What changed in this filing

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Item 1. Financial Statements

2022-11-08 compared with 2022-08-10 · 108 added, 102 removed, 584 unchanged (26% of the section changed)

4 unchanged sentences

(In thousands, unaudited)

June 30, December 31,

September 30, December 31,

2022 2021 2021

35 unchanged sentences

(In thousands except per-share amounts, unaudited)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2022 2021 2022 2021

24 unchanged sentences

Diluted $ 2.06 $ 1.70 $ 6.40 $ 4.52

Number of shares outstanding

Weighted average number of shares outstanding

Basic 42,813 43,276 43,044 43,287

6 unchanged sentences

(In thousands except per-share data, unaudited)

Three Months Ended June 30, 2022 and 2021

Three Months Ended September 30, 2022 and 2021

Common Stock Additional Paid-in Retained Accumulated Other Comprehensive Treasury

Shares Par Value Capital Earnings Income (Loss) Stock Total

Balance at March 31, 2022 43,159 $ 433 $ 289,773 $ 990,611 $ ( 27,725 ) $ ( 21,281 ) $ 1,231,811

Balance at June 30, 2022 42,906 $ 433 $ 293,720 $ 1,072,959 $ ( 36,193 ) $ ( 46,281 ) $ 1,284,638

Net income — — — 88,243 — — 88,243

7 unchanged sentences

Cash dividends declared on common stock, $0.26 per share — — — ( 11,087 ) — — ( 11,087 )

Balance at September 30, 2022 42,598 $ 433 $ 296,956 $ 1,150,115 $ ( 35,387 ) $ ( 74,562 ) $ 1,337,555

Balance at June 30, 2021 43,437 $ 435 $ 289,261 $ 822,497 $ ( 11,778 ) $ ( 13,510 ) $ 1,086,905

Balance at March 31, 2021 43,430 $ 435 $ 285,896 $ 760,862 $ ( 19,174 ) $ ( 13,510 ) $ 1,014,509

Net income — — — 73,778 — — 73,778

4 unchanged sentences

Stock-based compensation — — 2,606 — — — 2,606

Shares issued from release of Restricted Stock Units 2 — ( 134 ) — — — ( 134 )

Repurchase of common stock ( 222 ) — — — — ( 24,125 ) ( 24,125 )

Cash dividends declared on common stock, $0.25 per share — — — ( 10,803 ) — — ( 10,803 )

Balance, at June 30, 2021 43,437 $ 435 $ 289,261 $ 822,497 $ ( 11,778 ) $ ( 13,510 ) $ 1,086,905

Balance at September 30, 2021 43,217 $ 435 $ 291,733 $ 885,472 $ ( 17,002 ) $ ( 37,635 ) $ 1,123,003

The accompanying notes are an integral part of these condensed consolidated financial statements

3 unchanged sentences

(In thousands except per-share data, unaudited)

Six Months Ended June 30, 2022 and 2021

Nine Months Ended September 30, 2022 and 2021

Common Stock Additional Paid-in Retained Accumulated Other Comprehensive Treasury

11 unchanged sentences

Common stock issued at $139.07 per share for stock bonus 7 — 960 — — — 960

Balance at June 30, 2022 42,906 $ 433 $ 293,720 $ 1,072,959 $ ( 36,193 ) $ ( 46,281 ) $ 1,284,638

Balance at September 30, 2022 42,598 $ 433 $ 296,956 $ 1,150,115 $ ( 35,387 ) $ ( 74,562 ) $ 1,337,555

Balance at December 31, 2020 43,326 $ 433 $ 284,007 $ 720,441 $ ( 10,428 ) $ ( 13,510 ) $ 980,943

5 unchanged sentences

Shares issued from release of Restricted Stock Units 106 1 ( 5,397 ) — — — ( 5,396 )

Repurchase of common stock ( 222 ) — — — — ( 24,125 ) ( 24,125 )

Cash dividends declared on common stock, $0.73 per share — — — ( 31,619 ) — — ( 31,619 )

Common stock issued at $93.45 per share for stock bonus 7 1 691 — — — 692

Balance, at June 30, 2021 43,437 $ 435 $ 289,261 $ 822,497 $ ( 11,778 ) $ ( 13,510 ) $ 1,086,905

Balance at September 30, 2021 43,217 $ 435 $ 291,733 $ 885,472 $ ( 17,002 ) $ ( 37,635 ) $ 1,123,003

The accompanying notes are an integral part of these condensed consolidated financial statements

3 unchanged sentences

(In thousands, unaudited)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities

5 unchanged sentences

Inventory step-up expense 12,151 —

Loss/(gain) in equity method investment, before tax ( 229 ) 2,653

(Gain) Loss in equity method investment, before tax ( 229 ) 2,289

Deferred income taxes ( 13,156 ) 1,197

Noncash compensation related to stock plans 12,986 13,391

Provision of doubtful accounts 223 ( 377 )

Provision for doubtful accounts 1,146 74

Deferred hedge gain ( 1,571 ) —

24 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents 3,776 ( 99 )

Net increase (decrease) in cash and cash equivalents ( 55,021 ) 31,157

Net increase in cash and cash equivalents 8,107 19,541

Cash and cash equivalents at beginning of period 301,155 274,639

13 unchanged sentences

Use of Estimates

The preparation of the condensed financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Management believes that these condensed consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation under GAAP.

25 unchanged sentences

The Company has operating and finance leases for certain facilities, equipment, autos and data centers.

As an accounting policy for short-term leases, the Company elected to not recognize a right-of-use asset ("ROU asset") and liability if, at the commencement date, the lease (1) has a term of 12 months or less and (2) does not include renewal and purchase options that the Company is reasonably certain to exercise.

As an accounting policy for short-term leases, the Company elected to not recognize a right-of-use ("ROU") asset and liability if, at the commencement date, the lease (1) has a term of 12 months or less and (2) does not include renewal and purchase options that the Company is reasonably certain to exercise.

Monthly payments on short-term leases are recognized on a straight-line basis over the full lease term.

25 unchanged sentences

The Company classifies investments that are highly liquid and have maturities of three months or less at the date of purchase as cash equivalents.

As of June 30, 2022 and 2021, the value of these investments were $ 42.4 million and $ 57.1 million, respectively, consisting of United States Treasury securities and money market funds.

As of September 30, 2022 and 2021, the values of these investments were $ 31.9 million and $ 28.6 million, respectively, consisting of United States Treasury securities and money market funds.

The value of the investments is based on cost, which approximates fair value based on Level 1 inputs .

4 unchanged sentences

Every quarter, the Company evaluates the customer group using the accounts receivable aging report and its best judgment when considering changes in customers' credit ratings, level of delinquency, customers' historical payments and loss experience, current market and economic conditions, and expectations of future market and economic conditions.

The changes in the allowance for doubtful accounts receivable for the six months ended June 30, 2022 are outlined in the table below:

The changes in the allowance for doubtful accounts receivable for the nine months ended September 30, 2022 are outlined in the table below:

(in thousands)

December 31, 2021 Expense (Deductions), net

June 30, 2022

September 30, 2022

Allowance for Doubtful Accounts

11 unchanged sentences

Borrowings under the Amended and Restated Credit Facility bear interest using Secured Overnight Financing Rate ("SOFR") plus an applicable margin in lieu of LIBOR.

All other newly issued and effective accounting standards during the second quarter of 2022 were determined to be not relevant or material to the Company.

The Company does not expect the impacts of adopting ASU 2020-04 to be material to its financial position, results of operations and cash flows

All other newly issued and effective accounting standards during the third quarter of 2022 were determined to be not relevant or material to the Company.

Revenue from Contracts with Customers

2 unchanged sentences

Wood Construction Products Revenue .

Wood construction products represented 87 %, respectively, of total net sales for the six months ended June 30, 2022 and 2021.

Wood construction products represented 87 % and 86 %, respectively, of total net sales for the nine months ended September 30, 2022 and 2021.

Concrete Construction Products Revenue.

Concrete construction products represented 13 %, respectively, of total net sales for both the six months ended June 30, 2022 and 2021.

Concrete construction products represented 13 % and 14 %, respectively, of total net sales for both the nine months ended September 30, 2022 and 2021.

Customer Acceptance Criteria.

13 unchanged sentences

Contract liabilities are recorded for any services billed to customers and not yet recognizable if the contract period has commenced or for the amount collected from customers in advance of the contract period commencing.

As of June 30, 2022, the Company had no contract assets or contract liabilities from contracts with customers .

As of September 30, 2022, the Company had no contract assets or contract liabilities from contracts with customers .

On April 1, 2022, the Company completed its acquisition of 100 % of the outstanding equity interest of FIXCO Invest S.A.S.

5 unchanged sentences

The Acquisition will allow the Company to enter into new commercial building markets such as façades, waterproofing, safety and solar, as well as grow its share of direct business sales in Europe.

ETANCO’s results of operations were included in the Company's consolidated financial statements from the date of acquisition.

For the period subsequent to the acquisition that is included in both the three months and six months ended June 30, 2022, ETANCO had net sales of $ 80.3 million and a net loss of $ 2.0 million, which includes costs related to fair-value adjustments for acquired inventory, amortization of acquired intangible assets, and expenses incurred for integration.

The allocation of the

purchase price is preliminary and subject to change, including any costs and expenses already recognized, as the Company refines its estimates over the measurement period, which is expected to be finalized by the end of the 2022 fiscal year.

ETANCO’s results of operations were included in the Company's consolidated financial statements from April 1, 2022 acquisition date.

The Company's three and nine months ended September 30, 2022 results of operation only includes ETANCO's results of operations for the six months ending September 30, 2022, subsequent to the acquisition.

ETANCO had net sales of $ 67.5 million and a net loss of $ 1.8 million, and net sales of $ 147.8 million and a net loss of $ 3.7 million, for the

three and nine months ended September 30, 2022, respectively, which includes costs related to fair-value adjustments for acquired inventory, amortization of acquired intangible assets, and expenses incurred for integration.

The allocation of the purchase price is preliminary and subject to change, including any costs and expenses already recognized, as the Company refines its estimates over the measurement period, which is expected to be finalized by the end of the 2022 fiscal year.

Purchase price allocation

23 unchanged sentences

The Company adjusted acquired finished goods higher by $ 12.8 million to estimated fair value based on expected selling prices less a reasonable amount for selling efforts.

The fair value adjustment is recognized as a component of cost of sales over the inventory’s expected turnover period, and as a result, $ 9.2 million of the adjustment was recognized during the three months ended June 30, 2022.

The balance of the adjustment will be recognized in the quarter ended September 30, 2022.

The fair value adjustment is recognized as a component of cost of sales over the inventory’s expected turnover period and was $ 3.6 million and $ 12.8 million during the three and nine months ended September 30, 2022, respectively.

Property and equipment, net

1 unchanged sentence

The estimated fair value of property and equipment was determined primarily using market and/or or cost approach methodologies.

The acquired fair value for buildings and site improvements will depreciate on a straight-line basis over the estimated useful lives of the assets for a period of up to thirty years , Machinery, equipment and software will depreciate on an accelerated basis over an estimated useful life of three to ten years .

Depreciation expense associated with the acquired property and equipment amounted to $ 1.4 million for three months ended June 30, 2022.

The acquired fair value for buildings and site improvements will depreciate on a straight-line basis over the estimated useful lives of the assets for a period of up to sixteen years , machinery, equipment and software will depreciate on an accelerated basis over an estimated useful life of three to ten years .

Depreciation expense associated with the acquired property and equipment amounted to $ 2.2 million and $ 3.6 million for the three and nine months ended September 30, 2022, respectively.

The excess of purchase price over the net assets acquired is recognized as goodwill and relates to the value that is expected from the acquired assembled workforce as well as the increased scale and synergies resulting from the integration of both businesses.

8 unchanged sentences

Developed technology 10 11,256

Patents 8 3,862

The acquired definite-lived intangible assets will be amortized on a straight-line basis over estimated useful lives, which approximates the pattern in which these assets are utilized.

The Company recognized $ 4.2 million of amortization expense on these assets during the three months ended June 30, 2022.

The Company recognized $ 4.4 million and $ 8.6 million of amortization expense on these assets during the three and nine ended September 30, 2022, respectively.

Deferred taxes

1 unchanged sentence

Acquisition and integration related costs

During the three and six months ended June 30, 2022 and the year ended December 31, 2021, the Company incurred acquisition and integration related expenses of $ 5.9 million, $ 12.8 million and $ 2.3 million, respectively.

During the three months and nine ended September 30, 2022 and the year ended December 31, 2021, the Company incurred acquisition and integration related expenses of $ 1.9 million, $ 14.7 million and $ 2.3 million, respectively.

The fiscal 2022 amounts have been included in acquisition and integration related costs in the Company’s income from operations, while the 2021 amounts were included in interest expense, net and other.

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2022 2021 2022 2021

8 unchanged sentences

The unaudited pro forma results above includes the following non-recurring charges to net income:

1) Acquisition and integration related costs of $ 5.9 million, $ 6.9 million, and $ 2.3 million, which were incurred during the three months ended June 30, 2022, March 31, 2022, and December 31, 2021, respectively, were adjusted as if such costs were incurred during the three months ended March 31, 2021.

2) The $ 9.2 million of amortization related to the fair value adjustment for inventory and recognized during the three months ended June 30, 2022 was adjusted as if incurred during the three months ended March 31, 2021.

The unamortized balance is included as an adjustment recognized during the three months ended June 30, 2021.

1) Acquisition and integration related costs of $ 1.9 million, $ 14.7 million, and $ 2.3 million, which were incurred during the three months ended September 30, 2022, nine months ended September 30, 2022, and three months ended December 31, 2021, respectively, were adjusted as if such costs were incurred during the three months ended March 31, 2021.

2) The $ 3.6 million and $ 12.8 million of amortization related to the fair value adjustment for inventory and recognized during the three and nine months ended September 30, 2022, respectively, were adjusted as if incurred during the nine months ended September 30, 2021.

3) Net income for ETANCO includes adjustments of $ 0.6 million and $ 2.7 million to conform ETANCO’s historical financial results prepared under French GAAP to U.S.

GAAP for the three and six months ended June 30, 2021, respectively.

GAAP for the three and nine months ended September 30, 2021, respectively.

In addition, $ 0.4 million in French to U.S.

GAAP adjustments were made for the three and six months ended June 30, 2022.

GAAP adjustments were made for the nine months ended September 30, 2022.

GAAP adjustments are primarily related to share-based payments expense on awards that were settled prior to the Acquisition, and costs incurred and capitalized by ETANCO on its historical acquisitions.

Net Income Per Share

The following shows a reconciliation of basic net earnings ("EPS") per share to diluted EPS:

The following shows a reconciliation of basic net earnings per share ("EPS") to diluted EPS:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share amounts) 2022 2021 2022 2021

8 unchanged sentences

Treasury Shares

As of June 30, 2022, the Company held 455,030 shares of its common stock as treasury shares.

During the six months ended June 30, 2022, the Company repurchased 455,030 shares of the Company's common stock in the open market at an average price of $ 101.71 per share, for a total of $ 46.3 million.

As of June 30, 2022, approximately $ 53.7 million remains available for repurchase of shares of the Company's common stock under the previously announced $ 100.0 million share repurchase authorization (which expires at the end of 2022).

As of September 30, 2022, the Company held 763,530 shares of its common stock as treasury shares, which were repurchased during the nine months ended September 30, 2022, in the open market at an average price of $ 97.65 per share, for a total of $ 74.6 million.

As of September 30, 2022, approximately $ 25.4 million remains available for repurchase of shares of the Company's common stock under the previously announced $ 100.0 million share repurchase authorization (which expires at the end of 2022).

Stock-Based Compensation

1 unchanged sentence

Stock-based compensation capitalized in inventory was immaterial for all periods presented.

The Company recognized stock-based compensation expense related to its equity plans for employees of $ 4.7 million and $ 3.3 million for the three months ended June 30, 2022 and 2021, respectively, and $ 9.5 million and $ 9.8 million for the six months ended June 30, 2022 and 2021, respectively.

During the six months ended June 30, 2022, the Company granted 112,963 RSUs and PSUs to the Company's employees, including officers at an estimated weighted average fair value of $ 119.60 per share based on the closing price (adjusted for the present value of dividends) of the Company's common stock on the grant date.

The Company recognized stock-based compensation expense related to its equity plans for employees of $ 3.5 million and $ 2.6 million for the three months ended September 30, 2022 and 2021, respectively, and $ 13.0 million and $ 12.4 million for the nine months ended September 30, 2022 and 2021, respectively.

During the nine months ended September 30, 2022, the Company granted 119,169 RSUs and PSUs to the Company's employees, including officers at an estimated weighted average fair value of $ 119.60 per share based on the closing price (adjusted for the present value of dividends) of the Company's common stock on the grant date.

The RSUs and PSUs granted to the Company's employees may be time-based, performance-based or time- and performance-based.

6 unchanged sentences

In May 2022, the Company granted 6,206 shares of the Company's common stock to the non-employee directors, based on the average closing price of $ 105.50 per share and recognized $ 655 thousand of expense.

As of June 30, 2022, the Company's aggregate unamortized stock compensation expense was approximately $ 27.6 million which is expected to be recognized in expense over a weighted-average period of 2.4 years.

As of September 30, 2022, the Company's aggregate unamortized stock compensation expense was approximately $ 24.2 million which is expected to be recognized in expense over a weighted-average period of 2.2 years.

Trade Accounts Receivable, net

Trade accounts receivable consisted of the following:

At June 30, At December 31,

At September 30, At December 31,

(in thousands)

8 unchanged sentences

The components of inventories are as follows:

At June 30, At December 31,

At September 30, At December 31,

(in thousands)

23 unchanged sentences

The interest rate swap contract is also designated as a cash flow hedge.

As of June 30, 2022, the aggregate notional amount of the Company's outstanding interest rate contracts, cross currency swap contracts and forward contract were $ 694.4 million, $ 465.9 million and $ 271.9 million, respectively.

As of June 30, 2021, the aggregate notional amount of the Company's outstanding forward contracts used to hedge variability in cash flows on its Chinese Yuan denominated purchases were $ 5.4 million, all of which expired by December 31, 2021.

As of June 30, 2022 there were no outstanding forward contracts on its Chinese Yuan denominated purchases.

As of September 30, 2022, the aggregate notional amount of the Company's outstanding interest rate contracts, cross currency swap contracts and forward contract were $ 688.8 million, $ 460.0 million and $ 321.7 million, respectively.

As of September 30, 2021, the aggregate notional amount of the Company's outstanding forward contracts used to hedge variability in cash flows on its Chinese Yuan denominated purchases were $ 2.0 million, all of which expired by December 31, 2021.

As of September 30, 2022 there were no outstanding forward contracts on its Chinese Yuan denominated purchases.

Changes in fair value of any forward contracts that are determined to be ineffective are immediately reclassified from OCI into earnings.

There were no amounts recognized due to ineffectiveness during the six-months ended June 30, 2022.

The effects of fair value and cash flow hedge accounting on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the period ended June 30, 2022 was as follows:

There were no amounts recognized due to ineffectiveness during the nine-months ended September 30, 2022.

T he effects of fair value and cash flow hedge accounting on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the periods ended September 30, were as follows:

(in thousands) Cost of sales Interest expense, net Other & foreign exchange loss, net Cost of sales

8 unchanged sentences

Amount of gain or (loss) reclassified from OCI to earnings 163 207

The effects of derivative instruments on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the three months ended June 30 were as follow:

The effects of derivative instruments on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the three months ended September 30, 2022 and 2021 were as follows:

Cash Flow Hedging Relationships Gain (Loss) Recognized in OCI Location of Gain (Loss) Reclassified from OCI into Earnings Gain (Loss) Reclassified from OCI into Earnings

5 unchanged sentences

Total $ 42,673 $ 207 $ 22,121 $ 228

The effects of derivative instruments on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the six months ended June 30 were as follow:

The effects of derivative instruments on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the nine months ended September 30, 2022 and 2021were as follows:

Cash Flow Hedging Relationships Gain (Loss) Recognized in OCI Location of Gain (Loss) Reclassified from OCI into Earnings Gain (Loss) Reclassified from OCI into Earnings

5 unchanged sentences

Total $ 72,263 $ 207 $ 50,388 $ 428

For the three and six months ending June 30, 2022, gains on the net investment hedge of $ 18.1 million and $ 11.3 million were included in OCI, respectively.

For both the three and six months ending June 30, 2022, excluded gains of $ 1.1 million were reclassified from OCI to interest expense.

As of June 30, 2022, the aggregate fair values of the Company’s derivative instruments were comprised of an asset of $ 24.5 million, of which $ 10.8 million is included in Other current assets on the condensed consolidated balance sheet, and the balance, or $ 13.7 million as an Other non-current assets on the condensed consolidated balance sheet, and a liability of $ 7.9 million, which is included in Other non-current liabilities on the condensed consolidated balance sheet.

For the three and nine months ending September 30, 2022, gains on the net investment hedge of $ 16.9 million and $ 28.2 million were included in OCI, respectively.

For the three and nine months ending September 30, 2022, excluded gains of $ 1.3 million and $ 2.4 million, respectively, were reclassified from OCI to interest expense.

As of September 30, 2022, the aggregate fair values of the Company’s derivative instruments were comprised of an asset of $ 82.1 million, of which $ 19.9 million is included in other current assets on the condensed consolidated balance sheet, and the balance, or $ 62.2 million as an Other non-current assets on the condensed consolidated balance sheet.

Property, Plant and Equipment, net

Property, plant and equipment consisted of the following:

At June 30, At December 31,

At September 30, At December 31,

(in thousands) 2022 2021 2021

13 unchanged sentences

Total $ 341,233 $ 255,547 $ 259,869

Goodwill and Intangible Assets

Goodwill and Intangible Assets, net

Goodwill consisted of the following:

At June 30, At December 31,

At September 30, At December 31,

(in thousands) 2022 2021 2021

3 unchanged sentences

Total $ 467,990 $ 133,495 $ 134,022

Goodwill totaled $ 492.3 million as of June 30, 2022, including $ 360.3 million attributable to the ETANCO acquisition.

Goodwill totaled $ 468.0 million as of September 30, 2022, including $ 337.3 million attributable to the ETANCO acquisition.

Amortizable i ntangible assets, net, consisted of the following:

At June 30, 2022

Gross Accumulated Net

Carrying Amortization Carrying

At September 30, 2022

Carrying Accumulated Carrying

(in thousands)

Amount & FX change Amount

Amount Amortization Amount

North America

2 unchanged sentences

$ 389,124 $ ( 58,591 ) $ 330,533

At June 30, 2021

At September 30, 2021

(in thousands)

15 unchanged sentences

Definite-lived intangible assets include customer relationships, patents, unpatented technology, and non-compete agreements.

Amortization expense of definite-lived intangible assets was $ 5.3 million and $ 1.7 million for the three months ended June 30, 2022 and 2021, respectively and was $ 6.4 million and $ 3.4 million for the six months ended June 30, 2022 and 2021, respectively.

Amortization expense of definite-lived intangible assets was $ 5.4 million and $ 1.5 million for the three months ended September 30, 2022 and 2021, respectively and was $ 11.8 million and $ 5.0 million for the nine months ended September 30, 2022 and 2021, respectively.

The weighted-average amortization period for all amortizable intangibles on a combined basis is 9.3 years.

Indefinite-lived intangible assets totaled $ 88.9 million as of June 30, 2022, including $ 88.3 million attributable to trade names acquired in the ETANCO acquisition.

At June 30, 2022, the estimated future amortization of definite-lived intangible assets was as follows:

Indefinite-lived intangible assets totaled $ 83.4 million as of September 30, 2022, including $ 82.8 million attributable to trade names acquired in the ETANCO acquisition.

At September 30, 2022, the estimated future amortization of definite-lived intangible assets was as follows:

(in thousands)

Remaining six months of 2022 $ 10,674

Remaining three months of 2022 $ 5,272

Thereafter 146,392

The changes in the carrying amount of goodwill and intangible assets for the six months ended June 30, 2022, were as follows:

The changes in the carrying amount of goodwill and intangible assets for the nine months ended September 30, 2022, were as follows:

(in thousands) Goodwill Assets

1 unchanged sentence

Acquisition of ETANCO 368,673 357,402

Reclassifications — ( 95 )

Amortization — ( 11,846 )

Foreign exchange ( 34,705 ) ( 41,197 )

Balance at June 30, 2022 $ 492,338 $ 357,698

Balance at September 30, 2022 $ 467,990 $ 330,533

The Company has operating leases for certain facilities, equipment and automobiles.

2 unchanged sentences

The lease payments are discounted using the Company's incremental borrowing rate.

The Company measured the right-of-use ("ROU") assets at the amount at which the lease liability is recognized plus initial direct costs incurred or prepayment amounts.

The Company measured the ROU assets at the amount at which the lease liability is recognized plus initial direct costs incurred or prepayment amounts.

The ROU assets are amortized on a straight-line basis over the lease term.

The following table provides a summary of leases included on the condensed consolidated balance sheets as of June 30, 2022 and 2021 and December 31, 2021, condensed consolidated statements of earnings and comprehensive income, and condensed consolidated statements of cash flows for the six months ended June 30, 2022 and 2021, respectively:

Condensed Consolidated Balance Sheets Line Item June 30, December 31,

The following table provides a summary of leases included on the condensed consolidated balance sheets as of September 30, 2022 and 2021 and December 31, 2021, condensed consolidated statements of earnings and comprehensive income, and condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021, respectively:

Condensed Consolidated Balance Sheets Line Item September 30, December 31,

(in thousands) 2022 2021 2021

8 unchanged sentences

Property and equipment, net Property, plant and equipment, net $ — $ 229 $ 153

Other current liabilities Accrued expenses and other current liabilities $ — $ 48 $ —

Total finance lease liabilities $ — $ 48 $ —

The components of lease expense were as follows:

Condensed Consolidated Statements of Earnings and Comprehensive Income Line Item Three Months Ended June 30, Six Months Ended June 30,

Condensed Consolidated Statements of Earnings and Comprehensive Income Line Item Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2022 2021 2022 2021

8 unchanged sentences

Supplemental cash flow information related to leases is as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2022 2021 2022 2021

4 unchanged sentences

obligations during the current period 3,159 926 8,728 5,624

The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2022:

The following is a schedule, by years, of maturities of lease liabilities as of September 30, 2022:

(in thousands) Operating Leases

Remaining six months of 2022 $ 6,380

Remaining three months of 2022 $ 3,391

Thereafter 18,070

2 unchanged sentences

Total lease liabilities $ 48,813

The following table summarizes the Company's lease terms and discount rates as of June 30, 2022 and 2021:

The following table summarizes the Company's lease terms and discount rates as of September 30, 2022 and 2021:

Weighted-average remaining lease terms (in years):

6 unchanged sentences

In addition, the Company incurred $ 6.8 million of debt issuance costs, which are classified in long-term debt on the condensed consolidating balance sheet, that have been deferred and will amortize over the 5-year terms of the Amended and Restated Credit Facility.

The Company is required to pay an annual revolving credit facility fee of 0.10 % to 0.25 % per annum on the available commitments under the terms of the Amended and Restated Revolving Credit Facility, regardless of usage, with the applicable fee determined on a quarterly basis based on the Company’s net leverage ratio.

The fee is included within Interest expense, net and other in the Company's Condensed Consolidated Statement of Operations.

fee determined on a quarterly basis based on the Company’s net leverage ratio.

The fee is included within Interest expense, net and other in the Company's Condensed Consolidated Statements of Earnings and Comprehensive Income.

Amounts borrowed under the Amended and Restated Credit Facility will bear interest from time to time at either the Base Rate, Spread Adjusted Daily Simple SOFR, Spread Adjusted Term SOFR, Adjusted Eurocurrency Rate or Daily Simple RFR, in each case, as calculated under and as in effect from time to time under the Amended and Restated Credit Facility, plus the Applicable Margin, as defined in the Amended and Restated Credit Facility.

1 unchanged sentence

Loans outstanding under the Amended and Restated Credit Facility may be prepaid at any time without penalty except for customary breakage costs and expenses.

Based on current principle payment expectations, the annual interest rate on the outstanding debt will be approximately 2.00 % over the life of the debt including the effects of the interest rate swap and other derivatives noted above.

As of June 30, 2022, in addition to the Amended and Restated Credit Facility, certain of the Company’s domestic subsidiaries are guarantors for a credit agreement between certain of its foreign subsidiaries and institutional lenders.

Based on current principal payment expectations, the annual interest rate on the outstanding debt will be approximately 2.00 % over the life of the debt including the effects of the interest rate swap and other derivatives noted above.

As of September 30, 2022, in addition to the Amended and Restated Credit Facility, certain of the Company’s domestic subsidiaries are guarantors for a credit agreement between certain of its foreign subsidiaries and institutional lenders.

Together, all of its credit facilities provide the Company with a total of $ 205.1 million in available revolving credit lines and an irrevocable standby letter of credit in support of various insurance deductibles.

The Company has $ 694.4 million, excluding deferred financing costs, outstanding under the Amended and Restated Credit Facility, which is the estimated the fair value as of June 30, 2022.

There were no outstanding balances under the Amended and Restated Credit Facility as of June 30, 2021, and December 31, 2021.

The following is a schedule, by years, of maturities for the remaining term loan facility as of June 30, 2022:

The Company has $ 688.8 million, excluding deferred financing costs, outstanding under the Amended and Restated Credit Facility, which is the estimated the fair value as of September 30, 2022.

There were no outstanding balances under the Amended and Restated Credit Facility as of September 30, 2021, and December 31, 2021.

The following is a schedule, by years, of maturities for the remaining term loan facility as of September 30, 2022:

(in thousands) 5-Year Term Loan

Remaining six months of 2022 $ 11,250

Remaining three months of 2022 $ 5,625

Total loan outstanding $ 438,750

The $ 250.0 million borrowed under the revolving credit facility is due on March 31, 2027.

The Company was in compliance with its financial covenants under the Amended and Restated Credit Facility as of June 30, 2022.

The Company was in compliance with its financial covenants under the Amended and Restated Credit Facility as of September 30, 2022.

Commitments and Contingencies

4 unchanged sentences

From time to time, the Company is involved in various legal proceedings and other matters arising in the normal course of business.

Corrosion, hydrogen embrittlement, cracking, material hardness, wood pressure-treating chemicals, misinstallations,

misuse, design and assembly flaws, manufacturing defects, labeling defects, product formula defects, inaccurate chemical mixes, adulteration, environmental conditions, or other factors can contribute to failure of fasteners, connectors, anchors, adhesives, specialty chemicals, such as fiber reinforced polymers, and tool products.

Corrosion, hydrogen embrittlement, cracking, material hardness, wood pressure-treating chemicals, misinstallations, misuse, design and assembly flaws, manufacturing defects, labeling defects, product formula defects, inaccurate chemical mixes, adulteration, environmental conditions, or other factors can contribute to failure of fasteners, connectors, anchors, adhesives, specialty chemicals, such as fiber reinforced polymers, and tool products.

In addition, inaccuracies may occur in product information, descriptions and instructions found in catalogs, packaging, data sheets, and the Company’s website.

7 unchanged sentences

The following tables illustrate certain measurements used by management to assess the performance of its reportable segments as of or the following periods:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2022 2021 2022 2021

18 unchanged sentences

Consolidated income of operations, income before tax and net income for all periods presented below are not affected by the change of operations.

At June 30, December 31,

At September 30, December 31,

(in thousands) 2022 2021 2021

5 unchanged sentences

Cash collected by the Company’s U.S.

subsidiaries is routinely transferred into the Company’s cash management accounts and, therefore is in the total assets of “Administrative and all other.” Cash and cash equivalent balances in the “Administrative and all other” segment were $ 167.4 million, $ 238.3 million, and $ 223.5 million, as of June 30, 2022 and 2021, and December 31, 2021, respectively.

subsidiaries is routinely transferred into the Company’s cash management accounts and, therefore is in the total assets of “Administrative and all other.” Cash and cash equivalent balances in the “Administrative and all other” segment were $ 236.3 million, $ 219.7 million, and $ 223.5 million, as of September 30, 2022 and 2021, and December 31, 2021, respectively.

Also included in the total assets of "Administrative and all other" are intercompany borrowings due from the Europe segment, which were used by the Europe segment in the acquisition of ETANCO.

Included in the total assets of each segment are net intercompany borrowings due to and from the other segments.

The Company’s wood construction products include connectors, truss plates, fastening systems, fasteners and pre-fabricated shearwalls and are used for connecting and strengthening wood-based construction primarily in residential and commercial construction.

1 unchanged sentence

The table below illustrates the distribution of the Company’s sales by product group as additional information for the following periods:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2022 2021 2022 2021

5 unchanged sentences

Dividend Declared

On July 27, 2022, the Company’s Board of Directors (the "Board") declared a quarterly cash dividend of $ 0.26 per share, estimated to be $ 11.2 million in total.

The dividend will be payable on October 27, 2022, to the Company's stockholders of record on October 6, 2022.

On October 21, 2022, the Company’s Board of Directors (the "Board") declared a quarterly cash dividend of $ 0.26 per share, estimated to be $ 11.1 million in total.

The dividend will be payable on January 26, 2023, to the Company's stockholders of record on January 5, 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements