Graco (GGG) risk factors, FY2025 10-K

Other

1. 01Economic Environment – Demand for our products depends on the level of commercial and industrial activity worldwide
2. 02Currency – Changes in currency translation rates could adversely impact our revenue, earnings and the valuation of assets denominated in foreign currencies
3. 03Political Instability – Uncertainty surrounding political leadership, as well as geopolitical unrest, could cause economic conditions in the U.S. or abroad to deteriorate, which could limit our growth opportunities and otherwise harm our business

Operational Risks

1. 04Global Sourcing – Risks associated with foreign sourcing, supply interruption, delays in raw material or component delivery, supply shortages and counterfeit components may adversely affect our production or profitability
2. 05Information Systems – Interruption of or intrusion into information systems may impact our business
3. 06Intellectual Property – Demand for our products may be affected by new entrants who copy our products or infringe on our intellectual property. Competitors may allege that our products infringe the intellectual property of others
4. 07Generative Artificial Intelligence ("AI") – Use of generative AI technologies in the conduct of our business could result in the unintentional loss of confidential or proprietary information and have other adverse impacts on us46% rewritten
5. 08Foreign Operations – Conducting business internationally exposes our Company to risks that could harm our business
6. 09Catastrophic Events – Our operations are at risk of damage, destruction or disruption by natural disasters and other unexpected events
7. 10Personnel – Our success may be affected if we are not able to attract, develop and retain qualified personnel
8. 11Public health – Crises, such as an epidemic or pandemic, could have a material and adverse effect on our business, results of operations and financial condition

Strategic Risks

1. 12Growth Strategies and Acquisitions – Our growth strategies may not provide the return on investment desired if we are not successful in implementation of these strategies
2. 13Impairment – If acquired businesses do not meet performance expectations, acquired assets could be subject to impairment
3. 14Competition – Our success depends upon our ability to develop or acquire, and market and sell, new products that meet our customers’ evolving needs and desires, and anticipate industry and market changes
4. 15Major Customers – Our Contractor segment depends on a few large customers for a significant portion of its sales. Significant declines in the level of purchases by these customers could reduce our sales and impact segment profitability
5. 16Cyclical Industries – Our success may be affected by variations in the construction, automotive, electronics, aerospace, semiconductor, and agriculture and construction equipment industries

Legal, Regulatory and Compliance Risks

1. 17Laws and Regulations – Changes in laws and regulations, and the imposition of new or additional laws and regulations, may impact how we can do business and the cost of doing business around the world
2. 18Climate-Related Laws, Regulations and Accords – Climate-related laws, regulations and accords may adversely impact our operations, the industries in which we operate, and increase our cost of doing business
3. 19ESG Expectations and Requirements – Expectations and requirements relating to environmental, social and governance ("ESG") matters may increase our cost of doing business and expose us to reputational harm and potential liability
4. 20Anti-Corruption and Trade Laws – We may incur costs and suffer damages if our employees, agents, distributors or suppliers violate anti-bribery, anti-corruption or trade laws and regulations
5. 21Tax Rates and New Tax Legislation – Changes in tax rates or the adoption of new tax legislation may affect our results of operations, cash flows and financial condition
6. 22Tariff and Trade Policies – Changes and uncertainty in U.S. trade policies, including tariffs, trade agreements and other regulations, as well as in those of other countries, may affect our operating results, cash flows and financial conditionNew
7. 23Legal Proceedings – Costs associated with claims, litigation, administrative proceedings and regulatory reviews, and potentially adverse outcomes, may affect our profitability