3 unchanged sentences
If any of the risks described below actually occurs, our business, financial condition or results of operations could be materially and adversely affected.
+Added: Risk categories:
+Added: – Risks related to the effects of COVID-19 and other potential future public health crises, pandemics or similar events
+Added: – Risks related to sales, product development and manufacturing
+Added: – Risks related to our global operations
+Added: – Risks associated with our strategic transactions
+Added: – Risks associated with cybersecurity, intellectual property and litigation
+Added: – Risks related to legal, regulatory, accounting, tax and compliance matters
+Added: – General risk factors
+Added: Risks related to the effects of COVID-19 and other potential future public health crises, pandemics or similar events.
Our financial condition and results of operations for fiscal 2021 and future periods may be adversely affected by the recent COVID-19 outbreak or other outbreak of infectious disease or similar public health threat.
15 unchanged sentences
The extent to which COVID-19 or any other health epidemic will further impact our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others.
+Added: Risks related to sales, product development and manufacturing
Our operating results are substantially dependent on the acceptance of new products.
3 unchanged sentences
The successful development, introduction and acceptance of new products depend on a number of factors, including the following:
+Added: • qualification and acceptance of our new product and systems designs, specifically entering into automotive applications which require even more stringent levels of qualification and standards;
+Added: • our ability to effectively transfer increasingly complex products and technology from development to manufacturing, including the transition to 200mm substrates;
• our ability to introduce new products in a timely and cost-effective manner;
• our ability to secure volume purchase orders related to new products;
−Removed: • qualification and acceptance of our new product and systems designs, specifically entering into automotive applications which require even more stringent levels of qualification and standards;
• achievement of technology breakthroughs required to make commercially viable products;
6 unchanged sentences
• our ability to develop repeatable processes to manufacture new products in sufficient quantities, with the desired specifications and at competitive costs;
−Removed: • our ability to effectively transfer increasingly complex products and technology from development to manufacturing;
• our customers’ ability to develop competitive products incorporating our products;
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In order to manage our growth and business strategy effectively relative to the uncertain pace of adoption, we must continue to:
−Removed: • maintain, expand, construct and purchase adequate manufacturing facilities and equipment, as well as secure sufficient third-party manufacturing resources, to meet customer demand, including specifically the expansion of our silicon carbide capacity with the construction of a state-of-the-art, automated 150mm and 200mm capable silicon carbide fabrication facility and a large materials factory;
+Added: • maintain, expand, construct and purchase adequate manufacturing facilities and equipment, as well as secure sufficient third-party manufacturing resources, to meet customer demand, including specifically the expansion of our silicon carbide capacity with the construction of a state-of-the-art, automated 200mm capable silicon carbide fabrication facility and a large materials factory;
• manage an increasingly complex supply chain that has the ability to supply an increasing number of raw materials, subsystems and finished products with the required specifications and quality, and deliver on time to our manufacturing facilities, our third-party manufacturing facilities, or our logistics operations;
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Such investments take time to become fully operational, and we may not be able to expand quickly enough to exploit targeted market opportunities.
−Removed: For example, we continue converting the majority of our Wolfspeed power production from 100mm to 150mm substrates.
+Added: For example, we continue converting our remaining Wolfspeed power
+Added: production from 100mm to 150mm substrates.
If we are unable to complete this transition in a timely or cost-effective manner, our results could be negatively impacted.
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There are also inherent execution risks in starting up a new factory or expanding production capacity, whether one of our own factories or that of our contract manufacturers or ODMs, or moving production to different contract manufacturers or ODMs, that could increase costs and reduce our operating results.
−Removed: In September 2019, we announced the intent to build the new fabrication facility in Marcy, New York to complement the factory expansion underway at our United States campus
−Removed: headquarters in Durham, North Carolina.
+Added: In September 2019, we announced the intent to build the new fabrication facility in Marcy, New York to complement the factory expansion underway at our United States campus headquarters in Durham, North Carolina.
The establishment and operation of a new manufacturing facility or expansion of an existing facility involves significant risks and challenges, including, but not limited to, the following:
• design and construction delays and cost overruns;
−Removed: • issues in installing and qualifying new equipment and ramping production;
+Added: • issues in installing and qualifying new equipment and ramping production with 200mm silicon carbide;
• poor production process yields and reduced quality control;
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Additionally, we face these same risks if we fail to allocate and effectively manage the resources necessary to build, implement, upgrade, integrate and sustain appropriate technology infrastructure over the longer term.
−Removed: If we fail to evaluate and execute strategic opportunities successfully, our business may suffer.
−Removed: From time to time, including the present, we evaluate strategic opportunities available to us for product, technology or business transactions, such as business acquisitions, investments, joint ventures, divestitures, or spin-offs.
−Removed: For example, in the fourth quarter of fiscal 2019, we completed the sale of our Lighting Products business unit to IDEAL Industries, Inc.
−Removed: (IDEAL) and in the second quarter of fiscal 2021 we entered into an Asset Purchase Agreement (the Purchase Agreement) with SMART with respect to the LED Business Divestiture.
−Removed: If we choose to enter into such transactions, we face certain risks including:
−Removed: • the failure of an acquired business, investee or joint venture to meet our performance and financial expectations;
−Removed: • identification of additional liabilities relating to an acquired business;
−Removed: • loss of existing customers of our current and acquired businesses due to concerns that new product lines may be in competition with the customers’ existing product lines or due to regulatory actions taken by governmental agencies;
−Removed: • that we are not able to enter into acceptable contractual arrangements with the significant customers of an acquired business;
−Removed: • difficulty integrating an acquired business's operations, personnel and financial and operating systems into our current business;
−Removed: • that we are not able to develop and expand customer bases and accurately anticipate demand from end customers, which can result in increased inventory and reduced orders as we experience wide fluctuations in supply and demand;
−Removed: • diversion of management attention;
−Removed: • difficulty separating the operations, personnel and financial and operating systems of a spin-off or divestiture from our current business;
−Removed: • the possibility we are unable to complete the transaction and expend substantial resources without achieving the desired benefit;
−Removed: • the inability to obtain required regulatory agency approvals;
−Removed: • reliance on a transaction counterparty for transition services for an extended period of time, which may result in additional expenses and delay the integration of the acquired business and realization of the desired benefit of the transaction;
−Removed: • uncertainty of the financial markets or circumstances that cause conditions that are less favorable and/or different than expected;
−Removed: • expenses incurred to complete a transaction may be significantly higher than anticipated.
−Removed: We may not be able to adequately address these risks or any other problems that arise from our prior or future acquisitions, investments, joint ventures, divestitures or spin-offs.
−Removed: Any failure to successfully evaluate strategic opportunities and address risks or other problems that arise related to any such business transaction could adversely affect our business, results of operations or financial condition.
−Removed: We are subject to a number of risks associated with the sale of our LED Products segment, and these risks could adversely impact our operations, financial condition and business.
−Removed: On October 18, 2020, we executed the Purchase Agreement with SMART with respect to the LED Business Divestiture.
−Removed: We are subject to a number of risks associated with this transaction, including risks associated with:
−Removed: • the failure to satisfy, on a timely basis or at all, the closing conditions set forth in the Purchase Agreement, including the receipt of governmental and regulatory consents and approvals;
−Removed: • the separation of the LED Business, and related information technology, from the businesses we are retaining and the operation of our retained business without the LED Business;
−Removed: • issues, delays or complications in completing required transition activities to allow the LED Business to operate under the SMART portfolio of businesses after the closing, including incurring unanticipated costs to complete such activities;
−Removed: • unfavorable reaction to the sale by customers, competitors, suppliers and employees;
−Removed: • the disruption to and uncertainty in our business and our relationships with our customers, including attempts by our customers to terminate or renegotiate their relationships with us or decisions by our customers to defer or delay purchases from us;
−Removed: • difficulties in hiring, retaining and motivating key personnel during this process or as a result of uncertainties generated by this process or any developments or actions relating to it;
−Removed: • the diversion of our management’s attention away from the operation of the business we are retaining;
−Removed: • the need to incur significant transaction costs in connection with the transaction, regardless of whether it is completed;
−Removed: • the restrictions on and obligations with respect to our business set forth in the Purchase Agreement and, following closing, the transition services agreement and a wafer supply and fabrication agreement, in each case between us and SMART;
−Removed: • the need to provide transition services in connection with the transaction, which may result in the diversion of resources and focus;
−Removed: • our failure to realize the full purchase price anticipated under the Purchase Agreement, including the ability of the LED Business to generate revenue and gross profit in the first four full fiscal quarters following the closing sufficient to result in payment of the targeted earnout payment or any earnout payment;
−Removed: • the ability of SMART to pay the unsecured promissory note to be issued to us at the closing of the transaction and any additional unsecured promissory notes issued upon achievement of the general revenue and gross profit targets.
−Removed: As a result of these risks, we may be unable to realize the anticipated benefits of the transaction, including the total amount of cash we expect to realize.
−Removed: Our failure to realize the anticipated benefits of the transaction would adversely impact our operations, financial condition and business and could limit our ability to pursue additional strategic transactions.
Variations in our production could impact our ability to reduce costs and could cause our margins to decline and our operating results to suffer.
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In addition, our ability to convert volume manufacturing to larger diameter substrates can be an important factor in providing a more cost-effective manufacturing process.
−Removed: We continue converting the majority of our Wolfspeed power production from
−Removed: 100mm to 150mm substrates.
+Added: We continue converting our remaining Wolfspeed power production from 100mm to 150mm substrates, as well as continue to prepare for production using 200mm substrates.
If we are unable to make this transition in a timely or cost-effective manner, our results could be negatively impacted.
−Removed: Global economic conditions could materially adversely impact demand for our products and services.
−Removed: Our operations and performance depend significantly on worldwide economic conditions.
−Removed: Uncertainty about global economic conditions could result in customers postponing purchases of our products and services in response to tighter credit, unemployment, negative financial news and/or declines in income or asset values and other macroeconomic factors, which could have a material negative effect on demand for our products and services and, accordingly, on our business, results of operations or financial condition.
−Removed: For example, any economic and political uncertainty caused by the United States tariffs imposed on goods from China, among other potential countries, and any corresponding tariffs or currency devaluations from China or such other countries in response, has negatively impacted, and may in the future, negatively impact, demand and/or increase the cost for our products.
−Removed: Additionally, our international sales are subject to variability as our selling prices become less competitive in countries with currencies that are declining in value against the U.S.
−Removed: Dollar and more competitive in countries with currencies that are increasing in value against the U.S.
−Removed: In addition, our international purchases can become more expensive if the U.S.
−Removed: Dollar weakens against the foreign currencies in which we are billed.
Our results of operations, financial condition and business could be harmed if we are unable to balance customer demand and capacity.
10 unchanged sentences
A decline in backlog levels could result in more variability and less predictability in our quarter-to-quarter net revenue and operating results.
−Removed: We are subject to risks related to international sales and purchases.
−Removed: We expect that revenue from international sales will continue to represent a significant portion of our total revenue.
−Removed: As such, a significant slowdown or instability in relevant foreign economies or lower investments in new infrastructure, could have a negative impact on our sales.
−Removed: We also purchase a portion of the materials included in our products from overseas sources.
−Removed: Our international sales and purchases are subject to numerous United States and foreign laws and regulations, including, without limitation, tariffs, trade sanctions, trade barriers, trade embargoes, regulations relating to import-export control, technology transfer restrictions, the International Traffic in Arms Regulation promulgated under the Arms Export Control Act, the Foreign Corrupt Practices Act and the anti-boycott provisions of the U.S.
−Removed: Export Administration Act.
−Removed: For example, on May 15, 2019, the Bureau of Industry and Security (BIS) of the U.S.
−Removed: Department of Commerce added Huawei Technologies Co., Ltd.
−Removed: and numerous more of its affiliates since then (collectively, “Huawei”) to the “Entity List” maintained by the U.S.
−Removed: Department of Commerce, which imposes limitations on the supply of certain United States items and product support to Huawei.
−Removed: To comply with the Entity List restrictions, we suspended shipments of all products to Huawei and cannot predict when we will be able to resume such shipments, which has reduced our revenue and profit in at least the near term and increased our inventories of product intended for Huawei.
−Removed: Government maintains the restrictions on Huawei or
−Removed: imposes restrictions on sales to other foreign customers, as it did in October 2019 with the addition of 28 new companies to the Entity List and has continued to do so through several Entity Listings and other sanctions since then, it will reduce company revenue and profit related to those customers at least in the short term and could have a potential longer-term impact.
−Removed: In the second quarter of fiscal 2020, we recorded an $8.3 million reserve on inventory manufactured for Huawei.
−Removed: Additionally, like many global manufacturers, we continue to evaluate and address the short-term and potential long-term impact of the recent change to the United States foreign direct product rule, military end-use restrictions, changes in export licensing policies, and tariffs imposed on Chinese goods and any corresponding Chinese regulations or tariffs in response.
−Removed: If we fail to comply with these laws and regulations, we could be liable for administrative, civil or criminal liabilities, and, in the extreme case, we could be suspended or debarred from government contracts or have our export privileges suspended, which could have a material adverse effect on our business.
−Removed: International sales and purchases are also subject to a variety of other risks, including risks arising from currency fluctuations, collection issues and taxes.
−Removed: We have entered into and may in the future enter into foreign currency derivative financial instruments in an effort to manage or hedge some of our foreign exchange rate risk.
−Removed: We may not be able to engage in hedging transactions in the future, and, even if we do, foreign currency fluctuations may still have a material adverse effect on our results of operations.
−Removed: Our operations in foreign countries expose us to certain risks inherent in doing business internationally, which may adversely affect our business, results of operations or financial condition.
−Removed: We have revenue, operations, manufacturing facilities and contract manufacturing arrangements in foreign countries that expose us to certain risks.
−Removed: For example, fluctuations in exchange rates may affect our revenue, expenses and results of operations as well as the value of our assets and liabilities as reflected in our financial statements.
