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Item 2. Management’s Discussion and Analysis

2024-11-07 compared with 2024-08-08 · 144 added, 138 removed, 127 unchanged (69% of the section changed)

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Forward-Looking Statements

This Quarterly Report on Form 10-Q, particularly the following discussion and analysis of our results of operations, financial condition and liquidity in this "Management's Discussion and Analysis of Financial Condition and Results of Operations," contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995.

This Quarterly Report on Form 10-Q, particularly the following discussion and analysis of our results of operations, financial condition and liquidity in this "Management's Discussion and Analysis of Financial Condition and Results of Operations," contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Exchange Act, and the Private Securities Litigation Reform Act of 1995.

Such statements relate to, among other things, income, earnings, cash flows, changes in operations, operating improvements, businesses in which we operate and the United States and global economies.

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Executive Summary

Highlights of our financial results for the three months ended June 30, 2024 as compared to the same period of the prior year include the following:

Highlights of our financial results for the three months ended September 30, 2024 as compared to the same period of the prior year include the following:

• Net sales were $291.4 million, a decrease of 3.9%

• Gross profit was $66.8 million, a decrease of 4.0%

• Results include a pre-tax non-cash goodwill impairment charge of $20.2 million

• Income from operations decreased $28.0 million to a loss of $10.7 million

• Net income attributable to Astec decreased $27.1 million to a loss of $14.0 million

• Loss from operations was $7.2 million, an increase of 38.5%

• Net loss attributable to Astec was $6.2 million, a decrease of 6.1%

• Diluted loss per share was $0.27, a decrease of 6.9%

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Business Conditions and Trends

Strategic Transformation – We are undergoing a multi-year phased implementation of a standardized ERP system across our global organization, which is replacing much of our existing disparate core financial systems.

Strategic Transformation – We are undergoing a multi-year phased implementation of a standardized ERP system, which is replacing much of our existing disparate core financial systems.

During the second quarter of 2024, we modified the pace of deployment of future site conversions in order to improve efficiencies and reduce business disruptions at each manufacturing site, which will have the effect of reducing the scope to exclude sites outside North America.

To date, we have launched the human capital resources module in our locations in the United States and converted the operations of three manufacturing sites along with Corporate, two of which occurred during the second quarter of 2024.

We are changing the pace of deployment of future site conversions in order to improve efficiencies and reduce business disruptions at each manufacturing site, which will have the effect of reducing the scope to exclude sites outside North America.

With these modifications, we expect the project to conclude in 2027 with total approximate implementation costs anticipated to range from $180 to $200 million.

Through the second quarter of 2024, we have incurred total implementation costs of approximately $119 million.

We expect the project to conclude in 2027 with total approximate implementation costs anticipated to range from $180 to $200 million.

Through the third quarter of 2024, we have incurred total implementation costs of approximately $127 million.

Annual costs are expected to peak in 2024 to a range of $40 to $45 million and decrease annually each year through the final implementations in 2027.

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See Note 11, Strategic Transformation, Restructuring, Impairment and Other Asset Charges, net of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional discussion of the costs related to these strategic initiatives.

Goodwill Impairment – During the second quarter of 2024, we identified that indicators of goodwill impairment were present due to current macroeconomic conditions, including declines in our publicly quoted share price and increased interest rates, as well as lower than expected operating results.

Goodwill Impairment – During the second quarter of 2024, we identified that indicators of goodwill impairment were present due to macroeconomic conditions, including declines in our publicly quoted share price and increased interest rates, as well as lower than expected operating results.

These factors indicated that one or more of our reporting units may have fallen below their carrying amounts.

We performed a qualitative assessment on all reporting units concluded that a further quantitative analysis was required for the Materials Solutions reporting unit.

We performed a qualitative assessment on all reporting units and concluded that a further quantitative analysis was required for the Materials Solutions reporting unit.

Based on the quantitative impairment test, we determined that the carrying value of the Materials Solutions reporting unit exceeded its fair value as of June 30, 2024.

As a result, we recognized a pre-tax non-cash goodwill impairment charge of $20.2 million in "Goodwill impairment" in the Consolidated Statements of Operations to fully impair the goodwill allocated to the Materials Solutions reporting unit.

As a result, we recognized a pretax non-cash goodwill impairment charge of $20.2 million in "Goodwill impairment" in the Consolidated Statements of Operations to fully impair the goodwill allocated to the Materials Solutions reporting unit.

VenVer Litigation – On October 8, 2024, we reached an agreement to resolve the action styled VenVer S.A.

and Americas Coil Tubing LLP v.

for $8.4 million.

In connection with the settlement, we recorded a loss of $8.4 million in "Restructuring, impairment and other asset charges, net" in the Consolidated Statements of Operations and "Other current liabilities" in the Consolidated Balance Sheets during the third quarter of 2024.

See Note 8, Commitments and Contingencies of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion of this matter.

37 BP Litigation – In September 2024, we reached an agreement for $6.3 million, which we paid in September 2024, to resolve the matter styled 37 Building Products, Ltd.

Telsmith, Inc., et al.

originally filed on January 28, 2019.

Upon settlement, the full loss contingency of $8.2 million, inclusive of post-judgment interest, that was recorded as of June 30, 2024 was released.

The $1.9 million net impact of the loss contingency release and the final settlement amount was recorded in "Selling, general and administrative expenses" in the Consolidated Statements of Operations during the third quarter of 2024.

Segment Changes – Our two reportable segments are comprised of sites based upon the nature of the products or services produced, the type of customer for the products, the similarity of economic characteristics, the manner in which management reviews results and the nature of the production process, among other considerations.

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The Australia and LatAm sites were previously reported in the Infrastructure Solutions segment and have moved to the Materials Solutions segment.

Astec Digital was previously included in the Corporate and Other category has moved to the Infrastructure Solutions segment.

Prior periods have been revised to reflect the changes for the segment composition for comparability.

Astec Digital was previously included in the Corporate and Other category and has moved to the Infrastructure Solutions segment.

Prior periods have been revised to reflect the changes to the segment composition for comparability.

Economic Conditions – We monitor macroeconomic and other factors that may affect our business such as steel and oil prices, interest rates and geopolitical conflicts, among others.

Steel is a major component of our equipment.

