IDEX CORP DE
For the period ended Sep 30, 2024. Filed Oct 30, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 30, 2024
IEX$226.99+2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0000832101-24-000044
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-30.
0000832101-24-000055
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsLiquidity and Capital ResourcesThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 95 previous paragraphs and 95 current paragraphs.
57 unchanged; 25 reworded; 13 added; 13 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 17 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Third Quarter Highlights
Current report
(1)Activity recorded during the three months ended September 30, 2024 represents the finalization of the gain on the sale of Alfa Valvole, Srl resulting in a $0.6 million downward adjustment during the third quarter of 2024.
Current report
Gross profit and gross margin for the three and nine months ended September 30, 2024 were positively impacted by strong price/cost and favorable operational productivity and were negatively impacted by higher employee-related costs, unfavorable mix and lower volume leverage. Gross profit and gross margin for the nine months ended September 30, 2024 were both favorably impacted by lower discretionary spending.
Current report
The effective tax rate was 22.9% and 21.9% for the three and nine months ended September 30, 2024, respectively, as compared to 20.2% and 21.4% during the same periods in 2023, respectively. One-time discrete tax benefits lowered the effective tax rates during nine months ended September 30, 2024 and both the three and nine months ended September 30, 2023. The three months ended September 30, 2024 did not benefit from these one-time items. For additional information, refer to Note 15, “Income Taxes,” in the Notes to Condensed Consolidated Financial Statements.
Current report
•Organic net sales were positively impacted by price capture during the three and nine months ended September 30, 2024. Volumes were relatively flat during the three months ended September 20,2024 as improvement in the industrial market and strength in water were offset by both a down agriculture cycle and softness in the energy market. During the nine months ended September 30, 2024, lower volumes, driven primarily by softness in agriculture, partially offset the benefit of price capture.
Current report
September 30, 2024, resulting in higher volumes. Volumes were relatively flat during the nine months ended September 30, 2024 as growth initiatives were mostly offset by lower North American dispensing volumes.
Current report
•Adjusted EBITDA margin decreased slightly for the three and nine months ended September 30, 2024. Positive price/cost offset higher employee related costs during both periods. Additionally, unfavorable mix negatively impacted the three months ended September 30, 2024.
Current report
Mott was acquired during the third quarter of 2024 for cash consideration of $986.2 million, net of cash acquired of $3.1 million. The acquisition was funded using a combination of cash on hand of $211.9 million, borrowings under the Company’s Revolving Facility of $279.3 million, and the net proceeds from the issuance of the 4.950% Senior Notes of $495.0 million. For additional information regarding the borrowings under the Company’s Revolving Facility and the 4.950% Senior Notes, refer to Note 8, “Borrowings,” in the Notes to Condensed Consolidated Financial Statements.
Current report
Cash flows used in investing activities increased $901.8 million during the nine months ended September 30, 2024 as compared to the prior year period. The net impact of acquisitions and divestitures increased cash used in investing activities $939.4 million during the nine months ended September 30, 2024 as compared to the same prior year period, primarily related to the acquisition of Mott during the third quarter of 2024. This increase in cash outflows was partially offset by the absence of purchases of marketable securities from the prior year period and lower capital expenditures, which decreased cash used in investing activities by $24.6 million and $18.7 million, respectively, as compared to the prior year period. For additional information on the Company’s acquisition and divestitures, refer to Note 2, “Acquisitions and Divestitures,” in the Notes to Condensed Consolidated Financial Statements.
Current report
Cash flows from financing activities increased $893.4 million during the nine months ended September 30, 2024 as compared to the prior year period, primarily due to $774.8 million of net proceeds in connection with the financing of the acquisition of Mott. Additionally, repayments of the Term Facility were $125.0 million lower during the nine months ended September 30, 2024 than in the prior year period. These increases in cash flows were partly offset by slightly higher dividends paid to shareholders, which increased $10.7 million in the nine months ended September 30, 2024 as compared to the prior year period.
Current report
During October 2024, the Company repaid$69.1 million of the $360.6 million outstanding under the Revolving Facility as well asthe remaining$25.0 million balance outstanding under the Term Facility at September 30, 2024.
