Our business is subject to a high degree of risk and uncertainty, including the following risks and uncertainties, which could adversely affect our business, financial condition, results of operation, cash flows and the trading price of our Common Stock:
+Added: Risks related to COVID-19 Pandemic
Our business, results of operations, financial condition, cash flows and stock price can be adversely affected by pandemics, epidemics or other public health emergencies, such as COVID-19.
Our business, results of operations, financial condition, cash flows and stock price can be adversely affected by pandemics, epidemics or other public health emergencies, such as COVID-19.
−Removed: The COVID-19 outbreak has resulted in governments around the world implementing increasingly stringent measures to help control the spread of the virus, including quarantines, "shelter in place" and "stay at home" orders, travel restrictions, business curtailments, school closures, and other measures.
−Removed: In addition, government and central banks in several parts of the world have enacted fiscal and monetary stimulus measures to counteract the impacts of COVID-19.
+Added: The COVID-19 pandemic has resulted in governments around the world implementing certain measures to help control the spread of the virus, including quarantines, "shelter in place" and "stay at home" orders, travel restrictions, business curtailments, school closures, and other measures.
Our businesses have been deemed "essential" under the orders issued by federal, state and local governments.
−Removed: Although we have continued to operate our facilities to date consistent with federal guidelines and state and local orders, the outbreak of COVID-19 or similar viruses and any preventive or protective actions taken by governmental authorities may have a material adverse effect
−Removed: on our operations, supply chain, customers, and transportation networks, including business shutdowns or disruptions.
−Removed: The extent to which viruses such as COVID-19 may adversely impact our business depends on future developments, which are highly uncertain and unpredictable, depending upon the severity and duration of the outbreak and the effectiveness of actions taken globally to contain or mitigate their effects.
+Added: Although we have continued to operate our facilities to date consistent with federal guidelines and state and local orders, COVID-19 or similar viruses and any preventive or protective actions taken by governmental authorities may have a material adverse effect on our operations, supply chain, customers, and transportation networks, including business shutdowns or disruptions.
+Added: The extent to which viruses such as COVID-19 and their variants may adversely impact our business depends on future developments, which are highly uncertain and unpredictable, depending upon the severity and duration of any virus outbreak and the effectiveness of actions taken globally to contain or mitigate the effects thereof.
Any resulting financial impact cannot be estimated reasonably at this time, but may materially adversely affect our business, results of operations, financial condition and cash flows.
−Removed: Additionally, concerns over the economic impact of COVID-19 have caused extreme volatility in financial and other capital markets which has and may continue to adversely impact our stock price and may affect our ability to access capital markets.
+Added: Additionally, concerns over the economic impact of COVID-19 and its variants have caused extreme volatility in financial and other capital markets which may adversely impact our stock price and may affect our ability to access capital markets.
To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described within this report.
−Removed: We will continue to implement mitigation strategies as needed to protect the long-term sustainability of our company.
+Added: We have also experienced reductions in the demand for certain of our products due to reductions in elective and non-essential surgical procedures.
+Added: We implemented mitigation strategies as needed to protect the long-term sustainability of our company and will continue to respond as appropriate.
+Added: Business and Financial Risks
Global economic conditions may adversely affect our business, operating results and financial condition.
9 unchanged sentences
Additionally, our future results of operations could be adversely affected by changes in the effective tax rate as a result of a change in the mix of earnings in jurisdictions with differing statutory tax rates, changes in tax laws, regulations and judicial rulings or changes in the interpretation thereof.
−Removed: Increased competition could hurt our business and financial results.
−Removed: We face competition in our markets from a number of large and small companies, some of which have greater financial, research and development, production and other resources than we do.
−Removed: Our competitive position is based principally on performance, quality, customer support, service, breadth of product line, manufacturing or packaging technology and the selling prices of our products.
−Removed: Our competitors may improve the design and performance of their products and introduce new products with competitive price and performance characteristics.
−Removed: We expect to do the same to maintain our current competitive position and market share.
−Removed: The loss of governmental permits and approvals would materially harm some of our businesses.
−Removed: Pursuant to applicable environmental and safety laws and regulations, we are required to obtain and maintain certain governmental permits and approvals, including EPA registrations under FIFRA for two of our products.
−Removed: We maintain EPA FIFRA registrations for ethylene oxide as a medical device sterilant and spice fumigant and for propylene oxide as a fumigant of nuts and spices.
−Removed: The registrations for both products are in the final stages of a FIFRA registration review process begun in 2013.
−Removed: Recent draft documents indicate that the EPA intends to continue the registrations for both ethylene oxide and propylene oxide with certain additional mitigation measures.
−Removed: The EPA may re-examine the registrations in the future in accordance with the provisions of FIFRA.
−Removed: Any future failure of the EPA to allow reregistration of ethylene oxide or propylene oxide would have a material adverse effect on our business and financial results.
−Removed: Commercial supply of pharmaceutical products that we may develop, subject to cGMP manufacturing regulations, will be performed by third-party cGMP manufacturers.
−Removed: Modifications, enhancements or changes in third-party manufacturing facilities or procedures of our pharmaceutical products are, in many circumstances, subject to FDA approval, which may be subject to a lengthy application process or which we may be unable to obtain.
−Removed: Any third-party cGMP manufacturers that we may use are periodically subject to inspection by the FDA and other governmental agencies, and operations at these facilities could be interrupted or halted if the results of these inspections are unsatisfactory.
−Removed: Failure to comply with the FDA or other governmental regulations can result in fines, unanticipated compliance expenditures, recall or seizure of products, total or partial suspension of production, enforcement actions, injunctions and criminal prosecution, which could have a material adverse effect on our business and financial results.
−Removed: Permits and approvals may be subject to revocation, modification or denial under certain circumstances.
−Removed: Our operations or activities (including the status of compliance by the prior owner of the Verona, Missouri facility under Superfund remediation) could result in administrative or private actions, revocation of required permits or licenses, or fines, penalties or damages, which could have an adverse effect on us.
−Removed: In addition, we cannot predict the extent to which any legislation or regulation may affect the market for our products or our cost of doing business.
Raw material shortages or price increases could adversely affect our business and financial results.
−Removed: The principal raw materials that we use in the manufacture of our products can be subject to price fluctuations due to market conditions.
+Added: The principal raw materials that we use in the manufacture of our products can be subject to price fluctuations due to market conditions and factors beyond our control, including the COVID-19 pandemic and inflationary pressures, both of which have impacted our business over the past two years, accelerated as 2021 progressed and are likely to continue for some time.
Such raw materials include materials derived from petrochemicals, minerals, metals, agricultural commodities and other commodities.
While the selling prices of our products tend to increase or decrease over time with the cost of raw materials, these changes may not occur simultaneously or to the same degree.
−Removed: At times, we may be unable to pass increases in raw material costs through to our customers due to certain contractual obligations.
+Added: At times, including during periods of rapidly increasing raw material prices, we may be unable to pass increases in raw material costs through to our customers due to certain contractual obligations.
Such increases in the price of raw materials, if not offset by product price increases, or substitute raw materials, would have an adverse impact on our profitability.
2 unchanged sentences
Any shortages or unforeseen price increases could have a material adverse impact on our results of operations.
−Removed: Concerns about ethylene oxide emissions have resulted in certain state actions against certain of our customers that are currently impacting these customers’ ability to use the ethylene oxide process to sterilize medical devices, which may, in turn, affect sales to these customers.
−Removed: Certain of the Company’s customers who use ethylene oxide in the USA for the sterilization of medical devices have received ongoing state and local scrutiny for environmental concerns at their facilities.
−Removed: This scrutiny is associated with the IRIS Assessment described in the “Environmental / Regulatory Matters” Section above, which deemed exposure to ethylene oxide as unsafe at levels far below those found in the environment.
−Removed: The EPA began using the IRIS Assessment in 2020 to regulate change to existing permissible emissions’ limits at certain non-sterilization ethylene oxide users and producers, and is expected to finalize rules during 2021 or 2022 that will regulate sterilization users.
−Removed: Additionally, some state and local regulators have drawn their own conclusions from the IRIS Assessment, which has resulted in certain state actions against our customers that are currently impacting, or have impacted at some point, these customers’ ability to use the ethylene oxide process to sterilize medical devices.
−Removed: Because of these actions, one customer facility has been shut down permanently, another was shut down for a period of months and has since restarted, and other customers have taken or are expected to take voluntary downtime to install new abatement equipment.
−Removed: The installation of the new abatement equipment is being done ahead of what is expected to be changes in the EPA regulations.
−Removed: The Company remains confident that the sterilization industry will be able to install abatement equipment to satisfy the new forthcoming EPA requirements.
−Removed: The Company is working with various stakeholders to ensure the EPA considers all available assessments to appropriately quantify ethylene oxide's risks.
−Removed: While the Company believes that EPA will, as it has in the past, ultimately regulate to lower emissions levels based on a combined consideration of the various assessments available and that industry will then adopt practices and procedures to ensure compliance with these new regulations, there is no assurance that this will be the case.
−Removed: Our financial success depends in part on the reliability and sufficiency of our manufacturing facilities.
−Removed: Our revenues depend on the effective operation of our manufacturing, packaging, and processing facilities.
−Removed: The operation of our facilities involves risks, including the breakdown, failure, or substandard performance of equipment, power outages, the improper installation or operation of equipment, explosions, fires, natural disasters, failure to achieve or maintain safety or quality standards, work stoppages, supply or logistical outages, and the need to comply with environmental and other directives of governmental agencies.
−Removed: The occurrence of material operational problems, including, but not limited to, the above events, could adversely affect our profitability during the period of such operational difficulties.
−Removed: Our business exposes us to potential product liability claims and recalls, which could adversely impact our financial condition and performance.
−Removed: Our development, manufacture and sales of food ingredient, pharmaceutical and nutritional supplement products involve an inherent risk of exposure to product liability claims, product recalls, product seizures and related adverse publicity.
−Removed: A product liability judgment against us could also result in substantial and unexpected expenditures, affect consumer confidence in our products, and divert management’s attention from other responsibilities.
−Removed: Although we maintain product liability insurance coverage in amounts we believe are customary within the industry, there can be no assurance that this level of coverage is adequate or that we will be able to continue to maintain our existing insurance or obtain comparable insurance at a reasonable cost, if at all.
−Removed: A product recall or a partially or completely uninsured judgment against us could have a material adverse effect on results of operations and financial condition.
−Removed: We face risks associated with our sales to customers and manufacturing operations outside the United States.
−Removed: For the year ended December 31, 2020, approximately 27% of our net sales consisted of sales outside the United States.
−Removed: In addition, we conduct a portion of our manufacturing outside the United States.
−Removed: The majority of our foreign sales occur through our foreign subsidiaries and the remainder of our foreign sales result from exports to foreign distributors, resellers and customers.
−Removed: Our foreign sales and operations are subject to a number of risks, including:
−Removed: longer accounts receivable collection periods;
−Removed: the impact of recessions and other economic conditions in economies outside the United States;
−Removed: export duties and quotas;
−Removed: changes in tariffs and trade relations including but not limited to those associated with the North American Free Trade Agreement and the exit of the United Kingdom from the European Union;
−Removed: unexpected changes in regulatory requirements;
−Removed: certification requirements;
−Removed: environmental regulations;
−Removed: reduced protection for intellectual property rights in some countries;
−Removed: potentially adverse tax consequences;
−Removed: political and economic instability;
−Removed: and preference for locally produced products.
−Removed: These factors could have a material adverse impact on our ability to increase or maintain our international sales.
−Removed: We may, from time to time, experience problems in our labor relations.
−Removed: In North America, approximately 92 employees, or 8% of our North American workforce, as of December 31, 2020, are represented by a union under a single collective bargaining agreement, which was re-negotiated and is effective as of July 12, 2020.
−Removed: It will expire in 2025.
−Removed: In Europe, approximately 122 employees at our Marano, Ticino, Italy facility are covered by a national collective bargaining agreement, which expires in 2022.
−Removed: Approximately 23 employees at our Bertinoro, Italy facility are also covered by a national collective bargaining agreement, which expired in 2019 and is currently under negotiation.
−Removed: We believe that our present labor relations with all our union employees are satisfactory, however, our failure to renew these agreements on reasonable terms could result in labor disruptions and increased labor costs, which could adversely affect our financial performance.
−Removed: Similarly, if our relations with the union portion of our workforce do not remain positive, such employees could initiate a strike, work stoppage or slowdown in the future.
−Removed: In the event of such an action, we may not be able to adequately meet the needs of our customers using our remaining workforce and our operations and financial condition could be adversely affected.
−Removed: Additionally, other portions of our workforce could become subject to union campaigns.
Our international operations subject us to currency translation risk and currency transaction risk which could cause our results to fluctuate from period to period.
22 unchanged sentences
LIBOR is the basic rate of interest used in lending between banks on the London interbank market and is widely used as a reference for setting the interest rate on loans globally.
−Removed: On July 27, 2017, the United Kingdom’s Financial Conduct Authority (FCA), which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021.
−Removed: FCA further announced that it has commitments from panel banks to continue to contribute to LIBOR through the end of calendar 2021, but that the FCA will not use its powers to compel contributions beyond that date.
−Removed: While we expect that reasonable alternatives to LIBOR will be implemented prior to the 2021 target date or that the 2021 cessation date may be extended, we cannot predict the consequences and timing of these developments and the impact to our business.
−Removed: In preparation for the potential phase out of LIBOR, we may need to renegotiate our financial obligations and derivative instruments that utilize LIBOR.
+Added: On July 27, 2017, the United Kingdom’s Financial Conduct Authority (FCA), which regulates LIBOR, initially announced that it intends to phase out LIBOR by the end of 2021.
+Added: FCA recently has formally announced that it has commitments from panel banks to continue to contribute to LIBOR through June 30, 2023 for USD 1-month, 3-month, and 6-month.
+Added: From July 1, 2023 to June 30, 2033, LIBOR for these instruments will continue publication on a "synthetic" basis with status of "loss of representativeness", i.e.
+Added: ending their reliance on panel bank submissions and calculated based on a methodology to primarily assist with a very small subset of existing contracts where it is difficult to move to the new reference rate (so called "tough legacy" contract).
+Added: In preparation for the phase out of LIBOR, we may need to renegotiate our financial obligations and derivative instruments that utilize LIBOR.
However, these efforts may not be successful in mitigating the legal and financial risk from changing the reference rate in our legacy agreements.
Furthermore, the discontinuation of LIBOR may adversely impact our ability to manage and hedge exposures to fluctuations in interest rates using derivative instruments.
+Added: We may not be able to successfully consummate and manage acquisition, joint venture and divestiture activities which could have an impact on our results.
+Added: From time to time, we may acquire other businesses, enter into joint ventures and, based on an evaluation of our business portfolio, divest existing businesses.
+Added: These acquisitions, joint ventures and divestitures may present financial, managerial and operational challenges, including diversion of management attention from existing businesses, difficulty with integrating or separating personnel and financial and other systems, increased expenses, assumption of unknown liabilities and indemnities, and potential disputes with the buyers or sellers.
+Added: In addition, we may be required to incur asset impairment charges (including charges related to tangible assets, goodwill and other intangible assets) in connection with acquired businesses which may reduce our profitability.
+Added: If we are unable to consummate such transactions, or successfully integrate and grow acquisitions and achieve contemplated revenue synergies and cost savings, our financial results could be adversely affected.
+Added: Additionally, joint ventures
+Added: inherently involve a lesser degree of control over business operations, thereby potentially increasing the financial, legal, operational and/or compliance risks.
+Added: Changes in our relationships with our vendors, changes in tax or trade policy, interruptions in our operations or supply chain or increased commodity or supply chain costs could adversely affect our results of operations.
+Added: We are dependent on our vendors, including common carriers, to supply merchandise to our distribution centers, stores, and guests.
+Added: As we continue to add capabilities to quickly move the appropriate amount of inventory at optimal operational costs through our entire supply chain, operating our fulfillment network becomes more complex and challenging.
+Added: If our fulfillment network does not operate properly, if a vendor fails to deliver on its commitments, or if common carriers have difficulty providing capacity to meet demands for their services like they experienced at times during the last two years, we could experience merchandise out-of-stocks, delivery delays or increased delivery costs, which could lead to lost sales and decreased guest confidence, and adversely affect our results of operations.
+Added: A large portion of our merchandise is sourced, directly or indirectly, from outside the U.S.
+Added: Any major changes in tax or trade policy, such as the imposition of additional tariffs or duties on imported products, between the U.S.
+Added: and countries from which we source merchandise could require us to take certain actions, including for example raising prices on products we sell and seeking alternative sources of supply from vendors in other countries with whom we have less familiarity, which could adversely affect our reputation, sales, and our results of operations.
+Added: Political or financial instability, currency fluctuations, the outbreak of pandemics or other illnesses (such as the COVID-19 pandemic), labor unrest, transport capacity and costs, port security, weather conditions, natural disasters, or other events that could alter or suspend our operations, slow or disrupt port activities, or affect foreign trade are beyond our control and could materially disrupt our supply of merchandise, increase our costs, and/or adversely affect our results of operations.
+Added: There have been periodic labor disputes impacting the U.S.
+Added: ports that have caused us to make alternative arrangements to continue the flow of inventory, and if these types of disputes recur, worsen, or occur in other countries through which we source products, it may have a material impact on our costs or inventory supply.
+Added: Changes in the costs of procuring commodities used in our merchandise or the costs related to our supply chain, could adversely affect our results of operations.
Adverse publicity or consumer concern regarding the safety or quality of food products containing our products, or health concerns, whether with our products, products in the same general class as our products or for food products containing our products, may result in the loss of sales.
7 unchanged sentences
While we continue to diversify our product offerings, developing new products entails risks and we cannot be certain that demand for our products and products containing our products will continue at current levels or increase in the future.
−Removed: We may not be able to successfully consummate and manage acquisition, joint venture and divestiture activities which could have an impact on our results.
−Removed: From time to time, we may acquire other businesses, enter into joint ventures and, based on an evaluation of our business portfolio, divest existing businesses.
−Removed: These acquisitions, joint ventures and divestitures may present financial, managerial and operational challenges, including diversion of management attention from existing businesses, difficulty with integrating or separating personnel and financial and other systems, increased expenses, assumption of unknown liabilities and indemnities, and potential disputes with the buyers or sellers.
−Removed: In addition, we may be required to incur asset impairment charges (including charges related to tangible assets, goodwill and other intangible assets) in connection with acquired businesses which may reduce our profitability.
−Removed: If we are unable to consummate such transactions, or successfully integrate and grow acquisitions and achieve contemplated revenue synergies and cost savings, our financial results could be adversely affected.
−Removed: Additionally, joint ventures inherently involve a lesser degree of control over business operations, thereby potentially increasing the financial, legal, operational and/or compliance risks.
+Added: Operational Risks
+Added: Our financial success depends in part on the reliability and sufficiency of our manufacturing facilities.
+Added: Our revenues depend on the effective operation of our manufacturing, packaging, and processing facilities.
+Added: The operation of our facilities involves risks, including the breakdown, failure, or substandard performance of equipment, power outages, the improper installation or operation of equipment, explosions, fires, natural disasters, failure to achieve or maintain safety or quality standards, work stoppages, supply or logistical outages, and the need to comply with environmental and other directives of governmental agencies.
+Added: The occurrence of material operational problems, including, but not limited to, the above events, could adversely affect our profitability during the period of such operational difficulties.
+Added: We face risks associated with our sales to customers and manufacturing operations outside the United States.
+Added: For the year ended December 31, 2021, approximately 27% of our net sales consisted of sales outside the United States.
+Added: In addition, we conduct a portion of our manufacturing outside the United States.
+Added: The majority of our foreign sales occur through our foreign subsidiaries and the remainder of our foreign sales result from exports to foreign distributors, resellers and customers.
+Added: Our foreign sales and operations are subject to a number of risks, including:
+Added: longer accounts receivable collection periods;
+Added: the impact of recessions and other economic conditions in economies outside the United States;
+Added: export duties and quotas;
+Added: changes in tariffs and trade relations including but not limited to those associated with the North American Free Trade Agreement and the exit of the United Kingdom from the European Union;
+Added: unexpected changes in regulatory requirements;
+Added: certification requirements;
+Added: environmental regulations;
+Added: reduced protection for intellectual property rights in some countries;
+Added: potentially adverse tax consequences;
+Added: political and economic instability;
+Added: and preference for locally produced products.
+Added: These factors could have a material adverse impact on our ability to increase or maintain our international sales.
+Added: We may, from time to time, experience problems in our labor relations.
+Added: In North America, approximately 91 employees, or 8% of our North American workforce, as of December 31, 2021, are represented by a union under a single collective bargaining agreement, which was re-negotiated and is effective as of July 12, 2020.
+Added: It will expire in 2025.
+Added: In Europe, approximately 107 employees at our Marano, Ticino, Italy facility are covered by a national collective bargaining agreement, which expires in 2022.
+Added: Approximately 25 employees at our Bertinoro, Italy facility are also covered by a national collective bargaining agreement, which expired in 2019 and is currently under negotiation.
+Added: We believe that our present labor relations with all our union employees are satisfactory, however, our failure to renew these agreements on reasonable terms could result in labor disruptions and increased labor costs, which could adversely affect our financial performance.
+Added: Similarly, if our relations with the union portion of our workforce do not remain positive, such employees could initiate a strike, work stoppage or slowdown in the future.
+Added: In the event of such an action, we may not be able to adequately meet the needs of our customers using our remaining workforce and our operations and financial condition could be adversely affected.
+Added: Additionally, other portions of our workforce could become subject to union campaigns.
Technology failures or cyber security breaches could have an adverse effect on the Company’s operations.
4 unchanged sentences
however, these measures may not be adequate to ensure that our operations will not be disrupted, should such an event occur.
+Added: The Company has not experienced any significant information security breaches and as a result, has not incurred any expenses with respect thereto, either with respect to penalties and settlement or otherwise.
+Added: We have a robust cyber security employee education program and train our employees on email and password security, recognizing phishing and related topics on a regular basis.
+Added: Our business exposes us to potential product liability claims and recalls, which could adversely impact our financial condition and performance.
+Added: Our development, manufacture and sales of food ingredient, pharmaceutical and nutritional supplement products involve an inherent risk of exposure to product liability claims, product recalls, product seizures and related adverse publicity.
+Added: A product liability judgment against us could also result in substantial and unexpected expenditures, affect consumer confidence in our products, and divert management’s attention from other responsibilities.
+Added: Although we maintain product liability insurance coverage in amounts we believe are customary within the industry, there can be no assurance that this level of coverage is adequate or that we will be able to continue to maintain our existing insurance or obtain comparable insurance at a reasonable cost, if at all.
+Added: A product recall or a partially or completely uninsured judgment against us could have a material adverse effect on results of operations and financial condition.
+Added: Regulatory and Compliance Risks
+Added: The loss of governmental permits and approvals would materially harm some of our businesses.
+Added: Pursuant to applicable environmental and safety laws and regulations, we are required to obtain and maintain certain governmental permits and approvals, including EPA registrations under FIFRA for two of our products.
+Added: We maintain EPA FIFRA registrations for ethylene oxide as a medical device sterilant and spice fumigant and for propylene oxide as a fumigant of nuts and spices.
+Added: The registrations for both products are in the final stages of a FIFRA registration review process begun in 2013.
+Added: draft documents indicate that the EPA intends to continue the registrations for both ethylene oxide and propylene oxide with certain additional mitigation measures.
+Added: The EPA may re-examine the registrations in the future in accordance with the provisions of FIFRA.
+Added: Any future failure of the EPA to allow reregistration of ethylene oxide or propylene oxide would have a material adverse effect on our business and financial results.
+Added: Commercial supply of pharmaceutical products that we may develop, subject to cGMP manufacturing regulations, will be performed by third-party cGMP manufacturers.
+Added: Modifications, enhancements or changes in third-party manufacturing facilities or procedures of our pharmaceutical products are, in many circumstances, subject to FDA approval, which may be subject to a lengthy application process or which we may be unable to obtain.
+Added: Any third-party cGMP manufacturers that we may use are periodically subject to inspection by the FDA and other governmental agencies, and operations at these facilities could be interrupted or halted if the results of these inspections are unsatisfactory.
+Added: Failure to comply with the FDA or other governmental regulations can result in fines, unanticipated compliance expenditures, recall or seizure of products, total or partial suspension of production, enforcement actions, injunctions and criminal prosecution, which could have a material adverse effect on our business and financial results.
+Added: Permits and approvals may be subject to revocation, modification or denial under certain circumstances.
+Added: Our operations or activities (including the status of compliance by the prior owner of the Verona, Missouri facility under Superfund remediation) could result in administrative or private actions, revocation of required permits or licenses, or fines, penalties or damages, which could have an adverse effect on us.
+Added: In addition, we cannot predict the extent to which any legislation or regulation may affect the market for our products or our cost of doing business.
+Added: Concerns about ethylene oxide emissions have resulted in certain state actions against certain of our customers that are currently impacting these customers’ ability to use the ethylene oxide process to sterilize medical devices, which may, in turn, affect sales to these customers.
+Added: Certain of the Company’s customers who use ethylene oxide in the USA for the sterilization of medical devices have received ongoing state and local scrutiny for environmental concerns at their facilities.
+Added: This scrutiny is associated with the IRIS Assessment described in the “Environmental / Regulatory Matters” Section above, which deemed exposure to ethylene oxide as unsafe at levels far below those found in the environment.
+Added: The EPA began using the IRIS Assessment in 2020 to regulate change to existing permissible emissions’ limits at certain non-sterilization ethylene oxide users and producers, and is expected to finalize rules during 2022 that will regulate sterilization users.
+Added: Additionally, some state and local regulators have drawn their own conclusions from the IRIS Assessment, which has resulted in certain state actions against our customers that are currently impacting, or have impacted at some point, these customers’ ability to use the ethylene oxide process to sterilize medical devices.
+Added: Because of these actions, one customer facility has been shut down permanently, another was shut down for a period of months and has since restarted, and other customers have taken or are expected to take voluntary downtime to install new abatement equipment.
+Added: The installation of the new abatement equipment is being done ahead of what is expected to be changes in the EPA regulations.
+Added: The Company remains confident that the sterilization industry will be able to install abatement equipment to satisfy the new forthcoming EPA requirements.
+Added: The Company is working with various stakeholders to ensure the EPA considers all available assessments to appropriately quantify ethylene oxide's risks.
+Added: While the Company believes that EPA will, as it has in the past, ultimately regulate to lower emissions levels based on a combined consideration of the various assessments available and that industry will then adopt practices and procedures to ensure compliance with these new regulations, there is no assurance that this will be the case.
+Added: General Risks
+Added: Increased competition could hurt our business and financial results.
+Added: We face competition in our markets from a number of large and small companies, some of which have greater financial, research and development, production and other resources than we do.
+Added: Our competitive position is based principally on performance, quality, customer support, service, breadth of product line, manufacturing or packaging technology and the selling prices of our products.
+Added: Our competitors may improve the design and performance of their products and introduce new products with competitive price and performance characteristics.
+Added: We expect to do the same to maintain our current competitive position and market share.
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.