Regal Rexnord (RRX) risk factors, FY2024 10-K

Risks Relating to Our Operations and Strategy

1. 01We depend on certain key suppliers, and any loss of those suppliers or their failure to meet commitments may adversely affect our business and results of operations
2. 02Our dependence on, and the price of, raw materials may adversely affect our gross margins
3. 03We may incur costs and charges as a result of restructuring activities and business optimization initiatives and operations consolidations that may be disruptive to our business and may not result in anticipated cost savings
4. 04We depend on, and expect to continue to depend on, revenues from several significant OEM customers and distributors, and any loss, cancellation or reduction of, or delay in, purchases by these customers or distributors may have a material adverse effect on our business
5. 05Goodwill and other long-lived assets could become impaired
6. 06We rely on estimated forecasts to meet customers’ needs, and inaccuracies in such forecasts could materially adversely affect our business
7. 07We sell certain products for high volume applications, and any failure of those products to perform as anticipated could result in significant liability and expenses that may adversely affect our business and results of operations
8. 08If we were to experience a product recall or rework in connection with products of high volume applications, our financial condition or results of operations could be materially adversely affected
9. 09Sales of products incorporated into HVAC systems and other residential applications are seasonal and affected by the weather; mild or cooler weather could have an adverse effect on our operating performance
10. 10Global climate change and related legal and regulatory developments could negatively affect our business
11. 11Our success is highly dependent on qualified and sufficient staffing. Our failure to attract or retain qualified personnel, including our senior management team, could lead to a loss of revenue or profitability

Risks Related to Mergers, Acquisitions and Divestitures

1. 12Integration costs and unsuccessful integration of our past acquisitions and any future acquisitions into our business within expected timetables could adversely affect our future results and the market price of our common stock
2. 13Businesses that we have acquired or that we may acquire in the future may have liabilities which are not known to us
3. 14We face risks associated with the sale of the industrial motors and generators businesses, which comprised a majority of our Industrial Systems operating segment

Risks Relating to Our Global Footprint

1. 15We operate in highly competitive global industries and markets
2. 16In addition, some of our competitors are larger and have greater financial and other resources than we do. There can be no assurance that our products will be able to compete successfully with the products of these other companies
3. 17We manufacture a significant portion of our products outside the US, and political, societal or economic instability or public health crises may present additional risks to our business
4. 18Disruptions caused by labor disputes or organized labor activities could adversely affect our business or financial results
5. 19Commodity, currency and interest rate hedging activities may adversely impact our financial performance as a result of changes in global commodity prices, interest rates and currency rates
6. 20The net assets, net earnings and cash flows from our foreign subsidiaries are based on the US Dollar equivalent of such amounts measured in the applicable functional currency
7. 21Worldwide economic conditions may adversely affect our industry, business and results of operations
8. 22We are subject to tax laws and regulations in many jurisdictions and the inability to successfully defend claims from taxing authorities related to our current and/or acquired businesses could adversely affect our operating results and financial position
9. 23Our required cash contributions to our pension plans may increase further and we could experience a change in the funded status of our pension plans and the amount recorded in our consolidated balance sheets related to such plans. Additionally, our pension costs could increase in future years

Risks Relating to the Legal and Regulatory Environment

1. 24We are subject to changes in legislative, regulatory and legal developments involving income and other taxes
2. 25Changes to and uncertainty in US trade policy, tariff and import/export regulations and foreign government regulations or other trade restrictions imposed by the US or other governments could adversely affect our business, operating results, foreign operations, sourcing and financial condition
3. 26We are subject to litigation, including product liability, asbestos and warranty claims that may adversely affect our financial condition and results of operations
4. 27Infringement of our intellectual property by third parties may harm our competitive position, and we may incur significant costs associated with the protection and preservation of our intellectual property
5. 28Third parties may claim that we are infringing their intellectual property rights and we could incur significant costs and expenses or be prevented from selling certain products
6. 29We may incur costs or suffer reputational damage due to improper conduct of our associates, agents or business partners
7. 30Our operations are highly dependent on information technology infrastructure, and failures, attacks or breaches could significantly affect our business
8. 31Changes in data privacy laws and our ability to comply with them could have a material adverse effect on us
9. 32Changes in labor or employment laws could increase our costs and may adversely affect our business
10. 33We are subject to environmental laws that could impose significant costs on us and the failure to comply with such laws could subject us to sanctions and material fines and expenses

General Risks

1. 34Our operations can be negatively impacted by natural disasters, terrorism, acts of war, international conflict, pandemic outbreaks and political and governmental actions
2. 35Our stock has been and may continue to be subject to significant fluctuations and volatility