Current report
(2)Activity recorded in the three months ended September 30, 2024 represents the finalization of the gain on the sale of Alfa Valvole resulting in a $0.6 million downward adjustment during the third quarter of 2024.
Removed paragraphs (13)
Previous report
Second Quarter Highlights
Previous report
(1) There were no non-GAAP adjustments during the three months ended June 30, 2024 or 2023, respectively, to Gross profit or Gross margin.
Previous report
Gross profit decreased for both the three and six months ended June 30, 2024, primarily due to lower volume leverage, unfavorable mix and higher employee-related costs, partially offset by strong price/cost and favorable operational productivity. Gross margin increased for the three months ended June 30, 2024 and was flat for the six months ended June 30, 2024. The negative impacts of lower volume leverage, unfavorable mix and higher-employee related costs on gross margin were offset by the positive impacts of strong price/cost and favorable operational productivity.
Previous report
The Company’s provision for income taxes is based upon estimated annual tax rates for the year applied to federal, state and foreign income. The effective tax rate was 21.2% and 21.4% for the three and six months ended June 30, 2024, respectively, as compared to 22.4% and 22.3% during the same periods in 2023, respectively. The decrease in effective tax rate during the three and six months ended June 30, 2024 was primarily due to benefits realized in the second quarter of 2024 related to the finalization of prior years’ research and development tax incentives with taxing authorities in a foreign jurisdiction. The decrease in the effective tax rate during the six months ended June 30, 2024 also reflected the finalization of tax impacts of a previously recorded legal entity restructuring.
Previous report
•Organic net sales were flat and slightly down for the three and six months ended June 30, 2024, respectively, as compared to the same prior year periods. Both the quarter and year to date results were negatively impacted by lower volumes, primarily in the industrial market. The impact of lower volumes was offset by price capture in both the three and six months ended June 30, 2024.
Previous report
•Excluding the dilutive impact of foreign currency, Adjusted EBITDA margin for the three and six months ended June 30, 2024 decreased primarily due to higher employee-related costs and lower volume leverage, partially offset by strong price/cost. The three months ended June 30, 2024 also benefited from favorable operational productivity, while the six months ended June 30, 2024 were favorably impacted by mix.
Previous report
Cash flows provided by investing activities increased during the six months ended June 30, 2024 as the six months ended June 30, 2024 included the proceeds received of $45.5 million from the sale of Alfa Valvole in June 2024. The six months ended June 30, 2023 included the purchase of Iridian Spectral Technologies for $110.3 million as well as the purchase of marketable securities of $19.1 million, which did not reoccur during the six months ended June 30, 2024. Additionally, the six months ended June 30, 2023 included higher capital expenditures of $48.2 million, as compared to $35.9 million in the six months ended June 30, 2024.
Previous report
Cash flows used in financing activities primarily consisted of dividends of $100.7 million and $93.9 million paid to common shareholders during the six months ended June 30, 2024 and 2023, respectively. Additionally, the Company repaid $25.0 million of the $50.0 million previously outstanding under the Term Facility during the six months ended June 30, 2024.
Previous report
The increase in free cash flow for the six months ended June 30, 2024 as compared to 2023 is primarily due to lower capital expenditures in 2024 compared with the six months ended June 30, 2023.
Previous report
Mott Corporation Pending Acquisition
Previous report
On July 23, 2024, the Company entered into a definitive agreement to acquire Mott Corporation and its subsidiaries for cash consideration of $1.0 billion, subject to customary adjustments. The acquisition is expected to be funded using a combination of cash on hand, borrowings under the Company’s Revolving Credit Facility and potential debt issuance. For additional information regarding the Company’s pending acquisition of Mott Corporation, refer to Note 2, “Acquisitions and Divestitures,” in the Notes to Condensed Consolidated Financial Statements.
Previous report
Subterra AI Acquisition
Previous report
On July 25, 2024, the Company acquired Subterra AI, Inc. (“Subterra AI”) for cash consideration of $7.5 million. For additional information regarding the Company’s acquisition of Subterra AI, refer to Note 2, “Acquisitions and Divestitures,” in the Notes to Condensed Consolidated Financial Statements.
Reworded paragraphs (25)
Previous wording
During the three months ended June 30, 2024, the Company delivered solid operating performance, despite challenging market headwinds. Continued market softness, largely within the Health & Science Technologies segment, resulted in lower sales volumes, which were partly offset by strong price/cost and productivity across all segments.
