Foreign Operations Conducting business internationally exposes our Company to risks that could harm our
In 2014, approximately 53 percent of our sales were generated by customers located outside the United States. We are increasing our
presence in advancing economies. Operating and selling outside of the United States exposes us to certain risks that could adversely impact our sales volume, rate of growth or profitability. These risks include: complying with foreign legal and
regulatory requirements, international trade factors (export controls, trade sanctions, duties, tariff barriers and other restrictions), protection of our proprietary technology in certain countries, potentially burdensome taxes, potential
difficulties staffing and managing local operations, and changes in exchange rates.
Competition Our success depends upon our ability to
develop, market and sell new products that meet our customers needs, and anticipate industry changes.
Our profitability will be affected if we
do not develop new products and technologies that meet our customers needs. Our ability to develop, market and sell products that meet our customers needs depends upon a number of factors, including anticipating the features and products
that our customers will need in the future, identifying and entering into new markets, and training our distributors. Changes in industries in which we participate, including consolidation of competitors and customers, could affect our success.
Price competition and competitor strategies could affect our success.
Suppliers Risks associated with foreign sourcing, supply interruption,
delays in raw material or component delivery, supply shortages and counterfeit components may adversely affect our production or profitability.
are sourcing an increasing percentage of our materials and components from suppliers outside the United States, and from suppliers within the United States who engage in foreign sourcing. Long lead times or supply interruptions associated with a
global supply base may reduce our flexibility and make it more difficult to respond promptly to fluctuations in demand or respond quickly to product quality problems. Changes in exchange rates between the U.S. dollar and other currencies and
fluctuations in the price of commodities may impact the manufacturing costs of our products and affect our profitability. Protective tariffs, unpredictable changes in duty rates, and trade regulation changes may make certain foreign-sourced parts no
longer competitively priced. Long supply chains may be disrupted by environmental events or other political factors. Raw materials may become limited in availability from certain regions. Port labor disputes may delay shipments. We source a large
volume and a variety of electronic components, which exposes us to an increased risk of counterfeit components entering our supply chain. If counterfeit components unknowingly become part of our products, we may need to stop delivery and rebuild our
products. We may be subject to warranty claims and may need to recall products.
Security Breaches Intrusion into our information systems may
impact our business.
Security breaches or intrusion into our information systems, and the breakdown, interruption in or inadequate upgrading or
maintenance of our information processing software, hardware or networks may adversely affect our business. Security breaches or intrusion into the systems or data of the third parties with whom we conduct business may also harm our business.
Political Instability Uncertainty surrounding political leadership may limit our growth opportunities.
Domestic political instability, including government shut downs, may limit our ability to grow our business. International political instability may prevent
us from expanding our business into certain geographies and may also limit our ability to grow our business. Terrorist activities and civil disturbances may harm our business.
Legal Proceedings Costs associated with claims, litigation, administrative proceedings and regulatory reviews, and potentially adverse outcomes, may
affect our profitability.
As our Company grows, we are at an increased risk of being a target in litigation, administrative proceedings and
regulatory reviews. The cost of defending such matters appears to be increasing, particularly in the United States. We may also need to pursue claims or litigation to protect our interests. Such costs may adversely affect our Companys
profitability. Our businesses expose us to potential toxic tort, product liability and commercial claims. Successful claims against the Company may adversely affect our results.
Major Customers Our Contractor segment depends on a few large customers for a significant portion of its sales. Significant declines in the level of
purchases by these customers could reduce our sales and impact segment profitability.
Our Contractor segment derives a significant amount of revenue
from a few large customers. Substantial decreases in purchases by these customers, difficulty in collecting amounts due or the loss of their business would adversely affect the profitability of this segment. The business of these customers is
dependent upon the economic vitality of the construction and home maintenance markets. If these markets decline, the business of our customers could be adversely affected and their purchases of our equipment could decrease.