What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-07-26 compared with 2024-05-01 · 105 added, 64 removed, 126 unchanged (57% of the section changed)

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Forward-looking statements include all statements that are not historical statements of fact and those regarding our intent, belief or expectations for our business, operations, financial performance or financial condition in addition to statements regarding our general business strategies, the market potential of our brands, trends in the housing market, the potential impact of costs, including material and labor costs, the potential impact of inflation, expected capital spending, expected pension contributions, the expected impact of acquisitions, dispositions and other strategic transactions.

Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” “outlook,” “positioned” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may,” “confident,” “opportunity” and “could” are generally forward-looking in nature and not historical facts.

Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” “outlook,” “positioned,” "confident," "opportunity" and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may,” and “could” are generally forward-looking in nature and not historical facts.

Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is based on current expectations, estimates, assumptions and projections of our management about our industry, business and future financial results, available at the time this report is filed with the Securities and Exchange Commission.

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However, we believe we are well positioned to manage what we expect to be a short-term slow-down in the housing market as we believe the fundamental drivers of the housing market remain intact.

We have been and may continue to be impacted by near-term supply, labor and freight constraints, a volatile global supply chain environment, as well as sustained increased rates of inflation, increased interest rates, unfavorable fluctuations in foreign exchange rates and the ongoing costs of tariffs.

We have been and may continue to be impacted by near-term supply, labor and freight constraints, a volatile global supply chain environment, as well as sustained but easing increased rates of inflation, increased interest rates, unfavorable fluctuations in foreign exchange rates and the ongoing costs of tariffs.

We continue to manage these challenges and are diligently working to offset potential unfavorable impacts of these items through continuous productivity improvement initiatives and price increases.

On February 29, 2024, we acquired 100% of the outstanding equity of Wise Water Solutions LLC, doing business as SpringWell Water Filtration Systems ("SpringWell"), for a purchase price of $105.6 million, subject to post-closing adjustments, net of cash acquired of $1.4 million.

We financed the transaction using cash on hand and borrowings under our existing credit facility.

We financed the transaction using cash on hand and borrowings under our existing credit arrangements.

The results of SpringWell are reported as part of the Water Innovations ("Water") segment.

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and its affiliates ("ASSA").

The Company completed the acquisition for a total purchase price of approximately $809.3 million, subject to post-closing adjustments, net of cash acquired of $16.3 million.

As of the date of this filing, legal title to international operations in Vietnam has not yet transferred, but we expect a deferred closing, which will include a payment of approximately $23.5 million (which amount is already included in the overall purchase price but for which the cash payment has not yet been made) shortly following receipt of local regulatory approval.

In preparation for the deferred closing, $23.5 million is classified as restricted cash within Other current assets and the corresponding payable is included within Other current liabilities.

The Company completed the acquisition for a total purchase price of approximately $813.9 million, net of cash acquired of $21.9 million.

During the second quarter, legal title to international operations in Vietnam transferred to us, which included a payment of approximately $23.5 million, net of cash of $5.6 million (which amount is already included in the overall purchase price).

We financed the transaction with cash on hand.

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RESULTS OF OPERATIONS

Thirteen Weeks Ended March 30, 2024 Compared to Thirteen Weeks Ended April 1, 2023

Twenty-Six Weeks Ended June 29, 2024 Compared To Twenty-Six Weeks Ended July 1, 2023

(In millions)

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Operating income

The following discussion of consolidated results of operations and segment results refers to the thirteen weeks ended March 30, 2024 compared to the thirteen weeks ended April 1, 2023.

The following discussion of consolidated results of operations and segment results refers to the twenty-six weeks ended June 29, 2024 compared to the twenty-six weeks ended July 1, 2023.

Consolidated results of operations should be read in conjunction with segment results of operations.

Net sales increased by $69.6 million, or 6.7%, due to the benefit from the acquisition of the Acquired Businesses ($93.7 million) and higher sales in our international markets ($14.9 million), partially offset by higher customer sales incentives, lower sales unit volume in the U.S.

and unfavorable foreign exchange ($1.0 million).

