What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-08-05 compared with 2021-05-06 · 122 added, 60 removed, 184 unchanged (50% of the section changed)

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We believe that our focus on application-specific standard products utilizing innovative, highly efficient packaging and cost-effective process technologies, coupled with our collaborative, customer-focused product development, provides us with a meaningful competitive advantage relative to other semiconductor companies.

Factors Relevant to Our Results of Operations for the Three Months Ended March 31, 2021

During the first quarter of 2021, net sales were $413.1 million, which included the first full quarter of revenue from the LSC acquisition, an increase of 47.2% from the $280.7 million of net sales in the first quarter of 2020, and an increase of 17.9% from the $350.4 million of net sales in the fourth quarter of 2020.

Gross profit was $138.6 million, an increase of 44.7% from the $95.8 million of gross profit in the first quarter of 2020, and an increase of 13.0% from the $122.7 million in the fourth quarter of 2020;

Gross profit margin was 33.6%, or 36.3% for Diodes’ only, compared to gross profit margin of 34.1% in the first quarter of 2020, and 35.0% in the fourth quarter of 2020;

Net income was $39.5 million, or $0.87 per diluted share, compared to net income of $20.2 million, or $0.38 per diluted share, in the first quarter of 2020, and net income of $29.7 million, or $0.59 per diluted share, in the fourth quarter of 2020;

Factors Relevant to Our Results of Operations for the Three Months Ended June 30, 2021

During the second quarter of 2021, net sales were $440.4 million, an increase of 52.5 % from the $288.7 million of net sales in the second quarter of 2020, and an increase of 6.6% from the $413.1 million of net sales in the first quarter of 2021.

Gross profit was $159.8 million, an increase of 57.5% from the $101.5 million of gross profit in the second quarter of 2020, and an increase of 15.3% from the $138.6 million of gross profit in the first quarter of 2021;

Gross profit margin was 36.3% compared to gross profit margin of 35.2% in the second quarter of 2020, and 33.6% in the first quarter of 2021;

Net income was $55.4 million, or $1.22 per diluted share, compared to net income of $21.0 million, or $0.40 per diluted share, in the second quarter of 2020, and net income of $39.5 million, or $0.87 per diluted share, in the first quarter of 2021;

Cash flow from operations was $93.9 million.

Net cash flow was a positive $10.6 million, which includes $17.2 million of capital expenditures and a net reduction in debt of $37.2 million.

Net cash flow was a negative $36.2 million, which includes $27.9 million of capital expenditures and a net reduction in debt of $114.2 million.

Recent Developments

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We previously temporarily closed a manufacturing facility due to COVID-19 and no assurances can be provided that we will not be required to close or reduce our manufacturing production in the future in response to the COVID-19 pandemic or other events beyond our control.

As of March 31, 2021, our cash, cash equivalents, and short-term investments were $339.5 million, and we had access to additional borrowing capacity of $150.0 million under the revolving portion our Credit Agreement, which we believe assures us adequate liquidity to manage the impacts of the COVID-19 pandemic on our business and to cover cash needs for working capital, capital expenditures and acquisitions for at least the next 12 months.

As of June 30, 2021, our cash, cash equivalents, and short-term investments were $300.0 million, and we had access to additional borrowing capacity of $150.0 million under the revolving portion our Credit Agreement, which we believe assures us adequate liquidity to manage the impacts of the COVID-19 pandemic on our business and to cover cash needs for working capital, capital expenditures and acquisitions for at least the next 12 months.

See “Risk Factors - The ultimate impact of the COVID-19 pandemic outbreak cannot be estimated at this time, but it may have a material adverse effect on our business, financial condition and results of operations.” in Item 1A of this Quarterly Report on Form 10-Q for an additional discussion of risks and potential risks of the COVID-19 pandemic on our business, financial condition and results of operations.

Results of Operations for the Three Months Ended March 31, 2021 and 2020

Results of Operations for the Three Months Ended June 30, 2021 and 2020

The table below sets forth the condensed consolidated statement of operations line items as a percentage of net sales.

Percent of Net Sales

Three Months Ended March 31,

Three Months Ended June 30,

Cost of goods sold

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Net income attributable to common stockholders

The following table and discussion explains in greater detail our consolidated operating results and financial condition for the three months ended March 31, 2021, compared to the three months ended March 31, 2020.

The following table and discussion explains in greater detail our consolidated operating results and financial condition for the three months ended June 30, 2021, compared to the three months ended June 30, 2020.

This discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q.

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Interest expense

Foreign currency loss, net

Foreign currency (loss) gain, net

Unrealized gain on investments

Income tax provision

Net sales increased approximately $132.4 million for the three months ended March 31, 2021, compared to the same period last year, setting a record both organically and on a consolidated basis.

This increase in net sales was driven by growth in Asia and Europe.

The Company also achieved growth in our computing end market, driven by increases in serial-connectivity products , and the automotive market due to strong organic growth in the automotive business.

The table below sets forth our revenue as a percentage of total revenue by end-user market for the three months ended March 31, 2021 and 2020:

Net sales increased approximately $151.8 million, or 52.6%, for the three months ended June 30, 2021, compared to the same period last year.

The 52.6% increase in net sales for the three months ended June 30, 2021 was driven by 27.5% organic growth attributable to the Company’s legacy business that existed prior to the LSC acquisition and 25.1% related to LSC.

Revenue grew in all regions.

The Company achieved records in global point-of-sale revenue, automotive and consumer end-user markets sales and sales of our Pericom branded products for high-end personal computers, servers and data center applications.

For the three months ended June 30, 2021, weighted-average sales price increased 6.8% when compared to the same period last year.

The table below sets forth our revenue as a percentage of total revenue by end-user market for the three months ended June 30, 2021 and 2020:

Three Months Ended

Communications

Cost of goods sold increased approximately $89.6 million for the three months ended March 31, 2021, compared to the same period last year, due to the increased net sales during the first quarter of 2021.

As a percent of sales, cost of goods sold was 66.4% for the three months ended March 31, 2021, compared to 65.9% for the same period last year.

Average unit cost increased approximately 1.9% for the three months ended March 31, 2021, compared to the same period last year.

For the three months ended March 31, 2021, gross profit increased approximately 44.7% when compared to the same period last year.

Gross profit margin for the three month periods ended March 31, 2021 and 2020 was 33.6% and 34.1%, respectively.

Operating expenses for the three months ended March 31, 2021, increased $21.3 million when compared to the three months ended March 31, 2020.

Operating expenses as a percentage of net sales was 22.1% and 24.9% for the three months ended March 31, 2021 and 2020, respectively.

Selling, general and administrative expenses (“SG&A”) increased approximately $16.5 million, due to higher selling costs and wages and salaries.

Research and development expenses (“R&D”) increased approximately $4.0 million due to higher wages and benefits as compared to the same period last year.

With respect of total net sales by end-user markets, the LSC contribution to automotive, industrial, consumer and communication end-user markets was 7% or less for the three months ended June 30, 2021.

With respect to the percentage of total net sales by the computing end-user market, the LSC contribution for the three months ended June 30, 2021 was approximately 47% of total computing net sales.

The industrial end-user market grew as we experienced strong demand for our products for low-dropout regulators for power tools, eMeters and other industrial applications.

In the communications end-user market the Company has continued to focus on mobile, smartphone, and especially 5G applications.

In the consumer end-user market the Company experienced increasing growth momentum in the IoT space.

The computing end-user market grew due to continued demand for notebooks, Chromebooks, high-end PCs, servers and datacenter applications.

The automotive end-user market grew as we captured both increasing market share and content gains as the Company penetrated new and existing automotive customers and applications.

With respect to the three months ended March 31, 2021, (a) net sales attributable to the Company’s legacy business that existed prior to the LSC acquisition increased 23.8% when compared to the first quarter of 2020, and (b) net sales from LSC contributed 23.4% to the increase in net sales in the first quarter of 2021 when compared to the first quarter of 2020.

With respect to percentage of total net sales by end-user markets, the LSC contribution for the first quarter of 2021 to automotive, industrial, consumer and communication end-user markets was minimal, less than 7% contribution in each of these categories.

With respect to percentage of total net sales by the computing end-user market, the LSC contribution for the first quarter of 2021 was approximately 45% of total computing net sales.

Cost of goods sold increased approximately $93.5 million for the three months ended June 30, 2021, compared to the same period last year, due to the increased net sales during the second quarter of 2021.

As a percent of sales, cost of goods sold was 63.7% for the three months ended June 30, 2021, compared to 64.8% for the same period last year.

Average unit cost increased approximately 5.0% for the three months ended June 30, 2021, compared to the same period last year due to cost increases from various subcontractors and foundries.

For the three months ended June 30, 2021, gross profit increased approximately 57.5% when compared to the same period last year.

Gross profit margin for the three month periods ended June 30, 2021 and 2020 was 36.3% and 35.2%, respectively.

Operating expenses for the three months ended June 30, 2021, increased $23.8 million when compared to the three months ended June 30, 2020.

Operating expenses as a percentage of net sales was 21.4% and 24.5% for the three months ended June 30, 2021 and 2020, respectively.

Selling, general and administrative expenses (“SG&A”) increased approximately $14.9 million, due to increases in wages and benefits and selling expenses as compared to the same period last year.

Research and development expenses (“R&D”) increased approximately $8.7 million due to increases in wages and benefits and operating expenses as compared to the same period last year.

SG&A, as a percentage of net sales, was 13.7% and 15.7% for the three months ended June 30, 2021 and 2020, respectively.

R&D, as a percentage of net sales, was 6.8% and 7.4% for the three months ended June 30, 2021 and 2020, respectively.

Interest income increased 386.9% for the three months ended June 30, 2021, compared to the same period last year, due to increased revenue related to cross currency swaps.

Interest expense decreased 24.0% for the three months ended June 30, 2021, compared to the same period last year.

The decrease in interest expense for the three months ended June 30, 2021 was due to a decrease in the interest rate on our floating rate debt, partially offset by higher borrowing levels.

Unrealized gain on investments increased from 2020 due to investment income from an investment the Company acquired in the LSC acquisition.

We recognized income tax expense of approximately $12.1 million and $4.7 million for the three months ended June 30, 2021 and 2020, respectively.

The increase in income taxes for 2021 compared to 2020 was primarily attributable to an increase in pretax book income.

Results of Operations for the Six Months Ended June 30, 2021 and 2020

The table below sets forth the condensed consolidated statement of operations line items as a percentage of net sales.

Percent of Net Sales

Six Months Ended June 30,

Cost of goods sold

Total operating expense

Income from operations

Total other income (expense)

Income before income taxes and noncontrolling interest

Income tax provision

Net income attributable to common stockholders

The following table and discussion explains in greater detail our consolidated operating results and financial condition for the six months ended June 30, 2021, compared to the six months ended June 30, 2020.

This discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q.

Six Months Ended

Increase/(Decrease)

Cost of goods sold

Total operating expense

Interest income

Interest expense

Foreign currency (loss) gain, net

Unrealized gain on investments

Income tax provision

Net sales increased approximately $284.2 million for the six months ended June 30, 2021, compared to the same period last year, setting a record both organically and on a consolidated basis.

The 49.9% increase in net sales for the three months ended June 30, 2021 was driven by 25.7% organic growth and 24.2% related to LSC.

The Company achieved growth in global point-of-sale revenue, automotive and computing end-user markets combined with revenue growth for our Pericom branded products for high-end personal computers, servers and data center applications.

For the six months ended June 30, 2021, weighted-average sales price increased 3.6% when compared to the same period last year.

The table below sets forth our revenue as a percentage of total revenue by end-user market for the six months ended June 30, 2021 and 2020:

Six Months Ended

Communications

With respect of total net sales by end-user markets, the LSC contribution to automotive, industrial, consumer and communication end-user markets was 7% or less for the six months ended June 30, 2021.

With respect to the percentage of total net sales by the computing end-user market the LSC contribution for the six months ended June 30, 2021 was approximately 46% of total computing net sales.

The industrial end-user market grew as we experienced strong demand for our products for low-dropout regulators for power tools, eMeters and other industrial applications.

In the communications end-user market the Company has continued to focus on mobile, smartphone, and especially 5G applications.

In the consumer end-user market the Company experienced increasing growth momentum in the IoT space.

The computing end-user market grew due to continued demand for notebooks, Chromebooks, high-end PCs, servers and datacenter applications.

The automotive end-user market grew as we captured both increasing market share and content gains as the Company penetrated new and existing automotive customers and applications.

Cost of goods sold increased approximately $183.1 million for the six months ended June 30, 2021, compared to the same period last year, due to the increased net sales during 2021.

As a percent of sales, cost of goods sold was 65.0% for the six months ended June 30, 2021, compared to 65.3% for the same period last year.

Average unit cost increased approximately 3.8% for the six months ended June 30, 2021, compared to the same period last year due to cost increases from various subcontractors and foundries.

For the six months ended June 30, 2021, gross profit increased approximately 51.2% when compared to the same period last year.

Gross profit margin for the three month periods ended June 30, 2021 and 2020 was 35.0% and 34.7%, respectively.

Operating expenses for the six months ended June 30, 2021, increased $45.1 million when compared to the six months ended June 30, 2020.

Operating expenses as a percentage of net sales was 21.8% and 24.7% for the six months ended June 30, 2021 and 2020, respectively.

SG&A increased approximately $31.4 million, due to higher selling costs and wages and salaries.

R&D increased approximately $12.6 million due to higher wages and benefits, higher selling expense and higher freight and duty costs, as compared to the same period last year.

Amortization of acquisition related intangibles decreased $0.2 million, compared to the same period last year.

SG&A, as a percentage of net sales, was 14.2% and 15.0% for the three months ended March 31, 2021 and 2020, respectively.

R&D, as a percentage of net sales, was 6.7% and 8.4% for the three months ended March 31, 2021 and 2020, respectively.

Interest income increased 181.3% for the three months ended March 31, 2021, compared to the same period last year, due to increased revenue related to cross currency swaps.

Interest expense increased 130.0% for the three months ended March 31, 2021, compared to the same period last year.

The increase in interest expense for the three months ended March 31, 2021 was due to the increased debt related to the LSC acquisition and an increase in interest rates on the floating rate portion of our debt.

SG&A, as a percentage of net sales, was 13.9% and 15.4% for the six months ended June 30, 2021 and 2020, respectively.

R&D, as a percentage of net sales, was 6.8% and 7.9% for the six months ended June 30, 2021 and 2020, respectively.

Interest income increased 259.6% for the six months ended June 30, 2021, compared to the same period last year, due to increased revenue related to cross currency swaps.

Interest expense increased 25.2% for the six months ended June 30, 2021, compared to the same period last year.

The increase in interest expense for the six months ended June 30, 2021 was due to the increased debt related to the LSC acquisition and an increase in interest rates on the floating rate portion of our debt.

Unrealized gain on investments increased from 2020 due to investment income from an investment the Company acquired in the LSC acquisition.

We recognized an income tax expense of approximately $9.4 million and $4.6 million for the three months ended March 31, 2021 and 2020, respectively.

We recognized income tax expense of approximately $21.6 million and $9.2 million for the six months ended June 30, 2021 and 2020, respectively.

The increase in income taxes for 2021 compared to 2020 was primarily attributable to an increase in pretax book income.

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Our Asia subsidiaries maintain credit facilities with several financial institutions through our foreign entities worldwide totaling $173.1 million.

At March 31, 2021, outstanding borrowings were $67.6 million and outstanding letters of credit were $0.5 million under the Asia credit facilities.

In connection with our Asia credit facilities, $54.8 million of cash deposits have been restricted in support of a corresponding loan amount.

During April 2021 $50.0 million of the restricted cash was released from all contractual restrictions, as the applicable loans were repaid in full.

At June 30, 2021, outstanding borrowings were $60.2 million and outstanding letters of credit were $1.1 million under the Asia credit facilities.

Long-term debt

The Company maintains a long-term credit facility (“Credit Agreement”) consisting of a term loan with a current balance of $ 218.0 million and a $ 150.0 million r evolving senior credit facility.

The Company maintains a long-term credit facility (“Credit Agreement”) consisting of a term loan with a current balance of $ 114.7 million and a $ 150.0 million r evolving senior credit facility, of which nothing was drawn on June 30, 2021.

The Credit Agreement matures in May 2023.

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The ERIS debt matures in periods from 2021 through 2033.

At March 31, 2021 and December 31, 2020, our working capital was $617.5 million and $514.2 million, respectively.

At June 30, 2021 and December 31, 2020, our working capital was $582.3 million and $514.2 million, respectively.

We expect cash generated by our operations together with existing cash, cash equivalents, short-term investments and available credit facilities to be sufficient to cover cash needs for working capital, capital expenditures and acquisitions for at least the next 12 months.

Capital expenditures (including accrued capital expenditures) for the three months ended March 31, 2021 and 2020 were $25.1 million and $12.6 million, respectively.

For the first three months of 2021 capital expenditures were approximately 11.5% of our net sales.

While capital expenditures for the three months ended March 31, 2021, is greater than our capital spending target range of 5% to 9% of net sales, we expect our capital expenditure for the twelve months ending December 31, 2021 to be in our target range.

Capital expenditures (including accrued capital expenditures) for the six months ended June 30, 2021 and 2020 were $53.7 million and $28.3 million, respectively.

For the first six months of 2021 capital expenditures were approximately 6.3% of our net sales.

Capital expenditures for the six months ended June 30, 2021, is in line with our capital spending target range of 5% to 9% of net sales.

Our undistributed foreign earnings continue to be indefinitely reinvested in foreign operations, with limited exceptions related to earnings of certain European and Asian subsidiaries.

As of March 31, 2021, our foreign subsidiaries held approximately $222.6 million of cash, cash equivalents and investments of which approximately $17.8 million would be subject to a potential non-U.S.

As of June 30, 2021, our foreign subsidiaries held approximately $213.6 million of cash, cash equivalents and investments of which approximately $38.1 million would be subject to a potential non-U.S.

withholding tax if distributed outside the country in which the cash is currently held.

All of this $38.1 million is held in Germany, China, Korea and Taiwan.

As of March 31, 2021, we had short-term investments totaling $8.4 million.

As of June 30, 2021, we had short-term investments totaling $7.4 million.

These investments are highly liquid with maturity dates greater than three months at the date of purchase.

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Additional sources of liquidity are cash and cash equivalents, short-term investments and our credit facilities.

Our cash, cash equivalents and restricted cash increased from $326.7 million at December 31, 2020 to $339.5 million at March 31, 2021.

Our cash and cash equivalents and restricted cash decreased from $320.5 million at December 31, 2020 to $294.9 million at June 30, 2021.

This decrease is cash, cash equivalents and restricted cash reflects normal operations of the Company.

The table below sets forth a summary of the condensed consolidated statements of cash flows:

Three Months Ended March 31,

Six Months Ended June 30,

Net cash flows provided by operating activities

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Operating Activities

Net cash flows provided by operating activities for the three months ended March 31, 2021 was $68.2 million.

Net cash flows provided by operating activities for the three months ended March 31, 2021 resulted from net income of $40.6 million, depreciation and amortization of intangible assets of $30.5 million, share-based compensation of $6.1 million and an increase in deferred taxes of $1.0 million.

The increases were partially offset by a decrease in noncash working capital accounts of $6.7 million.

Net cash flows provided by operating activities for the three months ended March 31, 2020 was $53.7 million.

Net cash flows provided by operating activities for the three months ended March 31, 2020 resulted from net income of $20.4 million, depreciation and amortization of intangible assets of $27.0 million, share-based compensation of $4.7 million and an increase in noncash working capital accounts of $0.8 million.

Net cash flows provided by operating activities for the six months ended June 30, 2021 was $162.1 million.

Net cash flows provided by operating activities for the six months ended June 30, 2021 resulted from net income of $99.2 million, depreciation and amortization of intangible assets of $61.2 million, share-based compensation of $14.8 million and an increase in deferred taxes of $1.2 million.

The increases were partially offset by a noncash gain on an investment of $9.1 million and a decrease in noncash working capital accounts of $5.5 million.

Net cash flows provided by operating activities for the six months ended June 30, 2020 was $86.7 million.

Net cash flows provided by operating activities for the six months ended June 30, 2020 resulted from net income of $41.8 million, depreciation and amortization of intangible assets of $53.9 million, share-based compensation of $12.4 million, partially offset by a decrease in inventories of $19.8 million and a decrease in noncash working capital accounts, excluding inventory, of $0.4 million.

Investing Activities

Net cash and cash equivalents used in investing activities was $10.4 million for the three months ended March 31, 2021.

Net cash and cash equivalents used in investing activities for the three months ended March 31, 2021 was primarily due to the purchase of property, plant and equipment of $17.2 million, partially offset by net proceeds from the maturity of short-term investments of $2.1 million and other investing cash inflows of $9.1 million for the three months ended March 31, 2021.

Net cash and cash equivalents used in investing activities was $17.6 million for the three months ended March 31, 2020.

Net cash and cash equivalents used in investing activities was primarily due to the purchase of property, plant and equipment of $14.2 million and the additional investment by the Company’s subsidiary ERIS in Yea-Shin Technology Co., Ltd.

(“Yea-Shin”) of $6.1 million, bringing ERIS’ ownership of Yea-Shin to approximately 99.5%.

These outflows of cash were partially offset by net proceeds from the maturity of short-term investments of $1.9 million for the three months ended March 31, 2020.

Net cash and cash equivalents used in investing activities was $36.7 million for the six months ended June 30, 2021.

Net cash and cash equivalents used in investing activities for the six months ended June 30, 2021 was primarily due to the purchase of property, plant and equipment of $45.0 million and the net purchase of short-term investments of $1.1 million, partially offset by the proceeds from the sale of property, plant and equipment of $3.0 million and other investing cash inflows of $6.5 million for the six months ended June 30, 2021.

Net cash and cash equivalents used in investing activities was $34.0 million for the six months ended June 30, 2020.

Net cash and cash equivalents used in investing activities was primarily due to the purchase of property, plant and equipment of $30.7 million, and the additional investment by the Company’s subsidiary ERIS in Yea-Shin of $6.1 million, bring ERIS’ ownership of Yea-Shin to approximately 99.5%.

These outflows of cash were partially offset by net proceeds from the maturity of short-term investments of $5.1 million for the six months ended June 30, 2020.

Financing Activities

Net cash and cash equivalents used in financing activities was $45.4 million for the three months ended March 31, 2021.

Net cash used in financing activities in the three months ended March 31, 2021 consisted primarily of $37.2 million of net reductions in our debt and taxes paid on net share settlements of $9.3 million.

Net cash and cash equivalents used in financing activities was $21.4 million for the three months ended March 31, 2020.

Net cash used in financing activities in the three months ended March 31, 2020 consisted primarily of $16.6 million of net repayments of long-term debt and taxes paid on net share settlement of $4.5 million.

Net cash and cash equivalents used in financing activities was $156.3 million for the six months ended June 30, 2021.

Net cash used in financing activities in the six months ended June 30, 2021 consisted primarily of $151.5 million of net reductions in our debt and taxes paid on net share settlements of $10.0 million, partially offset by a capital contribution by a noncontrolling interest on $4.0 million.

Net cash and cash equivalents provided by financing activities was $241.8 million for the six months ended June 30, 2020.

Net cash provided by financing activities in the six months ended June 30, 2020 consisted primarily of $249.1 million, net advances on our debt facilities, including $200.0 million in anticipation of closing the LSC acquisition, partially offset by taxes paid on net share settlements of $5.4 million.

Use of Derivative Instruments and Hedging

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Except for the historical information contained herein, the matters addressed in this Quarterly Report on Form 10-Q constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934.

We generally identify forward-looking statements by the use of terminology such as “may,” “will,” “could,” “should,” “potential,” “continue,” “expect,” “intend,” “plan,” “estimate,” “anticipate,” “believe,” or similar phrases or the negatives of such terms.

Such forward-looking statements are subject to a variety of risks and uncertainties, including those discussed under “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q, and in other reports we file with the SEC from time to time, that could cause actual results to differ materially from those anticipated by our management.

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All forward-looking statements contained in this Quarterly Report on Form 10-Q are subject to, in addition to the other matters described in this Quarterly Report on Form 10-Q, a variety of significant risks and uncertainties.

The following discussion highlights

some of these risks and uncertainties.

The following discussion highlights some of these risks and uncertainties.

Further, from time to time, information provided by us or statements made by our employees may contain forward-looking information.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis