(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits |
Exhibit No. | Description | |||||||
Press Release of the Company, dated | ||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
HAYWARD HOLDINGS, INC. | ||||||||
Date: | By: | /s/ Eifion Jones | ||||||
Eifion Jones | ||||||||
Senior Vice President and Chief Financial Officer |
September 30, 2023 | December 31, 2022 | |||||||||||||
Assets | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | $ | 244,245 | $ | 56,177 | ||||||||||
Accounts receivable, net of allowances of $3,027 and $3,937, respectively | 125,493 | 209,109 | ||||||||||||
Inventories, net | 221,450 | 283,658 | ||||||||||||
Prepaid expenses | 12,756 | 14,981 | ||||||||||||
Income tax receivable | 23,224 | 27,173 | ||||||||||||
Other current assets | 15,729 | 21,186 | ||||||||||||
Total current assets | 642,897 | 612,284 | ||||||||||||
Property, plant, and equipment, net of accumulated depreciation of $92,163 and $84,119, respectively | 159,527 | 149,828 | ||||||||||||
Goodwill | 932,216 | 932,396 | ||||||||||||
Trademark | 736,000 | 736,000 | ||||||||||||
Customer relationships, net | 211,727 | 230,503 | ||||||||||||
Other intangibles, net | 97,595 | 106,673 | ||||||||||||
Other non-current assets | 103,120 | 107,329 | ||||||||||||
Total assets | $ | 2,883,082 | $ | 2,875,013 | ||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||
Current liabilities | ||||||||||||||
Current portion of the long-term debt | $ | 14,646 | $ | 14,531 | ||||||||||
Accounts payable | 47,616 | 54,022 | ||||||||||||
Accrued expenses and other liabilities | 135,620 | 163,283 | ||||||||||||
Income taxes payable | — | 574 | ||||||||||||
Total current liabilities | 197,882 | 232,410 | ||||||||||||
Long-term debt, net | 1,080,259 | 1,085,055 | ||||||||||||
Deferred tax liabilities, net | 258,514 | 264,111 | ||||||||||||
Other non-current liabilities | 66,093 | 70,403 | ||||||||||||
Total liabilities | 1,602,748 | 1,651,979 | ||||||||||||
Stockholders’ equity | ||||||||||||||
Preferred stock, $0.001 par value, 100,000,000 authorized, no shares issued or outstanding as of September 30, 2023 and December 31, 2022 | — | — | ||||||||||||
Common stock $0.001 par value, 750,000,000 authorized; 242,356,177 issued and 213,689,808 outstanding at September 30, 2023; 240,529,150 issued and 211,862,781 outstanding at December 31, 2022 | 243 | 241 | ||||||||||||
Additional paid-in capital | 1,078,200 | 1,069,878 | ||||||||||||
Common stock in treasury; 28,666,369 and 28,666,369 at September 30, 2023 and December 31, 2022, respectively | (357,637) | (357,415) | ||||||||||||
Retained earnings | 549,873 | 500,222 | ||||||||||||
Accumulated other comprehensive income | 9,655 | 10,108 | ||||||||||||
Total stockholders’ equity | 1,280,334 | 1,223,034 | ||||||||||||
Total liabilities, redeemable stock, and stockholders’ equity | $ | 2,883,082 | $ | 2,875,013 |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, 2023 | October 1, 2022 | September 30, 2023 | October 1, 2022 | |||||||||||||||||||||||
Net sales | $ | 220,304 | $ | 245,267 | $ | 713,983 | $ | 1,055,169 | ||||||||||||||||||
Cost of sales | 114,893 | 137,483 | 374,171 | 567,626 | ||||||||||||||||||||||
Gross profit | 105,411 | 107,784 | 339,812 | 487,543 | ||||||||||||||||||||||
Selling, general, and administrative expense | 59,454 | 50,493 | 172,057 | 188,297 | ||||||||||||||||||||||
Research, development, and engineering expense | 6,177 | 6,142 | 19,027 | 16,411 | ||||||||||||||||||||||
Acquisition and restructuring related expense | 3,348 | 2,288 | 6,220 | 9,499 | ||||||||||||||||||||||
Amortization of intangible assets | 7,523 | 8,521 | 22,777 | 23,828 | ||||||||||||||||||||||
Operating income | 28,909 | 40,340 | 119,731 | 249,508 | ||||||||||||||||||||||
Interest expense, net | 17,448 | 13,938 | 55,939 | 35,105 | ||||||||||||||||||||||
Other (income) expense, net | 1,932 | (234) | 1,798 | 3,056 | ||||||||||||||||||||||
Total other expense | 19,380 | 13,704 | 57,737 | 38,161 | ||||||||||||||||||||||
Income from operations before income taxes | 9,529 | 26,636 | 61,994 | 211,347 | ||||||||||||||||||||||
Provision (benefit) for income taxes | (2,259) | 3,549 | 12,343 | 47,968 | ||||||||||||||||||||||
Net income | $ | 11,788 | $ | 23,087 | $ | 49,651 | $ | 163,379 | ||||||||||||||||||
Earnings per share | ||||||||||||||||||||||||||
Basic | $ | 0.06 | $ | 0.11 | $ | 0.23 | $ | 0.74 | ||||||||||||||||||
Diluted | $ | 0.05 | $ | 0.10 | $ | 0.23 | $ | 0.70 | ||||||||||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||||||
Basic | 213,416,502 | 212,905,429 | 212,933,763 | 222,009,824 | ||||||||||||||||||||||
Diluted | 220,863,228 | 222,006,615 | 220,634,232 | 232,131,395 |
Hayward Holdings, Inc. Unaudited Condensed Consolidated Statements of Cash Flows (In thousands) | Nine Months Ended | |||||||||||||
September 30, 2023 | October 1, 2022 | |||||||||||||
Cash flows from operating activities | ||||||||||||||
Net income | $ | 49,651 | $ | 163,379 | ||||||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||||
Depreciation | 13,018 | 13,931 | ||||||||||||
Amortization of intangible assets | 27,803 | 28,437 | ||||||||||||
Amortization of deferred debt issuance fees | 3,458 | 2,312 | ||||||||||||
Stock-based compensation | 6,701 | 5,787 | ||||||||||||
Deferred income taxes | (5,965) | (4,221) | ||||||||||||
Allowance for bad debts | (906) | 869 | ||||||||||||
Loss on disposal of property, plant and equipment | 945 | 5,550 | ||||||||||||
Changes in operating assets and liabilities | ||||||||||||||
Accounts receivable | 85,216 | 96,874 | ||||||||||||
Inventories | 61,715 | (70,469) | ||||||||||||
Other current and non-current assets | 9,500 | (16,902) | ||||||||||||
Accounts payable | (6,265) | (24,472) | ||||||||||||
Accrued expenses and other liabilities | (27,934) | (57,411) | ||||||||||||
Net cash provided by operating activities | 216,937 | 143,664 | ||||||||||||
Cash flows from investing activities | ||||||||||||||
Purchases of property, plant, and equipment | (22,623) | (23,533) | ||||||||||||
Acquisitions, net of cash acquired | — | (61,337) | ||||||||||||
Proceeds from sale of property, plant, and equipment | 13 | 4 | ||||||||||||
Net cash used by investing activities | (22,610) | (84,866) | ||||||||||||
Cash flows from financing activities | ||||||||||||||
Proceeds from revolving credit facility | 144,100 | 150,000 | ||||||||||||
Payments on revolving credit facility | (144,100) | (50,000) | ||||||||||||
Proceeds from issuance of long-term debt | 3,320 | — | ||||||||||||
Payments of long-term debt | (9,325) | (7,500) | ||||||||||||
Proceeds from issuance of short-term notes payable | 6,130 | 8,119 | ||||||||||||
Payments of short-term notes payable | (5,174) | (2,849) | ||||||||||||
Purchase of common stock for treasury | (222) | (343,319) | ||||||||||||
Other, net | 73 | (398) | ||||||||||||
Net cash used by financing activities | (5,198) | (245,947) | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | (1,061) | (5,740) | ||||||||||||
Change in cash and cash equivalents and restricted cash | 188,068 | (192,889) | ||||||||||||
Cash and cash equivalents and restricted cash, beginning of period | 56,177 | 265,796 | ||||||||||||
Cash and cash equivalents and restricted cash, end of period | $ | 244,245 | $ | 72,907 | ||||||||||
Supplemental disclosures of cash flow information | ||||||||||||||
Cash paid-interest | $ | 56,438 | $ | 32,725 | ||||||||||
Cash paid-income taxes | 14,913 | 93,503 | ||||||||||||
Equipment financed under finance leases | — | 1,603 |
(Dollars in thousands) | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, 2023 | October 1, 2022 | September 30, 2023 | October 1, 2022 | |||||||||||||||||||||||
Net income | $ | 11,788 | $ | 23,087 | $ | 49,651 | $ | 163,379 | ||||||||||||||||||
Depreciation | 4,428 | 4,333 | 13,018 | 13,931 | ||||||||||||||||||||||
Amortization | 9,260 | 10,249 | 27,803 | 28,437 | ||||||||||||||||||||||
Interest expense | 17,448 | 13,938 | 55,939 | 35,105 | ||||||||||||||||||||||
Income taxes | (2,259) | 3,549 | 12,343 | 47,968 | ||||||||||||||||||||||
EBITDA | 40,665 | 55,156 | 158,754 | 288,820 | ||||||||||||||||||||||
Stock-based compensation (a) | 269 | (4) | 1,001 | 1,248 | ||||||||||||||||||||||
Currency exchange items (b) | 145 | 52 | 1,276 | 2,776 | ||||||||||||||||||||||
Acquisition and restructuring related expense, net (c) | 3,348 | 2,288 | 6,220 | 9,499 | ||||||||||||||||||||||
Other (d) | 2,784 | 2,935 | 4,367 | 11,970 | ||||||||||||||||||||||
Total Adjustments | 6,546 | 5,271 | 12,864 | 25,493 | ||||||||||||||||||||||
Adjusted EBITDA | $ | 47,211 | $ | 60,427 | $ | 171,618 | $ | 314,313 | ||||||||||||||||||
Adjusted EBITDA margin | 21.4 | % | 24.6 | % | 24.0 | % | 29.8 | % |
(a) | Represents non-cash stock-based compensation expense related to equity awards issued to management, employees, and directors. The adjustment includes only expense related to awards issued under the 2017 Equity Incentive Plan, which were awards granted prior to the effective date of Hayward’s initial public offering (the “IPO”). | |||||||
(b) | Represents unrealized non-cash losses on foreign denominated monetary assets and liabilities and foreign currency contracts. | |||||||
(c) | Adjustments in the three months ended September 30, 2023 are primarily driven by $1.9 million of separation costs associated with the centralization of operations in Europe and $1.5 million of costs associated with the relocation of the corporate headquarters. Adjustments in the three months ended October 1, 2022 primarily include $1.3 million of costs associated with the reduction-in-force as part of the 2022 enterprise cost reduction program and $1.1 million of costs associated with the relocation of the corporate headquarters, partially offset by other individual immaterial items. Adjustments in the nine months ended September 30, 2023 are primarily driven by $2.1 million of costs associated with the relocation of the corporate headquarters, $1.9 million of separation costs associated with the centralization of operations in Europe, $1.3 million of separation costs associated with the enterprise cost-reduction program initiated in 2022 and $0.8 million of integration costs from prior acquisitions. Adjustments in the nine months ended October 1, 2022 are primarily driven by $4.2 million of costs associated with the relocation of the corporate headquarters, $3.1 million of transaction costs associated with the acquisition of the specialty lighting business of Halco Technologies, LLC (the “Specialty Lighting Business”), $1.4 million of costs associated with the reduction-in-force and other individual immaterial items. | |||||||
(d) | Adjustments in the three months ended September 30, 2023 primarily include $1.9 million of costs related to inventory and fixed assets as part of the centralization of operations in Europe and $0.8 million of costs incurred related to the selling stockholder offerings of shares during 2023, which are reported in SG&A in the unaudited condensed consolidated statement of operations. Adjustments in the three months ended October 1, 2022 are primarily driven by a $2.7 million non-cash increase in cost of goods sold resulting from the fair value inventory step-up adjustment recognized as part of the purchase accounting for the Specialty Lighting Business. Adjustments in the nine months ended September 30, 2023 primarily includes $1.9 million of costs related to inventory and fixed assets as part of the centralization of operations in Europe, $1.5 million of costs associated with follow-on equity offerings, $0.4 million of transitional expenses incurred to enable go-forward public company regulatory compliance and other miscellaneous items the Company believes are not representative of its ongoing business operations. Adjustments in the nine months ended October 1, 2022 are primarily driven by a one-time $5.5 million expense associated with the discontinuation of a product joint development agreement, a $2.7 million non-cash increase in cost of goods sold resulting from the fair value inventory step-up adjustment recognized as part of the purchase accounting for the Specialty Lighting Business, $1.4 million of transitional expenses incurred to enable go-forward public company regulatory compliance, $1.2 million of costs associated with follow-on equity offerings, $0.9 million of expenses related to the corporate headquarters transition, $0.4 million of bad debt reserves related to certain customers impacted by the conflict between Russia and Ukraine, net of subsequent collections, and other immaterial items, partially offset by $1.1 million of gains resulting from an insurance policy reimbursement related to the fire incident in Yuncos, Spain. |
(Dollars in thousands) | Last Twelve Months(e) | Fiscal Year | ||||||||||||
September 30, 2023 | December 31, 2022 | |||||||||||||
Net income | $ | 65,619 | $ | 179,347 | ||||||||||
Depreciation | 18,333 | 19,246 | ||||||||||||
Amortization | 37,759 | 38,393 | ||||||||||||
Interest expense | 72,221 | 51,387 | ||||||||||||
Income taxes | 19,265 | 54,890 | ||||||||||||
EBITDA | 213,197 | 343,263 | ||||||||||||
Stock-based compensation (a) | 1,355 | 1,602 | ||||||||||||
Currency exchange items (b) | (574) | 926 | ||||||||||||
Acquisition and restructuring related expense, net (c) | 4,883 | 8,162 | ||||||||||||
Other (d) | 6,019 | 13,622 | ||||||||||||
Total Adjustments | 11,683 | 24,312 | ||||||||||||
Adjusted EBITDA | $ | 224,880 | $ | 367,575 | ||||||||||
Adjusted EBITDA margin | 23.1 | % | 28.0 | % |
(a) | Represents non-cash stock-based compensation expense related to equity awards issued to management, employees, and directors. The adjustment includes only expense related to awards issued under the 2017 Equity Incentive Plan, which were awards granted prior to the effective date of the IPO. | |||||||
(b) | Represents unrealized non-cash losses on foreign denominated monetary assets and liabilities and foreign currency contracts. | |||||||
(c) | Adjustments in the last twelve months ended September 30, 2023 include $2.9 million of costs associated with the relocation of the corporate headquarters, $2.9 million separation costs associated with a reduction-in-force from the 2022 enterprise cost-reduction program, $1.9 million of separation costs associated with the centralization of operations in Europe, $0.8 million of integration costs from prior acquisitions and other immaterial items, partially offset by a $2.4 million gain resulting from the release of certain reserves associated with the exit of an early-stage product line discontinued in 2021 and a $1.3 million purchase-price adjustment related to the acquisition of the Specialty Lighting Business. Adjustments in the year ended December 31, 2022 primarily include $5.0 million of costs associated with the relocation of the corporate headquarters, $2.9 million separation costs associated with a reduction-in-force, and $1.9 million transaction costs associated with the acquisition of the Specialty Lighting Business, partially offset by a $2.4 million gain resulting from the release of certain reserves associated with the exit of an early-stage product line discontinued in 2021. | |||||||
(d) | Adjustments in the last twelve months ended September 30, 2023 include $1.9 million of costs related to inventory and fixed assets as part of the centralization of operations in Europe, $1.7 million of costs associated with follow-on equity offerings, $1.2 million of transitional expenses incurred to enable go-forward public company regulatory compliance and a $0.7 million non-cash increase in cost of goods sold resulting from the fair value inventory step-up adjustment recognized as part of the purchase accounting for the Specialty Lighting Business. Adjustments in the year ended December 31, 2022 include $5.5 million of expenses associated with the discontinuation of a product joint development agreement, a $3.3 million non-cash increase in cost of goods sold resulting from the fair value inventory step-up adjustment recognized as part of the purchase accounting for the Specialty Lighting Business, $2.3 million of transitional expenses incurred to enable go-forward public company regulatory compliance, $1.4 million of costs incurred related to the selling stockholder offering of shares in May 2022, which are reported in SG&A in the consolidated statements of operations, $0.9 million of expenses related to the corporate headquarters transition, $0.2 million bad debt reserves related to certain customers impacted by the conflict between Russia and Ukraine, and other immaterial items, partially offset by subsequent collections and $1.1 million of gains resulting from an insurance policy reimbursement related to the fire incident in the manufacturing and administrative facilities in Yuncos, Spain. | |||||||
(e) | Items for the last twelve months ended September 30, 2023 are calculated by adding the items for the nine months ended September 30, 2023 plus fiscal year ended December 31, 2022 and subtracting the items for the nine months ended October 1, 2022. |
(Dollars in thousands) | Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, 2023 | October 1, 2022 | September 30, 2023 | October 1, 2022 | |||||||||||||||||||||||
Net income | $ | 11,788 | $ | 23,087 | $ | 49,651 | $ | 163,379 | ||||||||||||||||||
Tax adjustments (a) | (4,401) | (2,897) | (2,905) | (3,128) | ||||||||||||||||||||||
Other adjustments and amortization: | ||||||||||||||||||||||||||
Stock-based compensation (b) | 269 | (4) | 1,001 | 1,248 | ||||||||||||||||||||||
Currency exchange items (c) | 145 | 52 | 1,276 | 2,776 | ||||||||||||||||||||||
Acquisition and restructuring related expense, net (d) | 3,348 | 2,288 | 6,220 | 9,499 | ||||||||||||||||||||||
Other (e) | 2,784 | 2,935 | 4,367 | 11,970 | ||||||||||||||||||||||
Total other adjustments | 6,546 | 5,271 | 12,864 | 25,493 | ||||||||||||||||||||||
Amortization | 9,260 | 10,249 | 27,803 | 28,437 | ||||||||||||||||||||||
Tax effect (f) | (3,554) | (3,756) | (9,838) | (13,066) | ||||||||||||||||||||||
Certain transaction-related adjustments (g): | ||||||||||||||||||||||||||
Acquisitions | — | — | — | 2,761 | ||||||||||||||||||||||
Tax effect (f) | — | — | — | (667) | ||||||||||||||||||||||
Adjusted net income | $ | 19,639 | $ | 31,954 | $ | 77,575 | $ | 203,209 | ||||||||||||||||||
Weighted average number of common shares outstanding, basic | 213,416,502 | 212,905,429 | 212,933,763 | 222,009,824 | ||||||||||||||||||||||
Weighted average number of common shares outstanding, diluted | 220,863,228 | 222,006,615 | 220,634,232 | 232,131,395 | ||||||||||||||||||||||
Basic EPS | $ | 0.06 | $ | 0.11 | $ | 0.23 | $ | 0.74 | ||||||||||||||||||
Diluted EPS | $ | 0.05 | $ | 0.10 | $ | 0.23 | $ | 0.70 | ||||||||||||||||||
Adjusted basic EPS | $ | 0.09 | $ | 0.15 | $ | 0.36 | $ | 0.92 | ||||||||||||||||||
Adjusted diluted EPS | $ | 0.09 | $ | 0.14 | $ | 0.35 | $ | 0.88 |
(a) | Tax adjustments for the three and nine months ended September 30, 2023 reflect a normalized tax rate of 22.5% and 24.2% compared to the Company’s effective tax rate of (23.7)% and 19.9%. The Company’s effective tax rate for the three months ended September 30, 2023 includes the tax benefits resulting from the exercise of stock options, the release of the valuation allowance against foreign tax credit carryovers and prior period return-to-provision adjustments, while the nine months ended rate includes the aforementioned items, partially offset by the impact of a discrete tax expense related to a change in the indefinite reinvestment assertion for one jurisdiction. Tax adjustments for the three and nine months ended October 1, 2022 reflect a normalized tax rate of 24.2% and 24.5% compared to the effective tax rates of 13.3% and 22.7%, respectively. The Company’s effective tax rate for the three and nine months ended October 1, 2022 includes the impact of the revaluation of deferred tax liabilities as a result of state tax law changes and the tax benefit resulting from the exercise of stock options. All non-tax adjustments are effected at the normalized rate. | |||||||
(b) | Represents non-cash stock-based compensation expense related to equity awards issued to management, employees, and directors. The adjustment includes only expense related to awards issued under the 2017 Equity Incentive Plan, which were awards granted prior to the effective date of the IPO. | |||||||
(c) | Represents unrealized non-cash losses on foreign denominated monetary assets and liabilities and foreign currency contracts. | |||||||
(d) | Adjustments in the three months ended September 30, 2023 are primarily driven by $1.9 million of separation costs associated with the centralization of operations in Europe and $1.5 million of costs associated with the relocation of the corporate headquarters. Adjustments in the three months ended October 1, 2022 primarily include $1.3 million of costs associated with the reduction-in-force as part of the 2022 enterprise cost reduction program and $1.1 million of costs associated with the relocation of the corporate headquarters, partially offset by other individual immaterial items. Adjustments in the nine months ended September 30, 2023 are primarily driven by $2.1 million of costs associated with the relocation of the corporate headquarters, $1.9 million of separation costs associated with the centralization of operations in Europe, $1.3 million of separation costs associated with the enterprise cost-reduction program initiated in 2022 and $0.8 million of integration costs from prior acquisitions. Adjustments in the nine months ended October 1, 2022 are primarily driven by $4.4 million of costs associated with the relocation of the corporate headquarters, $3.1 million of transaction costs associated with the acquisition of the Specialty Lighting Business, $1.4 million of costs associated with the reduction-in-force and other individual immaterial items. | |||||||
(e) | Adjustments in the three months ended September 30, 2023 primarily include $1.9 million of costs related to inventory and fixed assets as part of the centralization of operations in Europe and $0.8 million of costs incurred related to the selling stockholder offerings of shares during 2023, which are reported in SG&A in the unaudited condensed consolidated statement of operations. Adjustments in the three months ended October 1, 2022 are primarily driven by a $2.7 million non-cash increase in cost of goods sold resulting from the fair value inventory step-up adjustment recognized as part of the purchase accounting for the Specialty Lighting Business. Adjustments in the nine months ended September 30, 2023 primarily includes $1.9 million of costs related to inventory and fixed assets as part of the centralization of operations in Europe, $1.5 million of costs associated with follow-on equity offerings, $0.4 million of transitional expenses incurred to enable go-forward public company regulatory compliance and other miscellaneous items the Company believes are not representative of its ongoing business operations. Adjustments in the nine months ended October 1, 2022 are primarily driven by a one-time $5.5 million expense associated with the discontinuation of a product joint development agreement, a $2.7 million non-cash increase in cost of goods sold resulting from the fair value inventory step-up adjustment recognized as part of the purchase accounting for the Specialty Lighting Business, $1.4 million of transitional expenses incurred to enable go-forward public company regulatory compliance, $1.2 million of costs associated with follow-on equity offerings, $0.9 million of expenses related to the corporate headquarters transition, $0.4 million of bad debt reserves related to certain customers impacted by the conflict between Russia and Ukraine, net of subsequent collections, and other immaterial items, partially offset by $1.1 million of gains resulting from an insurance policy reimbursement related to the fire incident in Yuncos, Spain. | |||||||
(f) | The tax effect represents the immediately preceding adjustments at the normalized tax rates as discussed in footnote (a) above. | |||||||
(g) | The adjustments for the nine months ended October 1, 2022 represent adjustments related to the acquisition of the Specialty Lighting Business as if the acquisition had occurred at the beginning of the period. |
(Dollars in thousands) | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||||||||
September 30, 2023 | October 1, 2022 | |||||||||||||||||||||||||||||||||||||
Total | NAM | E&RW | Total | NAM | E&RW | |||||||||||||||||||||||||||||||||
Net sales | $ | 220,304 | $ | 185,070 | $ | 35,234 | $ | 245,267 | $ | 203,674 | $ | 41,593 | ||||||||||||||||||||||||||
Gross profit | $ | 105,411 | $ | 91,456 | $ | 13,955 | $ | 107,784 | $ | 91,850 | $ | 15,934 | ||||||||||||||||||||||||||
Gross profit margin % | 47.8 | % | 49.4 | % | 39.6 | % | 43.9 | % | 45.1 | % | 38.3 | % | ||||||||||||||||||||||||||
Income from operations before income taxes | $ | 9,529 | $ | 26,636 | ||||||||||||||||||||||||||||||||||
Expenses not allocated to segments | ||||||||||||||||||||||||||||||||||||||
Corporate expense, net | 6,741 | 6,344 | ||||||||||||||||||||||||||||||||||||
Acquisition and restructuring related expense | 3,348 | 2,288 | ||||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 7,523 | 8,521 | ||||||||||||||||||||||||||||||||||||
Interest expense, net | 17,448 | 13,938 | ||||||||||||||||||||||||||||||||||||
Other (income) expense, net | 1,932 | (234) | ||||||||||||||||||||||||||||||||||||
Segment income | $ | 46,521 | $ | 40,108 | $ | 6,413 | $ | 57,493 | $ | 48,704 | $ | 8,789 | ||||||||||||||||||||||||||
Segment income margin % | 21.1 | % | 21.7 | % | 18.2 | % | 23.4 | % | 23.9 | % | 21.1 | % | ||||||||||||||||||||||||||
Depreciation | $ | 4,273 | $ | 4,027 | $ | 246 | $ | 4,049 | $ | 3,853 | $ | 196 | ||||||||||||||||||||||||||
Amortization | 1,738 | 1,738 | — | 1,728 | 1,728 | — | ||||||||||||||||||||||||||||||||
Stock-based compensation | 86 | 75 | 11 | (276) | (284) | 8 | ||||||||||||||||||||||||||||||||
Other (a) | 115 | 115 | — | 2,516 | 2,878 | (362) | ||||||||||||||||||||||||||||||||
Total adjustments | 6,212 | 5,955 | 257 | 8,017 | 8,175 | (158) | ||||||||||||||||||||||||||||||||
Adjusted segment income | $ | 52,733 | $ | 46,063 | $ | 6,670 | $ | 65,510 | $ | 56,879 | $ | 8,631 | ||||||||||||||||||||||||||
Adjusted segment income margin % | 23.9 | % | 24.9 | % | 18.9 | % | 26.7 | % | 27.9 | % | 20.8 | % | ||||||||||||||||||||||||||
(a) | The three months ended September 30, 2023 for NAM includes miscellaneous items the Company believes are not representative of its ongoing business operations. The three months ended October 1, 2022 includes a $2.7 million non-cash increase in cost of goods sold resulting from the fair value inventory step-up adjustment recognized as part of the purchase accounting for the Specialty Lighting Business. | |||||||
The three months ended October 1, 2022 for E&RW includes $0.4 million of collections associated with previous bad debt write-offs related to certain customers impacted by the conflict between Russia and Ukraine. |
(Dollars in thousands) | Nine Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||||
September 30, 2023 | October 1, 2022 | |||||||||||||||||||||||||||||||||||||
Total | NAM | E&RW | Total | NAM | E&RW | |||||||||||||||||||||||||||||||||
Net sales | $ | 713,983 | $ | 585,126 | $ | 128,857 | $ | 1,055,169 | $ | 892,050 | $ | 163,119 | ||||||||||||||||||||||||||
Gross profit | $ | 339,812 | $ | 288,911 | $ | 50,901 | $ | 487,543 | $ | 421,725 | $ | 65,818 | ||||||||||||||||||||||||||
Gross profit margin % | 47.6 | % | 49.4 | % | 39.5 | % | 46.2 | % | 47.3 | % | 40.3 | % | ||||||||||||||||||||||||||
Income from operations before income taxes | $ | 61,994 | $ | 211,347 | ||||||||||||||||||||||||||||||||||
Expenses not allocated to segments | ||||||||||||||||||||||||||||||||||||||
Corporate expense, net | 21,265 | 24,009 | ||||||||||||||||||||||||||||||||||||
Acquisition and restructuring related expense | 6,220 | 9,499 | ||||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 22,777 | 23,828 | ||||||||||||||||||||||||||||||||||||
Interest expense, net | 55,939 | 35,105 | ||||||||||||||||||||||||||||||||||||
Other (income) expense, net | 1,798 | 3,056 | ||||||||||||||||||||||||||||||||||||
Segment income | $ | 169,993 | $ | 144,346 | $ | 25,647 | $ | 306,844 | $ | 267,854 | $ | 38,990 | ||||||||||||||||||||||||||
Segment income margin % | 23.8 | % | 24.7 | % | 19.9 | % | 29.1 | % | 30.0 | % | 23.9 | % | ||||||||||||||||||||||||||
Depreciation | $ | 12,646 | $ | 11,952 | $ | 694 | $ | 13,006 | $ | 12,435 | $ | 571 | ||||||||||||||||||||||||||
Amortization | 5,026 | 5,026 | — | 4,609 | 4,609 | — | ||||||||||||||||||||||||||||||||
Stock-based compensation | 451 | 417 | 34 | 183 | 72 | 111 | ||||||||||||||||||||||||||||||||
Other (a) | 503 | 503 | — | 8,966 | 8,616 | 350 | ||||||||||||||||||||||||||||||||
Total adjustments | 18,626 | 17,898 | 728 | 26,764 | 25,732 | 1,032 | ||||||||||||||||||||||||||||||||
Adjusted segment income | $ | 188,619 | $ | 162,244 | $ | 26,375 | $ | 333,608 | $ | 293,586 | $ | 40,022 | ||||||||||||||||||||||||||
Adjusted segment income margin % | 26.4 | % | 27.7 | % | 20.5 | % | 31.6 | % | 32.9 | % | 24.5 | % |
(a) | The nine months ended September 30, 2023 for NAM includes miscellaneous items the Company believes are not representative of its ongoing business operations. The nine months ended October 1, 2022 includes a one-time $5.5 million expense associated with the discontinuation of a product joint development agreement, a $2.7 million non-cash increase in cost of goods sold resulting from the fair value inventory step-up adjustment recognized as part of the purchase accounting for the Specialty Lighting Business and other immaterial miscellaneous items the Company believes are not representative of its ongoing business operations. | |||||||
The nine months ended October 1, 2022 for E&RW represents $0.4 million of bad debt reserves related to certain customers impacted by the conflict between Russia and Ukraine, partially offset by subsequent collections. |
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