SPX Technologies (SPXC) risk factors, FY2024 10-K

Other

1. 01(All currency and share amounts are in millions)

Risks Related to our Markets and Customers

1. 02Many of the markets in which we operate are subject to general economic cycles or industry events. In addition, certain of our businesses are subject to market-specific cycles
2. 03Furthermore, contract timing on projects, including those relating to communication technologies, transportation systems, aids to navigation products, and process cooling systems and towers may cause significant fluctuations in revenues and profits from period to period
3. 04Our business depends on capital investment and maintenance expenditures by our customers
4. 05Our customers have been and could be impacted by commodity availability and prices
5. 06We operate in highly competitive markets. Our failure to compete effectively could harm our business
6. 07Our business with various governments is subject to government contracting risks

Risks Related to our Suppliers and Vendors

1. 08The price and availability of raw materials and components has and may adversely affect our business
2. 09The fact that we outsource various elements of the products and services we sell subjects us to the business risks of our suppliers and subcontractors, which could have a material adverse impact on our operations

Risks Related to Our Manufacturing and Operations

1. 10Cost overruns, inflation, delays and other risks could significantly impact our results, particularly with respect to fixed-price contracts
2. 11Estimates of total revenues and cost at completion are subject to many variables, including the length of time to complete a contract. In addition, contract delays may negatively impact these estimates and our revenues and earnings results for affected periods
3. 12Our operations are at risk of damage, destruction or disruption by natural disasters and other unexpected events

Risks Related to Acquisitions and Dispositions

1. 13Acquisitions involve a number of risks and present financial, managerial and operational challenges
2. 14We conduct operational, financial, tax, systems, and legal due diligence on all acquisitions; however, we cannot assure that all potential risks or liabilities are adequately discovered, disclosed, or understood in each instance
3. 15Our failure to successfully complete acquisitions could negatively affect us
4. 16We may not achieve the expected cost savings and other benefits of our acquisitions
5. 17Dispositions or liabilities retained in connection with dispositions could negatively affect us

Risks Related to Macro-Economic, Domestic and World Events

1. 18Governmental laws and regulations could negatively affect our business
2. 19Difficulties presented by domestic economic, political, legal, accounting and business factors could negatively affect our business
3. 20Worldwide economic conditions could negatively impact our businesses
4. 21Our non-U.S. revenues and operations expose us to numerous risks that may negatively impact our business
5. 22Climate change and legal or regulatory responses thereto may have an adverse impact on our business and results of operations
6. 23Failure to meet evolving expectations for other reporting on sustainability and social responsibility matters could adversely affect our sales and results of operations

Risks Related to Information, Technology and Cybersecurity

1. 24If we are unable to protect our information systems and networks against data corruption, cyber-based attacks or network security breaches, our operations could be disrupted
2. 25timely manner or on terms and conditions, including service levels and cost, that are favorable to us, and a transition from one vendor to another vendor could subject us to operational delays and inefficiencies until the transition is complete
3. 26Operation on multiple Enterprise Resource Planning (“ERP”) information systems and other applications may negatively impact our operations and internal control environment
4. 27Our technology is important to our success, and failure to develop new products or make the appropriate investment in technology advancements may result in the loss of any sustainable competitive advantage in products, services and processes
5. 28Failure to protect or unauthorized use of our intellectual property may harm our business

Risks Related to Contingent Liabilities

1. 29Our current and planned products may contain defects or errors that are detected only after delivery to customers. If that occurs, our reputation may be harmed and we may face additional costs
2. 30We are subject to various laws, ordinances, regulations and other requirements of government authorities in the United States and other nations. Additionally, changes in laws, ordinances, regulations, or other governmental policies may significantly increase our expenses and liabilities

Risks Related to Human Capital Resources

1. 31The loss of key personnel and an inability to attract and retain qualified employees could have a material adverse effect on our operations
2. 32We are subject to work stoppages, union negotiations, labor disputes and other matters associated with our labor force, which may adversely impact our operations and cause us to incur incremental costs

Risks Related to Financial Matters

1. 33We may not be able to finance future needs or adapt our business plan to react to changes in economic or business conditions because of restrictions placed on us by our senior credit facilities and any existing or future instruments governing our other indebtedness
2. 34A significant portion of our debt accrues interest at variable rates and increases in applicable benchmark interest rates could adversely affect our results of operations and cash flows
3. 35Currency conversion risk could have a material impact on our reported results of business operations
4. 36The financial condition of our customers and distributors could affect our ability to market our products or collect receivables. In addition, financial difficulties faced by our customers may lead to cancellations or delays of orders
5. 37Currency and interest rate hedging activities may adversely impact our financial performance as a result of changes in relevant interest rates and currency rates
6. 38Changes in tax laws and regulations or other factors could cause our income tax obligations to increase, potentially reducing our net income and adversely affecting our cash flows
7. 39If the fair value of any of our reporting units is insufficient to recover the carrying value of the goodwill and other intangible assets of the respective reporting unit, a material non-cash charge to earnings could result
8. 40Cost reduction actions often result in charges against earnings. These charges can vary significantly from period to period and, as a result, we may experience fluctuations in our reported net income and earnings per share due to the timing of cost reduction actions
9. 41Our incurrence of additional indebtedness may affect our business and may restrict our operating flexibility
10. 42Failure of our internal control over financial reporting could adversely affect our business and financial results

Risks Related to Ownership of Our Common Stock

1. 43Provisions in our corporate documents and Delaware law may delay or prevent a change in control of our company, and accordingly, we may not consummate a transaction that our stockholders consider favorable
2. 44Increases in the number of shares of our outstanding common stock could adversely affect our common stock price or dilute our earnings per share