Novanta (NOVT) risk factors, FY2024 10-K

Risks Relating to Our Business

1. 01Our results of operations could be adversely affected by economic and political conditions and the effects of these conditions on our customers’ businesses, capital expenditures and levels of business activities
2. 02Our business success depends upon our ability to respond to fluctuations in product demand, but doing so may require us to incur costs despite limited visibility into future business declines
3. 03The success of our business depends on our ability to continuously innovate, to introduce new products in a timely manner, and to manage transitions to new product innovations effectively
4. 04Customer order timing and other factors may cause our operating results to fluctuate from period to period
5. 05Delays in shipments near the end of a reporting period due to rescheduling by customers or unexpected production delays experienced by us may cause revenue in the period to decline significantly and may have a material adverse effect on our operating results for that period
6. 06Our business may be adversely affected by cyberattacks or other incidents that cause significant disruption in, or breach the security of, our information technology systems or those of our third-party providers
7. 07Our reliance on international operations subjects us to risks not typically faced by companies operating exclusively in the U.S
8. 08natural disasters, health epidemics and acts of terrorism
9. 09Increased component outsourcing to manufacturers located in different countries than our manufacturing facilities leads to additional risks that could negatively impact our business
10. 10Increases in tariffs, trade restrictions or taxes on our products could have an adverse impact on our results of operations
11. 11Others may violate our intellectual property rights and cause us to incur significant costs to protect our rights
12. 12Our operating results would suffer if we are unable to successfully defend against infringement claims by third parties
13. 13We operate in highly competitive industries and, if we lose competitive advantages, our business would suffer adverse consequences
14. 14Our results of operations will be adversely affected if we fail to identify suitable acquisition candidates, complete acquisitions, successfully integrate recent and future acquisitions or grow the acquired businesses as planned
15. 15If we do not attract and retain our key personnel, our ability to execute our business strategy will be limited
16. 16We have undertaken restructuring and realignment activities in the past, and we will continue to assess our operating and cost structure in the future. These actions may not improve our financial position, and may ultimately prove detrimental to our operations and sales
17. 17Product defects or problems with integrating our products with other vendors’ products used by our customers may seriously harm our business and reputation
18. 18Disruptions in the supply of certain key components and other goods from our suppliers, including limited or single source suppliers, have adversely affected the results of our business operations, and could damage our relationships with customers
19. 19If we fail to accurately forecast component and raw material requirements for our products, we could incur additional costs and experience significant delays in shipments, which could have an adverse effect on the results of our business operations, and could damage our relationships with customers
20. 20Production difficulties and product delivery delays or disruptions could have a material adverse effect on our business
21. 21pandemic or other public health crisis may cause shipping and delivery delays. Such events could cause us to incur increased shipping costs that could not be passed on to our customers or impact our ability to deliver orders, negatively impacting our profitability and our relationships with customers
22. 22There are currently different regulations in place in Great Britain as compared to both Northern Ireland and the EU. Ongoing compliance with both sets of regulatory requirements may result in increased costs for our business
23. 23Our products and operations are subject to various foreign and U.S. federal and state healthcare laws and regulations, which could expose us to penalties
24. 24Our business is indirectly subject to healthcare industry cost containment and healthcare reform measures that could result in reduced sales of our products
25. 25Changes in government regulations related to our business or our products could reduce demand for our products or increase our expenses
26. 26Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards, and other requirements may adversely impact our business and financial results
27. 27If we fail to implement new information technology systems successfully, our business could be adversely affected
28. 28Changes in foreign currency rates could have a material adverse effect on our financial position, results of operations, and cash flows
29. 29Our results of operations will be adversely affected if we fail to realize the full value of our intangible assets
30. 30Our reliance upon OEM customers subjects us to credit, inventory, and business failure risks beyond our control
31. 31The loss of sales, or significant reductions in orders from, any major customers may have a material adverse effect on us
32. 32Increasing scrutiny and changing expectations from investors, customers, governments and other stakeholders and third parties with respect to corporate sustainability and responsibility practices may cause us to incur additional costs or expose us to additional risks
33. 33The effects of climate change and related regulatory responses may adversely impact our business

Risks Relating to Taxes

1. 34Our effective tax rate is subject to fluctuation, which could impact our financial position and earnings per share

Risks Relating to Our Common Shares and Our Capital Structure

1. 35We may require additional capital to adequately respond to business challenges or opportunities and repay or refinance our existing indebtedness, but this capital may not be available on acceptable terms or at all
2. 36Our existing indebtedness could adversely affect our future business, financial condition and results of operations
3. 37In addition, as a global corporation, we have significant cash balances held in foreign countries. Some of these balances may not be immediately available to repay our debt
4. 38The market price for our common shares may be volatile
5. 39general market, political or economic conditions
6. 40We are exposed to the credit risk of some of our customers and to credit exposures in weakened markets, which could adversely affect our results of operations
7. 41While our management and our independent registered public accounting firm concluded that our internal control over financial reporting was effective as of December 31, 2024, it is possible that material weaknesses may be identified in the future