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Operational Risks
−Removed: The COVID-19 outbreak has adversely affected and could in the future continue to adversely affect our business.
−Removed: The ongoing COVID-19 pandemic is adversely affecting, and is expected to continue to adversely affect, our operations, supply chains and distribution systems, and we have experienced and expect to continue to experience varying levels of reductions in demand for our products and services, particularly in the aviation aftermarket as compared to pre-pandemic levels.
−Removed: The global aviation market experienced a significant decline, specifically in global commercial air travel, which had a significant impact on the parts distribution and maintenance, repair and overhaul services markets supporting general aviation and commercial aircraft.
+Added: We face various risks related to health epidemics, pandemics and similar outbreaks, which could adversely affect our business.
+Added: We face a wide variety of risks related to health epidemics, pandemics and similar outbreaks, including COVID-19.
+Added: The ongoing COVID-19 pandemic has adversely affected, and may continue to adversely affect, our operations, supply chains and distribution systems.
+Added: The global aviation market experienced a significant decline during the peak of the COVID-19 pandemic, specifically in global commercial air travel, which had a significant impact on the parts distribution and maintenance, repair and overhaul services markets supporting general aviation and commercial aircraft.
Our Aviation segment experienced the most impactful reduction in demand for our products and services during fiscal 2021 and fiscal 2020 compared to fiscal 2019, as a decline in commercial aircraft revenue passenger miles contributed to a reduction in demand for aftermarket parts and MRO services.
−Removed: This reduction in demand moderated to some extent but otherwise continued throughout 2021 and may continue into 2022, subject to the duration and severity of the pandemic.
−Removed: This decrease in demand may continue to adversely impact our operating results for 2022.
−Removed: We cannot estimate with certainty the severity of this impact, but we expect it to be consistent with overall aviation industry trends.
−Removed: Due to the impact of COVID-19 and decisions by our customers to delay the use of, or permanently retire, certain aircraft, demand levels for aviation disruption inventory could decrease in the near term or midterm, which could result in a write-down of existing inventory to adjust to current market trends and adversely affect our results of operations.
−Removed: Furthermore, as a result of COVID-19, some of our commercial customers in the Aviation segment have been and could continue to be negatively impacted as a result of disruption in demand, which has led to delays and could lead to defaults on collections of receivables from them.
−Removed: Such continued delays could further negatively impact our business, results of operations and financial condition.
−Removed: We are unable to predict the extent, nature or duration of these impacts at this time.
+Added: While we have seen recovery in the overall demand for commercial air travel and currently expect that recovery to continue, any future outbreaks of COVID-19 or other epidemics, pandemics, crises or public health concerns in regions of the world where we have operations or sell products, together with governmental and regulatory responses thereto, could adversely impact the Aviation segment and our operating results.
+Added: The extent of the impact of COVID-19 or other epidemics, pandemics, crises or public health concerns on our business, including our ability to execute our near-term and long-term business strategies and initiatives in the expected time frame, will depend on numerous evolving factors that we cannot accurately predict or assess, including the negative impact it has on global and regional economies and economic activity;
+Added: decisions by our customers to delay the use of, or permanently retire, certain aircraft, demand levels for aviation disruption inventory, which could result in a and adversely affect our results of operations;
+Added: write-down of existing inventory to adjust to current market trends;
+Added: and disruption in demand, which adversely impacts our commercial customers in the Aviation segment.
+Added: Any of these events could exacerbate the other risks and uncertainties described herein, or in other reports filed with the SEC from time to time, and could materially adversely affect our business, financial condition, results of operations and/or stock price.
Supply chain delays, disruptions, and potential geopolitical uncertainty could adversely affect our business operations and expenses
−Removed: Due to the ongoing pandemic, supply chain disruptions, and geopolitical uncertainty our business could be adversely impacted by delays or the inability to source products and services for our customers.
+Added: Due to current economic and geopolitical uncertainty and supply chain disruptions, our business could be adversely impacted by delays or the inability to source products and services for our customers.
If our suppliers experience increased disruptions to their operations as a result of these dynamics, they may be unable to fill our supply needs in a timely, compliant and cost-effective manner.
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This concentration of our revenue subjects us to the risk of material adverse revenue disruptions if customer operational decisions, government contractual or other issues prevent or delay the fulfillment of work requirements associated with these key programs.
−Removed: In recent years, revenue levels for our FMS Program have fluctuated widely enough to cause material changes in our overall revenue levels and affect our profit margins.
+Added: In recent years, revenue levels for our FMS Program have fluctuated widely enough to cause material changes in our
+Added: overall revenue levels and affect our profit margins.
Similarly, variations in volume and types of parts purchased by the USPS in recent years have caused changes in our profit margins.
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Any such impairments that result in us recording additional goodwill or intangible asset impairment charges could have a material adverse effect on our financial position or results of operations.
