What changed in this filing

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Item 1. Financial Statements

2023-11-07 compared with 2023-08-07 · 108 added, 92 removed, 552 unchanged (27% of the section changed)

4 unchanged sentences

(In thousands, unaudited)

June 30, December 31,

September 30, December 31,

2023 2022 2022

14 unchanged sentences

Trade accounts payable $ 95,267 $ 98,646 $ 97,841

Income tax payable 87,569 15,804 7,897

Accrued liabilities and other current liabilities 222,233 209,216 220,325

19 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,

2023 2022 2023 2022

10 unchanged sentences

Income from operations 140,213 122,815 403,596 380,330

Interest expense, net and other finance costs ( 705 ) ( 3,372 ) ( 1,274 ) ( 3,585 )

Interest income (expense), net and other finance costs 1,292 ( 2,983 ) 18 ( 6,568 )

Other & foreign exchange loss, net ( 1,429 ) ( 1,707 ) ( 1,471 ) ( 3,814 )

19 unchanged sentences

(In thousands except per-share data, unaudited)

Three Months Ended June 30, 2023 and 2022

Three Months Ended September 30, 2023 and 2022

Common Stock Additional Paid-in Retained Accumulated Other Comprehensive Treasury

Shares Par Value Capital Earnings Loss Stock Total

Balance at March 31, 2023 42,663 $ 426 $ 295,976 $ 1,194,993 $ ( 3,986 ) $ — $ 1,487,409

Balance at June 30, 2023 42,673 $ 426 $ 301,612 $ 1,290,686 $ ( 9,113 ) $ — $ 1,583,611

Net income — — — 104,021 — — 104,021

4 unchanged sentences

Stock-based compensation — — 5,537 — — — 5,537

Shares issued from release of Restricted Stock Units 10 — — — — — —

Cash dividends declared on common stock, $0.27 per share — — — ( 11,523 ) — — ( 11,523 )

Balance at September 30, 2023 42,673 $ 426 $ 307,149 $ 1,383,184 $ ( 21,268 ) $ — $ 1,669,491

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

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

Net income — — — 88,243 — — 88,243

8 unchanged sentences

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

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

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, 2023 and 2022

Nine Months Ended September 30, 2023 and 2022

Common Stock Additional Paid-in Retained Accumulated Other Comprehensive Treasury

9 unchanged sentences

Cash dividends declared on common stock, $0.80 per share — — — ( 34,031 ) — — ( 34,031 )

Balance at June 30, 2023 42,673 $ 426 $ 301,612 $ 1,290,686 $ ( 9,113 ) $ — $ 1,583,611

Balance at September 30, 2023 42,673 $ 426 $ 307,149 $ 1,383,184 $ ( 21,268 ) $ — $ 1,669,491

Balance at December 31, 2021 43,217 $ 432 $ 294,330 $ 906,841 $ ( 17,605 ) $ — $ 1,183,998

9 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

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

4 unchanged sentences

Noncash lease expense 10,329 7,982

Inventory step-up expense — 12,151

(Gain) loss in equity method investment, before tax 531 ( 229 )

7 unchanged sentences

Trade accounts payable ( 3,471 ) 4,960

Income taxes payable 79,542 12,930

Other current assets 438 ( 5,711 )

4 unchanged sentences

Capital expenditures ( 57,483 ) ( 41,571 )

Asset acquisitions, net of cash acquired ( 18,195 ) ( 805,904 )

Acquisitions, net of cash acquired

( 17,525 ) ( 806,544 )

Equity method investments ( 712 ) ( 2,768 )

13 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents ( 3,184 ) 3,776

Net increase (decrease) in cash and cash equivalents 107,240 ( 55,021 )

Net increase in cash and cash equivalents

270,264 8,107

Cash and cash equivalents at beginning of period 300,742 301,155

46 unchanged sentences

Fair Value of Financial Instruments

Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability.

Fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between unrelated market participants.

As such, fair value is a market-based measurement that is determined based on assumptions that unrelated market participants would use in pricing an asset or a liability.

Assets and liabilities recorded at fair value are measured and classified under a three-tier fair valuation hierarchy based on the observability of the inputs available in the market:

6 unchanged sentences

The fair values of the Company’s contingent consideration related to acquisitions and equity investments are classified as Level 3 within the fair value hierarchy, as these amounts are based on unobservable inputs developed using management's estimates and entity-specific assumptions, which reflect those that market participants would use, and are evaluated on an ongoing basis.

