What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-05 compared with 2024-08-06 · 150 added, 120 removed, 451 unchanged (37% of the section changed)

4 unchanged sentences

(in thousands, except par values)

JUNE 30, 2024 DECEMBER 31, 2023

SEPTEMBER 29, 2024 DECEMBER 31, 2023

Current assets

27 unchanged sentences

5,000 shares authorized;

none issued or outstanding at June 30, 2024 and December 31, 2023

none issued or outstanding at September 29, 2024 and December 31, 2023

Common stock, par value $ 0.10 per share;

120,000 shares authorized;

58,303 and 58,112 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

58,304 and 58,112 shares issued and outstanding at September 29, 2024 and December 31, 2023, respectively

Additional paid-in capital 257,282 252,909

9 unchanged sentences

(in thousands, except per share data)

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30, 2024 JULY 2, 2023 JUNE 30, 2024 JULY 2, 2023

THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 29, 2024 OCTOBER 1, 2023 SEPTEMBER 29, 2024 OCTOBER 1, 2023

Net sales $ 344,270 $ 311,006 $ 980,648 $ 936,380

6 unchanged sentences

Interest expense 5,721 8,163 18,317 24,986

Other expense (income), net

Other expense, net

381 6,702 237 7,674

11 unchanged sentences

(in thousands)

THREE MONTHS ENDED SIX MONTHS ENDED

JUNE 30, 2024 JULY 2, 2023 JUNE 30, 2024 JULY 2, 2023

THREE MONTHS ENDED NINE MONTHS ENDED

SEPTEMBER 29, 2024 OCTOBER 1, 2023 SEPTEMBER 29, 2024 OCTOBER 1, 2023

Net income $ 28,443 $ 9,879 $ 65,180 $ 24,962

Other comprehensive (loss) income, after tax:

Other comprehensive income (loss), after tax:

Foreign currency translation adjustment 21,131 ( 9,176 ) 8,017 ( 2,885 )

Reclassification from accumulated other comprehensive loss – discontinued cash flow hedge — 300 — 599

Pension liability adjustment ( 1,210 ) 202 ( 218 ) ( 877 )

Other comprehensive (loss) income

Reclassification from accumulated other comprehensive loss – discontinued cash flow hedge — 150 — 749

Other comprehensive income (loss)

19,921 ( 8,824 ) 7,799 ( 3,013 )

6 unchanged sentences

(in thousands)

SIX MONTHS ENDED

JUNE 30, 2024 JULY 2, 2023

NINE MONTHS ENDED

SEPTEMBER 29, 2024 OCTOBER 1, 2023

OPERATING ACTIVITIES:

3 unchanged sentences

Share-based compensation expense 9,160 7,334

Gain on disposal of property, plant and equipment, net — ( 2,541 )

Deferred income taxes and other ( 4,805 ) ( 618 )

Loss (gain) on disposal of property, plant and equipment, net

139 ( 2,531 )

Loss on foreign subsidiary liquidation

Deferred income taxes

( 1,160 ) 438

( 2,318 ) ( 1,109 )

Amortization of acquired intangible assets 3,895 3,886

5 unchanged sentences

Cash provided by operating activities 110,387 114,217

34,158 47,924

INVESTING ACTIVITIES:

10 unchanged sentences

Cash used in financing activities ( 89,545 ) ( 80,847 )

( 36,960 ) ( 49,063 )

Net cash used in operating, investing and financing activities ( 14,369 ) ( 5,877 )

Net cash provided by operating, investing and financing activities

Effect of exchange rate changes on cash 955 ( 656 )

CASH AND CASH EQUIVALENTS:

Net decrease ( 16,311 ) ( 4,629 )

Balance, beginning of period 110,498 97,564

15 unchanged sentences

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 six-month periods ended June 30, 2024 and July 2, 2023 both include 26 weeks.

The three-month periods ended June 30, 2024 and July 2, 2023 both include 13 weeks.

The nine-month periods ended September 29, 2024 and October 1, 2023 both include 39 weeks.

The three-month periods ended September 29, 2024 and October 1, 2023 both include 13 weeks.

Risks and Uncertainties

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.

Global economic challenges, including the impacts of the Russia-Ukraine and Israel-Hamas wars or other conflicts around the globe, supply chain disruptions, and slow macro environments in certain geographical regions 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.

5 unchanged sentences

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

Reclassifications

Certain reclassifications to previously reported information have been made in the consolidated condensed statements of cash flows to conform to the current period presentation.

The previously reported line item “deferred income taxes and other” was separated into two line items in the current period presentation of the consolidated condensed statements of cash flows to provide additional information.

These reclassifications had no effect on cash provided by operating activities as previously reported.

Recently Issued Accounting Pronouncements – Not Yet Adopted

5 unchanged sentences

Early adoption is permitted.

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

We are currently assessing the updated guidance;

however, it is not expected to have a material impact to our consolidated financial statements.

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

4 unchanged sentences

Early adoption is permitted.

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

The Company has completed its evaluation of ASU 2023-07 and has determined that the new guidance will enhance our segment disclosures, but will not have a material impact to our consolidated financial statements.

NOTE 2 – REVENUE RECOGNITION

For the three and six months ended June 30, 2024 and July 2, 2023, revenue from sales of modular carpet, resilient flooring, rubber flooring, and other flooring-related material was approximately 98 % of total revenue.

The remaining 2 % of revenue was generated from the installation of carpet and other flooring-related material for both three-month and six-month periods ended June 30, 2024 and July 2, 2023.

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 September 29, 2024 and October 1, 2023 is as follows:

Three Months Ended

Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Revenue from the sale of flooring material

96 % 98 % 97 % 98 %

Revenue from installation of flooring material

Disaggregation of Revenue

For the three and six months ended June 30, 2024 and July 2, 2023, revenue from the Company’s customers is broken down by geography as follows:

For the three and nine months ended September 29, 2024 and October 1, 2023, revenue from the Company’s customers is broken down by geography as follows:

Three Months Ended

Six Months Ended

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

Nine Months Ended

Geography September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

Americas 61.0 % 57.3 % 60.7 % 58.6 %

5 unchanged sentences

Inventories are summarized as follows:

June 30, 2024 December 31, 2023

September 29, 2024 December 31, 2023

(in thousands)

13 unchanged sentences

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

(in thousands, except per share data)

9 unchanged sentences

Diluted EPS $ 0.48 $ 0.17 $ 1.11 $ 0.43

For the three and six months ended June 30, 2024, there were no securities excluded from the computation of diluted EPS that would have been antidilutive.

For the three and six months ended July 2, 2023, 1,476,804 and 1,322,278 respectively, of non-participating securities were excluded from the computation of diluted EPS because the effect would have been antidilutive.

For both the three and nine months ended September 29, 2024, there were no securities excluded from the computation of diluted EPS that would have been antidilutive.

For both the three and nine months ended October 1, 2023, 855,785 of non-participating securities were excluded from the computation of diluted EPS because the effect would have been antidilutive.

NOTE 5 – LONG-TERM DEBT

Long-term debt consisted of the following:

June 30, 2024 December 31, 2023

September 29, 2024 December 31, 2023

Outstanding Principal Interest Rate (1)

2 unchanged sentences

Syndicated Credit Facility (2) :

Revolving loan borrowings $ 7,334 7.96 % $ — — %

Term loan borrowings $ 41,167 5.32 % $ 121,658 6.61 %

Total borrowings under Syndicated Credit Facility 91,250 6.32 % 121,658 6.61 %

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

5 unchanged sentences

(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 September 29, 2024 or December 31, 2023.

Syndicated Credit Facility

6 unchanged sentences

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 June 30, 2024 and December 31, 2023, the Company had $ 1.6 million in letters of credit outstanding under the Facility.

As of both June 30, 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.

As of September 29, 2024 and December 31, 2023, the Company had $ 0.7 million and $ 1.6 million, respectively, in letters of credit outstanding under the Facility.

As of both September 29, 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 June 30, 2024, the estimated fair value of the Senior Notes was $ 283.2 million, compared with a net carrying value recorded in the Company’s consolidated condensed balance sheet of $ 296.9 million ($ 300.0 million gross, excluding the impact of $ 3.1 million of unamortized debt issuance costs).

As of September 29, 2024, the estimated fair value of the Senior Notes was $ 294.8 million, compared with a net carrying value recorded in the Company’s consolidated condensed balance sheet of $ 297.1 million ($ 300.0 million gross, excluding the impact of $ 2.9 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.

The Company is in compliance with all covenants under the indenture governing the Senior Notes and anticipates that it will remain in compliance with the covenants for the foreseeable future.

Debt Issuance Costs

Debt issuance costs associated with the Company’s Senior Notes and term loans under the Facility are reflected as a reduction of long-term debt in accordance with applicable accounting standards.

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 June 30, 2024 and December 31, 2023, the unamortized debt issuance costs recorded as a reduction of long-term debt were $ 3.7 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 $ 1.2 million and $ 1.4 million as of June 30, 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 – SHAREHOLDERS’ EQUITY

The following tables depict the activity in the accounts which make up shareholders’ equity for the six months ended June 30, 2024 and July 2, 2023:

The following tables depict the activity in the accounts which make up shareholders’ equity for the nine months ended September 29, 2024 and October 1, 2023:

SHARES COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED

2 unchanged sentences

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

— — — 14,179 — — 14,179

Net income — — — 14,179 — — 14,179

Issuances of stock related to restricted share units and performance shares 472 47 ( 47 ) — — — —

472 47 ( 47 ) — — — —

Cash dividends declared, $ 0.01 per common share

14 unchanged sentences

Balance, at June 30, 2024 58,303 $ 5,830 $ 254,666 $ 356,397 $ ( 132,704 ) $ ( 33,024 ) $ 451,165

Net income — — — 28,443 — — 28,443

Issuances of stock related to restricted share units

3 — — — — — —

Cash dividends declared, $ 0.01 per common share

— — — ( 582 ) — — ( 582 )

Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings ( 2 ) — 2,616 — — — 2,616

Foreign currency translation adjustment — — — — 21,131 — 21,131

Pension liability adjustment — — — — — ( 1,210 ) ( 1,210 )

Balance, at September 29, 2024 58,304 $ 5,830 $ 257,282 $ 384,258 $ ( 111,573 ) $ ( 34,234 ) $ 501,563

SHARES COMMON STOCK ADDITIONAL PAID-IN CAPITAL RETAINED

2 unchanged sentences

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

— — — ( 714 ) — — — ( 714 )

Net loss — — — ( 714 ) — — — ( 714 )

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

79 8 ( 8 ) — — — — —

Cash dividends declared, $ 0.01 per common share

1 unchanged sentence

Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings ( 132 ) ( 14 ) 1,850 — — — — 1,836

( 132 ) ( 14 ) 1,850 — — — — 1,836

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

4 unchanged sentences

Issuances of stock related to restricted share units and performance shares 5 1 ( 1 ) — — — — —

5 1 ( 1 ) — — — — —

Restricted stock issuances 102 10 697 — — — — 707

3 unchanged sentences

Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings ( 48 ) ( 5 ) 1,808 — — — — 1,803

( 48 ) ( 5 ) 1,808 — — — — 1,803

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

2 unchanged sentences

Balance, at July 2, 2023 58,112 $ 5,811 $ 247,797 $ 292,561 $ ( 132,484 ) $ ( 28,627 ) $ ( 150 ) $ 384,908

Net income — — — 9,879 — — — 9,879

Cash dividends declared, $ 0.01 per common share

— — — ( 581 ) — — — ( 581 )

Compensation expense related to share-based plans, net of forfeitures and shares received for tax withholdings ( 5 ) — 2,182 — — — — 2,182

Foreign currency translation adjustment — — — — ( 9,176 ) — — ( 9,176 )

Pension liability adjustment — — — — — 202 — 202

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

Balance, at October 1, 2023 58,107 $ 5,811 $ 249,979 $ 301,859 $ ( 141,660 ) $ ( 28,425 ) $ — $ 387,564

Stock Incentive Plan

6 unchanged sentences

Restricted Stock Awards

Compensation expense related to restricted stock grants was $ 1.4 million and $ 2.4 million for the six months ended June 30, 2024 and July 2, 2023, respectively.

Compensation expense related to restricted stock grants was $ 1.9 million and $ 3.4 million for the nine months ended September 29, 2024 and October 1, 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 June 30, 2024, as well as activity during the six months then ended:

The following table summarizes restricted stock outstanding as of September 29, 2024, as well as activity during the nine months then ended:

Restricted Shares Weighted Average

3 unchanged sentences

Forfeited or canceled ( 2,900 ) 13.19

Outstanding at June 30, 2024 244,000 $ 13.91

As of June 30, 2024, the unrecognized total compensation cost related to unvested restricted stock was $ 1.3 million.

Outstanding at September 29, 2024 242,300 $ 13.92

As of September 29, 2024, the unrecognized total compensation cost related to unvested restricted stock was $ 0.8 million.

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

Restricted Share Unit Awards

Compensation expense related to the restricted share units was $ 1.8 million and $ 1.0 million for the six months ended June 30, 2024 and July 2, 2023, respectively.

Compensation expense related to the restricted share units was $ 2.6 million and $ 1.5 million for the nine months ended September 29, 2024 and October 1, 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 June 30, 2024, as well as activity during the six months then ended:

The following table summarizes restricted share units outstanding as of September 29, 2024, as well as activity during the nine months then ended:

Restricted Share Units Weighted Average

3 unchanged sentences

Forfeited or canceled ( 10,200 ) 11.41

Outstanding at June 30, 2024 826,100 $ 11.68

As of June 30, 2024, the unrecognized total compensation cost related to unvested restricted share units was $ 7.6 million.

Outstanding at September 29, 2024 818,800 $ 11.68

As of September 29, 2024, the unrecognized total compensation cost related to unvested restricted share units was $ 6.7 million.

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

Performance Share Awards

The following table summarizes the performance shares outstanding as of June 30, 2024, as well as the activity during the six months then ended:

The following table summarizes the performance shares outstanding as of September 29, 2024, as well as the activity during the nine months then ended:

Performance Shares Weighted Average

3 unchanged sentences

Forfeited or canceled ( 23,900 ) 12.53

Outstanding at June 30, 2024 1,178,700 $ 12.23

Compensation expense related to the performance shares was $ 3.3 million and $ 1.7 million for the six months ended June 30, 2024 and July 2, 2023, respectively.

Outstanding at September 29, 2024 1,171,600 $ 12.23

Compensation expense related to the performance shares was $ 4.7 million and $ 2.4 million for the nine months ended September 29, 2024 and October 1, 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 $ 7.7 million as of June 30, 2024.

Unrecognized compensation expense related to these performance shares was approximately $ 6.3 million as of September 29, 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 $ 1.2 million for the six months ended June 30, 2024.

The tax benefit recognized with respect to restricted stock, restricted share units and performance shares was approximately $ 1.4 million for the nine months ended September 29, 2024.

NOTE 7 – LEASES

The table below represents a summary of the balances recorded in the consolidated condensed balance sheets related to the Company’s leases as of June 30, 2024 and December 31, 2023:

June 30, 2024 December 31, 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 September 29, 2024 and December 31, 2023:

September 29, 2024 December 31, 2023

Balance Sheet Location Operating Leases Finance Leases Operating Leases Finance Leases

8 unchanged sentences

Total finance lease liabilities $ 7,912 $ 7,622

As of June 30, 2024, there were no significant leases that had not commenced.

Three Months Ended Six Months Ended

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

As of September 29, 2024, there were no significant leases that had not commenced.

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

(in thousands)

7 unchanged sentences

Other Supplemental Information

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

(in thousands)

6 unchanged sentences

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 June 30, 2024 and December 31, 2023:

June 30, 2024 December 31, 2023

The table below presents the weighted average remaining lease terms and discount rates for finance and operating leases as of September 29, 2024 and December 31, 2023:

September 29, 2024 December 31, 2023

Weighted-average remaining lease term – finance leases (in years) 3.66 3.70

6 unchanged sentences

(in thousands)

2024 (excluding the six months ended June 30, 2024)

2024 (excluding the nine months ended September 29, 2024)

$ 4,423 $ 821

9 unchanged sentences

NOTE 8 – EMPLOYEE BENEFIT PLANS

During the three and six months ended June 30, 2024, the Company recorded multi-employer pension expense related to multi-employer contributions of $ 0.6 million and $ 1.3 million, respectively.

During the three and six months ended July 2, 2023, the Company recorded multi-employer pension expense related to multi-employer contributions of $ 0.7 million and $ 1.3 million, respectively.

The following tables provide the components of net periodic benefit cost for the three and six months ended June 30, 2024 and July 2, 2023:

Three Months Ended Six Months Ended

During the three and nine months ended September 29, 2024, the Company recorded multi-employer pension expense related to multi-employer contributions of $ 0.8 million and $ 2.1 million, respectively.

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.

The following tables provide the components of net periodic benefit cost for the three and nine months ended September 29, 2024 and October 1, 2023:

Three Months Ended Nine Months Ended

Defined Benefit Retirement Plans (Europe)

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

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

(in thousands)

4 unchanged sentences

Net periodic benefit cost $ 57 $ 20 $ 173 $ 64

Three Months Ended Six Months Ended

Salary Continuation Plan June 30, 2024 July 2, 2023 June 30, 2024 July 2, 2023

Three Months Ended Nine Months Ended

Salary Continuation Plan September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

(in thousands)

2 unchanged sentences

Net periodic benefit cost $ 326 $ 333 $ 978 $ 997

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

nora Defined Benefit Plan

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

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

(in thousands)

4 unchanged sentences

Net periodic benefit cost $ 394 $ 281 $ 1,170 $ 837

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 (income), net, in the consolidated condensed statements of operations.

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 9 – GOODWILL AND OTHER INTANGIBLE ASSETS

The ending balance and the change in the carrying amount of goodwill for the six months ended June 30, 2024 is as follows:

The ending balance and the change in the carrying amount of goodwill for the nine months ended September 29, 2024 is as follows:

(in thousands)

1 unchanged sentence

Foreign currency translation (2)

Balance, at June 30, 2024 $ 102,497

Balance, at September 29, 2024 $ 106,580

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

(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 $ 52.1 million and $ 56.3 million at June 30, 2024 and December 31, 2023, respectively.

The net carrying value of intangible assets other than goodwill was $ 52.8 million and $ 56.3 million at September 29, 2024 and December 31, 2023, respectively.

NOTE 10 – SEGMENT INFORMATION

9 unchanged sentences

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

Intersegment revenues for the three and six months ended June 30, 2024, were $ 24.5 million and $ 41.3 million, respectively, and intersegment revenues for the three and six months ended July 2, 2023, were $ 24.7 million and $ 47.3 million, respectively.

Intersegment revenues for the three and nine months ended September 29, 2024, were $ 19.1 million and $ 60.4 million, respectively, and intersegment revenues for the three and nine months ended October 1, 2023, were $ 25.0 million and $ 72.3 million, respectively.

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

1 unchanged sentence

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

For the three and six months ended June 30, 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.

For the three and nine months ended September 29, 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 and six months ended June 30, 2024 and July 2, 2023 is presented in the following table:

Three Months Ended Six Months Ended

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

Segment information for the three and nine months ended September 29, 2024 and October 1, 2023 is presented in the following table:

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

(in thousands)

9 unchanged sentences

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

June 30, 2024 December 31, 2023

September 29, 2024 December 31, 2023

(in thousands)

6 unchanged sentences

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023

(in thousands)

3 unchanged sentences

Interest expense 5,721 8,163 18,317 24,986

Other expense (income), net

Other expense, net

381 6,702 237 7,674

Income before income tax expense $ 36,073 $ 16,120 $ 86,218 $ 36,710

Three Months Ended June 30, 2024 Three Months Ended July 2, 2023

Three Months Ended

September 29, 2024

Three Months Ended

October 1, 2023

AMS EAAA AMS EAAA

3 unchanged sentences

Cyber Event impact — — 62 42

Property casualty loss (1)

— — ( 1,300 ) —

Restructuring, asset impairment, severance, and other, net

1 unchanged sentence

AOI $ 32,187 $ 11,299 $ 23,318 $ 9,049

(1) Represents insurance recovery of loss recognized in the first quarter of 2023.

Six Months Ended June 30, 2024 Six Months Ended July 2, 2023

Nine Months Ended

September 29, 2024

Nine Months Ended

October 1, 2023

AMS EAAA AMS EAAA

7 unchanged sentences

NOTE 11 – SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information for the six months ended June 30, 2024 and July 2, 2023 is presented in the following table:

Six Months Ended

June 30, 2024 July 2, 2023

Supplemental cash flow information for the nine months ended September 29, 2024 and October 1, 2023 is presented in the following table:

Nine Months Ended

September 29, 2024 October 1, 2023

(in thousands)

6 unchanged sentences

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 six months ended June 30, 2024, the Company recorded a total income tax provision of $ 13.4 million on pre-tax income of $ 50.1 million resulting in an effective tax rate of 26.7 %, as compared to a total income tax provision of $ 5.5 million on pre-tax income of $ 20.6 million resulting in an effective tax rate of 26.7 % during the six months ended July 2, 2023.

Although the year-over-year change in rate was flat, the effective tax rate for the period ended June 30, 2024 was favorably impacted by an increase in tax benefits related to share-based compensation and favorable changes related to the limitation on the deduction of business interest expense under Internal Revenue Code section 163(j), which were offset by a decrease in favorable tax benefits related to the repatriation of previously taxed foreign earnings realized during the six months ended July 2, 2023.

During the nine months ended September 29, 2024, the Company recorded a total income tax provision of $ 21.0 million on pre-tax income of $ 86.2 million resulting in an effective tax rate of 24.4 %, as compared to 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 % during the nine months ended October 1, 2023.

The decrease in the effective tax rate for the period ended September 29, 2024, as compared to the period ended October 1, 2023, was primarily due to the release of the valuation allowance on interest expense carryforwards, favorable changes related to the limitation on the deduction of business interest expense under Internal Revenue Code section 163(j), an increase in tax benefits related to share-based compensation, and prior period non-deductible charges related to the substantial liquidation of subsidiaries in Brazil and Russia that occurred during the nine months ended October 1, 2023.

These favorable changes were partially offset by a decrease in U.S.

tax benefits related to foreign tax credit utilization, foreign derived intangible income, and the repatriation of previously taxed foreign earnings realized during the nine months ended October 1, 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 %.

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

In the first six months of 2024, the Company increased its liability for unrecognized tax benefits by $ 0.4 million.

As of June 30, 2024, the Company had accrued approximately $ 5.3 million for unrecognized tax benefits.

In accordance with applicable accounting standards, the Company’s deferred tax asset as of June 30, 2024, reflects a reduction of $ 2.8 million of these unrecognized tax benefits.

In the first nine months of 2024, the Company increased its liability for unrecognized tax benefits by $ 0.4 million.

As of September 29, 2024, the Company had accrued approximately $ 5.3 million for unrecognized tax benefits.

In accordance with applicable accounting standards, the Company’s deferred tax asset as of September 29, 2024, reflects a reduction of $ 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.

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NOTE 13 – ITEMS RECLASSIFIED FROM ACCUMULATED OTHER COMPREHENSIVE LOSS

Amounts reclassified out of accumulated other comprehensive loss (“AOCL”), before tax, to the consolidated condensed statements of operations during the three and six months ended June 30, 2024 and July 2, 2023 are reflected in the tables below:

Amounts reclassified out of accumulated other comprehensive loss (“AOCL”), before tax, to the consolidated condensed statements of operations during the three and nine months ended September 29, 2024 and October 1, 2023 are reflected in the tables below:

Three Months Ended

Statement of Operations Location June 30, 2024 July 2, 2023

Statement of Operations Location September 29, 2024 October 1, 2023

(in thousands)

Loss on foreign subsidiary liquidation (1)

Other expense, net

$ — $ ( 6,221 )

Interest rate swap contracts loss Interest expense — ( 196 )

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

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

( 379 ) ( 198 )

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$ ( 379 ) $ ( 6,615 )

Six Months Ended

Statement of Operations Location June 30, 2024 July 2, 2023

Nine Months Ended

Statement of Operations Location September 29, 2024 October 1, 2023

(in thousands)

Loss on foreign subsidiary liquidation (1)

Other expense, net

$ — $ ( 6,221 )

Interest rate swap contracts loss Interest expense — ( 982 )

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

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

( 1,124 ) ( 585 )

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$ ( 1,124 ) $ ( 7,788 )

(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 was approximately $ 1.1 million.

NOTE 14 – ASSETS DISPOSED

During the second quarter of 2023, pursuant to a previously announced plan of reorganization, the Company completed the sale of its Thailand manufacturing facility for a selling price of $ 6.6 million and recognized a gain of $ 2.7 million.

The gain is recorded in restructuring, asset impairment, and other gains, net, in the consolidated condensed statements of operations and is attributable to the EAAA reportable segment.

The gain attributable to the EAAA reportable segment was recorded in restructuring, asset impairment, and other gains, net, in the consolidated condensed statements of operations.

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

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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