common stock has historically had a low trading volume with limited analyst coverage and, as a result, any sale of a significant number of shares may depress the trading price of our stock; stockholders may be unable to sell their shares above the purchase price
4. 35Provisions in our charter documents and Delaware law could discourage potential acquisition proposals, could delay, deter or prevent a change in control and could limit the price certain investors might be willing to pay for our stock
5. 36Security breaches and other disruptions could compromise our information systems and expose us to liability, which could cause our business and reputation to suffer
6. 37Our implementation of a new ERP system may adversely affect our business and results of operations or the effectiveness of our internal control over financial reporting
7. 38Pandemics, epidemics, disease outbreaks and other public health crises have disrupted our business and operations, and future public health crises could materially adversely impact our business, financial condition, liquidity and results of operations