What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2021-05-07 compared with 2021-02-09 · 23 added, 19 removed, 382 unchanged (10% of the section changed)

8 unchanged sentences

While distribution of the vaccines commenced in the UK and U.S.

in late 2020, there have been logistical and operational challenges with the rollout, demand for the vaccine has far exceeded supply, and it will take some time for the global population to receive vaccines and for widespread immunity to develop.

in late 2020, there have been logistical and operational challenges with the rollout, and global demand for the vaccine has far exceeded supply.

It will take some time for the global population to receive vaccines, allowing for widespread immunity to develop.

At the same time, new and potentially more contagious variants of the virus are developing in several countries and regions in which we operate.

We operate a shared services center in Pune, India that provides important finance and IT support services.

The recent substantial increase of reported COVID-19 transmission rates in that country due to the emergence of a more virulent variant of the virus has led to a significant spike in illness and death rates.

Hospitals and medical facilities are overwhelmed and there is a shortage of oxygen and other medical supplies.

If the situation in India does not improve, our operations and employees there could be negatively impacted.

When and as normal business operations resume, we will need to expand globally the safety measures we have already undertaken at sites conducting essential business, such as enhanced sanitation procedures, health checks and social distancing protocols, none of which can completely eliminate the risk of exposure or spread of COVID-19.

6 unchanged sentences

We entered into a $300 million secured credit facility to strengthen our liquidity position but have not drawn on this facility to date.

If there is a long-term economic downturn or a prolonged recession as a result of the pandemic, we could face additional liquidity needs and challenges.

If there is a long-term economic downturn or a prolonged recession as a result of the pandemic, we could face

additional liquidity needs and challenges.

There can be no assurance that we will be able to obtain financing on favorable terms or at all.

Due to the evolving and highly uncertain nature of this event, it is currently not possible to estimate the ultimate direct or indirect impacts the COVID-19 pandemic may have on our business.

However, any prolonged disruption of manufacturing of our products, commerce and related activity caused by the pandemic or significant decrease in

demand for our products could materially and adversely affect our results of operations and financial conditions.

However, any prolonged disruption of manufacturing of our products, commerce and related activity caused by the pandemic or significant decrease in demand for our products could materially and adversely affect our results of operations and financial conditions.

Surges in infection rate, new shutdowns, emergence of new and potentially more contagious variants of the virus and the slow pace of vaccine rollout may impact our suppliers and our ability to source materials in a timely manner.

2 unchanged sentences

We have a history of net losses, and our future profitability is not assured.

We earned net income of $28.7 million and $5.4 million in fiscal 2020 and fiscal 2019, respectively.

In fiscal 2018 we incurred a net loss of $48.6 million.

Historically, we operated as a portfolio company comprised of many product lines, with diverse operating metrics and markets.

As a result, our profitability in a particular period was impacted by revenue, product mix and operational costs that varied significantly across our product portfolio and business segments.

These transitions are costly and may impair our profit objectives.

Specific factors that may undermine our financial objectives include, among others:

Specific factors that may undermine our profit and financial objectives include, among others:

• uncertain future telecom carrier and cable operator capital and R&D spending levels, which particularly affects our NE and SE segments;

• adverse changes to our product mix, both fundamentally (resulting from new product transitions, the declining profitability of certain legacy products and the termination of certain products with declining margins, among other things) and due to quarterly demand fluctuations;

• pricing pressure across our NSE product lines due to competitive forces, increasingly from Asia, and to a highly concentrated customer base for many of our product lines, which may offset some of the cost improvements;

• pricing pressure across our NSE product lines due to competitive forces and to a highly concentrated customer base for many of our product lines, which may offset some of the cost improvements;

• our OSP operating margin may experience some downward pressure as a result of higher mix of 3D Sensing products and increased operating expenses;

5 unchanged sentences

• ongoing costs associated with organizational transitions, consolidations and restructurings, which are expected to continue in the nearer term;

• continuing high levels of selling, general and administrative, SG&A expenses;

• cyclical demand for our currency products;

1 unchanged sentence

• ability of our customers, partners, manufacturers and suppliers to purchase, market, sell, manufacture or supply our products and services, including as a result of disruptions arising from the COVID-19 pandemic;

• financial stability of our customers, including the solvency of private sector customers, which may be impacted by the COVID-19 pandemic and statutory authority for government customers to purchase goods and services;

• factors beyond our control resulting from public health epidemics, pandemics and similar outbreaks as well as the fear of exposure to a widespread health epidemic, such as the COVID-19 pandemic, manufacturing restrictions, travel restrictions and shelter-in-place orders to control the spread of a disease regionally and globally, and limitations on the ability of our employees and our suppliers’ and customers’ employees to work and travel.

• financial stability of our customers, including the solvency of private sector customers and statutory authority for government customers to purchase goods and services;

• factors beyond our control resulting from pandemics and similar outbreaks such as the COVID-19 pandemic, manufacturing restrictions, travel restrictions and shelter-in-place orders to control the spread of a disease regionally and globally, and limitations on the ability of our employees and our suppliers’ and customers’ employees to work and travel.

Taken together, these factors limit our ability to predict future profitability levels and to achieve our long-term profitability objectives.

