What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-08-16 compared with 2022-05-17 · 79 added, 55 removed, 155 unchanged (46% of the section changed)

15 unchanged sentences

The ongoing effects of the COVID-19 pandemic, including, but not limited to, labor-related impacts, supply chain disruption and consumer behavior, will determine the continued significance of the impact of the COVID-19 pandemic to our operating results and financial position.

As of April 2, 2022, the Company owned and operated 17 restaurants and bars, 17 fast food concepts and catering operations, exclusively in the United States, that have similar economic characteristics, nature of products and service, class of customer and distribution methods.

As of July 2, 2022, the Company owned and operated 17 restaurants and bars, 17 fast food concepts and catering operations, exclusively in the United States, that have similar economic characteristics, nature of products and service, class of customer and distribution methods.

The Company believes it meets the criteria for aggregating its operating segments into a single reporting segment in accordance with applicable accounting guidance.

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Under this method certain years will contain 53 weeks.

The periods ended April 2, 2022 and April 3, 2021 each included 13 and 26 weeks.

The periods ended July 2, 2022 and July 3, 2021 each included 13 and 39 weeks.

The Company has substantial fixed costs that do not decline proportionally with sales.

8 unchanged sentences

Results of Operations

The Company’s operating income (as set out below) for the 13 and 26 weeks ended April 2, 2022, as compared to the same periods of April 3, 2021 increased primarily as a result of all of our restaurants operating with no dining restrictions in the current period in comparison to the prior period as a result of government mandates in connection with the COVID-19 pandemic combined with a modest recovery in our event business in Washington, D.C.

and New York City in the current period.

The following table summarizes the significant components of the Company’s operating results for the 13- and 26-week periods ended April 2, 2022 and April 3, 2021:

The Company’s operating income for the 13 weeks ended July 2, 2022, as compared to the prior period increased primarily as a result of a 23.9% increase in sales partially offset by increases in commodity prices and other high-volume items caused by inflation, increased labor costs in connection with ongoing COVID-related labor challenges and percentage rents paid on higher sales in the current period.

The Company’s operating income for the 39 weeks ended July 2, 2022, as compared to the prior period increased primarily as a result of a 53.6% increase in sales as all of our restaurants were operating with no dining restrictions in the current period in comparison to the prior period as a result of government mandates in connection with the COVID-19 pandemic.

The following table summarizes the significant components of the Company’s operating results for the 13- and 39-week periods ended July 2, 2022 and July 3, 2021:

13 Weeks Ended Variance 39 Weeks Ended Variance

2022 April 3,

2021 $ % April 2,

2022 April 3,

2021 $ % July 2,

(in thousands) (in thousands)

10 unchanged sentences

Total costs and expenses 47,797 37,852 9,945 26.3 % 128,349 88,722 39,627 44.7 %

OPERATING INCOME (LOSS) $ 227 $ (1,497) $ 1,724 115.2 % $ 3,018 $ (4,803) $ 7,821 162.8 %

During the 13-week period ended April 2, 2022, revenues increased 53.6% as compared to revenues in the 13-week period ended April 3, 2021.

This increase resulted primarily from all of our restaurants operating with no dining restrictions in the current period in comparison to the prior period as a result of government mandates in connection with the COVID-19 pandemic.

During the 26-week period ended April 2, 2022, revenues increased 81.4% as compared to revenues in the 26-week period ended April 3, 2021.

This increase also resulted primarily from all of our restaurants operating with no dining restrictions in the current period in comparison to the prior period as a result of government mandates in connection with the COVID-19 pandemic.

OPERATING INCOME $ 5,421 $ 5,113 $ 308 6.0 % $ 8,440 $ 309 $ 8,131 2631.4 %

During the 13-week period ended July 2, 2022, revenues increased 23.9% as compared to revenues in the 13-week period ended July 3, 2021.

This increase resulted primarily from increased customer traffic in Las Vegas, targeted menu price increases and in New York and Washington, D.C.

strong revenues from our event business in the current period.

During the 39-week period ended July 2, 2022, revenues increased 53.6% as compared to revenues in the 39-week period ended July 3, 2021.

This increase also resulted primarily from increased customer traffic at all of our properties as they are operating with no dining restrictions in the current period in comparison to the prior period where there were restrictions as a result of government mandates in connection with the COVID-19 pandemic combined with targeted menu price increases and in New York and Washington, D.C.

strong revenues from our event business in the current period.

