What changed in this filing

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Item 1A. Risk Factors

2023-02-10 compared with 2022-02-11 · 116 added, 127 removed, 184 unchanged (57% of the section changed)

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Manufacturing and Operational Risks

Global public health pandemics, such as the COVID-19 pandemic, have adversely impacted and may continue to adversely impact our business, results of operations and financial condition and the ultimate impact will depend on future developments, which remain uncertain.

Countries around the world have experienced, and may experience in the future, outbreaks of contagious diseases that affect public health.

In March 2020, the World Health Organization declared COVID-19 a global pandemic and governmental authorities around the world implemented shelter-in-place orders, quarantines, social distancing requirements, travel bans and other similar governmental restrictions to reduce the spread of COVID-19.

Although certain restrictions related to the COVID-19 pandemic have eased, uncertainty continues to exist regarding such measures and potential future measures.

Efforts to combat the virus have been complicated by viral variants.

The COVID-19 pandemic has disrupted our operations and is expected to continue to negatively impact our operations in numerous ways.

It has also negatively impacted the global economy, created significant volatility and disruption of financial markets and caused disruptions in our supply chains and logistics.

The rapid increase in demand as the COVID-19 pandemic wanes has caused and is expected to continue to cause significant stress on global supply chains, resulting in parts and components shortages and/or inefficiencies in production.

Current material and component shortages have limited and could continue to limit our ability to meet customer demand.

Additionally, the COVID-19 pandemic adversely affected our workforce, with temporary factory closures, slowdowns, inefficiencies and restrictions on travel and transports, among other effects, thereby negatively impacting our operations.

A significant percentage of global team members continue to work remotely, which can introduce operational and cybersecurity risks.

Because working remotely has become more prevalent and accepted as a result of the COVID-19 pandemic, companies could determine that it will be acceptable for employees to work from their homes on a long-term basis, which could over time reduce demand for our products.

We developed and implemented new health and safety protocols, business continuity plans and different scenario plans in an effort to try to mitigate the negative impact of the COVID-19 pandemic.

Our management continues to remain focused on mitigating the impact of the COVID-19 pandemic, which has required a large investment of time and resources, which may delay other value-add initiatives.

It is not possible to accurately predict with any degree of certainty the impact of the COVID-19 pandemic on our operations going forward as the situation continues to remain fluid.

Despite our efforts and numerous measures taken to manage the impacts of the COVID-19 pandemic, the full degree and extent to which it will ultimately affect our operational and financial performance will depend on uncertain future developments and factors beyond our control, including, but not limited to, the pace of the continued spread of the pandemic, the severity and ultimate duration of the pandemic, including any resurgences, mutations or variants, any governmental regulations or restrictions imposed in response to such, and the ultimate efficacy and distribution speed of approved vaccines and treatments.

We expect that any further or prolonged disruptions to our global supply chain would adversely impact our operations, business results and financial condition.

Such factors could also continue to adversely affect our customers’ financial condition, resulting in further reduced spending for our products and services.

The longer the pandemic continues, the more likely that more of the foregoing risks may be realized.

The impact of the COVID-19 pandemic continues to evolve and its ultimate duration, severity and disruption to our business, customers and supply chain, and the related financial impact to us, cannot be accurately forecasted at this time.

The impact of the COVID-19 pandemic may also continue to exacerbate other risks discussed below in this section Item 1A.

Risk Factors, any of which could have a material effect on us.

This situation continues to evolve and additional impacts may arise that we are not aware of currently.

We operate in a highly competitive industry.

Our industry is highly competitive.

Our competitors include a variety of both domestic and foreign companies in all major markets.

To compete successfully, our products must excel in terms of quality, reliability, productivity, price, features, ease of use, safety and comfort, and we must provide excellent customer service.

The greater financial resources of certain of our competitors may put us at a competitive disadvantage.

Low-cost competition from China and other developing markets could also result in decreased demand for our products.

If competition in our industry intensifies or if our current competitors lower their prices for competing products, we may lose sales or be required to lower the prices we charge for our products.

If we are unable to provide continued technological improvements in our equipment that meet our customers’ expectations, or the industry’s expectations, the demand for our equipment could be substantially adversely affected.

Our ability to match new product offerings to diverse global customers’ anticipated preferences for different types and sizes of equipment and various equipment features and functionality, at affordable prices, is critical to our success.

This requires a thorough understanding of our existing and potential customers on a global basis, particularly in developing markets, including China, India, Latin America, the Middle East and Africa.

Failure to compete effectively could result in lower revenues from our products and services, lower gross margins or cause us to lose market share.

We are dependent upon third-party suppliers, making us vulnerable to supply shortages and price increases.

Changes in the availability and price of certain materials and components have resulted and could continue to result in significant disruptions to the supply chain causing manufacturing inefficiencies, increased costs and lower profits.

We obtain materials and manufactured components from third-party suppliers.

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Delays in our suppliers’ abilities, especially any sole suppliers for a particular business, to provide us with necessary materials and components may delay production at a number of our manufacturing locations, or may require us to seek alternative supply sources.

Delays in obtaining supplies may result from a number of factors affecting our suppliers, including capacity constraints, regulatory changes, freight and container availability, labor disputes, suppliers’ impaired financial condition, suppliers’ allocations to other purchasers, weather emergencies, pandemics or acts of war or terrorism.

Any delay in receiving supplies could impair our ability to deliver products to our customers and, accordingly, could have a material adverse effect on our business, results of operations and financial condition.

Delays in obtaining supplies may result from a number of factors affecting our suppliers, including capacity constraints, regulatory changes, global logistics network challenges and cost increases, labor shortages and disputes, wage increases, rising inflation, suppliers’ impaired financial condition, suppliers’ allocations to other purchasers, weather emergencies, pandemics (such as COVID-19) or acts of war or terrorism.

Global logistics network challenges include shortages of shipping containers, ocean freight capacity constraints, international port delays, trucking and chassis shortages, railway and air freight capacity, rising inflation, wage increases and labor availability constraints, which have resulted in delays, shortages of key manufacturing components, increased order backlogs, and increased transportation costs.

We have experienced, and in the future are likely to experience, significant disruption of the supply of some of our parts, materials, components and final assemblies that we obtain from suppliers or subcontractors.

For example, the rapid increase in demand as the COVID-19 pandemic wanes has caused, and is expected to continue to cause, significant stress on global supply chains.

As economies around the world have reopened in 2021, sharp increases in demand have created significant disruptions to the global supply chain, which have affected our ability to receive goods on a timely basis and at anticipated costs.

We continue to actively monitor and mitigate our supply chain risk, but there can be no assurance that our mitigation plans will be effective.

Any delay or disruptions in receiving supplies have resulted and could further result in manufacturing inefficiencies caused by us having to wait for parts to arrive on production lines, could impair our ability to deliver products to our customers and delay sales, and, accordingly, could have a material adverse effect on our business, results of operations, financial condition and/or cash flows.

Uncertainties related to the continued magnitude and duration of global supply chain disruptions have adversely affected, and may continue to adversely affect, our business and outlook.

Principal materials and components used in our various manufacturing processes include steel, castings, engines, tires, hydraulics, cylinders, drive trains, electric controls and motors, semiconductors, and a variety of other commodities and fabricated or manufactured items.

Increases in input costs and freight due to price inflation and global supply chain disruptions may adversely affect our financial performance.

Additionally, tariffs on certain Chinese origin goods may put pressure on input costs.

Global logistics network challenges include shortages of shipping containers, ocean freight capacity constraints, international port delays, trucking and chassis shortages, railway and air freight capacity, and labor availability constraints, which have resulted in delays, shortages of key manufacturing components, increased order backlogs, and increased transportation costs.

We actively monitor and mitigate supply chain risk, but there can be no assurance that our mitigation plans will be effective to prevent disruptions that may arise from shortages of materials that we use in the production of our products.

Uncertainties related to the magnitude and duration of global supply chain disruptions have adversely affected, and may continue to adversely affect, our business and outlook.

If we are unable to recover a substantial portion of increased costs from our customers and suppliers, or through duty draw-back, our business or results of operations could be adversely affected.

T he cost of these materials, components and final assemblies have varied significantly in past several years and are expected to continue to fluctuate due to demand changes, inflation, geopolitical and economic uncertainty, regulatory and policy instability, the imposition of duties and tariffs (including on certain Chinese origin goods) and trade agreements/barriers, freight availability and costs, wage increases and labor shortages.

In an effort to mitigate this, the Company has increased the prices of its products, recouped tariffs through duty drawback and exclusions, and worked with suppliers to ensure optimum pricing and inventory levels.

However, if customers are unwilling to accept price increases in the Company’s products and the Company is unable to recover a substantial portion of increased costs from our suppliers, or through duty draw-back/exclusions, or otherwise offset the increased costs, then continued or increased fluctuations in costs of materials or inflation generally and continued supply chain challenges could have a material adverse effect on the Company’s results of operation, profitability, free cash flows, and financial condition.

In addition, we purchase material and services from our suppliers on terms extended based on our overall credit rating.

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• trade protection measures and currency exchange controls;

• labor unrest;

• global and regional economic conditions;

• the United Kingdom’s (“U.K.”) departure from the European Union (“E.U.”);

• political instability;

• wage inflation, labor shortages and labor unrest;

• uncertainties and instability in global and regional economic conditions, including changes related to market conditions caused by the COVID-19 pandemic, heightened inflation, potential economic recessions, and significant interest rate fluctuations;

• ongoing political instability and uncertainties, including, but not limited to, the ongoing conflict between Russia and Ukraine, the relationship between China and the U.S.

and other actual or anticipated military or political conflicts;

• terrorist activities and the U.S.

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• natural disasters;

• current and changing tax laws.

• health epidemics or new pandemics;

• changes in tax laws or interpretations, tax rates and tax legislation.

In addition, many of the nations in which we operate have developing legal and economic systems adding greater uncertainty to our operations in those countries than would be expected in North America, Western Europe and certain Asia Pacific markets.

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A material disruption to one of our significant manufacturing plants could adversely affect our ability to generate revenue.

We produce most of our machines for each product type at one manufacturing facility.

If operations at a significant facility were disrupted as a result of equipment failures, natural disasters, health epidemics, work stoppages, power outages or other reasons, our business, financial conditions and results of operations could be adversely affected.

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Any decrease or delay in government funding of highway construction and maintenance, other infrastructure projects and overall government spending could cause our revenues and profits to decrease.

Competition and Strategic Performance Risks

The industry in which we operate is highly competitive, subject to pricing pressure;

if we fail to compete effectively, demand for our products may decrease and our business could suffer.

Our industry is highly competitive.

Our competitors include a variety of both domestic and foreign companies in all major markets.

To compete successfully, our products must excel in terms of quality, reliability, durability, productivity, price, features, ease of use, safety and comfort, and we must provide excellent customer service.

The greater financial resources of certain of our competitors may put us at a competitive disadvantage.

Low-cost competition from China and other developing markets could also result in decreased demand for our products.

If competition in our industry intensifies or if our current competitors lower their prices for competing products, we may lose sales or be required to lower the prices we charge for our products.

One of our strategic initiatives is Innovate, which in part aims at the introduction of new or improved products, technologies and capabilities.

If we are unable to continue to improve existing equipment products and technologies that meet our customers’ expectations, or the industry’s expectations, including, but not limited to electrification options discussed below, the demand for our equipment could be substantially adversely affected.

This requires a thorough understanding of our existing and potential customers on a global basis.

Product development, improvements and introductions also require significant financial and technological resources, talent, research, planning, design, development, engineering and testing at the technological, product and manufacturing process levels.

If competitors’ new products arrive in the market before any of our similar new offerings arrive, or competitors offer more attractive features and functions prior to us, then demand for our equipment could be adversely affected or render our product obsolete.

Any new products that we develop may also not receive market acceptance or otherwise generate meaningful net sales or profits for us relative to our expectations and our investments.

Failure to compete effectively could result in lower revenues from our products and services, lower gross margins or cause us to lose market share.

In response to changes in customer preferences concerning global climate changes and related changes in regulations, we may continue to face greater pressure to develop products that generate less greenhouse gas emissions.

Like many manufacturers, we foresee sales of electric-powered vehicles and mobile equipment becoming increasingly important and we are actively developing and offering more electric powered products, including our all-electric utility bucket truck launched in 2022.

We are at risk of losing competitive advantages if we do not accurately predict, prepare for and respond to customer demands for new innovations with respect to electric-powered vehicles or mobile equipment and other technologies that minimize emissions, or if we are unable to do so on a cost-effective basis.

The timing and amount of benefits from our strategic initiatives may not be as expected and our financial results could be adversely impacted.

Each business in our Company is unique, but all businesses are managed to the “Execute, Innovate, Grow” operating framework.

This is part of our continuing strategy to deliver long-term growth and earnings to our shareholders.

We have made, and continue to make, significant investments in these strategic initiatives.

However, we cannot provide any assurance that we will be able to realize the full anticipated benefits of these initiatives.

Although “Execute, Innovate, Grow” is expected to improve future operating margins and revenue growth, if we are unable to achieve expected benefits from these initiatives or are unable to complete them without material disruption to our businesses, the timing and amount of benefits may not be as expected and could adversely impact the Company’s competitive position, financial condition, profitability and/or cash flows.

We may face limitations on our ability to integrate acquired businesses.

