Employee Benefit Plans (Notes)

12 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

Employee Benefit Plans

Employee Benefit Plans

Pension and Profit-Sharing Benefits

The Company provides a defined contribution profit sharing plan for the benefit of substantially all the Company's domestic salaried and non-union hourly employees. The plan contains both contributory and noncontributory profit sharing arrangements, as defined. Aggregate charges included in the accompanying consolidated statement of income under this plan were $4.6 million, $3.7 million and $3.4 million in 2023, 2022 and 2021, respectively. Certain of the Company's non-U.S. and union hourly employees participate in defined benefit pension plans.

Plan Assets, Expenses and Obligations

Net periodic pension benefit expense recorded in the Company's consolidated statement of income for defined benefit pension plans include the following components (dollars in thousands):

	Pension Benefit
	2023		2022		2021
Service cost	$	490	$	690	$	1,280
Interest cost	1,290		890		800
Expected return on plan assets	(2,140)		(1,590)		(1,530)
Settlements and curtailments	1,020		150		—
Amortization of net loss	120		570		910
Net periodic benefit expense (a)	$	780	$	710	$	1,460

__________________________

(a) The net periodic benefit expense for the U.S. defined benefit pension plans was $0.5 million, $0.9 million and $1.0 million for 2023, 2022 and 2021, respectively. The net periodic benefit expense (income) for the non-U.S. defined benefit pension plans was $0.3 million, $(0.2) million and $0.4 million for 2023, 2022 and 2021, respectively.

The service cost component of net periodic benefit expense is recorded in cost of goods sold and selling, general and administrative expenses, while non-service cost components are recorded in other income (expense), net in the accompanying consolidated statement of income.

During 2023, the Company recognized a one-time, pre-tax settlement charge of $1.0 million related to the purchase of an annuity contract to transfer the Company's Canadian defined benefit obligations to an insurance company.

During 2022, the Company recorded a non-cash curtailment expense of $0.2 million, as it transitioned certain active employees previously participating in a defined benefit plan in the United Kingdom to a defined contribution plan, thereby eliminating future service cost accruals for all employees under this defined benefit plan.

Actuarial valuations of the Company's defined benefit pension plans were prepared as of December 31, 2023, 2022 and 2021. Weighted average assumptions used in accounting for the U.S. defined benefit pension plans are as follows:

	Pension Benefit
	2023		2022		2021
Discount rate for obligations	5.05	%	5.24	%	3.06	%
Discount rate for benefit costs	5.24	%	3.06	%	2.79	%
Rate of increase in compensation levels	N/A		N/A		N/A
Expected long-term rate of return on plan assets	6.13	%	6.13	%	6.13	%

The Company utilizes a high-quality (Aa or greater) corporate bond yield curve as the basis for its domestic discount rate for its pension benefit plans. Management believes this yield curve removes the impact of including additional required corporate bond yields (potentially considered in the above-median curve) resulting from the uncertain economic climate that does not necessarily reflect the general trend in high-quality interest rates.

Weighted average assumptions used in accounting for the non-U.S. defined benefit pension plans are as follows:

	Pension Benefit
	2023		2022		2021
Discount rate for obligations	4.70	%	4.90	%	2.10	%
Discount rate for benefit costs	4.90	%	2.10	%	1.50	%
Rate of increase in compensation levels	5.50	%	4.80	%	3.30	%
Expected long-term rate of return on plan assets	6.60	%	4.20	%	3.90	%

The following provides a reconciliation of the changes in the Company's defined benefit pension plans' projected benefit obligations and fair value of assets for each of the years ended December 31, 2023 and 2022 and the funded status as of December 31, 2023 and 2022 (dollars in thousands):

	Pension Benefit
	2023		2022
Changes in Projected Benefit Obligations
Benefit obligations at January 1	$	(25,560)	$	(37,560)
Service cost	(490)		(690)
Interest cost	(1,290)		(890)
Participant contributions	—		(10)
Actuarial (loss) gain (a)	(780)		10,260
Benefit payments	1,300		1,310
Settlements	90		—
Change in foreign currency	(740)		2,020
Projected benefit obligations at December 31 (b)	$	(27,470)	$	(25,560)
Changes in Plan Assets
Fair value of plan assets at January 1	$	25,470	$	38,130
Actual return on plan assets	1,540		(10,070)
Employer contributions	1,260		1,520
Participant contributions	—		10
Benefit payments	(1,300)		(1,310)
Settlements	(90)		—
Change in foreign currency	920		(2,810)
Fair value of plan assets at December 31 (c)	$	27,800	$	25,470
Funded status at December 31	$	330	$	(90)

__________________________

(a) The actuarial loss for the year ended December 31, 2023 was primarily due to changes in demographic assumptions as well as a decrease in the discount rate utilized in measuring the projected benefit obligations, partially offset by experience gains. The actuarial gain for the year ended December 31, 2022 was primarily due to an increase in the discount rate utilized in measuring the projected benefit obligations, partially offset by experience losses.

(b) U.S. projected benefit obligations were $13.2 million and $12.6 million at December 31, 2023 and 2022, respectively. Non-U.S. projected benefit obligations were $14.3 million and $13.0 million at December 31, 2023 and 2022, respectively.

(c) The fair value of U.S. plan assets was $9.5 million and $8.2 million at December 31, 2023 and 2022, respectively. The fair value of non-U.S. plan assets was $18.3 million and $17.3 million at December 31, 2023 and 2022, respectively.

	Pension Benefit
	2023		2022
Amounts Recognized in Balance Sheet
Other assets	$	4,680	$	4,860
Current liabilities	(310)		(310)
Noncurrent liabilities	(4,040)		(4,640)
Net asset (liability) recognized at December 31	$	330	$	(90)

	Pension Benefit
	2023		2022
Amounts Recognized in Accumulated Other Comprehensive Loss
Unrecognized prior service cost	$	20	$	160
Unrecognized net loss	7,740		7,370
Total accumulated other comprehensive loss recognized at December 31	$	7,760	$	7,530

	Accumulated Benefit Obligations				Projected Benefit Obligations
	2023		2022		2023		2022
Benefit Obligations at December 31,
Total benefit obligations	$	(27,260)	$	(25,400)	$	(27,470)	$	(25,560)
Plans with benefit obligations exceeding plan assets
Benefit obligations	$	(13,590)	$	(13,000)	$	(13,800)	$	(13,170)
Plan assets	$	9,450	$	8,220	$	9,450	$	8,220

The assumptions regarding discount rates and expected return on plan assets can have a significant impact on amounts reported for benefit plans. A 25 basis point change in benefit obligation discount rates or 50 basis point change in expected return on plan assets would have the following effect (dollars in thousands):

	Pension Benefit
	December 31, 2023 Benefit Obligation		2023 Expense
Discount rate
25 basis point increase	$	(830)	$	(30)
25 basis point decrease	$	870	$	30
Expected return on assets
50 basis point increase	N/A		$	(170)
50 basis point decrease	N/A		$	170

The Company expects to make contributions of $1.2 million to fund its pension plans during 2024.

Plan Assets

The Company's overall investment goal is to provide for capital growth with a moderate level of volatility by investing assets in targeted allocation ranges. Specific long term investment goals include total investment return, diversity to reduce volatility and risk, and to achieve an asset allocation profile that reflects the general nature and sensitivity of the plans' liabilities. Investment goals are established after a comprehensive review of current and projected financial statement requirements, plan assets and liability structure, market returns and risks as well as special requirements of the plans. The Company reviews investment goals and actual results annually to determine whether stated objectives are still relevant and the continued feasibility of achieving the objectives.

The actual weighted average asset allocation of the Company's domestic and foreign pension plans' assets at December 31, 2023 and 2022 and target allocations by class, were as follows:

	Domestic Pension						Foreign Pension
			Actual						Actual
	Target		2023		2022		Target		2023		2022
Equity securities	60	%	60	%	60	%	—	%	—	%	14	%
Fixed income	36	%	38	%	37	%	100	%	99	%	66	%
Diversified growth(a)	—	%	—	%	—	%	—	%	—	%	19	%
Cash and other	4	%	2	%	3	%	—		1	%	1	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

________________________________________

(a) Diversified growth funds invest in a broad range of asset classes including equities, investment grade and high yield bonds, commodities, property, private equity, infrastructure and currencies.

Actual allocations to each asset vary from target allocations due to periodic investment strategy changes, market value fluctuations and the timing of benefit payments and contributions. The expected long-term rate of return for both the domestic and foreign plans' total assets is based on the expected return of each of the above categories, weighted based on the target allocation for each class. Actual allocation is reviewed regularly and investments are rebalanced to their targeted allocation range when deemed appropriate.

In managing the plan assets, the Company reviews and manages risk associated with the funded status risk, interest rate risk, market risk, liquidity risk and operational risk. Investment policies reflect the unique circumstances of the respective plans and include requirements designed to mitigate these risks by including quality and diversification standards.

The following table summarizes the level under the fair value hierarchy (see Note 3, "Summary of Significant Accounting Policies") that the Company's pension plan assets are measured, on a recurring basis as of December 31, 2023 (dollars in thousands):

	Total		Level 1		Level 2		Level 3
Plan assets subject to leveling
Investment funds
Equity securities	$	5,720	$	5,720	$	—	$	—
Cash and cash equivalents	200		200		—		—
Plan assets measured at net asset value(a)
Investment funds
Fixed income	21,710
Cash and cash equivalents	170
Total	$	27,800	$	5,920	$	—	$	—

________________________________________

(a) Certain investments that are measured at fair value using the net asset value per share as a practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amount presented in the fair value of plan assets.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid during the following years (dollars in thousands):

Year ended December 31,	Pension Benefit
2024	$	1,310
2025	1,370
2026	1,410
2027	1,480
2028	1,560
Years 2029-2033	9,270