What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-07-29 compared with 2021-01-28 · 66 added, 189 removed, 301 unchanged (46% of the section changed)

6 unchanged sentences

Cash and cash equivalents $ 5,222 $ 2,998

Trade receivables — less allowance for doubtful accounts:

$ 549 as of December 27, 2020 and $ 784 as of March 29, 2020

76,822 67,391

Trade accounts receivables, net 90,936 90,603

Inventories 67,943 63,864

17 unchanged sentences

Accrued payroll and employee benefits 8,354 18,048

Income tax payable 5,218 —

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

14 unchanged sentences

60,000,000 shares of $ 0.01 par value;

10,462,159 and 10,512,229 shares issued and outstanding as of December 27, 2020 and March 29, 2020, respectively

20,946,404 and 20,969,746 shares issued and outstanding as of June 27, 2021 and March 28, 2021, respectively

Additional paid-in capital 47,069 51,138

Retained earnings 227,926 213,898

Accumulated other comprehensive loss — ( 79 )

Total shareholders’ equity 275,205 265,246

4 unchanged sentences

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

Three Months Ended Nine Months Ended

2020 December 29,

2019 December 27,

2020 December 29,

Three Months Ended

2021 June 28,

Sales $ 181,241 $ 143,172

17 unchanged sentences

(In thousands)

Three Months Ended Nine Months Ended

2020 December 29,

2019 December 27,

2020 December 29,

Three Months Ended

2021 June 28,

Net income $ 16,628 $ 11,788

Other comprehensive loss, net of tax:

Unrealized gain (loss) on interest rate swap 50 ( 11 ) 79 ( 259 )

Unrealized loss on interest rate swap — ( 10 )

Total comprehensive income $ 16,628 $ 11,778

13 unchanged sentences

Shares surrendered for payroll taxes ( 45,390 ) — ( 1,467 ) — — ( 1,467 )

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 declared and paid ( 2,480 ) ( 2,480 )

Share-based compensation expense 686 686

Vesting of restricted stock 8,008 — — —

ESPP shares issued 21,360 1 772 773

Other comprehensive income, net of tax 39 39

Net income 12,190 12,190

BALANCE — September 27, 2020 10,545,203 $ 527 $ 52,194 $ 201,966 $ ( 50 ) $ 254,637

Cash dividends declared and paid ( 2,471 ) ( 2,471 )

Share-based compensation expense 917 917

Shares repurchased ( 100,954 ) ( 1 ) ( 3,400 ) — — ( 3,401 )

Other comprehensive income, net of tax 50 50

Net income — — — 16,628 — 16,628

BALANCE — December 27, 2020 10,462,159 $ 523 $ 48,975 $ 207,416 $ — $ 256,914

BALANCE — June 27, 2021 20,946,404 $ 210 $ 47,069 $ 227,926 $ — $ 275,205

Common Stock Additional

8 unchanged sentences

Shares surrendered for payroll taxes ( 3,314 ) — ( 54 ) — — ( 54 )

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

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

1 unchanged sentence

BALANCE — June 28, 2020 21,031,670 $ 211 $ 51,051 $ 192,256 $ ( 89 ) $ 243,429

Cash dividends declared and 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 loss, 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 declared and 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

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Nine Months Ended

2020 December 29,

Three Months Ended

2021 June 28,

CASH FLOWS FROM OPERATING ACTIVITIES:

5 unchanged sentences

Stock compensation expense 799 700

Other 170 ( 42 )

Changes in operating accounts providing (using) cash:

9 unchanged sentences

Purchases of property, plant, and equipment ( 2,155 ) ( 4,848 )

Acquisitions, net of cash acquired ( 35,017 ) —

Other 154 326

Net cash used in investing activities ( 2,129 ) ( 4,787 )

1 unchanged sentence

Cash dividends declared and paid ( 2,600 ) ( 2,479 )

New shares issued 773 661

Shares surrendered for payroll taxes ( 1,467 ) ( 54 )

Shares repurchased ( 3,401 ) —

Net proceeds from (payments on) revolving loan 36,000 ( 17,000 )

Net cash provided by (used in) financing activities 25,149 ( 27,825 )

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,692 ( 1,934 )

Net (payments on) proceeds from revolving loan ( 3,000 ) 6,000

Net cash (used in) provided by financing activities ( 10,468 ) 3,467

NET INCREASE IN CASH AND CASH EQUIVALENTS 2,224 233

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,998 4,277

1 unchanged sentence

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid for income taxes $ 12,345 $ 8,653

Cash paid for interest $ 292 $ 288

10 unchanged sentences

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

The results of operations for the nine months ended December 27, 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.

