What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2021-11-18 compared with 2020-11-19 · 403 added, 533 removed, 720 unchanged (57% of the section changed)

1 unchanged sentence

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Atkore International Group Inc.

To the shareholders and the Board of Directors of Atkore Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Atkore International Group Inc.

and subsidiaries (the "Company") as of September 30, 2020 and 2019, the related consolidated statements of operations, comprehensive income, cash flows, and shareholders' equity, for each of the three years in the period ended September 30, 2020, and the related notes and the schedules listed in the Index at Part IV, Item 15 (collectively referred to as the "financial statements").

We have audited the accompanying consolidated balance sheets of Atkore Inc.

(formerly Atkore International Group Inc.) and subsidiaries (the “Company”) as of September 30, 2021 and 2020, the related consolidated statements of operations, comprehensive income, cash flows, and shareholders’ equity, for each of the three years in the period ended September 30, 2021, and the related notes and the schedules listed in the Index at Part IV, Item 15 (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2021, in conformity with accounting principles generally accepted in the United States of America.

5 unchanged sentences

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

11 unchanged sentences

The Company’s goodwill balance was $199.0 million as of September 30, 2021.

The Company considers three valuation approaches:

The Company considers three

valuation approaches:

(a) the income approach;

(b) the guideline public company method;

and (c) the comparable transaction

method to estimate the fair value of its reporting units.

and (c) the comparable transaction method to estimate the fair value of its reporting units.

With respect to the income approach, management makes significant estimates and assumptions related to forecasts of future cash flows, including revenue growth, earnings before interest, income taxes, depreciation, and amortization (EBITDA) margins, and discount rates.

The fair value of all reporting units exceeded their respective carrying values and, therefore, no impairment was recognized for the year ended September 30, 2021.

We identified goodwill for the Company’s Europe, Middle East, and Africa reporting unit as a critical audit matter because the excess fair value over carrying value is low and minor changes to management’s estimates and assumptions could result in an impairment being recognized.

We identified goodwill for the Company’s Europe, Middle East, and Africa reporting unit as a critical audit matter because the excess fair value over carrying value is low in relation to the Company’s other reporting units and changes to management’s estimates and assumptions could result in an impairment being recognized.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to forecasts of revenue growth, EBITDA margins, and the selection of the discount rate.

1 unchanged sentence

Our audit procedures related to the forecasts of revenue growth and EBITDA margins (“forecasts”), and the selection of the discount rate for this reporting unit included the following, among others:

· We tested the design and operating effectiveness of controls over the annual and interim goodwill impairment assessments, including those over the forecasts and the selection of the discount rate.

· We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical forecasts.

• We tested the design and operating effectiveness of controls over the annual goodwill impairment assessment, including those over the forecasts and the selection of the discount rate.

• We performed inquiries of the Company’s executives and those outside of the accounting and finance functions to evaluate the forecasts.

• We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical forecasts.

• We evaluated the reasonableness of management’s forecasts by comparing the forecasts to:

2 unchanged sentences

– Industry reports.

· With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology and (2) discount rate by:

· Evaluating whether the fair value models being used are appropriate considering the Company’s circumstances and valuation premise identified.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the discount rate by:

– Testing the source information and the mathematical accuracy of the calculations underlying the determination of the discount rate and developing a range of independent estimates and comparing those to the discount rate selected by management.

3 unchanged sentences

We have served as the Company’s auditor since 2011.

ATKORE INTERNATIONAL GROUP INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Fiscal Year Ended

(in thousands, except per share data)

September 30, 2020

September 30, 2019

September 30, 2018

(in thousands, except per share data) Note September 30, 2021 September 30, 2020 September 30, 2019

Net sales $ 2,928,014 $ 1,765,421 $ 1,916,538

Cost of sales 1,802,401 1,274,107 1,419,338

Gross profit 1,125,613 491,314 497,200

Selling, general and administrative 293,019 219,496 240,660

6 unchanged sentences

Income tax expense 7 192,144 49,696 45,618

Net income $ 587,857 $ 152,302 $ 139,051

Net income per share

Basic 8 $ 12.38 $ 3.15 $ 2.91

Diluted 8 $ 12.19 $ 3.10 $ 2.83

See Notes to Consolidated Financial Statements

ATKORE INTERNATIONAL GROUP INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Fiscal Year Ended

(in thousands)

September 30, 2020

September 30, 2019

September 30, 2018

(in thousands) Note September 30, 2021 September 30, 2020 September 30, 2019

Net income $ 587,857 $ 152,302 $ 139,051

Other comprehensive income, net of tax:

Change in foreign currency translation adjustment 2,385 6,087 ( 7,490 )

3 unchanged sentences

See Notes to Consolidated Financial Statements

ATKORE INTERNATIONAL GROUP INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

September 30, 2020

September 30, 2019

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

Current Assets:

Cash and cash equivalents $ 576,289 $ 284,471

Accounts receivable, less allowance for doubtful accounts of $3,168 and $2,608, respectively

Accounts receivable, less allowance for current and expected credit losses of $ 2,510 and $ 3,168 , respectively

524,926 298,242

Inventories, net 10 285,989 199,095

3 unchanged sentences

Intangible assets, net 12 241,204 255,349

Goodwill 12 199,048 188,239

Right-of-use assets, net 2 41,113 38,692

1 unchanged sentence

Other long-term assets 1,967 2,991

Total Assets $ 2,210,099 $ 1,558,525

Liabilities and Equity

16 unchanged sentences

Treasury stock, held at cost, 260,900 and 260,900 shares, respectively

( 2,580 ) ( 2,580 )

Additional paid-in capital 506,921 487,223

Accumulated deficit

Retained earnings 388,660 ( 64,154 )

Accumulated other comprehensive loss 9 ( 28,726 ) ( 42,554 )

Total Equity 864,736 378,410

Total Liabilities and Equity $ 2,210,099 $ 1,558,525

See Notes to Consolidated Financial Statements

ATKORE INTERNATIONAL GROUP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Fiscal year ended

(in thousands)

September 30, 2020

September 30, 2019

September 30, 2018

(in thousands) Note September 30, 2021 September 30, 2020 September 30, 2019

Operating activities

Net income $ 587,857 $ 152,302 $ 139,051

Adjustments to reconcile net income to net cash provided by operating activities

Gain on sale of a business

Depreciation and amortization 78,557 74,470 72,347

10 unchanged sentences

Accounts receivable ( 219,659 ) 16,920 6,026

Inventories ( 81,544 ) 24,642 9,002

Prepaid expenses and other current assets ( 6,462 ) ( 11,164 ) ( 3,054 )

Accounts payable 98,444 ( 5,835 ) ( 21,981 )

Income taxes 80,291 ( 6,261 ) 4,511

Accrued and other liabilities 63,459 ( 32,942 ) ( 2,782 )

Other, net ( 23,433 ) ( 5,040 ) ( 1,566 )

Net cash provided by operating activities 572,902 248,762 209,694

3 unchanged sentences

Proceeds from sale of properties, plant and equipment 81 3,920 80

Proceeds from divestiture of business

Acquisitions of businesses, net of cash acquired 3 ( 43,195 ) — ( 97,999 )

Net cash (used for) provided by investing activities

Other, net — — ( 322 )

Net cash used for investing activities ( 97,961 ) ( 27,513 ) ( 133,101 )

Financing activities

6 unchanged sentences

Repurchase of common stock ( 135,066 ) ( 15,011 ) ( 24,419 )

Fiscal year ended

(in thousands)

September 30, 2020

September 30, 2019

September 30, 2018

Payments for debt financing costs and fees 13 ( 10,930 ) ( 3,204 ) —

Other, net — 8 ( 155 )

Net cash used for financing activities ( 184,456 ) ( 61,179 ) ( 78,180 )

Fiscal year ended

(in thousands) Note September 30, 2021 September 30, 2020 September 30, 2019

Effects of foreign exchange rate changes on cash and cash equivalents 1,333 986 ( 1,660 )

6 unchanged sentences

Capital expenditures, not yet paid 1,094 1,278 3,719

Operating cash flows from cash paid on operating lease liabilities 13,035 12,939 —

Operating lease right-of-use assets obtained in exchange for lease liabilities 13,538 15,278 —

See Notes to Consolidated Financial Statements

ATKORE INTERNATIONAL GROUP INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the three year period ended September 30, 2021

Treasury Stock

Additional Paid-in Capital

Accumulated Deficit

Accumulated Other Comprehensive Income (Loss)

(in thousands)

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

(in thousands) Shares Amount Amount

Balance as of September 30, 2018 47,080 $ 472 $ ( 2,580 ) $ 457,978 $ ( 317,373 ) $ ( 16,438 ) $ 122,059

Other comprehensive income

Net income — — — — 139,051 — 139,051

Other comprehensive loss — — — — — $ ( 22,927 ) ( 22,927 )

Reclassification of stranded tax benefits (1)

2,333 ( 2,333 ) —

Stock-based compensation — — — 11,798 — — 11,798

Issuance of common stock

Issuance of common stock, net of shares withheld for tax 1,105 11 — 7,363 — — 7,374

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

Balance as of September 30, 2019 46,955 471 ( 2,580 ) 477,139 ( 200,396 ) ( 41,698 ) 232,936

Other comprehensive income

Reclassification of stranded tax benefits (1)

Net income — — — — 152,302 — 152,302

Other comprehensive loss — — — — — ( 856 ) ( 856 )

ASU 2016-02 modified retrospective adoption — — — — ( 1,053 ) — ( 1,053 )

Stock-based compensation — — — 13,064 — — 13,064

Issuance of common stock

Issuance of common stock, net of shares withheld for tax 846 8 — ( 2,980 ) — — ( 2,972 )

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

Balance as of September 30, 2020 47,407 475 ( 2,580 ) 487,223 ( 64,154 ) ( 42,554 ) 378,410

Net income — — — — 587,857 — 587,857

Other comprehensive loss — — — — — 13,828 13,828

ASU 2016-2 modified retrospective adoption

Stock-based compensation — — — 17,047 — — 17,047

Issuance of common stock

Issuance of common stock, net of shares withheld for tax 918 9 — 2,651 — — 2,660

Repurchase of common stock ( 2,328 ) ( 23 ) — — ( 135,043 ) — ( 135,066 )

2 unchanged sentences

See Notes to Consolidated Financial Statements

ATKORE INTERNATIONAL GROUP INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

Basis of presentation

Organization and Ownership Structure — Atkore International Group Inc.

(the "Company" or "Atkore") 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 was incorporated in the State of Delaware on November 4, 2010.

Organization and Ownership Structure — Atkore Inc.

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

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

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

The Company 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.

1 unchanged sentence

Holders of common stock are entitled to cast one vote for each share held of record on all matters submitted to a vote of the stockholders.

Additionally, holders of common stock are entitled to receive, on a pro rata basis, dividends and distributions, if any, that the Company’s board of directors may declare out of legally available funds, subject to preferences that may be applicable to preferred stock, if any.

Share Repurchase Program — In August 2017, the Company's board of directors approved a share repurchase program, under which the Company may repurchase up to an aggregate amount of $ 75.0 million of its outstanding stock.

As of December 28, 2018, there were no authorized repurchases remaining under the August 2017 repurchase program.

On February 5, 2019, the board of directors approved a share repurchase program, under which the Company may repurchase up to $ 50.0 million of its outstanding common stock.

As of September 30, 2020, there were $ 35.0 million of authorized repurchases remaining.

Share Repurchase Program — On February 5, 2019, the board of directors approved a share repurchase program, under which the Company may repurchase up to $ 50.0 million of its outstanding common stock.

As of December 25, 2020, there were no authorized repurchases remaining on that program.

On January 28, 2021, the board of directors approved a share repurchase program, under which the Company may repurchase up to $ 100.0 million of its outstanding common stock.

As of September 30, 2021, there were no authorized repurchases remaining.

On November 16, 2021, the board of directors approved a share repurchase program, under which the Company may repurchase up to $ 400 million of its outstanding common stock.

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 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 17, “Segment Information” for additional details.

Basis of Presentation — The accompanying audited consolidated financial statements of the Company and all of its subsidiaries included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

11 unchanged sentences

The Company has certain arrangements that require it to estimate at the time of sale the amounts of variable consideration that should not be recorded as revenue as certain amounts are not expected to be collected from customers, as well as an estimate of the value of products to be returned.

The Company principally relies on historical experience, specific

customer agreements, and anticipated future trends to estimate these amounts at the time of sale and to reduce the transaction price.

The Company principally relies on historical experience, specific customer agreements, and anticipated future trends to estimate these amounts at the time of sale and to reduce the transaction price.

These arrangements include sales discounts and allowances, volume rebates, and returned goods.

12 unchanged sentences

Cash and Cash Equivalents — The Company considers all highly liquid investments with a maturity of three months or less, when purchased, to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts — The Company carries its accounts receivable at their face amounts less an allowance for doubtful accounts.

The allowance for doubtful accounts receivable reflects the best estimate of losses inherent in the Company's accounts receivable portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other available evidence.

Accounts Receivable and Allowance for current and expected credit losses — The Company carries its accounts receivable at their face amounts less an allowance for current and expected credit losses.

The allowance for current and expected credit losses reflects the best estimate of current and expected losses inherent in the Company’s accounts receivable

portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other available evidence.

Inventories — Inventories are recorded at the lower of cost (primarily LIFO) or market value.

4 unchanged sentences

Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets as follows:

4 to 40 years

Building improvements

3 to 20 years

Machinery and equipment

1 to 20 years

Leasehold improvements

Lesser of remaining term of the lease or useful life

2 to 10 years

Buildings 4 to 40 years

Building improvements 3 to 20 years

Machinery and equipment 1 to 20 years

Leasehold improvements Lesser of remaining term of the lease or useful life

Software 2 to 10 years

The internal and external costs incurred to develop internal use computer software during the application development stage of the implementation, including the design of the chosen path, are capitalized.

2 unchanged sentences

Upgrades and enhancements to internal use software are capitalized only if the costs result in additional functionality.

The Company does not plan to sell or market our internal use computer software to third parties.

The Company does not plan to sell or market its internal use computer software to third parties.

Long-Lived Asset and Finite - Lived Intangible Asset Impairments — The Company reviews long-lived assets, including property, plant and equipment and finite-lived intangible assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable.

14 unchanged sentences

The Company can elect to perform a quantitative or qualitative test of impairment.

For fiscal 2020, 2019 and 2018 Company performed a quantitative impairment assessment for goodwill.

Additionally, 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 interim goodwill impairment test as of that date.

For fiscal 2021, 2020 and 2019 the Company performed a quantitative impairment assessment for goodwill.

The Company calculated the fair value of its six reporting units considering three valuation approaches:

3 unchanged sentences

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 each reporting unit.

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 each 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.

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

8 unchanged sentences

The royalty rate used in the analysis is based on an analysis of empirical, market-derived royalty rates for guideline intangible assets.

The net after tax cost savings are discounted using the Discount

The net after tax cost savings are discounted using the Discount Rate.

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 indefinite lived intangible assets' forecasted performance.

21 unchanged sentences

See Note 7, “Income Taxes.”

Leases — For fiscal 2019 and 2018, under ASC 840, all leases that are determined not to meet any of the capital lease criteria are classified as operating leases.

Operating lease payments are recognized as an expense in the statement of operations on a straight-line basis over the lease term.

For fiscal 2020, as a result of the adoption of ASC 842, the Company recognizes if an arrangement is a lease at the inception of the contract.

On December 22, 2017, “H.R.1,” also known as the Tax Cuts and Jobs Act (“TCJA”) was signed into law.

As part of the enactment of TCJA, the Company recorded a global intangible low-taxed income (“GILTI”) provision for the first time beginning in fiscal 2019.

The GILTI provision of TCJA requires certain income earned by controlled foreign corporations (“CFCs”) to be included currently in the gross income of the CFCs controlling U.S.

In accordance with accounting standards applicable to income taxes, there is allowed an accounting policy choice of either (1) treating taxes due on U.S.

inclusions in taxable income related to GILTI as a current period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company’s measurement of its deferred taxes (the “deferred method”).

The Company has elected the period method.

Leases — Starting in fiscal 2020, as a result of the adoption of ASC 842 “Leases,” the Company recognizes if an arrangement is a lease at the inception of the contract.

The Company determines which party has the right to control an asset during the contract term and recognizes a Right of Use (“ROU”) asset and lease obligations based on the present value of the future minimum lease payments over the term of the lease.

Refer to Note 2 for further discussion of the Company’s accounting policy for leases.

Refer to Note 2, “Leases” for further discussion of the Company’s accounting policy for leases.

Translation of Foreign Currency — For the Company's non-U.S.

subsidiaries that report in a functional currency other than United States dollars, assets and liabilities are translated into United States dollars using year-end exchange rates.

Revenue and expenses are translated at the monthly average exchange rates in effect during the fiscal year.

subsidiaries that report in a functional currency other than United States dollars, assets and liabilities are translated into United States dollars using period end exchange rates.

Revenue and expenses are translated at the monthly average exchange rates in effect during the reporting period.

Foreign currency translation adjustments are included as a component of accumulated other comprehensive loss within the consolidated statements of comprehensive income.

3 unchanged sentences

Adopted Guidance

Description of ASU

Impact to Atkore

Adoption Date

2016-02 Leases (Topic 842)

The 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.

2018-14 Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans

The ASU amends ASC 715 to add, remove and clarify disclosure requirements related to defined benefit pension and other postretirement plans.

The Company elected to adopt the guidance early in the quarter ended September 30, 2020.

There was no material impact to the consolidated financial statements as a result of the adoption of ASU 2018-14.

See Note 5, "Post Retirement Benefits" for further detail.

A summary of guidance not yet adopted are as follows:

Guidance not yet adopted

Description of ASU

Impact to Atkore

Effective Date

2016-13 Financial Instruments - Credit Losses (Topic 326)

The ASU adds to U.S.

GAAP an impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses.

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.

1 unchanged sentence

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

The Company implemented the appropriate changes to business processes and controls to support recognition and disclosure under the new standard.

2019-12, Simplifying the accounting for income taxes (Topics 740)

A summary of guidance not yet adopted are as follows:

Guidance not yet adopted

ASU Description of ASU Impact to Atkore Effective Date

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 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.

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.

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 consolidated balance sheets.

Beginning on October 1, 2019, our 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 ROU assets 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 consolidated balance sheets.

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

The Company will adopt the new standard on October 1, 2021.

The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements.

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

9 unchanged sentences

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.

Per ASC 842 “Leases,” 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.

3 unchanged sentences

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

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

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

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)

September 30, 2020

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

Operating lease assets $ 38,569 $ 37,666

Finance lease assets 4,966 2,999

Total right-of-use assets, gross

Right-of-use assets, at cost $ 43,535 $ 40,665

accumulated amortization ( 2,422 ) ( 1,973 )

3 unchanged sentences

Current portion of finance lease liabilities 912 430

Lease obligations

Current lease obligations $ 11,785 $ 15,786

Noncurrent liabilities:

3 unchanged sentences

Total lease obligations $ 42,021 $ 39,929

The following table summarizes lease costs by type of cost for the fiscal year ended September 30, 2020 .

In the consolidated statements of operations, cost of sales and selling, general and administrative expenses included lease costs of $ 14,295 and $ 2,714 respectively.

(in thousands)

Fiscal year ended September 30, 2020

Consolidated Statement of Operations Classification

The following table summarizes lease costs by type of cost for the fiscal year ended September 30, 2021, and the fiscal year ended September 30, 2020.

In the consolidated statements of operations, cost of sales and selling, general and administrative expenses included lease costs of $ 14,536 and $ 2,781 for the fiscal year ended September 30, 2021 and $ 14,295 and $ 2,714 for the fiscal year end September 30, 2020.

Fiscal year ended

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

Amortization of right-of-use assets $ 14,515 $ 14,803

4 unchanged sentences

Maturity of Lease Liabilities

The Company's maturity analysis of its lease liabilities as of fiscal year ended September 30, 2020 is as follows:

(in thousands)

Financing Leases

Operating Leases

The Company's maturity analysis of its lease liabilities as of September 30, 2021 is as follows:

(in thousands) Financing Leases Operating Leases

2022 $ 951 $ 12,047

2023 874 9,094

2024 565 7,393

2025 257 4,879

2026 157 3,127

2027 and after 8 6,957

Total lease payments $ 2,812 $ 43,497

Interest ( 98 ) ( 4,190 )

Present value of lease liabilities $ 2,714 $ 39,307

Total rental expense on all operating leases was $ 17,077 and $ 17,403 in fiscal 2019 , and 2018 , respectively.

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:

2025 and thereafter

Lease Term and Discount Rate

Fiscal year ended September 30, 2020

Fiscal year ended

September 30, 2021 September 30, 2020

Weighted-average remaining lease term (years)

4 unchanged sentences

Finance leases 2.5 % 3.1 %

Other Information

(in thousands)

Fiscal year ended September 30, 2020

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases

Operating cash flows from finance leases

Financing cash flows from finance leases

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

The Company had no acquisitions in the year ended September 30, 2020.

The Company had no acquisitions in fiscal 2020.

On February 24, 2021, Atkore Southwest, LLC, a wholly-owned subsidiary of the Company acquired the assets of FRE Composites USA Inc.

and separately the Company acquired all of the outstanding stock of FRE Composites Inc., collectively described as FRE Composites Group (“FRE Composites”), for a purchase price of $ 36,993 , net of cash received.

FRE Composites is 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.

On October 22, 2020, Atkore Plastics Southeast, LLC, a wholly-owned subsidiary of the Company acquired the assets of 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.

The purchase price of $ 6,214 was deemed immaterial to the Company.

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 .

1 unchanged sentence

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.

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

Net sales and net income of the acquired company included in the consolidated statement of operations for fiscal 2019 were insignificant.

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.

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 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.

The Company incurred approximately $ 1,140 for acquisition related expenses for its 2019 acquisitions, which were recorded in selling, general, and administrative expenses.

All the above acquisitions were funded with cash on hand.

On January 8, 2018, AFC Cable Systems, Inc., a wholly-owned subsidiary of the Company, acquired the assets of Communications Integrators, Inc.

("Cii"), a manufacturer of modular, prefabricated power, voice and data distribution systems located in Tempe, Arizona for a total purchase price, including contingent consideration, of $ 3,997 .

The Cii acquisition complements Atkore's existing modular and prewired products within the Electrical Raceway segment.

Purchase Price Allocations

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

The following section provides purchase price allocation disclosures and other financial disclosures for significant acquisitions for the applicable fiscal years.

The purchase price for FRE Composites, which was finalized during the fourth quarter of fiscal 2021, 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 2021:

(in thousands)

(in thousands) FRE Composites

Fair value of consideration transferred:

Cash consideration $ 36,993

Fair value of assets acquired and liabilities assumed:

Accounts receivable 2,163

Inventories 3,355

Intangible assets 18,300

Fixed assets 8,509

Accounts payable ( 1,186 )

Income Taxes ( 4,293 )

Other ( 240 )

Net assets acquired 27,045

Excess purchase price attributed to goodwill acquired $ 9,948

The Company estimates $ 1.6 million of the goodwill recognized from the FRE Composites acquisition is deductible for tax purposes.

The goodwill 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

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

Customer relationships $ 14,700 12.0

Other 3,600 6.0

Total intangible assets $ 18,300

Net sales and net income of FRE Composites and Queen City Plastics are included in the consolidated statement of operations for fiscal 2021 for the post-acquisition period.

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.

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

1 unchanged sentence

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

3 unchanged sentences

The goodwill consists largely of the synergies and economies of scale from integrating these companies with existing businesses.

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

($ in thousands)

Weighted Average Useful Life (Years)

The following table summarizes the fair value of intangible assets acquired in fiscal 2019 as of the acquisition dates:

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

Net sales and net income of the companies acquired during fiscal 2019 and 2018 are included in the consolidated statement of operations for fiscal 2019 and fiscal 2018 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.

On March 30, 2018, the Company sold the assets of FlexHead Industries, Inc.

and SprinkFLEX, LLC (together "Flexhead").

The Flexhead businesses manufacture commercial flexible sprinkler head connection products for use in a variety of markets, including industrial, commercial, cold storage, institutional and clean room applications.

The cash consideration received, net assets divested and resulting gain on sale for the year ended September 30, 2018 are as follows:

(in thousands)

Cash consideration

Net assets divested

Gain on sale of a business

Net assets divested included $ 2,626 of goodwill.

Net sales and net income of the companies acquired during fiscal 2019 are included in the consolidated statement of operations for fiscal 2019 for the post-acquisition period.

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.

POSTRETIREMENT BENEFITS

3 unchanged sentences

For all periods presented, all defined pension benefit plans are frozen, whereby participants no longer accrue credited service.

The net periodic (benefit)/cost for the periods presented was as follows:

The net periodic cost for the periods presented was as follows:

Fiscal Year Ended

(in thousands)

September 30, 2020

September 30, 2019

September 30, 2018

(in thousands) September 30, 2021 September 30, 2020 September 30, 2019

Interest cost 2,729 3,739 4,665

1 unchanged sentence

Amortization of actuarial loss 1,327 888 101

Net periodic (benefit) cost

The weighted-average assumptions used to determine net periodic pension (benefit) cost during the period were as follow:

September 30, 2020

September 30, 2019

September 30, 2018

Net periodic cost $ ( 2,368 ) $ ( 1,704 ) $ ( 1,606 )

The weighted-average assumptions used to determine net periodic pension cost during the period were as follow:

September 30, 2021 September 30, 2020 September 30, 2019

Discount rate 2.5 % 3.1 % 4.2 %

Expected return on plan assets 6.2 % 6.3 % 6.3 %

Rate of compensation increase

Rate of compensation increase N/a N/a N/a

The change in the benefit obligations, plan assets and the amounts recognized on the consolidated balance sheets was as follows (in thousands):

6 unchanged sentences

Interest cost 2,729

Actuarial loss

Actuarial gain ( 3,170 )

Benefits and administrative expenses paid ( 5,573 )

13 unchanged sentences

Funded status as of September 30, 2021 $ ( 2,689 )

(in thousands)

September 30, 2020

September 30, 2019

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

Amounts recognized in the consolidated balance sheets consist of:

Pension Non-Current Assets $ 1,130 $ —

Pension liabilities $ ( 3,819 ) $ ( 40,023 )

5 unchanged sentences

Discount rate 2.7 % 2.5 %

Rate of compensation increase

The Company elected to adopt the ASU 2018-14 early in the quarter ended September 30, 2020, which requires a narrative description of the reasons for significant gains and losses affecting the benefit obligation for the period.

For the fiscal year ended 2020, the reduction in the discount rate from fiscal year 2019 to 2020 is the primary driver of the change in benefit obligations.

Rate of compensation increase N/a N/a

For the fiscal year ended 2021, the net obligation decreased primarily as a result of employer contributions of $ 18 million over the prior year contributions and an actuarial gain of $ 3.2 million that was a result of an increase in the discount rate from fiscal year 2020 to 2021.

The following table summarizes the defined benefit pension plans with accumulated benefit obligations in excess of plan assets:

(in thousands)

September 30, 2020

September 30, 2019

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

Accumulated benefit obligation $ 122,655 $ 146,759

1 unchanged sentence

The following table summarizes the defined benefit pension plans with projected benefit obligations in excess of plan assets:

(in thousands)

September 30, 2020

September 30, 2019

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

Projected benefit obligation $ 122,655 $ 146,759

6 unchanged sentences

Asset Category:

September 30, 2020

September 30, 2019

September 30, 2021 September 30, 2020

Equity securities 56 % 58 %

1 unchanged sentence

Cash and cash equivalents 1 % 3 %

Total 100 % 100 %

The Company evaluates its defined benefit plans’ asset portfolios for the existence of significant concentrations of risk, such as investments in a single entity, industry, foreign country and individual fund manager.

3 unchanged sentences

The Company’s asset allocations are presented in the table below:

(in thousands)

September 30, 2020

September 30, 2019

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

Level 1 Level 2 Total Level 1 Level 2 Total

United States equity securities $ 48,274 $ — $ 48,274 $ 30,738 $ 6,796 $ 37,534

2 unchanged sentences

Cash and cash equivalents 1,507 — 1,507 2,924 — 2,924

Total $ 138,056 $ — $ 138,056 $ 90,028 $ 16,708 $ 106,736

Equity securities consist primarily of publicly traded United States and non-U.S.

17 unchanged sentences

(in thousands)

2027 to 2031 37,674

Defined Contribution Retirement Plans — The Company also sponsors several defined contribution retirement plans - the 401(k) matching programs.

Expense for the defined contribution plans is computed as a percentage of participants' compensation and was $ 3,718 , $ 3,572 and $ 3,600 for the fiscal years ended September 30, 2020 , September 30, 2019 and September 30, 2018 , respectively.

Expense for the defined contribution plans is computed as a percentage of participants’

compensation and was $ 3,400 , $ 3,718 and $ 3,572 for the fiscal years ended September 30, 2021, September 30, 2020 and September 30, 2019, respectively.

Multi-Employer Plan — The Company has a liability of $ 5,021 as of September 30, 2021 and $ 5,345 as of September 30, 2020 representing the Company’s proportionate share of a multi-employer pension plan which was exited prior to fiscal 2017.

7 unchanged sentences

Awards previously granted under the 2016 Omnibus Incentive Plan were unaffected by the termination.

A maximum of 1.1 million shares of common stock is reserved for issuance under the 2020 Omnibus Incentive Plan, plus the number of shares of common stock remaining available for issuance under the 2016 Omnibus Incentive Plan as of the date of the Company’s 2020 Annual Meeting of Stockholders.

All awards have a ten year life.

A maximum of 2.2 million shares of common stock is reserved for issuance under the 2020 Omnibus Incentive Plan.

All stock option awards have a ten year life.

All share-based awards are expected to be fulfilled with new shares of common stock.

1 unchanged sentence

The total income tax benefit recognized for share-based compensation arrangements was $ 2,073 , $ 3,014 and $ 2,949 for fiscal years 2021, 2020 and 2019, respectively.

On May 4, 2018, the Company's board of directors modified the stock awards of a key executive.

As part of the modification, the Board extended the date through which the key executive has the right to exercise vested options.

In addition, the amendment also accelerated the service vesting period of certain of his unvested stock options, RSUs and PSUs.

As a result of these modifications, the Company recorded the entire incremental stock-based compensation expense of approximately $ 0.5 million during the year ended September 30, 2018.

Stock Options

In accordance with ASC 718 Compensation - Stock Compensation, stock compensation expense is recorded on a straight-line basis over the requisite service period (generally the vesting period), net of actual forfeitures based on the grant-date fair value of the option under the equity accounting method.

In accordance with ASC 718 Compensation - Stock Compensation, stock compensation expense for stock options is recorded on a straight-line basis over the requisite service period (generally the vesting period), net of actual forfeitures based on the grant-date fair value of the option under the equity accounting method.

The assumptions used in the Black-Scholes option pricing model to value the options granted were as follows:

Fiscal Year Ended

September 30, 2020

September 30, 2019

September 30, 2018

September 30, 2021 September 30, 2020 September 30, 2019

Expected dividend yield — % — % — %

1 unchanged sentence

Range of risk-free interest rates 0.52 % 1.67 % 2.94 % - 3.00 %

2.94% - 3.00%

2.16% - 2.38%

Range of expected option lives

6 to 10 years

Range of expected option lives 6 years 6 years 6 to 10 years

Dividends are not paid on the Company’s common stock.

For grants during fiscal year ended 2020, the expected volatility is based on the Company's stock price volatility.

For grants and modifications during fiscal years ended 2019 and 2020, expected volatility is based on historical volatilities of comparable companies.

For grants during fiscal year ended 2021 and 2020, the expected volatility is based on the Company’s stock price volatility.

For grants and modifications during fiscal years ended 2019, expected volatility is based on historical volatilities of comparable companies.

The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of the grant for periods corresponding with the expected life of the options.

2 unchanged sentences

Stock option activity for the period September 30, 2018 to September 30, 2021 was as follows:

(in thousands)

Weighted-Average Exercise Price

Weighted-Average Grant Date Fair Value

Aggregate Intrinsic Value

(in thousands)

Weighted-Average Remaining Contractual Term (in years)

(in thousands) Weighted-Average Exercise Price Weighted-Average Grant Date Fair Value Aggregate Intrinsic Value

(in thousands) Weighted-Average Remaining Contractual Term (in years)

Outstanding as of September 30, 2018 2,605 9.91 $ 43,302

Granted 342 23.45 $ 11.35

Exercised ( 985 ) 8.62 $ 16,453

Forfeited ( 126 ) 12.64

Outstanding as of September 30, 2019 1,836 12.94 $ 31,957

Granted 67 37.24 $ 14.05

Exercised ( 508 ) 8.55 $ 14,548

Forfeited ( 20 ) 19.13

Outstanding as of September 30, 2020 1,375 15.66 $ 11,443

Granted 72 29.80 $ 13.46

Exercised ( 678 ) 12.30 $ 33,075

Forfeited — —

Outstanding as of September 30, 2021 769 19.95 51,441 5.64

10 unchanged sentences

Changes to the Company’s nonvested RSU awards for the year ended September 30, 2021 were as follows:

(in thousands)

Weighted-average grant-date fair value

(in thousands) Weighted-average grant-date fair value

Nonvested as of September 30, 2018 650 $ 19.91

Granted 361 19.23

Vested ( 195 ) 21.51

Forfeited ( 142 ) 18.52

Nonvested as of September 30, 2019 674 19.37

Granted 166 37.24

Vested ( 403 ) 19.43

Forfeited ( 32 ) 22.29

Nonvested as of September 30, 2020 405 26.44

Granted 218 32.01

Vested ( 229 ) 23.78

Forfeited ( 10 ) 28.48

Nonvested as of September 30, 2021 384 $ 30.30

2 unchanged sentences

Performance Share Units

On November 27, 2017, November 29, 2018 and November 21, 2019 , the Company awarded PSUs whose vesting is contingent upon meeting or exceeding certain market and performance conditions.

The Company awards PSUs whose vesting is contingent upon meeting or exceeding certain market and performance conditions.

The performance condition, which was based on an adjusted net income, represented 70 % of the award and the market condition, which was based on Total Shareholder Return (“TSR”) of the Company's common stock relative to a peer group represented the remaining 30 %.

7 unchanged sentences

The assumptions used in the Monte-Carlo method to value the performance share awards granted during the fiscal year ended September 30, 2021 were as follows:

September 30, 2020

September 30, 2019

September 30, 2018

September 30, 2021 September 30, 2020 September 30, 2019

Expected dividend yield — % — % — %

Range of expected volatility

20.69 - 74.26

17.21 - 79.15

Expected volatility 61 % 21 % - 53 %

Risk free interest rates 0.21 % 1.59 % 2.84 %

1.83% - 2.54%

Expected life

$ 13.90 - 26.68

Expected life 3 years 3 years 3 years

Fair value $ 33.80 $ 44.22 $ 18.84

Dividends are not paid on the Company’s common stock.

Expected volatility is based on historical volatilities of comparable companies.

For grants during fiscal year ended 2021 and 2020, the expected volatility is based on the Company’s stock price volatility.

For grants during fiscal year 2019, expected volatility is based on historical volatilities of comparable companies.

The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of the grant for periods corresponding with the expected life of the award.

2 unchanged sentences

Changes to the Company’s non-vested PSU awards for the year ended September 30, 2021 were as follows:

(in thousands)

Weighted-average grant-date fair value

(in thousands) Weighted-average grant-date fair value

Nonvested as of September 30, 2018 307 $ 21.22

Granted 242 18.17

Forfeited ( 94 ) 20.55

Nonvested as of September 30, 2019 455 $ 21.11

Granted 115 40.43

Vested ( 162 ) 25.21

Adjustment for achieved performance upon issuance 31 21.68

Forfeited ( 14 ) 22.82

Nonvested as of September 30, 2020 425 $ 25.15

Granted 156 31.67

Vested ( 171 ) 21.55

Adjustment for achieved performance upon issuance 57 22.95

Forfeited ( 14 ) 29.43

Nonvested as of September 30, 2021 453 $ 28.07

As of September 30, 2021, there was $ 4,316 of total unrecognized compensation expense related to non-vested PSUs granted, expected to be recognized over a weighted-average period of approximately 1.1 years.

There were no PSUs vested during fiscal years 2019 and 2018 .

RESTRUCTURING CHARGES

Restructuring charges relate to the streamlining of the Company's cost structure and improving its operations.

These actions primarily resulted in workforce reductions, lease termination costs, and other facility rationalization costs.

Restructuring reserves are included as a component of other current liabilities .

Electrical Raceway

Mechanical Products & Solutions

Other/Corporate

(in thousands)

Severance (a)

Balance as of September 30, 2017

Exchange rate effects

Balance as of September 30, 2018

Balance as of September 30, 2019

Exchange rate effects

Balance as of September 30, 2020

(a) Fiscal 2020 charges are primarily related to a reduction in force implemented as part of adjusting to the macroeconomic impacts related to the outbreak of the novel coronavirus (COVID-19).

Fiscal 2019 and 2018 charges are primarily related to Atkore's commitment to close and consolidate certain facilities as part of its continuing effort to realign its strategic focus.

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

The Company expects to utilize all restructuring accruals as of September 30, 2020 within the next twelve months.

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

Fiscal Year Ended

(in thousands)

September 30, 2020

September 30, 2019

September 30, 2018

Total restructuring charges, net

There were no PSUs vested during fiscal year 2019.

OTHER INCOME, NET

1 unchanged sentence

Fiscal Year Ended

(in thousands)

September 30, 2020

September 30, 2019

September 30, 2018

(in thousands) September 30, 2021 September 30, 2020 September 30, 2019

Gain on purchase of business $ ( 731 ) $ — $ ( 7,384 )

Gain on sale of a business

Undesignated foreign currency derivative instruments 2,201 1,269 ( 5,384 )

Business interruption insurance recovery ( 15,500 ) — —

Foreign exchange loss (gain) on intercompany loans ( 1,534 ) ( 2,342 ) 2,975

Debt modification costs

Pension-related benefits ( 2,368 ) ( 1,704 ) ( 1,606 )

Other ( 220 ) — ( 79 )

Other income, net $ ( 18,152 ) $ ( 2,777 ) $ ( 11,478 )

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

federal law the Coronavirus Aid, Relief and Economic Security ("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 carry back periods, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property.

There is no material impact to our consolidated financial statements as a result of this legislation.

On December 22, 2017, "H.R.1," also known as the Tax Cuts and Jobs Act ("TCJA") was signed into law.

This legislation provided for significant changes to corporate taxation including, but not limited to, a reduction of the federal corporate tax rate from 35% to 21% , limitations on the deductibility of interest expense and executive compensation, full expensing of the costs of qualified property in the period of acquisition and the elimination of the domestic production activities deduction.

The legislation also adopts a new quasi-territorial tax regime and imposes a one-time transition tax on deemed repatriated earnings of certain foreign subsidiaries.

As part of the enactment of TCJA, the Company recorded a global intangible low-taxed income ("GILTI") provision for the first time beginning in fiscal 2019.

The GILTI provision of TCJA requires certain income earned by controlled foreign corporations ("CFCs") to be included currently in the gross income of the CFCs controlling U.S.

In accordance with accounting standards applicable to income taxes, there is allowed an accounting policy choice of either (1) treating taxes due on U.S.

The Company has elected the period method.

Significant components of income before income taxes and income tax expense for the fiscal years ended September 30, 2021, September 30, 2020 and September 30, 2019 consisted of the following:

(in thousands)

September 30, 2020

September 30, 2019

September 30, 2018

(in thousands) September 30, 2021 September 30, 2020 September 30, 2019

Components of income before income taxes:

United States $ 770,350 $ 201,784 $ 170,780

Non-U.S 9,651 214 13,889

Income before income taxes $ 780,001 $ 201,998 $ 184,669

1 unchanged sentence

United States:

Federal $ 182,105 $ 32,335 $ 31,431

State 46,913 9,668 9,800

6,432 3,210 5,183

Current income tax expense $ 235,450 $ 45,213 $ 46,414

United States:

Federal $ ( 35,442 ) $ 5,102 $ 1,123

State ( 7,281 ) 49 ( 340 )

( 583 ) ( 668 ) ( 1,579 )

Deferred income (benefit) tax expense ( 43,306 ) 4,483 ( 796 )

Income tax expense $ 192,144 $ 49,696 $ 45,618

In addition to the change in the U.S.

federal statutory rate, the mix of foreign and domestic losses, along with rate reconciling items as outlined below, impact the Company's effective tax rate.

Differences between the statutory federal income tax rate and effective income tax rate are summarized below:

(in thousands)

September 30, 2020

September 30, 2019

September 30, 2018

(in thousands) September 30, 2021 September 30, 2020 September 30, 2019

Statutory federal tax 21 % 21 % 21 %

1 unchanged sentence

State income taxes 4 % 4 % 4 %

Change in tax rates

Domestic manufacturing deduction

Indemnified uncertain tax benefits

Stock-based compensation ( 1 ) % ( 2 ) % ( 1 ) %

Other 1 % 2 % 1 %

Effective income tax rate 25 % 25 % 25 %

The Company's effective tax rate for fiscal 2020 differs from the statutory rate primarily due to state income taxes of $ 7,690 , current year valuation allowance expense of $ 2,099 and limitations on executive compensation of $ 1,243 partially offset by $ 4,203 of excess tax benefit associated with the exercise of stock options.

The Company's effective tax rate for fiscal 2019 differs from the statutory rate primarily due to state income taxes of $ 7,566 , along with GILTI provisions of $ 953 and withholding taxes of $ 635 , offset by the disallowed gain on the purchase of Cor-Tek of $ 1,551 and $ 1,537 of excess tax benefit associated with the exercise of stock options.

The Company's effective tax rate for fiscal 2018 differs from the statutory rate due to a $ 5,466 benefit from the remeasurement of the deferred tax liabilities as a result of the TCJA, a $ 4,091 excess tax benefit associated with the exercise of stock options, a net tax benefit of $ 3,977 from the release of indemnified tax positions and a benefit of $ 3,309 for the domestic manufacturing deduction, partially offset by $ 5,675 of state income tax expense.

The Company’s effective tax rate for fiscal 2021 differs from the statutory rate primarily due to state income taxes of $ 30,680 , current year valuation allowance expense of $ 2,190 and limitations on executive compensation of $ 2,587 partially offset by $ 7,352 of excess tax benefit from share-based compensation.

The Company’s effective tax rate for fiscal 2020 differs from the statutory rate primarily due to state income taxes of $ 7,690 , valuation allowance expense of $ 2,099 and limitations on executive compensation of $ 1,243 , partially offset by $ 4,203 of excess tax benefit from share-based compensation.

The Company’s effective tax rate for fiscal 2019 differs from the statutory rate primarily due to state income taxes of $ 7,566 , along with GILTI provisions of $ 953 and withholding taxes of $ 635 , offset by the disallowed gain on the purchase of Cor-Tek of $ 1,551 and $ 1,537 of excess tax benefit from share-based compensation.

Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes.

The components of the net deferred income tax assets are as follows:

(in thousands)

September 30, 2020

September 30, 2019

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

Deferred tax assets:

2 unchanged sentences

Postretirement benefits 2,057 11,751

Inventory 36,021 5,240

Lease obligations 10,616 9,966

Other 633 174

$ 108,355 $ 69,551

Deferred tax liabilities:

3 unchanged sentences

Right-of-use assets, net ( 10,247 ) ( 9,546 )

Other ( 3,095 ) ( 4,065 )

$ ( 83,885 ) $ ( 81,186 )

Net deferred tax liability before valuation allowance 24,470 ( 11,635 )

4 unchanged sentences

jurisdictions, the Company has net operating loss carryforwards of $ 55,022 which have an expiration period ranging from five years to unlimited.

Valuation allowances have been established on net operating losses and other deferred tax assets in Australia, France, Asia Pacific, and other foreign and United States state jurisdictions, as a result of the Company's determination that there is less than 50% likelihood that these assets will be realized.

Valuation allowances have been established on net operating losses and other deferred tax assets in Luxembourg, Australia, France, China, and other foreign and United States state jurisdictions, as a result of the Company's determination that there is less than 50% likelihood that these assets will be realized.

Evidence for this determination includes three year cumulative loss positions, future reversal of temporary differences, and expectations of future losses.

For fiscal 2019, the Company assessed the need for a continued valuation allowance against deferred tax assets in the Company's Asia Pacific business based on recent taxable income and the expected future performance of the business.

As a result, the Company has released a $ 550 valuation allowance against the deferred tax assets of the Asia Pacific business.

As of September 30, 2020 , the Company had unrecognized tax benefits of $ 1,614 which, if recognized, would positively benefit the effective tax rate.

For fiscal 2021, the Company assessed the need for a valuation allowance against deferred tax assets in the Company’s China business based on recent taxable income and the expected future performance of the business.

As a result, the Company has established a $ 1,195 valuation allowance against the deferred tax assets of the China business.

As of September 30, 2021, and September 30, 2020, the Company had unrecognized tax benefits of $ 3,333 and $ 1,614 which, if recognized, would positively benefit the effective tax rate.

The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense.

1 unchanged sentence

A reconciliation of the beginning and ending amount of unrecognized tax benefit, excluding interest and penalties, is as follows:

(in thousands)

For the period from September 30, 2017 to September 30, 2020

(in thousands) For the period from September 30, 2018 to September 30, 2021

Balance as of September 30, 2018 $ 1,364

Additions based on tax positions related to prior years 244

Settlements ( 814 )

Balance as of September 30, 2019 794

Additions based on tax positions related to prior years 925

Additions based on tax positions related to current year 122

Settlements ( 227 )

Balance as of September 30, 2020 1,614

1 unchanged sentence

Additions based on tax positions related to current year 1,658

Settlements ( 230 )

Balance as of September 30, 2021 $ 3,333

1 unchanged sentence

The related accrued penalties and interest for uncertain tax positions increased by $ 72 .

During fiscal 2019 , the balance of unrecognized tax benefits decreased by $ 814 as a result of completing state tax audits and the expiration of the statute of limitations in federal and various state jurisdictions, partially offset by an increase of $ 244 , primarily related to various state jurisdictions' uncertain tax positions.

The related accrued penalties and interest for uncertain tax positions decreased by $ 25 .

During fiscal 2018 , the balance of unrecognized tax benefits decreased by $ 3,107 as a result of Tyco completing tax audits and the expiration of the statute of limitations in various state jurisdictions, partially offset by an increase of $ 893 , primarily related to various state jurisdictions' uncertain tax positions.

During fiscal 2020, the balance of unrecognized tax benefits increased by $ 1,047 as a result of federal and various state jurisdictions’ uncertain tax positions, partially offset by a decrease of $ 227 as a result of completing tax audits and the expiration of the statute of limitations in various state jurisdictions.

The related accrued penalties and interest for uncertain tax positions increased by $ 134 .

During fiscal 2019, the balance of unrecognized tax benefits decreased by $ 814 as of completing state tax audits and the expiration of the statute of limitations in various state jurisdictions, partially offset by an increase of $ 244 , primarily related to various state jurisdictions’ uncertain tax positions.

The related accrued penalties and interest for uncertain tax positions decreased by $ 25 .

1 unchanged sentence

The following tax years remain subject to examination by the major tax jurisdictions as follows:

Years Open to Audit

United States

2018, 2019 and 2020

Jurisdiction Years Open to Audit

United States 2018, 2019, 2020 and 2021

The Company's income tax returns are examined periodically by various taxing authorities.

4 unchanged sentences

The TCJA imposed a one-time transition tax on previously untaxed accumulated earnings of foreign subsidiaries.

The Company has accumulated earnings and profits deficit, therefore, does not anticipate an additional tax liability as a result of the transition tax.

The Company has accumulated earnings and profits deficit, therefore did not record an additional tax liability for the transition tax.

The TCJA adopts a new quasi-territorial tax regime that eliminates U.S income taxes on dividends from foreign subsidiaries.

2 unchanged sentences

income taxes on the undistributed income of subsidiaries or for unrecognized deferred tax liabilities for temporary differences related to basis differences in investments in subsidiaries, as such income is expected to be indefinitely reinvested, the investments are essentially permanent in duration, or the Company has concluded that no additional tax liability will arise as a result of the distribution of such income.

For the fiscal year ended September 30, 2019 , the Company recorded a liability of $ 635 , for withholding taxes on the planned distribution of income from one of its Europe subsidiaries.

The Company did not record income tax or non-income tax expense related to the remaining foreign earnings, and did not record any deferred tax liabilities for any basis differences in investments in subsidiaries as the earnings are expected to be indefinitely reinvested, the investments are essentially permanent in duration, or the Company has concluded that there will be no additional tax liability as a result of the distribution of the income.

For the fiscal year ended September 30, 2020, the Company did not record income tax or non-income tax expense related to the remaining foreign earnings, and did not record any deferred tax liabilities for any basis differences in investments in subsidiaries as the earnings are expected to be indefinitely reinvested, the investments are essentially permanent in duration, or the Company has concluded that there will be no additional tax liability as a result of the distribution of the income.

As of September 30, 2021, certain subsidiaries had approximately $ 74,813 of undistributed income that the Company intends to permanently reinvest.

6 unchanged sentences

However, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company's current estimate of the tax liabilities.

Under the terms of an investment agreement between the Company and Tyco, Tyco has agreed to indemnify and hold harmless the Company and its subsidiaries and their respective affiliates from and against any taxes of the Company with respect to any tax period ending on or before the closing of the Transactions, as well as all tax liabilities relating to events or transactions occurring on or prior to the closing date of the Transactions.

In addition, the Company has agreed to indemnify and hold harmless Tyco and its affiliates from and against any liability for any taxes of the Company with respect to any post-Transactions tax period.

As a result of the 2010 transactions that lead to the Company becoming an independent, stand-alone entity, the Company and Tyco entered into an investment agreement in which Tyco has agreed to indemnify and hold harmless the Company and its subsidiaries and their respective affiliates from and against any taxes of the Company with respect to any tax period ending on or before the closing of the 2010 transactions, as well as all tax liabilities relating to events or transactions occurring on or prior to the closing date of the 2010 transactions.

In addition, the Company has agreed to indemnify and hold harmless Tyco and its affiliates from and against any liability for any taxes of the Company with respect to any tax period after the 2010 transactions.

EARNINGS PER SHARE

6 unchanged sentences

Fiscal Year Ended

(in thousands, except per share data)

September 30, 2020

September 30, 2019

September 30, 2018

(in thousands, except per share data) September 30, 2021 September 30, 2020 September 30, 2019

Net income $ 587,857 $ 152,302 $ 139,051

Undistributed earnings allocated to participating securities 11,380 3,356 3,726

9 unchanged sentences

The following table presents the changes in accumulated other comprehensive loss by component, net of tax:

(in thousands)

Defined benefit pension items

Currency translation adjustments

(in thousands) Defined benefit pension items Currency translation adjustments Total

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

Other comprehensive loss before reclassifications

Other comprehensive (loss) income before reclassifications ( 7,604 ) 6,087 ( 1,517 )

Amounts reclassified from accumulated other comprehensive loss 661 — 661

Net current period other comprehensive loss

Reclassification of stranded tax benefits (1)

Net current period other comprehensive (loss) income ( 6,943 ) 6,087 ( 856 )

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

3 unchanged sentences

Balance as of September 30, 2021 $ ( 19,318 ) $ ( 9,408 ) $ ( 28,726 )

(1) Due to the adoption of ASU 2018-02 stranded tax benefits related to its pension plans were reclassified from Accumulated other comprehensive loss and into Accumulated deficit

The following is a summary of the amounts reclassified from accumulated other comprehensive loss to net income:

Fiscal Year Ended

(in thousands)

September 30, 2020

September 30, 2019

September 30, 2018

(in thousands) September 30, 2021 September 30, 2020 September 30, 2019

Amortization of defined benefit pension items:

Amortization of net loss (included within other income, net) $ 1,327 $ 888 $ 101

Tax expense ( 337 ) ( 227 ) ( 25 )

Net reclassifications for the period $ 990 $ 661 $ 76

2 unchanged sentences

Approximately 81 % and 73 % of the Company's inventories are valued at the lower of LIFO cost or market at September 30, 2021 and September 30, 2020, respectively.

(in thousands)

September 30, 2020

September 30, 2019

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

Purchased materials and manufactured parts, net $ 105,460 $ 49,192

2 unchanged sentences

Inventories, net $ 285,989 $ 199,095

Total inventories would be $ 4,418 lower and $ 3,138 higher than reported as of September 30, 2020 and September 30, 2019 , respectively, if the first-in, first-out method was used for all inventories.

During the year ended September 30, 2020, inventory quantities were reduced.

This reduction resulted in a liquidation of LIFO inventory quantities carried at net lower costs prevailing in prior years as compared with the cost of 2020 purchases, the effect of which decreased cost of goods sold and increased operating income by approximately $ 1,837 .

Total inventories would be $ 108,911 higher and $ 4,418 lower than reported as of September 30, 2021 and September 30, 2020, respectively, if the first-in, first-out method was used for all inventories.

During the years ended September 30, 2021 and September 30, 2020, inventory quantities in specific pools were lower at the end of the period than the quantities at the beginning of the period.

This reduction resulted in a liquidation of LIFO inventory quantities carried at net lower costs prevailing in the respective prior years as compared with the cost of respective current year purchases.

The effect of this inventory reduction resulted in decreased cost of goods sold and increased operating income of approximately $ 6,592 and $ 1,837 .

As of September 30, 2021 and September 30, 2020, the excess and obsolete inventory reserve was $ 11,780 and $ 14,533 , respectively.

1 unchanged sentence

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

(in thousands)

September 30, 2020

September 30, 2019

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

Land $ 23,043 $ 20,460

Buildings and related improvements 136,680 129,538

1 unchanged sentence

Leasehold improvements 9,720 9,862

Software 28,288 27,028

Construction in progress 43,055 22,736

Property, plant and equipment

Property, plant and equipment, at cost 613,289 541,884

Accumulated depreciation ( 337,667 ) ( 297,993 )

Property, plant and equipment, net $ 275,622 $ 243,891

Depreciation expense for fiscal years ended September 30, 2020 , September 30, 2019 and September 30, 2018 totaled $ 42,208 , $ 39,471 and $ 34,786 , respectively.

Depreciation expense for fiscal years ended September 30, 2021, September 30, 2020 and September 30, 2019 was $ 44,913 , $ 42,208 and $ 39,471 , respectively.

GOODWILL AND INTANGIBLE ASSETS

Goodwill — C hanges in the carrying amount of goodwill are as follows:

(in thousands)

Electrical Raceway

Mechanical Products & Solutions

(in thousands) Electrical Safety & Infrastructure Total

Balance as of September 30, 2019 $ 142,654 $ 43,577 $ 186,231

Goodwill acquired during year

Exchange rate effects 2,008 — 2,008

Balance as of September 30, 2020 $ 144,662 $ 43,577 $ 188,239

Goodwill acquired during year 9,948 — 9,948

Exchange rate effects 861 — 861

Balance as of September 30, 2021 $ 155,471 $ 43,577 $ 199,048

Goodwill balances include $ 3,924 and $ 43,000 of accumulated impairment losses within the Electrical Raceway and MP&S segments, respectively, as of September 30, 2020 and September 30, 2019 .

Goodwill balances include $ 3,924 and $ 43,000 of accumulated impairment losses within the Electrical and Safety & Infrastructure segments, respectively, as of September 30, 2021 and September 30, 2020.

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

September 30, 2020

September 30, 2019

(in thousands)

Weighted Average Useful Life (Years)

Gross Carrying Value

Accumulated Amortization

Net Carrying Value

Gross Carrying Value

Accumulated Amortization

Net Carrying Value

September 30, 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

Amortizable Intangible Assets:

Customer relationships 11 $ 371,048 $ ( 234,946 ) $ 136,102 $ 355,735 $ ( 202,677 ) $ 153,058

Other 8 23,633 ( 11,411 ) 12,222 19,086 ( 9,675 ) 9,411

Total 394,681 ( 246,357 ) 148,324 374,821 ( 212,352 ) 162,469

Indefinite-lived Intangible Assets:

Trade names 92,880 — 92,880 92,880 — 92,880

Total $ 487,561 $ ( 246,357 ) $ 241,204 $ 467,701 $ ( 212,352 ) $ 255,349

Amortization expense for the fiscal years ended September 30, 2021, September 30, 2020 and September 30, 2019 was $ 33,644 , $ 32,262 and $ 32,876 , respectively.

Expected amortization expense for intangible assets over the next five years and thereafter is as follows (in thousands):

2022 $ 32,723

2027 and thereafter 25,051

1 unchanged sentence

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

(in thousands)

September 30, 2020

September 30, 2019

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

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

New Senior Secured Term Loan Facility due May 26, 2028 371,095 —

Senior Notes Due June 1, 2031 400,000 —

ABL Credit Facility — —

Deferred financing costs ( 12,709 ) ( 7,804 )

Current portion

Long-term debt $ 758,386 $ 803,736

During the three months ended March 29, 2019, the Company made an accelerated repayment of $ 18,680 of principal on the First Lien Loan, which was calculated by a formula based on 2018 excess cash flows and a leverage ratio as defined within the Term Loan Agreement.

During the three months ended September 30, 2019, the Company made a voluntary prepayment of $ 40,000 of principal on the First Lien Loan.

During the three months ended September 30, 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 removal of all principal payment requirements until the contractual maturity of the debt in fiscal 2024.

During the three months ended September 30, 2020, the Company made a voluntary payment of principal on the First Lien Loan of $ 40,000 .

During the three months ended December 25, 2020 and the three months ended September 30, 2021, the Company made voluntary prepayments of principal on the First Lien Loan of $ 40,000 and the New Senior Secured Term Loan Facility of $ 26,000 , respectively.

The voluntary prepayment on the New Senior Secured Term Loan Facility resulted in the removal of all principal payment requirements until the contractual maturity of the debt in fiscal 2028.

As of September 30, 2021, future contractual maturities of long-term debt are as follows (in thousands):

2027 and thereafter $ 773,000

Term Loan Facility — On April 9, 2014, AII entered into a credit agreement (the "Initial Credit Agreement") for a $ 420,000 First Lien Term Loan Facility (the "Initial First Lien Term Loan Facility") and a credit agreement for a $ 250,000 Second Lien Term Loan Facility (the "Second Lien Term Loan Facility." The Initial First Lien Term Loan Facility was priced at 99.50 % and carried an interest rate of LIBOR plus 3.50 % with a LIBOR floor of 1.00 % .

The Second Lien Term Loan Facility was priced at 99.00 % and carried an interest rate of LIBOR plus 6.75 % with a LIBOR floor of 1.00 % .

On December 22, 2016, AII entered into an amendment to the Initial Credit Agreement, which amended and restated the Initial Credit Agreement and provided for a new $ 500,000 first lien term loan facility and extended the maturity of the Initial Credit Agreement to December 22, 2023 (the "First Lien Term Loan Facility").

Loans under the First Lien Term Loan Facility bear interest at either LIBOR plus an applicable margin equal to 3.00 % or an alternate base rate plus an applicable margin equal to 2.00 % and are guaranteed by AIH and the United States operating companies owned by AII.

The First Lien Term Loan Facility amortizes at a rate of 1.00 % per annum and was priced at 99.75 % .

AII used proceeds from the First Lien Term Loan Facility and approximately $ 155,000 of available cash to (i) repay all outstanding loans under the Initial First Lien Term Loan Facility and the Second Lien Term Loan Facility and (ii) pay related fees and expenses, including accrued interest.

On February 2, 2018 , AII entered into the (i) First Amendment to the Amended and Restated First Lien Credit Agreement, by and among AII, Deutsche Bank AG New York Branch, as administrative agent and collateral agent, and the other financial institutions party thereto to, among other things, decrease the interest margins applicable to the ABR Loans to 1.75 % and Eurodollar Loans to 2.75 % , and (ii) Increase Supplement (the "Increase Supplement") to, among other things, incur incremental first lien secured term loans in aggregate principal amount of $ 425,000 .

The Company used the proceeds from the Increase Supplement to 1) repurchase approximately 17.2 million shares of common stock from the CD&R Investor for a total purchase price of approximately $ 375,000 , 2) repay $ 42,000 of outstanding loans under the ABL Credit Facility (as defined below) and 3) pay $ 5,800 in related fees and expenses.

The revisions to the First Lien Term Loan were accounted for as a debt modification, resulting in immediate expensing of related financing costs of $ 892 within other income, net on the consolidated statements of operations for the year ended September 30, 2018.

The First Lien Term Loan Facility contains customary covenants typical for this type of financing, including limitations on indebtedness, restricted payments including dividends, liens, restrictions on distributions from restricted subsidiaries, sales of assets, affiliate transactions, mergers and consolidations.

The First Lien Term Loan Facility also contains customary events of default typical for this type of financing, including, without limitation, failure to pay principal and/or interest when due, failure to observe covenants, certain events of bankruptcy, the rendering of certain judgments, or the loss of any guarantee.

ABL Credit Facility — On December 22, 2016, AII entered into the Fifth Amendment to Credit Agreement and Third Amendment to and Reaffirmation of Guarantee and Collateral Agreement to amend its asset based credit facility (the "ABL Credit Facility").

The amendment, among other things, extended the maturity of the facility to December 22, 2021, decreased the interest rate margins applicable to loans under the facility to (i) in the case of United States dollar-denominated loans, either (x) LIBOR plus an applicable margin ranging from 1.25 % to 1.75 % , or (y) an alternate base rate plus an applicable margin ranging from 0.25 % to 0.75 % or (ii) in the case of Canadian dollar-denominated loans, either (x) the BA rate plus an applicable margin ranging from 1.25 % to 1.75 % or (y) a Canadian prime rate plus an applicable margin ranging from 0.25 % to 0.75 % and decreased the fee payable with respect to unutilized availability under the facility from 0.25 % to 0.375 % depending on the remaining availability under the facility.

On August 28 2020, AII amended the ABL Credit Facility (the "Amended ABL Facility").

New Senior Secured Term Loan Facility - On May 26, 2021, the Company entered into a new $ 400 million senior secured term loan facility (the “New Senior Secured Term Loan Facility”).

The New Senior Secured Term Loan Facility will mature on May 26, 2028 and borrowings thereunder bear interest at the rate of either (x) LIBOR (with a floor of 0.50 %) plus 2.00 %, or (y) an alternate base rate (with a floor of 1.50 %) plus 1.00 %.

The New Senior Secured Term Loan Facility has an annual amortization rate of 1.00 %.

Senior Notes - On May 26, 2021, the Company completed the issuance and sale of the $ 400 million aggregate principal amount of 4.25 % Senior Notes due 2031 (the “Senior Notes”) in a private offering.

The Senior Notes were sold only to qualified institutional buyers in compliance with Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”), and to non-U.S.

persons outside of the United States in compliance with Regulation S of the Securities Act.

ABL Credit Facility — On August 28 2020, AII amended the ABL Credit Facility (the “Amended ABL Facility”).

The amendment, among other things, extended the maturity of the facility to August 28, 2023, and increased the interest rate margins applicable to loans under the facility to (i) in the case of United States dollar-denominated loans, either (x) LIBOR plus an applicable margin ranging from 1.75 % to 2.25 %, or (y) an alternate base rate plus an applicable margin ranging from 0.75 % to 1.25 %, each based on available loan commitments or (ii) in the case of Canadian dollar-denominated loans, either (x) the BA rate plus an applicable margin ranging from 1.75 % to 2.25 % or (y) a Canadian prime rate plus an applicable margin ranging from 0.75 % to 1.25 %, each based on available loan commitments.

2 unchanged sentences

The revisions to the ABL Credit Facility were accounted for as a debt extinguishment, resulting in immediate expensing of unamortized financing costs of $ 273 for the year ended September 30, 2020.

In connection with AII causing Columbia-MBF to become a subsidiary guarantor for the Amended ABL Credit Facility, AII also caused Columbia-MBF to become a subsidiary guarantor for the First Lien Term Loan Facility.

On May 26, 2021, the Company entered into an amendment to the ABL Credit Facility.

The amendment (i) extends the maturity of the facility to the earlier of five years from entering into the amendment or 91 days prior to the maturity date of the New Senior Secured Term Loan Facility if at least $ 100 million of obligations remain outstanding under the New Senior Secured Term Loan Facility on such date (ii) decreases the interest rate margins applicable to loans under the facility to (a) in the case of United States dollar-denominated loans, either (x) LIBOR plus an applicable margin ranging from 1.25 % to 1.75 %, or (y) an alternate base rate plus an applicable margin ranging from 0.25 % to 0.75 % or (b) in the case of Canadian dollar-denominated loans, either (x) the bankers acceptance rate plus an applicable margin ranging from 1.25 % to 1.75 % or (y) a Canadian prime rate plus an applicable margin ranging from 0.25 % to 0.75 %.

(iii) decreases the fee payable with respect to unutilized availability under the facility from 0.375 % to 0.30 %, depending on the remaining availability under the ABL Credit Facility the rate may decrease to 0.25 % and (iv) made certain other changes agreed with the lenders under the ABL Credit Facility.

The Amended ABL Credit Facility has aggregate commitments of $ 325,000 and is guaranteed by AIH, the United States subsidiaries owned directly or indirectly by AII and certain other restricted subsidiaries of AII that AII causes to be a subsidiary guarantor from time to time including as of the closing date for the Amended ABL Credit Facility, Columbia-MBF, Inc., a corporation formed by amalgamation under the laws of Canada (“Columbia-MBF”).

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

Availability under the ABL Credit Facility is subject to a borrowing base equal to the sum of 85 % of eligible accounts receivable plus the lesser of (i) 80 % of eligible inventory of each borrower and guarantor, valued at the lower of cost and fairmarket value and (ii) 85 % of the net orderly liquidation value of eligible inventory, subject to certain limitations.

Availability under the ABL Credit Facility is subject to a borrowing base equal to the sum of 85 % of eligible accounts receivable plus the lesser of (i) 80 % of eligible inventory of each borrower and guarantor, valued at the lower of cost and fair market value and (ii) 85 % of the net orderly liquidation value of eligible inventory, subject to certain limitations.

There were no borrowings outstanding under the ABL Credit Facility as of September 30, 2021 and September 30, 2020, respectively.

The Amended ABL Credit Facility contains customary representations and warranties and customary affirmative and negative covenants.

Affirmative covenants include, without limitation, the timely delivery of quarterly and annual financial statements, certifications to be made by AIH, AII and each of its restricted subsidiaries, payment of obligations, maintenance of corporate existence and insurance, notices, compliance with environmental laws, and the grant of liens.

The negative covenants are limited to the following:

limitations on indebtedness, dividends and distributions, investments, acquisitions, prepayments or redemptions of subordinated indebtedness, amendments of subordinated indebtedness, transactions with affiliates, asset sales, mergers, consolidations and sales of all or substantially all assets, liens, negative pledge clauses, changes in line of business, changes in charter documents, hedging transactions and maintaining Canadian defined benefit pension plans.

The negative covenants are subject to customary exceptions and also permit the payment of dividends and distributions, investments, permitted acquisitions, payments or redemptions of subordinated indebtedness, asset sales and consolidations and sales of all or substantially all assets upon satisfaction of a payment condition.

There are no financial covenants included in the Amended ABL Credit Agreement, other than a springing minimum fixed charge coverage ratio of at least 1.0 to 1.0, which will be tested only when specified availability (as defined above) is less than the greater of (A) $ 22,000 and (B) 10.0 % of the lesser of (x) the then applicable borrowing base and (y) the then effective commitments under the Amended ABL Credit Facility, and continuing until such time as specified availability shall have been in excess of such threshold for a period of 30 consecutive days.

The First Lien Term Loan Facility and the ABL Credit Facility are secured by all of the assets of the U.S.

subsidiaries of the Company and, as of the closing date for the Amended ABL Credit Facility, Columbia-MBF.

The First Lien Term Loan Facility has priority over all real property, plant and equipment, intellectual property and capital stock of any U.S.

subsidiary and Columbia-MBF and any documents or instruments evidencing the foregoing assets.

The New Senior Secured Term Loan Facility and the ABL Credit Facility are secured by all of the assets of AII and the guarantors under such facilities.

The New Senior Secured Term Loan Facility has priority over all real property, plant and equipment, intellectual property and capital stock of AII and any guarantor and any documents or instruments evidencing the foregoing assets.

The ABL Credit Facility has second priority over the foregoing assets.

The ABL Credit Facility has first priority over cash and cash equivalents, accounts receivable, inventory and other documents and instruments evidencing the foregoing assets.

The New Senior Secured Term Loan Facility has second priority over the foregoing assets.

The aforementioned debt instruments contain customary covenants typical for this type of financing, including limitations on indebtedness, restricted payments including dividends, liens, restrictions on distributions from restricted subsidiaries, sales of assets, affiliate transactions and mergers and consolidations.

Many of these covenants are only applicable when the Company has surpassed certain thresholds relating to its indebtedness.

Additionally, these debt instruments include customary events of default, including, among other things, payment default, covenant default, payment defaults and accelerations under other indebtedness, judgment defaults and bankruptcy, insolvency or reorganization affecting the Company or certain of its subsidiaries.

Use of Proceeds - The proceeds from the Senior Notes and the New Senior Secured Term Loan Facility were used to repay the remaining principal of the existing First Lien Term Loan Facility of $ 772.0 million and $ 4.0 million of accrued interest.

The Company accounted for the repayment of the First Lien Term Loan Facility as an extinguishment of debt and recorded a $ 4.2 million loss on extinguishment of debt.

The Company accounted for the amendment to the ABL Credit Facility as a modification of debt.

FAIR VALUE MEASUREMENTS

1 unchanged sentence

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

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 prepaid expenses and other current assets or other current liabilities and long-term forward currency contracts are recorded in non-trade receivables or other long-term liabilities in the consolidated balance sheets .

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

Short-term forward currency contracts are recorded in prepaid expenses and other current assets or other current liabilities and long-term forward currency contracts are recorded in other long-term assets or other long-term liabilities in the consolidated balance sheets.

The fair value gains and losses are included in other income, net within the consolidated statements of operations.

4 unchanged sentences

The following table presents the recurring assets and liabilities measured at fair value as of September 30, 2021 and September 30, 2020 in accordance with the fair value hierarchy:

September 30, 2020

September 30, 2019

(in thousands)

September 30, 2021 September 30, 2020

(in thousands) Level 1

Cash equivalents $ 489,987 $ — $ — $ 209,421 $ — $ —

3 unchanged sentences

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

September 30, 2020

September 30, 2019

(in thousands)

Carrying Value

September 30, 2021 September 30, 2020

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

First Lien Term Loan Facility due December 22, 2023 $ — $ — $ 812,120 $ 808,060

New Senior Secured Term Loan Facility due May 26, 2028 373,000 371,486 — —

Senior Notes due June 2031 400,000 415,828 — —

Total debt $ 773,000 $ 787,314 $ 812,120 $ 808,060

In determining the approximate fair value of its long-term debt, the Company used the trading value among financial institutions, which were classified within Level 2 of the fair value hierarchy.

8 unchanged sentences

The Company utilizes a third-party claims administrator to pay claims, track and evaluate actual claims experience, and ensure consistency in the data used in the actuarial valuation.

Legal Contingencies — The Company is a defendant in a number of pending legal proceedings, some of which were inherited from its former parent, Tyco International Ltd.

("Tyco"), including certain product liability claims.

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 $ 597 and $ 2,424 as of September 30, 2020 and September 30, 2019 , respectively.

As of September 30, 2020 , the Company believes that the range of reasonably possible losses for Special Products Claims and other product liabilities is between $ 1,000 and $ 8,000 .

During fiscal 2019, after a court judgment was issued in one case between the Company and Tyco regarding the indemnification of expenses, fees and settlement amounts relating to the incompatibility issue, the Company and Tyco entered into a global settlement regarding the issue.

Legal Contingencies — Historically, a number of 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.” During fiscal 2019, after a court judgment was issued in one case between the Company and Tyco regarding the indemnification of expenses, fees and settlement amounts relating to the incompatibility issue, the Company and Tyco entered into a global settlement regarding the issue.

The Company agreed to fund the total settlement in exchange for Tyco's agreement to cap the Company’s Special Products Claim deductible at $ 12,000 , as opposed to the $ 13,000 cap negotiated within the original indemnity agreement.

2 unchanged sentences

(“JCI”), has a contractual obligation to indemnify the Company in respect of all remaining and future claims of incompatibility between the Company's antimicrobial coated steel sprinkler pipe and CPVC pipe used in the same sprinkler system.

Tyco has defended and indemnified the Company on Special Products Claims as required.

JCI is currently defending the Company in a few such Special Product Claims and since 2019 has defended and indemnified the Company on Special Products Claims as required.

As of September 30, 2021, the Company believes that the range of reasonably possible losses for Special Products Claims and other product liabilities is between $ 1,000 and $ 8,000 .

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 fiscal 2017, the U.S.

Department of Commerce ruled on a scope request in relation to an Antidumping Duty Order for Malleable Iron Pipe Fittings from China.

The ruling subjected certain of the Company's imports of conduit fittings within the Atkore Steel Components Inc.

("ASCI") business (acquired in November 2014) to antidumping duties, which are incremental to the duties previously paid upon importation.

The Company appealed the scope decision and established an accrual of $ 7,501 during the second quarter of fiscal 2017 for the related contingent liability with the related expense recorded in selling, general and administrative expenses in the Company's consolidated statements of operations which covers the post-acquisition period through the date of the scope ruling.

On appeal, the Court of International Trade ordered the U.S.

Department of Commerce to re-examine certain aspects of its prior scope ruling, and after doing so, the Department filed an amended scope ruling for the Court of International Trade’s consideration.

The amended scope ruling finds the ASCI products at issue in the matter to be outside the scope of the aforesaid Antidumping Duty Order.

On August 3, 2018, the Court of International Trade sustained the U.S.

Department of Commerce’s new scope determination and entered judgment thereupon.

Department of Commerce did not appeal the ruling by the Court of International Trade by the October 2, 2018 deadline and in fiscal 2018, the Company reversed $ 7,171 of the related accrual established during the second quarter of fiscal 2017.

During the year ended September 30, 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 has 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 has begun to receive reimbursement and 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 year ended September 30, 2021, the Company settled the related insurance claim and received $ 15,500 of business interruption recovery proceeds related to this incident.

The amount was recorded as other income within the consolidated statements of operations for the year ended September 30, 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.

4 unchanged sentences

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.

The Company does not have the ability to estimate the

potential liability from such indemnities because they relate to unknown conditions.

The Company does not have the ability to estimate the potential liability from such indemnities because they relate to unknown conditions.

However, the Company has no reason to believe that these uncertainties would have a material adverse effect on the Company's business, financial condition, results of operations or cash flows.

1 unchanged sentence

In the opinion of management, such obligations will not have a material adverse effect on the Company's business, financial condition, results of operations or cash flows.

RELATED PARTY TRANSACTIONS

In December 2010, CD&R Allied Holdings, L.P.

(the "CD&R Investor") acquired a majority stake in the Company (the "CD&R Acquisition").

In connection with the CD&R Acquisition, the Company, AIH and AII entered into a consulting agreement (the "Consulting Agreement") with CD&R.

On January 22, 2018, the Company announced a stock repurchase transaction whereby the Company agreed to repurchase from the CD&R Investor, a related party, approximately 17.2 million shares of the Company's common stock, par value $ 0.01 per share, at a per share price equal to $ 21.77 , for a total purchase price of $ 375,000 , subject to the terms and conditions set forth in the stock purchase agreement.

Following the stock repurchase transaction in January 2018 and secondary offerings of the Company's common stock in February 2018 and May 2018, the CD&R Investor did not own any of the Company's common stock subsequent to May 2018.

Prior to the CD&R Investor selling all of its remaining shares of the Company in May 2018, transactions between the Company, CD&R and affiliates of CD&R were considered to be between related parties.

In addition to the consulting fees referenced above, affiliates of CD&R own equity positions in one of the Company's customers.

Net sales during fiscal 2018 to this customer were $ 6,000 .

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 income (loss) before income taxes, adjusted to exclude unallocated expenses, depreciation and amortization, interest expense, net, gain (loss) on extinguishment of debt, restructuring charges, stock-based compensation, certain legal matters, transaction costs, gain on purchase of business, gain on sale of a business 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.

Segment Adjusted EBITDA is the income (loss) before income taxes, adjusted to exclude unallocated expenses, depreciation and amortization, interest expense, net, loss on extinguishment of debt, restructuring charges, stock-based compensation, certain legal matters, transaction costs, gain on purchase of business, gain on sale of a business 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.

3 unchanged sentences

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.

These shared assets are reported within the Safety & Infrastructure 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.

Fiscal year ended

September 30, 2020

September 30, 2019

September 30, 2018

(in thousands)

External Net Sales

Inter- segment Sales

Adjusted EBITDA

External Net Sales

Inter- segment Sales

Adjusted EBITDA

External Net Sales

Inter- segment Sales

Adjusted EBITDA

Electrical Raceway

September 30, 2021 September 30, 2020 September 30, 2019

(in thousands) External Net Sales Inter- segment Sales Adjusted EBITDA External Net Sales Inter- segment Sales Adjusted EBITDA External Net Sales Inter- segment Sales Adjusted EBITDA

Electrical $ 2,229,862 $ 3,437 $ 873,868 $ 1,267,988 $ 2,559 $ 292,809 $ 1,389,056 $ 1,271 $ 285,217

Safety & Infrastructure 698,152 168 $ 81,827 497,433 90 $ 67,821 527,482 29 $ 77,407

Eliminations — ( 3,605 ) — ( 2,649 ) — ( 1,300 )

Consolidated operations $ 2,928,014 $ — $ 1,765,421 $ — $ 1,916,538 $ —

Capital Expenditures

(in thousands)

September 30, 2020

September 30, 2019

September 30, 2018

September 30, 2020

September 30, 2019

September 30, 2018

Electrical Raceway

Capital Expenditures Total Assets

(in thousands) September 30, 2021 September 30, 2020 September 30, 2019 September 30, 2021 September 30, 2020 September 30, 2019

Electrical $ 34,995 $ 16,067 $ 19,394 $ 1,122,835 $ 794,931 $ 828,119

Safety & Infrastructure 22,407 15,470 14,396 482,942 255,903 296,369

Unallocated 7,072 2,233 1,070 604,322 507,691 312,507

Consolidated operations $ 64,474 $ 33,770 $ 34,860 $ 2,210,099 $ 1,558,525 $ 1,436,995

1 unchanged sentence

Fiscal Year Ended

(in thousands)

September 30, 2020

September 30, 2019

September 30, 2018

(in thousands) September 30, 2021 September 30, 2020 September 30, 2019

Operating segment Adjusted EBITDA

Electrical Raceway

Electrical $ 873,868 $ 292,809 $ 285,217

Safety & Infrastructure 81,827 67,821 77,407

Total $ 955,695 $ 360,630 $ 362,624

Unallocated expenses (a) ( 58,148 ) ( 33,995 ) ( 38,216 )

1 unchanged sentence

Interest expense, net ( 32,899 ) ( 40,062 ) ( 50,473 )

Gain (loss) on extinguishment of debt

Restructuring charges

Loss on extinguishment of debt ( 4,202 ) ( 273 ) —

Stock-based compensation ( 17,047 ) ( 13,064 ) ( 11,798 )

Certain legal matters

Transaction costs

Gain on purchase of business 731 — 7,384

Gain on sale of a business

Other (b) 14,428 3,232 ( 12,505 )

Income before income taxes $ 780,001 $ 201,998 $ 184,669

(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 long-lived assets and net sales by geography were as follows:

Long-lived assets

(in thousands)

September 30, 2020

September 30, 2019

September 30, 2018

September 30, 2020

September 30, 2019

September 30, 2018

Long-lived assets Net sales

(in thousands) September 30, 2021 September 30, 2020 September 30, 2019 September 30, 2021 September 30, 2020 September 30, 2019

United States $ 258,069 $ 203,694 $ 219,614 $ 2,637,118 $ 1,563,258 $ 1,689,194

Other Americas 6,180 146 147 53,151 26,421 33,485

Europe 45,917 41,283 43,207 183,985 132,299 142,279

Asia-Pacific 6,569 1,759 1,998 53,760 43,443 51,580

Total $ 316,735 $ 246,882 $ 264,966 $ 2,928,014 $ 1,765,421 $ 1,916,538

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 any of the last three fiscal years:

Fiscal Year Ended

(in thousands)

September 30, 2020

September 30, 2019

September 30, 2018

(in thousands) September 30, 2021 September 30, 2020 September 30, 2019

Metal Electrical Conduit and Fittings $ 612,137 $ 484,476 $ 546,533

Armored Cable and Fittings

PVC Electrical Conduit & Fittings

Cable Tray & Cable Ladders

Other raceway products

Electrical Raceway

Plastic Pipe and Conduit 893,199 308,561 292,243

Electrical Cable and Flexible Conduit 424,411 322,888 382,464

Other Electrical products

300,115 152,063 167,816

Electrical 2,229,862 1,267,988 1,389,056

Mechanical Pipe 395,289 244,902 259,613

Other MP&S products

Other Safety & Infrastructure products

302,863 252,531 267,869

Safety & Infrastructure 698,152 497,433 527,482

Net sales $ 2,928,014 $ 1,765,421 $ 1,916,538

Risks and Concentrations

2 unchanged sentences

Although the Company generally does not require collateral, the Company performs ongoing credit evaluations of customers and maintains reserves for potential credit losses.

As of September 30, 2021, CED National represented 11 % of the Company’s accounts receivable, with no significant amounts past due.

As of September 30, 2020, one customer, Sonepar Management US, Inc., represented 11 % of the Company’s accounts receivable balance due to increased sales in the last 60 days of the year.

As of September 30, 2019, no single customer represented more than 10% of the Company's accounts receivable balance.

For fiscal 2021, 2020 and 2019, no single customer accounted for more than 10% of sales.

3 unchanged sentences

The Company believes its relationship with its employees is good.

QUARTERLY OPERATING RESULTS (UNAUDITED)

The following table presents unaudited selected quarterly financial data for the years ended September 30, 2020 and September 30, 2019 .

The operating results for any quarter are not necessarily indicative of the results of any future period.

Three Months Ended

(in thousands, except per share data)

December 27, 2019

March 27, 2020

June 26, 2020

September 30, 2020

December 29, 2018

March 30, 2019

June 29, 2019

September 30, 2019

Net income per share

(1) Includes a $7,384 gain on the acquisition of Cor-Tek.

See Note 3, "Acquisitions" for additional information.

(2) The sum of the quarters may not equal the total of the respective year's earnings per share due to changes in the weighted average shares outstanding throughout the year.

SUBSEQUENT EVENTS

On October 22, 2020, the Company acquired the assets of Queen City Plastics, Inc., a manufacturer of PVC conduit, elbows and fittings for the electrical market for an estimated purchase price of $ 7.3 million.

Subsequent to September 30, 2020, the Company repurchased 637,200 shares for $ 15.0 million reducing the Company's share count to 47,409,886 as of November 13, 2020 .

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data