What changed in this filing

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Item 1. Financial Statements

2024-05-07 compared with 2023-11-07 · 182 added, 313 removed, 339 unchanged (59% of the section changed)

4 unchanged sentences

(in thousands, except par values)

OCTOBER 1, 2023 JANUARY 1, 2023

MARCH 31, 2024 DECEMBER 31, 2023

Current assets

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Deferred tax asset 21,428 21,721

Goodwill and intangibles, net 156,487 162,195

Goodwill and intangible assets, net

156,951 161,703

Other assets 84,953 84,154

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Total liabilities 764,944 804,148

Commitments and contingencies

Commitments and contingencies (Note 14)

Shareholders’ equity

1 unchanged sentence

5,000 shares authorized;

none issued or outstanding at October 1, 2023 and January 1, 2023

none issued or outstanding at March 31, 2024 and December 31, 2023

Common stock, par value $ 0.10 per share;

120,000 shares authorized;

58,107 and 58,106 shares issued and outstanding at October 1, 2023 and January 1, 2023, respectively

58,273 and 58,112 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital 252,538 252,909

1 unchanged sentence

Accumulated other comprehensive loss – foreign currency translation ( 130,682 ) ( 119,590 )

Accumulated other comprehensive loss – cash flow hedge — ( 749 )

Accumulated other comprehensive loss – pension liability ( 33,558 ) ( 34,016 )

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(in thousands, except per share data)

THREE MONTHS ENDED NINE MONTHS ENDED

OCTOBER 1, 2023 OCTOBER 2, 2022 OCTOBER 1, 2023 OCTOBER 2, 2022

THREE MONTHS ENDED

MARCH 31, 2024 APRIL 2, 2023

Net sales $ 289,743 $ 295,792

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Selling, general and administrative expenses 85,959 86,254

Restructuring, asset impairment, other (gains) and charges

— ( 105 ) ( 2,502 ) 1,592

Restructuring, asset impairment and other charges — 142

Operating income 24,446 9,477

Interest expense 6,423 8,505

Other expense, net

Other (income) expense, net

( 976 ) 1,500

Income before income tax expense 16,120 20,171 36,710 66,512

Income (loss) before income tax expense 18,999 ( 528 )

Income tax expense 4,820 186

Net income $ 9,879 $ 14,065 $ 24,962 $ 44,176

Earnings per share – basic $ 0.17 $ 0.24 $ 0.43 $ 0.75

Earnings per share – diluted $ 0.17 $ 0.24 $ 0.43 $ 0.75

Net income (loss) $ 14,179 $ ( 714 )

Earnings (loss) per share – basic $ 0.24 $ ( 0.01 )

Earnings (loss) per share – diluted $ 0.24 $ ( 0.01 )

Common shares outstanding – basic 58,238 58,079

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

THREE MONTHS ENDED NINE MONTHS ENDED

OCTOBER 1, 2023 OCTOBER 2, 2022 OCTOBER 1, 2023 OCTOBER 2, 2022

Net income $ 9,879 $ 14,065 $ 24,962 $ 44,176

Other comprehensive loss, after tax:

THREE MONTHS ENDED

MARCH 31, 2024 APRIL 2, 2023

Net income (loss) $ 14,179 $ ( 714 )

Other comprehensive (loss) income, after tax:

Foreign currency translation adjustment ( 11,092 ) 4,930

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Pension liability adjustment 458 ( 279 )

Other comprehensive loss

Other comprehensive (loss) income

( 10,634 ) 4,950

Comprehensive income (loss) $ 1,055 $ ( 18,850 ) $ 21,949 $ ( 32,031 )

Comprehensive income $ 3,545 $ 4,236

See accompanying notes to consolidated condensed financial statements.

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(in thousands)

NINE MONTHS ENDED

OCTOBER 1, 2023 OCTOBER 2, 2022

THREE MONTHS ENDED

MARCH 31, 2024 APRIL 2, 2023

OPERATING ACTIVITIES:

Net income $ 24,962 $ 44,176

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

Net income (loss) $ 14,179 $ ( 714 )

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

Depreciation and amortization 9,616 9,991

Share-based compensation expense

Gain on disposal of property, plant and equipment, net ( 2,531 ) —

Loss on foreign subsidiary liquidation

Deferred income taxes and other ( 4,386 ) 599

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Proceeds from sale of property, plant and equipment

Insurance proceeds from property casualty loss

Cash used in investing activities ( 1,993 ) ( 5,712 )

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Tax withholding payments for share-based compensation ( 4,271 ) ( 1,167 )

Repurchase of common stock — ( 14,451 )

Dividends paid

2 unchanged sentences

( 29,776 ) ( 21,035 )

Net cash provided by (used in) operating, investing and financing activities

Net cash (used in) provided by operating, investing and financing activities

( 19,150 ) 2,837

1 unchanged sentence

CASH AND CASH EQUIVALENTS:

Net increase (decrease)

Net (decrease) increase

( 20,724 ) 3,709

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As contemplated by the Securities and Exchange Commission (the “Commission”) instructions to Form 10-Q, the following footnotes have been condensed and, therefore, do not contain all disclosures required in connection with annual financial statements.

Reference should be made to the Company’s year-end financial statements and notes thereto contained in its Annual Report on Form 10-K for the fiscal year ended January 1, 2023, as filed with the Commission.

Reference should be made to the Company’s year-end financial statements and notes thereto contained in its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the Commission.

The financial information included in this report has been prepared by the Company, without audit.

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Nevertheless, the results shown for interim periods are not necessarily indicative of results to be expected for the full year.

The January 1, 2023, consolidated condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States (“GAAP”).

The nine-month periods ended October 1, 2023 and October 2, 2022, both include 39 weeks.

The three-month periods ended October 1, 2023 and October 2, 2022, both include 13 weeks.

The December 31, 2023, consolidated condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States (“GAAP”).

The three-month periods ended March 31, 2024 and April 2, 2023 both include 13 weeks.

Risks and Uncertainties

Global economic challenges, including the impacts of the Russia-Ukraine and Israel-Hamas wars, inflation and supply chain disruptions could cause economic uncertainty and volatility.

The Company considered these impacts and subsequent general uncertainties and volatility in the global economy on the assumptions and estimates used herein.

Global economic challenges, including the impacts of the Russia-Ukraine and Israel-Hamas wars, inflation, supply chain disruptions, and the slow macro environment in China could cause economic uncertainty and volatility.

In connection with the Cyber Event discussed below, security breaches may expose us to fines and other liabilities to the extent sensitive data stored in our IT systems, including data related to customers, suppliers or employees, are misappropriated.

The Company considered these impacts and subsequent general uncertainties and volatility in the global economy on the assumptions and estimates used herein.

These uncertainties could result in a future material adverse effect to the amounts reported within the Company’s consolidated condensed financial statements if actual results differ from these estimates.

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In response to this Cyber Event, we notified law enforcement and took steps to supplement existing security monitoring, including scanning and protective measures.

The investigation of the Cyber Event was substantially completed early in the third quarter of 2023.

Recently Adopted Accounting Pronouncements

In July 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-03, “ Presentation of Financial Statements (Topic 205), Income Statement — Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), Compensation — Stock Compensation (Topic 718) .” This ASU amends various paragraphs in the accounting codification pursuant to the issuance of Commission Staff Accounting Bulletin (“SAB”) number 120.

The ASU provides clarifying guidance related to employee and non-employee share-based payment accounting, including guidance related to spring-loaded awards.

ASU 2023-03 is effective upon issuance.

The adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial statements.

In June 2022, the FASB issued ASU 2022-03, “ Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions .” This ASU clarifies that a contractual restriction on the sale of an equity security is not considered in measuring fair value.

The ASU also requires certain disclosures for equity securities subject to contractual sale restrictions.

The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2023.

The investigation of the Cyber Event by our forensic experts was completed during fiscal year 2023.

Recently Issued Accounting Pronouncements – Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “ Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures.

” This ASU requires public entities on an annual basis to disclose a rate reconciliation with explicit categories, as outlined in the ASU, and requires additional disclosures for reconciling items that meet certain quantitative thresholds.

Other disclosures include disaggregation of income taxes paid, pre-tax income, and income tax expense.

The new guidance is effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company adopted this standard on April 2, 2023.

The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

The Company is currently evaluating the impact of this ASU to its income tax disclosures.

In November 2023, the FASB issued ASU 2023-07, “ Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

” This ASU requires additional disclosures in annual and interim periods for significant segment expenses included in the measure of segment profit provided to the chief operating decision maker (“CODM”).

Disclosure of other segment items by reportable segment as well as a description of its composition is also required.

The new guidance is effective for annual periods beginning after December 15, 2023, and for interim periods beginning after December 15, 2024.

Early adoption is permitted.

The Company is currently evaluating the impact of this ASU to its segment disclosures.

NOTE 2 – REVENUE RECOGNITION

The Company generates revenue from sales of modular carpet, resilient flooring, rubber flooring, and other flooring-related material, and from the installation of carpet and other flooring-related material.

A summary of these revenue streams, as a percentage of net sales, for the three and nine months ended October 1, 2023 and October 2, 2022 is as follows:

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

A summary of these revenue streams, as a percentage of net sales, for the three months ended March 31, 2024 and April 2, 2023 is as follows:

Three Months Ended

March 31, 2024 April 2, 2023

Revenue from the sale of flooring material

98 % 96 % 98 % 97 %

Revenue from installation of flooring material

2 % 4 % 2 % 3 %

Disaggregation of Revenue

For the three and nine months ended October 1, 2023 and October 2, 2022, revenue from the Company’s customers is broken down by geography as follows:

Three Months Ended Nine Months Ended

Geography October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

For the three months ended March 31, 2024 and April 2, 2023, revenue from the Company’s customers is broken down by geography as follows:

Three Months Ended

Geography March 31, 2024 April 2, 2023

Americas 58.6 % 57.2 %

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Inventories are summarized as follows:

October 1, 2023 January 1, 2023

March 31, 2024 December 31, 2023

(in thousands)

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NOTE 4 – EARNINGS PER SHARE

The Company computes basic earnings per share (“EPS”) by dividing net income by the weighted average common shares outstanding, including participating securities outstanding, during the period as discussed below.

Diluted EPS reflects the potential dilution beyond shares for basic EPS that could occur if securities or other contracts to issue common stock were exercised, converted into common stock or resulted in the issuance of common stock that would have shared in the Company’s earnings.

The Company computes basic earnings (loss) per share (“EPS”) by dividing net income (loss) by the weighted average common shares outstanding, including participating securities outstanding, during the period as discussed below.

The Company includes all unvested stock awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding for basic EPS as these awards are considered participating securities.

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The following table shows the computation of basic and diluted EPS:

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

Three Months Ended

March 31, 2024 April 2, 2023

(in thousands, except per share data)

Net income $ 9,879 $ 14,065 $ 24,962 $ 44,176

Net income (loss) $ 14,179 $ ( 714 )

distributed and undistributed earnings available to participating securities ( 150 ) ( 9 )

Distributed and undistributed earnings available to common shareholders $ 9,762 $ 13,819 $ 24,635 $ 43,460

Distributed and undistributed earnings (loss) available to common shareholders $ 14,029 $ ( 723 )

Weighted average shares outstanding 57,623 57,177

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Diluted EPS $ 0.24 $ ( 0.01 )

For both the three and nine months ended October 1, 2023, 855,785 non-participating securities that could potentially dilute basic EPS in the future, consisting of restricted share units and performance shares, were excluded from the computation of diluted EPS as these securities would have been antidilutive for the respective periods.

For the three months ended March 31, 2024 and April 2, 2023, 1,049,405 and 1,728,579 non-participating securities that could potentially dilute basic EPS in the future, respectively, consisting of restricted share units and performance shares, were excluded from the computation of diluted EPS as these securities would have been antidilutive for the respective periods.

NOTE 5 – LONG-TERM DEBT

Long-term debt consisted of the following:

October 1, 2023 January 1, 2023

March 31, 2024 December 31, 2023

Outstanding Principal Interest Rate (1)

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Syndicated Credit Facility (2) :

Revolving loan borrowings $ 5,895 7.33 % $ 24,250 5.29 %

Term loan borrowings $ 95,988 6.26 % $ 121,658 6.61 %

Total borrowings under Syndicated Credit Facility 149,256 6.66 % 226,332 5.78 %

5.50% Senior Notes due 2028 300,000 5.50 % 300,000 5.50 %

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(1) Represents the weighted average rate of interest for borrowings under the Syndicated Credit Facility and the stated rate of interest for the 5.50 % Senior Notes due 2028, without the effect of debt issuance costs.

(2) The Syndicated Credit Facility also includes a multicurrency revolving loan facility up to $ 300.0 million.

There were no revolving loan borrowings outstanding as of March 31, 2024 or December 31, 2023.

Syndicated Credit Facility

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Interest on base rate loans is charged at varying rates computed by applying a margin depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter.

Interest on SOFR-based and alternative currency loans and fees for letters of credit are charged at varying rates computed by applying a margin over the applicable SOFR rate or alternative currency rate, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter.

