What changed in this filing

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Item 1. Business

2023-06-14 compared with 2022-06-14 · 164 added, 188 removed, 116 unchanged (75% of the section changed)

We are a leading supplier of automotive aftermarket non-discretionary replacement parts and test solutions and diagnostic equipment.

Consistent with our strategic vision statement to be “The Global Leader for Parts and Solutions that Move Our World Today and Tomorrow” , we have implemented a multi-pronged platform for growth in

hard parts and test solutions and diagnostic equipment, which are discussed further in the sections below.

We operate in the $130 billion market for non-discretionary automotive aftermarket replacement hard parts business in North America.

current products in the hard parts business include a significant presence in the rotating electrical category (alternators and starters).

In January 2019, we expanded our presence into the

non-discretionary automotive aftermarket replacement parts for heavy-duty truck, industrial, marine and agricultural applications category with the acquisition of Dixie Electric, Ltd (“Dixie”), a privately held manufacturer and remanufacturer of

alternators and starters, based in Ontario, Canada .

This acquisition added an estimated $698 million market opportunity for heavy-duty rotating electrical to our existing

rotating electrical business.

We have a scalable infrastructure, and our growth opportunities remain abundant.

Our growth strategy relating to hard parts includes growing market share in all of our existing hard parts product lines with a

significant focus on our expanding line of brake products.

Our premium non-discretionary automotive aftermarket replacement parts for light-duty applications are primarily sold to automotive retail

chain stores and warehouse distributors throughout North America, and to major automobile manufacturers for both their aftermarket programs and warranty replacement programs (“OES”).

The current population of light-duty vehicles in the U.S.

approximately 280 million, and the average age of these vehicles is approximately 12 years and is expected to continue to grow, in particular during recession years.

The aged vehicle population provides favorable opportunities for sales of our

Although miles driven can fluctuate for various reasons, including fuel prices, they have been generally increasing for several years prior to 2020.

D emand for replacement parts

generally increases with the age of vehicles and miles driven.

We are a leading supplier of automotive aftermarket non-discretionary replacement parts and test solutions and diagnostic equipment -- building upon industry leading technology to be “The Global Leader for Parts and Solutions that Move Our World Today and Tomorrow” .

We operate in the $130 billion non-discretionary automotive

aftermarket for replacement hard parts in North America.

Our hard parts products include light-duty rotating electrical products, wheel hub products, brake-related products, and turbochargers.

In addition, we sell test solutions and diagnostic

equipment, which were added with our acquisitions of D&V Electronics Ltd.

in July 2017 and Mechanical Power Conversion, LLC in December 2018 and heavy-duty rotating electrical products, which were added

with our January 2019 acquisition of Dixie Electric, Ltd.

The automotive aftermarket is divided into two markets.

The first is the do-it-yourself (“DIY”) market, which is generally serviced by the

large retail chain outlets and on-line resellers.

Consumers who purchase parts from the DIY market generally install parts into their vehicles themselves.

In most cases, this is a less expensive alternative than having the repair performed by a

professional installer.

The second is the professional installer market, commonly known as the do-it-for-me (“DIFM”) market.

The first is the do-it-yourself (“DIY”) market, which is generally serviced by the large retail chain outlets and on-line resellers.

Consumers who purchase

parts from the DIY market generally install parts into their vehicles themselves.

In most cases, this is a less expensive alternative than having the repair performed by a professional installer.

The second is the professional installer market,

commonly known as the do-it-for-me (“DIFM”) market.

Traditional warehouse distributors, dealer networks, and commercial divisions of retail chains service this market.

Generally, the consumer in this market is a professional parts installer.

Our products are distributed to both the DIY and DIFM markets.

The distinction between these two markets has become

less defined over the years, as retail outlets leverage their distribution strength and store locations to attract customers.

Our non-discretionary automotive aftermarket replacement parts for heavy-duty truck, industrial, marine, and agricultural applications, which have some overlap with the automotive aftermarket, are also sold via specialty distribution channels

through OES, fleet, and auto electric outlets.

In addition to our hard parts business, our position within the test solutions and diagnostic equipment market is particularly promising.

We are focused on expanding our test solutions and diagnostic equipment for performance, endurance, and production of multiple components in the electric power train – providing simulation,

emulation, and production applications for the electrification of both automotive and aerospace industries, including electric vehicle charging systems.

We have expanded our test solutions and diagnostic

equipment applications for combustion engine vehicles, including bench top testers for alternators and starters, and offer test solutions and diagnostic equipment for the pre- and post-production of electric vehicles, as well as software

emulation of power systems applications for the electrification of all forms of transportation, including automobiles, trucks and the emerging electrification of systems with the aerospace industry including electric vehicle charging systems.

The global automotive component and powertrain test solutions and diagnostic equipment market represents a multi-billion-dollar market, and solidly establishes our growth for today and the future, as electrification

becomes increasingly important around the world.

products are distributed to both the DIY and DIFM markets.

The distinction between these two markets has become less defined over the years, as retail outlets leverage their distribution strength and store locations to attract customers.

D emand for replacement parts generally increases with the age of vehicles and miles driven, which provides favorable opportunities for sales of our products.

population of light-duty vehicles in the U.S.

is approximately 285 million, and the average age of these vehicles is approximately 12 years and is expected to continue to grow, in particular during recession years.

Although miles driven can

fluctuate for various reasons, including fuel prices, they have been generally increasing for several years.

In addition, we operate in the $11 billion-plus rapidly emerging global market for automotive test solutions and diagnostic equipment and see the opportunity for accelerating growth rates for today and the future as

electrification becomes increasingly important around the world.

We also operate in the $700 million market for medium and heavy-duty automotive aftermarket replacement parts for truck, industrial, marine, and agricultural applications.

Growth Strategies and Key Initiatives

As noted above, we have a multi-pronged growth strategy:

first, we are focused on growing our aftermarket hard parts business in the North American marketplace;

second, we are focused on growing our leadership

position in test solutions and diagnostic equipment by providing innovative and intuitive solutions to our customers;

and third, we are focused on growing our electric vehicle testing business servicing original equipment manufacturers for

automotive and aerospace applications on a global basis.

With a scalable infrastructure and abundant growth opportunities, we are focused on growing our aftermarket business in the North American marketplace and growing our leadership position in the test solutions and

diagnostic equipment market by providing innovative and intuitive solutions to our customers.

To accomplish our strategic vision, we are focused on the following key initiatives:

Grow our current product lines both with existing and potential new customers.

We continue to develop and offer current and new sales programs to ensure that we are supporting our customers’ businesses.

We remain dedicated to managing growth and continuing to focus on enhancements to our

infrastructure and making investments in resources to support our customers.

We have globally positioned manufacturing and distribution centers to support our continuous growth.

We continue to develop and offer current and new sales programs to ensure that we are

supporting our customers’ businesses.

We remain dedicated to managing growth and continuing to focus on enhancements to our infrastructure and making investments in resources to support our customers.

We have globally positioned

manufacturing and distribution centers to support our continuous growth.

Introduction of new product lines.

We continue to strive

to expand our business by exploring new product lines, including working with our customers to identify potential new product opportunities.

We continue to strive to expand our business by exploring new product lines, including working with our customers to identify potential

new product opportunities.

Creating value for our customers.

A core part of our strategy is ensuring that we add meaningful value for our customers.

We consistently support and pilot our customers’ supply management initiatives in addition to providing demand

analytics, inventory management services, online training guides, and market share and retail store layout information to our customers.

consistently support and pilot our customers’ supply management initiatives in addition to providing demand analytics, inventory management services, online training guides, and market share and retail store layout information to our

Technological innovation.

We continue to expand our

research and development teams as we further develop in-house technologies and advanced testing methods.

This elevated level of technology aims to deliver our customers high quality products and support services.

We continue to expand our research and development teams as we further develop in-house technologies and advanced testing methods.

This elevated

level of technology aims to deliver our customers high quality products and support services.

Test Solutions and Diagnostic Equipment

Rotating Electrical

We provide industry-leading test solutions and diagnostic equipment to both original equipment manufacturers

and the aftermarket.

We are continuously upgrading our equipment to accommodate testing for the latest alternator and starter technology for both existing and new customers.

software and hardware upgrades are also available for existing products that the customer is using.

In addition, we provide industry leading maintenance and service support for our test solutions and diagnostic equipment to provide a

better end-user experience and value to our customers.

Electric Vehicle and Aerospace

We provide industry-leading test solutions and diagnostic equipment to both original equipment manufacturers and the aftermarket.

We are continuously upgrading our

equipment to accommodate testing for the latest alternator and starter technology for both existing and new customers.

These software and hardware upgrades are also available for existing products that the customer is using.

In addition, we

provide industry leading maintenance and service support for our test solutions and diagnostic equipment to provide a better end-user experience and value to our customers.

Market and grow our new product lines on a global basis.

We offer products and services that cater to automotive test solutions and diagnostic equipment for inverter and electric motors for both development and production.

In addition, we provide power supply hardware and

emulation software diagnostic products.

Our strategy is to market these products on a global basis to original equipment manufacturers as well as suppliers to the original equipment manufacturers for development and production of electric

vehicles and electric vehicle charging systems.

We believe this is a rapidly emerging business, and see the opportunity for accelerating growth rates.

In addition, we are well-positioned to supply test solutions and diagnostic equipment

to the aerospace industry to support its shift to electric power driven control systems in airplanes.

We offer products and services that cater to automotive test solutions and diagnostic

equipment for inverter and electric motors for both development and production.

In addition, we provide power supply hardware and emulation software diagnostic products.

Our strategy is to market these products on a global basis to

original equipment manufacturers as well as suppliers to the original equipment manufacturers for development and production of electric vehicles and electric vehicle charging systems.

We believe this is a rapidly emerging business, and

see the opportunity for accelerating growth rates.

In addition, we are well-positioned to supply test solutions and diagnostic equipment to the aerospace industry to support its shift to electric power driven control systems in airplanes.

Market and grow our innovative design solutions and commitment to quality.

We continue to develop and improve product performance, ease of

installation or coverage simplification to deliver installation-ready products to provide extended service life and reduced downtime for our existing and new customers.

We carry approximately 37,000 stock keeping units (“SKUs”) to support automotive replacement parts and test solutions and diagnostic equipment.

Our products are sold under our customers’ widely recognized private label brand names and our own

brand names including Quality-Built ® , Pure Energy™, D&V Electronics, Dixie Electric, DelStar ® , and Select Power Source™.

brand names including Quality-Built ® , Pure Energy™, D&V Electronics, Dixie Electric, and DelStar ® .

Our products include:

(i) rotating electrical products such as alternators and

starters, (ii) wheel hub assemblies and bearings, (iii) brake-related products, which include brake calipers, brake boosters, brake rotors, brake pads, and brake master cylinders, and (iv) other products, which include (a) turbochargers and (b)

test solutions and diagnostic equipment used for electric vehicle powertrain development and manufacturing including electric motor test systems, e-axle test systems, advanced power emulators, charging unit test systems, test systems for

alternators and starters, belt starter generators, bench-top testers, and specialized test services for electric vehicle inverters.

(i) rotating electrical products such as alternators and starters, (ii) wheel hub assemblies and bearings, (iii) brake-related products, which include brake calipers, brake boosters,

brake rotors, brake pads, and brake master cylinders, (iv) turbochargers, (v) test solutions and diagnostic equipment products, and (vi) heavy-duty products.

Segment Reporting

Pursuant to the guidance provided under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for segment reporting, we have identified our chief operating decision maker

(“CODM”), reviewed the documents used by the CODM, and understand how such documents are used by the CODM to make financial and operating decisions.

We have determined through this review process that our business comprises three separate operating

All of the operating segments meet all the aggregation criteria, and are aggregated.

Our three operating segments are as follows:

Hard Parts , including (i) light duty rotating electric products such as alternators and starters, (ii) wheel hub products, (iii) brake-related products, including brake calipers, brake boosters,

brake rotors, brake pads and brake master cylinders, and (iv) turbochargers,

Test Solutions and Diagnostic Equipment , including (i) applications for combustion engine vehicles, including bench top testers for alternators and starters, (ii) test solutions and diagnostic

equipment for the pre- and post-production of electric vehicles, (iii) software emulation of power systems applications for the electrification of all forms of transportation (including automobiles, trucks and the emerging electrification

of systems within the aerospace industry, such as electric vehicle charging stations), and

Heavy Duty , including non-discretionary automotive aftermarket replacement hard parts for heavy-duty truck, industrial, marine, and agricultural applications.

Prior to the fourth quarter of fiscal 2023, our operating segments met the aggregation criteria and were aggregated.

Effective as of the fourth quarter of fiscal 2023, we revised our segment reporting as we determined

that our three operating segments no longer met the criteria to be aggregated.

Our Hard Parts operating segment meets the criteria of a reportable segment.

The Test Solutions and Diagnostic Equipment and Heavy Duty segments are not material, are

not separately reportable, and are included within the “all other” category.

See Note 19 of the notes to consolidated financial statements for more information.

Sales, Marketing and Distribution

We sell our products to the largest automotive chains, including Advance (inclusive of Carquest, Autopart International, and Worldpac), AutoZone, Genuine Parts (NAPA), and O’Reilly with an aggregate of approximately 25,000 retail outlets.

addition, our products are sold to OES customers, professional installers, and a diverse group of automotive warehouse distributors.

We also sell test solutions and diagnostic equipment via direct and indirect sales channels, technical conferences,

and trade shows to some of the world’s leading automotive companies, and to the aerospace/aviation sector.

We also offer testing services at our technical center located in Detroit, Michigan.

During fiscal 2022, we sold approximately 99% of our

products in North America, with approximately 1% of our products sold in Asian and European countries.

We publish printed and electronic catalogs with part numbers and applications for our hard parts products along with a detailed technical glossary and informational database.

In addition, we publish printed and electronic product and service

brochures and data sheets for our test solutions and diagnostic equipment and service offerings.

We sell our hard parts products to the largest automotive chains, including Advance (inclusive of Carquest, Autopart International, and Worldpac), AutoZone, Genuine Parts (NAPA), and O’Reilly with an aggregate of approximately 26,000 retail

In addition, these products are sold to warranty replacement programs (“OES”) customers, professional installers, and a diverse group of automotive warehouse distributors.

Our heavy-duty products, which have some overlap with the

light-duty automotive aftermarket, are also sold via specialty distribution channels through OES, fleet, and auto electric outlets.

We also sell test solutions and diagnostic equipment to the automotive chains listed above and via direct and

indirect sales channels, technical conferences, and trade shows to some of the world’s leading automotive companies, and to the aerospace/aviation sector.

We offer testing services at our technical center located in Detroit, Michigan.

During fiscal

2023, we sold approximately 98% of our products in North America, with approximately 2% of our products sold in Asian and European countries.

We publish printed and electronic catalogs with part numbers and applications for our products along with a detailed technical glossary and informational database.

In addition, we publish printed and electronic product and service brochures and

data sheets for our test solutions and diagnostic equipment and service offerings.

We believe that we maintain one of the most extensive catalog and product identification systems available to the market.

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Customer Concentration .

While we continually seek to diversify our customer

base, we currently derive, and have historically derived, a substantial portion of our sales from a small number of large customers.

Sales to our three largest customers in the aggregate represented 85%, 87%, and 84%, and sales to our largest

customer, AutoZone, represented 38%, 42%, and 38% of our net sales during fiscal 2022, 2021 and 2020, respectively.

Any meaningful reduction in the level of sales to any of these customers, deterioration of the financial condition of any of these

customers or the loss of any of these customers could have a materially adverse impact on our business, results of operations, and financial condition.

While we continually seek to diversify our customer base, we currently derive, and have historically derived, a substantial portion of our sales from a small number of

large customers.

Sales to our three largest customers in the aggregate represented 84%, 85%, and 87%, and sales to our largest customer, represented 37%, 38%, and 42% of our net sales during fiscal 2023, 2022 and 2021, respectively.

Any meaningful

reduction in the level of sales to any of these customers, deterioration of the financial condition of any of these customers or the loss of any of these customers could have a materially adverse impact on our business, results of operations, and

financial condition.

Customer Arrangements;

Impact on Working Capital .

We have various length agreements

with our customers.

Under these agreements, which in most cases have initial terms of at least four years, we are designated as the exclusive or primary supplier for specified categories of our products.

Because of the very competitive nature of

the market and the limited number of customers for these products, our customers have sought and obtained price concessions, significant marketing allowances and more favorable delivery and payment terms in consideration for our designation as a

customer’s exclusive or primary supplier.

We have various length agreements with our customers.

Under these agreements, which in most cases have initial terms of at least four years, we are

designated as the exclusive or primary supplier for specified categories of our products.

Because of the very competitive nature of the market and the limited number of customers for these products, our customers have sought and obtained price

concessions, significant marketing allowances and more favorable delivery and payment terms in consideration for our designation as a customer’s exclusive or primary supplier.

These incentives differ from contract to contract and can include:

(i) the purchase of Remanufactured Core inventory on customer shelves, (ii) the issuance of a specified amount of credits against

receivables in accordance with a schedule set forth in the relevant contract, (iii) support for a particular customer’s research or marketing efforts provided on a scheduled basis, (iv) discounts granted in connection with each individual

shipment of product, and (v) store expansion or product development support.

These contracts typically require that we meet ongoing performance standards.

the purchase of Remanufactured Core inventory on customer shelves, (ii) the issuance of a specified amount of credits against receivables in accordance with a schedule set forth in the relevant contract, (iii) support for a particular customer’s

research or marketing efforts provided on a scheduled basis, (iv) discounts granted in connection with each individual shipment of product, and (v) store expansion or product development support.

These contracts typically require that we meet

ongoing performance standards.

While these longer-term agreements strengthen our customer relationships, the increased demand for our products often requires that we increase our inventories and personnel.

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Production Process for Non-discretionary Replacement Parts.

The majority of our

products are remanufactured at our facilities in Mexico, Canada, and to a lesser extent in Malaysia.

We continue to maintain production of certain remanufactured units that require specialized service and/or rapid turnaround in our Torrance,

California facility.

The majority of our products are remanufactured at our facilities in Mexico, Canada, and to a lesser extent in Malaysia.

We continue to maintain

production of certain remanufactured units that require specialized service at our Torrance, California facility.

We also manufacture and assemble new products at our facilities in Malaysia and India.

Our remanufacturing process begins with the receipt of Used Cores from our customers or core brokers.

The Used Cores are evaluated for

inventory control purposes and then sorted by part number.

Our remanufacturing process begins with the

receipt of Used Cores from our customers or core brokers.

The Used Cores are evaluated for inventory control purposes and then sorted by part number.

Each Used Core is completely disassembled into its fundamental components.

The components are cleaned in an environmentally sound process that employs customized equipment and cleaning

materials in accordance with the required specifications of the particular component.

All components known to be subject to major wear and those components determined not to be reusable or repairable are replaced by new components.

The components are

cleaned in an environmentally sound process that employs customized equipment and cleaning materials in accordance with the required specifications of the particular component.

All components known to be subject to major wear and those components

determined not to be reusable or repairable are replaced by new components.

Non-salvageable components of the Used Core are sold as scrap.

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inventory movement through the remanufacturing process.

This lean manufacturing process has been fully implemented at our existing production facilities and we expect to implement this process at our recently acquired facilities.

This manufacturing

enables us to significantly reduce the time it takes to produce a finished product.

We continue to explore opportunities for improving efficiencies in our remanufacturing process.

This manufacturing enables us to significantly reduce the time it takes to produce a finished product.

We continue to explore opportunities for improving efficiencies in our remanufacturing

Production Process for Test Solutions and Diagnostic Equipment.

Our test solutions and

diagnostic equipment are engineered and manufactured in North America at facilities in Toronto, Canada and Binghamton, New York, U.S.

Our facility in Canada is certified under ISO 9001:2015 quality management system, which mandates that we foster

continuous improvement to our manufacturing processes.

Materials for custom systems are purchased in a “just-in-time” environment while materials for standard systems are purchased in economic quantities.

All materials and components are

inspected and tested when required.

Certain components require certificates of compliance or test results from our vendors prior to shipping to us.

Our manufacturing process combines skilled labor from certified and licensed technicians with raw

materials, manufactured components, purchased components, and purchased capital components to complete our test solutions and diagnostic equipment.

All test solutions and diagnostic equipment are inspected and tested per our quality control

program, which has been approved by the ISO 9001:2015 quality management system.

Our test solutions and diagnostic equipment are engineered and manufactured in North America at facilities in Toronto, Canada and

Binghamton, New York, U.S.

Our facility in Canada is certified under ISO 9001:2015 quality management system, which mandates that we foster continuous improvement to our manufacturing processes.

Materials for custom systems are purchased in a

“just-in-time” environment while materials for standard systems are purchased in economic quantities.

All materials and components are inspected and tested when required.

Certain components require certificates of compliance or test results from

our vendors prior to shipping to us.

Our manufacturing process combines skilled labor from certified and licensed technicians with raw materials, manufactured components, purchased components, and purchased capital components to complete our test

solutions and diagnostic equipment.

All test solutions and diagnostic equipment are inspected and tested per our quality control program, which has been approved by the ISO 9001:2015 quality management system.

Our facility in New York, U.S., manufactures test solutions and diagnostic equipment using purchased electronic and custom components that are primarily assembled at this facility.

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Final inspection and acceptance testing are performed to predefined procedures prior to the equipment being packaged in a crate for shipment.

The majority of our Used Cores are obtained from customers through the

core exchange programs.

The majority of our Used Cores are obtained from customers through the core exchange programs.

To supplement Used Cores received from our customers we purchase Used Cores from core brokers.

Although this is not a primary source of Used Cores, it is a critical source for meeting our raw material demands.

Remanufacturing consumes, on average, more than one Used Core for each remanufactured unit produced since not all Used Cores are reusable.

Remanufacturing consumes, on average, more than one Used Core for each remanufactured unit produced since not all Used Cores are

The yield rates depend upon both the product and customer specifications.

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Purchased Finished Goods .

In addition to our remanufactured goods, we also purchase

finished goods from various approved suppliers, including several located in Asia.

We perform supplier qualification, product inspection and testing according to our IATF 16949 or ISO 9001:2015 certified quality systems to assure product quality

In addition to our remanufactured goods, we also purchase finished goods from various approved suppliers, including several located in Asia.

We perform supplier qualification,

product inspection and testing according to our IATF 16949 or ISO 9001:2015 certified quality systems to assure product quality levels.

We also perform periodic site audits of our suppliers’ manufacturing facilities.

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Our Company was founded in 1968 on the values of integrity, common decency and respect for others.

Our core values are Excellence, Passion/Productivity, Innovation/Integrity, Community and Quality (“EPICQ”) and characterize

our daily corporate focus.

These values are embodied in our Code of Ethics, which has been adopted by our Board of Directors to serve as a statement of principles to guide our decision-making and reinforce our commitment to these values in all

aspects of our business.

We believe that our commitment to our Company, our employees and the communities within which we operate has led to high employee satisfaction and low employee turnover, and our commitment to our customers, suppliers and

business partners has resulted in high customer satisfaction, as evidenced by the customer awards that we routinely win, and decades-long customer relationships.

Our core values are Excellence,

Passion/Productivity, Innovation/Integrity, Community, and Quality (“EPICQ”) and characterize our daily corporate focus.

These values are embodied in our Code of Ethics, which has been adopted by our Board of Directors to serve as a statement of

principles to guide our decision-making and reinforce our commitment to these values in all aspects of our business.

We believe that our commitment to our Company, our employees and the communities within which we operate has led to high employee

satisfaction and low employee turnover, and our commitment to our customers, suppliers and business partners has resulted in high customer satisfaction, as evidenced by the customer awards that we routinely win, and decades-long customer

relationships.

Environmental.

Environmental and sustainable processes have been

our hallmark since the Company’s establishment.

Environmental and sustainable processes have been our hallmark since the Company’s establishment.

We take our commitment to environmental stewardship seriously.

The use of Remanufactured Cores results in a substantial reduction of raw materials and energy consumption.

With the potential to

significantly reduce material and energy consumption, industry sources believe that remanufacturing is the most efficient and sustainable process for producing aftermarket replacement parts – making our business practices green by nature.

more information on this at investors.motorcarparts.com/esg .

Highlights of our eco-friendly remanufacturing processes include:

of Remanufactured Cores results in a substantial reduction of raw materials and energy consumption.

With the potential to significantly reduce material and energy consumption, industry sources believe that remanufacturing is the most efficient and

sustainable process for producing aftermarket replacement parts – making our business practices green by nature.

See more information on this at investors.motorcarparts.com/esg .

Highlights of our

eco-friendly remanufacturing processes include:

sorting the Used Cores returned by customers utilizing an innovative and efficient core-sorting process;

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Human Capital.

We regard our team members as integral to our

strategic growth and success.

We recognize that safety, inclusion, and offering exciting opportunities are fundamental to facilitating high retention and satisfaction of high performance team members.

Equally important, we provide competitive

compensation and excellent benefit programs, and support numerous programs that build connections between our team members and their communities.

We believe our team members share our corporate ethics and values, as demonstrated in their daily

interactions with customers, co-workers, vendors, and the public at large.

We regard our team members as integral to our strategic growth and success.

We recognize that safety, inclusion, and offering exciting opportunities are fundamental to

facilitating high retention and satisfaction of high performance team members.

Equally important, we provide competitive compensation and excellent benefit programs, and support numerous programs that build connections between our team members and

their communities.

We believe our team members share our corporate ethics and values, as demonstrated in their daily interactions with customers, co-workers, vendors, and the public at large.

As of March 31, 2023, we employed approximately 5,600 people, with 400 people in the United States, 4,800 people in Mexico, 200 people Canada, and 200 people in Malaysia and China.

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Inclusion and Diversity .

Our board is ethnically diverse and

comprised of 10 independent directors, including three women.

We believe an inclusive workforce is critical to our success, with an ongoing focus on the hiring, retention, and advancement of women and other underrepresented ethnic groups.

Company employs 37% women and 63% men globally.

Our board is ethnically diverse and comprised of 9 independent directors, including three women.

We believe an inclusive workforce is critical to our success,

with an ongoing focus on the hiring, retention, and advancement of women and other underrepresented ethnic groups.

We employ 38% women and 62% men globally.

In the United States, 76% of our workforce are considered ethnic minorities.

Health, Safety and Wellness .

The success of our business is

connected to the safety and well-being of our team members and their families.

We provide our employees and their families with flexible and convenient health and wellness programs – including protection and security to lessen concerns about

missing work and the potential financial impact.

Our programs are intended to support the physical and mental well-being with the tools and resources for employees to improve or maintain their health, and we encourage engagement in healthy

behaviors for team members and their families.

In response to the COVID-19 pandemic, we implemented numerous changes in the interest of our team members.

All of these changes meet and/or exceed Centers for Disease Control, World Health Organization, and other government regulations.

programs involve providing employees with flexible working arrangements – including, where appropriate, the ability to work from home, and the implementation of numerous safety policies and practices at all of our facilities.

Please see the discussion in Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in Item 1A “Risk Factors” for further information regarding the COVID-19 pandemic.

The success of our business is connected to the safety and well-being of our team members and their families.

We provide our employees and their families

with flexible and convenient health and wellness programs – including protection and security to lessen concerns about missing work and the potential financial impact.

Our programs are intended to support the physical and mental well-being with

the tools and resources for employees to improve or maintain their health, and we encourage engagement in healthy behaviors for team members and their families.

Compensation and benefits .

We provide competitive compensation and

benefit programs that meet the needs of our employees, and are tailored to their local markets.

In addition to wages and salaries, these programs may include annual cash bonuses, stock awards, a 401(k) Plan, healthcare, and insurance, and

implemented methodologies to manage performance, provide feedback and develop talent.

We provide competitive compensation and benefit programs that meet the needs of our employees, and are tailored to their local markets.

In addition to wages

and salaries, these programs may include annual cash bonuses, stock awards, a 401(k) Plan, healthcare, and insurance, and implemented methodologies to manage performance, provide feedback and develop talent.

Social Responsibility.

We are firmly committed to social

responsibility.

While safety, respect, and inclusion have always been fundamental to our company, these qualities are more important than ever given the global pandemic and the impact it is having on our employees, family members, and the

community at large.

Medical professionals are onsite or within close proximity to our operations, and management is doing everything possible to address the challenges.

In addition, our socially responsible initiatives include subsidized food

programs for certain employees, donations to community organizations, sponsorship of sport teams and weekend family events, which hopefully, will become possible again as our Company and the world recovers.

In addition, we have plans to launch an Agri-farm organic food and community program in Mexico to enhance our social responsibility practices on a global basis.

We are firmly committed to social responsibility.

While safety, respect, and inclusion have always been fundamental to our company, these qualities are more

important than ever.

Our socially responsible initiatives include subsidized food programs for certain employees, donations to community organizations, sponsorship of sport teams and weekend family events.

In addition, we launched an Agri-farm organic food and community program in Mexico to enhance our social responsibility practices on a global basis.

Information Security and Risk Oversight

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continually evaluate the security environment surrounding the handling and control of our critical data and have instituted additional measures to help protect us from system intrusion or data breaches.

Our Board of Directors appointed the Audit Committee with direct oversight of Company’s:

Our Board of Directors appointed the Audit Committee with direct oversight of our:

(i) information security policies, including periodic assessment of risk of information security breach, training program, significant threat changes and

17 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 1. Business