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We provide full engineering services, materials management, worldwide manufacturing facilities, assembly services, in-house testing, worldwide distribution and unparalleled customer service.
−Removed: It’s customers include some of the world’s leading original equipment manufacturers.
−Removed: Our combined capabilities and vertical integration are proving to be a desirable offering to our expanded customer base.
−Removed: Our international production capability provides our customers with benefits of improved supply-chain management, reduced inventories, lower transportation costs, and reduced product fulfillment time.
+Added: Our customers include some of the world’s leading original equipment manufacturers, and our combined capabilities and vertical integration are proving to be a desirable offering to our expanded customer base.
+Added: Our domestic and international production capability provides our customers with benefits of improved supply-chain management, reduced inventories, lower transportation costs, and reduced product fulfillment time.
We continue to make investments in all of our operating facilities to give us the production capacity, capabilities and logistical advantages to continue to win new business.
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Executive Summary
−Removed: During the fourth quarter of fiscal year 2022, we won new programs involving audio products, GPS devices, utility meters, personal safety devices, and innovative internet solutions.
+Added: During the fourth quarter of fiscal year 2023, we won new programs involving inventory control, clean energy, and distribution monitoring equipment.
We reported net sales of $588.1 million for fiscal year 2023, the highest annual revenue in the Company’s history, and up 11% from $531.8 million for fiscal year 2022.
−Removed: While demand has remained strong from both new and existing customers, revenue for the fourth quarter and for the full year of fiscal year 2022 continued to be constrained by issues related to the supply chain, transportation and logistics and the worldwide pandemic.
−Removed: During the fourth quarter of fiscal year 2022, the results were impacted by intermittent parts supply and factory downtime.
−Removed: The Company’s facilities in Shanghai, China were closed for most of the fourth quarter due to a government mandated COVID-19 shutdown.
−Removed: While the reopening of the Company’s China facility took longer than anticipated, operations have since resumed.
−Removed: Moving into fiscal 2023, the global supply chain and COVID-19 crises continue to present uncertainty and multiple business challenges.
+Added: Record annual revenue and strong earnings in fiscal year 2023 was driven by successful new program ramps and increased demand from a number of longstanding customer programs.
+Added: Moving into fiscal 2024, we expect a strong Mexican Peso valuation to the US Dollar and relatively high interest expense to constrain our bottom line.
At the same time, global logistics problems and heightened assurance of supply concerns continue to drive the favorable trend of contract manufacturing returning to North America.
For the first quarter of fiscal year 2024, the Company expects to report revenue in the range of $140 million to $150 million.
−Removed: Despite growing customer demand and backlog, we expect that the ongoing disruptions from the global supply chain and COVID-19 issues will continue to significantly limit production and adversely impact operating efficiencies, particularly for our China-based facilities.
+Added: We continue to see a trend of contract manufacturing returning to North America and a growing number of potential customers evaluating a migration of their China-based manufacturing to our facility in Vietnam.
+Added: We move into fiscal year 2024 with a strong backlog and pipeline of potential new business, our inventory more in line with our revenue levels, and continuing improvement in the global supply issues and lower labor turnover.
+Added: However, we are also seeing some softening in demand from several large customers and one large customer is pausing production during the next quarter to resolve certain of their design issues.
+Added: Over the longer term, we are well positioned for continued growth and profitability.
We have continued to diversify our customer base by adding additional programs and customers.
Our current customer relationships involve a variety of products including consumer electronics, electronic storage devices, plastics, household products, gaming devices, specialty printers, telecommunications, industrial equipment, military supplies, computer accessories, medical, educational, irrigation, automotive, transportation management, robotics, RFID, power supply, off-road vehicle equipment, fitness equipment, HVAC controls, consumer products, home building products, material handling systems, lighting equipment, consumer security products, smart security, architectural LED lighting, power meters and smart grid, wireless power solutions, sanitizer dispensing, automotive controllers, oil and gas drilling, power equipment, and wireless security.
−Removed: Gross profit as a percent of net sales was 8.1 percent in both fiscal year 2022 and 2021.
+Added: Gross profit as a percentage of net sales was 8.1 percent in both fiscal year 2023 and 2022, respectively.
+Added: During fiscal year 2023, the gross margins benefited by increased revenue levels along with some stabilization in the labor market.
