What the changes say
- Helvoet acquisition adds integration, retention, execution, and impairment exposure, with expected goodwill and intangible assets in fiscal 2027.
- Customer concentration is quantified: the top three customers represent 40% of fiscal 2026 sales; Nexteer alone represents 18%.
- New risks emphasize artificial intelligence, tariffs, organic growth execution, receivables financing, sustainability commitments, and U.S. policy shifts.
- Currency, covenant, and international-operating disclosures now include fiscal 2026 effects and more specific exposures.
What changed since the prior 10-K
New
- NewBusiness and Operational Risks
Concentration among a small number of key customers, and our customers ’ ordering behavior, could materially reduce our revenues, profitability, and manufacturing efficiency
Nexteer, Philips, and ZF generated 40% of fiscal 2026 sales, while automotive program losses, cancellations, outsourcing, or competitor shifts could reduce demand.
- NewBusiness and Operational Risks
We may not realize the anticipated benefits of the Helvoet acquisition or other future acquisitions
Helvoet integration could fail or be delayed because of cross-border operations, differing regulations, control remediation, management distraction, or lost personnel and customers.
- NewBusiness and Operational Risks
These risks could have an adverse effect on our financial position, results of operations, or cash flows. Certain foreign jurisdictions restrict the amount of cash that can be transferred to the United States or impose taxes and penalties on such transfers of cash if we seek to repatriate these funds
Tariffs and changing trade policies could disrupt the China-linked supply chain and increase raw-material and component costs.
- NewBusiness and Operational Risks
We may not achieve the organic growth on which our strategy depends
Growth depends on winning and launching programs, expanding services and facilities, and filling capacity without excessive startup costs or delays.
- NewBusiness and Operational Risks
Our development, deployment, and use of artificial intelligence technologies could expose us to operational, legal, reputational, and competitive risks
AI tools create risks from unreliable outputs, intellectual-property disputes, confidential-data exposure, cyberattacks, and competitors using AI more effectively.
- NewRegulatory and Litigation Risks
Failure to satisfy applicable customer, industry, and regulatory quality standards could adversely affect our customer relationships, results of operations, and reputation
Failure to meet customer, industry, or regulatory quality standards could cause defects, recalls, production interruptions, penalties, lost approvals, and inadequate-insurance losses.
- NewRegulatory and Litigation Risks
Climate change, evolving sustainability regulation, and stakeholder expectations regarding environmental, social, and governance matters could increase our costs, impose new compliance obligations, and expose us to enforcement, litigation, and reputational risk
Missing emissions, waste, renewable-electricity, or recycled-water commitments could damage relationships, increase compliance costs, and trigger enforcement or litigation.
- NewRegulatory and Litigation Risks
Shifts in U.S. political, tax, trade, and regulatory policy could adversely affect our business and results of operations
Rapid U.S. changes in tariffs, immigration, regulation, enforcement, and tax rules could increase uncertainty, taxes, and cross-border operating costs.
- NewFinancial Risks
Our reliance on customer supply-chain financing and receivables purchase agreements exposes us to program-availability and counterparty risks
Dependence on customer financing programs and bank receivables purchases exposes cash flow to cancellations, repricing, non-renewal, and bank concentration.
- NewFinancial Risks
Facility catastrophes, pandemics, and other business-interruption events may impact our production schedules and profitability
Disasters, pandemics, power outages, fires, severe weather, or energy disruptions could halt manufacturing, reduce deliveries, and leave insurance insufficient.
Dropped
- DroppedBusiness and Operational Risks
Reduction of purchases by, or the loss of, one or more key customers could reduce revenues and profitability
General risk of losing key customers or experiencing purchase reductions.
- DroppedBusiness and Operational Risks
Our ability to efficiently utilize our manufacturing capacity is highly dependent on our customers’ actions
Customers’ short production commitments and cancellations could leave manufacturing capacity underutilized.
- DroppedBusiness and Operational Risks
If our engineering and manufacturing services do not meet our customers’ quality standards, our sales, operating results, and reputation could suffer
- DroppedRegulatory and Litigation Risks
Our failure to maintain applicable registrations for our manufacturing facilities could negatively impact our ability to produce products for our customers
- DroppedRegulatory and Litigation Risks
Climate change, and the legal and regulatory initiatives related to climate change, could subject us to extensive environmental regulation and significant potential environmental liabilities
- DroppedRegulatory and Litigation Risks
Sustainability/ESG issues, including those related to climate change and sustainability, may increase our costs and impose difficult and expensive compliance requirements
- DroppedFinancial Risks
We will face risks associated with the organic and inorganic growth of our business and we may neither be able to continue that growth nor have the necessary resources to dedicate to that growth
Failure of engineering and manufacturing services to meet customer quality standards.
- DroppedFinancial Risks
Changes in financial accounting standards or policies have affected, and in the future may affect, our reported financial condition or results of operations
- DroppedFinancial Risks
Litigation or legal proceedings could expose us to significant liabilities and have a negative impact on our reputation
- DroppedFinancial Risks
Natural disasters, pandemics, or other catastrophic events may impact our production schedules and, in turn, negatively impact profitability
Reworded
- 100% rewrittenBusiness and Operational Risks
We depend on attracting and retaining executive officers, key employees, skilled personnel, and sufficient labor to efficiently operate our business
The focus shifts from retaining executives and general skilled labor to recruiting technical, engineering, data, cybersecurity, AI, automation, and regulatory specialists.
