What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-08 compared with 2021-08-09 · 95 added, 79 removed, 191 unchanged (48% of the section changed)

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The following trends and events during 2021 have had varying effects on our financial condition, results of operations, and cash flows.

Global Pandemic

On March 11, 2020, the World Health Organization (WHO) declared the outbreak of the novel coronavirus (COVID-19) a pandemic.

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dollar weakens against foreign currencies, our revenues and earnings are positively impacted.

Approximately 49% of our consolidated revenues during the quarter ended July 4, 2021 were to customers outside of the U.S.

Approximately 45% of our consolidated revenues during the quarter ended October 3, 2021 were to customers outside of the U.S.

In addition to the translation impact described above, currency rate fluctuations have an economic impact on our financial results.

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Amended Revolving Credit Agreement

On June 2, 2021, we entered into an amended and restated Revolving Credit Agreement that provides a $300.0 million multi-currency asset-based revolving credit facility (the Revolver).

During the second quarter of 2021, we entered into an amended and restated Revolving Credit Agreement that provides a $300.0 million multi-currency asset-based revolving credit facility (the Revolver).

The maturity date of the Revolver is June 2, 2026.

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Interest on outstanding borrowings is variable, based upon LIBOR or other similar indices in foreign jurisdictions, plus a spread that ranges from 1.25%-1.75%, depending upon our leverage position.

We paid approximately $1.7 million of fees associated with the amended Revolver, which will be amortized over its term using the effective interest method.

As of July 4, 2021, we had no borrowings outstanding on the Revolver, and our available borrowing capacity was $294.1 million.

OTN acquisition

We acquired 100% of the shares of OTN on January 29, 2021 for a purchase price, net of cash acquired, of $73.3 million.

OTN, based in Olen, Belgium, is a leading provider of easy to use and highly-reliable network solutions tailored for specific ap plications in harsh, mission-critical environments.

The acquisition of OTN supports one of our key strategic priorities related to the growing demand for industrial automation by adding proprietary technology and mission-critical hardware and software products for more complete end-to-end solutions.

The results of OTN have been included in our Condensed Consolidated Financial Statements from January 29, 2021, and are reported within the Industrial Solutions segment.

We paid approximately $2.2 million of fees associated with the amended Revolver, which are being amortized over its term using the effective interest method.

As of October 3, 2021, we had no borrowings outstanding on the Revolver, and our available borrowing capacity was $293.9 million.

Debt Refinancing

During the three and nine months ended October 3, 2021, we completed an offering for €300.0 million aggregate principal amount of 3.375% senior subordinated notes due 2031.

With the proceeds from this offering and cash on hand, we repurchased all of the €300.0 million aggregate principal amount of 2.875% senior subordinated notes previously due 2025.

We recognized a $5.7 million loss on debt extinguishment for the premiums paid to the bond holders to retire the 2025 Notes and for the unamortized debt issuance costs on the 2025 Notes that we were required to write-off.

OTN Systems Acquisition

We acquired 100% of the shares of OTN Systems on January 29, 2021 for a purchase price, net of cash acquired, of $73.3 million.

OTN Systems , based in Olen, Belgium, is a leading provider of easy to use and highly-reliable network solutions tailored for specific applications in harsh, mission-critical environments.

The acquisition of OTN Systems supports one of our key strategic priorities related to the growing demand for industrial automation by adding proprietary technology and mission-critical hardware and software products for more complete end-to-end solutions.

The results of OTN Systems have been included in our Condensed Consolidated Financial Statements from January 29, 2021, and are reported within the Industrial Solutions segment.

Sale-Leaseback

During the three and nine months ended October 3, 2021, we entered into an agreement to sell and lease back certain property in Germany.

The closing of the sale and the commencement of the lease is expected to occur during the fourth quarter of 2021.

During the third quarter of 2021, we performed a recoverability test on the assets and determined that the carrying values of the assets were not recoverable and recognized a $2.3 million impairment charge in Selling, General and Administrative Expenses to write them down to fair value.

The impairment charge was excluded from Segment EBITDA of our Industrial Solutions segment.

