3 unchanged sentences
The risks that are highlighted below are not the only ones that we face.
−Removed: If any of the following risks occur, our business, financial condition or operating results could be negatively affected.
−Removed: Because we currently derive a significant portion of our revenues from a small number of customers, any decrease in orders from these customers could have an adverse effect on our business, financial condition and operating results.
−Removed: We depend on a small number of customers for a large portion of our business, and changes in the level of our customers' orders have, in the past, had a significant impact on our results of operations.
+Added: If any of the following risks occur, our business, financial condition and operating results could be negatively affected.
+Added: Risks Related to Our Business and Industry
+Added: Because we currently derive a substantial portion of our revenues from a small number of customers, any decrease in orders from these customers could have an adverse effect on our business, financial condition and operating results.
+Added: We depend on a small number of customers for a substantial portion of our business, and changes in the level of our customers' orders have, in the past, had a significant impact on our results of operations.
If a major customer significantly delays, reduces, or cancels the level of business it does with us, there could be an adverse effect on our business, financial condition and operating results.
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If one or more of our major customers were to become insolvent or otherwise unable to pay or were to delay payment for our products, our business, financial condition and operating results could be materially adversely affected.
−Removed: Negative or unexpected tax consequences could adversely affect our results of operations.
−Removed: We operate globally and changes in tax laws could adversely affect our results.
−Removed: The international tax environment continues to change as a result of both coordinated actions by governments and unilateral measures enacted by individual countries, such as the comprehensive tax reform enacted in the U.S.
−Removed: in 2017, which could significantly impact our effective tax rate, tax liabilities, and ability to utilize deferred tax assets.
−Removed: Adverse changes in the underlying profitability and financial outlook of our operations in several jurisdictions could lead to changes in our valuation allowances against deferred tax assets and other tax accruals that could materially and adversely affect our results of operations.
−Removed: In addition, acquisitions or divestitures may cause our effective tax rate to change.
−Removed: We base our tax accounting positions upon the anticipated nature and conduct of our business and upon our understanding of the tax laws of the various countries in which we have assets or conduct activities.
−Removed: However, our tax accounting positions are subject to review and possible challenge by taxing authorities and to possible changes in law, which may have a retroactive effect.
−Removed: We may be unable to compete effectively against competitors.
−Removed: The industries in which we operate are highly competitive and characterized by price erosion and rapid technological change.
−Removed: We compete against many domestic and foreign companies, some of which have substantially greater manufacturing, financial, research and development, and marketing resources than we do.
−Removed: If any customer becomes dissatisfied with our prices, quality, or timeliness of delivery, among other things, it could award business to our competitors.
−Removed: Moreover, some of our customers could choose to manufacture and develop particular products themselves rather than purchase them from us.
−Removed: Increased competition could result in price reductions, reduced profit margins and loss of market share, each of which could materially adversely affect our business, financial condition and operating results.
−Removed: These developments also may materially adversely affect our ability to compete successfully going forward.
−Removed: We cannot assure you that our products will continue to compete successfully with our competitors' products, including OEMs.
−Removed: We may be unable to keep pace with rapid technological changes that could make some of our products or processes obsolete before we realize a return on our investment.
−Removed: The technologies relating to some of our products have undergone, and are continuing to undergo, rapid and significant changes.
−Removed: End markets for our products are characterized by technological change, frequent new product introductions and enhancements, changes in customer requirements, and emerging industry standards.
−Removed: The introduction of products embodying new technologies and the emergence of new industry standards could render our existing products obsolete and unmarketable before we can recover any or all of our research, development and commercialization expenses, or our capital investments.
−Removed: Furthermore, the life cycles of our products and the products we manufacture for others vary, may change, and are difficult to estimate.
−Removed: We may experience difficulties that could delay or prevent the successful development, introduction and marketing of new products or product enhancements and our new products or product enhancements may not adequately meet the requirements of the
−Removed: CTS CORPORATION 7
−Removed: marketplace or achieve market acceptance.
−Removed: If we are unable, for technological or other reasons, to develop and market new products or product enhancements in a timely and cost-effective manner, our business, financial condition and operating results could be materially adversely affected.
Our customers may cancel their orders, change production quantities or locations or delay production.
−Removed: We generally do not obtain firm, long-term purchase commitments from our customers, and regularly experience reduced or extended lead times in customer orders.
−Removed: Customers cancel orders, change production quantities and delay production for a number of reasons.
+Added: We generally receive volume estimates, but not firm volume commitments from our customers, and may experience reduced or extended lead times in customer orders.
+Added: Customers may cancel orders, change production quantities and delay production for a number of reasons.
Uncertain economic and geopolitical conditions may result in some of our customers delaying the delivery of some of the products we manufacture for them and placing purchase orders for lower volumes of products than previously anticipated.
Cancellations, reductions or delays by a significant customer or by a number of customers may harm our results of operations by reducing the volumes of products we manufacture and sell, as well as by causing a delay in the recovery of our expenditures for inventory in preparation for customer orders, or by reducing our asset utilization, resulting in lower profitability.
−Removed: In addition, customers may require that manufacturing of their products be transitioned from one of our facilities to another to achieve cost reductions and other objectives.
+Added: In addition, customers may request that manufacturing of their products be transitioned from one of our facilities to another to achieve cost reductions and other objectives.
Such transfers may result in inefficiencies and costs due to resulting excess capacity and overhead at one facility and capacity constraints and the inability to fulfill all orders at another.
In addition, we make key decisions based on our estimates of customer requirements, including determining the levels of orders that we will seek and accept, production schedules, component procurement commitments, personnel needs and other resource requirements.
−Removed: The short-term nature of our customers' commitments and the changes in demand for their products may reduce our ability to estimate future customer requirements accurately.
+Added: Changes in demand for our customers’ products may reduce our ability to estimate future customer requirements accurately.
This may make it difficult to schedule production and maximize utilization of our manufacturing capacity.
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We often increase staffing and capacity, and incur other expenses to meet the anticipated demand of our customers, which causes reductions in our gross margins if customer orders are delayed or canceled.
−Removed: On occasion, customers require rapid increases in production, which may stress our resources and reduce margins.
+Added: On occasion, customers may require rapid increases in production, which may stress our resources and reduce margins.
We may not have sufficient capacity at any given time to meet our customers' demands.
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We sell products to customers in cyclical industries that are subject to significant downturns that could materially adversely affect our business, financial condition and operating results.
+Added: CTS CORPORATION 8
We sell products to customers in cyclical industries that have experienced economic and industry downturns.
The markets for our products have softened in the past and may again soften in the future.
−Removed: We may face reduced end-customer demand, underutilization of our manufacturing capacity, changes in our revenue mix and other factors that could adversely affect our results of operations in the near-term.
−Removed: We cannot predict whether we will achieve profitability in future periods.
−Removed: We derive a substantial portion of our revenues from customers in the transportation, information technology and telecommunications industries and are susceptible to trends and factors affecting those industries.
−Removed: Sales to the transportation, information technology and telecommunications industries represent a substantial portion of our revenues.
−Removed: Factors negatively affecting these industries and the demand for their products also negatively affect our business, financial condition and operating results.
−Removed: Any adverse occurrence, including among others, industry slowdown, recession, political instability, costly or constraining regulations, increased tariffs, reduced government budgets and spending, armed hostilities, terrorism, excessive inflation, prolonged disruptions in one or more of our customers' production schedules or labor disturbances, that results in a decline in the volume of sales in these industries, or in an overall downturn in the business and operations of our customers in these industries, could materially adversely affect our business, financial condition and operating results.
−Removed: These industries are generally unionized and some of our customers have experienced labor disruptions in the past.
−Removed: Furthermore, these industries are highly cyclical in nature and sensitive to changes in general economic conditions, consumer preferences and interest rates.
+Added: We may face reduced end-customer demand, underutilization of our manufacturing capacity, changes in our revenue mix and other factors that could adversely affect our results.
+Added: We are susceptible to trends and factors affecting industries that we serve.
+Added: Factors negatively affecting the industries we serve and the demand for their products could negatively affect our business, financial condition and operating results.
+Added: Any adverse occurrence, including among others, industry slowdown, recession, public health crisis, political instability, costly or constraining regulations, increased tariffs, reduced government budgets and spending, armed hostilities, terrorism, excessive inflation, prolonged disruptions in one or more of our customers' production schedules or labor disturbances, that results in a decline in the volume of sales in these industries, or in an overall downturn in the business and operations of our customers in these industries, could materially adversely affect our business, financial condition and operating results.
+Added: These industries may be unionized and some of our customers have experienced labor disruptions in the past.
+Added: Furthermore, these industries can be highly cyclical in nature and sensitive to changes in general economic conditions, consumer preferences and interest rates.
The failure of manufacturers that we serve may result in the failure to receive payment in full for products sold in the past and an abrupt cancellation in demand for certain products.
Weakness in demand, the insolvency of manufacturers that we serve or their suppliers, and constriction of credit markets may negatively and materially affect our facility utilization, cost structure, financial condition, and operating results.
−Removed: CTS CORPORATION 8
−Removed: Products we manufacture may contain design or manufacturing defects that could result in reduced demand for our products or services and liability claims against us.
−Removed: Despite our quality control and quality assurance efforts, defects may occur in the products we manufacture due to design or manufacturing errors or component failure.
−Removed: Product defects could result in delayed shipments and reduced demand for our products.
−Removed: We may be subject to increased costs due to warranty claims on defective products.
−Removed: Product defects could result in product liability claims against us where defects cause, or are alleged to cause, property damage, bodily injury or death.
−Removed: As we grow our business in the transportation and medical device markets, the risk of exposure to product liability litigation increases.
−Removed: We may be required to participate in a recall involving products which are, or are alleged to be, defective.
