STABILIS SOLUTIONS, INC.
The following discussion should be read in conjunction with the Condensed
Consolidated Financial Statements and notes thereto included elsewhere in this
Form 10-Q ("this Report") and the consolidated financial statements included in
the 2021 Annual Report on Form 10-K filed on March 10, 2022 with the U.S.
Securities and Exchange Commission (the "SEC"). Historical results and
percentage relationships set forth in the Condensed Consolidated Statements of
Operations and Cash Flows, including trends that might appear, are not
necessarily indicative of future operations or cash flows.
Overview
Stabilis operates and manages its business through two operating segments: LNG and Power Delivery.
LNG SegmentStabilis Solutions, Inc. and its subsidiaries is an energy transition company that provides turnkey clean energy production, storage, transportation and fueling solutions primarily using liquefied natural gas ("LNG") to multiple end markets acrossNorth America through its LNG segment. We provide LNG solutions to customers in diverse end markets, including aerospace, agriculture, energy, industrial, marine bunkering, mining, pipeline, remote clean power and utility markets. LNG can be used to deliver natural gas to locations where pipeline service is not available, has been interrupted, or needs to be supplemented. Our customers use LNG as a partner fuel for renewable energy, and as an alternative to traditional fuel sources, such as distillate fuel oil (including diesel fuel and other fuel oils) and propane, among others to provide both environmental and economic benefits. We believe that these alternative fuel markets are large and provide significant opportunities for LNG substitution.
We believe that LNG as well as other clean energy solutions will provide an important balance between environmental sustainability, security and accessibility, and economic viability when compared to both renewables and other traditional hydrocarbon-based fuels and will play a key role in the energy transition.
Our LNG operations generate revenue by selling and delivering LNG to our customers, renting cryogenic equipment and providing engineering and field support services. We sell our products and services separately or as a bundle depending on the customer's needs. LNG pricing depends on market pricing for natural gas and competing fuel sources (such as diesel, fuel oil, and propane among others), as well as the customer's purchased volume, contract duration and credit profile. Stabilis' customers use LNG in their operations for multiple reasons, including lower and more stable fuel costs, reduced environmental emissions, and improved operating performance. LNG Production and Sales-Stabilis builds and operates cryogenic natural gas processing facilities, called "liquefiers," which convert natural gas into LNG through a multiple stage cooling process. We currently own and operate a liquefier that can produce up to 100,000 LNG gallons per day inGeorge West, Texas and a liquefier that can produce up to 30,000 LNG gallons per day inPort Allen, Louisiana , which was purchased onJune 1, 2021 . We also purchase LNG from third-party production sources which allows us to support customers in markets where we do not own liquefiers. We make the determination of LNG and transportation supply sources based on the cost of LNG, the transportation cost to deliver to regional customer locations, and the reliability of the supply source. Transportation and Logistics Services-Stabilis offers our customers a "virtual natural gas pipeline" by providing them with turnkey LNG transportation and logistics services inNorth America . We deliver LNG to our customers' work sites from both our own production facility and our network of third-party production sources located throughoutNorth America . We own a fleet of LNG fueled trucks and cryogenic trailers to transport and deliver LNG. We also outsource similar equipment and transportation services from qualified third-party providers as required to support our customer base. Cryogenic Equipment Rental-Stabilis owns and operates a rental fleet of mobile LNG storage and vaporization assets, including: transportation trailers, electric and gas-fired vaporizers, ambient vaporizers, storage tanks, and mobile vehicle fuelers. We also own several stationary storage and regasification assets. We believe this is one of the largest fleets of small-scale LNG equipment inNorth America . Our fleet consists primarily of trailer-mounted mobile assets, making delivery to and between customer locations more efficient. We deploy these assets on job sites to provide our customers with the equipment required to transport, store, and consume LNG in their fueling operations.
Engineering and Field Support Services-Stabilis has experience in the safe, cost effective, and reliable use of LNG and hydrogen in multiple customer applications. We have also developed many processes and procedures that we believe improve our
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customers' use of LNG and hydrogen in their operations. Our engineers help our
customers design and integrate LNG and hydrogen into their fueling operations
and our field service technicians help our customers mobilize, commission and
reliably operate on the job site.
Biofuels and Hydrogen-We believe that our technical expertise, production, transportation and storage asset capabilities are favorable for other biofuels, such as renewable natural gas, and hydrogen.
