What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-07 compared with 2024-05-08 · 117 added, 89 removed, 199 unchanged (51% of the section changed)

18 unchanged sentences

keeping pace with developments in the industries we serve and with technological innovation generally;

designing, developing and introducing new products that are accepted by original equipment manufacturers in order to retain our existing customers and obtain new customers;

designing, developing and introducing new products that are accepted by OEMs in order to retain our existing customers and obtain new customers;

managing our manufacturing and procurement process effectively;

22 unchanged sentences

Outsourcing these subsystems has allowed OEMs to leverage suppliers’ highly specialized engineering, design, and production skills while focusing their internal resources on their own value-added processes.

We believe that this outsourcing trend has enabled OEMs to reduce their costs and development time, as well as to provide growth opportunities for specialized subsystems suppliers like us.

We have a global footprint with production facilities in California, Minnesota, Oregon, Texas, Singapore, Malaysia, the United Kingdom, Korea, and Mexico.

2 unchanged sentences

For a description of our non-GAAP metrics and reconciliations to the most comparable GAAP metrics, please refer below to the section entitled Non-GAAP Financial Results within this report.

Three Months Ended

2024 March 31,

Three Months Ended Six Months Ended

2024 June 30,

2023 June 28,

2024 June 30,

(dollars in thousands, except per share amounts)

9 unchanged sentences

Macroeconomic Conditions and Business Update

The semiconductor industry is cyclical in nature, and matching customer demand can be challenging based on a variety of factors, including market trends, supply chain shortages and related lead times, customer buying patterns, availability of skilled labor, and macroeconomic and other factors.

During much of 2022, many of these factors impacted our ability to fulfill high customer demand;

however, the industry entered a cyclical downturn in the fourth quarter of 2022, leading to reductions in spending on semiconductor capital equipment, the primary industry in which we operate, resulting in weakened customer demand in 2023.

In particular, industry overcapacity and a number of macroeconomic factors may have contributed to this reduced spending environment, including persistent levels of high inflation, higher interest rates, supply chain disruptions, and other macroeconomic uncertainties.

Additionally, increased export controls for semiconductor-related goods and services shipped to China and delayed business investment in electronic memory capacity had varying levels of unfavorable consequences to our business.

To help mitigate these impacts and to better align our resources and cost structure with current and expected future levels of business, we initiated labor and other cost reduction initiatives starting in the fourth quarter of 2022 and continuing through the first quarter of 2024.

As a result of these programs, we incurred severance charges of $0.9 million and $1.3 million in the first quarter of 2024 and 2023, respectively.

The semiconductor industry is cyclical in nature.

The industry entered a cyclical downturn in the fourth quarter of 2022, leading to reductions in spending on semiconductor capital equipment, resulting in weakened customer demand.

In particular, industry overcapacity and a number of macroeconomic factors may have contributed to this reduced spending environment, which combined with increased export controls for advanced semiconductor-related goods and services shipped to China and delayed business investment in electronic memory capacity had varying levels of unfavorable consequences to our business.

Although the total market for semiconductor capital equipment has experienced year-over-year stability and growth, inventory digestion at our customers and the relative spending levels within our primary served markets, in particular lower spending levels for deposition and etch equipment, has resulted in demand from our customers persisting at lower levels over the past year relative to the total semiconductor capital equipment market.

While challenging macroeconomic conditions have impacted and will continue to impact our business and customers in the near term, we believe demand for semiconductors, semiconductor capital equipment, and our products will return to growth, fueled by the long-term growing need for more semiconductor productive capacity and enhanced process technologies.

Additionally, increased borrowing rates due to tightening monetary policy have increased our debt-service costs, as the interest on our outstanding indebtedness is variable (refer above to Part I – Item 1.

Financial Statements (Unaudited) – Note 8—Long-Term Debt ).

An analysis of the changes in our debt-service cost is provided below under the heading Comparison of the Three Months Ended March 29, 2024 and March 31, 2023 – Interest expense, net.

Results of Operations

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The period‑to‑period comparison of results is not necessarily indicative of results for future periods.

Three Months Ended

2024 March 31,

Three Months Ended Six Months Ended

2024 June 30,

2023 June 28,

2024 June 30,

(in thousands)

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Loss before income taxes (4,170) (8,036) (12,246) (8,576)

Income tax expense (benefit) 913 (535)

Income tax expense 942 12,620 1,855 12,085

Net loss $ (5,112) $ (20,656) $ (14,101) $ (20,661)

The following table sets forth our unaudited results of operations as a percentage of our total sales for the periods presented.

Three Months Ended

2024 March 31,

Three Months Ended Six Months Ended

2024 June 30,

2023 June 28,

2024 June 30,

Net sales 100.0 100.0 100.0 100.0

10 unchanged sentences

Loss before income taxes (2.1) (4.3) (3.0) (2.1)

Income tax expense (benefit) 0.5 (0.2)

Income tax expense 0.5 6.8 0.5 2.9

Net loss (2.5) (11.2) (3.5) (5.0)

Comparison of the Three Months Ended March 29, 2024 and March 31, 2023

Three Months Ended Change

2024 March 31,

Comparison of the Three and Six Months Ended June 28, 2024 and June 30, 2023

Three Months Ended Change Six Months Ended Change

2024 June 30,

2023 Amount % June 28,

2024 June 30,

2023 Amount %

1 unchanged sentence

Net sales $ 203,227 $ 185,008 $ 18,219 9.8 % $ 404,610 $ 410,878 $ (6,268) (1.5) %

The decrease in net sales from the three months ended March 31, 2023 to the three months ended March 29, 2024 was primarily due to reduced customer demand stemming from reduced spending within the semiconductor capital equipment industry.

The increase in net sales from the three months ended June 30, 2023 to the three months ended June 28, 2024 was primarily due to increased customer demand as a result of a stronger semiconductor capital equipment spending environment.

The second quarter of 2023 represented the low-point in our quarterly net sales since the start of the cyclical downturn in the fourth quarter of 2022.

Although net sales were higher on a quarter-on-quarter basis, higher net sales in the first quarter of 2023 compared to the first quarter of 2024 translated into lower net sales for the first half of 2024 compared to the first half of 2023.

Further detail is provided above under the section entitled Macroeconomic Conditions and Business Update .

Cost of sales, Gross profit, and Gross margin

Three Months Ended Change

2024 March 31,

Three Months Ended Change Six Months Ended Change

2024 June 30,

2023 Amount % June 28,

2024 June 30,

2023 Amount %

2 unchanged sentences

Gross profit $ 25,557 $ 25,742 $ (185) (0.7) % $ 48,551 $ 58,982 $ (10,431) (17.7) %

Gross margin 11.4 % 14.7 % -330 bps

The decrease in the gross amounts of cost of sales and gross profit from the three months ended March 31, 2023 to the three months ended March 29, 2024 was primarily due to the factors mentioned in the commentary above under the heading, “ Net sales .”

The decrease in gross margin from the three months ended March 31, 2023 to the three months ended March 29, 2024 was primarily due to reduced factory utilization as a result of lower volume due to reduced customer demand and unfavorable product mix.

Additionally, increased excess and obsolete inventory expense unfavorably impacted gross margin by 110bps for the three months ended March 29, 2024.

Gross margin 12.6 % 13.9 % -130 bps 12.0 % 14.4 % -240 bps

The decrease in gross margin from the three and six months ended June 30, 2023 to the three and six months ended June 28, 2024 was primarily due to unfavorable sales mix, as well as increased fixed overhead and excess and obsolete inventory expenses.

Increased fixed overhead, including depreciation and occupancy costs, unfavorably impacted gross margin by 50bps for the three and six months ended June 28, 2024, and increased excess and obsolete inventory expense unfavorably impacted gross margin by 40bps and 80bps for the three and six months ended June 28, 2024, respectively.

Research and development

Three Months Ended Change

2024 March 31,

Three Months Ended Change Six Months Ended Change

2024 June 30,

2023 Amount % June 28,

2024 June 30,

2023 Amount %

1 unchanged sentence

Research and development $ 5,926 $ 5,188 $ 738 14.2 % $ 11,296 $ 9,501 $ 1,795 18.9 %

The increase in research and development expenses from the three months ended March 31, 2023 to the three months ended March 29, 2024 was primarily due to increased employee-related expenses, inclusive of share-based compensation expense, of $0.5 million and professional fees and materials of $0.5 million from program costs related to the development of our new products.

