UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 25,~~June 24, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-37793

_________________________________________

Atkore Inc.

(Exact name of registrant as specified in its charter)

_________________________________________


Delaware						90-0631463
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)

16100 South Lathrop Avenue, Harvey, Illinois 60426

(Address of principal executive offices) (Zip Code)

708-339-1610

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, $.01 par value per share	ATKR	New York Stock Exchange

_____________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Securities Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

_____________________

As of ~~April~~July 28, 2022, there were ~~43,114,175~~41,320,866 shares of the registrant’s common stock, $0.01 par value per share, outstanding.

TABLE OF CONTENTS


			Page No.

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)			2
Condensed Consolidated Statements of Operations			2
Condensed Consolidated Statements of Comprehensive Income			3
Condensed Consolidated Balance Sheets			4
Condensed Consolidated Statements of Cash Flows			5
Condensed Consolidated Statement of Changes in Shareholders’ Equity			6
Notes to Condensed Consolidated Financial Statements			8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2324
Item 3. Quantitative and Qualitative Disclosures about Market Risk			3335
Item 4. Controls and Procedures			3335

PART II. OTHER INFORMATION
Item 1. Legal Proceedings			3536
Item 1A. Risk Factors			3536
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			3536
Item 3. Defaults Upon Senior Securities			3536
Item 4. Mine Safety Disclosures			3536
Item 5. Other Information			3536
Item 6. Exhibits			3637
Signatures			3738

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ATKORE INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


			Three months ended				Six months ended						Three months ended				Nine months ended
(in thousands, except per share data)	(in thousands, except per share data)	Note	March 25, 2022		March 26, 2021		March 25, 2022		March 26, 2021		(in thousands, except per share data)	Note	June 24, 2022		June 25, 2021		June 24, 2022		June 25, 2021
Net sales	Net sales		$	982,573	$	639,543	$	1,823,374	$	1,150,625	Net sales		$	1,061,590	$	853,658	$	2,884,963	$	2,004,283
Cost of sales	Cost of sales		566,157		399,694		1,052,150		721,585		Cost of sales		607,267		514,385		1,659,416		1,235,970
Gross profit	Gross profit		416,416		239,849		771,224		429,040		Gross profit		454,323		339,273		1,225,547		768,313
Selling, general and administrative	Selling, general and administrative		88,918		67,340		167,069		128,418		Selling, general and administrative		95,952		81,832		263,020		210,250
Intangible asset amortization	Intangible asset amortization	11	8,701		8,096		16,930		16,356		Intangible asset amortization	11	8,624		8,707		25,554		25,063
Operating income	Operating income		318,797		164,413		587,225		284,266		Operating income		349,747		248,734		936,973		533,000
Interest expense, net	Interest expense, net		7,514		8,416		14,432		16,670		Interest expense, net		7,243		8,090		21,676		24,760

Loss on extinguishment of debt											Loss on extinguishment of debt		—		4,202		—		4,202
Other income, net	Other income, net	5	(807)		(7,240)		(1,115)		(7,671)		Other income, net	5	150		(509)		(964)		(8,180)
Income before income taxes	Income before income taxes		312,090		163,237		573,908		275,267		Income before income taxes		342,354		236,951		916,261		512,218
Income tax expense	Income tax expense	6	78,613		38,304		135,588		65,268		Income tax expense	6	88,041		61,654		223,630		126,922
Net income	Net income		$	233,477	$	124,933	$	438,320	$	209,999	Net income		$	254,313	$	175,297	$	692,631	$	385,296

Net income per share	Net income per share										Net income per share
Basic	Basic	7	$	5.14	$	2.62	$	9.51	$	4.39	Basic	7	$	5.81	$	3.69	$	15.30	$	8.08
Diluted	Diluted	7	$	5.08	$	2.58	$	9.39	$	4.33	Diluted	7	$	5.74	$	3.64	$	15.10	$	7.95

See Notes to unaudited condensed consolidated financial statements.

ATKORE INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


			Three months ended				Six months ended						Three months ended				Nine months ended
(in thousands)	(in thousands)	Note	March 25, 2022		March 26, 2021		March 25, 2022		March 26, 2021		(in thousands)	Note	June 24, 2022		June 25, 2021		June 24, 2022		June 25, 2021
Net income	Net income		$	233,477	$	124,933	$	438,320	$	209,999	Net income		$	254,313	$	175,297	$	692,631	$	385,296
Other comprehensive (loss) income, net of tax:	Other comprehensive (loss) income, net of tax:										Other comprehensive (loss) income, net of tax:
Change in foreign currency translation adjustment	Change in foreign currency translation adjustment		(2,554)		(818)		(4,012)		6,233		Change in foreign currency translation adjustment		(6,658)		2,152		(10,669)		8,385
Change in unrecognized loss related to pension benefit plans	Change in unrecognized loss related to pension benefit plans	4	125		262		250		524		Change in unrecognized loss related to pension benefit plans	4	124		262		373		786
Total other comprehensive (loss) income	Total other comprehensive (loss) income	8	(2,429)		(556)		(3,762)		6,757		Total other comprehensive (loss) income	8	(6,534)		2,414		(10,296)		9,171
Comprehensive income	Comprehensive income		$	231,048	$	124,377	$	434,558	$	216,756	Comprehensive income		$	247,779	$	177,711	$	682,335	$	394,467

See Notes to unaudited condensed consolidated financial statements.

ATKORE INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(in thousands, except share and per share data)	(in thousands, except share and per share data)	Note	March 25, 2022		September 30, 2021		(in thousands, except share and per share data)	Note	June 24, 2022		September 30, 2021
Assets	Assets						Assets
Current Assets:	Current Assets:						Current Assets:
Cash and cash equivalents	Cash and cash equivalents		$	390,399	$	576,289	Cash and cash equivalents		$	186,650	$	576,289
Accounts receivable, less allowance for current and expected credit losses of $3,503 and $2,510, respectively			623,361		524,926
Accounts receivable, less allowance for current and expected credit losses of $4,204 and $2,510, respectively							Accounts receivable, less allowance for current and expected credit losses of $4,204 and $2,510, respectively		737,319		524,926
Inventories, net	Inventories, net	9	411,356		285,989		Inventories, net	9	444,661		285,989
Prepaid expenses and other current assets	Prepaid expenses and other current assets		64,924		34,248		Prepaid expenses and other current assets		65,076		34,248
Total current assets	Total current assets		1,490,040		1,421,452		Total current assets		1,433,706		1,421,452
Property, plant and equipment, net	Property, plant and equipment, net	10	285,936		275,622		Property, plant and equipment, net	10	343,337		275,622
Intangible assets, net	Intangible assets, net	11	242,229		241,204		Intangible assets, net	11	351,477		241,204
Goodwill	Goodwill	11	212,167		199,048		Goodwill	11	281,949		199,048
Right-of-use assets, net	Right-of-use assets, net		37,757		41,113		Right-of-use assets, net		42,124		41,113
Deferred tax assets	Deferred tax assets	6	33,970		29,693		Deferred tax assets	6	29,431		29,693
Other long-term assets	Other long-term assets		2,021		1,967		Other long-term assets		2,027		1,967
Total Assets	Total Assets		$	2,304,120	$	2,210,099	Total Assets		$	2,484,051	$	2,210,099
Liabilities and Equity	Liabilities and Equity						Liabilities and Equity
Current Liabilities:	Current Liabilities:						Current Liabilities:

Accounts payable	Accounts payable		269,830		243,164		Accounts payable		275,367		243,164
Income tax payable	Income tax payable		10,741		72,953		Income tax payable		10,176		72,953
Accrued compensation and employee benefits	Accrued compensation and employee benefits		37,061		57,437		Accrued compensation and employee benefits		48,927		57,437
Customer liabilities	Customer liabilities		66,138		80,324		Customer liabilities		95,435		80,324
Lease obligations	Lease obligations		11,327		11,785		Lease obligations		11,336		11,785
Other current liabilities	Other current liabilities		63,179		59,273		Other current liabilities		76,913		59,273
Total current liabilities	Total current liabilities		458,276		524,936		Total current liabilities		518,154		524,936
Long-term debt	Long-term debt	12	759,461		758,386		Long-term debt	12	759,999		758,386
Long-term lease obligations	Long-term lease obligations		27,392		30,236		Long-term lease obligations		31,714		30,236
Deferred tax liabilities	Deferred tax liabilities	6	18,566		16,746		Deferred tax liabilities	6	16,881		16,746

Pension liabilities	Pension liabilities		2,515		3,819		Pension liabilities		1,854		3,819
Other long-term liabilities	Other long-term liabilities		14,636		11,240		Other long-term liabilities		15,440		11,240
Total Liabilities	Total Liabilities		1,280,846		1,345,363		Total Liabilities		1,344,042		1,345,363
Equity:	Equity:						Equity:
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 43,879,446 and 45,997,159 shares issued and outstanding, respectively			440		461
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 42,530,966 and 45,997,159 shares issued and outstanding, respectively							Common stock, $0.01 par value, 1,000,000,000 shares authorized, 42,530,966 and 45,997,159 shares issued and outstanding, respectively		426		461
Treasury stock, held at cost, 290,600 and 290,600 shares, respectively	Treasury stock, held at cost, 290,600 and 290,600 shares, respectively		(2,580)		(2,580)		Treasury stock, held at cost, 290,600 and 290,600 shares, respectively		(2,580)		(2,580)
Additional paid-in capital	Additional paid-in capital		492,070		506,921		Additional paid-in capital		496,785		506,921
Retained earnings	Retained earnings		565,832		388,660		Retained earnings		684,400		388,660
Accumulated other comprehensive loss	Accumulated other comprehensive loss	8	(32,488)		(28,726)		Accumulated other comprehensive loss	8	(39,022)		(28,726)
Total Equity	Total Equity		1,023,274		864,736		Total Equity		1,140,009		864,736
Total Liabilities and Equity	Total Liabilities and Equity		$	2,304,120	$	2,210,099	Total Liabilities and Equity		$	2,484,051	$	2,210,099

See Notes to unaudited condensed consolidated financial statements.

ATKORE INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Six months ended
(in thousands) Note March 25, 2022 March 26, 2021
Operating activities:
Net income $ 438,320 $ 209,999
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 40,040 38,309
Deferred income taxes 6 (4,270) 4,692
Stock-based compensation 9,555 10,390
Amortization of right-of-use assets 6,489 7,025
Other non-cash adjustments to net income 7,474 968
Changes in operating assets and liabilities, net of effects from acquisitions
Accounts receivable (95,016) (124,261)
Inventories (127,790) (31,424)
Prepaid expenses and other current assets (14,490) 234
Accounts payable 19,617 42,130
Accrued and other liabilities (37,972) (2,502)
Income taxes (80,415) 429
Other, net (383) (2,743)
Net cash provided by operating activities 161,159 153,246
Investing activities:
Capital expenditures (25,343) (20,374)
Proceeds from sale of properties and equipment 642 3,117
Acquisition of businesses, net of cash acquired (36,098) (43,699)
Other, net — 21
Net cash used in investing activities (60,799) (60,935)
Financing activities:
Repayments of long-term debt 12 — (40,000)
Issuance of common stock, net of shares withheld for tax (24,399) (356)
Repurchase of common stock (261,173) (35,037)
Other, net — (11)
Net cash used for financing activities (285,572) (75,404)
Effects of foreign exchange rate changes on cash and cash equivalents (678) 3,091
Decrease in cash and cash equivalents (185,890) 19,998
Cash and cash equivalents at beginning of period 576,289 284,471
Cash and cash equivalents at end of period $ 390,399 $ 304,469
Supplementary Cash Flow information
Capital expenditures, not yet paid $ 4,815 $ 1,023
Operating lease right-of-use assets obtained in exchange for lease liabilities $ 1,148 $ 2,379
Acquisitions of businesses, not yet paid $ 2,864 $ —


		Nine months ended
(in thousands)	Note	June 24, 2022		June 25, 2021
Operating activities:
Net income		$	692,631	$	385,296
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		60,467		58,475
Deferred income taxes	6	(12,649)		17,939
Stock-based compensation		14,180		14,158
Amortization of right-of-use assets		9,868		10,545

Loss on extinguishment of debt		—		4,202
Other non-cash adjustments to net income		13,268		(964)
Changes in operating assets and liabilities, net of effects from acquisitions
Accounts receivable		(189,306)		(217,583)
Inventories		(152,705)		(32,556)
Prepaid expenses and other current assets		(17,236)		(7,081)
Accounts payable		15,598		69,353
Accrued and other liabilities		13,063		35,665
Income taxes		(76,996)		(15,023)
Other, net		1,592		(3,805)
Net cash provided by operating activities		371,776		318,621
Investing activities:
Capital expenditures		(81,990)		(34,242)

Proceeds from sale of properties and equipment		658		3,117
Acquisition of businesses, net of cash acquired		(255,361)		(43,195)
Other, net		—		17
Net cash used in investing activities		(336,693)		(74,303)
Financing activities:

Repayments of long-term debt	12	—		(812,120)

Proceeds from issuance of long-term debt	12	—		798,000
Payment for debt financing costs and fees		—		(11,294)
Issuance of common stock, net of shares withheld for tax		(24,312)		65
Repurchase of common stock		(396,929)		(110,063)

Net cash used for financing activities		(421,241)		(135,412)
Effects of foreign exchange rate changes on cash and cash equivalents		(3,481)		3,765
(Decrease) Increase in cash and cash equivalents		(389,639)		112,671
Cash and cash equivalents at beginning of period		576,289		284,471
Cash and cash equivalents at end of period		$	186,650	$	397,142
Supplementary Cash Flow information
Capital expenditures, not yet paid		$	5,212	$	457
Operating lease right-of-use assets obtained in exchange for lease liabilities		$	2,919	$	2,630
Acquisitions of businesses, not yet paid		3,266		$	—

See Notes to unaudited condensed consolidated financial statements.

