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Item 1A. Risk Factors

2024-02-29 compared with 2023-03-02 · 84 added, 119 removed, 223 unchanged (48% of the section changed)

Item 1A —Risk Factors

Our operations are subject to a number of risks.

You should carefully read and consider the following risk factors, together with all other information in this report, in evaluating our business.

If any of these risks, or any risks not presently known to us or that we currently believe are not significant, develops into an actual event, then our business, financial condition, and results of operations could be adversely affected.

If any of these risks, or any risks not presently known to us or that we currently believe are not significant, develop into an actual event, then our business, financial condition, and results of operations could be adversely affected.

If that happens, the market price of our common stock could decline, and you may lose all or part of your investment.

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If we lose the services of any employee consultant or group of employee consultants, or if our employee consultants fail to generate business or otherwise fail to perform effectively, that loss or failure could adversely affect our revenues and results of operations.

Many of our employee consultants have signed non-solicitation agreements.

We do not have non-competition agreements with a majority of our employee consultants, however, and they can terminate their relationships with us at will and without notice.

The non-competition and non-solicitation agreements that we have with some of our employee consultants offer us only limited protection and may not be enforceable in every jurisdiction.

Many of our employee consultants have signed confidentiality agreements and non-solicitation agreements.

We do not have non-competition agreements with a majority of our employee consultants, however, they can terminate their relationships with us at any time.

The post-employment restrictions that we have with some of our employee consultants offer us only limited protection and may not be enforceable in every jurisdiction.

In the event that an employee leaves, some clients may decide that they prefer to continue working with the employee rather than with us.

In the event an employee departs and acts in a way that we believe violates the employee's non-competition or non-solicitation agreement, we will consider any legal remedies we may have against such person on a case-by-case basis.

In the event an employee departs and acts in a way that we believe violates the employee's restrictions, we will consider any legal remedies we may have against such person on a case-by-case basis.

We may decide that preserving cooperation and a professional relationship with the former employee or clients that worked with the employee, or other concerns, outweigh the benefits of any possible legal recovery.

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These competing employers may be able to offer potential employees greater compensation and benefits or more attractive lifestyle choices, career paths, or geographic locations than we can.

Competition for these employee consultants has increased our labor costs, and a continuation of this trend could adversely affect our margins and results of operations.

We must pay competitive market wages for these employee consultants and increased competition for our target candidates could adversely affect our margins and results of operations.

Maintaining our professional reputation is crucial to our future success

Our ability to secure new engagements and hire qualified consultants as employees depends heavily on our overall reputation as well as the individual reputations of our employee consultants and principal non-employee experts.

Because we obtain a majority of our revenues from new engagements with existing clients, any client that is dissatisfied with our

performance on a single matter could seriously impair our ability to secure new engagements.

Given the frequently high-profile nature of the matters on which we work, including work before and on behalf of government agencies, any factor that diminishes our reputation or the reputations of any of our employee consultants or non-employee experts could make it substantially more difficult for us to compete successfully for both new engagements and qualified consultants.

Because we obtain a majority of our revenues from new engagements with existing clients, any client that is dissatisfied with our performance on a single matter could seriously impair our ability to secure new engagements.

Given the frequently high-profile nature of the matters on which we work, any factor that diminishes our reputation or the reputations of any of our employee consultants or non-employee experts could make it substantially more difficult for us to compete successfully for both new engagements and qualified consultants.

We depend on our non-employee experts

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These reasons could include affiliations with universities with policies that prohibit accepting specified engagements, termination of exclusive relationships, the pursuit of other interests, and retirement.

In many cases we seek to include restrictive covenants in our agreements with our non-employee experts, which could include non-competition agreements, non-solicitation agreements and non-hire agreements.

In many cases we seek to include restrictive covenants in our agreements with our non-employee experts, which could include non-competition agreements and/or non-solicitation agreements.

The limitation or termination of any of their relationships with us, or competition from any of them after these agreements expire, could harm our reputation, reduce our business opportunities and adversely affect our revenues and results of operations.

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We may not, however, be able to identify, hire, acquire, or successfully integrate new employees and acquired businesses without substantial expense, delay, or other operational or financial obstacles.

From time to time, we will evaluate the total mix of our services and we may conclude that acquired businesses may not achieve the results we previously expected.

Competition for future hiring and acquisition opportunities in our markets could increase the compensation we offer to potential employees or the prices we pay for businesses we wish to acquire.

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• the impact of earn-outs based on the future performance of our acquired businesses that may deter the acquired company from fully integrating into our existing business;

• potential difficulties in integrating new employees with diverse backgrounds and experiences with our existing employee consultants.

• potential difficulties in integrating new employees whose service offerings, expertise, or staffing requirements may vary from our existing employee consultants.

Our acquisitions have been accounted for as purchases, some of which involved purchase prices in excess of tangible asset values, resulting in the creation of goodwill and other intangible assets.

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Accordingly, the termination or significant reduction in the scope of a single large engagement could reduce our utilization and have an immediate adverse impact on our revenues and results of operations.

Information or technology systems failures, or a cybersecurity attack or other compromise of our or our client's confidential or proprietary information, could have a material adverse effect on our reputation, business and results of operations

Information, technology systems or service failures, or a cybersecurity attack or other compromise of our or our client's confidential or proprietary information, could have a material adverse effect on our reputation, business and results of operations

We rely upon our information and technology infrastructure and systems to operate, manage and run our business and to provide services to our clients.

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Our ability to secure and maintain the confidentiality and integrity of this information is critical to our reputation and the success of our businesses.

We must comply with the privacy laws of all of the jurisdictions in which we operate, including the strict general data privacy regulation (GDPR) in the European Union, laws that adopt the GDPR as a model (such as Brazil's comprehensive data protection law, the LGPD), and the U.S.

state and federal laws such as the California Consumer Protection Act (CCPA), and these laws are becoming increasingly complex and vary by jurisdiction.

We must comply with applicable U.S.

and foreign privacy laws and regulations, including the strict General Data Privacy Regulation ("GDPR") in the European Union, laws that adopt the GDPR as a model (such as Brazil's General Law for the Protection of Privacy), and U.S.

state and federal laws such as the California Consumer Protection Act, and these laws are becoming increasingly complex and vary by jurisdiction.

The costs of complying with these laws and any fines resulting from lack of compliance, and the other costs of protecting our and our clients' confidential information, could have a material effect on our financial results.

In addition, we may be affected by or subject to events that are out of our control, including, but not limited to, cybersecurity or other malicious attacks, which continue to evolve and pose a constant risk, unauthorized system intrusions by unknown third parties, viruses, malicious software, worms, failures in our or our third party hosting sites' (whether hosted offsite or in the cloud) information and technology systems, disruptions in the Internet or electricity grids, natural disasters, and terrorism.

In addition, our information and technology systems may be affected by or subject to events that are out of our control, including, but not limited to, cybersecurity or other malicious attacks, which continue to evolve and pose a constant risk, unauthorized system intrusions by unknown third parties, viruses, malicious software, worms, failures in our or our third party hosting sites' (whether hosted offsite or in the cloud) information and technology systems, disruptions in the Internet or electricity grids, natural disasters, and terrorism.

Any of these events could disrupt our or our client's business operations or cause us or our clients to incur unanticipated losses, including the costs of investigating and remediating any such event and any fines related thereto, as well as reputational damage, any of which could have a material adverse effect on our business and results of operations.

In addition, our or our clients' sensitive, confidential or proprietary information could be compromised or corrupted, whether intentionally or unintentionally, by our employees, outside consultants, vendors, or rogue third-party "hackers" or enterprises.

A breach or compromise of the security of our information technology systems or infrastructure, or our processes for securing sensitive, confidential or proprietary information, whether due to a cybersecurity attack or otherwise, could result in the loss or misuse of this information.

in the loss or misuse of this information.

Any such loss or misuse could result in our suffering claims, fines, damages, losses or reputational damage, any of which could have a material adverse effect on our business and results of operations.

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We provide our services primarily in connection with significant or complex transactions, disputes, or other matters that are usually adversarial or that involve sensitive client information.

Our engagement by a client may preclude us from accepting

engagements with the client's competitors or adversaries because of conflicts between their business interests or positions on disputed issues or other reasons.

Our engagement by a client may preclude us from accepting engagements with the client's competitors or adversaries because of conflicts between their business interests or positions on disputed issues or other reasons.

Accordingly, the nature of our business limits the number of both potential clients and potential engagements.

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Overall global economic, business, health and political conditions, as well as conditions specific to the industries we or our clients serve, can affect our clients' businesses and financial condition, their demand or ability to pay for our services, and the market for our services.

These conditions, all of which are outside of our control, include but are not limited to merger and acquisition activity levels, the availability, cost and terms of credit, the state of the United States and global financial markets, including the impact of rising inflation rates, the levels of litigation and regulatory and administrative investigations and proceedings, global health crises and pandemics, political developments, including the June 2016 referendum where voters in the United Kingdom ("U.K.") approved an exit from the European Union ("E.U."), commonly referred to as "Brexit," geopolitical unrest or other conflicts in foreign nations, natural disasters and the potential impact such developments, uncertainties or further unrest could have on our clients, on the markets in which we operate and on general economic and business conditions.

These conditions, all of which are outside of our control, include but are not limited to merger and acquisition activity levels, the availability, cost and terms of credit, the state of the United States and global financial markets, including the impact of rising inflation rates, the levels of litigation and regulatory and administrative investigations and proceedings, global health crises and pandemics, political developments, geopolitical unrest or other conflicts in foreign nations, natural disasters and the potential impact such developments, uncertainties or further unrest could have on our clients, on the markets in which we operate and on general economic and business conditions.

In addition, many of our clients are in highly regulated industries, and regulatory and legislative changes affecting these industries could impact the market for our service offerings, render our current service offerings obsolete, or increase the competition among providers of these services.

Although we are not able to predict the positive or negative effects that general changes in global economic, business and political conditions will have on our individual practice areas or our business as a whole, any specific changes in these conditions could have a material adverse impact on our revenues, results of operations and financial condition.

Brexit created political, economic, and regulatory uncertainty in the U.K., where our European operations are headquartered.

The impact of Brexit, including the U.K.’s relationship with the E.U.

and other countries, including the U.S., remains unclear.

formally left the E.U.

on January 31, 2020.

Brexit could adversely affect European or worldwide political, regulatory, economic or market conditions and could contribute to instability in political institutions and regulatory agencies.

This uncertainty may result in new regulatory, tax, operations, and cost challenges to our U.K., European and global operations.

Currency fluctuations caused by or relating to Brexit could adversely affect our financial position.

Such uncertainties may significantly impact our business, as customers of our U.K.-based operations evaluate their business needs in

consideration of changing economic conditions or increased international regulatory complexities.

There can be no assurance that any or all of these events, or others that we cannot anticipate at this time, will not have a material adverse effect on our business, financial condition and results of operations.

Our business and operations may in the future be, adversely affected by epidemics or pandemics such as the COVID-19 pandemic outbreak

We may face risks related to health epidemics and pandemics or other outbreaks of communicable diseases.

For example, in March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic.

In response, many governments have implemented, and continue to implement, "shelter-in-place" restrictions, travel restrictions, and other measures to reduce the spread of COVID-19.

Many businesses, including those of our clients, have responded with their own work-from-home policies and procedures.

Although our offices remain open and capable of hosting our colleagues, we have invited them to work wherever they feel most comfortable.

A public health epidemic or pandemic, such as the COVID-19 pandemic, poses the risk that our employees, our non‑employee experts, governmental agencies, courts, clients, and parties otherwise engaged in the delivery of our services may be prevented from conducting business activities for an indefinite period of time, including due to shutdowns that may be requested or mandated by governmental authorities, or that such epidemic may otherwise interrupt or impair business activities.

The COVID-19 pandemic continues to cause disruption to the global economy, including in the regions in which we and our clients do business.

We continue to monitor the pandemic, and while periodic local increases and decreases in COVID-19 cases are likely, generally the restrictions due to and in response to the pandemic continue to be relaxed in most locations.

However, the COVID-19 pandemic and efforts to manage it, including those by governmental authorities, have had, and could continue to have, an adverse effect on the economy and may have an adverse impact on our business.

This includes, for example, the delay or disruption of the timing of projects due to the length and severity of any restrictions or limitations implemented in the future and the risk that COVID-19 poses our employees, our non-employee experts, governmental agencies, courts, clients, and parties otherwise engaged in the delivery of our services which may prevent them from conducting business activities in the ordinary course for an indefinite period.

Extended shutdowns or other restrictions could also adversely limit our business operations or increase costs.

Although economic conditions have generally improved since the height of the COVID-19 pandemic, the strength of the economic recovery is uncertain and may vary across industries, clients and from country to country.

The ultimate extent and robustness of any economic recovery from the impact of the pandemic imposes a significant degree of uncertainty and complexity, and may adversely affect our operations and client demand for our services.

Adverse or weakening economic conditions either as a direct or indirect result of the COVID-19 pandemic, may also result in deterioration in the collection of customer accounts receivable, as well as a reduction in sales.

Our results of operations and consequently our business may be adversely affected if we are not able to maintain our current bill rates, compensation costs and/or utilization rate

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• Our ability to predict future demand for our services and maintain the appropriate staffing levels without significantly underutilizing consultants.

The interpretation and application of U.S.

tax legislations or other changes in U.S.

taxation of our operations could harm our business, revenue, cash flows and financial results

Tax reform remains a legislative priority for the U.S.

government and certain legislations have already been enacted.

Further regulatory or legislative developments may arise from the proposed U.S.

tax reform under the Biden Administration’s “Build Back Better Act” which is proposing a new corporate alternative minimum tax and increased taxation of international business operations.

While there is current uncertainty regarding what changes will eventually be enacted, such new laws may affect our operating results and financial conditions.

On August 16, 2022, the U.S.

government enacted the Inflation Reduction Act of 2022 that includes, among other provisions, changes to the U.S.

corporate income tax system, including a fifteen percent minimum tax based on "adjusted financial statement income,” and a one percent excise tax on net repurchases of stock after December 31, 2022.

The Company is continuing to evaluate the Inflation Reduction Act and its requirements, as well as the application to its business.

What changes if any to the U.S.

taxation of our operations may increase our worldwide effective tax rate, result in additional taxes or other costs or have other material consequences, which could harm our business, revenue, cash flows and financial results.

The interpretation and application of tax legislation or other changes in taxation of our operations could harm our business, revenue, cash flows and financial results

We are subject to income and other taxes in the U.S.

at the state and federal level and also in foreign jurisdictions.

Changes in applicable U.S.

state, federal or foreign tax laws and regulations, or their interpretation and application, could materially affect our tax expense and profitability.

Future changes in tax laws, treaties or regulations, and their interpretation or enforcement, may be unpredictable, particularly as taxing jurisdictions face an increasing number of political, budgetary and other fiscal challenges.

Tax rates in the jurisdictions in which we operate may change as a result of macroeconomic and other factors outside of our control, making it increasingly difficult for multinational corporations like ourselves to operate with certainty about taxation in many jurisdictions.

As a result, we could be materially adversely affected by future changes in tax law or policy (or in their interpretation or enforcement) in the jurisdictions where we operate, including the United States, which could have a material adverse effect on our business, cash flow, results of operations, financial condition, as well as our effective income tax rate.

Increasing scrutiny and changing expectations from governmental organizations, investors, clients and our colleagues with respect to our ESG-related practices and those of our clients may impose additional costs on us or expose us to new or additional risks

There is increased regulation and focus, including under the European Union’s Corporate Sustainability Reporting Directive and from other governmental organizations, and our investors, clients and employees, on ESG issues such as environmental stewardship, climate change, diversity and inclusion, racial justice and workplace culture conduct.

We continue to evaluate existing, new and proposed governmental requirements, and to monitor, report and assess policies and practices that we believe will align with our client, investor and other third-party imposed ESG-related standards and expectations.

For example, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters, and unfavorable ratings of the Company may lead to negative investor sentiment, stock price fluctuations and the diversion of investment to other companies.

If our ESG practices do not meet evolving rules and regulations or investor or other stakeholder expectations and standards (or if we are viewed in a negative light based on positions we do or do not take or work we do or do not perform for certain clients or industries), then our reputation, our ability to attract or retain employee consultants and non-employee experts, and our ability to attract new engagements and clients could be negatively impacted, as could our attractiveness as an investment, service provider, business partner or acquirer.

Similarly, our failure or perceived failure to pursue or fulfill our current or future goals, targets and objectives or to satisfy various reporting standards within the timelines we announce, or at all, could also have similar negative impacts.

Our revenues, operating results and cash flows are likely to fluctuate

We experience fluctuations in our revenues, operating results and cash flows and expect that they will continue to occur in the future due to factors that are either within or outside of our control, including, but not limited to, the timing and duration of our client engagements, utilization of our employee consultants, the types of engagements we are working on at different times, the geographic locations of our clients or where the services are rendered, the length of billing and collection cycles, hiring, business and capital expenditures, share repurchases, dividends, debt repayments, and other general economic factors.

times, the geographic locations of our clients or where the services are rendered, the length of billing and collection cycles, hiring, business and capital expenditures, share repurchases, dividends, debt repayments, and other general economic factors.

We may also experience future fluctuations in our cash flows from operations because of increases in employee compensation, including changes to our incentive compensation structure and the timing of incentive payments, which we generally pay during the first quarter of each year, or hiring or retention payments or bonuses which are paid throughout the year.

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• collectability of receivables and unbilled work in process.

Because we generate most of our revenues from consulting services that we provide on an hourly fee basis, our revenues in any period are directly related to the number of our employee consultants, their billing rates, and the number of billable hours

they work in that period.

We have a limited ability to increase any of these factors in the short term.

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The costs and outcome of any lawsuits or claims could have a material adverse effect on our business and results of operations.

We may need to take material write-offs for the impairment of goodwill and other intangible assets, including if our market capitalization declines

We may need to take material write-offs for the impairment of goodwill, including if our market capitalization declines

As further described in our Notes to Consolidated Financial Statements, goodwill is monitored annually for impairment, or more frequently, if events or circumstances exist that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

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If we are required to take a substantial impairment charge, our reported operating results would be materially adversely affected in such period, though such a charge would have no impact on cash flows or working capital for such period.

The market price of our common stock may be volatile

The market price of our common stock has fluctuated widely and may continue to do so.

Many factors could cause the market price of our common stock to rise and fall.

Some of these factors are:

• variations in our quarterly results of operations;

• changes in quarterly dividends;

• the extent of any repurchases of shares of our common stock;

• the hiring or departure of key personnel or non-employee experts;

• changes in our professional reputation;

• the introduction of new services by us or our competitors;

• acquisitions or strategic alliances involving us or our competitors;

• changes in accounting principles or methods or issues with our internal control over financial reporting;

• changes in estimates of our performance or recommendations by securities analysts;

• future sales of shares of common stock in the public market;

• market conditions in the industry and the economy as a whole.

In addition, the stock market often experiences significant price and volume fluctuations.

These fluctuations are often unrelated to the operating performance of particular companies.

These broad market fluctuations may adversely affect the market price of our common stock.

When the market price of a company's stock drops significantly, shareholders often institute securities class action litigation against that company.

Any litigation against us could cause us to incur substantial costs, divert the time and attention of our management and other resources, or otherwise harm our business.

Our performance could be affected if employees and non-employee experts default on loans

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In addition, if we fail to accurately estimate third-party vendor expenses and the resources required for a fixed-price project or fail to satisfy our contractual obligations in a manner consistent with the project budget, we might generate a smaller profit or incur a loss on the project.

On occasion, we have had to commit unanticipated additional resources to complete projects, and we may have to take similar action in the future, which could adversely affect our revenues and results of operations.

Revenue generated from fixed-price contracts was approximately 18% of our total revenues for the year ended December 30, 2023.

There can be no assurance that we will continue to declare cash dividends at all or in any particular amounts

Our Board of Directors declared the first quarterly dividend on our common stock during 2016 and we have continued to pay quarterly dividends throughout fiscal 2022.

Although we anticipate paying regular quarterly dividends on our common stock for the foreseeable future, the declaration of dividends is subject to the discretion of our Board of Directors, and is restricted by applicable state law limitations on distributions to shareholders.

As a result, the amount, if any, of the dividends to be paid by us in the future depends upon a number of factors, including but not limited to our available cash on hand, anticipated cash needs, overall financial condition, and future prospects for earnings and cash flows, as well as other factors

considered relevant by our Board of Directors.

In addition, our Board of Directors may also suspend the payment of dividends at any time.

Any reduction or suspension in our dividend payments could adversely affect the price of our common stock.

Our stock repurchase programs could affect the market price of our common stock and increase its volatility

Our Board of Directors has from time to time authorized repurchase programs of our outstanding common stock.

Under these stock repurchase programs, we are authorized to repurchase, from time-to-time, shares of our outstanding common stock on the open market or in privately negotiated transactions.

The timing and amount of stock repurchases are determined based upon our evaluation of market conditions and other factors.

Any stock repurchase program may be suspended, modified or discontinued at any time, and we have no obligation to repurchase any amount of our common stock under any program.

Repurchases pursuant to our stock repurchase programs could affect the market price of our common stock and increase its volatility.

Any termination of our stock repurchase programs could cause a decrease in the market price of our common stock, and the existence of a stock repurchase program could cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity and trading volumes of our common stock.

There can be no assurance that any stock repurchases under these programs will enhance stockholder value because the market price of our common stock may decline below the levels at which those repurchases were made.

Although our stock repurchase programs are intended to enhance long-term stockholder value, short-term fluctuations in the market price of our common stock could reduce the programs' effectiveness.

We could incur substantial costs protecting our proprietary rights from infringement or defending against a claim of infringement

As a professional services organization, we may rely on non-competition and non-solicitation agreements with some of our employees and non-employee experts to protect our proprietary rights.

As a professional services organization, we may rely on post-employment restrictions with some of our employees and non-employee experts to protect our proprietary rights.

These agreements, however, may offer us only limited protection and may not be enforceable in every jurisdiction.

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If these expenses increase or we experience a claim for which coverage is not provided, results of our operations and financial condition could be materially and adversely affected.

Our charter and by-laws, and Massachusetts law may deter takeovers

Our articles of organization and by-laws and Massachusetts law contain provisions that could have anti-takeover effects and that could discourage, delay, or prevent a change in control or an acquisition that our shareholders may find attractive.

These provisions may also discourage proxy contests and make it more difficult for our shareholders to take some corporate actions, including the election of directors.

These provisions could limit the price that investors might be willing to pay for shares of our common stock.

Risks Related to Competition

Risks Related to Our Competition

Competition from other litigation, regulatory, financial, and management consulting firms could hurt our business

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• unexpected changes in trading policies, regulatory requirements, tariffs, and other barriers;

• continued uncertainty around how Brexit will impact the U.K.

generally, including its impact on the regulatory environment, currency, tax, and operations that could disrupt trade, the sale of our services, the movement of our people between the U.K., E.U., and other locations, and the global economy;

• restrictions on the repatriation of earnings;

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• civil disturbances or other catastrophic events that reduce business activity.

If our international revenues increase relative to our total revenues, these factors could have a more pronounced effect on our operating results.

If our international revenues increase relative to our total revenues, the above listed factors could have a more pronounced effect on our operating results.

Fluctuations in currency exchange rates could adversely affect our operations

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The fluctuation in foreign currency markets can both increase and decrease our overall revenue and expenses for any fiscal period, and therefore has a resulting negative impact on our reported results of operations and on our ability to predict our future results and earnings accurately.

Additionally, global economic events, including Brexit, have caused and may continue to cause significant volatility

in currency exchange rate fluctuations.

The impact of Brexit on currency exchange rates and the significance of the resulting fluctuations in the exchange rate of the British Pound may not be fully realized for several years or more.

Additionally, global economic events have caused and may continue to cause significant volatility in currency exchange rate fluctuations.

Revenue generated from our U.K.-based operations was approximately 15% (which includes currency exchange effects) of our total revenues for the year ended December 30, 2023.

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We rely on our cash and cash equivalents, cash flows from operations and borrowings under our credit agreement to fund our short-term and anticipated long-term operating activities.

We currently have a revolving credit facility with our bank for up to $250.0 million, which may be decreased at CRA's option to $200.0 million during the period from July 16th in a year through January 15th in the next year.

Additionally, for the period from January 16th to July 15th of each calendar year, CRA may elect to not increase the revolving credit facility to $250.0 million.

We currently have a revolving credit facility with our bank for up to $250.0 million, which may be decreased at CRA's option to $200.0 million during the period from July 16 in a year through January 15 in the next year.

Additionally, for the period from January 16 to July 15 of each calendar year, CRA may elect to not increase the revolving credit facility to $250.0 million.

The amounts available under this revolving credit facility are constrained by various financial covenants and reduced by certain letters of credit outstanding.

At February 24, 2023, we had no borrowings outstanding under the credit agreement and approximately $195.6 million available for future borrowings, after consideration of outstanding letters of credit.

Our loan agreement with the bank will mature on August 19, 2027.

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Our ability to secure short-term and long-term debt or equity financing in the future will also depend on several factors, including our future profitability, the levels of our debt and equity, restrictions under our existing or any future revolving credit facility, and the overall credit and equity market environments.

Item 1B —Unresolved Staff Comments

Not applicable.

There were no borrowings outstanding under the revolving credit facility as of December 30, 2023.

Risks Related to Our Common Stock