Sterling Infrastructure, Inc.: Form 10-Q for the period ended Mar 31, 2025

Cautionary Statement Regarding Forward-Looking Statements

This quarterly report on Form 10-Q (“Report”), including the documents incorporated herein by reference, contains statements that are, or may be considered to be, “forward-looking statements” regarding the Company which represent our expectations and beliefs concerning future events. These forward-looking statements are intended to be covered by the safe harbor for certain forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements included or incorporated by reference herein relate to matters that are not based on historical facts and reflect our current expectations as of the date of this Report, regarding items such as: our industry and business outlook, including relating to federal, state and municipal funding for projects, the residential home building market and demand from our customers; business strategy, including the integration of recent acquisitions and the potential for additional future acquisitions; expectations and estimates relating to our backlog; expectations concerning our market position; future operations; margins; profitability; capital expenditures; liquidity and capital resources; and other financial and operating information. Forward-looking statements may use or contain words such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “intend,” “likely,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “strategy,” “will,” “would” and similar terms and phrases.

Actual events, results and outcomes may differ materially from those anticipated, projected or assumed in the forward-looking statements due to a variety of factors. Although it is not possible to identify all of these factors, they include, among others, the following:

• factors that affect demand for our services or demand in end markets, including economic recessions or volatile economic cycles;
• cost escalations associated with our contracts, due to changes in availability, proximity and cost of materials such as steel, cement, concrete, aggregates, oil, fuel and other construction materials, changes in U.S. trade policies and retaliatory responses from other countries, and cost escalations associated with subcontractors and labor;
• any action or inaction of suppliers, subcontractors, design engineers, joint venture partners, customers, competitors, banks, surety companies and others which is beyond our control, including the failure of suppliers, subcontractors and joint venture partners to perform their obligations;
• factors that affect the accuracy of estimates inherent in the bidding for contracts, estimates of backlog, and “over time” revenue recognition accounting policies, including onsite conditions that differ materially from those assumed in the original bid, contract modifications, mechanical problems with machinery or equipment and effects of other risks referenced below;
• changes in costs to lease, acquire or maintain our equipment;
• changes in general economic conditions, including reductions in federal, state and local government funding for projects, changes in those governments’ budgets, practices, laws and regulations and interest rate fluctuations and other adverse economic factors beyond our control in our geographic markets;
• the presence of competitors with greater financial resources or lower margin requirements than ours, and the impact of competitive bidders on our ability to obtain new backlog at reasonable margins acceptable to us;
• design/build contracts which subject us to the risk of design errors and omissions;
• our ability to obtain bonding or post letters of credit;
• adverse weather conditions;
• potential disruptions, failures or security breaches of the information technology systems on which we rely to conduct our business;
• potential risks and uncertainties relating to major public health crises;
• our dependence on a limited number of significant customers;
• our ability to attract and retain key personnel;
• increased unionization of our workforce or labor costs and any work stoppages or slowdowns;
• federal, state and local environmental laws and regulations where non-compliance can result in penalties and/or termination of contracts as well as civil and criminal liability;
• citations issued by any governmental authority, including the Occupational Safety and Health Administration;
• our ability to qualify as an eligible bidder under government contract criteria;
• delays or difficulties related to the completion of our projects, including additional costs, reductions in revenues or the payment of liquidated damages, or delays or difficulties related to obtaining required governmental permits and approvals;
• any prolonged shutdown of the government;
• our ability to successfully identify, finance, complete and integrate recent and potential acquisitions;
• our ability to raise additional capital in the future on favorable terms or at all;
• our ability to generate cash flows sufficient to fund our financial commitments and objectives;
• our ability to meet the terms and conditions of our debt obligations and covenants; and
• the other risks discussed in more detail in the Company’s annual report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”) under “Part I, Item 1A. Risk Factors,” other portions of this Report, or our other filings with the Securities and Exchange Commission (the “SEC”).

In reading this Report, you should consider these factors carefully in evaluating any forward-looking statements and you are cautioned not to place undue reliance on any forward-looking statements. Forward-looking statements reflect our current expectations as of the date of this Report regarding future events, results or outcomes. These expectations may or may not be realized. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. Additional factors or risks that we currently deem immaterial, that are not presently known to us or that arise in the future could also cause our actual results to differ materially from our expected results. Given these uncertainties, investors are cautioned that many of the assumptions upon which our forward-looking statements are based are likely to change after the date the forward-looking statements are made. Further, we may make changes to our business plans that could affect our results. Although we believe that our plans, intentions and expectations reflected in, or suggested by, the forward-looking statements that we make in this Report are reasonable, we can provide no assurance that they will be achieved.

The forward-looking statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements for any reason, whether as a result of new information, future events or developments, changed circumstances, or otherwise, and notwithstanding any changes in our assumptions, changes in business plans, actual experience or other changes.

OVERVIEW

*General—*Sterling operates through a variety of subsidiaries within three segments specializing in E-Infrastructure, Transportation and Building Solutions in the United States, primarily across the Southern, Northeastern, Mid-Atlantic and Rocky Mountain regions and the Pacific Islands. E-Infrastructure Solutions provides advanced, large-scale site development services for manufacturing, data centers, distribution centers, warehousing, power generation and more. Transportation Solutions includes infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail and storm drainage systems. Building Solutions includes residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs, other concrete work, plumbing services, and surveys for new single-family residential builds. From strategy to operations, we are committed to sustainability by operating responsibly to safeguard and improve society’s quality of life. Caring for our people and our communities, our customers and our investors – that is The Sterling Way.

SIGNIFICANT TRANSACTIONS

*RHB Deconsolidation—*Since 2012, the Company has held a 50% ownership interest in Road and Highway Builders, LLC (“RHB”), with Rich Buenting holding the remaining 50% ownership interest. Historically, the Company fully consolidated the entity as a result of its exercise of control of the entity. On December 31, 2024, the parties executed an amendment to the RHB operating agreement to ensure the continuation of this mutually beneficial relationship while addressing the evolving needs and interest of both parties.

Under GAAP, this contractual change required Sterling to no longer consolidate RHB’s results with its own and to use equity method accounting with respect to Sterling’s interest in the entity. Beginning January 1, 2025, the Company reports its portion of RHB’s income as a single line item (“Other operating income (expense), net”) in the Consolidated Statements of Operations and reports its interest in RHB at March 31, 2025, and thereafter, as a single line item (“Investment in unconsolidated subsidiary”) in the Consolidated Balance Sheets. RHB’s revenue is no longer included in Sterling’s consolidated revenue in 2025 and Sterling’s consolidated backlog figures as of December 31, 2024, and thereafter, do not include RHB’s backlog.

*Drake Acquisition—*During the first quarter of 2025, Sterling acquired Drake Concrete, LLC (“Drake”) (the “Drake Acquisition”). Drake provides concrete slabs for residential home builders in the Dallas-Fort Worth market. The acquisition strengthens Sterling’s geographic footprint within the DFW metroplex and expands and deepens the customer base, given limited customer overlap with Tealstone. The purchase price was $25 million in cash plus a four year earn-out opportunity. The results of Drake are included in our Building Solutions segment.

MARKET OUTLOOK AND TRENDS

We see favorable opportunities for long-term growth across each of our business segments. We remain focused on our strategic objectives, which include: 1) growth in our E-Infrastructure Solutions segment, with particular focus on large, high-value projects; 2) risk reduction through a continued shift in our Transportation Solutions business away from low-bid heavy highway work, and toward alternative delivery and design-build projects; 3) continuing to grow market share and geographic presence in Building Solutions; and 4) improving our margins in each of our segments.

