What changed in this filing

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Item 1. Business

2023-03-16 compared with 2022-03-16 · 21 added, 35 removed, 184 unchanged (23% of the section changed)

3 unchanged sentences

and Holdings’ other direct and indirect subsidiaries.

During the fourth quarter of 2022, we determined that our Aluminum Products business met the held-for-sale and discontinued operations accounting criteria.

Accordingly, the Company has reported the held-for-sale assets and liabilities, the operating results and the cash flows of Aluminum Products in discontinued operations for all periods presented throughout this Annual Report on Form 10-K.

Unless otherwise indicated, amounts and activity in this Annual Report are presented on a continuing operations basis.

See Note 4, “Discontinued Operations,” in the Notes to Consolidated Financial Statements for further information.

On December 30, 2022, we entered into a memorandum of understanding (the “MOU”) with a third party pursuant to which the third party would purchase our Aluminum Products business.

The sale of the Aluminum Products business is subject to the entry into a definitive purchase agreement and other customary conditions.

The Company operates through three reportable segments:

Supply Technologies, Assembly Components and Engineered Products.

As of December 31, 2021, we employed approximately 6,900 people.

Supply Technologies, Assembly Components (which previously included the Aluminum Products business) and Engineered Products.

As of December 31, 2022, we employed approximately 7,100 people, including employees in our Aluminum Products business.

The following table summarizes the key attributes of each of our business segments:

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• Gasoline direct injection systems

• Control arms

• Engine cradles and brackets

• Induction heating and melting systems

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Total Supply Management ™ includes engineering and design support, part usage and cost analysis, supplier selection, quality assurance, bar coding, product packaging and tracking, just-in-time and point-of-use delivery, electronic billing services and ongoing technical support.

We operate more than 60 logistics service centers in the United States, Mexico, Canada, Czech Republic, Puerto Rico, Scotland, Hungary, China, Taiwan, Singapore, India, England, France, Spain, Poland, Malaysia, Northern Ireland and Ireland, as well as production sourcing and support centers in the United States and Asia.

We operate more than 80 logistics service centers in the United States, Mexico, Canada, Czech Republic, Puerto Rico, Scotland, Hungary, China,

Taiwan, Singapore, India, England, France, Spain, Poland, Malaysia, Northern Ireland and Ireland, including production sourcing and support centers in the United States and Asia.

Through our supply chain management programs, we supply more than 280,000 globally-sourced production components, many of which are specialized and customized to meet individual customers’ needs.

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Supply Technologies markets and sells its approach to over 7,500 customers domestically and internationally.

The five largest customers, to which Supply Technologies sells through sole-source contracts to multiple operating divisions or

locations, accounted for approximately 33% and 31% of the sales of Supply Technologies in 2021 and 2020, respectively.

The five largest customers, to which Supply Technologies sells through sole-source contracts to multiple operating divisions or locations, accounted for approximately 35% and 33% of the sales of Supply Technologies in 2022 and 2021, respectively.

The loss of any two or more of its top five customers could have a material adverse effect on the results of operations and financial condition of this segment.

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Assembly Components

Assembly Components manufactures products oriented towards fuel efficiency, reduced emission standards and vehicle electrification.

Assembly Components (which excludes the discontinued Aluminum Products business) manufactures products oriented towards fuel efficiency, reduced emission standards and vehicle electrification.

Assembly Components designs, develops and manufactures:

aluminum products;

highly efficient, high pressure direct fuel injection fuel rails and pipes;

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This engine downsizing increases efficiency, while dramatically decreasing pollution levels.

In addition, our Assembly Components segment operates what we believe is one of the few aluminum component suppliers that have the capability to provide a wide range of high-volume, high-quality products utilizing a broad range of processes including gravity and low pressure permanent mold, die-cast and lost-foam, as well as emerging alternative casting technologies.

We also provide machining to our aluminum products customers.

Assembly Components operates 12 manufacturing facilities and four technical offices in the United States, Mexico, China, the United Kingdom and the Czech Republic.

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Our induction heating and melting business utilizes proprietary technology and specializes in the engineering, construction, service and repair of induction heating and melting systems, primarily for the ferrous and non-ferrous metals, silicon, coatings, forging, foundry, automotive and construction equipment industries.

Our induction heating and melting

systems are engineered and built to customer specifications and are used primarily for melting, heating, and surface hardening of metals and curing of coatings.

Our induction heating and melting systems are engineered and built to customer specifications and are used primarily for melting, heating, and surface hardening of metals and curing of coatings.

Approximately 46% of our induction heating and melting systems’ revenues are derived from the sale of replacement parts and provision of field service, primarily for the installed base of our own products.

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We compete with small-to medium-sized domestic and international equipment manufacturers on the basis of service capability, ability to meet customer specifications, delivery performance and engineering expertise.

We compete domestically and internationally with small-to medium-sized forging and machining businesses on the basis of product quality and precision.

compete domestically and internationally with small-to medium-sized forging and machining businesses on the basis of product quality and precision.

Sales and Marketing

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Supply Technologies is dependent upon the ability of such suppliers to meet stringent quality and performance standards and to conform to delivery schedules.

Assembly Components and Engineered Products purchase substantially all of their raw materials, principally metals and certain component parts incorporated into their products, from third-party suppliers and manufacturers.

Assembly Components and Engineered Products purchase substantially all of their raw materials, principally certain component parts incorporated into their products, from third-party suppliers and manufacturers.

Most raw materials required by Assembly Components and Engineered Products are commodity products available from several domestic suppliers.

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See the discussion of risks associated with raw material supply and costs in Item 1A "Risk Factors".

Management believes that backlog is not a meaningful measure for Supply Technologies, as a majority of Supply Technologies’ customers require just-in-time delivery of production components.

Management believes that Assembly Components’ backlog is not a meaningful measure, as a significant portion of sales are on a release or firm order basis.

backlog of Engineered Products’ orders believed to be firm as of December 31, 2021 was $163.8 million, compared with $135.9 million as of December 31, 2020.

Nearly all of Engineered Products’ backlog as of December 31, 2021 is scheduled to be shipped in 2022.

Compliance with Government Regulations

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We are currently, and may in the future be, required to incur costs relating to the investigation or remediation of property, including property where we have disposed of our waste, and for addressing environmental conditions.

For instance, we have been identified as a potentially responsible party at third-party sites under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or comparable state laws, which provide for strict and, under certain circumstances, joint and several liability.

For instance, we have

been identified as a potentially responsible party at third-party sites under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or comparable state laws, which provide for strict and, under certain circumstances, joint and several liability.

We are participating in the cost of certain clean-up efforts at several of these sites.

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Human Capital Resources

As of December 31, 2021, we employed approximately 6,900 employees in our operations around the world.

As of December 31, 2022, we employed approximately 7,100 employees, including our Aluminum Products business, in our operations around the world.

Approximately 3,400 of these employees are in the United States, while the remaining 3,700 are employed in other countries.

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The Company’s objectives include a focus on regulatory compliance and protection of people and the environment.

Our safety focus is evident in our response to the COVID-19 pandemic, which included some of the initiatives listed below:

• Increasing cleaning protocols across all locations

• Communicating regularly regarding impacts of the COVID-19 pandemic, including health and safety protocols and procedures

• Implementing temperature screening of employees at our facilities

• Establishing new physical distancing procedures

• Providing personal protective equipment

• Modifying workspaces with plexiglass dividers

• Establishing protocols to address actual and suspected COVID-19 cases and potential contact exposure

• Prohibiting non-essential travel for all employees

• Requiring mask wearing in locations

Most of our businesses manufacture products deemed essential to the critical infrastructure, and, as a result, most of our production sites have continued to operate during the COVID-19 pandemic.

Ethics & Compliance :

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Fogarty 61 Vice President and Chief Financial Officer

Vilsack 61 Secretary and Chief Legal Officer

Vilsack 62 Chief Legal and Administrative Officer, Corporate Secretary

Crawford was elected President in 2019 and Chairman of the Board and Chief Executive Officer in 2018.

Prior to that, he served as President and Chief Operating Officer since 2003.

Prior to that, he served as President and Chief Operating Officer from 2003 to 2018.

Crawford became one of our directors in August 1997 and has served as President of Crawford Group, Inc.

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Fogarty was Director of Corporate Development since 1997 and served as Director of Finance from 1995 to 1997.

Vilsack has been Secretary and Chief Legal Officer since joining us in 2002.

Vilsack has been Secretary and Chief Legal Officer since joining us in 2002 and has served as Chief Administration Officer since 2020.

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