36 added · 16 removed between the two most recent 10-Ks. The risks a company starts — or stops — disclosing are often the story.
Newly disclosed
The use of AI-based solutions by our business partners could lead to the public disclosure of confidential and proprietary business information (including personal data) in contravention of our policies, contractual requirements and applicable data protection laws.
If we fail to maintain effective internal controls, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our securities may be negatively affected, and we could be subject to sanctions or investigation by regulatory authorities, such as the SEC or NYSE.
As a public company, we are required to comply with Section 404 of the Sarbanes Oxley Act of 2002 (“SOX”), which requires, among other things, that companies maintain disclosure controls and procedures to ensure timely disclosure of material information, and that management reviews the effectiveness of those controls on a quarterly basis.
During fiscal year 2025, we identified a material weakness in our internal control over financial reporting related to information technology general controls at our Nissens Automotive operating segment, which we acquired in November 2024.
The 2024 Credit Agreement matures on September 16, 2029 and provides for an approximately $750 million credit facility, comprised of (i) a $430 million multi-currency revolving credit facility ("global tranche");
Furthermore, if we do not invest in or effectively use AI capabilities, or if competitors leverage these technologies more successfully, our competitive position could suffer.
Depending upon the level of sales of receivables pursuant these agreements, the effect of a hypothetical, instantaneous and unfavorable change of 100 basis points in the margin rate may have an approximate $9.8 million negative impact on our earnings or cash flows.
The use of AI tools by our customers, suppliers and business partners may also increase our vulnerability to cybersecurity incidents.
Furthermore, we cannot be certain that we will be able to maintain adequate controls over our financial processes and reporting in the future or that we will be able to comply with our obligations under Section 404 of SOX.
Furthermore, artificial intelligence ("AI") technologies are increasingly being used in our industry.
In 2025, t hree customers each accounted for more than 10% of our consolidated net sales at 25.2% , 18.6% and 10.5%, respectively.
Furthermore, non-conformities that affect motor vehicle safety or compliance with applicable motor vehicle safety standards or guidelines, or non-conformities in products sold to original equipment manufacturers or their tier suppliers or system integrators could result in significant costs and lost sales, investigations and/or enforcement actions by state and federal governments, as well as negative publicity and damage to our reputation that could reduce future demand for our products.
No longer disclosed
We have not experienced a material cybersecurity incident in 2024, but we cannot guarantee that there 17 Index will be no future cybersecurity incident that causes a material adverse effect on our information systems, or that of our customers, suppliers and other business partners.
The 2024 Credit Agreement provides for senior secured borrowings of up to approximately $750 million, consisting of a $430 million multi-currency revolving credit facility (global tranche), a $10 million multi-currency revolving credit facility (Danish tranche), a $200 million delayed draw term loan facility, and a 100 million euros delayed draw term loan facility.
We are currently monitoring our environmental remediation efforts at one of our facilities and our reserve balance related to the environmental clean-up at this facility is $1.7 million at December 31, 2024.
We recorded a $7 million pre-tax charge in 2022 to reduce our outstanding accounts receivable balance from a customer that filed for bankruptcy in the first quarter of 2023 to our estimated recovery amount.
Depending upon the level of sales of receivables pursuant these agreements, a hypothetical, instantaneous and unfavorable change of 100 basis points in the reference rate may have an approximate $8.8 million negative impact on our earnings or cash flows. 19 Index A significant increase in our indebtedness, or in interest rates, could negatively affect our financial condition, results of operations and cash flows.
During 2024 , O’Reilly Auto Parts, AutoZone and NAPA accounted for 28.4% , 18.8% and 13.5% of our consolidated net sales, respectively.
Failure to achieve the benefits of our cost saving initiatives could have a material adverse effect on us. 16 Index Severe weather, natural disasters and other disruptions could adversely impact our operations at our manufacturing and distribution facilities.
In the event that our information systems, or the systems of our customers, suppliers or business partners, are subject to such incidents, we could experience errors, interruptions, delays, and/or the cessation of services in key portions of our information systems.
The foregoing matters could also cause significant damage to our business reputation, affect our relationships with our business partners, lead to claims against us, and/or subject us to fines or other penalties assessed by governmental authorities.
In our Engineered Solutions business, our supply agreements with our customers are generally requirements contracts, and a decline in the production requirements of any of our significant customers could adversely impact our revenues and profitability. 18 Index In our Engineered Solutions business, our customers generally agree to purchase their requirements for specific products, and we receive volume forecasts of their requirements, but not long-term firm volume commitments.
If we do not respond appropriately to changes in automotive technologies, such as the adoption of new technologies and systems to make traditional, internal-combustion-engine vehicles more efficient, or the adoption of electric or hybrid electric vehicle architectures, we could experience less demand for our products thereby causing a decline in our results of operations or deterioration in our business and financial condition, and we may have a material adverse effect on our long-term performance.
Our three largest individual customers accounted for approximately 60.7% of our consolidated net sales in 2024 .