+Added: However, our gross margin was also adversely impacted by the strengthening of the Mexican Peso relative to the US Dollar.
The level of gross margin is impacted by product mix, timing of the startup of new programs, facility utilization, and pricing within the electronics industry and material costs, which can fluctuate significantly from quarter-to-quarter and year-to-year.
Operating income as a percentage of net sales for fiscal year 2023 was 2.8 percent compared to 1.7 percent for fiscal year 2022.
−Removed: The decrease in operating income as a percentage of net sales was primarily driven by the increase in legal expenses related specifically to the SEC’s review of last year’s whistleblower complaint.
+Added: The increase in operating income as a percentage of net sales was primarily driven by the gains on insurance proceeds from the claim on a lightning strike at our Arkansas production facility.
Net income for fiscal year 2023 was $5.2 million or $0.47 per share, as compared to $3.4 million or $0.31 per share for fiscal year 2022.
−Removed: Earnings for fiscal 2022 continued to be adversely impacted by supply chain and transportation and logistics issues, legal and other professional service expenses related specifically to the SEC’s review of last year’s whistleblower complaint, and increased interest expense.
+Added: Earnings for fiscal 2023 continued to be adversely impacted by supply chain, transportation and logistics issues, and increased interest expense.
We maintained a strong balance sheet with a current ratio of 2.3 and a debt-to-equity ratio of 0.99.
−Removed: Total cash used in operating activities as defined on our cash flow statement was $4.9 million during fiscal year 2022.
−Removed: We maintained sufficient liquidity for our expected future operations.
−Removed: We believe cash flow from operations, our borrowing capacity, and equipment financing should provide adequate capital for planned growth over the long term.
+Added: Total cash used in operating activities as defined on our cash flow statement was $11.3 million during fiscal year 2023, as working capital has increased to support increased revenue.
+Added: We believe we maintain sufficient liquidity for our expected future operations, dependent upon executing projected cash flows from operations and potentially adding additional credit capacities through refinancing current credit agreements or pursuing additional debt structures.
RESULTS OF OPERATIONS
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Selling, general and administrative 25,715 4.4 24,598 4.6 1,117 (0.2)
+Added: Gain on insurance proceeds, net of losses (4,301) (0.7) — (4,301) (0.7)
Total operating expenses 31,149 5.4 34,419 6.4 (3,270) (1.0)
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Effective income tax rate 18.1 % 8.5 %
−Removed: The increase in net sales of $13.1 million from prior year period was primarily driven by an increase in new program wins and demand for current programs.
−Removed: However, partially offsetting the increase in revenue during fiscal year 2022, the Company’s revenue was constrained by the global supply chain and transportation issues that continued to limit production throughout the year and to a lesser extent the Chinese government mandated COVID-19 shutdown of our Shanghai, China facilities for most of the fourth quarter.
+Added: The increase in net sales of $56.3 million from the prior fiscal year was primarily due to the successful ramp of new customer programs and increased demand from existing customers.
+Added: However, the Company's revenue was constrained by tightening worldwide supply chain and transportation and logistics issues, which delayed the arrival of certain key components, causing factory downtime and overtime expenses.
The following table shows the revenue by industry sectors as a percentage of revenue for fiscal years 2023 and 2022:
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Cost of Sales
−Removed: Total cost of sales as a percentage of net sales was 91.9 percent in both fiscal years 2022 and 2021.
+Added: Total cost of sales as a percentage of net sales was 91.9 percent in fiscal year 2023 and 91.9 percent in fiscal year 2022.
We record our inventories at net realizable value based on specific identification of inventory against current demand and recent usage.
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We provide warranties on certain products we sell and estimate warranty costs based on historical experience and anticipated product returns.
−Removed: Warranty expense is related to workmanship claims on keyboards and other products.
+Added: Warranty expense is related to workmanship claims.
The amounts charged to expense are determined based on an estimate of warranty exposure.
The net warranty expense was approximately $313,000 and $446,000 in fiscal years 2023 and 2022, respectively.
−Removed: Gross profit as a percentage of net sales was 8.1 percent in both fiscal years 2022, and 2021.
+Added: Gross profit as a percentage of net sales was 8.1 percent in fiscal years 2023 and 2022.
+Added: During fiscal year 2023, the gross margins benefited by increased revenue levels along with some stabilization in the labor market.
