What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-21 compared with 2024-02-16 · 193 added, 173 removed, 1117 unchanged (25% of the section changed)

12 unchanged sentences

Opinions on the Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Balchem Corporation and its subsidiaries (the Company) as of December 31, 2023 and 2022, and the related consolidated statements of earnings, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and schedule listed at Item 8 (collectively, the financial statements).

We have audited the accompanying consolidated balance sheets of Balchem Corporation and subsidiaries (the Company) as of December 31, 2024 and 2023, and the related consolidated statements of earnings, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and schedule (collectively, the financial statements).

We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

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The Company considers the impact of factors that are specific to each of the reporting units such as industry and economic changes as well as projected sales and expense growth rates based upon annual budgets and longer-range strategic plans, which are highly sensitive to changes in domestic and foreign economic conditions, and the selection of appropriate discount rates.

Given the significant estimates and assumptions management makes to determine the fair value of the reporting units and the sensitivity of the operations to changes in U.S.

and foreign economic conditions, we identified management’s assumptions related to the sales and expense growth rates, the discount rates, and the terminal value calculation utilized in the valuation of the reporting units within the Company’s goodwill impairment tests as a critical audit matter.

Given the significant estimates and assumptions management makes to determine the fair value of the reporting units we identified management’s assumptions related to the sales growth rates, projected gross margin rates and certain components of the discount rates utilized in the valuation of the reporting units within the Company’s goodwill impairment tests as a critical audit matter.

Auditing the reasonableness of management’s estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

Our audit procedures related to sales and expense growth rates, discount rates, and the terminal value calculation utilized in the valuation of the Company’s reporting units included the following, among others:

• We obtained an understanding of the relevant controls related to the valuation of the Company’s reporting units and tested such controls for design and operating effectiveness, including management review controls related to sales and expense growth rates and the selection of appropriate discount rates.

• We evaluated the reasonableness of management’s forecasts of sales and expense growth rates by comparing the forecasts to (1) the historical results, (2) internal communications to management and the Board of Directors, and (3) external communications made by management to analysts and investors, as applicable.

• We evaluated changes in the regulatory environment using industry reports containing analysis of the Company’s markets and assessed whether these changes were reflected in management’s forecasts of sales and expense growth rates.

• We evaluated the reasonableness of management’s forecasts of sales growth rates and projected gross margin rates by comparing the forecasts to:

(1) the historical results, (2) internal communications to management and the Board of Directors, and (3) external communications made by management to analysts and investors, as applicable.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the discount rates and tested the relevance and reliability of source information underlying the determination of the discount rates, tested the mathematical accuracy of the calculation, and developed a range of independent estimates and compared those to the discount rates selected by management.

• With the assistance of our fair value specialists, we evaluated the reasonableness and tested the mathematical accuracy of the terminal value calculations.

/s/ RSM US LLP

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Cash and cash equivalents $ 49,515 $ 64,447

Accounts receivable, net of allowance for doubtful accounts of $ 908 and $ 1,226 at

Accounts receivable, net of allowance for credit losses of $ 909 and $ 908 at

December 31, 2024 and 2023, respectively

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Prepaid expenses 8,054 7,798

Derivative assets — 5,993

Other current assets 5,737 7,192

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Authorized 120,000,000 shares;

32,254,728 shares issued and outstanding at December 31, 2023 and 32,152,787 shares issued and outstanding at December 31, 2022, respectively

32,527,244 shares issued

and outstanding at December 31, 2024 and 32,254,728 shares issued and outstanding at

December 31, 2023, respectively

Additional paid-in capital 173,997 145,653

Retained earnings 997,493 897,488

Accumulated other comprehensive income (loss) 8,691 ( 7,154 )

Accumulated other comprehensive (loss) income ( 23,747 ) 8,691

Total stockholders’ equity 1,149,913 1,053,984

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Net earnings $ 128,475 $ 108,543 $ 105,367

Other comprehensive income (loss), net of tax:

Other comprehensive (loss) income, net of tax:

Net foreign currency translation adjustment ( 32,590 ) 16,809 ( 4,799 )

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152 101 ( 58 )

Other comprehensive income (loss), net of tax 15,845 ( 2,161 ) ( 9,166 )

Other comprehensive (loss) income, net of tax ( 32,438 ) 15,845 ( 2,161 )

Comprehensive income $ 96,037 $ 124,388 $ 103,206

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Comprehensive

Income (Loss) Common Stock Additional

(Loss) Income Common Stock Additional

Shares Amount

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Net earnings 108,543 108,543 — — — —

Other comprehensive loss ( 2,161 ) — ( 2,161 ) — — —

Other comprehensive income 15,845 — 15,845 — — —

Dividends ($ .79 per share)

( 25,542 ) ( 25,542 ) — — — —

Repurchases of common stock ( 35,423 ) — — ( 252,304 ) ( 16 ) ( 35,407 )

Repurchases of common stock, including excise tax ( 4,514 ) — — ( 32,558 ) ( 2 ) ( 4,512 )

Shares and options issued under stock plans 21,368 — — 134,499 9 21,359

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Net earnings 128,475 128,475 — — — —

Other comprehensive income 15,845 — 15,845 — — —

Other comprehensive loss ( 32,438 ) — ( 32,438 ) — — —

Dividends ($ .87 per share)

( 28,470 ) ( 28,470 ) — — — —

Repurchases of common stock, including excise tax * ( 4,514 ) — — ( 32,558 ) ( 2 ) ( 4,512 )

Repurchases of common stock ( 5,682 ) — — ( 38,922 ) ( 3 ) ( 5,679 )

Shares and options issued under stock plans 34,044 — — 311,438 21 34,023

Balance - December 31, 2024 $ 1,149,913 $ 997,493 $ ( 23,747 ) 32,527,244 $ 2,170 $ 173,997

* On August 16, 2022, the U.S.

government enacted the Inflation Reduction Act (the "IRA") into law.

The IRA imposes a 1% excise tax on share repurchases, which is effective for repurchases completed after December 31, 2022.

The excise tax is recorded within equity as part of the repurchase of the common stock.

See accompanying notes to consolidated financial statements.

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Deferred income taxes ( 6,779 ) ( 10,814 ) ( 8,362 )

Provision for doubtful accounts 37 401 180

Unrealized (gain) loss on foreign currency transactions and deferred compensation ( 733 ) 914 ( 384 )

Asset impairment charge and (gain) loss on disposal of assets 7,031 366 ( 53 )

Provision for credit losses 299 37 401

Unrealized (gain) loss on foreign currency transactions and deferred

compensation ( 100 ) ( 733 ) 914

Asset impairment charge and loss on disposal of assets 1,664 7,031 366

Change in fair value of contingent consideration liability ( 91 ) ( 11,300 ) —

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Proceeds from settlement of net investment hedge — 2,740 —

Proceeds from insurance — — 1,831

Investment in affiliates ( 270 ) ( 290 ) ( 495 )

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Principal payments on revolving debt ( 145,569 ) ( 149,000 ) ( 103,000 )

Principal payment on acquired debt — ( 30,988 ) —

Principal payments on acquired debt — — ( 30,988 )

Cash paid for financing costs — — ( 1,232 )

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Effect of exchange rate changes on cash ( 3,380 ) 2,260 ( 5,880 )

(Decrease) increase in cash and cash equivalents ( 2,113 ) ( 36,679 ) 18,668

Decrease in cash and cash equivalents ( 14,932 ) ( 2,113 ) ( 36,679 )

Cash and cash equivalents beginning of period 64,447 66,560 103,239

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Business Description

Balchem Corporation (“Balchem” or the “Company”), including, unless the context otherwise requires, its wholly-owned subsidiaries, incorporated in the State of Maryland in 1967, is engaged in the development, manufacture and marketing of specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical, agricultural, and medical sterilization industries.

Principles of Consolidation

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All significant intercompany balances and transactions have been eliminated in consolidation.

Certain reclassifications have been made to prior period amounts to conform with the current period's presentation.

Revenue Recognition

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Credit terms are granted in the normal course of business to the Company’s customers and on-going credit evaluations are performed on the Company’s customers.

In June 2016, the FASB issued Accounting Standards Update ("ASU") No.

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2016-13, "Financial Instruments - Credit Losses (Topic 326):

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Based on this ASU, customers' credit limits are adjusted based upon their reasonably expected credit worthiness which is determined through review of their payment history, their current credit information, and any foreseeable future events.

Collections and payments from customers are continuously monitored and allowances for doubtful accounts for estimated losses resulting from the inability of the Company’s customers to make required payments are maintained.

Collections and payments from customers are continuously monitored and allowances for credit losses for estimated losses resulting from the inability of the Company’s customers to make required payments are maintained.

Estimated losses are based on historical experience, any specific customer collection issues identified, and any reasonably expected future adverse events.

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The Company assessed the fair values of its reporting units by utilizing the income approach, based on a discounted cash flow valuation model as the basis for its conclusions.

The Company's estimates of future cash flows included significant management assumptions such as revenue growth rates, operating margins, discount rates, estimated terminal values and future economic and market conditions.

The Company's estimates of future cash flows included significant management assumptions such as revenue growth rates, operating margins, certain components of

the discount rates, estimated terminal values and future economic and market conditions.

The Company's assessment concluded that the fair values of the reporting units exceeded their carrying amounts, including goodwill.

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The Company may resume performing the qualitative assessment in subsequent periods.

The Company had goodwill in the amount of $ 778,907 and $ 769,509 as of December 31, 2023 and 2022, respectively, subject to the provisions of ASC 350, “Intangibles-Goodwill and Other.”

Goodwill at December 31, 2021 $ 523,949

Goodwill as a result of the Kappa acquisition 216,295

Goodwill as a result of the Bergstrom acquisition 31,209

Impact due to change in foreign exchange rates ( 1,944 )

Goodwill at December 31, 2022 769,509

Goodwill as a result of the Bergstrom acquisition 341

Impact due to change in foreign exchange rates 9,057

Goodwill at December 31, 2023 $ 778,907

December 31, 2023 December 31, 2022

HNH $ 673,207 $ 665,804

ANH 24,469 24,218

Specialty Products 81,175 79,429

Other and Unallocated 56 58

Total $ 778,907 $ 769,509

The following intangible assets with finite lives are stated at cost and are amortized either on an accelerated basis or on a straight-line basis over the following estimated useful lives:

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The money market and rabbi trust funds are valued using level one inputs, as defined by ASC 820, "Fair Value Measurement."

The Company also had derivative financial instruments, consisting of a cross-currency swap and an interest rate swap, which were included in derivative assets and derivative liabilities, in the consolidated balance sheets (see Note 20, Derivative Instruments and Hedging Activities ).

The fair values of these derivative instruments were determined based on Level 2 inputs, using significant inputs that were observable either directly or indirectly, including interest rate curves and implied volatilities.

These derivatives were settled on their maturity date on June 27, 2023 and there were no other derivatives outstanding as of December 31, 2023.

Cost of Sales

Cost of sales are primarily comprised of raw materials and supplies consumed in the manufacture of product, as well as manufacturing labor, maintenance labor, depreciation expense, and direct overhead expense necessary to convert purchased materials and supplies into finished product.

Cost of sales are primarily comprised of raw materials consumed in the manufacture of product, as well as manufacturing labor, maintenance labor, depreciation expense, and overhead expense necessary to convert purchased materials and supplies into finished product.

Cost of sales also includes inbound freight costs, outbound freight costs for shipping products to customers, warehousing costs, quality control and obsolescence expense.

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The derivative instruments were with the above single counterparty and were subject to a contractual agreement that provided for the net settlement of all contracts through a single payment in a single currency in the event of default on or termination of any one contract.

As such, the derivative instruments were categorized as a master netting arrangement and presented as a net derivative asset or derivative liability on the consolidated balance sheet as of December 31, 2022.

The Company settled its derivative instruments on their maturity date of June 27, 2023 and had no other derivatives outstanding as of December 31, 2023.

As such, the derivative instruments were categorized as a master netting arrangement and presented as a net derivative asset or derivative liability on the consolidated balance sheet.

The Company settled its derivative instruments on their maturity date of June 27, 2023 and had no other derivatives outstanding as of December 31, 2024 and 2023.

On a quarterly basis through their maturity, we assessed the effectiveness of the hedging relationships for the interest rate swap and cross-currency swap by reviewing the critical terms indicated in the applicable agreement.

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Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40)." The new guidance is intended to enhance transparency and disclosures by requiring public entities to provide disaggregated disclosures of certain categories of expenses on an annual and interim basis.

The ASU is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on the consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740) - Improvements to Income Tax Disclosures." The new guidance is intended to enhance the transparency and decision usefulness of income tax disclosures by requiring disaggregated information about a reporting entity's effective tax rate reconciliation and information on income taxes paid.

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The amendment in this Update should be applied on a prospective basis, with retrospective application permitted.

The Company is in the process of evaluating the impact that the adoption of ASU 2023-09 will have to the financial statements and related disclosures.

The Company is currently evaluating the impact that the adoption of ASU 2023-09 will have on the consolidated financial statements and related disclosures.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures." The ASU expands reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss.

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ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning December 15, 2024.

Early adoption is permitted and the amendments must be applied retrospectively to all prior periods presented.

The adoption of this guidance will not affect the Company's consolidated results of operations, financial position or cash flows.

The Company is currently evaluating the effect the guidance will have on its disclosures.

In August 2023, the FASB issued ASU 2023-05, "Business Combinations - Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement." The new guidance applies to the formation of a joint venture and requires a joint venture to initially measure all contributions received upon its formation at fair value.

The guidance is intended to reduce diversity in practice and is applicable to joint venture entities with a formation date on or after January 1, 2025 on a prospective basis.

While ASU 2023-05 is not currently applicable to Balchem, the Company will apply this guidance in future reporting periods after the guidance is effective to any future arrangements meeting the definition of a joint venture.

The Company adopted this accounting guidance on December 31, 2024, and applied it retrospectively to all prior periods presented in our consolidated financial statements.

Refer to Note 11, Segment Information for the expanded disclosures.

In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848):

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In connection with this transaction, the former shareholders of Bergstrom had an opportunity to receive an additional payment in 2024 if certain financial performance targets and other metrics were met.

As of December 31, 2023, the earn-out periods concluded and the Company recorded a contingent consideration liability of $ 100 which was included in "Accrued expenses" on the consolidated balance sheets.

The earn-out payment of $ 9 was paid out in 2024.

Therefore, there was no contingent consideration liability at December 31, 2024.

The Company also made an additional post-closing payment of $ 910 in the third quarter of 2023 that was negotiated as a deduction of the cash consideration at closing.

As a result, total payments related to the transaction are expected to be $ 72,243 , comprised of the upfront cash

consideration of $ 70,892 , a working capital adjustment of $ 341 , an additional post-closing payment of $ 910 , and the fair value of the earn-out payment of $ 100 .

As a result, total payments related to the transaction were $ 72,152 , comprised of the upfront cash consideration of $ 70,892 , a working capital adjustment of $ 341 , an additional post-closing payment of $ 910 , and the fair value of the earn-out payment of $ 9 .

The goodwill of $ 31,550 that arose on the acquisition date consists largely of expected synergies, including the combined entities' experience and technical problem-solving capabilities, and acquired workforce.

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Net decrease to contingent consideration liability and other post-closing payments ( 6,916 )

Total expected consideration 72,037

Total consideration 71,946

To pay off bank debt 206

Total expected payments $ 72,243

Total payments $ 72,152

The fair value of tangible and intangible assets acquired and liabilities assumed is based on management’s estimates and assumptions.

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Transaction and integration costs related to the Bergstrom acquisition are included in general and administrative expenses and were $( 91 ), $( 10,614 ) and $ 4,604 for the years ended December 31, 2024, 2023, and 2022, respectively.

There were no such amounts related to this acquisition for the year ended December 31, 2021.

These amounts included favorable adjustments to transaction costs of $ 11,300 for the year ended December 31, 2023 and an unfavorable adjustment to transaction costs of $ 3,565 for the year ended December 31, 2022.

These amounts included favorable adjustments to transaction costs of $ 91 and $ 11,300 for the years ended December 31, 2024 and 2023 and an unfavorable adjustment to transaction costs of $ 3,565 for the year ended December 31, 2022.

Kechu BidCo AS and Its Subsidiary Companies ("Kappa")

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Net of cash acquired of $ 6,365 , total payments made to the former shareholders of Kappa were approximately $ 296,099 .

The acquisition was primarily financed through the 2018 Credit Agreement (see Note 8, Revolving Loan ).

The acquisition was primarily financed through the 2018 Credit Agreement.

In connection with this transaction, the former shareholders of Kappa had an opportunity to receive an additional payment in 2024 if certain financial performance targets and other metrics were met.

There was no contingent consideration liability recorded as of December 31, 2023.

There was no contingent consideration paid in connection with this acquisition.

The goodwill of $ 216,383 that arose on the acquisition date consists largely of expected synergies, including the combined entities' experience and technical problem-solving capabilities, and acquired workforce.

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Net gain on foreign currency exchange forward contracts ( 512 )

Total expected consideration 302,464

Total consideration 302,464

Kappa bank debt paid on acquisition date 30,648

Total expected payments $ 333,112

Total payments $ 333,112

The fair value of tangible and intangible assets acquired and liabilities assumed is based on management’s estimates and assumptions.

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Transaction and integration costs related to the Kappa acquisition are included in general and administrative expenses and were $ 688 , $ 533 and $( 2,306 ) for the years ended December 31, 2024, 2023, and 2022, respectively.

There were no such amounts related to this acquisition for the year ended December 31, 2021.

The amount included a favorable adjustment to transaction costs of $ 4,037 for the year ended December 31, 2022.

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Kappa & Bergstrom actual results included in the Company's consolidated income statement in 2023 $ 59,532 $ 5,487

$ 59,532 $ 5,487

Kappa & Bergstrom actual results included in the Company's consolidated income statement in 2022 $ 22,158 $ ( 5,359 )

$ 22,158 $ ( 5,359 )

2023 Supplemental pro forma combined financial $ 922,439 $ 116,317

$ 922,439 $ 116,317

2022 Supplemental pro forma combined financial $ 982,021 $ 110,181

$ 982,021 $ 110,181

2021 Supplemental pro forma combined financial $ 859,252 $ 90,672

$ 859,252 $ 90,672

The above selected unaudited pro forma information includes the following acquisition-related adjustments:

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On June 22, 2023, the Company’s shareholders approved an amendment and restatement of the 2017 Plan (the “Amended 2017 Plan”).

The Amended 2017 Plan is administered by the Compensation Committee of the Board of Directors of the Company.

Amended 2017 Plan is administered by the Compensation Committee of the Board of Directors of the Company.

The Amended 2017 Plan provides as follows:

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If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset, which is generally based on discounted cash flows.

Included in "General and administrative expenses" was $ 521 of restructuring-related impairment charges related to an asset that was held for sale for the year ended December 31, 2024.

Included in “General and administrative expenses” were restructuring-related impairment and asset disposal charges of $ 7,764 related to building, equipment, and construction in progress mainly in the Human Nutrition and Health and the Animal Nutrition and Health segments for the year ended December 31, 2023.

Such expenses for the year ended December 31, 2022 were not material.

Such expenses were not material for the year ended December 31, 2022.

NOTE 6 - INTANGIBLE ASSETS

The Company had goodwill in the amount of $ 778,907 and $ 769,509 as of December 31, 2023 and 2022, respectively, subject to the provisions of ASC 350, “Intangibles-Goodwill and Other.” The increase in goodwill is primarily due to foreign currency translation adjustments.

The Company had goodwill in the amount of $ 780,030 and $ 778,907 as of December 31, 2024 and 2023, respectively, subject to the provisions of ASC 350, “Intangibles-Goodwill and Other.” The increase in goodwill is primarily due to an acquisition, partially offset by foreign currency translation adjustments.

Goodwill at December 31, 2022 $ 769,509

Goodwill as a result of an acquisition 341

Impact due to change in foreign exchange rates 9,057

Goodwill at December 31, 2023 778,907

Goodwill as a result of an acquisition 19,376

Impact due to change in foreign exchange rates ( 18,253 )

Goodwill at December 31, 2024 $ 780,030

December 31, 2024 December 31, 2023

HNH $ 678,275 $ 673,207

ANH 23,974 24,469

Specialty Products 77,732 81,175

Other and Unallocated 49 56

Total $ 780,030 $ 778,907

As of December 31, 2024 and 2023, the Company had identifiable intangible assets as follows:

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Environmental Protection Agency (the "EPA") because they are considered pesticides.

Costs of such registrations are included as other in the table above.

Costs of such registrations are included in other in the table above.

NOTE 7 – EQUITY-METHOD INVESTMENT

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Additionally, voting rights ( 2 votes each) are not proportionate to the owners’ obligation to absorb expected losses or receive the expected residual returns of the joint venture.

The Company will receive up to 2/3 of the production offtake capacity and absorbs operating expenses approximately proportional to the actual percentage of offtake.

The Company generally receives up to 2/3 of the production offtake capacity, which (percentage of offtake) may be adjusted from time to time to the extent the owners agree as such, and absorbs operating expenses approximately proportional to the actual percentage of offtake.

The joint venture is accounted for under the equity method of accounting since the Company is not the primary beneficiary as the Company does not have the power to direct the activities of the joint venture that most significantly impact its economic performance.

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NOTE 8 – REVOLVING LOAN

On June 27, 2018, the Company and a bank syndicate entered into a credit agreement (the "2018 Credit Agreement"), which provided for revolving loans up to $ 500,000 , due on June 27, 2023.

During the second quarter of 2022, the Company borrowed $ 345,000 under the 2018 Credit Agreement to fund the Kappa acquisition (see Note 2, Significant Acquisitions ).

On July 27, 2022, the Company entered into an Amended and Restated Credit Agreement (the "2022 Credit Agreement") with certain lenders in the form of a senior secured revolving credit facility, due on July 27, 2027.

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The loans may be used for working capital, letters of credit, and other corporate purposes and may be drawn upon at the Company's discretion.

The Company used initial proceeds from the 2022 Credit Agreement to repay the outstanding balance of $ 433,569 due in June 2023 under the 2018 Credit Agreement.

During the third quarter of 2022, the Company borrowed another $ 70,000 to fund the Bergstrom acquisition (see Note 2, Significant Acquisitions ).

As of December 31, 2024 and 2023, the total balance outstanding on the 2022 Credit Agreement amounted to $ 190,000 and $ 309,569 , respectively.

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Net Earnings Per Share - Diluted $ 3.93 $ 3.35 $ 3.25

The number of anti-dilutive shares were 354,619 , 371,513 , and 155,294 for 2023, 2022, and 2021.

The number of anti-dilutive shares were 230,302 , 354,619 , and 371,513 for the years ended December 31, 2024, 2023, and 2022.

Anti-dilutive shares could potentially dilute basic earnings per share in future periods and therefore, were not included in diluted earnings per share.

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The Company’s effective tax rate for 2024, 2023 and 2022 was 22.8 %, 20.9 % , and 21.2 %, respectively .

The decrease from 2022 to 2023 is primarily due to an increase in certain tax credits.

The increase from 2023 to 2024 is primarily due to an increase in certain foreign taxes.

Income taxes are accounted for under the asset and liability method.

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The Company considers the undistributed earnings of certain non-U.S.

subsidiaries to be indefinitely reinvested outside of the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs.

However, due to prevailing economic conditions of increased interest rates and subsequent borrowing costs, the Company remitted approximately $ 18,000 from its Belgium subsidiary and has incurred an income tax expense of approximately $ 20 .

subsidiaries to be indefinitely reinvested outside of the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and the Company's specific plans for reinvestment of those subsidiary earnings.

In 2023, due to prevailing economic conditions of increased interest rates and subsequent borrowing costs, the Company remitted approximately $ 18,000 from its Belgium subsidiary and incurred an income tax expense of approximately $ 20 in the year ended December 31, 2023.

The remittance was used to pay down U.S.

The Company had unremitted foreign earnings of approximately $ 109,000 and $ 94,000 for the years ended December 31, 2023 and 2022, respectively.

There was no such remittance during the year ended December 31, 2024.

The Company projects that its foreign earnings will be utilized offshore for working capital and future foreign growth.

The determination of the unrecognized deferred tax liability on those undistributed earnings is not practicable due to its legal entity structure and the complexity of U.S.

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State income taxes, net of Federal income taxes 2,284 2,513 1,862

Change in foreign tax reserves 2,146 — —

Stock options ( 1,904 ) ( 1,004 ) ( 676 )

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Inventories $ 2,437 $ 1,049

Restricted stock and stock options 5,565 3,932

Share-based compensation 4,476 5,565

Lease liabilities 4,296 4,812

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The Company recognizes both interest and penalties as part of the income tax provision.

During the years ended December 31, 2023 and 2022, these amounts were reduced by $ 322 and $ 371 , respectively.

During the year ended December 31, 2021, this amounted to $ 262 .

During the years ended December 31, 2024, 2023 and 2022, these amounts were increased by $ 939 and reduced by $ 322 , and $ 371 , respectively.

As of December 31, 2024 and 2023, accrued interest and penalties were $ 2,352 and $ 1,413 , respectively.

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Pillar Two generally provides for a 15 percent minimum effective tax rate for the jurisdictions where multinational enterprises operate.

While the Company does not anticipate that this will have a

material impact on its tax provision or effective tax rate, the Company continues to monitor evolving tax legislation in the jurisdictions in which it operates.

While the Company does not anticipate that this will have a material impact on its tax provision or effective tax rate, the Company continues to monitor evolving tax legislation in the jurisdictions in which it operates.

NOTE 11 - SEGMENT INFORMATION

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Human Nutrition and Health, Animal Nutrition and Health, and Specialty Products.

The reportable segments are organized based on the end use of the products manufactured and sold.

Sales and production of products outside of our reportable segments and other minor business activities are included in "Other and Unallocated."

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The Company has expertise in trends analysis and product development.

With its strong manufacturing capabilities in customized spray dried and emulsified powders, extrusion and agglomeration, blended lipid systems, liquid flavor delivery systems, juice and dairy bases, chocolate systems, ice cream bases and variegates, the Company is a one-stop solutions provider for beverage and dairy product development needs.

dairy product development needs.

Additionally, this segment provides microencapsulation solutions to a variety of applications in food, pharmaceutical and nutritional ingredients to enhance performance of nutritional fortification, processing, mixing, and packaging applications and shelf-life.

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Animal Nutrition and Health

The Company’s Animal Nutrition and Health ("ANH") segment provides nutritional products derived from its microencapsulation and chelation technologies in addition to the essential nutrient choline chloride.

The Animal Nutrition and Health ("ANH") segment provides nutritional products derived from its microencapsulation and chelation technologies in addition to the essential nutrient choline chloride.

For ruminant animals, the Company’s microencapsulated products boost health and milk production by delivering nutrient supplements that are biologically available, providing required nutritional levels.

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Specialty Products

The Company re-packages and distributes a number of performance gases and chemicals for various uses by its customers, notably ethylene oxide, propylene oxide, and ammonia.

Ethylene oxide is sold as a sterilant gas, primarily for use in the health

care industry.

The Specialty Products segment ("SP") re-packages and distributes a number of performance gases and chemicals for various uses by its customers, notably ethylene oxide, propylene oxide, and ammonia.

Ethylene oxide is sold as a sterilant gas, primarily for use in the health care industry.

It is used to sterilize a wide range of medical devices because of its versatility and effectiveness in treating hard or soft surfaces, composites, metals, tubing and different types of plastics without negatively impacting the performance of the device being sterilized.

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As a result, the farmer/grower gets healthier crops that are more resistant to disease and pests, larger yields and healthier food for the consumer with extended shelf life for produce being shipped long distances.

The segment information is summarized as follows:

Business Segment Assets

Human Nutrition and Health $ 1,180,527 $ 1,170,238

Animal Nutrition and Health 166,994 175,972

Specialty Products 168,307 177,187

Other and Unallocated (1)

81,383 101,115

Total $ 1,597,211 $ 1,624,512

Business Segment Net Sales

The Company's CODM is the Chief Executive Officer.

The CODM receives a profit and loss reporting package which provides segment information including revenue, cost of goods sold, gross margin, total operating expenses, and earnings from operations.

The CODM utilizes this monthly profit and loss reporting package to analyze segment performance and appropriately allocate resources.

Pursuant to ASU 2023-07, "Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures", the significant segment information is summarized as follows:

For the Year Ended December 31, 2024

HNH ANH SP Other and Unallocated Total

Net sales $ 600,258 $ 214,710 $ 132,749 $ 5,967 $ 953,684

Cost of sales 378,411 (1) 171,409 (1) 59,449 (1) 8,209 (1) 617,478

Gross margin 221,847 43,301 73,300 ( 2,242 ) 336,206

Operating expenses 85,890 (2) 29,288 (3)

33,394 (4) 4,725 (5) 153,297

Human Nutrition and Health $ 550,751 $ 527,131 $ 442,733

Animal Nutrition and Health 238,326 262,297 226,776

Specialty Products 125,965 131,438 117,020

Other and Unallocated (2)

Earnings from operations 135,957 14,013 39,906 ( 6,967 ) 182,909

Other expenses:

Interest expense, net 16,528

Other income ( 72 )

Earnings before income tax expense 166,453

Income tax expense 37,978

Net earnings $ 128,475

(1) Cost of sales are primarily comprised of raw materials consumed in the manufacture of product, as well as manufacturing labor, maintenance labor, depreciation expense, and overhead expense necessary to convert purchased materials and supplies into finished product.

Cost of sales also includes inbound freight costs, outbound freight costs for shipping products to customers, warehousing costs, quality control and obsolescence expense.

(2) Operating expenses w ithin HNH are primarily comprised of compensation-related costs, professional services, including advertising and marketing costs, and amortization expense in connection with certain acquired intangible assets.

(3) Operating expenses within ANH are primarily comprised of compensation-related costs and professional services, including advertising and marketing costs.

(4) Operating expenses within SP are primarily comprised of compensation-related costs, professional services, and amortization expense in connection with certain acquired intangible assets.

(5) Operating expenses within Other and Unallocated are primarily comprised of transaction and integration costs.

For the Year Ended December 31, 2023

HNH ANH SP Other and Unallocated Total

Net sales $ 550,751 $ 238,326 $ 125,965 $ 7,397 $ 922,439

Cost of sales 366,539 (6) 183,827 (6) 62,183 (6) 7,834 (6) 620,383

Gross margin 184,212 54,499 63,782 ( 437 ) 302,056

Operating expenses 81,793 (7)

4,944 (10) 142,863

Total $ 922,439 $ 942,358 $ 799,023

Business Segment Earnings Before Income Taxes

Earnings from operations 102,419 27,576 34,579 ( 5,381 ) 159,193

Other expenses:

Interest expense, net 22,613

Other income ( 681 )

Earnings before income tax expense 137,261

Income tax expense 28,718

Net earnings $ 108,543

(6) Cost of sales are primarily comprised of raw materials consumed in the manufacture of product, as well as manufacturing labor, maintenance labor, depreciation expense, and overhead expense necessary to convert purchased materials and supplies into finished product.

Cost of sales also includes inbound freight costs, outbound freight costs for shipping products to customers, warehousing costs, quality control and obsolescence expense.

(7 Operating expenses w ithin HNH are primarily comprised of compensation-related costs, professional services, including advertising and marketing costs, and amortization expense in connection with certain acquired intangible assets.

These expenses were partially offset by favorable adjustments to transaction costs.

(8) Operating expenses within ANH are primarily comprised of compensation-related costs and professional services, including advertising and marketing costs.

These expenses were partially offset by favorable adjustments to transaction costs.

(9) Operating expenses within SP are primarily comprised of compensation-related costs, professional services, and amortization expense in connection with certain acquired intangible assets.

(10) Operating expenses within Other and Unallocated are primarily comprised of transaction and integration costs and unallocated amortization expense related to an intangible asset in connection with a company-wide ERP system implementation.

For the Year Ended December 31, 2022

HNH ANH SP Other and Unallocated Total

Net sales $ 527,131 $ 262,297 $ 131,438 $ 21,492 $ 942,358

Cost of sales 373,063 (11) 200,252 (11) 70,343 (11) 18,249 (11) 661,907

Gross margin 154,068 62,045 61,095 3,243 280,451

Operating expenses 71,943 (12)

9,027 (15) 135,265

Human Nutrition and Health $ 102,419 $ 82,125 $ 76,031

Animal Nutrition and Health 27,576 36,056 26,179

Specialty Products 34,579 32,789 30,020

Earnings from operations 82,125 36,056 32,789 ( 5,784 ) 145,186

Other expenses:

Interest expense, net 10,268

Other expense 1,169

Earnings before income tax expense 133,749

Income tax expense 28,382

Net earnings $ 105,367

(11) Cost of sales are primarily comprised of raw materials consumed in the manufacture of product, as well as manufacturing labor, maintenance labor, depreciation expense, and overhead expense necessary to convert purchased materials and supplies into finished product.

Cost of sales also includes inbound freight costs, outbound freight costs for shipping products to customers, warehousing costs, quality control and obsolescence expense.

(12) Operating expenses w ithin HNH are primarily comprised of compensation-related costs, professional services, including advertising and marketing costs, and amortization expense in connection with certain acquired intangible assets.

(13) Operating expenses within ANH are primarily comprised of compensation-related costs and professional services, including advertising and marketing costs.

(14) Operating expenses within SP are primarily comprised of compensation-related costs, professional services, and amortization expense in connection with certain acquired intangible assets.

(15) Operating expenses within Other and Unallocated are primarily comprised of transaction and integration costs, unallocated legal fees, and unallocated amortization expense related to an intangible asset in connection with a company-wide ERP system implementation.

Business Segment Assets

HNH $ 1,185,962 $ 1,180,527

ANH 161,243 166,994

SP 161,283 168,307

Other and Unallocated (16)

66,883 81,383

Interest and other expense ( 21,932 ) ( 11,437 ) ( 2,269 )

Total $ 1,575,371 $ 1,597,211

(16) Other and Unallocated assets consist of certain cash, capitalized loan issuance costs, other assets, investments, and income taxes, which the Company does not allocate to its individual business segments.

It also includes assets associated with a few minor businesses which individually do not meet the quantitative thresholds for separate presentation.

Depreciation/Amortization

2024 2023 2022

Human Nutrition and Health $ 38,568 $ 33,728 $ 30,012

Animal Nutrition and Health 7,876 6,685 7,414

Specialty Products 7,278 7,507 8,332

HNH $ 31,668 $ 38,568 $ 33,728

ANH 8,233 7,876 6,685

SP 7,044 7,278 7,507

Other and Unallocated 1,028 1,213 3,928

1,213 3,928 3,121

Total $ 47,973 $ 54,935 $ 51,848

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2024 2023 2022

Human Nutrition and Health $ 26,415 $ 33,668 $ 23,714

Animal Nutrition and Health 6,993 10,809 8,100

Specialty Products 3,535 4,004 3,804

HNH $ 17,570 $ 26,415 $ 33,668

ANH 13,201 6,993 10,809

SP 4,050 3,535 4,004

Other and Unallocated 327 331 605

Total $ 35,148 $ 37,274 $ 49,086

(1) Other and Unallocated assets consist of certain cash, capitalized loan issuance costs, other assets, investments, and income taxes, which the Company does not allocate to its individual business segments.

It also includes assets associated with a few minor businesses which individually do not meet the quantitative thresholds for separate presentation.

(2) Other and Unallocated consists of a few minor businesses which individually do not meet the quantitative thresholds for separate presentation and corporate expenses that have not been allocated to a segment.

Unallocated corporate expenses consist of:

(i) Transaction and integration costs, ERP implementation costs, and unallocated legal fees totaling $ 1,617 , $ 3,581 and $ 1,264 for years ended December 31, 2023 , 2022 and 2021, respectively, and (ii) Unallocated amortization expense of $ 312 , $ 2,951 , and $ 2,510 for years ended December 31, 2023 , 2022 , and 2021, respectively, related to an intangible asset in connection with a company-wide ERP system implementation.

NOTE 12 - REVENUE

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Prior service loss (gain) arising during the period 206 132 ( 41 )

Amortization of prior service gain — 9 74

Amortization of loss (gain) 8 ( 2 ) ( 21 )

Amortization of prior service credit — — 9

Amortization of (gain) loss ( 10 ) 8 ( 2 )

Total before tax 196 140 ( 34 )

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Net of tax 152 101 ( 58 )

Total other comprehensive income/(loss) $ 15,845 $ ( 2,161 ) $ ( 9,166 )

Included in "Net foreign currency translation adjustment" was loss of $ 1,455 related to a net investment hedge, which was net of tax benefit of $ 471 for the year ended December 31, 2023, and gains of $ 3,851 , and $ 4,766 , related to a net investment hedge, net of tax expenses of $ 1,236 , and $ 1,527 , for the years ended December 31, 2022 and 2021, respectively.

Total other comprehensive (loss) income $ ( 32,438 ) $ 15,845 $ ( 2,161 )

Included in "Net foreign currency translation adjustment" was a loss of $ 1,455 related to a net investment hedge, net of tax benefits of $ 471 for the year ended December 31, 2023, and a gain of $ 3,851 related to a net investment hedge, net of tax expenses of $ 1,236 , for the year ended December 31, 2022.

There were no such gains or losses for the year ended December 31, 2024.

The Company settled its derivative instruments on their maturity date of June 27, 2023.

See Note 20, Derivative Instruments and Hedging Activities .

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Balance December 31, 2023 $ 8,408 $ — $ 283 $ 8,691

Other comprehensive income (loss) 16,809 ( 1,065 ) 101 15,845

Other comprehensive (loss) income ( 32,590 ) — 152 ( 32,438 )

Balance December 31, 2024 $ ( 24,182 ) $ — $ 435 $ ( 23,747 )

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The Company provided for matching 401(k) savings plan contributions of $ 4,644 , $ 4,381 , and $ 4,363 in 2024, 2023 and 2022, respectively.

There were no profit sharing contributions in 2024.

Profit sharing contributions in 2023 and 2022 were not material.

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Benefits paid ( 32 ) ( 30 )

Actuarial (gain) loss ( 233 ) 109

Actuarial gain ( 29 ) ( 233 )

Benefit obligation at end of year $ 1,522 $ 1,395

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Unrecognized net loss (gain) 8 ( 2 )

Net amount recognized in consolidated balance sheet (after ASC 715) (included in "Other long-term obligations") $ ( 1,395 ) $ ( 1,465 )

Net amount recognized in consolidated balance sheet (after ASC 715) (included in

"Other long-term obligations") $ ( 1,522 ) $ ( 1,395 )

Accrued postretirement benefit cost (included in "Other long-term obligations") N/A N/A

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Amortization of prior service cost — — 9

Amortization of loss (gain) 8 ( 2 ) ( 24 )

Amortization of (gain) loss ( 10 ) 8 ( 2 )

Total net periodic benefit cost $ 158 $ 178 $ 112

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Southwest Areas

Pension Fund 36-6044243 Critical & Declining as of 1/1/23 Critical & Declining as of 1/1/22 Implemented $ 1,020 $ 939 $ 816 No 7/12/2025

Pension Fund 36-6044243 Critical as of 1/1/24 Critical as of 1/1/23 Implemented $ 1,073 $ 1,020 $ 939 No 7/12/2025

The Company provides an unfunded defined benefit pension plan for employees working in Belgium.

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Interest cost 54 65

Participant contributions — 27

Benefits paid ( 42 ) ( 188 )

Actuarial loss (gain) 80 ( 194 )

Actuarial loss 488 80

Exchange rate changes ( 98 ) 49

4 unchanged sentences

Employer contributions 181 138

Participant contributions — 27

Benefits paid ( 42 ) ( 188 )

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Expected return on plan assets ( 40 ) ( 42 ) ( 37 )

Amortization of net loss — — 3

Total net periodic benefit cost $ 86 $ 88 $ 24

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Assets of the plan are held in a rabbi trust, which are subject to additional risk of loss in the event of bankruptcy or insolvency of the Company.

The deferred compensation liability as of December 31, 2023 and 2022 was $ 10,188 and $ 8,543 , respectively, and was included in "Other long-term obligations" on the Company's balance sheet.

The related rabbi trust assets were $ 10,188 and $ 8,547 as of December 31, 2023 and 2022, respectively, and were included in "Other non-current assets" on the Company's consolidated balance sheets.

The deferred compensation liability was $ 11,470 as of December 31, 2024, of which $ 11,449 was included in "Other long-term obligations" and $ 21 was included in "Accrued compensation and other benefits" on the Company's consolidated balance sheets.

The deferred compensation liability was $ 10,188 as of December 31, 2023 and was included in "Other long-term obligations" on the Company’s consolidated balance sheets.

The related assets of the irrevocable trust funds (also known as "rabbi trust funds") were $ 11,465 and $ 10,188 as of December 31, 2024 and 2023, respectively, and were included in "Other non-current assets" on the Company's consolidated balance sheets.

NOTE 16 - COMMITMENTS AND CONTINGENCIES

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Part 68, commonly known as the Risk Management Plan Rule (“RMP Rule”).

BCP intends to participate in such discussions in 2024.

In connection with the 2022 EPA Inspection, the Company believes that a loss contingency in this matter is probable and reasonably estimable and has recorded a loss contingency in an amount that is not material to its financial performance or operations.

BCP participated in such discussions during 2024, and in December 2024, BCP reached a settlement with the EPA and DOJ to resolve these alleged violations.

Pursuant to the settlement, which was entered into on January 31, 2025, BCP agreed to:

(a) pay a $ 300 civil penalty;

(b) invest in a new scrubber system;

and (c) spend $ 350 to implement projects benefiting the surrounding community, such as emergency equipment for the local fire department and two vehicles to be used as mobile health clinics.

The amount associated with this settlement was consistent with the amount previously accrued as a loss contingency.

In addition to the above, from time to time, the Company is a party to various legal proceedings, litigation, claims and assessments.

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The money market and rabbi trust funds are valued using level one inputs, as defined by ASC 820, “Fair Value Measurement.”

The contingent consideration liabilities included on the balance sheet at of December 31, 2023 and 2022 amount to $ 100 and $ 11,400 , respectively, and were valued using level three inputs, as defined by ASC 820, "Fair Value Measurement".

The Company also had derivative financial instruments, consisting of a cross-currency swap and an interest rate swap, which were included in "Derivative assets" in the Company's consolidated balance sheets.

The fair values of these derivative instruments were determined based on Level 2 inputs, using significant inputs that are observable either directly or indirectly, including interest rate curves and implied volatilities.

The Company settled its cross-currency swap and interest rate swap on June 27, 2023 and had no other derivatives outstanding as of December 31, 2023.

The derivative assets related to the cross-currency swap and the interest rate swap were $ 4,587 and $ 1,406 at December 31, 2022, respectively.

NOTE 18 – RELATED PARTY TRANSACTIONS

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Gabriel CC Company, LLC for services rendered and raw materials sold.

At December 31, 2023 and 2022, the Company had payables of $ 6,050 and $ 5,224 ,

respectively, recorded in accounts payable for finished goods received from St.

At December 31, 2024 and 2023, the Company had payables of $ 2,831 and $ 6,050 , respectively, recorded in accounts payable for finished goods received from St.

Gabriel CC Company, LLC.

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On May 28, 2019, the Company entered into a pay-fixed ( 2.05 %), receive-floating interest rate swap with a notional amount of $ 108,569 and a maturity date of June 27, 2023, which was designated as cash flow hedge.

The net interest income related to the interest rate swap contract were $ 1,518 and $ 400 for the years ended December 31, 2023 and 2022, respectively.

The net interest expense related to the interest rate swap contract was $ 2,144 for the year ended December 31, 2021.

The net interest income related to the interest rate swap contract was $ 1,518 and $ 400 for the years ended December 31, 2023 and 2022, respectively.

There was no such income or expense during the year ended December 31, 2024 as the interest rate swap was settled on its maturity date of June 27, 2023.

The net interest income and expense were recorded in the consolidated statements of earnings under "Interest expense, net."

On May 28, 2019, the Company also entered into a pay-fixed ( 0.00 %), receive-fixed ( 2.05 %) cross-currency swap to manage foreign exchange risk related to the Company's net investment in Chemogas, which was designated as net investment hedge.

The derivative has a notional amount of $ 108,569 , an effective date of May 28, 2019, and a maturity date of June 27, 2023.

The derivative had a notional amount of $ 108,569 , an effective date of May 28, 2019, and a maturity date of June 27, 2023.

The interest income related to the cross-currency swap contract was $ 1,119 and $ 2,250 for the years ended December 31, 2023 and 2022, respectively.

There was no such income or expense during the year ended December 31, 2024 as the cross-currency swap was settled on its maturity date of June 27, 2023.

The interest income was recorded in the consolidated statements of earnings under "Interest expense, net."

The Company settled its derivative instruments on their maturity date of June 27, 2023 and had no other derivatives outstanding as of December 31, 2024.

The proceeds from the settlement of the cross-currency swap in the amount of $ 2,740 were classified as investing activities in the Consolidated Statements of Cash Flows.

As of December 31, 2022, the fair value of the derivative instruments is presented as follows in the Company's consolidated balance sheets:

Derivative assets December 31, 2022

Interest rate swap $ 1,406

Cross-currency swap 4,587

Derivative assets $ 5,993

Gains and losses on our hedging instruments were recognized in accumulated other comprehensive income (loss) and categorized as follows for the years ended December 31, 2023, 2022, and 2021:

Location within Statements of Comprehensive Income Year ended December 31,

2023 2022 2021

The proceeds from the settlement of the cross-currency swap in the amount of $ 2,740 were classified as investing activities in the Consolidated Statements of Cash Flows for the year ended December 31, 2023.

There were no gains and losses on hedging instruments recognized in accumulated other comprehensive income (loss) for the year ended December 31, 2024 as the derivative instruments settled on their maturity date of June 27, 2023.

Gains and losses on our hedging instruments for the years ended December 31, 2023, and 2022 were recognized in accumulated other comprehensive income (loss) and categorized as follows:

Location within Statements of Comprehensive Income

Cash flow hedge (interest rate swap), net of tax Unrealized (loss) gain on cash flow hedge, net $ ( 1,065 ) $ 2,696

4 unchanged sentences

For the year ended December 31, 2022, the net gains on these forward contracts of $ 512 were recorded in other income or loss in the consolidated statements of earnings.

As of December 31, 2023, the Company did no t maintain any open foreign currency exchange forward contracts as all four contracts expired during 2022.

As of December 31, 2024 and 2023, the Company did no t maintain any open foreign currency exchange forward contracts as all four contracts expired during 2022.

NOTE 21 - QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

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(In thousands)

for Doubtful Accounts Inventory

for Credit Losses Inventory

Balance - December 31, 2021 $ 928 $ 1,425

14 unchanged sentences

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data