What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-07-26 compared with 2021-04-26 · 98 added, 79 removed, 178 unchanged (50% of the section changed)

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Cautionary Statement Regarding Forward-Looking Statements

This document contains certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to the COVID-19 pandemic, net sales, diluted earnings per share, gross profit, gross margin, selling, general and administrative expenses, income tax expense, income before income taxes, net income, cash and cash equivalents, indebtedness, liquidity, the Company’s share repurchase program, the Company’s outlook and distribution facility costs and productivity initiatives.

This document contains certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to the acquisition of DPL Holding Corporation (“Dayton Parts”), the COVID-19 pandemic, net sales, diluted earnings per share, gross profit, gross margin, selling, general and administrative expenses, income tax expense, income before income taxes, net income, cash and cash equivalents, indebtedness, liquidity, the Company’s share repurchase program, the Company’s outlook and distribution facility costs and productivity initiatives.

Words such as “believe,” “demonstrate,” “expect,” “estimate,” “forecast,” “anticipate,” “should,” “will” and “likely” and similar expressions identify forward-looking statements.

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and (xxxv) import and export control and economic sanctions laws and regulations.

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected.

See the “Statement Regarding Forward Looking Statements,” PART I, ITEM 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 26, 2020 for additional information regarding forward-looking statements and the factors that could cause actual results to differ materially from those anticipated in the forward-looking statements.

In addition, there are a number of risks, uncertainties and other factors relating to the proposed acquisition of Dayton Parts that could affect our actual results, including, but not limited to:

(i) the proposed transaction may not be completed, or completed within the expected timeframe;

(ii) costs relating to the proposed transaction may be greater than expected;

(iii) the possibility that a governmental entity may prohibit, delay or refuse to grant a necessary regulatory approval in connection with the proposed transaction;

(iv) problems may arise in integrating the businesses of the two companies and the integration may not be successful;

(v) the combined companies may be unable to achieve any anticipated synergies or any benefits of the transaction may take longer to realize than expected;

(vi) the businesses of one or both companies may suffer as a result of uncertainties surrounding the proposed transaction, including disruption of relationships with customers, employees, suppliers or dealers;

(vii) the combined companies may not perform as expected following the closing;

(viii) the failure to enter into a new $600 million revolving credit facility or to repay any borrowings thereunder;

and (ix) other risks beyond the control of either party.

Should one or more of any of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected.

See the “Statement Regarding Forward Looking Statements,” PART I, ITEM 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 26, 2020, the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 27, 2021 and the Company’s other filings with the U.S.

Securities and Exchange Commission for additional information regarding forward-looking statements and the factors that could cause actual results to differ materially from those anticipated in the forward-looking statements.

The Company is under no obligation to, and expressly disclaims any such obligation to, update any of the information in this document, including but not limited to any situation where any forward-looking statement later turns out to be inaccurate whether as a result of new information, future events or otherwise.

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For the year ended December 26, 2020, approximately 75% of our products were sold under brands that we own, and the remainder of our products were sold for resale under customers' private labels, other brands or in bulk.

Our products are sold primarily in the United States

through automotive aftermarket retailers (such as Advance Auto Parts, Inc.

(“Advance”), AutoZone, Inc.

(“AutoZone”), and O'Reilly Automotive, Inc.

(“O’Reilly”)), including through their online platforms;

Our products are sold primarily in the United States through automotive aftermarket retailers (such as Advance Auto Parts, Inc., AutoZone, Inc., and O'Reilly Automotive, Inc.), including through their online platforms;

national, regional and local warehouse distributors (such as Genuine Parts Co.

– NAPA (“NAPA”));

and specialty markets, and salvage yards.

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Our fiscal 2020 was a fifty-two-week period that ended on December 26, 2020 (“fiscal 2020”).

Impacts of COVID-19

The COVID-19 pandemic has resulted and is expected to continue to result in significant economic disruption.

Since COVID-19 was declared a pandemic in early 2020, state orders shutting down or restricting business operations to contain the spread of COVID-19 have generally exempted automotive repair and the related supply and distribution of parts as those businesses have generally been classified as critical, essential or life-sustaining.

Therefore, the vast majority of our retail and wholesale customers have been and currently remain open for business.

In turn, all of our U.S.

facilities have also remained, and currently remain, open and operating, with modified staffing in certain locations where appropriate.

