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Item 7. Management’s Discussion and Analysis

2025-02-20 compared with 2024-02-20 · 276 added, 192 removed, 450 unchanged (51% of the section changed)

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This MD&A contains forward-looking statements that involve risks and uncertainties.

Please see “Forward-Looking Statements” in Item 1 - Business and Item 1A - Risk Factors in this Form 10-K for a discussion of the uncertainties, risks and assumptions associated with these statements.

Refer to “Forward-Looking Statements” in Item 1 - Business and Item 1A - Risk Factors in this Form 10-K for a discussion of the uncertainties, risks and assumptions associated with these statements.

This discussion should be read in conjunction with our historical financial statements and related notes thereto and the other disclosures contained elsewhere in this Form 10-K.

The results of operations for the periods reflected herein are not necessarily indicative of results that may be expected for future periods, and our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including but not limited to those listed under Item 1A- Risk Factors and included elsewhere in this Form 10-K.

This MD&A is a supplement to our financial statements and notes thereto included elsewhere in this Form 10-K and is provided to enhance your understanding of our results of operations and financial condition.

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North America and Europe.

Financial information related to our business segments can be found in Note 14 - Segment Information of our financial statements included elsewhere in this Form 10-K.

During 2021, the Company ceased the appeal process for its litigation with Steves & Sons, Inc.

As a result, we are required to divest the Company’s Towanda, PA operations (“Towanda”).

Assuming customary closing conditions are met and subject to court approval, we believe the divestiture will occur within the next twelve months and qualifies for held for sale accounting.

Refer to Note 14 - Segment Information included in this Form 10-K for more information about our segments.

During 2021, the Company ceased the appeal process for its litigation with Steves.

As a result, we were required to divest our Towanda facility and related assets, which occurred on January 17, 2025.

As of December 31, 2024, and prior to the court-ordered divestiture closing, we believed the court-ordered divestiture would occur within the next twelve months and qualifies for held for sale accounting.

We have reclassified certain assets and liabilities to assets held for sale in the accompanying financial statements.

We plan to continue reporting Towanda within our North America operations until the divestiture is finalized.

For additional information on the Steves litigation and divestiture, see Note 25 - Commitments and Contingencies of our financial statements included elsewhere in this Form 10-K.

We have reported Towanda within our North America operations through 2024.

Refer to Note 25 - Commitments and Contingencies included in this Form 10-K for more information on the Steves litigation and court-ordered divestiture.

On April 17, 2023, we entered into a Share Sale Agreement with Aristotle Holding III Pty Limited, a subsidiary of Platinum Equity Advisors, LLC, to sell our Australasia business.

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The consolidated statements of cash flows include cash flows from discontinued operations through the divestiture date of July 2, 2023.

See Note 2 - Discontinued Operations of our financial statements included elsewhere in this Form 10-K.

Refer to Note 2 - Discontinued Operations included in this Form 10-K for more information.

Factors and Trends Affecting Our Business

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• the availability and cost of credit;

• interest rate fluctuations (including mortgage and credit card interest rates) and the availability of financing for our customers and consumers;

• interest rate fluctuations (including mortgage and credit card interest rates), sustained periods of elevated interest rates, and the availability of financing for our customers and consumers;

• the amount and type of residential and non-residential construction;

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• increases in the cost of raw materials or any shortage in supplies or labor, including as a result of tariffs or other trade restrictions;

• disruptions or delays to the global supply chain;

• the effects of governmental regulation and initiatives to manage economic conditions;

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Freight Costs

We incur substantial freight and duty costs to third party logistics providers and port authorities to transport raw materials and work-in-process inventory to our manufacturing facilities and to deliver finished goods to our customers.

We incur freight and duty costs from third party logistics providers and port authorities to transport raw materials and work-in-process inventory to our manufacturing facilities and to deliver finished goods to our customers.

Changes in freight and duty rates as well as the availability of freight services can have a significant impact on our cost of goods sold.

Freight and duty costs have risen significantly due to a number of factors that have affected the supply and demand of trucking and port services, including increased regulation, such as logging of miles, increases in general economic activity, labor shortages, and an aging workforce.

We attempt to mitigate some of these cost increases through various internal initiatives and to pass a substantial portion of these increases to our customers;

however, we may not realize the intended results within the intended timeframe.

Freight and duty costs are variable due to several factors that have affected the supply and demand of trucking and port services, including increased regulation, such as logging of miles, increases in general economic activity, labor shortages, and an aging workforce.

We continue to monitor these key market drivers and proactively mitigate these costs through various internal initiatives and carrier contracts.

Working Capital and Seasonality

Working capital fluctuates throughout the year and is affected by seasonality of sales of our products and of customer payment patterns.

The peak season for home construction and remodeling in our North America and Europe segments generally corresponds with the second and third calendar quarters, and therefore our sales volume is usually higher during those quarters.

Working capital fluctuates throughout the year and is affected by the seasonality of sales of our products and of customer payment patterns.

Typically, working capital increases at the end of the first quarter and beginning of the second quarter in conjunction with, and in preparation for, our peak season, and working capital decreases starting in the third quarter as inventory levels and accounts receivable decline.

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dollar can affect our reported operating results and our cash flows as we translate our foreign subsidiaries’ financial statements from their reporting currencies into U.S.

See Item 1A - Risk Factors - Risks Relating to Our Business and Industry, Item 1A - Risk Factors - Exchange rate fluctuations may impact our business, financial condition, and results of operations, and Item 7A - Quantitative and Qualitative Disclosures About Market Risk- Exchange Rate Risk.

Refer to Item 1A - Risk Factors - Risks Relating to Our Business and Industry, Item 1A - Risk Factors - Exchange rate fluctuations may impact our business, financial condition, and results of operations, and Item 7A - Quantitative and Qualitative Disclosures About Market Risk- Exchange Rate Risk included in this Form 10-K.

Components of our Operating Results

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• sales of a wide variety of windows for both residential and certain non-residential uses, to a broad group of wholesale and retail customers in North America;

• other sales, including sales of trim board, glass, hardware and locks, door skins, window screens, and miscellaneous installation and other services.

We also sell molded door skins to certain customers pursuant to long-term contracts, and these customers in turn use the molded door skins to manufacture interior doors and compete directly against us in the marketplace.

• other sales, including sales of glass, hardware and locks, and window screens.

We also sell molded door skins to certain direct and indirect customers pursuant to long-term contracts, and these customers in turn use the molded door skins to manufacture interior doors and compete directly against us in the marketplace.

Net revenues do not include internal transfers of products between our component manufacturing, product manufacturing and assembly, and distribution facilities.

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The imposition of new tariffs on imports, new trade restrictions, or changes in tariff rates or trade restrictions may further impact material costs.

See Item 7A - Quantitative and Qualitative Disclosures About Market Risk- Raw Materials Risk.

Refer to Item 7A - Quantitative and Qualitative Disclosures About Market Risk- Raw Materials Risk included in this Form 10-K.

Direct Labor and Benefit Costs.

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Outbound freight includes payments to third-party carriers for shipments of orders to our customers, as well as driver, vehicle, and fuel expenses when we deliver orders to customers.

The majority of our products are shipped by third-party carriers.

Third-party carriers ship the majority of our products.

Insurance and Benefits, Supervision, and Tax Expenses.

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Selling, General, and Administrative Expenses

SG&A expenses consist primarily of research and development, sales and marketing, and general and administrative expenses.

SG&A expenses primarily consist of research and development, sales and marketing, and general and administrative expenses.

Research and Development .

Research and development expenses consist primarily of personnel expenses related to research and development, consulting and contractor expenses, tooling and prototype materials, and overhead costs allocated to such expenses.

Substantially all of our research and development expenses are related to developing new products and services and improving our existing products and services.

Substantially all our research and development expenses are related to developing new products and services and improving our existing products and services.

To date, research and development expenses have been expensed as incurred, because the period between achieving technological feasibility and the release of products and services for sale has been short and development costs qualifying for capitalization have been insignificant.

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Goodwill Impairment

Goodwill impairment consists of goodwill impairment charges associated with our Europe reporting unit in the year ended December 31, 2022.

For more information, refer to Note 6 - Goodwill of our consolidated financial statements included in this Form 10-K.

Goodwill impairment consists of goodwill impairment charges associated with our Europe reporting unit during the years ended December 31, 2022 and 2024.

During the year ended December 31, 2024, goodwill impairment also consists of goodwill impairment charges related to the court-ordered divestiture of Towanda.

Refer to Note 6 - Goodwill included in this Form 10-K for more information.

Restructuring and Asset Related Charges

Restructuring charges, net consist primarily of all salary-related severance benefits that are accrued and expensed when a restructuring plan has been put into place, the plan has received approval from the appropriate level of management and the benefit is probable and reasonably estimable.

