What changed in this filing

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Item 1A. Risk Factors

2024-03-05 compared with 2023-03-10 · 103 added, 69 removed, 255 unchanged (40% of the section changed)

Our business faces many risks, and you should carefully consider the following risk factors, together with all of the other information included in this report, including the financial statements and related notes contained in Item 8 of this report, when deciding to invest in us.

Any of the risks discussed below, or elsewhere in this report or in our other SEC filings, could have a material impact on our business, financial condition or results of operations.

Additional risks not currently known to us or that we currently consider immaterial also may materially adversely affect our business, financial condition or results of operations in the future.

The loss of Boeing or Panasonic as major customers or a significant reduction in business with either of those customers would reduce our sales and earnings.

The loss of Boeing as a major customer or a significant reduction in business with this customer would reduce our sales and earnings.

In 2023, 2022, and 2021 we had a concentration of sales to Boeing representing approximately 11.0%, 11.0%, and 10.0% of our sales, respectively.

In 2020, we also had a concentration of sales to Panasonic representing approximately 11.1% of our sales.

Revenue earned from sales to Boeing or Panasonic may decline or fluctuate significantly in the future.

We may not be able to offset any decline in sales from Boeing or Panasonic with sales from new customers or other existing customers.

The loss of these customers or a significant reduction in business with them would significantly reduce our sales and earnings.

Accordingly, a portion of our potential for success will depend on our continued ability to develop and manage our relationships with Boeing and Panasonic.

Revenue earned from sales to Boeing may decline or fluctuate significantly in the future.

We may not be able to offset any decline in sales from Boeing with sales from new customers or other existing customers.

The loss of this customer or a significant reduction in business with them would significantly reduce our sales and earnings.

Accordingly, a portion of our potential for success will depend on our continued ability to develop and manage our relationship with Boeing.

The markets we serve are cyclical and sensitive to domestic and foreign economic conditions, conflicts and events, which may cause our operating results to fluctuate.

The markets we serve are sensitive to fluctuations in general business cycles, global pandemics, domestic and foreign governmental tariffs, trade and monetary policies, national and international conflicts, and economic conditions and events, and are facing varying levels of pressure from the COVID-19 pandemic.

The COVID-19 pandemic drastically reduced air traffic as travel restrictions and social distancing measures were implemented to help control the spread of the virus.

domestic air travel has recovered, international travel utilizing wide-body aircraft will take longer to fully recover.

Furthermore, as companies and employees become accustomed to working remotely, business travel and the associated flight hours may not reach the pre-pandemic levels.

As such, OEMs may continue to directionally match their wide-body aircraft production rates with the reduced, albeit recovering, air traffic volume, which could lower demand for our products.

If the pandemic worsens or there is significant uncertainty in the commercial aerospace industry’s recovery, we may find it difficult to access our existing financing or obtain additional financing and/or fund our operations and meet our debt service obligations.

Domestic air travel has recovered from the impact of the COVID-19 pandemic, and international travel utilizing primarily widebody aircraft is close to pre-pandemic levels.

If a global health crisis, similar to the COVID-19 pandemic, we to occur in the future, we may find it difficult to access our existing financing or obtain additional financing and/or fund our operations and meet our debt service obligations.

Any new pandemic or other future public health crisis, or a resurgence of COVID-19 or variants could materially impact our financial condition or results of operations.

In our Aerospace segment, demand by the general aviation markets for our products is dependent upon several factors, including capital investment, product innovations, economic growth and wealth creation and technology upgrades.

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Therefore, our business is directly affected by economic factors and other trends that affect our customers in the commercial aerospace industry.

These factors would reduce orders for new aircraft and would likely reduce airlines’ spending for cabin upgrades for which we supply products, thus reducing our sales and profits.

These factors would reduce orders for new aircraft and would likely reduce airlines’ spending for cabin upgrades for which we supply

products, thus reducing our sales and profits.

A reduction in air travel may also result in our commercial airline customers being unable to pay our invoices on a timely basis or at all.

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In addition, government expenditures for defense programs may decline or these defense programs may be terminated.

A decline in governmental expenditures, a change in spending priorities (e.g., shifting funds to efforts to combat the impact of the pandemic or efforts to assist Ukraine in the Russia and Ukraine conflict), or the termination of existing contracts may result in a reduction in the volume of contracts awarded to us.

A decline in governmental expenditures, a change in spending priorities (e.g., shifting funds to assist Ukraine in the Russia and Ukraine conflict), or the termination of existing contracts may result in a reduction in the volume of contracts awarded to us.

Furthermore, on contracts for which we are a subcontractor and not the prime contractor, the U.S.

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Like all government contractors, we are subject to risks associated with this contracting.

These risks include the potential for substantial civil and criminal fines and penalties.

These risks include the

potential for substantial civil and criminal fines and penalties.

These fines and penalties could be imposed for failing to follow procurement integrity and bidding rules, employing improper billing practices or otherwise failing to follow cost accounting standards, receiving or paying kickbacks or filing false claims.

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Our new product development efforts may not be successful, which would result in a reduction in our sales and earnings.

We may experience difficulties that could delay or prevent the successful development of new products or product

enhancements, and new products or product enhancements may not be accepted by our customers.

We may experience difficulties that could delay or prevent the successful development of new products or product enhancements, and new products or product enhancements may not be accepted by our customers.

Because it is generally not possible to predict the amount of time required and the costs involved in achieving certain research, development, and engineering objectives, the development expenses we incur may exceed our cost estimates and estimated product development schedules may be extended.

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This litigation could result in significant costs and divert our management’s focus away from operations.

Refer to the risk factor related to pending patent

infringement litigation below and Note 19 to the consolidated financial statements in Item 8, Financial Statements and Supplementary Data, of this report for further discussion.

Refer to the risk factor related to pending patent infringement litigation below and Note 19 to the Consolidated Financial Statements in Item 8, Financial Statements and Supplementary Data, of this report for further discussion.

If critical components or raw materials used to manufacture our products or used in our development programs become scarce or unavailable, then we may incur delays in manufacturing and delivery of our products and in completing our development programs, which has damaged, and could continue to damage, our business, results of operations and financial condition.

Due to increased demand across a range of industries, the global supply chain for certain critical components or raw materials used in the manufacture of our products and used in our development programs has experienced significant strain in recent periods.

Particularly, the market for electronic components is experiencing increased demand, creating substantial uncertainty regarding our suppliers’ continued production of key components for our products.

The COVID-19 pandemic has also contributed to and exacerbated this strain.

This constrained supply environment has adversely affected, and could further affect, availability, lead times and cost of components, and could impact our ability to complete development programs, respond to accelerated or quick-turn delivery requests from customers, or meet customer demand and product delivery dates for our end customers where we cannot timely secure adequate supply of these components.

Residual impacts of the COVID-19 pandemic have contributed to and exacerbated this strain to varying degrees.

This constrained supply environment has adversely affected, and could further affect, availability, lead times and the cost of components, and could impact our ability to timely complete development programs, respond to accelerated or quick-turn delivery requests from customers, or meet customer demand and product delivery dates for our end customers in situations where we cannot timely secure adequate supply of these components.

Moreover, if any of our suppliers become financially unstable, or otherwise unable or unwilling to provide us with raw materials or components, then we may have to find new suppliers.

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In addition, some suppliers have indicated that, as a result of current shortages, they intend to cease manufacture of certain components used in our products.

Limits on manufacturing availability or capacity or delays in production or delivery of components or raw materials due to COVID-related restrictions could further delay or inhibit our ability to obtain supply of components and produce finished goods.

There can be no assurance that the impacts of the pandemic on the supply chain will not continue, or worsen, in the future.

Limits on manufacturing availability or capacity or delays in production or delivery of components or raw materials could further delay or inhibit our ability to obtain supply of components and produce finished goods.

These supply chain constraints and their related challenges could result in shortages, increased material costs or use of cash, engineering design changes, and delays in new product introductions, each of which could adversely impact our growth, gross margin and financial results.

These types of negative financial impacts on our business may become more acute as supply chain pressures increase.

Our financial results could be adversely impacted by the escalation of labor and benefit costs.

Consistent with the experience of other employers, our labor, medical and workers’ compensation costs have increased substantially in recent years and are expected to continue to rise.

If this trend continues, the cost of labor and to provide healthcare and other benefits to our employees could increase, adversely impacting profitability.

As the labor market recovers from the effects of the COVID-19 pandemic, competition for employees has escalated which has increased costs associated with attracting and retaining employees.

These types of negative financial impacts on our business may become more acute if supply chain pressures increase.

Our financial results could continue to be adversely impacted by the escalation of labor and benefit costs.

Consistent with the experience of other employers, our labor, medical and workers’ compensation costs have increased substantially in recent

years and are expected to continue to rise.

If this trend continues, the cost of labor and to provide healthcare and other benefits to our employees could continue to increase, adversely impacting our future profitability.

Competition for employees has escalated in the labor market which has increased costs associated with attracting and retaining employees.

We cannot be certain that we will be able to maintain an adequately skilled labor force necessary to operate efficiently or that our labor costs will not increase as a result of a shortage in the availability of skilled employees.

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Any significant increases in the costs attributable to our self-insured health and workers’ compensation plans could adversely impact our business, results of operations, financial condition and cash flows.

Price inflation for labor and materials, further exacerbated by the Russian invasion of Ukraine, could adversely affect our business, results of operations and financial condition.

We experienced considerable price inflation in our costs for labor and materials during 2022, which adversely affected our business, results of operations and financial condition.

Price inflation for labor and materials, further exacerbated by the Russian invasion of Ukraine or the Israel-Hamas war, could adversely affect our business, results of operations and financial condition.

We have experienced considerable price inflation in our costs for labor and materials in recent years, which has adversely affected our business, results of operations and financial condition.

We may not be able to pass through inflationary cost increases under our existing fixed-price contracts.

Our ability to raise prices to reflect increased costs may be limited by competitive conditions in the market for our products and services.

Russia’s invasion of Ukraine, and prolonged conflict there, may continue to result in increased inflation, escalating energy and commodity prices and increasing costs of materials.

Russia’s invasion of Ukraine and the Israel-Hamas war, and prolonged conflict in either such situation, may continue to result in increased inflation, escalating energy and commodity prices and increasing costs of materials.

We continue to work to mitigate such pressures on our business operations as they develop.

To the extent the war in Ukraine adversely affects our business as discussed above, it may also have the effect of heightening

many of the other risks described herein, such as those relating to cybersecurity, supply chain, volatility in prices and market conditions, any of which could negatively affect our business and financial condition.

To the extent the war in Ukraine or the Israel-Hamas war adversely affects our business as discussed above, it may also have the effect of heightening many of the other risks described herein, such as those relating to cybersecurity, supply chain, volatility in prices and market conditions, any of which could negatively affect our business and financial condition.

If our subcontractors fail to perform their contractual obligations, our prime contract performance and our ability to obtain future business could be materially and adversely impacted.

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On fixed-price contracts, we agree to perform the scope of work specified in the contract for a predetermined price.

Depending on the fixed price negotiated, these contacts may provide us with an opportunity to achieve higher profits based on the relationship between our costs and the contract’s fixed price.

Depending on the fixed price negotiated, these contracts may provide us with an opportunity to achieve higher profits based on the relationship between our costs and the contract’s fixed price.

However, we bear the risk that increased or unexpected costs may reduce our profit or cause us to incur a loss on the contract, which would reduce our net earnings.

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A product recall or a product liability claim not covered by insurance could have a material adverse effect on our business, financial condition and results of operations.

Our operations depend on our manufacturing facilities, which are subject to physical and other risks that could disrupt production.

Our manufacturing facilities or our customers' facilities could be damaged or disrupted by a natural disaster, war,

or terrorist activity.

We maintain property damage and business interruption insurance at the levels typical in our industry or for our customers and suppliers, however, a pandemic or other major catastrophe, such as an earthquake, hurricane, fire, flood, tornado or other natural disaster at any of our sites, or war or terrorist activities in any of the areas where we conduct operations could result in a prolonged interruption of our business.

Any disruption resulting from these events could cause significant delays in shipments of products and the loss of sales and customers, and we may not have insurance to adequately compensate us for any of these events.

For leased facilities, timely renewal of leases and risk mitigation from the sale of our leased facilities is required to avoid any business interruption.

We may be subject to work stoppages at our facilities or those of our principal customers and suppliers, which could seriously impact the profitability of our business.

Many aircraft manufacturers, airlines, and aerospace suppliers have unionized work forces.

Any strikes, work stoppages, or slowdowns experienced by aircraft manufacturers, airlines, or aerospace suppliers could reduce our customers’ demand for additional aircraft structures or prevent us from completing production of our products.

A small percentage of our workforce is represented by unions.

If we were unable to renew our labor agreements at expiration, or if our workers were to engage in a strike, work stoppage, or other slowdown, we could experience a disruption of our operations, which could cause us to be unable to deliver products to certain of our customers on a timely basis and could result in a breach of such supply agreements.

This could negatively impact our results.

In addition, our non-unionized labor force may become subject to labor union organizing efforts, which could cause us to incur additional labor costs and increase the related risks that we now face.

The construction of aircraft is heavily regulated, and failure to comply with applicable laws could reduce our sales or require us to incur additional costs to achieve compliance, and we may incur significant expenses to comply with new or more stringent governmental regulation.

The aerospace industry is highly regulated in the United States by the FAA and in other countries by similar agencies.

We must be certified by the FAA and, in some cases, by individual OEMs in order to engineer and service parts, components and aerostructures used in specific aircraft models.

If any of our material authorizations or approvals were revoked or suspended, our operations would be adversely affected.

New or more stringent governmental regulations may be adopted, or industry oversight heightened in the future, and we may incur significant expenses to comply with any new regulations or any heightened industry oversight.

In addition, in January 2024, the FAA ordered the temporary grounding of Boeing 737-9 MAX aircraft as a result of an incident where a Boeing 737-9 MAX lost a “door plug.” This incident and the subsequent investigation, and the potential for more issues to be identified during further investigations, could result in a suspension or reduction of manufacturing of 737 MAX aircraft by Boeing.

Air travelers may also respond negatively to the 737 MAX aircraft due to perceived safety concerns, which would negatively impact Boeing.

Boeing is a major customer of ours and any financial or customer losses it suffers may result in a negative impact on our business, financial condition and results of operations.

Financial Risks

We have incurred losses in prior fiscal years and our future profitability is not certain.

For the year ended December 31, 2022, we incurred a net loss of $35.7 million.

For the year ended December 31, 2023, we incurred net loss of $26.4 million.

Our operating results for future periods are subject to numerous uncertainties and we cannot be certain that we will be profitable or that we will not experience substantial net losses in the future.

If we are not able to increase revenue and reduce our costs, we may not be able to achieve profitability in future periods and our business, financial condition, results of operations and cash flows may be adversely affected.

If we are not able to increase revenue or reduce our costs, we may not be able to achieve profitability in future periods and our business, financial condition, results of operations and cash flows may be adversely affected.

Our ABL Revolving Credit Facility and Term Loan Facility contain financial and restrictive covenants that we may be unable to satisfy, and that, if not satisfied, could result in the acceleration of any outstanding indebtedness thereunder and limit our ability to borrow additional funds.

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If any such default occurs, the lenders may elect to declare all outstanding borrowings, together with accrued interest and other amounts payable thereunder, to be immediately due and payable.

Further, as the amount available to us under our credit facilities is subject to borrowing base calculations determined by the value of accounts

receivable and inventory (under our ABL Revolving Credit Facility) and real estate and fixed assets (under our Term Loan Facility), an unexpected decline in the value of these assets would require a mandatory prepayment.

If any of these events were to occur, we may not be able to pay our debts and other monetary obligations as they come due, and our ability to continue to operate as a going concern could be impaired, which could in turn cause a significant decline in our stock price and could result in a significant loss of value for our shareholders.

Further, as the amount available to us under our credit facilities is subject to borrowing base calculations determined by the value of accounts receivable and inventory (under our ABL Revolving Credit Facility) and real estate and fixed assets (under our Term Loan Facility), an unexpected decline in the value of these assets would require a mandatory prepayment.

If any of these events were to occur, we may not be able to pay our debts and other monetary obligations as they come due, and our ability to continue to

operate as a going concern could be impaired, which could in turn cause a significant decline in our stock price and could result in a significant loss of value for our shareholders.

Furthermore, the lenders also have the right in these circumstances to terminate any commitments they have to provide further borrowings, which could leave us without access to sufficient liquidity to operate our business.

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Additionally, our ABL Revolving Credit Facility and Term Loan Facility also contain a number of restrictive covenants that impose significant operating and financial restrictions on the Company and our subsidiaries and may limit our ability to engage in acts that we believe to be in our long-term best interests.

The ABL Revolving Credit Facility and Term Loan Facility includes covenants restricting, among other things, the ability of the Company and our subsidiaries to:

The ABL Revolving Credit Facility and Term Loan Facility include covenants restricting, among other things, the ability of the Company and our subsidiaries to:

• incur additional indebtedness;

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If we do so, the risks described above related to our debt could intensify.

We are subject to financing and interest rate exposure risks that could adversely affect our business, liquidity and operating results.

Changes in the availability, terms and cost of capital, and increases in interest rates could cause our cost of doing business to increase and place us at a competitive disadvantage.

At December 31, 2023, all of our debt was subject to variable interest rates.

A write-off of all or part of our goodwill or other intangible assets could adversely affect our operating results and net worth.

At December 31, 2023, goodwill and net intangible assets were approximately 9.2% and 10.3% of our total assets, respectively.

In 2020, we recorded goodwill impairment charges associated with four Aerospace reporting units, totaling $86.3 million.

We had no such impairment charges during 2022 or 2021.

We had no goodwill impairment charges during 2023, 2022 or 2021.

Our goodwill and other intangible assets may increase in the future since our strategy includes growing through acquisitions.

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Although this write-off would not result in an outlay of cash and is not included in the financial covenant calculation, it could reduce our earnings and net worth significantly.

We are subject to financing and interest rate exposure risks that could adversely affect our business, liquidity and operating results.

Changes in the availability, terms and cost of capital, and increases in interest rates could cause our cost of doing business to increase and place us at a competitive disadvantage.

At December 31, 2022, all of our debt was subject to variable interest rates.

Our future operating results could be impacted by estimates used to calculate impairment losses on long-lived assets.

Our future operating results could be impacted by estimates used to calculate impairment losses on goodwill and long-lived assets.

The preparation of financial statements in conformity with U.S.

generally accepted accounting principles requires management to make significant and subjective estimates and assumptions that may affect the reported amounts of tangible and intangible long-lived assets in the financial statements.

These estimates are integral in the determination of whether a potential non-cash impairment loss exists as well as the calculation of that loss.

Actual future results could differ from those estimates.

discussed in Note 22 to the consolidated financial statements in Item 8, Financial Statements and Supplementary Data, of this report, we recorded a long-lived asset impairment charge of approximately $0.7 million in the year ending December 31, 2020.

We had no such impairment charges in 2022 or 2021.

We had no such asset impairment charges in 2023, 2022 or 2021.

Changes in discount rates and other estimates could affect our future earnings and equity.

Our goodwill asset impairment evaluations are determined using valuations that involve several assumptions, including discount rates, cash flow estimates, growth rates and terminal values.

Our goodwill asset impairment evaluations are determined using valuations that involve several assumptions, including discount rates, cash flow estimates,

growth rates and terminal values.

Certain of these assumptions, particularly the discount rate, are based on market conditions and are outside of our control.

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The most critical assumption is the discount rate.

Other assumptions include mortality, salary levels and retirement age.

Other assumptions include mortality, salary and bonus levels and retirement age.

The discount rate assumptions are based on current market conditions and are outside of our control.

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If we are unable to comply with those requirements with respect to a significant quantity of our products, our sales in Europe would be restricted.

Doing business internationally also subjects us to numerous

Doing business internationally also subjects us to numerous U.S.

and foreign laws and regulations, including regulations relating to import-export control, technology transfer restrictions, foreign corrupt practices and anti-boycott provisions.

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There is continued uncertainty about the future relationship between the United States and various other countries, most significantly China, with respect to trade policies, treaties, tariffs, and taxes.

Under the Biden administration, changes in U.S.

Changes in U.S.

administrative policy could lead to changes in existing trade agreements, greater restrictions on free trade generally, and significant increases in tariffs on goods imported into the United States, particularly tariffs on products manufactures in China and Mexico, among other possible changes.

These developments, or the perception that any of them could occur, could have a material effect on global economic conditions and the stability of global financial markets, and could significantly reduce global trade and, in particular, trade between the impacted nations and the United States.

We may face reputational, regulatory or financial risks from a perceived, or an actual, failure to achieve our sustainability goals.

The increased focus on sustainability practices and disclosures is rapidly evolving, as is the criteria to measure our sustainability performance;

both of which could result in greater expectations and may cause us to undertake costly initiatives to satisfy the evolving criteria.

As we advance our sustainable business model, we are pursuing programs that we believe will improve our environmental practices, social engagement and how we govern ourselves.

We periodically publish information about our sustainability goals, standards and frameworks.

Achievement of these objectives is subject to risks and uncertainties, many of which are outside of our direct control, and it is possible we may fail, or be perceived to have failed, in the achievement of our sustainability goals.

Also, certain customers, associates, shareholders, investors, suppliers, business partners, government agencies and non-governmental organizations may not be satisfied with our sustainability efforts.

A failure or perceived failure of our sustainability goals could negatively affect our reputation and our results of operations.

This uncertainty includes:

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Disruptions in the supply of raw materials and components could temporarily impair our ability to manufacture our products for our customers or require us to pay higher prices to obtain these raw materials or components from other sources, which could have a material adverse effect on our business and our results of operations.

We may face reputational, regulatory or financial risks from a perceived, or an actual, failure to achieve our sustainability goals.

The increased focus on sustainability practices and disclosures is rapidly evolving, as is the criteria to measure our sustainability performance;

both of which could result in greater expectations and may cause us to undertake costly initiatives to satisfy the evolving criteria.

As we advance our sustainable business model, we are pursuing programs that we believe will improve our environmental practices, social engagement and how we govern ourselves.

We periodically publish information about our sustainability goals, standards and frameworks.

A failure or perceived failure of our sustainability goals could negatively affect our reputation and our results of operations.

We are subject to extensive regulation and audit by the Defense Contract Audit Agency.

The accuracy and appropriateness of certain costs and expenses used to substantiate our direct and indirect costs for the U.S.

Government contracts are subject to extensive regulation and audit by the Defense Contract Audit Agency, an arm of the U.S.

Department of Defense (“USDOD”).

Such audits and reviews could result in adjustments to our contract costs and profitability.

However, we cannot ensure the outcome of any future audits and adjustments may be required to reduce net sales or profits upon completion and final negotiation of audits.

If any audit or review were to uncover inaccurate costs or improper activities, we could be subject to penalties and sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines and suspension or prohibition from conducting future business with the U.S.

Any such outcome could have a material adverse effect on our financial results.

We are subject to the requirements of the National Industrial Security Program Operating Manual for facility security clearance, which is a prerequisite for our ability to perform on classified contracts for the U.S.

USDOD facility security clearance is required in order to be awarded and be able to perform on classified contracts for the USDOD and certain other agencies of the U.S.

Government, which is a significant part of our business.

We have obtained clearance at appropriate levels that require stringent qualifications, and we may be required to seek higher level clearances in the future.

We cannot assure you that we will be able to maintain our security clearance.

If for some reason our security clearance is invalidated or terminated, we may not be able to continue to perform our present classified contracts or be able to enter into new classified contracts, which could affect our ability to compete for and capture new business.

Our business is subject to regulation in the United States and internationally.

The manufacturing of our products is subject to numerous federal, state and foreign governmental regulations.

The number of laws and regulations that are being enacted or proposed by various governmental bodies and authorities is increasing.

Compliance with these regulations is difficult and expensive.

If we fail to adhere, or are alleged to have failed to adhere, to any applicable federal, state, or foreign laws or regulations, or if such laws or regulations negatively affect sales of our products, our business, prospects, results of operations, financial condition or cash flows may be adversely affected.

In addition, our future results could be adversely affected by changes in applicable federal, state, and foreign laws and regulations, or the interpretation or enforcement thereof, including those relating to manufacturing processes, product liability, government contracts, trade rules and customs regulations, intellectual property, consumer laws, privacy laws, environmental protection, climate change, as well as accounting standards and taxation requirements (including tax-rate changes, new tax laws or revised tax law interpretations).

General Risks

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If we fail to meet expectations of securities analysts or investors due to fluctuations in our sales or operating results, our stock price could decline significantly.

Our sales and earnings may fluctuate from quarter to quarter due to a number of factors, including delays or cancellations of programs and the impacts of the ongoing COVID-19 pandemic and supply chain challenges on revenues and costs.

Our sales and earnings may fluctuate from quarter to quarter due to a number of factors, including delays or cancellations of programs and supply chain challenges on revenues and costs.

It is likely that in some future quarters our operating results may fall below the expectations of securities analysts or investors.

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• announcements of technological innovations and new products;

• news reports relating to trends in our markets;

• news reports relating to trends in our markets or adverse happenings at our customers;

• the cancellation of major contracts or programs with our customers;

• impacts of the COVID-19 pandemic on the aerospace industry and our Company.

• residual impacts of the COVID-19 pandemic on the aerospace industry and our Company.

In addition, the stock market in general, and the market prices for companies in the aerospace and defense industry in particular, have experienced significant price and volume fluctuations that often have been unrelated to the operating performance of the companies affected by these fluctuations.

These broad market fluctuations may adversely affect the market price of our common stock, regardless of our operating performance.

Global health crises, such as the current COVID-19 pandemic, with the breadth of its impact worldwide, and particularly on the aerospace industry, could also cause significant volatility in the market price.

UNRESOLVED STAFF COMMENTS

Global health crises, similar to the COVID-19 pandemic, with the breadth of its impact worldwide, and particularly on the aerospace industry, could also cause significant volatility in the market price.

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