What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-06-09 compared with 2021-12-08 · 98 added, 98 removed, 64 unchanged (75% of the section changed)

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uncertainties relating to general economic conditions, including any deterioration whether caused by acts of war, terrorism, political or social unrest (including any resulting store closures, damage or loss of inventory);

natural disasters such as hurricanes;

public health emergencies such as the ongoing COVID-19 pandemic and associated containment and remediation efforts;

the ongoing COVID-19 pandemic and associated containment and remediation efforts;

the potential negative impacts of COVID-19 on the global economy and foreign sourcing;

the impacts of COVID-19 on the Company’s financial condition, business operations and liquidity, including the re-closure of any or all of the Company’s retail stores and distribution centers;

growth risks, consumer spending patterns;

the impacts of COVID-19 on the Company's financial condition, business operation and liquidity, including the re-closure of any or all of the Company’s retail stores and distribution centers, growth risks, consumer spending patterns;

competition within the industry;

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the Company’s ability to attract and retain workers;

changes in market interest rates and market levels of wages;

the Company’s ability to negotiate effectively the cost and purchase of merchandise;

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the Company’s ability to gauge fashion trends and changing consumer preferences;

changes in consumer spending on apparel;

changes in consumer confidence and consumer spending on apparel;

changes in product mix;

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seasonality of the Company’s business;

delays associated with building, opening and operating new stores;

delays associated with building, opening, remodeling and operating new stores;

delays associated with building, opening or expanding new or existing distribution centers;

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Readers are advised, however, to read any further disclosures the Company may make on related subjects in its public disclosures or documents filed with the SEC, including reports on Form 8-K.

We are a growing specialty value retailer of apparel, accessories and home trends primarily for African American and Latinx families.

Executive Overview

We are a growing specialty value retailer of apparel, accessories and home trends for way less spend primarily for African American and Latinx families.

Our high-quality and trend-right merchandise offerings at everyday low prices are designed to appeal to the fashion and trend preferences of value-conscious customers.

As of October 30, 2021, we operated 600 stores in urban, suburban and rural markets in 33 states.

COVID-19 Pandemic

In March 2020, the World Health Organization declared COVID-19 a global pandemic.

The pandemic has caused and may continue to cause significant disruptions in the global and U.S.

economies as the virus continues to spread or has a resurgence in certain jurisdictions.

In response to the COVID-19 pandemic, effective March 20, 2020, we temporarily closed all of our retail store locations and distribution centers.

At the end of April 2020, we started to reopen stores in select states in accordance with government guidelines.

As of July 18, 2020, we safely reopened all of our stores.

The COVID-19 pandemic has resulted in periods of disruption for our business, including the temporary closure of our stores and limited store operating hours, reduced customer traffic and consumer spending, and delays in the manufacturing and shipping of products.

We saw improvement in our financial results and positive trends during the latter half of 2020 and through the first three quarters of 2021 as governments eased restrictions and provided economic stimulus, along with the acceleration of vaccine distribution, leading to an increase in spending and increased customer demand.

We expect continued uncertainty in our business and the global economy due to the COVID-19 pandemic, including potential volatility in employment trends and consumer confidence, current or future restrictive actions that may be imposed by governments or public health authorities, the duration and extent of any economic stimulus programs, supply chain interruptions, increased distribution and transportation costs, increased payroll expenses, and increased costs to maintain safe work and shopping environments.

Due to the significant uncertainty surrounding the COVID-19 pandemic and its effects, there may be consequences that we do not anticipate at this time or that develop in unexpected ways.

The impacts of the pandemic have had, and may continue to have, an adverse impact on the Company’s financial condition, results of operations and liquidity.

We will continue to monitor the effects of COVID-19 and take the necessary actions to safely serve our associates, customers, communities and shareholders.

For a further discussion of trends, uncertainties and other factors that could affect our future operating results related to the effects of the COVID-19 pandemic, see the section entitled "ITEM 1A.

RISK FACTORS"

in the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2021.

Accounting Periods

As of April 30, 2022, we operated 614 stores in urban, suburban and rural markets in 33 states.

Uncertainties and Challenges

The COVID-19 pandemic continues to evolve and has caused significant volatility and disruptions in our business, particularly during fiscal 2021 and 2020.

We remain focused on providing a safe store environment for our customers and associates while delivering an engaging shopping experience.

We also prioritize the wellness and safety of our associates in our corporate offices and distribution centers.

The communities we serve were severely impacted by the omicron variant at the end of fiscal 2021.

Despite the recent improvement in trends, we cannot reasonably predict the extent to which our future business will be impacted by the pandemic.

Our operations have been impacted by the recent surge in prices for food, fuel and energy due to inflationary pressures, which are particularly impactful to the communities we serve.

We expect inflationary pressures will persist in the near term.

In addition, we are closely monitoring the impacts of higher unemployment, wage inflation and costs to source our merchandise.

Supply Chain Disruptions

We have encountered increasing supply chain disruptions that began in the second half of fiscal 2021 and have continued through the date of this Report.

In particular, our vendors have faced production delays, and we have been impacted by industry-wide U.S.

port and ground transportation delays.

In response, we have taken various actions, including ordering merchandise earlier, leveraging our packaway merchandise stock and expanding the direct shipping program from our vendors to our stores that we initiated in fiscal 2020.

These supply chain disruptions have resulted in increased costs, and we expect supply chain pressures will persist in the near term.

Seasonality and Weather Patterns

The nature of our business is seasonal.

Historically, sales in the first and fourth quarters have been higher than sales achieved in the second and third quarters of the fiscal year.

In addition, sales of clothing are directly impacted by the timing of the seasons to which the clothing relates.

While we have greatly expanded our product offerings to become a one-stop-shop, traffic to our stores is still influenced by weather patterns to some extent.

Basis of Presentation

Net sales consist of store sales and layaway fees, net of returns by customers.

Cost of sales consists of the cost of products we sell and associated freight costs.

Depreciation is not considered a component of cost of sales and is included as a separate line item in the consolidated statements of operations.

Selling, general and administrative expenses are comprised of store costs, including payroll and occupancy costs, corporate and distribution center costs and advertising costs.

The following discussion contains references to fiscal years 2022 and 2021, which represent fiscal years ending or ended on January 28, 2023 and January 29, 2022, respectively.

Fiscal 2021 and 2020 both have 52-week accounting periods.

This discussion and analysis should be read with the unaudited condensed consolidated financial statements and the notes thereto contained in Part I, Item 1 of this report.

Fiscal 2022 and fiscal 2021 both have 52-week accounting periods.

This discussion and analysis should be read with the unaudited condensed consolidated financial statements and the notes thereto contained in Part 1, Item 1 of this report.

Results of Operations

The following discussion of the Company’s financial performance is based on the unaudited condensed consolidated financial statements set forth herein.

The nature of the Company’s business is seasonal.

Historically, sales in the first and fourth quarters have been higher than sales achieved in the second and third quarters of the fiscal year.

Expenses and, to a greater extent, operating income, vary by quarter.

Results of a period shorter than a full year may not be indicative of results expected for the entire fiscal year, particularly in light of the continued uncertainty surrounding the economic impact of the COVID-19 pandemic.

Furthermore, as a result of the closure of our stores for at least five weeks in 2020 related to the COVID-19 pandemic, comparisons of expense ratios and year-over-year trends are not a meaningful way to evaluate our operating results for the thirty-nine weeks ended October 30, 2021.

Results of a period shorter than a full year may not be indicative of results expected for the entire year as a result of the seasonality of the business, the current economic uncertainty and the extent to which future business will be impacted by the COVID-19 pandemic.

Key Operating Statistics

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In addition to sales, we measure cost of sales as a percentage of sales and store operating expenses, with a particular focus on labor, as a percentage of sales.

These results translate into store level contribution, which we use to evaluate overall performance of each individual store.

Finally, we monitor corporate expenses against budgeted amounts.

Thirteen Weeks Ended October 30, 2021 and October 31, 2020

Net sales increased $28.9 million, or 14.5%, to $228.0 million in the third quarter of 2021 from $199.1 million in the third quarter of 2020.

The increase in sales was due to a 13.1% increase in comparable store sales and the opening of 19 new stores since the third quarter of 2020, partially offset by the impact of closing four stores and lost sales due to Hurricane Ida.

The 13.1% increase in comparable store sales contributed $25.3 million in sales, while store opening and closing activity resulted in a net increase of $3.6 million.

The 13.1% increase in comparable store sales was reflected in an increase of 12% in the average basket size and an increase of 1% in customer transactions.

Comparable store sales changes by “CITI” or major merchandise category were as follows:

Beauty & Accessories +20%;

Footwear +6%;

and Home & Lifestyle -7%.

Cost of sales (exclusive of depreciation).

Cost of sales (exclusive of depreciation) increased $20.3 million, or 17.5%, to $136.1 million in the third quarter of 2021 from $115.8 million in the third quarter of 2020.

Cost of sales as a percentage of sales increased to 59.7% from 58.2% due to an increase of 110 basis points in freight costs and a decrease of 80 basis points in the core merchandise margin (initial mark-up, net of markdowns), partially offset by an improvement of 40 basis points in shrinkage.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased $5.6 million, or 8.0%, to $74.8 million in the third quarter of 2021 from $69.2 million in the third quarter of 2020.

The increase was due primarily to the general impact on expenses of opening 19 new stores since the third quarter of 2020.

Also contributing to the increase was a $1.0 million increase in incentive compensation resulting from favorable operating results in relation to budget.

As a percentage of sales, selling, general and administrative expenses improved 200 basis points to 32.8% in the third quarter of 2021 from 34.8% in the third quarter of 2020.

Depreciation.

Depreciation expense increased $0.8 million, or 17.5%, to $5.5 million in the third quarter of 2021 from $4.7 million in the third quarter of 2020.

Income Tax Expense.

Income tax expense was $2.5 million in the third quarter of 2021 compared to $2.2 million in the third quarter of 2020 due primarily to an increase in pretax income.

Net income increased $2.0 million to $9.0 million in the third quarter of 2021 compared to $7.0 million in the third quarter of 2020 due to the factors discussed above.

Thirty-Nine Weeks Ended October 30, 2021 and October 31, 2020

Net sales increased $219.2 million, or 41.3%, to $750.6 million in the first thirty-nine weeks of 2021 from $531.4 million in the same period of 2020.

The increase in sales was primarily due to the temporary closure of all of our stores in the first half of 2020 as a result of the COVID-19 pandemic, combined with strong comparable store sales and the opening of 19 new stores since the end of the third quarter of 2020, partially offset by the impact of closing four stores and lost sales due to Hurricane Ida.

Thirteen Weeks Ended April 30, 2022 and May 1, 2021

Net sales decreased $77.2 million, or 27.0%, to $208.2 million in the first quarter of 2022 from $285.4 million in the first quarter of 2021.

The decrease in sales was due to a 29.2% decrease in comparable store sales, partially offset by a $5.6 million increase from net store opening and closing activity.

The decrease in comparable store sales was due to outsized sales in the first quarter of last year driven by government stimulus payments, combined with inflationary pressures in the first quarter of this year that are particularly impactful to our core customers.

Cost of sales (exclusive of depreciation).

Cost of sales (exclusive of depreciation) increased $113.1 million, or 34.5%, to $440.4 million in the first thirty-nine weeks of 2021 from $327.3 million in the same period of 2020.

Cost of sales as a percentage of sales decreased to 58.7% in the first thirty-nine weeks of 2021 from 61.6% in the same period of 2020 due to an improvement of 340 basis points in the core merchandise margin (initial mark-up, net of markdowns) driven primarily by lower markdowns, along with an improvement of 70 basis points in shrinkage, partially offset by an increase of 120 basis points in freight costs.

Cost of sales (exclusive of depreciation) decreased $36.8 million, or 22.5%, to $127.0 million in the first quarter of 2022 from $163.8 million in the first quarter of 2021.

Cost of sales as a percentage of sales increased to 61.0% in the first quarter of 2022 from 57.4% in the first quarter of 2021, due primarily to an increase in markdowns, as unusually low markdowns were taken in the first quarter of last year due to the outsized stimulus-driven demand.

Compared to the first quarter of 2021, cost of sales increased 360 basis points, due to a decrease of 280 basis points in the core merchandise margin (initial mark-up, net of markdowns) and increases of 50 basis points and 30 basis points in freight costs and shrink expense, respectively, driven by the deleveraging effect of lower sales.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased $47.2 million, or 26.0%, to $228.1 million in the first thirty-nine weeks of 2021 from $180.9 million in the same period of 2020.

The increase was due primarily to significant favorable one-time expense reductions in the first half of 2020 related to the COVID-19 pandemic, including furloughs, store closures and reduced operating hours, abated rents and other COVID-19 cost credits.

Also contributing to the increase was a $14.0 million increase in incentive compensation resulting from favorable operating results in relation to budget, as well as the general impact on expenses of opening 19 new stores since the third quarter of 2020.

As a percentage of sales, selling, general and administrative expenses improved 360 basis points to 30.4% in the first thirty-nine weeks of 2021 from 34.0% in the first thirty-nine weeks of 2020.

Selling, general and administrative expenses decreased $6.9 million, or 8.8%, to $71.0 million in the first quarter of 2022 from $77.9 million in the first quarter of 2021.

The decrease was due primarily to $5.9 million decrease in incentive based compensation as a result of unfavorable operating results in relation to budget this year (compared to overperformance in the first quarter last year) as well as increased costs last year related to the recognition of cash-settled stock awards based on the stock price.

Also contributing to the lower expense were decreases in certain variable costs such as credit card processing fees and store supplies, partially offset by growth-related increases in costs for opening and operating more stores.

As a percentage of sales, selling, general and administrative expenses increased to 34.1% in the first quarter of 2022 from 27.3% in the first quarter of 2021.

Depreciation.

Depreciation expense increased $0.6 million, or 4.4%, to $15.2 million in the first thirty-nine weeks of 2021 from $14.6 million in the same period last year.

Asset Impairment.

There were no asset impairment charges in the first thirty-nine weeks of 2021.

In the first thirty-nine weeks of 2020, impairment charges related to an underperforming store totaled $0.3 million, comprised of $0.2 million for an operating lease right-of-use asset and $0.1 million for leasehold improvements and fixtures and equipment.

Depreciation expense increased $0.7 million, or 15.9%, to $5.4 million in the first quarter of 2022 from $4.7 million in the first quarter of 2021.

Gain on sale-leaseback.

In the first quarter of 2022, we completed a sale-leaseback transaction for our distribution center in Darlington, South Carolina that resulted in a $34.9 million gain.

Income Tax Expense.

Income tax expense was $14.4 million in the first thirty-nine weeks of 2021 compared to $1.8 million in the first thirty-nine weeks of 2020 due primarily to higher pretax income this year.

Net income was $52.4 million in the first thirty-nine weeks of 2021 compared to $5.9 million in the same period of 2020 due to the factors discussed above.

Income tax expense was $9.4 million in the first quarter of 2022 compared to $8.1 million in the first quarter of 2021.

Our effective tax rate for the first quarter of this year was 23.7% compared to 20.7% in the first quarter of last year, with the difference attributable to a favorable tax impact of restricted stock vestings in the prior year.

Net income was $30.2 million in the first quarter of 2022 compared to $30.9 million in the first quarter of 2021 due to the factors discussed above.

Liquidity and Capital Resources

Capital Allocation

Our capital allocation strategy is to prioritize investments in opportunities to profitably grow our business and maintain current operations, then to return excess cash to shareholders through our repurchase programs.

Our quarter-end cash and cash equivalents balance was $61.7 million compared to $131.3 million at the end of the first quarter last year.

Until required for other purposes, we maintain cash and cash equivalents in deposit or money market accounts.

Our principal sources of liquidity consist of:

(i) cash and cash equivalents (which equaled $12.0 million as of October 30, 2021);

(ii) short-term investment securities (which equaled $35.5 million as of October 30, 2021);

(iii) short-term trade credit;

(iv) cash generated from operations on an ongoing basis as we sell our merchandise inventory;

and (v) a revolving credit facility with a $75 million credit commitment (with no borrowings as of October 30, 2021).

Trade credit represents a significant source of financing for inventory purchases and arises from customary payment terms and trade practices with our vendors.

(i) cash and cash equivalents on hand;

(ii) short-term trade credit arising from customary payment terms and trade practices with our vendors;

(iii) cash generated from operations on an ongoing basis;

and (iv) a revolving credit facility with a $75.0 million credit commitment.

In addition, in April 2022, we completed a sale-leaseback transaction of our distribution center in Darlington, South Carolina, for net proceeds of $45.5 million.

Our quarter-end inventory balance was $129.7 million, compared with $101.8 million at the end of the first quarter last year.

The increase was primarily due to depleted inventory levels at the end of the first quarter last year driven by outsized sales,

combined with opportunistic purchases of packaway inventory at the end of fiscal 2021 and during the first quarter of this year.

Capital Expenditures

Capital expenditures in the first quarter of 2022 were $8.0 million, an increase of $2.1 million over the first quarter of 2021 as we invested in our strategic initiatives, including opening five new stores, remodeling 20 stores and continuing our investments in system upgrades and distribution center enhancements.

We anticipate capital expenditures in fiscal 2022 of approximately $32 million, primarily for opening approximately 20 new stores and remodeling approximately 50 stores, combined with ongoing investments in our systems and distribution centers.

Share Repurchases

During the first quarters of 2022 and 2021, we returned $5.3 million and $45.5 million, respectively, to shareholders through share repurchases.

See Part II of this Report and Note 8 to the Financial Statements for more information.

Revolving Credit Facility

We have a revolving credit facility that matures in April 2026 and provides a $75 million credit commitment and a $25 million uncommitted “accordion” feature.

Additional details of the credit facility are in Note 5 to the Financial Statements .

At the end of the first quarter of 2022, we had no borrowings under the credit facility and $0.6 million in letters of credit outstanding.

Cash Flows From Operating Activities .

Net cash provided by operating activities was $54.9 million in the first thirty-nine weeks of 2021 compared to $63.0 million in the same period of 2020.

Sources of cash this year included net income adjusted for insurance proceeds and non-cash expenses such as depreciation, non-cash operating lease costs, loss on disposal of property and equipment, deferred income taxes and stock-based compensation expense, totaling $110.8 million (compared to $59.6 million in the first thirty-nine weeks of 2020).

Other significant sources of cash included a $15.9 million increase in accounts payable (compared to a $7.7 million increase in the same period last year) due to the timing of invoices and payments, as well as an increase in inventory balances compared to the third quarter of last year.

Significant uses of cash from operating activities in the first thirty-nine weeks of 2021 were (1) a $36.3 million decrease in accrued expenses and other long-term liabilities (compared to a $25.3 million decrease in the first thirty-nine weeks of 2020) due primarily to payments of operating lease liabilities;

(2) a $23.4 million increase in inventory (compared to a $23.9 million decrease in the same period last year) due to replenishing our merchandise in 2021 following robust sales in the fourth quarter of 2020;

(3) a $6.9 million decrease in income taxes payable/receivable due to the payment of income taxes;

and (4) a $6.5 million decrease in accrued compensation (compared to a $3.4 million increase in the same period last year) due to payment in the first quarter of 2021 of incentive compensation accrued in the second half of 2020.

Net cash used in operating activities was $18.9 million in the first quarter of 2022 compared to cash provided of $61.7 million in the first quarter of 2021.

Sources of cash in the first quarter of 2022 included net income (adjusted for insurance proceeds, non-cash expenses and gain on sale-leaseback) totaling $14.9 million (compared to $50.4 million in the first quarter of 2021) and an increase of $10.7 million in income tax payable (compared to a $7.0 increase in the first quarter of 2021).

Significant uses of cash during the first quarter of 2022 included (1) a $14.7 million decrease in accrued compensation (compared to an $11.2 million decrease in the first quarter of 2021) due to payment of incentive compensation accrued in the preceding fiscal year;

(2) an $11.3 million decrease in accounts payable (compared to a $24.5 million increase in the first quarter of 2021;

(3) an $11.1 million decrease in accrued expenses and other long-term liabilities (compared with an $8.6 million decrease in the first quarter of 2021) due primarily to payments of operating lease liabilities;

and (4) a $6.5 million increase in inventory (compared to a $1.7 million decrease in the first quarter of 2021).

Cash Flows From Investing Activities.

Cash used in investing activities was $56.1 million in the first thirty-nine weeks of 2021 compared to cash provided of $31.3 million in the same period last year.

Cash used in the first thirty-nine weeks of 2021 consisted of $35.5 million for purchases of short-term investment securities and $20.8 million for purchases of property and equipment.

Cash provided in the first thirty-nine weeks of 2020 was primarily from the sales of investment securities due to the COVID-19 pandemic, partially offset by $11.9 million used for purchases of property and equipment.

Cash provided by investing activities was $38.2 million in the first quarter of 2022 compared to cash used of $5.7 million in the first quarter of 2021.

Cash provided in the first quarter of 2022 consisted of $45.5 million net proceeds from the sale of a building in the sale-leaseback transaction, partially offset by $8.0 million of purchases of property and equipment.

Cash used in the first quarter of 2021 consisted primarily of purchases of property and equipment.

Cash Flows From Financing Activities.

Cash used in financing activities was $109.9 million in the first thirty-nine weeks of 2021 compared to $17.6 million in the same period last year.

Cash used in the first thirty-nine weeks of 2021 consisted primarily of $107.2 million for repurchases of our common stock.

Cash used in the first thirty-nine weeks of 2020 consisted primarily of $17.0 million used for repurchases of our common stock and dividend payments.

Cash Requirements

Our cash requirements are primarily for working capital and capital expenditures for stores, distribution infrastructure and information systems.

Cash used in financing activities was $7.4 million in the first quarter of 2022 compared to $47.9 million in the first quarter of 2021.

Cash used in the first quarter of this year consisted of $5.3 million for share repurchases (compared to $45.5 million in the first quarter of last year) and $2.1 million to settle withholding taxes on the vesting of restricted stock (compared to $2.2 million in the first quarter of last year).

Cash Requirements and Commitments

Our principal cash requirements consist of (1) inventory purchases;

(2) capital expenditures to invest in our infrastructure;

and (3) operational needs, including salaries, occupancy costs, taxes and other operating costs.

We may also use cash to fund any share repurchases, make any required debt payments and satisfy other contractual obligations.

Historically, we have met these cash requirements using cash flow from operations and short-term trade credit.

We have also used cash to repurchase shares of our common stock.

In the first thirty-nine weeks of 2021, pursuant to our stock repurchase programs, we repurchased 1,023,343 shares of our common stock at an aggregate cost of $85.3 million.

In addition, we repurchased in a block trade 250,000 shares of our common stock at an aggregate cost of $21.9 million.

We believe that our existing sources of liquidity will be sufficient to fund our operations for at least the next 12 months as well as the foreseeable future.

However, any significant reduction in customer willingness to visit shopping centers or levels of customer spending at our stores, or any future temporary closures of our stores or distribution centers, or any disruptions in the supply chains related to our merchandise could require us to take actions that could include material changes in our operations and seeking additional debt or equity capital.

We will continue to monitor the situation and take action as necessary to reduce our expenses and preserve our financial flexibility.

As of April 30, 2022, our contractual commitments for operating leases totaled $310.9 million (with $41.2 million due within 12 months).

See Note 10 to the Financial Statements for more information regarding lease commitments.

Critical Accounting Policies

The preparation of our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

There have been no material changes to the Critical Accounting Policies outlined in the Company’s Annual Report on Form 10-K for the year ended January 30, 2021.

There have been no material changes to the Critical Accounting Policies outlined in the Company’s Annual Report on Form 10-K for the fiscal year ended January 29, 2022.

Quantitative and Qualitative Disclosures About Market Risk.

There have been no material changes in our market risk during the thirty-nine weeks ended October 30, 2021 compared to the disclosures in Part II, Item 7A of our Annual Report on Form 10-K for the year ended January 30, 2021 .

There have been no material changes in our market risk during the thirteen weeks ended April 30, 2022 compared to the disclosures in Part II, Item 7A of our Annual Report on Form 10-K for the fiscal year ended January 29, 2022.

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