What changed in HEXCEL CORP /DE/'s 2023 10-K compared to 2022?

Across the narrative sections we track, HEXCEL CORP /DE/ (HXL) added 174 paragraphs, removed 170, and edited 146 between the 2022 and 2023 10-K filings. The biggest movers are Item 1A. Risk Factors (+97/−91), Item 1. Business (+69/−70), Item 2. Properties (+3/−4).

Did HEXCEL CORP /DE/ add new Risk Factors in the 2023 10-K?

Yes — Item 1A Risk Factors shows 97 new/edited paragraphs and 91 removed paragraphs versus the 2022 10-K.

What changed in HEXCEL CORP /DE/'s MD&A (Item 7) in 2023?

Item 7 Management's Discussion & Analysis shows 1 new/edited paragraphs and 1 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Where does this HXL 10-K diff come from?

The source filings are HEXCEL CORP /DE/'s official 2022 and 2023 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

's 10-K — 2022 vs 2023

Paragraph-level year-over-year comparison of HEXCEL CORP /DE/'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+174 added−170 removedSource: 10-K (2024-02-07) vs 10-K (2023-02-08)

Top changes in HEXCEL CORP /DE/'s 2023 10-K

174 paragraphs added · 170 removed · 146 edited across 6 sections

Item 1A. Risk Factors+97 / −91 · 80 edited
Item 1. Business+69 / −70 · 59 edited
Item 2. Properties+3 / −4 · 3 edited
Item 5. Market for Registrant's Common Equity+3 / −3 · 2 edited
Item 7. Management's Discussion & Analysis+1 / −1 · 1 edited

Item 1. Business

Business — how the company describes what it does

59 edited+10 added−11 removed88 unchanged

2022 filing

2023 filing

Biggest changeInclusion of information in this Annual Report on Form 10-K is not an indication that the subject or information is material to our business or operating results Such forward-looking statements include, but are not limited to: (a) the estimates and expectations based on aircraft production rates provided by Airbus, Boeing and others; (b) the revenues we may generate from an aircraft model or program; (c) the impact of the push-out in deliveries of the Airbus and Boeing backlog and the impact of delays in the startup or ramp-up of new aircraft programs or the final Hexcel composite material content once the design and material selection have been completed; (d) expectations with regard to the impact of regulatory activity related to, or the build rate of, the Boeing 737 MAX or Boeing 787 and the related impact on our revenues; (e) expectations with regard to raw material cost and availability; (f) expectations of composite content on new commercial aircraft programs and our share of those requirements; (g) expectations regarding revenues from space and defense applications, including whether certain programs might be curtailed or discontinued; (h) expectations regarding sales for wind energy, recreation, automotive and other industrial applications; (i) expectations regarding working capital trends and expenditures and inventory levels; (j) expectations as to the level of capital expenditures and timing of completion of capacity expansions and qualification of new products; (k) expectations regarding our ability to improve or maintain margins; (l) expectations regarding our ability to attract, motivate, and retain the workforce necessary to execute our business strategy; (m) our projections regarding our tax rate; (n) expectations with regard to the impact of macroeconomic factors, including the ongoing effects the COVID-19 pandemic and the conflict between Russia and Ukraine and inflationary cost pressures and related decreases in discretionary spending, among other factors, on worldwide air travel and aircraft programs, as well as on our customers and suppliers and, in turn, on our operations and financial results; (o) expectations regarding our strategic initiatives and other goals, including, but not limited to, our sustainability goals; (p) expectations regarding the sale of certain of our assets; (q) expectations with regard to cybersecurity measures taken to protect confidential and proprietary information; (r) expectations regarding the outcome of legal matters or the impact of changes in laws or regulations or government policies; and (s) the anticipated impact of the above factors and various market risks on our expectations of financial results for 2023 and beyond.

These reinforcements are used in the production of prepregs and other matrix materials for aerospace and select industrial markets including wind energy blades, automotive components, oil exploration and production equipment, boats, surfboards, skis and other sporting goods equipment. Prepregs: HexPly® prepregs are used in manufacturing composite laminates and monolithic structures.

These reinforcements are used in the production of prepregs and other matrix materials for aerospace and select industrial markets including automotive components, wind energy blades, oil exploration and production equipment, boats, surfboards, skis and other sporting goods equipment. Prepregs: HexPly® prepregs are used in manufacturing composite laminates and monolithic structures.

We are subject to various U.S. and international federal, state, and local environmental and health and safety laws and regulations.

We are subject to various International and U.S. federal, state, and local environmental and health and safety laws and regulations.

Composite Materials The Composite Materials segment manufactures and markets carbon fibers, fabrics, and specialty reinforcements, prepregs and other fiber-reinforced matrix materials, structural adhesives, honeycomb, molding compounds, tooling materials, polyurethane systems and laminates that are incorporated into many applications, including commercial and military aircraft, transportation (including automotive, marine and rail), wind turbine blades, recreational products, and other industrial applications. 4 The following table identifies the principal products and examples of the primary end-uses from the Composite Materials segment: SEGMENT PRODUCTS PRIMARY END-USES COMPOSITE MATERIALS Carbon Fibers  Raw materials for prepregs, fabrics and specialty reinforcements  Filament winding for various aerospace, defense and industrial applications Fabrics, Multi-axials and Specialty Reinforcements  Raw materials for prepregs  Composites and components used in aerospace, defense, wind energy, automotive, recreation, marine and other industrial applications Prepregs, Other Fiber-Reinforced Matrix Materials and Resins  Epoxy resin systems  Composite structures  Commercial and military aircraft  Aero-engines  Rotorcraft  Satellites and launchers  Wind turbine blades  Automotive, marine and rail  Skis, snowboards, bicycles and hockey sticks Structural Adhesives  Bonding of metals, honeycomb and composite materials Honeycomb  Composite structures and interiors  Impact and shock absorption systems  Rotorcraft blades  Acousti-Cap® Pultruded Profiles  Tubes, rods, robotics and medical applications Carbon Fibers: HexTow® carbon fibers are used in certain reinforcements and composite materials.

Composite Materials The Composite Materials segment manufactures and markets carbon fibers, fabrics, and specialty reinforcements, prepregs and other fiber-reinforced matrix materials, structural adhesives, honeycomb, molding compounds, tooling materials, polyurethane systems and laminates that are incorporated into many applications, including commercial and military aircraft, transportation (including automotive, marine and rail), wind turbine blades, recreational products, and other industrial applications. 3 The following table identifies the principal products and examples of the primary end-uses from the Composite Materials segment: SEGMENT PRODUCTS PRIMARY END-USES COMPOSITE MATERIALS Carbon Fibers  Raw materials for prepregs, fabrics and specialty reinforcements  Filament winding for various aerospace, defense and industrial applications Fabrics, Multi-axials and Specialty Reinforcements  Raw materials for prepregs  Composites and components used in aerospace, defense, automotive, wind energy, recreation, marine and other industrial applications Prepregs, Other Fiber-Reinforced Matrix Materials and Resins  Epoxy resin systems  Composite structures  Commercial and military aircraft  Aero-engines  Rotorcraft  Satellites and launchers  Automotive, marine and rail  Wind Turbine blades  Skis, snowboards, bicycles and hockey sticks Structural Adhesives  Bonding of metals, honeycomb and composite materials Honeycomb  Composite structures and interiors  Impact and shock absorption systems  Rotorcraft blades  Acousti-Cap® Pultruded Profiles  Tubes, rods, robotics and medical applications Carbon Fibers: HexTow® carbon fibers are used in certain reinforcements and composite materials.

For additional information regarding certain factors that may cause our actual results to differ from those expected or anticipated, see the information under the caption “Risk Factors,” which is located in Item 1A of Part I of this report.

For additional information regarding certain 13 factors that may cause our actual results to differ from those expected or anticipated, see the information under the caption “Risk Factors,” which is located in Item 1A of Part I of this report.

Changes in environmental and climate change laws or regulations, including laws relating to greenhouse gas emissions, could lead to new or additional investment in manufacturing processes or product designs and could increase environmental compliance expenditures, including increased energy and raw materials costs.

As such, our management team places significant focus and attention on the attraction, development, and retention of employees, as well as ensuring our corporate culture reflects Hexcel’s values, and our board of directors provides oversight for various employee initiatives.

As such, our management team places significant focus and attention on the attraction, development, and retention of employees, as well as ensuring our corporate culture reflects our values, and our board of directors provides oversight for various employee initiatives.

Any failure to comply with trade regulations could limit our ability to conduct business internationally. 12 Sales and Marketing A staff of salaried marketing managers, product managers and sales personnel, sell and market our products directly to customers worldwide. We also use independent authorized distributors for certain products, markets, and regions. In addition, we operate various sales representation offices globally.

Any failure to comply with trade regulations could limit our ability to conduct business internationally. 11 Sales and Marketing A staff of salaried marketing managers, product managers and sales personnel sell and market our products directly to customers worldwide. We also use independent authorized distributors for certain products, markets, and regions. In addition, we operate various sales representation offices globally.

Prepreg reinforcements include glass, carbon, aramid, quartz, ceramic and other specialty fibers. Resin matrices include bismaleimide, cyanate ester, epoxy, phenolic, polyimide and other specialty resins. 5 Other Fiber-Reinforced Matrix Materials : Fiber reinforced matrix developments include HexTool®, a specialized form of quasi-isotropic carbon fiber prepreg for use in the cost-effective construction of high temperature resistant composite tooling.

Prepreg reinforcements include glass, carbon, aramid, quartz, ceramic and other specialty fibers. Resin matrices include bismaleimide, cyanate ester, epoxy, phenolic, polyimide and other specialty resins. 4 Other Fiber-Reinforced Matrix Materials : Fiber reinforced matrix developments include HexTool®, a specialized form of quasi-isotropic carbon fiber prepreg for use in the cost-effective construction of high temperature resistant composite tooling.

Space applications for advanced composites 9 include solid rocket booster cases, fairings and payload doors for both government funded and commercial launch vehicles, and satellite buss and solar arrays for military and commercial satellites. Another growth generating trend for Hexcel is the further penetration of composites in rotorcraft blades, including both new and replacement blades.

Space applications for advanced composites include solid rocket booster cases, fairings and payload doors for both government funded and commercial launch vehicles, and satellite buss and solar arrays for military and commercial satellites. 8 Another growth generating trend for Hexcel is the further penetration of composites in rotorcraft blades, including both new and replacement blades.

When aircraft are retired from commercial airline fleets, they may be converted to cargo freight aircraft, used for parts, or scrapped. 8 An additional factor that may cause airlines to defer or cancel orders is their ability to obtain financing, including leasing, for new aircraft orders.

When aircraft are retired from commercial airline fleets, they may be converted to cargo freight aircraft, used for parts, or scrapped. 7 An additional factor that may cause airlines to defer or cancel orders is their ability to obtain financing, including leasing, for new aircraft orders.

We are committed to pursuing the utilization of advanced structural material technology and introducing new innovations to support our customers in response to changing market dynamics in Industrial markets where it can generate significant value and we can maintain a sustainable competitive advantage.

In response to changing market dynamics, we are committed to pursuing the utilization of advanced structural material technology and introducing new innovations to support our customers where it can generate significant value and we can maintain a sustainable competitive advantage.

The Boeing 777X was redesigned with composite wings and a new composite-rich engine and is more than 30% composites. Boeing’s B787, which entered into service in 2011, has a content of more than 50% composite materials by weight including composite wings and fuselage.

The Boeing 777X was redesigned with composite wings and a new composite-rich engine and is more than 30% composites. Boeing’s 787, which entered into service in 2011, has a content of more than 50% composite materials by weight including composite wings and fuselage.

The Engineered Products segment includes a 50% ownership interest in a Malaysian joint venture, Aerospace Composites Malaysia Sdn. Bhd. (“ACM”) with Boeing Worldwide Operations Limited. Hexcel historically purchased certain semi-finished composite components from the joint venture and performed inspection and additional assembly work prior to direct delivery to Boeing production lines.

The Engineered Products segment has historically included a 50% ownership interest in a Malaysian joint venture, Aerospace Composites Malaysia Sdn. Bhd. (“ACM”) with Boeing Worldwide Operations Limited. Hexcel historically purchased certain semi-finished composite components from the joint venture and performed inspection and additional assembly work prior to direct delivery to Boeing production lines.

The Industrial market also includes sales to major end user sub-markets, in order of size based on our 2022 sales: general industrial applications (including those sold through distributors), transportation (e.g., automobiles, mass transit and high-speed rail, and marine applications) and consumer electronics and recreational equipment (e.g., skis and snowboards, bicycles and hockey sticks).

The Industrial market also includes sales to major end user sub-markets, in order of size based on our 2023 sales: general industrial applications (including those sold through distributors), transportation (e.g., automobiles, mass transit and high-speed rail, and marine applications) and consumer electronics, wind energy, and recreational equipment (e.g., skis and snowboards, bicycles and hockey sticks).

Attaining both certifications against world renowned management system standards reflects the commitment of senior Hexcel leadership to drive continuous improvement in our EHS processes, by focusing on the reduction of injuries and illnesses and the impact of our operations on the environment, ensuring conformance to our numerous compliance obligations, and demonstrating sustainability as a valued supplier.

Attaining both certifications against world renowned management system standards reflects the commitment of senior Hexcel leadership to drive continuous improvement in our environmental, health and safety processes, by focusing on the reduction of injuries and illnesses and the impact of our operations on the environment, ensuring conformance to our numerous compliance obligations, and demonstrating sustainability as a valued supplier.

All of the PAN we produce is for internal carbon fiber production. We utilized between 65% and 70% by value of the carbon fiber we produced in 2022 and between 55% and 60% in 2021 with the remainder of our output sold to third-party customers.

All of the PAN we produce is for internal carbon fiber production. We utilized between 60% and 65% by value of the carbon fiber we produced in 2023 and between 65% and 70% in 2022 with the remainder of our output sold to third-party customers.

We employ a minimal number of contract workers. Approximately 22% of employees in the United States and the majority of those in Europe are represented by unions or works’ councils. We believe that our relations with employees, unions and works’ councils are good.

We employ a minimal number of contract workers. Approximately 30% of employees in the United States and the majority of those in Europe are represented by unions or works’ councils. We believe that our relations with employees, unions and works’ councils are 12 good.

We sell to three different markets: Commercial Aerospace, Space & Defense and Industrial. Commercial Aerospace The Commercial Aerospace industry is our largest user of advanced composites. Commercial Aerospace represented 58% of our 2022 net sales. Approximately 79% of these revenues can be identified as sales to Airbus, Boeing, and their subcontractors for the production of commercial aircraft.

We sell to three different markets: Commercial Aerospace, Space & Defense and Industrial. Commercial Aerospace The Commercial Aerospace industry is our largest user of advanced composites. Commercial Aerospace represented 60% of our 2023 net sales. Approximately 79% of these revenues can be identified as sales to Airbus, Boeing, and their subcontractors for the production of commercial aircraft.

The following summaries describe the ongoing activities related to the Composite Materials and Engineered Products segments as of December 31, 2022.

The following summaries describe the ongoing activities related to the Composite Materials and Engineered Products segments as of December 31, 2023.

The LEAP engines and nacelles on both the A320neo and B737 MAX are composite-rich as is the GE9X engine on the Boeing 777X.

The LEAP engines and nacelles on both the A320neo and 737 MAX are composite-rich as is the GE9X engine on the Boeing 777X.

Governments and agencies worldwide are increasingly proposing and/or implementing legislation, regulations and other requirements resulting in more restrictive air emission limits globally, which could have an impact on our operations.

The following tables identify the principal products and examples of the primary end-uses from the Engineered Products segment: SEGMENT PRODUCTS PRIMARY END-USES ENGINEERED PRODUCTS Composite Structures  Aircraft structures and finished aircraft components, including wing to body fairings, wing panels, flight deck panels, door liners, rotorcraft blades, spars and tip caps Engineered Honeycomb  Aircraft structural sub-components and semi-finished components used in rotorcraft blades, engine nacelles, and aircraft surfaces (flaps, wings, elevators and fairings) RF Interference Control  Military and aerospace applications Net sales for the Engineered Products segment to third-party customers were $298.0 million in 2022, $305.3 million in 2021, and $316.5 million in 2020, which represented approximately 20% of our net sales each year.

The following table identifies the principal products and examples of the primary end-uses from the Engineered Products segment: SEGMENT PRODUCTS PRIMARY END-USES ENGINEERED PRODUCTS Composite Structures  Aircraft structures and finished aircraft components, including wing to body fairings, wing panels, flight deck panels, door liners, rotorcraft blades, spars and tip caps Engineered Honeycomb  Aircraft structural sub-components and semi-finished components used in rotorcraft blades, engine nacelles, and aircraft surfaces (flaps, wings, elevators and fairings) RF Interference Control  Military and aerospace applications Net sales for the Engineered Products segment to third-party customers were $314.8 million in 2023, $298.0 million in 2022, and $305.3 million in 2021, which represented approximately 20% of our net sales each year.

Of the 14% of overall sales to Boeing and its subcontractors in 2022, 11% related to Commercial Aerospace market applications and 3% related to Space & Defense market applications. Markets Our products are sold for a broad range of end-uses where durability, strength and weight are important factors to our customers.

Of the 15% of overall sales to Boeing and its subcontractors in 2023, 12% related to Commercial Aerospace market applications and 3% related to Space & Defense market applications. Markets Our products are sold for a broad range of end-uses where durability, strength and weight are important factors to our customers.

Both Airbus and Boeing introduced new versions of their narrow body aircraft which utilize composite-rich engines and nacelles, but continue to incorporate metal wings and fuselages that were designed decades ago. Airbus’s A320neo had its first customer delivery in 2016 and Boeing’s B737 MAX entered into service in 2017.

Both Airbus and Boeing introduced updated versions of their narrow body aircraft which utilize composite-rich engines and nacelles but continue to incorporate metal wings and fuselages that were designed decades ago. The Airbus A320neo had its first customer delivery in 2016 and the Boeing 737 MAX entered into service in 2017.

Employee levels are managed to align with business demand and, while we have experienced and continue to expect tight labor markets, management believes it currently has sufficient human capital to operate its business successfully. As of December 31, 2022, we employed 5,328 full-time employees and contract workers: 2,835 in the United States and 2,493 in other countries.

Employee levels are managed to align with business demand and, while we have experienced and continue to expect tight labor markets, management believes it currently has sufficient human capital to operate our business successfully. As of December 31, 2023, we employed 5,590 full-time employees and contract workers: 2,936 in the United States and 2,654 in other countries.

However, as one of the world’s largest consumers of high-performance carbon fiber, we also purchase significant quantities of carbon fiber from external sources for our own use. The sources of carbon fiber we can use in any product or application are generally dictated by customer qualifications or certifications.

The total number of full-time employees and contract workers as of December 31, 2021 and 2020 was 4,863 and 4,647, respectively. 13 Other Information Our internet website is www.hexcel.com.

The total number of full-time employees and contract workers as of December 31, 2022 and 2021 was 5,328 and 4,863, respectively. Other Information Our internet website is www.hexcel.com.

We also have a presence in Malaysia where we are a partner in a joint venture which manufactures composite structures for Commercial Aerospace applications. We are a manufacturer of products within a single industry: Advanced Composites. We have two reportable segments: Composite Materials and Engineered Products.

We also had a presence in Malaysia where we were a partner in a joint venture which manufactures composite structures for Commercial Aerospace applications. In December 2023, we sold our interest in the joint venture. We are a manufacturer of products within a single industry: Advanced Composites. We have two reportable segments: Composite Materials and Engineered Products.

These structural adhesives, which bond metal to metal and composites and honeycomb structures, are used in the aerospace industry and for many industrial applications. Honeycomb: HexWeb® honeycomb is a lightweight, cellular structure generally composed of a sheet of nested hexagonal cells.

Structural Adhesives: We manufacture and market a comprehensive range of HexBond® film and paste adhesives. These structural adhesives, which bond metal to metal and composites and honeycomb structures, are used in the aerospace industry and for many industrial applications. Honeycomb: HexWeb® honeycomb is a lightweight, cellular structure generally composed of a sheet of nested hexagonal cells.

We recently completed the construction of our newest and largest Center of R&T excellence in Salt Lake City, Utah. This Center will support next-generation composite technology development across our business including applications for the Commercial Aerospace, Space & Defense and Industrial markets.

In early 2023, we completed the construction of our newest and largest R&T Center of Excellence in Salt Lake City, Utah which supports next-generation composite technology development across our business including applications for the Commercial Aerospace, Space & Defense and Industrial markets.

We have made and continue to make significant investments in training and professional development, and we have well-established performance management and talent development processes that encourage employees to aspire to different career opportunities and for our managers to provide regular feedback and coaching to develop employees. The health and safety of our employees is also a top priority.

Of the 38% of overall sales to Airbus and its subcontractors in 2022, 35% related to Commercial Aerospace market applications and 3% related to Space & Defense market applications. Approximately 14%, 16% and 19% of our 2022, 2021 and 2020 net sales, respectively, were to Boeing and its subcontractors.

Of the 39% of overall sales to Airbus and its subcontractors in 2023, 35% related to Commercial Aerospace market applications and 4% related to Space & Defense market applications. Approximately 15%, 14% and 16% of our 2023, 2022 and 2021 net sales, respectively, were to Boeing and its subcontractors.

We believe that our policies, practices, and procedures are properly designed to prevent unreasonable risk of environmental damage and associated financial liability. To date, environmental control regulations have not had a significant adverse effect on our overall operations.

The generation of solar power reduces our demand for fossil-fuel powered electricity, which supports our carbon and greenhouse gas emission reduction goals. We also procure renewable power through our energy suppliers and for one site, renewable power is procured through a power purchase agreement (PPA).

The generation of solar power reduces our demand for fossil-fuel powered electricity, which supports our carbon and greenhouse gas emission reduction goals. We also procure renewable power through our energy suppliers and at several sites, through power purchase agreements (PPA).

The Engineered Products segment is comprised of lightweight high strength composite structures, radio frequency/electromagnetic interference (“RF/EMI”) and microwave absorbing materials, engineered core and specialty machined honeycomb products with added functionality and thermoplastic additive manufacturing.

We are qualified to supply materials to a broad range of military aircraft, commercial helicopter and space programs, including the Lockheed Martin F-35 (Lightning), Sikorsky CH-53K (King Stallion), Bell-Boeing V-22 (Osprey) tilt rotor aircraft, Sikorsky UH-60 Black Hawk and Airbus A400M military transport. The F-35, which is our largest program, represents less than 25% of revenues in this market.

We are qualified to supply materials to a broad range of military aircraft, commercial helicopter and space programs, including the Lockheed Martin F-35 (Lightning), Sikorsky CH-53K (King Stallion), Bell-Boeing V-22 (Osprey) tilt rotor aircraft, Sikorsky UH-60 Black Hawk, Dassault Rafale and Airbus A400M military transport.

Such factors include, but are not limited to, the following: the extent of the impact of macroeconomic factors, including the COVID-19 pandemic and the conflict between Russia and Ukraine (including continued disruption in global financial markets and supply chains, inflation and related decreases in discretionary spending, labor shortages, and reduced demand for air travel) on the operations, business and financial condition of Hexcel and its customers and suppliers; reductions in sales to any significant customers, particularly Airbus or Boeing, including related to regulatory activity impacting the Boeing 737 MAX or the Boeing 787, as well as due to the impact of the COVID-19 pandemic or other geopolitical events or conditions, including the Russia/Ukraine conflict; our ability to effectively adjust production and inventory levels to align with customer demand; our ability to effectively motivate, retain and hire the necessary workforce; availability and cost of raw materials, including the impact of supply shortages and inflation; supply chain disruptions , which have been exacerbated by the conflict between Russia and Ukraine; our ability to successfully implement or realize our business strategies, plans, goals and objectives of management, including our sustainability goals and any restructuring or alignment activities in which we may engage; changes in sales mix; changes in current pricing and cost levels, including cost inflation, as well as increasing energy prices resulting from the conflict between Russia and Ukraine; changes in aerospace delivery rates; changes in government defense procurement budgets; changes in military aerospace program technology; timely new product development or introduction; industry capacity; increased competition; our ability to install, staff and qualify necessary capacity or complete capacity expansions to meet customer demand; cybersecurity-related risks, including the potential impact of breaches or intrusions; currency exchange rate fluctuations; changes in political, social and economic conditions, including, but not limited to, the effect of change in global trade policies, such as sanctions imposed as a result of the conflict between Russia and Ukraine; work stoppages or other labor disruptions; our ability to 14 successfully complete any strategic acquisitions, investments or dispositions; compliance with environmental, health, safety and other related laws and regulations, including those related to climate change; the effects of natural disasters or other severe weather events, which may be worsened by the impact of climate change, and other severe catastrophic events, including any public health crisis; the potential impact of environmental, social and governance matters; and the unexpected outcome of legal matters or impact of changes in laws or regulations.

Such factors include, but are not limited to, the following: the extent of the impact of macroeconomic factors or geopolitical issues or conflicts; reductions in sales to any significant customers, particularly Airbus or Boeing, including related to regulatory activity or public scrutiny impacting the Boeing 737 MAX or the Boeing 787; our ability to effectively adjust production and inventory levels to align with customer demand; our ability to effectively motivate, retain and hire the necessary workforce; the availability and cost of raw materials, including the impact of supply shortages and disruptions and inflation; our ability to successfully implement or realize our strategic initiatives, including our sustainability goals and any restructuring or alignment activities in which we may engage; changes in sales mix; changes in current pricing due to cost levels; changes in aerospace delivery rates; changes in government defense procurement budgets; timely new product development or introduction; our ability to install, staff and qualify necessary capacity or complete capacity expansions to meet customer demand; cybersecurity-related risks, including the potential impact of breaches or intrusions; currency exchange rate fluctuations; changes in political, social and economic conditions, including the effect of change in global trade policies, such as sanctions; work stoppages or other labor disruptions; our ability to successfully complete any strategic acquisitions, investments or dispositions; compliance with environmental, health, safety and other related laws and regulations, including those related to climate change; the effects of natural disasters or other severe weather events, which may be worsened by the impact of climate change, and other severe catastrophic events, including any public health crisis; and the unexpected outcome of legal matters or impact of changes in laws or regulations .

Under the ACM joint venture structure, 50% of ACM net income continues to accrue to Hexcel. 7 The following table identifies the key customers and the major manufacturing facilities of the Engineered Products segment: ENGINEERED PRODUCTS MAJOR KEY CUSTOMERS MANUFACTURING FACILITIES The Boeing Company Amesbury, Massachusetts Bell Burlington, Washington CTRM Aero Composites Casablanca, Morocco General Electric Kent, Washington GKN Pottsville, Pennsylvania Lockheed Martin South Windsor, Connecticut Sikorsky, a Lockheed Martin Company Welkenraedt, Belgium Spirit Aerosystems Raytheon Technologies Significant Customers Approximately 38%, 33% and 33% of our 2022, 2021 and 2020 net sales, respectively, were to Airbus and its subcontractors.

The following table identifies the key customers and the major manufacturing facilities of the Engineered Products segment: 6 ENGINEERED PRODUCTS KEY CUSTOMERS MANUFACTURING FACILITIES The Boeing Company Amesbury, Massachusetts Bell (1) Burlington, Washington CTRM Aero Composites Casablanca, Morocco General Dynamics Kent, Washington General Electric Pottsville, Pennsylvania GKN South Windsor, Connecticut Lockheed Martin Welkenraedt, Belgium Sikorsky (2) Spirit Aerosystems RTX (1) A Textron Company (2) A Lockheed Martin Company Significant Customers Approximately 39%, 38% and 33% of our 2023, 2022 and 2021 net sales, respectively, were to Airbus and its subcontractors.

Although we are not experiencing direct material adverse effects upon our business, the global implications of the Russia/Ukraine conflict which include increased inflation, escalating energy costs, constrained raw material availability and transportation, and thus increasing costs, as well as restrictions on flights by Russian airlines are impacting the global economy and the aerospace industry in particular.

Although we are not experiencing direct material adverse effects upon our business, the global implications of geopolitical issues and conflicts which include increased inflation, volatile energy costs, constrained raw material availability and transportation, and thus increasing costs, as well as aircraft flight restrictions are impacting the global economy and the aerospace industry in particular.

Resins can be combined with fiber reinforcements in manufacturing processes such as resin transfer molding, resin film infusion or vacuum assisted resin transfer molding to produce high quality composite components for both aerospace and industrial applications, without the need for customer investment in autoclaves. Structural Adhesives: We manufacture and market a comprehensive range of HexBond® film and paste adhesives.

Resins can be combined with fiber reinforcements in manufacturing processes such as resin transfer molding, resin film infusion or vacuum assisted resin transfer molding to support high volume production of composite components for both aerospace and industrial applications, without the need for customer investment in autoclaves.

The UH-60 wide chord blade program and blades for the V-22 were the two largest blade programs in 2022. CH-53K is a future growth program, including the composite helicopter blades and new helicopter programs in development which use Hexcel composites in prototypes. The blades include Composite Materials products such as carbon fiber, prepregs, and honeycomb core to improve blade performance.

The UH-60 wide chord blade program and blades for the V-22 were the two largest blade programs in 2023 and 2022. CH-53K is a future growth program, including the composite helicopter blades and new helicopter programs in development which use Hexcel composites in prototypes.

Over the past ten years, our focus on the reduction of injuries and illnesses has significantly improved our safety performance. We have attained these improvements by fostering a global safety culture supported with regular training and education that includes robust systems and philosophies centered on personal responsibility and accountability.

We have attained these improvements by fostering a global safety culture supported with regular training and education that includes robust systems and philosophies centered on personal responsibility and accountability.

On average, for established programs, we deliver products into the supply chain about six months prior to aircraft delivery, with a range between one and eighteen months depending on the product and specific aircraft platform. For aircraft that are in the development or ramp-up stage we will have sales as much as several years in advance of delivery.

On average, for established programs, we deliver products into the supply chain about four to six months prior to aircraft delivery, with a range between one and eighteen months depending on the product and specific aircraft platform.

We continue to work with our key suppliers who have been impacted by these supply disruptions to ensure that we are able to meet our customer commitments.

We continue to work closely with our key suppliers to ensure that we are able to meet our customer commitments.

No other program accounts for more than 10% of our revenues in this market. The sales from these programs are dependent upon those that are funded and the extent of the funding.

The F-35, which is our largest program, represents less than 25% of revenues in this market. No other program accounts for more than 10% of our revenues in this market. The sales from these programs are dependent upon government funding.

In addition, our Engineered Products segment provides specialty value added services such as machining, sub-assembly, and even full blade manufacturing for rotorcraft. The Space & Defense market represented 29% of our 2022 net sales.

The blades include Composite Materials products such as carbon fiber, prepregs, and honeycomb core to improve blade performance. In addition, our Engineered Products segment provides specialty value added services such as machining, sub-assembly, and even full blade manufacturing for rotorcraft. Industrial The Industrial market represented 10% of our 2023 net sales.

The type of epoxy and curative used in the resin systems vary depending on the application being considered, including the required service temperature, mechanical performance, and rate of cure.

We formulate a variety of resin systems that are tailored to specific applications and support the process for manufacturing composite parts. The type of epoxy and curative used in the resin systems vary depending on the application being considered, including the required service temperature, mechanical performance, and rate of cure.

This includes carbon fiber and resin formulations that we produce as well as glass fiber we purchase from third parties that we then combine with our resin and weaving expertise. Within the Industrial market, wind energy has historically comprised the largest submarket with Vestas Wind Systems A/S (“Vestas”) as our primary customer.

This includes carbon fiber and resin formulations that we produce as well as glass fiber we purchase from third parties that we then combine with our resin formulations and weaving expertise. Within the Industrial market, automotive is the largest submarket with sales to high-end performance vehicles.

Otherwise, we select a carbon fiber based on performance, price, and availability. 10 With the increasing demand for carbon fiber, particularly in aerospace applications, in recent years we increased our PAN and carbon fiber capacity to serve the growing needs of our customers and our own downstream products.

With the increasing demand for carbon fiber, particularly in aerospace applications, in recent years we increased our PAN and carbon fiber capacity to serve the growing needs of our customers and our own downstream products. After a new production line starts operating, it can take up to a year to be certified for aerospace applications.

Key product applications include structural components for commercial and military aircraft and rotorcraft, space launch vehicles, and certain other applications such as recreational and industrial equipment. Fabrics, Multi-axials and Specialty Reinforcements: HexForce® fabrics, multi-axials and specialty reinforcements are made from a variety of fibers, including carbon, glass, aramid and other high strength polymers, quartz, ceramic and other specialty fibers.

Fabrics, Multi-axials and Specialty Reinforcements: HexForce® fabrics, multi-axials and specialty reinforcements are made from a variety of fibers, including carbon, glass, aramid and other high strength polymers, quartz, ceramic and other specialty fibers.

MAJOR MANUFACTURING FACILITIES Casa Grande, Arizona Neumarkt, Austria Dagneux, France Parla, Spain Decatur, Alabama Roussillon, France Duxford, England Salt Lake City, Utah Illescas, Spain Seguin, Texas Leicester, England Stade, Germany Les Avenières, France Vert-le-Petit, France Net sales for the Composite Materials segment to third-party customers were $1,279.7 million in 2022, $1,019.4 million in 2021, and $1,185.9 million in 2020, which represented about 80% of our net sales each year.

