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Item 2. Management’s Discussion and Analysis

2022-08-04 compared with 2022-05-05 · 95 added, 62 removed, 129 unchanged (55% of the section changed)

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Critical Accounting Policies and Estimates

Our critical accounting policies involving the more significant estimates and judgments used in the preparation of our financial statements as of April 2, 2022 remain unchanged from January 1, 2022, except for the accounting policies related to business combinations as described below.

Our critical accounting policies involving the more significant estimates and judgments used in the preparation of our financial statements as of July 2, 2022 remain unchanged from January 1, 2022, except for the accounting policies related to business combinations as described below.

Please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended January 1, 2022, filed with the SEC on March 3, 2022 (the "2021 Form 10-K") for details on these critical accounting policies.

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Recent Accounting Standards

Please refer to the sections captioned “Recent Accounting Standards” included in Note 1, “Summary of Significant Accounting Policies” in Part I, Item I, “Financial Statements” of this report.

Results of Operations—For the Fiscal Quarter Ended April 2, 2022, Compared to the Fiscal Quarter Ended April 3, 2021

Results of Operations—For the Fiscal Quarter and Fiscal Year-to-Date Period Ended July 2, 2022, Compared to the Fiscal Quarter and Fiscal Year-to-Date Period Ended July 3, 2021

The following table provides operating information as a percentage of revenues for the periods indicated:

Fiscal Quarter

2022 April 3,

Ended Fiscal Year-to-Date

Revenues 100.0 % 100.0 % 100.0 % 100.0 %

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Net income 7.8 % 7.8 % 7.8 % 7.5 %

Fiscal Quarter Ended April 2, 2022, Compared to the Fiscal Quarter Ended April 3, 2021

Revenues increased by $1.9 million, or 1.3%, to $148.4 million for the first quarter of fiscal 2022 from $146.5 million for the first quarter of fiscal 2021.

Utilization decreased to 74% for the first quarter of fiscal 2022 from 76% for the first quarter of fiscal 2021, while consultant headcount grew 4.9% from 837 at the end of the first quarter of fiscal 2021 to 878 at the end of the first quarter of fiscal 2022.

Fiscal Quarter Ended July 2, 2022, Compared to the Fiscal Quarter Ended July 3, 2021

Revenues increased by $0.9 million, or 0.6%, to $149.1 million for the second quarter of fiscal 2022 from $148.2 million for the second quarter of fiscal 2021.

Utilization increased to 77% for the second quarter of fiscal 2022 from 75% for the second quarter of fiscal 2021, while consultant headcount grew 3.6% from 833 at the end of the second quarter of fiscal 2021 to 863 at the end of the second quarter of fiscal 2022.

The primary driver of consultant headcount growth was the addition of 37 consultants resulting from the acquisition of Welch Consulting, Ltd.

(“Welch Consulting”).

(“Welch Consulting”) in the first quarter of fiscal 2022.

Overall, revenues outside of the U.S.

represented approximately 21% and 20% of net revenues for the first quarters of fiscal 2022 and fiscal 2021, respectively.

Revenues derived from fixed-price projects decreased to 19% of net revenues for the first quarter of fiscal 2022 compared with 23% of net revenue for the first quarter of fiscal 2021.

represented approximately 19% of net revenues for each of the second quarters of fiscal 2022 and fiscal 2021.

Revenues derived from fixed-price projects decreased to 18% of net revenues for the second quarter of fiscal 2022 compared with 24% of net revenue for the second quarter of fiscal 2021.

The percentage of revenue derived from fixed-price projects depends largely on the proportion of our revenues derived from our management consulting business, which typically has a higher concentration of fixed-price service contracts.

Costs of Services (exclusive of depreciation and amortization).

Costs of services (exclusive of depreciation and amortization) decreased by $1.3 million, or 1.2%, to $104.1 million for the first quarter of fiscal 2022 from $105.4 million for the first quarter of fiscal 2021.

The decrease in costs of services was due primarily to a decrease in employee compensation and fringe benefit costs of $0.5 million, a decrease in the valuation expense of the contingent consideration of $0.4 million, a decrease in client reimbursable expenses of $0.3 million,and a decrease in forgivable loan amortization of $0.1 million.

As a percentage of revenues, costs of services (exclusive of depreciation and amortization) decreased to 70.1% for the first quarter of fiscal 2022 from 71.9% for the first quarter of fiscal 2021.

Costs of services (exclusive of depreciation and amortization) decreased by $1.9 million, or 1.9%, to $103.1 million for the second quarter of fiscal 2022 from $105.0 million for the second quarter of fiscal 2021.

The decrease in costs of services was due to a decrease in employee compensation and fringe benefit costs of $2.3 million primarily as a result of a lower bonus accrual, a decrease in client reimbursable expenses of $0.8 million, partially offset by an increase in forgivable loan amortization of $1.2 million.

As a percentage of revenues, costs of services (exclusive of depreciation and amortization) decreased to 69.1% for the second quarter of fiscal 2022 from 70.9% for the second quarter of fiscal 2021.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased by $2.6 million, or 11.3%, to $25.8 million for the first quarter of fiscal 2022 from $23.2 million for the first quarter of fiscal 2021.

Within this category of expenses, there was a $0.7 million increase in commissions to our non-employee experts, a $1.0 million increase in employee compensation and fringe benefit costs, a $0.4 million increase in travel and entertainment, and a $0.6 million increase in miscellaneous and other costs.

Partially offsetting the increase in these expenses was a $0.1 million decrease in bad debt expense for the first quarter of fiscal 2022 as compared to the first quarter of fiscal 2021.

As a percentage of revenues, selling, general and administrative expenses increased to 17.4% for the first quarter of fiscal 2022 from 15.8% for the first quarter of fiscal 2021.

Commissions to our non-employee experts increased to 3.0% of revenues for the first quarter of fiscal 2022 compared to 2.6% of revenues for the first quarter of fiscal 2021.

Selling, general and administrative expenses increased by $4.0 million, or 16.3%, to $28.0 million for the second quarter of fiscal 2022 from $24.0 million for the second quarter of fiscal 2021.

Within this category of expenses, there was a $0.4 million increase in commissions to our non-employee experts, a $0.6 million increase in employee compensation and fringe benefit costs, a $1.0 million increase in travel and entertainment, a $0.6 million increase in rent expense, a $0.6 million increase in legal and other professional services fees, and a $0.9 million increase in miscellaneous and other costs.

Partially offsetting the increase in these expenses was a $0.1 million decrease in bad debt expense for the second quarter of fiscal 2022 as compared to the second quarter of fiscal 2021.

As a percentage of revenues, selling, general and administrative expenses increased to 18.8% for the second quarter of fiscal 2022 from 16.2% for the second quarter of fiscal 2021.

Commissions to our non-employee experts increased to 3.5% of revenues for the second quarter of fiscal 2022 compared to 3.2% of revenues for the second quarter of fiscal 2021.

Provision for Income Taxes.

The income tax provision was $4.1 million and the effective tax rate ("ETR") was 26.4% for the first quarter of fiscal 2022 compared to $3.4 million and 24.4% for the first quarter of fiscal 2021.

The ETR for the first quarter of fiscal 2022 was higher than the first quarter of fiscal 2021 due to a decrease in the tax benefit related to share-based compensation, the establishment of a valuation allowance in a foreign jurisdiction, and higher state taxes and nondeductible compensation paid to executive officers.

The ETR for the first quarter of fiscal 2022 was approximately the same as the combined federal and state statutory tax rate and included offsetting items primarily related to the tax benefit for share-based compensation and nondeductible compensation paid to executive officers.

The ETR for the first quarter of fiscal 2021 was

lower than the combined federal and state statutory tax rate due to the tax benefit related to share-based compensation, partially offset by nondeductible items resulting primarily from limitations on the deductibility of compensation paid to executive officers.

Net income increased by $0.9 million to $11.4 million for the first quarter of fiscal 2022 from $10.5 million for the first quarter of fiscal 2021.

The net income per diluted share was $1.52 per share for the first quarter of fiscal 2022, compared to $1.34 of net income per diluted share for the first quarter of fiscal 2021.

Weighted average diluted shares outstanding decreased by approximately 328,000 shares to approximately 7,503,000 shares for the first quarter of fiscal 2022 from approximately 7,831,000 shares for the first quarter of fiscal 2021.

