Stoneridge (SRI)

Risks

• Our business is cyclical and a downturn in the automotive, commercial, off-highway and agricultural vehicle markets as well as overall economic conditions could reduce our sales and profitability.
• The loss or insolvency of any of our principal customers would adversely affect our future results.
• We must implement and sustain a competitive technological advantage in producing our products to compete effectively.
• The discontinuation of, loss of business or lack of commercial success, with respect to a particular vehicle model for which the Company is a significant supplier could reduce the Company’s sales and harm its profitability.
• We have foreign currency translation and transaction risks that may materially adversely affect our operating results, financial condition and liquidity.
• Our debt obligations could limit our flexibility in managing our business and expose us to risks.
• Covenants in our Credit Facility may limit our ability to pursue our business strategies.
• Our annual effective tax rate could be volatile and materially change as a result of changes in the mix of earnings and other factors including changes in the recognition and/or release of valuation allowances against deferred tax assets.
• We are dependent on the availability and price of raw materials and other supplies.
• The prices that we can charge our customers are typically predetermined and we bear the risk of costs in excess of our estimates, in addition to the risk of adverse effects resulting from general customer demands for cost reductions and quality improvements.
• We have limited or no redundancy for certain of our manufacturing facilities, and therefore damage or disruption to those facilities could interrupt our operations, increase our costs of doing business and impair our ability to deliver our products on a timely basis.
• We rely on independent dealers and distributors to sell certain products in the aftermarket sales channel and a disruption to this channel would harm our business.
• Our Global Positioning Systems (“GPS”) products depend upon satellites maintained by the United States Department of Defense. If a significant number of these satellites become inoperable, unavailable or are not replaced, or if the policies of the United States government for the use of the GPS without charge are changed, our business will suffer.
• We are subject to risks related to our international operations.
• Our inability to effectively manage the timing, quality and costs of new program launches could adversely affect our financial performance.
• We may not be able to successfully integrate acquisitions into our business or may otherwise be unable to benefit from pursuing acquisitions.
• Increased or unexpected product warranty claims could adversely affect us.
• We may incur material product liability costs.
• If we fail to protect our intellectual property rights or maintain our rights to use licensed intellectual property or are found liable for infringing the rights of others, our business could be adversely affected.
• A failure of our information technology (IT) networks and systems, or the inability to successfully implement upgrades to our enterprise resource planning (ERP) systems, could adversely impact our business and operations.
• We may be subject to risks relating to our information technology systems and cybersecurity.
• Privacy and security concerns relating to the Company’s current or future products and services could damage its reputation and deter current and potential users from using them.
• Compliance with environmental and other governmental regulations could be costly and require us to make significant expenditures.