Power Solutions International (PSIX) risk factors, FY2024 10-K

Other

1. 01Liquidity and Indebtedness
2. 02The Company has a significant amount of indebtedness and is highly leveraged. Its existing debt or any potential new debt could adversely affect its business and growth prospects
3. 03The Company is subject to price increases in some of the key components in its power systems
4. 04Many of the Company’s power systems involve long and variable design and sales cycles
5. 05The Company could suffer warranty claims or be subject to product liability claims, both of which could materially adversely affect its business
6. 06The Company and its products are subject to numerous environmental and regulatory policies, including emission and fuel economy rules
7. 07The Company is dependent on certain key third-party suppliers, and the partial or complete loss of one of these key suppliers, or the failure to find replacement suppliers or manufacturers in a timely manner, could result in supply shortages
8. 08Disruptions arising from compliance with certain importation and trade laws and regulations, including those governing goods shipped from certain regions in China, have, and in the future may, cause supply chain interruptions and raw material shortages
9. 09The market for alternative-fueled, spark-ignited power systems may not continue to develop as expected
10. 10The Company may be impacted by volatility of oil and gas prices and/or fuel price differentials
11. 11The introduction of new products, including new engines that the Company develops, and the continued expansion of products may not succeed or achieve widespread acceptance
12. 12The Company’s OEM customers may not continue to outsource their power system needs
13. 13The failure to attract, retain and motivate a highly qualified workforce and high functioning management team could, in the future, affect the Company’s business results
14. 14A decrease in stock price may have an unfavorable impact on our status on the Nasdaq and liquidity
15. 15Ownership of the Company’s stock is concentrated with Weichai and the founder of the Company, and therefore other stockholders’ ability to influence corporate matters is limited
16. 16Weichai maintains certain rights through its Investor Rights Agreement with the Company
17. 17The Company is exposed to, and may be adversely affected by, potential security breaches or other disruptions to its information technology systems and data security
18. 18Adverse global and regional economic conditions may materially and adversely affect the Company’s business, results of operations and financial condition
19. 19The Company is exposed to political, economic and other risks, in addition to various laws and regulations that arise from operating a multinational business
20. 20Any of these factors could have a material adverse effect on the Company’s business and results of operations
21. 21Employee disputes or litigation and related unfavorable publicity may negatively affect our future business, financial condition, and operating results
22. 22If we fail to maintain an effective system of internal controls, we may not be able to accurately determine our financial results or prevent fraud. As a result, our stockholders could lose confidence in our financial results, which could materially and adversely affect us
23. 23The Company could incur restructuring and impairment charges as it continuously evaluates its portfolio of assets and identifies opportunities to restructure its business to optimize its cost structure
24. 24The Company currently faces, and will continue to face, significant competition
25. 25Failure to keep pace with technological developments may adversely affect the Company’s operations
26. 26The Company could fail to adequately protect its intellectual property rights or could face claims of intellectual property infringement by third parties
27. 27Limitations of the Company’s Directors’ and Officers’ liability insurance and potential indemnification obligations will have a material adverse effect on the Company’s financial condition, results of operations and cash flows
28. 28The Company’s inability to generate sufficient taxable income in the future may limit the Company’s ability to use net operating loss (“NOL”) carryforwards to reduce future tax payments
29. 29Unanticipated changes in our effective tax rate, the adoption of new tax legislation or exposure to additional income tax liabilities could adversely affect our profitability