Content analysis
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H.S. junior Avg
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New words:
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Removed:
accelerated, accrual, acoustical, approach, attainment, choose, classification, Codification, combined, comparative, conform, constant, copper, correction, deficiency, detected, disallowed, eligible, error, escalation, estate, exchanged, expired, favorably, filtration, force, forgo, gain, hand, implicit, inception, incident, incorporate, leaseback, leased, Libertyville, machinery, majeure, measured, meter, misstatement, motorcycle, move, nonfinancial, office, opening, overstated, overstatement, par, paragraph, peer, policy, practical, precision, premium, prevented, projected, reassessment, reclassification, recording, recoverability, recovered, redemption, relationship, remain, remediate, renamed, renew, Renewal, rent, rental, repatriation, represented, residual, retained, retrospective, revised, revision, rolling, ROU, simplify, smart, sovereign, stated, stocking, testing, thermal, transportation, type, updated, utility
Financial report summary
?Risks
- We are exploring and evaluating strategic alternatives and there can be no assurance that we will be successful in identifying, or completing any strategic alternative or that any such strategic alternative will yield additional value for shareholders.
- We are affected by developments in the industries in which our customers operate.
- Some of our business segments are cyclical. A downturn or weakness in overall economic activity can have a material negative impact on us.
- Volatility in the prices of raw materials and energy prices and our ability to pass along increased costs to our customers could adversely affect our results of operations.
- Divestitures and discontinued operations could negatively impact our business, and contingent liabilities from businesses that we sell could adversely affect our financial results.
- We compete with numerous other manufacturers in each of our segments and competition from these providers may affect the profitability of our business.
- We face risks related to sales through distributors and other third parties.
- We may not be able to maintain our engineering, technological and manufacturing expertise.
- We may be unable to realize the expected benefits of capital expenditures, which could adversely affect our profitability and operations.
- We may be unable to realize the expected benefits of our restructuring actions, which could adversely affect our profitability and operations.
- We may encounter difficulties in completing or integrating acquisitions, which could adversely affect our operating results.
- Our goodwill and other intangible assets represent a substantial amount of our total assets. A decline in future operating performance at one or more of our reporting units could result in the further impairment of goodwill or other intangible assets, which could have a material adverse effect on our financial condition and results of operations.
- If we fail to develop new and innovative products or if customers in our markets do not accept them, our results could be negatively affected.
- The potential impact of failing to deliver products on time could increase the cost of the products.
- Increasing costs of doing business in many countries in which we operate may adversely affect our business and financial results.
- Our international scope requires us to obtain financing in various jurisdictions.
- We have operations in many countries and such operations may be subject to a number of risks specific to these countries.
- Our international sales and operations are subject to applicable laws relating to trade, export controls and foreign corrupt practices, the violation of which could adversely affect our operations.
- We are subject to risks of currency fluctuations and related hedging operations, and the devaluation of the currencies of countries in which we conduct our manufacturing operations, particularly the Euro, that may negatively affect the profitability of our business.
- We depend on our key executive officers, managers and skilled personnel and may have difficulty retaining and recruiting qualified employees and managing the cost of labor.
- Many of our customers do not commit to long-term production schedules, which makes it difficult for us to schedule production accurately and achieve maximum efficiency of our manufacturing capacity.
- We may incur additional expenses and delays due to technical problems or other interruptions at our manufacturing facilities or those of our suppliers.
- The operations of our manufacturing facilities may be disrupted by union activities and other labor-related problems.
- Any disruption in our information systems could disrupt our operations and would be adverse to our business and financial operations.
- Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.
- Natural disasters, epidemics and other events outside our control, and our inability to successfully mitigate the effects of such events, may harm our business.
- Political and economic developments could adversely affect our business.
- Sales of our products may result in exposure to product liability, intellectual property infringement and other claims.
- If our manufacturing processes and products do not comply with applicable statutory and regulatory requirements, or if we manufacture products containing design or manufacturing defects, demand for our products may decline and we may be subject to liability claims.
- Compliance or the failure to comply with regulations and governmental policies could cause us to incur significant expense.
- If our products are subject to warranty claims, our business reputation may be damaged and we may incur significant costs.
- We are or may be required to obtain and maintain quality or product certifications for certain markets.
- Our income tax returns are subject to current tax legislation and review by taxing authorities, and the final determination of our tax liability with respect to changes in tax legislation, tax audits and any related litigation could adversely affect our financial results.
- Failure of our customers to pay the amounts owed to us in a timely manner may adversely affect our financial condition, liquidity, and operating results.
- Our failure to comply with environmental laws could adversely affect our business and financial condition.
- Environmental liabilities that may arise in the future could be material to us.
- Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect our business, investments and results of operations.
- Acquisitions, expansions or infrastructure investments may require us to increase our level of indebtedness or issue additional equity.
- We have a substantial amount of indebtedness, which may limit our operating flexibility and could adversely affect our results of operations, liquidity and financial condition.
- Our Senior Secured Credit Facilities contain restrictive covenants that may impair our ability to conduct business.
- Upon the occurrence of an event of default under our Senior Secured Credit Facilities, the lenders could elect to accelerate payments due and terminate all commitments to extend further credit. Consequently, we may not have sufficient assets to repay the Senior Secured Credit Facilities, as well as other secured and unsecured indebtedness.
- An adverse change in the interest rates for our borrowings could adversely affect our financial condition.
- The market price of our common stock may decline.
- Our business and/or reputation could be negatively affected as a result of actions of activist shareholders, and such activism could impact the trading value of our securities.
- Two of our largest shareholders have significant influence over our management and affairs and could exercise this influence against other shareholders’ best interests.
- A significant number of additional shares of our common stock may be issued upon the exercise or conversion of existing securities, which issuances would substantially dilute existing shareholders and may depress the market price of our common stock.
- Anti-takeover provisions contained in our certificate of incorporation and bylaws, our Shareholder Rights Agreement, the increased conversion rate triggered by a “fundamental change”, as well as provisions of Delaware law, could impair a takeover attempt.
- Our only significant asset is our indirect ownership of Jason Incorporated and such ownership may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our common stock or preferred stock or satisfy our other financial obligations.
- We are not obligated to pay dividends on the Series A Preferred Stock if prohibited by law; the terms of our financing agreements may limit our ability to pay such dividends; and we will not be able to pay cash dividends if we have insufficient cash to do so.
- The Series A Preferred Stock does not have an established trading market, which may negatively affect its market value and the ability to transfer or sell such shares.
- The conversion rate of the Series A Preferred Stock may not be adjusted for all dilutive events.
- Series A Preferred Stock holders may be adversely affected if a “fundamental change” occurs
- We have reserved a number of shares of our common stock for issuance upon the conversion of the Series A Preferred Stock equal to the aggregate conversion rate, which, under limited circumstances, is less than the maximum number of shares of common stock that we might be required to issue upon such conversion.
- We may issue additional series of preferred stock that rank equally to the Series A Preferred Stock as to dividend payments and liquidation preference and these future issuances may adversely affect the market price for our common stock.
- Holders of our Series A Preferred Stock have no voting rights except under limited circumstances.
- Holders of our Series A Preferred Stock may be subject to tax if we make or fail to make certain adjustments to the conversion rate of the Series A Preferred Stock even though the holders of Series A Preferred Stock do not receive a corresponding cash distribution.
Management Discussion
- For the year ended December 31, 2019, cash flows used in operating activities were $20.8 million compared to $29.8 million of cash flows provided by operating activities for the year ended December 31, 2018, a decrease of $50.6 million. The decrease was primarily driven by lower operating profit across all segments, which includes the former Metalex business, principally as a result of lower sales volume for the year ended December 31, 2019 as compared to the year ended December 31, 2018. In addition, the decrease resulted from acquisition and divestiture related transaction costs of $4.5 million, unfavorable changes in operating working capital of $7.2 million and a lower incentive compensation accrual as a result of lower projected attainment percentages. The decrease was partially offset by $0.7 million of cash related to dividends received from our joint venture during the year ended December 31, 2019 and a lower incentive compensation accrual as a result of lower projected attainment percentages. Cash flows (used in) provided by operating activities were also impacted by the sale of the North American fiber solutions business, which provided twelve months of cash flows from operating activities in 2018 compared to eight months of cash flows from operating activities in 2019.