−Removed: Intense competition from existing and new competitors may harm our business.
+Added: Competition from existing and new competitors may harm our business.
The aviation and vehicle parts industries are highly fragmented, have several highly visible leading companies, and are characterized by intense competition.
4 unchanged sentences
Competitor contractors that experience a loss of government work have tended to redirect their marketing efforts toward the types of work that we perform.
−Removed: This increase in competition for our service offerings may adversely affect our ability to win new work or successor contracts to continue work that is currently performed by us under expiring contracts.
+Added: This increase in competition for our service offerings may adversely affect our ability to win
+Added: new work or successor contracts to continue work that is currently performed by us under expiring contracts.
Unsuccessful bidders frequently protest contract awards, which can delay or reverse the contract awards.
−Removed: Additionally, the government has
−Removed: frequently used contract award criteria that emphasizes lowest price, technically acceptable bids, which further intensifies competition in our government markets.
+Added: Additionally, the government has frequently used contract award criteria that emphasizes lowest price, technically acceptable bids, which further intensifies competition in our government markets.
Our success is highly dependent on the performance of the aviation aftermarket, which could be impacted by lower demand for business aviation and commercial air travel or airline fleet changes causing lower demand for our goods and services.
4 unchanged sentences
These global industry and economic conditions may have a material adverse effect on our business, financial condition and results of operations.
−Removed: The COVID-19 pandemic has resulted in travel disruption has had an adverse impact on airline spending and demand that has caused a reduction in demand for our aviation products and services for most of 2020 and into 2021.
−Removed: At this point, the extent or duration of the impact that the COVID-19 pandemic may have on our future results remains uncertain, and the reduction in demand could extend into 2022.
Global economic conditions and political factors could adversely affect our revenues.
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Continued inflationary pressures could impact our profitability.
−Removed: The nature of our operations and work performed by our employees present certain challenges related to work force management.
+Added: The nature of our operations and work performed by our employees present certain challenges related to workforce management.
Our financial performance is heavily dependent on the abilities of our operating and administrative staff with respect to technical skills, operating performance, pricing, cost management, safety, and administrative and compliance efforts.
4 unchanged sentences
Our business could be adversely affected by incidents that could cause an interruption in our operations or impose a significant financial liability on us.
−Removed: Disruption of our operations due to internal or external system or service failures, accidents or incidents involving employees or third parties working in high-risk locations, or natural disasters, health crisis, epidemics or pandemics, including the COVID-19 pandemic, or other crises could adversely affect our financial performance and condition.
+Added: Disruption of our operations due to internal or external system or service failures, accidents or incidents involving employees or third parties working in high-risk locations, or natural disasters, health crisis, epidemics or pandemics, including the COVID-19
+Added: pandemic, or other crises could adversely affect our financial performance and condition.
The COVID-19 pandemic could potentially impact our global supply chain network for any of our segments.
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These agencies review a contractor’s performance under its contracts, cost structure and compliance with applicable laws, regulations and standards.
−Removed: The government also may review the adequacy of, and a contractor’s compliance with, its internal control systems and policies, including the contractor’s purchasing, property, estimating, compensation and management information systems.
+Added: The government also may review the adequacy of, and a contractor’s compliance with, its internal control systems and policies, including the
+Added: contractor’s purchasing, property, estimating, compensation and management information systems.
Any costs found to be improperly allocated to a specific contract will not be reimbursed and any such costs already reimbursed must be refunded.
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In addition, we could be affected by future laws or regulations, including those imposed in response to concerns over climate change, other aspects of the environment, or natural resources.
−Removed: We expect to incur future capital and operating costs to comply with current and future environmental laws and regulations, and such costs could be substantial, depending on the future proliferation of environmental rules and regulations and the extent to which we discover currently unknown environmental conditions.
+Added: We expect to incur future capital and operating costs to comply with current and future environmental laws and regulations, and such costs could be substantial, depending on
+Added: the future proliferation of environmental rules and regulations and the extent to which we discover currently unknown environmental conditions.
Some of our contract work includes the use of chemical solvents and the handling of hazardous materials to maintain, repair, and refurbish vehicles, aircraft engines, and equipment.
21 unchanged sentences
The payment of cash dividends and repurchases of our common stock are subject to limitations under applicable law and our bank loan agreement, and to the discretion of our board of directors, considered in the context of then current conditions, including our earnings, other operating results, and capital requirements.
−Removed: Declines in asset values or increases in liabilities,
−Removed: including liabilities associated with benefit plans and assets and liabilities associated with taxes, can reduce stockholders’ equity.
+Added: Declines in asset values or increases in liabilities, including liabilities associated with benefit plans and assets and liabilities associated with taxes, can reduce stockholders’ equity.
A deficit in stockholders’ equity could limit our ability under Delaware law to pay dividends.
17 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.