Standard Motor Products (SMP) risk factors, FY2025 10-K

Risks Related to Our Operations

1. 01We depend on a limited number of key customers, and the loss of any such customer, or a significant reduction in purchases by such customer, could have a material adverse effect on our business, financial condition and results of operations
2. 02Our industry is highly competitive, and our success depends on our ability to compete with suppliers of automotive products, some of which may have substantially greater financial, marketing and other resources than we do
3. 03There is substantial price competition in our industry, and our success and profitability will depend on our ability to maintain a competitive cost and price structure
4. 04Historically, our operating results have fluctuated by quarter, with the greatest sales occurring in the second and third quarters of the year and revenues generally being recognized at the time of shipment. It is in these quarters that demand for our temperature control products is typically the highest
5. 05We may incur material losses and significant costs as a result of warranty-related returns by our customers in excess of anticipated amounts or product recalls32% rewritten
6. 06Our profitability may be materially adversely affected as a result of overstock inventory related returns by our customers in excess of anticipated amounts
7. 07We may be materially adversely affected by asbestos claims arising from products sold by our former brake business, as well as by other product liability claims26% rewritten
8. 08We may not be able to achieve the benefits that we expect from our cost savings initiatives
9. 09Severe weather, natural disasters and other disruptions could adversely impact our operations at our manufacturing and distribution facilities
10. 10Disruptions in the supply of raw materials, manufactured components, or equipment could materially and adversely affect our operations and cause us to incur significant cost increases
11. 11Our operations could be adversely affected by interruptions or breaches in the security of our computer and information systems65% rewritten
12. 12The transition risks associated with global climate change may cause us to incur significant costs
13. 13Failure to maintain the value of our brands could have an adverse effect on our reputation, cause us to incur significant costs and negatively impact our business
14. 14Our revenue and results of operations may suffer upon the bankruptcy, insolvency or other credit failure of a significant customer71% rewritten
15. 15In our Engineered Solutions business, our supply agreements with our customers are generally requirements contracts, and a decline in the production requirements of any of our significant customers could adversely impact our revenues and profitabilityNew
16. 16Our inability to attract or retain key employees may have an adverse effect on our business, financial condition and results of operations
17. 17We may not be able to realize all of the expected revenues and cash flows from our acquisitions and investments, and any completed acquisitions and investments may be unsuccessful or consume significant resources

Risks Related to Liquidity

1. 18We are exposed to risks related to our receivables supply chain financing arrangements21% rewritten
2. 19A significant increase in our indebtedness, or in interest rates, could negatively affect our financial condition, results of operations and cash flows31% rewritten
3. 20We may not be able to generate the significant amount of cash needed to satisfy our obligations or maintain sufficient liquidity through borrowing capacities
4. 21We have significant goodwill and other intangible assets, and future impairment of these assets could have a material adverse impact on our financial condition and results of operations

Risks Related to Other External Factors

1. 22We conduct our manufacturing and distribution operations on a worldwide basis and are subject to risks associated with doing business outside the United States35% rewritten
2. 23We may incur liabilities under government regulations and environmental laws, which may have a material adverse effect on our business, financial condition and results of operations
3. 24Our future performance may be materially adversely affected by changes in technologies and improvements in the quality of new vehicle parts68% rewritten