ATKORE INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)


		Common Stock			Treasury Stock		Additional Paid-in Capital				Retained Earnings				Accumulated Other Comprehensive Loss				Total Equity				Common Stock						Treasury Stock				Additional Paid-in Capital				Retained Earnings				Accumulated Other Comprehensive Loss				Total Equity
(in thousands)	(in thousands)	Shares	Amount		Amount								(in thousands)	Shares								Amount			Amount
Balance as of September 30, 2021	Balance as of September 30, 2021	45,997	$	461	$	(2,580)			$	506,921							$	388,660			$	(28,726)		$	864,736	Balance as of September 30, 2021		45,997			$	461			$	(2,580)			$	506,921			$	388,660			$	(28,726)	$	864,736
Net income	Net income	—	—		—		—				204,843				—				204,843			Net income	—			—			—					—				204,843				—				204,843
Other comprehensive loss	Other comprehensive loss	—	—		—		—				—				(1,333)				(1,333)			Other comprehensive loss	—			—			—				—				—				(1,333)				(1,333)

Stock-based compensation	Stock-based compensation	—	—		—		3,427				—				—				3,427			Stock-based compensation	—			—			—				3,427				—				—				3,427
Issuance of common stock, net of shares withheld for tax	Issuance of common stock, net of shares withheld for tax	355	4		—		(24,509)				—				—				(24,505)			Issuance of common stock, net of shares withheld for tax	355			4			—				(24,509)				—				—				(24,505)
Repurchase of common stock	Repurchase of common stock	(958)	(10)		—						(104,537)				—				(104,547)			Repurchase of common stock	(958)			(10)			—								(104,537)				—				(104,547)
Balance as of December 24, 2021	Balance as of December 24, 2021	45,394	$	455	$	(2,580)	$	485,839			$	488,966			$	(30,059)			$	942,621		Balance as of December 24, 2021	45,394			$	455		$	(2,580)			$	485,839			$	488,966			$	(30,059)			$	942,621

Net income	Net income	—	—		—		—				233,477				—				233,477			Net income	—			—			—				—				233,477				—				233,477
Other comprehensive (loss)		—	—		—		—				—				(2,429)				(2,429)
Other comprehensive loss																						Other comprehensive loss	—			—			—				—				—				(2,429)				(2,429)
Stock-based compensation	Stock-based compensation	—	—		—		6,128				—				—				6,128			Stock-based compensation	—			—			—				6,128				—				—				6,128
Issuance of common stock, net of shares withheld for tax	Issuance of common stock, net of shares withheld for tax	24	—		—		103				—				—				103			Issuance of common stock, net of shares withheld for tax	24			—			—				103				—				—				103
Repurchase of common stock	Repurchase of common stock	(1,539)	(15)		—		—				(156,611)				—				(156,626)			Repurchase of common stock	(1,539)			(15)			—				—				(156,611)				—				(156,626)
Balance as of March 25, 2022	Balance as of March 25, 2022	43,879	$	440	$	(2,580)	$	492,070			$	565,832			$	(32,488)			$	1,023,274		Balance as of March 25, 2022	43,879			$	440		$	(2,580)			$	492,070			$	565,832			$	(32,488)			$	1,023,274

Net income																						Net income	—			—			—				—				254,313				—				254,313
Other comprehensive loss																						Other comprehensive loss	—			—			—				—				—				(6,534)				(6,534)
Stock-based compensation																						Stock-based compensation	—			—			—				4,625				—				—				4,625
Issuance of common stock, net of shares withheld for tax																						Issuance of common stock, net of shares withheld for tax	25			—			—				90								—				90
Repurchase of common stock																						Repurchase of common stock	(1,374)			(14)			—				—				(135,745)				—				(135,759)
Balance as of June 24, 2022																						Balance as of June 24, 2022	42,530			$	426		$	(2,580)			$	496,785			$	684,400			$	(39,022)			$	1,140,009


		Common Stock			Treasury Stock		Additional Paid-in Capital				Retained Earnings				Accumulated Other Comprehensive Loss				Total Equity				Common Stock						Treasury Stock				Additional Paid-in Capital				Retained Earnings				Accumulated Other Comprehensive Loss				Total Equity
(in thousands)	(in thousands)	Shares	Amount		Amount								(in thousands)	Shares								Amount			Amount
Balance as of September 30, 2020	Balance as of September 30, 2020	47,407	$	475	$	(2,580)			$	487,223							$	(64,154)			$	(42,554)		$	378,410	Balance as of September 30, 2020		47,407			$	475			$	(2,580)			$	487,223			$	(64,154)			$	(42,554)	$	378,410
Net income	Net income	—	—		—		—				85,066				—				85,066			Net income	—			—			—					—				85,066				—				85,066
Other comprehensive income	Other comprehensive income	—	—		—		—				—				7,313				7,313			Other comprehensive income	—			—			—				—				—				7,313				7,313

Stock-based compensation	Stock-based compensation	—	—		—		5,522				—				—				5,522			Stock-based compensation	—			—			—				5,522				—				—				5,522
Issuance of common stock, net of shares withheld for tax	Issuance of common stock, net of shares withheld for tax	358	3		—		(3,930)				—				—				(3,927)			Issuance of common stock, net of shares withheld for tax	358			3			—				(3,930)				—				—				(3,927)
Repurchase of common stock	Repurchase of common stock	(1,140)	(11)		—		—				(35,026)				—				(35,037)			Repurchase of common stock	(1,140)			(11)			—				—				(35,026)				—				(35,037)
Balance as of December 25, 2020	Balance as of December 25, 2020	46,625	$	467	$	(2,580)	$	488,815			$	(14,114)			$	(35,241)			$	437,347		Balance as of December 25, 2020	46,625			$	467		$	(2,580)			$	488,815			$	(14,114)			$	(35,241)			$	437,347

Net income	Net income	—	—		—		—				124,933				—				124,933			Net income	—			—			—				—				124,933				—				124,933
Other comprehensive (loss)	Other comprehensive (loss)	—	—		—		—				—				(556)				(556)			Other comprehensive (loss)	—			—			—				—				—				(556)				(556)
Stock-based compensation	Stock-based compensation	—	—		—		4,868				—				—				4,868			Stock-based compensation	—			—			—				4,868				—				—				4,868
Issuance of common stock, net of shares withheld for tax	Issuance of common stock, net of shares withheld for tax	358	4		—		3,566				—				—				3,570			Issuance of common stock, net of shares withheld for tax	358			4			—				3,566				—				—				3,570

Balance as of March 26, 2021	Balance as of March 26, 2021	46,983	$	471	$	(2,580)	$	497,249			$	110,819			$	(35,797)			$	570,162		Balance as of March 26, 2021	46,983			$	471		$	(2,580)			$	497,249			$	110,819			$	(35,797)			$	570,162

Net income																						Net income	—			—			—				—				175,297				—				175,297
Other comprehensive income																						Other comprehensive income	—			—			—				—				—				2,414				2,414
Stock-based compensation																						Stock-based compensation	—			—			—				3,768				—				—				3,768
Issuance of common stock																						Issuance of common stock	38			3			—				421				—				—				424
Repurchase of common stock																						Repurchase of common stock	(918)			(11)			—				—				(75,017)				—				(75,028)
Balance as of June 25, 2021																						Balance as of June 25, 2021	46,103			463			(2,580)				501,438				211,099				(33,383)				677,037

See Notes to unaudited condensed consolidated financial statements.

ATKORE INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

(dollars and shares in thousands, except per share data)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Organization and Ownership Structure — Atkore Inc. (the “Company”, “Atkore” or “AI”) is a leading manufacturer of Electrical products primarily for the non-residential construction and renovation markets and Safety & Infrastructure solutions for the construction and industrial markets. Atkore was incorporated in the State of Delaware on November 4, 2010 under the name Atkore International Group, Inc. Atkore is the sole stockholder of Atkore International Holdings Inc. (“AIH”), which in turn is the sole stockholder of Atkore International Inc. (“AII”).

The Electrical segment manufactures high quality products used in the construction of electrical power systems including conduit, cable, and installation accessories. This segment serves contractors, in partnership with the electrical wholesale channel.

The Safety & Infrastructure segment designs and manufactures solutions including metal framing, mechanical pipe, perimeter security, and cable management for the protection and reliability of critical infrastructure. These solutions are marketed to contractors, original equipment manufacturers and end users.

Basis of Presentation — The accompanying unaudited condensed consolidated financial statements of the Company included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These unaudited condensed consolidated financial statements have been prepared in accordance with the Company’s accounting policies and on the same basis as those financial statements included in the Company’s latest Annual Report on Form 10-K for the year ended September 30, 2021, filed with the U.S. Securities and Exchange Commission (the “SEC”) on November 18, 2021, and should be read in conjunction with those consolidated financial statements and the notes thereto. Certain information and disclosures normally included in the Company’s annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC.

The unaudited condensed consolidated financial statements include the assets and liabilities used in operating the Company’s business. All intercompany balances and transactions have been eliminated in consolidation. The results of companies acquired or disposed of are included in the unaudited condensed consolidated financial statements from the effective date of acquisition or up to the date of disposal.

These statements include all adjustments (consisting of normal recurring adjustments) that the Company considered necessary to present a fair statement of its results of operations, financial position and cash flows. The results reported in these unaudited condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year.

Fiscal Periods — The Company has a fiscal year that ends on September 30. The Company’s fiscal quarters typically end on the last Friday in December, March and June as it follows a 4-5-4 calendar.

Use of Estimates — The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclose contingent assets and liabilities at the date of the condensed consolidated financial statements and report the associated amounts of revenues and expenses. Actual results could differ materially from these estimates.

Recent Accounting Pronouncements

A summary of recently adopted accounting guidance is as follows. Adoption dates are on the first day of the fiscal year indicated below, unless otherwise specified.

ASU

Description of ASU

Impact to Atkore

Adoption Date

2019-12 Simplifying the accounting for income taxes (Topic 740)

The ASU eliminates certain existing exceptions related to the general approach in ASC 740 relating to franchise taxes, reducing complexity in the interim period accounting for year to date loss limitations and changes in tax laws and clarifying the accounting for transactions outside of a business combination that result in a step up in the tax basis of goodwill.

The Company adopted this standard in the first quarter of 2022. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements.

2022

2. REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company’s revenue arrangements primarily consist of a single performance obligation to transfer promised goods which is satisfied at a point in time when title, risks and rewards of ownership, and subsequently control have transferred to the customer. This generally occurs when the product is shipped to the customer, with an immaterial amount of transactions in which control transfers upon delivery. The Company primarily offers assurance-type standard warranties that do not represent separate performance obligations.

The Company has certain arrangements that require it to estimate at the time of sale the amounts of variable consideration that should not be recorded as revenue as certain amounts are not expected to be collected from customers, as well as an estimate of the value of products to be returned. The Company principally relies on historical experience, specific customer agreements, and anticipated future trends to estimate these amounts at the time of sale and to reduce the transaction price. These arrangements include sales discounts and allowances, volume rebates, and returned goods.

The Company records amounts billed to customers for reimbursement of shipping and handling costs within revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of goods sold. Sales taxes and other usage-based taxes are excluded from revenue. The Company does not evaluate whether the selling price includes a financing interest component for contracts that are less than a year. The Company also expenses costs incurred to obtain a contract, primarily sales commissions, as all obligations will be settled in less than one year.

The Company typically receives payment 30 to 60 days from the point it has satisfied the related performance obligation. See Note 16, “Segment Information” for revenue disaggregated by geography and product categories.

3. ACQUISITIONS

From time to time, the Company enters into strategic acquisitions in an effort to better service existing customers and to obtain new customers.

Fiscal 2022

On June 22, 2022, Atkore International Inc., a wholly-owned subsidiary of the Company acquired all of the outstanding stock of United Poly Systems, LLC (“United Poly”), for a purchase price of $226,506. United Poly is a manufacturer of high density polyethylene (“HDPE”) pressure pipe and conduit, primarily serving the telecommunications, water infrastructure, renewables and energy markets. The purchase price allocation has not been finalized as the Company is finalizing working capital, inventory, intangible asset, deferred tax asset and liabilities and fixed asset fair values.

On May 19, 2022, Allied Tube and Conduit Corporation, wholly-owned subsidiary of the Company acquired the assets of Talon Products, LLC (“Talon”), for a purchase price of $4,193. Talon is a manufacturer of non-metallic, injection molded cable cleats, primarily serving the power distribution markets. The purchase price allocation has not been finalized as the Company is finalizing working capital and intangible asset fair values.

On December 21, 2021, Atkore HDPE, LLC and Allied Tube and Conduit Corporation, wholly-owned subsidiaries of the Company, acquired the assets of Four Star Industries LLC (“Four Star”), for a purchase price of $23,195. Four Star is a manufacturer of high density polyethylene (HDPE) conduit, primarily serving the telecommunications, utility, infrastructure and datacom markets. ~~As a result of~~The Company finalized the ~~acquisition, the Company preliminarily recognized $7,348 of goodwill, $11,840 of identifiable intangible assets and $4,007 of working capital and other net tangible assets. As of March 25, 2022, the~~ purchase

price allocation ~~has not been finalized as~~of Four Star in the ~~Company is finalizing working capital, intangible asset and fixed asset fair values.~~third quarter of fiscal 2022.

On December 20, 2021, Columbia-MBF Inc., a wholly-owned subsidiary of the Company acquired all of the outstanding stock of Sasco Tubes & Roll Forming Inc. (“Sasco”), for a purchase price of ~~$15,767,~~$16,184, of which ~~$12,903~~$13,320 was paid at closing and additional purchase price payable of $2,864 was accrued. Sasco is a Canadian manufacturer of metal framing and related products serving the electrical, mechanical, construction and solar industries. ~~As a result of the acquisition, the~~The Company ~~preliminarily recognized $6,398 of goodwill, $6,710 of identifiable intangible assets and $2,659 of working capital and other net tangible assets. As of March 25, 2022,~~finalized the purchase price allocation ~~has~~of Sasco in the third quarter of fiscal 2022.

The acquisitions in fiscal 2022 were funded using cash-on-hand. The Company incurred approximately $3,274 in acquisition-related expenses for these acquisitions, which were recorded as a component of selling, general and administrative expenses.

The purchase price was allocated to tangible and intangible assets acquired and liabilities assumed, based on their fair values. The following table summarizes the Level 3 fair values assigned to the net assets acquired and liabilities assumed as of the acquisition date for fiscal 2022:


(in thousands)	United Poly		Other		Total
Fair value of consideration transferred:
Cash consideration	$	226,506	$	40,306	$	266,812
Purchase price payable	—		3,266		3,266

Total consideration transferred	$	226,506	$	43,572	$	270,078
Fair value of assets acquired and liabilities assumed:
Cash	11,451		—		11,451
Accounts receivable	23,679		5,684		29,363
Inventories	13,266		4,821		18,087
Intangible assets	118,670		19,640		138,310
Fixed assets	14,091		2,784		16,875
Accounts payable	(11,940)		(3,995)		(15,935)
Income taxes	(12,189)		(2,075)		(14,264)
Other	(103)		(129)		(232)
Net assets acquired	156,925		26,730		183,655
Excess purchase price attributed to goodwill acquired	$	69,581	$	16,842	$	86,423

The Company estimates $11.7 million of the goodwill recognized on the United Poly acquisition is deductible for tax purposes. Goodwill recognized from the acquisitions in fiscal 2022 consists largely of the synergies and economies of scale from integrating this company with existing businesses.

The following table summarizes the fair value of intangible assets as of the acquisition date:


	United Poly			Other
(in thousands)	Fair Value		Weighted Average Useful Life (Years)	Fair Value		Weighted Average Useful Life (Years)
Customer relationships	$	96,100	11	$	16,720	10
Other	22,570		8	2,920		8
Total intangible assets	$	118,670		$	19,640

The following table presents unaudited pro forma results of operations for the Company and all companies acquired in fiscal 2022 as if those acquisitions had occurred on October 1, 2020. The results presented below are for the three and nine months ended:


	Three months ended				Nine months ended
(in thousands)	June 24, 2022		June 25, 2021		June 24, 2022		June 25, 2021
Pro forma net sales	$	1,096,866	$	883,980	$	2,992,265	$	2,068,169
Pro forma net income	256,356		175,107		696,012		378,795

The pro forma condensed financial information is presented for illustrative purposes only and does not indicate the actual financial results of the Company if the closing of the acquisitions in the current year had been ~~finalized~~completed on October 1, 2020, nor is it indicative of the results of operations in future periods. Included in the unaudited pro forma financial information for the three and nine months ended June 24, 2022 and June 25, 2021 were pro forma adjustments to reflect the results of operations of the acquisitions in the current year as though those acquisitions were completed as of the beginning of October 1, 2020, as well as the ~~Company is finalizing working capital,~~impact of amortizing certain acquisition accounting adjustments such as amortizable intangible ~~asset~~assets. The pro forma financial information neither indicates the impact of possible business model changes nor considers any potential impact of current market conditions, expense efficiencies or other factors.

Net sales and ~~fixed asset fair values.~~net income of the acquired companies are included in the consolidated statement of operations for the quarter and nine months ended June 24, 2022 for the post-acquisition period.

Fiscal 2021

On February 24, 2021, Atkore Southwest, LLC, a wholly-owned subsidiary of the Company acquired the assets of FRE Composites USA Inc. and separately the Company acquired all of the outstanding stock of FRE Composites Inc., collectively described as FRE Composites Group (“FRE Composites”), for a purchase price of $36,993, net of cash received. FRE Composites is a leading manufacturer of fiberglass conduit for the electrical and industrial market. The purchase price was allocated to tangible and intangible assets acquired and liabilities assumed, based on their fair values.

On October 22, 2020, Atkore Plastics Southeast, LLC, a wholly-owned subsidiary of the Company acquired the assets of Queen City Plastics, Inc. (“Queen City Plastics”), a leading manufacturer of PVC conduit, elbows and fittings for the electrical market. The purchase price was allocated to tangible assets acquired and liabilities assumed based on their fair values. The purchase price of $6,214 was deemed immaterial to the Company.

The ~~following section provides purchase price allocation disclosures and other financial disclosures for significant acquisitions for the applicable fiscal years.~~

~~The~~ purchase price for FRE Composites, which was finalized during the fourth quarter of fiscal 2021, was allocated to tangible and intangible assets acquired and liabilities assumed, based on their fair values.

The acquisitions in fiscal 2021 were funded using cash-on-hand. The Company incurred approximately $646 in acquisition-related expenses for these acquisitions, which were recorded as a component of selling, general and administrative expenses.

The following table summarizes the Level 3 fair values assigned to the net assets acquired and liabilities assumed as of the acquisition date for fiscal 2021:


(in thousands)	FRE Composites
Fair value of consideration transferred:
Cash consideration	$	36,993




Fair value of assets acquired and liabilities assumed:
Cash	437
Accounts receivable	2,163
Inventories	3,355
Intangible assets	18,300
Fixed assets	8,509
Accounts payable	(1,186)

Income taxes	(4,293)
Other	(240)
Net assets acquired	27,045
Excess purchase price attributed to goodwill acquired	$	9,948

The Company estimates $1.6 million of the goodwill recognized on the FRE acquisition is deductible for tax purposes. Goodwill recognized from the acquisitions in fiscal 2021 ~~and fiscal 2022~~ consists largely of the synergies and economies of scale from integrating this company with existing businesses.

The following table summarizes the fair value of intangible assets as of the acquisition date:


	FRE Composites
(in thousands)	Fair Value		Weighted Average Useful Life (Years)
Customer relationships	$	14,700	12
Other	3,600		6
Total intangible assets	$	18,300

Net sales and net income of both the above acquisitions are included in the condensed consolidated statement of operations for the post-acquisition periods. Due to the immaterial nature of these acquisitions, both individually and in the aggregate, the Company did not include the full year pro forma results of operations for the acquisition year or previous years.

4. POSTRETIREMENT BENEFITS

The Company provides pension benefits through a number of noncontributory and contributory defined benefit retirement plans covering eligible U.S. employees. As of September 30, 2017, all defined pension benefit plans were frozen, whereby participants no longer accrue credited service. The net periodic benefit credit was as follows:


			Three months ended				Six months ended						Three months ended				Nine months ended
(in thousands)	(in thousands)	Note	March 25, 2022		March 26, 2021		March 25, 2022		March 26, 2021		(in thousands)	Note	June 24, 2022		June 25, 2021		June 24, 2022		June 25, 2021
Interest cost	Interest cost		$	739	$	682	$	1,478	$	1,364	Interest cost		$	739	$	682	$	2,218	$	2,047
Expected return on plan assets	Expected return on plan assets		(1,348)		(1,606)		(2,696)		(3,212)		Expected return on plan assets		(1,348)		(1,606)		(4,044)		(4,818)
Amortization of actuarial loss	Amortization of actuarial loss		158		333		316		666		Amortization of actuarial loss		158		332		473		995
Net periodic benefit credit	Net periodic benefit credit	5	$	(451)	$	(591)	$	(902)	$	(1,182)	Net periodic benefit credit	5	$	(451)	$	(592)	$	(1,353)	$	(1,776)

5. OTHER INCOME, NET

Other income, net consisted of the following:


		Three months ended				Six months ended					Three months ended				Nine months ended
(in thousands)	(in thousands)	March 25, 2022		March 26, 2021		March 25, 2022		March 26, 2021		(in thousands)	June 24, 2022		June 25, 2021		June 24, 2022		June 25, 2021
Business interruption insurance recovery	Business interruption insurance recovery	$	—	$	(6,000)	$	—	$	(6,000)	Business interruption insurance recovery	$	—	$	—	$	—	$	(6,000)
Undesignated foreign currency derivative instruments	Undesignated foreign currency derivative instruments	(634)		793		(810)		3,410		Undesignated foreign currency derivative instruments	(2,662)		377		(3,472)		3,786
Foreign exchange loss (gain) on intercompany loans	Foreign exchange loss (gain) on intercompany loans	278		(711)		597		(3,168)		Foreign exchange loss (gain) on intercompany loans	3,263		(294)		3,860		(3,459)

Pension-related benefits	Pension-related benefits	(451)		(591)		(902)		(1,182)		Pension-related benefits	(451)		(592)		(1,352)		(1,776)
Gain on purchase of business	Gain on purchase of business	—		(731)		—		(731)		Gain on purchase of business	—		—		—		(731)

Other income, net	Other income, net	$	(807)	$	(7,240)	$	(1,115)	$	(7,671)	Other income, net	$	150	$	(509)	$	(964)	$	(8,180)

6. INCOME TAXES

For the three months ended ~~March 25,~~June 24, 2022 and ~~March 26,~~June 25, 2021, the Company’s effective tax rate attributable to income before income taxes was ~~25.2%~~25.7% and ~~23.5%~~26.0%, respectively. For the three months ended ~~March 25,~~June 24, 2022 and ~~March 26,~~June 25, 2021, the Company’s income tax expense was ~~$78,613~~$88,041 and ~~$38,304~~$61,654 respectively. The ~~increase~~decrease in the current period effective tax rate was primarily driven by ~~a decrease in~~ the ~~excess~~prior year one-time tax ~~benefit associated with stock compensation.~~expense from the deferred remeasurement of our UK subsidiaries due to the enactment of the Finance Act of 2021 which, among other things, changed the UK corporate tax rate from 19% to 25%.

For the ~~six~~nine months ended ~~March 25,~~June 24, 2022 and ~~March 26,~~June 25, 2021, the Company’s effective tax rate attributable to income before income taxes was ~~23.6%~~24.4% and ~~23.7%~~24.8%, respectively. For the ~~six~~nine months ended ~~March 25,~~June 24, 2022 and ~~March 26,~~June 25, 2021, the Company’s income tax expense was ~~$135,588~~$223,630 and ~~$65,268~~$126,922 respectively. The decrease in the current period effective tax rate was driven by an increase in the excess tax benefit associated with stock ~~compensation partially offset by the increase in non-deductible executive~~ compensation.

A valuation allowance has been recorded against certain net operating losses in certain foreign jurisdictions. A valuation allowance is recorded when it is determined to be more likely than not that these assets will not be fully realized in the foreseeable future. The realization of deferred tax assets is dependent upon whether the Company can generate future taxable income in the appropriate character and jurisdiction to utilize the assets. The amount of the deferred tax assets considered realizable is subject to adjustment in future periods.

The Company recognizes the benefits of uncertain tax positions taken or expected to be taken in tax returns in the provision for income taxes only for those positions that we have determined are more likely than not to be realized upon examination. We record interest and penalties related to unrecognized tax benefits as a component of income tax expense. During the ~~six~~nine months ended ~~March 25,~~June 24, 2022, the balance of unrecognized tax benefits decreased by ~~$2,179~~$1,893 primarily due to the resolution of a state tax matter.

For the ~~six~~nine months ended ~~March 25,~~June 24, 2022, the Company made no additional provision for U.S. or non-U.S. income taxes for unrecognized deferred tax liabilities for temporary differences related to basis differences in investments in subsidiaries, as the investments are essentially permanent in duration.

7. EARNINGS PER SHARE

The Company calculates basic and diluted earnings per common share using the two-class method. Under the two-class method, net earnings are allocated to each class of common stock and participating securities as if all of the net earnings for the period had been distributed. The Company’s participating securities consist of share-based payment awards that contain a non-forfeitable right to

receive dividends and therefore are considered to participate in undistributed earnings with common stockholders.

Basic earnings per common share excludes dilution and is calculated by dividing the net earnings allocated to common stock by the weighted-average number of common stock outstanding for the period. Diluted earnings per common share is calculated by dividing net earnings allocated to common stock by the weighted-average number of shares outstanding for the period, as adjusted for the potential dilutive effect of non-participating share-based awards.

The following table sets forth the computation of basic and diluted earnings per share:


		Three months ended				Six months ended					Three months ended				Nine months ended
(in thousands, except per share data)	(in thousands, except per share data)	March 25, 2022		March 26, 2021		March 25, 2022		March 26, 2021		(in thousands, except per share data)	June 24, 2022		June 25, 2021		June 24, 2022		June 25, 2021
Numerator:	Numerator:									Numerator:
Net income	Net income	$	233,477	$	124,933	$	438,320	$	209,999	Net income	$	254,313	$	175,297	$	692,631	$	385,296
Less: Undistributed earnings allocated to participating securities	Less: Undistributed earnings allocated to participating securities	3,577		2,435		7,256		4,091		Less: Undistributed earnings allocated to participating securities	3,883		3,389		11,002		7,483
Net income available to common shareholders	Net income available to common shareholders	$	229,900	$	122,498	$	431,064	$	205,908	Net income available to common shareholders	$	250,430	$	171,908	$	681,629	$	377,813

Denominator:	Denominator:									Denominator:
Basic weighted average common shares outstanding	Basic weighted average common shares outstanding	44,700		46,803		45,318		46,858		Basic weighted average common shares outstanding	43,072		46,602		44,553		46,771
Effect of dilutive securities: Non-participating employee stock options (1)	Effect of dilutive securities: Non-participating employee stock options (1)	580		744		588		728		Effect of dilutive securities: Non-participating employee stock options (1)	558		684		578		742
Diluted weighted average common shares outstanding	Diluted weighted average common shares outstanding	45,280		47,547		45,906		47,586		Diluted weighted average common shares outstanding	43,630		47,286		45,131		47,513
Basic earnings per share	Basic earnings per share	$	5.14	$	2.62	$	9.51	$	4.39	Basic earnings per share	$	5.81	$	3.69	$	15.30	$	8.08
Diluted earnings per share	Diluted earnings per share	$	5.08	$	2.58	$	9.39	$	4.33	Diluted earnings per share	$	5.74	$	3.64	$	15.10	$	7.95

(1) Stock options to purchase shares of common stock that would have been anti-dilutive are not included in the calculation. There were no anti-dilutive options outstanding during the three months ended March 25, 2022 and March 26, 2021. Additionally, there were no anti-dilutive options outstanding during the six months ended March 25, 2022 and March 26, 2021.
(1) Stock options to purchase shares of common stock that would have been anti-dilutive are not included in the calculation. There were no anti-dilutive options outstanding during the three months ended June 24, 2022 and June 25, 2021. Additionally, there were no anti-dilutive options outstanding during the nine months ended June 24, 2022 and June 25, 2021.										(1) Stock options to purchase shares of common stock that would have been anti-dilutive are not included in the calculation. There were no anti-dilutive options outstanding during the three months ended June 24, 2022 and June 25, 2021. Additionally, there were no anti-dilutive options outstanding during the nine months ended June 24, 2022 and June 25, 2021.

8. ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table presents the changes in accumulated other comprehensive loss by component for the three months ended ~~March 25,~~June 24, 2022 and ~~March 26,~~June 25, 2021.


(in thousands)	(in thousands)	Defined Benefit Pension Items		Currency Translation Adjustments		Total		(in thousands)	Defined Benefit Pension Items		Currency Translation Adjustments		Total
Balance as of December 24, 2021		$	(19,193)	$	(10,866)	$	(30,059)
Balance as of March 25, 2022								Balance as of March 25, 2022	$	(19,068)	$	(13,420)	$	(32,488)
Other comprehensive loss before reclassifications	Other comprehensive loss before reclassifications	—		(2,554)		(2,554)		Other comprehensive loss before reclassifications	—		(6,657)		(6,657)
Amounts reclassified from accumulated other comprehensive income, net of tax	Amounts reclassified from accumulated other comprehensive income, net of tax	125		—		125		Amounts reclassified from accumulated other comprehensive income, net of tax	123		—		123
Net current period other comprehensive income (loss)	Net current period other comprehensive income (loss)	125		(2,554)		(2,429)		Net current period other comprehensive income (loss)	123		(6,657)		(6,534)

Balance as of March 25, 2022		$	(19,068)	$	(13,420)	$	(32,488)
Balance as of June 24, 2022								Balance as of June 24, 2022	$	(18,945)	$	(20,077)	$	(39,022)


(in thousands)	(in thousands)	Defined Benefit Pension Items		Currency Translation Adjustments		Total		(in thousands)	Defined Benefit Pension Items		Currency Translation Adjustments		Total
Balance as of December 25, 2020		$	(30,499)	$	(4,742)	$	(35,241)
Other comprehensive loss before reclassifications		—		(818)		(818)
Balance as of March 26, 2021								Balance as of March 26, 2021	$	(30,237)	$	(5,560)	$	(35,797)
Other comprehensive income before reclassifications								Other comprehensive income before reclassifications	—		2,152		2,152
Amounts reclassified from accumulated other comprehensive income, net of tax	Amounts reclassified from accumulated other comprehensive income, net of tax	262		—		262		Amounts reclassified from accumulated other comprehensive income, net of tax	262		—		262
Net current period other comprehensive income (loss)		262		(818)		(556)
Net current period other comprehensive income								Net current period other comprehensive income	262		2,152		2,414

Balance as of March 26, 2021		$	(30,237)	$	(5,560)	$	(35,797)
Balance as of June 25, 2021								Balance as of June 25, 2021	$	(29,975)	$	(3,408)	$	(33,383)

The following table presents the changes in accumulated other comprehensive loss by component for the ~~six~~nine months ended ~~March 25,~~June 24, 2022 and ~~March 26,~~June 25, 2021.


(in thousands)	(in thousands)	Defined Benefit Pension Items		Currency Translation Adjustments		Total		(in thousands)	Defined Benefit Pension Items		Currency Translation Adjustments		Total
Balance as of September 30, 2021	Balance as of September 30, 2021	$	(19,318)	$	(9,408)	$	(28,726)	Balance as of September 30, 2021	$	(19,318)	$	(9,408)	$	(28,726)
Other comprehensive loss before reclassifications	Other comprehensive loss before reclassifications	—		(4,012)		(4,012)		Other comprehensive loss before reclassifications	—		(10,669)		(10,669)
Amounts reclassified from accumulated other comprehensive income, net of tax	Amounts reclassified from accumulated other comprehensive income, net of tax	250		—		250		Amounts reclassified from accumulated other comprehensive income, net of tax	373		—		373
Net current period other comprehensive income (loss)	Net current period other comprehensive income (loss)	250		(4,012)		(3,762)		Net current period other comprehensive income (loss)	373		(10,669)		(10,296)

Balance as of March 25, 2022		$	(19,068)	$	(13,420)	$	(32,488)
Balance as of June 24, 2022								Balance as of June 24, 2022	$	(18,945)	$	(20,077)	$	(39,022)

(in thousands) Defined Benefit
Pension Items Currency
Translation
Adjustments Total
Balance as of September 30, 2020 $ (30,761) $ (11,793) $ (42,554)
Other comprehensive income before reclassifications — 6,233 6,233
Amounts reclassified from accumulated other
comprehensive income, net of tax 524 — 524
Net current period other comprehensive income 524 6,233 6,757
Balance as of March 26, 2021 $ (30,237) $ (5,560) $ (35,797)


(in thousands)	Defined Benefit Pension Items		Currency Translation Adjustments		Total
Balance as of September 30, 2020	$	(30,761)	$	(11,793)	$	(42,554)
Other comprehensive income before reclassifications	—		8,385		8,385
Amounts reclassified from accumulated other comprehensive income, net of tax	786		—		786
Net current period other comprehensive income	786		8,385		9,171

Balance as of June 25, 2021	$	(29,975)	$	(3,408)	$	(33,383)

9. INVENTORIES, NET

A majority of the Company’s inventories are recorded at the lower of cost (primarily last in, first out, or “LIFO”) or market or net realizable value, as applicable. Approximately 85% and 81% of the Company’s inventories were valued at the lower of LIFO cost or market at ~~March 25,~~June 24, 2022 and September 30, 2021, respectively. Interim LIFO determinations, including those at ~~March 25,~~June 24, 2022, are based on management’s estimates of future inventory levels and costs for the remainder of the current fiscal year.


(in thousands)	(in thousands)	March 25, 2022		September 30, 2021		(in thousands)	June 24, 2022		September 30, 2021
Purchased materials and manufactured parts, net	Purchased materials and manufactured parts, net	$	126,227	$	105,460	Purchased materials and manufactured parts, net	$	134,531	$	105,460
Work in process, net	Work in process, net	61,589		35,043		Work in process, net	65,436		35,043
Finished goods, net	Finished goods, net	223,540		145,486		Finished goods, net	244,694		145,486
Inventories, net	Inventories, net	$	411,356	$	285,989	Inventories, net	$	444,661	$	285,989

Total inventories would be ~~$121,895~~$101,710 higher and $108,911 higher than reported as of ~~March 25,~~June 24, 2022 and September 30, 2021, respectively, if the first-in, first-out method was used for all inventories. As of ~~March 25,~~June 24, 2022, and September 30, 2021, the excess and obsolete inventory reserve was ~~$18,650~~$21,486 and $11,780, respectively.

10. PROPERTY, PLANT AND EQUIPMENT

As of ~~March 25,~~June 24, 2022, and September 30, 2021, property, plant and equipment and accumulated depreciation were as follows:


(in thousands)	(in thousands)	March 25, 2022		September 30, 2021		(in thousands)	June 24, 2022		September 30, 2021
Land	Land	$	22,768	$	23,043	Land	$	26,596	$	23,043
Buildings and related improvements	Buildings and related improvements	137,401		136,680		Buildings and related improvements	167,290		136,680
Machinery and equipment	Machinery and equipment	386,350		372,503		Machinery and equipment	411,808		372,503
Leasehold improvements	Leasehold improvements	10,168		9,720		Leasehold improvements	9,769		9,720
Software	Software	27,988		28,288		Software	35,485		28,288
Construction in progress	Construction in progress	60,259		43,055		Construction in progress	60,788		43,055
Property, plant and equipment, at cost	Property, plant and equipment, at cost	644,934		613,289		Property, plant and equipment, at cost	711,736		613,289
Accumulated depreciation	Accumulated depreciation	(358,998)		(337,667)		Accumulated depreciation	(368,399)		(337,667)
Property, plant and equipment, net	Property, plant and equipment, net	$	285,936	$	275,622	Property, plant and equipment, net	$	343,337	$	275,622

Depreciation expense for the three months ended ~~March 25,~~June 24, 2022 and ~~March 26,~~June 25, 2021 totaled ~~$11,293~~$11,804 and ~~$11,170~~$11,459 respectively. Depreciation expense for the ~~six~~nine months ended ~~March 25,~~June 24, 2022 and ~~March 26,~~June 25, 2021 totaled ~~$23,110~~$34,914 and ~~$21,953~~$33,412 respectively.

11. GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill are as follows:


(in thousands)	(in thousands)	Electrical		Safety & Infrastructure		Total		(in thousands)	Electrical		Safety & Infrastructure		Total
Balance as of September 30, 2021	Balance as of September 30, 2021	$	155,471	$	43,577	$	199,048	Balance as of September 30, 2021	$	155,471	$	43,577	$	199,048
Goodwill acquired during year	Goodwill acquired during year	7,348		6,398		13,746		Goodwill acquired during year	76,928		9,495		86,423
Exchange rate effects	Exchange rate effects	(822)		195		(627)		Exchange rate effects	(3,476)		(46)		(3,522)
Balance as of March 25, 2022		$	161,997	$	50,170	$	212,167
Balance as of June 24, 2022								Balance as of June 24, 2022	$	228,923	$	53,026	$	281,949

Goodwill balances as of September 30, 2021 and ~~March 25,~~June 24, 2022 include $3,924 and $43,000 of accumulated impairment losses within the Electrical and Safety & Infrastructure segments, respectively.

The Company assesses the recoverability of goodwill and indefinite-lived trade names on an annual basis in accordance with ASC 350, “Intangibles - Goodwill and Other.” The measurement date is the first day of the fourth fiscal quarter, or more frequently, if events or circumstances indicate that it is more likely than not that the fair value of a reporting unit or the respective indefinite-lived trade name is less than the carrying value.

The following table provides the gross carrying value, accumulated amortization and net carrying value for each major class of intangible asset:


			March 25, 2022						September 30, 2021								June 24, 2022						September 30, 2021
(in thousands)	(in thousands)	Weighted Average Useful Life (Years)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value		(in thousands)	Weighted Average Useful Life (Years)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Amortizable intangible assets:	Amortizable intangible assets:														Amortizable intangible assets:
Customer relationships	Customer relationships	11	$	387,626	$	(251,093)	$	136,533	$	371,048	$	(234,946)	$	136,102	Customer relationships	11	$	483,965	$	(259,167)	$	224,798	$	371,048	$	(234,946)	$	136,102
Other	Other	7	24,443		(11,627)		12,816		23,633		(11,411)		12,222		Other	7	44,645		(10,846)		33,799		23,633		(11,411)		12,222
Total	Total		412,069		(262,720)		149,349		394,681		(246,357)		148,324		Total		528,610		(270,013)		258,597		394,681		(246,357)		148,324
Indefinite-lived intangible assets:	Indefinite-lived intangible assets:														Indefinite-lived intangible assets:
Trade names	Trade names		92,880		—		92,880		92,880		—		92,880		Trade names		92,880		—		92,880		92,880		—		92,880
Total	Total		$	504,949	$	(262,720)	$	242,229	$	487,561	$	(246,357)	$	241,204	Total		$	621,490	$	(270,013)	$	351,477	$	487,561	$	(246,357)	$	241,204

Other intangible assets consist of definite-lived trade names, technology, non-compete agreements and backlogs. Amortization expense for the three months ended ~~March 25,~~June 24, 2022 and ~~March 26,~~June 25, 2021 was ~~$8,701~~$8,624 and ~~$8,096,~~$8,707, respectively. Amortization expense for the ~~six~~nine months ended ~~March 25,~~June 24, 2022 and ~~March 26,~~June 25, 2021 was ~~$16,930~~$25,554 and ~~$16,356,~~$25,063, respectively. Expected amortization expense for intangible assets for the remainder of fiscal 2022 and over the next five years and thereafter is as follows:


(in thousands)	(in thousands)			(in thousands)
Remaining 2022	Remaining 2022	$	18,923	Remaining 2022	$	14,334
2023	2023	34,656		2023	46,402
2024	2024	29,319		2024	41,224
2025	2025	17,310		2025	29,221
2026	2026	15,740		2026	27,200
2027	2027	14,813		2027	25,252
Thereafter	Thereafter	18,588		Thereafter	74,964

Actual amounts of amortization may differ from estimated amounts due to additional intangible asset acquisitions, impairment of intangible assets and other events.

12. DEBT

Debt as of ~~March 25,~~June 24, 2022 and September 30, 2021 was as follows:


(in thousands)	(in thousands)	March 25, 2022		September 30, 2021		(in thousands)	June 24, 2022		September 30, 2021

Senior Secured Term Loan Facility due May 26, 2028	Senior Secured Term Loan Facility due May 26, 2028	$	371,238	$	371,095	Senior Secured Term Loan Facility due May 26, 2028	$	371,310	$	371,095
Senior Notes due June 2031	Senior Notes due June 2031	400,000		400,000		Senior Notes due June 2031	400,000		400,000
Deferred financing costs	Deferred financing costs	(11,777)		(12,709)		Deferred financing costs	(11,311)		(12,709)

Long-term debt	Long-term debt	$	759,461	$	758,386	Long-term debt	$	759,999	$	758,386

The asset-based credit facility (the “ABL Credit Facility”) has aggregate commitments of $325,000. AII is the borrower under the ABL Credit Facility which is guaranteed by the Company and all other

subsidiaries of the Company (other than AII) that are guarantors of the Senior Notes. AII’s availability under the ABL Credit Facility was $312,905 and $315,499 as of ~~March 25,~~June 24, 2022 and September 30, 2021.

13. FAIR VALUE MEASUREMENTS

Certain assets and liabilities are required to be recorded at fair value on a recurring basis.

