Viskase Companies, Inc. Annual Report 2024

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FY2024 Annual Report · Viskase Companies, Inc.

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Financial Report for
year end

December 31, 2024

CONSOLIDATED FINANCIAL STATEMENTS
OF VISKASE COMPANIES, INC. AND SUBSIDIARIES

1. Financial Statements:

- Report of Independent Certified Public Accountants

- Consolidated Balance Sheets as of December 31, 2024 and 2023

- Consolidated Statements of Operations for the years ended December 31, 2024, 2023
and 2022

- Consolidated Statements of Comprehensive Income (Loss) for the years ended
December 31, 2024, 2023 and 2022

- Consolidated Statements of Stockholders' Equity for the years ended December 31, 2024,
2023 and 2022

- Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023
and 2022

- Notes to Consolidated Financial Statements

2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations (unaudited)

GT.COM
Grant Thornton LLP is a U.S. member firm of Grant Thornton International Ltd (GTIL). GTIL and each of its member firms are
separate legal entities and are not a worldwide partnership.
Board of Directors
Viskase Companies, Inc.
Opinion
We have audited the consolidated financial statements of Viskase Companies, Inc.
(a Delaware corporation) and subsidiaries (the “Company”), which comprise the
consolidated balance sheets as of December 31, 2024 and 2023, and the related
consolidated statements of operations, comprehensive (loss) income, stockholders’
equity, and cash flows for each of the three years then ended, and the related notes
to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in
all material respects, the financial position of the Company as of December 31, 2024
and 2023, and the results of its operations and its cash flows for each of the three
years then ended in accordance with accounting principles generally accepted in the
United States of America.
Basis for opinion
We conducted our audits of the consolidated financial statements in accordance with
auditing standards generally accepted in the United States of America (US GAAS).
Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our report. We are
required to be independent of the Company and to meet our other ethical
responsibilities in accordance with the relevant ethical requirements relating to our
audits. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Responsibilities of management for the financial statements
Management is responsible for the preparation and fair presentation of the
consolidated financial statements in accordance with accounting principles generally
accepted in the United States of America, and for the design, implementation, and
maintenance of internal control relevant to the preparation and fair presentation of
consolidated financial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the consolidated financial statements, management is required to
evaluate whether there are conditions or events, considered in the aggregate, that
raise substantial doubt about the Company’s ability to continue as a going concern for
one year after the date the consolidated financial statements are available to be
issued.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

GRANT THORNTON LLP
171 N. Clark Street, Suite 200
Chicago, IL, 60601

D
+1 312 856 0200
F
+1 312 602 8099

Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated
financial statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance but is not absolute assurance and therefore is
not a guarantee that an audit conducted in accordance with US GAAS will always
detect a material misstatement when it exists. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control. Misstatements are considered material if there is a
substantial likelihood that, individually or in the aggregate, they would influence the
judgment made by a reasonable user based on the consolidated financial statements.
In performing an audit in accordance with US GAAS, we:

Exercise professional judgment and maintain professional skepticism throughout
the audit.

Identify and assess the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error, and design and perform audit
procedures responsive to those risks. Such procedures include examining, on a
test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements.

Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company’s internal
control. Accordingly, no such opinion is expressed.

Evaluate the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as
well as evaluate the overall presentation of the consolidated financial statements.

Conclude whether, in our judgment, there are conditions or events, considered in
the aggregate, that raise substantial doubt about the Company’s ability to
continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit, significant audit
findings, and certain internal control-related matters that we identified during the audit.

Chicago, Illinois
March 28, 2025

VISKASE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except for Number of Shares)

December 31, 2024
December 31, 2023
ASSETS

Current assets:
Cash and cash equivalents
$5,704
$7,862
Receivables, net
74,809
88,950
Inventories
108,968
111,310
Other current assets
46,204
42,674
Total current assets
235,685
250,796
Property, plant and equipment
438,086
436,372
Less accumulated depreciation
(314,351)
(302,027)
Property, plant and equipment, net
123,735
134,345
Right of use assets
19,190
22,309
Other assets, net
10,899
15,676
Intangible assets
13,381
15,799
Goodwill
2,820
3,321
Deferred income taxes
16,011
18,597
Total Assets
$421,721
$460,843
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt
$44,530
$21,747
Accounts payable
35,496
44,768
Accrued liabilities
23,167
39,163
Short-term portion lease liabilities
4,497

4,777

Total current liabilities
107,690
110,455
Long-term debt, net of current maturities
99,064

111,738

Long-term liabilities
-

1,330

Accrued employee benefits
25,418
32,256
Deferred income taxes
2,339
3,021
Long-term lease liabilities
17,220
20,408
Stockholders’ equity:
Common stock, $0.01 par value; 103,995,935 shares issued
and 103,190,665 outstanding
1,040
1,040
Paid in capital
182,343
182,343
Retained earnings
53,613
58,973
Less 805,270 treasury shares, at cost
(298)
(298)
Accumulated other comprehensive loss
(65,386)
(59,200)
Total Viskase stockholders' equity
171,312
182,858
Deficit attributable to non-controlling interest
(1,322)
(1,223)
Total stockholders' equity
169,990
181,635
Total Liabilities and Stockholders' Equity
$421,721
$460,843

See notes to consolidated financial statements.

VISKASE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands)

Year
Year
Year
Ended
Ended
Ended
December
December
December
31, 2024
31, 2023
31, 2022

NET SALES
$403,775
$445,984
$430,834
Cost of sales
335,945
352,221
356,701
GROSS MARGIN
67,830
93,763
74,133
Selling, general and administrative
48,421
52,436
50,283
Amortization of intangibles
1,609
1,606
1,576
Asset impairment charge
448

338

Restructuring expense
1,917

OPERATING INCOME
15,435
39,383
22,247
Interest income
-

Interest expense, net
11,032
12,018
8,433
Other expense, net
10,532
10,395
4,396
(LOSS) INCOME BEFORE INCOME TAXES
(6,129)
16,970
9,423
Income tax (benefit) provision
(670)
3,534
7,139
NET (LOSS) INCOME
($5,459)
$13,436
$2,284
Less: net loss attributable to noncontrolling interests
(99)
(70)
(245)

Net (loss) income attributable to Viskase Companies, Inc
($5,360)
$13,506
$2,529
WEIGHTED AVERAGE COMMON SHARES
- BASIC AND DILUTED
103,190,665
103,190,665
103,190,665

PER SHARE AMOUNTS:
EARNINGS PER SHARE
- BASIC AND DILUTED
($0.05)
$0.13
$0.02

See notes to consolidated financial statements.

VISKASE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(In Thousands)

Year
Year
Year
Ended
Ended
Ended
December
December
December
31, 2024
31, 2023
31, 2022
($5,459)
$13,436
$2,284
Net (loss) income
Other comprehensive (loss) income, net of tax
Pension liability adjustment
1,155
2,634
11,304
Foreign currency translation adjustment
(7,341)
5,280
(4,779)
Other comprehensive (loss) income, net of tax
(6,186)
7,914
6,525
Comprehensive (loss) income
($11,645)
$21,350
$8,809
Less: comprehensive loss attributable to noncontrolling
interests
(99)
(70)
(245)

Net comprehensive (loss) income attributable to Viskase
Companies, Inc
($11,546)
$21,420
$9,054

See notes to consolidated financial statements.

VISKASE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In Thousands)

Accumulated other
Total Viskase
Total
Common
Paid in
Treasury
Retained
comprehensive
stockholders’
Non-controlling
stockholders’
stock
capital
stock
earnings
loss
equity
Interest
equity
Balance December 31, 2021
$1,040
$182,343
($298)
$42,938
($73,639)
$152,384
($908)
$151,476
Net income (loss)
-

2,529
-

2,529
(245)
2,284

Foreign currency translation adjustment
-

(4,779)

(4,779)
-

(4,779)

Pension liability adjustment, net of tax
-

11,304

11,304
-

11,304

Balance December 31, 2022
$1,040
$182,343
($298)
$45,467
($67,114)
$161,438
($1,153)
$160,285
Net income (loss)
-

$13,506
-

13,506

(70)

13,436

Foreign currency translation adjustment
-

5,280

Pension liability adjustment, net of tax
-

2,634

Balance December 31, 2023
$1,040
$182,343
($298)
$58,973
($59,200)
$182,858
(1,223)
$
181,635
$
Net (loss)
-

(5,360)

(99)

(5,459)

Foreign currency translation adjustment
-

(7,341)

Pension liability adjustment, net of tax
-

1,155

Balance December 31, 2024
$1,040
$182,343
($298)
$53,613
($65,386)
$171,312
($1,322)
$169,990

See notes to consolidated financial statements.

VISKASE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

Year
Year
Year
Ended
Ended
Ended
December
December
December
31, 2024
31, 2023
31, 2022
Cash flows from operating activities:
Net income (loss)
($5,459)
$13,436
$2,284

Adjustments to reconcile net income (loss) to net cash

provided by operating activities:
Depreciation and amortization
23,678
25,223
27,303
Amortization of deferred financing fees
484
464
403
Deferred income taxes
787

3,241

(99)
Loss on disposition/impairment of assets
556
449
337
Bad debt and accounts receivable provision
198

175
187
Changes in operating assets and liabilities:
Receivables
11,900
598
(8,795)
Inventories
366
(5,934)
(13,019)
Other current assets
(5,180)
(1,104)
3,509
Accounts payable
(8,016)
480
9,109
Accrued liabilities
(16,044)
6,508
(2,186)
Accrued employee benefits
(2,896)
(699)
(1,636)
Other assets
4,678
748
(4,349)
Other
(1,683)
580
(2,669)
Total adjustments
8,828
30,729
8,095
Net cash provided by operating activities
3,369
44,165
10,379
Cash flows from investing activities:
Capital expenditures
(15,279)
(14,470)
(22,336)
Proceeds from disposition of assets
-

10
149
Net cash used in investing activities
(15,279)
(14,460)
(22,187)
Cash flows from financing activities:
Deferred financing costs
-

(16)
(294)
Proceeds from short-term debt
21,500
10,101
14,000
Repayment of short-term debt
-

(30,240)

Repayment of long-term debt
(11,250)

(9,126)

(7,500)

Repayment of capital lease
-

(11)
(12)
Net cash (used in) provided by financing activities
10,250
(29,292)
6,194
Effect of currency exchange rate changes on cash
(498)
(1,334)
4,521
Net decrease in cash and equivalents
(2,158)
(921)
(1,093)
Cash and cash equivalents at beginning of period
7,862
8,783
9,876
Cash and cash equivalents at end of period
$5,704
$7,862
$8,783
Supplemental cash flow information:
Interest paid less capitalized interest
$10,342
$11,418
$7,427
Income taxes paid
$2,483
$4,060
$7,324

See notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In Thousands)

1. Summary of Significant Accounting Policy

Nature of Operations

Viskase Companies, Inc. together with its subsidiaries (“we” or the “Company”) is a
producer of non-edible cellulosic, fibrous and plastic casings used to prepare and
package processed meat products, and provides value-added support services relating
to these products, for some of the largest global consumer products companies. We
were incorporated in Delaware in 1970. The Company operates nine manufacturing
facilities in North America, Europe, South America, and Asia and, as a result, is able to sell
its products in nearly one hundred countries throughout the world.

Seasonality

Historically, our domestic sales and profits have been seasonal in nature, increasing in
the spring and summer months. Sales outside of the United States follow a relatively
stable pattern throughout the year.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company.
Intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates in the Preparation of Financial Statements

The financial statements are prepared in accordance with generally accepted
accounting principles (“GAAP”) in the United States of America and include the use of
estimates and assumptions that affect a number of amounts included in the Company’s
financial statements, including, among other things, pensions and other postretirement
benefits and related disclosures, reserves for excess and obsolete inventory, allowance
for credit losses, and income taxes. Management bases its estimates on historical
experience and other assumptions that we believe are reasonable. If actual amounts
are ultimately different from previous estimates, the revisions are included in the
Company’s results for the period in which the actual amounts become known.
Historically, the aggregate differences, if any, between the Company’s estimates and
actual amounts in any year have not had a significant effect on the Company’s
consolidated financial statements.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers cash equivalents to
consist of all highly liquid debt investments purchased with an initial maturity of
approximately three months or less. Due to the short-term nature of these instruments, the
carrying values approximate the fair market value. Of the cash held on deposit in the
U.S., approximately $518 of the cash balance was in excess of amounts insured by the
Federal Deposit Insurance Corporation. The Company performs periodic evaluations of
these institutions for relative credit standing and has not experienced any losses as a result
of its cash concentration. Consequently, no significant concentrations of credit risk are
considered to exist.

Receivables, net

Trade accounts receivable are classified as current assets and are reported net of
allowance for credit losses, which includes the evaluation of expected credit losses
following the adoption of ASC Topic 326. This estimated allowance is primarily based
upon our evaluation of the future expected loss for the asset. The Company estimates
this using the financial condition of each customer, each customer’s ability to pay and
the economic conditions of the country the customer resides in. For all trade accounts
receivable, the Company defines “past due” as any payment, that is at least 15 days
past the contractual due date. For the year ended December 31, 2024, there have been
expenses recognized of $198 related to expected credit losses.

Inventories

Inventories are valued at the lower of cost or net realizable value. Cost is determined by
using the first-in, first-out (“FIFO”) basis method.

Property, Plant and Equipment

The Company carries property, plant and equipment at cost, less accumulated
depreciation. Property and equipment additions include acquisition of property and
equipment and costs incurred for computer software purchased for internal use including
related external direct costs of materials and services and payroll costs for employees
directly associated with the project. Upon retirement or other disposition, cost and
related accumulated depreciation are removed from the accounts, and any gain or loss
is included in results of operations. Depreciation is computed on the straight-line method
using a half year convention over the estimated useful lives of the assets ranging from (i)
building and improvements - 10 to 32 years, (ii) machinery and equipment - 4 to 12 years,
(iii) furniture and fixtures - 3 to 12 years, (iv) auto and trucks - 2 to 5 years, (v) data
processing – 3 to 7 years and (vi) leasehold improvements - shorter of lease or useful life.

In the ordinary course of business, we lease certain equipment, consisting mainly of autos,
and certain real property. Real property consists of manufacturing, distribution and office
facilities.

Deferred Financing Costs

Deferred financing costs are presented in the balance sheet as a direct deduction from
the carrying amount of debt liability and amortized as expense using the effective
interest rate method over the expected term of the related debt agreement.
Amortization of deferred financing costs is classified as interest expense.

Intangible Assets and Goodwill

The Company has recognized definite lived intangible assets for patents and trademarks,
customer relationships, technologies and in-place leases. The intangible assets are
amortized on the straight-line method over an estimated weighted average useful life of
12 years for patents and trademarks, 20 years for customer relationships, 13 years for
technologies and 14 years for in-place leases.

Our estimates of the useful lives of finite-lived intangible assets consider judgments
regarding the future effects of obsolescence, demand, competition and other

economic factors. We conduct impairment tests when events or changes in
circumstances indicate that the carrying value of these finite-lived assets may not be
recoverable. Undiscounted cash flow analyses are used to determine if an impairment
exists. If an impairment is determined to exist, the loss is calculated based on the
estimated fair value of the assets.

Current accounting guidance provides entities an option of performing a qualitative
assessment (a "step-zero" test) before performing a quantitative analysis. If the entity
determines, on the basis of certain qualitative factors, that it is more-likely than- not that
the goodwill is not impaired, the entity would not need to proceed to the two step
impairment testing process (quantitative analysis) as prescribed in the guidance. During
fourth quarter 2024, the Company performed a “step zero” test of its goodwill and
concluded that there was an impairment of $350 based on this guidance.

Long-Lived Assets

The Company continues to evaluate the recoverability of long-lived assets including
property, plant and equipment, trademarks and patents. Impairments are recognized
when the expected undiscounted future operating cash flows derived from long-lived
assets are less than their carrying value. If impairment is identified, valuation techniques
deemed appropriate under the particular circumstances will be used to determine the
asset’s fair value. The loss will be measured based on the excess of carrying value over
the determined fair value. The review for impairment is performed whenever events or
changes in circumstances indicate that the carrying amount of assets may not be
recoverable. No events or changes in circumstances were identified in the current year
that would indicate a change in carrying amount.

Shipping and Handling

The Company periodically bills customers for shipping charges. These amounts are
included in net sales, with the associated costs included in cost of sales.

Repairs and Maintenance

Routine repairs and maintenance are charged to operations as incurred. Improvements
and major repairs, which extend the useful life of an asset, are capitalized and
depreciated.

Pensions and Other Postretirement Benefits

The Company uses appropriate actuarial methods and assumptions in accounting for its
defined benefit pension plans and non-pension postretirement benefits.

Actual results that differ from assumptions used are accumulated and amortized over
future periods and, accordingly, generally affect recognized expense and the recorded
obligation in future periods. Therefore, assumptions used to calculate benefit obligations
as of the end of a fiscal year directly impact the expense to be recognized in future
periods. The primary assumptions affecting the Company’s accounting for employee
benefits as of December 31, 2024 are as follows:

• Long-term rate of return on plan assets: The required use of the expected long-term
rate of return on plan assets may result in recognized returns that are greater or less than
the actual returns on those plan assets in any given year. Over time, however, the

expected long-term rate of return on plan assets is designed to approximate actual
earned long-term returns. The Company uses long-term historical actual return
information, the mix of investments that comprise plan assets, and future estimates of
long-term investment returns by reference to external sources to develop an assumption
of the expected long-term rate of return on plan assets. The expected long-term rate of
return is used to calculate net periodic pension cost. In determining its pension
obligations, the Company is using a long-term rate of return on U.S. plan assets of 6.00%
for December 31, 2024. The Company is using a long-term rate of return on French plan
assets of 2.60% for 2024. The German pension plan has no assets.

• Discount rate: The discount rate is used to calculate future pension and postretirement
obligations. The Company is using a Mercer Bond yield curve in determining its pension
obligations. The Company is using a discount rate of 5.70% for December 31, 2024. The
Company is using a weighted average discount rate of 3.49% on its non-U.S. pension
plans for December 31, 2024.

Income Taxes

Deferred tax assets and liabilities are measured using enacted tax laws and tax rates
expected to apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect on deferred tax assets and liabilities
due to a change in tax rates is recognized in income in the period that includes the
enactment date. In addition, the amounts of any future tax benefits are reduced by a
valuation allowance to the extent such benefits are not expected to be realized on a
more likely than not basis. Interest and penalties related to unrecognized tax benefits are
included as a component of tax expense.

Other Comprehensive Income (Loss)

Other comprehensive income (loss) includes all other non-stockholder changes in equity.
Changes in other comprehensive income (loss) in 2024, 2023 and 2022 resulted from
changes in foreign currency translation and pension liability.

Revenue Recognition

The Company’s revenues are comprised of product sales. All revenue is recognized when
the Company satisfies its performance obligation(s) under the contract (either implicit or
explicit) by transferring the promised product to its customer when its customer obtains
control of the product. A performance obligation is a promise in a contract to transfer a
distinct product or service to a customer. A contract’s transaction price is allocated to
each distinct performance obligation. Substantially all of the Company’s contracts have
a single performance obligation, as the promise to transfer products is not separately
identifiable from other promises in the contract and, therefore, not distinct.

Revenue is measured as the amount of consideration the Company expects to receive
in exchange for transferring products or providing services. The nature of the Company’s
contracts gives rise to several types of variable consideration. As such, revenue is
recorded net of estimated discounts, rebates and allowances. These estimates are
based on historical experience, anticipated performance and the Company’s best
judgment at the time. Because of the Company’s certainty in estimating these amounts,
they are included in the transaction price of its contracts.

Sales, value add, and other taxes collected from customers and remitted to
governmental authorities are accounted for on a net (excluded from revenues) basis.

Substantially all of the Company’s revenue is from products transferred to customers at a
point in time. The Company recognizes revenue at the point in time in which the customer
obtains control of the product, which is generally when product title passes to the
customer upon shipment. In certain cases, title does not transfer and revenue is not
recognized until the customer has received the products at its physical location or at
port.

Financial Instruments

The Company routinely enters into fixed price natural gas agreements which require us
to purchase a portion of our natural gas each month at fixed prices. These fixed price
agreements qualify for the “normal purchases” scope exception under derivative and
hedging standards, therefore the natural gas purchases under these contracts were
expensed as incurred and included within cost of sales. As of December 31, 2024, future
annual minimum purchases remaining under the agreement are $2,533.

The Company’s financial instruments include cash and cash equivalents, accounts
receivable and accounts payable. The carrying amounts of these financial assets and
liabilities
approximate
fair
value
due
to
the
short
maturities
of
these
instruments. Management believes the fair value of the Company’s revolving loans
approximate the carrying value due to credit risk or current market rates, which
approximate the effective interest rates on those instruments. The fair value of the
Company’s term loans is estimated by discounting the future cash flow using the
Company’s current borrowing rates for similar types and maturities of debt.

Leases

The Company accounts for leases under FASB ASC Topic 842, Leases, which has resulted
in the company reporting a right of use (“ROU”) asset and lease liability related to
operating leases reported on our balance sheet. Financing leases under current U.S.
GAAP are classified and accounted for in substantially the same manner as capital
leases under prior U.S. GAAP and therefore, we do not distinguish between financing
leases and capital leases unless the context requires. The determination of whether an
arrangement is or contains a lease occurs at inception. We have elected the practical
expedient to include both the lease component and the non-lease component as a
single component when accounting for each lease and calculating the resulting lease
liability and ROU asset. The following is our accounting policy for leases in which we are
the lessee.

Leases are classified as either operating or financing by the lessee depending on whether
the lease terms provide for control of the underlying asset to be transferred to the lessee.
When control transfers to the lessee, we classify the lease as a financing lease. All other
leases are recorded as operating leases. For leases with an initial lease term in excess of
twelve months, we record a ROU asset with a corresponding lease liability in our balance
sheet. We have elected the practical expedient for all leases less than 12 months to not
record a ROU asset or corresponding lease liability. ROU assets represent our right to use
an underlying asset for the lease term and lease liabilities represent our obligation to
make lease payments arising from the lease. ROU assets and lease liabilities are
recognized at commencement of the lease based on the present value of lease

payments over the lease term. ROU assets are adjusted for any lease payments made
on or before commencement of the lease, less any lease incentives received.

The lease liability represents future lease payments for lease and non-lease components
discounted for present value. Lease payments that may be included in the lease liability
include fixed payments, variable lease payments that are based on an index or rate and
payments for penalties for terminating the lease if the lessee is reasonably certain to utilize
a termination option, among others. Certain of our leases contain rent escalation clauses
that are specifically stated in the lease and these are included in the calculation of the
lease liability. Variable lease payments for lease and non-lease components which are
not based on an index or rate are excluded from the calculation of the lease liability and
are recognized in the statement of operations during the period incurred.

We utilize discount rates to determine the net present value of our gross lease obligations
when calculating the lease liability and related ROU asset. In cases in which the rate
implicit in the lease is readily determinable, we utilize that discount rate for purposes of
the net present value calculation. In most cases, our lease agreements do not have a
discount rate that is readily determinable and therefore we utilize an estimate of our
incremental borrowing rate. Our incremental borrowing rate is determined at lease
commencement or lease modification and represents the rate of interest we would have
to pay to borrow on a collateralized basis over a similar term an amount equal to the
lease payments in a similar economic environment. For adoption of the new standard,
the rate was determined at the adoption date.

The lease term is determined by taking into account the initial period as stated in the
lease contract and adjusted for any renewal options that the company is reasonably
certain to exercise as well as any period of time that the lessee has control of the space
before the stated initial term of the lease. If we determine that we are reasonably certain
to exercise a termination option, the lease term is then adjusted to account for the
expected termination date.

Operating lease expense is recorded as a single expense recognized on a straight-line
basis over the lease term. Financing lease expense consists of interest expense on the
financing lease liability and amortization of the ROU financing lease asset on a straight-
line basis over the lease term.

New Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) –
Improvements to Income Tax Disclosures, which requires enhanced income tax
disclosures that reflect how operations and related tax risks, as well as how tax planning
and operational opportunities, affect the tax rate and prospects for future cash flows.
This standard is effective for the Company beginning January 1, 2025 with early adoption
permitted. We are currently assessing the impact of adopting this standard on our
consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) –
Improvements to Reportable Segment Disclosures, which includes requirements for more
robust disclosures of significant segment expenses and measures of a segment’s profit
and loss used in assessing performance. This standard is effective for the Company’s
annual period beginning January 1, 2024 and interim periods beginning January 1, 2025
with early adoptions permitted. We are currently assessing the impact of adopting this
standard on our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting
Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), which
requires disclosure of specific information about costs and expenses within relevant
expense captions on the face of the income statement, qualitative descriptions for
expense captions not specifically disaggregated quantitatively, and the total amount
and definition of selling expenses for interim and annual reporting periods. This standard
is effective for the Company’s annual reporting period beginning January 1, 2027 and
interim reporting periods beginning January 1, 2028 and should be applied on a
retrospective or prospective basis, with early adoption permitted. We are currently
assessing the impact of adopting this standard on our consolidated financial statements

2. Cash and cash equivalents

December 31, 2024
December 31, 2023
Cash and cash equivalents
$5,704
$7,862

As of December 31, 2024, and December 31, 2023, cash held in foreign banks was $5,069
and $7,218, respectively.

As of December 31, 2024, and December 31, 2023, letters of credit for $685 and $735,
respectively were outstanding under our New Senior Credit Facility.

3. Receivables, net

December 31, 2024
December 31, 2023
Accounts receivable, gross
$77,466
$91,858
Less allowance for credit losses
(2,657)
(2,908)
$74,809
$88,950

December 31, 2024
December 31, 2023
December 31, 2022
Beginning balance
$2,908
$3,847
$3,404
Provision (recoveries)
198
(132)
187
Write-offs
(454)
-
373
Other and translation
5
(807)
(117)
Ending balance
$2,657
$2,908
$3,847

4. Inventories

December 31, 2024
December 31, 2023
Raw materials
$29,991
$35,573
Work in process
42,940
51,872
Finished products

36,037
23,865

$108,968
$111,310

5. Property, Plant and Equipment, Net

Depreciation expense associated with property, plant and equipment was $22,443,
$23,617 and $25,727 for the years ended December 31, 2024, 2023 and 2022, respectively.

December 31, 2024
December 31, 2023
Land and improvements

$1,848
$1,939
Buildings and improvements

52,847
53,613
Machinery and equipment
371,661
372,311
Construction in progress

11,730
8,509

$438,086
$436,372

Accumulated depreciation
December 31, 2024
December 31, 2023

Land and improvements

$520
$496
Buildings and improvements

27,419
26,790
Machinery and equipment
286,412
274,741

$314,351
$302,027

6. Other Assets

December 31, 2024
December 31, 2023
Other taxes receivable
$10,295
$15,048
Other
604
628
$10,899
$15,676

7. Accrued Liabilities

December 31, 2024
December 31, 2023
Compensation and employee benefits
$8,559
$15,919
Taxes payable
8,877
17,171
Accrued volume and sales rebates
1,929
2,409
Other
3,805
3,664
$23,170
$39,163

8. Debt Obligations
December 31, 2024
December 31, 2023
Short-term debt:
Senior credit facility
$34,625
$11,250
Europe Line of Credit
9,905
10,497
Total short-term debt
44,530
21,747
Long-term debt:
Senior credit facility, net
$98,535
$111,176
Other
529
562
Total long-term debt
99,064
111,738
Total debt
$143,594
$133,485

Senior Credit Facility

On October 9, 2020, the Company and certain of its subsidiaries, entered into that
certain Credit Agreement (the “Credit Agreement”) with the various lenders named
therein and Bank of America, N.A., as administrative agent for the lenders (the
“Administrative Agent”), providing for a $150,000 term loan (the “Term Loan”) and a
$30,000 revolving credit facility (the “Revolving Credit Facility” and together with the
Term Loan, the “Senior Credit Facility”) as amended by the First Amendment to Credit
Agreement dated as of August 13, 2021, the Second Amendment to Credit Agreement
dated as of August 10, 2022 and as further amended by the Limited Waiver and Third
Amendment to Credit Agreement dated as of February 14, 2025 (the “Third
Amendment”) as described below.

The Second Amendment to the Senior Credit Facility increased the commitment of the
New Revolving Credit Facility to $37,000 and transitioned Term Loans on September 30,
2022 and Revolving Loans on August 30,2022 from LIBOR Loans to SOFR Loans. Amended
terms of the facility are stated below.

