x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 90-0631463 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
Large accelerated filer | o | Accelerated filer | o | |||
Non-accelerated filer | x (Do not check if a smaller reporting company) | Smaller reporting company | o |
Page No. | |
PART I. FINANCIAL INFORMATION | |
Item 1. Financial Statements (Unaudited) | |
Item 1. Legal Proceedings | |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | |
Item 3. Defaults Upon Senior Securities | |
Item 4. Mine Safety Disclosures | |
Item 5. Other Information | |
Item 6. Exhibits | |
(in thousands, except per share data) | Three Months Ended | Nine Months Ended | |||||||||||||
June 24, 2016 | June 26, 2015 | June 24, 2016 | June 26, 2015 | ||||||||||||
Net sales | $ | 395,724 | $ | 432,367 | $ | 1,107,145 | $ | 1,291,354 | |||||||
Cost of sales | 284,203 | 353,619 | 831,805 | 1,089,395 | |||||||||||
Gross profit | 111,521 | 78,748 | 275,340 | 201,959 | |||||||||||
Selling, general and administrative | 64,392 | 45,912 | 162,412 | 130,691 | |||||||||||
Intangible asset amortization | 5,566 | 5,249 | 16,655 | 15,775 | |||||||||||
Operating income | 41,563 | 27,587 | 96,273 | 55,493 | |||||||||||
Interest expense, net | 10,169 | 11,212 | 30,617 | 33,624 | |||||||||||
Gain on extinguishment of debt | — | — | (1,661 | ) | — | ||||||||||
Income from operations before income taxes | 31,394 | 16,375 | 67,317 | 21,869 | |||||||||||
Income tax expense (benefit) | 10,749 | (2,683 | ) | 24,093 | (227 | ) | |||||||||
Net income | $ | 20,645 | $ | 19,058 | $ | 43,224 | $ | 22,096 | |||||||
Weighted Average Common Shares Outstanding | |||||||||||||||
Basic and Diluted | 62,492 | 62,513 | 62,491 | 62,528 | |||||||||||
Net income per share | |||||||||||||||
Basic and Diluted | $ | 0.33 | $ | 0.30 | $ | 0.69 | $ | 0.35 | |||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
(in thousands) | June 24, 2016 | June 26, 2015 | June 24, 2016 | June 26, 2015 | ||||||||||||
Net income | $ | 20,645 | $ | 19,058 | $ | 43,224 | $ | 22,096 | ||||||||
Other comprehensive income: | ||||||||||||||||
Change in foreign currency translation adjustment | (155 | ) | 247 | (216 | ) | (4,487 | ) | |||||||||
Change in unrecognized loss related to pension benefit plans (See Note 10) | 180 | 22 | 541 | 66 | ||||||||||||
Total other comprehensive income (loss) | 25 | 269 | 325 | (4,421 | ) | |||||||||||
Comprehensive income | $ | 20,670 | $ | 19,327 | $ | 43,549 | $ | 17,675 |
(in thousands, except share and per share data) | June 24, 2016 | September 25, 2015 | |||||
Assets | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 131,109 | $ | 80,598 | |||
Accounts receivable, less allowance for doubtful accounts of $1,301 and $1,173, respectively | 235,812 | 216,992 | |||||
Inventories, net (see Note 4) | 164,302 | 161,924 | |||||
Assets held for sale (see Note 17) | 8,474 | 3,313 | |||||
Prepaid expenses and other current assets | 18,098 | 18,665 | |||||
Total current assets | 557,795 | 481,492 | |||||
Property, plant and equipment, net (see Note 5) | 209,248 | 224,284 | |||||
Intangible assets, net (see Note 6) | 260,520 | 277,175 | |||||
Goodwill (see Note 6) | 115,829 | 115,829 | |||||
Deferred income taxes | 2,307 | 1,087 | |||||
Non-trade receivables | 14,517 | 13,932 | |||||
Total Assets | $ | 1,160,216 | $ | 1,113,799 | |||
Liabilities and Equity | |||||||
Current Liabilities: | |||||||
Short-term debt and current maturities of long-term debt (see Note 8) | $ | 1,267 | $ | 2,864 | |||
Accounts payable | 112,095 | 109,847 | |||||
Income tax payable | 5,390 | 515 | |||||
Accrued and other current liabilities (see Note 7) | 92,317 | 97,272 | |||||
Total current liabilities | 211,069 | 210,498 | |||||
Long-term debt (see Note 8) | 630,204 | 649,344 | |||||
Deferred income taxes | 18,749 | 14,557 | |||||
Other long-term tax liabilities | 13,235 | 13,319 | |||||
Pension liabilities | 27,592 | 28,126 | |||||
Other long-term liabilities | 59,489 | 41,678 | |||||
Total Liabilities | 960,338 | 957,522 | |||||
Equity: | |||||||
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 62,458,367 and 62,453,437 shares issued and outstanding, respectively | 626 | 626 | |||||
Treasury stock, held at cost, 260,900 and 260,900 shares, respectively | (2,580 | ) | (2,580 | ) | |||
Additional paid-in capital | 352,557 | 352,505 | |||||
Accumulated deficit | (130,017 | ) | (173,241 | ) | |||
Accumulated other comprehensive loss | (20,708 | ) | (21,033 | ) | |||
Total Equity | 199,878 | 156,277 | |||||
Total Liabilities and Equity | $ | 1,160,216 | $ | 1,113,799 |
Nine months ended | |||||||
(in thousands) | June 24, 2016 | June 26, 2015 | |||||
Operating activities: | |||||||
Net income | $ | 43,224 | $ | 22,096 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Loss on sale of fixed assets | 12 | 1,054 | |||||
Depreciation and amortization | 40,064 | 43,373 | |||||
Amortization of debt issuance costs and original issue discount | 2,644 | 2,722 | |||||
Deferred income taxes | 2,951 | (481 | ) | ||||
Gain on extinguishment of debt | (1,661 | ) | — | ||||
Provision for losses on accounts receivable and inventory | 2,718 | 574 | |||||
Stock-based compensation expense | 16,897 | 2,462 | |||||
Other adjustments to net income | (648 | ) | — | ||||
Changes in operating assets and liabilities, net of effects from acquisitions | (21,183 | ) | (41,577 | ) | |||
Net cash provided by operating activities | 85,018 | 30,223 | |||||
Investing activities: | |||||||
Capital expenditures | (13,496 | ) | (20,555 | ) | |||
Proceeds from sale of properties and equipment | 62 | 23 | |||||
Acquisitions of businesses, net of cash acquired | — | (31,290 | ) | ||||
Proceeds from sale of other assets | 458 | 2,300 | |||||
Proceeds from sale of a discontinued operation | — | 4,540 | |||||
Other, net | — | (192 | ) | ||||
Net cash used for investing activities | (12,976 | ) | (45,174 | ) | |||
Financing activities: | |||||||
Borrowings under credit facility | — | 589,000 | |||||
Repayments under credit facility | — | (570,000 | ) | ||||
Proceeds from short-term debt | — | 1,692 | |||||
Repayments of short-term debt | (1,619 | ) | (1,619 | ) | |||
Repayments of long-term debt | (20,075 | ) | (3,150 | ) | |||
Issuance of common shares | 52 | — | |||||
Payment for debt financing costs and fees | — | (102 | ) | ||||
Proceeds from foreign exchange forward option | — | 999 | |||||
Other, net | (25 | ) | (544 | ) | |||
Net cash (used for) provided by financing activities | (21,667 | ) | 16,276 | ||||
Effects of foreign exchange rate changes on cash and cash equivalents | 136 | (1,846 | ) | ||||
Increase (decrease) in cash and cash equivalents | 50,511 | (521 | ) | ||||
Cash and cash equivalents at beginning of period | 80,598 | 33,360 | |||||
Cash and cash equivalents at end of period | $ | 131,109 | $ | 32,839 | |||
Supplementary Cash Flow information | |||||||
Interest paid | $ | 30,232 | $ | 31,003 | |||
Income taxes paid, net of refunds | 16,036 | 3,718 | |||||
Capital expenditures, not yet paid | 406 | 738 |
(in thousands) | APPI | SCI | |||||
Fair value of consideration transferred: | |||||||
Cash consideration | $ | 6,572 | $ | 23,837 | |||
Fair value of assets acquired and liabilities assumed: | |||||||
Accounts receivable | 1,813 | 4,302 | |||||
Inventories | 1,850 | 5,500 | |||||
Intangible assets | 480 | 10,600 | |||||
Fixed assets | 2,907 | 46 | |||||
Accounts payable | (1,057 | ) | (690 | ) | |||
Other | (808 | ) | 155 | ||||
Net assets acquired | 5,185 | 19,913 | |||||
Excess purchase price attributed to goodwill acquired | $ | 1,387 | $ | 3,924 |
($ in thousands) | APPI | SCI | ||||||||||
Fair Value | Weighted Average Useful Life (Years) | Fair Value | Weighted Average Useful Life (Years) | |||||||||
Amortizable intangible assets: | ||||||||||||
Customer relationships | $ | 300 | 10 | $ | 7,900 | 8 | ||||||
Other | 180 | 4 | 2,700 | 14 | ||||||||
Total amortizable intangible assets | $ | 480 | $ | 10,600 |
(in thousands) | June 24, 2016 | September 25, 2015 | |||||
Land | $ | 12,804 | $ | 13,294 | |||
Buildings and related improvements | 103,215 | 104,315 | |||||
Machinery and equipment | 237,964 | 231,237 | |||||
Leasehold improvements | 5,850 | 5,572 | |||||
Construction in progress | 12,176 | 10,582 | |||||
Property, plant and equipment | 372,009 | 365,000 | |||||
Accumulated depreciation | (162,761 | ) | (140,716 | ) | |||
Property, plant and equipment, net | $ | 209,248 | $ | 224,284 |
Segment | |||||||||||
(in thousands) | Electrical Raceway | Mechanical Products & Solutions | Total | ||||||||
Balance at June 24, 2016 | |||||||||||
Goodwill | $ | 80,564 | $ | 82,189 | $ | 162,753 | |||||
Accumulated impairment losses | (3,924 | ) | (43,000 | ) | (46,924 | ) | |||||
$ | 76,640 | $ | 39,189 | $ | 115,829 |
June 24, 2016 | September 25, 2015 | ||||||||||||||||||||||||
($ in thousands) | Weighted Average Useful Life (Years) | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | ||||||||||||||||||
Amortizable Intangible Assets: | |||||||||||||||||||||||||
Customer Relationships | 13 | $ | 249,245 | $ | (92,368 | ) | $ | 156,877 | $ | 249,245 | $ | (77,112 | ) | $ | 172,133 | ||||||||||
Other | 7 | 16,943 | (7,180 | ) | 9,763 | 16,943 | (5,781 | ) | 11,162 | ||||||||||||||||
Total | 266,188 | (99,548 | ) | 166,640 | 266,188 | (82,893 | ) | 183,295 | |||||||||||||||||
Indefinite-lived Intangible Assets: | |||||||||||||||||||||||||
Trade names | 93,880 | — | 93,880 | 93,880 | — | 93,880 | |||||||||||||||||||
Total | $ | 360,068 | $ | (99,548 | ) | $ | 260,520 | $ | 360,068 | $ | (82,893 | ) | $ | 277,175 |
Remaining in 2016 | $ | 5,509 | |
2017 | 21,736 | ||
2018 | 21,337 | ||
2019 | 21,181 | ||
2020 | 21,125 | ||
2021 | 20,528 | ||
Thereafter | 55,224 |
(in thousands) | June 24, 2016 | September 25, 2015 | |||||
Accrued compensation and employee benefits | $ | 29,097 | $ | 31,146 | |||
Accrued transportation costs | 12,991 | 13,627 | |||||
Accrued interest | 8,622 | 9,890 | |||||
Deferred gain on sale of investment | 9,088 | 9,121 | |||||
Product liability | 2,700 | 2,700 | |||||
Accrued professional services | 7,432 | 6,535 | |||||
Accrued restructuring | 709 | 4,413 | |||||
Other | 21,678 | 19,840 | |||||
Accrued and other current liabilities | $ | 92,317 | $ | 97,272 |
(in thousands) | June 24, 2016 | September 25, 2015 | |||||
First lien loan due April 9, 2021 | $ | 411,225 | $ | 414,150 | |||
Second lien loan due October 9, 2021 | 229,383 | 248,036 | |||||
Deferred financing costs | (9,137 | ) | (11,622 | ) | |||
Other | — | 1,644 | |||||
Total debt | $ | 631,471 | $ | 652,208 | |||
Less: Current portion | 1,267 | 2,864 | |||||
Long-term debt | $ | 630,204 | $ | 649,344 |
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands) | June 24, 2016 | June 26, 2015 | June 24, 2016 | June 26, 2015 | |||||||||||
Service cost | $ | 474 | $ | 627 | $ | 1,420 | $ | 1,882 | |||||||
Interest cost | 1,036 | 1,196 | 3,107 | 3,588 | |||||||||||
Expected return on plan assets | (1,580 | ) | (1,701 | ) | (4,738 | ) | (5,102 | ) | |||||||
Amortization of actuarial loss | 180 | 22 | 541 | 66 | |||||||||||
Net periodic benefit cost | $ | 110 | $ | 144 | $ | 330 | $ | 434 |
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands, except per share data) | June 24, 2016 | June 26, 2015 | June 24, 2016 | June 26, 2015 | |||||||||||
Basic and Diluted Earnings per Share Numerator: | |||||||||||||||
Net income | $ | 20,645 | $ | 19,058 | $ | 43,224 | $ | 22,096 | |||||||
Basic and Diluted Earnings per Share Denominator: | |||||||||||||||
Weighted average shares outstanding | 62,492 | 62,513 | 62,491 | 62,528 | |||||||||||