Net sales increased by $145.8 million, or 6.6%, due to the benefit from the acquisitions of SpringWell and the Acquired Businesses ($202.7 million), partially offset by lower sales in our international markets ($37.0 million), higher customer sales incentives, and unfavorable foreign exchange ($4.4 million).

Cost of products sold

Cost of products sold decreased by $6.3 million, or .5%, due to raw material cost deflation, lower transportation costs and productivity improvements in all of our segments as a result of strategic sourcing initiatives and manufacturing efficiencies.

These factors were partially offset by the impact of the acquisition of the Acquired Businesses.

These factors were partially offset by the impact of the acquisitions of SpringWell and the Acquired Businesses.

Selling, general and administrative expenses

Selling, general and administrative expenses increased by $50.8 million, or 19.5%, due to higher headcount related costs and higher advertising and marketing costs mainly as a result of the acquisition of the Acquired Businesses in addition to higher corporate expenses.

Selling, general and administrative expenses increased by $89.6 million, or 16.5%, due to higher headcount related costs and higher advertising and marketing costs mainly as a result of the acquisitions of SpringWell and the Acquired Businesses.

Restructuring charges

Restructuring charges of $2.8 million in the thirteen weeks ended March 30, 2024 are largely related to costs associated with the previously announced planned closure of a manufacturing facility within our Security segment, a product line rationalization within our Outdoors segment and headcount actions across all segments.

Restructuring charges for the thirteen weeks ended April 1, 2023 were $3.1 million.

Restructuring charges of $6.7 million in the twenty-six weeks ended June 29, 2024 are largely related to costs associated with the previously announced planned closure of a manufacturing facility within our Security segment, a product line rationalization within our Outdoors segment and headcount actions across all segments.

Restructuring charges of $25.2 million in the twenty-six weeks ended July 1, 2023 are largely related to costs associated with the planned closure of a manufacturing facility within our Security segment and headcount actions across all segments.

Operating income

Operating income increased by $23.6 million, or 17.9%, primarily due to raw material cost deflation, lower transportation costs and productivity improvements in all of our segments as a result of strategic sourcing initiatives and manufacturing efficiencies, and the impacts of the acquisition of the Acquired Businesses.

These factors were partially offset by increased intangible amortization expense as a result of the acquisition of the Acquired Businesses ($5.2 million), higher customer sales incentives, higher headcount related costs, and unfavorable foreign exchange of approximately $1 million.

RESULTS OF OPERATIONS (Continued)

Operating income increased by $70.1 million, or 24.6%, primarily due to the impacts of the acquisitions of SpringWell and the Acquired Businesses, raw material cost deflation, lower transportation costs and productivity improvements in all of our segments as a result of strategic sourcing initiatives and manufacturing efficiencies.

These factors were partially offset by increased intangible amortization expense as a result of the acquisitions of SpringWell and the Acquired Businesses ($12.2 million), higher customer sales incentives, higher headcount related costs, and unfavorable foreign exchange of approximately $2.1 million.

Interest expense

Interest expense increased by $3.3 million to $30.1 million due to higher floating rate debt balances ($373.7 million outstanding as of March 30, 2024) and higher fixed rate debt interest rates with the issuance of the $600 million outstanding principal amount of 5.875% Senior Notes due in June 2033 relative to the maturity and settlement of the $600 million outstanding principal amount of 4.000% Senior Notes due in September 2023.

Other (income) expense, net

Other expense, net, was $0.1 million in the thirteen weeks ended March 30, 2024, compared to other income, net of $6.3 million in the thirteen weeks ended April 1, 2023.

Interest expense increased by $7.8 million to $62.4 million due to higher floating rate debt balances ($229.2 million outstanding as of June 29, 2024) and higher fixed rate debt interest rates with the issuance of the $600 million outstanding principal amount of 5.875% Senior Notes due in June 2033 relative to the maturity and settlement of the $600 million outstanding principal amount of 4.000% Senior Notes due in September 2023.

Other income, net

Other income, net, was $3.6 million in the twenty-six weeks ended June 29, 2024, compared to $11.6 million in the twenty-six weeks ended July 1, 2023.

The decrease in other income, net is primarily due to a decrease in foreign currency transaction income and interest income.

The effective income tax rates for the thirteen weeks ended March 30, 2024 and thirteen weeks ended April 1, 2023 were 23.0% and 23.1%, respectively.

The difference between the Company’s effective income tax rate for the thirteen weeks ended March 30, 2024, and the U.S.

statutory rate of 21% primarily relates to state income taxes and foreign income taxed at higher rates, partially offset by a valuation allowance release and tax credits.

The difference between the Company’s effective income tax rate for the thirteen weeks ended April 1, 2023, and the U.S.

statutory rate of 21% primarily relates to state income taxes, foreign income taxed at higher rates, partially offset by a favorable benefit related to decreases in uncertain tax positions and a valuation allowance release.

The effective income tax rates for the twenty-six weeks ended June 29, 2024 and twenty-six weeks ended July 1, 2023 were 22.2% and 22.2%, respectively.

The difference between the Company’s effective income tax rate for the twenty-six weeks ended June 29, 2024, and the U.S.

statutory rate of 21% primarily relates to state income taxes and foreign income taxed at higher rates, partially offset by a favorable benefit related to a valuation allowance release, decreases in uncertain tax positions, and tax credits.

The difference between the Company’s effective tax rate for the twenty-six weeks ended July 1, 2023, and the U.S.

federal statutory rate of 21% primarily relates to state income taxes (net of federal income tax benefits), foreign income taxed at higher rates, partially offset by a favorable benefit related to decreases in uncertain tax positions and a valuation allowance release.

Income from Continuing Operations, net of tax

Income from continuing operations, net of tax, was $96.4 million in the thirteen weeks ended March 30, 2024, compared to $85.6 million in the thirteen weeks ended April 1, 2023.

Income from continuing operations, net of tax, was $230.2 million in the twenty-six weeks ended June 29, 2024, compared to $187.7 million in the twenty-six weeks ended July 1, 2023.

The increase was due to higher operating income, partly offset by higher interest expense, higher income tax expense and lower other income.

Results By Segment

Net sales increased by $31.1 million, or 5.2%, due to the benefit from the acquisition of the Acquired Businesses ($67.6 million) partially offset by higher customer sales incentives, lower sales unit volume in the U.S.

and unfavorable foreign exchange ($1.2 million).

Operating income increased by $12.9 million, or 10.0%, primarily due to the benefit from the acquisition of the Acquired Businesses, productivity improvements as a result of strategic sourcing initiatives and manufacturing efficiencies, lower transportation costs and raw material cost deflation.

These factors were partially offset by increased intangible amortization expense due to the impact of the acquisition of the Acquired Businesses ($4.8 million) and higher headcount related costs.

Net sales increased by $73.6 million, or 6.1%, due to the benefit from the acquisitions of SpringWell and the Acquired Businesses ($144.4 million) partially offset by higher customer sales incentives, lower sales unit volume and unfavorable foreign exchange ($4.2 million).

Operating income increased by $21.7 million, or 8.0%, primarily due to the benefit from the acquisitions of SpringWell and the Acquired Businesses, productivity improvements as a result of strategic sourcing initiatives and manufacturing efficiencies, lower transportation costs and raw material cost deflation.

These factors were partially offset by increased intangible amortization expense due to the impact of the acquisitions of SpringWell and the Acquired Businesses ($10.4 million) and higher headcount related costs.

Net sales increased by $38.9 million, or 5.8%, due to higher sales unit volume for our exterior doors products, partially offset by higher customer sales incentives and unfavorable channel mix.

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Net sales increased by $33.3 million, or 10.2%, due to the benefit from the acquisition of the Acquired Businesses ($58.3 million), partially offset by lower sales unit volume.