Restructuring charges, net consist primarily of all salary-related severance and employee termination benefits that are accrued and expensed when a restructuring plan has been put into place, the plan has received approval from the appropriate level of management and the benefit is probable and reasonably estimable.

In addition to salary-related costs, we incur other restructuring costs and adjustments when facilities are closed, or capacity is realigned within the organization.

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Asset related charges consist of accelerated depreciation and amortization of assets due to changes in asset useful lives.

Refer to Note 19.

Restructuring and Asset-Related Charges to our consolidated financial statements included in this Form 10-K for more information.

Interest Expense, Net

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Debt issuance costs are included as an offset to long-term debt in the accompanying consolidated balance sheets and are amortized to interest expense over the life of the related facility using the effective interest method.

For additional details, see Note 12 - Long-Term Debt of our financial statements for the year ended December 31, 2023 included elsewhere in this Form 10-K .

Refer to Note 21 - Interest Expense, Net and Note 12 - Long-Term Debt to our consolidated financial statements included in this Form 10-K for more information.

Other Income, Net

Other income, net, includes income and losses related to various miscellaneous non-operating expenses.

For more information, refer to Note 22 - Other Income, Net of our consolidated financial statements included in this Form 10-K .

Refer to Note 22 - Other Income, Net to our consolidated financial statements included in this Form 10-K for more information.

Income taxes are recorded using the asset and liability method of accounting for income taxes.

Under this method, deferred tax assets and liabilities are recognized for the deferred tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities due to a change in tax rates is recognized in income in the period that includes the date of enactment.

We recognize the effect of income tax positions only if those positions are more likely than not of being sustained.

Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized.

Recognized income tax positions are measured at the largest amount that is greater than 50% likely to be realized.

Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

For more information, refer to Note 15 - Income Taxes to our consolidated financial statements included in this Form 10-K.

Refer to Note 15 - Income Taxes to our consolidated financial statements included in this Form 10-K for more information.

Results of Operations

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Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023

December 31, 2023 December 31, 2022

Year Ended December 31,

(amounts in thousands) % of Net

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Restructuring and asset-related charges 68,092 1.8 % 35,741 0.8 %

Operating (loss) income (126,446) (3.3) % 141,600 3.3 %

Interest expense, net 67,237 1.8 % 72,258 1.7 %

Loss on extinguishment and refinancing of debt 1,908 0.1 % 6,487 0.2 %

Other income, net (24,773) (0.7) % (25,719) (0.6) %

(Loss) income from continuing operations before taxes (170,818) (4.5) % 88,574 2.1 %

Income tax expense 16,762 0.4 % 63,339 1.5 %

(Loss) income from continuing operations, net of tax (187,580) (5.0) % 25,235 0.6 %

(Loss) gain on sale of discontinued operations, net of tax (1,440) — % 15,699 0.4 %

Income from discontinued operations, net of tax — — % 21,511 0.5 %

Net (loss) income $ (189,020) (5.0) % $ 62,445 1.5 %

Consolidated Results

Net Revenues – Net revenues decreased $528.7 million, or 12.3%, to $3,775.6 million in the year ended December 31, 2024, from $4,304.3 million in the year ended December 31, 2023.

The decrease in net revenues was primarily driven by a decrease in Core Revenues of 12%.

Core Revenues decreased due to a 12% decline in volume/mix.

Gross Margin – Gross margin decreased $143.6 million, or 17.3%, to $689.0 million in the year ended December 31, 2024, from $832.6 million in the year ended December 31, 2023.

Gross margin as a percentage of net revenues was 18.2% in the year ended December 31, 2024, and 19.3% in the year ended December 31, 2023.

The decrease in gross margin percentage was due to a decremental impact of volume/mix, partially offset by an increase in productivity.

SG&A Expense – SG&A expense decreased $2.8 million, or 0.4%, to $652.5 million in the year ended December 31, 2024, from $655.3 million in the year ended December 31, 2023.

SG&A expense as a percentage of net revenues increased to 17.3% in the year ended December 31, 2024, from 15.2% in the year ended December 31, 2023.

The decrease in SG&A expense was primarily due to decreased performance-based variable compensation expense partially offset by increased professional fees, including non-recurring transformation journey expenses.

Goodwill Impairment – Goodwill impairment charges of $94.8 million in the year ended December 31, 2024, consist of a $63.4 million goodwill impairment charge associated with our Europe reporting unit, and a $31.4 million goodwill impairment charge in our North America reporting unit related to the court-ordered divestiture of Towanda.

Refer to Note 6 – Goodwill to our consolidated financial statements included in this Form 10-K for more information.

Restructuring and Asset-Related Charges – Restructuring and asset-related charges increased $32.4 million, or 90.5% to $68.1 million in the year ended December 31, 2024, from $35.7 million in the year ended December 31, 2023.

The increase in restructuring charges was primarily due to an increase in charges incurred to close certain manufacturing facilities in our North America and Europe segments and to transform the operating structure of our Europe segment.

Refer to Note 19 - Restructuring and Asset-Related Charges of our consolidated financial statements included in this Form 10-K for more information.

Interest Expense, Net – Interest expense, net, decreased $5.0 million, or 6.9%, to $67.2 million in the year ended December 31, 2024, from $72.3 million in the year ended December 31, 2023.

The decrease was primarily due to lower long-term debt balances resulting from the redemption of our Senior Secured Notes and partial redemption of our 4.63% Senior Notes in the third quarter of 2023, and an increase in interest income from invested cash balances, partially offset by a decrease in interest income from interest rate derivatives and a higher interest rate on our Senior Notes maturing in 2032 issued during the third quarter of 2024.

Refer to Note 21 - Interest Expense, Net of our consolidated financial statements included in this Form 10-K for more information.

Loss on Extinguishment and Refinancing of Debt – The $1.9 million loss on extinguishment and refinancing of debt during the year ended December 31, 2024, is related to the amendment of our Term Loan Facility as well as the redemption of the remaining $200.0 million of our 4.63% Senior Notes.

The loss on extinguishment and refinancing of debt of $6.5 million in the year ended December 31, 2023, is related to the redemption of our Senior Secured Notes and partial redemption of our 4.63% Senior Notes.

Refer to Note 12 - Long-Term Debt of our consolidated financial statements included in this Form 10-K for more information.

Other Income, Net – Other income, net decreased $0.9 million, or 3.7%, to $24.8 million in the year ended December 31, 2024, from $25.7 million in the year ended December 31, 2023.

Other income, net in the year ended December 31, 2024, consisted primarily of cash received on investment in real estate of $7.9 million, income from the refund of deposits of China antidumping and countervailing duties of $7.2 million, recovery of the JW Australia transition services costs incurred of $6.6 million, insurance reimbursements of $1.7 million, and recovery of cost from receipts on impaired notes of $1.4 million, partially offset by pension expense of $2.0 million.

Other income, net in the year ended December 31, 2023, consisted primarily of recovery of the JW Australia transition services costs incurred of $8.3 million, income from the refund of deposits from antidumping duties of $7.0 million, an ERC from the U.S.

government of $6.1 million, recovery of cost from interest received on impaired notes of $3.5 million, and income from short-term investments and forward contracts related to the JW Australia divestiture of $3.1 million, partially offset by pension expense of $6.5 million and a $4.3 million settlement loss associated with our U.S.

defined benefit pension plan.

Refer to Note 22 - Other Income, Net of our consolidated financial statements included in this Form 10-K for more information.

Income Taxes – Income tax expense was $16.8 million in the year ended December 31, 2024, compared to $63.3 million in the year ended December 31, 2023.

The effective tax rate in the year ended December 31, 2024, was (9.8)%.

The effective tax rate for the year ended December 31, 2024, was driven primarily by the $24.6 million increase to valuation allowances on foreign and state NOL and credit carryforwards, $7.1 million of tax expense attributed to nondeductible expenses, $20.2 million of tax expense attributable to nondeductible goodwill impairment and $4.5 million of tax expense attributed to the expiration of U.S.

attributes, partially offset by $2.7 million of tax benefit attributable to research and development credits.

The effective tax rate in the year ended December 31, 2023, was 71.5%.

The effective tax rate in the year ended December 31, 2023, was primarily driven by the effects of the $32.7 million net valuation allowance recorded against our foreign and state NOLs as well as $7.2 million of tax expense attributed to the expiration of our U.S.

Refer to Note 15 - Income Taxes to our consolidated financial statements included in this Form 10-K for more information.

(Loss) Gain on Sale of Discontinued Operations – The $1.4 million loss and $15.7 million gain on sale of discontinued operations in the years ended December 31, 2024 and 2023, respectively, are related to the July 2, 2023, sale of JW Australia.

The $1.4 million loss incurred in the year ended December 31, 2024, is related to settlement of an outstanding tax liability for JW Australia.

