exco-20251231

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

Example Widget Corporation

PART I

Item 1. Business

Example Widget Corporation designs, manufactures and sells industrial widgets, replacement parts and related maintenance services to customers in several regions.

The Company operates through two reportable segments, Widgets and Services, and sells through direct sales teams, distributors and an online storefront.

Competition in the widget market is intense and is characterized by frequent product introductions, price pressure and rapid changes in manufacturing technology.

The Company sources raw materials, including steel, aluminum and specialty polymers, from multiple suppliers, although certain components are available from a single source.

As of the end of the fiscal year, the Company had approximately 4,200 full-time employees, most of whom work in manufacturing, engineering and field service roles.

Item 1A. Risk Factors

The Company’s business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, any one or more of which could cause actual results to vary materially from past or anticipated results.

Global economic conditions could materially adversely affect the Company.

Demand for industrial widgets depends on capital spending by manufacturers, which declines during economic downturns, periods of high interest rates and times of reduced business confidence.

Any of these events could have a material adverse effect on the Company’s business, results of operations, financial condition and stock price.

The Company depends on component suppliers, some of which are single sources.

A disruption at a single-source supplier, whether caused by natural disasters, labor disputes, trade restrictions or financial distress, could delay shipments and increase the cost of producing widgets.

Any of these events could have a material adverse effect on the Company’s business, results of operations, financial condition and stock price.

The Company faces substantial competition.

Competitors may introduce lower-priced or technically superior widgets, and the Company may be unable to reduce prices or increase research spending enough to preserve its market share and margins.

Any of these events could have a material adverse effect on the Company’s business, results of operations, financial condition and stock price.

Failures of information technology systems could disrupt operations.

The Company relies on information technology systems to manage ordering, production scheduling, logistics and financial reporting, and a security breach or outage could interrupt operations and expose confidential data.

Any of these events could have a material adverse effect on the Company’s business, results of operations, financial condition and stock price.

Changes in tax rates and trade policy could affect results.

The Company is subject to income taxes and tariffs in several jurisdictions, and changes to tax legislation, tariff schedules or the interpretation of existing rules could increase its effective tax rate and the cost of imported components.

Any of these events could have a material adverse effect on the Company’s business, results of operations, financial condition and stock price.

The Company may not realize the expected benefits of acquisitions.

Integrating acquired businesses requires management attention and may involve unanticipated costs, and acquired businesses may not perform as expected or may expose the Company to unknown liabilities.

Any of these events could have a material adverse effect on the Company’s business, results of operations, financial condition and stock price.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Net sales for the year were $1,234 million, an increase of 7% compared with the prior year, driven by higher widget volumes.

Net sales	$	1,234
Cost of sales	$	802

Item 8. Financial Statements and Supplementary Data

Note 1 – Summary of Significant Accounting Policies

Revenue is recognized when control of a widget transfers to the customer, which generally occurs upon shipment.

Inventories are stated at the lower of cost, determined on a first-in, first-out basis, and net realizable value.