Flex (FLEX)

Risks

• Our customers may cancel their orders, change production quantities or locations, or delay production, any of which could harm our business; the short-term nature of our customers’ commitments and rapid changes in demand may cause supply chain and other issues which could adversely affect our operating results.
• A significant percentage of our sales come from a small number of customers and a decline in sales to any of these customers could adversely affect our business.
• Supply chain disruptions, manufacturing interruptions or delays, or the failure to accurately forecast customer demand, could affect our ability to meet customer demand, lead to higher costs, or result in excess or obsolete inventory. We have been and continue to be adversely affected by supply chain issues, including shortages of required electronic components.
• The ongoing COVID-19 pandemic has materially and adversely affected our business and results of operations. The duration and extent to which it will continue to adversely impact our business and results of operations remains uncertain and could be material.
• Our components business is dependent on our ability to quickly launch world-class component products, and our investment in the development of our component capabilities, together with start-up and integration costs, may adversely affect our margins and profitability.
• Our margins and profitability may be adversely affected due to substantial investments, start-up and production ramp costs in our design services.
• If we do not effectively manage changes in our operations, our business may be harmed; we have taken substantial restructuring charges in the past and we may need to take material restructuring charges in the future.
• A breach of our IT or physical security systems, or violation of data privacy laws, may cause us to incur significant legal and financial exposure.
• Our strategic relationships with major customers create risks.
• We may encounter difficulties with acquisitions and divestitures, which could harm our business.
• We are pursuing alternatives for our Nextracker business, including a full or partial separation of the business, through an initial public offering of Nextracker or otherwise, which may not be consummated as or when planned or at all, and may not achieve the intended benefits.
• Our operating results may fluctuate significantly due to seasonal demand.
• We depend on our executive officers and skilled personnel.
• Catastrophic events could have a material adverse effect on our operations and financial results.
• Our business could be adversely affected by any delays, or increased costs, resulting from issues that our common carriers are dealing with in transporting our materials, our products, or both.
• We depend on industries that continually produce technologically advanced products with short product lifecycles and our business would be adversely affected if our customers' products are not successful or if our customers lose market share.
• Our industry is extremely competitive; if we are not able to continue to provide competitive services, we may lose business.
• Our goodwill and identifiable intangible assets could become impaired, which could reduce the value of our assets and reduce our net income in the year in which the write-off occurs.
• Our debt level may create limitations.
• Our exposure to financially troubled customers or suppliers may adversely affect our financial results.
• The market price of our ordinary shares is volatile.
• We are subject to risks associated with investments.
• Changes in financial accounting standards or policies have affected, and in the future may affect, our reported financial condition or results of operations.
• We conduct operations in a number of countries and are subject to the risks inherent in international operations.
• Fluctuations in foreign currency exchange rates could increase our operating costs.
• Legal and Regulatory Risks
• We are subject to risks relating to litigation and regulatory investigations and proceedings, which may have a material adverse effect on our business.
• If our compliance policies are breached, we may incur significant legal and financial exposure.
• If our products or components contain defects, demand for our services may decline and we may be exposed to product liability and product warranty liability.
• We are subject to the risk of increased income taxes.
• We may not meet regulatory quality standards applicable to our manufacturing and quality processes for medical devices, which could have an adverse effect on our business, financial condition or results of operations.
• Our failure to comply with environmental laws could adversely affect our business.
• Failure to comply with domestic or international employment and related laws could result in the payment of significant damages, which would reduce our net income.
• Our business could be impacted as a result of actions by activist shareholders or others.
• Social and environmental responsibility policies and provisions may be difficult to comply with and may impose costs on us. Increasing attention on environmental, social and governance (ESG) matters may have a negative impact on our business, impose additional costs on us, and expose us to additional risks.
• Climate change, and the legal and regulatory initiatives related to climate change, could adversely affect our business, results of operations and financial condition.
• The success of certain of our activities depends on our ability to protect our intellectual property rights; claims of infringement or misuse of intellectual property and/or breach of license agreement provisions against our customers or us could harm our business.