Refer to Note 2 - Discontinued Operations of our consolidated financial statements included in this Form 10-K for more information.

Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022

Year Ended December 31,

(amounts in thousands) % of Net

Revenues % of Net

Net revenues $ 4,304,334 100.0 % $ 4,543,808 100.0 %

Cost of sales 3,471,713 80.7 % 3,757,888 82.7 %

Gross margin 832,621 19.3 % 785,920 17.3 %

Selling, general and administrative 655,280 15.2 % 654,077 14.4 %

Goodwill impairment — — % 54,885 1.2 %

Restructuring and asset-related charges 35,741 0.8 % 17,622 0.4 %

Operating income 141,600 3.3 % 59,336 1.3 %

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Loss on extinguishment of debt 6,487 0.2 % — — %

6,487 0.2 % — — %

Other income, net (25,719) (0.6) % (53,433) (1.2) %

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Goodwill Impairment – Goodwill impairment charges of $54.9 million in the year ended December 31, 2022, relate to goodwill impairment charges in our Europe reporting unit.

For further information, refer to Note 6 - Goodwill of our consolidated financial statements included in this Form 10-K.

Refer to Note 6 – Goodwill of our consolidated financial statements included in this Form 10-K for more information.

Restructuring and Asset Related Charges – Restructuring and asset related charges of $35.7 million in the year ended December 31, 2023, increased 102.8% from $17.6 million in the year ended December 31, 2022.

The increase in restructuring charges was primarily due to an increase in charges incurred to close certain manufacturing facilities in our North America segment.

For more information, refer to Note 19 - Restructuring and Asset Related Charges of our consolidated financial statements included in this Form 10-K.

Refer to Note 19 - Restructuring and Asset-Related Charges to our consolidated financial statements included in this Form 10-K for more information.

Interest Expense, Net – Interest expense, net, decreased $10.2 million, or 12.4%, to $72.3 million in the year ended December 31, 2023, from $82.5 million in the year ended December 31, 2022.

The decrease was primarily due to higher interest income from interest rate derivatives, the redemption of our Senior Secured Notes and partial redemption of our Senior Notes, and decreased borrowings on our Revolving Credit Facilities during the year ended December 31, 2023, partially offset by an increase to the cost of borrowing on our variable rate Term Loan Facility.

Refer to Note 21 - Interest Expense, Net of our consolidated financial statements included in this Form 10-K for more information.

Loss on Extinguishment of Debt – The $6.5 million loss on extinguishment of debt is related to the redemption of our Senior Secured Notes and partial redemption of our Senior Notes during the year ended December 31, 2023.

Refer to Note 12 - Long-Term Debt of our consolidated financial statements included in this Form 10-K.

Refer to Note 12 - Long-Term Debt of our consolidated financial statements included in this Form 10-K for more information.

Other Income, Net – Other income, net decreased $27.7 million, or 51.9%, to $25.7 million in the year ended December 31, 2023, from $53.4 million in the year ended December 31, 2022.

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Other income, net in the year ended December 31, 2022, primarily consisted of the recovery of cost from interest received on impaired notes of $14.0 million, legal settlement income of $10.5 million, reimbursements from governmental assistance and insurance of $8.0 million, pension income of $4.9 million, credit for overpayments of utility expenses of $2.0 million, and foreign currency gains of $1.0 million.

Refer to Note 22 - Other Income, Net of our consolidated financial statements included in this Form 10-K for more information.

Income Taxes – Income tax expense was $63.3 million and $18.0 million in the years ended December 31, 2023, and December 31, 2022, respectively.

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The effective tax rate increased primarily due to the impacts of the $32.7 million net valuation allowance recorded in the year ended December 31, 2023, partially offset by the $54.9 million non-deductible goodwill impairment charge recorded for the year ended December 31, 2022, not recorded in the year ended December 31, 2023.

For more information, refer to Note 15 - Income Taxes of our consolidated financial statements included in this Form 10-K.

Refer to Note 15 - Income Taxes of our consolidated financial statements included in this Form 10-K for more information.

Gain on Sale of Discontinued Operations, net of tax – The $15.7 million gain on sale of discontinued operations, net of tax is related to the July 2, 2023, sale of JW Australia.

Refer to Note 2 - Discontinued Operations of our consolidated financial statements included in this Form 10-K.

Comparison of the Year Ended December 31, 2022 to the Year Ended December 31, 2021

December 31, 2022 December 31, 2021

(dollars in thousands) % of Net

Revenues % of Net

Net revenues $ 4,543,808 100.0 % $ 4,181,690 100.0 %

Cost of sales 3,757,888 82.7 % 3,358,773 80.3 %

Gross margin 785,920 17.3 % 822,917 19.7 %

Selling, general and administrative 654,077 14.4 % 604,514 14.5 %

Goodwill impairment 54,885 1.2 % — — %

Restructuring and asset related charges 17,622 0.4 % 2,556 0.1 %

Operating income 59,336 1.3 % 215,847 5.2 %

Interest expense, net 82,505 1.8 % 76,788 1.8 %

Other income, net (53,433) (1.2) % (13,241) (0.3) %

Loss on extinguishment of debt — — % 1,342 — %

Income before taxes 30,264 0.7 % 150,958 3.6 %

Income tax expense 18,041 0.4 % 19,636 0.5 %

Income from continuing operations, net of tax

12,223 0.3 % 131,322 3.1 %

Income from discontinued operations, net of tax 33,504 0.7 % 37,500 0.9 %

Net income $ 45,727 1.0 % $ 168,822 4.0 %

Consolidated Results

Net Revenues – Net revenues increased $362.1 million, or 8.7%, to $4,543.8 million in the year ended December 31, 2022 from $4,181.7 million in the year ended December 31, 2021.

The increase was due to an improvement in Core Revenues of 12%, partially offset by a 4% adverse impact from foreign exchange.

Core Revenues increased due to a 13% benefit from price realization and unfavorable volume/mix of 1%.

Gross Margin – Gross margin decreased $37.0 million, or 4.5%, to $785.9 million in the year ended December 31, 2022 from $822.9 million in the year ended December 31, 2021.

Gross margin as a percentage of net revenues was 17.3% in the year ended December 31, 2022 and 19.7% in the year ended December 31, 2021.

The decrease in gross margin percentage was due primarily to the timing differences between increased input costs and our pricing actions in our end markets.

SG&A Expense – SG&A expense increased $49.6 million, or 8.2%, to $654.1 million in the year ended December 31, 2022 from $604.5 million in the year ended December 31, 2021.

SG&A expense as a percentage of net revenues decreased to 14.4% in the year ended December 31, 2022 from 14.5% in the year ended December 31, 2021.

The increase in SG&A expense was primarily due to increased variable compensation expenses, self-insurance costs, and sales and marketing expenses, partially offset by decreased legal and professional fees.

Goodwill Impairment – Goodwill impairment charges of $54.9 million in the year ended December 31, 2022 relate to goodwill impairment charges for our Europe reporting unit.

For further information, refer to Note 5 - Goodwill of our consolidated financial statements included in this Form 10-K.

Restructuring and Asset Related Charges – Restructuring and asset related charges increased $15.1 million, or 589.4%, to $17.6 million in the year ended December 31, 2022 from $2.6 million in the year ended December 31, 2021.

The increase in restructuring charges is primarily due to strategic transformation initiatives, cost savings, and footprint rationalization activities in our North America and Europe segments as well as changes to the management structure to align with our operations.

For more information, refer to Note 19 - Impairment and Asset Related Charges of our consolidated financial statements included in this Form 10-K.

Interest Expense, Net – Interest expense, net, increased $5.7 million, or 7.4%, to $82.5 million in the year ended December 31, 2022 from $76.8 million in the year ended December 31, 2021.

The increase was primarily due to an increase to the cost of borrowing on our Term Loan Facility and increased borrowings on the ABL Facility, partially offset by interest income from interest rate derivatives in the in the year ended December 31, 2022 and higher interest income earned on cash balances.

Other Income, Net – Other income, net increased $40.2 million, or 303.5%, to $53.4 million in the year ended December 31, 2022 from $13.2 million in the year ended December 31, 2021.

Other income, net in the year ended December 31, 2022 primarily

consisted of the recovery of cost from interest received on impaired notes of $14.0 million, legal settlement income of $10.5 million, reimbursements from governmental assistance and insurance of $8.0 million, pension income of $4.9 million, a credit for overpayments of utility expenses of $2.0 million, and foreign currency gains of $1.0 million.

Other income, net in the year ended December 31, 2021 primarily consisted of foreign currency gains of $7.1 million and reimbursements from governmental pandemic assistance relating to COVID-19 and insurance of $3.2 million.

Loss on Extinguishment of Debt – The $1.3 million loss on extinguishment of debt is related to an amendment of our Term Loan Facility during the year ended December 31, 2021.

Refer to Note 12 - Long-Term Debt of our consolidated financial statements included in this Form 10-K.

Income Taxes – Tax expense was $18.0 million and $19.6 million in the years ended December 31, 2022 and December 31, 2021, respectively.

The effective tax rate in the year ended December 31, 2022 was 59.6% compared to 13.0% in the year ended December 31, 2021.

The increase in the effective tax rate in the year ended December 31, 2022 was primarily due to the non-deductible goodwill impairment charge of $54.9 million.

For more information, refer to Note 15 - Income Taxes of our consolidated financial statements included in this Form 10-K.

Refer to Note 2 - Discontinued Operations of our consolidated financial statements included in this Form 10-K for more information.

Segment Results

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depreciation and amortization;

interest expense, net ;

interest expense (income), net;

and certain special items consisting of non-recurring net legal and professional expenses and settlements;

1 unchanged sentence

restructuring and asset-related charges;

other facility closure, consolidation, and related costs and adjustments;

M&A related costs;

net (gain) loss on sale of property and equipment;

loss on extinguishment of debt;

net (gain) loss on sale of business, property, and equipment;

loss on extinguishment and refinancing of debt;

share-based compensation expense;

pension settlement charges;

non-cash foreign exchange transaction/translation (income) loss;

non-cash foreign exchange transaction/translation (gain) loss;

and other special items.

We use Adjusted EBITDA from continuing operations because we believe this measure assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.

This non-GAAP financial measure should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP.

We have two reportable segments in our continuing operations, organized and managed principally by geographic region:

We have two reportable segments, organized and managed principally in geographic regions:

North America and Europe.

We report all other business activities in Corporate and unallocated costs.

Reconciliations of net income to Adjusted EBITDA from continuing operations for our segments’ operations are as follows:

Reconciliations of income (loss) from continuing operations, net of tax to Adjusted EBITDA from continuing operations by segment are as follows:

Year Ended December 31, 2024

(amounts in thousands) North America Europe Total Operating Segments Corporate and Unallocated Costs Total Consolidated

(amounts in thousands) North America Europe Corporate and Unallocated Costs Total Consolidated

Income (loss) from continuing operations, net of tax $ 82,836 $ (64,331) $ (206,085) $ (187,580)

Income tax expense (benefit) 18,676 8,066 (9,980) 16,762

Depreciation and amortization (1)

73,528 30,702 21,556 125,786

Interest expense, net 2,648 2,114 62,475 67,237

Special items:

Net legal and professional expenses and settlements 2,921 4,740 55,061 62,722

Goodwill impairment 31,356 63,445 — 94,801

Restructuring and asset-related charges 42,817 23,729 1,546 68,092

M&A related costs — — 15,296 15,296

Net gain on sale of business, property, and equipment (13,415) (153) (184) (13,752)

Loss on extinguishment and refinancing of debt — — 1,908 1,908

Share-based compensation expense 3,087 1,261 11,117 15,465

Non-cash foreign exchange transaction/translation loss (gain) 315 (3,771) 355 (3,101)

Other special items 9,302 1,911 399 11,612

Adjusted EBITDA from continuing operations $ 254,071 $ 67,713 $ (46,536) $ 275,248

(1) Corporate and unallocated depreciation and amortization expense includes software accelerated amortization of $14.1 million for an ERP that we are no longer utilizing after we completed our related obligations under the JW Australia Transition Services Agreement during the first quarter of 2024.

(2) Refer to the calculation of Adjusted EBITDA from continuing operations for a discussion of the Special items listed below.

Year Ended December 31, 2023

(amounts in thousands) North America Europe Corporate and Unallocated Costs Total Consolidated

Income (loss) from continuing operations, net of tax $ 175,980 $ (3,335) $ (147,410) $ 25,235

Income tax expense (benefit) (1)

79,210 44,095 (59,966) 63,339

Depreciation and amortization (2)

4 unchanged sentences

Restructuring and asset-related charges 29,207 5,738 796 35,741

Other facility closure, consolidation, and related costs and adjustments (5) 2,242 2,237 — 2,237

M&A related costs 759 — 5,816 6,575

Net loss (gain) on sale of property and equipment 1,223 (5,101) (6,645) (10,523)

Loss on extinguishment of debt — — — 6,487 6,487

Loss on extinguishment and refinancing of debt — — 6,487 6,487

Share-based compensation expense 5,121 1,890 10,466 17,477

Pension settlement charge 4,349 — — 4,349

Non-cash foreign exchange transaction/translation (income) loss (261) 1,628 1,367 (772) 595

Non-cash foreign exchange transaction/translation (gain) loss (261) 1,628 (772) 595

Other special items 1,042 (595) (4,721) (4,274)

Adjusted EBITDA from continuing operations $ 382,189 $ 81,455 $ (83,205) $ 380,439

(1) Income tax expense in our Europe segment includes an increase in valuation allowance against net operating loss carryforwards of $30.0 million.

Refer to Note 15 - Income Tax es of our consolidated financial statements for further information.

(2) North America depreciation and amortization expense includes accelerated depreciation of $9.1 million from reviews of equipment capacity optimization.

Corporate and unallocated depreciation and amortization expense includes software accelerated amortization of $14.1 million for an ERP system that we intend to not utilize upon completion of the JW Australia Transition Services Agreement period.

(3) For the definitions of the Special items listed above, refer to Note 14 - Segment Information of our consolidated financial statements included in this Form 10-K.

(1) Income tax expense in our Europe segment includes an increase in valuation allowance against our foreign net operating loss carryforwards of $30.0 million.

(2) Corporate and unallocated costs depreciation and amortization expense in the year ended December 31, 2023, includes accelerated amortization of $14.1 million for an ERP system that we are no longer utilizing after we completed our related obligations under the JW Australia Transition Services Agreement.

North America depreciation and amortization expense in the year ended December 31, 2023, includes accelerated depreciation of $9.1 million from reviews of equipment capacity optimization.

(3) Refer to the calculation of Adjusted EBITDA from continuing operations for a discussion of the Special items listed below.

To conform with the current period presentation, certain amounts in prior period information have been reclassified.

Year Ended December 31, 2022

(amounts in thousands) North America Europe Total Operating Segments Corporate and Unallocated Costs Total Consolidated

(amounts in thousands) North America Europe Corporate and Unallocated Costs Total Consolidated

Income (loss) from continuing operations, net of tax $ 260,590 $ (50,796) $ (197,571) $ 12,223

7 unchanged sentences

Restructuring and asset-related charges 7,338 6,042 4,242 17,622

Other facility closure, consolidation, and related costs and adjustments 2,587 16,304 18,891 — 18,891

M&A related costs 736 — 9,016 9,752

Net (gain) loss on sale of property and equipment (8,397) 354 (8,043) 7 (8,036)

Net (gain) loss on sale of business, property, and equipment (8,397) 354 7 (8,036)

Share-based compensation expense 4,870 2,729 6,978 14,577

2 unchanged sentences

Adjusted EBITDA from continuing operations $ 352,885 $ 74,325 $ (78,363) $ 348,847

(1) Income tax expense in Corporate and unallocated costs includes the tax impact of U.S.

(2) For the definitions of the Special items listed above, refer to Note 14 - Segment Information of our financial statements included in this Form 10-K.

(1) Income tax expense in Corporate and unallocated costs in the year ended December 31, 2022, includes the tax impact of U.S.

(2) Refer to the calculation of Adjusted EBITDA from continuing operations for a discussion of the Special items listed below.

Reconciliation of (loss) income from continuing operations, net of tax to Adjusted EBITDA from continuing operations on a consolidated basis is as follows:

Year Ended December 31,

(amounts in thousands) North America Europe Total Operating Segments Corporate and Unallocated Costs Total Consolidated

Income (loss) from continuing operations, net of tax $ 255,975 $ 66,596 $ 322,571 $ (191,249) $ 131,322

Income tax expense (benefit) (1)

(amounts in thousands) 2024 2023 2022

(Loss) income from continuing operations, net of tax (187,580) 25,235 $ 12,223

Income tax expense (1)

16,762 63,339 18,041

Depreciation and amortization (2)

125,786 134,996 113,132

Interest expense, net 67,237 72,258 82,505

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Net legal and professional expenses and settlements (3)

Restructuring and asset-related charges, net 1,200 1,453 2,653 (97) 2,556

Other facility closure, consolidation, and related costs and adjustments — 2,326 2,326 — 2,326

62,722 28,184 (287)

Goodwill impairment (4)

94,801 — 54,885

Restructuring and asset-related charges (5)(6)

68,092 35,741 17,622

M&A related costs (7)

Net loss (gain) on sale of property and equipment 1,589 584 2,173 (87) 2,086

Loss on extinguishment of debt — 1,342 1,342

15,296 6,575 9,752

Net gain on sale of business, property, and equipment (8)

(13,752) (10,523) (8,036)

Loss on extinguishment and refinancing of debt (9)

1,908 6,487 —

Share-based compensation expense (10)

Non-cash foreign exchange transaction/translation gain (51) (10,108) (10,159) (262) (10,421)

15,465 17,477 14,577

Pension settlement charge (11)

Non-cash foreign exchange transaction/translation (gain) loss (12)

(3,101) 595 12,437

Other special items (13)

11,612 (4,274) 21,996

Adjusted EBITDA from continuing operations $ 275,248 $ 380,439 $ 348,847

(1) Income tax benefit in Corporate and unallocated costs includes the tax impact of U.S.

(2) For the definitions of the Special items listed above, refer to Note 14 - Segment Information of our financial statements included in this Form 10-K.

(1) Income tax expense in the year ended December 31, 2023, includes an increase in valuation allowance against foreign net operating loss carryforwards of $30.0 million.

Refer to Note 15 - Income Taxes of our consolidated financial statements included in this Form 10-K for more information.

(2) Depreciation and amortization expense includes accelerated amortization of $14.1 million in the years ended December 31, 2024 and 2023 in Corporate and unallocated costs for an ERP that we are no longer utilizing after we completed our related obligations under the JW Australia Transition Services Agreement during the first quarter of 2024.

In addition, depreciation and amortization expense in the year ended December 31, 2023, includes accelerated depreciation of $9.1 million in North America from reviews of equipment capacity optimization.

(3) Net legal and professional expenses and settlements include non-recurring transformation journey expenses of $59.2 million, $26.1 million, and $3.8 million in the years ended December 31, 2024, 2023 and 2022, respectively.

These expenses primarily relate to the engagement of one transformation consultant for a period spanning from the third quarter of 2023 through the end of 2024, for which we incurred $40.7 million and $20.0 million in the years ended December 31, 2024 and 2023, respectively.

Additionally, net legal and professional expenses and settlements include amounts relating to litigation of historic legal matters of $2.8 million and $1.8 million in the years ended December 31, 2024 and 2023, respectively, and ($10.5) million of income resulting from a legal settlement, partially offset by $3.9 million in legal expenses relating primarily to litigation in the year ended December 31, 2022.

(4) Goodwill impairment charges in the year ended December 31, 2024, consist of a $63.4 million goodwill impairment charge associated with our Europe reporting unit, and a $31.4 million goodwill impairment charge in our North America segment related to the court-ordered divestiture of Towanda.

Goodwill impairment charges in the year ended December 31, 2022, consist of a goodwill impairment charge of $54.9 million associated with our Europe reporting unit.

(5) Represents severance, accelerated depreciation and amortization, equipment relocation and other expenses directly incurred as a result of restructuring events.

The restructuring charges primarily relate to charges incurred to change the operating structure, eliminate certain roles, and close certain manufacturing facilities in our North America and Europe segments.

(6) For the years ended December 31, 2024 and 2023, $11.8 million and $1.5 million, respectively, of product and inventory-related charges related to announced facility closures were detrimental to Adjusted EBITDA.

(7) M&A related costs consists primarily of legal and professional expenses related to the court-ordered divestiture of Towanda.

(8) Net gain on sale of business, property, and equipment in the year ended December 31, 2024, primarily relates to the sale of our business in St.

Kitts and properties in Chile, Mexico, and Klamath Falls, Oregon.

Net gain on sale of business, property and equipment in the year ended December 31, 2023, primarily relates to the sale of properties in the United Kingdom, Australia, and Klamath Falls, Oregon.

Net gain on sale of business, property and equipment in the year ended December 31, 2022, primarily relates to the sale of property in Phoenix, Arizona.

(9) Loss on extinguishment and refinancing of debt of $1.9 million in the year ended December 31, 2024, associated with an amendment of our Term Loan Facility and redemption of the remaining $200.0 million of our 4.63% Senior Notes.

Loss on extinguishment and refinancing of debt of $6.5 million in the year ended December 31, 2023, is related to the redemption of $250.0 million of our 6.25% Senior Secured Notes and $200.0 million of our 4.63% Senior Notes.

(10) Represents non-cash equity-based compensation expense related to the issuance of share-based awards.

(11) Represents a settlement loss associated with our U.S.

defined benefit pension plan resulting from a one-time lump sum payment offered to pension plan participants.

Refer to Note 26 - Employee Retirement and Pension Benefits of our consolidated financial statements included in this Form 10-K for more information.

(12) Non-cash foreign exchange transaction/translation gain primarily associated with fair value adjustments of foreign currency derivatives and revaluation of balances denominated in foreign currencies.

(13) Other special items not core to ongoing business activity include:

(i) in the year ended December 31, 2024, a loss of $4.8 million of cumulative foreign currency translation adjustments related to the substantial liquidation of a foreign subsidiaries in Chile and Mexico in our North America segment;

(ii) in the year ended December 31, 2023, ($3.1) million in income from short-term investments and forward contracts related to the JW Australia divestiture in Corporate and unallocated costs, ($2.8) million in adjustments to compensation and non-income taxes associated with exercises of legacy equity awards in our Europe segment, and $2.2 million in costs that do not meet the U.S.

GAAP definition of restructuring, primarily related to the closure of certain facility in our Europe segment;

(iii) in the year ended December 31, 2022, $3.3 million relating primarily to exit costs for executives in Corporate and unallocated costs, ($2.0) million relating to a credit received for overpayment of utility expenses in our North America segment, and $2.6 million and $16.3 million in our North America and Europe segments, respectively, in costs that do not meet the U.S.

GAAP definition of restructuring, primarily related to the closure of certain facilities.

To conform with the current period presentation, certain amounts in prior period information have been reclassified.

Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023

(amounts in thousands) December 31, 2023 December 31, 2022

Net revenues from external customers % Variance

Year Ended December 31,

(amounts in thousands) 2024 2023 Variance

Net revenues from external customers

North America $ 2,708,371 $ 3,123,056 (13.3) %

15 unchanged sentences

(1) Adjusted EBITDA from continuing operations is a financial measure that is not calculated in accordance with GAAP.

For a discussion of our presentation of Adjusted EBITDA from continuing operations, see Note 14 - Segment Information of our financial statements included in this Form 10-K.

Refer to the calculation of Adjusted EBITDA from continuing operations for a discussion of the Special items listed above.

North America

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The decrease was primarily due to a decrease in Core Revenues of 13%.

Core Revenues decreased due to an 8% unfavorable volume/mix driven by weakened market demand, partially offset by a 4% benefit from price realization.

Adjusted EBITDA from continuing operations in North America increased $29.3 million to $382.2 million, or 8.3%, in the year ended December 31, 2023 from $352.9 million in the year ended December 31, 2022.

The increase was primarily due to favorable price/cost and positive productivity, partially offset by unfavorable volume/mix and higher SG&A.

The increase in SG&A was primarily driven by increased performance-based variable compensation and the impact of inflation on labor expenses, partially offset by a reduction in bad debt expense due to improved collections.

Additionally, a decrease in other income, net, was primarily driven by net pension expense in the current period compared to gains in the same period last year, partially offset by income recognized for a refund of deposits for antidumping duties and an ERC during the year ended December 31, 2023.

Core Revenues decreased due to an 13% unfavorable volume/mix driven by weaker market demand and a shift in demand to lower priced products.

Adjusted EBITDA from continuing operations in North America decreased $128.1 million, or 33.5%, to $254.1 million in the year ended December 31, 2024, from $382.2 million in the year ended December 31, 2023.

The decrease was primarily due to unfavorable volume mix and price/cost, partially offset by improved productivity.

Net revenues in Europe decreased $114.1 million, or 9.7%, to $1,067.2 million in the year ended December 31, 2024, from $1,181.3 million in the year ended December 31, 2023.

1 unchanged sentence

Core Revenues decreased due to unfavorable volume/mix of 11% primarily due to market softness across the region, partially offset by a 1% benefit from price realization.

Adjusted EBITDA from continuing operations in Europe increased $7.1 million, or 9.6%, to $81.5 million in the year ended December 31, 2023 from $74.3 million in the year ended December 31, 2022.

The increase was primarily due to favorable productivity and positive price/cost, partially offset by unfavorable volume/mix.

Adjusted EBITDA from continuing operations in Europe decreased $13.7 million, or 16.9%, to $67.7 million in the year ended December 31, 2024, from $81.5 million in the year ended December 31, 2023.

The decrease was primarily due to unfavorable volume/mix and price/cost, partially offset by favorable productivity.

Corporate and unallocated costs

Corporate and unallocated costs increased by $4.8 million, or 6.2%, to $83.2 million in the year ended December 31, 2023, from $78.4 million in the year ended December 31, 2022.