The Third Amendment includes a waiver on covenants for the year ended December
31, 2024, and a relief period for year 2025 (the “Covenant Relief Period”). During the
Covenant Relief period, the consolidated leverage ratio will be increased to 4.00X
through December 31, 2025. The consolidated fixed charge coverage ratio will be
modified to include only maintenance capital expenditures and a year-to-date build
basis for quarter end calculation. On December 31, 2025, the consolidated fixed
charge coverage ratio will return to an LTM basis. During the Covenant Relief Period,
restricted payments, permitted acquisitions and other investments as defined by the
Credit Agreement are not allowed and the accordion feature of the credit facility,
which allowed for an increase in borrowings under the facility has been suspended.

The interest rates per annum applicable to the Amended Senior Credit Facility (other than
in respect of Swingline Loans) will be SOFR, but in any event, not less than 0.00%, plus the
Applicable Rate (as defined below), or, for U.S. dollar denominated loans only, made to
the Company at the option of the Company, the Base Rate, defined as the highest of:
(a) the Federal Funds Rate plus one-half percent (0.50%); (b) the Bank of America prime
rate; and (c) the one (1) month SOFR (adjusted daily) plus one percent (1.00%), but in
any case not less than 1.00%, plus the Applicable Rate. Applicable Rate means, with
respect to the Amended Senior Credit Facility, a percentage per annum to be
determined in accordance with the applicable pricing grid set forth in the Amended

Senior Credit Facility based upon the Company’s Consolidated Coverage Ratio as
reflected in a quarterly Compliance Certificate. Each Swingline Loan shall bear interest
at the Base Rate plus the Applicable Rate for Base Rate loans under the New Revolving
Credit Facility. As of December 31, 2024, our current interest rate is 6.94%.

The Amended Senior Credit Facility requires the Company to repay principal of the New
Term Loan at the rate of 5% of the original principal balance during each of the first two
years, 7.5% during the third and fourth years and 10% of the original principal balance
during the fifth year. The maturity date on the Amended Senior Credit Facility is August
13, 2026.

The Company may prepay the Amended Senior Credit Facility, in whole or in part, at any
time without premium or penalty, subject to reimbursement of the Lenders’ breakage
and redeployment costs in the case of prepayment of LIBOR borrowings and foreign
currency borrowings bearing interest at a rate other than LIBOR. Each such prepayment
of the New Term Facility shall be applied as directed by the Company. The unutilized
portion of the commitments under the Amended Senior Credit Facility may be
irrevocably reduced or terminated by the Company at any time without penalty.

The Amended Senior Credit Facility is guaranteed by each existing and future direct and
indirect wholly owned material domestic Restricted Subsidiary and foreign Restricted
Subsidiary of the Company (other than any Brazilian subsidiary). The Amended Senior
Credit Facility is secured by substantially all assets of the Company and its material
domestic Restricted Subsidiaries, with the exception of real property.

The Amended Senior Credit Facility contains various covenants which restrict the
Company’s ability to, among other things, incur indebtedness, create liens on our assets,
make investments, enter into merger, consolidation or acquisition transactions, dispose
of assets (other than in the ordinary course of business), make certain restricted
payments, enter into sale and leaseback transactions and transactions with affiliates, in
each case subject to permitted exceptions. The Amended Senior Credit Facility also
requires that we comply with certain financial covenants, including meeting a
consolidated leverage ratio and consolidated fixed charge coverage ratio. The
Company has received a waiver of covenants for the period ending December 31, 2024.

Foreign Lines of Credit

In its foreign operations, the Company has unsecured lines of credit with various banks
providing approximately $12,000 of availability. There were borrowings of $9,905 under
the lines of credit at December 31, 2024 and borrowings of $10,498 under the lines of
credit at December 31, 2023. As of December 31, 2024, our current interest rate is 4.81%.

Debt Maturity

The aggregate maturities of debt (1) for each of the next five years are:

2025
2026
2027
2028
2029
Thereafter
Term Loan
$ 13,125
$ 99,375
$ - $ - $ -
$ -
Revolving Credit Facility
-
21,500
-
-
-
-
Other
9,905
835
-
-
-
-
$ 23,030
$ 121,710
$ -
$ -
$ -
$ -

(1) The aggregate maturities of debt represent amounts to be paid at maturity and not the
current carrying value of the debt.

9. Leases

We have operating leases primarily for real estate, equipment, and vehicles. Our lease
agreements do not contain any material residual value guarantees or material restrictive
covenants. ROU assets and related lease liabilities are recorded on the balance sheet
for leases with an initial term in excess of twelve months.

ROU assets and lease liabilities are as follows:

December 31, 2024
December 31, 2023
Operating Leases:
ROU assets
$ 19,190
$ 22,309
Lease liabilities
21,717
25,185

The following is an analysis of leased property under financing leases by major classes as
of December 31, 2024 and December 31, 2023.

December 31,
December 31,
2024
2023
Building and improvements
$453
$453
Machinery and equipment
3,599
3,535
Less: Accumulated depreciation
(4,052)
(3,988)
$0
$0

Additional information with respect to our operating and finance leases as of December
31, 2024 is presented below.

Operating
Weighted average remaining lease term (years)
8.49
Weighted average discount rate
7.42%

Lease expense consists of the following:

December 31, 2024
December 31, 2023
Operating lease rent expense
4,591
$
5,255
$
Financing Leases:
Amortization of ROU assets
-

Interest expense on lease liabilities
-

-
$
10
$

Cash flow information related to leases is as follows:
December 31, 2024
December 31, 2023
Cash Paid For Amounts Included in the Measurement of Lease Liabilities:
Cash used in operating activities (operating leases)
4,564
$
5,164
$
Cash used in operating activities (financing leases)
-

Supplemental Cash Flow Information:
ROU assets obtained in exchange for lease obligations (operating leases)
239
$
114
$

Maturities of operating lease liabilities as of December 31, 2024 are as follows:

Year
Operating Leases
2024
4,497
$
2025
3,928

2026
3,714

2027
3,666

2028
2,579

Thereafter
11,476

Total lease payments
29,860

Less: discounted interest
(8,143)

21,717
$

10. Retirement Plans

The Company has contributed $3,099 and $2,236 to pension benefits in the U.S. during
the years ended December 31, 2024 and December 31, 2023, respectively.

The Company and its subsidiaries have defined contribution and defined benefit plans
varying by country and subsidiary.

The Company’s operations in the United States, France, and Germany historically offered
defined benefit retirement plans (“Plan”) to their employees. Most of these benefits have
been terminated, resulting in various reductions in liabilities and curtailment gains.

Included in accumulated other comprehensive loss, net of tax is $(20,935) as of
December 31, 2024. The following amounts not yet recognized in net periodic benefit
cost:

U.S. Pension Benefits
Non U.S. Pension Benefits
Net actuarial (loss) gain
Prior service credit
($10,410)
1,741
1
19

Amounts included in other comprehensive income (loss) expected to be recognized as
a component of net periodic benefit cost for the year ending December 31, 2025 are:

U.S. Pension Benefits
Non U.S. Pension Benefits
Net actuarial (loss) gain
($88)
$82

The measurement date for all defined benefit plans is December 31. The year-end status
of the plans is as follows:
U.S. Pension Benefits
Non U.S. Pension Benefits
2024
2023
2024
2023

Change in benefit obligation:
Projected benefit obligation at beginning of
year
$95,385
$97,738
$20,578
$17,761
Service cost
-

296
297
Interest cost
4,988
5,185
644
737
Plan amendments
-

(133)
Actuarial (gain) loss
(3,124)
(487)
(98)
1,962
Benefits paid
(7,563)
(7,051)
(942)
(686)
Currency translation
-

(1,230)
640
Estimated benefit obligation at end of year
$89,686
$95,385
$19,248
$20,578
Change in plan assets:
Fair value of plan assets at beginning of year
$87,538
$82,693
$1,227
$1,367
Actual return on plan assets
4,202
9,661
39
33
Employer contribution
3,099
2,236
609

617

Plan settlements
-

(154)

Benefits paid
(7,563)
(7,052)
(942)

(686)

Currency translation
-

(75)

Fair value of plan assets at end of year
$87,276
$87,538
$858
$1,227
Unfunded status of the plan
($2,410)
($7,847)
($18,390)
($19,351)

U.S. Pension Benefits
Non U.S. Pension Benefits
2024
2023
2024
2023
Amounts recognized in statement of financial
position:
Current liabilities
($73)
($73)
($70)
($798)
Noncurrent liabilities
(2,337)
(7,774)
(18,319)
(18,553)
Net amount recognized
($2,410)
($7,847)
($18,389)
($19,351)

The funded status of these pension plans as a percentage of the projected benefit
obligation was 81% in 2024 compared to 77% in 2023. The actuarial gain for 2024 was
mainly due to the discount rate on U.S. pension benefits and changes in demographics
on the foreign plans.

U.S. Pension Benefits
Non U.S. Pension Benefits
2024
2023
2024
2023
Projected benefit obligation
$89,686
$95,385
$19,248
$20,578
Fair value of plan assets
$87,276
$87,538
$858
$1,227
Information for defined benefit plans with accumulated benefit obligations in excess of plan assets:
U.S. Pension Benefits
Non U.S. Pension Benefits
2024
2023
2024
2023
Accumulated benefit obligation
$89,686
$95,385
$19,248
$20,578
Fair value of plan assets
$87,276
$87,538
$858
$1,227

In connection with our adoption of FASB issued ASU No. 2017-07, Improving the
Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,
the components of net periodic benefit cost other than the service cost component are
included in the line item other expense in the income statement.

Components of net periodic benefit cost for the years ended December 31:

Non U.S. Pension Benefits
2024
2023
2022
2024
2023
2022
Component of net period benefit cost
Service cost
-
$
-
$
-
$
$308
$296
$412
Interest cost
4,988
5,185
3,655
672
725
298
Expected return on plan assets
(5,086)
(4,774)
(5,029)
(31)
(36)
(35)
Amortization of prior service cost
-

10
Amortization of actuarial loss
185

474

752

(52)

(326)

$87
885
$
(622)
$
$900
$669
$732
U.S. Pension Benefits

Weighted average assumptions used to determine the benefit obligation and net
periodic benefit cost as of December 31:

U.S. Pension Benefits
Non U.S. Pension Benefits
2024
2023
2024
2023
Discount rate
5,70%
5.48%
3.49%
4.11%
Expected return on plan assets
6.00%
6.00%
2.60%
2.60%
Rate of compensation increase
N/A
N/A
3.28%
3.30%

The Company evaluates its discount rate assumption annually as of December 31 for
each of its retirement-related benefit plans. The Company is using a Mercer bond model
for determining its U.S. pension benefits.

The Company’s expected return on plan assets is evaluated annually based upon a
study which includes a review of anticipated future long-term performance of individual
asset classes, and consideration of the appropriate asset allocation strategy to provide
for the timing and amount of benefits included in the projected benefit obligation. While
the study gives appropriate consideration to recent fund performance and historical
returns, the assumption is primarily a long-term prospective rate.

The Company’s overall investment strategy is a glide path to manage the plan to a fully
funded status through a mix of approximately 75% of investments for long-term growth
and 25% for near-term benefit payments with a wide diversification of asset types, fund
strategies, and fund managers. The target allocations for plan assets are 45% equity
securities, 5% in alternatives and 48% to fixed income investments. Equity securities
primarily include investments in large-cap, mid-cap and small-cap companies primarily
located in the United States and international developed markets. Fixed income
securities include corporate bonds of companies from diversified industries, mortgage-
backed securities, and U.S. Treasuries. Other types of investments include investments in
hedge funds that follow several different strategies.

Plan management uses the following methods and significant assumptions to estimate
fair value of investments.

Money market – overnight bank deposits and money market mutual funds maintaining
at all times $1.00 Net Asset Value (“NAV”).

US Government and agency obligations – U.S. Treasury bonds, notes and other
government obligations.

Exchange traded funds – marketable securities tracking asset baskets traded on active
markets.

Mutual funds - Valued at the net asset value (“NAV”) of shares or units held by the Plan
at year-end which is obtained from an active market or at share or unit prices provided
by the fund manager with significant observable inputs.

Hedge funds - Value provided by the administrator of the fund. The pricing for these funds
is provided monthly by the fund to determine the quoted price.

Common stocks - marketable corporate equity securities traded on active markets.
The fair values of the Company’s pension plan asset allocation at December 31, 2024
and 2023, by asset category are as follows:

Fair Value Measurement at
December 31, 2024
Quoted
Prices in
Active
Markets for
Identical
Assets
Significant
Observable
Inputs
Significant
Unobservable
Inputs
Total
(Level 1)
(Level 2)
(Level 3)
Money market
$2,490
$2,490
-
$
-
$
US Government and agency obligations
56,675

1,161

55,514

Exchange traded funds
-

Mutual funds
69

Common stocks
28,900

28,900

Total Assets in the fair value hierarchy
$88,134
$32,620
$55,514
-

Fair Value Measurement at
December 31, 2023
Quoted
Prices in
Active
Markets for
Identical
Assets
Significant
Observable
Inputs
Significant
Unobservable
Inputs
Total
(Level 1)
(Level 2)
(Level 3)
Money market
$2,448
$2,448
-
$
-
$
US Government and agency obligations
40,435

1,519

38,916

Exchange traded funds
10,699

10,699

Mutual funds
19,100

19,100

Common stocks
16,083

16,083

Total Assets in the fair value hierarchy
$88,765
$49,849
$38,916
-

The following table provides a summary of the estimated benefit payments for the
postretirement plans for the next five fiscal years and thereafter.

Total Estimated Benefit
Payments
U.S.
Non U.S
2025
$7,975
$744
2026

7,949
782
2027

7,989
826
2028

7,901
852
2029

7,745
1,214
Thereafter
35,858
6,209

The Company’s expected contribution for the 2025 fiscal year is $2,304 for the U.S.
pension plan. There is no funding requirement for non-U.S. pension plans.

Savings Plans

The Company also has defined contribution savings and similar plans for eligible
employees, which vary by subsidiary. The Company’s aggregate contributions to these
plans are based on eligible employee contributions and certain other factors. The
Company expenses for these plans were $1,188, $1,218 and $1,160 in 2024, 2023 and
2022, respectively.

International Plans

The Company maintains various pension and statutory separation pay plans for its
European employees. The expense, not including the French and German pension plan,
in 2024, 2023, and 2022 was $(221), $1,767 and $(431), respectively. As of their most recent
valuation dates, for those plans where vested benefits exceeded plan assets, the
actuarially computed value of vested benefits exceeded those plans’ assets by
approximately $5,582.

11. Capital Stock, Treasury Stock and Paid in Capital

Authorized shares of preferred stock ($0.01 par value per share) and common stock
($0.01 par value per share) for the Company are 50,000,000 shares and 150,000,000
shares, respectively. No preferred stock has been issued.

On October 9, 2020, the Company completed a private placement of 50,000,000 shares
of common stock at $2.00 per share. The Company used the net proceeds of the private
placement to complete a refinancing of its short-term debt.

As a result of the private placement to complete an extinguishment of the Revolving
Credit Facility and Term Loan Facility in 2020 and subsequent purchases, Icahn Enterprises
L.P. currently owns approximately 90.6% of our outstanding common stock.

In 2004, the Company purchased 805,270 shares of its common stock from the
underwriter for a purchase price of $298. The common stock has been accounted for as
treasury stock.

12. Income Taxes

Income tax provision (benefit) consisted of:

2024
2023
2022
Current
Domestic
$288
$1,213
$51
Foreign
(1,746)
(920)
7,187
Total current
(1,458)
293
7,238
Deferred

Domestic
(413)
2,170
(32)
Foreign
1,201
1,071
(67)
Total deferred
788
3,241
(99)

Total
($670)
$3,534
$7,139

The reconciliation of income tax provision (benefit) attributable to earnings differed from
the amounts computed by applying the U.S. Federal statutory income tax rate to
earnings by the following amounts:

Income (loss) before income taxes:

2024
2023
2022
Domestic
($9,068)
($2,995)
($6,297)
Foreign
2,939
19,965
15,720
Total
($6,129)
$16,970
$9,423
Computed income tax provision (benefit)
($1,318)
$3,592
$1,979
State and local taxes, net of federal tax
(26)

113

341

Foreign taxes, net
(2,086)

1,355

655

Valuation allowance
5,166

(1,568)

(887)

Uncertain tax positions - (benefit) expense
(4,756)

(6,214)

860

Foreign exchange impact
(4)

(24)

Permanent differences, net
299

2,880

1,687

Revaluation of deferreds
1,574

(328)

1,016

Other, net
481

3,728

1,470

Total income tax provision
($670)
$3,534
$7,139

Computed income tax (benefit) provision
21.0%
21.0%
21.0%
State and local taxes, net of federal tax
0.4%
0.7%
3.6%
Foreign taxes, net
33.2%
7.9%
6.9%
Valuation allowance
-82.3%
-9.2%
-9.4%
Uncertain tax positions - expense (benefit)
75.8%
-36.3%
9.1%
Foreign exchange impact
0.1%
-0.1%
0.2%
Permanent differences, net
-4.8%
16.8%
17.9%
Revaluation of deferreds
-25.1%
-1.9%
10.8%
Other, net
-7.6%
21.8%
15.7%
Effective income tax rate
10.7%
20.7%
75.8%
Statutory federal rate
21.0%
21.0%
21.0%

Temporary differences and net operating loss carryforwards that give rise to a significant
portion of deferred tax assets and liabilities for 2024 and 2023 are as follows:

2024
2023
Deferred tax asset
Provisions not currently deductible
$11,117
$10,520
Inventory basis differences
1,484
1,797
Stock options
40

Pension and healthcare
2,829
4,312
Net operating loss carryforwards
16,360
15,795
Lease liability
4,050
6,409
Foreign exchange and other
4,740
2,021
Valuation allowance
(9,410)

(4,692)

Total deferred tax asset
$31,210
$36,203
Deferred tax liability
Property, plant, and equipment
($7,069)
($7,106)
Intangible asset
(4,061)
(4,772)
Right of use assets
(4,057)
(6,480)
Foreign exchange and other
(2,351)

(2,269)

Total deferred tax liability
($17,538)
($20,627)
$13,672
$15,576

The net deferred tax asset (liability) is classified in the balance sheet as follows:

2024
2023
Non-current deferred tax assets
$16,011
$18,597
Non-current deferred tax liability
(2,339)

(3,021)

Non-current deferred tax assets, net
$13,672
$15,576

A valuation allowance is provided when it is more likely than not that some portion or all
of the net deferred tax assets will not be realized. Management believes that is more
likely than not that its net deferred tax assets will be realized based on the weight of
positive evidence and future income except with respect to the loss in Brazil and a portion
of the state loss in the US. The Company has a valuation allowance for Brazil December
31, 2024 and December 31, 2023 of $7,853 and $4,427, respectively. The Company has
a valuation allowance in the U.S. at December 31, 2024 and December 31, 2023 of $572

and $265, respectively. The Company has a valuation allowance in Poland at December
31, 2024 of $985 and none at December 31, 2023. The Company has gross U.S. federal
net operating loss carryforwards at December 31, 2024 and December 31, 2023 of
$40,327 and $36,649, respectively, with amounts beginning to expire in 2025. The
Company has gross net operating loss carryforwards in Brazil at December 31, 2024 and
December 31, 2023 of $6,309 and $5,059, respectively, and has an unlimited carryforward
period. The Company has gross net operating loss carryforwards in Poland at December
31, 2024 of $1,184 and none for 2023. The Company has gross net operating loss
carryforwards in France at December 31, 2024 and December 31, 2023 of $1,907 and
$4,321, respectively, and has an unlimited carryforward period. The Company has gross
net operating loss carryforwards in Viskase Germany at December 31, 2024 and
December 31, 2023 of $5,435 and $5,882 for Income Tax and Trade Tax, respectively. The
Company has gross net operating loss carryforwards in CT Casings at December 31, 2024
of $894 and none for December 31, 2023 for Income Tax and Trade Tax. The Company
also has SEZ Credits in Poland ar December 31, 2024 and December 31, 2023 of $2,418
and $2,954, respectively.