Food and Beverage Same-Store Sales

On a Company-wide basis, same-store sales increased 54.0% during the 13 weeks ended April 2, 2022 as compared to the same period of last year as follows:

On a Company-wide basis, same-store sales increased 21.7% during the 13 weeks ended July 2, 2022 as compared to the same period of last year as follows:

13 Weeks Ended Variance

2022 April 3,

(in thousands)

10 unchanged sentences

Food and beverage sales $ 52,069 $ 42,137

On a Company-wide basis, same-store sales increased 79.6% during the 26 weeks ended April 2, 2022 as compared to the same period of last year as follows:

The increases in company-wide same-store sales for the 13 weeks ended July 2, 2022 as compared to the prior period were driven primarily by increased customer traffic and targeted menu price increases in Las Vegas, New York, Washington, D.C.

and Atlantic City, NJ as the impact of the COVID-19 pandemic continues to subside.

In New York and Washington, D.C., the current period also benefited from very strong revenues from our event business in the current period.

Same-store sales in Connecticut decreased 38.8% due to the continued disruption to our business as a result of its relocation within the Foxwoods Resort and Casino where our property is located.

Same-store sales in Alabama increased 3.1% primarily as a result of increased traffic due to closure of several competitors.

Same-store sales in Florida decreased 4.7% primarily as a result of lower traffic in the current period as the prior period benefited from outsized volumes as a result of the sudden population increase Southeast Florida as a result of the migration of people during the pandemic, partially offset by targeted menu price increases.

On a Company-wide basis, same-store sales increased 51.5% during the 39 weeks ended July 2, 2022 as compared to the same period of last year as follows:

39 Weeks Ended Variance

2022 April 3,

(in thousands)

10 unchanged sentences

Food and beverage sales $ 134,127 $ 87,207

The increases in company-wide same-store sales were driven primarily by increased customer traffic as a result of the impact of the COVID-19 pandemic on the prior period combined with targeted increases in menu pricing and a modest recovery in our event business in Washington, D.C.

The increases in company-wide same-store sales for the 39 weeks ended July 2, 2022 as compared to the prior period were driven primarily by increased customer traffic as a result of the impact of the COVID-19 pandemic on the prior period combined with targeted increases in menu pricing and a very strong recovery in our event business in Washington, D.C.

and New York City in the current period.

2 unchanged sentences

Costs and Expenses

Costs and expenses for the 13 and 26 weeks ended April 2, 2022 and April 3, 2021 were as follows (in thousands):

Costs and expenses for the 13 and 39 weeks ended July 2, 2022 and July 3, 2021 were as follows (in thousands):

13 Weeks Ended

11 unchanged sentences

Total costs and expenses $ 47,797 $ 37,852 $ 9,945 $ 128,349 $ 88,722 $ 39,627

Changes in food and beverage costs as a percentage of total revenues for the 13 and 26 weeks ended April 2, 2022 as compared with the same periods of last year reflect increased volumes, targeted increases in menu pricing, changes in menu mix and a modest recovery in our event business in Washington, D.C.

and New York City in the current period, partially offset by increases in costs of seafood and other high-volume items.

Payroll expenses as a percentage of total revenues for the 13 weeks ended April 2, 2022 increased as compared with the same period of last year primarily as a result of increased labor costs in connection with ongoing COVID-related labor challenges partially offset by increased volumes, targeted increases in menu pricing and changes in menu mix.

Payroll expenses as a percentage of total revenues for the 26 weeks ended April 2, 2022 decreased as compared with the same period of last year primarily as a result of retaining key restaurant management personnel with lower corresponding revenues for several months at the beginning of prior period as a result of the government mandated closures and/or capacity restrictions at several of our restaurants in connection with the COVID-19 pandemic combined with increased labor costs in connection with ongoing COVID-related labor challenges partially offset by increased volumes, targeted increases in menu pricing and changes in menu mix.

Occupancy expenses as a percentage of total revenues for the 13 and 26 weeks ended April 2, 2022 decreased as compared with the same period of last year primarily as a result of the fixed nature of many of these expenses and lower sales in the prior period as a result of the COVID-19 pandemic.

Other operating costs and expenses as a percentage of total revenues for the 13 and 26 weeks ended April 2, 2022 as compared to the same period of last year decreased primarily as a result of the fixed nature of some of these expenses and lower sales in the prior period as a result of the COVID-19 pandemic, decreased maintenance at properties where we are experiencing lower traffic and increased professional fees at the restaurant-level in the prior periods.

