What changed in this filing

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Item 1A. Risk Factors

2022-02-16 compared with 2021-02-17 · 34 added, 31 removed, 246 unchanged (21% of the section changed)

Item 1A Risk Factors

The factors described below represent the principal risks associated with our business.

Global Conditions

pandemic has had, and is expected to continue to have, an adverse impact on our business, results of operations, financial position and cash flows.

pandemic has had, may continue to have, an adverse impact on our business, results of operations, financial position and cash flows.

We have been closely monitoring the impact of the COVID-19

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The effects of COVID-19

on the global economic environment have impacted, and are expected to continue to impact, the results of the Company significantly, particularly with respect to reduced demand within our Fuel Specialties and Oilfield Services segments, and we are unable to predict the ultimate impact that it may have on our business, future results of operations, financial position or cash flows.

on the global economic environment have impacted, and may continue to impact, the results of the Company significantly, particularly with respect to reduced demand within our Fuel Specialties and Oilfield Services segments, and we are unable to predict the ultimate impact that it may have on our business, future results of operations, financial position or cash flows.

The further extent to which our operations may be impacted by the COVID-19

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the impact on our suppliers and supply chain network;

the impact on global economies, including the possibility of recession and depression, and the timing and rate of economic recovery;

the development of treatments and vaccines;

and potential adverse effects on the financial markets.

the impact on global economies, including the possibility of recession, depression and inflation, and the timing and rate of economic recovery;

the development and acceptance of treatments and vaccines;

the rise of new variants and the effect of treatments and vaccines on new variants;

and the potential adverse effects on the financial markets.

The impact of COVID-19,

as well as future pandemics or resurgences, may also exacerbate other risks discussed herein, any of which could have a material effect on us.

as well as future pandemics or resurgences from new variants, may also exacerbate other risks discussed herein, any of which could have a material effect on us.

This situation is changing rapidly and additional impacts that may occur are currently unknown.

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During a prescribed period, certain transitional arrangements were in effect, such that the U.K.

continued to be treated,

in most respects, as if it were still a member of the E.U., and generally remained subject to E.U.

continued to be treated, in most respects, as if it were still a member of the E.U., and generally remained subject to E.U.

On December 24, 2020, the E.U.

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and its member states and elsewhere, and could contribute to instability in global financial markets.

Until the level of disruption and additional cost to trading in goods and services and to the movement of persons and capital between the U.K.

Until the long-term level of disruption and additional cost to trading in goods and services and to the movement of persons and capital between the U.K.

can be properly evaluated, it is not possible for us to determine the impact that the departure of the U.K.

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Continuing adverse global economic conditions could materially affect our current and future businesses.

Global economic factors affecting our business include, but are not limited to, geopolitical instability in some markets, miles driven by passenger and commercial vehicles, legislation to control fuel quality, impact of alternative propulsion systems, consumer demand for premium personal care and cosmetic products, and oil and gas drilling and production rates.

Global economic factors affecting our business include, but are not limited to, geopolitical instability in some markets, consumer demand for premium personal care and cosmetic products, miles driven by passenger and commercial vehicles, legislation to control fuel quality, impact of alternative propulsion systems, and oil and gas drilling and production rates.

The availability, cost and terms of credit have been, and may continue to be, adversely affected by the foregoing factors and these circumstances have produced, and may in the future result in, illiquid markets and wider credit spreads, which may make it difficult or more expensive for us to obtain credit.

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We serve global markets and operate in certain countries with political and economic instability, including the Middle East, Northern Africa, Asia-Pacific, Eastern Europe and South American regions.

Our international operations are subject to numerous international business risks including, but not limited to, geopolitical and economic conditions, risk of expropriation, import and export restrictions, trade wars, exchange controls, national and regional labor strikes, high or unexpected taxes, government royalties and restrictions on repatriation of earnings or proceeds from liquidated assets of overseas subsidiaries.

Our international operations are subject to numerous international business risks including, but not limited to, geopolitical and economic conditions, military actions and war, risk of expropriation, import and export restrictions, trade wars, exchange controls, national and regional labor strikes, high or unexpected taxes, government royalties and restrictions on repatriation of earnings or proceeds from liquidated assets of overseas subsidiaries.

Any of these could have a material adverse impact on our results of operations, financial position and cash flows.

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The success of these transactions depends on our ability to efficiently complete transactions, integrate assets and personnel acquired in these transactions and apply our internal control processes to these acquired businesses.

Consummating acquisitions, partnerships or other opportunities and integrating acquisitions

involves considerable expense, resources and management time commitments, and our failure to manage these as intended could result in unanticipated expenses and losses.

Consummating acquisitions, partnerships or other opportunities and integrating acquisitions involves considerable expense, resources and management time commitments, and our failure to manage these as intended could result in unanticipated expenses and losses.

Post-acquisition integration may result in unforeseen difficulties and may deplete significant financial and management resources that could otherwise be available for the ongoing development or expansion of existing operations.

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We rely on information technology systems to transact our business.

Like other global companies, we have, from time to time, experienced threats to our data and systems.

Like other global companies, we have, from time to time, been and will likely in the future be, subject to or targets of unauthorized or fraudulent access, including physical or electronic break-ins

or unauthorized tampering, as well as attempted cyber and other security threats and other computer-related penetrations.

Also, like other global companies, we have an increasing challenge of attracting and retaining highly qualified security personnel to assist us in combatting these security threats.

The frequency and sophistication of such threats continue to increase and often become further heightened in connection with geopolitical tensions.

Although we have implemented administrative and technical controls and take protective actions to reduce the risk of cyber incidents and breaches of our information technology, and we endeavor to modify such procedures as circumstances warrant, such measures may be insufficient to prevent physical and electronic break-ins,

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Furthermore, a significant or protracted information technology system failure may result in a material adverse effect on our results of operations, financial position and cash flows.

Decline in our TEL business

The Octane Additives business has ceased trading and is no longer a reporting segment from July 1, 2020 as the production of TEL for use in motor gasoline has finished.

Legacy costs related to these operations are now being recorded as operating expenses within corporate costs.

The continued sales of TEL for use in aviation fuel (“AvTel”) are recorded within our Fuel Specialties business.

Decline in our AvGas business

The sales of our AvGas product line for use in aviation fuel are recorded within our Fuel Specialties business.

The piston aviation industry has been, and is currently, researching a safe replacement fuel to replace leaded fuel.

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From time to time, we have entered into hedging arrangements for certain utilities and raw materials, but do not typically enter into hedging arrangements for all raw materials, chemicals or energy costs.

If the costs of raw materials, chemicals or energy increase, and we are not able to pass on these cost

increases to our customers, then profit margins and cash flows from operating activities would be adversely impacted.

If the costs of raw materials, chemicals or energy increase, and we are not able to pass on these cost increases to our customers, then profit margins and cash flows from operating activities would be adversely impacted.

If raw material costs increase significantly, then our need for working capital could increase.

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Export Administration Act, as well as similar laws and regulations in other countries relevant to our business operations.

Violations of any of these laws or regulations, which are often complex in their application, may result in criminal or civil penalties that could have a material adverse effect on our results of operations, financial position and cash flows.

Violations of any of these laws or

regulations, which are often complex in their application, may result in criminal or civil penalties that could have a material adverse effect on our results of operations, financial position and cash flows.

Our United Kingdom defined benefit pension plan could adversely impact our financial condition, results of operations and cash flows.

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We cannot be sure that necessary approvals will be granted on a timely basis or at all.

Any delay in obtaining, or any failure to obtain or maintain, these approvals would adversely affect our ability to introduce new products and to generate income from those products.

Any delay in obtaining, or any

failure to obtain or maintain, these approvals would adversely affect our ability to introduce new products and to generate income from those products.

New or stricter laws and regulations may be introduced that could result in additional compliance costs and prevent or inhibit the development, manufacture, distribution and sale of our products.

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New or stricter laws and regulations could increase our compliance burden or costs and adversely affect our ability to develop, manufacture, blend, market and supply products.

Our operations, and the operations of prior owners of our sites, pose the risk of environmental contamination which may result in fines or criminal sanctions being imposed or require significant amounts in remediation payments.

We anticipate that certain manufacturing sites may cease production over time and on closure, will require safely decommissioning and some environmental remediation.

The extent of our obligations will depend on the future use of the sites that are affected and the environmental laws in effect at the time.

We currently have made a decommissioning and remediation provision in our consolidated financial statements based on current known obligations, anticipated plans for sites and existing environmental laws.

We currently have made a plant closure provision in our consolidated financial statements based on current known obligations, anticipated plans for sites or existing environmental laws.

If there were to be unexpected or unknown contamination at these sites, or future plans for the sites or environmental laws change, then current provisions may prove inadequate, which could adversely impact our results of operations, financial position and cash flows.

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The inability of counterparties to meet their contractual obligations could have a substantial adverse impact on our results of operations.

We sell products to oil companies, oil and gas exploration and production companies and chemical companies throughout the world.

Credit limits, ongoing credit evaluation and account monitoring procedures are used to minimize bad debt risk.

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We have in place a credit facility with a syndicate of banks.

From time to time, we use derivatives, including interest rate swaps, commodity swaps and foreign currency forward exchange contracts, in the normal course of business to manage market risks.

From time to time, we use derivatives, including interest rate swaps, commodity swaps and foreign currency forward exchange contracts, in the normal

course of business to manage market risks.

We enter into derivative instruments with a diversified group of major financial institutions in order to manage the exposure to non-performance

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A high concentration of significant stockholders may have a material adverse impact on our stock price.

Approximately 51% of our common stock is held by five stockholders.

Approximately 43% of our common stock is held by four stockholders.

A decision by any of these, or other substantial, stockholders to sell all or a significant part of its holding, or a sudden or unexpected disposition of our stock, could result in a significant decline in our stock price which could in turn adversely impact our ability to access equity markets which in turn could adversely impact our results of operations, financial position and cash flows.

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(the “By-laws”)

provide that, unless we consent in writing to the selection of an alternative forum, the appropriate court within the State of Delaware is the sole and exclusive forum, to the fullest extent provided by law, for the following types of actions or proceedings:

provide that, unless we consent in writing to the selection of an alternative forum, the appropriate court within the State of Delaware is

the sole and exclusive forum, to the fullest extent provided by law, for the following types of actions or proceedings:

any derivative action or proceeding brought on behalf of the Corporation,

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An event of default under the credit facility includes a material adverse change to our assets, operations or financial condition, and certain other events.

The revolving credit facility also contains a number of restrictions that limit our ability, among other things, and subject to certain limited exceptions, to incur additional indebtedness, pledge our assets as security, guarantee obligations of third parties, make investments, undergo a merger or consolidation, dispose of assets or materially change our line of business.

In addition, the revolving credit facility requires us to meet certain financial ratios, including ratios based on net debt to earnings before income tax, depreciation and amortization

(“EBITDA”) and net interest expense to EBITDA.

The revolving credit facility also contains a number of

restrictions that limit our ability, among other things, and subject to certain limited exceptions, to incur additional indebtedness, pledge our assets as security, guarantee obligations of third parties, make investments, undergo a merger or consolidation, dispose of assets or materially change our line of business.

In addition, the revolving credit facility requires us to meet certain financial ratios, including ratios based on net debt to earnings before income tax, depreciation and amortization (“EBITDA”) and net interest expense to EBITDA.

Net debt, net interest expense and EBITDA are non-GAAP

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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.

What changed 10-K

Item 1A. Risk Factors