# Balchem Corp: Form 10-Q for the period ended Mar 31, 2023

- Company: [Balchem Corp](/companies/bcpc.md) (CIK 9326)
- Form: 10-Q
- Filed: 2023-04-28
- Accepted by EDGAR: Apr 28, 2023, 14:37 ET
- Period: 2023-03-31
- Accession: 0001628280-23-014088
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/9326/000162828023014088/bcpc-20230331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/9326/000162828023014088/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-01-01 to 2023-03-31 | $232.5m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2023-01-01 to 2023-03-31 | $159.4m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2023-01-01 to 2023-03-31 | $73.2m | us-gaap:GrossProfit |
| Research and development | 3 months, 2023-01-01 to 2023-03-31 | $3.5m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2023-01-01 to 2023-03-31 | $34.4m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2023-01-01 to 2023-03-31 | $6.4m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-01-01 to 2023-03-31 | $22.7m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-01-01 to 2023-03-31 | $0.70 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-01-01 to 2023-03-31 | $0.71 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-01-01 to 2023-03-31 | 32,415,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2023-01-01 to 2023-03-31 | $34.8m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2023-01-01 to 2023-03-31 | $9.6m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 3 months, 2023-01-01 to 2023-03-31 | $22.9m | us-gaap:PaymentsOfDividends |
| Share repurchases | 3 months, 2023-01-01 to 2023-03-31 | $3.8m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2023-03-31 | $60.2m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-03-31 | $335.6m | us-gaap:AssetsCurrent |
| Total assets | at 2023-03-31 | $1.63bn | us-gaap:Assets |
| Current liabilities | at 2023-03-31 | $116.5m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-03-31 | $655.3m | us-gaap:Liabilities |
| Shareholders' equity | at 2023-03-31 | $973.4m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 21,180 characters.

#### (All amounts in thousands, except share and per share data)

### Forward-Looking Statements

This report contains forward-looking statements, within the meaning of the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect our expectation or belief concerning future events that involve risks and uncertainties. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "forecast," "outlook," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," or the negative thereof or variations thereon or similar expressions generally intended to identify forward-looking statements. Actions and performance could differ materially from what is contemplated by the forward-looking statements contained in this report. Factors that might cause differences from the forward-looking statements include those referred to or identified in Item 1A of the Annual Report on Form 10-K for the year ended December 31, 2022 and other factors that may be identified elsewhere in this report. Reference should be made to such factors and all forward-looking statements are qualified in their entirety by the above cautionary statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Factors that may affect our forward-looking statements include, among other things: (1) adverse impacts to our business operations due to the global COVID-19 pandemic and our ability to predict the full extent of such impacts; (2) our ability to manage risks associated with our sales to customers and manufacturing operations outside the United States; (3) supply chain disruptions due to political unrest, terrorist acts, and national and international conflicts; (4) reliability and sufficiency of our manufacturing facilities; (5) our ability to recruit and retain a highly qualified and diverse workforce; (6) our ability to effectively manage labor relations; (7) the effects of global climate change or other unexpected events, including global health crises, that may disrupt our operations; (8) our ability to manage risks related to our information technology and operational technology systems and cybersecurity; (9) our reliance on third-party vendors for many of the critical elements of our global information and operational technology infrastructure and their failure to provide effective support for such infrastructure; (10) disruption and breaches of our information systems; (11) increased competition and our ability to anticipate evolving trends in the market; (12) global economic conditions, including inflation, recession, changes in tariffs and trade relations; (13) raw material shortages or price increases; (14) currency translation and currency transaction risks; (15) interest rate risks; (16) our ability to successfully consummate and manage acquisitions, joint ventures and divestitures; (17) our ability to effectively manage and implement restructuring initiatives or other organizational changes; (18) changes in our relationships with our vendors, changes in tax or trade policy, interruptions in our operations or supply chain; (19) adverse publicity or consumer concern regarding the safety or quality of food products containing our products; (20) the outcome of any litigation, governmental investigations or proceedings; (21) product liability claims and recalls; (22) our ability to protect our brand reputation and trademarks; (23) claims of infringement of intellectual property rights by third parties; (24) risks related to corporate social responsibility and reputational matters; (25) improper conduct by any of our employees, agents or business partners; (26) changes to, or changes in interpretations of, current laws and regulations, and loss of governmental permits and approvals; and (27) ability of our customers to use the ethylene oxide process to sterilize medical devices.