*E-Infrastructure Solutions—*Our E-Infrastructure Solutions business is driven by our customers’ investments in the development of data centers, advanced manufacturing centers, e-commerce distribution centers and warehouses. We foresee significant growth opportunities tied to the implementation of multi-year capital deployment plans by data center customers, including hyperscalers, colocation providers and others. These investments are driven by the need to support the increasing use of cloud computing applications, increasing adoption and complexity of artificial intelligence applications and digital transformation across industries. Additionally, we continue to see significant opportunity related to the construction of manufacturing capacity in the U.S., including semiconductor fabrication. Following a decline in activity that began in 2023, awards in the e-commerce distribution sector began to strengthen in late 2024 and early 2025. Small warehouse activity, which began to decline in 2023 and remained soft in 2024, is beginning to exhibit signs of recovery.

*Transportation Solutions—*Our Transportation Solutions business is primarily driven by federal, state and municipal funding. Federal funds, on average, provide 50% of annual State Department of Transportation capital outlays for highway and bridge projects. We benefit from a number of federal, state and local infrastructure investment programs. At the state and local level, the November 2020 elections saw strong support for transportation initiatives with the passage of many ballot measures that secured, and in some cases increased, funding. At the Federal level, the Infrastructure Investments and Jobs Act (“IIJA”), which establishes funding for the 2022 through 2026 time period, drove significant increases in transportation funding relative to the previous five-year law. The IIJA includes approximately $643 billion in funding for transportation programs ($432 billion for highways, $109 billion for transportation and $102 billion for rail), of which $284 billion is an increase over historic investment levels that will fund new transportation infrastructure. The IIJA also includes $25 billion of funding for airport modernization. As a result of the IIJA, we saw an increase in bid activity and project awards which started in the third quarter of 2022 and continued through 2023 and 2024. We expect that the combination of strong state and federal funding will allow the transportation market to remain elevated relative to historical levels in 2025 and 2026.

*Building Solutions—*Our Building Solutions segment is comprised of our residential and commercial businesses. The segment is driven by new home starts in Dallas-Fort Worth, the segment’s largest market, and continued expansion in the Houston and Phoenix markets. Building Solutions' core customer base includes top national, regional and custom home builders in our areas. In 2022, the residential market experienced significant price volatility and availability for key materials, including concrete, steel and lumber, as well as increases in subcontractor labor costs and decreased labor availability. The Company negotiated with customers to successfully recoup the increases in material and labor costs through price increases. We saw strong, consistent recovery in residential activity through 2023 and experienced volume growth across each geography. While this strength continued into early 2024, in the second quarter of 2024 the combined impact of interest rate uncertainty and affordability challenges drove a decline in the market which continued through the remainder of the year and into early 2025. While we anticipate that demand will remain muted in the near-term, we believe the dynamics in our markets, including population growth and structural housing shortages, support a return to growth over a multi-year time period.

BACKLOG

Our remaining performance obligations on our projects, as defined in ASC 606, do not differ from what we refer to as “Backlog.” Our Backlog represents the amount of revenues we expect to recognize in the future from our contract commitments on projects. The contracts in Backlog are typically completed in 6 to 36 months. Our unsigned awards (“Unsigned Awards”) are excluded from Backlog until the contract is executed by our customer. We refer to the combination of our Backlog and Unsigned Awards as “Combined Backlog.” Our book-to-burn ratio is determined by taking our additions to Backlog and dividing it by revenue for the applicable period. This metric allows management to monitor the Company’s business development efforts to ensure we grow our Backlog and our business over time, and management believes that this measure is useful to investors for the same reason.

At March 31, 2025, our Backlog was $2.13 billion, as compared to $1.69 billion at December 31, 2024, with a book-to-burn ratio of 2.2X for the three months ended March 31, 2025. The Company’s margin in Backlog has increased to 17.7% at March 31, 2025 from 16.7% at December 31, 2024, driven by a greater mix of E-Infrastructure Solutions backlog and an improved backlog margin mix within Transportation Solutions.

Unsigned Awards were $103.2 million at March 31, 2025 and $137.9 million at December 31, 2024. Combined Backlog totaled $2.23 billion and $1.83 billion at March 31, 2025 and December 31, 2024, respectively, with a book-to-burn ratio of 2.1X for the three months ended March 31, 2025.

RESULTS OF OPERATIONS

Consolidated Results

Consolidated financial highlights for the three months ended March 31, 2025 and 2024 are as follows:

(In thousands)

Gross margin 22.0 % 17.5 %

*Revenues—*Revenues were $430.9 million for the first quarter of 2025, compared to $440.4 million in the first quarter of 2024. Excluding $38.5 million of RHB revenue from the first quarter of 2024, revenues increased $29.1 million, which was driven by a $33.8 million increase in E-Infrastructure Solutions and a $10.2 million increase in Transportation Solutions, partly offset by a $14.9 million decrease in Building Solutions.

*Gross profit and margin—*Gross profit was $94.8 million for the first quarter of 2025, an increase of $17.9 million, or 23.3%, compared to the first quarter of 2024. The Company’s gross margin as a percentage of revenue increased to 22.0% in the first quarter of 2025, as compared to 17.5% in the first quarter of 2024.

Contracts in progress that were not substantially complete totaled approximately 210 and 230 at March 31, 2025 and 2024, respectively. These contracts are of various sizes, of different expected profitability and in various stages of completion. The nearer a contract progresses toward completion, the more visibility the Company has in refining its estimate of total revenues (including incentives, delay penalties and change orders), costs and gross profit. Thus, gross profit as a percentage of revenues can increase or decrease from comparable and subsequent quarters due to variations among contracts and the stage of completion of contracts.

*General and administrative expense—*General and administrative expenses were $34.6 million, or 8.0% of revenue, for the first quarter of 2025, compared to $27.3 million, or 6.2% of revenue, for the first quarter of 2024. The increase in expense reflects higher performance based compensation, one-time severance costs, increased headcount to support growth, and inflation in the first quarter of 2025. The Company anticipates that general and administrative expense will be approximately 6.3% of revenue for the full year 2025.

*Other operating income (expense), net—*Other operating income (expense), net, includes the 50% portion of earnings related to our 50% owned subsidiary and occasionally other miscellaneous operating income or expense. In 2025, Sterling’s 50% portion of interest earnings are treated as income and increase the investment in unconsolidated subsidiary account. In 2024, the Members’ 50% portion of earnings was treated as an expense and an increase to the liability account. During the first quarter of 2025, Sterling’s 50% portion of interest earnings was $1.9 million, compared to $2.1 million of expense for the Members’ 50% interest portion of earnings in the first quarter of 2024.

*Interest, net—*Combined interest expense and income was net income of $1.6 million for the first quarter of 2025, compared to net expense of $0.8 million for the first quarter of 2024. The higher interest income was due to increased interest rates on our growing cash balance.

*Income taxes—*The effective income tax rate was 26.1% for the first quarter of 2025. The rate varied from the statutory rate primarily as a result of non-deductible compensation, state income taxes and other permanent differences. The Company incurred a $0.3 million tax rate benefit for the first quarter of 2025 for increased tax deductions related to stock compensation. The Company anticipates an effective income tax rate for the full year 2025 of approximately 26%. See Note 11 - Income Taxes for more information.

Segment Results

The Company’s operations consist of three reportable segments: E-Infrastructure Solutions, Transportation Solutions and Building Solutions. We incur certain expenses at the corporate level that relate to our business as a whole. A portion of these expenses are allocated to our business segments by various methods, but primarily on the basis of usage. The balance of the corporate level expenses are reported in the “Corporate G&A Expense” line, which is primarily comprised of corporate headquarters facility expense, the cost of the executive management team and other expenses pertaining to certain centralized functions that benefit the entire Company, but are not directly attributable to any specific business segment, such as corporate human resources, legal, governance, compliance and finance functions.

(In thousands)

E-Infrastructure Solutions

*Revenues—*Revenues were $218.3 million for the first quarter of 2025, an increase of $33.8 million, or 18.3%, compared to the first quarter of 2024. The increase was primarily driven by higher volume from data centers, partly offset by lower volume from warehouses and distribution centers.

*Operating income—*Operating income was $46.6 million, or 21.4% of revenue, for the first quarter of 2025, an increase of $19.5 million, compared to $27.2 million, or 14.7% of revenue, for the first quarter of 2024. The increases in operating income and margin were driven by a project mix shift toward large mission-critical projects, partly offset by lower volume from warehouses and distribution centers.

Transportation Solutions

*Revenues—*Revenues were $120.7 million for the first quarter of 2025, compared to $149.0 million in the first quarter of 2024. Excluding $38.5 million of RHB revenue from the first quarter of 2024, revenues increased $10.2 million, driven by higher heavy highway revenue.

*Operating Income—*Operating income was $11.3 million, or 9.3% of revenue, for the first quarter of 2025, an increase of $3.1 million, compared to $8.1 million, or 5.5% of revenue, for the first quarter of 2024. The increases in operating income and margin were driven by an improved project margin mix.

Building Solutions

*Revenues—*Revenues were $92.0 million for the first quarter of 2025, a decrease of $14.9 million, or 13.9%, compared to the first quarter of 2024. The decrease was primarily driven by lower commercial volume and fewer residential slabs completed compared to the first quarter of 2024. Our residential concrete slab and plumbing businesses were impacted by a slowdown in all markets in the quarter, driven by unusually severe weather and prospective homebuyers struggling with affordability challenges.

*Operating income—*Operating income was $12.4 million, or 13.4% of revenue, for the first quarter of 2025, a decrease of $3.4 million, compared to $15.8 million, or 14.8% of revenue, for the first quarter of 2024. The decreases in operating income and margin were driven by the aforementioned lower volume.

LIQUIDITY AND SOURCES OF CAPITAL

*Cash and Cash Equivalents—*Total cash and cash equivalents at March 31, 2025 and December 31, 2024 includes the following components:

(In thousands)

The following table presents consolidated information about our cash flows:

(In thousands)

*Operating Activities—*During the three months ended March 31, 2025, net cash provided by operating activities was $84.9 million, compared to net cash provided by operating activities of $49.6 million for the three months ended March 31, 2024. Cash flows provided by operating activities were primarily driven by higher operating income, the collection of the receivable from affiliate, and changes in our accounts receivable, net contracts in progress and accounts payable balances (collectively, “Contract Capital”), as discussed below.

*Changes in Contract Capital—*The change in operating assets and liabilities varies due to fluctuations in operating activities and investments in Contract Capital. The changes in components of Contract Capital during the three months ended March 31, 2025 and 2024 were as follows:

(In thousands)

During the three months ended March 31, 2025, the change in Contract Capital was $7.3 million, which was primarily driven by the E-Infrastructure Solutions segment due to the increased size and duration of its projects in progress. The Company’s Contract Capital fluctuations are impacted by the mix of projects in Backlog, seasonality, the timing of new awards and related payments for work performed and the contract billings to the customer as projects are completed. Contract Capital is also impacted at period-end by the timing of accounts receivable collections and accounts payable payments for projects.

*Investing Activities—*During the three months ended March 31, 2025, net cash used in investing activities was $54.2 million, compared to net cash used of $21.0 million in the three months ended March 31, 2024. The net cash used during the period was primarily driven by $37.9 million for acquisitions (including $25 million for the Drake Acquisition) and $17.9 million for purchases of capital equipment, partly offset by $1.6 million of cash proceeds from the sale of property and equipment. Capital equipment is acquired as needed to support changing levels of production activities and to replace retiring equipment.

*Financing Activities—*During the three months ended March 31, 2025, net cash used in financing activities was $56.2 million, compared to net cash used of $19.7 million for the three months ended March 31, 2024. The financing cash outflow during the period was primarily driven by $43.8 million for the repurchase of common stock, $6.6 million of repayments on the Term Loan Facility, and $5.8 million for withholding taxes paid on the net share settlement of vested equity awards.

*Capital Strategy—*The Company will continue to explore additional revenue growth and capital alternatives to improve leverage and strengthen its financial position in order to take advantage of trends in the civil infrastructure and E-infrastructure markets. The Company also expects to continue to pursue strategic uses of its cash, such as investing in projects or businesses that meet its gross margin and overall profitability targets, managing its debt balances and repurchasing shares of its common stock.

JOINT VENTURES

We participate in various construction joint venture partnerships in order to share expertise, risk and resources for certain highly complex projects. The joint venture’s contract with the project owner typically requires joint and several liability among the joint venture partners. Although our agreements with our joint venture partners provide that each party will assume and fund its share of any losses resulting from a project, if one of our partners is unable to pay its share, we would be fully liable for such share under our contract with the project owner. Circumstances that could lead to a loss under these guarantee arrangements include a partner’s inability to contribute additional funds to the venture in the event that the project incurred a loss or additional costs that we could incur should the partner fail to provide the services and resources toward project completion to which it committed in the joint venture agreement. See the 2024 Form 10-K under “Part I, Item 1A. Risk Factors.”

At March 31, 2025, there was approximately $38 million of construction work to be completed on unconsolidated construction joint venture contracts, of which approximately $15 million represented our proportionate share. Due to the joint and several liability under our joint venture arrangements, if one of our joint venture partners fails to perform, we and the remaining joint venture partners would be responsible for completion of the outstanding work. As of March 31, 2025, we are not aware of any situation that would require us to fulfill responsibilities of our joint venture partners pursuant to the joint and several liability under our contracts.

NEW ACCOUNTING STANDARDS

See Note 2 - Basis of Presentation and Significant Accounting Policies for a discussion of new accounting standards.

CRITICAL ACCOUNTING ESTIMATES

There have been no material changes to the Company’s discussion of critical accounting estimates from those described in Item 7 of our 2024 Form 10-K.

Interest Rate Risk

Our interest rate risk relates primarily to fluctuations in variable interest rates on our revolving credit facility and term loan facility (collectively, the “Credit Facility”) and our cash and cash equivalents balance. Our indebtedness as of March 31, 2025 included $310.6 million of variable rate debt under our Credit Facility. At March 31, 2025 a 100-basis point (or 1%) increase or decrease in the interest rate would increase or decrease interest expense by approximately $3.1 million per year. As of March 31, 2025, we held cash and cash equivalents of $638.6 million. At March 31, 2025 a 100-basis point (or 1%) increase or decrease in the interest rate would increase or decrease interest income by approximately $6.4 million per year.

Other

*Fair Value—*The carrying values of the Company’s cash and cash equivalents, accounts receivable and accounts payable approximate their fair values because of the short-term nature of these instruments. Based upon the current market rates for debt with similar credit risk and maturities, at March 31, 2025, the fair value of our debt outstanding approximated the carrying value, as interest is based on Term SOFR plus an applicable margin.

*Inflation—*Since 2021, supply chain volatility and inflation has resulted in price increases in oil, fuel, lumber, concrete, steel and labor which have increased our cost of operations, and inflation has increased our general and administrative expense. Anticipated cost increases are considered in our bids to customers; however, inflation has had, and may continue to have, a negative impact on the Company’s financial results.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures include, but are not limited to, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including the principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

The Company’s principal executive officer and principal financial officer reviewed and evaluated the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of March 31, 2025. The Company acquired two businesses in 2024 and has acquired two more in the quarter ended March 31, 2025 and, as permitted by SEC guidance for newly acquired businesses, we have elected to exclude the acquired business operations of the acquisitions from the scope of design and operation of our disclosure controls and procedures for the quarter ended March 31, 2025. Based on that evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective at March 31, 2025 to ensure that the information required to be disclosed by the Company in this Report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and is accumulated and communicated to the Company’s management including the principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Internal control over financial reporting may not prevent or detect all errors and all fraud. Also, projections of any evaluation of effectiveness of internal control to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

There have not been any material changes from the risk factors previously disclosed in “Part I, Item 1A. Risk Factors” of the 2024 Form 10-K. These risk factors should be carefully considered, as they could materially affect the Company’s business, financial condition, or future results.