The results of operations for the three months ended June 27, 2021 are not necessarily indicative of the results that may be expected for the full year.

References to fiscal 2020 refer to the fiscal year ended March 29, 2020, references to fiscal 2021 refer to the fiscal year ended March 28, 2021 and references to fiscal 2022 refer to the fiscal year ending April 3, 2022.

Use of Estimates.

4 unchanged sentences

There has been no significant change in our accounting policies since the end of fiscal 2021.

Recently Adopted Accounting Pronouncements

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 — Acquisitions

Acquisition of C&L Aqua Professionals, Inc.

and LC Blending, Inc.

In the fourth quarter of fiscal 2021, we acquired substantially all the assets of C&L Aqua Professionals, Inc.

and LC Blending, Inc.

(together, "C&L Aqua") under the terms of an asset purchase agreement among us, C&L Aqua and its shareholders.

We paid $ 16 million for the acquisition, using funds available under our revolving credit facility to fund the acquisition.

C&L Aqua was a water treatment chemical distribution company operating primarily in Louisiana.

The results of operations since the acquisition date, and the assets, including the goodwill associated with this acquisition, are included in our Water Treatment segment.

Costs associated with this transaction were not material and were expensed as incurred.

Acquisition of Property :

In the third quarter of fiscal 2021, we acquired a manufacturing facility on 28 acres located adjacent to our facility in Rosemount, Minnesota to allow further expansion and growth in both our Industrial and Water Treatment segments.

We paid $ 10 million for the property.

The purchase of this facility added approximately 40,000 square feet of manufacturing and warehouse space to bring us to a total of 105,000 square feet of space on 56 acres of land in the area, with rail access at both of the sites to allow for future growth and provide for supply chain flexibility on certain raw materials to better serve our customers.

Acquisition of American Development Corporation of Tennessee, Inc.

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

In the second quarter of fiscal 2021, we acquired substantially all the assets of American Development Corporation of Tennessee, Inc.

(“ADC”) under the terms of an asset purchase agreement among us, ADC and its shareholders.

1 unchanged sentence

Bank National Association to fund the acquisition.

ADC is a water treatment chemical distribution company operating primarily in Tennessee, Georgia and Kentucky.

ADC was a water treatment chemical distribution company operating primarily in Tennessee, Georgia and Kentucky.

The results of operations since the acquisition date, and the assets, including the goodwill associated with this acquisition, are included in our Water Treatment segment.

Costs associated with this transaction were not material and were expensed as incurred.

The acquisition has been accounted for as a business combination, under which the total purchase price is allocated to the net tangible and intangible assets and liabilities of ADC acquired in connection with the acquisition based on their estimated fair values.

We estimated the fair values of the assets acquired and liabilities assumed using a discounted cash flow analysis (income approach).

Of the $ 25 million purchase price, we allocated $ 13.3 million to finite-lived intangible assets, primarily customer relationships to be amortized over 17 years, $ 1.6 million to property, plant and equipment, and $ 0.9 million to net working capital.

The residual amount of $ 9.2 million was allocated to goodwill.

The goodwill recognized as a result of this acquisition is primarily attributable to strategic and synergistic benefits, as well as the assembled workforce.

Such goodwill is expected to be deductible for tax purposes.

The purchase price allocation is final.

Acquisition of Property :

On December 16, 2020, we acquired a manufacturing facility on 28 acres located adjacent to our facility in Rosemount, Minnesota to allow further expansion and growth in both our Industrial and Water Treatment segments.

We paid $ 10 million for the property.