### Overview

We develop, manufacture, distribute and market specialty performance ingredients and products for the nutritional, food, pharmaceutical, animal health, medical device sterilization, plant nutrition and industrial markets. Our three reportable segments are strategic businesses that offer products and services to different markets: Human Nutrition & Health, Animal Nutrition & Health, and Specialty Products, as more fully described in Note 11, *Segment Information*, of the condensed consolidated financial statements. Sales and production of products outside of our reportable segments and other minor business activities are included in "Other and Unallocated".

Balchem is committed to solving today's challenges to shape a healthier tomorrow by operating responsibly and providing innovative solutions for the health and nutritional needs of the world. Sustainability is at the heart of our company's vision to make the world a healthier place, and we proudly support the Ten Principles of the United Nations Global Compact on human rights, labor, environment and anti-corruption. In January 2023, Balchem was named one of America’s Most Responsible Companies by Newsweek magazine for the third consecutive year. This prestigious list, compiled by Newsweek in partnership with Statista Inc., recognizes the most responsible companies in the U.S. across a variety of industries, and is based on publicly available environmental, social and governance (ESG) data. Our Sustainability Framework focuses on the most critical ESG topics relevant to our business and stakeholders. We are very proud of our ESG accomplishments to date and are pleased with the recognition by Newsweek. Balchem will continue to foster these fundamental principles broadly along our entire value chain, develop new ideas and technologies that help us work smarter, and help build a world that is a better place to live.

As of March 31, 2023, we employed approximately 1,331 full time employees worldwide. Although we are facing challenging labor markets, we believe that we have been successful in attracting skilled, experienced, and diverse personnel in a competitive environment and that our human capital resources are adequate to perform all business functions. In addition, we continue to enhance technology in order to optimize productivity and performance.

### Acquisitions

On August 30, 2022, we completed the acquisition of Bergstrom, a leading science-based manufacturer of methylsulfonylmethane ("MSM"), based in Vancouver, Washington, and on June 21, 2022, we completed the acquisition of Kappa, a leading science-based manufacturer of specialty vitamin K2 for the human nutrition industry, headquartered in Oslo, Norway. Details related to both acquisitions are disclosed in Note 2, Significant Acquisitions.

### Segment Results

We sell products for all three segments through our own sales force, independent distributors, and sales agents.

The following tables summarize consolidated net sales by segment and business segment earnings from operations for the three months ended March 31, 2023 and 2022:

| Business Segment Net Sales | Three Months Ended March 31, 2023 | 2022 |
| --- | ---: | ---: |
| Human Nutrition & Health | $132,653 | $122,445 |
| Animal Nutrition & Health | 64,889 | 69,342 |
| Specialty Products | 32,231 | 33,334 |
| Other and Unallocated (1) | 2,767 | 3,746 |
| Total | $232,540 | $228,867 |

| Business Segment Earnings From Operations | Three Months Ended March 31, 2023 | 2022 |
| --- | ---: | ---: |
| Human Nutrition & Health | $18,435 | $20,303 |
| Animal Nutrition & Health | 9,498 | 11,321 |
| Specialty Products | 7,946 | 7,761 |
| Other and Unallocated (1) | (1,471) | (1,049) |
| Total | $34,408 | $38,336 |

(1) Other and Unallocated consists of a few minor businesses which individually do not meet the quantitative thresholds for separate presentation and corporate expenses that have not been allocated to a segment. Unallocated corporate expenses consist of: (i) Transaction and integration costs, ERP implementation costs, and unallocated legal fees totaling $565 and $304 for the three months ended March 31, 2023 and 2022, respectively, and (ii) Unallocated amortization expense of $312 and $738 for the three months ended March 31, 2023 and 2022, respectively, related to an intangible asset in connection with a company-wide ERP system implementation.

