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Item 2. Management’s Discussion and Analysis

2024-01-09 compared with 2023-06-29 · 60 added, 129 removed, 102 unchanged (65% of the section changed)

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The purpose of this discussion and analysis is to enhance the understanding and evaluation of the results of operations, financial position, cash flows, indebtedness, and other key financial information of Acuity Brands, Inc.

(referred to herein as “we,” “our,” “us,” the “Company,” or similar references) and its subsidiaries as of May 31, 2023 and for the three and nine months ended May 31, 2023 and 2022.

(referred to herein as “we,” “our,” “us,” the “Company,” or similar references) and its subsidiaries as of November 30, 2023 and for the three months ended November 30, 2023 and 2022.

The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements included within this report.

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Historically, with certain exceptions, we have experienced our highest sales in the last two quarters of each fiscal year due to these factors.

We do not expect the remainder of fiscal 2023 to follow this historical trend.

Russia and Ukraine Conflict

The current conflict between Russia and Ukraine and the related sanctions and other penalties imposed by countries across the globe against Russia are creating substantial uncertainty in the global economy.

While we do not have operations in Russia or Ukraine and do not have significant direct exposure to customers and vendors in those countries, we are unable to predict the impact that these actions will have on the global economy or on our financial condition, results of operations, and cash flows as of the date of these financial statements.

Financial Condition, Capital Resources, and Liquidity

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Sufficient cash flow generation is also critical to fund our operations in the short and long terms and to maintain compliance with covenants contained in our financing agreements.

Our significant contractual cash requirements primarily include principal and interest on our unsecured notes and borrowings under our credit agreement, payments for operating lease liabilities, and certain purchase obligations incurred in the ordinary course of business that are enforceable and legally binding.

Our significant contractual cash requirements primarily include principal and interest on our unsecured notes, accounts payable, accrued employee compensation, operating lease liabilities, and certain purchase obligations incurred in the ordinary course of business that are enforceable and legally binding.

Our obligations related to these items are described further within Management’s Discussion and Analysis of Financial Condition and Results of Operations within our Annual Report filed on Form 10-K.

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In the event of a sustained market deterioration, we may need additional capital, which would require us to evaluate available alternatives and take appropriate actions.

Our cash position at May 31, 2023 was $359.3 million, an increase of $136.1 million from August 31, 2022.

Our cash position at November 30, 2023 was $513.3 million, an increase of $115.4 million from August 31, 2023.

Cash generated from operating activities and cash on hand were used during the current year to fund our capital allocation priorities as discussed below.

We generated $471.5 million of cash flows from operating activities during the nine months ended May 31, 2023, compared with $165.7 million in the prior-year period, an increase of $305.8 million.

This increase was due primarily to increased cash collections from customers and fewer inventory purchases during the current period, partially offset by the timing of payments for purchases on account.

We generated $190.0 million of cash flows from operating activities during the three months ended November 30, 2023, compared to $186.6 million in the prior-year period, an increase of $3.4 million.

This increase was due primarily to increased pre-tax income, partially offset by lower collections from customers.

Financing Arrangements

See the Debt and Lines of Credit footnote of the Notes to Consolidated Financial Statements for discussion of the terms of our various financing arrangements, including the $500.0 million aggregate principal amount of 2.150% senior unsecured notes due December 15, 2030 (the “Unsecured Notes”) as well as the terms of our $600.0 million five-year unsecured revolving credit facility (“Revolving Credit Facility”).

At May 31, 2023, our outstanding debt balance was $495.4 million, which consisted solely of our Unsecured Notes, compared to our cash position of $359.3 million.

We were in compliance with all covenants under our financing arrangements as of May 31, 2023.

At May 31, 2023, we had additional borrowing capacity under the Revolving Credit Facility of $596.2 million under the most restrictive covenant in effect at the time, which represents the full amount of the Revolving Credit Facility less outstanding letters of credit of $3.8 million issued under the facility.

As of May 31, 2023, our cash on hand combined with the additional borrowing capacity under the Revolving Credit Facility totaled $955.5 million.

At November 30, 2023, our outstanding debt balance was $495.7 million, which consisted solely of our Unsecured Notes, compared to our cash position of $513.3 million.

We were in compliance with all covenants under our financing arrangements as of November 30, 2023.

At November 30, 2023, we had additional borrowing capacity under the Revolving Credit Facility of $596.2 million under the most restrictive covenant in effect at the time, which represents the full amount of the Revolving Credit Facility less outstanding letters of credit of $3.8 million issued under the facility.

As of November 30, 2023, our cash on hand combined with the additional borrowing capacity under the Revolving Credit Facility totaled $1.1 billion.

The Unsecured Notes were issued by Acuity Brands Lighting, Inc., a wholly-owned subsidiary of Acuity Brands, Inc.

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The following tables present summarized financial information for Acuity Brands, Inc., Acuity Brands Lighting, Inc., and ABL IP Holding LLC on a combined basis after the elimination of all intercompany balances and transactions between the combined group as well as any investments in non-guarantors as of the dates and during the period presented (in millions):

Summarized Balance Sheet Information May 31, 2023 August 31, 2022

Summarized Balance Sheet Information November 30, 2023 August 31, 2023

Current assets $ 1,120.1 $ 995.7

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Non-current liabilities 792.1 785.4

Summarized Income Statement Information Nine Months Ended May 31, 2023

Summarized Income Statement Information Three Months Ended November 30, 2023

Net sales $ 777.3

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Investments in Current Business for Growth

We invested $48.0 million and $38.0 million in property, plant, and equipment during the nine months ended May 31, 2023 and 2022, respectively.

We invested more in fiscal 2023 primarily for investments in new and enhanced equipment, facility improvements, and information technology.

We invested $14.6 million and $18.2 million in property, plant, and equipment during the three months ended November 30, 2023 and 2022, respectively.

We invested primarily in new and enhanced information technology, equipment, and facility improvements in fiscal 2024.

Strategic Acquisitions, Investments, and Divestitures

We seek opportunities to strategically expand and enhance our portfolio of solutions.

There were no acquisitions or divestitures during the first three months of fiscal 2024.

On May 15, 2023, using cash on hand, we acquired all of the equity interests of KE2 Therm Solutions, Inc.

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This acquisition is intended to expand ISG's technology and controls product portfolio and reach new customers.

We sold our Sunoptics prismatic skylights business in November 2022.

We recognized a pre-tax loss of $11.2 million on the sale of this business.

There were no acquisitions during the first nine months of fiscal 2022.

The $12.2 million of cash outflows reflected in the fiscal 2022 Consolidated Statements of Cash Flows relate to working capital settlements for fiscal 2021 acquisitions.

Please refer to the Acquisitions and Divestitures footnote of the Notes to Consolidated Financial Statements for more information.

We paid dividends on our common stock of $12.7 million ($0.39 per share) and $13.7 million ($0.39 per share) during the nine months ended May 31, 2023 and 2022, respectively.

We sold our Sunoptics prismatic skylights business in November 2022 and recognized a pre-tax loss of $11.2 million on the sale of this business.

Refer to the Acquisitions and Divestitures footnote of the Notes to Consolidated Financial Statements for more information.

We paid dividends on our common stock of $4.1 million ($0.13 per share) and $4.3 million ($0.13 per share) during the three months ended November 30, 2023 and 2022, respectively.

All decisions regarding the declaration and payment of dividends are at the discretion of the Board of Directors (the “Board”) and are evaluated regularly in light of our financial condition, earnings, growth prospects, funding requirements, applicable law, and any other factors the Board deems relevant.

Share Repurchases

During the first nine months of fiscal 2023, we repurchased 1.3 million shares of our outstanding common stock for $218.8 million.

Total cash outflows for share repurchases during the nine months ended May 31, 2023 were $216.2 million.

During the first three months of fiscal 2024, we repurchased 0.3 million shares of our outstanding common stock for $50.0 million.

Total cash outflows for share repurchases during the three months ended November 30, 2023 were $48.2 million.

We expect to repurchase shares on an opportunistic basis subject to various factors including stock price, Company performance, market conditions, and other possible uses of cash.

As of May 31, 2023, the maximum number of shares that may yet be repurchased under the share repurchase program authorized by the Board equaled 1.5 million shares.

As of November 30, 2023, the maximum number of shares that may yet be repurchased under the share repurchase program authorized by the Board equaled 0.9 million shares.

Results of Operations

Third Quarter of Fiscal 2023 Compared with Third Quarter of Fiscal 2022

The following table sets forth information comparing the components of net income for the three months ended May 31, 2023 and 2022 (in millions except per share data):

First Quarter of Fiscal 2024 Compared with First Quarter of Fiscal 2023

The following table sets forth information comparing the components of net income for the three months ended November 30, 2023 and 2022 (in millions except per share data):

Three Months Ended

May 31, 2023 May 31, 2022 Increase (Decrease) Percent Change

November 30, 2023 November 30, 2022 Increase (Decrease) Percent Change

Net sales $ 934.7 $ 997.9 $ (63.2) (6.3) %

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Selling, distribution, and administrative expenses 295.5 300.7 (5.2) (1.7) %

Special charges — 6.9 (6.9) NM

Operating profit 132.9 108.9 24.0 22.0 %

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Interest expense, net 0.9 6.6 (5.7) (86.4) %

Miscellaneous expense (income), net 0.7 (1.5) 2.2 NM

Miscellaneous expense, net 1.1 9.1 (8.0) NM

Total other expense 2.0 15.7 (13.7) (87.3) %

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Net sales for the three months ended May 31, 2023 decreased $60.3 million, or 5.7%, to $1.0 billion, compared with $1.1 billion in the prior-year period due to declines in sales within our ABL segment, partially offset by higher sales within our ISG segment.

Changes in foreign currency rates, the divestiture from our Sunoptics prismatic skylight business, and the acquisition of KE2 Therm did not have meaningful impacts on net sales for the third quarter of fiscal 2023.

Gross profit for the third quarter of fiscal 2023 increased $2.2 million, or 0.5%, to $447.3 million, compared with $445.1 million in the prior-year period, and gross profit margin increased 270 basis points to 44.7% from 42.0% compared with the prior-year period.

Our gross profit increased compared with the prior year as price increases as well as favorable material and freight costs were partially offset by labor and other cost escalations.

Net sales for the first quarter of fiscal 2024 decreased $63.2 million, or 6.3%, to $934.7 million, compared with $997.9 million in the prior-year period due to a decline in sales within our ABL segment, partially offset by higher sales within our ISG segment.

The fiscal 2023 acquisition of KE2 Therm and divestiture of our Sunoptics business did not have meaningful impacts on consolidated net sales for the first quarter of fiscal 2024.

Gross profit for the first quarter of fiscal 2024 increased $11.9 million, or 2.9%, to $428.4 million, compared with $416.5 million in the prior-year period, and gross profit margin increased 410 basis points to 45.8% from 41.7% compared with the prior-year period.

Our gross profit increased compared with the prior period due primarily to favorable material and import costs, partially offset by higher labor, overhead, and quality costs as well as the fall through of the net sales decline.

Operating Profit

Selling, distribution, and administrative expenses ("SD&A") expenses for the three months ended May 31, 2023 were $304.0 million, compared with $302.4 million in the prior-year period, an increase of $1.6 million, or 0.5%.

The increase in SD&A expenses was due primarily to higher employee-related costs.

Operating profit for the third quarter of fiscal 2023 was $143.3 million (14.3% of net sales), compared with $142.7 million (13.5% of net sales) for the prior-year period, an increase of $0.6 million, or 0.4%.

The increase in operating profit was due to the increase in gross profit, partially offset by higher SD&A expenses.

Selling, distribution, and administrative expenses (“SD&A”) expenses for the first quarter of fiscal 2024 were $295.5 million, compared with $300.7 million in the prior-year period, a decrease of $5.2 million, or 1.7%.

The decrease in SD&A expenses was due primarily to lower commissions, freight costs, and amortization, partially offset by higher employee-related costs.

Amortization expense of definite-lived intangibles decreased in fiscal 2024 as we recorded $4.0 million of accelerated amortization for intangibles associated in fiscal 2023 with certain brands that were discontinued.

Operating profit for the first quarter of fiscal 2024 was $132.9 million (14.2% of net sales), compared with $108.9 million (10.9% of net sales) for the prior-year period, an increase of $24.0 million, or 22.0%.

The increase in operating profit was due primarily to the increase in gross profit, partially offset by lower operating expenses.

We recognized special charges of $6.9 million during the first quarter of fiscal 2023.

Please refer to the Special Charges footnote of the Note to Consolidated Financial Statements for further details.

Interest Expense, net

Interest expense, net, was $3.9 million and $6.2 million for the third quarter of fiscal 2023 and 2022, respectively.

The decrease in net interest expense was due to changes in investing rates compared to the prior year as well as changes in average short-term borrowings outstanding.

Interest expense, net, was $0.9 million and $6.6 million for the first quarter of fiscal 2024 and 2023, respectively.

The decrease in net interest expense was due to higher investing rates on our interest-bearing cash and cash equivalents as well as lower average short-term borrowings outstanding.

