1 unchanged sentence
We design, manufacture, personalize, rent, clean, deliver, and sell a wide range of uniforms and protective clothing, including shirts, pants, jackets, coveralls, lab coats, smocks, aprons and specialized protective wear, such as flame resistant and high visibility garments.
−Removed: We also rent and sell industrial wiping products, floor mats, facility service products and other non-garment items, and provide restroom and cleaning supplies and first aid cabinet services and other safety supplies, to a variety of manufacturers, retailers and service companies.
+Added: We also rent and sell industrial wiping products, floor mats, facility service products and other non-garment items, and provide restroom and cleaning supplies and first aid cabinet services and other safety supplies as well as certain safety training, to a variety of manufacturers, retailers and service companies.
We serve businesses of all sizes in numerous industry categories.
6 unchanged sentences
Because we design and manufacture a majority of our own uniforms and protective clothes, we can produce custom garment programs for our larger customers, offer a diverse range of such designs within our standard line of garments and better control the quality, price and speed at which we produce such garments.
−Removed: In addition, among our competitors, we believe we have the largest in-house digital image processing capability, allowing us to convert an image provided by a customer into customized, mass producible embroidered emblems, typically within two days.
PRODUCTS AND SERVICES
21 unchanged sentences
During each of the past three years, no single customer in our Core Laundry Operations segment accounted for more than 10% of our revenues.
−Removed: Our typical customers include automobile service centers and dealers, delivery services, food and general merchandise retailers, food processors and service operations, light manufacturers, maintenance facilities, restaurants, service companies, soft and durable goods wholesalers, transportation companies, and others who require employee clothing for image, identification, protection or utility purposes.
+Added: Our typical customers include automobile service centers and dealers, delivery services, food and general merchandise retailers, light manufacturers, maintenance facilities, restaurants, and food-related businesses, service providers, soft and durable goods wholesalers, transportation companies, energy producing operations, healthcare providers and others who require employee clothing for image, identification, protection and/ or utility purposes.
Among our largest customers of our conventional uniform rental business are divisions, units, regional operations or franchised agencies of major, nationally recognized organizations.
−Removed: With respect to our Specialty Garment segment, typical customers include government agencies, research and development laboratories, high technology companies and utilities operating nuclear reactors.
−Removed: We currently service over 300,000 customer locations in the United States, Canada and Europe from over 260 customer service, distribution and manufacturing facilities.
+Added: With respect to our Specialty Garments segment, typical customers include government agencies, research and development laboratories, high technology companies, cleanroom operators, and utilities operating nuclear reactors.
+Added: We currently service over 300,000 customer locations in the United States, Canada and Europe from 260 customer service, distribution and manufacturing facilities.
MARKETING, SALES, AND CUSTOMER SERVICE
17 unchanged sentences
The principal methods of competition in the industry are the quality of products, the quality of service and price.
−Removed: Our principal competitors include Cintas Corporation and Aramark Corporation.
+Added: Our principal competitors include Cintas Corporation, Alsco and Aramark.
The remainder of the market, however, is divided among more than 600 smaller businesses, many of which serve one or a limited number of markets or geographic service areas.
23 unchanged sentences
Sintros joined our Company in 2004.
−Removed: Sintros has served as our President and Chief Executive Officer and a Director since July 2017.
−Removed: He has overall responsibility for management of our Company.
+Added: Sintros is our President and Chief Executive Officer and a Director.
+Added: He has had overall responsibility for management of our Company since July 2017.
He previously served as our Chief Financial Officer from January 2009 until January 2018.
1 unchanged sentence
Shane O’Connor joined our Company in 2005.
−Removed: O’Connor has served as our Senior Vice President and Chief Financial Officer since January 2018.
−Removed: He has primary responsibility for overseeing the financial functions of our Company, as well as our information systems department.
+Added: O’Connor is a Senior Vice President and our Chief Financial Officer.
+Added: He has had primary responsibility for overseeing the financial functions of our Company, as well as our information systems department, since January 2018.
O’Connor previously served as our Corporate Controller from 2009 to 2016.
1 unchanged sentence
Cynthia Croatti joined our Company in 1980.
−Removed: Croatti has served as Director since 1995, Treasurer since 1982 and Executive Vice President since 2001.
−Removed: In addition, she has primary responsibility for overseeing the human resources and purchasing functions of our Company.
+Added: Croatti is an Executive Vice President and her primary focus is on advancing key initiatives aimed at enhancing the Company’s culture, branding, and long-term strategy.
+Added: During her tenure at the Company, she previously had primary responsibility for overseeing the human resources and purchasing functions.
+Added: Croatti has served as a Director since 1995 and previously served as Treasurer beginning in 1982.
DiFillippo joined our Company in 1979.
−Removed: DiFillippo has served as Senior Vice President, Operations since 2002 and has primary responsibility for overs eeing the operations of certain regions in the United States and Canada.
+Added: DiFillippo is a Senior Vice President, Operations and has had primary responsibility for overseeing the operations of certain regions in the United States and Canada since 2002.
From 2000 through 2002, Mr.
1 unchanged sentence
Katz joined our Company in 2009.
−Removed: Katz is a Senior Vice President and has primary responsibility for overseeing the sales and marketing functions of our Company.
+Added: Katz is a Senior Vice President and has had primary responsibility for overseeing the sales and marketing functions since joining our Company.
Prior to joining our Company, Mr.
1 unchanged sentence
Croatti joined our Company in 1987.
−Removed: Croatti became Senior Vice President, Operations in 2015 and has primary responsibility for overseeing specified regions in the United States and the Company’s overall service operations.
+Added: Croatti is a Senior Vice President, Operations and has had primary responsibility for overseeing specified regions in the United States and the Company’s overall service operations since 2015.
From 2012 through 2015, he served as Senior Vice President, Service;
3 unchanged sentences
Ross joined our Company in 1989.
−Removed: Ross became Senior Vice President, Operations in 2016 and has primary responsibility for overseeing specified regions in the United States.
+Added: Ross is a Senior Vice President, Operations and has had primary responsibility for overseeing specified regions in the United States since 2016.
From 2002 to 2016, Mr.
6 unchanged sentences
We are attentive to the environmental concerns surrounding the disposal of these materials and have through the years taken measures to avoid their improper disposal.
−Removed: Over the years, we have settled, or contributed to the settlement of, actions or claims brought against us relating to the disposal of hazardous materials and there can be no assurance that we will not have to expend material amounts to remediate the consequences of any such disposal in the future.
+Added: We have settled, or contributed to the settlement of, past actions or claims brought against us relating to the disposal of hazardous materials at several sites and there can be no assurance that we will not have to expend material amounts to remediate the consequences of any such disposal in the future.
Further, under environmental laws, an owner or lessee of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances located on, or in, or emanating from such property, as well as related costs of investigation and property damage.
1 unchanged sentence
There can be no assurance that acquired or leased locations have been operated in compliance with environmental laws and regulations or that future uses or conditions will not result in the imposition of liability upon us under such laws or expose us to third-party actions such as tort suits.
−Removed: We continue to address environmental conditions under terms of consent orders negotiated with the applicable environmental authorities or otherwise with respect to sites located in, or related to, Woburn, Massachusetts, Somerville, Massachusetts, Springfield, Massachusetts, Uvalde, Texas, Stockton, California, two sites related to former operations in Williamstown, Vermont, as well as sites located in Goldsboro, North Carolina and Wilmington, North Carolina.
+Added: We continue to address environmental conditions under terms of consent orders negotiated with the applicable environmental authorities or otherwise with respect to certain sites.
For additional discussion refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the risk factors set forth in this Annual Report on Form 10-K.
9 unchanged sentences
Information included on our website is not deemed to be incorporated into this Annual Report on Form 10-K or the documents incorporated by reference into this Annual Report on Form 10-K.
−Removed: RIS K FACTORS
−Removed: The statements in this section, as well as statements described elsewhere in this Annual Report on Form 10-K, or in other SEC filings, describe risks that could materially and adversely affect our business, financial condition and results of operations and the trading price of our securities.
−Removed: These risks are not the only risks that we face.
−Removed: Our business, financial condition and results of operations could also be materially affected by additional factors that are not presently known to us or that we currently consider to be immaterial to our operations.
−Removed: SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
−Removed: This Annual Report on Form 10-K and any documents incorporated by reference may contain forward-looking statements within the meaning of the federal securities laws.
−Removed: Forward-looking statements contained in this Annual Report on Form 10-K and any documents incorporated by reference are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995.
−Removed: Forward-looking statements may be identified by words such as “estimates,” “anticipates,” “projects,” “plans,” “expects,” “intends,” “believes,” “seeks,” “could,” “should,” “may,” “will,” “strategy,” “objective,” “assume,” or the negative versions thereof, and similar expressions and by the context in which they are used.
−Removed: Such forward-looking statements are based upon our current expectations and speak only as of the date made.
−Removed: Such statements are highly dependent upon a variety of risks, uncertainties and other important factors that could cause actual results to differ materially from those reflected in such forward-looking statements.
−Removed: Such factors include, but are not limited to, uncertainties caused by adverse economic conditions and their impact on our customers’ businesses and workforce levels, uncertainties regarding our ability to consummate and successfully integrate acquired businesses, uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation, any adverse outcome of pending or future contingencies or claims, our ability to compete successfully without any significant degradation in our margin rates, seasonal and quarterly fluctuations in business levels, our ability to preserve positive labor relationships and avoid becoming the target of corporate labor unionization campaigns that could disrupt our business, the effect of currency fluctuations on our results of operations and financial condition, our dependence on third parties to supply us with raw materials, any loss of key management or other personnel, increased costs as a result of any changes in federal or state laws, rules and regulations or governmental interpretation of such laws, rules and regulations, uncertainties regarding the price levels of natural gas, electricity, fuel and labor, the negative effect on our business from sharply depressed oil and natural gas prices, the continuing increase in domestic healthcare costs, our ability to retain and grow our customer base, demand and prices for our products and services, fluctuations in our Specialty Garments business, instability in Mexico and Nicaragua where our principal garment manufacturing plants are located, our ability to properly and efficiently design, construct, implement and operate a new customer relationship management (“CRM”) computer system, interruptions or failures of our information technology systems, including as a result of cyber-attacks, additional professional and internal costs necessary for compliance with any changes in Securities and Exchange Commission, New York Stock Exchange and accounting rules, strikes and unemployment levels, our efforts to evaluate and potentially reduce internal costs, economic and other developments associated with the war on terrorism and its impact on the economy, the impact of foreign trade policies and tariffs or other impositions on imported goods on our business, results of operations and financial condition, general economic conditions, our ability to successfully implement our business strategies and processes, including our capital allocation strategies and other factors described in this “Item 1A.
−Removed: Risk Factors” and elsewhere in this Annual Report on Form 10-K.
−Removed: We undertake no obligation to update any forward-looking statements to reflect events or circumstances arising after the date on which they are made.
−Removed: RISKS RELATING TO OUR BUSINESS AND INDUSTRY
−Removed: We face intense competition within our industry, which may adversely affect our results of operations and financial condition.
−Removed: The uniform rental and sales industry is highly competitive.
−Removed: The principal methods of competition in the industry are quality of products, quality of service and price.
−Removed: Our leading competitors include Cintas Corporation and Aramark Corporation.
−Removed: The remainder of the market, however, is divided among more than 600 smaller businesses, many of which serve one or a limited number of markets or geographic service areas.
−Removed: In addition to our traditional rental competitors, we may increasingly compete in the future with businesses that focus on selling uniforms and other related items, including single-use disposable garments for use in the nuclear industry.
−Removed: Increased competition may result in price reductions, reduced gross margins and loss of market share, any of which could have a material effect on our results of operations and financial condition.
−Removed: We also compete with industry competitors for acquisitions, which has the effect of increasing the price for acquisitions and reducing the number of acquisition candidates available to us.
−Removed: If we pay higher prices for businesses we acquire, our returns on investment and profitability may be reduced.
−Removed: Adverse economic and business conditions or geopolitical events may affect our customer base and negatively impact our sales and operating results.
−Removed: We supply uniform services to many industries that have been in the past, and may be in the future, subject to adverse economic and business conditions resulting in shifting employment levels, workforce reductions, changes in worker productivity, uncertainty regarding the impacts of rehiring and shifts to offshore manufacturing.
−Removed: In addition, geopolitical conflicts, calamities or other events may disrupt domestic and global business and financial markets and conditions.
−Removed: Any conditions or events that adversely affect our current customers or sales prospects may cause such customers or prospects to restrict expenditures, reduce workforces or even to cease to conduct their businesses.
−Removed: Any of these circumstances would have the effect of reducing the number of employees utilizing our uniform services, which adversely affects our sales and results of operations.
−Removed: The expenses we incur to comply with environmental regulations, including costs associated with potential environmental remediation, may prove to be significant and could have a material adverse effect on our results of operations and financial condition.
−Removed: We, like our competitors, are subject to various federal, state and local laws and regulations governing, among other things, air emissions, wastewater discharges, and the generation, handling, storage, transportation, treatment and disposal of hazardous wastes and other substances.
−Removed: In particular, industrial laundries currently use and must dispose of detergent waste water and other residues, and, in the past, used perchloroethylene and other dry cleaning solvents.
−Removed: We are attentive to the environmental concerns surrounding the disposal of these materials and have, through the years, taken measures to avoid their improper disposal.
−Removed: Over the years, we have settled, or contributed to the settlement of, actions or claims brought against us relating to the disposal of hazardous materials and there can be no assurance that we will not have to expend material amounts to remediate the consequences of any such disposal in the future.
−Removed: Further, under environmental laws, an owner or lessee of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances located on, or in, or emanating from such property, as well as related costs of investigation and property damage.
−Removed: Such laws often impose liability without regard to whether the owner or lessee knew of, or was responsible for, the presence of such hazardous or toxic substances.
−Removed: There can be no assurance that acquired or leased locations have been operated in compliance with environmental laws and regulations or that future uses or conditions will not result in the imposition of liability upon us under such laws or expose us to third-party actions such as tort suits.
−Removed: We continue to address environmental conditions under terms of consent orders negotiated with the applicable environmental authorities or otherwise with respect to sites located in or related to Woburn, Massachusetts, Somerville, Massachusetts, Springfield, Massachusetts, Uvalde, Texas, Stockton, California, two sites related to former operations in Williamstown, Vermont, as well as sites located in Goldsboro, North Carolina and Wilmington, North Carolina.
−Removed: We have accrued certain costs related to the sites described above as it has been determined that the costs are probable and can be reasonably estimated.
−Removed: We have potential exposure related to a parcel of land (the “ Central Area”) related to the Woburn, Massachusetts site cited above.
−Removed: Currently, the consent decree for the Woburn site does not define or require any remediation work in the Central Area.
−Removed: The United States Environmental Protection Agency (the “EPA”) has provided us and other signatories to the consent decree with comments on the design and implementation of groundwater and soil remedies at the Woburn site and investigation of environmental conditions in the Central Area.
−Removed: We, and other signatories, have implemented and proposed to do additional work at the Woburn site but many of the EPA’s comments remain to be resolved.
−Removed: We have accrued costs to perform certain work responsive to the EPA’s comments.
−Removed: Additionally, we have implemented mitigation measures and continue to monitor environmental conditions at the Somerville, Massachusetts site.
−Removed: We have received a notice of audit findings from the Massachusetts Department of Environmental Protection concerning a regulatory submittal that we made in 2009 for a portion of the site.
−Removed: We are in the process of responding to that notice.
−Removed: We have received demands from the local transit authority for reimbursement of certain costs associated with its construction of a new municipal transit station in the area of the Somerville site.
−Removed: This station is part of an ongoing extension of the transit system.
−Removed: We have reserved for costs in connection with this matter;
−Removed: however, in light of the uncertainties associated with this matter, these costs and the related reserve may change.