−Removed: We are also subject to other types of risks, including the following:
−Removed: • protection of intellectual property and trade secrets;
−Removed: • tariffs, customs, trade sanctions, trade embargoes and other barriers to importing/exporting materials and products in a cost-effective and timely manner, or changes in applicable tariffs or custom rules;
−Removed: • the burden of complying with and changes in United States or international taxation policies;
−Removed: • timing and availability of export licenses;
−Removed: • rising labor costs;
−Removed: • disruptions in or inadequate infrastructure of the countries where we operate;
−Removed: • the impact of public health epidemics on employees and the global economy, such as COVID-19;
−Removed: • difficulties in collecting accounts receivable;
−Removed: • difficulties in staffing and managing international operations;
−Removed: • the burden of complying with foreign and international laws and treaties.
−Removed: For example, the United States tariffs imposed on Chinese goods, among other potential countries and any corresponding tariffs from China or such other countries in response has, and may in the future, negatively impact demand and/or increase the costs for our products.
−Removed: In some instances, we have received and may continue to receive incentives from foreign governments to encourage our investment in certain countries, regions or areas outside of the United States.
−Removed: In particular, we have received and may continue to receive such incentives in connection with our operations in Asia, as Asian national and local governments seek to encourage the development of the technology industry.
−Removed: Government incentives may include tax rebates, reduced tax rates, favorable lending policies and other measures, some or all of which may be available to us due to our foreign operations.
−Removed: Any of these incentives could be reduced or eliminated by governmental authorities at any time or as a result of our inability to maintain minimum operations necessary to earn the incentives.
−Removed: Any reduction or elimination of incentives currently provided for our operations could adversely affect our business and results of operations.
−Removed: These same governments also may provide increased incentives to or require production processes that favor local companies, which could further negatively impact our business and results of operations.
−Removed: Changes in regulatory, geopolitical, social, economic, or monetary policies and other factors, including those which may result from the outcome of the 2020 U.S.
−Removed: Presidential election, if any, may have a material adverse effect on our business in the future, or may require us to exit a particular market or significantly modify our current business practices.
−Removed: Abrupt political change, terrorist activity and armed conflict pose a risk of general economic disruption in affected countries, which could also result in an adverse effect on our business and results of operations.
We operate in industries that are subject to significant fluctuation in supply and demand and ultimately pricing that affects our revenue and profitability.
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Certain distributors have limited rights to return inventory under stock rotation programs and have limited price protection rights for which we make estimates.
−Removed: We evaluate inventory levels in the distribution channel, current economic trends and other related factors in order to account for these factors in our judgments and estimates.
+Added: We evaluate inventory levels in the distribution channel, current economic
+Added: trends and other related factors in order to account for these factors in our judgments and estimates.
As inventory levels and product return trends change or we make changes to our distributor roster, we may have to revise our estimates and incur additional costs, and our gross margins and operating results could be adversely impacted.
3 unchanged sentences
In addition, if we successfully penetrate or develop these channels, we cannot guarantee that customers will accept our products or that we will be able to manufacture and deliver them in the timeline established by our customers.
−Removed: We may be subject to confidential information theft or misuse, which could harm our business and results of operations.
−Removed: We face attempts by others to gain unauthorized access to our information technology systems on which we maintain proprietary and other confidential information.
−Removed: Our security measures may be breached as the result of industrial or other espionage actions of outside parties, employees, employee error, malfeasance or otherwise, and as a result, an unauthorized party may obtain access to our systems.
−Removed: The risk of a security breach or disruption, particularly through cyber-attacks, or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as cyber-attacks have become more prevalent and harder to detect and fight against.
−Removed: Additionally, outside parties may attempt to access our confidential information through other means, for example by fraudulently inducing our employees to disclose confidential information.
−Removed: We actively seek to prevent, detect and investigate any unauthorized access, which sometimes occurs.
−Removed: To date, we do not believe that such unauthorized access has caused us any material damage.
−Removed: We might be unaware of any such access or unable to determine its magnitude and effects.
−Removed: In addition, these threats are constantly evolving, thereby increasing the difficulty of successfully defending against them or implementing adequate preventative measures.
−Removed: The theft and/or unauthorized use or publication of our trade secrets and other confidential business information as a result of such an incident could adversely affect our competitive position and the value of our investment in research and development could be reduced.
−Removed: Our business could be subject to significant disruption and we could suffer monetary or other losses.
−Removed: Our disclosure controls and procedures address cybersecurity and include elements intended to ensure that there is an analysis of potential disclosure obligations arising from security breaches.
−Removed: In addition, we are subject to data privacy, protection and security laws and regulations, including the European General Data Protection Act (GDPR) that governs personal information of European persons.
−Removed: We also maintain compliance programs to address the potential applicability of restrictions against trading while in possession of material, nonpublic information generally and in connection with a cyber-security breach.
−Removed: However, a breakdown in existing controls and procedures around our cyber-security environment may prevent us from detecting, reporting or responding to cyber incidents in a timely manner and could have a material adverse effect on our financial position and value of our stock.
−Removed: There are limitations on our ability to protect our intellectual property.
−Removed: Our intellectual property position is based in part on patents owned by us and patents licensed to us.
−Removed: We intend to continue to file patent applications in the future, where appropriate, and to pursue such applications with U.S.
−Removed: and certain foreign patent authorities.
−Removed: Our existing patents are subject to expiration and re-examination and we cannot be sure that additional patents will be issued on any new applications around the covered technology or that our existing or future patents will not be successfully contested by third parties.
−Removed: Also, since issuance of a valid patent does not prevent other companies from using alternative, non-infringing technology, we cannot be sure that any of our patents, or patents issued to others and licensed to us, will provide significant commercial protection, especially as new competitors enter the market.
−Removed: We periodically discover products that are counterfeit reproductions of our products or that otherwise infringe on our intellectual property rights.
−Removed: The actions we take to establish and protect trademarks, patents and other intellectual property rights may not be adequate to prevent imitation of our products by others, and therefore, may adversely affect our sales and our brand and result in the shift of customer preference away from our products.
−Removed: Further, the actions we take to establish and protect trademarks, patents and other intellectual property rights could result in significant legal expense and divert the efforts of our technical personnel and management, even if the litigation or other action results in a determination favorable to us.
−Removed: We also rely on trade secrets and other non-patented proprietary information relating to our product development and manufacturing activities.
−Removed: We try to protect this information through appropriate efforts to maintain its secrecy, including requiring employees and third parties to sign confidentiality agreements.
−Removed: We cannot be sure that these efforts will be successful or that the confidentiality agreements will not be breached.
−Removed: We also cannot be sure that we would have adequate remedies for any breach of such agreements or other misappropriation of our trade secrets, or that our trade secrets and proprietary know-how will not otherwise become known or be independently discovered by others.
The markets in which we operate are highly competitive and have evolving technical requirements.
13 unchanged sentences
We depend on a limited number of customers, including distributors, for a substantial portion of our revenue, and the loss of, or a significant reduction in purchases by, one or more of these customers could adversely affect our operating results.
−Removed: We receive a significant amount of our revenue from a limited number of customers, including distributors, one of which represented 15% of our consolidated revenue in fiscal 2020.
+Added: We receive a significant amount of our revenue from a limited number of customers and distributors, two of which represented more than 10% of our consolidated revenue from continuing operations in fiscal 2020.
Many of our customer orders are made on a purchase order basis, which does not generally require any long-term customer commitments.
12 unchanged sentences
Additionally, general shortages in the marketplace of certain raw materials or key components may adversely impact our business.
−Removed: In the past, we have experienced decreases in our production yields when suppliers have varied from previously agreed upon specifications or made other modifications we do not specify, which impacted our cost of revenue.
+Added: In the past, we have
+Added: experienced decreases in our production yields when suppliers have varied from previously agreed upon specifications or made other modifications we do not specify, which impacted our cost of revenue.
Additionally, the inability of our suppliers to access capital efficiently could cause disruptions in their businesses, thereby negatively impacting ours.
7 unchanged sentences
In our fabrication process, we consume a number of precious metals and other commodities, which are subject to high price volatility.
−Removed: Our operating margins could be significantly affected if we are not able to pass along price increases to our
+Added: Our operating margins could be significantly affected if we are not able to pass along price increases to our customers.
In addition, production could be disrupted by the unavailability of the resources used in production such as water, silicon, electricity and gases.
4 unchanged sentences
Even if our customers are able to develop and produce products or systems that incorporate our substrates, die, components or modules, there can be no assurance that our customers will be successful in marketing and selling these products or systems in the marketplace.
−Removed: We may be required to recognize a significant charge to earnings if our goodwill or other intangible assets become impaired.
−Removed: Goodwill is reviewed for impairment annually and when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.
−Removed: We assess the recoverability of the unamortized balance of our finite-lived intangible assets when indicators of potential impairment are present.
−Removed: Factors that may indicate that the carrying value of our goodwill or other intangible assets may not be recoverable include a decline in our stock price and market capitalization and slower growth rates in our industry.
−Removed: The recognition of a significant charge to earnings in our consolidated financial statements resulting from any impairment of our goodwill or other intangible assets could adversely impact our results of operations.
−Removed: We review goodwill for impairment whenever events or circumstances indicate potential impairment.
−Removed: In the first quarter of fiscal 2021, we determined we would more likely than not sell all or a portion of the assets comprising the LED Products segment below carrying value.
−Removed: As a result of this triggering event, we recorded an impairment to goodwill of $105.7 million as of September 27, 2020.
−Removed: As of September 27, 2020, we had not met the held-for-sale criteria.
−Removed: In order to compete, we must attract, motivate and retain key employees, and our failure to do so could harm our results of operations.
−Removed: Hiring and retaining qualified executives, scientists, engineers, technical staff, sales personnel and production personnel is critical to our business, and competition for experienced employees in our industry can be intense.
−Removed: As a global company, this issue is not limited to the United States, but includes our other locations such as Europe and Asia.
−Removed: For example, there is substantial competition for qualified and capable personnel, particularly experienced engineers and technical personnel, which may make it difficult for us to recruit and retain qualified employees.
−Removed: If we are unable to staff sufficient and adequate personnel at our facilities, we may experience lower revenue or increased manufacturing costs, which would adversely affect our results of operations.
−Removed: To help attract, motivate and retain key employees, we use benefits such as stock-based compensation awards.
−Removed: If the value of such awards does not appreciate, as measured by the performance of the price of our common stock or if our stock-based compensation otherwise ceases to be viewed as a valuable benefit, our ability to attract, retain and motivate employees could be weakened, which could harm our business and results of operations.
Our results may be negatively impacted if customers do not maintain their favorable perception of our brands and products.
25 unchanged sentences
Increased warranty claims could result in significant losses due to a rise in warranty expense and costs associated with customer support.
+Added: As a result of our continued expansion into new markets, we may compete with existing customers who may reduce their orders.
+Added: Through acquisitions and organic growth, we continue to expand into new markets and new market segments.
+Added: Many of our existing customers who purchase our Wolfspeed substrate materials develop and manufacture products using those wafers, die and components that are offered into the same power and RF markets.
+Added: As a result, some of our current customers perceive us as a competitor in these market segments.
+Added: In response, our customers may reduce or discontinue their orders for our Wolfspeed substrate materials.
+Added: This reduction in or discontinuation of orders could occur faster than our sales growth in these new markets, which could adversely affect our business, results of operations or financial condition.
+Added: Risks related to our global operations
+Added: Global economic conditions could materially adversely impact demand for our products and services.
+Added: Our operations and performance depend significantly on worldwide economic conditions.
+Added: Uncertainty about global economic conditions could result in customers postponing purchases of our products and services in response to tighter credit, unemployment, negative financial news and/or declines in income or asset values and other macroeconomic factors, which could have a material negative effect on demand for our products and services and, accordingly, on our business, results of operations or financial condition.
+Added: For example, any economic and political uncertainty caused by the United States tariffs imposed on goods from China, among other potential countries, and any corresponding tariffs or currency devaluations from China or such other countries in response, has negatively impacted, and may in the future, negatively impact, demand and/or increase the cost for our products.
+Added: Additionally, our international sales are subject to variability as our selling prices become less competitive in countries with currencies that are declining in value against the U.S.
+Added: Dollar and more competitive in countries with currencies that are increasing in value against the U.S.
+Added: In addition, our international purchases can become more expensive if the U.S.
+Added: Dollar weakens against the foreign currencies in which we are billed.
+Added: We are subject to risks related to international sales and purchases.
+Added: We expect that revenue from international sales will continue to represent a significant portion of our total revenue.
+Added: As such, a significant slowdown or instability in relevant foreign economies or lower investments in new infrastructure, could have a negative impact on our sales.
+Added: We also purchase a portion of the materials included in our products from overseas sources.
+Added: Our international sales and purchases are subject to numerous United States and foreign laws and regulations, including, without limitation, tariffs, trade sanctions, trade barriers, trade embargoes, regulations relating to import-export control, technology transfer restrictions, the International Traffic in Arms Regulation promulgated under the Arms Export Control Act, the Foreign Corrupt Practices Act and the anti-boycott provisions of the U.S.
+Added: Export Administration Act.
+Added: For example, on May 15, 2019, the Bureau of Industry and Security (BIS) of the U.S.
+Added: Department of Commerce added Huawei to the “Entity List” maintained by the U.S.
+Added: Department of Commerce, which imposes limitations on the supply of certain United States items and product support to Huawei.
+Added: To comply with the Entity List restrictions, we suspended shipments of all products to Huawei and cannot predict when we will be able to resume such shipments, which has reduced our revenue and profit in at least the near term and increased our inventories of product intended for Huawei.
+Added: Government maintains the restrictions on Huawei or imposes restrictions on sales to other foreign customers, as it did in October 2019 with the addition of 28 new companies to the Entity List and has continued to do so through several Entity Listings and other sanctions since then, it will
+Added: reduce company revenue and profit related to those customers at least in the short term and could have a potential longer-term impact.
+Added: In the second quarter of fiscal 2020, we recorded an $8.3 million reserve on inventory manufactured for Huawei.
