Ampco Pittsburgh Corp: Form 10-Q for the period ended Mar 31, 2025

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(in thousands, except per share amounts)

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 (the “Act”) provides a safe harbor for forward-looking statements made by us or on behalf of Ampco-Pittsburgh Corporation and its subsidiaries (collectively, “we,” “us,” “our,” or the “Corporation”). Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Quarterly Report on Form 10-Q, as well as the condensed consolidated financial statements and notes hereto, may include, but are not limited to, statements about operating performance, trends and events we expect or anticipate will occur in the future, statements about sales and production levels, timing of orders for our products, restructurings, the impact from pandemics and geopolitical conflicts, profitability and anticipated expenses, inflation, the global supply chain, tariffs and global trade, future proceeds from the exercise of outstanding warrants, and cash outflows. All statements in this document other than statements of historical fact are statements that are, or could be, deemed “forward-looking statements” within the meaning of the Act and words such as “may,” “will,” “intend,” “believe,” “expect,” “anticipate,” “estimate,” “project,” “target,” “goal,” “forecast,” and other terms of similar meaning that indicate future events and trends are also generally intended to identify forward-looking statements. Forward-looking statements speak only as of the date on which such statements are made, are not guarantees of future performance or expectations, and involve risks and uncertainties. For us, these risks and uncertainties include, but are not limited to:

• inability to maintain adequate liquidity to meet our operating cash flow requirements, repay maturing debt and meet other financial obligations;
• economic downturns, cyclical demand for our products and insufficient demand for our products;
• excess global capacity in the steel industry;
• inability to successfully restructure our operations and/or invest in operations that will yield the best long-term value to our shareholders;
• liability of our subsidiaries for claims alleging personal injury from exposure to asbestos-containing components historically used in certain products of our subsidiaries;
• inability to obtain necessary capital or financing on satisfactory terms to acquire capital expenditures that may be necessary to support our growth strategy;
• inoperability of certain equipment on which we rely;
• increases in commodity prices or insufficient hedging against increases in commodity prices, reductions in electricity and natural gas supply or shortages of key production materials for us or our customers;
• inability to satisfy the continued listing requirements of the New York Stock Exchange or the NYSE American Exchange;
• potential attacks on information technology infrastructure and other cyber-based business disruptions;
• fluctuations in the value of the U.S. dollar relative to other currencies;
• changes in the existing regulatory environment;
• consequences of pandemics and geopolitical conflicts;
• work stoppage or another industrial action on the part of any of our unions;
• failure to maintain an effective system of internal control;
• changes in the global economic environment, inflation, elevated interest rates, recessions or prolonged periods of slow economic growth, and global instability and actual and threatened geopolitical conflict; and
• those discussed more fully elsewhere in this report and in documents filed with the Securities and Exchange Commission by us, particularly in Item 1A, Risk Factors, in Part I of our Annual Report on Form 10-K for the year ended December 31, 2024.

We cannot guarantee any future results, levels of activity, performance or achievements. In addition, there may be events in the future that we are not able to predict accurately or control which may cause actual results to differ materially from expectations expressed or implied by forward-looking statements. Except as required by applicable law, we assume no obligation, and disclaim any obligation, to update forward-looking statements whether as a result of new information, events or otherwise.

The Business

The Corporation manufactures and sells highly engineered, high-performance specialty metal products and customized equipment utilized by industry throughout the world. It operates in two business segments – the *Forged and Cast Engineered Products (“*FCEP”) segment and the *Air and Liquid Processing (“*ALP”) segment. This segment presentation is consistent with how the Corporation’s chief operating decision-maker evaluates financial performance and makes resource allocation and strategic decisions about the business.

The FCEP segment produces forged hardened steel rolls, cast rolls and forged engineered products (“FEP”). Forged hardened steel rolls are used primarily in hot and cold rolling mills by producers of steel, aluminum and other metals. Cast rolls, which are produced in a variety of iron and steel qualities, are used mainly in hot strip mills, medium/heavy section mills, roughing mills, and plate mills. FEP principally are sold to customers in the steel distribution market, oil and gas industry and the aluminum and plastic extrusion industries. The segment has operations in the United States, England, Sweden, and Slovenia, and an equity interest in three joint venture companies in China. Collectively, the segment primarily competes with European, Asian and North and South American companies in both domestic and foreign markets and distributes a significant portion of its products through sales offices located throughout the world.

