Valmont Industries (VMI) risk factors, FY2024 10-K

Other

1. 01Economic and Business Risks
2. 02The ultimate consumers of our products operate in cyclical industries, which have experienced significant downturns that have adversely impacted our sales in the past and may do so again in the future
3. 03Changes in prices and reduced availability of key commodities such as steel, aluminum, zinc, natural gas, and fuel may increase our operating costs, likely reducing our net sales and profitability
4. 04Increases in the selling prices of our products may not fully recover higher commodity costs and generally lag increases in these costs. Consequently, an increase in commodity prices will increase our operating costs and likely reduce our profitability
5. 05Demand for our infrastructure products, including coating services, is highly dependent on overall infrastructure spending
6. 06We are subject to currency fluctuations from our international sales, which can negatively impact our reported earnings

Legal and Regulatory Risks

1. 07Our operations are subject to trade policies, tariffs, and trade agreements, and any further changes could adversely affect our business, potentially leading to a decline in sales and profits or the loss of certain foreign investments
2. 08Failure to comply with anti-corruption laws could result in fines, criminal penalties, and harm to our business
3. 09We could incur substantial costs due to violations of, or liabilities under, environmental laws
4. 10Failure to successfully commercialize or protect our intellectual property rights may materially impact our business, financial condition, and operating results
5. 11We have been, and may continue to be, involved in litigation or threatened litigation, the outcomes of which can be difficult to predict. These matters can be costly to defend, divert management’s attention, require payment of damages, or restrict our business operations
6. 12Design patent litigation related to guardrails could reduce demand for these products and increase litigation risk
7. 13We have, from time to time, maintained a substantial amount of outstanding indebtedness, which could impair our ability to operate our business, respond to changes in our operations, comply with debt covenants, and make debt payments
8. 14We assumed an underfunded pension liability as part of the fiscal 2010 acquisition of Delta Ltd., which may require increased funding and impose restrictions on excess cash usage

General Risks

1. 15Our businesses rely on skilled labor and management talent, and we may face challenges in attracting and retaining qualified employees
2. 16We face strong competition in the markets we serve
3. 17We may not achieve the improved operating results we anticipate from future acquisitions, and we may face difficulties integrating the acquired businesses or inherit significant liabilities associated with them
4. 18We may incur significant warranty or contract management costs
5. 19Our operations could be adversely affected if our information technology systems and networks are compromised or subjected to cyberattacks
6. 20Regulatory and business developments related to climate change could adversely affect our operations and the demand for our products. We closely monitor scientific discussions and legislative developments regarding climate change, including proposed regulations, to assess their potential impact on our business
7. 21Climate change also presents physical risks, such as the increased frequency of severe weather events and rising sea levels, which could disrupt operations at our manufacturing facilities. These events may cause unforeseen disruptions of systems, equipment, or overall operations
8. 22We may encounter challenges in quickly adjusting our manufacturing capacity to respond to sudden shifts in demand for Infrastructure products