What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-11-17 compared with 2022-11-18 · 135 added, 102 removed, 1015 unchanged (19% of the section changed)

21 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

United Poly Systems, LLC (“United Poly”) - Acquisitions - Refer to Note 3 to the financial statements

Solar Tax Credit Accounting — Refer to Notes 1 and 7 to the financial statements

Critical Audit Matter Description

As described in Note 3 to the consolidated financial statements, the Company completed multiple acquisitions for total consideration of $332.9 million in the year ended September 30, 2022.

acquisitions were accounted for as business combinations.

The Company allocated the purchase price of its acquisitions to the assets acquired and liabilities assumed based upon their respective fair values at acquisition data utilizing management estimates and input from an independent third-party valuation firm to assist in determining these fair values.

The purchase price allocation of all acquisitions during the year ended September 30, 2022 resulted in identifiable intangible assets of $183.2 million, of which $111.7 million related to the customer relationships acquired in connection with the acquisition of United Poly.

Management estimated the fair value of the United Poly customer relationships using the multi-period excess earnings discounted cash flow method.

The fair value determination of this intangible asset required management to make significant estimates and assumptions related to business and valuation assumptions, related to the revenue growth rate, profit margins, the discount rate, and the customer attrition rate.

We identified management’s estimate of the fair value of the acquired United Poly customer relationships as a critical audit matter because of the significant judgments made by management to estimate the fair value.

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 management’s assumptions related to the revenue growth rate, profit margins, discount rate, and the customer attrition rate.

Under the United States Inflation Reduction Act of 2022 (the “IRA”), the Company is eligible for certain tax credits related to the manufacturing and selling of components used in the solar energy industry

(“tax credits”) beginning January 1, 2023.

These tax credits are transferable to third parties under the IRA when they meet certain criteria (the “transferability criteria”).

When credits do not meet the transferability criteria, the benefit is recognized by the Company within income tax expense in accordance with ASC 740, “Income Taxes.” The Company concluded that fiscal 2023 tax credits do not meet the transferability criteria and, as a result, the Company recognized the benefit of the fiscal 2023 tax credits in its income tax expense.

Additionally, the Company has contractual arrangements with some customers who purchase tax credit eligible components to transfer a portion of these tax credits to those customers.

In instances where the Company has such arrangements, and the tax credits do not meet the transferability criteria, the Company may transfer the economic value of the agreed upon portion of the tax credits in a manner agreed upon between the Company and the customer.

When the Company transfers the economic value of the agreed upon portion of tax credits, the amount is recognized as a reduction of revenue (“customer rebate”).

Through September 30, 2023, the Company has recognized a reduction of revenue of $30,401 and a benefit to income tax expense of $39,493.

As of September 30, 2023, the Company has recognized a liability of $30,401 for the economic value of these tax credits, and a solar tax credit receivable of $39,493.

As the IRA was signed into law on August 16, 2022, the tax credits and the related accounting impact was new for the Company in the year ended September 30, 2023.

In addition, the Company earned these tax credits beginning January 1, 2023, but were not eligible to transfer these tax credits until after September 30, 2023.

The accounting for these tax credits earned, when combined with the fact that the tax credits were not transferable during the year ended September 30, 2023 and the existence of contractual arrangements to transfer the tax credits or the economic value of these tax credits is complex.

As a result, we identified the evaluation of the accounting treatment for these tax credits as a critical audit matter due to the complexity of the accounting involved.

This required a high degree of auditor judgement as well as an increased extent of audit effort, including the need to involve professionals in our firm having expertise in accounting for income taxes.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the revenue growth rate, profit margins, discount rate, and the customer attrition rate to estimate the fair value of this intangible asset included the following, among others:

• We tested the design and operating effectiveness of controls over management’s determination of the fair value of the acquired customer relationship intangible asset, including those over the revenue growth rate, profit margins, discount rate, and the customer attrition rate.

• We assessed the reasonableness of management’s selection of the revenue growth rate and profit margins, by comparing the projections to historical results, and certain industry and market trends, and the reasonableness of the customer attrition rate by comparing to historical results.

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

◦ Assessing the appropriateness of the methodology used to determine the discount rate and customer attrition rate.

◦ Testing the source information underlying the determination of the discount rate.

◦ Testing the mathematical accuracy of the discount rate and customer attrition rate calculations.

◦ Developing a range of independent estimates of the discount rate, and comparing the discount rate selected by management to the range of independent estimates.

With the assistance of our income tax specialists, our principal audit procedures over tax credits related to the manufacturing and selling of components used in the solar energy industry included the following, among others:

• We tested the design and operating effectiveness of management’s controls over the income tax provision, including the accounting for the tax credits during the year.

• We tested the design and operating effectiveness of management’s controls over the calculation of the amounts recorded in the financial statements related to these tax credits, including the accounting for the customer rebates.

• We performed the following related to tax credits and related customer rebates:

◦ We evaluated the Company’s conclusion that its manufactured solar energy components are eligible for the tax credit under the IRA.

◦ We tested the accuracy of the amount of the tax credits earned that were included in the Company’s income tax expense.

◦ We tested the completeness and occurrence of solar energy component sales included in the Company’s calculation of tax credits earned.

◦ We tested the completeness and accuracy of the Company’s calculation of customer rebates recorded related to the transfer of the economic value of the tax credits to customers.

/s/ DELOITTE & TOUCHE LLP

13 unchanged sentences

Loss on extinguishment of debt 13 — — 4,202

Other income, net 6 ( 490 ) ( 18,152 ) ( 2,777 )

Other (income) and expense, net 6 7,969 ( 490 ) ( 18,152 )

Income before income taxes 850,290 1,203,620 780,001

47 unchanged sentences

Treasury stock, held at cost, 0 and 260,900 shares, respectively

( 2,580 ) ( 2,580 )

Additional paid-in capital 506,783 500,117

40 unchanged sentences

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

Other, net — — 8

Finance lease payments ( 1,320 ) — —

Net cash used for financing activities ( 506,781 ) ( 524,206 ) ( 184,456 )

19 unchanged sentences

Net income — — — — 587,857 — 587,857

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

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

Other comprehensive income (loss) — — — — — $ 13,828 13,828

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

3 unchanged sentences

Net income — — — — 913,434 — 913,434

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

Other comprehensive income (loss) — — — — — ( 21,420 ) ( 21,420 )

Stock-based compensation — — — 17,245 — — 17,245

3 unchanged sentences

Net income — — — — 689,899 — 689,899

Other comprehensive loss — — — — — ( 21,420 ) ( 21,420 )

Other comprehensive income (loss) — — — — — 16,206 16,206

Stock-based compensation — — — 21,101 — — 21,101

1 unchanged sentence

Repurchase of common stock ( 4,322 ) ( 43 ) — — ( 494,399 ) — ( 494,442 )

Retirement of Treasury Stock 2,580 ( 2,580 ) —

Balance as of September 30, 2023 37,317 375 — 506,783 994,901 ( 33,940 ) $ 1,468,119

9 unchanged sentences

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.

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

As of September 20, 2022, Atkore was the sole stockholder of Atkore International Holdings Inc.

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

On December 28, 2022, AIH merged into AII, with AII being the surviving entity.

Accordingly, Atkore is now the sole stockholder of AII.

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.

6 unchanged sentences

On April 26, 2022, the board of directors approved an amendment to the aforementioned plan, extending it to a total repurchase of the Company’s outstanding common stock of up to $ 800.0 million.

As of September 30, 2022, $ 300.0 million of repurchases remained available under the plan.

On November 11, 2022, the board of directors approved an amendment to the aforementioned plan, extending it to a total repurchase authorization of the Company’s outstanding stock of $ 1,300 million.

As of September 30, 2023, $ 309.1 million of repurchases remained available under the plan.

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”).

10 unchanged sentences

The Company primarily offers assurance-type standard warranties that do not represent separate performance obligations.

Under the Inflation Reduction Act of 2022 (“IRA”), the Company is eligible for tax credits related to the manufacturing and selling of components used in the solar energy industry, starting on January 1, 2023.

These tax credits are transferable under the IRA when they meet certain criteria.

When credits do not meet the transferability criteria, the benefit is recognized within income tax expense in accordance with ASC 740, “Income Taxes.” The Company concluded that the tax credits earned during fiscal 2023 are not transferable and as a result, the Company recognized the benefit of the fiscal 2023 tax credits in its income tax expense.

The Company has contractual arrangements with some customers who purchase credit eligible components to transfer a portion of these tax credits to those customers.

In instances where the Company has such arrangements, and the credits are not transferable, the Company may transfer the economic value of the agreed upon portion of the tax credits in a manner agreed upon between the Company and the customer.

Pursuant to such contractual arrangements, if the tax credits are eligible for transfer and will be transferred to the customer, the Company identifies two separate performance obligations under these contracts with the first being to transfer the promised goods and the second being to transfer the defined portion of the tax credits earned.

The Company allocates the total value of these transactions between the two performance obligations.

As a result of this allocation, the Company recognizes a reduction to revenue, similar to a rebate.

When the Company does not transfer credits but instead transfers only the economic value, there is only a single performance obligation to transfer the promised goods with transfer of the economic value of the credits recognized as a reduction of revenue.

The solar tax credit receivable is recorded in Prepaid Expenses and Other Current Assets whereas the liability to transfer the defined portion of the tax credits or the economic value is recorded in Customer Liabilities.

For the year ended September 30, 2023, the Company has recognized a reduction of revenue of $ 30,401 for the economic value of tax credits to be transferred and a year to date benefit to income tax expense of $ 39,493 .

As of September 30, 2023, the Company has a $ 30,401 liability for credits to be transferred or the economic value of the credits and a solar tax credit receivable of $ 39,493 .

As of September 30, 2023, all activity related to the solar tax credits is within the Safety & Infrastructure segment.

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.

4 unchanged sentences

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

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

Shipping and handling costs associated with outbound freight after control over a product has

transferred to a customer are accounted for as fulfillment costs and are included in cost of sales.

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

6 unchanged sentences

These costs include direct material, direct labor, production related overheads, excess and obsolescence costs, lower of cost or market provisions, freight and distribution costs, and the depreciation and amortization of assets directly used in the production of goods for sale.

Selling, General and Administrative Expenses — These amounts primarily include payroll-related expenses for both administrative and selling personnel, compensation expense from stock-based awards, restructuring-related charges, third-party professional services and transactional gains or losses for foreign currency transactions, excluding the foreign exchange exposure for intercompany loan transactions, which is included in Other income, net.

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 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.

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.

12 unchanged sentences

Capitalized costs are amortized ratably over the useful life of the software when the software becomes operational.

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

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 its internal use computer software to third parties.

28 unchanged sentences

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.

with those forecasts.

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.

1 unchanged sentence

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

The Company did no t record any goodwill impairments in fiscal 2022, 2021, and 2020.

As a result of the Company’s plans to exit its operations in Russia and expectation to sell the related business at a loss, the Company recognized a goodwill impairment of $ 1,721 that was allocated from the reporting unit on a relative fair value basis.

With the exception of the impairment recorded to the expected sale of the Russia operations, the Company did no t record any other goodwill impairments in fiscal 2023, 2022, and 2021.

As noted above, ASC 350 also requires that the Company test the indefinite-lived intangible assets for impairment at least annually.

32 unchanged sentences

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”).

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.

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted into law.

The IRA contains significant tax law changes, including a corporate alternative minimum tax of 15% on adjusted financial statement income, which if applicable for the Company would be effective beginning October 1, 2023, a 1% excise tax on stock repurchases after December 31, 2022, and various tax incentives which include, but are not limited to, credits related to the manufacturing of equipment used in solar powered energy which will take effect January 1, 2023.

The Company is currently evaluating this legislation and determining what impact it would have on the Company’s financial statements.

The IRA contains significant tax law changes, including a corporate alternative minimum tax of 15% on adjusted financial statement income, which if applicable for the Company would be effective beginning October 1, 2023, a 1% excise tax on stock repurchases after December 31, 2022, and various tax incentives which include, but are not limited to, credits related to the manufacturing and selling of components used in the solar energy industry which took effect on January 1, 2023.

The Company has recognized the benefit of credits related to the manufacturing and selling of components used in the solar energy industry in the income tax provision as described in the previous section discussing Revenue Recognition.

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.

6 unchanged sentences

Recent Accounting Pronouncements

A summary of recently adopted Accounting Standards Update ("ASU")s are as follows.

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

Adopted Guidance

ASU Description of ASU Impact to Atkore Adoption 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 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.

Atkore has not adopted any accounting standards in the current fiscal year.

There are no accounting standards with adoption dates in the next fiscal year that are applicable to the Company.

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

2 unchanged sentences

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

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

property, plant and equipment asset during the contract term.

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

30 unchanged sentences

The following table summarizes lease costs by type of cost for the fiscal year ended September 30, 2023, and the fiscal year ended September 30, 2022.

In the consolidated statements of operations, cost of sales and selling, general and administrative expenses included lease costs of $ 15,583 and $ 3,732 for the fiscal year ended September 30, 2022 and $ 14,536 and $ 2,781 for the fiscal year end September 30, 2021.

In the consolidated statements of operations, cost of sales and selling, general and administrative expenses included lease costs of $ 20,054 and $ 7,215 for the fiscal year ended September 30, 2023 and $ 15,583 and $ 3,732 for the fiscal year ended September 30, 2022.

Fiscal year ended

27 unchanged sentences

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 fiscal 2020.

On November 7, 2022, Atkore HDPE, LLC, a wholly-owned subsidiary of the Company, acquired the assets of Elite Polymer Solutions (“Elite”), for a purchase price of $ 90,230 , of which $ 75,981 was paid at closing and an additional purchase price payable of $ 14,000 was accrued, of which $ 500 was paid in fiscal 2023 subsequent to the acquisition date.

Elite is a manufacturer of high density polyethylene (HDPE) conduit, primarily serving the telecommunications, utility, and transportation markets.

As a result of the acquisition, the Company preliminarily recognized $ 18,669 of tax deductible goodwill, $ 68,480 of identifiable intangible assets, of which $ 68,200 relates to customer relationships with an estimated useful life of 8 years, and $ 3,082 of working capital and other net tangible assets.

The Company finalized the purchase price allocation of Elite in the fourth quarter of fiscal 2023.

The acquisition in fiscal 2023 was funded using cash-on-hand.

The Company incurred approximately $ 968 in acquisition-related expenses for fiscal 2023, which was recorded as a component of selling, general and administrative expenses.

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

Due to the immaterial nature of this acquisition,

the Company did not include the pro forma results of operations for this acquisition for the current period or the previous interim period.

On August 31, 2022, Atkore International Inc., and Atkore HDPE, LLC, wholly-owned subsidiaries of the Company, acquired the outstanding stock of two separate, but related, companies doing business as Cascade Poly Pipe & Conduit (“Cascade”) and Northwest Polymers, for a total purchase price of $ 62,100 , of which $ 52,738 was paid at closing and an additional purchase price payable of $ 9,362 was accrued.

1 unchanged sentence

Northwest Polymers is a leading recycler of PVC, HDPE and other plastics and a strategic supply partner to Cascade and other manufacturers.

The purchase price allocation has not been finalized as the Company is finalizing working capital, inventory, intangible assets, deferred tax assets and liabilities and fixed asset fair values.

The Company finalized the purchase price allocation of these companies in the third quarter of fiscal 2023.

On June 22, 2022, Atkore International Inc., a wholly-owned subsidiary of the Company acquired all of the outstanding stock of United Poly Systems, LLC (“United Poly”), for a purchase price of $ 227,420 .

United Poly is a manufacturer of high density polyethylene (“HDPE”) pressure pipe and conduit, primarily serving the telecommunications, water infrastructure, renewables and energy markets.

The purchase price allocation has not been finalized as the Company is finalizing inventory, intangible assets, deferred tax assets and liabilities fair values.

The Company finalized the purchase price allocation of United Poly in the third quarter of fiscal 2023.

On May 19, 2022, Allied Tube and Conduit Corporation, wholly-owned subsidiary of the Company acquired the assets of Talon Products, LLC (“Talon”), for a purchase price of $ 4,193 .

147 unchanged sentences

The Company’s investment strategy for its pension plans is to manage the plans on a going-concern basis.

Current investment policy is to maximize the return on assets, subject to a prudent level of portfolio risk, for the purpose of enhancing the security of benefits for participants.

For the pension plans, this policy targets a 50 % allocation to equity securities and a 50 % allocation to debt securities.

Current investment policy is to minimize risk in the plan assets for the purpose of enhancing the security of benefits for participants.

For the pension plans, this policy targets a 100 % allocation to debt securities.

As of September 30, 2023, the 46 % of plan assets held in cash and cash equivalents is a result of timing differences as the Company continues to move to the target allocation of 100% debt securities.

Pension plans have the following weighted-average asset allocations:

38 unchanged sentences

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 $ 4,615 , $ 3,400 and $ 3,718 for the fiscal years ended September 30, 2022, September 30, 2021 and September 30, 2020, respectively.

Expense for the defined contribution plans is

computed as a percentage of participants’ compensation and was $ 5,483 , $ 4,615 and $ 3,400 for the fiscal years ended September 30, 2023, September 30, 2022 and September 30, 2021, respectively.

Multi-Employer Plan — The Company has a liability of $ 4,336 as of September 30, 2023 and $ 4,685 as of September 30, 2022 representing the Company’s proportionate share of a multi-employer pension plan which was exited prior to fiscal 2017.

21 unchanged sentences

Range of expected option lives 6 years 6 years 6 years

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

For grants during fiscal year ended 2022 and 2021, the expected volatility is based on the Company’s stock price volatility.

Dividends are not paid on the Company’s common stock for fiscal 2023 and prior years.

For grants during fiscal years ended 2023, 2022 and 2021, the expected volatility is based on the Company’s stock price volatility.

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.

61 unchanged sentences

Fair value $ 121.52 $ 122.25 $ 33.80

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

For the fiscal years ended 2023, 2022 and 2021, dividends are not paid on the Company’s common stock.

For grants during fiscal year ended 2023, 2022 and 2021, the expected volatility is based on the Company’s stock price volatility.

For grants during fiscal year 2020, 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.

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.

The expected life of the award represents the weighted-average period of time that awards granted are expected to be outstanding, giving consideration to vesting schedules and expected exercise patterns.

19 unchanged sentences

As of September 30, 2023, there was $ 5,228 of total unrecognized compensation expense related to non-vested PSUs granted, expected to be recognized over a weighted-average period of approximately 0.82 years.

OTHER INCOME, NET

Other income, net consisted of the following:

OTHER (INCOME) AND EXPENSE, NET

Other (income) and expense, net consisted of the following:

Fiscal Year Ended

4 unchanged sentences

Foreign exchange loss (gain) on intercompany loans ( 88 ) 5,342 ( 1,534 )

Pension-related benefits ( 1,803 ) ( 2,368 ) ( 1,704 )

Pension-related expense (benefit) 579 ( 1,803 ) ( 2,368 )

Loss on assets held for sale 7,477 — —

Other 1 350 ( 220 )

Other income, net $ ( 490 ) $ ( 18,152 ) $ ( 2,777 )

Other (income) and expense, net $ 7,969 $ ( 490 ) $ ( 18,152 )

The Company recognized an impairment of $ 7,477 on assets related to the Company’s operations in Russia for the year ended September 30, 2023.

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted into law.

The IRA contains significant tax law changes, including a corporate alternative minimum tax of 15% on adjusted financial statement income, which if applicable for the Company would be effective beginning October 1, 2023, a 1% excise tax on stock repurchases after December 31, 2022, and various tax incentives which include, but are not limited to, credits related to the manufacturing of solar powered energy which will take effect January 1, 2023.

The Company is currently evaluating this legislation and determining what impact it would have on the Company’s financial statements.

The IRA contains significant tax law changes, including a corporate alternative minimum tax of 15% on adjusted financial statement income, which if applicable for the Company would be effective beginning October 1, 2023, a 1% excise tax on stock repurchases after December 31, 2022, and various tax incentives which include, but are not limited to, credits related to the manufacturing and selling of components used in the solar energy industry which took effect on January 1, 2023.

The Company has recognized the benefit of credits related to the manufacturing and selling of components used in the solar energy industry in the income tax provision.

Significant components of income before income taxes and income tax expense for the fiscal years ended September 30, 2023, September 30, 2022 and September 30, 2021 consisted of the following:

22 unchanged sentences

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

Solar tax credits ( 5 ) % — % — %

Other 1 % 1 % 1 %

Effective income tax rate 19 % 24 % 25 %

The Company’s effective tax rate for fiscal 2023 differs from the statutory rate primarily due to state income taxes of $ 21,630 and solar tax credits of $ 39,493 .

The Company’s effective tax rate for fiscal 2022 differs from the statutory rate primarily due to state income taxes of $ 39,759 , and limitations on executive compensation of $ 6,996 partially offset by $ 11,438 of excess tax benefit from share-based compensation.

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.

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

12 unchanged sentences

Intangible assets ( 49,084 ) ( 56,886 )

Loss on investment — ( 5,102 )

Right-of-use assets, net ( 29,583 ) ( 17,095 )

23 unchanged sentences

Balance as of September 30, 2022 985

Additions based on tax positions related to prior years 322

Reductions based on tax positions related to prior years ( 75 )

Additions based on tax positions related to current year 1,792

Settlements ( 3,012 )

Expiration of statute of limitations ( 121 )

Balance as of September 30, 2023 $ 2,581

During fiscal 2023, the balance of unrecognized tax benefits increased by $ 1,792 as a result of federal and various state jurisdictions’ uncertain positions, partially offset by a decrease of $ 196 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 $ 158 .

During fiscal 2022, the balance of unrecognized tax benefits decreased by $ 3,012 as a result of completing state tax audits and the expiration of the statute of limitations in various state jurisdictions, partially offset by an increase of $ 664 , primarily related to various state jurisdictions’ uncertain tax positions.

The related accrued penalties and interest for uncertain tax positions decreased by $ 183 .

During fiscal 2021, the balance of unrecognized tax benefits increased by $ 1,949 as a result of federal and various state jurisdictions' uncertain tax positions, partially offset by a decrease of $ 230 as 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 $ 72 .

During fiscal 2021, the balance of unrecognized tax benefits increased by $ 1,949 as a result of federal and various state jurisdictions' uncertain tax positions, partially offset by a decrease of $ 230 as a result of completing tax audits and the expiration of the statute of limitations in various state jurisdictions.

13 unchanged sentences

The Company may still be liable for foreign taxes, such as withholding taxes, if earnings are repatriated.

For the fiscal year ended September 30, 2022, the Company recorded no additional liability for United States or non-U.S.

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, 2022, 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, 2023, the Company recorded a $ 98 provision for withholding taxes on the planned distribution of income from one of its European 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.

As of September 30, 2023, certain subsidiaries had approximately $ 131,056 of undistributed income that the Company intends to permanently reinvest.

24 unchanged sentences

Diluted earnings per share $ 17.27 $ 20.30 $ 12.19

(1) Stock options to purchase approximately 0.0 million , 0.0 million , and 0.3 million shares of common stock were outstanding during the years ended September 30, 2022, September 30, 2021, and September 30, 2020, respectively, but were not included in the calculation of diluted earnings per share as the impact of these would have been anti-dilutive.

(1) There were no Stock options to shares of common stock were outstanding during the years ended September 30, 2023, September 30, 2022, and September 30, 2021, respectively, Any options available would not be included in the calculation of diluted earnings per share as the impact of these would have been anti-dilutive.

ACCUMULATED OTHER COMPREHENSIVE LOSS

26 unchanged sentences

Total inventories would be $ 29,826 higher and $ 64,550 higher than reported as of September 30, 2023 and September 30, 2022, respectively, if the first-in, first-out method was used for all inventories.

the years ended September 30, 2022 and September 30, 2021, inventory quantities in specific pools were lower at the end of the period than the quantities at the beginning of the period.

During the years ended September 30, 2023 and September 30, 2022, 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.

22 unchanged sentences

Goodwill acquired during year 18,669 14 18,683

Impairment ( 1,721 ) — ( 1,721 )

Other purchase accounting adjustments 1,989 — 1,989

Exchange rate effects 2,782 43 2,825

1 unchanged sentence

Goodwill balances include $ 5,645 and $ 43,000 of accumulated impairment losses within the Electrical and Safety & Infrastructure segments, respectively, as of September 30, 2023 and September 30, 2022.

As described in Note 6, “Other (Income) and Expense, net”, the Company is finalizing plans to exit operations in Russia and expects to sell the related business at a loss.

The Company recognized an impairment of $ 7,477 for the year ended September 30, 2023, which includes $ 1,721 of impaired goodwill that was allocated from the reporting unit on a relative fair value basis.

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

22 unchanged sentences

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.

No additional payments were made in fiscal 2022 or fiscal 2023.

As of September 30, 2023, future contractual maturities of long-term debt are as follows (in thousands):

2029 and thereafter 400,000

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 %.

Total $ 773,000

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.

1 unchanged sentence

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 has an annual amortization rate of 1.00 %.

On March 15, 2023, the Company entered into an amendment to the New Senior Secured Term Loan Facility to implement a forward-looking interest rate based on the Secured Overnight Financing Rate (“SOFR”) in lieu of LIBOR, consisting of an applicable margin of 2.00 % and a credit spread adjustment of (i) 0.11448 % for a one-month interest period, (ii) 0.26161 % for a three-month interest period and (iii) 0.42826 % for a six-month interest period.

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

6 unchanged sentences

(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 Company expects to transition to SOFR as the alternative base rate for both the ABL Credit Facility and New Senior Secured Term Loan in fiscal 2023.

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”).

Further, on March 24, 2023, the Company entered into an amendment to the Amended ABL Credit Facility to implement a forward-looking interest rate based on SOFR in lieu of LIBOR, consisting of an applicable margin ranging from 1.25 % to 1.75 % and a credit spread adjustment of 0.10 %.

The Amended ABL Credit Facility has aggregate commitments of $ 325,000 and is guaranteed by AII, 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 $ 322,406 and $ 312,095 as of September 30, 2023 and September 30, 2022, respectively.

12 unchanged sentences

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

The ABL Credit Facility has remained unused in both fiscal 2022 and fiscal 2023.

FAIR VALUE MEASUREMENTS

Certain assets and liabilities are required to be recorded at fair value on a recurring basis.

The Company used 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 expired during the year.

These were not formally designated as hedges by the Company.

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

These derivative instruments are not formally designated as hedges by the Company.

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 for the applicable period.

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

See Note 6, “Other Income, net” for further detail.

The total notional amounts of undesignated forward currency contracts were £ 0.0 million, £ 37.4 million and £ 43.3 million as of September 30, 2022, September 30, 2021 and September 30, 2020.

See Note 6, “Other (Income) and Expense, net” for further detail.

The Company had no active forward currency contracts or other derivative instruments as of September 30, 2023, or September 30, 2022, with the last such contract having expired in the third quarter of fiscal 2022.

The Company had £ 37.4 million of undesignated forward currency contracts as of September 30, 2021.

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

23 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 — 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.” Tyco International Ltd.

collectively as the “Special Products Claims.” Tyco International Ltd.

(“Tyco”), now Johnson Controls, Inc.

6 unchanged sentences

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.

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.

17 unchanged sentences

Gross profit earned and reported within the segment is eliminated in the Company’s consolidated results.

Certain manufacturing and distribution expenses are allocated between the

segments on a pro rata basis due to the shared nature of activities.

Certain manufacturing and distribution expenses are allocated between the segments on a pro rata basis due to the shared nature of activities.

Recorded amounts represent a proportional amount of the quantity of product produced for each segment.

28 unchanged sentences

Transaction costs ( 968 ) ( 3,424 ) ( 667 )

Loss on assets held for sale ( 7,477 ) — —

Other (b) ( 11,535 ) ( 2,410 ) 15,826

14 unchanged sentences

Metal Electrical Conduit and Fittings $ 529,083 $ 635,481 $ 612,137

Plastic Pipe and Conduit 1,479,331 893,199 308,561

Plastic Pipe Conduit and Fittings 1,252,422 1,479,331 893,199

Electrical Cable and Flexible Conduit 506,994 535,194 424,411

Other Electrical products

Other Electrical products (a)

386,551 363,749 300,115

Electrical 2,675,050 3,013,755 2,229,862

Mechanical Pipe 445,453 395,289 244,902

Other Safety & Infrastructure products

Mechanical Tube 367,730 445,453 395,289

Other Safety & Infrastructure products (b)

475,982 454,741 302,863

1 unchanged sentence

Net sales $ 3,518,761 $ 3,913,949 $ 2,928,014

(a) Other Electrical products includes International Cable Management, Fiberglass Conduit and Corrosion Resistant Conduit

(b) Other S&I products includes Metal Framing and Fittings, Construction Services, Perimeter Security and Cable Management

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, 2022, one customer, CED National represented 10 % of the Company’s accounts receivable, with no significant amounts past due.

As of September 30, 2023, Sonepar USA represented 14 % and CED National represented 11 % of the Company’s accounts receivable, with no significant amounts past due.

As of September 30, 2022, one customer, CED National represented 10 % of the Company’s accounts receivable, with no significant amounts past due.

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

For fiscal 2023, one customer, Sonepar USA accounted for more than 10% of sales, for fiscal 2022 and 2021, no single customer accounted for more than 10% of sales.

Concentration of Employees — As of September 30, 2023, approximately 18 % of the Company's employees were represented by a union under a collective bargaining agreement.

3 unchanged sentences

SUBSEQUENT EVENTS

On November 7, 2022, Atkore HDPE, LLC and Allied Tube and Conduit Corporation, wholly-owned subsidiaries of the Company, acquired the assets of Elite Polymer Solutions (“Elite Polymer”), for a purchase price of $ 91.6 million.

Elite Polymer is a manufacturer of HDPE conduit, primarily serving the telecommunications, utility, and transportation markets.

Subsequent to fiscal year end 2022, the Company has repurchased 1.7 million shares at an aggregate cost of $ 150.1 million.

On November 17, 2023, the Company announced that the board of directors approved a quarterly dividend program under which the Company intends to pay quarterly cash dividends on its common stock.

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