The ALP segment includes Aerofin, Buffalo Air Handling and Buffalo Pumps, all divisions of Air & Liquid Systems Corporation (“Air & Liquid”), a wholly owned subsidiary of the Corporation. Aerofin produces custom-engineered finned tube heat exchange coils and related heat transfer products for a variety of industries including original equipment manufacturers and commercial, nuclear power generation and industrial manufacturing. Buffalo Air Handling produces large custom-designed air handling systems for institutional (e.g., hospital, university), pharmaceutical and general industrial building markets. Buffalo Pumps manufactures centrifugal pumps for the fossil-fueled power generation, marine defense and industrial refrigeration industries. The segment has operations in Virginia and New York with headquarters in Carnegie, Pennsylvania. The segment utilizes an independent group of sales offices located throughout the United States and Canada.

Executive Overview

For the FCEP segment, global steel manufacturing capacity continues to exceed global consumption of steel products. Demand for steel is soft but stable. Increased entry of low-priced products from other countries has negatively impacted local demand in the U.S. and Europe, with several of the segment’s largest customers engaging in trade cases to reduce the number of imports into the U.S. The U.S. government previously announced new tariffs on steel and aluminum imports to the U.S. and has, for now, removed the exceptions allowing certain countries to send un-tariffed products to the U.S. As of March 31, 2025, tariffs are now incurred on forged and cast rolls shipped from the segment's European facilities into the U.S. and on U.S. forged and cast rolls shipped into China. Since the cast roll market is currently underserved in the U.S., the Corporation believes the segment's European operations are on equal footing with its competition with respect to tariffs. It is expected that the costs associated with tariffs will be passed on to customers. Tariff outcomes are fluid and subject to change. Accordingly, it is difficult to predict how tariffs will affect the ordering patterns of the segment's customers, however, customer deferral of orders is expected.

The primary focus for the FCEP segment is to improve its profitability by maintaining a strong position in the roll market and continuing to improve operational efficiency and equipment reliability following the completion of a significant capital equipment program. In addition, in February 2025, the segment's U.K. operations entered into a formal consultation process with its unions and staff to evaluate various options to improve its profitability, which continues as of March 31, 2025.

For the ALP segment, businesses are benefiting from steady demand and increased market share but continue to face increasing production costs due to inflation. The segment has been implementing price increases for certain of its products to help mitigate these inflationary effects. The focus for this segment is to grow revenues, strengthen engineering and manufacturing capabilities to keep pace with growth opportunities, and continue to improve its sales distribution network. As of March 31, 2025, tariffs are now incurred on certain of the segment's raw materials. It is expected that the costs associated with these tariffs will be passed on to customers. Tariff outcomes are fluid and subject to change; however, the U.S.'s onshoring of additional manufacturing capabilities would potentially increase demand for the segment's products.

The Corporation is actively monitoring, and will continue to actively monitor, changes prompted by the U.S. government, repercussions from the Russia-Ukraine and Middle East conflicts and similar geopolitical matters, economic conditions, and other developments relevant to its business including the potential impact on its operations, financial condition, liquidity, suppliers, industry, and workforce.

Selected Financial Information

Net sales approximated $104,265 and $110,215 for the three months ended March 31, 2025 and 2024, respectively, a decrease of $5,950. A discussion of net sales for the Corporation’s two segments is included below.

Income from operations approximated $3,850 and $82 for the three months ended March 31, 2025 and 2024, respectively, an improvement of $3,768. A discussion of income from operations for the Corporation’s two segments is included below.

Backlog equaled $368,453 as of March 31, 2025 versus $378,884 as of December 31, 2024. Backlog represents the accumulation of firm orders on hand which: (i) are supported by evidence of a contractual arrangement, (ii) include a fixed and determinable sales price, (iii) have reasonably assured collectability, and (iv) generally are expected to ship within two years from the backlog reporting date. Backlog at a certain date may not be a direct measure of future revenue for a particular order because price increases, negotiated subsequently to the original order, are not included in backlog until the updated contract is received from the customer and certain surcharges are not determinable until the order is complete and ready for shipment to the customer. Approximately 20% of the backlog is expected to be released after 2025. A discussion of backlog by segment is included below.

Costs of products sold, excluding depreciation and amortization, as a percentage of net sales, for the three months ended March 31, 2025 and 2024 approximated 78.7% and 83.9%, respectively, with gross margins improving for both the FCEP and ALP segments. See further discussion in the commentary for the Corporation’s two segments below.

Selling and administrative expenses approximated $13,659 and $12,973 for the three months ended March 31, 2025 and 2024, respectively. The increase in selling and administrative expenses for the current year period when compared to the same period of the prior year is primarily due to inflationary increases, higher employee-related costs and professional fees.

Interest expense for the three months ended March 31, 2025 and 2024 was comparable and approximated $2,726 and $2,757, respectively. More specifically:

• Lower average interest rates for 2025 versus 2024 decreased interest expense by approximately $200 for the three months ended March 31, 2025; and
• Lower average borrowings outstanding under the revolving credit facility decreased interest expense by approximately $159 for the three months ended March 31, 2025; offset by
• Higher average borrowings under the equipment financing facility, net of capitalized interest, increased interest expense by approximately $353 for the three months ended March 31, 2025.

Other income – net is comprised of the following:

Other income – net fluctuated primarily due to:

• Lower net pension and other postretirement income primarily due to a lower expected long-term rate of return on the assets of U.S. defined benefit pension plan in 2025 versus 2024,
• Changes in foreign exchange gains and losses, and
• Changes in unrealized losses and gains in the market value of the Rabbi trust investments corresponding to the volatility in the financial markets.

Income tax provision for each of the periods includes income taxes associated with the Corporation’s profitable operations. An income tax benefit is not able to be recognized on losses of certain of the Corporation’s entities since it is “more likely than not” the asset will not be realized. Accordingly, changes in the income tax provision for each of the periods include the effects of changes in the pre-tax income of the Corporation’s profitable operations in each jurisdiction and changes in expectations as to whether an income tax benefit will be able to be realized for the deferred income tax assets recognized.

The income tax provision for the three months ended March 31, 2025 includes an income tax benefit of approximately $500 resulting from the Corporation's majority-owned Chinese joint venture qualifying as a high-tech enterprise (“HTE”). As an HTE, the earnings of the Chinese joint venture through 2026 will be taxed at a rate of 15% (versus 25%) and, at March 31, 2025, certain net deferred income tax liabilities were revalued at a rate of 15% (versus 25%) thereby reducing deferred income tax liabilities and contributing to the income tax benefit.

Valuation allowances are recorded against the majority of the Corporation’s deferred income tax assets. The Corporation will maintain the valuation allowances until there is sufficient evidence to support the reversal of all or some portion of the allowances. Given the Corporation’s current earnings and anticipated future earnings in Sweden, the Corporation believes there is a reasonable possibility within the next 12 months, sufficient positive evidence may become available to allow the Corporation to conclude some portion of the valuation allowance will no longer be needed. Release of any portion of the valuation allowance would result in the recognition of deferred income tax assets on the Corporation’s condensed consolidated balance sheet and a decrease to the Corporation’s income tax expense in the period the release is recorded. The exact timing and the amount of the valuation allowance released are subject to, among many items, the level of profitability achieved. Once the valuation allowance is completely reversed, a tax provision would be recognized on future earnings.

Net income (loss) attributable to Ampco-Pittsburgh and net income (loss) per common share attributable to Ampco-Pittsburgh equaled $1,142 and $0.06 per common share and $(2,717) and $(0.14) per common share for the three months ended March 31, 2025 and 2024, respectively. The income tax benefit resulting from the Corporation's majority-owned Chinese joint venture qualifying as an HTE of approximately $500 improved net income attributable to Ampco-Pittsburgh and net income per common share attributable to Ampco-Pittsburgh by approximately $299 and $0.01 per common share, respectively, for the three months ended March 31, 2025.

Net Sales and Operating Results by Segment

Forged and Cast Engineered Products

The decline in net sales for the three months ended March 31, 2025, when compared to the same period of the prior year, is primarily due to the following:

• Lower volume and changes in product mix for roll sales, which decreased net sales by approximately $6,300 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024;
• Changes in exchange rates between the periods used to translate net sales of the Corporation’s foreign subsidiaries into the U.S. dollar, which decreased net sales by approximately $1,000 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024; and
• Lower FEP sales, which decreased net sales by approximately $100 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024; offset
• Higher base pricing, net of lower variable-index surcharges passed through to customers as a result of lower prices for raw material, energy and transportation, which increased net sales by approximately $2,500 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024.

Income from operations for the three months ended March 31, 2025 increased when compared to the three months ended March 31, 2024 primarily due to:

• Benefit from improved pricing and changes in manufacturing costs, net of lower variable-index surcharges, which increased income from operations by approximately $5,200 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024; and
• Better manufacturing absorption for the current year period, which increased operating income by approximately $500 for the three months ended March 31, 2025, when compared to the three months ended March 31, 2024, primarily as a result of operational efficiencies and improved equipment reliability following completion of a significant capital equipment program by the end of 2024 coupled with lower absorption in the prior year period as a result of a fire at one of the Corporation’s cast roll facilities; offset by
• Lower volume of shipments, which decreased operating income by approximately $2,600 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024;
• Higher selling and administrative costs, which decreased operating income by approximately $700 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024; and
• Changes in exchange rates between the periods used to translate the operating results of the Corporation’s foreign subsidiaries into the U.S. dollar, which reduced income from operations by approximately $100 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024.

Backlog decreased at March 31, 2025 from December 31, 2024 by $18,234 primarily due to:

• Lower backlog for mill rolls of approximately $31,700 due to (i) lower demand in Europe as a result of mills operating at a reduced rate, (ii) U.S. customers deferring orders due, in part, to the current geopolitical events with tariffs and uncertainty as to the total cost of a roll, and (iii) timing of orders for the following year; offset by
• Higher exchange rates used to translate the backlog of the Corporation’s foreign subsidiaries into the U.S. dollar, which increased backlog at March 31, 2025 when compared to backlog at December 31, 2024, by approximately $8,200; and
• Improved demand for FEP, which increased backlog at March 31, 2025 when compared to backlog at December 31, 2024 by approximately $5,200.

At March 31, 2025, approximately 14% of backlog is expected to ship after 2025.

Air and Liquid Processing

The decrease in net sales for the three months ended March 31, 2025, when compared to the same period of the prior year period, is primarily due to:

• Lower net sales of air handling units principally due to the timing of shipments and associated revenue recognition, which reduced net sales by approximately $1,900 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024; offset by
• Higher net sales of heat exchange coils principally due to an increase in the volume of shipments to nuclear-power customers, which increased net sales by approximately $700 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024; and
• Higher net sales of centrifugal pumps principally due to higher sales to the U.S. Navy after-market and commercial customers, which increased net sales by approximately $100 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024.

The improvement in operating income is principally due to changes in product mix, offset in part by the lower volume of shipments and higher manufacturing costs, which had a net benefit to operating income of approximately $1,500 for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024.

Backlog at March 31, 2025 improved when compared to backlog December 31, 2024 by approximately $7,800 with each of the product lines improving. In particular, backlog for:

• Heat exchange coils increased approximately $4,500 primarily due to record order intake in the nuclear market;
• Centrifugal pumps increased approximately $1,900 primarily due to strong order activity in the U.S. Navy market; and
• Air handling units increased approximately $1,400 primarily due to strong order activity in the pharmaceutical market.

At March 31, 2025, approximately 31% of backlog is expected to ship after 2025.

Non-GAAP Financial Measures

The Corporation presents non-GAAP adjusted EBITDA and non-GAAP adjusted income (loss) from operations. Non-GAAP adjusted EBITDA is calculated as net income (loss) excluding interest expense, other income - net, income tax provision, depreciation and amortization, and stock-based compensation along with significant charges or credits that are one-time charges or credits, unrelated to the Corporation’s ongoing results of operations, or beyond its control. Non-GAAP adjusted income (loss) from operations is calculated as income (loss) from operations excluding depreciation and amortization and stock-based compensation along with significant charges or credits that are one-time charges or credits, unrelated to the segment’s ongoing results of operations, or beyond its control. These non-GAAP financial measures are not based on any standardized methodology prescribed by accounting principles generally accepted in the United States of America (“GAAP”).

Beginning in 2025, the Corporation began presenting non-GAAP adjusted EBITDA along with non-GAAP adjusted income (loss) from operations. These measures are key measures used by the Corporation's management and Board of Directors to understand and evaluate the operating performance of the Corporation and its segments. While these non-GAAP measures may not be directly comparable to similarly titled measures presented by other companies, the Corporation's management and Board of Directors believe these non-GAAP measures enhance comparability to companies in its stated industry peer group.

The Corporation believes these non-GAAP financial measures help identify underlying trends in its business that otherwise could be masked by the effect of the items it excludes from adjusted EBITDA and adjusted income (loss) from operations. The Corporation also believes these non-GAAP financial measures provide useful information to management, shareholders and investors, and others in understanding and evaluating its operating results, enhancing the overall understanding of its past performance and future prospects and allowing for greater transparency with respect to key financial metrics used by the Corporation’s management in its financial and operational decision-making.

Non-GAAP adjusted EBITDA and non-GAAP adjusted income (loss) from operations are not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are limitations related to the use of non-GAAP adjusted EBITDA, rather than net income (loss), or non-GAAP adjusted income (loss) from operations, rather than income (loss) from operations, which are the nearest GAAP equivalents.

The following is a reconciliation of net income (loss) to non-GAAP adjusted EBITDA for the three months ended March 31, 2025 and 2024, respectively:

The following is a reconciliation of income (loss) from operations to non-GAAP adjusted income (loss) from operations for the three months ended March 31, 2025 and 2024, respectively:

(1) Corporate represents the operating expenses of the corporate office and other costs not allocated to the segments.

Liquidity and Capital Resources

Net cash flows (used in) provided by operating activities equaled $(5,280) and $4,535 for the three months ended March 31, 2025 and 2024, respectively, a change of $(9,815) primarily due to:

• Higher investment in trade working capital of approximately $12,700; and
• Higher contributions to the U.S. defined benefit pension plan of approximately $796; offset by
• Net income of $1,891 for the three months ended March 31, 2025 versus a net loss of $2,206 for the three months ended March 31, 2024; and
• Lower net asbestos-related payments of $1,254 for the three months ended March 31, 2025 versus the three months ended March 31, 2024.

Trade receivables at March 31, 2025 increased by approximately $11,900 when compared to trade receivables at December 31, 2024 primarily due to:

• Higher sales in February and March of 2025 versus November and December of 2024, which increased trade receivables at March 31, 2025 when compared to December 31, 2024 by approximately $9,300, and
• Higher exchange rates used to translate the trade receivables of the Corporation’s foreign subsidiaries into the U.S. dollar, which increased trade receivables at March 31, 2025 when compared to December 31, 2024 by approximately $1,200.

Inventories at March 31, 2025 increased by approximately $7,400 when compared to inventories at December 31, 2024 primarily due to:

• Higher in-process and finished goods inventories at March 31, 2025 versus December 31, 2024 of approximately $5,000 resulting from higher production in anticipation of planned summer shutdowns and more production days in the first quarter of a year versus the fourth quarter of a year;
• Higher exchange rates used to translate the inventories of the Corporation’s foreign subsidiaries into the U.S. dollar, which increased inventories at March 31, 2025 when compared to December 31, 2024 by approximately $2,300; and
• Timing of shipments and associated revenue recognition, particularly for air handling units which increased inventories at March 31, 2025 when compared to December 31, 2024 by approximately $1,600; offset by
• Lower raw material inventories at March 31, 2025 when compared to December 31, 2024 of approximately $1,600 principally due to the timing of production.

Accounts payable at March 31, 2025 increased by approximately $5,000 when compared to accounts payable at December 31, 2024 primarily due to timing of payments, and higher exchange rates used to translate the accounts payable of the Corporation’s foreign subsidiaries into the U.S. dollar which increased accounts payables at March 31, 2025 when compared to December 31, 2024 by approximately $1,100.

Asbestos-related payments are expected to continue in the foreseeable future. The amount of asbestos-related payments and corresponding insurance recoveries are difficult to predict and can vary based on a number of factors, including changes in assumptions, as outlined in Note 15 to the condensed consolidated financial statements.

Net cash flows used in investing activities equaled $(1,711) and $(2,845) for the three months ended March 31, 2025 and 2024, respectively, a change of $1,134 which is primarily due to:

• Lower capital spend of approximately $1,100 by the FCEP segment primarily due to the completion of a significant capital equipment program during the second quarter of 2024; offset by
• Higher capital spend of approximately $500 by the ALP segment. Certain of this capital spend may be able to be subsidized by various government incentives such as grants. For the three months ended March 31, 2025, the Corporation received approximately $323 in government incentives. To date, no repayment obligations exist for any government incentive received.

At March 31, 2025, commitments for future capital expenditures approximated $5,200 which are expected to be spent over the next 12-18 months.

Net cash flows (used in) provided by financing activities equaled $(1,727) and $2,028 for the three months ended March 31, 2025 and 2024, respectively, a change of $(3,755) which is primarily due to:

• Higher net repayments on the Corporation’s revolving credit facility of $2,955;
• No proceeds from the equipment financing facility in the current year, due to the completion of a significant capital equipment program during the second quarter of 2024, whereas the prior year included proceeds from the equipment financing facility of $1,134; and
• Higher principal payments of $330 in the current year, primarily on the equipment financing facility; offset by
• Prior year repayment of related-party debt of $664.

The effect of exchange rate changes on cash and cash equivalents is primarily attributable to the fluctuation of the British pound and Swedish krona against the U.S. dollar.

As a result of the above, cash and cash equivalents decreased by $8,298 during 2025 and ended the period at $7,129 in comparison to $15,427 at December 31, 2024. The majority of the Corporation’s cash and cash equivalents is held by its foreign operations. Domestic customer remittances are used to repay borrowings under the Corporation’s revolving credit facility daily, resulting in minimal cash maintained by the Corporation’s domestic operations. Cash held by the Corporation’s foreign operations is considered to be permanently re-invested; accordingly, a provision for estimated local and withholding tax has not been made. If the Corporation were to remit any foreign earnings to it or any of its U.S. entities, the estimated tax impact would be insignificant.

Funds on hand, funds generated from future operations and availability under the Corporation’s revolving credit facility are expected to be sufficient to finance the Corporation’s operational requirements, debt service costs and capital expenditures. As of March 31, 2025, remaining availability under the revolving credit facility approximated $28,586, net of standard availability reserves. Since a significant portion of the Corporation’s debt includes variable rate interest, increases in the underlying benchmark rates will increase the Corporation’s debt service costs. Similarly, decreases in the underlying benchmark rates will decrease the Corporation’s debt service costs.

The maturity date for the revolving credit facility is June 29, 2026 and, subject to the other terms and conditions of the revolving credit agreement, will become due on that date. However, the Corporation is currently in discussions with its lenders with the intent of securing a mutually beneficial arrangement covering multiple years prior to June 30, 2025. Additionally, while the Corporation anticipates it has sufficient liquidity to finance the Corporation’s operational requirements, debt service costs and capital expenditures, it may from time to time consider alternatives, potential transactions and other strategies in an attempt to enhance its liquidity. Given such measures are forward-looking, the Corporation cannot ensure it will be successful in renegotiating its revolving credit facility or achieving such enhancements to improve its liquidity.

Litigation and Environmental Matters

See Note 15 and Note 16 to the condensed consolidated financial statements.

Critical Accounting Policies

The Corporation’s critical accounting policies, as summarized in its Annual Report on Form 10-K for the year ended December 31, 2024, remain unchanged.

Recently Issued Accounting Pronouncements

See Note 1 to the condensed consolidated financial statements.

Disclosure controls and procedures. An evaluation of the effectiveness of the Corporation’s disclosure controls and procedures as of the end of the period covered by this report was carried out under the supervision, and with the participation, of management, including the principal executive officer and principal financial officer. Disclosure controls and procedures are defined under Securities and Exchange Commission (“SEC”) rules as controls and other procedures designed to ensure information required to be disclosed by a company in the reports it files under the Securities Exchange Act of 1934 (as amended, the “Exchange Act”) is recorded, processed, summarized and reported within the required time periods. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure information required to be disclosed by an issuer in the reports it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on that evaluation, the Corporation’s management, including the principal executive officer and principal financial officer, has concluded the Corporation’s disclosure controls and procedures were effective as of March 31, 2025.

Changes in internal control. There has been no change in the Corporation’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rules 13a-15 or 15d-15 under the Exchange Act that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

There are no material changes to the “Risk Factors” included under Item 1A of the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024. These “Risk Factors” should be carefully considered, understanding such risk factors may not describe every risk facing the Corporation. Additional risks and uncertainties not currently known to the Corporation or that the Corporation currently deems to be immaterial could adversely affect its business, financial condition and results of operations in the future.

Items 2-4 None.