- 80% rewrittenBusiness and Operational Risks
Our international operations make us vulnerable to financial and operational risks associated with doing business in foreign countries
The international-risk discussion no longer expressly mentions widespread health emergencies and government responses, while retaining geopolitical, currency, and compliance risks.
- 61% rewrittenFinancial Risks
We are exposed to foreign currency risk
Fiscal 2026 dollar depreciation against the euro, zloty, and leu benefited sales by 2%; shifting U.S. policy is added as a volatility driver.
- 59% rewrittenFinancial Risks
We could incur losses due to asset impairment
The risk now specifically links potential impairment charges to Helvoet goodwill, intangible assets, integration, customer relationships, and projected cash flows.
- 53% rewrittenBusiness and Operational Risks
Our business may be harmed due to failure to successfully implement information technology solutions or a lack of reasonable safeguards to maintain data security, including adherence to evolving global data privacy laws, cross-border data transfer, AI-specific regulations, and physical security measures
AI is separated into its own risk, while this technology-systems risk now focuses on cybersecurity, data loss, and operational disruption.
Was: Our business may be harmed due to failure to successfully implement information technology solutions or a lack of reasonable safeguards to maintain data security, including adherence to data privacy laws and physical security measures
- 34% rewrittenRegulatory and Litigation Risks
Compliance with government legislation and regulations may significantly increase our operating costs in the United States and abroad
The example narrows from broad duties, tariffs, taxes, and fund-transfer restrictions to conflict-minerals sourcing, supply, and pricing.
- 33% rewrittenFinancial Risks
A failure to comply with the financial covenants under our credit facilities could adversely impact us
Covenant terms now use a $25 million unrestricted-cash threshold; borrowings fell to $116.6 million, and default consequences are specified.
- 24% rewrittenFinancial Risks
We are exposed to inflation, interest rate, and other banking and capital market risks
The inflation, interest-rate, benchmark-rate, and borrowing-cost discussion is substantively unchanged.
All 26 risk factors
Headings as the filing states them, in filing order.
Business and Operational Risks
- 01Concentration among a small number of key customers, and our customers ’ ordering behavior, could materially reduce our revenues, profitability, and manufacturing efficiencyNew
- 02Supply chain disruptions could increase our inventory costs, interrupt our operations, or prevent us from purchasing sufficient materials, parts, and components necessary to meet customer demand at competitive prices, in a timely manner, or at all
- 03The substantial investments required to start up and expand facilities and new customer programs may adversely affect our margins and profitability
- 04We may not realize the anticipated benefits of the Helvoet acquisition or other future acquisitionsNew
- 05Our international operations make us vulnerable to financial and operational risks associated with doing business in foreign countries80% rewritten
- 06These risks could have an adverse effect on our financial position, results of operations, or cash flows. Certain foreign jurisdictions restrict the amount of cash that can be transferred to the United States or impose taxes and penalties on such transfers of cash if we seek to repatriate these fundsNew
- 07We operate in a highly competitive industry and may not be able to compete successfully
- 08We may not achieve the organic growth on which our strategy dependsNew
- 09Our business may be harmed due to failure to successfully implement information technology solutions or a lack of reasonable safeguards to maintain data security, including adherence to evolving global data privacy laws, cross-border data transfer, AI-specific regulations, and physical security measures53% rewritten
- 10Our development, deployment, and use of artificial intelligence technologies could expose us to operational, legal, reputational, and competitive risksNew
- 11We depend on attracting and retaining executive officers, key employees, skilled personnel, and sufficient labor to efficiently operate our business100% rewritten
Regulatory and Litigation Risks
- 12Failure to protect our intellectual property could undermine our competitive position
- 13Anti-takeover provisions in our organizational documents and Indiana law could delay or prevent a change in control
- 14Failure to satisfy applicable customer, industry, and regulatory quality standards could adversely affect our customer relationships, results of operations, and reputationNew
- 15Climate change, evolving sustainability regulation, and stakeholder expectations regarding environmental, social, and governance matters could increase our costs, impose new compliance obligations, and expose us to enforcement, litigation, and reputational riskNew
- 16Compliance with government legislation and regulations may significantly increase our operating costs in the United States and abroad34% rewritten
- 17Shifts in U.S. political, tax, trade, and regulatory policy could adversely affect our business and results of operationsNew
Financial Risks
- 18We are exposed to the credit risk of our customers
- 19Failure to effectively manage working capital may adversely affect our cash flow from operations
- 20We could incur losses due to asset impairment59% rewritten
- 21Fluctuations in our effective tax rate could have a significant impact on our financial position, results of operations, or cash flows
- 22We are exposed to foreign currency risk61% rewritten
- 23A failure to comply with the financial covenants under our credit facilities could adversely impact us33% rewritten
- 24We are exposed to inflation, interest rate, and other banking and capital market risks24% rewritten
- 25Our reliance on customer supply-chain financing and receivables purchase agreements exposes us to program-availability and counterparty risksNew
- 26Facility catastrophes, pandemics, and other business-interruption events may impact our production schedules and profitabilityNew
Other Kimball Electronics 10-Ks
- FY2025 10-K risk factors26 risks
Kimball Electronics relies on international manufacturing, key customer relationships, and component availability for its contract manufacturing business.
Filed Aug 22, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.