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What Changed
Risk factors · May 21, 2025 → May 27, 2026
54 added · 26 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
Further, the pending transaction will require significant time and attention from management, which could detract from other business concerns. In addition, potential shareholder litigation in connection with the pending transaction or other litigation, settlements or investigations may affect the timing or occurrence of the pending transaction or result in significant costs of defense, indemnification and liability. We may be unable to achieve some or all of the anticipated benefits from the pending Reverse Morris Trust transaction with Gentherm. We may not achieve the financial and operational benefits expected from the pending Reverse Morris Trust transaction.
The transaction might not provide us and our shareholders benefits or value in excess of what might have been realized had we retained the Performance Technologies segment businesses or undertaken a different strategic alternative. Following the spin-off and merger with Gentherm, our remaining company will be less diversified, with a more concentrated focus on the data center and commercial HVAC&R markets.
Following the merger, the combined company could face difficulties in integrating the businesses, or the combined company could experience difficulties or delays in achieving anticipated revenue and cost synergies or other expected operational and financial benefits.
We began experiencing supply shortages of certain data center product components in the fourth quarter of fiscal 2026, which are negatively impacting our production schedules for the first quarter of fiscal 2027.
Information technology (“IT”) systems We may be adversely affected by a substantial disruption in, or material breach of, our IT systems or IT systems of our service providers.
Supreme Court ruled that tariffs imposed in 2025 under the International Emergency Economic Powers Act were invalid (the “IEEPA Ruling”).
We expect to sell more than $4 billion of data center cooling products to this customer during calendar years 2027 through 2029.
Geopolitical tensions and military conflicts, including the conflict between the U.S. and Iran, as well as related regional instability or proxy conflicts, could negatively impact or cause significant business disruptions in the global markets we operate in.
Ongoing conflicts and any potential further escalation, could lead to significant disruption near major oil producing regions or in shipping corridors and could result in higher energy and fuel prices, shipping delays, increased freight and manufacturing costs, and increased cyberattacks from state-sponsored or other actors.
Such developments could also contribute to broader inflationary pressures across the global economy and supply chains, including increased costs for materials, transportation and labor, which may not be fully recoverable through pricing and could impact the availability, reliability, and overall viability of certain supply sources.
Prolonged recessionary or adverse economic conditions, such as disruptions in the global financial system, could result in our customers or suppliers experiencing significant economic constraints, including potential bankruptcies. 13 Table of Contents Changes in U.S. or international trade policies, including the imposition of or increases in tariffs, could adversely affect our business, financial position, results of operations and cash flows.
There is also uncertainty with regard to the IEEPA Ruling, including the availability and timing of refunds, the potential for new tariffs to be invoked under alternative laws, the impacts on trade agreements between the U.S. and other countries, and the expectations of customers, suppliers, and others impacted by the tariffs.
No longer disclosed
For example, under the current U.S. administration, there is uncertainty in the marketplace regarding future federal funding related to electrification, and in particular, the adoption of electric vehicles.
Additional risks related to international trade policies and related matters are discussed throughout this section. 13 Table of Contents A future widespread outbreak of an illness or other public health threat could adversely affect our business, financial position, results of operations and cash flows.
We could also face indirect financial risks passed through the supply chain, and process disruptions due to climate changes could result in price modifications for our products and the resources needed to produce them. 15 Table of Contents Furthermore, customer, investor, and employee expectations for ESG matters have been rapidly evolving.
There can be no assurance of the extent to which any of our future goals will be achieved, or that any investments we make in furtherance of achieving any such plans, targets, goals or other commitments will meet regulatory or legal standards regarding sustainability performance or any customer, investor, employee or other stakeholder expectations and desires regarding such goals or commitments.
Additionally, the enhanced stakeholder focus on ESG matters requires the continuous monitoring of evolving expectations, tolerances, and standards, as well as reporting requirements and disclosures associated with ESG-related goals and initiatives.
Moreover, we may determine that it is in the best interest of the Company and our shareholders to prioritize other business investments over the achievement of our current ESG goals based on economic or technological developments, regulatory and social factors, business strategy or pressure from investors, activists, or other stakeholders.
In addition, compliance with multiple and often conflicting laws and regulations of various countries can be challenging and expensive. 16 Table of Contents We employ a global workforce, attracting talent from across the globe and employing leaders to manage our sales and production operations across multiple countries.
This includes ramping up and maintaining adequate production capacity to meet demand in our growing businesses, while also completing restructuring activities, including targeted headcount reductions and product line transfers, in order to optimize our manufacturing footprint and cost structure, particularly in light of changes in our mix of business and in areas where we are strategically refraining from further investments.
Changes in or shifts in the adoption rate of technologies or products that we expect to drive future sales growth, including technology related to electric vehicles, could adversely affect our results of operations and financial condition.
Customer and supplier matters Increases in costs of materials, including aluminum, copper, steel and stainless steel (nickel), other raw materials and purchased components, could place significant pressure on our results of operations.
Increased public awareness and concern regarding links between greenhouse gas emissions and global climate changes may result in more regional and/or federal requirements to reduce or mitigate the effects of greenhouse gas emissions.
Prolonged recessionary or adverse economic conditions, such as disruptions in the global financial system, could result in our customers or suppliers experiencing significant economic constraints, including potential bankruptcies.