−Removed: Item 1A Risk Factors
There are inherent risks and uncertainties associated with our business that could adversely affect our operating performance and financial condition.
Set forth below are descriptions of those risks and uncertainties that we believe to be material, but the risks and uncertainties described are not the only risks and uncertainties that could affect our business.
−Removed: Reference should be made to "Forward-Looking Statements" above, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 below.
+Added: Reference should be made to "Forward-Looking Statements" above, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 and our consolidated financial statements and related notes in Item 8 below.
+Added: Industry and Segment Risks
The cyclical nature of the industries in which our customers operate causes demand for our products to be cyclical, creating uncertainty regarding future profitability.
1 unchanged sentence
These changes include decreases in the rate of consumption or use of our customers’ products due to economic downturns.
−Removed: Other factors causing fluctuation in our customers’ positions are changes in market demand, capital spending, tariff induced price changes, lower overall pricing due to domestic and international overcapacity, lower priced imports, currency fluctuations, and increases in use or decreases in prices of substitute materials.
+Added: Other factors causing fluctuation in our customers’ positions are changes in market demand, capital spending, tariff induced price changes, lower overall pricing due to domestic and international overcapacity, lower priced imports, currency fluctuations, and increases in
+Added: use or decreases in prices of substitute materials.
As a result of these factors, our profitability has been and may in the future be subject to significant fluctuation.
3 unchanged sentences
These factors have had and may continue to have an adverse impact on our revenues, operating results and financial condition, and may continue to do so in the future.
+Added: Oil prices are extremely volatile.
+Added: A substantial or extended decline in the price of oil could adversely affect our financial condition and results of operations.
+Added: Prices for oil can fluctuate widely.
+Added: Revenues from our Palmer and Specialty (Houston, Texas) units are highly dependent on our customers adding oil well drilling and pumping locations.
+Added: Should oil prices decline such that drilling becomes unprofitable for our customers, such customers will likely cap many of their current wells and cease or curtail expansion.
+Added: This will decrease the demand for our tanks and pipe and tube and adversely affect the results of our operations.
+Added: Significant changes in nickel prices could have an impact on the sales of the Metals Segment.
+Added: Nickel prices are currently at a relatively low level, which reduces our manufacturing costs for certain products.
+Added: When nickel prices increase, many of our customers increase their orders in an attempt to avoid future price increases, resulting in increased sales for the Metals Segment.
+Added: Conversely, when nickel prices decrease, many of our customers wait to place orders in an attempt to take advantage of subsequent price decreases, resulting in reduced sales for the Metals Segment.
+Added: On average, the Metals Segment turns its inventory of commodity pipe every four months, but the nickel surcharge on sales of commodity pipe is established on a monthly basis.
+Added: The difference, if any, between the price of nickel on the date of purchase of the raw material and the price, as established by the surcharge, on the date of sale has the potential to create an inventory price change gain or loss.
+Added: If the price of nickel steadily increases over time, the Metals Segment is the beneficiary of the increase in nickel price in the form of metal price change gains.
+Added: We will incur inventory price losses in the future if nickel prices decrease.
+Added: Any material changes in the cost of nickel could impact our sales and result in fluctuations in the profits of the Metals Segment.
+Added: Geographic, Trade and Customer Risks
Our business, financial condition and results of operations could be adversely affected by an increased level of imported products.
−Removed: Our business is susceptible to the import of products from other countries, particularly steel products.
+Added: Our business is susceptible to the import of products from other countries, particularly in our Metals Segment.
Import levels of various products are affected by, among other things, overall world-wide demand, lower cost of production in other countries, the trade practices of foreign governments, government subsidies to foreign producers, the strengthening of the U.S.
−Removed: dollar and governmentally imposed trade restrictions in the United States.
+Added: dollar, and government imposed trade restrictions in the United States.
Although imports from certain countries have been curtailed by anti-dumping duties, imported products from other countries could significantly reduce prices.
Increased imports of certain products, whether illegal dumping or legal imports, could reduce demand for our products in the future and adversely affect our business, financial position, results of operations or cash flows.
−Removed: The Specialty Chemicals Segment uses significant quantities of a variety of specialty and commodity chemicals in its manufacturing processes, which are subject to price and availability fluctuations that may have an adverse impact on our financial performance.
+Added: A substantial portion of our overall sales is dependent upon a limited number of customers, and the loss of one or more of such customers would have a material adverse effect on our business, results of operation and profitability.
+Added: There were no customers representing more than 10 percent of the Metals Segment's revenues in 2020 or 2019, respectively.
+Added: Palmer and Specialty, which are a part of the Metals Segment, sell much of their products to the oil and gas industry.
+Added: Any change in this industry, or any change in this industry’s demand for their products, would have a material adverse effect on the profits of the Metals Segment and the Company.
+Added: The products of the Specialty Chemicals Segment are sold to various industries nationwide.
+Added: The Specialty Chemicals Segment has one customer that accounted for approximately 16 percent of revenues in 2020 and 2019, respectively.
+Added: The loss of this customer would have a material adverse effect on the revenues of the Specialty Chemicals Segment and the Company.
+Added: Operations and Supply Chain Risks
+Added: We rely on a small number of suppliers for our raw materials and any interruption in our supply chain could affect our operations.
+Added: In order to foster strong business relationships, the Metals Segment uses only a few raw material suppliers.
+Added: During the year ended December 31, 2020, 10 suppliers furnished approximately 95 percent of our total dollar purchases of raw materials, with one supplier providing 33 percent of purchases of raw materials.
+Added: However, these raw materials are available from a number of sources, and the Company anticipates no difficulties in fulfilling its raw materials requirements for the Metals Segment.
+Added: Raw materials used by the Specialty Chemicals Segment are generally available from numerous independent suppliers and approximately 48 percent of total purchases were made from our top 10 suppliers during the year ended December 31, 2020.
+Added: Although some raw material needs are met by a single supplier or only a few suppliers, the Company anticipates no difficulties in fulfilling its raw material requirements for the Specialty Chemicals Segment.
+Added: While the Company believes that raw materials for both segments are readily available from numerous sources, the loss of one or more key suppliers in either segment, or any other material change in our current supply channels, could have an adverse effect on the Company’s ability to meet the demand for its products, which could impact our operations, revenues and financial results.
+Added: The purchasing incentives we earn from product suppliers can be impacted if we reduce our purchases in response to declining customer demand.
+Added: Certain of our product and raw material suppliers have historically offered to their customers and distributors, including us, incentives for purchasing their products.
+Added: In addition to market or customer account-specific incentives, certain suppliers pay incentives to the customer or distributor for attaining specific purchase volumes during the program period.
+Added: When the demand for our products declines, we may be less willing to add inventory to take advantage of certain incentive programs, thereby potentially adversely impacting our profitability.
+Added: The Specialty Chemicals Segment uses significant quantities of a variety of specialty and commodity chemicals in its manufacturing processes, which are subject to price and availability fluctuations that may have an adverse impact on our financial performance and a lengthy sales cycle which makes it difficult to predict quarterly revenue levels and operating results.
The raw materials we use are generally available from numerous independent suppliers.
10 unchanged sentences
Any significant variations in the cost and availability of our specialty and commodity materials may negatively affect our business, financial condition or results of operations, specifically for the Specialty Chemicals Segment.
−Removed: We rely on a small number of suppliers for our raw materials and any interruption in our supply chain could affect our operations.
−Removed: In order to foster strong business relationships, the Metals Segment uses only a few raw material suppliers.
−Removed: During the year ended December 31, 2019 , 10 suppliers furnished approximately 87 percent of our total dollar purchases of raw materials, with one supplier providing 34 percent.
−Removed: However, these raw materials are available from a number of sources, and the Company anticipates no difficulties in fulfilling its raw materials requirements for the Metals Segment.
−Removed: Raw materials used by the Specialty Chemicals Segment are generally available from numerous independent suppliers and approximately 52 percent of total purchases were made from our top 10 suppliers during the year ended December 31, 2019 .
−Removed: Although some raw material needs are met by a single supplier or only a few suppliers, the Company anticipates no difficulties in fulfilling its raw material requirements for the Specialty Chemicals Segment.
−Removed: While the Company believes that raw materials for both segments are readily available from numerous sources, the loss of one or more key suppliers in either segment, or any other material change in our current supply channels, could have an adverse effect on the Company’s ability to meet the demand for its products, which could impact our operations, revenues and financial results.
−Removed: A substantial portion of our overall sales is dependent upon a limited number of customers, and the loss of one or more of such customers would have a material adverse effect on our business, results of operation and profitability.
−Removed: The products of the Specialty Chemicals Segment are sold to various industries nationwide.
−Removed: The Specialty Chemicals Segment has one customer that accounted for approximately 16 percent of revenues for 2019 and 2018, respectively, and 23 percent of revenues for 2017.
−Removed: The concentration of sales to this customer declined as a result of this customer moving production of certain products previously produced and sold by the Specialty Chemicals Segment in house.
−Removed: The loss of this customer would have a material adverse effect on the revenues of the Specialty Chemicals Segment of the Company.
−Removed: There were no customers representing more than 10 percent of the Metals Segment's revenues in 2019, 2018, or 2017.
−Removed: Palmer and Specialty, which are a part of the Metals Segment, sell much of their products to the oil and gas industry.
−Removed: Any change in this industry, or any change in this industry’s demand for their products, would have a material adverse effect on the profits of the Metals Segment and the Company.
+Added: Purchasing the products of the Specialty Chemicals Segment is also a major commitment on the part of our customers.
+Added: Before a potential customer determines to purchase products from the Specialty Chemicals Segment, the Company must produce test product material so that the potential customer is satisfied that we can manufacture a product to their specifications.
+Added: The production of such test materials is a time-consuming process.
+Added: Accordingly, the sales process for products in the Specialty Chemicals Segment is a lengthy process that requires a considerable investment of time and resources on our part.
+Added: As a result, the timing of our revenues is difficult to predict, and the delay of an order could cause our revenues to fall below our expectations and those of the public market analysts and investors.
Our operating results are sensitive to the availability and cost of energy and freight, which are important in the manufacture and transport of our products.
6 unchanged sentences
Further, increases in energy or freight costs that cannot be passed on to customers, or changes in costs relative to energy and freight costs paid by competitors, has adversely affected, and may continue to adversely affect, our profitability.
−Removed: Oil prices are extremely volatile.
−Removed: A substantial or extended decline in the price of oil could adversely affect our financial condition and results of operations.
−Removed: Prices for oil can fluctuate widely.
−Removed: Our Palmer and Specialty (Houston, Texas) units' revenues are highly dependent on our customers adding oil well drilling and pumping locations.
−Removed: Should oil prices decline such that drilling becomes unprofitable for our customers, such customers will likely cap many of their current wells and cease or curtail expansion.
−Removed: This will decrease the demand for our tanks and pipe and tube and adversely affect the results of our operations.
−Removed: Significant changes in nickel prices could have an impact on the sales of the Metals Segment.
−Removed: The Metals Segment uses nickel in a number of its products.
−Removed: Nickel prices are currently at a relatively low level, which reduces our manufacturing costs for certain products.
−Removed: When nickel prices increase, many of our customers increase their orders in an attempt to avoid future price increases, resulting in increased sales for the Metals Segment.
−Removed: Conversely, when nickel prices decrease, many of our customers wait to place orders in an attempt to take advantage of subsequent price decreases, resulting in reduced sales for the Metals Segment.
−Removed: On average, the Metals Segment turns its inventory of commodity pipe every six months, but the nickel surcharge on sales of commodity pipe is established on a monthly basis.
−Removed: The difference, if any, between the price of nickel on the date of purchase of the raw material and the price, as established by the surcharge, on the date of sale has the potential to create an inventory price change gain or loss.
−Removed: If the price of nickel steadily increases over time the Metals Segment is the beneficiary of the increase in nickel price in the form of metal price change gains.
−Removed: We will incur inventory price losses in the future if nickel prices decrease.
−Removed: Any material changes in the cost of nickel could impact our sales and result in fluctuations in the profits of the Metals Segment.
−Removed: We encounter significant competition in all areas of our businesses and may be unable to compete effectively, which could result in reduced profitability and loss of market share.
−Removed: We actively compete with companies producing the same or similar products and, in some instances, with companies producing different products designed for the same uses.
−Removed: We encounter competition from both domestic and foreign sources in price, delivery, service, performance, product innovation and product recognition and quality, depending on the product involved.
−Removed: For some of our products, our competitors are larger and have greater financial resources than we do.
−Removed: As a result, these competitors may be better able to withstand a change in conditions within the industries in which we operate, a change in the prices of raw materials or a change in the economy as a whole.
−Removed: Our competitors can be expected to continue to develop and introduce new and enhanced products and more efficient production capabilities, which could cause a decline in market acceptance of our products.
−Removed: Current and future consolidation among our competitors and customers also may cause a loss of market share as well as put downward pressure on pricing.
−Removed: Our competitors could cause a reduction in the prices for some of our products as a result of intensified price competition.
−Removed: Competitive pressures can also result in the loss of major customers.
−Removed: If we cannot compete successfully, our business, financial condition and profitability could be adversely affected.
−Removed: Our lengthy sales cycle for the Specialty Chemicals Segment makes it difficult to predict quarterly revenue levels and operating results.
−Removed: Purchasing the products of the Specialty Chemicals Segment is a major commitment on the part of our customers.
−Removed: Before a potential customer determines to purchase products from the Specialty Chemicals Segment, the Company must produce test product material so that the potential customer is satisfied that we can manufacture a product to their specifications.
−Removed: The production of such test materials is a time-consuming process.
−Removed: Accordingly, the sales process for products in the Specialty Chemicals Segment is a lengthy process that requires a considerable investment of time and resources on our part.
−Removed: As a result, the timing of our revenues is difficult to predict, and the delay of an order could cause our revenues to fall below our expectations and those of the public market analysts and investors.
+Added: We are dependent upon the continued operation of our production facilities, which are subject to a number of hazards.
+Added: In both of our business segments, our production facilities are subject to hazards associated with the manufacture, handling, storage and transportation of chemical materials and products, including leaks and ruptures, explosions, fires, inclement weather and natural disasters, unscheduled downtime and environmental hazards which could result in liability for workplace injuries and fatalities.
+Added: In addition, some of our production capabilities are highly specialized, which limits our ability to shift production to another facility.
+Added: We cannot assure you that we will not experience these types of incidents in the future or that these incidents will not result in production delays, failure to timely fulfill customer orders or otherwise have a material adverse effect on our business, financial condition or results of operations.
+Added: We may not be able to make the operational and product changes necessary to continue to be an effective competitor.
+Added: We must continue to enhance our existing products and to develop and manufacture new products with improved capabilities in order to continue to be an effective competitor in our business markets.
+Added: In addition, we must anticipate and respond to changes in industry standards that affect our products and the needs of our customers.
+Added: We also must continue to make improvements in our productivity in order to maintain our competitive position.
+Added: When we invest in new technologies, processes or production capabilities, we face risks related to construction delays, cost over-runs and unanticipated technical difficulties.
+Added: The success of any new or enhanced products will depend on a number of factors, such as technological innovations, increased manufacturing and material costs, customer acceptance and the performance and quality of the new or enhanced products.
+Added: As we introduce new products or refine existing products, we cannot predict the level of market acceptance or the amount of market share these new or enhanced products may achieve.
+Added: Moreover, we may experience delays in the introduction of new or enhanced products.
+Added: Any manufacturing delays or problems with new or enhanced product launches will adversely affect our operating results.
+Added: In addition, the introduction of new products could result in a decrease in revenues from existing products.
+Added: Also, we may need more capital for product development and enhancement than is available to us, which could adversely affect our business, financial condition, or results of operations.
+Added: We sell our products in industries that are affected by technological changes, new product introductions, and changing industry standards.
+Added: If we do not respond by developing new products or enhancing existing products on a timely basis, our products will become obsolete over time and our revenues, cash flows, profitability and competitive position will suffer.
+Added: In addition, if we fail to accurately predict future customer needs and preferences, we may invest heavily in the development of new or enhanced products that do not result in significant sales and revenue.
+Added: Even if we successfully innovate in the development of new and enhanced products, we may incur substantial costs in doing so, and our profitability may suffer.
+Added: Our products must be kept current to meet the needs of our customers.
+Added: To remain competitive, we must develop new and innovative products on an on-going basis.
+Added: If we fail to make innovations, or the market does not accept our new or enhanced products, our sales and results could suffer.
+Added: Our inability to anticipate and respond to changes in industry standards and the needs of our customers, or to utilize changing technologies in responding to those changes, could have a material adverse effect on our business and our results of operations.
+Added: We depend on third parties to distribute certain of our products and because we have no control over such third parties we are subject to adverse changes in such parties’ operations or interruptions of service, each of which may have an adverse effect on our operations.
+Added: We use third parties over which we have only limited control to distribute certain of our products.
+Added: Because we rely on these third parties to provide distribution services, any change in our ability to access these third party distribution services could have an adverse impact on our revenues and put us at a competitive disadvantage with our competitors.
+Added: Freight costs for products produced in our Palmer facility restrict our sales area for this facility.
+Added: The freight and other distribution costs for products sold from our Palmer facility result in the market area for these products being restricted, which limits the geographic market for Palmer’s tanks and the ability to significantly increase revenues derived from sales of products from the Palmer facility.
+Added: Loss of key supplier authorizations or lack of product availability could adversely affect our sales and earnings .
+Added: Our Specialty business depends on maintaining an immediately available supply of various products to meet customer demand.
+Added: Many of our relationships with key product suppliers are longstanding, but are terminable by either party.
+Added: The loss of key supplier authorizations, or a substantial decrease in the availability of their products, could put us at a competitive disadvantage and have a material adverse effect on our business.
+Added: Supply interruptions could arise from raw material shortages, inadequate manufacturing capacity or utilization to meet demand, financial problems, tariffs and other regulations affecting trade between the U.S.
+Added: and other countries, labor disputes or weather conditions affecting suppliers' production, transportation disruptions or other reasons beyond our control.
+Added: Changes in supplier distribution programs could adversely affect sales and earnings in our Specialty business.
+Added: Specialty, as a master distributor, faces the risk of key product suppliers changing their relationships with distributors generally in a manner that adversely impacts us.
+Added: For example, key suppliers could change the following:
+Added: the prices we must pay for their products relative to other distributors or relative to competing products;
+Added: the geographic or product line breadth of distributor authorizations;
+Added: supplier purchasing incentive or other support programs;
+Added: or product purchase or stock expectations.
+Added: Our existing property and liability insurance coverages contain exclusions and limitations on coverage.
+Added: We maintain various forms of insurance, including insurance covering claims related to our properties and risks associated with our operations.
+Added: From time-to-time, in connection with renewals of insurance, we have experienced additional exclusions and limitations on coverage, larger self-insured retentions and deductibles and higher premiums.
+Added: As a result, our existing coverage may not be sufficient to cover any losses we may incur and in the future our insurance coverage may not cover claims to the extent that it has in the past and the costs that we incur to procure insurance may increase significantly, either of which could have an adverse effect on our results of operations or cash flows.
+Added: Government Regulation Risks
Our operations expose us to the risk of environmental, health and safety liabilities and obligations, which could have a material adverse effect on our financial condition, results of operations or cash flows.
8 unchanged sentences
In addition, these requirements and their enforcement may become more stringent in the future.
−Removed: We have incurred, and expect to continue to incur, additional capital expenditures in addition to ordinary costs to comply with applicable environmental laws, such as those governing air emissions and wastewater discharges.
−Removed: Our failure to comply with applicable environmental laws and permit requirements could result in civil and/or criminal fines or penalties, enforcement actions, and regulatory or judicial orders enjoining or curtailing operations or requiring corrective measures such as the installation of
−Removed: pollution control equipment, which could have a material adverse effect on our financial condition, results of operations or cash flows.
+Added: We have incurred, and expect to continue to incur, additional capital expenditures in addition to ordinary costs to comply with applicable environmental laws.
+Added: Our failure to comply with applicable environmental laws and permit requirements could result in civil and/or criminal fines or penalties, enforcement actions, and regulatory or judicial orders enjoining or curtailing operations or requiring corrective measures such as the installation of pollution control equipment, which could have a material adverse effect on our financial condition, results of operations or cash flows.
We are currently, and may in the future be, required to investigate, remediate or otherwise address contamination at our current or former facilities.
14 unchanged sentences
In addition, any unanticipated liabilities or obligations arising, for example, out of discovery of previously unknown conditions or changes in laws or regulations, could have an adverse effect on our business, financial condition, results of operations or cash flows.
−Removed: We are dependent upon the continued operation of our production facilities, which are subject to a number of hazards.
−Removed: In both of our business segments, but especially in the Specialty Chemicals Segment, our production facilities are subject to hazards associated with the manufacture, handling, storage and transportation of chemical materials and products, including leaks and ruptures, explosions, fires, inclement weather and natural disasters, unscheduled downtime and environmental hazards which could result in liability for workplace injuries and fatalities.
−Removed: In addition, some of our production capabilities are highly specialized, which limits our ability to shift production to another facility in the event of an incident at a particular facility.
−Removed: If a production facility, or a critical portion of a production facility, were temporarily shut down, we likely would incur higher costs for alternate sources of supply for our products.
−Removed: We cannot assure you that we will not experience these types of incidents in the future or that these incidents will not result in production delays, failure to timely fulfill customer orders or otherwise have a material adverse effect on our business, financial condition or results of operations.
+Added: Federal, state and local legislative and regulatory initiatives relating to hydraulic fracturing, as well as governmental reviews of such activities could result in delays or eliminate new wells from being started, thus reducing the demand for our fiberglass and steel storage tanks, pressure vessels and heavy walled pipe and tube.
+Added: Hydraulic fracturing (“fracking”) is currently an essential and common practice to extract oil from dense subsurface rock formations and this lower cost extraction method is a significant driving force behind the surge of oil exploration and drilling in several locations in the United States.
+Added: However, the Environmental Protection Agency, U.S.
+Added: Congress and state legislatures have considered adopting legislation to provide additional regulations and disclosures surrounding this process.
+Added: In the event that new legal restrictions surrounding the fracking process are adopted in the areas in which our customers operate, we may see a dramatic decrease in Palmer's and Specialty - Texas' profitability which could have an adverse impact on our financial results.
+Added: New regulations related to “conflict minerals” may force us to incur additional expenses, may make our supply chain more complex and may result in damage to our reputation with customers.
+Added: On August 22, 2012, under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), the SEC adopted new requirements for companies that use certain minerals and metals, known as conflict minerals, in their products, whether or not these products are manufactured by third parties.
+Added: These regulations require companies to conduct annual due diligence and disclose whether or not such minerals originate from the Democratic Republic of Congo and adjoining countries.
+Added: Tungsten and tantalum are designated as conflict minerals under the Dodd-Frank Act.
+Added: These metals are used to varying degrees in our welding materials and are also present in specialty alloy products.
+Added: These new requirements could adversely affect the sourcing, availability and pricing of minerals used in our products.
+Added: In addition, we could incur additional costs to comply with the disclosure requirements, including costs related to determining the source of any of the
+Added: relevant minerals and metals used in our products.
+Added: Since our supply chain is complex, we may not be able to sufficiently verify the origins for these minerals and metals used in our products through the due diligence procedures that we implement, which may harm our reputation.
+Added: In such event, we may also face difficulties in satisfying customers who could require that all of the components of our products are conflict mineral-free.
+Added: Human Capital Risks
Certain of our employees in the Metals Segment are covered by collective bargaining agreements, and the failure to renew these agreements could result in labor disruptions and increased labor costs.
As of December 31, 2020, we had 232 employees represented by unions at our Bristol, Tennessee, Mineral Ridge, Ohio, and Munhall, Pennsylvania facilities, which is 44 percent of the aggregate number of Company employees.
−Removed: These employees are represented by three local unions affiliated with the United Steelworkers (the “Steelworkers Union").
−Removed: The collective bargaining contracts for the Steelworkers Unions will expire in July 2024 (Bristol, TN), June 2020 (Mineral Ridge, OH), and January 2023 (Munhall, PA).
+Added: These employees are represented by three local unions affiliated with the USW.
+Added: The collective bargaining contracts for the USW will expire at various dates between 2023 and 2024.
Although we believe that our present labor relations are strong, our failure to renew these agreements on reasonable terms as the current agreements expire could result in labor disruptions and increased labor costs, which could adversely affect our financial performance.
+Added: If we do not successfully manage the transitions associated with the election of three new members of our Board of Directors, the appointment of a new Chairman of the Board, the retirement of our Chief Executive Officer and appointment of a new Interim Chief Executive Officer and a new Chief Financial Officer, it could have an adverse impact on our business operations, including our internal controls over financial reporting, as well as be viewed negatively by our customers and shareholders.
+Added: The Company appointed Sally M.
+Added: Cunningham Senior Vice President and Chief Financial Officer effective June 30, 2020 after the resignation of Dennis M.
+Added: In addition, on July 7, 2020, the Company announced the election of three new members of the Board of Directors at the 2020 Annual Meeting of Shareholders.
+Added: On July 9, 2020, the Company's Board of Directors elected Henry L.
+Added: Guy as Chairman of the Board of Directors.
+Added: On October 27, 2020, the Company announced the retirement of Craig C.
+Added: Bram, the Company's President and Chief Executive Officer and member of the Company's Board of Directors, effective November 9, 2020.
+Added: On October 27, 2020, the Company announced the appointment of Christopher G.
+Added: Hutter, a member of the Company's Board of Directors, as interim President and Chief Executive Officer, effective November 9, 2020.
+Added: Such leadership transitions can be inherently difficult to manage, and an inadequate transition may cause disruption to our business, including our relationships with customers, suppliers, vendors, and employees.
+Added: It may also make it more difficult to hire and retain key employees.
+Added: The loss of key members of our management team, or difficulty attracting and retaining experienced technical personnel, could reduce our competitiveness and have an adverse effect on our business and results of operations.
+Added: The successful implementation of our strategies and handling of other issues integral to our future success will depend, in part, on our experienced management team.
+Added: The loss of key members of our management team could have an adverse effect on our business.
+Added: Although we have entered into employment agreements with key members of our management team including Christopher G.
+Added: Hutter, Interim President and Chief Executive Officer and Sally M.
+Added: Cunningham, Senior Vice President and Chief Financial Officer, employees may resign from the Company at any time and seek employment elsewhere, subject to certain non-competition and confidentiality restrictions.
+Added: Additionally, if we cannot retain our technical personnel or attract additional experienced technical personnel, our ability to compete could be harmed.
+Added: Financial and Strategic Risks
Our current capital structure includes indebtedness, which is secured by all or substantially all of our assets and which contains restrictive covenants that may prevent us from obtaining adequate working capital, making acquisitions or capital improvements.
4 unchanged sentences
In addition, in the event of such a default, our lender may refuse to advance additional funds, demand immediate repayment of our outstanding indebtedness, and elect to foreclose on our assets that secure the credit facility.
−Removed: There were no events of default under our credit facility at December 31, 2019.
+Added: There were no events of default under our credit facility as of December 31, 2020.
Although we believe we will remain in compliance with these covenants in the foreseeable future and that our relationship with our lender is strong, there is no assurance our lender would consent to an amendment or waiver in the event of noncompliance;
8 unchanged sentences
If we are unable to access capital on satisfactory terms and conditions, this could have an adverse impact on our operations and our financial results.
−Removed: Our existing property and liability insurance coverages contain exclusions and limitations on coverage.
−Removed: We maintain various forms of insurance, including insurance covering claims related to our properties and risks associated with our operations.
−Removed: From time-to-time, in connection with renewals of insurance, we have experienced additional exclusions and limitations on coverage, larger self-insured retentions and deductibles and higher premiums, primarily from the operations of the Specialty Chemicals Segment.
−Removed: As a result, our existing coverage may not be sufficient to cover any losses we may incur and in the future our insurance coverage may not cover claims to the extent that it has in the past and the costs that we incur to procure insurance may increase significantly, either of which could have an adverse effect on our results of operations or cash flows.
−Removed: We may not be able to make the operational and product changes necessary to continue to be an effective competitor.
−Removed: We must continue to enhance our existing products and to develop and manufacture new products with improved capabilities in order to continue to be an effective competitor in our business markets.
−Removed: In addition, we must anticipate and respond to changes in industry standards that affect our products and the needs of our customers.
−Removed: We also must continue to make improvements in our productivity in order to maintain our competitive position.
−Removed: When we invest in new technologies, processes or production capabilities, we face risks related to construction delays, cost over-runs and unanticipated technical difficulties.
−Removed: The success of any new or enhanced products will depend on a number of factors, such as technological innovations, increased manufacturing and material costs, customer acceptance and the performance and quality of the new or enhanced products.
−Removed: As we introduce new products or refine existing products, we cannot predict the level of market acceptance or the amount of market share these new or enhanced products may achieve.
−Removed: Moreover, we may experience delays in the introduction of new or enhanced products.
−Removed: Any manufacturing delays or problems with new or enhanced product launches will adversely affect our operating results.
−Removed: In addition, the introduction of new products could result in a decrease in revenues from existing products.
−Removed: Also, we may need more capital for product development and enhancement than is available to us, which could adversely affect our business, financial condition or results of operations.
−Removed: We sell our products in industries that are affected by technological changes, new product introductions and changing industry standards.
−Removed: If we do not respond by developing new products or enhancing existing products on a timely basis, our products will become obsolete over time and our revenues, cash flows, profitability and competitive position will suffer.
−Removed: In addition, if we fail to accurately predict future customer needs and preferences, we may invest heavily in the development of new or enhanced products that do not result in significant sales and revenue.
−Removed: Even if we successfully innovate in the development of new and enhanced products, we may incur substantial costs in doing so, and our profitability may suffer.
−Removed: Our products must be kept current to meet the needs of our customers.
−Removed: To remain competitive, we must develop new and innovative products on an on-going basis.
−Removed: If we fail to make innovations, or the market does not accept our new or enhanced products, our sales and results could suffer.
−Removed: Our inability to anticipate and respond to changes in industry standards and the needs of our customers, or to utilize changing technologies in responding to those changes, could have a material adverse effect on our business and our results of operations.
+Added: We may be adversely affected by changes in LIBOR reporting practices or the method in which LIBOR is determined .
+Added: On July 27, 2017, the Financial Conduct Authority (the “FCA”) announced its intention to phase out LIBOR rates by the end of 2021.
+Added: The discontinuation date for submission and publication of rates for certain tenors of USD LIBOR (1-month, 3-month, 6-month and 12-month) is currently under consultation by the ICE Benchmark Administration and may be extended until June 2023.
+Added: It is not possible to predict the further effect of the rules of the FCA, any changes in the methods by which LIBOR is determined, or any other reforms to LIBOR that may be enacted in the United Kingdom, the European Union or elsewhere.
+Added: Any such developments may cause LIBOR to perform differently than in the past or cease to exist.
+Added: In addition, any other legal or regulatory changes made by the FCA, ICE Benchmark Administration Limited, the European Money Markets Institute (formerly Euribor-EBF), the European Commission or any other successor governance or oversight body, or future changes adopted by such body, in the method by which LIBOR is determined or the transition from LIBOR to a successor benchmark may result in, among other things, a sudden or prolonged increase or decrease in LIBOR, a delay in the publication of LIBOR, and changes in the rules or methodologies in LIBOR, which may discourage market participants from continuing to administer or to participate in LIBOR’s determination, and, in certain situations, could result in LIBOR no longer being determined and published.
+Added: If a published U.S.
+Added: dollar LIBOR rate is unavailable after 2021, the interest rates on our debt which is indexed to LIBOR will be determined using various alternative methods, any of which may result in interest obligations which are more than or do not otherwise correlate over time with the payments that would have been made on such debt if U.S.
+Added: dollar LIBOR was available in its current form.
+Added: Further, the same costs and risks that may lead to the discontinuation or unavailability of U.S.
+Added: dollar LIBOR may make one or more of the alternative methods impossible or impracticable to determine.
+Added: Any of these proposals or consequences could have a material adverse effect on our financing costs.
Our strategy of using acquisitions and dispositions to position our businesses may not always be successful, which may have a material adverse impact on our financial results and profitability.
14 unchanged sentences
If acquisition opportunities are not available or if one or more acquisitions are not successfully integrated into our operations, this could have a material adverse impact on our financial results and profitability.
−Removed: The loss of key members of our management team, or difficulty attracting and retaining experienced technical personnel, could reduce our competitiveness and have an adverse effect on our business and results of operations.
−Removed: The successful implementation of our strategies and handling of other issues integral to our future success will depend, in part, on our experienced management team.
−Removed: The loss of key members of our management team could have an adverse effect on our business.
−Removed: Although we have entered into employment agreements with key members of our management team including Craig C.
−Removed: Bram, President and Chief Executive Officer, Dennis M.
−Removed: Loughran, Senior Vice President and Chief Financial Officer, Sally M.
−Removed: Cunningham, Vice President of Corporate Administration, James G.
−Removed: Gibson, General Manager and President of Specialty Chemicals Segment, Steven J.
−Removed: Baroff, President and General Manager of Specialty, K.
−Removed: Dianne Beck, Vice President of Specialty, Christopher D.
−Removed: Sitka, Vice President of Specialty, Kevin Van Zandt, Vice President of Bristol Metals-Munhall, Maria Haughton Roberson, President of ASTI, and Rex Haughton, Vice President-Operations of ASTI, employees may resign from the Company at any time and seek employment elsewhere, subject to certain non-competition and confidentiality restrictions.
−Removed: Additionally, if we cannot retain our technical personnel or attract additional experienced technical personnel, our ability to compete could be harmed.
−Removed: Federal, state and local legislative and regulatory initiatives relating to hydraulic fracturing, as well as governmental reviews of such activities could result in delays or eliminate new wells from being started, thus reducing the demand for our fiberglass and steel storage tanks, pressure vessels and heavy walled pipe and tube.
−Removed: Hydraulic fracturing (“fracking”) is currently an essential and common practice to extract oil from dense subsurface rock formations and this lower cost extraction method is a significant driving force behind the surge of oil exploration and drilling in several locations in the United States.
−Removed: However, the Environmental Protection Agency, U.S.
−Removed: Congress and state legislatures have considered adopting legislation to provide additional regulations and disclosures surrounding this process.
−Removed: In the event that new legal restrictions surrounding the fracking process are adopted in the areas in which our customers operate, we may see a dramatic decrease in Palmer's and Specialty - Texas' profitability which could have an adverse impact on our financial results.
−Removed: Our allowance for doubtful accounts may not be adequate to cover actual losses.
−Removed: An allowance for doubtful accounts in maintained for estimated losses resulting from the inability of our customers to make required payments.
−Removed: This allowance may not be adequate to cover actual losses, and future provisions for losses could materially and adversely affect our operating results.
−Removed: The allowance for doubtful accounts is based on an evaluation of the outstanding receivables and existing economic conditions.
−Removed: The amount of future losses is susceptible to changes in economic, operating and other outside forces and conditions, all of which are beyond our control, and these losses may exceed current estimates.
−Removed: Although management believes that the allowance for doubtful accounts is adequate to cover current estimated losses, management cannot make assurances that we will not further increase the allowance for doubtful accounts based on subsequent events and economic conditions.
−Removed: A significant increase in the allowance for doubtful accounts could adversely affect our earnings.
−Removed: We depend on third parties to distribute certain of our products and because we have no control over such third parties we are subject to adverse changes in such parties’ operations or interruptions of service, each of which may have an adverse effect on our operations.
−Removed: We use third parties over which we have only limited control to distribute certain of our products.
−Removed: Our dependency on these third party distributors has increased as our business has grown.
−Removed: Because we rely on these third parties to provide distribution services, any change in our ability to access these third party distribution services could have an adverse impact on our revenues and put us at a competitive disadvantage with our competitors.
−Removed: Freight costs for products produced in our Palmer facility restrict our sales area for this facility.
−Removed: The freight and other distribution costs for products sold from our Palmer facility are extremely high.
−Removed: As a result, the market area for these products is restricted, which limits the geographic market for Palmer’s tanks and the ability to significantly increase revenues derived from sales of products from the Palmer facility.
−Removed: New regulations related to “conflict minerals” may force us to incur additional expenses, may make our supply chain more complex and may result in damage to our reputation with customers.
−Removed: On August 22, 2012, under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), the SEC adopted new requirements for companies that use certain minerals and metals, known as conflict minerals, in their products, whether or not these products are manufactured by third parties.
−Removed: These regulations require companies to conduct annual due diligence and disclose whether or not such minerals originate from the Democratic Republic of Congo and adjoining countries.
−Removed: Tungsten and tantalum are designated as conflict minerals under the Dodd-Frank Act.
−Removed: These metals are used to varying degrees in our welding materials and are also present in specialty alloy products.
−Removed: These new requirements could adversely affect the sourcing, availability and pricing of minerals used in our products.
−Removed: In addition, we could incur additional costs to comply with the disclosure requirements, including costs related to determining the source of any of the relevant minerals and metals used in our products.
−Removed: Since our supply chain is complex, we may not be able to sufficiently verify the origins for these minerals and metals used in our products through the due diligence procedures that we implement, which may harm our reputation.
−Removed: In such event, we may also face difficulties in satisfying customers who could require that all of the components of our products are conflict mineral-free.
+Added: Impairment in the carrying value of our fixed assets, intangible assets, or goodwill could adversely affect our financial condition and consolidated results of operations.
+Added: Goodwill represents the excess of cost over the fair value of identified net assets of businesses acquired.
+Added: We review goodwill for impairment annually, or whenever circumstances change in a way which could indicate that impairment may have occurred.
+Added: Goodwill is tested at the reporting unit level.
+Added: We identify potential goodwill impairments by comparing the fair value of the reporting unit to its carrying amount, which includes goodwill and other intangible assets.
+Added: If the carrying amount of the reporting unit exceeds the fair value, an impairment exists.
+Added: The amount of the impairment is the amount by which the carrying amount exceeds the fair value.
+Added: A significant amount of judgment is involved in determining if an indication of impairment exists.
+Added: Factors may include, among others:
+Added: a significant decline in our expected future cash flows;
+Added: a sustained, significant decline in our stock price and market capitalization;
+Added: a significant adverse change in legal factors or in the business climate;
+Added: unanticipated competition;
+Added: the testing for recoverability of a significant asset group within a reporting unit;
+Added: and slower growth rates.
+Added: Any adverse change in these factors would have a significant impact on the recoverability of these assets and negatively affect our financial condition and consolidated results of operations.
+Added: We are required to record a non-cash impairment charge if the testing performed indicates that goodwill has been impaired.
+Added: We evaluate the useful lives of our fixed assets and intangible assets to determine if they are definite or indefinite-lived.
+Added: Reaching a determination on useful life requires significant judgments and assumptions regarding the lease term, future effects of obsolescence, demand, competition, other economic factors (such as the stability of the industry, legislative action that results in an uncertain or changing regulatory environment, and expected changes in distribution channels), the level of required maintenance expenditures and the expected lives of other related groups of assets.
+Added: We cannot accurately predict the amount and timing of any impairment of assets.
+Added: Should the value of goodwill, fixed assets or intangible assets become impaired, there could be an adverse effect on our financial condition and consolidated results of operations.
+Added: Intellectual Property Risks
Our inability to sufficiently or completely protect our intellectual property rights could adversely affect our business, prospects, financial condition and results of operations.
4 unchanged sentences
These measures may not afford us sufficient or complete protection, and others may independently develop intellectual property similar to ours, otherwise avoid our confidentiality agreements or produce technology that would adversely affect our business, prospects, financial condition and results of operations.
+Added: General Risk Factors
+Added: Our business, financial condition, results of operations and cash flows may be adversely affected by global public health epidemics and pandemics, including the COVID-19 outbreak.
+Added: Our business and operations expose us to risks associated with global health epidemics or pandemics, such as the outbreak of the coronavirus (COVID-19) which has spread from China to many other countries including the United States.
+Added: The outbreak has resulted in governments around the world implementing increasingly stringent measures to help the control of the spread of the virus, including quarantines, "shelter in place" and "stay at home" orders, travel restrictions, business curtailments, and school closures among others.
+Added: The COVID-19 pandemic has significantly impacted the global economy, disrupted global supply chains, lowered equity market valuations, created significant volatility and disruption in financial markets and increased unemployment levels leading to the Federal Reserve enacting fiscal and monetary stimulus measures to counteract the impacts of COVID-19 in the United States.
+Added: We are a company operating in a critical infrastructure industry, as defined by the U.S.
+Added: Department of Homeland Security.
+Added: Consistent with federal guidelines and with state and local orders to date, we currently continue to operate across our business footprint.
+Added: Notwithstanding our continued operations, COVID-19 has begun to have and may have additional negative impacts on our operations and customers, which may compress our margins, including as a result of preventative and precautionary measures that we, other businesses, and governments are taking.
+Added: Any resulting economic downturn could adversely affect the demand for our products and contribute to volatile supply and demand conditions affecting prices and volumes in the markets for our products and raw materials.
+Added: The continued progression of the outbreak could also negatively impact our business or results of operations through the temporary closure or suspension of manufacturing operations at our operating locations or those of our customers or suppliers.
+Added: In addition, the ability of our employees to work may be significantly impacted by individuals contracting or being exposed to COVID-19, and as a result, may impact our production throughout our supply chain and constrict sales channels.
+Added: Our customers may be directly impacted by business curtailments or weak market conditions and may not be able to fulfill their contractual obligations.
+Added: Our bank credit agreement requires that we maintain certain financial and other covenants.
+Added: Events resulting from the effects of the COVID-19 outbreak may negatively affect our ability to comply with these covenants, which could lead us to seek amendment or waivers from our lenders, limit access to or require accelerated repayment of our existing credit facilities, or require us to pursue alternative financing arrangements.
+Added: We have no assurance that any alternative financing arrangements, if required, could be obtained at acceptable terms to us, or at all, given effects of the financial markets at such time.
+Added: The extent to which the COVID-19 outbreak may adversely affect our business depends on future developments, which are highly uncertain and unpredictable, including new information about the severity of the outbreak and the effectiveness of actions to contain or mitigate its effects.
+Added: As such, the related financial impacts cannot be reasonably estimated at this time.
+Added: We encounter significant competition in all areas of our businesses and may be unable to compete effectively, which could result in reduced profitability and loss of market share.
+Added: We actively compete with companies producing the same or similar products and, in some instances, with companies producing different products designed for the same uses.
+Added: We encounter competition from both domestic and foreign sources in price, delivery, service, performance, product innovation, and product recognition and quality, depending on the product involved.
+Added: For some of our products, our competitors are larger and have greater financial resources than we do.
+Added: As a result, these competitors may be better able to withstand a change in conditions within the industries in which we operate, a change in the prices of raw materials or a change in the economy as a whole.
+Added: Our competitors can be expected to continue to develop and introduce new and enhanced products and more efficient production capabilities, which could cause a decline in market acceptance of our products.
+Added: Current and future consolidation among our competitors and customers also may cause a loss of market share as well as put downward pressure on pricing.
+Added: Our competitors could cause a reduction in the prices for some of our products as a result of intensified price competition.
+Added: Competitive pressures can also result in the loss of major customers.
+Added: If we cannot compete successfully, our business, financial condition and profitability could be adversely affected.
+Added: Our allowance for credit losses may not be adequate to cover actual losses.
+Added: An allowance for credit losses is maintained for estimated losses resulting from the inability of our customers to make required payments.
+Added: This allowance may not be adequate to cover actual losses, and future provisions for losses could materially and adversely affect our operating results.
+Added: The allowance for credit losses is based on an evaluation of the outstanding receivables and existing economic conditions.
+Added: The amount of future losses is susceptible to changes in economic, operating and other outside forces and conditions, all of which are beyond our control, and these losses may exceed current
+Added: Although management believes that the allowance for credit losses is adequate to cover current estimated losses, management cannot make assurances that we will not further increase the allowance for credit losses based on subsequent events and economic conditions.
+Added: A significant increase in the allowance for credit losses could adversely affect our earnings.
Our internal controls over financial reporting could fail to prevent or detect misstatements.
−Removed: Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements.
−Removed: Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
−Removed: Any failure to maintain effective internal controls or to timely effect any necessary improvement in our internal controls and disclosure controls could, among other things, result in losses from fraud or error, harm our reputation or cause investors to lose confidence in our reported financial information, all of which could have a material adverse effect on our financial condition, results of operations and cash flows.
+Added: We are subject to Section 404 of The Sarbanes-Oxley Act of 2002 ("Section 404"), and the related rules of the SEC which generally require our management and independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting.
+Added: Section 404 requires an annual management assessment of the effectiveness of our internal control over financial reporting.
+Added: Effective April 27, 2020, the SEC adopted amendments to the "accelerated filer" and "large accelerated filer" definitions in Rule 12b-2 under the Securities and Exchange Act of 1934.