The following tables identify the key customers and the major manufacturing facilities of the Composite Materials segment: COMPOSITE MATERIALS KEY CUSTOMERS Aernnova Daher Nordam Airbus Dassault Northrop Grumman Bell (1) Embraer Pratt & Whitney (2) Blizzard FACC Safran BMW General Electric Sikorsky (4) The Boeing Company GKN Syensqo Bombardier Gulfstream (3) Spirit Aerosystems CFAN Leonardo Toray Collins Aerospace (2) Lockheed Martin RTX CTRM Aero Composites Mubea Vestas (1) A Textron Company (2) A RTX Company (3) A General Dynamics Company (4) A Lockheed Martin Company 5 MANUFACTURING FACILITIES Casa Grande, Arizona Neumarkt, Austria Dagneux, France Parla, Spain Decatur, Alabama Roussillon, France Duxford, England Salt Lake City, Utah Illescas, Spain Seguin, Texas Leicester, England Stade, Germany Les Avenières, France Vert-le-Petit, France Net sales for the Composite Materials segment to third-party customers were $1,474.2 million in 2023, $1,279.7 million in 2022, and $1,019.4 million in 2021, which represented about 80% of our net sales each year.

We continue to improve our emissions profile through operational efficiency improvements that lessen our use of fossil fuels and by increasing our use of renewable power. We have implemented sustainable energy sourcing within certain of our operations, with recent on-site solar projects at our manufacturing sites in Neumarkt, Austria, Casa Grande, Arizona, and Casablanca, Morocco.

We have implemented sustainable energy sourcing within certain sites, as we work with our energy suppliers to increase sources of renewable power and install on-site solar panels at our manufacturing sites in Neumarkt, Austria, Casa Grande, Arizona, and Casablanca, Morocco.

These applications also exhibit increasing utilization of composite materials with each new generation of aircraft, such as the composite wing on the large-cabin Falcon 10X business jet that Dassault announced in 2022. Space & Defense The Space & Defense market has historically been an innovator in the use of, and source of significant demand for, advanced composites.

The balance of our Other Commercial Aerospace sales is related to business jets and regional aircraft manufacture, and other commercial aircraft applications. These applications also exhibit increasing utilization of composite materials with each new generation of aircraft, such as the composite wing on the large-cabin Falcon 10X business jet that Dassault announced in 2022.

Research and Technology; Patents and Know-How Our Research and Technology (“R&T”) centers of excellence located globally support our businesses worldwide.

Research and Technology: Patents and Know-How We maintain seven Research and Technology (“R&T”) Centers of Excellence to support our businesses worldwide, including in the U.S., France and the United Kingdom.

As supply chains recover, disruptions with obtaining and training labor and constraints on receiving raw materials across the aerospace supply chain have tempered the near-term growth in aircraft production rates, leading to higher backlogs. The balance of our Commercial Aerospace sales is related to business jets and regional aircraft manufacture, and other commercial aircraft applications.

Airbus and Boeing began increasing production rates in 2022 for select aircraft platforms as air travel recovers and demand for latest-generation fuel efficient aircraft increases. As supply chains recover, disruptions with obtaining and training labor and constraints on receiving raw materials across the aerospace supply chain have tempered the near-term growth in aircraft production rates, leading to higher backlogs.

Our participation in Industrial applications complements our commercial and military aerospace businesses, and in many instances, technology or products now used in aerospace were started in Industrial.

We continue to produce material for wind blades at our European facility under existing contracts for a number of legacy turbines. Our participation in Industrial applications complements our commercial and military aerospace businesses, and in many instances, technology or products now used in aerospace were started in Industrial.

Environmental Matters We view climate-change as an important social issue that presents some level of risk to our business while also creating opportunities for greater composite adoption. Our strategic and operational decision making is influenced by our commitment to 11 reduce the environmental impact of our operations, including our carbon footprint, air and water emissions and waste reduction.

Environmental Matters We view climate change as an important social issue that presents some level of risk to our business while also creating opportunities for greater adoption of lightweight advanced composites.

This will be dependent both upon the financial health of the airline operators, as well as the overall availability of financing in the marketplace. As a result of the COVID-19 pandemic, aircraft manufacturers significantly reduced production rates during 2020 as demand for new aircraft decreased significantly. Select aircraft production rates began to increase in 2021 and 2022.

This will be dependent both upon the financial health of the airline operators, as well as the overall availability of financing in the marketplace. Each new generation of commercial aircraft has used increasing quantities of advanced composites, replacing metals and other materials.

Removed

In 2020 as the COVID-19 pandemic began, we saw the impacts of COVID-19 on our markets and operations, including significant decreases in air traffic, temporary shutdowns of our customers’ and suppliers’ facilities and decreased demand from our customers.

Added

Key product applications include structural components for commercial and military aircraft and rotorcraft, jet engine fan blades and fan casings, space launch vehicles, and certain other applications such as recreational and industrial equipment.

Removed

Our operations, margins and results were adversely impacted by lower demand for our products due to substantial reductions in original equipment manufacturer build rates combined with a move to reduce inventory throughout our supply chain, particularly carbon fiber.

Added

Under the ACM joint venture structure, 50% of ACM net income accrued to Hexcel. In December 2023, Hexcel sold its 50% interest in ACM to Boeing and received net proceeds of $44.7 million.

Removed

The Commercial Aerospace market began to see signs of recovery from the economic impacts of the COVID-19 pandemic in the second half of 2021 which continued through 2022 with further growth in air travel and an increase in aircraft build rates. Despite this recovery, global logistics, supply chains, and inflationary pressures still remain a challenge.

Added

For aircraft that are in the development or ramp-up stage we will have sales as much as several years in advance of the aircraft entry-into-service. Airbus and Boeing combined backlog at December 31, 2023 was 14,814 aircraft, or a 16.9% increase compared to December 31, 2022.

Removed

These challenges have had and may continue to have further negative impacts on our operations, supply chain, transportation networks and customers, all of which have and may continue to compress our financial results. We also continue to monitor developments in ongoing geopolitical issues including the Russia/Ukraine conflict.

Added

Space & Defense The Space & Defense market represented 30% of our 2023 net sales. The Space & Defense market has historically been an innovator in the use of, and source of significant demand for, advanced composites.

Removed

The following tables identify the key customers and the major manufacturing facilities of the Composite Materials segment: COMPOSITE MATERIALS KEY CUSTOMERS Aernnova CTRM Aero Composites Northrop Grumman Airbus Daher Pratt & Whitney (1) Bell Embraer Safran Blizzard FACC Sikorsky (2) BMW General Electric Solvay The Boeing Company GKN Spirit Aerosystems Bombardier Leonardo Toray CFAN Lockheed Martin Raytheon Technologies Collins Aerospace (1) Mubea Vestas COMAC Nordam 6 (1) A Raytheon Technologies Company.

Added

Historically, wind energy comprised the largest submarket within industrial as we purchase third-party glass fiber and add value with our weaving expertise and resin formulations.

Removed

The number of parked aircraft remains elevated compared to pre-COVID 19 levels but has decreased significantly since late 2020 and early 2021 as air travel returns. The remaining parked aircraft are generally older and less fuel-efficient. Each new generation of commercial aircraft has used increasing quantities of advanced composites, replacing metals and other materials.

Added

The financial returns on new wind energy business became unattractive to the Company as the global wind industry works through a period of turmoil in terms of inflationary cost impacts, logistics challenges, permitting delays, and stiff competition amongst multiple wind turbine manufacturers globally.

Removed

Airbus and Boeing combined backlog at December 31, 2022 was 12,669 aircraft, or a 3.7% increase compared to December 31, 2021. Airbus and Boeing increased production rates in 2022 for select aircraft platforms as air travel recovers and demand for latest-generation fuel efficient aircraft increases.

Added

However, these lines can start supplying carbon fiber for many industrial applications within a shorter time period. 9 In early 2023, we announced that we resumed construction of a new carbon fiber line in Decatur, AL. We had previously paused construction on this line in early 2020.

Removed

While our Space & Defense market has been disrupted by the COVID-19 pandemic, the impact has been significantly less than the impact to our Commercial Aerospace market. Industrial The Industrial market represented 13% of our 2022 net sales.

Added

This carbon fiber line is expected to be qualified to produce carbon fiber for aerospace markets in late 2025 or early 2026. Additionally, we completed the expansion of our Engineered Products facility in Casablanca, Morocco as we doubled the size of the facility to meet growing demand.

Removed

Demand in our wind energy sub-market continued to decline in 2022 due in part to the commoditization and outsourcing of blades with a change in technology from prepreg using glass fiber to infusion. We closed our wind blade prepreg facility in China during 2022. We continue to produce material for wind blades at our European facility.

Added

Our strategic and operational decision making is influenced by our commitment to reduce the environmental impact of our operations, including our carbon footprint, air and water emissions and waste reduction. We continue to pursue initiatives to improve our emissions profile through operational efficiency improvements that 10 reduce our reliance on fossil fuels and increase our use of renewable power.

Removed

After a new production line starts operating, it can take up to a year to be certified for aerospace applications. However, these lines can start supplying carbon fiber for many industrial applications within a shorter time period. We formulate a variety of resin systems that are tailored to specific applications and support the process for manufacturing composite parts.

Added

The health and safety of our employees is a continual focus and a top priority. Our initiatives and actions to reduce injuries and illnesses have led to significant improvements to our safety performance over time.

Removed

During 2021 and into 2022, as a result of the challenges created by global transportation issues, the COVID-19 pandemic and market volatility, we experienced supply disruptions and cost increases and anticipate that supply disruptions and material shortages, as well as cost increases, may continue.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

80 edited+17 added−11 removed46 unchanged

2022 filing

2023 filing

Biggest changeWhere possible, we seek to offset or mitigate the impact of such pressures through productivity and performance improvements, cost index contractual provisions, hedging and other actions, which may not be successful. 15 A significant decline in business with Airbus, Boeing, or other significant customers could materially impact our business, operating results, prospects, and financial condition.

Biggest changeIn response to these pressures, we may be required to accept increased risk or face the prospects of margin compression on some products in the future. Where possible, we seek to offset or mitigate the impact of such pressures through productivity and performance improvements, cost index contractual provisions, hedging and other actions, which may not be successful.

ITEM 1A. Ris k Factors You should consider carefully the following risk factors and all other information contained in this Annual Report on Form 10-K and the documents we incorporate by reference in this Annual Report on Form 10-K. Any of the following risks could materially and adversely affect our business, financial condition, results of operations and cash flows.

ITEM 1A. Ris k Factors You should carefully consider the following risk factors and all other information contained in this Annual Report on Form 10-K and the documents we incorporate by reference in this Annual Report on Form 10-K. Any of the following risks could materially and adversely affect our business, financial condition, results of operations and cash flows.

We must comply with laws and regulations relating to the formation, administration, and performance of U.S. government contracts, including the government security requirements and additional government export control laws and regulations, as well as certain cybersecurity certifications and other cybersecurity requirements.

We must comply with laws and regulations relating to the formation, administration, and performance of U.S. government contracts, including government security requirements and additional government export control laws and regulations, as well as certain cybersecurity certifications and other cybersecurity requirements.

To the fullest extent permitted by law, this exclusive forum provision applies to state and federal law claims, including claims under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, although the Company will not be deemed to have waived its compliance with the federal securities laws and the rules and regulations thereunder.

To the fullest extent permitted by law, this exclusive forum provision applies to state and federal law claims, including claims under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), although the Company will not be deemed to have waived its compliance with the federal securities laws and the rules and regulations thereunder.

Such provisions include, among other things, those that: • prohibit stockholders from taking action by written consent and do not permit stockholders to call a special meeting; • authorize the board of directors, without further action by the stockholders, to issue shares of preferred stock in one or more series, and with respect to each series, to fix the number of shares constituting that series, and establish the rights and terms of that series; • establish advance notice procedures for stockholders to submit proposals and nominations of candidates for election to the board of directors to be brought before a stockholders meeting; • allow our directors to establish the size of the board of directors (so long as the board of directors consists of at least three and no more than fifteen directors) and fill vacancies on the board of directors created by an increase in the number of directors (subject to the rights of the holders of any series of preferred stock to elect additional directors under specified circumstances); • do not provide stockholders cumulative voting rights with respect to director elections; • provide that the bylaws may be amended by the board of directors without stockholder approval, to the extent permitted by law; and • do not opt out of Section 203 of the DGCL, which generally prohibits a Delaware corporation from engaging in a “business combination” with any interested stockholder (generally speaking, a stockholder who holds 15% or more of our voting stock) for three years from the date such stockholder becomes an interested stockholder, unless certain conditions are met.

Such provisions include, among other things, those that: • prohibit stockholders from taking action by written consent and do not permit stockholders to call a special meeting; • authorize the board of directors, without further action by the stockholders, to issue shares of preferred stock in one or more series, and with respect to each series, to fix the number of shares constituting that series, and establish the rights and terms of that series; • establish advance notice procedures for stockholders to submit proposals and nominations of candidates for election to the board of directors to be brought before a stockholders meeting; • allow our directors to establish the size of the board of directors (so long as the board of directors consists of at least three and no more than fifteen directors) and fill vacancies on the board of directors created by an increase in the number of directors (subject to the rights of the holders of any series of preferred stock to elect additional directors under specified circumstances); • do not provide stockholders cumulative voting rights with respect to director elections; • provide that the bylaws may be amended by the board of directors without stockholder approval, to the extent permitted by law; and • do not opt out of Section 203 of the DGCL, which generally prohibits a Delaware corporation from engaging in a “business combination” with any interested stockholder (generally speaking, a stockholder who holds 15% or more 21 of our voting stock) for three years from the date such stockholder becomes an interested stockholder, unless certain conditions are met.

Although most of our properties have been the subject of environmental site assessments, there can be no assurance that all potential instances of soil and groundwater contamination have been identified, even at those sites where 19 assessments have been conducted. Accordingly, we may discover previously unknown environmental conditions and the cost of remediating such conditions may be material.

Although most of our properties have been the subject of environmental site assessments, there can be no assurance that all potential instances of soil and groundwater contamination have been identified, even at those sites where assessments have been conducted. Accordingly, we may discover previously unknown environmental conditions and the cost of remediating such conditions may be material.

Furthermore, our reputation could be damaged if we or others in our industry do not act, or are perceived not to act, responsibly with respect to our impact on the environment, or if we fail to achieve our sustainability goals, which could limit our ability to grow and otherwise adversely affect our results of operations.

Furthermore, our reputation could be damaged if we or others in our industry do not act, or are perceived not to act, responsibly with respect to our impact on the environment, or if we fail to achieve our sustainability goals or targets, which could limit our ability to grow and otherwise adversely affect our results of operations.

Due to necessary cost reduction measures or changes in the industry and markets in which we compete, we may decide to implement additional restructuring or alignment activities in the future, such as closing plants, idling certain equipment or operations, or making additions, reductions or other changes to our management or workforce.

Due to necessary cost reduction measures or changes in the industry and markets in which we 16 compete, we may decide to implement additional restructuring or alignment activities in the future, such as closing plants, idling certain equipment or operations, or making additions, reductions or other changes to our management or workforce.

We are actively reviewing and implementing projects to reduce our energy intensity and greenhouse gas emissions, but there is no guarantee that such options or projects may be technologically and/or environmentally feasible, or that we will be able to implement any such projects on a timely or cost-effective basis.

We are actively reviewing and implementing projects to reduce our energy intensity and greenhouse gas emissions, but there is no guarantee that such options or projects will be technologically and/or environmentally feasible, or that we will be able to implement any such projects on a timely or cost-effective basis.

For example, most of our European operations sell a majority of the products they produce in U.S. dollars, yet the labor, overhead costs and portions of material costs incurred in the manufacture of those products are primarily denominated in Euros, British pound sterling or U.S. dollars.

For example, most of our European operations sell a majority of the products they produce in U.S. dollars, yet the labor and overhead costs and portions of raw material costs incurred in the manufacture of those products are primarily denominated in Euros, British pound sterling or U.S. dollars.

Further, there can be no assurance of the extent to which any of our commitments will be achieved, if at all; we could fail, or be perceived to fail, in our achievement of such initiatives or goals, or we could fail in fully and accurately reporting our progress on such initiatives and goals.

Further, there can be no assurance of the extent to which any of our commitments will be achieved, if at all; we could fail, or be perceived to fail, in our achievement of such initiatives, targets or goals, or we could fail in fully and accurately reporting our progress on such initiatives, targets and goals.

Our amended and restated bylaws provide to the fullest extent permitted by law that unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”) or our restated certificate of incorporation, as amended, or amended and restated bylaws, or any action asserting a claim governed by the internal affairs doctrine of the State of Delaware.

Our bylaws provide to the fullest extent permitted by law that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”) or our restated certificate of incorporation, as amended (the “certificate of incorporation”), or bylaws, or any action asserting a claim governed by the internal affairs doctrine of the State of Delaware.

In addition, we could be criticized for the scope of such initiatives or goals or perceived as not acting responsibly in connection with these matters. Any such matters could have a material adverse effect on our business.

In addition, we could be criticized for the scope of such initiatives, targets or goals or perceived as not acting responsibly in connection with these matters. Any such matters could have a material adverse effect on our business.

We previously determined that we have a small percentage of suppliers who manufacture in vulnerable locations, which may impact distribution of raw materials to our operations, although we have taken actions to mitigate the potential impact where possible.

We previously determined that a small percentage of our suppliers manufacture in vulnerable locations, which may impact distribution of raw materials to our operations, although we have taken actions to mitigate the potential impact where possible.

Although preventative measures may help to mitigate damage, any disaster could adversely affect our ability to conduct business, including disrupting our supply of raw materials, damaging our manufacturing facilities or otherwise affecting production, transportation and delivery of our products or affect demand for our products, and the insurance we maintain may not be adequate to cover our losses resulting from any business interruption resulting from a natural disaster or other severe weather events.

Although preventative measures may help to mitigate damage, such measures could be costly, and any disaster could adversely affect our ability to conduct business, including disrupting our supply of raw materials, damaging our manufacturing facilities or otherwise affecting production, transportation and delivery of our products, or affect demand for our products, and the insurance we maintain may not be adequate to cover our losses resulting from any business interruption resulting from a natural disaster or other severe weather events.

The loss of, or significant reduction in, purchases by Airbus or Boeing or any of our other significant customers could materially impair our business, operating results, prospects and financial condition.

The loss of, or significant reduction in, purchases by Airbus or Boeing or any of our other significant customers could materially impair our business, operating results, 14 prospects and financial condition.

If we are unable to hire and retain a sufficient number of trained personnel, or we experience a significant or prolonged work stoppage in such an environment, including due to salary negotiation challenges with employees covered by collective bargaining or works’ council agreements, our ability to secure new business and our results of operations and financial condition could be adversely affected.

If we are unable to hire and retain a sufficient number of trained personnel, or we experience a significant or prolonged work stoppage in such an environment, including due to salary negotiation challenges with employees covered by collective bargaining or works council agreements, our ability to secure new business and our results of operations and financial condition could be adversely affected.

Additionally, we 20 have incurred, and expect to continue to incur, costs to comply with increased cybersecurity protections and standards of our customers, including the U.S. government.

Additionally, we have incurred, and expect to continue to incur, costs to comply with increased cybersecurity protections and standards of our customers, including the U.S. government.

The enforceability of similar choice of forum provisions in other companies’ organizational documents has been challenged in legal proceedings, and it is possible that, in connection with claims arising under federal securities laws or otherwise, a court could find the exclusive forum provision contained in the amended and restated bylaws to be inapplicable or unenforceable.

We periodically need to renegotiate our collective bargaining and works’ council agreements, and any failure to negotiate new agreements or extensions in a timely manner could result in work stoppages or slowdowns. Our ability to hire, train, assimilate and retain a qualified workforce has also been impacted by the ongoing labor market disruptions.

We periodically need to renegotiate our collective bargaining and works council agreements, and any failure to negotiate new agreements or extensions in a timely manner could result in work stoppages or slowdowns. Our ability to hire, train, assimilate and retain a qualified workforce has also been impacted by the ongoing labor market disruptions.

Additionally, we have invested significant resources in our international operations, and we intend to continue to make such investments in the 18 future.

Additionally, we have invested significant resources in our international operations, and we intend to continue to make such investments in the future.

Department of Defense budget to remain unchanged or to decline. If we fail to comply with government procurement, including information security, laws and regulations, we could lose business and be liable for various penalties or sanctions.

Department of Defense budget to remain unchanged or to decline. If we fail to comply with government procurement laws and regulations, including those related to information security, we could lose business and be liable for various penalties or sanctions.

We operate our business in regions subject to natural disasters and other severe weather events and any disruption to our business resulting from such events will adversely affect our revenue and results of operations . We operate, and rely on suppliers who operate, in regions subject to natural disasters and other severe weather events.

We operate our business in regions subject to natural disasters and other severe weather events and any disruption to our business resulting from such events could adversely affect our revenue and results of operations . We operate, and rely on suppliers who operate, in regions subject to natural disasters and other severe weather events.

In addition, we face information technology security and fraud risks due to our increased reliance on remote work, which may create additional information security vulnerabilities and/or magnify the impact of any disruption in information technology systems.

In addition, we face information technology security and fraud risks due to increased remote work, which may create additional information security vulnerabilities and/or magnify the impact of any disruption in our information technology systems.

Reductions in demand for commercial aircraft or a delay in deliveries could result from many factors, including delays in the startup or ramp-up of new programs, suspension or discontinuation of current commercial aircraft programs, changes in the propensity for the general public to travel by air (including as a result of terrorist events and any subsequent military response, a public health crisis, such as the COVID-19 pandemic, or a global conflict, such as the Russia/Ukraine conflict), a significant change in the cost of aviation fuel, a change in technology resulting in the use of alternative materials, environmental concerns (including climate change), consolidation and liquidation of airlines, availability of funding for new aircraft purchases or leases, inventory corrections or disruptions throughout the supply chain and slower macroeconomic growth.

Reductions in demand for commercial aircraft or a delay in deliveries could result from many factors, including delays in the startup or ramp-up of new programs, suspension or discontinuation of current commercial aircraft programs, changes in the propensity for the general public to travel by air (including as a result of terrorist events and any subsequent military response, a public health crisis or a global conflict), a significant change in the cost of aviation fuel, a change in technology resulting in the use of alternative materials, environmental concerns (including climate change), consolidation and liquidation of airlines, availability of funding for new aircraft purchases or leases, inventory corrections or disruptions throughout the supply chain and slower macroeconomic growth.

In 2022, in addition to labor shortages, we also experienced an increase in labor costs in the countries in which we operate due to rising inflation rates and localized labor market disruptions. Further increases in labor costs could significantly reduce our profit margins if we are unable to flow such costs through to our customers.

In 2022 and 2023, in addition to labor shortages, we also experienced increases in labor costs in the countries in which we operate due to rising inflation rates and localized labor market disruptions. Further increases in labor costs could significantly reduce our profit margins if we are unable to flow such costs through to our customers.

The occurrence of material operational problems or interruptions, including but not limited to, as a result of the failure of key equipment, a quality or financial failure of a sole source or major supplier, the effects of natural disasters or climate change-related events, the continued impact of the COVID-19 pandemic or other public health crises, ongoing supply chain disruptions and supply shortages, energy disruption caused by the Russia/Ukraine conflict, the inability to install, staff and/or qualify necessary capacity, political or social unrest, the failure to achieve planned manufacturing improvements or other causes, or any other inability to meet customer requirements, may have a material adverse effect on the productivity and profitability of a particular manufacturing facility, and could have a material effect on the Company as a whole.

The occurrence of material operational problems or interruptions, including, but not limited to, as a result of the failure of key equipment, a quality or financial failure of a sole source or major supplier, the effects of natural disasters or climate change-related events, the impact of any public health crises, ongoing supply chain disruptions and supply shortages, energy disruption caused by ongoing global conflict, the inability to install, staff and/or qualify necessary capacity, political or social unrest, the failure to achieve planned manufacturing improvements or other causes, or any other inability to meet customer requirements, may have a material adverse effect on the productivity and profitability of a particular manufacturing facility, and could have a material effect on the Company as a whole.

Certain provisions of our charter, bylaws, and of the DGCL have anti-takeover effects and could delay, discourage, defer or prevent a tender offer or takeover attempt that a stockholder might consider to be in the stockholders’ best interests .

Certain provisions of our certificate of incorporation, bylaws, and the DGCL have anti-takeover effects and could delay, discourage, defer or prevent a tender offer or takeover attempt that a stockholder might consider to be in the stockholders’ best interests .

The failure to comply with such customer requirements, or similar types of requests, could adversely affect our relationships with some customers, which in turn could adversely affect our business, financial condition, results of operations and cash flows.

The failure to comply with customer environmental or sustainability requirements, or similar types of requests, could adversely affect our relationships with such customers, which in turn could adversely affect our business, financial condition, results of operations and cash flows.

Certain provisions of our charter and bylaws and the DGCL may have the effect of delaying or preventing changes in control if our board of directors determines that such changes in control are not in the best interests of the Company and its stockholders.

Certain provisions of our certificate of incorporation and bylaws and the DGCL may have the effect of delaying or preventing changes in control if our board of directors determines that such changes in control are not in the best interests of the Company and its stockholders.

Our business and results of operations are subject to numerous risks of doing business internationally including: (a) general economic, political, legal, social and health conditions unfavorable to our growth strategy, including the impact of a public health crisis, such as the COVID-19 pandemic, or the impact of rising inflation rising and other global economic conditions on labor costs and availability; (b) longer payment cycles of foreign customers or challenges in enforcing agreements and collecting receivables through some foreign legal systems; (c) the cost of compliance with international trade laws of all of the countries in which we do business, including export control laws, relating to sales and purchases of goods and equipment and transfers of technology; (d) government actions having a direct or indirect adverse impact on our international business and market opportunities, including, but not limited to, tariffs and other trade restrictions imposed by the United States, China and other jurisdictions; (e) adverse tax consequences, such as fluctuating tax rates, withholding requirements on foreign earnings or limitations on repatriations of earnings; and (f) the potential difficulty in enforcing our intellectual property rights in some foreign countries, and the potential for the intellectual property rights of others to affect our ability to sell products in certain markets.

Our business and results of operations are subject to numerous risks of doing business internationally including: (a) general economic, political, legal, social and health conditions unfavorable to our growth strategy, including the impact of rising inflation and other global economic conditions on labor and supply costs and availability, changes in currency exchange rates, geopolitical conditions and global conflicts; (b) longer payment cycles of foreign customers or challenges in enforcing agreements and collecting receivables through certain foreign legal systems; (c) the cost of compliance with international trade laws of all of the countries in which we do business, including export control laws, relating to sales and purchases of goods and equipment and transfers of technology; (d) government actions having a direct or indirect adverse impact on our international business and market opportunities, including, but not limited to, tariffs and other trade restrictions imposed by the United States, China and other jurisdictions; (e) adverse tax consequences, such as fluctuating tax rates, withholding requirements on foreign earnings or limitations on repatriations of earnings; and (f) the potential difficulty in enforcing our intellectual property rights in certain foreign countries, and the potential for the intellectual property rights of others to affect our ability to sell products in certain markets.

The unauthorized use of our confidential or proprietary business information could harm our competitive position and reputation, reduce the value of our investment in research and development and other strategic initiatives, breach contractual commitments to our customers, or otherwise adversely affect our business.

The unauthorized use of our confidential or proprietary business information could harm our competitive position and reputation, reduce the value of our investment in research and development and other strategic initiatives, cause us to breach contractual commitments to our customers or other third parties, or otherwise adversely affect our business.

In addition, failure to comply with applicable regulations could result in fines and could affect our business, financial condition, results of operations and cash flows. We could also face increased costs related to defending and resolving legal claims and other litigation related to climate change and the alleged impact of our operations on climate change.

In addition, failure to comply with applicable regulations could result in fines or government investigations or actions, which could affect our business, financial condition, results of operations and cash flows. We could also face increased costs related to defending and resolving legal claims and other litigation related to climate change and the alleged impact of our operations on climate change.

In particular, concerns about the relationship between greenhouse gases and global climate change, and an increased focus on carbon neutrality, may result in additional regulations at the national and international level to monitor, regulate, control and tax emissions of carbon dioxide and other greenhouse gases.

In addition, concerns about the relationship between greenhouse gases and global climate change, and an increased focus on carbon neutrality, has resulted, and may continue to result, in additional regulations at the national and international level to monitor, regulate, control and tax emissions of carbon dioxide and other greenhouse gases.

In addition to regulatory compliance, growing customer environmental and sustainability requirements, including procurement policies that include social and emissions reduction or other environmental standards and requirements that their suppliers are required comply with, as well as sustainability goals that we have adopted, could cause us to alter our manufacturing, operations or equipment processes, and incur substantial expense to meet these requirements.

In addition to compliance obligations related to climate change, growing customer environmental and sustainability requirements, including procurement policies that include social and emissions reduction or other environmental standards and requirements that suppliers are required comply with, as well as sustainability goals and targets that we have adopted, could cause us to alter our manufacturing, operations or equipment processes, and incur substantial expense to meet these requirements.

We may also be required to make additional investments in our facilities and equipment, change our manufacturing processes, obtain substitute materials which may cost more or be less available, fund offset projects, or undertake other costly activities.

We expect we will be required to make additional investments in our facilities and equipment, change our manufacturing processes, obtain substitute materials, which may cost more or be less available or harder to source, fund offset projects, or undertake other costly activities.

Compliance with greenhouse gas and climate change initiatives may result in additional costs to us, including increased energy, transportation and raw material costs, additional taxes, reduced emission allowances or additional restrictions on production or operations.

Compliance with greenhouse gas and climate change initiatives has resulted, and may in the future result in, additional costs to us, including increased energy, transportation and raw material costs, additional taxes, 18 reduced emission allowances or additional restrictions on production or operations.

We have substantial international operations subject to uncertainties which could affect our operating results. We believe that revenue from sales outside the U.S. will continue to account for a material portion of our total revenue for the foreseeable future. In 2022, 48% of our production and 58% of our customer sales occurred outside of the United States.

We have substantial international operations subject to uncertainties that could affect our operating results. We believe that revenue from sales outside the U.S. will continue to account for a material portion of our total revenue for the foreseeable future. In 2023, 50% of our production and 59% of our customer sales occurred outside of the United States.

We have in the past and will continue in the future to assess potential manufacturing and operational risks related to climate change, including risk of exposure to significant rainfall, flooding, hurricane or tornado events within our supply chain.

We have in the past and will continue in the future to assess potential manufacturing and operational risks related to climate change, including risk of exposure to rising sea levels and significant rainfall, flooding, wildfire, drought, earthquake, hurricane or tornado events within our supply chain.

A number of governmental bodies have introduced or are contemplating legislative or regulatory changes in response to climate change, including regulating greenhouse gas emissions, and there continues to be a lack of consistent climate legislation, which creates economic and regulatory uncertainty.

A number of governmental bodies have introduced or are contemplating legislative or regulatory changes in response to climate change, including regulating greenhouse gas emissions. The continued lack of consistent climate legislation creates economic and regulatory uncertainty.

Our business has historically been dependent on a highly trained workforce because of the complex nature of our products. Furthermore, as of December 31, 2022, approximately 22% of employees in the United States were unionized and the majority in Europe were represented by a works’ council.

Our business has historically been dependent on a highly trained workforce because of the complex nature of our products. As of December 31, 2023, approximately 30% of employees in the United States were unionized and the majority in Europe were represented by a works council.

Achieving this objective may be difficult due to many factors, including fluctuations in global 17 economic and industry conditions, management changes, increasing local and global competition for talent, particularly due to the increase in remote working opportunities resulting from the COVID-19 pandemic, the availability of qualified employees, restructuring and alignment activities (including workforce reductions), and the attractiveness of our compensation and benefit programs.

Achieving this objective may be difficult due to many factors, including fluctuations in global economic and industry conditions, such as the impact of inflation, management changes, increasing local and global competition for talent, particularly due to the increase in remote working opportunities, the availability of qualified employees, restructuring and alignment activities (including workforce reductions), and the attractiveness of our compensation and benefit programs.

Any future determination to pay, maintain or increase cash dividends will be at the discretion of our board of directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements and contractual or legal restrictions, including the requirements of our revolving credit facility and other financing agreements to which we may be a party.

We currently pay quarterly dividends; however, our board of directors regularly evaluates our capital allocation strategy and dividend policy, and any future determination to pay, maintain or increase cash dividends will be at the discretion of our board of directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements and 20 contractual or legal restrictions, including the requirements of our revolving credit facility and other financing agreements to which we may be a party.

From time to time, we have responded to changes in our industry and the markets we serve, or other changes in our business, by restructuring or aligning our operations, including actions taken during 2020 and 2021 as a result of the impact of the COVID-19 pandemic, the closure of our Windsor, Colorado and Tianjin, China wind energy prepreg production facilities in 2020 and 2022, respectively, and the movement of our Research and Technology Center from Dublin, California to Salt Lake City, Utah.

From time to time, we have responded to changes in our industry and the markets we serve, or other changes in our business, by restructuring or aligning our operations, including the closure of our Windsor, Colorado and Tianjin, China wind energy prepreg production facilities in 2020 and 2022, respectively, and the movement of our Research and Technology Center from Dublin, California to Salt Lake City, Utah.

The outcome of new legislation or regulation in the U.S. and other jurisdictions in which we operate may result in new or additional requirements and fees or restrictions on certain activities.

The outcome of new legislation or regulation in the U.S. and other jurisdictions in which we operate has resulted in, and may in the future result in, new or additional requirements, including mandatory disclosure requirements, and fees or restrictions on certain activities.

Department of Defense budgets could be negatively impacted by several factors, including, but not limited to, a change in defense spending policy as a result of the current political environment or otherwise, military aid to Ukraine, the U.S. government’s budget deficits, other spending priorities, increased defense regulatory requirements resulting in additional expenses, the cost of sustaining the U.S. military presence internationally and possible political pressure to reduce military spending, each of which could cause the U.S.

Department of Defense budgets could be negatively impacted by several factors, including, but not limited to, a change in defense spending policy as a result of the current political environment or otherwise, military aid to countries experiencing global conflict, the U.S. government’s budget deficits or breach of the debt ceiling, other spending priorities, increased defense regulatory requirements resulting in additional expenses, the cost of sustaining the U.S. military presence internationally, potential political pressure to reduce military spending and future potential government shutdowns, each of which could cause the U.S.

For the years ended December 31, 2022 and December 31, 2021, approximately 38% and 33% of our total consolidated sales, respectively, were to Airbus, and its related subcontractors and approximately 14% and 16% of our total consolidated sales, respectively, were to Boeing and its related subcontractors.

For the years ended December 31, 2023 and December 31, 2022, approximately 39% and 38% of our total consolidated sales, respectively, were to Airbus, and its related subcontractors and approximately 15% and 14% of our total consolidated sales, respectively, were to Boeing and its related subcontractors.

We cannot provide any assurance that we will realize the intended benefits from any such transactions. The process of integrating acquired businesses into our existing operations may result in unforeseen operating difficulties and may require additional financial resources and attention from management that would otherwise be available for the ongoing development or expansion of our existing operations.

The process of integrating acquired businesses into our existing operations may result in unforeseen operating difficulties and may require additional financial resources and attention from management that would otherwise be available for the ongoing development or expansion of our existing operations.

While we enter into currency hedge agreements to mitigate these types of fluctuations, we cannot remove all fluctuations or hedge all exposures, or we may not be successful in hedging our exposure, and our earnings are impacted by changes in currency exchange rates. We currently do not have political risk insurance in the countries in which we conduct business.

While we enter into currency hedge agreements in an attempt to mitigate these types of fluctuations, we cannot remove all fluctuations or hedge all exposures, or we may not be successful in hedging our exposure, and our earnings are impacted by changes in currency exchange rates.

During 2021 and 2022, as a result of the challenges created by global supply and transportation issues, the Russia/Ukraine conflict, the COVID-19 pandemic and market volatility, we experienced supply disruptions and cost increases and anticipate that supply disruptions and material shortages, as well as cost increases, will continue.

During recent years, as a result of the challenges created by global supply and transportation constraints, ongoing global conflict, the COVID-19 pandemic and market volatility, we experienced supply disruptions and cost increases and anticipate that the risk of supply disruptions and material shortages, as well as cost increases, may continue.

We have concentrated customers in the Commercial Aerospace and the Space & Defense markets. In the Commercial Aerospace market, approximately 79%, and in the Space & Defense market, approximately 21%, of our 2022 sales were made to Airbus and Boeing and their related subcontractors.

In the Commercial Aerospace market, approximately 79%, and in the Space & Defense market, approximately 20%, of our 2023 sales were made to Airbus and Boeing and their related subcontractors.

Future delays, or production cuts arising from the impact of the COVID-19 pandemic, any future public health crisis or other macroeconomic event in these or other major new customer programs could similarly impact our results. In addition, our customers continue to emphasize the need for cost reduction or other improvements in contract terms throughout the supply chain.

Future delays, or production cuts arising from the impact of macroeconomic events, geopolitical conditions, global conflict or supply chain and labor disruptions, in these or other major new customer programs could similarly impact our results. In addition, our customers continue to emphasize the need for cost reduction or other improvements in contract terms throughout the supply chain.

To the extent there are any further significant deferrals, cancellations, or reductions in demand results in decreased aircraft build rates, including as a result of the continued impact of the COVID-19 pandemic, it would have a further negative impact on sales for our Commercial Aerospace products and as a result reduce our operating income.

To the extent there are significant deferrals, cancellations, or reductions in demand that result in decreased aircraft build rates, it would have a negative impact on sales for our Commercial Aerospace products and as a result reduce our operating income. Approximately 60% of our sales for 2023 were derived from sales to the Commercial Aerospace industry.

There can be no assurance that we will be able to make the technological advances necessary to maintain such competitive advantages or that we can recover major research and development expenses.

There can be no assurance that we will be able to make the technological advances necessary to maintain such competitive advantages or that we can recover major research and development expenses. Acquisitions, divestitures, mergers, business combinations or joint ventures may entail certain operational and financial risks.

Our operations require the handling, use, storage, transport and disposal of certain regulated materials and wastes. As a result, we are subject to various laws and regulations pertaining to pollution and protection of the environment, health, and safety.

We could be adversely affected by environmental and safety requirements, as well as legal, regulatory or market measures to address climate change. Our operations require the handling, use, storage, transport and disposal of certain regulated materials and wastes. As a result, we are subject to various laws and regulations pertaining to pollution and protection of the environment, health, and safety.

In addition, although we are not experiencing direct material adverse effects on our business resulting from the conflict between Russia and Ukraine, the global implications, including increased inflation, escalating energy costs, constrained raw material availability, and thus increasing costs, as well as embargos on flights from Russian airlines, are impacting the global economy and the aerospace industry in particular.

In addition, although we are not experiencing direct material adverse effects on our business resulting from ongoing global conflicts, the global implications, including increased inflation, escalating energy costs, and constrained raw material availability, and thus increasing costs, as well as embargos on flights from certain countries, are impacting the global economy and the aerospace industry in particular. 17 Fluctuations in currency exchange rates may influence the profitability and cash flows of our business.

These cyberattacks, which could be related to industrial or foreign government espionage, activism, or financial motivations, include attempting to covertly introduce malware to our systems, performing reconnaissance, impersonating authorized users, and stealing, corrupting, or restricting our access to data, among other activities.

These cyberattacks, which could be related to industrial or foreign government espionage, activism, or financial motivations, continue to evolve and become more sophisticated and include attempting to covertly introduce malware to our systems, performing reconnaissance, phishing and other means of social engineering, impersonating authorized users, and stealing, corrupting, restricting our access to data or otherwise compromising the integrity, confidentiality, and/or availability of our systems hardware and networks and the information on them, among other activities.

Efforts to mitigate restrictions on the supply or price increases of these raw materials by long-term purchase agreements, productivity improvements, hedging or by flowing through cost increases to our customers may not be successful.

Efforts to mitigate restrictions on the supply or price increases of these raw materials through long-term purchase agreements, productivity improvements, multi-source qualifications, use of alternative materials, hedging or flowing through cost increases to our customers may not be successful. In addition, increasing prices of our products could put such products at a competitive disadvantage.

From time to time, we experience cyberattacks on our information technology systems, including vendor-hosted systems, which are becoming more sophisticated and could have a material impact on us.

From time to time, we experience attempted cyberattacks on our information technology systems, either directly or indirectly via our supply chain or third-party vendors, which are becoming more sophisticated and could have a material impact on us.

Any deterioration in any of the cyclical markets we serve could adversely affect our financial performance and operating results, as occurred during 2020 and 2021 with respect to the Commercial Aerospace industry.

Any deterioration in any of the cyclical markets we serve could adversely affect our financial performance and operating results.

Even if successfully integrated, the acquired business may not achieve the results we expect or produce expected benefits in the time frame planned. In addition, we may not be able to successfully complete any strategic divestures in a timely manner, or at all.

Even if successfully integrated, the acquired business may not achieve the results we expect or produce expected benefits in the time frame planned.

In addition, from time to time, we communicate certain initiatives or goals regarding sustainability/ESG matters. Although we intend to meet these commitments, we may be required to expend significant resources to do so, which could increase our operational costs.

Although we intend to meet these commitments, we may be required to expend significant resources to do so, which could increase our operational costs.

Our customers may require us to implement sustainability/ESG responsibility procedures or standards before they continue to do business with us. Additionally, we may face reputational challenges in the event that our sustainability/ESG policies, practices and metrics do not meet the standards set by certain constituencies, which are often inconsistent in approach.

Additionally, we may face reputational challenges in the event that our sustainability/ESG policies, practices and metrics do not meet the standards set by certain constituencies, which are often inconsistent in approach. In addition, from time to time, we communicate certain initiatives, targets or goals regarding sustainability/ESG matters.

Risks Related to Our Common Stock We cannot make any guarantees with respect to payment of dividends on, or repurchases of, our common stock. In connection with the COVID-19 pandemic, in April 2020, we suspended our dividend payments and stock repurchases.

Risks Related to Our Common Stock We cannot make any guarantees with respect to payment of dividends on, or repurchases of, our common stock.

These restructuring and/or alignment activities generally result in charges and expenditures that may adversely affect our financial results for one or more periods. Restructuring and/or alignment activities can also create unanticipated consequences, such as instability or distraction among our workforce, and we cannot provide any assurance that any restructuring or alignment efforts that we undertake will be successful.

Restructuring and/or alignment activities can also create unanticipated consequences, such as instability or distraction among our workforce, and we cannot provide any assurance that any restructuring or alignment efforts that we undertake will result in the intended benefits.

Any restrictions on the supply, or an increase in the cost, including any impact of inflation or resulting from tariffs, of our raw materials could significantly reduce our profit margins.

Any restrictions on supply resulting from geopolitical conditions, extreme weather events, availability of global logistics, increase in the cost of our raw materials including increases resulting from inflation or tariffs, or other unforeseen disruptions in the supply chain could significantly reduce our profit margins.

A downturn in these markets could occur at any time as a result of events that are industry specific, such as aircraft production slowdown resulting from the impact of the COVID-19 pandemic on air travel, the grounding and/or regulatory scrutiny of the Boeing 737 MAX and the Boeing 787, or macroeconomic events, such as an economic downturn or recession.

A downturn in these markets could occur at any time as a result of events that are industry specific, such as aircraft production slowdown resulting from the impact of a public health crisis on air travel, the grounding, regulatory scrutiny and/or suspension or discontinuation of aircraft in which our products are used, or other macroeconomic events, such as geopolitical conditions, global conflict, political unrest or terrorist attacks, or an economic downturn or recession.

We expect to continue to explore complementary mergers, acquisitions, investments and joint ventures and may also pursue divestures or closures of business lines or investments that do not fit with our core strategy. We may also engage in further vertical integration.

Over the past several years, we have completed strategic acquisitions of complementary manufacturing companies, as well as strategic investments in companies and divestitures of certain interests. We expect to continue to explore complementary mergers, acquisitions, investments and joint ventures and may also pursue additional divestures or closures of business lines or investments that do not fit with our core strategy.

There can be no assurance that we will repurchase stock at favorable prices. As described above, activity under this program has been suspended, and there can be no assurance whether or when activity will resume. If resumed, the repurchase program may be suspended or terminated at any time and, even if fully implemented, may not enhance long-term stockholder value.

There can be no assurance that we will repurchase stock at favorable prices. We resumed repurchases under our share repurchase program in the third quarter of 2023, following suspension of repurchases in April 2020; however, the repurchase program may be suspended or terminated at any time and, even if fully implemented, may not enhance long-term stockholder value.

Space and defense production that has occurred in recent years may not be sustained, individual programs important to Hexcel may be cancelled, production may not continue to grow and the increased demand for composite-intensive programs may not continue. In addition, the production of military aircraft depends upon defense budgets and the related demand for defense and related equipment.

Reductions in space and defense spending could result in a decline in our sales. Space and defense production that has occurred in recent years may not be sustained, individual programs important to Hexcel may be cancelled, production may not continue to grow or may decrease and the increased demand for composite-intensive programs may not continue.

The program, and any purchases under the program, may also be impacted by proposed SEC rules relating to company share repurchases, which are currently expected to be adopted in 2023. 21 Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for certain legal actions between us and our stockholders, which could discourage lawsuits against the Company and our directors and officers .

Our amended and restated bylaws (the “bylaws”) provide that the Court of Chancery of the State of Delaware will be the exclusive forum for certain legal actions between us and our stockholders, which could discourage lawsuits against the Company and our directors and officers .

We continue to update our infrastructure, security tools, planning, employee training and processes to protect against security incidents, including both external and internal threats, and to prevent their occurrence or recurrence.

We continue to update our infrastructure, security tools, planning, employee training and processes to protect against cybersecurity incidents, including both external and internal threats, and to prevent their occurrence or recurrence. We have implemented various measures, including technical security controls, employee training, comprehensive monitoring of our networks and systems, maintenance of backup systems and the use of disaster recovery capability.

We may face competition for attractive targets and may not be able to acquire potential targets on terms or at prices acceptable to us, if at all. In addition, these types of transactions may require significant liquidity, which may not be available on terms favorable to us, or at all.

We may also engage in further vertical integration and business restructuring. We may face competition for attractive targets and may not be able to acquire potential targets on terms or at prices acceptable to us, if at all.

Accordingly, these provisions could adversely affect the price of our common stock. 22 ITEM 1B. Unres olved Staff Comments None. 23

Accordingly, these provisions could adversely affect the price of our common stock.

Approximately 29% of our sales in 2022 were to the Space & Defense market, of which approximately 78% were related to military programs in the United States and other countries. In addition to normal business risks, our indirect supply of products to the U.S. government is subject to unique risks largely beyond our control. U.S.

In addition to normal business risks, our indirect supply of products to the U.S. government is subject to unique risks largely beyond our control. The level of U.S. defense spending is hard to predict, and U.S.

While Company personnel have been tasked to detect and investigate such incidents, future cyberattacks could still occur and may lead to data corruption or loss of data and exposure of proprietary and confidential information, disruptions in or damage to critical systems and theft of data, funds, or intellectual property.

Such cyberattacks could lead to data corruption or loss of data and exposure of proprietary and confidential information, disruptions in or damage to critical systems, production downtimes or operational delays, and theft of data, funds, or intellectual property, and we may be unable to mitigate potential consequences of these attacks.

The level of purchases and product mix demanded by our customers is often affected by events beyond their control, including general economic conditions, demand for their products, conditions in the airline industry, disruptions in deliveries, business disruptions, strikes and other factors, including the previous grounding of the Boeing 737 MAX by the Federal Aviation Administration and other regulators and the regulatory scrutiny of the Boeing 787 causing production delays, and the effects of the COVID-19 pandemic on air travel and general economic conditions.

The level of purchases and product mix demanded by our customers is often affected by events beyond their control, including general economic conditions, demand for their products, conditions in the airline industry, regulatory scrutiny and/or suspension or discontinuation of aircraft, disruptions in deliveries, business disruptions, strikes and other factors, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

While we carefully consider these risks when evaluating our international operations, we cannot provide assurance that we will not be materially adversely affected as a result of such risks. We could be adversely affected by environmental and safety requirements, as well as legal, regulatory or market measures to address climate change.

We currently do not have political risk insurance in the countries in which we conduct business. While we carefully consider these risks when evaluating our international operations, we cannot provide assurance that we will not be materially adversely affected as a result of such risks.

An intrusion may also cause operational stoppages or result in fines, penalties, litigation or governmental investigations and proceedings, diminished competitive advantages through reputational damages and increased operational costs.

If such parties fail to deter, detect or report cyber incidents in a timely manner, we may suffer from financial and other harm, including to our information, operations, financial results, performance, employees and reputation. 19 An intrusion may also result in fines, penalties, litigation or governmental investigations and proceedings, increased mitigation and remediation expenses, diminished competitive advantages through reputational damages and increased operational costs.

In addition to the foregoing, many of the risk factors disclosed herein have been, and we anticipate may continue to be further, heightened or exacerbated by the impact of the COVID-19 pandemic. Our results of operations would be adversely affected by a shortage of trained personnel or work stoppages, and may be adversely affected by increasing labor costs.

While we continue to work proactively to mitigate these challenges, if we are unable to do so successfully, our financial position, results of operations and/or cash flows could be materially adversely affected. Our results of operations would be adversely affected by a shortage of trained personnel or work stoppages, and may be adversely affected by increasing labor costs.

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Item 2. Properties

Properties — owned and leased real estate

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2022 filing

2023 filing

Biggest changeWe also lease portions of the facilities located in Casa Grande, Arizona; Pottsville, Pennsylvania; Parla, Spain; and Leicester, England. In November 2022, we decided to close our 89,900 square foot Tianjin plant facility as the site completed its final manufacturing contract for a primary wind energy customer earlier in the year.

Biggest changeWe lease portions of the facilities located in Casa Grande, Arizona; Pottsville, Pennsylvania; Parla, Spain; and Leicester, England. In addition to the facility in Amesbury, Massachusetts we purchased in 2023, we also lease land and a building at another location in Amesbury. We own all other remaining manufacturing facilities.

Manufacturing Facilities Facility Location Segment Principal Products Total Square Footage United States: Amesbury, Massachusetts Engineered Products Microwave and RF Absorbing Composite Materials 202,100 Burlington, Washington Engineered Products Engineered Honeycomb Parts 252,124 Casa Grande, Arizona Composite Materials Honeycomb and Honeycomb Parts 443,123 Decatur, Alabama Composite Materials PAN Precursor (used to produce Carbon Fibers) 819,863 Kent, Washington Engineered Products Composite structures 486,400 Pottsville, Pennsylvania Engineered Products Engineered Honeycomb Parts 180,305 Salt Lake City, Utah Composite Materials Carbon Fibers; Prepregs 1,194,070 Seguin, Texas Composite Materials Fabrics; Specialty Reinforcements 228,815 South Windsor, Connecticut Engineered Products 3D printed parts 32,600 International: Casablanca, Morocco Engineered Products Engineered Honeycomb Parts 260,875 Dagneux, France Composite Materials Prepregs 213,698 Duxford, England Composite Materials Prepregs; Adhesives; Honeycomb and Honeycomb Parts 417,109 Illescas, Spain Composite Materials Carbon Fibers 58,986 Leicester, England Composite Materials Lightweight Multiaxials Fabrics 134,657 Les Avenières, France Composite Materials Fabrics; Specialty Reinforcements 490,000 Neumarkt, Austria Composite Materials Prepregs 159,791 Parla, Spain Composite Materials Prepregs 147,186 Roussillon, France Composite Materials PAN Precursor and Carbon Fibers 222,170 Stade, Germany Composite Materials Prepregs 154,268 Vert-le-Petit, France Composite Materials Pultruded profiles; Prepregs and Adhesives 70,944 Welkenraedt, Belgium Engineered Products Engineered Honeycomb Parts 235,326 We lease the land and buildings in Amesbury, Massachusetts and South Windsor, Connecticut, and the land on which the Tianjin, China; Burlington, Washington and Roussillon, France facilities are located.

Manufacturing Facilities Facility Location Segment Principal Products Total Square Footage United States: Amesbury, Massachusetts Engineered Products Microwave and RF Absorbing Composite Materials 202,100 Burlington, Washington Engineered Products Engineered Honeycomb Parts 252,124 Casa Grande, Arizona Composite Materials Honeycomb and Honeycomb Parts 443,123 Decatur, Alabama Composite Materials PAN Precursor (used to produce Carbon Fibers) 819,863 Kent, Washington Engineered Products Composite structures 486,400 Pottsville, Pennsylvania Engineered Products Engineered Honeycomb Parts 180,305 Salt Lake City, Utah Composite Materials Carbon Fibers; Prepregs 1,194,070 Seguin, Texas Composite Materials Fabrics; Specialty Reinforcements 228,815 South Windsor, Connecticut Engineered Products 3D printed parts 32,600 International: Casablanca, Morocco Engineered Products Engineered Honeycomb Parts 260,875 Dagneux, France Composite Materials Prepregs 213,698 Duxford, England Composite Materials Prepregs; Adhesives; Honeycomb and Honeycomb Parts 417,109 Illescas, Spain Composite Materials Carbon Fibers 58,986 Leicester, England Composite Materials Lightweight Multiaxials Fabrics 134,657 Les Avenières, France Composite Materials Fabrics; Specialty Reinforcements 490,000 Neumarkt, Austria Composite Materials Prepregs 159,791 Parla, Spain Composite Materials Prepregs 147,186 Roussillon, France Composite Materials PAN Precursor and Carbon Fibers 222,170 Stade, Germany Composite Materials Prepregs 154,268 Vert-le-Petit, France Composite Materials Pultruded profiles; Prepregs and Adhesives 70,944 Welkenraedt, Belgium Engineered Products Engineered Honeycomb Parts 235,326 We lease the land and buildings in South Windsor, Connecticut, and the land on which the Burlington, Washington and Roussillon, France facilities are located.

Our research and technology administration and principal laboratories are located in Duxford, England; Les Aveni è res, France; Salt Lake City, Utah and Decatur, Alabama. The following table lists our manufacturing facilities by geographic location, related segment, and principal products manufactured and total square footage. This table does not include manufacturing facilities owned by any of our joint ventures.

Removed

This announcement comes two years after we announced the closure of our wind energy prepreg production facility in Windsor, Colorado which is currently held for sale. We own all other remaining manufacturing facilities.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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2022 filing

2023 filing

Biggest changeITEM 5. Market for Registrant’s Com mon Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Hexcel common stock is traded on the New York Stock Exchange under the symbol HXL. During 2020 the Company repurchased a total of $25 million of shares.

On January 31, 2023, there were 406 holders of record of our common stock. ITEM 6. [ Reserved]

On January 31, 2024, there were 390 holders of record of our common stock. ITEM 6. [ Reserved]

Removed

In response to the COVID-19 pandemic, in April 2020, we announced that we had suspended our dividend payments. On January 26, 2022, the Company announced it was reinstating the quarterly dividend commencing with the first quarter of 2022. We did not make any stock repurchases during 2022.

Added

During 2023 the Company repurchased 423,292 shares of common stock on the open market under our share repurchase plan approved by our Board in 2018 (the “2018 Share Repurchase Plan”), at an average price of $71.17 per share for a total cost of $30.1 million, leaving approximately $187 million available for additional repurchases under the 2018 Repurchase Plan. .

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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2022 filing

2023 filing

Biggest changeITEM 7. Management’s Discu ssion and Analysis of Financial Condition and Results of Operations The information required by Item 7 is contained on pages 31 to 37 of this Annual Report on Form 10-K under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and is incorporated herein by reference.

Biggest changeITEM 7. Management’s Discu ssion and Analysis of Financial Condition and Results of Operations The information required by Item 7 is contained on pages 32 to 38 of this Annual Report on Form 10-K under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and is incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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2022 filing

2023 filing

Biggest changeITEM 7A. Quantitative and Qualit ative Disclosures about Market Risk The information required by Item 7A is contained under the heading “Market Risks” on pages 37 to 38 of this Annual Report on Form 10-K and is incorporated herein by reference.

Biggest changeITEM 7A. Quantitative and Qualit ative Disclosures about Market Risk The information required by Item 7A is contained under the heading “Market Risks” on pages 38 to 39 of this Annual Report on Form 10-K and is incorporated herein by reference.

Top changes in HEXCEL CORP /DE/'s 2023 10-K

Item 1. Business

Item 1A. Risk Factors

Item 2. Properties

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Other HXL 10-K year-over-year comparisons