The Company uses a forward currency ~~contracts~~contract to hedge the effects of foreign exchange relating to ~~certain~~one of the Company’s intercompany balances denominated in a foreign currency. ~~These~~This derivative ~~instruments are~~instrument is not formally designated as ~~hedges~~a hedge by the Company and the ~~terms~~remaining term of ~~these instruments range from~~the instrument is two ~~months to six~~ months. Short-term forward currency contracts are recorded in either other current assets or other current liabilities and long-term forward currency contracts are recorded in either other long-term assets or other long-term liabilities in the condensed consolidated balance sheet. The fair value gains and losses are included in other income, net within the condensed consolidated statements of operations. See Note 5, “Other Income, net” for further detail.

The total notional amounts of undesignated forward currency contracts were ~~£36.7~~£30.6 million and £37.4 million as of ~~March 25,~~June 24, 2022 and September 30, 2021, respectively. Cash flows associated with derivative financial instruments are recognized in the operating section of the condensed consolidated statements of cash flows. The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles.

The following table presents the Company’s assets and liabilities measured at fair value:


		March 25, 2022				September 30, 2021					June 24, 2022				September 30, 2021
(in thousands)	(in thousands)	Level 1		Level 2		Level 1		Level 2		(in thousands)	Level 1		Level 2		Level 1		Level 2
Assets	Assets									Assets
Cash equivalents	Cash equivalents	$	250,206	$	—	$	489,987	$	—	Cash equivalents	$	97,476	$	—	$	489,987	$	—
Forward currency contracts	Forward currency contracts	—		1,026		—		127		Forward currency contracts	—		3,381		—		127
Liabilities	Liabilities									Liabilities
Forward currency contracts	Forward currency contracts	—		221		—		183		Forward currency contracts	—		472		—		183

The Company’s remaining financial instruments consist primarily of cash, accounts receivable and accounts payable whose carrying value approximate their fair value due to their short-term nature.

The estimated fair value of financial instruments not carried at fair value in the condensed consolidated balance sheets were as follows:


		March 25, 2022				September 30, 2021					June 24, 2022				September 30, 2021
(in thousands)	(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value		(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value

Senior Secured Term Loan Facility due May 26, 2028	Senior Secured Term Loan Facility due May 26, 2028	$	373,000	$	370,553	$	373,000	$	371,486	Senior Secured Term Loan Facility due May 26, 2028	$	373,000	$	369,852	$	373,000	$	371,486
Senior Notes due June 2031	Senior Notes due June 2031	400,000		372,600		400,000		415,828		Senior Notes due June 2031	400,000		340,000		400,000		415,828
Total Debt	Total Debt	$	773,000	$	743,153	$	773,000	$	787,314	Total Debt	$	773,000	$	709,852	$	773,000	$	787,314

In determining the approximate fair value of its long-term debt, the Company used the trading values among financial institutions, and these values fall within Level 2 of the fair value hierarchy. The carrying value of the ABL Credit Facility approximates fair value due to it being a market-linked variable rate debt.

14. COMMITMENTS AND CONTINGENCIES

The Company has obligations related to commitments to purchase certain goods. As of ~~March 25,~~June 24, 2022, such obligations were ~~$281,924~~$238,059 for the rest of fiscal year 2022 and ~~$10,789~~$12,334 for fiscal year 2023 and beyond. These amounts represent open purchase orders for materials used in production.

Insurable Liabilities — The Company maintains policies with various insurance companies for its workers’ compensation, product, property, general, auto, and executive liability risks. The insurance policies that the Company maintains have various retention levels and excess coverage limits. The establishment and update of liabilities for unpaid claims, including claims incurred but not reported, is based on management's estimate as a result of the assessment by the Company's claim administrator of each claim and an independent actuarial valuation of the nature and severity of total claims. The Company utilizes a third-party claims administrator to pay claims, track and evaluate actual claims experience, and ensure consistency in the data used in the actuarial valuation.

Legal Contingencies — Historically, a number of lawsuits have been filed against the Company and the Company has also received other claim demand letters alleging that the Company's anti-microbial coated steel sprinkler pipe, which the Company has not manufactured or sold for several years, is incompatible with chlorinated polyvinyl chloride and caused stress cracking in such pipe manufactured by third parties when installed together in the same sprinkler system, which the Company refers to collectively as the “Special Products Claims.” Tyco International Ltd. (“Tyco”), now Johnson Controls, Inc. (“JCI”), has a contractual obligation to indemnify the Company in respect of all remaining and future claims of incompatibility between the Company's antimicrobial coated steel sprinkler pipe and CPVC pipe used in the same sprinkler system. When Special Products Claims arise, JCI has defended and indemnified the Company as required.

At this time, the Company does not expect the outcome of the Special Products Claims proceedings, either individually or in the aggregate, to have a material adverse effect on its business, financial condition, results of operations or cash flows, and the Company believes that its reserves are adequate for all remaining contingencies for Special Products Claims.

In addition to the matters discussed above, from time to time, the Company is subject to a number of disputes, administrative proceedings and other claims arising out of the ordinary conduct of the Company’s business. These matters generally relate to disputes arising out of the use or installation of the Company’s products, product liability litigation, contract disputes, patent infringement accusations, employment matters, personal injury claims and similar matters. On the basis of information currently available to the Company, it does not believe that existing proceedings and claims will have a material adverse effect on its business, financial condition, results of operations or cash flows. However, litigation is unpredictable, and the Company could incur judgments or enter into settlements for current or future claims that could adversely affect its business, financial condition, results of operations or cash flows.

15. GUARANTEES

The Company had outstanding letters of credit totaling $12,095 supporting workers’ compensation and general liability insurance policies as of ~~March 25,~~June 24, 2022. The Company also had surety bonds primarily related to performance guarantees on supply agreements and construction contracts, and payment of duties and taxes totaling ~~$19,157~~$30,039 as of ~~March 25,~~June 24, 2022.

In disposing of assets or businesses, the Company often provides representations, warranties and indemnities to cover various risks including unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. The Company does not have the ability to estimate the potential liability from such indemnities because they relate to unknown conditions. However, the Company has no reason to believe that these uncertainties would have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

In the normal course of business, the Company is liable for product performance and contract completion. In the opinion of management, such obligations will not have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

16. SEGMENT INFORMATION

The Electrical segment manufactures high quality products used in the construction of electrical power systems including conduit, cable and installation accessories. This segment serves contractors in partnership with the electrical wholesale channel.

The Safety & Infrastructure segment designs and manufactures solutions including metal framing, mechanical pipe, perimeter security and cable management for the protection and reliability of critical infrastructure. These solutions are marketed to contractors, original equipment manufacturers and end users.

Both segments use Adjusted EBITDA as the primary measure of profit and loss. Segment Adjusted EBITDA is income (loss) before income taxes, adjusted to exclude unallocated expenses, depreciation and amortization, interest expense, net, stock-based compensation, loss on extinguishment of debt, certain legal matters, and other items, such as inventory reserves and adjustments, (gain) loss on disposal of property, plant and equipment, insurance recovery related to damages of property, plant and equipment, release of indemnified uncertain tax positions, realized or unrealized gain (loss) on foreign currency impacts of intercompany loans and related forward currency derivatives, gain on purchase of business, restructuring costs and transaction costs.

Intersegment transactions primarily consist of product sales at designated transfer prices on an arm’s-length basis. Gross profit earned and reported within the segment is eliminated in the Company’s consolidated results. Certain manufacturing and distribution expenses are allocated between the

segments on a pro rata basis due to the shared nature of activities. Recorded amounts represent a proportional amount of the quantity of product produced for each segment. Certain assets, such as machinery and equipment and facilities, are not allocated to each segment despite serving both segments. These shared assets are reported within the Safety & Infrastructure segment. The Company allocates certain corporate operating expenses that directly benefit our operating segments, such as insurance and information technology, on a basis that reasonably approximates an estimate of the use of these services.


		Three months ended													Three months ended
		March 25, 2022						March 26, 2021							June 24, 2022						June 25, 2021
(in thousands)	(in thousands)	External Net Sales		Intersegment Sales		Adjusted EBITDA		External Net Sales		Intersegment Sales		Adjusted EBITDA		(in thousands)	External Net Sales		Intersegment Sales		Adjusted EBITDA		External Net Sales		Intersegment Sales		Adjusted EBITDA
Electrical	Electrical	$	758,347	$	1,530	$	330,970	$	486,924	$	576	$	188,826	Electrical	$	819,845	$	1,721	$	351,466	$	660,198	$	965	$	267,824
Safety & Infrastructure	Safety & Infrastructure	224,226		59		28,917		152,619		81		16,193		Safety & Infrastructure	241,745		164		45,669		193,460		32		22,365
Eliminations	Eliminations	—		(1,589)				—		(657)				Eliminations	—		(1,885)				—		(997)
Consolidated operations	Consolidated operations	$	982,573	$	—			$	639,543	$	—			Consolidated operations	$	1,061,590	$	—			$	853,658	$	—

Six months ended
March 25, 2022 March 26, 2021
(in thousands) External Net Sales Intersegment Sales Adjusted EBITDA External Net Sales Intersegment Sales Adjusted EBITDA
Electrical $ 1,398,691 $ 2,869 $ 610,517 $ 873,244 $ 1,401 $ 322,099
Safety & Infrastructure 424,683 112 56,349 277,381 84 30,445
Eliminations — (2,981) — (1,485)
Consolidated operations $ 1,823,374 $ — $ 1,150,625 $ —


	Nine months ended
	June 24, 2022						June 25, 2021
(in thousands)	External Net Sales		Intersegment Sales		Adjusted EBITDA		External Net Sales		Intersegment Sales		Adjusted EBITDA
Electrical	$	2,218,535	$	1,947	$	961,983	$	1,533,442	$	2,366	$	589,923
Safety & Infrastructure	666,428		276		102,018		470,841		116		52,810
Eliminations	—		(2,223)				—		(2,482)
Consolidated operations	$	2,884,963	$	—			$	2,004,283	$	—

Presented below is a reconciliation of operating Segment Adjusted EBITDA to Income before income taxes:


		Three months ended				Six months ended					Three months ended				Nine months ended
(in thousands)	(in thousands)	March 25, 2022		March 26, 2021		March 25, 2022		March 26, 2021		(in thousands)	June 24, 2022		June 25, 2021		June 24, 2022		June 25, 2021
Operating segment Adjusted EBITDA	Operating segment Adjusted EBITDA									Operating segment Adjusted EBITDA
Electrical	Electrical	$	330,970	$	188,826	$	610,517	$	322,099	Electrical	$	351,466	$	267,824	$	961,983	$	589,923
Safety & Infrastructure	Safety & Infrastructure	28,917		16,193		56,349		30,445		Safety & Infrastructure	45,669		22,365		102,018		52,810
Total	Total	$	359,887	$	205,019	$	666,866	$	352,544	Total	$	397,135	$	290,189	$	1,064,001	$	642,733
Unallocated expenses (a)	Unallocated expenses (a)	(13,721)		(11,654)		(27,690)		(22,189)		Unallocated expenses (a)	(19,605)		(15,925)		(47,295)		(38,114)
Depreciation and amortization	Depreciation and amortization	(19,994)		(19,265)		(40,040)		(38,309)		Depreciation and amortization	(20,428)		(20,166)		(60,467)		(58,475)
Interest expense, net	Interest expense, net	(7,514)		(8,416)		(14,432)		(16,670)		Interest expense, net	(7,243)		(8,090)		(21,676)		(24,760)

Transaction costs										Transaction costs	(1,708)		(287)		(3,274)		(646)
Loss on extinguishment of debt										Loss on extinguishment of debt	—		(4,202)		—		(4,202)
Stock-based compensation	Stock-based compensation	(6,128)		(4,868)		(9,555)		(10,390)		Stock-based compensation	(4,625)		(3,768)		(14,180)		(14,158)
Other (b)	Other (b)	(440)		2,421		(1,241)		10,281		Other (b)	(1,172)		(800)		(848)		9,840
Income before income taxes	Income before income taxes	$	312,090	$	163,237	$	573,908	$	275,267	Income before income taxes	$	342,354	$	236,951	$	916,261	$	512,218

(a) Represents unallocated selling, general and administrative activities and associated expenses including, in part, executive, legal, finance, human resources, information technology, business development and communications, as well as certain costs and earnings of employee-related benefits plans, such as stock-based compensation and a portion of self-insured medical costs.	(a) Represents unallocated selling, general and administrative activities and associated expenses including, in part, executive, legal, finance, human resources, information technology, business development and communications, as well as certain costs and earnings of employee-related benefits plans, such as stock-based compensation and a portion of self-insured medical costs.									(a) Represents unallocated selling, general and administrative activities and associated expenses including, in part, executive, legal, finance, human resources, information technology, business development and communications, as well as certain costs and earnings of employee-related benefits plans, such as stock-based compensation and a portion of self-insured medical costs.
(b) Represents other items, such as inventory reserves and adjustments, loss on disposal of property, plant and equipment, insurance recovery related to damages of property, plant and equipment, release of indemnified uncertain tax positions, realized or unrealized gain (loss) on foreign currency impacts of intercompany loans and related forward currency derivatives, gain on purchase of business, restructuring costs and transaction costs.
(b) Represents other items, such as inventory reserves and adjustments, loss on disposal of property, plant and equipment, insurance recovery related to damages of property, plant and equipment, release of indemnified uncertain tax positions, gain on purchase of business. realized or unrealized gain (loss) on foreign currency impacts of intercompany loans and related forward currency derivatives, and restructuring charges.										(b) Represents other items, such as inventory reserves and adjustments, loss on disposal of property, plant and equipment, insurance recovery related to damages of property, plant and equipment, release of indemnified uncertain tax positions, gain on purchase of business. realized or unrealized gain (loss) on foreign currency impacts of intercompany loans and related forward currency derivatives, and restructuring charges.

