What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-02-29 compared with 2023-02-23 · 90 added, 84 removed, 133 unchanged (57% of the section changed)

3 unchanged sentences

With a presence around the world, including operations in over 25 countries, the Company’s customers include thousands of the world’s most advanced and specialized steel, aluminum, automotive, aerospace, offshore, container, mining, and metalworking companies.

Quaker Houghton develops, produces, and markets a broad range of formulated chemical specialty products and offers chemical management services (which we refer to as “Fluidcare TM ”) for various heavy industrial and manufacturing applications throughout its four segments:

Quaker Houghton develops, produces, and markets a broad range of formulated specialty chemical products and offers chemical management services (which we refer to as “Fluidcare TM ”) for various heavy industrial and manufacturing applications throughout its three segments:

Europe, Middle East and Africa (“EMEA”);

Asia/Pacific;

and Global Specialty Businesses.

and Asia/Pacific.

The major product lines of Quaker Houghton include metal removal fluids, cleaning fluids, corrosion inhibitors, metal drawing and forming fluids, die cast mold releases, heat treatment and quenchants, metal forging fluids, hydraulic fluids, specialty greases, offshore sub-sea energy control fluids, rolling lubricants, rod and wire drawing fluids and surface treatment chemicals.

The following are the respective contributions to consolidated net sales of each of our principal product lines representing more than 10% of consolidated net sales for any of the past three years based on the Company’s current product line segmentation:

2022 2021 2020

Major Product Line 2023 2022 2021

Metal removal fluids 23.6 % 22.9 % 23.4 %

8 unchanged sentences

See Note 5 of Notes to Consolidated Financial Statements in Item 8 of this Report.

The specialty chemical industry comprises a number of companies similar in size to the Company, as well as companies larger and smaller than Quaker Houghton.

The specialty chemical industry comprises a number of companies similar in size to Quaker Houghton, as well as companies larger and smaller in size.

The Company cannot readily determine its precise competitive position in every industry it serves.

However, the Company estimates it holds a leading global position in the market for industrial process fluids including significant global positions in the markets for process fluids in portions of the automotive and industrial markets, and a leading position in the market for process fluids to produce sheet steel and aluminum.

However, the Company estimates it holds a leading global position in the market for industrial process fluids including leading global positions in the markets for process fluids in portions of the automotive and industrial markets, and a leading position in the market for process fluids to produce sheet steel and aluminum.

The offerings of many of the Company’s competitors differ from those of Quaker Houghton;

1 unchanged sentence

All competitors provide different levels of technical services to individual customers.

Competition in the industry is based primarily on the ability to supply products that meet the needs of the customer and provide technical services and laboratory assistance to the customer, and to a lesser extent, on price.

Competition in the industry is based primarily on the ability to supply products and provide technical services that meet the needs of the customer at an appropriate price and value to both the Company and the customer.

Major Customers and Markets

6 unchanged sentences

The price of mineral oil and its derivatives can be affected by the price of crude oil and industry refining capacity.

Animal fat and vegetable oil prices, as well as the prices of other raw materials, are impacted by their own unique supply and demand factors, and by biodiesel consumption which is affected by the price of crude oil.

Animal fat and vegetable oil prices, as well as the prices of other raw materials, are impacted by their own unique supply and demand factors, and by biodiesel consumption which can be affected by the price of crude oil and by government incentives for low-carbon fuels.

Accordingly, significant fluctuations in the price of crude oil can have a material impact on the cost of these raw materials.

In addition, many of the raw materials used by Quaker Houghton are commodity chemicals which can experience significant price volatility.

As experienced during 2022, the Company’s earnings have been and could continue to be affected by market changes in raw material prices.

Reference is made to the disclosure contained in Item 7A of this Report.

As experienced during 2022 and 2023, the Company’s earnings have been and could continue to be affected by market changes in raw material prices.

Refer to the disclosure contained in Item 7A of this Report for additional information.

Patents and Trademarks

19 unchanged sentences

Recent Acquisition Activity

The Company has completed several recent acquisitions that expand its strategic product offerings and increase the Company's presence in its core industries.

The Company's 2022 acquisitions consist of:

• In October 2022, the Company acquired a business that provides pickling and rinsing products and services, which is part of the EMEA reportable segment, for approximately $3.5 million.

This acquisition, along with the Company’s January 2022 acquisition in the Americas reportable segment (described below), which had similar specializations and product offerings in pickling inhibitor technologies, strengthens Quaker Houghton’s position in pickling inhibitors and additives, enabling the Company to better support and optimize production processes for customers across the Metals industry.

• In January 2022, the Company acquired a business that provides pickling inhibitor technologies, drawing lubricants and stamping oil, and various other lubrication, rust preventative, and cleaner applications, which is part of the Americas reportable segment for approximately $8.0 million.

This business broadens the Company’s product offerings within its existing metals and metalworking business in the Americas reportable segment.

• In January 2022, the Company acquired a business related to the sealing and impregnation of metal castings for the automotive sector, as well as impregnation resin and impregnation systems for metal parts, which is part of the Global Specialty Businesses reportable segment for approximately $1.4 million.

This business broadens the Company’s product offerings and service capabilities within its existing impregnation business.

Impact of COVID-19

During 2022, COVID-19 continued to negatively impact the Company's business operations, as well as those of its customers and suppliers, including increased costs and decreased availability of labor and raw materials.

The Company’s top priority, especially during this pandemic, has been to protect the health and safety of its employees and customers, while working to ensure business continuity to meet its customers’ needs.

In response, the Company implemented additional operational, health, and safety protocols, including enabling remote work where needed and practicable, employing social distancing standards, implementing travel restrictions where necessary, enhancing onsite hygiene practices, and instituting visitation restrictions at the Company’s facilities, where necessary these operational changes remain in place.

Although restrictions imposed by governments around the world have largely been eliminated or loosened, management continues to monitor and respond to the impacts related to COVID-19 on the Company, the overall specialty chemical industry, and the economies and markets in which the Company operates.

Management continues to evaluate how COVID-19-related circumstances, such as remote work arrangements, illness or staffing shortages and travel restrictions, may impact financial reporting processes and systems, internal control over financial reporting, and disclosure controls and procedures.

At this time, management does not believe that COVID-19 has had a material impact on financial reporting processes, internal controls over financial reporting, or disclosure controls and procedures.

During February 2024, the Company acquired I.K.V.

Tribologie IKVT and its subsidiaries (“IKVT”) for approximately 27.0 million EUR, or $29.1 million subject to routine and customary post-closing adjustments related to working capital and net indebtedness levels.

IKVT will be part of the Company’s EMEA segment and specializes in high-performance lubricants and greases, including original equipment manufacturer first-fill greases that are primarily used in the automotive, aerospace, electronics, and other industrial markets.

The acquisition of IKVT strengthens the Company’s position in first fill greases.

See Note 2 of Notes to Consolidated Financial Statements in Item 8 of this Report.

Regulatory Matters

1 unchanged sentence

The program includes periodic inspections of each facility by the Company and/or independent experts, as well as ongoing inspections and training by on-site personnel.

Such inspections address operational matters, record keeping, reporting requirements and capital improvements.

Such inspections, among other things, address operational matters, record keeping, reporting requirements and capital improvements.

Capital expenditures directed solely or primarily to regulatory compliance amounted to approximately $3.5 million, $2.2 million and $4.2 million during the years ended December 31, 2023, 2022 and 2021, respectively.

1 unchanged sentence

The Company’s operating segments, which are consistent with its reportable segments, reflect the structure of the Company’s internal organization, the method by which the Company’s resources are allocated and the manner by which the chief operating decision maker assesses the Company’s performance.

The reportable segments presented in this Annual Report reflect the business structure the Company operated with during the periods presented, which was four reportable segments:

During the first quarter of 2023, the Company reorganized its executive management team to align with its new business structure.

The Company’s new structure includes three reportable segments:

(i) Americas;

and (iii) Asia/Pacific.

Prior to the Company’s reorganization, the Company’s historical reportable segments were:

(i) Americas;

(iii) Asia/Pacific;

and (iv) Global Specialty Businesses.

In January 2023, the Company reorganized certain of its executive management team to align with a new business structure.

This change was made subsequent to December 31, 2022;

therefore, the reportable segments presented in this Annual Report on Form 10-K reflect the business structure the Company operated with during the periods presented.

Effective beginning in the first quarter of 2023, the Company’s new structure will include three reportable segments:

(i) Americas;

(ii) Europe, Middle East and Africa (“EMEA”);

and (iii) Asia/Pacific.

See Note 4 of Notes to Consolidated Financial Statements in Item 8 of this Report.

Prior period information has been recast to align with the Company’s business structure as of January 1, 2023, including reportable segments and customer industry disaggregation.

As a result of the Company’s new organizational structure effective January 1, 2023, the Company reallocated goodwill previously held by the former Global Specialty Businesses segment to the remaining business segments as of January 1, 2023.

However, the Company did not recast the carrying amount of goodwill for the years ended December 31, 2022 and 2021.

See Notes 4, 5, and 15 of Notes to Consolidated Financial Statements in Item 8 of this Report.

Since significant revenues and earnings are generated by non-U.S.

16 unchanged sentences

and (vi) do great things together.

Our core values embody who we are as a company, guide our decisions and inspire us.

Our commitment to these values, in words and actions, builds a safer, stronger Quaker Houghton, and these values guide the Company’s internal conduct and its relationship with the outside world.

Our core values embody who we are as a company, and these values, in words and actions, build a safer, stronger Quaker Houghton, and these values guide the Company’s internal conduct and its relationship with the outside world.

By fostering a culture and environment that exemplifies our core values, we gain, as a company, unique perspectives, backgrounds and varying experiences to ensure continued long-term success.

1 unchanged sentence

Aligned to our core values, in 2023, we evolved our enterprise-wide approach to volunteerism.

Moving forward, all employees will be provided with access to two paid days off per year that can be leveraged to volunteer for local charity organizations, or local chapters of national charity organizations, that seek to improve the conditions and lives of the people living in the communities in which our employees live and work.

All full-time employees are provided up to 16 hours per calendar year to volunteer for a non-profit or charity of their choice.

The policy is supported by recommendations to our colleagues regarding volunteering opportunities, such as educational or cultural institutions, healthcare institutions, civic and community centers, and non-profit organizations focusing on science, technology, engineering, and math (“STEM”) learning.

Sustainability Governance and Strategy

6 unchanged sentences

We also identified short-term and medium-term milestones that may help support the achievement of our 2030 targets.

In 2022, we made progress on certain of the Company’s identified 2030 goals in accordance with the baselines set during 2021.

During 2022, the Company launched Green Chemistry Guidelines globally that align with principles recommended by the American Chemical Society and the Company’s established sustainability goals.

Additionally, the Company made investments in renewable energy certificates, and increased the percentage of raw materials that are renewable.

We will provide further updates on our short-term milestones in our 2023 Sustainability Report.

Sustainability Report

We report our progress on Environmental, Social, and Governance (“ESG”) milestones in our sustainability report, which is published annually and is available free of charge on our corporate website at home.quakerhoughton.com/sustainability.

We report our progress on our Sustainability strategy in our sustainability report, which is published annually and is available on our corporate website at home.quakerhoughton.com/sustainability.

The Company’s 2022 Sustainability Report reflects the most recent available data on a variety of topics, including specific information relating to the Company’s:

2 unchanged sentences

(iii) safety initiatives and performance;

and (iv) training courses which our employees have completed.

and (iv) sustainable solutions portfolio.