14 unchanged sentences

These difficulties can reduce yields or disrupt production and thereby increase our manufacturing costs and adversely affect our margin.

• We may incur significant costs to correct defective products (despite rigorous testing for quality both by our customers and by us), which could include lost future sales of the affected product and other products, and potentially sever customer relations problems, litigation and damage to our reputation.

• We may incur significant costs to correct defective products (despite rigorous testing for quality both by our customers and by us), which could include lost future sales of the affected product and other products, and potentially severe customer relations problems, litigation and damage to our reputation.

• We are dependent on a limited number of vendors, who are often small and specialized, for raw materials, packages and standard components.

We also rely on contract manufacturers around the world to manufacture certain of our products.

We also rely on contract manufacturers around the world to

manufacture certain of our products.

Our business and results of operations have been, and could continue to be, adversely affected by this dependency.

22 unchanged sentences

Accordingly, our estimated market opportunity may prove to be materially inaccurate.

our growth and ability to serve a significant portion of this estimated market is subject to many factors, including our success in implementing our business strategy and expansion of 3D Sensing and other applications for consumer electronics.

In addition, our growth and ability to serve a significant portion of this estimated market is subject to many factors, including our success in implementing our business strategy and expansion of 3D Sensing and other applications for consumer

We cannot assure you that we will be able to serve a significant portion of this market and the growth forecasts should not be taken as indicative of our future growth.

29 unchanged sentences

We may also be subject to additional obligations relating to personal data by contract that industry standards apply to our practices.

Virginia recently enacted similar data privacy legislation which will take effect in January 2023.

Further, other states are considering expanding or passing privacy laws in the near term.

20 unchanged sentences

The spread of COVID-19 has and is likely to continue to affect the manufacturing and shipment of goods globally.

For example, while the Chinese government has lifted certain restrictions on movement of people and goods to limit the spread of COVID-19, it is continuing to take control measures and recently imposed certain restrictions to limit the spread of COVID-19 in Beijing.

For example, while the Chinese government has lifted certain restrictions on movement of people and goods, it is continuing to take control measures and recently imposed certain restrictions to limit the spread of COVID-19 in Beijing.

Further, most other countries have imposed or are imposing certain restrictions on the movement of people and goods and may continue to lift and reimpose such restrictions as needed.

1 unchanged sentence

Worldwide travel restrictions have been imposed by many countries, including air travel and transport, that have caused and are likely to continue to cause delays in shipment of our products as well as increased logistics costs and will restrict our ability to attract, develop, integrate and retain highly skilled employees with appropriate qualifications from other countries.

Net revenue from customers outside the Americas accounted for 63.5%, 62.3% and 52.4% of our total net revenue, for fiscal 2020, 2019 and 2018, respectively.

Net revenue from customers outside the Americas accounted for 63.5%, 62.3% and 52.4% of our total net revenue, for fiscal years 2020, 2019 and 2018, respectively.

We expect that net revenue from customers outside North America will continue to account for a significant portion of our total net revenue.

82 unchanged sentences

Changes in market interest rates may influence our financing costs, returns on financial investments and the valuation of derivative contracts and could reduce our earnings and cash flows.

In addition, any transition process may involve, among other things, increased volatility or illiquidity in markets for instruments that rely on LIBOR, reductions in the value of certain instruments or the effectiveness of related transactions such as hedges, increased borrowing costs, uncertainty under applicable documentation, or difficult and costly consent processes.

In addition, any transition process may involve, among other things, increased volatility or liquidity in markets for instruments that rely on LIBOR, reductions in the value of certain instruments or the effectiveness of related transactions such as hedges, increased borrowing costs, uncertainty under applicable documentation, or difficult and costly consent processes.

This could materially and adversely affect our results of operations, cash flows, and liquidity.

124 unchanged sentences

Maletira’s successor.

In March 2021, Henk Derksen joined the Company as CFO.

Management changes could adversely impact our results of operations and our customer relationships and may make recruiting for future management positions more difficult.

14 unchanged sentences

Strategic transactions of this nature involve numerous risks, including the following:

• the impact of the recent COVID-19 pandemic, and any other adverse public health developments, epidemic disease or other pandemic in the countries in which we operate or our customers are located, including regional quarantines restricting the movement of people or goods, reductions in labor supply or staffing, the closure of facilities to protect employees, including those of our customers, disruptions to global supply chains and our and our suppliers’ ability to deliver materials and products on a timely or cost-effective basis, shipment, acceptance or verification delays, the resulting overall significant volatility and disruption of financial markets, and economic instability affecting customer spending patterns;

• the impact of the recent COVID-19 pandemic, and any other adverse public health developments, epidemic disease or other pandemic in the countries in which we operate or our customers are located, including regional quarantines restricting the movement of people or goods, reductions in labor supply or staffing, the closure of facilities to protect employees, including those of our customers, disruptions to global supply chains and both our and our suppliers’ ability to deliver materials and products on a timely or cost-effective basis, shipment, acceptance or verification delays, the resulting overall significant volatility and disruption of financial markets, and economic instability affecting customer spending patterns;

• inadequate internal control procedures and disclosure controls to comply with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or poor integration of a target company’s or business’s procedures and controls;

20 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors