Item 1A. Risk Factors
Item 1A. Risk Factors
We have amended the following Risk Factor that appeared in Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended June 30, 2021. This amended Risk Factor should be considered along with the other Risk Factors that appeared in our Annual Report for the fiscal year ended June 30, 2021. Except as set forth below, there have been no material changes to the risk factors involving us from those previously disclosed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2021.
The COVID-19 pandemic has adversely affected our business and operations.
The COVID-19 pandemic has adversely affected our business and operations and the business and operations of our customers. We have experienced unpredictable reductions in demand for our services. In response to the COVID-19 pandemic, companies within the oil and natural gas and other industries (including our customers) have announced spending cuts and/or project delays which, in turn, have resulted in decreased awards of new contracts or adjustments, reductions, suspensions or cancellations of existing contracts. Such continued delays have impacted our business, results of operations and financial condition.
The ongoing pandemic has also resulted in disruptions to labor and global supply chains, which have led to labor shortages and higher prices for some of the materials we need to run our business, including, but not limited to, structural steel, steel piping, rebar, valves, copper, and delivery freight. We have been proactive with managing our workforce and procurement processes to help reduce the impacts of labor shortages and rising materials prices on our business and to help ensure we continue to have the labor and materials we need available. However, rising prices and the potential for labor and materials shortages have created additional risk into bidding and executing work profitably.
We continue to monitor the potential for regulation requiring our employees to get vaccinated and/or tested frequently for COVID-19. No such regulation is in place at this time, but we have prepared for the possibility that we must comply with such regulation. It is not possible to predict with certainty the exact impact that such regulation would have on us or on our workforce. However, vaccine and testing mandates could result in employee attrition and difficulty securing future labor needs which could have an adverse effect on our business, results of operations and/or cash flows.
The duration of the COVID-19 pandemic and its economic consequences are uncertain, rapidly changing and difficult to predict. While we expect the COVID-19 pandemic to continue to have an adverse effect on our business, financial condition, liquidity, cash flow and results of operations, we are unable to predict the nature, timing and extent of these impacts at this time.
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