What the changes say
- Valvoline's risk profile centers on executing aggressive store growth and refranchising, managing variable-rate debt and upcoming acquisitions like Breeze Autocare, and maintaining product supply agreements with VGO following the Global Products segment sale.
What changed since the prior 10-K
New
- NewRisks related to executing Valvoline’s strategy
and implement digital platforms to support the Company’s growth initiatives, failure to comply with existing or new regulatory requirements, failure to maintain a competitive cost structure and other risks outlined in greater detail in this “Risk Factors” section
Refranchising activities and guaranteed lease commitments for refranchised stores create potential liabilities if franchisees default or fail to grow.
- NewRegulatory, legal, and financial risks
increases in interest rates since some of its indebtedness is subject to variable rates of interest; and making it more difficult for Valvoline to satisfy its financial obligations
Variable interest rates on indebtedness and potential difficulties in generating sufficient cash flow could lead to debt defaults or refinancing challenges.
- NewRegulatory, legal, and financial risks
protection and enforcement of such intellectual property. Valvoline also relies on a combination of laws and contractual restrictions with employees, customers, suppliers, affiliates and others, to establish and protect its various intellectual property rights
Inadequate protection of intellectual property or third-party infringement claims could erode the value of Valvoline's brands.
- NewRegulatory, legal, and financial risks
Corporation Act, or any action asserting a claim governed by the internal affairs doctrine. This exclusive forum provision does not apply to suits brought to enforce any duty or liability created by the Securities Exchange Act of 1934, as amended, (“Exchange Act”) or by the Securities Act of 1933, as amended
An exclusive forum provision designating Kentucky courts may discourage shareholder lawsuits or increase litigation costs.
- NewRisks related to the sale of the Global Products business
Valvoline is dependent on VGO for its product supply and certain indemnities have been agreed to with the Buyer, for which the Company may be negatively impacted if VGO is unable to provide these products or is unable to satisfy its indemnification obligations
Valvoline relies on VGO for substantially all lubricant and ancillary product supplies and is exposed to potential indemnification and tax liabilities.
Dropped
- DroppedRisks related to operating Valvoline's business
possible continued disruptions. This includes the loss of information, unauthorized access and systematic changes, disruption to normal operations, and risks associated with integrations with other applications and processes
- DroppedRegulatory, legal, and financial risks
credit facility. Valvoline may incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other general corporate purposes
- DroppedRegulatory, legal, and financial risks
disposal, notwithstanding that the original treatment or disposal activity accorded with all applicable regulatory requirements
Reworded
- 95% rewrittenRegulatory, legal, and financial risks
Valvoline’s substantial indebtedness may adversely affect its business, results of operations and financial condition
Updated outstanding indebtedness figures to $1.074 billion as of September 30, 2025, and added expected borrowings of $740 million to fund the Breeze Autocare acquisition.
- 86% rewrittenRegulatory, legal, and financial risks
Valvoline may fail to adequately protect its intellectual property rights or may be accused of infringing the intellectual property rights of third parties
Truncated the risk description regarding trademark and intellectual property protection and enforcement.
- 78% rewrittenRisks related to the sale of the Global Products business
Valvoline may be unable to achieve some or all of the strategic and financial benefits that it expects to achieve from the Transaction
Removed historical net proceeds figures of $2.383 billion from the Global Products sale and added specific assumptions regarding economic conditions and IT infrastructure separation.
- 71% rewrittenRisks related to executing Valvoline’s strategy
Valvoline has set aggressive growth goals for its business, including increasing sales, cash flow, market share, margins and number of service center stores, to achieve its long-term strategic objectives. Execution of Valvoline’s growth strategies and business plans to facilitate that growth involves a number of risks
Retained the core risk regarding aggressive growth goals and real estate challenges with minor stylistic edits.
- 70% rewrittenRisks related to operating Valvoline's business
The Company’s enterprise resource planning (“ERP”) system implemented in fiscal 2024 adversely impacted Valvoline’s internal controls and could continue to negatively impact the business if remedial efforts are not effectively maintained
Updated past tense phrasing regarding the implementation of the new ERP application following the Global Products sale.
Was: The Company’s recently implemented enterprise resource planning (“ERP”) system has adversely impacted Valvoline’s internal controls and could continue to negatively impact the business if remedial efforts are not timely and effective
- 43% rewrittenRisks related to the industries in which Valvoline operates
Rising and volatile supply costs and supply chain constraints or disruptions could adversely affect Valvoline’s results of operations
Added a concluding sentence noting that higher product and supply costs could reduce profits for both company-operated and franchised stores.
- 37% rewrittenRisks related to executing Valvoline’s strategy
Valvoline may be unable to execute its growth strategy, and acquisitions, investments and strategic partnerships could result in operating difficulties, dilution and other harmful consequences that may adversely impact Valvoline’s business and results of operations
Reordered sentences within the acquisition strategy risk to place the pipeline discussion before marketplace target limitations.
- 31% rewrittenRegulatory, legal, and financial risks
Valvoline has incurred, and will continue to incur, costs as a result of Environmental Health and Safety (“EHS”) compliance requirements, which could adversely impact Valvoline’s cash flow, results of operations or financial condition
Retained environmental health and safety compliance requirements and potential costs with identical core text.
