What changed in this filing

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Item 1A. Risk Factors

2025-03-06 compared with 2024-03-01 · 114 added, 80 removed, 243 unchanged (44% of the section changed)

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As more fully described in “Insurance and Bonding” under “Item 1.

Business,” we are generally required to post bonds in connection with government and certain private sector contracts to ensure job completion.

We have entered into bonding agreements with two large multinational surety companies, which act as surety, issue bid bonds, performance bonds and payment bonds, and obligate themselves upon other contracts of guaranty required by us in the day-to-day operations of our business.

Business,” we are generally required to post bonds or other security in connection with government and certain private sector contracts to ensure job completion.

We have entered into bonding agreements with several large multinational surety companies, which act as surety, issue bid bonds, performance bonds and payment bonds, and obligate themselves upon other contracts of guaranty required by us in the day-to-day operations of our business.

However, our sureties are not obligated under the bonding agreements to issue bonds for us, and bonding decisions are made on a case-by-case basis.

We are currently near our bonding capacity limits and may not be able to maintain a sufficient level of bonding capacity in the future, which could preclude us from being able to bid for certain contracts and successfully contract with certain customers, or cause us to have to increase our letter of credit utilization in lieu of bonds, thereby reducing available borrowing capacity under our Credit Agreement (as defined below, in Risk Factors Relating to Our Indebtedness).

We are bidding on increasingly complex, larger jobs for customers who require significant bonds.

While we had approximately $500 million of available bonding capacity as of December 31, 2024, we may not be able to maintain a sufficient level of bonding capacity in the future which could preclude us from being able to bid for certain contracts and successfully contract with certain customers.

In addition, the conditions of the bonding market may change, increasing our costs of bonding or restricting our ability to get new bonding, which could have a material adverse effect on our business, operating results and financial condition.

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Reduced levels of, or delays in, government funding cause delays in project lettings and result in intense competition and pricing pressure for such projects.

In addition, government contracts are subject to specific procurement regulations, contract provisions and a variety of regulatory requirements relating to their formation,

administration, performance and accounting.

In addition, government contracts are subject to specific procurement regulations, contract provisions and a variety of regulatory requirements relating to their formation, administration, performance and accounting.

Many of these contracts include express or implied certifications of compliance with applicable laws and contract provisions.

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Repercussions of severe weather conditions could cause significant interruption of projects in process and have safety implications to personnel at those sites.

Our business, operating results and financial condition could be materially and adversely affected if a public health epidemic or pandemic or other contagious outbreak, such as the coronavirus (“COVID-19”) pandemic, interferes with our ability, or that of our employees, contractors, suppliers, customers and other business partners to perform our and their respective responsibilities and obligations relative to the conduct of our business.

Our business, operating results and financial condition could be materially and adversely affected if a public health epidemic or pandemic or other contagious outbreak interferes with our ability, or that of our employees, contractors, suppliers, customers and other business partners to perform our and their respective responsibilities and obligations relative to the conduct of our business.

Terrorist attacks, targeted at ports, marine facilities, shipping or metropolitan areas could affect the markets in which we operate our business and our expectations.

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Demand for our services may decrease due to economic recession or a reduction of demand in end markets of our customers.

Our concrete segment depends on continued growth in population in our geographic market areas in Texas and most recently in Florida to support residential and nonresidential construction.

Our concrete segment depends on continued growth in population in our geographic market areas in Texas and most recently in Florida to support commercial development.

A growing population generates economic growth and expansion.

If the population decreases or slows in growth, it may adversely affect economic growth and ultimately limit the need for residential and nonresidential construction services in the areas we currently perform services.

If the population decreases or slows in growth, it may adversely affect economic growth and ultimately limit the need for construction services in the areas we currently perform services.

Moreover, even when the underlying economic fundamentals that ordinarily drive the level of construction activity are strong, the level of economic activity in such markets may be suppressed during inflationary periods that are accompanied by increasing interest rates.

