CTS(CTS) - 2023 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements for CTS Corporation, detailing earnings, balance sheets, cash flows, and shareholders' equity with accompanying notes Item 1. Financial Statements This section presents CTS Corporation's unaudited condensed consolidated financial statements, detailing earnings, balance sheets, cash flows, and shareholders' equity with accompanying notes Condensed Consolidated Statements of Earnings This statement details CTS Corporation's net sales, gross margin, operating earnings, net earnings, and EPS for the three and six months ended June 30, 2023 and 2022 | Metric | Three Months Ended June 30, 2023 ($ thousands) | Three Months Ended June 30, 2022 ($ thousands) | Six Months Ended June 30, 2023 ($ thousands) | Six Months Ended June 30, 2022 ($ thousands) | | :---------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net sales | 145,182 | 144,982 | 291,176 | 292,677 | | Gross margin | 50,742 | 51,848 | 102,394 | 106,188 | | Operating earnings | 18,432 | 22,686 | 40,607 | 48,732 | | Net earnings | 12,897 | 12,598 | 31,241 | 32,837 | | Diluted EPS | 0.41 | 0.39 | 0.98 | 1.02 | | Cash dividends per share| 0.04 | 0.04 | 0.08 | 0.08 | - Net sales for Q2 2023 increased by $200 (0.1%) year-over-year, while net sales for the six months ended June 30, 2023, decreased by $1,501 (0.5%) year-over-year[7][11][27] - Operating earnings decreased by 18.8% in Q2 2023 and 16.7% for the six months ended June 30, 2023, primarily due to lower gross margin and increased operating expenses, including restructuring charges[27][181][185] Condensed Consolidated Statements of Comprehensive Earnings This statement presents CTS Corporation's net earnings and other comprehensive earnings for the three and six months ended June 30, 2023 and 2022 | Metric | Three Months Ended June 30, 2023 ($ thousands) | Three Months Ended June 30, 2022 ($ thousands) | Six Months Ended June 30, 2023 ($ thousands) | Six Months Ended June 30, 2022 ($ thousands) | | :----------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net earnings | 12,897 | 12,598 | 31,241 | 32,837 | | Other comprehensive earnings | 2,993 | 775 | 4,362 | 1,855 | | Comprehensive earnings | 15,890 | 13,373 | 35,603 | 34,692 | - Other comprehensive earnings significantly increased in both the three and six months ended June 30, 2023, driven by positive changes in fair market value of derivatives and cumulative translation adjustments[49][163][165] Condensed Consolidated Balance Sheets This statement outlines CTS Corporation's assets, liabilities, and shareholders' equity as of June 30, 2023, and December 31, 2022 | Metric | June 30, 2023 ($ thousands) | December 31, 2022 ($ thousands) | | :------------------------- | :-------------------------- | :------------------------------ | | Cash and cash equivalents | 150,878 | 156,910 | | Total current assets | 329,877 | 325,760 | | Total Assets | 755,906 | 748,487 | | Total current liabilities | 107,182 | 112,532 | | Long-term debt | 77,040 | 83,670 | | Total Liabilities | 234,511 | 242,263 | | Total Shareholders' Equity | 521,395 | 506,224 | - Total assets increased slightly to $755,906 thousand at June 30, 2023, from $748,487 thousand at December 31, 2022, while total liabilities decreased, leading to an increase in total shareholders' equity[30] Condensed Consolidated Statements of Cash Flows This statement details CTS Corporation's cash flows from operating, investing, and financing activities for the six months ended June 30, 2023 and 2022 | Cash Flow Activity | Six Months Ended June 30, 2023 ($ thousands) | Six Months Ended June 30, 2022 ($ thousands) | | :----------------------------- | :------------------------------------------- | :------------------------------------------- | | Net cash from operating activities | 34,607 | 35,352 | | Net cash used in investing activities | (11,846) | (103,519) | | Net cash (used in) provided by financing activities | (29,967) | 24,392 | | Net decrease in cash and cash equivalents | (6,032) | (42,726) | | Cash and cash equivalents at end of period | 150,878 | 98,739 | - Net cash used in investing activities significantly decreased from $(103,519) thousand in 2022 to $(11,846) thousand in 2023, primarily due to lower payments for acquisitions[31][190] - Net cash used in financing activities was $(29,967) thousand for the six months ended June 30, 2023, a shift from net cash provided of $24,392 thousand in the prior year, driven by treasury stock purchases and debt paydown[31][191] Condensed Consolidated Statements of Shareholders' Equity This statement tracks changes in CTS Corporation's shareholders' equity from December 31, 2022, to June 30, 2023 | Equity Component | Balance at December 31, 2022 ($ thousands) | Balance at June 30, 2023 ($ thousands) | | :------------------------------- | :----------------------------------------- | :------------------------------------- | | Common Stock | 316,803 | 319,111 | | Additional Contributed Capital | 46,144 | 43,488 | | Retained Earnings | 546,703 | 575,422 | | Accumulated Other Comprehensive Income (Loss) | (671) | 3,691 | | Treasury Stock | (402,755) | (420,317) | | Total Shareholders' Equity | 506,224 | 521,395 | - Total shareholders' equity increased by $15,171 thousand from December 31, 2022, to June 30, 2023, primarily due to net earnings and positive changes in accumulated other comprehensive income, partially offset by treasury stock repurchases[53] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements NOTE 1 — Basis of Presentation These unaudited financial statements are prepared in accordance with SEC rules and GAAP, requiring management estimates and assumptions - The financial statements are unaudited and prepared in conformity with GAAP, requiring management estimates and assumptions[76] - No material changes in significant accounting policies have occurred compared to the Annual Report on Form 10-K for the year ended December 31, 2022[76] NOTE 2 – Revenue Recognition Revenue is recognized upon satisfaction of performance obligations, typically at delivery or shipment, with variable consideration estimated using the most likely amount method - Revenue is recognized when performance obligations are satisfied, usually at the date of delivery or shipment[77] - Variable consideration is estimated using the most likely amount method, based on historical experience and current facts[58] - No contracts as of June 30, 2023, contained a significant financing component[77] NOTE 3 – Business Acquisitions Details the acquisition of Maglab AG in February 2023 and final purchase prices for prior acquisitions of TEWA and Ferroperm - On February 6, 2023, CTS acquired 100% of Maglab AG for $4,167 thousand in cash, with a final purchase price of $7,717 thousand including $3,564 thousand in contingent consideration[18][64][85] - Maglab AG specializes in magnetic system design and current measurement solutions for e-mobility, industrial automation, and renewable energy applications[84][154] - The final purchase price for TEWA Temperature Sensors (acquired Feb 2022) was $23,721 thousand, and for Ferroperm Piezoceramics (acquired June 2022) was $72,340 thousand[79][82] NOTE 4 – Accounts Receivable, net Provides a breakdown of accounts receivable, net, and the allowance for credit losses at June 30, 2023, and December 31, 2022 | Metric | June 30, 2023 ($ thousands) | December 31, 2022 ($ thousands) | | :-------------------------- | :-------------------------- | :------------------------------ | | Accounts receivable, gross | 98,666 | 92,171 | | Less: Allowance for credit losses | (1,147) | (1,236) | | Accounts receivable, net | 97,519 | 90,935 | NOTE 5 – Inventories, net Details the composition of inventories, net, including finished goods, work-in-process, and raw materials, at June 30, 2023, and December 31, 2022 | Inventory Component | June 30, 2023 ($ thousands) | December 31, 2022 ($ thousands) | | :------------------ | :-------------------------- | :------------------------------ | | Finished goods | 13,103 | 12,865 | | Work-in-process | 22,076 | 22,819 | | Raw materials | 38,621 | 37,362 | | Less: Inventory reserves | (11,244) | (10,786) | | Inventories, net | 62,556 | 62,260 | NOTE 6 – Property, Plant and Equipment, net Outlines the components of property, plant and equipment, net, and includes an asset impairment charge recorded in Q2 2023 | PP&E Component | June 30, 2023 ($ thousands) | December 31, 2022 ($ thousands) | | :----------------------------- | :-------------------------- | :------------------------------ | | Land and land improvements | 536 | 1,100 | | Buildings and improvements | 72,956 | 71,938 | | Machinery and equipment | 260,012 | 258,159 | | Less: Accumulated depreciation | (238,548) | (233,897) | | Property, plant and equipment, net | 94,956 | 97,300 | - A charge of $1,324 thousand was recorded in Q2 2023 for asset impairment charge due to restructuring actions[68][95] NOTE 7 – Retirement Plans Reports net pension expense and other post-retirement plan income/expense for the six months ended June 30, 2023 and 2022 | Metric | Six Months Ended June 30, 2023 ($ thousands) | Six Months Ended June 30, 2022 ($ thousands) | | :---------------------- | :------------------------------------------- | :------------------------------------------- | | Net pension expense | 133 | 130 | | Other post-retirement plan (income) expense, net | (72) | 52 | NOTE 9 – Costs Associated with Exit and Restructuring Activities Details restructuring charges, including costs from the September 2020 Plan and other activities like the Juarez manufacturing facility shutdown | Metric | Six Months Ended June 30, 2023 ($ thousands) | Six Months Ended June 30, 2022 ($ thousands) | | :---------------------- | :------------------------------------------- | :------------------------------------------- | | Restructuring charges | 2,807 | 942 | - The September 2020 Plan incurred $1,708 thousand in restructuring costs for the six months ended June 30, 2023, including $1,324 thousand in asset impairment charges[95] - Other restructuring activities, including the shutdown of the Juarez manufacturing facility, incurred $1,099 thousand in charges for the six months ended June 30, 2023[122] NOTE 10 – Accrued Expenses and Other Liabilities Provides a breakdown of accrued expenses and other liabilities, including remediation reserves and derivative liabilities, at June 30, 2023, and December 31, 2022 | Liability Component | June 30, 2023 ($ thousands) | December 31, 2022 ($ thousands) | | :----------------------------------- | :-------------------------- | :------------------------------ | | Accrued product related costs | 2,251 | 2,368 | | Accrued income taxes | 7,548 | 9,630 | | Remediation reserves | 12,811 | 11,048 | | Derivative liabilities | 702 | 357 | | Other accrued liabilities | 5,400 | 4,196 | | Total accrued expenses and other liabilities | 35,381 | 35,322 | NOTE 11 – Commitments and Contingencies Discusses environmental liabilities, including remediation reserves and an EPA reimbursement request, and other legal actions - Remediation reserves increased to $12,811 thousand at June 30, 2023, from $11,048 thousand at December 31, 2022[99] - The Company received an EPA letter seeking $9,955 thousand reimbursement for the Asheville Site and recorded a loss estimate of $1,900 thousand as of June 30, 2023[99] - Management believes adequate accruals are established for legal and environmental matters, with no material adverse effect expected on financial condition[126][127] NOTE 12 - Debt Details the Company's long-term debt, Revolving Credit Facility, available credit, and weighted-average interest rate, confirming covenant compliance | Metric | June 30, 2023 ($ thousands) | December 31, 2022 ($ thousands) | | :------------------------------------------- | :-------------------------- | :------------------------------ | | Total credit facility | 400,000 | 400,000 | | Balance outstanding | 77,040 | 83,670 | | Amount available, subject to covenant restrictions | 321,320 | 314,690 | | Weighted-average interest rate | 5.74% | 2.96% | - The Revolving Credit Facility's maturity was extended to December 15, 2026, and LIBOR was replaced with SOFR as the primary reference rate[102][215] - The Company was in compliance with all debt covenants at June 30, 2023[103][215] NOTE 13 - Derivative Financial Instruments Explains the Company's use of interest rate swaps, foreign currency forward contracts, and a cross-currency swap to manage market risks - The Company uses interest rate swaps to convert $50,000 thousand of variable rate debt to a fixed rate until December 2026[107] - Foreign currency forward contracts, designated as cash flow hedges, had a notional amount of $16,538 thousand at June 30, 2023, with a net unrealized gain of $2,387 thousand in AOCI expected to reclassify to earnings within 12 months[106][134][158] - A cross-currency swap, designated as a net investment hedge for the Ferroperm acquisition, resulted in a net unrealized loss of $1,003 thousand in AOCI at June 30, 2023[108] | Derivative Type | Six Months Ended June 30, 2023 ($ thousands) | Six Months Ended June 30, 2022 ($ thousands) | | :------------------------ | :------------------------------------------- | :------------------------------------------- | | Total derivative gain on foreign exchange contracts recognized in earnings | 747 | 308 | | Income (expense) from Interest Rate Swaps in Interest expense | 817 | (273) | | Income from Cross-Currency Swap in Interest expense | 295 | — | | Total net gains on derivatives | 1,859 | 35 | NOTE 14 – Accumulated Other Comprehensive Income (Loss) Analyzes the changes in accumulated other comprehensive income (loss), driven by derivatives, pension costs, and translation adjustments | Component | As of December 31, 2022 ($ thousands) | As of June 30, 2023 ($ thousands) | | :-------------------------------------- | :------------------------------------ | :-------------------------------- | | Changes in fair market value of derivatives, net | 3,012 | 4,221 | | Changes in unrealized pension cost, net | (803) | (833) | | Cumulative translation adjustment, net | (2,880) | 303 | | Total accumulated other comprehensive (loss) income | (671) | 3,691 | - The increase in AOCI was significantly influenced by a $2,414 thousand gain recognized in OCI from changes in fair market value of derivatives and a $3,183 thousand gain from cumulative translation adjustments during the six months ended June 30, 2023[165] NOTE 15 – Shareholders' Equity Details changes in shareholders' equity, including common shares outstanding, treasury stock, and the new share repurchase program | Metric | June 30, 2023 | December 31, 2022 | | :---------------------- | :------------ | :---------------- | | Shares issued | 57,440,235 | 57,330,761 | | Shares outstanding | 31,394,377 | 31,680,890 | | Treasury stock shares held | 26,045,858 | 25,649,871 | - A new share repurchase program for up to $50,000 thousand was approved on February 9, 2023, replacing the prior program. As of June 30, 2023, approximately $36,633 thousand remains available[168][196] - During the six months ended June 30, 2023, 395,987 shares of common stock were repurchased for $17,562 thousand[168][169] NOTE 16- Stock-Based Compensation Reports stock-based compensation expense, unrecognized compensation for RSUs, and outstanding cash-settled RSUs | Expense Type | Six Months Ended June 30, 2023 ($ thousands) | Six Months Ended June 30, 2022 ($ thousands) | | :----------------------- | :------------------------------------------- | :------------------------------------------- | | Service-based RSUs | 1,535 | 1,368 | | Performance-based RSUs | 1,357 | 2,041 | | Cash-settled RSUs | 343 | 157 | | Total compensation expense | 3,235 | 3,566 | | RSU Type | Unrecognized Compensation Expense at June 30, 2023 ($ thousands) | Weighted Average Period (years) | | :----------------------- | :--------------------------------------------------------------- | :------------------------------ | | Service-based RSUs | 2,993 | 1.47 | | Performance-based RSUs | 5,252 | 1.88 | | Total | 8,245 | 1.73 | - At June 30, 2023, there were 49,347 Cash-Settled RSUs outstanding, classified as liabilities, for key employees in foreign locations[150] NOTE 17 — Fair Value Measurements Describes the fair value measurement of financial instruments, including interest rate swaps, foreign currency hedges, and contingent consideration | Financial Instrument | June 30, 2023 Carrying Value ($ thousands) | Level 1 ($ thousands) | Level 2 ($ thousands) | Level 3 ($ thousands) | | :------------------------------ | :----------------------------------------- | :-------------------- | :-------------------- | :-------------------- | | Interest rate swaps | 3,092 | — | 3,092 | — | | Foreign currency hedges | 2,095 | — | 2,095 | — | | Cross-currency swap | (701) | — | (701) | — | | Qualified replacement plan assets | 14,218 | 14,218 | — | — | | Contingent consideration | (3,564) | — | — | (3,564) | - Contingent consideration, valued at $3,564 thousand, is a Level 3 fair value measurement, relying on management's assumptions about future revenues and timing of events[151] - Interest rate swaps and foreign currency hedges are classified within Level 2 of the fair value hierarchy, using standard valuation models with market-based observable inputs[1] NOTE 18 — Income Taxes Discusses the effective income tax rate and the factors contributing to its decrease for the six months ended June 30, 2023 | Period | Effective Tax Rate | | :---------------------- | :----------------- | | Three Months Ended June 30, 2023 | 19.8% | | Three Months Ended June 30, 2022 | 25.6% | | Six Months Ended June 30, 2023 | 19.5% | | Six Months Ended June 30, 2022 | 23.0% | - The decrease in the effective income tax rate is primarily attributed to tax benefits recorded upon vesting of restricted stock and tax benefits from amended U.S. federal income tax returns[4][213] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance for Q2 and six months ended June 30, 2023, noting Q2 sales growth, overall earnings decline, and strong liquidity Overview CTS Corporation designs and manufactures products for aerospace & defense, industrial, medical, and transportation markets, enhancing capabilities through the Maglab AG acquisition - CTS Corporation designs and manufactures products that Sense, Connect, and Move for OEMs and tier one suppliers in aerospace and defense, industrial, medical, and transportation markets[154] - The Company acquired Maglab AG in February 2023, gaining expertise in magnetic system design and current measurement solutions for e-mobility, industrial automation, and renewable energy[154] Supply Chain Uncertainties Despite easing global conditions, material shortages persist, posing risks to production schedules and potentially leading to excess inventory due to fluctuating customer orders - Supply chain conditions have eased, but material shortages could still impact production schedules for CTS or its customers[180] - The Company faces the risk of carrying excess inventory due to customers changing orders on short notice[180] Results of Operations: Second Quarter 2023 versus Second Quarter 2022 Q2 2023 net sales marginally increased by 0.1%, driven by transportation, while gross margin and operating earnings declined due to sales mix, costs, and restructuring charges | Metric | Q2 2023 ($ thousands) | Q2 2022 ($ thousands) | % Change | | :---------------------- | :-------------------- | :-------------------- | :------- | | Net sales | 145,182 | 144,982 | 0.1% | | Gross margin | 50,742 | 51,848 | (2.1%) | | Operating earnings | 18,432 | 22,686 | (18.8%) | | Net earnings | 12,897 | 12,598 | 2.4% | | R&D expenses (% of net sales) | 6,721 (4.6%) | 6,294 (4.3%) | 6.8% | | Restructuring charges | 1,895 | 630 | 200.8% | | Effective income tax rate | 19.8% | 25.6% | (5.8 pp) | - Net sales to the transportation market increased by 10.0%, while non-transportation markets decreased by 10.3% in Q2 2023, with foreign exchange rates decreasing net sales by $1,092 thousand[7] - Gross margin decrease was driven by end market sales mix, increased material and freight costs, and unfavorable foreign exchange rates of $1,720 thousand[156] Results of Operations: Six Months ended June 30, 2023 versus Six Months Ended June 30, 2022 Six-month net sales decreased by 0.5%, with transportation growth offset by non-transportation declines, leading to lower gross margin and operating earnings due to increased expenses | Metric | 6M 2023 ($ thousands) | 6M 2022 ($ thousands) | % Change | | :---------------------- | :-------------------- | :-------------------- | :------- | | Net sales | 291,176 | 292,677 | (0.5%) | | Gross margin | 102,394 | 106,188 | (3.6%) | | Operating earnings | 40,607 | 48,732 | (16.7%) | | Net earnings | 31,241 | 32,837 | (4.9%) | | R&D expenses (% of net sales) | 13,307 (4.6%) | 12,488 (4.3%) | 6.6% | | Restructuring charges | 2,807 | 942 | 198.0% | | Effective income tax rate | 19.5% | 23.0% | (3.5 pp) | - Net sales to the transportation market increased by 1.7%, while non-transportation markets decreased by 2.9% for the six-month period, with foreign exchange rates decreasing net sales by $3,413 thousand[11] - SG&A expenses increased by 3.7% due to higher environmental costs and acquisition activity[186] Liquidity and Capital Resources Liquidity is strong, supported by operating cash flows and a $400,000 thousand Revolving Credit Facility, despite increased cash usage in financing activities - Net cash provided by operating activities was $34,607 thousand for the six months ended June 30, 2023[15][190] - Net cash used in investing activities was $(11,846) thousand, driven by the Maglab acquisition and capital expenditures[190] - Net cash used in financing activities was $(29,967) thousand for the six months ended June 30, 2023, primarily due to $17,562 thousand in treasury stock purchases and $6,630 thousand net cash used in long-term debt paydown[191] - The Revolving Credit Facility provides $400,000 thousand in total credit, with $321,320 thousand available at June 30, 2023, and a weighted-average interest rate of 5.74%[17][128][215] Critical Accounting Policies and Estimates The Company's critical accounting policies and estimates remain consistent with the prior Annual Report on Form 10-K, with no significant changes in application - Critical accounting policies and estimates are consistent with those discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2022[192] - There were no significant changes in the application of critical accounting policies or estimates during the three and six months ended June 30, 2023[192] Significant Customers Cummins Inc. and Toyota Motor Corporation were significant customers, accounting for 16.4% and 11.7% of net sales, respectively, for the six months ended June 30, 2023 | Customer | Six Months Ended June 30, 2023 (% of Net Sales) | Six Months Ended June 30, 2022 (% of Net Sales) | | :---------------------- | :---------------------------------------------- | :---------------------------------------------- | | Cummins Inc. | 16.4% | 15.9% | | Toyota Motor Corporation | 11.7% | 11.4% | - The Company continues to focus on broadening its customer base to diversify non-transportation end market exposure[217] Forward‑Looking Statements This section contains forward-looking statements subject to various risks, including supply chain disruptions and economic changes, with no obligation for updates - Forward-looking statements are based on management's expectations, assumptions, and currently available information, subject to uncertainties and risks[20] - Factors that may affect future operating results include supply chain disruptions, economic changes (inflation/recession), technological change, market conditions, reliance on key customers, and international operational risks[20] - The Company undertakes no obligation to publicly update its forward-looking statements[20] Item 3. Quantitative and Qualitative Disclosures About Market Risk The Company's exposure to market risk, including foreign currency and interest rate fluctuations, has not materially changed from its prior Annual Report on Form 10-K - There have been no material changes in the Company's exposure to market risk during the three months ended June 30, 2023[194] Item 4. Controls and Procedures Disclosure controls and procedures were effective as of June 30, 2023, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2023, providing reasonable assurance for timely and accurate information disclosure[22] - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting for the quarter ended June 30, 2023[22] PART II. OTHER INFORMATION This section provides additional information, including legal proceedings, risk factors, equity security sales, other disclosures, and exhibits Item 1. Legal Proceedings The Company is involved in various legal proceedings, with adequate accruals established and no material adverse effect expected on financial condition - The Company is involved in litigation arising from the ordinary conduct of its business[195] - Management believes adequate accruals have been established for expected future liabilities, and no material adverse effect on business, results of operations, financial condition, or cash flows is expected[195] Item 1A. Risk Factors No significant changes to the Company's risk factors have occurred since the Annual Report on Form 10-K for the year ended December 31, 2022 - No significant changes to risk factors from those contained in the Annual Report on Form 10-K for the year ended December 31, 2022[227] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds A new $50,000 thousand share repurchase program was approved in February 2023, with $36,633 thousand remaining available after repurchases - A new share repurchase program for up to $50,000 thousand was approved on February 9, 2023, replacing the prior program[168][196] - During the six months ended June 30, 2023, 395,987 shares of common stock were repurchased for $17,562 thousand[168][169] - As of June 30, 2023, approximately $36,633 thousand remains available for future purchases under the program[168][222] Item 5. Other Information Directors and officers may engage in stock transactions, including through Rule 10b5-1 Plans, with specific plans for the CEO and CFO detailed - Directors and officers may purchase or sell common stock, including through Rule 10b5-1 Plans[229] - The CEO, Kieran O'Sullivan, entered a Rule 10b5-1 Plan on May 23, 2023, for the sale of up to 65,000 shares, terminating by May 23, 2025[223] - The CFO, Ashish Agrawal, entered a Rule 10b5-1 Plan on June 2, 2023, for the sale of up to 25,000 shares, terminating by August 30, 2024[198] Item 6. Exhibits This section lists exhibits filed with the Quarterly Report on Form 10-Q, including certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, and the Inline XBRL formatted financial information - Exhibits include certifications pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002[199][225][231] - The Quarterly Report on Form 10-Q includes financial statements formatted in Inline XBRL[200][225] SIGNATURES The report is duly signed by the Corporate Controller and the Vice President and Chief Financial Officer as of July 25, 2023 - The report is signed by Thomas M. White, Corporate Controller (Principal Accounting Officer), and Ashish Agrawal, Vice President and Chief Financial Officer (Principal Financial Officer)[201] - The signing date for the report is July 25, 2023[201]