Information in these sustainability reports and on our website are not incorporated by reference in this Report and, accordingly, should not be considered part of this Report.

Talent and Culture

Talent Development, Culture and Total Rewards

We strive to make Quaker Houghton a great place to work for all employees.

3 unchanged sentences

Through ongoing dialogue with leaders, employees are encouraged to plan for their development and leverage the tools available to create meaningful and actionable development plans that drive personal and company growth.

We endeavor to ensure that our leaders of tomorrow are members of the Company today.

Leadership capability is critical in supporting our culture of inclusion and collaboration.

As such, leaders have access to various structured development and learning experiences.

This includes our global management program ("MAP") which provides guidance on applying sound and consistent management approaches to leading and developing teams.

In addition, we provide custom development programs germane to the needs of our leaders today.

Recent topics including Financial Acumen for Leaders, Building Resilient Teams and Leading Change.

We continue to invest in processes to help the organization assess and develop talent, including a formalized annual performance evaluation program, an annual critical skills and potential analysis, and succession planning for the organization’s most critical and senior roles.

Additionally, we regularly evaluate our Total Rewards offerings for our employees, including health and wellness benefits, paid-time off policies, monetary compensation, and educational reimbursements, to ensure that our total compensation and benefits packages are aligned with our business strategy, organizational culture, and diversity and inclusion approach while ensuring that we remain competitive in the markets we serve and follow local statutory wage and benefits laws.

We pay particular attention to wellness and the well-being of our employees with specific investments on a variety of health related topics including forums for learning, dialogue, and enterprise collaboration.

We strive to create a culture where recognition is ingrained within it, and do so by utilization of an enterprise reward and recognition program celebrating and incentivizing the results and behaviors of our employees and their impacts on our teams and company.

We place importance on developing our leaders at all levels, whether a colleague is leading themselves or providing for others, as wells as providing them with opportunities to enhance their effectiveness.

Our leaders have access to various learning and development experiences, including our Quaker Houghton internal leadership development program (“MAP”) for new or first-time managers, Performance and Rewards training, and specialized opportunities for external coaching, leadership assessments, or external development programs.

We continue to enable a robust Organization and Talent Review (“OTR”) process in which each department’s talent landscape is evaluated, potential of talent is assessed, critical roles are identified, and succession planning occurs for our most senior positions.

Output of these processes results in career development and other related talent plans designed to ensure we have the talent we need both now and in the future to deliver results.

Additionally, we regularly evaluate our total rewards offerings for our employees, including health and wellness benefits, paid-time off policies, monetary compensation, and educational reimbursements, to ensure that our total compensation and benefits packages are aligned with our business strategy, organizational culture, and diversity and inclusion approach and allow us to remain competitive in the markets we serve and comply with local statutory wage and benefit laws.

We strive to create a culture where recognition is ingrained, including utilization of an enterprise reward and recognition program that celebrates and incentivizes the results and behaviors of our employees and their impacts on our teams and Company.

Creating, fostering, and maintaining a culture in which every colleague can be their best self is a driving force in our engagement efforts.

We pay particular attention to the wellness and well-being of our employees with specific investments in a variety of health-related topics including forums for learning, dialogue, and enterprise collaboration.

During 2023, we prioritized these efforts, with purpose driven investments in wellness and well-being.

We launched a global well-being platform, Virgin Pulse, which provides access to activities, tools and resources on a variety of wellness topics.

We celebrated World Mental Health Day with enterprise discussions and education on various topics.

We also increased our benefits investments by providing paid parental leave for our U.S.

colleagues regardless of birthing status, and we implemented a global family planning program to support the fertility-related healthcare needs of our colleagues.

Diversity, Equity, and Inclusion (“DEI”)

As a global company, we want to build an organization that is inclusive of all people and representative of the communities in which we operate.

Quaker Houghton provides equal employment opportunities and does not discriminate based on age, ethnicity, gender identity, disability / medical condition, race, religion, or sexual orientation.

We believe that diversity and inclusion are embodied by having working norms and cultural familiarities whereby employees feel included, engaged, and rewarded, regardless of their background or where they sit in the organization.

Quaker Houghton strives to cultivate a diverse, equitable, and inclusive culture that reflects the global nature of our organization.

We believe diversity and inclusion are embodied by having working norms whereby employees feel included, engaged, and rewarded, regardless of their background or where they sit in the organization.

When employees feel this way, we are a stronger, more inclusive organization and better equipped to utilize our colleagues’ diverse skills and talents to drive innovation and business success.

Accordingly, Quaker Houghton provides equal employment opportunities and does not discriminate based on age, ethnicity, sex, sexual identity, disability/medical condition, race, religion, or sexual orientation.

Diversity is one of our core values, and our unwavering commitment to DEI is further reflected as a core element in our Code of Conduct.

We seek to create an environment where every employee can feel their best allowing them to be their best.

Inclusion and diversity begin with the Board and ELT.

The Board is comprised of twelve individuals with diverse experience and credentials, selected for their business acumen and ability to challenge and add value to management.

The Board is comprised of ten individuals with diverse experience and credentials, selected for their business acumen and ability to challenge and add value to management.

Our current Board composition includes two female and four racially diverse directors out of a total of twelve directors.

1 unchanged sentence

Directors, Executive Officers and Corporate Governance.

In 2022, we focused on and dedicated investment in our talent acquisition, talent development, and succession planning efforts as a means to diversify our workforce.

We have continually provided minority and female leaders the opportunity to attend targeted world-class external development programs that speak to the unique experiences these employees can face in the workplace while investing in their continued growth both personally and professionally.

In addition, our core principles of a culture of inclusion are reflected in required employee training programs, which we offer on our policies against harassment and discrimination of any kind.

In 2022 we began a multi-year investment in the Future of STEM Scholars Initiative (“FOSSI”).

This program seeks to create pathways for under-represented groups to enter and succeed in the chemical industry.

As part of this program, Quaker Houghton has committed to providing meaningful paid summer internships that build knowledge in the student’s chosen areas of study along with mentoring conversations with current Quaker Houghton leaders and opportunities for learning more about the industry and business.

We recognize that we are on a journey and, as such, we are working to formalize our DEI strategy as part of our broader investment in culture and engagement.

Through partnerships with thought leaders in diversity, equity and inclusion, we intend to continue the journey we have started by expanding our employee resource groups, building processes to support the attraction and development of historically underrepresented talent early in their careers, hosting inclusion training events for all employees, providing forums for feedback and engagement on inclusion and continuing to build on our talent processes that enable change.

For example, we published our workforce demographics in our Sustainability Report.

By publicly disclosing our workforce demographics, we increase transparency in the composition of our workforce as well as facilitate accountability in achieving progress in our diversity goals, including ensuring that diverse candidates are actively considered for roles throughout the organization.

As part of our Human Capital strategy, we established a Culture and Engagement Taskforce (“Taskforce”) that represents the voice of our colleagues in focusing on the Company’s overall culture, as well as driving forward progress with specific DEI related initiatives.

The Taskforce also functions as our Diversity and Inclusion Council.

The Taskforce helped launch our Culture Survey, supported the implementation of our global framework for Colleague Resource Groups (“CRGs”) and launched two new CRGs at the Company.

We remain on track to achieve the goals we have set for ourselves tied to diverse representation in our workforce.

In addition to providing learning and engagement opportunities to Company colleagues, we also recognize the importance of building an inclusive talent pipeline and external partnerships play a key role in how we do this.

For example, the Company is a corporate member of Women in Manufacturing and a sponsor of the Women Automotive Network, both of which are organizations invested in supporting and promoting women in their respective industries.

We are also a corporate supporter and sponsor of the Future of STEM Scholars Initiative, an organization that strives to increase the presence of students currently underrepresented in the STEM talent pool.

We are proud of our collaboration with these organizations and others, and believe they will be an important part of ensuring we enable a pipeline of diverse candidates both now and in the future.

We continue to invest in women and diverse talent through partnership with external leadership development firms, providing opportunities to our talent that will accelerate their leadership development professionally and personally.

Workplace Safety

7 unchanged sentences

We also require all employees to regularly complete safety training.

Additionally, our ELT is closely involved in our safety programs and conducts regular reviews of safety performance metrics and reviews the Company’s safety performance during Company-wide meetings.

Additionally, our ELT is closely involved in our safety programs, conducts regular reviews of safety performance metrics and reviews the Company’s safety performance during Company-wide meetings.

Quaker Houghton on the Internet

1 unchanged sentence

This site includes important information on the Company’s locations, products and services, financial reports, news releases and career opportunities.

The Company’s periodic and current reports on Forms 10-K, 10-Q, 8-K, and other filings, including exhibits and supplemental schedules filed therewith, and amendments to those reports, filed with the Securities and Exchange Commission (“SEC”) are available on the Company’s website, free of charge, as soon as reasonably practicable after they are electronically filed with or furnished to the SEC.

The Company’s periodic and current reports on Forms 10-K, 10-Q, 8-K, and other filings, including exhibits and supplemental schedules filed therewith, and amendments to those reports, filed with the Securities and Exchange Commission (“SEC”) are available on the Company’s website as soon as reasonably practicable after they are electronically filed with or furnished to the SEC.

Information contained on, or that may be accessed through, the Company’s website is not incorporated by reference in this Report and, accordingly, you should not consider that information part of this Report.

Factors that May Affect Our Future Results

(Cautionary Statements under the Private Securities Litigation Reform Act of 1995)

Certain information included in this Report and other materials filed or to be filed by us with the SEC, as well as information included in oral statements or other written statements made or to be made by us, contain or may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

These statements can be identified by the fact that they do not relate strictly to historical or current facts.

We have based these forward-looking statements, including statements regarding the potential effects of the COVID-19 pandemic, the Russia and Ukraine conflict, inflation and global supply chain constraints on the Company’s business, results of operations, and financial condition, our expectation that we will maintain sufficient liquidity, remain in compliance with the terms of the Company’s credit facility, expectations about future demand and raw material costs, and statements regarding the impact of increased raw material costs and pricing initiatives on our current expectations about future events.

• the impacts on our business as a result of the COVID-19 pandemic;

• the timing and extent of the projected impacts on our business as a result of the Ukrainian and Russian conflict and actions taken by various governments and governmental organizations in response;

• inflationary pressures, cost increases, and the impacts of constraints and disruptions in the global supply chain;

• the potential benefits of acquisitions;

• the potential for a variety of macroeconomic events, including the possibility of global or regional recessions, inflation generally, cost increases in prices of raw materials such as oil and increasing interest rates, to impact the value of our assets or result in asset impairments;

• our current and future results and plans including our sustainability goals;

• statements that include the words “may,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan” or similar expressions.

Certain information included in this Report and other materials filed or to be filed by us with the SEC, as well as information included in oral statements or other written statements made or to be made by us, contain or may contain forward-looking statements that fall under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and the Securities Act of 1933, as amended.

These statements can be identified by the fact that they do not relate strictly to historical or current facts and can generally be identified by words such as “may,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “outlook,” “target,” “possible,” “potential,” “plan” or similar expressions, but these terms are not the exclusive means of identifying such statements.

We have based these forward-looking statements on assumptions, projections and expectations about future events that we believe are reasonable based on currently available information, including statements regarding the potential effects of the conflicts in Ukraine and the Middle East, inflation, and global supply chain constraints on the Company’s business, results of operations, and financial condition;

our expectation that we will maintain sufficient liquidity and remain in compliance with the terms of the Company’s credit facility;

expectations about future demand and raw material costs;

and statements regarding the impact of increased raw material costs and pricing initiatives.

These forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, intentions, financial condition, results of operations, future performance, and business, which may differ materially from expectations, estimates and projections because of many factors, including, but not limited to:

• the timing and extent of the projected impacts on our business of acts of war or terrorism, including the conflicts in Ukraine and the Middle East, and actions taken by various governments and governmental organizations in response;

• inflationary pressures, cost increases, and constraints and disruptions in the global supply chain;

• the potential timing, impacts, and other uncertainties of acquisitions and divestitures, including our ability to realize synergies, integrate acquisitions or separate divested assets and businesses;

• the potential for changes in global and regional economic conditions and for a variety of macroeconomic events, including the possibility of global or regional slowdowns or recessions, inflation, deflation or stagflation and its impact on our business, raw materials purchases and/or profitability of our business, a global pandemic, and interest rate changes, to impact the value of our assets or result in asset impairments;

• our current and future results and plans including our sustainability goals and enterprise strategy.

Such statements include information relating to current and future business activities, operational matters, capital spending, and financing sources.

7 unchanged sentences

A major risk is that demand for the Company’s products and services is largely derived from the demand for our customers’ products, which subjects the Company to uncertainties related to downturns in a customer’s business and unanticipated customer production slowdowns and shutdowns, including as is currently being experienced by many automotive industry companies as a result of supply chain disruptions.

Other major risks and uncertainties include, but are not limited to, the primary and secondary impacts of the COVID-19 pandemic, including actions taken in response to the pandemic by various governments, which could exacerbate some or all of the other risks and uncertainties faced by the Company, as well as inflationary pressures, including the potential for continued significant increases in raw material costs, supply chain disruptions, customer financial instability, rising interest rates and the possibility of economic recession, worldwide economic and political disruptions including the impacts of the military conflict between Russia and Ukraine, the economic and other sanctions imposed by other nations on Russia, suspensions of activities in Russia by many multinational companies and the potential expansion of military activity, foreign currency fluctuations, significant changes in applicable tax rates and regulations, future terrorist attacks and other acts of violence.

Furthermore, the Company is subject to the same business cycles as those experienced by our customers in the steel, automobile, aircraft, industrial equipment, and durable goods industries.

Other factors could also adversely affect us, including those related to acquisitions and the integration of acquired businesses.

Other major risks and uncertainties include, but are not limited to, inflationary pressures, including the potential for continued significant increases in raw material costs;

supply chain disruptions;

customer financial instability;

rising interest rates and the possibility of economic recession;

economic and political disruptions including the impacts of the military conflicts between Russia and Ukraine and between Israel and Hamas;

tariffs, trade restrictions and the economic and other sanctions imposed by other nations on Russia and/or other government or government organizations;

suspensions of activities in Russia by many multinational companies and the potential expansion of military activity;

foreign currency fluctuations;

significant changes in applicable tax rates and regulations;

future terrorist attacks and other acts of violence;

the impacts of consolidation in our industry, including loss or consolidation of a major customer;

and the potential occurrence of cyber-security breaches, cyber-security attacks and other security incidents.

Furthermore, the Company is subject to the same business cycles as those experienced by our customers in the steel, automobile, aircraft, industrial equipment, aluminum, and durable goods industries.

Our forward-looking statements are subject to risks, uncertainties and assumptions about the Company and its operations that are subject to change based on various important factors, some of which are beyond our control.

In addition to the factors above, our forward-looking statements are qualified with respect to the risks disclosed elsewhere in this Report, including in Item 1A, Risk Factors, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Item 7A,Quantitative and Qualitative Disclosures About Market Risk.

These risks, uncertainties, and possible inaccurate assumptions relevant to our business could cause our actual results to differ materially from expected and historical results.

Therefore, we caution you not to place undue reliance on our forward-looking statements.

For more information regarding these risks and uncertainties as well as certain additional risks that we face, refer to the Risk Factors section, which appears in Item 1A of this Report and in our quarterly and other reports filed from time to time with the SEC.

This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995.

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 1. Business