Interest on SOFR-based and alternative currency loans is charged at varying rates computed by applying a margin over the applicable SOFR rate or alternative currency rate, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter.

In addition, the Company pays a commitment fee per annum (depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter) on the unused portion of the Facility.

As of both October 1, 2023 and January 1, 2023, the Company had $ 1.6 million in letters of credit outstanding under the Facility.

As of both October 1, 2023 and January 1, 2023, the carrying value of the Company’s borrowings under the Facility approximated its fair value as the Facility bears interest rates that are similar to existing market rates.

Fees for commercial letters of credit are computed as a percentage of the amount available to be drawn under such letters of credit.

Fees for standby letters of credit are charged at varying rates computed by applying a margin of the amount available to be drawn under such standby letters of credit, depending on the Company’s consolidated net leverage ratio as of the most recently completed fiscal quarter.

As of both March 31, 2024 and December 31, 2023, the Company had $ 1.6 million in letters of credit outstanding under the Facility.

As of both March 31, 2024 and December 31, 2023, the carrying value of the Company’s borrowings under the Facility approximated its fair value as the Facility bears interest rates that are similar to existing market rates.

The fair value of borrowings under the Facility is estimated using observable market rates and is considered Level 2 within the fair value hierarchy.

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The Senior Notes are unsecured and are guaranteed, jointly and severally, by each of the Company’s material domestic subsidiaries, all of which also guarantee the obligations of the Company under its Facility.

As of October 1, 2023, the estimated fair value of the Senior Notes was $ 258.8 million, compared with a carrying value recorded in the Company’s consolidated condensed balance sheet of $ 296.3 million ($ 300.0 million excluding $ 3.7 million of unamortized debt issuance costs).

As of March 31, 2024, the estimated fair value of the Senior Notes was $ 287.0 million, compared with a net carrying value recorded in the Company’s consolidated condensed balance sheet of $ 296.7 million ($ 300.0 million gross, excluding the impact of $ 3.3 million of unamortized debt issuance costs).

The fair value of the Senior Notes is derived using quoted prices for similar instruments and is considered Level 2 within the fair value hierarchy.

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As these fees are expensed over the life of the outstanding borrowing, the debt balance will increase by the same amount as the fees that are expensed.

As of October 1, 2023 and January 1, 2023, the unamortized debt issuance costs recorded as a reduction of long-term debt were $ 4.9 million and $ 6.1 million, respectively.

Debt issuance costs related to the issuance of revolving debt, which include underwriting, legal and other direct costs, net of accumulated amortization, were $ 1.5 million and $ 1.8 million as of October 1, 2023 and January 1, 2023, respectively.

As of March 31, 2024 and December 31, 2023, the unamortized debt issuance costs recorded as a reduction of long-term debt were $ 4.2 million and $ 4.4 million, respectively.

Debt issuance costs related to the issuance of revolving debt, which include underwriting, legal and other direct costs, net of accumulated amortization, were $ 1.3 million and $ 1.4 million as of March 31, 2024 and December 31, 2023, respectively.

These amounts are included in other assets in the Company’s consolidated condensed balance sheets.

The Company amortizes these costs over the life of the related debt.

NOTE 6 – DERIVATIVE INSTRUMENTS

Interest Rate Risk Management

From time to time, the Company enters into interest rate swap transactions to fix the variable interest rate on a portion of its term loan borrowing in order to manage a portion of its exposure to interest rate fluctuations.

The Company’s objective and strategy with respect to these interest rate swaps is to protect the Company against adverse fluctuations in interest rates by reducing its exposure to variability to cash flows relating to interest payments on a portion of its outstanding debt.

Cash Flow Interest Rate Swaps

In the fourth quarter of 2020, the Company terminated its designated interest rate swap transactions with a total notional value of $ 250 million.

Hedge accounting was also discontinued at that time.

Losses recorded in accumulated other comprehensive loss for these terminated interest rate swaps are reclassified and recorded in the consolidated condensed statements of operations to the extent it is probable that a portion of the original forecasted transactions related to the portion of the hedged debt repaid will not occur by the end of the originally specified time period.

See Note 14 entitled “Items Reclassified From Accumulated Other Comprehensive Loss” for additional information.

As of October 1, 2023, all amounts related to the terminated interest rate swaps have been recognized in the consolidated condensed statements of operations, and there was no remaining balance in accumulated other comprehensive loss associated with the terminated interest rate swaps.

As of January 1, 2023, the remaining accumulated other comprehensive loss associated with the terminated interest rate swaps to be amortized to earnings over the remaining term of the interest rate swaps prior to termination, before tax, was $ 1.0 million.

NOTE 6 – SHAREHOLDERS’ EQUITY

The following tables depict the activity in the accounts which make up shareholders’ equity for the nine months ended October 1, 2023 and October 2, 2022:

The following tables depict the activity in the accounts which make up shareholders’ equity for the three months ended March 31, 2024 and April 2, 2023:

SHARES COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED

EARNINGS PENSION LIABILITY FOREIGN CURRENCY TRANSLATION ADJUSTMENT CASH FLOW

EARNINGS PENSION LIABILITY FOREIGN CURRENCY TRANSLATION ADJUSTMENT TOTAL

(in thousands, except per share data)

Balance, at January 1, 2023 58,106 $ 5,811 $ 244,159 $ 278,639 $ ( 27,548 ) $ ( 138,775 ) $ ( 749 )

Net loss — — — ( 714 ) — — —

Issuances of stock related to performance shares 79 8 ( 8 ) — — — —

Cash dividends declared, $ 0.01 per common share

Balance, at December 31, 2023 58,112 $ 5,811 $ 252,909 $ 320,833 $ ( 34,016 ) $ ( 119,590 ) $ 425,947

— — — 14,179 — — 14,179

Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings ( 132 ) ( 14 ) 1,850 — — — —

Pension liability adjustment — — — — ( 279 ) — —

Foreign currency translation adjustment — — — — — 4,930 —

Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge — — — — — — 299

Balance, at April 2, 2023 58,053 $ 5,805 $ 246,001 $ 277,345 $ ( 27,827 ) $ ( 133,845 ) $ ( 450 )

Net income — — — 15,797 — — —

Issuances of stock related to restricted share units and performance shares

Restricted stock issuances 102 10 697 — — — —

Unrecognized compensation expense related to restricted stock awards — — ( 708 ) — — — —

Cash dividends declared, $ 0.01 per common share

472 47 ( 47 ) — — — —

Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings ( 48 ) ( 5 ) 1,808 — — — —

