FLEX (FLEX) risk factors, FY2025 10-K

Other

1. 01changes in demand have in the past caused, and may in the future cause, supply chain and other issues which could adversely affect our operating results
2. 02A significant percentage of our sales come from a small number of customers and a decline in sales to any of our largest customers has in the past adversely affected, and may in the future adversely affect, our business
3. 03Supply chain disruptions, logistical constraints, manufacturing interruptions or delays, or the failure to accurately forecast customer demand, have in the past affected, and may in the future affect, our ability to meet customer demand, lead to higher costs, or result in excess or obsolete inventory
4. 04Our business has in the past been, and may in the future be, adversely affected by delays and increased costs resulting from issues that our common carriers deal with in transporting our materials, our products, or both
5. 05As part of our strategy to enhance our end-to-end service offerings, we continue to expand our design and engineering capabilities. Providing these services can expose us to different or greater potential risks than those we face when providing our manufacturing services
6. 06If we do not effectively manage changes in our operations, our business may be harmed; we have taken substantial restructuring charges in the past and we may need to take material restructuring charges in the future
7. 07A breach of our IT or physical security systems, or violation of data privacy laws, may cause us to incur significant legal and financial exposure and adversely affect our operations
8. 08We may encounter difficulties with acquisitions and divestitures, which could harm our business
9. 09We depend on our executive officers and other key employees and skilled personnel
10. 10There are risks associated with the separation of Nextracker, which could negatively impact our business, financial condition and results of operations
11. 11If the Nextracker spin-off fails to qualify for tax-free treatment, we, our subsidiaries and our former shareholders could incur significant tax liabilities
12. 12Our operating results may fluctuate significantly due to seasonal demand
13. 13Union disputes or other labor disruptions could adversely affect our operations and financial results
14. 14Unforeseen or catastrophic events could have a material adverse effect on our operations and financial results

Industry Risks

1. 15We depend on industries that continually produce technologically advanced products with short product lifecycles and our business would be adversely affected if our customers' products are not successful or if our customers lose market share
2. 16Our industry is extremely competitive; if we are not able to continue to provide competitive products and services, we may lose business. In addition, our customers may decide to manufacture their products internally, which could harm our business
3. 17Our strategic relationships with major customers create risks

Financial Risks

1. 18We are subject to the risk of increased income taxes
2. 19Changes in our credit rating may make it more expensive for us to raise additional capital or to borrow additional funds. We are also exposed to interest rate fluctuations on our borrowings and investments
3. 20Challenges in managing working capital could significantly impact our cash flow, profit margins, and overall business performance
4. 21Our debt level may create limitations
5. 22The market price of our ordinary shares is volatile
6. 23Our exposure to financially troubled customers or suppliers has in the past adversely affected, and may in the future adversely affect, our financial results
7. 24We are subject to risks associated with investments
8. 25Our goodwill and identifiable intangible assets could become impaired, which could reduce the value of our assets and reduce our net income in the year in which the write-off occurs
9. 26Changes in financial accounting standards or policies have affected, and in the future may affect, our reported financial condition or results of operations

International Risks

1. 27the effective date and duration of such tariffs, countries included in the scope of tariffs, changes to amounts of tariffs, and potential retaliatory tariffs imposed by other countries
2. 28We conduct operations in a number of countries and are subject to the risks inherent in international operations
3. 29Facilities in several different locations may be involved at different stages of the production process of a single product, leading to additional logistical difficulties
4. 30Fluctuations in foreign currency exchange rates could increase our operating costs

Legal and Regulatory Risks

1. 31We are subject to risks relating to litigation and regulatory investigations and proceedings, which may have a material adverse effect on our business
2. 32Exports and imports of certain of our products are subject to various export control, sanctions, and import regulations and may require authorization from regulatory agencies of the U.S. or other countries
3. 33The success of certain of our activities depends on our ability to protect our intellectual property rights; claims of infringement or misuse of intellectual property and/or breach of license agreement provisions against our customers or us could harm our business
4. 34If our compliance policies are breached, we may incur significant legal and financial exposure
5. 35If our products or components contain defects, demand for our services may decline, our reputation may be damaged, and we may be exposed to product liability and product warranty liability
6. 36The failure of the products that we manufacture or of our manufacturing processes or facilities may subject us to regulatory enforcement, fines or penalties and, in some cases, require us to shut down, temporarily halt operations or incur considerable expense to correct a manufacturing process or facility
7. 37We may not meet regulatory quality standards applicable to our manufacturing and quality processes for medical devices, which could have an adverse effect on our business, financial condition or results of operations
8. 38Failure to comply with domestic or international employment and related laws could result in the payment of significant damages, which would reduce our net income
9. 39Failure to meet sustainability, including environmental, social and governance expectations or standards, or to achieve our sustainability goals, may have an adverse impact on our business, impose additional costs on us, and expose us to additional risks
10. 40Climate change, and the legal and regulatory initiatives related to climate change, could adversely affect our business, results of operations and financial condition
11. 41Our failure to comply with environmental, health and safety, product stewardship and producer responsibility laws or regulations could adversely affect our business
12. 42Our business could be impacted as a result of actions by activist shareholders or others