The decrease in weighted average diluted shares outstanding was primarily due to the repurchase of shares of our common stock since April 3, 2021, offset in part by the vesting of shares of restricted stock and time-vesting restricted stock units and the exercise of stock options since April 3, 2021.

The income tax provision was $4.6 million and the effective tax rate ("ETR") was 28.3% for the second quarter of fiscal 2022 compared to $4.0 million and 25.8% for the second quarter of fiscal 2021.

The ETR for the current fiscal quarter was higher than the prior year primarily due to a decrease in the tax benefit related to share-based compensation, an increase in the valuation allowance, and higher nondeductible compensation paid to executive officers, partially offset by the remeasurement of the U.K.'s long-term deferred tax liabilities in the second quarter of fiscal 2021

stemming from the enactment of U.K.’s statutory rate increase.

The ETR for the second quarter of fiscal 2022 was higher than the combined federal and state statutory tax rate due to nondeductible items including compensation paid to executive officers and entertainment expenses, along with an increase in the valuation allowance, partially offset by the U.S.

benefit from foreign-derived intangible income ("FDII").

The ETR for the second quarter of fiscal 2021 was lower than the combined federal and state statutory tax rate primarily due to the tax benefit related to share-based compensation, partially offset by non-deductible compensation paid to executive officers and the impact of the U.K.

statutory tax rate change.

Net income remained flat at $11.6 million for the second quarter of fiscal 2022 from the second quarter of fiscal 2021.

The net income per diluted share was $1.57 per share for the second quarter of fiscal 2022, compared to $1.53 of net income per diluted share for the second quarter of fiscal 2021.

Weighted average diluted shares outstanding decreased by approximately 159,000 shares to approximately 7,380,000 shares for the second quarter of fiscal 2022 from approximately 7,539,000 shares for the second quarter of fiscal 2021.

The decrease in weighted average diluted shares outstanding was primarily due to the repurchase of shares of our common stock since July 3, 2021, offset in part by the vesting of shares of restricted stock and time-vesting restricted stock units and the exercise of stock options since July 3, 2021.

Fiscal Year-to-Date Period Ended July 2, 2022, Compared to the Fiscal Year-to-Date Period Ended July 3, 2021

Revenues increased by $2.7 million, or 0.9%, to $297.5 million for the fiscal year-to-date period ended July 2, 2022 from $294.8 million for the fiscal year-to-date period ended July 3, 2021.

Utilization decreased to 75% for the fiscal year-to-date period ended July 2, 2022 from 76% for the fiscal year-to-date period ended July 3, 2021, while consultant headcount grew 3.6% from 833 at the end of the second quarter of fiscal 2021 to 863 at the end of the second quarter of fiscal 2022.

The primary driver of consultant headcount growth was the addition of 37 consultants resulting from the acquisition of Welch Consulting in the first quarter of fiscal 2022.

Overall, revenues outside of the U.S.

represented approximately 20% and 19% of net revenues for the fiscal year-to-date periods ended July 2, 2022 and July 3, 2021, respectively.

Revenues derived from fixed-price projects decreased to 19% of net revenues for the fiscal year-to-date period ended July 2, 2022 compared with 24% of net revenue for the year-to-date period ended July 3, 2021.

Costs of Services (exclusive of depreciation and amortization).

Costs of services (exclusive of depreciation and amortization) decreased by $3.3 million, or 1.6%, to $207.1 million for the fiscal year-to-date period ended July 2, 2022 from $210.4 million for the fiscal year-to-date period ended July 3, 2021.

The decrease in costs of services was due to a decrease of $2.8 million in employee compensation and fringe benefit costs primarily as a result of a lower bonus accrual, a decrease in the valuation expense of the contingent consideration of $0.4 million, and a decrease in client reimbursable expenses of $1.1 million, partially offset by an increase in forgivable loan amortization of $1.0 million.

As a percentage of revenues, costs of services (exclusive of depreciation and amortization) decreased to 69.6% for the fiscal year-to-date period ended July 2, 2022 from 71.4% for the fiscal year-to-date period ended July 3, 2021.

Selling, General and Administrative Expenses.

Selling, general and administrative expenses increased by $6.5 million, or 13.8%, to $53.8 million for the fiscal year-to-date period ended July 2, 2022 from $47.3 million for the fiscal year-to-date period ended July 3, 2021.

Within this category of expenses, there was a $1.5 million increase in travel and entertainment, a $1.1 million increase in commissions to our non-employee experts, a $1.3 million increase in employee compensation and fringe benefit costs, a $0.5 million increase in legal and other professional services fees, a $0.8 million increase in rent expense, and a $1.6 million increase in miscellaneous and other costs.

Partially offsetting the increase in these expenses was a $0.3 million decrease in bad debt expense for the fiscal year-to-date period ended July 2, 2022 as compared to the fiscal year-to-date period ended July 3, 2021.

As a percentage of revenues, selling, general and administrative expenses increased to 18.1% for the fiscal year-to-date period ended July 2, 2022 from 16.0% for the fiscal year-to-date period ended July 3, 2021.

Commissions to our non-employee experts increased to 3.3% of revenues for the fiscal year-to-date period ended July 2, 2022 compared to 2.9% of revenues for the fiscal year-to-date period ended July 3, 2021.

Provision for Income Taxes.

The income tax provision was $8.7 million and the ETR was 27.4% for the fiscal year-to-date period ended July 2, 2022, compared to $7.4 million and 25.1% for the fiscal year-to-date period ended July 3, 2021.

The ETR for the current fiscal year-to-date period was higher than the prior year-to-date period primarily due to a decrease in the tax benefit related to share-based compensation, an increase in the valuation allowance, and higher nondeductible compensation paid to executive officers, partially offset by the impact of the U.K.

statutory rate increase in the second quarter of fiscal 2021.

The ETR for the current fiscal year-to-date period was approximately the same as the combined federal and state statutory tax rate and included offsetting items primarily related to the tax benefit for share-based compensation and nondeductible compensation paid to executive officers.

The ETR for the fiscal year-to-date period ended July 3, 2021 was lower than the combined federal and state statutory tax rate primarily due to the tax benefit related to share-based compensation, partially offset by non-deductible compensation paid to executive officers and the impact of the U.K.

statutory tax rate change.

Net income increased by $1.0 million to $23.1 million for the fiscal year-to-date period ended July 2, 2022 from $22.1 million for the fiscal year-to-date period ended July 3, 2021.

The diluted net income per share was $3.09 for the fiscal year-to-date period ended July 2, 2022, compared to diluted net income per share of $2.86 for the fiscal year-to-date period ended July 3, 2021.

Weighted average diluted shares outstanding decreased by approximately 243,000 to approximately 7,442,000 shares for the fiscal year-to-date period ended July 2, 2022 from approximately 7,685,000 shares for the fiscal year-to-date period ended July 3, 2021.

The decrease in weighted average diluted shares outstanding was primarily due to the repurchase of shares of our common stock since July 3, 2021, offset in part by the vesting of restricted stock and time-vesting restricted stock units, and the exercise of stock options since July 3, 2021.

Liquidity and Capital Resources

Fiscal Quarter Ended April 2, 2022

We believe that our current cash, cash generated from operations, and amounts available under our revolving credit facility through maturity will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months.

During the fiscal quarter ended April 2, 2022, cash decreased by $22.4 million.

We completed the period with cash of $43.7 million.

The principal drivers of the reduction of cash were payment of a significant portion of our fiscal 2021 performance bonuses in the first quarter of fiscal 2022, the consideration paid for the acquisition of Welch Consulting, the repurchase of shares, and the payment of dividends, offset by net borrowings of $60.0 million.

During the fiscal quarter ended April 2, 2022, working capital (defined as current assets less current liabilities) decreased by $3.1 million to $33.2 million.

The decrease in working capital was principally due to a decrease in cash of $22.4 million and an increase in borrowings of $60.0 million.

Partially offsetting these decreases to working capital was an increase in accounts receivable and unbilled services of $11.6 million, an increase in the current portion of our forgivable loans of $2.3 million, a decrease in accounts payable of $3.3 million, a decrease in accrued expenses of $52.7 million, a decrease in deferred revenue and other liabilities of $4.0 million, and a decrease in the current portion of deferred compensation of $4.9 million.

