The following discussion and analysis should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and the accompanying notes thereto included elsewhere in this report.
Cautionary Statement Regarding Forward-Looking Statements
The following discussion and analysis contains certain financial predictions, forecasts and projections which constitute
“forward-looking statements”
within the meaning of the federal securities laws. Actual results could differ materially from those financial predictions, forecasts and projections and there can be no assurance that we will achieve such financial predictions, forecasts and projections. Factors that could affect financial predictions, forecasts and projections include availability of liquidity, fluctuations in commodity prices and any conditions internal to our major customers, including loss of their accounts and other factors as listed in our Form 10-K for the year ended
December 31, 2016
, as filed with the Securities and Exchange Commission.
General
Industrial Services of America, Inc. (herein “ISA,” the “Company,” “we,” “us,” “our,” or other similar terms) is a Louisville, Kentucky-based company that buys, processes and markets ferrous and non-ferrous metals and other recyclable commodities and buys used autos in order to sell used auto parts. We purchase, process and sell ferrous and non-ferrous scrap metal to steel mini-mills, integrated steel makers, foundries, refineries and processors. We purchase ferrous and non-ferrous scrap metal primarily from industrial and commercial generators of steel, aluminum, copper, brass, stainless steel and other metals as well as from scrap dealers and retail customers who deliver these materials directly to our facilities. We process scrap metal through our sorting, cutting, baling, and shredding operations. The shredding operations were restarted in May 2017. Our non-ferrous scrap recycling operations consist primarily of collecting, sorting and processing various grades of copper, aluminum, stainless steel and brass. Our used automobile yard primarily purchases automobiles so that retail customers can locate and remove used parts for purchase.
Our core business is now focused on the metal recycling industry. During
2016
, we announced that the Company formed a special committee of independent board members to evaluate various growth and strategic options. During the first quarter of
2017
, the special committee concluded its work and reported to the Board. The Board accepted the special committee's recommendation to focus on returning our core recycling business to profitability. We intend to do this by increasing efficiencies and productivity, which included the commercial restart of our auto shredder in the second quarter of
2017
. We intend to run the auto shredder in the normal course of business subject to market conditions and operating needs. We will also evaluate other various options and remain alert for possible strategic partnerships, joint ventures and mergers/acquisitions.
The Company announced on October 4, 2016 the Company and Algar, Inc. ("Algar") mutually agreed to terminate the Management Agreement between us, pursuant to the Agreement to Terminate Management Services among the Company, Algar, and Sean Garber dated as of September 30, 2016. Effective September 30, 2016, Mr. Garber resigned from all positions with the Company, including as President. Also, on September 30, 2016, the Company’s Chief Financial Officer was appointed to serve in the additional role as President.
Liquidity and Capital Resources
Our cash requirements generally consist of working capital, capital expenditures and debt service.
Influenced by the scrap metal market downturn from late
2014
through
2016
, our sources of liquidity during this time primarily consisted of proceeds from asset and equity sales as well as the idling of the auto shredder and refinancing of our working capital line of credit. Additional information, including the steps the Company took, is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016, on file with the Securities and Exchange Commission
.
Furthermore, on February 29, 2016, the Company refinanced its Wells Fargo debt with a new lender, MidCap Business Credit LLC ("MidCap"). On March 31, 2017, the Company entered into the First Amendment to the
2016
Loan, which extended the maturity date of the Company's line of credit and increased the line of credit from $
6.0
million to $
8.0
million, subject to the satisfaction of certain borrowing base restrictions as more fully described in the accompanying Notes to Condensed Consolidated Financial Statements. On April 26, 2017, certain borrowing base restrictions were satisfied with MidCap which resulted in an increase in availability of
$1.75 million
.
Cash flows generated from operations and our revolving credit facility are significant sources of ongoing liquidity. We have also been able to manage liquidity by deferring certain rent payments made to related parties, as well as deferring capital expenditures. See Note
6
- Related Party Transactions in the accompanying Notes to Condensed Consolidated Financial Statements for additional information. We actively manage our working capital and associated cash requirements and continually seek more effective use of cash. As of
September 30, 2017
, we held cash and cash
equivalents
of $
0.9
million. We
drew $
2.2
million
on our revolving credit facility during the
nine
month period ended
September 30, 2017
.
We expect operating cash flow and borrowings under our working capital line of credit to be sufficient to meet our ongoing obligations.
Credit facilities and notes payable
During
2015
, the Company had certain loans with KY Bank and Wells Fargo. As of December 31, 2014, the Company was in default under the Wells Fargo loans and during the second half of
2015
entered into a Forbearance Agreement with Wells Fargo whereby the
due
dates on the loans were accelerated and the Company was required to take certain actions.
During
2015
, as more fully described in
the Company's Annual Report on Form 10-K for the year ended December 31, 2016 on file with the Securities and Exchange Commission
, the Company took steps to pay down debt and increase liquidity.
See Note
1
- Summary of Significant Accounting Policies and General and Note
3
- Long Term Debt and Notes Payable to Bank in the accompanying Notes to Condensed Consolidated Financial Statements for further details on long term debt and notes payable.
Results of Operations
Nine
months ended
September 30, 2017
compared to
nine
months ended
September 30, 2016
The following table presents, for the periods indicated, the percentage relationship that certain captioned items in our Condensed Consolidated Statements of Operations bear to total revenue:
|
|
|
|
|
|
|
Nine
months ended
|
|
September 30
,
|
|
2017
|
|
2016
|
Statements of Operations Data:
|
|
|
|
Total revenue
|
100.0
|
%
|
|
100.0
|
%
|
Total cost of sales
|
93.8
|
%
|
|
97.6
|
%
|
Selling, general and administrative expenses
|
6.6
|
%
|
|
13.4
|
%
|
Loss before other expenses
|
(
0.5
|
)%
|
|
(
11.0
|
)%
|
Total revenue
increased
$
15.5
million or
59.4%
to $
41.5
million in the
nine
month period ended
2017
compared to $
26.0
million in the same period in
2016
.
Ferrous revenue
increased
$
6.9
million or
71.8%
to $
16.5
million in the
nine
month period ended
2017
compared to $
9.6
million in the same period in
2016
. For the
nine
months ended
September 30, 2017
compared to
nine
months ended
September 30, 2016
, the Company experienced an increase in the average selling price ("ASP") of ferrous material of $
82
per gross ton, or
44.9%
, partially as a result of the shredder restart that led to a favorable shift in the ferrous sales mix. For the
nine
months ended
September 30, 2017
compared to
nine
months ended
September 30, 2016
, the Company experienced an increase in ferrous material shipments of
9.5
thousand tons, or
17.9%
.
Tons shipped were negatively impacted by the shredder restart due to the inherent nature of the shredding process.
Nonf
errous revenue
increased
$
8.8
million or
58.4%
to $
23.9
million in the
nine
month period ended
2017
compared to $
15.1
million in the same period in
2016
.
Nonferrous material shipments
increased
by
5.7
million pounds, or
27.4%
, along with
an increase
in the ASP of nonferrous material of $
0.18
per pound, or
24.3%
, for the
nine
months ended
September 30, 2017
compared to
nine
months ended
September 30, 2016
.
Total cost of sales
increased
$
13.5
million or
53.3%
to $
38.9
million in the
nine
month period ended
2017
compared to $
25.4
million for the same period in
2016
. The increase in cost of sales is directly related to the increase in revenue.
Total cost of sales as a percent of revenue was lower during the
nine
month period ended
2017
as compared to the same period in
2016
. The metals commodity markets improved during the
nine
month period ended
2017
as compared to the same period in
2016
, which allowed for improved gross margins, partially offset by startup expenses the Company incurred due to the restart of the shredder operations. These startup expenses consisted primarily of repairs and maintenance expenses, utilities expenses, and personnel expenses.
SG&A expenses
decreased
$
0.7
million to $
2.8
million in the
nine
month period ended
2017
compared to $
3.5
million in the same period in
2016
.
SG&A expenses decreased primarily due to a decrease in share based compensation expense of $
300.2
thousand related to share based compensation expense and a decrease in amounts paid to Algar for management expense of $251.6 thousand.
Other income (expense) was expense of $
611.0
thousand for the
nine
month period ended
September 30, 2017
compared to expense of $
52.0
thousand for the
nine
month period ended
September 30, 2016
. This $
559.0
thousand change is a result of (i) a $
323.0
thousand
increase
in interest expense, which is a result of the increased outstanding balance on the line of credit offset by (ii) a $
28.0
thousand
increase
in the gain on sale of assets, which was primarily due to a gain on a vehicle sold during the first quarter of
2017
,
and a decrease in other income of $264.0 thousand which was primarily due to a $233.3 gain on insurance proceeds in the third quarter of 2016.
The income tax provision
decreased
$
68.0
thousand to $
9.0
thousand in the
nine
month period ended
2017
compared to $
77.0
thousand in the same period in
2016
. The effective tax rates in
2017
and
2016
were (
1.1
)% and (
2.6
)%, respectively, based on federal and state statutory rates. Due to recurring operating losses being incurred, at December 31, 2013, we recorded nearly a full valuation allowance, which is continuing through
September 30, 2017
. We also have several state and franchise taxes payable based on gross receipts. The Company is currently under a property tax audit and has accrued an estimate of potential assessments.
Net loss for the
nine
month period ended
2017
was $
825.0
thousand compared to $
3.0
million for the same period of
2016
. This was a
decrease
of $
2.2
million, or
72.4%
.
Three
months ended
September 30, 2017
compared to
three
months ended
September 30, 2016
The following table presents, for the periods indicated, the percentage relationship that certain captioned items in our Condensed Consolidated Statements of Operations bear to total revenue:
|
|
|
|
|
|
|
Three
months ended
|
|
September 30
,
|
|
2017
|
|
2016
|
S
tatements of Operations Data:
|
|
|
|
Total revenue
|
100.0
|
%
|
|
100.0
|
%
|
Total cost of sales
|
93.7
|
%
|
|
99.1
|
%
|
Selling, general and administrative expenses
|
5.8
|
%
|
|
11.1
|
%
|
Income (loss) before other expenses
|
0.6
|
%
|
|
(
10.2
|
)%
|
Total revenue
increased
$
5.0
million or
50.7%
to $
14.9
million in the
third
quarter of
2017
compared to $
9.9
million in the same period in
2016
. The increase was primarily a result of
the startup of the shredder operations and
higher average selling prices (ASP) coupled with a related increase in nonferrous and ferrous volumes.
Ferrous revenue
increased
$
3.0
million or
80.5%
to $
6.6
million in the
third
quarter of
2017
compared to $
3.7
million in the same period in
2016
.
For the
three
months ended
September 30, 2017
compared to
three
months ended
September 30, 2016
, the Company experienced an increase in the ASP of ferrous material of $
105
per gross ton, or
58.3%
, partially as a result of the shredder restart
that led to a
favorable shift in the ferrous sales mix
. For the
three
months ended
September 30, 2017
compared to
three
months ended
September 30, 2016
, the Company experienced an increase in ferrous material shipments of
2.9
thousand tons
, or
14.1%
. Tons shipped were negatively impacted by the shredder restart due to the inherent nature of the shredding process.
Nonf
errous revenue
increased
$
2.1
million or
37.1%
to $
7.9
million in the
third
quarter of
2017
compared to $
5.8
million in the same period in
2016
.
Nonferrous material shipments increased by
1.1
million pounds, or
13.8%
, along with an increase in the ASP of nonferrous material of $
0.15
per pound, or
20.5%
, for the
three
months ended
September 30, 2017
compared to
three
months ended
September 30, 2016
.
Total cost of sales
increased
$
4.2
million or
42.4%
to $
14.0
million in the
three
month period ended
2017
compared to $
9.8
million for the same period in
2016
. The increase in cost of sales is primarily related to the increase in revenue.
Total cost of sales as a percent of revenue decreased during the
three
month period ended
2017
as compared to the same period in
2016
.
The metals commodity markets improved during the
third
quarter of
2017
as compared to the same period in
2016
, which allowed for improved gross margins
.
SG&A expenses
decreased
$
0.2
million to $
0.9
million in the
three
month period ended
2017
compared to $
1.1
million in the same period in
2016
. S
G&A expenses decreased primarily
due
to a decrease in amounts paid to Algar for management expense of $117.1 thousand.
Other income (expense) was expense of $
257.0
thousand for the
three
month period ended
September 30, 2017
compared to income of $
108.0
thousand for the
three
month period ended
September 30, 2016
. This $
365.0
thousand change is a result of
(i)
an $
111.0
thousand
increase
in interest expense, which is a result of the increased outstanding balance on the line of credit
offset by (ii)
decrease in other income of $254.0 thousand which was primarily due to a $233.3 gain on insurance proceeds in the third quarter of 2016
.
The income tax provision
decreased
$
35.0
thousand to $
2.0
thousand in the
three
month period ended
2017
compared to $
37.0
thousand in the same period in
2016
. The effective tax rates in
2017
and
2016
were (
1.1
)% and (
4.1
)%
, respectively, based on federal and state statutory rates.
Due
to recurring operating losses being incurred, at December 31, 2013, we recorded nearly a full valuation allowance, which is continuing through
September 30, 2017
. We also have several state and franchise taxes payable based on gross receipts. The Company is currently under a property tax audit and has accrued an estimate of potential assessments.
Net loss for the
third
quarter of
2017
was $
177.0
thousand compared to $
938.0
thousand for the same period of
2016
. This was a
decrease
of $
761.0
thousand, or
81.1%
.
Financial condition at
September 30, 2017
compared to
December 31, 2016
Cash and cash equivalents
increased
$
326.0
thousand to $
852.0
thousand as of
September 30, 2017
from $
526.0
thousand as of
December 31, 2016
.
Net cash used in operating activities was $
1.5
million for the
nine
month period ended
September 30, 2017
.
The net cash used in operating activities is primarily
due
to a net loss of $
0.8
million,
an increase
in receivables of $
2.2
million,
an increase
in inventories of $
0.3
million,
an increase
in other assets of $
0.2
million, and
a decrease
in payables and accrued expenses to related parties of $
0.2
million. These cash uses in operating activities were
partially offset by
a decrease
in receivables from related parties of $
59.0
thousand, depreciation of $
1.7
million, and stock option expense of $
90.0
thousand. The C
ompany
had
$
75.0
thousand
of
capital
expenditures in
2017
.
Net cash from financing activities was $
1.9
million for the
nine
month period ended
September 30, 2017
. In the
nine
month period ended
September 30, 2017
, we received net proceeds from debt of $
2.2
million less capitalized loan fees in the amount of $
125.0
thousand.
Accounts receivable trade
increased
$
2.2
million or
65.6%
to $
5.6
million as of
September 30, 2017
compared to $
3.4
million as of
December 31, 2016
due
to a substantial increase in volume in the quarter ended
September 30, 2017
, as well as modest commodity price increases. In general, the accounts receivable balance fluctuates
due
to the timing of shipments and receipt of customer payments.
Accounts receivables from related parties
decreased
$
59.0
thousand to $
91.0
thousand as of
September 30, 2017
compared to $
150.0
thousand as of
December 31, 2016
. This decrease was
due
to timing of cash receipts.
Inventories consist principally of ferrous and nonferrous scrap materials. We value inventory at the lower of cost or net realizable value. Inventory
increased
$
0.3
million, or
9.0%
, to $
3.7
million as of
September 30, 2017
compared to $
3.4
million as of
December 31, 2016
. This increase is primarily driven by pricing increases resulting in increased volumes and inventory levels during the
third
quarter of
2017
compared to the fourth quarter of
2016
.
Inventory aging for the period ended
September 30, 2017
(Days Outstanding):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except days information)
|
Description
|
|
1
-
30
|
|
31
-
60
|
|
61
-
90
|
|
Over
90
|
|
Total
|
Ferrous and non-ferrous materials
|
|
$
|
3,120
|
|
|
$
|
478
|
|
|
$
|
65
|
|
|
$
|
84
|
|
|
$
|
3,747
|
|
Inventory aging for the period ended
December 31, 2016
(Days Outstanding):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except days information)
|
Description
|
|
1
-
30
|
|
31
-
60
|
|
61
-
90
|
|
Over
90
|
|
Total
|
Ferrous and non-ferrous materials
|
|
$
|
3,011
|
|
|
$
|
268
|
|
|
$
|
62
|
|
|
$
|
96
|
|
|
$
|
3,437
|
|
Inventory 60 days or less compared to total inventory remained consistent at
96.0%
as of
September 30, 2017
compared to
95.4%
as of
December 31, 2016
. Inventory greater than 60 days compared to total inventory remained consistent at
4.0%
as of
September 30, 2017
compared to
4.6%
as of
December 31, 2016
.
Accounts payable trade
increased
$
92.0
thousand or
5.7%
to $
1.7
million as of
September 30, 2017
compared to $
1.6
million as of
December 31, 2016
. The accounts payable balance fluctuates
due
to timing of purchases from and payments made to our vendors.
Payables and accrued expenses to related parties
decreased
$
0.2
million to $
0.4
million as of
September 30, 2017
compared to $
0.6
million as of
December 31, 2016
. This decrease is largely a result of a decrease in the bonus payable to Algar of $
180.0
thousand
. See Note
6
- Related Party Transactions for additional information.
Working capital
increased
$
0.4
million to $
2.1
million as of
September 30, 2017
compared to $
1.7
million as of
December 31, 2016
as a result of the above noted items.
Contractual Obligations
The following table
provides information with respect to our known contractual obligations for the quarter ended
September 30, 2017
.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments due by period (in thousands)
|
|
Total
|
|
Less than
1
year
|
|
1
-
2
years
|
|
3
-
5
years
|
|
More than
5
years
|
Obligation Description:
|
|
|
|
|
|
|
|
|
|
Long-term debt obligations
|
$
|
6,798
|
|
|
$
|
64
|
|
|
$
|
5,230
|
|
|
$
|
1,504
|
|
|
$
|
—
|
|
Operating lease obligations (
1
)
|
3,223
|
|
|
503
|
|
|
920
|
|
|
900
|
|
|
900
|
|
Capital lease obligations (
1
)
|
1,190
|
|
|
293
|
|
|
675
|
|
|
222
|
|
|
—
|
|
Total
|
$
|
11,211
|
|
|
$
|
860
|
|
|
$
|
6,825
|
|
|
$
|
2,626
|
|
|
$
|
900
|
|
|
|
(
1
)
|
See Note
4
- Lease Commitments and Note
6
- Related Party Transactions for detailed information related to the Company's operating and capital lease obligations.
|
On February 29, 2016, the Company entered into a subordinated, unsecured debt with related parties, which converted amounts previously held as related party payables, in the amount of $
1.5
million. See Note
6
- Related Party Transactions for additional information.
On June 23,
2017, the Company entered into a debt agreement with K&R, LLC for the purchase of equipment to be used in the operation of the Company’s business
.
See Note
6
- Related Party Transactions for additional information.
On May 1, 2016, the Company entered into an amendment to a previous operating lease, whereby the lease is extended through April 30, 2021.
Based on the new lease terms, the Company classified the amended lease as a capital lease. At inception, the Company recorded a capital lease obligation of $
1.3
million.
As of
September 30, 2017
, the Company has recorded $
192.7
thousand in depreciation expense and $
84.4
thousand in interest expense related to the capital lease.
See Note
4
- Lease Commitments for additional information.
The
Company entered into a capital lease, effective June 2017, to lease
two
pieces of equipment. The lease is for a period of
six years
and the payments are $
0.7
thousand per month. The Company has the option to purchase the equipment for a purchase price of $
1.00
per item of equipment upon the expiration of the lease.
At inception, the Company recorded a capital lease obligation of $75.2
thousand.
See Note
4
- Lease Commitments for additional information.
Impact of Recently Issued Accounting Standards
In May 2014, the FASB issued ASU
2014
-
09
, Revenue from Contracts with Customers (Topic
606
). The amendments in ASU
2014
-
09
affect any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is not permitted.
The Company
is evaluating the potential
impact of the adoption of ASU
2014
-
09
on the Condensed Consolidated Financial Statements. The Company does not expect a material impact from the adoption of ASU
2014
-
09
on the Condensed Consolidated Financial Statements.
In August 2014, the FASB issued ASU No.
2014
-
15
, Presentation of Financial Statements-Going Concern (Subtopic
205
-
40
). The amendments in ASU
2014
-
15
are intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. The amendments were effective for annual periods ending after December 15, 2016, including interim periods within that reporting period. The Company adopted ASU
2014
-
15
in the fourth quarter of
2016
and noted no material impact from the adoption on its Condensed Consolidated Financial Statements
.
In July 2015, the FASB issued ASU
2015
-
11
,
Inventory
, which simplifies the measurement principle of inventories valued under the First-In, First-Out ("FIFO") or weighted average methods from the lower of cost or market to the lower of cost and net realizable value. ASU
2015
-
11
was effective for reporting periods beginning after December 15, 2016 including interim periods within those annual periods. The Company adopted the standard in the fourth quarter of
2016
and noted no material impact on its Condensed Consolidated Financial Statements.
In November 2015, the FASB issued ASU
2015
-
17
, Balance Sheet Classification of Deferred Taxes, which requires that deferred tax assets and liabilities be classified as noncurrent on the consolidated balance sheet. ASU
2015
-
17
was effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods. Upon adoption, ASU
2015
-17 may be applied either prospectively or retrospectively. The Company adopted the standard in the first quarter of
2017
and noted no material impact on its Condensed Consolidated Financial Statements.
In February 2016, the FASB issued ASU No.
2016
-
02
, Leases, to improve financial reporting about leasing transactions. This ASU will require organizations that lease assets (“lessees”) to recognize a lease liability and a right-of-use asset on its balance sheet for all leases with terms of more than
twelve
months. A lease liability is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset represents the lessee’s right to use, or control use of, a specified asset for the lease term. The amendments in this ASU simplify the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. This ASU leaves the accounting for the organizations that own the leased assets largely unchanged except for targeted improvements to align it with the lessee accounting model and Topic
606
, Revenue from Contracts with Customers.
The amendments in ASU
2016
-
02
are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is evaluating the potential impact of ASU
2016
-
02
on its Condensed Consolidated Financial Statements.
In June 2016, the FASB issued ASU
2016
-
13
, Financial Instruments - Credit Losses, which provides guidance to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. ASU
2016
-
13
is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company is evaluating the potential impact of ASU
2016
-
13
on the Condensed Consolidated Financial Statements
In
August
201
6
, the FASB issued ASU
2016
-
1
5
,
Statement of Cash Flows, Classification of Certain Cash Receipts and Cash Payments
, which provides guidance on
eight
specific cash flow issues. ASU
2016
-
15
is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Early adoption is permitted as of the beginning of an interim or annual reporting period. Upon adoption, ASU
2016
-
15
should be applied retrospectively. The Company is evaluating the potential impact of ASU
2016
-
15
on its Condensed Consolidated Financial Statements.
The Company does not expect a material impact from the adoption of ASU
2016
-
15
on the Condensed Consolidated Financial Statements
.