FORESTAR GROUP INC. Management report and analysis of the financial situation and operating results. (Form 10-K)

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Management's Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) is intended to promote an understanding of our financial
condition, results of operations, liquidity and certain other factors that may
affect future results. MD&A is provided as a supplement to, and should be read
in conjunction with our consolidated financial statements and notes to those
statements that appear elsewhere in this Form 10-K. This section generally
discusses the results of operations for fiscal 2022 compared to 2021. For
similar operating and financial data and discussion of our fiscal 2021 results
compared to our fiscal 2020 results, refer to Item 7, "Management's Discussion
and Analysis of Financial Condition and Results of Operations" under Part II of
our annual report on Form 10-K for the fiscal year ended September 30, 2021,
which was filed with the SEC on November 18, 2021.

The following discussion contains forward-looking statements that reflect our
plans, estimates and beliefs. Actual results could differ materially from those
discussed in the forward-looking statements. Factors that could cause or
contribute to any differences include, but are not limited to, those discussed
under the caption "Forward-Looking Statements" and under Item 1A - "Risk
Factors."

Activity area


We are a residential lot development company with operations in 53 markets in 21
states as of September 30, 2022. In October 2017, we became a majority-owned
subsidiary of D.R. Horton. As our controlling shareholder, D.R. Horton has
significant influence in guiding our strategic direction and operations.

We manage our operations through our real estate segment, which is our core
business and generates substantially all of our revenues. The real estate
segment primarily acquires land and installs infrastructure for single-family
residential communities and generates revenues from sales of residential
single-family finished lots to local, regional and national homebuilders. We
have other business activities for which the related assets and operating
results are immaterial and therefore, are included in our real estate segment.
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Results of Operations

The following tables and related discussion present selected operating and financial data for the years ended September 30, 2022 and 2021.

Operating results

The components of pre-tax income were as follows:

                                                      Year Ended September 30,
                                                        2022                2021
                                                           (In millions)
Revenues                                        $     1,519.1            $ 1,325.8
Cost of sales                                         1,195.1              1,096.6
Selling, general and administrative expense              93.6               

68.4

Equity in earnings of unconsolidated ventures            (1.2)                (0.2)
Gain on sale of assets                                   (3.2)                (2.5)
Interest and other income                                (1.0)                (1.2)
Loss on extinguishment of debt                              -                 18.1
Income before income taxes                      $       235.8            $   146.6



Lot Sales

The residential lots sold consist of:

                                                  Year Ended September 30,
                                                     2022                 2021
          Development projects                     16,454                14,221
          Lot banking projects                        383                 1,694
                                                   16,837                15,915
          Deferred development projects               854                     -
                                                   17,691                15,915

          Average sales price per lot (a)   $      86,300              $ 81,600


 _______________

(a) Excludes lots sold from deferred development projects and any impact of changes in contract liabilities.

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Revenues

Revenues consist of:

                                                    Year Ended September 30,
                                                      2022                2021
                                                         (In millions)
Residential lot sales:
Development projects                          $     1,420.2            $ 1,182.6
Lot banking projects                                   33.5                116.1
Decrease (increase) in contract liabilities             1.8                 (5.6)
                                                    1,455.5              1,293.1
Deferred development projects                          26.8                    -
                                                    1,482.3              1,293.1
Tract sales and other                                  36.8                 32.7
Total revenues                                $     1,519.1            $ 1,325.8



Residential lots sold and residential lot sales revenues have increased
primarily as a result of lots sales to customers other than D.R. Horton. In
fiscal 2022, we sold 14,895 residential lots to D.R. Horton for $1.2 billion
compared to 14,839 residential lots sold to D.R. Horton for $1.2 billion in
fiscal 2021. In fiscal 2022, we sold 2,796 residential lots to customers other
than D.R. Horton for $287.8 million, inclusive of the $64.1 million cumulative
transaction price of deferred development lot sales, compared to 1,076
residential lots sold for $86.5 million in fiscal 2021. Lots sold to customers
other than D.R. Horton in fiscal 2022 included 943 lots that were sold for
$131.1 million to a lot banker who expects to sell those lots to DR. Horton at a
future date.

Deferred development lot sales in fiscal 2022 include 854 undeveloped and
partially developed lots that were sold to customers other than D.R. Horton for
a cumulative transaction price of $64.1 million. As part of these transactions,
we are obligated to complete the development of the lots. During fiscal 2022, we
received $38.8 million in cash related to deferred development transactions with
the remainder due as development of the lots is completed. During fiscal 2022,
we recognized revenue of $26.8 million related to deferred development
transactions. The remaining revenue will be recognized over time as our
development obligations are completed.

