What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-11-21 compared with 2023-11-17 · 112 added, 185 removed, 965 unchanged (24% of the section changed)

4 unchanged sentences

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

and subsidiaries (the "Company") as of September 30, 2023 and 2022, the related consolidated statements of operations, comprehensive income, cash flows, and shareholders' equity, for each of the three years in the period ended September 30, 2023, and the related notes and the schedules listed in the Index at Part IV, Item 15 (collectively referred to as the "financial statements").

and subsidiaries (the "Company") as of September 30, 2024 and 2023, the related consolidated statements of operations, comprehensive income, shareholders' equity, and cash flows, for each of the three years in the period ended September 30, 2024, and the related notes and the schedules listed in the Index at Part IV, Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

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.

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

Critical Audit Matter Description

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

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.

Critical Audit Matters

Critical audit matters are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ DELOITTE & TOUCHE LLP

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Interest expense, net 35,584 35,232 30,676

Loss on extinguishment of debt 13 — — 4,202

Other (income) and expense, net 6 1,963 7,969 ( 490 )

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Change in foreign currency translation adjustment 14,453 10,212 ( 23,943 )

Change in unrecognized (loss) income related to pension benefit plans 5,994 2,523 11,443

Change in unrecognized income related to pension benefit plans 393 5,994 2,523

Total other comprehensive (loss) income 9 14,846 16,206 ( 21,420 )

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Common stock, $ 0.01 par value, 1,000,000,000 shares authorized, 34,859,033 and 37,317,893 shares issued and outstanding, respectively

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

Additional paid-in capital 509,254 506,783

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Deferred income taxes 7 3,369 12,860 3,054

Loss on extinguishment of debt 13 — — 4,202

Provision for losses on accounts receivable and inventory 5,096 5,269 10,235

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Capital expenditures ( 149,861 ) ( 218,888 ) ( 135,776 )

Insurance proceeds for properties, plant and equipment — — 9,627

Proceeds from sale of properties, plant and equipment 1,561 123 779

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Financing activities

Repayments of short-term debt 13 — — ( 4,000 )

Issuance of long-term debt 13 — — 798,000

Repayments of long-term debt 13 — — ( 835,120 )

Issuance of common stock, net of taxes withheld 5 ( 17,824 ) ( 14,428 ) ( 24,045 )

Repurchase of common stock ( 381,040 ) ( 491,033 ) ( 500,161 )

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

Finance lease payments ( 1,957 ) ( 1,320 ) —

Dividends paid to shareholders ( 34,461 ) — —

Net cash used for financing activities ( 435,282 ) ( 506,781 ) ( 524,206 )

3 unchanged sentences

Cash and cash equivalents at end of period $ 351,385 $ 388,114 $ 388,751

Fiscal year ended

(in thousands) Note September 30, 2023 September 30, 2022 September 30, 2021

Supplementary Cash Flow information

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Capital expenditures, not yet paid 12,848 7,893 8,653

Fiscal year ended

(in thousands) Note September 30, 2024 September 30, 2023 September 30, 2022

Acquisitions of businesses, not yet paid — 13,625 12,628

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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

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Repurchase of common stock ( 2,945 ) ( 29 ) — — ( 383,922 ) — ( 383,951 )

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

Dividends Paid to Shareholders — — — — ( 34,461 ) — ( 34,461 )

Balance as of September 30, 2024 34,858 $ 350 $ — $ 509,254 $ 1,049,390 $ ( 19,094 ) $ 1,539,900

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

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

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

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

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

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

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

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.

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, 2024, there were no authorized repurchases remaining.

On May 2, 2024, the board of directors approved a share repurchase program, under which the Company may repurchase up to $ 500.0 million of its outstanding stock.

As of September 30, 2024, $ 428.1 million of repurchases remained available under the plan.

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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.

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.

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.

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 energy 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 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.

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

The solar energy 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 year ended September 30, 2024, the Company has recognized a reduction of revenue of $ 68,738 for the economic value of tax credits to be transferred and a benefit to cost of sales of $ 83,999 .

As of September 30, 2024, the Company has a liability of $ 22,489 for credits to be transferred or the value thereof.

As of September 30, 2024, all activity related to the solar energy 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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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.

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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.

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The determination of fair values of identifiable assets and liabilities requires estimates and the use of valuation techniques when market value is not readily available.

For intangible assets acquired in a business combination, the Company typically use the income method.

For intangible assets acquired in a business combination, the Company typically use the

income method.

Significant estimates in valuing certain intangible assets include, but are not limited to, the amount and timing of future cash flows, growth rates, discount rates and useful lives.

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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.

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.

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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.

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.

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 in fiscal 2023 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 2024, 2023, and 2022.

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The Company periodically assesses the realizability of the deferred tax assets.

In making this determination management considers all available evidence, both positive and negative, including earnings history, expectations of future taxable income and available tax planning strategies.

In making this determination management considers all available evidence, both positive and negative, including

earnings history, expectations of future taxable income and available tax planning strategies.

A valuation allowance is recorded to reduce the Company’s deferred tax assets to the amount that is considered more likely than not to be realized.

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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 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.

On August 16, 2022, the 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 took effect on 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.

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

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

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.

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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 fiscal 2025 and include the disclosures required by the ASU within the Segment Footnote of the annual report and quarterly reports beginning in fiscal 2026.

2023-09 Income Taxes (Topic 740);

Improvements to Income Tax Disclosures The ASU requires companies to provide additional tax disclosures including specific categories in the rate reconciliations and reconciling items that meet a quantitative threshold.

Additional disclosures are also required for income tax paid and the disaggregation of domestic and foreign income tax expense.

The Company will adopt the standard in fiscal 2026 and include the disclosures required by the ASU within the Income Tax Footnote of the annual report.

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

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Therefore, the Company's significant assumption and judgments in determining the discount rate include determining the incremental borrowing rate.

The Company’s incremental borrowing rates are based on the term of the lease, the economic environment of the lease and the effect of collateralization.

The Company’s incremental borrowing rates are based on the term of the

lease, the economic environment of the lease and the effect of collateralization.

The valuation of the ROU asset also includes lease payments made in advance of the lease commencement date and initial direct costs incurred to secure the lease and is reduced for lease incentives.

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

During the fiscal year ended September 30, 2024, the Company paid out $ 6,036 of accrued purchase price primarily related to the fiscal 2022 acquisition of Cascade Poly Pipe & Conduit and Northwest Polymers.

No other acquisition activity occurred during fiscal 2024.

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.

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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.

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.

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Net sales and net income of the acquired companies are included in the consolidated statement of operations for the year ended September 30, 2022 for the post-acquisition period.

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

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

FRE Composites is a leading manufacturer of fiberglass conduit for the electrical and industrial market.

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

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

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

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

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

The acquisitions in fiscal 2021 were funded using cash-on-hand.

The Company incurred approximately $ 667 in acquisition-related expenses for these acquisitions, which were recorded as a component of selling, general and administrative expenses.

The purchase price for FRE Composites, which was finalized during the fourth quarter of fiscal 2021, was allocated to tangible and intangible assets acquired and liabilities assumed, based on their fair values.

The following table summarizes the Level 3 fair values assigned to the net assets acquired and liabilities assumed as of the acquisition date for fiscal 2021:

(in thousands) FRE Composites

Fair value of consideration transferred:

Cash consideration $ 36,993

Fair value of assets acquired and liabilities assumed:

Accounts receivable 2,163

Inventories 3,355

Intangible assets 18,300

Fixed assets 8,509

Accounts payable ( 1,186 )

Income Taxes ( 4,293 )

Other ( 240 )

Net assets acquired 27,045

Excess purchase price attributed to goodwill acquired $ 9,948

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

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

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

FRE Composites

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

Customer relationships $ 14,700 12.0

Other 3,600 6.0

Total intangible assets $ 18,300

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

Due to the immaterial nature of these acquisitions, both individually, and in the aggregate, the Company did not include the full year pro forma results of operations for the acquisition year.

POSTRETIREMENT BENEFITS

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September 30, 2024 September 30, 2023

Equity securities — % 50 %

Debt securities 96 % 54 %

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

United States equity securities $ — $ — $ — $ 29,583 $ — $ 29,583

equity securities — — — 22,913 — 22,913

Fixed income securities $ 34,077 $ 73,394 $ 107,471 $ 21,119 $ 35,733 $ 56,852

1 unchanged sentence

Total $ 38,540 $ 73,394 $ 111,934 $ 69,710 $ 35,733 $ 105,443

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

Publicly traded securities are valued at the last trade or closing price reported in the active market in which the individual securities are traded.

Certain equity securities are held within commingled funds, which are valued at the unitized net asset value (“NAV”) or percentage of the NAV as determined by the custodian of the fund.

These values are based on the fair value of the underlying net assets owned by the fund.

Fixed income securities consist primarily of government and agency securities, corporate debt securities, and mortgage and other asset-backed securities.

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When quotes are not available, fair value is determined by utilizing a discounted cash flow approach, which incorporates other observable inputs such as cash flows, underlying security structure and market information including interest rates and bid evaluations of comparable securities.

As of September 30, 2023 and September 30, 2022, the Company did not have any Level 3 pension assets.

Certain fixed income securities are held within commingled funds, which are valued utilizing NAV as determined by the custodian of the fund.

These values are based on the fair value of the underlying net assets owned by the fund.

As of September 30, 2024 and September 30, 2023, the Company did not have any Level 3 pension assets

Cash and cash equivalents consist primarily of short-term commercial paper, and other cash or cash-like instruments including settlement proceeds due from brokers, stated at cost, which approximates fair value.

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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 $ 5,483 , $ 4,615 and $ 3,400 for the fiscal years ended September 30, 2023, September 30, 2022 and September 30, 2021, respectively.

Expense for the defined contribution plans is computed as a percentage of participants’ compensation and was $ 6,396 , $ 5,483 and $ 4,615 for the fiscal years ended September 30, 2024, September 30, 2023 and September 30, 2022, respectively.

Multi-Employer Plan — The Company has a liability of $ 3,974 as of September 30, 2024 and $ 4,336 as of September 30, 2023 representing the Company’s proportionate share of a multi-employer pension plan which was exited prior to fiscal 2017.

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The 2020 Omnibus Incentive Plan provides for stock purchases and grants of other equity awards, including non-qualified stock options, stock purchase rights, restricted stock, restricted stock units (“RSUs”), performance shares, performance stock units (“PSUs”), stock appreciation rights, dividend equivalents and other stock-based awards to directors, officers, other employees and consultants.

The 2020 Omnibus Incentive Plan replaces and succeeds the Atkore International Group Inc.

The 2020 Omnibus Incentive Plan replaces and

succeeds the Atkore International Group Inc.

2016 Omnibus Incentive Plan (the “2016 Omnibus Incentive Plan”).

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September 30, 2024 September 30, 2023 September 30, 2022

Expected dividend yield — % — % — %

Expected volatility 51 % 49 % 59 %

Range of risk-free interest rates 3.92 % 1.40 % 0.52 %

Range of expected option lives 6 years 6 years 6 years

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

Expected dividend yield (a) n/a — % — %

Expected volatility n/a 51 % 49 %

Range of risk-free interest rates n/a 3.92 % 1.40 %

Range of expected option lives n/a 6 years 6 years

(a) No options were issued in Fiscal 2024.

On November 17, 2023, the company announced that quarterly dividends will be paid on the Company’s common stock starting in fiscal 2024.

No stock options were granted in fiscal 2024.

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

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Forfeited ( 30 ) 115.57

Dividends 1 $ 118.89

Nonvested as of September 30, 2024 240 $ 117.81

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Fair value $ 162.15 $ 121.52 $ 122.25

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

On November 17, 2023, the company announced that quarterly dividends will be paid on the Company’s common stock starting in fiscal 2024.

No dividends were paid in fiscal 2023 or 2022.

For grants during fiscal year ended 2024, 2023 and 2022, the expected volatility is based on the Company’s stock price volatility.

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Vested ( 269 ) 31.39

Added by Dividends 1 126.08

Adjustment for achieved performance upon issuance 117 31.02

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(in thousands) September 30, 2024 September 30, 2023 September 30, 2022

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

Undesignated foreign currency derivative instruments $ — $ — $ ( 4,379 )

Business interruption insurance recovery — — ( 15,500 )

Foreign exchange loss (gain) on intercompany loans 132 ( 88 ) 5,342

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Other (income) and expense, net $ 1,963 $ 7,969 $ ( 490 )

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 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.

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

The Company recognized an impairments of $ 733 and $ 7,477 on assets related to the Company’s operations in Russia for the years ended September 30, 2024 and September 30, 2023, respectively.

Significant components of income before income taxes and income tax expense for the fiscal years ended September 30, 2024, September 30, 2023 and September 30, 2022 consisted of the following:

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Solar tax credits — % ( 5 ) % — %

Nondeductible executive compensation 1 % — % — %

Nontaxable solar tax credits ( 3 ) % — % — %

Other — % 1 % 1 %

Effective income tax rate 19 % 19 % 24 %

The Company’s effective tax rate for fiscal 2024 differs from the statutory rate primarily due to state income taxes of $ 12,805 offset by the tax benefit of nontaxable solar manufacturing credits of $ 18,972 and the excess tax benefit from share-based compensation of $ 13,773 .

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.

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

4 unchanged sentences

Tax loss and credit carryforwards 20,436 20,648

Postretirement benefits — 583

Capitalized research and development 8,446 3,626

Inventory 14,274 21,256

11 unchanged sentences

Net deferred tax liability $ ( 26,020 ) $ ( 21,800 )

As of September 30, 2023, the Company has $ 7,744 of federal net operating loss carryforwards which do not expire and $ 23,599 of state net operating loss carryforwards which expire beginning in 2024 through

As of September 30, 2024, the Company has $ 37,674 of state net operating loss carryforwards which expire beginning in 2025 through 2044.

In certain non-U.S.

16 unchanged sentences

Balance as of September 30, 2023 2,581

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

Additions based on tax positions related to prior years 84

Additions based on tax positions related to current year 1,287

1 unchanged sentence

Balance as of September 30, 2024 $ 3,367

During fiscal 2024, the balance of unrecognized tax benefits increased by $ 1,370 as a result of federal and various state jurisdictions’ uncertain positions, partially offset by a decrease of $ 585 as a result of completing tax audits.

The related accrued penalties and interest for uncertain tax positions increased by $ 281 .

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.

2 unchanged sentences

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 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 $ 72 .

Many of the Company’s uncertain tax positions relate to tax years that remain subject to audit by the taxing authorities.

11 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, 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.

For the fiscal year ended September 30, 2024, the Company recorded no additional liability for United States or non-U.S income taxes on the undistributed income of subsidiaries 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.

As of September 30, 2024, certain subsidiaries had approximately $ 163,154 of undistributed income that the Company intends to permanently reinvest.

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Diluted earnings per share $ 12.69 $ 17.27 $ 20.30

(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.

(1) There were no stock options to purchase shares of common stock outstanding during the years ended September 30, 2024, September 30, 2023, and September 30, 2022, respectively, that would have been anti-dilutive.

Any anti-dilutive options available would not be included in the calculation of diluted earnings per share.

ACCUMULATED OTHER COMPREHENSIVE LOSS

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Inventories, net $ 524,695 $ 493,852

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.

Total inventories would be $ 14,425 lower and $ 29,826 higher than reported as of September 30, 2024 and September 30, 2023, respectively, if the first-in, first-out method was used for all inventories.

During the years ended September 30, 2024 and September 30, 2023, inventory quantities in specific pools were lower at the end of the period than the quantities at the beginning of the period.

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Goodwill acquired during year 18,669 14 18,683

Exchange rate effects ( 6,727 ) ( 386 ) ( 7,113 )

Balance as of September 30, 2022 $ 236,708 $ 52,622 $ 289,330

Goodwill acquired during year 18,669 14 18,683

Impairment ( 1,721 ) — ( 1,721 )

2 unchanged sentences

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

Exchange rate effects 2,857 37 2,894

Balance as of September 30, 2024 $ 261,284 $ 52,716 $ 314,000

Goodwill balances include $ 5,645 and $ 43,000 of accumulated impairment losses within the Electrical and Safety & Infrastructure segments, respectively, as of September 30, 2024 and September 30, 2023.

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.

In fiscal 2023, the Company recognized an impairment of goodwill that was allocated from the reporting unit on a relative fair value basis of $ 1,721 r elated to its plans to exit operations in Russia.

No additional goodwill impairments were recognized in fiscal 2024.

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

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Long-term debt $ 764,838 $ 762,687

During fiscal 2021, the Company made voluntary prepayments of principal on the New Senior Secured Term Loan Facility of $ 26,000 .

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.

No principal payments were made on existing debt in fiscal 2022, fiscal 2023 or fiscal 2024.

As of September 30, 2024, future contractual maturities of long-term debt are as follows (in thousands):

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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”).

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.

The New Senior Secured Term Loan Facility will mature on May 26 2028.

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

4 unchanged sentences

AII's availability under the ABL Credit Facility was $ 325,000 and $ 322,406 as of September 30, 2024 and September 30, 2023, respectively.

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

value of eligible inventory, subject to certain limitations.

There were no borrowings outstanding under the ABL Credit Facility as of September 30, 2024 and September 30, 2023, respectively.

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

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

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

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

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

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

Many of these covenants are only applicable when the Company has surpassed certain thresholds relating to its indebtedness and availability under the ABL Credit Facility.

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

Use of Proceeds - In fiscal 2021, the proceeds from the Senior Notes and the New Senior Secured Term Loan Facility were used to repay the remaining principal of the existing First Lien Term Loan Facility of $ 772.0 million and $ 4.0 million of accrued interest.

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

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

8 unchanged sentences

The Company had no active forward currency contracts or other derivative instruments as of September 30, 2024, or September 30, 2023, 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.

4 unchanged sentences

Cash equivalents $ 265,077 $ — $ — $ 321,282 $ — $ —

Forward currency contracts — — — — — —

Forward currency contracts — $ — — — $ — —

The Company’s remaining financial instruments consist primarily of cash, accounts receivable and accounts payable whose carrying value approximate their fair value due to their short-term nature.

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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.

(“Tyco”), now Johnson Controls, Inc.

1 unchanged sentence

When Special Products Claims arise, JCI has defended and indemnified the Company as required.

As of September 30, 2023, the Company believes that the range of reasonably possible losses for Special Products Claims and other product liabilities is between $ 1,000 and $ 8,000 .

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

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

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

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

The amount was recorded as other income within the consolidated statements of operations for the year ended September 30, 2021.

In Q4, the Company has been named a defendant in several putative class action lawsuits, consolidated under the caption In re:

PVC Pipe Antitrust Litigation (N.D.

24-cv-07639), seeking injunctive and monetary relief on behalf of both direct and indirect purchasers of PVC water pipe and PVC conduit.

The suits generally allege anticompetitive conduct related the price of PVC pipes sold in the United States between approximately 2021 and the present.

Specifically, the complaints allege that the defendant PVC pipe manufacturers improperly shared otherwise confidential information through their contribution of information to, and readership of, a weekly report called “PVC & Pipe Weekly” published by defendant Oil Price Information Service, LLC (“OPIS”), as well as through direct communications with each other.

The complaints claim that this conspiracy violated Section 1 of the Sherman Act and certain state laws.

All cases are pending in federal court for the Northern District of Illinois.

The Company believes there are defenses, both factual and legal, to the allegations in these various proceedings and the Company plans to vigorously defend itself.

As these proceedings are in the early stages, it is not possible for the Company to predict any outcome or estimate the amount of loss, if any, which could be associated with any adverse decision.

While the Company does not believe that any of these proceedings will have a material adverse effect on its financial condition, the Company cannot give assurance that the proceedings will not have a material effect on its results of operations.

In addition to the matters discussed above, from time to time, the Company is subject to a number of disputes, administrative proceedings and other claims arising out of the ordinary conduct of the Company's business.

2 unchanged sentences

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

The Company has outstanding letters of credit totaling $ 2,594 supporting workers’ compensation and general liability insurance policies and surety bonds primarily related to performance guarantees on supply agreements and construction contracts, and payment of duties and taxes totaling $ 37,087 as of September 30, 2023.

The Company has no letters of credit outstanding to support workers’ compensation and general liability insurance policies and surety bonds primarily related to performance guarantees on supply agreements and construction contracts, and payment of duties and taxes totaling $ 39,856 as of September 30, 2024.

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.

40 unchanged sentences

Interest expense, net ( 35,584 ) ( 35,232 ) ( 30,676 )

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

Stock-based compensation ( 20,300 ) ( 21,101 ) ( 17,245 )

4 unchanged sentences

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

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

(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 (includes loss on assets held for sale in Russia.

See Note 12, “Goodwill and Intangible Assets” for additional information), realized or unrealized gain (loss) on foreign currency impacts of intercompany loans, impairment charges, related forward currency derivatives, transaction and restructuring costs.

The Company’s long-lived assets and net sales by geography were as follows:

27 unchanged sentences

As of September 30, 2024, Sonepar USA represented 17 % 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 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.

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.

For fiscal 2024, one customer, Sonepar USA accounted for more than 10% of sales, for fiscal 2023, one customer, Sonepar USA accounted for more than 10% of sales, for fiscal 2022, no single customer accounted for more than 10% of sales.

Concentration of Employees — As of September 30, 2024, approximately 20 % of the Company's employees were represented by a union under a collective bargaining agreement.

All unions are located in either the United States or Canada, with no unions or Worker's Councils at any of the other locations abroad.

On July 14, 2020, the Company and the United Steelworkers Union, representing approximately 350 employees, reached agreement on the terms of a new collective bargaining agreement for our largest facility in Harvey, Illinois, which expires in April 2024.

The Company believes its relationship with its employees is good.

As of September 30, 2024, there are approximately 1,121 employees represented by a union.

On July 14, 2020, the Company and the United Steelworkers Union reached agreement on the terms of a new collective bargaining agreement for our largest facility in Harvey, Illinois, which expired

in April 2024.

The Company believes its relationship with its employees is good and negotiations with the union are ongoing notwithstanding the expiration of the agreement.

SUBSEQUENT EVENTS

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.

On November 18, 2024, the Board of Directors declared a quarterly cash dividend of $ 0.32 per share of common stock payable on December 16, 2024, to stockholders of record on December 6, 2024.

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