What changed in this filing

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Item 1A. Risk Factors

2023-08-11 compared with 2022-08-12 · 25 added, 36 removed, 155 unchanged (28% of the section changed)

14 unchanged sentences

Volatile economic and credit conditions also make it more difficult for us, as well as our customers and suppliers, to forecast and plan future business activities.

The extent to which the COVID-19 pandemic and measures taken in response thereto continue to impact our results of operations and financial condition will depend on future developments, which are uncertain and cannot be predicted.

The COVID-19 pandemic created significant volatility, uncertainty, and economic

The effects of the pandemic resulted in lost or delayed sales to us, and we experienced business disruptions as we modified our business practices (including travel, work locations, and cancellation of physical participation in meetings).

While the pandemic’s impact on social and economic conditions in the U.S.

has subsided, the extent to which it will continue to impact our results of operations and financial condition will depend on evolving factors that are uncertain and cannot be predicted, including the following:

the duration, spread, and severity of the pandemic, particularly due to virus variants, in the countries in which we operate or otherwise in our supply chain;

responsive measures taken by governmental authorities, businesses, and individuals;

the effect on our customers and their demand for our products and services;

the effect on our suppliers and disruptions to the global supply chain;

disruptions to our ability to sell and provide our products and services and otherwise operate effectively, including as a result of travel restrictions and associates working from home;

disruptions to our operations resulting from associate illness;

restrictions or disruptions to, or reduced availability of, transportation;

customers’ ability to pay for our services and products;

closures of our facilities or those of our customers or suppliers;

the impact of reduced customer demand on purchasing incentives we earn from suppliers;

and how quickly and to what extent normal economic and operating conditions can resume.

In addition, the pandemic’s impact on the economy could affect the proper functioning of financial and capital markets, foreign currency exchange rates, product and energy costs, labor supply and costs, and interest rates.

The pandemic’s effects may also amplify the other risks and uncertainties described in this Annual Report on Form 10-K, and may continue to adversely affect our business, financial condition, results of operations, and/or stock price.

Our business, results of operation and financial condition have been, and could in the future be, adversely affected by a pandemic, epidemic or other public health emergency.

The COVID-19 pandemic created significant volatility, uncertainty, and economic disruption, and resulted in lost or delayed sales to us, and we

experienced business disruptions as we modified our business practices.

Another pandemic, including a new COVID-19 variant, or other public health emergency, together with preventative measures taken to contain or mitigate such crises, could impact our results of operations and financial condition in a variety of ways, such as:

impact our customers such that the demand for our products and services could change;

disrupt our supply chain and impact the ability of our suppliers to provide products as required;

disrupt our ability to sell and provide our products and services and otherwise operate effectively;

increase incremental costs resulting from the adoption of preventative measures and compliance with regulatory requirements;

create financial hardship on customers, including by creating restrictions on their ability to pay for our services and products;

result in closures of our facilities or the facilities of our customers or suppliers;

and reduce customer demand on purchasing incentives we earn from suppliers.

In addition, a pandemic or other public health emergency could impact the proper functioning of financial and capital markets, foreign currency exchange rates, product and energy costs, labor supply and costs, and interest rates.

Any pandemic or other public health emergency could also amplify the other risks and uncertainties described in this Annual Report on Form 10-K.

We cannot reasonably predict the ultimate impact of any pandemic or other public health emergency, including the extent of any adverse impact on our business, results of operations and financial condition, which will depend on, among other things, the duration and spread, the impact of governmental regulations that may be imposed in response, the effectiveness of actions taken to contain or mitigate the outbreak, the availability, safety and efficacy of vaccines, including against emerging variants of the infectious disease, and global economic conditions.

Supply chain disruptions could adversely affect our results of operations and financial condition.

Our supply chain could be disrupted by natural or human-induced events or conditions, such as power or telecommunications outage, security incident, terrorist attack, war, other geopolitical events, public health emergency, earthquake, extreme weather events, fire, flood, other natural disasters, transportation disruption, labor actions, raw materials shortages, financial problems or insolvency, trade regulations or actions, inadequate manufacturing capacity or utilization to meet demand, or other reasons beyond our control.

For example, the COVID-19 pandemic has disrupted certain suppliers’ operations and our ability to procure product to meet customer demand fully and timely, and may continue to do so in the future.

Our supply chain, including transportation availability, staffing, and cost, could be disrupted by natural or human-induced events or conditions, such as power or telecommunications outage, security incident, terrorist attack, war, other geopolitical events, public health emergency, earthquake, extreme weather events, fire, flood, other natural disasters, transportation disruption, labor actions, including strikes, raw materials shortages, financial problems or insolvency, trade regulations or actions, inadequate manufacturing capacity or utilization to meet demand, or other reasons beyond our control.

For example, the COVID-19 pandemic disrupted certain suppliers’ operations and our ability to procure product to meet customer demand fully and timely.

When we can find acceptable alternate sources for certain products, they may cost more.

19 unchanged sentences

This presence outside the U.S.

increases risks associated with exposure to more volatile economic conditions, political instability, cultural and legal differences in conducting business (including corrupt practices), economic and trade policy actions, and currency exchange fluctuations.

increases risks associated with exposure to more volatile economic conditions, political

instability, cultural and legal differences in conducting business (including corrupt practices), economic and trade policy actions, and currency exchange fluctuations.

Our foreign operations' results are reported in the local currency and then translated into U.S.

39 unchanged sentences

A disruption or security breach could materially affect our business, financial condition, or results of operation.

We depend on information systems to, among other things, process customer orders, manage inventory and accounts receivable collections, purchase products, manage accounts payable processes, ship products to customers on a timely basis, maintain cost-effective operations, provide superior service to customers, conduct business communications, and compile financial

We depend on information systems to, among other things, process customer orders, manage inventory and accounts receivable collections,

purchase products, manage accounts payable processes, ship products to customers on a timely basis, maintain cost-effective operations, provide superior service to customers, conduct business communications, and compile financial results.

A serious, prolonged disruption of our information systems, due to man-made or natural causes, including power or telecommunications outage, or breach in security, could materially impair fundamental business processes and increase expenses, decrease sales, or otherwise reduce earnings.

33 unchanged sentences

Any of the foregoing events or circumstances relating to our indebtedness may adversely affect our business, financial position, or results of operations and may cause our stock price to decline.

Although the credit market turmoil of a decade ago did not have a significant adverse impact on our liquidity or borrowing costs, the availability of funds tightened and credit spreads on corporate debt increased.

If credit market

volatility were to return, obtaining additional or replacement financing could be more difficult and the cost of issuing new debt or replacing a credit facility could be higher than under our current facilities.

Tight credit conditions could limit our ability to finance acquisitions on terms acceptable to us.

In addition, the increase in interest rates has created some tightening in the credit markets.

If credit markets continue to tighten, or if it creates credit market volatility, obtaining additional or replacement financing could be more difficult and the cost of issuing new debt or replacing a credit facility could be higher than under our current facilities.

For more information regarding borrowing and interest rates, see the following sections below:

18 unchanged sentences

Although we believe these estimates and assumptions are reasonable and reflect market conditions forecasted at the assessment date, any changes to these assumptions and estimates due to market conditions or otherwise may lead to an outcome where impairment charges would be required in future periods.

We may be adversely affected by changes to interest rates on our borrowings.

Financial Conduct Authority, which regulates the London Interbank Offered Rate (“LIBOR”), announced in 2017 that it will no longer persuade or require banks to submit rates for LIBOR after 2021.

At the end of 2021, the ICE Benchmark Administration, the administrator for LIBOR, ceased publishing one-week and two-month U.S.

dollar LIBOR and will cease publishing all remaining U.S.

dollar LIBOR tenors after June 30, 2023.

Any of our LIBOR-based borrowings that extend beyond June 30, 2023 will need to be converted to a replacement rate prior to that date.

Possible replacement rates include the Secured Overnight Financing Rate (SOFR).

Uncertainty as to the nature of such phase out and selection of an alternative reference rate, together with disruption in the financial markets, could increase the cost of our indebtedness that is currently tied to LIBOR.

GENERAL RISK FACTORS

2 unchanged sentences

We may have difficulty identifying and hiring qualified personnel.

In addition, we may have difficulty retaining such personnel once hired, and key people may leave and compete against

In addition, we may have difficulty retaining such personnel once hired, and key people may leave and compete against us.

With respect to sales and customer service positions in particular, we greatly benefit from having employees who are familiar with the products and services we sell, and their applications, as well as with our customer and supplier relationships.

3 unchanged sentences

We are subject to a wide array of laws and regulations.

Changes in the legal and regulatory environment in which we operate, including with respect to taxes, international trade, employment laws, and data privacy, could adversely and materially affect the Company.

Changes in the legal and regulatory environment

in which we operate, including with respect to taxes, international trade, employment laws, and data privacy, could adversely and materially affect the Company.

In addition, from time to time, we are involved in lawsuits or other legal proceedings that arise from our business.

12 unchanged sentences

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