The purchase of this facility adds approximately 40,000 square feet of manufacturing and warehouse space to bring us to a total of 105,000 square feet of space on 56 acres of land in the area, with

rail access at both of the sites to allow for future growth and provide for supply chain flexibility on certain raw materials to better serve the customer.

This acquisition has been accounted for as a property purchase.

Note 3 - Revenue

3 unchanged sentences

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 27, 2020 and December 29, 2019:

Three months ended December 27, 2020

(In thousands) Industrial Water

Treatment Health and

Nutrition Total

Bulk / Distributed specialty products (1)

$ 10,016 $ 3,896 $ 27,839 $ 41,751

Manufactured, blended or repackaged products (2)

53,501 35,129 11,577 100,207

Other 839 273 ( 143 ) 969

Total external customer sales $ 64,356 $ 39,298 $ 39,273 $ 142,927

Three months ended December 29, 2019

(In thousands) Industrial Water

Treatment Health and

Nutrition Total

Bulk / Distributed specialty products (1)

$ 11,562 $ 4,280 $ 19,115 $ 34,957

Manufactured, blended or repackaged products (2)

50,600 30,251 3,199 84,050

Other 856 359 184 1,399

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

Nine months ended December 27, 2020

The following tables disaggregate external customer net sales by major revenue stream for the three and three months ended June 27, 2021 and June 28, 2020:

Three months ended June 27, 2021

(In thousands) Industrial Water

7 unchanged sentences

Total external customer sales $ 85,850 $ 56,238 $ 39,153 $ 181,241

Nine months ended December 29, 2019

Three months ended June 28, 2020

(In thousands) Industrial Water

11 unchanged sentences

For our Health and Nutrition segment, this line includes products manufactured, processed or repackaged in our facility and/or with our equipment.

Net sales include products and shipping charges, net of estimates for product returns and any related sales rebates.

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products.

All revenue is recognized when we satisfy our performance obligations under the contract.

Our criteria for recording revenue is consistent between our operating segments and types of products sold.

We recognize revenue upon transfer of control of the promised products to the customer, with revenue recognized at the point in time the customer obtains control of the products.

In arrangements where product is shipped directly from the vendor to our customer, we act as the principal in the transaction as we direct the other party to provide the product to our customer on our behalf, take inventory risk, establish the selling price, and are exposed to credit risk for the collection of the invoiced amount.

If there were circumstances where we were to manufacture products for customers that were unique to their specifications and we would be prohibited by contract to use the product for any alternate use, we would recognize revenue over time if all criteria were met.

We have made a policy election to treat shipping costs for FOB shipping point sales as fulfillment costs.

As such, we recognize revenue for all shipping charges, if applicable, at the same time we recognize revenue on the products delivered.

We estimate product returns based on historical return rates.

Using probability assessments, we estimate sales rebates expected to be paid over the term of the contract.

The majority of our contracts have a single performance obligation and are short term in nature.

Sales taxes that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales.

We offer certain customers cash discounts and volume rebates as sales incentives.

The discounts and volume rebates are recorded as a reduction in sales at the time revenue is recognized in an amount estimated based on historical experience and contractual obligations.

We periodically review the assumptions underlying our estimates of discounts and volume rebates and adjust revenues accordingly.

Note 4 – Earnings per Share

2 unchanged sentences

Basic and diluted EPS were calculated using the following:

Three Months Ended Nine Months Ended

December 27, 2020 December 29, 2019 December 27, 2020 December 29, 2019

Three Months Ended

June 27, 2021 June 28, 2020

Weighted-average common shares outstanding—basic 21,034,302 21,031,456

2 unchanged sentences

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

Note 5 – Derivative Instruments

We had an interest rate swap agreement to manage the risk associated with a portion of our variable-rate long-term debt.

We do not utilize derivative instruments for speculative purposes.

The interest rate swap involves the exchange of fixed-rate and variable-rate payments without the exchange of the underlying no tional amount on which the interest payments are calculated.

The $ 20 million swap agreement terminated on December 23, 2020.

We had designated this swap as a cash flow hedge and determined that it qualified for hedge accounting treatment.

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

For the three and nine months ended December 27, 2020, we recorded $ 0.1 million in other comprehensive income related to unrealized gains (net of tax) on the cash flow hedge described above.

For the three months ended December 29, 2019, we recorded a no minal amount in other comprehensive loss related to unrealized losses (net of tax) on the cash flow hedge.

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.

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

The interest rate swap ended on December 23, 2020, and is therefore no longer recorded on our balance sheet.

By their nature, derivative instruments are subject to market risk.

Derivative instruments are also subject to credit risk associated with counterparties to the derivative contracts.

Credit risk associated with derivatives is measured based on the replacement cost should the counterparty with a contract in a gain position to us fail to perform under the terms of the contract.

We do not anticipate nonperformance by the counterparty.

Note 5 – Fair Value Measurements

9 unchanged sentences

Our assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.

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.

As of December 27, 2020 and March 29, 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 was classified as other current liabilities on our balance sheet.

The fair value of the interest rate swap was 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.

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

As of June 27, 2021 and March 28, 2021, the assets held in a deferred compensation retirement plan were 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 on our balance sheet.

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.

1 unchanged sentence

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 and liabilities measured at fair value on a recurring basis as of December 27, 2020 and March 29, 2020.

(In thousands) December 27, 2020 March 29, 2020

The following tables summarize the balances of assets and liabilities measured at fair value on a recurring basis as of June 27, 2021 and March 28, 2021.

(In thousands) June 27, 2021 March 28, 2021

Deferred compensation plan assets Level 1 $ 7,517 $ 5,946

Interest rate swap Level 2 $ — $ 108

Note 6– Assets Held for Sale

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.

Included in assets held for sale as of March 28, 2021 was $ 0.7 million for an office building in St.

Louis, Missouri which was utilized in the administration of our Industrial segment and $ 0.2 million for a water treatment branch located in Eldridge, Iowa, which has been relocated to another owned facility.

Both were sold in the first quarter of fiscal 2022.

Note 7 – Inventories

Inventories at December 27, 2020 and March 29, 2020 consisted of the following:

Inventories at June 27, 2021 and March 28, 2021 consisted of the following:

2021 March 28,

3 unchanged sentences

Net inventory $ 67,943 $ 63,864

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 27, 2020 and $ 43.3 million at March 29, 2020.

The first in, first out (“FIFO”) value of inventories accounted for under the last in, first out (“LIFO”) method was $ 51.0 million at June 27, 2021 and $ 46.8 million at March 28, 2021.

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

Note 8 – Goodwill and Intangible Assets

The carrying amount of goodwill was $ 67.7 million as of December 27, 2020 and $ 58.4 million as of March 29, 2020, of which $ 44.9 million was related to our Health and Nutrition segment, $ 16.3 million was related to our Water Treatment segment, and $ 6.5 million was related to our Industrial segment.

The increase in goodwill during the nine months ended December 27, 2020 represents goodwill recorded in connection with the ADC acquisition as discussed in Note 2.

A summary of our intangible assets as of December 27, 2020 and March 29, 2020 is as follows:

December 27, 2020 March 29, 2020

The carrying amount of goodwill was $ 70.8 million as of June 27, 2021 and $ 70.7 million as of March 28, 2021, of which $ 44.9 million was related to our Health and Nutrition segment, $ 19.3 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 27, 2021 and March 28, 2021 is as follows:

June 27, 2021 March 28, 2021

(In thousands) Gross

11 unchanged sentences

Note 9 – Debt

Debt at December 27, 2020 and March 29, 2020 consisted of the following:

Debt at June 27, 2021 and March 28, 2021 consisted of the following:

2021 March 28,

10 unchanged sentences

income tax jurisdictions.

Our effective tax rate for the nine months ended December 27, 2020 was 26.1 % and was 26.6 % for the nine months ended December 29, 2019.

Our effective tax rate for the three months ended June 27, 2021 was 24.4 % and was 26.5 % for the three months ended June 28, 2020.

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

1 unchanged sentence

Lease Obligations.

