Scotts Miracle-Gro (SMG) risk factors, FY2025 10-K

Other

1. 01Cautionary Note Regarding Forward-Looking Statements

Risks Related to Our Business

1. 02If we underestimate or overestimate demand for our products and do not maintain appropriate inventory levels, our net sales and/or working capital could be negatively impacted
2. 03An economic downturn and economic uncertainty may adversely affect demand for our products59% rewritten
3. 04Disruptions in availability or increases in the prices of raw materials, fuel or transportation costs could adversely affect our results of operations39% rewritten
4. 05Because of the concentration of our sales to a small number of retail customers, the loss of one or more of, or a significant reduction in orders from, any of our top customers, or a material reduction in the inventory of our products that they carry, could adversely affect our financial results
5. 06We may not successfully develop new product lines and products or improve existing product lines and products22% rewritten
6. 07Our marketing activities may not be successful64% rewritten
7. 08The highly competitive nature of our markets could adversely affect our ability to maintain or grow revenues
8. 09Our manufacturing operations, including our reliance on third-party manufacturers, could harm our business
9. 10Our business is subject to risks associated with sourcing and manufacturing outside of the U.S. and risks from tariffs and/or international trade wars23% rewritten
10. 11Our reliance on a limited base of suppliers may result in disruptions to our business and adversely affect our financial results
11. 12A significant interruption in the operation of our or our suppliers’ facilities could adversely impact our capacity to manufacture products and supply our customers, which could adversely affect our results of operations and financial position47% rewritten
12. 13Disruptions to transportation channels that we use to distribute our products may adversely affect our margins and profitability
13. 14Our international operations subject us to the costs and risks associated with operating internationally
14. 15In the event of a disaster, our disaster recovery and business continuity plans may fail, which could adversely interrupt our operations25% rewritten
15. 16Climate change and unfavorable weather conditions could adversely impact our financial results54% rewritten
16. 17Our business could be negatively impacted by corporate citizenship and sustainability matters (including climate change) and/or our reporting of such matters50% rewritten
17. 18Uncertainty surrounding legislation, regulation and governmental policy at the U.S. federal level could lead to disruptions in or have the effect of negatively impacting our financial condition, results of operations and cash flowsNew
18. 19Product recalls or other product liability claims could materially and adversely affect our business, financial condition and results of operations
19. 20If the perception of our brands or organizational reputation are damaged, our consumers, distributors and retailers may react negatively, which could materially and adversely affect our business, financial condition and results of operations63% rewritten
20. 21Such negative publicity may be widely and rapidly disseminated, including through social media platformsNew
21. 22Certain of our products may be purchased for use in new and emerging industries or segments and/or be subject to varying, inconsistent and rapidly changing laws, regulations, administrative practices, enforcement approaches, judicial interpretations and consumer perceptions30% rewritten
22. 23If we are unable to effectively execute our e-commerce business, our reputation and operating results may be harmed31% rewritten
23. 24Our operations, financial condition or reputation may be impaired if our information or operational technology systems fail to perform adequately or if we are the subject of a data breach or cyber attack33% rewritten
24. 25Our insurance coverage may not be sufficient to avoid or effectively mitigate or transfer the adverse impact of claims or liabilities against us on our financial position or results of operations and we may not be able to obtain appropriate insurance coverage in the future
25. 26In the event the Third Restated Agreement for Monsanto’s consumer Roundup® products terminates or Monsanto’s consumer Roundup® business materially declines, we would lose a substantial source of future earnings and overhead expense absorption
26. 27In the event that the Third Restated Agreement terminates or Monsanto’s consumer Roundup® business materially declines, we would lose all, or a substantial portion, of the significant source of earnings and overhead expense absorption the Third Restated Agreement provides
27. 28We may not be able to adequately protect our intellectual property and other proprietary rights that are material to our business31% rewritten
28. 29Our success depends upon the retention and availability of key personnel and the effective succession of senior management53% rewritten
29. 30Our workforce reductions may cause undesirable consequences and adversely affect our business and results of operations43% rewritten
30. 31We are involved in a number of legal proceedings and, while we cannot predict the outcomes of such proceedings and other contingencies with certainty, some of these outcomes could adversely affect our business, financial condition, results of operations and cash flows

Risks Related to Our M&A, Lending and Financing Activities

1. 32Our indebtedness could limit our flexibility and adversely affect our financial condition45% rewritten
2. 33Significant or prolonged periods of higher interest rates may have an adverse effect on our financial condition, results of operations and cash flows63% rewritten
3. 34Global economic and capital market conditions may limit our access to capital and/or increase the costs of such capital
4. 35Acquisitions, other strategic alliances and investments could result in operating difficulties, dilution and other harmful consequences that may adversely impact our business and results of operations
5. 36A failure to dispose of assets or businesses in a timely manner may have an adverse effect on our results of operations and financial condition
6. 37Our lending activities may adversely impact our business and results of operations
7. 38Changes in credit ratings issued by nationally recognized statistical rating organizations (“NRSROs”) could adversely affect our cost of financing and the market price of our Senior Notes50% rewritten
8. 39Our hedging arrangements expose us to certain counterparty and market risks46% rewritten
9. 40Our postretirement-related costs and funding requirements could increase as a result of volatility in the financial markets, changes in interest rates and actuarial assumptions

Risks Related to Regulation of Our Company

1. 41Compliance with environmental and other public health regulations or changes in such regulations or regulatory enforcement priorities could increase our costs of doing business or limit our ability to market certain products29% rewritten
2. 42Unanticipated changes in our tax provisions, the adoption of new tax legislation or exposure to additional tax liabilities could affect our financial condition, results of operations and cash flows

Risks Related to Our Common Shares

1. 43The Company’s decision to maintain, reduce or discontinue paying cash dividends to our shareholders or repurchasing our Common Shares could cause the market price for our Common Shares to decline
2. 44Hagedorn Partnership, L.P. beneficially owns approximately 23% of our Common Shares and can significantly influence decisions that require the approval of shareholders