Spectrum Brands Holdings (SPB) risk factors, FY2024 10-K

Risks Related to our Business Operations

1. 01Our plans to separate our HPC business into an independent, publicly traded company may not be completed on the currently contemplated timeline or at all and, if completed, may not achieve the intended benefits
2. 02Reliance on third-party relationships and outsourcing arrangements that are beyond our control could adversely affect our business
3. 03Compliance with regulations regarding the use of “conflict minerals” could limit the supply and increase the cost of certain metals used in manufacturing our products
4. 04Uncertain global economic conditions may adversely impact demand for our products or cause our customers and other business partners to suffer financial hardship, which could adversely impact our business
5. 05The People’s Republic of China (“PRC”) government may intervene with or influence the operations of our suppliers at any time, which could result in a material change in our operations
6. 06Disruption in our global supply chain may negatively impact our business results
7. 07We participate in very competitive markets and we may not be able to compete successfully, causing us to lose market share and sales
8. 08Changes in consumer preferences and shopping trends and changes in distribution channels could significantly harm our business
9. 09Consolidation of retailers and our dependence on a small number of key customers for a significant percentage of our sales may negatively affect our business, financial condition and results of operations
10. 10As a result of retailers maintaining tighter inventory control, we face risks related to meeting demand and storing inventory
11. 11Sales of certain of our products are seasonal and may cause our operating results and working capital requirements to fluctuate
12. 12Adverse weather conditions during our peak selling seasons for our home and garden products could have a material adverse effect on our home and garden business
13. 13Our products utilize certain key raw materials; any significant increase in the price of, or change in supply and demand for, these raw materials could have a material and adverse effect on our business, financial condition and profits
14. 14Our dependence on a few suppliers for certain of our products makes us vulnerable to a disruption in the supply of our products
15. 15Our home and garden products are mainly manufactured from our Vinita Park, MO, facility and our aquatics products and certain companion animal products are manufactured in Blacksburg, VA, Bridgeton, MO, Noblesville IN and Melle, Germany. We are dependent upon the continued safe operation of these facilities
16. 16If we are unable to negotiate satisfactory terms to continue existing or enter into additional collective bargaining agreements, we may experience an increased risk of labor disruptions and our results of operations and financial condition may suffer
17. 17Significant changes in actual investment return on pension assets, discount rates, and other factors could affect our results of operations, equity and pension contributions in future periods
18. 18Our business may be materially affected by changes to fiscal and tax policies that could adversely affect our results of operations and cash flows
19. 19We may not be able to fully utilize our U.S. tax attributes
20. 20Our strategic initiatives including acquisitions and divestitures may not be successful and may divert our management’s attention away from operations and could create general customer uncertainty
21. 21Significant costs have been incurred and are expected to be incurred in connection with the consummation of recent and future strategic initiatives including the integration or separation of acquired or divested businesses within the Company
22. 22We may not realize the anticipated benefits of, and synergies from, our business acquisitions and may become responsible for certain liabilities and integration costs as a result
23. 23We may not be able to retain key personnel or recruit additional qualified personnel, which could materially affect our business and require us to incur substantial additional costs to recruit replacement personnel
24. 24Increased focus by governmental and non-governmental organizations, customers, consumers and investors on sustainability issues, including those related to climate change, may have an adverse effect on our business, financial condition and results of operations and damage our reputation
25. 25Our business could be negatively impacted by corporate citizenship and sustainability matters and/or our reporting of such matters
26. 26Failure to deploy social media and influencers effectively may materially and adversely affect our reputation, business, financial condition and results of operations
27. 27The COVID-19 pandemic was, and future pandemics could be a serious threat to the health and economic well-being affecting our customers, employees, sources of supply and our financial condition and results of operations

Risks Related to our Indebtedness and Financing Activities

1. 28Servicing our existing and future debt may require a significant amount of cash, and we may not have sufficient cash flow from our business to settle exchanges of the Exchangeable Notes in cash, repay the Exchangeable Notes at maturity, or repurchase the Exchangeable Notes as required following a fundamental change
2. 29The capped call transactions we entered into in connection with the issuance of the Exchangeable Notes may affect the value of our common stock
3. 30Aspects of the Capped Calls may not operate as planned and may affect the value of the Exchangeable Notes and our common stock, and we are subject to counterparty credit risk with respect to the Capped Calls
4. 31The conditional exchange feature of the Exchangeable Notes, if triggered, may adversely affect our financial condition and operating results
5. 32Provisions in the indenture for the Exchangeable Notes may deter or prevent a strategic transaction that may be favorable to you
6. 33The issuance of additional stock, including common stock delivered upon exchange of the Exchangeable Notes, will dilute all other shareholders
7. 34Our substantial indebtedness may limit our financial and operating flexibility, and we may incur additional debt, which could increase the risks associated with our indebtedness
8. 35Under our senior credit agreement governing our secured facilities and the indentures governing our senior notes (together, our “debt agreements”), we may incur additional indebtedness. If new debt is added to our existing debt levels, the related risks that we now face would increase
9. 36Restrictive covenants in our debt agreements may restrict our ability to pursue our business strategies
10. 37Future financing activities may adversely affect our leverage and financial condition

Risks Related to our International Operations

1. 38We are subject to significant international business risks that could hurt our business and cause our results of operations to fluctuate
2. 39As a result of our international operations, we face a number of risks related to exchange rates and foreign currencies
3. 40Our international operations expose us to risks related to compliance with the laws and regulations of foreign countries
4. 41We face risks related to the impact on foreign trade agreements and relations
5. 42We face risks relating to tariffs imposed by the United States and other governments
6. 43We are subject to risks associated with importing goods and materials from foreign countries

Risks Related to Data Privacy and Intellectual Property

1. 44We and our licensors may not be able to adequately establish and protect the intellectual property rights we use in our business and the infringement or loss of our intellectual property rights could harm our business
2. 45If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology, products and services could be harmed significantly
3. 46Claims by third parties that we are infringing their intellectual property and other litigation could adversely affect our business
4. 47A cybersecurity breach or failure of one or more key information technology systems could have a material adverse impact on our business or reputation
5. 48Disruption or failures of our information technology systems could have a material adverse effect on our business
6. 49Our actual or perceived failure to adequately protect personal data could adversely affect our business, financial condition and results of operations
7. 50We are subject to data security and privacy risks that could negatively affect our results, operations or reputation

Risks Related to Litigation and Regulatory Compliance

1. 51Class action and derivative action lawsuits and other investigations, regardless of their merits, could have an adverse effect on our business, financial condition and results of operations
2. 52We are subject to a number of claims and litigation and may be subject to future claims and litigation, any of which may adversely affect our business
3. 53The Company has been, and may in the future be, subject to product liability claims and product recalls, which could negatively impact its profitability
4. 54Agreements, transactions and litigation involving or resulting from the activities of our predecessor and its former subsidiaries may subject us to future claims or litigation that could materially adversely impact our capital resources
5. 55We may incur material capital and other costs due to changing environmental laws and regulations and other environmental liabilities
6. 56Compliance with various public health, consumer protection and other regulations applicable to our products and facilities could increase our cost of doing business and expose us to additional requirements with which we may be unable to comply
7. 57We may be unable to achieve our goals and aspirations related to the reduction of greenhouse gas emissions, or otherwise meet the expectations of our stakeholders with respect to ESG matters
8. 58Public perceptions that some of the products we produce and market are not safe could adversely affect us
9. 59We have in our past recorded substantial impairment charges relating to indefinite-lived intangible assets. If our indefinite-lived intangible assets or other long-term assets become impaired, we will be required to record additional impairment charges, which may be significant
10. 60The successful execution of our operational efficiency and multi-year restructuring initiatives are important to the long-term growth of our business

Risks Related to our Common Stock

1. 61Our Restated Bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees
2. 62Certain provisions of our charter, bylaws, and of the Delaware General Corporation Law (the “DGCL”) have anti-takeover effects and could delay, discourage, defer or prevent a tender offer or takeover attempt that a stockholder might consider to be in the stockholder’s best interests
3. 63The market price of the Company’s common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control