If the Federal Reserve Board resumes increasing interest rates to respond to re-emerging inflation concerns, our concrete business could see a reduction in demand.

If the Federal Reserve Board resumes increasing interest rates to respond to re-emerging inflation concerns, or otherwise maintains high interest rates, commercial development could slow and our concrete business could see a reduction in demand.

Our marine segment depends on continued investment in and scheduled funding of port and marine infrastructure by federal, state, and local governmental authorities, as well as privately owned companies, which in turn may depend upon demand for marine vessels, including cruise ships and cargo ships, and other port-related activities.

If funding is diverted from port and marine infrastructure, including due to a reduced demand in the vessels to be serviced at those facilities, the demand for services within our marine segment may decrease.

A significant portion of our revenues may be concentrated among a small number of projects.

Due to the nature and timing of large projects, a significant percentage of our revenues in a given period may result from one or two specific contracts, customers or projects.

A reduction or delay in scheduled work or the termination of a contract for a particular project or the loss of a major customer could negatively impact our reputation and could have an adverse effect on our business, our revenue and results of operations.

For example, our portion of work as a dedicated subcontractor for the Pearl Harbor Project for the United States Navy totals $435.4 million, of which approximately $90.5 million was reported as revenue for the year ended December 31, 2023.

The timing and funding of new contracts may result in volatility in our cash flow and profitability.

These factors as well as others that may cause our actual financial results to vary from any publicly disclosed earnings guidance and forecasts are outside of our control.

Our revenues are generated from project-based work.

It is generally very difficult to predict the timing and source of awarded contracts.

The selection of, timing of, or failure to obtain projects, delays in awards of projects, the rebidding or termination of projects due to budget overruns, or the cancellations of projects or delays in completion of contracts could result in the under-utilization of our assets and reduce our cash flows and profitability.

Even if we are awarded contracts, we face additional risks that could affect whether, or when, work will begin.

For example, some of our contracts are subject to financing and other contingencies that may delay or result in termination of projects.

This may make it difficult to match workforce size and equipment location with contract needs.

In some cases, we may be required to bear the cost of a readily available workforce and fleet of equipment that is larger than needed at the time, resulting in unpredictability in our cash flow, expenses and profitability.

If an expected contract award or the related notice to proceed is delayed or not received, we could incur substantial costs without receipt of any corresponding revenues.

Delays by our customers in obtaining required approvals and permits for their infrastructure projects may delay their awarding contracts for those projects and, once awarded, the ability to commence construction under those contracts.

Moreover, construction projects for which our services are contracted may require significant expenditures by us prior to receipt of relevant payments by a customer and may expose us to potential credit risk if such customer should encounter financial difficulties.

Such expenditures could reduce our cash flows and necessitate increased borrowings under our Credit Agreement.

Finally, the winding down or completion of work on significant projects that were active in previous periods will reduce our revenue and earnings if such significant projects have not been replaced in the current period.

From time to time, we may publicly provide earnings or other forms of guidance, which reflect our predictions about future revenue, operating costs and capital structure, among other factors.

Any such predictions may be impacted by these factors as well as others that are beyond our control and might not turn out to be accurate.

Fluctuations in commodity prices or interest rates may affect our customers’ investment decisions and therefore subject us to risks of cancellation, delays in existing work, or changes in the timing and funding of new awards.

Additionally, fluctuations in commodity prices can negatively affect our project costs.

Commodity prices can affect our customers in a number of ways.

For example, for those customers that produce commodity products such as oil, gas, concrete, steel products, fluctuations in price can have a direct effect on their profitability and cash flow and, therefore, their willingness to continue to invest or make new capital investments.

To the extent commodity prices decline or fluctuate and our customers defer new investments or cancel or delay existing projects, the demand for our services decreases, which may have a material adverse impact on the business, financial condition, and results of operations.

Interest rates may affect the cost of financing for our customers’ capital projects and investments.

These increased costs may affect their capacity and willingness to undertake new investments, and may result in the delay or cancellation of projects they would otherwise undertake.

Commodity prices can affect our customers in a number of ways.

For example, for those customers that produce commodity products such as oil, gas, concrete, or steel products, fluctuations in price can have a direct effect on their profitability and cash flow and, therefore, their willingness to continue to invest or make new capital investments.

To the extent commodity prices decline or fluctuate and our customers defer new investments or cancel or delay existing projects, the demand for our services decreases, which may have a material adverse impact on our business, financial condition, and results of operations.

Commodity prices can also strongly affect the costs of projects.

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Rising commodity prices can negatively impact the potential returns on projects that are planned, as well as those in progress, and result in customers deferring new investments or canceling or delaying existing projects.

The short-term nature of the majority of our projects typically

protects us from these potential price increases, however, if we are unable to procure commodities for completion of our projects at estimated prices due to rising commodity prices, our margins may erode on certain in progress or future projects.

The short-term nature of the majority of our projects typically protects us from these potential price increases, however, if we are unable to procure commodities for completion of our projects at estimated prices due to rising commodity prices, our margins may erode on certain in progress or future projects.

Our business depends on good customer relationships and our reputation in both the marine and concrete infrastructure markets, which is developed and maintained by our executives and key project managers.

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If a subcontractor, supplier, or manufacturer fails to provide services, supplies or equipment as required under a contract for any reason, we may be required to source these services, equipment or supplies to other third parties on a delayed basis or on less favorable terms, which could impact contract profitability.

There is a risk that we may have disputes with our subcontractors relating to, among other things, the quality and timeliness of work performed, customer concerns about the subcontractor, or our failure to extend existing task orders or issue new task orders under a contract.

task orders or issue new task orders under a contract.

In addition, faulty workmanship, equipment or materials could impact the overall project, resulting in claims against us for failure to meet required project specifications.

In the current economic environment, third parties may find it difficult to obtain sufficient financing to help fund their operations.

The inability to obtain financing could adversely affect a third party’s ability to provide materials, equipment or services which could have a material adverse impact on our business, financial condition, and results of operations.

In addition, a failure by a third-party subcontractor, supplier or manufacturer to comply with applicable laws, regulations or client requirements could negatively impact our business and, for government clients, could result in fines, penalties, suspension or even debarment being imposed on us, which could have a material adverse impact on our business, financial condition, and results of operations.

We may incur higher costs to acquire, manufacture and maintain equipment necessary for our operations.

We have traditionally owned the majority of the equipment used in our projects, and we do not bid on contracts for which we do not have, or cannot quickly procure, whether through construction, acquisition or lease, the necessary equipment to complete projects.

We do not bid on contracts for which we do not have, or cannot quickly procure, whether through construction, acquisition or lease, the necessary equipment to complete projects.

We are capable of building much of the specialized equipment used in our projects, including dayboats, tenders and dredges.

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Operating hazards can cause personal injury or death, damage to or destruction of property, plant and equipment, environmental damage, performance delays, monetary losses or legal liability.

Our marine segment operates in jurisdictions outside of the U.S.

and we intend to continue expanding our operations to more jurisdictions outside of the U.S.

Our marine segment, which accounted for 65.5%, 55.6% and 45.3% of our contract revenues for the years ended December 31, 2024, 2023 and 2022, respectively, has a significant portion of those operations performed outside of the U.S.

For the years ended December 31, 2024, 2023 and 2022, our international operations generated approximately 7.4%, 5.1% and 0.9% of our contract revenues, respectively.

The Bahamas represented our largest international market outside of the U.S., with our Bahamian operations representing 7.4% of our contract revenues for the year ended December 31, 2024, including 1.8% of our total cash balance at December 31, 2024.

In addition, we intend to expand our operations to other areas

outside the U.S.

in the future.

