What changed in this filing

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Item 1A. Risk Factors

2020-10-21 compared with 2019-10-22 · 87 added, 59 removed, 233 unchanged (39% of the section changed)

The following risks and uncertainties, as well as other factors described elsewhere in this report or in other SEC filings by the Company, could adversely affect the Company’s business, financial condition and results of operations.

Global economic conditions may negatively impact the Company’s financial condition and results of operations.

A general weakening or decline in the global economy or a reduction in industrial outputs, business or consumer spending or confidence could delay or significantly decrease purchases of the Company’s products by its customers and end users.

Consumer purchases of discretionary items, which could include the Company’s maintenance products and homecare and cleaning products, may decline during periods where disposable income is reduced or there is economic uncertainty, and this may negatively impact the Company’s financial condition and results of operations.

During unfavorable or uncertain economic times, end users may also increase purchases of lower-priced or non-branded products and the Company’s competitors may increase their level of promotional activities to maintain sales volumes, both of which may negatively impact the Company’s financial condition and results of operations.

In addition, the Company’s sales and operating results may be affected by uncertain or changing economic and market conditions, including inflation, deflation, prolonged weak consumer demand, political instability, public health crises or other changes that may affect the principal markets, trade channels, and industrial segments in which the Company conducts its business.

Public health crises, including epidemics or pandemics, may affect the principal markets, trade channels, and industrial segments in which the Company conducts its business.

For example, the Company is monitoring the impact of the current COVID-19 pandemic, which has already caused a significant disruption to global financial markets and supply chains beginning in early calendar year 2020.

The significance of the operational and financial impact to the Company will depend on how long and widespread this disruption proves to be.

The extent to which the COVID-19 pandemic impacts the Company’s results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the outbreak and the international actions that are being taken to contain and treat it.

While the Company currently expects this business disruption to be temporary, there is uncertainty around its duration and its broader impact, and therefore the effects it will have on the Company’s financial results and operations.

If economic or market conditions in key global markets deteriorate, the Company may experience material adverse effects on its business, financial condition and results of operations.

Adverse economic and market conditions could also harm the Company’s business by negatively affecting the parties with whom it does business, including its customers, retailers, distributors and wholesalers, and third-party contract manufacturers and suppliers.

These conditions could impair the ability of the Company’s customers to pay for products they have purchased from the Company.

As a result, allowances for doubtful accounts and write-offs of accounts receivable from the Company’s customers may increase.

In addition, the Company’s third-party contract manufacturers and their suppliers may experience financial difficulties or business disruptions that could negatively affect their operations and their ability to supply the Company with finished goods and the raw materials, packaging, and components required for the Company’s products.

Global operations outside the U.S.

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The Company’s sales outside of the U.S.

were approximately 63% of consolidated net sales in fiscal year 2019 and one of its strategic initiatives includes maximizing the WD-40 Multi-Use Product through geographic expansion and market penetration.

were approximately 60% of consolidated net sales in fiscal year 2020.

One of its strategic initiatives includes maximizing the WD-40 Multi-Use Product through geographic expansion and market penetration.

As a result, the Company currently faces, and will continue to face, substantial risks associated with having increased global operations outside the U.S., including:

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 increasing tax complexity or changes in tax law associated with operating in multiple tax jurisdictions;

 dispersed employee base and compliance with employment regulations and other labor issues, such as labor laws and minimum wages, in countries outside the U.S.;

 a dispersed employee base and requirements for compliance with varied employment regulations and labor laws, including health and safety regulations and wage and hour laws, in countries outside the U.S.;

 varying and complex privacy laws in foreign jurisdictions;

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These risks could have a significant impact on the Company’s ability to sell its products on a competitive basis in global markets outside the United States.

In addition, recent developments in the U.S.

In addition, continued developments in the U.S.

political climate have introduced greater uncertainty with respect to tax policies, trade relations, tariffs and government regulations affecting trade between the U.S.

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and the remaining EU countries to negotiate a withdrawal agreement.

This time period has since been extended until October 31, 2019.

Additional volatility in foreign currencies has continued as a result of this extension and this volatility may continue as the U.K.

negotiates and executes its impending exit from the European Union.

This time period was then extended twice;

first until October 31, 2019, with a second and final extension until January 31, 2020, at which point the U.K.

officially withdrew from the EU with transitional arrangements in place until December 31, 2020.

Additional volatility in foreign currencies has continued as a result of these developments and this volatility may continue as the U.K.

negotiates and executes the agreements that will replace current transitional arrangements with the European Union.

A significantly weaker Pound Sterling compared to the U.S.

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In addition, the legal and regulatory framework that will apply to the U.K.

and its future relationship with the European Union after the exit is completed may change the manner in which businesses operate in Europe,

including how products and services are imported and exported between countries in Europe, and this could adversely impact the Company’s financial condition and results of operations.

and its future relationship with the European Union may change the manner in which businesses operate in Europe, including how products and services are imported and exported between countries in Europe, and this could adversely impact the Company’s financial condition and results of operations.

The outcomes of the negotiations between the U.K.

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The Company’s future performance depends in significant part on maintaining high levels of employee engagement and nurturing the Company’s values and culture.

In addition, it depends on the continued service of its executive officers, key employees and other talented people, as well as effective succession planning.

In addition, the Company’s success depends on the continued service of its executive officers, key employees and other talented people, as well as effective succession planning.

The loss of the services of key employees could have a material adverse effect on the Company’s business and prospects.

Competition for such talent is intense, and there can be no assurance that the Company can retain its key employees or attract, assimilate and retain employees who are fully engaged in the future.

Competition for such talent is intense, and there can be no assurance that the Company can

retain its key employees or attract, assimilate and retain employees who are fully engaged in the future.

If the Company is unable to implement and successfully manage its strategic initiatives in accordance with its business plans, the Company’s business and financial results could be adversely affected.

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Negative claims or publicity involving the Company, its products, or any of its key employees could seriously damage the Company’s reputation and brand image, regardless of whether such claims are accurate.

This risk is compounded by the increasing use of social and digital media by consumers and the speed by which information and opinions are shared.

If the Company is unable to anticipate and respond to sudden challenges that it may face in the marketplace, trends in the market and changing consumer demands and sentiment, the Company’s financial results may be negatively impacted.

Although the Company makes every effort to prevent brand erosion and preserve its reputation and the reputation of its brands, there can be no assurance that such efforts will be successful.

Reliance on a limited base of third-party contract manufacturers, logistics providers and suppliers of raw materials and components may result in disruption to the Company’s business and this could adversely affect the Company’s financial condition and results of operations.

The Company relies on a limited number of third-party contract manufacturers, logistics providers and suppliers, including single or sole source suppliers for certain raw materials, packaging, product components and other necessary supplies.

The Company does not have direct control over the management or business of these third parties, except indirectly through terms negotiated in service or supply contracts.

As a result, the Company currently faces, and will continue to face, substantial risks associated with its reliance on third-party manufacturers, suppliers, and/or logistics providers, including but not limited to the following areas:

 Changes to the terms of doing business with these providers or the production capacity these providers dedicate to our products;

 Disagreements or the inability to maintain good relationships with these providers;

 Financial difficulties experienced by these providers;

 Consolidation of third-party packagers, which could result in the acquiring company not being interested in manufacturing our products;

 Significant disruptions in the production or transportation of our products due to events having regional or global impacts on economic activity, such as the COVID-19 pandemic

In addition, if the Company is unable to contract with third-party manufacturers or suppliers for the quantity and quality levels needed for its business, the Company could experience disruptions in production and its financial results could be adversely affected.

Sales unit volume growth may be difficult to achieve.

growth within its existing markets through innovation, renovation and enhanced merchandising and marketing of its established brands, and (iv) capture market share from its competitors.

The Company’s ability to achieve sales volume growth will depend on its ability to (i) execute its strategic initiatives, (ii) drive growth in new markets by making targeted end users aware of the Company’s products and making them easier to buy, (iii) drive growth within its existing markets through innovation, renovation and enhanced merchandising and marketing of its established brands, and (iv) capture market share from its competitors.

It is more difficult for the Company to achieve sales volume growth in developed markets where the Company’s products are widely used as compared to in developing or emerging markets where the Company’s products have been newly introduced or are not as well known by consumers.

In order to protect the Company’s existing market share or capture additional market share from its competitors, the Company may need to increase its expenditures related to promotions and advertising or introduce and establish new products or product lines.

In past periods, the Company has also increased sales prices on certain of its products in response to increased costs for components and raw materials.

In past periods, the Company has

also increased sales prices on certain of its products in response to increased costs for components and raw materials.

