−Removed: The factors that are discussed below, as well as the matters that are generally set forth in this Form 10-K and the documents incorporated by reference herein, could materially and adversely affect the Company’s business, results of operations and financial condition.
+Added: Investing in our common stock involves risk.
+Added: You should carefully consider the risks and uncertainties described below, together with all of the other information set forth in this Annual Report on Form 10-K and documents incorporated by reference herein, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes, before making a decision to invest in our common stock.
+Added: The risks and uncertainties described below may not be the only ones we face.
+Added: If any of the risks actually occur, our business, operating results, and financial condition could be materially and adversely affected.
+Added: In that event, the market price of our common stock could decline, and you could lose part or all of your investment.
Macroeconomic Risks
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and overall uncertainty with respect to the economy.
−Removed: These conditions affect consumer and entertainment spending and could adversely affect our customers’ ability or willingness to purchase our products, delay prospective customers’ purchasing decisions, reduce the value of their contracts, or affect attrition rates, all of which could adversely affect our operating results.
+Added: These conditions affect consumer and entertainment spending and could adversely affect our
+Added: customers’ ability or willingness to purchase our products, delay prospective customers’ purchasing decisions, reduce the value of their contracts, or affect attrition rates, all of which could adversely affect our operating results.
These demand fluctuations and various factors may reduce our ability to effectively utilize our capacity and impact our results of operations.
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Our business is subject to global political issues and conflicts and governmental actions.
−Removed: Such factors can create trade restrictions, increase tariff costs, increase prices for raw materials and components used in our products, increase the cost of sales, decrease demand for our products, or cause other implications to our business operations.
+Added: Such factors can create trade restrictions, increase tariff costs, increase prices for raw materials and components used in our products, increase the cost of sales, decrease demand for our products, or have other implications on our business operations.
These impacts could reduce profitability and could have a material adverse effect on our results of operations and financial condition if they escalate into geographies in which we do business, manufacture our products, or obtain raw materials and components for production.
−Removed: For example, the continuing conflict arising from the invasion of Ukraine by Russia, or tensions between Taiwan, China, the United States or other countries, could adversely impact macroeconomic conditions, give rise to regional instability and result in heightened economic tariffs, sanctions and import-export restrictions from the United States and the international community in a manner that adversely affects our Company, including to the extent that any such actions cause material business interruptions or restrict our ability in these regions to conduct business with certain suppliers or vendors.
+Added: For example, during calendar 2024, national elections are occurring in countries accounting for 49 percent of the people of the world, including the United States, which could cause changing governmental actions and policies;
+Added: the Israeli-Palestinian conflict;
+Added: the continuing conflict arising from the invasion of Ukraine by Russia;
+Added: or tensions among Taiwan, China, the United States or other countries, could adversely impact macroeconomic conditions, give rise to regional instability, and result in heightened economic tariffs, sanctions and import-export restrictions from the United States and the international community in a manner that adversely affects our Company, including to the extent that any such actions cause material business interruptions or restrict our ability in these regions to conduct business with certain suppliers or vendors.
Additionally, such conflict or sanctions may significantly devalue various global currencies and have a negative impact on economies in geographies in which we do business.
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These impacts can amplify other risk factors and could have a material impact on our operations, liquidity, financial conditions, and financial results.
−Removed: Our business, operations, and financial results have been, and may continue to be, impacted by the COVID-19 pandemic.
+Added: Our business, operations, and financial results were impacted by the COVID-19 pandemic.
Impacts on our business include, but are not limited to:
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Risks Related to Our Business and Industry
+Added: We depend on a single-source or a limited number of suppliers for our raw materials and components from countries around the world.
+Added: The loss, an interruption, or a material change in our business relationships with our suppliers or in global supply chain conditions has had and could continue to cause a disruption in our supply chains and a substantial increase in the costs of such raw materials and components.
+Added: Geopolitical tensions can impact our ability to obtain key materials and components.
+Added: Such changes have and could continue to result in extended lead times or supply changes, which could disrupt or delay our scheduled product deliveries to our end user customers and may result in the loss of sales and end user customers and cause harm to our sales, financial condition, and results of operations.
+Added: The performance and financial condition of a supplier may cause us to alter our business terms, cease doing business with a particular supplier, or change our sourcing practices.
+Added: Our suppliers are subject to the fluctuations in global economic cycles and conditions and other business risk factors which may impact their ability to operate their businesses.
+Added: Our supply chain includes materials that are sourced or packaged directly or indirectly through suppliers in Taiwan or China.
+Added: Geopolitical tensions and shipping disruptions can impact our suppliers ability to deliver components and raw materials.
+Added: An interruption from our suppliers of raw materials or components could affect our ability to manufacture our products until a new source of supply is located and, therefore, could have a material adverse effect on our business, financial condition or results of operations.
+Added: Our suppliers may need to allocate available supply, and we may not be able to obtain parts needed for production.
+Added: Qualifying new suppliers to compensate for such shortages may be time-consuming and costly and may increase the likelihood of errors in design or production.
+Added: In order to reduce manufacturing lead times and plan for adequate component supply, from time to time we may issue purchase orders or prepay for components and products that are non-cancelable and non-returnable.
+Added: In addition, we may purchase components and products that have extended lead teams to ensure adequate supply to support long-term customer demand and mitigate the impact of supply disruptions.
+Added: If we are unable to use all of the components we have purchased, we may have excess inventory or obsolescence, or increased inventory or carrying costs, which could have an adverse impact on our results of operation or financial condition.
We operate in highly competitive markets and face significant competition and pricing pressures.
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In particular, the laws of certain countries in which our products are sold do not protect our products and intellectual property rights to the same extent as the laws of the United States.
−Removed: If litigation is necessary in the future to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others, such litigation could result in substantial costs and diversion of resources even if we ultimately prevail.
+Added: If litigation is necessary in the future to enforce our intellectual
+Added: property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others, such litigation could result in substantial costs and diversion of resources even if we ultimately prevail.
In addition, intellectual property rights of others also have an impact on our ability to offer some of our products and services for specific uses or at competitive prices.
Competitors' patents or other intellectual property may limit our ability to offer products or services to our customers.
−Removed: Any infringement or claimed infringement by us of the intellectual property rights of others could result in litigation and adversely affect our ability to continue to provide, or could increase the cost of providing, products and services.
+Added: Any infringement or claimed infringement by us of the intellectual property rights of others could result in litigation and adversely affect our ability to continue to provide, or could increase the cost of providing, products and services, even if we are successful in defending against any such claim.
If we fail to timely and effectively obtain shipments of raw materials and components from our suppliers or to send shipments of our manufactured product to our customers, our business and operating results could be adversely affected.
We cannot control all of the various factors that might affect our suppliers' timely and effective delivery of raw materials and components to our manufacturing facilities or the availability of freight capacity for us to deliver products to our customers.
−Removed: Our utilization of a complex supply chain for raw material and component imports and the global distribution of our products makes us vulnerable to many risks, including, among other things, shortages or delays because of work restrictions for various reasons like COVID-19 restrictions, supply chain implications due to war or other geopolitical impacts on supply chains, risks of damage, destruction or confiscation of products while in transit to and from our manufacturing facilities;
+Added: In addition to increased costs, these factors could delay delivery of products, which may result in the assessment of liquidated damages or other contractual damages that could negatively impact our profits.
+Added: Our utilization of a complex supply chain for raw material and component imports and the global distribution of our products makes us vulnerable to many risks, including, among other things, shortages or delays because of work restrictions for various reasons like pandemic restrictions;
+Added: supply chain implications due to war or other geopolitical impacts on supply chains;
+Added: risks of damage, destruction or confiscation of products while in transit to and from our manufacturing facilities;
organized labor strikes and work stoppages, such as labor disputes or related employee worker unavailability, that could disrupt operations at ports-of-entry;
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We may not be able to obtain sufficient freight capacity on a timely basis and, therefore, may not be able to timely receive shipments of raw materials and components or deliver products to customers.
−Removed: COVID-19 created constraints on supply chain operations and resulted in component part shortages due to global capacity constraints, such as the current global capacity constraint we have been facing in the supply of component parts, particularly of semiconductor components.
−Removed: In addition, transportation availability has disrupted the timeliness of raw material and component shipments and customer shipments.
−Removed: Such a constraint could cause and has caused lead times for our products to increase.
−Removed: Cost inflation in, and shortages of, raw materials, components, and related transportation and tariff costs have had and may continue to have a significant impact on our price competitiveness and/or ability to produce our products, which have caused and could continue to cause harm to our sales, financial condition and results of operations.
+Added: Cost inflation in, and shortages of, raw materials, components, and related transportation and tariff costs can have a significant impact on our price competitiveness and/or ability to produce our products, which have caused and could continue to cause harm to our sales, financial condition and results of operations.
Cost inflation and shortages of any raw materials and components used to manufacture our products have and may continue to occur due to various factors, such as worldwide demand, natural disasters, logistic disruptions, war and other conflicts, and trade regulations.
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In addition to increased costs, these factors could delay delivery of products, which may result in the assessment of liquidated damages or other contractual damages that could negatively impact our profits.
−Removed: During late fiscal 2021, supply chain disruptions began to emerge because of COVID-19, shipping container shortages, winter weather, and changes in global demand.
−Removed: Specifically, we are impacted by the global inflation and shortage of semiconductors and related electronic components, other materials needed for production, and freight.
−Removed: While supply chain disruptions from these factors have subsided over the last half of fiscal 2023 and we expect infrequent disruptions going forward from these factors, it is reasonably possible that future disruptions could occur that would have a material impact on our business.
−Removed: Trade disruptions between countries could make us subject to additional regulatory costs and challenges, affect global economic and market conditions, and contribute to volatility in foreign exchange markets, which we may be unable to effectively manage through our foreign exchange risk management program.
+Added: Trade disruptions and trade policies between countries could make us subject to additional regulatory costs and challenges, affect global economic and market conditions, and contribute to volatility in foreign exchange markets, which we may be unable to effectively manage through our foreign exchange risk management program.
We monitor for these types of situations and evaluate ways to minimize these impacts through vendor negotiations, alternative sources, and potential price adjustments.
−Removed: We depend on a single-source or a limited number of suppliers for our raw materials and components from countries around the world.
−Removed: The loss, an interruption, or a material change in our business relationships with our suppliers or in global supply chain conditions has had and could continue to cause a disruption in our supply chains and a substantial increase in the costs of such raw materials and components.
−Removed: Such changes have and could continue to result in extended lead times or supply changes, which could disrupt or delay our scheduled product deliveries to our end user customers and may result in the loss of sales and end user customers and cause harm to our sales, financial condition, and results of operations.
−Removed: The performance and financial condition of a supplier may cause us to alter our business terms, cease doing business with a particular supplier, or change our sourcing practices.
−Removed: Our suppliers are subject to the fluctuations in global economic cycles and conditions and other business risk factors which may impact their ability to operate their businesses.
−Removed: Our supply chain includes materials that are sourced or packaged directly or indirectly through Taiwan or China suppliers.
−Removed: Geopolitical tensions and shipping disruptions can impact our suppliers ability to deliver components and raw materials.
−Removed: An interruption from our suppliers of raw materials or components could affect our ability to manufacture our products until a new source of supply is located and, therefore, could have a material adverse effect on our business, financial condition or results of operations.
−Removed: Our suppliers may need to allocate available supply, and we may not be able to obtain parts needed for production.
−Removed: Qualifying new suppliers to compensate for such shortages may be time-consuming and costly and may increase the likelihood of errors in design or production.
−Removed: In order to reduce manufacturing lead times and plan for adequate component supply, from time to time we may issue purchase orders or prepay for components and products that are non-cancelable and non-returnable.
−Removed: In addition, we may purchase components and products that have extended lead teams to ensure adequate supply to support long-term customer demand and mitigate the impact of supply disruptions.
