Envista Holdings (NVST) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01Conditions in the global economy, especially with respect to the particular markets we serve and the volatility of the financial markets may adversely affect our business and financial statements
2. 02International economic, political, legal, compliance and business factors could negatively affect our financial statements
3. 03Any of these risks could negatively affect our financial statements, business, growth rate, competitive position, results of operations and financial condition
4. 04Significant developments or uncertainties stemming from trade policies and regulations could have an adverse effect on our business
5. 05Our growth could suffer if the markets into which we sell our products and services decline, do not grow as anticipated or experience cyclicality
6. 06Our financial results are subject to fluctuations in the cost and availability of commodities that we use in our operations
7. 07If we suffer loss to our facilities, supply chains, distribution systems or information technology systems due to a cybersecurity incident, catastrophe or other events, our operations could be seriously harmed
8. 08The manufacture of many of our products is a highly exacting and complex process, and if we directly or indirectly encounter problems manufacturing products, our reputation, business and financial statements could suffer
9. 09A significant disruption in, or breach in security of, our information technology systems or data or violation of data privacy laws could adversely affect our business, operations, reputation and financial statements
10. 10We currently outsource certain elements of our information technology systems to third-party services providers and their failure to adequately perform their services or attacks to their information systems could have a material adverse impact on our business operations and make our systems vulnerable to attacks
11. 11Data privacy and security laws relating to the handling of personal information (including personal health information) are evolving across the world and may be drafted, interpreted or applied in a manner that results in increased costs, legal claims, fines against us, reputational damage or impedes delivery
12. 12Data residency and localization laws have also been passed or are under consideration in several countries (such as China and Russia), which require personal information relating to their citizens to be maintained on local servers and impose additional data transfer restrictions
13. 13Our growing use of AI systems to automate processes and analyze data poses inherent risks
14. 14Our growth depends in part on the timely development, commercialization, and customer acceptance of new and enhanced products and services based on technological innovation
15. 15If we fail to accurately predict future customer needs and preferences or fail to produce viable technologies, we may invest heavily in research and development of products and services that do not lead to significant sales, which would adversely affect our profitability
16. 16We have undergone, and may continue to experience, changes to our executive leadership team and senior management, and our future success will depend in part on our ability to manage these transitions successfully and on our ability to attract, develop and retain our key personnel
17. 17Any inability to consummate acquisitions at our historical rate and at appropriate prices, and to make appropriate investments that support our long-term strategy, could negatively impact our growth rate and stock price
18. 18Our acquisition of businesses, investments, joint ventures and other strategic relationships could negatively impact our financial statements
19. 19The indemnification provisions of acquisition agreements by which we have acquired companies may not fully protect us and as a result we may face unexpected liabilities
20. 20Divestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we or our predecessors have sold could adversely affect our financial statements
21. 21Inventories maintained by our distributors and customers may fluctuate from time to time
22. 22If we do not or cannot adequately protect our intellectual property, or if third parties infringe our intellectual property rights, we may suffer competitive injury or expend significant resources enforcing our rights
23. 23Third parties may claim that we are infringing or misappropriating their intellectual property rights and we could suffer significant litigation expenses, losses or licensing expenses or be prevented from selling products or services
24. 24Defects and unanticipated use or inadequate disclosure with respect to our products or services (including software), or allegations thereof, could adversely affect our business, reputation and financial statements
25. 25Our restructuring and site consolidation actions could have long-term adverse effects on our business
26. 26We may be adversely affected by climate-related risks or by legal, regulatory or market responses to such risks

Risks Related to Our Indebtedness

1. 27We have outstanding indebtedness of approximately $1.4 billion, and in the future, we may incur additional indebtedness. This indebtedness could adversely affect our businesses and our ability to meet our obligations
2. 28We may not be able to generate sufficient cash 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 and may adversely affect our ability to pay dividends (if we pay dividends in the future)
3. 29We may be unable to raise the funds necessary to repurchase the Notes for cash following a fundamental change, or to pay any cash amounts due upon conversion, and our other indebtedness may limit our ability to repurchase the Notes or pay cash upon their conversion
4. 30The conditional conversion feature of the Notes, if triggered, may adversely affect our financial condition and operating results
5. 31The existing capped call transactions we entered into in connection with the 2025 Notes may affect the value of the Notes and our common stock
6. 32We are subject to counterparty risk with respect to the Capped Calls
7. 33Our variable rate indebtedness exposes us to interest rate volatility, which could cause our debt service obligations to increase significantly

Risks Related to Our Industry

1. 34The industries that we serve have undergone, and are in the process of undergoing, significant changes in an effort to reduce costs, which could adversely affect our financial statements
2. 35We face intense competition and if we are unable to compete effectively, we may experience decreased demand and decreased market share. Even if we compete effectively, we may be required to reduce prices for our products and services

Risks Related to Laws and Regulations

1. 36Changes in governmental regulations may reduce demand for our products or services or increase our expenses
2. 37Off-label marketing or misleading advertising of our products could result in substantial penalties
3. 38Certain modifications to our products may require new 510(k) clearances or other marketing authorizations and may require us to recall or cease marketing our products
4. 39Our operations, products and services expose us to the risk of environmental, health and safety liabilities, costs and violations that could adversely affect our business, reputation and financial statements
5. 40Our businesses are subject to extensive regulation; failure to comply with those regulations could adversely affect our financial statements and our business, including our reputation

Risks Related to Ownership of Our Stock

1. 41The price of our common stock may continue to be volatile, which could lead to securities litigation brought against us or cause investors to lose the value of their investment
2. 42Certain provisions in our second amended and restated certificate of incorporation, as amended, our third amended and restated bylaws, the Indentures governing the Notes, and of Delaware law, may prevent or delay an acquisition of us, which could decrease the trading price of our common stock
3. 43In addition, our third amended and restated bylaws, provide that the federal district courts of the U.S. will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, unless we consent in writing to the selection of an alternative forum
4. 44Conversion of the Notes may dilute the ownership interest of our stockholders or may otherwise depress the prices of our common stock
5. 45The issuance or sale of shares of our common stock, or rights to acquire shares of our common stock, could depress the trading price of our common stock and the Notes

General Risks

1. 46We have recognized substantial impairment charges for our goodwill and indefinite-lived intangible assets and may be required to recognize additional impairment charges for such assets in the future
2. 47Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results or financial condition
3. 48Foreign currency exchange rates may adversely affect our financial statements
4. 49Changes in tax law relating to multinational corporations could adversely affect our tax position
5. 50We are subject to a variety of litigation and other legal and regulatory proceedings in the course of our business that could adversely affect our business and financial statements
6. 51Work stoppages, union and works council campaigns and other labor disputes could adversely impact our productivity and results of operations