What changed in this filing

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Item 1. Financial Statements

2020-07-31 compared with 2020-02-06 · 83 added, 199 removed, 317 unchanged (47% of the section changed)

7 unchanged sentences

Trade receivables — less allowance for doubtful accounts:

$677 as of December 29, 2019 and $620 as of March 31, 2019 56,046 63,966

$530 as of June 28, 2020 and $784 as of March 29, 2020 69,453 67,391

Inventories 63,389 54,436

Income taxes receivable 609 527

Prepaid expenses and other current assets 3,053 4,927

15 unchanged sentences

Accrued payroll and employee benefits 6,827 13,538

Income tax payable 4,323 59

Current portion of long-term debt 9,907 9,907

13 unchanged sentences

30,000,000 shares of $0.05 par value;

10,546,453 and 10,592,450 shares issued and outstanding as of December 29, 2019 and March 31, 2019, respectively 527 530

10,515,835 and 10,512,229 shares issued and outstanding as of June 28, 2020 and March 29, 2020, respectively 526 526

Additional paid-in capital 50,736 50,090

Retained earnings 192,256 182,947

Accumulated other comprehensive income 58 317

Accumulated other comprehensive loss ( 89 ) ( 79 )

Total shareholders’ equity 243,429 233,484

4 unchanged sentences

(In thousands, except share and per-share data)

Three Months Ended Nine Months Ended

2019 December 30,

2018 December 29,

2019 December 30,

Three Months Ended

2020 June 30,

Sales $ 143,172 $ 147,336

4 unchanged sentences

Interest expense, net ( 380 ) ( 763 )

Other income (expense) 131 ( 316 ) 274 ( 240 )

Other income 477 117

Income before income taxes 16,035 13,315

10 unchanged sentences

(In thousands)

Three Months Ended Nine Months Ended

2019 December 30,

2018 December 29,

2019 December 30,

Three Months Ended

2020 June 30,

Net income $ 11,788 $ 9,807

Other comprehensive income, net of tax:

Other comprehensive loss, net of tax:

Unrealized loss on interest rate swap ( 10 ) ( 179 )

10 unchanged sentences

BALANCE — March 29, 2020 10,512,229 $ 526 $ 50,090 $ 182,947 $ ( 79 ) $ 233,484

Cash dividends paid ( 2,460 ) ( 2,460 )

Cash dividends declared and paid ( 2,479 ) ( 2,479 )

Share-based compensation expense 700 700

1 unchanged sentence

Shares surrendered for payroll taxes ( 1,657 ) — ( 54 ) ( 54 )

Shares repurchased ( 47,136 ) ( 2 ) ( 1,801 ) ( 1,803 )

Other comprehensive income, net of tax ( 179 ) ( 179 )

Other comprehensive loss, net of tax ( 10 ) ( 10 )

Net income 11,788 11,788

BALANCE — June 28, 2020 10,515,835 $ 526 $ 50,736 $ 192,256 $ ( 89 ) $ 243,429

Cash dividends paid ( 2,445 ) ( 2,445 )

Share-based compensation expense 636 636

Vesting of restricted stock 8,352 — — —

ESPP shares issued 18,586 1 660 661

Shares repurchased ( 44,259 ) ( 2 ) ( 1,988 ) ( 1,990 )

Other comprehensive income, net of tax ( 69 ) ( 69 )

Net income 9,250 9,250

BALANCE — September 29, 2019 10,546,453 $ 527 $ 50,282 $ 178,557 $ 69 $ 229,435

Cash dividends paid ( 2,445 ) ( 2,445 )

Share-based compensation expense 685 685

Other comprehensive income, net of tax ( 11 ) ( 11 )

Net income 4,547 4,547

BALANCE — December 29, 2019 10,546,453 $ 527 $ 50,967 $ 180,659 $ 58 $ 232,211

Common Stock Additional

3 unchanged sentences

Shares Amount

BALANCE — April 1, 2018 10,631,992 $ 532 $ 53,877 $ 147,242 $ 596 $ 202,247

BALANCE — March 31, 2019 10,592,450 $ 530 $ 52,609 $ 164,405 $ 317 $ 217,861

Cash dividends declared and paid ( 2,460 ) ( 2,460 )

Share-based compensation expense 509 509

1 unchanged sentence

Shares surrendered for payroll taxes ( 9,160 ) ( 1 ) ( 342 ) ( 343 )

ESPP shares issued 22,531 1 676 677

Other comprehensive income, net of tax 27 27

Net income 9,123 9,123

BALANCE — July 1, 2018 10,670,985 $ 534 $ 54,757 $ 156,365 $ 623 $ 212,279

Cash dividends declared ( 2,412 ) ( 2,412 )

Share-based compensation expense 513 513

Vesting of restricted stock 8,484 — — —

Other comprehensive income, net of tax ( 15 ) ( 15 )

Net income 7,409 7,409

BALANCE — September 30, 2018 10,679,469 $ 534 $ 55,270 $ 161,362 $ 608 $ 217,774

Cash dividends declared ( 2,409 ) ( 2,409 )

Share-based compensation expense 591 591

Shares repurchased ( 47,136 ) ( 2 ) ( 1,801 ) ( 1,803 )

Other comprehensive income, net of tax ( 170 ) ( 170 )

Other comprehensive loss, net of tax ( 179 ) ( 179 )

Net income 9,807 9,807

BALANCE — December 30, 2018 10,619,681 $ 531 $ 53,478 $ 163,083 $ 438 $ 217,530

BALANCE — June 30, 2019 10,563,774 $ 528 $ 50,974 $ 171,752 $ 138 $ 223,392

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Nine Months Ended

2019 December 30,

Three Months Ended

2020 June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

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Operating leases 493 515

Amortization of debt issuance costs 70 98

(Gain) loss on deferred compensation assets ( 274 ) 240

Deferred income taxes — ( 82 )

Gain on deferred compensation assets ( 477 ) ( 117 )

Stock compensation expense 700 509

(Gain) loss from property disposals ( 112 ) 54

Changes in operating accounts providing (using) cash:

9 unchanged sentences

Purchases of property, plant, and equipment ( 4,848 ) ( 9,159 )

Other 326 167

Net cash used in investing activities ( 4,787 ) ( 9,096 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Cash dividends paid ( 7,350 ) ( 9,525 )

New shares issued 661 677

Cash dividends declared and paid ( 2,479 ) ( 2,460 )

Shares surrendered for payroll taxes ( 54 ) ( 343 )

Shares repurchased — ( 1,803 )

Net payments on revolver borrowings ( 17,000 ) 75,000

Payments on term loan borrowings — ( 85,000 )

Payments for debt issuance costs — ( 183 )

Net cash used in financing activities ( 27,825 ) ( 21,682 )

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ( 1,934 ) 2,310

Net proceeds from revolver borrowings 6,000 —

Net cash provided by (used in) financing activities 3,467 ( 4,606 )

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 233 ( 3,592 )

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 4,277 9,199

1 unchanged sentence

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid for income taxes $ 8,653 $ 5,100

Cash paid for interest $ 288 $ 756

10 unchanged sentences

All significant intercompany accounts and transactions have been eliminated in consolidation.

The results of operations for the nine months ended December 29, 2019 are not necessarily indicative of the results that may be expected for the full year.

References to fiscal 2018 refer to the fiscal year ended April 1, 2018, references to fiscal 2019 refer to the fiscal year ended March 31, 2019 and references to fiscal 2020 refer to the fiscal year ending March 29, 2020.

The results of operations for the three months ended June 28, 2020 are not necessarily indicative of the results that may be expected for the full year.

References to fiscal 2019 refer to the fiscal year ended March 31, 2019, references to fiscal 2020 refer to the fiscal year ended March 29, 2020 and references to fiscal 2021 refer to the fiscal year ending March 28, 2021.

Use of Estimates.

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The accounting policies we follow are set forth in Note 1 – Nature of Business and Significant Accounting Policies to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended March 29, 2020 , previously filed with the SEC.

With the exception of our accounting policy regarding leases (see below), there has been no significant change in our accounting policies since the end of fiscal 2019.

The Company determines if an arrangement is a lease at inception.

Right-of-use (“ROU”) assets include operating leases.

Lease liabilities for operating leases are classified in “short-term lease liabilities” and “long-term lease liabilities” in our condensed consolidated balance sheet.

Operating assets and liabilities are recognized at commencement date based on the present value of the lease payments over the lease term.

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

We use the implicit rate when readily determinable.

Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Lease and non-lease components are generally accounted for separately for real estate leases.

For non-real estate leases, we account for the lease and non-lease components as a single lease component.

Recently Issued Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments .

The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables.

This update is intended to provide financial statement users with more decision-useful information about the expected credit losses.

This ASU is effective for annual periods and interim periods for those annual periods beginning after December 15, 2019, which for us is our fiscal year beginning March 30, 2020.

Entities may early adopt beginning after December 15, 2018.

Upon adoption, we expect this ASU to impact our method for calculating and estimating our allowance for doubtful accounts, but do not expect it to have a material impact to our financial position or results of operations.

There has been no significant change in our accounting policies since the end of fiscal 2020.

Recently Adopted Accounting Pronouncements

On April 1, 2019, we adopted ASU 2016-02, Leases, which provides new accounting guidance requiring lessees to recognize most leases as assets and liabilities on the balance sheet and disclose key information about leasing arrangements.

The new standard establishes a ROU model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months.

Leases will be classified as finance or operating, with classification affecting the pattern and expense recognition in the income statement.

We adopted this ASU using the modified retrospective method.

See Note 11 to the condensed consolidated financial statements for further details.

On March 30, 2020, we adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments .

The amendments in this update replaced the incurred loss impairment methodology in previous GAAP with a methodology that reflects expected credit losses on instruments within its scope, including trade receivables.

This update is intended to provide financial statement users with more decision-useful information about the expected credit losses.

Our adoption of this ASU impacted our method for calculating and estimating our allowance for doubtful accounts but did not have a material impact to our financial position or results of operations.

Note 2 - Revenue

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Types of products sold within each operating segment help us to further evaluate the financial performance of our segments.

The following tables disaggregate external customer net sales by major revenue stream for the three and nine months ended December 29, 2019 and December 30, 2018:

Three months ended December 29, 2019

(In thousands) Industrial Water

Treatment Health and

Nutrition Total

Bulk / Distributed specialty products (1)

$ 11,615 $ 4,280 $ 19,186 $ 35,081

Manufactured, blended or repackaged products (2)

50,547 30,251 3,218 84,016

Other 856 359 94 1,309

Total external customer sales $ 63,018 $ 34,890 $ 22,498 $ 120,406

Three months ended December 30, 2018

(In thousands) Industrial Water

Treatment Health and

Nutrition Total

Bulk / Distributed specialty products (1)

$ 15,740 $ 5,195 $ 22,933 $ 43,868

Manufactured, blended or repackaged products (2)

52,130 27,189 3,355 82,674

Other 1,156 356 97 1,609

Total external customer sales $ 69,026 $ 32,740 $ 26,385 $ 128,151

Nine months ended December 29, 2019

The following tables disaggregate external customer net sales by major revenue stream for the three months ended June 28, 2020 and June 30, 2019:

Three months ended June 28, 2020

(In thousands) Industrial Water

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Total external customer sales $ 71,502 $ 39,714 $ 31,956 $ 143,172

Nine months ended December 30, 2018

Three months ended June 30, 2019

(In thousands) Industrial Water

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Note 3 – Earnings per Share

Basic earnings per share (“EPS”) are computed by dividing net earnings by the weighted-average number of common shares outstanding.

Basic earnings per share (“EPS”) is computed by dividing net earnings by the weighted-average number of common shares outstanding.

Diluted EPS includes the dilutive impact of incremental shares assumed to be issued as performance units and restricted stock.

Basic and diluted EPS were calculated using the following:

Three Months Ended Nine Months Ended

2019 December 30,

2018 December 29,

2019 December 30,

Three Months Ended

2020 June 30,

Weighted-average common shares outstanding—basic 10,515,728 10,604,306

1 unchanged sentence

Weighted-average common shares outstanding—diluted 10,642,673 10,665,709

For each of the three and nine months ended December 29, 2019 and December 30, 2018, there were no shares excluded from the calculation of weighted-average common shares for diluted EPS.

For each of the periods presented, there were no shares excluded from the calculation of weighted-average common shares for diluted EPS.

Note 4 – Derivative Instruments

5 unchanged sentences

For so long as the hedge is effective, changes in fair value of the cash flow hedge are recorded in other comprehensive income (net of tax) until income or loss from the cash flows of the hedged item is realized.

For the three months ended December 29, 2019, we recorded a nominal amount in other comprehensive loss related to unrealized losses (net of tax) on the cash flow hedge described above.

For the nine months ended December 29, 2019, we recorded $ 0.3 million in other comprehensive loss related to unrealized losses (net of tax) on the cash flow hedge.

For both the three and nine months ended December 30, 2018, we recorded $ 0.2 million in other comprehensive loss related to unrealized losses (net of tax) on the cash flow hedge.

Included in prepaid expenses and other current assets on our condensed consolidated balance sheet was $ 0.1 million as of December 29, 2019 related to the cash flow hedge.

As of March 31, 2019, $ 0.4 million was included in other long-term assets on our condensed consolidated balance sheet related to the cash flow hedge.

For the three months ended June 28, 2020, we recorded a nominal amount in other comprehensive loss related to unrealized losses (net of tax) on the cash flow hedge described above.

For the three months ended June 30, 2019, we recorded $ 0.2 million in other comprehensive loss related to unrealized losses (net of tax) on the cash flow hedge.

Included in other current liabilities on our condensed consolidated balance sheet was $ 0.1 million as of June 28, 2020 and March 29, 2020.

Unrealized gains and losses will be reflected in net income when the related cash flows or hedged transactions occur and offset the related performance of the hedged item.

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Our financial assets that are measured at fair value on a recurring basis are an interest rate swap and assets held in a deferred compensation retirement plan.

The interest rate swap is classified as prepaid expenses and other current assets on our balance sheet as of December 29, 2019.

The deferred compensation retirement plan assets are classified as other long-term assets on our balance sheet, with the portion of the deferred compensation retirement plan assets expected to be paid within twelve months classified as other current assets.

As of June 28, 2020, the assets held in a deferred compensation retirement plan are classified as other long-term assets on our balance sheet, with the portion of the plan assets expected to be paid within twelve months classified as current assets and the interest rate swap is classified as other current liabilities on our balance sheet.

The fair value of the interest rate swap is determined by the respective counterparties based on interest rate changes.

Interest rate swaps are valued based on observable interest rate yield curves for similar instruments.

The deferred compensation plan assets relate to contributions made to a non-qualified compensation plan on behalf of certain employees who are classified as “highly compensated employees” as determined by IRS guidelines.

The deferred compensation plan

assets relate to contributions made to a non-qualified compensation plan on behalf of certain employees who are classified as “highly compensated employees” as determined by IRS guidelines.

The assets are part of a rabbi trust and the funds are held in mutual funds.

The fair value of the deferred compensation is based on the quoted market prices for the mutual funds at the end of the period.

The following tables summarize the balances of assets measured at fair value on a recurring basis as of December 29, 2019 and March 31, 2019.

December 29, 2019

(In thousands) Level 1 Level 2 Level 3

Interest rate swap — $ 80 —

Deferred compensation plan assets $ 4,138 — —

March 31, 2019

(In thousands) Level 1 Level 2 Level 3

Interest rate swap — $ 435 —

Deferred compensation plan assets $ 2,637 — —

The following tables summarize the balances of assets and liabilities measured at fair value on a recurring basis as of June 28, 2020 and March 29, 2020.

(In thousands) June 28, 2020 March 29, 2020

Deferred compensation plan assets Level 1 $ 5,279 $ 3,564

Interest rate swap Level 2 $ 122 $ 108

Note 6– Assets Held for Sale

In fiscal 2019, management entered into a plan of action to dispose of an office building in St.

Louis, Missouri currently utilized in the administration of our Industrial segment.

The amount of office space in this facility is no longer needed due to current staffing levels, and management expects to relocate affected employees to leased space.

The building is listed for sale at a price in excess of its current book value, and thus no impairment has been recognized.

The $ 0.9 million net book value of this property is recorded as an asset held for sale within “Prepaid expenses and other current assets” on our balance sheet.

In the first quarter of fiscal 2021, management determined that an office building that was previously held for sale no longer met the criteria to be classified as such.

As a result, the $ 0.9 million net book value was reclassified out of “Prepaid expenses and other current assets” and is now classified as held and used within Property, Plant and Equipment on our balance sheet.

Note 7 – Inventories

Inventories at December 29, 2019 and March 31, 2019 consisted of the following:

Inventories at June 28, 2020 and March 29, 2020 consisted of the following:

2020 March 29,

3 unchanged sentences

Net inventory $ 63,389 $ 54,436

The first in, first out (“FIFO”) value of inventories accounted for under the last in, first out (“LIFO”) method was $ 43.7 million at December 29, 2019 and $ 45.2 million at March 31, 2019.

The first in, first out (“FIFO”) value of inventories accounted for under the last in, first out (“LIFO”) method was $ 46.7 million at June 28, 2020 and $ 43.3 million at March 29, 2020.

The remainder of the inventory was valued and accounted for under the FIFO method.

The LIFO reserve decreased $ 0.3 million during the three months ended December 29, 2019 and decreased $ 0.5 million during the three months ended December 30, 2018.

During the nine months ended December 29, 2019, the LIFO reserve decreased $ 0.6 million and decreased no minally during the nine months ended December 30, 2018.

The valuation of LIFO inventory for interim periods is based on our estimates of year-end inventory levels and costs.

Note 8 – Goodwill and Intangible Assets

The carrying amount of goodwill was $ 58.4 million as of December 29, 2019 and March 31, 2019, of which $ 44.9 million was related to our Health and Nutrition segment, $ 7.0 million was related to our Water Treatment segment, and $ 6.5 million was related to our Industrial segment.

A summary of our intangible assets as of December 29, 2019 and March 31, 2019 is as follows:

December 29, 2019 March 31, 2019

The carrying amount of goodwill was $ 58.4 million as of June 28, 2020 and March 29, 2020, of which $ 44.9 million was related to our Health and Nutrition segment, $ 7.0 million was related to our Water Treatment segment, and $ 6.5 million was related to our Industrial segment.

A summary of our intangible assets as of June 28, 2020 and March 29, 2020 is as follows:

June 28, 2020 March 29, 2020

(In thousands) Gross

11 unchanged sentences

Note 9 – Debt

Debt at December 29, 2019 and March 31, 2019 consisted of the following:

Debt at June 28, 2020 and March 29, 2020 consisted of the following:

2020 March 29,

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income tax jurisdictions.

Our effective tax rate for the nine months ended December 29, 2019 was 26.6 % and was 26.8 % for the nine months ended December 30, 2018.

Our effective tax rate for the three months ended June 28, 2020 was 26.5 % and was 26.3 % for the three months ended June 30, 2019.

The effective tax rate is impacted by projected levels of annual taxable income, permanent items, and state taxes.

Note 11 – Leases

Adoption of ASU 2016-02, Leases.

On April 1, 2019, we adopted ASU 2016-02 using the modified retrospective method applied to existing leases in place as of April 1, 2019.

Leases entered into after April 1, 2019 are presented under the provisions of ASU 2016-02, while prior periods are not adjusted and continue to be reported in accordance with previous accounting guidance.

Leases commencing or renewing after the adoption date are evaluated based on the guidance in ASU 2016-02 and may result in more finance leases being recognized even for the renewal of previously classified operating leases.

We elected to adopt the ‘package of practical expedients’, which permitted us not to reassess under the new standard our prior conclusions about lease identification, lease classification and initial direct costs.

We elected the short-term lease recognition exemption for all leases that qualified.

This means, for those leases that qualified, we did not recognize right-of-use assets or lease liabilities, and this included not recognizing right-of-use assets or lease liabilities for existing short-term leases of those assets in transition.

We also elected the practical expedient to not separate lease and non-lease components for all leases other than leases of real estate, and this included not separating lease and non-lease components for all leases other than leases of real estate in transition.

We adopted ASU 2016-02 using the modified retrospective method, recognizing the cumulative effect of application as an adjustment to the opening balance sheet.

The standard had a material impact on our condensed consolidated balance sheet, but did not have a material impact on our condensed consolidated statement of income or cash flows.

The most significant impact was the recognition of the ROU asset and lease liabilities for operating leases, both of which were approximately $ 10.4 million upon adoption.

Lease Obligations.

As of December 29, 2019, we were obligated under operating lease agreements for certain manufacturing facilities, warehouse space, the land on which some of our facilities sit, vehicles and information technology equipment.

As of June 28, 2020, we were obligated under operating lease agreements for certain manufacturing facilities, warehouse space, the land on which some of our facilities sit, vehicles and information technology equipment.

Our leases have remaining lease terms of 1 year to 24 years, some of which include options to extend the lease for up to 10 years .

As of December 29, 2019, our operating lease components with initial or remaining terms in excess of one year were classified on the condensed consolidated balance sheet within right of use assets, short-term lease liability and long-term lease liability.

Expense for leases less than 12 months for the three and nine months ended December 29, 2019 was no t material.

Total lease expense was $ 0.7 million for the three months ended December 29, 2019 and $ 2.2 million for the nine months ended December 29, 2019.

As of June 28, 2020, our operating lease components with initial or remaining terms in excess of one year were classified on the condensed consolidated balance sheet within right of use assets, short-term lease liability and long-term lease liability.

Expense for leases less than 12 months for the three months ended June 28, 2020 was no t material.

Total lease expense was $ 0.7 million for the three months ended June 28, 2020 and June 30, 2019.

Other information related to our operating leases was as follows:

December 29, 2019

June 28, 2020

Lease Term and Discount Rate

1 unchanged sentence

Weighted average discount rate 4.0 %

Maturities of lease liabilities as of December 29, 2019 were as follows:

Maturities of lease liabilities as of June 28, 2020 were as follows:

(In thousands) Operating Leases

8 unchanged sentences

Present value of lease liabilities $ 8,799

As we have not restated prior year information for our adoption of ASC Topic 842, the following represents our future minimum lease payments for operating leases under ASC Topic 840 on March 31, 2019:

(In thousands) Operating Leases

Fiscal 2020 $ 2,198

Fiscal 2021 1,783

Fiscal 2022 1,407

Fiscal 2023 1,352

Fiscal 2024 1,183

Thereafter 5,473

Total $ 13,396

Note 12 – Share-Based Compensation

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We are recording the compensation expense for the outstanding performance share units and the converted restricted stock over the life of the awards.

The following table represents the restricted stock activity for the nine months ended December 29, 2019:

The following table represents the restricted stock activity for the three months ended June 28, 2020:

Shares Weighted-

5 unchanged sentences

Unvested at end of period 134,065 $ 35.88

We recorded compensation expense related to performance share units and restricted stock of $ 0.5 million and $ 1.3 million for the three and nine months ended December 29, 2019, respectively.

We recorded compensation expense related to performance share units and restricted stock of $ 0.4 million and $ 1.0 million for the three and nine months ended December 30, 2018, respectively.

We recorded compensation expense related to performance share units and restricted stock of $ 0.5 million for the three months ended June 28, 2020 and $ 0.3 million the three months ended June 30, 2019.

Substantially all of the compensation expense was recorded in selling, general and administrative expenses in the condensed consolidated statements of income.

2 unchanged sentences

The restricted stock awards are expensed over the requisite vesting period, which is one year from the date of issuance, based on the market value on the date of grant.

As of December 29, 2019, there were 8,008 shares of restricted stock with a grant date fair value of $ 43.67 outstanding under this program.

Compensation expense for both the three months ended December 29, 2019 and December 30, 2018 related to restricted stock awards to the Board was $ 0.1 million.

Compensation expense for both the nine months ended December 29, 2019 and December 30, 2018 related to restricted stock awards to the Board was $ 0.2 million.

As of June 28, 2020, there were 8,008 shares of restricted stock with a grant date fair value of $ 43.67 outstanding under this program.

Compensation expense for both the three months ended June 28, 2020 and June 30, 2019 related to restricted stock awards to the Board was $ 0.1 million.

Note 13 – Share Repurchase Program

1 unchanged sentence

Upon purchase of the shares, we reduce our common stock for the par value of the shares with the excess applied against additional paid-in capital.

During the three months ended December 29, 2019, no shares were repurchased.

During the nine months ended December 29, 2019, we repurchased 91,395 shares at an aggregate purchase price of $ 3.8 million.

During the three and nine months ended December 30, 2018, we repurchased 59,788 shares at an aggregate purchase price of $ 2.4 million.

As of December 29, 2019, 412,985 shares remained available to be repurchased under the share repurchase program.

During the three months ended June 28, 2020, no shares were repurchased.

During the three months ended June 30, 2019, we repurchased 47,136 shares at an aggregate purchase price of $ 1.8 million.

As of June 28, 2020, 358,797 shares remained available to be repurchased under the share repurchase program.

Note 14 – Litigation, Commitments and Contingencies

2 unchanged sentences

Environmental Remediation.

During fiscal 2018, we recorded a liability of $ 0.6 million related to estimated remediation expenses associated with existing contamination at our Minneapolis facility.

The liability is being reduced as we incur costs related to remediation efforts, and was $ 0.1 million as of December 29, 2019 and $ 0.4 million as of March 31, 2019.

During fiscal 2018, we recorded a liability of $ 0.6 million related to estimated remediation expenses associated with existing trichloroethylene contamination at our Minneapolis facility.

The liability was decreased to $ 0.1 million as of June 28, 2020 and March 29, 2020, to reflect payments made and management’s revised expectations related to the cost of this environmental remediation.

The liability is not discounted as management expects to incur these expenses within the next twelve months.

Given the many uncertainties involved in assessing environmental claims, our reserves may prove to be insufficient.

While it is possible that additional expenses related to remediation will be incurred in future periods if currently unknown issues arise, we are unable to estimate the extent of any further financial impact at this time.

Note 15 – Segment Information

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Industrial, Water Treatment, and Health and Nutrition.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies in our fiscal 2019 Annual Report on Form 10-K.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies in our Annual Report on Form 10-K for the fiscal year ended March 29, 2020 .

We evaluate performance based on profit or loss from operations before income taxes not including nonrecurring gains and losses.

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Treatment Health and Nutrition Total

Three months ended December 29, 2019:

Sales $ 63,018 $ 34,890 $ 22,498 $ 120,406

Gross profit 8,418 8,362 4,698 21,478

Selling, general, and administrative expenses 6,050 4,834 3,818 14,702

Operating income 2,368 3,528 880 6,776

Three months ended December 30, 2018:

Sales $ 69,026 $ 32,740 $ 26,385 $ 128,151

Gross profit 8,288 7,643 5,102 21,033

Selling, general, and administrative expenses 5,589 4,582 4,141 14,312

Operating income 2,699 3,061 961 6,721

Nine months ended December 29, 2019:

Three months ended June 28, 2020:

Sales $ 71,502 $ 39,714 $ 31,956 $ 143,172

2 unchanged sentences

Operating income 6,390 6,046 3,502 15,938

Nine months ended December 30, 2018:

Three months ended June 30, 2019:

Sales $ 75,325 $ 43,252 $ 28,759 $ 147,336

2 unchanged sentences

Operating income 4,819 7,103 2,039 13,961

No significant changes to identifiable assets by segment occurred during the nine months ended December 29, 2019.

No significant changes to identifiable assets by segment occurred during the three months ended June 28, 2020.

Note 16 – Subsequent Events

On July 28, 2020, we acquired substantially all the assets of American Development Corporation of Tennessee, Inc.

(“ADC”) for $ 25 million under the terms of an asset purchase agreement among us, ADC and the ADC shareholders.

ADC is a water treatment chemical distribution company focused largely in Tennessee, Georgia and Kentucky.

The results of operations and the assets, including the goodwill associated with this acquisition, will be included as part of our Water Treatment segment from the date of acquisition forward.

The purchase accounting for this acquisition has not yet been completed.

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

What changed 10-Q

Item 1. Financial Statements