Ingram Micro Holding (INGM) risk factors, FY2024 10-K

Other

1. 01We have invested, and will continue to invest, significant resources in the development and deployment of Ingram Micro Xvantage, and if Ingram Micro Xvantage is not successful, our business, results of operations, financial condition, and cash flows could be adversely impacted
2. 02Our acquisition and investment strategies may not produce the expected benefits, which may adversely affect our results of operations
3. 03We have been, and may continue to be, affected by the COVID-19 pandemic or other public health issues, and such effects could have an adverse effect on our business operations, results of operations, cash flows and financial condition
4. 04Failure to retain and recruit key personnel would harm our ability to meet key objectives
5. 05Increases in wage and benefit costs, collective bargaining agreements, changes in laws and other labor regulations, or labor disruptions could impact our financial condition and cash flows
6. 06We are also required to comply with laws and regulations in the countries in which we have associates that may differ substantially from country to country, requiring significant management attention and cost
7. 07Our failure to adequately adapt to industry changes could negatively impact our future operating results
8. 08We continually experience intense competition across all markets for our products and services
9. 09Our 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
10. 10A decline in general economic conditions or global equity valuations could impact our judgments and assumptions about the fair value of our businesses and we could be required to record impairment charges on our goodwill or other identifiable intangible assets in the future
11. 11Changes in our credit rating or other market factors, such as adverse capital and credit market conditions or reductions in cash flow from operations, may affect our ability to meet liquidity needs, reduce access to capital, and/or increase our costs of borrowing
12. 12We cannot predict the outcome of litigation matters and other contingencies with which we may be involved from time to time

Risks Related to the Macroeconomic and Regulatory Environment

1. 13We operate a global business that exposes us to risks associated with conducting business in multiple jurisdictions
2. 14Our businesses operate in various international markets, including certain emerging markets that are subject to greater political, economic, and social uncertainties than developed countries
3. 15Changes in macroeconomic and geopolitical conditions can affect our business and results of operations
4. 16Tariffs may result in increased prices and could adversely affect our business, results of operations, financial conditions, and cash flows
5. 17U.S.-China tensions around technology, national security, and human rights could adversely affect our business
6. 18To a lesser extent, we also distribute products in the United States made by Chinese vendors. Risks associated with doing business with these Chinese vendors, in particular actual or perceived cybersecurity risks of their products, could also adversely affect our business
7. 19Increasing attention (both positive and negative) on environmental, social, and governance (“ESG”) matters may impact our business, subject us to unforeseen liability or cause harm to our reputation
8. 20Our failure to comply with the requirements of environmental, health and safety regulations, or other laws and regulations applicable to a distributor of consumer products could adversely affect our business
9. 21Changes in accounting rules could adversely affect our reported operating results
10. 22Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results of operations and financial condition

Risks Related to Our Indebtedness

1. 23We are also party to certain additional lines of credit, short-term overdraft facilities, and other credit facilities with approximately $182.7 million outstanding under these facilities as of December 28, 2024. See Note 6, “Debt” to our audited consolidated financial statements
2. 24We may not be able to generate sufficient cash flows from operations 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
3. 25Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly

Risks Related to Our Reliance on Third Parties

1. 26We face a variety of risks in our reliance on third-party service companies, including shipping companies and a cloud service provider, for the delivery of our products and outsourcing arrangements
2. 27We or our vendors, suppliers, or customers may experience damage to or disruptions at our respective facilities caused by natural disasters and other factors, such as climate change, which may result in our business, financial condition, and results of operations being adversely affected
3. 28Termination of a key supply or services agreement or a significant change in vendor terms or conditions of sale could negatively affect our operating margins, revenue, or the level of capital required to fund our operations
4. 29Our business may be adversely affected by some vendors’ strategies to consolidate business or increase their direct sales, which in turn could cause our business and operating results to suffer
5. 30Credit risks from customers, including substantial defaults or loss of significant customers, could negatively impact our business, results of operations, financial condition, or liquidity

Risks Related to Information Technology, Data Privacy, and Intellectual Property

1. 31Our dependence on a variety of information systems to operate our business could, if such systems are not properly functioning, maintained, and available, result in disruptions to our business and harm our reputation and net sales
2. 32We can make no assurances that the combined systems strategy will be successful or that we will not have additional disruptions, delays, and/or negative business impacts from future deployments
3. 33We may not be able to prevent or timely detect breaches of, or attacks on, our information technology systems
4. 34Cyberattacks, including by state-sponsored actors, continue to become more sophisticated and persistent, and any such attacks which result in a security breach and/or personal data breach may adversely impact our business, or result in regulatory investigation, litigation, or other liability
5. 35Changes in the regulatory environment regarding privacy and data protection regulations could have a material adverse effect on our results of operations
6. 36We may become involved in intellectual property disputes that could cause us to incur substantial costs, divert the efforts of management, or require us to pay substantial damages or licensing fees

Risks Related to Our Relationship with Platinum and Being a “Controlled Company”

1. 37Platinum controls us, and its interests may conflict with ours or other stockholders’ in the future
2. 38We are a “controlled company” within the meaning of the NYSE rules and, as a result, we qualify for, and rely on, exemptions from certain corporate governance requirements. Our stockholders do not have the same protections afforded to stockholders of other companies that are subject to such requirements
3. 39Anti-takeover provisions in our organizational documents could delay or prevent a change of control

Risks Related to Ownership of Our Common Stock

1. 40Additionally, as described in the risk factor directly below, we have identified material weaknesses in our internal control over financial reporting. As we have become subject to Section 404, we may identify additional material weaknesses
2. 41Our stock price may change significantly, and stockholders may not be able to resell shares of our Common Stock at or above the price paid or at all and could lose all or part of their investment as a result
3. 42We may change our dividend policy at any time, and, in the event we determine not to pay any cash dividends on our Common Stock in the future, stockholders may not receive any return on investment unless they sell their Common Stock for a price greater than that which they paid for it
4. 43If securities or industry analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our stock price and trading volume could decline
5. 44If we or Platinum sell shares of our Common Stock or are perceived by the public markets as intending to sell them, the market price of our Common Stock could decline
6. 45Our board of directors is authorized to issue and designate shares of our preferred stock in additional series without stockholder approval
7. 46Our amended and restated certificate of incorporation and amended and restated bylaws provides that we will indemnify our directors and officers, in each case to the fullest extent permitted by the Delaware General Corporation Law (the “DGCL”)
8. 47Our amended and restated certificate of incorporation contains exclusive forum provisions for certain stockholder litigation matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, associates, or stockholders