What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2022-02-28 compared with 2021-03-01 · 69 added, 82 removed, 226 unchanged (40% of the section changed)

9 unchanged sentences

Risks Related to the COVID-19 Pandemic

The COVID-19 pandemic resulted in additional risks that could materially adversely affect our business, financial condition, results of operations and/or cash flows.

COVID-19 was identified in late 2019 and has spread globally adversely impacting economic activity and conditions worldwide.

The pandemic has also resulted in governments and other authorities implementing numerous measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter in place orders and business closures.

These measures have impacted and may further impact all or portions of our workforce and operations and the operations of customers and suppliers.

Countries around the world have been affected by the pandemic and have taken containment actions.

Considerable uncertainty exists regarding the impact of future measures.

Restrictions on access to our manufacturing facilities or on the support operations or workforce, or similar limitations for suppliers and dealers, restrictions or disruptions of transportation, port closures, increased border controls or closures, and material and component shortages have limited and could continue to limit our ability to meet customer demand, which could have a material adverse effect on our financial condition, cash flows and results of operations.

There is no certainty that measures taken by governmental authorities will be sufficient to mitigate the risks posed by the virus, and our ability to perform critical functions could be harmed.

The COVID-19 pandemic has also significantly increased economic and demand uncertainty and has led to disruption and volatility in demand for our products and services, suppliers' ability to fill orders, and global capital markets.

Economic uncertainties could continue to affect demand for our products and services, the value of the equipment financed or leased, the demand for financing and the financial condition and credit risk of our dealers and customers.

The economic global uncertainty resulting from COVID-19 has also resulted in increased currency volatility that has resulted in adverse currency rate fluctuations.

There is no guarantee when an economic recovery may occur or the strength of that economic recovery.

Uncertainties related to the magnitude and duration of the COVID-19 pandemic may materially adversely affect our business and outlook.

These uncertainties include:

The COVID-19 pandemic continues to present risks that have and could continue to materially and adversely affect our business, financial condition, results of operations and/or cash flows.

The emergence of the COVID-19 pandemic has significantly impacted our operations.

Throughout 2020, our operations were adversely effected by significantly weakened demand for our products given the global economic uncertainty resulting from the pandemic.

While demand for our products has recovered throughout the pandemic, our operations continue to be adversely affected by the contributory effects of the pandemic, including supply chain disruptions, higher supply costs, including, in particular, higher steel costs, and labor shortages, disruptions and higher labor costs and longer contracting times.

Furthermore, any future governmental measures taken in response to the pandemic, including travel bans and restrictions, quarantines, shelter in place orders and business closures or vaccine mandates, could further impact our operations as well as demand for our products.

Restrictions on access to our manufacturing facilities or on the support operations or workforce, or similar limitations for suppliers and dealers, as well as restrictions or disruptions of transportation, port closures, increased border controls or closures, and material and component supply shortages have limited and could continue to limit our ability to meet customer demand, which could have a material adverse effect on our financial condition, cash flows and results of operations.

There is no certainty that current or future measures taken by governmental authorities will be sufficient to mitigate the risks posed by the virus, and our ability to perform critical functions could be harmed.

Uncertainties related to the continuing impact of the COVID-19 pandemic on our business include:

the duration and impact of the resurgence in COVID-19 cases (including as a result of new variants of the virus) and the efficacy of the COVID-19 vaccination program in any country, state, or region;

prolonged reduction or closure of our operations, or a delayed recovery in our operations;

additional closures as mandated or otherwise made necessary by governmental authorities;

disruptions in the supply chain and a prolonged delay in resumption of operations by one or more key suppliers, or the failure of any key suppliers;

additional closures as mandated or otherwise made necessary or advisable by governmental authorities;

disruptions in the supply chain and a prolonged delay in resumption of operations by one or more key suppliers, or the failure of any key suppliers to deliver products;

our ability to meet commitments to our customers on a timely basis as a result of increased costs and supply challenges;

2 unchanged sentences

delays in our strategic initiatives as a result of reduced spending on research and development;

additional operating costs and inefficiencies due to remote working arrangements, adherence to social distancing guidelines and other COVID-19 related challenges;

additional operating costs and inefficiencies due to remote working arrangements, adherence to social distancing guidelines and other pandemic related workplace challenges;

absence of employees due to illness;

the impact of the pandemic on our customers and dealers, and their delays in their plans to invest in new equipment;

the impact of the pandemic on our customers and dealers business operations, and their delays in their plans to invest in new equipment;

requests by our customers or dealers for payment deferrals and contract modifications;

the impact of disruptions in the global capital markets and/or declines in our financial performance, outlook or credit ratings, which could impact our ability to obtain funding in the future;

and the impact of the pandemic on demand for our products and services as discussed above.

