What changed in this filing

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Item 1A. Risk Factors

2021-02-18 compared with 2020-02-21 · 40 added, 37 removed, 199 unchanged (28% of the section changed)

26 unchanged sentences

Disruptions in the Company’s manufacturing, supply or distribution chain could result in an adverse impact on results of operations.

The Company sources materials and sells product through various international network channels.

The Company sources materials and sells product through various global network channels.

A disruption could occur within the Company’s manufacturing, distribution or supply chain network.

This could include damage or destruction due to various causes including natural disasters or political instability which would cause one or more of these network channels to become non-operational.

This could adversely affect the Company’s ability to manufacture or deliver its products in a timely manner,

impair its ability to meet customer demand for products and result in lost sales or damage to its reputation.

This could adversely affect the Company’s ability to manufacture or deliver its products in a timely manner, impair its ability to meet customer demand for products and result in lost sales or damage to its reputation.

Such a disruption could have a material adverse effect on the Company’s business, financial condition and results of operations.

5 unchanged sentences

The Company will need to develop and introduce new products and product enhancements on a timely basis that keep pace with technological developments and emerging industry standards and address increasingly sophisticated requirements of its customers.

The Company invests heavily in research and development without knowing that it will recover these costs.

The Company invests heavily in research and development without knowing tif it will recover these costs.

The Company’s competitors may develop products or technologies that will render its products non-competitive or obsolete.

4 unchanged sentences

A significant work stoppage, or an interruption or shortage of supplies for any reason, if protracted, could substantially adversely affect the Company’s business, financial condition and results of operations.

The transfer of the Company’s manufacturing operations and changes in its distribution model could disrupt operations for a limited time.

Failure to attract and retain qualified personnel could affect the Company’s business results.

6 unchanged sentences

The Company develops and acquires new intellectual property on an ongoing basis and considers all of its intellectual property to be valuable.

The Company's policy is to file applications and obtain patents for the great majority of its novel and innovative new products including product modifications and improvements.

The Company's policy is to file applications and obtain patents for the great majority of its novel and innovative

new products including product modifications and improvements.

Based on the broad scope of its product lines, the Company believes that the loss or expiration of any single intellectual property right would not have a material adverse effect upon its consolidated results of operations, financial position and cash flows;

3 unchanged sentences

and other countries 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 adopted a new approach to trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements.

It has also imposed tariffs on certain foreign goods and products.

In the past few years, the U.S.

government adopted a new approach to trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multi-lateral trade agreements.

It also imposed tariffs on certain foreign goods and products.

These measures may materially increase costs for goods imported into the United States.

2 unchanged sentences

trade policy have resulted in, and could result in more, U.S.

trading partners adopting responsive

trade policies making it more difficult or costly for us to export our products to those countries.

trading partners adopting responsive trade policies making it more difficult or costly for us to export our products to those countries.

Additionally, continued geo-political issues may result in customers in China seeking to source products from local suppliers, which could result in lower sales or lost customers.

21 unchanged sentences

• terrorist activities;

public health concerns, including the recent outbreak of the coronavirus impacting China and elsewhere;

• public health concerns, including the outbreak of the coronavirus;

• difficulties in staffing and managing multi-national operations;

• limitations on the Company’s ability to enforce legal rights and remedies.

More recently, the coronavirus outbreak originating from China at the beginning of 2020 has resulted in extended shutdowns of numerous business activities in the region and supply chain disruptions, which has impacted the sales, production and shipment of products in and out of its borders.

These shutdowns and disruptions have impacted the Company’s manufacturing and supply chain operations, as well as those of its suppliers, contract manufacturers and customers.

As new developments continue to arise, the Company is not yet able to fully ascertain the impact on its sales, manufacturing, supply chain and operations to its business and financial results, both inside and outside of China.

Health concerns in China or other countries in which the Company or the Company’s suppliers, contract manufacturers and customers operate could result in social, economic, and labor instability.

Any of these factors could have a material adverse effect on the Company’s consolidated results of operations, financial position and cash flows.

The COVID-19 pandemic could have a material adverse effect on our ability to operate, results of operations, financial condition, liquidity, and capital investments.

The World Health Organization declared the COVID-19 outbreak a pandemic in 2020, and the virus continues to spread in areas where we operate and sell our products.

The COVID-19 pandemic and similar situations/circumstances in the future could have a material adverse effect on our ability to operate, results of operations, financial condition, liquidity, and capital investments.

Several public health organizations have recommended, and some local governments have implemented, certain measures to slow and limit the transmission of the virus, including travel restrictions, shelter-in-place requirements and social distancing requirements.

Such preventive measures, or others we may voluntarily put in place, may have a material adverse effect on our business for an indefinite period of time, such as the potential shut down of certain locations, decreased employee

availability, potential increased vulnerability to cybersecurity incidents, including breaches of information systems security due to widespread remote working arrangements, potential border closures, disruptions to the businesses of our original equipment manufacturers ("OEMs") and channel partners, and others.

Our suppliers and customers may also face these and other challenges, which could lead to a disruption in our supply chain as well as decreased demand for our products.

These issues may also materially affect our future access to our sources of liquidity, particularly our cash flows from operations, financial condition, capitalization, and capital investments.

These disruptions may continue to occur and may result in future impairment, restructuring and other charges.

To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in the risk factors disclosed in Part I, Item 1A.

Risk Factors , including those relating to our products and services, financial performance, debt covenant compliance and debt obligations.

The ultimate magnitude of COVID-19, including the extent of its impact on our financial and operational results, which could be material, will be determined by the length of time that the pandemic continues, its effect on the demand for our services, as well as the effect of governmental regulations imposed in response to the pandemic.

We cannot at this time predict the impact of the COVID-19 pandemic, but it could have a material adverse effect on our business, financial condition, results of operations and/or cash flows.

Environmental liabilities could adversely impact the Company’s financial position.

9 unchanged sentences

Certain of these properties were used in ways that involved hazardous materials.

Contaminants may migrate from, within

or through these properties.

Contaminants may migrate from, within or through these properties.

These releases or migrations may give rise to claims.

13 unchanged sentences

The Company has multiple sources of supply for the majority of its commodity requirements.

However, significant shortages that disrupt the supply of raw materials or result in price increases could affect prices the Company charges its customers, its product costs, and the competitive position of its products and services.

However, significant shortages that disrupt the supply of raw materials or result in price increases could affect prices the Company charges its customers, its product costs, and the

competitive position of its products and services.

The Company monitors and manages these exposures as an integral part of its overall risk management program, which recognizes the unpredictability of markets and seeks to reduce the potentially adverse effects on its results.

7 unchanged sentences

For additional discussion of interest rate, currency or commodity price risk, see Item 7A, Quantitative and Qualitative Disclosures about Market Risk .

The Company’s effective tax rate could materially increase as a consequence of various factors, including interpretations and administrative guidance in regard to the Tax Act (defined below), U.S.

The Company’s effective tax rate could materially increase as a consequence of various factors, including U.S.

and/or international tax legislation, mix of the Company’s earnings by jurisdiction, and U.S.

jurisdictional tax audits.

On December 22, 2017, the U.S.

enacted legislation commonly referred to as the Tax Cuts and Jobs Act (the "Tax Act").

Although certain administrative guidance has been issued, the appropriate application of many provisions of the Tax Act remain uncertain.

As discussed more fully in Note 14, Income Taxes , of the Notes to Consolidated Financial Statements included in this Annual Report, adjustments to income tax expense may be necessary in future periods if provisions of the Tax Act, and their interaction with other provisions of the U.S.

Internal Revenue Code, are interpreted differently than interpretations made by the Company, whether through issuance of additional administrative guidance, or through further review of the Tax Act by the Company and its advisors.

Such adjustments could have a material adverse effect on the Company’s future effective tax rate and cash flows.

The Company is subject to taxes in the U.S.

2 unchanged sentences

Therefore, it is subject to changes in tax laws in each of these jurisdictions.

Tax legislative proposals have been mentioned by the new U.S.

administration that, if enacted, would raise the U.S.

corporate income tax rate and result in increases in the taxable income base of U.S.

multinational businesses.

Certain European jurisdictions, including Germany and the Netherlands, have enacted or will enact tax legislation based upon directives from the European Union.

Such legislation could potentially deny tax deductions for certain expenses and/or subject to tax the income earned in certain low tax jurisdictions.

Although the Company believes such legislation will not adversely impact its future effective tax rate, there can be no assurance that its analysis, based upon the currently available information, is correct.

The Company’s income tax rate in certain non-U.S.

The Company’s income tax rate in certain other non-U.S.

jurisdictions, including the Philippines, is substantially lower than the U.S.

statutory tax rate.

Legislative proposals have been made from time to time to reduce these tax benefits, in some cases with the tax increase phased in over a multi-year transition period.

The Philippines is currently contemplating such

legislation which could adversely impact the Company's future effective tax rate.

Legislative proposals have been made from time to time to reduce the tax benefits in these jurisdictions, in some cases with the tax increase phased in over a multi-year transition period.

The Philippines is currently contemplating such legislation, including a relatively long-term transition period.

The outcome of these and other legislative developments, including changes to interpretations of recently enacted legislation, could have a material adverse effect on the Company’s future effective tax rate and cash flows.

The Organization for Economic Co-operation and Development is working with a group of more than 100 countries to seek agreement to modify the international tax system before the end of 2020 to address the influence of the digital economy.

This effort could result in a significant change to the tax treatment of multinationals, subjecting them to tax in additional jurisdictions, modifying the methods by which they allocate profits among jurisdictions, and subjecting them to a global or country by country minimum level of tax.

The Organization for Economic Co-operation and Development is working with a group of more than 100 countries to seek agreement to modify the international tax system during 2021 to address the influence of the digital economy.

This effort could result in a significant change to the tax treatment of multinational businesses, subjecting them to tax in additional jurisdictions, modifying the methods by which they allocate profits among jurisdictions, and subjecting them to a global or country by country minimum level of tax.

The outcome of this effort could have a material adverse effect on the Company’s effective tax rate and cash flows.

The Company has three subsidiaries in China which benefit from lower tax rates due to “tax holidays” which apply for three-year periods, subject to extension.

The tax holiday for two of these subsidiaries expired at the end of 2019 (one will seek an extension and the tax holiday benefits for the other is not material).

The tax holiday for the third subsidiary will expire the end of 2020 and it will seek an extension.

The Company has two subsidiaries in China which benefit from lower tax rates due to “tax holidays” which apply for three-year periods, subject to extension.

The tax holiday for one of these subsidiaries expired at the end of 2020, and it will seek an extension.

There can be no assurance that such extensions will be granted.

7 unchanged sentences

A decline in expected profitability of the Company or individual reporting units of the Company could result in the impairment of assets, including goodwill and other long-lived assets.

The Company holds material amounts of goodwill and other long-lived assets on its balance sheet.

During 2020, the Company recorded a goodwill impairment charge of $33.8 million in the automotive sensors reporting unit within the Automotive segment and the Company continues to hold material amounts of goodwill and other long-lived assets on its balance sheet.

A decline in expected profitability, particularly if there is a decline in the global economy, could call into question the recoverability of the Company’s related goodwill and other long-lived tangible and intangible assets and require the write-down or write-off of these assets.

5 unchanged sentences

The Company’s most significant net long exposure is to the euro.

The Company’s most significant net short exposures are to the Chinese renminbi, Mexican peso, and Philippine peso.

Company’s most significant net short exposures are to the Chinese renminbi, Mexican peso, and Philippine peso.

Changes in foreign exchange rates could have an adverse effect on the Company's results of operations, financial position and cash flows.

50 unchanged sentences

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