The Company’s net sales by geography were as follows for the three months ended and ~~six~~nine months ended ~~March 25,~~June 24, 2022 and ~~March 26,~~June 25, 2021:


		Three months ended				Six months ended					Three months ended				Nine months ended
(in thousands)	(in thousands)	March 25, 2022		March 26, 2021		March 25, 2022		March 26, 2021		(in thousands)	June 24, 2022		June 25, 2021		June 24, 2022		June 25, 2021
United States	United States	$	895,585	$	572,427	$	1,652,983	$	1,027,191	United States	$	961,954	$	773,204	$	2,614,937	$	1,800,395
Other Americas	Other Americas	24,649		12,636		47,136		19,410		Other Americas	30,094		15,475		77,230		34,885
Europe	Europe	52,709		43,546		103,162		82,899		Europe	56,952		52,126		160,115		135,025
Asia-Pacific	Asia-Pacific	9,630		10,934		20,093		21,125		Asia-Pacific	12,588		12,853		32,681		33,978
Total	Total	$	982,573	$	639,543	$	1,823,374	$	1,150,625	Total	$	1,061,590	$	853,658	$	2,884,963	$	2,004,283

The table below shows the amount of net sales from external customers for each of the Company’s product categories which accounted for 10% or more of consolidated net sales in either period for the three months ended and ~~six~~nine months ended ~~March 25,~~June 24, 2022 and ~~March 26,~~June 25, 2021:


		Three months ended				Six months ended					Three months ended				Nine months ended
(in thousands)	(in thousands)	March 25, 2022		March 26, 2021		March 25, 2022		March 26, 2021		(in thousands)	June 24, 2022		June 25, 2021		June 24, 2022		June 25, 2021
Metal Electrical Conduit and Fittings	Metal Electrical Conduit and Fittings	$	153,049	$	148,405	$	302,925	$	273,234	Metal Electrical Conduit and Fittings	$	181,196	$	200,989	$	484,122	$	474,223
Electrical Cable & Flexible Conduit	Electrical Cable & Flexible Conduit	137,244		85,440		252,939		158,952		Electrical Cable & Flexible Conduit	142,298		106,645		395,237		265,597
Plastic Pipe and Conduit		374,775		197,139		663,764		337,674
PVC Pipe and Conduit										PVC Pipe and Conduit	389,438		270,527		1,053,203		608,201

Other Electrical products	Other Electrical products	93,279		55,940		179,063		103,384		Other Electrical products	106,913		82,037		285,973		185,421
Electrical	Electrical	758,347		486,924		1,398,691		873,244		Electrical	819,845		660,198		2,218,535		1,533,442

Mechanical Pipe	Mechanical Pipe	112,818		86,480		224,061		151,991		Mechanical Pipe	115,156		112,110		339,217		264,101
Other Safety & Infrastructure products	Other Safety & Infrastructure products	111,408		66,139		200,622		125,390		Other Safety & Infrastructure products	126,589		81,350		327,211		206,740
Safety & Infrastructure	Safety & Infrastructure	224,226		152,619		424,683		277,381		Safety & Infrastructure	241,745		193,460		666,428		470,841
Net sales	Net sales	$	982,573	$	639,543	$	1,823,374	$	1,150,625	Net sales	$	1,061,590	$	853,658	$	2,884,963	$	2,004,283

17. SUBSEQUENT EVENTS

~~On April 26, 2022,~~Subsequent to quarter end, the ~~board~~Company has repurchased 1.2 million shares at a cost of ~~directors approved an amendment to the previously approved share repurchase program to purchase $400~~$103.2 million as of ~~the Company’s outstanding stock. The amendment increased the total repurchase plan of the Company’s outstanding stock to $800 million.~~July 29, 2022.

2223

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included in this report. The following discussion may contain forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in these forward- looking statements. Factors that could cause or contribute to these differences include those factors discussed below and included or referenced elsewhere in this report, particularly in the sections entitled “Forward-Looking Statements” and “Risk Factors.”

Incremental Market Uncertainties

The outbreak of the novel coronavirus (“COVID-19”) has continued to spread and is currently classified as a pandemic which is contributing to volatility and uncertainty in markets and the global economy. This heightened volatility and uncertainty makes it difficult for us to predict the extent of COVID-19’s impact on our operations going forward.

Factors that contribute to our ability to adjust to the outbreak include benefiting from mostly localized supply chains and continuing to take actions within our control to minimize the disruptive impacts of the outbreak. However, there can be no assurance that we will not be materially and adversely impacted in the future.

In addition to the uncertainties brought about by COVID-19, recent events, including central bank interest rate increases and the Russia-Ukraine conflict, are creating additional uncertainty in the global economy, generally, and in the markets we operate in. COVID-19, the Russia-Ukraine conflict and other factors have had and will continue to have adverse effects on global supply chains, which may impact some aspects of our business. Furthermore, aswith the onset of hurricane season, ~~approaches,~~ we are mindful of the effects that adverse weather can have on our domestic supply chain.

RESULTS OF OPERATIONS

The consolidated results of operations for the three months ended ~~March 25,~~June 24, 2022 and ~~March 26,~~June 25, 2021 were as follows:


		Three months ended									Three months ended
(in thousands)	(in thousands)	March 25, 2022		March 26, 2021		Change		% Change		(in thousands)	June 24, 2022		June 25, 2021		Change		% Change
Net sales	Net sales	$	982,573	$	639,543	$	343,030	53.6	%	Net sales	$	1,061,590	$	853,658	$	207,932	24.4	%
Cost of sales	Cost of sales	566,157		399,694		166,463		41.6	%	Cost of sales	607,267		514,385		92,882		18.1	%
Gross profit	Gross profit	416,416		239,849		176,567		73.6	%	Gross profit	454,323		339,273		115,050		33.9	%
Selling, general and administrative	Selling, general and administrative	88,918		67,340		21,578		32.0	%	Selling, general and administrative	95,952		81,832		14,120		17.3	%
Intangible asset amortization	Intangible asset amortization	8,701		8,096		605		7.5	%	Intangible asset amortization	8,624		8,707		(83)		(1.0)	%
Operating income	Operating income	318,797		164,413		154,384		93.9	%	Operating income	349,747		248,734		101,013		40.6	%
Interest expense, net	Interest expense, net	7,514		8,416		(902)		(10.7)	%	Interest expense, net	7,243		8,090		(847)		(10.5)	%

Loss on extinguishment of debt										Loss on extinguishment of debt	—		4,202		(4,202)		100.0	%
Other income, net	Other income, net	(807)		(7,240)		6,433		(88.9)	%	Other income, net	150		(509)		659		(129.5)	%
Income before income taxes	Income before income taxes	312,090		163,237		148,853		91.2	%	Income before income taxes	342,354		236,951		105,403		44.5	%
Income tax expense	Income tax expense	78,613		38,304		40,309		105.2	%	Income tax expense	88,041		61,654		26,387		42.8	%
Net income	Net income	$	233,477	$	124,933	$	108,544	86.9	%	Net income	$	254,313	$	175,297	$	79,016	45.1	%

~~Net sales~~

2324

Net sales


	% Change
Volume	~~(1.3)~~(5.1)	%
Average selling prices	~~52.9~~28.6	%
Foreign exchange	~~(0.4)~~(0.8)	%
Acquisitions	~~2.3~~1.6	%
Other	0.1	%
Net sales	~~53.6~~24.4	%

Net sales increased by ~~$343.0~~$207.9 million, or ~~53.6%~~24.4%, to ~~$982.6~~$1,061.6 million for the three months ended ~~March 25,~~June 24, 2022, compared to ~~$639.5~~$853.7 million for the three months ended ~~March 26,~~June 25, 2021. The increase in net sales is primarily attributed to increased average selling prices across the Company’s products of ~~$338.7~~$244.0 million which were mostly driven by the ~~plastic~~PVC pipe and conduit product category within the Electrical segment and increased net sales of ~~$14.6~~$13.8 million from companies acquired during fiscal 2021 and fiscal 2022. These increases are offset by decreased sales volume of ~~$8.5~~$43.9 million across varying product categories within both the Electrical and the Safety & Infrastructure segments. Pricing for PVC products, as well as other parts of the business, is expected to return to more normal historical levels over time, but that time is uncertain.

Cost of sales


	% Change
Volume	~~(1.9)~~(3.6)	%
Average input costs	~~37.9~~19.1	%
Foreign exchange	~~(0.8)~~(2.3)	%
Acquisitions	~~2.5~~1.8	%
Other	~~3.9~~3.1	%
Cost of sales	~~41.6~~18.1	%

Cost of sales increased by ~~$166.5~~$92.9 million, or ~~41.6%~~18.1%, to ~~$566.2~~$607.3 million for the three months ended ~~March 25,~~June 24, 2022 compared to ~~$399.7~~$514.4 million for the three months ended ~~March 26,~~June 25, 2021. The increase was primarily due to higher input costs of steel, copper and PVC resin of ~~$151.5~~$98.0 million and recent acquisitions during fiscal 2021 and fiscal 2022 of ~~$10.1~~$9.3 million partially offset by lower sales volume of ~~$7.7~~$18.7 million across varying product categories within both the Electrical and the Safety & Infrastructure segments.

Selling, general and administrative

Selling, general and administrative expenses increased by ~~$21.6~~$14.1 million, or ~~32.0%~~17.3%, to ~~$88.9~~$96.0 million for the three months ended ~~March 25,~~June 24, 2022 compared to ~~$67.3~~$81.8 million for the three months ended ~~March 26,~~June 25, 2021. The increase was primarily due to ~~higher sales commission expense of $8.1 million,~~ increased general spending on business improvement initiatives of ~~$5.8~~$8.8 million, higher transaction costs of $1.7 million, higher sales commission expense of $3.6 million, higher variable compensation of ~~$2.0~~$1.3 million and recent acquisitions in fiscal 2021 and 2022 of ~~$1.6~~$1.0 million. ~~The remaining increase~~These increases were partially offset by decreases of ~~$4.1~~$2.3 million is spread across a variety of other spend categories.

Intangible asset amortization

Intangible asset amortization expense ~~increased~~remained relatively flat at $8.6 million for the three months ended June 24, 2022 compared to $8.7 million for the three months ended ~~March~~June 25, ~~2022 compared to $8.1 million for the three months ended March 26,~~ 2021. ~~The increase in intangible asset amortization was driven by the acquisition of definite-lived intangible assets in fiscal 2022.~~

Interest expense, net

Interest expense, net decreased by ~~$0.9~~$0.8 million, or ~~10.7%~~10.5% to ~~$7.5~~$7.2 million for the three months ended ~~March 25,~~June 24, 2022 compared to ~~$8.4~~$8.1 million for the three months ended ~~March 26,~~June 25, 2021. The decrease is

primarily due to interest expense being derived from a lower average principal balance resulting from the Company’s fiscal 2021 debt restructuring transactions.

Other income, net

Other income, net decreased to ~~$0.8~~$0.2 million other expense for the three months ended ~~March 25,~~June 24, 2022 compared to ~~$7.2~~$0.5 million other income for the three months ended ~~March 26,~~June 25, 2021. The decrease was primarily due to ~~a $6.0 million business interruption insurance recovery in fiscal 2021 from a flood at one of the Company’s manufacturing facilities.~~foreign currency fluctuations.

Income tax expense

The Company’s income tax rate ~~increased~~decreased to ~~25.2%~~25.7% for the three months ended ~~March 25,~~June 24, 2022 compared to ~~23.5%~~26.0% for the three months ended ~~March 26,~~June 25, 2021. The ~~increase~~decrease in the current period effective tax rate was primarily driven by ~~a decrease in~~ the ~~excess~~prior year one-time tax ~~benefit associated with stock compensation.~~expense from the deferred remeasurement of our UK subsidiaries due to the enactment of the Finance Act of 2021 which, among other things, changed the UK corporate tax rate from 19% to 25%.

SEGMENT RESULTS

Electrical


		Three months ended											Three months ended
(in thousands)	(in thousands)	March 25, 2022			March 26, 2021			Change		% Change		(in thousands)	June 24, 2022			June 25, 2021			Change		% Change
Net sales	Net sales	$	759,877		$	487,500		$	272,377	55.9	%	Net sales	$	821,566		$	661,163		$	160,403	24.3	%
Adjusted EBITDA	Adjusted EBITDA	$	330,970		$	188,826		$	142,144	75.3	%	Adjusted EBITDA	$	351,466		$	267,824		$	83,642	31.2	%
Adjusted EBITDA margin	Adjusted EBITDA margin	43.6		%	38.7		%					Adjusted EBITDA margin	42.8		%	40.5		%

Net sales


	% Change
Volume	~~0.1~~ (6.2)	%
Average selling prices	~~54.1~~30.3	%
Foreign exchange	~~(0.6)~~(1.0)	%
Acquisitions	~~1.9~~1.0	%
Other	~~0.4~~0.2	%
Net sales	~~55.9~~24.3	%

Net sales increased by ~~$272.4~~$160.4 million, or ~~55.9%~~24.3%, to ~~$759.9~~$821.6 million for the three months ended ~~March 25,~~June 24, 2022 compared to ~~$487.5~~$661.2 million for the three months ended ~~March 26,~~June 25, 2021. The increase in net sales is primarily attributed to increased average selling prices of ~~$263.4~~$200.1 million which were mostly driven by the ~~plastic~~PVC pipe and conduit product category and increased net sales of ~~$9.2~~$6.9 million from companies acquired during fiscal 2021 and fiscal 2022. These increases are offset by decreased sales volume of $41.2 million across varying product categories. Pricing for PVC products, as well as other parts of the business, is expected to return to more normal historical levels over time, but that time is uncertain.

Adjusted EBITDA

Adjusted EBITDA for the three months ended ~~March 25,~~June 24, 2022 increased by ~~$142.1~~$83.6 million, or ~~75.3%~~31.2%, to ~~$331.0~~$351.5 million from ~~$188.8~~$267.8 million for the three months ended ~~March 26,~~June 25, 2021. Adjusted EBITDA margins increased to ~~43.6%~~42.8% for the three months ended ~~March 25,~~June 24, 2022 compared to ~~38.7%~~40.5% for the three months ended ~~March 26,~~June 25, 2021. The increase in Adjusted EBITDA and Adjusted EBITDA margins was largely due to higher average selling prices over input costs.

