What changed in this filing

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Item 1. Financial Statements

2024-08-08 compared with 2024-05-09 · 150 added, 87 removed, 359 unchanged (40% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

First Quarter Ended

($ in thousands, except per share data) March 31, 2024 April 2, 2023

Second Quarter Ended Six Months Ended

($ in thousands, except per share data) June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

NET SALES $ 1,016,624 $ 920,685 $ 1,950,116 $ 1,820,785

18 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

First Quarter Ended

($ in thousands) March 31, 2024 April 2, 2023

Second Quarter Ended Six Months Ended

($ in thousands) June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

NET INCOME $ 47,884 $ 42,357 $ 82,977 $ 72,530

Other comprehensive income, net of tax:

Foreign currency translation loss ( 32 ) ( 9 )

Total other comprehensive loss ( 32 ) ( 9 )

Other comprehensive income (loss), net of tax:

Foreign currency translation gain (loss) 3 ( 90 ) ( 29 ) ( 99 )

Total other comprehensive income (loss) 3 ( 90 ) ( 29 ) ( 99 )

COMPREHENSIVE INCOME $ 47,887 $ 42,267 $ 82,948 $ 72,431

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

($ in thousands) March 31, 2024 December 31, 2023

($ in thousands) June 30, 2024 December 31, 2023

Current Assets

31 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

First Quarter Ended

($ in thousands) March 31, 2024 April 2, 2023

Six Months Ended

($ in thousands) June 30, 2024 July 2, 2023

CASH FLOWS FROM OPERATING ACTIVITIES

Net income $ 82,977 $ 72,530

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 81,816 71,492

6 unchanged sentences

Accounts payable, accrued liabilities and other 35,379 ( 68,090 )

Net cash provided by (used in) operating activities 35,176 ( 950 )

Net cash provided by operating activities 172,658 178,351

CASH FLOWS FROM INVESTING ACTIVITIES

15 unchanged sentences

Other financing activities ( 75 ) ( 75 )

Net cash provided by financing activities 341,749 32,463

Net cash provided by (used in) financing activities 246,706 $ ( 101,740 )

Net increase in cash and cash equivalents 32,551 11,064

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)

First Quarter Ended March 31, 2024

Second Quarter Ended June 30, 2024

($ in thousands) Common

2 unchanged sentences

Earnings Total

Balance December 31, 2023 $ 203,258 $ ( 999 ) $ 843,078 $ 1,045,337

Balance March 31, 2024 $ 193,930 $ ( 1,031 ) $ 865,637 $ 1,058,536

Net income — — 47,884 47,884

Dividends declared — — ( 12,127 ) ( 12,127 )

Other comprehensive loss, net of tax — ( 32 ) — ( 32 )

Other comprehensive income, net of tax — 3 — 3

Repurchases of shares for tax payments related to the vesting and exercising of share-based grants ( 95 ) — — ( 95 )

Issuance of shares upon exercise of common stock options 21 — — 21

Stock-based compensation expense 4,282 — — 4,282

Balance March 31, 2024 $ 193,930 $ ( 1,031 ) $ 865,637 $ 1,058,536

First Quarter Ended April 2, 2023

Balance June 30, 2024 $ 198,138 $ ( 1,028 ) $ 901,394 $ 1,098,504

Second Quarter Ended July 2, 2023

($ in thousands) Common

2 unchanged sentences

Earnings Total

Balance December 31, 2022 $ 197,003 $ ( 695 ) $ 758,861 $ 955,169

Balance April 2, 2023 $ 194,753 $ ( 704 ) $ 775,773 $ 969,822

Net income — — 42,357 42,357

5 unchanged sentences

Stock-based compensation expense 2,704 — — 2,704

Balance April 2, 2023 $ 194,753 $ ( 704 ) $ 775,773 $ 969,822

Balance July 2, 2023 $ 196,912 $ ( 794 ) $ 801,304 $ 997,422

PATRICK INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (cont.)

