Del Monte (DMC) risk factors, FY2024 10-K

Risks Related to Global Market Conditions

1. 01We may not be able to increase prices to fully offset continued inflationary pressures on various commodities, raw materials and other costs, which may impact our financial condition or results of operations
2. 02Our profit margins for many of our products, including bananas, pineapples, avocados and other fresh produce, are volatile and we may not be able to increase prices to address cost increases
3. 03Our industry is highly competitive, which could adversely affect our profitability
4. 04influenced by various factors including price, product quality, brand recognition and customer loyalty, effectiveness of marketing and promotional activity, and the ability to identify and satisfy evolving consumer preferences
5. 05Consolidation of retailers, wholesalers and distributors in the food industry may result in downward pressure on sales prices
6. 06We are subject to material currency exchange risks because our operations involve transactions denominated in various currencies, which could negatively affect our operating results

Risks Related to Our Business and Operations

1. 07The loss of one or more of our largest customers, or a reduction in the level of purchases made by these customers, could negatively impact our sales and profits
2. 08Shortages of qualified labor, increases in wage and benefit costs, changes in laws and other labor regulations, and labor disruptions could impact our financial results and decrease our profitability
3. 09We are dependent on our relationships with key suppliers to obtain a number of our products
4. 10Disruption of our supply chain could adversely affect our business
5. 11Our strategy of diversifying our product lines, expanding into new geographic markets and increasing the value-added services that we provide to our customers may not be successful
6. 12Some of our products contain genetically modified organisms (“GMOs”) or are gene-edited and we may in the future need to develop and market such products based on adverse market conditions
7. 13Demand for our products is subject to changing consumer preferences, and a reduction in demand for any one or more of our products could negatively impact our sales and profits
8. 14Adverse perception, events or rumors relating to our Del Monte® brand could have a material adverse effect on our business
9. 15subsidiary. Any media coverage resulting therefrom, could create a negative public perception of our business, which in turn could have a negative impact on our products’ acceptance by consumers or customers
10. 16We rely on protection of our intellectual property and proprietary rights
11. 17We may not be able to successfully consummate and manage ongoing acquisition, joint venture and business partnership activities, which could have an adverse impact on our results
12. 18A sustained lack of profitability could cause us to incur impairment charges of our intangible and long-lived assets and/or record valuation allowances against our deferred tax assets
13. 19Any failure to adequately store, maintain and deliver quality perishable foods could materially adversely affect our business, financial condition and operating results

Regulatory Risks

1. 20We are subject to the risk of product contamination and product liability claims which could materially and adversely affect our results and financial condition
2. 21We are subject to regulations concerning food safety and protection of health and the environment
3. 22We are subject to legal and environmental risks arising from the transportation of our products and our commercial shipping and logistics business that could result in significant cash outlays
4. 23Environmental, social and governance matters and any related reporting obligations may impact our businesses
5. 24We are exposed to political, economic and other risks from operating a multinational business, which could have a material adverse effect on our results and financial condition
6. 25The enforcement of regulations concerning the marketing and labeling of food products could adversely affect our reputation
7. 26Changes in tax laws in any of the jurisdictions in which we operate or in which we establish holding companies, or adverse outcomes from tax audits could cause fluctuations in our overall tax rate and adversely impact our operating results

Risks Related to Environmental Concerns/Agricultural Operations

1. 27Our agricultural plantings are potentially subject to damage from crop disease or insect infestations, which could adversely impact our operating results and financial condition
2. 28Adverse weather, natural disasters and other conditions affecting the environment, including the effects of climate change, could result in substantial losses and weaken our financial condition
3. 29and/or our costs of purchased fruit may increase. These risks can be exacerbated when a substantial portion of our production of a specific product is grown in one region, provided by a limited number of suppliers, or when it endangers one of our primary products
4. 30Regulations concerning the use of pesticides, fertilizers and other agricultural products could adversely impact us by increasing our production costs or restricting our ability to import certain products into our selling markets
5. 31We may be subject to liability and/or increased costs for environmental damage from the use of herbicides, pesticides and other substances or environmental contamination of our owned or leased property
6. 32Water scarcity in our growing regions could adversely affect our agricultural operations, financial condition, results of operations and cash flows
7. 33The effects of climate change and climate change laws could have a material adverse impact on our financial condition and results of operations

Risks Related to Our Information Systems

1. 34We rely on information systems in managing our operations and any breaches of our information system security measures, or those third parties upon which we rely, could disrupt our internal operations and may have an adverse effect on our business
2. 35litigation alleging non-compliance. In such cases, the cost to remediate any damages to our information technology systems that we may suffer in connection with a cyber-attack could be significant
3. 36Our operations and reputation may be impaired if our information technology systems fail to perform adequately

Risks Related to Our Financing

1. 37Our indebtedness could limit our financial and operating flexibility and subject us to other risks
2. 38Increases in interest rates could increase the cost of servicing our indebtedness and have an adverse effect on our results of operations and cash flows

Risks Related to Our Corporate Structure

1. 39Our principal shareholders are able to significantly influence all matters requiring shareholder approval
2. 40Our organizational documents contain certain anti-takeover provisions that could delay, deter or prevent a change in control
3. 41Our shareholders have limited rights under Cayman Islands law

General Risks

1. 42Our success depends on the services of our senior executives, the loss of any one of which could disrupt our operations