What changed in this filing

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Item 1. Financial Statements

2021-04-29 compared with 2021-02-02 · 156 added, 82 removed, 372 unchanged (39% of the section changed)

Financial Statements

ATKORE INTERNATIONAL GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three months ended

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

Three months ended Six months ended

(in thousands, except per share data) Note March 26, 2021 March 27, 2020 March 26, 2021 March 27, 2020

Net sales $ 639,543 $ 455,654 $ 1,150,625 $ 903,102

13 unchanged sentences

See Notes to unaudited condensed consolidated financial statements.

ATKORE INTERNATIONAL GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three months ended

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

Three months ended Six months ended

(in thousands) Note March 26, 2021 March 27, 2020 March 26, 2021 March 27, 2020

Net income $ 124,933 $ 39,193 209,999 $ 73,983

Other comprehensive income, net of tax:

Other comprehensive income (loss), net of tax:

Change in foreign currency translation adjustment ( 818 ) ( 6,229 ) 6,233 ( 1,120 )

Change in unrecognized loss related to pension benefit plans 4 262 226 524 433

Total other comprehensive income 8 7,313 5,316

Total other comprehensive income (loss) 8 ( 556 ) ( 6,003 ) 6,757 ( 687 )

Comprehensive income $ 124,377 $ 33,190 $ 216,756 $ 73,296

See Notes to unaudited condensed consolidated financial statements.

ATKORE INTERNATIONAL GROUP INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(in thousands, except share and per share data) Note March 26, 2021 September 30, 2020

Current Assets:

32 unchanged sentences

Additional paid-in capital 497,250 487,223

Accumulated deficit ( 14,114 ) ( 64,154 )

Retained earnings 110,818 ( 64,154 )

Accumulated other comprehensive loss 8 ( 35,797 ) ( 42,554 )

2 unchanged sentences

See Notes to unaudited condensed consolidated financial statements.

ATKORE INTERNATIONAL GROUP INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended

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

Six months ended

(in thousands) Note March 26, 2021 March 27, 2020

Operating activities:

5 unchanged sentences

Amortization of right-of-use assets 7,025 7,384

Loss on disposal of property, plant and equipment 50 4,560

Other adjustments to net income 918 2,672

18 unchanged sentences

Effects of foreign exchange rate changes on cash and cash equivalents 3,091 ( 967 )

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

Increase in cash and cash equivalents 19,998 13,787

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

3 unchanged sentences

See Notes to unaudited condensed consolidated financial statements.

ATKORE INTERNATIONAL GROUP INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

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

Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Equity

(in thousands) Shares Amount Amount

6 unchanged sentences

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

Net income — — — — 124,933 — 124,933

Other comprehensive income — — — — — ( 556 ) ( 556 )

Stock-based compensation — — — 4,868 — — 4,868

Issuance of common stock, net of shares withheld for tax 358 4 — 3,566 — — 3,570

Balance as of March 26, 2021 46,983 $ 471 $ ( 2,580 ) $ 497,249 $ 110,819 $ ( 35,797 ) $ 570,162

Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Equity

(in thousands) Shares Amount Amount

6 unchanged sentences

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 income — — — — — ( 6,003 ) ( 6,003 )

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

Issuance of common stock, net of shares withheld for tax 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

See Notes to unaudited condensed consolidated financial statements.

ATKORE INTERNATIONAL GROUP INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

Basis of Presentation

Organization and Ownership Structure — Atkore International Group Inc.

(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.

Organization and Ownership Structure — Atkore Inc.

(the "Company", "Atkore" or "AI") 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 under the name Atkore International Group, Inc.

Atkore is the sole stockholder of Atkore International Holdings Inc.

55 unchanged sentences

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.

4 unchanged sentences

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.

On October 22, 2020, the Company acquired Queen City Plastics, Inc.

("Queen City Plastics"), a leading manufacturer of PVC conduit, elbows and fittings for the electrical market.

The purchase price was allocated to tangible assets acquired and liabilities assumed based on their fair values for which the purchase accounting has been finalized.

The purchase price of $ 6.2 million was deemed immaterial to the Company.

