What changed in this filing

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Item 1. Financial Statements

2023-02-01 compared with 2022-11-02 · 67 added, 55 removed, 376 unchanged (24% of the section changed)

42 unchanged sentences

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

20,817,625 and 20,889,777 shares issued and outstanding as of October 2, 2022 and April 3, 2022, respectively

20,850,454 and 20,889,777 shares issued and outstanding as of January 1, 2023 and April 3, 2022, respectively

Additional paid-in capital 43,388 46,717

7 unchanged sentences

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

Three Months Ended Six Months Ended

2022 September 26,

2021 October 2,

2022 September 26,

Three Months Ended Nine Months Ended

2023 December 26,

2021 January 1,

2023 December 26,

Sales $ 219,218 $ 187,050 $ 706,953 $ 551,568

4 unchanged sentences

Interest expense, net ( 1,546 ) ( 317 ) ( 3,858 ) ( 995 )

Other (expense) income ( 446 ) 184 ( 1,209 ) 416

Other income (expense) 465 132 ( 744 ) 548

Income before income taxes 14,186 14,074 65,065 55,538

10 unchanged sentences

(In thousands)

Three Months Ended Six Months Ended

2022 September 26,

2021 October 2,

2022 September 26,

Three Months Ended Nine Months Ended

2023 December 26,

2021 January 1,

2023 December 26,

Net income $ 10,733 $ 10,204 $ 48,428 $ 40,965

Other comprehensive income, net of tax:

Unrealized gain on interest rate swap 1,977 — 2,442 —

Unrealized (loss) gain on interest rate swap ( 139 ) — 2,303 —

Total comprehensive income $ 10,594 $ 10,204 $ 50,731 $ 40,965

27 unchanged sentences

BALANCE — October 2, 2022 20,817,625 $ 208 $ 41,294 $ 286,179 $ 3,733 $ 331,414

Cash dividends declared and paid ($ 0.14 per share)

— — — ( 2,943 ) — ( 2,943 )

Share-based compensation expense — — 1,084 — — 1,084

ESPP shares issued 32,829 1 1,010 — — 1,011

Other comprehensive loss, net of tax — — — — ( 139 ) ( 139 )

Net income — — — 10,733 — 10,733

BALANCE — January 1, 2023 20,850,454 $ 209 $ 43,388 $ 293,969 $ 3,594 $ 341,160

Common Stock Additional

20 unchanged sentences

BALANCE — September 26, 2021 20,888,923 $ 209 $ 44,801 $ 239,303 $ — $ 284,313

Cash dividends declared and paid ($ 0.13 per share)

— — — ( 2,745 ) — ( 2,745 )

Share-based compensation expense — — 1,046 — — 1,046

Shares repurchased ( 30,538 ) — ( 1,124 ) — — ( 1,124 )

Net income — — — 10,204 $ — 10,204

BALANCE — December 26, 2021 20,858,385 $ 209 $ 44,723 $ 246,762 $ — $ 291,694

See accompanying notes to condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

Six Months Ended

2022 September 26,

Nine Months Ended

2023 December 26,

CASH FLOWS FROM OPERATING ACTIVITIES:

5 unchanged sentences

Stock compensation expense 2,764 2,707

Other 225 379

Changes in operating accounts providing (using) cash:

19 unchanged sentences

Proceeds from revolving loan borrowings 45,000 32,000

Net cash provided by (used in) financing activities 1,997 ( 28,355 )

Net cash used in financing activities ( 9,936 ) ( 224 )

NET INCREASE IN CASH AND CASH EQUIVALENTS 2,650 20,440

15 unchanged sentences

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

The results of operations for the six months ended October 2, 2022 are not necessarily indicative of the results that may be expected for the full year.

The results of operations for the nine months ended January 1, 2023 are not necessarily indicative of the results that may be expected for the full year.

References to fiscal 2022 refer to the fiscal year ended April 3, 2022 and references to fiscal 2023 refer to the fiscal year ending April 2, 2023.

29 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 six months ended October 2, 2022 and September 26, 2021:

Three months ended October 2, 2022

The following tables disaggregate external customer net sales by major revenue stream for the three and nine months ended January 1, 2023 and December 26, 2021:

Three months ended January 1, 2023

(In thousands) Industrial Water

9 unchanged sentences

Total external customer sales $ 114,436 $ 68,549 $ 36,233 $ 219,218

Three months ended September 26, 2021

Three months ended December 26, 2021

(In thousands) Industrial Water

9 unchanged sentences

Total external customer sales $ 100,554 $ 49,756 $ 36,740 $ 187,050

Six months ended October 2, 2022

Nine months ended January 1, 2023

(In thousands) Industrial Water

9 unchanged sentences

Total external customer sales $ 353,085 $ 233,527 $ 120,341 $ 706,953

Six months ended September 26, 2021

Nine months ended December 26, 2021

(In thousands) Industrial Water

17 unchanged sentences

Basic and diluted EPS were calculated using the following:

Three Months Ended Six Months Ended

October 02, 2022 September 26, 2021 October 02, 2022 September 26, 2021

Three Months Ended Nine Months Ended

January 01, 2023 December 26, 2021 January 01, 2023 December 26, 2021

Weighted-average common shares outstanding—basic 20,818,347 20,885,232 20,847,285 20,968,692

11 unchanged sentences

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.

Both of these 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 current assets.

Both of these assets are classified as 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 current assets.

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

3 unchanged sentences

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 October 2, 2022 and April 3, 2022.

(In thousands) October 2, 2022 April 3, 2022

The following tables summarize the balances of assets and liabilities measured at fair value on a recurring basis as of January 1, 2023 and April 3, 2022.

(In thousands) January 1, 2023 April 3, 2022

Deferred compensation plan assets Level 1 $ 7,551 $ 7,038

1 unchanged sentence

Note 6 – Inventories

Inventories at October 2, 2022 and April 3, 2022 consisted of the following:

Inventories at January 1, 2023 and April 3, 2022 consisted of the following:

2023 April 3,

3 unchanged sentences

Net inventory $ 101,581 $ 94,985

The first in, first out (“FIFO”) value of inventories accounted for under the last in, first out (“LIFO”) method was $ 110.3 million at October 2, 2022 and $ 83.7 million at April 3, 2022.

The first in, first out (“FIFO”) value of inventories accounted for under the last in, first out (“LIFO”) method was $ 104.7 million at January 1, 2023 and $ 83.7 million at April 3, 2022.

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

Note 7 – Goodwill and Intangible Assets

The carrying amount of goodwill was $ 77.4 million as of October 2, 2022 and April 3, 2022, of which $ 44.9 million was related to our Health and Nutrition segment, $ 26.0 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 October 2, 2022 and April 3, 2022 is as follows:

October 2, 2022 April 3, 2022

The carrying amount of goodwill was $ 77.4 million as of January 1, 2023 and April 3, 2022, of which $ 44.9 million was related to our Health and Nutrition segment, $ 26.0 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 January 1, 2023 and April 3, 2022 is as follows:

January 1, 2023 April 3, 2022

(In thousands) Gross

11 unchanged sentences

Note 8 – Debt

Debt at October 2, 2022 and April 3, 2022 consisted of the following:

Debt at January 1, 2023 and April 3, 2022 consisted of the following:

2023 April 3,

5 unchanged sentences

Total long-term debt $ 120,710 $ 115,644

We were in compliance with all covenants of our credit agreement as of October 2, 2022.

We were in compliance with all covenants of our credit agreement as of January 1, 2023.

Note 9 – Income Taxes

2 unchanged sentences

The tax years prior to our fiscal year ended March 31, 2019 are closed to examination by the Internal Revenue Service, and with few exceptions, state and local income tax jurisdictions.

Our effective income tax rate was 26 % for both the six months ended October 2, 2022 and the six months ended September 26, 2021.

Our effective income tax rate was 26 % for both the nine months ended January 1, 2023 and the nine months ended December 26, 2021.

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 October 2, 2022, 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 January 1, 2023, 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 original lease terms of 1 year to 22 years, some of which include options to extend the lease for up to 10 years .

As of October 2, 2022, 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 and six months ended October 2, 2022 and September 26, 2021.

Total lease expense was $ 0.7 million for both the three months ended October 2, 2022 and September 26, 2021, and was $ 1.5 million and $ 1.4 million for the six months ended October 2, 2022 and September 26, 2021.

As of January 1, 2023, 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 and nine months ended January 1, 2023 and December 26, 2021.

Total lease expense was $ 0.8 million for the three months ended January 1, 2023 and $ 0.7 million for the three months ended December 26, 2021, and was $ 2.4 million for the nine months ended January 1, 2023 and $ 2.1 million for the nine months ended December 26, 2021.

Other information related to our operating leases was as follows:

October 2, 2022 April 3, 2022

January 1, 2023 April 3, 2022

Lease Term and Discount Rate

1 unchanged sentence

Weighted average discount rate 2.8 % 2.6 %

Maturities of lease liabilities as of October 2, 2022 were as follows:

Maturities of lease liabilities as of January 1, 2023 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 six months ended October 2, 2022:

The following table represents the restricted stock activity for the nine months ended January 1, 2023:

Shares Weighted-

6 unchanged sentences

Unvested at end of period 189,258 $ 34.64

We recorded compensation expense related to performance share units and restricted stock of $ 0.8 million and $ 1.2 million for the three and six months ended October 2, 2022, respectively.

We recorded compensation expense related to performance share units and restricted stock of $ 0.6 million and $ 1.2 million for the three and six months ended September 26, 2021, respectively.

We recorded compensation expense for both the three months ended January 1, 2023 and December 26, 2021 related to performance share units and restricted stock of $ 0.8 million.

We recorded compensation expense for both the nine months ended January 1, 2023 and December 26, 2021 related to performance share units and restricted stock of $ 2.0 million.

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 generally expensed over a one-year vesting period, based on the market value on the date of grant.

As of October 2, 2022, there were 12,565 shares of restricted stock with an average grant date fair value of $ 38.98 outstanding under this program.

Compensation expense for both the three months ended October 2, 2022 and September 26, 2021 related to restricted stock awards to the Board was $ 0.1 million.

Compensation expense for both the six months ended October 2, 2022 and September 26, 2021 related to restricted stock awards to the Board was $ 0.2 million.

As of January 1, 2023, there were 12,565 shares of restricted stock with an average grant date fair value of $ 38.98 outstanding under this program.

Compensation expense for the three and nine months ended January 1, 2023 related to restricted stock awards to the Board was $ 0.1 million and $ 0.3 million, respectively.

Compensation expense for the three and nine months ended December 26, 2021 related to restricted stock awards to the Board was $ 0.1 million and $ 0.2 million, respectively.

Note 12 – 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 October 2, 2022, no shares were repurchased.

During the six months ended October 2, 2022, we repurchased 181,657 shares at an aggregate purchase price of $ 6.6 million.

During the three months ended September 26, 2021, we repurchased 109,009 shares at an aggregate purchase price of $ 4.0 million.

During the six months ended September 26, 2021, we repurchased 209,963 shares at an aggregate purchase price of $ 7.4 million.

As of October 2, 2022, 1,129,348 shares remained available to be repurchased under the share repurchase program.

During the three months ended January 1, 2023, no shares were repurchased, and during the nine months ended January 1, 2023, we repurchased 181,657 shares at an aggregate purchase price of $ 6.6 million.

During the three months ended December 26, 2021, we repurchased 30,538 shares at an aggregate purchase price of $ 1.1 million, and during the nine months ended December 26, 2021, we repurchased 240,501 shares at an aggregate purchase price of $ 8.5 million.

As of January 1, 2023, 1,129,348 shares remained available to be repurchased under the share repurchase program.

Note 13 – Segment Information

11 unchanged sentences

Treatment Health and Nutrition Total

Three months ended October 2, 2022:

Three months ended January 1, 2023:

Sales $ 114,436 $ 68,549 $ 36,233 $ 219,218

2 unchanged sentences

Operating income 8,016 4,265 2,986 15,267

Three months ended September 26, 2021:

Three months ended December 26, 2021:

Sales $ 100,554 $ 49,756 $ 36,740 $ 187,050

2 unchanged sentences

Operating income 7,936 2,849 3,474 14,259

Six months ended October 2, 2022:

Nine months ended January 1, 2023:

Sales $ 353,085 $ 233,527 $ 120,341 $ 706,953

2 unchanged sentences

Operating income 32,462 25,939 11,266 69,667

Six months ended September 26, 2021:

Nine months ended December 26, 2021:

Sales $ 269,572 $ 168,105 $ 113,891 $ 551,568

2 unchanged sentences

Operating income 22,057 22,134 11,794 55,985

No significant changes to identifiable assets by segment occurred during the six months ended October 2, 2022.

No significant changes to identifiable assets by segment occurred during the nine months ended January 1, 2023.

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