What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-08-30 compared with 2023-08-25 · 88 added, 109 removed, 577 unchanged (25% of the section changed)

4 unchanged sentences

Consolidated Balance Sheets at June 30, 2024 and 2023

Consolidated Statements of Income for the Years Ended June 30, 2023, 2022 and 202 1

Consolidated Statements of Income and Comprehensive Income for the Years Ended June 30, 2024, 2023, and 2022

Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended June 30, 2024, 2023, and 2022

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We have audited the accompanying consolidated balance sheets of Flexsteel Industries, Inc.

and subsidiaries (the "Company") as of June 30, 2023 and 2022, the related consolidated statements of income, comprehensive income, shareholders'

equity, and cash flows, for each of the three years in the period ended June 30, 2023, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

and subsidiaries (the “Company”) as of June 30, 2024 and 2023, the related consolidated statements of income, comprehensive income, shareholders’ equity, and cash flows, for each of the three years in the period ended June 30, 2024, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 25, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of June 30, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 30, 2024 expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

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• We tested the design and operating effectiveness of internal controls over the inventory valuation process, including controls over the inputs that are used in management’s inventory markdown for the excess of the cost over the amount expected to be realized.

 We tested management's process to determine the inventory markdowns and net realizable value of inventory through inquiries of management, and evaluation of accounting policies and process documentation.

• We tested management's process to determine the inventory markdowns and net realizable value of inventory through inquiries of management, and evaluation of accounting policies and process documentation.

• We tested the accuracy and completeness of the Company’s measurement of inventory markdowns using a sampling approach.

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August 30, 2024

We have served as the Company's auditor since 1965.

We have served as the Company’s auditor since 1965.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and financial statement schedule as of and for the year ended June 30, 2023, of the Company and our report dated August 25, 2023, expressed an unqualified opinion on those financial statements.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended June 30, 2024, of the Company and our report dated August 30, 2024, expressed an unqualified opinion on those financial statements.

Basis for Opinion

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Deferred income taxes

LIABILITIES AND SHAREHOLDERS'

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

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Payroll and related items

Restructuring costs

Environmental remediation

Sales and advertising related items

Total current liabilities

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COMMITMENTS AND CONTINGENCIES (Note 13)

SHAREHOLDERS'

SHAREHOLDERS' EQUITY:

Common stock - $ 1 par value;

authorized 15,000 shares;

8,292 shares issued and 5,174 sh ares outstanding as of June 30, 2023, and 8,190 shares issued and 5,300 shares outstanding as of June 30, 2022

8,407 shares issued

and 5,200 shares outstanding as of June 30, 2024, and 8,292 shares issued and

5,174 shares outstanding as of June 30, 2023

Additional paid-in capital

Treasury stock, at cost;

3,118 shares and 2,890 shares as of June 30, 2023 and 2022, respectively

3,207 shares and 3,118 shares as of June 30, 2024 and

2023, respectively

Retained earnings

Total shareholders'

Total shareholders' equity

See accompanying Notes to Consolidated Financial Statements.

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Other expense

Litigation settlement costs

Operating income

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Interest (expense)

Total other (expense) income

Total other (expense)

Income before income taxes

Income tax (benefit) expense

Income tax expense (benefit)

Weighted average number of common shares outstanding:

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Issuance of common stock:

Stock options exercised, net

Long-term incentive compensation

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Changes in (recoveries) provision for losses on accounts receivable

Change in reserve for VAT receivable

(Gain) on disposition of capital assets

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Other long-term liabilities

Net cash provided by (used in) operating activities

Net cash provided by operating activities

INVESTING ACTIVITIES:

Purchases of investments

Proceeds from sale of investments

Proceeds from sale of capital assets

Capital expenditures

Net cash (used in) provided by investing activities

Net cash (used in) investing activities

FINANCING ACTIVITIES:

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Proceeds from issuance of common stock

Shares withheld for tax payments on vested shares

‎ and options exercised

Shares withheld for tax payments on vested shares and options exercised

Net cash (used in) financing activities

Increase (decrease) in cash and cash equivalents

Increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

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SUPPLEMENTAL INFORMATION

Right-of-use assets exchanged for lease liabilities

Interest paid

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For assets held for sale, if the net book value of the asset is greater than its estimated fair value less cost to sell, an impairment is recorded for the excess of net book value over estimated fair value less cost to sell.

ASSETS HELD FOR SALE – Assets held for sale represent land, buildings, machinery and equipment for locations that have met the criteria of “held for sale” accounting, as specified by Accounting Standards Codification (“ASC”) 360, “Property, Plant, and Equipment.” Once an asset is classified as held for sale, the Company ceases deprecating the asset.

The assets held for sale are being marketed for sale and it is the Company’s intention to complete the sale of the assets within the upcoming year.

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• All taxes imposed on and concurrent with revenue-producing transactions and collected by the Company from a customer, including sales, use, excise, and franchise taxes are excluded from the measurement of the transaction price.

The following table disaggregates the Company’s net sales by product category:

For the years ended June 30,

(in thousands)

ADVERTISING COSTS – are charged to selling, general and administrative expenses in the periods incurred.

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DESIGN, RESEARCH, AND DEVELOPMENT COSTS – are charged to selling, general and administrative expenses in the periods incurred.

Expenditures for design, research, and development costs were approximately $ 2.1 million, $ 2.9 million, and $ 1.9 million in fiscal years 2023, 2022, and 2021, respectively.

Expenditures for design, research, an d development costs were approximately $ 2.1 million, $ 2.1 million, and $ 2.9 million in fiscal years 2024, 2023, and 2022, respective ly.

INSURANCE – The Company is self-insured for health care and most workers’ compensation up to predetermined amounts above which third-party insurance applies.

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The Company recognizes long-term incentive compensation plan expenses during the three-year performance periods;

stock awards are issued following the end of the

performance periods and are subject to verification of results and the Compensation Committee of the Board of Directors approval.

stock awards are issued following the end of the performance periods and are subject to verification of results and the Compensation Committee of the Board of Directors approval.

See Note 11, Stock-Based Compensation .

SEGMENT REPORTING – The Company operates in one reportable segment, furniture products.

The Company’s operations involve the distribution of manufactured and imported furniture for residential and contract markets.

The Company’s operations involve the distribution of manufactured and imported furniture for the residential market.

The Company’s furniture products are sold primarily throughout the United States and Canada by the Company’s internal sales force and various independent representatives.

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On June 1, 2020, the Company’s Board of Directors authorized a $ 6 million share repurchase program through June 9, 2021.

On August 20, 2020, the Company’s Board of Directors authorized an additional $ 8 million share repurchase program to begin on September 4, 2020, through September 3, 2021.

August 20, 2020, the Company’s Board of Directors authorized an additional $ 8 million share repurchase program to begin on September 4, 2020, through September 3, 2021.

On October 22, 2020, the Company’s Board of Directors authorized another $ 30 million share repurchase program through October 29, 2023.

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Due to the variable nature of these costs, they are not included in the measurement of the ROU asset and lease liability.

On August 20, 2021, Flexsteel entered into a lease agreement for the construction of a 507,830 square foot manufacturing facility in Mexicali, Mexico.

The lease commencement date under ASC 842 guidance was on July 1, 2022, the date the lessor made the building available for use by the Company for purposes of completing any leasehold improvements required by the Company prior to beginning operations.

The 12 -year lease ends on June 30, 2034, with options for two five-year extensions .

Annual base rent under the lease is $ 3.2 million plus taxes, insurance, and common area maintenance costs.

As of June 30, 2023, the Company has not begun operations in the Mexicali facility.

On May 3 rd , 2023 the Company entered into a sublease with a third party for 105,000 square feet of the Mexicali with a term of 12 months.

Annual rent under the sublease is $ 1 million, plus a proportionate share of taxes, insurance and common areas maintenance.

The Company also expects to sublease substantially all of the remaining portions of the facility until the capacity is required.

At June 30, 2023 the Company determined that no impairment indicators exist with regard to the Mexicali lease given the current and expected sublease tenants and plans for future operations in the facility.

At June 30, 2023 the right of use asset associated specifically with the Mexicali lease is $ 32.4 million and associated lease liability is $ 33.7 million.

Sublease income received from the sub-tenant is offset against operating lease expense in the Company’s consolidated statements of income.

The components of the Company’s leases reflected on the Company’s consolidated statements of income were as follows:

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Total lease expense

Other information related to leases and future minimum lease payments under non-cancellable operating leases as were as follows:

Other information related to leases and future minimum lease payments under non-cancellable operating leases were as follows:

June 30, 2024

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Operating cash flows from operating leases

Cash received from subleasing of operating lease:

Operating cash flows received from subleasing of operating lease

Right-of-use assets obtained in exchange for lease liabilities:

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RESTRUCTURING

Exit of Commercial Office, Hospitality and Vehicle Seating

On May 15, 2019, the Company announced its plans to exit the Commercial Office and custom-designed Hospitality product lines.

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Total cumulative restructuring and related costs incurred as of June 30, 2022, were $ 59.4 million.

There were no costs related to the restructuring activities in the fiscal year ended June 30, 2023.

There were no costs related to these restructuring activities in the fiscal years ended June 30, 2023 and June 30, 2024.

Manufacturing Network Optimization

On February 5, 2024, the Company announced its plan to close its Dublin, Georgia manufacturing facility.

The closure was completed in the fourth quarter of fiscal year 2024.

As a result of the closure the Company expected to incur pre-tax restructuring expense of approximately $ 2.5 to $ 3.2 million.

Total cumulative restructuring costs related to the planned action were $ 3.0 million.

The Dublin, Georgia facility and property are listed for sale following the closure.

See Note 6, Assets Held For Sale for more information.

The following is a summary of restructuring costs:

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(in thousands)

Inventory impairment

One-time employee termination benefits

Fixed asset impairments

Other associated costs

Total restructuring and related expenses

Cost of goods sold

Operating expenses

One-time employee termination benefits include costs for employee separation benefits.

During the year ended June 30, 2022, the Company recorded a decrease in a pension plan liability that resulted in an expense reduction of $ 0.2 million and recorded a net settlement agreement of $ 0.4 million.

During the year ended June 30, 2024, the Company recorded one-time employee termination benefits, fixed asset impairment charges and other associated costs related to the Dublin closure.

Other associated costs include legal and professional fees, inventory and equipment transfer costs, and other transition costs.

During the year ended June 30, 2022, the Company recorded a decrease in a pension plan liability related to the exit of commercial office, hospitality and vehicle seating activities that resulted in an expense reduction of $ 0.2 million and recorded a net settlement agreement of $ 0.4 million.

Other associated costs include legal and professional fees, stock-based compensation expenses for retention restricted stock units in connection with the Company’s restructuring plan, ongoing facilities, and transition costs.

On March 22, 2021, the Company received notice of a class action lawsuit filed against Flexsteel Industries, Inc., and J.K.

Dittmer and D.P.

Schmidt as individuals, by a number of employees who had worked at the Dubuque Operations and Starkville plants prior to the closure of the locations due to the impact of COVID-19 on the business at that period of time.

The allegations with the claim include failure to pay employee benefits as required by an ERISA-governed severance plan, failure of J.K.

Dittmer and D.P.

Schmidt to act with

respect to the ERISA-governed severance plan, and failure to provide 60-days’ notice or the equivalent amount of pay to the employees required by the WARN Act when the Company closed the Dubuque and Starkville locations.

The parties participated in a lengthy mediation and on December 3, 2021, agreed to resolve the matter for $ 1.3 million.

The matter was dismissed with prejudice on September 1, 2022.

The Company paid $ 1.3 million in the year ended June 30, 2023 .

During the quarter ended September 30, 2022, the Company paid all remaining costs associated with the restructuring program.

All expenses related to the manufacturing network optimization restructuring plan were incurred and paid during the year ended June 30, 2024.

The Company paid all remaining costs associated with the exit of commercial office, hospitality and vehicle seating restructuring program in the year ended June 30, 2023.

The roll forward of the accrued restructuring costs is as follows, for the years ended June 30, 2024, 2023, and 2022:

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Accrual balance at June 30, 2023

Costs incurred

Expenses paid

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ASSETS HELD FOR SALE

During fiscal year 2020, the Company committed to a plan to sell assets located at the Company’s Harrison, Arkansas, Dubuque, Iowa, and Starkville, Mississippi locations as part of the Company’s restructuring plan, see Note 5 Restructuring .

The Company completed the sale of the Dubuque, Iowa and one Harrison, Arkansas location during the year ended June 30, 2021.

The Company completed the sale of the remaining Harrison, Arkansas facility during the year ended June 30, 2022.

As of June 30, 2023, the Company continues to actively market the assets in Starkville, Mississippi.

During fiscal year 2020, the Company committed to a plan to sell assets located at the Company’s Starkville, Mississippi location as part of the Company’s restructuring plan, see Note 5 Restructuring .

The Company completed the sale of the Starkville, Mississippi location in the year ended June 30, 2024.

The Company received proceeds of $ 3.9 million and recorded a gain of $ 3.3 million related to the sale.

During fiscal year 2024, the Company committed to a plan to sell assets located at the Company's Dublin, Georgia location as part of the Company's announced closure of the facility.

As of June 30, 2024, the Company is actively marketing the facility and property in Dublin, Georgia.

A summary of the assets held for sale is included in the table below as of June 30, 2024.

1 unchanged sentence

(in thousands)

Starkville, Mississippi

Dublin, Georgia

Building & building improvements

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(in thousands)

Purchase commitments

CREDIT ARRANGEMENTS

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In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations.

As of June 30, 2023, it was determined the Company has reached a more-likely- than-not position that the Company will realize the entirety of its deferred tax assets.

Therefore, the Company has reversed the valuation allowance against the federal and state deferred tax assets recorded as of June 30, 2022 of $ 9.8 million.

Income tax expense was calculated based upon the following components of income (loss) before income taxes for the years ended June 30:

As of June 30, 2023, it was determined the Company had reached a more-likely-than-not position that the Company will realize the entirety of its deferred tax assets.

Therefore, the Company reversed the previously recorded valuation allowance against the federal and state deferred tax assets recorded as of June 30, 2022 of $ 9.8 million.

As of June 30, 2024 the Company maintains is determination that it is more-likely-than-not that deferred tax assets will be realized.

Income tax expense was calculated based upon the following components of income before income taxes for the years ended June 30:

(in thousands)

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Income before income taxes

The income tax benefit (provision) is as follows for the years ended June 30:

The income tax (provision) benefit is as follows for the years ended June 30:

(in thousands)

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Foreign adjustments

Deferred adjustments

Expired state credits

Research & development credit

Remeasurement of deferred tax assets and valuation

Amended return impacts

State rate change

State rate change and other state items

Effective tax rate

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Balance at June 30

The Company records interest expenses and penalties related to income taxes as income tax expenses in the consolidated statements of income.

The Company records interest expense and penalties related to income taxes as income tax expense in the consolidated statements of income.

The Company does not expect that there will be any positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months.

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Lease liabilities

Research & development expenditure

On June 30, 2024, certain state tax attribute carryforwards of $ 0.2 million were available, with $ 0.2 million of credits expiring beginning in fiscal years 2025 through 2028, and $ 0.1 million of state NOLs carryforward.

Some of the state NOLs carryforward will have an indefinite carryforward and some will expire in varying amounts between 2025 and 2040 .

Some of the state NOL carryforwards will have an indefinite carryforward and some will expire in varying amounts between 2039 and 2041 .

As of June 30, 2024, it was determined that the Company has reached a more-likely-than-not position that the Company will realize the entirety of its state attribute carryforwards and its U.S.

federal deferred tax assets.

Therefore, the Company has reversed the valuation allowance against the state attribute carryforward and the entirety of the deferred tax asset balance.

The Company is subject to U.S.

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The 2022 Plan is a long-term incentive plan pursuant to which awards may be granted to certain employees, independent contractors and directors of the Company, in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares or other stock-based awards.

Awards for 10,925 shares were granted under the 2022 Plan in the year ended June 30, 2023 with a fair value per share of $ 19.95 .

These shares remain unvested and have no forfeitures as of June 30, 2023.

These shares are included in the Restricted Shares and RSUs table below.

For periods beginning on or after July 1, 2023, restricted stock units ("RSUs") and performance stock units ("PSUs") granted to officers and key employees as part of long-term compensation programs are issued from the 2022 Plan.

RSUs and PSUs awarded from the 2022 Plan are included in the Long-Term Incentive Compensation or Restricted Share and RSUs tables below.

(2) Long-Term Incentive Compensation Plan (“LTIP”)

The LTIP provides for performance stock units (“PSUs”) to be awarded to officers and key employees based on performance goals set by the Compensation Committee of the Board of Directors (the “Committee”).

For awards under the LTIP for the three year performance periods ending June 30, 2023, 2024, and 2025, participants may earn one-third of the award in each of

the three years based on meeting performance goals for that year.

T he Committee selected Adjusted Earnings Before Interest and Tax based on a defined percentage growth as the performance metric for the performance periods ending June 30, 2023, 2024, and 2025.

In conjunction with each grant of PSUs, the Committee granted RSUs under the 2013 Omnibus Stock Plan that vest at the end of three years .

The LTIP provides for PSUs to be awarded to officers and key employees based on performance goals set by the Compensation Committee of the Board of Directors (the “Committee”).

In conjunction with each grant of PSUs, the Committee granted RSUs under the 2013 Omnibus Stock Plan that vested at the end of three years.

No further awards will be issued under this plan.

(3) 2013 Omnibus Stock Plan, and 2009 Stock Option Plan

The 2013 Omnibus Stock Plan was for key employees, officers and directors and provides for the granting of incentive and nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and performance units.

No further stock units will be granted under this plan .

Long-Term Incentive Compensation

The table below sets forth, as of June 30, 2024, the number of unvested PSUs granted at the target performance level for the 2022-2024, 2023-2025, and 2024-2026 performance periods under the LTIP and the number of unvested RSUs granted in conjunction with the PSUs:

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Unvested as of June 30, 2024

Total unrecognized stock-based compensation related to the unvested PSUs at the target performance level and the related unvested RSUs was $ 2.2 million as of June 30, 2023, which is expected to be recognized over a period of 1.2 years.

(3) 2013 Omnibus Stock Plan, and 2009 Stock Option Plan

The 2013 Omnibus Stock Plan and 2009 Stock Option Plan were for key employees, officers and directors and provides for the granting of incentive and nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and performance units.

No further stock units will be granted under the 2013 Omnibus Stock Plan and the 2009 stock option plan.

To tal unrecognized stock-based compensation related to the unvested PSUs at the target performance level and the related unvested RSUs was $ 2.0 million as of June 30, 2024, which is expected to be recognized over a period of 1.5 years.

Restricted Shares and RSUs

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Total unrecognized stock-based compensation related to unvested restricted shares and unvested RSUs (not granted in conjunction with the PSUs) was $ 0.2 million as of June 30, 2024, which is expected to be recognized over a weighted average period of 1.6 years.

The weighted average grant date fair value of stock options granted during fiscal years 2023, 2022, and 2021 were none , none , and $ 6.77 , respectively.

The weighted average assumptions used to estimate these fair values were as follows:

For the years ended June 30,

Dividend yield

Expected volatility

Risk-free interest rate

Expected life (in years)

The expected volatility and expected life are determined based on historical data.

The interest rate is based on U.S.

Treasury risk-free rate in affect at the date of grant for the periods corresponding with the expected term of options.

No stock options were granted during fiscal years 2024, 2023, and 2022.

A summary of the activity of the Company’s stock option plans during the years ended June 30, 2024, 2023, and 2022, is presented below:

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Stock-based compensation granted outside a plan

During the quarter ended June 30, 2020, the Company awarded its Chief Financial Officer/Chief Operating Officer 79,000 options outside of any Company stock plans.

During the quarter ended June 30, 2020, the Company awarded its former Chief Financial Officer/Chief Operating Officer (current Chief Executive Officer) 79,000 options outside of any Company stock plans.

All 79,000 options remain outstanding as of June 30, 2024, with an exercise price of $ 9.97 and a remaining life of 5.8 years.

There is no remaining unrecognized stock-based compensation expense related to these options.

During the quarter ended December 31, 2018, the Company awarded its Chief Executive Officer 55,000 options outside of any Company stock plans.

All 55,000 options remain outstanding as of March 31, 2023, with an exercise price of $ 21.96 and a remaining life of 5.5 years.

During the quarter ended December 31, 2018, the Company awarded its former Chief Executive Officer 55,000 options outside of any Company stock plans.

All 55,000 options remain outstanding as of June 30, 2024, with an exercise price of $ 21.96 and a remaining life of 4.5 years.

There is no remaining unrecognized stock-based compensation expense related to these options.

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The Company contributes to one multi-employer defined benefit pension plan under the terms of collective-bargaining agreements that cover its union-represented employees.

The Company’s participation in the current and previous defined benefit pension plans for the annual period ended June 30, 2023, is outlined in the following table.

The Company’s participation in the current and previous defined benefit pension plans for the fiscal year ended June 30, 2024, is outlined in the following table.

Unless otherwise noted, the most recent Pension Protection Act zone status available in 2024 and 2023 is for the plan’s year-end on December 31, 2023, and 2022, respectively.

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For the Quarter Ended

Operating income

Earnings per share:

(a) During the quarter ended March 31, 2024, the Company recorded expense of $ 2.6 million as a result of the restructuring activity associated with the closure of the Dublin, Georgia facility.

See Note 5 Restructuring , of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for more information.

(b) During the quarter June 30, 2024, the Company recorded income of $ 3.3 million associated with the sale of the Starkville, Mississippi facility.

See Note 6, Assets Held for Sale , of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for more information.

The Company recorded expense of $ 0.4 million as a result of the restructuring activity associated with the closure of the Dublin, Georgia facility.

See Note 5 Restructuring , of the Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K for more information.

For the Quarter Ended

December 31 (a)

6 unchanged sentences

See Note 10 Income Taxes, included in this Annual Report on Form 10-K for more information.

For the Quarter Ended

Operating income (loss)

Net income (loss)

Earnings (loss) per share:

SUBSEQUENT EVENTS

2 unchanged sentences

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data