The following tables summarize financial assets and liabilities measured at fair value as of June 30, 2023 and 2022:

The following tables summarize financial assets and liabilities measured at fair value as of September 30, 2023 and 2022:

(in millions)

7 unchanged sentences

Contingent considerations — — 5.4 — — —

1) The carrying amounts of cash equivalents, representing United States Treasury securities and money market funds traded in an active market with relatively short maturities, are reported on the consolidated balance sheet as of June 30, 2023 and 2022 as a component of "Cash and cash equivalents".

1) The carrying amounts of cash equivalents, representing United States Treasury securities and money market funds traded in an active market with relatively short maturities, are reported on the consolidated balance sheet as of September 30, 2023 and 2022 as a component of "Cash and cash equivalents".

(2) Derivatives for interest rate, foreign exchange and forward swap contracts are discussed in Note 8.

The carrying amounts of the term loan and revolver approximate fair value as of June 30, 2023 based upon its terms and conditions in comparison to debt instruments with similar terms and conditions available on the same date.

The carrying amounts of the term loan and revolver approximate fair value as of September 30, 2023 based upon its terms and conditions in comparison to debt instruments with similar terms and conditions available on the same date.

Derivative Instruments

1 unchanged sentence

Foreign currency and interest rate risk are the primary market risks the Company manages through the use of derivative instruments, which are accounted for as cash flow hedges or net investment hedges under the accounting standards and carried at fair value as other current or noncurrent assets or as other current or other long-term liabilities.

Assets and liabilities with the legal right of offset are not offset.

Assets and liabilities with the legal right of offset have been netted.

Net deferred gains and losses related to changes in fair value of cash flow hedges are included in accumulated other comprehensive income/loss ("OCI"), a component of stockholders' equity, and are reclassified into the line item in the Condensed Consolidated Statement of Earnings and Comprehensive Income in which the hedged items are recorded in the same period the hedged item affects earnings.

9 unchanged sentences

Every quarter, the Company evaluates the collectability based on 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, 2023 are outlined in the table below:

The changes in the allowance for doubtful accounts receivable for the nine months ended September 30, 2023 are outlined in the table below:

(in thousands)

December 31, 2022 Expense (Deductions), net

June 30, 2023

September 30, 2023

Allowance for doubtful accounts

2 unchanged sentences

Income taxes are calculated using an asset and liability approach.

The provision for income taxes includes federal, state and foreign taxes currently payable and deferred taxes, due to temporary differences between the financial statement and tax bases of assets and liabilities.

The provision for income taxes includes federal, state and foreign taxes currently payable, and deferred taxes arising from temporary differences between the financial statement and tax bases of assets and liabilities.

In addition, future tax benefits are recognized to the extent that realization of such benefits is more likely than not.

1 unchanged sentence

The Company uses an estimated annual tax rate to measure the tax benefit or tax expense recognized in each interim period.

Prior years' income tax payable was separated in "Condensed Consolidated Balance Sheets" and "Condensed Consolidated Statements of Cash Flows" to conform to the 2023 presentation basis.

The change had no effect on net income or stockholders' equity as previously reported.

Accounting Standards Not Yet Adopted

4 unchanged sentences

Wood Construction Products Revenue .

Wood construction products represented approximately 86 % and 87 % of total net sales for the six months ended June 30, 2023 and 2022, respectively.

Wood construction products represented approximately 85 % and 87 % of total net sales for the nine months ended September 30, 2023 and 2022, respectively.

Concrete Construction Products Revenue.

Concrete construction products represented approximately 14 % and 13 % of total net sales for the six months ended June 30, 2023 and 2022 respectively.

Concrete construction products represented approximately 14 % and 13 % of total net sales for the nine months ended September 30, 2023 and 2022 respectively.

Customer Acceptance Criteria.

3 unchanged sentences

Other Revenue .

Service sales, representing after-market repair and maintenance, engineering activities and software license sales and services were less than 0.1 % of net sales and recognized as the services are completed or by transferring control over a product to a customer at a point in time.

Service sales, representing after-market repair and maintenance, engineering activities and software license sales and services were less than 0.5 % of total net sales and recognized as the services are completed or by transferring control over a product to a customer at a point in time.

Services may be sold separately or in bundled packages.

7 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, 2023, the Company had no contract assets or contract liabilities from contracts with customers .

As of September 30, 2023, the Company had no contract assets or contract liabilities from contracts with customers .

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

5 unchanged sentences

ETANCO’s results of operations were included in the Company's Condensed Consolidated Financial Statements from April 1, 2022, the acquisition date.

ETANCO had net sales of $ 80.3 million and net loss of $ 2.0 million, for the three and six months ended June 30, 2022, which includes costs related to the amortization of acquired intangible assets, and expenses incurred for integration.

ETANCO had net sales of $ 67.5 million and net loss of $1.8 million, and net sales of $ 147.8 million and net loss of $ 3.7 million, for the three and nine months ended September 30, 2022, respectively, which includes costs related to the amortization of acquired intangible assets, and expenses incurred for integration.

Purchase price allocation

21 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 and six months ended June 30, 2022.

The fair value adjustment is recognized as a component of cost of sales over the inventory’s expected turnover period, and as a result, $ 2.9 million and $ 12.8 million of the adjustment was recognized during the three and nine months ended September 30, 2022, respectively.

There were no such adjustments during the three and nine months ended September 30, 2023.

Property and equipment, net

2 unchanged sentences

The acquired fair value for buildings and site improvements 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 $ 1.4 million for the three and six months ended June 30, 2022.

The excess of the purchase price over the net assets acquired was 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.

The goodwill recognized from the Acquisition is not deductible for local income tax purposes.

Goodwill has been allocated to components within the ETANCO reporting unit.

The goodwill recognized from the Acquisition is not deductible for local income tax purposes and has been allocated to components within the ETANCO reporting unit.

Intangible assets, net

7 unchanged sentences

The acquired definite-lived intangible assets are being 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 and six months ended June 30, 2022.

Deferred taxes

1 unchanged sentence

Acquisition and integration related costs

During the three and six months ended June 30, 2022, the Company incurred acquisition and integration related expenses of $ 5.9 million and $ 12.8 million, respectively, for investment banking, legal, accounting, advisory, and consulting fees.

During the three and nine months ended September 30, 2022, the Company incurred acquisition and integration related expenses of $ 1.9 million and $ 14.7 million, respectively, for investment banking, legal, accounting, advisory, and consulting fees.

These costs were included in the Company’s income from operations.

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share amounts) 2022 2022

8 unchanged sentences

The unaudited pro forma results above includes the following adjustments to net income:

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

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

3) Net income for ETANCO includes adjustments of $ 0.4 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, 2022.

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

2) The $ 2.9 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 nine months ended September 30, 2021, respectively.

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.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share amounts) 2023 2022 2023 2022

9 unchanged sentences

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 $ 6.5 million and $ 4.7 million for the three months ended June 30, 2023 and 2022, respectively, and $ 11.2 million and $ 9.5 million for the six months ended June 30, 2023 and 2022, respectively.

During the six months ended June 30, 2023, the Company granted 277,793 restricted stock units (RSUs) and performance stock units (PSUs) to the Company's employees, including officers at an estimated weighted average fair value of $ 99.66 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 $ 6.6 million and $ 3.5 million for the three months ended September 30, 2023 and 2022, respectively, and $ 17.8 million and $ 13.0 million for the nine months ended September 30, 2023 and 2022, respectively.

During the nine months ended September 30, 2023, the Company granted an aggregate of 277,793 restricted stock units (RSUs) and performance stock units (PSUs) to the Company's employees, including officers at an estimated weighted average fair value of $ 99.66 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 or time and performance-based.

5 unchanged sentences

In April 2023 and June 2023, the Company granted 9,776 shares of the Company's common stock to the non-employee directors, based on the average closing price of $ 122.50 per share and recognized $ 1.2 million of expense.

As of June 30, 2023, the Company's aggregate unamortized stock compensation expense was approximately $ 29.2 million which is expected to be recognized in expense over a weighted-average period of 2.5 years.

As of September 30, 2023, the Company's aggregate unamortized stock compensation expense was approximately $ 27.2 million which is expected to be recognized in expense over a weighted-average period of 2.3 years.

Trade Accounts Receivable, net

Trade accounts receivable consisted of the following:

As of June 30, As of December 31,

As of September 30, As of December 31,

(in thousands)

8 unchanged sentences

The components of inventories are as follows:

As of June 30, As of December 31,

As of September 30, As of December 31,

(in thousands)

11 unchanged sentences

The Company only enters into derivative instrument agreements with counterparties who have highly rated credit.

As of June 30, 2023, the aggregate notional amount of the Company's outstanding interest rate contracts, cross currency swap contracts, EUR forward contract and CNY forward contracts were $ 571.9 million, $ 442.3 million, $ 321.7 million and $ 5.9 million (CNY 40.4 million), respectively.

As of September 30, 2023, the aggregate notional amount of the Company's outstanding interest rate contracts, cross currency swap contracts, EUR forward contract and CNY forward contracts were $ 566.3 million, $ 436.4 million, $ 321.7 million and $ 4.6 million (CNY 31.7 million), respectively.

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 three and six months ended June 30, 2023 and 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 six months ended June 30, were as follows:

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

There were no amounts recognized due to ineffectiveness during the three and nine months ended September 30, 2023 and September 30, 2022.

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

(in thousands) Cost of sales Interest income (expense), net and other finance costs

Other & foreign exchange loss, net Cost of sales Interest income (expense), net and other finance costs

Other & foreign exchange loss, net

Total amounts of income and expense line items presented in the Condensed Consolidated Statement of Earnings in which the effects of fair value or cash flow hedges are recorded $ 888,835 18 $ ( 1,471 ) 899,828 ( 6,568 ) ( 3,814 )

7 unchanged sentences

Amount of gain reclassified from OCI to earnings 60 — — 163 — —

The effects of derivative instruments on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the three months ended June 30, 2023 and 2022 were as follows:

The effects of derivative instruments on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the three months ended September 30, 2023 and 2022 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 $ 16,993 $ 42,673 $ 17,518 $ 22,121

The effects of derivative instruments on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the six months ended June 30, 2023 and 2022 were as follows:

The effects of derivative instruments on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the nine months ended September 30, 2023 and 2022 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 $ 15,107 $ 72,263 $ 22,065 $ 50,388

For the three months ending June 30, 2023 losses on the net investment hedge, and June 30, 2022 gains on net investment hedge of $ 4.1 million and $ 18.1 million were included in OCI, respectively.

For the three months ending June 30, 2023 and June 30, 2022, excluded gains of $ 1.3 million and $ 1.1 million were reclassified from OCI to interest expense, respectively.

For the six months ending June 30, 2023 losses on the net investment hedge, and June 30, 2022 gains on net investment hedge of $ 4.4 million and $ 11.3 million were included in OCI, respectively.

For the six months ending June 30, 2023 and June 30, 2022, excluded gains of $ 2.5 million and $ 1.1 million were reclassified from OCI to interest expense, respectively.

As of June 30, 2023, the aggregate fair values of the Company’s derivative instruments on the Condensed Consolidated Balance Sheet were comprised of an asset of $ 37.9 million, of which $ 19.5 million is included in other current assets, and the balance of $ 18.4 million as other non-current assets, and of a liability of $ 18.9 million, of which $ 0.3 million is included in accrued liabilities and other current liabilities, and the balance of $ 18.6 million as deferred income tax and other long-term liabilities.

For the three months ending September 30, 2023 and September 30, 2022 gains on the net investment hedge of $ 3.2 million and $ 16.9 million were included in OCI, respectively.

For the three months ending September 30, 2023 and September 30, 2022, excluded gains of $ 1.3 million and $ 1.3 million were reclassified from OCI to interest expense, respectively.

For the nine months ending September 30, 2023 losses on the net investment hedge, and September 30, 2022 gains on the net investment hedge of $ 1.1 million and $ 28.2 million were included in OCI, respectively.

For the nine months ending September 30, 2023 and September 30, 2022, excluded gains of $ 3.8 million and $ 2.4 million were reclassified from OCI to interest expense, respectively.

As of September 30, 2023, the aggregate fair values of the Company’s derivative instruments on the Condensed Consolidated Balance Sheet were comprised of an asset of $ 42.8 million, of which $ 19.5 million is included in other current assets, and the balance of $ 23.3 million as other non-current assets, and of a non-current liability of $ 9.5 million included as deferred income tax and other long-term liabilities.

Property, Plant and Equipment, net

Property, plant and equipment consisted of the following:

As of June 30, As of December 31,

As of September 30, As of December 31,

(in thousands) 2023 2022 2022

15 unchanged sentences

Goodwill consisted of the following:

As of June 30, As of December 31,

As of September 30, As of December 31,

(in thousands) 2023 2022 2022

4 unchanged sentences

I ntangible assets, net, consisted of the following:

As of June 30, 2023

As of September 30, 2023

Carrying Accumulated Carrying

6 unchanged sentences

$ 438,041 $ ( 81,591 ) $ 356,450

As of June 30, 2022

As of September 30, 2022

(in thousands)

15 unchanged sentences

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

Amortization of definite-lived intangible assets was $ 6.0 million and $ 5.3 million for the three months ended June 30, 2023 and 2022, respectively, and was $ 11.6 million and $ 6.4 million for the six months ended June 30, 2023 and 2022, respectively.

Amortization of definite-lived intangible assets was $ 5.9 million and $ 5.4 million for the three months ended September 30, 2023 and 2022, respectively, and was $ 17.5 million and $ 11.8 million for the nine months ended September 30, 2023 and 2022, respectively.

The weighted-average amortization period for all amortizable intangibles on a combined basis is 8.7 years.

Indefinite-lived intangible assets totaled $ 92.8 million, $ 88.9 million, and $ 91.7 million as of June 30, 2023, and 2022 and December 31, 2022, respectively.

At June 30, 2023, the estimated future amortization of definite-lived intangible assets was as follows:

Indefinite-lived intangible assets totaled $ 90.4 million, $ 83.4 million, and $ 91.7 million as of September 30, 2023, and 2022 and December 31, 2022, respectively.

At September 30, 2023, the estimated future amortization of definite-lived intangible assets was as follows:

(in thousands)

Remaining six months of 2023 $ 11,225

Remaining three months of 2023 $ 5,699

Thereafter 150,674

The changes in the carrying amount of goodwill and intangible assets for the six months ended June 30, 2023, were as follows:

The changes in the carrying amount of goodwill and intangible assets for the nine months ended September 30, 2023, were as follows:

(in thousands) Goodwill Assets

2 unchanged sentences

Disposal ( 5,678 ) —

Reclassifications — 46

Amortization — ( 17,517 )

Foreign exchange ( 4,504 ) ( 3,866 )

Balance at June 30, 2023 $ 495,065 $ 369,649

Balance at September 30, 2023 $ 483,413 $ 356,450

1 During the quarter ended September 30, 2023, the Company finalized a business acquisition that resulted in $ 2.1 million decrease in goodwill with $ 0.9 million reclassified to intangible asset, and a corresponding decrease of $ 1.2 million in a contingent consideration liability.

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

4 unchanged sentences

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, 2023 and 2022 and December 31, 2022, Condensed Consolidated Statements of Earnings and Comprehensive Income, and Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022:

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, 2023 and 2022 and December 31, 2022, Condensed Consolidated Statements of Earnings and Comprehensive Income, and Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022:

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

(in thousands) 2023 2022 2022

9 unchanged sentences

The components of lease expense were as follows:

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

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

(in thousands) 2023 2022

3 unchanged sentences

Supplemental cash flow information related to leases is as follows:

Three Months Ended June 30,

Three Months Ended September 30,

(in thousands) 2023 2022

3 unchanged sentences

obligations during the current period 6,437 3,159

The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2023:

The following is a schedule, by years, of maturities of lease liabilities as of September 30, 2023:

(in thousands) Operating Leases

Remaining six months of 2023 $ 7,986

Remaining three months of 2023 $ 4,279

Thereafter 13,917

2 unchanged sentences

Total lease liabilities $ 67,425

The following table summarizes the Company's lease terms and discount rates as of June 30, 2023 and 2022:

The following table summarizes the Company's lease terms and discount rates as of September 30, 2023 and 2022:

Weighted-average remaining lease terms (in years):

2 unchanged sentences

Operating leases 4.8 % 4.8 %

As of June 30, 2023, the Company has $ 571.9 million, excluding deferred financing costs, outstanding under its Amended and Restated Credit Facility.

The Company had outstanding balances of $ 694.4 million and $ 583.2 million under the Amended and Restated Credit Facility as of June 30, 2022, and December 31, 2022, respectively.

The following is a schedule, by years, of maturities for the remaining term loan facility as of June 30, 2023:

As of September 30, 2023, the Company had $ 566.3 million, excluding deferred financing costs, outstanding under its Amended and Restated Credit Facility.

The Company had outstanding balances of $ 688.8 million and $ 583.2 million under the Amended and Restated Credit Facility as of September 30, 2022, and December 31, 2022, respectively.

The following is a schedule, by years, of maturities for the remaining term loan facility as of September 30, 2023:

(in thousands) 5-Year Term Loan

Remaining six months of 2023 $ 11,250

Remaining three months of 2023 $ 5,625

Total loan outstanding $ 416,250

The $ 150.0 million outstanding 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, 2023.

The Company was in compliance with its financial covenants under the Amended and Restated Credit Facility as of September 30, 2023.

Certain of the Company's domestic subsidiaries are guarantors for a credit agreement between certain of its foreign subsidiaries and institutional lenders that is in addition to the Amended and Restated Credit Facility.

As of June 30, 2023, all of the Company's credit facilities provide a total of $ 306.1 million in available borrowing capacity and an irrevocable standby letter of credit in support of various insurance deductibles.

As of September 30, 2023, all of the Company's credit facilities provide a total of $ 306.5 million in available borrowing capacity and an irrevocable standby letter of credit in support of various insurance deductibles.

Commitments and Contingencies

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Litigation and Potential Claims

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.

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

The resolution of any claim or litigation is subject to inherent uncertainty and could have a material adverse effect on the Company’s financial condition, cash flows or results of operations.

The Company is subject to various legal and regulatory proceedings relating to contract disputes, personal injury, property damage, employment, product liability, environmental, intellectual property and other matters from time to time in the ordinary course of business (“Proceedings”).

The Company accrues a liability for Proceedings when payments associated with the claims become probable and the costs can be reasonably estimated.

The Company also considers whether an insurance recovery receivable is applicable and appropriate based on the specific Proceeding.

Because Proceedings are inherently uncertain, we are unable to predict the ultimate outcome of Proceedings, or amount of liability, if any, and the actual costs of resolving Proceedings may be substantially higher or lower than the amounts accrued for those activities.

However, management believes that the outcome of any Proceedings that are pending or threatened, either individually or in the aggregate, or on a combined basis, will not have a material adverse impact on the Company’s results of operations, financial position or liquidity.

Segment Information

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The three reporting segments are the North America segment (comprised primarily of the Company’s operations in the U.S.

and Canada), the Europe segment, which includes ETANCO, and the Asia/Pacific segment (comprised of the Company’s operations in Asia and the South Pacific), These segments are similar in several ways, including the types of materials used, the production processes, the distribution channels and the product applications.

and Canada), the Europe segment, which includes ETANCO, and the Asia/Pacific segment (comprised of the Company’s operations in Asia and the South Pacific).

These segments are similar in several ways, including the types of materials used, the production processes, the distribution channels and the product applications.

The Administrative & All Other line item primarily includes expenses such as self-insured workers compensation claims for employees, stock-based compensation for certain members of management, interest expense, foreign exchange gains or losses and income tax expense, as well as revenues and expenses related to real estate activities.

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) 2023 2022 2023 2022

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* Sales to other segments are eliminated in consolidation.

As of June 30, December 31,

As of September 30, December 31,

(in thousands) 2023 2022 2022

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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 $ 326.5 million, $ 167.4 million, and $ 222.5 million, as of June 30, 2023 and 2022, and December 31, 2022, 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 $ 465.3 million, $ 236.3 million, and $ 222.5 million, as of September 30, 2023 and 2022, and December 31, 2022, respectively.

Also included in the total assets of "Administrative and all other" are intercompany borrowings due from the Europe segment.

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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) 2023 2022 2023 2022

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Subsequent Events

Share Repurchases

From October 1, 2023 to November 6, 2023, the Company repurchased an additional 333,469 shares of the Company’s common stock in the open market at an average price of $ 138.09 per share, for a total of $ 46.1 million.

As a res ult, as of November 6, 2023, approximately $ 53.9 million remained available for share repurchase through December 31, 2023 under the Company’s previously announced $ 100.0 million share repurchase authorization.

Dividend Declared

On July 28, 2023, the Company’s Board of Directors (the "Board") declared a quarterly cash dividend of $ 0.27 per share, estimated to be $ 11.5 million in total.

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

On October 19, 2023, the Company’s Board of Directors (the "Board") declared a quarterly cash dividend of $ 0.27 per share, estimated to be $ 11.4 million in total.

The dividend will be payable on January 25, 2024, to the Company's stockholders of record on January 4, 2024.

Share Repurchase Authorization

On October 19, 2023, the Board authorized the Company to repurchase up to $ 100.0 million of the Company's common stock, effective January 1, 2024 through December 31, 2024.

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