ESAB (ESAB) risk factors, FY2025 10-K

Risks Related to our Business

1. 01The cyclical nature and maturity of the welding and cutting industry in developed markets may adversely affect our performance
2. 02A significant or sustained decline in the levels of new capital investment and maintenance expenditures by certain of our customers could reduce the demand for our products and services and harm our operations and financial performance24% rewritten
3. 03The majority of our sales are derived from international operations. We are subject to specific risks associated with international operations44% rewritten
4. 04Our operations are exposed to risks related to the Russian invasion of Ukraine and could be impacted by other wars and geopolitical turmoil
5. 05Natural or man-made disasters, adverse weather events or conditions, epidemics, pandemics and other widespread health events have adversely impacted, and may in the future adversely impact, our results of operations, financial condition and overall financial performance
6. 06Significant movements in foreign currency exchange rates have adversely impacted our financial results in the past and may adversely impact our results in the future
7. 07Acquisitions are a significant part of our growth strategy. If we are unable to identify suitable acquisition candidates, complete proposed acquisitions or successfully integrate the businesses we acquire, our growth strategy may not succeed, and we may not realize the anticipated benefits of our acquisitions
8. 08We may require additional capital to finance our acquisitions and operation needs, and such capital may not be available, impacting our ability to pursue our growth strategy24% rewritten
9. 09Our restructuring activities may subject us to additional uncertainty in our operating results
10. 10Any impairment in the value of our intangible assets, including Goodwill, would negatively affect our operating results and total capitalization
11. 11Our existing and any future indebtedness could adversely affect our businesses and our ability to meet our obligations and pay dividends31% rewritten
12. 12We may be unable to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful
13. 13A material disruption at any of our manufacturing facilities could adversely affect our ability to generate sales and meet customer demand
14. 14Interruptions in production could increase our costs and reduce our sales. Any interruption in production capability could require us to make substantial capital expenditures to remedy the situation or rely on third-party manufacturers, which could negatively affect our profitability and financial condition
15. 15Failure to maintain and protect our intellectual property rights or challenges to these rights by third parties may affect our operations and financial performance
16. 16We are dependent on the availability of raw materials, as well as parts and components used in our products
17. 17The markets we serve are highly competitive. If we are unable to respond successfully to this competition, this could reduce our sales and operating margins
18. 18Some of our competitors may also have greater financial, marketing and research and development resources than we have or stronger name recognition. As a result, those competitors may be better able to withstand the effects of periodic economic downturns or other disruptions or challenges
19. 19Changes in our tax rates or exposure to additional income tax liabilities could adversely affect our financial results41% rewritten
20. 20Our business subjects us to the possibility of product liability lawsuits, which could harm our business
21. 21Our defined benefit pension plans and post-retirement medical and death benefit plans are or may become subject to funding requirements or obligations that could adversely affect our business, financial condition and results of operations29% rewritten
22. 22Our hedging activity could negatively impact our results of operations, cash flows, or leverage
23. 23The loss of key leadership could have a material adverse effect on our ability to run our business
24. 24Failure to successfully integrate new technologies, including artificial intelligence and machine learning, could limit our ability to grow and maintain our competitive position and adversely affect our financial condition, results of operations and cash flowNew

Risks Related to Litigation and Regulatory Compliance

1. 25We have done and may continue to do business in countries subject to United States sanctions. Failure to comply with various sanction laws may result in enforcement or other regulatory actions
2. 26If we fail to comply with export control regulations, we could be subject to substantial fines or other sanctions, which could have a material adverse effect on our business, financial condition and results of operations
3. 27We are subject to a variety of continuously evolving and developing laws and regulations regarding privacy, data protection and data security
4. 28We are subject to a variety of increasingly stringent environmental and health and safety laws for which compliance, or related liabilities, could be costly
5. 29We are exposed to certain regulatory and financial risks related to climate change, which could adversely affect our business, financial condition, results of operations and cash flows33% rewritten
6. 30Our businesses are subject to extensive regulation; failure to comply with those regulations could adversely affect our reputation and our business, financial condition and results of operations

Risks Related to Shares of Our Common Stock

1. 31As a public company, we are required to maintain internal controls over financial reporting and to report any material weaknesses in such internal controls
2. 32Our stock price may fluctuate significantly, including from future sales of our common stock or the perception that such sales or resales may occur
3. 33We cannot guarantee the payment of dividends on our common stock, or the timing or amount of any such dividends31% rewritten
4. 34Issuance of our equity securities may significantly dilute our existing stockholders
5. 35Certain provisions in our certificate of incorporation and amended and restated bylaws (our “bylaws”), and of Delaware law, may prevent or delay an acquisition of us, which could decrease the trading price of our common stock31% rewritten
6. 36Our certificate of incorporation designates the exclusive forum for the resolution of certain types of actions and proceedings that may be initiated by our stockholders. These forum selection provisions could discourage lawsuits against us and our directors, officers, employees and stockholders