Sales price increases may slow sales volume growth or create declines in volume in the short term as customers and end users adjust to sales price increases.

In addition, the continued prominence and growth of the online retail sales channel has presented both the Company and its customers that sell the Company’s products online with the challenge of balancing online and physical store retailing methods.

Although the Company is engaged in e-commerce with respect to its products, if it is not successful in expanding sales in such alternative retail channels or it experiences challenges with operating in such channels, including challenges associated with the increased demand for non-flammable air shippable products, the Company’s financial condition and results of operations may be negatively impacted.

As a result of the COVID-19 pandemic, some sales are shifting more to these online retail sales channels, and this may present a challenge in our markets where we have a less developed e-commerce business.

Although the Company is engaged in e-commerce with respect to its products, if it is not successful in expanding sales in such alternative retail channels or it experiences challenges with operating in such channels, the Company’s financial condition and results of operations may be negatively impacted.

In addition, a change in the strategies of the Company’s existing customers, including shelf simplification, the discontinuation of certain product offerings or the shift in shelf space to competitors’ products could reduce the Company’s sales and potentially offset sales volume increases achieved as a result of other sales growth initiatives.

If the Company is unable to increase market share in its existing product lines by developing product improvements, investing adequately in its existing brands, building usage among new customers, developing, acquiring or successfully launching new products or product line extensions, or successfully penetrating emerging and developing markets and sales channels globally, the Company may not achieve its sales volume growth objectives.

The Company does not have direct control over the management or business of these third parties, except indirectly through terms negotiated in service or supply contracts.

Should the terms of doing business with the Company’s primary third-party contract manufacturers, suppliers and/or logistics providers change or should the Company have a disagreement with or be unable to maintain relationships with such third parties or should such third parties experience financial difficulties, the Company’s business may be disrupted.

Cost increases or cost volatility in finished goods, components, raw materials, transportation and other necessary supplies or services could harm or impact the Company’s financial condition and results of operations.

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Sustained increases in the cost of raw materials, components, transportation and other necessary supplies or services, or significant volatility in such costs, could have a material adverse effect on the Company’s financial condition and results of operations.

Global economic conditions may negatively impact the Company’s financial condition and results of operations.

the Company’s financial condition and results of operations.

In addition, the Company’s sales and operating results may be affected by uncertain or changing economic and market conditions, including inflation, deflation, prolonged weak consumer demand, political instability or other changes that may affect the principal markets, trade channels, and industrial segments in which the Company conducts its business.

If economic or market conditions in key global markets deteriorate, the Company may experience material adverse effects on its business, financial condition and results of operations.

These conditions could impair the ability of the Company’s customers to pay for products they have purchased from the Company.

As a result, allowances for doubtful accounts and write-offs of accounts receivable from the Company’s customers may increase.

In addition, the Company’s third-party contract manufacturers and its suppliers may experience financial difficulties that could negatively affect their operations and their ability to supply the Company with finished goods and the raw materials, packaging, and components required for the Company’s products.

Government laws and regulations, including environmental laws and regulations, could result in material costs or otherwise adversely affect the Company’s financial condition and results of operations.

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In the event that such regulations result in increased product costs, the Company may not be in a position to increase selling prices, and therefore an increase in costs could have a material adverse effect on the Company’s business, financial condition and results of operations.

Some of the Company’s products have chemical compositions that are controlled by various state, federal and international laws and regulations.

Some of the Company’s products have chemical compositions that are controlled by various state, federal and international laws and regulations that are subject to change.

The Company is required to comply with these laws and regulations and it seeks to anticipate regulatory developments that could impact the Company’s ability to continue to produce and market its products.

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Although the Company maintains a global enforcement program to protect its intellectual property rights, there can be no assurance that these intellectual property rights will be maximized or that they can be successfully asserted.

Trade secret protection, particularly for the Company’s most valuable product formulation for the WD-40 Multi-Use Product, requires specific agreements, policies and procedures to assure the secrecy of information classified as a trade secret.

If such agreements, policies and procedures are not effective to maintain the secrecy of the Company’s trade secrets or if chemical disclosure regulations do not allow for continued protection of essential elements of the Company’s trade secret formulations, the loss of trade secret protection could have an adverse effect on the Company’s financial condition.

There is a risk that the Company will not be able to obtain and protect its own intellectual property rights or, where appropriate, license intellectual property rights necessary to support new product introductions or acquired product lines.

The Company cannot be certain that these rights, if obtained, will not be invalidated, circumvented or challenged in the future, and the Company could incur significant costs in connection with legal actions to defend its intellectual property rights.

If other companies or entities infringe the Company’s intellectual property rights or take part in counterfeiting activities, they may dilute the value of the Company’s brands in the marketplace, which could diminish the value that consumers associate with the Company’s brands and harm its sales.

The Company cannot be certain that these rights, if obtained, will not be withdrawn, invalidated, circumvented or challenged in the future, and the Company could incur significant costs in connection with legal actions to defend and preserve its intellectual property rights.

In addition, even if such rights are obtained in the U.S., it may be that the laws of some of the other countries in which the Company’s products are or may be sold do not protect intellectual property rights to the same extent as the laws of the United States, or they may be difficult to enforce.

If other companies infringe the Company’s intellectual property rights or take part in counterfeiting activities, they may dilute the value of the Company’s brands in the marketplace, which could diminish the value that consumers associate with the Company’s brands and harm its sales.

The failure of the Company to protect or successfully assert its intellectual property rights or to protect its other proprietary information could make the Company less competitive and this could have a material adverse effect on its business, financial condition and results of operations.

If the Company is found to have violated the trademark, copyright, patent or other intellectual property rights of others, such a finding could result in the need to cease the use of a trademark, trade secret, copyrighted work or patented invention in the Company’s business and an obligation to pay a substantial amount for past infringement.

If such agreements, policies and procedures are not effective enough to maintain the secrecy of the Company’s trade secrets or if chemical disclosure regulations do not allow for continued protection of essential elements of the Company’s trade secret formulations, the loss of trade secret protection could have an adverse effect on the Company’s financial condition.

Company’s business and an obligation to pay a substantial amount for past infringement.

It could also be necessary to pay a substantial amount in the future if the holders of such rights are willing to permit the Company to continue to use the intellectual property rights.

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If actual revenues fall short of these expectations, operating results may be adversely affected by reduced operating margins or operating profits due to actual expense levels that are higher than might otherwise have been appropriate.

Malfunctions of the critical information systems that the Company uses for the daily operations of its business, cyberattacks and privacy breaches could adversely affect the Company’s ability to conduct business.

Malfunctions or implementation issues related to the critical information systems that the Company uses for the daily operations of its business, cyberattacks and privacy breaches could adversely affect the Company’s ability to conduct business.

To conduct its business, the Company relies extensively on information technology systems, networks and services, many of which are managed, hosted and provided by third-party service providers.

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office uses for its business operations is a market specific application that is not widely used by other companies.

This system supports two other regional offices outside the U.S.

This system is also used by three other regional offices of the Company, its Canada, Australia and Malaysia offices.

The company that owns and supports this application may not be able to provide the same level of support as that of larger information systems.

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were to cease its operations or were unable to provide continued support for this application, it could adversely affect the Company’s daily operations or its business, financial condition and results of operations.

Management has determined that it is appropriate to implement a new information system that will be used at all of these offices.

We are currently in the initial stages of this implementation.

This information system will be used to process all of the daily

transactions and to produce key financial reports for all of these offices.

If the Company encounters difficulties in completing this critical information system implementation, it may experience interruptions in its ability to manage its daily operations and report financial results and this could adversely affect the Company’s business, financial condition and results of operations.

The Company faces competition in its markets which could lead to reduced sales and profitability.

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These competitors may be able to spend more aggressively on advertising and promotional activities, introduce competing products more quickly and respond more effectively to changing business and economic conditions than the Company.

Competitive activity may require the Company to increase its investment in marketing or reduce its sales prices and this may lead to reduced profit margins, a loss of market share or loss of distribution, each of which could have a material adverse effect

on the Company’s business, financial condition and results of operations.

There can be no assurance that the Company will be able to compete successfully against current and future competitors or that competitive pressures faced by the Company or the infringement of its products and brands will not have a material adverse effect on its business, financial condition and results of operations.

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The Company cannot be certain that it will successfully achieve those goals.

The Company competes in several product categories where there are frequent introductions of new products and line extensions and such product introductions often require significant investment and support.

The Company competes in several product categories where there are frequent introductions of new products and

line extensions and such product introductions often require significant investment and support.

The ability of the Company to understand end user needs and preferences is key to maintaining and improving the competitiveness of its product offerings.

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The Company distributes its products throughout the world in one of two ways:

the direct distribution model, in which products are sold directly by the Company to wholesalers and retailers in the U.S., Canada, Australia, China, the U.K.

the direct distribution model, in which products are sold directly by the Company to wholesalers and retailers in the U.S., Canada, Mexico, Australia, China, the U.K.

and a number of other countries, including those throughout Europe;

and the marketing distributor model, in which products are sold to marketing distributors who in turn sell to wholesalers and retailers.

The marketing distributor model is generally used in certain countries where the Company does not have direct Company-owned operations.

The marketing distributor model is generally used in countries where the Company does not have direct Company-owned operations.

Instead, the Company partners with local companies who perform the sales, marketing and distribution functions.

The Company invests time and resources into these relationships.

Should the Company’s relationship with a marketing distributor change or terminate, the Company’s sales within such marketing distributor’s territory could be adversely impacted until such time as a suitable replacement could be found and the Company’s key marketing strategies are implemented.

There is a risk that changes in such marketing distributor relationships, including changes in key marketing distributor personnel, that are not managed successfully, could result in a disruption in the affected

markets and that such disruption could have a material adverse effect on the Company’s business, financial condition and results of operations.

Should the Company’s relationship with a marketing distributor change or terminate, the Company’s sales within such a marketing distributor’s territory could be adversely impacted until such time as a suitable replacement can be found and the Company’s key marketing strategies are implemented.

There is a risk that changes in such marketing distributor relationships, including a change in key marketing distributor personnel or a transition to the direct distribution model, that if not managed successfully, could result in a disruption in the affected markets and that such a disruption could have a material adverse effect on the Company’s business, financial condition and results of operations.

Additionally, in some countries, local laws may require substantial payments to terminate existing marketing distributor relationships, which could also have a material adverse effect on the Company’s business, financial condition and results of operations.

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Changes in management estimates and assumptions as they relate to valuation of goodwill and intangible assets could affect the Company’s financial condition or results of operations in the future.

The Company’s review of events and circumstances during fiscal year 2020 included consideration of the ongoing COVID-19 pandemic.

For additional information, see Part IV – Item 15, “Exhibits, Financial Statement Schedules” Note 5 – Goodwill and Other Intangible Assets, included in this report.

The Company may also divest of certain of its assets, businesses or brands that do not align with the Company’s strategic initiatives.

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Product liability claims and other litigation and/or regulatory action could adversely affect the Company’s sales and operating results.

While the Company makes every effort to ensure that the products it develops and markets are safe for consumers, the use of the Company’s products may expose the Company to liability claims resulting from such use.

Claims could be based on allegations that, among other things, the Company’s products contain contaminants, provide inadequate instructions regarding their use or inadequate warnings concerning their use or interactions with other substances.

While the Company makes every effort to ensure that the products it develops and markets are safe for consumers and comply with all applicable regulations, the use of the Company’s products may expose the Company to liability claims resulting from such use and potential enforcement actions, including the risk of recall.

Claims could be based on allegations that, among other things, the Company’s products are improperly labeled, contain contaminants, provide inadequate instructions regarding their use or inadequate warnings concerning their use or interactions with other substances.

Product liability claims could result in negative publicity that could harm the Company’s sales and operating results.

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Other business activities of the Company may also expose the Company to litigation risks, including risks that may not be covered by insurance such as contract disputes.

If successful claims are asserted by third parties against the Company for uninsured liabilities or liabilities in excess of applicable limits of insurance coverage, the Company’s business, financial condition and results of operations may be adversely affected.

If successful claims are asserted by regulatory agencies or third parties against the Company for non-compliance or uninsured liabilities or liabilities in excess of applicable limits of insurance coverage, the Company’s business, financial condition and results of operations may be adversely affected.

In addition, if one of the Company’s products was determined to be defective, the Company could be required to recall the product, which could result in adverse publicity, loss of revenues and significant expenses.

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When particular tax matters arise, a number of years may elapse before such matters are audited and finally resolved.

Favorable resolution of such matters could

be recognized as a reduction to the Company’s effective tax rate in the year of resolution.

Favorable resolution of such matters could be recognized as a reduction to the Company’s effective tax rate in the year of resolution.

Unfavorable resolution of any tax matter could increase the Company’s effective tax rate.

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For additional information on such matters, see Part IV – Item 15, “Exhibits, Financial Statement Schedules” Note 14 – Income Taxes, included in this report.

In addition, changes in tax rules may materially affect, either adversely or favorably, the Company’s future financial results or the way management conducts its business.

Changes in tax rules may also materially affect, either adversely or favorably, the Company’s future financial results or the way management conducts its business.

For example, on December 22, 2017 the “ Tax Cuts and Jobs Act ” (the “Tax Act”) was signed into law and became effective beginning January 1, 2018.

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tax law and tax rates, as well as mandated the application of a one-time “toll tax” on unremitted foreign earnings, among other things.

The Company reevaluated its indefinite reinvestment assertion for its foreign subsidiaries during fiscal year 2018 and no longer considers unremitted foreign earnings of any of its subsidiaries to be indefinitely reinvested.

For additional information on the Tax Act, the impact of potential changes in provisional amounts, and the change in indefinite reinvestment assertions for certain foreign subsidiaries, see Part IV – Item 15, “Exhibits, Financial Statement Schedules” Note 13 – Income Taxes, included in this report.

In addition, the Company is required to make assertions on whether its foreign subsidiaries will invest their undistributed earnings indefinitely and these assertions are based on the capital needs of the foreign subsidiaries.

Generally, unremitted earnings of the Company’s foreign subsidiaries are not considered to be indefinitely reinvested.

However, there are exceptions regarding the Company’s newly formed subsidiary in Mexico as well as specific statutory remittance restrictions imposed on the Company’s China subsidiary.

Costs associated with repatriating unremitted foreign earnings, including U.S.

state income taxes and foreign withholding taxes, are immaterial to the Company’s consolidated financial statements.

For additional information on income tax matters, see Part IV—Item 15, “Exhibits, Financial Statement Schedules” Note 14 — Income Taxes, included in this report

Although many impacts of the Tax Act are favorable for the Company both in the near term and long term, the Tax Act also authorizes the Treasury Department to issue regulations with respect to the new provisions.

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However, if the Company is not able to identify, acquire and successfully integrate acquired products or companies or successfully manage joint ventures or other strategic partnerships, the Company may not be able to maximize these opportunities.

The failure to properly manage business development activities because of difficulties in the assimilation of operations and products, the diversion of management’s attention from other business concerns, the loss of key employees or other factors could have a material adverse effect on the Company’s business, financial condition and results of operations.

The failure to properly manage business development activities

because of difficulties in the assimilation of operations and products, the diversion of management’s attention from other business concerns, the loss of key employees or other factors could have a material adverse effect on the Company’s business, financial condition and results of operations.

In addition, there can be no assurance that the Company’s business development activities will be profitable at their inception or that they will achieve sales levels and profitability that justify the investments made.

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The Company’s debt consists of fixed rate senior notes and a revolving credit facility.

Management has used the proceeds of the revolving credit facility primarily for stock repurchases.

In order to service such debt, the Company is required to use its income from operations to make interest and principal payments required by the terms of its borrowing agreements.

Prior to April 2020, management has used the proceeds of the revolving credit facility primarily for stock repurchases.

In order to service its debt, the Company is required to use its income from operations to make interest and principal payments required by the terms of its borrowing agreements.

In addition, the Company’s borrowing agreements include covenants to maintain certain financial ratios and to comply with other financial terms, conditions and covenants.

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To the extent that the Company is required to seek additional financing to support certain of these activities, such financing may not be available in sufficient amounts or on terms acceptable to the Company.

If the Company is unable to obtain such financing or to service its existing or future debt with its operating income, or if available cash balances are affected by future business performance, liquidity, capital needs, alternative investment opportunities or debt covenants, the Company could be required to reduce, suspend or eliminate its dividend payments to its stockholders.

If the Company is unable to obtain such financing or to service its existing or future debt with its operating income, or if available cash balances are affected by future business performance, unstable global economic conditions, liquidity, capital needs, alternative investment opportunities or debt covenants, the Company could be required to reduce, suspend or eliminate its dividend payments to its stockholders.

The Company may also elect to suspend share repurchases depending on available cash balances or concerns that it may have on future cash balances.

For example, in April 2020, the Company elected to suspend repurchases under its share buy-back plan, which subsequently expired on August 31, 2020, in order to preserve cash while it monitored the impacts of the COVID-19 pandemic .

Unresolved Staff Comments

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

What changed 10-K

Item 1A. Risk Factors