Basic and Diluted net income per share | $ | 0.33 | $ | 0.30 | $ | 0.69 | $ | 0.35 |
Nine months ended June 24, 2016 | |||
Expected dividend yield | — | % | |
Expected volatility | 35 | % | |
Range of risk free interest rates | 0.66% - 1.28% | ||
Range of expected option lives | 2.14 - 6.46 years | ||
Range of fair values per option | $6.07 - $10.00 | ||
Fair value of common stock | $ | 16.07 |
(share amounts in thousands) | Shares | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (in years) | ||||||
Outstanding as of September 25, 2015 | 6,746 | $ | 7.70 | 7.4 | |||||
Granted | 34 | 13.62 | 10 | ||||||
Exercised | (18 | ) | 7.86 | — | |||||
Forfeited | (80 | ) | 8.27 | — | |||||
Outstanding as of June 24, 2016 | 6,682 | 7.73 | 6.5 | ||||||
Vested as of June 24, 2016 | 3,937 | 7.52 | 6.0 |
June 24, 2016 | September 25, 2015 | ||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash equivalents | $ | 108,026 | $ | — | $ | — | $ | 54,032 | $ | — | $ | — | |||||||||||
Assets held for sale | — | — | 8,474 | — | — | 3,313 |
Electrical Raceway | Mechanical Products & Solutions | Corporate | |||||||||||||||||||||
(in thousands) | Severance | Severance | Other | Severance | Other | Total | |||||||||||||||||
Balance as of September 25, 2015 | $ | — | $ | 3,717 | $ | 620 | $ | 15 | $ | 61 | $ | 4,413 | |||||||||||
Charges | 28 | 630 | 1,694 | — | 228 | 2,580 | |||||||||||||||||
Utilization | (28 | ) | (4,098 | ) | (1,773 | ) | (12 | ) | (183 | ) | (6,094 | ) | |||||||||||
Reversals / exchange rate effects | — | (139 | ) | (51 | ) | — | — | (190 | ) | ||||||||||||||
Balance as of June 24, 2016 | $ | — | $ | 110 | $ | 490 | $ | 3 | $ | 106 | $ | 709 |
(in thousands) | June 24, 2016 | September 25, 2015 | |||||
Assets held for sale | $ | 8,474 | $ | 3,313 |
Three months ended | |||||||||||||||||||||||
June 24, 2016 | June 26, 2015 | ||||||||||||||||||||||
(in thousands) | External Net Sales | Intersegment Sales | Adjusted EBITDA | External Net Sales | Intersegment Sales | Adjusted EBITDA | |||||||||||||||||
Electrical Raceway | $ | 259,270 | $ | 556 | $ | 52,438 | $ | 251,517 | $ | 351 | $ | 31,100 | |||||||||||
Mechanical Products & Solutions | 136,454 | 28 | $ | 23,024 | 180,850 | 13 | $ | 22,301 | |||||||||||||||
Eliminations | — | (584 | ) | — | (364 | ) | |||||||||||||||||
Consolidated operations | $ | 395,724 | $ | — | $ | 432,367 | $ | — |
Nine months ended | |||||||||||||||||||||||
June 24, 2016 | June 26, 2015 | ||||||||||||||||||||||
(in thousands) | External Net Sales | Intersegment Sales | Adjusted EBITDA | External Net Sales | Intersegment Sales | Adjusted EBITDA | |||||||||||||||||
Electrical Raceway | $ | 713,410 | $ | 1,314 | $ | 129,057 | $ | 750,384 | $ | 599 | $ | 73,780 | |||||||||||
Mechanical Products & Solutions | 393,735 | 94 | $ | 64,725 | 540,970 | 241 | $ | 52,857 | |||||||||||||||
Eliminations | — | (1,408 | ) | — | (840 | ) | |||||||||||||||||
Consolidated operations | $ | 1,107,145 | $ | — | $ | 1,291,354 | $ | — |
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands) | June 24, 2016 | June 26, 2015 | June 24, 2016 | June 26, 2015 | |||||||||||
Operating segment Adjusted EBITDA | |||||||||||||||
Electrical Raceway | $ | 52,438 | $ | 31,100 | $ | 129,057 | $ | 73,780 | |||||||
Mechanical Products & Solutions | 23,024 | 22,301 | 64,725 | 52,857 | |||||||||||
Total | 75,462 | 53,401 | 193,782 | 126,637 | |||||||||||
Unallocated expenses (a) | (8,238 | ) | (6,713 | ) | (20,144 | ) | (16,686 | ) | |||||||
Depreciation and amortization | (13,322 | ) | (14,349 | ) | (40,064 | ) | (43,373 | ) | |||||||
Interest expense, net | (10,169 | ) | (11,212 | ) | (30,617 | ) | (33,624 | ) | |||||||
Gain on extinguishment of debt | — | — | 1,661 | — | |||||||||||
Restructuring & impairments | (326 | ) | (475 | ) | (2,395 | ) | (642 | ) | |||||||
Net periodic pension benefit cost | (110 | ) | (145 | ) | (330 | ) | (434 | ) | |||||||
Stock-based compensation | (4,854 | ) | (661 | ) | (16,897 | ) | (2,462 | ) | |||||||
ABF product liability impact | (212 | ) | (561 | ) | (637 | ) | (1,683 | ) | |||||||
Legal settlements | (1,300 | ) | — | (1,300 | ) | — | |||||||||
Consulting fee | (13,675 | ) | (875 | ) | (15,425 | ) | (2,625 | ) | |||||||
Transaction costs | (1,917 | ) | (2,876 | ) | (5,348 | ) | (4,030 | ) | |||||||
Other | 10,055 | (2,560 | ) | 5,842 | (4,330 | ) | |||||||||
Impact of Fence and Sprinkler exit | — | 3,401 | (811 | ) | 5,121 | ||||||||||
Income from operations before income taxes | $ | 31,394 | $ | 16,375 | $ | 67,317 | $ | 21,869 | |||||||
(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. |
Three Months Ended | Nine months ended | |||||||||||||||
($ in thousands) | June 24, 2016 | June 26, 2015 | June 24, 2016 | June 26, 2015 | ||||||||||||
Net sales | $ | 395,724 | $ | 432,367 | $ | 1,107,145 | $ | 1,291,354 | ||||||||
Impact of Fence and Sprinkler exit | — | (45,298 | ) | (7,816 | ) | (137,160 | ) | |||||||||
Adjusted net sales | $ | 395,724 | $ | 387,069 | $ | 1,099,329 | $ | 1,154,194 |
• | Adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs; |
• | Adjusted EBITDA does not reflect interest expense, or the requirements necessary to service interest or principal payments on debt; |
• | Adjusted EBITDA does not reflect income tax expense (benefit) or the cash requirements to pay taxes; |
• | Adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; and |
• | although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements. |
Three Months Ended | Nine months ended | |||||||||||||||
(in thousands) | June 24, 2016 | June 26, 2015 | June 24, 2016 | June 26, 2015 | ||||||||||||
Net income | $ | 20,645 | $ | 19,058 | $ | 43,224 | $ | 22,096 | ||||||||
Depreciation and amortization | 13,322 | 14,349 | 40,064 | 43,373 | ||||||||||||
Gain on extinguishment of debt | — | — | (1,661 | ) | — | |||||||||||
Interest expense, net | 10,169 | 11,212 | 30,617 | 33,624 | ||||||||||||
Income tax expense (benefit) | 10,749 | (2,683 | ) | 24,093 | (227 | ) | ||||||||||
Restructuring & impairments (a) | 326 | 475 | 2,395 | 642 | ||||||||||||
Net periodic pension benefit cost (b) | 110 | 144 | 330 | 434 | ||||||||||||
Stock-based compensation (c) | 4,854 | 661 | 16,897 | 2,462 | ||||||||||||
ABF product liability impact (d) | 212 | 561 | 637 | 1,683 | ||||||||||||
Consulting fee (e) | 13,675 | 875 | 15,425 | 2,625 | ||||||||||||
Legal settlements (f) | 1,300 | — | 1,300 | — | ||||||||||||
Transaction costs (g) | 1,917 | 2,876 | 5,348 | 4,030 | ||||||||||||
Other (h) | (10,055 | ) | 2,560 | (5,842 | ) | 4,330 | ||||||||||
Impact of Fence and Sprinkler exit (i) | — | (3,401 | ) | 811 | (5,121 | ) | ||||||||||
Adjusted EBITDA | $ | 67,224 | $ | 46,687 | $ | 173,638 | $ | 109,951 | ||||||||
Three Months Ended | Nine months ended | ||||||||||||||||||||||||||||
($ in thousands) | June 24, 2016 | June 26, 2015 | Change | % Change | June 24, 2016 | June 26, 2015 | Change | % Change | |||||||||||||||||||||
Net sales | $ | 395,724 | $ | 432,367 | $ | (36,643 | ) | (8.5 | )% | $ | 1,107,145 | $ | 1,291,354 | $ | (184,209 | ) | (14.3 | )% | |||||||||||
Cost of sales | 284,203 | 353,619 | (69,416 | ) | (19.6 | )% | 831,805 | 1,089,395 | (257,590 | ) | (23.6 | )% | |||||||||||||||||
Gross profit | 111,521 | 78,748 | 32,773 | 41.6 | % | 275,340 | 201,959 | 73,381 | 36.3 | % | |||||||||||||||||||
Selling, general and administrative | 64,392 | 45,912 | 18,480 | 40.3 | % | 162,412 | 130,691 | 31,721 | 24.3 | % | |||||||||||||||||||
Intangible asset amortization | 5,566 | 5,249 | 317 | 6.0 | % | 16,655 | 15,775 | 880 | 5.6 | % | |||||||||||||||||||
Operating income | 41,563 | 27,587 | 13,976 | 50.7 | % | 96,273 | 55,493 | 40,780 | 73.5 | % | |||||||||||||||||||
Interest expense, net | 10,169 | 11,212 | (1,043 | ) | (9.3 | )% | 30,617 | 33,624 | (3,007 | ) | (8.9 | )% | |||||||||||||||||
Gain on extinguishment of debt | — | — | — | * | (1,661 | ) | — | (1,661 | ) | * | |||||||||||||||||||
Income from operations before income taxes | 31,394 | 16,375 | 15,019 | 91.7 | % | 67,317 | 21,869 | 45,448 | 207.8 | % | |||||||||||||||||||
Income tax expense (benefit) | 10,749 | (2,683 | ) | 13,432 | * | 24,093 | (227 | ) | 24,320 | * | |||||||||||||||||||
Net income | $ | 20,645 | $ | 19,058 | $ | 1,587 | 8.3 | % | $ | 43,224 | $ | 22,096 | $ | 21,128 | 95.6 | % | |||||||||||||
Non-GAAP financial data | |||||||||||||||||||||||||||||
Adjusted net sales | $ | 395,724 | $ | 387,069 | $ | 8,655 | 2.2 | % | $ | 1,099,329 | $ | 1,154,194 | $ | (54,865 | ) | (4.8 | )% | ||||||||||||
Adjusted EBITDA | $ | 67,224 | $ | 46,687 | $ | 20,537 | 44.0 | % | $ | 173,638 | $ | 109,951 | $ | 63,687 | 57.9 | % | |||||||||||||
Adjusted EBITDA Margin | 17.0 | % | 12.1 | % | 15.8 | % | 9.5 | % | |||||||||||||||||||||
* Not meaningful |
Three Months Ended | Nine months ended | |||||||||||||||||||||||||||||
($ in thousands) | June 24, 2016 | June 26, 2015 | Change | % Change | June 24, 2016 | June 26, 2015 | Change | % Change | ||||||||||||||||||||||
Net sales | $ | 259,826 | $ | 251,868 | $ | 7,958 | 3.2 | % | $ | 714,724 | $ | 750,983 | $ | (36,259 | ) | (4.8 | )% | |||||||||||||
Adjusted EBITDA | $ | 52,438 | $ | 31,100 | $ | 21,338 | 68.6 | % | $ | 129,057 | $ | 73,780 | $ | 55,277 | 74.9 | % | ||||||||||||||
Adjusted EBITDA margin | 20.2 | % | 12.3 | % | 18.1 | % | 9.8 | % |
Three Months Ended | Nine months ended | ||||||||||||||||||||||||||||
($ in thousands) | June 24, 2016 | June 26, 2015 | Change | % Change | June 24, 2016 | June 26, 2015 | Change | % Change | |||||||||||||||||||||
Net sales | $ | 136,482 | $ | 180,863 | $ | (44,381 | ) | (24.5 | )% | $ | 393,829 | $ | 541,211 | $ | (147,382 | ) | (27.2 | )% | |||||||||||
Impact of Fence and Sprinkler exit | (45,298 | ) | 45,298 | * | (7,816 | ) | (137,160 | ) | 129,344 | * | |||||||||||||||||||
Adjusted net sales | $ | 136,482 | $ | 135,565 | $ | 917 | 0.7 | % | $ | 386,013 | $ | 404,051 | $ | (18,038 | ) | (4.5 | )% | ||||||||||||
Adjusted EBITDA | $ | 23,024 | $ | 22,301 | $ | 723 | 3.2 | % | $ | 64,725 | $ | 52,857 | $ | 11,868 | 22.5 | % | |||||||||||||
Adjusted EBITDA margin | 16.9 | % | 16.5 | % | 16.8 | % | 13.1 | % | |||||||||||||||||||||
* Not meaningful |
Nine months ended | |||||||
(in thousands) | June 24, 2016 | June 26, 2015 | |||||
Cash flows provided by (used in): | |||||||
Operating activities | $ | 85,018 | $ | 30,223 | |||
Investing activities | (12,976 | ) | (45,174 | ) | |||
Financing activities | (21,667 | ) | 16,276 |
• | declines in, and uncertainty regarding, the general business and economic conditions in the U.S. and international markets in which we operate; |
• | weakness or another downturn in the U.S. non-residential construction industry; |
• | changes in prices of raw materials; |
• | pricing pressure, reduced profitability, or loss of market share due to intense competition; |
• | availability and cost of third-party freight carriers and energy; |
• | high levels of imports of products similar to those manufactured by us; |
• | changes in federal, state, local and international governmental regulations and trade policies; |
• | adverse weather conditions; |
• | 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; |
• | 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 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; |
• | challenges attracting and retaining key personnel or high-quality employees; |
• | 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; |
• | 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; |
• | our inability to introduce new products effectively or implement our innovation strategies; |
• | the inability of our customers to pay off the credit lines extended to them by us in a timely manner and the negative impact on customer relations resulting from our collections efforts with respect to non-paying or slow-paying customers; |
• | the incurrence of liabilities and the issuance of additional debt or equity in connection with acquisitions, joint ventures or divestitures; |
• | failure to manage acquisitions successfully, including identifying, evaluating, and valuing acquisition targets and integrating acquired companies, businesses or assets; |
• | the incurrence of liabilities in connection with violations of the FCPA and similar foreign anti-corruption laws; |
• | the incurrence of additional expenses, increase in 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; |
• | the significant influence the CD&R Investor will have over corporate decisions; and |
• | other factors described in this report and from time to time in documents that we file with the SEC. |
3.1 | Second Amended and Restated Certificate of Incorporation of Atkore International Group Inc., is incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-8 of Atkore International Group Inc., Registration No. 333-212045 (the "Form S-8"). | |
3.2 | Second Amended and Restated By-Laws of Atkore International Group Inc., is incorporated by reference to Exhibit 3.2 to the Form S-8. | |
4.1 | Form of Common Stock Certificate of Atkore International Group Inc., is incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-1 of Atkore International Group Inc., Registration No. 333-209940 (the "Form S-1"). | |
10.1# | Stockholders Agreement, dated as of June 10, 2016, by and among Atkore International Group Inc. and CD&R Allied Holdings, L.P. | |
10.2# | Registration Rights Agreement, dated as of June 9, 2016, by and among Atkore International Group Inc. and CD&R Allied Holdings, L.P. | |
10.3# | Consulting Agreement Termination Letter Agreement, dated June 9, 2016, by and among Atkore International Group Inc., Atkore International Holdings Inc., Atkore International, Inc. and Clayton, Dubilier & Rice, LLC. | |
10.4* | Form of Director Indemnification Agreement, is incorporated by reference to Exhibit 10.25 to the Form S-1. | |
10.5* | Form of Employee Stock Option Agreement under the 2016 Omnibus Incentive Plan, is incorporated by reference to Exhibit 10.28.1 to the Form S-1. | |
10.5.1* | Form of Employee Restricted Stock Agreement under the 2016 Omnibus Incentive Plan, is incorporated by reference to Exhibit 10.28.2 to the Form S-1. | |
10.5.2* | Atkore International Group Inc. Non-Employee Director Compensation Program, is incorporated by reference to Exhibit 10.29 to the Form S-1. | |
10.5.3* | Form of Director Restricted Stock Unit Agreement under the 2016 Omnibus Incentive Plan, is incorporated by reference to Exhibit 10.30 to the Form S-1. | |
31.1# | Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a - 14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2# | Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a - 14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1# | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2# | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS# | XBRL Instance Document | |
101.SCH# | XBRL Taxonomy Schema Linkbase Document | |
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 | |
# | Filed herewith | |
* | Denotes management compensatory plan, contracts or arrangements. |
ATKORE INTERNATIONAL GROUP INC. | |||
(Registrant) | |||
Date: | August 2, 2016 | By: | /s/ James A. Mallak |
Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
TABLE OF CONTENTS | |||
Page | |||
ARTICLE I DEFINITIONS | 1 | ||
1.1 Certain Defined Terms | 1 | ||
1.2 Other Definitional Provisions | 4 | ||
ARTICLE II CORPORATE GOVERNANCE | 4 | ||
2.1 Board Representation | 4 | ||
2.2 Available Financial Information | 6 | ||
2.3 Other Information | 8 | ||
2.4 Access | 8 | ||
2.5 Termination of Rights | 9 | ||
ARTICLE III MISCELLANEOUS | 9 | ||
3.1 Confidentiality | 9 | ||
3.2 Amendments and Waivers | 9 | ||
3.3 Successors, Assigns and Permitted Transferees | 9 | ||
3.4 Notices | 10 | ||
3.5 Further Assurances | 10 | ||
3.6 Entire Agreement; No Third Party Beneficiaries | 11 | ||
3.7 Restrictions on Other Agreements; By-laws | 11 | ||
3.8 Governing Law | 11 | ||
3.9 Jurisdiction and Forum; Waiver of Jury Trial | 11 | ||
3.10 Severability | 11 | ||
3.11 Enforcement | 12 | ||
3.12 Titles and Subtitles | 12 | ||
3.13 Effectiveness | 12 | ||
3.14 No Recourse | 12 | ||
3.15 Counterparts; Facsimile Signatures | 12 | ||
Exhibit A - Joinder Agreement |
By: | CD&R Associates VIII, Ltd., |
1. | Definitions 1 |
2. | Incidental Registrations 5 |
(a) | Right to Include Registrable Securities 5 |
(b) | Priority in Incidental Registrations 6 |
3. | Registration on Request 6 |
(a) | Request by the Demand Party 6 |
(b) | Priority on Demand Registration 7 |
(c) | Cancellation of a Demand Registration 8 |
(d) | Limitations on Demand Registrations 8 |
(e) | Postponements in Requested Registrations 8 |
(f) | Short-Form Registrations 9 |
(g) | Shelf-Take Downs 10 |
(h) | Registration Statement Form 11 |
(i) | Selection of Underwriters 11 |
4. | Registration Procedures 12 |
5. | Indemnification 18 |
(a) | Indemnification by the Company 18 |
(b) | Indemnification by Holder of Registrable Securities 19 |
(c) | Conduct of Indemnification Proceedings 20 |
(d) | Contribution 20 |
(e) | Deemed Underwriter 21 |
(f) | Other Indemnification 21 |
(g) | Non-Exclusivity 22 |
(h) | Primacy of Indemnification 22 |
6. | Registration Expenses 22 |
7. | Rule 144 23 |
8. | Certain Additional Agreements 24 |
9. | Miscellaneous 24 |
(a) | Termination 24 |
(b) | Holdback Agreement 24 |
(c) | Amendments and Waivers 25 |
(d) | Successors, Assigns and Transferees 25 |
(e) | Notices 25 |
(f) | Further Assurances 26 |
(g) | Other Registration Rights Agreements 26 |
(h) | Entire Agreement; No Third Party Beneficiaries 27 |
(i) | Governing Law; Jurisdiction and Forum; Waiver of Jury Trial 27 |
(j) | Severability 27 |
(k) | Enforcement 28 |
(l) | Titles and Subtitles 28 |
(m) | No Recourse 28 |
(n) | Counterparts; Facsimile Signatures 28 |
By: | CD&R Associates VIII, Ltd., |
Dated: | August 2, 2016 | /s/ John. P. Williamson | |
John P. Williamson | |||
President and Chief Executive Officer (Principal Executive Officer) |
Dated: | August 2, 2016 | /s/ James A. Mallak | |
James A. Mallak | |||
Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
Dated: | August 2, 2016 | /s/ John. P. Williamson | |
John P. Williamson | |||
President and Chief Executive Officer (Principal Executive Officer) | |||
Dated: | August 2, 2016 | /s/ James A. Mallak | |
James A. Mallak | |||
Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | |||
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Jun. 24, 2016 |
Aug. 02, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Atkore International Group Inc. | |
Entity Central Index Key | 0001666138 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 24, 2016 | |
Document Fiscal Year Focus | 2016 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | --09-30 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 62,458,367 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 24, 2016 |
Jun. 26, 2015 |
Jun. 24, 2016 |
Jun. 26, 2015 |
|
Income Statement [Abstract] | ||||
Net sales | $ 395,724 | $ 432,367 | $ 1,107,145 | $ 1,291,354 |
Cost of sales | 284,203 | 353,619 | 831,805 | 1,089,395 |
Gross profit | 111,521 | 78,748 | 275,340 | 201,959 |
Selling, general and administrative | 64,392 | 45,912 | 162,412 | 130,691 |
Intangible asset amortization | 5,566 | 5,249 | 16,655 | 15,775 |
Operating income | 41,563 | 27,587 | 96,273 | 55,493 |
Interest expense, net | 10,169 | 11,212 | 30,617 | 33,624 |
Gain on extinguishment of debt | 0 | 0 | (1,661) | 0 |
Income from operations before income taxes | 31,394 | 16,375 | 67,317 | 21,869 |
Income tax expense (benefit) | 10,749 | (2,683) | 24,093 | (227) |
Net income | $ 20,645 | $ 19,058 | $ 43,224 | $ 22,096 |
Weighted Average Common Shares Outstanding | ||||
Basic and Diluted (shares) | 62,492 | 62,513 | 62,491 | 62,528 |
Net income per share | ||||
Basic and Diluted (in dollars per share) | $ 0.33 | $ 0.30 | $ 0.69 | $ 0.35 |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 24, 2016 |
Jun. 26, 2015 |
Jun. 24, 2016 |
Jun. 26, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 20,645 | $ 19,058 | $ 43,224 | $ 22,096 |
Change in foreign currency translation adjustment | (155) | 247 | (216) | (4,487) |
Change in unrecognized loss related to pension benefit plans | 180 | 22 | 541 | 66 |
Total other comprehensive income (loss) | 25 | 269 | 325 | (4,421) |
Comprehensive income | $ 20,670 | $ 19,327 | $ 43,549 | $ 17,675 |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Jun. 24, 2016 |
Sep. 25, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 1,301 | $ 1,173 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (shares) | 62,458,367 | 62,453,437 |
Common stock, shares outstanding (shares) | 62,458,367 | 62,453,437 |
Treasury stock (shares) | 260,900 | 260,900 |
Basis of Presentation and Summary of Significant Accounting Policies |
9 Months Ended |
---|---|
Jun. 24, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Ownership Structure - Atkore International Group Inc. (the “Company” or “Atkore”) is a leading manufacturer of Electrical Raceway products primarily for the non-residential construction and renovation markets and Mechanical Products & Solutions (“MP&S”) for the construction and industrial markets. The Company was incorporated in the State of Delaware on November 4, 2010. The Company owns 100% of Atkore International Holdings Inc. (“AIH”), which in turn is the sole owner of Atkore International, Inc. (“AII”). Common Stock Split - On May 27, 2016, the Company effected a 1.37-for-1 stock split of its common stock. The accompanying unaudited condensed consolidated financial statements and notes thereto give retroactive effect to the stock split for all periods presented. Initial Public Offering - On June 9, 2016, the Company’s Registration Statement on Form S-1 (Registration No. 333-209940) relating to an initial public offering (“IPO”) of its common stock was declared effective by the U.S. Securities and Exchange Commission (“SEC”). On June 15, 2016, the Company completed the IPO at a price to the public of $16.00 per share. In connection with the IPO, selling stockholder CD&R Allied Holdings, L.P., (the “CD&R Investor”), an affiliate of Clayton, Dubilier & Rice, LLC (“CD&R”), sold an aggregate of 12,000,000 shares of the Company’s common stock. The CD&R Investor received all of the net proceeds and bore all commissions and discounts from the sale of the common stock. The Company did not receive any proceeds from the IPO. After the completion of the IPO, Atkore is a controlled company with CD&R retaining 80.1% of the common stock. Basis of Presentation - The accompanying unaudited condensed consolidated financial statements of the Company included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These unaudited condensed consolidated financial statements have been prepared in accordance with the Company’s accounting policies and on the same basis as those financial statements included in the final prospectus filed with the SEC on June 9, 2016 in connection with the IPO (the "IPO Final Prospectus"), and should be read in conjunction with those unaudited condensed consolidated financial statements and the notes thereto. Certain information and disclosures normally included in our 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 balance sheet as of September 25, 2015 and the unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements for the fiscal year ended September 25, 2015 included in the IPO Final Prospectus. The unaudited condensed consolidated financial statements include the assets and liabilities used in operating the Company’s business. All intercompany balances and transactions have been eliminated in consolidation. The results of companies acquired or disposed of are included in the unaudited condensed consolidated financial statements from the effective date of acquisition or up to the date of disposal. These statements include all adjustments (consisting of normal recurring adjustments) that the Company considered necessary to present a fair statement of its results of operations, financial position and cash flows. The results reported in these unaudited condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. Description of Business - The Company is a leading manufacturer of Electrical Raceway products primarily for the non-residential construction and renovation markets and Mechanical Products & Solutions for the construction and industrial markets. Electrical Raceway products form the critical infrastructure that enables the deployment, isolation and protection of a structure’s electrical circuitry from the original power source to the final outlet. MP&S frame, support and secure component parts in a broad range of structures, equipment and systems in electrical, industrial and construction applications. Fiscal Periods - The Company has a 52- or 53-week fiscal year that ends on the last Friday in September. It is the Company’s practice to establish quarterly closings using a 4-5-4 calendar. Fiscal year 2015 was a 52-week fiscal year, which ended on September 25, 2015. Fiscal year 2016 will end on September 30, 2016, and will be a 53-week year. The Company’s fiscal quarters end on the last Friday in December, March and June. 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 consolidated financial statements and report the associated amounts of revenues and expenses. Significant estimates and assumptions are used for, but not limited to, allowances for doubtful accounts, estimates of future cash flows associated with asset impairments, useful lives for depreciation and amortization, loss contingencies, net realizable value of inventories, legal liabilities, income taxes and tax valuation allowances, pension and postretirement employee benefit liabilities and purchase price allocation. Actual results could differ materially from these estimates. Fair Value Measurements - Authoritative guidance for fair value measurements establishes a three-level hierarchy that ranks the quality and reliability of information used in developing fair value estimates. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. In cases where two or more levels of inputs are used to determine fair value, a financial instrument’s level is determined based on the lowest level input that is considered significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are summarized as follows: Level 1-inputs are based upon quoted prices (unadjusted) in active markets for identical assets or liabilities which are accessible as of the measurement date. Level 2-inputs are based upon quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations for the asset or liability that are derived principally from or corroborated by market data for which the primary inputs are observable, including forward interest rates, yield curves, credit risk and exchange rates. Level 3-inputs for the valuations are unobservable and are based on management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques such as option pricing models and discounted cash flow models. Recent Accounting Pronouncements - On May 9, 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2016-12, "Amendments to Revenue Standard and Provides Practical Expedients," which addresses certain implementation issues related to ASU 2014-09, "Revenue from Contracts with Customers," such as collectibility, non-cash considerations and contract modifications. The revised effective date for public entities will be annual periods beginning after December 15, 2017, our fiscal 2019. Early adoption is permitted. The Company is evaluating the effect of adopting this new accounting guidance and its impact on the results of operations, cash flows or financial position. On April 14, 2016, the FASB issued ASU 2016-10, FASB Clarifies Guidance on Licensing and Identifying Performance Obligations, which amends the guidance on identifying performance obligations and the implementation guidance on licensing issued in ASU 2014-09, "Revenue from Contracts with Customers." The revised effective date for public entities will be annual periods beginning after December 15, 2017, our fiscal 2019. Early adoption is permitted. The Company is evaluating the effect of adopting this new accounting guidance and its impact on the results of operations, cash flows or financial position. |
Acquisitions |
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Jun. 24, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | ACQUISITIONS From time to time the Company enters into strategic acquisitions in an effort to better service existing customers and to attain new customers. The Company completed the following acquisitions for total consideration of approximately $30,440 for the nine months ended June 26, 2015. The Company did not complete any acquisitions for the nine months ended June 24, 2016. On October 20, 2014, Atkore Plastic Pipe Corporation, a wholly-owned indirect subsidiary of the Company, acquired all of the outstanding stock of American Pipe & Plastics, Inc. (“APPI”). The aggregate purchase price was $6,572. APPI is a manufacturer of PVC conduit and is located in Kirkwood, New York. Additionally, on November 17, 2014, Atkore Steel Components, Inc., a wholly-owned indirect subsidiary of the Company, acquired most of the assets and assumed certain liabilities of Steel Components, Inc. (“SCI”). The aggregate purchase price was $23,868. SCI provides steel and malleable iron electrical fittings for steel, flexible and liquidtight conduit, as well as armored cable. SCI is located in Coconut Creek, Florida. The purchase price was allocated to tangible and intangible assets acquired and liabilities assumed, based on their estimated fair values. Fair value measurements have been applied based on assumptions that market participants would use in the pricing of the asset or liability. The following table summarizes the Level 3 fair values assigned to the net assets acquired and liabilities assumed as of the acquisition date:
Both acquisitions strengthen and diversify the Company’s Electrical Raceway reportable segment and its portfolio of products provided to electrical distribution customers. The Company funded both acquisitions using borrowings from AII’s asset-based credit facility (“ABL Credit Facility”). The Company recognized $1,387 and $3,924 of goodwill for APPI and SCI, respectively. See Note 6. Goodwill and Intangible Assets. Goodwill consists of the excess of the purchase price over the net of the fair value of the acquired assets and assumed liabilities, and represents the estimated economic value attributable to future operations. Goodwill recognized from the APPI acquisition is non-deductible for income tax purposes. Goodwill recognized from the SCI acquisition is tax-deductible and is amortized over 15 years for income tax purposes. The goodwill arising from both acquisitions consists largely of the synergies and economies of scale from integrating these companies with existing businesses. Due to the immaterial nature of the acquisitions, both individually, and in the aggregate, the Company has not included the full year pro-forma results of operations for the acquisition year or previous years. The Company finalized the valuation of assets acquired and liabilities assumed during fiscal year 2015. The following table summarizes the fair value of amortizable intangible assets as of the acquisition dates:
The SCI purchase agreement contains a provision for contingent consideration requiring the Company to pay the former owners an amount not to exceed $500 upon achieving certain performance targets. The Company recorded $190 in Accrued and other current liabilities as the best estimate of fair value of the contingent consideration on the opening balance sheet. The fair value estimate is considered a Level 3 measurement in accordance with the fair value hierarchy and the range of possible outcomes does not differ materially from the amount recorded. The performance target period of one year expired during the three months ended December 25, 2015 and the performance conditions were not met. As such, the Company recorded a reversal of the contingent liability as a component of Selling, general and administrative expense. |
Related Party Transactions |
9 Months Ended |
---|---|
Jun. 24, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS In December 2010, the CD&R Investor acquired a majority stake in the Company (the “CD&R Acquisition”). In connection with the CD&R Acquisition, the Company, AIH and AII entered into a consulting agreement (the “Consulting Agreement”) with CD&R. Annual consulting fees were paid to CD&R quarterly, in advance and recorded as a component of selling, general and administrative expenses in the Company's condensed consolidated statements of operations. CD&R’s annual consulting fee was $3,500. In connection with the IPO, the Company entered into an agreement with CD&R to terminate the Consulting Agreement, including the ongoing consulting fees. Pursuant to the termination agreement, the Company paid CD&R a fee of $12,800 during the three months ended June 24, 2016 and the annual consulting fee was terminated. The consulting and termination fees for the three and nine months ended June 24, 2016 were $13,675 and $15,425, respectively. Consulting fees for the three and nine months ended June 26, 2015 were $875 and $2,625, respectively. |
Inventories, Net |
9 Months Ended |
---|---|
Jun. 24, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | INVENTORIES, NET The Company records inventory at the lower of cost or market (primarily last in, first out, or "LIFO") or market value for a majority of the Company. Approximately 85% and 80% of the Company's inventories are valued at the lower of LIFO cost or market at June 24, 2016 and September 25, 2015, respectively. Interim LIFO determinations, including those at June 24, 2016, are based on management's estimates of future inventory levels and costs for the remainder of the current fiscal year. As of June 24, 2016 and September 25, 2015, the excess and obsolete inventory reserve was $10,179 and $10,201, respectively. During the three and nine months ended June 24, 2016, certain inventory which had been previously adjusted downward to market value turned at its new cost basis. Additionally, market conditions for raw material prices did not require a downward adjustment for lower-of-cost-or-market. |
Property, Plant and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | PROPERTY, PLANT AND EQUIPMENT As of June 24, 2016 and September 25, 2015, property, plant and equipment at cost and accumulated depreciation were as follows:
Depreciation expense for the three and nine months ended June 24, 2016 totaled $7,756 and $23,409, respectively. Depreciation expense for the three and and nine months ended June 26, 2015 totaled $9,100 and $27,598 respectively. |
Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS Goodwill - There were no changes in the carrying amount of goodwill during the nine months ended June 24, 2016.
The Company assesses the recoverability of goodwill on an annual basis in accordance with ASC 350 - Intangibles - Goodwill and Other ("ASC 350"). The measurement date is the first day of the fourth fiscal quarter, or more frequently, if triggering events occur. During the nine months ended June 24, 2016 there were no triggering events as defined in ASC 350; therefore, the Company did not perform a test to assess the recoverability of goodwill. Intangible Assets - The Company also assesses the recoverability of its indefinite-lived trade names on an annual basis or more frequently, if triggering events occur, in accordance with ASC 350. The Company uses the relief from royalty method, an income approach method, to quantify the fair value of its trade names. The measurement date is the first day of the fourth fiscal quarter, or more frequently, if triggering events occur. During the nine months ended June 24, 2016 there were no triggering events as defined by ASC 350; therefore, the Company did not perform a test to assess the recoverability of indefinite-lived intangible assets. The following table provides the gross carrying value, accumulated amortization, and net carrying value for each major class of intangible assets:
Amortization expense for the three and nine months ended June 24, 2016 was $5,566 and $16,655, respectively. Amortization expense for the three and nine months ended June 26, 2015 totaled $5,249 and $15,775, respectively. Expected amortization expense for intangible assets over the next five years and thereafter is as follows:
Actual amounts of amortization may differ from estimated amounts due to additional intangible asset acquisitions, impairment of intangible assets, and other events. |
Accrued and Other Current Liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued and Other Current Liabilities | ACCRUED AND OTHER CURRENT LIABILITIES As of June 24, 2016 and September 25, 2015, accrued and other current liabilities were comprised of:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | DEBT Debt as of June 24, 2016 and September 25, 2015 was as follows:
Term Loan Facilities - On April 9, 2014, AII entered into a credit agreement for a $420,000 First Lien Term Loan Facility (the “First Lien Term Loan Facility”) and a credit agreement for a $250,000 Second Lien Term Loan Facility (the “Second Lien Term Loan Facility” and together with the First Lien Term Loan Facility, the “Term Loan Facilities”). The First Lien Term Loan Facility was priced at 99.5%, bears interest at a rate of LIBOR plus 3.5% with a LIBOR floor of 1.00%, and matures on April 9, 2021. The Second Lien Term Loan Facility was priced at 99.0%, bears interest at a rate of LIBOR plus 6.75% with a LIBOR floor of 1.00%, and matures on October 9, 2021. The Term Loan Facilities contain customary covenants typical for this type of financing, including limitations on indebtedness, restricted payments including dividends, liens, restrictions on distributions from restricted subsidiaries, sales of assets, affiliate transactions, mergers and consolidations. The Term Loan Facilities also contain customary events of default typical for this type of financing, including, without limitation, failure to pay principal and/or interest when due, failure to observe covenants, certain events of bankruptcy, the rendering of certain judgments, or the loss of any guarantee. On January 22, 2016, AII redeemed $17,000 of the Second Lien Term Loan Facility at a redemption price of 89.00% of the par value, and $2,000 at a redemption price of 89.75% of the par value. For the nine months ended June 24, 2016, the Company recorded a gain on the extinguishment of debt of $1,661. As of June 24, 2016, the approximate fair value of the First Lien Term Loan Facility was $409,720 and the Second Lien Term Loan Facility was $228,782. In determining the approximate fair value of its long-term debt, the Company used the trading value among financial institutions for the Term Loan Facilities, which were classified within Level 2 of the fair value hierarchy. ABL Credit Facility - The ABL Credit Facility has aggregate commitments of $325,000 and is guaranteed by AIH and the U.S. operating companies owned by AII. AII’s availability under the ABL Credit Facility was $244,663 and $255,755 as of June 24, 2016 and September 25, 2015, respectively. Availability under the ABL Credit Facility is subject to a borrowing base equal to the sum of 85% of eligible accounts receivable plus 80% of eligible inventory of each borrower and guarantor, subject to certain limitations. The interest rate on the ABL Credit Facility is LIBOR plus an applicable margin ranging from 1.50% to 2.00%, or an alternate base rate for U.S. Dollar denominated borrowings plus an applicable margin ranging from 0.50% to 1.00%. The ABL Credit Facility matures on October 23, 2018. There were no borrowings outstanding under the ABL Credit Facility as of June 24, 2016 and September 25, 2015, respectively. The ABL Credit Facility contains customary representations and warranties and customary affirmative and negative covenants. Affirmative covenants include, without limitation, the timely delivery of quarterly and annual financial statements, certifications to be made by AIH, payment of obligations, maintenance of corporate existence and insurance, notices, compliance with environmental laws, and the grant of liens. The negative covenants include, without limitation, the following: limitations on indebtedness, dividends and distributions, investments, prepayments or redemptions of subordinated indebtedness, amendments of subordinated indebtedness, transactions with affiliates, asset sales, mergers, consolidations and sales of all or substantially all assets, liens, negative pledge clauses, changes in fiscal periods, changes in line of business and changes in charter documents. Additionally, if the availability under the ABL Credit Facility falls below certain levels, AIH would subsequently be required to maintain a minimum fixed charge coverage ratio. AII was not subject to the minimum fixed charge coverage ratio during any period subsequent to the establishment of the ABL Credit Facility. The Company's remaining financial instruments consist primarily of cash and cash equivalents, accounts receivable and accounts payable. |
Income Taxes |
9 Months Ended |
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Jun. 24, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES For the three months ended June 24, 2016 and June 26, 2015, the Company’s effective income tax rate attributable to income from operations before income taxes was 34.2% and (16.4)%, respectively. For the three months ended June 24, 2016, the Company's income tax expense was $10,749. For the three months ended June 26, 2015, the Company's income tax benefit was $2,683. The increase in the income tax expense for the three months ended June 24, 2016 was primarily a result of increased earnings in the U.S. which are subject to a higher tax rate, increased state income tax expense, and non-deductible transaction costs related to our IPO. Additionally, for the three months ended June 26, 2015, the income tax benefit reflects the release of indemnified liabilities. For the nine months ended June 24, 2016 and June 26, 2015, the Company’s effective income tax rate attributable to income from operations before income taxes was 35.8% and (1.0)% respectively. For the nine months ended June 24, 2016, the Company's income tax expense was $24,093. For the nine months ended June 26, 2015, the Company's income tax benefit was $227. The increase in the income tax expense for the nine months ended June 24, 2016 is primarily a result of increased earnings in the U.S. which are subject to a higher tax rate, increased state expense, and nondeductible transactions costs related to our IPO. Additionally, for the nine months ended June 26, 2015, the income tax benefit reflects the release of indemnified liabilities. The Company has recorded a valuation allowance 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. As of June 24, 2016, the Company no longer records a valuation allowance against deferred tax assets in the Company's Asia Pacific business as a result of significant positive evidence which includes three year cumulative pretax income and expected future taxable income. As a result, the Company released a valuation allowance of $1,360 for the three months ended June 24, 2016. 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 it has determined are more likely than not to be realized upon examination. The Company records interest and penalties related to unrecognized tax benefits as a component of provision for income taxes. The partial releases of uncertain tax positions during the nine months ended June 24, 2016 resulted from audit closures and statute expirations and were not material. The Company is fully indemnified by its former parent for uncertain tax positions taken prior to December 22, 2010. For the nine months ended June 24, 2016, the Company made no additional provision for U.S. or non-U.S. income taxes on the undistributed income of subsidiaries or for unrecognized deferred tax liabilities for temporary differences related to basis differences in investments in subsidiaries, as such income is expected to be indefinitely reinvested, the investments are essentially permanent in duration, or the Company has concluded that no additional tax liability will arise as a result of the distribution of such income. |
Postretirement Benefits |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Postretirement Benefits | POSTRETIREMENT BENEFITS The Company has a number of non-contributory and contributory defined benefit retirement plans covering certain U.S. employees. Net periodic pension benefit cost is based on periodic actuarial valuations that use the projected unit credit method of calculation and is charged to the statements of operations on a systematic basis over the expected average remaining service lives of current participants. Contribution amounts are determined based on local regulations and with the assistance of professionally qualified actuaries in the countries concerned. The benefits under the defined benefit plans are based on various factors, such as years of service and compensation. The net periodic benefit cost for the three and nine months ended June 24, 2016 and June 26, 2015 was as follows:
The amortization of actuarial loss is included as a component of cost of sales on the Company's condensed consolidated statements of operations. The Company contributed $26 and $252 to its pension plans during the three months ended June 24, 2016 and June 26, 2015, respectively. The Company contributed $279 and $882 to its pension plans during the nine months ended June 24, 2016 and June 26, 2015, respectively. Multi-Employer Plan- The Company has a liability of $6,575 as of June 24, 2016 and $6,844 as of September 25, 2015 representing the Company's proportionate share of a multi-employer pension plan which was exited in a prior year. |
Earnings Per Share |
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Earnings Per Share | EARNINGS PER SHARE Basic earnings per common share is computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding for the period. The computation of diluted earnings per share includes the effect of potential common stock, if dilutive. As the Company intends to settle all employee stock options in cash, the potential issuance of shares of common stock related to these options does not affect diluted shares. There are no other potentially dilutive instruments outstanding.
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Stock Incentive Plan |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Incentive Plan | STOCK INCENTIVE PLAN On May 16, 2011, the Company’s Board of Directors adopted the Atkore International Group Inc. Stock Incentive Plan (the “Stock Incentive Plan”). A maximum of 8.9 million shares of common stock was reserved for issuance under the Stock Incentive Plan. The Stock Incentive Plan provided for stock purchases and grants of other equity awards, including non-qualified stock options, restricted stock, and restricted stock units, to officers, and key employees. During the fiscal year ended September 26, 2014, the Company’s Board of Directors modified the Stock Incentive Plan. The modification provides the Company discretion to net settle stock option awards in cash. Subsequent to the modification, several former employees requested and were granted net cash settlements. The Company did not have stock option exercises prior to the fiscal year ended September 26, 2014. Consequently, the modification triggered a change from equity accounting to liability accounting for all remaining outstanding options. The fair values of outstanding options are remeasured each reporting period using the Black-Scholes model. The net settlement feature under the Stock Incentive Plan terminated in connection with the IPO. On June 10, 2016, the Company's Board of Directors adopted the Atkore International Group Inc. 2016 Omnibus Incentive Plan ("Omnibus Incentive Plan") and terminated the Stock Incentive Plan as to future grants. Awards previously granted under the Stock Incentive Plan were unaffected by the termination of the Stock Incentive Plan. The Omnibus Incentive Plan provides for stock purchases and grants of other equity awards, including non-qualified stock options, stock purchase rights, restricted stock, restricted stock units, performance shares, performance units, stock appreciation rights ("SARs"), dividend equivalents and other stock-based awards to directors, offices, other employees and consultants. A maximum of 3.8 million shares of common stock is reserved for issuance under the Omnibus Incentive Plan. Stock options vest ratably over five years. Compensation expense, based on the fair market value of the options, is charged to selling, general and administrative expenses over the respective vesting periods. All options and rights have a ten year life. Prior to the IPO, the Company utilized equity valuations based on comparable publicly-traded companies, discounted free cash flows, an analysis of the Company's enterprise value and any other factors deemed relevant in estimating the fair value of the common stock. Subsequent to the IPO, the Company has used the closing price of its common stock on the New York Stock Exchange ("NYSE") as the fair value of its common stock. The assumptions used for re-measurement as of June 24, 2016 were as follows:
The expected life of options represents the weighted-average period of time that options granted are expected to be outstanding, giving consideration to vesting schedules and expected exercise patterns. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant for periods corresponding with the expected life of the options. Expected volatility is based on historical volatilities of comparable companies. Dividends are not paid on common stock. Stock option activity for the period September 25, 2015 to June 24, 2016 was as follows:
There were 6.7 million and 6.7 million options issued and outstanding under the Omnibus Incentive Plan and the Stock Incentive Plan as of June 24, 2016 and September 25, 2015, respectively. Compensation expense related to stock-based compensation plans was $4,854 and $661 for the three months ended June 24, 2016 and June 26, 2015, respectively due to an increase in the estimated fair value of a share of the Company's common stock. Compensation expense related to stock-based compensation plans was $16,897 and $2,462 for the nine months ended June 24, 2016 and June 26, 2015, respectively due to an increase in the estimated fair value of a share of the Company's common stock. Compensation expense is included in selling, general and administrative expenses. The number of options exercised during the nine months ended June 24, 2016 and June 26, 2015 were 18 thousand and 220 thousand, respectively. The amount of cash the Company paid to settle the options exercised during the nine months ended June 24, 2016 and June 26, 2015 was $43 and $544, respectively. As of June 24, 2016, there was $19,561 of total unrecognized compensation expense related to non-vested options granted. The compensation expense is expected to be recognized over a weighted-average period of approximately 2.3 years. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS Authoritative guidance for fair value measurements establishes a three-level hierarchy that ranks the quality and reliability of information used in developing fair value estimates. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. In cases where two or more levels of inputs are used to determine fair value, a financial instrument’s level is determined based on the lowest level input that is considered significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are summarized as follows: Level 1-inputs are based upon quoted prices (unadjusted) in active markets for identical assets or liabilities that are accessible as of the measurement date. Level 2-inputs are based upon quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations for the asset or liability that are derived principally from or corroborated by market data for which the primary inputs are observable, including forward interest rates, yield curves, credit risk and exchange rates. Level 3-inputs for the valuations are unobservable and are based on management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques such as option pricing models and discounted cash flow models. Certain assets and liabilities are required to be recorded at fair value on a recurring basis. The Company’s assets and liabilities to be adjusted to fair value on a recurring basis are cash equivalents and assets held for sale. The Company separately discloses the fair value of any debt-related obligations within "Note 8. Debt". The Company valued assets held for sale based upon the estimated sales price less costs to dispose as of June 24, 2016 and September 25, 2015. Selling price is estimated based on market transactions for similar assets. The significant unobservable input used in the fair value measurement of our assets held for sale is the estimated selling price. Changes in the estimated selling price would not have a significant impact on the estimated fair value. The following table presents the assets and liabilities measured at fair value on a recurring basis as of June 24, 2016 and September 25, 2015 in accordance with the fair value hierarchy:
The Company did not have any non-recurring fair value measurements as of June 24, 2016 or September 25, 2015. |
Restructuring Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charges | RESTRUCTURING CHARGES The remaining liability for restructuring reserves as of June 24, 2016 are included within accrued and other current liabilities in the Company’s condensed consolidated balance sheets as follows:
During the three and nine months ended June 24, 2016, the Company recorded $326 and $2,395, respectively of severance-related and other charges related to the exit of its Fence and Sprinkler steel pipe and tube product lines ("Fence and Sprinkler") and the closure of a facility in Philadelphia, PA. During the three and nine months ended June 26, 2015, the Company recorded $475 and $642, respectively of severance-related and other charges. Restructuring charges are included as a component of selling, general and administrative expenses in the Company's condensed consolidated statement of operations. |
Commitments and Contingencies |
9 Months Ended |
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Jun. 24, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES The Company has obligations related to commitments to purchase certain goods. As of June 24, 2016, such obligations were $78,968 for the rest of fiscal year 2016, $3,455 for year two and $1,360 thereafter. These amounts represent open purchase orders for materials used in production. Legal Contingencies-The Company is a defendant in a number of pending legal proceedings, some of which were inherited from its former parent, Tyco International Ltd. ("Tyco"), including certain product liability claims. Several 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 (“ABF”), which the Company has not manufactured or sold for several years, is incompatible with chlorinated polyvinyl chloride (“CPVC”) and caused stress cracking in such pipe manufactured by third parties when installed together in the same sprinkler system, which we refer to collectively as the "Special Products Claims." After an analysis of claims experience, the Company reserved its best estimate of the probable and reasonably estimable losses related to these matters. The Company’s product liability reserve related to Special Products Claims matters were $2,428 and $2,783 as of June 24, 2016 and September 25, 2015, respectively. The Company separately reserves for other product liability matters that do not involve Special Products Claims. The Company’s other product liability reserves were $3,276 and $2,666 as of June 24, 2016 and September 25, 2015, respectively. The Company believes that the range of probable losses for Special Products Claims and other product liabilities is between $3,000 and $10,000. On November 16, 2015, the Company was served with a Special Products Claim, Wind Condominium Association, Inc., et al. v. Allied Tube & Conduit Corporation, et al., a putative class action claim filed on November 16, 2015 in the Southern District of Florida which defines a "National Class" and a "Florida Subclass" consisting of all condominium associations and building owners who had ABF and/or ABF II installed in combination with CPVC from January 1, 2003 through December 31, 2010 nationwide and in Florida, respectively. The plaintiffs seek to recover monetary damages for the replacement and repair of fire suppression systems and any damaged real property or personal property, as well as consequential and incidental damages. At this time, the Company does not expect the outcome of the Special Products Claims proceedings, or any other proceeding, 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 claims, including for Special Products Claims contingencies. However, it is possible that additional reserves could be required in the future that could have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. This additional loss or range of losses cannot be recorded at this time, as it is not reasonably estimable. In addition to the matters discussed above, from time to time, the Company is subject to a number of disputes, administrative proceedings and other claims arising out of the ordinary conduct of the Company’s business. These matters generally relate to disputes arising out of the use or installation of the Company’s products, product liability litigation, contract disputes, patent infringement accusations, employment matters 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. The Company also has legal liabilities related to non-product liability matters totaling $2,617 as of June 24, 2016. |
Guarantees |
9 Months Ended |
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Jun. 24, 2016 | |
Guarantees [Abstract] | |
Guarantees | GUARANTEES The Company has outstanding letters of credit totaling $7,310 supporting workers’ compensation and general liability insurance policies, and $1,500 supporting foreign lines of credit. The Company also has outstanding letters of credit totaling $9,121 as collateral for four advance payments it has received pursuant to the sale of its minority ownership share in Abahsain-Cope Saudi Arabia Ltd. Pursuant to this matter, the Company received all four payments as of September 25, 2015. The bank guarantees will be canceled when the transfer of ownership is complete. As of June 24, 2016, the risk and title transfer was not complete. The Company also has surety bonds primarily related to performance guarantees on supply agreements and construction contracts, and payment of duties and taxes totaling $15,389 as of June 24, 2016. In disposing of assets or businesses, the Company often provides representations, warranties and indemnities to cover various risks including unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. The Company does not have the ability to estimate the potential liability from such indemnities because they relate to unknown conditions. However, the Company has no reason to believe that these uncertainties would have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. In the normal course of business, the Company is liable for product performance and contract completion. In the opinion of management, such obligations will not have a material adverse effect the Company’s business, financial condition, results of operations or cash flows. |
Assets Held for Sale |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||
Assets Held for Sale | ASSETS HELD FOR SALE
During the three months ended June 24, 2016, the Company actively marketed equipment in its manufacturing facility located in Philadelphia, PA which the Company exited in the fourth quarter of fiscal 2015. The assets were written-down to fair value during the fiscal year ended September 25, 2015 and recorded as property, plant and equipment on the Company's condensed consolidated balance sheet. The equipment met all of the held for sale criteria in accordance with ASC 360 - Property, Plant and Equipment during the three months ended June 24, 2016. Consequently, the Company classified the assets as assets held for sale on the Company's condensed consolidated balance sheet. The total carrying value of the assets was $1,811. During the three months ended December 25, 2015, the Company exited a manufacturing facility located in Philadelphia, PA. As of December 25, 2015, the Company did not meet all of the held for sale criteria in accordance with ASC 360 - Property, Plant and Equipment. Consequently, the Company classified the property and the associated land value as assets held for sale on the Company's condensed consolidated balance sheet. The total carrying value of the land and property was $3,350. In a prior fiscal year, the Company entered into a share purchase agreement pursuant to which the Company would sell its minority ownership share in Abahsain-Cope Saudi Arabia Ltd. for cash consideration of approximately $10,000, which was paid into an escrow account in May 2012. All amounts paid into the escrow account have been distributed and the account has been closed. The total carrying value of the investment is $3,313. The Company will recognize the gain on the sale when transfer of ownership is completed. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | SEGMENT INFORMATION The Company has two operating segments, which are also its reportable segments. The Company’s operating segments are organized based upon primary market channels and, in most instances, the end use of products. Through its Electrical Raceway segment, the Company manufactures products that deploy, isolate and protect a structure’s electrical circuitry from the original power source to the final outlet. These products, which include electrical conduit, armored cable, cable trays, mounting systems and fittings, are critical components of the electrical infrastructure for new construction and maintenance, repair and remodel (“MR&R”) markets. The vast majority of the Company’s Electrical Raceway net sales are made to electrical distributors, who then serve electrical contractors and the Company considers both to be customers. Through the MP&S segment, the Company provides products and services that frame, support and secure component parts in a broad range of structures, equipment and systems in electrical, industrial and construction applications. The Company’s principal products in this segment are metal framing products and in-line galvanized mechanical tube. Through its metal framing business, the Company designs, manufactures and installs metal strut and fittings used to assemble mounting structures that support heavy equipment and electrical content in buildings and other structures. Both segments use Adjusted EBITDA as the primary measure of profit and loss. Segment Adjusted EBITDA is the sum of income (loss) from operations before income taxes, adjusted to exclude unallocated expenses, depreciation and amortization, gain on extinguishment of debt, interest expense, net, restructuring and impairments, net periodic pension benefit cost, stock-based compensation, legal settlements, ABF product liability impact, consulting fees, transaction costs and other items, such as lower of cost or market inventory adjustments and the impact of foreign exchange gains or losses related to our divestiture in Brazil and the impact from the Fence and Sprinkler exit. 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 Company’s consolidated results. Certain manufacturing and distribution expenses are allocated between the segments due to the shared nature of activities. Recorded amounts represent a proportional amount of the quantity of product produced for each segment.
Presented below is a reconciliation of operating segment Adjusted EBITDA to Income from operations before income taxes:
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Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Jun. 24, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation - The accompanying unaudited condensed consolidated financial statements of the Company included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These unaudited condensed consolidated financial statements have been prepared in accordance with the Company’s accounting policies and on the same basis as those financial statements included in the final prospectus filed with the SEC on June 9, 2016 in connection with the IPO (the "IPO Final Prospectus"), and should be read in conjunction with those unaudited condensed consolidated financial statements and the notes thereto. Certain information and disclosures normally included in our 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 balance sheet as of September 25, 2015 and the unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements for the fiscal year ended September 25, 2015 included in the IPO Final Prospectus. The unaudited condensed consolidated financial statements include the assets and liabilities used in operating the Company’s business. All intercompany balances and transactions have been eliminated in consolidation. The results of companies acquired or disposed of are included in the unaudited condensed consolidated financial statements from the effective date of acquisition or up to the date of disposal. These statements include all adjustments (consisting of normal recurring adjustments) that the Company considered necessary to present a fair statement of its results of operations, financial position and cash flows. The results reported in these unaudited condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. |
Fiscal Periods | Fiscal Periods - The Company has a 52- or 53-week fiscal year that ends on the last Friday in September. It is the Company’s practice to establish quarterly closings using a 4-5-4 calendar. Fiscal year 2015 was a 52-week fiscal year, which ended on September 25, 2015. Fiscal year 2016 will end on September 30, 2016, and will be a 53-week year. The Company’s fiscal quarters end on the last Friday in December, March and June. |
Use of Estimates | 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 consolidated financial statements and report the associated amounts of revenues and expenses. Significant estimates and assumptions are used for, but not limited to, allowances for doubtful accounts, estimates of future cash flows associated with asset impairments, useful lives for depreciation and amortization, loss contingencies, net realizable value of inventories, legal liabilities, income taxes and tax valuation allowances, pension and postretirement employee benefit liabilities and purchase price allocation. Actual results could differ materially from these estimates. |
Fair Value Measurements | Fair Value Measurements - Authoritative guidance for fair value measurements establishes a three-level hierarchy that ranks the quality and reliability of information used in developing fair value estimates. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. In cases where two or more levels of inputs are used to determine fair value, a financial instrument’s level is determined based on the lowest level input that is considered significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are summarized as follows: Level 1-inputs are based upon quoted prices (unadjusted) in active markets for identical assets or liabilities which are accessible as of the measurement date. Level 2-inputs are based upon quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations for the asset or liability that are derived principally from or corroborated by market data for which the primary inputs are observable, including forward interest rates, yield curves, credit risk and exchange rates. Level 3-inputs for the valuations are unobservable and are based on management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques such as option pricing models and discounted cash flow models. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements - On May 9, 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2016-12, "Amendments to Revenue Standard and Provides Practical Expedients," which addresses certain implementation issues related to ASU 2014-09, "Revenue from Contracts with Customers," such as collectibility, non-cash considerations and contract modifications. The revised effective date for public entities will be annual periods beginning after December 15, 2017, our fiscal 2019. Early adoption is permitted. The Company is evaluating the effect of adopting this new accounting guidance and its impact on the results of operations, cash flows or financial position. On April 14, 2016, the FASB issued ASU 2016-10, FASB Clarifies Guidance on Licensing and Identifying Performance Obligations, which amends the guidance on identifying performance obligations and the implementation guidance on licensing issued in ASU 2014-09, "Revenue from Contracts with Customers." The revised effective date for public entities will be annual periods beginning after December 15, 2017, our fiscal 2019. Early adoption is permitted. The Company is evaluating the effect of adopting this new accounting guidance and its impact on the results of operations, cash flows or financial position. |
Acquisitions (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Assets Acquired and Liabilities Assumed | The following table summarizes the Level 3 fair values assigned to the net assets acquired and liabilities assumed as of the acquisition date:
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Schedule of Fair Value of Amortizable Intangible Assets | The Company finalized the valuation of assets acquired and liabilities assumed during fiscal year 2015. The following table summarizes the fair value of amortizable intangible assets as of the acquisition dates:
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Property, Plant and Equipment (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property, Plant and Equipment | As of June 24, 2016 and September 25, 2015, property, plant and equipment at cost and accumulated depreciation were as follows:
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Goodwill and Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | There were no changes in the carrying amount of goodwill during the nine months ended June 24, 2016.
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Schedule of Finite-Lived Intangible Assets | The following table provides the gross carrying value, accumulated amortization, and net carrying value for each major class of intangible assets:
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Indefinite-Lived Intangible Assets | The following table provides the gross carrying value, accumulated amortization, and net carrying value for each major class of intangible assets:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Expected Amortization Expense for Intangible Assets | Expected amortization expense for intangible assets over the next five years and thereafter is as follows:
|
Accrued and Other Current Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 24, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued and Other Liabilities | As of June 24, 2016 and September 25, 2015, accrued and other current liabilities were comprised of:
|
Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 24, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Debt as of June 24, 2016 and September 25, 2015 was as follows:
|
Postretirement Benefits (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 24, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Benefit Cost | The net periodic benefit cost for the three and nine months ended June 24, 2016 and June 26, 2015 was as follows:
|
Earnings Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 24, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Basic and Diluted Net Income Per Share | There are no other potentially dilutive instruments outstanding.
|
Stock Incentive Plan (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 24, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assumptions | The assumptions used for re-measurement as of June 24, 2016 were as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock Option Activity | Stock option activity for the period September 25, 2015 to June 24, 2016 was as follows:
|
Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 24, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Measured on Recurring Basis | The following table presents the assets and liabilities measured at fair value on a recurring basis as of June 24, 2016 and September 25, 2015 in accordance with the fair value hierarchy:
|
Restructuring Charges (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 24, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserves | The remaining liability for restructuring reserves as of June 24, 2016 are included within accrued and other current liabilities in the Company’s condensed consolidated balance sheets as follows:
|
Assets Held for Sale (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 24, 2016 | |||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||
Schedule of Assets Held-for-sale | ASSETS HELD FOR SALE
|
Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 24, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Information | Presented below is a reconciliation of operating segment Adjusted EBITDA to Income from operations before income taxes:
Recorded amounts represent a proportional amount of the quantity of product produced for each segment.
|
Basis of Presentation and Summary of Significant Accounting Policies (Details) shares in Millions |
Jun. 09, 2016
$ / shares
shares
|
May 27, 2016 |
---|---|---|
Class of Stock [Line Items] | ||
Stock split of common stock | 1.37 | |
Investor | CD&R | ||
Class of Stock [Line Items] | ||
Ownership percentage | 80.10% | |
IPO | ||
Class of Stock [Line Items] | ||
Public offering price (in dollars per share) | $ / shares | $ 16.00 | |
Shares of common stock issued (shares) | shares | 12 |
Acquisitions - Narrative (Details) - USD ($) |
9 Months Ended | ||||
---|---|---|---|---|---|
Nov. 17, 2014 |
Oct. 20, 2014 |
Jun. 26, 2015 |
Jun. 24, 2016 |
Sep. 25, 2015 |
|
Business Acquisition [Line Items] | |||||
Aggregate purchase price | $ 30,440,000 | ||||
Goodwill | $ 115,829,000 | $ 115,829,000 | |||
APPI | |||||
Business Acquisition [Line Items] | |||||
Aggregate purchase price | $ 6,572,000 | ||||
Goodwill | $ 1,387,000 | ||||
SCI | |||||
Business Acquisition [Line Items] | |||||
Aggregate purchase price | $ 23,868,000 | ||||
Goodwill | $ 3,924,000 | ||||
Amortization period for tax-deductible goodwill | 15 years | ||||
Contingent consideration (not to exceed) | $ 500,000 | ||||
Best estimate of fair value, accrued and other current liabilities | $ 190,000 | ||||
Expired performance target period | 1 year |
Acquisitions - Net Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Nov. 17, 2014 |
Oct. 20, 2014 |
Jun. 24, 2016 |
Sep. 25, 2015 |
---|---|---|---|---|
Fair value of assets acquired and liabilities assumed: | ||||
Excess purchase price attributed to goodwill acquired | $ 115,829 | $ 115,829 | ||
APPI | ||||
Fair value of consideration transferred: | ||||
Cash consideration | $ 6,572 | |||
Fair value of assets acquired and liabilities assumed: | ||||
Accounts receivable | 1,813 | |||
Inventories | 1,850 | |||
Intangible assets | 480 | |||
Fixed assets | 2,907 | |||
Accounts payable | (1,057) | |||
Other | (808) | |||
Net assets acquired | 5,185 | |||
Excess purchase price attributed to goodwill acquired | $ 1,387 | |||
SCI | ||||
Fair value of consideration transferred: | ||||
Cash consideration | $ 23,837 | |||
Fair value of assets acquired and liabilities assumed: | ||||
Accounts receivable | 4,302 | |||
Inventories | 5,500 | |||
Intangible assets | 10,600 | |||
Fixed assets | 46 | |||
Accounts payable | (690) | |||
Other | 155 | |||
Net assets acquired | 19,913 | |||
Excess purchase price attributed to goodwill acquired | $ 3,924 |
Acquisitions - Fair Value of Amortizable Intangible Assets (Details) - USD ($) $ in Thousands |
Nov. 17, 2014 |
Oct. 20, 2014 |
---|---|---|
APPI | ||
Amortizable intangible assets: | ||
Fair Value | $ 480 | |
APPI | Customer Relationships | ||
Amortizable intangible assets: | ||
Fair Value | $ 300 | |
Weighted Average Useful Life (Years) | 10 years | |
APPI | Other | ||
Amortizable intangible assets: | ||
Fair Value | $ 180 | |
Weighted Average Useful Life (Years) | 4 years | |
SCI | ||
Amortizable intangible assets: | ||
Fair Value | $ 10,600 | |
SCI | Customer Relationships | ||
Amortizable intangible assets: | ||
Fair Value | $ 7,900 | |
Weighted Average Useful Life (Years) | 8 years | |
SCI | Other | ||
Amortizable intangible assets: | ||
Fair Value | $ 2,700 | |
Weighted Average Useful Life (Years) | 14 years |
Related Party Transactions (Details) - CD&R - Investor - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 24, 2016 |
Jun. 26, 2015 |
Jun. 24, 2016 |
Jun. 26, 2015 |
|
Consulting and Termination Fees | ||||
Related Party Transaction [Line Items] | ||||
Related party fees | $ 13,675,000 | $ 15,425,000 | ||
Termination Fee | ||||
Related Party Transaction [Line Items] | ||||
Related party fees | $ 12,800,000 | |||
Consulting Fees | ||||
Related Party Transaction [Line Items] | ||||
Annual consulting fee | $ 3,500,000 | |||
Related party fees | $ 875,000 | $ 2,625,000 |
Inventories, Net - Narrative (Details) - USD ($) $ in Thousands |
Jun. 24, 2016 |
Sep. 25, 2015 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Inventories at lower of LIFO cost or market | 85.00% | 80.00% |
Excess and obsolete inventory reserve | $ 10,179 | $ 10,201 |
Property, Plant and Equipment (Details) - USD ($) $ in Thousands |
Jun. 24, 2016 |
Sep. 25, 2015 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 372,009 | $ 365,000 |
Accumulated depreciation | (162,761) | (140,716) |
Property, plant and equipment, net | 209,248 | 224,284 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 12,804 | 13,294 |
Buildings and related improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 103,215 | 104,315 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 237,964 | 231,237 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | 5,850 | 5,572 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment | $ 12,176 | $ 10,582 |
Property, Plant and Equipment - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 24, 2016 |
Jun. 26, 2015 |
Jun. 24, 2016 |
Jun. 26, 2015 |
|
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 7,756 | $ 9,100 | $ 23,409 | $ 27,598 |
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands |
Jun. 24, 2016 |
Sep. 25, 2015 |
---|---|---|
Goodwill [Line Items] | ||
Goodwill | $ 162,753 | |
Accumulated impairment losses | (46,924) | |
Goodwill, net | 115,829 | $ 115,829 |
Electrical Raceway | ||
Goodwill [Line Items] | ||
Goodwill | 80,564 | |
Accumulated impairment losses | (3,924) | |
Goodwill, net | 76,640 | |
Mechanical Products & Solutions | ||
Goodwill [Line Items] | ||
Goodwill | 82,189 | |
Accumulated impairment losses | (43,000) | |
Goodwill, net | $ 39,189 |
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 24, 2016 |
Jun. 26, 2015 |
Jun. 24, 2016 |
Jun. 26, 2015 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Intangible asset amortization | $ 5,566 | $ 5,249 | $ 16,655 | $ 15,775 |
Goodwill and Intangible Assets - Expected Amortization Expense (Details) $ in Thousands |
Jun. 24, 2016
USD ($)
|
---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remaining in 2016 | $ 5,509 |
2017 | 21,736 |
2018 | 21,337 |
2019 | 21,181 |
2020 | 21,125 |
2021 | 20,528 |
Thereafter | $ 55,224 |
Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands |
Jun. 24, 2016 |
Sep. 25, 2015 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued compensation and employee benefits | $ 29,097 | $ 31,146 |
Accrued transportation costs | 12,991 | 13,627 |
Accrued interest | 8,622 | 9,890 |
Deferred gain on sale of investment | 9,088 | 9,121 |
Product liability | 2,700 | 2,700 |
Accrued professional services | 7,432 | 6,535 |
Accrued restructuring | 709 | 4,413 |
Other | 21,678 | 19,840 |
Accrued and other current liabilities | $ 92,317 | $ 97,272 |
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands |
Jun. 24, 2016 |
Sep. 25, 2015 |
---|---|---|
Debt Instrument [Line Items] | ||
Deferred financing costs | $ (9,137) | $ (11,622) |
Other | 0 | 1,644 |
Total debt | 631,471 | 652,208 |
Less: Current portion | 1,267 | 2,864 |
Long-term debt | 630,204 | 649,344 |
Secured Debt | First lien loan due April 9, 2021 | ||
Debt Instrument [Line Items] | ||
Term Loan Facilities | 411,225 | 414,150 |
Secured Debt | Second lien loan due October 9, 2021 | ||
Debt Instrument [Line Items] | ||
Term Loan Facilities | $ 229,383 | $ 248,036 |
Debt - ABL Credit Facility - Narrative (Details) - Atkore International - Line of Credit - ABL Credit Facility - USD ($) |
9 Months Ended | |
---|---|---|
Jun. 24, 2016 |
Sep. 25, 2015 |
|
Debt Instrument [Line Items] | ||
Aggregate commitments | $ 325,000,000 | |
Credit availability | $ 244,663,000 | $ 255,755,000 |
Borrowing base percentage of eligible accounts receivable | 85.00% | |
Borrowing base percentage of eligible inventory (plus) | 80.00% | |
LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Applicable margin | 1.50% | |
LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Applicable margin | 2.00% | |
Alternate Base Rate | Minimum | ||
Debt Instrument [Line Items] | ||
Applicable margin | 0.50% | |
Alternate Base Rate | Maximum | ||
Debt Instrument [Line Items] | ||
Applicable margin | 1.00% |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 24, 2016 |
Jun. 26, 2015 |
Jun. 24, 2016 |
Jun. 26, 2015 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 34.20% | (16.40%) | 35.80% | (1.00%) |
Income tax expense (benefit) | $ 10,749 | $ (2,683) | $ 24,093 | $ (227) |
Released valuation allowance | $ 1,360 |
Postretirement Benefits - Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 24, 2016 |
Jun. 26, 2015 |
Jun. 24, 2016 |
Jun. 26, 2015 |
|
Defined Benefit Plan Disclosure [Line Items] | ||||
Net periodic benefit cost | $ 110 | $ 145 | $ 330 | $ 434 |
Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 474 | 627 | 1,420 | 1,882 |
Interest cost | 1,036 | 1,196 | 3,107 | 3,588 |
Expected return on plan assets | (1,580) | (1,701) | (4,738) | (5,102) |
Amortization of actuarial loss | 180 | 22 | 541 | 66 |
Net periodic benefit cost | $ 110 | $ 144 | $ 330 | $ 434 |
Postretirement Benefits - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jun. 24, 2016 |
Jun. 26, 2015 |
Jun. 24, 2016 |
Jun. 26, 2015 |
Sep. 25, 2015 |
|
Compensation and Retirement Disclosure [Abstract] | |||||
Company contributions | $ 26 | $ 252 | $ 279 | $ 882 | |
Multi-employer Pension Plan | |||||
Multiemployer Plans [Line Items] | |||||
Liability | $ 6,575 | $ 6,575 | $ 6,844 |
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 24, 2016 |
Jun. 26, 2015 |
Jun. 24, 2016 |
Jun. 26, 2015 |
|
Basic and Diluted Earnings per Share Numerator: | ||||
Net income | $ 20,645 | $ 19,058 | $ 43,224 | $ 22,096 |
Basic and Diluted Earnings per Share Denominator: | ||||
Weighted average shares outstanding (shares) | 62,492 | 62,513 | 62,491 | 62,528 |
Basic and Diluted net income per share (in dollars per share) | $ 0.33 | $ 0.30 | $ 0.69 | $ 0.35 |
Stock Incentive Plan - Assumptions (Details) |
9 Months Ended |
---|---|
Jun. 24, 2016
$ / shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value of common stock (in dollars per share) | $ 16.07 |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected dividend yield | 0.00% |
Expected volatility | 35.00% |
Range of risk free interest rates, minimum | 0.66% |
Range of risk free interest rates, maximum | 1.28% |
Stock Options | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of expected option lives | 2 years 1 month 21 days |
Range of fair values per option (in dollars per share) | $ 6.07 |
Stock Options | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Range of expected option lives | 6 years 5 months 16 days |
Range of fair values per option (in dollars per share) | $ 10.00 |
Stock Incentive Plan - Options Activity (Details) - $ / shares shares in Thousands |
9 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 24, 2016 |
Jun. 26, 2015 |
Sep. 25, 2015 |
|
Shares | |||
Outstanding, beginning balance (shares) | 6,746 | ||
Granted (shares) | 34 | ||
Exercised (shares) | (18) | (220) | |
Forfeited (shares) | (80) | ||
Outstanding, ending balance (shares) | 6,682 | 6,746 | |
Vested (shares) | 3,937 | ||
Weighted-Average Exercise Price | |||
Outstanding, beginning balance (in dollars per share) | $ 7.70 | ||
Granted (in dollars per share) | 13.62 | ||
Exercised (in dollars per share) | 7.86 | ||
Forfeited (in dollars per share) | 8.27 | ||
Outstanding, ending balance (in dollars per share) | 7.73 | $ 7.70 | |
Vested (in dollars per share) | $ 7.52 | ||
Weighted-Average Remaining Contractual Term (in years) | |||
Outstanding | 6 years 6 months 7 days | 7 years 4 months 24 days | |
Granted | 10 years | ||
Vested | 6 years 15 days |
Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands |
Jun. 24, 2016 |
Sep. 25, 2015 |
---|---|---|
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 108,026 | $ 54,032 |
Assets held for sale | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Assets held for sale | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Assets held for sale | $ 8,474 | $ 3,313 |
Restructuring Charges - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 24, 2016 |
Jun. 26, 2015 |
Jun. 24, 2016 |
Jun. 26, 2015 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Severance-related and other charges | $ 475 | $ 2,580 | $ 642 | |
Severance-related and other charges | Exit of Fence and Sprinkler | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance-related and other charges related to exit of product lines | $ 326 | $ 2,395 |
Commitments and Contingencies (Details) - USD ($) |
Jun. 24, 2016 |
Dec. 25, 2015 |
Sep. 25, 2015 |
---|---|---|---|
Commitments and Contingencies Disclosure [Abstract] | |||
Purchase obligations for rest of fiscal year | $ 78,968,000 | ||
Purchase obligations for year two | 3,455,000 | ||
Purchase obligations thereafter | 1,360,000 | ||
Loss Contingencies [Line Items] | |||
Product liability | 2,700,000 | $ 2,700,000 | |
Unasserted Claim [Member] | |||
Loss Contingencies [Line Items] | |||
Non-product legal liabilities | 2,617,000 | ||
Special Products Claims and Other Product Liabilities | Minimum | |||
Loss Contingencies [Line Items] | |||
Probable losses | 3,000,000 | ||
Special Products Claims and Other Product Liabilities | Maximum | |||
Loss Contingencies [Line Items] | |||
Probable losses | 10,000,000 | ||
Special Products Claims | |||
Loss Contingencies [Line Items] | |||
Product liability | $ 2,428,000 | 2,783,000 | |
Other Product Liability | |||
Loss Contingencies [Line Items] | |||
Product liability | $ 3,276,000 | $ 2,666,000 |
Guarantees (Details) $ in Thousands |
Jun. 24, 2016
USD ($)
|
Sep. 25, 2015
payment
|
---|---|---|
Workers' compensation and general liability insurance policies | ||
Guarantor Obligations [Line Items] | ||
Guarantees | $ 7,310 | |
Foreign lines of credit | ||
Guarantor Obligations [Line Items] | ||
Guarantees | 1,500 | |
Sale of minority ownership | ||
Guarantor Obligations [Line Items] | ||
Guarantees | 9,121 | |
Number of advance payments | payment | 4 | |
Surety bond | ||
Guarantor Obligations [Line Items] | ||
Guarantees | $ 15,389 |
Assets Held for Sale (Details) - USD ($) $ in Thousands |
Jun. 24, 2016 |
Sep. 25, 2015 |
---|---|---|
Discontinued Operations and Disposal Groups [Abstract] | ||
Assets held for sale | $ 8,474 | $ 3,313 |
Segment Information - Narrative (Details) |
9 Months Ended |
---|---|
Jun. 24, 2016
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Number of reportable segments | 2 |
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