cswi-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________________________________

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File No. 001-37454


CSW INDUSTRIALS, INC. (Exact name of registrant as specified in its charter)


Delaware						47-2266942
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

5420 Lyndon B. Johnson Freeway, Suite 500, Dallas, Texas						75240
(Address of principal executive offices)						(Zip Code)

(214) 884-3777

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol (s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

CSWI

Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒

Accelerated filer ☐

Non-accelerated filer ☐

(Do not check if smaller reporting company)

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of July 29, 2024, there were 15,530,737 shares of the issuer’s common stock outstanding.

CSW INDUSTRIALS, INC.

FORM 10-Q

TABLE OF CONTENTS


		Page No.
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements	1
	Consolidated Statements of Income and Consolidated Statements of Comprehensive Income for the three months ended June 30, 2024 and 2023 (unaudited)	1
	Consolidated Balance Sheets as of June 30 , 202 4 and March 31, 202 4 (unaudited)	3
	Consolidated Statements of Equity as of June 30 , 202 4 and 202 3 (unaudited)	4
	Consolidated Statements of Cash Flows for the three months ended J une 30 , 202 4 and 202 3 (unaudited)	5
	Notes to the Consolidated Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	27

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 5.	Other Information	29
Item 6.	Exhibits	30
SIGNATURES		31

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

CSW INDUSTRIALS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)



	Three Months Ended June 30,
(Amounts in thousands, except per share amounts)	2024		2023
Revenues, net	$	226,177	$	203,360
Cost of revenues	(118,756)		(111,193)
Gross profit	107,421		92,167
Selling, general and administrative expenses	(52,361)		(46,961)

Operating income	55,060		45,206
Interest expense, net	(2,520)		(4,009)
Other income, net	260		314
Income before income taxes	52,800		41,511
Provision for income taxes	(13,950)		(10,455)
Net income	38,850		31,056
Less: Income attributable to redeemable noncontrolling interest	(259)		(445)

Net income attributable to CSW Industrials, Inc.	$	38,591	$	30,611


Net income per share attributable to CSW Industrials, Inc.
Basic	$	2.48	$	1.97
Diluted	$	2.47	$	1.97

Weighted average number of shares outstanding:
Basic	15,534		15,520
Diluted	15,596		15,547

See accompanying notes to consolidated financial statements.

CSW INDUSTRIALS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended June 30,
(Amounts in thousands)	2024		2023
Net income	$	38,850	$	31,056
Other comprehensive income (loss):
Foreign currency translation adjustments	(887)		514
Cash flow hedging activity, net of taxes of $(16) and $(394), respectively	62		1,481
Pension and other postretirement effects, net of taxes of $0 and $0, respectively	—		1
Other comprehensive income (loss)	(825)		1,996
Comprehensive income	$	38,025	$	33,052
Less: Comprehensive income attributable to redeemable noncontrolling interest	(259)		(445)
Comprehensive income attributable to CSW Industrials, Inc.	$	37,766	$	32,607

See accompanying notes to consolidated financial statements.

CSW INDUSTRIALS, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(Amounts in thousands, except for per share amounts)	June 30, 2024		March 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	18,852	$	22,156
Accounts receivable, net of allowance for expected credit losses of $945 and $908, respectively	143,195		142,665
Inventories, net	156,791		150,749
Prepaid expenses and other current assets	12,381		15,840

Total current assets	331,219		331,410
Property, plant and equipment, net of accumulated depreciation of $106,976 and $103,515, respectively	92,371		92,811
Goodwill	246,402		247,191
Intangible assets, net	312,898		318,819
Other assets	67,636		53,095

Total assets	$	1,050,526	$	1,043,326

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	55,025	$	48,387
Accrued and other current liabilities	66,460		67,449


Total current liabilities	121,485		115,836
Long-term debt	115,000		166,000
Retirement benefits payable	1,103		1,114
Other long-term liabilities	143,166		125,298

Total liabilities	380,754		408,248
Commitments and contingencies (See Note 13)
Redeemable noncontrolling interest	19,614		19,355
Equity:
Common shares, $0.01 par value	164		164
Shares authorized – 50,000
Shares issued – 16,504 and 16,466, respectively
Preferred shares, $0.01 par value	—		—
Shares authorized (10,000) and issued (0)
Additional paid-in capital	143,970		137,253
Treasury shares, at cost (968 and 952 shares, respectively)	(102,406)		(95,643)
Retained earnings	618,381		583,075
Accumulated other comprehensive loss	(9,951)		(9,126)
Total equity	650,158		615,723
Total liabilities, redeemable noncontrolling interest and equity	$	1,050,526	$	1,043,326

See accompanying notes to consolidated financial statements.

CSW INDUSTRIALS, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)


(Amounts in thousands)	Common Stock		Treasury Shares		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Balance at March 31, 2024	$	164	$	(95,643)	$	137,253	$	583,075	$	(9,126)	$	615,723
Share-based compensation	—		—		3,746		—		—		3,746
Stock activity under stock plans	—		(3,313)		—		—		—		(3,313)
Reissuance of treasury shares	—		1,211		2,948		—		—		4,159
Repurchase of common shares	—		(4,661)		—		—		—		(4,661)
Net income	—		—		—		38,591		—		38,591
Dividends	—		—		23		(3,285)		—		(3,262)
Other comprehensive loss, net of tax	—		—		—		—		(825)		(825)
Balance at June 30, 2024	$	164	$	(102,406)	$	143,970	$	618,381	$	(9,951)	$	650,158


(Amounts in thousands)	Common Stock		Treasury Shares		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Balance at March 31, 2023	$	163	$	(82,734)	$	123,336	$	493,319	$	(8,409)	$	525,675
Share-based compensation	—		—		2,805		—		—		2,805
Stock activity under stock plans	—		(2,864)		—		—		—		(2,864)

Reissuance of treasury shares	—		2,526		2,292		—		—		4,818
Net income	—		—		—		30,611		—		30,611
Dividends	—		—		18		(2,965)		—		(2,947)
Other comprehensive income, net of tax	—		—		—		—		1,996		1,996
Balance at June 30, 2023	$	163	$	(83,072)	$	128,451	$	520,965	$	(6,413)	$	560,094

See accompanying notes to consolidated financial statements.

CSW INDUSTRIALS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended June 30,
(Amounts in thousands)	2024		2023
Cash flows from operating activities:
Net income	$	38,850	$	31,056
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	3,622		3,239
Amortization of intangible and other assets	6,503		5,868
Provision for inventory reserves	517		2,509
Provision for credit losses	378		108
Share-based compensation	3,746		2,805

Gain on disposals of property, plant and equipment	(13)		(12)

Net pension benefit	16		17
Impairment of assets	—		92
Deferred taxes	2,084		843
Changes in operating assets and liabilities:
Accounts receivable	(998)		(4,319)
Inventories	(6,766)		2,141
Prepaid expenses and other current assets	3,438		2,443
Other assets	28		(788)
Accounts payable and other current liabilities	10,923		3,233
Retirement benefits payable and other liabilities	327		1,022
Net cash provided by operating activities	62,655		50,257
Cash flows from investing activities:
Capital expenditures	(3,101)		(4,971)

Proceeds from sale of assets	13		12
Cash paid for investments	(500)		—
Cash paid for acquisitions	(163)		(112)
Proceeds from acquisitions true-up	470		—
Net cash used in investing activities	(3,281)		(5,071)
Cash flows from financing activities:
Borrowings on line of credit	7,723		15,432
Repayments of line of credit	(58,723)		(58,432)

Purchase of treasury shares	(7,891)		(2,864)


Dividends	(3,262)		(2,947)
Net cash used in financing activities	(62,153)		(48,811)
Effect of exchange rate changes on cash and equivalents	(525)		(42)
Net change in cash and cash equivalents	(3,304)		(3,667)
Cash and cash equivalents, beginning of period	22,156		18,455
Cash and cash equivalents, end of period	$	18,852	$	14,788

See accompanying notes to consolidated financial statements.