As of December 27, 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.

As of June 27, 2021, 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 23 years, some of which include options to extend the lease for up to 10 years .

As of December 27, 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 nine months ended December 27, 2020 was no t material.

Total lease expense was $ 0.7 million for both the three months ended December 27, 2020 and December 29, 2019.

Total lease expense for the nine months ended December 27, 2020 and December 29, 2019 was $ 2.1 million and $ 2.2 million, respectively.

As of June 27, 2021, 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 was no t material for the three months ended June 27, 2021 and June 28, 2020.

Total lease expense was $ 0.7 million for both the three months ended June 27, 2021 and June 28, 2020.

Other information related to our operating leases was as follows:

December 27, 2020

June 27, 2021 March 28, 2021

Lease Term and Discount Rate

1 unchanged sentence

Weighted average discount rate 2.6 % 2.7 %

Maturities of lease liabilities as of December 27, 2020 were as follows:

Maturities of lease liabilities as of June 27, 2021 were as follows:

(In thousands) Operating Leases

15 unchanged sentences

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 27, 2020:

The following table represents the restricted stock activity for the three months ended June 27, 2021:

Shares Weighted-

4 unchanged sentences

Vested ( 123,002 ) 17.25

Forfeited or expired ( 14,505 ) 35.83

Unvested at end of period 227,736 $ 25.08

We recorded compensation expense related to performance share units and restricted stock of $ 0.7 million and $ 1.6 million for the three and nine months ended December 27, 2020, respectively.

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 $ 0.6 million for the three months ended June 27, 2021 and $ 0.5 million for the three June 28, 2020.

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 generally one year from the date of issuance, based on the market value on the date of grant.

As of December 27, 2020, there were 6,593 shares of restricted stock with an average grant date fair value of $ 51.17 outstanding under this program.

Compensation expense for both the three months ended December 27, 2020 and December 29, 2019 related to restricted stock awards to the Board was $ 0.1 million.

Compensation expense for both the nine months ended December 27, 2020 and December 29, 2019 related to restricted stock awards to the Board was $ 0.2 million.

As of June 27, 2021, there were 11,228 shares of restricted stock with an average grant date fair value of $ 25.60 outstanding under this program.

Compensation expense for both the three months ended June 27, 2021 and June 28, 2020 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 and nine months ended December 27, 2020, we repurchased 83,044 shares at an aggregate purchase price of $ 4.1 million.

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.

As of December 27, 2020, 275,753 shares remained available to be repurchased under the share repurchase program.

Note 15 – Litigation, Commitments and Contingencies

There are no material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which we or any of our subsidiaries are a party or of which any of our property is the subject.

Legal fees associated with such matters are expensed as incurred.

During the three months ended June 27, 2021, we repurchased 100,954 shares at an aggregate purchase price of $ 3.4 million.

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

As of June 27, 2021, 450,552 shares remained available to be repurchased under the share repurchase program.

Note 14 – Segment Information

12 unchanged sentences

Treatment Health and Nutrition Total

Three months ended December 27, 2020:

Sales $ 64,356 $ 39,298 $ 39,273 $ 142,927

Gross profit 9,207 10,027 9,005 28,239

Selling, general, and administrative expenses 6,978 6,788 3,984 17,750

Operating income 2,229 3,239 5,021 10,489

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

Nine months ended December 27, 2020:

Three months ended June 27, 2021:

Sales $ 85,850 $ 56,238 $ 39,153 $ 181,241

2 unchanged sentences

Operating income 8,013 9,172 4,933 22,118

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

No significant changes to identifiable assets by segment occurred during the nine months ended December 27, 2020.

Note 17 – Subsequent Events

On December 30, 2020, we acquired substantially all the assets of C & L Aqua Professionals, Inc.

Blending, Inc.

(together, “C&L Aqua”) for $ 16 million under the terms of an asset purchase agreement among us, C&L Aqua and its shareholders.

C&L Aqua is a water treatment chemical distribution company operating primarily in Louisiana.

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.

No significant changes to identifiable assets by segment occurred during the three months ended June 27, 2021.

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