What changed in this filing

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Item 1. Financial Statements

2022-01-31 compared with 2021-08-03 · 161 added, 363 removed, 508 unchanged (51% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three months ended Nine months ended

(in thousands, except per share data) Note June 25, 2021 June 26, 2020 June 25, 2021 June 26, 2020

Three months ended

(in thousands, except per share data) Note December 24, 2021 December 25, 2020

Net sales $ 840,801 $ 511,082

5 unchanged sentences

Interest expense, net 6,918 8,254

Loss on extinguishment of debt 4,202 — 4,202 —

Other income, net 5 ( 308 ) ( 431 )

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three months ended Nine months ended

(in thousands) Note June 25, 2021 June 26, 2020 June 25, 2021 June 26, 2020

Three months ended

(in thousands) Note December 24, 2021 December 25, 2020

Net income $ 204,843 $ 85,066

Other comprehensive income, net of tax:

Other comprehensive (loss) income, net of tax:

Change in foreign currency translation adjustment ( 1,458 ) 7,051

Change in unrecognized loss related to pension benefit plans 4 125 262

Total other comprehensive income 8 2,414 2,468 9,171 1,781

Total other comprehensive (loss) income 8 ( 1,333 ) 7,313

Comprehensive income $ 203,510 $ 92,379

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data) Note June 25, 2021 September 30, 2020

(in thousands, except share and per share data) Note December 24, 2021 September 30, 2021

Current Assets:

14 unchanged sentences

Current Liabilities:

Short-term debt and current maturities of long-term debt 12 $ 4,000 $ —

Accounts payable 233,921 243,164

8 unchanged sentences

Deferred tax liabilities 6 18,141 16,746

Other long-term tax liabilities 1,492 1,619

Pension liabilities 3,168 3,819

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine months ended

(in thousands) Note June 25, 2021 June 26, 2020

Three months ended

(in thousands) Note December 24, 2021 December 25, 2020

Operating activities:

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Amortization of right-of-use assets 3,124 3,352

Loss on disposal of property, plant and equipment 71 6,456

Loss on extinguishment of debt 4,202 —

Other non-cash adjustments to net income 4,050 1,703

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Inventories ( 75,091 ) ( 20,326 )

Prepaid expenses and other current assets ( 11,591 ) ( 2,692 )

Accounts payable ( 13,335 ) 13,060

Accrued and other liabilities ( 23,171 ) 3,280

Other, net 2,911 22,532

2 unchanged sentences

Capital expenditures ( 9,358 ) ( 8,229 )

Insurance proceeds for property, plant and equipment 3,117 789

Proceeds from sale of properties and equipment 432 1,122

Acquisition of businesses, net of cash acquired ( 36,098 ) ( 7,186 )

3 unchanged sentences

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

Proceeds from issuance of long-term debt 12 798,000 —

Payment for debt financing costs and fees ( 11,294 ) —

Issuance of common stock, net of shares withheld for tax ( 24,505 ) ( 3,927 )

3 unchanged sentences

Effects of foreign exchange rate changes on cash and cash equivalents ( 450 ) 2,912

Increase in cash and cash equivalents 112,671 113,894

Decrease in cash and cash equivalents ( 77,330 ) ( 4,051 )

Cash and cash equivalents at beginning of period 576,289 284,471

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Capital expenditures, not yet paid $ 1,501 $ 306

Operating lease right-of-use assets obtained in exchange for lease liabilities $ 1,066 $ 850

Acquisitions of businesses, not yet paid $ 2,864 $ —

See Notes to unaudited condensed consolidated financial statements.

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Net income — — — — 204,843 — 204,843

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

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

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

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

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

Net income — — — — 124,933 — 124,933

Other comprehensive loss — — — — — ( 1,333 ) ( 1,333 )

1 unchanged sentence

Issuance of common stock, net of shares withheld for tax 355 4 — ( 24,509 ) — — ( 24,505 )

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

Net income — — — — 175,297 — 175,297

Other comprehensive income — — — — — 2,414 2,414

Stock-based compensation — — — 3,768 — — 3,768

Issuance of common stock, net of shares withheld for tax 38 3 — 421 — — 424

Repurchase of common stock ( 958 ) ( 10 ) — ( 104,537 ) — ( 104,547 )

Balance as of June 25, 2021 46,103 463 ( 2,580 ) 501,438 211,099 ( 33,383 ) $ 677,037

Balance as of December 24, 2021 45,394 $ 455 $ ( 2,580 ) $ 485,839 $ 488,966 $ ( 30,059 ) $ 942,621

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

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

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

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

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

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

Net income — — — — 39,193 — 39,193

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

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

Issuance of common stock, net of shares withheld for tax 91 1 — 600 — — 601

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

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

Net income — $ — $ — $ — $ 24,078 $ — 24,078

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

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

Issuance of common stock — $ 1 $ — $ 558 $ — $ — 559

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

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

See Notes to unaudited condensed consolidated financial statements.

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

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

The Electrical Raceway segment was renamed as the Electrical segment.

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

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

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

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

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.

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

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

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

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

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

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

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

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

See Note 16, “Segment Information” for additional details.

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

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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.

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

The Company adopted this standard in the first quarter of 2022.

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

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

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

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 a business combination that result in a step up in the tax basis of goodwill.

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.

REVENUE FROM CONTRACTS WITH CUSTOMERS

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

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

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

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

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

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

On December 21, 2021, Atkore HDPE, LLC and Allied Tube and Conduit Corporation, wholly-owned subsidiaries of the Company acquired the assets of Four Star Industries LLC (“Four Star”), for a purchase price of $ 23,195 .

Four Star is a manufacturer of high density polyethylene (HDPE) conduit, primarily serving the telecommunications, utility, infrastructure and datacom markets.

As a result of the acquisition, the Company preliminarily recognized $ 7,138 of goodwill, $ 11,946 of identifiable intangible assets and $ 4,111 of working capital and other net other tangible assets.

As of December 24, 2021, the purchase price allocation has not been finalized as the Company is finalizing working capital, intangible asset and fixed asset fair values.

On December 20, 2021, Columbia-MBF Inc., a wholly-owned subsidiary of the Company acquired all of the outstanding stock of Sasco Tubes & Roll Forming Inc.

(“Sasco”), for a purchase price of $ 15,767 , of which $ 12,903 was paid at closing and additional purchase price payable of $ 2,864 was accrued.

Sasco is a Canadian manufacturer of metal framing and related products serving the electrical, mechanical, construction and solar industries.

As a result of the acquisition, the Company preliminarily recognized $ 6,033 of goodwill, $ 6,715 of identifiable intangible assets and $ 3,019 of working capital and other net other tangible assets.

As of December 24, 2021, the purchase price allocation has not been finalized as the Company is finalizing working capital, intangible asset and fixed asset fair values.

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.

As of June 25, 2021, the purchase price allocation has not been finalized as the Company is refining its estimates for taxes.

The preliminary purchase price was $ 37.0 million.

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

(in thousands)

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.

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) FRE Composites

Fair value of consideration transferred:

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Excess purchase price attributed to goodwill acquired $ 9,948

The Company estimates $ 1.6 million of the goodwill is deductible for tax purposes.

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

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

Goodwill recognized from the acquisitions in fiscal 2021 and fiscal 2022 consists largely of the synergies and economies of scale from integrating this company with existing businesses.

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

FRE Composites Group

FRE Composites

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

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The net periodic benefit credit was as follows:

Three months ended Nine months ended

(in thousands) Note June 25, 2021 June 26, 2020 June 25, 2021 June 26, 2020

Three months ended

(in thousands) Note December 24, 2021 December 25, 2020

Interest cost $ 739 $ 682

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Other income, net consisted of the following:

Three months ended Nine months ended

(in thousands) June 25, 2021 June 26, 2020 June 25, 2021 June 26, 2020

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

Three months ended

(in thousands) December 24, 2021 December 25, 2020

Undesignated foreign currency derivative instruments ( 176 ) 2,617

Foreign exchange (gain) loss on intercompany loans ( 294 ) 452 ( 3,459 ) ( 72 )

Foreign exchange loss (gain) on intercompany loans 319 ( 2,457 )

Pension-related benefits ( 451 ) ( 591 )

Gain on purchase of business — — ( 731 ) —

Other income, net $ ( 308 ) $ ( 431 )

For the three months ended June 25, 2021 and June 26, 2020, the Company’s effective tax rate attributable to income before income taxes was 26.0 % and 26.5 %, respectively.

For the three months ended June 25, 2021 and June 26, 2020, the Company’s income tax expense was $ 61,654 and $ 8,672 respectively.

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

For the nine months ended June 25, 2021 and June 26, 2020, the Company’s effective tax rate attributable to income before income taxes was 24.8 % and 22.9 %, respectively.

For the nine months ended June 25, 2021 and June 26, 2020, the Company’s tax expense was $ 126,922 and $ 29,112 , respectively.

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

For the three months ended December 24, 2021 and December 25, 2020, the Company’s effective tax rate attributable to income before income taxes was 21.8 % and 24.1 %, respectively.

For the three months ended December 24, 2021 and December 25, 2020, the Company’s income tax expense was $ 56,975 and $ 26,964 respectively.

The decrease in the current period effective tax rate was primarily driven by an increase in the excess tax benefit associated with stock compensation.

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

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

During the nine months ended June 25, 2021, the balance of unrecognized tax benefits decreased by $ 127 primarily due to the lapse in the statute of limitations related to certain prior tax years.

For the nine months ended June 25, 2021, the Company made no additional provision for U.S.

During the three months ended December 24, 2021, the balance of unrecognized tax benefits increased by $ 1,218 primarily due to the accrual of state reserves.

For the three months ended December 24, 2021, the Company made no additional provision for U.S.

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

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

Three months ended Nine months ended

(in thousands, except per share data) June 25, 2021 June 26, 2020 June 25, 2021 June 26, 2020

Three months ended

(in thousands, except per share data) December 24, 2021 December 25, 2020

Net income $ 204,843 $ 85,066

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Non-participating employee stock options (1)

684 612 742 842

Diluted weighted average common shares outstanding 46,575 47,547

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Diluted earnings per share $ 4.32 $ 1.75

(1) Stock options to purchase approximately 0.0 million and 0.3 million shares of common stock were outstanding during the three months ended June 25, 2021 and June 26, 2020, respectively, but were not included in the calculation of diluted earnings per share as the impact of these options would have been anti-dilutive.

Stock options to purchase approximately 0.0 million and 0.1 million shares of common stock were outstanding during the nine months ended June 25, 2021 and June 26, 2020, respectively, but were not included in the calculation of diluted earnings per share as the impact of these options would have been anti-dilutive.

(1) Stock options to purchase approximately 0.0 million and 0.1 million shares of common stock were outstanding during the three months ended December 24, 2021 and December 25, 2020, respectively, but were not included in the calculation of diluted earnings per share as the impact of these options would have been anti-dilutive.

ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table presents the changes in accumulated other comprehensive loss by component for the three months ended June 25, 2021 and June 26, 2020.

(in thousands) Defined benefit

pension items Currency

adjustments Total

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

Other comprehensive income before reclassifications — 2,152 2,152

Amounts reclassified from accumulated other

comprehensive loss, net of tax 262 — 262

Net current period other comprehensive income 262 2,152 2,414

Balance as of June 25, 2021 $ ( 29,975 ) $ ( 3,408 ) $ ( 33,383 )

(in thousands) Defined benefit

pension items Currency

adjustments Total

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

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

Amounts reclassified from accumulated other

comprehensive loss, net of tax 216 — 216

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

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

The following table presents the changes in accumulated other comprehensive loss by component for the nine months ended June 25, 2021 and June 26, 2020.

The following table presents the changes in accumulated other comprehensive loss by component for the three months ended December 24, 2021 and December 25, 2020.

(in thousands) Defined Benefit

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

Other comprehensive income before reclassifications — 8,385 8,385

Other comprehensive loss before reclassifications — ( 1,458 ) ( 1,458 )

Amounts reclassified from accumulated other

comprehensive loss, net of tax 786 — 786

Net current period other comprehensive income 786 8,385 9,171

Balance as of June 25, 2021 $ ( 29,975 ) $ ( 3,408 ) $ ( 33,383 )

comprehensive income, net of tax 125 — 125

Net current period other comprehensive (loss) income 125 ( 1,458 ) ( 1,333 )

Balance as of December 24, 2021 $ ( 19,193 ) $ ( 10,866 ) $ ( 30,059 )

(in thousands) Defined Benefit

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Amounts reclassified from accumulated other

comprehensive loss, net of tax 649 — 649

comprehensive income, net of tax 262 — 262

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

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

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

INVENTORIES, NET

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

Approximately 78 % and 73 % of the Company’s inventories were valued at the lower of LIFO cost or market at June 25, 2021 and September 30, 2020, respectively.

Interim LIFO determinations, including those at June 25, 2021, are based on management’s estimates of future inventory levels and costs for the remainder of the current fiscal year.

(in thousands) June 25, 2021 September 30, 2020

Approximately 82 % and 81 % of the Company’s inventories were valued at the

lower of LIFO cost or market at December 24, 2021 and September 30, 2021, respectively.

Interim LIFO determinations, including those at December 24, 2021, are based on management’s estimates of future inventory levels and costs for the remainder of the current fiscal year.

(in thousands) December 24, 2021 September 30, 2021

Purchased materials and manufactured parts, net $ 102,737 $ 105,460

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Inventories, net $ 362,099 $ 285,989

Total inventories would be $ 71,473 higher and $ 4,418 lower than reported as of June 25, 2021 and September 30, 2020, respectively, if the first-in, first-out method was used for all inventories.

As of June 25, 2021, and September 30, 2020, the excess and obsolete inventory reserve was $ 12,821 and $ 14,533 , respectively.

Total inventories would be $ 135,488 higher and $ 108,911 higher than reported as of December 24, 2021 and September 30, 2021, respectively, if the first-in, first-out method was used for all inventories.

As of December 24, 2021, and September 30, 2021, the excess and obsolete inventory reserve was $ 15,421 and $ 11,780 , respectively.

PROPERTY, PLANT AND EQUIPMENT

As of June 25, 2021, and September 30, 2020, property, plant and equipment and accumulated depreciation were as follows:

(in thousands) June 25, 2021 September 30, 2020

As of December 24, 2021, and September 30, 2021, property, plant and equipment and accumulated depreciation were as follows:

(in thousands) December 24, 2021 September 30, 2021

Land $ 22,965 $ 23,043

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Property, plant and equipment, net $ 276,858 $ 275,622

Depreciation expense for the three months ended June 25, 2021 and June 26, 2020 totaled $ 11,459 and $ 10,290 respectively.

Depreciation expense for the nine months ended June 25, 2021 and June 26, 2020 totaled $ 33,412 and $ 31,314 , respectively.

Depreciation expense for the three months ended December 24, 2021 and December 25, 2020 totaled $ 11,817 and $ 10,783 respectively.

GOODWILL AND INTANGIBLE ASSETS

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(in thousands) Electrical Safety & Infrastructure Total

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

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

Goodwill acquired during year 7,138 6,033 13,171

Exchange rate effects ( 325 ) 34 ( 291 )

Balance as of June 25, 2021 $ 157,968 $ 43,577 $ 201,545

Goodwill balances as of October 1, 2020 and June 25, 2021 include $ 3,924 and $ 43,000 of accumulated impairment losses within the Electrical and Safety & Infrastructure segments, respectively.

Balance as of December 24, 2021 $ 162,284 $ 49,644 $ 211,928

Goodwill balances as of October 1, 2021 and December 24, 2021 include $ 3,924 and $ 43,000 of accumulated impairment losses within the Electrical and Safety & Infrastructure segments, respectively.

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

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

June 25, 2021 September 30, 2020

December 24, 2021 September 30, 2021

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

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

Amortization expense for the three months ended June 25, 2021 and June 26, 2020 was $ 8,707 and $ 8,026 , respectively.

Amortization expense for the nine months ended June 25, 2021 and June 26, 2020 was $ 25,063 and $ 24,210 , respectively.

Amortization expense for the three months ended December 24, 2021 and December 25, 2020 was $ 8,229 and $ 8,260 , respectively.

Expected amortization expense for intangible assets for the remainder of fiscal 2022 and over the next five years and thereafter is as follows:

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

Debt as of June 25, 2021 and September 30, 2020 was as follows:

(in thousands) June 25, 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 398,024 —

Debt as of December 24, 2021 and September 30, 2021 was as follows:

(in thousands) December 24, 2021 September 30, 2021

Senior Secured Term Loan Facility due May 26, 2028 371,167 371,095

Senior Notes due June 2031 400,000 400,000

1 unchanged sentence

Total debt $ 758,924 $ 758,386

Current portion 4,000 —

Long-term debt $ 758,924 $ 758,386

1 unchanged sentence

AII is the borrower under the ABL Credit Facility which is guaranteed by the Company and all other subsidiaries of the Company (other than AII) that are guarantors of the Senior Notes.

AII’s availability under the ABL Credit Facility was $ 315,499 and $ 265,899 as of June 25, 2021 and September 30, 2020, respectively.

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 previously announced 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.

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 %.

The New Senior Secured Term Loan Facility will be payable in consecutive quarterly installments in the amount of 0.25 % of the aggregate initial principal amount of $ 400 million with all unpaid aggregate principal amounts paid at maturity.

ABL Credit 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 0.25 % to 0.30 % depending on the remaining availability under the ABL Credit Facility and (iv) made certain other changes agreed with the lenders under the ABL Credit Facility.

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 million and $ 4 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.

AII’s availability under the ABL Credit Facility was $ 315,499 as of December 24, 2021 and September 30, 2021.

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 balances denominated in a foreign currency.

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

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

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

1 unchanged sentence

See Note 5, “Other Income, net” for further detail.

The total notional amounts of undesignated forward currency contracts were £ 36.1 and £ 43.3 million as of June 25, 2021 and September 30, 2020, respectively.

The total notional amounts of undesignated forward currency contracts were £ 37.4 million and £ 37.4 million as of December 24, 2021 and September 30, 2021, respectively.

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

1 unchanged sentence

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

June 25, 2021 September 30, 2020

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

December 24, 2021 September 30, 2021

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

Cash equivalents $ 314,155 $ — $ 489,987 $ —

3 unchanged sentences

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

June 25, 2021 September 30, 2020

December 24, 2021 September 30, 2021

(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 $ 400,000 $ 399,300 $ — $ —

Senior Secured Term Loan Facility due May 26, 2028 $ 373,000 $ 371,601 $ 373,000 $ 371,486

Senior Notes due June 2031 $ 400,000 $ 410,864 $ 400,000 $ 415,828

Total Debt $ 773,000 $ 782,465 $ 773,000 $ 787,314

In determining the approximate fair value of its long-term debt, the Company used the trading values among financial institutions, and these values fall within Level 2 of the fair value hierarchy.

The carrying value of the ABL Credit Facility

approximates fair value due to it being a market-linked variable rate debt.

The carrying values of the New Senior Secured Term Loan Facility and the Senior Notes approximate fair value.

The carrying value of the ABL Credit Facility approximates fair value due to it being a market-linked variable rate debt.

COMMITMENTS AND CONTINGENCIES

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

As of June 25, 2021, such obligations were $ 291,715 for the rest of fiscal year 2021 and $ 12,923 for fiscal year 2022 and beyond.

As of December 24, 2021, such obligations were $ 361,295 for the rest of fiscal year 2022 and $ 9,789 for fiscal year 2023 and beyond.

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

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 $ 729 and $ 597 as of June 25, 2021 and September 30, 2020, respectively.

As of June 25, 2021, the Company believes that the range of aggregate reasonably possible losses for Special Products Claims and other product liabilities is between $ 1,000 and $ 8,000 .

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

Insurable Liabilities — The Company maintains policies with various insurance companies for its workers’ compensation, product, property, general, auto, and executive liability risks.

The insurance policies that the Company maintains have various retention levels and excess coverage limits.

The establishment and update of liabilities for unpaid claims, including claims incurred but not reported, is based on management's estimate as a result of the assessment by the Company's claim administrator of each claim and an independent actuarial valuation of the nature and severity of total claims.

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 — 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 International Ltd.

(“Tyco”), the Company’s former parent, 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 the Special Product Claims and since 2019 has defended and indemnified the Company on Special Products Claims as required.

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

During the year ended September 30, 2020, one of the Company’s manufacturing facilities experienced a flood which resulted in damage to certain property, plant and equipment.

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

The Company recorded an expense of $ 6,046 for losses related to fully written off property, plant and equipment, with a related insurance recovery of $ 5,046 within selling, general and administrative expenses in its consolidated statements of operations for the year ended September 30, 2020.

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

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

The amount was recorded as other income within the condensed consolidated statements of operations for the nine months ended June 25, 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.

2 unchanged sentences

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

The Company had outstanding letters of credit totaling $ 9,501 supporting workers’ compensation and general liability insurance policies as of June 25, 2021.

The Company also had surety bonds primarily related to performance guarantees on supply agreements and construction contracts, and payment of duties and taxes totaling $ 18,331 as of June 25, 2021.

The Company had outstanding letters of credit totaling $ 9,501 supporting workers’ compensation and general liability insurance policies as of December 24, 2021.

The Company also had surety bonds primarily related to performance guarantees on supply agreements and construction contracts, and payment of duties and taxes totaling $ 1,852 as of December 24, 2021.

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

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.

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.

In the normal course of business, the Company is liable for product performance and contract completion.

1 unchanged sentence

SEGMENT INFORMATION

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.

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.

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.

8 unchanged sentences

Three months ended

June 25, 2021 June 26, 2020

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

Electrical $ 660,198 $ 965 $ 267,824 $ 271,521 $ 630 $ 55,549

Safety & Infrastructure 193,460 32 22,365 113,378 2 14,150

Eliminations — ( 997 ) — ( 632 )

Consolidated operations $ 853,658 $ — $ 384,899 $ —

Nine months ended

June 25, 2021 June 26, 2020

December 24, 2021 December 25, 2020

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

4 unchanged sentences

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

Three months ended Nine months ended

(in thousands) June 25, 2021 June 26, 2020 June 25, 2021 June 26, 2020

Three months ended

(in thousands) December 24, 2021 December 25, 2020

Operating segment Adjusted EBITDA

5 unchanged sentences

Interest expense, net ( 6,918 ) ( 8,254 )

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

Stock-based compensation ( 3,427 ) ( 5,522 )

3 unchanged sentences

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

The Company’s net sales by geography were as follows for the nine months ended June 25, 2021 and June 26, 2020:

Three months ended Nine months ended

(in thousands) June 25, 2021 June 26, 2020 June 25, 2021 June 26, 2020

The Company’s net sales by geography were as follows for the three months ended December 24, 2021 and December 25, 2020:

Three months ended

(in thousands) December 24, 2021 December 25, 2020

United States $ 757,398 $ 454,764

3 unchanged sentences

Total $ 840,801 $ 511,082

The table below shows the amount of net sales from external customers for each of the Company’s product categories which accounted for 10% or more of consolidated net sales in either period for the nine months ended June 25, 2021 and June 26, 2020:

Three months ended Nine months ended

(in thousands) June 25, 2021 June 26, 2020 June 25, 2021 June 26, 2020

Three months ended

(in thousands) December 24, 2021 December 25, 2020

Metal Electrical Conduit and Fittings $ 149,876 $ 124,829

Armored Cable and Fittings 106,645 60,141 265,597 226,579

PVC Electrical Conduit and Fittings 270,527 71,914 608,201 216,143

International Cable Management Products 57,462 31,669 148,723 109,303

Electrical Cable & Flexible Conduit 115,695 73,512

Plastic Pipe and Conduit 290,179 140,535

Other Electrical products 84,594 47,444

19 unchanged sentences

Currently, we have no COVID-19 related facility closures as we look to serve our current levels of demand.

In response to COVID-19, we have implemented a variety of countermeasures to promote the health and safety of our employees during this pandemic, including health screening, physical distancing practices, enhanced cleaning, use of personal protective equipment, business travel restrictions, and remote work capabilities.

Results of Operations

The consolidated results of operations for the three months ended June 25, 2021 and June 26, 2020 were as follows:

The consolidated results of operations for the three months ended December 24, 2021 and December 25, 2020 were as follows:

Three months ended

($ in thousands) June 25, 2021 June 26, 2020 Change % Change

($ in thousands) December 24, 2021 December 25, 2020 Change % Change

Net sales $ 840,801 $ 511,082 $ 329,719 64.5 %

5 unchanged sentences

Interest expense, net 6,918 8,254 (1,336) (16.2) %

Loss on extinguishment of debt 4,202 — 4,202 100.0 %

Other income, net (308) (431) 123 (28.5) %

7 unchanged sentences

Net sales 64.5 %

Net sales increased by $468.8 million, or 121.8%, to $853.7 million for the three months ended June 25, 2021, compared to $384.9 million for the three months ended June 26, 2020.

The increase in net sales is primarily attributed to increased average selling prices of $342.8 million which were mostly driven by the PVC electrical conduit and fittings product category within the Electrical segment and increased net sales of $26.7 million due to the acquisitions of Queen City Plastics and FRE Composites Group.

Pricing for PVC products, as well as other parts of the business, are expected to return to more normal historical levels over time, but that time is uncertain.

The increase in net sales was also driven by an increase in sales volume of $90.9 million across nearly all product categories within both the Electrical and the Safety & Infrastructure segments.

Net sales increased by $329.7 million, or 64.5%, to $840.8 million for the three months ended December 24, 2021, compared to $511.1 million for the three months ended December 25, 2020.

The increase in net sales is primarily attributed to increased average selling prices across the Company’s products of $368.0 million and increased net sales of $10.7 million due to the acquisitions of Queen City Plastics and FRE Composites Group in the prior year.

These increases are offset by decreased sales volume of $50.7 million across varying product categories within both the Electrical and the Safety & Infrastructure segments.

Pricing for PVC products, as well as other parts of the business, is expected to return to more normal historical levels over time, but that time is uncertain.

Cost of sales

4 unchanged sentences

Cost of sales 51.0 %

Cost of sales increased by $225.3 million, or 77.9%, to $514.4 million for the three months ended June 25, 2021 compared to $289.1 million for the three months ended June 26, 2020.

The increase was primarily due to higher input costs of steel, copper and PVC resin of $124.0 million, higher sales volume of $68.0 million and due to the acquisitions of Queen City Plastics and FRE Composites Group of $10.7 million.

Cost of sales increased by $164.1 million, or 51.0%, to $486.0 million for the three months ended December 24, 2021 compared to $321.9 million for the three months ended December 25, 2020.

The increase was primarily due to higher input costs of steel, copper and PVC resin of $172.2 million and the prior year acquisitions of Queen City Plastics and FRE Composites Group of $5.7 million partially offset by lower sales volume of $33.6 million across varying product categories within both the Electrical and the Safety & Infrastructure segments.

Selling, general and administrative

Selling, general and administrative expenses increased by $35.7 million, or 77.3%, to $81.8 million for the three months ended June 25, 2021 compared to $46.2 million for the three months ended June 26, 2020.

The increase was primarily due to higher sales commission expense of $9.1 million, higher variable compensation of $7.1 million, higher stock compensation expense of $2.5 million, higher acquisition related spend of $1.3 million driven by the acquisitions of Queen City Plastics and the FRE Composites Group, and the remainder primarily being driven by the tight controls on expenditures put into place in the prior year at the onset of the COVID-19 pandemic.

Selling, general and administrative expenses increased by $17.1 million, or 28.0%, to $78.2 million for the three months ended December 24, 2021 compared to $61.1 million for the three months ended December 25, 2020.

The increase was primarily due to higher sales commission expense of $8.0 million, increased general spending on business improvement initiatives, including digital initiatives, of $3.6 million, and higher variable compensation of $2.1 million.

Intangible asset amortization

Intangible asset amortization expense increased to $8.7 million for the three months ended June 25, 2021 compared to $8.0 million for the three months ended June 26, 2020.

Intangible asset amortization expense remained fairly consistent to $8.2 million for the three months ended December 24, 2021 compared to $8.3 million for the three months ended December 25, 2020.

Interest expense, net

Interest expense, net decreased by $1.3 million, or 14.1% to $8.1 million for the three months ended June 25, 2021 compared to $9.4 million for the three months ended June 26, 2020.

The decrease is primarily due to the Company’s principal prepayments in fiscal 2020 and 2021, resulting in a lower principal balance in fiscal 2021 from which interest expense was derived.

Interest expense, net decreased by $1.3 million, or 16.2% to $6.9 million for the three months ended December 24, 2021 compared to $8.3 million for the three months ended December 25, 2020.

The decrease is primarily due to interest expense being derived from a lower average principal balance resulting from the Company’s fiscal 2021 debt restructuring transactions.

Other income, net

Other income, net remained consistent at $0.5 million for the three months ended June 25, 2021 compared to $0.5 million for the three months ended June 26, 2020.

Other income, net remained consistent at $0.3 million for the three months ended December 24, 2021 compared to $0.4 million for the three months ended December 25, 2020.

Income tax expense

The Company’s income tax rate decreased to 26.0% for the three months ended June 25, 2021 compared to 26.5% for the three months ended June 26, 2020.

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

The Company’s income tax rate decreased to 21.8% for the three months ended December 24, 2021 compared to 24.1% for the three months ended December 25, 2020.

The decrease in the current period effective tax rate was primarily driven by an increase in the excess tax benefit associated with stock compensation.

Segment Results

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 implemented the Realignment of its segment financial reporting structure.

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

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

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

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

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

2 unchanged sentences

Three months ended

($ in thousands) June 25, 2021 June 26, 2020 Change % Change

($ in thousands) December 24, 2021 December 25, 2020 Change % Change

Net sales $ 641,683 $ 387,145 $ 254,538 65.7 %

6 unchanged sentences

Net sales 65.7 %

Net sales increased by $389.0 million, or 142.9%, to $661.2 million for the three months ended June 25, 2021 compared to $272.2 million for the three months ended June 26, 2020.

The increase in net sales is primarily attributed to increased average selling prices of $290.6 million which were mostly driven by the PVC electrical conduit and fittings category, the metal electrical conduit and fittings product categories and increased net sales of $26.5 million from the acquisitions of Queen City Plastics and FRE Composites Group.

Pricing for PVC products, as well as other parts of the business, are expected to return to more normal historical levels over time, but that time is uncertain.

Additionally, sales volume increased $64.1 million driven by increased volumes across all product categories.

Net sales increased by $254.5 million, or 65.7%, to $641.7 million for the three months ended December 24, 2021 compared to $387.1 million for the three months ended December 25, 2020.

The increase in net sales is primarily attributed to increased average selling prices of $265.8 million across the Electrical product lines and increased net sales of $10.6 million from the prior period acquisitions of Queen City Plastics and FRE Composites Group.

These increases were partially offset by decreased sales volume of $23.4 million.

Pricing for PVC products, as well as other parts of the business, is expected to return to more normal historical levels over time, but that time is uncertain.

Adjusted EBITDA

Adjusted EBITDA for the three months ended June 25, 2021 increased by $212.3 million, or 382.1%, to $267.8 million from $55.5 million for the three months ended June 26, 2020.

Adjusted EBITDA margins increased to 40.5% for the three months ended June 25, 2021 compared to 20.4% for the three months ended June 26, 2020.

The increase in Adjusted EBITDA and Adjusted EBITDA margins was largely due to higher average selling prices in relation to changes in input costs, operational efficiencies and contributions from the acquisitions of Queen City Plastics and FRE Composites Group.

Adjusted EBITDA for the three months ended December 24, 2021 increased by $146.3 million, or 109.8%, to $279.5 million from $133.3 million for the three months ended December 25, 2020.

Adjusted EBITDA margins increased to 43.6% for the three months ended December 24, 2021 compared to 34.4% for the three months ended December 25, 2020.

The increase in Adjusted EBITDA and Adjusted EBITDA margins was largely due to higher average selling prices over input costs.

Safety & Infrastructure

Three months ended

($ in thousands) June 25, 2021 June 26, 2020 Change % Change

($ in thousands) December 24, 2021 December 25, 2020 Change % Change

Net sales $ 200,510 $ 124,765 $ 75,745 60.7 %

5 unchanged sentences

Net sales 60.7 %

Net sales increased by $80.1 million, or 70.7%, for the three months ended June 25, 2021 to $193.5 million compared to $113.4 million for the three months ended June 26, 2020.

The increase is primarily attributed to increased average selling prices of $52.2 million driven by higher input costs of steel, and by higher volumes of $26.8 million primarily driven by increases across all product categories.

Adjusted EBITDA

Adjusted EBITDA increased by $8.2 million, or 58.1%, to $22.4 million for the three months ended June 25, 2021 compared to $14.2 million for the three months ended June 26, 2020.

Adjusted EBITDA margins decreased to 11.6% for the

three months ended June 25, 2021 compared to 12.5% for the three months ended June 26, 2020.

The Adjusted EBITDA increase is primarily due to the price and volume increases discussed above.

The consolidated results of operations for the nine months ended June 25, 2021 and June 26, 2020 were as follows:

Nine months ended

($ in thousands) June 25, 2021 June 26, 2020 Change % Change

Net sales $ 2,004,283 $ 1,288,001 $ 716,282 55.6 %

Cost of sales 1,235,970 943,741 292,229 31.0 %

Gross profit 768,313 344,260 424,053 123.2 %

Selling, general and administrative 210,250 164,734 45,516 27.6 %

Intangible asset amortization 25,063 24,210 853 3.5 %

Operating income 533,000 155,316 377,684 243.2 %

Interest expense, net 24,760 30,605 (5,845) (19.1) %

Loss on extinguishment of debt 4,202 — 4,202 100.0 %

Other income, net (8,180) (2,462) (5,718) 232.3 %

Income before income taxes 512,218 127,173 385,045 302.8 %

Income tax expense 126,922 29,112 97,810 336.0 %

Net income $ 385,296 $ 98,061 $ 287,235 292.9 %

Average selling prices 45.5 %

Foreign exchange 1.1 %

Acquisitions 4.0 %

Net sales 55.6 %

Net sales increased by $716.3 million, or 55.6%, to $2,004.3 million for the nine months ended June 25, 2021, compared to $1,288.0 million for the nine months ended June 26, 2020.

The increase in net sales is primarily attributed to increased average selling prices of $586.6 million which were mostly driven by the PVC electrical conduit and fittings product category within the Electrical segment and increased net sales of $51.4 million from the acquisitions of Queen City Plastics and FRE Composites Group.

Pricing for PVC products, as well as other parts of the business, are expected to return to more normal historical levels over time, but that time is uncertain.

The increase in net sales was also driven by increases in sales volumes across the majority of product categories in both the Electrical and the Safety & Infrastructure segments.

Cost of sales

Average input costs 21.5 %

Foreign exchange 1.2 %

Acquisitions 2.3 %

Cost of sales 31.0 %

Cost of sales increased by $292.2 million, or 31.0% to $1,236.0 million for the nine months ended June 25, 2021 compared to $943.7 million for the nine months ended June 26, 2020.

The increase was primarily due to higher sales volumes

of $47.1 million, higher input costs for steel, copper and resin of $202.8 million and the acquisitions of Queen City Plastics and FRE Composites Group of $21.5 million.

Selling, general and administrative

Selling, general and administrative expenses increased by $45.5 million, or 27.6% to $210.3 million for the nine months ended June 25, 2021 compared to $164.7 million for the nine months ended June 26, 2020.

The increase was primarily due to higher sales commission expense of $12.3 million, higher variable compensation of $13.6 million, higher stock compensation expense of $4.8 million and the acquisitions of Queen City Plastics and the FRE Composites Group of $3.0 million, partially offset by productivity efficiencies of $5.4 million.

The majority of the remaining increase was primarily driven by the tight controls on expenditures put into place in the prior year at the onset of the COVID-19 pandemic.

Intangible asset amortization

Intangible asset amortization expense increased to $25.1 million for the nine months ended June 25, 2021 compared to $24.2 million for the nine months ended June 26, 2020.

Interest expense, net

Interest expense, net, decreased by $5.8 million, or 19.1% to $24.8 million for the nine months ended June 25, 2021 compared to $30.6 million for the nine months ended June 26, 2020.

The decrease is primarily due to the Company’s principal prepayments in fiscal 2020 and 2021, resulting in a lower principal balance in fiscal 2021 from which interest expense was derived.

Other income, net

Other income, net increased by $5.7 million to $8.2 million for the nine months ended June 25, 2021 compared to $2.5 million for the nine months ended June 26, 2020.

The increase was primarily due to a $6.0 million business interruption insurance recovery from a flood at one of the Company’s manufacturing facilities.

See Note 14, “Commitments and Contingencies” to the accompanying condensed consolidated financial statements included elsewhere in this Quarterly Report.

Income tax expense

The Company’s income tax rate increased to 24.8% for the nine months ended June 25, 2021 compared to 22.9% for the nine months ended June 26, 2020.

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

Segment Results

Nine months ended

($ in thousands) June 25, 2021 June 26, 2020 Change % Change

Net sales $ 1,535,808 $ 919,916 $ 615,892 67.0 %

Adjusted EBITDA $ 589,923 $ 200,901 $ 389,022 193.6 %

Adjusted EBITDA margin 38.4 % 21.8 %

Average selling prices 55.8 %

Foreign exchange 1.5 %

Acquisitions 5.6 %

Net sales 67.0 %

Net sales increased by $615.9 million, or 67.0%, to $1,535.8 million for the nine months ended June 25, 2021 compared to $919.9 million for the nine months ended June 26, 2020.

The increase in net sales is primarily attributed to increased average selling prices of $513.3 million which were mostly driven by the PVC electrical conduit and fittings and the metal electrical conduit and fittings product categories, increased sales volume across most product categories and increased net sales of $51.2 million from the acquisitions of Queen City Plastics and FRE Composites Group.

Adjusted EBITDA

Adjusted EBITDA for the nine months ended June 25, 2021 increased by $389.0 million, or 193.6%, to $589.9 million from $200.9 million for the nine months ended June 26, 2020.

Adjusted EBITDA margins increased to 38.4% for the nine months ended June 25, 2021 compared to 21.8% for the nine months ended June 26, 2020.

Safety & Infrastructure

Nine months ended

($ in thousands) June 25, 2021 June 26, 2020 Change % Change

Net sales $ 470,957 $ 370,018 $ 100,939 27.3 %

Adjusted EBITDA $ 52,810 $ 50,765 $ 2,045 4.0 %

Adjusted EBITDA margin 11.2 % 13.7 %

Average selling prices 19.8 %

Acquisitions 0.1 %

Net sales 27.3 %

Net sales increased by $100.9 million, or 27.3%, for the nine months ended June 25, 2021 to $471.0 million compared to $370.0 million for the nine months ended June 26, 2020.

The increase is primarily attributed to increased average selling prices of $73.3 million primarily driven by higher input costs of steel as well as increases in sales volumes across most product categories.

Net sales increased by $75.7 million, or 60.7%, for the three months ended December 24, 2021 to $200.5 million compared to $124.8 million for the three months ended December 25, 2020.

The increase is primarily attributed to increased average selling prices of $102.2 million driven by higher input costs of steel partially offset by lower volumes of $27.4 million primarily driven by decreases in the mechanical pipe product line.

Adjusted EBITDA

Adjusted EBITDA increased $2.0 million, or 4.0%, to $52.8 million for the nine months ended June 25, 2021 compared to $50.8 million for the nine months ended June 26, 2020.

Adjusted EBITDA margins decreased to 11.2% for the nine months ended June 25, 2021 compared to 13.7% for the nine months ended June 26, 2020.

The Adjusted EBITDA increase was primarily due to the increase in sales volume and average selling prices discussed above.

Adjusted EBITDA increased by $13.2 million, or 92.5%, to $27.4 million for the three months ended December 24, 2021 compared to $14.3 million for the three months ended December 25, 2020.

Adjusted EBITDA margins increased to 13.7% for the three months ended December 24, 2021 compared to 11.4% for the three months ended December 25, 2020.

The Adjusted EBITDA increase is primarily due to the price increases, partially offset by lower volume, discussed above.

Liquidity and Capital Resources

We believe we have sufficient liquidity to support our ongoing operations and to invest in future growth and create value for stockholders.

Our cash and cash equivalents were $397.1 million as of June 25, 2021, of which $69.1 million was held at non-U.S.

Our cash and cash equivalents were $499.0 million as of December 24, 2021, of which $54.6 million was held at non-U.S.

subsidiaries.

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We have access to the ABL Credit Facility to fund operational needs.

As of June 25, 2021, there were no outstanding borrowings under the ABL Credit Facility and $9.5 million of letters of credit issued under the ABL Credit Facility.

The borrowing base was estimated to be $325.0 million and approximately $315.5 million was available under the ABL Credit Facility as of June 25, 2021.

As of December 24, 2021, there were no outstanding borrowings under the ABL Credit Facility and $9.5 million of letters of credit issued under the ABL Credit Facility.

The borrowing base was estimated to be $325.0 million and approximately $315.5 million was available under the ABL Credit Facility as of December 24, 2021.

Outstanding letters of credit count as utilization of the commitments under the ABL Credit Facility and reduce the amount available for borrowings.

The agreements governing the First Lien Term Loan Facility and the ABL Credit Facility (collectively, the "Credit Facilities") contain covenants that limit or restrict AII’s ability to incur additional indebtedness, repurchase debt, incur liens, sell assets, make certain payments (including dividends) and enter into transactions with affiliates.

The agreements governing the Senior Secured Term Loan Facility and the ABL Credit Facility (collectively, the "Credit Facilities") contain covenants that limit or restrict AII’s ability to incur additional indebtedness, repurchase debt, incur liens, sell assets, make certain payments (including dividends) and enter into transactions with affiliates.

AII has been in compliance with the covenants under the agreements for all periods presented.

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The ability of our subsidiaries to make distributions and dividends to us depends on their operating results, cash requirements and financial and general business conditions, as well as restrictions under the laws of our subsidiaries' jurisdictions.

The agreements governing the ABL Credit Facility significantly restrict the ability of our subsidiaries, including AII, to pay dividends, make loans or otherwise transfer assets from AII and, in turn, to us.

Further, AII’s subsidiaries are permitted under the terms of the ABL Credit Facility to incur additional indebtedness that may restrict or prohibit the making of distributions, the payment of dividends or the making of loans by such subsidiaries to AII and, in turn, to us.

The First Lien Term Loan Facility requires AII to meet a certain consolidated coverage ratio on an incurrence basis in connection with additional indebtedness.

The agreements governing the Credit Facilities significantly restrict the ability of our subsidiaries, including AII, to pay dividends, make loans or otherwise transfer assets from AII and, in turn, to us.

Further, AII's subsidiaries are permitted under the terms of the Credit Facilities to incur additional indebtedness that may restrict or prohibit the making of distributions, the payment of dividends or the making of loans by such subsidiaries to AII and, in turn, to us.

The Senior Secured Term Loan Facility requires AII to meet a certain consolidated coverage ratio on an incurrence basis in connection with additional indebtedness.

The ABL Credit Facility contains limits on additional indebtedness based on various conditions for incurring the additional debt.

AII has been in compliance with the covenants under the agreements for all periods presented.

The table below summarizes cash flow information derived from our statements of cash flows for the periods indicated:

Nine months ended

(in thousands) June 25, 2021 June 26, 2020

Three months ended

(in thousands) December 24, 2021 December 25, 2020

Cash flows provided by (used in):

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Operating activities

During the nine months ended June 25, 2021, the Company was provided $318.6 million by operating activities compared to $156.0 million during the nine months ended June 26, 2020.

During the three months ended December 24, 2021, the Company was provided $97.2 million by operating activities compared to $86.3 million during the three months ended December 25, 2020.

The $10.9 million increase in cash provided was primarily due to higher cash flows from the increase in operating income of $148.6 million.

This was partially offset by a $202.0 million increase in cash used in working capital primarily driven by higher sales.

This was partially offset by a $57.0 million increase in cash used in working capital primarily due to higher inventory build during the first quarter of fiscal 2022.

Investing activities

During the nine months ended June 25, 2021, the Company used $74.3 million in investing activities compared to $24.8 million during the nine months ended June 26, 2020.

The increase in cash used in investing activities is primarily due to the acquisition of Queen City Plastics for $6.2 million and FRE Composites Group for $37.0 million, as well as increased capital expenditure of $8.7 million driven by investments in digital initiatives during the nine months ended June 25, 2021.

During the three months ended December 24, 2021, the Company used $45.0 million in investing activities compared to $14.3 million during the three months ended December 25, 2020.

The increase in cash used in investing activities is primarily due to the acquisitions of Sasco and Four Star for total cash paid of $36.1 million during the three months ended December 24, 2021.

Financing Activities

During the nine months ended June 25, 2021, the Company used $135.4 million in financing activities compared to $16.9 million used during the nine months ended June 26, 2020.

The increase in cash used in financing activities is primarily due to $110.1 million used to repurchase common stock during the nine months ended June 25, 2021.

During the three months ended December 24, 2021, the Company used $129.0 million in financing activities compared to $79.0 million used during the three months ended December 25, 2020.

The increase in cash used in financing activities is primarily due to $69.5 million more cash used to repurchase common stock during the three months ended December 24, 2021 compared to the same period in the prior year.

Contractual Obligations and Commitments

The following table summarizes material changes to our contractual obligations reported as of September 30, 2020, resulting from the changes in our debt during the three months ended June 25, 2021.

These changes resulted from the Company completing the issuance and sale of $400 million aggregate principal amount of the 4.25% Senior Notes due June 2031 and entering into the $400 million New Senior Secured Term Loan Facility which matures on May 26, 2028.

Proceeds from the Senior Notes and New Senior Secured Term Loan Facility were used to repay outstanding loans under the previous First Lien Term Loan Facility.

See Note 12, “Debt” in the notes to the condensed consolidated financial statements.

($ in thousands) Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Total

Senior Notes due June 2031 $ — $ — $ — $ 400,000 $ 400,000

New Senior Secured Term Loan Facility Due May 2028 4,000 8,000 8,000 380,000 $ 400,000

Interest payments (a) 28,870 60,112 66,131 117,821 272,934

Total $ 32,870 $ 68,112 $ 74,131 $ 897,821 $ 1,072,934

(a) Interest expense is estimated based on outstanding loan balances assuming principal payments are made according to the payment schedule and interest rates as of June 25, 2021 (4.25% for the Senior Notes, 2.5% for the New Senior Secured Term Loan Facility).

There have been no material changes in our contractual obligations and commitments since the filing of our Annual Report on Form 10-K.

Changes in Critical Accounting Policies and Estimates

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

What changed 10-Q

Item 1. Financial Statements