We completed the sale of our oil and gas cable business in Brazil during the second quarter of 2021 for $10.9 million, net of cash delivered with the business.

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Long-Lived Asset Impairment

During the six months ended July 4, 2021, we also performed a recoverability test on certain held and used long-lived assets in our Industrial Solutions segment due to the presence of impairment indicators stemming from the increased probability of selling the assets.

During the nine months ended October 3, 2021, we performed a recoverability test on certain held and used long-lived assets in our Industrial Solutions segment.

We determined that the carrying values of the assets were not recoverable and recognized a $3.6 million impairment charge in Selling, General and Administrative Expenses to write them down to fair value.

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Our acquisition of Opterna in 2019 included potential earn-out consideration, which as of the acquisition date, had an estimated fair value of $5.8 million.

As the financial targets tied to the earn-out were not achieved within the contractual timeframe, we reduced the earn-out liability to zero and recognized a $5.8 million benefit in Selling, General and Administrative Expenses in the six months ended July 4, 2021.

This benefit was excluded from Segment EBITDA of our Enterprise Solutions segment.

Cost Reduction Program

During the fourth quarter of 2019, we began a cost reduction program to improve performance and enhance margins by streamlining the organizational structure and investing in technology to drive productivity.

We recognized $1.2 million and $3.5 million of severance and other restructuring costs for this program during the three and six months ended July 4, 2021.

The cost reduction program is expected to deliver an estimated $60.0 million reduction in selling, general, and administrative expenses on an annual basis.

We expect to incur incremental costs of approximately $5 million for this program.

We have executed a cost reduction program to streamline the organizational structure and invest in technology to drive productivity.

We recognized $0.0 million and $3.5 million of severance and other restructuring costs for this program during the three and nine months ended October 3, 2021, respectively.

The cost reduction program is substantially complete and has delivered a reduction in selling, general, and administrative expenses of approximately $60 million on an annual basis.

We expect to recognize costs of approximately $5 million for this program during the fourth quarter of 2021.

Acquisition Integration Program

We are integrating our recent acquisitions such as OTN, SPC, and Opterna with our existing businesses.

The restructuring and integration activities were focused on achieving desired cost savings by consolidating existing and acquired facilities and other support functions.

We recognized $0.6 million and $2.4 million of severance and other restructuring costs for this program during the three and six months ended July 4, 2021, respectively.

We expect to incur incremental costs of approximately $2.0 million for this program in 2021.

We are integrating our recent acquisitions such as OTN Systems , SPC, and Opterna with our existing businesses.

The restructuring and integration activities are focused on achieving desired cost savings by consolidating existing and acquired facilities and other support functions.

We recognized $0.8 million and $3.2 million of severance and other restructuring costs for this program during the three and nine months ended October 3, 2021, respectively.

We do not expect to incur significant incremental costs for this program in 2021.

Off-Balance Sheet Arrangements

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Critical Accounting Policies

During the six months ended July 4, 2021:

During the nine months ended October 3, 2021:

• We did not change any of our existing critical accounting policies from those listed in our 2020 Annual Report on Form 10-K;

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Consolidated Income before Taxes

Three Months Ended % Change Six Months Ended % Change

July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020

Three Months Ended % Change Nine Months Ended % Change

October 3, 2021 September 27, 2020 October 3, 2021 September 27, 2020

(In thousands, except percentages)

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Interest expense, net (16,251) (15,607) 4.1 % (46,640) (43,188) 8.0 %

Loss on debt extinguishment (5,715) — n/a (5,715) — n/a

Non-operating pension benefit 992 680 45.9 % 3,121 2,079 50.1 %

Income from continuing operations before taxes 50,192 21,200 136.8 % 139,337 41,856 232.9 %

Revenues increased $177.2 million and $250.0 million in the three and six months ended July 4, 2021, respectively, from the comparable period of 2020 due to the following factors:

Revenues increased $155.0 million and $405.0 million in the three and nine months ended October 3, 2021, respectively, from the comparable periods of 2020 due to the following factors:

• Higher sales volume from industrial automation, smart buildings, and broadband & 5G products resulted in a $115.7 million and $270.1 million increase in revenues, respectively.

