MGP Ingredients (MGPI) risk factors, FY2024 10-K

Other

1. 01Changes in consumer preferences and purchases, and our ability to anticipate or react to them, could negatively affect our business results
2. 02The markets for our products are very competitive, and our business could be negatively affected if we do not compete effectively. We may also be negatively impacted by industry dynamics and market conditions
3. 03Damage to our reputation, or that of any of our key customers or their brands, could affect our business performance
4. 04A failure to introduce successful new brands and products or have effective marketing or advertising could adversely affect our results of operations
5. 05We could also be adversely affected if we are not successful in developing new brands or products as a result of new brand or product introductions by our competitors. Some of our competitors may have greater financial and other resources than we do, making them better positioned to pursue new investment opportunities
6. 06A change in public opinion about alcohol or our products could reduce demand for our brands and products
7. 07Failure of our distributors to distribute our branded spirits adequately within their territories could adversely affect our business
8. 08Our focus on higher margin specialty ingredients may make us more reliant on fewer, more profitable customer relationships

OPERATIONAL RISKS

1. 09An interruption of operations or a catastrophic event at our facilities could negatively affect our business
2. 10Our strategic plan involves significant investment in the aging of barreled distillate. Decisions concerning the quantity of maturing stock of our aged distillate could materially affect our future profitability
3. 11The inability to successfully complete our capital projects or fund necessary capital expenditures could adversely impact us. Warehouse expansion issues could negatively impact our operations and our business
4. 12We have a high concentration of certain raw material and finished goods purchases from a limited number of suppliers, which exposes us to risk
5. 13Work disruptions or stoppages by our unionized workforce could cause interruptions in our operations
6. 14Climate change, or legal, regulatory, or market measures to address climate change, may negatively affect our business or operations, and water scarcity or quality could negatively impact our production costs and capacity

LEGAL, REGULATORY, AND COMPLIANCE RISKS

1. 15We are subject to extensive regulation and taxation, as well as compliance with existing or future laws and regulations, which may require us to incur substantial expenditures
2. 16Tariffs imposed by the U.S. and other countries, as well as rapidly changing trade relations, could negatively impact our customers and have a material adverse effect on our business and results of operations
3. 17Changes in excise taxes, incentives, and customs duties related to products containing alcohol could adversely affect our business
4. 18We may not be able to adequately protect our intellectual property rights or may be accused of infringing intellectual property rights of third parties
5. 19Failure of our branded spirits to secure and maintain listings in control states could adversely affect our business
6. 20Significant additional labeling or warning requirements or limitations on the availability of our products could inhibit sales of affected products
7. 21Product recalls or other product liability claims could materially and negatively affect our business
8. 22Failure to comply with anti-corruption laws, trade sanctions, and restrictions, or similar laws or regulations may have a material adverse effect on our business and financial results
9. 23We are, and from time to time may become, subject to litigation, and adverse outcomes in such litigation could have a material adverse effect on our business

RISKS RELATED TO OUR CAPITAL STRUCTURE

1. 24Common Stockholders have limited rights under our Articles of Incorporation

GENERAL RISKS

1. 25Higher costs or unavailability of raw materials, product ingredients, energy resources, or labor could adversely affect our financial results
2. 26Our ability to make and sell our products depends upon the availability of raw materials and energy resources. Prices and supply of all products are subject to market forces, such as inflation, weather, changes in domestic and global demand and supply, and global political or economic issues
3. 27A failure of one or more of our key information technology (“IT”) systems, networks, processes, associated sites, or service providers could have a negative impact on our business
4. 28Our business may suffer from risks related to acquisitions and potential future acquisitions
5. 29An increase in interest rates would increase the cost of servicing our debt and could reduce our profitability
6. 30If we were to lose any of our key personnel, we may not be able to fully implement our strategic plan, and our system of internal controls could be impacted
7. 31Our global business is subject to commercial, political, and financial risks
8. 32Covenants and other provisions in our credit arrangements could hinder our ability to operate. Our failure to comply with covenants in our credit arrangements could result in the acceleration of the debt extended under such agreements, limit our liquidity, and trigger other rights of our lenders
9. 33Pandemics or other health crises could disrupt or otherwise negatively impact our operations, including the demand for our products and our ability to produce and deliver our products
10. 34Cash dividends and share repurchases are subject to uncertainties which could affect the price of our Common Stock