What Standex International Corp. told the SEC could break it.

Standex is exposed across all of its segments to fluctuating market prices for the commodities used in its manufacturing — and specifically flags rare elements (rare-earth materials used in its magnetics and electronics components) in addition to base metals and other inputs. It generally does not enter purchase contracts extending beyond one operating cycle, leaving it exposed to spot price movements. Significant price increases in these commodities or rare elements could hurt operating profit if it cannot source lower-cost alternatives or pass increases on to customers, and shortages or supply disruptions (including from geopolitical conflict) could delay sales or raise costs.

“Significant price increases for these commodities and rare elements could adversely affect our operating profits if we cannot timely mitigate the price increases by successfully sourcing lower cost commodities or rare elements or by passing the increased costs on to customers.”

Standex's low-cost-country sourcing strategy includes maintaining manufacturing facilities in China and importing certain components and finished goods from its own Chinese facilities and third-party suppliers in China into the U.S., where many are subject to U.S. tariffs. It manufactures components in the U.S., Mexico, U.K., Germany, Japan, China and India, with 41% of net sales from international operations. It warns that current and threatened tariffs on goods from China and other countries could reduce net sales, profits and cash flows and impair the value of its Chinese-operations investments, and that competitive factors — including rivals importing from lower-tariff countries — may limit its ability to sustain offsetting price increases.

“Current and threatened tariffs on components and finished goods from China and other countries could result in lower net sales, profits and cash flows and could impair the value of our investments in our Chinese operations.”