Item 1A. Risk Factors
Item 1A. Risk Factors.
The following risk factor is in addition to the Company's risk factors previously disclosed in Part I, Item 1A of the Company's Annual Report filed on the Form 10-K for year ended December 29, 2019.
Our business has been adversely impacted by the recent novel coronavirus (COVID-19) outbreak and we expect adverse business and economic conditions will continue in the future.
The outbreak of the novel coronavirus and its subsequent spread across the globe have negatively impacted the level of economic activity and employment in the United States and other countries in which we operate. Because demand for staffing services is significantly affected by general economic conditions, the downturn, which began in March 2020, as a result of the COVID-19 outbreak, has had and is expected to continue to have an adverse impact on the staffing industry. Additionally, containment and mitigation measures taken to combat the spread of COVID-19, including travel bans, quarantines, shelter-in-place orders, temporary shutdowns, and social distancing and other health and safety precautions, have had and are expected to continue to have a negative impact on customer demand for staffing services and have impacted or may in the future impact the financial viability of third parties on which we rely to provide staffing services or manage critical business functions. The COVID-19 outbreak and related containment and mitigation efforts have resulted in a substantial decline in our revenues. We expect that the revenue decline will continue in the future until demand for our services recovers, and we are not able to predict when this recovery will occur or the extent of the recovery. We have taken certain actions, including reducing officer and employee compensation, furloughing and redeploying employees, reducing discretionary expenses and projects, enacting certain hiring freezes and suspending dividends payable on our common stock, to address declines in our revenues and adverse business conditions. There can be no assurance that these actions will be adequate, and further actions of this type may be required in the future. Due to uncertainty regarding the sufficiency of the containment and mitigation measures to combat the COVID-19 outbreak and the duration of their implementation, coupled with the unknown timeline for development of COVID-19 treatments or vaccines, the extent or the duration of the impact on our business, financial condition, ability to meet financial covenants and restrictions in our debt facilities, and results of operations cannot be predicted with certainty, however, such impacts could be material.
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