Current wording
During the three months ended September 30, 2024, the Company delivered solid operating performance, despite continued challenging market headwinds. Market softness, largely within the Health & Science Technologies segment, resulted in lower sales volumes, which were partly offset by price/cost and productivity across all segments. On September 5, 2024, the Company completed the previously-announced acquisition of Mott Corporation and its subsidiaries (“Mott”), expanding the Company’s applied material science technology capabilities in high-value end markets. For additional information, refer to Note 2, “Acquisitions and Divestitures” in the Notes to Condensed Consolidated Financial Statements and the “Liquidity and Capital Resources” section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Previous wording
The following is a discussion and analysis of the Company’s results of operations for the three and six months ended June 30, 2024 compared with the three and six months ended June 30, 2023.
Current wording
The following is a discussion and analysis of the Company’s results of operations for the three and nine months ended September 30, 2024 compared with the three and nine months ended September 30, 2023.
Previous wording
Net sales for both the three and six months ended June 30, 2024 decreased 5% as compared to the same prior year periods. Organic net sales for the same periods decreased 4% and 5%, respectively, as a result of lower volumes, largely as a result of market conditions in the Health & Science Technologies businesses, partially offset by price capture across all segments.
Current wording
Net sales for the three and nine months ended September 30, 2024 increased 1% and decreased 3%, respectively, as compared to the same prior year periods. Organic net sales for the three and nine months ended September 30, 2024 were flat and decreased 3%, respectively, which reflected lower volumes, largely as a result of continued unfavorable market conditions in the Health & Science Technologies businesses. Price capture across all segments offset lower volumes during the three months ended September 30, 2024, but only partially offset lower volumes for the nine months ended September 30, 2024.
Previous wording
In the three months ended June 30, 2024, net sales decreased 4% domestically and 5% internationally. In the six months ended June 30, 2024, net sales decreased 4% domestically and 6% internationally. Sales to customers outside the U.S. were approximately 50% of total sales in each of the three and six months ended June 30, 2024 and 2023.
Current wording
In the three months ended September 30, 2024, net sales decreased 1% domestically and increased 2% internationally. In the nine months ended September 30, 2024, net sales decreased 3% domestically and 3% internationally. Sales to customers outside the U.S. were approximately 50% of total sales in each of the three and nine months ended September 30, 2024 and 2023.
Previous wording
Selling, general and administrative expenses for the three and six months ended June 30, 2024 increased primarily due to the $2.1 million and $5.6 million impact from acquisitions, net of divestitures, including amortization, respectively, as well as increased professional services and discretionary spending as compared to the same prior year periods.
Current wording
Selling, general and administrative expenses for the three and nine months ended September 30, 2024 increased primarily due to the $5.6 million and $11.4 million impact from acquisitions, net of divestitures, including amortization, respectively, as well as higher employee-related costs and increased discretionary spending and transaction expenses as compared to the same prior year periods.
Previous wording
Restructuring expenses and asset impairments decreased in the three and six months ended June 30, 2024 primarily due to lower severance costs compared with the same periods in 2023. Severance costs were incurred in conjunction with cost mitigation efforts as a result of market conditions.
Current wording
Restructuring expenses and asset impairments decreased in the three and nine months ended September 30, 2024 primarily due to lower severance costs compared with the same prior year periods. Severance costs during all periods were incurred in conjunction with cost mitigation efforts as a result of market conditions.
Previous wording
During the three and six months ended June 30, 2024, the Company completed the sale of Alfa Valvole, Srl (“Alfa Valvole”) for proceeds of $45.5 million, net of cash remitted, resulting in a gain on the sale of $4.6 million, net of a release of cumulative foreign currency translation losses of $5.5 million. For additional information regarding the divestiture of Alfa Valvole, refer to Note 2, “Acquisitions and Divestitures,” in the Notes to Condensed Consolidated Financial Statements.
