What changed in this filing

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Item 1. Financial Statements

2024-07-26 compared with 2024-05-03 · 166 added, 119 removed, 521 unchanged (35% of the section changed)

3 unchanged sentences

(Dollars in thousands, except share and per share data)

Assets March 31, 2024 (unaudited) December 31, 2023

Assets June 30, 2024 (unaudited) December 31, 2023

Current assets:

Cash and cash equivalents $ 63,738 $ 64,447

Accounts receivable, net of allowances of $ 997 and $ 908 at March 31, 2024 and December 31, 2023 respectively

Accounts receivable, net of allowances of $ 1,066 and $ 908 at June 30, 2024 and December 31, 2023 respectively

123,400 125,284

33 unchanged sentences

Authorized 120,000,000 shares;

32,423,400 and 32,254,728 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

32,434,858 and 32,254,728 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 158,791 145,653

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net sales $ 234,081 $ 231,252 $ 473,740 $ 463,792

9 unchanged sentences

Interest expense, net 4,240 5,163 9,638 10,728

Other income, net ( 572 ) ( 276 )

Other expense (income), net 331 ( 727 ) ( 241 ) ( 1,003 )

4,571 4,436 9,397 9,725

Earnings before income tax expense 41,226 38,400 78,076 67,519

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net earnings $ 32,069 $ 30,110 $ 61,055 $ 52,820

8 unchanged sentences

Condensed Consolidated Statements of Changes in Stockholders’ Equity

For the Three Months Ended March 31, 2024 and 2023

For the Three and Six Months Ended June 30, 2024 and 2023

(Dollars in thousands, except share and per share data)

8 unchanged sentences

Other comprehensive loss ( 12,563 ) — ( 12,563 ) — — —

Repurchases of common stock, including excise tax ( 5,254 ) — — ( 36,122 ) ( 2 ) ( 5,252 )

Repurchases of common stock, including

excise tax ( 5,254 ) — — ( 36,122 ) ( 2 ) ( 5,252 )

Shares and options issued under stock plans 13,638 — — 204,794 13 13,625

Balance - March 31, 2024 1,078,791 926,474 ( 3,872 ) 32,423,400 2,163 154,026

Net earnings 32,069 32,069 — — — —

Other comprehensive loss ( 3,262 ) — ( 3,262 ) — — —

Repurchases of common stock, including

excise tax ( 11 ) — — ( 72 ) — ( 11 )

Shares and options issued under stock plans 4,777 — — 11,530 1 4,776

Balance - June 30, 2024 $ 1,112,364 $ 958,543 $ ( 7,134 ) 32,434,858 $ 2,164 $ 158,791

Balance - December 31, 2022 $ 938,284 $ 814,487 $ ( 7,154 ) 32,152,787 $ 2,145 $ 128,806

1 unchanged sentence

Other comprehensive income 9,013 — 9,013 — — —

Repurchases of common stock, including excise tax ( 3,887 ) — — ( 28,109 ) ( 2 ) ( 3,885 )

Repurchases of common stock, including

excise tax ( 3,887 ) — — ( 28,109 ) ( 2 ) ( 3,885 )

Shares and options issued under stock plans 7,296 — — 100,949 7 7,289

Balance - March 31, 2023 973,416 837,197 1,859 32,225,627 2,150 132,210

Net earnings 30,110 30,110 — — — —

Other comprehensive loss ( 1,668 ) — ( 1,668 ) — — —

Repurchases of common stock, including

excise tax ( 76 ) — — ( 567 ) — ( 76 )

Shares and options issued under stock plans 5,121 — — 14,142 1 5,120

Balance - June 30, 2023 $ 1,006,903 $ 867,307 $ 191 32,239,202 $ 2,151 $ 137,254

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(Dollars in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

6 unchanged sentences

Unrealized gain on foreign currency transactions and deferred compensation ( 507 ) ( 1,010 )

Gain on disposal of assets ( 144 ) ( 968 )

Asset impairment and loss on disposal of assets 313 5,203

Change in fair value of contingent consideration liability ( 91 ) ( 6,400 )

11 unchanged sentences

Proceeds from sale of assets 272 1,881

Proceeds from settlement of net investment hedge — 2,740

Investment in affiliates ( 80 ) ( 72 )

9 unchanged sentences

Effect of exchange rate changes on cash ( 1,283 ) 2,216

Decrease in cash and cash equivalents ( 4,098 ) ( 6,361 )

(Decrease) increase in cash and cash equivalents ( 709 ) 296

Cash and cash equivalents beginning of period 64,447 66,560

13 unchanged sentences

GAAP” or “GAAP”) governing interim financial statements and the instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934 (the "Exchange Act") and therefore do not include some information and notes necessary to conform to annual reporting requirements.

The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the operating results expected for the full year or any interim period.

The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the operating results expected for the full year or any interim period.

Recent Accounting Pronouncements

Recently Issued Accounting Standards

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740) - Improvements to Income Tax Disclosures." The new guidance is intended to enhance the transparency and decision usefulness of income tax disclosures by requiring disaggregated information about a reporting entity's effective tax rate reconciliation and information on income taxes paid.

In December 2023, the FASB issued Accounting Standards Update ("ASU") 2023-09, "Income Taxes (Topic 740) - Improvements to Income Tax Disclosures." The new guidance is intended to enhance the transparency and decision usefulness of income tax disclosures by requiring disaggregated information about a reporting entity's effective tax rate reconciliation and information on income taxes paid.