+Added: The amendments exclude from the "accelerated filer" and "large accelerated filer" definitions an issuer that is eligible to be a smaller reporting company and that had a public float outstanding of less than $75 million as of the end of the registrant's most recent fiscal second quarter.
+Added: We determined that the Company does not meet the accelerated or large accelerated filer definitions as of June 30, 2020.
+Added: For so long as we remain a smaller reporting company and non-accelerated filer, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to public companies, including but not limited to, not being required as a non-accelerated filer to comply with the auditor attestation requirements of Section 404(b).
+Added: An independent assessment by our independent registered public accounting firm of the effectiveness of internal control over financial reporting could detect problems our management's assessment may not.
+Added: Undetected material weaknesses in our internal control over financial reporting could lead to financial statement restatements and require us to incur the expense of remediation.
+Added: During the course of the review and testing of our internal control for the purpose of providing the reports required by these rules, we may identify deficiencies and be unable to remediate them before we must provide the required reports.
+Added: Furthermore, if we have a material weakness in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated.
+Added: We or our independent registered public accounting firm may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting, which could harm our operating results, cause investors to lose confidence in our reported financial information and cause the trading price of our stock to fall.
+Added: In addition, as a public company we are required to file accurate and timely quarterly and annual reports with the SEC under the Exchange Act.
+Added: Any failure to report our financial results on an accurate and timely basis could result in sanctions, lawsuits, delisting of our shares from the NASDAQ Global Market or other adverse consequences that would materially harm our business.
+Added: In addition, if our status as a "non-accelerated filer" changes, we will be required to have our independent registered public accounting firm attest to the effectiveness of internal control over financial reporting.
+Added: If our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting once we are an accelerated filer or large accelerated filer, investors may lose confidence in the accuracy and completeness of our financial reports, and the market price of our common stock could be negatively affected.
+Added: Our business could be negatively affected as a result of actions of activist shareholders.
+Added: From time to time, we may be subject to proposals by shareholders urging us to take certain corporate actions.
+Added: If activist shareholder activities ensue, our business could be adversely impacted because (i) responding to actions by activist shareholders can be costly and time-consuming, and divert the attention of our management and employees;
+Added: (ii) perceived uncertainties as to our future direction may result in the loss of potential business opportunities, and may make it more difficult to attract and retain qualified personnel and business partners;
+Added: and (iii) pursuit of an activist shareholder's agenda may adversely affect our ability to effectively implement our business strategy and create additional value for our shareholders.
Cyber security risks and cyber incidents could adversely affect our business and disrupt operations.
2 unchanged sentences
The result of these incidents could include, but are not limited to, disrupted operations, misstated financial data, liability for stolen assets or information, increased cyber security protection costs, litigation and reputational damage adversely affecting customer or investor confidence.
−Removed: Loss of key supplier authorizations, lack of product availability, or changes in supplier distribution programs could adversely affect our sales and earnings.
−Removed: Our business depends on maintaining an immediately available supply of various products to meet customer demand.
−Removed: Many of our relationships with key product suppliers are longstanding, but are terminable by either party.
−Removed: The loss of key supplier authorizations, or a substantial decrease in the availability of their products, could put us at a competitive disadvantage and have a material adverse effect on our business.
−Removed: Supply interruptions could arise from raw material shortages, inadequate manufacturing capacity or utilization to meet demand, financial problems, tariffs and other regulations affecting trade between the U.S.
−Removed: and other countries, labor disputes or weather conditions affecting suppliers' production, transportation disruptions or other reasons beyond our control.
−Removed: In addition, as a master distributor, we face the risk of key product suppliers changing their relationships with distributors generally, or Specialty in particular, in a manner that adversely impacts us.
−Removed: For example, key suppliers could change the following:
−Removed: the prices we must pay for their products relative to other distributors or relative to competing products;
−Removed: the geographic or product line breadth of distributor authorizations;
−Removed: supplier purchasing incentive or other support programs;
−Removed: or product purchase or stock expectations.
−Removed: The purchasing incentives we earn from product suppliers can be impacted if we reduce our purchases in response to declining customer demand.
−Removed: Certain of our product and raw material suppliers have historically offered to their customers and distributors, including us, incentives for purchasing their products.
−Removed: In addition to market or customer account-specific incentives, certain suppliers pay incentives to the customer or distributor for attaining specific purchase volumes during the program period.
−Removed: In some cases, in order to earn incentives, we must achieve year-over-year growth in purchases with the supplier.
−Removed: When the demand for our products declines, we may be less willing to add inventory to take advantage of certain incentive programs, thereby potentially adversely impacting our profitability.
−Removed: We may be adversely affected by changes in LIBOR reporting practices or the method in which LIBOR is determined .
−Removed: As of December 31, 2019, we had outstanding bank debt of approximately 75.6 million that was indexed to the London Interbank Offered Rate (“LIBOR”).
−Removed: On July 27, 2017, the Financial Conduct Authority (the “FCA”) announced its intention to phase out LIBOR rates by the end of 2021.
−Removed: It is not possible to predict the further effect of the rules of the FCA, any changes in the methods by which LIBOR is determined, or any other reforms to LIBOR that may be enacted in the United Kingdom, the European Union or elsewhere.
−Removed: Any such developments may cause LIBOR to perform differently than in the past or cease to exist.
−Removed: In addition, any other legal or regulatory changes made by the FCA, ICE Benchmark Administration Limited, the European Money Markets Institute (formerly Euribor-EBF), the European Commission or any other successor governance or oversight body, or future changes adopted by such body, in the method by which LIBOR is determined or the transition from LIBOR to a successor benchmark may result in, among other things, a sudden or prolonged increase or decrease in LIBOR, a delay in the publication of LIBOR, and changes in the rules or methodologies in LIBOR, which may discourage market participants from continuing to administer or to participate in LIBOR’s determination, and, in certain situations, could result in LIBOR no longer being determined and published.
−Removed: If a published U.S.
−Removed: dollar LIBOR rate is unavailable after 2021, the interest rates on our debt which is indexed to LIBOR will be determined using various alternative methods, any of which may result in interest obligations which are more than or do not otherwise correlate over time with the payments that would have been made on such debt if U.S.
−Removed: dollar LIBOR was available in its current form.
−Removed: Further, the same costs and risks that may lead to the discontinuation or unavailability of U.S.
−Removed: dollar LIBOR may make one or more of the alternative methods impossible or impracticable to determine.
−Removed: Any of these proposals or consequences could have a material adverse effect on our financing costs.
−Removed: Item 1B Unresolved Staff Comments
+Added: Unresolved Staff Comments
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.