We have taken actions to promote the welfare of our employees by enhancing safety protocols, including requiring administrative employees to work from home where applicable and implementing symptom screening, social distancing and robust sanitization practices at our facilities.

We also have adopted a COVID-19 sick leave policy providing continued salary and benefits to eligible employees.

We have had to adjust our operations and inventory levels as demand has fluctuated due to government-imposed restrictions being imposed and then subsequently lifted or modified across the United States.

As government-imposed restrictions vary and continue to change across the United States and elsewhere around the world, it remains difficult to determine the full impact that the pandemic will have on the overall demand environment as well as our ability to source parts and other materials to meet demand levels.

Correspondingly, to the extent there may be fluctuations in demand or delays or increased costs impacting our ability to source parts and other materials, it remains difficult to determine the full impact that the pandemic will have on various aspects of our operations, including, but not limited to, inventory levels, our ability to fulfill contractual requirements and staffing at our facilities.

At the time of this filing and as we look ahead, we are unable to determine or predict the overall impact the COVID-19 pandemic will have on our customers, vendors and suppliers or our business, results of operations, liquidity or capital resources.

Significant uncertainty still exists concerning the overall magnitude of the impact and the duration of the COVID-19 pandemic.

As a result, we will continue to closely monitor updates regarding the spread of COVID-19 and its variants and the distribution of vaccines developed to combat COVID-19, and we will adjust our operations according to guidelines from local, state and federal officials.

In light of the foregoing, we may take further actions that alter our business operations or that we determine are in the best interests of our employees, customers, suppliers and shareholders.

While COVID-19 did not have a material adverse effect on our business operations for the six months ended June 26, 2021, during the period we did observe pandemic-related pressures on the global supply network that caused logistical issues, including higher freight costs and inflation with respect to materials costs, which impacted our results.

We currently expect those pressures to continue to exist for the remainder of the fiscal year.

As countries continue to combat COVID-19 and government-imposed restrictions change around the world, there is still a risk that the pandemic may impact the overall demand environment as well as our ability to maintain staffing at our facilities, to source parts and other materials to meet demand levels, to maintain inventory levels and to fulfill contractual requirements.

We will continue to closely monitor updates regarding the spread of COVID-19 and its variants and the distribution of vaccines developed to combat COVID-19, and we will adjust our operations according to guidelines from local, state and federal officials.

In light of the foregoing, we may take actions that alter our business operations or that we determine are in the best interests of our employees, customers, suppliers and shareholders.

New Product Development

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These investments historically have enabled us to provide an expanding array of new product offerings and grow revenues at levels that generally have exceeded market growth rates.

In the three months ended March 27, 2021, we introduced 658 new distinct parts to our customers and end-users, including 203 “New-to-the-Aftermarket” parts.

In the six months ended June 26, 2021, we introduced 2,274 new distinct parts to our customers and end-users, including 449 “New-to-the-Aftermarket” parts.

We introduced 3,479 distinct parts to our customers and end-users in the fiscal year ended December 26, 2020, including 1,433 “New-to-the-Aftermarket” parts.

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Through Dorman® HD Solutions™, we specialize in what formerly were “dealer exclusive” parts similar to how we have approached the passenger car and light-duty truck sector.

During the three months ended March 27, 2021, we introduced 29 distinct parts in this product line.

We expect to continue to invest in the medium and heavy-duty product category.

During the six months ended June 26, 2021, we introduced 60 distinct parts in this product line.

We expect to continue to invest in the medium- and heavy-duty product category and recently announced an agreement to acquire Dayton Parts, a manufacturer of undercarriage and other parts designed to serve the heavy-duty vehicle sector of the aftermarket.

Our growth is also impacted by acquisitions.

For example, on January 2, 2020, we acquired the remaining 60% of the outstanding stock of Power Train Industries, Inc.

We may acquire businesses in the future to supplement our financial growth, increase our customer base, add to our distribution capabilities or enhance our product development resources, among other reasons.

On June 25, 2021, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) to acquire 100% of the equity interests of Dayton Parts for aggregate consideration of $338 million, subject to certain customary adjustments based on, among other things, the amount of cash, indebtedness and working capital in the business of Dayton Parts as of the closing date.

This transaction aligns with the Company’s previously stated strategy to diversify its customer base and product offering by further penetrating the heavy-duty sector.

The transaction is subject to customary closing conditions, including the expiration or earlier termination of any applicable waiting period under the Hart-Scott- Rodino Antitrust Improvements Act of 1976, as amended.

We expect the transaction to close in the second half of 2021.

Economic Factors

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Vehicle scrappage rates have also decreased over the last several years.

The COVID-19 pandemic in general, as well as restrictions imposed by certain states in response to the COVID-19 pandemic, are adversely impacting work-related and personal travel.

The COVID-19 pandemic in general, as well as restrictions imposed by certain states in response to the COVID-19 pandemic, adversely impacted work-related and personal travel throughout 2020 and into early 2021.

However, as a result of easing restrictions, the number of miles driven has shown a recent increase compared to prior year levels.

In fact, according the U.S.

Department of Transportation, the number of miles driven through October 2020 has decreased 13.9% year over year due to the impacts of the COVID-19 pandemic.

We believe that demand for our products is negatively impacted by the decrease to miles driven, resulting in a reduction in vehicle maintenance and reduced demand for our parts.

As a result, while, prior to COVID-19, we might have expected to see additional sales growth due to the VIO and mileage trends referenced above, the impact of COVID-19 may adversely affect our sales growth potential and our future results.

Brand Protection

We operate in a highly competitive market.

As a result, we are continuously evaluating our approach to brand, pricing and terms to our different customers and channels.

For example, in the third quarter of 2019, we modified our brand protection policy, which is designed to ensure that certain products bearing the Dorman name are not advertised below certain approved pricing levels.

Department of Transportation, the number of miles driven through May 2021 has increased 12.6% year over year.

We believe that demand for our products generally correlates to miles driven, as the more miles a vehicle is driven, the more likely it is that parts will fail.

The combination of the factors above has accounted for a portion of our sales growth and is expected to impact our future results.

Discounts, Allowances and Incentives

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Accordingly, we generally do not have exposure to fluctuations in the relationship between the U.S.

dollar and various foreign currencies between the time of execution of the purchase order and payment for the

dollar and various foreign currencies between the time of execution of the purchase order and payment for the product.

To the extent that the U.S.

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Impact of Inflation

The overall impact of inflation has not historically resulted in a significant change in labor costs or the cost of general services utilized.

While we experienced wage and benefits inflation during the three months ended June 26, 2021, the overall impact of inflation has not historically resulted in a significant change in labor costs or the cost of general services utilized.

The cost of many commodities that are used in our products has fluctuated over time resulting in increases and decreases in the cost of our products.

In addition, we have periodically experienced increased transportation costs as a result of higher fuel prices, capacity constraints and other factors.

In addition, we have periodically experienced increased transportation costs as a result of higher fuel prices, capacity constraints and other factors, including as a result of COVID-19.

We attempt to offset cost increases by passing along selling price increases to customers and using alternative suppliers.

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In the third quarter of 2018, the Office of the United States Trade Representative (USTR) began imposing additional tariffs on products imported from China, including many of our products, ranging from 7.5% to 25%.

The tariffs enacted to date increase the cost of many of our products that are manufactured for us in China.

The tariffs enacted to date increase the cost of many of the products that are manufactured for us in China.

We have taken several actions to mitigate the impact of the tariffs including, but not limited to, price increases to our customers and cost concessions from our suppliers.

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Three Months Ended*

Six Months Ended*

(in millions)

March 27, 2021

March 28, 2020

June 26, 2021

June 27, 2020

June 26, 2021

June 27, 2020

Cost of goods sold

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Income from operations

Other (expense) income, net

Other income (expense), net

Income before income taxes

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* Percentage of sales information may not add due to rounding

Three Months Ended March 27, 2021 Compared to Three Months Ended March 28, 2020

Net sales increased 12% to $288.0 million for the three months ended March 27, 2021 from $257.7 million for the three months ended March 28, 2020.

Three Months Ended June 26, 2021 Compared to Three Months Ended June 27, 2020

Net sales increased 33% to $310.6 million for the three months ended June 26, 2021 from $233.2 million for the three months ended June 27, 2020.

The increase in net sales was all organic with growth across all of our channels.

The absence of the government imposed shut-downs that negatively impacted the three months ended June 27, 2020 was also a significant contributor to the year-over-year growth.

Gross profit margin was 35.5% of net sales for the three months ended June 26, 2021 compared to 33.9% of net sales for the three months ended June 27, 2020.