### Results of Operations - Three Months Ended March 31, 2023 and 2022

### Net Earnings

*(in thousands)*

|  | Three Months Ended March 31, 2023 | 2022 | Increase (Decrease) % Change |  |
| --- | ---: | ---: | ---: | ---: |
| Net sales | $232,540 | $228,867 | $3,673 | 1.6% |
| Gross margin | 73,170 | 71,506 | 1,664 | 2.3% |
| Operating expenses | 38,762 | 33,170 | 5,592 | 16.9% |
| Earnings from operations | 34,408 | 38,336 | (3,928) | (10.2)% |
| Other expenses | 5,289 | 706 | 4,583 | 649.2% |
| Income tax expense | 6,409 | 8,700 | (2,291) | (26.3)% |
| Net earnings | $22,710 | $28,930 | $(6,220) | (21.5)% |

### Net Sales

*(in thousands)*

|  | Three Months Ended March 31, 2023 | 2022 | Increase (Decrease) % Change |  |
| --- | ---: | ---: | ---: | ---: |
| Human Nutrition & Health | $132,653 | $122,445 | $10,208 | 8.3% |
| Animal Nutrition & Health | 64,889 | 69,342 | (4,453) | (6.4)% |
| Specialty Products | 32,231 | 33,334 | (1,103) | (3.3)% |
| Other | 2,767 | 3,746 | (979) | (26.1)% |
| Total | $232,540 | $228,867 | $3,673 | 1.6% |

- The increase in net sales within the Human Nutrition & Health segment for the first quarter of 2023 as compared to the first quarter of 2022 was primarily driven by the contribution from recent acquisitions, partially offset by lower sales within the minerals and nutrients business and food and beverage markets. Total sales for this segment grew 8.3%, with average selling prices contributing 11.8%, the change in foreign currency exchange rates contributing (0.1)%, and volume and mix contributing (3.4)%.
- The decrease in net sales within the Animal Nutrition & Health segment for the first quarter of 2023 compared to the first quarter of 2022 was driven by lower sales in both monogastric and ruminant species markets in Europe and an unfavorable impact related to changes in foreign currency exchange rates, partially offset by higher sales in both monogastric and ruminant species markets in North America. Total sales for this segment decreased by 6.4%, with volume and mix contributing (9.8)%, the change in foreign currency exchange rates contributing (1.3)%, and average selling prices contributing 4.7%.
- The decrease in net sales within the Specialty Products segment for the first quarter of 2023 compared to the first quarter of 2022 was primarily due to lower plant nutrition sales and an unfavorable impact related to changes in foreign currency exchange rates, partially offset by higher sales of products in the performance gases business. Total sales for this segment decreased by 3.3%, with volume and mix contributing (11.6)%, the change in foreign currency exchange rates contributing (1.4)%, and average selling prices contributing 9.7%.
- Sales relating to Other decreased from the prior year due to lower demand.
- Sales may fluctuate in future periods based on macroeconomic conditions, competitive dynamics, changes in customer preferences, and our ability to successfully introduce new products to the market.

### Gross Margin

*(in thousands)*

|  | Three Months Ended March 31, 2023 | 2022 | Increase (Decrease) % Change |  |
| --- | ---: | ---: | ---: | ---: |
| Gross margin | $73,170 | $71,506 | $1,664 | 2.3% |
| % of net sales | 31.5% | 31.2% |  |  |

Gross margin dollars increased in the first quarter of 2023 compared to the first quarter of 2022 due to the aforementioned higher sales of $3,673, partially offset by an increase in cost of goods sold of $2,009. The 1.3% increase in cost of goods sold was mainly driven by certain higher manufacturing input costs.