Safety & Infrastructure


		Three months ended											Three months ended
(in thousands)	(in thousands)	March 25, 2022			March 26, 2021			Change		% Change		(in thousands)	June 24, 2022			June 25, 2021			Change		% Change
Net sales	Net sales	$	224,285		$	152,700		$	71,585	46.9	%	Net sales	$	241,909		$	193,492		$	48,417	25.0	%
Adjusted EBITDA	Adjusted EBITDA	$	28,917		$	16,193		$	12,724	78.6	%	Adjusted EBITDA	$	45,669		$	22,365		$	23,304	104.2	%
Adjusted EBITDA margin	Adjusted EBITDA margin	12.9		%	10.6		%					Adjusted EBITDA margin	18.9		%	11.6		%

Net sales


	% Change
Volume	~~(5.9)~~(1.4)	%
Average selling prices	~~49.3~~22.7	%
Acquisitions	~~3.5~~3.6	%
Other	—0.1	%
Net sales	~~46.9~~25.0	%

Net sales increased by ~~$71.6~~$48.4 million, or ~~46.9%~~25.0%, for the three months ended ~~March 25,~~June 24, 2022 to ~~$224.3~~$241.9 million compared to ~~$152.7~~$193.5 million for the three months ended ~~March 26,~~June 25, 2021. The increase is primarily attributed to increased average selling prices of ~~$75.2~~$43.9 million driven by higher input costs of steel and increased net sales of ~~$5.4~~$6.9 million from companies acquired during fiscal 2022 partially offset by lower volumes of ~~$9.0~~$2.8 million primarily ~~in the mechanical pipe~~across various steel product ~~line.~~categories.

Adjusted EBITDA

Adjusted EBITDA increased by ~~$12.7~~$23.3 million, or ~~78.6%~~104.2%, to ~~$28.9~~$45.7 million for the three months ended ~~March 25,~~June 24, 2022 compared to ~~$16.2~~$22.4 million for the three months ended ~~March 26,~~June 25, 2021. Adjusted EBITDA margins increased to ~~12.9%~~18.9% for the three months ended ~~March 25,~~June 24, 2022 compared to ~~10.6%~~11.6% for the three months ended ~~March 26,~~June 25, 2021. The Adjusted EBITDA increase is primarily due to ~~the price increases, partially offset by lower volume, discussed above.~~higher average prices over input costs.

The consolidated results of operations for the ~~six~~nine months ended ~~March 25,~~June 24, 2022 and ~~March 26,~~June 25, 2021 were as follows:


		Six months ended									Nine months ended
(in thousands)	(in thousands)	March 25, 2022		March 26, 2021		Change		% Change		(in thousands)	June 24, 2022		June 25, 2021		Change		% Change
Net sales	Net sales	$	1,823,374	$	1,150,625	$	672,749	58.5	%	Net sales	$	2,884,963	$	2,004,283	$	880,680	43.9	%
Cost of sales	Cost of sales	1,052,150		721,585		330,565		45.8	%	Cost of sales	1,659,416		1,235,970		423,446		34.3	%
Gross profit	Gross profit	771,224		429,040		342,184		79.8	%	Gross profit	1,225,547		768,313		457,234		59.5	%
Selling, general and administrative	Selling, general and administrative	167,069		128,418		38,651		30.1	%	Selling, general and administrative	263,020		210,250		52,770		25.1	%
Intangible asset amortization	Intangible asset amortization	16,930		16,356		574		3.5	%	Intangible asset amortization	25,554		25,063		491		2.0	%
Operating income	Operating income	587,225		284,266		302,959		106.6	%	Operating income	936,973		533,000		403,973		75.8	%
Interest expense, net	Interest expense, net	14,432		16,670		(2,238)		(13.4)	%	Interest expense, net	21,676		24,760		(3,084)		(12.5)	%

Loss on extinguishment of debt										Loss on extinguishment of debt	—		4,202		(4,202)		100.0	%
Other income, net	Other income, net	(1,115)		(7,671)		6,556		(85.5)	%	Other income, net	(964)		(8,180)		7,216		(88.2)	%
Income before income taxes	Income before income taxes	573,908		275,267		298,641		108.5	%	Income before income taxes	916,261		512,218		404,043		78.9	%
Income tax expense	Income tax expense	135,588		65,268		70,320		107.7	%	Income tax expense	223,630		126,922		96,708		76.2	%
Net income	Net income	$	438,320	$	209,999	$	228,321	108.7	%	Net income	$	692,631	$	385,296	$	307,335	79.8	%

Net sales


	% Change
Volume	(5.1)	%
Average selling prices	~~61.5~~47.4	%
Foreign exchange	~~(0.1)~~(0.4)	%
Acquisitions	~~2.2~~1.9	%
Other	0.1	%
Net sales	~~58.5~~43.9	%

Net sales increased by ~~$672.7~~$880.7 million, or ~~58.5%~~43.9%, to ~~$1,823.4~~$2,885.0 million for the ~~six~~nine months ended ~~March 25,~~June 24, 2022, compared to ~~$1,150.6~~$2,004.3 million for the ~~six~~nine months ended ~~March 26,~~June 25, 2021. The increase in net sales is primarily attributed to increased average selling prices of ~~$707.9~~$950.8 million which were mostly driven by the ~~plastic~~PVC pipe and conduit product category within the Electrical segment and increased net sales of ~~$25.6~~$39.1 million from companies acquired during fiscal 2021 and fiscal 2022. These increases are offset by decreased sales volume of ~~$59.2~~$103.1 million across varying product categories within both the Electrical and the Safety & Infrastructure segments. Pricing for PVC products, as well as other parts of the business, are expected to return to more normal historical levels over time, but that time is uncertain.

Cost of sales


	% Change
Volume	~~(5.6)~~(4.8)	%
Average input costs	~~44.6~~33.6	%
Foreign exchange	~~(0.2)~~(0.7)	%
Acquisitions	~~2.2~~2.0	%
Other	~~4.8~~4.2	%
Cost of sales	~~45.8~~34.3	%

Cost of sales increased by ~~$330.6~~$423.4 million, or ~~45.8%~~34.3% to ~~$1,052.2~~$1,659.4 million for the ~~six~~nine months ended ~~March 25,~~June 24, 2022 compared to ~~$721.6~~$1,236.0 million for the ~~six~~nine months ended ~~March 26,~~June 25, 2021. The increase in cost of sales was primarily due to higher input costs for steel, copper and resin of ~~$321.7~~$414.8 million and recent acquisitions in fiscal 2021 and fiscal 2022 of ~~$15.9~~$25.2 million, partially offset by lower sales volume of ~~$40.3~~$59.6 million across varying product categories within both the Electrical and the Safety & Infrastructure segments.

Selling, general and administrative

Selling, general and administrative expenses increased by ~~$38.7~~$52.8 million, or ~~30.1%~~25.1% to ~~$167.1~~$263.0 million for the ~~six~~nine months ended ~~March 25,~~June 24, 2022 compared to ~~$128.4~~$210.3 million for the ~~six~~nine months ended ~~March 26,~~June 25, 2021. The increase was primarily due to higher sales commission expense of ~~$16.0~~$19.7 million, increased general spending on business improvement initiatives of ~~$9.4~~$18.2 million, transaction costs of $3.3 million, higher variable compensation of ~~$4.2~~$5.5 million, and recent acquisitions in fiscal 2021 and 2022 of ~~$1.6 million and transaction costs of $1.1~~$2.6 million. The remaining increase of ~~$6.4~~$3.5 million is spread across a variety of other spend categories.

Intangible asset amortization

Intangible asset amortization expense increased to ~~$16.9~~$25.6 million for the ~~six~~nine months ended ~~March 25,~~June 24, 2022 compared to ~~$16.4~~$25.1 million for the ~~six~~nine months ended ~~March 26,~~June 25, 2021. The increase in intangible asset amortization was driven by the acquisition of definite-lived intangible assets in fiscal 2022.

Interest expense, net

Interest expense, net, decreased by ~~$2.2~~$3.1 million, or ~~13.4%~~12.5% to ~~$14.4~~$21.7 million for the ~~six~~nine months ended ~~March 25,~~June 24, 2022 compared to ~~$16.7~~$24.8 million for the ~~six~~nine months ended ~~March 26,~~June 25, 2021. The decrease is primarily due to the Company’s principal prepayments in fiscal 2020 and 2021, resulting in a lower principal balance in fiscal 2021 from which interest expense was derived.

Other income, net

Other income, net decreased to ~~$1.1~~$1.0 million for the ~~six~~nine months ended ~~March 25,~~June 24, 2022 compared to ~~$7.7~~$8.2 million for the ~~six~~nine months ended ~~March 26,~~June 25, 2021. The decrease was primarily due to a $6.0 million business interruption insurance recovery in fiscal 2021 from a flood at one of the Company’s manufacturing facilities.

Income tax expense

The Company’s income tax rate decreased to ~~23.6%~~24.4% for the ~~six~~nine months ended ~~March 25,~~June 24, 2022 compared to ~~23.7%~~24.8% for the ~~six~~nine months ended ~~March 26,~~June 25, 2021. The decrease in the six month period effective tax rate was primarily due to an increase in the excess tax benefit associated with stock ~~compensation partially offset by the increase in non-deductible executive~~ compensation.

SEGMENT RESULTS

Electrical


		Six months ended											Nine months ended
(in thousands)	(in thousands)	March 25, 2022			March 26, 2021			Change		% Change		(in thousands)	June 24, 2022			June 25, 2021			Change		% Change
Net sales	Net sales	$	1,401,560		$	874,645		$	526,915	60.2	%	Net sales	$	2,220,482		$	1,535,808		$	684,674	44.6	%
Adjusted EBITDA	Adjusted EBITDA	$	610,517		$	322,099		$	288,418	89.5	%	Adjusted EBITDA	$	961,983		$	589,923		$	372,060	63.1	%
Adjusted EBITDA margin	Adjusted EBITDA margin	43.6		%	36.8		%					Adjusted EBITDA margin	43.3		%	38.4		%

Net sales


	% Change
Volume	~~(2.6)~~(4.1)	%
Average selling prices	~~60.5~~47.5	%
Foreign exchange	~~(0.2)~~(0.5)	%
Acquisitions	~~2.3~~1.7	%
Other	~~0.2~~—	%
Net sales	~~60.2~~44.6	%

Net sales increased by ~~$526.9~~$684.7 million, or ~~60.2%~~44.6%, to ~~$1,401.6~~$2,220.5 million for the ~~six~~nine months ended ~~March 25,~~June 24, 2022 compared to ~~$874.6~~$1,535.8 million for the ~~six~~nine months ended ~~March 26,~~June 25, 2021. The increase in net sales is primarily attributed to increased average selling prices of ~~$529.6~~$729.5 million which were mostly driven by the ~~plastic~~PVC pipe and conduit product category and increased net sales of ~~$20.2~~$26.7 million from companies acquired during fiscal 2021 and fiscal 2022. These increases were partially offset by decreased sales volume of ~~$22.8~~$64.0 million. Pricing for PVC products, as well as other parts of the business, are expected to return to more normal historical levels over time, but that time is uncertain.

Adjusted EBITDA

Adjusted EBITDA for the ~~six~~nine months ended ~~March 25,~~June 24, 2022 increased by ~~$288.4~~$372.1 million, or ~~89.5%~~63.1%, to ~~$610.5~~$962.0 million from ~~$322.1~~$589.9 million for the ~~six~~nine months ended ~~March 26,~~June 25, 2021. Adjusted EBITDA margins increased to ~~43.6%~~43.3% for the ~~six~~nine months ended ~~March 25,~~June 24, 2022 compared to ~~36.8%~~38.4% for the ~~six~~nine months ended ~~March 26,~~June 25, 2021. The increase in Adjusted EBITDA and Adjusted EBITDA margins was largely due to higher average selling prices in relation to changes in input costs, and contributions from acquisitions.

Safety & Infrastructure


		Six months ended											Nine months ended
(in thousands)	(in thousands)	March 25, 2022			March 26, 2021			Change		% Change		(in thousands)	June 24, 2022			June 25, 2021			Change		% Change
Net sales	Net sales	$	424,795		$	277,465		$	147,330	53.1	%	Net sales	$	666,704		$	470,957		$	195,747	41.6	%
Adjusted EBITDA	Adjusted EBITDA	$	56,349		$	30,445		$	25,904	85.1	%	Adjusted EBITDA	$	102,018		$	52,810		$	49,208	93.2	%
Adjusted EBITDA margin	Adjusted EBITDA margin	13.3		%	11.0		%					Adjusted EBITDA margin	15.3		%	11.2		%

Net sales


	Change (%)
Volume	~~(13.1)~~(8.3)	%
Average selling prices	~~64.3~~47.0	%
Acquisitions	~~2.0~~2.7	%
Other	~~(0.1)~~0.2	%
Net sales	~~53.1~~41.6	%

Net sales increased by ~~$147.3~~$195.7 million, or ~~53.1%~~41.6%, for the ~~six~~nine months ended ~~March 25,~~June 24, 2022 to ~~$424.8~~$666.7 million compared to ~~$277.5~~$471.0 million for the ~~six~~nine months ended ~~March 26,~~June 25, 2021. The increase is primarily attributed to increased average selling prices of ~~$178.3~~$221.3 million primarily driven by higher input costs and increased net sales of ~~$5.4~~$12.5 million from companies acquired during fiscal 2022 partially offset by lower volumes of ~~$36.4~~$39.2 million primarily ~~in the mechanical pipe~~across various steel product ~~line.~~categories.

Adjusted EBITDA

Adjusted EBITDA increased ~~$25.9~~$49.2 million, or ~~85.1%~~93.2%, to ~~$56.3~~$102.0 million for the ~~six~~nine months ended ~~March 25,~~June 24, 2022 compared to ~~$30.4~~$52.8 million for the ~~six~~nine months ended ~~March 26,~~June 25, 2021. Adjusted EBITDA margins increased to ~~13.3%~~15.3% for the ~~six~~nine months ended ~~March 25,~~June 24, 2022 compared to ~~11.0%~~11.2% for the ~~six~~nine months ended ~~March 26,~~June 25, 2021. The Adjusted EBITDA increase is primarily due to ~~the price increases, partially offset by lower volume, discussed above.~~higher average prices over input costs.

LIQUIDITY AND CAPITAL RESOURCES

We believe we have sufficient liquidity to support our ongoing operations and to invest in future growth and create value for stockholders. Our cash and cash equivalents were ~~$390.4~~$186.7 million as of ~~March 25,~~June 24, 2022, of which ~~$53.7~~$46.8 million was held at non-U.S. subsidiaries. Those cash balances at foreign subsidiaries may be subject to withholding or local country taxes if the Company’s intention to permanently reinvest such income were to change and cash was repatriated to the United States.

In general, we require cash to fund working capital investments, acquisitions, capital expenditures, debt repayment, interest payments, taxes and share repurchases. We have access to the ABL Credit Facility to fund operational needs. As of ~~March 25,~~June 24, 2022, there were no outstanding borrowings under the ABL Credit Facility and $12.1 million of letters of credit issued under the ABL Credit Facility. The borrowing base was estimated to be $325.0 million and approximately $312.9 million was available under the ABL Credit Facility as of ~~March 25,~~June 24, 2022. Outstanding letters of credit count as utilization of the commitments under the ABL Credit Facility and reduce the amount available for borrowings.

The agreements governing the Senior Secured Term Loan Facility and the ABL Credit Facility (collectively, the "Credit Facilities") contain covenants that limit or restrict AII’s ability to incur additional indebtedness, repurchase debt, incur liens, sell assets, make certain payments (including dividends) and enter into transactions with affiliates. AII has been in compliance with the covenants under the agreements for all periods presented.

We may from time to time repurchase our debt or take other steps to reduce our debt. These actions may include open market repurchases, negotiated repurchases or opportunistic refinancing of debt. The amount of debt, if any, that may be repurchased or refinanced will depend on market conditions, trading levels of our debt, our cash position, compliance with debt covenants and other considerations.

Our use of cash may fluctuate during the year and from year to year due to differences in demand and changes in economic conditions primarily related to the prices of the commodities we purchase.

Capital expenditures have historically been necessary to expand and update the production capacity and improve the productivity of our manufacturing operations.

Our ongoing liquidity needs are expected to be funded by cash on hand, net cash provided by operating activities and, as required, borrowings under the ABL Credit Facility. We expect that cash provided from operations and available capacity under the ABL Credit Facility will provide sufficient funds to operate our business, make expected capital expenditures and meet our liquidity requirements for at least the next twelve months, including payments of interest and principal on our debt.

There have been no material changes in our contractual obligations and commitments since the filing of our Annual Report on Form 10-K.

Limitations on distributions and dividends by subsidiaries

AI, AII, and AIH are each holding companies, and as such have no independent operations or material assets other than ownership of equity interests in their respective subsidiaries. Each company depends on its respective subsidiaries to distribute funds to it so that it may pay obligations and expenses, including satisfying obligations with respect to indebtedness. The ability of our subsidiaries to make distributions and dividends to us depends on their operating results, cash requirements and financial and general business conditions, as well as restrictions under the laws of our subsidiaries' jurisdictions.

The agreements governing the Credit Facilities significantly restrict the ability of our subsidiaries, including AII, to pay dividends, make loans or otherwise transfer assets from AII and, in turn, to us. Further, AII's subsidiaries are permitted under the terms of the Credit Facilities to incur additional indebtedness that may restrict or prohibit the making of distributions, the payment of dividends or the making of loans by such subsidiaries to AII and, in turn, to us. The Senior Secured Term Loan Facility requires AII to meet a certain consolidated coverage ratio on an incurrence basis in connection with additional indebtedness. The ABL Credit Facility contains limits on additional indebtedness based on various conditions for incurring the additional debt. AII has been in compliance with the covenants under the agreements for all periods presented.

The table below summarizes cash flow information derived from our statements of cash flows for the periods indicated:


		Six months ended					Nine months ended
(in thousands)	(in thousands)	March 25, 2022		March 26, 2021		(in thousands)	June 24, 2022		June 25, 2021
Cash flows provided by (used in):	Cash flows provided by (used in):					Cash flows provided by (used in):
Operating activities	Operating activities	$	161,159	$	153,246	Operating activities	$	371,776	$	318,621
Investing activities	Investing activities	(60,799)		(60,935)		Investing activities	(336,693)		(74,303)
Financing activities	Financing activities	(285,572)		(75,404)		Financing activities	(421,241)		(135,412)

Operating activities

During the ~~six~~nine months ended ~~March 25,~~June 24, 2022, the Company was provided ~~$161.2~~$371.8 million by operating activities compared to ~~$153.2~~$318.6 million during the ~~six~~nine months ended ~~March 26,~~June 25, 2021. The ~~$7.9~~$53.2 million increase in cash provided was primarily due to higher cash flows from the increase in operating income of ~~$303.0~~$404.0 million. This increase in operating income was offset primarily by increased income tax impacts of ~~$150.7~~$173.7 million and a ~~$104.4~~$173.0 million increase in cash used in working capital primarily due to higher inventory build during the first two quarters of fiscal 2022,

Investing activities

During the ~~six~~nine months ended ~~March 25,~~June 24, 2022, the Company used ~~$60.8~~$336.7 million in investing activities compared to ~~$60.9~~$74.3 million during the ~~six~~nine months ended ~~March 26,~~June 25, 2021. ~~Investing activities~~Cash used in ~~both periods were primarily related to the~~ acquisitions ~~of Sasco and Four Star~~increased in fiscal 2022 ~~and Queen City and FRE Composites~~by $212.2 million primarily as a result of the acquisition of United Poly in the third quarter of fiscal ~~2021, as well as consistent levels~~2022. The remaining increase in cash used in investing activities was driven by $47.7 million of additional capital ~~expenditures in both periods.~~expenditures.

Financing Activities

During the ~~six~~nine months ended ~~March 25,~~June 24, 2022, the Company used ~~$285.6~~$421.2 million in financing activities compared to ~~$75.4~~$135.4 million used during the ~~six~~nine months ended ~~March 26,~~June 25, 2021. The increase in cash used in financing activities is primarily due to ~~$226.1~~$286.9 million more cash used to repurchase common stock during the ~~six~~nine months ended ~~March 25,~~June 24, 2022 compared to the same period in the prior year.

CHANGES IN CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no material changes in our critical accounting policies and estimates since the filing of our Annual Report on Form 10-K.

RECENT ACCOUNTING STANDARDS

See Note 1, “Basis of Presentation and Summary of Significant Accounting Policies” to our unaudited condensed consolidated financial statements.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements and cautionary statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management’s beliefs and assumptions and information currently available to management. Some of the forward-looking statements can be identified by the use of forward-looking terms such as “believes,” “expects,” “may,” “will,” “shall,” “should,” “would,” “could,” “seeks,” “aims,” “projects,” “is optimistic,” “intends,” “plans,” “estimates,” “anticipates” or other comparable terms. Forward-looking statements include, without limitation, all matters that are not historical facts. They appear in a number of places throughout this Quarterly Report on Form 10-Q and include, without limitation, statements regarding our intentions, beliefs, assumptions or current expectations concerning, among other things, financial position; results of operations; cash flows; prospects; growth strategies or expectations; customer retention; the outcome (by judgment or settlement) and costs of legal, administrative or regulatory proceedings, investigations or inspections, including, without limitation, collective, representative or class action litigation; and the impact of prevailing economic conditions.

Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition and liquidity, and the development of the market in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this Quarterly Report. In addition, even if our results of operations, financial condition and cash flows, and the development of the market in which we operate, are consistent with the forward-looking statements contained in this Quarterly Report, those results or developments may not be indicative of results or developments in subsequent periods. A number of important factors, including, without limitation, the risks and uncertainties discussed or referenced under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, could cause actual results and outcomes to differ materially from those reflected in the forward-looking statements. Additional factors that could cause actual results and outcomes to differ from those reflected in forward-looking statements include, without limitation:

•declines in, and uncertainty regarding, the general business and economic conditions in the United States and international markets in which we operate;

•weakness or another downturn in the United States non-residential construction industry;

•widespread outbreak of diseases, such as the novel coronavirus (COVID-19) pandemic;

•changes in prices of raw materials;

•pricing pressure, reduced profitability, or loss of market share due to intense competition;

•availability and cost of third-party freight carriers and energy;

•high levels of imports of products similar to those manufactured by us;

•changes in federal, state, local and international governmental regulations and trade policies;

•adverse weather conditions;

•increased costs relating to future capital and operating expenditures to maintain compliance with environmental, health and safety laws;

•reduced spending by, deterioration in the financial condition of, or other adverse developments, including inability or unwillingness to pay our invoices on time, with respect to one or more of our top customers;

•increases in our working capital needs, which are substantial and fluctuate based on economic activity and the market prices for our main raw materials, including as a result of failure to collect, or delays in the collection of, cash from the sale of manufactured products;

•work stoppage or other interruptions of production at our facilities as a result of disputes under existing collective bargaining agreements with labor unions or in connection with negotiations of new collective bargaining agreements, as a result of supplier financial distress, or for other reasons;

•changes in our financial obligations relating to pension plans that we maintain in the United States;

•reduced production or distribution capacity due to interruptions in the operations of our facilities or those of our key suppliers;

•loss of a substantial number of our third-party agents or distributors or a dramatic deviation from the amount of sales they generate;

•security threats, attacks, or other disruptions to our information systems, or failure to comply with complex network security, data privacy and other legal obligations or the failure to protect sensitive information;

•possible impairment of goodwill or other long-lived assets as a result of future triggering events, such as declines in our cash flow projections or customer demand and changes in our business and valuation assumptions;

•safety and labor risks associated with the manufacture and in the testing of our products;

•product liability, construction defect and warranty claims and litigation relating to our various products, as well as government inquiries and investigations, and consumer, employment, tort and other legal proceedings;

•our ability to protect our intellectual property and other material proprietary rights;

•risks inherent in doing business internationally;

•changes in foreign laws and legal systems, including as a result of Brexit;

•our inability to introduce new products effectively or implement our innovation strategies;

•our inability to continue importing raw materials, component parts or finished goods;

•the incurrence of liabilities and the issuance of additional debt or equity in connection with acquisitions, joint ventures or divestitures and the failure of indemnification provisions in our acquisition agreements to fully protect us from unexpected liabilities;

•failure to manage acquisitions successfully, including identifying, evaluating, and valuing acquisition targets and integrating acquired companies, businesses or assets;

•the incurrence of additional expenses, increases in the complexity of our supply chain and potential damage to our reputation with customers resulting from regulations related to “conflict minerals”;

•disruptions or impediments to the receipt of sufficient raw materials resulting from various anti-terrorism security measures;

•restrictions contained in our debt agreements;

•failure to generate cash sufficient to pay the principal of, interest on, or other amounts due on our debt;

•challenges attracting and retaining key personnel or high-quality employees;

•future changes to tax legislation;

•failure to generate sufficient cash flow from operations or to raise sufficient funds in the capital markets to satisfy existing obligations and support the development of our business; and

•other risks and factors described in this Quarterly Report and from time to time in documents that we file with the SEC.

You should read this Quarterly Report completely and with the understanding that actual future results may be materially different from expectations. All forward-looking statements attributable to us or persons acting on our behalf that are made in this Quarterly Report are qualified in their entirety by

these cautionary statements. These forward-looking statements are made only as of the date of this Quarterly Report, and we do not undertake any obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, and changes in future operating results over time or otherwise.

Comparisons of results for current and any prior periods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should only be viewed as historical data.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes to the quantitative and qualitative disclosures about market risks previously disclosed in our Annual Report on Form 10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Quarterly Report. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated

and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes to our internal control over financial reporting in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) under the Exchange Act during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

For a discussion of certain litigation involving the Company, see Note 14, “Commitments and Contingencies” to our unaudited condensed consolidated financial statements.

Item 1A. Risk Factors

There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

On November 16, 2021, the board of directors approved a share repurchase program, under which the Company may repurchase up to $400.0 million of its outstanding common stock. ~~As of March 25, 2022, there was $138.9 million of purchases remaining under the plan.~~ On April 26, 2022, the board of directors approved an amendment to the aforementioned plan, extending it to a total repurchase of the Company’s outstanding common stock of $800.0 million. As of June 24, 2022, there was $403.2 million of purchases remaining under the plan. The share repurchase program will be funded from the Company’s available cash balances. This share repurchase program does not obligate the Company to acquire any particular amount of common stock, and it may be terminated at any time at the Company’s discretion.

The following table shows our purchases of our common stock under this plan during fiscal 2022 (in thousands, except per share data):

Period
(4-5-4 calendar) Total Number Of Shares Purchased Avg Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program Maximum Value of Shares that May Yet Be Purchased Under the Program
December 25, 2021 to January 21, 2022 271 $ 107.27 271 $ 266,418
January 22, 2022 to February 25, 2022 729 $ 100.57 729 $ 193,103
February 26, 2022 to March 25, 2022 539 $ 100.49 539 $ 138,917
Total 1,539 1,539


Period (4-5-4 calendar)	Total Number Of Shares Purchased	Avg Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Value of Shares that May Yet Be Purchased Under the Program
March 26, 2022 to April 22, 2022	708	$	95.32	708	$	71,479
April 23, 2022 to May 27, 2022	388	$	102.63	388	$	431,642
May 28, 2022 to June 24, 2022	278	$	102.33	278	$	403,206
Total	1,374			1,374

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits


			31.1#			Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a - 14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
			31.2#			Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a - 14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
			32.1#			Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
			32.2#			Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
			101.INS#			XBRL Instance Document (formatted as inline XBRL)
			101.SCH#			XBRL Taxonomy Schema Linkbase Document (formatted as inline XBRL)
			101.CAL#			XBRL Taxonomy Calculation Linkbase Document
			101.DEF#			XBRL Taxonomy Definition Linkbase Document
			101.LAB#			XBRL Taxonomy Labels Linkbase Document
			101.PRE#			XBRL Taxonomy Presentation Linkbase Document
			104			Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
			#			Filed herewith

3637

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			ATKORE INC.
			(Registrant)
Date:	~~May 3,~~August 2, 2022	By:	/s/ David P. Johnson
			Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

3738