What changed in this filing

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Item 1. Financial Statements

2024-02-01 compared with 2023-08-08 · 106 added, 233 removed, 338 unchanged (50% 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 30, 2023 June 24, 2022 June 30, 2023 June 24, 2022

Three months ended

(in thousands, except per share data) Note December 29, 2023 December 30, 2022

Net sales $ 798,481 $ 833,821

5 unchanged sentences

Interest expense, net 7,793 9,488

Other (income) and expense, net 5 3,689 150 7,588 ( 964 )

Other expense, net 5 12 41

Income before income taxes 167,653 222,051

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three months ended Nine months ended

(in thousands) Note June 30, 2023 June 24, 2022 June 30, 2023 June 24, 2022

Three months ended

(in thousands) Note December 29, 2023 December 30, 2022

Net income $ 138,381 $ 173,492

Other comprehensive (loss) income, net of tax:

Other comprehensive income, net of tax:

Change in foreign currency translation adjustment 9,727 11,262

Change in unrecognized loss related to pension benefit plans 4 53 62

Total other comprehensive (loss) income 8 4,536 ( 6,534 ) 18,523 ( 10,296 )

Total other comprehensive income 8 9,780 11,324

Comprehensive income $ 148,161 $ 184,816

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data) Note June 30, 2023 September 30, 2022

(in thousands, except share and per share data) Note December 29, 2023 September 30, 2023

Current Assets:

27 unchanged sentences

Common stock, $ 0.01 par value, 1,000,000,000 shares authorized, 36,905,528 and 37,317,893 shares issued and outstanding, respectively

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

( 2,580 ) ( 2,580 )

Additional paid-in capital 490,238 506,783

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine months ended

(in thousands) Note June 30, 2023 June 24, 2022

Three months ended

(in thousands) Note December 29, 2023 December 30, 2022

Operating activities:

17 unchanged sentences

Capital expenditures ( 44,331 ) ( 35,006 )

Proceeds from sale of properties and equipment 31 658

Acquisition of businesses, net of cash acquired 3 ( 5,973 ) ( 82,181 )

19 unchanged sentences

Net income — — — — 138,381 — 138,381

Other comprehensive loss — — — — — 11,324 11,324

Other comprehensive Income — — — — — 9,780 9,780

Stock-based compensation — — — 4,757 — — 4,757

2 unchanged sentences

Balance as of December 29, 2023 36,905 $ 370 $ — $ 490,238 $ 1,035,897 $ ( 24,160 ) $ 1,502,345

Net income — — — — 174,194 — 174,194

Other comprehensive loss — — — — — 2,663 2,663

Stock-based compensation — — — 6,863 — — 6,863

Issuance of common stock, net of shares withheld for tax 44 — — 336 — — 336

Repurchase of common stock ( 974 ) ( 10 ) — — ( 120,293 ) — ( 120,303 )

Balance as of March 31, 2023 38,938 $ 390 $ ( 2,580 ) $ 497,810 $ 879,334 $ ( 36,159 ) $ 1,338,795

Net income — — — — 201,288 — 201,288

Other comprehensive loss — — — — — 4,536 4,536

Stock-based compensation — — — 5,966 — — 5,966

Issuance of common stock, net of shares withheld for tax 3 — — ( 155 ) — ( 155 )

Repurchase of common stock ( 1,169 ) ( 11 ) — — ( 148,312 ) — ( 148,323 )

Balance as of June 30, 2023 37,772 $ 379 $ ( 2,580 ) $ 503,621 $ 932,310 $ ( 31,623 ) $ 1,402,107

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

7 unchanged sentences

Balance as of December 30, 2022 39,868 $ 400 $ ( 2,580 ) $ 490,611 $ 825,433 $ ( 38,822 ) $ 1,275,042

Net income — — — — 233,477 — 233,477

Other comprehensive (loss) — — — — — ( 2,429 ) ( 2,429 )

Stock-based compensation — — — 6,128 — — 6,128

Issuance of common stock, net of shares withheld for tax 24 — — 103 — — 103

Repurchase of common stock ( 1,539 ) ( 15 ) — — ( 156,611 ) — ( 156,626 )

Balance as of March 25, 2022 43,879 $ 440 $ ( 2,580 ) $ 492,070 $ 565,832 $ ( 32,488 ) $ 1,023,274