CSW INDUSTRIALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.ORGANIZATION AND OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES

CSW Industrials, Inc. (“CSWI,” “we,” “our” or “us”) is a diversified industrial growth company with a strategic focus on providing niche, value-added products in the end markets we serve. We operate in three business segments: Contractor Solutions, Specialized Reliability Solutions and Engineered Building Solutions. Our products include mechanical products for heating, ventilation, air conditioning and refrigeration (“HVAC/R”), plumbing products, grilles, registers and diffusers (“GRD”), building safety solutions and high-performance specialty lubricants and sealants. End markets that we serve include HVAC/R, architecturally-specified building products, plumbing, general industrial, energy, rail transportation and mining. Our manufacturing operations are concentrated in the United States (“U.S.”), Vietnam and Canada, and we have distribution operations in the U.S., Australia, Canada and the United Kingdom (“U.K.”). Our products are sold directly to end users or through designated channels in over 100 countries around the world, primarily including the U.S., Canada, the U.K. and Australia.

Drawing on our innovative and proven technologies, we seek to deliver solutions primarily to contractors that place a premium on superior performance and reliability. We believe our brands are well-known in the specific end markets we serve and have a reputation for high quality. We rely on both organic growth and inorganic growth through acquisitions to provide an increasingly broad portfolio of performance optimizing solutions that meet our customers’ ever-changing needs. We have a successful record of making attractive, synergistic acquisitions in support of this objective, and we remain focused on identifying additional acquisition opportunities in our core end markets.

Many of our products are used to protect the capital assets of our customers that are expensive to repair or replace and are critical to their operations. We have a source of recurring revenue from the maintenance, repair and overhaul and consumable nature of many of our products. We also provide some custom engineered products that strengthen and enhance our customer relationships. The reputation of our product portfolio is built on more than 100 well-respected brand names, such as AC Guard®, Air Sentry®, Balco®, Cover Guard®, Deacon®, Dust Free®, Falcon Stainless®, Greco®, Jet-Lube®, Kopr-Kote®, Leak Freeze®, Metacaulk®, No. 5®, OilSafe®, RectorSeal®, Safe-T-Switch®, Shoemaker Manufacturing®, Smoke Guard®, TRUaire® and Whitmore®.

Basis of Presentation

The consolidated financial statements included in this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024 (“Quarterly Report”), include all revenues, costs, assets and liabilities directly attributable to CSWI and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements are for us and our consolidated subsidiaries, each of which is a wholly-owned subsidiary, except our 50% investment in a variable interest entity ("VIE") for which we have determined that we are the primary beneficiary and therefore have consolidated into our financial statements. All significant intercompany transactions have been eliminated in consolidation.

The consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary to present a fair statement of CSWI’s financial position as of June 30, 2024, and the results of operations for the three-month period ended June 30, 2024 and 2023. All adjustments are of a normal, recurring nature.

The year-end consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by U.S. GAAP. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in CSWI’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (the “Annual Report”).

Accounting Policies

We have consistently applied the accounting policies described in our Annual Report in preparing these consolidated financial statements.

Accounting Developments

Pronouncements not yet implemented

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which provides updates to qualitative and quantitative reportable segment disclosure requirements, including enhanced disclosures about significant segment expenses and increased interim disclosure requirements, among others. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted, and the amendments should be applied retrospectively. This ASU will be effective for our Form 10-K for fiscal 2025 and our Form 10-Q for the first quarter of fiscal 2026. We are currently evaluating the impact this ASU may have on our financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which provides qualitative and quantitative updates to the rate reconciliation and income taxes paid disclosures, among others, in order to enhance the transparency of income tax disclosures, including consistent categories and greater disaggregation of information in the rate reconciliation and disaggregation by jurisdiction of income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. This ASU should be applied prospectively; however, retrospective application is also permitted. This ASU will be effective for our Form 10-K for fiscal 2026. We are currently evaluating the impact this ASU may have on our financial statement disclosures.

2. ACQUISITIONS

Dust Free, LP

On February 6, 2024, we acquired 100% of the outstanding equity of Dust Free, LP ("Dust Free"), based in Royse City, Texas, for an aggregate purchase price of $34.2 million (including $0.6 million cash acquired), comprised of cash consideration of $27.4 million (including a final working capital true-up receipt of $0.5 million) and contingent considerations initially measured at $6.8 million based on Dust Free meeting defined operational and financial targets over a period of 6 years. The cash consideration was funded with cash on hand and borrowings under our existing Revolving Credit Facility (as defined in Note 7). The Dust Free products offer residential and commercial indoor air quality and HVAC/R applications and supplement our Contractor Solutions segment's existing product portfolio. As of the acquisition date, the estimated fair value of the contingent consideration was classified as a long-term liability of $6.8 million, of which $2.1 million was determined using an option pricing model simulation that determines an average projected payment value across numerous iterations and $4.7 million was determined using a scenario-based analysis on forecasted future results. During the year ended March 31, 2024, we incurred $0.7 million in transaction expenses in connection with the Dust Free acquisition, which were included in selling, general and administrative expenses in the Consolidated Statement of Operations under the Contractor Solutions segment.

The Dust Free acquisition was accounted for as a business combination under FASB Accounting Standards Codification Topic 805, Business Combinations ("Topic 805"). The excess of the purchase price over the preliminary fair value of the identifiable assets acquired and liabilities assumed was $3.2 million allocated to goodwill, which represents the value expected to be obtained from owning products that are complementary to our existing HVAC/R offerings and provide a meaningful value proposition to our customers. The preliminary allocation of the fair value of the net assets acquired comprises customer lists ($20.1 million), trademark ($1.6 million), accounts receivable ($2.9 million), cash ($0.6 million), inventory ($4.1 million), other current asset ($0.4 million) and equipment ($3.6 million), net of current liabilities (2.3 million). Customer lists are being amortized over 15 years and the definite-life trademark ($0.6 million) is being amortized over 2 years while the indefinite-life trademark ($1.0 million) and goodwill are not being amortized. The Company's evaluation of the facts and circumstances available as of February 6, 2024, to assign fair values to assets acquired is ongoing. We expect to finalize the purchase price allocation as soon as practicable, but no later than one year from the acquisition date. Goodwill and all intangible assets are deductible and amortized over 15 years for income tax purposes. Dust Free activity has been included in our Contractor Solutions segment since the acquisition date. No pro forma information has been provided due to immateriality.

3. CONSOLIDATION OF VARIABLE INTEREST ENTITY AND REDEEMABLE NONCONTROLLING INTEREST

Whitmore Joint Venture

On April 1, 2021, Whitmore Manufacturing, LLC (“Whitmore”), a wholly-owned subsidiary of CSWI, completed the formation of the joint venture (the "Whitmore JV") with Pennzoil-Quaker State Company dba SOPUS Products (“Shell”), a wholly-owned subsidiary of Shell USA, Inc. that comprises Shell’s U.S. lubricants business.

The Whitmore JV is deemed to be a VIE as the equity investors at risk, as a group, lack the characteristics of a controlling financial interest. The major factor that led to the conclusion that the Company is the primary beneficiary of this VIE is that Whitmore has the power to direct the most significant activities due to its ability to direct the manufacturing decisions of the Whitmore JV. Whitmore JV's total net assets are presented below (in thousands):


	June 30, 2024		March 31, 2024
Cash	$	6,281	$	5,909
Accounts receivable, net	8,362		8,094
Inventories, net	3,148		3,851
Prepaid expenses and other current assets	332		138
Property, plant and equipment, net	14,270		14,241
Intangible assets, net	5,466		5,669
Other assets	412		315
Total assets	$	38,271	$	38,217

Accounts payable	$	5,872	$	6,004
Accrued and other current liabilities	1,052		1,463
Other long-term liabilities	278		206
Total liabilities	$	7,202	$	7,673

During the three months ended June 30, 2024 and 2023, the Whitmore JV generated net income of $0.5 million and $0.9 million, respectively.

The Whitmore JV's LLC Agreement contains a put option that gives either member the right to sell its 50% equity interest in the Whitmore JV to the other member at a dollar amount equivalent to 90% of the initiating member's equity interest determined based on the fair market value of the Whitmore JV's net assets. This put option can be exercised, at either member's discretion, by providing written notice to the other member during the month of July 2024 and every two years afterwards. This redeemable noncontrolling interest is recorded at the higher of the redemption value or carrying value each reporting period. Changes in redeemable noncontrolling interest for the three-month periods ended June 30, 2024 and June 30, 2023 were as follows (in thousands):


	June 30, 2024		June 30, 2023
Balance at beginning of the year	$	19,355	$	18,464

Net income attributable to redeemable noncontrolling interest	259		445



Ending Balance	$	19,614	$	18,909

4. INVENTORIES

Inventories consist of the following (in thousands):


	June 30, 2024		March 31, 2024
Raw materials and supplies	$	46,183	$	44,866
Work in process	5,388		5,194
Finished goods	113,381		109,695
Total inventories	164,952		159,755
Less: Obsolescence reserve	(8,161)		(9,006)
Inventories, net	$	156,791	$	150,749

5. GOODWILL AND INTANGIBLE ASSETS

The changes in the carrying amount of goodwill as of June 30, 2024 and March 31, 2024 were as follows (in thousands):


	Contractor Solutions		Specialized Reliability Solutions		Engineered Building Solutions		Total
Balance at March 31, 2024	$	213,544	$	9,358	$	24,289	$	247,191
Dust Free acquisition	(724)		—		—		(724)


Currency translation	20		5		(90)		(65)
Balance at June 30, 2024	$	212,840	$	9,363	$	24,199	$	246,402

The following table provides information about our intangible assets (in thousands, except years):


		June 30, 2024				March 31, 2024
	Weighted Avg Life (Years)	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Finite-lived intangible assets:
Patents	11	$	15,084	$	(9,491)	$	15,084	$	(9,306)
Customer lists and amortized trademarks	14	346,003		(108,982)		346,136		(103,407)
Non-compete agreements	6	1,000		(499)		1,000		(453)
Other	10	6,325		(2,774)		6,275		(2,649)
		$	368,412	$	(121,746)	$	368,495	$	(115,815)
Trademarks not being amortized:		$	66,232	$	—	$	66,139	$	—

Amortization expenses for the three months ended June 30, 2024 and 2023 were $5.9 million and $5.7 million, respectively. The following table shows the estimated future amortization for intangible assets, as of June 30, 2024, for the remainder of the current fiscal year and the next four fiscal years ending March 31 (in thousands):


2025	$	17,398
2026	23,015
2027	21,937
2028	21,537
2029	21,460
Thereafter	141,319
Total	$	246,666

6. SHARE-BASED COMPENSATION

Refer to Note 5 to our consolidated financial statements included in our Annual Report for a description of the 2015 Equity and Incentive Compensation Plan (the "2015 Plan"). As of June 30, 2024, 298,174 shares were available for issuance under the 2015 Plan.

We recorded share-based compensation expense, net of estimated forfeitures, as follows for the three months ended June 30, 2024 and 2023 (in thousands):


	Three Months Ended June 30,
	2024		2023
Share-based compensation expense	$	3,746	$	2,805
Related income tax benefit (a)	(937)		(701)
Net share-based compensation expense	$	2,809	$	2,104

(a) Income tax benefit is estimated using the statutory rate

Restricted share activity was as follows:


	Three Months Ended June 30, 2024
	Number of Shares	Weighted Average Grant Date Fair Value
Outstanding at March 31, 2024:	221,563	$	166.62
Granted (a)	38,656	328.75
Vested	(39,064)	190.43
Canceled	(818)	153.56
Outstanding at June 30, 2024	220,337	$	178.63

(a) Including incremental shares granted as a result of performance-based awards vested exceeding 100%

During the restriction period, the holders of restricted shares are entitled to vote and receive dividends. Unvested restricted shares outstanding as of June 30, 2024 and 2023 included 96,509 and 98,029 shares (at target), respectively, with performance-based vesting provisions, and a vesting range of 0%-200% based on pre-defined performance targets with market conditions. Performance-based awards accrue dividend equivalents, which are settled upon (and to the extent of) vesting of the underlying award and do not have the right to vote until vested. Performance-based awards are earned upon the achievement of objective performance targets and are payable in common shares. Compensation expense is calculated based on the fair market value as determined by a Monte Carlo simulation and is recognized over a 36-month cliff vesting period. We granted 18,962 and 29,120 awards with performance-based vesting provisions during the three months ended June 30, 2024 and 2023, respectively.