Simpson Manufacturing (SSD) risk factors, FY2024 10-K

Risks Related to Our Business and Our Industry

1. 01Business cycles and uncertainty regarding the housing market, economic conditions, political climate and other factors beyond our control could adversely affect demand for our products and services, and our costs of doing business, any of which may harm our business, financial condition and results of operations
2. 02We have a few large customers, the loss of any one of which could negatively affect our sales and profits
3. 03Our growth may depend on our ability to develop new products and services and penetrate new markets, which could reduce our profitability
4. 04Increases in prices of raw materials and energy could negatively affect our sales and profits
5. 05We face significant competition in the markets we serve and we may not be able to compete successfully
6. 06We depend on third parties for transportation services and the lack of availability of transportation and/or increases in cost could materially and adversely affect our business and operations
7. 07Expectations relating to environmental, social and governance considerations expose the Company to potential liabilities, increased costs, reputational harm and other adverse effects on the Company’s business

Risks Related to Our Intellectual Property and Information Technology

1. 08Our recent efforts to increase our technology offerings and integrate new software and application offerings may prove unsuccessful and may affect our future prospects
2. 09If we cannot protect our intellectual property, we will not be able to compete effectively
3. 10We are subject to cyber security risks and may incur increasing costs in efforts to minimize those risks and to comply with regulatory standards
4. 11regulations, proceedings against us by governmental entities or others, damage to our reputation and credibility, and could have a material adverse effect on our business and results of operations
5. 12We rely on complex software systems and hosted applications to operate our business, and our business may be disrupted if we are unable to successfully and efficiently update these systems or convert to new systems
6. 13Some of our agreements for software and software-as-services products have limited terms, and we may be unable to renew such agreements and may lose access to such products

Risks Related to Our International Operations

1. 14International operations and our financial results in those markets may be affected by legal, regulatory, political, currency exchange and other economic risks
2. 15If significant tariffs or other restrictions are placed on our imports or any related counter-measures are taken by other countries, our costs of doing business, revenue and results of operations may be negatively impacted
3. 16Failure to comply with export, import, and sanctions laws and regulations could materially and adversely affect us
4. 17Our manufacturing facilities in China complicate our supply and inventory management
5. 18We are subject to U.S. and international tax laws that could affect our financial results
6. 19Significant judgment and certain estimates are required in determining our worldwide provision for income taxes. Future tax law changes may materially increase the Company’s prospective income tax expense
7. 20Increases in income tax rates, changes in income tax laws or disagreements with tax authorities could adversely affect our financial performance
8. 21We are a global company with significant revenues and earnings generated internationally, which exposes us to the impact of foreign currency fluctuations, as well as political and economic risks
9. 22Changes in the global economic environment, inflation, elevated interest rates, recessions or prolonged periods of slow economic growth, and global instability and actual and threatened geopolitical conflict, could continue to adversely affect our operations
10. 23The impact of public health crises, could have a significant effect on supply and/or demand for our products and services and have a negative impact on our business, financial condition and results of operations
11. 24Changes in government and industry regulatory standards pertaining to health and safety and various political factors could have a material adverse effect on our business, financial condition or results of operations

Risks Related to Seasonality and Weather Conditions

1. 25Seasonality and weather-related conditions may have a significant impact on our financial condition from period to period
2. 26operations. Sales that we anticipate in one quarter may occur in another quarter, affecting both quarters’ results and potentially our stock price
3. 27Climate change, drought, weather conditions and storm activity could have a material adverse impact on our results of operations
4. 28Generally, any weather conditions that slow or limit residential or construction activity can adversely impact demand for our products and services
5. 29Natural disasters or other catastrophes could decrease our manufacturing capacity or harm our business and financial condition

Risks Related to Product, Services and Sales Risks

1. 30Product liability claims and litigation could affect our business, reputation, financial condition, results of operations and cash flows
2. 31Design defects, labeling defects, product formula defects, inaccurate chemical mixes, product recalls and/or product liability claims could harm our business, reputation, financial condition and results of operations
3. 32While we generally attempt to limit our contractual liability and our exposure to price or expense increases, we may have uncapped liabilities or significant exposure under some contracts, and could suffer material losses under such contracts

Risks Related to Human Capital

1. 33We depend on executives and other key employees, the loss of whom could harm our business
2. 34Our work force could become increasingly unionized in the future and our unionized or union-free work force could strike, which could adversely affect the stability of our production and reduce our profitability
3. 35Acquisitions, divestitures, and other strategic transactions could fail to achieve financial or strategic objectives, disrupt our ongoing business, and adversely impact our results of operations
4. 36As a result, if we fail to evaluate and execute these transactions properly, we might not achieve the anticipated benefits of such transactions and we may incur costs in excess of what we anticipate. These risks would likely be greater in the case of larger transactions
5. 37Our capital expenditures may not be adequate to maintain our competitive position and may not be implemented in a timely or cost-effective manner
6. 38Additional financing, if needed, to fund our working capital, growth or other business requirements may not be available on reasonable terms, or at all

Regulatory Risks

1. 39Failure to comply with industry regulations could result in reduced sales and increased costs
2. 40We are subject to environmental laws and regulations governing emissions into the air, discharges into water, and generation, handling, storage, transportation, treatment and disposal of waste materials. We are also subject to other federal and state laws and regulations regarding health and safety matters
3. 41We have in the past, and may in the future, need to take steps to remedy our failure to properly label, store, transport, use and manufacture such toxic and hazardous materials
4. 42Complying or failing to comply with conflict minerals regulations could materially and adversely affect our supply chain, our relationships with customers and suppliers and our financial results
5. 43When we provide engineering services we are subject to various local, state and federal rules and regulations which can increase our potential liability
6. 44Any issuance of preferred stock may dilute your investment and reduce funds available for dividends
7. 45Provisions in our amended and restated certificate of incorporation and bylaws or Delaware law might discourage, delay or prevent a change in control of our company or changes in our management
8. 46If we were required to write down all or part of our goodwill or other indefinite-lived intangible assets, our results of operations or financial condition could be materially adversely affected in a particular period