What changed in this filing

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Item 1A. Risk Factors

2022-11-25 compared with 2021-11-24 · 32 added, 37 removed, 530 unchanged (12% of the section changed)

4 unchanged sentences

Business and Operations Risk Factors

Our results of operations could be adversely affected by health outbreaks such as the COVID-19 pandemic.

A significant outbreak, epidemic or pandemic of contagious diseases in any geographic area in which we operate could result in a health crisis adversely affecting the economies, financial markets and overall demand for our services in such areas.

In addition, any preventative or protective actions that governments implement or that we take in response to a health crisis, such as travel restrictions, quarantines, or site closures, may interfere with the ability of our employees and vendors to perform their responsibilities.

Such results could have a material adverse effect on our results of operations.

The continued global COVID-19 pandemic has created significant volatility, uncertainty and economic disruption.

The extent to which the COVID-19 pandemic continues to impact our business, operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict, including:

the duration and scope of the pandemic;

governmental, business and individuals’ actions, including vaccination requirements, that have been and continue to be taken in response to the pandemic;

the impact of the pandemic on economic activity and actions taken in response;

the effect on our clients’ demand for our services;

our ability to provide our services;

the ability of our clients to pay for our services or their need to seek reductions of our fees;

any closures of our and our clients’ offices and facilities;

and the need for enhanced health and hygiene requirements or social distancing or other measures in attempts to counteract future outbreaks in our offices and facilities.

Clients may also slow down decision-making, delay planned work or seek to terminate existing agreements.

In addition, while governments around the world have enacted emergency relief programs designed to combat the economic impact of the pandemic, the long-term effect of such spending is uncertain and could result in future budgetary restrictions for our government clients.

Any of these events could adversely affect our business, financial condition and results of operations.

Continuing worldwide political, social and economic uncertainties may adversely affect our revenue and profitability.

The last several years have been periodically marked by political, social and economic concerns, including decreased consumer confidence, the lingering effects of international conflicts, energy costs and inflation.

Although certain indices and economic data have shown signs of stabilization in the United States and certain global markets, there can be no assurance that these improvements will be broad-based or sustainable.

Ongoing instability and current conflicts in global markets, including Eastern Europe, the Middle East and Asia, and the potential for other conflicts and future terrorist activities and other recent geopolitical events throughout the world, including Russia's invasion of Ukraine, have created and may continue to create economic and political uncertainties and impacts.

This instability can make it extremely difficult for our clients, our vendors and us to accurately forecast and plan future business activities, and could cause constrained spending on our services, delays and a lengthening of our business development efforts, the demand for more favorable pricing or other terms and/or difficulty in collection of our accounts receivable.

4 unchanged sentences

We are subject to tax laws in the United States and numerous foreign jurisdictions.

The incoming U.S.

The current U.S.

presidential administration has called for changes to fiscal and tax policies, which may include comprehensive tax reform.

25 unchanged sentences

• logistical and communication challenges;

• changes in regulatory practices, including tariffs and taxes;

• changes in regulatory practices, including trade policies, tariffs and taxes;

• changes in labor conditions;

9 unchanged sentences

As a result, our international risk exposure may be more or less than the percentage of revenue attributed to our international operations.

Our results of operations could be adversely affected by health outbreaks such as the coronavirus disease 2019 ("COVID-19") pandemic.

In addition, any preventative or protective actions that governments implement or that we take in response to a health crisis, such as travel restrictions, quarantines or site closures, may interfere with the ability of our employees and vendors to perform their responsibilities.

Such results could have a material adverse effect on our results of operations.

The recent global COVID-19 pandemic has created significant volatility, uncertainty and economic disruption.

The extent to which future health outbreaks could impact our business, operations and financial results would depend on numerous evolving factors that we may not be able to accurately predict, including:

the duration and scope of the outbreak;

governmental, business and individuals’ actions, including vaccination requirements, taken in response to the outbreak;

the impact of the outbreak on economic activity and actions taken in response;

the effect on our clients’ demand for our services;

our ability to provide our services;

the ability of our clients to pay for our services or their need to seek reductions of our fees;

any closures of our and our clients’ offices and facilities;

and the need for enhanced health and hygiene requirements or social distancing or other measures in attempts to counteract future outbreaks in our offices and facilities.

Clients could also slow down decision-making, delay planned work or seek to terminate existing agreements.

Any of these events could adversely affect our business, financial condition and results of operations.

The United Kingdom's withdrawal from the European Union could have an adverse effect on our business and financial results.

67 unchanged sentences

federal, state, local and foreign laws and regulations relating to the formation, administration and performance of government contracts.

For example, we must comply with FAR, the Truth in Negotiations Act, CAS, the American Recovery and Reinvestment Act of 2009, the Services Contract Act, and the DoD security regulations, as well as many other rules and regulations.

In addition, we must comply with other government regulations related to employment practices, environmental protection, health and safety, tax, accounting, and anti-fraud measures, as well as many other regulations in order to maintain our government contractor status.

For example, we must comply with FAR, the Truth in Negotiations Act, CAS, the American Recovery and Reinvestment Act of 2009, the Services Contract Act, the DoD security regulations as well as many other rules and regulations.

In addition, we must comply with other government regulations related to employment practices, environmental protection, health and safety, tax, accounting, anti-fraud measures as well as many other regulations in order to maintain our government contractor status.

These laws and regulations affect how we do business with our clients and, in some instances, impose additional costs on our business operations.

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To the extent economic conditions that would impact the future operations of our reporting units change, our goodwill may be deemed to be impaired, and we would be required to record a non-cash charge that could result in a material adverse effect on our financial position or results of operations.

For example, we had goodwill impairment of $15.8 million and $7.8 million in fiscal 2020 and 2019, respectively.

We had no goodwill impairment in fisca l 2021.

For example, we had goodwill impairment of $15.8 million in fiscal 2020.

We had no goodwill impairment in fiscal 2021 and 2022.

We could be adversely affected by violations of the FCPA and similar worldwide anti-bribery laws.

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If we are unable to accurately estimate and manage our costs, we may incur losses on our contracts, which could decrease our operating margins and significantly reduce or eliminate our profits.

Certain of our contracts require us

to satisfy specific design, engineering, procurement, or construction mile stones in order to receive payment for the work completed or equipment or supplies procured prior to achievement of the applicable milestone.

Certain of our contracts require us to

satisfy specific design, engineering, procurement or construction mile stones in order to receive payment for the work completed or equipment or supplies procured prior to achievement of the applicable milestone.

As a result, under these types of arrangements, we may incur significant costs or perform significant amounts of services prior to receipt of payment.

10 unchanged sentences

A failure to promptly recover on these types of claims could have a negative impact on our liquidity and profitability.

Total accounts receivable at October 3, 2021 included approxima tely $11 million related to such claims.

Our failure to win new contracts and renew existing contracts with private and public sector clients could adversely affect our profitability.

9 unchanged sentences

Our backlog is subject to cancellation, unexpected adjustments and changing economic conditions and is an uncertain indicator of future operating results.

Our backlog at October 3, 2021 wa s $3.5 billion, an increase of $241.0 million, or 7.4%, compar ed to the end of fiscal 2020.

Our backlog at October 2, 2022 w as $3.7 billion, an increase of $263.9 million, or 7.6%, compared t o the end of fiscal 2021.

We include in backlog only those contracts for which funding has been provided and work authorizations have been received.

10 unchanged sentences

For example, the European Union's General Data Protection Regulation ("GDPR") extends the scope of the European Union data protection laws to all companies processing data of European Union residents, regardless of the company's location.

In addition, the California Consumer Privacy Act ("CCPA")

increases the penalties for data privacy incidents.

In addition, the California Consumer Privacy Act ("CCPA") increases the penalties for data privacy incidents.

The GDPR and CCPA are just examples of privacy regulations that are emerging in locations where we work.

28 unchanged sentences

Our costs generally increase from schedule delays and/or could exceed our projections for a particular project.

In addition, project performance can be affected by a number of factors beyond

our control, including unavoidable delays from governmental inaction, public opposition, inability to obtain financing, weather conditions, unavailability of vendor materials, changes in the project scope of services requested by our clients, industrial accidents, environmental hazards, labor disruptions and other factors.

As a result, material performance problems for existing and future contracts could cause actual results of operations to differ from those anticipated by us and could cause us to suffer damage to our reputation within our industry and client base.

In addition, project performance can be affected by a number of factors beyond our control, including unavoidable delays from governmental inaction, public opposition, inability to obtain financing, weather conditions, unavailability of vendor materials, changes in the project scope of services requested by our clients, industrial accidents, environmental hazards, labor disruptions and other factors.

As a result, material performance problems for existing

and future contracts could cause actual results of operations to differ from those anticipated by us and could cause us to suffer damage to our reputation within our industry and client base.

New legal requirements could adversely affect our operating results .

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Certain of our contracts may require our employees travel to and work in high-risk countries that are undergoing political, social and economic upheavals resulting from war, civil unrest, criminal activity, acts of terrorism or public health crises.

For example, we currently have employees working in high security risk countries such as Afghanistan and Iraq.

As a result, we risk loss of or injury to our employees and may be subject to costs related to employee death or injury, repatriation or other unforeseen circumstances.

32 unchanged sentences

Further, past business practices at companies that we have acquired may also expose us to future unknown environmental liabilities.

fines, civil or criminal sanctions, and third-party claims for property damage or personal injury or cessation of remediation activities.

Liabilities related to environmental contamination or human exposure to hazardous substances, or a failure to comply with applicable regulations, could result in substantial costs to us, including clean-up costs, fines, civil or criminal sanctions, and third-party claims for property damage or personal injury or cessation of remediation activities.

Our continuing work in the areas governed by these laws and regulations exposes us to the risk of substantial liability.

Force majeure events, including natural disasters, pandemics and terrorist actions could negatively impact the economies in which we operate or disrupt our operations, which may affect our financial condition, results of operations or cash flows.

Force majeure or extraordinary events beyond the control of the contracting parties, such as natural and man-made disasters, as well as pandemics and terrorist actions, could negatively impact the economies in which we operate by causing the closure of offices, interrupting projects, and forcing the relocation of employees.

Force majeure or extraordinary events beyond the control of the contracting parties, such as natural and man-made disasters, pandemics and terrorist actions could negatively impact the economies in which we operate by causing the closure of offices, interrupting projects and forcing the relocation of employees.

We typically remain obligated to perform our services after a terrorist action or natural disaster unless the contract contains a force majeure clause that relieves us of our contractual obligations in such an extraordinary event.

64 unchanged sentences

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