What changed in this filing

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Item 1A. Risk Factors

2024-02-22 compared with 2023-02-23 · 22 added, 37 removed, 239 unchanged (20% of the section changed)

3 unchanged sentences

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

The strength and profitability of our business depends on the overall demand for our products and upon economic conditions and outlook, including but not limited to economic growth rates, consumer spending levels, financing availability, pricing and terms for our dealers and end-users, employment rates, interest rates, inflation, consumer confidence and general economic and political conditions and expectations in the United States and the

other economies in which we conduct business.

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.

28 unchanged sentences

If our price increases are not accepted by our customers and the market or we are not able to realize anticipated manufacturing efficiencies, our net sales, profit margins, earnings, and market share could be adversely affected.

Further, if we are unavailable to timely source items such as truck chassis, engines, hydraulics and other critical components our business, results of operations and financial condition may be adversely affected.

The COVID-19 pandemic may continue to materially and adversely affect our business, results of operations and financial condition.

The COVID-19 pandemic caused a significant downturn in our markets and subsequently caused significant market volatility and operational challenges, among other things.

The extent and duration of ongoing impacts stemming from the pandemic will depend on numerous factors, including:

• global governmental, business and individual actions taken in response to COVID-19;

• the effect on our suppliers and companies throughout our supply chain to meet supply commitments, requirements, and/or demands and our ability to continue to obtain commodities, components, parts, and accessories on a timely basis and at anticipated costs;

• the effect on our dealers, distributors, and other channel partners and customers, including reduced or constrained budgets and cash preservation efforts;

• our ability to fulfill existing and future sales order backlog;

• potential effects the pandemic may have on our available labor force;

• increasing logistics costs and transportation challenges;

While our markets appear to have recovered from the more direct negative impacts of the pandemic, the longer term effects of the pandemic, including supply chain disruptions, purchased component shortages, and inflationary pressures are unknown and could have a material adverse effect on our business, results of operations and financial results.

Further, if we are unable to timely source items such as truck chassis, engines, hydraulics and other critical components our business, results of operations and financial condition may be adversely affected.

Skilled labor shortages or our inability to retain qualified employees could adversely affect our operations.

3 unchanged sentences

Shortages of skilled labor, such as welders and machine operators, are ongoing and could negatively affect our production capabilities, lead to production inefficiencies, or increase our cost of operating.

Labor shortages or increased labor costs could impair our ability to operate our business, meet customer commitments or grow our revenues, and could materially and adversely impact our business, results of operations and financial results.

Labor shortages or increased labor costs could impair our ability to

operate our business, meet customer commitments or grow our revenues, and could materially and adversely impact our business, results of operations and financial results.

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

2 unchanged sentences

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.

Federal, state, provincial and local government budgets were negatively affected by the COVID-19 pandemic and its resurgence or a similar pandemic or event could have a material negative impact on our business and financial condition.

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

has made significant changes in its trade policy and has taken certain actions that have adversely impacted U.S.

has made significant changes in its trade policy and has taken certain actions that have impacted U.S.

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

8 unchanged sentences

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, 2022, goodwill was $195.9 million, which represents 15% of total assets.

As of December 31, 2023, goodwill was $206.5 million, which represents approximately 15% of total assets.

The Company recognized no goodwill impairment in 2023, 2022 or 2021.

During the 2022 impairment analysis review, we performed a sensitivity analysis for goodwill impairment with respect to each of our reporting units and determined that a hypothetical 15% decline in the fair value of each reporting unit as of October 1, 2022 would not result in an impairment of goodwill for any of the reporting units.

If we were to have a significant goodwill impairment caused by a greater than 15% decline in fair value, it could impact our results of operations as well as our net worth.

If we were to have a significant goodwill impairment it could impact our results of operations as well as our net worth.

We are significantly dependent on information technology and our business may suffer from disruptions associated with information technology, cyber-attacks or other catastrophic losses affecting our IT infrastructure.

13 unchanged sentences

Cyber-attacks on the Company, our vendors, or our third-party providers could result in inappropriate access to our intellectual property, Company data, or personally identifiable information of our global workforce, suppliers, or customers.

increased insurance premiums, reputational damage that adversely affects customer or investor confidence, and damage to the Company’s competitiveness, stock price, and long-term shareholder value.

Potential consequences of a successful cyber-attack or other cybersecurity breach or incident include remediation costs, legal costs, increased cybersecurity protection costs, lost revenues resulting from the unauthorized use of proprietary information or the failure to retain or attract customers following an attack, litigation and legal risks including governmental or regulatory enforcement actions, increased insurance premiums, reputational damage that adversely affects customer or investor confidence, and damage to the Company’s competitiveness, stock price, and long-term shareholder value.

While we have taken steps to address these risks by implementing enhanced security technologies, internal controls, and business continuity plans, these measures may not be adequate.

7 unchanged sentences

states have enacted privacy and data protection laws.

For example, the State of California enacted the California Consumer Privacy Act ("CCPA") which became effective in 2020.

Implementation of, and compliance with, the GDPR, CCPA and other similar laws could increase our cost of doing business and/or force us to change our business practices in a manner adverse to our business.

In addition, violations of the GDPR, CCPA and other laws may result in significant fines, penalties and damage to our brand and business which could, individually or in the aggregate, materially harm our business and reputation.

For example, the State of California enacted the California Consumer Privacy Act ("CCPA") which became effective in 2020 and was further amended and extended by the California Privacy Rights Act ("CPRA") which became effective in 2023.

Implementation of, and compliance with, the GDPR, CCPA, CPRA, and other similar laws could increase our cost of doing business and/or force us to change our business practices in a manner adverse to our business.

In addition, violations of the GDPR, CCPA, CPRA, and other laws may result in significant fines, penalties and damage to our brand and business which could, individually or in the aggregate, materially harm our business and reputation.

Privacy legislation, enforcement and policy activity in this area continues to rapidly expand.

6 unchanged sentences

Some of our competitors are significantly larger than we are and have substantially greater financial and other resources at their disposal.

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

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.

40 unchanged sentences

Acquisitions are an important part of our growth strategy and we have completed a number of acquisitions over the past several years.

In 2019, we completed three acquisitions, namely Dutch Power, Dixie Chopper, and Morbark, and in 2021 we acquired Timberwolf.

We acquired Timberwolf in 2021 and Royal Truck in 2023.

Acquisitions can be difficult, time-consuming, and pose a number of risks, including:

28 unchanged sentences

Weather conditions and general economic conditions may affect the timing of purchases and actual industry conditions might differ from our forecasts.

In addition to seasonal factors, the agricultural industry is cyclical in nature with sales largely dependent on the state of the farm economy and, in particular, agriculture commodity

prices and farm income.

In addition to seasonal factors, the agricultural industry is cyclical in nature with sales largely dependent on the state of the farm economy and, in particular, agriculture commodity prices and farm income.

Consequently, sudden or significant declines in industry demand could adversely affect our working capital or results of operations.

17 unchanged sentences

The products we manufacture or sell, particularly engines, are subject to increasingly stringent environmental emission regulations.

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.

For instance, the EPA 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.

State agencies, including the California Air Resources Board ("CARB"), are also adopting emission regulations that apply to products we sell.

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.

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

If we fail to meet the Tier 4 or CARB requirements and any other EPA or state 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.

We are subject to environmental, health and safety and employment laws and regulations and related compliance expenditures and liabilities.

storage, transportation, treatment and disposal of hazardous substances and waste materials, as well as the remediation of contamination associated with releases of hazardous substances at the Company’s facilities and offsite disposal locations, workplace safety and equal employment opportunities.

Like other manufacturers, the Company is subject to a broad range of federal, state, local and foreign laws and requirements, including those concerning air emissions, discharges into waterways, and the generation, handling, storage, transportation, treatment and disposal of hazardous substances and waste materials, as well as the remediation of contamination associated with releases of hazardous substances at the Company’s facilities and offsite disposal locations, workplace safety and equal employment opportunities.

These laws and regulations are constantly changing, and it is impossible to predict with accuracy the effect that changes to such laws and regulations may have on the Company in the future.

53 unchanged sentences

Certain stockholders own a significant amount of our common stock, and their interests may conflict with those of our other stockholders.

As of December 31, 2022, six investors - BlackRock, Inc., Henry Crown and Company, Dimensional Fund Advisors LP, T.

Rowe Price Associates, Inc., Victory Capital Management Inc., and The Vanguard Group - beneficially owned approximately 50% of our outstanding common stock.

As of December 31, 2023, four investors - Henry Crown and Company, BlackRock, Inc., Dimensional Fund Advisors LP, and The Vanguard Group - beneficially owned approximately 40% of our outstanding common stock.

As a result, the major stockholders combined could be able to significantly influence the direction of the Company, the election of our Board of Directors, and the outcome of any other matter requiring stockholder approval, including mergers, consolidations and the sale of all or substantially all of our assets, and together with other beneficially owned investors, to prevent or cause a change in control of the Company.

2 unchanged sentences

The interests of the major stockholders may conflict with the interests of our other stockholders.

Unresolved Staff Comments

The Company has no unresolved staff comments to report pursuant to Item 1B.

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