We anticipate that steel prices will remain consistent, and that steel demand will remain relatively stable throughout the remainder of 2024.

Whenever possible, we attempt to cover increased costs of production by adjusting the prices of our products.

The markets we serve are competitive in nature, and competition limits our ability to pass through cost increases in many cases.

We anticipate that steel prices will remain consistent, and that steel demand will remain relatively stable throughout the remainder of 2024 and into 2025.

Additionally, significant portions of our revenues from the Infrastructure Solutions segment relate to the sale of equipment involved in the production, handling, recycling or application of asphalt mix.

Liquid asphalt is a by-product of oil refining, and changes in the price of oil impact the cost of asphalt, which is in turn likely to alter demand for asphalt and therefore affect demand for certain of our products.

Based on the current macroeconomic environment, including ongoing international conflicts, we anticipate that oil prices will remain at relatively high levels throughout the remainder of 2024.

Based on the current macroeconomic environment, including ongoing international conflicts, we anticipate that oil prices will remain at relatively high levels throughout the remainder of 2024 and into 2025.

Elevated interest rates influence our customers' spending patterns, most notably impacting our dealer customers in the Materials Solutions segment.

Interest rates have, in part, driven the decrease in our order backlog.

While interest rates in the United States have fallen slightly in the third quarter of 2024, they remain at historically elevated levels.

Additionally, our revolving credit loans bear interest on a variable basis and are subject to market volatility.

We anticipate continuing to utilize the revolving credit loans with greater frequency in the near term to support our working capital needs.

As such, we expect our interest expense in the near term to remain at elevated levels.

We anticipate continuing to utilize the Credit Facilities with more frequency in the near term to support our working capital needs.

Due to the increased borrowings under our Credit Facilities and higher interest rates, we expect our interest expense in the near term to remain at elevated levels.

New or ongoing geopolitical conflicts may cause a downturn in the commercial and residential construction industries in which we operate, cause an increase in oil prices, damage a significant portion of our inventory or materially impair our ability to distribute our products to customers.

We monitor, adjust and potentially cease our operations in affected jurisdictions to ensure compliance with any governmental actions made in response to such conflicts.

Whenever possible, we attempt to cover increased costs of production by adjusting the prices of our products.

The markets we serve are competitive in nature, and competition limits our ability to pass through cost increases in many cases.

Results of Operations

Net sales for the second quarter of 2024 were $345.5 million compared to $350.0 million for the second quarter of 2023, a decrease of $4.5 million, or 1.3%.

The decrease in net sales was primarily driven by net unfavorable volume and mix partially offset by favorable pricing that generated decreases in (i) service and equipment installation revenue of $12.6 million, (ii) parts and component sales of $3.4 million and (iii) used equipment sales of $2.2 million.

These decreases were partially offset by increases in equipment sales and other revenue of $13.2 million and $1.3 million, respectively.

Net sales for the third quarter of 2024 were $291.4 million compared to $303.1 million for the third quarter of 2023, a decrease of $11.7 million, or 3.9%.

The decrease in net sales was primarily driven by net unfavorable volume and mix partially offset by favorable pricing that generated decreases in equipment and parts and component sales of $7.8 million and $4.3 million, respectively.

These decreases were partially offset by an increase in equipment installation revenue of $1.1 million.

Sales reported by our foreign subsidiaries in U.S.

dollars for the second quarter of 2024 would have been $0.5 million higher had second quarter 2024 foreign exchange rates been the same as second quarter 2023 rates.

Net sales for the first six months of 2024 were $654.7 million compared to $697.9 million for the first six months of 2023, a decrease of $43.2 million, or 6.2%.

The decrease in net sales was primarily driven by net unfavorable volume and mix partially offset by favorable pricing that generated decreases in (i) equipment sales of $26.8 million, (ii) service and equipment installation

revenue of $20.3 million, (iii) used equipment of $3.9 million and (iv) freight revenue of $2.6 million.

These decreases were partially offset by an increase in parts and component sales and other revenue of $7.3 million and $3.1 million, respectively.

dollars for the third quarter of 2024 would have been $0.3 million lower had third quarter 2024 foreign exchange rates been the same as third quarter 2023 rates.

Net sales for the first nine months of 2024 were $946.1 million compared to $1,001.0 million for the first nine months of 2023, a decrease of $54.9 million, or 5.5%.

The decrease in net sales was primarily driven by net unfavorable volume and mix partially offset by favorable pricing that generated decreases in (i) equipment sales of $34.6 million, (ii) service and equipment installation revenue of $19.2 million, (iii) used equipment of $4.3 million and (iv) freight revenue of $3.1 million.

These decreases were partially offset by an increase in other revenue and parts and component sales of $3.3 million and $3.0 million, respectively.

Sales reported by our foreign subsidiaries in U.S.

dollars for the first six months of 2024 would have been $1.2 million higher had the first six months of 2024 foreign exchange rates been the same as the first six months of 2023 rates.

Domestic sales for the second quarter of 2024 were $272.1 million, or 78.8% of consolidated net sales, compared to $286.4 million, or 81.8% of consolidated net sales, for the second quarter of 2023, a decrease of $14.3 million, or 5.0%.

Domestic sales decreased primarily due to decreases in (i) service and equipment installation revenue of $12.8 million, (ii) parts and components sales of $5.0 million and (iii) used equipment sales of $1.6 million.

These decreases were partially offset by increases in equipment sales and other revenue of $4.5 million and $1.3 million, respectively.

Domestic sales for the first six months of 2024 were $515.3 million, or 78.7% of consolidated net sales, compared to $567.7 million, or 81.3% of consolidated net sales, for the first six months of 2023, a decrease of $52.4 million, or 9.2%.

Domestic sales decreased primarily due to decreases in (i) equipment sales of $34.4 million, (ii) service and equipment installation revenue of $21.2 million, (iii) used equipment sales of $2.5 million and (iv) freight revenue of $2.1 million.

These decreases were partially offset by increases in parts and component sales and other revenue of $4.6 million and $3.2 million, respectively.

International sales for the second quarter of 2024 were $73.4 million, or 21.2% of consolidated net sales, compared to $63.6 million, or 18.2% of consolidated net sales, for the second quarter of 2023, an increase of $9.8 million, or 15.4%.

dollars for the first nine months of 2024 would have been $0.9 million higher had the first nine months of 2024 foreign exchange rates been the same as the first nine months of 2023 rates.