Current wording
During the nine months ended September 30, 2024, the Company completed the sale of Alfa Valvole, Srl (“Alfa Valvole”) for proceeds of $45.1 million, net of cash remitted, resulting in an initial gain on the sale of $4.6 million, net of a release of cumulative foreign currency translation losses of $5.5 million. During the three months ended September 30, 2024, the gain on the sale of Alfa Valvole was finalized, resulting in a downward adjustment to the gain on sale of $0.6 million for a final gain on sale of $4.0 million. During the three and nine months ended September 30, 2023, the Company completed the sale of Micropump, Inc. (“Micropump”) for proceeds of $110.3 million, net of cash remitted, resulting in a pre-tax gain on the sale of $93.8 million. For additional information regarding the divestitures of Alfa Valvole and Micropump, refer to Note 2, “Acquisitions and Divestitures,” in the Notes to Condensed Consolidated Financial Statements.
Previous wording
Other expense (income) – net for the three and six months ended June 30, 2024 benefited from the absence of a $7.7 million credit loss reserve on a note receivable from a collaborative partner that did not reoccur during 2024. Additionally, the current year periods benefited from a favorable impact of foreign currency transactions as compared to the same prior year periods.
Current wording
Other expense (income) – net decreased in the three months ended September 30, 2024 primarily due to the unfavorable impact of foreign currency transactions as compared to the same prior year periods. Other expense (income) – net for the nine months ended September 30, 2024 benefited from the absence of a $7.7 million credit loss reserve on a note receivable from a collaborative partner that did not reoccur during 2024.
Previous wording
Interest expense – net for thethree and six months ended June 30, 2024 decreased compared to the same periods in 2023 due to a decrease in the amount of debt outstanding andhigher interest earned on cash balances in 2024, partially offset by increases in interest rates on outstanding debt, which increased interest expense by approximately $0.6 million and $1.4 million for the three and six months ended June 30, 2024, respectively.
Current wording
Interest expense – net for the three and nine months ended September 30, 2024 decreased compared to the same periods in 2023 due to higher interest earned on cash balances in 2024, which increased approximately $3.2 million and $7.0 million, respectively. This benefit was offset by incremental interest expense during the three months ended September 30, 2024 due to a net increase in debt outstanding throughout the period, while the nine months ended September 30, 2024 was further favorably impacted by lower interest expense due to a net decrease in debt outstanding through the period, primarily on the Term Facility.
Previous wording
In October 2021, members of the Organization for Economic Co-operation and Development (“OECD”) and G20 Inclusive Framework on Base Erosion and Profit Shifting agreed to a two-pillar solution to address the tax challenges associated with the digitalization of the economy. In December 2021, the OECD released the Pillar Two Model Rules (“Pillar Two”), which define the global minimum tax and call for the taxation of large corporations at a minimum rate of 15%. Although it is uncertain when and how the rules will be fully enacted into law, based on our initial assessment, nearly all of the jurisdictions in which the Company operates have an effective tax rate above the 15% threshold. Therefore, the Company does not expect a material impact from the Pillar Two income tax rules.
Current wording
In October 2021, members of the Organization for Economic Co-operation and Development (“OECD”) and G20 Inclusive Framework on Base Erosion and Profit Shifting agreed to a two-pillar solution to address the tax challenges associated with the digitalization of the economy. In December 2021, the OECD released the Pillar Two Model Rules (“Pillar Two”), which define the global minimum tax and call for the taxation of large corporations at a minimum rate of 15%. Although it is uncertain when and how the rules will be fully enacted into law, based on the Company’s initial assessment, nearly all of the jurisdictions in which the Company operates have an effective tax rate above the 15% threshold. Therefore, the Company does not expect a material impact from the Pillar Two income tax rules.
Previous wording
The table below illustrates the share of Net sales and Adjusted EBITDA contributed by each segment on the basis of total segments (not total Company) for the three and six months ended June 30, 2024.
Current wording
The table below illustrates the share of Net sales and Adjusted EBITDA contributed by each segment on the basis of total segments (not total Company) for the three and nine months ended September 30, 2024.
Previous wording
(1) Segment Adjusted EBITDA excludes the impact of unallocated corporate costs of $21.5 million and $51.4 million for the three and six months ended June 30, 2024, respectively.
Current wording
(1) Segment Adjusted EBITDA excludes the impact of unallocated corporate costs of $21.5 million and $72.9 million for the three and nine months ended September 30, 2024, respectively.
Previous wording
•Adjusted EBITDA margin for the three and six months ended June 30, 2024 decreased primarily due to higher discretionary spending, lower volume leverage and higher employee-related costs, partially offset by strong price/cost and favorable operational productivity. The six months ended June 30, 2024 were also negatively impacted by unfavorable mix.
Current wording
•Excluding the accretive impact of divestitures, Adjusted EBITDA margin for the three and nine months ended September 30, 2024 decreased primarily due to higher employee-related costs, higher discretionary spending and unfavorable mix, partially offset by price/cost. The nine months ended September 30, 2024 were also negatively impacted by lower volumes, which were more than offset by favorable operational productivity.
Previous wording
(1)Acquisitions included Iridian Spectral Technologies acquired in May 2023 and STC Material Solutions acquired in December 2023. Divestitures included Micropump, Inc. sold in August 2023 and Novotema, SpA sold in December 2023.
Current wording
(1)Acquisitions included Iridian Spectral Technologies acquired in May 2023, STC Material Solutions acquired in December 2023 and Mott acquired in September 2024. Divestitures included Micropump sold in August 2023 and Novotema, SpA sold in December 2023.
Previous wording
•Organic net sales for the three and six months ended June 30, 2024 were negatively impacted by lower volumes driven by continued broad based market softness, which began in the second half of 2023. This decrease was partially offset by price capture.
Current wording
•Organic net sales for the three and nine months ended September 30, 2024 were negatively impacted by lower volumes driven by continued broad based market softness in 2024. This decrease was partially offset by price capture.
Previous wording
•Excluding the net accretive impact of acquisitions and divestitures, Adjusted EBITDA margin for the three and six months ended June 30, 2024 decreased primarily due to lower volume leverage, unfavorable mix and higher employee-related costs, partially offset by favorable operational productivity, strong price/cost and lower discretionary spending.
Current wording
•Excluding the net accretive impact of acquisitions and divestitures, Adjusted EBITDA margin for the three and nine months ended September 30, 2024 decreased primarily due to lower volume, higher employee-related costs and unfavorable mix, partially offset by price/cost, favorable operational productivity and lower discretionary spending.
Previous wording
•Organic net sales for the three and six months ended June 30, 2024 were positively impacted by price capture across all markets, which more than offset the impact of slightly lower volumes as compared to the same prior year periods.
Current wording
•Organic net sales for the three and nine months ended September 30, 2024 were positively impacted by price capture as compared to the same prior year periods. Key growth initiatives and strength in the aerospace market more than offset the cyclical nature of project sales in our North American dispensing business during the three months ended
Previous wording
Operating working capital increased $12.8 million to $681.7 million at June 30, 2024. Acquisitions, divestitures and foreign currency translation decreased Operating working capital by $19.6 million during the six months ended June 30, 2024. Apart from these items, receivables increased due to strong price capture, which more than offset the impact of lower volumes and inventories increased to support planned production.
Current wording
Operating working capital increased $84.0 million to $752.9 million at September 30, 2024. Acquisitions, divestitures and foreign currency translation increased Operating working capital by $64.0 million during the nine months ended September 30, 2024. Apart from these items, receivables increased due to strong price capture, which more than offset the impact of lower volumes; inventories increased to support planned production; and accounts payable increased as a result of higher inventory purchases and timing of payments.
Previous wording
Cash flows provided by operating activities increased $1.1 million to $290.2 million in the six months ended June 30, 2024 primarily due to lower cash payments including payments for variable compensation and lower tax payments in 2024 compared to the prior year, largely offset by lower earnings in 2024 compared to the prior year and higher investments in working capital driven by higher inventory purchases to support planned production and increased receivables due to strong price capture.
Current wording
Cash flows provided by operating activities decreased $20.2 million in the nine months ended September 30, 2024 as compared to the same prior year period primarily due to lower earnings in 2024 compared to the prior year and higher investments in operating working capital driven by higher inventory purchases to support planned production and increased receivables due to strong price capture, partially offset by lower cash payments including payments for taxes and variable compensation in 2024 compared to the prior year.
Previous wording
Capital expenditures generally include machinery and equipment that support growth and improved productivity, tooling, business system technology, replacement of equipment and investments in new facilities. The Company believes it has sufficient operating cash flows to continue to meet current obligations and invest in planned capital expenditures. Cash flows from operations were more than adequate to fund capital expenditures of $35.9 million and $48.2 million in the first six months of 2024 and 2023, respectively.
Current wording
Capital expenditures generally include machinery and equipment that support growth and improved productivity, tooling, business system technology, replacement of equipment and investments in new facilities. The Company believes it has sufficient operating cash flows to continue to meet current obligations and invest in planned capital expenditures. Cash flows from operations were more than adequate to fund capital expenditures of $49.6 million and $68.3 million in the first nine months of 2024 and 2023, respectively.
Previous wording
There were no share repurchases during the six months ended June 30, 2024. During the six months ended June 30, 2023, the Company repurchased 5,400 shares at a cost of $1.1 million, of which $0.1 million was settled in July 2023. As of June 30, 2024, the amount of share repurchase authorization remaining was $539.7 million. For additional information regarding the Company’s share repurchase program, refer to Note 11, “Share Repurchases,” in the Notes to Condensed Consolidated Financial Statements.
Current wording
There were no share repurchases during the nine months ended September 30, 2024. During the nine months ended September 30, 2023, the Company repurchased 5,400 shares at a cost of $1.1 million. As of September 30, 2024, the amount of share repurchase authorization remaining was $539.7 million. For additional information regarding the Company’s share repurchase program, refer to Note 11, “Share Repurchases,” in the Notes to Condensed Consolidated Financial Statements.
Previous wording
Total dividend payments to common shareholders were $100.7 million during the six months ended June 30, 2024 compared with $93.9 million during the six months ended June 30, 2023.
Current wording
Total dividend payments to common shareholders were $153.0 million during the nine months ended September 30, 2024 compared with $142.3 million during the nine months ended September 30, 2023.
Previous wording
The key financial covenants that the Company is required to maintain in connection with the Revolving Facility, the Term Facility, the 3.37% Senior Notes and the 5.13% Senior Notes, are a minimum interest coverage ratio of 3.0 to 1 and a maximum leverage ratio of 3.50 to 1. At June 30, 2024, the Company was in compliance with these financial covenants, as the Company’s interest coverage ratio was 18.73 to 1 for covenant calculation purposes and the leverage ratio was 1.50 to 1. There are no financial covenants relating to the 2.625% Senior Notes or the 3.00% Senior Notes; however, both are subject to cross-default provisions.
Current wording
The key financial covenants that the Company is required to maintain in connection with the Revolving Facility, the Term Facility, the 3.37% Senior Notes and the 5.13% Senior Notes, are a minimum interest coverage ratio of 3.0 to 1 and a maximum leverage ratio of 3.50 to 1. At September 30, 2024, the Company was in compliance with these financial covenants, as the Company’s interest coverage ratio was 18.19 to 1 for covenant calculation purposes and the leverage ratio was 2.39 to 1. There are no financial covenants relating to the 2.625% Senior Notes, the 3.00% Senior Notes and the 4.950% Senior Notes; however, all are subject to cross-acceleration provisions.
Previous wording
The Company had $21.2 million of letters of credit as of June 30, 2024, primarily issued as security for insurance and other performance obligations. Of the $21.2 million of letters of credit, only $2.7 million reduced the Company’s borrowing capacity under the Revolving Facility as of June 30, 2024.
Current wording
The Company had $47.0 million of letters of credit as of September 30, 2024, primarily issued as security for insurance and other performance obligations. Of the $47.0 million of letters of credit, only $2.7 million reduced the Company’s borrowing capacity under the Revolving Facility as of September 30, 2024. The Company has restricted cash of $18.1 million as of September 30, 2024, which represents cash held as collateral for standby letters of credit issued by Mott and is required to keep the balance in a separate account for the duration of the letters of credit.
Previous wording
(2) Represents a reserve on an investment with a collaborative partner recorded in Other expense (income) – net during the three and six months ended June 30, 2023. During the fourth quarter of 2023, the Company converted the promissory note receivable from the collaborative partner to equity, resulting in a cost method investment with zero value.
Current wording
(3) Represents a reserve on an investment with a collaborative partner recorded in Other expense (income) – net during the nine months ended September 30, 2023. During the fourth quarter of 2023, the Company converted the promissory note receivable from the collaborative partner to equity, resulting in a cost method investment with zero value.