−Removed: On a quarterly basis, we assess each of our environmental sites to determine whether the costs of investigation and remediation of environmental conditions are probable and can be reasonably estimated as well as the adequacy of our accruals with respect to such costs.
−Removed: There can be no assurance that our accruals with respect to our environmental sites will be sufficient or that the costs of remediation and investigation will not substantially exceed our accruals as new facts, circumstances or estimates arise.
−Removed: Our nuclear garment decontamination facilities are licensed by the Nuclear Regulatory Commission, or in certain cases, by the applicable state agency, and are subject to regulation by federal, state and local authorities.
−Removed: We also have nuclear garment decontamination facilities in the United Kingdom and the Netherlands.
−Removed: These facilities are licensed and regulated by the res pective country’s applicable federal agency.
−Removed: In the past, scrutiny and regulation of nuclear facilities and related services have resulted in the suspension of operations at certain nuclear facilities served by us or disruptions in our ability to service s uch facilities.
−Removed: There can be no assurance that such scrutiny and regulation will not lead to the shut-down of such facilities or otherwise cause material disruptions in our garment decontamination business.
−Removed: In addition, our nuclear garment decontamination operations are subject to asset retirement obligations related to the decommissioning of our nuclear laundry facilities.
−Removed: We recognize as a liability the present value of the estimated future costs to decommission these facilities.
−Removed: The estimated liability is based on historical experience in decommissioning nuclear laundry facilities, estimated useful lives of the underlying assets, external vendor estimates as to the cost to decommission these assets in the future, and federal and state regulatory requirements.
−Removed: No assurances can be given that these accruals will be sufficient or that the costs of such decommissioning will not substantially exceed such accruals, as our facts, circumstances or estimates change, including changes in the Company’s estimated useful lives of the underlying assets, estimated dates of decommissioning, changes in decommissioning costs, changes in federal or state regulatory guidance on the decommissioning of such facilities, or other changes in estimates.
−Removed: In addition to contingencies and claims relating to environmental compliance matters, we may from time to time be subject to legal proceedings and claims related to our business operations which may adversely affect our financial condition and operating results.
−Removed: In addition to contingencies and claims relating to environmental compliance matters, we are subject from time to time to legal proceedings, claims and disputes arising from the conduct of our business operations, including personal injury claims, customer contract matters and employment claims.
−Removed: Certain of these claims are typically not covered by our available insurance.
−Removed: In addition, claims occasionally result in significant investigation and litigation expenses and, if successful, may result in material losses to us.
−Removed: Certain claims may also result in significant adverse publicity against us.
−Removed: As a consequence, successful claims against us not covered by our available insurance coverage, or the impact of adverse publicity against us, could have a material adverse effect on our business, financial condition and results of operation.
−Removed: Our failure to implement successfully our acquisition strategy and to grow our business could adversely affect our ability to increase our revenues and could negatively impact our profitability.
−Removed: As part of our growth strategy, we intend to continue to actively pursue additional acquisition opportunities.
−Removed: However, as discussed above, we compete with others within our industry for suitable acquisition candidates.
−Removed: This competition may increase the price for acquisitions and reduce the number of acquisition candidates available to us.
−Removed: As a result, our ability to acquire businesses in the future, and to acquire such businesses on favorable terms, may be limited.
−Removed: Even if we are able to acquire businesses on favorable terms, managing growth through acquisition is a difficult process that includes integration and training of personnel, combining plant and operating procedures and additional matters related to the integration of acquired businesses within our existing organization.
−Removed: Unanticipated issues related to integration may result in additional expense or in disruption to our operations, either of which could negatively impact our ability to achieve anticipated benefits.
−Removed: While we believe we will be able to fully integrate acquired businesses, we can give no assurance that we will be successful in this regard.
−Removed: Growth of our business will likely require us to increase our work force, the scope of our operating and financial systems and the geographic area of our operations.
−Removed: We believe this growth will increase our operating complexity and the level of responsibility for both existing and new management personnel.
−Removed: Managing and sustaining our growth and expansion may require substantial enhancements to our operational and financial systems and controls, as well as additional administrative, operational and financial resources.
−Removed: There can be no assurance that we will be able to manage our expanding operations successfully, that any acquired business will perform as we expect, or that we will be able to maintain or accelerate our growth, and any failure to do so could have an adverse effect on our results of operations and financial condition.
−Removed: In order to finance such acquisitions, we may need to obtain additional funds either through public or private financings, including bank and other secured and unsecured borrowings and the issuance of debt or equity securities.
−Removed: There can be no assurance that such financings would be available to us on reasonable terms or that any future issuances of securities in connection with acquisitions will not be dilutive to our shareholders.
−Removed: If we are unable to preserve positive labor relationships or become the target of corporate labor unionization campaigns, the resulting labor unrest could disrupt our business by impairing our ability to produce and deliver our products.
−Removed: As of August 31, 2019, we employ approximately 14,000 persons and approximately 1% of our United States employees are represented by a union pursuant to a collective bargaining agreement.
−Removed: Competitors within our industry have been the target of corporate unionization campaigns by multiple labor unions.
−Removed: While our management believes that our employee relations are good, we cannot assure you that we will not become the target of campaigns similar to those faced by our competitors.
−Removed: The potential for unionization could increase if the United States Congress passes federal “card check” legislation in the future.