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• Acquisitions contributed an estimated $8.2 million and $21.2 million in revenues, respectively.

• Divestitures had a $1.1 million unfavorable impact on revenues in both the three and six months ended July 4, 2021 as compared to the year ago period.

Gross profit increased $61.6 million and $82.4 million in the three and six months ended July 4, 2021, respectively, from the comparable period of 2020 due to the increases in revenues discussed above.

Selling, general and administrative expenses increased $13.9 million in both the three and six months ended July 4, 2021, respectively, from the comparable period of 2020.

The increase in selling, general and administrative expenses is primarily attributable to the increase in incentive compensation, acquisitions, and the impact of currency translation, partially offset by a decline in s everance, restructuring and acquisition integration costs and divestitures.

Research and development expenses increased $5.8 million and $11.1 million in the three and six months ended July 4, 2021, respectively, from the comparable period of 2020 primarily due to increased investments in R&D projects as we continue our commitment to growth initiatives.

Amortization of intangibles decreased $6.9 million and $13.2 million in the three and six months ended July 4, 2021, respectively, from the comparable period of 2020 primarily due to certain intangible assets becoming fully amortized.

Operating income increased $48.8 million and $70.6 million in the three and six months ended July 4, 2021, respectively, from the comparable period of 2020 primarily as a result of the increase in gross profit discussed above.

Net interest expense increased $0.6 million and $2.8 million in the three and six months ended July 4, 2021, respectively, from the comparable period of 2020 primarily due to currency translation.

Income from continuing operations before taxes increased $49.0 million and $68.5 million in the three and six months ended July 4, 2021, respectively, from the comparable period of 2020 primarily due to the increase in operating income discussed above.

Three Months Ended % Six Months Ended %

July 4, 2021 June 28, 2020 Change July 4, 2021 June 28, 2020 Change

• Divestitures had a $3.9 million and $5.0 million unfavorable impact on revenues, respectively.

Gross profit increased $55.7 million and $138.1 million in the three and nine months ended October 3, 2021, respectively, from the comparable periods of 2020 due to the increases in revenues discussed above.

Selling, general and administrative expenses increased $24.9 million and $38.8 million in the three and nine months ended October 3, 2021, respectively, from the comparable periods of 2020.

The increase in selling, general and administrative expenses is primarily attributable to strategic investments to enhance our solution selling capabilities as well as increases from incentive compensation, acquisitions, and the impact of currency translation.

Research and development expenses increased $2.1 million and $13.2 million in the three and nine months ended October 3, 2021, respectively, from the comparable periods of 2020 primarily due to increased investments in R&D projects as we continue our commitment to growth initiatives.

Amortization of intangibles decreased $6.4 million and $19.6 million in the three and nine months ended October 3, 2021, respectively, from the comparable periods of 2020 primarily due to certain intangible assets becoming fully amortized.

Operating income increased $35.0 million and $105.6 million in the three and nine months ended October 3, 2021, respectively, from the comparable periods of 2020 primarily as a result of the increase in gross profit discussed above.

Net interest expense increased $0.6 million and $3.5 million in the three and nine months ended October 3, 2021, respectively, from the comparable periods of 2020 primarily due to currency translation.

Loss on debt extinguishment increased $5.7 million in both the three and nine months ended October 3, 2021 from the comparable periods of 2020 due to the debt refinancing that took place during the third quarter of 2021.

The $5.7 million loss on debt extinguishment represents the premium paid to the bond holders to retire the 2025 Notes and for the unamortized debt issuance costs on the 2025 Notes that we were required to write-off.

Income from continuing operations before taxes increased $29.0 million and $97.5 million in the three and nine months ended October 3, 2021, respectively, from the comparable periods of 2020 primarily due to the increase in operating income discussed above.

Three Months Ended Nine Months Ended

October 3, 2021 September 27, 2020 % Change October 3, 2021 September 27, 2020 % Change

(In thousands, except percentages)

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Effective tax rate 17.7 % 3.0 % 18.2 % 7.7 %

For the three and six months ended July 4, 2021, we recognized income tax expense of $8.6 million and $16.4 million, representing an effective tax rate of 16.3% and 18.4%, respectively.

The effective tax rate was primarily impacted by the effect of our foreign operations, including statutory tax rates differences and foreign tax credits.

For the three and six months ended June 28, 2020, we recognized income tax expense of $0.4 million and $2.6 million, representing an effective tax rate of 11.2% and 12.5%, respectively.

The effective tax rates were impacted by income tax benefits for certain foreign tax credits of $0.1 million and $1.2 million in the three and six months ended June 28, 2020, respectively.

For the three and nine months ended October 3, 2021, we recognized income tax expense of $8.9 million and $25.3 million, representing an effective tax rate of 17.7% and 18.2%, respectively.

The effective tax rates were primarily impacted by the effect of our foreign operations, including statutory tax rates differences and foreign tax credits.

For the three and nine months ended September 27, 2020, we recognized income tax expense of $0.6 million and $3.2 million, respectively, representing an effective tax rate of 3.0% and 7.7%, respectively.

The effective tax rates were impacted by income tax benefits for certain foreign tax credits of $0.9 million and $2.1 million in the three and nine months ended September 27, 2020, respectively.

Consolidated Adjusted Revenues and Adjusted EBITDA

Three Months Ended % Six Months Ended %

July 4, 2021 June 28, 2020 Change July 4, 2021 June 28, 2020 Change

Three Months Ended Nine Months Ended

October 3, 2021 September 27, 2020 % Change October 3, 2021 September 27, 2020 % Change

(In thousands, except percentages)

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as a percent of adjusted revenues 16.0 % 13.7 % 15.5 % 12.8 %

Adjusted Revenues increased $178.0 million and $250.9 million in the three and six months ended July 4, 2021, respectively, from the comparable period of 2020 due to the following factors:

Adjusted Revenues increased $155.5 million and $406.4 million in the three and nine months ended October 3, 2021, respectively, from the comparable periods of 2020 due to the following factors:

• Higher sales volume from industrial automation, smart buildings, and broadband & 5G products resulted in a $115.7 million and $270.1 million increase in revenues, respectively.

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• Acquisitions contributed an estimated $8.7 million and $22.6 million in revenues, respectively.

• Divestitures had a $1.1 million unfavorable impact on revenues in both the three and six months ended July 4, 2021 as compared to the year ago period.

Adjusted EBITDA increased $44.3 million and $63.6 million in the three and six months ended July 4, 2021, respectively, from the comparable period of 2020 primarily due to leverage on higher sales volume, as discussed above.

Accordingly, Adjusted EBITDA margins in the three and six months ended July 4, 2021 expanded to 15.5% from 11.6% and 15.2% from 12.4%, respectively, in the comparable period of 2020.

• Divestitures had a $3.9 million and $5.0 million unfavorable impact on revenues, respectively.

Adjusted EBITDA increased $35.5 million and $99.0 million in the three and nine months ended October 3, 2021, respectively, from the comparable periods of 2020 primarily due to leverage on higher sales volume, as discussed above.

Accordingly, Adjusted EBITDA margins in the three and nine months ended October 3, 2021 expanded to 16.0% and 15.5% from 13.7% and 12.8% in the comparable periods of 2020, respectively.

Use of Non-GAAP Financial Information

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The following tables reconcile our GAAP results to our non-GAAP financial measures:

Three Months Ended Six Months Ended

July 4, 2021 June 28, 2020 July 4, 2021 June 28, 2020

Three Months Ended Nine Months Ended

October 3, 2021 September 27, 2020 October 3, 2021 September 27, 2020

(In thousands, except percentages)

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Depreciation expense 11,270 10,455 34,197 31,069

Income tax expense 8,552 400 16,432 2,592

Amortization of intangible assets 9,696 16,104 28,745 48,306

Income tax expense 8,875 631 25,307 3,223

Severance, restructuring, and acquisition integration costs (1) 4,328 1,357 12,539 9,448

Loss on debt extinguishment 5,715 — 5,715 —

Adjustments related to acquisitions and divestitures (2) 2,464 — 4,997 125

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(1) See Note 12, Severance, Restructuring, and Acquisition Integration Activities, for details.

(2) During the three months ended July 4, 2021, we collected $0.1 million of receivables associated with the sale of Grass Valley that were previously written off, recognized deferred revenues of $0.8 million for the purchase accounting effect of recording deferred revenue at fair value for the OTN acquisition, and recognized cost of sales of $1.2 million related to purchase accounting ad justments of acquired inventory to fair value for the OTN acquisition.

During the six months ended July 4, 2021, we reduced the Opterna earn-out liability by $5.8 million, recognized a $3.6 million impairment on assets held and used, recognized a $3.4 million impairment on assets held for sale, collected $1.5 million of receivables associated with the sale of Grass Valley that were previously written off, recognized cost of sales of $2.0 million related to purchase accounting adjustments of acquired inventory to fair value for the OTN acquisition, and recognized deferred revenues of $0.8 million for the purchase accounting effect of recording deferred revenue at fair value for the OTN acquisition.

During the three and six months ended June 28, 2020, we recognized cost of sales related to purchase accounting adjustments of acquired inventory to fair value for the SPC acquisition.

(2) During the three months ended October 3, 2021, we recognized a $2.3 million impairment on assets held for sale, collected $0.7 million of receivables associated with the sale of Grass Valley and acquisition of SPC that were previously written off, included $0.5 million in Segment EBITDA for the purchase accounting effect of recording deferred revenue at fair value for the OTN Systems acquisition, and recognized cost of sales of $0.4 million related to purchase accounting ad justments of acquired inventory to fair value for the OTN Systems acquisition.

During the nine months ended October 3, 2021, we reduced the Opterna earn-out liability by $5.8 million, recognized a $5.7 million impairment on assets held for sale, recognized a $3.6 million impairment on assets held and used, recognized cost of sales of $2.4 million related to purchase accounting adjustments of acquired inventory to fair value for the OTN Systems acquisition, collected $2.2 million of receivables associated with the sale of Grass Valley and acquisition of SPC that were previously written off, and included $1.3 million in Segment EBITDA for the purchase accounting effect of recording deferred revenue at fair value for the OTN Systems acquisition.

During the nine months ended September 27, 2020, we recognized cost of sales related to purchase accounting adjustments of acquired inventory to fair value for the SPC acquisition.

Segment Results of Operations

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Enterprise Solutions

Three Months Ended % Six Months Ended %

July 4, 2021 June 28, 2020 Change July 4, 2021 June 28, 2020 Change

Three Months Ended Nine Months Ended

October 3, 2021 September 27, 2020 % Change October 3, 2021 September 27, 2020 % Change

(In thousands, except percentages)

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as a percent of segment revenues 14.0 % 11.5 % 13.3 % 11.4 %

Enterprise Solutions revenues increased $64.2 million and $78.3 million in the three and six months ended July 4, 2021, respectively, from the comparable period of 2020.

As compared to the year ago period, for the three months ended July 4, 2021, increases in volume, higher copper prices, and favorable currency translation contributed $47.3 million, $13.5 million, and $3.4 million, respectively.

As compared to the year ago period, for the six months ended July 4, 2021, increases in volume, higher copper prices, and favorable currency translation contributed $48.9 million, $23.5 million, and $5.9 million, respectively.

Enterprise Solutions EBITDA increased $13.0 million and $16.4 million in the three and six months ended July 4, 2021, respectively, compared to the year ago period primarily as a result of the increase in revenues discussed above.

Enterprise Solutions revenues increased $57.1 million and $135.4 million in the three and nine months ended October 3, 2021, respectively, from the comparable periods of 2020.

As compared to the year ago period, for the three months ended October 3, 2021, increases in volume, higher copper prices, and favorable currency translation contributed $41.6 million, $13.9 million, and $1.6 million, respectively.

As compared to the year ago period, for the nine months ended October 3, 2021, increases in volume, higher copper prices, and favorable currency translation contributed $90.5 million, $37.4 million, and $7.5 million, respectively.

Enterprise Solutions EBITDA increased $13.9 million and $30.3 million in the three and nine months ended October 3, 2021, respectively, compared to the year ago periods primarily as a result of the increase in revenues discussed above.

Industrial Solutions

Three Months Ended % Six Months Ended %

July 4, 2021 June 28, 2020 Change July 4, 2021 June 28, 2020 Change

Three Months Ended Nine Months Ended

October 3, 2021 September 27, 2020 % Change October 3, 2021 September 27, 2020 % Change

(In thousands, except percentages)

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as a percent of segment revenues 17.3 % 15.6 % 16.9 % 13.9 %

Industrial Solutions revenues increased $113.9 million and $172.6 million in the three and six months ended July 4, 2021 from the comparable period of 2020.

The increase in revenues in the three months ended July 4, 2021 was primarily due to increases in volume, higher copper prices, favorable currency translation, and acquisitions, net of disposals of $71.3 million, $23.5 million, $10.4 million, and $8.7 million, respectively.

The increase in revenues in the six months ended July 4, 2021 was primarily due to increases in volume;

Industrial Solutions revenues increased $98.4 million and $270.9 million in the three and nine months ended October 3, 2021 from the comparable periods of 2020.

The increase in revenues in the three months ended October 3, 2021 was primarily due to increases in volume;

higher copper prices;

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and acquisitions, net of disposals of $74.6 million, $16.5 million, $3.0 million, and $4.3 million, respectively.

Industrial Solutions EBITDA increased $30.3 million and $46.1 million in the three and six months ended July 4, 2021 from the comparable period of 2020 primarily as a result of the increase in revenues discussed above, partially offset by an increase in incentive compensation and increased investments in R&D projects as we continue our commitment to growth initiatives.

The increase in revenues in the nine months ended October 3, 2021 was primarily due to increases in volume;

higher copper prices;

favorable currency translation;

and acquisitions, net of disposals of $180.0 million, $53.8 million, $20.0 million, and $17.1 million, respectively.

Industrial Solutions EBITDA increased $21.2 million and $67.3 million in the three and nine months ended October 3, 2021 from the comparable periods of 2020 primarily as a result of the increase in revenues discussed above, partially offset by an increase in incentive compensation and increased investments in R&D projects as we continue our commitment to growth initiatives.

Liquidity and Capital Resources

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economic conditions worldwide, customer demand, competitive market forces, customer acceptance of our product mix, and commodities pricing.

The following table is derived from our Condensed Consolidated Cash Flow Statements and includes the results and cash flow activity of Grass Valley for the period ended June 28, 2020 consistent with the Condensed Consolidated Cash Flow Statements:

Six Months Ended

July 4, 2021 June 28, 2020

The following table is derived from our Condensed Consolidated Cash Flow Statements, and for the period ended September 27, 2020, includes the results of discontinued operations up to the July 2, 2020 disposal date of Grass Valley:

Nine Months Ended

October 3, 2021 September 27, 2020

(In thousands)

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Cash and cash equivalents, end of period $ 457,753 $ 391,497

Operating cash flows were a source of cash of $26.7 million in the six months ended July 4, 2021 as compared to a use of cash of $12.1 million in the six months ended June 28, 2020.

Operating cash flows were a source of cash of $101.9 million in the nine months ended October 3, 2021 compared to $38.7 million in the nine months ended September 27, 2020.

Operating cash flow improved $63.2 million compared to the prior year primarily due to an increase in earnings.

In 2021, changes in operating assets and liabilities included an unfavorable change in receivables offset by a favorable change in accounts payable.

For the six months ended July 4, 2021, receivables were a use of cash of $90.8 million compared to a source of cash of $52.6 million in the year ago period.

In 2021, changes in operating assets and liabilities included an unfavorable change in receivables partially offset by a favorable change in accounts payable.

For the nine months ended October 3, 2021, receivables were a use of cash of $129.0 million compared to a source of cash of $35.6 million in the year ago period.