−Removed: We carry insurance for certain legal matters involving product liability;
−Removed: however, we do not have coverage for all costs related to product defects and the costs of such claims, including costs of defense and settlement, may exceed our available coverage.
−Removed: Accordingly, our results of operations, cash flow and financial position could be adversely affected.
−Removed: We are exposed to fluctuations in foreign currency exchange rates that may adversely affect our business, financial condition and operating results.
−Removed: We transact business in various foreign countries.
−Removed: We present our consolidated financial statements in U.S.
−Removed: dollars, but a portion of our revenues and expenditures are transacted in other currencies.
−Removed: As a result, we are exposed to fluctuations in foreign currencies.
−Removed: Additionally, we have currency exposure arising from funds held in local currencies in foreign countries.
−Removed: Volatility in the exchange rates between the foreign currencies and the U.S.
−Removed: dollar could harm our business, financial condition and operating results.
−Removed: Furthermore, to the extent we sell our products in foreign markets, currency fluctuations may result in our products becoming too expensive for foreign customers.
−Removed: Our operating results vary significantly from period to period.
+Added: Our operating results may vary significantly from period to period.
We experience fluctuations in our operating results.
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and local conditions and events that may affect our production volumes, such as labor conditions or political instability.
−Removed: We face risks relating to our international operations.
−Removed: Because we have significant international operations, our operating results and financial condition could be materially adversely affected by economic, political, health, regulatory and other factors existing in foreign countries in which we operate.
−Removed: Our international operations are subject to inherent risks, which may materially adversely affect us, including:
−Removed: political and economic instability in countries in which our products are manufactured;
−Removed: expropriation or the imposition of government controls;
−Removed: changes in government regulations;
−Removed: export license requirements;
−Removed: trade restrictions;
−Removed: earnings repatriation and expatriation restrictions;
−Removed: exposure to different legal standards, including related to intellectual property;
−Removed: health conditions and standards;
−Removed: currency controls;
−Removed: fluctuations in exchange rates;
−Removed: increases in the duties and taxes we pay;
−Removed: inflation or deflation;
−Removed: greater difficulty in collecting accounts receivable and longer payment cycles;
−Removed: changes in labor conditions and difficulties in staffing and managing our international operations;
−Removed: limitations on insurance coverage against geopolitical risks, natural disasters, and business operations;
−Removed: and communication among and management of international operations.
−Removed: In addition, these same factors may also place us at a competitive disadvantage compared to some of our foreign competitors.
−Removed: We may face risks associated with violations of the Foreign Corrupt Practices Act ("FCPA") and similar anti-bribery laws.
−Removed: The FCPA and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business.
−Removed: Our Code of Ethics mandates compliance with these anti-bribery laws.
−Removed: We operate in many parts of the world where strict compliance with anti-bribery laws may conflict with local customs and practices.
−Removed: We cannot assure you that our internal controls and procedures always will protect us from the detrimental actions by our employees or agents.
−Removed: If we are found to be liable for FCPA violations (either due to our own acts or inadvertence or due to the acts or inadvertence of others), we could suffer from criminal or civil penalties or other sanctions, which could have a material adverse effect on our business.
−Removed: CTS CORPORATION 9
−Removed: Public health or safety concerns and governmental restrictions, including the recent coronavirus outbreak, that impact the availability of raw materials, labor, or the movement of goods in some of the countries in which we operate could have a material adverse effect on our business, financial condition and operating results.
−Removed: We may restructure our operations or fail to execute capital projects as planned, which may materially adversely affect our business, financial condition and operating results.
−Removed: We have announced and initiated restructuring plans or capital projects at various times in the recent past designed to revise and consolidate certain aspects of our operations for the purpose of improving our cost structure or manufacturing efficiency.
−Removed: We may incur restructuring and impairment charges in the future if circumstances warrant.
−Removed: Additionally, if we are unsuccessful in implementing restructuring plans or in executing capital projects, we may experience disruptions in our operations and higher ongoing costs, which may materially adversely affect our business, financial condition and operating results.
−Removed: Losses in the financial markets could negatively impact pension asset returns and cash flow due to possible required contributions in the future.
−Removed: We make a number of assumptions relating to our pension plans in order to measure the financial position of the plans and the net periodic benefit cost.
−Removed: The most significant assumptions relate to the discount rate and the expected long-term return on plan assets.
−Removed: If these assumptions prove to be significantly different from actual rates, then we may need to record additional expense relating to the pension plans, which could require cash contributions to fund future pension obligation payments and could have a material adverse effect on our financial condition and results of operations.
+Added: We may experience shortages and increased costs of raw material and required electronic components.
+Added: Unanticipated raw material or electronic component shortages may prevent us from making scheduled shipments to customers.
+Added: Our inability to make scheduled shipments could cause us to experience a shortfall in revenue, increase our costs and adversely affect our relationship with affected customers and our reputation as a reliable supplier.
+Added: We may be required to pay higher prices for raw materials or electronic components in short supply and order these raw materials or electronic components in greater quantities to compensate for variable delivery times.
+Added: We may also be required to pay higher prices for raw materials or electronic components due to inflationary trends regardless of supply.
+Added: We are also dependent on our suppliers' ability to supply and deliver raw materials on a timely basis at negotiated prices.
+Added: Any delay or inability to deliver raw materials by our suppliers may require that we attempt to mitigate such failure or fail to make deliveries to our customers on a timely basis.
+Added: As a result, raw material or electronic component shortages, price increases, or failure to perform by our suppliers could adversely affect our operating results for a particular period due to the resulting revenue shortfall and/or increased costs.
We may pursue acquisition opportunities that complement or expand our business as well as divestitures that could impact our business operations.
−Removed: We may not be able to complete these transactions, and these transactions, if executed, may pose significant risks that could materially adversely affect our business, financial condition and operating results.
+Added: We may not be able to complete these transactions, and these transactions, if executed, may pose risks that could materially adversely affect our business, financial condition and operating results.
On an ongoing basis we explore opportunities to buy other businesses or technologies that could complement, enhance or expand our current business or product lines or that might otherwise offer us growth opportunities.
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These and other factors could harm our ability to achieve anticipated levels of profitability from acquired operations or realize other anticipated benefits of an acquisition and could adversely affect our business and operating results.
+Added: CTS CORPORATION 9
We have in the past, and may in the future, consider divesting certain business operations.
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Failure to timely complete or consummate a divestiture may negatively affect valuation of the affected business or result in restructuring charges.
−Removed: If we are unable to protect our intellectual property or we infringe, or are alleged to infringe, on others' intellectual property rights, our business, financial condition and operating results could be materially adversely affected.
−Removed: The success of our business depends, in part, upon our ability to protect trade secrets, trademarks, copyrights and patents, obtain or license patents and operate without infringing on the intellectual property rights of others.
−Removed: We rely on a combination of trade secrets, copyrights, patents, nondisclosure agreements and technical measures to protect our proprietary rights in our products and technology.
−Removed: The steps we have taken to prevent misappropriation of our technology may be inadequate.
−Removed: In addition, the laws of some foreign countries in which we operate do not protect our proprietary rights to the same extent as do the laws of the United States.
−Removed: Although we continue to evaluate and implement protective measures, there can be no assurance that these efforts will be successful.
−Removed: Our inability to protect our intellectual property rights could diminish or eliminate the competitive advantages that we derive from our technology, cause us to lose sales or otherwise harm our business.
−Removed: CTS CORPORATION 10
−Removed: We believe that patents will continue to play an important role in our business.
−Removed: However, there can be no assurance that we will be successful in securing patents for claims in any pending patent application or that any issued patent will provide us with any competitive advantage.
−Removed: We also cannot provide assurance that the patents will not be challenged by third parties or that the patents of others will not materially adversely affect our ability to do business.
−Removed: We may become involved in litigation in the future to protect our intellectual property or because others may allege that we infringed on their intellectual property.
−Removed: These claims and any resulting lawsuit could subject us to liability for damages and invalidate our intellectual property rights.
−Removed: If an infringement claim is successfully asserted by a holder of intellectual property rights, we may be required to cease marketing or selling certain products, pay penalties and spend significant time and money to develop a non-infringing product or process or to obtain licenses for the technology, process or information from the holder.
−Removed: We may not be successful in the development of a non-infringing alternative, or licenses may not be available on commercially acceptable terms, if at all, in which case we may lose sales and profits.
−Removed: In addition, any litigation could be lengthy and costly and could materially adversely affect us even if we are successful in the litigation.
−Removed: We may experience shortages and increased costs of raw material and required electronic components.
−Removed: Unanticipated raw material or electronic component shortages may prevent us from making scheduled shipments to customers.
−Removed: Our inability to make scheduled shipments could cause us to experience a shortfall in revenue, increase our costs and adversely affect our relationship with affected customers and our reputation as a reliable supplier.
−Removed: We may be required to pay higher prices for raw materials or electronic components in short supply and order these raw materials or electronic components in greater quantities to compensate for variable delivery times.
−Removed: We may also be required to pay higher prices for raw materials or electronic components due to inflationary trends regardless of supply.
−Removed: We are also dependent on our suppliers' ability to supply and deliver raw materials on a timely basis at negotiated prices.
−Removed: Any delay or inability to deliver raw materials by our suppliers may require that we attempt to mitigate such failure or fail to make deliveries to our customers on a timely basis.
−Removed: As a result, raw material or electronic component shortages, price increases, or failure to perform by our suppliers could adversely affect our operating results for a particular period due to the resulting revenue shortfall and/or increased costs.
−Removed: Loss of our key management and other personnel, or an inability to attract key management and other personnel, could materially affect our business.
−Removed: We depend on our senior executive officers and other key personnel to run our business.
−Removed: We do not have long-term employment contracts with our key personnel.
−Removed: The loss of any of these officers or other key personnel could adversely affect our operations.
−Removed: Competition for qualified employees among companies that rely heavily on engineering and technology is at times intense, and the loss of qualified employees or an inability to attract, retain and motivate additional highly skilled employees required for the operation and expansion of our business could hinder our ability to conduct research activities and develop marketable products successfully.
−Removed: We are subject to a variety of environmental, health, and safety laws and regulations that expose us to potential financial liability.
−Removed: Our operations are regulated by a number of federal, state, local and foreign environmental, health, and safety (“EHS”) laws and regulations that govern, among other things, air and water emissions, worker protection, and the handling, storage and disposal of hazardous materials.
+Added: We may restructure our operations or fail to execute capital projects as planned, which may materially adversely affect our business, financial condition and operating results.
+Added: We have announced and initiated restructuring plans or capital projects at various times in the recent past designed to revise and consolidate certain aspects of our operations for the purpose of improving our cost structure and operational efficiency.
+Added: We may incur restructuring and impairment charges in the future if circumstances warrant.
+Added: Additionally, if we are unsuccessful in implementing restructuring plans or in executing capital projects, we may experience disruptions in our operations and higher ongoing costs, which may materially adversely affect our business, financial condition and operating results.
+Added: We may be unable to compete effectively against competitors.
+Added: The industries in which we operate are highly competitive and characterized by price erosion and rapid technological change.
+Added: We compete against many domestic and foreign companies, some of which have substantially greater manufacturing, financial, research and development, and marketing resources than we do.
+Added: If any customer becomes dissatisfied with our prices, quality, or timeliness of delivery, among other things, it could award business to our competitors.
+Added: Moreover, some of our customers could choose to manufacture and develop particular products themselves rather than purchase them from us.
+Added: Increased competition could result in price reductions, reduced profit margins and loss of market share, each of which could materially adversely affect our business, financial condition and operating results.
+Added: These developments also may materially adversely affect our ability to compete successfully going forward.
+Added: We cannot assure you that our products will continue to compete successfully with our competitors' products.
+Added: We may be unable to keep pace with rapid technological changes that could make some of our products or processes obsolete before we realize a return on our investment.
+Added: The technologies relating to some of our products have undergone and are continuing to undergo changes.
+Added: End markets for our products are characterized by technological change, frequent new product introductions and enhancements, changes in customer requirements, and emerging industry standards.
+Added: The introduction of products embodying new technologies and the emergence of new industry standards could render our existing products obsolete and unmarketable before we can recover any or all of our research, development and commercialization expenses, or our capital investments.
+Added: Furthermore, the life cycles of our products and the products we manufacture for others vary, may change, and are difficult to estimate.
+Added: We may experience difficulties that could delay or prevent the successful development, introduction and marketing of new products or product enhancements and our new products or product enhancements may not adequately meet the requirements of the marketplace or achieve market acceptance.
+Added: If we are unable, for technological or other reasons, to develop and market new products or product enhancements in a timely and cost-effective manner, our business, financial condition and operating results could be materially adversely affected.
+Added: Products we manufacture may contain design or manufacturing defects that could result in reduced demand for our products or services and liability claims against us.
+Added: Despite our quality control and quality assurance efforts, defects may occur in the products we manufacture due to design or manufacturing errors, supplier quality issues, or component failure.
+Added: Product defects could result in delayed shipments and reduced demand for our products.
+Added: We may be subject to increased costs due to warranty claims on defective products.
+Added: Product defects could result in product liability claims against us where defects cause, or are alleged to cause, property damage, bodily injury or death.
+Added: As we grow our business in the transportation and medical device markets, the risk of exposure to product liability litigation increases.
+Added: We may be required to participate in a recall involving products which are, or are alleged to be, defective.
+Added: We carry insurance for certain legal matters involving product liability;
+Added: however, costs related to product defects and the costs of such claims, including costs of defense and settlement, may exceed our available coverage.
+Added: Accordingly, our results of operations, cash flow and financial position could be adversely affected.
+Added: We are subject to government regulations, including environmental, health, and safety laws and regulations, that expose us to potential financial liability.
+Added: Our operations are regulated by a number of federal, state, local and foreign government regulations, including those pertaining to environmental, health, and safety (“EHS”) that govern, among other things, air and water emissions, worker protection, and the handling, storage and disposal of hazardous materials.
Compliance with EHS laws and regulations is a major consideration for us because we use hazardous materials in our manufacturing processes.
−Removed: If we violate EHS laws and regulations, we could be liable for substantial fines, penalties, and costs of mandated remedial actions.
+Added: If we violate EHS laws and regulations, we could be liable for
+Added: CTS CORPORATION 10
+Added: substantial fines, penalties, and costs of mandated remedial actions.
Our environmental permits could also be revoked or modified, which could require us to cease or limit production at one or more of our facilities, thereby materially adversely affecting our business, financial condition and operating results.
5 unchanged sentences
Although we estimate our potential environmental liability and reserve for such matters, we cannot assure you that our reserves will be sufficient to cover the actual costs that we incur as a result of these matters.
−Removed: CTS CORPORATION 11
−Removed: Future events, such as the notification of potential liability at new sites, the discovery of additional contamination or changes to an approved remedy at existing sites, changes to existing EHS environmental laws and regulations or their interpretation, and more rigorous regulatory action by government authorities, may require additional expenditures by us, which could have a negative impact on our operations.
+Added: Future events, such as the notification of potential liability at new sites, the discovery of additional contamination or changes to an approved remedy at existing sites, changes to existing EHS laws and regulations or their interpretation, and more rigorous regulatory action by government authorities, may require additional expenditures by us, which could have a negative impact on our operations.
In addition, we could be affected by future laws or regulations imposed in response to climate change concerns.
5 unchanged sentences
Regulatory initiatives to reduce greenhouse gas usage may also adversely impact some of the industries we serve and our supply chain, adversely impacting our sales and the value of our business.
+Added: Regulations related to conflict minerals could adversely impact our business.
+Added: The Dodd-Frank Wall Street Reform and Consumer Protection Act contains provisions to improve transparency and accountability concerning the supply of certain minerals, known as conflict minerals, originating from the Democratic Republic of Congo ("DRC") and adjoining countries.
+Added: As a result, the SEC adopted annual disclosure and reporting requirements for those companies who may use conflict minerals mined from the DRC and adjoining countries in their products.
+Added: There have been and will continue to be costs associated with complying with these disclosure requirements, including diligence costs to determine the sources of minerals used in our products and other potential changes to products, processes or sources of supply to the extent necessary as a consequence of such verification activities.
+Added: These rules could adversely affect the sourcing, supply and pricing of materials used in our products.
+Added: As there may be only a limited number of suppliers offering conflict-free minerals, we cannot be sure that we will be able to obtain necessary conflict-free minerals from such suppliers in sufficient quantities or at competitive prices.
+Added: Also, we may face reputational challenges if we determine that certain of our products contain conflict minerals or if we are unable to sufficiently verify the origins for all minerals used in our products through the procedures we may implement.
+Added: Negative or unexpected tax consequences could adversely affect our results of operations.
+Added: We operate globally and changes in tax laws could adversely affect our results.
+Added: The international tax environment continues to change as a result of both coordinated actions by governments and unilateral measures enacted by individual countries, such as the comprehensive tax reform enacted in the U.S.
+Added: in 2017, which could significantly impact our effective tax rate, tax liabilities, and ability to utilize deferred tax assets.
+Added: Adverse changes in the underlying profitability and financial outlook of our operations in several jurisdictions could lead to changes in our valuation allowances against deferred tax assets and other tax accruals that could materially and adversely affect our results of operations.
+Added: In addition, acquisitions or divestitures may cause our effective tax rate to change.
+Added: We base our tax positions upon the anticipated nature and conduct of our business and upon our understanding of the tax laws of the various countries in which we have assets or conduct activities.
+Added: However, our tax positions are subject to review and possible challenge by taxing authorities and to possible changes in law, which may have a retroactive effect.
+Added: Risks Related to Indebtedness and Financing
Our indebtedness may adversely affect our financial health.
−Removed: Our debt consists of borrowings under our revolving credit facility.
+Added: CTS CORPORATION 11
Our indebtedness could, among other things:
22 unchanged sentences
If our indebtedness is accelerated, we cannot be certain that we will have sufficient funds to pay the accelerated indebtedness or that we will have the ability to refinance accelerated indebtedness on terms favorable to us, or at all.
−Removed: Regulations related to conflict minerals could adversely impact our business.
−Removed: The Dodd-Frank Wall Street Reform and Consumer Protection Act contains provisions to improve transparency and accountability concerning the supply of certain minerals, known as conflict minerals, originating from the Democratic Republic of Congo ("DRC") and adjoining countries.
−Removed: As a result, the SEC adopted annual disclosure and reporting requirements for those companies who may use conflict minerals mined from the DRC and adjoining countries in their products.
−Removed: There have been and will continue to be costs associated with complying with these disclosure requirements, including diligence costs to determine the sources of minerals used in our products and other potential changes to products, processes or sources of supply to the extent necessary as a consequence of such verification activities.
−Removed: These rules could adversely affect the sourcing, supply and pricing of materials used in our products.
−Removed: As there may be only a limited number of suppliers offering conflict-free minerals, we cannot be sure that we will be able to obtain necessary conflict-free minerals from such suppliers in sufficient quantities or at competitive prices.
−Removed: Also, we may face reputational challenges if we determine that certain of our products contain conflict minerals or if we are unable to sufficiently verify the origins for all minerals used in our products through the procedures we may implement.
+Added: Losses in the financial markets could negatively impact pension asset returns and cash flow due to possible required contributions in the future.
+Added: We make a number of assumptions relating to our pension plans in order to measure the financial position of the plans and the net periodic benefit cost.
+Added: The most significant assumptions relate to the discount rate and the expected long-term return on plan assets.
+Added: If these assumptions prove to be significantly different from actual rates, then we may need to record additional expense relating to the pension plans, which could require cash contributions to fund future pension obligation payments and could have a material adverse effect on our financial condition and results of operations.
+Added: Risks Related to COVID-19 Pandemic and Other External Factors
+Added: Public health issues such as the COVID-19 pandemic have adversely affected, and could in the future, adversely affect our business or financial results.
+Added: The United States and other countries have experienced, and may experience in the future, outbreaks of contagious diseases that affect public health.
+Added: In connection with the outbreak of the global COVID-19 pandemic in 2020, the United States declared a national emergency in March 2020 and the World Health Organization, and the U.S.
+Added: Centers for Disease Control and Prevention have recommended containment and mitigation measures.
+Added: Numerous states and municipalities have also declared public health emergencies.
+Added: Along with these declarations, extraordinary and wide-ranging actions have been taken by international, federal, state, and local public health and governmental authorities to mitigate the impact of COVID-19, including quarantines, stay-at-home orders and business closure mandates requiring that individuals substantially restrict daily activities and that businesses substantially modify, curtail or cease normal operations.
+Added: Many of these measures are currently in place in many jurisdictions where we operate, and additional measures may be imposed by governmental authorities in the future.
+Added: There is significant uncertainty regarding the extent to which and how long COVID-19 and related government directives, actions and economic relief efforts will disrupt the global economy and level of employment, capital markets, consumer confidence, and demand for our products.
+Added: The extent to which COVID-19 impacts our operational and financial performance will depend on future developments, including the duration and spread of COVID-19, the acceptance and effectiveness of vaccines, and the impact of COVID-19 and related containment and mitigation measures on our customers, trade partners and employees, all of which are highly uncertain, unpredictable and outside our control.
+Added: If COVID-19 continues to have a significant negative impact on economic conditions over a prolonged period of time, the pandemic could have a material adverse effect on our financial condition and results of operations.
+Added: Natural disasters may adversely impact our capability to supply product to our customers.
+Added: Natural disasters, such as storms, flooding and associated power outages, occurring at any of our locations or supplier locations may lead to disruption of our manufacturing operations and supply chain, adversely impacting our capability to supply product to our
CTS CORPORATION 12
+Added: In the event of a natural disaster, it may not be possible for us to find an alternate manufacturing location for certain product lines, further impacting our capability to recover from such a disruption.
+Added: General Risk Factors
+Added: We face risks relating to our international operations.
+Added: Because we have significant international operations, our operating results and financial condition could be materially adversely affected by economic, political, health, regulatory and other factors existing in foreign countries in which we operate.
+Added: Our international operations are subject to inherent risks, which may materially adversely affect us, including:
+Added: political and economic instability in countries in which our products are manufactured;
+Added: expropriation or the imposition of government controls;
+Added: changes in government regulations;
+Added: export license requirements;
+Added: trade restrictions;
+Added: earnings repatriation and expatriation restrictions;
+Added: exposure to different legal standards, including related to intellectual property;
+Added: health conditions and standards;
+Added: currency controls;
+Added: fluctuations in exchange rates;
+Added: increases in the duties and taxes we pay;
+Added: inflation or deflation;
+Added: greater difficulty in collecting accounts receivable and longer payment cycles;
+Added: changes in labor conditions and difficulties in staffing and managing our international operations;
+Added: limitations on insurance coverage against geopolitical risks, natural disasters, and business operations;
+Added: and communication among and management of international operations.
+Added: In addition, these same factors may also place us at a competitive disadvantage compared to some of our foreign competitors.
+Added: We may face risks associated with violations of the Foreign Corrupt Practices Act ("FCPA") and similar anti-bribery laws.
+Added: The FCPA and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to government officials for the purpose of obtaining or retaining business.
+Added: Our Code of Ethics mandates compliance with these anti-bribery laws.
+Added: We operate in many parts of the world where strict compliance with anti-bribery laws may conflict with local customs and practices.
+Added: We cannot assure you that our internal controls and procedures always will protect us from the detrimental actions by our employees or agents.
+Added: If we are found to be liable for FCPA violations (either due to our own acts or inadvertence or due to the acts or inadvertence of others), we could suffer from criminal or civil penalties or other sanctions, which could have a material adverse effect on our business.
+Added: Public health or safety concerns and governmental restrictions, including measures implemented in response to the global COVID-19 pandemic, that impact the availability of raw materials, labor, or the movement of goods in some of the countries in which we operate could have a material adverse effect on our business, financial condition and operating results.
+Added: We are exposed to fluctuations in foreign currency exchange rates that may adversely affect our business, financial condition and operating results.
+Added: We transact business in various foreign countries.
+Added: We present our consolidated financial statements in U.S.
+Added: dollars, but a portion of our revenues and expenditures are transacted in other currencies.
+Added: As a result, we are exposed to fluctuations in foreign currencies.
+Added: Additionally, we have currency exposure arising from funds held in local currencies in foreign countries.
+Added: Volatility in the exchange rates between the foreign currencies and the U.S.
+Added: dollar could harm our business, financial condition and operating results.
+Added: Furthermore, to the extent we sell our products in foreign markets, currency fluctuations may result in our products becoming too expensive for foreign customers.
+Added: If we are unable to protect our intellectual property or we infringe, or are alleged to infringe, on others' intellectual property rights, our business, financial condition and operating results could be materially adversely affected.
+Added: The success of our business depends, in part, upon our ability to protect trade secrets, trademarks, copyrights and patents, obtain or license patents and operate without infringing on the intellectual property rights of others.
+Added: We rely on a combination of trade secrets, copyrights, patents, nondisclosure agreements and technical measures to protect our proprietary rights in our products and technology.
+Added: The steps we have taken to prevent misappropriation of our technology may be inadequate.
+Added: In addition, the laws of some foreign countries in which we operate do not protect our proprietary rights to the same extent as do the laws of the United States.
+Added: Although we continue to evaluate and implement protective measures, there can be no assurance that these efforts will be successful.
+Added: Our inability to protect our intellectual property rights could diminish or eliminate the competitive advantages that we derive from our technology, cause us to lose sales or otherwise harm our business.
+Added: We believe that patents will continue to play an important role in our business.
+Added: However, there can be no assurance that we will be successful in securing patents for claims in any pending patent application or that any issued patent will provide us with any competitive advantage.
+Added: We also cannot provide assurance that the patents will not be challenged by third parties or that the patents of others will not materially adversely affect our ability to do business.
+Added: We may become involved in litigation in the future to protect our intellectual property or because others may allege that we infringed on their intellectual property.
+Added: These claims and any resulting lawsuit could subject us to liability for damages and invalidate our
+Added: CTS CORPORATION 13
+Added: intellectual property rights.
+Added: If an infringement claim is successfully asserted by a holder of intellectual property rights, we may be required to cease marketing or selling certain products, pay penalties and spend significant time and money to develop a non-infringing product or process or to obtain licenses for the technology, process or information from the holder.
+Added: We may not be successful in the development of a non-infringing alternative, or licenses may not be available on commercially acceptable terms, if at all, in which case we may lose sales and profits.
+Added: In addition, any litigation could be lengthy and costly and could materially adversely affect us even if we are successful in the litigation.
+Added: Loss of our key management and other personnel, or an inability to attract key management and other personnel, could materially affect our business.
+Added: We depend on our senior executive officers and other key personnel to run our business.
+Added: We do not have long-term employment contracts with our key personnel.
+Added: The loss of any of these officers or other key personnel could adversely affect our operations.
+Added: Competition for qualified employees among companies that rely heavily on engineering and technology is at times intense, and the loss of qualified employees or an inability to attract, retain and motivate additional highly skilled employees required for the operation and expansion of our business could hinder our ability to conduct research and development activities and deliver marketable products successfully.
Ineffective internal control over our financial reporting may harm our business.
3 unchanged sentences
Further, the effectiveness of our internal controls may be impacted if we are unable to retain sufficient skilled finance and accounting personnel, especially in light of the increased demand for such personnel among publicly traded companies.
−Removed: Natural disasters may adversely impact our capability to supply product to our customers.
−Removed: Natural disasters, such as storms, flooding and associated power outages, occurring at any of our locations or supplier locations may lead to disruption of our manufacturing operations and supply chain, adversely impacting our capability to supply product to our customers.
−Removed: In the event of a natural disaster, it may not be possible for us to find an alternate manufacturing location for certain product lines, further impacting our capability to recover from such a disruption.
We could face risks to our systems, networks and production including increased IT security threats and more sophisticated and targeted computer crime.
3 unchanged sentences
Additionally, any updates to or implementation of systems, including the selection and implementation of an ERP system, may cause delays or disruptions in our processes or production which could adversely affect our results.
−Removed: CTS CORPORATION 13
−Removed: Unresolved Staff Comments
−Removed: Not applicable.
+Added: The regulatory environment surrounding information security and privacy is increasingly demanding, with frequent imposition of new and changing requirements.
+Added: For example, the European Union’s General Data Protection Regulation (“GDPR”), which became effective in May 2018, and other similar U.S.
+Added: federal and state and foreign laws and regulations in this area, impose significant new requirements and additional obligations for companies on how they collect, process and transfer personal data by enhancing consumer privacy rights and imposing significant fines for non-compliance.
+Added: The potential for fines and other related costs in the event of a breach of or non-compliance with the GDPR or other existing or proposed information security or privacy laws and requirements may have an adverse effect on our financial results.
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.