Miscellaneous Expense, net

Miscellaneous expense, net consists of non-service related components of net periodic pension cost, gains and losses associated with foreign currency-related transactions, and non-operating gains and losses.

We reported net miscellaneous expense of $0.7 million and net miscellaneous income $1.5 million for the third quarter of fiscal 2023 and 2022, respectively.

This year-over-year increase in net miscellaneous expense is due primarily to an increase in net pension cost and, to a lesser extent, unfavorable foreign currency transaction net gains and losses.

Miscellaneous expense, net consists of non-service components of net periodic pension cost, gains and losses associated with foreign currency-related transactions, and non-operating gains and losses.

We reported net miscellaneous expense of $1.1 million and $9.1 million for the first quarter of fiscal 2024 and 2023, respectively.

This year-over-year decrease is due primarily to the recognition of an $11.2 million loss on the sale of our Sunoptics prismatic skylights business in fiscal 2023, partially offset by the impact of foreign currency-related items compared to the prior year.

Income Taxes and Net Income

Our effective income tax rate was 24.3% and 23.4% for the third quarter of fiscal 2023 and 2022, respectively.

Net income for the third quarter of fiscal 2023 decreased $0.7 million, or 0.7%, to $105.0 million, from $105.7 million reported for the prior-year period.

Diluted earnings per share for the three months ended May 31, 2023 increased $0.21, or 6.8%, to $3.28 compared with diluted earnings per share of $3.07 for the prior-year period.

This increase reflects lower outstanding diluted shares, partially offset by lower net income.

Our effective income tax rate was 23.1% and 19.6% for the first quarter of fiscal 2024 and 2023, respectively.

This decline was due primarily to the recognition of higher favorable discrete items in the prior year.

Net income for the first quarter of fiscal 2024 increased $25.7 million, or 34.3%, to $100.6 million, from $74.9 million reported for the prior-year period.

Diluted earnings per share for the first quarter of fiscal 2024 increased $0.92, or 40.2%, to $3.21 compared with diluted earnings per share of $2.29 for the prior-year period.

This increase reflects higher net income as well as lower outstanding diluted shares.

Segment Results

The following table sets forth information comparing the operating results of our segments, ABL and ISG, for the three months ended May 31, 2023 and 2022 (in millions):

The following table sets forth information comparing the operating results of our segments, ABL and ISG, for the three months ended November 30, 2023 and 2022 (in millions):

Three Months Ended

May 31, 2023 May 31, 2022 Increase (Decrease) Percent Change

November 30, 2023 November 30, 2022 Increase (Decrease) Percent Change

Net sales $ 876.4 $ 947.1 $ (70.7) (7.5) %

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Operating profit margin 8.3 % 13.6 % (530) bps

ABL net sales for the three months ended May 31, 2023 decreased $67.7 million, or 6.7%, to $940.7 million, compared with $1.0 billion in the prior-year period.

Sales within the ABL segment decreased due to lower net sales within the independent sales network, the OEM and other, and corporate accounts channels, partially offset by increased net sales in our direct sales network and retail sales channels.

Operating profit for ABL was $150.0 million (15.9% of ABL net sales) for the three months ended May 31, 2023, compared with $149.6 million (14.8% of ABL net sales) in the prior-year period, an increase of $0.4 million.

ABL net sales for the first quarter of fiscal 2024 decreased $70.7 million, or 7.5%, to $876.4 million, compared with $947.1 million in the prior-year period.

Sales within the ABL segment decreased due to lower net sales across all channels except the retail sales channel.

Operating profit for ABL was $143.8 million (16.4% of ABL net sales) for the first quarter of fiscal 2024, compared with $118.1 million (12.5% of ABL net sales) in the prior-year period, an increase of $25.7 million.

The increase in operating profit was due primarily to improved profitability on lower sales, partially offset by increased employee-related costs.

ISG net sales for the three months ended May 31, 2023 increased $7.5 million, or 12.9%, to $65.8 million, compared with $58.3 million in the prior-year period.

Sales within the ISG segment increased due to price increases as well as favorable product mix.

ISG operating profit was $8.6 million for the three months ended May 31, 2023, compared with $9.2 million in the prior-year period, a decrease of $0.6 million.

This decrease was due primarily to increased employee-related costs, partially offset by contributions from higher sales.

First Nine Months of Fiscal 2023 Compared with First Nine Months of Fiscal 2022

The following table sets forth information comparing the components of net income for the nine months ended May 31, 2023 and 2022 (in millions except per share data):

Nine Months Ended

May 31, 2023 May 31, 2022 Increase (Decrease) Percent Change

Net sales $ 2,941.8 $ 2,895.8 $ 46.0 1.6 %

Cost of products sold 1,671.3 1,685.6 (14.3) (0.8) %

Gross profit 1,270.5 1,210.2 60.3 5.0 %

Percent of net sales 43.2 % 41.8 % 140 bps

Selling, distribution, and administrative expenses 899.9 850.1 49.8 5.9 %

Special charges 6.9 — 6.9 NM

Operating profit 363.7 360.1 3.6 1.0 %

Percent of net sales 12.4 % 12.4 % — bps

Other expense:

Interest expense, net 16.2 18.1 (1.9) (10.5) %

Miscellaneous expense (income), net 6.1 (3.1) 9.2 NM

Total other expense 22.3 15.0 7.3 48.7 %

Income before income taxes 341.4 345.1 (3.7) (1.1) %

Percent of net sales 11.6 % 11.9 % (30) bps

Income tax expense 78.3 76.5 1.8 2.4 %

Effective tax rate 22.9 % 22.2 %

Net income $ 263.1 $ 268.6 $ (5.5) (2.0) %

Diluted earnings per share $ 8.13 $ 7.66 $ 0.47 6.1 %

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Net sales for the nine months ended May 31, 2023 increased $46.0 million, or 1.6%, to $2.94 billion compared with $2.90 billion in the prior-year period.

Both our ABL and ISG segments benefited from recent price increases.

Changes in foreign currency rates, the divestiture from our Sunoptics prismatic skylight business, and the acquisition of KE2 Therm did not have a meaningful impact on net sales for the first nine months of fiscal 2023.

Gross profit for the nine months ended May 31, 2023 increased $60.3 million, or 5.0%, to $1.3 billion compared with $1.2 billion in the prior-year period.

Gross profit margin increased 140 basis points to 43.2% for the nine months ended May 31, 2023 compared with 41.8% in the prior-year period.

Our gross profit increased compared with the prior year as price increases more than offset materials, labor, and other cost escalations.

Operating Profit

SD&A expenses for the nine months ended May 31, 2023 were $899.9 million compared with $850.1 million in the prior-year period, an increase of $49.8 million, or 5.9%.

The increase in SD&A expense was due primarily to higher commissions associated with higher sales as well as higher employee-related costs.

Additionally, in the first quarter of fiscal 2023 we recorded $4.0 million of accelerated amortization for intangibles associated with certain brands that were discontinued.

We also recognized special charges of $6.9 million during the first quarter of fiscal 2023.

Please refer to the Special Charges footnote of the Notes to Consolidated Financial Statements for further details.

Operating profit for the first nine months of fiscal 2023 was $363.7 million (12.4% of net sales) compared with $360.1 million (12.4% of net sales) for the prior-year period, an increase of $3.6 million, or 1.0%.

The increase in operating profit was due primarily to higher gross profit associated with the increase in sales, partially offset by

higher SD&A expenses, which includes the aforementioned acceleration of amortization and special charges in the first quarter of fiscal 2023.

Interest Expense, net

Interest expense, net, was $16.2 million and $18.1 million for the nine months ended May 31, 2023 and 2022, respectively.

The decrease in net interest expense was due to increased investing rates compared to the prior year, partially offset by changes in average short-term borrowings outstanding.

Miscellaneous Expense, net

We reported net miscellaneous expense of $6.1 million for the nine months ended May 31, 2023 and net miscellaneous income of $3.1 million for the nine months ended May 31, 2022.

This year-over-year change was largely due to the $11.2 million loss of the sale of the Sunoptics prismatic skylights business during fiscal 2023 as well as higher net pension cost, partially offset by higher gains on foreign currency-related items compared to the prior year.

The details of the Sunoptics sale are described in the Acquisitions and Divestitures footnote of the Notes to Consolidated Financial Statements.

Income Taxes and Net Income

Our effective income tax rate was 22.9% and 22.2% for the nine months ended May 31, 2023 and 2022, respectively.

Net income for the first nine months of fiscal 2023 decreased $5.5 million, or 2.0%, to $263.1 million from $268.6 million reported for the prior-year period.

The decrease in net income resulted primarily from $22.1 million in combined pre-tax losses and special charges recognized from the Sunoptics sale and other restructuring activities as well as accelerated amortization of intangible assets during the first quarter of fiscal 2023, partially offset by the fall through of higher sales.

Diluted earnings per share for the nine months ended May 31, 2023 increased $0.47 to $8.13 compared with diluted earnings per share of $7.66 for the prior-year period.

This increase reflects lower outstanding diluted shares, partially offset by lower net income.

Segment Results

The following table sets forth information comparing the operating results of our segments, ABL and ISG, for the nine months ended May 31, 2023 and 2022 (in millions):

Nine Months Ended

May 31, 2023 May 31, 2022 Increase (Decrease) Percent Change

Net sales $ 2,778.6 $ 2,755.1 $ 23.5 0.9 %

Operating profit 391.7 394.2 (2.5) (0.6) %

Operating profit margin 14.1 % 14.3 % (20) bps

Net sales $ 180.8 $ 154.7 $ 26.1 16.9 %

Operating profit 22.7 12.4 10.3 83.1 %

Operating profit margin 12.6 % 8.0 % 460 bps

ABL net sales for the nine months ended May 31, 2023 increased 0.9% compared with the prior-year period due primarily to higher net sales within the independent sales network, direct sales network, and retail sales channels, partially offset by declines in our OEM and other channel.

Operating profit for ABL was $391.7 million (14.1% of ABL net sales) for the nine months ended May 31, 2023 compared to $394.2 million (14.3% of ABL net sales) in the prior-year period, a decrease of $2.5 million.

The decrease in operating profit was due primarily to the recognition of nonrecurring items in the first quarter of fiscal 2023, including special charges of $6.9 million and acceleration of amortization for definite-lived intangibles related

to brands that were discontinued of $4.0 million, as well as increased commission rates.

These unfavorable impacts were partially offset by profit realized on increased sales.

ISG net sales for the nine months ended May 31, 2023 increased 16.9% compared with the prior-year period primarily driven by price increases as well as strong demand for building management controls.

ISG operating profit was $22.7 million for the nine months ended May 31, 2023 compared with $12.4 million in the prior-year period, an increase of $10.3 million.

This increase was due primarily to contributions from higher sales, partially offset by increased employee-related costs.

During the first quarter of fiscal 2023, we recorded $6.9 million of special charges and $4.0 million of accelerated amortization expense for intangibles associated with certain brands that were discontinued.

ISG net sales for the first quarter of fiscal 2024 increased $7.4 million, or 13.0%, to $64.2 million, compared with $56.8 million in the prior-year period.

Sales within the ISG segment increased due to the acquisition of KE2 Therm, price increases, and favorable product mix.

ISG operating profit was $5.3 million for the first quarter of fiscal 2024, compared with $7.7 million in the prior-year period, a decrease of $2.4 million.

This decrease was due primarily to increased employee-related costs and professional fees, partially offset by higher net sales.

Critical Accounting Estimates

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This filing contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the “Act”).

Forward-looking statements use words such as “expect,” “believe,” “intend,” “anticipate,” “indicative,” “projection,” “predict,” “plan,” “may,” “could,” “should,” “would,” “potential,” and words of similar meaning, as well as other words or expressions referencing future events, conditions, or circumstances.

Forward-looking statements include, among other things, statements that describe or relate to the Company’s plans, initiatives, projections, vision, goals, targets, commitments, expectations, objectives, prospects, strategies, or financial outlook, and the assumptions underlying or relating thereto.

In some cases, we may use words such as “expect,” “believe,” “intend,” “anticipate,” “estimate,” “forecast,” “indicate,” “project,” “predict,” “plan,” “may,” “will,” “could,” “should,” “would,” “potential,” and words of similar meaning, as well as other words or expressions referencing future events, conditions, or circumstances, to identify forward-looking statements.

We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Act.

Statements that describe or relate to the Company’s plans, goals, intentions, strategies, or financial outlook, and statements that do not relate to historical or current fact, are examples of forward-looking statements.

Forward-looking statements are not guarantees of future performance.

Our forward-looking statements are based on our current beliefs, expectations, and assumptions, which may not prove to be accurate, and are subject to known and unknown risks and uncertainties, many of which are outside of our control.

These risks and uncertainties could cause actual results to differ materially from our historical experience and management’s present expectations or projections.These risks and uncertainties are discussed in our filings with the U.S.

These risks and uncertainties could cause actual events or results to differ materially from our historical experience and management’s present expectations or projections.

These risks and uncertainties are discussed in our filings with the U.S.

Securities and Exchange Commission, including our most recent annual report on Form 10-K (including, but not limited to, Part I, Item 1A.

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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