- 21% rewrittenRegulatory, legal, and financial risks
Adverse developments and instability in financial institutions and markets may adversely impact Valvoline’s business and financial condition
All 28 risk factors
Headings as the filing states them, in filing order.
Risks related to the industries in which Valvoline operates
- 01Valvoline faces significant competition from other companies, which places downward pressure on prices and margins and may adversely affect Valvoline’s business and results of operations
- 02Rising and volatile supply costs and supply chain constraints or disruptions could adversely affect Valvoline’s results of operations43% rewritten
- 03Demand for Valvoline’s services could be adversely affected by spending trends, declining economic conditions, industry trends and a number of other factors, all of which are beyond its control
- 04Failure to develop and market new services and technologies could impact Valvoline’s competitive position and have an adverse effect on its business and results of operations
- 05Damage to Valvoline’s brand and reputation could have an adverse effect on its business
Risks related to executing Valvoline’s strategy
- 06Valvoline has set aggressive growth goals for its business, including increasing sales, cash flow, market share, margins and number of service center stores, to achieve its long-term strategic objectives. Execution of Valvoline’s growth strategies and business plans to facilitate that growth involves a number of risks71% rewritten
- 07and implement digital platforms to support the Company’s growth initiatives, failure to comply with existing or new regulatory requirements, failure to maintain a competitive cost structure and other risks outlined in greater detail in this “Risk Factors” sectionNew
- 08Valvoline may be unable to execute its growth strategy, and acquisitions, investments and strategic partnerships could result in operating difficulties, dilution and other harmful consequences that may adversely impact Valvoline’s business and results of operations37% rewritten
- 09The business model for Valvoline is affected by the financial results of its franchisees
Risks related to operating Valvoline's business
- 10The Company’s enterprise resource planning (“ERP”) system implemented in fiscal 2024 adversely impacted Valvoline’s internal controls and could continue to negatively impact the business if remedial efforts are not effectively maintained70% rewritten
- 11Changes in economic conditions that impact customer spending could harm Valvoline’s business
- 12If Valvoline does not attract, train and retain quality employees in appropriate numbers, including key employees and management, performance could be adversely affected
- 13Valvoline uses information technology systems to conduct business, and a cybersecurity threat, data breach, security incident, failure of a key information technology system, or inability to enhance its capabilities could adversely affect Valvoline’s business and reputation
- 14Pandemics, epidemics or disease outbreaks may disrupt Valvoline’s business and operations, which could materially affect Valvoline’s financial condition, results of operations and forward-looking expectations
- 15The limited diversification of Valvoline’s operations subjects it to risks
Regulatory, legal, and financial risks
- 16Data protection requirements could increase operating costs and requirements and a breach in information privacy or other related risks could negatively impact operations
- 17The impact of changing laws or regulations or the manner of interpretation or enforcement of existing laws or regulations could adversely impact Valvoline’s financial performance and restrict its ability to operate its business or execute its strategies
- 18Valvoline’s substantial indebtedness may adversely affect its business, results of operations and financial condition95% rewritten
- 19increases in interest rates since some of its indebtedness is subject to variable rates of interest; and making it more difficult for Valvoline to satisfy its financial obligationsNew
- 20Adverse developments and instability in financial institutions and markets may adversely impact Valvoline’s business and financial condition21% rewritten
- 21Valvoline’s pension and other postretirement benefit plan obligations are currently underfunded, and Valvoline may have to make significant cash payments to some or all of these plans, which would reduce the cash available for its business
- 22Valvoline may fail to adequately protect its intellectual property rights or may be accused of infringing the intellectual property rights of third parties86% rewritten
- 23protection and enforcement of such intellectual property. Valvoline also relies on a combination of laws and contractual restrictions with employees, customers, suppliers, affiliates and others, to establish and protect its various intellectual property rightsNew
- 24Valvoline has incurred, and will continue to incur, costs as a result of Environmental Health and Safety (“EHS”) compliance requirements, which could adversely impact Valvoline’s cash flow, results of operations or financial condition31% rewritten
- 25Corporation Act, or any action asserting a claim governed by the internal affairs doctrine. This exclusive forum provision does not apply to suits brought to enforce any duty or liability created by the Securities Exchange Act of 1934, as amended, (“Exchange Act”) or by the Securities Act of 1933, as amendedNew
Risks related to the sale of the Global Products business
- 26Valvoline may be unable to achieve some or all of the strategic and financial benefits that it expects to achieve from the Transaction78% rewritten
- 27Valvoline is dependent on VGO for its product supply and certain indemnities have been agreed to with the Buyer, for which the Company may be negatively impacted if VGO is unable to provide these products or is unable to satisfy its indemnification obligationsNew
Risks related to Valvoline’s separation from Ashland
- 28Ashland has agreed to indemnify Valvoline for certain liabilities. However, there can be no assurance that the indemnity will be sufficient to insure Valvoline against the full amount of such liabilities, or that Ashland’s ability to satisfy its indemnification obligation will not be impaired in the future
Other Valvoline 10-Ks
- FY2024 10-K risk factors26 risks
Valvoline operates as a standalone retail service business following the sale of its Global Products segment, carrying $1.094 billion in debt and an underfunded pension of $51.5 million. Growth relies heavily on new store openings, aggressive franchising, and the stability of recently implemented enterprise resource planning systems.
Filed Nov 22, 2024
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.