Orion (ORN) - 2024 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS This section presents the unaudited condensed consolidated financial statements and accompanying notes for the period ended March 31, 2024 Condensed Consolidated Balance Sheets The balance sheet reflects a contraction in assets, liabilities, and equity from the prior year-end Key Financial Position Metrics | Metric | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | Change (vs. Dec 31, 2023) | | :--- | :--- | :--- | :--- | | Total Assets | $363,584 | $416,893 | -$53,309 | | Total Liabilities | $247,514 | $295,418 | -$47,904 | | Total Stockholders' Equity | $116,070 | $121,475 | -$5,405 | | Cash and cash equivalents | $4,638 | $30,938 | -$26,300 | | Total current assets | $217,499 | $271,816 | -$54,317 | | Total current liabilities | $163,563 | $215,916 | -$52,353 | Condensed Consolidated Statements of Operations The company's operating results show improved gross profit and a reduced net loss compared to the prior-year period Quarterly Operating Performance | Metric | Three months ended March 31, 2024 (in Thousands) | Three months ended March 31, 2023 (in Thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Contract revenues | $160,672 | $159,174 | +$1,498 | | Costs of contract revenues | $145,134 | $153,334 | -$8,200 | | Gross profit | $15,538 | $5,840 | +$9,698 | | Gross profit margin | 9.7% | 3.7% | +6.0 pp | | Selling, general and administrative expenses | $18,999 | $17,017 | +$1,982 | | Operating loss | $(3,124) | $(10,643) | +$7,519 | | Interest expense | $(3,374) | $(1,633) | -$1,741 | | Net loss | $(6,057) | $(12,595) | +$6,538 | | Basic loss per share | $(0.19) | $(0.39) | +$0.20 | Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity decreased during the quarter primarily due to the net loss, partially offset by share-based compensation Changes in Stockholders' Equity | Metric | Balance, December 31, 2023 (in Thousands) | Balance, March 31, 2024 (in Thousands) | | :--- | :--- | :--- | | Total Stockholders' Equity | $121,475 | $116,070 | | Net loss | $(6,057) | $(6,057) | | Share-based compensation | $358 | $358 | | Exercise of stock options | $294 | $294 | | Common Stock Shares (March 31, 2024) | 33,260,011 | 33,575,345 | Condensed Consolidated Statements of Cash Flows Cash flows reflect increased cash usage in operating activities and a net decrease in cash for the quarter Quarterly Cash Flow Summary | Metric | Three months ended March 31, 2024 (in Thousands) | Three months ended March 31, 2023 (in Thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | $(22,825) | $(3,033) | -$19,792 | | Net cash used in investing activities | $(1,573) | $(1,300) | -$273 | | Net cash provided by (used in) financing activities | $(1,902) | $3,394 | -$5,296 | | Net change in cash, cash equivalents and restricted cash | $(26,300) | $(939) | -$25,361 | | Cash, cash equivalents and restricted cash at end of period | $4,638 | $2,845 | +$1,793 | Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations of significant accounting policies and financial statement line items 1. Description of Business and Basis of Presentation The company operates in marine and concrete construction, with management asserting adequate liquidity for the next 12 months - Orion Group Holdings, Inc. operates in two reportable segments: marine and concrete, providing specialty construction services across North America and the Caribbean Basin[14] - Management believes the company has adequate liquidity for the next 12 months, and therefore, substantial doubt about its ability to continue as a going concern is not raised[24] 2. Summary of Significant Accounting Policies This note details key accounting policies, including revenue recognition, leases, and the use of management estimates - Management's estimates and assumptions are crucial for financial statement preparation, with actual amounts potentially differing[26] - The Company evaluates significant accounting policies on an ongoing basis, including revenue recognition, accounts receivable, property, plant and equipment, leases, share-based compensation, income taxes, and self-insurance[27][29] 3. Revenue Total revenue saw a slight increase, driven by significant growth in the marine segment offsetting a decline in the concrete segment Revenue by Segment and Service Line | Segment/Service Line | Three months ended March 31, 2024 (in Thousands) | Three months ended March 31, 2023 (in Thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Marine Segment | | | | | Construction | $88,789 | $54,012 | +$34,777 | | Dredging | $14,670 | $20,730 | -$6,060 | | Specialty Services | $2,866 | $4,556 | -$1,690 | | Marine segment