Anixter International Inc. Financial Statement Analysis
Any significant disruption, interruption or failure of our information systems could disrupt our business, result in
increased costs and decreased revenues, harm our reputation, and expose us to liability.
We rely on the proper functioning and availability of our information systems to successfully operate our business,
including managing inventory, processing customer orders, shipping products and providing service to customers, and
compiling financial results. Our information systems may be disrupted due to natural disasters, power or telecommunications
outages, unauthorized access, or other causes. Any significant or prolonged unavailability or failure of our critical information
systems could materially impair our ability to maintain proper levels of inventories, process orders, meet the demands of our
customers in a timely manner, and other harmful effects. We seek to continually enhance our information systems, and such
changes could potentially create a disruption or failure of our existing information technology. Additionally, efforts to align
portions of our business on common platforms, systems and processes could result in unforeseen interruptions, increased costs
or liability, and other negative effects.
We may experience a failure in or breach of our operational or information security systems, or those of our third-
party service providers, as a result of cyber attacks or information security breaches.
Information security risks have generally increased in recent years because of the proliferation of new technologies and
the increased sophistication and activities of perpetrators of cyber attacks. A failure in or breach of our operational or
information security systems, or those of our third-party service providers, as a result of cyber attacks, mailicious intrusions or
information security breaches could disrupt our business, result in the disclosure or misuse of confidential or proprietary
information, damage our reputation, increase our costs and/or cause losses. As a result, cyber security and the continued
development and enhancement of the controls and processes designed to protect our systems, computers, software, data and
networks from attack, damage or unauthorized access remain a priority for us. Although we believe that we have robust
information security procedures and other safeguards in place, as cyber threats continue to evolve, we may be required to
expend additional resources to continue to enhance our information security measures and/or investigate and remediate any
information security vulnerabilities. If our information systems are compromised, we may face regulatory sanctions or penalties
under applicable laws, experience increases in operating expenses or an impairment in our ability to conduct our operations,
incur expenses or lose revenues as a result of a data privacy breach, information technology outages or disruptions, or suffer
other adverse consequences including lawsuits or other legal action and damage to our reputation.
Disruptions to our logistics capability or supply chain may have an adverse impact on our operations.
Our global logistics services are operated through distribution centers around the world. We also depend on transportation
service providers for the delivery of products to our customers. Any significant interruption or disruption in service at one or
more of our distribution centers due to severe weather, natural disasters, information technology upgrades, operating issues,
disruptions to our transportation network, public heath crises (such as the recent outbreak of a novel strain of coronavirus) or
other unanticipated events, could impair our ability to obtain or deliver inventory in a timely manner, cause cancellations or
delays in shipments to customers or otherwise disrupt our normal business operations.
We are subject to various laws and regulations globally and any failure to comply could adversely affect our business.
We are subject to a broad range of laws and regulations in the jurisdictions where we operate globally, including, among
others, those relating to data privacy and protection, cyber security, import and export requirements, anti-bribery and
corruption, product compliance, supplier regulations regarding the sources of supplies or products, environmental protection,
health and safety requirements, intellectual property, foreign exchange controls and cash repatriation restrictions, labor and
employment, e-commerce, advertising and marketing, anti-competition and tax. Compliance with these domestic and foreign
laws, regulations and requirements may be burdensome, increasing our cost of compliance and doing business. In addition, as a
supplier to federal, state, and local government agencies, we must comply with certain laws and regulations relating specifically
to our governmental contracts. Although we have implemented policies and procedures designed to facilitate compliance with
these laws, we cannot assure you that our employees, contractors, or agents will not violate such laws and regulations, or our
policies and procedures. Any such violations could result in the imposition of fines and penalties, damage to our reputation,
and, in the case of laws and regulations relating to governmental contracts, the loss of those contracts.
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