14 unchanged sentences
As global economic conditions experience stress and negative volatility, or if there is an escalation in regional or global conflicts, or terrorism, we will likely experience reductions in the number of available customers and in capital expenditures by our remaining customers, longer sales cycles, deferral, or delay of purchase commitments for our products and increased price competition, any of which may adversely affect our business, results of operations and liquidity.
+Added: Changes in U.S.
+Added: trade policy, including the imposition of tariffs and the resulting consequences, may have a material adverse impact on our business, financial condition, and results of operations.
+Added: government has adopted new approaches to trade policy, and in some cases may renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements.
+Added: government has also imposed tariffs on most foreign goods and has raised the possibility of imposing significant tariff increases or expanding the tariffs to capture other countries and types of goods.
+Added: Tariffs on imports from nations from whom we procure products or materials and components used in our manufacturing process have increased our operating costs and, in the future, could require us to incur significant costs to transition to alternative manufacturers or suppliers.
+Added: Future tariff increases, expanding the tariffs to cover other countries or other changes in U.S.
+Added: trade policy could exacerbate these challenges.
+Added: In addition, in response to these tariffs, other countries have threatened, announced or implemented retaliatory tariffs on U.S.
+Added: Political tensions and uncertainty as a result of trade policies and ongoing judicial challenges to such policies could reduce trade volume, investment, technological exchange, and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets, which could in turn have a material adverse impact on our business, financial condition and results of operations.
Our international operations pose additional risks that may adversely impact sales and earnings.
39 unchanged sentences
dollar and any of several foreign currencies can increase our costs and decrease our revenues.
−Removed: Our sales to customers located outside of the Americas, which generated approximately 61% of our revenues in fiscal year 2024, are invoiced and received in several foreign currencies, primarily the Euro, Pound Sterling and Chinese Yuan.
+Added: Our sales to customers located outside of the Americas, which generated approximately 62% of our revenues in fiscal year 2025, are invoiced and received in several foreign currencies, primarily the Euro, Pound Sterling, Chinese Yuan and Indian Rupee.
Therefore, our results of operations and financial condition are affected by fluctuations in exchange rates between these currencies and the U.S.
26 unchanged sentences
Disruptions in our manufacturing operations or the supply of materials and components could adversely affect our business, results of operations and financial condition.
−Removed: We depend on our wholly owned subsidiaries, HML, NHML, Milltronics, and LCM, to produce our machine tools and electro-mechanical components and accessories in Taiwan, China, the U.S., and Italy, respectively.
+Added: We depend on our wholly owned subsidiaries, HML and LCM, to produce our machine tools and electro-mechanical components and accessories in Taiwan, the U.S., and Italy, respectively.
We also depend on our 35% owned affiliate, HAL, and other key third-party suppliers to produce our computer control systems and key components, such as motors and drives, for our machine tools.
43 unchanged sentences
Other state laws include the California Consumer Privacy Act (“CCPA”), which gives California residents certain privacy rights in the collection and disclosure of their personal information and requires businesses to make certain disclosures and take certain other acts in furtherance of those rights.
−Removed: Additionally, effective starting January 1, 2023, the California Privacy Rights Act (the “CPRA”) revised and significantly expanded the scope of the CCPA.
+Added: Additionally, the California Privacy Rights Act (the “CPRA”) revised and significantly expanded the scope of the CCPA.
The CPRA also created a new California data protection agency authorized to implement and enforce the CCPA and the CPRA, which could result in increased privacy and information security regulatory actions.
36 unchanged sentences
Financial, Credit, and Liquidity Risks
+Added: Our credit facility contains covenants that restrict our business and financing activities, and the property that secures our obligations under the credit facility may be subject to foreclosure in the event of a default.
+Added: The credit agreement we entered into with Bank of America, N.A., as the lender, in January 2026 (the “2026 Credit Agreement”) contains a number of customary restrictions and covenants, which, among other things and subject to certain expressly permitted transactions or parameters set forth therein, restrict our ability to acquire or merge with another entity, dispose of our assets, make investments, loans or guarantees, incur additional indebtedness, create liens or other encumbrances, or pay dividends or make other distributions beyond stated thresholds.
+Added: The 2026 Credit Agreement requires us to maintain compliance with a maximum consolidated leverage ratio of total debt to EBITDA, which also effectively prohibits us from borrowing any amounts under the 2026 Credit Agreement when our consolidated EBITDA for the most recently completed measurement period is negative.
+Added: As of the date we entered into the 2026 Credit Agreement, and as of the date of the filing of this report, the most recently completed measurement period was our fiscal year ended October 31, 2025, during which our consolidated EBITDA was negative, thereby effectively prohibiting us from currently borrowing under the 2026 Credit Agreement.
+Added: There can be no assurance that our consolidated EBITDA will be positive, or sufficiently positive, in future periods, and therefore we may be unable to borrow any amounts under the 2026 Credit Agreement.
+Added: Our ability to comply with the provisions under the 2026 Credit Agreement may be affected by events beyond our control and our inability to comply with any of these provisions could result in a default under the 2026 Credit Agreement.
+Added: If such a default occurs, the lender may elect to declare any borrowings outstanding, together with accrued interest and other fees, to be immediately due and payable, and it would have the right to terminate any commitments it has to provide further borrowings.
+Added: If we are unable to repay any outstanding borrowings when due, the lender under the 2026 Credit Agreement also has the right to proceed against the collateral, including a significant portion of our domestic personal property, granted to it to secure the indebtedness under the facility.
+Added: If any indebtedness under the 2026 Credit Agreement were to be accelerated, we cannot assure you that our personal property would be sufficient to repay in full that indebtedness.
+Added: The occurrence of any of these events could have a material adverse effect on our business, financial condition, results of operations and liquidity.
Due to future changes in technology, changes in market demand, or changes in market expectations, portions of our inventory may become obsolete or excessive.
20 unchanged sentences
Similarly, changes in tax laws or regulations, including those in the U.S., could negatively impact our effective tax rate and results of operations.
−Removed: A change in a statutory tax rate may result in the revaluation of our deferred tax assets and liabilities related to the relevant jurisdiction in which the new tax law is enacted, potentially resulting in a material expense or benefit recorded in our Consolidated Statements of Income for that period.
+Added: A change in a statutory tax rate may result in the revaluation of our deferred tax assets and liabilities related to the relevant jurisdiction in which the new tax law is enacted, potentially resulting in a material expense or benefit recorded in our Consolidated Statements of Operations for that period.
Changes in the tax laws of the jurisdictions where we do business, including an increase in tax rates or an adverse change in the treatment of an item of income or expense, could result in a material increase in our tax expense.
3 unchanged sentences
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.