It is unclear when a sustained economic recovery could occur and what a recovery may look like.

All of these factors could materially and adversely affect our business, liquidity, results of operations and financial position.

The ultimate magnitude of COVID-19 effects, including the extent of its impact on our financial and operational results, which could be material, will be determined by the length of time that the pandemic continues, its effect on the demand for our products and services and the supply chain, as well as the effect of governmental regulations imposed in response to the pandemic.

We cannot at this time predict the impact of the COVID-19 pandemic, but it could have a material adverse effect on our business, financial condition, results of operations and/or cash flows.

currency fluctuations and volatility resulting from economic uncertainty due to the pandemic's global impacts;

and the impact of the pandemic on demand for our products and services.

All of these factors could materially and adversely affect our business, liquidity, results of operations and financial position and the ultimate magnitude of COVID-19 related effects is dependent on these uncertainties.

As a result, we cannot at this time predict the impact of the COVID-19 pandemic, but it could have a continuing material and adverse effect on our business, financial condition, results of operations and/or cash flows.

Furthermore, the COVID-19 pandemic could heighten the other risks and uncertainties set forth in the risk factors below.

Please also see the discussion on our response to COVID-19 in Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations of this report and Item 1.

Business of this report, "Human Capital Resources and Management".

Economic and Industry Risks

Downturns in the general economy or the commercial and residential construction industries may adversely affect our revenues and operating results.

General economic downturns, including downturns in the commercial and residential construction industries, could result in a material decrease in our revenues and operating results.

Sales of our products are sensitive to the states of the U.S., foreign and regional economies in general, and in particular, changes in commercial construction spending and government infrastructure spending.

Downturns in the general economy or decreases in commercial and residential construction spending or government infrastructure spending may adversely affect our revenues and operating results.

General economic downturns, including downturns in government infrastructure spending and the commercial and residential construction industries, could result in a material decrease in our revenues and operating results.

Sales of our products are sensitive to the specific locations and regional economies in which they are sold in general, and in particular, changes in commercial construction spending and government infrastructure spending.

In addition, many of our costs are fixed and cannot be quickly reduced in response to decreased demand.

16 unchanged sentences

This program provides funding to improve the nation's roadway system.

In December 2015, the U.S.

government enacted a five-year, $305 billion highway-funding bill (the "FAST Act") to fund highway and bridge projects.

The FAST Act expired September 30, 2020, and a one-year extension that maintains current funding levels has been approved by Congress.

Matching funding from the various states may be required as a condition of federal funding.

Given the inherent uncertainty in the political process, the level of government funding for federal highway projects will similarly continue to be uncertain.

Governmental funding that is committed or earmarked for federal highway projects is always subject to repeal or reduction.

Although continued funding under the FAST Act is expected, it may be at lower levels than originally approved.

In addition, Congress could pass legislation in future sessions that would allow for the diversion of previously appropriated highway funds for other national purposes, or it could restrict funding of infrastructure projects unless states comply with certain federal policies.

In November 2021, the U.S.

government enacted the Infrastructure Investment and Jobs Act ("IIJA").

The IIJA allocates $548 billion in government spending to new infrastructure over the five-year period concluding in 2026, with certain amounts specifically allocated to fund highway and bridge projects.

Governmental funding that is committed or earmarked for federal highway projects is always subject to political decision making that may result in repeal or reduction.

Congress could pass legislation in future sessions that would allow for the diversion of previously appropriated highway funds for other national purposes, or it could restrict funding of infrastructure projects unless states comply with certain federal policies.

The cyclical nature of our industry and the customization of the equipment we sell may cause adverse fluctuations to our revenues and operating results.

We sell equipment primarily to contractors whose demand for equipment depends greatly upon the volume of road or utility construction projects underway or to be scheduled by both government and private entities.

The volume and frequency of road and utility construction

projects are cyclical;

The volume and frequency of road and utility construction projects are cyclical;

therefore, demand for many of our products is cyclical.

4 unchanged sentences

Global interest rates have recently been at or near historic lows resulting in historically low financing costs for construction projects.

While we expect rates to remain low in the near-term, rising interest rates could have a dampening effect on overall economic activity and/or the financial condition of our customers, either or both of which could negatively affect customer demand for our products and customers’ ability to repay obligations to us.

While we expect rates to remain relatively low in the near-term, rising interest rates could have a dampening effect on overall economic activity and/or the financial condition of our customers, either or both of which could negatively affect customer demand for our products and customers' ability to repay obligations to us.

An increase in interest rates could also make it more difficult for customers to cost-effectively fund the purchase of new equipment, which could adversely affect our sales.

12 unchanged sentences

Both the sales from international operations and export sales are subject in varying degrees to risks inherent in doing business outside of the United States.

Such risks include the possibility of unfavorable circumstances arising from host country laws or regulations including privacy laws protecting personal data, changes in tariff and trade barriers and import or export licensing requirements.

Such risks include the possibility of unfavorable circumstances arising from host country laws or regulations and general economic and political conditions in the countries we do business, which are typically more volatile than the U.S.

economy and more vulnerable to geo-political conditions.

In addition, the U.S.

24 unchanged sentences

the Brazilian real and the South African rand) and/or any weakening of local currencies can increase the cost of our products in foreign markets.

Irrespective of any effect on the overall demand for construction equipment, the effect of these changes can make our products less competitive relative to

local producing competitors or other non-U.S.

Irrespective of any effect on the overall demand for construction equipment, the effect of these changes can make our products less competitive relative to local producing competitors or other non-U.S.

competitors and, in extreme cases, can result in our products not being cost-effective for customers.

4 unchanged sentences

Changes in the availability and price of these parts, components and raw materials (including steel) have changed significantly and rapidly at times.

The availability and price of such items are affected by factors like demand, changes to international trade policies that may result in additional tariffs, duties or other charges, freight costs and outbreaks, each of which can significantly increase the costs of production.

Due to price competition in the market for construction equipment and certain infrastructure products, we may not be able to recoup increases in these costs through price increases for our products, which would result in reduced profitability.

Whether increased operating costs can be passed through to the customer depends on a number of factors, including the price of competing products.

The availability and price of such items are affected by factors like demand, changes to international trade policies that may result in additional tariffs, duties or other charges, freight costs and outbreaks and shipping and container constraints, each of which can significantly increase the costs of production.

Due to price competition in the market for construction equipment and certain infrastructure products which have longer contract to completion cycles, we may not be able to recoup increases in these costs through price increases for our products, which would result in reduced profitability.

Whether increased operating costs can be passed through to the customer depends on a number of factors, including the price of competing products and the nature of our customers' orders.

Further, we rely on a limited number of suppliers for steel and certain other raw materials, parts and components in the manufacturing process.

10 unchanged sentences

An increase of adverse weather events, including as a result of climate change, could generally reduce or delay construction activity, which could adversely impact our revenues.

Epidemics, pandemics, and other outbreaks (including the COVID-19 pandemic) can disrupt our operations and adversely affect our business, results of operations, and cash flows.

Epidemics, pandemics and other outbreaks of an illness, disease or virus (including COVID-19) have adversely affected, and could adversely affect in the future, workforces, customers, economies and financial markets globally, potentially leading to economic downturns.

The significance of the impact on our operations of an epidemic, pandemic or other outbreak depends on numerous factors that we may not be able to accurately predict or effectively respond to, including, without limitation:

the duration and scope of the outbreak;

actions taken by governments, businesses and individuals in response to the outbreak;

the effect on economic activity and actions taken in response;

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

and our ability to manufacture, sell and service our products, including without limitation as a result of supply chain challenges, facility closures, social distancing, restrictions on travel, fear or anxiety by the populace, and shelter‑in‑place orders.

These and other factors relating to or arising from an epidemic, pandemic or other outbreak could have a material adverse effect on our business, results of operations and cash flows, as well as the trading price of our securities.

Please also see the discussion on our response to COVID-19 in Part II, Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations of this report and Item 1.

Business of this report, "Human Capital Resources and Management".

Strategic Performance Risks

5 unchanged sentences

It is possible that we may not fully realize, or sustain, the expected benefits from the OneASTEC business model.

Furthermore, the implementation of the OneASTEC initiatives may result in an increase in short-term expenses and negatively impact operational effectiveness and employee morale.

Furthermore, the implementation of the OneASTEC initiatives may result in an increase in near-term expenses and negatively impact operational effectiveness and employee morale.

As part of our growth strategy, we may pursue acquisitions in the future and may not be successful in completing such acquisitions on favorable terms or be able to realize the anticipated benefits from such acquisitions.

We have historically grown, in large part, through strategic acquisitions, and our strategy is to continue to pursue attractive acquisition opportunities if and when they become available.

Failure to identify and acquire suitable acquisition candidates on appropriate terms could

adversely impact our growth strategy.

Failure to identify and acquire suitable acquisition candidates on appropriate terms could adversely impact our growth strategy.

In addition, although we have been successful in the past with the integration of numerous acquisitions, we may not be able to fully integrate the operations of any future acquired businesses with our own operations in an efficient and cost-effective manner or without significant disruption to our or the acquired companies’ existing operations.

23 unchanged sentences

However, in the future we may be unable to comply with the financial covenants in our credit facility or to obtain waivers with respect to such financial covenants.

If such violations occur, our creditors could elect to pursue their contractual remedies under the credit facility, including requiring immediate repayment in full of all amounts then outstanding.

If such violations occur, our creditors could elect to pursue their contractual remedies under the credit facility, including requiring immediate repayment in full of all amounts then outstanding and requiring cash collateral to support outstanding letters of credit.

As of December 31, 2021, we had no borrowings, but did have $2.5 million in letters of credit outstanding under the Wells Fargo credit agreement.

We may also borrow additional amounts under the credit agreement in the future.

Certain of our international subsidiaries in Africa, Australia, Brazil, Canada and Northern Ireland have entered into their own independent loan agreements with other lending institutions.

The expected phase out of LIBOR could impact the interest rates paid on our variable rate indebtedness and cause our interest expense to increase.

In July 2017, the United Kingdom's Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of calendar 2021.

Certain of our international subsidiaries in South Africa, Australia, Brazil and the United Kingdom have entered into their own independent loan agreements with other lending institutions.

The expected phase out of LIBOR could impact the interest rates paid on our variable rate indebtedness and customer financing subsidy arrangements and cause our interest expense to increase.

The ICE Benchmark Administration Limited, the authorized administrator of LIBOR, has confirmed its intention to cease the publication of the one month and three month USD LIBOR after June 30, 2023.

Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S.

financial institutions, is considering replacing LIBOR with the Secured Overnight Financing Rate ("SOFR"), a new index calculated based on transactions in the market for short-term treasury securities.

financial institutions, has endorsed replacing LIBOR with the Secured Overnight Financing Rate ("SOFR"), a new index calculated based on transactions in the market for short-term treasury securities.

Our borrowings under the Wells Fargo credit agreement reference one month USD LIBOR.

As of December 31, 2021, we had no borrowings but did have $2.5 million in letters of credit outstanding under the Wells Fargo credit agreement.

We may also borrow additional amounts under the credit agreement in the future.

If LIBOR ceases to exist, we may need to renegotiate certain of our financing agreements extending beyond calendar 2021 that utilize LIBOR as a factor in determining the interest rate.

We are evaluating the potential impact of the eventual replacement of the LIBOR benchmark interest rate, however, we are not able to predict whether LIBOR will cease to be available after

calendar 2021, whether SOFR will become a widely accepted benchmark in place of LIBOR or what the impact of such a possible transition to SOFR may be on our financial condition.

Additionally, we pay subsidies that are, or were, based on the one month or three month USD LIBOR to third party finance companies that reduce the borrowing rate for our customers that choose to finance the purchase of our products.

We have amended some of the arrangements mentioned above to reference SOFR instead of LIBOR and plan to amend the remaining such arrangements before June 30, 2023.

We are not able to predict whether SOFR will become a widely accepted benchmark in place of LIBOR or what the impact of such a possible transition to SOFR may be on our financial condition.

We are subject to income taxes in the United States and certain foreign jurisdictions, and changes to the tax codes, effective tax rates and accounting principles related thereto could negatively impact our results of operations.

7 unchanged sentences

We must test our goodwill and other intangible assets for impairment at least annually, which could result in a material, non-cash write-down of goodwill or intangible assets and could have a material adverse impact on our results of operations and shareholders' equity.

We recently completed a number of acquisitions and expect to continue to complete selected acquisitions in the future as a component of our growth strategy.

In connection with acquisitions, applicable accounting standards generally require the net tangible and intangible assets of the acquired business to be recorded on the balance sheet of the acquiring company at their fair values as of the date of acquisition.

We have completed a number of acquisitions and expect to continue to complete selected acquisitions in the future as a component of our growth strategy.

In connection with acquisitions, applicable accounting standards generally require the net tangible and intangible assets of the acquired business to be recorded in the balance sheet of the acquiring company at their fair values as of the date of acquisition.

As a result, any excess in the purchase price paid by us over the fair value of net tangible and intangible assets of any acquired business is recorded as goodwill.

2 unchanged sentences

If this occurs, we may be required under applicable accounting rules to write down the value of the assets or goodwill on our balance sheet to reflect the extent of any such impairment.

Any such write-down of assets or goodwill would generally be recognized as a non-cash expense in our consolidated statements of results of operations for the accounting period during which any such write down occurs.

Goodwill and intangible assets are subject to impairment assessments at least annually (or more frequently when events or changes in circumstances indicate that impairment may have occurred).

Any such write-down of assets or goodwill would generally be recognized as a non-cash expense in our results of operations for the accounting period during which any such write down occurs.

Goodwill and indefinite-lived intangible assets are subject to impairment assessments at least annually (or more frequently when events or changes in circumstances indicate that impairment may have occurred).

At October 1, 2021, our testing indicated no impairment had occurred.

7 unchanged sentences

Our ability to attract and retain qualified engineers, skilled manufacturing personnel and other professionals, either through direct hiring or acquisition of other businesses employing such professionals, will also be an important factor in determining our future success.

If we are unable to attract the most talented candidates, and cannot retain and engage additional highly qualified managerial, technical, manufacturing, and sales and marketing personnel by investing in their talent and personal development, our operational and financial performances could suffer.

In addition, while we strive to reduce the impact of the departure of high performing employees, we could be impacted by the loss of employees, particularly when departures involve groups of employees, such as voluntary and involuntary separation programs planned for 2021.

Employee-separation programs may adversely affect us through decreased employee morale, the loss of knowledge of departing employees and the allocation of resources to reorganizing and reassigning job roles and responsibilities.

Our ability to meet our business objectives may be affected by the departure of employees, and the expected cost savings of employee-separation programs may not be achieved due to delays or other factors.

The contributory effects of the COVID-19 pandemic have resulted in significant challenges in retaining and attracting sufficiently qualified personnel to enable us to meet customer demand efficiently resulting in longer lead times to convert backlog to revenue and materially and adversely impacting our margins.

Our ability to meet our business objectives may be affected by the departure of employees.

Further, the departure of groups of employees could increase the risk of claims or litigation from former employees.

5 unchanged sentences

As new employees gain experience in their roles, we could experience inefficiencies or a lack of business continuity due to loss of historical knowledge and a lack of familiarity of new employees with business processes, operating requirements, policies and procedures, some of which are new, and key information technologies and related infrastructure used in our day-to-day operations and financial reporting.

We may also experience additional costs as these new employees learn their roles and gain necessary

We may also experience additional costs as these new employees learn their roles and gain necessary experience.

It is important to our success that these new employees quickly adapt to and excel in their new roles.

1 unchanged sentence

In addition, if we were to lose the services of any one or more key employees, whether due to death, disability or termination of employment, our ability to successfully operate our business segments, financial plans, marketing and other objectives could be significantly impaired.

We do not currently have any long-term employment agreements in place with our executive officers or other employees, and our management has very minimal unencumbered equity ownership in us.

Our management has very minimal unencumbered equity ownership in us.

If we are not able to retain our key personnel or attract additional key personnel as required, we may not be able to implement our business plan, and our results of operations could be materially and adversely affected.

2 unchanged sentences

Competition for such personnel is intense, and we cannot assure that they will be available when required, or that we will have the ability to attract and retain them.

We have not entered into an employment agreement or similar arrangements with any of our executive officers.

As such, there are no contractual relationships guaranteeing that any of our executive officers will stay with us and continue our operations, and any of our executive officers can terminate their employment relationship with us at any time.

The loss of services of any one or more of these individuals may have a material and adverse effect on our Company and our business prospects.

8 unchanged sentences

Certain of our equipment is subject to rules limiting emissions and other climate related rules and regulation.

In addition, several of our products contain engines that must comply with environmental, health and safety laws or regulations, including performance standards, promulgated by the Environmental Protection Agency and other state regulatory agencies.

In addition, several of our products contain components that must comply with environmental, health and safety laws or regulations, including performance standards, promulgated by the Environmental Protection Agency and other state regulatory agencies.

These performance standards may change or become more stringent in the future.

5 unchanged sentences

From time to time, we may be involved in various legal proceedings that arise in the ordinary course of our business.

We are unable predict when claims or matters will arise and the extent to which they will affect our business, and the international nature of our business exposes us to legal and regulatory matters that arise in foreign jurisdictions as well.

We are unable to predict when claims or matters will arise and the extent to which they will affect our business, and the international nature of our business exposes us to legal and regulatory matters that arise in foreign jurisdictions as well.

We could incur significant expenses to administer and defend such matters, and any judgments or fines imposed on us could significantly impact our financial condition.

9 unchanged sentences

This could reduce demand for our products and materially decrease our revenues.

If our products are deemed to infringe upon the patents or proprietary rights of others, we could be required to modify the design of our products, change the name of our products or obtain a license for the use of some of the technologies used in our

We may be unable to do any of the foregoing in a timely manner, upon acceptable terms and conditions, or at all, and the failure to do so could cause us to incur additional costs or lose revenues.

13 unchanged sentences

The secure operation of these networks and the processing and maintenance of this information is critical to our business operations and strategy.

Despite our efforts to protect our systems and confidential information, we may be vulnerable to material security breaches, theft, misplaced, lost or corrupted data, programming errors, employee errors and/or malfeasance or other disruptions during the process of upgrading or replacing computer software or hardware, power outages, computer viruses, telecommunication or utility failures or natural disasters or other catastrophic events.

Despite our efforts to protect our systems and confidential information, we have experienced cybercrime in the past and may be vulnerable to material security breaches, theft, misplaced, lost or corrupted data, programming errors, employee errors and/or malfeasance or other disruptions during the process of upgrading or replacing computer software or hardware, power outages, computer viruses, telecommunication or utility failures or natural disasters or other catastrophic events.

The occurrence of any of these events could compromise our networks, and the information stored there could be accessed, publicly disclosed, modified, lost or stolen.

Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information, disrupted operations, production downtimes and damage our reputation, any of which could have an adverse effect on our business.

While we have not experienced any material losses relating to cybercrime or other information security breaches to date, there can be no assurance that we will not suffer such significant losses in the future.

We may not be able to successfully implement our strategic transformation initiatives, including our new enterprise resource planning system.

We have launched a multi-year phased implementation of a standardized enterprise resource planning ("ERP") system across our global organization, which will replace much of our existing disparate core financial systems.

The upgraded ERP will initially convert our internal operations, manufacturing, finance, human capital resources management and customer relationship systems to cloud-based platforms.

This new ERP system will provide for standardized processes and integrated technology solutions that enable us to better leverage automation and process efficiency.

An implementation of this scale is a major financial undertaking and has, and will continue to, require substantial time and attention of management and key employees.

We may not be able to successfully implement our ERP system without delays related to resource constraints or challenges with the critical design phases of the implementation.

Inefficiencies in our financial reporting processes due to the conversion to our new ERP could adversely affect our ability to produce accurate financial statements on a timely basis until the new ERP and processes have matured.

Additionally, the effectiveness of our internal control over financial reporting could be adversely affected if the new ERP is not successfully implemented.

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