Acme United Corporation (NYSE:ACU) Q1 2024 Earnings Conference Call April 19, 2024 12:00 PM ET Company Participants Walter Johnsen - Chairman & CEO Paul Driscoll - CFO Conference Call Participants Tim Call - Capital Management Corporation Jim Marrone - Singular Research Operator Good day, and welcome to the Acme United Corporation First Quarter Earnings Call. At this time, I would like to turn the call over to Walter Johnsen, Chairman and CEO. Please go ahead, sir. Walter Johnsen Good morning. Welcome to th ...

ACME UNITED CORPORATION NEWS RELEASE CONTACT: Paul G. Driscoll Acme United Corporation 1 Waterview Drive Shelton, CT 06484 Phone: (203) 254-6060 FOR IMMEDIATE RELEASE April 19, 2024 ACME UNITED REPORTS 39% INCREASE IN EARNINGS PER SHARE FOR FIRST QUARTER OF 2024 SHELTON, CT – April 19, 2024 – Acme United Corporation (NYSE American: ACU) today announced that net sales for the quarter ended March 31, 2024 were $45.0 million compared to $45.8 million for the quarter ended March 31, 2023, a decrease of 2%. Excl ...

SHELTON, Conn., April 12, 2024 (GLOBE NEWSWIRE) -- Acme United Corporation (NYSE:ACU) will release its financial results for First Quarter 2024 on Friday, April 19, 2024, at 9:00 a.m. Eastern Time. A conference call to discuss these results will be broadcast over the internet on Friday, April 19, 2024, at 12:00 p.m. Eastern Time. To listen to or participate in a question-and-answer session, dial 1-877-407-0784, international callers dial 1-201-689-8560, conference ID: 13745527. Access to the live webcast of ...

SHELTON, Conn., April 12, 2024 (GLOBE NEWSWIRE) -- Acme United Corporation (NYSE American: ACU) will release its financial results for First Quarter 2024 on Friday, April 19, 2024, at 9:00 a.m. Eastern Time. A conference call to discuss these results will be broadcast over the internet on Friday, April 19, 2024, at 12:00 p.m. Eastern Time. To listen to or participate in a question-and-answer session, dial 1-877-407-0784, international callers dial 1-201-689-8560, conference ID: 13745527. Access to the live ...

SHELTON, Conn., March 15, 2024 (GLOBE NEWSWIRE) -- The Board of Directors of Acme United Corporation (NYSE:ACU) declared a cash dividend of 15 cents per share on its outstanding common stock. The dividend is payable on April 19, 2024, to stockholders of record on the close of business on March 28, 2024. ACME UNITED CORPORATION is a leading worldwide supplier of innovative safety solutions and cutting technology to the school, home, office, hardware, sporting goods and industrial markets. Its leading brands ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from: ___________ to ___________ Commission file number: 01-07698 ACME UNITED CORPORATION (Exact Name of Registrant as Specified in Its Charter) Connecticut 06-0236700 State o ...

Acme United Corporation (NYSE:ACU) Q4 2023 Results Conference Call March 1, 2024 12:00 PM ET Company Participants Walter Johnsen - Chairman and CEO Paul Driscoll - Chief Financial Officer Conference Call Participants Jim Marrone - Singular Research Tim Call - The Capital Management Corporation Richard Dearnley - Longport Partners Sam Namiri - Ridgewood Investments Jake Patterson - Talanta Investment Group Operator Good day, welcome to the Acme United Corporation Fourth Quarter 2023 Earnings. At this time, I ...

Core Points - Acme United Corporation reported a net sales decrease of 1% for the year ended December 31, 2023, totaling $191.5 million compared to $194.0 million in 2022 [1] - The company sold its Camillus and Cuda product lines for $19.8 million on November 1, 2023, resulting in an after-tax gain of approximately $9.6 million [1][2] - The company achieved a record free cash flow of $24 million in 2023, alongside a significant reduction in debt by $13 million [3][6] Financial Performance - Net income for the year ended December 31, 2023, was $17.8 million, or $4.86 per diluted share, including the sale of Camillus and Cuda [2] - Excluding the sale, net income was $8.2 million, or $2.23 per diluted share, compared to $3.0 million, or $0.82 per diluted share in 2022 [2][13] - For the fourth quarter of 2023, net income including the sale was $11.2 million, or $2.87 per diluted share, while excluding the sale, it was $1.6 million, or $0.40 per diluted share [2][12] Sales Performance - U.S. segment net sales decreased by 6% in Q4 2023 compared to the same period in 2022, with a 2% decline when excluding the sold product lines [3] - European net sales for Q4 2023 declined by 8% in U.S. dollars and 13% in local currency, attributed to a soft economy [4] - Canadian net sales increased by 11% in U.S. dollars and 12% in local currency for Q4 2023, driven by higher sales of first aid products [4] Operational Efficiency - Gross margin improved to 39.1% in Q4 2023 from 31.9% in Q4 2022, and for the year, it increased to 37.7% from 32.8% [5] - The company successfully reduced inventory by $5 million and implemented cost-saving initiatives that generated approximately $6.5 million in savings [3][5] Future Outlook - The company anticipates growth in 2024 from new first aid customers and additional placements of cutting tools in craft and mass markets [3] - Acme United plans to continue seeking accretive acquisitions to enhance its business [3]

[Earnings Release Highlights](index=1&type=section&id=1.0-earnings-release-highlights) Acme United reported varied Q4 and FY 2023 financial results, marked by strategic divestitures, significant debt reduction, and improved gross margins, with anticipated growth in 2024 [Fourth Quarter 2023 Financial Performance](index=1&type=section&id=1.1-fourth-quarter-2023-financial-performance) Acme United's Q4 2023 net sales decreased 5% to $41.9 million, while net income significantly improved to $11.2 million ($2.87 diluted EPS) including divestiture gains Q4 2023 Net Sales Performance | Metric | Q4 2023 ($M) | Q4 2022 ($M) | Change (%) | | :----- | :----------- | :----------- | :--------- | | Net Sales | 41.9 | 44.1 | -5% | | Net Sales (excl. divestiture) | N/A | N/A | -1% | Q4 2023 Net Income & EPS Performance | Metric | Q4 2023 (incl. divestiture) | Q4 2023 (excl. divestiture) | Q4 2022 | | :----- | :-------------------------- | :-------------------------- | :-------- | | Net Income ($M) | 11.2 | 1.6 | (0.6) | | Diluted EPS | $2.87 | $0.40 | ($0.17) | [Full Year 2023 Financial Performance](index=1&type=section&id=1.2-full-year-2023-financial-performance) Full year 2023 net sales decreased 1% to $191.5 million, with net income reaching $17.8 million ($4.86 diluted EPS) including divestiture gains FY 2023 Net Sales Performance | Metric | FY 2023 ($M) | FY 2022 ($M) | Change (%) | | :----- | :----------- | :----------- | :--------- | | Net Sales | 191.5 | 194.0 | -1% | FY 2023 Net Income & EPS Performance | Metric | FY 2023 (incl. divestiture) | FY 2023 (excl. divestiture) | FY 2022 | | :----- | :-------------------------- | :-------------------------- | :-------- | | Net Income ($M) | 17.8 | 8.2 | 3.0 | | Diluted EPS | $4.86 | $2.23 | $0.82 | [Strategic Achievements and Operational Improvements](index=2&type=section&id=1.3-strategic-achievements-and-operational-improvements) Acme United achieved significant strategic milestones in 2023, including a $19.8 million divestiture, $13 million debt reduction, $6.5 million in cost savings, and record $24 million free cash flow - Divestiture of Camillus and Cuda product lines for **$19.8 million**, resulting in an after-tax gain of approximately **$9.6 million** and reducing debt by **$13 million**[2](index=2&type=chunk)[5](index=5&type=chunk) - Successfully completed a **$5 million** inventory reduction program[5](index=5&type=chunk)[7](index=7&type=chunk) - Implemented cost reduction and productivity