The increase in cost is primarily due to losses on foreign exchange transactions in the current period compared to gains in the same period last year, and a reduction in the recovery of cost from interest received on impaired notes, partially offset by lower labor costs due to reduced headcount.

Corporate and unallocated costs decreased by $36.7 million, or 44.1%, to $46.5 million in the year ended December 31, 2024, from $83.2 million in the year ended December 31, 2023.

The decrease in cost was primarily due to a decrease in performance-based variable compensation expense, lower insurance expense due to favorable claims experience, an increase in cash received on investment in real estate, reduction in non-transformational professional fees and corporate function expense savings in the current year, partially offset by an increase in cloud and software application costs.

Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022

(dollars in thousands) December 31, 2022 December 31, 2021

Net revenues from external customers % Variance

Year Ended December 31,

(amounts in thousands) 2023 2022 % Variance

Net revenues from external customers

North America $ 3,123,056 $ 3,259,353 (4.2) %

15 unchanged sentences

(1) Adjusted EBITDA from continuing operations is a financial measure that is not calculated in accordance with GAAP.

For a discussion of our presentation of Adjusted EBITDA from continuing operations, see Note 14 - Segment Information to our financial statements included in this Form 10-K.

Refer to the calculation of Adjusted EBITDA from continuing operations for a discussion of the Special items listed above.

North America

Net revenues in North America increased $430.1 million, or 15.2%, to $3,259.4 million in the year ended December 31, 2022 from $2,829.2 million in the year ended December 31, 2021.

The increase was primarily due to an increase in Core Revenues of 15%.

Core Revenues increased due to a 14% benefit from price realization mostly related to significant cost inflation, and positive volume/mix of 1%.

Adjusted EBITDA in North America remained relatively consistent at $352.9 million in the year ended December 31, 2022 from $352.9 million in the year ended December 31, 2021.

While Adjusted EBITDA increased slightly primarily driven by improved volume/mix and productivity, the increase was offset by higher SG&A expenses.

Net revenues in North America decreased $136.3 million, or 4.2%, to $3,123.1 million in the year ended December 31, 2023, from $3,259.4 million in the year ended December 31, 2022.

The decrease was primarily due to a decrease in Core Revenues of 4.0%.

Core Revenues decreased due to an 8% unfavorable volume/mix driven by weakened market demand, partially offset by a 4% benefit from price realization.

Adjusted EBITDA from continuing operations in North America increased $29.3 million to $382.2 million, or 8.3%, in the year ended December 31, 2023, from $352.9 million in the year ended December 31, 2022.

The increase was primarily due to favorable price/cost and positive productivity, partially offset by unfavorable volume/mix and higher SG&A.

Net revenues in Europe decreased $103.2 million, or 8.0%, to $1,181.3 million in the year ended December 31, 2023, from $1,284.5 million in the year ended December 31, 2022.

The decrease was primarily due to a 12% adverse impact from foreign exchange, partially offset by an increase in Core Revenues of 7%.

Core Revenues increased due to a 11% benefit from price realization mostly related to significant cost inflation, partially offset by lower volume/mix of 4%.

Adjusted EBITDA in Europe decreased $53.0 million, or 41.6%, to $74.3 million in the year ended December 31, 2022 from $127.3 million in the year ended December 31, 2021.

The decrease was primarily due to lower volume/mix, higher SG&A expenses, and negative price/cost, partially offset by improved productivity.

The decrease was primarily due to a decrease in Core Revenues of 9%.

Core Revenues decreased due to unfavorable volume/mix of 15% primarily due to market softness across the region, partially offset by a 7% benefit from price realization.

Adjusted EBITDA from continuing operations in Europe increased $7.1 million, or 9.6%, to $81.5 million in the year ended December 31, 2023, from $74.3 million in the year ended December 31, 2022.

The increase was primarily due to favorable productivity and positive price/cost, partially offset by unfavorable volume/mix.

Corporate and unallocated costs

Corporate and unallocated costs decreased in the year ended December 31, 2022 by $9.0 million, or 10.3%, compared to the year ended December 31, 2021 primarily due to the recovery of cost from interest received on impaired notes, a gain on foreign exchange transactions, reduced legal and professional fees, and insurance recoveries, partially offset by increased variable compensation and self-insurance costs in the current periods.

Corporate and unallocated costs increased by $4.8 million, or 6.2%, to $83.2 million in the year ended December 31, 2023, from $78.4 million in the year ended December 31, 2022.

Liquidity and Capital Resources

4 unchanged sentences

Inventories fluctuate for raw materials that have long delivery lead times, as we work through prior shipments and take delivery of new orders.

As of December 31, 2023, we had total liquidity (a non-GAAP measure) of $750.6 million, consisting of $288.3 million in unrestricted cash, $462.3 million available for borrowing under the ABL Facility, compared to total liquidity of $575.2 million as of December 31, 2022 (on a continuing operations basis and excluding JW Australia).

The increase in total liquidity was primarily due to both higher cash balances and lower borrowings on our ABL Facility at December 31, 2023 compared to December 31, 2022.

As of December 31, 2023, our cash balances, including $0.8 million of restricted cash, consisted of $72.9 million in the U.S.

and $216.3 million in non-U.S.

As of December 31, 2024, we had total liquidity (a non-GAAP measure) of $566.7 million, consisting of $150.3 million in unrestricted cash, $416.4 million available for borrowing under the ABL Facility, compared to total liquidity of $750.6 million as of December 31, 2023.

The decrease in total liquidity was primarily due to lower cash balances at December 31, 2024, compared to December 31, 2023.

As of December 31, 2024, our cash balances, including $0.7 million of restricted cash, consisted of $48.6 million in cash located in the U.S.

and $102.4 million in cash located outside of the U.S.

held by our non-U.S.

subsidiaries.

The company repatriated $21.8 million and $132.8 million from non-U.S.

subsidiaries during the year ended December 31, 2023 and December 31, 2022, respectively.

The Company utilized cash repatriated from non-U.S.

subsidiaries to repay a portion of the outstanding ABL Facility during the year ended December 31, 2022.

Based on our current and forecasted level of operations and seasonality of our business, we believe that cash provided by operations and other sources of liquidity, including cash, cash equivalents, and availability under our revolving credit facilities, will provide adequate liquidity for ongoing operations, planned capital expenditures and other investments, and debt service requirements for at least the next twelve months.

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We may, from time to time, seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open market purchases, privately negotiated transactions or otherwise.

Such repurchases or exchanges, if any, will be on such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

Such repurchases or exchanges, if there are any, will be on such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

The amounts involved may be material.

5 unchanged sentences

• Long-term debt and interest obligations – As of December 31, 2024, our outstanding debt balance was $1,192.0 million.

See Note 12- Long-Term Debt of our consolidated financial statements for additional details regarding the timing of expected future principal payments.

Refer to Note 12 - Long-Term Debt to our consolidated financial statements included in this Form 10-K for more information regarding the timing of expected future principal payments.

Interest on long-term debt is calculated based on debt outstanding and interest rates in effect on December 31, 2024, taking into account scheduled maturities and amortization payments.

1 unchanged sentence

• Finance and operating lease obligations – As of December 31, 2024, our remaining contractual commitments for finance and operating leases was $176.6 million.

See Note 8 - Leases of our consolidated financial statements for additional details regarding the timing of expected future payments.

Refer to Note 8 - Leases to our consolidated financial statements included in this Form 10-K for additional details regarding the timing of expected future payments.

• Purchase obligations – As of December 31, 2024, we have purchase obligations of $73.2 million due in 2025 and $42.2 million due in 2026 and thereafter.

2 unchanged sentences

Borrowings and Refinancings

In July 2021, we refinanced our existing Term Loan Facility and ABL Facility by issuing replacement loans that aggregated to $550.0 million in principal amount under the Term Loan Facility and added $100.0 million in potential additional revolving loan capacity to our ABL Facility.

In June 2023, we amended the Term Loan Facility to replace LIBOR with a Term SOFR based rate as the successor benchmark rate and made certain other technical amendments and related conforming changes.

All other material terms and conditions were unchanged.

On August 3, 2023, we redeemed all $250.0 million of our 6.25% Senior Secured Notes and $200.0 million of our 4.63% Senior Notes.

In August 2023, we redeemed all $250.0 million of our 6.25% Senior Secured Notes and $200.0 million of our 4.63% Senior Notes.

The Company recognized a pre-tax loss of $6.5 million on the redemption in year ended December 31, 2023, consisting of $3.9 million in call premium and $2.6 million in accelerated amortization of debt issuance costs.

In January 2024, we amended the Term Loan Facility to lower the applicable margin for replacement term loans, remove certain provisions no longer relevant to the parties, and make certain other technical amendments related to related conforming changes.

Pursuant to the amendment, replacement term loans bear interest at SOFR plus a margin of 1.75% to 2.00% depending on JWI’s corporate credit ratings, compared to a margin of 2.00% to 2.25% under the previous amendment.

All other material terms and conditions of the Term Loan Agreement were unchanged.

As of December 31, 2023, we were in compliance with the terms of all of our Credit Facilities and the indentures governing the Senior Notes.

In August 2024, we issued $350.0 million of Senior Notes, bearing interest at 7.00%, the proceeds of which were utilized to repay $150.0 million of the outstanding balance of our Term Loan Facility and redeemed the remaining $200.0 million of our 4.63% Senior Notes in September 2024.

The Company recognized a pre-tax loss of $0.5 million on the redemption resulting from accelerated amortization of debt issuance costs.

In December 2007, we entered into thirty-year mortgage notes secured by land and buildings in Denmark with principal payments which began in 2018.

In October 2024, we repaid the entire remaining principal balance of the mortgage notes of DKK 142.5 million ($20.7 million).

As of December 31, 2024, we were in compliance with the terms of all our Credit Facilities and the indentures governing the Senior Notes.

Our results have been and will continue to be impacted by substantial changes in our net interest expense throughout the periods presented and into the future.

See Note 12 - Long-Term Debt of our consolidated financial statements for additional details.

Refer to Note 12 - Long-Term Debt to our consolidated financial statements included in this Form 10-K for more information.

Cash Flows (1)

The following table summarizes the changes to our cash flows for the periods presented:

(amounts in thousands) December 31, 2023 December 31, 2022 December 31, 2021

Year Ended December 31,

(amounts in thousands) 2024 2023 2022

Cash provided by (used in):

3 unchanged sentences

Effect of changes in exchange rates on cash and cash equivalents (10,344) 7,074 (19,315)

7,074 (19,315) (21,800)

Net change in cash and cash equivalents $ (138,100) $ 68,279 $ (176,022)

(1) C ash flow information is inclusive of cash flows from JW Australia as discontinued operations through the divestiture date of July 2, 2023.

(1) Cash flow information for the year ended December 31, 2023 and 2022 is inclusive of cash flows from JW Australia as discontinued operations through the divestiture date of July 2, 2023.

Cash Flow from Operations

Net cash provided by operating activities decreased $239.0 million to $106.2 million in the year ended December 31, 2024, compared to $345.2 million in the year ended December 31, 2023.

The decreased operating cash flow was primarily due to unfavorable change in earnings of $251.5 million and an unfavorable impact from accrued expenses of $39.1 million, due primarily to higher payments of annual variable compensation for 2023 performance, partially offset by a $9.4 million improvement in net cash provided by our working capital accounts.

The impact of accounts receivable, net of $91.4 million was favorable in the year ended December 31, 2024, compared to the year ended December 31, 2023, which was primarily due to decreased sales and slightly improved collections.

The $28.1 million favorable impact from accounts payable is primarily due to improved payment terms with suppliers.

The $110.1 million unfavorable impact of inventory is primarily due to the prior year benefit from intentional, one-time reductions not being repeated in the current year, as the current year began with a more normalized inventory level as compared to the prior year.

Further, the unfavorable impact of inventory was also driven by investments in inventory levels to aid in delivering improved service levels and lead times to our customers.

Net cash provided by operating activities increased $314.9 million to a $345.2 million source of cash in the year ended December 31, 2023, compared to a $30.3 million source of cash in the year ended December 31, 2022.

3 unchanged sentences

Cash flow provided by Accounts payable was $58.8 million favorable compared to the year ended December 31, 2022, which was primarily due to lower raw material inflation on purchases in the current year as compared to prior year, partially offset by demand planning that drove moderated purchasing.

Net cash provided by operating activities decreased $145.3 million to a $30.3 million source of cash in the year ended December 31, 2022 compared to a $175.7 million source of cash in the year ended December 31, 2021 .

The decrease in cash provided by operating activities was primarily due to increased working capital and decreased earnings in the year ended December 31, 2022, partially offset by non-recurrence of legal settlements paid in 2021.

Cash Flow from Investing Activities

Net cash used in investing activities was $153.3 million in the year ended December 31, 2024, compared to cash provided by investing activities of $279.2 million in the year ended December 31, 2023, primarily driven by $365.6 million proceeds (payments) related to the sale of JW Australia during the year ended December 31, 2023, and an increase in capital expenditures of $62.8 million.

Net cash provided by (used in) investing activities improved to a $279.2 million source of cash in the year ended December 31, 2023, compared to a $67.0 million use of cash in the year ended December 31, 2022, primarily driven by $365.6 million in net proceeds (payments) related to the sale of JW Australia, partially offset by an increase in capital expenditures of $18.7 million and a decrease in cash received from the recovery of cost from interest received on impaired notes of $10.4 million.

Net cash used in investing activities decreased $25.3 million to a $67.0 million use of cash in the year ended December 31, 2022 compared to a $92.4 million use of cash in the year ended December 31, 2021 primarily due to cash received from the recovery of cost from interest received on impaired notes of $14.0 million, an increase in cash received from the sale of property and equipment, and a reduction in capital expenditures.

Cash Flow from Financing Activities

Net cash used in financing activities decreased $482.5 million to $80.6 million in the year ended December 31, 2024, compared to $563.2 million in the year ended December 31, 2023, primarily due to net debt payments and payments of debt extinguishment costs of $55.2 million in the year ended December 31, 2024, compared to net debt payments and payments of debt extinguishment costs of $561.3 million in the year ended December 31, 2023.

This decrease is partially offset by the repurchases of common stock of $24.3 million during the year ended December 31, 2024.

Net cash used in financing activities increased $443.1 million to $563.2 million in the year ended December 31, 2023, compared to $120.0 million in the year ended December 31, 2022, primarily due to net debt payments and payments of debt extinguishment costs of $561.3 million in the year ended December 31, 2023, compared to net debt borrowings of $12.7 million in the year ended December 31, 2022, partially offset by the non-recurrence of repurchases of our Common Stock of $132.0 million in the year ended December 31, 2022.

Net cash used in financing activities decreased $281.2 million to $120.0 million in the year ended December 31, 2022 compared to $401.2 million in the year ended December 31, 2021, primarily due to a decrease of $191.7 million in repurchases of our Common Stock and net debt borrowings of $12.7 million in the year ended December 31, 2022, compared to net debt payments and payments of debt extinguishment cost of $86.1 million in the year ended December 31, 2021.

Holding Company Status

We are a holding company that conducts all of our operations through subsidiaries, and we rely on dividends or advances from our subsidiaries to fund the holding company.

We are a holding company that conducts all our operations through subsidiaries, and we rely on dividends or advances from our subsidiaries to fund the holding company.

The majority of our operating income is derived from JWI, our main operating subsidiary.

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We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which may differ from these estimates.

The following discussion highlights the estimates we believe are critical and should be read in conjunction with the consolidated financial statements included in Part II, Item 8 of this Form 10-K.

The following discussion highlights the estimates we believe are critical and should be read in conjunction with the consolidated financial statements included in this Form 10-K.

We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their acquisition date fair values.

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Goodwill is tested for impairment on an annual basis during the fourth quarter and between annual tests if indicators of potential impairment exist.

Current accounting guidance provides an entity the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount.

Current accounting guidance provides an entity with the option to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If we do not perform a qualitative assessment, or if we determine that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, we perform a quantitative goodwill impairment test.

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Absent an indication of fair value from a potential buyer or similar specific transactions, we believe that the use of these methods provides a reasonable estimate of a reporting unit’s fair value.

Fair value computed by these models is arrived at using a number of factors and inputs.

Fair value computed by these models is arrived at using several factors and inputs.

There are inherent uncertainties, however, related to fair value models, the inputs, factors and our judgment in applying them to this analysis.

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Under the income approach, the fair value of a reporting unit is based on a discounted cash flow analysis of management's short-term and long-term forecast of operating performance.

This analysis contains significant assumptions and estimates including revenue growth rates, expected EBITDA margins, discount rates, capital expenditures, and terminal growth rates.

This analysis contains significant assumptions and estimates including revenue growth rates, expected EBITDA margins, discount rates, capital expenditures, income tax rates, and terminal growth rates.

Under the market approach, we utilized a guideline company method in which the fair value of the reporting unit is based on weighting the financial multiples of comparable companies and applying a control premium.

Changes in assumptions or estimates used in our goodwill impairment testing could materially affect the determination of the fair value of a reporting unit, and therefore, could eliminate the excess of fair value over carrying amount of a reporting unit and, in some cases, could result in impairment.

Such changes in assumptions could be caused by items such as a loss of one or more significant customers, decline in the demand for our products due to changing economic conditions, or failure to control cost increases above what can be recouped in sale price increases.

Such changes in assumptions could be caused by items such as prolonged deterioration in economic conditions, a further decline in projected future cash flows, loss of one or more significant customers, failure to control cost increases above what can be recouped in sale price increase, or increases in the discount rates.

These types of changes would negatively affect our profits, revenues, and growth over the long term and such a decline could significantly affect the fair value assessment of our reporting units and cause our goodwill to become impaired.

During the year ended 2022, we identified three reporting units for the purpose of conducting our goodwill impairment assessment:

Prior to 2023, we identified three reporting units for the purpose of conducting our goodwill impairment assessment:

North America, Europe and Australasia.

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In determining our reporting units, we considered (i) whether an operating segment or a component of an operating segment was a business, (ii) whether discrete financial information was available, and (iii) whether the financial information is regularly reviewed by management of the operating segment.

During the year ended December 31, 2022, upon the results of our interim impairment analysis, we concluded that the carrying amount of our Europe reporting unit exceeded its fair value, and we recorded a goodwill impairment charge of $54.9 million, representing a partial impairment of goodwill assigned to the Europe reporting unit.

In addition, we determined that our North America reporting unit was not impaired.

We performed our annual impairment assessment during the fourth quarter of 2023 using a quantitative analysis for our North America and Europe reporting units.

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We determined the fair value of our Europe reporting unit would have to decline by approximately 3% to be considered for potential impairment.

Keeping all other assumptions consistent, an increase in the discount rate of 1% would result in the carrying amount exceeding fair value by approximately 1% for our Europe reporting unit.

As further described below, we recorded an impairment of goodwill for our Europe reporting unit during the third quarter of 2022.

During the third quarter of 2024, the Company updated its financial forecast for the Europe reportable segment to reflect anticipated macroeconomic conditions of prolonged elevated interest rates leading to reduced revenue growth expectations.

The end of the third fiscal quarter also marks the conclusion of our generally heavier seasonal sales period and our European net sales were negatively impacted by weaker market demand.

Accordingly, the Company determined that a triggering event occurred requiring an interim goodwill impairment test for its European reporting unit as of September 28, 2024.

Based upon the results of our interim impairment assessment, we concluded the carrying value of our Europe reporting unit exceeded its fair value, and we recorded a goodwill impairment charge of $63.4 million, representing a partial impairment of goodwill assigned to the Europe reporting unit.

Following this partial impairment, the reporting unit’s carrying amount equaled the fair value.

We believe that our Europe reporting unit is at risk of impairment in the near term if the reporting unit’s operating performance does not improve in line with management’s expectations, or if there is a change in the long-term outlook for the business or in other factors, such as the discount rate.

The current goodwill impairment analysis for our Europe reporting unit incorporates mid-to-low market outlook growth assumptions and realization of certain improvement plans.

During the quarter ended September 24, 2022, management identified various qualitative and quantitative factors which collectively indicated a triggering event had occurred within our North America and Europe reporting units.

These factors included the macroeconomic environment in each region including increasing interest rates, persistent inflation, and operational inefficiencies attributable to ongoing global supply chain disruptions, the continuing geopolitical environment in Europe associated with the conflict between Russia in Ukraine, and foreign exchange fluctuations.

These factors have negatively impacted our business performance.

Based upon the results of our interim impairment analysis, we concluded that the carrying amount of our Europe reporting unit exceeded its fair value, and we recorded a goodwill impairment charge of $54.9 million, representing a partial impairment of goodwill assigned to the Europe reporting unit.

In addition, we determined that our North America reporting unit was not impaired.

We performed our annual impairment assessment during the fourth quarter of 2022 and 2021 using a quantitative analysis for each of our reporting units.

No indication of goodwill impairment was identified.

We performed our annual impairment assessments during the fourth quarter.

The Company elected to perform a qualitative analysis as of the fourth quarter for the Europe reporting unit.

Our analysis did not determine that it was more likely than not that the carrying value of the Europe reporting unit exceeded the fair value.

During the fourth quarter, we quantitatively determined that the fair value of our North America reporting unit exceeded its net carrying amount and no goodwill impairment existed.

We determined that the fair value of our North America reporting unit would have to decline by less than 10% to be considered impaired.

We believe that our Europe and North America reporting units are at risk of impairment in the near term if the reporting units’ operating performance does not improve in line with management’s expectations, or if there is a change in the long-term outlook for the business or in other factors, such as the discount rate.

The current goodwill impairment analysis for our Europe and North America reporting units incorporates mid-to-low market outlook growth assumptions and yielding the benefits of our transformation initiatives and strategic footprint optimization.

Income taxes are accounted for under the asset and liability method.

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We evaluate both the positive and negative evidence that is relevant in assessing whether we will realize the deferred tax assets.

A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not

A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized.

This projected realization is directly related to our future projections of the performance of our business and management’s planning initiatives at any point in time.

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Certain subsidiaries file separate tax returns in certain countries and states.

federal, state and foreign income taxes refundable and payable are reported in other current assets and other current liabilities in the consolidated balance sheets as of December 31, 2023 and December 31, 2022.

federal, state and foreign income taxes refundable and payable are reported in other current assets and other current liabilities in the consolidated balance sheets as of December 31, 2024 and 2023.

We record interest and penalties on amounts due to tax authorities as a component of income tax expense in the consolidated statements of operations.

We have elected to account for the impact of GILTI in the period in which it is incurred.

The Company continues to monitor and evaluate legislative developments related to the Global Anti-Base Erosion Proposal (“GloBE”) established by the Organization of Economic Cooperation and Development’s (“OECD”) Pillar Two framework.

The Company continues to monitor and evaluate legislative developments related to GloBE established by the OECD Pillar Two framework.

Several countries in which the Company’s subsidiaries operate have adopted those rules into legislation.

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Share-based Compensation Plan

We have share-based compensation plans that provide for compensation to employees through various grants of share-based instruments.

We have share-based compensation plans that provide compensation to employees through various grants of share-based instruments.

We apply the fair value method of accounting using the Black-Scholes option-pricing model to determine the compensation expense for stock options.

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The expected dividend yield rate is 0% which is consistent with the expected dividends to be paid on common stock.

For PSUs issued prior to 2021, the number of PSUs that vest is determined by a payout factor consisting of equally weighted performance measures of Adjusted EBITDA and free cash flow, each as reported over the applicable three-year performance period and is adjusted based upon a market condition measured by our relative total shareholder return (“TSR”) over the applicable three-year performance period as compared to the TSR of the Russell 3000 index.

For PSUs issued in 2021 and thereafter, the number of PSUs that vest is determined by a payout factor consisting of equally weighted pre-set three-year performance targets on return on invested capital (“ROIC”) and TSR.

For PSUs issued prior to 2021, the number of PSUs that vest is determined by a payout factor consisting of equally weighted performance measures of Adjusted EBITDA and Free Cash Flow, each as reported over the applicable three-year performance period and is adjusted based upon a market condition measured by our TSR over the applicable three-year performance period as compared to the TSR of the Russell 3000 index.

For PSUs issued in 2021 and thereafter, the number of PSUs that vest is determined by a payout factor consisting of equally weighted pre-set three-year performance targets on ROIC and TSR.

The fair value of the award is estimated using a Monte Carlo simulation approach in a risk-neutral framework to model future stock price movements based on historical volatility, risk free rates of return, and correlation matrix.

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The discount rate utilized to calculate the projected benefit obligation at the measurement date for our U.S.

pension plan decreased to 5.05% at December 31, 2023 from 5.39% at December 31, 2022.

Lowering the discount rate by 0.25% would increase the U.S.

pension plan increased to 5.57% at December 31, 2024, from 5.05% at December 31, 2023.

Lowering the discount rate by 25 bps would increase the U.S.

pension and post-retirement obligation at December 31, 2024, by approximately $6.2 million and would decrease estimated fiscal year 2025 pension expense by approximately $0.3 million.

Increasing the discount rate by 0.25% would decrease the U.S.

Increasing the discount rate by 25 bps would decrease the U.S.

pension and post-retirement obligation at December 31, 2024, by approximately $6.0 million and would increase estimated fiscal year 2025 pension expense by approximately $0.3 million.

We determine the expected long-term rate of return on plan assets based on the plan assets’ historical long-term investment performance, current asset allocation, and estimates of future long-term returns by asset class.

Holding all other assumptions constant, a 1% increase or decrease in the assumed rate of return on plan assets would decrease or increase, respectively, 2024 net periodic pension expense by approximately $2.7 million.

Holding all other assumptions constant, a 100 bps increase or decrease in the assumed rate of return on plan assets would decrease or increase, respectively, 2025 net periodic pension expense by approximately $2.5 million.

The actuarial assumptions we use in determining our pension benefits may differ materially from actual results because of changing market and economic conditions, higher or lower withdrawal rates, or longer or shorter life spans of participants.

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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-K

Item 7. Management’s Discussion and Analysis