Domestic sales for the third quarter of 2024 were $211.2 million, or 72.5% of consolidated net sales, compared to $229.6 million, or 75.8% of consolidated net sales, for the third quarter of 2023, a decrease of $18.4 million, or 8.0%.

Domestic sales decreased primarily due to decreases in equipment and parts and components sales of $13.1 million and $6.8 million, respectively.

These decreases were partially offset by increased service and equipment installation revenue of $1.1 million.

Domestic sales for the first nine months of 2024 were $726.5 million, or 76.8% of consolidated net sales, compared to $797.3 million, or 79.7% of consolidated net sales, for the first nine months of 2023, a decrease of $70.8 million, or 8.9%.

Domestic sales decreased primarily due to decreases in (i) equipment sales of $47.5 million, (ii) service and equipment installation revenue of $20.1 million, (iii) used equipment sales of $2.5 million, (iv) freight revenue of $2.4 million and (v) parts and component sales of $2.2 million.

These decreases were partially offset by increased other revenue of $3.9 million.

International sales for the third quarter of 2024 were $80.2 million, or 27.5% of consolidated net sales, compared to $73.5 million, or 24.2% of consolidated net sales, for the third quarter of 2023, an increase of $6.7 million, or 9.1%.

International sales increased primarily due to increases in equipment sales and parts and component sales of $5.3 million and $2.5 million, respectively.

International sales for the first six months of 2024 were $139.4 million, or 21.3% of consolidated net sales, compared to $130.2 million, or 18.7% of consolidated net sales, for the first six months of 2023, an increase of $9.2 million, or 7.1%.

International sales for the first nine months of 2024 were $219.6 million, or 23.2% of consolidated net sales, compared to $203.7 million, or 20.3% of consolidated net sales, for the first nine months of 2023, an increase of $15.9 million, or 7.8%.

International sales increased primarily due to increases in equipment sales and parts and component sales of $12.9 million and $5.2 million, respectively.

These increases were partially offset by decreased used equipment sales of $1.8 million.

Gross profit for the second quarter of 2024 was $81.3 million, or 23.5% of net sales, as compared to $82.9 million, or 23.7% of net sales, for the second quarter of 2023, a decrease of $1.6 million, or 1.9%.

The decrease was primarily driven by (i) manufacturing inefficiencies of $13.6 million, (ii) the impact of inflation on materials, labor and overhead of $3.7 million and (iii) increased net scrap expenses of $0.9 million.

These decreases were partially offset by (i) the sales impact of favorable pricing partially offset by net unfavorable volume and mix of $10.6 million, (ii) a net favorable impact of inventory adjustments of $3.7 million and (iii) reduced warranty program costs of $2.3 million.

Gross profit for the first six months of 2024 was $158.2 million, or 24.2% of net sales, as compared to $172.1 million, or 24.7% of net sales, for the first six months of 2023, a decrease of $13.9 million, or 8.1%.

The decrease was primarily driven by (i) manufacturing inefficiencies of $18.0 million, (ii) the impact of inflation on materials, labor and overhead of $5.5 million and (iii) increased net scrap expenses of $1.9 million.

The net favorable sales impact from pricing partially offset by unfavorable volume and mix of $9.9 million and reduced warranty program costs of $1.6 million offset a portion of the decreases.

Gross profit for the third quarter of 2024 was $66.8 million, or 22.9% of net sales, as compared to $69.6 million, or 23.0% of net sales, for the third quarter of 2023, a decrease of $2.8 million, or 4.0%.

The decrease was primarily driven by manufacturing inefficiencies of $5.9 million and the impact of inflation on materials, labor and overhead of $3.2 million.

These decreases were partially offset by the sales impact of favorable pricing partially offset by net unfavorable volume and mix of $5.4 million and $1.0 million of favorable inventory period costs.

Gross profit for the first nine months of 2024 was $225.0 million, or 23.8% of net sales, as compared to $241.7 million, or 24.1% of net sales, for the first nine months of 2023, a decrease of $16.7 million, or 6.9%.

The decrease was primarily driven by manufacturing inefficiencies of $24.2 million and the impact of inflation on materials, labor and overhead of $8.7 million.

These decreases were partially offset by the sales impact of favorable pricing partially offset by net unfavorable volume and mix of $15.4 million.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $6.6 million, or 10.2%, to $71.1 million, or 20.6% of net sales, for the second quarter of 2024, compared to $64.5 million, or 18.4% of net sales, for the second quarter of 2023.

The increases in selling general and administrative expenses are primarily due to (i) higher costs related to our strategic transformation program of $3.3 million, (ii) higher technology support costs and certain professional services of $2.9 million, (iii) higher provision for credit losses of $1.8 million and (iv) higher exhibit and promotional costs of $0.9 million.

These increases were partially offset by lower customer concessions and dealer commissions of $1.6 million.

Decreased employee incentive compensation costs of $4.0 million were largely offset by general employee cost increases from higher headcount and wage inflation.

Selling, general and administrative expenses increased $10.1 million, or 7.6%, to $142.5 million, or 21.8% of net sales, for the first six months of 2024, compared to $132.4 million, or 19.0% of net sales, for the first six months of 2023.

The increases in selling, general and administrative expenses are primarily due to (i) increased personnel-related costs of $7.4 million, which includes the recovery of share-based compensation expense in the prior year that did not recur for awards that were forfeited or modified in conjunction with the termination of our previous CEO and the limited overhead restructuring action implemented in February 2023 of $2.6 million, (ii) higher technology support costs and certain professional services of $5.9 million, (iii) increased costs related to our strategic transformation program of $2.5 million and (iv) higher provision for credit losses of $1.6 million.

These increases were partially offset by $3.6 million of employee incentive compensation costs and lower exhibit and promotional costs of $1.2 million.

Selling, general and administrative expenses decreased $8.7 million, or 11.7%, to $65.6 million, or 22.5% of net sales, for the third quarter of 2024, compared to $74.3 million, or 24.5% of net sales, for the third quarter of 2023.

The decreases in selling general and administrative expenses are primarily due to (i) the loss contingency related to the 37 BP litigation, of which $6.4 million was recorded in the third quarter of 2023 as compared to the $1.9 million benefit from the loss contingency release offset by the final settlement amount recorded during the third quarter of 2024, (ii) decreased employee incentive compensation costs of $1.5 million and (iii) lower bad debt expense of $1.2 million.

These decreases were partially offset by higher technology support costs and certain professional services of $1.4 million and higher costs related to our strategic transformation program of $0.9 million.

Selling, general and administrative expenses increased $1.4 million, or 0.7%, to $208.1 million, or 22.0% of net sales, for the first nine months of 2024, compared to $206.7 million, or 20.6% of net sales, for the first nine months of 2023.

The increases in selling, general and administrative expenses are primarily due to (i) increased personnel-related costs of $8.1 million, which includes the recovery of share-based compensation expense in the prior year that did not recur for awards that were forfeited or modified in conjunction with the termination of our previous CEO and the limited overhead restructuring action implemented in February 2023 of $2.6 million, (ii) higher technology support costs and certain professional services of $6.9 million and (iii) higher costs related to our strategic transformation program of $3.4 million.

These increases were partially offset by (i) the loss contingency related to the 37 BP litigation, of which $6.4 million was recorded in the third quarter of 2023 as compared to the $1.9 million benefit from the loss contingency release offset by the final settlement amount recorded during the third quarter of 2024, (ii) decreased employee incentive costs of $5.1 million and (iii) decreased exhibit and promotional costs of $1.3 million.

Goodwill Impairment

At the end of the second quarter, we determined that the carrying value of the Materials Solutions reporting unit exceeded its fair value as of June 30, 2024.

After this impairment charge, the Consolidated Balance Sheet as of June 30, 2024 reflects no goodwill related to Materials Solutions.

See Note 4, Goodwill of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for discussion of the pre-tax non-cash goodwill impairment charge.

Restructuring, Impairment and Other Asset Gains and Charges, net

Restructuring, asset impairment charges and the net gain on sale of property and equipment for the three and six-month periods ended June 30, 2024 and 2023 are presented below:

Three Months Ended June 30, Six Months Ended June 30,

We determined that the carrying value of the Materials Solutions reporting unit exceeded its fair value as of June 30, 2024.

After this impairment charge, no net goodwill related to Materials Solutions is reflected in Consolidated Balance Sheet as of June 30, 2024.

See Note 4, Goodwill of the Notes to Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for discussion of the pretax non-cash goodwill impairment charge.

Restructuring, Impairment and Other Asset Charges and Gains, net

Restructuring, asset impairment charges and the loss (gain) on sale of property and equipment, net for the three and nine-month periods ended September 30, 2024 and 2023 are presented below:

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2024 2023 2024 2023

Restructuring charges:

Costs associated with exited operations – Enid $ 8.4 $ 0.1 $ 8.5 $ 0.3

Workforce reductions — — 0.9 —

Costs associated with leadership change and overhead restructuring — — — 7.3

Costs associated with exited operations – Enid — 0.1 0.1 0.2

Total restructuring related charges 8.4 0.1 9.4 7.6

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Total asset impairment charges — — — 0.8

Gain on sale of property and equipment, net:

Gain on sale of property and equipment, net (0.2) (0.1) (1.1) (3.5)

Total gain on sale of property and equipment, net (0.2) (0.1) (1.1) (3.5)

Loss (gain) on sale of property and equipment, net:

Loss (gain) on sale of property and equipment, net — 0.4 (1.1) (3.1)

Total loss (gain) on sale of property and equipment, net — 0.4 (1.1) (3.1)

Restructuring, other impairment and asset charges, net $ 8.4 $ 0.5 $ 8.3 $ 5.3

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Interest Expense

Interest expense of $3.1 million and $5.8 million was incurred in the three and six months ended June 30, 2024, respectively, as compared to $2.0 million and $4.0 million in the three and six months ended June 30, 2023, respectively, primarily related to higher average outstanding borrowings on the Credit Facility in 2024 as compared to the corresponding periods in 2023.

Our income tax provision for the second quarter of 2024 was $0.3 million compared to $2.7 million for the second quarter of 2023.

Our effective income tax rate was (2.2)% for the second quarter of 2024 compared to 17.0% for the second quarter of 2023.

The income tax expense for the three months ended June 30, 2024 was lower compared to the same period in 2023 primarily due to lower pretax book income and changes in the relative weighting of jurisdictional income and loss, partially offset by a net nondeductible goodwill impairment.

Our income tax expense for the first six months of 2024 was $1.7 million compared to $7.1 million for the first six months of 2023.

Our effective tax rate was (18.9)% for the first six months of 2024 compared to 21.9% for the first six months of 2023.

The income tax expense for the six months ended June 30, 2024 was lower compared to the same period in 2023, primarily due to lower pretax book income and changes in the relative weighting of jurisdictional income and loss, partially offset by a net nondeductible goodwill impairment.

The backlog of orders as of June 30, 2024 was $531.1 million compared to $688.8 million as of June 30, 2023, a decrease of $157.7 million, or 22.9%.

Domestic backlog decreased $171.0 million, or 29.1%, partially offset by an increase in international backlog of $13.3 million, or 13.2%.

Interest expense of $2.6 million and $8.4 million was incurred in the three and nine months ended September 30, 2024, respectively, as compared to $2.4 million and $6.4 million in the three and nine months ended September 30, 2023, respectively, primarily related to higher average outstanding borrowings on the Credit Facility in 2024 as compared to the corresponding periods in 2023.

Our income tax benefit for the third quarter of 2024 was $2.3 million compared to $0.6 million for the third quarter of 2023.

Our effective income tax rate was 27.1% for the third quarter of 2024 compared to 8.5% for the third quarter of 2023.

The income tax benefit for the three months ended September 30, 2024 was higher compared to the same period in 2023 primarily due to higher pretax book loss and changes in the relative weighting of jurisdictional income and loss.

Our income tax benefit for the first nine months of 2024 was $0.6 million compared to a provision of $6.5 million for the first nine months of 2023.

Our effective tax rate was 3.4% for the first nine months of 2024 compared to 25.7% for the first nine months of 2023.

The income tax benefit for the nine months ended September 30, 2024 as compared to an expense in the same period in 2023, was primarily due to lower pretax book income and changes in the relative weighting of jurisdictional income and loss, partially offset by a net nondeductible goodwill impairment.

The backlog of orders as of September 30, 2024 was $475.8 million compared to $614.7 million as of September 30, 2023, a decrease of $138.9 million, or 22.6%.

Domestic backlog decreased $133.0 million, or 26.0%, and international backlog decreased $5.9 million, or 5.7%.

The backlog decreased $43.6 million to $351.1 million in the Infrastructure Solutions segment and decreased $95.3 million to $124.7 million in the Materials Solutions segment.

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Segment Net Sales – Three Months Ended :

Three Months Ended June 30, $ Change % Change

Three Months Ended September 30, $ Change % Change

(in millions, except percentage data) 2024 2023

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Infrastructure Solutions

Sales in this segment were $221.4 million for the second quarter of 2024 compared to $199.4 million for the same period in 2023, an increase of $22.0 million, or 11.0%.

The increase was primarily driven by net favorable volume and mix coupled with favorable pricing that generated higher equipment sales of $38.6 million partially offset by decreases in (i) service and equipment installation revenue of $12.9 million, (ii) parts and component sales of $2.5 million and (iii) used equipment sales of $1.6 million.

Domestic sales for the Infrastructure Solutions segment increased $18.0 million, or 9.5%, for the second quarter of 2024 compared to the same period in 2023 primarily due to increased equipment sales of $35.2 million partially offset by decreases in (i) service and equipment installation sales of $12.8 million, (ii) parts and component sales of $3.1 million and (iii) used equipment sales of $1.6 million.

International sales for the Infrastructure Solutions segment increased $4.0 million, or 39.2%, for the second quarter of 2024 compared to the same period in 2023 primarily due to increased equipment and parts and component sales of $3.4 million and $0.6 million, respectively.

Sales in this segment were $165.0 million for the third quarter of 2024 compared to $163.2 million for the same period in 2023, an increase of $1.8 million, or 1.1%.

The increase was primarily driven by favorable pricing partially offset by net unfavorable volume and mix that generated higher equipment sales and service and equipment installation revenue of $8.4 million and $1.2 million, respectively, partially offset by decreased parts and component sales of $7.7 million.

Domestic sales for the Infrastructure Solutions segment increased $1.9 million, or 1.2%, for the third quarter of 2024 compared to the same period in 2023 primarily due to increased equipment sales and service and equipment installation revenue of $8.3 million and $1.1 million, respectively, partially offset by decreased parts and component sales of $7.5 million.

International sales for the Infrastructure Solutions segment decreased $0.1 million, or 1.2%, for the third quarter of 2024 compared to the same period in 2023.

Materials Solutions

Sales in this segment were $124.1 million for the second quarter of 2024 compared to $150.8 million for the same period in 2023, a decrease of $26.7 million, or 17.7%.

The decrease was primarily driven by net unfavorable volume and mix partially offset by favorable pricing that generated decreased (i) equipment sales of $25.4 million, (ii) parts and component sales of $0.9 million and (iii) freight revenue of $0.9 million.

These decreases were partially offset by increased other revenue of $0.8 million.

Domestic sales for the Materials Solutions segment decreased by $32.5 million, or 33.4%, for the second quarter of 2024 compared to the same period in 2023, primarily driven by decreased equipment sales and parts and component sales of $30.7 million and $1.9 million, respectively.

These decreases were partially offset by increased other revenue of $0.8 million.

International sales for the Materials Solutions segment increased $5.8 million, or 10.9%, for the second quarter of 2024 compared to the same period in 2023 primarily due to increased equipment and parts and component sales of $5.3 million and $1.0 million, respectively.

These increases were partially offset by lower used equipment sales of $0.6 million.

Segment Net Sales – Six Months Ended :

Six Months Ended June 30, $ Change % Change

Sales in this segment were $126.4 million for the third quarter of 2024 compared to $139.9 million for the same period in 2023, a decrease of $13.5 million, or 9.6%.

The decrease was primarily driven by net unfavorable volume and mix partially offset by favorable pricing that generated decreased equipment sales of $16.2 million partially offset by increased parts and component sales of $3.4 million.

Domestic sales for the Materials Solutions segment decreased by $20.3 million, or 27.1%, for the third quarter of 2024 compared to the same period in 2023, primarily driven by decreased equipment sales of $21.4 million.

This decrease was partially offset by increases in other revenue and parts and component sales of $0.8 million and $0.7 million, respectively.

International sales for the Materials Solutions segment increased $6.8 million, or 10.5%, for the third quarter of 2024 compared to the same period in 2023 primarily due to increased equipment and parts and component sales of $5.2 million and $2.7 million, respectively.

Segment Net Sales – Nine Months Ended :

Nine Months Ended September 30, $ Change % Change

(in millions, except percentage data) 2024 2023

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Infrastructure Solutions

Sales in this segment were $423.6 million for the first six months of 2024 compared to $414.9 million for the same period in 2023, an increase of $8.7 million, or 2.1%.

The increase was primarily driven by favorable pricing partially offset by net unfavorable volume and mix that generated increased equipment and parts and component sales of $23.8 million and $9.3 million, respectively.

These increases were partially offset by decreased service and equipment installation revenue and used equipment sales of $21.5 million and $2.5 million, respectively.

Domestic sales for the Infrastructure Solutions segment increased $11.9 million, or 3.1%, for the first six months of 2024 compared to the same period in 2023 primarily due to increased equipment and parts and component sales of $27.4 million and $8.3 million, respectively.

Sales in this segment were $588.6 million for the first nine months of 2024 compared to $578.1 million for the same period in 2023, an increase of $10.5 million, or 1.8%.

The increase was primarily driven by favorable pricing partially offset by net unfavorable volume and mix that generated increased equipment sales of $32.2 million.

These increases were partially offset by decreased service and equipment installation revenue and used equipment sales of $20.3 million and $2.5 million, respectively.

International sales for the Infrastructure Solutions segment decreased $3.2 million, or 9.5%, for the first six months of 2024 compared to the same period in 2023 primarily due to decreased equipment sales of $3.6 million.

Domestic sales for the Infrastructure Solutions segment increased $13.8 million, or 2.6%, for the first nine months of 2024 compared to the same period in 2023 primarily due to increased equipment sales of $35.7 million partially offset by decreased service and equipment installation revenue and used equipment sales of $20.0 million and $2.5 million, respectively.

International sales for the Infrastructure Solutions segment decreased $3.3 million, or 7.8%, for the first nine months of 2024 compared to the same period in 2023 primarily due to decreased equipment sales of $3.5 million.

Materials Solutions

Sales in this segment were $231.1 million for the first six months of 2024 compared to $283.0 million for the same period in 2023, a decrease of $51.9 million, or 18.3%.

The decrease was primarily driven by net unfavorable volume and mix partially offset by favorable pricing that generated decreased (i) equipment sales of $50.6 million, (ii) parts and component sales of $2.0 million and (iii) used equipment sales of $1.4 million.

Sales in this segment were $357.5 million for the first nine months of 2024 compared to $422.9 million for the same period in 2023, a decrease of $65.4 million, or 15.5%.

The decrease was primarily driven by net unfavorable volume and mix partially offset by favorable pricing that generated decreased equipment sales of $66.8 million partially offset by increased other revenue of $2.6 million.

Domestic sales for the Materials Solutions segment decreased by $84.6 million, or 32.4%, for the first nine months of 2024 compared to the same period in 2023, driven by decreased equipment sales and parts and component sales of $83.2 million and $3.0 million, respectively.

These decreases were partially offset by increased other revenue of $3.0 million.

Domestic sales for the Materials Solutions segment decreased by $64.3 million, or 34.5%, for the first six months of 2024 compared to the same period in 2023, driven by decreased equipment sales and parts and component sales of $61.8 million and $3.7 million, respectively.

This decrease was partially offset by increased other revenue of $2.2 million.

International sales for the Materials Solutions segment increased $12.4 million, or 12.8%, for the first six months of 2024 compared to the same period in 2023 primarily due to increased equipment and parts and component sales of $11.2 million and $1.7 million, respectively.

These increases were partially offset by decreased used equipment sales of $1.4 million.

International sales for the Materials Solutions segment increased $19.2 million, or 11.9%, for the first nine months of 2024 compared to the same period in 2023 primarily due to increased equipment and parts and component sales of $16.4 million and $4.4 million, respectively.

Segment Operating Adjusted EBITDA

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Segment Operating Adjusted EBITDA – Three Months Ended:

Three Months Ended June 30, $ Change % Change

Three Months Ended September 30, $ Change % Change

(in millions, except percentage data) 2024 2023

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Infrastructure Solutions

Segment Operating Adjusted EBITDA for the Infrastructure Solutions segment was $27.2 million for the second quarter of 2024 compared to $25.7 million for the same period in 2023, an increase of $1.5 million, or 5.8%.

The increase in Segment Operating

Adjusted EBITDA was primarily driven by (i) the sales impact of favorable pricing coupled with favorable volume and mix that generated higher gross profit of $14.6 million, (ii) net favorable inventory adjustments of $4.4 million, (iii) lower annual incentive compensation of $1.5 million and (iv) lower customer concessions of $0.9 million.

These increases were partially offset by (i) manufacturing inefficiencies of $9.8 million, (ii) the impact of inflation on materials, labor and overhead of $2.9 million, (iii) higher technology support costs and certain professional services of $2.0 million, (iv) increased personnel-related costs of $2.8 million driven by general employee cost increases from higher headcount and wage inflation and (v) $0.8 million of increased net scrap expenses.

Segment Operating Adjusted EBITDA for the Infrastructure Solutions segment was $15.6 million for the third quarter of 2024 compared to $13.3 million for the same period in 2023, an increase of $2.3 million, or 17.3%.

The increase in Segment Operating Adjusted EBITDA was primarily driven by (i) the sales impact of favorable pricing partially offset by unfavorable volume and mix that generated higher gross profit of $5.5 million, (ii) lower bad debt expense of $0.7 million and (iii) decreased selling, general and administrative personnel-related costs of $0.7 million.

These increases were partially offset by (i) manufacturing inefficiencies of $3.2 million (ii) the impact of inflation on materials, labor and overhead of $2.3 million and (iii) increased customer concessions of $0.8 million.

Materials Solutions

Segment Operating Adjusted EBITDA for the Materials Solutions segment was $10.2 million for the second quarter of 2024 compared to $18.3 million for the same period in 2023, a decrease of $8.1 million, or 44.3%.

The decrease in Segment Operating Adjusted EBITDA was primarily driven by (i) manufacturing inefficiencies of $4.3 million, (ii) the sales impact of net unfavorable volume and mix partially offset by favorable pricing that decreased gross profit by $3.2 million, (iii) higher provision for credit losses of $1.2 million, (iv) the impact of inflation on materials, labor and overhead of $0.8 million and (v) net unfavorable inventory adjustments of $0.7 million.

These decreases were partially offset by reduced warranty program costs of $2.5 million and lower customer concessions of $0.7 million.

Segment Operating Adjusted EBITDA – Six Months Ended :

Six Months Ended June 30, $ Change % Change

Segment Operating Adjusted EBITDA for the Materials Solutions segment was $14.5 million for the third quarter of 2024 compared to $9.5 million for the same period in 2023, an increase of $5.0 million, or 52.6%.

The increase in Segment Operating Adjusted EBITDA was primarily driven by the loss contingency related to the 37 BP litigation, of which $6.4 million was recorded in the third quarter of 2023 as compared to the $1.9 million benefit from the loss contingency release offset by the final settlement amount recorded during the third quarter of 2024 and net favorable inventory adjustments of $1.3 million.

These increases were partially offset by manufacturing inefficiencies of $3.8 million and the impact of inflation on materials, labor and overhead of $1.0 million.

Segment Operating Adjusted EBITDA – Nine Months Ended :

Nine Months Ended September 30, $ Change % Change

(in millions, except percentage data) 2024 2023

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Infrastructure Solutions

Segment Operating Adjusted EBITDA for the Infrastructure Solutions segment was $52.8 million for the first six months of 2024 compared to $54.2 million for the same period in 2023, a decrease of $1.4 million, or 2.6%.

The decrease in Segment Operating Adjusted EBITDA resulted primarily from (i) manufacturing inefficiencies of $13.1 million, (ii) the impact of inflation on materials, labor and overhead of $3.9 million, (iii) higher technology support costs and certain professional services of $3.4 million, (iv) increased personnel-related costs of $3.8 million driven by general employee cost increases from higher headcount and wage inflation and (v) $1.8 million of increased net scrap expenses.

These decreases were partially offset by the sales impact primarily related to (i) favorable pricing which impacted gross profit by $18.8 million, (ii) a net favorable impact of inventory adjustments of $2.5 million and (iii) $1.6 million of lower annual incentive compensation costs.

Segment Operating Adjusted EBITDA for the Infrastructure Solutions segment was $68.4 million for the first nine months of 2024 compared to $67.5 million for the same period in 2023, an increase of $0.9 million, or 1.3%.

The increase in Segment Operating Adjusted EBITDA resulted primarily from (i) the sales impact of favorable pricing coupled with net favorable volume and mix that generated higher gross profit of $24.3 million (ii) decreases in annual incentive compensation costs of $1.5 million, (iii) decreases in new product development costs of $0.7 million and (iv) decreases in property maintenance costs of $0.6 million.

The increase was partially offset by (i) manufacturing inefficiencies of $16.2 million, (ii) the impact of inflation on materials, labor and overhead of $6.1 million, (iii) higher IT support and professional services costs of $4.1 million and (iv) increased selling, general and administrative personnel-related costs of $3.1 million.

Materials Solutions

Segment Operating Adjusted EBITDA for the Materials Solutions segment was $15.5 million for the first six months of 2024 compared to $32.9 million for the same period in 2023, a decrease of $17.4 million, or 52.9%.

The decrease in Segment Operating Adjusted EBITDA resulted primarily from (i) the sales impact of net unfavorable volume and mix partially offset by favorable pricing that decreased gross profit by $7.1 million, (ii) manufacturing inefficiencies of $5.5 million, (iii) net unfavorable inventory adjustments of $2.9 million, (iv) inflation on materials, labor and overhead of $1.6 million and (v) increased personnel-related costs of $2.0 million driven by general employee cost increases from higher headcount and wage inflation.

These decreases were partially offset by reduced warranty program costs of $2.1 million and lower annual incentive compensation costs of $0.9 million.

Segment Operating Adjusted EBITDA for the Materials Solutions segment was $30.0 million for the first nine months of 2024 compared to $42.4 million for the same period in 2023, a decrease of $12.4 million, or 29.2%.

The decrease in Segment Operating Adjusted EBITDA resulted primarily from (i) manufacturing inefficiencies of $9.2 million, (ii) the sales impact of net unfavorable volume and mix partially offset by favorable pricing that decreased gross profit by $7.4 million and (iii) the impact of inflation on materials, labor and overhead of $2.6 million.

These decreases were partially offset by the loss contingency related to the 37 BP litigation, of which $6.4 million was recorded in the third quarter of 2023 as compared to the $1.9 million benefit from the loss contingency release offset by the final settlement amount recorded during the third quarter of 2024.

Corporate and Other Operations

Corporate and Other operations had net expenses of $ 9.8 million for the second quarter of 2024 compared to $ 11.8 million for the same period in 2023, a decrease of $2.0 million, or 16.9%.

The decrease in expenses was primarily driven by lower annual incentive compensation costs of $1.8 million.

Corporate and Other operations had net expenses of $ 21.8 million for the first six months of 2024 compared to $ 19.7 million for the first six months of 2023, an increase of $2.1 million, or 10.7%.

The increase in expenses was driven by higher general and administrative expenses, primarily due to $2.3 million of higher technology support costs and certain professional services.

Corporate and Other operations had net expenses of $12.7 million for the third quarter of 2024 compared to $12.8 million for the same period in 2023, a decrease of $0.1 million, or 0.8%.

Personnel related costs were materially consistent driven by $1.5 million general employee cost increases partially offset by decreases in annual incentive compensation costs of $1.0 million.

Corporate and Other operations had net expenses of $34.5 million for the first nine months of 2024 compared to $32.5 million for the first nine months of 2023, an increase of $2.0 million, or 6.2%.

The increase in expenses were primarily due to $2.5 million of higher technology support costs and certain professional services.

Personnel related costs were materially consistent driven by $2.6 million in the prior year related to the recovery of share-based compensation expense for awards that were forfeited or modified in conjunction with the termination of our previous CEO and the limited overhead restructuring action implemented in February 2023 that did not recur which was partially offset by decreases in annual incentive compensation costs of $2.1 million and general employee cost decreases.

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Our primary sources of liquidity and capital resources are cash and cash equivalents on hand, borrowing capacity under the Credit Facility and cash flows from operations.

As of June 30, 2024, our total liquidity was $175.8 million, consisting of $60.6 million of cash and cash equivalents available for operating purposes and $115.2 million available for additional borrowings under the Credit Facility, subject to our continued compliance with financial covenants under the Credit Agreement.

As of September 30, 2024, our total liquidity was $195.1 million, consisting of $52.7 million of cash and cash equivalents available for operating purposes and $142.4 million available for additional borrowings under the Credit Facility, subject to our continued compliance with financial covenants under the Credit Agreement.

Our foreign subsidiaries held $34.3 million of cash and cash equivalents available for operating purposes, which is considered to be indefinitely invested in those jurisdictions.

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Failure to satisfy these covenants could result in the accelerated repayment of our indebtedness.

We were in compliance with all covenants of the Credit Facilities as of June 30, 2024.

We had $125.0 million in outstanding borrowings under the Credit Facilities as of June 30, 2024.

Our outstanding letters of credit totaling $9.8 million decreased borrowing availability to $115.2 million under the revolving credit facility as of June 30, 2024.

We were in compliance with all covenants of the Credit Facilities as of September 30, 2024.

We had $99.0 million in outstanding borrowings under the Credit Facilities as of September 30, 2024.

Our outstanding letters of credit totaling $8.6 million decreased borrowing availability to $142.4 million under the revolving credit facility as of September 30, 2024.

We anticipate continuing to utilize the Credit Facilities with more frequency in the near term to support our working capital needs.

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We regularly enter into agreements, primarily to purchase inventory, in the ordinary course of business.

As of June 30, 2024, open purchase obligations totaled $120.3 million, of which $108.0 million are expected to be fulfilled within the remainder of 2024.

As of September 30, 2024, open purchase obligations totaled $121.9 million, of which $95.7 million are expected to be fulfilled within the remainder of 2024.

We estimate that our capital expenditures will be between $20.0 million and $25.0 million for the year ending December 31, 2024, which may be impacted by general economic, financial or operational changes and competitive, legislative and regulatory factors, among other considerations.

The following table summarizes cash flows during the six months ended June 30, 2024 and 2023, respectively:

Six Months Ended June 30,

The following table summarizes cash flows during the nine months ended September 30, 2024 and 2023, respectively:

Nine Months Ended September 30,

(in millions) 2024 2023

Net cash used in operating activities $ (13.6) $ (18.8)

Net cash (used in) provided by investing activities (12.6) 2.6

Net cash provided by (used in) financing activities 49.5 (22.0)

Net cash used in investing activities (14.0) (3.9)

Net cash provided by financing activities 19.5 30.8

Effect of exchange rates on cash 0.2 (0.3)

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Net cash used in operating activities

Net cash used in operating activities increased by $33.6 million during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to higher net cash usages for our operating assets and liabilities of $18.9 million and lower net income reduced by non-cash charges of $14.6 million.

The increased net cash usage for our operating assets and liabilities were mainly driven by (i) the timing of collections on trade and other receivables of $78.3 million, which includes a $13.7 million receivable from our insurance carriers recorded in the first quarter of 2024 related to a pending litigation settlement, (ii) the timing of payments on trade accounts payables of $14.1 million and (iii) higher employee-related payments of $13.6 million.

The net cash usage was partially offset by (i) the timing of inventory purchases of $35.5 million, (ii) the increase in customer deposits of $30.4 million and (iii) the timing impacts for accrued liabilities of $27.8 million, which includes $13.7 million related to a pending litigation settlement corresponding to the related receivable from our insurance carriers, resulting in cash inflows.

Net cash (used in) provided by investing activities

Our investing activities used net cash of $12.6 million during the six months ended June 30, 2024 as compared to providing net cash of $2.6 million during the six months ended June 30, 2023, primarily due to the cash inflows from the sale of the Tacoma facility's land, building and certain equipment assets for $19.9 million in the first quarter of 2023.

Additionally, capital expenditures decreased $3.7 million during the six months ended June 30, 2024 as compared to the same period of 2023.

Net cash provided by (used in) financing activities

Our financing activities provided net cash of $49.5 million during the six months ended June 30, 2024 as compared to a net cash use of $22.0 million during the six months ended June 30, 2023, primarily due to increased borrowings, net of repayments, of $70.3 million.

We paid quarterly dividends of $0.13 per common share to shareholders in the second quarter of both 2024 and 2023.

Net cash used in operating activities decreased by $5.2 million during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to lower net cash usages for our operating assets and liabilities of $24.2 million partially offset by reduced cash inflows from net income reduced by non-cash charges of $19.7 million.

The decreased net cash usage for our operating assets and liabilities were mainly driven by the timing of inventory purchases of $49.8 million and increases in customer deposits of $21.7 million.

The decreased net cash usage was partially offset by the timing of payments on trade accounts payables of $35.6 million and higher employee-related payments of $14.0 million.

Net cash used in investing activities

Net cash used in investing activities was $14.0 million during the nine months ended September 30, 2024 as compared to $3.9 million during the nine months ended September 30, 2023, primarily due to the cash inflows from the sale of the Tacoma facility's land, building and certain equipment assets for $19.9 million in the first quarter of 2023 that did not recur.

This was partially offset by decreased capital expenditures of $9.0 million during the nine months ended September 30, 2024 as compared to the same period of 2023.

Net cash provided by financing activities

Our financing activities provided net cash of $19.5 million during the nine months ended September 30, 2024 as compared to providing net cash of $30.8 million during the nine months ended September 30, 2023, primarily due to decreased borrowings, net of repayments, of $12.5 million.

We paid quarterly dividends of $0.13 per common share to shareholders in the third quarter of both 2024 and 2023.

Share Repurchases

As announced on July 30, 2018, we approved a share repurchase program, which authorizes us to repurchase up to $150.0 million of our common stock.

As of June 30, 2024, $115.7 million remains available for repurchase under the approved share repurchase program.

No shares were repurchased under the plan during the three months ended June 30, 2024;

As of September 30, 2024, $115.7 million remains available for repurchase under the approved share repurchase program.

No shares were repurchased under the plan during the three months ended September 30, 2024;

however, we may conduct opportunistic share repurchases under this authorization in future periods utilizing cash on hand or borrowings under our Credit Facilities.

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Financial Condition

Our total current assets increased to $778.8 million as of June 30, 2024 from $719.5 million as of December 31, 2023, an increase of $59.3 million, or 8.2%, due primarily to increases of $65.5 million in trade and other receivables, which includes a $13.7 million receivable from our insurance carriers recorded in the first quarter of 2024 related to a pending litigation settlement, partially offset by decreases of $3.3 million in prepaid expenses and other assets and $2.1 million in prepaid and refundable income taxes.

Our total current liabilities increased to $311.2 million as of June 30, 2024 from $299.0 million as of December 31, 2023, an increase of $12.2 million, or 4.1%, due primarily to net increases of $19.5 million in other current liabilities, which includes $13.7 million related to a pending litigation settlement corresponding to the related receivable from our insurance carriers, $18.9 million

in customer deposits and $2.2 million in short-term debt, partially offset by decreases of $14.3 million in accounts payable and $12.2 million in accrued employee related liabilities.

Our total current assets increased to $740.1 million as of September 30, 2024 from $719.5 million as of December 31, 2023, an increase of $20.6 million, or 2.9%, due primarily to (i) increases of $22.5 million in trade and other receivables, which includes a $13.7 million receivable from our insurance carriers recorded in the first quarter of 2024 related to a pending litigation settlement and (ii) increased inventory of $10.8 million.

These increases were partially offset by decreases in cash, cash equivalents and restricted cash of $7.9 million.

Our total current liabilities increased to $299.2 million as of September 30, 2024 from $299.0 million as of December 31, 2023.

Increases of $20.9 million and $13.8 million in other current liabilities and customer deposits, respectively, were partially offset by

decreases in accounts payables of $29.1 million.

The increase in other current liabilities includes $13.7 million related to a pending litigation settlement corresponding to the related receivable from our insurance carriers.

Critical Accounting Estimates

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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