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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of Each Class |
Trading Symbol |
Name of Each Exchange on Which Registered | ||
Common shares, $0.10 par value per share |
ATC |
The New York Stock Exchange |
Large accelerated filer |
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Accelerated filer |
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Emerging growth company |
U.S. GAAP ☐ |
Other ☐ | |||||||
by the International Accounting Standards Board |
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1 |
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3 |
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5 |
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5 |
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5 |
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5 |
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42 |
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54 |
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54 |
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66 |
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81 |
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85 |
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86 |
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86 |
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99 |
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100 |
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101 |
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101 |
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101 |
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101 |
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101 |
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101 |
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101 |
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102 |
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102 |
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102 |
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102 |
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102 |
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103 |
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103 |
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103 |
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103 |
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105 |
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F-1 |
• | the uncertainty of the magnitude, duration, geographic reach, impact on the global economy of the COVID-19 pandemic, as well as the current and potential travel restrictions, stay-at-home |
• | uncertainty, downturns, and changes in our target markets; |
• | foreign currency exchange rate fluctuations; |
• | reduced market acceptance and inability to keep pace with evolving technology and trends; |
• | loss of customers; |
• | increases in costs or reductions in the supplies of raw materials that may materially adversely affect our business, financial condition, and results of operations; |
• | our ability to provide products and services in light of changing environmental, health and safety, product liability, financial, and other legislation and regulation; |
• | our failure to compete successfully in product development; |
• | our ability to successfully execute our growth initiatives, business strategies, and operating plans; |
• | whether the secular trends we expect to drive growth in our business materialize to the degree we expect them to, or at all; |
• | material costs relating to environmental and health and safety requirements or liabilities; |
• | underfunded defined benefit pension plans; |
• | risk that the insurance we maintain may not fully cover all potential exposures; |
• | failure to comply with the anti-corruption laws of the United States and various international jurisdictions; |
• | tariffs, border adjustment taxes, or other adverse trade restrictions and impacts on our customers’ value chains; |
• | political, economic, and legal uncertainties in China, the Chinese government’s control of currency conversion and expatriation of funds, and the Chinese government’s policy on foreign investment in China; |
• | regulations around the production and use of chemical substances that affect our products; |
• | the United Kingdom’s withdrawal from the European Union; |
• | weak intellectual property rights in jurisdictions outside the United States; |
• | intellectual property infringement and product liability claims; |
• | our substantial indebtedness; |
• | our ability to obtain additional capital on commercially reasonable terms may be limited; |
• | risks related to our derivative instruments; |
• | our ability to attract, motivate, and retain senior management and qualified employees; |
• | increased risks to our global operations including, but not limited to, political instability, acts of terrorism, taxation, and unexpected regulatory and economic sanctions changes, including, for example, the recent Russia/Ukraine crisis and resulting sanctions on Russia and its economy, among other things; |
• | natural disasters that may materially adversely affect our business, financial condition, and results of operations; |
• | the inherently hazardous nature of chemical manufacturing that could result in accidents that disrupt our operations and expose us to losses or liabilities; |
• | damage to our brand reputation; |
• | Carlyle’s ability to control our common shares; |
• | our pending acquisition (the “MKS Acquisition”) by MKS Instruments, Inc. (“MKS”); |
• | any statements of belief and any statements of assumptions underlying any of the foregoing; |
• | other factors disclosed in this report; and |
• | other factors beyond our control. |
• | recessionary periods in their markets, including the impact of COVID-19 on their budgets and financial condition; |
• | their inability to adapt to rapidly changing technology and evolving industry standards, which may contribute to short product lifecycles or shifts in their strategies; |
• | their inability to develop, market, or gain commercial acceptance of their products, some of which are new and untested; |
• | their products becoming commoditized or obsolete; |
• | loss of business or a reduction in pricing power experienced by our customers and their direct and indirect customers; |
• | the emergence of new business models or more popular products and shifting patterns of demand; |
• | a highly competitive consumer products industry, which is often subject to shorter product lifecycles, shifting end-user preferences, and higher revenue volatility; and |
• | the loss of manufacturing capacity due to tightening environmental legislation and its enforcement. |
• | business and macroeconomic changes, including downturns in the electronics (“EL”) and general metal finishing (“GMF”) plating markets and the overall global economy; |
• | geopolitical changes and instability, including trade disputes and military conflicts, such as the Russia/Ukraine crisis and the resulting sanctions imposed on Russia and its economy; |
• | seasonality in both our segments, which generally experience their strongest revenue in the second half of each fiscal year, mostly driven by consumption trends during the holiday season, and their lowest revenue in the first quarter of each fiscal year, mostly driven by the slowdown in production in China as a result of the Chinese New Year, which can result in a sequential decline in our revenues in the first quarter of a fiscal year relative to the fourth quarter of the prior fiscal year; |
• | changes in consumer confidence caused by many factors, including changes in interest rates, credit markets, expectations for inflation, unemployment levels, and energy or other commodity prices; |
• | fluctuations in demand for our customers’ and their customers’ products; |
• | our ability to forecast our customers’ demand for our products accurately; |
• | our ability to anticipate secular trends that affect demand for our products and the degree to which those trends materialize; |
• | our customers’ ability to manage the inventory that they hold and to forecast accurately their demand for our products; |
• | our ability to achieve cost savings and improve yields and margins on our new and existing products; and |
• | our ability to utilize our capacity efficiently or acquire additional capacity in response to customer demand. |
• | political instability; |
• | acts of terrorism and military actions in response to such acts; |
• | wars or military conflicts, such as the Russia/Ukraine crisis; |
• | unexpected changes in regulatory environments and government interference in the economy; |
• | changes to economic sanctions laws and regulations, including regulatory exemptions that currently authorize certain of our limited dealings involving sanctioned countries or the recent sanctions imposed by the United States and European nations against Russia as a result of the Russia/Ukraine crisis; |
• | increasingly stringent laws related to privacy and consumer and data protection, including the E.U. General Data Protection Regulation and U.S. State privacy and security breach notification laws; |
• | international trade disputes that could result in tariffs or other protectionist measures; |
• | varying tax regimes, including with respect to the imposition of confiscatory taxes, other unexpected taxes, or withholding taxes on remittances and other payments by our partnerships or subsidiaries; |
• | differing labor regulations, particularly in Germany and China where we have a significant number of employees; |
• | rising wages; |
• | foreign exchange controls and restrictions on repatriation of funds; |
• | fluctuations in foreign currency exchange rates; |
• | inability to collect payments, or seek recourse under, or comply with ambiguous or vague commercial or other laws; |
• | difficulty in obtaining, or denial of, export licenses or delay or interruption of the transportation of our products; |
• | differing protections for intellectual property rights; |
• | increased risk of cybersecurity incidents and cyberattacks from third-party and state actors and privacy violations; |
• | the effects of global climate change; |
• | difficulties in attracting and retaining qualified management and employees, or rationalizing our workforce; |
• | increased credit risk and different financial conditions of customers and distributors may necessitate longer payment cycles of accounts receivable or result in increased bad debt write-offs (including due to bankruptcy) or additions to reserves; |
• | differing business practices, which may require us to enter into agreements that include non-standard terms; and |
• | difficulties in penetrating new markets due to entrenched competitors, lack of recognition of our brand, and lack of local acceptance of our products and services. |
• | storage tank leaks and ruptures; |
• | explosions and fires; |
• | inclement weather and natural disasters; |
• | terrorist attacks; |
• | cybersecurity breaches; |
• | mechanical failure; |
• | unscheduled downtime; |
• | labor difficulties; |
• | transportation interruptions; and |
• | chemical spills and other discharges or releases of toxic or hazardous substances or gases. |
• | limit our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions, general corporate purposes, or other purposes; |
• | require us to devote a substantial portion of our annual cash flow to the payment of interest on our indebtedness; |
• | expose us to the risk of increased interest rates as, over the term of our debt, the interest cost on a significant portion of our indebtedness is subject to changes in interest rates; |
• | hinder our ability to adjust rapidly to changing market conditions; |
• | limit our ability to secure adequate bank financing in the future with reasonable terms and conditions or at all; and |
• | increase our vulnerability to and limit our flexibility in planning for, or reacting to, a potential downturn in general economic conditions or in one or more of our businesses. |
• | reduce funds available to us for purposes such as working capital, capital expenditures, research and development, strategic acquisitions, and other general corporate purposes; |
• | restrict our ability to introduce new products or exploit business opportunities; |
• | increase our vulnerability to economic downturns and competitive pressures in the markets in which we operate; and |
• | place us at a competitive disadvantage. |
• | as a result of the volatility in commodity prices, we may encounter difficulty in achieving sustained market acceptance of past or future price increases, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows; |
• | under difficult market conditions, there can be no assurance that borrowings under our revolving credit facility would be available or sufficient, and in such a case, we may not be able to successfully obtain additional financing on reasonable terms, or at all; |
• | in order to respond to market conditions, we may need to seek waivers from various provisions in the credit agreement governing our Senior Secured Credit Facilities, and in such case, there can be no assurance that we can obtain such waivers at a reasonable cost, if at all; |
• | market conditions could cause the counterparties to the derivative financial instruments we may use to hedge our exposure to interest rate, commodity, or currency fluctuations to experience financial difficulties and, as a result, our efforts to hedge these exposures could prove unsuccessful and, furthermore, our ability to engage in additional hedging activities may decrease or become more costly; and |
• | market conditions could result in our key customers experiencing financial difficulties and/or electing to limit spending, which in turn could result in decreased sales and earnings for us. |
• | our operating and financial performance and prospects; |
• | our quarterly or annual earnings or those of other companies in our industries; |
• | the public’s reaction to our press releases, our other public announcements, and our filings with the Securities and Exchange Commission (the “SEC”); |
• | changes in, or failure to meet, earnings estimates or recommendations by research analysts who track our common shares or the stock of other companies in our industries; |
• | the failure of research analysts to cover our common shares; |
• | strategic actions by us, our customers, or our competitors, such as acquisitions or restructurings; |
• | increased competition; |
• | new laws or regulations or new interpretations of existing laws or regulations applicable to us; |
• | changes in accounting standards, policies, guidance, interpretations, or principles; |
• | material litigation or government investigations; |
• | default on our indebtedness; |
• | changes in general conditions in the U.S. and global economies or financial markets, including those resulting from war, incidents of terrorism, natural disasters, severe weather, or responses to such events; |
• | reactions to changes in the markets for the raw materials or key inputs that impact our production or our industries generally; |
• | changes in key personnel; |
• | sales of common shares by us, Carlyle, or members of our management team; |
• | termination or expiration of lock-up agreements with our management team and principal shareholders; |
• | the granting or exercise of employee stock options; |
• | volume of trading in our common shares; and |
• | the realization of any risks described under this “ Risk Factors |
• | the requirement that a majority of the Board consist of independent directors; |
• | the requirement that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; |
• | the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and |
• | the requirement for an annual performance evaluation of the nominating and corporate governance committee and compensation committee. |
• | we are subject to certain restrictions on the conduct of our business prior to completing the MKS Acquisition, which may adversely affect our ability to execute certain of our business strategies going forward if the MKS Acquisition is not completed; |
• | we have incurred and will continue to incur significant costs and fees associated with the proposed MKS Acquisition, such as legal, accounting, financial advisor, and printing fees, regardless of whether the MKS Acquisition is completed; |
• | we may experience negative reactions from the financial markets, including negative impacts on our share price; |
• | we may experience negative reactions from our customers, regulators, and employees; |
• | matters relating to the MKS Acquisition (including integration planning) will require substantial commitments of time and resources by our management, which would otherwise have been devoted to day-to-day |
• | as a result of certain limited circumstances as described in further detail in the following risk factor (such as if our board were to withdraw its recommendation of the MKS Acquisition, if our board were to recommend a superior competing offer within 18 weeks after the MKS Acquisition lapsing or being withdrawn, or if we breach certain material obligations in relation to the implementation of the MKS Acquisition and we fail to remedy such breach following notice from MKS), we may be required to pay MKS a termination fee of approximately $154 million or reimburse MKS for certain fees and expenses. |