RBC Regal Beloit Corp.

Risks

• We expect to incur costs and charges as a result of restructuring activities such as facilities and operations consolidations and workforce reductions that we expect will reduce on-going costs, and those restructuring activities also may be disruptive to our business and may not result in anticipated cost savings.
• We operate in the highly competitive global electric motors and controls, power generation and power transmission industries.
• Our ability to establish, grow and maintain customer relationships depends in part on our ability to develop new products and product enhancements based on technological innovation, such as IoT, and marketplace acceptance of new and existing products, including products related to technology not yet adopted or utilized in certain geographic locations in which we do business.
• Our dependence on, and the price of, raw materials may adversely affect our gross margins.
• In each of our Climate Solutions and Commercial Systems segments, we depend on revenues from several significant customers, and any loss, cancellation or reduction of, or delay in, purchases by these customers may have a material adverse effect on our business.
• We manufacture a significant portion of our products outside the US, and political, societal or economic instability or public health crises may present additional risks to our business.
• Goodwill and an indefinite-lived trade name intangible comprise a significant portion of our total assets, and if we determine that goodwill and the indefinite-lived trade name intangible have become impaired in the future, our results of operations and financial condition in such years may be materially and adversely affected.
• Portions of our total sales come directly from customers in key markets and industries. A significant or prolonged decline or disruption in one of those markets or industries could result in lower capital expenditures by such customers, which could have a material adverse effect on our results of operations and financial condition.
• We sell certain products for high volume applications, and any failure of those products to perform as anticipated could result in significant liability and expenses that may adversely affect our business and results of operations.
• We are subject to litigation, including product liability and warranty claims that may adversely affect our financial condition and results of operations.
• Our business may not generate cash flow from operations in an amount sufficient to enable us to service our indebtedness or to fund our other liquidity needs, we could become increasingly vulnerable to general adverse economic and industry conditions and interest rate trends, and our ability to obtain future financing may be limited.
• Changes in the method of determining LIBOR, or the replacement of LIBOR with an alternative reference rate, may adversely affect interest expense related to our outstanding debt.
• We depend on certain key suppliers, and any loss of those suppliers or their failure to meet commitments may adversely affect our business and results of operations.
• We may encounter difficulties in integrating the operations of acquired businesses which may have a material adverse impact on our future growth and operating performance.
• We may be adversely impacted by an inability to identify and complete acquisitions.
• Infringement of our intellectual property by third parties may harm our competitive position, and we may incur significant costs associated with the protection and preservation of our intellectual property.
• Third parties may claim that we are infringing their intellectual property rights and we could incur significant costs and expenses or be prevented from selling certain products.
• We may suffer losses as a result of foreign currency fluctuations.
• Businesses that we have acquired or that we may acquire in the future may have liabilities which are not known to us.
• Commodity, currency and interest rate hedging activities may adversely impact our financial performance as a result of changes in global commodity prices, interest rates and currency rates.
• We may incur costs or suffer reputational damage due to improper conduct of our associates, agents or business partners.
• Sales of products incorporated into HVAC systems and other residential applications are seasonal and affected by the weather; mild or cooler weather could have an adverse effect on our operating performance.
• Divestitures of some of our businesses or product lines may have a material adverse effect on our results of operations, financial position and cash flows.
• Our success is highly dependent on qualified and sufficient staffing. Our failure to attract or retain qualified personnel, including our senior management team, could lead to a loss of revenue or profitability.
• Our operations are highly dependent on information technology infrastructure, and failures, attacks or breaches could significantly affect our business.
• Worldwide economic conditions may adversely affect our industry, business and results of operations.
• We may be adversely affected by environmental, health and safety laws and regulations.
• Our operations can be negatively impacted by natural disasters, terrorism, acts of war, international conflict, political and governmental actions which could harm our business.
• We are subject to changes in legislative, regulatory and legal developments involving income and other taxes.
• We are subject to tax laws and regulations in many jurisdictions and the inability to successfully defend claims from taxing authorities related to our current and/or acquired businesses could adversely affect our operating results and financial position.
• Our stock may be subject to significant fluctuations and volatility.