Power Delivery Segment
Stabilis provides electrical switch-gear, generator and instrumentation construction, installation and service to the marine, power generation, oil and gas, and broad industrial market segments inBrazil through its Power Delivery segment. Our products are used to safely distribute and control the flow of electricity from a power generation source to mechanical devices utilizing the power. We also offer a range of electrical and instrumentation turnarounds, maintenance and renovation projects.
Additionally, we build power and control systems for the energy industry in
Recent Developments
We have experienced and anticipate that we will continue to experience increasing costs for natural gas, liquefaction and transportation at least for the near-term for our LNG segment. While we pass a significant portion of the cost of natural gas and transportation on to our customers, we are not able to pass through all costs which has resulted in margin pressure and decreased margins as a percentage of revenue. Recent global events are exacerbating several trends, including broad-based inflation and supply chain pressure for key materials, commodities, and labor. These events includeRussia's invasion ofUkraine (resulting in supply chain disruptions particularly in relation to the supply and price of natural gas) and continued impacts from COVID-19. Potential reinstatement of COVID-19 restrictions and operating closures within the regions we and our joint venture operate may result in a broad disruptions to global andU.S. supply chains. The ultimate extent and effects of recent events are difficult to estimate, but we expect them to continue to place pressure on the price of natural gas in the near-term. Long-term, we are still optimistic on the future of LNG. For a more complete discussion of the risks we encounter in our business, please refer to Risk Factors in Part I, Item 1A of the Company's Annual Report on Form 10-K filed with theSEC onMarch 10, 2022 and Part II, Item 1A of the Company's Quarterly Report on Form 10-Q filed with theSEC onMay 5, 2022 , as well as the additional risks identified and described in Part II. "Item 1A Risk Factors" of this Report. 23 --------------------------------------------------------------------------------
Results of Operations
The LNG Segment supplies LNG to multiple end markets inNorth America and provides turnkey fuel solutions to help users of propane, diesel and other crude-based fuel products convert to LNG. The Power Delivery Segment provides power delivery equipment and services inBrazil and through our BOMAY joint venture inChina . We evaluate the performance of our segments based primarily on segment operating income. See also Note 3 of the Notes to Condensed Consolidated Financial Statements for further discussion of our segments.
Three Months Ended
The comparative tables below reflect our consolidated operating results as well as the operating results of our two operating segments for the three months endedJune 30, 2022 (the "Current Quarter ") as compared to the three months endedJune 30, 2021 (the "PriorYear Quarter ") (unaudited, amounts in thousands, except for percentages). In the table below,$0.5 million for the PriorYear Quarter was reclassified from selling, general and administrative expense to costs of rental, service and other, and$0.2 million for the PriorYear Quarter was reclassified from costs of LNG product to costs of rental, service and other within our LNG segment to conform to current period presentation. Three Months Ended Consolidated June 30, 2022 2021 $ Change % Change Revenue: LNG product$ 20,336 $ 11,812 $ 8,524 72.2 % Rental, service and other 2,814 2,580 234 9.1 Power delivery 2,634 1,660 974 58.7 Total revenues 25,784 16,052 9,732 60.6 Operating expenses: Costs of LNG product 16,863 9,150 7,713 84.3 Costs of rental, service and other 2,674 2,219 455 20.5 Costs of power delivery 1,989 1,292 697 53.9 Change in unrealized loss on natural gas derivatives 899 - 899 n/a Selling, general and administrative expenses 3,516 3,291 225 6.8 Gain from disposal of fixed assets - (24) 24 n/a Depreciation 2,263 2,218 45 2.0 Total operating expenses 28,204 18,146 10,058 55.4 Loss from operations before equity income (2,420) (2,094) (326) 15.6 Net equity income from foreign joint ventures' operations 686 475 211 44.4 Loss from operations (1,734) (1,619) (115) 7.1 Other income (expense): Interest expense, net (164) (77) (87) (113.0) Interest expense, net - related parties (49) (148) 99 (66.9) Other income (expense) (30) 1,023 (1,053) n/a Total other income (expense) (243) 798 (1,041) n/a Net loss before income tax expense (1,977) (821) (1,156) (140.8) Income tax expense 191 183 8 4.4 Net loss$ (2,168) $ (1,004) $ (1,164) 115.9 24
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Segment Results
Three Months Ended
LNG Segment June 30,
2022 2021 $ Change % Change
Revenue:
LNG product $ 20,336 $ 11,812 $ 8,524 72.2 %
Rental, service and other 2,814 2,580 234 9.1
Total revenues 23,150 14,392 8,758 60.9
Operating expenses:
Costs of LNG product 16,863 9,150 7,713 84.3
Costs of rental, service and other 2,674 2,219 455 20.5
Change in unrealized loss on natural gas
derivatives 899 - 899 n/a
Selling, general and administrative expenses 2,986 2,706 280 10.3
Gain from disposal of fixed assets - (24) 24 n/a
Depreciation 2,197 2,181 16 0.7
Total operating expenses 25,619 16,232 9,387 57.8
Loss from operations $ (2,469) $ (1,840) $ (629) 34.2
Three Months Ended
Power Delivery Segment June 30,
2022 2021 $ Change % Change
Revenue:
Power delivery $ 2,634 $ 1,660 $ 974 58.7 %
Operating expenses:
Costs of power delivery 1,989 1,292 697 53.9
Selling, general and administrative expenses 530 585 (55) (9.4)
Depreciation 66 37 29 78.4
Total operating expenses 2,585 1,914 671 35.1
Income (loss) from operations before equity
income 49 (254) 303 n/a
Net equity income from foreign joint
ventures' operations 686 475 211 44.4
Income from operations $ 735 $ 221 $ 514 232.6
Revenue
LNG product revenue. During the
•Additional LNG gallons delivered during the
•Increased natural gas prices during the
•Increased pricing charged to our customers in response to increased costs from inflationary pressures.
Rental, service, and other revenue. Rental, service and other revenue increased by$0.2 million , or 9%, in theCurrent Quarter compared to the PriorYear Quarter due to additional projects with equipment and increased labor revenues in response to increased costs from inflationary pressures. Power delivery. Power delivery revenue increased by$1.0 million , or 59%, in theCurrent Quarter compared to the PriorYear Quarter due to post-COVID-19 demand recovery and resulting new contracts. 25 --------------------------------------------------------------------------------
Operating Expenses
Costs of LNG product. Cost of product in the
•An increase of 1.9 million LNG gallons delivered due to increased market demand;
•Inflationary pressures including increased costs from higher natural gas prices, increased transportation costs and increased liquefaction costs; and
•Increased electricity prices, particularly in
Costs of rental, service, and other. Costs of rental, service and other increased$0.5 million or 21% in theCurrent Quarter comparable to the PriorYear Quarter primarily due to increased costs for rental equipment to service additional contracts and increased service personnel to support increased services work. Costs of power delivery. Costs increased$0.7 million , or 54%, in theCurrent Quarter due to higher sales activity levels, higher prices and favorable foreign currency translation rates. Change in unrealized loss on natural gas derivatives. The Company incurred an unrealized loss of$0.9 million in theCurrent Quarter on our natural gas derivatives purchased to hedge the price of natural gas for a long-term contract with a major customer. The unrealized loss was due to lower future natural gas prices atJune 30, 2022 as compared to the time of purchase of the derivatives. The Company had no derivatives in the PriorYear Quarter . See also Note 4 in the Notes to the Condensed Consolidated Financial Statements for a further discussion of our derivatives. Selling, general and administrative expenses. Selling, general and administrative expense increased$0.2 million , or 7%, during theCurrent Quarter compared to the PriorYear Quarter primarily due to higher stock-based compensation expenses and increased compensation related to additional headcount to support our operations, partially offset by lower legal fees and stock exchange listing fees compared to the PriorYear Quarter . Gain from disposal of fixed assets. There were no significant gains or losses from disposal of fixed assets in either theCurrent Year Quarter or the PriorYear Quarter . Depreciation. Depreciation expense increased 2% during theCurrent Quarter as compared to the PriorYear Quarter due to the acquisition of ourPort Allen facility onJune 1, 2021 , partially offset by assets reaching the end of their depreciable lives.
Net Equity Income From
Net equity income from investments in foreign joint ventures. Income from investments in foreign joint ventures increased$0.2 million during theCurrent Quarter due to post COVID-19 recovery and governmental operating restrictions imposed inChina due to COVID-19 during the PriorYear Quarter .
Other Income (Expense)
Interest expense, net. Interest expense increased
Interest expense, net - related parties. Related party interest expense decreased$0.1 million during theCurrent Quarter as compared to the PriorYear Quarter primarily related to repayment of related party debt and due to amendments to the M/G Finance note payable which lowered the interest rate from 12% to 6%.
Other income (expense). Other expense was
Income tax expense. The Company incurred state and foreign income tax expense of$0.2 million during theCurrent Quarter which was consistent with$0.2 million during the PriorYear Quarter . NoU.S. federal income tax benefit was recorded for theCurrent Quarter or Prior Quarter as any netU.S. deferred tax assets generated from operating losses were offset by a change in the Company's valuation allowance on net deferred tax assets. 26 --------------------------------------------------------------------------------
Six Months Ended
The following table reflects line items from the accompanying Condensed Consolidated Statements of Operations for the six months endedJune 30, 2022 (the "Current Year") as compared to the six months endedJune 30, 2021 (the "Prior Year") (unaudited, amounts in thousands, except for percentages). In the table below,$1.0 million for the Prior Year was reclassified from selling, general and administrative expense to costs of rental, service and other, and$0.3 million was reclassified from costs of LNG product to costs of rental, service and other within our LNG segment to conform to current period presentation. Six Months Ended June 30, 2022 2021 Change % Change Revenue: LNG product$ 37,121 $ 23,507 $ 13,614 57.9 % Rental, service and other 6,296 7,005 (709) (10.1) Power delivery 5,400 3,204 2,196 68.5 Total revenues 48,817 33,716 15,101 44.8 Operating expenses: Costs of LNG product 29,607 17,894 11,713 65.5 Costs of rental, service and other 5,434 5,038 396 7.9 Costs of power delivery 4,102 2,452 1,650 67.3 Change in unrealized loss on natural gas derivatives 899 - 899 n/a Selling, general and administrative expenses 7,082 6,006 1,076 17.9 Gain from disposal of fixed assets (80) (24) (56) 233.3 Depreciation 4,585 4,443 142 3.2 Total operating expenses 51,629 35,809 15,820 44.2 Loss from operations before equity income (2,812) (2,093) (719) 34.4 Net equity income from foreign joint ventures' operations 773 829 (56) (6.8) Loss from operations (2,039) (1,264) (775) 61.3 Other income (expense): Interest expense, net (318) (94) (224) 238.3 Interest expense, net - related parties (80) (321) 241 (75.1) Other income (expense) (75) 1,113 (1,188) n/a Total other income (expense) (473) 698 (1,171) n/a Net loss before income tax expense (2,512) (566) (1,946) 343.8 Income tax expense 62 263 (201) (76.4) Net loss$ (2,574) $ (829) $ (1,745) 210.5 27
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Segment Results
The Company's revenues are derived from two operating segments: LNG and Power Delivery. The Company evaluates the performance of its segments based primarily on segment operating income. LNG Segment
Our LNG segment supplies LNG to multiple end markets in
Six Months Ended
June 30,
2022 2021 Change % Change
Revenue:
LNG product $ 37,121 $ 23,507 $ 13,614 57.9 %
Rental, service and other 6,296 7,005 (709) (10.1)
Total revenues 43,417 30,512 12,905 42.3
Operating expenses:
Costs of LNG product 29,607 17,894 11,713 65.5
Costs of rental, service and other 5,434 5,038 396 7.9
Change in unrealized loss on natural gas
derivatives 899 - 899 n/a
Selling, general and administrative expenses 5,847 4,807 1,040 21.6
Gain from disposal of assets (80) (24) (56) 233.3
Depreciation 4,474 4,369 105 2.4
Total operating expenses 46,181 32,084 14,097 43.9
Loss from operations before equity income
$ (1,192) 75.8 Power Delivery Segment Our Power Delivery segment provides power delivery equipment and services to the global energy industry through our subsidiary inBrazil and our joint venture inChina . Six Months Ended June 30, 2022 2021 Change % Change Revenue: Power delivery$ 5,400 $ 3,204 $ 2,196 68.5 % Total revenues 5,400 3,204 2,196 68.5 Operating expenses: Costs of power delivery 4,102 2,452 1,650 67.3 Selling, general and administrative expenses 1,235 1,199 36 3.0 Depreciation 111 74 37 50.0 Total operating expenses 5,448 3,725 1,723 46.3 Loss from operations before equity income (48) (521) 473 (90.8) Net equity income from foreign joint ventures' operations 773 829 (56) (6.8) Income from operations$ 725 $ 308 $ 417 135.4 28
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Revenue
LNG product revenue. During the Current Year, LNG product revenue increased
•Additional LNG gallons delivered during the Current Year compared to the Prior Year;
•Increased natural gas prices compared to the Prior Year; and
•Increased pricing charged to our customers in response to increased costs from inflationary pressures.
Rental, service, and other revenue. Rental, service and other revenue decreased by$0.7 million or 10% in the Current Year compared to the Prior Year primarily due to fewer projects with additional equipment and lower labor revenues from projects inMexico and power generation customers during the first quarter of the Current Year. Power delivery revenue. Power delivery revenue increased$2.2 million or 69% in the Current Year compared to the Prior Year due to post-COVID-19 demand recovery and resulting new contracts.
Operating Expenses
Costs of LNG Product. Cost of LNG product increased
•An increase of 3.4 million LNG gallons delivered;
•Inflationary pressures including increased costs from higher natural gas prices, increased transportation costs and increased liquefaction costs; and
•Increased electricity prices, particularly in
Costs of rental, service, and other. Costs increased$0.4 million or 8% in the Current Year compared to the Prior Year primarily due to increased costs during the second quarter of the Current Year for rental equipment to service additional contracts and increased service personnel to support increased services work.
Costs of power delivery. Costs increased
Change in unrealized loss on natural gas derivatives. We incurred an unrealized loss of$0.9 million in the Current Year on our natural gas derivatives purchased to hedge the price of natural gas for a long-term contract with a major customer. The unrealized loss was due to lower future natural gas prices atJune 30, 2022 as compared to the time of purchase of the derivatives. We had no derivatives in the Prior Year. See Note 4 in the Notes to Consolidated Financial Statements for a further discussion of our derivatives.
Selling, general and administrative expenses. Selling, general and
administrative expenses increased
Gain from disposal of fixed assets. Gain from disposal of fixed assets for the Current Year was primarily related to a gain on sale of LNG tractors of$0.1 million during the first quarter. Depreciation. Depreciation expense increased$0.1 million in the Current Year compared to the Prior Year primarily due to the acquisition of ourPort Allen facility onJune 1, 2021 , partially offset by assets reaching the end of their depreciable lives. 29 --------------------------------------------------------------------------------
Net Equity Income From
Net equity income from investments in foreign joint ventures. Income from
investments in foreign joint ventures decreased
Other Income (Expense)
Interest expense, net. Interest expense increased
Interest expense, net - related parties. Related party interest expense
decreased
Other Income (Expense). Other expense was
Income tax expense. Income tax decreased$0.2 million during the Current Year compared to the Prior Year. The decrease in the Current Year was due to a favorable income tax result upon filing theMexico income tax return. NoU.S. federal income tax benefit was recorded for the Current Year or Prior Year as any netU.S. deferred tax assets generated from operating losses were offset by a change in the Company's valuation allowance on net deferred tax assets.
Liquidity and Capital Resources
Historically, our principal sources of liquidity have consisted of cash on hand, cash provided by our operations, proceeds received from borrowings under our AmeriState Loan, and distributions from our BOMAY joint venture. In prior years, the Company also obtained equipment financing from M/G Finance, a related party. During the Current Year, our principal sources of liquidity were cash provided by our operations. We have used a portion of our cash flows generated from operations to invest in fixed assets and increased working capital to support growth as well as to pay interest and principal amounts outstanding under our debt borrowings. As ofJune 30, 2022 , we had$4.1 million in cash and cash equivalents on hand and$12.3 million in outstanding debt (net of debt issuance costs) and finance lease obligations (of which$2.2 million is due in the next twelve months). Future availability under the loan facility was$1.0 million atJune 30, 2022 and as of the date of this Report. The Company has also filed a shelf registration statement (described below) which allows for and grants the Company the flexibility to raise capital to fund working capital requirements, repay debt and/or fund future transactions. The Company is subject to substantial business risks and uncertainties inherent in the LNG industry. The Company has implemented a number of cost control measures and increased pricing to customers in response to inflationary costs; however, there is no assurance that the Company will be able to generate sufficient cash flows in the future to sustain itself or to support future growth. We have experienced a significant increase in sales since mid-2021. Accordingly, management believes the business will generate sufficient cash flows from its operations along with availability under our loan facility that is sufficient to fund the business for the next twelve months. As we continue to grow, management continues to evaluate additional financing alternatives, however, there is no guarantee that additional financing will be available or available at terms that would be beneficial to shareholders. 30 --------------------------------------------------------------------------------
Cash Flows
Cash flows provided by (used in) our operating, investing and financing activities are summarized below (unaudited, in thousands):
Six Months Ended June 30,
2022 2021
Net cash provided by (used in):
Operating activities $ 3,672 $ 2,611
Investing activities (1,145) (5,659)
Financing activities (618) 4,518
Effect of exchange rate changes on cash 84 29
Net increase in cash and cash equivalents $ 1,993 $ 1,499
Operating Activities
Net cash provided by operating activities totaled $3.7 million for the six
months ended June 30, 2022 compared to $2.6 million for the same period in 2021.