+Added: Additionally, like many global manufacturers, we continue to evaluate and address the short-term and potential long-term impact of the recent change to the United States foreign direct product rule, military end-use restrictions, changes in export licensing policies, and tariffs imposed on Chinese goods and any corresponding Chinese regulations or tariffs in response.
+Added: If we fail to comply with these laws and regulations, we could be liable for administrative, civil or criminal liabilities, and, in the extreme case, we could be suspended or debarred from government contracts or have our export privileges suspended, which could have a material adverse effect on our business.
+Added: International sales and purchases are also subject to a variety of other risks, including risks arising from currency fluctuations, collection issues and taxes.
+Added: We have entered into and may in the future enter into foreign currency derivative financial instruments in an effort to manage or hedge some of our foreign exchange rate risk.
+Added: We may not be able to engage in hedging transactions in the future, and, even if we do, foreign currency fluctuations may still have a material adverse effect on our results of operations.
+Added: Our operations in foreign countries expose us to certain risks inherent in doing business internationally, which may adversely affect our business, results of operations or financial condition.
+Added: We have revenue, operations, manufacturing facilities and contract manufacturing arrangements in foreign countries that expose us to certain risks.
+Added: For example, fluctuations in exchange rates may affect our revenue, expenses and results of operations as well as the value of our assets and liabilities as reflected in our financial statements.
+Added: We are also subject to other types of risks, including the following:
+Added: • protection of intellectual property and trade secrets;
+Added: • tariffs, customs, trade sanctions, trade embargoes and other barriers to importing/exporting materials and products in a cost-effective and timely manner, or changes in applicable tariffs or custom rules;
+Added: • the burden of complying with and changes in United States or international taxation policies;
+Added: • timing and availability of export licenses;
+Added: • rising labor costs;
+Added: • disruptions in or inadequate infrastructure of the countries where we operate;
+Added: • the impact of public health epidemics on employees and the global economy, such as COVID-19;
+Added: • difficulties in collecting accounts receivable;
+Added: • difficulties in staffing and managing international operations;
+Added: • the burden of complying with foreign and international laws and treaties.
+Added: For example, the United States tariffs imposed on Chinese goods, among other potential countries and any corresponding tariffs from China or such other countries in response has, and may in the future, negatively impact demand and/or increase the costs for our products.
+Added: In some instances, we have received and may continue to receive incentives from foreign governments to encourage our investment in certain countries, regions or areas outside of the United States.
+Added: In particular, we have received and may continue to receive such incentives in connection with our operations in Asia, as Asian national and local governments seek to encourage the development of the technology industry.
+Added: Government incentives may include tax rebates, reduced tax rates, favorable lending policies and other measures, some or all of which may be available to us due to our foreign operations.
+Added: Any of these incentives could be reduced or eliminated by governmental authorities at any time or as a result of our inability to maintain minimum operations necessary to earn the incentives.
+Added: Any reduction or elimination of incentives currently provided for our operations could adversely affect our business and results of operations.
+Added: These same governments also may provide increased incentives to or require production processes that favor local companies, which could further negatively impact our business and results of operations.
+Added: Changes in regulatory, geopolitical, social, economic, or monetary policies and other factors, including those which may result from the Biden administration and Democratic control of Congress, if any, may have a material adverse effect on our business in the future, or may require us to exit a particular market or significantly modify our current business practices.
+Added: For example, President-elect Biden has suggested the reversal or modification of some portions of the Tax Cuts and Jobs Act of 2017 (“TCJA”) and certain of these proposals, if enacted, could result in a higher U.S.
+Added: corporate income tax rate than is currently in effect.
+Added: Abrupt political change, terrorist activity and armed conflict pose a risk of general economic disruption in affected countries, which could also result in an adverse effect on our business and results of operations.
+Added: Our business may be adversely affected by uncertainties in the global financial markets and our or our customers’ or suppliers’ ability to access the capital markets.
+Added: Global financial markets continue to reflect uncertainty, which has been heightened by the COVID-19 pandemic.
+Added: Given these uncertainties, there could be future disruptions in the global economy, financial markets and consumer confidence.
+Added: If economic conditions deteriorate unexpectedly, our business and results of operations could be materially and adversely affected.
+Added: For example, our customers, including our distributors and their customers, may experience difficulty obtaining the working capital and other financing necessary to support historical or projected purchasing patterns, which could negatively affect our results of operations.
+Added: Although we believe we have adequate liquidity and capital resources to fund our operations internally and under our existing line of credit, our inability to access the capital markets on favorable terms in the future, or at all, may adversely affect our financial performance.
+Added: The inability to obtain adequate financing from debt or capital sources in the future could force us to self-fund strategic initiatives or even forego certain opportunities, which in turn could potentially harm our performance.
+Added: Risks associated with our strategic transactions
+Added: We are subject to a number of risks associated with the sale of our LED Products segment, and these risks could adversely impact our operations, financial condition and business.
+Added: On October 18, 2020, we executed an Asset Purchase Agreement (the Purchase Agreement) with SMART with respect to the LED Business Divestiture.
+Added: We are subject to a number of risks associated with this transaction, including risks associated with:
+Added: • the failure to satisfy, on a timely basis or at all, the closing conditions set forth in the Purchase Agreement, including the receipt of governmental and regulatory consents and approvals;
+Added: • the separation of the LED Business, and related information technology, from the businesses we are retaining and the operation of our retained business without the LED Business;
+Added: • issues, delays or complications in completing required transition activities to allow the LED Business to operate under the SMART portfolio of businesses after the closing, including incurring unanticipated costs to complete such activities;
+Added: • unfavorable reaction to the sale by customers, competitors, suppliers and employees;
+Added: • the disruption to and uncertainty in our business and our relationships with our customers, including attempts by our customers to terminate or renegotiate their relationships with us or decisions by our customers to defer or delay purchases from us;
+Added: • difficulties in hiring, retaining and motivating key personnel during this process or as a result of uncertainties generated by this process or any developments or actions relating to it;
+Added: • the diversion of our management’s attention away from the operation of the business we are retaining;
+Added: • the need to incur significant transaction costs in connection with the transaction, regardless of whether it is completed;
+Added: • the restrictions on and obligations with respect to our business set forth in the Purchase Agreement and, following closing, the transition services agreement and the Wafer Supply Agreement, in each case between us and SMART;
+Added: • the need to provide transition services in connection with the transaction, which may result in the diversion of resources and focus;
+Added: • our failure to realize the full purchase price anticipated under the Purchase Agreement, including the ability of the LED Business to generate revenue and gross profit in the first four full fiscal quarters following the closing sufficient to result in payment of the targeted earnout payment or any earnout payment;
+Added: • the ability of SMART to pay the unsecured promissory note to be issued to us at the closing of the transaction and any additional unsecured promissory notes issued upon achievement of the general revenue and gross profit targets.
+Added: As a result of these risks, we may be unable to realize the anticipated benefits of the transaction, including the total amount of cash we expect to realize.
+Added: Our failure to realize the anticipated benefits of the transaction would adversely impact our operations, financial condition and business and could limit our ability to pursue additional strategic transactions.
+Added: We are subject to a number of risks associated with the sale of the Lighting Products business unit, and these risks could adversely impact our operations, financial condition and business.
+Added: On May 13, 2019, we closed the sale of our former Lighting Products business unit to IDEAL Industries, Inc.
+Added: We are subject to a number of risks associated with this transaction, including risks associated with:
+Added: • the restrictions on and obligations with respect to our remaining businesses following closing set forth in the transition services agreement and the LED supply agreement, in each case between us and IDEAL, including the need to provide
+Added: transition services in connection with the transaction, which may result in the diversion of resources and focus from our remaining businesses;
+Added: • issues, delays, complications and/or additional costs associated with the transition of the operations, systems, technology infrastructure and data, third-party contracts, and personnel of the Lighting Products business unit and provision of transition services, each, as applicable, within the term of the transition services agreement;
+Added: • any required payments of indemnification obligations under the Purchase Agreement with IDEAL for retained liabilities and breaches of representations, warranties or covenants;
+Added: • our failure to realize the full purchase price anticipated under the Purchase Agreement, including the ability of the Lighting Products business unit to generate adjusted EBITDA in the third year post-closing sufficient to result in payment of the targeted earnout or any earnout payment.
+Added: As a result of these risks, we may be unable to realize the anticipated benefits of the transaction, including the total amount of cash we expect to realize.
+Added: Our failure to realize the anticipated benefits of the transaction would adversely impact our operations, financial condition and business and could limit our ability to pursue additional strategic transactions.
+Added: If we fail to evaluate and execute strategic opportunities successfully, our business may suffer.
+Added: From time to time, including the present, we evaluate strategic opportunities available to us for product, technology or business transactions, such as business acquisitions, investments, joint ventures, divestitures, or spin-offs.
+Added: For example, in the fourth quarter of fiscal 2019, we completed the sale of our Lighting Products business unit to IDEAL and in the second quarter of fiscal 2021 we entered into the Purchase Agreement with SMART with respect to the LED Business Divestiture.
+Added: If we choose to enter into such transactions, we face certain risks including:
+Added: • the failure of an acquired business, investee or joint venture to meet our performance and financial expectations;
+Added: • identification of additional liabilities relating to an acquired business;
+Added: • loss of existing customers of our current and acquired businesses due to concerns that new product lines may be in competition with the customers’ existing product lines or due to regulatory actions taken by governmental agencies;
+Added: • that we are not able to enter into acceptable contractual arrangements with the significant customers of an acquired business;
+Added: • difficulty integrating an acquired business's operations, personnel and financial and operating systems into our current business;
+Added: • that we are not able to develop and expand customer bases and accurately anticipate demand from end customers, which can result in increased inventory and reduced orders as we experience wide fluctuations in supply and demand;
+Added: • diversion of management attention;
+Added: • difficulty separating the operations, personnel and financial and operating systems of a spin-off or divestiture from our current business;
+Added: • the possibility we are unable to complete the transaction and expend substantial resources without achieving the desired benefit;
+Added: • the inability to obtain required regulatory agency approvals;
+Added: • reliance on a transaction counterparty for transition services for an extended period of time, which may result in additional expenses and delay the integration of the acquired business and realization of the desired benefit of the transaction;
+Added: • uncertainty of the financial markets or circumstances that cause conditions that are less favorable and/or different than expected;
+Added: • expenses incurred to complete a transaction may be significantly higher than anticipated.
+Added: We may not be able to adequately address these risks or any other problems that arise from our prior or future acquisitions, investments, joint ventures, divestitures or spin-offs.
+Added: Any failure to successfully evaluate strategic opportunities and address risks or other problems that arise related to any such business transaction could adversely affect our business, results of operations or financial condition.
+Added: We are exposed to fluctuations in the market value of our investment portfolio and in interest rates, and therefore, impairment of our investments or lower investment income could harm our earnings.
+Added: We are exposed to market value and inherent interest rate risk related to our investment portfolio.
+Added: We have historically invested portions of our available cash in fixed interest rate securities such as high-grade corporate debt, commercial paper, municipal bonds, certificates of deposit, government securities and other fixed interest rate investments.
+Added: The primary objective of our cash investment policy is preservation of principal.
+Added: However, these investments are generally not Federal Deposit Insurance Corporation insured and may lose value and/or become illiquid regardless of their credit rating.
+Added: From time to time, we have also made investments in public and private companies that engage in complementary businesses.
+Added: For example, during fiscal 2015 we made an investment in Lextar, previously a publicly traded company based in Taiwan.
+Added: An investment in another company is subject to the risks inherent in the business of that company and to trends affecting the equity markets as a whole.
+Added: Investments in publicly held companies are subject to market risks and, like our investment in Lextar, may not be liquidated easily.
+Added: As a result, we may not be able to reduce the size of our position or liquidate our investments when we deem appropriate to limit our downside risk.
+Added: Should the value of any such investments we hold decline, the related write-down in value could have a material adverse effect on our financial condition and results of operations.
+Added: For example, the value of our Lextar investment declined from the date of our investment in December 2014 through the end of the second quarter of fiscal 2021 with variability between quarters, and may continue to decline in the future.
+Added: Risks associated with cybersecurity, intellectual property and litigation
+Added: We may be subject to confidential information theft or misuse, which could harm our business and results of operations.
+Added: We face attempts by others to gain unauthorized access to our information technology systems on which we maintain proprietary and other confidential information.
+Added: Our security measures may be breached as the result of industrial or other espionage actions of outside parties, employees, employee error, malfeasance or otherwise, and as a result, an unauthorized party may obtain access to our systems.
+Added: The risk of a security breach or disruption, particularly through cyber-attacks, or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as cyber-attacks have become more prevalent and harder to detect and fight against.
+Added: Additionally, outside parties may attempt to access our confidential information through other means, for example by fraudulently inducing our employees to disclose confidential information.
+Added: We actively seek to prevent, detect and investigate any unauthorized access, which sometimes occurs.
+Added: To date, we do not believe that such unauthorized access has caused us any material damage.
+Added: We might be unaware of any such access or unable to determine its magnitude and effects.
+Added: In addition, these threats are constantly evolving, thereby increasing the difficulty of successfully defending against them or implementing adequate preventative measures.
+Added: The theft and/or unauthorized use or publication of our trade secrets and other confidential business information as a result of such an incident could adversely affect our competitive position and the value of our investment in research and development could be reduced.
+Added: Our business could be subject to significant disruption and we could suffer monetary or other losses.
+Added: Our disclosure controls and procedures address cybersecurity and include elements intended to ensure that there is an analysis of potential disclosure obligations arising from security breaches.
+Added: In addition, we are subject to data privacy, protection and security laws and regulations, including the European General Data Protection Act (GDPR) that governs personal information of European persons.
+Added: We also maintain compliance programs to address the potential applicability of restrictions against trading while in possession of material, nonpublic information generally and in connection with a cyber-security breach.
+Added: However, a breakdown in existing controls and procedures around our cyber-security environment may prevent us from detecting, reporting or responding to cyber incidents in a timely manner and could have a material adverse effect on our financial position and value of our stock.
+Added: There are limitations on our ability to protect our intellectual property.
+Added: Our intellectual property position is based in part on patents owned by us and patents licensed to us.
+Added: We intend to continue to file patent applications in the future, where appropriate, and to pursue such applications with U.S.
+Added: and certain foreign patent authorities.
+Added: Our existing patents are subject to expiration and re-examination and we cannot be sure that additional patents will be issued on any new applications around the covered technology or that our existing or future patents will not be successfully contested by third parties.
+Added: Also, since issuance of a valid patent does not prevent other companies from using alternative, non-infringing technology, we cannot be sure that any of our patents, or patents issued to others and licensed to us, will provide significant commercial protection, especially as new competitors enter the market.
+Added: We periodically discover products that are counterfeit reproductions of our products or that otherwise infringe on our intellectual property rights.
+Added: The actions we take to establish and protect trademarks, patents and other intellectual property
+Added: rights may not be adequate to prevent imitation of our products by others, and therefore, may adversely affect our sales and our brand and result in the shift of customer preference away from our products.
+Added: Further, the actions we take to establish and protect trademarks, patents and other intellectual property rights could result in significant legal expense and divert the efforts of our technical personnel and management, even if the litigation or other action results in a determination favorable to us.
+Added: We also rely on trade secrets and other non-patented proprietary information relating to our product development and manufacturing activities.
+Added: We try to protect this information through appropriate efforts to maintain its secrecy, including requiring employees and third parties to sign confidentiality agreements.
+Added: We cannot be sure that these efforts will be successful or that the confidentiality agreements will not be breached.
+Added: We also cannot be sure that we would have adequate remedies for any breach of such agreements or other misappropriation of our trade secrets, or that our trade secrets and proprietary know-how will not otherwise become known or be independently discovered by others.
Litigation could adversely affect our operating results and financial condition.
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Failure to obtain a necessary license or develop an alternative solution could cause us to incur substantial liabilities and costs and to suspend the manufacture of affected products.
−Removed: We are subject to a number of risks associated with the sale of the Lighting Products business unit, and these risks could adversely impact our operations, financial condition and business.
−Removed: On May 13, 2019, we closed the sale of our former Lighting Products business unit to IDEAL.
−Removed: We are subject to a number of risks associated with this transaction, including risks associated with:
−Removed: • the restrictions on and obligations with respect to our remaining businesses following closing set forth in the transition services agreement and the LED supply agreement, in each case between us and IDEAL, including the need to provide transition services in connection with the transaction, which may result in the diversion of resources and focus from our remaining businesses;
−Removed: • issues, delays, complications and/or additional costs associated with the transition of the operations, systems, technology infrastructure and data, third-party contracts, and personnel of the Lighting Products business unit and provision of transition services, each, as applicable, within the term of the transition services agreement;
−Removed: • any required payments of indemnification obligations under the Purchase Agreement with IDEAL for retained liabilities and breaches of representations, warranties or covenants;
−Removed: • our failure to realize the full purchase price anticipated under the Purchase Agreement, including the ability of the Lighting Products business unit to generate adjusted EBITDA in the third year post-closing sufficient to result in payment of the targeted earnout or any earnout payment.
−Removed: As a result of these risks, we may be unable to realize the anticipated benefits of the transaction, including the total amount of cash we expect to realize.
−Removed: Our failure to realize the anticipated benefits of the transaction would adversely impact our operations, financial condition and business and could limit our ability to pursue additional strategic transactions.
−Removed: As a result of our continued expansion into new markets, we may compete with existing customers who may reduce their orders.
−Removed: Through acquisitions and organic growth, we continue to expand into new markets and new market segments.
−Removed: Many of our existing customers who purchase our Wolfspeed substrate materials develop and manufacture products using those wafers, die and components that are offered into the same power and RF markets.
−Removed: As a result, some of our current customers perceive us as a competitor in these market segments.
−Removed: In response, our customers may reduce or discontinue their orders for our Wolfspeed substrate materials.
−Removed: This reduction in or discontinuation of orders could occur faster than our sales growth in these new markets, which could adversely affect our business, results of operations or financial condition.
+Added: Risks related to legal, regulatory, accounting, tax and compliance matters
+Added: We may be required to recognize a significant charge to earnings if our goodwill or other intangible assets become impaired.
+Added: Goodwill is reviewed for impairment annually and when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.
+Added: We assess the recoverability of the unamortized balance of our finite-lived intangible assets
+Added: when indicators of potential impairment are present.
+Added: Factors that may indicate that the carrying value of our goodwill or other intangible assets may not be recoverable include a decline in our stock price and market capitalization and slower growth rates in our industry.
+Added: The recognition of a significant charge to earnings in our consolidated financial statements resulting from any impairment of our goodwill or other intangible assets could adversely impact our results of operations.
+Added: We review goodwill for impairment whenever events or circumstances indicate potential impairment.
+Added: In the first quarter of fiscal 2021, we determined we would more likely than not sell all or a portion of the assets comprising the LED Products segment below carrying value.
+Added: As a result of this triggering event, we recorded an impairment to goodwill of $105.7 million as of September 27, 2020.
+Added: Additionally, in the second quarter of fiscal 2021, we recorded an additional impairment to goodwill of $6.9 million.
The adoption of or changes in government and/or industry policies, standards or regulations relating to the efficiency, performance, use or other aspects of our products could impact the demand for our products.
4 unchanged sentences
Our ability and the ability of our competitors to meet these new requirements could impact competitive dynamics in the market.
−Removed: We are exposed to fluctuations in the market value of our investment portfolio and in interest rates, and therefore, impairment of our investments or lower investment income could harm our earnings.
−Removed: We are exposed to market value and inherent interest rate risk related to our investment portfolio.
−Removed: We have historically invested portions of our available cash in fixed interest rate securities such as high-grade corporate debt, commercial paper, municipal bonds, certificates of deposit, government securities and other fixed interest rate investments.
−Removed: The primary objective of our cash investment policy is preservation of principal.
−Removed: However, these investments are generally not Federal Deposit Insurance Corporation insured and may lose value and/or become illiquid regardless of their credit rating.
−Removed: From time to time, we have also made investments in public and private companies that engage in complementary businesses.
−Removed: For example, during fiscal 2015 we made an investment in Lextar, a publicly traded company based in Taiwan.
−Removed: An investment in another company is subject to the risks inherent in the business of that company and to trends affecting the equity markets as a whole.
−Removed: Investments in publicly held companies are subject to market risks and, like our investment in Lextar, may not be liquidated easily.
−Removed: As a result, we may not be able to reduce the size of our position or liquidate our investments when we deem appropriate to limit our downside risk.
−Removed: Should the value of any such investments we hold decline, the related write-down in value could have a material adverse effect on our financial condition and results of operations.
−Removed: For example, the value of our Lextar investment declined from the date of our investment in December 2014 through the end of the first quarter of fiscal 2021 with variability between quarters, and may continue to decline in the future.
−Removed: Our business may be adversely affected by uncertainties in the global financial markets and our or our customers’ or suppliers’ ability to access the capital markets.
−Removed: Global financial markets continue to reflect uncertainty, which has been heightened by the COVID-19 pandemic.
−Removed: Given these uncertainties, there could be future disruptions in the global economy, financial markets and consumer confidence.
−Removed: If economic conditions deteriorate unexpectedly, our business and results of operations could be materially and adversely affected.
−Removed: For example, our customers, including our distributors and their customers, may experience difficulty obtaining the working capital and other financing necessary to support historical or projected purchasing patterns, which could negatively affect our results of operations.
−Removed: Although we believe we have adequate liquidity and capital resources to fund our operations internally and under our existing line of credit, our inability to access the capital markets on favorable terms in the future, or at all, may adversely affect our financial performance.
−Removed: The inability to obtain adequate financing from debt or capital sources in the future could force us to self-fund strategic initiatives or even forego certain opportunities, which in turn could potentially harm our performance.
Changes in our effective tax rate may affect our results.
1 unchanged sentence
• the jurisdiction in which profits are determined to be earned and taxed;
−Removed: • changes in tax laws or interpretation of such tax laws and changes in generally accepted accounting principles, for example interpretations and U.S.
+Added: • potential changes in tax laws proposed by the incoming Biden administration and Democratic controlled Congress or alterations in the interpretation of such tax laws and changes in generally accepted accounting principles, for example interpretations and U.S.
regulations issued as a result of the significant changes to the U.S.
−Removed: tax law included within the Tax Cuts and Jobs Act of 2017 ("TCJA") and the Coronavirus Aid, Relief and Economic Security Act of 2020;
−Removed: • the outcome of the upcoming U.S.
−Removed: Presidential election on November 3, 2020;
+Added: tax law included within the TCJA and the Coronavirus Aid, Relief and Economic Security Act of 2020;
• the resolution of issues arising from tax audits with various authorities;
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Likewise, our results may be impacted due to changes in the accounting standards to be applied, such as the increased use of fair value measurement standards and changes in revenue recognition requirements.
+Added: Regulations related to conflict-free minerals may force us to incur additional expenses.
+Added: The Dodd-Frank Wall Street Reform and Consumer Protection Act contains provisions to improve transparency and accountability concerning the supply of minerals originating from the conflict zones of the Democratic Republic of Congo (DRC) and adjoining countries.
+Added: As a result, in August 2012 the SEC established new annual disclosure and reporting requirements for those companies who may use “conflict” minerals mined from the DRC and adjoining countries in their products.
+Added: Our most recent disclosure regarding our due diligence was filed in May 2020 for calendar year 2019.
+Added: These requirements could affect the sourcing and availability of certain minerals used in the manufacture of our products.
+Added: As a result, we may not be able to obtain the relevant minerals at competitive prices and there will likely be additional costs associated with complying with the due diligence procedures as required by the SEC.
+Added: In addition, because our supply chain is complex, we may face reputational challenges with our customers and other stakeholders if we are unable to sufficiently verify the origins of all minerals used in our products through the due diligence procedures, and we may incur additional costs as a result of changes to product, processes or sources of supply as a consequence of these requirements.
+Added: General risk factors
Catastrophic events may disrupt our business.
2 unchanged sentences
There may also be secondary impacts that are unforeseeable as well, such as impacts to our customers, which could cause delays in new orders, delays in completing sales or even order cancellations.
+Added: In order to compete, we must attract, motivate and retain key employees, and our failure to do so could harm our results of operations.
+Added: Hiring and retaining qualified executives, scientists, engineers, technical staff, sales personnel and production personnel is critical to our business, and competition for experienced employees in our industry can be intense.
+Added: As a global company, this issue is not limited to the United States, but includes our other locations such as Europe and Asia.
+Added: For example, there is substantial competition for qualified and capable personnel, particularly experienced engineers and technical personnel, which may make it difficult for us to recruit and retain qualified employees.
+Added: If we are unable to staff sufficient and adequate personnel at our facilities, we may experience lower revenue or increased manufacturing costs, which would adversely affect our results of operations.
+Added: To help attract, motivate and retain key employees, we use benefits such as stock-based compensation awards.
+Added: If the value of such awards does not appreciate, as measured by the performance of the price of our common stock or if our stock-based compensation otherwise ceases to be viewed as a valuable benefit, our ability to attract, retain and motivate employees could be weakened, which could harm our business and results of operations.
Our stock price may be volatile.
Historically, our common stock has experienced substantial price volatility, particularly as a result of significant fluctuations in our revenue, earnings and margins over the past few years, and variations between our actual financial results and the published expectations of analysts.
−Removed: For example, the closing price per share of our common stock on the Nasdaq Global Select Market ranged from a low of $29.15 to a high of $73.69 during the twelve months ended September 27, 2020.
+Added: For example, the closing price per share of our common stock on the Nasdaq Global Select Market ranged from a low of $29.15 to a high of $104.83 during the twelve months ended December 27, 2020.
If our future operating results or margins are below the expectations of stock market analysts or our investors, our stock price will likely decline.
2 unchanged sentences
We have outstanding debt which could materially restrict our business and adversely affect our financial condition, liquidity and results of operations.
−Removed: As of September 27, 2020, our indebtedness consisted of $424.8 million aggregate principal amount of our 2023 Notes and $575.0 million aggregate principal amount of our 2026 Notes (collectively with the 2023 Notes, the Notes) and potential borrowings from our revolving line of credit.
+Added: As of December 27, 2020, our indebtedness consisted of $424.8 million aggregate principal amount of our 2023 Notes and $575.0 million aggregate principal amount of our 2026 Notes (collectively with the 2023 Notes, the Notes) and potential borrowings from our revolving line of credit.
Our ability to pay interest and repay the principal for any outstanding indebtedness under our line of credit and the Notes is dependent upon our ability to manage our business operations and generate sufficient cash flows to service such debt.
15 unchanged sentences
If our indebtedness is accelerated, we cannot be certain that we will have sufficient funds to pay the accelerated indebtedness or that we will have the ability to refinance accelerated indebtedness on terms favorable to us or at all.
−Removed: Regulations related to conflict-free minerals may force us to incur additional expenses.
−Removed: The Dodd-Frank Wall Street Reform and Consumer Protection Act contains provisions to improve transparency and accountability concerning the supply of minerals originating from the conflict zones of the Democratic Republic of Congo (DRC) and adjoining countries.
−Removed: As a result, in August 2012 the SEC established new annual disclosure and reporting requirements for those companies who may use “conflict” minerals mined from the DRC and adjoining countries in their products.
−Removed: Our most recent disclosure regarding our due diligence was filed in May 2020 for calendar year 2019.
−Removed: These requirements could affect the sourcing and availability of certain minerals used in the manufacture of our products.
−Removed: As a result, we may not be able to obtain the relevant minerals at competitive prices and there will likely be additional costs associated with complying with the due diligence procedures as required by the SEC.
−Removed: In addition, because our supply chain is complex, we may face reputational challenges with our customers and other stakeholders if we are unable to sufficiently verify the origins of all minerals used in our products through the due diligence procedures, and we may incur additional costs as a result of changes to product, processes or sources of supply as a consequence of these requirements.
Unregistered Sales of Equity Securities and Use of Proceeds
5 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.