What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-11-30 compared with 2022-08-23 · 78 added, 65 removed, 134 unchanged (52% of the section changed)

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La-Z-Boy Incorporated and its subsidiaries (individually and collectively, "we," "our," "us," "La-Z-Boy" or the "Company") make "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Generally, forward-looking statements include information concerning expectations, projections or trends relating to our results of operations, financial results, financial condition, strategic initiatives and plans, expenses, dividends, share repurchases, liquidity, use of cash and cash requirements, borrowing capacity, investments, future economic performance, business and industry and the effect of the novel coronavirus ("COVID-19") pandemic on our business operations and financial results.

Generally, forward-looking statements include information concerning expectations, projections or trends relating to our results of operations, financial results, financial condition, strategic initiatives and plans, expenses, dividends, share repurchases, liquidity, use of cash and cash requirements, borrowing capacity, investments, future economic performance, business and industry and the effect of the coronavirus ("COVID") pandemic on our business operations and financial results.

Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts.

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You should not place undue reliance on forward-looking statements, which speak to our views only as of the date of this report.

These forward-looking statements are all based on currently available operating, financial, and competitive information and are subject to various risks and uncertainties, many of which are unforeseeable and beyond our control, such as the continuing and developing impact of, and uncertainty caused by, the COVID-19 pandemic.

Additional risks and uncertainties that we do not presently know about or that we currently consider to be immaterial may also affect our business operations and financial performance.

Our actual future results and trends may differ materially from those we anticipate depending on a variety of factors, including, but not limited to, the risks and uncertainties discussed in our Annual Report for the year ended April 30, 2022, under Item 1A, "Risk Factors" and Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations." Given these risks and uncertainties, you should not rely on forward-looking statements as a prediction of actual results.

Any or all of the forward-looking statements contained in our Annual Report or any other public statement made by us, including by our management, may turn out to be incorrect.

Our actual future results and trends may differ materially from those we anticipate depending on a variety of factors, including, but not limited to, the risks and uncertainties discussed in our Annual Report for the fiscal year ended April 30, 2022, under Item 1A, "Risk Factors" and Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations." Given these risks and uncertainties, you should not rely on forward-looking statements as a prediction of actual results.

Any or all of the forward-looking statements contained in our Annual Report for the fiscal year ended April 30, 2022 or any other public statement made by us, including by our management, may turn out to be incorrect.

We are including this cautionary note to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for forward-looking statements.

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In addition, we import, distribute and retail accessories and casegoods (wood) furniture products under the Kincaid ® , American Drew ® , Hammary ® , and Joybird ® tradenames.

As of July 30, 2022, our supply chain operations included the following:

• Five major manufacturing locations and nine regional distribution centers in the United States and five facilities in Mexico to support our speed-to-market and customization strategy

As of October 29, 2022, our supply chain operations included the following:

• Five major manufacturing locations and ten regional distribution centers in the United States and five facilities in Mexico to support our speed-to-market and customization strategy

• A logistics company that distributes a portion of our products in the United States

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Results of Operations

Fiscal 2023 First Quarter Compared with Fiscal 2022 First Quarter

Fiscal 2023 Second Quarter Compared with Fiscal 2022 Second Quarter

La-Z-Boy Incorporated

Quarter Ended

(Unaudited, amounts in thousands, except percentages) 7/30/2022 7/24/2021 % Change

Quarter Ended Six Months Ended

(Unaudited, amounts in thousands, except percentages) 10/29/2022 10/23/2021 % Change 10/29/2022 10/23/2021 % Change

Sales $ 611,332 $ 575,889 6.2% $ 1,215,423 $ 1,100,672 10.4 %

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Operating margin 10.1% 9.4% 9.4% 8.0%

Consolidated sales increased $79.3 million, or 15.1%, in the first quarter of fiscal 2023 compared with the same period a year ago.

After retail and manufacturing locations reopened after COVID-related shutdowns at the beginning of fiscal 2021, we experienced a strong pace of written order trends while facing challenges in the global supply chain.

In response to heightened demand, we expanded our manufacturing capacity, increased our strategic raw material reserves, and took pricing and surcharge actions to counteract rising materials and freight costs.

The impact of these strategic actions over the last two years and our ability to work through our significant backlog led to a strong sales increase in the first quarter of fiscal 2023 compared with the same period a year ago.

Consolidated sales increased $35.4 million, or 6%, and $114.8 million, or 10% in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago.

The increase in sales for both periods reflects the realization of pricing and surcharge actions taken to counteract rising material and freight costs over the past year.

The benefit from these pricing actions, along with a favorable shift in product and channel mix, offset a decline in delivered unit volume.

Operating Margin

Operating margin, which is calculated as operating income as a percentage of sales, increased 220 basis points in the first quarter of fiscal 2023 compared with the same period a year ago.

• Gross margin, which is calculated as gross profit as a percentage of sales, increased 150 basis points in the first quarter of fiscal 2023, compared with the same period a year ago.

◦ Changes in our consolidated mix improved gross margin by 160 basis points, driven by growth of our Retail segment, which has a higher gross margin than our Wholesale segment.

◦ Gross margin was adversely impacted by higher raw material and freight costs caused by global supply chain and availability challenges, along with higher plant production costs resulting from the expansion of our manufacturing capacity and a challenging labor environment.

◦ Partially offsetting the item above, gross margin benefited from increased pricing and surcharges

• Selling, general and administrative ("SG&A") expenses as a percentage of sales decreased 70 basis points in the first quarter of fiscal 2023 compared with the same period a year ago, as higher delivered sales volume relative to fixed costs more than offset increased investments in marketing to drive written sales.

Operating margin, which is calculated as operating income as a percentage of sales, increased 70 basis points and 140 basis points in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago.

• Gross margin, which is calculated as gross profit as a percentage of sales, increased 390 basis points and 270 basis points in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago.

◦ Changes in our consolidated mix improved gross margin by 270 basis points and 220 basis points in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago, driven by growth of our Retail segment, which has a higher gross margin than our Wholesale segment.

◦ Compared with the same periods a year ago, gross margin in the second quarter and first six months of fiscal 2023 benefited from pricing and surcharge actions taken in prior periods.

◦ Higher raw material costs driven by global supply chain challenges and higher plant-related costs due to inefficiencies resulting from lower unit volume negatively impacted gross margin in the second quarter and first six months of fiscal 2023, compared with the same periods a year ago.

• Selling, general and administrative ("SG&A") expenses as a percentage of sales increased 320 basis points and 130 basis points in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago.

◦ Changes in our consolidated mix increased SG&A expense as a percentage of sales by 200 basis points and 160 basis points in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago, driven by growth of our Retail segment, which has a higher SG&A expense as a percentage of sales than our Wholesale segment.

◦ SG&A expense as a percentage of sales was further impacted during the second quarter of fiscal 2023 by increased investments in marketing to pre-pandemic levels, as a percentage of sales, to drive written sales.

We discuss each segment’s results in the following section.

Wholesale Segment

Quarter Ended

(Unaudited, amounts in thousands, except percentages) 7/30/2022 7/24/2021 % Change

Quarter Ended Six Months Ended

(Unaudited, amounts in thousands, except percentages) 10/29/2022 10/23/2021 % Change 10/29/2022 10/23/2021 % Change

Sales $ 446,231 $ 439,092 1.6% $ 888,049 $ 832,591 6.7 %

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Operating margin 8.6% 9.8% 7.3% 7.4%

The Wholesale segment’s sales increased $48.3 million, or 12% in the first quarter of fiscal 2023 compared with the same period a year ago.

The Wholesale segment’s sales increased $7.1 million, or 2% and $55.5 million, or 7% in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago.

The increase in sales was primarily driven by the realization of pricing and surcharge actions taken in response to rising manufacturing costs combined with favorable channel and product mix.

This was partially offset by a decline in delivered volume primarily the result of external dealers delaying receipt of finished goods due to warehouse constraints.

This was partially offset by a decline in delivered volume, primarily the result of dealers delaying receipt of finished goods due to warehouse constraints.

Operating Margin

The Wholesale segment's operating margin increased 120 basis points in the first quarter of fiscal 2023 compared with the same period a year ago.

• Gross margin increased 120 basis points in the first quarter of fiscal 2023 compared with the same period a year ago.

◦ Gross margin increased 610 basis points from pricing and surcharge actions taken in response to rising raw materials and freight costs resulting from global supply challenges, the impact of which caused a 340 basis point decrease in gross margin.

◦ Favorable channel and product mix resulted in an 80 basis point improvement to gross margin

◦ Higher production costs related to manufacturing capacity expansion and sustained competition in the labor market drove a 180 basis point decrease in gross margin.

◦ The first quarter of fiscal 2023 included expenses related to our plans to finalize the closure of our Newton, Mississippi manufacturing facility which had been temporarily reactivated during the second quarter of fiscal 2021 in response to stronger-than-expected demand at that time.

This action resulted in a 20 basis point decrease in gross margin in the first quarter of fiscal 2023.

• SG&A expense as a percentage of sales was flat in the first quarter of fiscal 2023 compared with the same period a year ago as increased marketing spend was offset by fixed cost leverage from higher delivered sales.

The Wholesale segment's operating margin decreased 120 basis points and 10 basis points in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago.

• Gross margin increased 190 basis points and 150 basis points in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago.

◦ Gross margin increased 400 basis points and 530 basis points in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago, from pricing and surcharge actions taken in response to rising raw material costs resulting from global supply challenges.

◦ The impact of rising raw material costs noted above led to a 120 basis point and 220 basis point decrease in gross margin, in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago.

◦ Higher costs related to plant inefficiencies due to lower unit volumes drove a 110 basis point and 160 basis point decrease in gross margin in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago.

• SG&A expense as a percentage of sales increased 310 basis points and 160 basis points in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago primarily due to increased marketing expense to pre-pandemic levels, as a percentage of sales.

Additionally, the second quarter and first six months of fiscal 2022 included a gain resulting from the sale of our Newton, Mississippi manufacturing facility, resulting in a comparative 70 basis point and 40 basis point increase in SG&A as a percentage of sales in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago.

Retail Segment

Quarter Ended

(Unaudited, amounts in thousands, except percentages) 7/30/2022 7/24/2021 % Change

Quarter Ended Six Months Ended

(Unaudited, amounts in thousands, except percentages) 10/29/2022 10/23/2021 % Change 10/29/2022 10/23/2021 % Change

Sales $ 252,152 $ 192,420 31.0% $ 488,173 $ 374,267 30.4 %

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Operating margin 16.5% 12.5% 16.3% 11.9%

The Retail segment’s sales increased $54.2 million, or 30%, in the first quarter of fiscal 2023 compared with the same period a year ago, led by a 25% increase in delivered same-store sales.

Additionally, the Retail segment benefited from a $12.2 million increase in sales related to our retail store acquisitions that occurred in fiscal 2022 and fiscal 2023.

Written same-store sales decreased 15% in the first quarter of fiscal 2023 compared with the same period a year ago, primarily the result of a return to expected industry-wide seasonal trends and softening demand driven by economic uncertainty and consumer sentiment.

The Retail segment’s sales increased $59.7 million, or 31%, and $113.9 million, or 30% in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago, led by a 25% increase in delivered same-store sales for each respective period.

Additionally, the Retail segment benefited from a $17.1 million and a $29.4 million increase in the second quarter and first six months of fiscal 2023, respectively, from sales related to our retail store acquisitions that occurred in fiscal 2022 and fiscal 2023.

Written same-store sales decreased 10% and 13% in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago, reflecting softer demand across the industry driven by economic uncertainty and weaker consumer sentiment.

However, compared to the pre-pandemic second quarter of fiscal 2020, written same-store sales have increased at a compound annual growth rate of 4%.

Same-store delivered sales include the sales of all currently active stores which have been open and company-owned for each comparable period.

Operating Margin

The Retail segment's operating margin increased 500 basis points in the first quarter of fiscal 2023 compared with the same period a year ago.

• Gross margin decreased 80 basis points in the first quarter of fiscal 2023 compared with the same period a year ago primarily due to the timing difference between higher product costs resulting from the pricing and surcharge actions taken by our manufacturing business and pricing actions taken by the Retail business which are realized upon delivery.

• SG&A expense as a percentage of sales decreased 580 basis points in the first quarter of fiscal 2023 compared with the same period a year ago, primarily due to higher delivered sales relative to selling expenses and fixed costs, mainly occupancy expenses.

The Retail segment's operating margin increased 400 basis points and 440 basis points in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago.

• Gross margin increased 80 basis points and was flat in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago.

The increase in the second quarter of fiscal 2023 was primarily due to pricing actions taken by the Retail business to offset increases in product costs.

• SG&A expense as a percentage of sales decreased 320 basis points and 440 basis points in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago, primarily due to higher delivered sales relative to selling expenses and fixed costs, mainly occupancy expenses.

Corporate and Other

Quarter Ended

(Unaudited, amounts in thousands, except percentages) 7/30/2022 7/24/2021 % Change

Quarter Ended Six Months Ended

(Unaudited, amounts in thousands, except percentages) 10/29/2022 10/23/2021 % Change 10/29/2022 10/23/2021 % Change

Sales $ 43,637 $ 45,013 (3.1)% $ 92,367 $ 88,647 4.2 %

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Operating loss (18,093) (12,977) (39.4)% (29,744) (17,375) (71.2) %

Corporate and Other sales increased $5.1 million in the first quarter of fiscal 2023, compared with the same period a year ago, primarily led by Joybird sales which increased 10% to $42.7 million.

The growth in Joybird sales was driven by the realization of pricing actions, higher volume resulting from investments in marketing and website enhancements leading to higher online conversion, and the addition of retail store locations.

Written sales for Joybird were up 12% in the first quarter of fiscal 2023 compared with the same period a year ago, driven by continued investments in marketing.

Intercompany eliminations increased in the first quarter 2023 compared with the same period a year ago due to higher sales from our Wholesale segment to our Retail segment.

Corporate and Other sales decreased $1.4 million in the second quarter of fiscal 2023 and increased $3.7 million in the first six months of fiscal 2023 compared with the same periods a year ago.

The change in sales was primarily led by Joybird sales which decreased 5% to $38.2 million, in the second quarter of fiscal 2023 and increased 2% to $80.8 million in the first six months of fiscal 2023.

While Joybird sales benefited from pricing actions and increased online conversion, overall volume declined primarily due to slowing online traffic and demand challenges consistent with those recently experienced across the e-commerce home furnishings industry, along with changes in campaign execution with a key marketing partner which have since been reversed.

Written sales for Joybird were down 27% and 9% in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago, reflecting both the items noted above.

Intercompany eliminations increased in the second quarter and first six months of fiscal 2023 compared with the same periods a year ago due to higher sales from our Wholesale segment to our Retail segment.

Operating Loss

Our Corporate and Other operating loss increased $7.3 million in the first quarter of fiscal 2023, compared with the same period a year ago primarily due Joybird's operating loss resulting from an increase in freight costs, higher plant costs associated with the opening of a second manufacturing facility, and increased investments in marketing to drive customer acquisition and awareness.

Our effective tax rate was 26.5% for the first quarter of fiscal 2023, compared with 25.9% for the first quarter of fiscal 2022.

Our Corporate and Other operating loss increased $5.1 million and $12.4 million in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago.

• The increase in operating loss was primarily due to Joybird's operating loss resulting from lower sales volume, an unfavorable shift in product mix, higher input costs and increased investments in marketing to drive customer acquisition and awareness.

• Partially offsetting the above, changes in the fair value of the Joybird contingent consideration liability relative to changes made during fiscal 2022, resulted in a comparative $1.3 million decrease in operating loss during the second quarter and first six months of fiscal 2023.

Non-Operating Income (Expense)

Interest Income

Interest income was $1.0 million and $1.4 million higher in the second quarter and first six months of fiscal 2023, respectively, compared with the same periods a year ago, primarily driven by higher interest rates.

Other Income (Expense), Net

Other income (expense), net was de minimis in both the second quarter and first six months of fiscal 2023.

Other income (expense), net was $1.0 million and $0.9 million of income in the second quarter and first six months of fiscal 2022, respectively, primarily due to unrealized gains on investments.

Our effective tax rate was 25.8% and 26.2% for the second quarter and six months ended October 29, 2022, respectively, compared with 26.6% and 26.3% for the second quarter and six months ended October 23, 2021, respectively.

Our effective tax rate varies from the 21% federal statutory rate primarily due to state taxes.

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We believe these sources remain adequate to meet our short-term and long-term liquidity requirements, finance our long-term growth plans, and fulfill other cash requirements for day-to-day operations and capital expenditures.

We had cash, cash equivalents and restricted cash of $241.4 million at July 30, 2022, compared with $248.9 million at April 30, 2022.

In addition, we had investments to enhance our returns on cash of $24.9 million at July 30, 2022, compared with $27.2 million at April 30, 2022.

We had cash, cash equivalents and restricted cash of $207.9 million at October 29, 2022, compared with $248.9 million at April 30, 2022.

In addition, we had investments to enhance our returns on cash of $19.0 million at October 29, 2022, compared with $27.2 million at April 30, 2022.

The following table illustrates the main components of our cash flows:

Quarter Ended

Six Months Ended

(Unaudited, amounts in thousands) 10/29/2022 10/23/2021

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Operating Activities

During the first quarter of fiscal 2023, net cash provided by operating activities was $33.1 million.

Our cash provided by operating activities was primarily attributable to net income, adjusted for non-cash items, and a $25.1 million decrease in receivables.

This was partially offset by a $37.2 million decrease in other liabilities primarily due to a $24.2 million decline in customer deposits as delivered sales outpaced written sales in our Retail segment and the payout of our fiscal 2022 incentive compensation awards during the first quarter of fiscal 2023.

During the first six months of fiscal 2023, net cash provided by operating activities was $31.0 million.

Our cash provided by operating activities was primarily attributable to net income, adjusted for non-cash items.

This was partially offset by a $52.4 million decrease in customer deposits, as we work down our backlog to pre-pandemic levels, and a $36.8 million increase in inventory, primarily due to challenges in supply chain availability from prior periods impacting the timing of receiving inventory and the flow of finished goods to our customers.

Investing Activities

During the first quarter of fiscal 2023, net cash used for investing activities was $25.9 million, primarily due to the following:

• Cash used for capital expenditures in the period was $21.0 million compared with $19.3 million during the first quarter of fiscal 2022, which primarily related to improvements to our retail stores, new store openings, and plant upgrades to our upholstery manufacturing and distribution facilities in Neosho, Missouri.

During the first six months of fiscal 2023, net cash used for investing activities was $44.1 million, primarily due to the following:

• Cash used for capital expenditures in the period was $40.4 million compared with $33.3 million during the first six months of fiscal 2022, which primarily related to improvements to our retail stores, new store openings, and plant upgrades to our upholstery manufacturing and distribution facilities in Neosho, Missouri.

Spending on these items will continue in fiscal 2023 with full year fiscal 2023 capital expenditures expected to be in the range of $75 to $80 million.

We have no material contractual commitments outstanding for future capital expenditures.

• Cash used for acquisitions was $7.2 million, related to the acquisition of the Denver, Colorado retail business.

• Cash used for acquisitions was $11.7 million, related to the acquisition of the Denver, Colorado and Spokane, Washington retail businesses.

• Proceeds from the sale of investments, net of investment purchases, was $7.9 million.

Financing Activities

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The Credit Facility will mature on October 15, 2026 and provides us the ability to extend the maturity date for two additional one-year periods, subject to the satisfaction of customary conditions.

As of July 30, 2022, we have no borrowings outstanding under the Credit Facility.

As of October 29, 2022, we have no borrowings outstanding under the Credit Facility.

The Credit Facility contains certain restrictive loan covenants, including, among others, financial covenants requiring a maximum consolidated net lease adjusted leverage ratio and a minimum consolidated fixed charge coverage ratio, as well as customary covenants limiting our ability to incur indebtedness, grant liens, make acquisitions, merge or consolidate, and dispose of certain assets.

As of July 30, 2022, we were in compliance with our financial covenants under the Credit Facility.

As of October 29, 2022, we were in compliance with our financial covenants under the Credit Facility.

We believe our cash on hand, in addition to our available Credit Facility, will provide adequate liquidity for our business operations over the next 12 months.

During the first quarter of fiscal 2023, net cash used for financing activities was $13.8 million, primarily due to the following:

• Our board of directors has authorized the repurchase of company stock and we spent $5.0 million in the first quarter of fiscal 2022 to repurchase 0.2 million shares.

As of July 30, 2022, 7.3 million shares remained available for repurchase pursuant to this authorization.

During the first six months of fiscal 2023, net cash used for financing activities was $25.9 million, primarily due to the following:

• Our board of directors has authorized the repurchase of company stock and we spent $5.0 million in the first six months of fiscal 2022 to repurchase 0.2 million shares.

As of October 29, 2022, 7.3 million shares remained available for repurchase pursuant to this authorization.

• Cash paid to our shareholders in quarterly dividends was $14.2 million.

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We expect the board to continue declaring regular quarterly cash dividends for the foreseeable future, but it may discontinue doing so at any time.

• Cash paid for holdback payments made on prior-period acquisitions was $5.0 million for the guaranteed payments related to the acquisition of Joybird.

Exchange Rate Changes

Due to changes in exchange rates, our cash, cash equivalents, and restricted cash decreased by $0.8 million from the end of fiscal year 2022 to the end of the first quarter of fiscal 2023.

Due to changes in exchange rates, our cash, cash equivalents, and restricted cash decreased by $1.8 million from the end of fiscal year 2022 to the end of the second quarter of fiscal 2023.

These changes impacted our cash balances held in Canada, Thailand, and the United Kingdom.

During the first quarter of fiscal 2023, there were no material changes to the information about our contractual obligations and commitments shown in the table contained in our Annual Report on Form 10-K for the fiscal year ended April 30, 2022.

During the second quarter of fiscal 2023, there were no material changes to the information about our contractual obligations and commitments shown in the table contained in our Annual Report on Form 10-K for the fiscal year ended April 30, 2022.

We do not expect our continuing compliance with existing federal, state and local statutes dealing with protection of the environment to have a material effect on our capital expenditures, earnings, competitive position or liquidity.

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We disclosed our critical accounting policies in our Annual Report on Form 10-K for the fiscal year ended April 30, 2022.

There were no material changes to our critical accounting policies or estimates during the quarter ended July 30, 2022.

There were no material changes to our critical accounting policies or estimates during the six months ended October 29, 2022.

Recent Accounting Pronouncements

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

During the first quarter of fiscal 2023, there were no material changes from the information contained in Item 7A of our Annual Report on Form 10-K for the fiscal year ended April 30, 2022.

During the first six months of fiscal 2023, there were no material changes from the information contained in Item 7A of our Annual Report on Form 10-K for the fiscal year ended April 30, 2022.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis