# Rogers Corp: Form 10-Q for the period ended Mar 31, 2024

- Company: [Rogers Corp](/companies/rog.md) (CIK 84748)
- Form: 10-Q
- Filed: 2024-04-26
- Accepted by EDGAR: Apr 25, 2024, 18:45 ET
- Period: 2024-03-31
- Accession: 0000084748-24-000028
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/84748/000008474824000028/rog-20240331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/84748/000008474824000028/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-01-01 to 2024-03-31 | $213.4m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2024-01-01 to 2024-03-31 | $145.2m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2024-01-01 to 2024-03-31 | $68.2m | us-gaap:GrossProfit |
| Research and development | 3 months, 2024-01-01 to 2024-03-31 | $8.9m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2024-01-01 to 2024-03-31 | $47.5m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2024-01-01 to 2024-03-31 | $11.7m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-01-01 to 2024-03-31 | $3.8m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-01-01 to 2024-03-31 | $7.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-01-01 to 2024-03-31 | $0.42 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-01-01 to 2024-03-31 | $0.42 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-01-01 to 2024-03-31 | 18,700,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-01-01 to 2024-03-31 | $28.1m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-01-01 to 2024-03-31 | $9.4m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Share repurchases | 3 months, 2024-01-01 to 2024-03-31 | $300.0k | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2024-03-31 | $116.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-03-31 | $501.4m | us-gaap:AssetsCurrent |
| Total assets | at 2024-03-31 | $1.49bn | us-gaap:Assets |
| Current liabilities | at 2024-03-31 | $117.0m | us-gaap:LiabilitiesCurrent |
| Long-term debt | at 2024-03-31 | $0 | us-gaap:LongTermDebtNoncurrent |
| Shareholders' equity | at 2024-03-31 | $1.26bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 27,610 characters.

As used herein, the “Company,” “Rogers,” “we,” “us,” “our” and similar terms include Rogers Corporation and its subsidiaries, unless the context indicates otherwise.

### Forward-Looking Statements

This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. Such statements are generally accompanied by words such as “anticipate,” “assume,” “believe,” “could,” “estimate,” “expect,” “foresee,” “goal,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “seek,” “target” or similar expressions that convey uncertainty as to future events or outcomes. Forward-looking statements are based on assumptions and beliefs that we believe to be reasonable; however, assumed facts almost always vary from actual results, and the differences between assumed facts and actual results could be material depending upon the circumstances. Where we express an expectation or belief as to future results, that expectation or belief is expressed in good faith and based on assumptions believed to have a reasonable basis. We cannot assure you, however, that the stated expectation or belief will occur or be achieved or accomplished. Among the factors that could cause our results to differ materially from those indicated by forward-looking statements are risks and uncertainties inherent in our business including, without limitation:

- failure to capitalize on, volatility within, or other adverse changes with respect to our growth drivers, such as delays in adoption or implementation of new technologies;
- failure to successfully execute on our long-term growth strategy as a standalone company;
- uncertain business, economic and political conditions in the U.S. and abroad, particularly in China, Germany, Belgium, England, South Korea and Hungary where we maintain significant manufacturing, sales or administrative operations;
- the trade policy dynamics between the U.S. and China reflected in trade agreement negotiations, the imposition of tariffs and other trade restrictions, as well as the potential for U.S.-China supply chain decoupling;
- fluctuations in foreign currency exchange rates;
- our ability to develop innovative products and the extent to which they are incorporated into end-user products and systems;
- the extent to which end-user products and systems incorporating our products achieve commercial success;
- the ability and willingness of our sole or limited source suppliers to deliver certain key raw materials, including commodities, to us in a timely and cost-effective manner;
- intense global competition affecting both our existing products and products currently under development;
- business interruptions due to catastrophes or other similar events, such as natural disasters, war, terrorism or public health crises;
- the impact of sanctions, export controls and other foreign asset or investment restriction;
- failure to realize, or delays in the realization of, anticipated benefits of acquisitions and divestitures due to, among other things, the existence of unknown liabilities or difficulty integrating acquired businesses;
- our ability to attract and retain management and skilled technical personnel;
- our ability to protect our proprietary technology from infringement by third parties and/or allegations that our technology infringes third party rights;
- changes in effective tax rates or tax laws and regulations in the jurisdictions in which we operate;
- failure to comply with financial and restrictive covenants in our credit agreement or restrictions on our operational and financial flexibility due to such covenants;
- the outcome of ongoing and future litigation, including our asbestos-related product liability litigation;
- changes in environmental laws and regulations applicable to our business; and
- disruptions in, or breaches of, our information technology systems.

