What changed in this filing

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Item 1A. Risk Factors

2021-02-26 compared with 2020-02-28 · 43 added, 20 removed, 237 unchanged (21% of the section changed)

2 unchanged sentences

Risks related to our business

A sustained market slowdown due to the impacts from the COVID-19 pandemic could have a material and adverse effect on our results of operations, financial condition and cash flows.

The COVID-19 pandemic caused a significant downturn in our markets globally and these challenging market conditions could continue for an extended period of time.

There is still much uncertainty as to when our markets will fully recover.

If any or all of our major markets were to endure a sustained slowdown or recession due to the impacts of the COVID-19 pandemic, other public health crises, epidemics or pandemics or otherwise decline, it could have a material adverse effect on our results of operations, financial condition and cash flows.

In addition, the impact of COVID-19 on macroeconomic conditions may negatively affect the proper functioning of financial and capital markets, foreign currency exchange rates, commodity and energy prices, and interest rates.

Even after the COVID-19 pandemic has subsided, we may continue to experience material adverse impacts to our business as a result of any economic recession or depression that has occurred or may occur in the future.

Moreover, the effects of the COVID-19 pandemic will heighten the other risks described throughout this section.

Our manufacturing and supply chain capabilities may be materially and adversely impacted as a result of the ongoing COVID-19 pandemic which could materially and adversely affect our results of operations, financial condition and cash flows.

The COVID-19 pandemic triggered a significant downturn in our markets globally, which continued to unfavorably impact market conditions throughout 2020 and these challenging market conditions could continue for an extended period of time.

We have experienced ongoing operational interruptions as a result of the pandemic, including the temporary suspension or reduced capacity of operations due to health concerns and government imposed restrictions, which had an adverse effect on the productivity and profitability of such manufacturing facilities, and in turn had an adverse effect on our business and financial results in 2020.

We have also experienced various ongoing supply chain disruptions as a result of the pandemic.

Despite the partial recovery of our markets in the second half of 2020, the ongoing spread of the virus prior to widespread vaccination presents several risks to our business.

The duration of production and supply chain disruptions, and related financial impacts that result from the pandemic, cannot be estimated at this time.

Should the reduced manufacturing and distribution capacities continue for an extended period of time or worsen, the impacts on our production and supply chain could have a material adverse effect on our results of operations, financial condition and cash flows.

Deterioration of industry conditions could harm our business, results of operations and financial condition.

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• limits on agricultural imports/exports.

Some or all of the above factors may be negatively impacted or magnified by the ongoing COVID-19 pandemic.

A downturn in general economic conditions and outlook in the United States and around the world could adversely affect our net sales and earnings.

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Slow or negative growth rates, inflationary/deflationary pressures, higher commodity costs and energy prices, reduced credit availability or unfavorable credit terms for our dealers and end-user customers, increased unemployment rates, and recessionary economic conditions and outlook could cause consumers to reduce spending, which may cause them to delay or forgo purchases of our products and could have an adverse effect on our net sales and earnings.

In addition, the spread of the coronavirus may also have adverse impacts on global economic activity which could negatively impact our revenues.

The exit by the U.K.

from the European Union (“Brexit”) and the impact of the withdrawal may adversely affect business activity, political stability and economic conditions in the U.K., the European Union and elsewhere.

In addition, the ongoing effects of the COVID-19 pandemic may continue to adversely affect global economic activity which could negatively impact our revenues.

The U.K.'s exit from the European Union (“Brexit”) and the impact of the withdrawal may adversely affect business activity, political stability and economic conditions in the U.K., the European Union and elsewhere.

Our business in Europe may suffer from shipment delays, supply chain disruptions, tariffs or other effects that could negatively impact our business.

The economic conditions and outlook could be further adversely affected by the uncertainty concerning new or modified trading arrangements between the U.K.

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Significant changes in trade policy and related trade wars could have a material adverse impact on our results of operations.

The current administration continues to make potentially significant changes in U.S.

trade policy and has taken certain actions that have adversely impacted U.S.

continues to make potentially significant changes in its trade policy and has taken certain actions that have adversely impacted U.S.

trade and relationships with China and other trading partners, including imposing tariffs on certain goods imported into the U.S.

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We depend on governmental sales and a decrease in such sales could adversely affect our business, results of operations and financial condition.

A substantial portion of our revenues is derived from sales to federal, state and local governmental entities and related contractors, both in the U.S.

A substantial portion of our revenues is derived from sales to federal, state, provincial and local governmental entities and related contractors, both in the U.S.

and in other countries in which we sell our products.

These sales depend primarily on the levels of budgeted and appropriated expenditures for highway, airport, roadside and parks maintenance by various governmental entities and are affected by changes in local and national economic conditions.

Federal, state, provincial and local government budgets have been and will likely continue to be negatively affected by the COVID-19 pandemic and this could have a material negative impact on our business and financial condition.

Our dependence on, and the price and availability of, raw materials as well as purchased components may adversely affect our business, results of operations and financial condition.

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In addition, higher energy costs could negatively affect spending by farmers, including their purchases of our products.

In addition, a sudden and unrestrained outbreak of human disease could cause disruptions in our supply chain.

For example, in 2020 we may experience delays in obtaining or an inability to obtain certain important components from our Chinese suppliers because of a rapid spread of the coronavirus in that country and potential reductions in manufacturing output.

In 2020 we experienced delays in obtaining certain important components from our suppliers due to operational disruptions resulting from the COVID-19 pandemic.

We may experience delays, shortages, price increases or other supply chain disruptions as a result of the ongoing COVID-19 pandemic which could have a material adverse effect on our business and financial results.

Impairment in the carrying value of goodwill could negatively impact our consolidated results of operations and net worth.

The Company estimates the fair value of its reporting units using a discounted cash flow analysis.

The Company has conducted for the last three years an analysis for estimating the fair value of the Company's business enterprise.

We have utilized the discounted cash flow income approach and market approach for which we chose to heavily weigh more on the discounted cash flow approach.

This analysis requires the Company to make significant assumptions and estimates about the extent and timing of future cash flows, discount rates and growth rates.

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The Company also utilizes market valuation models and other financial ratios, which require the Company to make certain assumptions and estimates regarding the applicability of those models to its assets and businesses.

As of December 31, 2019, goodwill was $198,022,000, which represents 16% of total assets.

As of December 31, 2020, goodwill was $195.1 million, which represents 18% of total assets.

The Company recognized no goodwill impairment in 2020, 2019 or 2018.

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These information technology systems (some of which are provided and maintained by third parties) may be susceptible to damage, disruptions, or shutdowns due to hardware failures, computer viruses, hacker attacks, telecommunication failures, user errors, catastrophic events or other factors.

In addition, as a result of the COVID-19 pandemic and resulting government actions to restrict movement, a number of our salaried employees are working remotely at various times.

This remote working environment may pose a heightened risk for security

breaches or other disruptions of our information technology systems.

If our information technology systems suffer severe damage, disruption or shutdown, and our business continuity plans do not effectively resolve the issues in a timely manner, we could experience business disruptions, transaction errors, processing inefficiencies, and the loss of customers and sales, causing our product sales, financial condition, and operating results to be adversely affected and the reporting of our financial results to be delayed.

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Cybersecurity threats and sophisticated computer crime pose a potential risk to the security of the Company’s information technology systems, networks, and services, as well as the confidentiality and integrity of the Company’s data and intellectual property.

Cyber-attacks, security breaches, and other cyber incidents could include, among other things, computer viruses, malicious or destructive code, ransomware, social engineering attacks (including phishing and impersonation), hacking, denial-of-service attacks, and other

similar attacks.

Sensitive information is also stored by our vendors and on the platforms and networks of third-party providers.

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GDPR extends the scope of the existing EU data protection law to foreign companies processing personal data of EU residents.

The regulation imposes a strict data protection compliance regime with severe penalties of 4% of worldwide turnover or €20,000,000, whichever is greater, and includes new rights such as the right of erasure of personal data.

The regulation imposes a strict data protection compliance regime with severe penalties of 4% of worldwide turnover or €20.0 million, whichever is greater, and includes new rights such as the right of erasure of personal data.

Although the GDPR applies across the EU, as has been the case under the current data protection regime, EU Member States have some national derogations and local data protection authorities (“DPAs”) will still have the ability to interpret the GDPR, which has the potential to create inconsistencies on a country-by-country basis.

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We believe that we are able to compete successfully in our markets by, to some extent, avoiding direct competition with significantly larger potential competitors.

There can be no assurance that our competitors will not substantially increase the resources devoted to the development and marketing of products competitive with our products or that new competitors with greater resources will not enter our markets.

resources will not enter our markets.

Any failure to effectively compete could have an adverse effect on our business, results of operations and financial condition.

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To date, a material portion of our growth has come through acquisitions.

We cannot be certain that we will be able to identify attractive acquisition targets, obtain financing for acquisitions on satisfactory terms or successfully acquire identified targets.

We cannot be certain

that we will be able to identify attractive acquisition targets, obtain financing for acquisitions on satisfactory terms or successfully acquire identified targets.

Competition for acquisition opportunities may also increase our costs of making acquisitions or prevent us from making certain acquisitions.

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In attempting to achieve efficient utilization of manpower and facilities throughout the year, we estimate seasonal demand months in advance and manufacturing capacity is scheduled in anticipation of such demand.

We utilize an annual plan with updated quarterly sales forecasts provided by our marketing divisions and order backlog in order to develop a production plan for our manufacturing facilities.

We utilize an annual plan with updated quarterly sales forecasts provided by our marketing divisions and order backlog in order to develop a

production plan for our manufacturing facilities.

In addition, many of our marketing departments attempt to equalize demand for their products throughout the calendar year by offering seasonal sales programs which may provide additional incentives, including discounts and extended payment terms, on equipment that is ordered during off-season periods.

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For instance, the EPA has adopted increasingly stringent engine emission regulations, including Tier 4 emission requirements applicable to diesel engines in specified horsepower ranges that are used in some of our products.

As of January 1, 2012, such requirements expanded to additional horsepower categories and, accordingly, apply to more of the products we sell.

While we have developed and implemented plans to achieve full and timely compliance with these requirements, our ability to meet the Tier 4 requirements is subject to many variables, some of which are beyond our direct control.

Requirements have expanded to additional horsepower categories and, accordingly, apply to more of the products we sell.

Our ability to meet the Tier 4 requirements is subject to many variables, some of which are beyond our direct control.

If we fail to meet the Tier 4 requirements and any other EPA emission standards that are currently in place or that may be introduced in the future, our ability to sell our products into the market may be limited, which could have a material adverse effect on our competitive position and financial results.

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We cannot assure you that we will not experience any material product liability losses in the future or that we will not incur significant costs to defend the Company against such claims.

While we currently have product liability insurance, we cannot assure you that our product liability insurance coverage will be adequate for any liabilities that may ultimately be incurred or that it will continue to be available on terms acceptable to us.

We cannot assure you that our product liability insurance coverage will be adequate for any liabilities that may ultimately be incurred or that it will continue to be available on terms acceptable to us.

A successful claim brought against us in excess of available insurance coverage or a requirement to participate in a product recall may have a materially adverse effect on our business.

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In addition, other regulators have suggested reforming or replacing other benchmark rates.

The discontinuation, reform, or replacement of LIBOR or any other benchmark rates may result in fluctuating interest rates that may have a negative impact on our interest expense and our profitability.

Although on November 30, 2020, the Intercontinental Exchange’s Benchmark Administration (“IBA”) announced consultation on the possible extension of the publication of USD LIBOR for key tenors through June 30,

2023, to allow certain legacy LIBOR-indexed contracts to mature without disruption, there is no certainty as to the outcome of such consultation.

The discontinuation, reform, or replacement of LIBOR, including with the Secured Overnight Financing Rate identified by the Alternative Reference Rate Committee as the alternative reference rate for US dollar LIBOR, or any other benchmark rates, may result in fluctuating interest rates that may have a negative impact on our interest expense and our profitability.

Risks related to investing in our common stock

34 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