Group 1: Market Trends - 2025 is expected to be the year when global investors recognize China's competitive edge over the rest of the world, leading to the disappearance of the China discount[1] - China's manufacturing sector accounts for 30% of global manufacturing value added, with exports of merchandise being double that of the US[5] - China's exports rose by 7% in 2024, with significant increases to Brazil (23%), UAE (19%), and Saudi Arabia (18%)[32] Group 2: Technological Advancements - China has emerged as a leader in various high-value industries, including EVs, telecom equipment, and defense technologies, with a notable launch of the world's first sixth-generation fighter plane in 2025[2][3] - China holds around 70% of patents in the EV sector and nearly half of all patents applied for globally in 2023[13][14] Group 3: Investment Opportunities - The MSCI China Index is trading at a record discount of 10 P/E points compared to the world index, indicating substantial room for growth in Chinese equities[52] - The anticipated financial liberalization in China could enhance corporate profitability and attract more foreign investment, driving a bull market[28] Group 4: Economic Comparisons - China's economic growth rate is more than double that of most developed markets, despite facing cyclical slowdowns[5] - Comparisons are drawn between China's current economic trajectory and Japan's in the early 1980s, suggesting a similar rise in value-added manufacturing and innovation[6][18]

1 Public Information © onsemi 2024 Public Information © onsemi 2024 Quarterly Investor Presentation Fourth Quarter 2024 Safe Harbor Statement and Non-GAAP and Forecast Information This presentation includes "forward-looking statements," as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included or incorporated in this presentation could be deemed forw ...

Revenue Sources - Sales to the automotive industry represented approximately 55% of total revenue, while sales to the industrial sector accounted for about 25% for the year ended December 31, 2024[111]. - Changes in economic conditions affecting the automotive and industrial sectors could materially impact sales and operating results[111]. Operational Risks - The company faces significant risks related to operational disruptions at manufacturing facilities, which could materially affect production and revenue[93]. - The company relies on a limited number of specialized third-party suppliers, and any disruption in these relationships could adversely impact operations and costs[94]. - The assembly and test operations facility in Leshan, China, may face increased costs due to geopolitical tensions, impacting revenue[115]. - The company is exposed to risks from third-party service providers, which could lead to business disruptions and additional costs[136]. Competition and Market Dynamics - The semiconductor industry requires substantial investment in research and development to remain competitive, and the lengthy development cycle may limit the company's ability to adapt to market changes[104]. - The semiconductor industry is characterized by rapid technological changes, and failure to innovate could result in loss of market share and profitability[105]. - The company’s ability to compete effectively is challenged by significant competition and potential consolidation in the semiconductor industry[106]. - The company may face competitive disadvantages if unable to access government funding or incentives for semiconductor development[109]. Financial Condition and Debt - As of December 31, 2024, the company had $3,379.9 million in outstanding principal related to its indebtedness[151]. - The company may face significant cash flow challenges to meet its debt service obligations, which could adversely affect its financial condition and results of operations[156]. - If interest rates increase, the company's debt service obligations under variable rate indebtedness could rise significantly, negatively impacting net income and cash flows[161]. - The company’s ability to repay its debt is dependent on cash flow generation from its subsidiaries, which may not be guaranteed[160]. - An event of default under any agreement related to the company's outstanding indebtedness could trigger cross defaults, putting pressure on liquidity and financial condition[159]. - The company has approximately $804.9 million in 0% Notes, $1,500.0 million in 0.50% Notes, and $700.0 million in 3.875% Notes outstanding as of December 31, 2024[162]. - The company has a $375.0 million balance in its Revolving Credit Facility, which is subject to interest rate exposure[275]. Environmental and Regulatory Compliance - The company aims to achieve net-zero emissions by 2040, which may involve significant expenditures and operational disruptions[99]. - The semiconductor industry faces increasing environmental regulations that could materially affect the company's operations and financial condition[138]. - Regulatory changes, including tariffs and trade policies, could reduce demand for the company's products and adversely affect sales and profitability[114]. - The company is subject to evolving privacy and data protection laws, which could result in substantial monetary fines and damage to its reputation[133]. - The company faces risks related to compliance with anti-corruption laws, which could result in penalties and harm its reputation[141]. - Regulatory developments related to climate change may incur additional compliance costs and impact the company's financial condition and competitive ability[182]. Technology and Innovation - The company may not be able to develop technology solutions for AI-focused customers in a timely manner, potentially resulting in loss of market share[119]. - The company has made substantial investments in information technology systems, which may involve risks such as operational challenges and increased costs[137]. Currency and Financial Market Risks - Currency fluctuations and foreign exchange regulations could materially affect the company's liquidity and financial condition[124]. - The company is exposed to financial market risks, including changes in interest rates and foreign currency exchange rates, and utilizes derivative financial instruments to mitigate these risks[274]. - Substantially all revenue is transacted in U.S. dollars, while significant operating expenditures are in local currencies, affecting financial results due to exchange rate fluctuations[279]. - A hypothetical 10% change in currency exchange rates could impact operating income by approximately $110.6 million for the year ended December 31, 2024[279]. - The notional amount of foreign exchange contracts was $256.8 million as of December 31, 2024, compared to $262.2 million in 2023[278]. Human Resources and Reputation - The ability to attract and retain skilled personnel is critical, and competition for qualified employees is intense in the semiconductor industry[121]. - Warranty and product liability claims could harm the company's reputation and financial condition if products fail to perform as expected[122]. - Legal proceedings may divert management attention and resources, with potential significant costs associated with defending against litigation[181]. Strategic Decisions and Shareholder Value - The company has provisions in its charter that could delay or prevent acquisitions, potentially decreasing the value of its common stock[171]. - The company’s share repurchase program is not guaranteed to enhance long-term shareholder value and may fluctuate based on various factors[173]. - Strategic acquisitions and integrations carry significant risks, including potential unexpected costs and challenges in aligning operations[174]. - The company may need to issue additional shares of common stock if it cannot refinance or borrow, leading to potential dilution for existing shareholders[158]. - The effective tax rate for foreign-derived intangible income (FDII) is set to increase from 13% to 16% starting in 2026, potentially impacting cash flows[144].

Financial Data and Key Metrics Changes - For the full year 2024, the company reported a non-GAAP gross margin of 45.5% against revenue of $7.1 billion, with fourth-quarter revenue of $1.72 billion and a non-GAAP gross margin of 45.3% [10][26][35] - Non-GAAP earnings per share for Q4 was $0.95, down from $1.25 in Q4 2023 [37] - Free cash flow for the full year was nearly $1.2 billion, with Q4 free cash flow increasing 39% sequentially to $422 million [26][31] Business Line Data and Key Metrics Changes - Automotive revenue increased 8% sequentially to $1.03 billion, driven by growth in China [10][32] - Industrial revenue decreased 5% sequentially to $417 million, with weakness in traditional segments [15][32] - Revenue for the Power Solutions Group was $809 million, down 2% quarter over quarter, while the Analog and Mixed Signal Group revenue was $611 million, down 7% [34] Market Data and Key Metrics Changes - Regional revenue declined sequentially except for North America, which remained flat, while Japan saw the sharpest decline [11] - In Europe, EV demand weakened in Q4, with new vehicle registrations dropping 10% month over month in December [15] - The company noted ongoing inventory digestion across key end