+Added: However, our gross margin was also adversely impacted by the strengthening of the Mexican Peso relative to the US Dollar.
Changes in gross profit margins reflect the impact of a number of factors that can vary from period to period, including product mix, start-up costs and efficiencies associated with new programs, product life cycles, sales volumes, capacity utilization of our resources, management of inventories, component pricing and shortages, end market demand for customers’ products, fluctuations in and timing of customer orders, and competition within the contract manufacturing industry.
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Research, Development and Engineering
−Removed: Research, development and engineering expenses (RD&E) consists principally of employee related costs, third party development costs, program materials, depreciation and allocated information technology and facilities costs.
−Removed: Total RD&E expenses were $9.8 million in both fiscal years 2022 and 2021.
+Added: Research, development and engineering expenses (RD&E) consist principally of employee related costs, third-party development costs, program materials, depreciation, and allocated information technology and facilities costs.
+Added: Total RD&E expenses were $9.7 million and $9.8 million in fiscal years 2023 and 2022, respectively.
Total RD&E expenses as a percent of net sales was 1.7 percent in fiscal year 2023 and 1.8 percent in fiscal year 2022.
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Total SG&A expenses as a percent of net sales were 4.4 percent and 4.6 percent in fiscal years 2023 and 2022, respectively.
−Removed: This 0.2 percentage point increase in SG&A as a percentage of net sales is primarily related to an increase in legal expenses related specifically to the SEC’s review of last year’s whistleblower complaint.
+Added: This 0.2 percentage point decrease in SG&A as a percentage of net sales is primarily related to an increase in legal expenses related specifically to the SEC’s review of the whistleblower complaint in fiscal year 2021.
Interest Expense
We had net interest expense of $10.0 million and $5.1 million in fiscal years 2023 and 2022, respectively.
−Removed: The increase in interest expense is primarily related to an increase in the average balance outstanding on our line of credit, increased interest rates and financing leases.
+Added: The increase in interest expense is primarily related to increased interest rates, an increase in the average balance outstanding on our line of credit, and financing leases.
Income Tax Provision
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The income tax expense recognized during both fiscal years 2023 and 2022 was primarily a function of U.S.
−Removed: and foreign taxes recognized at statutory rates, the net benefit associated with federal research and development tax credits, the benefit of carrying back the fiscal year 2021 net operating tax losses to years with higher federal tax rates in fiscal year 2022, the non-cash tax impact of expired stock appreciation rights in fiscal year 2021, and the recognition of previously unrecognized tax benefits for federal research and development tax credits in fiscal year 2020.
+Added: and foreign taxes recognized at statutory rates, the net benefit associated with federal research and development tax credits, the impact of foreign exchange gains in fiscal year 2023, and the net benefit of carrying back the fiscal year 2021 net operating tax losses to years with higher federal tax rates in fiscal year 2022.
We continually review our requirements for liquidity domestically to fund current operations, revenue growth, and to look for potential future acquisitions.
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Our facilities provide our customers the opportunity to have their products manufactured in the facility that best serves specific cost, product manufacturing, and distribution needs.
−Removed: The locations of active foreign subsidiaries are as follows:
+Added: The locations of our active foreign subsidiaries are as follows:
• Key Tronic Juarez, SA de CV owns five facilities and leases four facilities in Juarez, Mexico.
These facilities include an SMT facility, an assembly and molding facility, a sheet metal fabrication facility, and assembly and warehouse facilities.
−Removed: This subsidiary is primarily used to support our U.S.
+Added: This subsidiary primarily supports our U.S.
• Key Tronic Computer Peripherals (Shanghai) Co., Ltd.
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RESULTS OF OPERATIONS
−Removed: Comparison of the Fiscal Year Ended July 3, 2021 with the Fiscal Year Ended June 27, 2020
−Removed: To review the results of operations comparison of the fiscal year ended July 3, 2021 with the fiscal year ended June 27, 2020, please refer to our Annual Report on Form 10-K filed September 16, 2021 with the Securities and Exchange Commission or follow the link below.
+Added: Comparison of the Fiscal Year Ended July 2, 2022 with the Fiscal Year Ended July 3, 2021
+Added: To review the results of operations comparison of the fiscal year ended July 2, 2022 with the fiscal year ended July 3, 2021, please refer to our Annual Report on Form 10-K filed September 14, 2022 with the Securities and Exchange Commission or follow the link below.
https://www.sec.gov/ix?doc=/Archives/edgar/data/719733/000071973322000063/ktcc-20220702.htm
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Operating Cash Flow
−Removed: Net cash used in operating activities for fiscal year 2022 was $4.9 million compared to $15.1 million and $31.0 million in fiscal years 2021 and 2020, respectively.
−Removed: The $4.9 million of net cash used in operating activities during fiscal year 2022 is primarily related to $3.4 million of net income adjusted for $7.6 million of depreciation and amortization, $25.6 million increase in accounts receivable, a $19.4 million increase in inventory, a $3.6 million increase in other liabilities, partially offset by a $28.6 million increase in accounts payable, and a $2.8 million decrease in contract assets.
−Removed: The $15.1 million of net cash used in operating activities during fiscal year 2021 was primarily related to $4.3 million of net income adjusted for $6.9 million of depreciation and amortization, $24.3 million increase in accounts receivable, a $23.1 million increase in inventory, a $1.0 million increase in contract assets, a $2.3 million decrease in other assets, partially offset by a $12.6 million increase in accounts payable, a $5.6 million increase in other liabilities, and a $1.0 million increase in accrued compensation and vacation.
−Removed: The $31.0 million of net cash used in operating activities during fiscal year 2020 was primarily related to $4.8 million of net income adjusted for $5.6 million of depreciation and amortization, $28.3 million increase in accounts receivable, a $14.7 million increase in inventory, a $7.7 million increase in other assets, a $1.6 million increase in contract assets, partially offset by a $6.6 million increase in accounts payable and a $3.7 million increase in accrued compensation and vacation.
+Added: Net cash used in operating activities for fiscal year 2023 was $11.3 million compared to $4.9 million in fiscal year 2022.
+Added: The additional cash used in fiscal year 2023 was predominately used for revenue growth that required additional working capital in increased receivables and paying down supplier payables during the year.
+Added: The $11.3 million of net cash used in operating activities during fiscal year 2023 is primarily related to $5.2 million of net income adjusted for $9.5 million of depreciation and amortization, $14.8 million increase in accounts receivable, a $17.4 million decrease in inventory, a $16.0 million increase in other liabilities, partially offset by a $5.5 million decrease in accounts payable, $8.0 million increase in contract assets, and a $1.5 million increase in accrued compensation and vacation.
+Added: The $4.9 million of net cash used in operating activities during fiscal year 2022 was primarily related to $3.4 million of net income adjusted for $7.6 million of depreciation and amortization, $25.6 million increase in accounts receivable, a $19.4 million increase in inventory, a $3.6 million increase in other liabilities, partially offset by a $28.6 million increase in accounts payable, and a $2.8 million decrease in contract assets.
Accounts receivable fluctuates based on the timing of shipments, terms offered, and collections.
−Removed: We purchase inventory based on customer forecasts and orders, and when those forecasts and orders change, the amount of inventory may also fluctuate.
+Added: We purchase inventory based on customer forecasts and orders.
+Added: When those forecasts and orders change, the amount of inventory may also fluctuate.
Accounts payable fluctuates with changes in inventory levels, volume of inventory purchases, negotiated supplier terms, and taking advantage of early pay discounts.
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Cash flows used in investing activities were $4.5 million for fiscal year 2023.
−Removed: Cash flows used in investing activities were $10.6 million and $3.6 million in fiscal year 2021 and 2020, respectively.
+Added: Cash flows used in investing activities were $8.1 million in fiscal year 2022.
Our primary use of cash in investing activities during fiscal years 2023 and 2022 was purchasing equipment to support increased production levels for new programs.
During fiscal year 2023, cash flows used in investing activities also included prepayments on finance lease obligations.
−Removed: During fiscal year 2020, our primary source of cash provided by investing activities came from receipts of the deferred purchase price on factored receivables.
+Added: During fiscal year 2023, the source of cash provided by investing activities came from insurance claims paid for replacing equipment and facility repairs in our Arkansas facility related to a lightning strike and water damage.
Leases are often utilized when potential technical obsolescence and funding requirement advantages outweigh the benefits of equipment ownership.
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Financing Cash Flow
−Removed: Cash flows provided by financing activities were $11.2 million, $28.6 million, and $34.5 million in fiscal years 2022, 2021, and 2020.
+Added: Cash flows provided by financing activities were $17.7 million and $11.2 million in fiscal years 2023 and 2022, respectively.
Our primary financing activities during fiscal year 2023 were proceeds from capital equipment finance leases and borrowings and repayments under our revolving line of credit facility;
partially offset by repayments on our term loans and principal payments on finance leases.
−Removed: Our primary financing activities during fiscal year 2021 was repayments on our term loans of $11.7 million as well as borrowings and repayments under our revolving line of credit facility.
−Removed: Our primary financing activities during fiscal year 2020 was repayments on our term loans of $7.1 million as well as borrowings and repayments under our revolving line of credit facility.
−Removed: As of July 2, 2022, the Company had an outstanding balance on the line of credit of $95.1 million.
−Removed: We had availability to borrow an additional $10.8 million under the asset-based revolving credit facility and we were in compliance with our loan covenants.
+Added: Our primary financing activities during fiscal year 2022 were repayments on our term loans as well as borrowings and repayments under our revolving line of credit facility.
+Added: As of July 1, 2023, approximately $4.6 million was available under the asset-based revolving credit facility and we were in compliance with our loan covenants.
Our cash requirements are affected by the level of current operations and new programs.
−Removed: We believe that projected cash from operations, funds available under the asset-based revolving credit facility and fixed asset financing will be sufficient to meet our working and fixed capital requirements for the foreseeable future.
+Added: We believe that projected cash from operations, funds available under the revolving credit facility and potential additional debt capacity will be sufficient to meet our working and fixed capital requirements for the foreseeable future.
+Added: The Company further notes projected cash from operations is projected to improve in the coming quarters as supply chain availability will boost additional inventory turns and existing inventory is consumed by fulfilling customer backlog.
As of July 1, 2023, we had approximately $3.6 million of cash held by foreign subsidiaries.
−Removed: Under the Tax Cuts and Jobs Act, future cash repatriations from these foreign subsidiaries are no longer subject to U.S.
−Removed: income taxes, but may be subject to foreign withholding taxes.
−Removed: See additional discussion in Footnote “Income Taxes” of the “Notes to Consolidated Financial Statements.” The total amount of foreign withholding taxes required to be paid for the amount of foreign subsidiary cash on hand as of July 2, 2022, would approximate $8,000.
+Added: If cash is to be repatriated in the future from these foreign subsidiaries, the Company would be subject to certain withholding taxes in the foreign jurisdictions.
+Added: The total amount of tax payments required for the amount of foreign subsidiary cash on hand as of July 1, 2023 would approximate $64,000.
The Company also has approximately $33.2 million of foreign earnings that have not been repatriated to the U.S.
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If these amounts were required to be repatriated, we estimate it would create an additional $0.8 million in foreign withholding taxes payable.
−Removed: Contractual Obligations
+Added: We have accrued withholding taxes for expected future repatriation of foreign earnings as discussed in Note 6 of the “Notes to Consolidated Financial Statements”.
+Added: Off-Balance Sheet Arrangements and Contractual Obligations
In the normal course of business, we enter into contracts which obligate us to make payments in the future.
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We do not use off-balance sheet financing techniques other than traditional operating leases, and we have not guaranteed the obligations of any entity that is not one of our wholly owned subsidiaries.
−Removed: For a summary of our lease obligations as of July 2, 2022, please refer to Footnote “Leases” of the “Notes to Consolidated Financial Statements.”
−Removed: For a summary of our long-term debt obligations as of July 2, 2022, please refer to Footnote “Long-Term Debt” of the “Notes to Consolidated Financial Statements.”
+Added: For a summary of our lease obligations as of July 1, 2023, please refer to Note 15 “Leases” of the “Notes to Consolidated Financial Statements.”
+Added: For a summary of our long-term debt obligations as of July 1, 2023, please refer to Note 4 “Long-Term Debt” of the “Notes to Consolidated Financial Statements.”
Critical Accounting Policies and Estimates
Preparation of our consolidated financial statements requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses.
−Removed: Footnote “Significant Accounting Policies” of the “Notes to Consolidated Financial Statements” describes the significant accounting policies used in the preparation of our consolidated financial statements.
+Added: Note 1 “Significant Accounting Policies” of the “Notes to Consolidated Financial Statements” describes the significant accounting policies used in the preparation of our consolidated financial statements.
Management believes the most complex and sensitive judgments, because of their significance to our consolidated financial statements, result primarily from the need to make estimates about effects of matters that are inherently uncertain.
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However, if any of our customers were to develop unexpected and immediate financial problems that would prevent payment of open invoices, we could incur additional and possibly material expenses that would negatively impact earnings.
−Removed: Accrued Warranty
−Removed: An accrual is made for expected warranty costs, with the related expense recognized in cost of goods sold.
−Removed: We review the adequacy of this accrual quarterly based on historical analysis and anticipated product returns and rework costs.
−Removed: Our warranty period for keyboards is generally longer than that for other products.
−Removed: We only warrant materials and workmanship on products, and we do not warrant design defects for customers.
Income tax expense includes U.S.
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Our estimates of the realization of the deferred tax assets related to our tax credits are based upon our estimates of future taxable income which may change.
−Removed: Stock-Based Compensation
−Removed: Stock-based compensation is accounted for according to FASB Accounting Standards Codification (ASC) 718, Compensation—Stock Compensation .
−Removed: ASC 718 requires us to expense the fair value of employee stock options, stock appreciation rights and other forms of stock-based compensation.
−Removed: Under the fair value recognition provisions of ASC 718, share-based compensation cost is estimated at the grant date based upon the fair value of the award and is recognized as expense ratably over the requisite service period of the award (generally the vesting period).
−Removed: Determining the appropriate fair value model and calculating the fair value of share-based awards requires judgment, including estimating the expected life of the share-based award, the expected stock price volatility over the expected life of the share-based award and forfeitures.
−Removed: To determine the fair value of stock based awards on the date of grant we use the Black-Scholes option-pricing model.
−Removed: Inherent in this model are assumptions related to expected stock price volatility, option life, risk-free interest rate and dividend yield.
−Removed: The risk-free interest rate is a less-subjective assumption as it is based on factual data derived from public sources.
−Removed: We use a dividend yield of zero as we have never paid cash dividends and have no intention to pay cash dividends in the foreseeable future.
−Removed: The expected stock price volatility and option life assumptions require a greater level of judgment.
−Removed: Our expected stock-price volatility assumption is based upon the historical volatility of our stock which is obtained from public data sources.
−Removed: The expected life represents the weighted average period of time that share-based awards are expected to be outstanding, giving consideration to vesting schedules and historical exercise patterns.
−Removed: We determine the expected life assumption based upon the exercise and post-vesting behavior that has been exhibited historically, adjusted for specific factors that may influence future exercise patterns.
−Removed: If expected volatility or expected life were to increase, that would result in an increase in the fair value of our stock options which would result in higher compensation charges, while a decrease in volatility or the expected life would result in a lower fair value of our stock option awards resulting in lower compensation charges.
−Removed: We estimate forfeitures for all of our awards based upon historical experience of stock-based pre-vesting forfeitures.
−Removed: We believe that our estimates are based upon outcomes that are reasonably likely to occur.
−Removed: If actual forfeitures are higher than our estimates it would result in lower compensation expense and to the extent the actual forfeitures are lower than our estimate we would record higher compensation expense.
−Removed: Long-Term Incentive Compensation Accrual
−Removed: Long-term incentive compensation is recognized as expense ratably over the requisite service period of the award which is generally three years.
−Removed: The Board of Directors approve target performance measures for the three year period for each of the Company’s officers and non-employee Directors.
−Removed: Performance measures are based on a combination of sales growth targets and return on invested capital targets.
−Removed: No cash awards will be made to participants if actual Company performance does not exceed the minimum target performance measures.
−Removed: The calculation used to determine the necessary accrual uses a combination of actual results and projected results.
−Removed: We believe that our estimates are based upon outcomes that are reasonably likely to occur.
−Removed: These estimates and assumptions are based on historical results as well as future expectations.
−Removed: Actual results could vary from our estimates and assumptions.
New and Future Accounting Pronouncements
−Removed: See Footnote “Significant Accounting Policies” of the “Notes to Consolidated Financial Statements.”
+Added: See Note 1 “Significant Accounting Policies” of the “Notes to Consolidated Financial Statements.”
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.