ROGERS CORPORATION As used herein, the "Company," "Rogers," "we," "us," "our" and similar terms includeRogers Corporation and its subsidiaries, unless the context indicates otherwise. Forward-Looking Statements This Quarterly Report on Form 10-Q includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Such statements are generally accompanied by words such as "anticipate," "assume," "believe," "could," "estimate," "expect," "foresee," "goal," "intend," "may," "might," "plan," "potential," "predict," "project," "should," "seek," "target" or similar expressions that convey uncertainty as to future events or outcomes. Forward-looking statements are based on assumptions and beliefs that we believe to be reasonable; however, assumed facts almost always vary from actual results, and the differences between assumed facts and actual results could be material depending upon the circumstances. Where we express an expectation or belief as to future results, that expectation or belief is expressed in good faith and based on assumptions believed to have a reasonable basis. We cannot assure you, however, that the stated expectation or belief will occur or be achieved or accomplished. Among the factors that could cause our results to differ materially from those indicated by forward-looking statements are risks and uncertainties inherent in our business including, without limitation: •the duration and impacts of the novel coronavirus (COVID-19) global pandemic and efforts to contain its transmission and distribute vaccines, including the effect of these factors on our business, suppliers, customers, end users and economic conditions generally; •failure to capitalize on, volatility within, or other adverse changes with respect to the Company's growth drivers, including advanced mobility and advanced connectivity, such as delays in adoption or implementation of new technologies; •uncertain business, economic and political conditions inthe United States (U.S. ) and abroad, particularly inChina ,South Korea ,Germany ,Hungary andBelgium , where we maintain significant manufacturing, sales or administrative operations; •the trade policy dynamics between theU.S. andChina reflected in trade agreement negotiations and the imposition of tariffs and other trade restrictions, including trade restrictions onHuawei Technologies Co., Ltd. (Huawei); •fluctuations in foreign currency exchange rates; •our ability to develop innovative products and the extent to which they are incorporated into end-user products and systems; •the extent to which end-user products and systems incorporating our products achieve commercial success; •the ability of our sole or limited source suppliers to deliver certain key raw materials, including commodities, to us in a timely and cost-effective manner; •intense global competition affecting both our existing products and products currently under development; •business interruptions due to catastrophes or other similar events, such as natural disasters, war, terrorism or public health crises; •failure to realize, or delays in the realization of, anticipated benefits of acquisitions and divestitures due to, among other things, the existence of unknown liabilities or difficulty integrating acquired businesses; •our ability to attract and retain management and skilled technical personnel; •our ability to protect our proprietary technology from infringement by third parties and/or allegations that our technology infringes third party rights; •changes in effective tax rates or tax laws and regulations in the jurisdictions in which we operate; •failure to comply with financial and restrictive covenants in our credit agreement or restrictions on our operational and financial flexibility due to such covenants; •the outcome of ongoing and future litigation, including our asbestos-related product liability litigation; •changes in environmental laws and regulations applicable to our business; and •disruptions in, or breaches of, our information technology systems. Our forward-looking statements are expressly qualified by these cautionary statements, which you should consider carefully, along with the risks discussed in this section and elsewhere in this report, including under the section entitled "Risk Factors" in Part II, Item 1A and in our Annual Report on Form 10-K for the year endedDecember 31, 2020 (the Annual Report) and our other reports filed with theSecurities and Exchange Commission , any of which could cause actual results to differ materially from historical results or anticipated results. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law. The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and the related notes that appear elsewhere in this Form 10-Q along with our audited consolidated financial statements and the related notes thereto in our Annual Report. 