What changed in this filing

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Item 1. Financial Statements

2021-02-02 compared with 2020-08-04 · 134 added, 377 removed, 320 unchanged (61% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three months ended Nine months ended

(in thousands, except per share data) Note June 26, 2020 June 28, 2019 June 26, 2020 June 28, 2019

Three months ended

(in thousands, except per share data) Note December 25, 2020 December 27, 2019

Net sales $ 511,082 $ 447,448

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three months ended Nine months ended

(in thousands) Note June 26, 2020 June 28, 2019 June 26, 2020 June 28, 2019

Three months ended

(in thousands) Note December 25, 2020 December 27, 2019

Net income $ 85,066 $ 34,790

Other comprehensive (loss) income, net of tax:

Other comprehensive income, net of tax:

Change in foreign currency translation adjustment 7,051 5,109

Change in unrecognized loss related to pension benefit plans 4 262 207

Total other comprehensive income (loss) 10 2,468 ( 590 ) 1,781 ( 2,344 )

Total other comprehensive income 8 7,313 5,316

Comprehensive income $ 92,379 $ 40,106

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CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data) Note June 26, 2020 September 30, 2019

(in thousands, except share and per share data) Note December 25, 2020 September 30, 2020

Current Assets:

Cash and cash equivalents $ 280,420 $ 284,471

Accounts receivable, less allowance for doubtful accounts of $ 4,321 and $ 2,608 , respectively

Accounts receivable, less allowance for current and expected credit losses of $ 2,455 and $ 3,168 , respectively

350,255 298,242

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine months ended

(in thousands) Note June 26, 2020 June 28, 2019

Three months ended

(in thousands) Note December 25, 2020 December 27, 2019

Operating activities:

5 unchanged sentences

Amortization of right-of-use assets 3,352 3,627

Loss on disposal of property, plant and equipment 6,456 —

Other adjustments to net income 1,703 2,855

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Capital expenditures ( 8,229 ) ( 9,809 )

Insurance proceeds for properties and equipment 789 —

Insurance proceeds for property, plant and equipment 1,122 —

Acquisition of businesses, net of cash acquired ( 7,186 ) —

2 unchanged sentences

Financing activities:

Borrowings under credit facility — 39,000

Repayments under credit facility — ( 39,000 )

Repayments of short-term debt 14 — ( 20,980 )

Issuance of common stock ( 1,821 ) 5,232

Repayments of long-term debt 12 ( 40,000 ) —

Issuance of common stock, net of shares withheld for tax ( 3,927 ) ( 2,981 )

Repurchase of common stock ( 35,037 ) —

2 unchanged sentences

Effects of foreign exchange rate changes on cash and cash equivalents 2,912 1,382

Increase (decrease) in cash and cash equivalents 113,894 ( 25,928 )

(Decrease) increase in cash and cash equivalents ( 4,051 ) 40,720

Cash and cash equivalents at beginning of period 284,471 123,415

9 unchanged sentences

Net income — — — — 85,066 — 85,066

Other comprehensive loss — — — — — ( 2,721 ) ( 2,721 )

Stock-based compensation — — — 2,982 — — 2,982

Issuance of common stock 131 1 — ( 696 ) — ( 695 )

Repurchase of common stock ( 1,230 ) ( 12 ) — — ( 24,407 ) — ( 24,419 )

Balance as of December 28, 2018 45,981 461 ( 2,580 ) 460,264 ( 314,831 ) ( 19,159 ) 124,155

Net income — — — — 29,555 — 29,555

Other comprehensive income — — — — — 7,313 7,313

Reclassification of stranded tax benefits (1) — — — — 2,333 ( 2,333 ) —

Stock-based compensation — — — 5,522 — — 5,522

Issuance of common stock 235 2 — 1,984 — 1,986

Issuance of common stock, net of shares withheld for tax 358 3 — ( 3,930 ) — — ( 3,927 )

Repurchase of common stock ( 1,140 ) ( 11 ) — — ( 35,026 ) — ( 35,037 )

Balance as of March 30, 2019 46,216 463 ( 2,580 ) 464,082 ( 282,943 ) ( 20,525 ) 158,497

Net income — — — — 36,550 — 36,550

Other comprehensive loss — — — — — ( 590 ) ( 590 )

Stock-based compensation — — — 4,120 — — 4,120

Issuance of common stock 460 5 — 3,936 — — 3,941

Balance as of June 28, 2019 46,676 468 ( 2,580 ) 472,138 ( 246,393 ) ( 21,115 ) 202,518

(1) Due to the adoption of ASU 2018-02.

Balance as of December 25, 2020 46,625 $ 467 $ ( 2,580 ) $ 488,815 $ ( 14,114 ) $ ( 35,241 ) $ 437,347

Common Stock Treasury Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Equity

5 unchanged sentences

Stock-based compensation — — — 3,123 — — 3,123

Issuance of common stock 524 5 — ( 2,986 ) — — ( 2,981 )

Issuance of common stock, net of shares withheld for tax 524 5 — ( 2,986 ) — — ( 2,981 )

Balance as of December 27, 2019 47,479 $ 476 $ ( 2,580 ) $ 477,276 $ ( 166,659 ) $ ( 36,382 ) $ 272,131

Net income — — — — 39,193 — 39,193

Other comprehensive loss — — — — — ( 6,003 ) ( 6,003 )

Stock-based compensation — — — 4,523 — — 4,523

Issuance of common stock 91 1 — 600 — — 601

Repurchase of common stock ( 394 ) ( 4 ) — — ( 15,007 ) — ( 15,011 )

Balance as of March 27, 2020 47,176 473 ( 2,580 ) 482,399 ( 142,473 ) ( 42,385 ) 295,434

Net income — — — — 24,078 — 24,078

Other comprehensive income — — — — — 2,468 2,468

Stock-based compensation — — — 1,656 — — 1,656

Issuance of common stock — 1 — 558 — — 559

Balance as of June 26, 2020 47,176 474 ( 2,580 ) 484,613 ( 118,395 ) ( 39,917 ) 324,195

(1) Due to the adoption of ASU 2016-02.

See Notes to unaudited condensed consolidated financial statements.

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Organization and Ownership Structure — Atkore International Group Inc.

(the "Company", "Atkore" or "AIG") is a leading manufacturer of Electrical Raceway products primarily for the non-residential construction and renovation markets and Mechanical Products & Solutions ("MP&S") for the construction and industrial markets.

Electrical Raceway products form the critical infrastructure that enables the deployment, isolation and protection of a structure's electrical circuitry from the original power source to the final outlet.

MP&S frame, support and secure component parts in a broad range of structures, equipment and systems in electrical, industrial and construction applications.

(the "Company", "Atkore" or "AIG") is a leading manufacturer of Electrical products primarily for the non-residential construction and renovation markets and Safety & Infrastructure solutions for the construction and industrial markets.

Atkore was incorporated in the State of Delaware on November 4, 2010.

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("AIH"), which in turn is the sole stockholder of Atkore International, Inc.

Segment Redefinition — Effective in the first quarter of fiscal 2021, the Company renamed and redefined its reportable segments.

The Electrical Raceway segment was renamed as the Electrical segment.

The Electrical segment manufactures high quality products used in the construction of electrical power systems including conduit, cable, and installation accessories.

This segment serves contractors, in partnership with the electrical wholesale channel.

The Mechanical Products & Solutions segment was renamed as the Safety & Infrastructure segment.

This segment designs and manufactures solutions including metal framing, mechanical pipe, perimeter security, and cable management for the protection and reliability of critical infrastructure.

These solutions are marketed to contractors, original equipment manufacturers and end users.

Segment Realignment & Reclassifications — Effective in the first quarter of fiscal 2021, the Company implemented a realignment (the “Realignment”) of its segment financial reporting structure.

The Company’s domestic cable management and prefabrication modular businesses had historically been reported in the Electrical Raceway segment.

Due to transitions in the Company’s Executive Leadership Team, these businesses are now reported in the Safety & Infrastructure segment.

The Realignment reflects how the Company’s Chief Operating Decision Maker now assesses the operating performance and allocates resources to the Safety & Infrastructure segment.

Goodwill was also reallocated on a relative fair value basis between the applicable reporting units.

The Company reflected these changes to its segment information retrospectively to the earliest period presented which resulted in a transfer of external net sales, intersegment sales, total assets, and Adjusted EBITDA from the Electrical segment to the Safety & Infrastructure segment.

These changes had no impact on the Company’s previously reported consolidated net sales, operating income, net income or earnings per share.

See Note 16, ''Segment Information'' for additional details.

Basis of Presentation — The accompanying unaudited condensed consolidated financial statements of the Company included herein have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").

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Fiscal Periods — The Company has a fiscal year that ends on September 30.

It is the Company's practice to establish quarterly closings using a 4-5-4 calendar.

The Company's fiscal quarters end on the last Friday in December, March and June.

The Company's fiscal quarters typically end on the last Friday in December, March and June as it follows a 4-5-4 calendar.

Use of Estimates — The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclose contingent assets and liabilities at the date of the condensed consolidated financial statements and report the associated amounts of revenues and expenses.

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Adoption dates are on the first day of the fiscal year indicated below, unless otherwise specified.

ASU Description of ASU Impact to Atkore Note Adoption Date

2016-02 Leases (Topic 842) The Accounting Standards Update ("ASU") requires companies to use a "right of use" lease model that assumes that each lease creates an asset (the lessee's right to use the leased asset) and a liability (the future rent payment obligations), which should be reflected on a lessee's balance sheet to fairly represent the lease transaction and the lessee's related financial obligations with terms of more than 12 months.

The Company adopted the guidance in the first quarter of 2020 using the modified retrospective method.

See Note 2, "Leases" for further detail.

ASU Description of ASU Impact to Atkore Adoption Date

2016-13 Financial Instruments - Credit Losses (Topic 326) The ASU adds to GAAP an impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses.

Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses.

The Company adopted this standard in the first quarter of 2021.

The adoption of the standard did not have a material impact on the Company's consolidated financial statements.

A summary of accounting guidance not yet adopted is as follows.

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ASU Description of ASU Impact to Atkore Effective Date

Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses.

Under evaluation.

Based on procedures performed to date, the Company does not anticipate the adoption of this ASU to be material to the financial statements.

2018-14 Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans The ASU amends Accounting Standards Codification ("ASC") 715 to add, remove and clarify disclosure requirements related to defined benefit pension and other postretirement plans.

2019-12, Simplifying the accounting for income taxes (Topic 740) The ASU eliminates certain existing exceptions related to the general approach in ASC 740 relating to franchise taxes, reducing complexity in the interim period accounting for year to date loss limitations and changes in tax laws and clarifying the accounting for transactions outside of a business combination that result in a step up in the tax basis of goodwill.

Under evaluation.

Based on procedures performed to date, the Company does not anticipate the adoption of this ASU to be material to the financial statements.

The Company will be required to add a narrative description of the reasons for significant gains and losses affecting the benefit obligation for the period and will no longer be required to disclose the amounts in accumulated other comprehensive income expected to be recognized as part of net periodic benefit cost over the next year.

2019-12 Income Tax The ASU amends ASC 740 to simplify the accounting for various topics related to income taxes.

2020-04, Reference rate reform Topic 848:

Facilitation of the effects of reference rate reform on financial reporting The ASU addresses constituents’ concerns about certain accounting consequences that could result from the global markets’ anticipated transition away from the use of the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates.

Under evaluation.

Based on procedures performed to date, the Company does not anticipate the adoption of this ASU to be material to the financial statements.

2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (issued March 12, 2020) The ASU addresses constituents’ concerns about certain accounting consequences that could result from the global markets’ anticipated transition away from the use of the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates.

Under evaluation.

On October 1, 2019, we adopted Topic 842 using the modified retrospective transition method.

Topic 842 requires the recognition of lease assets and liabilities for operating leases, in addition to the finance lease assets and liabilities previously recorded on our condensed consolidated balance sheets.

Beginning on October 1, 2019, our condensed consolidated financial statements are presented in accordance with the revised policies, while prior period amounts are not adjusted and continue to be reported in accordance with our historical policies.

The modified retrospective transition method required the cumulative effect, if any, of initially applying the guidance to be recognized as an adjustment to our accumulated deficit as of our adoption date.

As a result of adopting Topic 842, we recognized additional operating lease assets and liabilities of $ 45,519 and $ 46,941 as of October 1, 2019.

The discount rate primarily used to calculate that adjustment was the Company's incremental borrowing rate as of the adoption date, October 1, 2019, as a rate implicit in most contracts was not readily determinable.

The Company recorded a cumulative effect adjustment of $ 1,053 to accumulated deficit, net of tax, as a result of the adoption.

The Company elected the package of practical expedients permitted under the transition guidance within Topic 842, which allowed us to carry forward prior conclusions about lease identification, classification and initial direct costs for leases entered into prior to adoption of Topic 842.

Additionally, for leases with a term of 12 months or less, the Company elected the short-term lease exemption, which allowed us to not recognize right-of-use assets ("ROU") or lease liabilities for qualifying leases existing at transition and new leases we may enter into in the future.

Leases with an initial term of 12 months or less are classified as short-term leases and are not recorded on the condensed consolidated balance sheets.

The lease expense for short-term leases is recognized on a straight-line basis over the lease term.

The Company engages in leasing transactions to meet the needs of the business.

The Company leases certain warehouses and distribution centers, office space, forklifts, vehicles and other machinery and equipment.

The determination to lease, rather than purchase, an asset is primarily contingent upon capital requirements, duration of the forecasted business investment, and asset availability.

The Company determines if an arrangement is a lease at inception and all arrangements deemed to be leases are subject to an assessment to determine the classification between finance and operating leases.

The Company's significant assumptions and judgments in determining whether a contract is or contains a lease include establishing whether the supplier has the ability to use other assets to fulfill its service or whether the terms of the agreement enable the Company to control the use of a dedicated property, plant and equipment asset during the contract term.

In the majority of the Company's contracts where it must identify whether a lease is present, it is readily determinable that the Company controls the use of the assets and obtains substantially all of the economic benefit during the term of the contract.

In those contracts where identification is not readily determinable, the Company has determined that the supplier has either the ability to use another asset to provide the service or the terms of the contract give the supplier the rights to operate the asset at its discretion during the term of the contract, in which case the arrangement would not constitute a lease.

Right-of-use assets and lease obligations are recognized based on the present value of the future minimum lease payments over the lease term as of the commencement date.

The Company’s lease agreements have terms that include both lease and non-lease components.

Lease component fees are included in the present value of future minimum lease payments.

Conversely, non-lease components are not subject to capitalization and are expensed as incurred.

Per Topic 842, the contractual interest rate is used to calculate the present value of the future minimum lease payments.

However, the majority of the Company’s leases do not provide an implicit rate.

Therefore, the Company's significant assumption and judgments in determining the discount rate include determining the incremental borrowing rate.

The Company’s incremental borrowing rates are based on the term of the lease, the economic environment of the lease and the effect of collateralization.

The valuation of the ROU asset also includes lease payments made in advance of the lease commencement date and initial direct costs incurred to secure the lease and is reduced for lease incentives.

The lease terms include options to extend or terminate the lease when it is reasonably certain the Company will exercise the options.

The Company has certain leasing agreements, related to leased vehicles available to our sales personnel, that contain guaranteed residual value terms, which are not expected to be triggered.

The Company’s leasing portfolio does not contain any material restrictive covenants.

(in thousands) June 26, 2020

Operating lease assets $ 37,068

Finance lease assets 3,570

Total right-of-use assets, gross $ 40,638

accumulated depreciation ( 1,956 )

Right-of-use assets, net $ 38,682

Current liabilities:

Current portion of operating lease liabilities $ 11,207

Current portion of finance lease liabilities 358

Lease obligations $ 11,565

Noncurrent liabilities:

Operating lease liabilities $ 27,014

Finance lease liabilities 899

Long-term lease obligations $ 27,913

Total lease obligations $ 39,478

The following table summarizes lease costs by type of cost for the three months ended June 26, 2020.

In the condensed consolidated statements of operations, cost of sales and selling, general and administrative expenses included lease costs of $ 4,464 and $ 349 , respectively.

(in thousands) Three months ended June 26, 2020

Condensed Consolidated Statement of Operations Classification Total

Amortization of right-of-use assets $ 3,611

Interest on lease liabilities 10

Variable lease costs 405

Short term lease costs 787

Total lease costs $ 4,813

The following table summarizes lease costs by type of cost for the nine months ended June 26, 2020.

In the condensed consolidated statements of operations, cost of sales and selling, general and administrative expenses included lease costs of $ 10,414 and $ 2,474 , respectively.

(in thousands) Nine months ended June 26, 2020

Condensed Consolidated Statement of Operations Classification Total

Amortization of right-of-use assets $ 10,995

Interest on lease liabilities 32

Variable lease costs 487

Short term lease costs 1,374

Total lease costs $ 12,888

Maturity of Lease Liabilities

The Company's maturity analysis of its lease liabilities as of June 26, 2020 is as follows:

(in thousands) Financing Leases Operating Leases

2020 $ 105 $ 3,449

2021 400 11,785

2022 385 8,817

2023 314 6,769

2024 69 5,624

2025 and after — 6,760

Total lease payments $ 1,273 $ 43,204

Interest ( 16 ) ( 4,983 )

Present value of lease liabilities $ 1,257 $ 38,221

The following represents the Company's future minimum rental payments at September 30, 2019 for agreements classified as operating leases under ASC 840 with non-cancelable terms in excess of one year:

2020 $ 13,526

2025 and thereafter 6,938

Total $ 52,181

Lease Term and Discount Rate

June 26, 2020

Weighted-average remaining lease term (years)

Operating leases 4.6

Finance leases 3.4

Weighted-average discount rate

Operating leases 3.83 %

Finance leases 3.16 %

Other Information

(in thousands) Nine months ended June 26, 2020

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases 9,687

Operating cash flows from finance leases 20

Financing cash flows from finance leases 396

Option to implement ASU expires in 2022

REVENUE FROM CONTRACTS WITH CUSTOMERS

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The Company records amounts billed to customers for reimbursement of shipping and handling costs within revenue.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of goods sold.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are

accounted for as fulfillment costs and are included in cost of goods sold.

Sales taxes and other usage-based taxes are excluded from revenue.

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See Note 16, ''Segment Information'' for revenue disaggregated by geography and product categories.

From time to time, the Company enters into strategic acquisitions in an effort to better service existing customers and to attain new customers.

On August 21, 2019, Atkore Plastic Pipe Corporation, a wholly-owned subsidiary of the Company acquired the assets of Rocky Mountain Pipe ("Cor-Tek"), a manufacturer of PVC conduit for electrical applications, and considered a leading innovator in cellular core extrusion technology for a purchase price of $ 14,835 .

In connection with this acquisition, the Company recorded a bargain purchase gain of $ 7,384 within other income, net during the fourth quarter of fiscal 2019 in the Statement of Operations.

The Company believes that it was able to acquire the net assets of Cor-Tek for less than fair value as a result of Cor-Tek’s financial difficulties.

On August 12, 2019, Unistrut Limited, a wholly-owned subsidiary of the Company, acquired Flytec Systems Ltd.

and its parent holding company, Modern Associates Ltd., (collectively "Flytec"), a manufacturer of metal surface trunking, including IP4X, perimeter systems, pedestal boxes, as well as underfloor installations and industrial floor trunking.

The purchase price was immaterial to the Company.

On June 3, 2019, AFC Cable Systems, Inc., a wholly-owned subsidiary of the Company acquired the assets of United Structural Products, LLC.

Tray"), a manufacturer of welded aluminum and engineered-to-order cable trays for a purchase price of $ 25,507 , net of cash received.

As a result of the acquisition, the Company recognized $ 7,295 of goodwill, $ 14,800 of identifiable intangible assets and $ 3,412 of working capital and other net other tangible assets.

On October 1, 2018, Allied Luxembourg S.a.r.l, a wholly-owned subsidiary of the Company acquired all of the outstanding stock of Vergokan International NV ("Vergokan") for a purchase price of $ 57,899 , net of cash received.

Vergokan is a leading manufacturer of cable tray and cable ladder systems, underfloor installations and industrial floor trunking that serves industrial, power and energy, commercial and infrastructure sectors in more than 45 countries.

This transaction provides Atkore with an expanded presence in Western Europe and strengthens the Company's electrical portfolio of cable management products within the Electrical Raceway segment.

All the above acquisitions were funded with cash on hand.

The condensed consolidated financial statements include the results of the acquired companies from the acquisition date.

Due to the immaterial nature of these acquisitions, both individually, and in the aggregate, the Company did not include the full year pro forma results of operations for the acquisition year or previous years.

The purchase price was allocated to tangible and intangible assets acquired and liabilities assumed, based on their fair values.

The following table summarizes the Level 3 fair values assigned to the net assets acquired and liabilities assumed as of the acquisition date for fiscal 2019:

(in thousands) Vergokan Other Total

Fair value of consideration transferred:

Cash consideration $ 58,728 $ 41,641 $ 100,369

Other liability consideration — 1,400 $ 1,400

Total consideration transferred 58,728 43,041 101,769

Fair value of assets acquired and liabilities assumed:

Cash 829 1,541 2,370

Accounts receivable 8,761 8,217 16,978

Inventories 11,434 7,494 18,928

Intangible assets 12,621 16,400 29,021

Fixed assets 32,490 19,298 51,788

Accounts payable ( 18,716 ) ( 7,608 ) ( 26,324 )

Gain on purchase of business — ( 7,384 ) ( 7,384 )

Other 1,680 ( 3,412 ) ( 1,732 )

Net assets acquired 49,099 34,546 83,645

Excess purchase price attributed to goodwill acquired $ 9,629 $ 8,495 $ 18,124

The following table summarizes the fair value of intangible assets as of the acquisition date:

Vergokan Other

($ in thousands) Fair Value Weighted Average Useful Life (Years) Fair Value Weighted Average Useful Life (Years)

Customer relationships $ 10,535 12.0 $ 15,400 10.0

Other 2,086 9.0 1,000 9.0

Total intangible assets $ 12,621 $ 16,400

The purchase price allocation, intangible asset values and related estimates of useful lives for all 2019 acquisitions were finalized as of December 27, 2019.

From time to time, the Company enters into strategic acquisitions in an effort to better service existing customers and to obtain new customers.

On October 22, 2020, the Company acquired Queen City Plastics, Inc., a leading manufacturer of PVC conduit, elbows and fittings for the electrical market.

The preliminary purchase price was allocated to tangible assets acquired and liabilities assumed based on their fair values.

As of December 25, 2020, the purchase price allocation has not been finalized as the Company is refining its fair value estimates for working capital and fixed assets.

The purchase price of $ 7.2 million was deemed immaterial to the Company.

POSTRETIREMENT BENEFITS

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The net periodic benefit credit was as follows:

Three months ended Nine months ended

(in thousands) Note June 26, 2020 June 28, 2019 June 26, 2020 June 28, 2019

Three months ended

(in thousands) Note December 25, 2020 December 27, 2019

Interest cost $ 682 $ 935

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Net periodic benefit credit 5 $ ( 591 ) $ ( 426 )

RESTRUCTURING CHARGES

The liability for restructuring reserves is included within other current liabilities in the Company's condensed consolidated balance sheets as follows:

Electrical Raceway MP&S Other/Corporate

(in thousands) Severance (a) Other (b) Severance (a) Other Severance

Balance as of September 30, 2018 $ 212 $ 310 $ — $ 29 $ — $ 551

Charges 1,047 2,544 213 — — 3,804

Utilization ( 867 ) ( 2,854 ) ( 68 ) ( 29 ) — ( 3,818 )

Balance as of September 30, 2019 392 — 145 — — 537

Charges 1,207 1,666 398 — 68 3,339

Utilization ( 821 ) ( 1,666 ) ( 388 ) — ( 36 ) ( 2,911 )

Exchange rate effects 9 — — — 9

Balance as of June 26, 2020 $ 787 $ — $ 155 $ — $ 32 $ 974

(a) Charges for the three and nine months ended June 26, 2020 include $ 91 and $ 1,673 , respectively in charges for a reduction in force implemented as part of adjusting to the macroeconomic impacts related to the outbreak of the novel coronavirus (COVID-19).

(b) Primarily related to Atkore's commitment to close certain facilities as part of its continuing effort to realign its strategic focus.

The Company recorded other restructuring charges to close facilities of $ 1,666 and $ 2,473 for the nine months ended June 26, 2020 and June 28, 2019, respectively, and for the three months ended June 26, 2020 and June 28, 2019 the company recorded $ 383 and $ 638 respectively.

The Company expects to utilize all restructuring accruals as of June 26, 2020 within the next twelve months.

The net restructuring charges included as a component of selling, general and administrative expenses in the Company's condensed consolidated statements of operations were as follows:

Three months ended Nine months ended

(in thousands) June 26, 2020 June 28, 2019 June 26, 2020 June 28, 2019

Total restructuring charges, net $ 474 $ 709 $ 3,339 $ 3,181

OTHER INCOME, NET

Other income, net consisted of the following:

Three months ended Nine months ended

(in thousands) June 26, 2020 June 28, 2019 June 26, 2020 June 28, 2019

Three months ended

(in thousands) December 25, 2020 December 27, 2019

Undesignated foreign currency derivative instruments $ 2,617 $ 3,123

Foreign exchange (gain) loss on intercompany loans 452 1,360 ( 72 ) 1,423

Foreign exchange gain on intercompany loans ( 2,457 ) ( 2,931 )

Pension-related benefits ( 591 ) ( 426 )

Other — ( 91 ) — ( 77 )

Other income, net $ ( 431 ) $ ( 234 )

On March 27, 2020, President Trump signed into U.S.

federal law the CARES Act, which is aimed at providing emergency assistance and health care for individuals, families, and businesses affected by the COVID-19 pandemic and generally supporting the U.S.

The CARES Act, among other things, includes provisions related to refundable payroll tax credits, deferment of the employer portion of social security payments, net operating loss carryback periods, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property.

At this time, we do not expect there to be a material impact to our condensed consolidated financial statements as a result of this legislation.

For the three months ended June 26, 2020 and June 28, 2019, the Company's effective tax rate attributable to income before income taxes was 26.5 % and 23.3 %, respectively.

For the three months ended June 26, 2020 and June 28, 2019, the Company's income tax expense was $ 8,672 and $ 11,106 respectively.

The increase in the current period effective tax rate was primarily due to an increase in losses incurred by our foreign jurisdictions for which we are not able to realize the related tax benefit.

For the nine months ended June 26, 2020 and June 28, 2019, the Company's effective tax rate attributable to income before income taxes was 22.9 % and 24.1 %, respectively.

For the nine months ended June 26, 2020 and June 28, 2019, the Company's income tax expense was $ 29,112 and $ 29,513 respectively.

The decrease in the current period effective tax rate was primarily due to an increase in the excess tax benefit associated with stock compensation, partially offset by the increase in losses incurred by our foreign jurisdictions for which we are not able to realize the related tax benefit.

For the three months ended December 25, 2020 and December 27, 2019, the Company's effective tax rate attributable to income before income taxes was 24.1 % and 17.4 %, respectively.

For the three months ended December 25, 2020 and December 27, 2019, the Company's income tax expense was $ 26,964 and $ 7,340 respectively.

The increase in the current period effective tax rate was primarily due to a decrease in the excess tax benefit associated with stock compensation.

A valuation allowance has been recorded against certain net operating losses in certain foreign jurisdictions.

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We record interest and penalties related to unrecognized tax benefits as a component of income tax expense.

During the nine months ended June 26, 2020, the balance of unrecognized tax benefits decreased by $ 108 upon the resolution of a state audit item.

For the nine months ended June 26, 2020, the Company made no additional provision for U.S.

During the three months ended December 25, 2020, the balance of unrecognized tax benefits decreased by $ 84 upon the resolution of a state audit item.

For the three months ended December 25, 2020, the Company made no additional provision for U.S.

income taxes for unrecognized deferred tax liabilities for temporary differences related to basis differences in investments in subsidiaries, as the investments are essentially permanent in duration.

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The following table sets forth the computation of basic and diluted earnings per share:

Three months ended Nine months ended

(in thousands, except per share data) June 26, 2020 June 28, 2019 June 26, 2020 June 28, 2019

Three months ended

(in thousands, except per share data) December 25, 2020 December 27, 2019

Net income $ 85,066 $ 34,790

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Non-participating employee stock options (1)

612 1,171 842 1,254

Diluted weighted average common shares outstanding 47,547 47,999

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Diluted earnings per share $ 1.75 $ 0.71

(1) Stock options to purchase approximately 0.3 million and 0.3 million shares of common stock were outstanding during the three months ended June 26, 2020 and June 28, 2019, respectively, but were not included in the calculation of diluted earnings per share as the impact of these options would have been anti-dilutive.

Stock options to purchase approximately 0.1 million and 0.4 million shares of common stock were outstanding during the nine months ended June 26, 2020 and June 28, 2019, respectively, but were not included in the calculation of diluted earnings per share as the impact of these options would have been anti-dilutive.

(1) Stock options to purchase approximately 0.1 million and 0.1 million shares of common stock were outstanding during the three months ended December 25, 2020 and December 27, 2019, respectively, but were not included in the calculation of diluted earnings per share as the impact of these options would have been anti-dilutive.

ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table presents the changes in accumulated other comprehensive loss by component for the three months ended June 26, 2020 and June 28, 2019.

(in thousands) Defined benefit

pension items Currency

adjustments Total

Balance as of March 27, 2020 $ ( 23,385 ) $ ( 19,000 ) $ ( 42,385 )

Other comprehensive loss before reclassifications — 2,252 2,252

Amounts reclassified from accumulated other

comprehensive loss, net of tax 216 — 216

Net current period other comprehensive income 216 2,252 2,468

Balance as of June 26, 2020 $ ( 23,169 ) $ ( 16,748 ) $ ( 39,917 )

(in thousands) Defined benefit

pension items Currency

adjustments Total

Balance as of March 29, 2019 $ ( 8,341 ) $ ( 12,184 ) $ ( 20,525 )

Other comprehensive loss before reclassifications — ( 610 ) ( 610 )

Amounts reclassified from accumulated other

comprehensive loss, net of tax 20 0 20

Net current period other comprehensive income (loss) 20 ( 610 ) ( 590 )

Balance as of June 28, 2019 $ ( 8,321 ) $ ( 12,794 ) $ ( 21,115 )

The following table presents the changes in accumulated other comprehensive loss by component for the nine months ended June 26, 2020 and June 28, 2019.

The following table presents the changes in accumulated other comprehensive loss by component for the three months ended December 25, 2020 and December 27, 2019.

(in thousands) Defined benefit

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Balance as of September 30, 2020 $ ( 30,761 ) $ ( 11,793 ) $ ( 42,554 )

Other comprehensive loss before reclassifications — 1,132 1,132

Other comprehensive income before reclassifications — 7,051 7,051

Amounts reclassified from accumulated other

1 unchanged sentence

Net current period other comprehensive income 262 7,051 7,313

Balance as of June 26, 2020 $ ( 23,169 ) $ ( 16,748 ) $ ( 39,917 )

Balance as of December 25, 2020 $ ( 30,499 ) $ ( 4,742 ) $ ( 35,241 )

(in thousands) Defined benefit

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Balance as of September 30, 2019 $ ( 23,818 ) $ ( 17,880 ) $ ( 41,698 )

Other comprehensive loss before reclassifications — ( 2,404 ) ( 2,404 )

Other comprehensive income before reclassifications — 5,109 5,109

Amounts reclassified from accumulated other

comprehensive loss, net of tax 207 — 207

Net current period other comprehensive income (loss) 60 ( 2,404 ) ( 2,344 )

Reclassification of stranded tax benefits (1)

( 2,333 ) — ( 2,333 )

Balance as of June 28, 2019 $ ( 8,321 ) $ ( 12,794 ) $ ( 21,115 )

(1) Due to the adoption of ASU 2018-02.

Net current period other comprehensive income 207 5,109 5,316

Balance as of December 27,2019 $ ( 23,611 ) $ ( 12,771 ) $ ( 36,382 )

INVENTORIES, NET

A majority of the Company's inventories are recorded at the lower of cost (primarily last in, first out, or "LIFO") or market.

Approximately 73 % and 72 % of the Company's inventories were valued at the lower of LIFO cost or market at June 26, 2020 and September 30, 2019, respectively.

Interim LIFO determinations, including those at June 26, 2020, are based on management's estimates of future inventory levels and costs for the remainder of the current fiscal year.

(in thousands) June 26, 2020 September 30, 2019

A majority of the Company's inventories are recorded at the lower of cost (primarily last in, first out, or "LIFO") or market or net realizable value, as applicable.

Approximately 74 % and 73 % of the Company's inventories were valued at the lower of LIFO cost or market at December 25, 2020 and September 30, 2020, respectively.

Interim LIFO determinations, including those at December 25, 2020, are based on management's estimates of future inventory levels and costs for the remainder of the current fiscal year.

(in thousands) December 25, 2020 September 30, 2020

Purchased materials and manufactured parts, net $ 56,864 $ 49,192

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Inventories, net $ 221,261 $ 199,095

Total inventories would be $ 2,997 and $ 3,138 higher than reported as of June 26, 2020 and September 30, 2019, respectively, if the first-in, first-out method was used for all inventories.

As of June 26, 2020, and September 30, 2019, the excess and obsolete inventory reserve was $ 13,284 and $ 14,295 , respectively.

Total inventories would be $ 1,997 higher and $ 4,418 lower than reported as of December 25, 2020 and September 30, 2020, respectively, if the first-in, first-out method was used for all inventories.

As of December 25, 2020, and September 30, 2020, the excess and obsolete inventory reserve was $ 15,184 and $ 14,533 , respectively.

PROPERTY, PLANT AND EQUIPMENT

As of June 26, 2020, and September 30, 2019, property, plant and equipment at cost and accumulated depreciation were as follows:

(in thousands) June 26, 2020 September 30, 2019

As of December 25, 2020, and September 30, 2020, property, plant and equipment at cost and accumulated depreciation were as follows:

(in thousands) December 25, 2020 September 30, 2020

Land $ 23,378 $ 20,460

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Property, plant and equipment, net $ 244,995 $ 243,891

Depreciation expense for the three months ended June 26, 2020 and June 28, 2019 totaled $ 10,290 and $ 9,892 respectively.

Depreciation expense for the nine months ended June 26, 2020 and June 28, 2019 totaled $ 31,314 and $ 29,783 respectively.

Depreciation expense for the three months ended December 25, 2020 and December 27, 2019 totaled $ 10,783 and $ 10,617 respectively.

GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill are as follows:

(in thousands) Electrical Raceway Mechanical Products & Solutions Total

(in thousands) Electrical Safety & Infrastructure Total

Balance as of October 1, 2020 $ 144,662 $ 43,577 $ 188,239

Exchange rate effects 1,745 — 1,745

Balance as of June 26, 2020 $ 150,046 $ 36,563 $ 186,609

Goodwill balances as of October 1, 2019 and June 26, 2020 include $ 3,924 and $ 43,000 of accumulated impairment losses within the Electrical Raceway and MP&S segments, respectively.

Balance as of December 25, 2020 $ 146,407 $ 43,577 $ 189,984

Goodwill balances as of October 1, 2020 and December 25, 2020 include $ 3,924 and $ 43,000 of accumulated impairment losses within the Electrical and Safety & Infrastructure segments, respectively.

The Company assesses the recoverability of goodwill and indefinite-lived trade names on an annual basis in accordance with ASC 350, "Intangibles - Goodwill and Other." The measurement date is the first day of the fourth fiscal quarter, or more frequently, if events or circumstances indicate that it is more likely than not that the fair value of a reporting unit or the respective indefinite-lived trade name is less than the carrying value.

The following table provides the gross carrying value, accumulated amortization and net carrying value for each major class of intangible assets:

June 26, 2020 September 30, 2019

December 25, 2020 September 30, 2020

($ in thousands) Weighted Average Useful Life (Years) Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value

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Other intangible assets consist of definite-lived trade names, technology, non-compete agreements and backlogs.

Amortization expense for the three months ended June 26, 2020 and June 28, 2019 was $ 8,026 and $ 7,868 , respectively.

Amortization expense for the nine months ended June 26, 2020 and June 28, 2019 was $ 24,210 and $ 24,278 , respectively.

Amortization expense for the three months ended December 25, 2020 and December 27, 2019 was $ 8,260 and $ 8,113 , respectively.

Expected amortization expense for intangible assets for the remainder of fiscal 2021 and over the next five years and thereafter is as follows:

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Actual amounts of amortization may differ from estimated amounts due to additional intangible asset acquisitions, impairment of intangible assets and other events.

The Company considered whether the adverse economic impacts of the novel coronavirus (COVID-19) outbreak, which were developing during the three months ended March 27, 2020 and continued to develop during the three months ended June 26, 2020, would indicate whether it’s more likely than not that the fair value of its reporting units or its indefinite lived intangible assets would be below the carrying value.

For a majority of the Company’s operations, the fair values of its related reporting units and indefinite lived intangible assets significantly exceeded their respective carrying values as of the most recent impairment testing period in July 2019.

For these reporting units and the indefinite lived intangibles, the Company concluded that it was not more likely than not that the fair value of these reporting units or indefinite lived intangible assets was less than the carrying value and therefore there was not a triggering event requiring the performance of an impairment test as of June 26, 2020.

The economic impacts of the COVID-19 outbreak were more substantial for the Company’s reporting unit related to its operations in Europe, Middle East, and Africa (EMEA), due to the cross-border transactions that occur within those operations, the cross-border interactions needed to fully realize the synergies associated with recent in-region acquisitions and the COVID-19 related closing of these borders.

The Company deemed the economic related developments of the outbreak to be a triggering event for the EMEA reporting unit as of March 27, 2020 and performed an updated goodwill impairment test as of that date.

The Company calculated the fair value of its EMEA reporting unit considering three valuation approaches:

(a) the income approach;

(b) the guideline public company method;

and (c) a market approach using a transaction analysis.

The income approach calculates the fair value of the reporting unit using a discounted cash flow approach.

Internally forecasted future cash flows, which the Company believes reasonably approximate market participant assumptions, are discounted using a weighted average cost of capital (Discount Rate) developed for the specific reporting unit.

The Discount Rate is developed using market observable inputs, as well as considering whether or not there is a measure of risk related to the specific reporting unit’s forecasted performance.

Fair value under the guideline public company method is determined for the reporting unit by applying market multiples for comparable public companies to the unit’s financial results.

The key uncertainties in these calculations are the assumptions used in determining the reporting unit’s forecasted future performance, including revenue growth and EBITDA margins, as well as the perceived risk associated with those forecasts, along with selecting representative market multiples.

Fair value under the transactional analysis is determined based on exchange prices in actual transactions and on asking prices for controlling interests in public or private companies currently offered for sale by applying market multiples for comparable public companies to the unit’s financial results.

The key uncertainties in the guideline public company method and the transactional analysis calculations are the assumptions used in determining the reporting unit's comparable public companies, comparable transactions and the selection of the market multiples.

The EMEA reporting unit’s impairment test as of March 27, 2020 revealed that its fair value was greater than carrying value by an amount of less than 10 %.

During the three months ended June 26, 2020, the Company continued to assess information related to the current and anticipated economic impacts of COVID-19 on the EMEA reporting unit and revised its financial projections.

As a result of this assessment, the Company concluded that it was not more likely than not that the fair value of the EMEA reporting unit was less than the carrying value and therefore deemed that there was not a triggering event requiring the performance of an updated impairment test.

The goodwill allocated to the EMEA reporting unit as of June 26, 2020 was $ 34,836 .

The impairment analysis is sensitive to changes in both business and valuation assumptions.

Changes to these assumptions could result in revisions of management's estimates of the fair value of the reporting unit and could result in impairment charges in the future, which could be material to our results of operations.

The Company will continue to monitor for such changes in facts or circumstances.

Goodwill impairment charges may be recognized in future periods to the extent changes in facts or circumstances occur, including deterioration in the macroeconomic environment, industry, and deterioration in the Company’s performance or its future projections.

Debt as of June 26, 2020 and September 30, 2019 was as follows:

(in thousands) June 26, 2020 September 30, 2019

Debt as of December 25, 2020 and September 30, 2020 was as follows:

(in thousands) December 25, 2020 September 30, 2020

First Lien Term Loan Facility due December 22, 2023 $ 771,585 $ 811,540

3 unchanged sentences

Long-term debt $ 764,379 $ 803,736

The asset-based credit facility (the "ABL Credit Facility") has aggregate commitments of $ 325,000 and is guaranteed by AIH and the U.S.

operating companies owned by AII.

AII's availability under the ABL Credit Facility was $ 247,782 and $ 301,882 as of June 26, 2020 and September 30, 2019, respectively.

During the three months ended December 25, 2020, the Company made a voluntary prepayment of $ 40,000 of principal on the First Lien Loan.

The voluntary prepayments in the past two years resulted in the elimination of all principal payment requirements until the contractual maturity of the debt in fiscal 2024.

The asset-based credit facility (the "ABL Credit Facility") has aggregate commitments of $ 325,000 and is guaranteed by AIH, the U.S.

operating companies owned by AII and certain other restricted subsidiaries of AII that AII causes to be a subsidiary guarantor from time to time.

AII's availability under the ABL Credit Facility was $ 313,270 and $ 265,899 as of December 25, 2020 and September 30, 2020, respectively.

FAIR VALUE MEASUREMENTS

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The Company uses forward currency contracts to hedge the effects of foreign exchange relating to certain of the Company’s intercompany balances denominated in a foreign currency.

These derivative instruments are not formally designated as hedges by the Company and the terms of these instruments range at inception from six months to five years .

These derivative instruments are not formally designated as hedges by the Company and the terms of these instruments range from six months to two years .

Short-term forward currency contracts are recorded in either other current assets or other current liabilities and long-term forward currency contracts are recorded in either other long-term assets or other long-term liabilities in the condensed consolidated balance sheet.

1 unchanged sentence

See Note 5, ''Other Income, net'' for further detail.

The total notional amounts of undesignated forward currency contracts were £ 44.1 million and £ 45.0 million as of June 26, 2020 and September 30, 2019, respectively.

The total notional amounts of undesignated forward currency contracts were £ 36.8 million and £ 43.3 million as of December 25, 2020 and September 30, 2020, respectively.

Cash flows associated with derivative financial instruments are recognized in the operating section of the condensed consolidated statements of cash flows.

1 unchanged sentence

The following table presents the Company's assets and liabilities measured at fair value:

June 26, 2020 September 30, 2019

December 25, 2020 September 30, 2020

(in thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

4 unchanged sentences

The estimated fair value of financial instruments not carried at fair value in the condensed consolidated balance sheets were as follows:

June 26, 2020 September 30, 2019

December 25, 2020 September 30, 2020

(in thousands) Carrying Value Fair Value Carrying Value Fair Value

4 unchanged sentences

The Company has obligations related to commitments to purchase certain goods.

As of June 26, 2020, such obligations were $ 145,622 for the rest of fiscal year 2020 and $ 2,850 for fiscal year 2021 and beyond.

As of December 25, 2020, such obligations were $ 267,331 for the rest of fiscal year 2021 and $ 9,710 for fiscal year 2022 and beyond.

These amounts represent open purchase orders for materials used in production.

2 unchanged sentences

Several lawsuits have been filed against the Company and the Company has also received other claim demand letters alleging that the Company's anti-microbial coated steel sprinkler pipe, which the Company has not manufactured or sold for several years, is incompatible with chlorinated polyvinyl chloride and caused stress cracking in such pipe manufactured by third parties when installed together in the same sprinkler system, which the Company refers to collectively as the "Special Products Claims." After an analysis of claims experience, the Company reserved its best estimate of the probable and reasonably estimable losses related to these matters.

The Company's total product liability reserves for Special Products Claims and other product liability matters were $ 823 and $ 2,424 as of June 26, 2020 and September 30, 2019, respectively.

As of June 26, 2020, the Company believes that the range of aggregate reasonably possible losses for Special Products Claims and other product liabilities is between $ 1,000 and $ 8,000 .

The Company's total product liability reserves for Special Products Claims and other product liability matters were $ 643 and $ 597 as of December 25, 2020 and September 30, 2020, respectively.

As of December 25, 2020, the Company believes that the range of aggregate reasonably possible losses for Special Products Claims and other product liabilities is between $ 1,000 and $ 8,000 .

During fiscal 2019, Tyco and the Company agreed with a plaintiff to settle one Special Products Claim that was to go to trial.

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At this time, the Company does not expect the outcome of the Special Products Claims proceedings, either individually or in the aggregate, to have a material adverse effect on its business, financial condition, results of operations or cash flows, and the Company believes that its reserves are adequate for all remaining contingencies for Special Products Claims.

During the nine months ended June 26, 2020, one of the Company’s manufacturing facilities experienced a flood which resulted in damages to certain property, plant and equipment.

This facility is covered under the Company’s property and casualty loss and business interruption insurance policies.

The Company is currently in the process of finalizing its estimates related to the property, plant and equipment losses incurred.

The range of loss is currently estimated to be between $ 6,046 and $ 13,000 .

This range excludes any amounts related to business interruption losses.

The Company believes that, other than the $ 1,000 deductible expense under the related insurance claim, it will be reimbursed for substantially all other property, plant and equipment losses in connection with the event under its current insurance policies.

The Company has recorded an estimated loss of $ 1,486 with a related insurance recovery of $ 1,486 within selling, general and administrative expenses in its condensed consolidated statements of operations for the three months ended June 26, 2020.

The Company has recorded an estimated loss of $ 6,046 with a related insurance recovery of $ 5,046 within selling, general and administrative expenses in its condensed consolidated statements of operations for the nine months ended June 26, 2020.

In addition to the matters discussed above, from time to time, the Company is subject to a number of disputes, administrative proceedings and other claims arising out of the ordinary conduct of the Company's business.

2 unchanged sentences

However, litigation is unpredictable, and the Company could incur judgments or enter into settlements for current or future claims that could adversely affect its business, financial condition, results of operations or cash flows.

The Company had outstanding letters of credit totaling $ 9,501 supporting workers' compensation and general liability insurance policies as of June 26, 2020.

The Company also had surety bonds primarily related to performance guarantees on supply agreements and construction contracts, and payment of duties and taxes totaling $ 18,709 as of June 26, 2020.

The Company had outstanding letters of credit totaling $ 9,501 supporting workers' compensation and general liability insurance policies as of December 25, 2020.

The Company also had surety bonds primarily related to performance guarantees on supply agreements and construction contracts, and payment of duties and taxes totaling $ 15,025 as of December 25, 2020.

In disposing of assets or businesses, the Company often provides representations, warranties and indemnities to cover various risks including unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition.

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SEGMENT INFORMATION

The Company has two operating segments, which are also its reportable segments.

The Company's operating segments are organized based upon primary market channels and, in most instances, the end use of products.

Through its Electrical Raceway segment, the Company manufactures products that deploy, isolate and protect a structure's electrical circuitry from the original power source to the final outlet.

These products, which include electrical conduit, armored cable, cable trays, mounting systems and fittings, are critical components of the electrical infrastructure for maintenance, repair and remodel markets.

The vast majority of the Company's Electrical Raceway net sales are made to electrical distributors, who then serve electrical contractors and the Company considers both to be customers.

Through the MP&S segment, the Company provides products and services that frame, support and secure component parts in a broad range of structures, equipment and systems in electrical, industrial and construction applications.

The Company's principal products in this segment are metal framing products and in-line galvanized mechanical tube.

Through its metal framing business, the Company designs, manufactures and installs metal strut and fittings used to assemble mounting structures that support heavy equipment and electrical content in buildings and other structures.

Effective in the first quarter of fiscal 2021, the Company renamed and redefined its reportable segments.

The Electrical Raceway segment was renamed as the Electrical segment.

The Electrical segment manufactures high quality products used in the construction of electrical power systems including conduit, cable, and installation accessories.

This segment serves contractors in partnership with the electrical wholesale channel .

The Mechanical Products & Solutions segment was renamed as the Safety & Infrastructure segment.

This segment designs and manufactures solutions including metal framing, mechanical pipe, perimeter security, and cable management for the protection and reliability of critical infrastructure.

These solutions are marketed to contractors, original equipment manufacturers and end users.

Effective in the first quarter of fiscal 2021, the Company also implemented the Realignment of its segment financial reporting structure such that its domestic cable management and prefabrication modular businesses are now reflected in its Safety & Infrastructure segment.

These businesses were previously reflected within the Electrical segment.

See Note 1, ''Basis of Presentation and Summary of Significant Accounting Policies'' for additional information.

Prior year results have been revised for the impact of the Realignment for comparability .

Both segments use Adjusted EBITDA as the primary measure of profit and loss.

Segment Adjusted EBITDA is the sum of income (loss) before income taxes, adjusted to exclude unallocated expenses, depreciation and amortization, interest expense, net, restructuring charges, stock-based compensation, certain legal matters, transaction costs and other items, such as inventory reserves and adjustments, loss on disposal of property, plant and equipment, insurance recovery related to damages of property, plant and equipment, release of indemnified uncertain tax positions, and realized or unrealized gain (loss) on foreign currency transactions.

Segment Adjusted EBITDA is income (loss) before income taxes, adjusted to exclude unallocated expenses, depreciation and amortization, interest expense, net, restructuring charges, stock-based compensation, certain legal matters, transaction costs and other items, such as inventory reserves and adjustments, loss on disposal of property, plant and equipment, release of indemnified uncertain tax positions, and realized or unrealized gain (loss) on foreign currency impacts of intercompany loans and related forward currency derivatives.

Intersegment transactions primarily consist of product sales at designated transfer prices on an arm's-length basis.

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Certain assets, such as machinery and equipment and facilities, are not allocated to each segment despite serving both segments.

These shared assets are reported within the MP&S segment.

We allocate certain corporate operating expenses that directly benefit our operating segments, such as insurance and information technology, on a basis that reasonably approximates an estimate of the use of these services.

These shared assets are reported within the Safety & Infrastructure segment.

The Company allocates certain corporate operating expenses that directly benefit our operating segments, such as insurance and information technology, on a basis that reasonably approximates an estimate of the use of these services.

Three months ended

June 26, 2020 June 28, 2019

(in thousands) External Net Sales Intersegment Sales Adjusted EBITDA

External Net Sales Intersegment Sales Adjusted EBITDA

Electrical Raceway $ 285,412 $ 634 $ 57,455 $ 372,895 $ 334 $ 76,721

MP&S 99,487 — 12,243 120,596 — 20,595

Eliminations — ( 634 ) — ( 334 )

Consolidated operations $ 384,899 $ — $ 493,491 $ —

Nine months ended

June 26, 2020 June 28, 2019

(in thousands) External Net Sales Intersegment Sales Adjusted EBITDA

External Net Sales Intersegment Sales Adjusted EBITDA

Electrical Raceway $ 965,205 $ 1,922 $ 206,630 $ 1,069,229 $ 920 $ 212,585

MP&S 322,796 — 45,041 345,599 — 48,903

December 25, 2020 December 27, 2019

(in thousands) External Net Sales Intersegment Sales Adjusted EBITDA External Net Sales Intersegment Sales Adjusted EBITDA

Electrical $ 386,320 $ 825 $ 133,273 $ 323,941 $ 606 $ 68,119

Safety & Infrastructure 124,762 3 $ 14,252 123,507 1 $ 18,727

Eliminations — ( 828 ) — ( 607 )

1 unchanged sentence

Presented below is a reconciliation of operating segment Adjusted EBITDA to Income before income taxes:

Three months ended Nine months ended

(in thousands) June 26, 2020 June 28, 2019 June 26, 2020 June 28, 2019

Three months ended

(in thousands) December 25, 2020 December 27, 2019

Operating segment Adjusted EBITDA

Electrical Raceway $ 57,455 $ 76,721 $ 206,630 $ 212,585

MP&S 12,243 20,595 45,041 48,903

Electrical $ 133,273 $ 68,119

Safety & Infrastructure 14,252 18,727

Total $ 147,525 $ 86,846

Unallocated expenses (a) ( 10,535 ) ( 9,136 )

( 5,975 ) ( 8,835 ) ( 23,232 ) ( 25,890 )

Depreciation and amortization ( 19,044 ) ( 18,730 )

3 unchanged sentences

Transaction costs ( 284 ) ( 51 )

( 984 ) ( 5,371 ) ( 2,317 ) ( 8,213 )

Other (b) 8,142 ( 2,836 )

Income before income taxes $ 112,030 $ 42,130

(a) Represents unallocated selling, general and administrative activities and associated expenses including, in part, executive, legal, finance, human resources, information technology, business development and communications, as well as certain costs and earnings of employee-related benefits plans, such as stock-based compensation and a portion of self-insured medical costs.

(b) Represents other items, such as inventory reserves and adjustments, loss on disposal of property, plant and equipment, insurance recovery related to damages of property, plant and equipment , release of indemnified uncertain tax positions and realized or unrealized gain (loss) on foreign currency transactions..

The Company's net sales by geography were as follows for the nine months ended June 26, 2020 and June 28, 2019:

Three months ended Nine months ended

(in thousands) June 26, 2020 June 28, 2019 June 26, 2020 June 28, 2019

(b) Represents other items, such as inventory reserves and adjustments, loss on disposal of property, plant and equipment, insurance recovery related to damages of property, plant and equipment, release of indemnified uncertain tax positions and realized or unrealized gain (loss) on foreign currency impacts of intercompany loans and related forward currency derivatives.

The Company's net sales by geography were as follows for the three months ended December 25, 2020 and December 27, 2019:

Three months ended

(in thousands) December 25, 2020 December 27, 2019

United States $ 454,764 $ 396,141

3 unchanged sentences

Total $ 511,082 $ 447,448

The table below shows the amount of net sales from external customers for each of the Company's product categories which accounted for 10% or more of consolidated net sales in either period for the nine months ended June 26, 2020 and June 28, 2019:

Three months ended Nine months ended

(in thousands) June 26, 2020 June 28, 2019 June 26, 2020 June 28, 2019

Three months ended

(in thousands) December 25, 2020 December 27, 2019

Metal Electrical Conduit and Fittings $ 124,829 $ 123,842

1 unchanged sentence

PVC Electrical Conduit and Fittings 140,535 72,888

Cable Tray and Cable Ladders 40,759 50,680 142,108 147,592

Other raceway products 7,519 13,217 25,846 39,872

Electrical Raceway 285,412 372,895 965,205 1,069,229

International Cable Management Products 43,213 38,220

Other Electrical products 4,231 5,168

Electrical 386,320 323,941

Mechanical Pipe 65,511 58,331

Metal Framing and Fittings 25,087 29,328 83,620 88,389

Other MP&S products 14,415 27,766 55,166 71,001

MP&S 99,487 120,596 322,796 345,599

Other Safety & Infrastructure products 59,251 65,176

Safety & Infrastructure 124,762 123,507

Net sales $ 511,082 $ 447,448

SUBSEQUENT EVENTS

The Company's collective bargaining agreement in Harvey, Illinois expired in April 2020.

On July 14, 2020, the Company and the United Steelworkers Union reached agreement on the terms of a new collective bargaining agreement which expires in April 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements