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
OR
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
 _________________________________________
atkr-20220624_g1.jpg
Atkore Inc.

(Exact name of registrant as specified in its charter)
 _________________________________________
Delaware90-0631463
(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 classTrading symbolName of each exchange on which registered
Common Stock, $.01 par value per shareATKRNew 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 filerAccelerated filer
Non-accelerated filerSmaller 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 AprilJuly 28, 2022, there were 43,114,17541,320,866 shares of the registrant’s common stock, $0.01 par value per share, outstanding.



TABLE OF CONTENTS
 
 Page No.
1


PART I. FINANCIAL INFORMATION
    Item 1. Financial Statements
ATKORE INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
Three months endedSix months endedThree months endedNine months ended
(in thousands, except per share data)(in thousands, except per share data)NoteMarch 25, 2022March 26, 2021March 25, 2022March 26, 2021(in thousands, except per share data)NoteJune 24, 2022June 25, 2021June 24, 2022June 25, 2021
Net salesNet 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 salesCost of sales566,157 399,694 1,052,150 721,585 Cost of sales607,267 514,385 1,659,416 1,235,970 
Gross profitGross profit416,416 239,849 771,224 429,040 Gross profit454,323 339,273 1,225,547 768,313 
Selling, general and administrativeSelling, general and administrative88,918 67,340 167,069 128,418 Selling, general and administrative95,952 81,832 263,020 210,250 
Intangible asset amortizationIntangible asset amortization118,701 8,096 16,930 16,356 Intangible asset amortization118,624 8,707 25,554 25,063 
Operating incomeOperating income318,797 164,413 587,225 284,266 Operating income349,747 248,734 936,973 533,000 
Interest expense, netInterest expense, net7,514 8,416 14,432 16,670 Interest expense, net7,243 8,090 21,676 24,760 
Loss on extinguishment of debtLoss on extinguishment of debt— 4,202 — 4,202 
Other income, netOther income, net5(807)(7,240)(1,115)(7,671)Other income, net5150 (509)(964)(8,180)
Income before income taxesIncome before income taxes312,090 163,237 573,908 275,267 Income before income taxes342,354 236,951 916,261 512,218 
Income tax expenseIncome tax expense678,613 38,304 135,588 65,268 Income tax expense688,041 61,654 223,630 126,922 
Net incomeNet income$233,477 $124,933 $438,320 $209,999 Net income$254,313 $175,297 $692,631 $385,296 
Net income per shareNet income per shareNet income per share
BasicBasic7$5.14 $2.62 $9.51 $4.39 Basic7$5.81 $3.69 $15.30 $8.08 
DilutedDiluted7$5.08 $2.58 $9.39 $4.33 Diluted7$5.74 $3.64 $15.10 $7.95 
 
See Notes to unaudited condensed consolidated financial statements.


2


ATKORE INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

Three months endedSix months endedThree months endedNine months ended
(in thousands)(in thousands)NoteMarch 25, 2022March 26, 2021March 25, 2022March 26, 2021(in thousands)NoteJune 24, 2022June 25, 2021June 24, 2022June 25, 2021
Net incomeNet 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 adjustmentChange 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 plansChange in unrecognized loss related to pension benefit plans4125 262 250 524 Change in unrecognized loss related to pension benefit plans4124 262 373 786 
Total other comprehensive (loss) incomeTotal other comprehensive (loss) income8(2,429)(556)(3,762)6,757 Total other comprehensive (loss) income8(6,534)2,414 (10,296)9,171 
Comprehensive incomeComprehensive 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.


3


ATKORE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share data)(in thousands, except share and per share data)NoteMarch 25, 2022September 30, 2021(in thousands, except share and per share data)NoteJune 24, 2022September 30, 2021
AssetsAssetsAssets
Current Assets:Current Assets:Current Assets:
Cash and cash equivalentsCash 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, respectively623,361 524,926 
Accounts receivable, less allowance for current and expected credit losses of $4,204 and $2,510, respectivelyAccounts receivable, less allowance for current and expected credit losses of $4,204 and $2,510, respectively737,319 524,926 
Inventories, netInventories, net9411,356 285,989 Inventories, net9444,661 285,989 
Prepaid expenses and other current assetsPrepaid expenses and other current assets64,924 34,248 Prepaid expenses and other current assets65,076 34,248 
Total current assetsTotal current assets1,490,040 1,421,452 Total current assets1,433,706 1,421,452 
Property, plant and equipment, netProperty, plant and equipment, net10285,936 275,622 Property, plant and equipment, net10343,337 275,622 
Intangible assets, netIntangible assets, net11242,229 241,204 Intangible assets, net11351,477 241,204 
GoodwillGoodwill11212,167 199,048 Goodwill11281,949 199,048 
Right-of-use assets, netRight-of-use assets, net37,757 41,113 Right-of-use assets, net42,124 41,113 
Deferred tax assetsDeferred tax assets633,970 29,693 Deferred tax assets629,431 29,693 
Other long-term assetsOther long-term assets2,021 1,967 Other long-term assets2,027 1,967 
Total AssetsTotal Assets$2,304,120 $2,210,099 Total Assets$2,484,051 $2,210,099 
Liabilities and EquityLiabilities and EquityLiabilities and Equity
Current Liabilities:Current Liabilities:Current Liabilities:
Accounts payableAccounts payable269,830 243,164 Accounts payable275,367 243,164 
Income tax payableIncome tax payable10,741 72,953 Income tax payable10,176 72,953 
Accrued compensation and employee benefitsAccrued compensation and employee benefits37,061 57,437 Accrued compensation and employee benefits48,927 57,437 
Customer liabilitiesCustomer liabilities66,138 80,324 Customer liabilities95,435 80,324 
Lease obligationsLease obligations11,327 11,785 Lease obligations11,336 11,785 
Other current liabilitiesOther current liabilities63,179 59,273 Other current liabilities76,913 59,273 
Total current liabilitiesTotal current liabilities458,276 524,936 Total current liabilities518,154 524,936 
Long-term debtLong-term debt12759,461 758,386 Long-term debt12759,999 758,386 
Long-term lease obligationsLong-term lease obligations27,392 30,236 Long-term lease obligations31,714 30,236 
Deferred tax liabilitiesDeferred tax liabilities618,566 16,746 Deferred tax liabilities616,881 16,746 
Pension liabilitiesPension liabilities2,515 3,819 Pension liabilities1,854 3,819 
Other long-term liabilitiesOther long-term liabilities14,636 11,240 Other long-term liabilities15,440 11,240 
Total LiabilitiesTotal Liabilities1,280,846 1,345,363 Total Liabilities1,344,042 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, respectively440 461 
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 42,530,966 and 45,997,159 shares issued and outstanding, respectivelyCommon stock, $0.01 par value, 1,000,000,000 shares authorized, 42,530,966 and 45,997,159 shares issued and outstanding, respectively426 461 
Treasury stock, held at cost, 290,600 and 290,600 shares, respectivelyTreasury 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 capitalAdditional paid-in capital492,070 506,921 Additional paid-in capital496,785 506,921 
Retained earningsRetained earnings565,832 388,660 Retained earnings684,400 388,660 
Accumulated other comprehensive lossAccumulated other comprehensive loss8(32,488)(28,726)Accumulated other comprehensive loss8(39,022)(28,726)
Total EquityTotal Equity1,023,274 864,736 Total Equity1,140,009 864,736 
Total Liabilities and EquityTotal 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.
4


ATKORE INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
(in thousands)NoteMarch 25, 2022March 26, 2021
Operating activities:
Net income$438,320 $209,999 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization40,040 38,309 
Deferred income taxes6(4,270)4,692 
Stock-based compensation9,555 10,390 
Amortization of right-of-use assets6,489 7,025 
Other non-cash adjustments to net income7,474 968 
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 payable19,617 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 activities161,159 153,246 
Investing activities:
Capital expenditures(25,343)(20,374)
Proceeds from sale of properties and equipment642 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 debt12— (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 period576,289 284,471 
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 $— 
5



Nine months ended
(in thousands)NoteJune 24, 2022June 25, 2021
Operating activities:
Net income$692,631 $385,296 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization60,467 58,475 
Deferred income taxes6(12,649)17,939 
Stock-based compensation14,180 14,158 
Amortization of right-of-use assets9,868 10,545 
Loss on extinguishment of debt— 4,202 
Other non-cash adjustments to net income13,268 (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 payable15,598 69,353 
Accrued and other liabilities13,063 35,665 
Income taxes(76,996)(15,023)
Other, net1,592 (3,805)
Net cash provided by operating activities371,776 318,621 
Investing activities:
Capital expenditures(81,990)(34,242)
Proceeds from sale of properties and equipment658 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 debt12— (812,120)
Proceeds from issuance of long-term debt12— 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 period576,289 284,471 
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 paid3,266 $— 
See Notes to unaudited condensed consolidated financial statements.

5


ATKORE INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)

Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTotal EquityCommon StockTreasury StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTotal Equity
(in thousands)(in thousands)SharesAmountAmount(in thousands)SharesAmountAmount
Balance as of September 30, 2021Balance as of September 30, 202145,997 $461 $(2,580)$506,921 $388,660 $(28,726)$864,736 Balance as of September 30, 202145,997 $461 $(2,580)$506,921 $388,660 $(28,726)$864,736 
Net incomeNet income— — — — 204,843 — 204,843 Net income— — — — 204,843 — 204,843 
Other comprehensive lossOther comprehensive loss— — — — — (1,333)(1,333)Other comprehensive loss— — — — — (1,333)(1,333)
Stock-based compensationStock-based compensation— — — 3,427 — — 3,427 Stock-based compensation— — — 3,427 — — 3,427 
Issuance of common stock, net of shares withheld for taxIssuance of common stock, net of shares withheld for tax355 — (24,509)— — (24,505)Issuance of common stock, net of shares withheld for tax355 — (24,509)— — (24,505)
Repurchase of common stockRepurchase of common stock(958)(10)— (104,537)— (104,547)Repurchase of common stock(958)(10)— (104,537)— (104,547)
Balance as of December 24, 2021Balance as of December 24, 202145,394 $455 $(2,580)$485,839 $488,966 $(30,059)$942,621 Balance as of December 24, 202145,394 $455 $(2,580)$485,839 $488,966 $(30,059)$942,621 
Net incomeNet income— — — — 233,477 — 233,477 Net income— — — — 233,477 — 233,477 
Other comprehensive (loss)— — — — — (2,429)(2,429)
Other comprehensive lossOther comprehensive loss— — — — — (2,429)(2,429)
Stock-based compensationStock-based compensation— — — 6,128 — — 6,128 Stock-based compensation— — — 6,128 — — 6,128 
Issuance of common stock, net of shares withheld for taxIssuance of common stock, net of shares withheld for tax24 — — 103 — — 103 Issuance of common stock, net of shares withheld for tax24 — — 103 — — 103 
Repurchase of common stockRepurchase 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, 2022Balance as of March 25, 202243,879 $440 $(2,580)$492,070 $565,832 $(32,488)$1,023,274 Balance as of March 25, 202243,879 $440 $(2,580)$492,070 $565,832 $(32,488)$1,023,274 
Net incomeNet income— — — — 254,313 — 254,313 
Other comprehensive lossOther comprehensive loss— — — — — (6,534)(6,534)
Stock-based compensationStock-based compensation— — — 4,625 — — 4,625 
Issuance of common stock, net of shares withheld for taxIssuance of common stock, net of shares withheld for tax25 — — 90  — 90 
Repurchase of common stockRepurchase of common stock(1,374)(14)— — (135,745)— (135,759)
Balance as of June 24, 2022Balance as of June 24, 202242,530 $426 $(2,580)$496,785 $684,400 $(39,022)$1,140,009 


6


Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTotal EquityCommon StockTreasury StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTotal Equity
(in thousands)(in thousands)SharesAmountAmount(in thousands)SharesAmountAmount
Balance as of September 30, 2020Balance as of September 30, 202047,407 $475 $(2,580)$487,223 $(64,154)$(42,554)$378,410 Balance as of September 30, 202047,407 $475 $(2,580)$487,223 $(64,154)$(42,554)$378,410 
Net incomeNet income— — — — 85,066 — 85,066 Net income— — — — 85,066 — 85,066 
Other comprehensive incomeOther comprehensive income— — — — — 7,313 7,313 Other comprehensive income— — — — — 7,313 7,313 
Stock-based compensationStock-based compensation— — — 5,522 — — 5,522 Stock-based compensation— — — 5,522 — — 5,522 
Issuance of common stock, net of shares withheld for taxIssuance of common stock, net of shares withheld for tax358 — (3,930)— — (3,927)Issuance of common stock, net of shares withheld for tax358 — (3,930)— — (3,927)
Repurchase of common stockRepurchase 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, 2020Balance as of December 25, 202046,625 $467 $(2,580)$488,815 $(14,114)$(35,241)$437,347 Balance as of December 25, 202046,625 $467 $(2,580)$488,815 $(14,114)$(35,241)$437,347 
Net incomeNet 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 compensationStock-based compensation— — — 4,868 — — 4,868 Stock-based compensation— — — 4,868 — — 4,868 
Issuance of common stock, net of shares withheld for taxIssuance of common stock, net of shares withheld for tax358 — 3,566 — — 3,570 Issuance of common stock, net of shares withheld for tax358 — 3,566 — — 3,570 
Balance as of March 26, 2021Balance as of March 26, 202146,983 $471 $(2,580)$497,249 $110,819 $(35,797)$570,162 Balance as of March 26, 202146,983 $471 $(2,580)$497,249 $110,819 $(35,797)$570,162 
Net incomeNet income— — — — 175,297 — 175,297 
Other comprehensive incomeOther comprehensive income— — — — — 2,414 2,414 
Stock-based compensationStock-based compensation— — — 3,768 — — 3,768 
Issuance of common stockIssuance of common stock38 — 421 — — 424 
Repurchase of common stockRepurchase of common stock(918)(11)— — (75,017)— (75,028)
Balance as of June 25, 2021Balance as of June 25, 202146,103 463 (2,580)501,438 211,099 (33,383)677,037 



See Notes to unaudited condensed consolidated financial statements.
7


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 Companys accounting policies and on the same basis as those financial statements included in the Companys 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 Companys 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 Companys 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 Companys 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.





8


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.
ASUDescription of ASUImpact to AtkoreAdoption 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 Companys 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.
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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 ofThe 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
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price allocation has not been finalized asof 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, theThe 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 hasof 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 PolyOtherTotal
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: 
Cash11,451 — 11,451 
Accounts receivable23,679 5,684 29,363 
Inventories13,266 4,821 18,087 
Intangible assets118,670 19,640 138,310 
Fixed assets14,091 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 acquired156,925 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.





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

 United PolyOther
(in thousands)Fair ValueWeighted Average Useful Life (Years)Fair ValueWeighted Average Useful Life (Years)
Customer relationships$96,100 11$16,720 10
Other22,570 82,920 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 endedNine months ended
(in thousands)June 24, 2022June 25, 2021June 24, 2022June 25, 2021
Pro forma net sales$1,096,866 $883,980 $2,992,265 $2,068,169 
Pro forma net income256,356 175,107 696,012 378,795 

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 finalizedcompleted 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 assetassets. 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.

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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: 
Cash437 
Accounts receivable2,163 
Inventories3,355 
Intangible assets18,300 
Fixed assets8,509 
Accounts payable(1,186)
Income taxes(4,293)
Other(240)
Net assets acquired27,045 
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.
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The following table summarizes the fair value of intangible assets as of the acquisition date:

 FRE Composites
(in thousands)Fair ValueWeighted Average Useful Life (Years)
Customer relationships$14,700 12
Other3,600 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.











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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 endedSix months endedThree months endedNine months ended
(in thousands)(in thousands)NoteMarch 25, 2022March 26, 2021March 25, 2022March 26, 2021(in thousands)NoteJune 24, 2022June 25, 2021June 24, 2022June 25, 2021
Interest costInterest cost$739 $682 $1,478 $1,364 Interest cost$739 $682 $2,218 $2,047 
Expected return on plan assetsExpected return on plan assets(1,348)(1,606)(2,696)(3,212)Expected return on plan assets(1,348)(1,606)(4,044)(4,818)
Amortization of actuarial lossAmortization of actuarial loss158 333 316 666 Amortization of actuarial loss158 332 473 995 
Net periodic benefit creditNet periodic benefit credit5$(451)$(591)$(902)$(1,182)Net periodic benefit credit5$(451)$(592)$(1,353)$(1,776)


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5. OTHER INCOME, NET

Other income, net consisted of the following:
Three months endedSix months endedThree months endedNine months ended
(in thousands)(in thousands)March 25, 2022March 26, 2021March 25, 2022March 26, 2021(in thousands)June 24, 2022June 25, 2021June 24, 2022June 25, 2021
Business interruption insurance recoveryBusiness interruption insurance recovery$— $(6,000)$— $(6,000)Business interruption insurance recovery$— $— $— $(6,000)
Undesignated foreign currency derivative instrumentsUndesignated foreign currency derivative instruments(634)793 (810)3,410 Undesignated foreign currency derivative instruments(2,662)377 (3,472)3,786 
Foreign exchange loss (gain) on intercompany loansForeign exchange loss (gain) on intercompany loans278 (711)597 (3,168)Foreign exchange loss (gain) on intercompany loans3,263 (294)3,860 (3,459)
Pension-related benefitsPension-related benefits(451)(591)(902)(1,182)Pension-related benefits(451)(592)(1,352)(1,776)
Gain on purchase of businessGain on purchase of business— (731)— (731)Gain on purchase of business— — — (731)
Other income, netOther income, net$(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 increasedecrease in the current period effective tax rate was primarily driven by a decrease in the excessprior 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 sixnine 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 sixnine 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.
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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 sixnine 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 sixnine 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 Companys participating securities consist of share-based payment awards that contain a non-forfeitable right to
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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 endedSix months endedThree months endedNine months ended
(in thousands, except per share data)(in thousands, except per share data)March 25, 2022March 26, 2021March 25, 2022March 26, 2021(in thousands, except per share data)June 24, 2022June 25, 2021June 24, 2022June 25, 2021
Numerator:Numerator:Numerator:
Net incomeNet 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 securitiesLess: Undistributed earnings allocated to participating securities3,577 2,435 7,256 4,091 Less: Undistributed earnings allocated to participating securities3,883 3,389 11,002 7,483 
Net income available to common shareholdersNet 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 outstandingBasic weighted average common shares outstanding44,700 46,803 45,318 46,858 Basic weighted average common shares outstanding43,072 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 outstandingDiluted weighted average common shares outstanding45,280 47,547 45,906 47,586 Diluted weighted average common shares outstanding43,630 47,286 45,131 47,513 
Basic earnings per shareBasic 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 shareDiluted 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.


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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)$(30,059)
Balance as of March 25, 2022Balance as of March 25, 2022$(19,068)$(13,420)$(32,488)
Other comprehensive loss before reclassificationsOther 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)$(32,488)
Balance as of June 24, 2022Balance as of June 24, 2022$(18,945)$(20,077)$(39,022)

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(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)$(35,241)
Other comprehensive loss before reclassifications— (818)(818)
Balance as of March 26, 2021Balance as of March 26, 2021$(30,237)$(5,560)$(35,797)
Other comprehensive income before reclassificationsOther 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 incomeNet current period other comprehensive income262 2,152 2,414 
Balance as of March 26, 2021$(30,237)$(5,560)$(35,797)
Balance as of June 25, 2021Balance as of June 25, 2021$(29,975)$(3,408)$(33,383)

The following table presents the changes in accumulated other comprehensive loss by component for the sixnine 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, 2021Balance 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 reclassificationsOther 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)$(32,488)
Balance as of June 24, 2022Balance as of June 24, 2022$(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)$(42,554)
Other comprehensive income before reclassifications— 6,233 6,233 
Amounts reclassified from accumulated other
comprehensive income, net of tax
524 — 524 
Net current period other comprehensive income524 6,233 6,757 
Balance as of March 26, 2021$(30,237)$(5,560)$(35,797)
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(in thousands)Defined Benefit
Pension Items
Currency
Translation
Adjustments
Total
Balance as of September 30, 2020$(30,761)$(11,793)$(42,554)
Other comprehensive income before reclassifications— 8,385 8,385 
Amounts reclassified from accumulated other
comprehensive income, net of tax
786 — 786 
Net current period other comprehensive income786 8,385 9,171 
Balance as of June 25, 2021$(29,975)$(3,408)$(33,383)



9. INVENTORIES, NET

A majority of the Companys 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 Companys 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 managements estimates of future inventory levels and costs for the remainder of the current fiscal year.

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(in thousands)(in thousands)March 25, 2022September 30, 2021(in thousands)June 24, 2022September 30, 2021
Purchased materials and manufactured parts, netPurchased materials and manufactured parts, net$126,227 $105,460 Purchased materials and manufactured parts, net$134,531 $105,460 
Work in process, netWork in process, net61,589 35,043 Work in process, net65,436 35,043 
Finished goods, netFinished goods, net223,540 145,486 Finished goods, net244,694 145,486 
Inventories, netInventories, 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.






















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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, 2022September 30, 2021(in thousands)June 24, 2022September 30, 2021
LandLand$22,768 $23,043 Land$26,596 $23,043 
Buildings and related improvementsBuildings and related improvements137,401 136,680 Buildings and related improvements167,290 136,680 
Machinery and equipmentMachinery and equipment386,350 372,503 Machinery and equipment411,808 372,503 
Leasehold improvementsLeasehold improvements10,168 9,720 Leasehold improvements9,769 9,720 
SoftwareSoftware27,988 28,288 Software35,485 28,288 
Construction in progressConstruction in progress60,259 43,055 Construction in progress60,788 43,055 
Property, plant and equipment, at costProperty, plant and equipment, at cost644,934 613,289 Property, plant and equipment, at cost711,736 613,289 
Accumulated depreciationAccumulated depreciation(358,998)(337,667)Accumulated depreciation(368,399)(337,667)
Property, plant and equipment, netProperty, 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 sixnine months ended March 25,June 24, 2022 and March 26,June 25, 2021 totaled $23,110$34,914 and $21,953$33,412 respectively.
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11. GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill are as follows:    

(in thousands)(in thousands)ElectricalSafety & InfrastructureTotal(in thousands)ElectricalSafety & InfrastructureTotal
Balance as of September 30, 2021Balance 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 yearGoodwill acquired during year7,348 6,398 13,746 Goodwill acquired during year76,928 9,495 86,423 
Exchange rate effectsExchange 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, 2022Balance 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.













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

 March 25, 2022September 30, 2021  June 24, 2022September 30, 2021
(in thousands)(in thousands)Weighted Average Useful Life (Years)Gross Carrying ValueAccumulated AmortizationNet Carrying ValueGross Carrying ValueAccumulated AmortizationNet Carrying Value(in thousands)Weighted Average Useful Life (Years)Gross Carrying ValueAccumulated AmortizationNet Carrying ValueGross Carrying ValueAccumulated AmortizationNet Carrying Value
Amortizable intangible assets:Amortizable intangible assets:Amortizable intangible assets:
Customer relationshipsCustomer relationships11$387,626 $(251,093)$136,533 $371,048 $(234,946)$136,102 Customer relationships11$483,965 $(259,167)$224,798 $371,048 $(234,946)$136,102 
OtherOther724,443 (11,627)12,816 23,633 (11,411)12,222 Other744,645 (10,846)33,799 23,633 (11,411)12,222 
TotalTotal412,069 (262,720)149,349 394,681 (246,357)148,324 Total528,610 (270,013)258,597 394,681 (246,357)148,324 
Indefinite-lived intangible assets:Indefinite-lived intangible assets:Indefinite-lived intangible assets:
Trade namesTrade names92,880 — 92,880 92,880 — 92,880 Trade names92,880 — 92,880 92,880 — 92,880 
TotalTotal$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 sixnine 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:

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(in thousands)(in thousands)(in thousands)
Remaining 2022Remaining 2022$18,923 Remaining 2022$14,334 
2023202334,656 202346,402 
2024202429,319 202441,224 
2025202517,310 202529,221 
2026202615,740 202627,200 
2027202714,813 202725,252 
ThereafterThereafter18,588 Thereafter74,964 

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, 2022September 30, 2021(in thousands)June 24, 2022September 30, 2021
Senior Secured Term Loan Facility due May 26, 2028Senior 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 2031Senior Notes due June 2031400,000 400,000 Senior Notes due June 2031400,000 400,000 
Deferred financing costsDeferred financing costs(11,777)(12,709)Deferred financing costs(11,311)(12,709)
Long-term debtLong-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
18


subsidiaries of the Company (other than AII) that are guarantors of the Senior Notes. AIIs 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 contractscontract to hedge the effects of foreign exchange relating to certainone of the Company’s intercompany balances denominated in a foreign currency. TheseThis derivative instruments areinstrument is not formally designated as hedgesa hedge by the Company and the termsremaining term of these instruments range fromthe 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 Companys assets and liabilities measured at fair value:

17


March 25, 2022September 30, 2021June 24, 2022September 30, 2021
(in thousands)(in thousands)Level 1Level 2Level 1Level 2(in thousands)Level 1Level 2Level 1Level 2
AssetsAssetsAssets
Cash equivalentsCash 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 
LiabilitiesLiabilitiesLiabilities
Forward currency contractsForward currency contracts— 221 — 183 Forward currency contracts— 472 — 183 

The Companys 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, 2022September 30, 2021June 24, 2022September 30, 2021
(in thousands)(in thousands)Carrying ValueFair ValueCarrying ValueFair Value(in thousands)Carrying ValueFair ValueCarrying ValueFair Value
Senior Secured Term Loan Facility due May 26, 2028Senior 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 2031Senior Notes due June 2031400,000 372,600 400,000 415,828 Senior Notes due June 2031400,000 340,000 400,000 415,828 
Total DebtTotal 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.




19


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.

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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 Companys business. These matters generally relate to disputes arising out of the use or installation of the Companys 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 Companys business, financial condition, results of operations or cash flows.

20


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 Companys 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 arms-length basis. Gross profit earned and reported within the segment is eliminated in the Companys consolidated results. Certain manufacturing and distribution expenses are allocated between the
19


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 endedThree months ended
March 25, 2022March 26, 2021 June 24, 2022June 25, 2021
(in thousands)(in thousands)External Net SalesIntersegment SalesAdjusted EBITDAExternal Net SalesIntersegment SalesAdjusted EBITDA(in thousands)External Net SalesIntersegment SalesAdjusted EBITDAExternal Net SalesIntersegment SalesAdjusted EBITDA
ElectricalElectrical$758,347 $1,530 $330,970 $486,924 $576 $188,826 Electrical$819,845 $1,721 $351,466 $660,198 $965 $267,824 
Safety & InfrastructureSafety & Infrastructure224,226 59 28,917 152,619 81 16,193 Safety & Infrastructure241,745 164 45,669 193,460 32 22,365 
EliminationsEliminations— (1,589)— (657)Eliminations— (1,885)— (997)
Consolidated operationsConsolidated operations$982,573 $— $639,543 $— Consolidated operations$1,061,590 $— $853,658 $— 

Six months ended
 March 25, 2022March 26, 2021
(in thousands)External Net SalesIntersegment SalesAdjusted EBITDAExternal Net SalesIntersegment SalesAdjusted EBITDA
Electrical$1,398,691 $2,869 $610,517 $873,244 $1,401 $322,099 
Safety & Infrastructure424,683 112 56,349 277,381 84 30,445 
Eliminations— (2,981)— (1,485)
Consolidated operations$1,823,374 $— $1,150,625 $— 
21


Nine months ended
 June 24, 2022June 25, 2021
(in thousands)External Net SalesIntersegment SalesAdjusted EBITDAExternal Net SalesIntersegment SalesAdjusted EBITDA
Electrical$2,218,535 $1,947 $961,983 $1,533,442 $2,366 $589,923 
Safety & Infrastructure666,428 276 102,018 470,841 116 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:

20


Three months endedSix months endedThree months endedNine months ended
(in thousands)(in thousands)March 25, 2022March 26, 2021March 25, 2022March 26, 2021(in thousands)June 24, 2022June 25, 2021June 24, 2022June 25, 2021
Operating segment Adjusted EBITDAOperating segment Adjusted EBITDAOperating segment Adjusted EBITDA
ElectricalElectrical$330,970 $188,826 $610,517 $322,099 Electrical$351,466 $267,824 $961,983 $589,923 
Safety & InfrastructureSafety & Infrastructure28,917 16,193 56,349 30,445 Safety & Infrastructure45,669 22,365 102,018 52,810 
TotalTotal$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 amortizationDepreciation and amortization(19,994)(19,265)(40,040)(38,309)Depreciation and amortization(20,428)(20,166)(60,467)(58,475)
Interest expense, netInterest expense, net(7,514)(8,416)(14,432)(16,670)Interest expense, net(7,243)(8,090)(21,676)(24,760)
Transaction costsTransaction costs(1,708)(287)(3,274)(646)
Loss on extinguishment of debtLoss on extinguishment of debt— (4,202)— (4,202)
Stock-based compensationStock-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 taxesIncome 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.















22


The Companys net sales by geography were as follows for the three months ended and sixnine months ended March 25,June 24, 2022 and March 26,June 25, 2021:

Three months endedSix months endedThree months endedNine months ended
(in thousands)(in thousands)March 25, 2022March 26, 2021March 25, 2022March 26, 2021(in thousands)June 24, 2022June 25, 2021June 24, 2022June 25, 2021
United StatesUnited States$895,585 $572,427 $1,652,983 $1,027,191 United States$961,954 $773,204 $2,614,937 $1,800,395 
Other AmericasOther Americas24,649 12,636 47,136 19,410 Other Americas30,094 15,475 77,230 34,885 
EuropeEurope52,709 43,546 103,162 82,899 Europe56,952 52,126 160,115 135,025 
Asia-PacificAsia-Pacific9,630 10,934 20,093 21,125 Asia-Pacific12,588 12,853 32,681 33,978 
TotalTotal$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 Companys product categories which accounted for 10% or more of consolidated net sales in either period for the three months ended and sixnine months ended March 25,June 24, 2022 and March 26,June 25, 2021:

21


Three months endedSix months endedThree months endedNine months ended
(in thousands)(in thousands)March 25, 2022March 26, 2021March 25, 2022March 26, 2021(in thousands)June 24, 2022June 25, 2021June 24, 2022June 25, 2021
Metal Electrical Conduit and FittingsMetal 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 ConduitElectrical Cable & Flexible Conduit137,244 85,440 252,939 158,952 Electrical Cable & Flexible Conduit142,298 106,645 395,237 265,597 
Plastic Pipe and Conduit374,775 197,139 663,764 337,674 
PVC Pipe and ConduitPVC Pipe and Conduit389,438 270,527 1,053,203 608,201 
Other Electrical productsOther Electrical products93,279 55,940 179,063 103,384 Other Electrical products106,913 82,037 285,973 185,421 
ElectricalElectrical758,347 486,924 1,398,691 873,244 Electrical819,845 660,198 2,218,535 1,533,442 
Mechanical PipeMechanical Pipe112,818 86,480 224,061 151,991 Mechanical Pipe115,156 112,110 339,217 264,101 
Other Safety & Infrastructure productsOther Safety & Infrastructure products111,408 66,139 200,622 125,390 Other Safety & Infrastructure products126,589 81,350 327,211 206,740 
Safety & InfrastructureSafety & Infrastructure224,226 152,619 424,683 277,381 Safety & Infrastructure241,745 193,460 666,428 470,841 
Net salesNet 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 boardCompany 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 Statementsand 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 endedThree months ended
(in thousands)(in thousands)March 25, 2022March 26, 2021Change% Change(in thousands)June 24, 2022June 25, 2021Change% Change
Net salesNet sales$982,573 $639,543 $343,030 53.6 %Net sales$1,061,590 $853,658 $207,932 24.4 %
Cost of salesCost of sales566,157 399,694 166,463 41.6 %Cost of sales607,267 514,385 92,882 18.1 %
Gross profitGross profit416,416 239,849 176,567 73.6 %Gross profit454,323 339,273 115,050 33.9 %
Selling, general and administrativeSelling, general and administrative88,918 67,340 21,578 32.0 %Selling, general and administrative95,952 81,832 14,120 17.3 %
Intangible asset amortizationIntangible asset amortization8,701 8,096 605 7.5 %Intangible asset amortization8,624 8,707 (83)(1.0)%
Operating incomeOperating income318,797 164,413 154,384 93.9 %Operating income349,747 248,734 101,013 40.6 %
Interest expense, netInterest expense, net7,514 8,416 (902)(10.7)%Interest expense, net7,243 8,090 (847)(10.5)%
Loss on extinguishment of debtLoss on extinguishment of debt— 4,202 (4,202)100.0 %
Other income, netOther income, net(807)(7,240)6,433 (88.9)%Other income, net150 (509)659 (129.5)%
Income before income taxesIncome before income taxes312,090 163,237 148,853 91.2 %Income before income taxes342,354 236,951 105,403 44.5 %
Income tax expenseIncome tax expense78,613 38,304 40,309 105.2 %Income tax expense88,041 61,654 26,387 42.8 %
Net incomeNet 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 prices52.928.6 %
Foreign exchange(0.4)(0.8)%
Acquisitions2.31.6 %
Other0.1 %
Net sales53.624.4 %
    
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 plasticPVC 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 costs37.919.1 %
Foreign exchange(0.8)(2.3)%
Acquisitions2.51.8 %
Other3.93.1 %
Cost of sales41.618.1 %

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 increaseThese 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 increasedremained relatively flat at $8.6 million for the three months ended June 24, 2022 compared to $8.7 million for the three months ended MarchJune 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
25


primarily due to interest expense being derived from a lower average principal balance resulting from the Company’s fiscal 2021 debt restructuring transactions.
24



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 Companys income tax rate increaseddecreased 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 increasedecrease in the current period effective tax rate was primarily driven by a decrease in the excessprior 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

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. We define segment Adjusted EBITDA margin as segment Adjusted EBITDA as a percentage of segment Net sales.
        
Electrical
Three months endedThree months ended
(in thousands)(in thousands)March 25, 2022March 26, 2021Change% Change(in thousands)June 24, 2022June 25, 2021Change% Change
Net salesNet sales$759,877 $487,500 $272,377 55.9 %Net sales$821,566 $661,163 $160,403 24.3 %
Adjusted EBITDAAdjusted EBITDA$330,970 $188,826 $142,144 75.3 %Adjusted EBITDA$351,466 $267,824 $83,642 31.2 %
Adjusted EBITDA marginAdjusted EBITDA margin43.6 %38.7 %Adjusted EBITDA margin42.8 %40.5 %












26


Net sales
% Change
Volume0.1 (6.2)%
Average selling prices54.130.3 %
Foreign exchange(0.6)(1.0)%
Acquisitions1.91.0 %
Other0.40.2 %
Net sales55.924.3 %

25



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 plasticPVC 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 endedThree months ended
(in thousands)(in thousands)March 25, 2022March 26, 2021Change% Change(in thousands)June 24, 2022June 25, 2021Change% Change
Net salesNet sales$224,285 $152,700 $71,585 46.9 %Net sales$241,909 $193,492 $48,417 25.0 %
Adjusted EBITDAAdjusted EBITDA$28,917 $16,193 $12,724 78.6 %Adjusted EBITDA$45,669 $22,365 $23,304 104.2 %
Adjusted EBITDA marginAdjusted EBITDA margin12.9 %10.6 %Adjusted EBITDA margin18.9 %11.6 %
    
    
Net sales
% Change
Volume(5.9)(1.4)%
Average selling prices49.322.7 %
Acquisitions3.53.6 %
Other0.1 %
Net sales46.925.0 %

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 pipeacross various steel product line.categories.




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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 sixnine months ended March 25,June 24, 2022 and March 26,June 25, 2021 were as follows:
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Six months endedNine months ended
(in thousands)(in thousands)March 25, 2022March 26, 2021Change% Change(in thousands)June 24, 2022June 25, 2021Change% Change
Net salesNet 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 salesCost of sales1,052,150 721,585 330,565 45.8 %Cost of sales1,659,416 1,235,970 423,446 34.3 %
Gross profitGross profit771,224 429,040 342,184 79.8 %Gross profit1,225,547 768,313 457,234 59.5 %
Selling, general and administrativeSelling, general and administrative167,069 128,418 38,651 30.1 %Selling, general and administrative263,020 210,250 52,770 25.1 %
Intangible asset amortizationIntangible asset amortization16,930 16,356 574 3.5 %Intangible asset amortization25,554 25,063 491 2.0 %
Operating incomeOperating income587,225 284,266 302,959 106.6 %Operating income936,973 533,000 403,973 75.8 %
Interest expense, netInterest expense, net14,432 16,670 (2,238)(13.4)%Interest expense, net21,676 24,760 (3,084)(12.5)%
Loss on extinguishment of debtLoss on extinguishment of debt— 4,202 (4,202)100.0 %
Other income, netOther income, net(1,115)(7,671)6,556 (85.5)%Other income, net(964)(8,180)7,216 (88.2)%
Income before income taxesIncome before income taxes573,908 275,267 298,641 108.5 %Income before income taxes916,261 512,218 404,043 78.9 %
Income tax expenseIncome tax expense135,588 65,268 70,320 107.7 %Income tax expense223,630 126,922 96,708 76.2 %
Net incomeNet 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 prices61.547.4 %
Foreign exchange(0.1)(0.4)%
Acquisitions2.21.9 %
Other0.1 %
Net sales58.543.9 %

Net sales increased by $672.7$880.7 million, or 58.5%43.9%, to $1,823.4$2,885.0 million for the sixnine months ended March 25,June 24, 2022, compared to $1,150.6$2,004.3 million for the sixnine 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 plasticPVC 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.







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Cost of sales

% Change
Volume(5.6)(4.8)%
Average input costs44.633.6 %
Foreign exchange(0.2)(0.7)%
Acquisitions2.22.0 %
Other4.84.2 %
Cost of sales45.834.3 %

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 sixnine months ended March 25,June 24, 2022 compared to $721.6$1,236.0 million for the sixnine 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
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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 sixnine months ended March 25,June 24, 2022 compared to $128.4$210.3 million for the sixnine 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 sixnine months ended March 25,June 24, 2022 compared to $16.4$25.1 million for the sixnine 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 sixnine months ended March 25,June 24, 2022 compared to $16.7$24.8 million for the sixnine months ended March 26,June 25, 2021. The decrease is primarily due to the Companys 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 sixnine months ended March 25,June 24, 2022 compared to $7.7$8.2 million for the sixnine 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 Companys income tax rate decreased to 23.6%24.4% for the sixnine months ended March 25,June 24, 2022 compared to 23.7%24.8% for the sixnine 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.
    


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SEGMENT RESULTS

Electrical
Six months endedNine months ended
(in thousands)(in thousands)March 25, 2022March 26, 2021Change% Change(in thousands)June 24, 2022June 25, 2021Change% Change
Net salesNet sales$1,401,560 $874,645 $526,915 60.2 %Net sales$2,220,482 $1,535,808 $684,674 44.6 %
Adjusted EBITDAAdjusted EBITDA$610,517 $322,099 $288,418 89.5 %Adjusted EBITDA$961,983 $589,923 $372,060 63.1 %
Adjusted EBITDA marginAdjusted EBITDA margin43.6 %36.8 %Adjusted EBITDA margin43.3 %38.4 %

Net sales
% Change
Volume(2.6)(4.1)%
Average selling prices60.547.5 %
Foreign exchange(0.2)(0.5)%
Acquisitions2.31.7 %
Other0.2 %
Net sales60.244.6 %
    

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Net sales increased by $526.9$684.7 million, or 60.2%44.6%, to $1,401.6$2,220.5 million for the sixnine months ended March 25,June 24, 2022 compared to $874.6$1,535.8 million for the sixnine 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 plasticPVC 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 sixnine 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 sixnine months ended March 26,June 25, 2021. Adjusted EBITDA margins increased to 43.6%43.3% for the sixnine months ended March 25,June 24, 2022 compared to 36.8%38.4% for the sixnine 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 endedNine months ended
(in thousands)(in thousands)March 25, 2022March 26, 2021Change% Change(in thousands)June 24, 2022June 25, 2021Change% Change
Net salesNet sales$424,795 $277,465 $147,330 53.1 %Net sales$666,704 $470,957 $195,747 41.6 %
Adjusted EBITDAAdjusted EBITDA$56,349 $30,445 $25,904 85.1 %Adjusted EBITDA$102,018 $52,810 $49,208 93.2 %
Adjusted EBITDA marginAdjusted EBITDA margin13.3 %11.0 %Adjusted EBITDA margin15.3 %11.2 %
    









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Net sales

Change (%)
Volume(13.1)(8.3)%
Average selling prices64.347.0 %
Acquisitions2.02.7 %
Other(0.1)0.2 %
Net sales53.141.6 %

Net sales increased by $147.3$195.7 million, or 53.1%41.6%, for the sixnine months ended March 25,June 24, 2022 to $424.8$666.7 million compared to $277.5$471.0 million for the sixnine 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 pipeacross 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 sixnine months ended March 25,June 24, 2022 compared to $30.4$52.8 million for the sixnine months ended March 26,June 25, 2021. Adjusted EBITDA margins increased to 13.3%15.3% for the sixnine months ended March 25,June 24, 2022 compared to 11.0%11.2% for the sixnine 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 Companys intention to permanently reinvest such income were to change and cash was repatriated to the United States.

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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.

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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:
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Six months endedNine months ended
(in thousands)(in thousands)March 25, 2022March 26, 2021(in thousands)June 24, 2022June 25, 2021
Cash flows provided by (used in):Cash flows provided by (used in):Cash flows provided by (used in):
Operating activitiesOperating activities$161,159 $153,246 Operating activities$371,776 $318,621 
Investing activitiesInvesting activities(60,799)(60,935)Investing activities(336,693)(74,303)
Financing activitiesFinancing activities(285,572)(75,404)Financing activities(421,241)(135,412)
    
Operating activities
    
During the sixnine 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 sixnine 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 sixnine 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 sixnine months ended March 26,June 25, 2021. Investing activitiesCash used in both periods were primarily related to the acquisitions of Sasco and Four Starincreased in fiscal 2022 and Queen City and FRE Compositesby $212.2 million primarily as a result of the acquisition of United Poly in the third quarter of fiscal 2021, as well as consistent levels2022. The remaining increase in cash used in investing activities was driven by $47.7 million of additional capital expenditures in both periods.expenditures.
    


32


Financing Activities
    
During the sixnine 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 sixnine 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 sixnine 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.
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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;
33


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;
32


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
34


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
33


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.

3435


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 Companys 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 Companys 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 PurchasedAvg Price Paid Per ShareTotal Number of Shares Purchased as Part of Publicly Announced ProgramMaximum Value of Shares that May Yet Be Purchased Under the Program
December 25, 2021 to January 21, 2022271 $107.27 271 $266,418 
January 22, 2022 to February 25, 2022729 $100.57 729 $193,103 
February 26, 2022 to March 25, 2022539 $100.49 539 $138,917 
Total1,539 1,539 
Period
(4-5-4 calendar)
Total Number Of Shares PurchasedAvg Price Paid Per ShareTotal Number of Shares Purchased as Part of Publicly Announced ProgramMaximum Value of Shares that May Yet Be Purchased Under the Program
March 26, 2022 to April 22, 2022708 $95.32 708 $71,479 
April 23, 2022 to May 27, 2022388 $102.63 388 $431,642 
May 28, 2022 to June 24, 2022278 $102.33 278 $403,206 
Total1,374 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#
31.2#
32.1#
32.2#
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

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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, 2022By:/s/ David P. Johnson
Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
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