Following the Equity Private Placement, Icahn Enterprises L.P. (“IELP”) became the
beneficial owner of more than 80% of the shares of our common stock and the Company
became a member of the consolidated group of a corporate subsidiary of Icahn
Enterprises for U.S. federal income tax purposes (the “IEP Corporate Subsidiary”). As a
result, the IEP Corporate Subsidiary and the Company entered into a tax allocation
agreement for the allocation of certain income tax items. The Company and its
subsidiaries consented to join the IEP Corporate Subsidiary’s federal consolidated return
and, if elected by the IEP Corporate Subsidiary, certain state consolidated returns.

Uncertainty in Income Taxes

The uncertain tax positions as of December 31, 2024 totaled $7,456. The following table
summarizes the activity related to the unrecognized tax benefits.

(in thousands)
2024
2023
Unrecognized tax benefits as of January 1
$9,190
$15,983
Increases in positions taken in a prior period
-

Decreases in positions taken in a prior period
-

Decreases de to settlements
-

Increases due to currency translation
-

Decreases due to currency translation
(158)

Decreases due to lapse of statute of limitations
(1,576)

(6,793)

Unrecognized tax benefits as of December 31
$7,456
$9,190

In 2024, the Company recognized an approximate net decrease of $1,734 to the reserves
for uncertain tax positions.

Approximately $7,456 of the total gross unrecognized tax benefits represents the amount
that, if recognized, would affect the effective income tax rate in future periods. The
Company and its subsidiaries are subject to U.S. federal income tax as well as income tax
of multiple state and foreign jurisdictions. The Company has substantially concluded all
U.S. federal income tax matters for years through 2016. Substantially all material state
and local and foreign income tax matters have been concluded for years through 2013.
Based on the expiration of the statute of limitations for certain jurisdictions, we do not
expect any amounts of unrecognized tax benefits to be released in the next twelve
months.

The Company's continuing practice is to recognize interest and/or penalties related to
income tax matters in income tax expense. During the years ended December 31, 2024
and 2023, the Company recorded adjustments for interest of ($3,751) and $628,
respectively, and for penalties of $10 and $10, respectively, related to these
unrecognized tax benefits. In total, as of December 31, 2024 and 2023, the Company
has recorded a liability of interest of $23 and $3,774, respectively, and $177 and $167,
respectively, for potential penalties.

13. Goodwill and Intangible Assets, net

The Company currently has goodwill of $2,820 with an impairment of $350.

Goodwill consists of the following:

December 31, 2024
December 31, 2023
Beginning balance
$3,321
$3,207
Impairment
(350)
-
Translation
(151)
114
Ending balance

$2,820
$3,321

Intangible assets, net consists of the following:

Gross
Carrying
Value
Accumulated
Amortization
Net Carrying
Value
Definite live intangible assets:

Customer relationships
$18,222
($7,879)
$10,343
Technologies
2,137
(1,014)
1,123
Patents/Trademarks
9,676
(7,842)
1,834
In-place leases
189
(108)
81

$30,224
($16,843)
$13,381
Gross
Carrying
Value
Accumulated
Amortization
Net Carrying
Value
Definite live intangible assets:

Customer relationships
$19,382
($6,969)
$12,413
Technologies
2,318
(1,295)
1,023
Patents/Trademarks
9,866
(7,603)
2,263
In-place leases
201
(101)
100

$31,767
($15,968)
$15,799
December 31, 2024
December 31, 2023

Amortization expense associated with definite-lived intangible assets was $1,609, $1,606
and $1,576 for the years ended December 31, 2024, 2023 and 2022, respectively. We
utilize the straight-line method of amortization, recognized over the estimated useful lives
of the assets.

The estimated future amortization expense for our definite-lived intangible assets is as
follows:

2024
$1,610
2025
1,610
2026
1,610
2027
1,610
2028
1,610
Total thereafter
5,331
Total amortization
$13,381

14. Contingencies

The Company from time to time is involved in various other legal proceedings, none of
which are expected to have a material adverse effect upon results of operations, cash
flows or financial condition.

15. Research and Development Costs

Research and development costs are expensed as incurred and totaled $3,724, $4,755
and $5,267 for 2024, 2023, and 2022, respectively.

16. Related-Party Transactions

As of December 31, 2024, and December 31, 2023, Icahn Enterprises L.P. owned
approximately 90.6% and 90.0% of our outstanding common stock, respectively.

Equity Private Placement of Common Stock & Change in Number of Authorized Shares

Beginning in the first quarter of 2020, the Company entered into discussions with a number
of banks, including Bank of America (“BofA”), regarding the terms of a new senior credit
facility which would replace both the Term Loan and the ABL Loan. Under the new senior
credit facility proposed by BofA, the Company was required to raise at least $100,000 in
equity capital, the proceeds of which were to be used, together with borrowings under
the new senior credit facility, to repay the Term Loan and the ABL Loan. The Company
met this condition through the issuance of 50,000,000 shares of common stock to an
affiliate of IELP in a private placement transaction at a purchase price of $2.00 per share
(the “Equity Private Placement”). In order to complete the offering of the Equity Private
Placement, the Company amended its Amended and Restated Certificate of
Incorporation to increase the number of authorized shares of the Company’s common
stock by 50,000,000 shares.

Prior to the completion of the Equity Private Placement, IELP beneficially owned
approximately 78.6% of the Company’s outstanding common stock. As a result of the
Equity Private Placement, IELP is the beneficial owner of approximately 89.0% of the
Company’s outstanding common stock. The Equity Private Placement was approved by
a Special Committee of disinterested directors of the Company.

Pension Liabilities

Applicable pension and tax laws make each member of a "controlled group" of entities,
generally defined as entities in which there is at least an 80% common ownership interest,

jointly and severally liable for certain pension plan obligations of any member of the
controlled group. These pension obligations include ongoing contributions to fund the
plan, as well as liability for any unfunded liabilities that may exist at the time the plan is
terminated. In addition, the failure to pay these pension obligations when due may result
in the creation of liens in favor of the pension plan or the Pension Benefit Guaranty
Corporation ("PBGC") against the assets of each member of the controlled group.

As a result of the Equity Private Placement, IELP became the beneficial owner of more
than 80% of the shares of our common stock and the Company became subject to the
pension liabilities of all entities in which Mr. Icahn has a direct or indirect ownership interest
of at least 80%. One such entity, ACF Industries LLC ("ACF"), is the sponsor of several
pension plans.

On January 31, 2025, the Executive Committee of ACF approved a resolution to
terminate its qualified pension plans, which is frozen and no longer accrues benefits. As
of December 31, 2024, the fair value of this plan's assets exceeded its benefit obligation.
The termination of the plan is effective January 31, 2025, is subject to the appropriate
regulatory approvals, and is expected to be completed in fiscal year 2025. The ACF LLC
ultimate settlement obligation will depend upon both the nature and timing of
participant settlements and prevailing market conditions.

In connection with the Equity Private Placement, the Company entered into an
agreement with Icahn Enterprises Holdings L.P. pursuant to which Icahn Enterprises
Holdings L.P. has agreed to indemnify us and our subsidiaries from losses resulting from
any imposition of certain pension funding or termination liabilities that may be imposed
on us and our subsidiaries or our assets as a result of being a member of the Icahn
controlled group.

Based on the contingent nature of potential exposure related to these affiliate pension
obligations and the indemnification from Icahn Enterprises Holdings L.P., no liability has
been recorded in the accompanying consolidated financial statements.

Tax Allocation

Following the Equity Private Placement, IELP became the beneficial owner of more than
80% of the shares of our common stock and the Company became a member of the
consolidated group IEP Corporate Subsidiary for U.S. federal income tax purposes. As a
result, the IEP Corporate Subsidiary and the Company entered into a tax allocation
agreement for the allocation of certain income tax items. The Company and its
subsidiaries consented to join the IEP Corporate Subsidiary’s federal consolidated return
and, if elected by the IEP Corporate Subsidiary, certain state consolidated returns. In
those jurisdictions where the Company and its subsidiaries will file consolidated returns
with the IEP Corporate Subsidiary, the Company will pay to the IEP Corporate Subsidiary
any tax it would have owed had it and its subsidiaries continued to file as a separate
consolidated group. To the extent that the IEP Corporate Subsidiary consolidated group
is able to reduce its tax liability as a result of including the Company and its subsidiaries
in its consolidated group, the IEP Corporate Subsidiary will pay the Company 20% of such
reduction on a current basis and the Company will be treated as if it would carry forward
for its own use under the tax allocation agreement, 80% of the items that caused the tax
reduction (the “Excess Tax Benefits”). Moreover, if the Company and its subsidiaries
should ever become deconsolidated from the IEP Corporate Subsidiary, the IEP
Corporate Subsidiary will reimburse the Company for any tax liability in post-consolidation
years that the Company and its subsidiaries would have avoided had they actually had

the Excess Tax Benefits for their own consolidated group use. The cumulative payments
to the Company by the IEP Corporate Subsidiary post-consolidation will not exceed the
cumulative reductions in tax to the IEP Corporate Subsidiary group resulting from the use
of the Excess Tax Benefits by the IEP Corporate Subsidiary group.

17. Business Segment Information and Geographic Area Information

The Company primarily manufactures and sells cellulosic food casings as its sole business
segment. The Company’s operations are viewed in geographic regions of North
America, South America, Europe and Asia. Intercompany sales and charges (including
royalties) have been reflected as appropriate in the following information. Certain items
are maintained at the Company’s corporate headquarters and are not allocated
geographically. They include most of the Company’s debt and related interest expense
and income tax benefits.

Reporting Segment Information:

2024
2023
2022
Net sales
North America
$205,920
$222,093
$216,819
South America
50,320
53,201
50,621
Europe
175,227
201,629
187,401
Asia
48,139
46,162
48,940
Other and eliminations
(75,831)
(77,101)
(72,947)
$403,775
$445,984
$430,834
Operating income
North America
$847
$5,008
$269
South America
2,463
6,094
6,334
Europe
7,455
20,597
7,774
Asia
4,670
7,684
7,870

$15,435
$39,383
$22,247

Net Sales by country
2024
2023
2022
United States
$128,048
$135,057
$134,885
Brazil
27,300
28,733
25,226
Italy
24,829
27,184
28,249
Germany
17,041
22,594
23,014
France
12,978
12,159
10,976
Philippines
27,701
27,299
31,644
Poland
8,119
9,997
9,328
Other international
157,759
182,961
167,512
$403,775
$445,984
$430,834

18. Interest Expense, Net

Net interest expense, net consisted of:

December 31, 2024
December 31, 2023
December 31, 2022
Interest expense
$11,300
$12,152
$8,433
Less Capitalized interest
(268)

(134)

Interest expense, net
$11,032
$12,018
$8,433

19. Changes in Accumulated Other Comprehensive Loss

Accrued
Employee
Benefits
Translation
Adjustments
Total
Balance at December 31, 2023
($22,113)
($37,087)
($59,200)
Other comprehensive income (loss) before
reclassifications
1,032
(7,341)
(6,309)
Reclassifications from accumulated other
comprehensive loss to earnings
123
-

123
Balance at December 31, 2024
($20,958)
($44,428)
($65,386)

Amounts Reclassified
from Accumulated
Other Comprehensive
Loss
Affected Line Items in the
Consolidated Statement of
Operations
Accrued Employee Benefits
Amortization of net actuarial loss
123
Other Expense, net
$123

20. Variable Interest Entity

The Company holds a variable interest in a joint venture for which the Company is the
primary beneficiary. The joint venture, VE Netting, LLC, is a manufacturing, marketing and
selling company of high-quality netting solutions for the meat and poultry industry. VE
Netting, LLC is a Delaware limited liability company with its principal place of business in
Lombard, IL. The netting product is manufactured under agreement by Viskase’s affiliate
located in Monterrey, Mexico.

As the primary beneficiary of the variable interest entity (VIE), the VIEs’ assets, liabilities,
and results of operations are included in the Company’s consolidated financial
statements as of, and for the period ended, December 31, 2024 and December 31, 2023.
The other equity holders’ interests are reflected in “Net loss attributable to noncontrolling
interests” in the Consolidated Statements of Operations and “Noncontrolling interests” in
the Consolidated Balance Sheets.

The following table summarizes the carrying amount of the VIEs’ assets and liabilities
included in the Company’s Consolidated Balance Sheets at December 31, 2024 and
December 31, 2023:

December 31,
2024
December 31,
2023
ASSETS

Current assets:
Cash and cash equivalents
$8
$23
Receivables, net
80
104
Inventories
475
508
Other current assets
51
109
Property, plant and equipment
1,277
1,277
Less: Accumulated depreciation
(870)
(742)
Property, plant and equipment,net
407
535
Other assets
16
20
Total Assets
$1,037
$1,299
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
749
814
Total Liabilites
749
814
Paid in capital
2,931
2,931
Retained earnings
(2,643)
(2,446)
Total Stockholder Equity
288
485
Total Liabilities and Stockholders' Equity
$1,037
$1,299

All assets in the above table can only be used to settle obligations of the consolidated
VIE. Liabilities are nonrecourse obligations. Amounts presented in the table above are
adjusted for intercompany eliminations.

The following table summarizes the Statement of Operations of the VIE included in the
Company’s Consolidated Statement of Operations for the period ended December 31,
2024 and December 31, 2023.

December 31,
2024
December 31,
2023
December 31,
2022
Net sales
$848
$1,348
$1,197
Cost of sales
949
1,207
1,371
Gross margin
(101)
141
(174)
Selling, general and administrative
54
197
228
Asset impairment
-

18
-

Operating loss
(155)
(74)
(402)
Other expense
42
64
87
Loss before income taxes
(197)
(138)
(489)

Income tax expense
-

Net loss
($197)
($138)
($489)

21. Subsequent Events

Viskase evaluated its December 31, 2024 consolidated financial statements for
subsequent events through March 28, 2025, the date the consolidated financial
statements were available to be issued.

As of March 21, 2025, the Company completed a private placement through the
issuance of 7,142,858 shares of common stock to an affiliate of IELP at a purchase price
of $2.10 per share (the “Private Placement”).

Prior to the completion of the Private Placement, IELP beneficially owned approximately
90.6% of the Company’s outstanding common stock. As a result of the Private Placement,
IELP is the beneficial owner of approximately 91.2% of the Company’s outstanding
common stock. The Private Placement was approved by a Special Committee of
disinterested directors of the Company.

As of March 26, 2025, the Company has announced a restructuring plan to close its plant
in Osceola, AR.

MANAGEMENT’S
DISCUSSION
AND
ANALYSIS
OF
FINANCIAL
CONDITION
AND RESULTS OF OPERATIONS (Unaudited)

Company Overview

The Company operates in the casing product segment of the food industry. Viskase is a
worldwide leader in the production and sale of cellulosic, fibrous and plastic casings for
the processed meat and poultry industry. Viskase currently operates nine manufacturing
facilities throughout North America, Europe, South America and Asia. Viskase provides
value-added support services relating to these products for some of the world's largest
global consumer products companies. Viskase is one of the two largest worldwide
producers of non-edible cellulosic casings for processed meats and one of the three
largest manufacturers of non-edible fibrous casings.

Our net sales are driven by consumer demand for meat products and the level of
demand for casings by processed meat manufacturers, as well as the average selling
prices of our casings. Specifically, demand for our casings is dependent on population
growth, overall consumption of processed meats and the types of meat products
purchased by consumers. Average selling prices are dependent on overall supply and
demand for casings and our product mix.

Our cellulose, fibrous and plastic casing extrusion operations are capital-intensive and
are characterized by high fixed costs. Our finishing operations are labor intensive. The
industry’s operating results have historically been sensitive to the global balance of
capacity and demand. The industry’s extrusion facilities produce casings under a timed
chemical process and operate continuously.

Our contribution margin varies with changes in selling price, input material costs, labor
costs and manufacturing efficiencies. The total contribution margin increases as demand
for our casings increases. Our financial results benefit from increased volume because
we do not have to increase our fixed cost structure in proportion to increases in demand.
For certain products, we operate at near capacity in our existing facilities. We regularly
evaluate our capacity and projected market demand. We believe the current and
planned cellulosic production capacity in our industry is in balance with global demand.

Comparison of Results of Operations for Years Ended December 31, 2024, 2023 and 2022.

The following discussion compares the results of operations for the fiscal year ended
December 31, 2024 to the results of operations for the fiscal year ended December 31,
2023, and compares the results of operations for the fiscal year ended December 31,
2023 to the results of operations for the fiscal year ended December 31, 2022. We have
provided the table below in order to facilitate an understanding of this discussion. The
table shows our results of operations (in millions) for the 2024, 2023 and 2022 fiscal years.

Year
Year
Year
Ended
Ended
Ended
Dec
Dec
Dec
31, 2024
31, 2023
31, 2022
NET SALES
$403.8
-9.5%
$446.0
3.5%
$430.8
Cost of sales
336.0
-4.6%
352.2
-1.3%
356.7
Selling, general and administrative
48.4
-7.6%
52.4
4.2%
50.3
Amortization of intangibles
1.6
0.0%
1.6
0.0%
1.6
Asset impairment
0.4

33.3%
0.3

NM
-

Restructing expense
1.90

NM
-

OPERATING INCOME
15.3
-61.2%
39.4
77.5%
22.2
Interest expense, net of income
11.0
-8.3%
12.0
42.9%
8.4
Other expense, net
10.5
1.0%
10.4
136.4%
4.4
Income tax provision
(0.7)
NM
3.5
-50.7%
7.1
NET INCOME (LOSS)
($5.5)
NM
$13.5
487.0%
$2.3

NM= Not meaningful when comparing positive to negative numbers or to zero.

2024 Versus 2023

Net Sales. Our net sales for 2024 were $403.8 million, which represents a decrease of
$42.2 million or 9.5% from the prior year. Net sales decreased $25 million from price and
mix and $17 million due to volume.

Cost of Sales. Cost of sales for 2024 decreased 4.6% from the comparable prior year
period. The decrease is mainly due to lower sales volume, increased expense for raw
materials, manufacturing waste and lower absorption of manufacturing costs at our
plants.

Selling, General and Administrative Expenses. We decreased selling, general and
administrative expenses from $52.4 million in 2023 to $48.4 million in 2024. The decrease is
mainly due to lower costs for employee compensation plans.

Amortization of Intangibles. The Company incurred an expense of $1.6 million during 2024
and 2023 on the amortization of intangibles recognized with the acquisitions.

Asset Impairment Charge. The Company incurred an asset impairment charge of $0.4
million in 2024 related to assets removed from service.

Operating Income. Operating income for 2024 was $15.3 million, representing a
decrease of $24.1 million from the prior year. The decrease in operating income was
primarily due to items discussed above.

Interest Expense. Interest expense, net of interest income, for 2024 was $11.0 million,
representing a decrease of $1.0 million compared to 2023. The decrease is a result of a
lower interest rate on our Term loan.

Other Expense. Other expense for 2024 was approximately $10.5 million, representing an
increase of $0.1 million over 2023. The increase is primarily due to higher foreign currency
translation loss offset by the higher expense in 2023 due to reversal of a receivable on an
uncertain tax position with the benefit running through the income tax provision.

Income Tax Provision. During 2024, an income tax benefit of $0.7 million was recognized
on the loss before income taxes of $6.2 million compared to income tax expense of $3.5
million in 2023. The 2024 effective income tax rate was (10.7%) compared to 20.7% for
2023. The income tax rate benefited from the reversal of an uncertain tax position offset
by valuation allowances on deferred tax assets.

Primarily as a result of the factors discussed above, net loss for 2024 was $5.5 million
compared to net income of $13.5 million for 2023.

2023 Versus 2022

Net Sales. Our net sales for 2023 were $446.0 million, which represents an increase of
$15.2 million or 3.5% from the prior year. Net sales increased $40 million from price and
mix, $2 million due to foreign currency translation and decrease $27 million due to
volume.

Cost of Sales. Cost of sales for 2023 decreased 1.3% from the comparable prior year
period. The decrease is mainly due to lower sales volume, decreased expense for raw
materials and distribution cost offset by lower absorption of manufacturing costs at our
plants and manufacturing performance.

Selling, General and Administrative Expenses. We increased selling, general and
administrative expenses from $50.3 million in 2022 to $52.4 million in 2023. The increase is
mainly due to increased costs for employee compensation plans.

Amortization of Intangibles. The Company incurred an expense of $1.6 million during 2023
and 2022 on the amortization of intangibles recognized with the acquisitions.

Asset Impairment Charge. The Company incurred an asset impairment charge of $0.3
million in 2023 related to assets removed from service.

Operating Income. Operating income for 2023 was $39.4 million, representing an
increase of $17.2 million from the prior year. The increase in operating income was
primarily due to items discussed above.

Interest Expense. Interest expense, net of interest income, for 2023 was $12.0 million,
representing an increase of $3.6 million compared to 2022. The increase is a result of a
higher interest rate on our Term loan.

Other Expense. Other expense for 2023 was approximately $10.4 million, representing an
increase of $6.0 million over 2022. The increase is primarily due to the reversal of a
receivable on an uncertain tax position with the benefit running through the income tax
provision.

Income Tax Provision. During 2023, an income tax expense of $3.5 million was recognized
on the income before income taxes of $17.0 million compared to income tax expense of

$7.1 million in 2022. The 2023 effective income tax rate was 20.7% compared to 75.8% for
2022. The income tax rate benefited from the reversal of an uncertain tax position.

Primarily as a result of the factors discussed above, net income for 2023 was $13.5 million
compared to net income of $2.3 million for 2022.

Liquidity and Capital Resources

Cash and cash equivalents decreased by $2.1 million during 2024. Net cash provided by
operating activities was $3.4 million and net cash used in investing activities was $15.3
million. Net cash provided by financing activities was $10.3 million. Cash flows provided
by operating activities were principally attributable to results from operations and
working capital needs. Our receivables decreased during 2024 due to volume and
price/mix. Cash flows used in investing activities were principally attributable to capital
expenditure. Cash flows provided by financing activities principally consisted of short-
term debt borrowings.

Our cash held in foreign banks was $5.1 million (against a total cash balance of $5.7
million) and $7.4 million (against a total cash balance of $7.9 million) as of December 31,
2024 and December 31, 2023, respectively. Any cash held by our foreign subsidiaries does
not have a significant impact on our overall liquidity, but if we fail to generate sufficient
cash through our domestic operations, our foreign operations could be a potential
source of liquidity.

As of December 31, 2024, the Company had positive working capital of approximately
$128.0 million, with additional amounts of credit available under its New Senior Credit
Facility.

New Senior Credit Facility

On October 9, 2020, Viskase Companies, Inc. (the “Company”) and certain of its
subsidiaries, entered into that certain Credit Agreement (the “Credit Agreement”) with
the various lenders named therein and Bank of America, N.A., as administrative agent
for the lenders (the “Administrative Agent”), as amended by the First Amendment to
Credit Agreement dated as of August 13, 2021, the Second Amendment to Credit
Agreement dated as of August 10, 2022 and as further amended by the Limited Waiver
and Third Amendment to Credit Agreement dated as of February 14, 2025 (the “Third
Amendment”) as described below.

The Third Amendment includes a waiver on covenants for the year ended December
31, 2024, and a relief period for year 2025 (the “Covenant Relief Period”). During the
Covenant Relief period, the consolidated leverage ratio will be increased to 4.00X
through December 31, 2025. The consolidated fixed charge coverage ratio will be
modified to include only maintenance capital expenditures and a year to date build
basis for quarter ending calculation. At December 31, 2025 the consolidated fixed
charge coverage ratio will return to a LTM basis. During the Covenant Relief Period,
restricted payments, permitted acquisitions and other investments as defined by Credit
Agreement are not allowed and the accordion feature of the credit facility, which
allowed for an increase in borrowings under the facility has been suspended.

The interest rates per annum applicable to the Amended Senior Credit Facility (other than
in respect of Swingline Loans) will be SOFR, but in any event, not less than 0.00%, plus the

Applicable Rate (as defined below), or, for U.S. dollar denominated loans only, made to
the Company at the option of the Company, the Base Rate, defined as the highest of:
(a) the Federal Funds Rate plus one-half percent (0.50%); (b) the Bank of America prime
rate; and (c) the one (1) month SOFR (adjusted daily) plus one percent (1.00%), but in
any case not less than 1.00%. plus the Applicable Rate. Applicable Rate means, with
respect to the Amended Senior Credit Facility, a percentage per annum to be
determined in accordance with the applicable pricing grid set forth in the Amended
Senior Credit Facility based upon the Company’s Consolidated Coverage Ratio as
reflected in a quarterly Compliance Certificate. Each Swingline Loan shall bear interest
at the Base Rate plus the Applicable Rate for Base Rate loans under the New Revolving
Credit Facility. As of December 31, 2024, our current interest rate is 6.94%.

Foreign Lines of Credit

In its foreign operations, the Company has unsecured lines of credit with various banks
providing approximately $12.0 million of availability. There were borrowings of $9.9 million
under the lines of credit on December 31, 2024 and $10.5 million as December 31, 2023.
As of December 31, 2024, our current interest rate is 4.81%.

Pension and Postretirement Benefits

Our long-term pension and postretirement benefit liabilities totaled $25.4 million at
December 31, 2024.

Expected annual cash contributions for U.S. pension liabilities are expected to be (in
millions):

2025
2026
2027
2028
2029
Pension
$ 2.3
$ 2.9
$ 2.1
$ 2.1 $ 2.0

Contract Obligations

As of December 31, 2024, the aggregate maturities of debt(1), leases and purchase
commitments for each of the next five years are (in millions):

2025
2026
2027
2028
2029
Thereafter
Term Credit Facility
$ 34.6
$ 99.4
$ - $ - $ -
$ -
Operating Leases
4.5
3.9
3.7
3.7
2.6
11.5
Other
9.9
0.6
-
-
-
-
$ 49.0
$ 103.9
$ 3.7
$ 3.7
$ 2.6
$ 11.5

(1) The aggregate maturities of debt represent amounts to be paid at maturity and not the
current carrying value.

New Accounting Pronouncements

Please reference Footnote 1 in our Notes to Consolidated Financial Statements.

FORWARD-LOOKING STATEMENTS

This report includes “forward-looking statements.” Forward-looking statements are those
that do not relate solely to historical fact. These statements relate to future events or our
future financial performance and implicate known and unknown risks, uncertainties and
other factors that may cause the actual results, performances or levels of activity of our
business or our industry to be materially different from that expressed or implied by any
such forward-looking statements. They include, but are not limited to, any statement that
may predict, forecast, indicate or imply future results, performance, achievements or
events. In some cases, you can identify forward-looking statements by use of words such
as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” “will,”
“would,” “could,” “predict,” “propose,” “potential,” “may” or words or phrases of similar
meaning. Statements concerning our financial position, business strategy and measures
to implement that strategy, including changes to operations, competitive strengths,
goals, plans, references to future success and other similar matters are forward-looking
statements. Forward-looking statements may relate to, among other things:

our ability to meet liquidity requirements and to fund necessary capital expenditures;

the strength of demand for our products, prices for our products and changes in overall
demand;

assessment of market and industry conditions and changes in the relative market shares of
industry participants;

consumption patterns and consumer preferences;

the effects of competition and competitor responses to our products and services ;

our ability to realize operating improvements and anticipated cost savings;

pending or future legal proceedings and regulatory matters;

general economic conditions and their effect on our business;

changes in the cost or availability of raw materials and changes in energy prices or other costs;

pricing pressures for our products;

the cost of and compliance with environmental laws and other governmental regulations;

our results of operations for future periods;

our anticipated capital expenditures;

our ability to pay, and our intentions with respect to the payment of, dividends on shares of our
capital stock;

our ability to protect our intellectual property;

economic and industry conditions affecting our customers and suppliers

our ability to identify, complete and integration acquisitions; and

our strategy for the future, including opportunities that may be presented to and/or pursued by
us.

These forward-looking statements are not guarantees of future performance. Forward-
looking statements are based on management’s expectations that involve risks and
uncertainties.