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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, including, without limitation, as a result of extraordinary events or circumstances such as the COVID-19 pandemic, and their impact on our customers’ businesses and workforce levels, disruptions of our business and operations, including limitations on, or closures of, our facilities, or the business and operations of our customers or suppliers in connection with extraordinary events or circumstances such as the COVID-19 pandemic, 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, which such supply could be severely disrupted as a result of extraordinary events or circumstances such as the COVID-19 pandemic, 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, including, without limitation, as a result of extraordinary events or circumstances such as the COVID-19 pandemic, the continuing increase in domestic healthcare costs, increased workers’ compensation claim costs, increased healthcare claim costs, including as a result of extraordinary events or circumstances such as the COVID-19 pandemic, our ability to retain and grow our customer base, demand and prices for our products and services, fluctuations in our Specialty Garments business, political instability, supply chain disruption or infection among our employees in Mexico and Nicaragua where our principal garment manufacturing plants are located, including, without limitation, as a result of extraordinary events or circumstances such as the COVID-19 pandemic, 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 the other factors described under “Item 1A.
+Added: Such factors include, but are not limited to, uncertainties caused by adverse economic conditions, including, without limitation, as a result of extraordinary events or circumstances such as the COVID-19 pandemic, and their impact on our customers’ businesses and workforce levels, disruptions of our business and operations, including limitations on, or closures of, our facilities, or the business and operations of our customers or suppliers in connection with extraordinary events or circumstances such as the COVID-19 pandemic, 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, which such supply could be severely disrupted as a result of extraordinary events or circumstances such as the COVID-19 pandemic, 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, including, without limitation, as a result of extraordinary events or circumstances such as the COVID-19 pandemic, the continuing increase in domestic healthcare costs, increased workers’ compensation claim costs, increased healthcare claim costs, including as a result of extraordinary events or circumstances such as the COVID-19 pandemic, our ability to retain and grow our customer base, demand and prices for our products and services, fluctuations in our Specialty Garments business, political instability, supply chain disruption or infection among our employees in Mexico and Nicaragua where our principal garment manufacturing plants are located, including, without limitation, as a result of extraordinary events or circumstances such as the COVID-19 pandemic, 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 SEC, 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 the other factors described under “Item 1A.
Risk Factors” and elsewhere in this Annual Report on Form 10-K.
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
+Added: RISKS RELATING TO OUR BUSINESS AND OPERATIONS
We face intense competition within our industry, which may adversely affect our results of operations and financial condition.
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Our leading competitors include Cintas Corporation, Alsco and Aramark.
−Removed: The remainder of the market, however, is divided among more than 600 smaller businesses, many of which serve one or a limited
−Removed: 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.
+Added: 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.
+Added: In addition to our traditional rental competitors, we may increasingly
+Added: 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.
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.
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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, including public health events such as the COVID-19 pandemic, may affect our customer base and negatively impact our sales and operating results.
+Added: Adverse economic and business conditions or geopolitical events, including public health events such as the COVID-19 pandemic, may affect our business and our customer base and negatively impact our sales and operating results.
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.
+Added: In addition, geopolitical conflicts, calamities or other events, including public health events such as the COVID-19 pandemic, may disrupt domestic and global business and financial markets and conditions.
+Added: Adverse economic conditions, including a significant increase in inflation, could also adversely impact our business, including our operating margins.
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.
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, 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.
−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 certain sites.
−Removed: We have accrued certain costs related to certain sites, including but not limited to, sites in Woburn and Somerville, Massachusetts, 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 a site in Woburn, Massachusetts.
−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 a site in Somerville, Massachusetts.
−Removed: We have received, responded, and agreed to undertake additional response actions pertaining to 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 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 respective 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 such 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.
Our failure to implement successfully our acquisition strategy and to grow our business, due to the COVID-19 pandemic or otherwise, could adversely affect our ability to increase our revenues and could negatively impact our profitability.
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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.
+Added: In general, 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.
Moreover, it is generally expected that healthcare costs in the United States will increase over the coming years at rates in excess of inflation.
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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.
+Added: In addition, we face wage pressure as the result of a low unemployment environment and increased competition in hiring.
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.
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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,
−Removed: regional production patterns, limits on refining capacities, natural disasters , environmental concerns and public health emergencies, including pandemics such as the COVID-19 pandemic .
+Added: 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, environmental concerns and public health emergencies, including pandemics such as the COVID-19 pandemic.
Any increase in fuel and energy costs could adversely affect our operating costs.
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In general, we are relatively more dependent on business in these regions than are many of our competitors.
−Removed: For example, the dramatic decrease in oil prices beginning in 2014 directly affected our customers in the oil industry as they curtailed their level of operations, which had a corresponding effect on our customers in businesses which service or supply the oil industry as well as our customers in unrelated businesses located in areas which had benefited from the economic expansion generated by the robust growth driven by the higher oil prices in prior years.
−Removed: As a result, our organic growth in periods following that dramatic decrease in oil prices was negatively impacted by elevated headcount reductions in our wearer base as well as increased lost accounts.
−Removed: Recent volatility in energy prices have had and may continue to have a significant impact on wearer levels at existing customers in our North American energy-dependent markets.
+Added: If a dramatic decrease in oil prices were to occur, it could impact our customers in the oil industry and cause those customers to curtail their level of operations, which could have a corresponding effect on our customers in businesses which service or supply the oil industry as well as our customers in unrelated businesses.
+Added: As a result, our organic growth in periods following a dramatic decrease in oil prices could be negatively impacted by elevated headcount reductions in our wearer base as well as increased lost accounts.
+Added: Recent volatility in energy prices has had and may continue to have a significant impact on wearer levels at existing customers in our North American energy-dependent markets.
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.
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dollar, economic and governmental instability, civil disturbances, volatility in gross domestic production, 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, including as a result of the COVID-19 pandemic, 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.
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.
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.
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.
+Added: We began deployment of our new CRM project during the third quarter of fiscal 2021, and the deployment is ongoing.
+Added: This new system is intended to improve functionality, capability and information flow as well as increase automation in servicing our customers.
+Added: The failure to properly, efficiently and economically complete, implement 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.
If our information technology systems suffer interruptions or failures, including as a result of cyber-attacks, our business operations could be disrupted or other material adverse impacts on our business could result .
1 unchanged sentence
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.
+Added: 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, ransomware, computer viruses or cyber-based attacks.
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, employee or our proprietary information is compromised by a security breach or cyber-attack, it could have a material adverse effect on our business, including as a result of remedial actions that we may be required to take, potential liabilities and penalties, loss of business and reputational damage.
+Added: In addition, if customer, employee or our proprietary information is compromised by a security breach or cyber-attack or other event, it could have a material adverse effect on our business, including as a result of remedial actions that we may be required to take, potential liabilities and penalties, loss of business and reputational damage.
Our failure to properly respond to any such event could also result in exposure to liability.
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If we fail to comply with such laws or regulations, we may be subject to litigation, monetary damages, enforcement actions or fines in one or more jurisdictions, which 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.
+Added: We also rely on systems and applications provided by third-party vendors for certain information technology services.
+Added: If these third-party vendors, or our suppliers or other vendors, experience service interruptions, security breaches, cyber-attacks, computer viruses, ransomware or other similar events, customer, employee or other proprietary information could be compromised and it could as a result or otherwise, have an adverse effect on our business.
Our business may be subject to seasonal and quarterly fluctuations.
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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.
+Added: Loss of our key management or other personnel and our inability to hire qualified personnel could adversely impact our business.
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.
1 unchanged sentence
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.
+Added: There is competition in the market for the services of such qualified personnel and hourly workers.
+Added: In addition, we face wage pressure as the result of a low unemployment environment and increased competition in hiring.
+Added: 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.
+Added: Our failure to attract and retain such personnel or workers could adversely affect our results of operations.
