What changed in this filing

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Item 1. Financial Statements

2024-10-30 compared with 2024-07-30 · 71 added, 22 removed, 326 unchanged (22% of the section changed)

3 unchanged sentences

(In thousands, except per share data)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

20 unchanged sentences

(In thousands)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

Net income $ 125,701 $ 137,843 $ 397,025 $ 471,792

Other comprehensive (loss) income:

Foreign currency translation (loss) gain ( 4,684 ) 2,801 ( 8,352 ) 5,271

Other comprehensive income (loss):

Foreign currency translation gain (loss) 5,066 ( 5,025 ) ( 3,286 ) 245

Unrealized (loss) gain on interest rate swaps, net of the change in taxes of $ 2,192 , $( 305 ), $ 1,909 and $( 202 )

6 unchanged sentences

(In thousands, except share data)

June 30, June 30, December 31,

September 30, September 30, December 31,

2024 2023 2023

30 unchanged sentences

38,083,401 , 38,676,960 and 38,354,829 shares issued and

outstanding at June 30, 2024, June 30, 2023 and

outstanding at September 30, 2024, September 30, 2023 and

December 31, 2023, respectively

8 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

Operating activities

5 unchanged sentences

Equity in earnings of unconsolidated investments, net ( 180 ) ( 235 )

Goodwill impairment — 550

Other 3,123 1,157

14 unchanged sentences

Payments on revolving line of credit ( 1,274,400 ) ( 1,497,501 )

Payments on term loan under credit facility ( 18,750 ) ( 6,250 )

Proceeds from asset-backed financing 623,900 465,500

3 unchanged sentences

Payments on short-term borrowings and current portion of long-term debt ( 8,643 ) ( 19,182 )

Payments of deferred financing costs ( 1,731 ) ( 52 )

Payments of deferred and contingent acquisition consideration — ( 551 )

14 unchanged sentences

Comprehensive

Shares Amount Capital Earnings (Loss) Income Total

Shares Amount Capital Earnings Income (Loss) Total

Balance at December 31, 2023 38,355 $ 38 $ 606,177 $ 699,990 $ 6,582 $ 1,312,787

27 unchanged sentences

Balance at June 30, 2024 38,289 $ 38 $ 626,347 $ 798,204 $ ( 920 ) $ 1,423,669

— — — 125,701 — 125,701

Foreign currency translation

— — — — 5,066 5,066

Interest rate swaps, net of the change in taxes of $ 2,192

— — — — ( 6,577 ) ( 6,577 )

Repurchases of common stock, net of retirements

( 219 ) — — ( 75,632 ) — ( 75,632 )

Share-based compensation

— — 4,047 — — 4,047

Issuance of stock under share-based compensation plans

13 — 2,129 — — 2,129

Declaration of cash dividends

— — — ( 45,894 ) — ( 45,894 )

Balance at September 30, 2024 38,083 $ 38 $ 632,523 $ 802,379 $ ( 2,431 ) $ 1,432,509

Common Stock Additional

1 unchanged sentence

Comprehensive

Shares Amount Capital Earnings Income Total

Shares Amount Capital Earnings Income (Loss) Total

Balance at December 31, 2022 39,069 $ 39 $ 575,776 $ 653,484 $ 5,895 $ 1,235,194

27 unchanged sentences

Balance at June 30, 2023 39,049 $ 39 $ 593,081 $ 854,559 $ 10,853 $ 1,458,532

— — — 137,843 — 137,843

Foreign currency translation

— — — — ( 5,025 ) ( 5,025 )

Interest rate swaps, net of the change in taxes of $( 305 )

— — — — 916 916

Repurchases of common stock, net of retirements

( 385 ) — — ( 138,003 ) — ( 138,003 )

Share-based compensation

— — 4,596 — — 4,596

Issuance of stock under share-based compensation plans

13 — 2,332 — — 2,332

Declaration of cash dividends

— — — ( 42,965 ) — ( 42,965 )

Balance at September 30, 2023 38,677 $ 39 $ 600,009 $ 811,434 $ 6,744 $ 1,418,226

The accompanying Notes are an integral part of the Consolidated Financial Statements.

9 unchanged sentences

You should read the interim Consolidated Financial Statements in conjunction with the Consolidated Financial Statements and accompanying notes in our 2023 Annual Report on Form 10-K.

The results for our three and six-month periods ended June 30, 2024, are not necessarily indicative of the expected results for our fiscal year ending December 31, 2024.

The results for our three and nine-month periods ended September 30, 2024, are not necessarily indicative of the expected results for our fiscal year ending December 31, 2024.

We reduce federal and state income taxes payable by the tax benefits associated with the exercise of nonqualified stock options and the lapse of restrictions on restricted stock awards.

1 unchanged sentence

We record all excess tax benefits as a component of income tax benefit or expense on the Consolidated Statements of Income in the period in which stock options are exercised or restrictions on restricted stock awards lapse.

We recorded excess tax benefits of $ 0.4 million in the second quarter of 2024 compared to $ 0.6 million in the second quarter of 2023 and $ 7.8 million in the six months ended June 30, 2024, compared to $ 5.4 million in the six months ended June 30, 2023.

We recorded excess tax benefits of $ 0.5 million in the third quarter of 2024 compared to $ 0.4 million in the third quarter of 2023 and $ 8.3 million in the nine months ended September 30, 2024, compared to $ 5.9 million in the nine months ended September 30, 2023.

Retained Earnings

We account for the retirement of repurchased shares as a reduction of Retained earnings.

As of June 30, 2024, the Retained earnings on our Consolidated Balance Sheets reflects cumulative net income, the cumulative impact of adjustments for changes in accounting pronouncements, share retirements since the inception of our share repurchase programs of $ 2.5 billion and cumulative dividends of $ 1.2 billion .

As of September 30, 2024, the Retained earnings on our Consolidated Balance Sheets reflects cumulative net income, the cumulative impact of adjustments for changes in accounting pronouncements, share retirements since the inception of our share repurchase programs of $ 2.6 billion and cumulative dividends of $ 1.2 billion .

Accumulated Other Comprehensive (Loss) Income

The table below presents the components of our Accumulated other comprehensive (loss) income balance (in thousands):

June 30, December 31,

September 30, December 31,

2024 2023 2023

29 unchanged sentences

Our participating securities include share-based payment awards that contain a non-forfeitable right to receive dividends and are considered to participate in undistributed earnings with common shareholders.

Participating securities excluded from weighted average common shares outstanding were 208,000 for the three months ended June 30, 2024 and 205,000 for the three months ended June 30, 2023, and 206,000 for the six months ended June 30, 2024 and 209,000 for the six months ended June 30, 2023.

Participating securities excluded from weighted average common shares outstanding were 206,000 for the three months ended September 30, 2024 and 205,000 for the three months ended September 30, 2023, and 206,000 for the nine months ended September 30, 2024 and 207,000 for the nine months ended September 30, 2023.

The table below presents the computation of earnings per share, including the reconciliation of basic and diluted weighted average shares outstanding (in thousands, except per share data):

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2024 2023 2024 2023

33 unchanged sentences

The table below presents our assets and liabilities measured and recorded at fair value on a recurring basis (in thousands):

Fair Value at June 30,

Fair Value at September 30,

Input Level Classification 2024 2023

18 unchanged sentences

Interest rate swap 2 March 9, 2020 September 29, 2022 February 26, 2027 $ 150.0 0.6690 %

For the interest rate swap contracts in effect at June 30, 2024, a portion of the change in the estimated fair value between periods relates to future interest expense.

For the interest rate swap contracts in effect at September 30, 2024, a portion of the change in the estimated fair value between periods relates to future interest expense.

Recognition of the change in fair value between periods attributable to accrued interest is reclassified from Accumulated other comprehensive (loss) income on the Consolidated Balance Sheets to Interest and other non-operating expenses, net on the Consolidated Statements of Income.

These amounts were not material in the three and six-month periods ended June 30, 2024 or June 30, 2023.

These amounts were not material in the three and nine-month periods ended September 30, 2024 or September 30, 2023.

We also have in place a forward-starting interest rate swap contract to extend the hedged period for future interest payments on a portion of our variable rate borrowings.

16 unchanged sentences

The table below presents the components of our debt (in thousands):

September 30,

Variable rate debt

Short-term borrowings $ 7,053 $ —

Current portion of long-term debt:

10 unchanged sentences

Total debt $ 923,829 $ 1,033,897

Credit Facility

On September 30, 2024, we entered into the Third Amended and Restated Credit Agreement (the Amended Agreement) by and among us, as U.S.

Borrower, SCP Distributors Canada Inc., as Canadian Borrower, SCP International, Inc., as Euro Borrower, Wells Fargo Bank, National Association, as Administrative Agent, and certain other lenders party thereto.

The Amended Agreement amended and restated the terms of the Company’s predecessor revolving credit facility principally by increasing its borrowing capacity from $ 750.0 million to $ 800.0 million and extending its maturity date from September 25, 2026 to September 30, 2029.

Otherwise, the Amended Agreement retained the core features of the predecessor credit agreement, including:

• a $ 500.0 million term loan facility;

• an accordion feature permitting us to request one or more incremental term loans or revolving credit facility commitment increases up to $ 250.0 million;

• an option permitting us to extend the maturity date of the revolving credit facility up to two years, subject to various conditions and restrictions;

• sublimits for the issuance of swingline loans and standby letters of credit.

Revolving and term loan borrowings under the Amended Agreement bear interest at a variable rate based on a one-month Term Secured Overnight Financing Rate (Term SOFR), plus an applicable margin.

The term loan under the Amended Agreement continues to require quarterly amortization payments, with all remaining principal due on the term loan maturity date of September 25, 2026.

Substantially all of the other terms of the term loan and revolving credit facility in the Amended Agreement remain similar to the predecessor credit agreement.

The Amended Agreement continues to require us to maintain a maximum average total leverage ratio and a minimum fixed charge coverage ratio consistent with the terms specified in the predecessor credit agreement.

All obligations under the Amended Agreement continue to be guaranteed on an unsecured basis by substantially all of our existing and future domestic subsidiaries.

The Amended Agreement also continues to contain various customary affirmative and negative covenants and events of default.

Failure to comply with any of the financial covenants or the occurrence of any other events of default would permit the lenders to, among other things, require immediate payment of all amounts outstanding under the Amended Agreement.

Receivables Securitization Facility

Our accounts receivable securitization facility (the Receivables Facility) provides for the sale of certain of our receivables to a wholly-owned subsidiary (the Securitization Subsidiary).

5 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