Net income — — — — 254,313 — 254,313

Other comprehensive income — — — — — ( 6,534 ) ( 6,534 )

Stock-based compensation — — — 4,625 — — 4,625

Issuance of common stock 25 — — 90 — — 90

Repurchase of common stock ( 1,374 ) ( 14 ) — — ( 135,745 ) — ( 135,759 )

Balance as of June 24, 2022 42,530 $ 426 $ ( 2,580 ) $ 496,785 $ 684,400 $ ( 39,022 ) $ 1,140,009

See Notes to unaudited condensed consolidated financial statements.

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Recent Accounting Pronouncements

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.

A summary of recently adopted accounting guidance is as follows.

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

ASU Description of ASU Impact to Atkore Adoption Date

2023-07 Segment Reporting (Topic 280);

Improvements to Reportable Segment Disclosures The ASU requires companies to provide additional segment disclosures including disclosing title and position of the chief operating decision maker (“CODM”), disclosure of significant segment expenses provided to and reviewed by the CODM, and that public entities provide all annual disclosures about a reportable segment’s profit or loss and assets required by Topic 280 in interim periods.

The Company will adopt the standard in the first quarter of fiscal 2025 and include the disclosures required by the ASU within the Segment Footnote.

REVENUE FROM CONTRACTS WITH CUSTOMERS

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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 the income tax expense in accordance with ASC 740, “Income Taxes.” As a result of internal analysis during the Company’s third quarter of fiscal 2023, the Company concluded that fiscal 2023 tax credits are not transferable and corrected the accounting for solar tax credits.

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.

When credits do not meet the transferability criteria, the benefit is recognized within income tax expense in accordance with ASC 740, “Income Taxes.” Beginning in fiscal 2024, the Company has concluded that the credits generated are transferable.

As such, the benefit of the solar tax credits is recognized as a reduction of cost of sales.

The Company has contractual arrangements with certain customers to transfer a portion of the tax credits or to otherwise provide a rebate based on an agreed-upon value of the tax credits generated.

Pursuant to such contractual arrangements, if the tax credits will be transferred to the customer, the Company identifies two separate performance obligations:

(1) transfer the promised goods;

and (2) transfer of 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 nine months ended June 30, 2023, the Company has recognized a reduction of revenue of $ 15,877 for the economic value of tax credits to be transferred and a year to date benefit to income tax expense of $ 39,799 which reflected the benefit of these tax credits as part of the annual effective tax rate.

As of June 30, 2023, the Company has a $ 15,877 liability for credits to be transferred or the economic value of the credits and a solar tax credit receivable of $ 20,248 .

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

For arrangements with no transfer of tax credits there is only a single performance obligation to transfer the promised goods and a rebate is granted based on the agreed-upon value of the tax credits generated.

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

For the three months ended December 29, 2023, the Company has recognized a reduction of revenue of $ 14,853 for the economic value of tax credits to be transferred and a benefit to cost of sales of $ 19,127 .

As of December 29, 2023, the Company has a liability of $ 29,310 for credits to be transferred or the value thereof and a solar tax credit receivable of $ 64,595 .

As of December 29, 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.

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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 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.

As of the end of the second quarter of fiscal 2023, an additional $ 249 working capital true up payment has been made.

During the three months ended December 29, 2023, the Company paid out $ 5,973 of accrued purchase price related to the fiscal 2022 acquisition of Cascade Poly Pipe & Conduit and Northwest Polymers.

No other acquisition activity occurred during the three months ended December 29, 2023.

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.

As of June 30, 2023, 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 acquisition in fiscal 2023 was funded using cash-on-hand.

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

The Elite 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.

1 unchanged sentence

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.

As of the end of the second quarter of fiscal 2023, the Company paid $ 3,111 of the accrued purchase price.

Cascade is a manufacturer specializing in smooth wall HDPE conduit made from recycled materials, primarily serving the telecommunications, utility and datacom markets.

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

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 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 .

Included in Talon’s purchase price is a purchase price payable of $ 402 .

Talon is a manufacturer of non-metallic, injection molded cable cleats, primarily serving the power distribution markets.

The Company finalized the purchase price allocation of Talon in the fourth quarter of fiscal 2022.