−Removed: If we do encounter pressure from any labor unions in connection with our acquisitions of other businesses, any resulting labor unrest could disrupt our business by impairing our ability to produce and deliver our products.
−Removed: In addition, significant union representation would require us to negotiate wages, salaries, benefits and other terms with many of our employees collectively and could adversely affect our results of operations by increasing our labor costs or otherwise restricting our ability to maximize the efficiency of our operations.
−Removed: We may incur unexpected cost increases due to rising healthcare costs, the Affordable Care Act and other labor costs.
−Removed: The cost of healthcare that we provide to our employees has grown over the last few years at a rate in excess of our revenue growth and, as a result, has negatively impacted our operating results.
−Removed: Moreover, it is generally expected that healthcare costs in the United States will increase over the coming years at rates in excess of inflation.
−Removed: As a result of these factors, and depending on the effect of any modifications we have made and may make in the future to our employee healthcare plans and enrollment levels in those plans, including as a result of the Affordable Care Act or any future legislation or regulation affecting the healthcare industry, we expect that our future operating results will continue to be further adversely impacted by increasing healthcare costs.
−Removed: Federal, state and municipal governments are mandating increases to minimum wage and other employee benefits.
−Removed: In addition, we face wage pressure as the result of a low unemployment environment.
−Removed: We have raised, and expect to continue to raise, our wage rates and benefits to reflect these changes, which has the effect of increasing our labor costs, which in turn adversely affects our results of operation and financial condition.
−Removed: Our failure to comply with these regulatory requirements would expose us to applicable penalties and increase the likelihood that we would be subject to unionization campaigns.
−Removed: Further mandates would require additional increases to our labor costs and adversely affect our operating margin.
−Removed: Our failure to retain our current customers, renew our existing customer contracts and enter into customer contracts with new customers could adversely affect our business, results of operations and financial condition.
−Removed: Our success depends on our ability to retain our current customers, renew our existing customer contracts and obtain new customers.
−Removed: Our ability to do so generally depends on a variety of factors, including the quality, price and responsiveness of our services, as well as our ability to market these services effectively and to differentiate ourselves from our competitors.
−Removed: In addition, renewal rates and our ability to obtain new customers are generally adversely affected by difficult economic and business conditions.
−Removed: We cannot assure you that we will be able to obtain new customers, renew existing customer contracts at the same or higher rates or that our current customers will not turn to competitors, cease operations or terminate contracts with us.
−Removed: Our failure to renew a significant number of our existing contracts would have an adverse effect on our results of operations and financial condition and failure to obtain new customers could have an adverse effect on our growth and results of operations.
−Removed: Increases in fuel and energy costs could adversely affect our operating costs.
−Removed: The price of fuel and energy needed to run our vehicles and equipment is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by the Organization of the Petroleum Exporting Countries, or OPEC, and other oil and gas producers, war and unrest in oil producing countries, regional production patterns, limits on refining capacities, natural disasters and environmental concerns.
−Removed: Any increase in fuel and energy costs could adversely affect our operating costs.
−Removed: As a result of our significant presence in energy producing regions, a prolonged drop in energy prices has in the past, and may in the future, negatively impact our financial resu lts.
−Removed: We have a substantial number of plants and conduct a significant portion of our business in energy producing regions in the U.S.
−Removed: In general, we are relatively more dependent on business in these regions than are many of our competitors.
−Removed: In the past, dramatic declines in energy prices adversely affected our customers in the energy producing industry, which had a corresponding adverse effect on our customers in the businesses which service or supply the energy producing industry as well as other customers that benefitted from the success of our customers in the energy producing industry.
−Removed: Such conditions caused in the past, and may cause in the future, elevated headcount reductions at our customers and reduced margins for these accounts.
−Removed: This in turn caused in the past and may cause in the future an adverse impact on our organic growth.
−Removed: Recent trends indicate that increased energy prices have resulted in stabilized or improved wearer levels at existing customers in our North American energy-dependent markets.
−Removed: Our operating results are also directly impacted by the costs of the gasoline used to fuel our vehicles and the natural gas used to operate our plants.
−Removed: While it is difficult to quantify the positive and negative impacts on our future financial results from changes in energy prices, in general, we believe that significant decreases in oil and natural gas prices would have an overall negative impact on our results due to cutbacks by our customers both in, and dependent upon, the oil and natural gas industries, which would outweigh the benefits in our operating costs from lower energy costs.
−Removed: Fluctuations in the nuclear portion of our Specialty Garments segment, including the loss of key customers or a significant reduction in our business derived from key customers, could disproportionately impact our revenue and net income and create volatility in the price of our Common Stock.
−Removed: Our nuclear decontamination business is affected by shut-downs, outages and clean-ups of the nuclear facilities we service.
−Removed: We are not able to control or predict with certainty when such shut-downs, outages and clean-ups will occur.
−Removed: In addition, our nuclear decontamination business tends to generate more revenue in the first and third fiscal quarters, which is when nuclear power plants typically schedule their plant outages and refuelings and thereby increase nuclear garment utilization.
−Removed: Moreover, a significant percentage of this segment’s revenues are generated from a limited number of nuclear power plant operator customers.
−Removed: This concentration subjects this business to significant risks and may result in greater volatility in this segment’s results of operations.
−Removed: Fluctuations in our nuclear decontamination business, including the loss of key customers of our Specialty Garments business, or a significant reduction in our business derived from such key customers, could materially adversely affect our results of operations and financial condition.
−Removed: Our international business results are influenced by currency fluctuations and other risks that could have an adverse effect on our results of operations and financial condition.
−Removed: A portion of our sales is derived from international markets.
−Removed: Revenue denominated in currencies other than the U.S.
−Removed: dollar represented approximately 7.0%, 8.1% and 7.4% of total consolidated revenues for fiscal 2019, the fiscal year ended August 25, 2018 (“fiscal 2018”) and the fiscal year ended August 26, 2017 (“fiscal 2017”), respectively.
−Removed: The operating results of our international subsidiaries are translated into U.S.
−Removed: dollars and such results are affected by movements in foreign currencies relative to the U.S.
−Removed: The strength of the U.S.
−Removed: dollar has generally increased recently as compared to other currencies, which has had, and may continue to have, an adverse effect on our operating results as reported in U.S.
−Removed: In addition, a weaker Canadian dollar increases the costs to our Canadian operations of merchandise and other operational inputs that are sourced from outside Canada, which has the effect of reducing the operating margins of our Canadian business if we are unable to recover these additional costs through price adjustments with our Canadian customers.
−Removed: Our international operations are also subject to other risks, including the requirement to comply with changing and conflicting national and local regulatory requirements;
−Removed: potential difficulties in staffing and labor disputes;
−Removed: managing and obtaining support and distribution for local operations;
−Removed: credit risk or financial condition of local customers;
−Removed: potential imposition of restrictions on investments;
−Removed: potentially adverse tax consequences, including imposition or increase of withholding and other taxes on remittances and other payments by subsidiaries;
−Removed: foreign exchange controls;
−Removed: and local political and social conditions.
−Removed: In addition, U.S.
−Removed: and foreign trade policies and tariffs and other impositions on imported goods may have a negative impact on our business.
−Removed: There can be no assurance that the foregoing factors will not have an adverse effect on our international operations or on our consolidated financial condition and results of operations.
−Removed: We own and operate manufacturing facilities in Mexico.
−Removed: Violence, crime and instability in Mexico has had, and may continue to have, an adverse effect on our operations, including the hijacking of our trucks and the implementation of security measures to pr otect our employees.
−Removed: We are not insured against such criminal attacks and there can be no assurance that losses that could result from an attack on our trucks or our personnel would not have a material adverse effect on our business, results of operations and financial condition.
−Removed: Operations in developing nations present several additional risks, including greater fluctuation in currencies relative to the U.S.
−Removed: dollar, economic and governmental instability, civil disturbances, volatility in gross domestic pro duction, Foreign Corrupt Practice Act compliance issues and nationalization and expropriation of private assets, which could have a material adverse effect on our business, results of operations and financial condition.
−Removed: Adverse global financial and economic conditions may result in impairment of our goodwill and intangibles.
−Removed: Our market capitalization, from time to time, has experienced volatility due in part to turbulent economic conditions and disruption in the global equity and credit markets.
−Removed: Under accounting principles generally accepted in the United States (“U.S.
−Removed: GAAP”), we may be required to record an impairment charge if changes in circumstances or events indicate that the carrying values of our goodwill and intangible assets exceed their fair value and are not recoverable.
−Removed: Any significant and other-than-temporary decrease in our market capitalization could be an indicator, when considered together with other factors, that the carrying values of our goodwill and intangible assets exceed their fair value, which may result in our recording an impairment charge.
−Removed: We are unable to predict economic trends, but we continue to monitor the impact of changes in economic and financial conditions on our operations and on the carrying value of our goodwill and intangible assets.
−Removed: Should the value of our acquired goodwill or one or more of our acquired intangibles become impaired, our consolidated earnings and net worth may be materially adversely affected.
−Removed: Our failure to properly and efficiently design, construct, implement and operate a new customer relationship management (CRM) computer system could materially disrupt our operations, adversely impact the servicing of our customers and have a material adverse effect on our financial performance.
−Removed: In the fourth quarter of fiscal 2018, we initiated a multiyear CRM project to further develop, implement and deploy a third-party application we licensed.
−Removed: This new solution is intended to improve functionality, capability and information flow as well as increase automation in servicing our customers.
−Removed: The new system is also intended to improve functionality and information flow and increase automation in servicing our customers.
−Removed: Our previous CRM systems project, which we terminated in 2018, did not result in the successful implementation of a CRM system.
−Removed: The failure to properly, efficiently and economically complete and operate a new system on a timely basis or at all could materially disrupt our operations, adversely impact the servicing of our customers and have a material adverse effect on our financial results.
−Removed: If our information technology systems suffer interruptions or failures, including as a result of cyber-attacks, our business operations could be disrupted.
−Removed: Our information technology systems serve an important role in the efficient operation of our business.
−Removed: The failure of these information technology systems to perform as we anticipate could disrupt our business and negatively impact our results of operations.
−Removed: In addition, our information technology systems could be damaged or cease to function properly due to any number of causes, such as catastrophic events, power outages, security breaches, computer viruses or cyber-based attacks.
−Removed: While we have contingency plans in place to prevent or mitigate the impact of these events, if such events were to occur and our disaster recovery plans do not effectively address the issues on a timely basis, we could suffer interruptions in our ability to manage our operations and service our customers, and we may be required to make a significant investment to fix or replace our information technology systems, each of which may have a material adverse effect on our business and financial results.
−Removed: In addition, if customer or our proprietary information is compromised by a security breach or cyber-attack, it could have a material adverse effect on our business.
−Removed: We are subject to numerous laws and regulations in the United States and internationally designed to protect the information of clients, customers, employees, and other third parties that we collect and maintain.
−Removed: These laws and regulations are increasing in complexity and number.
−Removed: If we fail to comply with such laws or regulations, it could have an adverse effect on our business.
−Removed: Failure to comply with state and federal regulations to which we are subject may result in penalties or costs that could have a material adverse effect on our business.
−Removed: Our business is subject to various state and federal regulations, including employment laws and regulations, minimum wage requirements, overtime requirements, working condition requirements, citizenship requirements, healthcare insurance mandates, data protection requirements and other laws and regulations.
−Removed: We have incurred, and will continue to incur, capital and operating expenditures and other costs in the ordinary course of our business in complying with the laws and regulations to which we are subject.
−Removed: Any appreciable increase in the statutory minimum wage rate, income or overtime pay, costs of complying with healthcare insurance mandates, changes in the requirements under the Occupational Safety and Health Act of 1970, as amended, changes in environmental compliance requirements, or changes to immigration laws and citizenship requirements would likely result in an increase in our labor costs and/or contribute to a shortage of available labor and such cost increase or labor shortage, or the penalties for failing to comply with such statutory minimums or regulations, could have an adverse effect on our business, liquidity and results of operations.
−Removed: The impact of any new laws and regulations cannot be predicted.
−Removed: Any failure to comply with applicable laws and regulations could result in substantial fines by government authorities, payment of damages to private litigants or possible revocation of our authority to conduct our operations, which could adversely affect our ability to service customers and our results of operations.
−Removed: Our business may be subject to seasonal and quarterly fluctuations.
−Removed: Historically, our revenues and operating results have varied from quarter to quarter and are expected to continue to fluctuate in the future.
−Removed: In addition, our operating results historically have been seasonally lower during the second and fourth fiscal quarters than during the other quarters of the fiscal year.
−Removed: We incur various costs in integrating or establishing newly acquired businesses or start-up operations, and the profitability of a new location is generally expected to be lower in the initial period of its operation than in subsequent periods.
−Removed: Start-up operations in particular lack the support of an existing customer base and require a significantly longer period to develop sales opportunities and meet targeted operating results.
−Removed: These factors, among others, may cause our results of operations in some future quarters to be below the expectations of securities analysts and investors, which could have an adverse effect on the market price of our Common Stock.
−Removed: Loss of our key management or other personnel could adversely impact our business.
−Removed: Our success is largely dependent on the skills, experience and efforts of our senior management, including our President and Chief Executive Officer, and certain other key personnel.
−Removed: If, for any reason, one or more senior executives or key personnel were not to remain active in our Company, our results of operations could be adversely affected.
−Removed: Our future success also depends upon our ability to attract and retain key employees.
−Removed: There is competition in the market for the services of such qualified personnel and hourly workers and our failure to attract and retain such personnel or workers could adversely affect our results of operations.
−Removed: We depend on third parties to supply us with raw materials and our results of operations could be adversely affected if we are unable to obtain adequate raw materials in a timely manner.
−Removed: We manufactured approximately 67% of all garments which we placed in service during fiscal 2019.
−Removed: These were primarily work pants and shirts manufactured at three of our plants located in San Luis Potosi, Mexico, one plant located in Managua, Nicaragua, as well as at subcontract manufacturers that we utilize to supplement our manufacturing capacity in periods of high demand.
−Removed: The balance of the garments used in our programs are purchased from a variety of industry suppliers.
−Removed: While we currently acquire the raw materials with which we produce our garments from a limited number of suppliers, we believe that such materials are readily available from other sources.
−Removed: To date, we have experienced no significant difficulty in obtaining any of our raw materials or supplies.
−Removed: However, if we were to experience difficulty obtaining any of our raw materials from such suppliers and were unable to obtain new materials or supplies from other industry suppliers, or if the cost of obtaining such materials or supplies were to increase, it could adversely affect our results of operations.
−Removed: Unexpected events could disrupt our operations and adversely affect our operating results.
−Removed: Unexpected events, including, without limitation, fires at facilities, natural disasters, such as hurricanes, earthquakes and tornados, public health emergencies, war or terrorist activities, unplanned utility outages, supply disruptions, failure of equipment or information systems, temporary or long-term disruption of our computer systems, or changes in laws and/or regulations impacting our business, could adversely affect our operating results.
−Removed: These events could result in disruption of customer service, physical damage to one or more key operating facilities, the temporary closure of one or more key operating facilities or the temporary disruption of information systems.
−Removed: In addition, the destruction or temporary loss of our distribution facility in Owensboro, Kentucky would have a material adverse effect on our operations and financial results.
−Removed: Changes in or new interpretations of the governmental regulatory framework may affect our contract terms and may reduce our sales or profits.
−Removed: A portion of our total consolidated revenues is derived from business with U.S.
−Removed: federal, state and local governments and agencies.
−Removed: Changes or new interpretations in, or changes in the enforcement of, the statutory or regulatory framework applicable to services provided under governmental contracts or bidding procedures could result in fewer new contracts or contract renewals, modifications to the methods we apply to price government contracts or in contract terms of shorter duration than we have historically experienced, any of which could result in lower sales or profits than we have historically achieved, which could have an adverse effect on our results of operations.
−Removed: The price of our Common Stock may be highly volatile, which could result in significant price declines.
−Removed: The price of our Common Stock may experience significant volatility.
−Removed: Such volatility may be caused by fluctuations in our operating results, changes in earnings estimated by investment analysts, the number of shares of our Common Stock traded each day, the degree of success we achieve in implementing our business and growth strategies, changes in business or regulatory conditions affecting us, our customers or our competitors and other factors.
−Removed: In addition, the New York Stock Exchange historically has experienced extreme price and volume fluctuations that often have been unrelated to, or disproportionate to, the operating performance of its listed companies.
−Removed: These fluctuations, as well as general economic, political and market conditions, may adversely affect the market price of our Common Stock.
−Removed: We are controlled by our principal shareholders, and our other shareholders may be unable to affect the outcome of shareholder voting.
−Removed: As of October 17, 2019, to the Company’s knowledge, the members of the Croatti family owned, directly or indirectly, in the aggregate approximately 184,959 shares of our Common Stock and approximately 3,643,009 shares of our Class B Common Stock, which represents approximately 20.2% of the aggregate number of outstanding shares of our Common Stock and Class B Common Stock, but approximately 70.8% of the combined voting power of the outstanding shares of our Common Stock and Class B Common Stock.
−Removed: As a result, the members of the Croatti family, acting with other family members, could effectively control most matters requiring approval by our shareholders, including the election of a majority of the directors.
−Removed: While historically the members of the Croatti family have individually voted their respective shares of Class B Common Stock in the same manner, there is no contractual understanding requiring this and there is no assurance that the family members will continue to individually vote their shares of Class B Common Stock in the same manner.
−Removed: This voting control by the members of the Croatti family, together with certain provisions of our by-laws and articles of organization, could have the effect of delaying, deferring or preventing a change in control of our Company that would otherwise be beneficial to our public shareholders.
−Removed: Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures or internal controls over financial reporting.
−Removed: The design and effectiveness of our disclosure controls and procedures and internal controls over financial reporting may not prevent all errors, misstatements or misrepresentations.
−Removed: While management will continue to review the effectiveness of our disclosure controls and procedures and internal controls over financial reporting, there can be no guarantee that our internal controls over financial reporting will be effective in accomplishing all control objectives all of the time.
−Removed: Deficiencies, including any material weakness, in our internal controls over financial reporting which may occur in the future could result in misstatements of our results of operations, restatements of our financial statements, a decline in our stock price, or otherwise materially adversely affect our business, reputation, results of operations, financial condition or liquidity.
−Removed: If we are unable to accurately predict our future tax liabilities or become subject to increased levels of taxation or our tax contingencies are unfavorably resolved, our results of operations and financial condition could be adversely affected.
−Removed: Tax legislation commonly known as the “Tax Cuts and Jobs Act” (the “Act”), signed into law on December 22, 2017, made significant changes to U.S.
−Removed: federal income tax laws, including a reduction of the corporate income tax rate from a top marginal rate of 35% to a flat rate of 21%.
−Removed: Certain provisions of the Act include, without limitation, new taxes on certain foreign sourced earnings and limitations on the deductibility of interest expense and executive compensation.
−Removed: The Act also imposed new limitations on the deduction of net operating losses and modified or repealed other business deductions and credits.
−Removed: The overall impact of the Act on our business and financial condition remains uncertain and may not become evident for some time.
−Removed: The interpretations of many provisions of the Act remain unclear.
−Removed: We cannot predict when or to what extent any U.S.
−Removed: federal tax laws, regulations, interpretations, or rulings clarifying the Act will be issued or the impact of any such guidance on the Company.
−Removed: Any such tax laws, regulations, interpretations, or rulings could have an adverse effect on our
−Removed: financial condition and results of operations.
−Removed: Certain key provisions of the Act that could impact us include, but are not limited to, international tax provisions that affect the overall tax rate applicable to income earned from non-U.S.
−Removed: operations and limitations on the deductibility of executive compensation.
−Removed: Other changes in tax laws or regulations in the jurisdictions in which we do business, including the United States or various states, could further increase our effective tax rate o r impose new restrictions, costs or prohibitions on our current practices , reduce our net income and adversely affect our cash flows .
−Removed: During the second quarter of fiscal 2019, the Company completed its accounting for the tax effects of enactment of the Act as required by the SEC’s Staff Accounting Bulletin No.
−Removed: 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”).
−Removed: There were no changes from the provisional calculation as recorded through August 25, 2018 to the final calculation .
−Removed: In addition, we are also subject to tax audits in the United States and other jurisdictions in which we do business, including, but not limited to, various states, as well as Canada and the Canadian provinces of Alberta, British Columbia, Ontario, Saskatchewan, Quebec and New Brunswick.
−Removed: These audits can be complicated and can require several years to resolve.
−Removed: The final resolution of any such tax audit could result in an increase in our income tax liabilities.
−Removed: Although we believe that our current tax provisions are reasonable and appropriate, there can be no assurance that these items will be settled for the amounts accrued, that additional tax exposures will not be identified in the future or that additional tax reserves will not be necessary for any such exposures.
−Removed: Any increase in the amount of taxes we owe as a result of challenges to our tax filing positions could result in a material adverse effect on our business, results of operations and financial condition.
−Removed: UNRESOLVED STAFF COMMENTS
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