What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-07 compared with 2024-08-08 · 84 added, 89 removed, 273 unchanged (39% of the section changed)

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The following management discussion and analysis ("MD&A") of the financial condition and results of operations of DXP Enterprises, Inc.

together with its subsidiaries (collectively "DXP," "Company," "us," "we," or "our") for the three and six months ended June 30, 2024 should be read in conjunction with our previous Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q, and the consolidated financial statements and notes thereto included in such reports.

together with its subsidiaries (collectively "DXP," "Company," "us," "we," or "our") for the three and nine months ended September 30, 2024 should be read in conjunction with our previous Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q, and the consolidated financial statements and notes thereto included in such reports.

The Company's consolidated financial statements are prepared in accordance with U.S.

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We cannot assure that these are all of the factors that could cause actual results to vary materially from the forward-looking statements.

Factors that could cause or contribute to such differences include, but are not limited to, those discussed in "Risk Factors", in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 11, 2024.

We assume no obligation and do not intend to update these forward-looking statements.

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NON-GAAP FINANCIAL MEASURES

In an effort to provide investors with additional information regarding our results of operations as determined by accounting principles generally accepted in the United States of America ("U.S.

In an effort to provide investors with additional information regarding our results of operations as determined by U.S.

GAAP, we disclose non-GAAP financial measures.

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Our key non-GAAP business metrics may be calculated in a different manner than similarly titled metrics used by other companies.

See “Non-GAAP Financial Measures and Reconciliations” for additional information on non-GAAP financial measures and a reconciliation to the most comparable GAAP measures.

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

See “Non-GAAP Financial Measures and Reconciliations” for additional information on non-GAAP financial measures and a reconciliation to the most comparable U.S.

GAAP measures.

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

2024 2023 (1)

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EBITDA and Adjusted EBITDA

We define and calculate EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, amortization, and non-controlling interest.

We define and calculate Adjusted EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, amortization minus stock-based compensation expense, non-controlling interest before taxes and all other non-cash charges, adjustments, and non-recurring items.

We define and calculate EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, and amortization.

We define and calculate Adjusted EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, and amortization minus stock-based compensation expense and all other non-cash charges, adjustments, and non-recurring items.

We identify the impact of all other non-cash charges, adjustments and non-recurring items because we believe these items do not directly reflect our underlying operations.

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Matters Affecting Comparability

There were 127 business days during the six months ended June 30, 2024 and 128 business days during the six months ended June 30, 2023.

There were 64 business days during the three months ended September 30, 2024 and 63 business days during the three months ended September 30, 2023.

CURRENT MARKET CONDITIONS AND OUTLOOK

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The replacement and mission-critical nature of our products and services within the Company's Service Centers and Innovative Pumping Solutions business segments and industrial and manufacturing environments and processes drives a demand and outlook that are correlated with global, national and regional industrial production, capacity utilization and long-term GDP growth.

The Company's recent order activity improved as markets strengthened.

For the six months ended June 30, 2024, we had approximately $730.5 million in sales in our Service Centers and Innovative Pumping Solutions segments, an increase of approximately 1.6% compared to the six months ended June 30, 2023.

Our performance has been strengthened by price increases from our vendors and suppliers.

During the six months ended June 30, 2024, $25.0 million was associated with recent acquisitions in the water and wastewater markets.

We expect to continue to benefit from the increased oil and gas activity throughout the remainder of 2024.

Additionally, we expect to benefit from the recent water and wastewater acquisitions as we continue to scale this platform both organically and by positioning DXP Water to bid on projects that historically may have not been available to the separate acquisitions on a standalone basis.

For the nine months ended September 30, 2024, we had approximately $1,137.2 million in sales in our Service Centers and Innovative Pumping Solutions segments, an increase of approximately 6.0 percent compared to the nine months ended September 30, 2023.

Our performance has been strengthened by price increases from our vendors and suppliers and the Company's acquisition activity.

During the nine months ended September 30, 2024, $40.5 million was associated with recent acquisitions in the water and wastewater markets.

We are encouraged by the tapering effects of inflation and believe as we move forward, demand should be consistent across all the end markets we provide products and service.