On February 24, 2021, the Company acquired FRE Composites Group, a leading manufacturer of fiberglass conduit for the electrical and industrial market.

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

As of March 26, 2021, the purchase price allocation has not been finalized as the Company is refining its fair value estimates for working capital, fixed assets and intangible assets.

The preliminary purchase price was $ 37.1 million.

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

(in thousands)

Fair value of consideration transferred:

Cash consideration 37,060

Fair value of assets acquired and liabilities assumed:

Accounts receivable 2,163

Inventories 4,311

Intangible assets 17,900

Fixed assets 9,968

Accounts payable ( 1,186 )

Income taxes ( 5,054 )

Other ( 465 )

Net assets acquired 27,637

Excess purchase price attributed to goodwill acquired $ 9,423

The Company estimates $ 1.7 million of the goodwill is deductible for tax purposes.

Goodwill recognized from this acquisition consists largely of the synergies and economies of scale from integrating this company with existing businesses.

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

FRE Composites Group

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

Customer relationships $ 14,500 11

Other 3,400 6

Total intangible assets $ 17,900

Net sales and net income of both the above acquisitions are included in the condensed consolidated statement of operations for the post-acquisition periods.

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.

POSTRETIREMENT BENEFITS

2 unchanged sentences

The net periodic benefit credit was as follows:

Three months ended

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

Three months ended Six months ended

(in thousands) Note March 26, 2021 March 27, 2020 March 26, 2021 March 27, 2020

Interest cost $ 682 $ 935 $ 1,364 $ 1,870

4 unchanged sentences

Other income, net consisted of the following:

Three months ended

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

Three months ended Six months ended

(in thousands) March 26, 2021 March 27, 2020 March 26, 2021 March 27, 2020

Business interruption insurance recovery $ ( 6,000 ) $ — $ ( 6,000 ) $ —

Undesignated foreign currency derivative instruments 793 ( 3,666 ) 3,410 ( 543 )

1 unchanged sentence

Pension-related benefits ( 591 ) ( 426 ) ( 1,182 ) ( 852 )

Gain on purchase of business ( 731 ) — ( 731 ) —

Other income, net $ ( 7,240 ) $ ( 1,685 ) $ ( 7,671 ) $ ( 1,919 )

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.

For the three months ended March 26, 2021 and March 27, 2020, the Company's effective tax rate attributable to income before income taxes was 23.5 % and 25.1 %, respectively.

For the three months ended March 26, 2021 and March 27, 2020, the Company's income tax expense was $ 38,304 and $ 13,100 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.

For the six months ended March 26, 2021 and March 27, 2020, the Company's effective tax rate attributable to income before income taxes was 23.7 % and 21.6 %, respectively.

For the six months ended March 26, 2021 and March 27, 2020, the Company's tax expense was $ 65,268 and $ 20,440 , respectively.

The increase in the six month period effective tax rate was primarily due to a smaller increase in the net discrete tax benefit compared to the increase in earnings period over period.

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

4 unchanged sentences

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

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.

During the six months ended March 26, 2021, the balance of unrecognized tax benefits decreased by an immaterial amount due to the change in reserves for state audit items.

For the six months ended March 26, 2021, 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.

6 unchanged sentences

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

Three months ended

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

Three months ended Six months ended

(in thousands, except per share data) March 26, 2021 March 27, 2020 March 26, 2021 March 27, 2020

Net income $ 124,933 $ 39,193 $ 209,999 $ 73,983

4 unchanged sentences

Non-participating employee stock options (1)

744 691 728 961

Diluted weighted average common shares outstanding 47,547 48,095 47,586 48,229

1 unchanged sentence

Diluted earnings per share $ 2.58 $ 0.80 $ 4.33 $ 1.50

(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.

(1) Stock options to purchase approximately 0.0 million and 0.3 million shares of common stock were outstanding during the three months ended March 26, 2021 and March 27, 2020, 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 0.0 million and 0.1 million shares of common stock were outstanding during the six months ended March 26, 2021 and March 27, 2020, 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 December 25, 2020 and December 27, 2019.

The following table presents the changes in accumulated other comprehensive loss by component for the three months ended March 26, 2021 and March 27, 2020.

(in thousands) Defined benefit

1 unchanged sentence

adjustments Total

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

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

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

Other comprehensive loss before reclassifications — ( 818 ) ( 818 )

Amounts reclassified from accumulated other

comprehensive loss, net of tax 262 — 262

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

Net current period other comprehensive income (loss) 262 ( 818 ) ( 556 )

Balance as of March 26, 2021 $ ( 30,237 ) $ ( 5,560 ) $ ( 35,797 )

(in thousands) Defined benefit

pension items Currency

adjustments Total

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

Other comprehensive loss before reclassifications — ( 6,229 ) ( 6,229 )

Amounts reclassified from accumulated other

comprehensive loss, net of tax 226 — 226

Net current period other comprehensive income (loss) 226 ( 6,229 ) ( 6,003 )

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

The following table presents the changes in accumulated other comprehensive loss by component for the six months ended March 26, 2021 and March 27, 2020.

(in thousands) Defined benefit

6 unchanged sentences

Net current period other comprehensive income 524 6,233 6,757

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

Balance as of March 26, 2021 $ ( 30,237 ) $ ( 5,560 ) $ ( 35,797 )

(in thousands) Defined benefit

pension items Currency

adjustments Total

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

Other comprehensive loss before reclassifications — ( 1,120 ) ( 1,120 )

Amounts reclassified from accumulated other

comprehensive loss, net of tax 433 — 433

Net current period other comprehensive income (loss) 433 ( 1,120 ) ( 687 )

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

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 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

Approximately 77 % and 73 % of the Company's inventories were valued at the lower of LIFO cost or market at March 26, 2021 and September 30, 2020, respectively.

Interim LIFO determinations, including those at March 26, 2021, are based on management's estimates of future inventory levels and costs for the remainder of the current fiscal year.

(in thousands) March 26, 2021 September 30, 2020

Purchased materials and manufactured parts, net $ 58,536 $ 49,192

2 unchanged sentences

Inventories, net $ 237,892 $ 199,095

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.

Total inventories would be $ 32,550 higher and $ 4,418 lower than reported as of March 26, 2021 and September 30, 2020, respectively, if the first-in, first-out method was used for all inventories.

As of March 26, 2021, and September 30, 2020, the excess and obsolete inventory reserve was $ 13,762 and $ 14,533 , respectively.

PROPERTY, PLANT AND EQUIPMENT

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

As of March 26, 2021, and September 30, 2020, property, plant and equipment and accumulated depreciation were as follows:

(in thousands) March 26, 2021 September 30, 2020

Land $ 23,170 $ 20,460

4 unchanged sentences

Construction in progress 18,846 22,736

Property, plant and equipment 552,803 541,884

Property, plant and equipment, at cost 574,621 541,884

Accumulated depreciation ( 318,405 ) ( 297,993 )

Property, plant and equipment, net $ 256,216 $ 243,891

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

Depreciation expense for the three months ended March 26, 2021 and March 27, 2020 totaled $ 11,170 and $ 10,407 respectively.

Depreciation expense for the six months ended March 26, 2021 and March 27, 2020 totaled $ 21,953 and $ 21,024 , respectively.

GOODWILL AND INTANGIBLE ASSETS

2 unchanged sentences

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

Goodwill acquired during year 9,423 — 9,423

Exchange rate effects 1,851 — 1,851

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.

Balance as of March 26, 2021 $ 155,936 $ 43,577 $ 199,513

Goodwill balances as of October 1, 2020 and March 26, 2021 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:

December 25, 2020 September 30, 2020

March 26, 2021 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

7 unchanged sentences

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

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

Amortization expense for the three months ended March 26, 2021 and March 27, 2020 was $ 8,096 and $ 8,071 , respectively.

Amortization expense for the six months ended March 26, 2021 and March 27, 2020 was $ 16,356 and $ 16,184 , respectively.

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

3 unchanged sentences

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

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

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

Debt as of March 26, 2021 and September 30, 2020 was as follows:

(in thousands) March 26, 2021 September 30, 2020

First Lien Term Loan Facility due December 22, 2023 $ 771,629 $ 811,540

7 unchanged sentences

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.

