Item 2.02 Results of Operations and Financial Condition.
On
On
The information, including, without limitation, all forward-looking statements,
contained in the News Release and related slide presentation on the Company's
website (the "Slide Presentation") or provided in the conference call and
related question and answer session speaks only as of
The News Release and the Slide Presentation contain, and representatives of the
Company may make during the conference call and the related question and answer
session, statements that the Company believes to be "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. All
statements other than statements of historical fact included in the News Release
and the Slide Presentation or made during the conference call and related
question and answer session, including, without limitation, statements regarding
the Company's future financial position, business strategy, targets, projected
sales, costs, earnings, capital expenditures, debt levels and cash flows, plans
and objectives of management for future operations, and compliance with credit
agreement covenants are forward-looking statements. In addition, forward-looking
statements generally can be identified by the use of forward-looking terminology
such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe,"
"should," "project" or "plan," or the negative thereof or variations thereon or
similar terminology. The Company cannot provide any assurance that such
expectations will prove to have been correct. Important factors that could cause
actual results to differ materially from the Company's expectations include,
without limitation, those set forth under the caption "Risk Factors" below.
Additional information concerning factors that could cause actual results to
differ materially from those in the forward-looking statements is contained from
time to time in the Company's filings with the
In this Current Report on Form 8-K, "we," "us" or "our" refers to
RISK FACTORS Operational Risks
The COVID-19 pandemic could further materially adversely affect our business, workforce, supply chain, results of operations, financial condition and/or cash flows.
In
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negatively impacted, and is likely to continue to negatively impact, our business in numerous ways, including but not limited to those outlined below:
• The COVID-19 pandemic has reduced demand for access equipment, refuse collection vehicles and concrete mixers and may reduce demand for other products. Furthermore, as a result of the pandemic, remote working become more prevalent. Companies could determine that it will be acceptable for employees to work from their homes on a long-term basis, which could reduce demand for future nonresidential construction, which in turn could further reduce demand for access equipment. • Travel restrictions related to the COVID-19 pandemic have prevented some customers in our Fire & Emergency segment from inspecting and accepting vehicles on a timely basis. • Our customers may experience financial hardships during the COVID-19 pandemic that could result in lower demand for our products and/or default on financial and other commitments to us. • The COVID-19 pandemic adversely affects our workforce and business as a result of impacts associated with required, preventive and precautionary measures that we, other businesses, our communities and governments are taking. These impacts include our requiring certain employees to work from home, limiting the number of employees attending meetings, reducing the number of people in our sites at any one time, reducing employee travel and adopting other employee safety measures. These measures have also impacted, and in the future may impact, our ability to meet production demands or requests depending on employee attendance or ability to continue to work. Restrictions on, as well as the health of, our workforce could limit our ability to support our business, as it did in our Defense and Fire & Emergency segments during the fourth quarter of fiscal 2020 as workforce absenteeism rose at certain facilities located in communities experiencing higher rates of COVID-19. • We operate a global supply chain that has been, and could in the future continue to be, disrupted by the COVID-19 pandemic, resulting in delays or inefficiencies in production. Some of our suppliers have limited, and may in the future limit, their production or shut down due to shelter-in-place requirements, sanitizing facilities and workforce availability issues. While we have generally been successful in mitigating these supply chain challenges, supplier parts shortages lowered our production rates in the Fire & Emergency segment during the third quarter of fiscal 2020, and it is possible that a part or component shortage could limit our production in the future. • Government or regulatory responses to the COVID-19 pandemic have negatively impacted, and are likely to continue to negatively impact, our business. Mandatory lockdowns or other restrictions on operations may disrupt our ability to manufacture or distribute our products in some markets. Governments may continue to impose travel restrictions and close borders, impose prolonged quarantines and further restrict business activity, which could impact our ability to support our operations and customers and the ability of our employees to get to their workplaces to produce products and services, limit the ability of our suppliers to provide us with products, or hamper our products from moving through the supply chain. • The COVID-19 pandemic has led to disruption and volatility in the global capital markets, which depending on future developments could impact our capital resources and liquidity in the future. Although we believe our balance sheet remains strong, we have been focused on preserving capital resources given the uncertain duration of the pandemic, and in an attempt to maintain strong liquidity, the Company temporarily paused its share repurchase program and implemented other cost reduction actions, there is no certainty that measures we have taken will be effective to enable us to maintain adequate resources and liquidity.
The impacts that we list above and other impacts of the COVID-19 pandemic are likely to also have the effect of heightening many of the other risks that we describe in this Current Report on Form 8-K. The ultimate impact of the COVID-19 pandemic, including the extent of its impact on our business, results of operations, financial condition and/or cash flow, is dependent, among other things, on the duration and severity of the pandemic, the effect of
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actions taken by government authorities and other third parties in response to the pandemic and the impact of the pandemic on global economies, each of which is uncertain, rapidly changing and difficult to predict. We cannot at this time predict the overall impact of the COVID-19 pandemic on us, but it could continue to have a material adverse impact on our business, workforce, supply chain, results of operations, financial condition and/or cash flows.
We face significant competition in the markets we serve. If we are unable to continue to enhance existing products and develop new products that respond to customer needs and preferences, we may experience a decrease in demand for our products and our business could suffer.
The markets in which we operate are highly competitive. We compete worldwide with a number of other manufacturers that produce and sell similar products. Our products primarily compete on the basis of brand awareness, product innovation, performance, quality, reliability, availability, price, service and support, ability to meet customer specifications and the extent to which a company offers single-source customer solutions. Certain of our competitors have greater financial, marketing, manufacturing, distribution and governmental affairs resources than we do, which may put us at a competitive disadvantage. If competition in our industry intensifies or if our current competitors lower their prices for competing products, we may lose sales or be required to lower the prices we charge for our products. We cannot provide any assurance that our products will continue to compete effectively with the products of competitors or that we will be able to retain our customer base or improve or maintain our profit margins on sales to our customers.
One of our growth strategies is emphasizing our new product development as we
seek to expand sales and margins by leading our core markets in the introduction
of new or improved products and technologies. Our ability to match product
improvements and new product offerings to diverse global customers' anticipated
needs for different types of products and various product features and
functions, at acceptable prices, is critical to our success. We may not be able
to compete as effectively with our competitors, and ultimately satisfy the needs
and preferences of our customers, unless we can continue to improve existing
products and develop new innovative products in the global markets in which we
compete. While we spent
Our dependency on contracts with
We are dependent on
• Our business is susceptible to changes in theU.S. defense budget, which changes may reduce revenues that we expect from our defense business, especially in light of federal budget pressures, lower levels ofU.S. ground troops deployed in foreign conflicts, sequestration and the level of defense funding that will be allocated to theDoD's tactical wheeled vehicle strategy generally. • TheU.S. government may not budget for or appropriate funding that we expect for ourU.S. government contracts, which may prevent us from realizing revenues under current contracts or receiving additional orders that we anticipate we will receive. TheDoD could also seek to reprogram certain funds originally planned for the purchase of vehicles we manufacture under the current defense budget allocations. TheU.S. 3
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Army has identified its top modernization and readiness priorities, which could result in the customer re-programming funds away from the Company's Joint Light Tactical Vehicle (JLTV) program to support these initiatives.
• The funding of
congressional budget authorization and appropriation process. In years when
the
its fiscal year including currently, government operations are typically
funded pursuant to a "continuing resolution," which allows federal . . .
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