At April 2, 2022, $15.2 million of our cash was held within the U.S.

Fiscal Year-to-Date Period Ended July 2, 2022

We believe that our current cash and cash equivalents, cash generated from operations, and amounts available under our revolving credit facility through maturity will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months.

During the fiscal year-to-date period ended July 2, 2022, cash and cash equivalents decreased by $50.5 million.

We completed the period with cash and cash equivalents of $15.6 million.

The principal drivers of the reduction of cash and cash equivalents were payment of a significant portion of our fiscal 2021 performance bonuses in the first and second quarters of fiscal 2022, the consideration paid for the acquisition of Welch Consulting, the repurchase of shares, and the payment of dividends, offset by net borrowings of $70.0 million.

During the fiscal year-to-date period ended July 2, 2022, working capital (defined as current assets less current liabilities) decreased by $17.6 million to $18.6 million.

The decrease in working capital was principally due to a decrease in cash and cash equivalents of $50.5 million and an increase in borrowings of $70.0 million.

Partially offsetting these decreases to working capital was an increase in accounts receivable and unbilled services of $37.7 million, a decrease in accrued expenses of $54.2 million, a decrease in deferred revenue and other liabilities of $6.0 million, and a decrease in the current portion of deferred compensation of $3.4 million.

At July 2, 2022, $5.0 million of our cash and cash equivalents was held within the U.S.

We have sufficient sources of liquidity in the U.S., including cash flow from operations and availability on our revolving credit facility through maturity to fund U.S.

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Sources and Uses of Cash.

During the fiscal quarter ended April 2, 2022, net cash used in operating activities was $61.8 million.

Net income was $11.4 million for the fiscal quarter ended April 2, 2022.

Uses of cash for operating activities included a $4.0 million decrease in lease liabilities, a net increase of $7.1 million in accounts receivable and unbilled receivables due primarily to the increase in revenues and the timing of billings, and a $1.1 million increase in prepaid expenses and other current assets primarily related to the timing of renewing annual subscriptions.

During the fiscal year-to-date period ended July 2, 2022, net cash used in operating activities was $78.8 million.

Net income was $23.1 million for the fiscal year-to-date period ended July 2, 2022.

Uses of cash for operating activities included a $8.1 million decrease in lease liabilities, a net increase of $36.5 million in accounts receivable and unbilled receivables, and a $1.6 million increase in prepaid expenses and other current assets primarily related to the timing of renewing annual subscriptions.

Other uses of cash included a decrease in accounts payable, accrued expenses, and other liabilities of $63.1 million, primarily due to the payment of a significant portion of our fiscal 2021 performance bonuses and performance awards, and an increase in forgivable loans for the period of $10.0 million, which was primarily driven by $22.1 million of forgivable loan issuances offset by $12.1 million of forgivable loan amortization.

Cash used in operations included incentive cash award expense of $1.8 million, non-cash depreciation and amortization expense of $3.0 million, right-of-use amortization of $3.4 million, share-based compensation expenses of $1.0 million, and other non-cash deductions of $0.3 million.

During the fiscal quarter ended April 2, 2022, net cash used in investing activities was $12.0 million, which included $10.6 million of consideration paid for the acquisition of Welch Consulting and $1.4 million for capital expenditures, primarily related to purchases of office equipment.

During the fiscal quarter ended April 2, 2022, net cash provided by financing activities was $52.0 million, primarily as a result of borrowings under the revolving credit facility of $60.0 million and $0.3 million received upon the issuance of shares of common stock related to the exercise of stock options.

Cash used in operations included incentive cash award expense of $3.3 million, non-cash depreciation and amortization expense of $6.0 million, right-of-use amortization of $6.8 million, share-based compensation expenses of $2.1 million, and other non-cash gains and benefits of $0.8 million.

During the fiscal year-to-date period ended July 2, 2022, net cash used in investing activities was $12.3 million, which included $10.2 million of net consideration paid for the acquisition of Welch Consulting and $2.1 million for capital expenditures, primarily related to purchases of office equipment.

During the fiscal year-to-date period ended July 2, 2022, net cash provided by financing activities was $42.1 million, primarily as a result of borrowings under the revolving credit facility of $70.0 million and $0.3 million received upon the

issuance of shares of common stock related to the exercise of stock options.

Offsetting these increases in cash provided by financing activities were $22.6 million of repurchases of common stock, payment of $4.6 million of cash for dividends and dividend equivalents, and tax withholding payments reimbursed by restricted shares on vesting of $1.0 million.

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Certain of our operating leases have terms that impose asset retirement obligations due to office modifications or the periodic redecoration of the premises, which are included in other liabilities on our consolidated balance sheets and are recorded at a value based on their estimated discounted cash flows.

We expect to satisfy these lease and related obligations, as they become due, from cash generated from operations.

We do not expect to incur asset retirement obligation or redecoration obligation costs over the next twelve months.

The remainder of our asset retirement obligations and redecoration obligations are approximately $2.8 million and are expected to be paid between fiscal 2026 and fiscal 2031 when the underlying leases terminate.

At July 2, 2022, the remainder of our asset retirement obligations and redecoration obligations are approximately $2.7 million and are expected to be paid between fiscal 2026 and fiscal 2031 when the underlying leases terminate or when the respective lease agreement requires redecoration.

We expect to satisfy these lease and related obligations as they become due from cash generated from operations.

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Generally, we may repay borrowings under the revolving credit facility at any time, but we must repay all borrowings no later than October 24, 2022, the maturity date.

There was $60.0 million in borrowings outstanding under the revolving credit facility as of April 2, 2022.

The amount available under this revolving credit facility was reduced by $4.4 million of letters of credit outstanding as of April 2, 2022.

There was $70.0 million in borrowings outstanding under the revolving credit facility as of July 2, 2022.

The amount available under this revolving credit facility was reduced by $4.4 million of letters of credit outstanding as of July 2, 2022.

Borrowings under the revolving credit facility bear interest at a rate per annum, at our election, of either (i) the Base Rate, as defined in the credit agreement, plus an applicable margin, which varies between 0.25% and 1.25% depending on our total leverage ratio as determined under the credit agreement, or (ii) the Adjusted Eurocurrency Rate, as defined in the credit agreement, plus an applicable margin, which varies between 1.25% and 2.25% depending on our total leverage ratio.

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Borrowings under the revolving credit facility are secured by 100% of the stock of certain of our U.S.

subsidiaries and 65% of the stock of certain of our foreign subsidiaries, which represent approximately $35.2 million in net assets as of April 2, 2022.

subsidiaries and 65% of the stock of certain of our foreign subsidiaries, which represent approximately $35.6 million in net assets as of July 2, 2022.

Under the credit agreement, we must comply with various financial and non-financial covenants.

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The non-financial covenant restrictions of the senior credit agreement include, but are not limited to, our ability to incur additional indebtedness, engage in acquisitions or dispositions, and enter into business combinations.

At April 2, 2022 and currently, we are in compliance with all such tests under the credit agreement.

At July 2, 2022 and currently, we are in compliance with all such tests under the credit agreement.

Forgivable Loans

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obligations related to the performance awards.

We expect to fund any cash payments from existing cash resources, cash generated from operations, or borrowings on our revolving credit facility.

We expect to fund any cash payments from existing cash resources, cash generated from operations, or borrowings available on our revolving credit facility.

Our Amended and Restated 2006 Equity Incentive Plan, as amended (the "2006 Equity Plan"), authorizes the grant of a variety of incentive and performance equity awards to our directors, employees and non-employee experts, including stock options, shares of restricted stock, restricted stock units, and other equity awards.

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The compensation committee of our Board of Directors is responsible for approving all cash and equity awards under the LTIP.

We expect to fund any cash payments from existing cash resources, cash generated from operations, or borrowings on our revolving credit facility.

We expect to fund any cash payments from existing cash resources, cash generated from operations, or borrowings available on our revolving credit facility.

Business and Talent Acquisitions

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In recent years, we have typically paid for acquisitions with cash, or a combination of cash and our common stock, and we may continue to do so in the future.

To pay for an acquisition, we may use cash on hand, cash generated from our operations, borrowings under our revolving credit facility, or we may pursue other forms of financing.

To pay for an acquisition, we may use cash on hand, cash generated from our operations, borrowings available under our revolving credit facility, or we may pursue other forms of financing.

Our ability to secure short-term and long-term debt or equity financing in the future, including our ability to refinance our credit agreement, will depend on several factors, including our future profitability, the levels of our debt and equity, restrictions under our existing revolving credit facility, and the overall credit and equity market environments.

We completed a business acquisition during the fiscal quarter ended April 2, 2022, which is further described in Note 2, "Business Acquisition” in Part I, Item I, “Financial Statements” of this report.

We completed a business acquisition during the first quarter of fiscal 2022, which is further described in Note 2, "Business Acquisition” in Part I, Item I, “Financial Statements” of this report.

Share Repurchases

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We may repurchase shares under this program in open market purchases (including through any Rule 10b5-1 plan adopted by us) or in privately negotiated transactions in accordance with applicable insider trading and other securities laws and regulations.

During the fiscal quarter ended April 2, 2022, we repurchased and retired 56,665 shares under our share repurchase program at an average price per share of $87.46.

During the fiscal quarter ended April 3, 2021, we repurchased and retired 166,552 shares under our share repurchase program at an average price per share of $57.93.

As of April 2, 2022, we had approximately $45.5 million available for future repurchases under our share repurchase program.

We plan to finance future repurchases with available cash, cash from future operations, and funds from our revolving credit facility.

During the fiscal quarter and fiscal year-to-date period ended July 2, 2022, we repurchased and retired 211,345 shares and 268,010 shares, respectively, under our share repurchase program at an average price per share of $83.63 and $84.44, respectively.

During the fiscal quarter ended July 3, 2021, we did not repurchase any shares under this share repurchase program;

however, we did purchase 337,837 shares at a purchase price of $74.00 under a modified "Dutch auction" self-tender offer, as further described in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations” of our 2021 Form 10-K.

For the fiscal year-to-date period ended July 3, 2021, we repurchased and retired 166,552 shares under our share repurchase program at an average price per share of $57.93.

As of July 2, 2022, we had approximately $27.9 million available for future repurchases under our share repurchase program.

We plan to finance future repurchases with available cash, cash from future operations, and available funds from our revolving credit facility.

We expect to continue to repurchase shares under our share repurchase program.

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We anticipate paying regular quarterly dividends each year.

These dividends are anticipated to be funded through cash flow from operations, available cash on hand, and/or borrowings under our revolving credit facility.

These dividends are anticipated to be funded through cash flow from operations, available cash on hand, and/or available borrowings under our revolving credit facility.

Although we anticipate paying regular quarterly dividends on our common stock for the foreseeable future, the declaration, timing and amounts of any such dividends remain subject to the discretion of our Board of Directors.

During the fiscal quarter ended April 2, 2022, we paid dividends and dividend equivalents of $2.4 million.

During the fiscal quarter ended April 3, 2021, we paid dividends and dividend equivalents of $2.1 million.

During the fiscal quarter and fiscal year-to-date period ended July 2, 2022, we paid dividends and dividend equivalents of $2.3 million and $4.6 million, respectively.

During the fiscal quarter and fiscal year-to-date period ended July 3, 2021, we paid dividends and dividend equivalents of $1.9 million and $4.0 million, respectively.

Impact of Inflation

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Factors Affecting Future Performance

Important factors that could cause our actual results to differ materially from the forward-looking statements we make in this Quarterly Report on Form 10-Q, as well as a description of material risks we face, are set forth below under the heading “Risk Factors” and included in Part I, Item 1A, “Risk Factors” of our 2021 Form 10-K.

If any of these risks, or any risks not presently known to us or that we currently believe are not significant, develops into an actual event, then our business, financial condition, and results of operations could be adversely affected.

Important factors that could cause our actual results to differ materially from the forward-looking statements we make in this report, as well as a description of material risks we face, are set forth below under the heading “Risk Factors” and included in Part I, Item 1A, “Risk Factors” of our 2021 Form 10-K.

If any of these risks, or any risks not presently known to us or that

we currently believe are not significant, develops into an actual event, then our business, financial condition, and results of operations could be adversely affected.

Quantitative and Qualitative Disclosures About Market Risk

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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