Gross margin expansion was driven by fixed cost leverage from higher sales volume and improved efficiencies as the Company continued to drive productivity savings in its end-to-end supply chain processes.

Additionally, the Company benefitted from the absence of out-of-pocket costs incurred in the three months ended June 27, 2020 due to the COVID-19 pandemic, including costs related to safety measures implemented at its sites and its COVID-19 sick leave policy.

These benefits were partially offset by significantly higher freight costs due to global transportation and logistics constraints in the three months ended June 26, 2021.

Selling, general and administrative expenses (“SG&A”) were $69.5 million, or 22.4% of net sales, for the three months ended June 26, 2021 compared to $61.5 million, or 26.4% of net sales, for the three months ended June 27, 2020.

Approximately 430 basis points of the decrease in SG&A as a percentage of net sales was due to the operating leverage from the $77 million increase in net sales for the three months ended June 26, 2021 as compared to the three months ended June 27, 2020.

Additionally, SG&A as a percentage of net sales was positively impacted by the absence of $4.2 million of out-of-pocket costs incurred in the three months ended June 27, 2020 related to the COVID-19 pandemic, primarily from factoring costs, costs related to safety measures at the Company’s sites, and the Company’s COVID-19 sick leave policy.

These benefits were partially offset by wage and benefits inflation and costs related to the pending Dayton Parts transaction in the three months ended June 26, 2021.

Our effective tax rate was 22.3% for the three months ended June 26, 2021 compared to 19.9% for the three months ended June 27, 2020.

The lower effective tax rate for the three months ended June 27, 2020 was the result of lower state tax expense and a nontaxable book gain associated with the PTI acquisition.

Six Months Ended June 26, 2021 Compared to Six Months Ended June 27, 2020

Net sales increased 22% to $598.6 million for the six months ended June 26, 2021 from $490.9 million for the six months ended June 27, 2020.

The increase in net sales was all organic and driven by robust customer demand.

Gross profit margin was 36.3% of net sales for the three months ended March 27, 2021 compared to 32.9% of net sales for the three months ended March 28, 2020.

Gross margin expansion was driven by increased efficiencies as part of the Company’s ongoing efforts to streamline its end-to-end supply chain processes.

Additionally, the Company benefitted from the absence of increased customer provisions that impacted gross margin in the three months ended March 28, 2020.

These benefits were partially offset by increased freight costs due to global transportation and logistics constraints.

Selling, general and administrative expenses were $62.9 million, or 21.8% of net sales, for the three months ended March 27, 2021 compared to $59.7 million, or 23.2% of net sales, for the three months ended March 28, 2020.

Approximately 170 basis points of the decrease in SG&A as a percentage of net sales was due to improved leverage from the $30 million increase in net sales in the three months ended March 27, 2021 as compared to the three months ended March 28, 2020.

Additionally, the Company drove increased operational efficiencies, which were partially offset by increased wage and benefit inflation as compared to the prior year quarter.

Our effective tax rate was 21.3% for the three months ended March 27, 2021 compared to 17.8% for the three months ended March 28, 2020.

The lower effective tax rate for the three months ended March 28, 2020 was the result of a tax benefit related to the write-off of a deferred tax liability associated with PTI upon our acquisition of the controlling interest in January 2020, and a foreign tax credit carry-back claim.

The absence of the government imposed shut-downs that negatively impacted the six months ended June 27, 2020 was also a significant contributor to the year-over-year growth.

Gross profit margin was 35.9% of net sales for the six months ended June 26, 2021 compared to 33.4% of net sales for the six months ended June 27, 2020.

Additionally, the Company benefitted from the absence of out-of-pocket costs incurred due to the COVID-19 pandemic in the six months ended June 27, 2020.

These benefits were partially offset by increased freight costs due to global transportation and logistics constraints in the six months ended June 26, 2021.

Selling, general and administrative expenses were $132.4 million, or 22.1% of net sales, for the six months ended June 26, 2021 compared to $121.3 million, or 24.7% of net sales, for the six months ended June 27, 2020.

The decrease in SG&A as a percentage of net sales was due to the operating leverage from the $108 million increase in net sales for the six months ended June 26, 2021 as compared to the six months ended June 27, 2020.

Additionally, the Company saw benefits in SG&A as a percentage of net sales from the absence of out-of-pocket costs related to the COVID-19 pandemic incurred in the six months ended June 27, 2020.

These benefits were partially offset by wage and benefits inflation and costs related to the pending Dayton Parts transaction in the six months ended June 26, 2021.

Our effective tax rate was 21.8% for the six months ended June 26, 2021 compared to 18.6% for the six months ended June 27, 2020.

The lower effective tax rate for the six months ended June 27, 2020 was the result of a tax benefit related to a nontaxable book gain and the write-off of a deferred tax liability associated with PTI upon our acquisition of the controlling interest in January 2020, and a foreign tax credit carry-back claim.

Liquidity and Capital Resources

Historically, our primary sources of liquidity have been our invested cash and the cash flow we generate from our operations, including accounts receivable sales programs provided by our customers.

Cash and cash equivalents at March 27, 2021 increased to $166.6 million from $155.6 million at December 26, 2020.

The increase primarily related to cash provided from operating activities.

Working capital was $631.2 million at March 27, 2021 compared to $600.3 million at December 26, 2020.

Historically, our primary sources of liquidity have been our invested cash and the cash flow we generate from our operations, including accounts receivable sales programs sponsored by our customers.

Cash and cash equivalents were $155.5 million at June 26, 2021 compared to $155.6 million at December 26, 2020.

During the six months ended June 26, 2021, strong cash provided from operating activities was offset by share repurchases under our publicly announced repurchase program and capital expenditures.

Working capital was $642.1 million at June 26, 2021 compared to $600.3 million at December 26, 2020.

Based on our current operating plan, we believe that our sources of available capital are adequate to meet our ongoing cash needs for at least the next twelve months.

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Further extensions of customer payment terms would result in additional uses of cash flow or increased costs associated with the sales of accounts receivable.

During the three months ended March 27, 2021 and March 28, 2020, we sold $209.9 million and $151.3 million of accounts receivable, respectively, under these programs.

If receivables had not been sold over the previous twelve months, approximately $511 million and $505 million of additional accounts receivable would have been outstanding at March 27, 2021 and December 26, 2020, respectively, based on our standard payment terms.

We have capacity to sell increased levels of accounts receivable under our available programs if liquidity needs arise, whether due to continued impacts of COVID-19 or other factors.

During the six months ended June 26, 2021 and June 27, 2020, we sold $433.7 million and $496.4 million of accounts receivable, respectively, under these programs.

If receivables had not been sold over the previous twelve months, approximately $593 million and $505 million of additional accounts receivable would have been outstanding at June 26, 2021 and December 26, 2020, respectively, based on our standard payment terms.

We can sell increased levels of accounts receivable under our available programs if liquidity needs arise, whether due to the continued impacts of COVID-19 or other factors.

Credit Agreement

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At the Company’s election, the interest rate applicable to borrowings under the credit agreement will be either (1) the Prime Rate as announced by Wells Fargo from time to time, (2) an Adjusted LIBOR Market Index Rate as measured by the LIBOR Market Index Rate plus the Applicable Margin which fluctuates between 65 basis points and 125 basis points based on the ratio of the Company’s Consolidated Funded Debt to Consolidated EBITDA, or (3) an Adjusted LIBOR Rate as measured by the LIBOR Rate plus the Applicable Margin which fluctuates between 65 basis points and 125 basis points based on the ratio of the Company’s Consolidated Funded Debt to Consolidated EBITDA.

The interest rate at March 27, 2021 was LIBOR plus 65 basis points (0.76%).

The interest rate at June 26, 2021 was LIBOR plus 65 basis points (0.75%).

During the occurrence and continuance of an event of default, all outstanding revolving credit loans will bear interest at a rate per annum equal to 2.00% in excess of the greater of (1) the Prime Rate or (2) the Adjusted LIBOR Market Index Rate then applicable.

The credit agreement also contains covenants, including those related to the ratio of certain consolidated fixed charges to consolidated EBITDA, capital expenditures, and share repurchases, each as defined by the credit agreement.

As of March 27, 2021, we were not in default in respect to the credit agreement.

The credit agreement also requires us to pay a fee of 0.10% on the average daily unused portion of the facility, provided the fee will not be charged on the first $30 million of the revolving credit facility.

As of March 27, 2021, there were no borrowings under the credit agreement and two outstanding letters of credit for $0.8 million in the aggregate which were issued to secure ordinary course of business transactions.

Net of these letters of credit, we had $99.2 million available under the credit agreement at March 27, 2021.

As of June 26, 2021, we were not in default in respect to the credit agreement.

agreement also requires us to pay a fee of 0.10% on the average daily unused portion of the facility, provided the fee will not be charged on the first $30 million of the revolving credit facility.

As of June 26, 2021 , there were no borrowings under the credit agreement and two outstanding let ters of credit for $0.8 million in the aggregate which were issued to secure ordinary course of business transactions.

Net of these le tters of credit, we had $99.2 million available under the credit agreement at June 26, 2021 .

In connection with entering into the Merger Agreement, we have entered into a commitment letter, dated as of June 25, 2021, with certain lenders as counterparties, whereby the lenders have committed to provide us with a new $600 million revolving credit facility (the “New Facility”) contingent on the satisfaction of customary conditions.

The New Facility would replace our existing $100 million revolving credit facility.

We may finance all or a portion of the merger transaction and related fees and expenses with borrowings under the New Facility.

The following summarizes the activities included in the Condensed Consolidated Statements of Cash Flows:

Three Months Ended

Six Months Ended

(in thousands)

March 27, 2021

March 28, 2020

June 26, 2021

June 27, 2020

Cash provided by operating activities

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Cash (used in) provided by financing activities

Net increase in cash and cash equivalents

During the three months ended March 27, 2021, cash provided by operating activities was $21.0 million compared to cash provided by operating activities of $18.6 million during the three months ended March 28, 2020.

The $2.4 million increase was driven by an increase in net income of $9.9 million, higher proceeds from accounts receivable mostly attributable to higher factoring, and lower outflows from accounts payable and accrued liabilities, due to the timing of payments, partially offset by higher inventory to maintain customer fill rates during the three months ended March 27, 2021.

Investing activities used cash of $ 6.2 million and $18.0 million during the three months ended March 27, 2021 and March 28, 2020 , respectively.

During the three months ended March 28, 2020 we used $18.1 million to acquire the remaining 60% of the outstanding equity of PTI , net of $3.5 million of cash acquired.

Financing activities used $3.8 million of cash during the three months ended March 27, 2021, compared to $92.8 million of cash provided during the three months ended March 28, 2020.

During the three months ended March 27, 2021, we paid $3.0 million to repurchase 36,000 common shares under our share repurchase plan.

During the three months ended March 28, 2020, we paid $5.5 million to repurchase 91,979 common shares under the share repurchase plan.

During the three months ended March 28, 2020, we drew down $99.0 million on our revolving credit facility, which was later repaid during the third quarter of 2020.

Net (decrease) increase in cash and cash equivalents

During the six months ended June 26, 2021, cash provided by operating activities was $39.1 million compared to $219.4 million during the six months ended June 27, 2020.

The $180.3 million decrease was driven by lower proceeds from accounts receivable in the current year as compared to the prior year, mostly attributable to higher factoring during the six months ended June 27, 2020 due to COVID-19 uncertainty.

Cash from operating activities in the current year also was negatively impacted by higher inventory to maintain customer fill rates, as compared to the prior year.

Investing activities used cash of $10.2 million and $21.5 million during the six months ended June 26, 2021 and June 27, 2020, respectively.

During the six months ended June 27, 2020 we used $14.3 million to acquire the remaining 60% of the outstanding equity of PTI, net of cash acquired.

Financing activities used $29.0 million of cash during the six months ended June 26, 2021, compared to $93.3 million of cash provided during the six months ended June 27, 2020.

During the six months ended June 27, 2020, cash provided by financing activities reflects a draw down by the Company of $99.0 million on its revolving credit facility due to uncertainty associated with COVID-19.

During the six months ended June 26, 2021, we paid $30.9 million to repurchase 301,889 common shares under our share repurchase plan.

During the six months ended June 27, 2020, we paid $5.5 million to repurchase 91,979 common shares under the share repurchase plan.

The remaining uses of cash from financing activities in each period result primarily from the repurchase of our common stock from our 401(k) Plan.

During the three months ended March 27, 2021, we experienced no material changes to our contractual obligations as disclosed in our Annual Report on Form 10-K for the year ended December 26, 2020.

During the six months ended June 26, 2021, we experienced no material changes to our contractual obligations as disclosed in our Annual Report on Form 10-K for the year ended December 26, 2020.

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