What changed in this filing

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Item 1A. Risk Factors

2024-04-01 compared with 2023-03-31 · 19 added, 42 removed, 154 unchanged (28% of the section changed)

9 unchanged sentences

Domestic competition and excess manufacturing capacity could force lower product pricing and may have an adverse effect on our revenues and profitability.

From time-to-time, intense competition and excess manufacturing capacity in the commodity stainless and galvanized steel industry have resulted in reduced selling prices, excluding raw material surcharges, for many of our stainless steel products sold by the Tubular Products segment.

From time-to-time, intense competition and excess manufacturing capacity in the commodity stainless steel industry have resulted in reduced selling prices, excluding raw material surcharges, for many of our stainless steel products sold by the Tubular Products segment.

In such situations, in order to maintain market share, we would have to lower our prices to match the competition.

7 unchanged sentences

A substantial portion of our sales in the Specialty Chemicals segment is dependent upon a limited number of customers.

The top 15 customers in the Specialty Chemicals segment accounted for approximately 67% and 60% of revenues for the years ended December 31, 2022 and 2021, respectively, with the top customer accounting for approximately 21% of revenues for 2022 and 15% of revenues for 2021.

The top 15 customers in the Specialty Chemicals segment accounted for approximately 72% of revenues for the year ended December 31, 2023 and 67% for the year ended December 31, 2022 with the top customer accounting for approximately 24% of revenues for 2023 and 21% of revenues for 2022.

An adverse change in, or termination of, the relationship with one or more of our top customers could materially and adversely affect our results of operations.

5 unchanged sentences

In addition, purchase prices and availability of these critical raw materials are subject to volatility which may negatively impact financial performance due to decreased sales volume and /or decreased profitability.

At any given time, we may be unable to obtain an adequate supply of these critical raw materials on a timely basis, at acceptable prices and other terms, or at all.

At any given time, we may be

unable to obtain an adequate supply of these critical raw materials on a timely basis, at acceptable prices and other terms, or at all.

If suppliers increase the price of critical raw materials, we may not have alternative sources of supply.

31 unchanged sentences

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.

We cannot predict the level of market acceptance or the amount of market share these new or enhanced products may achieve, and we may experience delays or problems in the introduction of new or enhanced products.

We cannot predict the level of market acceptance or the amount of

market share these new or enhanced products may achieve, and we may experience delays or problems in the introduction of new or enhanced products.

Any failure in our ability to effectively and efficiently launch new or enhanced products could materially and adversely affect our business, financial condition or results of operation.

22 unchanged sentences

The occurrence and ultimate costs and timing of environmental liabilities are difficult to predict.

Liability under

environmental laws relating to contaminated sites can be imposed retroactively and on a joint and several basis.

Liability under environmental laws relating to contaminated sites can be imposed retroactively and on a joint and several basis.

We could incur significant costs, including cleanup costs, civil or criminal fines and sanctions and third-party claims, as a result of past or future violations of, or liabilities under, environmental laws.

18 unchanged sentences

Human Capital Risks

Certain of our employees in the Tubular Products 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, 2022, we had 334 employees represented by unions at our Bristol, Tennessee, Mineral Ridge, Ohio, Munhall, Pennsylvania and Danville, Virginia facilities, which is approximately 48% of the aggregate number of Company employees.

These employees are represented by three local unions affiliated with the USW and one local affiliated with the UFCW.

Collective bargaining contracts for the USW locals expire at various dates between 2023 and 2024.

Collective bargaining contracts for the UFCW local expires in 2024.

Certain of our employees 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, 2023, we had 214 employees represented by unions which is approximately 41% of the aggregate number of Company employees.

These employees are represented by local unions affiliated with the USW and the UFCW.

Collective bargaining contracts for the USW and UFCW locals expire at various dates in 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.

7 unchanged sentences

There are risks associated with our outstanding and future indebtedness.

As of December 31, 2022, we had $71.5 million of total outstanding indebtedness, and we may incur additional indebtedness in the future.

As of December 31, 2023, we had no outstanding indebtedness, however, we may incur additional indebtedness in the future.

We have customary restrictive covenants in our current debt agreements, which may limit our flexibility to operate our business.

Failure to comply with this covenant could result in an event of default that, if not cured or waived, could have a material adverse effect on our business, results of operations and financial condition.

Additionally, our ability to pay interest and repay the principal for our indebtedness is dependent upon our ability to manage our business operations, generate sufficient cash flows to service such debt and the other factors discussed in this section.

Additionally, our ability to pay interest and repay the principal for our indebtedness is dependent upon our ability to manage our business operations, generate

sufficient cash flows to service such debt and the other factors discussed in this section.

There can be no assurance that we will be able to manage any of these risks successfully.

Our Credit Agreement with BMO Harris Bank N.A.

(as amended, the "Credit Agreement") bears interest at variable interest rates, primarily based on the London Interbank Offered Rate ("LIBOR").

LIBOR is currently in the process of being phased out.

The Credit Agreement includes provisions intended to provide for the replacement of LIBOR with the Secured Overnight Financing Rate ("SOFR") upon the cessation of LIBOR or the occurrence of other triggering events, with corresponding adjustments to the applicable interest rate margins.

However, uncertainty as to the timing and nature of such modifications could cause the interest rate calculated for the Credit Agreement to be materially different than expected, and there is no guarantee that a transition from LIBOR to an alternative will not result in financial market disruptions, significant increases in benchmark rates, or borrowing costs to borrowers, any of which could have an adverse effect on our business, results of operations and financial condition.

Our failure to manage these risks effectively could adversely affect our financial condition and results of operations.

We may need new or additional financing in the future to expand our business or refinance existing indebtedness, and our inability to obtain capital on satisfactory terms or at all may have an adverse impact on our operations and our financial results.

We may need new or additional financing in the future to expand our business, and our inability to obtain capital on satisfactory terms or at all may have an adverse impact on our operations and our financial results.

If we are unable to access capital on satisfactory terms and conditions, we may not be able to expand our business or meet our payment requirements under the Credit Agreement.

3 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.

Impairment in the carrying value of our fixed assets, intangible assets, or goodwill could adversely affect our financial condition and consolidated results of operations.

Goodwill represents the excess of cost over the fair value of identified net assets of businesses acquired.

We review goodwill for impairment annually, or whenever circumstances change in a way which could indicate that impairment may have occurred.

Goodwill is tested at the reporting unit level.

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.

If the carrying amount of the reporting unit exceeds the fair value, an impairment exists.

The amount of the impairment is the amount by which the carrying amount exceeds the fair value.

A significant amount of judgment is involved in determining if an indication of impairment exists.

Factors may include, among others:

a significant decline in our expected future cash flows;

a sustained, significant decline in our stock price and market capitalization;

a significant adverse change in legal factors or in the business climate;

unanticipated competition;

the testing for recoverability of a significant asset group within a reporting unit;

and slower growth rates.

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.

We are required to record a non-cash impairment charge if the testing performed indicates that goodwill has been impaired.

Impairment in the carrying value of our fixed assets or intangible assets could adversely affect our financial condition and consolidated results of operations.

We evaluate the useful lives of our fixed assets and intangible assets to determine if they are definite or indefinite-lived.

21 unchanged sentences

We have identified and may continue to discover material weaknesses in our internal controls over financial reporting, which may adversely affect investor confidence in the accuracy and completeness of our financial reports and consequently the market price of our securities.

market price of our securities .

As a public company, we are required to design and maintain proper and effective internal controls over financial reporting and to report any material weaknesses in such internal controls.

3 unchanged sentences

In the future, we may not be able to complete our evaluation, testing, and any required remediation in a timely fashion.

may lose confidence in the accuracy and completeness of our financial reports and the market price of our securities could be negatively affected, and we could become subject to investigations by the Financial Industry Regulatory Authority, the SEC, or other regulatory authorities, which could require additional financial and management resources.

If we continue to identify material weaknesses in our internal controls over financial reporting, if we are unable to comply with the requirements of Section 404 in a timely manner, if we continue to be unable to assert that our internal controls over financial reporting are effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal controls over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our securities could be negatively affected, and we could become subject to investigations by the Financial Industry Regulatory Authority, the SEC, or other regulatory authorities, which could require additional financial and management resources.

Cybersecurity risks and cyber incidents could adversely affect our business and disrupt operations.

4 unchanged sentences

however, there can be no assurance that a system or network failure, or security breach, will not impact our business, results of operations and financial condition.

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.

What changed 10-K

Item 1A. Risk Factors