initiatives, generating approximately **$6.5 million** in savings, exceeding the initial target of **$5 million**[5](index=5&type=chunk) - Achieved a record **$24 million** in free cash flow[5](index=5&type=chunk)[7](index=7&type=chunk) - Gained market share in the first aid and medical business and introduced new craft and industrial cutting tools[5](index=5&type=chunk) [2024 Outlook and Future Strategy](index=2&type=section&id=1.4-2024-outlook-and-future-strategy) The company anticipates 2024 growth from new first aid customers and cutting tool placements, while actively pursuing accretive acquisitions - Anticipates growth in 2024 from new first aid customers, additional placement of cutting tools in craft and mass markets, and new DMT sharpener business[5](index=5&type=chunk) - Plans to continue seeking accretive acquisitions, supported by a strong balance sheet[5](index=5&type=chunk) [Segmental Net Sales Performance](index=2&type=section&id=2.0-segmental-net-sales-performance) This section details the net sales performance across U.S., European, and Canadian segments, highlighting regional trends and contributing factors [U.S. Segment Sales](index=2&type=section&id=2.1-u.s.-segment-sales) U.S. net sales decreased 6% in Q4 2023 and 1% for the full year, primarily due to customer inventory reductions U.S. Segment Net Sales Performance | Period | Change (YoY) | Change (YoY, excl. divestiture) | Primary Reason (FY) | | :----- | :----------- | :------------------------------ | :------------------ | | Q4 2023 | -6% | -2% | N/A | | FY 2023 | -1% | Constant | Customer inventory reductions | [European Segment Sales](index=2&type=section&id=2.2-european-segment-sales) European net sales declined 8% in USD for Q4 2023 and 4% for the full year, primarily due to a soft economy European Segment Net Sales Performance | Period | Change (USD YoY) | Change (Local Currency YoY) | Primary Reason | | :----- | :--------------- | :-------------------------- | :------------- | | Q4 2023 | -8% | -13% | Soft economy | | FY 2023 | -4% | -6% | Soft economy | [Canadian Segment Sales](index=2&type=section&id=2.3-canadian-segment-sales) Canadian net sales increased 11% in USD for Q4 2023 and 1% for the full year, driven by higher first aid product sales Canadian Segment Net Sales Performance | Period | Change (USD YoY) | Change (Local Currency YoY) | Primary Reason | | :----- | :--------------- | :-------------------------- | :------------- | | Q4 2023 | +11% | +12% | Higher first aid sales | | FY 2023 | +1% | +5% | Higher first aid sales | [Financial Position and Key Metrics](index=3&type=section&id=3.0-financial-position-and-key-metrics) This section analyzes Acme United's gross margin, debt levels, and cash flow, highlighting improvements and key financial movements [Gross Margin](index=3&type=section&id=3.1-gross-margin) Gross margin significantly improved to 39.1% in Q4 2023 and 37.7% for the full year, driven by productivity and lower freight costs Gross Margin Performance | Period | Gross Margin 2023 | Gross Margin 2022 | Change (pp) | Primary Reasons | | :----- | :---------------- | :---------------- | :---------- | :-------------- | | Q4 | 39.1% | 31.9% | +7.2 pp | Productivity, lower freight | | FY | 37.7% | 32.8% | +4.9 pp | Productivity, lower freight | [Debt and Cash Flow](index=3&type=section&id=3.2-debt-and-cash-flow) Acme United significantly reduced bank debt to $19.0 million, generated $24.0 million in free cash flow, and received $13.0 million from asset sales Debt and Cash Flow Highlights | Metric | Dec 31, 2023 ($M) | Dec 31, 2022 ($M) | Change ($M) | | :----- | :---------------- | :---------------- | :---------- | | Bank Debt less Cash | 19.0 | 55.0 | -36.0 | - Generated approximately **$24.0 million** in free cash flow, including a **$5.0 million** inventory reduction[7](index=7&type=chunk) - Received approximately **$13.0 million** in net proceeds from the sale of Camillus and Cuda product lines[7](index=7&type=chunk) - Paid **$2.0 million** in dividends on common stock during FY 2023[7](index=7&type=chunk) [Company Information](index=3&type=section&id=4.0-company-information) This section provides an overview of Acme United Corporation's business, market presence, key brands, and details regarding its recent conference call [About Acme United Corporation](index=3&type=section&id=4.1-about-acme-united-corporation) Acme United Corporation is a global supplier of innovative safety solutions and cutting technology across diverse markets and brands - Leading worldwide supplier of innovative safety solutions and cutting technology[9](index=9&type=chunk) - Serves school, home, office, hardware, sporting goods, and industrial markets[9](index=9&type=chunk) - Key brands include First Aid Only®, First Aid Central®, PhysiciansCare®, Pac-Kit®, Spill Magic®, Westcott®, Clauss®, DMT®, Med-Nap and Safety Made[9](index=9&type=chunk) [Conference Call and Webcast](index=3&type=section&id=4.2-conference-call-and-webcast) A conference call and webcast were held on March 1, 2024, to discuss quarterly results, with replay information available - Conference call held on March 1, 2024, at 12:00 p.m. ET[8](index=8&type=chunk) - Webcast replay available under Investor Relations, Audio Archives on www.acmeunited.com[8](index=8&type=chunk) [Forward-Looking Statements and Risk Factors](index=4&type=section&id=5.0-forward-looking-statements-and-risk-factors) This section outlines the forward-looking statements and various risk factors that could materially affect the company's future business, operations, and financial results [Forward-Looking Statements and Risk Factors Details](index=4&type=section&id=5.1-forward-looking-statements-and-risk-factors-details) Forward-looking statements are subject to various risks and uncertainties, including global economic conditions, supply chain disruptions, and geopolitical conflicts, which could materially impact results - Forward-looking statements are subject to risks and uncertainties that may impact business, operations, and financial results[11](index=11&type=chunk)[12](index=12&type=chunk) - Risks include global economic conditions, inflation, interest rates, geopolitical conflicts (Ukraine, Middle East), supply chain disruptions, labor costs, currency fluctuations, inventory management, changes in client needs and consumer spending, competition, technological changes (online marketing), ability to manage growth and integrate acquisitions, and international trade policies (tariffs)[13](index=13&type=chunk)[14](index=14&type=chunk) [Condensed Consolidated Financial Statements](index=5&type=section&id=6.0-condensed-consolidated-financial-statements) This section presents the condensed consolidated statements of operations for quarterly and annual periods, along with the condensed consolidated balance sheets [Condensed Consolidated Statements of Operations (Three Months Ended December 31)](index=5&type=section&id=6.1-condensed-consolidated-statements-of-operations-three-months-ended-december-31) This section details the condensed consolidated statements of operations for Q4 2023 and 2022, including net sales, gross profit, and net income Condensed Consolidated Statements of Operations (Q4) | Metric (000's) | Q4 2023 | Q4 2022 | | :------------- | :------ | :------ | | Net sales | $41,942 | $44,104 | | Cost of goods sold | $25,538 | $30,021 | | Gross profit | $16,404 | $14,083 | | Operating income (loss) | $2,093 | ($27) | | Gain on sale of assets | $12,551 | - | | Net income (loss) | $11,208 | ($597) | | Diluted EPS | $2.87 | ($0.17) | [Condensed Consolidated Statements of Operations (Year Ended December 31)](index=6&type=section&id=6.2-condensed-consolidated-statements-of-operations-year-ended-december-31) This section presents the condensed consolidated statements of operations for the full years 2023 and 2022, detailing net sales, gross profit, and net income Condensed Consolidated Statements of Operations (Full Year) | Metric (000's) | FY 2023 | FY 2022 | | :------------- | :------ | :------ | | Net sales | $191,501 | $193,962 | | Cost of goods sold | $119,291 | $130,403 | | Gross profit | $72,210 | $63,559 | | Operating income | $13,188 | $6,274 | | Gain on sale assets | $12,551 | - | | Net income | $17,793 | $3,035 | | Diluted EPS | $4.86 | $0.82 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=6.3-condensed-consolidated-balance-sheets) This section presents the condensed consolidated balance sheets as of December 31, 2023, and 2022, detailing assets, liabilities, and equity Condensed Consolidated Balance Sheets | Metric (000's) | Dec 31, 2023 | Dec 31, 2022 | | :------------- | :----------- | :----------- | | Total current assets | $92,024 | $105,600 | | Total assets | $149,241 | $164,377 | | Total current liabilities | $26,012 | $22,127 | | Long term debt | $13,105 | $49,916 | | Total liabilities | $51,343 | $85,347 | | Total stockholders' equity | $97,898 | $79,030 |

[Part I — FINANCIAL INFORMATION](index=3&type=section&id=Part%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1: Financial Statements (Unaudited)](index=3&type=section&id=Item%201%3A%20Financial%20Statements%20%28Unaudited%29) Unaudited Q3 2023 financial statements reveal a 1% net sales increase, significant net income growth, reduced assets and debt, and improved operating cash flow from inventory reduction [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **$156,269** | **$164,377** | **($8,108)** | | Cash and cash equivalents | $5,567 | $6,100 | ($533) | | Inventories | $54,575 | $63,325 | ($8,750) | | **Total Liabilities** | **$70,363** | **$85,347** | **($14,984)** | | Long-term debt | $32,934 | $49,916 | ($16,982) | | **Total Stockholders' Equity** | **$85,906** | **$79,030** | **$6,876** | - The company significantly reduced its inventory by **$8.75 million** and long-term debt by nearly **$17 million** as of September 30, 2023, compared to the end of 2022[9](index=9&type=chunk)[11](index=11&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q3 2023 vs Q3 2022 Performance (in thousands, except per share data) | Metric | Q3 2023 | Q3 2022 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $50,384 | $49,744 | +1.3% | | Gross Profit | $19,503 | $15,925 | +22.5% | | Gross Margin | 38.7% | 32.0% | +6.7pp | | Operating Income | $3,657 | $953 | +283.7% | | Net Income | $2,152 | $64 | +3262.5% | | Diluted EPS | $0.58 | $0.02 | +$0.56 | Nine Months 2023 vs 2022 Performance (in thousands, except per share data) | Metric | Nine Months 2023 | Nine Months 2022 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $149,559 | $149,849 | -0.2% | | Gross Profit | $55,807 | $49,475 | +12.8% | | Operating Income | $11,096 | $6,299 | +76.2% | | Net Income | $6,586 | $3,632 | +81.3% | | Diluted EPS | $1.83 | $0.96 | +$0.87 | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) - For the nine months ended September 30, 2023, comprehensive income was **$6.5 million**, a significant increase from **$2.2 million** in the same period of 2022. This was driven by higher net income, partially offset by a smaller foreign currency translation loss[17](index=17&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) - Stockholders' equity increased from **$79.0 million** at the end of 2022 to **$85.9 million** as of September 30, 2023. The growth was primarily driven by net income of **$6.6 million**, partially offset by dividend distributions of **$1.5 million**[22](index=22&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2023 | 2022 | Change | | :--- | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $21,662 | ($7,607) | +$29,269 | | Net cash used in investing activities | ($4,523) | ($13,208) | +$8,685 | | Net cash (used in) provided by financing activities | ($18,408) | $22,155 | ($40,563) | - The significant improvement in operating cash flow was mainly due to an **$8.7 million** decrease in inventories, compared to a **$12.8 million** increase in the prior year period. Financing activities reflected a net repayment of **$17.0 million** in long-term debt in 2023, versus net borrowings of **$24.1 million** in 2022[24](index=24&type=chunk)[26](index=26&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Net Sales by Product Category (in thousands) | Product Category | Q3 2023 | Q3 2022 | 9 Months 2023 | 9 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Cutting, Sharpening and Measuring | $20,315 | $22,525 | $61,162 | $70,710 | | First Aid and Medical | $30,069 | $27,219 | $88,397 | $79,139 | Net Sales by Segment (in thousands) | Segment | Q3 2023 | Q3 2022 | 9 Months 2023 | 9 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | United States | $43,688 | $42,943 | $127,743 | $127,589 | | Canada | $3,305 | $3,629 | $10,938 | $11,120 | | Europe | $3,391 | $3,172 | $10,878 | $11,140 | - On November 1, 2023, the Company sold its Camillus Cutlery and Cuda business lines to GSM Holdings, Inc. for a purchase price of **$19.77 million**[65](index=65&type=chunk) - As of September 30, 2023, the company had **$33 million** in borrowings outstanding under its **$65 million** revolving loan agreement with HSBC, which expires on May 31, 2026[41](index=41&type=chunk)[42](index=42&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong Q3 2023 performance to significant gross margin improvement, driven by productivity and lower freight costs, alongside successful inventory and debt reduction, with expected cost savings exceeding $6.0 million [Results of Operations](index=21&type=section&id=Results%20of%20Operations) - Q3 2023 net sales increased **1%** to **$50.4 million**. U.S. sales grew **2%** driven by first aid products, while Canada sales fell **9%** (**7%** in local currency) and Europe sales rose **7%** in USD but fell **1%** in local currency due to economic weakness[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) - Gross margin for Q3 2023 expanded significantly to **38.7%** from **32.0%** in Q3 2022. This improvement was primarily due to productivity gains in manufacturing and distribution, along with lower in-bound freight costs[78](index=78&type=chunk) - SG&A expenses increased by **$874,000** in Q3 2023 compared to Q3 2022, mainly due to higher personnel-related expenses[78](index=78&type=chunk) - Operating income for Q3 2023 surged to **$3.7 million** from **$1.0 million** in Q3 2022, with the U.S. segment contributing the majority of the increase due to productivity improvements and cost savings[79](index=79&type=chunk) [Financial Condition](index=24&type=section&id=Financial%20Condition) - During the first nine months of 2023, working capital decreased by **$10.4 million**, primarily due to a planned inventory reduction of **$8.8 million** as supply chain risks diminished[83](index=83&type=chunk) Key Financial Ratios | Ratio | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Current ratio | 3.87 | 4.77 | | Long term debt to equity ratio | 50.4% | 76.7% | - Total debt under the revolving credit facility was reduced by approximately **$17 million** during the first nine months of 2023, with **$32 million** available for borrowing as of September 30, 2023[86](index=86&type=chunk) - The company has implemented cost reduction initiatives expected to generate over **$6.0 million** in savings in 2023 through productivity improvements and lower SG&A expenses[87](index=87&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=25&type=section&id=Item%203%3A%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is not applicable for this reporting period - The company has indicated that this item is not applicable[89](index=89&type=chunk) [Controls and Procedures](index=25&type=section&id=Item%204%3A%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of September 30, 2023, and concluded they were effective. No material changes were made to the internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of September 30, 2023[89](index=89&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended September 30, 2023, that materially affected, or are reasonably likely to materially affect, internal controls[90](index=90&type=chunk) [Part II — OTHER INFORMATION](index=26&type=section&id=Part%20II%20%E2%80%94%20OTHER%20INFORMATION) [Legal Proceedings](index=26&type=section&id=Item%201%3A%20Legal%20Proceedings) The company reports that there are no pending material legal proceedings to which it is a party - There are no pending material legal proceedings involving the company[92](index=92&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A%3A%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 - The company refers to the Risk Factors section in its Annual Report on Form 10-K for the fiscal year ended December 31, 2022, indicating no material updates[92](index=92&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202%3A%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None reported[92](index=92&type=chunk) [Defaults Upon Senior Securities](index=26&type=section&id=Item%203%3A%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None reported[92](index=92&type=chunk) [Mine Safety Disclosures](index=26&type=section&id=Item%204%3A%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[92](index=92&type=chunk) [Other Information](index=26&type=section&id=Item%205%3A%20Other%20Information) The company reported no other information for this period - None reported[92](index=92&type=chunk) [Exhibits](index=26&type=section&id=Item%206%3A%20Exhibits) This section lists the exhibits filed with the report, including CEO and CFO certifications (pursuant to Sarbanes-Oxley Act Sections 302 and 906) and Inline XBRL documents - Exhibits filed include certifications from the CEO and CFO under Sarbanes-Oxley Sections 302 and 906, as well as Inline XBRL data files[92](index=92&type=chunk)