What changed in this filing

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Item 1. Business

2023-11-17 compared with 2022-11-18 · 38 added, 225 removed, 89 unchanged (75% of the section changed)

BUSINESS, (continued)

The segment is a leading manufacturer and distributor of caskets and other funeral home products in North America, producing and marketing metal, wood and cremation caskets.

Caskets are offered in a variety of colors, interior designs, handles and trim in order to accommodate specific religious, ethnic or other personal preferences and can also be personalized.

Other specialized funeral home products such as urns, jewelry, interior panels, and stationery are also offered.

Metal caskets are made from various gauges of cold-rolled steel, stainless steel, copper and bronze.

Metal caskets are generally categorized by whether the casket is non-gasketed or gasketed, and by material (i.e., bronze, copper, or steel) and in the case of steel, by the gauge (thickness) of the metal.

Wood caskets are primarily manufactured from nine different species of wood.

The species of wood used are poplar, pine, ash, oak, pecan, maple, cherry, walnut and mahogany.

The Memorialization segment is a leading manufacturer of all-wood constructed caskets, which are manufactured using pegged and dowelled construction, and include no metal parts.

Cremation caskets are made primarily from wood or cardboard covered with cloth or veneer.

These caskets appeal primarily to cremation consumers, environmentally concerned consumers and value buyers.

The Memorialization segment produces casket components, which include stamped metal parts, metal locking mechanisms for gasketed metal caskets and adjustable beds.

Metal casket parts are produced by stamping cold-rolled steel, stainless steel, copper and bronze sheets into casket component parts.

Locking mechanisms and adjustable beds are produced by stamping and assembling a variety of steel parts.

The segment purchases various species of uncured wood from sawmills and lumber distributors, which it dries and cures before being processed into casket components.

The segment provides product and service assortment planning, as well as merchandising and display products to funeral service businesses.

The Memorialization segment develops and sells technology solutions that help funeral homes manage their businesses and serve families through these digital platforms.

Solutions are delivered as software as a service and include funeral home management systems and web-based arrangement and presentation systems.

These products assist funeral service professionals in providing information, value and satisfaction to their client families.

The segment offers cremation systems, crematory management, and cremation service and supplies to the pet and human sector, and standard and specialized incineration systems, including abated filtration systems to satisfy strict environmental requirements.

The primary market areas for these products and services are North America and Europe, although the segment also sells into Latin America and the Caribbean, Australia, Africa, the Middle East and Asia.

Cremation systems include flame-based systems for cremation of humans and pets, as well as equipment for processing the cremated remains and other related equipment (ventilated workstations, loading systems, tables, cooler racks, vacuums).

The principal markets for these products are funeral homes, cemeteries, crematories, pet crematories, animal disposers and veterinarians.

These products primarily are marketed directly by segment personnel.

Human crematory management/operations represent the actual operation and management of client-owned crematories.

Currently the segment provides these services primarily to municipalities and private operators in Europe.

Cremation service and supplies consist of operator training, preventative maintenance and on-demand service work performed on various makes and models of equipment.

This work can be as simple as replacing defective bulbs or as complex as complete reconstruction and upgrading or retrofitting on site.

Supplies are consumable items and replacement parts associated with normal crematory operations.

Waste incineration systems encompass both batch load and continuous feed, static, stepped-hearth and rotary systems for incineration of all waste types, as well as equipment for in-loading waste, out-loading ash and energy recovery.

The principal markets for these products are animal and medical waste disposal, oil and gas "work camp" wastes, industrial wastes and bio-mass generators, as well as destruction of low-volume, high-value waste types such as contraband and pharmaceutical products.

Environmental and energy systems include emissions filtration units, waste heat recovery equipment, waste gas treatment products, as well as energy recovery.

The segment also provides commissioning, training and user support for customers of incineration systems.

The principal markets are municipalities or public/state agencies, the cremation industry and other industries that utilize incinerators for waste reduction and energy production.

Architectural products include cast bronze and aluminum plaques, etchings and letters that are used to recognize, commemorate and identify people, places, events and accomplishments.

The Company's plaques are frequently used to identify the name of a building, or the names of companies or individuals located within a building.

Such products are also used to commemorate events or accomplishments, such as military service or financial donations.

The principal markets for the segment's architectural products are corporations, fraternal organizations, contractors, churches, hospitals, schools and government agencies.

These products are sold to and distributed through a network of independent dealers including sign suppliers, awards and recognition companies, and trophy dealers.

BUSINESS, (continued)

Raw materials used by the Memorialization segment to manufacture memorials consist principally of bronze and aluminum ingot, granite, sheet metal, coating materials, photopolymers and construction materials and are generally available in adequate supply.

Ingot is obtained from various North American, European and Australian smelters.

The primary materials required for casket manufacturing are cold-rolled steel and lumber.

The segment also purchases copper, bronze, stainless steel, particleboard, corrugated materials, paper veneer, cloth, ornamental hardware and coating materials.

Purchase orders or supply agreements are typically negotiated with large, integrated steel producers that have demonstrated timely delivery, high quality material and competitive prices.

Lumber is purchased from a number of sawmills and lumber distributors.

Raw materials used to manufacture cremation and incineration products consist principally of structural steel, sheet metal, electrical components, combustion devices and refractory materials.

These are generally available in adequate supply from numerous suppliers.

Competition from other manufacturers of memorial products is based on reputation, product quality, delivery, price, and design availability.

The Company believes that its superior quality, broad product lines, innovative designs, delivery capability, customer responsiveness, experienced personnel and consumer-oriented merchandising systems are competitive advantages in its markets.

Competition in the mausoleum construction industry includes various construction companies throughout North America and is based on design, quality and price.

Competitors in the architectural market are numerous and include companies that manufacture cast and painted signs, plastic materials, sand-blasted wood and other fabricated products.

The Memorialization segment markets its casket products in the United States through a combination of Company-owned and independent casket distribution facilities.

The Company operates approximately 75 distribution centers in the United States.

Approximately 85% of the segment's casket products are currently sold through Company-owned distribution centers.

The casket business is highly competitive and the Company competes with other manufacturers based on product quality, price, service, design availability and breadth of product line.

The Memorialization segment provides a line of casket products that it believes is as comprehensive as any of its major competitors.

There are a large number of casket industry participants operating in North America, and a few foreign casket manufacturers, primarily from China, participating in the North American market.

The Company competes with several manufacturers in the cremation and accessory equipment market principally based on product design, quality and price.

The Memorialization segment and its three largest global competitors account for a substantial portion of the United States and European cremation equipment market.

The Memorialization segment works to provide a total solution to customers that own and operate businesses in both the cemetery and funeral home markets.

The Company's memorial and casket products serve the relatively stable casketed and in-ground burial death market, while its memorial products and cremation and incineration equipment also serve the growing cremation market.

Industrial Technologies:

The Industrial Technologies segment includes the design, manufacturing, service and distribution of high-tech custom energy storage solutions, product identification and warehouse automation technologies and solutions, including order fulfillment systems for identifying, tracking, picking and conveying consumer and industrial products.

The energy storage solutions business produces engineered calendering, laminating, and coating equipment used in the manufacturing of lithium-ion batteries and components of fuel cells.

The segment currently delivers products to several major vehicle producers and is actively pursuing opportunities with several other electric vehicle and tier-one battery manufacturers.

The segment also offers service, spare parts, calender- and coating-roller refurbishing and retrofits of complete production lines.

Production capabilities are available in Germany and the Czech Republic, with design and assembly in Germany, Switzerland, Czech Republic, Canada and the United States.

The business is globally active with well-established customer relations.

The energy storage solutions business has experienced significant growth primarily reflecting expanded use of electric vehicles, as well as the expansion of renewable energy production globally.

The segment has nearly a decade of experience in developing dry electrode lithium-ion battery solutions.

Dry electrode technology makes producing lithium-ion batteries easier and less expensive than the wet electrode process, and dry electrode manufacturing is also less impactful on the environment.

