As a global manufacturer of systems and equipment designed to move, measure, control, dispense and spray fluid and powder materials, our business is subject to various risks and uncertainties.
−Removed: Below are the most significant factors that could materially and adversely affect our business, financial condition and results of operations.
+Added: Below are risk factors that could materially and adversely affect our business, financial condition and results of operations.
+Added: COVID-19 Pandemic Risks
+Added: Coronavirus Disease 2019 (COVID-19) - The COVID-19 pandemic, the governmental responses to the pandemic, and the resulting decline in global economic activity have adversely affected our business and results of operations, and could have a material and adverse effect on our business, results of operations and financial condition in the future.
+Added: In response to the COVID-19 pandemic, federal, provincial, state, county and local governments and public health organizations and authorities around the world implemented a variety of measures intended to control the spread of the virus, including quarantines, “shelter-in-place,” “stay-at-home” and similar orders, travel restrictions, school closures, business curtailments and closures, social distancing and hygiene requirements, and other measures.
+Added: While there has been a loosening of some of these measures in certain areas, the ongoing pandemic and outbreaks of COVID-19 and variants of the disease in various areas has resulted in, and may continue to result in, reinstatement of these measures or implementation of new or additional measures in certain areas.
+Added: We manufacture and provide essential products and services to a variety of critical infrastructure customers around the globe.
+Added: We have remained operational during the pandemic, and we intend to continue providing our products and services to our customers.
+Added: However, the COVID-19 pandemic and related governmental and business responses have had, and will likely continue to have, an adverse effect on our operations, supply chains, distribution channels, and end-user customers.
+Added: For example, as a result of the pandemic and various governmental orders, a significant number of our
+Added: employees are working from home, and we substantially altered our manufacturing operations to allow for appropriate social distancing and hygiene, which could lead to decreased efficiency and productivity in our workforce and our operations.
+Added: In our supply chain, we have experienced isolated instances of suppliers temporarily closing their operations, delaying order fulfillment or limiting their production due to the pandemic, and we have utilized and may continue to utilize alternative supply arrangements where appropriate or necessary.
+Added: This may lead to increased costs, delays, and difficulties sourcing certain products.
+Added: Similarly, we have experienced isolated instances of distributors reducing or closing their operations, impacting the ability of some of our end-user customers to procure our products through our traditional distribution channels.
+Added: Some of our end-user customers have deferred capital equipment purchases, and many have eliminated in-person sales meetings.
+Added: In addition, trade shows, industry events and product demonstrations have been cancelled and are continuing to be cancelled, postponed or reformatted as virtual events.
+Added: As a result, our selling activities and our ability to convert those activities into actual sales have been and will continue to be adversely impacted.
+Added: In addition, management is focused on mitigating the effects of the COVID-19 pandemic, which has required and will continue to require a large investment of time, energy and resources.
+Added: The extent to which the continuing COVID-19 pandemic impacts us will depend on numerous evolving factors and future developments that are uncertain and that we are not able to predict, including:
+Added: the severity of the virus and new variants of the virus;
+Added: the duration and scope of the pandemic;
+Added: the efficacy, distribution and adoption rate of vaccines;
+Added: whether there are additional waves of the pandemic;
+Added: whether there are continued increases or spikes in COVID-19 cases in the areas in which we or our suppliers, distributors or end-user customers operate;
+Added: governmental, business, individual and other actions taken in response to the pandemic;
+Added: the effect on our suppliers and distributors, and disruptions to the global supply chain;
+Added: the impact on economic activity;
+Added: the extent and duration of the impact on consumer and business confidence and spending;
+Added: the effect on our end-user customers and their demand and buying patterns for our products and services;
+Added: the effect of any closures or other changes in operations of our and our suppliers’, distributors’ and end-user customers’ facilities;
+Added: the health of and the effect on our employees and our ability to meet staffing needs in our manufacturing and distribution facilities and other critical functions, particularly if a significant number of employees become ill, are quarantined as a result of exposure, or are reluctant to show up for work;
+Added: our ability to sell our products and services and provide product support, including as a result of travel restrictions, work from home requirements and arrangements, and other restrictions or changes in behavior or preferences for interactions;
+Added: the effect on employee or Company healthcare costs under our self-insurance programs;
+Added: restrictions or disruptions to transportation, including reduced availability of ground, sea or air transport;
+Added: the ability of our distributors and end-user customers to pay for our products and services;
+Added: the potential effects on our internal controls, including those over financial reporting, as a result of changes in working arrangements that are applicable to our employees and business partners;
+Added: and the effect on our ability to access capital on favorable terms and continue to meet our liquidity needs, all of which are highly uncertain and cannot be predicted.
+Added: Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of ongoing or new economic recession that may occur in the future.
+Added: The COVID-19 pandemic could also exacerbate or trigger other risks discussed in this report, any of which could have a material and adverse effect on our business, results of operations and financial condition.
+Added: Economic, Financial and Political Risks
+Added: Economic Environment - Demand for our products depends on the level of commercial and industrial activity worldwide.
+Added: An economic downturn or financial market turmoil may depress demand for our equipment in all major geographies and markets.
+Added: Economic uncertainty and volatility in various geographies may adversely affect our net sales and earnings.
+Added: If our distributors and original equipment manufacturers are unable to purchase our products because of unavailable credit or unfavorable credit terms, depressed end-user demand, or are simply unwilling to purchase our products, our net sales and earnings will be adversely affected.
+Added: An economic downturn may affect our ability to satisfy the financial covenants in the terms of our financing arrangements.
+Added: Currency - Changes in currency translation rates could adversely impact our revenue, earnings and the valuation of assets denominated in foreign currencies.
+Added: A significant number of routine transactions are conducted in foreign currencies.
+Added: Changes in exchange rates will impact our reported sales and earnings and the valuation of assets denominated in foreign currencies.
+Added: A majority of our manufacturing and cost structure is based in the U.S.
+Added: In addition, decreased value of local currency may make it difficult for some of our distributors and end users to purchase products.
+Added: Political Instability - Uncertainty surrounding political leadership may limit our growth opportunities.
+Added: Domestic political instability, including government shut downs, may limit our ability to grow our business.
+Added: International political instability may prevent us from expanding our business into certain geographies and may also limit our ability to grow our business.
+Added: Civil disturbances may harm our business.
+Added: Pension Plans – Declines in interest rates, asset values and investment returns could significantly increase our pension costs and required pension contributions.
+Added: The Company sponsors two qualified defined benefit pension plans for certain employees and retirees of the Company.
+Added: The pension plans are funded with trust assets invested in a diversified portfolio of equity, fixed income and other investments.
+Added: Declines in interest rates, the market value of plan assets, and investment returns could significantly increase our net periodic pension costs and our future pension contribution requirements and adversely affect our results of operations and financial condition.
+Added: Strategic Risks
Growth Strategies and Acquisitions - Our growth strategies may not provide the return on investment desired if we are not successful in implementation of these strategies.
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We cannot predict whether and when we will be able to realize the expected financial results and accretive effect of the acquisitions that we make, the new products that we develop and the channel expansions that we make.
−Removed: Currency - Changes in currency translation rates could adversely impact our revenue, earnings and the valuation of assets denominated in foreign currencies.
−Removed: A significant number of routine transactions are conducted in foreign currencies.
−Removed: Changes in exchange rates will impact our reported sales and earnings and the valuation of assets denominated in foreign currencies.
−Removed: A majority of our manufacturing and cost structure is based in the U.S.
−Removed: In addition, decreased value of local currency may make it difficult for some of our distributors and end users to purchase products.
−Removed: Economic Environment - Demand for our products depends on the level of commercial and industrial activity worldwide.
−Removed: An economic downturn or financial market turmoil may depress demand for our equipment in all major geographies and markets.
−Removed: Economic uncertainty and volatility in various geographies may adversely affect our net sales and earnings.
−Removed: If our distributors and original equipment manufacturers are unable to purchase our products because of unavailable credit or unfavorable credit terms, depressed end-user demand, or are simply unwilling to purchase our products, our net sales and earnings will be adversely affected.
−Removed: An economic downturn may affect our ability to satisfy the financial covenants in the terms of our financing arrangements.
Competition - Our success depends upon our ability to develop, market and sell new products that meet our customers’ needs, and anticipate industry changes.
4 unchanged sentences
Price competition and competitor strategies could negatively impact our growth and have an adverse impact on our results of operations.
+Added: Impairment - If acquired businesses do not meet performance expectations, assets acquired could be subject to impairment.
+Added: Our total assets reflect goodwill from acquisitions, representing the excess cost over the fair value of the identifiable net assets acquired.
+Added: We test annually whether goodwill has been impaired, or more frequently if events or changes in circumstances indicate the goodwill may be impaired.
+Added: If future operating performance at one or more of our operating units were to fall significantly below forecast levels or if market conditions for one or more of our acquired businesses were to decline, we could be required to incur a non-cash charge to operating income for impairment.
+Added: Any impairment in the value of our goodwill would have an adverse non-cash impact on our results of operations and reduce our net worth.
+Added: Major Customers - Our Contractor segment depends on a few large customers for a significant portion of its sales.
+Added: Significant declines in the level of purchases by these customers could reduce our sales and impact segment profitability.
+Added: Our Contractor segment derives a significant amount of revenue from a few large customers.
+Added: Substantial decreases in purchases by these customers, difficulty in collecting amounts due or the loss of their business would adversely affect the
+Added: profitability of this segment.
+Added: The business of these customers is dependent upon the economic vitality of the construction and home improvement markets.
+Added: If these markets decline, the business of our customers could be adversely affected and their purchases of our equipment could decrease.
+Added: Variable Industries - Our success may be affected by variations in the construction, automotive, mining and oil and natural gas industries.
+Added: Our business may be affected by fluctuations in residential, commercial and institutional building and remodeling activity.
+Added: Changes in construction materials and techniques may also impact our business.
+Added: Our business may also be affected by fluctuations of activity in the automotive, mining and oil and natural gas industries.
+Added: Operational Risks
Global Sourcing - Risks associated with foreign sourcing, supply interruption, delays in raw material or component delivery, supply shortages and counterfeit components may adversely affect our production or profitability.
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Competitors and others may also initiate litigation to challenge the validity of our intellectual property or allege that we infringe their intellectual property.
−Removed: We may be required to pay
−Removed: substantial damages if it is determined our products infringe their intellectual property.
+Added: We may be required to pay substantial damages if it is determined our products infringe their intellectual property.
We may also be required to develop an alternative, non-infringing product that could be costly and time-consuming, or acquire a license (if available) on terms that are not favorable to us.
−Removed: Regardless of whether infringement claims against us are successful, defending against such claims could significantly increase our costs, divert management’s time and attention away from other business matters, and otherwise adversely affect our results of operations and financial condition.
+Added: Regardless of whether infringement claims against us are successful, defending against such claims could significantly increase our costs, divert
+Added: management’s time and attention away from other business matters, and otherwise adversely affect our results of operations and financial condition.
Foreign Operations - Conducting business internationally exposes our Company to risks that could harm our business.
10 unchanged sentences
The loss of, or substantial damage to, one of our facilities, our information system infrastructure or the facilities of our suppliers could make it difficult to manufacture product, fulfill customer orders and provide our employees with work.
−Removed: Flooding, tornadoes, hurricanes, unusually heavy precipitation or other severe weather events, earthquakes, tsunamis, fires, explosions, acts of war, terrorism, civil unrest or outbreaks, epidemics or pandemics of infectious diseases could adversely impact our operations.
+Added: Flooding, tornadoes, hurricanes, unusually heavy precipitation or other severe weather events, earthquakes, tsunamis, fires, explosions, acts of war, terrorism, civil unrest or outbreaks, epidemics or pandemics of infectious diseases (such as the aforementioned COVID-19 pandemic) could adversely impact our operations.
+Added: Personnel - Our success may be affected if we are not able to attract, develop and retain qualified personnel.
+Added: Our success depends in large part on our ability to identify, recruit, develop and retain qualified personnel.
+Added: If we are unable to successfully identify, recruit, develop and retain qualified personnel, it may be difficult for us to meet our strategic objectives and grow our business, which could adversely affect our results of operations and financial condition.
+Added: Legal, Regulatory and Compliance Risks
Changes in Laws and Regulations - Changes may impact how we can do business and the cost of doing business around the world.
11 unchanged sentences
If the Company’s effective tax rate were to increase, or if the ultimate determination of the Company’s taxes owed is for an amount in excess of amounts previously accrued, the Company’s results of operations, cash flows and financial condition could be adversely affected.
−Removed: Impairment - If acquired businesses do not meet performance expectations, assets acquired could be subject to impairment.
−Removed: Our total assets reflect goodwill from acquisitions, representing the excess cost over the fair value of the identifiable net assets acquired.
−Removed: We test annually whether goodwill has been impaired, or more frequently if events or changes in circumstances indicate the goodwill may be impaired.
−Removed: If future operating performance at one or more of our operating units were to fall significantly below forecast levels or if market conditions for one or more of our acquired businesses were to decline, we could be required to incur a non-cash charge to operating income for impairment.
−Removed: Any impairment in the value of our goodwill would have an adverse non-cash impact on our results of operations and reduce our net worth.
−Removed: Political Instability - Uncertainty surrounding political leadership may limit our growth opportunities.
−Removed: Domestic political instability, including government shut downs, may limit our ability to grow our business.
−Removed: International political instability may prevent us from expanding our business into certain geographies and may also limit our ability to grow our business.
−Removed: Civil disturbances may harm our business.
Legal Proceedings - Costs associated with claims, litigation, administrative proceedings and regulatory reviews, and potentially adverse outcomes, may affect our profitability.
1 unchanged sentence
We may also need to pursue claims or litigation to protect our interests.
−Removed: The cost of pursuing, defending and insuring against such matters appears to be increasing, particularly in the U.S.
+Added: The cost of pursuing, defending and insuring against such matters is increasing, particularly in the U.S.
Such costs may adversely affect our Company’s profitability.
+Added: Further, due to adverse changes in costs to insure against such matters, we have increased our self-insured retention and deductibles and procured lower coverage limits under certain policies, which may increase our risk exposure for certain types of claims and adversely affect our profitability if we are ultimately held responsible for such claims.
Our businesses expose us to potential toxic tort, product liability, commercial and employment claims.
Successful claims against the Company and settlements may adversely affect our results.
−Removed: Personnel - Our success may be affected if we are not able to attract, develop and retain qualified personnel.
−Removed: Our success depends in large part on our ability to identify, recruit, develop and retain qualified personnel.
−Removed: If we are unable to successfully identify, recruit, develop and retain qualified personnel, it may be difficult for us to meet our strategic objectives and grow our business, which could adversely affect our results of operations and financial condition.
−Removed: Major Customers - Our Contractor segment depends on a few large customers for a significant portion of its sales.
−Removed: Significant declines in the level of purchases by these customers could reduce our sales and impact segment profitability.
−Removed: Our Contractor segment derives a significant amount of revenue from a few large customers.
−Removed: Substantial decreases in purchases by these customers, difficulty in collecting amounts due or the loss of their business would adversely affect the profitability of this segment.
−Removed: The business of these customers is dependent upon the economic vitality of the construction and home improvement markets.
−Removed: If these markets decline, the business of our customers could be adversely affected and their purchases of our equipment could decrease.
−Removed: Variable Industries - Our success may be affected by variations in the construction, automotive, mining and oil and natural gas industries.
−Removed: Our business may be affected by fluctuations in residential, commercial and institutional building and remodeling activity.
−Removed: Changes in construction materials and techniques may also impact our business.
−Removed: Our business may also be affected by fluctuations of activity in the automotive, mining and oil and natural gas industries.
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.