Pension liability adjustment — — — — ( 800 ) — —

Foreign currency translation adjustment — — — — — 1,361 —

Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge — — — — — — 300

Balance, at July 2, 2023 58,112 $ 5,811 $ 247,797 $ 292,561 $ ( 28,627 ) $ ( 132,484 ) $ ( 150 )

Net income — — — 9,879 — — —

Cash dividends declared, $ 0.01 per common share

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Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings

( 311 ) ( 31 ) ( 324 ) — — — ( 355 )

Pension liability adjustment — — — — 458 — 458

Foreign currency translation adjustment — — — — — ( 11,092 ) ( 11,092 )

Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge — — — — — — 150

Balance, at October 1, 2023 58,107 $ 5,811 $ 249,979 $ 301,859 $ ( 28,425 ) $ ( 141,660 ) $ —

Balance, at March 31, 2024 58,273 $ 5,827 $ 252,538 $ 334,423 $ ( 33,558 ) $ ( 130,682 ) $ 428,548

SHARES COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED

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Balance, at January 1, 2023 58,106 $ 5,811 $ 244,159 $ 278,639 $ ( 27,548 ) $ ( 138,775 ) $ ( 749 ) $ 361,537

Net income — — — 13,293 — — —

Restricted stock issuances 303 30 3,966 — — — —

Unrecognized compensation expense related to restricted stock awards — — ( 3,996 ) — — — —

Cash dividends declared, $ 0.01 per common share

— — — ( 714 ) — — — ( 714 )

Compensation expense related to share-based plans, net of shares received for tax withholdings ( 30 ) ( 2 ) 1,787 — — — —

Pension liability adjustment — — — — 1,539 — —

Foreign currency translation adjustment — — — — — ( 13,184 ) —

Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge — — — — — — 641

Balance, at April 3, 2022 59,328 $ 5,933 $ 254,867 $ 274,135 $ ( 52,349 ) $ ( 113,625 ) $ ( 2,081 )

Net income — — — 16,818 — — —

Restricted stock issuances 198 20 2,533 — — — —

Unrecognized compensation expense related to restricted stock awards — — ( 2,553 ) — — — —

Cash dividends declared, $ 0.01 per common share

Issuances of stock related to performance shares

79 8 ( 8 ) — — — — —

Compensation expense related to share-based plans, net of forfeitures ( 14 ) ( 1 ) 2,145 — — — —

Share repurchases ( 415 ) ( 42 ) ( 5,540 ) — — — —

Pension liability adjustment — — — — 3,842 — —

Foreign currency translation adjustment — — — — — ( 36,670 ) —

Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge — — — — — — 540

Balance, at July 3, 2022 59,097 $ 5,910 $ 251,452 $ 290,358 $ ( 48,507 ) $ ( 150,295 ) $ ( 1,541 )

Net income — — — 14,065 — — —

Cash dividends declared, $ 0.01 per common share

— — — ( 580 ) — — — ( 580 )

Compensation expense related to share-based plans, net of forfeitures ( 16 ) ( 2 ) 2,353 — — — —

Share repurchases ( 711 ) ( 71 ) ( 8,798 ) — — — —

Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings

( 132 ) ( 14 ) 1,850 — — — — 1,836

Pension liability adjustment — — — — ( 279 ) — — ( 279 )

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Reclassification out of accumulated other comprehensive loss – discontinued cash flow hedge — — — — — — 299 299

Balance, at October 2, 2022 58,370 $ 5,837 $ 245,007 $ 303,837 $ ( 45,114 ) $ ( 187,095 ) $ ( 1,049 )

Repurchase of Common Stock

In the second quarter of 2022, the Company adopted a new share repurchase program in which the Company is authorized to repurchase up to $ 100 million of its outstanding shares of common stock.

The program has no specific expiration date.

No shares of common stock were repurchased during the nine months ended October 1, 2023.

During the nine months ended October 2, 2022, the Company repurchased 1,126,176 shares of common stock at a weighted average price of $ 12.83 per share pursuant to this program.

Balance, at April 2, 2023 58,053 $ 5,805 $ 246,001 $ 277,345 $ ( 27,827 ) $ ( 133,845 ) $ ( 450 ) $ 367,029

The Company has share-based employee compensation plans, which are described more fully in Note 14 to the consolidated financial statements included in Item 8 of the Annual Report on Form 10-K for the fiscal year ended December 31, 2023 .

Restricted Stock Awards

During the nine months ended October 1, 2023, the Company granted restricted stock awards for 102,300 shares of common stock.

Awards of restricted stock (or a portion thereof) vest with respect to each recipient over a one to three-year period from the date of grant, provided the individual remains in the employment or service of the Company as of the vesting date.

Additionally, certain awards (or a portion thereof) could vest earlier in the event of a change in control of the Company or upon involuntary termination without cause.

For certain restricted stock awards with a graded vesting schedule, the Company has elected to recognize compensation expense on a straight-line basis over the requisite service period for the entire award.

Compensation expense related to restricted stock grants was $ 3.4 million and $ 4.0 million for the nine months ended October 1, 2023 and October 2, 2022, respectively.

Compensation expense related to restricted stock grants was $ 0.9 million and $ 1.4 million for the three months ended March 31, 2024 and April 2, 2023, respectively.

The Company has reduced its expense for any restricted stock forfeited during the period.

The following table summarizes restricted stock outstanding as of October 1, 2023, as well as activity during the nine months then ended:

The following table summarizes restricted stock outstanding as of March 31, 2024, as well as activity during the three months then ended:

Restricted Shares Weighted Average

Outstanding at January 1, 2023 1,006,400 $ 13.91

Granted 102,300 6.92

Outstanding at December 31, 2023 691,600 $ 12.55

Vested ( 324,300 ) 13.94

Forfeited or canceled ( 1,200 ) 13.19

Outstanding at October 1, 2023 686,800 $ 12.56

As of October 1, 2023, the unrecognized total compensation cost related to unvested restricted stock was $ 2.8 million.

Outstanding at March 31, 2024 366,100 $ 11.32

As of March 31, 2024, the unrecognized total compensation cost related to unvested restricted stock was $ 0.9 million.

That cost is expected to be recognized by the first quarter of 2025.

Restricted Share Unit Awards

During the nine months ended October 1, 2023, the Company granted awards for 596,200 restricted share units to certain employees pursuant to the Company’s 2020 Omnibus Stock Incentive Plan.

Each restricted share unit represents one share of the Company’s common stock to be issued to the award recipient once the vesting criteria have been satisfied.

Awards of restricted share units have a graded vesting schedule over a two to three-year period from the date of grant, provided the individual remains in the employment or service of the Company as of each vesting date.

Additionally, certain awards (or a portion thereof) could vest earlier in the event of a change in control of the Company, upon involuntary termination without cause, or upon retirement provided certain eligibility criteria are met.

The Company recognizes expense related to restricted share unit grants based on the grant date fair value of the units awarded, as determined by the market price of the Company’s common stock at date of grant.

The expense is captured in selling, general and administrative expenses in the consolidated condensed statements of operations, which is consistent with the classification of expense for other share-based awards.

The Company has elected to recognize compensation expense on a straight-line basis over the requisite service period for the entire award for awards with a graded vesting schedule.

Compensation expense related to the restricted share units was $ 1.5 million for the nine months ended October 1, 2023.

The Company reduces its expense for any restricted share units forfeited during the period.

Grants of restricted share units are made primarily to executive-level personnel at the Company and, as a result, no compensation costs have been capitalized.

The following table summarizes restricted share units outstanding as of October 1, 2023, as well as activity during the nine months then ended:

Compensation expense related to the restricted share units was $ 0.9 million and $ 0.5 million for the three months ended March 31, 2024 and April 2, 2023, respectively.

The Company has reduced its expense for any restricted share units forfeited during the period.

The following table summarizes restricted share units outstanding as of March 31, 2024, as well as activity during the three months then ended:

Restricted Share Units Weighted Average

Outstanding at January 1, 2023 — $ —

Outstanding at December 31, 2023 583,400 $ 10.35

Granted 402,800 13.24

1 unchanged sentence

Forfeited or canceled ( 4,000 ) 10.80

Outstanding at October 1, 2023 583,400 $ 10.35

As of October 1, 2023, the unrecognized total compensation cost related to unvested restricted share units was $ 4.6 million.

That cost is expected to be recognized by the end of 2026.

Outstanding at March 31, 2024 830,600 $ 11.67

As of March 31, 2024, the unrecognized total compensation cost related to unvested restricted share units was $ 8.5 million.

That cost is expected to be recognized by the first quarter of 2027.

Performance Share Awards

During the nine months ended October 1, 2023, the Company issued awards of performance shares to certain employees.

These awards vest based on the achievement of certain performance-based goals over a performance period of one to three years , subject to (among other things) the employee’s continued employment through the last date of the performance period, and will be settled in shares of our common stock or in cash at the Company’s election.

The number of shares that may be issued in settlement of the performance shares to the award recipients may be greater (up to 200 %) or lesser than the nominal award amount depending on actual performance achieved as compared to the performance targets set forth in the awards.

The Company evaluates the probability of achieving the performance-based goals as of the end of each reporting period and adjusts compensation expense based on this assessment.

The following table summarizes the performance shares outstanding as of October 1, 2023, as well as the activity during the nine months then ended:

The following table summarizes the performance shares outstanding as of March 31, 2024, as well as the activity during the three months then ended:

Performance Shares Weighted Average

Outstanding at January 1, 2023 923,600 $ 13.91

Outstanding at December 31, 2023 1,115,000 $ 12.36

Granted 402,800 13.24

1 unchanged sentence

Forfeited or canceled ( 12,800 ) 12.82

Outstanding at October 1, 2023 1,115,000 $ 12.36

Compensation expense related to the performance shares was $ 2.4 million and $ 2.7 million for the nine months ended October 1, 2023 and October 2, 2022, respectively.

Outstanding at March 31, 2024 1,184,300 $ 12.24

Compensation expense related to the performance shares was $ 2.1 million and $ 1.1 million for the three months ended March 31, 2024 and April 2, 2023, respectively.

The Company has reduced its expense for any performance shares forfeited during the period.

Unrecognized compensation expense related to these performance shares was approximately $ 7.3 million as of October 1, 2023.

Depending on the performance of the Company, any compensation expense related to these outstanding performance shares will be recognized by the first quarter of 2026.

The tax benefit recognized with respect to restricted stock, restricted share units and performance shares was approximately $ 0.7 million for the nine months ended October 1, 2023.

Unrecognized compensation expense related to these performance shares was approximately $ 9.0 million as of March 31, 2024.

The amount and timing of future compensation expense will depend on the performance of the Company.

The compensation expense related to these outstanding performance shares is expected to be recognized by the first quarter of 2027.

The tax benefit recognized with respect to restricted stock, restricted share units and performance shares was approximately $ 0.5 million for the three months ended March 31, 2024.

NOTE 7 – LEASES

The Company has operating and finance leases for manufacturing equipment, corporate offices, showrooms, distribution facilities, design centers, as well as computer and office equipment.

The Company’s leases have terms ranging from 1 to 20 years, some of which may include options to extend the lease term for up to 5 years, and certain leases may include an option to terminate the lease.

Our lease accounting may include these options to extend or terminate a lease when it is reasonably certain that we will exercise that option.

The Company records a right-of-use asset and lease liability for leases extending beyond one year for operating and finance leases once a contract that contains a lease is executed and we have the right to control the use of the leased asset.

The right-of-use asset is measured as the present value of the lease obligation.

The discount rate used to calculate the present value of the lease liability was the Company’s incremental borrowing rate for the applicable geographical region.

As of October 1, 2023, there were no significant leases that had not commenced.

The table below represents a summary of the balances recorded in the consolidated condensed balance sheets related to the Company’s leases as of October 1, 2023 and January 1, 2023:

October 1, 2023 January 1, 2023

The table below represents a summary of the balances recorded in the consolidated condensed balance sheets related to the Company’s leases as of March 31, 2024 and December 31, 2023:

March 31, 2024 December 31, 2023

Balance Sheet Location Operating Leases Finance Leases Operating Leases Finance Leases

8 unchanged sentences

Total finance lease liabilities $ 7,183 $ 7,622

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

As of March 31, 2024, there were no significant leases that had not commenced.

Three Months Ended

March 31, 2024 April 2, 2023

(in thousands)

7 unchanged sentences

Other Supplemental Information

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

Three Months Ended

March 31, 2024 April 2, 2023

(in thousands)

4 unchanged sentences

Right-of-use assets obtained in exchange for new finance lease liabilities 390 557

Right-of-use assets obtained (adjusted) in exchange for new (remeasured) operating lease liabilities

236 ( 734 ) 4,199 6,089

Right-of-use assets obtained in exchange for new operating lease liabilities 265 1,121

Lease Term and Discount Rate

The table below presents the weighted average remaining lease terms and discount rates for finance and operating leases as of October 1, 2023 and January 1, 2023:

October 1, 2023 January 1, 2023

The table below presents the weighted average remaining lease terms and discount rates for finance and operating leases as of March 31, 2024 and December 31, 2023:

March 31, 2024 December 31, 2023

Weighted-average remaining lease term – finance leases (in years) 3.60 3.70

6 unchanged sentences

(in thousands)

2023 (excluding the nine months ended October 1, 2023)

2024 (excluding the three months ended March 31, 2024)

$ 12,770 $ 2,170

6 unchanged sentences

Present value discount ( 25,097 ) ( 819 )

Total lease liability $ 78,383 $ 6,790

Total lease liabilities

$ 86,860 $ 7,183

NOTE 8 – EMPLOYEE BENEFIT PLANS

During the three and nine months ended October 1, 2023, the Company recorded multi-employer pension expense related to multi-employer contributions of $ 0.7 million and $ 2.0 million, respectively.

During the three and nine months ended October 2, 2022, the Company recorded multi-employer pension expense related to multi-employer contributions of $ 0.5 million and $ 1.8 million, respectively.

The following tables provide the components of net periodic benefit cost for the three and nine months ended October 1, 2023 and October 2, 2022:

Three Months Ended Nine Months Ended

During the three-month periods ended March 31, 2024 and April 2, 2023, the Company recorded multi-employer pension expense related to multi-employer contributions of $ 0.7 million and $ 0.6 million, respectively.

The following tables provide the components of net periodic benefit cost for the three months ended March 31, 2024 and April 2, 2023:

Three Months Ended

Defined Benefit Retirement Plans (Europe)

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

March 31, 2024 April 2, 2023

(in thousands)

4 unchanged sentences

Net periodic benefit cost $ 58 $ 23

Three Months Ended Nine Months Ended

Salary Continuation Plan October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

Three Months Ended

Salary Continuation Plan March 31, 2024 April 2, 2023

(in thousands)

2 unchanged sentences

Net periodic benefit cost $ 326 $ 332

Three Months Ended Nine Months Ended

Three Months Ended

nora Defined Benefit Plan

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

March 31, 2024 April 2, 2023

(in thousands)

1 unchanged sentence

Interest cost 264 272

Amortization of net actuarial (gains) losses ( 110 ) 44 ( 330 ) 142

Amortization of net actuarial gains

Net periodic benefit cost $ 390 $ 277

In accordance with applicable accounting standards, the service cost component of net periodic benefit costs is presented within operating income in the consolidated condensed statements of operations, while all other components of net periodic benefit costs are presented within other expense, net, in the consolidated condensed statements of operations.

NOTE 10 – GOODWILL AND INTANGIBLE ASSETS

The ending balance and the change in the carrying amount of goodwill for the nine months ended October 1, 2023, are as follows:

In accordance with applicable accounting standards, the service cost component of net periodic benefit costs is presented within operating income in the consolidated condensed statements of operations, while all other components of net periodic benefit costs are presented within other (income) expense, net, in the consolidated condensed statements of operations.

NOTE 9 – GOODWILL AND OTHER INTANGIBLE ASSETS

The ending balance and the change in the carrying amount of good will fo r the three months ended March 31, 2024 is as follows:

(in thousands)

Balance, at January 1, 2023 $ 102,417

Balance, at December 31, 2023 $ 105,448

Foreign currency translation (2)

Balance, at October 1, 2023 $ 101,224

Balance, at March 31, 2024 $ 103,197

(1) The goodwill balance is allocated entirely to the AMS reportable segment.

All goodwill allocated to the EAAA reportable segment was previously written off as a result of impairment charges.

(2) A portion of the goodwill balance is comprised of goodwill denominated in foreign currency attributable to the nora acquisition.

The net carrying value of intangible assets other than goodwill was $ 55.3 million and $ 59.8 million at October 1, 2023 and January 1, 2023, respectively.

The net carrying value of intangible assets other than goodwill was $ 53.8 million and $ 56.3 million at March 31, 2024 and December 31, 2023, respectively.

NOTE 10 – SEGMENT INFORMATION

3 unchanged sentences

The AMS operating segment includes the United States, Canada and Latin America geographic areas.

Pursuant to the management approach discussed above, the Company’s CODM, our chief executive officer, evaluates performance at the AMS and EAAA operating segment levels and makes operating and resource allocation decisions based on segment adjusted operating income (“AOI”), which includes allocations of corporate selling, general and administrative expenses.

AOI excludes nora purchase accounting amortization, Thailand plant closure inventory write-down, Cyber Event impact, and restructuring, asset impairment, severance, and other, net.

Intersegment revenues for the three and nine months ended October 1, 2023, were $ 25.0 million and $ 72.3 million, respectively, and intersegment revenues for the three and nine months ended October 2, 2022, were $ 19.7 million and $ 56.4 million, respectively.

AOI excludes:

nora purchase accounting amortization;

Cyber Event impact;

property casualty loss;

and restructuring, asset impairment, severance, and other, net.

Intersegment revenues for the three months ended March 31, 2024 and April 2, 2023 were $ 16.8 million and $ 22.6 million, respectively.

Intersegment revenues are eliminated from net sales presented below since these amounts are not included in the information provided to the CODM.

The Company has determined that it has two reportable segments – AMS and EAAA, as each operating segment meets the quantitative thresholds defined in the accounting guidance.

Segment information for the three and nine months ended October 1, 2023 and October 2, 2022, is presented in the following table:

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

During the first quarter of 2024, the Company implemented a cost center realignment initiative to centralize certain global/shared functions.

For the quarter ended March 31, 2024, SG&A expenses for these global support functions were allocated to AOI for each reportable segment consistent with the allocation methodology used to allocate corporate overhead in prior periods.

Prior year AOI amounts below were not recast as there was no material impact to the measure of segment profit for each reportable segment.

There were no changes to the composition of the Company’s operating or reportable segments.

Segment information for the three months ended March 31, 2024 and April 2, 2023 is presented in the following table:

Three Months Ended

March 31, 2024 April 2, 2023

(in thousands)

9 unchanged sentences

A reconciliation of the Company’s total operating segment assets to the corresponding consolidated amounts follows:

October 1, 2023 January 1, 2023

March 31, 2024 December 31, 2023

(in thousands)

5 unchanged sentences

Total reported assets $ 1,193,492 $ 1,230,095

Reconciliations of operating income to income before income tax expense and segment AOI are presented as follows:

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

Reconciliations of operating income to income (loss) before income tax expense and segment AOI are presented as follows:

Three Months Ended

March 31, 2024 April 2, 2023

(in thousands)

3 unchanged sentences

Interest expense 6,423 8,505

Other expense, net

Other (income) expense, net

( 976 ) 1,500

Income before income tax expense $ 16,120 $ 20,171 $ 36,710 $ 66,512

Three Months Ended October 1, 2023 Three Months Ended October 2, 2022

Income (loss) before income tax expense $ 18,999 $ ( 528 )

Three Months Ended March 31, 2024 Three Months Ended April 2, 2023

AMS EAAA AMS EAAA

2 unchanged sentences

Purchase accounting amortization — 1,297 — 1,283

Thailand plant closure inventory write-down — — — 477

Cyber Event impact ( 246 ) ( 170 ) 228 200

Property casualty loss — — 1,300 —

Restructuring, asset impairment, severance, and other, net

1 unchanged sentence

AOI $ 18,080 $ 7,445 $ 11,269 $ 3,929

Nine Months Ended October 1, 2023 Nine Months Ended October 2, 2022

AMS EAAA AMS EAAA

NOTE 11 – SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information for the three months ended March 31, 2024 and April 2, 2023 is presented in the following table:

Three Months Ended

March 31, 2024 April 2, 2023

(in thousands)

Operating income $ 56,997 $ 12,373 $ 74,618 $ 15,369

Purchase accounting amortization — 3,886 — 3,817

Thailand plant closure inventory write-down — — — 2,530

Cyber Event impact 554 415 — —

Restructuring, asset impairment, severance, and other, net

Cash paid for interest

$ 2,099 $ 3,667

AOI $ 58,621 $ 16,805 $ 74,502 $ 25,908

NOTE 12 – SUPPLEMENTAL CASH FLOW INFORMATION

Cash payments for interest amounted to $ 17.6 million and $ 13.7 million for the nine months ended October 1, 2023 and October 2, 2022, respectively.

Income tax payments, net of refunds, amounted to $ 17.6 million and $ 11.5 million for the nine months ended October 1, 2023 and October 2, 2022, respectively.

See Note 8 entitled “Leases” for supplemental disclosures related to finance and operating leases.

Cash paid for income taxes, net of refunds

See Note 7 entitled “Leases” for additional supplemental disclosures related to finance and operating leases.

Non-Cash Financing Activities

On March 12, 2024, the Company declared cash dividends on its common stock of $ 0.6 million, which were paid during the second quarter of 2024 to shareholders of record as of March 29, 2024.

At March 31, 2024, the dividends were recorded within accrued expenses in the consolidated condensed balance sheet.

NOTE 12 – INCOME TAXES

The Company determines its provision for income taxes for interim periods using an estimate of its annual effective tax rate (“AETR”) and records any changes affecting the estimated AETR in the interim period in which the change occurs, including discrete tax items.

During the nine months ended October 1, 2023, the Company recorded a total income tax provision of $ 11.7 million on pre-tax income of $ 36.7 million resulting in an effective tax rate of 32.0 %, as compared to a total income tax provision of $ 22.3 million on pre-tax income of $ 66.5 million resulting in an effective tax rate of 33.6 % during the nine months ended October 2, 2022.

The decrease in the effective tax rate for the period ended October 1, 2023, as compared to the period ended October 2, 2022, was primarily due to favorable changes related to the cash surrender value of Company-owned life insurance, non-recurring non-deductible charges related to the closure of the Company’s manufacturing facility in Thailand incurred in the first nine months of 2022, and favorable changes related to foreign exchange movements.

This decrease was partially offset by a non-recurring favorable change to unrecognized tax benefits in the period ended October 2, 2022, non-deductible charges related to the substantial liquidation of subsidiaries in Brazil and Russia in the period ended October 1, 2023, and an increase in the valuation allowance on interest carryforwards.

In the first nine months of 2023, the Company decreased its liability for unrecognized tax benefits by $ 0.3 million.

As of October 1, 2023, the Company had accrued approximately $ 5.4 million for unrecognized tax benefits.

In accordance with applicable accounting standards, the Company’s deferred tax asset as of October 1, 2023, reflects a reduction for $ 2.8 million of these unrecognized tax benefits.

During the three months ended March 31, 2024, the Company recorded a total income tax provision of $ 4.8 million on pre-tax income of $ 19.0 million resulting in an effective tax rate of 25.4 %, as compared to a total income tax provision of $ 0.2 million on pre-tax loss of $ 0.5 million resulting in a negative effective tax rate of 35.2 % during the three months ended April 2, 2023.

The year-over-year change in the effective tax rate is primarily due to the tax effects of pre-tax income in the current year quarter compared to pre-tax loss in the prior year quarter and favorable changes related to share-based compensation and the limitation on the deduction for business interest expenses under Internal Revenue Code section 163(j).

The pre-tax loss for the three months ended April 2, 2023, included significant unusual or infrequent items that are specifically excluded from the AETR.

The tax effects related to these specifically excluded items are recognized discretely.

The income tax benefits recognized discretely were at a lower effective tax rate compared to the estimated AETR resulting in an overall negative effective tax rate for the three months ended April 2, 2023.

On December 20, 2021, the Organization for Economic Co-operation and Development (“OECD”) published Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large corporations at a minimum rate of 15 %.

The OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two global minimum tax.

Many non-U.S.

tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 (including the European Union Member States) with the adoption of additional components in later years or announced their plans to enact legislation in future years.

For fiscal year 2024, we expect to meet the Transitional Country-by-Country (CbCR) Safe Harbor rules for most if not all jurisdictions and do not expect these provisions to have a material impact on the Company’s financial statements.

We will continue to closely monitor ongoing developments and evaluate any potential impact on future periods.

In the first three months of 2024, the Company increased its liability for unrecognized tax benefits by $ 0.3 million.

As of March 31, 2024, the Company had accrued approximately $ 5.2 million for unrecognized tax benefits.

In accordance with applicable accounting standards, the Company’s deferred tax asset as of March 31, 2024 reflects a reduction for $ 2.8 million of these unrecognized tax benefits.

Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances, including the progress of tax audits and the closing of statutes of limitations.

Based on information currently available, it is reasonably possible that approximately $ 0.5 million of unrecognized tax benefits may be recognized within the next 12 months, of which $ 0.5 million would result in a favorable impact to the effective tax rate.

While it is reasonably possible that some of the unrecognized tax benefits will be recognized within the next 12 months, the Company does not expect the recognition of such amounts will have a material impact on the Company’s financial results.

NOTE 13 – ITEMS RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE LOSS

Amounts reclassified out of accumulated other comprehensive loss (“AOCI”), before tax, to the consolidated condensed statements of operations during the three and nine months ended October 1, 2023 and October 2, 2022, are reflected in the tables below:

Amounts reclassified out of accumulated other comprehensive loss (“AOCI”), before tax, to the consolidated condensed statements of operations during the three months ended March 31, 2024 and April 2, 2023 are reflected in the table below:

Three Months Ended

Statement of Operations Location October 1, 2023 October 2, 2022

(in thousands)

Loss on foreign subsidiary liquidation (1)

Other expense, net

$ ( 6,221 ) $ —

Interest rate swap contracts loss Interest expense ( 196 ) ( 645 )

Amortization of benefit plan net actuarial losses and prior service cost Other expense, net

( 198 ) ( 450 )

Total loss reclassified from AOCI $ ( 6,615 ) $ ( 1,095 )

Nine Months Ended

Statement of Operations Location October 1, 2023 October 2, 2022

Statement of Operations Location March 31, 2024 April 2, 2023

(in thousands)

Loss on foreign subsidiary liquidation (1)

Other expense, net

$ ( 6,221 ) $ —

Interest rate swap contracts loss Interest expense $ — $ ( 393 )

Amortization of benefit plan net actuarial losses and prior service cost Other expense, net

Amortization of benefit plan net actuarial losses and prior service cost Other (income) expense, net

( 374 ) ( 192 )

Total loss reclassified from AOCI $ ( 374 ) $ ( 585 )

(1) The Company’s foreign subsidiaries in Russia and Brazil were substantially liquidated during the three months ended October 1, 2023, and the cumulative foreign currency translation losses associated with these entities were recognized in the consolidated condensed statements of operations.

The tax impact of the cumulative foreign currency translation reclassification is approximately $ 1.1 million.

NOTE 15 – RESTRUCTURING AND OTHER

Restructuring, asset impairment, other (gains) and charges were as follows:

Three Months Ended Nine Months Ended

October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022

(in thousands)

Restructuring, asset impairment, other (gains) and charges (1)

$ — $ ( 105 ) $ ( 2,502 ) $ 1,592

(1) Restructuring, asset impairment, other (gains) and charges are attributable to the EAAA reportable segment.

2021 Restructuring Plan

On September 8, 2021, the Company committed to a new restructuring plan that continued to focus on efforts to improve efficiencies and decrease costs across its worldwide operations.

The plan involved a reduction of approximately 188 employees and the closure of the Company’s manufacturing facility in Thailand at the end of the first quarter of 2022.

Expected charges and cumulative charges incurred to date under the 2021 restructuring plan are as follows:

Workforce Reduction Retention Bonuses Asset Impairment and Other Related Charges Total

(in thousands)

Estimated expected charges (1)

$ 2,281 $ 474 $ 3,295 $ 6,050

Cumulative charges incurred to date (1)

2,281 474 3,295 6,050

(1) Charges are attributable to the EAAA reportable segment.

A summary of the restructuring reserve balance, recorded within accrued expenses in the consolidated condensed balance sheets, for the 2021 restructuring plan is presented below:

Workforce Reduction Retention Bonuses Asset Impairment and Other Related Charges Total

(in thousands)

Balance, at January 1, 2023 $ 277 $ 179 $ — $ 456

Charged to expenses 23 ( 19 ) 174 178

Deductions ( 300 ) ( 160 ) — ( 460 )

Charged to other accounts — — ( 174 ) ( 174 )

Balance, at October 1, 2023 $ — $ — $ — $ —

The Company recognized a gain of $ 2.7 million on the sale of the Thailand facility during the second quarter of 2023.

See Note 16 entitled “Assets Disposed” for additional information.

In addition, during the nine months ended October 2, 2022, in conjunction with the closure of its Thailand facility, the Company recorded a write-down of inventory of $ 2.5 million within cost of sales in the consolidated condensed statements of operations.

The Company completed the 2021 restructuring plan in the second quarter of 2023, following the sale of the Thailand manufacturing facility, as described in Note 16 entitled “Assets Disposed,” and expects the plan to yield annualized savings of approximately $ 1.7 million.

A portion of the annualized savings was realized on the consolidated condensed statements of operations in fiscal year 2022, with the remaining portion of the annualized savings expected to be realized in fiscal year 2023.

NOTE 16 – ASSETS DISPOSED

On September 8, 2021, the Company announced a restructuring plan that involved the closure of its manufacturing facility in Thailand and committed to a plan to sell the Thailand facility in connection with this restructuring plan.

See Note 15 entitled “Restructuring and Other” for additional information.

During the second quarter of 2023, the Company completed the sale of the Thailand manufacturing facility for a selling price of $ 6.6 million and recognized a gain of $ 2.7 million, which is recorded in restructuring, asset impairment, other (gains) and charges in the consolidated condensed statements of operations and is attributable to the EAAA reportable segment.

The Company determined that the Thailand facility sale did not meet the criteria for classification as discontinued operations.

NOTE 14 – COMMITMENTS AND CONTINGENCIES

From time to time, we are a party to legal proceedings, whether arising in the ordinary course of business or otherwise.

See disclosure under the headings “Lawsuit by Former CEO in Connection with Termination” and “Putative Class Action Lawsuit” set forth in Note 18 to the consolidated financial statements included in Item 8 of the Annual Report on Form 10-K for the fiscal year ended January 1, 2023 .

In the lawsuit by the former CEO, Mr.

Gould filed a motion for reconsideration of the Court’s grant of summary judgment in favor of the Company on Mr.

Gould’s breach of contract claim.

On July 31, 2023, the Court denied that motion for reconsideration.

Also on July 31, 2023, the Company filed a motion to dismiss without prejudice its counterclaim against Mr.

Gould for breach of fiduciary duty.

On August 2, 2023, the Court granted that motion to dismiss, resulting in a final judgment in the trial court.

The court’s award of summary judgment in favor of the Company on Mr.

Gould’s breach of contract claim has been appealed by Mr.

Gould to the U.S.

Court of Appeals for the 11th Circuit.

The Company believes Mr.

Gould’s lawsuit and the appeal therefrom is without merit and intends to defend vigorously against it.

In the putative class action, the Court preliminarily approved a settlement of the lawsuit for $ 7.5 million, and the Company’s insurers funded the settlement amount into escrow.

As a result, in the second quarter of 2023, the Company reversed the $ 7.5 million asset and liability that were previously recorded in the first quarter of 2023.

Putative class member proofs of claims were due by September 13, 2023, and in a hearing on October 19, 2023, the Court approved the final settlement of the action.

See disclosure under the heading “Lawsuit by Former CEO in Connection with Termination” set forth in Note 18 to the consolidated financial statements included in Item 8 of the Annual Report on Form 10-K for the fiscal year ended December 31, 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