Our forward-looking statements are expressly qualified by these cautionary statements, which you should consider carefully, along with the risks discussed in this section and elsewhere in this report, including under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 (the Annual Report) and our other reports filed with the SEC, any of which could cause actual results to differ materially from historical results or anticipated results. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law.

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and the related notes that appear elsewhere in this Form 10-Q along with our audited consolidated financial statements and the related notes thereto in our Annual Report.

### Company Overview and Strategy

We design, develop, manufacture and sell high-performance and high-reliability engineered materials and components to meet our customers’ demanding challenges. We operate two strategic operating segments: AES and EMS. Our remaining operations, which represent non-core businesses, are reported in our Other operating segment. We are headquartered in Chandler, Arizona.

Our growth and profitability strategy is based upon the following principles: (1) market-driven organization, (2) innovation leadership, (3) synergistic mergers and acquisitions, and (4) operational excellence. Our priorities in executing this strategy are focused on driving near-term improvements to profitability and improving the growth outlook for the Company over the next several years by further strengthening our focus on commercial activities, expanding capacity to meet customer demand and driving innovation.

As a market-driven organization, we are focused on capitalizing on growth opportunities in the increasing electrification of vehicles, including EV/HEV, and increasing use of ADAS in the automotive industry, the advancement of communication systems in aerospace and defense, the growth of 5G smartphones in the portable electronics industry, and in renewable energy. In addition to our focus on these markets, we sell into a variety of other markets including general industrial, wireless infrastructure and mass transit.

Our growth strategy is based on addressing trends in these markets and applying our repeatable customer engagement process. Our sales engineers and technical service employees work closely with our customers to understand their complex challenges. They then leverage our innovation and technology capabilities and deep applications expertise to provide unique solutions to customers’ challenges. In addition to these capabilities, our strategy for success as a manufacturer of engineered materials and components is also built on our reputation for high performance and reliability solutions, trusted customer relationships, a broad product portfolio and custom design capabilities. Through this strategy we expect to be able to drive further commercial wins, which provide the potential for higher growth in the future. We have also expanded our capabilities through organic investment and acquisitions and strive to ensure high quality solutions for our customers.

Our operational excellence efforts are focused on driving significant near-term enhancements to our profitability and ongoing cost structure improvements. These efforts include focusing on improving yields, throughput, procurement capabilities and manufacturing processes and selectively adding strategic new hires to achieve better performance. We have also taken specific cost improvement actions in the fourth quarter of 2022 through the end of 2023 that have benefited subsequent quarters. These actions include optimizing our manufacturing footprint, divesting non-core product lines and reductions to manufacturing and corporate employees. We continue to review and re-align our manufacturing and engineering footprint in an effort to maintain a leading competitive position globally and to support our customers’ growth initiatives.

We seek to enhance our operational and financial performance by investing in research and development, manufacturing and materials efficiencies, and new product initiatives that respond to the needs of our customers. We strive to evaluate operational and strategic alternatives to improve our business structure and align our business with the changing needs of our customers and major industry trends affecting our business.

If we are able to successfully execute on our strategy, we see an opportunity, over the next several years, to return to historical levels of profitability and meaningfully improve revenues from 2023 levels, led by organic growth and complemented by targeted acquisitions. This outlook is supported by our participation in a number of growth markets and by our strong competitive positions in these markets. The fastest growing market opportunity is expected to be EV/HEV where third-party analysis projects that the market will increase at a compound annual growth rate of between 15% and 20% over the next several years. Within the EV/HEV market, we believe our advanced battery cell pads, ceramic substrates and power interconnects provide multiple content opportunities to capitalize on this growth. Across these areas we have secured a number of design wins and have a strong opportunity pipeline, which provides confidence in our growth outlook. Other markets with a good growth trajectory include ADAS, aerospace and defense, portable electronics and renewable energy. Each of these markets is expected to contribute to our growth.

### Executive Summary

The following key highlights and factors should be considered when reviewing our results of operations, financial position and liquidity:

- In the first quarter of 2024 as compared to the first quarter of 2023, our net sales decreased approximately 12.5% to $213.4 million, our gross margin decreased approximately 70 basis points to 32.0% from 32.7%, and we had an operating income of 5.5% compared to an operating loss of 0.1%, an increase of approximately 560 basis points.
- We made $30.0 million of discretionary principal payments on our revolving credit facility in the first quarter of 2024.

### Results of Operations

The following table sets forth, for the periods indicated, selected operations data expressed as a percentage of net sales:

|  | Three Months Ended March 31, 2024 | March 31, 2023 |
| --- | ---: | ---: |
| Net sales | **100.0%** | 100.0% |
| Gross margin | **32.0%** | 32.7% |
| Selling, general and administrative expenses | **22.3%** | 24.6% |
| Research and development expenses | **4.2%** | 3.9% |
| Restructuring and impairment charges | **—%** | 4.3% |
| Other operating (income) expense, net | **—%** | —% |
| Operating income (loss) | **5.5%** | (0.1)% |
| Equity income in unconsolidated joint ventures | **0.1%** | —% |
| Other income (expense), net | **0.2%** | —% |
| Interest expense, net | **(0.4)%** | (1.4)% |
| Income (loss) before income taxes | **5.4%** | (1.5)% |
| Income tax expense (benefit) | **1.8%** | (0.1)% |
| Net income (loss) | **3.7%** | (1.4)% |

*Net Sales and Gross Margin*

*(Dollars in millions)*

|  | Three Months Ended March 31, 2024 | March 31, 2023 |
| --- | ---: | ---: |
| Net sales | **$213.4** | $243.8 |
| Gross margin | **$68.2** | $79.7 |
| Percentage of net sales | **32.0%** | 32.7% |

Net sales decreased by 12.5% in the first quarter of 2024 compared to the first quarter of 2023. Our AES and EMS operating segments had net sales decreases of 10.2% and 16.1%, respectively. The decrease in net sales was primarily due to lower net sales in the EV/HEV, ADAS and renewable energy markets in our AES operating segment and lower net sales in the general industrial and consumer markets in our EMS operating segment. The decrease was partially offset by higher net sales in the wireless infrastructure and aerospace and defense markets in our AES operating segment and higher net sales in the EV/HEV and aerospace and defense markets in our EMS operating segment. We experienced lower EV/HEV net sales in our AES operating segment as customers continued to manage inventory levels and adjusted to softer end market demand. Foreign currency exchange rate changes year-over-year had an immaterial impact on net sales on a quarter-to-date basis.

Gross margin as a percentage of net sales decreased approximately 70 basis points to 32.0% in the first quarter of 2024 compared to 32.7% in the first quarter of 2023. Gross margin in the first quarter of 2024 declined due to unfavorable impacts from lower volume and unfavorable mix in our AES and EMS operating segments, as well as unfavorable factory utilization in our AES operating segment. This was partially offset by lower raw material costs, favorable yield performance and lower inventory reserves provisions in our AES and EMS operating segments, as well as favorable impacts in factory utilization from our factory optimization efforts in our EMS operating segment.

*Selling, General and Administrative Expenses*

*(Dollars in millions)*

|  | Three Months Ended March 31, 2024 | March 31, 2023 |
| --- | ---: | ---: |
| Selling, general and administrative expenses | **$47.5** | $60.1 |
| Percentage of net sales | **22.3%** | 24.6% |

SG&A expenses decreased 21.0% in the first quarter of 2024 from the first quarter of 2023, primarily due to a $9.9 million decrease in professional services expense, a $0.9 million decrease in total compensation and benefits and a $0.7 million decrease in recruiting, relocation and training expenses. The decrease in professional services expense was primarily attributable to the non-recurrence of the $7.6 million of non-routine shareholder advisory costs.

*Research and Development Expenses*

*(Dollars in millions)*

|  | Three Months Ended March 31, 2024 | March 31, 2023 |
| --- | ---: | ---: |
| Research and development expenses | **$8.9** | $9.6 |
| Percentage of net sales | **4.2%** | 3.9% |

R&D expenses decreased 7.3% in the first quarter of 2024 from the first quarter of 2023 due to a $0.6 million decrease in professional services expense and a $0.4 million decrease in total compensation and benefits expense, partially offset by a $0.2 million increase in trial costs for alternative raw materials.

*Restructuring and Impairment Charges and Other Operating (Income) Expense, Net*

*(Dollars in millions)*

|  | Three Months Ended March 31, 2024 | March 31, 2023 |
| --- | ---: | ---: |
| Restructuring and impairment charges | **$0.1** | $10.5 |
| Other operating (income) expense, net | **$—** | $(0.2) |

We incurred restructuring charges and related expenses in 2023 associated with the announced reduction of our global workforce along with certain facility consolidation efforts, which were substantially completed as of December 31, 2023. The plans significantly reduced our manufacturing costs and operating expenses. We recognized restructuring charges and related expenses pertaining to these restructuring projects of $10.5 million for the three months ended March 31, 2023. For additional information, refer to “Note 14 – Supplemental Financial Information” to the condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q.

With respect to other operating (income) expense, net, we recognized no income and income of $0.2 million in the first quarter of 2024 and 2023, respectively. The impact in the first quarter of 2023 primarily consisted of insurance recoveries, partially offset by professional service costs, from the fire at our UTIS manufacturing facility in Ansan, South Korea. For additional information, refer to “Note 14 – Supplemental Financial Information” to the condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q.

*Equity Income in Unconsolidated Joint Ventures*

*(Dollars in millions)*

|  | Three Months Ended March 31, 2024 | March 31, 2023 |
| --- | ---: | ---: |
| Equity income in unconsolidated joint ventures | **$0.3** | $0.1 |

26

As of March 31, 2024, we had two unconsolidated joint ventures, each 50% owned: RIC and RIS. Equity income in those unconsolidated joint ventures increased $0.2 million in the first quarter of 2024 from the first quarter of 2023. On a quarter-to-date basis, the increase was due to higher net sales and lower SG&A costs for RIC. The higher net sales for RIC was primarily driven by the portable electronics market in Asia.

*Other Income (Expense), Net*

*(Dollars in millions)*

|  | Three Months Ended March 31, 2024 | March 31, 2023 |
| --- | ---: | ---: |
| Other income (expense), net | **$0.4** | $0.1 |

Other income (expense), net increased to income of $0.4 million in the first quarter of 2024 from income of $0.1 million in the first quarter of 2023. The increase was due to favorable year-over-year change in impacts from our foreign currency transactions, partially offset by unfavorable year-over-year change in impacts from our foreign currency derivatives.

*Interest Expense, Net*

*(Dollars in millions)*

|  | Three Months Ended March 31, 2024 | March 31, 2023 |
| --- | ---: | ---: |
| Interest expense, net | **$(0.8)** | $(3.5) |

Interest expense, net, decreased by $2.7 million in the first quarter of 2024 from the first quarter of 2023. The decrease on a year-over-year quarter-to-date basis was primarily due to a lower weighted-average outstanding borrowings under our revolving credit facility.

*Income Taxes*

*(Dollars in millions)*

|  | Three Months Ended March 31, 2024 | March 31, 2023 |
| --- | ---: | ---: |
| Income tax expense (benefit) | **$3.8** | $(0.1) |
| Effective tax rate | **32.8%** | 3.5% |

The below discussion of the effective tax rate for the periods presented in the consolidated statements of operations is in comparison to the 21% U.S. statutory federal income tax rate.

Our effective tax rate was 32.8% in the first quarter of 2024. During the first quarter of 2024, our effective tax rate was unfavorably impacted primarily by the write-off of deferred tax assets related to stock compensation.

During the first quarter of 2023, our effective tax rate was 3.5%. During the first quarter of 2023, our effective tax rate was unfavorably impacted primarily by an increase in the valuation allowance attributable to loss jurisdictions in which no benefit is anticipated to be realized.

### Operating Segment Net Sales and Operating Income

### Advanced Electronics Solutions

*(Dollars in millions)*

|  | Three Months Ended March 31, 2024 | March 31, 2023 |
| --- | ---: | ---: |
| Net sales | **$122.1** | $135.9 |
| Operating income (loss) | **$4.4** | $(5.5) |

AES net sales decreased by 10.2% in the first quarter of 2024 compared to the first quarter of 2023. The decrease in net sales over the first quarter of 2023 was primarily driven by lower net sales in the EV/HEV, ADAS and renewable energy markets, partially offset by higher net sales in the wireless infrastructure and aerospace and defense markets. We experienced lower EV/HEV net sales as customers continued to manage inventory levels and adjusted to softer end market demand. Foreign currency exchange rate changes year-over-year had an immaterial impact on net sales on a quarter-to-date basis.

We recognized operating income of $4.4 million in the first quarter of 2024 compared to an operating loss of $5.5 million in the first quarter of 2023. The increase in operating income was due to lower raw material costs, favorable yield performance and lower inventory reserves provisions, partially offset by the unfavorable impacts from lower volume and unfavorable mix, as well as unfavorable factory utilization. As a percentage of net sales, the operating income in the first quarter of 2024 was 3.6% compared to an operating loss of 4.1% reported in the first quarter of 2023.

### Elastomeric Material Solutions

*(Dollars in millions)*

|  | Three Months Ended March 31, 2024 | March 31, 2023 |
| --- | ---: | ---: |
| Net sales | **$85.7** | $102.2 |
| Operating income (loss) | **$5.3** | $3.2 |

EMS net sales decreased by 16.1% in the first quarter of 2024 compared to the first quarter of 2023. The decrease in net sales over the first quarter of 2023 was primarily driven by lower net sales in the general industrial and consumer markets, partially offset by higher net sales in the EV/HEV and aerospace and defense markets. Foreign currency exchange rate changes year-over-year had an immaterial impact on net sales on a quarter-to-date basis.

We recognized operating income of $5.3 million in the first quarter of 2024 compared to operating income of $3.2 million in the first quarter of 2023. The increase in operating income was due to lower raw material costs, favorable yield performance and lower inventory reserves provisions, as well as favorable impacts in factory utilization from our factory optimization efforts, partially offset by the unfavorable impacts from lower volume and unfavorable mix. As a percentage of net sales, operating income in the first quarter of 2024 was 6.2% compared to an operating income of 3.1% reported in the first quarter of 2023.

### Other

*(Dollars in millions)*

|  | Three Months Ended March 31, 2024 | March 31, 2023 |
| --- | ---: | ---: |
| Net sales | **$5.6** | $5.7 |
| Operating income (loss) | **$2.0** | $2.0 |

Net sales in this segment decreased by 1.8% in the first quarter of 2024 from the first quarter of 2023. Operating income was flat in the first quarter of 2024 compared to the first quarter of 2023. Operating income was primarily driven by unfavorable factory utilization offset by higher volume. As a percentage of net sales, the operating income in the first quarter of 2024 was 35.7% compared to an operating income of 35.1% reported in the first quarter of 2023.

### Liquidity, Capital Resources and Financial Position

We believe that our existing sources of liquidity and cash flows that we expect to generate from our operations, together with our available credit facilities, will be sufficient to fund our operations, currently planned capital expenditures, research and development efforts and our debt service commitments, for at least the next 12 months. We regularly review and evaluate the adequacy of our cash flows, borrowing facilities and banking relationships in an effort to ensure that we have the appropriate access to cash to fund both our near-term operating needs and our long-term strategic initiatives.

The following table illustrates the location of our cash and cash equivalents by our three major geographic areas:

*(Dollars in millions)*

|  | March 31, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| United States | **$52.2** | $60.0 |
| Europe | **34.5** | 37.6 |
| Asia | **30.2** | 34.1 |
| **Total cash and cash equivalents** | **$116.9** | $131.7 |

Approximately $64.7 million of our cash and cash equivalents were held by non-U.S. subsidiaries as of March 31, 2024. We did not make any changes in the three months ended March 31, 2024 to our position on the permanent reinvestment of our earnings from foreign operations. With the exception of certain of our Chinese subsidiaries, where a substantial portion of our Asia cash and cash equivalents are held, we continue to assert that historical foreign earnings are indefinitely reinvested.

*(Dollars in millions)*

| Key Financial Position Accounts: | March 31, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Cash and cash equivalents | **$116.9** | $131.7 |
| Accounts receivable, net | **$159.2** | $161.9 |
| Inventories, net | **$150.9** | $153.5 |
| Borrowings under revolving credit facility | **$—** | $30.0 |

28

Changes in key financial position accounts and other significant changes in our statements of financial position from December 31, 2023 to March 31, 2024 were as follows:

- Cash and cash equivalents were $116.9 million as compared to $131.7 million as of December 31, 2023, a decrease of $14.8 million, or 11.2%. This decrease was primarily due to $30.0 million in discretionary principal payments on our revolving credit facility, $9.4 million in capital expenditures and $1.1 million in tax payments related to net share settlement of equity awards, partially offset by cash flows provided by operations.
- Accounts receivable, net decreased 1.7% to $159.2 million as of March 31, 2024 from $161.9 million as of December 31, 2023. The decrease from year-end was primarily due to a $4.1 million receipt of previously recognized UTIS fire insurance receivables for our business interruption claims, a $1.0 million decrease in our income taxes receivable, partially offset by increases in our receivables due to a higher days sales outstanding at the end of March 31, 2024 compared to December 31, 2023.
- Inventories, net decreased 1.7% to $150.9 million as of March 31, 2024, from $153.5 million as of December 31, 2023, primarily driven by decrease in work-in-process and finished good levels partially offset by higher raw materials.
- Borrowings under revolving credit facility were nil as of March 31, 2024 compared to $30.0 million as of December 31, 2023. This decrease was due to $30.0 million in discretionary principal payments on our revolving credit facility made in the first three months of 2024. For additional information regarding this facility and the Fifth Amended Credit Agreement, refer to “Note 9 – Debt” to the condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q.

*(Dollars in millions)*

| Key Cash Flow Measures: | Three Months Ended March 31, 2024 | March 31, 2023 |
| --- | ---: | ---: |
| Net cash provided by operating activities | **$28.1** | $1.8 |
| Net cash used in investing activities | **$(9.4)** | $(15.4) |
| Net cash used in financing activities | **$(31.5)** | $(29.4) |

In 2024, we expect capital spending to be in the range of approximately $60.0 million to $70.0 million. We plan to fund our capital spending in 2024 with cash from operations and cash on-hand, as well as our existing revolving credit facility, if necessary.

### Restrictions on Payment of Dividends

The Fifth Amended Credit Agreement generally permits us to pay cash dividends to our shareholders, provided that (i) no default or event of default has occurred and is continuing or would result from the dividend payment and (ii) our total net leverage ratio does not exceed 2.75 to 1.00. If our total net leverage ratio exceeds 2.75 to 1.00, we may nonetheless make up to $20.0 million in restricted payments, including cash dividends, during the fiscal year, provided that no default or event of default has occurred and is continuing or would result from the payments. Our total net leverage ratio did not exceed 2.75 to 1.00 as of March 31, 2024.

### Contingencies

During the first quarter of 2024, we did not become aware of any material developments related to environmental matters disclosed in our Annual Report, our asbestos litigation or other material contingencies previously disclosed or incur any material costs or capital expenditures related to such matters. Refer to “Note 10 – Commitments and Contingencies” to the condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q for further discussion of these contingencies.

### Critical Accounting Policies

There were no material changes in our critical accounting policies during the first quarter of 2024.

## Market risk

As filed, 260 characters.

There have been no material changes in our exposure to market risk during the first quarter of 2024. For discussion of our exposure to market risk, refer to “Item 7A. *Quantitative and Qualitative Disclosures About Market Risk”* contained in our Annual Report.

## Controls and procedures

As filed, 1,503 characters.

### EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We conducted, with the participation of our Chief Executive Officer and Chief Financial Officer, an evaluation of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d- 15(e) under the Exchange Act, as of March 31, 2024. Our disclosure controls and procedures are designed (i) to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of March 31, 2024.

### CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in the Company’s internal control over financial reporting during the first quarter of the fiscal year ended December 31, 2024, that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting, as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act.

Filed Apr 26, 2024.
Source: SEC EDGAR, the filing index for accession 0000084748-24-000028. Last ingested by Listed: Oct 27, 2026, 16:07 ET. No prices; not investment advice.