SPX Technologies (SPXC) risk factors, FY2025 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
7. 08Contracts with, or funded by, the U.S. government or their agencies present additional risks compared to contracts with private sector customersNew

Risks Related to our Suppliers and Vendors

1. 09The price and availability of raw materials and components may adversely affect our business
2. 10The 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. 11Cost overruns, inflation, delays and other risks could significantly impact our results, particularly with respect to fixed-price contracts
2. 12Estimates 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. 13Our operations are at risk of damage, destruction or disruption by natural disasters and other unexpected events49% rewritten

Risks Related to Acquisitions and Dispositions

1. 14Acquisitions involve a number of risks and present financial, managerial and operational challenges
2. 15We 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. 16Our failure to successfully complete acquisitions could negatively affect us
4. 17We may not achieve the expected cost savings and other benefits of our acquisitions
5. 18Dispositions or liabilities retained in connection with dispositions could negatively affect us68% rewritten
6. 19“MD&A - Results of Discontinued Operations,” and Note 4 to our consolidated financial statements for the status of our divestituresNew
7. 20We may be unable to effect dispositions of non-core businesses on attractive terms or at allNew

Risks Related to Macro-Economic, Domestic and World Events

1. 21Governmental laws and regulations could negatively affect our business
2. 22Difficulties presented by domestic economic, political, legal, accounting and business factors could negatively affect our business
3. 23Worldwide economic conditions could negatively impact our businesses65% rewritten
4. 24Our non-U.S. revenues and operations expose us to numerous risks that may negatively impact our business
5. 25Climate change and legal or regulatory responses thereto may have an adverse impact on our business and results of operations23% rewritten
6. 26Failure 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. 27If we are unable to protect our information systems and networks against data corruption, cyber-based attacks or network security breaches, our operations could be disrupted61% rewritten
2. 28Operation on multiple Enterprise Resource Planning (“ERP”) information systems and other applications may negatively impact our operations and internal control environment
3. 29Our 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
4. 30Failure to protect or unauthorized use of our intellectual property may harm our business

Risks Related to Contingent Liabilities

1. 31Our 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. 32We 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. 33The loss of key personnel and an inability to attract and retain qualified employees could have a material adverse effect on our operations
2. 34We 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 costs38% rewritten

Risks Related to Financial Matters

1. 35We 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. 36A 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. 37Currency conversion risk could have a material impact on our reported results of business operations
4. 38The 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. 39Currency and interest rate hedging activities may adversely impact our financial performance as a result of changes in relevant interest rates and currency rates
6. 40Changes 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. 41If 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. 42Cost 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. 43Our incurrence of additional indebtedness may affect our business and may restrict our operating flexibility
10. 44Failure of our internal control over financial reporting could adversely affect our business and financial results

Risks Related to Ownership of Our Common Stock

1. 45Provisions 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. 46Increases in the number of shares of our outstanding common stock could adversely affect our common stock price or dilute our earnings per share37% rewritten