The increase in net cash provided by operating activities of $1.1 million as
compared to the Prior Year was primarily attributable to improved profitability
in the Current Year when excluding the impacts of non-cash expenses and gains
included in net loss such as depreciation, stock-based compensation, unrealized
loss on natural gas derivatives and gain on extinguishment of debt compared to
the Prior Year.
Investing Activities
Net cash used in investing activities totaled $1.1 million and $5.7 million for
the six months ended June 30, 2022 and 2021, respectively. The decrease in net
cash used in the Current Year was primarily due to the acquisition of our Port
Allen liquefaction facility on June 1, 2021 for $5.0 million in cash.
Financing Activities
Net cash used in financing activities totaled$0.6 million for the six months endedJune 30, 2022 , compared to net cash provided by financing activities totaling$4.5 million for the Prior Year primarily from proceeds received from borrowings under the AmeriState Loan of$7.0 million , partially offset by repayments of debt.
Future Cash Requirements
We require cash to fund our operating expenses and working capital requirements, including costs associated with fuel sales, capital expenditures, debt repayments and repurchases, equipment purchases, maintenance of LNG production facilities, mergers and acquisitions (if any), pursuing market expansion, supporting sales and marketing activities, support of legislative and regulatory initiatives, and other general corporate purposes. While we believe we have sufficient liquidity and capital resources to fund our operations and repay our debt, we may elect to pursue additional financing activities such as refinancing existing debt, obtaining new debt, or debt or equity offerings to provide flexibility with our cash management. Certain of these alternatives may require the consent of current lenders or stockholders, and there is no assurance that we will be able to execute any of these alternatives on acceptable terms or at all. Capital expenditures for the six months endedJune 30, 2022 were$1.2 million and primarily related to capital expenditures for our operations inMexico and the addition of rolling stock and replacement assets within our LNG segment. Future commitments for capital expenditures were not significant atJune 30, 2022 . Shelf Registration Statement OnApril 11, 2022 , the Company filed a registration statement on Form S-3 (the "Shelf Registration") which was declared effective onApril 26, 2022 and will permit the Company to issue up to$100.0 million in either common stock, preferred stock, warrants or a combination of the above, and gives the Company the flexibility to raise capital to fund working capital requirements, repay debt and/or fund future transactions. As a smaller reporting company, we are subject to General Instruction I.B.6 of Form S-3, which limits the amounts that we may sell under the Shelf Registration to no more than one-third of our public float in any twelve month period as measured in accordance with such instruction. There is no assurance that we will be able to raise capital pursuant to the Shelf Registration on acceptable terms or at all. 31 --------------------------------------------------------------------------------
Off-Balance Sheet Arrangements
As of
Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operations are based on our Condensed Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted inthe United States of America ("U.S. GAAP") which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities known to exist at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates on an ongoing basis, based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. There can be no assurance that actual results will not differ from those estimates. There have been no significant changes in the Company's "Critical Accounting Policies and Estimates" during the three and six months endedJune 30, 2022 from those disclosed within the Company's Annual Report on Form 10-K for the year endedDecember 31, 2021 as filed with theSEC onMarch 10, 2022 .
New Accounting Standards
See Note 1 to the Notes to Condensed Consolidated Financial Statements included elsewhere in this report for information on new accounting standards.
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