23 -------------------------------------------------------------------------------- Company Background and StrategyRogers Corporation designs, develops, manufactures and sells high-performance and high-reliability engineered materials and components to meet our customers' demanding challenges. We operate two strategic operating segments: Advanced Electronics Solutions (AES) and Elastomeric Material Solutions (EMS). The remaining operations, which represent our non-core businesses, are reported in our Other operating segment. We have a history of innovation and have establishedInnovation Centers for our research and development (R&D) activities inChandler, Arizona ,Burlington, Massachusetts ,Eschenbach ,Germany andSuzhou, China . We are headquartered inChandler, Arizona . Our growth strategy is based upon the following principles: (1) market-driven organization, (2) innovation leadership, (3) synergistic mergers and acquisitions, and (4) operational excellence. As a market-driven organization, we are focused on growth drivers, including advanced mobility and advanced connectivity. More specifically, in addition to the impact of COVID-19 discussed below, the key medium- to long-term trends currently affecting our business include the increasing use of advanced driver assistance systems (ADAS) and increasing electrification of vehicles, including electric and hybrid electric vehicles (EV/HEV), in the automotive industry and the growth of 5G smartphones in the portable electronics industry. In addition to our focus on advanced mobility and advanced connectivity in the automotive, portable electronics and telecommunications industries, we sell into a variety of other markets including general industrial, aerospace and defense, mass transit, clean energy and connected devices. Our sales and marketing approach is based on addressing these trends, while our strategy focuses on factors for success as a manufacturer of engineered materials and components: performance, quality, service, cost, efficiency, innovation and technology. We have expanded our capabilities through organic investment and acquisitions and strive to ensure high quality solutions for our customers. We continue to review and re-align our manufacturing and engineering footprint in an effort to maintain a leading competitive position globally. We have established or expanded our capabilities in various locations in support of our customers' growth initiatives. We seek to enhance our operational and financial performance by investing in research and development, manufacturing and materials efficiencies, and new product initiatives that respond to the needs of our customers. We strive to evaluate operational and strategic alternatives to improve our business structure and align our business with the changing needs of our customers and major industry trends affecting our business. COVID-19 Update The global COVID-19 pandemic has affected and continues to affect Rogers' business and operations, although to a lesser extent than the first half of 2020. In response to the outbreak, Rogers prioritized the safety and well-being of its employees-including implementing social distancing initiatives in its facilities, providing remote working arrangements for certain employees, expanding personal protective equipment usage, enhancing plant hygiene processes, and extending employee benefits, which increased our expenses-while at the same time taking actions to preserve business continuity. Our non-manufacturing employees transitioned seamlessly to remote working arrangements and are effectively collaborating both internally and with our customers. In some cases, based on local conditions, non-manufacturing employees have returned to their worksites. We expect that the COVID-19 pandemic will have a continuing but uncertain impact on our business and operations in the short- and medium-term. Due to the above circumstances and as described generally in this Form 10-Q, our results of operations for the three months endedMarch 31, 2021 are not necessarily indicative of the results to be expected for the full year. Executive Summary The following key highlights and factors should be considered when reviewing our results of operations, financial position and liquidity: •In the first quarter of 2021 as compared to the first quarter of 2020, our net sales increased 15.3% to$229.3 million , our gross margin increased approximately 600 basis points to 39.0% from 33.0%, and operating income increased approximately 740 basis points to 16.2% from 8.8%. •We made$21.0 million of discretionary principal payments on our revolving credit facility during the first quarter of 2021. •We recognized$1.5 million of restructuring charges in the first quarter of 2021 related to the manufacturing footprint optimization plans involving certainEurope andAsia manufacturing locations, primarily impacting our AES operating segment. •In earlyFebruary 2021 , there was a fire at our UTIS manufacturing facility in Ansan,South Korea . This facility manufactures eSorba® polyurethane foams used in portable electronics and display applications. These operations will be disrupted into at least late 2021. We are currently evaluating alternative facility options. We recognized net expense 24 -------------------------------------------------------------------------------- of$1.3 million related to the financial impacts from the fire, which consisted of write-offs of fixed assets and inventory destroyed and/or damaged in the fire, professional services, costs incurred due to obligations under our manufacturing facility lease agreement, compensation and benefits for certain of our UTIS employees, partially offset by the recognition of certain anticipated insurance recoveries. •We incurred incremental transaction costs of$0.7 million in both the first quarter of 2021 and the first quarter of 2020 due to the COVID-19 pandemic. Results of Operations The following table sets forth, for the periods indicated, selected operations data expressed as a percentage of net sales: Three Months Ended March 31, 2021 March 31, 2020 Net sales 100.0 % 100.0 % Gross margin 39.0 % 33.0 % Selling, general and administrative expenses 18.5 % 20.3 % Research and development expenses 3.1 % 3.9 % Restructuring and impairment charges 0.7 % - % Other operating (income) expense, net 0.5 % - % Operating income 16.2 %
8.8 %
Equity income in unconsolidated joint ventures 1.0 % 0.6 % Other income (expense), net 1.3 % (0.4) % Interest expense, net (0.3) % (0.6) % Income before income tax expense 18.2 % 8.4 % Income tax expense 4.6 % 1.7 % Net income 13.6 % 6.7 %Net Sales and Gross Margin Three Months Ended (Dollars in thousands) March 31, 2021 March 31, 2020 Net sales$ 229,265 $ 198,810 Gross margin$ 89,499 $ 65,630 Percentage of net sales 39.0 % 33.0 % Net sales increased by 15.3% in the first quarter of 2021 compared to the first quarter of 2020. Our AES and EMS operating segments had net sales increases of 18.5% and 10.0%, respectively. The increase in net sales was primarily due to higher net sales in the ADAS, aerospace and defense and clean energy markets in our AES operating segment and higher net sales in the EV/HEV, general industrial, consumer and automotive markets in our EMS operating segment. Net sales were favorably impacted by foreign currency impacts of$8.2 million , or 4.1%, due to the appreciation in value of the euro and Chinese renminbi relative to theU.S. dollar. Gross margin as a percentage of net sales increased approximately 600 basis points to 39.0% in the first quarter of 2021 compared to 33.0% in the first quarter of 2020. Gross margin in the first quarter of 2021 was favorably impacted by higher volume in our AES and EMS operating segments, favorable product mix in our EMS operating segment, favorable absorption of fixed overhead costs and favorable productivity improvements in our AES operating segment, as well as yield improvements and a lower inventory reserves provision in our EMS operating segment. This was partially offset by higher commodity costs and unfavorable product mix in our AES operating segment and higher freight expenses in our EMS operating segment. Our UTIS net sales were only slightly impacted by the fire at our UTIS manufacturing facility in Ansan,South Korea as a result of selling our undamaged finished goods inventory during the remainder of the first quarter of 2021. In the second quarter of 2021, we expect a greater impact to our net sales due to the continued disruption to our UTIS operations. In the first quarter of 2021, our net sales were largely unaffected by global supply chain disruptions, but we began seeing some greater impacts as we exited the quarter. In the second quarter of 2021, the lack of availability of certain raw materials, 25 --------------------------------------------------------------------------------
primarily due to the weather interruptions along the
Three Months Ended
(Dollars in thousands) March 31, 2021 March 31, 2020
Selling, general and administrative expenses $ 42,413 $ 40,330
Percentage of net sales 18.5 % 20.3 %
Selling, general and administrative (SG&A) expenses increased 5.2% in the first
quarter of 2021 from the first quarter of 2020, primarily due to a $2.5 million
increase in total compensation and benefits, a $0.8 million increase in software
expenses, a $0.2 million increase in environmental charges and a $0.1 million
increase in recruiting/relocation/training expenses. This was partially offset
by a $1.2 million decrease in travel and entertainment expenses, a $0.5 million
decrease in other intangible assets amortization and a $0.1 million decrease in
depreciation.
The decrease in travel and entertainment and recruiting/relocation/training
expenses was primarily driven by the impacts of COVID-19.
Research and Development Expenses
Three Months Ended
(Dollars in thousands) March 31, 2021 March 31, 2020
Research and development expenses
3.1 % 3.9 %
R&D expenses decreased 8.1% in the first quarter of 2021 from the first quarter
of 2020 due to decreases in professional services, travel and entertainment
expenses, total compensation and benefits and laboratory expenses, partially
offset by an increase in depreciation. The decrease in travel and entertainment
expenses was primarily driven by the impacts of COVID-19.
Restructuring and Impairment Charges and Other Operating (Income) Expense, Net
Three Months Ended
(Dollars in thousands) March 31, 2021 March 31, 2020
Restructuring and impairment charges $ 1,506 $ -
Other operating (income) expense, net $ 1,215 $ 20
We incurred restructuring charges and related expenses associated with our
manufacturing footprint optimization plans involving certain Europe and Asia
manufacturing locations. We recognized $1.5 million of restructuring charges and
related expenses pertaining to these restructuring projects in the first quarter
of 2021. For additional information, refer to "Note 15 - Supplemental Financial
Information" to the condensed consolidated financial statements in Part I, Item
1 of this Form 10-Q.
With respect to other operating (income) expense, net, we recognized expense of
$1.2 million primarily related to the financial impacts from the fire at our
UTIS manufacturing facility in Ansan, South Korea in the first quarter of 2021.