AII's availability under the ABL Credit Facility was $ 315,499 and $ 265,899 as of March 26, 2021 and September 30, 2020, respectively.

FAIR VALUE MEASUREMENTS

5 unchanged sentences

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

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.

The total notional amounts of undesignated forward currency contracts were £ 36.1 million and £ 43.3 million as of March 26, 2021 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:

December 25, 2020 September 30, 2020

March 26, 2021 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:

December 25, 2020 September 30, 2020

March 26, 2021 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 December 25, 2020, such obligations were $ 267,331 for the rest of fiscal year 2021 and $ 9,710 for fiscal year 2022 and beyond.

As of March 26, 2021, such obligations were $ 293,136 for the rest of fiscal year 2021 and $ 10,905 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 $ 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 .

The Company's total product liability reserves for Special Products Claims and other product liability matters were $ 682 and $ 597 as of March 26, 2021 and September 30, 2020, respectively.

As of March 26, 2021, 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.

5 unchanged sentences

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 year ended September 30, 2020, one of the Company’s manufacturing facilities experienced a flood which resulted in damage 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 recorded an expense of $ 6,046 for losses related to fully written off property, plant and equipment, with a related insurance recovery of $ 5,046 within selling, general and administrative expenses in its consolidated statements of operations for the year ended September 30, 2020.

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.

During the three months ended March 26, 2021, the Company received $ 6,000 of business interruption insurance recovery proceeds related to this incident.

The amount was recorded as other income within the condensed consolidated statements of operations for the three and six months ended March 26, 2021.

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.

1 unchanged sentence

On the basis of information currently available to the Company, it does not believe that existing proceedings and claims will have a material adverse effect on its business, financial condition, results of operations or cash flows.

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 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.

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 March 26, 2021.

The Company also had surety bonds primarily related to performance guarantees on supply agreements and construction contracts, and payment of duties and taxes totaling $ 15,675 as of March 26, 2021.

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.

16 unchanged sentences

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

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.

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, 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.

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

6 unchanged sentences

Three months ended

December 25, 2020 December 27, 2019

March 26, 2021 March 27, 2020

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

3 unchanged sentences

Consolidated operations $ 639,543 $ — $ 455,654 $ —

Six months ended

March 26, 2021 March 27, 2020

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

Electrical $ 873,244 $ 1,401 $ 322,099 $ 646,464 $ 1,301 $ 145,352

Safety & Infrastructure 277,381 84 30,445 256,638 — 36,615

Eliminations — ( 1,485 ) — ( 1,301 )

Consolidated operations $ 1,150,625 $ — $ 903,102 $ —

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

Three months ended

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

Three months ended Six months ended

(in thousands) March 26, 2021 March 27, 2020 March 26, 2021 March 27, 2020

Operating segment Adjusted EBITDA

5 unchanged sentences

Interest expense, net ( 8,416 ) ( 10,564 ) ( 16,670 ) ( 21,184 )

Restructuring charges 2 ( 220 )

Stock-based compensation ( 4,868 ) ( 4,523 ) ( 10,390 ) ( 7,646 )

Transaction costs ( 284 ) ( 51 )

Other (b) 2,421 ( 1,148 ) 10,281 ( 4,255 )

1 unchanged sentence

(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 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

(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, realized or unrealized gain (loss) on foreign currency impacts of intercompany loans and related forward currency derivatives, gain on purchase of business, restructuring costs and transaction costs.

The Company's net sales by geography were as follows for the six months ended March 26, 2021 and March 27, 2020:

Three months ended Six months ended

(in thousands) March 26, 2021 March 27, 2020 March 26, 2021 March 27, 2020

United States $ 572,427 $ 401,055 1,027,191 $ 797,195

3 unchanged sentences

Total $ 639,543 $ 455,654 $ 1,150,625 $ 903,102

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 three months ended December 25, 2020 and December 27, 2019:

Three months ended

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

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 six months ended March 26, 2021 and March 27, 2020:

Three months ended Six months ended

(in thousands) March 26, 2021 March 27, 2020 March 26, 2021 March 27, 2020

Metal Electrical Conduit and Fittings $ 148,405 $ 125,610 $ 273,234 $ 249,451

9 unchanged sentences

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