The amendment is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

9 unchanged sentences

Recently Adopted Accounting Standards

In August 2023, the FASB issued Accounting Standards Update ("ASU") 2023-05, "Business Combinations - Joint Venture Formations (Subtopic 805-60):

In August 2023, the FASB issued ASU 2023-05, "Business Combinations - Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement." The new guidance applies to the formation of a joint venture and requires a joint venture to initially measure all contributions received upon its formation at fair value.

3 unchanged sentences

Stock-Based Compensation

The Company’s results for the three months ended March 31, 2024 and 2023 reflected the following stock-based compensation cost, and such compensation cost had the following effects on net earnings:

Increase/(Decrease) for the

Three Months Ended March 31,

The Company’s results for the three and six months ended June 30, 2024 and 2023 reflected the following stock-based compensation cost, and such compensation cost had the following effects on net earnings:

Increase/(Decrease) for the Increase/(Decrease) for the

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Cost of sales $ 425 $ 545 $ 825 $ 959

6 unchanged sentences

The Company has approved and reserved a number of shares to be issued upon exercise of the outstanding options that is adequate to cover all exercises.

As of March 31, 2024, the plan had 841,421 shares available for future awards, which included an additional 800,000 shares approved by the Company's shareholders during its annual meeting of shareholders held on June 22, 2023.

As of June 30, 2024, the plan had 841,101 shares available for future awards, which included an additional 800,000 shares approved by the Company's shareholders during its annual meeting of shareholders held on June 22, 2023.

Compensation expense for stock options and stock awards is recognized on a straight-line basis over the vesting period, generally three to five years for stock options, three years for employee restricted stock awards, three years for employee performance share awards, and three years for non-employee director restricted stock awards.

Certain awards provide for accelerated vesting if there is a change in control (as defined in the plans) or other qualifying events.

Option activity for the three months ended March 31, 2024 and 2023 is summarized below:

For the Three Months Ended March 31, 2024 Shares (000s) Weighted

Option activity for the six months ended June 30, 2024 and 2023 is summarized below:

For the Six Months Ended June 30, 2024 Shares (000s) Weighted

Price Aggregate

4 unchanged sentences

Forfeited ( 2 ) 137.06

Outstanding as of March 31, 2024 1,065 $ 112.48 $ 45,223 6.3

Exercisable as of March 31, 2024 699 $ 97.89 $ 39,881 4.9

For the Three Months Ended March 31, 2023 Shares (000s) Weighted

Outstanding as of June 30, 2024 1,052 $ 112.90 $ 43,199 6.0

Exercisable as of June 30, 2024 687 $ 98.31 $ 38,241 4.7

For the Six Months Ended June 30, 2023 Shares (000s) Weighted

Price Aggregate

4 unchanged sentences

Forfeited ( 11 ) 131.79

Outstanding as of March 31, 2023 1,120 $ 104.04 $ 29,327 6.5

Exercisable as of March 31, 2023 743 $ 88.07 $ 28,781 5.2

Canceled ( 1 ) 138.07

Outstanding as of June 30, 2023 1,096 $ 103.96 $ 35,430 6.2

Exercisable as of June 30, 2023 728 $ 87.95 $ 34,170 4.8

ASC 718 requires companies to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award.

The weighted average fair values of the stock options granted under the Plans were calculated using either the Black-Scholes model or the Binomial model, whichever was deemed to be most appropriate.

For the three months ended March 31, 2024, the fair value of each option grant was estimated on the date of the grant using the following weighted average assumptions:

For the six months ended June 30, 2024, the fair value of each option grant was estimated on the date of the grant using the following weighted average assumptions:

dividend yields of 0.6 %;

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and expected lives of 5.0 years.

For the three months ended March 31, 2023, the fair value of each option grant was estimated on the date of the grant using the following weighted average assumptions:

For the six months ended June 30, 2023, the fair value of each option grant was estimated on the date of the grant using the following weighted average assumptions:

dividend yields of 0.5 %;

7 unchanged sentences

Treasury zero-coupon issues with a remaining term equal to the expected life.

Other information pertaining to option activity during the three months ended March 31, 2024 and 2023 is as follows:

Other information pertaining to option activity during the three and six months ended June 30, 2024 and 2023 is as follows:

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Weighted-average fair value of options granted $ — $ — $ 44.52 $ 40.91

Total intrinsic value of stock options exercised ($000s) $ 944 $ 597 $ 11,321 $ 2,181

Non-vested restricted stock activity for the three months ended March 31, 2024 and 2023 is summarized below:

Three Months Ended March 31,

Non-vested restricted stock activity for the six months ended June 30, 2024 and 2023 is summarized below:

Six Months Ended June 30,

Shares (000s) Weighted

6 unchanged sentences

Forfeited ( 2 ) 132.81 ( 4 ) 128.06

Non-vested balance as of March 31 118 $ 139.95 128 $ 131.41

Non-vested performance share activity for the three months ended March 31, 2024 and 2023 is summarized below:

Three Months Ended March 31,

Non-vested balance as of June 30 119 $ 140.14 125 $ 131.76

Non-vested performance share activity for the six months ended June 30, 2024 and 2023 is summarized below:

Six Months Ended June 30,

Shares (000s) Weighted

6 unchanged sentences

Forfeited — — — —

Non-vested balance as of March 31 79 $ 150.73 76 $ 135.25

Non-vested balance as of June 30 79 $ 150.73 76 $ 135.25

The performance share (“PS”) awards provide the recipients the right to receive a certain number of shares of the Company’s common stock in the future, subject to an EBITDA performance hurdle, where vesting is dependent upon the Company achieving a certain EBITDA percentage growth over the performance period, and relative total shareholder return (TSR) where vesting is dependent upon the Company’s TSR performance over the performance period relative to a comparator group consisting of the Russell 2000 index constituents.

4 unchanged sentences

volatilities of 25 % and 32 %;

and initial TSR’s of 10.3 % and 4.2 %, in each case for the three months ended March 31, 2024 and 2023, respectively.

and initial TSR’s of 10.3 % and 4.2 %, in each case for the six months ended June 30, 2024 and 2023, respectively.

Expense is estimated based on the number of shares expected to vest, assuming the requisite service period is rendered and the probable outcome of the performance condition is achieved.

4 unchanged sentences

For PS grants made for the 2024-2026 performance period, grants are subject to such holding period.

As of March 31, 2024 and 2023, there were $ 30,380 and $ 30,507 , respectively, of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the plans.

As of March 31, 2024, the unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 2.2 years.

As of June 30, 2024 and 2023, there were $ 26,557 and $ 26,244 , respectively, of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted under the plans.

As of June 30, 2024, the unrecognized compensation cost is expected to be recognized over a weighted-average period of approximately 1.9 years.

The Company estimates that share-based compensation expense for the year ended December 31, 2024 will be approximately $ 16,700 .

7 unchanged sentences

Such repurchases of shares from employees are funded with existing cash on hand.

During the three months ended March 31, 2024 and 2023, the Company purchased 36,122 and 28,109 shares, respectively, from employees in connection with the tax settlement of vested shares and/or exercised stock options under the Company's omnibus incentive plan at an average cost of $ 144.02 and $ 136.94 , respectively.

During the six months ended June 30, 2024 and 2023, the Company purchased 36,194 and 28,676 shares, respectively, from employees in connection with the tax settlement of vested shares and/or exercised stock options under the Company's omnibus incentive plan at an average cost of $ 144.04 and $ 136.85 , respectively.

NOTE 3 – INVENTORIES

Inventories, net of reserves at March 31, 2024 and December 31, 2023 consisted of the following:

March 31, 2024 December 31, 2023

Inventories, net of reserves at June 30, 2024 and December 31, 2023 consisted of the following:

June 30, 2024 December 31, 2023

Raw materials $ 36,069 $ 39,517

3 unchanged sentences

NOTE 4 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at March 31, 2024 and December 31, 2023 are summarized as follows:

March 31, 2024 December 31, 2023

Property, plant and equipment at June 30, 2024 and December 31, 2023 are summarized as follows:

June 30, 2024 December 31, 2023

Land $ 11,612 $ 11,787

7 unchanged sentences

If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset, which is generally based on discounted cash flows.

There were no impairment charges recorded for the three months ended March 31, 2024 and 2023.

Included in "General and administrative expenses" were $ 6,146 of restructuring-related impairment and asset disposal charges for the three and six months ended June 30, 2023.

There were no such charges related to restructuring for the three and six months ended June 30, 2024.

NOTE 5 - INTANGIBLE ASSETS

The Company had goodwill in the amount of $ 771,538 and $ 778,907 as of March 31, 2024 and December 31, 2023, respectively, subject to the provisions of ASC 350, “Intangibles-Goodwill and Other.” The decrease in goodwill is primarily due to foreign currency translation adjustments.

Identifiable intangible assets with finite lives at March 31, 2024 and December 31, 2023 are summarized as follows:

(in years) Gross Carrying Amount at March 31, 2024 Accumulated Amortization at March 31, 2024 Gross Carrying Amount at December 31, 2023 Accumulated Amortization at December 31, 2023

The Company had goodwill in the amount of $ 770,026 and $ 778,907 as of June 30, 2024 and December 31, 2023, respectively, subject to the provisions of ASC 350, “Intangibles-Goodwill and Other.” The decrease in goodwill is due to changes in foreign currency translation.

Identifiable intangible assets with finite lives at June 30, 2024 and December 31, 2023 are summarized as follows:

(in years) Gross Carrying Amount at June 30, 2024 Accumulated Amortization at June 30, 2024 Gross Carrying Amount at December 31, 2023 Accumulated Amortization at December 31, 2023

Customer relationships & lists 10 - 20

6 unchanged sentences

$ 474,836 $ 298,734 $ 479,235 $ 288,023

Amortization of identifiable intangible assets was approximately $ 6,342 and $ 7,293 for the three months ended March 31, 2024 and 2023, respectively.

Amortization of identifiable intangible assets was approximately $ 5,243 and $ 11,585 for the three and six months ended June 30, 2024, respectively, and $ 6,892 and $ 14,185 for the three and six months ended June 30, 2023, respectively.

Assuming no change in the gross carrying value of identifiable intangible assets, estimated amortization expense is $ 7,530 for the remainder of 2024, $ 15,645 for 2025, $ 15,434 for 2026, $ 14,907 for 2027, $ 14,509 for 2028 and $ 14,086 for 2029.

At March 31, 2024 and December 31, 2023, there were no identifiable intangible assets with indefinite useful lives as defined by ASC 350.

At June 30, 2024 and December 31, 2023, there were no identifiable intangible assets with indefinite useful lives as defined by ASC 350.

Identifiable intangible assets are reflected in “Intangible assets with finite lives, net” on the Company’s condensed consolidated balance sheets.

There were no changes to the useful lives of intangible assets subject to amortization during the three months ended March 31, 2024 and 2023.

There were no changes to the useful lives of intangible assets subject to amortization during the six months ended June 30, 2024 and 2023.

NOTE 6 - EQUITY METHOD INVESTMENT

9 unchanged sentences

The joint venture is accounted for under the equity method of accounting since the Company is not the primary beneficiary as the Company does not have the power to direct the activities of the joint venture that most significantly impact its economic performance.

The Company recognized a loss of $ 121 and $ 139 for the three months ended March 31, 2024 and 2023, respectively, relating to its portion of the joint venture's expenses in other expense.

The Company made capital contributions to the investment totaling $ 42 and $ 56 for the three months ended March 31, 2024 and 2023, respectively.

The carrying value of the joint venture at March 31, 2024 and December 31, 2023 was $ 3,997 and $ 4,076 , respectively, and is recorded in "Other non-current assets" on the condensed consolidated balance sheets.

The Company recognized a loss of $ 122 and $ 243 for the three and six months ended June 30, 2024, respectively, and $ 139 and $ 278 for the three and six months ended June 30, 2023, respectively, relating to its portion of the joint venture's expenses in other expense.

The Company made capital contributions to the investment totaling $ 38 and $ 80 for the three and six months ended June 30, 2024, respectively, and $ 16 and $ 72 for the three and six months ended June 30, 2023, respectively.

The carrying value of the joint venture at June 30, 2024 and December 31, 2023 was $ 3,912 and $ 4,076 , respectively, and is recorded in "Other non-current assets" on the condensed consolidated balance sheets.

NOTE 7 – REVOLVING LOAN

2 unchanged sentences

The loans may be used for working capital, letters of credit, and other corporate purposes and may be drawn upon at the Company’s discretion.

As of March 31, 2024 and December 31, 2023, the total balance outstanding on the 2022 Credit Agreement amounted to $ 301,569 and $ 309,569 , respectively.

As of June 30, 2024 and December 31, 2023, the total balance outstanding on the 2022 Credit Agreement amounted to $ 266,569 and $ 309,569 , respectively.

There are no installment payments required on the revolving loans;

1 unchanged sentence

Amounts outstanding under the 2022 Credit Agreement are subject to an interest rate equal to a fluctuating rate as defined by the 2022 Credit Agreement plus an applicable rate.

The applicable rate is based upon the Company’s consolidated net leverage ratio, as defined in the 2022 Credit Agreement, and the interest rate was 6.554 % at March 31, 2024.

The Company is also required to pay a commitment fee on the unused portion of the revolving loan, which is based on the Company’s consolidated net leverage ratio as defined in the 2022 Credit Agreement and ranges from 0.150 % to 0.225 % ( 0.175 % at March 31, 2024).

The unused portion of the revolving loan amounted to $ 248,431 at March 31, 2024.

The applicable rate is based upon the Company’s consolidated net leverage ratio, as defined in the 2022 Credit Agreement, and the interest rate was 6.569 % at June 30, 2024.

The unused portion of the revolving loan amounted to $ 283,431 at June 30, 2024.

The Company is also required to pay, as applicable, letter of credit fees, administrative agent fees, and other fees to the arrangers and lenders.

Costs associated with the issuance of the revolving loans are capitalized and amortized on a straight-line basis over the term of the 2022 Credit Agreement, which is not materially different than the effective interest method.

Capitalized costs net of accumulated amortization were $ 959 and $ 1,030 at March 31, 2024 and December 31, 2023, respectively, and are included in "Other non-current assets" on the condensed consolidated balance sheets.

Amortization expense pertaining to these costs totaled $ 71 for both the three months ended March 31, 2024 and 2023, and are included in "Interest expense, net" in the accompanying condensed consolidated statements of earnings.

Capitalized costs net of accumulated amortization were $ 886 and $ 1,030 at June 30, 2024 and December 31, 2023, respectively, and are included in "Other non-current assets" on the condensed consolidated balance sheets.

Amortization expense pertaining to these costs totaled $ 73 and $ 144 for both the three and six months ended June 30, 2024 and 2023 and are included in "Interest expense, net" in the accompanying condensed consolidated statements of earnings.

The 2022 Credit Agreement contains quarterly covenants requiring the consolidated leverage ratio to be less than a certain maximum ratio and the consolidated interest coverage ratio to exceed a certain minimum ratio.

At March 31, 2024, the Company was in compliance with these covenants.

At June 30, 2024, the Company was in compliance with these covenants.

Indebtedness under the Company’s loan agreements is secured by assets of the Company.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net Earnings - Basic and Diluted $ 32,069 $ 30,110 $ 61,055 $ 52,820

5 unchanged sentences

Net Earnings Per Share - Diluted $ 0.98 $ 0.93 $ 1.87 $ 1.63

The number of anti-dilutive shares were 448,915 and 509,785 for the three months ended March 31, 2024 and 2023, respectively.

The number of anti-dilutive shares were 339,366 and 357,534 for the three and six months ended June 30, 2024, respectively, and 352,759 and 391,269 for the three and six months ended June 30, 2023, respectively.

Anti-dilutive shares could potentially dilute basic earnings per share in future periods and therefore, were not included in diluted earnings per share.

NOTE 9 – INCOME TAXES

The Company’s effective tax rate for the three months ended March 31, 2024 and 2023, was 21.3 % and 22.0 %, respectively.

The lower effective tax rate was primarily due to higher tax benefits from stock-based compensation and certain lower foreign taxes.

The Company’s effective tax rate for the three months ended June 30, 2024 and 2023, was 22.2 % and 21.6 %, respectively.

The higher effective tax rate for the quarter was primarily due to lower tax benefits from stock-based compensation and certain higher state taxes, partially offset by certain lower foreign taxes.

The effective tax rate was 21.8 % for each of the six months ended June 30, 2024 and 2023.

C ertain lower foreign taxes for the six months ended June 30, 2024 were offset by certain higher state taxes.

Income taxes are accounted for under the asset and liability method.

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The application of ASC 740-10 requires judgment related to the uncertainty in income taxes and could impact our effective tax rate.

The Company files income tax returns in the U.S.

The Company files income tax return s in the U.S.

and in various states and foreign countries.

As of March 31, 2024, in the major jurisdictions where the Company operates, it is generally no longer subject to income tax examinations by tax authorities for years before 2019.

The Company had approx imately $ 4,708 and $ 4,650 of unrecognized tax benefits, which are included in "Other long-term obligations" on the Company’s condensed consolidated balance sheets, as of March 31, 2024 and December 31, 2023, respectively.

The Company includes interest expense or income as well as potential penalties on unrecognized tax positions as a component of "Income tax expense" in the condensed consolidated statements of earnings.

Total accrued interest and penalties related to uncertain tax positions at March 31, 2024 and December 31, 2023 were approximately $ 1,472 and $ 1,413 , respectively, and are inclu ded in "Other long-term obligations" on the Company’s condensed consolidated balance sheets.

The European Union ("EU") member states formally adopted the EU's Pillar Two Directive, which was established by the Organization for Economic Co-operation and Development.

As of June 30, 2024, in the major jurisdictions where the Company operates, it is generally no longer subject to income tax examinations by tax authorities for years before 2019.

The Company had approximately $ 4,766 and $ 4,650 of unrecognized tax benefits, which are included in "Other long-term obligations" on the Company’s condensed consolidated balance sheets, as of June 30, 2024 and December 31, 2023, respectively.

The Company includes interest expense or income as well as potential penalties on uncertain tax positions as a component of "Income tax expense" in the condensed consolidated statements of earnings.

Total accrued interest and penalties related to uncertain tax positions at June 30, 2024 and December 31, 2023 were approximately $ 1,530 and $ 1,413 , respectively, and are included in "Other long-term obligations" on the Company’s condensed consolidated balance sheets.

The European Union ("EU") member states formally adopted the EU's Pillar Two Directive on December 15, 2022, which was established by the Organization for Economic Co-operation and Development.

Pillar Two generally provides for a 15 percent minimum effective tax rate for the jurisdictions where multinational enterprises operate.

5 unchanged sentences

The segment information is summarized as follows:

Business Segment Assets March 31,

Business Segment Assets June 30,

2024 December 31,

5 unchanged sentences

Total $ 1,574,966 $ 1,597,211

Business Segment Net Sales Three Months Ended March 31,

Business Segment Net Sales Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Human Nutrition and Health $ 147,928 $ 135,669 $ 300,672 $ 268,322

2 unchanged sentences

Other and Unallocated (2)

1,502 1,528 2,883 4,295

Total $ 234,081 $ 231,252 $ 473,740 $ 463,792

Business Segment Earnings Before Income Taxes Three Months Ended March 31,

Business Segment Earnings Before Income Taxes Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Human Nutrition and Health $ 33,367 $ 27,499 $ 66,624 $ 45,934

5 unchanged sentences

Total $ 41,226 $ 38,400 $ 78,076 $ 67,519

Depreciation/Amortization Three Months Ended March 31,

Depreciation/Amortization Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Human Nutrition and Health $ 8,386 $ 9,265 $ 17,926 $ 18,927

2 unchanged sentences

Other and Unallocated (2)

259 229 506 770

Total $ 12,506 $ 13,428 $ 26,174 $ 27,074

Capital Expenditures Three Months Ended March 31,

Capital Expenditures Six Months Ended June 30,

Human Nutrition and Health $ 7,697 $ 13,785

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Unallocated corporate expenses consist of:

(i) Transaction and integration costs of $ 440 and $ 565 fo r th e three months ended March 31, 2024 and 2023, respectively, and (ii) Unallocated amortization expense of $ 0 and $ 312 for the three months ended March 31, 2024 and 2023, respectively, related to an intangible asset in connection with a company-wide ERP system implementation.

(i) Transaction and integration costs of $ 132 and $ 572 for the three and six months ended June 30, 2024, respectively, and $ 651 and $ 1,216 for the three and six months ended June 30, 2023, respectively, and (ii) Unallocated amortization expense of $ 0 and $ 0 for the three and six months ended June 30, 2024, respectively, and $ 0 and $ 312 for the three and six months ended June 30, 2023, respectively, related to an intangible asset in connection with a company-wide ERP system implementation.

NOTE 11 – REVENUE

3 unchanged sentences

Sales and usage-based taxes are excluded from revenues.

Three Months Ended March 31,

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Product Sales Revenue $ 233,726 $ 230,473 $ 472,852 $ 462,233

2 unchanged sentences

The following table presents revenues disaggregated by geography, based on the shipping addresses of customers:

Three Months Ended March 31,

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

United States $ 177,692 $ 171,450 $ 359,778 $ 338,334

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NOTE 12 – SUPPLEMENTAL CASH FLOW INFORMATION

Cash paid during the three months ended March 31, 2024 and 2023 for income taxes and interest is as follows:

Three Months Ended March 31,

Cash paid during the six months ended June 30, 2024 and 2023 for income taxes and interest is as follows:

Six Months Ended June 30,

Income taxes $ 19,140 $ 20,471

2 unchanged sentences

The changes in accumulated other comprehensive (loss) income were as follows:

Three Months Ended March 31,

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net foreign currency translation adjustment $ ( 3,260 ) $ ( 1,116 ) $ ( 15,977 ) $ 8,308

1 unchanged sentence

Unrealized loss on cash flow hedge — ( 730 ) — ( 1,406 )

Tax — 176 — 341

Net of tax — ( 554 ) — ( 1,065 )

7 unchanged sentences

Total other comprehensive (loss) income $ ( 3,262 ) $ ( 1,668 ) $ ( 15,825 ) $ 7,345

Included in "Net foreign currency translation adjustment" was a loss of $ 1,021 related to a net investment hedge, which was net of tax benefit of $ 332 for the three months ended March 31, 2023.

Included in "Net foreign currency translation adjustment" were losses of $ 434 and $ 1,455 related to a net investment hedge, which were net of tax benefits of $ 782 and $ 1,114 for the three and six months ended June 30, 2023, respectively.

The Company settled its derivative instruments on their maturity date of June 27, 2023.

See Note 19, Derivative Instruments and Hedging Activities .

Accumulated other comprehensive (loss) income at March 31, 2024 and December 31, 2023 consisted of the following:

Accumulated other comprehensive (loss) income at June 30, 2024 and December 31, 2023 consisted of the following:

Foreign currency

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Other comprehensive (loss) income ( 15,977 ) — 152 ( 15,825 )

Balance March 31, 2024 $ ( 4,309 ) $ — $ 437 $ ( 3,872 )

Balance June 30, 2024 $ ( 7,569 ) $ — $ 435 $ ( 7,134 )

NOTE 14 – EMPLOYEE BENEFIT PLANS

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Net periodic benefit costs for such retirement medical plans were as follows:

Three Months Ended March 31,

Six Months Ended June 30,

Service cost $ 56 $ 54

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Net periodic benefit cost $ 79 $ 89

T he amounts recorded for these obligations on the Company’s condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023 are $ 1,298 and $ 1,395 , respectively, and are included in "Other long-term obligations" on the Company's condensed consolidated balance sheets.

T he amounts recorded for these obligations on the Company’s condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023 are $ 1,336 and $ 1,395 , respectively, and are included in "Other long-term obligations" on the Company's condensed consolidated balance sheets.

These plans are unfunded and approved claims are paid from Company funds.

3 unchanged sentences

The plan provides for the payment of a lump sum at retirement or payments in case of death of the covered employees.

The amounts recorded for these obligations on the Company's condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023 were $ 400 and $ 420 , respectively, and were included in "Other long-term obligations" on the Company's condensed consolidated balance sheets.

Net periodic benefit costs for such benefit pensions plans were as follows:

Three Months Ended March 31,

The amounts recorded for these obligations on the Company's condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023 were $ 393 and $ 420 , respectively, and were included in "Other long-term obligations" on the Company's condensed consolidated balance sheets.

Net periodic benefit costs for such benefit pension plans were as follows:

Six Months Ended June 30,

Service cost with interest to end of year $ 37 $ 32

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Assets of the plan are held in a rabbi trust, and are subject to additional risk of loss in the event of bankruptcy or insolvency of the Company.

The deferred compensation liability was $ 10,800 as of March 31, 2024, of which $ 10,782 was included in "Other long-term obligations" and $ 18 was included in "Accrued compensation and other benefits" on the Company's condensed consolidated balance sheets.

The deferred compensation liability was $ 10,965 as of June 30, 2024, of which $ 10,946 was included in "Other long-term obligations" and $ 19 was included in "Accrued compensation and other benefits" on the Company's condensed consolidated balance sheets.

The deferred compensation liability was $ 10,188 as of December 31, 2023 and was included in "Other long-term obligations" on the Company’s condensed consolidated balance sheets.

The related assets of the irrevocable trust funds (also known as "rabbi trust funds") were $ 10,789 and $ 10,188 as of March 31, 2024 and December 31, 2023, respectively, and were included in "Other non-current assets" on the Company's condensed consolidated balance sheets.

The related assets of the irrevocable trust funds (also known as "rabbi trust funds") were $ 10,962 and $ 10,188 as of June 30, 2024 and December 31, 2023, respectively, and were included in "Other non-current assets" on the Company's c ondensed consolidated balance sheets.

NOTE 15 – COMMITMENTS AND CONTINGENCIES

The Company is obligated to make rental payments under non-cancelable operating and finance leases.

Aggregate future minimum rental payments required under these leases at March 31, 2024 are disclosed in Note 18, Leases .

Aggregate future minimum rental payments required under these leases at June 30, 2024 are disclosed in Note 18, Leases .

The Company’s Verona, Missouri facility, while held by a prior owner, Syntex Agribusiness, Inc.

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The Company has a number of financial instruments, none of which are held for trading purposes.

The Company estimates that the fair value of all financial instruments at March 31, 2024 and December 31, 2023 does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying condensed consolidated balance sheets.

The Company estimates that the fair value of all financial instruments at June 30, 2024 and December 31, 2023 does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying condensed consolidated balance sheets.

The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies.

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The Company’s financial instruments also include cash equivalents, accounts receivable, accounts payable, and accrued liabilities, which are carried at cost and approximate fair value due to the short-term maturity of these instruments.

Cash and cash equivalents at March 31, 2024 and December 31, 2023 includes $ 4,428 and $ 959 in money market funds and other interest-bearing deposit accounts, respectively.

Non-current assets at March 31, 2024 and December 31, 2023 included $ 10,789 and $ 10,188 , respectively, of rabbi trust funds related to the Company's deferred compensation plan.

Cash and cash equivalents at June 30, 2024 and December 31, 2023 includes $ 5,472 and $ 959 in money market funds and other interest-bearing deposit accounts, respectively.

Non-current assets at June 30, 2024 and December 31, 2023 included $ 10,962 and $ 10,188 , respectively, of rabbi trust funds related to the Company's deferred compensation plan.

The money market and rabbi trust funds are valued using level one inputs, as defined by ASC 820, “Fair Value Measurement.”

The contingent consideration liabilities included on the balance sheet amount to $ 100 as of both March 31, 2024 and December 31, 2023 and were valued using level three inputs, as defined by ASC 820, "Fair Value Measurement".

The contingent consideration liabilities included on the balance sheet were $ 9 and $ 100 as of June 30, 2024 and December 31, 2023, respectively, and were valued using level three inputs, as defined by ASC 820, "Fair Value Measurement".

NOTE 17 – RELATED PARTY TRANSACTIONS

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Gabriel CC Company, LLC in this scenario lacks economic substance and therefore the Company does not include them in net sales within the condensed consolidated statements of earnings.

Payments for the services the Company provided amounted to $ 1,092 and $ 1,172 for the three months ended March 31, 2024 and 2023, respectively.

The raw materials purchased and subsequently sold amounted to $ 6,332 and $ 10,013 for the three months ended March 31, 2024 and 2023, respectively.

Payments for the services the Company provided amounted to $ 1,120 and $ 2,212 for the three and six months ended June 30, 2024, respectively, and $ 1,028 and $ 2,200 for the three and six months ended June 30, 2023, respectively.

The raw materials purchased and subsequently sold amounted to $ 7,301 and $ 13,633 for the three and six months ended June 30, 2024, respectively, and $ 9,782 and $ 19,795 for the three and six months ended June 30, 2023, respectively.

These services and raw materials are primarily recorded in cost of goods sold, net of the finished goods received from St.

Gabriel CC Company, LLC of $ 4,971 and $ 8,072 during the three months ended March 31, 2024 and 2023, respectively.

At March 31, 2024 and December 31, 2023, the Company had receivables of $ 7,424 and $ 8,314 , respectively, recorded in accounts receivable from St.

Gabriel CC Company, LLC of $ 5,713 and $ 10,684 during the three and six months ended June 30, 2024, respectively, and $ 8,223 and $ 16,295 for the three and six months ended June 30, 2023, respectively.

At June 30, 2024 and December 31, 2023, the Company had receivables of $ 2,959 and $ 8,314 , respectively, recorded in accounts receivable from St.

Gabriel CC Company, LLC for services rendered and raw materials sold.

At March 31, 2024 and December 31, 2023, the Company had payables of $ 5,013 and $ 6,050 , respectively, recorded in accounts payable for finished goods received from St.

At June 30, 2024 and December 31, 2023, the Company had payables of $ 2,096 and $ 6,050 , respectively, recorded in accounts payable for finished goods received from St.

Gabriel CC Company, LLC.

The Company had payables in the amount of $ 296 and $ 329 , respectively, related to non-contractual monies owed to St.

Gabriel CC Company, LLC, recorded in accounts payable as of March 31, 2024 and December 31, 2023.

Gabriel CC Company, LLC, recorded in accounts payable as of June 30, 2024 and December 31, 2023.

NOTE 18 – LEASES

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Based on this understanding, the Company elected to use a portfolio approach to discount rates, applying corporate rates to the tranches of leases based on lease terms.

Based on the Company's risk rating, the Company applied the following discount rates for new leases entered into during the first quarter of 2024:

Based on the Company's risk rating, the Company applied the following discount rates for new leases entered into during the second quarter of 2024:

(1) 1 - 2 years, 6.73 % (2) 3 - 4 years, 7.32 % (3) 5 - 9 years, 7.66 % and (4) 10 + years, 8.38 %.

Right of use assets and lease liabilities at March 31, 2024 and December 31, 2023 are summarized as follows:

Right of use assets March 31, 2024 December 31, 2023

Right of use assets and lease liabilities at June 30, 2024 and December 31, 2023 are summarized as follows:

Right of use assets June 30, 2024 December 31, 2023

Operating leases $ 16,469 $ 17,763

1 unchanged sentence

Total $ 18,445 $ 19,864

Lease liabilities - current March 31, 2024 December 31, 2023

Lease liabilities - current June 30, 2024 December 31, 2023

Operating leases $ 3,589 $ 3,949

1 unchanged sentence

Total $ 3,838 $ 4,221

Lease liabilities - non-current March 31, 2024 December 31, 2023

Lease liabilities - non-current June 30, 2024 December 31, 2023

Operating leases $ 13,666 $ 14,601

1 unchanged sentence

Total $ 15,513 $ 16,544

For the three months ended March 31, 2024 and 2023, the Company's total lease costs were as follows, which included amounts recognized in earnings, amounts capitalized on the balance sheets, and the cash flows arising from lease transactions:

Three Months Ended March 31,

For the three and six months ended June 30, 2024 and 2023, the Company's total lease costs were as follows, which included amounts recognized in earnings, amounts capitalized on the balance sheets, and the cash flows arising from lease transactions:

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Operating lease cost $ 1,351 $ 1,376 $ 2,692 $ 2,646

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Right-of-use assets obtained in exchange for new operating lease liabilities, net of right-of-use assets disposed $ 766 $ 2,148 $ 1,164 $ 2,605

Weighted-average remaining lease term - operating leases 9.25 years 5.42 years

Weighted-average remaining lease term - finance leases 8.86 years 9.73 years

Weighted-average remaining lease term - operating leases 9.17 years 5.41 years 9.17 years 5.41 years

Weighted-average remaining lease term - finance leases 8.65 years 9.51 years 8.65 years 9.51 years

Weighted-average discount rate - operating leases 7.5 % 4.1 % 7.5 % 4.1 %

Weighted-average discount rate - finance leases 5.0 % 5.0 % 5.0 % 5.0 %

Rent expense charged to operations under operating lease agreements for the three months ended March 31, 2024 and 2023 aggregated to approximately $ 1,341 and $ 1,270 , respectively.

Aggregate future minimum rental payments required under all non-cancelable operating and finance leases at March 31, 2024 are as follows:

April 1, 2024 to December 31, 2024 $ 4,033

Rent expense charged to operations under operating lease agreements for the three and six months ended June 30, 2024 aggregated to approximately $ 1,351 and $ 2,692 , respectively, and $ 1,376 and $ 2,646 for the three and six months ended June 30, 2023, respectively.

Aggregate future minimum rental payments required under all non-cancelable operating and finance leases at June 30, 2024 are as follows:

July 1, 2024 to December 31, 2024 $ 2,875

Thereafter 5,805

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On May 28, 2019, the Company entered into a pay-fixed ( 2.05 %), receive-floating interest rate swap with a notional amount of $ 108,569 and a maturity date of June 27, 2023, which was designated as cash flow hedge.

The net interest income related to the interest rate swap contract was $ 684 for the three months ended March 31, 2023.

There was no such income for the three months ended March 31, 2024 as the interest rate swap was settled on its maturity date of June 27, 2023.

The net interest income related to the interest rate swap contract was $ 834 and $ 1,518 for the three and six months ended June 30, 2023, respectively.

There was no such income for the three and six months ended June 30, 2024 as the interest rate swap was settled on its maturity date of June 27, 2023.

The net interest income was recorded in the condensed consolidated statements of earnings under "Interest expense, net."

1 unchanged sentence

The derivative had a notional amount of $ 108,569 , an effective date of May 28, 2019, and a maturity date of June 27, 2023.

The interest income related to the cross-currency swap contract was $ 550 for the three months ended March 31, 2023.

There was no such income for the three months ended March 31, 2024 as the cross-currency swap was settled on its maturity date of June 27, 2023.

The interest income related to the cross-currency swap contract was $ 569 and $ 1,119 for the three and six months ended June 30, 2023, respectively.

There was no such income for the three and six months ended June 30, 2024 as the cross-currency swap was settled on its maturity date of June 27, 2023.

The interest income was recorded in the condensed consolidated statements of earnings under "Interest expense, net."

The Company settled its derivative instruments on their maturity date of June 27, 2023 and had no other derivatives outstanding as of March 31, 2024.

The Company settled its derivative instruments on their maturity date of June 27, 2023 and had no other derivatives outstanding as of June 30, 2024.

The proceeds from the settlement of the cross-currency swap in the amount of $ 2,740 were classified as investing activities in the Consolidated Statements of Cash Flows in the second quarter of 2023.

Losses on our hedging instruments were recognized in accumulated other comprehensive income (loss) and categorized as follows for the three months ended March 31, 2023.

There were no such losses for the three months ended March 31, 2024:

Losses on our hedging instruments were recognized in accumulated other comprehensive income (loss) and categorized as follows for the three and six months ended June 30, 2023.

There were no such losses for the three and six months ended June 30, 2024:

Location within Statements of Comprehensive Income Three Months Ended

March 31, 2023

June 30, 2023 Six Months Ended

June 30, 2023

Cash flow hedge (interest rate swap), net of tax Unrealized (loss) on cash flow hedge, net $ ( 554 ) $ ( 1,065 )

2 unchanged sentences

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