### Operating Expenses

*(in thousands)*

|  | Three Months Ended March 31, 2023 | 2022 | Increase (Decrease) % Change |  |
| --- | ---: | ---: | ---: | ---: |
| Operating expenses | $38,762 | $33,170 | $5,592 | 16.9% |
| % of net sales | 16.7% | 14.5% |  |  |

The increase in operating expenses in the first quarter of 2023 compared to the first quarter of 2022 was primarily due to incremental operating expenses related to the acquisitions of $4,958 and higher amortization of $1,039 from the Kappa and Bergstrom acquisitions.

### Earnings from Operations

*(in thousands)*

|  | Three Months Ended March 31, 2023 | 2022 | Increase (Decrease) % Change |  |
| --- | ---: | ---: | ---: | ---: |
| Human Nutrition & Health | $18,435 | $20,303 | $(1,868) | (9.2)% |
| Animal Nutrition & Health | 9,498 | 11,321 | (1,823) | (16.1)% |
| Specialty Products | 7,946 | 7,761 | 185 | 2.4% |
| Other and unallocated | (1,471) | (1,049) | (422) | (40.2)% |
| Earnings from operations | $34,408 | $38,336 | $(3,928) | (10.2)% |
| % of net sales (operating margin) | 14.8% | 16.8% |  |  |

- Human Nutrition & Health segment earnings from operations decreased $1,868. Gross margin contribution from incremental sales were $2,807, but this was more than offset by an increase in operating expenses of $4,675, primarily due to incremental operating expenses related to the Kappa and Bergstrom acquisitions of $4,549 and higher amortization of $1,564, partially offset by gains on disposal of assets of $972.
- Animal Nutrition & Health segment earnings from operations decreased $1,823, primarily due to the lower sales. Additionally, operating expenses for this segment increased by $518, which was largely related to incremental operating expenses from the Bergstrom acquisition of $380.
- Specialty Products segment earnings from operations increased $185, primarily due to a 359 basis point improvement in gross margin as a percentage of sales, resulting from higher average selling prices, only partially offset by higher manufacturing input costs and lower sales volumes. Additionally, operating expenses for this segment increased by $471, which was largely due to compensation-related costs.
- The decrease in Other and unallocated was primarily driven by the aforementioned lower sales.

### Other Expenses

*(in thousands)*

|  | Three Months Ended March 31, 2023 | 2022 | Increase (Decrease) % Change |  |
| --- | ---: | ---: | ---: | ---: |
| Interest expense | $5,565 | $545 | $5,020 | 921.1% |
| Other (income) expense, net | (276) | 161 | (437) | (271.4)% |
|  | $5,289 | $706 | $4,583 | 649.2% |

Interest expense for the three months ended March 31, 2023 and 2022 was primarily related to outstanding borrowings under the 2022 Credit Agreement. The increase in interest expense is due to the additional borrowings in connection with the acquisitions and rising interest rates.

### Income Tax Expense

*(in thousands)*

|  | Three Months Ended March 31, 2023 | 2022 | Increase (Decrease) % Change |  |
| --- | ---: | ---: | ---: | ---: |
| Income tax expense | $6,409 | $8,700 | $(2,291) | (26.3)% |
| Effective tax rate | 22.0% | 23.1% |  |  |

The decrease in the effective tax rate was primarily due to higher tax benefits from stock based compensation, an increase in certain tax credits and certain lower state taxes.

### Liquidity and Capital Resources

During the three months ended March 31, 2023, there were no material changes outside the ordinary course of business in the specified contractual obligations set forth in our Annual Report on Form 10-K for the year ended December 31, 2022. We expect our operations to continue generating sufficient cash flow to fund working capital requirements and necessary capital investments. We are actively pursuing additional acquisition candidates. We could seek additional bank loans or access to financial markets to fund such acquisitions, our operations, working capital, necessary capital investments or other cash requirements should we deem it necessary to do so.

### Cash

Cash and cash equivalents decreased to $60,199 at March 31, 2023 from $66,560 at December 31, 2022. At March 31, 2023, the Company had $54,820 of cash and cash equivalents held by foreign subsidiaries. We presently intend to permanently reinvest these funds in foreign operations by continuing to make additional plant related investments, and potentially invest in partnerships or acquisitions; therefore, we do not currently expect to repatriate these funds in order to fund U.S. operations or obligations. However, if these funds are needed for U.S. operations, we could be required to pay additional withholding taxes to repatriate these funds. Working capital was $219,080 at March 31, 2023 as compared to $195,761 at December 31, 2022, an increase of $23,319. Cash at March 31, 2023 reflects the payment of the 2022 declared dividend in 2023 of $22,867, net repayments on the revolving loan of $9,000, and capital expenditures and intangible assets acquired of $9,720.

*(in thousands)*

|  | Three Months Ended March 31, 2023 | 2022 | Increase (Decrease) % Change |  |
| --- | ---: | ---: | ---: | ---: |
| Cash flows provided by operating activities | $34,838 | $7,021 | $27,817 | 396.2% |
| Cash flows used in investing activities | (10,061) | (10,072) | 11 | 0.1% |
| Cash flows used in financing activities | (33,318) | (34,845) | 1,527 | 4.4% |

### Operating Activities

The increase in cash flows from operating activities was primarily driven by the impact from changes in working capital.

### Investing Activities

We continue to invest in corporate projects, improvements across all production facilities, and intangible assets. Total investments in property, plant and equipment and intangible assets were $9,720 and $10,256 for the three months ended March 31, 2023 and 2022, respectively.

### Financing Activities

During the first quarter of 2023, we borrowed $13,000 under the 2022 Credit Agreement and made total loan payments of $22,000, resulting in $118,431 available under the 2022 Credit Agreement as of March 31, 2023.

We have an approved stock repurchase program. The total authorization under this program is 3,763,038 shares. Since the inception of the program in June 1999, a total of 3,098,657 shares have been purchased. We repurchase shares from employees in connection with settlement of transactions under our equity incentive plans. We also intend to acquire shares from time to time at prevailing market prices if and to the extent we deem it is advisable to do so based on our assessment of corporate cash flow, market conditions and other factors.

Proceeds from stock options exercised were $2,453 and $498 for the three months ended March 31, 2023 and 2022, respectively. Dividend payments were $22,867 and $20,703 for the three months ended March 31, 2023 and 2022, respectively.

### Other Matters Impacting Liquidity

We currently provide postretirement benefits in the form of two retirement medical plans, as discussed in Note 15, *Employee Benefit Plans.* The liability recorded in "Other long-term liabilities" on the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022 was $1,384 and $1,465, respectively, and the plans are not funded. Historical cash payments made under these plans have typically been less than $200 per year. We do not anticipate any changes to the payments made in the current year for the plans.

Chemogas has an unfunded defined benefit plan. The plan provides for the payment of a lump sum at retirement or payments in case of death of the covered employees. The amount recorded for these obligations on our balance sheets as of March 31, 2023 and December 31, 2022 were $395 and $393, respectively, and were included in "Other long-term obligations."

We provide an unfunded, nonqualified deferred compensation plan maintained for the benefit of a select group of management or highly compensated employees. Assets of the plan are held in a rabbi trust, which are included in "Non-current assets" on the Company's condensed consolidated balance sheet. They are subject to additional risk of loss in the event of bankruptcy or insolvency of the Company. The deferred compensation liability as of March 31, 2023 and December 31, 2022 was $9,320 and $8,527, respectively, and is included in "Other long-term obligations" on the condensed consolidated balance sheets. The related rabbi trust assets were $9,339 and $8,547 as of March 31, 2023 and December 31, 2022, respectively, and were included in "Other non-current assets" on the condensed consolidated balance sheets.

### Significant Accounting Policies

There were no changes to our Significant Accounting Policies, as described in its December 31, 2022 Annual Report on Form 10-K, during the three months ended March 31, 2023.

### Related Party Transactions

We were engaged in related party transactions with St. Gabriel CC Company, LLC during the three months ended March 31, 2023. Refer to Note 18, *Related Party Transactions.*

## Market risk

As filed, 2,504 characters.

Our cash and cash equivalents are held primarily in checking accounts, certificates of deposit, and money market investment funds. In 2019, we entered into an interest rate swap and cross-currency swap for hedging purposes. Refer to details noted above (see Note 20, *Derivative Instruments and Hedging Activities*). Additionally, as of March 31, 2023, our borrowings were under a revolving loan bearing interest at a fluctuating rate as defined by the 2022 Credit Agreement plus an applicable rate (See Note 8, *Revolving Loan*). The applicable rate is based upon our consolidated net leverage ratio, as defined in the 2022 Credit Agreement. A 100 basis point increase or decrease in interest rates, applied to our borrowings at March 31, 2023, would result in an increase or decrease in annual interest expense and a corresponding reduction or increase in cash flow of approximately $4,316. We are exposed to commodity price risks, including prices of our primary raw materials. Our objective is to seek a reduction in the potential negative earnings impact of raw material pricing arising in our business activities. We manage these financial exposures, where possible, through pricing and operational means. Our practices may change as economic conditions change.

### Interest Rate Risk

We have exposure to market risk for changes in interest rates, including the interest rate relating to the 2022 Credit Agreement. In the second quarter of 2019, we began to manage our interest rate exposure through the use of derivative instruments. All of our derivative instruments are utilized for risk management purposes, and are not used for trading or speculative purposes. We have hedged a portion of our floating interest rate exposure using an interest rate swap (see Note 20, *Derivative Instruments and Hedging Activities*). As of March 31, 2023, the notional amount of our outstanding interest rate swap was $108,569.

### Foreign Currency Exchange Risk

The financial condition and results of operations of our foreign subsidiaries are reported in local currencies and then translated into U.S. dollars at the applicable currency exchange rate for inclusion in our consolidated financial statements. Therefore, we are exposed to foreign currency exchange risk related to these currencies. In 2019, we entered into a cross-currency swap, with a notional amount of $108,569, which we designated as a hedge of our net investment in Chemogas (see Note 20, *Derivative Instruments and Hedging Activities).*

## Controls and procedures

As filed, 1,820 characters.

### (a) Evaluation of Disclosure Controls and Procedures

Prior to filing this report, we completed an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) of the Exchange Act as of March 31, 2023. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2023.

### (b) Changes in Internal Controls

There have been no changes in the internal controls over financial reporting (as defined in rules 13a-15(f) and 15d-15(f) under the Act) during the fiscal quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

On June 21, 2022, we completed the acquisition of Kappa (See Note 2, "Significant Acquisitions"). We are integrating Kappa into our overall internal control over financial reporting process and exclude the business from our assessment of internal control over financial reporting as of March 31, 2023. Total assets of the Kappa business represented approximately 19.9% of our consolidated total assets as of March 31, 2023.

On August 30, 2022, we completed the acquisition of Bergstrom (See Note 2, "Significant Acquisitions"). We are integrating Bergstrom into our overall internal control over financial reporting process and exclude the business from our assessment of internal control over financial reporting as of March 31, 2023. Total assets of the Bergstrom business represented approximately 4.8% of our consolidated total assets as of March 31, 2023.

## Risk factors

As filed, 315 characters.

There have been no material changes in the Risk Factors identified in the Company's Annual report on Form 10-K for the year ended December 31, 2022. For a further discussion of our Risk Factors, refer to the "Risk Factors" discussion contained in our Annual Report on Form 10-K for the year ended December 31, 2022.

Filed Apr 28, 2023.
Source: SEC EDGAR, the filing index for accession 0001628280-23-014088. Last ingested by Listed: Oct 24, 2026, 14:51 ET. No prices; not investment advice.