Supply Chain Services Segment

For the six months ended June 30, 2024, we had approximately $127.6 million in sales in our Supply Chain Services segment, a decrease of approximately 4.2 percent compared to the six months ended June 30, 2023 due to some facility closures with some of our customers as well as efficiencies we brought to our new diversified chemical customer that we added last year.

For the nine months ended September 30, 2024, we had approximately $193.9 million in sales in our Supply Chain Services segment, a decrease of approximately 2.6 percent compared to the nine months ended September 30, 2023.

This is primarily due to some facility closures with some of our customers as well as the inherent efficiencies we bring to customers as part of our value proposition.

As we move forward and given our increasing demand, we expect our performance to be driven by either the addition of new customers or an increase in spend by our existing customers.

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The SCS segment provides a wide range of MRO products and manages all or part of our customer's supply chain function, and inventory management.

Three Months Ended June 30,

Three Months Ended September 30, 2024 compared to Three Months Ended September 30, 2023

Three Months Ended September 30,

2024 % 2023 %

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Income from operations 39,608 8.4% 35,856 8.6%

Other income, net

(1,035) (0.2)% (242) (0.1)%

Interest expense

15,716 3.3% 12,684 3.0%

Other expense, net 160 —% 1,234 0.3%

Income before income taxes 23,732 5.0% 21,938 5.2%

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$ 1.27 $ 0.93

Three Months Ended June 30, 2024 compared to Three Months Ended June 30, 2023

Sales for the three months ended June 30, 2024 increased $17.5 million, or 4.1 percent, to approximately $445.6 million from $428.0 million for the prior year's corresponding period.

The overall increase in sales was the result of an increase in sales in our IPS segment of $25.3 million, offset by a decrease in sales in our SC and SCS segments of $7.3 million and $0.5 million, respectively.

Sales for the three months ended September 30, 2024 increased $53.7 million, or 12.8 percent, to approximately $472.9 million from $419.2 million for the prior year's corresponding period.

The overall increase in sales was the result of an increase in sales in our SC, IPS, and SCS segments of $22.4 million, $30.9 million, and $0.5 million, respectively.

The fluctuations in sales are further explained in our business segment discussions below.

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 (1)

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Service Centers segment.

Sales for the SC segment decreased $7.3 million, or 2.3 percent, for the three months ended June 30, 2024, compared to the prior year's corresponding period.

This sales decrease is primarily the result of the timing of jobs and business mix.

Sales for the SC segment increased $22.4 million, or 7.6 percent, for the three months ended September 30, 2024, compared to the prior year's corresponding period.

This sales increase is primarily the result of the timing of jobs and business mix, as well as $13.0 million associated with recent acquisition.

Innovative Pumping Solutions segment.

Sales for the IPS segment increased $25.3 million, or 52.7 percent, for the three months ended June 30, 2024, compared to the prior year's corresponding period.

$14.7 million was associated with recent acquisitions in the water and wastewater markets.

Sales for the IPS segment increased $30.9 million, or 52.3 percent, for the three months ended September 30, 2024, compared to the prior year's corresponding period.

This sales increase is primarily the result of the timing of jobs, increased project related work, and $15.6 million was associated with recent acquisitions in the water and wastewater markets.

Supply Chain Services segment.

Sales for the SCS segment decreased by $0.5 million, or 0.8 percent, for the three months ended June 30, 2024, compared to the prior year's corresponding period.

The decrease in sales was primarily the result of facility closures with existing customers.

GROSS PROFIT.

Gross profit as a percentage of sales for the three months ended June 30, 2024 was 30.9 percent versus 30.8 percent in the prior year's corresponding period.

The increase in the gross profit percentage is primarily the result of an increase in gross profit within our IPS segment.

Sales for the SCS segment increased by $0.5 million, or 0.7 percent, for the three months ended September 30, 2024, compared to the prior year's corresponding period.

The increase in sales was primarily the result of increased business activity.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A").

SG&A for the three months ended June 30, 2024 increased by $6.1 million, or 6.4 percent, to $100.4 million from $94.4 million for the prior year's corresponding period.