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.

The Company finalized the purchase price allocation of Four Star in the third quarter of fiscal 2022.

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 $ 16,184 , of which $ 13,320 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.

The Company finalized the purchase price allocation of Sasco in the third quarter of fiscal 2022.

The acquisitions in fiscal 2022 were funded using cash-on-hand.

The Company incurred approximately $ 3,424 in acquisition-related expenses for these acquisitions, which were recorded as a component of selling, general and administrative expenses.

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

The following table summarizes the Level 3 fair values assigned to the net assets acquired and liabilities assumed as of the acquisition date for fiscal 2022:

(in thousands) United Poly Other Total

Fair value of consideration transferred:

Cash consideration $ 227,420 $ 93,044 $ 320,464

Purchase price payable — 12,628 12,628

Working Capital Adjustment — 668 668

Total consideration transferred $ 227,420 $ 106,340 $ 333,760

Fair value of assets acquired and liabilities assumed:

Cash 11,514 126 11,640

Accounts receivable 23,679 9,291 32,970

Inventories 13,455 8,111 21,566

Intangible assets 128,840 54,330 183,170

Fixed assets 13,648 8,533 22,181

Accounts payable ( 11,940 ) ( 5,086 ) ( 17,026 )

Income taxes ( 15,542 ) ( 2,075 ) ( 17,617 )

Other ( 2,751 ) 245 ( 2,506 )

Net assets acquired 160,903 73,475 234,378

Excess purchase price attributed to goodwill acquired $ 66,517 $ 32,865 $ 99,382

The Company estimates $ 31.1 million of the goodwill recognized by the fiscal 2022 acquisitions is deductible for tax purposes, $ 11.7 million that relates to United Poly and $ 19.4 million that relates to Cascade and Northwest Polymer.

The Company estimates goodwill recognized from the acquisitions in

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:

United Poly Other

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

Customer relationships $ 111,700 11 $ 50,020 9

Other 17,140 8 4,310 8

Total intangible assets $ 128,840 $ 54,330

The following table presents unaudited pro forma results of operations for the Company and all companies acquired in fiscal 2022 as if those acquisitions had occurred on October 1, 2021.

The results presented below are for the three and nine months ended:

Three months ended Nine months ended

(in thousands) June 24, 2022 June 24, 2022

Pro forma net sales $ 1,096,866 $ 2,992,265

Pro forma net income 256,356 696,012

The pro forma condensed financial information is presented for illustrative purposes only and does not indicate the actual financial results of the Company if the closing of the acquisitions in the current year had been completed on October 1, 2021, nor is it indicative of the results of operations in future periods.

Included in the unaudited pro forma financial information for the three and nine months ended June 24, 2022 were pro forma adjustments to reflect the results of operations of the acquisitions in the current year as though those acquisitions were completed as of the beginning of October 1, 2021, as well as the impact of amortizing certain acquisition accounting adjustments such as amortizable intangible assets.

The pro forma financial information neither indicates the impact of possible business model changes nor considers any potential impact of current market conditions, expense efficiencies or other factors.

POSTRETIREMENT BENEFITS

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The net periodic benefit credit was as follows:

Three months ended Nine months ended

(in thousands) Note June 30, 2023 June 24, 2022 June 30, 2023 June 24, 2022

Three months ended

(in thousands) Note December 29, 2023 December 30, 2022

Interest cost $ 1,316 $ 1,294

1 unchanged sentence

Amortization of actuarial loss 67 167

Net periodic benefit cost (credit) 5 $ 204 $ ( 451 ) $ 612 $ ( 1,353 )

OTHER (INCOME) AND EXPENSE, NET

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

Three months ended Nine months ended

(in thousands) June 30, 2023 June 24, 2022 June 30, 2023 June 24, 2022

Net periodic benefit cost 5 $ 542 $ 204

OTHER EXPENSE, NET

Other expense, net consisted of the following:

Three months ended

(in thousands) December 29, 2023 December 30, 2022

Undesignated foreign currency derivative instruments $ — $ ( 14 )

Loss on assets held for sale ( 64 ) —

Foreign exchange loss (gain) on intercompany loans ( 316 ) 3,263 ( 482 ) 3,860

Foreign exchange loss on intercompany loans ( 198 ) ( 149 )

Pension-related benefits 274 204

Other (income) and expense, net $ 3,689 $ 150 $ 7,588 $ ( 964 )

The Company recognized an impairment of $ 3,919 on assets related to the Company’s operations in Russia for the three months ended June 30, 2023 and cumulative impairment of $ 7,577 for those same operations for the nine months ended June 30, 2023.

As of June 30, 2023, the Company is finalizing plans to exit its operations in Russia and expects to sell the related business at a loss, which resulted in the impairment charge taken during the quarter.

For the three months ended June 30, 2023 and June 24, 2022, the Company’s effective tax rate attributable to income before income taxes was 8.6 % and 25.7 %, respectively.

For the three months ended June 30, 2023 and June 24, 2022, the Company’s income tax expense was $ 18,931 and $ 88,041 respectively.

The decrease in the current period effective tax rate was driven by the benefit related to solar energy tax credits enacted as part of the IRA.

For the nine months ended June 30, 2023 and June 24, 2022, the Company’s effective tax rate attributable to income before income taxes was 18.0 % and 24.4 %, respectively.

For the nine months ended June 30, 2023 and June 24, 2022, the Company’s income tax expense was $ 120,854 and $ 223,630 respectively.

The decrease in the current period effective tax rate was driven by the benefit related to solar energy tax credits enacted as part of the IRA.

Other expense, net $ 12 $ 41

In fiscal 2023, the Company initiated plans to exit operations in Russia and expects to sell the related business at a loss.

Accordingly, the Company recognized an impairment of the related assets in fiscal 2023 and continues to recognize any incremental losses on those assets.

For the three months ended December 29, 2023 and December 30, 2022, the Company’s effective tax rate attributable to income before income taxes was 17.5 % and 21.9 %, respectively.

For the three months ended December 29, 2023 and December 30, 2022, the Company’s income tax expense was $ 29,272 and $ 48,559 respectively.

The decrease in the current period effective tax rate was 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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The amount of the deferred tax assets considered realizable is subject to adjustment in future periods.

On August 16, 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 and various tax incentives which include, but are not limited to, credits related to the manufacturing of solar powered energy, both of which have taken effect as of January 1, 2023.

The Company is eligible for an $0.87 per kilogram credit on torque tubes manufactured and sold after the effective date.

The Company recognized a year to date $ 39,799 benefit in its income tax expense in the third quarter of fiscal 2023 which reflected the benefit of these credits as part of the annual effective tax rate.

This benefit included the value of the credit generated and other tax benefits derived from the accounting treatment described in Note 2, “Revenue from Contracts with Customers”.

EARNINGS PER SHARE

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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 30, 2023 June 24, 2022 June 30, 2023 June 24, 2022

Three months ended

(in thousands, except per share data) December 29, 2023 December 30, 2022

Net income $ 138,381 $ 173,492

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Non-participating employee stock options (1)

525 558 529 578

Diluted weighted average common shares outstanding 37,745 40,613

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(1) Stock options to purchase shares of common stock that would have been anti-dilutive are not included in the calculation.

There were no anti-dilutive options outstanding during the three months ended June 30, 2023 and June 24, 2022.

Additionally, there were no anti-dilutive options outstanding during the nine months ended June 30, 2023 and June 24, 2022, respectively.

There were no anti-dilutive options outstanding during the three months ended December 29, 2023 and December 30, 2022.

ACCUMULATED OTHER COMPREHENSIVE LOSS

The following tables present the changes in accumulated other comprehensive loss by component for the three months ended June 30, 2023 and June 24, 2022.

(in thousands) Defined Benefit

Pension Items Currency

Adjustments Total

Balance as of March 31, 2023 $ ( 16,532 ) $ ( 19,627 ) $ ( 36,159 )

Other comprehensive loss before reclassifications — 4,404 4,404

Amounts reclassified from accumulated other

comprehensive income, net of tax 132 — 132

Net current period other comprehensive income (loss) 132 4,404 4,536

Balance as of June 30, 2023 $ ( 16,400 ) $ ( 15,223 ) $ ( 31,623 )

The following table presents the changes in accumulated other comprehensive loss by component for the three months ended December 29, 2023 and December 30, 2022.

(in thousands) Defined Benefit

1 unchanged sentence

Adjustments Total

Balance as of March 25, 2022 $ ( 19,068 ) $ ( 13,420 ) $ ( 32,488 )

Balance as of September 30, 2023 $ ( 10,801 ) $ ( 23,139 ) $ ( 33,940 )

Other comprehensive income before reclassifications — 9,727 9,727

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Net current period other comprehensive income 53 9,727 9,780

Balance as of June 24, 2022 $ ( 18,945 ) $ ( 20,077 ) $ ( 39,022 )

The following tables present the changes in accumulated other comprehensive loss by component for the nine months ended June 30, 2023 and June 24, 2022.

(in thousands) Defined Benefit

Pension Items Currency

Adjustments Total

Balance as of September 30, 2022 $ ( 16,795 ) $ ( 33,351 ) $ ( 50,146 )

Other comprehensive loss before reclassifications — 18,128 18,128

Amounts reclassified from accumulated other

comprehensive income, net of tax 395 — 395

Net current period other comprehensive income (loss) 395 18,128 18,523

Balance as of June 30, 2023 $ ( 16,400 ) $ ( 15,223 ) $ ( 31,623 )

Balance as of December 29, 2023 $ ( 10,748 ) $ ( 13,412 ) $ ( 24,160 )

(in thousands) Defined Benefit

6 unchanged sentences

Net current period other comprehensive income 62 11,262 11,324

Balance as of June 24, 2022 $ ( 18,945 ) $ ( 20,077 ) $ ( 39,022 )

Balance as of December 30, 2022 $ ( 16,733 ) $ ( 22,089 ) $ ( 38,822 )

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 83 % and 82 % of the Company ’ s inventories were valued at the lower of LIFO cost or market at June 30, 2023 and September 30, 2022, respectively.

Interim LIFO determinations, including those at June 30, 2023, are based on management ’ s estimates of future inventory levels and costs for the remainder of the current fiscal year.

(in thousands) June 30, 2023 September 30, 2022

Approximately 86 % and 82 % of the Company ’ s inventories were valued at the lower of LIFO cost or market at December 29, 2023 and September 30, 2023, respectively.

Interim LIFO determinations, including those at December 29, 2023, are based on management ’ s estimates of future inventory levels and costs for the remainder of the current fiscal year.

(in thousands) December 29, 2023 September 30, 2023

Purchased materials and manufactured parts, net $ 194,417 $ 231,518

2 unchanged sentences

Inventories, net $ 493,637 $ 493,852

Total inventories would be $ 39,177 higher and $ 64,550 higher than reported as of June 30, 2023 and September 30, 2022, respectively, if the first-in, first-out method was used for all inventories.

As of June 30, 2023, and September 30, 2022, the excess and obsolete inventory reserve was $ 27,422 and $ 18,996 , respectively.

Total inventories would be $ 4,574 higher and $ 29,826 higher than reported as of December 29, 2023 and September 30, 2023, respectively, if the first-in, first-out method was used for all inventories.

As of December 29, 2023, and September 30, 2023, the excess and obsolete inventory reserve was $ 26,330 and $ 25,585 , respectively.

PROPERTY, PLANT AND EQUIPMENT

As of June 30, 2023, and September 30, 2022, property, plant and equipment and accumulated depreciation were as follows:

(in thousands) June 30, 2023 September 30, 2022

As of December 29, 2023, and September 30, 2023, property, plant and equipment and accumulated depreciation were as follows:

(in thousands) December 29, 2023 September 30, 2023

Land $ 29,357 $ 29,082

7 unchanged sentences

Property, plant and equipment, net $ 586,983 $ 559,041

Depreciation expense for the three months ended June 30, 2023 and June 24, 2022 totaled $ 14,913 and $ 11,804 respectively.

Depreciation expense for the nine months ended June 30, 2023 and June 24, 2022 totaled $ 41,893 and $ 34,914 respectively.

Depreciation expense for the three months ended December 29, 2023 and December 30, 2022 totaled $ 14,553 and $ 13,171 respectively.

GOODWILL AND INTANGIBLE ASSETS

2 unchanged sentences

Balance as of September 30, 2023 $ 258,427 $ 52,679 $ 311,106

Goodwill acquired during year 18,604 14 18,618

Impairment ( 1,721 ) — ( 1,721 )

Other purchase accounting adjustments 1,989 — 1,989

Exchange rate effects 1,667 187 1,854

Balance as of June 30, 2023 $ 259,891 $ 52,850 $ 312,741

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

As described in Note 5, “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 Compan y recognized an impairment of $ 7,577 for the nine months ended June 30, 2023, which includes $ 1,721 o f impaired goodwill that was allocated from the reporting unit on a relative fair value basis.

Balance as of December 29, 2023 $ 260,094 $ 52,866 $ 312,960

Goodwill balances as of December 29, 2023 included $ 5,645 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.

1 unchanged sentence

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

June 30, 2023 September 30, 2022

December 29, 2023 September 30, 2023

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

7 unchanged sentences

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

Amortization expense for the three months ended June 30, 2023 and June 24, 2022 was $ 15,192 and $ 8,624 , respectively.

Amortization expense for the nine months ended June 30, 2023 and June 24, 2022 was $ 42,778 and $ 25,554 , respectively.

Included in the table above are the effects of changes in exchange rates which were not material for the three months ended December 29, 2023.

Amortization expense for the three months ended December 29, 2023 and December 30, 2022 was $ 14,467 and $ 12,796 , respectively.

Expected amortization expense for intangible assets for the remainder of fiscal 2024 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 30, 2023 and September 30, 2022 was as follows:

(in thousands) June 30, 2023 September 30, 2022

Debt as of December 29, 2023 and September 30, 2023 was as follows:

(in thousands) December 29, 2023 September 30, 2023

Senior Secured Term Loan Facility due May 26, 2028 $ 371,738 $ 371,667

3 unchanged sentences

The asset-based credit facility (the “ ABL Credit Facility ” ) has aggregate commitments of $ 325,000 .

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 $ 322,406 as of June 30, 2023 and $ 312,905 as of September 30, 2022.

New Senior Secured Term Loan Facility - On May 26, 2021, the Company entered into a new $ 400.0 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 initially bearing interest at the rate of either (x) the London Inter-Bank Offered Rate (“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 %.

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 Credit Facility”).

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

The Amended ABL Credit Facility bears a commitment fee, payable quarterly in arrears, of 0.375 % per annum.

The Amended ABL Credit Facility also bears customary letter of credit fees.

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

On May 26, 2021, the Company entered into an amendment to the Amended 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 $ 100.0 million of obligations remain outstanding under the New Senior Secured Term Loan Facility on such date (ii) decreases the interest rate margins applicable to loans under the facility to (a) in the case of United States dollar-denominated loans, either (x) LIBOR plus an applicable margin ranging from 1.25 % to 1.75 %, or (y) an alternate base rate plus an applicable margin ranging from 0.25 % to 0.75 % or (b) in the case of Canadian dollar-denominated loans, either (x) the bankers acceptance rate plus an applicable margin ranging from 1.25 % to 1.75 % or (y) a Canadian prime rate plus an applicable margin ranging from 0.25 % to 0.75 %.

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

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 %.

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 $ 322,406 as of December 29, 2023 and $ 322,406 as of September 30, 2023.

The ABL Credit Facility will mature on the earlier of five years from May 26, 2021 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.

The ABL Credit Facility uses a forward-looking interest rate based on the Secured Overnight Financing Rate (“SOFR”) consisting of an applicable margin ranging from 1.25 % to 1.75 % and a credit spread adjustment of 0.10 %.

The New Senior Secured Term Loan Facility will mature on May 26, 2028 and borrowings thereunder bearing interest at the rate of forward-looking interest rate based on the “SOFR”, 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.

Senior Notes - On May 26, 2021, the Company completed the issuance and sale of the $ 400.0 million aggregate principal amount of 4.25 % Senior Notes due 2031 (the “Senior Notes”) in a private offering.

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

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

FAIR VALUE MEASUREMENTS

3 unchanged sentences

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.

The fair value gains and losses are included in other (income) and expense,

net within the condensed consolidated statements of operations.

See Note 5, “Other (Income) and Expense, net” for further detail.

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

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

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

The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles.

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

The Company had no active forward currency contracts or other derivative instruments as of December 29, 2023 or September 30, 2023.

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

June 30, 2023 September 30, 2022

December 29, 2023 September 30, 2023

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

2 unchanged sentences

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

June 30, 2023 September 30, 2022

December 29, 2023 September 30, 2023

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

6 unchanged sentences

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

As of June 30, 2023, such obligations were $ 203,675 for the rest of fiscal year 2023 and $ 10,867 for fiscal year 2024 and beyond.

As of December 29, 2023, such obligations were $ 281,447 for the rest of fiscal year 2024 and $ 13,895 for fiscal year 2025 and beyond.

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

13 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 $ 2,594 supporting workers ’ compensation and general liability insurance policies as of June 30, 2023.

The Company also had surety bonds primarily related to performance guarantees on supply agreements and construction contracts, and payment of duties and taxes totaling $ 35,812 as of June 30, 2023.

The Company had outstanding letters of credit totaling $ 2,594 supporting workers ’ compensation and general liability insurance policies as of December 29, 2023.

The Company also had surety bonds primarily related to performance guarantees on supply agreements and construction contracts, and payment of duties and taxes totaling $ 37,722 as of December 29, 2023.

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.

6 unchanged sentences

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

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

infrastructure.

The 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.

5 unchanged sentences

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

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

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

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

1 unchanged sentence

Three months ended

June 30, 2023 June 24, 2022

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

Electrical $ 705,603 $ 14 $ 266,556 $ 819,845 $ 1,721 $ 351,466

Safety & Infrastructure 213,514 92 21,493 241,745 164 45,669

Eliminations — ( 106 ) — ( 1,885 )

Consolidated operations $ 919,117 $ — $ 1,061,590 $ —

Nine months ended

June 30, 2023 June 24, 2022

December 29, 2023 December 30, 2022

(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 30, 2023 June 24, 2022 June 30, 2023 June 24, 2022

Three months ended

(in thousands) December 29, 2023 December 30, 2022

Operating segment Adjusted EBITDA

8 unchanged sentences

Income before income taxes $ 167,653 $ 222,051

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

(b) Represents other items, such as inventory reserves and adjustments, loss on disposal of property, plant and equipment, release of indemnified uncertain tax positions, gain on purchase of business.

loss on assets held for sale, realized or unrealized gain (loss) on foreign currency impacts of intercompany loans and related forward currency derivatives, and restructuring charges.

The Company ’ s net sales by geography were as follows for the three months ended and the nine months ended June 30, 2023 and June 24, 2022:

Three months ended Nine months ended

(in thousands) June 30, 2023 June 24, 2022 June 30, 2023 June 24, 2022

(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, gain on purchase of business.

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

The Company ’ s net sales by geography were as follows for the three months ended December 29, 2023 and December 30, 2022:

Three months ended

(in thousands) December 29, 2023 December 30, 2022

United States $ 708,457 $ 750,087

3 unchanged sentences

Total $ 798,481 $ 833,821

The table below shows the amount of net sales from external customers for each of the Company ’ s product categories which accounted for 10% or more of consolidated net sales in either period for the three months ended and the nine months ended June 30, 2023 and June 24, 2022:

Three months ended Nine months ended

(in thousands) June 30, 2023 June 24, 2022 June 30, 2023 June 24, 2022

Three months ended

(in thousands) December 29, 2023 December 30, 2022

Metal Electrical Conduit and Fittings $ 139,240 $ 111,158

1 unchanged sentence

Plastic Pipe and Conduit 243,840 316,165

Other Electrical products 100,784 106,913 288,149 285,973

Other Electrical products (a) 94,887 87,656

Electrical 593,660 638,705

Mechanical Pipe 84,498 78,774

Other Safety & Infrastructure products 114,672 126,589 347,267 327,211

Other Safety & Infrastructure products (b) 120,323 116,342

Safety & Infrastructure 204,821 195,116

Net sales $ 798,481 $ 833,821

(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

SUBSEQUENT EVENTS

Subsequent to December 29, 2023, the Company has repurchased 148.4 thousand shares at a cost of $ 22.8 million as of February 1, 2024.

On January 30, 2024, the board of directors declared a quarterly cash dividend of $ 0.32 per share of common stock payable on March 15, 2024 to stockholders of record on February 27, 2024.

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

What changed 10-Q

Item 1. Financial Statements