NOTE 1 – CONDENSED FOOTNOTES

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 audited consolidated financial statements and notes thereto contained in its Annual Report on Form 10-K for the fiscal year ended December 29, 2013,28, 2014, as filed with the Commission.

The financial information included in this report has been prepared by the Company, without audit. In the opinion of management, the financial information included in this report contains all adjustments (all of which are normal and recurring) necessary for a fair presentation of the results for the interim periods. Nevertheless, the results shown for interim periods are not necessarily indicative of results to be expected for the full year. The December 29, 2013,28, 2014, 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. The first quarter of 2015 was comprised of 14 weeks, while the first quarter of 2014 was comprised of 13 weeks. Each of the second quarters of 2015 and 2014 was comprised of 13 weeks.

Certain prior period amounts have been reclassified to conform to the current period presentation.

NOTE 2 – INVENTORIES

Inventories are summarized as follows:

NOTE 3 – 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 includes all unvested stock awards which contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding in our basic and diluted EPS calculations when the inclusion of these shares would be dilutive. Unvested share-based awards of restricted stock are paid dividends equally with all other shares of common stock. As a result, the Company includes all outstanding restricted stock awards in the calculation of basic and diluted EPS. Distributed earnings include common stock dividends and dividends earned on unvested share-based payment awards. Undistributed earnings represent earnings that were available for distribution but were not distributed. The following tables show distributed and undistributed earnings:

The following tables present net income that was attributable to participating securities:

The weighted average shares outstanding for basic and diluted EPS were as follows:

For all periods presented, all outstanding stockthere were no options were included inor participating securities excluded from the computation of diluted earnings per share.EPS.

NOTE 4 – LONG-TERM DEBT

7.625%7.625% Senior Notes

As of June 29, 2014, and June 30, 2013, the Company had outstanding $247.5 million and $275.0 million in 7.625% Senior Notes due 2018 (the “7.625% Senior Notes”), respectively.. These notes were redeemed in their entirety in the fourth quarter of 2014. The estimated fair value of the 7.625% Senior Notes as of June 29, 2014, and June 30, 2013, based on then current market prices, was $259.9 million and $291.5 million, respectively.million.

11.375% Senior Secured NotesSyndicated Credit Facility

As of June 30, 2013, the Company had outstanding $8.1 million in 11.375% Senior Secured Notes due 2013 (the “11.375% Senior Secured Notes”). The estimated fair value of the 11.375% Senior Secured Notes as of June 30, 2013, based on then current market prices, was $8.1 million. The Company repaid the $8.1 million balance of these notes at maturity in November 2013.

Credit Facilities

On October 22, 2013, the Company entered intohas a Syndicated Facility Agreement among the Company, certain wholly-owned foreign subsidiaries of the Company as borrowers, certain subsidiaries of the Company as guarantors, Bank of America, N.A. as Administrative Agent, The Royal Bank of Scotland, as Syndication Agent, SunTrust Bank and Regions Bank, as Co-Documentation Agents, and the other lenders party thereto. Pursuantsyndicated credit facility (the “Facility”) pursuant to the Syndicated Facility Agreement,which the lenders provide to the Company and certain of its subsidiaries a multicurrency revolving credit facility (the “Syndicated Credit Facility”)and provide to the Company a term loan. The facility matures in October of up to2019. 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 LIBOR-based loans and fees for letters of credit are charged at varying rates computed by applying a margin over the applicable LIBOR 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 July 5, 2015, the Company had $200 million at any one time. of term loan borrowing and $59.1 million of revolving loan borrowings outstanding under the Facility, and had $3.1 million in letters of credit outstanding under the Facility. As of July 5, 2015, the weighted average interest rate on borrowings outstanding under the Facility was 1.9%.

The Company is required to make amortization payments of the term loan borrowing. The amortization payments are due on the last day of the calendar quarter, commencing with an initial amortization payment of $2.5 million on December 31, 2015. The quarterly amortization payment amount increases to $3.75 million on December 31, 2016. 

The Company is currently in compliance with all covenants under the Syndicated Credit Facility and anticipates that it will remain in compliance with the covenants for the foreseeable future.

AsOther Lines of June 29, 2014, the Company had $31.5 million of borrowings outstanding under the Syndicated Credit Facility with a weighted average interest rate of approximately 4.5%, and had $3.3 million in letters of credit outstanding under the Syndicated Credit Facility. As of June 29, 2014, the Company could have incurred $165.2 million of additional borrowings under the Syndicated Credit Facility.

Other non-U.S. subsidiariesSubsidiaries of the Company have an aggregate of the equivalent of $8.4$19.0 million of other lines of credit available.available at interest rates ranging from 2% to 6%. As of June 29, 2014,July 5, 2015, there were no borrowings outstanding under these lines of credit.

NOTE 5 – STOCK-BASED COMPENSATION

Stock OptionAwards

In accordance with accounting standards, the Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. That cost will be recognized over the period in which the employee is required to provide the services – the requisite service period (usually the vesting period) – in exchange for the award. The grant date fair value for options and similar instruments will be estimated using option pricing models. Under accounting standards, the Company is required to select a valuation technique or option pricing model that meets the criteria stated in the standard. The Company uses the Black-Scholes model. Accounting standards require that the Company estimate forfeitures for stock options and reduce compensation expense accordingly. The Company has reduced its stock compensation expense by the assumed forfeiture rate and will evaluate experience against this forfeiture rate going forward.

During the first six months of 2013, the Company recognized stock option compensation expenses of $0.1 million. All outstanding stock options vested prior to 2014,the end of 2013, and therefore there have beenwas no stock option compensation expenses during 2014.expense in 2014 or 2015.

There were no stock options granted in 2014 or 2015. The following table summarizes stock options outstanding as of June 29, 2014,July 5, 2015, as well as activity during the six months then ended:

At June 29, 2014,July 5, 2015, the aggregate intrinsic value of both in-the-money options outstanding and options exercisable was $3.0$1.4 million (the intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the option).

Cash proceeds and intrinsic value related to total stock options exercised during the first six months of 20142015 and 20132014 are provided in the table below. The Company did not recognize any significant tax benefit with regard to stock options in either period presented.

Restricted Stock Awards

During the six months ended July 5, 2015, and June 29, 2014, and June 30, 2013, the Company granted restricted stock awards for 490,000597,000 and 598,000490,000 shares, respectively, of common stock. Restricted stock awards (or a portion thereof) vest with respect to each recipient over a two to five 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, awards (or a portion thereof) could vest earlier upon the attainment of certain performance criteria, in the event of a change in control of the Company, or upon involuntary termination without cause.

Compensation expense related to restricted stock grants was $2.7$9.1 million and $2.6$2.7 million for the six months ended July 5, 2015, and June 29, 2014, and June 30, 2013, respectively. Accounting standards require that the Company estimate forfeitures for restricted stock and reduce compensation expense accordingly. The Company has reduced its expense by the assumed forfeiture rate and will evaluate experience against this forfeiture rate going forward.

The following table summarizes restricted stock activity as of June 29, 2014,July 5, 2015, and during the six months then ended:

As of June 29, 2014,July 5, 2015, the unrecognized total compensation cost related to unvested restricted stock was approximately $13.9$14.3 million. That cost is expected to be recognized by the end of 2017.2019.

For the six months ended July 5, 2015, and June 29, 2014, and June 30, 2013, the Company recognized tax benefits with regard to restricted stock of $0.7$3.5 million and $1.3$0.7 million, respectively.

NOTE 7 – SEGMENT INFORMATION

Based on applicable accounting standards, the Company has determined that it has three operating segments – namely, the Americas, Europe and Asia-Pacific geographic regions. Pursuant to accounting standards, the Company has aggregated the three operating segments into one reporting segment because they have similar economic characteristics, and the operating segments are similar in all of the following areas: (a) the nature of the products and services; (b) the nature of the production processes; (c) the type or class of customer for their products and services; (d) the methods used to distribute their products or provide their services; and (e) the nature of the regulatory environment.

NOTE 8 – SUPPLEMENTAL CASH FLOW INFORMATION

Cash payments for interest amounted to $9.9$3.3 million and $11.4$9.9 million for the six months ended July 5, 2015, and June 29, 2014, and June 30, 2013, respectively. Income tax payments amounted to $4.0$3.5 million and $3.8$4.0 million for the six months ended July 5, 2015, and June 29, 2014, and June 30, 2013, respectively.

NOTE 9 – RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In May 2014,January 2015, the Financial Accounting Standards Board (“FASB”) issued an accounting standard regarding recognitionwhich eliminates the concept of revenueextraordinary items from contracts with customers. In summary, the core principle of thisgenerally accepted accounting principles. The standard isdoes not affect disclosure guidance for events or transactions that an entity recognizes revenue to depict the transfer of promised goodsare unusual in nature or services to customersinfrequent in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.their occurrence. The guidancestandard is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2016, including interim periods within that reporting period, and early application2015. The standard allows prospective or retrospective application. Early adoption is permitted if applied from the beginning of the fiscal year of adoption. We do not permitted. While the Company is currently reviewing this new standard, it is not expected thatbelieve the adoption of this guidancestandard will have a material impactany significant effect on our ongoing financial condition or results of operations.reporting.

In July 2013,February 2015, the FASB issued an accounting standard regardingwhich changes the presentation of unrecognized tax benefits when a net operating loss carryforward, orway reporting enterprises evaluate whether (a) they should consolidate limited partnerships and similar tax credit carryforward, exists. This standard clarifies that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reductionentities, (b) fees paid to a deferred tax asset fordecision maker or service provider are variable interests in a net operating loss carryforward,variable interest entity (“VIE”), and (c) variable interests in a similar tax loss, or a tax credit carryforward, if such settlement is required or expected in the event the uncertain tax benefit is disallowed. In situations where a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, is not available atVIE held by related parties of the reporting date underenterprise require the tax law ofreporting enterprise to consolidate the applicable jurisdiction orVIE. The new accounting standard is effective for annual and interim periods in fiscal years beginning after December 15, 2015. We are currently evaluating the tax law of the jurisdiction does not require, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be netted with the deferred tax asset. The Company implementedimpact, if any, this standard inwill have on our ongoing financial reporting, but we do not believe the first quarteradoption of 2014, which resulted in reductions of deferred tax asset (long-term) and long-term other liabilities of approximately $21.8 million each. Pursuant to this standard the Company also adjusted its December 29, 2013 consolidated balance sheet, resulting in decreases in its deferred tax asset (long-term) and long-term other liabilities of approximately $21.8 million each.will have any significant effect on our ongoing financial reporting.

NOTE 10 – INCOMETAXES

In the first quarter of 2013, the Company executed advance pricing agreements for tax years 2006 through 2011 with the Canada Revenue Agency and the U.S. Internal Revenue Service in relation to the U.S. bilateral advanced pricing agreement filed in 2008. As a result of executing the advance pricing agreements, the Company was able to reduce its liability for unrecognized tax benefits in the first quarter of 2013 by $1.9 million. This benefit has been included in the “Income Tax Expense (Benefit)” line of the Company’s consolidated condensed statement of operations for the six months ended June 30, 2013.

Accounting standards require that all tax positions be analyzed using a two-step approach. The first step requires an entity to determine if a tax position is more-likely-than-not to be sustained upon examination. In the second step, the tax benefit is measured as the largest amount of benefit, determined on a cumulative probability basis, that is more-likely-than-not to be realized upon ultimate settlement. In the first six months of 2014,2015, the Company decreased its liability for unrecognized tax benefits by $0.6$0.1 million. As of June 29, 2014,July 5, 2015, the Company had accrued approximately $26.8$27.2 million for unrecognized tax benefits. In accordance with applicable accounting standards, the Company��sCompany’s deferred tax asset as of June 29, 2014July 5, 2015 reflects a reduction for $21.8$21.9 million of these unrecognized tax benefits (see Note 9 for additional information).benefits.

NOTE 1211 – ITEMS RECLASSIFIED FROM OTHER COMPREHENSIVE INCOME

During the first six months of 2014,2015, the Company did not reclassify any significant amounts out of accumulated other comprehensive income. The reclassifications that occurred in that period were primarily comprised of $0.5$0.8 million related to the Company’s defined retirement benefit plan and salary continuation plan. These reclassifications were included in the selling, general and administrative expenses line item of the Company’s consolidated condensed statement of operations.

NOTE 12 – 2014 RESTRUCTURING PLAN

In the third quarter of 2014, the Company committed to a new restructuring plan in its continuing efforts to reduce costs across its worldwide operations. In connection with this restructuring plan, the Company incurred a pre-tax restructuring and asset impairment charge in the third quarter of 2014 in an amount of $12.4 million. The charge was comprised of severance expenses of $9.7 million for a reduction of 100 employees, other related exit costs of $0.1 million, and a charge for impairment of assets of $2.6 million. Approximately $10 million of the charge will result in cash expenditures, primarily severance expense.

A summary of these restructuring activities is presented below:

NOTE 13 – SUPPLEMENTAL CONDENSED CONSOLIDATING GUARANTOR FINANCIAL STATEMENTSREPURCHASE OF COMMON STOCK

The Guarantor Subsidiaries, which consistIn the fourth quarter of the Company’s principal domestic subsidiaries, are guarantors of the Company’s 7.625% Senior Notes due 2018. The Guarantor Subsidiaries are 100% owned by2014, the Company announced a program to repurchase up to 500,000 shares of common stock per fiscal year, commencing with the 2014 fiscal year. During the first quarter of 2015, the Company repurchased and these guarantees are fullretired 250,000 shares of common stock at a weighted average purchase price of $19.39 per share. During the second quarter of 2015, the Company repurchased and unconditional. The Supplemental Guarantor Financial Statements are presented herein pursuant to requirementsretired 250,000 shares of the Commission.common stock at a weighted average purchase price of $22.41 per share.