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We initially experienced some limited disruptions in supply from some of our suppliers, although the disruptions to date have not been significant.
−Removed: At some of our contract manufacturers in Asia, which include captive lines, we are currently experiencing, and may continue to experience, some disruptions in supply from containment measures.
−Removed: In the United States, previously enacted restrictions were gradually lifted as vaccinations became increasingly available and the portion of vaccinated individuals increased.
−Removed: However, despite significant declines in the number of new cases, COVID-19 cases, including so called 'breakthrough' cases involving individuals that were previously vaccinated, started to increase during the first quarter of fiscal 2022.
+Added: At some of our contract manufacturers in Asia, which include captive lines, we have experienced, and may experience in the future, some disruptions in supply from containment measures.
Vaccine resistance, coupled with the emergence of fast-spreading variants and the potential waning effectiveness of vaccines, have introduced renewed uncertainty into whether additional measures will be implemented to combat the spread of COVID-19.
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However, it may materially affect our ability to obtain raw materials, manage prices, manage customer credit risk, manufacture products or deliver inventory in a timely manner, and it also may impair our ability to meet customer demand for products, result in lost sales, additional costs, or penalties, or damage our reputation.
−Removed: The extent to which COVID-19, its variants or any other health epidemic will further impact our operations and results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of
−Removed: COVID-19 and its variants, the efficacy and effectiveness of vaccines, and the actions to contain the virus or treat its impact, among others.
+Added: The extent to which COVID-19, its variants or any other health epidemic will further impact our operations and 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 its variants, the efficacy and effectiveness of vaccines, and the actions to contain the virus or treat its impact, among others.
Risks related to sales, product development and manufacturing
−Removed: Our operating results are substantially dependent on the acceptance of new products.
−Removed: Our future success may depend on our ability to deliver new, higher performing and/or lower cost solutions for existing and new markets and for customers to accept those solutions.
−Removed: The development of new products is a highly complex process, and we have in some instances experienced delays in completing the development, introduction and qualification of new products which has impacted our results in the past.
−Removed: Our research and development efforts are aimed at solving increasingly complex problems, and we do not expect that all our projects will be successful.
−Removed: The successful development, introduction and acceptance of new products depend on a number of factors, including the following:
−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;
−Removed: • our ability to effectively transfer increasingly complex products and technology from development to manufacturing, including the transition to 200mm substrates;
−Removed: • our ability to introduce new products in a timely and cost-effective manner;
−Removed: • our ability to secure volume purchase orders related to new products;
−Removed: • achievement of technology breakthroughs required to make commercially viable products;
−Removed: • the accuracy of our predictions for market requirements;
−Removed: • our ability to predict, influence and/or react to evolving standards;
−Removed: • acceptance of new technology in certain markets;
−Removed: • our ability to protect intellectual property developed in new products;
−Removed: • the availability of qualified research and development personnel;
−Removed: • our timely completion of product designs and development;
−Removed: • our ability to develop repeatable processes to manufacture new products in sufficient quantities, with the desired specifications and at competitive costs;
−Removed: • our customers’ ability to develop competitive products incorporating our products;
−Removed: • market acceptance of our products and our customers’ products.
−Removed: If any of these or other similar factors becomes problematic, we may not be able to deliver and introduce new products in a timely or cost-effective manner.
We face significant challenges managing our growth strategy.
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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.
+Added: Our operating results are substantially dependent on the acceptance of new products.
+Added: Our future success may depend on our ability to deliver new, higher performing and/or lower cost solutions for existing and new markets and for customers to accept those solutions.
+Added: The development of new products is a highly complex process, and we have in some instances experienced delays in completing the development, introduction and qualification of new products which has impacted our results in the past.
+Added: Our research and development efforts are aimed at solving increasingly complex problems, and we do not expect that all our projects will be successful.
+Added: 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;
+Added: • our ability to introduce new products in a timely and cost-effective manner;
+Added: • our ability to secure volume purchase orders related to new products;
+Added: • achievement of technology breakthroughs required to make commercially viable products;
+Added: • the accuracy of our predictions for market requirements;
+Added: • our ability to predict, influence and/or react to evolving standards;
+Added: • acceptance of new technology in certain markets;
+Added: • our ability to protect intellectual property developed in new products;
+Added: • the availability of qualified research and development personnel;
+Added: • our timely completion of product designs and development;
+Added: • our ability to develop repeatable processes to manufacture new products in sufficient quantities, with the desired specifications and at competitive costs;
+Added: • our customers’ ability to develop competitive products incorporating our products;
+Added: • market acceptance of our products and our customers’ products.
+Added: If any of these or other similar factors becomes problematic, we may not be able to deliver and introduce new products in a timely or cost-effective manner.
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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Significant or prolonged shortages of our products could delay customer manufacturing and affect our relationships with these customers.
−Removed: Due to the proportionately high fixed cost nature of our business (such as facility costs), if demand does not materialize at the rate forecasted, we may not be able to scale back our manufacturing expenses or overhead costs to correspond to the demand.
+Added: Due to the proportionately high fixed cost nature of our business (such as facility costs), if demand does not materialize at the rate forecasted, we may not be able to scale back our manufacturing expenses or overhead costs quickly enough to correspond to the lower than expected demand.
This could result in lower margins and adversely impact our business and results of operations.
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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 operate in industries that are subject to significant fluctuation in supply and demand and ultimately pricing, which affects our revenue and profitability.
−Removed: The industries we serve are in different stages of adoption and are characterized by constant and rapid technological change, rapid product obsolescence and price erosion, evolving standards and fluctuations in product supply and demand.
−Removed: The semiconductor industry is characterized by rapid technological change, high capital expenditures, short product life cycles and continuous advancements in process technologies and manufacturing facilities.
−Removed: As the markets for our products mature, additional fluctuations may result from variability and consolidations within the industry’s customer base.
−Removed: These fluctuations have been characterized by lower product demand, production overcapacity, higher inventory levels and aggressive pricing actions by our competitors.
−Removed: These fluctuations have also been characterized by higher demand for key components and equipment used in, or in the manufacture of, our products resulting in longer lead times, supply delays and production disruptions.
−Removed: We have experienced these conditions in our business and may experience such conditions in the future, which could have a material negative impact on our business, results of operations or financial condition.
−Removed: In addition, as we diversify our product offerings and as pricing differences in the average selling prices among our product lines widen, a change in the mix of sales among our product lines may increase volatility in our revenue and gross margin from period to period.
We face risks relating to our suppliers, including that we rely on a number of key sole source and limited source suppliers, are subject to high price volatility on certain commodity inputs, variations in parts quality, and raw material consistency and availability, and rely on independent shipping companies for delivery of our products.
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Additionally, general shortages in the marketplace of certain raw materials or key components may adversely impact our business.
−Removed: In the past, we have
−Removed: 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 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.
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We may also be adversely affected by an increase in freight surcharges due to rising fuel costs, oil costs and added security.
−Removed: The risks mentioned above, including our sole source or limited source suppliers' ability to produce products and adequately access capital, and our ability to arrange effective shipping arrangements, may further increase due to the ongoing COVID-19 pandemic.
+Added: The risks mentioned above, including our sole source or limited source suppliers' ability to produce products and adequately access capital, and our ability to arrange effective shipping arrangements, have increased and may further increase due to the ongoing COVID-19 pandemic.
In our fabrication process, we consume a number of precious metals and other commodities, which are subject to high price volatility and the potential impacts of increased inflation.
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Future environmental regulations could restrict supply or increase the cost of certain of those materials.
+Added: We operate in industries that are subject to significant fluctuation in supply and demand and ultimately pricing, which affects our revenue and profitability.
+Added: The industries we serve are in different stages of adoption and are characterized by constant and rapid technological change, rapid product obsolescence and price erosion, evolving standards and fluctuations in product supply and demand.
+Added: The semiconductor industry is characterized by rapid technological change, high capital expenditures, short product life cycles and continuous advancements in process technologies and manufacturing facilities.
+Added: As the markets for our products mature, additional fluctuations may result from variability and consolidations within the industry’s customer base.
+Added: These fluctuations have been characterized by lower product demand, production overcapacity, higher inventory levels and aggressive pricing actions by our competitors.
+Added: These fluctuations have also been characterized by higher demand for key components and equipment used in, or in the manufacture of, our products resulting in longer lead times, supply delays and production disruptions.
+Added: We have experienced these conditions in our business and may experience such conditions in the future, which could have a material negative impact on our business, results of operations or financial condition.
+Added: In addition, as we diversify our product offerings and as pricing differences in the average selling prices among our product lines widen, a change in the mix of sales among our product lines may increase volatility in our revenue and gross margin from period to period.
The markets in which we operate are highly competitive and have evolving technical requirements.
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The risks of inventory obsolescence are especially relevant to technological products.
−Removed: The distributors’ internal target inventory levels vary depending on market cycles
−Removed: and a number of factors within each distributor over which we have very little, if any, control.
+Added: The distributors’ internal target inventory levels vary depending on market cycles and a number of factors within each distributor over which we have very little, if any, control.
Distributors also have the ability to shift business to different manufacturers within their product portfolio based on a number of factors, including new product availability and performance.
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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.
−Removed: 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.
+Added: As inventory levels and
+Added: 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.
Additionally, our distributors have in the past and may in the future choose to drop our product lines from their portfolio to avoid losing access to our competitors’ products, resulting in a disruption in the project pipeline and lower than targeted sales for our products.
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In addition, the U.S.
−Removed: Treasury Department recently proposed the adoption of a global minimum corporate tax rate of at least 15%, which has been largely supported by the international community.
−Removed: Such proposals, if enacted, would result in a higher U.S.
+Added: Treasury Department supports the adoption of a global minimum corporate tax rate of at least 15%, which is under consideration in the U.S.
+Added: Congress following approval by the leaders of the G-20 in October 2021.
+Added: The plan, if enacted by the U.S.
+Added: and other nations, could result in a higher U.S.
corporate income tax rate than is currently in effect.
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We are subject to a number of risks associated with the sale of our former 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.
+Added: On May 13, 2019, we closed the sale of our former Lighting Products business unit to IDEAL Industries, Inc.
We are subject to a number of risks associated with this transaction, including risks associated with:
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• changes in the valuation of our deferred tax assets and liabilities;
−Removed: • the potential restructuring of our existing legal entities, including our Luxembourg holding company;
+Added: • the ongoing restructuring of our existing legal entities, including our current plan to restructure our Luxembourg holding company;
• adjustments to estimated taxes upon finalization of various tax returns;
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Any of these restrictions could harm our business and results of operations by increasing our expenses or requiring us to alter our manufacturing processes.
+Added: New climate change laws and regulations could require us to change our manufacturing processes or procure substitute raw materials that may cost more or be more difficult to procure.
+Added: Various jurisdictions in which we do business have implemented, or in the future could implement or amend, restrictions on emissions of carbon dioxide or other greenhouse gases, limitations or restrictions on water use, regulations on energy management and waste management, and other climate change-based rules and regulations, which may increase our expenses and adversely affect our operating results.
+Added: We expect increased worldwide regulatory activity relating to climate change in the future.
+Added: Future compliance with these laws and regulations may adversely affect our business and results of operations.
Our results could vary as a result of the methods, estimates and judgments that we use in applying our accounting policies, including changes in the accounting standards to be applied.
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Catastrophic events and disaster recovery may disrupt business continuity.
−Removed: A disruption or failure of our systems or operations in the event of a natural disaster, health pandemic, such as an influenza outbreak within our workforce, or man-made catastrophic event could cause delays in completing sales, continuing production or performing other critical functions of our business, particularly if a catastrophic event occurred at our primary manufacturing locations or our subcontractors' locations.
+Added: A disruption or failure of our systems or operations in the event of a natural disaster or severe weather event, including, but not limited to, earthquakes, wildfires, droughts, hurricanes or tsunamis, health pandemic, such as an influenza outbreak within our workforce, or man-made catastrophic event could cause delays in completing sales, continuing production or performing other critical functions of our business, particularly if a catastrophic event occurred at our primary manufacturing locations or our subcontractors' locations.
Any of these events could severely affect our ability to conduct normal business operations and, as a result, our operating results could be adversely affected.
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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 $62.46 to a high of $128.28 during the twelve months ended September 26, 2021.
+Added: For example, the closing price per share of our common stock on the Nasdaq Global Select Market (until October 1, 2021) and the NYSE (on and after October 4, 2021) ranged from a low of $78.36 to a high of $141.87 during the twelve months ended December 26, 2021.
If our future operating results or margins are below the expectations of stock market analysts or our investors, our stock price will likely decline.
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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 26, 2021, our indebtedness consisted of $424.8 million aggregate principal amount of the 2023 Notes and $575.0 million aggregate principal amount of the 2026 Notes (collectively with the 2023 Notes, the Notes) and potential borrowings from our revolving line of credit.
+Added: As of December 26, 2021, our indebtedness consisted of $575.0 million aggregate principal amount of the 2026 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 2026 Notes is dependent upon our ability to manage our business operations and generate sufficient cash flows to service such debt.
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incur additional indebtedness, dispose of assets, create liens on assets, make acquisitions or engage in mergers or consolidations, and engage in certain transactions with our subsidiaries and affiliates.
−Removed: The Indentures governing the Notes require us to repurchase the Notes upon certain fundamental changes relating to our common stock, and also prohibit our consolidation, merger, or sale of all or substantially all of our assets except with or to a successor entity assuming our obligations under the Indentures.
−Removed: The restrictions imposed by our line of credit and by the Indentures governing our Notes could limit our ability to plan for or react to changing business conditions, or could otherwise restrict our business activities and plans.
−Removed: Our ability to comply with our loan covenants and the provisions of the Indentures governing our Notes may also be affected by events beyond our control and if any of these restrictions or terms is breached, it could lead to an event of default under our line of credit or the Notes.
+Added: The Indenture governing the 2026 Notes requires us to repurchase the 2026 Notes upon certain fundamental changes relating to our common stock, and also prohibits our consolidation, merger, or sale of all or substantially all of our assets except with or to a successor entity assuming our obligations under the Indenture.
+Added: The restrictions imposed by our line of credit and by the Indenture governing the 2026 Notes could limit our ability to plan for or react to changing business conditions, or could otherwise restrict our business activities and plans.
+Added: Our ability to comply with our loan covenants and the provisions of the Indenture governing the 2026 Notes may also be affected by events beyond our control and if any of these restrictions or terms is breached, it could lead to an event of default under our line of credit or the 2026 Notes.
A default, if not cured or waived, may permit acceleration of our indebtedness.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.