Operating income decreased by $2.0 million, or 9.5%, due to lower sales unit volume and higher restructuring and other charges associated with the planned closure of a manufacturing facility, partially offset by productivity improvements as a result of strategic sourcing initiatives and manufacturing efficiencies, lower transportation costs and raw material cost deflation.

Corporate expenses increased by $8.6 million, or 28.0%, due to headcount related costs and costs related to our digital transformation efforts.

Operating income increased by $32.7 million, or 157.2%, due to the benefit from the acquisition of the Acquired Businesses, productivity improvements as a result of strategic sourcing initiatives and manufacturing efficiencies, partially offset by lower sales unit volume.

Corporate expenses decreased by $3.9 million, or 4.8%, due to nonrecurring costs related to the acquisition of the Acquired Businesses, partially offset by higher headcount related costs and costs related to our digital transformation efforts.

Thirteen Weeks Ended June 29, 2024 Compared To Thirteen Weeks Ended July 1, 2023

(In millions)

Operating Income (Loss)

Corporate expenses

Operating income

The following discussion of consolidated results of operations and segment results refers to the thirteen weeks ended June 29, 2024 compared to the thirteen weeks ended July 1, 2023.

Consolidated results of operations should be read in conjunction with segment results of operations.

Net sales increased by $76.3 million, or 6.6%, due to the benefit from the acquisitions of SpringWell and the Acquired Businesses ($106.2 million), partially offset by lower sales in our international markets ($47.3 million), higher customer sales incentives, and unfavorable foreign exchange ($3.6 million).

Cost of products sold

Cost of products sold increased by $3.4 million, or .5%, due to the impact of the acquisitions of SpringWell and the Acquired Businesses, partially offset by raw material cost deflation, lower transportation costs and productivity improvements in all of our segments as a result of strategic sourcing initiatives and manufacturing efficiencies.

Selling, general and administrative expenses

Selling, general and administrative expenses increased by $39 million, or 13.9%, due to higher headcount related costs and higher advertising and marketing costs mainly as a result of the acquisitions of SpringWell and the Acquired Businesses.

Restructuring charges

Restructuring charges of $3.9 million in the thirteen weeks ended June 29, 2024 are largely related to costs associated with the previously announced planned closure of a manufacturing facility within our Security segment, a product line rationalization within our Outdoors segment and headcount actions across all segments.

Restructuring charges of $22.2 million in the thirteen weeks ended July 1, 2023 are largely related to costs associated with the planned closure of a manufacturing facility within our Security segment.

Operating income

Operating income increased by $46.5 million, or 30.5%, primarily due to the impacts of the acquisitions of SpringWell and the Acquired Businesses, raw material cost deflation, and lower transportation costs and productivity improvements in all of our segments as a result of strategic sourcing initiatives and manufacturing efficiencies.

These factors were partially offset by increased intangible

amortization expense as a result of the acquisition of SpringWell and the Acquired Businesses ($6.1 million), higher customer sales incentives, higher headcount related costs, and unfavorable foreign exchange of approximately $1 million.

Interest expense

Interest expense increased by $4.6 million to $32.3 million due to higher floating rate debt balances ($229.2 million outstanding as of June 29, 2024) and higher fixed rate debt interest rates with the issuance of the $600 million outstanding principal amount of 5.875% Senior Notes due in June 2033 relative to the maturity and settlement of the $600 million outstanding principal amount of 4.000% Senior Notes due in September 2023.

Other income, net

Other income, net, was $3.7 million in the thirteen weeks ended June 29, 2024, compared to $5.2 million in the thirteen weeks ended July 1, 2023.

The decrease in other income, net is primarily due to a decrease in foreign currency transaction income and interest income.

The effective income tax rates for the thirteen weeks ended June 29, 2024 and thirteen weeks ended July 1, 2023 were 21.5% and 21.5%, respectively.

The difference between the Company’s effective income tax rate for the thirteen weeks ended June 29, 2024, and the U.S.

statutory rate of 21% primarily relates to state income taxes and foreign income taxed at higher rates, partially offset by a favorable benefit related decreases in uncertain tax positions and tax credits.

The difference between the Company’s effective income tax rate for the thirteen weeks ended July 1, 2023, and the U.S.

statutory rate of 21% primarily relates to state income taxes, foreign income taxed at higher rates, partially offset by a favorable benefit related to decreases in uncertain tax positions .

Income from Continuing Operations, net of tax

Income from continuing operations, net of tax, was $133.9 million in the thirteen weeks ended June 29, 2024, compared to $102.1 million in the thirteen weeks ended July 1, 2023.

The increase was due to higher operating income, partly offset by higher interest expense, higher income tax expense and lower other income.

Results By Segment

Net sales increased by $42.5 million, or 6.9%, due to the benefit from the acquisitions of SpringWell and the Acquired Businesses ($74.0 million) partially offset by lower sales unit volume and unfavorable foreign exchange ($3.1 million).

Operating income increased by $8.8 million, or 6.2%, primarily due to the benefit from the acquisitions of SpringWell and the Acquired Businesses, productivity improvements as a result of strategic sourcing initiatives and manufacturing efficiencies, lower transportation costs and raw material cost deflation.

These factors were partially offset by lower sales unit volume, increased intangible amortization expense due to the impact of the acquisition of SpringWell and the Acquired Businesses ($5.4 million), and higher headcount related costs.

Net sales increased by $13.8 million, or 3.7%, due to higher sales unit volume for our exterior doors products, partially offset by higher customer sales incentives and unfavorable channel mix.

Operating income decreased by $9.4 million, or 15.4%, due to higher restructuring and other charges related to a product line rationalization and higher headcount related costs.

These factors were partially offset by higher sales unit volume, productivity improvements as a result of strategic sourcing initiatives and manufacturing efficiencies, and raw material deflation.

Net sales increased by $20.0 million, or 11.7%, due to the benefit from the acquisition of the Acquired Businesses ($32.2 million) partially offset by lower sales unit volume.

Operating income increased by $34.8 million, due to the benefit from the acquisition of the Acquired Businesses, lower restructuring and other charges associated with the planned closure of a manufacturing facility, partially offset by lower sales unit volume.

Corporate expenses decreased by $12.3 million, or 24.5%, due to nonrecurring costs related to the acquisition of the Acquired Businesses, partially offset by higher headcount related costs and costs related to our digital transformation efforts.

LIQUIDITY AND CAPITAL RESOURCES

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Long-Term Debt

At March 30, 2024, the Company had aggregate outstanding notes in the principal amount of $2.7 billion, with varying maturities (the “Notes”).

At June 29, 2024, the Company had aggregate outstanding notes in the principal amount of $2.7 billion, with varying maturities (the “Notes”).

The Notes are unsecured senior obligations of the Company.

In addition, we believe that we have the ability to obtain alternative sources of financing if required.

The following table provides a summary of the Company’s outstanding Notes, including the net carrying value of the Notes, net of underwriting commissions, price discounts and debt issuance costs as of March 30, 2024 and December 30, 2023:

Net Carrying Value

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Maturity Date

March 30, 2024

June 29, 2024

December 30, 2023

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The maturity date of the facility is August 2027.

Interest rates under the Revolving Credit Agreement are variable based on SOFR at the time of the borrowing and the Company’s long-term credit rating and can range from SOFR + 1.02% to SOFR + 1.525%.

Interest rates under the Revolving Credit Agreement are variable based on Secured Overnight Financing Rate ("SOFR") at the time of the borrowing and the Company’s long-term credit rating and can range from SOFR + 1.02% to SOFR + 1.525%.

Under the Revolving Credit Agreement, the Company is required to maintain a minimum ratio of consolidated EBITDA to consolidated interest expense of 3.0 to 1.0.

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In addition, the Company's ratio of consolidated debt minus certain cash and cash equivalents to consolidated EBITDA generally may not exceed 3.5 to 1.0.

On March 30, 2024 and December 30, 2023, there were no outstanding borrowings under this facility.

As of March 30, 2024, we were in compliance with all covenants under this facility.

We currently have uncommitted bank lines of credit in China, which provide for unsecured borrowings for working capital of up to $30.5 million in aggregate as of March 30, 2024 and December 30, 2023, respectively.

There were no outstanding balances as of March 30, 2024 and December 30, 2023.

There were no outstanding borrowings under this facility as of June 29, 2024 and December 30, 2023.

As of June 29, 2024, we were in compliance with all covenants under this facility.

We currently have uncommitted bank lines of credit in China, which provide for unsecured borrowings for working capital of up to $30.5 million in aggregate as of June 29, 2024 and December 30, 2023, respectively.

There were no outstanding balances as of June 29, 2024 and December 30, 2023.

Commercial Paper

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Amounts available under the Commercial Paper Program may be borrowed, repaid and re-borrowed, with the aggregate principal amount outstanding at any time, including borrowings under the Revolving Credit Agreement, not to exceed $1.25 billion.

The Company will use any issuances under the Commercial Paper Program for general corporate purposes.

Outstanding borrowings under the Commercial Paper Program as of March 30, 2024 and December 30, 2023 were $373.7 million and zero, respectively.

The Company will use any issuances under the Commercial Paper Program

for general corporate purposes.

Outstanding borrowings under the Commercial Paper Program as of June 29, 2024 and December 30, 2023 were $229.2 million and zero, respectively.

Cash and Seasonality

On March 30, 2024, we had cash and cash equivalents of $359.7 million, of which $274.2 million was held at non-U.S.

On June 29, 2024, we had cash and cash equivalents of $352.6 million, of which $276.2 million was held at non-U.S.

subsidiaries.

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On January 29, 2024, the Company's Board of Directors authorized the repurchase of up to $650 million of shares of the Company’s outstanding common stock over the next two years on the open market or in privately negotiated transactions or otherwise (including pursuant to a Rule 10b5-1 trading plan, block trades and accelerated share repurchase transactions), in accordance with applicable securities laws.

In the thirteen weeks ended March 30, 2024, we repurchased 1.3 million shares of our outstanding common stock under the Company’s share repurchase program for $100.0 million.

As of March 30, 2024, the Company’s total remaining share repurchase authorization under its share repurchase program was approximately $624.8 million.

In the first twenty-six weeks of 2024, we repurchased 2.0 million shares of our outstanding common stock under the Company’s share repurchase program for $155.2 million.

As of June 29, 2024, the Company’s total remaining share repurchase authorization under its share repurchase program was approximately $570 million.

The share repurchase program does not obligate the Company to repurchase any specific dollar amount or number of shares and may be suspended or discontinued at any time.

In the thirteen weeks ended March 30, 2024, we paid dividends in the amount of $30.1 million to the Company’s stockholders.

In the first twenty-six weeks of 2024, we paid dividends in the amount of $60.2 million to the Company’s stockholders.

Our Board of Directors will continue to evaluate dividend payment opportunities on a quarterly basis.

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In June 2023, we acquired the Acquired Businesses from ASSA.

The Company completed the acquisition for a total purchase price of approximately $809.3 million, subject to post-closing adjustments, net of cash acquired of $16.3 million.

The Company completed the acquisition for a total purchase price of approximately $813.9 million, net of cash acquired of $21.9 million.

We financed the transaction with cash on hand.

As of the date of this filing, legal title to international operations in Vietnam has not yet transferred, but we expect a deferred closing, which will include a payment of approximately $23.5 million (which amount is already included in the overall purchase price but for which the cash payment has not yet been made), shortly following receipt of local regulatory approval.

In preparation for the deferred closing, $23.5 million is classified as restricted cash within Other current assets and the corresponding payable is included within Other current liabilities.

During the second quarter 2024, legal title to international operations in Vietnam transferred to us, which included a payment of approximately $23.5 million, net of cash of $5.6 million (which amount is already included in the overall purchase price).

The results of the Emtek and Schaub Business are reported as part of the Water segment and the results of the Yale and August Business are reported as part of the Security segment.

We periodically review our portfolio of brands and evaluate potential strategic transactions and other capital initiatives to increase stockholder value.

Below is a summary of cash flows for the thirteen weeks ended March 30, 2024 and the thirteen weeks ended April 1, 2023.

Below is a summary of cash flows for the twenty-six weeks ended June 29, 2024 and July 1, 2023.

'(In millions)

March 30, 2024

April 1, 2023

Net cash (used in) provided by operating activities

Twenty-Six Weeks Ended

June 29, 2024

Twenty-Six Weeks Ended July 1, 2023

Net cash provided by operating activities

Net cash used in investing activities

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Effect of foreign exchange rate changes on cash

Net decrease in cash and cash equivalents

Net cash used in operating activities was $71.3 million in the thirteen weeks ended March 30, 2024, compared to net cash provided by operating activities of $76.1 million in the thirteen weeks ended April 1, 2023.

The increase in cash used of $147.4 million was primarily due to an increase in inventory balances compared to the prior period as a result of our 2023 initiative to decrease inventory balances to align with the U.S.

home product market activity and increases in accounts receivables resulting from higher net sales, partially offset by increases in accounts payable.

Net cash used in investing activities was $169.8 million in the thirteen weeks ended March 30, 2024, compared to net cash used in investing activities of $42.6 million in the thirteen weeks ended April 1, 2023.

The increase in cash used of $127.2 million reflects the cash used in the SpringWell acquisition in February 2024 ($105.2 million) and an increase in capital expenditures.

Net cash provided by financing activities was $238.7 million in the thirteen weeks ended March 30, 2024, compared to cash used in financing activities of $139.3 million in the thirteen weeks ended April 1, 2023.

The increase in cash provided of $378 million was primarily due to net issuances under our commercial paper program ($375.0 million) and an increase in proceeds from the exercise of stock options.

Net (decrease) increase in cash and cash equivalents

Net cash provided by operating activities was $190.2 million in the twenty-six weeks ended June 29, 2024, compared to net cash provided by operating activities of $503.6 million in the twenty-six weeks ended July 1, 2023.

The decrease in cash provided of $313.4 million was primarily due to an increase in inventory balances compared to the prior period as result of our 2023 initiative to decrease inventory balances to align with the U.S.

home product market activity.

The $84.2 million settlement of our interest rate swaps in 2023 and decreased accrued expenses and other liabilities also contributed to the decrease in cash provided by operating activities.

The decrease in cash provided by operating activities was partially offset by higher net income in 2024.

Net cash used in investing activities was $230.2 million in the twenty-six weeks ended June 29, 2024, compared to net cash used in investing activities of $891.3 million in the twenty-six weeks ended July 1, 2023.

The decrease in cash used of $661.1 million reflects the acquisition of the Acquired Businesses for approximately $800 million in June 2023 as compared to the acquisition of SpringWell for $105.6 million in 2024.

Net cash provided by financing activities was $9.7 million in the twenty-six weeks ended June 29, 2024, compared to cash provided by financing activities of $427.8 million in the twenty-six weeks ended July 1, 2023.

The decrease in cash provided of $418.1 million was primarily due to higher net borrowings in 2024 as compared to 2023 ($365.1 million) and higher share repurchases in 2024 compared to 2023 ($50.2 million).

Pension Plans

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As of December 30, 2023, the fair value of our total pension plan assets was $468.0 million, representing funding of about 96% of the accumulated benefit obligation liability.

During the thirteen weeks ended March 30, 2024, we made no pension contributions.

During the twenty-six weeks ended June 29, 2024, we made no pension contributions.

For the foreseeable future, we believe that we have sufficient liquidity to meet the minimum funding that may be required by the Pension Protection Act of 2006.

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RECENTLY ISSUED ACCOUNTING STANDARDS

Refer to Note 2, "Recently Issued Accounting Standards," in Item 1 for discussion of recently issued accounting standards.

Refer to Note 2, "Recently Issued Accounting Standards," in Item 1 for a discussion of recently issued accounting standards..

QUANTITATIVE AND QUALITATI VE 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