What changed in this filing

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Item 1A. Risk Factors

2020-10-28 compared with 2020-08-03 · 21 added, 17 removed, 27 unchanged (58% of the section changed)

6 unchanged sentences

On March 13, 2020, the United States declared a national emergency concerning the pandemic, and many U.S.

states and municipalities have declared public health emergencies.

states and municipalities declared public health emergencies.

In response, U.S.

1 unchanged sentence

In addition, some U.S.

states and municipalities have placed significant limits on non-essential construction projects.

These actions have substantially restricted daily activities for individuals and businesses, and have caused many businesses to curtail or cease normal operations.

The widespread health crisis created by the COVID-19 pandemic and the actions taken to combat it have had a significant adverse effect on the economies and financial markets of the U.S.

states and municipalities placed significant limits on non-essential construction projects.

These actions substantially restricted daily activities for individuals and businesses, and have caused many businesses to curtail or cease normal operations.

While certain market conditions for our business, such as single-family housing starts, have rebounded quickly or otherwise been more resilient than we expected, the widespread health crisis created by the COVID-19 pandemic and the actions taken to combat it have had significant adverse effects on the economies and financial markets of the U.S.

and many other countries.

has experienced deteriorating economic conditions in many major markets, including increased unemployment, decreases in disposable income, declines in consumer confidence, general economic slowdowns, and significant volatility in financial markets.

These deteriorating economic conditions may reduce demand for our products, which could materially reduce our sales and profitability.

In addition, any bankruptcy or financial distress of our customers or suppliers due to deterioration in economic conditions could result in other significant negative impacts to our business including reduced sales, decreased collectability of accounts receivable, impaired credit, an ineffective supply chain, loss of credit from our suppliers, and a reduction in certain key product brands.

These effects include increased unemployment, decreases in disposable income, declines in consumer confidence, general economic slowdowns, bankruptcies, and significant volatility in financial markets.

These effects may reduce demand for our products, which could materially reduce our sales and profitability.

In addition, any bankruptcy or financial distress of our customers or suppliers due to these adverse economic conditions could result in other significant negative impacts to our business including reduced sales, decreased collectability of accounts receivable, impaired credit, an ineffective supply chain, loss of credit from our suppliers, and a reduction in certain key product brands.

Deteriorating economic conditions and reduced sales and profitability could also limit the availability of credit, or increase our borrowing costs, including by requiring additional collateral.

We also may be required to record impairment charges with respect to assets whose fair values may be negatively affected by the effects of the pandemic on our operations.

In addition, although our operations and those of most of our direct customers and suppliers are currently considered “essential” and are therefore exempt from state and local business closure orders, these exemptions may not mitigate the impact to our markets caused by the COVID-19 pandemic, and they may be curtailed or revoked in the future.

If these exemptions are curtailed or revoked, it could require us, or our customers or suppliers, to further limit our operations or suspend them altogether, which would adversely impact our business, operating results, and financial condition.

The pandemic has also caused, and may continue to cause, disruption to the global supply chain, which could impact our ability to source products from our suppliers, many of whom are located outside of the United States, including China.

In response to the pandemic, we have instituted a number of actions to protect our workforce, including restricting business travel, imposing mandatory quarantine periods for employees who have traveled to areas impacted by the pandemic, modifying office functions to allow employees to work remotely, and modifying our warehouse and delivery operations to enforce enhanced safety protocols around social distancing, hygiene, and health screening.

In addition, although our operations and those of most of our direct customers and suppliers are considered “essential” and are therefore exempt from remaining state and local business closure orders, these exemptions may not mitigate the impact to our markets caused by the COVID-19 pandemic, and they may be curtailed or revoked in the future.

As the pandemic continues, business closure orders also may be implemented or reinstated in states or localities that experience a rebound or surge in COVID-19 cases, and those orders may not include the same exemptions.

If these exemptions are curtailed or revoked, or if business closures orders are implemented or reinstated without exemptions, it could require us, or our customers or suppliers, to further limit our operations or suspend them altogether, which would adversely impact our business, operating results, and financial condition.

The pandemic has also caused, and may continue to cause, disruption to the global supply chain.

While this disruption contributed to rapid increases in certain wood-based commodity prices in the second and third quarters of 2020, which benefited our business, those increases are expected to reverse in the near-term, which could result in reduced revenues and margins, and potentially in substantial declines in profitability and possible net losses.

The disruption also could negatively impact our ability to source products from our suppliers, many of whom are located outside of the United States, including China.

In response to the pandemic, we instituted, and continue to follow, a number of actions to protect our workforce, including restricting business travel, imposing mandatory quarantine periods for employees who have traveled to areas impacted by the pandemic, modifying office functions to allow employees to work remotely, and modifying our warehouse and delivery operations to enforce enhanced safety protocols around social distancing, hygiene, and health screening.

While all of these steps are necessary and appropriate in light of the pandemic, they, coupled with state and local business closure orders and regulations, do impact our ability to operate our business in its ordinary and traditional course, and they have and may continue to cause us to experience reductions in productivity and disruptions to our business routines while they remain in place.

While many states have begun the process of lifting or curtaining shelter-in-place, business closure, and related orders, the rates of infection, hospitalization, and mortality associated with the COVID-19 virus continue to fluctuate, and have increased in some localities.

The potential magnitude or duration of the business and economic impacts from this pandemic continue to remain uncertain, and many of the associated negative trends may continue through fiscal 2020.

While the initial negative impact on our business from the COVID-19 pandemic has not been as significant as we initially expected, it could become more severe.

While many states have lifted or are in various stages of lifting or curtailing shelter-in-place, business closure, and related orders, the rates of infection, hospitalization, and mortality associated with the COVID-19 virus continue to fluctuate, and remain high or are increasing in many localities.

As a result, some localities are contemplating the reinstatement of certain prior restrictions, or the adoption of new restrictions, on businesses and individuals.

The potential magnitude or duration of the business and economic impacts from this pandemic continue to remain uncertain, and many of the associated negative trends may continue through fiscal 2020 and into fiscal 2021.

While the impact on our business from the COVID-19 pandemic has not been as significant as we initially expected, it could still become more severe.

Any of the negative impacts of the COVID-19 pandemic, including those described above, alone or in combination with others, may have a material adverse effect on our results of operations, financial condition, and cash flows.

3 unchanged sentences

We have been notified that we are not in compliance with certain listing standards of the New York Stock Exchange (“NYSE”), and we may be unable to regain compliance.

On April 22, 2020, we were notified by the NYSE that we were not in compliance with the continued listing standards set forth in Section 802.01B of the New York Stock Exchange Listed Company Manual because our average global market capitalization over a consecutive 30 trading-day period was less than $50 million, and, at the same time, our stockholders’ equity was less than $50 million.

On April 22, 2020, we were notified by the NYSE that we were not in compliance with the continued listing standards set forth in Section 802.01B of the New York Stock Exchange Listed Company Manual because our average global market capitalization over a consecutive 30 trading-day period as of April 20, 2020, was less than $50 million, and, at the same time, our stockholders’ equity was less than $50 million.

On April 28, 2020, we submitted, and on May 14, 2020, the NYSE accepted, our plan to regain conformity with this NYSE listing standard by January 1, 2022, in accordance with NYSE rules.

4 unchanged sentences

There can be no assurance that our plans to regain compliance will be successful.

We believe that the erosion of our average market capitalization was a direct result of the effects of the COVID-19 pandemic on the stock market, and we expect that a return to normalcy in the stock market should return our market capitalization to a compliant level.

Our 30 trading-day average global market capitalization was $69.8 million and $91.0 million at June 27, 2020, and July 31, 2020, respectively, in each case in excess of the $50 million required by the listing standard;

We believe that the erosion of our average market capitalization was a direct result of the effects of the COVID-19 pandemic on the stock market, and as of the end of our 2020 second and third quarters, our average market capitalization exceeded the $50 million required by the listing standard.

Our 30 trading-day average global market capitalization was $69.8 million and $184.1 million at June 27, 2020, and September 26, 2020, respectively.

However, a delisting would have an adverse effect on the liquidity of our common stock and, as a result, the market price for our common stock might decline if our common stock is delisted.

1 unchanged sentence

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-Q

Item 1A. Risk Factors