Six Months Ended June 30, 2024

($ in thousands) Common

Stock Accumulated Other

Comprehensive Loss Retained

Earnings Total

Balance December 31, 2023 $ 203,258 $ ( 999 ) $ 843,078 $ 1,045,337

Net income — — 82,977 82,977

Dividends declared — — ( 24,661 ) ( 24,661 )

Other comprehensive loss, net of tax — ( 29 ) — ( 29 )

Repurchases of shares for tax payments related to the vesting and exercise of share-based grants ( 14,883 ) — — ( 14,883 )

Issuance of shares upon exercise of common stock options 21 — — 21

Stock-based compensation expense 9,742 — — 9,742

Balance June 30, 2024 $ 198,138 $ ( 1,028 ) $ 901,394 $ 1,098,504

Six Months Ended July 2, 2023

($ in thousands) Common

Stock Accumulated Other

Comprehensive Loss Retained

Earnings Total

Balance December 31, 2022 $ 197,003 $ ( 695 ) $ 758,861 $ 955,169

Net income — — 72,530 72,530

Dividends declared — — ( 19,906 ) ( 19,906 )

Other comprehensive loss, net of tax — ( 99 ) — ( 99 )

Share repurchases under buyback program ( 1,595 ) — ( 10,181 ) ( 11,776 )

Repurchases of shares for tax payments related to the vesting and exercise of share-based grants ( 7,585 ) — — ( 7,585 )

Issuance of shares upon exercise of common stock options 1,143 — — 1,143

Stock-based compensation expense 7,946 — — 7,946

Balance July 2, 2023 $ 196,912 $ ( 794 ) $ 801,304 $ 997,422

See accompanying Notes to Condensed Consolidated Financial Statements.

4 unchanged sentences

The accompanying unaudited condensed consolidated financial statements of Patrick Industries, Inc.

(“Patrick”, the “Company”, "we", "our") contain all adjustments (consisting of normal recurring adjustments) that we believe are necessary to present fairly the Company’s financial position as of March 31, 2024 and December 31, 2023, its results of operations for the first quarter ended March 31, 2024 and April 2, 2023, and its cash flows for the three months ended March 31, 2024 and April 2, 2023.

(“Patrick”, the “Company”, "we", "our") contain all adjustments (consisting of normal recurring adjustments) that we believe are necessary to present fairly the Company’s financial position as of June 30, 2024 and December 31, 2023, its results of operations for the second quarter and six months ended June 30, 2024 and July 2, 2023, and its cash flows for the six months ended June 30, 2024 and July 2, 2023.

Patrick's unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("U.S.

6 unchanged sentences

The second and third quarters are thirteen weeks in duration and the fourth quarter is the remainder of the year.

The first quarter of fiscal year 2024 ended on March 31, 2024 and the first quarter of fiscal year 2023 ended on April 2, 2023.

The second quarter of fiscal year 2024 ended on June 30, 2024 and the second quarter of fiscal year 2023 ended on July 2, 2023.

Reclassified Amounts

11 unchanged sentences

This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss.

This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss

in assessing segment performance and deciding how to allocate resources.

This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

13 unchanged sentences

In the following table, revenue from contracts with customers, net of intersegment sales, is disaggregated by market type and by reportable segment:

First Quarter Ended March 31, 2024

Second Quarter Ended June 30, 2024

($ in thousands) Manufacturing Distribution Total

5 unchanged sentences

Total $ 753,712 $ 262,912 $ 1,016,624

First Quarter Ended April 2, 2023

Second Quarter Ended July 2, 2023

($ in thousands) Manufacturing Distribution Total

5 unchanged sentences

Total $ 688,098 $ 232,587 $ 920,685

Six Months Ended June 30, 2024

($ in thousands) Manufacturing Distribution Total

Recreational Vehicle $ 601,150 $ 269,574 $ 870,724

Marine 291,419 21,574 312,993

Powersports 180,308 6,212 186,520

Manufactured Housing 146,898 183,838 330,736

Industrial 231,480 17,663 249,143

Total $ 1,451,255 $ 498,861 $ 1,950,116

Six Months Ended July 2, 2023

($ in thousands) Manufacturing Distribution Total

Recreational Vehicle $ 507,189 $ 243,343 $ 750,532

Marine 441,538 22,775 464,313

Powersports 62,225 7,066 69,291

Manufactured Housing 129,508 147,889 277,397

Industrial 240,034 19,218 259,252

Total $ 1,380,494 $ 440,291 $ 1,820,785

Contract Liabilities

1 unchanged sentence

Inventories consist of the following:

($ in thousands) March 31, 2024 December 31, 2023

($ in thousands) June 30, 2024 December 31, 2023

Raw materials $ 282,926 $ 269,786

8 unchanged sentences

GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill for the three months ended March 31, 2024 by segment are as follows:

Changes in the carrying amount of goodwill for the six months ended June 30, 2024 by segment are as follows:

($ in thousands) Manufacturing Distribution Total

2 unchanged sentences

Adjustments to preliminary purchase price allocations 16 ( 107 ) ( 91 )

Balance - March 31, 2024

Balance - June 30, 2024

$ 681,143 $ 77,176 $ 758,319

Intangible assets, net consist of the following as of March 31, 2024 and December 31, 2023:

($ in thousands) March 31, 2024 December 31, 2023

Intangible assets, net consist of the following as of June 30, 2024 and December 31, 2023:

($ in thousands) June 30, 2024 December 31, 2023

Customer relationships $ 911,239 $ 729,664

5 unchanged sentences

Intangible assets, net $ 825,315 $ 651,153

Changes in the carrying value of intangible assets for the three months ended March 31, 2024 by segment are as follows:

Changes in the carrying value of intangible assets for the six months ended June 30, 2024 by segment are as follows:

($ in thousands) Manufacturing Distribution Total

2 unchanged sentences

Amortization ( 40,529 ) ( 6,567 ) ( 47,096 )

Balance - March 31, 2024

Adjustments to preliminary purchase price allocations — ( 356 ) ( 356 )

Balance - June 30, 2024

$ 709,098 $ 116,217 $ 825,315

2 unchanged sentences

For each acquisition, the excess of the purchase consideration over the fair value of the net assets acquired is recorded as goodwill, which generally represents the combined value of the Company’s existing purchasing, manufacturing, sales, and systems resources with the organizational talent and expertise of the acquired companies’ respective management teams to maximize efficiencies, market share growth and net income.

The Company completed four acquisitions in the first three months of 2024 (the "2024 Acquisitions").

For the first quarter ended March 31, 2024, net sales included in the Company's condensed consolidated statements of income related to the 2024 Acquisitions were $ 58.1 million, and operating income was $ 11.0 million.

The Company completed two acquisitions in the second quarter of 2024 and six acquisitions in the first six months of 2024 (the "2024 Acquisitions").

For the second quarter and six months ended June 30, 2024, net sales included in the Company's condensed consolidated statements of income related to the 2024 Acquisitions were $ 79.6 million and $ 137.7 million, respectively, and operating income was $ 15.7 million and $ 26.6 million, respectively.

Acquisition-related costs associated with the 2024 Acquisitions were $ 5.0 million.

1 unchanged sentence

For each acquisition, the Company completes its allocation of the purchase price to the fair value of acquired assets and liabilities within a one year measurement period.

The Company completed no acquisitions in the first quarter of 2023.

The Company completed three acquisitions in the second quarter and first six months of 2023.

For the second quarter and six months ended July 2, 2023, net sales included in the Company's condensed consolidated statements of income related to the acquisitions completed in the first six months of 2023 were $ 2.3 million for both periods, and operating income was $ 0.2 million for both periods.

In connection with certain acquisitions, the Company is required to pay additional cash consideration if certain financial results of the acquired businesses are achieved.

The Company records a liability for the estimated fair value of the contingent consideration related to each of these acquisitions as part of the initial purchase price based on the present value of the expected future cash flows and the probability of future payments at the date of acquisition.

Changes in the fair value of contingent consideration for the three months ended March 31, 2024 are as follows:

Changes in the fair value of contingent consideration for the six months ended June 30, 2024 are as follows:

($ in thousands)

Balance - December 31, 2023 $ 8,510

Additions 130

Fair value adjustments (1)

Settlements ( 4,940 )

Balance - March 31, 2024

The following table shows the balance sheet location of the fair value of contingent consideration and the maximum amount of contingent consideration payments the Company may be subject to at March 31, 2024 and December 31, 2023:

($ in thousands) March 31, 2024 December 31, 2023

Balance - June 30, 2024

(1) The Company recorded a measurement period adjustment reducing the estimated fair value of contingent consideration in connection with one of the 2023 acquisitions.

($ in thousands) June 30, 2024 December 31, 2023

Accrued liabilities $ 1,725 $ 7,500

3 unchanged sentences

2024 Acquisitions

The Company completed four acquisitions in the first three months ended March 31, 2024, including the following previously announced acquisition:

The Company completed six acquisitions in the first six months ended June 30, 2024, including the following previously announced acquisition:

Company Segment Description

Sportech, LLC ("Sportech") Manufacturing Leading designer and manufacturer of high-value, complex component solutions sold to powersports original equipment manufacturers ("OEMs"), adjacent market OEMs and the aftermarket, including integrated door systems, roofs, canopies, bumpers, windshields, fender flares and cowls, based in Elk River, Minnesota, acquired in January 2024.

Inclusive of three acquisitions not discussed above, total cash consideration for the 2024 Acquisitions was approximately $ 329.6 million.

Inclusive of five acquisitions not discussed above, total cash consideration for the 2024 Acquisitions was approximately $ 330.9 million.

The preliminary purchase price allocations are subject to valuation activities being finalized, and thus certain purchase accounting adjustments are subject to change within the measurement period as the Company finalizes its estimates.

2023 Acquisitions

The Company completed three acquisitions in the year ended December 31, 2023, including the following previously announced acquisition:

The Company completed three acquisitions in the year ended December 31, 2023, including the following previously announced acquisition (collectively, the “2023 Acquisitions”):

Company Segment Description

2 unchanged sentences

Inclusive of two acquisitions not discussed above, total cash consideration for the 2023 Acquisitions was approximately $ 26.3 million, plus contingent consideration over a two-year period based on future performance in connection with certain acquisitions.

Changes to preliminary purchase accounting estimates recorded in the first quarter ended March 31, 2024 related to the 2023 Acquisitions were immaterial.

Purchase price allocations and all valuation activities in connection with the 2023 Acquisitions have

been finalized.

Changes to preliminary purchase accounting estimates recorded in the second quarter and six months ended June 30, 2024 related to the 2023 Acquisitions were immaterial and relate primarily to the valuation of contingent consideration and property, plant, and equipment.

The following table summarizes the fair values of the assets acquired and the liabilities assumed as of the date of acquisition for the 2024 Acquisitions and 2023 Acquisitions:

5 unchanged sentences

Contingent consideration (1)

— 130 130 1,600

Total consideration $ 319,073 $ 12,064 $ 331,137 $ 27,894

28 unchanged sentences

Non-compete agreements are valued using a discounted cash flow approach, which is a variation of the income approach, with and without the individual counterparties to the non-compete agreements.

Trademarks and patents are valued using the relief-from-royalty method, which applies an estimated royalty rate to forecasted future cash flows, discounted to present value.

Trademarks and patents are valued using the

relief-from-royalty method, which applies an estimated royalty rate to forecasted future cash flows, discounted to present value.

The estimated useful life for customer relationships is 10 years.

The estimated useful life for non-compete agreements is 5 years.

The estimated useful life for patents and developed technology 10 years.

The estimated useful life for patents and developed technology is 10 years.

Trademarks have an indefinite useful life.

Pro Forma Information

The following pro forma information for the first quarter ended March 31, 2024 and April 2, 2023 assumes the 2024 Acquisitions and 2023 Acquisitions occurred as of the beginning of the year immediately preceding each such acquisition.

The following pro forma information for the second quarter and six months ended June 30, 2024 and July 2, 2023 assumes the 2024 Acquisitions and 2023 Acquisitions occurred as of the beginning of the year immediately preceding each such acquisition.

The pro forma information contains the actual operating results of the 2024 Acquisitions and 2023 Acquisitions combined with the results prior to their respective acquisition dates, adjusted to reflect the pro forma impact of the acquisitions occurring as of the beginning of the year immediately preceding each such acquisition.

The pro forma information includes financing and interest expense charges based on incremental borrowings incurred in connection with each transaction.

In addition, the pro forma information includes amortization expense, in the aggregate, related to intangible assets acquired in connection with the transactions of $ 1.8 million and $ 5.6 million, for the first quarter ended March 31, 2024 and April 2, 2023, respectively.

First Quarter Ended

($ in thousands, except per share data) March 31, 2024 April 2, 2023

In addition, the pro forma information includes incremental amortization expense, in the aggregate, related to intangible assets acquired in connection with the transactions of $ 0.1 million and $ 1.5 million, respectively, for the second quarter and six months ended June 30, 2024 and $ 5.4 million and $ 11.0 million, respectively, for the second quarter and six months ended July 2, 2023.

Second Quarter Ended

Six Months Ended

($ in thousands, except per share data) June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Revenue $ 1,016,961 $ 994,719 $ 1,974,975 $ 1,972,587

4 unchanged sentences

STOCK-BASED COMPENSATION

The Company's Board of Directors (the "Board") approved various stock-based grants under the Company’s 2009 Omnibus Incentive Plan in the three months ended March 31, 2024 totaling 213,051 shares in the aggregate at an average fair value of $ 100.08 at grant date for a total fair value at grant date of $ 21.3 million.

The Company recorded expense, net of forfeitures, of approximately $ 5.5 million in the first quarter ended March 31, 2024 for its stock-based compensation plans in the condensed consolidated statements of income.

Stock-based compensation expense of $ 5.2 million was recorded in the first quarter ended April 2, 2023.

As of March 31, 2024, there was approximately $ 34.0 million of total unrecognized compensation cost related to stock-based compensation arrangements granted under incentive plans.

That cost is expected to be recognized over a weighted-average period of 21.9 months.

The Company's Board of Directors (the "Board") approved various stock-based grants under the Company’s 2009 Omnibus Incentive Plan in the six months ended June 30, 2024 totaling 223,011 shares in the aggregate at an average fair value of $ 100.63 per share at grant date for a total fair value at grant date of $ 22.4 million.

The Company recorded expense, net of forfeitures, of approximately $ 4.2 million and $ 9.7 million in the second quarter and six months ended June 30, 2024, respectively, for its stock-based compensation plans in the condensed consolidated statements of income.

Stock-based compensation expense of $ 2.7 million and $ 7.9 million was recorded in the second quarter and six months ended July 2, 2023, respectively.

EARNINGS PER COMMON SHARE

Earnings per common share calculated for the first quarter of 2024 and 2023 is as follows:

First Quarter Ended

($ in thousands, except per share data) March 31, 2024 April 2, 2023

Earnings per common share calculated for the second quarter and first six months of 2024 and 2023 is as follows:

Second Quarter Ended

Six Months Ended

($ in thousands, except per share data) June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Earnings for basic earnings per common share calculation $ 47,884 $ 42,357 $ 82,977 $ 72,530

9 unchanged sentences

An immaterial amount of securities was not included in the computation of diluted earnings per common share as they are considered anti-dilutive for the periods presented.

A summary of total debt outstanding at March 31, 2024 and December 31, 2023 is as follows:

($ in thousands) March 31, 2024 December 31, 2023

A summary of total debt outstanding at June 30, 2024 and December 31, 2023 is as follows:

($ in thousands) June 30, 2024 December 31, 2023

Long-term debt:

7 unchanged sentences

350,000 350,000

Total long-term debt 1,411,250 1,038,125

convertible notes debt discount, net ( 4,668 ) ( 4,917 )

Total debt 1,329,375 1,038,125

convertible notes deferred financing costs, net ( 4,419 ) ( 4,917 )

term loan deferred financing costs, net ( 472 ) ( 548 )

4 unchanged sentences

In January 2024, the Company utilized borrowing capacity under the Revolver due 2027 to fund its acquisition of Sportech as discussed in Note 5 "Acquisitions".

The interest rate for incremental borrowings under the Revolver due 2027 at March 31, 2024 was the Secured Overnight Financing Rate (“SOFR”) plus 1.75 % (or 7.18 %) for the SOFR-based option.

The fee payable on committed but unused portions of the Revolver due 2027 was 0.225 % at March 31, 2024.

Total cash interest paid for the first quarter of 2024 and 2023 was $ 8.5 million and $ 5.8 million, respectively.

The interest rate for incremental borrowings under the Revolver due 2027 at June 30, 2024 was the Secured Overnight Financing Rate (“SOFR”) plus 1.75 % (or 7.19 %) for the SOFR-based option.

The fee payable on committed but unused portions of the Revolver due 2027 was 0.225 % at June 30, 2024.

Total cash interest paid for the second quarter of 2024 and 2023 was $ 31.6 million and $ 26.9 million, respectively, and $ 40.2 million and $ 32.7 million for the comparative six month periods, respectively.

FAIR VALUE MEASUREMENTS

The following table presents fair values of certain assets and liabilities at March 31, 2024 and December 31, 2023:

March 31, 2024 December 31, 2023

The following table presents fair values of certain assets and liabilities as of June 30, 2024 and December 31, 2023:

June 30, 2024 December 31, 2023

($ in millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

Cash equivalents (1)

$ 5.6 $ — $ — $ 6.1 $ — $ —

7.50 % senior notes due 2027 (1)

10 unchanged sentences

$ — $ — $ 1.8 $ — $ — $ 8.5

(1) The carrying amounts of cash equivalents, representing government and other money market funds traded in an active market with relatively short maturities, are reported on the condensed consolidated balance sheet as of March 31, 2024 and December 31, 2023 as a component of "Cash and cash equivalents".

(2) The amounts of these notes listed above are the current fair values for disclosure purposes only, and they are recorded in the Company's condensed consolidated balance sheets as of March 31, 2024 and December 31, 2023 using the interest rate method.

(3) The carrying amounts of our Term loan due 2027 and Revolver due 2027 approximate fair value as of March 31, 2024 and December 31, 2023 based upon their terms and conditions in comparison to the terms and conditions of debt instruments with similar terms and conditions available at those dates.

(1) The amounts of these notes listed above are the current fair values for disclosure purposes only, and they are recorded in the Company's condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023 using the interest rate method.

(2) The carrying amounts of our Term loan due 2027 and Revolver due 2027 approximate fair value as of June 30, 2024 and December 31, 2023 based upon their terms and conditions in comparison to the terms and conditions of debt instruments with similar terms and conditions available at those dates.`

(3) The estimated fair value of the Company's contingent consideration is discussed further in Note 5 "Acquisitions".

The effective tax rate in the first quarter of 2024 and 2023 was 10.6 % and 20.1 %, respectively.

The first quarter of 2024 and 2023 rates include the impact of the recognition of excess tax benefits on share-based compensation that was recorded as a reduction to income tax expense in the amount of $ 6.0 million and $ 2.3 million, respectively.

Cash paid for income taxes, net of refunds, was $ 0.1 million and $ 17.2 million in the first quarter of 2024 and 2023, respectively.

The effective tax rate in the second quarter of 2024 and 2023 was 25.6 % and 26.1 %, respectively, and the effective tax rate for the comparable six month periods was 19.9 % and 23.7 %, respectively.

The first six months of 2024 and 2023 tax rates include the impact of the recognition of excess tax benefits on share-based compensation that was recorded as a reduction to income tax expense in the amount of $ 5.6 million and $ 1.8 million, respectively.

Cash paid for income taxes, net of refunds, was $ 19.1 million and $ 19.2 million in the second quarter and first six months of 2024, respectively, and $ 31.9 million and $ 49.0 million in the second quarter and first six months of 2023, respectively.

SEGMENT INFORMATION

4 unchanged sentences

The tables below present information about the sales and operating income of those segments.

First Quarter Ended March 31, 2024

Second Quarter Ended June 30, 2024

($ in thousands) Manufacturing Distribution Total

2 unchanged sentences

Total sales $ 774,231 $ 265,237 $ 1,039,468

Operating income $ 87,450 $ 23,720 $ 111,170

First Quarter Ended April 2, 2023

Operating income for reportable segments $ 108,752 $ 30,158 $ 138,910

Second Quarter Ended July 2, 2023

($ in thousands) Manufacturing Distribution Total

2 unchanged sentences

Total sales $ 704,291 $ 234,746 $ 939,037

Operating income $ 87,165 $ 18,307 $ 105,472

Operating income for reportable segments $ 95,204 $ 25,839 $ 121,043

Six Months Ended June 30, 2024

($ in thousands) Manufacturing Distribution Total

Net outside sales $ 1,451,255 $ 498,861 $ 1,950,116

Intersegment sales 37,486 4,878 42,364

Total sales $ 1,488,741 $ 503,739 $ 1,992,480

Operating income for reportable segments $ 196,202 $ 53,878 $ 250,080

Six Months Ended July 2, 2023

($ in thousands) Manufacturing Distribution Total

Net outside sales $ 1,380,494 $ 440,291 $ 1,820,785

Intersegment sales 32,612 4,614 37,226

Total sales $ 1,413,106 $ 444,905 $ 1,858,011

Operating income for reportable segments $ 182,369 $ 44,146 $ 226,515

The following table presents a reconciliation of segment operating income to consolidated operating income:

First Quarter Ended

($ in thousands) March 31, 2024 April 2, 2023

Second Quarter Ended Six Months Ended

($ in thousands) June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Operating income for reportable segments $ 138,910 $ 121,043 $ 250,080 $ 226,515

2 unchanged sentences

Consolidated operating income $ 84,689 $ 75,575 $ 144,031 $ 131,809

Unallocated corporate expenses include corporate general and administrative expenses comprised of wages and other compensation, insurance, taxes, supplies, travel and entertainment, professional fees, amortization of inventory step-up adjustments, and other.

Unallocated corporate expenses include corporate general and administrative expenses comprised of wages and other compensation, insurance, taxes, supplies, travel and entertainment, professional fees, acquisition-related transaction costs, amortization of inventory step-up adjustments, and other.

The following table presents an allocation of total assets to the reportable segments of the Company and a reconciliation to consolidated total assets:

(thousands) March 31, 2024 December 31, 2023

($ in thousands) June 30, 2024 December 31, 2023

Manufacturing assets $ 2,453,240 $ 2,071,500

6 unchanged sentences

In December 2022, the Board authorized an increase in the amount of the Company's common stock that may be acquired over the next 24 months under the current stock repurchase program to $ 100 million, including the $ 38.2 million remaining under the previous authorization.

Approximately $ 77.6 million remains in the amount of the Company's common stock that may be acquired under the current stock repurchase program as of March 31, 2024.

Approximately $ 77.6 million remains in the amount of the Company's common stock that may be acquired under the current stock repurchase program as of June 30, 2024.

Under the stock repurchase plan, the Company made repurchases of common stock as follows for the respective periods:

First Quarter Ended

March 31, 2024 April 2, 2023

Second Quarter Ended

Six Months Ended

June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Shares repurchased — 125,189 — 179,809

15 unchanged sentences

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