contract revenues | $106,325 | $79,298 | +$27,027 | | Concrete Segment | | | | | Structural | $11,573 | $15,744 | -$4,171 | | Light Commercial | $42,774 | $64,132 | -$21,358 | | Concrete segment contract revenues | $54,347 | $79,876 | -$25,529 | | Total contract revenues | $160,672 | $159,174 | +$1,498 | - Marine segment construction revenue increased significantly, while dredging and specialty services revenue decreased[76] - Concrete segment structural and light commercial revenues both decreased[76] 4. Concentration of Risk and Enterprise-Wide Disclosures The company has significant revenue and receivable concentrations with private companies and the U.S. Federal Government Gross Receivables by Customer Type | Customer Type | March 31, 2024 (Gross Receivables) | December 31, 2023 (Gross Receivables) | | :--- | :--- | :--- | | Federal Government | 12% | 6% | | State Governments | 4% | 2% | | Local Governments | 13% | 9% | | Private Companies | 71% | 83% | | Total Gross Receivables | $128,561 (in Thousands) | $143,634 (in Thousands) | Contract Revenues by Customer Type | Customer Type | Three months ended March 31, 2024 (Contract Revenues) | Three months ended March 31, 2023 (Contract Revenues) | | :--- | :--- | :--- | | Federal Government | 33% | 14% | | State Governments | 9% | 12% | | Local Government | 18% | 13% | | Private Companies | 40% | 61% | | Total Contract Revenues | $160,672 (in Thousands) | $159,174 (in Thousands) | - The U.S. Navy accounted for 23.7% of total contract revenues for the three months ended March 31, 2024, primarily from a $2.8 billion dry dock contract at Pearl Harbor, of which the Company's portion is $435.4 million[81][82] 5. Contracts in Progress Remaining performance obligations totaled $756.6 million, with the majority expected to be recognized within 12 months Net Contracts in Progress | Metric | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | | :--- | :--- | :--- | | Costs incurred on uncompleted contracts | $1,402,010 | $1,394,243 | | Estimated earnings | $161,886 | $176,904 | | Less: Billings to date | $(1,551,541) | $(1,553,704) | | Net Contracts in Progress | $12,355 | $17,443 | | Contract assets | $70,974 | $81,522 | | Contract liabilities | $(58,619) | $(64,079) | - Remaining performance obligations totaled approximately $756.6 million as of March 31, 2024, with $691.9 million (91%) expected to be recognized within the next 12 months[85] - Contract assets included approximately $13.7 million related to claims and unapproved change orders at March 31, 2024[84] 6. Property and Equipment The net book value of property and equipment decreased during the quarter, with most assets pledged as collateral Property and Equipment, Net | Metric | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | | :--- | :--- | :--- | | Total Property and Equipment, net | $85,473 | $87,834 | | Net book value of depreciable assets | $56,466 | $59,116 | | Accumulated depreciation | $(209,236) | $(206,243) | - Depreciation expense for the three months ended March 31, 2024, was $4.2 million, compared to $4.6 million in the prior year period[87] - Substantially all assets are pledged as collateral under the Company's Credit Agreement[87] 7. Fair Value The fair value of most financial instruments approximates their carrying value, with debt classified as Level 2 Assets Measured at Fair Value | Asset | Carrying Value (March 31, 2024) | Carrying Value (December 31, 2023) | Fair Value Measurement Level | | :--- | :--- | :--- | :--- | | Cash surrender value of life insurance policy | $1,356 (in Thousands) | $1,299 (in Thousands) | Level 2 | - The fair value of the Company's debt approximated its carrying value of $42.2 million at March 31, 2024, and $42.3 million at December 31, 2023, classified as Level 2 in the fair value hierarchy[95] 8. Accrued Liabilities Total accrued liabilities decreased significantly, mainly due to a reduction in accrued salaries, wages, and benefits Composition of Accrued Liabilities | Accrued Liability | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | Change | | :--- | :--- | :--- | :--- | | Accrued salaries, wages and benefits | $7,480 | $19,759 | -$12,279 | | Accrued liabilities expected to be covered by insurance | $5,478 | $7,478 | -$2,000 | | Total accrued liabilities | $22,548 | $37,074 | -$14,526 | 9. Debt Total debt remained stable, with recent amendments to the credit agreement modifying interest rates and covenants Debt Composition | Debt Type | March 31, 2024 (Total, in Thousands) | December 31, 2023 (Total, in Thousands) | | :--- | :--- | :--- | | Total current debt | $9,222 | $13,453 | | Total long-term debt | $28,299 | $23,740 | | Total debt (net of issuance costs) | $37,521 | $37,193 | - The Credit Agreement includes a $65.0 million asset-based revolving credit facility and a $38.0 million fixed asset term loan, maturing May 15, 2027 (extended by Amendment No. 3)[98][111] - Amendment No. 2 (Feb 2024) lowered the interest rate for the Revolver by 50 bps to SOFR + 5.0% and the Term Loan by 100 bps to SOFR + 7.0%[100] - Amendment No. 3 (April 2024) replaced the Consolidated EBITDA covenant with a Consolidated Fixed Charge Coverage Ratio (FCCR), lowered the FCCR threshold, reduced a prepayment, and extended the loan maturity. The Company was in compliance as of March 31, 2024[111][143] 10. Other Long-Term Liabilities Other long-term liabilities decreased slightly, primarily composed of liabilities from failed sale-leaseback arrangements Composition of Other Long-Term Liabilities | Liability Type | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | | :--- | :--- | :--- | | Sale-leaseback arrangement | $22,792 | $23,689 | | Deferred compensation | $1,190 | $1,293 | | Total other long-term liabilities | $24,355 | $25,320 | - The Company has recorded liabilities for failed sale-leaseback arrangements, continuing to depreciate the non-land assets and imputing an interest rate[118] 11. Income Taxes The company recorded an income tax benefit, resulting in a 5.5% effective tax rate due to a valuation allowance Income Tax Provision | Metric | Three months ended March 31, 2024 (in Thousands) | Three months ended March 31, 2023 (in Thousands) | | :--- | :--- | :--- | | Income tax (benefit) expense | $(352) | $640 | | Effective tax rate | 5.5% | (5.4)% | - The effective tax rate differs from the 21% federal statutory rate primarily due to a valuation allowance for current year activity, state income taxes, and non-deductibility of other permanent items[120] - A valuation allowance on net deferred tax assets remains appropriate due to the assessment of available positive and negative evidence regarding future taxable income[121][123] 12. Earnings Per Share Basic and diluted loss per share improved from the prior year, with all potential dilutive securities being antidilutive Loss Per Share Calculation | Metric | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--- | :--- | :--- | | Basic loss per share | $(0.19) | $(0.39) | | Diluted loss per share | $(0.19) | $(0.39) | | Weighted average shares outstanding (Basic & Diluted) | 32,553,750 | 32,180,274 | - All potentially dilutive securities were antidilutive and excluded from diluted loss per share computations due to the net loss reported in both periods[125] 13. Share-Based Compensation Share-based compensation expense decreased, with new grants issued and $5.3 million in unrecognized expense remaining Share-Based Compensation Expense | Metric | Three months ended March 31, 2024 (in Thousands) | Three months ended March 31, 2023 (in Thousands) | | :--- | :--- | :--- | | Share-based compensation expense | $358 | $524 | - In March 2024, the Company awarded 2,197 shares of restricted common stock (vesting over three years, fair value $6.83/share) and 109,503 shares of restricted common stock (vesting over three years, fair value $8.36/share) to executives[131] - The Company also granted 205,322 performance-based units in March 2024, vesting 100% if targets are met, based on return on invested capital and relative total shareholder return over a three-year period[132] - Total unrecognized compensation expense related to unvested stock was approximately $5.3 million at March 31, 2024, expected to be recognized over approximately 2.4 years[133] 14. Commitments and Contingencies The company is involved in various legal proceedings, which are not expected to have a material financial impact - The Company is involved in various legal and other proceedings, but management believes these will not materially affect financial condition, results of operations, or cash flows[134] - Management believes it has recorded adequate accrued liabilities and insurance coverage or has meritorious defenses for these claims and contingencies[134] 15. Segment Information The marine segment's revenue grew while its loss narrowed, whereas the concrete segment's revenue fell but turned profitable Segment Performance | Segment | Three months ended March 31, 2024 (in Thousands) | Three months ended March 31, 2023 (in Thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Marine Segment | | | | | Contract revenues | $106,325 | $79,298 | +$27,027 (+34.1%) | | Operating loss | $(4,866) | $(6,080) | +$1,214 (+20.0%) | | Total assets | $275,969 | $231,851 | +$44,118 | | Concrete Segment | | | | | Contract revenues | $54,347 | $79,876 | -$25,529 (-32.0%) | | Operating income (loss) | $1,742 | $(4,563) | +$6,305 | | Total assets | $87,615 | $112,336 | -$24,721 | - The marine segment's foreign revenues increased from $2.8 million in Q1 2023 to $9.6 million in Q1 2024, primarily from the Caribbean Basin[135] 16. Leases Total lease assets and liabilities increased, with total lease costs more than doubling compared to the prior-year quarter Lease Assets and Liabilities | Lease Metric | March 31, 2024 (in Thousands) | December 31, 2023 (in Thousands) | | :--- | :--- | :--- | | Operating lease right-of-use assets, net | $26,723 | $25,696 | | Financing lease right-of-use assets, net | $25,463 | $23,602 | | Total lease assets | $52,186 | $49,298 | | Total lease liabilities | $50,676 | $48,297 | Lease Cost Components | Lease Cost Component | Three Months Ended March 31, 2024 (in Thousands) | Three Months Ended March 31, 2023 (in Thousands) | | :--- | :--- | :--- | | Operating lease cost | $2,991 | $1,390 | | Short-term lease cost | $905 | $641 | | Interest on lease liabilities | $407 | $195 | | Amortization of right-of-use assets | $1,811 | $725 | | Total lease cost | $6,114 | $2,951 | - The weighted average remaining lease term for operating leases was 6.49 years (vs. 5.90 years) and for financing leases was 2.61 years (vs. 2.83 years) at March 31, 2024[138] 17. Related Party Transaction The company recognized $38.0 million in revenue from its subcontract work on the Pearl Harbor dry dock joint venture - The Company is a dedicated subcontractor in a $2.8 billion U.S. Navy contract for a dry dock at Pearl Harbor, with its portion totaling $435.4 million[141] - Revenue related to this joint venture subcontract was approximately $38.0 million for the three months ended March 31, 2024[142] 18. Subsequent Event A loan agreement amendment was executed post-quarter-end, modifying covenants and extending the maturity date - Amendment No. 3 (April 24, 2024) to the Loan Agreement replaced the Consolidated EBITDA covenant with a Consolidated Fixed Charge Coverage Ratio (FCCR), lowered the FCCR threshold, reduced a $15 million prepayment to $10 million, and extended the loan maturity to May 15, 2027[143] - The Company was in compliance with all financial covenants under the amended agreement as of March 31, 2024[143] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section analyzes financial results, segment performance, and liquidity, comparing the current quarter to the prior year CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS The report contains forward-looking statements that are subject to numerous risks and uncertainties - The report contains forward-looking statements, including projections and estimates, which are subject to significant business, economic, competitive, regulatory, and other risks and uncertainties[145][146] - Factors such as unforeseen productivity delays, government funding levels, contract modifications, and unforeseen site conditions can cause actual results to differ materially from forward-looking statements[146] Overview The company operates as a specialty construction firm in the marine and concrete sectors, with revenue recognized over time - Orion Group Holdings, Inc. is a specialty construction company serving infrastructure, industrial, and building sectors through its marine and concrete segments[151] - Contracts are primarily obtained through competitive bidding, and revenue is recognized over time based on the percentage of actual contract costs incurred[152][153] - Factors such as bid accuracy, commodity price increases, customer delays, weather, subcontractor performance, unforeseen site conditions, and material availability can impact contract performance and profitability[153] Consolidated Results of Operations The company reports a substantial year-over-year increase in backlog and improved gross profit despite a slight revenue increase - The Company is optimistic about its end-markets, with $3.5 billion in quoted bids outstanding at quarter-end, and over $101 million in new contract awards subsequent to March 31, 2024[157] - Backlog is not necessarily indicative of future results due to fluctuations in project scope and completion times, and delays in pending awards can impact backlog growth[158] Backlog Information Consolidated backlog increased substantially year-over-year, driven by the marine segment, despite a slight sequential dip Backlog by Segment | Segment | March 31, 2024 (in Millions) | December 31, 2023 (in Millions) | March 31, 2023 (in Millions) | | :--- | :--- | :--- | :--- | | Marine segment | $569.9 | $602.5 | $187.0 | | Concrete segment | $186.7 | $159.7 | $280.4 | | Consolidated | $756.6 | $762.2 | $467.4 | - The Company had $3.5 billion of quoted bids outstanding at quarter-end, with over $101 million awarded subsequent to March 31, 2024[157] Income Statement Comparisons Q1 2024 saw a significant gross profit margin expansion and a reduced net loss compared to the prior-year period Consolidated Results of Operations | Metric | Three months ended March 31, 2024 (in Thousands) | Three months ended March 31, 2023 (in Thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Contract revenues | $160,672 | $159,174 | +$1,498 (+0.9%) | | Gross profit | $15,538 | $5,840 | +$9,698 | | Gross profit margin | 9.7% | 3.7% | +6.0 pp | | Operating loss | $(3,124) | $(10,643) | +$7,519 | | Net loss | $(6,057) | $(12,595) | +$6,538 | | Selling, general and administrative expenses | $18,999 | $17,017 | +$1,982 (+11.6%) | - The increase in gross profit and margin was driven by improved pricing of projects in both segments, stemming from higher quality projects and improved execution, partially offset by lower margin and mix of dredging revenue[162] - SG&A expenses increased due to higher IT and business development spending, and increased legal costs related to pursuing project-related claims[163] Segment Results Segment analysis reveals revenue growth in marine and a shift to profitability in concrete despite lower revenue Marine Segment Marine segment revenue grew 34.1% due to the Pearl Harbor Project, and its operating loss narrowed by 20.0% Marine Segment Performance | Metric | Three months ended March 31, 2024 (in Thousands) | Three months ended March 31, 2023 (in Thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Contract revenues | $106,325 | $79,298 | +$27,027 (+34.1%) | | Operating loss | $(4,867) | $(6,080) | +$1,213 (+20.0%) | - The increase in marine segment revenue was primarily related to the Pearl Harbor Project[170] - The decrease in operating loss was primarily due to margin improvements from higher quality projects and improved execution, partially offset by lower margin and mix of dredging revenue[171] Concrete Segment Concrete segment revenue fell 32.0%, but the segment shifted to an operating income of $1.7 million from a prior-year loss Concrete Segment Performance | Metric | Three months ended March 31, 2024 (in Thousands) | Three months ended March 31, 2023 (in Thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Contract revenues | $54,347 | $79,876 | -$25,529 (-32.0%) | | Operating income (loss) | $1,742 | $(4,563) | +$6,305 | - The decrease in concrete segment revenue was due to disciplined bidding standards to win quality work at attractive margins[172] - The shift to operating income was primarily due to the reduction of lower margin work, winning higher margin jobs, and improved execution[173] Liquidity and Capital Resources The company's liquidity is supported by its credit facility, though operating cash flow was negative in the quarter - Working capital was $53.9 million at March 31, 2024, compared to $55.9 million at December 31, 2023[174] - The Company had unrestricted cash on hand of $4.6 million and borrowing availability of approximately $28.1 million under its revolving credit facility at March 31, 2024[174] - Liquidity assessment relies on estimates of future activity, compliance with debt covenants, and management of sales, costs, capital expenditures, asset sales, claims collection, and working capital[175] Cash Flow Net cash used in operating activities increased significantly due to unfavorable changes in net working capital Cash Flow Summary | Cash Flow Activity | Three months ended March 31, 2024 (in Thousands) | Three months ended March 31, 2023 (in Thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | $(22,825) | $(3,033) | -$19,792 | | Net cash used in investing activities | $(1,573) | $(1,300) | -$273 | | Net cash (used in) provided by financing activities | $(1,902) | $3,394 | -$5,296 | | Capital expenditures | $(1,853) | $(1,876) | +$23 | - The $25.8 million outflow from changes in net working capital was primarily driven by a $30.2 million decrease in net accounts receivable and accounts payable plus accrued liabilities[177] - Financing activities included $1.6 million in borrowings and repayments on the revolving credit line, $2.0 million in finance lease payments, and $0.3 million from stock option exercises[180] Sources of Capital The company's primary capital source is its $103.0 million Credit Agreement, which was recently amended - The Company's main capital source is a $103.0 million Credit Agreement with White Oak, consisting of a $65.0 million asset-based revolving credit line and a $38.0 million fixed asset term loan[181] - Amendment No. 3 (April 2024) modified financial covenants, lowered a prepayment, and extended the loan maturity to May 15, 2027[182] Bonding Capacity The company maintains a bonding capacity of at least $750 million, which is considered sufficient for its needs - The Company's bonding capacity was at least $750 million at March 31, 2024, with approximately $550 million of projects bonded[183] - The ability to obtain surety bonds depends on capitalization, working capital, past performance, and the overall surety market[183] Effect of Inflation Inflationary pressures on raw materials are managed by including anticipated cost increases in project bids - The Company is subject to inflation through increased costs of raw materials like fuel, concrete, and steel[184] - Due to the short-term duration of projects, anticipated cost increases are generally included in bid pricing[184] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The company faces market risks from commodity price volatility and interest rate fluctuations on its variable-rate debt Commodity price risk The company is exposed to price fluctuations for key materials like concrete, steel, and fuel - The Company is subject to commodity price fluctuations for concrete, steel products, and fuel[188] - The Company generally does not hedge against price increases, but the short-term duration of projects allows for anticipated cost increases to be included in bid pricing[188] Interest rate risk A 100 basis-point increase in SOFR would raise annual interest expense by approximately $0.4 million - At March 31, 2024, the Company had $38.0 million in outstanding borrowings under its Credit Agreement, with a weighted average interest rate of 12.44%[189] - A 100 basis-point increase in SOFR would increase the Company's annual interest expense by approximately $0.4 million[189] ITEM 4. CONTROLS AND PROCEDURES Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls Evaluation of Disclosure Controls and Procedures The company's disclosure controls and procedures were evaluated by management and deemed effective as of the quarter-end - The Company's disclosure controls and procedures were evaluated and deemed effective as of March 31, 2024[190] Changes in Internal Control over Financial Reporting No material changes were made to the company's internal control over financial reporting during the first quarter - No material changes to internal control over financial reporting occurred during the quarter ended March 31, 2024[191] PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Information regarding legal proceedings is incorporated by reference from the financial statement notes - Information on legal proceedings is referenced from Note 14 of the financial statements[192] ITEM 1A. RISK FACTORS The company reports no material changes to the risk factors disclosed in its 2023 Form 10-K - No material changes to risk factors were reported since the 2023 Form 10-K[193] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS No unregistered sales or issuer purchases of equity securities occurred during the first quarter of 2024 - No sales or issuer purchases of equity securities occurred in the period ended March 31, 2024[194] ITEM 3. DEFAULTS UPON SENIOR SECURITIES The company reported no defaults upon its senior securities during the period - No defaults upon senior securities were reported[196] ITEM 4. MINE SAFETY DISCLOSURES This section is not applicable as the company does not engage in mining operations - Mine safety disclosures are not applicable to the Company[197] ITEM 5. OTHER INFORMATION This section discloses a post-quarter-end amendment to the company's primary credit agreement Amendment No. 3 to the Credit Agreement The credit agreement was amended to modify covenants, reduce a prepayment, and extend the maturity date - Amendment No. 3 (April 24, 2024) to the Loan Agreement replaced the Consolidated EBITDA covenant with a Consolidated Fixed Charge Coverage Ratio (FCCR), lowered the FCCR threshold, reduced a $15 million prepayment to $10 million, and extended the loan maturity to May 15, 2027[198] - The Company was in compliance with all financial covenants under the amended agreement as of March 31, 2024[198] ITEM 6. EXHIBITS This section lists all exhibits filed with the Form 10-Q, including agreements and organizational documents - The exhibits include organizational documents, employment agreements, long-term incentive plan forms, and amendments to the Loan Agreement[200][201] SIGNATURES The report is duly signed by the company's Chief Executive Officer and Chief Financial Officer - The report was signed by the President and CEO, Travis J. Boone, and the EVP and CFO, Scott Thanisch, on April 26, 2024[205]