This impact consisted of write-offs of fixed assets and inventory destroyed
and/or damaged in the fire, professional services, costs incurred due to
obligations under our manufacturing facility lease agreement, compensation and
benefits for certain of our UTIS employees, partially offset by the recognition
of certain anticipated insurance recoveries. There may be other potential costs
that cannot be reasonably foreseen or estimated at this time and we continue to
evaluate information as it becomes available. For additional information, refer
to "Note 15 - Supplemental Financial Information" to the condensed consolidated
financial statements in Part I, Item 1 of this Form 10-Q.
Equity Income in Unconsolidated Joint Ventures
Three Months Ended
(Dollars in thousands) March 31, 2021 March 31, 2020
Equity income in unconsolidated joint ventures $ 2,181 $ 1,218
As of March 31, 2021 , we had two unconsolidated joint ventures, each 50% owned:
Rogers INOAC Corporation (RIC) and Rogers INOAC Suzhou Corporation (RIS). Equity
income in those unconsolidated joint ventures increased 79.1% in the first
quarter of 2021 from the first quarter of 2020. On a quarter-to-date basis, the
increase was due to higher net sales, driven by strong sales in the portable
electronics market, and improved operational performance for both RIS and RIC,
primarily due to higher utilization of production capacity.
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Other Income (Expense), Net
Three Months Ended
(Dollars in thousands) March 31, 2021 March 31, 2020
Other income (expense), net $ 2,968 $ (786)
Other income (expense), net increased to income of $3.0 million in the first
quarter of 2021 from expense of $0.8 million in the first quarter of 2020. On a
quarter-to-date basis, the increase was due to favorable impacts from our copper
derivative contracts and foreign currency transactions, partially offset by
unfavorable impacts from our foreign currency derivative contracts.
Interest Expense, Net
Three Months Ended
(Dollars in thousands)
Interest expense, net, decreased by 49.7% in the first quarter of 2021 from the
first quarter of 2020. The decrease on a quarter-to-date basis was primarily due
to a lower weighted-average outstanding balance for our borrowings under our
revolving credit facility. We expect interest expense, net to decrease on
quarter-to-date and year-to-date bases in the second quarter of 2021 from the
second quarter of 2020 primarily due to a lower weighted-average outstanding
balance for our borrowings under our revolving credit facility.
Income Taxes
Three Months Ended
(Dollars in thousands) March 31, 2021 March 31, 2020
Income tax expense $ 10,517 $ 3,441
Effective tax rate 25.2 % 20.6 %
Our effective income tax rate was 25.2% and 20.6% for the three months ended
March 31, 2021 and 2020, respectively. The increase from the first quarter of
2020 was primarily due to the decrease in the current quarter valuation
allowance release and decrease in current quarter reversals of unrecognized tax
benefits.
Operating Segment Net Sales and Operating Income
Advanced Electronics Solutions
Three Months Ended
(Dollars in thousands) March 31, 2021 March 31, 2020
Net sales $ 131,892 $ 111,274
Operating income $ 14,849 $ 4,778
AES net sales increased by 18.5% in the first quarter of 2021 compared to the
first quarter of 2020. The increase in net sales over the first quarter of 2020
was primarily driven by higher net sales in the ADAS, aerospace and defense and
clean energy markets. Net sales were favorably impacted by foreign currency
fluctuations of $5.3 million , or 4.8%, due to the appreciation in value of the
euro and Chinese renminbi relative to the U.S. dollar.
Operating income increased by 210.8% in the first quarter of 2021 from the first
quarter of 2020. As a percentage of net sales, operating income in the first
quarter of 2021 was 11.3%, an approximately 700 basis point increase as compared
to the 4.3% reported in the first quarter of 2020. The increase in operating
income was primarily due to higher volume, favorable absorption of fixed
overhead costs and favorable productivity improvements. This was partially
offset by higher commodity costs and unfavorable product mix.
Additionally, we incurred restructuring charges and related expenses associated
with our manufacturing footprint optimization plans involving certain Europe and
Asia manufacturing locations. We recognized $1.5 million of restructuring
charges and related expenses pertaining to these restructuring projects in the
first quarter of 2021. For additional information, refer to "Note 15 -
Supplemental Financial Information" to the condensed consolidated financial
statements in Part I, Item 1 of this Form 10-Q.
In the first quarter of 2021, our net sales were largely unaffected by global
supply chain disruptions, but we began seeing some greater impacts as we exited
the quarter. In the second quarter of 2021, the lack of availability of certain
raw materials, primarily due to the weather interruptions along the U.S. Gulf
Coast , will likely somewhat temper our net sales growth and gross margin.
27
--------------------------------------------------------------------------------Elastomeric Material Solutions
Three Months Ended
(Dollars in thousands) March 31, 2021 March 31, 2020
Net sales $ 91,849 $ 83,526
Operating income $ 20,077 $ 11,517
EMS net sales increased by 10.0% in the first quarter of 2021 compared to the
first quarter of 2020. The increase in net sales over the first quarter of 2020
was primarily driven by higher net sales in the EV/HEV, general industrial,
consumer and automotive markets, partially offset by lower net sales in the mass
transit market. Net sales were favorably impacted by foreign currency
fluctuations of $2.7 million , or 3.3%, due to the appreciation in value of the
Chinese renminbi and euro relative to the U.S. dollar.
Operating income increased by 74.3% in the first quarter of 2021 from the first
quarter of 2020. As a percentage of net sales, first quarter of 2021 operating
income was 21.9%, an approximately 810 basis point increase as compared to the
13.8% reported in the first quarter of 2020. The increase in operating income
was primarily due to higher volume, yield improvements and a lower inventory
reserves provision. This was partially offset by higher freight expenses.
Additionally, we recognized expense of $1.3 million primarily related to the
financial impacts from the fire at our UTIS manufacturing facility in Ansan,
South Korea in the first quarter of 2021. This impact consisted of write-offs of
fixed assets and inventory destroyed and/or damaged in the fire, professional
services, costs incurred due to obligations under our manufacturing facility
lease agreement, compensation and benefits for certain of our UTIS employees,
partially offset by the recognition of certain anticipated insurance recoveries.
There may be other potential costs that cannot be reasonably foreseen or
estimated at this time and we continue to evaluate information as it becomes
available. For additional information, refer to "Note 15 - Supplemental
Financial Information" to the condensed consolidated financial statements in
Part I, Item 1 of this Form 10-Q.
Our UTIS net sales were only slightly impacted by the fire at our UTIS
manufacturing facility in Ansan, South Korea as a result of selling our
undamaged finished goods inventory during the remainder of the first quarter of
2021. In the second quarter of 2021, we expect a greater impact to our net sales
due to the continued disruption to our UTIS operations.
In the first quarter of 2021, our net sales were largely unaffected by global
supply chain disruptions, but we began seeing some greater impacts as we exited
the quarter. In the second quarter of 2021, the lack of availability of certain
raw materials, primarily due to the weather interruptions along the U.S. Gulf
Coast , will likely somewhat temper our net sales growth and gross margin.
Other
Three Months Ended
(Dollars in thousands) March 31, 2021 March 31, 2020
Net sales $ 5,524 $ 4,010
Operating income $ 2,267 $ 1,180
Net sales in this segment increased by 37.8% in the first quarter of 2021 from
the first quarter of 2020. The increase in net sales over the first quarter of
2020 was primarily driven by higher demand in the automotive market. Net sales
were favorably impacted by foreign currency fluctuations of $0.2 million , or
4.4%, due to the appreciation in value of the Chinese renminbi relative to the
U.S. dollar.
Operating income increased 92.1% in the first quarter of 2021 compared to the
first quarter of 2020. The increase in operating income was primarily driven by
higher volume, favorable product mix and favorable absorption of fixed overhead
costs.
As a percentage of net sales, first quarter of 2021 operating income was 41.0%,
a 1,160 basis point increase as compared to the 29.4% reported in the first
quarter of 2020.
Liquidity, Capital Resources and Financial Position
We believe that our existing sources of liquidity and cash flows that we expect
to generate from our operations, together with our available credit facilities,
will be sufficient to fund our operations, currently planned capital
expenditures, research and development efforts and our debt service commitments,
for at least the next 12 months. We regularly review and evaluate the adequacy
of our cash flows, borrowing facilities and banking relationships in an effort
to ensure that we have the appropriate access to cash to fund both our near-term
operating needs and our long-term strategic initiatives.
28
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The following table illustrates the location of our cash and cash equivalents by
our three major geographic areas:
(Dollars in thousands) March 31, 2021 December 31, 2020
United States $ 28,692 $ 21,657
Europe 51,834 55,449
Asia 118,583 114,679
Total cash and cash equivalents
Approximately$170.4 million of our cash and cash equivalents were held by non-U.S. subsidiaries as ofMarch 31, 2021 . We did not make any changes in the three months endedMarch 31, 2021 to our position on the permanent reinvestment of our earnings from foreign operations. With the exception of certain of our Chinese subsidiaries, where a substantial portion of ourAsia cash and cash equivalents are held, we continue to assert that historical foreign earnings are indefinitely reinvested. (Dollars in thousands) March 31, 2021 December 31, 2020 Key Financial Position Accounts: Cash and cash equivalents$ 199,109 $ 191,785 Accounts receivable, net$ 144,049 $ 134,421 Inventories$ 106,706 $ 102,360
Borrowings under revolving credit facility $ 4,000 $
25,000
Changes in key financial position accounts and other significant changes in our statements of financial position fromDecember 31, 2020 toMarch 31, 2021 were as follows: •Accounts receivable, net increased 7.2% to$144.0 million as ofMarch 31, 2021 from$134.4 million as ofDecember 31, 2020 . The increase from year-end was primarily due to higher net sales at the end of the first quarter of 2021 compared to at the end of 2020. •Inventories increased 4.2% to$106.7 million as ofMarch 31, 2021 , from$102.4 million as ofDecember 31, 2020 , primarily driven by the ramp up of raw material purchases and production efforts to meet anticipated demand. •Borrowings under revolving credit facility decreased 84.0% to$4.0 million as ofMarch 31, 2021 , from$25.0 million as ofDecember 31, 2020 . This was as a result of$21.0 million of discretionary principal payments on our revolving credit facility during the first quarter of 2021. For additional information regarding this facility and the Fourth Amended Credit Agreement, refer to "Note 9 - Debt" to the condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q. Three Months Ended (Dollars in thousands) March 31, 2021 March 31, 2020Key Cash Flow Measures : Net cash provided by operating activities$ 36,521 $ 8,633 Net cash used in investing activities$ (3,602) $ (11,160) Net cash (used in) provided by financing activities $
(23,181)
As ofMarch 31, 2021 , cash and cash equivalents were$199.1 million as compared to$191.8 million as ofDecember 31, 2020 , an increase of$7.3 million , or 3.8%. This increase was primarily due to cash flows generated by operations, partially offset by$21.0 million of discretionary principal payments on our revolving credit facility during the first quarter of 2021,$3.6 million in capital expenditures and$2.6 million in tax payments related to net share settlement of equity awards. In 2021, we continue to expect capital spending to be in the range of approximately$70.0 million to$80.0 million , which we plan to fund with cash from operations. This range excludes the capital expenditures necessary to restore the UTIS operations, a significant portion of which we expect to be reimbursed by insurance proceeds. Restrictions on Payment of Dividends The Fourth Amended Credit Agreement generally permits us to pay cash dividends to our shareholders, provided that (i) no default or event of default has occurred and is continuing or would result from the dividend payment and (ii) our total net leverage ratio does not exceed 2.75 to 1.00. If our total net leverage ratio exceeds 2.75 to 1.00, we may nonetheless make up to$20.0 million in restricted payments, including cash dividends, during each fiscal year, provided that no default or event of default has occurred and is continuing or would result from the payments. Our total net leverage ratio did not exceed 2.75 to 1.00 as ofMarch 31, 2021 . 29 --------------------------------------------------------------------------------
Contingencies
During the first quarter of 2021, we did not become aware of any material developments related to environmental matters disclosed in our Annual Report, our asbestos litigation or other material contingencies previously disclosed or incur any material costs or capital expenditures related to such matters. Refer to "Note 12 - Commitments and Contingencies" to the condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q for further discussion of these contingencies. Off-Balance Sheet Arrangements As ofMarch 31, 2021 , we did not have any off-balance sheet arrangements that have or are, in the opinion of management, reasonably likely to have a current or future material effect on our results of operations or financial position. Critical Accounting Policies There were no material changes in our critical accounting policies during the first quarter of 2021. Recent Accounting Pronouncements Refer to "Note 16 - Recent Accounting Standards" to the condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q for discussion of recent accounting pronouncements including expected dates of adoption. 30
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