General and administrative expenses (which relate solely to the corporate office in New York City) for the 13 weeks ended April 2, 2022 decreased slightly as compared with the same period of last year primarily as a result of headcount reductions of corporate personnel.

General and administrative expenses for the 26 weeks ended April 2, 2022 increased as compared with the same period of last year primarily as a result of headcount and salary reductions of corporate personnel in the prior period as a result of the impacts on our business from the COVID-19 pandemic.

Depreciation and amortization expense for the 13 and 26 weeks ended April 2, 2022 increased as compared to the same period of last year primarily as a result of assets placed in service in the current period.

We calculate our interim income tax provision in accordance with ASC Topic 270, Interim Reporting and ASC Topic 740, Accounting for Income Taxes.

At the end of each interim period, we estimate the annual effective tax rate and apply that rate to our ordinary year to date earnings.

In addition, the tax effects of unusual or infrequently occurring items including changes in judgment about valuation allowances and effects of changes in enacted tax laws are recognized discretely in the interim period in which the change occurs.

The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including the expected operating (loss) income for the year, permanent and temporary differences as a result of differences between amounts measured and recognized in accordance with tax laws and financial accounting standards, and the likelihood of recovering deferred tax assets generated in the current fiscal year.

The accounting estimates used to compute income tax expense may change as new events occur, additional information is obtained, or the tax environment changes.

The Company’s overall effective tax rate in the future will be affected by factors such as changes in tax law, the utilization of state and local net operating loss carryforwards, the generation of FICA tax credits, additional forgiveness of PPP Loans and the mix of earnings by state taxing jurisdictions as Nevada does not impose a state income tax, as compared to the other major state and local jurisdictions in which the Company has operations.

The final annual tax rate cannot be determined until the end of the fiscal year;

therefore, the actual tax rate could differ from current estimates.

Food and beverage costs as a percentage of total revenues for the 13 and 39 weeks ended July 2, 2022 as compared with the same periods of last year decreased as a result of targeted increases in menu pricing, changes in menu mix and a very strong event business in Washington, D.C.

and New York City in the current period, partially offset by increases in commodity prices and other high-volume items caused by inflation.

Payroll expenses as a percentage of total revenues for the 13 weeks ended July 2, 2022 increased as compared with the same period of last year primarily as a result of increased labor costs in connection with ongoing COVID-related labor challenges partially offset by increased volumes, targeted increases in menu pricing and changes in menu mix.

Payroll expenses as a percentage of total revenues for the 39 weeks ended July 2, 2022 decreased as compared with the same period of last year primarily as a result of retaining key restaurant management personnel with lower corresponding revenues for several months at the beginning of prior period as a result of the government mandated closures and/or capacity restrictions at several of our restaurants in connection with the COVID-19 pandemic combined with increased labor costs in connection with ongoing COVID-related labor challenges partially offset by increased volumes, targeted increases in menu pricing and changes in menu mix.

Occupancy expenses as a percentage of total revenues for the 13 weeks ended July 2, 2022 increased as compared with the same period of last year primarily as a result of percentage rents paid on higher sales in the current period.

Occupancy expenses as a percentage of total revenues for the 39 weeks ended July 2, 2022 decreased as compared with the same period of last year primarily as a result of the fixed nature of many of these expenses and lower sales in the prior period as a result of the COVID-19 pandemic.

Other operating costs and expenses as a percentage of total revenues for the 13 weeks ended July 2, 2022 as compared to the same period of last year increased slightly primarily as a result of increased maintenance at properties which was deferred as we were experiencing lower traffic in prior periods combined with higher restaurant-level professional fees in the current period.

Other operating costs and expenses as a percentage of total revenues for the 39 weeks ended July 2, 2022 as compared to the same period of last year decreased primarily as a result of the fixed nature of some of these expenses and lower sales in the prior period as a result of the COVID-19 pandemic.

General and administrative expenses (which relate solely to the corporate office in New York City) for the 13 weeks ended July 2, 2022 increased as compared with the same period of last year primarily as a result of increased bonus accruals in the current period.

General and administrative expenses for the 39 weeks ended July 2, 2022 increased as compared with the same period of last year primarily as a result of increased bonus accruals and salary reductions of corporate personnel in the prior period as a result of the impacts on our business from the COVID-19 pandemic.

Depreciation and amortization expense for the 13 weeks ended July 2, 2022 decreased as compared to the same period of last year primarily as a result of the timing of additions in the prior period.

Depreciation and amortization expense for the 39 weeks ended July 2, 2022 increased as compared to the same period of last year primarily as a result of assets placed in service in the current period.

Liquidity and Capital Resources

4 unchanged sentences

We believe that our operating lease arrangements provide appropriate leverage of our capital structure in a financially efficient manner.

As of April 2, 2022, we had a cash and cash equivalents balance of $18,542,000.

As of July 2, 2022, we had a cash and cash equivalents balance of $26,602,000.

The Company had working capital of $5,489,000 at July 2, 2022 as compared with working capital of $2,572,000 at October 2, 2021.

This increase resulted primarily from cash provided by operations offset by a change in our debt maturities as one of our balloon payments moved into current maturities.

We believe that our existing cash balances and current banking facilities will be sufficient to meet our liquidity and capital spending requirements and finance our operating activities for at least the next 12 months.

On May 11, 2022, the Board of Directors (the "Board") of the Company declared a quarterly cash dividend of $0.125 per share which was paid on June 13, 2022 to the stockholders of record of each share of the Company's common stock at the close of business on May 31, 2022.

Future decisions to pay or to increase or decrease dividends are at the discretion of the Board and will depend upon operating performance and other factors.

COVID-19 and Inflation

Due to the fluidity of the COVID-19 pandemic, management cannot determine the ultimate impact that it will have on the Company’s consolidated financial condition, liquidity, future results of operations, suppliers, industry, and workforce and therefore any prediction as to the ultimate material adverse impact on the Company’s consolidated financial condition, liquidity, and future results of operations is uncertain.

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The extent of such negative impact will be determined, in part, by the longevity and severity of the pandemic.

Cash Flows for 26 Weeks Ended April 2, 2022 and April 3, 2021

Net cash provided by operating activities for the 26 weeks ended April 2, 2022 increased to $4,963,000 as compared to $(1,644,000) used in operations in the same period of last year.

The country is currently experiencing multi-decade high inflation.

Our profitability is dependent on, among other things, our ability to anticipate and react to changes in the cost of food and other raw materials, labor, energy and other supplies and services.

While we have not had material disruptions in our supply chain, we have experienced some product shortages and higher costs for many commodities.

There has also been a general shortage in the availability of restaurant staff and hourly workers in certain geographic areas in which we operate, which has been exacerbated by continuing effects of the COVID-19 pandemic on the labor market, and has caused increases in the costs of recruiting and compensating such employees.

In addition, certain operating and other costs, including health benefits, taxes, insurance, and other outside services, continue to increase with the general level of inflation and may also be subject to other cost and supply fluctuations outside of our control.

While we have been able to partially offset inflation and other changes in the costs of key operating resources by targeted increases in menu prices, coupled with more efficient purchasing practices, there can be no assurance that we will be able to continue to do so in the future.

From time to time, competitive conditions will limit our menu pricing flexibility.

In addition, macroeconomic conditions that impact consumer discretionary spending for food away from home could make additional menu price increases imprudent.

There can be no assurance that all of our future cost increases can be offset by higher menu prices or that higher menu prices will be accepted by our restaurant customers without any resulting changes in their visit frequencies or purchasing patterns.

Cash Flows for 39 Weeks Ended July 2, 2022 and July 3, 2021

Net cash provided by operating activities for the 39 weeks ended July 2, 2022 increased to $15,836,000 as compared to $6,648,000 provided by operating activities in the same period of last year.

This increase was attributable to an increase in operating income as a result of the continued recovery from the COVID-19 pandemic and changes in net working capital primarily related to accounts receivable, inventory and accounts payable and accrued expenses.

Net cash used in investing activities for the 26 weeks ended April 2, 2022 and April 3, 2021 was $(1,090,000) and $(2,926,000), respectively, and resulted primarily from purchases of fixed assets at existing restaurants and, in the prior period, the cash portion of the purchase price of the Blue Moon Fish Company acquisition.

Net cash used in financing activities for the 26 weeks ended April 2, 2022 of $(4,502,000) resulted primarily from principal payments on notes payable and the payment of distributions to non-controlling interests.

Net cash used in financing activities for the 26 weeks ended April 3, 2021 of $(918,000) resulted primarily from principal payments on notes payable partially offset by proceeds from the exercise of stock options.

Net cash used in investing activities for the 39 weeks ended July 2, 2022 and July 3, 2021 was $(1,774,000) and $(3,455,000), respectively, and resulted primarily from purchases of fixed assets at existing restaurants and, in the prior period, the cash portion of the purchase price of the Blue Moon Fish Company acquisition.

Net cash used in financing activities for the 39 weeks ended July 2, 2022 of $(6,631,000) resulted primarily from principal payments on notes payable, the payment of dividends and the payment of distributions to non-controlling interests.

Net cash used in financing activities for the 39 weeks ended July 3, 2021 of $(1,799,000) resulted primarily from principal payments on notes payable and the payment of distributions to non-controlling interests partially offset by proceeds from the exercise of stock options.

Recent Restaurant Expansions and Other Developments

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In addition, all rights and privileges under the current lease were assigned to Sandcastle 1, LLC, as landlord and the lease terms remain unchanged.

On April 8, 2022, the Company extended its lease for Gallagher's Steakhouse at the New York-New York Hotel and Casino in Las Vegas, NV through December 31, 2032.

In connection with the extension, the Company has agreed to spend a minimum of $1,500,000 to materially refresh the premises by September 30, 2022, subject to various extensions as set out in the agreement.

On June 24, 2022, the Company extended its lease for America at the New York-New York Hotel and Casino in Las Vegas, NV through December 31, 2033.

In connection with the extension, the Company has agreed to spend a minimum of $4,000,000 to materially refresh the premises by December 31, 2024, subject to various extensions as set out in the agreement.

The above refresh obligations are to be consistent with designs approved by the Landlord which shall not be unreasonably withheld.

We will continue to pay all rent as required by the leases without abatement during construction.

Note that our substantial completion of work set forth in plans approved by the Landlord shall constitute our compliance with the requirements of the completion deadlines, regardless of whether or not the amount actually expended in connection therewith is less than the minimum.

Our restaurants generally do not achieve substantial increases in revenue from year to year, which we consider to be typical of the restaurant industry.

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On September 1, 2021, the Company advised the landlord of Clyde Frazier's Wine and Dine that we would be closing the property permanently and terminated the lease.

In connection with termination, the Company recorded a gain of $810,000 during the year ended October 2, 2021 consisting of:

In connection with the termination, the Company recorded a gain of $810,000

during the year ended October 2, 2021 consisting of:

(i) rent and other costs incurred in accordance with the termination provisions of the lease in the amount of $318,000, (ii) impairment of long-lived assets in the amount of $69,000 and (iii) the write-off of our security deposit in the amount of $121,000 offset by the write-off of ROU assets and related lease liabilities in the net amount of $1,318,000.

Included in the consolidated condensed statement of operations for the 13 weeks ended January 2, 2021 are revenues and net operating losses of approximately $172,000 and $(709,000) related to the above properties.

Notes Payable – Bank

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We do not expect the discontinuation of LIBOR as a reference rate in our debt agreements to have a material adverse effect on our financial position or materially affect our interest expense.

Borrowings under the Revolving Facility, which include the promissory notes as discussed in Note 8 of the consolidated condensed financial statements, are secured by all tangible and intangible personal property (including accounts receivable, inventory, equipment, general intangibles, documents, chattel paper, instruments, letter-of-credit rights, investment property,

intellectual property and deposit accounts) and fixtures of the Company.

The Revolving Facility also requires, among other things, that the Company meet minimum quarterly tangible net worth amounts, maintain a minimum fixed charge coverage ratio and meet minimum annual net income amounts.

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Forgiveness applications can be submitted up to 10 months after the end of the related notes covered period (which is defined as 24 weeks after the date of the loan) (the “Deferral Period”) and the ultimate forgiveness decisions can be made by the Lenders up to 60 days after submitting the applications and possibly longer if forgiveness is fully or partially denied and the Borrower appeals the decision.

While the Company and each Borrower believe that PPP Loan proceeds were used exclusively for Qualifying Expenses, it is unclear and uncertain whether the conditions for forgiveness of the remaining PPP Loans outstanding at April 2, 2022 will be met under the current guidelines of the CARES Act.

While the Company and each Borrower believe that PPP Loan proceeds were used exclusively for Qualifying Expenses, it is unclear and uncertain whether the conditions for forgiveness of the remaining PPP Loans outstanding at July 2, 2022 will be met under the current guidelines of the CARES Act.

Therefore, we cannot make any assurances that the Company, or any of the Borrowers, will be eligible for forgiveness of the remaining PPP Loans, in whole or in part.

During the 13 weeks ended April 2, 2022 and April 3, 2021, $1,122,000 and $4,124,000 of PPP Loans, respectively (including $20,000 and $27,000 of accrued interest) were forgiven.

During the 13 weeks ended July 2, 2022 and July 3, 2021, $1,298,000 and $3,195,000 of PPP Loans, respectively (including $46,000 and $36,000 of accrued interest, respectively) were forgiven.

During the 39 weeks ended July 2, 2022 and July 3, 2021, $2,420,000 and $7,318,000 of PPP Loans, respectively (including $66,000 and $63,000 of accrued interest, respectively) were forgiven.

To the extent that any of the remaining PPP Loans are not forgiven, beginning one month following expiration of the Deferral Period, and continuing monthly until 24 months from the date of each applicable Note (the “Maturity Date”), each respective Borrower is obligated to make monthly payments of principal and interest to the Lender with respect to any unforgiven portion of the Notes, in such equal amounts required to fully amortize the principal amount outstanding on such Notes as of the last day of the applicable Deferral Period by the applicable Maturity Date.

Accordingly, based on the above, we have classified the PPP Loan amounts expected to be forgiven as long-term in accordance with SEC interpretative guidance and the remaining amounts expected to be repaid in the next 12 months of $892,000 and $2,032,000 as short-term in the consolidated condensed balance sheets as of April 2, 2022 and October 2, 2021, respectively.

During the 26 weeks ended April 2, 2022, the Company made payments related to the unforgiven portion of PPP Loans in the aggregate amount of $976,000.

Accordingly, based on the above, we have classified the PPP Loan amounts expected to be forgiven as long-term in accordance with SEC interpretative guidance and the remaining

amounts expected to be repaid in the next 12 months of $797,000 and $2,032,000 as short-term in the consolidated condensed balance sheets as of July 2, 2022 and October 2, 2021, respectively.

During the 39 weeks ended July 2, 2022, the Company made payments related to the unforgiven portion of PPP Loans in the aggregate amount of $1,571,000.

Recent Events

On April 8, 2022, the Company extended its lease for Gallagher's Steakhouse at the New York-New York Hotel and Casino in Las Vegas, NV through December 31, 2032.

On May 11, 2022, the Board of Directors (the "Board") of the Company declared a quarterly cash dividend of $0.125 per share which will be paid on June 13, 2022 to the stockholders of record of each share of the Company's common stock at the close of business on May 31, 2022.

On July 5, 2022, the Company terminated its lease for Lucky Seven at the Foxwoods Resort Casino.

The closure did not result in a material change to the Company's operations.

On July 21, 2022, the Company extended its lease for the Village Eateries at the New York-New York Hotel and Casino in Las Vegas, NV through December 31, 2034.

As part of this extension, the Broadway Burger Bar and Grill and Gonzalez y Gonzalez , were carved out of the Village Eateries footprint and the extended date for those two locations is December 31, 2033.

In connection with the extension, the Company has agreed to spend a minimum of $3,500,000 to materially refresh all three of these premises by June 30, 2023, subject to various extensions as set out in the agreement.

On August 10, 2022, the Board of Directors (the "Board") of the Company declared a quarterly cash dividend of $0.125 per share which will be paid on September 13, 2022 to the stockholders of record of each share of the Company's common stock at the close of business on August 31, 2022.

Future decisions to pay or to increase or decrease dividends are at the discretion of the Board and will depend upon operating performance and other factors.

2 unchanged sentences

In the process of preparing its consolidated condensed financial statements, the Company estimates the appropriate carrying value of certain assets and liabilities, which are not readily apparent from other sources.

The primary estimates underlying the Company’s consolidated condensed financial statements include projected cash flows, allowances for potential bad debts on accounts and notes receivable, assumptions regarding discount rates related to lease accounting, the useful lives and recoverability of its assets, such as property and intangibles, fair values of financial instruments,

the realizable value of its tax assets and other matters.

Management bases its estimates on certain assumptions, which it believes are reasonable in the circumstances, and actual results could differ from those estimates.

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis