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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, 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-20220325_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 April 28, 2022, there were 43,114,175 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 ended
(in thousands, except per share data)NoteMarch 25, 2022March 26, 2021March 25, 2022March 26, 2021
Net sales$982,573 $639,543 $1,823,374 $1,150,625 
Cost of sales566,157 399,694 1,052,150 721,585 
Gross profit416,416 239,849 771,224 429,040 
Selling, general and administrative88,918 67,340 167,069 128,418 
Intangible asset amortization118,701 8,096 16,930 16,356 
Operating income318,797 164,413 587,225 284,266 
Interest expense, net7,514 8,416 14,432 16,670 
Other income, net 5(807)(7,240)(1,115)(7,671)
Income before income taxes312,090 163,237 573,908 275,267 
Income tax expense678,613 38,304 135,588 65,268 
Net income$233,477 $124,933 $438,320 $209,999 
Net income per share
Basic7$5.14 $2.62 $9.51 $4.39 
Diluted7$5.08 $2.58 $9.39 $4.33 
 
See Notes to unaudited condensed consolidated financial statements.


2


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

Three months endedSix months ended
(in thousands)NoteMarch 25, 2022March 26, 2021March 25, 2022March 26, 2021
Net income$233,477 $124,933 $438,320 $209,999 
Other comprehensive (loss) income, net of tax:
Change in foreign currency translation adjustment(2,554)(818)(4,012)6,233 
Change in unrecognized loss related to pension benefit plans4125 262 250 524 
Total other comprehensive (loss) income8(2,429)(556)(3,762)6,757 
Comprehensive income $231,048 $124,377 $434,558 $216,756 
See Notes to unaudited condensed consolidated financial statements.


3


ATKORE INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share data)NoteMarch 25, 2022September 30, 2021
Assets
Current Assets:
Cash and cash equivalents$390,399 $576,289 
Accounts receivable, less allowance for current and expected credit losses of $3,503 and $2,510, respectively
623,361 524,926 
Inventories, net9411,356 285,989 
Prepaid expenses and other current assets64,924 34,248 
Total current assets1,490,040 1,421,452 
Property, plant and equipment, net10285,936 275,622 
Intangible assets, net11242,229 241,204 
Goodwill11212,167 199,048 
Right-of-use assets, net37,757 41,113 
Deferred tax assets633,970 29,693 
Other long-term assets2,021 1,967 
Total Assets$2,304,120 $2,210,099 
Liabilities and Equity
Current Liabilities:
Accounts payable269,830 243,164 
Income tax payable10,741 72,953 
Accrued compensation and employee benefits37,061 57,437 
Customer liabilities66,138 80,324 
Lease obligations11,327 11,785 
Other current liabilities63,179 59,273 
Total current liabilities458,276 524,936 
Long-term debt12759,461 758,386 
Long-term lease obligations27,392 30,236 
Deferred tax liabilities618,566 16,746 
Pension liabilities2,515 3,819 
Other long-term liabilities14,636 11,240 
Total Liabilities1,280,846 1,345,363 
Equity:
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 43,879,446 and 45,997,159 shares issued and outstanding, respectively
440 461 
Treasury stock, held at cost, 290,600 and 290,600 shares, respectively
(2,580)(2,580)
Additional paid-in capital492,070 506,921 
Retained earnings565,832 388,660 
Accumulated other comprehensive loss8(32,488)(28,726)
Total Equity1,023,274 864,736 
Total Liabilities and Equity$2,304,120 $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



See Notes to unaudited condensed consolidated financial statements.


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

Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTotal Equity
(in thousands)SharesAmountAmount
Balance as of September 30, 202145,997 $461 $(2,580)$506,921 $388,660 $(28,726)$864,736 
Net income— — — — 204,843 — 204,843 
Other comprehensive loss— — — — — (1,333)(1,333)
Stock-based compensation— — — 3,427 — — 3,427 
Issuance of common stock, net of shares withheld for tax355 4 — (24,509)— — (24,505)
Repurchase of common stock(958)(10)— (104,537)— (104,547)
Balance as of December 24, 202145,394 $455 $(2,580)$485,839 $488,966 $(30,059)$942,621 
Net income— — — — 233,477 — 233,477 
Other comprehensive (loss)— — — — — (2,429)(2,429)
Stock-based compensation— — — 6,128 — — 6,128 
Issuance of common stock, net of shares withheld for tax24 — — 103 — — 103 
Repurchase of common stock(1,539)(15)— — (156,611)— (156,626)
Balance as of March 25, 202243,879 $440 $(2,580)$492,070 $565,832 $(32,488)$1,023,274 


6


Common StockTreasury StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive LossTotal Equity
(in thousands)SharesAmountAmount
Balance as of September 30, 202047,407 $475 $(2,580)$487,223 $(64,154)$(42,554)$378,410 
Net income— — — — 85,066 — 85,066 
Other comprehensive income— — — — — 7,313 7,313 
Stock-based compensation— — — 5,522 — — 5,522 
Issuance of common stock, net of shares withheld for tax358 3 — (3,930)— — (3,927)
Repurchase of common stock(1,140)(11)— — (35,026)— (35,037)
Balance as of December 25, 202046,625 $467 $(2,580)$488,815 $(14,114)$(35,241)$437,347 
Net income— — — — 124,933 — 124,933 
Other comprehensive (loss)— — — — — (556)(556)
Stock-based compensation— — — 4,868 — — 4,868 
Issuance of common stock, net of shares withheld for tax358 4 — 3,566 — — 3,570 
Balance as of March 26, 202146,983 $471 $(2,580)$497,249 $110,819 $(35,797)$570,162 



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 December 21, 2021, Atkore HDPE, LLC and Allied Tube and Conduit Corporation, wholly-owned subsidiaries of the Company acquired the assets of Four Star Industries LLC (“Four Star”), for a purchase price of $23,195. Four Star is a manufacturer of high density polyethylene (HDPE) conduit, primarily serving the telecommunications, utility, infrastructure and datacom markets. As a result of the 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 as the Company is finalizing working capital, intangible asset and fixed asset fair values.

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, of which $12,903 was paid at closing and additional purchase price payable of $2,864 was accrued. Sasco is a Canadian manufacturer of metal framing and related products serving the electrical, mechanical, construction and solar industries. As a result of the acquisition, the 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, the purchase price allocation has not been finalized as the Company is finalizing working capital, intangible asset and fixed asset fair values.

Fiscal 2021

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

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

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

The purchase price for FRE Composites, which was finalized during the fourth quarter of fiscal 2021, was allocated to tangible and intangible assets acquired and liabilities assumed, based on their fair values. The 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.
10



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.

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 ended
(in thousands)NoteMarch 25, 2022March 26, 2021March 25, 2022March 26, 2021
Interest cost$739 $682 $1,478 $1,364 
Expected return on plan assets(1,348)(1,606)(2,696)(3,212)
Amortization of actuarial loss158 333 316 666 
Net periodic benefit credit5$(451)$(591)$(902)$(1,182)


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5. OTHER INCOME, NET

Other income, net consisted of the following:
Three months endedSix months ended
(in thousands)March 25, 2022March 26, 2021March 25, 2022March 26, 2021
Business interruption insurance recovery$ $(6,000)$ $(6,000)
Undesignated foreign currency derivative instruments (634)793 (810)3,410 
Foreign exchange loss (gain) on intercompany loans278 (711)597 (3,168)
Pension-related benefits(451)(591)(902)(1,182)
Gain on purchase of business (731) (731)
Other income, net $(807)$(7,240)$(1,115)$(7,671)


6. INCOME TAXES    

For the three months ended March 25, 2022 and March 26, 2021, the Company’s effective tax rate attributable to income before income taxes was 25.2% and 23.5%, respectively. For the three months ended March 25, 2022 and March 26, 2021, the Company’s income tax expense was $78,613 and $38,304 respectively. The increase in the current period effective tax rate was primarily driven by a decrease in the excess tax benefit associated with stock compensation.

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

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

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

For the six months ended March 25, 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
12


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 ended
(in thousands, except per share data)March 25, 2022March 26, 2021March 25, 2022March 26, 2021
Numerator:
Net income$233,477 $124,933 $438,320 $209,999 
Less: Undistributed earnings allocated to participating securities3,577 2,435 7,256 4,091 
Net income available to common shareholders$229,900 $122,498 $431,064 $205,908 
Denominator:
Basic weighted average common shares outstanding44,700 46,803 45,318 46,858 
Effect of dilutive securities: Non-participating employee stock options (1)
580 744 588 728 
Diluted weighted average common shares outstanding45,280 47,547 45,906 47,586 
Basic earnings per share$5.14 $2.62 $9.51 $4.39 
Diluted earnings per share$5.08 $2.58 $9.39 $4.33 
(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.

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, 2022 and March 26, 2021.

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

13


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

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


(in thousands)Defined Benefit
Pension Items
Currency
Translation
Adjustments
Total
Balance as of September 30, 2021$(19,318)$(9,408)$(28,726)
Other comprehensive loss before reclassifications (4,012)(4,012)
Amounts reclassified from accumulated other
comprehensive income, net of tax
250  250 
Net current period other comprehensive income (loss)250 (4,012)(3,762)
Balance as of March 25, 2022$(19,068)$(13,420)$(32,488)

(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)


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, 2022 and September 30, 2021, respectively. Interim LIFO determinations, including those at March 25, 2022, are based on managements estimates of future inventory levels and costs for the remainder of the current fiscal year.

14


(in thousands)March 25, 2022September 30, 2021
Purchased materials and manufactured parts, net$126,227 $105,460 
Work in process, net61,589 35,043 
Finished goods, net223,540 145,486 
Inventories, net$411,356 $285,989 

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

10. PROPERTY, PLANT AND EQUIPMENT

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

(in thousands)March 25, 2022September 30, 2021
Land$22,768 $23,043 
Buildings and related improvements137,401 136,680 
Machinery and equipment386,350 372,503 
Leasehold improvements10,168 9,720 
Software27,988 28,288 
Construction in progress60,259 43,055 
Property, plant and equipment, at cost644,934 613,289 
Accumulated depreciation(358,998)(337,667)
Property, plant and equipment, net$285,936 $275,622 

Depreciation expense for the three months ended March 25, 2022 and March 26, 2021 totaled $11,293 and $11,170 respectively. Depreciation expense for the six months ended March 25, 2022 and March 26, 2021 totaled $23,110 and $21,953 respectively.
15


11. GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill are as follows:    

(in thousands)ElectricalSafety & InfrastructureTotal
Balance as of September 30, 2021$155,471 $43,577 $199,048 
Goodwill acquired during year7,348 6,398 13,746 
Exchange rate effects(822)195 (627)
Balance as of March 25, 2022$161,997 $50,170 $212,167 
    
Goodwill balances as of September 30, 2021 and March 25, 2022 include $3,924 and $43,000 of accumulated impairment losses within the Electrical and Safety & Infrastructure segments, respectively.

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

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

  March 25, 2022September 30, 2021
(in thousands)Weighted Average Useful Life (Years)Gross Carrying ValueAccumulated AmortizationNet Carrying ValueGross Carrying ValueAccumulated AmortizationNet Carrying Value
Amortizable intangible assets:
Customer relationships11$387,626 $(251,093)$136,533 $371,048 $(234,946)$136,102 
Other724,443 (11,627)12,816 23,633 (11,411)12,222 
Total412,069 (262,720)149,349 394,681 (246,357)148,324 
Indefinite-lived intangible assets:
Trade names92,880 — 92,880 92,880 — 92,880 
Total$504,949 $(262,720)$242,229 $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, 2022 and March 26, 2021 was $8,701 and $8,096, respectively. Amortization expense for the six months ended March 25, 2022 and March 26, 2021 was $16,930 and $16,356, respectively. Expected amortization expense for intangible assets for the remainder of fiscal 2022 and over the next five years and thereafter is as follows:

16


(in thousands)
Remaining 2022$18,923 
202334,656 
202429,319 
202517,310 
202615,740 
202714,813 
Thereafter18,588 

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, 2022 and September 30, 2021 was as follows:

(in thousands)March 25, 2022September 30, 2021
Senior Secured Term Loan Facility due May 26, 2028$371,238 $371,095 
Senior Notes due June 2031400,000 400,000 
Deferred financing costs(11,777)(12,709)
Long-term debt$759,461