International operations are subject to a number of risks and uncertainties that could negatively impact our results from operations, including:

● difficulties and cost associated with complying with a wide variety of complex foreign laws, treaties, and regulations;

● uncertainties in or unexpected changes in regulatory environments or tax laws, including with respect to climate change;

● legal uncertainties, timing delays, and expenses associated with tariffs, export licenses, and other trade barriers;

● difficulties enforcing agreements and collecting receivables through foreign legal systems;

● risks associated with failing to comply with the U.S.

Foreign Corrupt Practices Act, as amended, various export laws, and other similar laws applicable to our operations in international markets;

● exchange controls or other limitations on international currency movements, including restrictions on the repatriation of funds to the U.S.

from certain countries;

● sanctions imposed by the U.S.

government that prevent us from engaging in business in certain countries or with certain counter-parties;

● expropriation or nationalization of assets;

● inability to obtain or preserve certain intellectual property rights in the foreign countries in which we operate;

● our inexperience in certain international markets;

● health emergencies or pandemics;

● fluctuations in foreign currency exchange rates;

● political and economic instability;

● wars, rebellions and acts of terrorism.

Our current insurance coverage may not be adequate, and we may not be able to obtain insurance at acceptable rates, or at all.

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Our inability to obtain such insurance coverage at acceptable rates or at all could have a material adverse effect on our business, operating results and financial condition.

Furthermore, due to a variety of factors such as increases in claims and projected significant increases in medical costs, our insurance premiums may increase in the future and we may not be able to obtain similar levels of insurance on reasonable terms, or at all.

Furthermore, due to a variety of factors such as increases in claims, the rise of “nuclear verdicts” in some of the jurisdictions in which we operate and projected significant increases in medical costs, our insurance premiums may increase in the future and we may not be able to obtain similar levels of insurance on reasonable terms, or at all.

Any such inadequacy of, or inability to obtain, insurance coverage at acceptable rates, or at all, could have a material adverse effect on our business, operating results and financial condition.

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If we were to experience insurance claims or costs above our estimates, we might be required to use working capital to satisfy these costs rather than to maintain or expand our operations.

To the extent that we experience a

material increase in the frequency or severity of accidents or workers’ compensation and health claims, or unfavorable developments on existing claims, our operating results and financial condition could be materially and adversely affected.

To the extent that we experience a material increase in the frequency or severity of accidents or workers’ compensation and health claims, or unfavorable developments on existing claims, our operating results and financial condition could be materially and adversely affected.

Our operations are subject to environmental laws and regulations that may expose us to significant costs and liabilities.

Our marine infrastructure construction, salvage, demolition, dredging and dredge material disposal activities are subject to stringent and complex federal, state and local environmental laws and regulations, including those concerning air emissions, water quality, solid waste management, and protection of certain marine and bird species, their habitats, and wetlands.

emissions, water quality, solid waste management, and protection of certain marine and bird species, their habitats, and wetlands.

We may incur substantial costs in order to conduct our operations in compliance with these laws and regulations.

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During downturns in the U.S.

or world economies, the

anticipated port usage in our geographic markets may decline, resulting in less port construction, upgrading and maintenance.

or world economies, the anticipated port usage in our geographic markets may decline, resulting in less port construction, upgrading and maintenance.

As a result, demand for our services could substantially decline for extended periods.

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The United States citizen ownership and control standards require the vessel-owning entity to be at least 75% U.S.

citizen-owned, thus restricting foreign ownership interests in the entities that directly or indirectly own the vessels which we operate.

citizen-owned, thus restricting foreign ownership interests in the entities that directly or indirectly own the vessels we operate.

If we were to seek to sell any portion of our marine segment that owns any of these vessels, we may have fewer potential purchasers, since some potential purchasers might be unable or unwilling to satisfy the foreign ownership restrictions described above;

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As a result, the sales price for that portion of our marine segment may not attain the amount that could be obtained in an unregulated market.

Our marine segment operates in jurisdictions outside of the U.S.

and we intend to expand our operations to more jurisdictions outside of the U.S.

Our marine segment, which accounted for 55.6%, 45.3% and 43.9% of our contract revenues for the years ended December 31, 2023, 2022 and 2021, respectively, has a significant portion of those operations performed outside of the U.S.

For the years ended December 31, 2023, 2022 and 2021, our international operations generated approximately 5.1%, 0.9% and 0.5% of our contract revenues, respectively.

The Bahamas represented our largest international market outside of the U.S., with our Bahamian operations representing 5.1% of our contract revenues for the year ended December 31, 2023, including 11.0% of our total cash balance at December 31, 2023.

In addition, we intend to expand our operations to other areas outside the U.S.

in the future.

International operations are subject to a number of risks and uncertainties that could negatively impact our results from operations, including:

● difficulties and cost associated with complying with a wide variety of complex foreign laws, treaties, and regulations;

● uncertainties in or unexpected changes in regulatory environments or tax laws, including with respect to climate change;

● legal uncertainties, timing delays, and expenses associated with tariffs, export licenses, and other trade barriers;

● difficulties enforcing agreements and collecting receivables through foreign legal systems;

● risks associated with failing to comply with the U.S.

Foreign Corrupt Practices Act, as amended, various export laws, and other similar laws applicable to our operations in international markets;

● exchange controls or other limitations on international currency movements, including restrictions on the repatriation of funds to the U.S.

from certain countries;

● sanctions imposed by the U.S.

government that prevent us from engaging in business in certain countries or with certain counter-parties;

● expropriation or nationalization of assets;

● inability to obtain or preserve certain intellectual property rights in the foreign countries in which we operate;

● our inexperience in certain international markets;

● health emergencies or pandemics;

● fluctuations in foreign currency exchange rates;

● political and economic instability;

● wars, rebellions and acts of terrorism.

Our concrete segment is geographically concentrated in Texas.

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In addition, our operations in Texas may make us more susceptible to natural disasters, including hurricanes, tornadoes and flooding.

A significant portion of our revenues may be concentrated among a small number of projects.

From time to time in any given period, a significant percentage of our revenues may be attributable to a limited number of contracts, customers or projects.

A reduction in scale, a delay in scheduled work, the termination of a material contract, or the loss of a major customer could negatively impact our reputation and could have an adverse effect on our business, our revenue and results of operations.

Furthermore, even if the ultimate amount of our contract revenue attributable to a particular project remains the same, delays in scheduled work may impact the timing of the recognition of our contract revenues and profits.

In addition, in many cases, we work as a subcontractor or among a team of contractors.

Our ability to timely execute on our work is often affected by scheduling changes or contract performance by our co-contractors, all of which are outside of our control.

For example, our Pearl Harbor Project for the United States Navy, our portion of which totals approximately $450.2 million, and our design-build contract for the Grand Bahama Shipyard totaling approximately $120.2 million may concentrate our revenues.

To the extent we are unable to perform our services or experience any delays in the Pearl Harbor Project, the Grand Bahama Shipyard or any other significant project, anticipated revenue or profits associated with that project may not be realized or may otherwise shift into future periods, which may impact the accuracy of our guidance.

The timing and funding of new contracts may result in volatility in our cash flow and profitability.

These factors as well as others that may cause our actual financial results to vary from any publicly disclosed earnings guidance and forecasts are outside of our control.

Our revenues are generated from project-based work.

It is generally very difficult to predict the timing and source of awarded contracts, and the timing of revenue under awarded contracts.

Even if we are awarded contracts, we face additional risks that could affect whether, or when, work will begin.

For example, some of our contracts are subject to financing and other contingencies that may delay or result in termination of projects.

This may make it difficult to match workforce size and equipment location with contract needs.

In some cases, we may be required to bear the cost of a readily available workforce and fleet of equipment that is larger than needed at the time, resulting in unpredictability in our cash

flow, expenses and profitability.

If an expected contract award or the related notice to proceed is delayed or not received, we could incur substantial costs without receipt of any corresponding revenues, or the revenues could appear in periods later than expected.

Delays by our customers in obtaining required approvals and permits for their infrastructure projects may delay their awarding contracts for those projects and once awarded, the ability to commence construction under those contracts.

Such expenditures could reduce our cash flows and necessitate increased borrowings under our Credit Agreement.

In addition, a change in the timing of a construction project may impact future revenue.

If a project is delayed, revenue that we expect to receive may appear in periods later than we initially expected, which may impact the accuracy of our guidance.

From time to time, we may publicly provide earnings or other forms of guidance, which reflect our predictions about future revenue, operating costs and capital structure, among other factors.

Any such predictions may be impacted by these factors as well as others that are beyond our control and might not turn out to be accurate.

We may not be able to enter into contracts associated with our pipeline of opportunities, or realize any revenue associated with our pipeline of opportunities.

As of December 31, 2024, we had a pipeline of opportunities of approximately $16 billion.

We define our pipeline of opportunities as specific projects that we have identified and are tracking as projects of interest.

Our pipeline of opportunities does not represent binding contracts with third parties.

Before we can capitalize on our pipeline of opportunities, we would have to enter into contracts with third parties, or otherwise be selected to perform services, for the particular project identified in our pipeline of opportunities.

We cannot provide any assurance that we will ultimately enter into a contract with a third party or provide services with respect to any particular opportunity.

We may be unable to enter into contracts or perform services associated with an opportunity for a variety of reasons, including being outbid, not having the ability to satisfy customer or contract requirements, resource constraints, or bonding requirements.

Even if we enter into a contract associated with an opportunity, it may be for a contract amount that is lower than the amount we estimated and included in our pipeline.

Furthermore, even if we are ultimately awarded contracts in our pipeline of opportunities, we cannot guarantee that the revenue associated with those projects will be realized, or if realized, will result in positive earnings.

Further, such contracts would become subject to the typical risks associated with our projects, such as execution risk, counter-party risk, delays, cancellations, cost-overruns, weather conditions, natural disasters, health epidemics, and cybersecurity incidents, among others.

We conduct a portion of our operations through joint ventures, exposing us to risks and uncertainties, many of which are outside of our control.

We conduct a portion of our operations through project-specific joint ventures, pursuant to which we jointly bid on and execute projects with other companies in the construction industry.

For example, we are a joint venture partner to Kraemer North America for the Deschutes Estuary Restoration Project.

We may in the future enter into additional joint ventures.

These joint ventures expose us to risks and uncertainties.

Success on joint venture projects depends in part on whether our joint venture partners satisfy their obligations, and we cannot control the actions of our joint venture partners.

Differences in views among joint venture partners may result in delayed decisions or failures to agree on major issues.

If our joint venture partners, or as a result the joint venture, fails to satisfy its obligations, the customer may terminate the project, which could result in legal liability to us, harm to our reputation and reduce our revenues and profit for a project.

If our reputation as a joint venture partner is harmed, it may be difficult for us to enter into new joint venture arrangements which are increasingly required due to the increased size and scale of projects we are bidding on and expect to bid on in the future.

We and our joint venture partners are also generally jointly and severally liable for all liabilities and obligations of the joint venture.

If our partners do not meet their contractual obligations, the joint venture may be unable to adequately

perform and deliver its contracted services, requiring us to make additional investments or perform additional services to the customer.

While we attempt to mitigate that risk through indemnification and subcontractor arrangements, we could ultimately be liable for both our obligations and those of our partners, which may result in reduced profits, significant losses on the project and a negative impact to our cash flows.

In some joint ventures and similar arrangements, we may not be the controlling member.

In these cases, we may have limited control over the actions of the joint venture.

In addition, joint ventures or similar arrangements may not be subject to the same requirements regarding internal controls and internal control over financial reporting that we follow.

To the extent the controlling member makes decisions that negatively impact the joint venture or arrangement or internal control problems arise within the joint venture or arrangement, it could have a material adverse impact on our business, results of operations, cash flows or financial condition.

Risk Factors Relating to Our Employees

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We may be subject to unionization, work stoppages, slowdowns or increased labor costs.

On February 4, 2022, U.S.

On February 4, 2022, former U.S.

President Biden signed Executive Order 14063, which provided that, with certain exceptions, government contractors and subcontractors working on federal construction projects that are estimated to cost the U.S.

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Federal Acquisition Regulatory Council issued a final rule consistent with the executive order, which went into effect on January 22, 2024.

In the event our operations are determined not to satisfy any of the exceptions of the rule or the government otherwise determines that our operations with respect to any future federal project must comply with the rule, then we may be required to enter into project labor agreements which would be disruptive to our operations and could have a material adverse effect on our business, operating results and financial condition.

On January 21, 2025, the United States Court of Federal Claims upheld a challenge to the validity of the final rule.

In the event the rule is ultimately determined by a high court to be valid and our operations are determined not to satisfy any of the exceptions of the rule or the government otherwise determines that our operations with respect to any future federal project must comply with the rule, then we may be required to enter into project labor agreements which would be disruptive to our operations and could have a material adverse effect on our business, operating results and financial condition.

Only a small percentage of our marine segment workforce, located in the Pacific Northwest and Alaska, is currently unionized.

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In addition, we may be subject to disruptions by organized labor groups protesting our non-union status.

Any of these events would be disruptive to our operations and could have a material adverse effect on our business, operating results and financial condition.

Any of these events would be

disruptive to our operations and could have a material adverse effect on our business, operating results and financial condition.

Our employees in the marine segment are covered by federal laws that provide seagoing employees remedies for job-related claims in addition to those provided by state laws.

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Should negative trends persist, we could be negatively impacted in the future.

Our failure to comply with immigration laws could result in significant liabilities, harm our reputation with our customers and disrupt our operations.

If we fail to comply with immigration laws, such failure could result in significant liabilities, harm our reputation with our customers and disrupt our operations.

Although we take steps to verify the employment eligibility status of all of our employees, some of our employees may, without our knowledge, be unauthorized workers.

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Any of these or other events could cause interruptions, delays, loss of critical and/or sensitive data or similar effects, which could have a material adverse impact on our business, financial condition, protection of intellectual property, and results of operations, as well as those of our clients.

In addition, we face the threat to our computer systems of unauthorized access, computer hackers, computer viruses, malicious code, organized cyber-attacks and other security problems and system disruptions, including possible unauthorized access to and disclosure of our and our clients’ proprietary or classified information.

unauthorized access to and disclosure of our and our clients’ proprietary or classified information.

We rely on industry accepted security measures and technology to securely maintain all confidential and proprietary information on our computer systems, but they may still be vulnerable to these threats.

As a result, we may be required to expend significant

resources to protect against the threat of these system disruptions and security breaches or to alleviate problems caused by these disruptions and breaches.

As a result, we may be required to expend significant resources to protect against the threat of these system disruptions and security breaches or to alleviate problems caused by these disruptions and breaches.

Any of these events could damage our reputation and have a material adverse effect on our business, financial condition, results of operations and cash flows.

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We may incur additional indebtedness in the future by issuing debt instruments, under new credit agreements, under joint venture credit agreements, under capital leases or synthetic leases, on a project-finance or other basis or a combination of these.

If we incur additional indebtedness in the future, it likely would be under arrangements that may have terms and conditions at least as restrictive as those contained in our existing Credit Agreement.

If we incur additional indebtedness in the future, it likely would be under arrangements that may have terms and

conditions at least as restrictive as those contained in our existing Credit Agreement.

At December 31, 2024, available capacity to borrow on the revolving lines of credit was $26.7 million.

Failure to comply with the terms and conditions of any existing or future indebtedness, including current or prospective covenants, would constitute an event of default.

event of default occurs, the lenders will have the right to accelerate the maturity of such indebtedness and foreclose upon the collateral, if any, securing that indebtedness.

If an event of default occurs, the lenders will have the right to accelerate the maturity of such indebtedness and foreclose upon the collateral, if any, securing that indebtedness.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

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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