markets, impacting demand [11][14] Company Strategy and Development Direction - The company is focused on intelligent power and sensing technologies, with investments in high-growth megatrends such as automotive, industrial, and AI data centers [9] - The acquisition of Corbus Silicon Carbide junction field-effect transistor business aims to enhance the company's silicon carbide offerings [19] - The company plans to rationalize its manufacturing footprint and reduce excess capacity through its Fabrite strategy [28] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about demand volatility due to geopolitical uncertainties and inventory digestion across key markets [11][14] - The company anticipates a challenging first quarter in 2025, with automotive revenue expected to decline by 25% sequentially [58] - Management remains committed to long-term strategic goals despite current market conditions, focusing on operational excellence and innovation [21][24] Other Important Information - The company expects Q1 revenue to be in the range of $1.35 billion to $1.45 billion, with non-GAAP gross margin anticipated between 39% and 41% [41][42] - Capital expenditures for Q1 are expected to be between $110 million and $150 million [45] Q&A Session Summary Question: What is the impact of the current demand drop on ON Semiconductor's specific business? - Management indicated that the significant drop is largely due to the non-core business, which has seen the largest decline, and they will exit this volatile market over time [50][51] Question: What are the expectations for automotive and industrial segment trends in Q1? - Automotive is expected to decline by approximately 25%, while industrial is anticipated to decrease in the mid to high single digits [58] Question: How does the company view the long-term growth in silicon carbide? - Management remains committed to leading the silicon carbide market and aims to maintain high profitability despite short-term volatility [87] Question: What is the company's strategy regarding pricing trends for core products? - Management noted that annual price negotiations have not led to significant price reductions, as they focus on internal efficiencies rather than simply adjusting prices [126][128] Question: How is the company managing inventory levels amid current demand fluctuations? - The company is maintaining discipline in inventory management, ensuring that internal inventory levels remain consistent and not inflated by excess stock [159][160]

Earnings Supplement February 2025 2024 Q4 Legal Disclaimers Forward Looking Statements and Risk Factors. The information presented herein is generally available from public sources, including our and our subsidiaries' earnings releases and SEC filings. We urge you to read those documents, and we specifically direct you to the forward-looking statements disclaimers and risk factors they contain. The primary purpose of this presentation is to help you understand how we view our Company and our subsidiaries, n ...

Revenue Performance - Fourth quarter revenue was $1,722.5 million, a decrease of 15% year-over-year from $2,018.1 million in Q4 2023[2] - Full year 2024 revenue totaled $7,082.3 million, down 14% from $8,253.0 million in 2023[3] - Revenue for the quarter ended December 31, 2024, was $1,722.5 million, a decrease of 16.4% compared to $2,018.1 million for the same quarter in 2023[18] - Total revenue for the quarter was $1,862.7 million, showing a slight increase from $1,735.2 million in the previous quarter[28] Profitability Metrics - Fourth quarter GAAP gross margin was 45.2%, compared to 46.7% in Q4 2023, while non-GAAP gross margin was 45.3%[4] - Fourth quarter net income attributable to onsemi was $379.9 million, down from $562.7 million in Q4 2023[2] - The company reported a diluted earnings per share of $0.88 for Q4 2024, down from $1.28 in Q4 2023[2] - Operating income decreased to $408.6 million for the quarter, compared to $612.1 million in the same quarter of 2023, reflecting a decline of 33.2%[18] - Net income attributable to ON Semiconductor Corporation for the quarter was $379.9 million, down from $562.7 million in the same quarter of 2023, representing a decrease of 32.5%[18] - Non-GAAP operating income for the year ended December 31, 2024, was $1,973.9 million, compared to $2,665.2 million for the previous year, indicating a decline of 26.0%[24] - Non-GAAP diluted earnings per share for the quarter was $0.95, down from $0.99 in the previous quarter, reflecting a decrease of approximately 4.0%[26] Cash Flow and Financial Discipline - Full year 2024 free cash flow reached $1.2 billion, representing a 300% increase year-over-year[4] - The company returned 54% of its 2024 free cash flow through share repurchases[1] - Net cash provided by operating activities for the quarter was $579.7 million, an increase from $465.8 million in the previous quarter[22] - Free cash flow for the quarter was $422.4 million, compared to $304.1 million in the prior quarter, representing a significant increase of approximately 38.9%[30] - The company plans to maintain financial discipline and streamline operations amid market volatility[1] Balance Sheet Highlights - Total current assets increased to $6,752.0 million as of December 31, 2024, compared to $5,912.3 million a year earlier, marking a growth of 14.2%[20] - Cash and cash equivalents rose to $2,691.3 million, up from $2,483.0 million in the previous year, indicating an increase of 8.4%[20] - Total liabilities decreased to $5,275.3 million from $5,414.6 million year-over-year, a reduction of 2.6%[20] - ON Semiconductor Corporation's total stockholders' equity increased to $8,814.5 million as of December 31, 2024, compared to $7,800.6 million a year earlier, representing a growth of 12.9%[20] Research and Development - Research and development expenses increased to $155.2 million for the quarter, compared to $150.2 million in the same quarter last year, reflecting a rise of 3.3%[18] Market Focus - The automotive and industrial markets remain a focus for onsemi, driving innovations in vehicle electrification and sustainable energy[11]

Revenue and Income - Bloomberg accounted for rental revenues of $125.35 million, $120.35 million, and $115.13 million for the years ended December 31, 2024, 2023, and 2022, respectively, representing approximately 55%, 54%, and 56% of total rental revenues[23]. - 731 Lexington Avenue generated revenues of $153.3 million, $148.8 million, and $138.8 million for the years ended December 31, 2024, 2023, and 2022, respectively, accounting for approximately 68%, 66%, and 67% of total rental revenues[44]. - Rental revenues increased to $226,374,000 in 2024 from $224,962,000 in 2023, an increase of $1,412,000, primarily due to higher rental revenue from Bloomberg's lease extension[152]. - Net income for the year ended December 31, 2024, was $43,444,000 or $8.46 per diluted share, a decrease from $102,413,000 or $19.97 per diluted share in 2023[142]. - Funds from operations (FFO) for the year ended December 31, 2024, was $77,968,000 or $15.19 per diluted share, compared to $81,067,000 or $15.80 per diluted share in 2023[143]. - Comprehensive income for 2024 was $31,130,000, down from $93,028,000 in 2023, a decrease of 66.6%[211]. Property and Development - The Rego Park I shopping center will be vacant in 2025 after the relocation of Burlington and Marshalls, and the company is exploring sale and development opportunities for the property[22]. - The company is exploring sale and development opportunities for the vacant Rego Park I property[119]. - As of December 31, 2024, the portfolio comprised five properties totaling 2,455,000 square feet, with a commercial occupancy rate of 99.1% and a residential occupancy rate of 94.2%[144]. Financial Position and Debt - As of December 31, 2024, total mortgages payable amounted to $996,544,000, with a total debt to total enterprise value ratio of 59%[67]. - The company faces risks associated with its outstanding debt, including potential difficulties in refinancing on acceptable terms, which could adversely affect future operations[67]. - Total liabilities were $1,164,436,000 as of December 31, 2024, compared to $1,166,023,000 in 2023[205]. - The company anticipates that cash flow from continuing operations will be adequate to fund business operations, cash dividends, debt service, and capital expenditures over the next twelve months[163]. Operational Risks - The company faces risks from trends in office real estate, including the prevalence of work-from-home policies, which could affect tenant space utilization and rental revenues[36]. - The company is subject to various risks affecting the retail environment, including consumer spending levels, tourism, and competition from online retailers[39]. - The company faces risks related to tenant bankruptcies, which could lead to decreased revenues and operational difficulties, impacting cash flow and distributions to stockholders[47]. - Significant inflation could adversely affect the company's ability to raise rental rates, potentially reducing profit margins and increasing operating costs[61]. - The company is exposed to risks associated with property development and redevelopment, including cost overruns and regulatory approval delays, which could adversely affect financial results[63]. Insurance and Compliance - The company maintains general liability insurance with limits of $300 million per occurrence and property insurance coverage of $1.7 billion per occurrence, including terrorism coverage[49]. - The company is subject to various federal, state, and local regulatory requirements, and noncompliance could result in substantial costs[99]. - The company may incur significant costs due to potential adverse federal tax audits and changes in federal tax laws[95]. Environmental and Sustainability Initiatives - Vornado has adopted a 10-year plan, "Vision 2030," to make its buildings carbon neutral by 2030, focusing on energy reduction, recovery, and renewable power[25]. - Vornado operates over 26 million square feet of LEED certified buildings, representing 100% of its certifiable office portfolio, with over 24 million square feet at LEED Gold or Platinum[25]. - The company is subject to transitional risks related to climate-related policy changes, which could lead to increased operating costs and compliance expenses[57]. - The impact of climate change and natural disasters could significantly damage properties and affect demand, leading to adverse financial results[55]. Cybersecurity - The company has implemented various measures to manage cybersecurity risks, but there is no assurance that these measures will be fully effective against evolving threats[87]. - A significant disruption in IT networks could adversely affect operations and result in unauthorized access to sensitive information, potentially harming financial results[88]. - The company has a comprehensive cybersecurity risk management strategy integrated into its overall enterprise risk management program[105]. - The Board of Directors oversees cybersecurity risks, with the Audit Committee responsible for the implementation of the cybersecurity risk management program[107]. Shareholder and Stockholder Matters - Vornado and its affiliates collectively own approximately 58.4% of the outstanding shares of common stock, potentially reducing the likelihood of a tender offer or change in control[77]. - The company may change its operational and financial policies without stockholder approval, limiting stockholder control over significant decisions[78]. - As of December 31, 2024, the company had authorized but unissued 4,826,550 shares of common stock and 3,000,000 shares of preferred stock, which could dilute current stockholders' interests[92]. - The company is dependent on key personnel, including Steven Roth, the Chairman and CEO, and their loss could adversely affect operations and stock value[93].

Financial Performance - Revenue for Q1 fiscal 2025 increased 2% to $15.7 million compared to $15.4 million in Q1 fiscal 2024[4] - Services revenue grew 17% to $4.7 million, up from $4.0 million in the prior year[4] - Gross profit for the quarter increased 11% to $4.6 million, with gross margin expanding over 200 basis points to 29.1%[4] - Net income for Q1 fiscal 2025 was $0.5 million, or $0.05 per diluted common share, compared to a net loss of $(73,000) in Q1 fiscal 2024[4] - Operating expenses increased to $4.9 million, up from $4.4 million in the prior year, reflecting investments in growth[15] Cash and Assets - The company maintained cash and cash equivalents of $30.7 million as of December 31, 2024[5] - Total current assets decreased to $52.2 million from $54.8 million in the previous quarter[14] - Shareholders' equity increased to $47.5 million from $47.3 million in the previous quarter[14] Customer Growth and Partnerships - Several new customers were signed for the AZT PROTECT™ offering, indicating growth in high-demand industries[6] - The company aims to leverage momentum and increase recurring revenue through partnerships, particularly with Rockwell Automation[11]

Sales Performance - Global Systemwide sales exceeded $130 billion for the full year 2024, with growth of over $1 billion (more than $2 billion in constant currencies) [12] - Systemwide sales to loyalty members reached approximately $30 billion for the full year, with a 30% growth over the prior year [12] - 90-day active loyalty users were over 175 million across 60 loyalty markets, reflecting a growth of approximately 15% over the prior year [12] - Global comparable sales increased by 0.4% for the fourth quarter, with the U.S. segment decreasing by 1.4% [13] - Systemwide sales for the year ended December 31, 2024, increased by 1% to $120,933 million from $119,750 million in 2023 [71] - Franchised sales for the year ended December 31, 2024, increased by 2% to $30,603 million compared to $29,945 million in 2023 [71] Financial Results - Consolidated revenues for the fourth quarter were flat at $6.388 billion, while full year revenues increased by 2% to $25.920 billion [17] - Total revenues for the year ended December 31, 2024, were $25,920 million, an increase of 2% from $25,494 million in 2023 [36] - Net income for 2024 was $8,223 million, a decrease of 3% compared to $8,469 million in 2023 [36] - Diluted earnings per share for the fourth quarter remained flat at $2.80, with a full year diluted earnings per share of $11.39, a decrease of 1% [17] - For Q4 2024, net income decreased 1% to $2,017 million, with diluted earnings per share flat at $2.80, impacted by foreign currency translation which reduced EPS by $0.02 [56] - For the full year 2024, net income decreased 3% to $8,223 million, and diluted earnings per share decreased 1% to $11.39, with a negative impact of $0.06 from foreign currency translation [57] Costs and Expenses - Selling, general and administrative expenses increased by 1% to $2,858 million for the year ended December 31, 2024, compared to $2,817 million in 2023 [77] - The company experienced ongoing inflationary cost pressures impacting margins in both the U.S. and international operated markets [75] - Interest expense increased by 6% for the quarter and 11% for the year, driven by higher average interest rates and debt balances [86] - The Company incurred strategic charges related to restaurant closures and restructuring, including pre-tax charges of $74 million for Q4 2024 [58] Strategic Initiatives - The "Accelerating the Arches" growth strategy continues to be a focus for the company, aiming to enhance market share through value and innovation [11] - The company is focusing on its "Accelerating the Organization" strategy, which includes restructuring charges expected to continue until 2027 [48] - The company plans to continue investments in digital and technology transformation efforts to drive future growth [78] - The company is investing in technology and digital engagement to transform customer experience, including mobile ordering and payment systems [109] Market and Operational Challenges - The war in the Middle East has negatively impacted Systemwide sales and revenue, particularly in the International Developmental Licensed Markets & Corporate segment [51] - The competitive landscape remains intense, with competition from traditional and non-traditional players impacting market share and sales [110] - The company faces challenges in staffing, which can affect service speed and customer satisfaction, particularly in a competitive labor market [123] - Supply chain interruptions could lead to increased costs and affect the quality and availability of products, impacting overall operations [118] Future Outlook - The company expects capital expenditures for 2025 to be between $3.0 billion and $3.2 billion, primarily for new restaurant unit expansion [96] - The company anticipates a net restaurant unit expansion contributing slightly over 2% to 2025 Systemwide sales growth in constant currencies [96] - The company plans to open approximately 2,200 restaurants globally in 2025, with about 600 in the U.S. and International Operated Markets [96] Financial Health - Free cash flow is defined as cash provided by operations less capital expenditures, indicating the company's ability to convert net profits into cash resources [25] - Cash provided by operations totaled $9.4 billion in 2024, slightly down from 2023, with free cash flow at $6.7 billion, a decrease of $580 million or 8% [90] - The company’s cash and equivalents balance decreased to $1.1 billion at year-end 2024 from $4.6 billion in 2023 [93] Regulatory and Environmental Considerations - The company faces increasing regulatory and legal complexities that could materially affect operations and financial results, including compliance with food safety and marketing regulations [133] - The company is subject to scrutiny regarding environmental and social impact matters, which could affect consumer perceptions and business operations [149] - The company is working on initiatives related to climate action and sustainability, facing increased pressure for transparency and accountability in these areas [150] Risks and Uncertainties - Changes in tax laws and unanticipated tax liabilities could adversely impact profitability and financial results [138] - Fluctuations in commodity prices and labor costs could negatively affect the profitability of company-owned restaurants [146] - A decrease in credit ratings or increased funding costs could adversely affect profitability and operational flexibility [147] - Security incidents involving unauthorized access or breaches could lead to reputational damage and financial losses, including mitigation costs and reduced sales [131]

Financial Performance - Net sales revenue for the year ended November 30, 2024, decreased by $60,213, or approximately 15% from the prior year, primarily due to decreases in wholesale shipments and retail delivered sales [114]. - Gross profit for fiscal 2024 was $179,415, representing a gross margin of 54.4%, which increased by 150 basis points from 2023 [115]. - SG&A expenses for fiscal 2024 were $187,527, accounting for 56.8% of sales, an increase of 420 basis points from the previous year due to lower sales volumes [116]. - The net sales of furniture and accessories for the year ended November 30, 2024, were $329,923, with a gross profit of $179,415 [125]. - The wholesale segment generated net sales of $207,462, while the retail segment (Company-owned stores) reported net sales of $204,563 for the year ended November 30, 2024 [125]. - Net sales for fiscal 2024 decreased by $41,449 million or 17% compared to fiscal 2023, primarily due to a 19% decrease in shipments to the open market [129]. - Operating income for fiscal 2024 was $25,357 million, a decrease of $5,342 million or 17.4% from fiscal 2023 [127]. - Net sales for the retail segment decreased by $31,377 million or 13.3% in fiscal 2024 compared to fiscal 2023, with total net sales of $204,563 million [131]. - Corporate and other segment net sales declined by $3,885 million or 44.1% to $4,919 million in fiscal 2024 [136]. - The logistical services segment reported zero revenue in fiscal 2024, a decrease of $16,776 million or 100% from fiscal 2023 [138]. E-commerce and Customer Engagement - E-commerce sales increased by over 20% in the latter half of the fiscal year, although they remain small compared to in-store sales [101]. - The new web platform launched in late 2023 has led to increased customer engagement, with more page views and time spent on the site [101]. Asset Impairment and Restructuring - The company recognized non-cash charges totaling $2,401 related to the impairment of Noa Home's assets and a charge of $962 associated with cumulative translation losses [102]. - In fiscal 2024, the company recognized asset impairment charges totaling $5,515, a contract abandonment charge of $1,240, cumulative translation losses of $962, and a restructuring charge of $440, which is expected to yield annual savings of approximately $2,500 starting in 2025 [117]. - The company recorded asset impairment charges totaling $2,887 million in the retail segment and $727 million in the wholesale segment [128]. - The company recognized a charge of $1,827 to fully impair the Noa Home trade name intangible asset during fiscal 2024 [168]. - Noa Home, acquired on September 2, 2022, was determined not likely to achieve profitability and ceased operations as of November 30, 2024, with sales primarily generated outside the United States [121]. Cash Flow and Capital Expenditures - Cash provided by operations decreased by $14,674 million to $4,050 million in fiscal 2024, primarily due to changes in working capital [146]. - The overall cash position declined by $12,993 million during fiscal 2024, with cash and cash equivalents totaling $59,911 million as of November 30, 2024 [147]. - The company spent $5,211 million on property and equipment, including new store openings and remodels during fiscal 2024 [147]. - Total capital expenditures for fiscal 2025 are anticipated to be between $8 million and $12 million, focusing on store remodeling and IT investments [152]. Debt and Credit Facilities - The company entered into a Credit Facility with a line of credit of up to $25,000, with $6,013 outstanding under standby letters of credit as of November 30, 2024 [148]. - The company must maintain a Consolidated Minimum Tangible Net Worth of at least $120,000 under the terms of the Credit Facility [148]. Inventory and Reserves - The allowance for credit losses was $1,097 as of November 30, 2024, representing 7.7% of gross accounts receivable [162]. - Reserves for excess and obsolete inventory were $5,395 as of November 30, 2024, representing 8.9% of inventories on a LIFO basis [163]. Market Risks - The company is exposed to market risk from changes in the cost of raw materials, particularly wood, woven fabric, and foam products [174]. - The company manages exposure to diesel fuel price risk through the application of fuel surcharges to customers [175]. - The company is not significantly exposed to foreign currency market risk for purchases outside North America, as most are denominated in U.S. dollars [173].