From time to time, we may engage in strategic transactions involving risks, including the possible failure to successfully integrate and realize the expected benefits of such transactions.

We have consummated acquisitions in the past and anticipate making additional acquisitions in the future.

We have consummated multiple acquisitions in the recent past and anticipate making additional acquisitions in the future.

Our ability to realize the anticipated benefits of any purchase, including the expected combination benefits, will depend, to a large extent, on our ability to integrate any acquired businesses.

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• unforeseen difficulties may arise in integrating operations and systems;

• we may fail to retain, motivate and integrate key management and other employees of the acquired business;

• we may fail to attract, retain, motivate and integrate key management and other employees of the acquired business;

• we may experience problems in retaining customers.

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We cannot ensure that any newly acquired companies will operate profitably, that the intended beneficial effect from these acquisitions will be realized and that we will not encounter difficulties in implementing effective internal control processes in these acquired businesses, particularly when the acquired business operates in foreign jurisdictions and/or was privately owned.

Any of the foregoing could adversely affect our business and results of operations.

If we fail to successfully integrate any acquired business, this could have an adverse effect on our business, financial condition and results of operations.

While our evaluation of any potential transaction includes business, legal, compliance and financial due diligence with the goal of identifying and evaluating the material risks involved, these due diligence reviews may not identify all of the issues necessary to accurately estimate the cost and potential risks of a particular acquisition or costs associated with any quality issues with an acquisition target's products or services.

Any of the foregoing could adversely affect our business, financial condition and results of operations.

Financial and General Economy Risks

Our consolidated financial results are reported in U.S.

dollars while certain assets and other reported items are denominated in the currencies of other countries, creating currency exchange and translation risk.

Our Company operates in many areas of the world, involving transactions denominated in a variety of currencies.

We are subject to currency exchange risk to the extent that our costs are denominated in currencies other than those in which the Company earns revenue.

Additionally, the reporting currency for our consolidated financial statements is the U.S.

Certain of our assets, liabilities, expenses, revenues and earnings are denominated in other countries’ currencies, including the Euro, British Pound, Chinese Yuan, Indian Rupee, Australian Dollar and Mexican Peso.

Those assets, liabilities, expenses, revenues and earnings are translated into U.S.

dollars at the applicable foreign exchange rates to prepare our consolidated financial statements.

Therefore, fluctuations in foreign exchange rates between the U.S.

dollar and those other currencies affect the value of those items as reflected in our consolidated financial statements, even if their value remains unchanged in their original currency.

Due to continued volatility of foreign exchange rates to the U.S.

dollar, fluctuations in foreign exchange rates may have an impact on the accuracy of our financial guidance.

Such fluctuations in foreign exchange rates relative to the U.S.

dollar may cause our actual results to differ materially from those anticipated in our guidance and have a material adverse effect on our business or results of operations.

Our business is affected by the cyclical nature of markets we serve.

Demand for our products tends to be cyclical and is affected by the general strength of the economies in which we sell our products, prevailing interest rates, residential and non-residential construction spending, capital expenditure allocations of our customers, the timing of regulatory standard changes, oil and gas related activity and other factors.

As discussed under the risk factor titled, “Global public health pandemics, such as the COVID-19 pandemic, have adversely impacted and may continue to adversely impact our business, results of operations and financial condition and the ultimate impact will depend on future developments, which remain uncertain,” the COVID-19 pandemic negatively impacted the global economy and significantly increased economic and demand uncertainty.

While we are expecting to experience sales growth in 2022, we cannot provide any assurance the global economic weakness of the recent past will not recur.

As discussed under the risk factor titled, “We are dependent upon third-party suppliers, making us vulnerable to supply shortages and price increases,” the supply chain is currently constrained, and if we are not able to receive parts and components on a timely basis and at anticipated costs, we may not achieve the growth we expect in sales or profitability.

If our customers are not successful in generating sufficient revenue or are precluded from securing financing, they may not be able to pay, or may delay payment of, receivables that are owed to us.

Demand for our products tends to be cyclical and is affected by the general strength of the economies in which we sell our products, customers’ perceptions concerning the timing of economic cycles, prevailing interest rates, residential and non-residential construction spending, capital expenditure allocations of our customers, the timing of regulatory standard changes, oil and gas related activity and other factors.

The last several years have been marked by the lingering effects of the COVID-19 pandemic, geopolitical instability, including the conflict between Russia and Ukraine, social concerns, supply chain and freight constraints, labor shortages and wage increases, high inflation, rising interest rates, foreign currency exchange volatility, and concerns of possible recessions, all of which have increased ongoing economic uncertainty and instability in the global markets.

This instability can make it extremely difficult for our customers, our suppliers and us to accurately forecast and plan future business activities.

While we are expecting to experience sales growth in 2023, we cannot provide any assurance that there will not be global economic weakness or a recession based on the above uncertainties.

As discussed under the risk factor titled, “Changes in the availability and price of certain materials and components have resulted and could continue to result in significant disruptions to the supply chain causing manufacturing inefficiencies, increased costs, and lower profits,” the supply chain continues to be constrained and battling labor shortages, wage increases, freight constraints and heightened inflationary pressures.

If we are not able to receive parts and components on a timely basis and at anticipated costs, we may not achieve the growth we expect in sales or profitability.

If our customers are not successful in generating sufficient revenue or are precluded from securing financing or unable to meet higher interest rate payments, they may not be able to pay, or may delay payment of, receivables that are owed to us.

Any inability of current and/or potential customers to pay us for our products will adversely affect our earnings and cash flow.

Our sales depend in part upon our customers’ replacement or repair cycles, which are impacted in part by historical purchase levels.

We are coming through a period during which global economic conditions and key commodity prices rapidly and significantly declined, and if economic conditions in the U.S.

and other key markets do not show continued improvement, we may experience negative impacts to our net sales, financial condition, profitability and cash flows, which could result in the need for us to record impairments.

We have taken a number of steps, and will continually review our operations, to reduce our costs.

There can be no assurance, however, that these steps will mitigate the negative impact of a possible deterioration in economic conditions.

We are in a period marked by high inflation levels, rising interest rates, global economic uncertainty, and if economic conditions in the U.S.

and other key markets do not show continued stability or improvement, we may experience negative impacts to our net sales, financial condition, profitability and cash flows, which could result in the need for us to record impairments.

We have a significant amount of debt outstanding and must comply with restrictive covenants in our debt agreements.

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Our level of debt and the financial and restrictive covenants contained in our credit agreement could have important consequences on our financial position and results of operations, including increasing our vulnerability to increases in interest rates because debt under our credit agreement bears interest at variable rates.

In addition, our credit agreement indebtedness may use LIBOR as a benchmark for establishing our interest rate.

While we expect LIBOR to be available in substantially its current form until at least the end of June 30, 2023, it is possible that LIBOR will become unavailable prior to that point which may impact our interest expense.

Our credit agreement provides for any changes away from LIBOR to a successor rate to be based on prevailing or equivalent standards, however, the replacement of LIBOR may result in fluctuating interest rates that may have a negative impact on our interest expense and our profitability.

Consequences of these developments cannot be entirely predicted, but could include an increase in the cost of our credit agreement indebtedness.

In addition, due to the cessation of the London Interbank Offered Rate (“LIBOR”), we have entered into and may enter into financial transactions such as credit agreements, receivables, derivatives, and notes that use the Secured Overnight Financing Rate (“SOFR”) or the Sterling Overnight Index Average (“SONIA”) as interest rate benchmarks.

SOFR and SONIA are calculated differently from LIBOR and have inherent differences, which could give rise to uncertainties, including the limited historical data and volatility in the benchmark rates.

The full effects of the transition to SOFR, SONIA, or other rates remain uncertain.

We may be unable to generate sufficient cash flow to service our debt obligations and operate our business.

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Our ability to make payments on, and refinance, our debt and fund planned capital expenditures will depend on our ability to generate cash in the future.

To some extent, this is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

To some extent, this is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control, including rising interest rates.

Lower sales, or uncollectible receivables, generally will reduce our cash flow.

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Some of our customers have been unable to obtain the credit they need to buy our equipment.

Rising interest rates could have a dampening effect on the financial condition of some of our customers and their ability to repay credit obligations.

As a result, some of our customers may need to cancel existing orders and some may be compelled to sell their equipment at less than fair value to raise cash, which could have a negative impact on residual values of our equipment.

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An unexpected change in customer financial condition or future economic uncertainty could result in additional requirements for specific reserves, which could have a negative impact on our consolidated financial position.

We are subject to currency fluctuations.

Our products are sold in over 100 countries around the world.

The reporting currency for our consolidated financial statements is the U.S.

Certain of our assets, liabilities, expenses, revenues and earnings are denominated in other countries’ currencies, including the Euro, British Pound, Chinese Yuan, Australian Dollar and Mexican Peso.

Those assets, liabilities, expenses, revenues and earnings are translated into U.S.

dollars at the applicable foreign exchange rates to prepare our consolidated financial statements.

Therefore, increases or decreases in foreign exchange rates between the U.S.

dollar and those other currencies affect the value of those items as reflected in our consolidated financial statements, even if their value remains unchanged in their original currency.

Due to continued volatility of foreign exchange rates to the U.S.

dollar, fluctuations in foreign exchange rates may have an impact on the accuracy of our financial guidance.

Such fluctuations in foreign exchange rates relative to the U.S.

dollar may cause our actual results to differ materially from those anticipated in our guidance and have a material adverse effect on our business or results of operations.

We assess foreign currency risk based on transactional cash flows, identify naturally offsetting positions and purchase hedging instruments to partially offset anticipated exposures.

Despite our efforts to partially hedge our anticipated exposures, currency fluctuations may impact our financial performance in the future.

Human Capital Risks

We rely on key management and skilled labor, and we may be unable to attract and retain qualified team members.

We rely on key management and skilled labor, and we may be unable to attract, develop, engage and retain qualified team members.

We rely on the management and leadership skills of our senior management team, particularly those of the Chief Executive Officer.

The loss of the services of key employees or senior officers, or the inability to identify, hire and retain other highly qualified personnel in the future, could adversely affect the quality and profitability of our business operations.

Our ability to expand or maintain our business depends on our ability to hire, train and retain team members with the skills necessary to understand and adapt to the continuously developing needs of our customers.

Efforts to attract talent to fill open roles in light of recent constrained labor availability may take more time than in the past and may cost us significantly more than in recent years.

Moreover, the constrained labor conditions may mean that retention of existing talent may require significant additional pay and incentives.

If we fail to attract, motivate, train and retain qualified personnel, or if we experience excessive turnover, we may experience declining sales, manufacturing delays or other inefficiencies, increased recruiting, training and relocation costs and other difficulties, and our business, financial condition, results of operations and cash flows could be materially and adversely affected.

Competition for qualified personnel is intense and we may not be successful in attracting or retaining qualified personnel, which could negatively impact our business.

The loss of the services of key employees or senior officers, or the inability to identify, hire, develop and retain other highly qualified personnel in the future, could adversely affect the quality and profitability of our business operations.

Our ability to maintain or expand our business depends on our ability to attract and hire qualified candidates with the requisite education, background, and experience as well as our ability to train, develop, engage, motivate and retain qualified team members with the skills necessary to understand and adapt to the continuously developing needs of our customers.

Efforts to attract talent to fill open roles in light of continued constrained labor availability and wage inflation may take more time than in the past and may continue to cost us significantly more than in past years.

Moreover, the constrained labor conditions and wage inflation pressures may mean that retention of existing talent may continue to require significant additional pay and incentives.

If we fail to attract, hire, train, develop, engage, motivate and retain qualified personnel, or if we experience prolonged excessive turnover, we may experience declining sales, manufacturing delays, the loss of knowledge of departing employees or other inefficiencies, increased recruiting, hiring, onboarding and training resources, relocation costs and other difficulties, and our business, financial condition, results of operations and cash flows could be materially and adversely affected.

Competition for qualified personnel remains intense and we may not be successful in attracting or retaining qualified personnel, which could negatively impact our business.

Additionally, while we strive to create an inclusive culture and a diverse workforce where all team members feel valued and respected, a failure, or perceived failure, to properly address inclusivity and diversity matters could result in reputational harm, reduced sales or an inability to attract and retain a talented workforce.

We may be adversely impacted by work stoppages and other labor matters.

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Any of these factors may have an adverse effect on us or may limit our flexibility in dealing with our workforce.

Information Technology Risks

Increased cybersecurity threats and more sophisticated computer crime pose a risk to our systems, networks, products and services.

We rely extensively on information technology systems and networks, some of which are managed by third parties, to process, transmit and store electronic information (including sensitive data such as confidential business information and personally identifiable data relating to employees, customers and other business partners), and to manage or support a variety of critical business processes and activities.

As technology continues to evolve, we anticipate that we will collect and store even more data in the future and that our systems will increasingly use remote communication.

Operating these information technology systems and networks and processing and maintaining related data in a secure manner, is critical to our business operations and strategy.

We continuously seek to maintain a robust program of information security and controls, but these systems may be damaged, disrupted or shut down due to attacks by computer hackers, computer viruses, employee error or malfeasance, power outages, hardware failures, telecommunication or utility failures, catastrophes or other unforeseen events, and in any such circumstances our system redundancy and other disaster recovery planning may be ineffective or inadequate.

A failure of or breach in information technology security, particularly through malicious cyber-attacks which continue to increase in both frequency and sophistication by both state and non-state actors, could expose us and our customers, distributors and suppliers to risks of misuse of information or systems, the compromise of confidential information, manipulation and destruction of data, defective products, production downtimes and operations disruptions.

In addition, such breaches in security could result in misstated financial information, regulatory action, fines and litigation, and other potential liabilities, as well as the costs and operational consequences of implementing further data protection measures, each of which could have a material adverse effect on our business or results of operations.

The current cyber threat environment continues to indicate increased risk for all companies.

In addition, we could be impacted by cyber threats, disruptions or vulnerabilities of our customers and suppliers.

Like other global companies, we have experienced cyber threats and incidents in our systems and those of our third-party providers, and we have experienced viruses and attacks targeting our information technology systems and networks, although none have had a material adverse effect on our business or financial condition.

Our information security efforts include programs designed to address security governance, identification and protection of critical assets, insider risk, third-party risk and cyber defense operations.

While these measures are designed to reduce the risk of a breach or failure of our information technology systems, no security measures or countermeasures can guarantee that the Company will not experience a significant information security incident in the future.

Legal, Regulatory & Compliance Risks

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Changes in U.S.

trade policy have and may continue to result in one or more foreign governments adopting responsive trade policies that make it more difficult or costly for us to do business in or import our products from those countries.

trade policy have resulted, and may continue to result, in one or more foreign governments adopting responsive trade policies that make it more difficult or costly for us to do business in or import our products from those countries.

For example, tariffs on certain Chinese origin goods impact the cost of material and machines we import directly from our manufacturing operations in China, as well as the cost of material and components imported on our behalf by suppliers.

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In addition, it may adversely impact demand for our products in China and elsewhere.

While we have been able to mitigate a portion of the effects of tariffs through the U.S.

government’s duty draw-back mechanism and from tariff exclusions, all tariff exclusions have expired.

There is potential that some tariff exclusions may be reinstated, although this is uncertain.

If we are unable to recover a substantial portion of increased costs from our customers and suppliers or through duty draw-back, our business or results of operations could be adversely affected.

We have been able to mitigate a portion of the effects of tariffs through the U.S.

government’s duty draw-back mechanism and will further partially mitigate the impact through the U.S.

Government’s tariff exclusion process, which has been extended through September 30, 2023, on certain components.

However, if we are unable to recover a substantial portion of increased costs from our customers and suppliers, the extended exclusions or duty draw-back, our business or results of operations could be adversely affected.

The Coalition of American Manufacturers of Mobile Access Equipment, an alliance of mobile access equipment producers in the U.S.

of which we are a member, is pursuing anti-dumping and countervailing cases against unfairly traded Chinese imports of mobile access equipment.

While the U.S.

Department of Commerce has issued in 2021 a countervailing and preliminary anti-dumping duty rate on mobile access equipment from China, these duties may not be enough to offset the subsidies provided by the Chinese government to Chinese mobile access equipment manufacturers.

If additional duties are not imposed on imports of Chinese mobile access equipment and/or the duties are not finalized through affirmative final determinations, we may continue to operate at a disadvantage to Chinese manufacturers.

of which we are a member, pursued anti-dumping and countervailing cases against unfairly traded Chinese imports of mobile access equipment.

Department of Commerce has issued countervailing and anti-dumping duty rates on mobile access equipment from China.

If these duties are not enough to offset the subsidies provided by the Chinese government to Chinese mobile access equipment manufacturers and/or if the duties are modified as a result of any appeal process, we may continue to operate at a disadvantage to Chinese manufacturers.

This could result in reduced demand for our products in the U.S.

and have an adverse effect on our business or results of operations.

Compliance with environmental regulations could be costly and require us to make significant expenditures.

Compliance with environmental regulations could be costly and failure to meet ESG expectations or standards or achieve our ESG goals could adversely affect our reputation, business, results of operations, financial condition, or stock price.

We generate hazardous and nonhazardous wastes in the normal course of our manufacturing operations.

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No such incidents have occurred which required us to pay material amounts to comply with such laws and regulations.

In addition, increasing laws and regulations dealing with environmental aspects of the products we manufacture can result in significant expenditures in designing and manufacturing new forms of equipment that satisfy such new laws and regulations.

In particular, climate change is receiving increasing attention worldwide.

Many scientists, legislators and others attribute climate change to increased levels of greenhouse gases, including carbon dioxide, which has led to significant legislative and regulatory efforts to limit greenhouse gas emissions.

While additional regulation of emissions in the future appears likely, it is too early to predict how new regulations would ultimately affect our business, operations or financial results, although government policies limiting greenhouse gas emissions of our products will likely require increased compliance expenditures on our part.

There is also increased focus, including by governmental and non-governmental organizations, investors and other stakeholders, on these and other sustainability matters.

Maintaining a strong reputation with customers, investors, stakeholders and trade partners is critical to the success of our business.

Recently, there is an increased focus, including by governmental and non-governmental organizations, investors and other stakeholders, and more attention on ESG matters.

Such matters include, but are not limited to, reducing greenhouse gas emissions and climate-related risks;

responsible sourcing and supply chain;

human rights and social responsibility;

and corporate governance and oversight.

Given our commitment to ESG, we actively manage all of these issues.

We have a newly created senior vice president position with responsibility for ESG matters, additional dedicated employee resources, and cross-functional/business teams to further develop and implement ESG related initiatives and requirements.

In November 2022, we released our latest ESG report, which highlights ESG materiality assessment results, innovation of environmental friendly products and products supporting safe work practices, implementation of energy audits to achieve our carbon reduction journey and our goal of a 15% reduction in greenhouse gas emissions and energy intensity, new injury prevention behaviors, reflecting our commitment to our Zero Harm Safety Culture, introducing nine affinity groups, supporting our DEI program, and the inclusion of four ESG reporting frameworks.

Maintaining a strong reputation with team members, customers, investors, stakeholders and communities is critical to the success of our business.

We have devoted and expect to have to continue to devote significant expenditures in designing and manufacturing new forms of equipment that satisfy new laws/regulations and market expectations related to greenhouse gas emission reductions.

We devote significant time and resources to programs that are consistent with our corporate values and are designed to protect and preserve our reputation as a good corporate citizen.

Any perception (whether or not valid) of our failure to act responsibly with respect to the environment or to effectively respond to new, or changes in, legal or regulatory requirements concerning climate change or other sustainability concerns could adversely affect our business and reputation.

These goals, commitments, and targets reflect our current plans and are not guarantees that we will be able to achieve them.

Any failure, or perceived failure (whether or not valid), to act responsibly with respect to the environment, to achieve our ESG goals, to maintain ESG practices, to comply with emerging ESG regulations, or to meet investor or customer expectations related to ESG concerns, could harm our reputation, adversely impact our ability to attract and retain qualified and talented team members and customers, expose us to increased scrutiny from the investment community and enforcement authorities, reduce our stock price, have an adverse effect on our future financial results and cause harm to our business.

We face litigation and product liability claims and other liabilities.

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Increasing regulatory focus on privacy and data security issues and expanding laws could expose us to increased liability.

The legislative and regulatory framework for privacy and data protection issues worldwide is also rapidly evolving and is likely to remain uncertain for the foreseeable future.

The legislative and regulatory framework for privacy and data protection issues worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future.

We collect and transfer personal data as part of our business processes and activities.

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As a result, if we commit or aid or abet any future violations of the anti-fraud, books and records, reporting and internal control provisions of the federal securities laws and related SEC rules, we are likely to suffer severe penalties, financial and otherwise, that could have a material negative impact on our business and results of operations.

Strategic Performance Risks

The timing and amount of benefits from our strategic initiatives may not be as expected and our financial results could be adversely impacted.

Each business in our Company is unique, but all businesses are managed to the “Execute, Innovate, Grow” operating framework .

This is part of our continuing strategy to deliver long-term growth and earnings to our shareholders.

We have made, and continue to make, significant investments in these strategic initiatives.

However, we cannot provide any assurance that we will be able to realize the full anticipated benefits of these initiatives.

Information Technology Risks

We may be adversely affected by disruption in, or breach in security of, our information technology systems.

We rely on information technology systems, some of which are managed by third parties, to process, transmit and store electronic information (including sensitive data such as confidential business information and personally identifiable data relating to employees, customers and other business partners), and to manage or support a variety of critical business processes and activities.

As technology continues to evolve, we anticipate that we will collect and store even more data in the future and that our systems will increasingly use remote communication.

A failure of or breach in information technology security, particularly through malicious cyber-attacks which are increasing in both frequency and sophistication by both state and non-state actors, could expose us and our customers, distributors and suppliers to risks of misuse of information or systems, the compromise of confidential information, manipulation and destruction of data, defective products, production downtimes and operations disruptions.

The current cyber threat environment indicates increased risk for all companies.

In addition, we could be impacted by cyber threats, disruptions or vulnerabilities of our customers and suppliers.

UNRESOLVED STAFF COMMENTS

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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