What Changed
Risk factors · Nov 22, 2024 → Nov 21, 202579 added · 4 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
- For example, on April 2, 2025, the U.S. government announced a 10% tariff on product imports from almost all countries and individualized higher tariffs on certain other countries.
- In addition, on February 13, 2025, Tesla filed an additional complaint against the Company in the United States District Court for the Northern District of California alleging, in part, claims related to correction of inventorship, breach of contract, promissory estoppel and quasi-contract/restitution arising from and/or related to various U.S. patents and provisional patents, including but not limited to U.S.
- RISK FACTORS, (continued) In addition, like all joint ventures, this one involves a number of specific risks and challenges, including but not limited to the following: • Joint ventures require significant managerial attention, which may be diverted from the Company’s other operations • The Company is subject to customary restrictions on the transfer of its equity interests, limiting the Company's ability to dispose of its equity interests in Propelis. • If there is a change in ownership, a change of control, a change in management or management philosophy, a change in business strategy or another event with respect to the Company’s joint venture partner, it could adversely impact the joint venture and, therefore, adversely impact the Company. • The Company’s joint venture partner may fail to satisfy contractual obligations. • Conflicts may arise with the Company’s joint venture partner, related to, for example, the scope of the respective rights, responsibilities and obligations of each party in the joint venture. • The Company’s joint venture partner may be unable or unwilling to support actions that the Company believes are in the best interests of the joint venture or may have economic or business interests or goals that are inconsistent with the Company’s interests.
- For example, since taking office, the current administration of the U.S. government has sought to adopt new regulations and policies and to suspend, revise or rescind prior policies that are identified as conflicting with the administration’s position, which has resulted in increased regulatory uncertainty.
- While several tariff announcements have been followed by announcements of limited exemptions and temporary pauses, global trade disruption, significant introductions of trade barriers and bilateral trade frictions, together with any future downturns in the global economy resulting therefrom, could further materially and adversely affect the Company's financial performance.
- If the Company becomes engaged in a proxy contest with an activist shareholder in the future, the Company's business could be adversely affected because: responding to public proposals and director nominations, special meeting requests and other actions by activist shareholders can disrupt the Company's operations, be costly and time-consuming, and divert the attention of the Company's management and employees; perceived uncertainties as to the Company's future direction may result in the loss of potential business opportunities, and may make it more difficult to attract and retain qualified personnel and business partners; cause an event of default under the Company's credit facilities or other agreements due to a change in control (i) if either the Company sustains a series of successful proxy contests or, (ii) if the Company's shareholders approve an amendment to the Company's Amended and Restated Articles of Incorporation to declassify the Company's Board of Directors and following such amendment a shareholder successfully engages in a proxy contest; and 16 ITEM 1A.
- See “Anti-takeover Effect of the Company’s Governing Documents and Pennsylvania Business Corporation Law” included in the Description of Securities filed as Exhibit 4.4 to this Annual Report on Form 10-K for a description of such provisions.
- Notwithstanding such shifts, failure to comply with such laws and regulations or the occurrence of unforeseen developments such as litigation, investigations, governmental proceedings or enforcement actions could adversely affect the Company's business.
- On May 1, 2025, the Company contributed the vast majority of its Brand Solutions segment to a newly-formed entity, Propelis, in exchange for (i) 40% of the common equity of Propelis, (ii) certain preferred equity interests in Propelis, and (iii) cash consideration.
- Even if these matters do not result in litigation or are resolved in the Company's favor or without significant cash settlements, the time and 14 ITEM 1A.
- The Company accounts for the Company's 40% interest in Propelis using the equity method of accounting on a three-month lag basis, which impacts the quarterly and fiscal year timing of when Propelis' results and synergies are reflected in the equity income from Propelis included in the Company's financial statements.
- In addition, there may be increased risk of securities litigation following periods of fluctuations in the Company's stock price.
No longer disclosed
- Even if these matters do not result in litigation or are resolved in the Company's favor or without significant cash settlements, the time and resources necessary to resolve them could adversely affect the Company's business, reputation, financial condition and operating results.
- See also "The Company faces additional global supply chain risks and risks of interruption of requisite logistics and transportation services, including as a result of the Company's reliance on limited suppliers and vendors for certain components, materials, and services." Due to the uncertainty relating to a pandemic or similar outbreak, the Company, its customers or its suppliers may be required, or believe that it is advantageous, to take precautionary measures intended to minimize the risk of a virus or disease spreading to employees, customers, and the communities in which they operate, and these measures could negatively impact the Company’s business.
- Borrowings under the Company’s credit facilities, including the domestic credit facility, are subject to variable rates of interest and expose the Company to interest rate risk.
- The SGK Brand Solutions businesses serve global customers that are requiring their suppliers to be global in scope and price-competitive.