The increase in research and development expenses from the second quarter of 2023 to the second quarter of 2024 was primarily due to increased material and service costs from our new product development programs.

The increase from the six months ended June 30, 2023 to the six months ended June 28, 2024 was primarily due to increased material and service costs from our new product development programs of $1.3 million and increased employee-related expenses of $0.5 million, inclusive of share-based compensation expense.

Selling, general, and administrative

Three Months Ended Change

2024 March 31,

Three Months Ended Change Six Months Ended Change

2024 June 30,

2023 Amount % June 28,

2024 June 30,

2023 Amount %

1 unchanged sentence

Selling, general, and administrative $ 19,807 $ 19,500 $ 307 1.6 % $ 39,026 $ 39,667 $ (641) (1.6) %

The decrease in selling, general, and administrative expense from the three months ended March 31, 2023 to the three months ended March 29, 2024 was primarily due to reduced employee-related expenses, inclusive of share-based compensation expense, of $1.4 million, software costs of $0.7 million, and reduced occupancy-related costs of $0.3 million, partially offset by increased professional and consulting fees of $1.5 million.

The increase in selling, general, and administrative expense from the second quarter of 2023 to the second quarter of 2024 was primarily due to increased occupancy costs, the majority of which were the result of a facility exit and consolidation, partially offset by reduced services and professional consulting costs.

The decrease in selling, general, and administrative expense from the six months ended June 30, 2023 to the six months ended June 28, 2024 was primarily due to reduced employee-related expense, inclusive of share-based compensation expense, partially offset by increased services and professional consulting costs and increased occupancy costs, the majority of which were the result of a facility exit and consolidation.

Amortization of intangible assets

Three Months Ended Change

2024 March 31,

Three Months Ended Change Six Months Ended Change

2024 June 30,

2023 Amount % June 28,

2024 June 30,

2023 Amount %

1 unchanged sentence

Amortization of intangible assets $ 2,086 $ 3,960 $ (1,874) (47.3) % $ 4,232 $ 7,926 $ (3,694) (46.6) %

The decrease in amortization expense from the three months ended March 31, 2023 to the three months ended March 29, 2024 was due to certain intangible assets becoming fully amortized in 2023.

The decrease in amortization expense from the three and six months ended June 30, 2023 to the three and six months ended June 28, 2024 was due to certain intangible assets becoming fully amortized in the second half of 2023.

Interest expense, net

Three Months Ended Change

2024 March 31,

Three Months Ended Change Six Months Ended Change

2024 June 30,

2023 Amount % June 28,

2024 June 30,

2023 Amount %

2 unchanged sentences

Weighted average borrowings outstanding $ 133,104 $ 300,549 $ (167,445) (55.7) % $ 188,520 $ 301,514 $ (112,994) (37.5) %

Weighted average borrowing rate 7.61 % 6.10 % +151 bps

The decrease in interest expense, net from the three months ended March 31, 2023 to the three months ended March 29, 2024 was primarily due to a decrease in the weighted average amount borrowed during the first quarter, partially offset by an increase in our weighted average borrowing rate, which was primarily due to increased risk-free, short-term borrowing rates as a result of tightening monetary policy, which impacts the Bloomberg Short Term Bank Yield ("BSBY"), the variable component of our borrowing rate under our credit facilities.

Weighted average borrowing rate 7.45 % 6.63 % +82 bps 7.53 % 6.36 % +117 bps

The decrease in interest expense, net from the three and six months ended June 30, 2023 to the three and six months ended June 28, 2024 was primarily due to decreases in the weighted average amounts borrowed, partially offset by an increase in our weighted average borrowing rate.

Other expense, net

Three Months Ended Change

2024 March 31,

Three Months Ended Change Six Months Ended Change

2024 June 30,

2023 Amount % June 28,

2024 June 30,

2023 Amount %

1 unchanged sentence

Other expense, net $ 50 $ 100 $ (50) (50.0) % $ 289 $ 884 $ (595) (67.3) %

The change in other expense, net from the three months ended March 31, 2023 to the three months ended March 29, 2024 was primarily due to currency exchange rate fluctuations during the quarter related to our local currency payables of our foreign operations.

Income tax expense (benefit)

Three Months Ended Change

2024 March 31,

The change in other expense, net from the three and six months ended June 30, 2023 to the three and six months ended June 28, 2024 was primarily due to currency exchange rate fluctuations during the periods related to our local currency payables of our foreign operations.

Income tax expense

Three Months Ended Change Six Months Ended Change

2024 June 30,

2023 Amount % June 28,

2024 June 30,

2023 Amount %

(dollars in thousands)

Income tax expense (benefit) $ 913 $ (535) $ 1,448

Loss before income taxes $ (8,076) $ (540) $ (7,536)

Effective income tax rate -11.3 % 99.1 %

The increase in income tax expense from the three months ended March 31, 2023 to the three months ended March 29, 2024 was primarily due to increased taxable income in foreign jurisdictions in 2024.

Additionally, in the first quarter of 2024, we are unable to benefit from U.S.

pre-tax losses due to a valuation allowance we recorded against our U.S.

state and federal deferred tax assets in the second quarter of 2023.

Income tax expense $ 942 $ 12,620 $ (11,678) n/m $ 1,855 $ 12,085 $ (10,230) n/m

Loss before income taxes $ (4,170) $ (8,036) $ 3,866 n/m $ (12,246) $ (8,576) $ (3,670) n/m

Effective income tax rate -22.6 % -157.0 % +13,440 bps -15.1 % -140.9 % +12,580 bps

The decrease in income tax expense from the three and six months ended June 30, 2023 to the three and six months ended June 28, 2024 was primarily due to recording a valuation allowance against our U.S.

federal and state deferred tax assets, resulting in an $11.1 million charge to income tax expense during the second quarter of 2023.

Because we have a valuation allowance recorded against our U.S.

state and federal deferred income taxes, we did not record tax benefits from our U.S.

taxable losses in the six months ended June 28, 2024.

Non‑GAAP Financial Results

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gross profit, operating income (loss), or net income (loss), respectively, excluding (1) amortization of intangible assets, share-based compensation expense, and discrete or infrequent charges and gains that are outside of normal business operations, including transaction-related costs, contract and legal settlement gains and losses, facility shutdown costs, and severance costs associated with reduction-in-force programs, to the extent they are present in gross profit, operating income (loss), and net income (loss), respectively;

and (2) the tax impacts associated with these non-GAAP adjustments, as well as non-recurring discrete tax items, including deferred tax asset valuation allowance charges.

and (2) with respect to non-GAAP net income (loss), the tax impacts associated with these non-GAAP adjustments, as well as non-recurring discrete tax items, including deferred tax asset valuation allowance charges.

All non-GAAP adjustments are presented on a gross basis;

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In addition, in evaluating non-GAAP results, you should be aware that in the future we will incur expenses such as those that are the subject of adjustments in deriving non-GAAP results and you should not infer from our presentation of non-GAAP results that our future results will not be affected by these expenses or other discrete or infrequent charges and gains that are outside of normal business operations.

The following table presents our unaudited non‑GAAP gross profit and non-GAAP gross margin and a reconciliation from gross profit, the most comparable GAAP measure, for the periods indicated:

Three Months Ended

2024 March 31,

The following table presents our unaudited non‑GAAP gross profit and non-GAAP gross margin and a reconciliation from GAAP gross profit, the most comparable GAAP measure, for the periods indicated:

Three Months Ended Six Months Ended

2024 June 30,

2023 June 28,

2024 June 30,

(dollars in thousands)

6 unchanged sentences

Non-GAAP gross margin 13.0 % 14.5 % 12.6 % 15.0 %

(1) Included in this amount are severance costs associated with our global reduction-in-force programs.

The following table presents our unaudited non‑GAAP operating income and non-GAAP operating margin and a reconciliation from operating income (loss), the most comparable GAAP measure, for the periods indicated:

Three Months Ended

2024 March 31,

(1) Represents severance costs associated with our global reduction-in-force programs.

The following table presents our unaudited non‑GAAP operating income and non-GAAP operating margin and a reconciliation from GAAP operating income (loss), the most comparable GAAP measure, for the periods indicated:

Three Months Ended Six Months Ended

2024 June 30,

2023 June 28,

2024 June 30,

(dollars in thousands, except per share amounts)

8 unchanged sentences

Non-GAAP operating margin 2.2 % 2.9 % 1.7 % 4.6 %

(1) Included in this amount are transaction-related costs incurred in connection with our acquisitions pipeline.

(2) Included in this amount are severance costs associated with our global reduction-in-force programs.

The following table presents our unaudited non‑GAAP net income (loss) and non-GAAP diluted EPS and a reconciliation from net income (loss), the most comparable GAAP measure, for the periods indicated.

(1) Represents transaction-related costs incurred in connection with our acquisitions pipeline.

(2) Represents severance costs associated with our global reduction-in-force programs, and, for the three and six months ended June 28, 2024, $0.5 million of costs incurred in connection with exiting and consolidating one of our U.S.-based manufacturing facilities.

The following table presents our unaudited non‑GAAP net income (loss) and non-GAAP diluted EPS and a reconciliation from GAAP net loss, the most comparable GAAP measure, for the periods indicated.

All non-GAAP adjustments are presented on a gross basis;

the related income tax effects, including current and deferred income tax expense, are included in the adjustment line under the heading "Tax adjustments related to non-GAAP adjustments".

Three Months Ended

2024 March 31,

Three Months Ended Six Months Ended

2024 June 30,

2023 June 28,

2024 June 30,

(dollars in thousands, except per share amounts)

6 unchanged sentences

Tax adjustments related to non-GAAP adjustments (3) 174 2,032 278 4,238

Tax expense from valuation allowance (4) — 11,094 — 11,094

Non-GAAP net income (loss) $ 1,819 $ 707 $ (893) $ 11,835

2 unchanged sentences

Shares used to compute non-GAAP diluted EPS 34,043,870 29,492,966 31,779,521 29,454,500

(1) Included in this amount are transaction-related costs incurred in connection with our acquisitions pipeline.

(2) Included in this amount are severance costs associated with our global reduction-in-force programs.

(1) Represents transaction-related costs incurred in connection with our acquisitions pipeline.

(3) Adjusts GAAP income tax expense for the impact of our non-GAAP adjustments, which are presented on a gross basis.

6 unchanged sentences

federal and state deferred tax assets.

(4) During the second quarter of 2023, we recorded a valuation allowance of $11.1 million against our U.S.

federal and state deferred tax assets.

The valuation allowance was recorded based on an assessment of available positive and negative evidence, including an estimate of being in a three-year cumulative loss position in the U.S.

by the end of 2023, projections of future taxable income, and other quantitative and qualitative information.

Liquidity and Capital Resources

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We have no significant long-term purchase commitments related to procuring raw materials inventory.

Our ability to fund these requirements will depend, in part, on our future cash flows, which are determined by our future operating performance, and our continued access to the capital markets and are therefore subject to prevailing global macroeconomic conditions and financial, business, and other factors, some of which are beyond our control.

Our ability to fund these material cash requirements will depend, in part, on our future cash flows, which are determined by our future operating performance, and our continued access to the capital markets and are therefore subject to prevailing global macroeconomic conditions and financial, business, and other factors, some of which are beyond our control.

We believe that our cash and cash equivalents, the amounts available under our credit facilities, and our operating cash flow will be sufficient to fund our business and our current obligations for at least the next 12 months and beyond.

2 unchanged sentences

(i) sales to our customers and the related changes in our net operating assets and liabilities and (ii) proceeds from our credit facilities and equity offerings, when applicable.

Our credit facilities are comprised of a $150.0 million term loan facility and a $250.0 million revolving credit facility, of which $250.0 million remained available to draw on as of March 29, 2024.

Our credit facilities are comprised of a $150.0 million term loan facility and a $250.0 million revolving credit facility, of which $250.0 million remained available to draw on as of June 28, 2024.

Summary of Cash Flows

We ended the first quarter of 2024 with cash and cash equivalents of $102.1 million, an increase of $22.2 million from the prior year ended December 29, 2023.

We ended the second quarter of 2024 with cash and cash equivalents of $114.3 million, an increase of $34.4 million from the prior year ended December 29, 2023.

The increase was primarily due to net proceeds of $136.7 million from our issuance of 3.8 million ordinary shares in March 2024 in connection with an underwritten public offering and net cash provided by operating activities of $22.3 million, partially offset by net payments on credit facilities of $118.8 million and capital expenditures of $7.3 million.

The following table sets forth a summary of operating, investing, and financing activities for the periods presented:

Three Months Ended

2024 March 31,

Six Months Ended

2024 June 30,

(in thousands)

Cash provided by (used in) operating activities $ 4,804 $ (10,873)

Cash provided by operating activities $ 22,296 $ 16,070

Cash used in investing activities (7,337) (10,834)

Cash provided by financing activities 21,855 59

Cash provided by (used in) financing activities 19,435 (7,098)

Net increase (decrease) in cash $ 34,394 $ (1,862)

Our cash provided by operating activities of $4.8 million during the three months ended March 29, 2024 consisted of net loss of $9.0 million, offset by net non-cash charges of $10.2 million, consisting primarily of depreciation and amortization of $7.6 million and share-based compensation expense of $2.4 million, and a decrease in our net operating assets and liabilities of $3.6 million.

The decrease in our net operating assets and liabilities of $3.6 million during the three months ended March 29, 2024 was primarily due to a decrease in inventories of $5.2 million, an increase in accounts payable of $3.4 million, and a decrease in prepaid expenses and other assets of $1.7 million, partially offset by an increase in accounts receivable of $6.7 million.

Cash used in operating activities was $10.9 million during the three months ended March 31, 2023.

The increase in cash provided by operating activities from the three months ended March 31, 2023 to the three months ended March 29, 2024 was primarily due to favorable changes in the balances of accounts payable and accrued and other liabilities during the three months ended March 29, 2024 compared to the three months ended March 31, 2023, partially offset by less aggregate net income (loss) and unfavorable change in the balances of accounts receivable and inventories during the three months ended March 29, 2024 compared to the three months ended March 31, 2023.

Cash used in investing activities during the three months ended March 29, 2024 and March 31, 2023 consisted of capital expenditures.

The reduction in capital expenditures from the three months ended March 31, 2023 to the three months ended March 29, 2024 was due to reduced factory capacity expansion projects.

Capital expenditures for the three months ended March 29, 2024 were $4.5 million and were used primarily for equipment and information technology upgrades.

Cash provided by financing activities during the three months ended March 29, 2024 consisted of net proceeds of $136.7 million from our issuance of 3.8 million ordinary shares in March 2024 in connection with an underwritten public offering and net proceeds from share-based compensation activity of $2.0 million, partially offset by net payment on our credit facilities of $116.9 million.

Cash provided by financing activities during the three months ended March 31, 2023 consisted of net proceeds from share-based compensation activity of $1.9 million, partially offset by term loan payments of $1.9 million.

The change in net payments on our credit facilities relates to the payoff of our revolving credit facility in the first quarter of 2024.

Our cash provided by operating activities of $22.3 million for the six months ended June 28, 2024 consisted of net non-cash charges of $22.3 million, consisting primarily of depreciation and amortization of $15.7 million and share-based compensation expense of $6.3 million, and a decrease in our net operating assets and liabilities of $14.1 million, partially offset by net loss of $14.1 million.

The decrease in our net operating assets and liabilities of $14.1 million during the six months ended June 28, 2024 was primarily due to a decrease in inventories of $14.4 million, partially offset by a decrease in accrued and other liabilities of $3.5 million.

The increase in cash provided by operating activities from the six months ended June 30, 2023 to the six months ended June 28, 2024 was primarily due to favorable changes in the balances of our working capital accounts of $12.7 million, partially offset by a reduction in net income net of non-cash charges of $6.5 million.

Cash used in investing activities during the six months ended June 28, 2024 and June 30, 2023 consisted of capital expenditures.

The reduction in capital expenditures from the six months ended June 30, 2023 to the six months ended June 28, 2024 was due to reduced factory capacity expansion projects.

Cash provided by financing activities during the six months ended June 28, 2024 consisted of net proceeds of $136.7 million from our issuance of 3.8 million ordinary shares in March 2024 in connection with an underwritten public offering and net proceeds from share-based compensation activity of $1.4 million, partially offset by net payment on our credit facilities of $118.8 million.

Cash used in financing activities during the six months ended June 30, 2023 consisted of net payments on our credit facilities of $8.8 million, partially offset by net proceeds from share-based compensation activity of $1.7 million.

Critical Accounting Estimates

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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