MarineMax(HZO) - 2024 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents MarineMax, Inc.'s unaudited condensed consolidated financial statements, including notes, and management's discussion and analysis of financial condition and market risks ITEM 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for MarineMax, Inc. and its subsidiaries, including statements of operations, comprehensive income, balance sheets, shareholders' equity, and cash flows, along with detailed notes explaining accounting policies, fair value measurements, revenue recognition, leases, inventories, goodwill, income taxes, debt, and stock-based compensation Condensed Consolidated Statements of Operations This statement details MarineMax's financial performance, showing revenue, cost of sales, gross profit, operating income, interest expense, income before tax, income tax, and net income for the three months ended December 31, 2022 and 2023 | Metric (Amounts in thousands) | Three Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2023 | Change ($) | Change (%) | | :------------------------------ | :------------------------------ | :------------------------------ | :--------- | :--------- | | Revenue | $507,927 | $527,274 | $19,347 | 3.8% | | Cost of sales | $321,030 | $351,793 | $30,763 | 9.6% | | Gross profit | $186,897 | $175,481 | $(11,416) | -6.1% | | Selling, general, & admin expenses | $150,397 | $156,482 | $6,085 | 4.0% | | Income from operations | $36,500 | $18,999 | $(17,501) | -47.9% | | Interest expense | $9,484 | $18,365 | $8,881 | 93.6% | | Income before income tax | $27,016 | $634 | $(26,382) | -97.7% | | Income tax provision (benefit) | $7,029 | $(211) | $(7,240) | -103.0% | | Net income | $19,987 | $845 | $(19,142) | -95.8% | | Net income attributable to MarineMax, Inc. | $19,690 | $930 | $(18,760) | -95.3% | | Basic net income per common share | $0.91 | $0.04 | $(0.87) | -95.6% | | Diluted net income per common share | $0.89 | $0.04 | $(0.85) | -95.5% | Condensed Consolidated Statements of Comprehensive Income This statement presents net income and other comprehensive income components, including foreign currency translation adjustments and interest rate swap contract changes, for the three months ended December 31, 2022 and 2023 | Metric (Amounts in thousands) | Three Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2023 | Change ($) | Change (%) | | :------------------------------ | :------------------------------ | :------------------------------ | :--------- | :--------- | | Net income | $19,987 | $845 | $(19,142) | -95.8% | | Foreign currency translation adjustments | $5,086 | $3,226 | $(1,860) | -36.6% | | Interest rate swap contract | $(69) | $(286) | $(217) | 314.5% | | Total other comprehensive income, net of tax | $5,017 | $2,940 | $(2,077) | -41.4% | | Comprehensive income | $25,004 | $3,785 | $(21,219) | -84.9% | | Comprehensive income attributable to MarineMax, Inc. | $24,506 | $3,518 | $(20,988) | -85.6% | Condensed Consolidated Balance Sheets This statement provides a snapshot of MarineMax's assets, liabilities, and shareholders' equity as of September 30, 2023, and December 31, 2023 | Metric (Amounts in thousands) | September 30, 2023 | December 31, 2023 | Change ($) | Change (%) | | :------------------------------ | :----------------- | :---------------- | :--------- | :--------- | | ASSETS | | | | | | Cash and cash equivalents | $201,456 | $210,323 | $8,867 | 4.4% | | Accounts receivable, net | $85,780 | $94,601 | $8,821 | 10.3% | | Inventories | $812,830 | $876,233 | $63,403 | 7.8% | | Total current assets | $1,123,176 | $1,206,021 | $82,845 | 7.4% | | Property and equipment, net | $527,552 | $532,492 | $4,940 | 0.9% | | Goodwill | $559,820 | $575,850 | $16,030 | 2.9% | | Total assets | $2,421,305 | $2,526,507 | $105,202 | 4.3% | | LIABILITIES | | | | | | Accounts payable | $71,706 | $43,957 | $(27,749) | -38.7% | | Contract liabilities (customer deposits) | $81,700 | $74,636 | $(7,064) | -8.6% | | Short-term borrowings (Floor Plan) | $537,060 | $664,858 | $127,798 | 23.8% | | Total current liabilities | $847,049 | $940,006 | $92,957 | 11.0% | | Long-term debt, net | $389,231 | $380,972 | $(8,259) | -2.1% | | Total liabilities | $1,502,888 | $1,591,936 | $89,048 | 5.9% | | SHAREHOLDERS' EQUITY | | | | | | Total shareholders' equity attributable to MarineMax, Inc. | $915,843 | $925,098 | $9,255 | 1.0% | | Total shareholders' equity | $918,417 | $934,571 | $16,154 | 1.8% | | Total liabilities and shareholders' equity | $2,421,305 | $2,526,507 | $105,202 | 4.3% | Condensed Consolidated Statements of Shareholders' Equity This statement outlines changes in shareholders' equity, including net income, non-controlling interests, and stock-based compensation, for the period ended December 31, 2023 - Shareholders' equity increased from $918.4 million as of September 30, 2023, to $934.6 million as of December 31, 2023[17][18] - Key changes include net income of $0.93 million, non-controlling interests from acquisitions of $6.66 million, and stock-based compensation of $5.42 million, partially offset by distributions to non-controlling interests and adjustments for equity awards[17][18] Condensed Consolidated Statements of Cash Flows This statement details cash flows from operating, investing, and financing activities for the three months ended December 31, 2022 and 2023 | Metric (Amounts in thousands) | Three Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2023 | Change ($) | Change (%) | | :------------------------------ | :------------------------------ | :------------------------------ | :--------- | :--------- | | Net cash used in operating activities | $(156,294) | $(89,095) | $67,199 | -43.0% | | Net cash used in investing activities | $(498,483) | $(17,300) | $481,183 | -96.5% | | Net cash provided by financing activities | $602,519 | $114,342 | $(488,177) | -81.0% | | Net (decrease) increase in cash and cash equivalents | $(50,501) | $8,867 | $59,368 | -117.6% | | Cash and cash equivalents, end of period | $177,773 | $210,323 | $32,550 | 18.3% | | Cash paid for Interest | $1,832 | $18,493 | $16,661 | 909.4% | | Cash paid for Income taxes | $2,187 | $843 | $(1,344) | -61.5% | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations of accounting policies, fair value measurements, revenue recognition, leases, inventories, goodwill, income taxes, debt, and stock-based compensation 1. COMPANY BACKGROUND MarineMax is the world's largest recreational boat and yacht retailer and superyacht services provider, operating over 130 locations globally - MarineMax is the world's largest recreational boat and yacht retailer and superyacht services provider, with over 130 locations worldwide[22] - Key acquisitions include IGY Marinas (Oct 2022), Midcoast Marine Group (Dec 2022), Boatzon (Jan 2023), C&C Boat Works (June 2023), and AGY (Oct 2023), expanding its marina network, marine construction, digital retail, and luxury charter management services[25][66][67][68] - Sales of new Brunswick boats (Sea Ray and Boston Whaler) accounted for approximately 24% of revenue in fiscal 2023, with Azimut yachts contributing approximately 11%[23][24] - Economic conditions and consumer discretionary spending significantly impact operating results, with Florida generating approximately 53% of dealership revenue in fiscal 2023[27] 2. BASIS OF PRESENTATION The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information, requiring estimates and assumptions - Financial statements are unaudited and prepared using GAAP for interim information, relying on estimates and assumptions for asset/liability valuation and revenue/expense recognition[31][32] - Goodwill was reclassified into a separate caption on the balance sheets for comparability, with no impact on net income or retained earnings[34] 3. NEW ACCOUNTING PRONOUNCEMENTS The Company adopted ASU No. 2022-04 on Supplier Finance Programs in Q1 fiscal 2024, requiring enhanced disclosures without material financial statement impact - Adopted ASU No. 2022-04 (Supplier Finance Programs) in Q1 fiscal 2024, requiring annual and interim disclosures on program terms and outstanding amounts[35] - The adoption of ASU No. 2022-04 did not have a material impact on consolidated financial statement disclosures[35] 4. FAIR VALUE MEASUREMENTS The Company measures financial assets and liabilities at fair value using a hierarchy of observable and unobservable inputs, including interest rate swaps and contingent consideration liabilities Financial Instrument Fair Value (Amounts in thousands) | Financial Instrument (Amounts in thousands) | December 31, 2023 (Level 2) | December 31, 2023 (Level 3) | Total December 31, 2023 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :---------------------- | | Assets: Interest rate swap contract | $1,030 | — | $1,030 | | Liabilities: Contingent consideration liabilities | — | $84,641 | $84,641 | - Contingent consideration liabilities are Level 3 fair value measurements, based on financial projections, market participant assumptions for revenue/profitability, and Monte Carlo simulation[41] Unobservable Inputs for Contingent Consideration Liabilities | Unobservable Input | December 31, 2023 | | :---------------------------------- | :---------------- | | Earnout projected growth (including net operating income) | 23% - 25% | | Discount rate | 11.0% | Contingent Consideration Liabilities Activity (Amounts in thousands) | Contingent Consideration Liabilities (Amounts in thousands) | 2022 | 2023 | | :------------------------------------------ | :-------- | :-------- | | Beginning balance - September 30, | $15,207 | $86,059 | | Additions from business acquisitions | $68,680 | $613 | | Settlement of contingent consideration liabilities | $(4,000) | $(2,250) | | Change in fair value and net present value of contingency | $1,047 | $219 | | Ending balance - December 31, | $80,934 | $84,641 | 5. REVENUE RECOGNITION Revenue is primarily recognized from boat, motor, and trailer sales upon transfer of control, with other streams including services, manufacturing, and marina operations - Revenue from boat, motor, and trailer sales is recognized upon transfer of control to the customer[44] - Maintenance and repair services revenue is recognized over time using an input method based on labor hours[47] Revenue Recognition Timing by Segment (December 31, 2023) | Revenue Recognition Timing | Retail Operations (Dec 31, 2023) | Product Manufacturing (Dec 31, 2023) | | :------------------------- | :------------------------------- | :----------------------------------- | | At a point in time | 85.7% | 100.0% | | Over time | 14.3% | — | Revenue Disaggregation by Segment (December 31, 2023) | Revenue Disaggregation (Dec 31, 2023) | Retail Operations | Product Manufacturing | Total | | :------------------------------------ | :---------------- | :-------------------- | :------ | | New boat sales | 66.3% | 98.9% | 66.4% | | Used boat sales | 7.9% | — | 7.8% | | Maintenance and repair services | 5.9% | — | 5.9% | | Storage and charter rentals | 7.7% | — | 7.7% | | Finance and insurance products | 2.4% | — | 2.4% | | Parts and accessories | 5.1% | 1.1% | 5.1% | | Brokerage sales | 4.7% | — | 4.7% | 6. LEASES MarineMax primarily leases real estate for its operations, with all leases classified as operating leases, and also acts as a lessor generating rental income - As of December 31, 2023, the weighted-average remaining lease term for operating leases was approximately 21 years, with a weighted-average discount rate of 6.5%[55][58] - Operating lease expenses were approximately $8.0 million for the three months ended December 31, 2023, an increase from $7.0 million in the prior year[55] Lease Liabilities Maturities (Amounts in thousands) | Lease Liabilities Maturities (Amounts in thousands) | December 31, 2023 | | :---------------------------------- | :---------------- | | 2024 (remaining) | $12,653 | | 2025 | $17,451 | | 2026 | $15,781 | | 2027 | $15,207 | | 2028 | $14,431 | | Thereafter | $261,905 | | Total lease payments | $337,428 | | Less: interest | $(201,506) | | Present value of lease liabilities | $135,922 | Rental Income (Amounts in thousands) | Rental Income (Amounts in thousands) | Three Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2023 | | :----------------------------------- | :------------------------------ | :------------------------------ | | Operating lease income | $1,965 | $2,454 | | Variable lease income | $178 | $435 | | Total rental income | $2,143 | $2,889 | 7. INVENTORIES Inventories are valued at the lower of cost or net realizable value, with new and used boats, motors, and trailers accounted for on a specific identification basis - Inventories are stated at the lower of cost or net realizable value, with new and used boats, motors, and trailers accounted for on a specific identification basis[63] Inventory Category (Amounts in thousands) | Inventory Category (Amounts in thousands) | September 30, 2023 | December 31, 2023 | Change ($) | Change (%) | | :---------------------------------------- | :----------------- | :---------------- | :--------- | :--------- | | New and used boats, motors, and trailers | $625,287 | $702,351 | $77,064 | 12.3% | | In transit inventory and deposits | $115,879 | $103,743 | $(12,136) | -10.5% | | Parts, accessories, and other | $18,712 | $17,521 | $(1,191) | -6.4% | | Work-in-process | $22,340 | $24,706 | $2,366 | 10.6% | | Raw materials | $30,612 | $27,912 | $(2,700) | -8.8% | | Total Inventories | $812,830 | $876,233 | $63,403 | 7.8% | 8. GOODWILL Goodwill is recorded as the excess of purchase price over the fair value of net assets acquired, with an annual impairment test performed - Goodwill increased to $575.85 million as of December 31, 2023, from $559.82 million as of September 30, 2023, primarily due to the acquisition of AGY[66][70] - The Company performs an annual goodwill impairment test and concluded that it was not 'more likely than not' that the fair values of its reporting units were less than their carrying values as of December 31, 2023[69] Goodwill by Segment (Amounts in thousands) | Goodwill by Segment (Amounts in thousands) | Retail Operations | Product Manufacturing | Total | | :----------------------------------------- | :---------------- | :-------------------- | :-------- | | Balance as of September 30, 2023 | $490,786 | $69,034 | $559,820 | | Goodwill acquired | $13,515 | — | $13,515 | | Foreign currency translation | $2,515 | — | $2,515 | | Balance as of December 31, 2023 | $506,816 | $69,034 | $575,850 | 9. INCOME TAXES Income taxes are accounted for under FASB ASC 740, recognizing deferred tax assets and liabilities for temporary differences, with a stable effective tax rate - Recognized an income tax benefit of $0.2 million for the three months ended December 31, 2023, compared to a $7.0 million provision in the prior year[72] - The effective income tax rate before discrete items was 26.4% for the three months ended December 31, 2023, consistent with 26.3% in the prior year[72] 10. SHORT-TERM BORROWINGS AND LONG-TERM DEBT The Company's Amended Credit Facility provides a Floor Plan, revolving credit, and term loans, with outstanding short-term borrowings and long-term debt as of December 31, 2023 - The Amended Credit Facility (July 2023) provides a Floor Plan of up to $950 million, a $100 million revolving credit facility, a $400 million delayed draw term loan, and a $100 million delayed draw mortgage loan facility, all maturing in August 2027[73] - As of December 31, 2023, outstanding short-term borrowings (Floor Plan) were approximately $664.9 million, with an interest rate of approximately 8.8%[77][78] - Long-term debt, net of current maturities and unamortized debt issuance costs, totaled $380.972 million as of December 31, 2023[84] - The Company was in compliance with all financial covenants under the Amended Credit Agreement as of December 31, 2023[75] 11. STOCK-BASED COMPENSATION Stock-based compensation is accounted for under FASB ASC 718, using the Black-Scholes model for options and fair value for restricted stock awards - Stock-based compensation expense increased to approximately $5.4 million for the three months ended December 31, 2023, from $4.8 million in the prior year[86] 12. THE INCENTIVE STOCK PLANS The 2021 Stock-Based Compensation Plan allows for various awards to attract and retain talent, with shares available for grant and options outstanding - The 2021 Stock-Based Compensation Plan was amended in February 2023, increasing the total number of available shares by 1,300,000[88] Incentive Stock Plan Activity | Incentive Stock Plan Activity | September 30, 2023 | December 31, 2023 | | :---------------------------- | :----------------- | :---------------- | | Shares Available for Grant | 1,984,588 | 1,300,377 | | Options Outstanding | 54,750 | 28,750 | | Weighted Average Exercise Price | $20.96 | $25.57 | | Weighted Average Remaining Contractual Life | 2.5 years | 4.4 years | 13. EMPLOYEE STOCK PURCHASE PLAN The Amended 2008 Employee Stock Purchase Plan allows eligible employees to purchase common stock at a discount, with shares issued and Black-Scholes valuation assumptions - The Stock Purchase Plan allows employees to purchase common stock at 85% of the lower of the opening or closing price during offering periods[92] - As of December 31, 2023, 1,340,054 shares of common stock have been issued under the Stock Purchase Plan[94] Black-Scholes Assumptions | Black-Scholes Assumptions | Three Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2023 | | :------------------------ | :------------------------------ | :------------------------------ | | Dividend yield | 0.0% | 0.0% | | Risk-free interest rate | 3.9% | 5.3% | | Volatility | 48.1% | 39.2% | | Expected life | Six Months | Six Months | 14. RESTRICTED STOCK AWARDS Restricted stock awards and RSUs are granted to employees, directors, and officers, generally vesting over two to four years, with significant unrecognized compensation cost - Restricted stock awards and RSUs generally vest between two and four years after the grant date[95] Restricted Stock Award Activity | Restricted Stock Award Activity | September 30, 2023 | December 31, 2023 | | :------------------------------ | :----------------- | :---------------- | | Non-vested balance | 1,341,151 | 1,881,441 | | Awards granted | — | 722,611 | | Awards vested | — | (163,046) | | Awards forfeited | — | (19,275) | - As of December 31, 2023, total unrecognized compensation cost related to non-vested restricted stock awards was approximately $41.2 million, to be recognized over a weighted average period of 2.3 years[96] 15. NET INCOME PER SHARE This section details the weighted average common shares outstanding used in calculating basic and diluted net income per share Shares (in millions) | Shares (in millions) | Three Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2023 | | :------------------- | :------------------------------ | :------------------------------ | | Basic | 21.76 | 22.20 | | Diluted | 22.22 | 22.81 | 16. COMMITMENTS AND CONTINGENCIES The Company is involved in various legal actions in the ordinary course of business, not expected to materially affect financial condition or results - Legal actions arising in the ordinary course of business are not expected to have a material adverse effect on financial condition, results of operations, or cash flows as of December 31, 2023[98] 17. SEGMENT INFORMATION MarineMax operates through Retail Operations and Product Manufacturing segments, detailing revenue and income from operations for each - The Company's reportable segments are Retail Operations and Product Manufacturing, with the CEO acting as the chief operating decision maker[99] - Retail Operations includes sales of new/used boats, marine products, repair/maintenance, slip/storage rentals, financing, insurance, brokerage, yacht charter services, and luxury marinas (IGY Marinas)[99] - Product Manufacturing includes Cruisers Yachts (sport yacht and yachts) and Intrepid Powerboats (customized powerboats), with Cruisers Yachts selling through retail dealerships and independent dealers, and Intrepid Powerboats using a direct-to-consumer model[100] Segment Performance (Amounts in thousands) | Segment Performance (Amounts in thousands) | Three Months Ended Dec 31, 2022 | Three Months Ended Dec 31, 2023 | | :----------------------------------------- | :------------------------------ | :------------------------------ | | Revenue: | | | | Retail Operations | $502,386 | $524,085 | | Product Manufacturing | $56,326 | $46,128 | | Elimination of intersegment revenue | $(50,785) | $(42,939) | | Total Revenue | $507,927 | $527,274 | | Income from operations: | | | | Retail Operations | $36,728 | $14,806 | | Product Manufacturing | $6,502 | $3,970 | | Intersegment adjustments | $(6,730) | $223 | | Total Income from operations | $36,500 | $18,999 | ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section provides an overview of MarineMax's financial condition and operational results, highlighting the company's position as the largest recreational boat and yacht retailer and superyacht services company General MarineMax is the world's largest recreational boat and yacht retailer, operating 81 retail locations and pursuing an aggressive acquisition strategy, while facing economic and interest rate challenges - MarineMax is the largest recreational boat and yacht retailer and superyacht services company globally, with 81 retail locations in 21 states[105][113] - The company completed four acquisitions in fiscal year 2023 and one in fiscal 2024, continuing its growth strategy[108] - Economic downturns, increased interest rates, and lower consumer confidence negatively impact discretionary spending on luxury goods, affecting MarineMax more due to its focus on the higher end of the market[109][110] - Florida remains a major market, contributing approximately 53% of dealership revenue in fiscal 2023[109] Consolidated Results of Operations This section analyzes MarineMax's revenue growth, gross profit decline, increased selling, general, and administrative expenses, and a significant rise in interest expense for the three months ended December 31, 2023 - Revenue increased by $19.4 million (3.8%) to $527.3 million, primarily due to a 4% increase in comparable-store sales from new and used boat revenue and higher-margin businesses[119] - Gross profit decreased by $11.4 million (6.1%) to $175.5 million, with gross profit margin declining to 33.3% from 36.8%, mainly due to lower new and used boat margins in a challenging retail environment[120] - Selling, general, and administrative expenses increased by $6.1 million (4.1%) to $156.5 million, attributed to inflation and prior-year acquisitions[121] - Interest expense rose significantly by $8.9 million (93.6%) to $18.4 million, driven by increased interest rates and higher inventory levels[122] - Net income decreased by $19.1 million (95.8%) to $0.8 million[9] Liquidity and Capital Resources MarineMax's primary cash needs are for working capital, inventory, and acquisitions, financed by operations and the Amended Credit Facility, with adequate resources for the next 12 months - Cash used in operating activities decreased to approximately $89.1 million for the three months ended December 31, 2023, from $156.3 million in the prior year, primarily due to inventory increases[127] - Cash used in investing activities significantly decreased to approximately $17.3 million from $498.5 million, as the prior year included the IGY Marinas acquisition[128] - Cash provided by financing activities decreased to approximately $114.3 million from $602.5 million, reflecting lower net borrowings on short-term debt and no new long-term debt proceeds compared to the prior year[129] - The Company believes its existing capital resources, including cash from sales and the Amended Credit Facility, will be adequate to meet liquidity and capital requirements for at least the next 12 months, excluding possible significant acquisitions[135] Impact of Seasonality and Weather on Operations The recreational boating industry is highly seasonal, with lower sales and higher inventory levels typically in the December and March quarters, and adverse weather can negatively impact operations - The recreational boating industry is highly seasonal, with lower sales and higher inventory levels typically in the December and March quarters, except in Florida[136] - Public boat and recreation shows in January generally stimulate sales and help reduce inventory levels[136] - Adverse weather conditions (e.g., prolonged winters, droughts, hurricanes) can negatively impact operations and customer demand, despite geographic diversity[137] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK MarineMax is exposed to market risks primarily from changes in interest rates on its variable-rate debt and foreign currency exchange rate fluctuations Interest Rate Risk The Company is exposed to interest rate risk on its variable-rate short-term borrowings and long-term debt, with a hypothetical 100-basis point increase impacting annual pre-tax interest expense - A hypothetical 100-basis point increase in interest rates would increase annual pre-tax interest expense by approximately $10.4 million[138] Foreign Currency Exchange Rate Risk Fluctuations in the U.S. dollar exchange rate can impact the retail price and competitiveness of foreign products, particularly those denominated in Euro, with no current hedging activities - Fluctuations in the U.S. dollar exchange rate can impact the retail price and competitiveness of foreign products, even if transacted in U.S. dollars[139] - Net revenues whose functional currency was not the U.S. dollar (primarily Euro) were approximately 3% of total revenues in fiscal 2023[140] - The Company is not currently engaged in foreign currency exchange hedging transactions[139] ITEM 4. CONTROLS AND PROCEDURES The CEO and CFO evaluated the effectiveness of the Company's disclosure controls and procedures, concluding they were effective at a reasonable assurance level, with no material changes in internal control - The CEO and CFO concluded that disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2023[142] - No material changes in internal control over financial reporting occurred during the quarter ended December 31, 2023[143] - Management acknowledges that control systems provide only reasonable assurance and have inherent limitations, such as faulty judgments, simple errors, circumvention by individuals, or management override[144] PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity security sales, defaults, mine safety, other information, and a list of exhibits ITEM 1. LEGAL PROCEEDINGS The Company is involved in various legal actions in the ordinary course of business, which are not expected to have a material adverse effect on its financial condition or results - Various legal actions arising in the ordinary course of business are not expected to have a material adverse effect on the Company's financial condition, results of operations, or cash flows as of December 31, 2023[147] ITEM 1A. RISK FACTORS There are no new material risk factors to report for the quarter ended December 31, 2023, beyond those disclosed in the Annual Report on Form 10-K for the fiscal year ended September 30, 2023 - No new material risk factors are reported for the quarter ended December 31, 2023[148] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS There were no unregistered sales of equity securities or use of proceeds to report for the quarter ended December 31, 2023 - No unregistered sales of equity securities or use of proceeds occurred during the three months ended December 31, 2023[149] ITEM 3. DEFAULTS UPON SENIOR SECURITIES There were no defaults upon senior securities to report for the quarter ended December 31, 2023 - No defaults upon senior securities occurred during the three months ended December 31, 2023[150] ITEM 4. MINE SAFETY DISCLOSURES Mine safety disclosures are not applicable to the Company's operations - Mine safety disclosures are not applicable[151] ITEM 5. OTHER INFORMATION During the three months ended December 31, 2023, no officers or directors adopted or terminated any Rule 10b5-1(c) trading arrangements or non-Rule 10b5-1 trading arrangements - No officers or directors adopted or terminated any Rule 10b5-1(c) trading arrangements or non-Rule 10b5-1 trading arrangements during the three months ended December 31, 2023[152] ITEM 6. EXHIBITS This section lists all exhibits filed with the Form 10-Q, including certifications from the CEO and CFO, articles of incorporation, bylaws, and various XBRL documents - Exhibits include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2), corporate governance documents (3.1, 3.2, 4.1), and Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[154]