SG&A for the three months ended September 30, 2024 increased by $16.8 million, or 18.7 percent, to $106.5 million from $89.7 million for the prior year's corresponding period.

The increase in SG&A is primarily the result of increased payroll, incentive compensation and related taxes and 401(k) expenses.

OPERATING INCOME.

Operating income for the second quarter of 2024 decreased by $0.1 million to $37.4 million, from $37.5 million in the prior year's corresponding period.

This decrease in operating income was driven by the increase in SG&A during the period.

Operating income for the third quarter of 2024 increased by $3.8 million to $39.6 million, from $35.9 million in the prior year's corresponding period.

This increase in operating income was driven by the increase in sales during the period.

INTEREST EXPENSE.

Interest expense for the second quarter of 2024 increased $3.5 million compared to the prior year's corresponding period.

This increase was primarily due to the Company borrowing an additional $125.0 million on its Term Loan during the fourth quarter of 2023 and incurring higher than average interest rates on such debt due to changes in the macroeconomic environment and the associated increasing interest rate policy by the U.S.

Federal Reserve Bank.

Interest expense for the third quarter of 2024 increased $3.0 million compared to the prior year's corresponding period.

This increase was primarily due to the Company borrowing an additional $125.0 million on its Term Loan during the fourth quarter of 2023.

INCOME TAXES.

Our effective tax rate from continuing operations was a tax expense of 27.4 percent for the three months ended June 30, 2024, compared to a tax expense of 26.3 percent for the three months ended June 30, 2023.

Our effective tax rate from continuing operations was a tax expense of 11.1 percent for the three months ended September 30, 2024, compared to a tax expense of 26.3 percent for the three months ended September 30, 2023.

Compared to the U.S.

statutory rate for the three months ended June 30, 2024, the effective tax rate was increased by state taxes, foreign taxes, nondeductible expenses, contingent consideration payments, and uncertain tax positions recorded for research and development tax credits and was partially offset by research and development tax credits and other tax credits.

Six Months Ended June 30, 2024 compared to Six Months Ended June 30, 2023

Six Months Ended June 30,

statutory rate for the three months ended September 30, 2024, the effective tax rate was decreased by research and development tax credits and other tax credits and partially offset by state taxes, foreign taxes, nondeductible expenses, contingent consideration payments, and uncertain tax positions recorded for research and development tax credits.

Nine Months Ended September 30, 2024 compared to Nine Months Ended September 30, 2023

Nine Months Ended September 30,

2024 % 2023 %

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Income from operations 106,091 8.0% 108,735 8.6%

Other income, net

(3,004) (0.4)% (712) (0.1)%

Interest expense

46,644 3.5% 36,068 2.8%

Other (income) expense, net

(2,844) (0.2)% 522 —%

Income before income taxes 62,291 4.7% 72,145 5.7%

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$ 2.93 $ 2.94

Sales for the six months ended June 30, 2024 increased $5.9 million, or 0.7 percent, to approximately $858.2 million from $852.3 million for the prior year's corresponding period.

The overall increase in sales was the result of an increase in sales within our IPS of $36.1 million, offset by decreases in sales in our SC and SCS segments of $24.7 million and $5.6 million respectively.

Sales for the nine months ended September 30, 2024 increased $59.6 million, or 4.7 percent, to approximately $1,331.1 million from $1,271.6 million for the prior year's corresponding period.

The overall increase in sales was the result of an increase in sales within our IPS segment of $67.0 million, offset by decreases in sales in our SC and SCS segments of $2.3 million and $5.1 million, respectively.

The fluctuations in sales are further explained in our business segment discussions below.

Six Months Ended June 30,

Nine Months Ended September 30,

2024 2023 (1)

Change Change%

Sales by Business Segment (in thousands, except change %)

Sales by Business Segment

Service Centers $ 911,783 $ 914,078 $ (2,295) (0.3) %

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Service Centers segment.

Sales for the SC segment decreased by $24.7 million, or 4.0 percent for the six months ended June 30, 2024, compared to the prior year's corresponding period.

Sales from acquisitions for the SC segment decreased $8.9 million compared to the corresponding period.

Sales for the SC segment decreased by $2.3 million, or 0.3 percent for the nine months ended September 30, 2024, compared to the prior year's corresponding period.

Sales from acquisitions for the SC segment increased $4.1 million compared to the corresponding period.

Total sales for the SC segment excluding acquisitions decreased $6.4 million from the prior year's corresponding period.

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Innovative Pumping Solutions segment .

Sales for the IPS segment increased by $36.1 million, or 36.3 percent for the six months ended June 30, 2024 compared to the prior year's corresponding period.

Sales for the IPS segment increased by $67.0 million, or 42.3 percent for the nine months ended September 30, 2024 compared to the prior year's corresponding period.

Sales from acquisitions for the IPS segment increased $29.4 million compared to the corresponding period.

Total sales for the IPS segment excluding acquisitions increased $37.6 million from the prior year's corresponding period.

This increase was primarily the result of an increase in the capital spending by oil and gas producers and renewables sector.

This increase was primarily the result of an increase in project related jobs due to increased capital spending by oil and gas producers and renewables sector.

Supply Chain Services segment.

Sales for the SCS segment decreased by $5.6 million, or 4.2 percent, for the six months ended June 30, 2024, compared to the prior year's corresponding period.

The decrease in sales was primarily the result of facility closures with existing customers.

GROSS PROFIT.

Gross profit as a percentage of sales for the six months ended June 30, 2024 increased by approximately 35 basis points from the prior year's corresponding period.

The increase in the gross profit percentage is primarily the result of an approximate 62 basis point increase in our SC segment, a 131 basis point increase in our SCS segment, and a 322 basis point decrease in the gross profit percentage in our IPS segments.

Sales for the SCS segment decreased by $5.1 million, or 2.6 percent, for the nine months ended September 30, 2024, compared to the prior year's corresponding period.

The decrease in sales was primarily the result of customer facilities closing where we operated.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES ("SG&A").

SG&A for the six months ended June 30, 2024 increased by approximately $11.2 million, or 6.1 percent, to $195.2 million from $184.0 million for the prior year's corresponding period.

SG&A for the nine months ended September 30, 2024 increased by approximately $28.0 million, or 10.2 percent, to $301.7 million from $273.7 million for the prior year's corresponding period.

The increase in SG&A is primarily the result of increased payroll, incentive compensation and related taxes and 401(k) expenses as a result of increased business activity.

OPERATING INCOME.

Operating income for the six months ended June 30, 2024 decreased by $6.4 million or 8.8% to $66.5 million from $72.9 million in the prior year's corresponding period.

Operating income for the nine months ended September 30, 2024 decreased by $2.6 million or 2.4% to $106.1 million from $108.7 million in the prior year's corresponding period.

This decrease in operating income is primarily related to the aforementioned increase in SG&A.

INTEREST EXPENSE.

Interest expense for the six months ended June 30, 2024 increased $7.5 million compared with the prior year's corresponding period.

Interest expense for the nine months ended September 30, 2024 increased $10.6 million compared with the prior year's corresponding period.

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INCOME TAXES.

Our effective tax rate from continuing operations was a tax expense of 27.3 percent for the six months ended June 30, 2024, compared to a tax expense of 27.0 percent for the six months ended June 30, 2023.

Our effective tax rate from continuing operations was a tax expense of 21.1 percent for the nine months ended September 30, 2024, compared to a tax expense of 26.8 percent for the nine months ended September 30, 2023.

Compared to the U.S.

statutory rate for the six months ended June 30, 2024, the effective tax rate was increased by state taxes, foreign taxes, nondeductible expenses, contingent consideration payments, and uncertain tax positions recorded for research and development tax credits and was partially offset by research and development tax credits and other tax credits.

statutory rate for the nine months ended September 30, 2024, the effective tax rate was decreased by research and development tax credits and other tax credits and partially offset by state taxes, foreign taxes, nondeductible expenses, contingent consideration payments, and uncertain tax positions recorded for research and development tax credits.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS

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GAAP financial measure (in thousands) :

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

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

2024 2023 (1)

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EBITDA, Adjusted EBITDA, EBITDA Margin, and Adjusted EBITDA Margin

We define and calculate EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, amortization, and non-controlling interest.

We define and calculate EBITDA as Net income attributable to DXP Enterprises, Inc., plus interest, taxes, depreciation, and amortization.

We identify the impact of all other non-cash charges, adjustments and non-recurring items because we believe these items do not directly reflect our underlying operations.

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GAAP financial measure (in thousands) :

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

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

2024 2023 2024 2023

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Interest expense 15,716 12,684 46,644 36,068

15,384 11,863 30,928 23,384

Provision for income tax expense

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Adjusted EBITDA Margin 11.1 % 10.5 % 10.6 % 10.4 %

(1) Other non-recurring items includes unique acquisition integration costs and other non-cash, non-recurring costs not related to continuing business operations.

(1) Other non-recurring items includes unique acquisition integration costs and other non-cash, non-recurring costs.

Free Cash Flow

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GAAP financial measure (in thousands) :

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

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

2024 2023 2024 2023

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General Overview

As of June 30, 2024, we had available cash of $49.9 million and credit facility availability of $131.4 million.

On October 3, 2024, the Company entered into an amendment (the “Third Term Loan Amendment”) on its existing Senior Secured Term Loan B, repricing and borrowing an incremental $105 million that was added to the existing Senior Secured Term Loan B.

Including the new borrowings, the Company will have $649.5 million in Senior Secured Term Loan B borrowings.

The new Senior Secured Term Loan B borrowings mature on October 13, 2030, and are priced at Term SOFR plus an applicable margin of 3.75 percent.

As of September 30, 2024, we had available cash of $35.0 million and credit facility availability of $131.6 million.

We have a $135.0 million asset-backed line of credit (the "ABL Revolver"), partially offset by letters of credit of $3.4 million.

We had no borrowings outstanding on our ABL Revolver as of June 30, 2024.

During the six months ended June 30, 2024, we did not draw down on our ABL Revolver.

We had no borrowings outstanding on our ABL Revolver as of September 30, 2024.

Our primary source of capital is cash flow from operations, supplemented as necessary by bank borrowings or other sources of financing.

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The following table summarizes our net cash flows provided by and used in operating activities, investing activities and financing activities for the periods presented (in thousands) :

Six Months Ended June 30,

Nine Months Ended September 30,

Net Cash Provided by (Used in):

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Operating Activities

The Company generated $41.7 million of cash from operating activities during the six months ended June 30, 2024 compared to $24.0 million of cash generated during the prior year's corresponding period.

The Company generated $70.1 million of cash from operating activities during the nine months ended September 30, 2024 compared to $63.8 million of cash generated during the prior year's corresponding period.

Investing Activities

For the six months ended June 30, 2024, net cash used in investing activities was $130.7 million compared to a $14.1 million use of cash during the prior year’s corresponding period.

This $116.6 million increase was primarily driven by acquisition activity during the six months ended June 30, 2024.

Total cash paid for acquisitions, net of cash acquired, was $119.0 million compared to $8.5 million for the six months ended June 30, 2023.

The increase was partially offset by purchases of property and equipment of $11.7 million for the six months ended June 30, 2024 compared to $5.6 million for the six months ended June 30, 2023.

For the nine months ended September 30, 2024, net cash used in investing activities was $165.1 million compared to a $16.0 million use of cash during the prior year’s corresponding period.

This $149.2 million increase was primarily driven by acquisition activity during the nine months ended September 30, 2024.

Total cash paid for acquisitions, net of cash acquired, was $149.4 million compared to $8.8 million for the nine months ended September 30, 2023.

The increase is also driven by purchases of property and equipment of $15.7 million for the nine months ended September 30, 2024 compared to $7.1 million for the nine months ended September 30, 2023.

Financing Activities

For the six months ended June 30, 2024, net cash used in financing activities was $35.0 million, compared to net cash used in financing activities of $40.2 million during the prior year’s corresponding period.

The increase was primarily due to share repurchases of $24.0 million for the six months ended June 30, 2024 compared to $33.6 million for the six months ended June 30, 2023.

The Company also paid contingent consideration of $4.5 million for the six months ended June 30, 2024 compared to $4.0 million for the six months ended June 30, 2023.

For the nine months ended September 30, 2024, net cash used in financing activities was $42.4 million, compared to net cash used in financing activities of $66.7 million during the prior year’s corresponding period.

The decrease was primarily due to share repurchases of $28.8 million for the nine months ended September 30, 2024 compared to $56.2 million for the nine months ended September 30, 2023.

The Company also paid contingent consideration of $4.6 million for the nine months ended September 30, 2024 compared to $5.1 million for the nine months ended September 30, 2023.

Financial Covenants:

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The Company is restricted from allowing its fixed charge coverage ratio to be less than 1.00 to 1.00 during a compliance period, which is triggered when the availability under the ABL Revolver falls below a threshold set forth in the ABL Credit Agreement.

As of June 30, 2024, the Company's Fixed Charge Coverage Ratio was 1.39 to 1.00.

Secured Leverage Ratio – The Term Loan B Agreement requires that the Company’s Secured Leverage Ratio, defined as the ratio, as of the last day of any fiscal quarter of consolidated secured debt (net of unrestricted cash, not to exceed $200 million) as of such day to EBITDA, beginning with the fiscal quarter ending June 30, 2024, is either equal to or less than as indicated in the table below:

As of September 30, 2024, the Company's Fixed Charge Coverage Ratio was 1.72 to 1.00.

Secured Leverage Ratio – The Term Loan B Agreement requires that the Company’s Secured Leverage Ratio, defined as the ratio, as of the last day of any fiscal quarter of consolidated secured debt (net of unrestricted cash, not to exceed $200 million) as of such day to EBITDA, beginning with the fiscal quarter ending September 30, 2024, is either equal to or less than as indicated in the table below:

Fiscal Quarter Secured Leverage Ratio

June 30, 2024 5.50:1.00

September 30, 2024 5.50:1.00

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June 30, 2026 4.75:1.00

September 30, 2026 and thereafter 4.75:1.00

As of June 30, 2024, the Company’s Secured Leverage Ratio was 2.64 to 1.00.

September 30, 2026 4.75:1.00

December 31, 2026 and thereafter 4.75:1.00

As of September 30, 2024, the Company’s Secured Leverage Ratio was 2.54 to 1.00.

EBITDA as defined under the Term Loan B Agreement for financial covenant purposes means, without duplication, for any period of determination, the sum of, consolidated net income during such period;

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(i) income tax expense, (ii) franchise tax expense, (iii) interest expense, (iv) amortization and depreciation during such period, (v) all non-cash charges and adjustments, and (vi) non-recurring cash expenses related to the Term Loan, provided, that if the Company acquires or disposes of any property during such period (other than under certain exceptions specified in the Term Loan B Agreement, including the sale of inventory in the ordinary course of business), then EBITDA shall be calculated, after giving pro forma effect to such acquisition or disposition, as if such acquisition or disposition had occurred on the first day of such period.

The Company was in compliance with all financial covenants as of June 30, 2024.

The Company was in compliance with all financial covenants as of September 30, 2024.

Funding Commitments

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These policies have been discussed with the Audit Committee of the Board of Directors of DXP.

The Company's unaudited condensed financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S.

The Company's unaudited condensed financial statements are prepared in accordance with U.S.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared on substantially the same basis as our annual Consolidated Financial Statements and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2023.

For a more complete discussion of our significant accounting policies and business practices, refer to the consolidated Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 11, 2024.

The results of operations for the six months ended June 30, 2024 are not necessarily indicative of results expected for the full fiscal year.

For a more complete discussion of our significant accounting policies and business practices, refer to the consolidated Annual Report on Form 10-K filed with the SEC on March 11, 2024.

The results of operations for the nine months ended September 30, 2024 are not necessarily indicative of results expected for the full fiscal year.

RECENT ACCOUNTING PRONOUNCEMENTS

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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