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 66% of all garments which we placed in service during fiscal 2020.
+Added: We manufactured approximately 64% of all garments we placed in service during fiscal 2021.
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.
1 unchanged sentence
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.
+Added: To date, we have experienced no significant difficulty in obtaining
+Added: any of our raw materials or supplies.
+Added: 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, including in any case as a result of the COVID-19 pandemic, it could adversely affect our results of operations.
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, pandemics such as the COVID-19 pandemic, 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.
+Added: Unexpected events, including, without limitation, fires at facilities, natural disasters as a result of climate change or otherwise, such as hurricanes, earthquakes, floods and tornados, public health emergencies, war or terrorist activities, unplanned utility outages, pandemics such as the COVID-19 pandemic, 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.
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.
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: The COVID-19 pandemic and resulting material adverse economic conditions have had, and may continue to have, a significant adverse impact on our business and could have a more material adverse impact on our business, financial condition and results of operations .
−Removed: An outbreak of a novel strain of coronavirus (COVID-19) has occurred in a number of countries, including the United States, Canada, Mexico, Nicaragua and the European countries in which we operate.
−Removed: National, state and local governments have responded to the COVID-19 pandemic in a variety of ways, including, without limitation, by declaring states of emergency, restricting people from gathering in groups or interacting within a certain physical distance (i.e., social distancing), and in certain cases, ordering businesses to close or limit operations or people to stay at home.
+Added: The COVID-19 pandemic and resulting material adverse economic conditions have had in the past, and may continue to have, a significant adverse impact on our business and could have a material adverse impact on our business, financial condition and results of operations in the future.
+Added: An outbreak of a novel strain of coronavirus (COVID-19) and its variants has occurred in a number of countries, including the United States, Canada, Mexico, Nicaragua and the European countries in which we operate.
+Added: National, state and local governments have responded to the COVID-19 pandemic in a variety of ways, including, without limitation, by declaring states of emergency, restricting people from gathering in groups or interacting within a certain physical distance (i.e., social distancing), and in certain cases, ordering businesses to close or limit operations or to require unvaccinated people to stay at home.
Although we have been permitted to continue to operate in all of the jurisdictions in which we operate, including in jurisdictions that have mandated the closure of certain businesses and we expect to be permitted to operate under any orders or other restrictions imposed by any government authorities in the future, there is no assurance that we will be permitted to operate under every future government order or other restriction and in every location.
7 unchanged sentences
As a result, any significant increases in healthcare costs as a result of COVID-19 or otherwise could have a material adverse impact on our business, financial condition and results of operations.
−Removed: The COVID-19 pandemic has also resulted in material adverse economic conditions that are impacting, and may continue to impact, our business and the businesses of our suppliers and customers.
−Removed: Unemployment levels have increased significantly, and the U.S.
−Removed: economy has entered an economic recession.
−Removed: Some analysts have predicted that the current economic recession may persist for a significant period of time and become severe.
−Removed: Although the extent and duration of the impact of the COVID-19 pandemic on our business and operations and the business and operations of our customers and suppliers remain uncertain, the continued spread of COVID-19, the imposition of related public health measures and travel, health-related, business and other restrictions and the resulting materially adverse economic conditions may materially adversely impact our business, financial condition, results of operations and cash flows.
−Removed: The COVID-19 pandemic has also resulted in severe disruption and volatility in the financial markets, and the market price of our Common Stock on the New York Stock Exchange (“NYSE”) has, at times, declined dramatically.
−Removed: Depending on the extent and duration of the COVID-19 pandemic, the price of our Common Stock on the NYSE may continue to experience volatility and declines.
+Added: The COVID-19 pandemic has, at times, also resulted in material adverse economic conditions that have impacted, and may again impact, our business and the businesses of our suppliers and customers.
+Added: Although the extent and duration of the impact of the COVID-19 pandemic on our business and operations and the business and operations of our customers and suppliers remain uncertain, including as a result of the emergence of new variants of the virus and delays in the distribution and administration of various vaccines, particularly in certain geographic regions, the continued spread of COVID-19, the imposition of related public health measures and travel, health-related, business and other restrictions and the resulting material adverse economic conditions may materially adversely impact our business, financial condition, results of operations and cash flows.
+Added: The COVID-19 pandemic has also, at times, resulted in severe disruption and volatility in the financial
+Added: markets, and the market price of our Common Stock on the New York Stock Exchange (“NYSE”) has, at times, declined dramatically.
+Added: Depending on the extent and duration of the COVID-19 pandemic, the price of our Common Stock on the NYSE may experience volatility and declines.
+Added: We are controlled by our principal shareholders, and our other shareholders may be unable to affect the outcome of shareholder voting.
+Added: As of October 22, 2021, to the Company’s knowledge, the members of the Croatti family and other family members owned, directly or indirectly, in the aggregate approximately 3,643,009 shares of our Class B Common Stock, which represents approximately 19.3% of the aggregate number of outstanding shares of our Common Stock and Class B Common Stock, but approximately 70.5% of the combined voting power of the outstanding shares of our Common Stock and Class B Common Stock.
+Added: To the Company’s knowledge, the members of the Croatti family and other family members owned, directly or indirectly, a number of shares of Common Stock.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: LEGAL AND REGULATORY RISKS
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: Over the years, 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.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: 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 certain sites.
+Added: We have accrued certain costs related to certain sites, including but not limited to, sites in Woburn and Somerville, Massachusetts, as it has been determined that the costs are probable and can be reasonably estimated.
+Added: We have potential exposure related to a parcel of land (the “ Central Area”) related to a site in Woburn, Massachusetts.
+Added: Currently, the consent decree for the Woburn site does not define or require any remediation work in the Central Area.
+Added: 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.
+Added: 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.
+Added: We have accrued costs to perform certain work responsive to the EPA’s comments.
+Added: Additionally, we have implemented mitigation measures and continue to monitor environmental conditions at a site in Somerville, Massachusetts.
+Added: We have received, responded, and agreed to undertake additional actions responsive to notices received pertaining to 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.
+Added: We have received demands from the local transit authority for reimbursement of certain costs associated with its construction of a new
+Added: municipal transit station in the area of the Somerville site.
+Added: This station is part of an ongoing extension of the transit system.
+Added: We have reserved for costs in connection with this matter;
+Added: however, in light of the uncertainties associated with this matter, these costs and the related reserve may change.
+Added: 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.
+Added: 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.
+Added: 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.
+Added: We also have nuclear garment decontamination facilities in the United Kingdom and the Netherlands.
+Added: These facilities are licensed and regulated by the respective country’s applicable federal agency.
+Added: 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 such facilities.
+Added: 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.
+Added: In addition, our nuclear garment decontamination operations are subject to asset retirement obligations related to the decommissioning of our nuclear laundry facilities.
+Added: We recognize as a liability the present value of the estimated future costs to decommission these facilities.
+Added: 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.
+Added: 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.
+Added: In addition to contingencies and claims relating to environmental compliance matters, we may from time to time be subject to legal or regulatory proceedings and claims related to our business operations which may adversely affect our financial condition and operating results.
+Added: In addition to contingencies and claims relating to environmental compliance matters, we are subject from time to time to legal or regulatory proceedings, claims and disputes arising from the conduct of our business operations, including personal injury claims, customer contract matters and employment claims.
+Added: Certain of these claims are typically not covered by our available insurance.
+Added: In addition, claims occasionally result in significant investigation and litigation expenses and, if successful, may result in material losses to us.
+Added: Certain claims may also result in significant adverse publicity against us.
+Added: 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.
+Added: Failure to comply with state and federal rules and regulations to which we are subject may result in penalties or costs that could have a material adverse effect on our business.
+Added: Our business is subject to various state and federal rules and 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, rules and regulations, including those of the SEC and New York Stock Exchange and those relating to accounting.
+Added: 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.
+Added: 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.
+Added: The impact of any new laws, rules and regulations, or changes to laws, rules and regulations, cannot be predicted and could cause us to incur substantial compliance costs.
+Added: Any failure to comply with applicable laws, rules 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.
Changes in or new interpretations of the governmental regulatory framework may affect our contract terms and may reduce our sales or profits.
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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.
+Added: GENERAL RISK FACTORS
+Added: Adverse global financial and economic conditions may result in impairment of our goodwill and intangibles.
+Added: 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.
+Added: Under accounting principles generally accepted in the United States (“U.S.
+Added: 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.
+Added: 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.
+Added: We are unable to predict economic trends, but we continue to monitor the impact of changes in economic and financial conditions, including as a result of the COVID-19 pandemic, on our operations and on the carrying value of our goodwill and intangible assets.
+Added: 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.
The price of our Common Stock may be highly volatile, which could result in significant price declines.
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.
+Added: 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, including the impact of the COVID-19 pandemic.
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.
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 22, 2020, to the Company’s knowledge, the members of the Croatti family owned, directly or indirectly, in the aggregate approximately 145,452 shares of our Common Stock and approximately 3,634,009 shares of our Class B Common Stock, which represents approximately 20.0% 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.
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.
+Added: The design and effectiveness of our disclosure controls and procedures and internal controls over financial reporting, including new and revised financial and information technology-related controls that we have been designing, implementing and operating in connection with the deployment of our new CRM system, may not prevent all errors, misstatements or misrepresentations.
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.
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The rules dealing with U.S.
−Removed: federal, state and local income taxation are constantly under review by persons involved in the legislative process and by the Internal Revenue Service (“IRS”) and the U.S.
−Removed: Treasury Department.
+Added: federal, state and local and non-U.S.
+Added: taxation are regularly under review by persons involved in the legislative process and by the Internal Revenue Service (“IRS”) and the U.S.
+Added: Treasury Department and other taxing authorities.
Changes to tax laws (which changes may have retroactive application) could adversely affect us or holders of our Common Stock.
−Removed: For example, tax legislation commonly known as the “Tax Cuts and Jobs Act” (the “TCJA”), 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 TCJA include, without limitation, new taxes on certain foreign sourced earnings and limitations on the deductibility of interest expense and executive compensation.
−Removed: The TCJA also imposed new limitations on the deduction of net operating losses and modified or repealed other business deductions and credits.
−Removed: Additionally, on March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which, among other things, suspends the limitation on the deduction for net operating losses in taxable years beginning before January 1, 2021, permits a 5-year carryback of net operating losses arising in taxable years beginning after December 31, 2017 and before January 1, 2021, and generally amends the TCJA by capping the limitation on the deduction for net interest expense at 50% (as opposed to 30%) of adjusted taxable income for taxable years beginning in 2019 and 2020.
−Removed: We cannot predict when or to what extent any U.S.
−Removed: federal tax laws, regulations, interpretations, or rulings clarifying the TCJA or the CARES Act will be issued or the impact of any such guidance on the Company.
Any such tax laws, regulations, interpretations, or rulings could have an adverse effect on our financial condition and results of operations.
−Removed: Certain key provisions of the TCJA 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
−Removed: business, including the United States or various states, could further increase our effective tax rate or 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 TCJA 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.
+Added: These changes could subject us to additional income taxes and non-income taxes (such as payroll, sales, use, value-added, digital tax, net worth, property, and goods and services taxes), which in turn could materially
+Added: affect our financial position and results of operations.
+Added: Additionally, new, changed, modified, or newly interpreted or applied tax laws could increase our customers’ and our compliance costs, operating and other costs, as well as the costs of our products.
+Added: In recent years, many such changes have been made, and changes are likely to continue to occur in the future.
+Added: As we expand the scale of our business activities, any changes in the U.S.
+Added: taxation of such activities may increase our effective tax rate and harm our business, financial condition, and results of operations.
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.
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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.