Tract sales and other revenue in fiscal 2022 primarily consisted of 512 acres
sold to third parties for $35.7 million. Tract sales and other revenue in fiscal
2021 primarily consisted of 12 acres sold to third parties for $1.6 million and
85 acres sold to D.R. Horton for $25.9 million.

Throughout the majority of fiscal 2022, demand for our residential lots remained
strong. More recently, we have seen weakening demand as mortgage interest rates
have increased substantially and inflationary pressures have remained elevated.
We increase our land and lot sales prices when market conditions permit, and we
attempt to offset cost increases in one component with savings in another.
However, during periods when market conditions are challenging, we may have to
reduce selling prices or may not be able to offset cost increases with higher
selling prices. Although these challenging market conditions may persist for
some time, we believe we are well-positioned to operate effectively through
changing economic conditions because of our low net leverage and strong
liquidity position, our low overhead model and our strategic relationship with
D.R. Horton.

Cost of sales, depreciation of real estate and land option costs and interest incurred


Cost of sales in fiscal 2022 increased compared to fiscal 2021 primarily due to
the increase in the number of lots sold. Cost of sales related to tract sales
and other revenues in fiscal 2022 and 2021 was $20.3 million and $27.0 million,
respectively.

Each quarter, we review the performance and outlook for all of our real estate
for indicators of potential impairment and perform detailed impairment
evaluations and analyses when necessary. As a result of this process, we
recorded real estate impairment charges of $3.8 million during fiscal 2022.
There were no real estate impairment charges recorded in fiscal 2021. During
fiscal 2022 and 2021, land purchase contract deposit and pre-acquisition cost
write-offs related to land purchase contracts that we terminated or expect to
terminate were $8.7 million and $3.0 million, respectively.
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We capitalize interest costs throughout the development period (active real
estate). Capitalized interest is charged to cost of sales as the related real
estate is sold to the buyer. Interest incurred was $32.9 million and $41.5
million in fiscal 2022 and 2021, respectively. Interest charged to cost of sales
was 2.9% and 3.3% of total cost of sales (excluding real estate impairments and
land option charges) in those years.

Selling, general and administrative (SG&A) and other income statement items


SG&A expense in fiscal 2022 was $93.6 million compared to $68.4 million in
fiscal 2021. SG&A expense as a percentage of revenues was 6.2% and 5.2% in
fiscal 2022 and 2021, respectively. Our SG&A expense primarily consists of
employee compensation and related costs. Our business operations employed 291
and 250 employees at September 30, 2022 and 2021, respectively. We attempt to
control our SG&A costs while ensuring that our infrastructure supports our
operations; however, we cannot make assurances that we will be able to maintain
or improve upon the current SG&A expense as a percentage of revenues.

Loss on extinguishment of debt of $18.1 million in fiscal 2021 was due to the
redemption of our $350 million principal amount of 8.0% senior notes due 2024 in
May 2021.

Income Taxes

Our income tax expense was $57.0 million and $36.1 million in fiscal 2022 and
2021, respectively, and our effective tax rate was 24.2% and 24.6% in those
respective years. Our effective tax rate for both years includes an expense for
state income taxes and nondeductible expenses and a benefit related to
noncontrolling interests.

At September 30, 2022, we had deferred tax liabilities, net of deferred tax
assets, of $35.9 million. The deferred tax assets were offset by a valuation
allowance of $1.0 million, resulting in a net deferred tax liability of $36.9
million. At September 30, 2021, deferred tax liabilities, net of deferred tax
assets, were $23.2 million. The deferred tax assets were offset by a valuation
allowance of $1.2 million, resulting in a net deferred tax liability of $24.4
million. The valuation allowance for both years was recorded because it is more
likely than not that a portion of our state deferred tax assets, primarily NOL
carryforwards, will not be realized because we are no longer operating in some
states or the NOL carryforward periods are too brief to realize the related
deferred tax asset. We will continue to evaluate both the positive and negative
evidence in determining the need for a valuation allowance on our deferred tax
assets. Any reversal of the valuation allowance in future periods will impact
our effective tax rate.

The Inflation Reduction Act of 2022 ("IRA") was signed into law on August 16,
2022. The tax related provisions of the IRA did not have a material impact on
our financial statements and are not expected to have a material impact on our
financial statements in the future.

We had no unrecognized tax benefits September 30, 2022 and September 30, 2021.

Position of land and lot


Our land and lot position at September 30, 2022 and 2021 is summarized as
follows:
                                                                                     September 30,
                                                                           2022                        2021
Lots owned                                                                  61,800                        64,400
Lots controlled through land lot purchase contracts                         28,300                        32,600
Total lots owned and controlled                                             90,100                        97,000

Owned lots under contract to sell to D.R. Horton                            17,800                        21,000
Owned lots under contract to customers other than D.R. Horton                1,400                           800
Total owned lots under contract                                             19,200                        21,800

Owned lots subject to the right of first offer with DR Horton on the basis of signed purchase and sale contracts

18,900                        18,200
Owned lots fully developed                                                   5,500                         5,300


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Liquidity and Capital Resources

Liquidity


At September 30, 2022, we had $264.8 million of cash and cash equivalents and
$356.7 million of available borrowing capacity on our revolving credit facility.
We have no senior note maturities until fiscal 2026. We believe we are well
positioned to operate effectively during changing economic conditions because of
our low net leverage and strong liquidity position, our low overhead model and
our strategic relationship with D.R. Horton.

At September 30, 2022, our ratio of debt to total capital (debt divided by
stockholders' equity plus debt) was 37.1% compared to 41.0% at September 30,
2021. Our ratio of net debt to total capital (debt net of unrestricted cash
divided by stockholders' equity plus debt net of unrestricted cash) was 26.9%
compared to 35.2% at September 30, 2021. Over the long term, we intend to
maintain our ratio of net debt to total capital at approximately 40% or less. We
believe that the ratio of net debt to total capital is useful in understanding
the leverage employed in our operations.

We believe that our existing cash resources and revolving credit facility will
provide sufficient liquidity to fund our near-term working capital needs. Our
ability to achieve our long-term growth objectives will depend on our ability to
obtain financing in sufficient amounts. We regularly evaluate alternatives for
managing our capital structure and liquidity profile in consideration of
expected cash flows, growth and operating capital requirements and capital
market conditions. We may, at any time, be considering or preparing for the
purchase or sale of our debt securities, the sale of our common stock or a
combination thereof.

Bank credit facility


We have a $410 million senior unsecured revolving credit facility with an
uncommitted accordion feature that could increase the size of the facility to
$600 million, subject to certain conditions and availability of additional bank
commitments. The facility also provides for the issuance of letters of credit
with a sublimit equal to the greater of $100 million and 50% of the revolving
credit commitment. Borrowings under the revolving credit facility are subject to
a borrowing base calculation based on the book value of our real estate assets
and unrestricted cash. Letters of credit issued under the facility reduce the
available borrowing capacity. There were no borrowings or repayments under the
facility during fiscal 2022. At September 30, 2022, there were no borrowings
outstanding and $53.3 million of letters of credit issued under the revolving
credit facility, resulting in available capacity of $356.7 million.

In October 2022our senior unsecured revolving credit facility was amended to extend its maturity date to October 28, 2026.


The revolving credit facility is guaranteed by our wholly-owned subsidiaries
that are not immaterial subsidiaries or have not been designated as unrestricted
subsidiaries. The revolving credit facility includes customary affirmative and
negative covenants, events of default and financial covenants. The financial
covenants require a minimum level of tangible net worth, a minimum level of
liquidity and a maximum allowable leverage ratio. These covenants are measured
as defined in the credit agreement governing the facility and are reported to
the lenders quarterly. A failure to comply with these financial covenants could
allow the lending banks to terminate the availability of funds under the
revolving credit facility or cause any outstanding borrowings to become due and
payable prior to maturity. At September 30, 2022, we were in compliance with all
of the covenants, limitations and restrictions of our revolving credit facility.

Senior Notes


We have outstanding senior notes as described below that were issued pursuant to
Rule 144A and Regulation S under the Securities Act. The notes represent senior
unsecured obligations that rank equally in right of payment to all existing and
future senior unsecured indebtedness and may be redeemed prior to maturity,
subject to certain limitations and premiums defined in the respective indenture.
The notes are guaranteed by each of our subsidiaries to the extent such
subsidiaries guarantee our revolving credit facility.

Our $400 million principal amount of 3.85% senior notes (the "2026 notes")
mature May 15, 2026 with interest payable semi-annually. On or after May 15,
2023, the 2026 notes may be redeemed at 101.925% of their principal amount plus
any accrued and unpaid interest. In accordance with the indenture, the
redemption price decreases annually thereafter, and the 2026 notes can be
redeemed at par on or after May 15, 2025 through maturity. The annual effective
interest rate of the 2026 notes after giving effect to the amortization of
financing costs is 4.1%.
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We also have $300 million principal amount of 5.0% senior notes (the "2028
notes") outstanding, which mature March 1, 2028 with interest payable
semi-annually. On or after March 1, 2023, the 2028 notes may be redeemed at
102.5% of their principal amount plus any accrued and unpaid interest. In
accordance with the indenture, the redemption price decreases annually
thereafter and the 2028 notes can be redeemed at par on or after March 1, 2026
through maturity. The annual effective interest rate of the 2028 notes after
giving effect to the amortization of financing costs is 5.2%.

The indentures governing our senior notes require that, upon the occurrence of
both a change of control and a rating decline (each as defined in the
indentures), we offer to purchase the applicable series of notes at 101% of
their principal amount. If we or our restricted subsidiaries dispose of assets,
under certain circumstances, we will be required to either invest the net cash
proceeds from such asset sales in our business within a specified period of
time, repay certain senior secured debt or debt of our non-guarantor
subsidiaries, or make an offer to purchase a principal amount of such notes
equal to the excess net cash proceeds at a purchase price of 100% of their
principal amount. The indentures contain covenants that, among other things,
restrict the ability of us and our restricted subsidiaries to pay dividends or
distributions, repurchase equity, prepay subordinated debt and make certain
investments; incur additional debt or issue mandatorily redeemable equity; incur
liens on assets; merge or consolidate with another company or sell or otherwise
dispose of all or substantially all of our assets; enter into transactions with
affiliates; and allow to exist certain restrictions on the ability of
subsidiaries to pay dividends or make other payments. At September 30, 2022, we
were in compliance with all of the limitations and restrictions associated with
our senior note obligations.

Effective April 30, 2020, our Board of Directors authorized the repurchase of up
to $30 million of our debt securities. The authorization has no expiration date.
All of the $30 million authorization was remaining at September 30, 2022.

Other note payable


We also have a note payable of $12.5 million that was issued as part of a
transaction to acquire real estate for development. The note is non-recourse, is
secured by the underlying real estate and accrues interest at 4.0% per annum
with interest payments due in October 2022 and at maturity in October 2023.

Issue of common shares


We have an effective shelf registration statement filed with the SEC in October
2021 registering $750 million of equity securities, of which $300 million was
reserved for sales under our at-the-market equity offering program that became
effective November 2021. In fiscal 2022, we issued 84,547 shares of common stock
under our at-the-market equity offering program for proceeds of $1.7 million,
net of commissions and other issuance costs totaling $0.1 million. At
September 30, 2022, $748.2 million remained available for issuance under the
shelf registration statement, of which $298.2 million was reserved for sales
under our at-the-market equity offering program.

Operating cash activities


In fiscal 2022, net cash provided by operating activities was $108.7 million,
which was primarily the result of net income generated in the year and increases
in liabilities and other accrued expenses, partially offset by the increase in
our real estate. In fiscal 2021, net cash used in operating activities was
$303.1 million, which was primarily the result of the increase in our real
estate.

Investing Cash Flow Activities


In fiscal 2022, net cash provided by investing activities was $1.3 million
compared to $1.0 million in fiscal 2021. The cash provided by investing
activities in the current period consists primarily of cash received from the
sale of an investment, partially offset by cash expenditures for property and
equipment. Additionally, cash provided by investing activities in both periods
includes distributions received from our unconsolidated ventures.


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Financing Cash Flow Activities

In fiscal 2022, net cash provided by financing activities was $1.2 million
compared to $61.4 million in fiscal 2021. Cash provided by financing activities
in the prior year was primarily the result of proceeds from the issuance of $400
million principal amount of 3.85% senior notes and the issuance of common stock
under our at-the-market equity offering program for net proceeds of $33.4
million, which were partially offset by the early redemption of our $350 million
principal amount of 8.0% senior notes and the related call premium of $14.0
million.

Significant Accounting Policies and Estimates


General - A comprehensive enumeration of the significant accounting policies of
Forestar Group Inc. and subsidiaries is presented in Note 1 to the accompanying
financial statements as of September 30, 2022 and 2021, and for the years ended
September 30, 2022, 2021 and 2020. Each of our accounting policies has been
chosen based upon current authoritative literature that collectively comprises
U.S. Generally Accepted Accounting Principles (GAAP). In instances where
alternative methods of accounting are permissible under GAAP, we have chosen the
method that most appropriately reflects the nature of our business, the results
of our operations and our financial condition, and have consistently applied
those methods over each of the periods presented in the financial statements.
The Audit Committee of our Board of Directors has reviewed and approved the
accounting policies selected.

Accounting estimates are considered critical if both of the following conditions
are met: (1) the nature of the estimates or assumptions is material because of
the levels of subjectivity and judgment needed to account for matters that are
highly uncertain and susceptible to change and (2) the effect of the estimates
and assumptions is material to the financial statements. We have reviewed our
accounting estimates, and none were deemed to be considered critical for the
accounting periods presented.

Revenue Recognition - Real estate revenue and related profit are generally
recognized at the time of the closing of a sale, when title to and possession of
the property are transferred to the buyer. Our performance obligation, to
deliver the agreed-upon land or lots, is generally satisfied at closing.
However, there may be instances in which we have an unsatisfied remaining
performance obligation at the time of closing. In these instances, we record
contract liabilities and recognize those revenues over time as the performance
obligations are completed. Generally, our unsatisfied remaining performance
obligations are expected to have an original duration of less than one year.

Real Estate and Cost of Sales - Real estate includes the costs of direct land
and lot acquisition, land development, capitalized interest, and direct overhead
costs incurred during land development. All indirect overhead costs, such as
compensation of management personnel and insurance costs are charged to selling,
general and administrative expense as incurred.

Land and development costs are typically allocated to individual residential
lots based on the relative sales value of the lot. Cost of sales includes
applicable land and lot acquisition, land development and related costs (both
incurred and estimated to be incurred) allocated to each residential lot in the
project. Any changes to the estimated total development costs subsequent to the
initial lot sales are generally allocated to the remaining lots.

We receive earnest money deposits from homebuilders for purchases of developed
lots. These earnest money deposits are typically released to the homebuilders as
lots are sold. Earnest money deposits from D.R. Horton are subject to mortgages
that are secured by the real estate under contract with D.R. Horton. These
mortgages expire when the earnest money is released to D.R. Horton as lots are
sold.

We have agreements with certain utility or improvement districts to convey
water, sewer and other infrastructure-related assets we have constructed in
connection with projects within their jurisdiction and receive reimbursements
for the cost of these improvements. The amount of reimbursements for these
improvements are defined by the district and are based on the allowable costs of
the improvements. The transfer is consummated and we generally receive payment
when the districts have a sufficient tax base to support funding of their bonds.
The cost incurred by us in constructing these improvements, net of the amount
expected to be collected in the future, is included in our land development
budgets and in the determination of lot costs.


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Each quarter, we review the performance and outlook for all of our real estate
for indicators of potential impairment. We determine if impairment indicators
exist by analyzing a variety of factors including, but not limited to, the
following:

•gross margins on lots sold in recent months;

•projected gross margins based on budgets;

•changes in gross margins, average selling prices or cost of sales; and

•rate of absorption of batch sales.


If indicators of impairment are present, we perform an impairment evaluation,
which includes an analysis to determine if the undiscounted cash flows estimated
to be generated by those assets are less than their carrying amounts. These
estimates of cash flows are significantly impacted by specific factors including
estimates of the amount and timing of future revenues and estimates of the
amount of land development costs which, in turn, may be impacted by the
following local market conditions:

•the supply and availability of land and plots;

•the location and desirability of our lands and lots;

• the amount of land and lots we own or control in a particular market or sub-market; and

• local economic and demographic trends.


For those assets deemed impaired, an impairment charge is recorded to cost of
sales for the amount by which the carrying amount of the assets exceeds the fair
value of the assets. Our determination of fair value is primarily based on
discounting the estimated cash flows at a rate commensurate with the inherent
risks associated with the assets and related estimated cash flow streams. When
an impairment charge is determined, the charge is then allocated to each lot in
the same manner as land and development costs are allocated to each lot.

We rarely purchase land for resale. However, we may change our plans for land we
own or land under development and decide to sell the asset. When we determine
that we will sell the asset, the project is accounted for as land held for sale
if certain criteria are met. We record land held for sale at the lesser of its
carrying value or fair value less estimated costs to sell. In performing the
impairment evaluation for land held for sale, we consider several factors
including, but not limited to, recent offers received to purchase the property,
prices for land in recent comparable sales transactions and market analysis
studies, which include the estimated price a willing buyer would pay for the
land. If the estimated fair value less costs to sell an asset is less than the
current carrying value, the asset is written down to its estimated fair value
less costs to sell.

Key inventory valuation assumptions are influenced by local market and economic conditions, and are inherently uncertain. Although our quarterly valuations reflect management’s best estimates, due to uncertainties in the estimation process, actual results could differ from those estimates.

Accounting standards pending


In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform," which
provides optional expedients and exceptions for applying U.S. GAAP to contracts,
hedging relationships, and other transactions affected by the discontinuation of
the London Interbank Offered Rate (LIBOR) or by another reference rate expected
to be discontinued. The guidance was effective beginning March 12, 2020 and can
be applied prospectively through December 31, 2022. In January 2021, the FASB
issued ASU 2021-01, "Reference Rate Reform - Scope," which clarified the scope
and application of the original guidance. We will adopt these standards when
LIBOR is discontinued and do not expect them to have a material impact on our
consolidated financial statements or related disclosures.

In October 2021, the FASB issued ASU 2021-08, which requires application of ASC
606, "Revenue from Contracts with Customers," to recognize and measure contract
assets and liabilities from contracts with customers acquired in a business
combination. ASU 2021-08 creates an exception to the general recognition and
measurement principle in ASC 805 and will result in recognition of contract
assets and contract liabilities consistent with those recorded by the acquiree
immediately before the acquisition date. The guidance is effective for us
beginning October 1, 2023 and interim periods therein, with early adoption
permitted. We are currently evaluating the impact of this guidance, and it is
not expected to have a material impact on our consolidated financial position,
results of operations and cash flows.

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Forward-Looking Statements

This Annual Report on Form 10-K and other materials we have filed or may file
with the Securities and Exchange Commission contain "forward-looking statements"
within the meaning of the federal securities laws. These forward-looking
statements are identified by their use of terms and phrases such as "believe,"
"anticipate," "could," "estimate," "likely," "intend," "may," "plan," "expect,"
and similar expressions, including references to assumptions. These statements
reflect our current views with respect to future events and are subject to risks
and uncertainties. We note that a variety of factors and uncertainties could
cause our actual results to differ significantly from the results discussed in
the forward-looking statements. Factors and uncertainties that might cause such
differences include, but are not limited to:

•the effect of Dr. Hortons control the level of ownership over us and the holders of our securities;

• our ability to realize the potential benefits of the strategic relationship with DR Horton;

•the effect of our strategic relationship with DR Horton our ability to maintain relationships with our customers;

•the cyclical nature of the home building and land development industries and changes in economic, real estate and other conditions;

•the impact of significant inflation, a rise in interest rates or deflation;

•supply shortages and other risks related to the acquisition of land, building materials and skilled labor;

•the effects of public health issues such as a major epidemic or pandemic, including the impact of COVID-19 on the economy and our business;

•the impacts of weather conditions and natural disasters;

• health and safety incidents related to our operations;

• our ability to obtain or availability of bonds to secure our performance related to construction and development activities and the pricing of bonds;

• the impact of government policies, laws or regulations and the actions or restrictions of regulatory agencies;

•our ability to carry out our strategic initiatives;

•continuing liabilities related to the assets sold;

•the cost and availability of properties suitable for the development of residential lots;

•general economic, market or business conditions in which our real estate activities are concentrated;

•our dependence on relationships with national, regional and local manufacturers;

•competitive conditions in our industry;

• obtain reimbursements and other payments from government districts and other agencies and the timing of such payments;

•our ability to succeed in new markets;

•capital market conditions and our ability to raise capital to fund anticipated growth;

• our ability to manage and service our debt and to comply with our covenants, restrictions and limits;

• volatility in the market price and trading volume of our common stock;

• our ability to hire and retain key personnel;

•the strength of our information technology systems and the risk of cybersecurity breaches and our ability to comply with privacy and data protection laws and regulations.

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Other factors, including the risk factors described in Item 1A of this Annual
Report on Form 10-K, may also cause actual results to differ materially from
those projected by our forward-looking statements. New factors emerge from time
to time and it is not possible for us to predict all such factors, nor can we
assess the impact of any such factor on our business or the extent to which any
factor, or combination of factors, may cause results to differ materially from
those contained in any forward-looking statement.

Any forward-looking statement speaks only as of the date on which such statement
is made, and, except as required by law, we expressly disclaim any obligation or
undertaking to disseminate any updates or revisions to any forward-looking
statement to reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated events.
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