−Removed: If we are unable to use all of the components we have purchased, we may have excess inventory or obsolescence, or increased inventory or carrying costs, which could have an adverse impact on our results of operation or financial condition.
We may fail to continue to attract, develop and retain personnel throughout our business areas, which could negatively impact our operating results.
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• changes in the demand for and mix of products that our customers buy;
−Removed: • our ability scale down or to add and train our manufacturing and services staff in advance of demand changes;
+Added: • our ability to scale down or to add and train our manufacturing and services staff in advance of demand changes;
• the market’s pace of technological change;
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estimated amounts for warranty and product maintenance agreement costs;
+Added: the calculation of the fair value of our notes payable;
the calculation and valuation of our investments and deferred tax assets;
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and calculating share-based compensation expense.
−Removed: Although we believe these estimates and assumptions are reasonable under the circumstances, they
−Removed: are subject to significant uncertainties, some of which are beyond our control.
+Added: Although we believe these estimates and
+Added: assumptions are reasonable under the circumstances, they are subject to significant uncertainties, some of which are beyond our control.
If management's estimates and assumptions change or are not correct, our financial condition or results of operations could be adversely affected.
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Remediation of a claim may take time and could result in lost or deferred revenue, lead to costly warranty expenses, and have a material adverse impact on our financial condition and operating results.
−Removed: The terms and conditions of our credit facilities impose restrictions on our operations, and if we default on our credit facilities, it could have a material adverse effect on our results of operations and financial condition and make us vulnerable to adverse economic or industry conditions and cause liquidity issues.
+Added: The terms and conditions of our credit facilities and convertible debt impose restrictions on our operations, and if we default on our credit facilities, it could have a material adverse effect on our results of operations and financial condition and make us vulnerable to adverse economic or industry conditions and cause liquidity issues.
The terms and conditions of our credit facilities impose restrictions limiting our ability to incur debt, contingent liabilities, lease obligations or liens;
to merge or consolidate with another company;
−Removed: to dispose substantially all our assets ;
+Added: to dispose of substantially all our assets;
to acquire or purchase a business or its assets;
−Removed: or to sell our assets.
−Removed: Our credit facilities also impose certain financial covenants on us which restrict the level of cash dividends and capital expenditures.
+Added: or to sell our assets, among other restrictions.
+Added: Our credit facilities also impose certain financial covenants on us which restrict the level of our cash dividends and capital expenditures.
A breach of any of these covenants could result in an event of default under our credit facilities.
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For additional information on financing agreements, see "Note 7.
−Removed: Financing Agreements" and "Note 17.
−Removed: Subsequent Events" of the Notes to our Consolidated Financial Statements included in this Form 10-K.
+Added: Financing Agreements" of the Notes to our Consolidated Financial Statements included in this Form 10-K.
For the foreseeable future, it is anticipated that our cash on hand, marketable securities, cash provided by operating activities, and borrowings under our credit facilities should provide sufficient funds to finance our capital expenditures and working capital needs and otherwise meet operating expenses and debt service requirements.
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In addition, bonding may be more difficult to obtain in the future or may be available only at significant additional cost as a result of general conditions that affect the insurance and bonding markets.
−Removed: Volatility in our business driven by global economic conditions and supply chain disruptions can have a negative effect on our liquidity and could cause us to express substantial doubt about our ability to continue as a going concern.
−Removed: Global economic conditions and supply chain disruptions have and will continue to cause volatility in our cash flow, pricing, order volumes lead times, competitiveness, revenue cycles, and production costs.
−Removed: Our ability to fund inventory levels, operations and capital expenditures in the future will be dependent on our ability to generate cash flow from operations in these conditions, to maintain or improve margins, and to use funds from our credit facility.
−Removed: Also, market conditions can negatively impact our customers' ability to fund their projects and can impact our vendors, suppliers, and subcontractors and may not allow them to meet their obligations to us and impact our liquidity.
−Removed: A determination that there is a substantial doubt about our ability to continue as a going concern can cause our existing and prospective suppliers, customers, and financing sources to not do business with us.
−Removed: We previously disclosed that liquidity constraints conditions raised substantial doubt about the Company’s ability to continue in our second and third quarter of fiscal 2023 financial statements.
−Removed: On May 11, 2023, we secured long-term financing.
−Removed: During fiscal 2023, we recognized operating income of $21.4 million and generated $15.0 million in cash flows provided by operating activities, and we project we will have sufficient cash on hand and availability under the financing agreements to fund future operations.
−Removed: Therefore, the events and conditions that gave rise to substantial doubt about our ability to continue as a going concern were resolved.
Acquisitions, investments, and divestitures pose financial, management and other risks and challenges.
We routinely invest in and explore investing in or acquiring other businesses and related assets to complement or enhance our business strategies.
−Removed: These investments are often made to increase customer relations and market base, expand geographically, or obtain technological advances to support our solution portfolio.
+Added: These investments are often made to increase and enhance our customer relations and market base, expand geographically, or obtain technological advances to support our solution portfolio.
Periodically, we may also consider disposing of these businesses, partial investments, assets, or other lines of business.
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There can be no assurance that we will engage in any acquisitions or divestitures or that we will be able to do so on terms that will result in any expected benefits.
−Removed: We have $20.7 million, net invested in affiliates as of April 29, 2023.
+Added: Our investment in and advances to affiliates totaled $16.1 million as of April 27, 2024.
Our financial results are impacted negatively or positively from our proportionate share of our affiliates' financial performance.
Any reduction or impairment of the value of an investment and related acquired assets, goodwill, or investments in affiliates would result in charges against earnings, which would adversely affect our results of operations in future periods.
−Removed: We recorded an impairment to the value of one of these investments by $4.5 million during fiscal year 2023.
+Added: We recorded an impairment to the value of these investments of $6.4 million and $4.5 million during fiscal year 2024 and 2023, respectively.
If goodwill or other intangible assets in connection with our acquisitions become impaired, we could take significant non-cash charges against earnings.
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Any reduction or impairment of the value of goodwill or other intangible assets will result in charges against earnings, which would adversely affect our results of operations in future periods.
−Removed: We performed our annual impairment test on October 30, 2022 and concluded that the carrying value of the Live Events and International reporting units exceeded their respective fair values and consequently recorded a $4.6 million impairment charge.
−Removed: We determined the fair value of the reporting units based on an income approach, using the present value of future discounted cash flows.
−Removed: Significant estimates used to determine fair value include the weighted average cost of capital and financial forecasts.
−Removed: The recognized impairment was primarily a result of our weighted average cost of capital being notably higher, which was driven by strains on our liquidity caused by disrupted supply chains and geopolitical conditions.
−Removed: As a result, the present value of our future cash flows was lower, which caused the impairment charge.
−Removed: Based on our annual impairment test, we concluded that the fair value of the Commercial and Transportation reporting units exceeded their respective carrying values and concluded no goodwill impairment existed for those reporting units.
+Added: We perform our annual impairment test on the first day of our third fiscal quarter.
The annual impairment test for fiscal years 2024 and 2022 concluded no goodwill impairment existed.
+Added: During fiscal year 2023, we concluded that the carrying value of the Live Events and International reporting units exceeded their respective fair values and consequently recorded a $4.6 million impairment charge.
We may fail to continue to attract, develop and retain key management personnel, which could negatively impact our operating results.
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If we cannot attract and retain sufficiently qualified technical employees for our research and development and manufacturing operations, we may be unable to achieve the synergies expected from mergers and acquisitions or to develop and commercialize new products or new applications for existing products.
−Removed: Furthermore, possible shortages of key personnel, including engineers, could require us to pay more to hire and retain key personnel, thereby increasing our costs.
+Added: possible shortages of key personnel, including engineers, could require us to pay more to hire and retain key personnel, thereby increasing our costs.
+Added: Increases in the cost of employee benefits could impact our financial results and cash flows.
+Added: Our expenses relating to employee health benefits are significant.
+Added: Unfavorable changes in the cost of and the unpredictability of claims under such benefits, including the current inflationary pressures on wages and benefits, could negatively impact our financial results and cash flows.
+Added: Although we purchase stop loss insurance, its cost and healthcare costs have risen significantly in recent years.
+Added: Legislative and private sector initiatives regarding healthcare reform could result in significant changes to the United States healthcare system.
+Added: Due to the breadth and complexity of the healthcare reform legislation and the uncertainty surrounding further reform proposals, we are not able to fully determine the impact that healthcare reform will have in the future on company sponsored medical plans.
The outcome of pending and future claims, investigations or litigation can have a material adverse impact on our business, financial condition, and results of operations.
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Our business depends on numerous complex information systems.
−Removed: Any failure to maintain these systems, a network disruption, or breaches in data security that could cause a material adverse effect on our business.
−Removed: We rely heavily on complex information systems for the successful operation of our business, for the support of our controller offerings, and for the collection and retention of business data.
−Removed: Any failure of our digital systems, or any breach of our systems’ security measures, could adversely affect our operations, at least until our data can be restored and/or the breaches remediated.
+Added: Any failure to maintain these systems, a network disruption, or breaches in data security could cause a material adverse effect on our business.
+Added: We rely heavily on complex information systems for the successful operation of our business, for the support of our offerings, and for the collection and retention of business data.
+Added: Any information system failure of or breach in security could adversely affect our operations, at least until our data can be restored and/or the breaches remediated.
Despite the security measures we have in place, our facilities and systems and those of our third-party service providers may be vulnerable to cybersecurity breaches, acts of vandalism, computer viruses, misplaced or lost data, ransomware attacks, programming issues, and/or human errors or other similar events.
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Other exposures and uncertainties that exist include changing social conditions and attitudes, terrorism, or political hostilities and war.
−Removed: Other difficulties of global operations include staffing and managing our various locations, including logistical and communication challenges.
+Added: Other difficulties of global operations include staffing
+Added: and managing our various locations, including logistical and communication challenges.
The likelihood of such occurrences and their overall effect on us vary greatly from country to country and are not predictable.
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Our expansion outside of the United States, and our development of new partnerships and joint venture relations worldwide, could increase the risk of violation of the FCPA, OFAC, the Bribery Act or similar laws and regulations.
−Removed: As an exporter, we must comply with various laws and regulations relating to the export of products and technology from the United States and other countries having jurisdiction over our operations and trade sanctions against embargoed
−Removed: countries and destinations administered by OFAC.
+Added: As an exporter, we must comply with various laws and regulations relating to the export of products and technology from the United States and other countries having jurisdiction over our operations and trade sanctions against embargoed countries and destinations administered by OFAC.
Before shipping certain items, we must obtain an export license or verify that license exemptions are available.
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asset seizures;
−Removed: debarment from government contracts and revocations or restrictions of license;
+Added: debarment from government contracts and revocations or restrictions of licenses;
as well as criminal fines and imprisonment, and could harm our reputation, create negative shareholder sentiment and affect our share value.
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However, our employees, contractors, agents and licensees involved in our international operations may take actions in violations of such policies.
−Removed: If our employees, agents, distributors, suppliers and other third parties with whom we do business violate anti-bribery, anti-corruption or similar laws and regulations, we may incur severe fines, penalties and reputational damage.
+Added: If our employees, agents, distributors, suppliers and other third parties with whom we do business violate anti-bribery, anti-corruption or similar laws and regulations, we may incur severe fines, penalties and reputational damage even if we were
+Added: not aware of such violation.
Additionally, there can be no assurance that our policies and procedures will effectively prevent us from violating these regulations in every transaction in which we may engage or provide a defense to any alleged violation.
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Our failure to comply with privacy, data protection and information security laws could result in potentially significant regulatory and/or governmental investigations and/or actions, litigation, fines, sanctions, ongoing regulatory monitoring, customer attrition, customer indemnity claims, decreases in the use or acceptance of our products and services, and damage to our reputation and our brand.
+Added: Environmental, society, and governance ("ESG") regulations and disclosures may impact our reputation, expose us to additional costs, or have other impacts which could adversely affect our business, financial condition, or results of operations.
+Added: There has been an increased focus from regulators, investors, employees, consumers, and other stakeholders relating to ESG practices.
+Added: We periodically communicate our ESG initiatives, which include prioritizing people, community, environmental, and product stewardship.
+Added: Certain market participants, including major institutional investors, proxy advisory firms and capital providers, use benchmarks and scores to assess companies’ ESG profiles in making investment or revoting decisions or recommending voting positions.
+Added: We have limited and in some instances no visibility or control over these scores or their underlying methodologies.
+Added: Unfavorable ESG ratings could lead to increased negative investor sentiment towards us or our industry, which could negatively impact our share price as well as our access to and cost of capital.
+Added: To the extent ESG matters negatively impact our reputation, it may also impede our ability to compete as effectively to attract and retain employees or customers, which may adversely impact our operations.
+Added: Simultaneously, there are efforts by some stakeholders to reduce companies’ efforts on certain ESG-related matters.
+Added: Both advocates and opponents to certain ESG matters are increasingly resorting to a range of activism forms, including media campaigns and litigation, to advance their perspectives.
+Added: In addition, this emphasis on ESG matters has resulted and may result in the adoption of new laws and regulations, including new reporting requirements.
+Added: Our failure to respond to regulatory requirements or to advance our initiatives could adversely impact our reputation, as well as the demand for our products.
+Added: In addition, achieving these initiatives may result in increased costs, which could have a material adverse impact on our business, financial condition, or results of operations.
Global tax law changes may adversely affect our business, financial condition and results of operations.
We are subject to the income tax laws of the United States and its various state and local governments as well as several foreign tax jurisdictions.
−Removed: Our future income taxes could be materially adversely affected by changes in the amount or mix of earnings amongst countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax rates or the interpretation of tax rules and regulations in jurisdictions in which we do business, changes in tax laws, or the outcome of income tax audits and any related litigation.
+Added: Our future income taxes could be materially adversely affected by changes in the amount or mix
+Added: of earnings amongst countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax rates or the interpretation of tax rules and regulations in jurisdictions in which we do business, changes in tax laws, or the outcome of income tax audits and any related litigation.
The United States Tax Cuts and Jobs Act of 2017 is one such example of legislation that has impacted our effective tax rate.
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We performed additional procedures over contracts for which revenue is recognized over time, including leveraging the expertise of a third-party specialist, and we did not identify any material errors in our reported revenue balance.
−Removed: However, due to the material weakness described above, there is a reasonable possibility that our existing controls would not have detected a material misstatement in a timely manner if it were to be material.
−Removed: We are in the process of remediating the material weakness, but our efforts may not be successful.
−Removed: If we are unable to remediate the material weakness in an appropriate and timely manner, or if we identify additional control deficiencies that individually or together constitute significant deficiencies or material weaknesses, our ability to accurately record, process, and report financial information and, consequently, our ability to prepare financial statements within required time periods, could be adversely affected.
+Added: However, due to the material weakness described above, there was a reasonable possibility that our existing controls would not have detected a material misstatement in a timely manner if it were to be material.
+Added: Management has determined, through its current year testing, that the Company's enhanced policy and control activities were designed and operated effectively for a sufficient period of time during fiscal year 2024 to conclude that the previously identified material weakness has been remediated as of April 27, 2024.
+Added: In the future, if we identify additional control deficiencies that individually or together constitute significant deficiencies or material weaknesses, our ability to accurately record, process, and report financial information and, consequently, our ability to prepare financial statements within required time periods, could be adversely affected.
Our failure to maintain effective internal control over financial reporting could result in violations of applicable securities laws and stock exchange listing requirements;
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As the costs and availability of insurance change, we may decide not to be covered against certain losses where, in the judgment of management, the insurance is not warranted due to the cost or availability of coverage or the remoteness of the perceived risk.
−Removed: We cannot provide assurance that all necessary or appropriate insurances will be available, cover every type of loss incurred, or be able to be economically secured.
+Added: We cannot provide assurance that all necessary or appropriate insurances will be available, cover every type of loss incurred, or be able to be economically obtained.
For example, some insurers limit or refuse coverages, increase premium costs or increase deductibles when global catastrophic events occur.
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The protections we have adopted and to which we are subject may discourage takeover offers favored by our shareholders.
−Removed: Our articles of incorporation, by-laws and other corporate governance documents and the South Dakota Business Corporation Act ("SD Act") contain provisions that could have an anti-takeover effect and discourage, delay or prevent a change in control or an acquisition that many shareholders may find attractive.
+Added: Our articles of incorporation, by-laws and other corporate governance documents and the South Dakota Business Corporation Act (which is codified as Chapter 47-1A to the South Dakota statutes) ("SD Act") contain provisions that could have an anti-takeover effect and discourage, delay or prevent a change in control or an acquisition that many shareholders may find attractive.
These provisions make it more difficult for our shareholders to take some corporate actions and include provisions relating to:
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• under the SD Act, limitations on the voting rights of shares acquired in specified types of acquisitions and restrictions on specified types of business combinations;
−Removed: • under the SD Act, prohibitions against engaging in a “business combination” with an “interested shareholder” for a period of four years after the date of the transaction in which the person became an interested shareholder unless the business combination is approved.
+Added: • under the SD Act, prohibitions against engaging in a “business combination” with an “interested shareholder” for a period of four years after the date of the transaction in which the person became an interested shareholder unless the business combination is duly approved.
These provisions may deny shareholders the receipt of a premium on their common stock, which in turn may have a depressive effect on the market price of our common stock.
7 unchanged sentences
We may be the target of this type of litigation in the future.
−Removed: Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could harm our business.
−Removed: Additionally, if we fail to meet or exceed the expectations of securities analysts and investors, or if one or more of the securities analysts who cover us adversely change their recommendation regarding our stock, the market price of our common stock could decline.
+Added: Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns even if we prevail in the litigation, which could harm our business.
+Added: Additionally, if we fail to meet or exceed the expectations of securities analysts and investors, or if one or more of the securities analysts who cover us adversely change their recommendation regarding our stock, the market price of our
+Added: common stock could decline.
Moreover, our stock price may be based on expectations, estimates and forecasts of our future performance that may be unrealistic or that may not be met.
Further, our stock price may fluctuate based on reporting by the financial media, including television, radio, press reports and blogs.
−Removed: There can be no assurance that we will pay dividends on our common stock.
−Removed: Our Board of Directors approved regular dividends from fiscal 2006 until March 2020.
−Removed: The declaration, amount and timing of such dividends are determined by our Board of Directors at its discretion.
−Removed: Such determinations are subject to capital availability, compliance with all respective laws and agreements applicable to the declaration and payment of cash dividends, our strategic investment cash needs, our business outlook, and other factors the board uses to balance long-term business needs, credit availability, and the interests of our shareholders.
−Removed: Our ability to pay dividends will depend upon, among other factors, our cash balances and potential future capital requirements for strategic transactions, including acquisitions, results of operations, financial condition and other factors
−Removed: that our Board of Directors may deem relevant.
−Removed: A reduction in or elimination of our dividend payments and/or our dividend program could have a material negative effect on our stock price.
Our business could be negatively affected as a result of actions of activist shareholders, and such activism could impact the trading value of our securities.
−Removed: Responding to actions by activist shareholders can be costly and time-consuming, and impact our brand, disrupting our operations and diverting the attention of management and our employees.
+Added: Responding to actions by activist shareholders can be costly and time-consuming, and impact our brand, disrupt our operations and divert the attention of management and our employees.
Such activities could interfere with our ability to execute our strategic plan.
12 unchanged sentences
The interests of this group of shareholders may not always coincide with the interests of other shareholders, and they may act in a manner that advances their best interests and not necessarily those of other shareholders, including seeking a premium value for their common stock, that might affect the prevailing market price for our common stock.
−Removed: UNRESOLVED STAFF COMMENTS
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.