What changed in this filing

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Item 1A. Risk Factors

2020-07-27 compared with 2019-07-11 · 43 added, 11 removed, 80 unchanged (40% of the section changed)

16 unchanged sentences

If we lose a large customer, our sales and profits would decline.

We have substantial sales to three of our domestic dealers.

The combined sales to these three dealers accounted for approximately 34% of our sales in fiscal year 2019 .

Loss of all or a part of our sales to a large customer would have a material effect on our revenues and profits.

We have substantial sales to three of our domestic customers.

The combined sales to two dealers and our national stocking distributor accounted for approximately 37% of our sales in fiscal year 2020 .

Loss of all or a part of our sales to a large customer would have a material effect on our revenues and profits until an alternative channel partner could be developed.

An increase in the price of raw materials and energy could negatively affect our sales and profits.

28 unchanged sentences

Securities market fluctuations may adversely affect the market price of our common stock.

The Patient Protection and Affordable Care Act may increase the cost of providing medical benefits to employees, which could have a significant adverse impact on our results of operations.

We maintain a self-insured healthcare plan for our employees.

We have insurance coverage in place for aggregate claims above a specified amount in any year.

The Patient Protection and Affordable Care Act, and state legislation in the states in which we operate, may cause the cost of providing medical insurance to our employees to increase.

We have experienced increased costs related to the health care reform legislation.

We are subject to other risks that might also cause our actual results to vary materially from our forecasts, targets, or projections, including:

3 unchanged sentences

Interruptions in service by common carriers that ship goods within our distribution channels;

Increased costs, potential operational shutdowns, supply chain disruptions and other disruptive factors related to the coronavirus pandemic.

In addition, the timing of our revenue recognition could be negatively impacted by government shutdowns and site closures.

Cybersecurity incidents could expose us to liability and damage our reputation and our business.

18 unchanged sentences

trade policy, including the imposition of tariffs and the resulting consequences, may have a material adverse impact on our business and results of operations.

government has indicated its intent to adopt a new approach to trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements, such as the North American Free Trade

Agreement (“NAFTA”).

It has also initiated tariffs on certain foreign goods and has raised the possibility of imposing significant, additional tariff increases or expanding the tariffs to capture other types of goods.

1 unchanged sentence

Changes in U.S.

trade policy could result in one or more foreign governments adopting responsive trade policies making it more difficult or costly for us to import our products or raw materials from those countries.

trade policy could result in one or more foreign governments adopting responsive trade

policies making it more difficult or costly for us to import our products or raw materials from those countries.

This, together with tariffs already imposed, or that may be imposed in the future, by the U.S., could require us to increase prices to our customers which may reduce demand, or, if we are unable to increase prices, result in lowering our margin on products sold.

3 unchanged sentences

economy, which in turn could have a material adverse effect on our business, financial condition and results of operations.

Coronavirus Pandemic

In December 2019, a novel coronavirus (“COVID-19”) emerged and has subsequently spread worldwide.

On March 11, 2020, the World Health Organization ("WHO") recognized COVID-19 as a global pandemic, prompting many national, regional, and local governments, including ones in the markets in which the Company operates, to implement preventative or protective measures, such as travel and business restrictions, temporary store closures, and wide-ranging quarantines and stay-at-home orders.

The spread of the COVID-19 outbreak has caused severe disruptions in the U.S.

and global economy and financial markets and could potentially create widespread business continuity issues of an as yet unknown magnitude and duration.

The outbreak of COVID-19 has severely impacted global economic activity and caused significant volatility and negative pressure in the financial markets.

The global impact of the outbreak has been rapidly evolving and many countries, including the United States, have reacted by instituting quarantines, mandating business and school closures and restricting travel.

Many experts predict that the outbreak will trigger a period of global economic slowdown or a global recession.

During fiscal year 2020, our domestic business and our international subsidiaries in India and Singapore were adversely impacted by mandatory business shutdowns and stay-at-home orders issued by local governing bodies.

COVID-19 could continue to have material and adverse effects on our ability to successfully operate due to, among other factors:

a general decline in business activity, especially as it relates to our customers’ expansion or consolidation activities;

the destabilization of the financial markets, which could negatively impact our customer growth and access to capital, along with our customers’ ability to make payments for their purchase orders;

severe disruptions to and instability in the global financial markets, and deterioration in credit and financing conditions, which could affect our access to capital necessary to fund business operations or current investment and growth strategies;

the potential negative impact on the health of our personnel, or the personnel of our customers, vendors, and partners, especially if a significant number of them are affected;

a material disruption in our supply chain, which has affected and could continue to affect our ability to source products from vendors on a timely basis or on favorable terms.

We source certain key supplies used in the manufacture of our products solely from China.

If we are unable to procure adequate quantities of these key materials from our suppliers based in China, or are unable to evaluate and develop alternative sources, we may experience delays in production and customer deliveries.

Sales to customers outside the United States or with international operations expose us to risks inherent in international sales.

During fiscal year 2020, 23% of our revenues were derived from sales outside of the United States.

A key element of our growth strategy is to expand our worldwide customer base and our international operations.

Operating in international markets requires significant resources and management attention and subjects us to regulatory, economic and political risks that are different from those in the United States.

We cannot assure you that our expansion efforts into other international markets will be successful.

Our experience in the United States and other international markets in which we already have a presence may not be relevant to our ability to expand in other emerging markets.

Our international expansion efforts may not be successful in creating further demand for our products outside of the United States or in effectively selling our products in the international markets we enter.

The occurrence of the COVID-19 pandemic may negatively affect our operations depending on the severity and longevity of the pandemic.

If a significant percentage of our workforce or the workforce of our third party business partners is unable to work, including because of illness or travel or government restrictions in connection with the COVID-19 pandemic or any future pandemic or disease outbreak, our operations may be negatively impacted.

Our efforts to manage and mitigate these factors may be unsuccessful, and the effectiveness of these efforts depends on factors beyond our control, including the duration and severity of any pandemic or disease outbreak, as well as third party actions taken to contain its spread and mitigate public health effects.

In response to the health and safety risks and challenges presented by the COVID-19 pandemic, the Company has been proactively and regularly implementing measures to protect its employees.

These measures include, but are not limited to, the following:

Abiding by national, state, and local recommendations including requiring the wearing of protective face masks and practicing of social distancing;

Arranging for regular cleaning services for Company facilities;

Providing hand sanitizers and other disinfectants at workstations;

Adopting remote working protocols, systems, and processes for nonessential employees to work from home;

Conducting mandatory employee temperature checks, and on some occasions, requiring mandatory testing for employees and self-quarantine protocols pending test results.

These measures have had the effect, and are likely to continue to have the effect, of increasing our operating expenses, and could also have the effect of disrupting our operations and/or making them less efficient, which could have a negative effect on our financial results.

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