DCI

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How DCI rewrote its risk factors

10-K ITEM 1A · FY2025 → FY2026

Text kept

82%

of sentences unchanged

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new sentences

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Length

+517

words, now 3,834

New in FY2026

No customer accounted for 10% or more of our net sales in fiscal 2026, 2025 or 2024.
However, a number of our customers are concentrated in similar cyclical industries (e.g., construction, agric ulture, mining, oil and gas, transportation, power generation and disk drive), resulting in additional risk based on their respective economic conditions.
Our failure to achieve related strategies, commitments and targets or failure to meet sustainability requirements could negatively impact our reputation as well as the demand for our products and adversely affect our business, results of operations, financial condition and cash flows.
Facet Filtration Acquisition - we could be subject to new risks, known and unknown, relating to the Facet acquisition.
We may experience risks, losses and damages associated with the Facet acquisition.
The Facet acquisition integration activities may involve complex operational, financial and cultural alignment efforts.
If management is unable to effectively balance integration activities with ongoing business needs, we may experience increased operating costs, reduced financial performance or disruptions to our day‑to‑day operations.
Any of these outcomes could materially and adversely affect our business, financial condition or results of operations.
The Facet acquisition involves the inherent risk of liabilities, and these liabilities may prove more costly or produce more adverse effects than we anticipate, such as actual or potential litigation and regulatory matters.
In addition, in the course of the due diligence review of Facet, we may not have discovered, or may have been unable to quantify, undisclosed liabilities of Facet, and we may not be indemnified or have insurance for any of these liabilities.
Any such liabilities could have an adverse effect on our business, results of operations, financial condition and cash flows.
We acquired $587.4 million of goodwill and $225.6 million in intangible assets as part of the Facet acquisition.
If Facet fails to meet performance expectations, we could face future impairment charges that may have a material adverse effect on our reported results of operations and financial position.
Artificial Intelligence (AI) - the development, deployment, and use of AI technologies may not achieve the intended outcomes.
Our growing use of AI technologies across technology development activities and business operations may expose us to a range of competitive, legal, regulatory, operational and other risks, including the following: • Operational and Technical Risks: AI technologies are complex and rapidly evolving and may not perform as intended.
Deficiencies in AI algorithms, training methodologies, datasets, or system implementation could result in inaccurate outputs, operational disruptions, data loss or other adverse outcomes that impair the effectiveness of utilizing AI in our operations. • Legal and Regulatory Risks: The legal and regulatory framework governing AI continues to evolve and varies across jurisdictions.
Compliance with existing and emerging requirements may increase costs, restrict our use of AI technologies and expose us to legal, regulatory and reputational risks. • Competitive Risks: Failure to keep pace with evolving AI advancements could weaken our market position and negatively impact business performance. • Financial Risks: Investments in AI technologies may increase our costs and may not deliver the anticipated benefits. • Cybersecurity Risks: AI technologies may be susceptible to cybersecurity threats, including unauthorized access, data breaches and other security incidents, which could result in financial losses, legal or regulatory liability and reputational harm.
Additionally, the increasing use and advancement of AI may enhance the sophistication and effectiveness of cyberattacks, thereby increasing our cybersecurity risk exposure.
Our development and use of AI technologies may not effectively address all associated risks, and any failure to do so could materially adversely affect our business, results of operations, financial condition and cash flows.
Cybersecurity Risks Cybersecurity Risks - vulnerability of our information and operational technology systems and security.
We have many information technology and operational technology systems, including systems supporting our manufacturing operations, that are important to the operation of our business, some of which are managed by third parties.
These laws include the European GDPR, Chinese PIPL, CSL, DSL and the CCPA.

Gone since FY2025

No customer accounted for 10% or more of our net sales in fiscal 2025, 2024 or 2023.
However, a number of our customers are concentrated in similar cyclical industries (e.g., construction, agriculture, mining, oil and gas, transportation, power generation and disk drive), resulting in additional risk based on their respective economic conditions.
Our failure to achieve related strategies, commitments and targets or failure to meet sustainability requirements could negatively impact our reputation as well as the demand for our products and adversely affect our business, results of operations, financial condition and cash flow.
Cybersecurity Risks Cybersecurity Risks - vulnerability of our information technology systems and security.
We have many information technology systems that are important to the operation of our business, some of which are managed by third parties.
These laws include the European GDPR and the CCPA.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2025 ↗, FY2026 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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