Jeld-Wen Holding (JELD) risk factors, FY2024 10-K

Risks Relating to Our Business and Industry

1. 01Negative trends in overall business, financial market and economic conditions, and activity levels in our end markets may reduce demand for our products, which could have a material adverse effect on our business, financial condition, and results of operations
2. 02Our business depends on our relationships with our key customers, which consist mainly of wholesale distributors and retail home centers
3. 03We operate in a highly competitive business environment. Failure to compete effectively and any decrease in demand for our products could have a material adverse effect on our business, financial condition, and results of operations
4. 04Failure to implement our strategic cost reduction and productivity initiatives could adversely impact our business, financial condition, and results of operations
5. 05Our business will suffer if we are unable to retain and recruit executives, managers and employees at a competitive cost
6. 06A disruption in our operations due to natural disasters, changes in weather patterns and related extreme weather events, public health crises, unstable geopolitical conditions or armed conflicts could have a material adverse effect on our business, financial condition, and results of operations
7. 07We may not identify or effectively respond to consumer needs, expectations, or trends in a timely fashion, which could adversely affect our relationship with customers, our reputation, the demand for our brands, products, and services, and our market share
8. 08Manufacturing realignments and cost savings programs may result in a decrease in our short-term earnings and operating efficiency or expected benefits may not be achieved
9. 09Our business is seasonal, and revenue and profit can vary significantly throughout the year, which may adversely impact the timing of our cash flows and limit our liquidity at certain times of the year
10. 10Prices and availability of raw materials, freight, energy and other critical inputs we use to manufacture our products are subject to fluctuations due to inflation and other factors, and we may be unable to pass along to our customers the effects of any price increases
11. 11Our business may be affected by delays or interruptions in the delivery of raw materials, finished goods, and certain component parts. A supply shortage or delivery chain interruption could have a material adverse effect on our business, financial condition, and results of operations
12. 12We have experienced impacts to our supply chain from economic and geopolitical uncertainties, including the ongoing military conflict between Russia and Ukraine, which have resulted in delays in receiving materials, manufacturing downtime, increased backlogs, and delayed out-bound freight
13. 13We are exposed to political, economic, and other risks that arise from operating a multinational business
14. 14Certain of our customers may expand through consolidation and internal growth, which may increase their buying power. The increased size of our customers could have a material adverse effect on our business, financial condition, and results of operations
15. 15We are subject to the credit risk of our customers, suppliers, and other counterparties
16. 16Exchange rate fluctuations may impact our business, financial condition, and results of operations
17. 17In addition, our products, and our customers’ products, are subject to import and excise duties and/or sales or value-added taxes in many jurisdictions in which we operate. Increases in these indirect taxes could affect the affordability of our products and our customers’ products, and, therefore, reduce demand
18. 18Due to widely varying tax rates in the taxing jurisdictions applicable to our business, a change in income generation to higher taxing jurisdictions or away from lower taxing jurisdictions may also have an adverse effect on our financial condition and results of operations
19. 19We may make acquisitions, divestitures, or investments in other businesses, which may involve risks or may not be successful
20. 20We may be unable to protect our intellectual property, and we may face claims of intellectual property infringement
21. 21Increases in labor costs, potential labor disputes, and work stoppages at our facilities or the facilities of our suppliers could have a material adverse effect on our business, financial condition, and results of operations
22. 22Our pension plan obligations are currently not fully funded, and we may have to make significant cash payments to these plans, which would reduce the cash available for our businesses

Risks Relating to Cybersecurity and Data Privacy

1. 23We are highly dependent on information technology, the disruption of which could significantly impede our ability to do business
2. 24Our systems and IT infrastructure have been and may continue to be subject to security breaches and other cybersecurity incidents

Risks Relating to our Governmental and Regulatory Environment

1. 25Changes in building codes and standards, including ENERGY STAR standards, could increase the cost of our products, lower the demand for our windows and doors, or otherwise adversely affect our business
2. 26Domestic and foreign regulations, legislation and government policy, including those applicable to general business operations, could increase the costs of operating our business and adversely affect our business
3. 27We may be subject to significant compliance costs, as well as liabilities under environmental, health, and safety laws and regulations
4. 28Legal, regulatory or stakeholder preferences regarding climate change and ESG matters could have an adverse impact on the Company’s business and results of operations
5. 29Changes to legislative and regulatory policies that currently promote home ownership may have a material adverse effect on our business, financial condition, and results of operations
6. 30Lack of transparency, threat of fraud, public sector corruption, and other forms of criminal activity involving government officials increases the risk of potential liability under anti-bribery/anti-corruption or anti-fraud legislation, including the FCPA, the U.K. Bribery Act, and similar laws and regulations

Risks Relating to our Indebtedness

1. 31Refer to Note 12 - Long-Term Debt to our consolidated financial statements included in this Form 10-K for more information regarding our indebtedness
2. 32The credit agreements governing our Credit Facilities and the indentures governing the Senior Notes impose significant operating and financial restrictions on us that may prevent us from capitalizing on business opportunities
3. 33We require a significant amount of liquidity to fund our operations, and borrowing may increase our vulnerability to negative unforeseen events

Risks Relating to Ownership of Our Common Stock

1. 34The market price of our Common Stock may be highly volatile
2. 35We may be subject to securities litigation, which is expensive and could divert management attention
3. 36Because we have no current plans to pay cash dividends on our shares of Common Stock, shareholders must rely on appreciation of the value of our Common Stock for any return on their investment
4. 37Because we are a holding company with no operations of our own, we rely on dividends, distributions, and transfers of funds from our subsidiaries, and we could be harmed if such distributions were not made in the future