These factors could contribute to increased utilization of dry electrode batteries in the electric vehicle market, and thus greater demand for this form of battery in the future.

BUSINESS, (continued)

Product identification systems range from stand-alone marking products to complex ink-jet printing systems that integrate into a customer's production process.

The Company manufactures and markets products and systems that employ different marking technologies, including laser and ink-jet printing.

These technologies apply product information required for identification and traceability, as well as to facilitate inventory and quality control, regulatory compliance and brand name communication.

The segment also develops innovative, custom solutions to address specific customer requirements in a variety of industries, including oil field services and security scanning.

Warehouse automation systems complement the tracking and distribution of a customer's products with automated order fulfillment technologies, and controls for material handling systems.

Material handling customers include some of the largest retail, e-commerce, and third-party logistics companies in the United States.

A significant portion of the revenue of the Industrial Technologies segment is attributable to the sale of consumables and replacement parts required by the marking, coding and tracking products sold by Matthews.

The Company develops inks exclusively for the use with its marking equipment, which is critical to ensure ongoing equipment reliability and mark quality.

The principal customers for the Company's marking and fulfillment systems products are manufacturers, suppliers and distributors of durable goods, building products, consumer goods manufacturers (including food and beverage processors) and producers of pharmaceuticals.

The Company also serves a wide variety of industrial markets, including metal fabricators, manufacturers of woven and non-woven fabrics, plastic, rubber and automotive products.

A portion of this segment's sales are outside the United States, sourced through the Company's subsidiaries in Sweden, Germany, Malaysia and China in addition to other international distributors.

The Company owns a minority interest in distributors in Asia, Australia and Europe.

Major raw materials for this segment's products include precision components, electronics, printing components, chemicals, steel, copper, and film all of which are presently available in adequate supply from various sources.

Competitors in the marking and fulfillment systems industries are diverse, with some companies offering limited product lines for well-defined specialty markets, while others operate similarly to the Company, offering a broad product line and competing in multiple product markets and countries.

Competitive differentiation for marking and fulfillment systems products is based on product performance, ease of integration into the manufacturing and/or distribution process, service and price.

The Company typically competes with specialty companies in specific brand marking solutions and traceability applications.

In the energy storage solutions business, the Company has patents and pending patent applications on its dry electrode calendering equipment.

The Company believes that, in general, its Industrial Technologies segment offers one of the broadest lines of products to address a wide variety of high-tech custom energy storage solutions, product identification and warehouse automation applications.

SGK Brand Solutions:

The SGK Brand Solutions segment provides packaging and brand experience solutions that simplify marketing, amplify brands and deliver value.

Matthews has more than 100 years in the packaging business, which is comprised of broad technical, engineering, and artistic expertise relating to the creation and production of graphics, their workflows and best practices for the commercial packaging and retail channels.

This combination of knowledge, experience and skill helps the SGK Brand Solutions segment differentiate itself from competitors.

The SGK Brand Solutions segment helps companies to define, create, produce and transform their packaging and marketing supply chains and the brand assets that flow through them.

By simplifying marketing, the segment helps deliver greater speed through workflow efficiency, enabling clients to get new product introductions and campaigns to market faster which can result in a competitive advantage for the brand.

By amplifying brands, the segment helps brands create meaningful experiences online and offline that enable them to stand out in the marketplace which can result in a stronger connection between consumers and the brand.

The SGK Brand Solutions segment also helps clients deliver improved marketing productivity and profitability through innovative technology solutions.

BUSINESS, (continued)

The packaging solutions part of its business integrates all packaging-related services from the beginning to the end of the packaging development workflow process.

28 unchanged sentences

In addition, the Company maintains numerous trade secrets that further comprise its portfolio of intellectual property assets.

The Company continues to assess, refine and expand its intellectual property portfolio, considering options to pursue additional patent filings and to further develop and continue to maintain processes to identify, inventory and safeguard evolving trade secrets.

The Company also enters into agreements with customers that authorizes the use of certain intellectual property through various licensing arrangements.

BUSINESS, (continued)

9 unchanged sentences

Diversity and Inclusion:

Matthews views diversity and inclusion (“D&I”) as a priority to be valued and promoted in every aspect of its business.

Matthews views diversity and inclusion (“D&I”) as a priority to be valued and promoted throughout its business.

The Company understands and firmly believes in the value that diverse experiences, perspectives, and ideas bring to the workforce and offer to clients.

Matthews knows its employees deserve equal opportunities regardless of race, gender, gender expression, age, disability, religion, sexual orientation and more.

As an organization with a history that spans more than 170 years, Matthews has always believed that mutual respect, valuing the worth of all people, doing what's right and celebrating diversity is essential to how the Company operates and the way it does business.

Matthews’ D&I strategy focuses on four pillars:

Infrastructure, Talent Acquisition, Employee Engagement and Community Engagement.

A global council representative of a diverse workforce exists to help shape plans and program priorities across these pillars and to champion the work to build a more inclusive culture, and a full time D&I leader is actively focused on driving progress in this area.

Matthews knows its employees deserve equal opportunities regardless of race, national origin, gender, gender expression, age, disability, religion, sexual orientation and more.

Matthews has consistently advocated that mutual respect, valuing the worth of all people, doing what's right and celebrating diversity is essential to how the Company operates and the way it does business.

Matthews’ D&I strategy focuses on priorities across seven key areas including:

Talent Acquisition, Employee Engagement, Learning and Awareness, Supplier Diversity, Connection to Customers, Normalizing Courageous Conversations, and Community Engagement.

A global council representative of a diverse workforce exists to help shape plans and program priorities, and seven additional councils across the organization support the program within local/regional markets to champion the work.

A full time D&I leader is actively focused on driving the overarching program and building progress across all seven focus areas.

Matthews is a unique organization, diverse in culture, talent and geography.

2 unchanged sentences

To continue to grow and compete in a highly competitive labor market, Matthews works hard to attract and select top talent through a compelling employment value proposition.

The Company’s employment brand highlights its values, commitment to people culture, diversity, equity and inclusion, employee development and the efforts to ensure cultural alignment, and the selection process includes key behavioral questions that help select the right people for the right roles.

The Company’s employment brand highlights its values including innovation, commitment to people culture, diversity, equity and inclusion, employee development, and wellbeing.

The Company's selection process includes key behavioral questions that help select the right people for the right roles which helps to ensure cultural alignment.

Matthews understands the highly competitive market for talent and believes that to attract and retain top talent, it must offer competitive pay and benefit programs.

1 unchanged sentence

As a global company, adjustments are made for global and regional market demands.

BUSINESS, (continued)

Talent Development/Management:

3 unchanged sentences

Matthews’ competency-based learning center helps employees select learning programs to continue their growth, and the Company facilitates both formal and informal mentoring that reinforces and supports its leaders during key developmental periods and beyond.

BUSINESS, (continued)

The Company’s future success depends upon tomorrow’s leaders.

Matthews has implemented a robust talent review process that identifies critical talent and serves as the basis for succession planning.

Each year, at the conclusion of this review, the executive team selects a cohort of critical talent to participate in a comprehensive leadership program designed to prepare leaders for enterprise roles.

The Company believes this investment, which includes classroom learning, assessments, coaching/mentoring and project application, both prepares and strengthens the organization for the future, while deepening the commitment of its top talent.

Each year, at the conclusion of this review, the executive team selects a cohort of critical talent by level to participate in comprehensive leadership programs designed to prepare leaders for enterprise roles.

The Company believes this investment, which includes classroom learning, external assessments, coaching/mentoring, and project application, both prepares and strengthens the organization for the future, while deepening the commitment of its top talent.

Performance Management:

5 unchanged sentences

Building change capability to support employees through changes accelerates new ways of working, minimizes productivity loss, and accelerates improvement measures.

The Company has a trained global change network embedded in the business to support transformational projects to help realize the goals and benefits of organizational changes.

Health and Safety:

2 unchanged sentences

Hazards in the workplace are timely identified and management actively tracks incidents so remedial actions may be implemented to improve workplace safety.

Because the nature of the Company's Memorialization, Industrial Technologies, and SGK Brand Solutions businesses are primarily custom products made to order and services with short lead times, backlogs are not generally material except for mausoleums and cremation and incineration equipment in the Memorialization segment, and purpose-built machinery, warehouse automation and order fulfillment projects in the Industrial Technologies segment.

Cremation and incineration equipment sales backlogs vary in a range of ten to twelve months of sales.

The Company's current backlog is expected to be substantially filled in fiscal 2024.

Cremation and incineration equipment sales backlogs vary in a range of four to six months of sales.

Backlogs vary in a range of approximately twelve to eighteen months of sales for mausoleums.

1 unchanged sentence

Backlogs for warehouse automation and fulfillment systems generally vary in a range of up to four weeks for standard products, and are currently in the range of ten to twelve months for custom systems.

The Company's current backlog is expected to be substantially filled in fiscal 2023.

BUSINESS, (continued)

11 unchanged sentences

There are inherent risks and uncertainties associated with the Company's businesses that could adversely affect its operating performance and financial condition.

Set forth below are descriptions of those risks and uncertainties that the Company currently believes to be material.

Additional risks not currently known or deemed immaterial may also result in adverse effects on the Company.

Set forth below are descriptions of those risks and uncertainties that the Company believes to be material as of the date of this Annual Report on Form 10-K.

Additional risks not known to the Company as of such date or risks that the Company deemed immaterial may also result in adverse effects on the Company in the future.

Company-Specific Risk Factors:

3 unchanged sentences

As such, the Company's future success depends in part on its ability to grow sales in non-U.S.

Sales and operations outside of the United States are subject to certain inherent risks, including fluctuations in the value of the U.S.

dollar relative to foreign currencies, global economic uncertainties, tariffs, quotas, taxes and other market barriers, political and economic instability, restrictions on the export or import of technology, potentially limited intellectual property protection, difficulties in staffing and managing international operations, potentially adverse tax consequences, and required compliance with non-U.S.

laws and regulations.

Changes in Foreign Currency Exchange Rates .

Production and sales of a significant portion of the Company's products are outside the United States, and accordingly, the Company holds assets, incurs liabilities, earns revenue and pays expenses in a variety of currencies.

The Company's consolidated financial statements are presented in U.S.

dollars, and therefore, the Company must translate the reported values of its foreign assets, liabilities, revenue and expenses into U.S.

Increases or decreases in the value of the U.S.

dollar compared to foreign currencies may negatively affect the value of these items in the Company's consolidated financial statements, even though their value has not changed in local currency.

Changes in Interest Rates .

Interest rate fluctuations could increase the Company's financing costs to the extent such interest rates are not hedged, or limit the Company's ability to obtain additional indebtedness or debt refinancing to be offered on terms that the Company deems attractive, if at all, which could have a material and adverse effect on the Company's borrowing costs, profitability, liquidity and capital resources.

Borrowings under the Company’s credit facilities, including the domestic credit facility, are subject to variable rates of interest and expose the Company to interest rate risk.

The Company enters into interest rate swaps in order to achieve a mix of fixed and variable rate debt that it deems appropriate.

To the extent that some or all of the Company’s variable interest rate debt is not subject to interest rate swaps, if interest rates were to increase, the Company’s interest expense would increase, negatively affecting earnings and reducing cash flows available for working capital, capital expenditures and other investments.

RISK FACTORS, (continued)

The Company also previously issued $300.0 million 5.25% senior unsecured notes due December 1, 2025 (the “2025 Senior Notes”).

In the event the Company seeks to refinance indebtedness under the domestic credit facility or the 2025 Senior Notes, or obtain additional financing, higher interest rates may limit the Company’s ability to incur such indebtedness on terms that it deems attractive, if at all.

If the Company is unable to incur indebtedness on terms that it deems attractive, it could have a material and adverse effect on the Company’s borrowing costs, profitability, liquidity and capital resources.

Increased Prices for Raw Materials.

The Company's profitability is affected by the prices of the raw materials used in the manufacture of its products.

These prices may fluctuate based on a number of factors, including changes in supply and demand, domestic and global economic conditions, volatility in commodity markets, currency exchange rates, labor costs, tariffs and fuel-related costs.

If suppliers increase the price of critical raw materials, alternative sources of supply, or alternative materials, may not exist or be readily available.

In addition, disruptions in the global supply chain may cause prices for raw materials to increase.

See "Disruptions to the global supply chain."

The Company has standard selling price structures (i.e., list prices) in certain of its segments, which are reviewed for adjustment generally on an annual basis.

In addition, the Company has established pricing terms with several of its customers through contracts or similar arrangements.

Based on competitive market conditions and to the extent that the Company has established pricing terms with customers, the Company's ability to immediately increase the price of its products to offset the increased costs may be limited.

Significant raw material price increases that cannot be mitigated by selling price increases or productivity improvements will negatively affect the Company's results of operations.

Changes in Mortality and Cremation Rates.

Generally, life expectancy in the United States and other countries in which the Company's Memorialization segment operates has increased steadily for several decades and is expected to continue to do so in the future, absent events related to pandemics or similar outbreaks.

The increase in life expectancy is also expected to impact the number of deaths in the future.

Additionally, cremations have steadily grown as a percentage of total deaths in the United States since the 1960's, and are expected to continue to increase in the future.

The Company expects that these trends will continue in the future and sales of the Company's Memorialization segment may benefit from the continued growth in the number of cremations;

however, such trends may adversely affect the volume of bronze and granite memorialization products and burial caskets sold in the United States.

Changes in Product Demand or Pricing.

The Company's businesses have and will continue to operate in competitive markets.

Changes in product demand or pricing are affected by domestic and foreign competition and an increase in consolidated purchasing by large customers operating in both domestic and global markets.

The Memorialization businesses generally operate in markets with ample supply capacity and demand which is correlated to death rates.

The SGK Brand Solutions businesses serve global customers that are requiring their suppliers to be global in scope and price-competitive.

Additionally, in recent years the Company has witnessed an increase in products manufactured offshore, primarily in China, and imported into the Company's U.S.

It is expected that these trends will continue and may affect the Company's future results of operations.

Changes in the Distribution of the Company's Products or the Loss of a Large Customer.

Although the Company does not have any customer that is individually significant to consolidated sales, it does have contracts with several large customers in each of its business segments.

While these contracts provide important access to large purchasers of the Company's products, they can obligate the Company to sell products at contracted prices for extended periods of time.

Additionally, any significant divestiture of business properties or operations by current customers could result in a loss of business if the Company is not able to maintain the business with the subsequent owners of the businesses.

Disruptions to the global supply chain.

The Company purchases components and materials to manufacture its products from a large number of suppliers, some of which may be critical to operations.

The Company’s product offerings are impacted by such suppliers' lead times, volume constraints and increasing costs.

The Company has experienced and may continue to experience extended lead times and product unavailability due to manufacturing disruptions or closures as well as delays and unanticipated costs associated with the sourcing of materials.

Matthews’ supply chain operations span several geographies globally and are heavily dependent upon third party logistics and transportation services to deliver the Company’s products to customers.

Extended lead times and shortages could impair the Company’s ability to meet its customer requirements, require the Company to pay higher prices or incur expedite fees or cause its customers to delay or forgo projects, which would harm Matthews’ business and negatively impact the Company’s gross margin and results of operations.

RISK FACTORS, (continued)

Pandemics or similar outbreaks.

Pandemics or similar outbreaks could adversely affect the economies of developed and emerging markets, potentially resulting in an economic downturn that could affect customers’ demand for the Company’s products and services, as well as the Company's ability to access capital at acceptable interest rates.

The spread of pandemics or similar outbreaks may also disrupt the Company’s manufacturing and production operations, as well as its distribution systems, which include import and export for delivery of the Company’s products to its customers.

These factors could materially and adversely affect the Company’s business, financial condition and results of operations.

See also "Disruptions to the global supply chain."

Due to the uncertainty relating to a pandemic or similar outbreak, the Company, its customers or its suppliers may be required, or believe that it is advantageous, to take precautionary measures intended to minimize the risk of a virus or disease spreading to employees, customers, and the communities in which they operate, and these measures could negatively impact the Company’s business.

Further, if the scope and severity of an outbreak worsens and the Company’s contingency plans prove ineffective, its global operations could potentially experience disruptions, such as temporary closure of facilities or delays or suspensions in product offerings and services, which may materially and adversely affect the Company’s business, financial condition and results of operations.

Global conflicts may impact the business of the Company and the markets in which it operates.

Global conflicts, such as the war in Ukraine, could impact the Company and its operations in a number of different ways, which are yet to be fully assessed and are therefore uncertain.

The Company’s principal concern is for the safety of its employees and other personnel, specifically those who are based in the affected region.

The Company has employees who are based in Eastern Europe, including Russia and Ukraine, who may be affected by the ongoing hostilities.

The Company additionally has property, plant and equipment in or around the affected region.

The continuing impact of this war and the response of the United States and other countries to it by means of trade and economic sanctions, or other actions, is still evolving and unknown;

however it could disrupt the Company’s ability to work with certain parties.

Similarly, the Company has employees based in the affected region and works with third-party providers from other parts of the world that may be affected by hostilities.

Due to the uncertainty relating to war or similar conflicts, the current war between Russia and Ukraine may adversely affect the Company's business, of which could materially and adversely affect the Company's results of operations.

Such risks include, but are not limited to, adverse effects on macroeconomic conditions, including inflation and business and consumer spending;

disruptions to the Company's global technology infrastructure, including through cyberattack, ransom attack, or cyber-intrusion;

adverse changes in international trade policies and relations;

disruptions in global supply chains;

exposure to foreign currency fluctuations;

and constraints, volatility, or disruption in the capital markets.

Similar uncertainties may arise in connection with other ongoing hostilities or future hostilities.

For so long as the hostilities continue, and perhaps even thereafter as the situation unfolds, the Company may see increased volatility in financial markets, which may impact equity markets generally, including the Company’s stock price, and make it more difficult for the Company to raise additional capital at a strategically advantageous time, or for financing to be available upon acceptable terms.

All or any of these risks separately, or in combination could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Risks in Connection with Acquisitions .

The Company has grown, in part, through acquisitions, and continues to evaluate acquisition opportunities that have the potential to support and strengthen its businesses.

There is no assurance however that future acquisition opportunities will arise, or that if they do, that they will be consummated.

In addition, acquisitions involve inherent risks that the businesses acquired will not perform in accordance with expectations, or that synergies expected from the integration of the acquisitions will not be achieved as rapidly as expected, if at all.

The Company's pre-acquisition diligence review may not discover or accurately quantify certain undisclosed liabilities, and the Company may not be indemnified for such liabilities which could have an adverse effect on the acquired business.

Failure to effectively integrate acquired businesses could prevent the realization of expected rates of return on the acquisition investment, including the achievement of cost-reduction objectives, and could have a negative effect on the Company's results of operations and financial condition.

RISK FACTORS, (continued)

Protection of Intellectual Property.

Certain of the Company's businesses rely on various intellectual property rights, including patents, copyrights, trademarks and trade secrets, as well as confidentiality provisions and licensing arrangements, to establish proprietary rights.

If the Company does not enforce its intellectual property rights successfully, its competitive position may suffer which could harm the Company's operating results.

In addition, the Company's patents, copyrights, trademarks and other intellectual property rights may not provide a significant competitive advantage.

The Company may need to spend significant resources monitoring its intellectual property rights and may or may not be able to detect infringement by third parties.

The Company's competitive position may be harmed if it cannot detect infringement and enforce its intellectual property rights quickly or at all.

In some circumstances, the Company may choose to not pursue enforcement because an infringer has a dominant intellectual property position or for other business reasons.

In addition, competitors might avoid infringement by designing around the Company's intellectual property rights or by developing non-infringing competing technologies.

Intellectual property rights and the Company's ability to enforce them may be unavailable or limited in some countries which could make it easier for competitors to capture market share and could result in lost revenues.

Intellectual property infringement assertions by third parties could result in significant costs and adversely affect the Company's business, financial condition, operating results and reputation.

The Company cannot guarantee that the operation of its business does not infringe, misappropriate or otherwise violate the intellectual property rights of third parties.

The Company cannot predict whether other assertions of third-party intellectual property rights or claims arising from such assertions would substantially adversely affect the Company's business, financial condition and operating results.

The defense of these claims and any future infringement claims, whether they are with or without merit or are determined in the Company's favor, may result in costly litigation and diversion of technical and management personnel.

Further, an adverse outcome of a dispute may require the Company to pay damages, cease making, licensing, or using products or offering services that are alleged to incorporate the intellectual property of others, expend additional development resources to redesign the Company's offerings, or enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary intellectual property, which may be unavailable on terms acceptable to the Company, or at all.

Even if these matters do not result in litigation or are resolved in the Company's favor or without significant cash settlements, the time and resources necessary to resolve them could adversely affect the Company's business, reputation, financial condition and operating results.

Environmental Remediation and Compliance.

The Company is subject to the risk of environmental liability and limitations on its operations due to environmental laws and regulations.

The Company is subject to extensive federal, state, local and foreign environmental, health and safety laws and regulations concerning matters such as air emissions, wastewater discharges, solid and hazardous waste handling and disposal and the investigation and remediation of contamination.

The risks of potentially substantial costs and liabilities related to compliance with these laws and regulations are an inherent part of the Company's business, and future conditions may develop, arise or be discovered that create substantial environmental compliance or remediation liabilities and costs.

Compliance with environmental, health and safety legislation and regulatory requirements may prove to be more limiting and costly than the Company anticipates, and there is no assurance that significant expenditures related to such compliance may not be required in the future.

From time to time, the Company may be subject to legal proceedings brought by private parties or governmental authorities with respect to environmental matters, including matters involving alleged noncompliance with or liability under environmental, health and safety laws, property damage or personal injury.

New laws and regulations, including those which may relate to emissions of greenhouse gases, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or the imposition of new clean-up requirements could require the Company to incur costs or become the basis for new or increased liabilities that could have a material adverse effect on the Company's business, financial condition or results of operations.

Technological Factors Beyond the Company's Control.

The Company operates in certain markets in which technological product development contributes to its ability to compete effectively.

There can be no assurance that the Company will be able to develop new products, that new products can be manufactured and marketed profitably, or that new products will successfully meet the expectations of customers.

Sales and operations outside of the United States are subject to certain inherent risks.

The Company anticipates that future sales to international customers will continue to account for a significant percentage of its revenues.

Risks associated with the Company’s international sales and operations include, but are not limited to:

• currency exchange rate fluctuations;

• global political and economic instability and uncertainty;

• international terrorism;

• export controls, including by the United States;

• failure to comply with anti-bribery legislation, including the U.S.

Foreign Corrupt Practices Act (the “FCPA”);

• changes in legal and regulatory requirements;

• policy changes by the United States and foreign governments affecting the markets for the Company’s products;

• changes in tax laws, quotas, tariffs and other market barrier;

• difficulties in protection and enforcement of intellectual property rights;

• restrictions on the export or import of technology;

• failure to comply with the foreign data protection laws, including the European Union’s General Data Protection Regulation (the “GDPR”) ;

• inadvertent transfers of export-controlled information due to increased cross-border technology transfers and the use of offshore computer servers;

• transportation, including piracy in international waters;

• challenges relating to managing a global workforce with diverse cultures, backgrounds and labor laws.

It also is possible that certain international contracts may include industrial cooperation agreements requiring specific in-country purchases, investments, manufacturing agreements or other financial obligations (known as offset obligations) and may provide for penalties if the Company fails to meet such requirements.

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