The increase in receivables was primarily due to the increase in revenues discussed above.

In the three months ended July 4, 2021, days sales outstanding improved to 53 days compared to 60 days for the three months ended June 28, 2020.

Accounts payable was a source of cash of $50.2 million in the six months ended July 4, 2021 compared to a use of cash of $86.4 million in the year ago period.

Net cash used for investing activities totaled $94.2 million in the six months ended July 4, 2021, compared to $38.1 million in the prior year.

Investing activities for the six months ended July 4, 2021 included capital expenditures of $30.9 million compared to $41.7 million in the comparable period of 2020.

The six months ended July 4, 2021 also included payments of $73.7 million primarily for the acquisition of OTN, partially offset by cash receipts of $10.8 million primarily for the sale of our oil and gas cable business in Brazil.

Net cash from financing activities was a use of cash of $10.1 million for the six months ended July 4, 2021, compared to a source of cash of $20.0 million in the prior year.

Financing activities for the six months ended July 4, 2021 included cash dividend payments of $4.5 million, net payments related to share based compensation activities of $2.0 million, repayments of debt obligations of $1.8 million assumed as part of the OTN acquisition, and debt issuance costs of $1.7 million for our Revolver refinancing.

Financing activities for the six months ended June 28, 2020 included borrowing on our Revolver of $190.0 million, payments under borrowing arrangements of $100.0 million, payments under our share repurchase program of $35.0 million, a payment of earn-out consideration of which $29.3 million is classified as a financing activity, cash dividend payments of $4.6 million, and net payments related to share based compensation activities of $1.1 million.

Our cash and cash equivalents balance was $423.3 million as of July 4, 2021.

Accounts payable was a source of cash of $73.7 million in the nine months ended October 3, 2021 compared to a use of cash of $69.6 million in the year ago period.

Net cash used for investing activities totaled $118.9 million in the nine months ended October 3, 2021, compared to $3.1 million in the prior year.

Investing activities for the nine months ended October 3, 2021 included capital expenditures of $55.6 million compared to $56.8 million in the comparable period of 2020.

The nine months ended October 3, 2021 also included payments of $73.7 million primarily for the acquisition of OTN Systems , partially offset by cash receipts of $10.8 million primarily for the sale of our oil and gas cable business in Brazil.

The nine months ended September 27, 2020 also included proceeds of $50.1 million, $3.1 million, and $0.6 million from the sale of the Grass Valley disposal group, the sale of tangible property, and a working capital adjustment related to the SPC acquisition.

Net cash from financing activities was a use of cash of $24.0 million for the nine months ended October 3, 2021, compared to $72.6 million in the prior year.

Financing activities for the nine months ended October 3, 2021 included repayments of debt obligations of $360.3 million, debt issuance costs of $7.8 million, cash dividend payments of $6.7 million, financing lease payments of $3.1 million, net payments related to share based compensation activities of $2.1 million, and borrowings under credit arrangements of $356.0 million.

During the nine months ended October 3, 2021, we completed an offering for €300.0 million aggregate principal amount of 3.375% senior subordinated notes due 2031, repurchased the €300.0 million 2025 Notes, and refinanced the Revolver - see Note 13.

Financing activities for the nine months ended September 27, 2020 included borrowings on our revolver of $190.0 million, repayments of our revolver borrowings of $190.0 million, payments under our share repurchase program of $35.0 million, earnout consideration payments of $29.3 million, cash dividend payments of $6.8 million, and net payments related to share based compensation activities of $1.3 million.

Our cash and cash equivalents balance was $457.8 million as of October 3, 2021.

Of this amount, $188.1 million was held outside of the U.S.

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Upon distribution of those earnings in the form of dividends or otherwise, we may be subject to withholding taxes payable to the respective foreign countries.

Our outstanding debt obligations as of July 4, 2021 consisted of $1,542.7 million of senior subordinated notes.

Our outstanding debt obligations as of October 3, 2021 consisted of $1,510.1 million of senior subordinated notes.

Additional discussion regarding our various borrowing arrangements is included in Note 13 to the Condensed Consolidated Financial Statements.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis