We make forward-looking statements, and actual events or results may differ materially from these statements because assumptions we have made prove incorrect due to market conditions in our industries or other factors.
We provide forward-looking statements both in our filings with the SEC and orally in connection with our quarterly earnings calls, and other events and presentations, including guidance on anticipated sales growth and earnings per share. Our actual results or performance may be materially different than reflected in forward-looking statements because of various risks and uncertainties.
Our forward-looking statements may not be accurate or complete, and we do not intend to update or revise them in light of actual results. New risks also periodically arise. Please consider the risks and factors that could cause our results to differ materially from what is described in our forward-looking statements. See in particular “Factors Affecting Our Future Operating Results” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
In providing guidance on our future earnings, we evaluate our budgets, strategic plans, and other factors relating to our business. We make assumptions about external factors, including the following:
- the outlook for our end markets and the global economy;
- the level of U.S. import tariffs, as well as the impact of retaliatory tariffs from other countries
- the impact of external factors on our competition;
- the financial position of our customers and their willingness to pay for our products and services;
- the estimated costs of purchasing materials;
- the estimated costs and performance of transportation and logistics, including third-party service providers;
- developments in personnel costs;
- our estimated income tax expense; and
- rates for currency exchange, particularly between the Chinese renminbi and the U.S. dollar and between the Swiss franc and the euro.
These assumptions may prove to be incorrect over time. For example, although no single end-customer accounts for more than 1% of our revenues, if a number of our customers experienced significant deterioration in their financial positions concurrently, it could have an impact on our results of operations.
Some of our key internal assumptions include the following:
- our ability to implement our business strategy;
- our ability to implement price increases as forecasted;
- the effectiveness of our sales and marketing programs such as our Spinnaker, market penetration, and Field Turbo initiatives;
- the effectiveness of our programs to improve our service business, including growth, globalization, and productivity initiatives;
- our ability to develop and deliver innovative products and services;
- the continued growth of our sales in emerging markets;
- our ability to mitigate increase tariff costs; and
- the effectiveness of our productivity and cost-saving initiatives.
These internal assumptions may also prove to be incorrect over time. For example, with respect to our ability to realize our planned price increases without disturbing our customer base in core markets, in certain markets, such as emerging markets, price tends to be a more significant factor in customers’ decisions to purchase our products and services. Furthermore, we can have no assurance that our cost reduction programs will generate adequate cost savings. Additionally, it may become necessary to take additional restructuring actions resulting in additional restructuring costs.
Should any of our assumptions prove to be incorrect, or should we incur lower-than-expected operating performance or cash flows, we may experience results different than our projections.
Our business involves certain operating risks, and our insurance may not be adequate to cover all insured losses or liabilities we might incur in our operations.
We have procured various insurance policies for certain types of insurance coverage and in varying coverage amounts. Our insurance may not be adequate to cover all losses or liabilities that we might incur in our operations. As a result of market conditions, premiums and deductibles for certain of our insurance policies may substantially increase. In some instances, certain insurance could become unavailable or available only for reduced amounts of coverage. We also are subject to the risk that we may be unable to maintain or obtain insurance of the type and amount we desire at a reasonable cost. If we were to incur a significant liability for which we were uninsured or for which we were not fully insured, it could have a material adverse effect on our financial position, results of operations, and cash flows.