Risk Factors Update Summary

• Gross margin percentage decreased by approximately 5% in 2023 compared to 2022 due to lower market pricing.
• Inventory decreased by $3.7 million from $215.5 million to $211.8 million.
• The company acquired U.S. Amines for approximately $97 million, with intangible assets of $34 million.
• The company exited an alliance, receiving a termination fee of $11.4 million in Q3 2023.
• Amendment No. 1 and No. 2 to the Caprolactam and Polymer Supply Agreement, effective Jan 1, 2023.
• Costs of goods sold decreased by $262 million (16%) in 2023 compared to 2022.
• Pension obligation decreased by $13.1 million from $80.2 million to $67.1 million.
• Sales by product line: Nylon decreased from $485.2 million in 2022 to $356.6 million in 2023.
• Deferred tax assets increased by $6.9 million from $39.9 million to $46.8 million.
• Change in reporting dates from "August 1, 2019" to "June 20, 2023" is significant.
• Selling, general, and administrative expenses increased by $7.8 million (9%) in 2023 compared to 2022.
• Sales decreased by approximately $261 million (15%) in 2023 compared to 2022.
• Deferred income and customer advances decreased from $34.7 million in 2022 to $15.4 million in 2023.
• Accounts and other receivables decreased by $10.0 million from $175.4 million to $165.4 million.
• Increase in Offer of Employment Letters from 10 to 11, indicating expanded hiring activities.
• Interest expense, net increased by $4.2 million (169%) in 2023 compared to 2022.
• The company incurred an unfavorable impact of approximately $4.5 million due to ceasing production of certain products in Q3 2023.
• Capital expenditures increased to approximately $110-120 million in 2023 compared to $89 million in 2022.
• Operating lease liabilities decreased by $19.6 million from $115.0 million to $95.4 million.
• Net cash provided by operating activities decreased by $54 million in 2023 compared to 2022.
• Net deferred taxes decreased by $9.4 million from $160.4 million to $151.0 million.
• Purchases of property, plant, and equipment increased to $107 million in 2023 compared to $82.9 million in 2022.
• Weighted average remaining lease term for operating leases increased from 8.5 years to 9.1 years.