EnerSys (ENS) risk factors, FY2025 10-K

Business and Operating Risks

1. 01We operate in an extremely competitive industry and are subject to pricing pressures
2. 02Reliance on third party relationships and derivative agreements could adversely affect our business
3. 03We may experience issues with lithium-ion cells or other components manufactured at our proposed gigafactory, which may harm the production and profitability of our energy storage products
4. 04Our $199 million funding from the U.S. Department of Energy ("DOE") is subject to review and will be subject to negotiation of specific terms and contingent on our compliance with the requirements negotiated with the DOE
5. 05Cost increases, supply disruptions or shortages of any of our battery components, such as electronic and mechanical parts, or the raw materials used in the production of such parts could adversely affect our business
6. 06We have experienced and may continue to experience, difficulties implementing our global enterprise resource planning system, which may adversely affect our business, financial condition and results of operations
7. 07The failure to successfully implement efficiency and cost reduction initiatives, including restructuring activities, could materially adversely affect our business, financial position and results of operations, and we may not realize some or all of the anticipated benefits of those initiatives
8. 08Our failure to introduce new products and product enhancements coupled with broad market acceptance of new technologies introduced by our competitors could adversely affect our business
9. 09If we are not able to adequately protect our proprietary intellectual property and technology, we may lose any technological advantages and our business, financial position and results of operations may be materially adversely affected
10. 10Relocation of our customers’ operations could adversely affect our business, financial condition and results of operations
11. 11Quality problems with our products could harm our reputation and erode our competitive position
12. 12We offer our products under a variety of brand names, the protection of which is important to our reputation for quality in the consumer marketplace
13. 13Our growth strategy depends on our ability to continue to expand our market presence through acquisitions, and our business could be materially adversely affected if we are unable to identify suitable acquisition candidates, complete any proposed acquisitions or successfully integrate the businesses we acquire
14. 14Any acquisitions that involve the issuance of our equity securities may dilute our stockholder ownership interests, reduce the market price of our stock, or both, and as a result our business, financial condition and results of operations could be adversely affected
15. 15If our electronic data is compromised, our business could be materially adversely affected
16. 16Our software and related services are highly technical and may contain undetected software bugs, errors or other vulnerabilities, which could manifest in ways that could adversely affect our reputation and our business
17. 17If we cannot keep pace with rapid developments in technology, the use of our products and services and, consequently, our revenues could decline
18. 18Work stoppages or similar difficulties could significantly disrupt our operations, reduce our revenues and materially adversely affect our business
19. 19Our results of operations may be negatively impacted by public health epidemics or outbreaks
20. 20The uncertainty in global economic conditions or geographic regions in which our customers operate could adversely affect our business, financial position and operating results
21. 21Government reviews, inquiries, investigations and actions could harm our business or reputation
22. 22Our international operations may be adversely affected by actions taken by foreign governments or other forces or events over which we may have no control
23. 23We are exposed to exchange rate and inflation risks, and our net earnings and financial condition may suffer due to currency translations

Financial and Accounting Risks

1. 24We may not be able to maintain adequate credit facilities, which could materially adversely affect our business, financial condition and results of operations
2. 25Our indebtedness could adversely affect our business, financial condition and results of operations and restrict us in ways that limit our flexibility in operating our business
3. 26We may have exposure to greater than anticipated tax liabilities, which could adversely impact our business, financial position and results of operations
4. 27Changes in tax laws or tax rulings could materially affect our business, financial position and results of operations

Legal and Regulatory Risks

1. 28As a global business, we are subject to extensive environmental liability on our operations due to current environmental laws and regulations in the jurisdictions we operate
2. 29We are subject to a wide variety of domestic and foreign laws and regulations that could adversely affect our business, financial condition and results of operations
3. 30Complying or failing to comply with conflict minerals regulations could materially and adversely affect our supply chain, our relationships with customers and suppliers and our financial results
4. 31Our failure to comply with data privacy regulations could adversely affect our business
5. 32The reduction, modification, elimination or expiration of government incentives for, or regulations regarding, the use of energy systems and batteries could reduce demand for our products and harm our business
6. 33There can be no assurance that we will continue to declare cash dividends at all or in any particular amounts, and any reduction in or elimination of our dividend payment could reduce the market price of our stock
7. 34We cannot guarantee that our share repurchase programs will be fully consummated or that they will enhance long-term stockholder value. Share repurchases could also increase the volatility of the market price of our stock and diminish our cash reserves
8. 35We depend on our senior management team and other key employees, and significant attrition within our management team or unsuccessful succession planning could adversely affect our business
9. 36If our internal controls are found to be ineffective, our results of operations or our stock price may be adversely affected
10. 37Changes in accounting principles and guidance could result in unfavorable accounting charges or effects, which could adversely affect our business