What changed in this filing

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Item 1. Business

2022-04-01 compared with 2021-03-31 · 48 added, 38 removed, 307 unchanged (22% of the section changed)

18 unchanged sentences

are located in Iowa, Minnesota, Nebraska, North Dakota, South Dakota and Wyoming and include several highly productive farming regions, such as the Red River Valley in eastern North Dakota and northwestern Minnesota, portions of the corn belt in Iowa, eastern South Dakota and southern Minnesota, and along the I-80 corridor in Nebraska, which sits on top of the Ogallala Aquifer.

Our Construction stores are located in Colorado, Iowa, Minnesota, Montana, Nebraska, North Dakota, South Dakota, Wisconsin and Wyoming.

Our international stores are located in the European countries of Bulgaria, Germany, Romania, Serbia and Ukraine.

Our Construction stores are located in Colorado, Iowa, Minnesota, Nebraska, North Dakota, South Dakota, and Wisconsin.

Our international stores are located in the European countries of Bulgaria, Germany, Romania, and Ukraine.

We have a history of growth through acquisitions.

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Equipment revenue represented 75.4%, 72.0% and 70.3% of total revenue for the fiscal years ended January 31, 2022, 2021 and 2020.

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We maintain an extensive in-house parts inventory to provide timely parts and repair and maintenance support to our customers.

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and (iv) disaster relief programs.

For the past two growing seasons, the U.S.

federal government has furnished market facilitation program payments to farmers or ranchers to compensate for the adverse impact of U.S.-China trade policies, along with payments under the CARES Act, which payments have assisted our customers.

In recent years, the U.S.

federal government has furnished market facilitation program payments to farmers or ranchers to compensate for the adverse impact of trade policies, along with payments under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act, which payments have assisted our customers.

We believe that these various federal policies reduce financial volatility in the agriculture industry and assist farmers in continuing to operate their farms during economic down cycles and through the adverse headwinds caused by trade policies and tariffs.

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Construction Equipment Industry

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Our marketing functions also drive increased customer engagement and loyalty through participation in trade shows and industry events and communication and coordination for local store open houses, service clinics, equipment demonstrations, product showcases and customer appreciation outings.

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Ability to Attract and Retain Superior Employees.

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We strive to develop our employees through a structured training program, and to invest in our employees' development.

In addition, we strive to implement a compensation system that rewards employees for high performance.

In addition, we have robust compensation tools that allow us to react to rapidly changing market conditions and reward employees for high performance.

We believe that our efforts in these areas will enable us to attract and retain superior employees, necessary for us to be successful in our industry.

See "Human Capital" at pp.

See "Human Capital".

Diverse and Stable Customer Base Reduces Market Risk

Our large geographic footprint covering nine U.S.

states and five European countries provides a diversified customer base.

Our large geographic footprint covering eight U.S.

states and four European countries provides a diversified customer base.

We believe that this diverse customer base reduces the potential impact of risks associated with customer concentration and fluctuations in local market conditions.

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Increasing Same-Store Sales and Market Share

Increasing same-store sales and market share is one of our top priorities.

Increasing same-store sales and market share are among our top priorities.

This type of growth both enhances our current period revenue and increases our potential future revenue during the life of the sold equipment as a result of the potential for recurring parts and service business.

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We expect that strategic acquisitions will continue to be a component of our long-term growth strategy.

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We regularly assess the acquisition landscape, evaluating potential acquisitions in terms of availability and alignment to our long-term growth strategy.

Typically, we have acquired only the working capital and fixed assets that we believe are

necessary to run an efficient store and we do not generally assume any indebtedness.

Typically, in an acquisition, we have acquired only the working capital and fixed assets that we believe are necessary to run an efficient store, and we do not generally assume any indebtedness.

On occasion, we have acquired all of the outstanding equity of a company.

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New Holland Agriculture, recognized by the blue color of its tractors and the yellow color of its harvesting and hay equipment, has over 120 years of farm equipment industry experience.

The Case Construction and New Holland Construction brands are owned and operated by CNH Industrial.

The Case Construction and New Holland Construction brands are also owned and operated by CNH Industrial.

In fiscal 2022, CNH Industrial supplied approximately 76% of the new equipment sold in our Agriculture segment, 66% of the new equipment sold in our Construction segment, and 70% of the new equipment sold in our International segment.

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The structure of the North American and European agreements are very similar.

Except as noted, the following discussion describes the North American CNH Industrial Dealer Agreements.

Except as noted, the following discussion describes each of the North American CNH Industrial Dealer Agreements.

Each of the CNH Industrial Dealer Agreements assign to us a geographically defined area of primary responsibility, providing us with distribution and product support rights within the identified territory for specific equipment products.

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Under our CNH Industrial Dealer Agreements, we have both the right and obligation to sell CNH Industrial equipment and related parts and products and to provide customers with repair services.

The CNH Industrial Dealer Agreements impose various requirements on us regarding the location and appearance of facilities, satisfactory levels of new equipment and parts inventories, the training of personnel, adequate business enterprise and information technology system, adequate working capital, a maximum adjusted debt to tangible net worth ratio, development of annual sales and marketing goals, and furnishing of monthly and annual financial information to CNH Industrial.

The CNH Industrial Dealer Agreements impose various requirements on us regarding the location and appearance of facilities, satisfactory levels of new equipment and parts inventories, the training of personnel, adequate business enterprise and information technology systems, adequate working capital, a maximum adjusted debt to tangible net worth ratio, development of annual sales and marketing goals, and furnishing of monthly and annual financial information to CNH Industrial.

We must obtain the approval or consent of CNH Industrial in the event of proposed fundamental changes to our ownership, governance or business structure (defined as "change in control" events) including, among other things, (i) a merger, consolidation or reorganization, unless securities representing more than 50% of the total combined voting power of the successor corporation are immediately owned, directly or indirectly, by persons that owned our securities prior to the transaction;

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(iv) a substantial disposition of shares of our common stock by certain named executives;

(v) certain significant changes in the composition of our Board of Directors;

(v) certain significant changes in the

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composition of our Board of Directors;

and (vi) replacement of our Chief Executive Officer.

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CNH Industrial has the right to terminate its dealer agreements with us immediately in certain circumstances, including in the event of (i) our insolvency or bankruptcy, (ii) a material breach by us of the provisions of a CNH Industrial Dealer Agreement or (iii) our failure to secure the consent of CNH Industrial prior to the occurrence of a “change in control” event.

The CNH Industrial Dealer Agreements governing Case Construction equipment grants CNH Industrial the right to terminate these CNH Industrial Dealer Agreements for any reason upon 120 days prior written notice.

The CNH Industrial Dealer Agreements governing Case Construction equipment grant CNH Industrial the right to terminate these CNH Industrial Dealer Agreements for any reason upon 120 days prior written notice.

In addition, we have the right to terminate any of the CNH Industrial Dealer Agreements at any time, with or without cause, upon 60 days prior written notice.

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The CNH Industrial Dealer Agreements generally do not include non-compete provisions that apply during or after the term of such agreements or limit our operations apart from our designated CNH Industrial dealership store locations.

Our CNH Dealer Agreements for Case Construction equipment, absent consent of CNH Industrial, restrict our ability to sell competing products (new equipment and parts) of other manufacturers at our Case dealership store locations during the term of such agreements.

Our CNH Industrial Dealer Agreements for Case Construction equipment, absent consent of CNH Industrial, restrict our ability to sell competing products (new equipment and parts) of other manufacturers at our Case dealership store locations during the term of such agreements.

Our CNH Industrial Dealer Agreements require us to operate any material business activities not related to sales of CNH Industrial products or services to customers in agricultural, construction, industrial or similar markets separately from our CNH Industrial dealership business.

The CNH Industrial Dealer Agreements and industry practices generally provide certain interest free terms on equipment purchased from CNH Industrial entities before being due for payment, at which time the equipment inventory is then financed through one of our floorplan payable credit facilities.

Generally, parts purchased from CNH Industrial entities is due within 30 days.

CNH Industrial and other equipment suppliers frequently provide to its dealers interest free financing on equipment purchases.

The interest free periods are for varying terms but generally less than 6 months.

After the supplier's interest free floorplan expires, for any equipment that has not already been sold at retail, we typically pay off the supplier's financing with cash or through one of our lower interest rate floorplan credit facilities.

Generally, payment for parts purchased from CNH Industrial entities is due within 30 days.

CNH Industrial makes available to us any floorplan programs, parts return programs, sales or incentive programs or similar plans or programs it offers to its other dealers, and provides us with promotional items and marketing materials.

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We are restricted in our ability to sell competing products in our assigned territories.

Our CNH Dealer Agreements for our European operations do not have a fixed term.

Our CNH Industrial Dealer Agreements for our European operations do not have a fixed term.

CNH Industrial can terminate these agreements immediately in certain circumstances constituting cause, and for any reason upon 24 months' prior written notice.

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We believe our offering of products for specialized niche markets supports our goal of being a one-stop solution for our customers' equipment needs at each of our stores.

Approximately 28% of our total new equipment sales in fiscal 2021 resulted from sales of products manufactured by companies other than CNH Industrial, with our single largest manufacturer other than CNH Industrial representing approximately 2% of our total new equipment sales.

Approximately 27% of our total new equipment sales in fiscal 2022 resulted from sales of products manufactured by companies other than CNH Industrial, with our single largest manufacturer other than CNH Industrial representing approximately 2% of our total new equipment sales during fiscal 2022.

The terms of our arrangements with these other suppliers vary, but most of the dealership agreements contain termination provisions allowing the supplier to terminate the agreement after a specified notice period, which is typically 30 days.

Payment and financing practices with these other suppliers are similar to those practices described above with respect to CNH Industrial.

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Our North America agriculture customers vary from small, single machine owners to large farming operations, primarily in the states of Iowa, Minnesota, Nebraska, North Dakota, South Dakota and Wyoming.

In fiscal 2022, no single agriculture customer accounted for more than 1.0% of our Agriculture revenue.

Our Construction customers include a wide range of construction contractors, public utilities, forestry, energy companies, farmers, municipalities and maintenance contractors, primarily in the states of Colorado, Iowa, Minnesota,

Montana, Nebraska, North Dakota, South Dakota, Wisconsin and Wyoming.

They vary in size from small, single machine owners to large firms.

In fiscal 2022, no single construction equipment customer accounted for more than 2.0% of our Construction revenue.

Our international customers vary from small, single machine owners to large farming operations, primarily in the European countries of Bulgaria, Germany, Romania, Serbia and Ukraine.

Our international customers vary from small, single machine owners to large farming operations, primarily in the European countries of Bulgaria, Germany, Romania, and Ukraine.

We also sell Case construction equipment in Bulgaria and Romania.

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In addition, we enable our regional and area managers and their sales teams to develop localized sales and marketing strategies.

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Parts Managers and Service Managers

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The number of other agricultural and construction equipment dealers operating on a regional scale is limited.

Our primary regional-scale competitors include RDO Equipment Co., Butler Machinery, Ziegler Inc., Brandt Holdings Co., Wagner Equipment Co., 21st Century Equipment, LLC, AKRS Equipment, C & B Operations, LLC, and Van Wall Equipment.

Our primary regional-scale competitors include RDO Equipment Co., Butler Machinery Company, Ziegler Inc., Brandt Holdings Co., Wagner Equipment Co., 21st Century Equipment, LLC, AKRS Equipment Solutions, Inc., C & B Operations, LLC, and Van Wall Equipment, Inc.

Corporate Information

9 unchanged sentences

We also license trademarks and trade names from other suppliers of equipment to us.

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Product Warranties

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We strive to attract the best talent from a variety of sources to meet the current and future needs of our business.

We have established relationships with multiple trade schools and colleges across our footprint, which we utilize as a source for entry-level talent.

We have established relationships with multiple high schools, trade schools and colleges across our footprint, which we utilize as a source for entry-level talent.

Additionally, we believe it is incumbent upon all of our managers to continuously monitor their local markets for experienced individuals who might be successful additions to our organization.

1 unchanged sentence

Compensation Programs and Employee Benefits

We conduct regular assessments of our pay and benefit practices to help ensure that employees are compensated fairly and competitively.

We conduct regular assessments of our pay and benefit practices.

Our compensation programs are designed to attract, retain, motivate and reward employees who must operate in a highly competitive, fast-paced environment.

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Members of our training and development team collaborate with employees from our various operations teams to identify our strategic training needs and prioritize the development of appropriate training content.

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Employee Engagement and Retention

We conduct periodic comprehensive employee engagement surveys designed to measure organizational culture and engagement.

The purposes of the survey are to monitor overall employee engagement, identify actions that can be taken to improve our employee engagement and motivation, and to continuously improve employee retention.

Data collected in each annual employee engagement survey is maintained and used to track our progress against our internal goals.

The purposes of the surveys are to monitor overall employee engagement, identify actions that can be taken to improve our employee engagement and motivation, and to continuously improve employee retention.

Data collected in each employee engagement survey is maintained and used to track our progress.

Management continually monitors employee turnover data, which is supplemented with additional data from exit surveys, to assist in determining the reasons for voluntary employee terminations.

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Health and Safety

Employee Wellness Program

Employee health and safety is of paramount importance to us.

We believe it is our responsibility to maintain a safe and healthy workplace in each of our facilities and to make continuous improvements in this area.

We do this by embedding safety into every level of the organization as a top priority.

We strongly believe that a safe work environment will help us gain a competitive advantage, and that doing what is right, honest and ethical is essential to developing trust with our partners.

This includes providing a safe place to works, safety training relevant to the employee's position, and following all safety and environmental regulations.

We ensure that safety performance data is tracked, aggregated, and reviewed on an ongoing basis across our organization.

1 unchanged sentence

This data is reviewed monthly by the executive leadership team and shared with the Company's Board of Directors on a quarterly basis.

Safety meetings are also held at each of our facilities on a regular basis.

We are also committed to improving the health and well-being of our employees.

wellness program was established in 2017 and is continuously evolving to better educate, motivate and reward our employees for maintaining and achieving healthy measures.

We are also interested in improving the health and well-being of our employees.

The purpose of our U.S.

employee wellness program is to help educate, motivate and reward our employees for maintaining healthy lifestyles.

Performance Management

4 unchanged sentences

clear, organization-wide expectations that managers and staff employees monitor progress toward completion of their SMART goals with regular coaching sessions and periodic evaluations;

an annual performance assessment that provides a direct link between the associate’s pay and performance, considering market compensation data.

an annual performance discussion.

Commitment to Core Values and Ethical Culture

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Community Engagement

As a Company, we believe that our value of responsibility requires community engagement, and we encourage our employees to share in our commitment to the communities where we operate.

As a Company, we believe being good community citizens is critical to our success, and we encourage our employees to be involved in the communities where we operate.

We offer paid time off for employees to volunteer their time to community efforts.

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Our employees are not covered by a collective bargaining agreement.

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Environmental and Other Governmental Regulation

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We also are subject to laws and regulations governing responses to any releases of contamination at or from our facilities or at facilities that receive our hazardous wastes for treatment or disposal.

The Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") and similar state statutes, can impose strict and joint and several liability for cleanup costs on those that are considered to have contributed to the release of a "hazardous substance."

The Comprehensive Environmental Response, Compensation and Liability Act and similar state statutes, can impose strict and joint and several liability for cleanup costs on those that are considered to have contributed to the release of a "hazardous substance."

We also are subject to the Clean Water Act, analogous state statutes, and their implementing regulations which, among other things, prohibit discharges of pollutants into regulated waters without permits, require containment of potential discharges of oil or hazardous substances, and require preparation of spill contingency plans.

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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 1. Business